Modine Manufacturing Co 8-K, filed Aug 3, 2020
Modine Manufacturing Co (MOD)
8-K
2020-08-03
For: 2020-08-03
View Original
Added on
April 11, 2026
About this 8-K
Modine Manufacturing Co filed this 8-K on August 3, 2020.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 3, 2020
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification Number)
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code:
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(
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230 .40 5 of this chapter) or Rule
12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 7.01 |
Regulation FD Disclosure
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Effective April 1, 2020, Modine Manufacturing Company (the “Company”) began managing its global automotive business separate from the other businesses within the
previously-reported Vehicular Thermal Solutions ("VTS") segment. The Company is managing the automotive business as the Automotive segment as it targets the sale or eventual exit of its underlying automotive business operations. The other
businesses of the VTS segment, including the commercial vehicle and off-highway businesses, are being managed as the Heavy Duty Equipment segment. As a result, beginning with the reporting of its first quarter fiscal 2021 results, the Company will
report its financial performance based upon the following four reportable segments:
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Commercial and Industrial Solutions (“CIS”)
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Building HVAC Systems (“BHVAC”)
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Heavy Duty Equipment (“HDE”)
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Automotive
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The Company’s new reporting segments are consistent with how the Company’s chief operating decision maker is assessing operating performance and allocating capital
following the realignment of its segment structure. The segment realignment had no impact on the CIS and BHVAC segments or on the Company’s consolidated financial position, results of operations, and cash flows.
In addition, the Company is replacing its historical key non-GAAP performance metric, Adjusted Operating Income, with Adjusted EBITDA. The Company defines Adjusted
EBITDA as net earnings based on generally accepted accounting principles in the United States ("GAAP") excluding interest expense, the provision or benefit for income taxes, depreciation and amortization expenses, other income and expense,
restructuring expenses, impairment charges, costs associated with the review of strategic alternatives for and separation and potential sale of the automotive business and certain other gains or charges. The Company
believes that Adjusted EBITDA provides a relevant measure of profitability and earnings power. The Company views this financial metric as being useful to assess operating performance from period to period by excluding certain items that it
believes are not representative of its core business. The Company's chief operating decision maker evaluates the financial performance of the business segments based on Adjusted EBITDA. Adjusted EBITDA, when calculated for the business segments,
represents GAAP operating income excluding depreciation and amortization expenses, restructuring expenses, impairment charges, and certain other gains or charges.
The Company is furnishing this Form 8-K to provide investors with historical segment and Adjusted EBITDA information consistent with its new reporting structure. The
schedules in Exhibit 99.1 provide unaudited financial information on the basis of the Company’s new reporting segments for the previously-reported quarters in fiscal 2020.
The information in this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or
otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific
reference in such filing.
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| Item 9.01 |
Financial Statements and Exhibits
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| (d) |
Exhibits
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The following exhibits are being furnished herewith:
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Recast unaudited financial information – for the quarter ended June 30, 2019; the quarter ended September 30, 2019; the quarter ended December 31, 2019; and the
quarter and fiscal year ended March 31, 2020.
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104
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Cover Page Interactive Data File (formatted as Inline XBRL)
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| Modine Manufacturing Company | |
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By: /s/ Michael B. Lucareli
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Michael B. Lucareli
Vice President, Finance and Chief Financial Officer
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| Date: August 3, 2020 | |
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Exhibit 99.1
Modine Manufacturing Company
Segment operating results
Recast for segment realignment (unaudited)
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(In millions)
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Three months ended
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Twelve months ended
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|||||||||||||||||||
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June 30, 2019
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September 30, 2019
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December 31, 2019
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March 31, 2020
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March 31, 2020
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Net sales:
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Commercial and Industrial Solutions
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$
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168.8
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$
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156.7
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$
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147.5
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$
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150.9
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$
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623.9
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Building HVAC Systems
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49.0
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56.0
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64.9
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51.2
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221.1
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Heavy Duty Equipment
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216.4
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187.2
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164.9
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177.4
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745.9
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Automotive
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113.6
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115.7
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110.5
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105.1
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444.9
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Segment total
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547.8
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515.6
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487.8
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484.6
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2,035.8
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Corporate and eliminations
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(18.8
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)
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(15.4
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(14.4
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(11.7
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(60.3
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)
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Net sales
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$
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529.0
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$
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500.2
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$
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473.4
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$
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472.9
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$
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1,975.5
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Three months ended
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Twelve months ended
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June 30, 2019
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September 30, 2019
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December 31, 2019
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March 31, 2020
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March 31, 2020
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Gross profit:
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$'s
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% of sales
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$'s
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% of sales
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$'s
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% of sales
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$'s
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% of sales
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$'s
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% of sales
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Commercial and Industrial Solutions
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$
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24.3
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14.4
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%
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$
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22.9
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14.6
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%
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$
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22.7
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15.4
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%
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$
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23.0
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15.3
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%
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$
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92.9
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14.9
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%
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Building HVAC Systems
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13.7
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27.9
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%
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17.7
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31.7
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%
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23.1
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35.5
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%
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17.0
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33.3
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%
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71.5
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32.3
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%
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Heavy Duty Equipment
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32.5
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15.0
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%
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22.4
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12.0
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%
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16.8
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10.2
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%
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24.9
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14.0
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%
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96.6
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13.0
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%
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Automotive
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12.5
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11.0
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%
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13.0
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11.2
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%
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12.2
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11.0
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%
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10.7
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10.2
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%
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48.4
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10.9
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%
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Segment total
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83.0
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15.2
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%
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76.0
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14.7
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%
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74.8
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15.3
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%
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75.6
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15.6
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%
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309.4
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15.2
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%
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Corporate and eliminations
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0.4
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-
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(0.3
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-
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(1.3
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-
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(0.7
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-
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(1.9
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-
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Gross profit
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$
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83.4
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15.8
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%
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$
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75.7
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15.1
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%
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$
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73.5
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15.5
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%
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$
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74.9
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15.8
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%
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$
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307.5
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15.6
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%
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Three months ended
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Twelve months ended
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June 30, 2019
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September 30, 2019
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December 31, 2019
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March 31, 2020
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March 31, 2020
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Operating income:
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Commercial and Industrial Solutions
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$
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9.0
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$
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8.5
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$
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8.3
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$
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7.1
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$
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32.9
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Building HVAC Systems
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5.3
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8.8
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13.5
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8.8
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36.4
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Heavy Duty Equipment
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17.3
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7.1
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2.8
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10.6
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37.8
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Automotive
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-
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0.4
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1.6
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(12.0
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(10.0
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Segment total
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31.6
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24.8
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26.2
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14.5
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97.1
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Corporate and eliminations
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(13.5
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)
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(18.8
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)
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(18.0
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(8.9
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)
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(59.2
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)
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Operating income
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$
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18.1
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$
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6.0
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$
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8.2
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$
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5.6
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$
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37.9
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Exhibit 99.1
Modine Manufacturing Company
Adjusted EBITDA (unaudited)
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(In millions)
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Three months ended
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Twelve months ended
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June 30, 2019
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September 30, 2019
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December 31, 2019
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March 31, 2020
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March 31, 2020
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Net earnings (loss)
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$
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8.2
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$
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(4.8
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)
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$
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1.0
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$
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(6.4
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)
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$
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(2.0
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)
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Interest expense
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5.9
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5.8
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5.6
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5.4
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22.7
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Provision for income taxes
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2.9
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3.7
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1.7
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4.1
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12.4
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Depreciation and amortization expense
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18.9
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19.4
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19.5
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19.3
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77.1
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Other expense (income) - net
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1.1
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1.3
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(0.1
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)
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2.5
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4.8
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||||||||||||||
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Automotive separation and strategy costs (a)
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8.4
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11.9
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14.0
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5.0
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39.2
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|||||||||||||||
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Restructuring expenses (b)
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1.8
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2.3
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2.6
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5.5
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12.2
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|||||||||||||||
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Impairment charges (c)
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-
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-
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-
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8.6
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8.6
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|||||||||||||||
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Gain on sale of assets (d)
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-
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-
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(0.8
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)
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-
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(0.8
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)
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Environmental charges (e)
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0.1
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-
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-
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0.1
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0.2
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|||||||||||||||
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Adjusted EBITDA
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$
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47.3
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$
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39.6
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$
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43.5
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$
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44.1
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$
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174.4
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||||||||||
| (a) |
During fiscal 2020, the Company recorded $39.2 million of costs at Corporate directly associated with its review of strategic alternatives for the automotive
business, including costs to separate and prepare the business for a potential sale. With the exception of $3.1 million of costs associated with program and equipment transfers recorded as costs of sales, these costs were recorded as
SG&A expenses and primarily related to accounting, legal, and IT professional services.
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| (b) |
Restructuring expenses primarily relate to employee severance expenses, largely resulting from targeted headcount reductions, and equipment transfer and plant
consolidation costs.
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| (c) |
During the fourth quarter of fiscal 2020, the Company recorded asset impairment charges totaling $8.0 million within the Automotive segment, primarily related to
manufacturing facilities in Austria and Germany. Also in the fourth quarter of fiscal 2020, the Company recorded a $0.6 million impairment charge to reduce the carrying value of a previously-closed CIS manufacturing facility in Austria.
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| (d) |
During the third quarter of fiscal 2020, the Automotive segment sold a previously-closed manufacturing facility in Germany and, as a result, recorded a gain of
$0.8 million.
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| (e) |
Environmental charges, including related legal costs, are recorded as SG&A expenses and relate to previously-owned U.S. manufacturing facilities in
the Heavy Duty Equipment segment.
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Exhibit 99.1
Modine Manufacturing Company
Segment Adjusted EBITDA (unaudited)
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(In millions)
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Commercial and Industrial Solutions
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Three months ended
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Twelve months ended
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June 30, 2019
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September 30, 2019
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December 31, 2019
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March 31, 2020
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March 31, 2020
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||||||||||||||||
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Operating income
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$
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9.0
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$
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8.5
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$
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8.3
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$
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7.1
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$
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32.9
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||||||||||
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Depreciation and amortization expense
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5.9
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5.8
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6.1
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6.2
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24.0
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|||||||||||||||
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Restructuring expenses (a)
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0.2
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0.4
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0.7
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0.8
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2.1
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|||||||||||||||
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Impairment charge (a)
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-
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-
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-
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0.6
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0.6
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|||||||||||||||
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Adjusted EBITDA
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$
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15.1
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$
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14.7
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$
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15.1
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$
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14.7
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$
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59.6
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||||||||||
Building HVAC Systems
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Three months ended
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Twelve months ended
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|||||||||||||||||||
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June 30, 2019
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September 30, 2019
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December 31, 2019
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March 31, 2020
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March 31, 2020
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||||||||||||||||
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Operating income
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$
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5.3
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$
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8.8
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$
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13.5
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$
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8.8
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$
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36.4
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||||||||||
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Depreciation and amortization expense
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0.8
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0.9
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0.9
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0.9
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3.4
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|||||||||||||||
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Adjusted EBITDA
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$
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6.1
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$
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9.7
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$
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14.4
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$
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9.7
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$
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39.8
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||||||||||
Heavy Duty Equipment
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Three months ended
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Twelve months ended
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|||||||||||||||||||
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June 30, 2019
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September 30, 2019
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December 31, 2019
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March 31, 2020
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March 31, 2020
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||||||||||||||||
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Operating income
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$
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17.3
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$
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7.1
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$
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2.8
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$
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10.6
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$
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37.8
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||||||||||
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Depreciation and amortization expense
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6.4
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6.4
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6.4
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6.2
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25.4
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|||||||||||||||
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Restructuring expenses (a)
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0.4
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0.4
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1.4
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1.1
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3.3
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|||||||||||||||
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Environmental charges (a)
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0.1
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-
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-
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0.1
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0.2
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|||||||||||||||
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Adjusted EBITDA
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$
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24.2
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$
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13.9
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$
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10.6
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$
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18.0
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$
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66.7
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||||||||||
Automotive
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Three months ended
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Twelve months ended
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|||||||||||||||||||
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June 30, 2019
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September 30, 2019
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December 31, 2019
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March 31, 2020
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March 31, 2020
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||||||||||||||||
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Operating income
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$
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-
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$
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0.4
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$
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1.6
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$
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(12.0
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)
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$
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(10.0
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)
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||||||||
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Depreciation and amortization expense
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5.3
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5.6
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5.7
|
5.7
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22.3
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|||||||||||||||
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Restructuring expenses (a)
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1.2
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1.5
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0.2
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3.6
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6.5
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|||||||||||||||
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Impairment charges (a)
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-
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-
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-
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8.0
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8.0
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|||||||||||||||
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Gain on sale of assets (a)
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-
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-
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(0.8
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)
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-
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(0.8
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)
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|||||||||||||
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Adjusted EBITDA
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$
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6.5
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$
|
7.5
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$
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6.7
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$
|
5.3
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$
|
26.0
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||||||||||
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(a)
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See the Adjusted EBITDA reconciliation on the previous page for information on restructuring expenses and other adjustments.
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