Modine Manufacturing Co 10-Q for FY2024 Q1
Modine Manufacturing Co (MOD)
10-Q
2023-08-03
For: 2023-06-30
View Original
Added on
April 11, 2026
About this 10-Q
Modine Manufacturing Co filed this 10-Q on August 3, 2023, covering the quarter ended June 30, 2023 (FY2024 Q1).
Headline figures
Quarter ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $622.4M
- up 15.0% from $541M a year earlier
- Net income
- $44.8M
- up 213.3% from net income of $14.3M a year earlier
- Diluted EPS
- $0.85
- up 214.8% from $0.27 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2023
or
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TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ____________ to ____________
Commission file number 1-1373
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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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 (262 ) 636-1200
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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large Accelerated Filer ☐
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Non-accelerated Filer ☐
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Smaller reporting company
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Emerging growth company
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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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐
No ☑
The number of shares outstanding of the registrant’s common stock, $0.625 par value, was 52,283,256 at July 28, 2023.
MODINE MANUFACTURING COMPANY
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PART I. FINANCIAL INFORMATION
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1
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21
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| Item 3. Quantitative and Qualitative Disclosures About Market Risk. |
27
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PART II. OTHER INFORMATION
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29
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| Item 5. Other Information. |
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PART I. FINANCIAL INFORMATION
MODINE MANUFACTURING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended June 30, 2023 and 2022
(In millions, except per share amounts)
(Unaudited)
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Three months ended June 30,
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2023
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2022
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Net sales
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$
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$
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Cost of sales
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Gross profit
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Selling, general and administrative expenses
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Restructuring expenses
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Operating income
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Interest expense
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(
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(
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Other expense – net
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(
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(
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)
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Earnings before income taxes
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Provision for income taxes
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(
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(
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Net earnings
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Net earnings attributable to noncontrolling interest
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(
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)
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Net earnings attributable to Modine
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$
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$
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Net earnings per share attributable to Modine shareholders:
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Basic
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$
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$
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Diluted
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$
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$
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Weighted-average shares outstanding:
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Basic
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Diluted
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The notes to condensed consolidated financial statements are an integral part of these statements.
MODINE MANUFACTURING COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the three months ended June 30, 2023 and 2022
(In millions)
(Unaudited)
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Three months ended June 30,
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2023
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2022
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Net earnings
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$
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$
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Other comprehensive income (loss), net of income taxes:
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Foreign currency translation
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(
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)
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(
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)
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Defined benefit plans, net of income taxes of $
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Cash flow hedges, net of income taxes of ($
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(
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)
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(
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)
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Total other comprehensive income (loss)
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(
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)
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(
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)
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Comprehensive income (loss)
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(
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)
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Comprehensive (income) loss attributable to noncontrolling interest
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(
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)
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Comprehensive income (loss) attributable to Modine
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$
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$
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(
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)
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The notes to condensed consolidated financial statements are an integral part of these statements.
MODINE MANUFACTURING COMPANY
CONSOLIDATED
BALANCE SHEETS
June 30, 2023 and March 31, 2023
(In millions, except per share amounts)
(Unaudited)
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June 30, 2023
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March 31, 2023
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ASSETS
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Cash and cash equivalents
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$
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$
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Trade accounts receivable – net
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Inventories
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Other current assets
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Total current assets
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Property, plant and equipment – net
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Intangible assets – net
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Goodwill
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Deferred income taxes
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Other noncurrent assets
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Total assets
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$
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$
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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Short-term debt
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$
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$
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Long-term debt – current portion
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Accounts payable
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Accrued compensation and employee benefits
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Other current liabilities
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Total current liabilities
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Long-term debt
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Deferred income taxes
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Pensions
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Other noncurrent liabilities
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Total liabilities
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Commitments and contingencies (see Note 17)
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Shareholders’ equity:
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Preferred stock, $
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Common stock, $
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Additional paid-in capital
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Retained earnings
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Accumulated other comprehensive loss
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(
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(
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Treasury stock, at cost,
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(
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(
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Total Modine shareholders’ equity
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Noncontrolling interest
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Total equity
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Total liabilities and equity
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$
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$
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The notes to condensed consolidated financial statements are an integral part of these statements.
MODINE MANUFACTURING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
For the three months ended June 30, 2023 and 2022
(In millions)
(Unaudited)
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Three months ended June 30,
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2023
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2022
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Cash flows from operating activities:
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Net earnings
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$
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$
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Adjustments to reconcile net earnings to net cash provided by operating activities:
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Depreciation and amortization
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Stock-based compensation expense
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Deferred income taxes
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(
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Other – net
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Changes in operating assets and liabilities:
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Trade accounts receivable
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(
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Inventories
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(
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(
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Accounts payable
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(
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Other assets and liabilities
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(
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Net cash provided by operating activities
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Cash flows from investing activities:
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Expenditures for property, plant and equipment
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(
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(
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Other – net
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(
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Net cash used for investing activities
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(
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(
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Cash flows from financing activities:
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Borrowings of debt
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Repayments of debt
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(
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(
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Borrowings (repayments) on bank overdraft facilities – net
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(
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Purchases of treasury stock under share repurchase program
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(
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Dividend paid to noncontrolling interest
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(
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(
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Other – net
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(
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(
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Net cash provided by financing activities
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Effect of exchange rate changes on cash
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(
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(
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Net increase in cash, cash equivalents and restricted cash
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Cash, cash equivalents and restricted cash – beginning of period
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Cash, cash equivalents and restricted cash – end of period
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$
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$
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The notes to condensed consolidated financial statements are an integral part of these statements.
MODINE MANUFACTURING COMPANY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the three months ended June 30, 2023 and 2022
(In millions)
(Unaudited)
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Accumulated
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| Additional | other |
Treasury |
Non- |
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| Common stock |
paid-in |
Retained |
comprehensive | stock, at |
controlling |
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Shares
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Amount
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capital
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earnings
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loss
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cost
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interest
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Total
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|||||||||||||||||||||||||
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Balance, March 31,
2023
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$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | |||||||||||||||||||||
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Net earnings
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- | |||||||||||||||||||||||||||||||
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Other comprehensive loss
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- | ( |
) | ( |
) | ( |
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Stock options and awards
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Purchase of treasury stock
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- | ( |
) | ( |
) | |||||||||||||||||||||||||||
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Stock-based compensation expense
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- | |||||||||||||||||||||||||||||||
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Dividend paid to noncontrolling interest
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- | ( |
) | ( |
) | |||||||||||||||||||||||||||
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Balance, June 30,
2023
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$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | |||||||||||||||||||||
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Accumulated
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| Additional |
other |
Treasury |
Non- |
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| Common stock |
paid-in |
Retained |
comprehensive |
stock, at |
controlling |
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Shares
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Amount
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capital
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earnings
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loss
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cost
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interest
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Total
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Balance, March 31,
2022
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$
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$
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$
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$
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(
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)
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$
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(
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)
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$
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$
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Net earnings
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-
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Other comprehensive loss
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-
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(
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)
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(
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)
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(
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)
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Stock options and awards
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Purchase of treasury stock
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-
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(
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)
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(
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)
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Stock-based compensation expense
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-
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Dividend paid to noncontrolling interest
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-
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(
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)
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(
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)
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Balance, June 30,
2022
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$
|
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$
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$
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$
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(
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)
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$
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(
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)
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$
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$
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The notes to condensed consolidated financial statements are an integral part of these statements.
5
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Note 1: General
The accompanying unaudited condensed consolidated financial statements of Modine Manufacturing Company (“Modine” or the “Company”) were prepared in conformity with accounting principles generally accepted in the United States
(“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes necessary for a comprehensive presentation of financial
position, results of operations and cash flows required by GAAP for complete financial statements. The financial statements include all normal recurring adjustments that are, in the opinion of management, necessary for a fair statement of results
for the interim periods. Results for the first three months of fiscal 2024 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the consolidated financial
statements and related notes in Modine’s Annual Report on Form 10-K for the year ended March 31, 2023.
New
Accounting Guidance: Supplier Finance Programs
In September 2022, the Financial Accounting Standards Board (“FASB”) issued new guidance regarding disclosure of supplier finance programs including the key terms, outstanding obligations, and where such obligations are
presented within the financial statements. In addition, beginning for fiscal 2025, a roll forward of obligations under such programs will be required annually. The new guidance does not impact the recognition, measurement or financial statement
presentation of supplier finance program obligations. The Company adopted this guidance as of April 1, 2023.
The Company facilitates a voluntary supplier finance program through a financial institution that allows certain suppliers in the U.S. and Europe to request early
payment for invoices, at a discount, from the financial institution. The Company or the financial institution may terminate the supplier finance program upon 90 days’ notice. The Company’s obligations to its suppliers, including amounts due and payment terms, are consistent, irrespective of whether a supplier participates in the program. The Company is not party to
the arrangements between the participating suppliers and the financial institution. Under this program, the Company confirms the validity of supplier invoices to the financial institution and remits payments to it based on the original payment
terms, which typically range from 60 to 120
days. The outstanding obligations under this program, included within in the consolidated balance sheets, totaled
$18.5 million and $21.2
million at June 30, 2023 and March 31, 2023, respectively.
6
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Note 2: Revenue Recognition
Disaggregation of Revenue
The table below presents revenue for each of the Company’s operating segments. Each segment’s revenue is disaggregated by product group, by
geographic location and based upon the timing of revenue recognition.
Beginning in fiscal 2024
and in connection with the Company’s strategic transformation and continued application of 80/20 principles across its businesses, the Company has refined its reporting of disaggregated revenue within the Climate Solutions segment to be more
consistent with how the segment has aligned its teams around three market-based verticals: i) heat transfer products; ii) HVAC & refrigeration; and iii) data center cooling. For the refined fiscal 2024 presentation, the Company reports
revenue based upon the respective product lines and related customer relationships managed by each market-based vertical team. The disaggregated revenue information presented in the table below for fiscal 2023 has been recast to be comparable with the fiscal 2024
presentation.
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Three months ended June 30, 2023
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Three months ended June 30, 2022
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Climate
Solutions
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Performance
Technologies
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Segment
Total
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Climate
Solutions
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Performance
Technologies
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Segment
Total
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Product groups:
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Heat transfer
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$
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$
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$
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$
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$
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$
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HVAC & refrigeration
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Data center cooling
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Air-cooled
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Liquid-cooled
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Advanced solutions
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Inter-segment sales
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Net sales
|
$
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$
|
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$
|
|
$
|
|
$
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$
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Geographic location:
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Americas
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
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Europe
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Asia
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Net sales
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
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|
||||||||||||
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Timing of revenue recognition:
|
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Products transferred at a point in time
|
$
|
|
$
|
|
$
|
|
$
|
|
$
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$
|
|
||||||||||||
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Products transferred over time
|
|
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|
||||||||||||||||||
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Net sales
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
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7
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Contract Balances
Contract assets and contract liabilities from contracts with customers were as follows:
|
June 30, 2023
|
March 31, 2023
|
|||||||
|
Contract assets
|
$
|
|
$
|
|
||||
|
Contract liabilities
|
|
|
||||||
Contract assets, included within other current assets in the consolidated balance sheets, primarily consist of capitalized costs related to customer-owned tooling
contracts, wherein the customer has guaranteed reimbursement, and assets recorded for revenue recognized over time, which represent the Company’s rights to consideration for work completed but not yet billed. The $7.3 million increase in contract assets during the first three months of fiscal 2024
primarily resulted from an increase in contract assets for revenue recognized over time.
Contract liabilities, included within other current liabilities in the consolidated balance sheets, consist of payments received in advance of satisfying performance
obligations under customer contracts, including contracts for customer-owned tooling. The $14.0 million increase in contract liabilities
during the first three months of fiscal 2024 primarily resulted from payments received in advance of the Company’s satisfaction of performance obligations.
Note 3: Fair Value Measurements
Fair value is defined as the price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or
liability in an orderly transaction between market participants. Fair value measurements are classified under the following hierarchy:
| • |
Level 1 – Quoted prices for identical instruments in active markets.
|
| • |
Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in
which all significant inputs are observable in active markets.
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| • |
Level 3 – Model-derived valuations in which one or more significant inputs are not observable.
|
When available, the Company uses quoted market prices to determine fair value and classifies such measurements as Level 1. In some cases, where market prices are not
available, the Company uses observable market-based inputs to calculate fair value, in which case the measurements are classified as Level 2. If quoted or observable market prices are not available, the Company determines fair value based upon
valuation models that use, where possible, market-based data such as interest rates, yield curves or currency rates. These measurements are classified as Level 3.
The carrying values of cash, cash equivalents, restricted cash, short-term investments, trade accounts receivable, accounts payable, and short-term debt approximate fair
value due to the short-term nature of these instruments. The fair value of the Company’s long-term debt is disclosed in Note 16.
8
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Note 4: Pensions
Pension cost included the following components:
|
Three months ended June 30,
|
||||||||
|
2023
|
2022
|
|||||||
|
Service cost
|
$
|
|
$
|
|
||||
|
Interest cost
|
|
|
||||||
|
Expected return on plan assets
|
(
|
)
|
(
|
)
|
||||
|
Amortization of unrecognized net loss
|
|
|
||||||
|
Net periodic benefit cost
|
$
|
|
$
|
|
||||
The
Company’s funding policy is to contribute annually, at a minimum, the amount necessary on an actuarial basis to provide for benefits in accordance with applicable laws and regulations. In connection with funding relief provisions within the
American Rescue Plan Act of 2021, the Company does not expect to make cash contributions to its U.S. pension plans during fiscal 2024.
Note 5: Stock-Based Compensation
The Company’s stock-based incentive programs consist of the following: (1) a long-term incentive plan (“LTIP”) for officers and other executives that authorizes grants of
stock awards, stock options, and performance-based awards for retention and performance, (2) a discretionary equity program for other management and key employees, and (3) stock awards for non-employee directors.
The Company calculates compensation expense based upon the fair value of the awards at the time of grant and subsequently recognizes expense ratably over the respective
vesting periods of the stock-based awards. The Company recognized stock-based compensation expense of $1.5 million and $1.1 million for the three months ended June 30, 2023 and 2022, respectively.
During the first quarter of fiscal 2024, the Company granted performance-based stock awards and restricted stock awards. The performance metrics for
the performance-based stock awards are based upon a target three-year average cash flow return on invested capital and a target three-year average growth in consolidated net earnings before interest, taxes, depreciation, amortization, and certain other adjustments (“Adjusted
EBITDA”) at the end of the performance period ending March 31, 2026.
During the first quarter of fiscal 2023, the Company granted restricted stock awards, stock options, and
performance cash awards.
9
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
The fair value of stock-based compensation awards granted during the three months ended June 30, 2023 and 2022 were as follows:
|
Three months ended June 30,
|
||||||||||||||||
|
2023
|
2022
|
|||||||||||||||
|
Shares
|
Fair Value
Per Award
|
Shares
|
Fair Value
Per Award
|
|||||||||||||
|
Performance stock awards
|
|
$
|
|
|
|
|
||||||||||
|
Restricted stock awards
|
|
$
|
|
|
$
|
|
||||||||||
|
Stock options
|
$ |
|||||||||||||||
As of June 30, 2023, unrecognized compensation expense related to non-vested stock-based compensation awards,
which will be recognized as expense over the remaining service periods, was as follows:
|
Unrecognized
Compensation
Expense
|
Weighted-Average
Remaining Service
Period in Years
|
|||||||
|
Performance stock awards
|
$ | |||||||
|
Restricted stock awards
|
|
|
||||||
|
Stock options
|
|
|
||||||
|
Total
|
$
|
|
|
|||||
Note 6: Restructuring Activities
During the first quarter of fiscal 2023, restructuring and repositioning expenses primarily consisted of severance expenses related to targeted headcount reductions in
Europe within the Performance Technologies segment.
Restructuring and repositioning expenses were as follows:
|
Three months ended June 30,
|
||||||||
|
2023
|
2022
|
|||||||
|
Employee severance and related benefits
|
$
|
|
$
|
|
||||
|
Other restructuring and repositioning expenses
|
|
|
||||||
|
Total
|
$
|
|
$
|
|
||||
Other restructuring and repositioning expenses primarily consist of equipment transfer and plant consolidation costs.
10
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
The Company accrues severance in accordance with its written plans, procedures, and relevant statutory requirements. Changes in accrued severance were as follows:
|
Three months ended June 30,
|
||||||||
|
2023
|
2022
|
|||||||
|
Beginning balance
|
$
|
|
$
|
|
||||
|
Additions
|
|
|
||||||
|
Payments
|
(
|
)
|
(
|
)
|
||||
|
Effect of exchange rate changes
|
|
(
|
)
|
|||||
|
Ending balance
|
$
|
|
$
|
|
||||
Note 7: Other Income and Expense
Other income and expense consisted of the following:
|
Three months ended June 30,
|
||||||||
|
2023
|
2022
|
|||||||
|
Interest income
|
$
|
|
$
|
|
||||
|
Foreign currency transactions (a)
|
(
|
)
|
(
|
)
|
||||
|
Net periodic benefit cost (b)
|
(
|
)
|
(
|
)
|
||||
|
Total other expense – net
|
$
|
(
|
)
|
$
|
(
|
)
|
||
| (a) |
|
|
|
(b) |
|
Note 8: Income Taxes
The Company’s effective tax rate for the three months ended June 30, 2023 and 2022 was 24.5 percent and 25.5 percent, respectively. The effective tax rate for the first quarter of fiscal 2024 is lower than the first quarter of the prior year, primarily due to changes in the mix
and amount of foreign and U.S. earnings.
The Company records valuation allowances against its net deferred tax assets to the extent it determines it is more likely than not that such assets will not be realized in the future. Each quarter, the Company evaluates the probability that its deferred tax assets will be realized and determines whether valuation allowances or adjustments thereto are needed. This determination involves judgement and the use of significant estimates and assumptions, including expectations of future taxable income and tax planning strategies. In addition, the Company considers the duration of statutory carryforward periods and historical financial results.
The Company records valuation allowances against its net deferred tax assets to the extent it determines it is more likely than not that such assets will not be realized in the future. Each quarter, the Company evaluates the probability that its deferred tax assets will be realized and determines whether valuation allowances or adjustments thereto are needed. This determination involves judgement and the use of significant estimates and assumptions, including expectations of future taxable income and tax planning strategies. In addition, the Company considers the duration of statutory carryforward periods and historical financial results.
11
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
At June 30, 2023, valuation allowances against deferred tax assets in the U.S. and in certain foreign jurisdictions totaled $35.5 million and $27.6 million, respectively. The Company will maintain the valuation allowances in each applicable tax jurisdiction until it determines it is more likely than not
the deferred tax assets will be realized, thereby eliminating the need for a valuation allowance. Future events or circumstances, such as lower taxable income or unfavorable changes in the financial outlook of the Company’s operations in the
U.S. and certain foreign jurisdictions, could necessitate the establishment of further valuation allowances.
Accounting policies for interim reporting require the Company to adjust its effective tax rate each quarter to be consistent with its estimated annual effective tax rate. Under this methodology, the Company applies its estimated annual income tax rate to its year-to-date ordinary earnings to derive its income tax provision each quarter. The Company records the tax impacts of certain significant, unusual or infrequently occurring items in the period in which they occur. The Company excluded the impact of its operations in certain foreign locations from the overall effective tax rate methodology and recorded them discretely based upon year-to-date results because the Company anticipates net operating losses for the full fiscal year in these jurisdictions. The Company estimates a $2.1 million net decrease in unrecognized tax benefits during the
remainder of fiscal 2024 mainly due to lapses in statutes of limitations.
Accounting policies for interim reporting require the Company to adjust its effective tax rate each quarter to be consistent with its estimated annual effective tax rate. Under this methodology, the Company applies its estimated annual income tax rate to its year-to-date ordinary earnings to derive its income tax provision each quarter. The Company records the tax impacts of certain significant, unusual or infrequently occurring items in the period in which they occur. The Company excluded the impact of its operations in certain foreign locations from the overall effective tax rate methodology and recorded them discretely based upon year-to-date results because the Company anticipates net operating losses for the full fiscal year in these jurisdictions. The Company estimates a $
Note 9: Earnings Per Share
The components of basic and diluted earnings per share were as follows:
|
Three months ended June 30,
|
||||||||
|
2023
|
2022
|
|||||||
|
Net earnings attributable to Modine
|
$
|
|
$
|
|
||||
|
Weighted-average shares outstanding – basic
|
|
|
||||||
|
Effect of dilutive securities
|
|
|
||||||
|
Weighted-average shares outstanding – diluted
|
|
|
||||||
|
Earnings per share:
|
||||||||
|
Net earnings per share – basic
|
$
|
|
$
|
|
||||
|
Net earnings per share – diluted
|
$
|
|
$
|
|
||||
For the three months ended June 30, 2023, the calculation of diluted earnings per share excluded 0.1 million restricted stock awards because they were anti-dilutive.
For the three months ended June 30, 2022, the calculation of diluted earnings per share excluded 0.9 million and 0.5 million stock options and restricted stock awards, respectively, because they were anti-dilutive.
12
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Note 10: Cash, Cash Equivalents and Restricted Cash
Cash, cash equivalents and restricted cash consisted of the following:
|
June 30, 2023
|
March 31, 2023
|
|||||||
|
Cash and cash equivalents
|
$
|
|
$
|
|
||||
|
Restricted cash
|
|
|
||||||
|
Total cash, cash equivalents and restricted cash
|
$
|
|
$
|
|
||||
Restricted cash, which is reported within other current assets and other noncurrent assets in the consolidated balance sheets, consists primarily of deposits for
contractual guarantees or commitments required for rents, import and export duties, and commercial agreements.
Note 11: Inventories
Inventories consisted of the following:
| |
June 30, 2023
|
March 31, 2023
|
||||||
|
Raw materials
|
$
|
|
$
|
|
||||
|
Work in process
|
|
|
||||||
|
Finished goods
|
|
|
||||||
|
Total inventories
|
$
|
|
$
|
|
||||
Note 12: Property, Plant and Equipment
Property, plant and equipment, including depreciable lives, consisted of the following:
|
June 30, 2023
|
March 31, 2023
|
|||||||
|
Land
|
$
|
|
$
|
|
||||
|
Buildings and improvements (
|
|
|
||||||
|
Machinery and equipment (
|
|
|
||||||
|
Office equipment (
|
|
|
||||||
|
Construction in progress
|
|
|
||||||
|
|
|
|||||||
|
Less: accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
|
Net property, plant and equipment
|
$
|
|
$
|
|
||||
13
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Note 13: Goodwill and Intangible Assets
The following table presents a roll forward of the carrying value of goodwill from March 31, 2023 to June 30, 2023.
|
Climate
Solutions
|
Performance
Technologies
|
Total
|
||||||||||
|
Goodwill, March 31,
2023
|
$
|
|
$
|
|
$
|
|
||||||
|
Effect of exchange rate changes
|
|
|
|
|||||||||
|
Goodwill, June 30,
2023
|
$
|
|
$
|
|
$
|
|
||||||
Intangible assets consisted of the following:
|
June 30, 2023
|
March 31, 2023
|
|||||||||||||||||||||||
| Gross | Net | Gross | Net | |||||||||||||||||||||
| Carrying | Accumulated |
Intangible |
Carrying |
Accumulated |
Intangible |
|||||||||||||||||||
|
Value
|
Amortization
|
Assets
|
Value
|
Amortization
|
Assets
|
|||||||||||||||||||
|
Customer relationships
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
|
Trade names
|
|
(
|
)
|
|
|
(
|
)
|
|
||||||||||||||||
|
Acquired technology
|
|
(
|
)
|
|
|
(
|
)
|
|
||||||||||||||||
|
Total intangible assets
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||
The Company recorded amortization expense of $2.0 6.0 million of amortization expense during the remainder of fiscal 2024. The Company estimates that it will record approximately $8.0 7.0 million in fiscal 2029. These estimates exclude amortization expense associated with the acquisition that closed during the second quarter of
fiscal 2024, as discussed in Note 20.
Note 14: Product Warranties
Changes in accrued warranty costs were as follows:
|
Three months ended June 30,
|
||||||||
|
2023
|
2022
|
|||||||
|
Beginning balance
|
$
|
|
$
|
|
||||
|
Warranties recorded at time of sale
|
|
|
||||||
|
Adjustments to pre-existing warranties
|
|
(
|
)
|
|||||
|
Settlements
|
(
|
)
|
(
|
)
|
||||
|
Effect of exchange rate changes
|
|
(
|
)
|
|||||
|
Ending balance
|
$
|
|
$
|
|
||||
14
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Note 15: Leases
Lease Assets and Liabilities
The following table provides a summary of leases recorded on the consolidated balance sheets.
|
|
Balance Sheet Location
|
June 30, 2023
|
March 31, 2023
|
|||||||
|
Lease Assets
|
||||||||||
|
Operating lease ROU assets
|
|
$
|
|
$
|
|
|||||
|
Finance lease ROU assets (a)
|
|
|
|
|||||||
|
Lease Liabilities
|
||||||||||
|
Operating lease liabilities
|
|
$
|
|
$
|
|
|||||
|
Operating lease liabilities
|
|
|
|
|||||||
|
Finance lease liabilities
|
|
|
|
|||||||
|
Finance lease liabilities
|
|
|
|
|||||||
| (a) |
|
Components of Lease Expense
The components of lease expense were as follows:
|
Three months ended June 30,
|
||||||||
|
2023
|
2022
|
|||||||
|
Operating lease expense (a)
|
$
|
|
$
|
|
||||
|
Finance lease expense:
|
||||||||
|
Depreciation of ROU assets
|
|
|
||||||
|
Interest on lease liabilities
|
|
|
||||||
|
Total lease expense
|
$
|
|
$
|
|
||||
| (a) |
|
15
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Note 16: Indebtedness
Long-term debt consisted of the following:
| |
Fiscal year
of maturity
|
June 30, 2023
|
March 31, 2023
|
||||||
|
Term loans
|
|
$
|
|
$
|
|
||||
|
|
|
|
|
||||||
|
|
|
|
|
||||||
|
Revolving credit facility
|
|
|
|
||||||
|
Other (a)
|
|
|
|||||||
|
|
|
||||||||
|
Less: current portion
|
(
|
)
|
(
|
)
|
|||||
|
Less: unamortized debt issuance costs
|
(
|
)
|
(
|
)
|
|||||
|
Total long-term debt
|
$
|
|
$
|
|
|||||
|
|
(a) |
|
Long-term debt, including the current portion of long-term debt, matures as
follows:
|
Fiscal Year
|
||||
|
Remainder of 2024
|
$
|
|
||
|
2025
|
|
|||
|
2026
|
|
|||
|
2027
|
|
|||
|
2028
|
|
|||
|
2029 & beyond
|
|
|||
|
Total
|
$
|
|
||
The Company maintains a credit agreement
with a syndicate of banks that provides for a multi-currency $275.0 million revolving credit facility and U.S. dollar- and
euro-denominated term loan facilities maturing in October 2027. In addition, the credit agreement provides for shorter-duration swingline loans. Borrowings under the revolving credit, swingline and term loan facilities bear interest at a variable
rate, based upon the applicable reference rate and including a margin percentage dependent upon the Company’s leverage ratio, as described below. At June 30, 2023, the weighted-average interest rates for revolving credit facility borrowings and
the term loans were 6.3 and 6.4
percent, respectively. Based upon the terms of the credit agreement, the Company classifies borrowings under its revolving credit and swingline facilities as long-term and short-term debt, respectively, on its consolidated balance sheets.
At June 30, 2023, the Company’s borrowings under its revolving credit and swingline facilities totaled $3.2
million and $8.0 million, respectively, and domestic letters of credit totaled $5.5 million. As a result, available borrowing capacity under the Company’s revolving credit facility was $258.3 million as of June 30, 2023. At March 31, 2023, the Company had no
The Company also maintains credit agreements for its foreign subsidiaries. The
outstanding short-term borrowings related to these foreign credit agreements totaled $3.7 million at March 31, 2023. There were no short-term borrowings related to these agreements at June 30, 2023.
16
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Indebtedness under the Company’s credit agreement and Senior Note agreements is secured by liens on substantially all domestic assets. These agreements further require
compliance with various covenants that may limit the Company’s ability to incur additional indebtedness; grant liens; make investments, loans, or guarantees; engage in certain transactions with affiliates; and make restricted payments including
dividends. In addition, the agreements may require prepayment in the event of certain asset sales.
Financial covenants within its credit agreements require the Company to limit its consolidated indebtedness, less a portion of its cash balances, both as defined by the
credit agreements, to no more than times consolidated net earnings before interest, taxes, depreciation,
amortization, and certain other adjustments (“Adjusted EBITDA.”) The Company must also maintain a ratio of Adjusted EBITDA of at least three
times consolidated interest expense. As of June 30, 2023, the Company was in compliance with its debt covenants.
The Company estimates the fair value of long-term debt using discounted future cash flows at rates offered to the Company for similar debt instruments of comparable
maturities. As of June 30, 2023 and March 31, 2023, the carrying value of the Company’s long-term debt approximated fair value, with the exception of the Senior Notes, which had an aggregate fair value of $125.9
Note 17: Risks, Uncertainties, Contingencies and Litigation
Environmental
The Company has recorded environmental investigation and remediation accruals related to manufacturing facilities in the U.S., one of which the Company currently owns and operates, and at its
former manufacturing facility in the Netherlands. These accruals primarily relate to soil and groundwater contamination at facilities where past operations followed practices and procedures that were considered acceptable under then-existing
regulations, or where the Company is a successor to the obligations of prior owners, and current laws and regulations require investigative and/or remedial work to ensure sufficient environmental compliance. In instances where a range of loss
can be reasonably estimated for a probable environmental liability, but no amount within the range is a better estimate than any other amount, the Company accrues the minimum of the range. The Company’s accruals for environmental matters totaled
$17.5 million and $17.6
million as of June 30, 2023 and March 31, 2023, respectively. As additional information becomes available regarding environmental matters, the Company will re-assess the liabilities and revise the estimated accruals, if necessary. While it is
possible that the ultimate environmental remediation costs may be in excess of amounts accrued, the Company believes, based upon currently available information, that the ultimate outcome of these matters, individually and in the aggregate, will
not have a material adverse effect on its financial position. However, these matters are subject to inherent uncertainties, and unfavorable outcomes could occur, including significant monetary damages.
Other Litigation
In the normal course of business, the Company and its subsidiaries are named as defendants in various lawsuits and enforcement proceedings by private parties, governmental
agencies and/or others in which claims are asserted against Modine. The Company believes that any additional loss in excess of amounts already accrued would not have a material effect on the Company’s consolidated balance sheet, results of
operations, and cash flows. In addition, management expects that the liabilities which may ultimately result from such lawsuits or proceedings, if any, would not have a material adverse effect on the Company’s financial position.
17
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Note 18: Accumulated Other Comprehensive Loss
Changes in accumulated other comprehensive loss were as follows:
|
Three months ended June 30, 2023
|
||||||||||||||||
|
Foreign
Currency
Translation
|
Defined
Benefit
Plans
|
Cash Flow
Hedges
|
Total
|
|||||||||||||
|
Beginning balance
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
|||||
|
Other comprehensive income (loss) before reclassifications
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
|
Reclassifications:
|
||||||||||||||||
|
Amortization of unrecognized net loss (a)
|
-
|
|
-
|
|
||||||||||||
|
Realized gains – net (b)
|
-
|
-
|
(
|
)
|
(
|
)
|
||||||||||
|
Income taxes
|
|
(
|
)
|
|
|
|||||||||||
|
Total other comprehensive income (loss)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
|
Ending balance
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
|||||
|
Three months ended June 30, 2022
|
||||||||||||||||
|
Foreign
Currency
Translation
|
Defined
Benefit
Plans
|
Cash Flow
Hedges
|
Total
|
|||||||||||||
|
Beginning balance
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
|||||
|
Other comprehensive income (loss) before reclassifications
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
|
Reclassifications:
|
||||||||||||||||
|
Amortization of unrecognized net loss (a)
|
-
|
|
-
|
|
||||||||||||
|
Realized gains – net (b)
|
-
|
-
|
(
|
)
|
(
|
)
|
||||||||||
|
Income taxes
|
|
|
|
|
||||||||||||
|
Total other comprehensive income (loss)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
|
Ending balance
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
||||
|
|
(a) |
|
|
|
(b) |
|
18
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Note 19: Segment Information
The following is a summary of net sales, gross profit and operating income by segment:
|
Three months ended June 30,
|
||||||||||||||||||||||||
|
2023
|
2022
|
|||||||||||||||||||||||
|
External Sales
|
Inter-segment
Sales
|
Total
|
External Sales
|
Inter-segment
Sales
|
Total
|
|||||||||||||||||||
|
Net sales:
|
||||||||||||||||||||||||
|
Climate Solutions
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
|
Performance Technologies
|
|
|
|
|
|
|
||||||||||||||||||
|
Segment total
|
|
|
|
|
|
|
||||||||||||||||||
|
Corporate and eliminations
|
-
|
(
|
)
|
(
|
)
|
-
|
(
|
)
|
(
|
)
|
||||||||||||||
|
Net sales
|
$
|
|
$
|
-
|
$
|
|
$
|
|
$
|
-
|
$
|
|
||||||||||||
|
Three months ended June 30,
|
||||||||||||||||
|
2023
|
2022
|
|||||||||||||||
|
_$’s
|
% of sales
|
_$’s
|
% of sales
|
|||||||||||||
|
Gross profit:
|
||||||||||||||||
|
Climate Solutions
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||
|
Performance Technologies
|
|
|
%
|
|
|
%
|
||||||||||
|
Segment total
|
|
|
%
|
|
|
%
|
||||||||||
|
Corporate and eliminations
|
|
|
|
|
||||||||||||
|
Gross profit
|
$
|
|
|
%
|
$
|
|
|
%
|
||||||||
|
Three months ended June 30,
|
||||||||
|
2023
|
2022
|
|||||||
|
Operating income:
|
||||||||
|
Climate Solutions
|
$
|
|
$
|
|
||||
|
Performance Technologies
|
|
|
||||||
|
Segment total
|
|
|
||||||
|
Corporate and eliminations
|
(
|
)
|
(
|
)
|
||||
|
Operating income
|
$
|
|
$
|
|
||||
19
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
The following is a summary of segment
assets, comprised entirely of trade accounts receivable and inventories, and other assets:
|
June 30, 2023
|
March 31, 2023
|
|||||||
|
Assets:
|
||||||||
|
Climate Solutions
|
$
|
|
$
|
|
||||
|
Performance Technologies
|
|
|
||||||
|
Other (a)
|
|
|
||||||
|
Total assets
|
$
|
|
$
|
|
||||
|
|
(a) |
|
Note 20: Subsequent Event
On July 1, 2023, the Company acquired substantially all of the net operating assets of Napps Technology Corporation (“Napps”) for a purchase price of $5.3 million. Napps is a Texas-based manufacturer of air- and water-cooled chillers, condensing units and heat pumps primarily for the K-12 school
market. This acquisition expands the Company’s indoor air quality product portfolio and supports its growth strategy and mission of improving indoor air quality. Napps has historical annual sales of approximately $5.0 million, and will be reported within the Company’s Climate Solutions segment beginning in the second quarter of fiscal 2024.
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
When we use the terms “Modine,” “we,” “us,” the “Company,” or “our” in this report, we are referring to Modine Manufacturing Company. Our fiscal year ends on March 31 and, accordingly, all references to quarters refer to our fiscal quarters.
The quarter ended June 30, 2023 was the first quarter of fiscal 2024.
First Quarter Highlights
Net sales in the first quarter of fiscal 2024 increased $81.4 million, or 15 percent, from the first quarter of fiscal 2023, primarily due to higher sales in our Performance Technologies and Climate Solutions segments. Cost of sales increased
$36.9 million, or 8 percent, primarily due to higher sales volume. Gross profit increased $44.5 million and gross margin improved 520 basis points to 20.6 percent. Selling, general and administrative (“SG&A”) expenses increased $5.1
million, primarily due to higher compensation-related expenses. Operating income of $66.5 million during the first quarter of fiscal 2024 increased $40.9 million from the prior year, primarily due to higher earnings in our operating segments.
Recent Event
On July 1, 2023, we acquired substantially all of the net operating assets of Napps Technology Corporation (“Napps”) for a purchase price of $5.3 million. Napps is a Texas-based manufacturer of air- and water-cooled chillers, condensing units
and heat pumps primarily for the K-12 school market. This acquisition expands our indoor air quality product portfolio and supports our growth strategy and mission of improving indoor air quality. Napps has historical annual sales of
approximately $5.0 million. We will report the financial results from this business within our Climate Solutions segment beginning in the second quarter of fiscal 2024.
CONSOLIDATED RESULTS OF OPERATIONS
The following table presents our consolidated financial results on a comparative basis for the three months ended June 30, 2023 and 2022:
|
Three months ended June 30,
|
||||||||||||||||
|
2023
|
2022
|
|||||||||||||||
|
(in millions)
|
$’s
|
% of sales
|
$’s
|
% of sales
|
||||||||||||
|
Net sales
|
$
|
622.4
|
100.0
|
%
|
$
|
541.0
|
100.0
|
%
|
||||||||
|
Cost of sales
|
494.5
|
79.4
|
%
|
457.6
|
84.6
|
%
|
||||||||||
|
Gross profit
|
127.9
|
20.6
|
%
|
83.4
|
15.4
|
%
|
||||||||||
|
Selling, general and administrative expenses
|
61.4
|
9.9
|
%
|
56.3
|
10.4
|
%
|
||||||||||
|
Restructuring expenses
|
-
|
-
|
1.5
|
0.3
|
%
|
|||||||||||
|
Operating income
|
66.5
|
10.7
|
%
|
25.6
|
4.7
|
%
|
||||||||||
|
Interest expense
|
(5.9
|
)
|
-1.0
|
%
|
(4.1
|
)
|
-0.8
|
%
|
||||||||
|
Other expense – net
|
(0.6
|
)
|
-0.1
|
%
|
(2.3
|
)
|
-0.4
|
%
|
||||||||
|
Earnings before income taxes
|
60.0
|
9.6
|
%
|
19.2
|
3.5
|
%
|
||||||||||
|
Provision for income taxes
|
(14.7
|
)
|
-2.4
|
%
|
(4.9
|
)
|
-0.9
|
%
|
||||||||
|
Net earnings
|
$
|
45.3
|
7.3
|
%
|
$
|
14.3
|
2.6
|
%
|
||||||||
First quarter net sales of $622.4 million were $81.4 million, or 15 percent, higher than the first quarter of the prior year, primarily due to higher sales volume in each of our segments and favorable commercial pricing. Sales in the
Performance Technologies and Climate Solutions segments increased $54.6 million and $27.4 million, respectively.
First quarter cost of sales increased $36.9 million, or 8 percent, primarily due to higher sales volume, partially offset by lower raw material prices, which decreased approximately $16.0 million. As a percentage of sales, cost of sales
decreased 520 basis points to 79.4 percent, primarily due to the favorable impact of higher sales, partially offset by higher labor and inflationary costs.
As a result of higher sales and lower cost of sales as a percentage of sales, first quarter gross profit increased $44.5 million and gross margin improved 520 basis points to 20.6 percent.
First quarter SG&A expenses increased $5.1 million. As a percentage of sales, SG&A expenses decreased by 50 basis points. The increase in SG&A expenses was primarily driven by higher compensation-related expenses, which increased
approximately $4.0 million. The compensation-related expenses included higher incentive compensation expenses driven by improved financial results, as compared with the prior year. These increases were partially offset by lower environmental
charges related to a previously-closed manufacturing facility in the U.S., which decreased $1.0 million and were recorded at Corporate.
Restructuring expenses decreased $1.5 million compared with the first quarter of fiscal 2023. The fiscal 2023 restructuring expenses primarily consisted of severance expenses in the Performance Technologies segment.
Operating income of $66.5 million in the first quarter of fiscal 2024 increased $40.9 million compared with the first quarter of fiscal 2023, primarily due to higher gross profit in our operating segments.
Interest expense during the first quarter of fiscal 2024 increased $1.8 million compared with the first quarter of fiscal 2023, primarily due to unfavorable changes in interest rates.
The provision for income taxes was $14.7 million and $4.9 million in the first quarter of fiscal 2024 and 2023, respectively. The $9.8 million increase was primarily due to higher earnings in the current year as compared with the same period
in the prior year.
SEGMENT RESULTS OF OPERATIONS
The following is a discussion of our segment results of operations for the three months ended June 30, 2023 and 2022:
Climate Solutions
|
Three months ended June 30,
|
||||||||||||||||
|
2023
|
2022
|
|||||||||||||||
|
(in millions)
|
$’s
|
% of sales
|
$’s
|
% of sales
|
||||||||||||
|
Net sales
|
$
|
271.8
|
100.0
|
%
|
$
|
244.4
|
100.0
|
%
|
||||||||
|
Cost of sales
|
202.8
|
74.6
|
%
|
194.0
|
79.4
|
%
|
||||||||||
|
Gross profit
|
69.0
|
25.4
|
%
|
50.4
|
20.6
|
%
|
||||||||||
|
Selling, general and administrative expenses
|
24.7
|
9.1
|
%
|
23.4
|
9.6
|
%
|
||||||||||
|
Operating income
|
$
|
44.3
|
16.3
|
%
|
$
|
27.0
|
11.0
|
%
|
||||||||
Climate Solutions net sales increased $27.4 million, or 11 percent, from the first quarter of fiscal 2023 to the first quarter of fiscal 2024, primarily due to higher sales volume. Compared with the first quarter of the prior year, sales of
data center cooling products increased $37.7 million. Sales of heat transfer and HVAC & refrigeration products decreased $8.8 million and $1.3 million, respectively.
Climate Solutions cost of sales increased $8.8 million, or 5 percent, from the first quarter of fiscal 2023 to the first quarter of fiscal 2024, primarily due to higher sales volume, partially offset by lower raw material prices, which
decreased approximately $8.0 million. As a percentage of sales, cost of sales decreased 480 basis points to 74.6 percent, primarily due to the favorable impact of higher sales volume and improved operating efficiencies, partially offset by
higher labor and inflationary costs.
As a result of the higher sales and lower cost of sales as a percentage of sales, gross profit increased $18.6 million and gross margin improved 480 basis points to 25.4 percent.
SG&A expenses increased $1.3 million, yet decreased 50 basis points as a percentage of sales. The increase in SG&A expenses was primarily driven by higher compensation-related expenses.
Operating income of $44.3 million increased $17.3 million from the first quarter of fiscal 2023 to the first quarter of fiscal 2024, primarily due to higher gross profit.
Performance Technologies
|
Three months ended June 30,
|
||||||||||||||||
|
2023
|
2022
|
|||||||||||||||
|
(in millions)
|
$’s
|
% of sales
|
$’s
|
% of sales
|
||||||||||||
|
Net sales
|
$
|
358.9
|
100.0
|
%
|
$
|
304.3
|
100.0
|
%
|
||||||||
|
Cost of sales
|
300.3
|
83.7
|
%
|
271.3
|
89.2
|
%
|
||||||||||
|
Gross profit
|
58.6
|
16.3
|
%
|
33.0
|
10.8
|
%
|
||||||||||
|
Selling, general and administrative expenses
|
26.6
|
7.4
|
%
|
24.1
|
7.9
|
%
|
||||||||||
|
Restructuring expenses
|
-
|
-
|
1.5
|
0.5
|
%
|
|||||||||||
|
Operating income
|
$
|
32.0
|
8.9
|
%
|
$
|
7.4
|
2.4
|
%
|
||||||||
Performance Technologies net sales increased $54.6 million, or 18 percent, from the first quarter of fiscal 2023 to the first quarter of fiscal 2024, primarily due to higher sales volume and favorable commercial pricing. Compared with the
first quarter of the prior year, sales of liquid-cooled, air-cooled, and advanced solutions products increased $23.8 million, $19.7 million, and $10.3 million, respectively.
Performance Technologies cost of sales increased $29.0 million, or 11 percent, from the first quarter of fiscal 2023 to the first quarter of fiscal 2024, primarily due to higher sales volume, partially offset by lower raw material prices,
which decreased approximately $8.0 million. As a percentage of sales, cost of sales decreased 550 basis points to 83.7 percent, primarily due to the favorable impact of higher sales, partially offset by higher labor and inflationary costs.
As a result of the higher sales and lower cost of sales as a percentage of sales, gross profit increased $25.6 million and gross margin improved 550 basis points to 16.3 percent.
SG&A expenses increased $2.5 million compared with the first quarter of the prior year. As a percentage of sales, SG&A expenses decreased by 50 basis points. The increase in SG&A expenses was primarily due to higher
compensation-related expenses.
Restructuring expenses decreased $1.5 million compared with the first quarter of fiscal 2023. The fiscal 2023 restructuring expenses primarily consisted of severance expenses.
Operating income of $32.0 million increased $24.6 million from the first quarter of fiscal 2023 to the first quarter of fiscal 2024, primarily due to higher gross profit.
Liquidity and Capital Resources
Our primary sources of liquidity are cash flow from operating activities, our cash and cash equivalents as of June 30, 2023 of $92.5 million, and available borrowing capacity of $258.3 million under our revolving credit facility. Given our
extensive international operations, approximately $89.0 million of our cash and cash equivalents are held by our non-U.S. subsidiaries. Amounts held by non-U.S. subsidiaries are available for general corporate use; however, these funds may be
subject to foreign withholding taxes if repatriated. We believe our sources of liquidity will provide sufficient cash flow to adequately cover our funding needs on both a short-term and long-term basis.
Net Cash Provided by Operating Activities
Net cash provided by operating activities for the three months ended June 30, 2023 was $41.7 million, which represents a $27.2 million increase compared with the same period in the prior year. This increase in operating cash flow was
primarily due to the favorable impact of higher earnings, partially offset by unfavorable net changes in working capital, as compared with the same period in the prior year. The unfavorable changes in working capital include higher payments for
incentive compensation, as compared with the same period in the prior year.
Capital Expenditures
Capital expenditures of $15.1 million during the first three months of fiscal 2024 increased $4.7 million compared with the same period in the prior year. The fiscal 2024 capital expenditures include investments supporting our strategic
growth initiatives across several of our business units.
Debt
Our credit agreements require us to maintain compliance with various covenants, including a leverage ratio covenant and an interest expense coverage ratio covenant, which are discussed further below. Indebtedness under our credit agreements
is secured by liens on substantially all domestic assets. These agreements further require compliance with various covenants that may limit our ability to incur additional indebtedness; grant liens; make investments, loans, or guarantees; engage
in certain transactions with affiliates; or make restricted payments including dividends. Also, the credit agreements may require prepayments in the event of certain asset sales.
The leverage ratio covenant within our primary credit agreements requires us to limit our consolidated indebtedness, less a portion of our cash balance, both as defined by the credit agreements, to no more than three and one-quarter times
consolidated net earnings before interest, taxes, depreciation, amortization, and certain other adjustments (“Adjusted EBITDA”). We are also subject to an interest expense coverage ratio covenant, which requires us to maintain Adjusted EBITDA of
at least three times consolidated interest expense. As of June 30, 2023, we were in compliance with our debt covenants. We expect to remain in compliance with our debt covenants during the remainder of fiscal 2024 and beyond.
Forward-Looking Statements
This report, including, but not limited to, the discussion under Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains statements, including information about future financial performance,
accompanied by phrases such as “believes,” “estimates,” “expects,” “plans,” “anticipates,” “intends,” 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. in Part I. of the
Company’s Annual Report on Form 10-K for the year ended March 31, 2023. Other risks and uncertainties include, but are not limited to, the following:
Market Risks:
| • |
The impact of potential adverse developments or disruptions in the global economy and financial markets, including impacts related to inflation, including rising energy costs, along with supply chain challenges, tariffs, sanctions and
other trade issues or cross-border trade restrictions (and any potential resulting trade war), and including impacts associated with the military conflict between Russia and Ukraine;
|
| • |
The impact of other economic, social and political conditions, changes, challenges and unrest, particularly in the geographic, product and financial markets where we and our customers operate and compete, including foreign currency
exchange rate fluctuations; increases in interest rates; recession and recovery therefrom; and the general uncertainties about the impact of regulatory and/or policy changes, including those related to tax and trade that have been or may
be implemented in the U.S. or abroad;
|
| • |
The impact of potential price increases associated with raw materials, including aluminum, copper, steel and stainless steel (nickel), and other purchased component inventory including, but not limited to, increases in the underlying
material cost based upon the London Metal Exchange and related premiums or fabrication costs. These prices may be impacted by a variety of factors, including changes in trade laws and tariffs, the behavior of our suppliers and
significant fluctuations in demand. This risk includes our ability to successfully manage our exposure and our ability to adjust product pricing in response to price increases, including through our quotation process or through contract
provisions for prospective price adjustments, as well as the inherent lag in timing of such contract provisions;
|
| • |
Our ability to mitigate increased labor costs and labor shortages;
|
| • |
The impact of public health threats, such as COVID-19, on the national and global economy, our business, suppliers (and the supply chain), customers, and employees; and
|
| • |
The impact of legislation, regulations, and government incentive programs, including those addressing climate change, on demand for our products and the markets we serve, including our ability to take advantage of opportunities to
supply alternative new technologies to meet environmental and/or energy standards and objectives.
|
Operational Risks:
| • |
The impact of problems, including logistic and transportation challenges, associated with suppliers meeting our quantity, quality, price and timing demands, and the overall health of our suppliers, including their ability and
willingness to supply our volume demands if their production capacity becomes constrained;
|
| • |
The overall health of and price-reduction pressure from our customers in light of economic and market-specific factors and the potential impact on us from any deterioration in the stability or performance of any of our major customers;
|
| • |
Our ability to maintain current customer relationships and compete effectively for new business, including our ability to achieve profit margins acceptable to us by offsetting or otherwise addressing any cost increases associated with
supply chain challenges and inflationary market conditions;
|
| • |
The impact of product or manufacturing difficulties or operating inefficiencies, including any product or program launches, product transfer challenges and warranty claims;
|
| • |
The impact of delays or modifications initiated by major customers with respect to product or program launches, product applications or requirements;
|
| • |
Our ability to consistently structure our operations in order to develop and maintain a competitive cost base with appropriately skilled and stable labor, while also positioning ourselves geographically, so that we can continue to
support our customers with the technical expertise and market-leading products they demand and expect from Modine;
|
| • |
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 the anticipated benefits thereof;
|
| • |
Costs and other effects of the investigation and remediation of environmental contamination; including when related to the actions or inactions of others and/or facilities over which we have no control;
|
| • |
Our ability to recruit and maintain talent, including personnel in managerial, leadership, operational and administrative functions;
|
| • |
Our ability to protect our proprietary information and intellectual property from theft or attack by internal or external sources;
|
| • |
The impact of a substantial disruption or material breach of our information technology systems, and any related delays, problems or costs;
|
| • |
Increasingly complex and restrictive laws and regulations, including those associated with being a U.S. public company and others present in various jurisdictions in which we operate, and the costs associated with compliance therewith;
|
| • |
Increasing emphasis by customers, investors, and employees on environmental, social and corporate governance matters may impose additional costs on us, adversely affect our reputation or expose us to new risks;
|
| • |
Work stoppages or interference at our facilities or those of our major customers and/or suppliers;
|
| • |
The constant and increasing pressures associated with healthcare and associated insurance costs; and
|
| • |
Costs and other effects of litigation, claims, or other obligations.
|
Strategic Risks:
| • |
Our ability to successfully realize anticipated benefits, including improved profit margins and cash flow, from strategic initiatives and our continued application of 80/20 principles across our businesses;
|
| • |
Our ability to accelerate growth by identifying and executing on organic growth opportunities and acquisitions, and to efficiently and successfully integrate acquired businesses;
|
| • |
The potential impacts from actions by activist shareholders, including disruption of our business and related costs.
|
Financial Risks:
| • |
Our ability to fund our global liquidity requirements efficiently for our current operations and meet our long-term commitments in the event of disruption in or tightening of the credit markets or extended recessionary conditions in
the global economy;
|
| • |
The impact of increases in interest rates in relation to our variable-rate debt obligations;
|
| • |
The impact of changes in federal, state or local taxes that could have the effect of increasing our income tax expense;
|
| • |
Our ability to comply with the financial covenants in our credit agreements, including our leverage ratio (net debt divided by Adjusted EBITDA, as defined in our credit agreements) and our interest coverage ratio (Adjusted EBITDA
divided by interest expense, as defined in our credit agreements);
|
| • |
The potential unfavorable impact of foreign currency exchange rate fluctuations on our financial results; and
|
| • |
Our ability to effectively realize the benefits of deferred tax assets in various jurisdictions in which we operate.
|
Forward-looking statements are as of the date of this report; we do not assume any obligation to update any forward-looking statements.
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk.
|
The Company’s quantitative and qualitative disclosures about market risk are incorporated by reference from Part II, Item 7A. of the Company’s Annual Report on Form 10-K for the year ended March 31, 2023. The Company’s market risks have not
materially changed since the fiscal 2023 Form 10-K was filed.
| Item 4. |
Controls and Procedures.
|
Evaluation Regarding Disclosure Controls and Procedures
As of the end of the period covered by this quarterly report on Form 10-Q, management of the Company, under the supervision, and with the participation, of the Company’s President and Chief Executive Officer
and Executive Vice President, Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures, at a reasonable assurance level, as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e). Based
upon that evaluation, the President and Chief Executive Officer and Executive Vice President, Chief Financial Officer have concluded that the design and operation of the Company’s disclosure controls and procedures were effective, at a
reasonable assurance level, as of June 30, 2023.
Changes in Internal Control Over Financial Reporting
There have been no changes in internal control over financial reporting during the first quarter of fiscal 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial
reporting.
PART II. OTHER INFORMATION
| Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds.
|
ISSUER PURCHASES OF EQUITY SECURITIES
The following describes the Company’s purchases of common stock during the first quarter of fiscal 2024:
|
Period
|
Total Number of
Shares Purchased
|
Average
Price Paid
Per Share
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
|
Maximum Number (or
Approximate Dollar
Value) of Shares
that May Yet Be Purchased
Under the Plans or Programs (a)
|
|
April 1 – April 30, 2023
|
_______
|
_______
|
_______
|
$45,372,391
|
|
May 1 – May 31, 2023
|
16,633 (b)
|
$26.32
|
_______
|
$45,372,391
|
|
June 1 – June 30, 2023
|
26,166 (b)
|
$30.69
|
_______
|
$45,372,391
|
|
Total
|
42,799
|
$28.99
|
| (a) |
Effective November 5, 2022, the Company’s Board of Directors authorized the Company to repurchase up to $50.0 million of Modine common stock at such times and prices that it deems to be appropriate. This authorization expires in
November 2024.
|
| (b) |
Includes shares delivered back to the Company by employees and/or directors to satisfy tax withholding obligations that arise upon the vesting of stock awards. The Company, pursuant to its equity compensation plans, gives participants
the opportunity to turn back to the Company the number of shares from the award sufficient to satisfy tax withholding obligations that arise upon the termination of restrictions. These shares are held as treasury shares.
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| Item 5. |
Other Information.
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During the three months ended June 30, 2023, no director or officer of the Company adopted terminated
| Item 6. |
Exhibits.
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(a)
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Exhibits:
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Exhibit No.
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Description
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Incorporated Herein
By
Reference To
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Filed
Herewith
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Form of Fiscal 2024 Performance Stock Award Agreement.
|
X
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||
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Form of Fiscal 2024 Restricted Stock Unit Award Agreement.
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X
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||
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Form of Fiscal 2024 Modine Non-Employee Director Restricted Stock Unit Award Agreement with Deferral.
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X
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||
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Form of Fiscal 2024 Modine Non-Employee Director Restricted Stock Unit Award Agreement without Deferral.
|
X
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|
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Rule 13a-14(a)/15d-14(a) Certification of Neil D. Brinker, President and Chief Executive Officer.
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X
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||
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Rule 13a-14(a)/15d-14(a) Certification of Michael B. Lucareli, Executive Vice President, Chief Financial Officer.
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X
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||
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Section 1350 Certification of Neil D. Brinker, President and Chief Executive Officer.
|
X
|
||
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Section 1350 Certification of Michael B. Lucareli, Executive Vice President, Chief Financial Officer.
|
X
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||
|
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
|
X
|
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema.
|
X
|
|
|
101.CAL
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Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
X
|
|
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
X
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
X
|
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
X
|
|
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
|
X
|
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 thereunto duly authorized.
MODINE MANUFACTURING COMPANY
(Registrant)
By: /s/ Michael B. Lucareli
Michael B. Lucareli, Executive Vice President, Chief Financial Officer*
Date: August 3, 2023
|
*
|
Executing as both the principal financial officer and a duly authorized officer of the Company
|
31
Exhibit 10.1
MODINE MANUFACTURING COMPANY
PERFORMANCE STOCK AWARD
AWARD AGREEMENT
We are pleased to inform you that you have been granted an opportunity to earn a Performance Stock Award of Modine Manufacturing Company (the “Company”), subject to the terms and conditions of the Modine
Manufacturing Company 2020 Incentive Compensation Plan (the “Plan”) and of this Award Agreement. Unless otherwise defined herein, all terms used in this Award Agreement shall have the same meanings as set forth in the Plan.
|
Full name of Grantee:
|
|
|
|
|
|
Date of Award:
|
|
|
|
|
|
Target number of Common Stock:
|
|
|
|
|
|
Performance Period:
|
April 1, 2023 to March 31, 2026
|
1. Performance Stock Award. Pursuant to the Plan, you are hereby granted a Performance Stock Award, subject to the terms and conditions of this Award Agreement and the Plan. The number of shares of Common
Stock to be issued hereunder if the Target Performance Goals are achieved is set forth above.
2. Terms of Performance Stock Award and Performance Goals. You have been granted an opportunity to earn shares of Common Stock under this Performance Stock Award. The actual number of shares of Common
Stock earned by you will be determined as described below, based upon the actual results for the Performance Period set forth above compared to the Performance Goals set forth below, provided that you remain an employee of the Company or a
Subsidiary for the entire Performance Period (subject to the provisions below regarding death, Disability or retirement) and the achievement of the Performance Goals is greater than the Threshold amount specified below (the “Conditions”). If
either of these Conditions is not satisfied, then except as otherwise provided in this Award Agreement and the Plan, no Common Stock shall be earned. The Performance Goals for this Performance Stock Award are: Cash Flow Return on Invested
Capital (“Cash Flow ROI”) and Average Annual Adjusted EBITDA Growth, with each having a 50% weight. The Threshold Performance Goals are the minimum Performance Goals necessary for the Performance Period that must be achieved by the Company in
order for you to qualify for any Common Stock and the Maximum Performance Goals are the minimum Performance Goals for the Performance Period in order for you to qualify for the maximum number of shares of Common Stock earned under this
Performance Stock Award.
|
Performance Goal: Cash Flow ROI
|
Performance Stock Award Earned Based on
Achievement of Performance Goal
|
|
Threshold: 7.0%
|
5% of Target amount of Performance Stock
|
|
Target: 10.5%
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50% of Target amount of Performance Stock
|
|
Maximum: ≥14.0%
|
100% of Target amount of Performance Stock
|
|
Performance Goal: Average Annual
Adjusted EBITDA Growth
|
Performance Stock Award Earned Based on
Achievement of Performance Goal
|
|
Threshold: 2.0%
|
5% of Target amount of Performance Stock
|
|
Target: 7.0%
|
50% of Target amount of Performance Stock
|
|
Maximum: ≥12.0%
|
100% of Target amount of Performance Stock
|
“Cash Flow ROI” or “Cash Flow Return on Invested Capital” means the sum of Adjusted Free Cash Flow plus Cash Interest, all divided by Average Capital Employed. Adjusted Free Cash Flow equals “Net cash
provided by operating activities”, less “Expenditures for property, plant and equipment” (both as reported externally for the Company’s audited financial statements), plus or minus Permitted Adjustments (defined below) and Cash Interest equals
cash paid for interest expense related to outstanding debt. Average Capital Employed for each fiscal year equals total debt plus shareholders’ equity averaged over five points (i.e., the last day of each fiscal quarter and prior fiscal
year-end); and where shareholder’s equity excludes shareholder equity attributable to noncontrolling interests. Permitted Adjustments include:
Restructuring Charges
| • |
Fees and expenses for restructuring consultants or financial advisors
|
| • |
Employee severance, outplacement and related benefits
|
| • |
Employee insurance and benefits continuation
|
| • |
Contractual salary continuation for terminated employees
|
| • |
Equipment transfers and facility preparation
|
| • |
Environmental services (e.g., plant clean-up prior to sale)
|
Acquisition and Divestiture Charges
| • |
Fees and expenses for transaction advisors (i.e., financial advisors, consultants, lawyers and accountants)
|
| • |
Integration expenses
|
| • |
Other incremental costs and charges that are non-recurring and directly related to the transaction
|
Other
| • |
Fees and expenses for strategy advisory services associated with a specific transaction or unique project
|
| • |
Unusual, non-recurring or extraordinary cash and non-cash charges or income
|
2
Adoption of New Accounting Standards
| • |
The impact of the adoption of new U.S. GAAP accounting standards and significant changes in the Company’s accounting methods.
|
Acquisitions & Divestitures
| • |
The Committee has discretion to take into consideration the impact that a significant acquisition or divestiture may have on these Plan financial measures and apply appropriate treatment.
|
Notwithstanding the foregoing, the Committee may disregard all or part of any Permitted Adjustment as separately applicable to each performance metric if doing so would decrease the amount payable under this
Performance Stock Award.
“Average Annual Adjusted EBITDA Growth” means the simple three-year arithmetic average of the Company’s Adjusted EBITDA Growth during the Performance Period, as reported externally for the Company’s audited financial
statements. Adjusted EBITDA Growth equals current-year Adjusted EBITDA minus prior-year Adjusted EBITDA, with that total divided by prior-year Adjusted EBITDA. Adjusted EBITDA equals “Operating Income” plus “Depreciation
and Amortization Expenses”, both as reported externally for the Company’s audited financial statements, plus or minus Permitted Adjustments.
If actual Cash Flow ROI or EBITDA Growth for the Performance Period is between Threshold and Target and/or between Target and Maximum, the number of shares of Common Stock earned shall be determined on a linear
basis. In the event that the Company’s actual Cash Flow ROI or EBITDA Growth does not meet the Threshold for the Performance Period, no Common Stock shall be earned relative to such metric under this Performance Stock Award. In the event that
the Company’s actual Cash Flow ROI or EBITDA Growth exceeds the Maximum for the Performance Period, only the Maximum percentage of the Target number of shares of Common Stock set forth above shall be earned relative to such metric.
3. Delivery of Shares of Common Stock. Performance Stock earned shall be paid in shares of Common Stock delivered to you after the end of the Performance Period as soon as administratively practicable after
the Committee has approved and certified the number of shares of Performance Stock that have been earned hereunder or, in the event of vesting covered under Paragraph 4 below, within thirty (30) days of the date of your termination of employment.
4. Change in Control. Notwithstanding anything in this Agreement to the contrary, upon a Change in Control, all outstanding Performance Stock shall be deemed to have satisfied the Target Performance Goals
and shall vest pro-rata based upon the period worked during the Performance Period as of the date of an involuntary termination of your employment with the Company or a Subsidiary by the Company without Cause or by you for Good Reason within one
(1) year following a Change in Control. “Good Reason” means a material diminution in your base salary; material diminution in your annual target bonus opportunity; material diminution in your authority, duties or responsibilities; material
diminution in authority, duties or responsibilities of the supervisor to whom you report; material diminution in the budget over which you retain authority; or material change in the geographic location at which you must perform services.
3
5. Death or Disability. Notwithstanding anything in this Agreement to the contrary, upon your termination of employment due to death or Disability (as defined herein), a prorated portion (based on the
period working during the Performance Period) of the Performance Stock granted to you hereunder shall vest based on the Company’s actual achievement of the Performance Goals at the end of the Performance Period as certified by the Committee, and
shares will be delivered to you after the Committee has approved and certified the number of shares of Performance Stock that have been earned hereunder. For purposes of this Award Agreement, “Disability” shall mean “permanent and total
disability” as defined in Section 22 (e)(3) of the Code.
6. Forfeiture. Other than as described above in Paragraph 4 regarding a Change in Control or Paragraph 5 regarding death or Disability, upon your termination of employment with the Company or a Subsidiary
for any reason during the Performance Period, you will forfeit all Performance Stock covered by this Agreement.
7. Shareholder Status. While this Performance Stock Award is outstanding and until Common Stock is issued hereunder, you shall not have any rights as a shareholder of the Company, including the right to
vote and the right to receive dividends on any Common Stock potentially earned under this Performance Stock Award.
8. Transfer. This Performance Stock Award shall be nontransferable. Notwithstanding the foregoing, you shall have the right to transfer the Performance Stock Award or Common Stock otherwise issued
hereunder upon your death, either by the terms of your will or under the laws of descent and distribution.
9. No Obligation of Employment. This Performance Stock Award shall not impose any obligation on the Company to continue your employment with the Company or any Subsidiary.
10. Controlling Provisions; Plan Controls. In the event of a conflict between the terms of this Award Agreement and any employment agreement or change in control agreement between you and the Company, this
Award Agreement shall control. This Performance Stock Award is qualified in its entirety by reference to the terms and conditions of the Plan under which it is granted, a copy of which you may request from the Company. The Plan empowers the
Committee to make interpretations, rules and regulations thereunder and, in general, provides that the determinations of such Committee with respect to the Plan shall be binding upon you. The Plan is incorporated herein by reference.
11. Forfeiture Under Recoupment Policy. The Company shall have the power and the right to require you to forfeit and return the shares of Common Stock issued hereunder or any proceeds therefrom consistent
with any recoupment policy maintained by the Company under applicable law, as such policy is amended from time to time.
12. Personal Information. Solium Capital LLC and Equiniti Trust Company assist the Company in the operation of the Plan and the administration of the Performance Stock Award granted pursuant to this Award
Agreement. If you choose to participate in the Plan, you acknowledge and consent to the Company sharing your name, email, and information regarding the grant of the Performance Stock Award under this Award Agreement with both Solium Capital LLC
and Equiniti Trust Company.
13. Use of Words. The use of words of the masculine gender in this Award Agreement is intended to include, wherever appropriate, the feminine or neuter gender and vice versa.
14. Successors. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company.
4
15. Taxes. The Company may require payment of or withhold any tax which it believes is required as a result of this Performance Stock Award, and the Company may defer making delivery with respect to shares
issuable hereunder until arrangements satisfactory to the Company have been made with respect to such tax withholding obligations.
16. Committee Discretion. Notwithstanding anything in this Agreement, the Committee retains the discretion to make negative adjustments to the final determination of the achievement of any Performance Goals.
17. No Legal or Tax Advice. Notwithstanding anything stated in this Award Agreement, the Company is not providing any legal or tax advice related to this Performance Stock Award or any Common Stock issued
hereunder. Nothing stated in this Award Agreement is intended to cover any legal or tax situation. You are encouraged to consult your own legal and/or tax advisors to address any questions or concerns you may have regarding this Award Agreement
or any Common Stock issued hereunder.
18. Controlling Law. The law of the State of Wisconsin, except its law with respect to choice of law, shall be controlling in all matters relating to this Agreement.
By your electronic agreement and the signature of the Company’s representative below, you and the Company agree that this Performance Stock Award awarded to you under this Award Agreement is subject to the terms and
conditions of the Plan, a copy of which is available to you upon request. As provided in the Plan, you hereby agree to accept as binding any decision of the Committee with respect to the interpretation of this Award Agreement, or any other
matters associated therewith.
IN WITNESS WHEREOF, the Company has caused this Award Agreement to be executed as of __________________, 2023.
|
MODINE MANUFACTURING COMPANY
|
|||
|
By:
|
/s/Neil D. Brinker
|
||
|
Neil D. Brinker
|
|||
|
President and Chief Executive Officer
|
|||
5
Exhibit 10.2
MODINE MANUFACTURING COMPANY
2020 INCENTIVE COMPENSATION PLAN
RESTRICTED STOCK UNIT AWARD
AWARD AGREEMENT
We are pleased to inform you that you have been granted a Restricted Stock Unit Award subject to the terms and conditions of the Modine Manufacturing Company 2020 Incentive Compensation Plan (the “Plan”) and of this
Award Agreement. Unless otherwise defined herein, all terms used in this Award Agreement shall have the same meanings as set forth in the Plan.
|
Full name of Grantee:
|
|
|
|
|
|
Date of Award:
|
|
|
|
|
|
Total number of Restricted Stock Units:
|
1. Restricted Stock Unit Award. Pursuant to the Plan, you are hereby granted a Restricted Stock Unit Award (“Award”), subject to the terms and conditions of this Award Agreement and the Plan. Accordingly,
you are hereby granted the aggregate number of Restricted Stock Units (“RSUs”) set forth above, subject to the restrictions and conditions set forth in this Award Agreement.
2. Restricted Period. Upon the expiration of the Restricted Period (as described in the chart below) applicable to the number of RSUs specified in the chart below, you shall receive one share of Common Stock
for each RSU for which the Restricted Period has expired. For purposes of this Award Agreement, the Restricted Period shall mean the period beginning on the date of this Award set forth above and ending as set forth below:
|
Number of RSUs that Vest
|
Restricted Period Expiration
|
|
33% of the total number of RSUs
|
|
|
33% of the total number of RSUs
|
|
|
34% of the total number of RSUs
|
Except as otherwise provided in Section 8.02(f) or Section 11.02 of the Plan, in the event of your
termination of employment with the Company or a Subsidiary for any reason (other than due to Disability (as defined below), death, or (with Committee approval) your retirement) prior to the expiration of the Restricted Period for any RSUs, you
shall forfeit to the Company all RSUs for which the Restricted Period has not expired and the right to receive any Common Stock with respect to such RSUs. If you separate from service with the Company or a Subsidiary due to Disability, death, or
(with Committee approval) your retirement prior to the end of the Restricted Period for any RSUs, your Restricted Stock Unit Award shall vest in full. For purposes of this Award Agreement, “Disability” shall mean “permanent and total disability”
as defined in Section 22 (e)(3) of the Code.
3. Shareholder Status. You shall not have any voting or other ownership rights in the Company arising from the grant of RSUs under this Agreement, unless and until such RSUs are settled pursuant to Section 4,
below. Further, you shall not be entitled to dividend equivalents during the period you hold RSUs.
4. Settlement and Delivery. As soon as administratively practicable after the expiration of the Restricted Period, the Company shall ascribe to you (or, in the event of your death, your beneficiary) a share
of Common Stock for each RSU that vests as a result of the expiration of the Restricted Period in a book entry on the records kept by the Company’s transfer agent or such other method of delivering shares of Common Stock subject to this Award, as
determined by the Committee.
5. Transfer. This Restricted Stock Unit Award shall not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by you other than in the event of your death. Except for the
designation of your beneficiary in the event of your death, the purported assignment, alienation, pledge, attachment, transfer or encumbrance of the Award or this Award Agreement shall be void and unenforceable against the Company. This provision
shall not prevent you from transferring the shares of Common Stock issued hereunder after the expiration of the Restricted Period.
6. No Obligation of Employment. This Restricted Stock Unit Award shall not impose any obligation on the Company to continue your employment with the Company or any Subsidiary.
7. Controlling Provisions; Plan Controls. In the event of a conflict between the terms of this Award Agreement and any employment agreement or change in control agreement between you and the Company,
this Award Agreement shall control. This Award Agreement is qualified in its entirety by reference to the terms and conditions of the Plan under which it is granted, a copy of which you may request from the Company. The Plan empowers the
Committee to make interpretations, rules and regulations thereunder and, in general, provides that the determinations of such Committee with respect to the Plan shall be binding upon you. The Plan is incorporated herein by reference.
8. Change in Control. The vesting of the Award in the event of a Change in Control is governed by Section 11.02 of the Plan. Involuntary termination of your employment by the Company would be termination of
your employment by the Company without Cause or termination by you of your employment for Good Reason. “Good Reason” means a material diminution in your base salary; material diminution in your annual target bonus opportunity; material diminution
in your authority, duties or responsibilities; material diminution in authority, duties or responsibilities of the supervisor to whom you report; material diminution in the budget over which you retain authority; or material change in the
geographic location at which you must perform services.
9. Forfeiture Under Recoupment Policy. The Company shall have the power and the right to require you to forfeit and return the shares of Common Stock issued as a result of the vesting of any Award or any
proceeds therefrom consistent with any recoupment policy maintained by the Company under applicable law, as such policy is amended from time to time.
10. Use of Words. The use of words of the masculine gender in this Award Agreement is intended to include, wherever appropriate, the feminine or neuter gender and vice versa.
11. Successors. This Award Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company.
12. Taxes. The Company may require payment of or withhold any tax which it believes is required as a result of the Award and/or the issuance of Common Stock resulting from the vesting of the RSUs that are the
subject of this Award, and the Company may defer making delivery with respect to shares issuable hereunder until arrangements satisfactory to the Company have been made with respect to such tax withholding obligations.
2
13. No Legal or Tax Advice. Notwithstanding anything stated in this Award Agreement, the Company is not providing any legal or tax advice related to this Award or any Common Stock that may be obtained upon
vesting of this Award. Nothing stated in this Award is intended to cover any legal or tax situation. You are encouraged to consult your own legal and/or tax advisors to address any questions or concerns you may have regarding this Award or any
Common Stock that may be obtained upon vesting of this Award.
14. Personal Information. Solium Capital LLC and Equiniti Trust Company assist the Company in the operation of the Plan and the administration of the Restricted Stock Unit Award granted pursuant to this Award
Agreement. If you choose to participate in the Plan, you acknowledge and consent to the Company sharing your name, email, and information regarding the grant of the Restricted Stock Unit Award under this Award Agreement with both Solium Capital
LLC and Equiniti Trust Company.
By your electronic agreement and the signature of the Company’s representative below, you and the Company agree that the Restricted Stock Unit Award awarded to you under this Award Agreement are subject to the terms
and conditions of the Plan, a copy of which is available to you upon request. As provided in the Plan, you hereby agree to accept as binding any decision of the Committee with respect to the interpretation of the Plan and this Award Agreement, or
any other matters associated therewith.
IN WITNESS WHEREOF, the Company has caused this Award Agreement to be executed as of __________________, 2023.
|
MODINE MANUFACTURING COMPANY
|
|||
|
By:
|
/s/Neil D. Brinker
|
||
|
Neil D. Brinker
|
|||
|
President and Chief Executive Officer
|
|||
3
Exhibit 10.3
MODINE MANUFACTURING COMPANY
2020 INCENTIVE COMPENSATION PLAN
NON-EMPLOYEE DIRECTOR
DEFERRED RESTRICTED STOCK UNIT AWARD
We are pleased to inform you that you have been granted a Restricted Stock Unit Award (the “Award”) subject to the terms and conditions of the Modine Manufacturing Company 2020 Incentive Compensation Plan (the “Plan”)
and of this Award Agreement. Unless otherwise defined herein, all terms used in this Award Agreement shall have the same meanings as set forth in the Plan.
Full name of Grantee:
Date of Award:
Total number of
Restricted Stock Units:
1. Restricted Stock Unit Award and Vesting. Pursuant to the Plan and your election pursuant to that certain Annual Stock Grant RSU Election Form (the “Election Form”) that you delivered to the Company during
the calendar year prior to the date of this Award, you are hereby granted an Award, subject to the terms and conditions of this Award Agreement and the Plan. Accordingly, you are hereby granted the number of restricted stock units set forth above
(the “RSUs”), effective as of the date of Award set forth above (the “Grant Date”). All RSUs granted hereunder shall vest as of the one-year anniversary of the Grant Date (the “Vesting Date”) provided you are still serving as a Director of the
Company on the Vesting Date. In the event of your termination of service as a Director prior to the Vesting Date for any reason, you shall forfeit to the Company all RSUs and the right to receive any Common Stock with respect to such RSUs.
2. Settlement and Delivery. The above RSUs shall be settled as of the date you elected in the Election Form (such date that you elected, the “Settlement Date”), provided you may delay the date the RSUs are settled if you submit a new
Settlement Date to Modine Manufacturing Company (the “Company”) in accordance with the procedures set forth in the Annual Stock Grant RSU Election Form. As of the Settlement Date, each RSU awarded to you under this Award Agreement shall be settled
by ascribing to you (or in the event of your death, your beneficiary) a share of Common Stock in book entry on the records kept by the Company’s transfer agent or such other method of delivering shares of Common Stock subject to this Award
Agreement, as determined by the Committee. You shall not have any voting or other ownership rights in the Company arising from the grant of RSUs under this Award Agreement, unless and until such RSUs are settled pursuant to the terms hereof.
3. Dividend Equivalents. If any dividends are paid by the Company on the Company’s Common Stock between the Grant Date and the Settlement Date, then on the date of such a dividend payment, you shall be
granted an additional number of RSUs equal to the amount of dividends you would have received if your RSUs had been outstanding shares of Common Stock on the date of the dividend payment to the Company’s shareholders, divided by the average closing
price of a share of Common Stock for the one-month period prior to the dividend payment date. Such dividend RSUs shall vest and be settled at the same time as all other RSUs are settled under this Award
Agreement.
4. Transfer. The Award shall not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by you other than in the event of your death. Except for the designation of your
beneficiary in the event of your death, the purported assignment, alienation, pledge, attachment, transfer or encumbrance of the Award or this Award Agreement shall be void and unenforceable against the Company. This provision shall not prevent
you from transferring any shares of Common Stock issued hereunder following the issuance of such shares in settlement of this Award.
5. No Obligation of Service. The Award shall not impose any obligation on the Company to continue your service with the Company.
6. Provisions of the Plan Control. The Award is qualified in its entirety by reference to the terms and conditions of the Plan under which it is granted, a copy of
which you may request from the Company. The Plan empowers the Committee to make interpretations, rules and regulations thereunder and, in general, provides that the determinations of such Committee with respect to the Plan shall be binding upon
you. The Plan is incorporated herein by reference.
7. Forfeiture Under Recoupment Policy. The Company shall have the power and the right to require you to forfeit and return any shares of Common Stock issued pursuant to this Award or any proceeds therefrom
consistent with any recoupment policy maintained by the Company under applicable law, as such policy is amended from time to time.
8. Use of Words. The use of words of the masculine gender in this Award Agreement is intended to include, wherever appropriate, the feminine or neuter gender and vice versa.
9. Successors. This Award Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company.
10. Taxes. The Company may require payment of or withhold any minimum tax which it believes it is required to withhold, if any, as a result of the Award, and the Company may defer making delivery with respect
to shares issuable hereunder until arrangements satisfactory to the Company have been made with respect to such tax withholding obligations.
11. No Legal or Tax Advice. Notwithstanding anything stated in this Award Agreement, the Company is not providing any legal or tax advice related to the Award or any Common Stock that may be obtained upon
settlement of the Award. Nothing stated in this Award Agreement is intended to cover any legal or tax situation. You are encouraged to consult your own legal and/or tax advisors to address any questions or concerns you may have regarding the Award
or any Common Stock that may be obtained upon settlement of the Award.
12. Personal Information. Solium Capital LLC and Equiniti Trust Company assist the Company in the operation of the Plan and the administration of the Award granted pursuant to this Award Agreement. If you
choose to participate in the Plan, you acknowledge and consent to the Company sharing your name, email, and information regarding the grant of the Award under this Award Agreement with both Solium Capital LLC and Equiniti Trust Company.
SIGNATURES ON THE FOLLOWING PAGE
2
By your signature and the signature of the Company’s representative below, you and the Company agree that the RSUs awarded to you under this Award Agreement are subject to the terms and conditions of the Plan, a copy
of which is available to you upon request. As provided in the Plan, you hereby agree to accept as binding any decision of the Committee with respect to the interpretation of the Plan and this Award Agreement, or any other matters associated
therewith.
IN WITNESS WHEREOF, the Company has caused these presents to be executed as of ________ __, ____.
| MODINE MANUFACTURING COMPANY | ||
|
By:
|
||
|
Neil D. Brinker
|
||
|
President and Chief Executive Officer
|
||
The undersigned hereby accepts the foregoing Restricted Stock Unit Award and agrees to the terms and conditions of this Award Agreement and of the Plan.
3
Exhibit 10.4
MODINE MANUFACTURING COMPANY
2020 INCENTIVE COMPENSATION PLAN
NON-EMPLOYEE DIRECTOR
RESTRICTED STOCK UNIT AWARD
We are pleased to inform you that you have been granted a Restricted Stock Unit Award (the “Award”) subject to the terms and conditions of the Modine Manufacturing Company 2020 Incentive Compensation Plan (the “Plan”)
and of this Award Agreement. Unless otherwise defined herein, all terms used in this Award Agreement shall have the same meanings as set forth in the Plan.
Full name of Grantee:
Date of Award:
Total number of
Restricted Stock Units:
1. Restricted Stock Unit Award and Vesting. Pursuant to the Plan, you are hereby granted an Award, subject to the terms and conditions of this Award Agreement and the Plan. Accordingly, you are
hereby granted the number of restricted stock units set forth above (the “RSUs”), effective as of the date of Award set forth above (the “Grant Date”). All RSUs granted hereunder shall vest as of the one-year anniversary of the Grant Date (the
“Vesting Date”) provided you are serving as a Director of the Company on the Vesting Date. In the event of your termination of service as a Director prior to the Vesting Date for any reason, you shall forfeit to the Company all RSUs and the right
to receive any Common Stock with respect to such RSUs.
2. Settlement and Delivery. As of the Vesting Date, each RSU awarded to you under this Award Agreement shall be settled by ascribing to you a share of Common Stock in book entry on the records
kept by the Company’s transfer agent or such other method of delivering shares of Common Stock subject to this Award Agreement, as determined by the Committee. You shall not have any voting or other ownership rights in the Company arising from the
grant of RSUs under this Award Agreement, unless and until such RSUs are settled pursuant to the terms hereof.
3. Dividend Equivalents. If any dividends are paid by the Company on the Company’s Common Stock between the Grant Date and the Vesting Date, then on the date of such a dividend payment, you shall
be granted an additional number of RSUs equal to the amount of dividends you would have received if your RSUs had been outstanding shares of Common Stock on the date of the dividend payment to the Company’s shareholders, divided by the average
closing price of a share of Common Stock for the one-month period prior to the dividend payment date. Such dividend RSUs shall vest and be settled at the same time as all other RSUs are settled under this
Award Agreement (i.e., as of the Vesting Date).
4. Transfer. The Award shall not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by you. The purported assignment, alienation, pledge, attachment, transfer
or encumbrance of the Award or this Award Agreement shall be void and unenforceable against the Company. This provision shall not prevent you from transferring any shares of Common Stock issued hereunder following the issuance of such shares in
settlement of this Award.
5. No Obligation of Service. The Award shall not impose any obligation on the Company to continue your service with the Company.
6. Provisions of the Plan Control. The Award is qualified in its entirety by reference to the terms and conditions of the Plan under which it is granted, a copy of which you may request from the
Company. The Plan empowers the Committee to make interpretations, rules and regulations thereunder and, in general, provides that the determinations of such Committee with respect to the Plan shall be binding upon you. The Plan is incorporated
herein by reference.
7. Forfeiture Under Recoupment Policy. The Company shall have the power and the right to require you to forfeit and return any shares of Common Stock issued pursuant to this Award or any proceeds therefrom
consistent with any recoupment policy maintained by the Company under applicable law, as such policy is amended from time to time.
8. Use of Words. The use of words of the masculine gender in this Award Agreement is intended to include, wherever appropriate, the feminine or neuter gender and vice versa.
9. Successors. This Award Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company.
10. Taxes. The Company may require payment of or withhold any minimum tax which it believes it is required to withhold, if any, as a result of the Award and the Company may defer making delivery
with respect to shares issuable hereunder until arrangements satisfactory to the Company have been made with respect to such tax withholding obligations.
11. No Legal or Tax Advice. Notwithstanding anything stated in this Award Agreement, the Company is not providing any legal or tax advice related to the Award or any Common Stock that may be
obtained upon settlement of the Award. Nothing stated in this Award Agreement is intended to cover any legal or tax situation. You are encouraged to consult your own legal and/or tax advisors to address any questions or concerns you may have
regarding the Award or any Common Stock that may be obtained upon settlement of the Award.
12. Personal Information. Solium Capital LLC and Equiniti Trust Company assist the Company in the operation of the Plan and the administration of the Award granted pursuant to this Award
Agreement. If you choose to participate in the Plan, you acknowledge and consent to the Company sharing your name, email, and information regarding the grant of the Award under this Award Agreement with both Solium Capital LLC and Equiniti Trust
Company.
SIGNATURES ON THE FOLLOWING PAGE
2
By your signature and the signature of the Company’s representative below, you and the Company agree that the RSUs awarded to you under this Award Agreement are subject to the terms and conditions of the Plan, a copy
of which is available to you upon request. As provided in the Plan, you hereby agree to accept as binding any decision of the Committee with respect to the interpretation of the Plan and this Award Agreement, or any other matters associated
therewith.
IN WITNESS WHEREOF, the Company has caused these presents to be executed as of ________ __, _____.
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MODINE MANUFACTURING COMPANY
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By:
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Neil D. Brinker
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President and Chief Executive Officer
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The undersigned hereby accepts the foregoing Restricted Stock Unit Award and agrees to the terms and conditions of this Award Agreement and of the Plan.
3
Exhibit 31.1
Certification
I, Neil D. Brinker, certify that:
| 1. |
I have reviewed this quarterly report on Form 10-Q of Modine Manufacturing Company for the quarter ended June 30, 2023;
|
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
| 4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
| a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
| b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
| c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
|
| d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
| 5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
|
| a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
|
| b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date:
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August 3, 2023
|
|
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/s/ Neil D. Brinker
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||
|
Neil D. Brinker
|
||
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President and Chief Executive Officer
|
||
Exhibit 31.2
Certification
I, Michael B. Lucareli, certify that:
| 1. |
I have reviewed this quarterly report on Form 10-Q of Modine Manufacturing Company for the quarter ended June 30, 2023;
|
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this report;
|
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
|
| 4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
| a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
| b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
| c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
|
| d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
| 5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):
|
| a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
|
| b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date:
|
August 3, 2023
|
|
|
/s/ Michael B. Lucareli
|
||
|
Michael B. Lucareli
|
||
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Executive Vice President, Chief Financial Officer
|
||
Exhibit 32.1
Certification
Pursuant to 18 United States Code § 1350
In connection with the quarterly report of Modine Manufacturing Company (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof
(the “Report”), I, Neil D. Brinker, President and Chief Executive Officer of the Company certify, pursuant to 18 U.S.C. § 1350, that, to the best of my knowledge:
| 1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
| 2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Date:
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August 3, 2023
|
|
|
/s/ Neil D. Brinker
|
||
|
Neil D. Brinker
|
||
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President and Chief Executive Officer
|
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This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Exhibit 32.2
Certification
Pursuant to 18 United States Code § 1350
In connection with the quarterly report of Modine Manufacturing Company (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof
(the “Report”), I, Michael B. Lucareli, Executive Vice President, Chief Financial Officer of the Company certify, pursuant to 18 U.S.C. § 1350, that, to the best of my knowledge:
| 1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
| 2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Date:
|
August 3, 2023
|
|
|
/s/ Michael B. Lucareli
|
||
|
Michael B. Lucareli
|
||
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Executive Vice President, Chief Financial Officer
|
||
This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.