Modine Manufacturing Company
MOD Consumer Cyclical Q4 2025
Document 1
Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
Modine Reports Fourth Quarter Fiscal 2025 Results
Strong fourth quarter resulted in third consecutive year of record results
Fiscal 2026 outlook indicates continued growth
and further progress toward financial targets
Racine, WI – May 20, 2025 – Modine (NYSE: MOD), a diversified global leader in thermal management technology and solutions, today reported financial results for the quarter and fiscal year ended March 31, 2025.
| ● | Net sales of $647.2 million increased 7 percent from the prior year |
| ● | Net earnings of $50.1 million increased $24.0 million, or 92 percent, from the prior year |
| ● | Adjusted EBITDA of $104.1 million increased $25.3 million, or 32 percent, from the prior year |
| ● | Earnings per share of $0.92 increased $0.44, or 92 percent, from the prior year |
| ● | Adjusted earnings per share of $1.12 increased $0.35, or 45 percent, from the prior year |
Full-Year Highlights:
| ● | Record net sales of $2.6 billion increased 7 percent from the prior year |
| ● | Record net earnings of $185.5 million increased $22.1 million, or 14 percent, from the prior year |
| ● | Record adjusted EBITDA of $392.1 million increased $77.8 million, or 25 percent, from the prior year |
| ● | Earnings per share of $3.42 increased $0.39, or 13 percent, from the prior year |
| ● | Adjusted earnings per share of $4.05 increased $0.80, or 25 percent, from the prior year |
Fiscal 2026 Outlook:
| ● | Net sales growth between 2% to 10% |
| ● | Adjusted EBITDA range of $420 million to $450 million, resulting in growth between 7% and 15% |
“Our team delivered a third consecutive year of record revenue and adjusted EBITDA in fiscal 2025, demonstrating the power of our 80/20 transformation and our ability to deliver results despite challenging conditions in our vehicular markets,” said Modine President and Chief Executive Officer, Neil D. Brinker. “The record results were led by our data center business where our investments are driving strong returns and above-market growth. Performance Technologies reported a significant margin improvement on lower sales, which is a testament to this team’s focus on repositioning. We will continue to improve our business mix and margin profile as we move forward with our transformation.”
Fourth Quarter Financial Results
Net sales increased 7 percent to $647.2 million, compared with $603.5 million in the prior year. Sales growth was driven by higher sales in the Climate Solutions segment, partially offset by lower sales in the Performance Technologies segment resulting from market weakness across vehicular end markets.
Gross profit increased 23 percent to $166.0 million and gross margin improved by 330 basis points to 25.7 percent. The gross margin improvement was primarily driven by favorable sales volume and mix in the Climate Solutions segment, as well as the benefits from restructuring actions and cost-saving initiatives in the Performance Technologies segment.
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Selling, general and administrative (“SG&A”) expenses increased $5.9 million to $81.5 million. The increase was primarily due to higher compensation-related expenses, including increased incentive compensation resulting from improved financial results, and SG&A expenses from the acquired Scott Springfield Manufacturing business, including $3.4 million of incremental amortization expense for acquired intangible assets.
Operating income was $74.5 million, compared to $46.8 million in the prior year, an increase of 59 percent. The increase was driven by higher gross profit on higher sales volume, partially offset by higher SG&A expenses as compared to the prior year. The Company recorded $10.0 million of restructuring expenses during the fourth quarter of fiscal 2025, primarily for severance expenses. Net earnings of $50.1 million increased $24.0 million, or 92 percent, compared to $26.1 million in the prior year. Adjusted EBITDA, which excludes restructuring expenses, certain other charges, interest expense, the provision for income taxes, and depreciation and amortization expense, was $104.1 million, an increase of $25.3 million, or 32 percent, compared to $78.8 million in the prior year.
Earnings per share was $0.92, compared with $0.48 in the prior year. Adjusted earnings per share was $1.12, compared with adjusted earnings per share of $0.77 in the prior year.
Fourth Quarter Segment Review
| ● | Climate Solutions segment sales were $356.3 million, compared with $278.2 million one year ago, an increase of 28 percent. This increase was driven by higher sales of data center cooling and HVAC&R products, including incremental sales from the acquired Scott Springfield Manufacturing business. This was partially offset by lower sales of heat transfer products. The segment reported gross margin of 29.7 percent, which was 310 basis points higher than the prior year, primarily due to higher sales volume and favorable sales mix. The segment reported operating income of $61.5 million, a 45 percent increase from the prior year, and adjusted EBITDA of $76.3 million, an increase of 48 percent from the prior year. |
| ● | Performance Technologies segment sales were $294.8 million, compared with $330.0 million one year ago, a decrease of 11 percent. This decrease primarily resulted from market-related declines to automotive, off-highway and commercial vehicle customers, and a $7.6 million unfavorable foreign exchange impact. The segment reported gross margin of 20.4 percent, which was 130 basis points higher than the prior year, primarily due to benefits from restructuring actions and cost-saving initiatives. The segment reported operating income of $29.9 million, a 28 percent increase from the prior year, and adjusted EBITDA of $44.1 million, an increase of 5 percent from the prior year. |
Full-Year Financial Results
Fiscal 2025 net sales increased 7 percent to $2,583.5 million compared with $2,407.8 million in the prior year. The increase was driven by higher sales in the Climate Solutions segment, with particularly strong gains in sales of data center products, including incremental sales from the Scott Springfield acquisition. This was partially offset by lower sales in the Performance Technologies segment. Gross margin improved 310 basis points to 24.9 percent, primarily due to favorable sales mix and higher average selling prices as compared to the prior year.
The Company reported net earnings of $185.5 million compared to $163.4 million in the prior year, an improvement of $22.1 million, or 14 percent. During fiscal 2025, the Company recorded $28.2 million of restructuring expenses and $2.7 million of other charges including acquisition-related costs and environmental charges. During fiscal 2024, the Company recorded $15.0 million of restructuring expenses, a $4.0 million gain on the sale of German automotive businesses, and $6.5 million of other charges including acquisition-related costs and environmental charges. Excluding these items and depreciation and amortization expense, adjusted EBITDA was $392.1 million in fiscal 2025 and $314.3 million in fiscal 2024, an improvement of $77.8 million, or 25 percent. Earnings per share in fiscal 2025 was $3.42 compared with $3.03 in fiscal 2024, and adjusted earnings per share in fiscal 2025 was $4.05, compared with $3.25 in fiscal 2024.
Balance Sheet & Liquidity
The Company reported another year of strong cash flow. Net cash provided by operating activities for the year ended March 31, 2025, was $213.3 million, a decrease of $1.3 million compared to the prior year. Free cash flow for the year ended March 31, 2025, was $129.3 million, an increase of $2.4 million from the prior year. The favorable impact of higher operating earnings in the current year was offset by unfavorable net changes in working capital. Cash payments for restructuring activities, acquisition and integration costs, and environmental charges during the year ended March 31, 2025, increased by $17.6 million from the prior year to $31.8 million.
Total debt was $350.8 million as of March 31, 2025. Cash and cash equivalents totaled $71.6 million as of March 31, 2025. Net debt was $279.2 million as of March 31, 2025, a decrease of $92.3 million from the end of fiscal 2024.
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Outlook
“We are pleased to present our outlook for fiscal 2026, which would result in our fourth consecutive year of record results,” added Brinker. “We expect another strong year in the Climate Solutions segment, supported by our current order book for data center products and significant funnel of future opportunities. The expansions of our technology offerings and manufacturing capacity are contributing to our above-market organic growth rates. In the Performance Technologies segment, we are taking additional measures to reduce costs as our vehicular end-markets remain challenged. We believe that these actions will lead to enhanced focus while we continue to improve our margin profile.”
Brinker continued, “There is a great deal of market uncertainty due to the unknown impact of tariffs on individual businesses and on the economy as a whole. While it is nearly impossible to fully assess this impact on Modine today, we are taking actions to mitigate supply chain and other potential risks related to the global tariff situation. The current trade environment is also making it more difficult to assess the impact on our customers, including their supply chains and end-market demand. As a result, we are providing broader ranges for our financial outlook, which reflect our current best estimates for net tariff impacts, foreign exchange rates, and the overall economic environment. We will provide updates each quarter, based on this very dynamic situation, and adjust if necessary.”
Based on current exchange rates and market conditions, Modine provides its outlook for Fiscal 2026:
Fiscal 2026 | Current Outlook |
Net Sales | +2% to 10% |
Adjusted EBITDA | $420 to $450 million |
Conference Call and Webcast
Modine will conduct a conference call and live webcast, with a slide presentation, on Wednesday, May 21, 2025, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to discuss its fourth quarter and fiscal year 2025 financial results. The webcast and accompanying slides will be available on the Investor Relations section of the Modine website at www.modine.com. Participants are encouraged to log on to the webcast and conference call about ten minutes prior to the start of the event. A replay of the audio and slides will be available on the Investor Relations section of the Modine website at www.modine.com on or after May 21, 2025. A call-in replay will be available through midnight on May 28, 2025, at 877-660-6853, (international replay 201-612-7415); Conference ID# 13752316. The Company will post a transcript of the call on its website on or after May 23, 2025.
For more than 100 years, Modine has solved the toughest thermal management challenges for mission-critical applications. Our purpose of Engineering a Cleaner, Healthier World™ means we are always evolving our portfolio of technologies to provide the latest heating, cooling, and ventilation solutions. Through the hard work of more than 11,000 employees worldwide, our Climate Solutions and Performance Technologies segments advance our purpose with systems that improve air quality, reduce energy and water consumption, lower harmful emissions, enable cleaner running vehicles, and use environmentally friendly refrigerants. Modine is a global company headquartered in Racine, Wisconsin (U.S.), with operations in North America, South America, Europe, and Asia. For more information about Modine, visit www.modine.com.
This press release contains statements, including information about future financial performance and market conditions, accompanied by phrases such as “believes,” “estimates,” “expects,” “plans,” “anticipates,” “intends,” “projects,” and other similar “forward-looking” statements, as defined in the Private Securities Litigation Reform Act of 1995. Modine's actual results, performance or achievements may differ materially from those expressed or implied in these statements because of certain risks and uncertainties, including, but not limited to those described under “Risk Factors” in Item 1A of Part I of the Company's Annual Report on Form 10-K for the year ended March 31, 2024 and under Forward-Looking Statements in Item 7 of Part II of that same report and in the Company's Quarterly Report on Form 10-Q for the quarters ended June 30, 2024, September 30, 2024, and December 31, 2024. Other risks and uncertainties include, but are not limited to, the following: the impact of potential adverse developments or disruptions in the global economy and financial markets, including impacts related to inflation, energy costs, government incentive or funding programs, supply chain challenges or supplier constraints, logistical disruptions, tariffs, sanctions and other trade issues or cross-border trade restrictions; the impact of other economic, social and political conditions, changes and challenges in the markets where we operate and compete, including foreign currency exchange rate fluctuations, changes in interest rates, tightening of the credit markets, recession or recovery therefrom, restrictions associated with importing and exporting and foreign ownership, public health crises, and the general uncertainties, including the impact on demand for our products and the markets we serve from regulatory and/or policy changes that
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have been or may be implemented in the U.S. or abroad, including those related to tax and trade, climate change, public health threats, and military conflicts, including the conflicts in Ukraine and in the Middle East and tensions in the Red Sea; the overall health and pricing focus of our customers; changes or threats to the market growth prospects for our customers; our ability to successfully realize anticipated benefits, including improved profit margins and cash flow, from our strategic initiatives and our application of 80/20 principles across our businesses; our ability to be at the forefront of technological advances and the impacts of any changes in the adoption rate of technologies that we expect to drive sales growth; our ability to accelerate growth organically and through acquisitions and successfully integrate acquired businesses; our ability to successfully exit portions of our business that do not align with our strategic plans; our ability to effectively and efficiently manage our operations in response to sales volume changes, including maintaining adequate production capacity to meet demand in our growing businesses while also completing restructuring activities and realizing benefits thereof; our ability to fund our global liquidity requirements efficiently and comply with the financial covenants in our credit agreements; operational inefficiencies as a result of product or program launches, unexpected volume increases or decreases, product transfers and warranty claims; the impact on Modine of any significant increases in commodity prices, particularly aluminum, copper, steel and stainless steel (nickel) and other purchased components and related costs, and our ability to adjust product pricing in response to any such increases; our ability to recruit and maintain talent in managerial, leadership, operational and administrative functions and to mitigate increased labor costs; our ability to protect our proprietary information and intellectual property from theft or attack; the impact of any substantial disruption or material breach of our information technology systems; costs and other effects of environmental investigation, remediation or litigation and the increasing emphasis on environmental, social and corporate governance matters; our ability to realize the benefits of deferred tax assets; and other risks and uncertainties identified in our public filings with the U.S. Securities and Exchange Commission. Forward-looking statements are as of the date of this press release, and we do not assume any obligation to update any forward-looking statements.
Non-GAAP Financial Disclosures
Adjusted EBITDA, adjusted EBITDA margin, adjusted earnings per share, net debt, free cash flow, organic sales and organic sales growth (which are defined below) as used in this press release are not measures that are defined in generally accepted accounting principles (GAAP). These non-GAAP measures are used by management as performance measures to evaluate the Company’s overall financial performance and liquidity. These measures are not, and should not be viewed as, substitutes for the applicable GAAP measures, and may be different from similarly titled measures used by other companies.
Definition – Adjusted EBITDA and adjusted EBITDA margin
The Company defines adjusted EBITDA as net earnings excluding interest expense, the provision or benefit for income taxes, depreciation and amortization expenses, other income and expense, restructuring expenses, acquisition and integration costs, and certain other gains or charges. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of net sales. The Company believes that adjusted EBITDA and adjusted EBITDA margin provide relevant measures of profitability and earnings power. The Company views these financial metrics as being useful in assessing operating performance from period to period by excluding certain items that it believes are not representative of its core business. Adjusted EBITDA, when calculated for the business segments, is defined as operating income excluding depreciation and amortization expenses, restructuring expenses, and certain other gains or charges.
Definition – Adjusted earnings per share
Diluted earnings per share plus restructuring expenses, acquisition and integration costs, and excluding changes in income tax valuation allowances and certain other gains or charges. Adjusted earnings per share is an overall performance measure, not including costs associated with restructuring and acquisitions and certain other gains or charges.
Definition – Net debt
The sum of debt due within one year and long-term debt, less cash and cash equivalents. Net debt is an indicator of the Company's debt position after considering on-hand cash balances.
Definition – Free cash flow
Free cash flow represents net cash provided by operating activities less expenditures for property, plant and equipment. Free cash flow presents cash generated from operations during the period that is available for strategic capital decisions.
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Definition – Organic sales and organic sales growth
Net sales and net sales growth can be impacted by acquisitions, dispositions, and foreign currency exchange rate fluctuations. The Company defines organic sales as external net sales excluding the impact of acquisitions and the effects of foreign currency exchange rate fluctuations. Organic sales growth represents the percentage change of organic sales compared to prior year external net sales, excluding the impact of dispositions. The effect of exchange rate changes is calculated by using the same foreign currency exchange rates as those used to translate financial data for the prior period. The Company adjusts for acquisitions and dispositions by excluding net sales in the current and prior periods, respectively, for which there are no comparable sales in the reported periods. These sales growth measures provide a more consistent indication of our performance, without the effects of foreign currency exchange rate fluctuations or acquisitions and dispositions.
Forward-looking non-GAAP financial measure
The Company’s fiscal 2026 guidance includes adjusted EBITDA, as defined above, which is a non-GAAP financial measure. The fiscal 2026 guidance includes the Company’s estimates for interest expense of approximately $18 to $20 million, a provision for income taxes of approximately $84 to $92 million, and depreciation and amortization expense of approximately $75 to $79 million. The non-GAAP financial measure also excludes certain cash and non-cash expenses or gains. These expenses and gains may be significant and include items such as restructuring expenses (including severance costs and plant consolidation and relocation expenses), acquisition and integration costs, impairment charges and certain other items. The Company approved targeted headcount reductions within the Performance Technologies segment in May 2025 and, as a result, expects to record approximately $4 million of severance during the first quarter of fiscal 2026. In addition, the Company has agreed to sell its technical service center in Germany and expects to record a gain on sale of approximately $3 million during fiscal 2026 upon closing. Estimates of other expenses and gains for fiscal 2026 that will be excluded for the non-GAAP financial measure are not available due to the low visibility and unpredictability of these items.
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Modine Manufacturing Company
Consolidated statements of operations (unaudited)
(In millions, except per share amounts)
|
| Three months ended March 31, |
| Twelve months ended March 31, | ||||||||
| | 2025 |
| 2024 | | 2025 |
| 2024 | ||||
Net sales | | $ | 647.2 | | $ | 603.5 | | $ | 2,583.5 | | $ | 2,407.8 |
Cost of sales | |
| 481.2 | |
| 468.2 | |
| 1,939.7 | |
| 1,882.2 |
Gross profit | |
| 166.0 | |
| 135.3 | |
| 643.8 | |
| 525.6 |
Selling, general & administrative expenses | |
| 81.5 | |
| 75.6 | |
| 332.1 | |
| 273.9 |
Restructuring expenses | |
| 10.0 | |
| 12.9 | |
| 28.2 | |
| 15.0 |
Gain on sale of assets | | | — | | | — | | | — | | | (4.0) |
Operating income | |
| 74.5 | |
| 46.8 | |
| 283.5 | |
| 240.7 |
Interest expense | |
| (5.3) | |
| (6.3) | |
| (26.4) | |
| (24.1) |
Other expense – net | |
| (2.4) | |
| (1.0) | |
| (3.1) | |
| (2.0) |
Earnings before income taxes | |
| 66.8 | |
| 39.5 | |
| 254.0 | |
| 214.6 |
Provision for income taxes | |
| (16.7) | |
| (13.4) | |
| (68.5) | |
| (51.2) |
Net earnings | |
| 50.1 | |
| 26.1 | |
| 185.5 | |
| 163.4 |
Net earnings attributable to noncontrolling interest | |
| (0.5) | |
| (0.3) | |
| (1.5) | |
| (1.9) |
Net earnings attributable to Modine | | $ | 49.6 | | $ | 25.8 | | $ | 184.0 | | $ | 161.5 |
| | | | | | | | | | | | |
Net earnings per share attributable to Modine shareholders – diluted | | $ | 0.92 | | $ | 0.48 | | $ | 3.42 | | $ | 3.03 |
| | | | | | | | | | | | |
Weighted-average shares outstanding – diluted | |
| 53.9 | |
| 53.8 | |
| 53.9 | |
| 53.4 |
Condensed consolidated balance sheets (unaudited)
(In millions)
|
| March 31, 2025 |
| March 31, 2024 | ||
Assets | | | | | | |
Cash and cash equivalents | | $ | 71.6 |
| $ | 60.1 |
Trade receivables | |
| 478.9 |
| | 422.9 |
Inventories | |
| 340.9 |
| | 357.9 |
Other current assets | |
| 69.8 |
| | 53.1 |
Total current assets | |
| 961.2 |
| | 894.0 |
Property, plant and equipment – net | |
| 390.5 |
| | 365.7 |
Intangible assets – net | |
| 146.7 |
| | 188.3 |
Goodwill | |
| 233.9 |
| | 230.9 |
Deferred income taxes | |
| 67.0 |
| | 75.1 |
Other noncurrent assets | |
| 118.3 |
| | 97.5 |
Total assets | | $ | 1,917.6 |
| $ | 1,851.5 |
| | | | | | |
Liabilities and shareholders’ equity | | | | | | |
Debt due within one year | | $ | 54.1 | | $ | 31.7 |
Accounts payable | |
| 290.8 | |
| 283.4 |
Other current liabilities | |
| 196.1 | |
| 230.7 |
Total current liabilities | |
| 541.0 | |
| 545.8 |
Long-term debt | |
| 296.7 | |
| 399.9 |
Other noncurrent liabilities | |
| 161.7 | |
| 150.3 |
Total liabilities | |
| 999.4 | |
| 1,096.0 |
Total equity | |
| 918.2 | |
| 755.5 |
Total liabilities & equity | | $ | 1,917.6 | | $ | 1,851.5 |
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Modine Manufacturing Company
Condensed consolidated statements of cash flows (unaudited)
(In millions)
|
| Twelve months ended March 31, | ||||
| | 2025 |
| 2024 | ||
Cash flows from operating activities: | | | | | | |
Net earnings | | $ | 185.5 | | $ | 163.4 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | | | | | | |
Depreciation and amortization | |
| 77.7 | |
| 56.1 |
Stock-based compensation expense | |
| 26.4 | |
| 10.8 |
Deferred income taxes | |
| 6.5 | |
| 6.2 |
Gain on sale of assets | | | — | | | (4.0) |
Other – net | |
| 6.9 | |
| 6.1 |
Changes in operating assets and liabilities: | | | | | | |
Trade accounts receivable | |
| (61.2) | |
| (8.3) |
Inventories | |
| 13.6 | |
| (17.3) |
Accounts payable | |
| 10.5 | |
| (59.1) |
Accrued compensation and employee benefits | | | 1.6 | | | 15.2 |
Contract liabilities | | | (44.5) | | | 58.3 |
Other assets | | | 15.3 | | | 12.0 |
Other liabilities | |
| (25.0) | |
| (24.8) |
Net cash provided by operating activities | |
| 213.3 | |
| 214.6 |
| | | | | | |
Cash flows from investing activities: | | | | | | |
Expenditures for property, plant and equipment | |
| (84.0) | |
| (87.7) |
Business acquisitions, net of cash acquired | | | (3.4) | | | (186.2) |
Other – net | |
| 0.8 | |
| (9.5) |
Net cash used for investing activities | |
| (86.6) | |
| (283.4) |
| | | | | | |
Cash flows from financing activities: | | | | | | |
Net (decrease) increase in debt | |
| (82.5) | |
| 78.4 |
Purchases of treasury stock | | | (30.9) | | | (17.7) |
Other – net | |
| (0.2) | |
| 2.0 |
Net cash (used for) provided by financing activities | |
| (113.6) | |
| 62.7 |
| | | | | | |
Effect of exchange rate changes on cash | |
| (1.5) | |
| (0.8) |
| | | | | | |
Net increase (decrease) in cash, cash equivalents and restricted cash | |
| 11.6 | |
| (6.9) |
| | | | | | |
Cash, cash equivalents and restricted cash – beginning of period | |
| 60.3 | |
| 67.2 |
| | | | | | |
Cash, cash equivalents and restricted cash – end of period | | $ | 71.9 | | $ | 60.3 |
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Modine Manufacturing Company
Segment operating results (unaudited)
(In millions)
|
| Three months ended March 31, |
| Twelve months ended March 31, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Net sales: | | | | | | | | | | | | |
Climate Solutions | | $ | 356.3 | | $ | 278.2 | | $ | 1,440.8 | | $ | 1,108.1 |
Performance Technologies | |
| 294.8 | |
| 330.0 | |
| 1,163.5 | |
| 1,321.3 |
Segment total | |
| 651.1 | |
| 608.2 | |
| 2,604.3 | |
| 2,429.4 |
Corporate and eliminations | |
| (3.9) | |
| (4.7) | |
| (20.8) | |
| (21.6) |
Net sales | | $ | 647.2 | | $ | 603.5 | | $ | 2,583.5 | | $ | 2,407.8 |
|
| Three months ended March 31, |
|
| Twelve months ended March 31, |
| ||||||||||||||||||
| | 2025 | | | 2024 |
| | 2025 | | | 2024 |
| ||||||||||||
|
| $’s |
| % of sales |
| | $’s |
| % of sales |
| | $’s |
| % of sales |
| | $’s |
| % of sales |
| ||||
Gross profit: | | | | | | | | | | | | | | | | | | | | | | | | |
Climate Solutions | | $ | 105.9 | | 29.7 | % | | $ | 74.1 |
| 26.6 | % | | $ | 416.1 | | 28.9 | % | | $ | 296.9 |
| 26.8 | % |
Performance Technologies | |
| 60.1 | | 20.4 | % | |
| 63.1 |
| 19.1 | % | |
| 230.4 | | 19.8 | % | |
| 229.6 |
| 17.4 | % |
Segment total | |
| 166.0 | | 25.5 | % | |
| 137.2 |
| 22.6 | % | |
| 646.5 | | 24.8 | % | |
| 526.5 |
| 21.7 | % |
Corporate and eliminations | |
| — | | — | | |
| (1.9) |
| — | | |
| (2.7) | | — | | |
| (0.9) |
| — | |
Gross profit | | $ | 166.0 | | 25.7 | % | | $ | 135.3 |
| 22.4 | % | | $ | 643.8 | | 24.9 | % | | $ | 525.6 |
| 21.8 | % |
|
| Three months ended March 31, |
| Twelve months ended March 31, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Operating income: | | |
| | |
| | |
| | |
|
Climate Solutions | | $ | 61.5 | | $ | 42.5 | | $ | 248.4 | | $ | 178.6 |
Performance Technologies | |
| 29.9 | |
| 23.4 | |
| 108.0 | |
| 111.7 |
Segment total | |
| 91.4 | |
| 65.9 | |
| 356.4 | |
| 290.3 |
Corporate and eliminations | |
| (16.9) | |
| (19.1) | |
| (72.9) | |
| (49.6) |
Operating income | | $ | 74.5 | | $ | 46.8 | | $ | 283.5 | | $ | 240.7 |
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Modine Manufacturing Company
Adjusted financial results (unaudited)
(In millions, except per share amounts)
|
| Three months ended March 31, |
| Twelve months ended March 31, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Net earnings | | $ | 50.1 | | $ | 26.1 | | $ | 185.5 | | $ | 163.4 |
Interest expense | |
| 5.3 | |
| 6.3 | |
| 26.4 | |
| 24.1 |
Provision for income taxes | |
| 16.7 | |
| 13.4 | |
| 68.5 | |
| 51.2 |
Depreciation and amortization expense | |
| 19.2 | |
| 15.0 | |
| 77.7 | |
| 56.1 |
Other expense – net | |
| 2.4 | |
| 1.0 | |
| 3.1 | |
| 2.0 |
Restructuring expenses (a) | |
| 10.0 | |
| 12.9 | |
| 28.2 | |
| 15.0 |
Acquisition and integration costs (b) | |
| 0.3 | |
| 4.1 | |
| 2.3 | |
| 4.1 |
Environmental charges (c) | |
| 0.1 | |
| — | |
| 0.4 | |
| 2.4 |
Gain on sale of assets (d) | | | — | | | — | | | — | | | (4.0) |
Adjusted EBITDA | | $ | 104.1 | | $ | 78.8 | | $ | 392.1 | | $ | 314.3 |
| | | | | | | | | | | | |
Net earnings per share attributable to Modine shareholders - diluted | | $ | 0.92 | | $ | 0.48 | | $ | 3.42 | | $ | 3.03 |
Restructuring expenses (a) | |
| 0.16 | |
| 0.23 | |
| 0.45 | |
| 0.26 |
Acquisition and integration costs (b) | | | 0.04 | | | 0.06 | | | 0.18 | | | 0.06 |
Environmental charges (c) | |
| — | |
| — | |
| — | |
| 0.03 |
Gain on sale of assets (d) | | | — | | | — | | | — | | | (0.13) |
Adjusted earnings per share | | $ | 1.12 | | $ | 0.77 | | $ | 4.05 | | $ | 3.25 |
____ | | | | | | | | | | | | |
| (a) | Restructuring expenses primarily consist of employee severance expenses, the majority of which were recorded within the Performance Technologies segment, and equipment transfer costs. The tax benefit related to restructuring expenses during the fourth quarter of fiscal 2025 and fiscal 2024 was $1.5 million and $0.5 million, respectively. The tax benefit related to restructuring expenses during fiscal 2025 and fiscal 2024 was $4.0 million and $1.0 million, respectively. |
| (b) | Acquisition and integration costs primarily relate to the Company’s acquisition of Scott Springfield Manufacturing, a leading provider of air handling units for the data center, telecommunications, healthcare, and aerospace markets, on March 1, 2024. The acquisition and integration costs primarily include fees for i) transaction advisors, ii) legal, accounting, and other professional services, and iii) incremental costs directly associated with integration activities. The adjustments in both fiscal 2024 and 2025 also included $1.6 million recorded at Corporate for the impact of an inventory purchase accounting adjustment. The Company wrote up acquired inventory to its estimated fair value and charged the write-up to cost of sales as the underlying inventory was sold. In addition, for purposes of calculating adjusted EPS, the Company adjusted for $10.6 million of incremental amortization expense recorded in the Climate Solutions segment during fiscal 2025 associated with an acquired order backlog intangible asset. The tax benefit related to the acquisition related costs and adjustments during the fourth quarter of fiscal 2025 and fiscal 2024 was $0.7 million and $0.8 million, respectively. The tax benefit related to the acquisition related costs and adjustments during fiscal 2025 was $2.9 million. |
| (c) | Environmental charges, including related legal costs, are recorded as SG&A expenses at Corporate and relate to previously-owned facilities. The tax benefit related to environmental charges during fiscal 2025 and fiscal 2024 was $0.1 million and $0.6 million, respectively. |
| (d) | The Company’s sale of three automotive businesses based in Germany closed on October 31, 2023. As a result of the sale, the Company recorded a $4.0 million gain on sale at Corporate during the third quarter of fiscal 2024. The tax benefit associated with the sale totaled $3.1 million. |
9
Modine Manufacturing Company
Segment adjusted financial results (unaudited)
(In millions)
|
| Three months ended March 31, 2025 |
| Three months ended March 31, 2024 |
| ||||||||||||||||||||
|
| Climate |
| Performance |
| Corporate and |
|
| |
| Climate |
| Performance |
| Corporate and |
|
| |
| ||||||
| | Solutions | | Technologies | | eliminations | | Total | | Solutions | | Technologies | | eliminations | | Total |
| ||||||||
Operating income | | $ | 61.5 | | $ | 29.9 | | $ | (16.9) | | $ | 74.5 | | $ | 42.5 | | $ | 23.4 | | $ | (19.1) | | $ | 46.8 | |
Depreciation and amortization expense | |
| 11.6 | |
| 7.4 | |
| 0.2 | |
| 19.2 | |
| 7.8 | |
| 7.1 | |
| 0.1 | |
| 15.0 | |
Restructuring expenses (a) | |
| 3.2 | |
| 6.8 | |
| — | |
| 10.0 | |
| 1.3 | |
| 11.6 | |
| — | |
| 12.9 | |
Acquisition and integration costs (a) | |
| — | |
| — | |
| 0.3 | |
| 0.3 | |
| — | |
| — | |
| 4.1 | |
| 4.1 | |
Environmental charges (a) | |
| — | |
| — | |
| 0.1 | |
| 0.1 | |
| — | |
| — | |
| — | |
| — | |
Adjusted EBITDA | | $ | 76.3 | | $ | 44.1 | | $ | (16.3) | | $ | 104.1 | | $ | 51.6 | | $ | 42.1 | | $ | (14.9) | | $ | 78.8 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Net sales | | $ | 356.3 | | $ | 294.8 | | $ | (3.9) | | $ | 647.2 | | $ | 278.2 | | $ | 330.0 | | $ | (4.7) | | $ | 603.5 | |
Adjusted EBITDA margin | |
| 21.4 | % |
| 15.0 | % |
| | |
| 16.1 | % |
| 18.5 | % |
| 12.8 | % |
|
| |
| 13.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
| Twelve months ended March 31, 2025 |
| Twelve months ended March 31, 2024 |
| ||||||||||||||||||||
|
| Climate |
| Performance |
| Corporate and |
|
| |
| Climate |
| Performance |
| Corporate and |
|
| |
| ||||||
| | Solutions | | Technologies | | eliminations | | Total | | Solutions | | Technologies | | eliminations | | Total |
| ||||||||
Operating income | | $ | 248.4 | | $ | 108.0 | | $ | (72.9) | | $ | 283.5 | | $ | 178.6 | | $ | 111.7 | | $ | (49.6) | | $ | 240.7 | |
Depreciation and amortization expense | |
| 48.3 | | | 28.7 | | | 0.7 | |
| 77.7 | |
| 26.5 | |
| 28.7 | |
| 0.9 | |
| 56.1 | |
Restructuring expenses (a) | |
| 6.0 | | | 20.5 | | | 1.7 | |
| 28.2 | |
| 3.0 | |
| 12.0 | |
| — | |
| 15.0 | |
Acquisition and integration costs (a) | |
| — | | | — | | | 2.3 | |
| 2.3 | |
| — | |
| — | |
| 4.1 | |
| 4.1 | |
Environmental charges (a) | |
| — | | | — | | | 0.4 | |
| 0.4 | |
| — | |
| — | |
| 2.4 | |
| 2.4 | |
Gain on sale of assets (a) | | | — | | | — | | | — | | | — | | | — | | | — | | | (4.0) | | | (4.0) | |
Adjusted EBITDA | | $ | 302.7 | | $ | 157.2 | | $ | (67.8) | | $ | 392.1 | | $ | 208.1 | | $ | 152.4 | | $ | (46.2) | | $ | 314.3 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Net sales | | $ | 1,440.8 | | $ | 1,163.5 | | $ | (20.8) | | $ | 2,583.5 | | $ | 1,108.1 | | $ | 1,321.3 | | $ | (21.6) | | $ | 2,407.8 | |
Adjusted EBITDA margin | |
| 21.0 | % |
| 13.5 | % |
| | |
| 15.2 | % |
| 18.8 | % |
| 11.5 | % |
|
| |
| 13.1 | % |
____ | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | See the Adjusted EBITDA reconciliations on the previous page for information on restructuring expenses and other adjustments. |
10
Modine Manufacturing Company
Net debt (unaudited)
(In millions)
|
| March 31, 2025 |
| March 31, 2024 | ||
Debt due within one year | | $ | 54.1 | | $ | 31.7 |
Long-term debt | |
| 296.7 | |
| 399.9 |
Total debt | |
| 350.8 | |
| 431.6 |
| | | | | | |
Less: cash and cash equivalents | |
| 71.6 | |
| 60.1 |
Net debt | | $ | 279.2 | | $ | 371.5 |
Free cash flow (unaudited)
(In millions)
|
| Three months ended March 31, |
| Twelve months ended March 31, | ||||||||
|
| 2025 |
| 2024 | | 2025 |
| 2024 | ||||
Net cash provided by operating activities | | $ | 54.8 | | $ | 39.6 | | $ | 213.3 | | $ | 214.6 |
Expenditures for property, plant and equipment | |
| (27.7) | |
| (43.9) | |
| (84.0) | |
| (87.7) |
Free cash flow | | $ | 27.1 | | $ | (4.3) | | $ | 129.3 | | $ | 126.9 |
Organic sales and organic sales growth (unaudited)
(In millions)
|
| Three months ended March 31, 2025 |
| Three months ended March 31, 2024 | | |
| |||||||||||||||||
|
| | |
| Effect of |
| |
| |
| | |
| | |
| Sales |
| Organic | | ||||
| | External | | Exchange Rate | | Effect of | | Organic | | External | | Effect of | | Excluding | | Sales | | |||||||
| | Sales | | Changes | | Acquisitions | | Sales | | Sales | | Dispositions | | Dispositions | | Growth | | |||||||
Net sales: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
|
Climate Solutions | | $ | 356.3 | | $ | 3.3 | | $ | (53.0) | | $ | 306.6 | | $ | 278.2 | | $ | — | | $ | 278.2 | | 10 | % |
Performance Technologies | |
| 290.9 | |
| 7.6 | |
| — | |
| 298.5 | |
| 325.3 | |
| — | |
| 325.3 | | (8) | % |
Net Sales | | $ | 647.2 | | $ | 10.9 | | $ | (53.0) | | $ | 605.1 | | $ | 603.5 | | $ | — | | $ | 603.5 | | — | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
|
| Twelve months ended March 31, 2025 |
| Twelve months ended March 31, 2024 | | |
| |||||||||||||||||
|
| | |
| Effect of |
| |
| |
| | |
| | |
| Sales |
| Organic | | ||||
| | External | | Exchange Rate | | Effect of | | Organic | | External | | Effect of | | Excluding | | Sales | | |||||||
| | Sales | | Changes | | Acquisitions | | Sales | | Sales | | Dispositions | | Dispositions | | Growth | | |||||||
Net sales: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
|
Climate Solutions | | $ | 1,440.6 | | $ | 0.5 | | $ | (221.1) | | $ | 1,220.0 | | $ | 1,108.1 | | $ | — | | $ | 1,108.1 | | 10 | % |
Performance Technologies | |
| 1,142.9 | |
| 17.4 | |
| — | |
| 1,160.3 | |
| 1,299.7 | |
| (54.2) | |
| 1,245.5 | | (7) | % |
Net Sales | | $ | 2,583.5 | | $ | 17.9 | | $ | (221.1) | | $ | 2,380.3 | | $ | 2,407.8 | | $ | (54.2) | | $ | 2,353.6 | | 1 | % |
11
12
Document 2
| Fourth Quarter Fiscal 2025 May 21, 2025 |
| NEIL BRINKER President and Chief Executive Officer MICK LUCARELI Executive Vice President and Chief Financial Officer KATHY POWERS Vice President, Treasurer, and Investor Relations 2 |
| Forward-Looking Statements 3 This presentation contains statements, including information about future financial performance and market conditions, accompanied by phrases such as “believes,” “estimates,” “expects,” “plans,” “anticipates,” “intends,” “projects,” and other similar “forward-looking” statements, as defined in the Private Securities Litigation Reform Act of 1995. Modine's actual results, performance or achievements may differ materially from those expressed or implied in these statements because of certain risks and uncertainties, including, but not limited to those described under “Risk Factors” in Item 1A of Part I of the Company's Annual Report on Form 10-K for the year ended March 31, 2024 and under Forward-Looking Statements in Item 7 of Part II of that same report and in the Company's Quarterly Report on Form 10-Q for the quarters ended June 30, 2024, September 30, 2024, and December 31, 2024. Other risks and uncertainties include, but are not limited to, the following: the impact of potential adverse developments or disruptions in the global economy and financial markets, including impacts related to inflation, energy costs, government incentive or funding programs, supply chain challenges or supplier constraints, logistical disruptions, tariffs, sanctions and other trade issues or cross-border trade restrictions; the impact of other economic, social and political conditions, changes and challenges in the markets where we operate and compete, including foreign currency exchange rate fluctuations, changes in interest rates, tightening of the credit markets, recession or recovery therefrom, restrictions associated with importing and exporting and foreign ownership, public health crises, and the general uncertainties, including the impact on demand for our products and the markets we serve from regulatory and/or policy changes that have been or may be implemented in the U.S. or abroad, including those related to tax and trade, climate change, public health threats, and military conflicts, including the conflicts in Ukraine and in the Middle East and tensions in the Red Sea; the overall health and pricing focus of our customers; changes or threats to the market growth prospects for our customers; our ability to successfully realize anticipated benefits, including improved profit margins and cash flow, from our strategic initiatives and our application of 80/20 principles across our businesses; our ability to be at the forefront of technological advances and the impacts of any changes in the adoption rate of technologies that we expect to drive sales growth; our ability to accelerate growth organically and through acquisitions and successfully integrate acquired businesses; our ability to successfully exit portions of our business that do not align with our strategic plans; our ability to effectively and efficiently manage our operations in response to sales volume changes, including maintaining adequate production capacity to meet demand in our growing businesses while also completing restructuring activities and realizing benefits thereof; our ability to fund our global liquidity requirements efficiently and comply with the financial covenants in our credit agreements; operational inefficiencies as a result of product or program launches, unexpected volume increases or decreases, product transfers and warranty claims; the impact on Modine of any significant increases in commodity prices, particularly aluminum, copper, steel and stainless steel (nickel) and other purchased components and related costs, and our ability to adjust product pricing in response to any such increases; our ability to recruit and maintain talent in managerial, leadership, operational and administrative functions and to mitigate increased labor costs; our ability to protect our proprietary information and intellectual property from theft or attack; the impact of any substantial disruption or material breach of our information technology (“IT”) systems; costs and other effects of environmental investigation, remediation or litigation and the increasing emphasis on environmental, social and corporate governance matters; our ability to realize the benefits of deferred tax assets; and other risks and uncertainties identified in our public filings with the U.S. Securities and Exchange Commission. Forward-looking statements are as of the date of this presentation, and we do not assume any obligation to update any forward-looking statements. |
| FY24 FY25 Adjusted EBITDA & EBITDA Margin* 4 ▪ Third consecutive record year including strong fourth quarter performance ▪ Successfully executing on strategy to drive profitable top-line growth and expand EBITDA margins ▪ Organic and inorganic investments in the Climate Solutions segment have driven significant growth, now greatest revenue contributor ▪ Rate of earnings growth far outpacing revenue growth; driven by 80/20 and a favorable business mix shift Opening Comments (In millions) $2,407.8 $2,583.5 $314.3 $392.1 13.1% 15.2% FY24 FY25 Net Sales * See appendix for the full GAAP income statement and Non-GAAP reconciliations |
| Climate Solutions 5 ▪ Outstanding year; 30% increase in revenues, 45% increase in adjusted EBITDA ▪ Data center revenue increased 119% to $644 million, and included $197 million of data center revenue from Scott Springfield acquisition ▪ Strong organic growth in North America, increasing production capacity in Rockbridge, VA and Grenada, MS ▪ Launching modular data center cooling solution in North America ▪ India expansion on track to launch production in Q2 FY26 ▪ Completed acquisition of AbsolutAire, complementary heating products and distribution channel ▪ Business development team working on other growth initiatives FY24 FY25 (In millions) Net Sales $1,108.1 $1,440.8 FY24 FY25 Adjusted EBITDA & EBITDA Margin* $208.1 $302.7 18.8% 21.0% * See appendix for the full GAAP income statement and Non-GAAP reconciliations |
| Performance Technologies ▪ Delivered strong fourth quarter despite challenging market conditions ▪ Vehicular markets remain in an extended downturn, with further delays in launch and ramp of EV programs ▪ Simplifying structure to two product groups: Heavy-Duty Equipment and On-Highway Applications ▪ Implementing further actions to heighten focus and reduce costs ▪ Focusing on controllable areas and taking decisive actions during period of great uncertainty regarding tariffs and global trade policies ▪ Strong competitive position due to global footprint and local-for-local approach 6 FY24 FY25 Adjusted EBITDA & EBITDA Margin* $152.4 $157.2 11.5% 13.5% FY24 FY25 (In millions) Net Sales $1,321.3 $1,163.5 * See appendix for the full GAAP income statement and Non-GAAP reconciliations |
| Climate Solutions 7 Q4 FY24 Q4 FY25 Net Sales $278.2 $356.3 (In millions) Data Centers ▪ Strong growth from the SSM acquisition and organic growth driven by NA colocation customers HVAC&R ▪ Improvement driven by late season heating demand, Indoor Air Quality (IAQ) sales across all products and refrigeration coolers Heat Transfer Products ▪ Lower sales to most end markets, driven by softer market demand and customer in-sourcing decisions; partially offset by heatpump 80% 27% -11% Q4 FY24 Q4 FY25 Adjusted EBITDA & EBITDA Margin* $51.6 $76.3 18.5% 21.4% ▪ Favorable sales mix, with higher data center sales benefitting adjusted EBITDA margin, resulting in a 290 bps improvement ▪ Significant margin improvement from the SSM acquisition, along with organic volume gains ▪ Earnings and revenue outlooks remain strong in targeted markets, particularly for data centers; business development team is focused on bolt-on acquisition opportunities * See appendix for the full GAAP income statement and Non-GAAP reconciliations |
| Performance Technologies Q4 FY24 Q4 FY25 Adjusted EBITDA & EBITDA Margin* Q4 FY24 Q4 FY25 Net Sales $330.0 $294.8 $42.1 $44.1 (In millions) Advanced Solutions ▪ Lower sales of EV auto and EVantage products, partially offset by higher sales to CV specialty vehicle and military customers Liquid-Cooled Applications ▪ Lower demand from CV and off-highway (OH) markets, with continued softness in Europe, Asia and NA Air-Cooled Applications ▪ 29% increase in Genset sales, offset by lower Auto, OH and CV demand ▪ Revenue impacted by broad market weakness with no impact from divestitures; organic sales decreased 8% ▪ 220 bps increase in adjusted EBITDA margin due to improved operating efficiency ▪ Recent cost reduction actions resulted in increased Q4 plant performance and lower SG&A ▪ Achieved Q4 and full year earnings improvement despite lower volumes; 80/20 disciplines will remain the foundation -12% -7% -13% 12.8% 15.0% * See appendix for the full GAAP income statement and Non-GAAP reconciliations 8 |
| Q4 FY24 Q4 FY25 Adjusted EBITDA & EBITDA Margin* Financial Review (In millions) Q4 FY25 Q4 FY24 Net Sales $647.2 $603.5 Gross Profit 166.0 135.3 % of net sales 25.7% 22.4% SG&A expenses 81.5 75.6 % of net sales 12.6% 12.5% Operating Income 74.5 46.8 % of net sales 11.5% 7.8% Adjusted EBITDA* 104.1 78.8 % of net sales 16.1% 13.1% Adjusted EPS* $1.12 $0.77 (In millions) $603.5 $647.2 $78.8 $104.1 ▪ Sales improvement driven by organic data center growth and the SSM acquisition; partially offset by anticipated weakness in PT vehicular markets ▪ Strong earnings conversion with 330 bps gross margin improvement driven by the acquisition and productivity improvements at our plants ▪ Increased SG&A due to the acquisition, including higher amortization and compensation expenses ▪ Exceptional adjusted EBITDA growth of 32%, along with a 300 bps margin improvement; the 13th consecutive quarter of margin improvement ▪ Robust adjusted EPS growth of 45% driven by higher earnings 13.1% 16.1% * See appendix for the full GAAP income statement and Non-GAAP reconciliations 9 Q4 FY24 Q4 FY25 Net Sales |
| Cash Flow and Metrics Cash Flow and Metrics FY25 YTD Free Cash Flow $129 million Net Debt (as of March 31) $279 million Leverage Ratio (as of March 31) 0.7x Capital Expenditures $84 million Modine Maintains Strong Balance Sheet & Liquidity ▪ Solid free cash flow in the quarter; $27M ▪ Net debt decreased $92M YoY; decreased $8M during the quarter ▪ Share repurchase program approved this quarter; 230,000 shares repurchased during March ▪ Balance sheet remains strong to support both organic growth and acquisition initiatives * See appendix for the full GAAP income statement and Non-GAAP reconciliations 10 |
| Fiscal 2026 Outlook Metrics Guidance Comments Net Sales +2% to +10% $2.64B to $2.84B Adjusted EBITDA* $420M to $450M +7% to +15% FY26 Modine Segment Sales Outlook Climate Solutions +12% to +20% Performance Technologies (2%) to (12%) * See appendix for the full GAAP income statement and Non-GAAP reconciliations Introducing our Financial Outlook ▪ Providing wider revenue and earnings ranges to account for significant economic and tariff uncertainties ▪ Anticipating revenue growth of 2% to 10% ▪ Another year of strong growth in Climate Solutions, including more than 30% growth in data center sales ▪ Assuming Performance Technologies markets remain depressed throughout calendar 2025 ▪ Forecasting 7% to 15% adjusted EBITDA growth, which would result in the fourth consecutive year of record results ▪ Expecting another year of strong free cash flow, exceeding the prior fiscal year, with a range of 6% - 7% of sales ▪ Interest, depreciation and income tax assumptions included in the appendix 11 |
| Appendix 12 |
| Tariff Disclosures 13 Tariff Environment and Mitigation Actions Country Segment Exposure Short-term Mitigation Longer-term Mitigation Canada Climate Solutions Production of data center products for U.S. customers; manage via contractual pass-through arrangements Explore capacity expansion in U.S. to support continued growth Mexico Climate Solutions & Performance Technologies Production of heat transfer components for U.S. customers; manage via contractual pass-through arrangements and surcharges to recover costs on a case-by-case basis Use existing U.S. capacity where required to meet customer commitments as necessary China Performance Technologies Less than 10% of U.S. supply is sourced from China; manage via contractual pass-through arrangements and surcharges to recover costs on a case-by-case basis Continue process of reducing dependance on China for supply and resource to lower cost suppliers U.S. Climate Solutions & Performance Technologies Existing U.S. footprint supports local demand with opportunity to expand if necessary Provides competitive advantage to win business from non-U.S. suppliers Modine is in a very strong position to mitigate tariff exposure given the direction 80/20 principles have been leading us ▪ Difficult to predict the impact of tariffs on our supply chain as well as on our customers ▪ Pricing actions are being implemented on a case-by-case basis in all supplier and customer interactions ▪ No major lag in recovering tariff costs is anticipated ▪ Overall uncertainty is factored into our financial guidance |
| GAAP Income Statement 14 |
| Non-GAAP Reconciliations* 15 * See the footnotes on slide 16 for additional information regarding these adjustments. |
| Non-GAAP Reconciliations 16 |
| Non-GAAP Reconciliations 17 (a) See the adjusted financial results on slide 15 and related footnotes on slide 16 for additional information regarding these adjustments. |
| Non-GAAP Reconciliations 18 Modine Manufacturing Company Net debt (unaudited) (In millions) March 31, 2025 December 31, 2024 March 31, 2024 Debt due within one year $ 54.1 $ 40.8 $ 31.7 Long-term debt 296.7 330.0 399.9 Total debt 350.8 370.8 431.6 Less: cash and cash equivalents 71.6 83.8 60.1 Net debt $ 279.2 $ 287.0 $ 371.5 |
| Non-GAAP Reconciliations 19 |
| Forward-Looking Non-GAAP Financial Measure 20 The Company’s fiscal 2026 guidance includes adjusted EBITDA, which is a non-GAAP financial measure. The full-year fiscal 2026 guidance includes the Company’s estimates for interest expense of approximately $18 to $20 million, a provision for income taxes of approximately $84 to $92 million, and depreciation and amortization expense of approximately $75 to $79 million. The non-GAAP financial measure also excludes certain cash and non-cash expenses or gains. These expenses and gains may be significant and include items such as restructuring expenses (including severance and equipment transfer costs), acquisition and integration costs, impairment charges and certain other items. The Company approved targeted headcount reductions within the Performance Technologies segment in May 2025 and, as a result, expects to record approximately $4 million of severance during the first quarter of fiscal 2026. In addition, the Company has agreed to sell its technical service center in Germany and expects to record a gain on sale of approximately $3 million during fiscal 2026 upon closing. Estimates of other expenses and gains for fiscal 2026 that will be excluded for the non-GAAP financial measure are not available due to the low visibility and unpredictability of these items. |
