Modine Manufacturing Co 10-Q for FY2026 Q1
Modine Manufacturing Co (MOD)
About this 10-Q
Modine Manufacturing Co filed this 10-Q on July 31, 2025, covering the quarter ended June 30, 2025 (FY2026 Q1).
Headline figures
Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $682.8M
- up 3.2% from $661.5M a year earlier
- Net income
- $51.2M
- up 8.2% from net income of $47.3M a year earlier
- Diluted EPS
- $0.95
- up 8.0% from $0.88 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM
For the quarterly period ended
or
For the transition period from ____________ to ____________
Commission file number
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
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(Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
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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.
| Accelerated Filer ☐ | | |
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Non-accelerated Filer ☐ | | Smaller reporting company | |
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| | Emerging growth company | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
The number of shares outstanding of the registrant’s common stock, $0.625 par value, was
MODINE MANUFACTURING COMPANY
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
MODINE MANUFACTURING COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended June 30, 2025 and 2024
(In millions, except per share amounts)
(Unaudited)
| | Three months ended June 30, | ||||
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| 2025 |
| 2024 | ||
Net sales | | $ | | | $ | |
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 | |
| ( | |
| ( |
Other expense – net | |
| ( | |
| ( |
Earnings before income taxes | |
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Provision for income taxes | |
| ( | |
| ( |
Net earnings | |
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Net earnings attributable to noncontrolling interest | |
| ( | |
| ( |
Net earnings attributable to Modine | | $ | | | $ | |
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Net earnings per share attributable to Modine shareholders: | |
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Basic | | $ | | | $ | |
Diluted | | $ | | | $ | |
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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.
1
MODINE MANUFACTURING COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the three months ended June 30, 2025 and 2024
(In millions)
(Unaudited)
| | Three months ended June 30, | ||||
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| 2025 |
| 2024 | ||
Net earnings | | $ | | | $ | |
Other comprehensive income (loss), net of income taxes: | |
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Foreign currency translation | |
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| ( |
Defined benefit plans | |
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Cash flow hedges | |
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Total other comprehensive income (loss) | |
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| ( |
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Comprehensive income | |
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Comprehensive income attributable to noncontrolling interest | |
| ( | |
| ( |
Comprehensive income attributable to Modine | | $ | | | $ | |
The notes to condensed consolidated financial statements are an integral part of these statements.
2
MODINE MANUFACTURING COMPANY
CONSOLIDATED BALANCE SHEETS
June 30, 2025 and March 31, 2025
(In millions, except per share amounts)
(Unaudited)
| | June 30, 2025 |
| March 31, 2025 | ||
ASSETS |
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Cash and cash equivalents | | $ | | | $ | |
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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LIABILITIES AND SHAREHOLDERS’ EQUITY | |
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Short-term debt | | $ | — | | $ | |
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 18) | |
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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 | |
| ( | |
| ( |
Treasury stock, at cost, | |
| ( | |
| ( |
Total Modine shareholders’ equity | |
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Noncontrolling interest | |
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Total equity | |
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Total liabilities and equity | | $ | | | $ | |
The notes to condensed consolidated financial statements are an integral part of these statements.
3
MODINE MANUFACTURING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended June 30, 2025 and 2024
(In millions)
(Unaudited)
| | Three months ended June 30, | ||||
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| 2025 |
| 2024 | ||
Cash flows from operating activities: |
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Net earnings | | $ | | | $ | |
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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Other – net | |
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Changes in operating assets and liabilities: | |
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Trade accounts receivable | |
| ( | |
| ( |
Inventories | |
| ( | |
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Accounts payable | |
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Other assets and liabilities | | | ( | | | ( |
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 | |
| ( | |
| ( |
Payments for business acquisitions | |
| ( | |
| — |
Other – net | |
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Net cash used for investing activities | |
| ( | |
| ( |
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Cash flows from financing activities: | |
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Borrowings of debt | |
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Repayments of debt | |
| ( | |
| ( |
Repayments on bank overdraft facilities – net | |
| ( | |
| ( |
Purchases of treasury stock | |
| ( | |
| ( |
Dividend paid to noncontrolling interest | |
| ( | |
| ( |
Other – net | |
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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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| ( |
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 | | $ | | | $ | |
The notes to condensed consolidated financial statements are an integral part of these statements.
4
MODINE MANUFACTURING COMPANY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the three months ended June 30, 2025
(In millions)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | 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 |
| Amount |
| capital |
| earnings |
| loss |
| cost |
| interest |
| Total | |||||||
Balance, March 31, 2025 |
| | | $ | | | $ | | | $ | | | $ | ( | | $ | ( | | $ | | | $ | |
Net earnings |
| — | |
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Other comprehensive income |
| — | |
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Stock options and awards |
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Purchases of treasury stock |
| — | |
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| ( | |
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| ( |
Stock-based compensation expense |
| — | |
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Dividends declared or paid to noncontrolling interest |
| — | |
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| ( | |
| ( |
Balance, June 30, 2025 |
| | | $ | | | $ | | | $ | | | $ | ( | | $ | ( | | $ | | | $ | |
The notes to condensed consolidated financial statements are an integral part of these statements.
5
MODINE MANUFACTURING COMPANY
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the three months ended June 30, 2024
(In millions)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Accumulated | | | | | | | | | | |
| | | | Additional | | | | | other | | Treasury | | Non- | | | | |||||||
| | Common stock | | paid-in | | Retained | | comprehensive | | stock, at | | controlling | | | | ||||||||
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| Shares |
| Amount |
| capital |
| earnings |
| loss |
| cost |
| interest |
| Total | |||||||
Balance, March 31, 2024 |
| | | $ | | | $ | | | $ | | | $ | ( | | $ | ( | | $ | | | $ | |
Net earnings |
| — | |
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Other comprehensive loss |
| — | |
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| ( | |
| ( |
Stock options and awards |
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Purchases of treasury stock |
| — | |
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| ( | |
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| ( |
Stock-based compensation expense |
| — | |
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Dividend paid to noncontrolling interest |
| — | |
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| ( | |
| ( |
Balance, June 30, 2024 |
| | | $ | | | $ | | | $ | | | $ | ( | | $ | ( | | $ | | | $ | |
The notes to condensed consolidated financial statements are an integral part of these statements.
6
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 2026 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, 2025.
Supplier finance programs
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
New accounting guidance: Disaggregation of Income Statement Expenses
In November 2024, the Financial Accounting Standards Board issued new guidance that will require additional disclosure regarding the nature of expenses presented within expense captions on the consolidated statements of operations and selling expenses. The new disclosure requirements will become effective for the Company’s fiscal 2028 annual financial statements. The Company is currently evaluating the new disclosures, but does not expect the guidance will have a material impact on its consolidated financial statements.
Note 2: Acquisitions and Dispositions
The Company acquired
7
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Acquisition of AbsolutAire
On April 1, 2025, the Company acquired substantially all of the net operating assets of AbsolutAire for consideration totaling $
For the June 30, 2025 condensed consolidated financial statements, the Company has preliminarily allocated the purchase price to the identifiable tangible and intangible assets acquired and the liabilities assumed based upon their estimated fair values as of the acquisition date. The Company recorded $
The Company’s preliminary allocation of the purchase price for its acquisition of AbsolutAire was as follows:
Trade accounts receivable | | $ | |
Inventories | |
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Property, plant and equipment | |
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Intangible assets | |
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Goodwill | |
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Accounts payable | |
| ( |
Accrued compensation and employee benefits | |
| ( |
Other liabilities | |
| ( |
Purchase price | | $ | |
Acquisition of L.B. White
On May 31, 2025, the Company acquired all of the issued and outstanding shares of L.B. White for consideration totaling $
Headquartered in Onalaska, Wisconsin with additional manufacturing and distribution operations in Georgia, L.B. White is a leading provider of specialty heating solutions, including direct-fired forced air, radiant, indirect-fired, and electric heating solutions, for the agriculture, construction, and special event industries. L.B. White holds a leading position in the swine and poultry agricultural heating markets in North America and is a market leader in portables heating. This acquisition expands the Company’s product portfolio and also broadens its network into adjacent heating markets. Since the date of the acquisition, the Company has reported the financial results of the L.B. White business within the Climate Solutions segment. For the one month during the first quarter of fiscal 2026 that the Company owned L.B. White, it included $
8
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
The Company has preliminarily allocated the purchase price of L.B. White to the identifiable tangible and intangible assets acquired and the liabilities assumed based upon their estimated fair values as of the acquisition date, as follows:
Cash and cash equivalents |
| $ | |
Trade accounts receivable | |
| |
Inventories | |
| |
Property, plant and equipment | |
| |
Intangible assets | |
| |
Goodwill | |
| |
Other assets | |
| |
Accounts payable | |
| ( |
Accrued compensation and employee benefits | |
| ( |
Deferred income taxes | |
| ( |
Other liabilities | |
| ( |
Purchase price | | $ | |
The Company engaged third-party valuation specialists to assist in estimating the fair value of assets acquired. The third-party valuations utilized assumptions developed by management and other information compiled by management, including, but not limited to, future expected cash flows. The Company allocated the excess of the purchase price over the net assets recognized to goodwill in the amount of $
Below is a summary of the methodologies and significant assumptions used within the third-party valuations for estimating the fair value of certain classes of acquired assets. The fair values were primarily based upon significant inputs that are not observable in the market and thus represent Level 3 measurements. See Note 4 for information regarding Level 3 fair value measurements.
Inventories: The Company determined the fair value of acquired work-in-process and finished goods inventory using both the comparative sales and cost of reproduction valuation methods. For raw materials acquired, the Company estimated the cost of replacement. In total, the Company wrote-up acquired inventory by $
Property, plant and equipment: The Company valued the land and facilities acquired using the cost approach. The cost approach included consideration of recent sales of comparable land parcels and estimated replacement costs for structures and site improvements, adjusting such values for estimated depreciation as of the acquisition date. The cost approach relies on assumptions regarding replacement costs and the age and estimated remaining useful lives of the assets. For personal property, which primarily consists of machinery and equipment assets, the Company utilized the market valuation approach that considers values for similar assets on secondary equipment markets. The fair value of property, plant and equipment will be recognized as depreciation expense in the Company’s results of operations over the expected remaining useful lives of the assets.
9
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Intangible assets: The Company determined the fair value of acquired intangible assets by using variations of the income approach. These methods generally forecast expected future net cash flows discretely associated with each of the identified intangible assets and adjust the forecasts to present value by applying a discount rate intended to reflect risk factors associated with the cash flows and the time value of money. Acquired intangible assets were as follows:
| Gross Carrying Value | | Weighted- Average Useful Life | |
Customer relationships | $ | | | |
Trade name |
| | | |
Total intangible assets acquired | $ | | | |
Customer relationships represent the estimated fair value of L.B. White’s business relationships with existing customers, the majority of which are dealers and/or distributors in the agriculture and portables heating markets. The fair value of customer relationships was determined using the multi-period excess earnings method, in which the value is derived by projecting the future anticipated after-tax cash flows attributable to the customer relationships. Key inputs used in the valuation included future revenue growth rates, customer attrition rates, and discount rates.
The Company determined the value of the acquired L.B. White trade name using the relief-from-royalty method, which applies an assumed royalty rate to revenue expected to be derived under the acquired trade name. The fair value was estimated to be the present value of the royalties saved because the Company owns the trade name.
Pending disposition of facilities in Germany
In December 2024, the Company signed a definitive agreement to sell its technical service center and administrative support facility in Germany to a real estate investment firm for €
Q2 acquisition of Climate by Design International
On July 1, 2025, the Company acquired Climate by Design International (“Climate by Design”). The Company paid $
10
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Note 3: Revenue Recognition
Disaggregation of revenue
The tables below present revenue for each of the Company’s operating segments. Each segment’s revenue is disaggregated by product group and by geographic location.
In connection with the Company’s strategic transformation and application of 80/20 principles, the Company has realigned its segment teams around five market-based product groups, as summarized below. Accordingly, the Company has updated its disaggregated revenue disclosure to reflect the new product group structure. The disaggregated revenue information presented for fiscal 2025 has been recast to be comparable with the fiscal 2026 presentation.
Climate Solutions
The Climate Solutions segment has aligned its teams around three product groups: i) Data Centers, ii) Heat Transfer Solutions and iii) HVAC Technologies. The Data Centers business provides sustainable cooling solutions for data center customers. Data center products include precision air conditioning units, computer room air conditioning and air handler units, fan coils and fan walls. The Heat Transfer Solutions business provides heat exchanger coils, commercial refrigeration coolers, and anti-corrosion coating products. The HVAC Technologies business provides a wide array of commercial and residential heating products, including unit heaters, roof-mounted makeup air units, duct furnaces, infrared units, and perimeter heating products. In addition, the HVAC Technologies business sells indoor air quality products for schools and commercial applications.
Performance Technologies
The Performance Technologies segment has aligned its teams around two product groups: i) Heavy-Duty Equipment and ii) On-Highway Applications. The Heavy-Duty Equipment business provides heat exchangers and cooling modules for off-highway markets, including agricultural, construction, and mining. In addition, the Heavy-Duty Equipment business sells cooling module generator sets that provide mission critical stationary power. The On-Highway Applications business provides heat exchangers and cooling systems for commercial vehicle, automotive, and specialty vehicle customers. In addition to products for traditional powertrains, the On-Highway Applications business provides products and solutions for zero-emission and hybrid vehicles, primarily for commercial vehicle, bus and specialty vehicles.
| | Three months ended June 30, 2025 | | Three months ended June 30, 2024 | ||||||||||||||
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| Climate |
| Performance |
| Segment |
| Climate |
| Performance |
| Segment | ||||||
| | Solutions | | Technologies | | Total | | Solutions | | Technologies | | Total | ||||||
Product groups: |
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Data centers | | $ | | | $ | — | | $ | | | $ | | | $ | — | | $ | |
Heat transfer solutions | |
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HVAC technologies | |
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Heavy-duty equipment | |
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On-highway applications | |
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Inter-segment sales | |
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| — | |
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Net sales | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
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Geographic location: | |
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Americas | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
Europe | |
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Asia | |
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Net sales | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
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11
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, 2025 |
| March 31, 2025 | ||
Contract assets | | $ | | | $ | |
Contract liabilities | |
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| |
Contract assets 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. Contract assets are included within other current assets on the Company’s consolidated balance sheets. The $
Contract liabilities consist of payments received in advance of satisfying performance obligations under customer contracts, including contracts for data center cooling products and customer-owned tooling. Contract liabilities are included within other current liabilities on the Company’s consolidated balance sheets. The $
Note 4: 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. |
| ● | 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, trade accounts receivable, accounts payable, and short-term debt approximate fair value due to the short-term nature of these instruments. In addition, the Company assesses the fair value of a disposal group for each reporting period it is held for sale. The fair value of the Company’s long-term debt is disclosed in Note 17.
12
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Note 5: Pensions
Pension cost included the following components:
| | Three months ended June 30, | ||||
|
| 2025 |
| 2024 | ||
Service cost | | $ | | | $ | |
Interest cost | |
| | |
| |
Expected return on plan assets | |
| ( | |
| ( |
Amortization of unrecognized net loss | |
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Net periodic benefit cost | | $ | | | $ | |
The company did
In June 2024, the Company approved the termination of its primary U.S. pension plan, which is pending approval from the Pension Benefit Guaranty Corporation. The Company intends to offer certain participants the option to receive their pension benefits in the form of a lump-sum distribution prior to purchasing annuity contracts to transfer its remaining obligations under the plan. In connection with the plan termination, the Company expects to make additional cash contributions in the range of $
Note 6: Stock-Based Compensation
The Company’s stock-based incentive programs consist of the following: (i) 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, (ii) a discretionary equity program for other management and key employees, and (iii) 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 $
During the first three months of fiscal 2026, 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 -year average cash flow return on invested capital and a target -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, 2028.
13
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
The weighted-average fair value of stock-based compensation awards granted during the three months ended June 30, 2025 and 2024 were as follows:
|
| Three months ended June 30, | ||||||||
| | 2025 | | 2024 | ||||||
| | | | Fair Value | | | | Fair Value | ||
| | Shares |
| Per Award |
| Shares |
| Per Award | ||
Performance stock awards |
| | | $ | |
| | | $ | |
Restricted stock awards |
| | | $ | |
| | | $ | |
As of June 30, 2025, 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 | | Weighted-Average | |
| | Compensation | | Remaining Service | |
|
| Expense |
| Period in Years | |
Performance stock awards | | $ | |
| |
Restricted stock awards | |
| |
| |
Total | | $ | |
| |
Note 7: Restructuring Activities
Restructuring and repositioning expenses were as follows:
|
| Three months ended June 30, | ||||
|
| 2025 |
| 2024 | ||
Employee severance and related benefits | | $ | | | $ | |
Other restructuring and repositioning expenses | |
| | |
| |
Total | | $ | | | $ | |
During the first three months of fiscal 2026, restructuring and repositioning expenses primarily consisted of severance expenses, the majority of which were recorded in the Performance Technologies segment. The Performance Technologies severance charges were primarily recorded in Europe and North America and include severance related to targeted headcount reductions intended to reduce selling, general and administrative (“SG&A”) and operational expenses. In addition, as part of its transformational initiatives supported by 80/20 principles, the Company is taking steps to optimize the efficiency of its supply chain and manufacturing processes in order to improve profit margins in the Climate Solutions and Performance Technologies segments. These restructuring activities have included transferring the production and warehousing for certain product lines among its facilities.
During the first three months of fiscal 2025, restructuring and repositioning expenses primarily consisted of severance expenses recorded in the Performance Technologies segment. These severance charges were primarily related to the closure of a technical service center and other targeted headcount reductions in Europe. In addition, the Company incurred equipment transfer costs within the Performance Technologies and Climate Solutions segments.
14
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, | ||||
|
| 2025 |
| 2024 | ||
Beginning balance | | $ | | | $ | |
Additions | |
| | |
| |
Payments | |
| ( | |
| ( |
Effect of exchange rate changes | |
| | |
| — |
Ending balance | | $ | | | $ | |
| | | | | | |
Note 8: Other Income and Expense
Other income and expense consisted of the following:
|
| Three months ended June 30, | ||||
|
| 2025 |
| 2024 | ||
Interest income | | $ | | | $ | |
Foreign currency transactions (a) | |
| ( | |
| |
Net periodic benefit cost (b) | |
| ( | |
| ( |
Total other expense – net | | $ | ( | | $ | ( |
____ | | | | | | |
| (a) |
| (b) |
Note 9: Income Taxes
The Company’s effective tax rate for the three months ended June 30, 2025 and 2024 was
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 judgment 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.
At June 30, 2025, valuation allowances against deferred tax assets in the U.S. and in certain foreign jurisdictions totaled $
15
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
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. In addition, the Company excludes the impact of operations anticipated to generate net operating losses for the full fiscal year from the overall effective tax rate calculation and instead records them discretely based upon year-to-date results. The Company does not anticipate a significant change in unrecognized tax benefits during the remainder of fiscal 2026.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, including
Note 10: Earnings Per Share
The components of basic and diluted earnings per share were as follows:
| Three months ended June 30, | |||||
|
| 2025 |
| 2024 | ||
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 | | $ | | | $ | |
There were
Note 11: Cash, Cash Equivalents and Restricted Cash
Cash, cash equivalents and restricted cash consisted of the following:
|
| June 30, 2025 |
| March 31, 2025 | ||
Cash and cash equivalents | | $ | | | $ | |
Restricted cash | |
| | |
| |
Total cash, cash equivalents and restricted cash | | $ | | | $ | |
Restricted cash, which is reported within other current assets on the consolidated balance sheets, consists primarily of deposits for contractual guarantees or commitments required for rents, import and export duties, and commercial agreements.
16
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Note 12: Inventories
Inventories consisted of the following:
|
| June 30, 2025 |
| March 31, 2025 | ||
Raw materials | | $ | | | $ | |
Work in process | |
| | |
| |
Finished goods | |
| | |
| |
Total inventories | | $ | | | $ | |
Note 13: Property, Plant and Equipment
Property, plant and equipment, including depreciable lives, consisted of the following:
|
| June 30, 2025 |
| March 31, 2025 | ||
Land | | $ | | | $ | |
Buildings and improvements ( | |
| | |
| |
Machinery and equipment ( | |
| | |
| |
Office equipment ( | |
| | |
| |
Construction in progress | |
| | |
| |
| |
| | |
| |
Less: accumulated depreciation | |
| ( | |
| ( |
Net property, plant and equipment | | $ | | | $ | |
The June 30, 2025 and March 31, 2025 property, plant and equipment in the table above exclude amounts classified as held for sale. See Note 2 for additional information.
Note 14: Goodwill and Intangible Assets
The following table presents a roll forward of the carrying value of goodwill from March 31, 2025 to June 30, 2025.
|
| Climate Solutions | |
Goodwill, March 31, 2025 | | $ | |
Acquisitions (a) | |
| |
Effect of exchange rate changes | |
| |
Goodwill, June 30, 2025 | | $ | |
____ | | | |
| (a) | During the first quarter of fiscal 2026, the Company recorded $ |
17
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Intangible assets consisted of the following:
| | June 30, 2025 | | March 31, 2025 | ||||||||||||||
|
| 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 | | $ | | | $ | ( | | $ | | | $ | | | $ | ( | | $ | |
During the first quarter of fiscal 2026 and in connection with its acquisitions of L.B. White and AbsolutAire, the Company recorded customer relationship and trade name intangible assets totaling $
The Company recorded amortization expense of $
Note 15: Product Warranties
Changes in accrued warranty costs were as follows:
| | Three months ended June 30, | ||||
|
| 2025 |
| 2024 | ||
Beginning balance | | $ | | | $ | |
Warranties recorded at time of sale | |
| | |
| |
Adjustments to pre-existing warranties | |
| ( | |
| ( |
Settlements | |
| ( | |
| ( |
Effect of exchange rate changes | |
| | |
| — |
Ending balance | | $ | | | $ | |
18
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Note 16: Leases
Lease assets and liabilities
The following table provides a summary of leases recorded on the consolidated balance sheets.
|
| Balance Sheet Location |
| June 30, 2025 |
| March 31, 2025 | ||
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, | ||||
|
| 2025 |
| 2024 | ||
Operating lease expense (a) | | $ | | | $ | |
Finance lease expense: | |
|
| |
|
|
Depreciation of ROU assets | |
| | |
| |
Interest on lease liabilities | |
| | |
| |
Total lease expense | | $ | | | $ | |
____ | | | | | | |
| (a) |
19
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Note 17: Indebtedness
Long-term debt consisted of the following:
|
| Fiscal year |
| | |
| | | |
| | of maturity | | June 30, 2025 | | March 31, 2025 | |||
| | | | | | | | | |
Revolving credit facility |
| | | $ | | | $ | | |
Term loans |
| | | | | | | | |
| | |
| | |
| | ||
| | |
| | |
| | ||
Finance lease obligations |
| | | | | | |
| |
|
| | | | | | |
| |
Less: current portion |
| | | | | ( | |
| ( |
Less: unamortized debt issuance costs |
| | | | | ( | |
| ( |
Total long-term debt | | | | | $ | | | $ | |
Long-term debt, including the current portion of long-term debt, matures as follows:
Fiscal Year (a) |
|
| |
Remainder of 2026 | | $ | |
2027 | |
| |
2028 | |
| |
2029 | |
| |
2030 | |
| |
2031 & beyond | | | |
Total | | $ | |
____ | | | |
| (a) | Amounts reflect scheduled maturity payments as of June 30, 2025. As described below, the Company executed an amended credit agreement in July 2025, which extended the maturity dates for the revolving credit and term loan facilities. |
Borrowings under the revolving credit, swingline and term loan facilities bear interest at variable rates, based upon the applicable reference rate and including a margin percentage dependent upon the Company’s leverage ratio, as described below. At June 30, 2025, the weighted-average interest rate for revolving credit facility borrowings and the term loans was
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, 2025, the Company’s borrowings under its revolving credit facility totaled $
The Company also maintains credit agreements for its foreign subsidiaries. There were
20
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
In July 2025, the Company executed an amended and restated credit agreement with a syndicate of banks that provides for a multi-currency $
Indebtedness under the Company’s credit agreement and Senior Notes is secured by substantially all domestic assets, excluding real estate. 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 the credit agreements include a leverage ratio covenant, which requires the Company to limit the ratio of its consolidated indebtedness, less a portion of its cash balances, both as defined by the credit agreements, to its consolidated net earnings before interest, taxes, depreciation, amortization, and certain other adjustments (“Adjusted EBITDA”). The credit agreements existing as of June 30, 2025 included a leverage ratio covenant of no more than times. As amended, the credit agreements include a leverage ratio covenant of no more than times. The Company must also maintain a ratio of Adjusted EBITDA of at least
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, 2025 and March 31, 2025, 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 $
Note 18: Risks, Uncertainties, Contingencies and Litigation
Environmental
The Company has recorded environmental monitoring and remediation accruals related to manufacturing facilities in the U.S., one of which the Company currently owns and operates, and a 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 $
Information technology purchase commitments
The Company has entered into purchase commitments for information technology services, primarily related to implementation and support for cloud infrastructure, data analytics, and AI-enablement services. In total, the Company expects to spend approximately $
21
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
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.
Note 19: Accumulated Other Comprehensive Loss
Changes in accumulated other comprehensive loss were as follows:
| | Three months ended June 30, 2025 | ||||||||||
|
| Foreign |
| | |
| | |
| | | |
| | Currency | | Defined | | Cash Flow | |
| | |||
| | Translation | | Benefit Plans | | Hedges | | Total | ||||
Beginning balance |
| $ | ( |
| $ | ( |
| $ | ( |
| $ | ( |
| | | | | | | | | | | | |
Other comprehensive income before reclassifications | |
| | |
| | |
| | |
| |
Reclassifications: | |
|
| |
|
| |
|
| |
|
|
Amortization of unrecognized net loss (a) | |
| — | |
| | |
| — | |
| |
Realized losses - net (b) | |
| — | |
| — | |
| | |
| |
Income taxes | |
| | |
| ( | |
| ( | |
| ( |
Total other comprehensive income | |
| | |
| | |
| | |
| |
| | | | | | | | | | | | |
Ending balance | | $ | ( | | $ | ( | | $ | | | $ | ( |
| | Three months ended June 30, 2024 | ||||||||||
| | Foreign | | | | | | | | | | |
| | Currency | | Defined | | Cash Flow | |
| | |||
|
| Translation |
| Benefit Plans |
| Hedges |
| Total | ||||
Beginning balance | | $ | ( | | $ | ( | | $ | | | $ | ( |
| | | | | | | | | | | | |
Other comprehensive income (loss) before reclassifications | |
| ( | |
| | |
| | |
| ( |
Reclassifications: | |
|
| |
|
| |
|
| |
|
|
Amortization of unrecognized net loss (a) | |
| — | |
| | |
| — | |
| |
Income taxes | |
| | |
| ( | |
| | |
| ( |
Total other comprehensive income (loss) | |
| ( | |
| | |
| — | |
| ( |
| | | | | | | | | | | | |
Ending balance | | $ | ( | | $ | ( | | $ | | | $ | ( |
____ | | | | | | | | | | | | |
| (a) | Amounts are included in the calculation of net periodic benefit cost for the Company’s defined benefit plans, which include pension and other postretirement plans. See Note 5 for additional information about the Company’s pension plans. |
| (b) | Amounts represent net gains and losses associated with cash flow hedges that were reclassified to net earnings. |
22
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
Note 20: Segment Information
The Company’s chief operating decision maker (“CODM”), its President and Chief Executive Officer, reviews the separate financial results for each of its operating segments. The CODM uses segment operating income as a measure of profit and loss to evaluate the financial performance of each segment and as the basis for allocating company resources. The tables below present net sales and significant expense categories for each of the Company’s segments that are regularly provided to the CODM. Net sales for Corporate and eliminations primarily represent the elimination of inter-segment sales. Inter-segment sales are accounted for based upon an established markup over production costs.
|
| Three months ended June 30, 2025 | ||||||||||
| | Climate | | Performance | | Corporate and | | | ||||
| | Solutions |
| Technologies |
| eliminations |
| Total | ||||
External sales |
| $ | | | $ | | | $ | — | | $ | |
Inter-segment sales | |
| | |
| — | |
| ( | |
| — |
Net sales | |
| | |
| | |
| ( | |
| |
Cost of sales | |
| | | | | | | ( | |
| |
Gross profit | | | | | | | | | | | | |
Selling, general and administrative expenses | | | | | | | | | | | | |
Restructuring expenses | | | | | | | | | — | | | |
Operating income | | $ | | | $ | | | $ | ( | | $ | |
|
| Three months ended June 30, 2024 | ||||||||||
| | Climate | | Performance | | Corporate and | | | ||||
| | Solutions |
| Technologies |
| eliminations |
| Total | ||||
External sales |
| $ | | | $ | | | $ | — | | $ | |
Inter-segment sales | |
| | |
| | |
| ( | |
| — |
Net sales | |
| | |
| | |
| ( | |
| |
Cost of sales | |
| | | | | | | ( | |
| |
Gross profit | | | | | | | | | ( | | | |
Selling, general and administrative expenses | | | | | | | | | | | | |
Restructuring expenses | | | | | | | | | — | | | |
Operating income | | $ | | | $ | | | $ | ( | | $ | |
SG&A expenses at Corporate include legal, finance, general corporate and central services expenses and other costs that are either not directly attributable to an operating segment or not considered when the CODM evaluates segment performance.
23
MODINE MANUFACTURING COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In millions, except per share amounts)
(unaudited)
The following is a summary of capital expenditures and depreciation and amortization expense by segment:
| | Three months ended June 30, | ||||
|
| 2025 |
| 2024 | ||
Capital expenditures: | | | | | | |
Climate Solutions | | $ | | | $ | |
Performance Technologies | |
| | |
| |
Corporate | |
| | |
| — |
Total capital expenditures | | $ | | | $ | |
| | Three months ended June 30, | ||||
|
| 2025 |
| 2024 | ||
Depreciation and amortization expense: | | | | | | |
Climate Solutions | | $ | | | $ | |
Performance Technologies | |
| | |
| |
Corporate | |
| | |
| |
Total depreciation and amortization expense | | $ | | | $ | |
The following is a summary of segment assets, comprised entirely of trade accounts receivable and inventories, and other assets:
|
| June 30, 2025 |
| March 31, 2025 | ||
Assets: | | |
| | |
|
Climate Solutions | | $ | | | $ | |
Performance Technologies | |
| | |
| |
Other (a) | |
| | |
| |
Total assets | | $ | | | $ | |
____ | | | | | | |
| (a) |
24
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, 2025 was the first quarter of fiscal 2026.
Fiscal 2026 acquisitions
We recently acquired three businesses within our Climate Solutions segment, each supporting our growth strategy by expanding our product portfolio and broadening our customer base.
On April 1, 2025, we acquired substantially all of the net operating assets of AbsolutAire, Inc. (“AbsolutAire”) for $11.3 million. AbsolutAire is a Michigan-based manufacturer of direct-fired heating, ventilation, and make-up air systems and has annual sales of approximately $25.0 million.
On May 31, 2025, we acquired LBW Holding Corp. (“L.B. White”) for $110.5 million. Headquartered in Onalaska, Wisconsin with additional manufacturing and distribution operations in Georgia, L.B. White has annual sales of approximately $75.0 million and is a leading provider of specialty heating solutions, including direct-fired forced air, radiant, indirect-fired, and electric heating solutions, for the agriculture, construction, and special event industries. L.B. White holds a leading position in the swine and poultry agricultural heating markets in North America and is a market leader in portables heating.
On July 1, 2025, we acquired Climate by Design International (“Climate by Design”) and paid $64.1 million upon closing. Based in Minnesota, Climate by Design specializes in desiccant dehumidification technology and critical process air handlers and has annual sales of approximately $45.0 million.
See Note 2 of the Notes to Consolidated Financial Statements for further information.
First quarter highlights
Net sales in the first quarter of fiscal 2026 increased $21.3 million, or 3 percent, from the first quarter of fiscal 2025, primarily due to higher sales in our Climate Solutions segment, partially offset by lower sales in our Performance Technologies segment. Cost of sales increased $18.5 million, or 4 percent. Gross profit increased $2.8 million and gross margin declined 40 basis points to 24.2 percent. Selling, general and administrative (“SG&A”) expenses increased $2.1 million. Operating income of $75.7 million during the first quarter of fiscal 2026 increased $1.3 million from the prior year, primarily due to higher gross profit, partially offset by higher SG&A expenses.
CONSOLIDATED RESULTS OF OPERATIONS
The following table presents our consolidated financial results on a comparative basis for the three months ended June 30, 2025 and 2024:
|
| Three months ended June 30, | | ||||||||
|
| 2025 |
| 2024 |
| ||||||
(in millions) | | $’s |
| % of sales | | $’s |
| % of sales | | ||
Net sales | | $ | 682.8 |
| 100.0 | % | $ | 661.5 |
| 100.0 | % |
Cost of sales | |
| 517.4 |
| 75.8 | % |
| 498.9 |
| 75.4 | % |
Gross profit | |
| 165.4 |
| 24.2 | % |
| 162.6 |
| 24.6 | % |
Selling, general and administrative expenses | |
| 84.9 |
| 12.4 | % |
| 82.8 |
| 12.5 | % |
Restructuring expenses | |
| 4.8 |
| 0.7 | % |
| 5.4 |
| 0.8 | % |
Operating income | |
| 75.7 |
| 11.1 | % |
| 74.4 |
| 11.2 | % |
Interest expense | |
| (5.8) |
| (0.8) | % |
| (7.5) |
| (1.1) | % |
Other expense – net | |
| (4.2) |
| (0.6) | % |
| (0.3) |
| — | |
Earnings before income taxes | |
| 65.7 |
| 9.6 | % |
| 66.6 |
| 10.1 | % |
Provision for income taxes | |
| (14.0) |
| (2.1) | % |
| (18.8) |
| (2.8) | % |
Net earnings | | $ | 51.7 |
| 7.6 | % | $ | 47.8 |
| 7.2 | % |
25
Comparison of the three months ended June 30, 2025 and 2024
First quarter net sales of $682.8 million were $21.3 million, or 3 percent, higher than the first quarter of the prior year, primarily due to $40.1 million of higher sales in our Climate Solutions segment, driven by sales growth to hyperscale and colocation data center customers in North America and $10.0 million of incremental sales from the acquired AbsolutAire and L.B. White businesses. The higher sales in Climate Solutions were partially offset by lower sales in our Performance Technologies segment, which decreased $23.5 million, largely due to market weakness. Foreign currency exchange rates favorably impacted sales by $8.1 million.
First quarter cost of sales increased $18.5 million, or 4 percent, primarily due to higher sales volume and a $6.5 million unfavorable impact of foreign currency exchange rates. In addition, cost of sales was unfavorably impacted by higher raw material costs, which increased approximately $2.0 million, and to a lesser extent, higher labor and inflationary costs. These drivers, which increased cost of sales, were partially offset by lower warranty expense, which decreased approximately $3.0 million. In addition, cost of sales was favorably impacted by the absence of a $1.6 million inventory purchase accounting adjustment recorded during the first quarter of fiscal 2025 at Corporate related to Scott Springfield Mfg. Inc. As a percentage of sales, cost of sales increased 40 basis points to 75.8 percent, primarily due to the unfavorable impact of lower sales and higher material costs in the Performance Technologies segment.
As a result of higher sales and higher cost of sales as a percentage of sales, first quarter gross profit increased $2.8 million, yet gross margin declined 40 basis points to 24.2 percent.
First quarter SG&A expenses increased $2.1 million, or 3 percent. As a percentage of sales, SG&A expenses decreased by 10 basis points. The increase in SG&A expenses includes higher compensation-related expenses in the Climate Solutions segment, supporting the segment’s growth and including incremental expenses from the acquired AbsolutAire and L.B. White businesses. Other costs directly associated with acquisition and integration activities increased $1.4 million. These drivers, which increased SG&A expenses, were partially offset by lower compensation-related expenses in the Performance Technologies segment, including the benefit of recent restructuring actions.
Restructuring expenses during the first quarter of fiscal 2026 primarily consisted of severance expenses, the majority of which were recorded in the Performance Technologies segment. Compared with the first quarter of fiscal 2025, restructuring expenses decreased $0.6 million, primarily due to lower severance expenses in the Performance Technologies segment, partially offset by higher severance expenses in the Climate Solutions segment.
Operating income of $75.7 million in the first quarter of fiscal 2026 increased $1.3 million compared with the first quarter of fiscal 2025, primarily due to higher gross profit, partially offset by higher SG&A expenses.
Other net expenses increased $3.9 million compared with the first quarter of fiscal 2025, primarily due to net foreign currency transaction losses of $3.4 million. In the first quarter of fiscal 2025, the net impact of foreign currency transactions was a gain of $0.2 million.
Interest expense during the first quarter of fiscal 2026 decreased $1.7 million compared with the first quarter of fiscal 2025, primarily due to lower average outstanding borrowings on our revolving credit facility, and to a lesser extent, favorable changes in interest rates.
The provision for income taxes was $14.0 million and $18.8 million in the first quarter of fiscal 2026 and 2025, respectively. The $4.8 million decrease was primarily due to changes in the mix and amount of foreign and U.S. earnings, as compared with the same period in the prior year.
We are currently assessing the impact of the One Big Beautiful Bill Act (“OBBBA”) that was enacted in the U.S. on July 4, 2025. The OBBBA permanently extends certain expiring provisions of the Tax Cuts and Jobs Act, including 100% bonus depreciation and domestic research cost expensing. It also includes modifications to the international tax framework. The legislation has multiple effective dates, with certain provisions being implemented through our fiscal 2027.
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SEGMENT RESULTS OF OPERATIONS
The following is a discussion of our segment results of operations for the three months ended June 30, 2025 and 2024:
Climate Solutions
|
| Three months ended June 30, | | ||||||||
|
| 2025 |
| 2024 |
| ||||||
(in millions) | | $’s |
| % of sales | | $’s |
| % of sales | | ||
Net sales | | $ | 397.4 |
| 100.0 | % | $ | 357.3 |
| 100.0 | % |
Cost of sales | |
| 284.5 |
| 71.6 | % |
| 256.5 |
| 71.8 | % |
Gross profit | |
| 112.9 |
| 28.4 | % |
| 100.8 |
| 28.2 | % |
Selling, general and administrative expenses | |
| 44.7 |
| 11.3 | % |
| 40.8 |
| 11.4 | % |
Restructuring expenses | |
| 1.3 |
| 0.3 | % |
| 0.2 |
| 0.1 | % |
Operating income | | $ | 66.9 |
| 16.8 | % | $ | 59.8 |
| 16.7 | % |
Comparison of the three months ended June 30, 2025 and 2024
Climate Solutions net sales increased $40.1 million, or 11 percent, from the first quarter of fiscal 2025 to the first quarter of fiscal 2026, primarily due to higher sales volume and a $6.1 million favorable impact of foreign currency exchange rates. The higher sales volume includes sales growth to hyperscale and colocation customers in North America and $10.0 million of incremental sales from the recently-acquired AbsolutAire and L.B. White businesses. Compared with the first quarter of the prior year, sales of data center and HVAC technologies products increased $24.3 million and $17.2 million, respectively. Sales of heat transfer solution products decreased $1.4 million.
Climate Solutions cost of sales increased $28.0 million, or 11 percent, from the first quarter of fiscal 2025 to the first quarter of fiscal 2026, primarily due to higher sales volume and a $4.7 million unfavorable impact of foreign currency exchange rates. These increases were partially offset by lower warranty expense, which decreased approximately $3.0 million. As a percentage of sales, cost of sales decreased 20 basis points to 71.6 percent, primarily due to favorable sales mix.
As a result of the higher sales and lower cost of sales as a percentage of sales, gross profit increased $12.1 million and gross margin improved 20 basis points to 28.4 percent.
Climate Solutions SG&A expenses increased $3.9 million compared with the first quarter of the prior year. As a percentage of sales, SG&A expenses decreased by 10 basis points. The increase in SG&A expenses includes higher compensation-related expenses, which increased approximately $6.0 million, including expenses from the acquired businesses. This increase was partially offset by lower amortization expense, which decreased $1.2 million, and decreases across other general and administrative expenses. The lower amortization expense was primarily driven by an order backlog intangible asset, which we recorded in connection with our acquisition of Scott Springfield Mfg. Inc. and finished amortizing during the first quarter of fiscal 2026.
Restructuring expenses increased $1.1 million compared with the first quarter of fiscal 2025, primarily due to higher severance expenses and equipment transfer costs.
Operating income of $66.9 million increased $7.1 million from the first quarter of fiscal 2025 to the first quarter of fiscal 2026, primarily due to higher gross profit, partially offset by higher SG&A and restructuring expenses.
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Performance Technologies
|
| Three months ended June 30, | | ||||||||
| | 2025 |
| 2024 |
| ||||||
(in millions) | | $’s |
| % of sales | | $’s |
| % of sales | | ||
Net sales | | $ | 285.5 |
| 100.0 | % | $ | 309.0 |
| 100.0 | % |
Cost of sales | |
| 233.6 |
| 81.8 | % |
| 245.5 |
| 79.4 | % |
Gross profit | |
| 51.9 |
| 18.2 | % |
| 63.5 |
| 20.6 | % |
Selling, general and administrative expenses | |
| 21.9 |
| 7.7 | % |
| 26.8 |
| 8.7 | % |
Restructuring expenses | |
| 3.5 |
| 1.2 | % |
| 5.2 |
| 1.7 | % |
Operating income | | $ | 26.5 |
| 9.3 | % | $ | 31.5 |
| 10.2 | % |
Comparison of the three months ended June 30, 2025 and 2024
Performance Technologies net sales decreased $23.5 million, or 8 percent, from the first quarter of fiscal 2025 to the first quarter of fiscal 2026, primarily due to lower sales volume in North America, largely due to market weakness and our strategic exit from lower-margin business in connection with 80/20 product rationalization initiatives. This decrease was partially offset by a $2.0 million favorable impact of foreign currency exchange rates. Compared with the first quarter of the prior year, sales of on-highway application and heavy-duty equipment products decreased $14.6 million and $4.2 million, respectively.
Performance Technologies cost of sales decreased $11.9 million, or 5 percent, from the first quarter of fiscal 2025 to the first quarter of fiscal 2026, primarily due to lower sales volume and, to a lesser extent, improved operating efficiencies. These drivers, which decreased cost of sales, were partially offset by higher material costs, which increased $2.0 million and a $1.8 million unfavorable impact of foreign currency exchange rates. As a percentage of sales, cost of sales increased 240 basis points to 81.8 percent, primarily due to the unfavorable impact of lower sales and higher material costs, partially offset by improved operating efficiencies.
As a result of the lower sales and higher cost of sales as a percentage of sales, gross profit decreased $11.6 million and gross margin declined 240 basis points to 18.2 percent.
Performance Technologies SG&A expenses decreased $4.9 million compared with the first quarter of the prior year. As a percentage of sales, SG&A expenses decreased by 100 basis points. The decrease in SG&A expenses was primarily due to lower compensation-related expenses, which decreased approximately $6.0 million and included the benefit of recent restructuring actions.
Restructuring expenses decreased $1.7 million compared with the first quarter of the prior year, primarily due to lower severance expenses in Europe, partially offset by higher severance expenses in North America.
Operating income of $26.5 million decreased $5.0 million from the first quarter of fiscal 2025 to the first quarter of fiscal 2026, primarily due to lower gross profit, partially offset by lower SG&A and restructuring expenses.
Liquidity and Capital Resources
Our primary sources of liquidity are cash flow from operating activities, our cash and cash equivalents as of June 30, 2025 of $124.5 million, and available borrowing capacity under our revolving credit facility. Given our extensive international operations, approximately $53.0 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.
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Net cash provided by operating activities
Net cash provided by operating activities for the three months ended June 30, 2025 was $27.7 million, which represents a $12.8 million decrease compared with the same period in the prior year. This decrease in operating cash flow was primarily due to unfavorable net changes in working capital, as compared with the same period in the prior year. The unfavorable changes in working capital include the impact of higher inventory levels and higher payments for incentive compensation. Our Climate Solutions segment has increased inventory levels in fiscal 2026, primarily to support growing customer demand for data center products in the U.S. These drivers were partially offset by the favorable impact of increases in accounts payable, which largely resulted from the higher inventory levels.
Capital expenditures
Capital expenditures of $27.5 million during the first three months of fiscal 2026 increased $0.7 million compared with the same period in the prior year. We are focused on investments that support our strategic growth initiatives. We recently announced that we plan to invest $100.0 million over the next twelve months to expand our manufacturing capacity in the U.S. for data center products.
Business acquisitions
Under our strategy based upon 80/20 principles, we are focused on acquiring businesses that we expect will accelerate our strategic growth in select markets. During the first quarter of fiscal 2026, we made cash payments totaling $119.0 million to acquire L.B. White and AbsolutAire. On July 1, 2025, we paid $64.1 million upon closing for the acquisition of Climate by Design International. See Note 2 of the Notes to Consolidated Financial Statements for additional information regarding acquisitions.
Debt
During the first quarter of fiscal 2026, borrowings on our credit facilities, net of repayments, totaled $172.0 million. We primarily used the incremental borrowings for funding our acquisitions of L.B. White and Climate by Design International, which closed on May 31, 2025 and July 1, 2025, respectively.
In July 2025, we executed an amended and restated credit agreement with a syndicate of banks that provides for a multi-currency $400.0 million revolving credit facility and a $200.0 million term loan facility maturing in July 2030. This credit agreement modified our then-existing revolving credit and term loan facilities, which would have matured in October 2027. We also amended the agreement governing our Senior Notes, to conform the applicable terms to those of the aforementioned amended and restated credit agreement.
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 substantially all domestic assets, excluding real estate. 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.
As amended, 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-half 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.
We were in compliance with our debt covenants as of June 30, 2025 and expect to remain in compliance with our debt covenants during the remainder of fiscal 2026 and beyond.
29
U.S. pension plan termination
In June 2024, we approved the termination of our U.S. pension plan, which is pending approval from the Pension Benefit Guaranty Corporation. We intend to offer certain participants the option to receive their pension benefits in the form of a lump-sum distribution prior to purchasing annuity contracts to transfer our remaining obligations under the plan. In connection with the plan termination, we expect to make additional cash contributions in the range of $17.0 million to $22.0 million to fully fund the plan, on a plan termination basis, and to record non-cash pension settlement charges totaling approximately $115.0 million to $125.0 million during the second half of fiscal 2026. The timing and amount of the final cash contribution and settlement charges could materially differ from our estimates due to the nature and timing of participant settlements, prevailing market and economic conditions, the duration of the termination process, and/or other factors.
Share repurchase program
We did not purchase shares under our share repurchase program during the first quarter of fiscal 2026. As of June 30, 2025, we had $81.6 million of share repurchase authorization remaining under the repurchase program, which does not expire. Our decision whether and to what extent to repurchase additional shares under the program will depend on a number of factors, including business conditions, other cash priorities, and stock price.
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, 2025. 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, energy costs, government incentive or funding programs, supply chain challenges, logistical disruptions, including those related to sea, land or air freight, tariffs, sanctions and other trade issues or cross-border trade restrictions, and military conflicts, including the conflicts in Ukraine and in the Middle East and tension in the Red Sea; |
| ● | 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; changes in interest rates; recession and recovery therefrom; and the general uncertainties about the impact of statutory, 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; |
30
| ● | Our ability to be at the forefront of technological advances to differentiate ourselves from our competitors and provide innovative products and services to our customers, the impacts of any changes in or the adoption rate of technologies that we expect to drive sales growth, including those related to data center cooling and electric vehicles, and the impacts of any threats or changes to the market growth prospects for our customers; |
| ● | Our ability to mitigate increases in labor costs and labor shortages; |
| ● | The impact of public health threats 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 pricing 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, or timing of construction or development projects that incorporate our products and services; |
| ● | 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; |
31
| ● | The impact of a substantial disruption, including any prolonged service outage, or material breach of our information technology systems, and any related delays, problems or costs; |
| ● | Increasingly complex and restrictive laws and regulations and the costs associated with compliance therewith, including state and federal labor regulations, laws and regulations associated with being a U.S. public company, and other laws and regulations present in various jurisdictions in which we operate; |
| ● | Increasing emphasis by global regulatory bodies, 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; and |
| ● | The constant and increasing pressures associated with healthcare and associated insurance costs. |
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; and |
| ● | Our ability to successfully exit portions of our business that do not align with our strategic plans. Business dispositions involve risks, including transaction-related and other costs, damage to or the loss of customer relationships, the diversion of management’s attention from other business concerns, and other effects of litigation, claims, or other obligations, including those that may be asserted against us in connection with disposed businesses. |
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.
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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, 2025. The Company’s market risks have not materially changed since the fiscal 2025 Form 10-K was filed.
Item 4. Controls and Procedures.
Evaluation of disclosure controls and procedures
As of the end of the period covered by this Quarterly Report on Form 10-Q, management of the Company, with the participation of the Company’s President and Chief Executive Officer and Executive Vice President, Chief Financial Officer, and under the oversight of the Audit Committee of the Board of Directors, evaluated the effectiveness of the Company’s disclosure controls and procedures, at a reasonable assurance level, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended. Based upon that evaluation, the President and Chief Executive Officer and Executive Vice President, Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2025.
Changes in internal control over financial reporting
There have been no changes in internal control over financial reporting during the first quarter of fiscal 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
33
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 2026:
|
| |
| | |
| |
| Maximum | |
| | | | | | | | | Number (or | |
| | | | | | | Total Number of | | Approximate Dollar | |
| | | | | | | Shares Purchased | | Value) of Shares | |
| | | | Average | | as Part of Publicly | | that May Yet Be | ||
| | Total Number of | | Price Paid | | Announced Plans | | Purchased Under the | ||
Period | | Shares Purchased | | Per Share | | or Programs | | Plans or Programs (a) | ||
April 1 - April 30, 2025 |
| — | | $ | — |
| — | | $ | 81,600,955 |
| | | | | | | | | | |
May 1 - May 31, 2025 |
| 14,801 (b) | | $ | 94.34 |
| — | | $ | 81,600,955 |
| | | | | | | | | | |
June 1 - June 30, 2025 |
| 39,039 (b) | | $ | 93.28 |
| — | | $ | 81,600,955 |
| | | | | | | | | | |
Total |
| 53,840 | | $ | 93.57 |
| — | |
|
|
____ | | | | | | | | | | |
| (a) | Effective March 7, 2025, the Company’s Board of Directors authorized the Company to repurchase up to $100 million of Modine common stock at such times and prices that it deems to be appropriate. This share repurchase authorization does not expire. |
| (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. |
Item 5. Other Information.
On
During the three months ended June 30, 2025, no other director or “officer” of the Company
34
Item 6. Exhibits.
| (a) | Exhibits: |
Exhibit No. | | Description |
| Incorporated | | Filed |
| |
| | | | | | | | |
| Agreement and Plan of Merger by and among LBW Holding Corp., Modine Manufacturing Company, Tyrolean Holding Corp., and Mason Wells Buyout Fund IV, LP, as Stockholders Agent, dated as of May 29, 2025. | | Exhibit 2.1 to Registrant’s Current Report on Form 8-K dated May 29, 2025 | | | | ||
| | | | | | | | |
| Sixth Amended and Restated Credit Agreement, dated as of July 10, 2025. | | Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated July 10, 2025 | | | | ||
| | | | | | | | |
| Fifth Amendment to the Second Amended and Restated Note Purchase Agreement, dated as of July 10, 2025. | | Exhibit 4.2 to Registrant’s Current Report on Form 8-K dated July 10, 2025 | | | | ||
| | | | | | | | |
| Rule 13a-14(a)/15d-14(a) Certification of Neil D. Brinker, President and Chief Executive Officer. | | | | X | | ||
| | | | | | | | |
| Rule 13a-14(a)/15d-14(a) Certification of Michael B. Lucareli, Executive Vice President, Chief Financial Officer. | | | | X | | ||
| | | | | | | | |
| Section 1350 Certification of Neil D. Brinker, President and Chief Executive Officer. | | | | X | | ||
| | | | | | | | |
| Section 1350 Certification of Michael B. Lucareli, Executive Vice President, Chief Financial Officer. | | | | X | | ||
| | | | | | | | |
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 | | 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 | | |
35
SIGNATURE
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: July 31, 2025
* Executing as both the principal financial officer and a duly authorized officer of the Company
36
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, 2025; |
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: July 31, 2025 | |
| |
/s/ Neil D. Brinker | |
Neil D. Brinker | |
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, 2025; |
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: July 31, 2025 | |
| |
/s/ Michael B. Lucareli | |
Michael B. Lucareli | |
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, 2025 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: July 31, 2025 | |
| |
/s/ Neil D. Brinker | |
Neil D. Brinker | |
President and Chief Executive 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.
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, 2025 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: July 31, 2025 | |
| |
/s/ Michael B. Lucareli | |
Michael B. Lucareli | |
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.