8-K
Modine Manufacturing Co (MOD)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 26, 2024
Modine Manufacturing Company
(Exact name of registrant as specified in its charter)
| Wisconsin | 001-01373 | 39-0482000 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
| 1500 DeKoven Avenue, Racine, Wisconsin | 53403 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) | |
| Registrant's telephone number, including area code: | (262) 636-1200 | |
| --- | --- | |
| (Former name or former address, if changed since last report.) | N/A | |
| --- | --- |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.625 par value | MOD | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 7.01 | Regulation FD Disclosure |
|---|
Effective April 1, 2024, Modine Manufacturing Company (the “Company”) moved its Coatings business, which was previously managed by and reported within the Performance Technologies segment, under the leadership of the Climate Solutions segment. Under this refined organizational structure, the Coatings business is better aligned with the Climate Solution’s Heat Transfer Products business, which serves similar heating, ventilating, air conditioning, and refrigeration markets and customers. The Company expects that unifying these complementary businesses will allow for it to better focus resources on targeted growth and allow for a more efficient application of 80/20 principles to optimize profit margins and cash flow.
Beginning with its reporting for the first quarter of fiscal 2025, the Company will report the financial results of the Coatings business within the Climate Solutions segment. The Company’s revised reporting segments are consistent with how the Company’s chief operating decision maker is assessing operating performance and allocating capital resources following the realignment of its segment structure. The segment realignment had no impact on the Company’s consolidated financial position, results of operations, and cash flows.
The Company is furnishing this Form 8-K to provide investors with unaudited historical segment operating and adjusted financial results consistent with its new reporting structure. The schedules in Exhibit 99.1 to this Current Report on Form 8-K provide unaudited financial information on the basis of the Company’s new reporting segments for the previously-reported quarters and full year of fiscal 2024.
The segment realignment discussed above and presented in Exhibit 99.1 hereto does not represent a restatement of previously issued financial statements. The information in this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.
Non-GAAP Financial Disclosures
Adjusted EBITDA and adjusted EBITDA margin, as used in Exhibit 99.1 hereto, are not measures defined in generally accepted accounting principles (“GAAP”). These non-GAAP measures are used by management as performance measures to evaluate the Company’s overall financial performance and liquidity. These measures are not, and should not be viewed as, substitutes for the applicable GAAP measures, and may be different from similarly-titled measures used by other companies.
The Company defines adjusted EBITDA as net earnings excluding interest expense, the provision or benefit for income taxes, depreciation and amortization expenses, other income and expense, restructuring expenses, acquisition and integration costs, and certain other gains or charges. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of net sales. The Company believes that adjusted EBITDA and adjusted EBITDA margin provide relevant measures of profitability and earnings power. The Company views these financial metrics as being useful in assessing operating performance from period to period by excluding certain items that it believes are not representative of its core business. Adjusted EBITDA, when calculated for the business segments, is defined as GAAP operating income excluding depreciation and amortization expenses, restructuring expenses, and certain other gains or charges.
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| Item 9.01 | Financial Statements and Exhibits |
|---|---|
| (d) | Exhibits |
| --- | --- |
The following exhibits are being furnished herewith:
| 99.1 | Recast unaudited segment financial information – for the quarter ended June 30, 2023; the quarter ended September 30, 2023; the quarter ended December 31, 2023;<br> and the quarter and fiscal year ended March 31, 2024. |
|---|---|
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL) |
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Modine Manufacturing Company | |
|---|---|
| By: /s/ Michael B. Lucareli | |
| Michael B. Lucareli<br><br> <br>Executive Vice President, Chief Financial Officer | |
| Date: July 26, 2024 |
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Exhibit 99.1
Modine Manufacturing Company
Segment operating results
Recast for segment realignment (unaudited)
(In millions)
| Three months ended | Twelve months ended | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2023 | September 30, 2023 | December 31, 2023 | March 31, 2024 | March 31, 2024 | ||||||||||||||||||
| Net sales: | ||||||||||||||||||||||
| Climate Solutions | $ | 286.7 | $ | 289.2 | $ | 254.0 | $ | 278.2 | $ | 1,108.1 | ||||||||||||
| Performance Technologies | 343.1 | 337.3 | 310.9 | 330.0 | 1,321.3 | |||||||||||||||||
| Segment total | 629.8 | 626.5 | 564.9 | 608.2 | 2,429.4 | |||||||||||||||||
| Corporate and eliminations | (7.4 | ) | (6.0 | ) | (3.5 | ) | (4.7 | ) | (21.6 | ) | ||||||||||||
| Net sales | $ | 622.4 | $ | 620.5 | $ | 561.4 | $ | 603.5 | $ | 2,407.8 | ||||||||||||
| Three months ended | Twelve months ended | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| June 30, 2023 | September 30, 2023 | December 31, 2023 | March 31, 2024 | March 31, 2024 | ||||||||||||||||||
| Gross profit: | 's | % of sales | 's | % of sales | 's | % of sales | 's | % of sales | 's | % of sales | ||||||||||||
| Climate Solutions | 26.4 | % | 26.6 | % | 27.6 | % | 26.6 | % | 26.8 | % | ||||||||||||
| Performance Technologies | 15.1 | % | 17.1 | % | 18.3 | % | 19.1 | % | 17.4 | % | ||||||||||||
| Segment total | 20.3 | % | 21.5 | % | 22.5 | % | 22.6 | % | 21.7 | % | ||||||||||||
| Corporate and eliminations | - | - | - | ) | - | ) | - | |||||||||||||||
| Gross profit | 20.6 | % | 21.8 | % | 22.7 | % | 22.4 | % | 21.8 | % |
All values are in US Dollars.
| Three months ended | Twelve months ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2023 | September 30, 2023 | December 31, 2023 | March 31, 2024 | March 31, 2024 | |||||||||||
| Operating income: | |||||||||||||||
| Climate Solutions | $ | 48.6 | $ | 47.1 | $ | 40.4 | $ | 42.5 | $ | 178.6 | |||||
| Performance Technologies | 27.6 | 31.2 | 29.5 | 23.4 | 111.7 | ||||||||||
| Segment total | 76.2 | 78.3 | 69.9 | 65.9 | 290.3 | ||||||||||
| Corporate and eliminations | (9.7 | ) | (12.6 | ) | (8.2 | ) | (19.1 | ) | (49.6 | ) | |||||
| Operating income | $ | 66.5 | $ | 65.7 | $ | 61.7 | $ | 46.8 | $ | 240.7 |
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Modine Manufacturing Company
Segment adjusted financial results
Recast for segment realignment (unaudited)
(In millions)
| Three months ended June 30, 2023 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Climate Solutions | Performance Technologies | Corporate and eliminations | Total | |||||||||
| Operating income | $ | 48.6 | $ | 27.6 | $ | (9.7 | ) | $ | 66.5 | |||
| Depreciation and amortization expense | 6.1 | 7.4 | 0.2 | 13.7 | ||||||||
| Environmental charges ^(d)^ | - | - | 0.2 | 0.2 | ||||||||
| Adjusted EBITDA | $ | 54.7 | $ | 35.0 | $ | (9.3 | ) | $ | 80.4 | |||
| Net sales | $ | 286.7 | $ | 343.1 | $ | (7.4 | ) | $ | 622.4 | |||
| Adjusted EBITDA margin | 19.1 | % | 10.2 | % | 12.9 | % | ||||||
| Three months ended September 30, 2023 | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Climate Solutions | Performance Technologies | Corporate and eliminations | Total | |||||||||
| Operating income | $ | 47.1 | $ | 31.2 | $ | (12.6 | ) | $ | 65.7 | |||
| Depreciation and amortization expense | 6.2 | 7.5 | 0.3 | 14.0 | ||||||||
| Restructuring expenses ^(a)^ | 0.3 | 0.2 | - | 0.5 | ||||||||
| Environmental charges ^(d)^ | - | - | 1.0 | 1.0 | ||||||||
| Adjusted EBITDA | $ | 53.6 | $ | 38.9 | $ | (11.3 | ) | $ | 81.2 | |||
| Net sales | $ | 289.2 | $ | 337.3 | $ | (6.0 | ) | $ | 620.5 | |||
| Adjusted EBITDA margin | 18.5 | % | 11.5 | % | 13.1 | % | ||||||
| Three months ended December 31, 2023 | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Climate Solutions | Performance Technologies | Corporate and eliminations | Total | |||||||||
| Operating income | $ | 40.4 | $ | 29.5 | $ | (8.2 | ) | $ | 61.7 | |||
| Depreciation and amortization expense | 6.4 | 6.7 | 0.3 | 13.4 | ||||||||
| Restructuring expenses ^(a)^ | 1.4 | 0.2 | - | 1.6 | ||||||||
| Gain of sale of assets ^(b)^ | - | - | (4.0 | ) | (4.0 | ) | ||||||
| Environmental charges ^(d)^ | - | - | 1.2 | 1.2 | ||||||||
| Adjusted EBITDA | $ | 48.2 | $ | 36.4 | $ | (10.7 | ) | $ | 73.9 | |||
| Net sales | $ | 254.0 | $ | 310.9 | $ | (3.5 | ) | $ | 561.4 | |||
| Adjusted EBITDA margin | 19.0 | % | 11.7 | % | 13.2 | % |
See the next page for information on restructuring expenses and other adjustments.
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Modine Manufacturing Company
Segment adjusted financial results (continued)
Recast for segment realignment (unaudited)
(In millions)
| Three months ended March 31, 2024 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Climate Solutions | Performance Technologies | Corporate and eliminations | Total | |||||||||
| Operating income | $ | 42.5 | $ | 23.4 | $ | (19.1 | ) | $ | 46.8 | |||
| Depreciation and amortization expense | 7.8 | 7.1 | 0.1 | 15.0 | ||||||||
| Restructuring expenses ^(a)^ | 1.3 | 11.6 | - | 12.9 | ||||||||
| Acquisition and integration costs ^(c)^ | - | - | 4.1 | 4.1 | ||||||||
| Adjusted EBITDA | $ | 51.6 | $ | 42.1 | $ | (14.9 | ) | $ | 78.8 | |||
| Net sales | $ | 278.2 | $ | 330.0 | $ | (4.7 | ) | $ | 603.5 | |||
| Adjusted EBITDA margin | 18.5 | % | 12.8 | % | 13.1 | % | ||||||
| Twelve months ended March 31, 2024 | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Climate Solutions | Performance Technologies | Corporate and eliminations | Total | |||||||||
| Operating income | $ | 178.6 | $ | 111.7 | $ | (49.6 | ) | $ | 240.7 | |||
| Depreciation and amortization expense | 26.5 | 28.7 | 0.9 | 56.1 | ||||||||
| Restructuring expenses ^(a)^ | 3.0 | 12.0 | - | 15.0 | ||||||||
| Gain of sale of assets ^(b)^ | - | - | (4.0 | ) | (4.0 | ) | ||||||
| Acquisition and integration costs ^(c)^ | - | - | 4.1 | 4.1 | ||||||||
| Environmental charges ^(d)^ | - | - | 2.4 | 2.4 | ||||||||
| Adjusted EBITDA | $ | 208.1 | $ | 152.4 | $ | (46.2 | ) | $ | 314.3 | |||
| Net sales | $ | 1,108.1 | $ | 1,321.3 | $ | (21.6 | ) | $ | 2,407.8 | |||
| Adjusted EBITDA margin | 18.8 | % | 11.5 | % | 13.1 | % | ||||||
| ^(a)^ | Restructuring expenses primarily consist of employee severance expenses related to targeted headcount reductions and equipment transfer costs. | |||||||||||
| --- | --- | |||||||||||
| ^(b)^ | The Company's sale of three automotive businesses based in Germany closed on October 31, 2023. As a result of the sale, the Company recorded a $4.0 million gain<br> on sale at Corporate during the third quarter of fiscal 2024. | |||||||||||
| --- | --- | |||||||||||
| ^(c)^ | On March 1, 2024, the Company acquired Scott Springfield Manufacturing, a leading provider of air handling units for the data center, telecommunications,<br> healthcare, and aerospace markets. In addition, the Company purchased liquid immersion cooling technology from TMGcore, Inc. in January 2024. Acquisition and integration costs in fiscal 2024, recorded as SG&A expenses at Corporate,<br> primarily include fees for i) transaction advisors, ii) legal, accounting, and other professional services, and iii) incremental costs directly associated with integration activities. In addition, the adjustment includes $1.6 million, also<br> recorded at Corporate, for the impact of an inventory purchase accounting adjustment. The Company wrote up acquired inventory to its estimated fair value and is charging the write-up to cost of sales as the underlying inventory is sold. | |||||||||||
| --- | --- | |||||||||||
| ^(d)^ | Environmental charges, including related legal costs, relate to a previously-owned U.S. manufacturing facility. | |||||||||||
| --- | --- |
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