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4 weeks ago
Modine Reports Fourth Quarter Fiscal 2026 ResultsMay 26, 2026 4:15 PM
PR Newswire (US) Strong fourth quarter resulted in fourth consecutive year of record financial results RACINE, Wis., May 26, 2026 /PRNewswire/ -- Modine (NYSE: MOD), a diversified global leader in thermal management technology and solutions, today reported financial results for the quarter and fiscal year ended March 31, 2026. Fourth Quarter Highlights:Record quarterly net sales of $954.4 million increased $307.2 million, or 47 percent, from the prior yearNet earnings of $73.6 million increased $23.5 million, or 47 percent, from the prior yearEarnings per share of $1.36 increased $0.44, or 48 percent, from the prior yearRecord quarterly adjusted EBITDA of $146.1 million increased $42.0 million, or 40 percent, from the prior yearRecord quarterly adjusted earnings per share of $1.71 increased $0.59, or 53 percent, from the prior yearFull-Year Highlights:Record net sales of $3.2 billion increased $597.6 million, or 23 percent, from the prior yearNet earnings of $123.3 million decreased $62.2 million, or 34 percent, from the prior year and included a $116.1 million non-cash pension termination charge in the third quarterEarnings per share of $2.26 decreased $1.16, or 34 percent, from the prior yearRecord adjusted EBITDA of $471.0 million increased $78.9 million, or 20 percent, from the prior yearRecord adjusted earnings per share of $5.02 increased $0.97, or 24 percent, from the prior yearFiscal 2027 Outlook:Net sales growth between 20 percent and 35 percentAdjusted EBITDA range of $650 million to $680 million, resulting in growth between 38 percent and 44 percent"The team delivered a strong fourth quarter and a fourth consecutive year of record revenue, adjusted EBITDA and adjusted earnings per share," said Modine President and Chief Executive Officer, Neil D. Brinker. "I am incredibly proud of this exceptional performance as we continue to evolve our portfolio to become a more focused, high-growth company. We took decisive action this year to advance our transformation including the completion of three acquisitions in our Climate Solutions segment, the launch of the largest capacity expansion in our company's history to meet growing demand for our data center products, and the announced pending spin-off of the Performance Technologies business. Our future is bright, evidenced by a landmark $4 billion long-term agreement for chiller sales with a major hyperscale customer, cementing Modine's position as a critical partner for data center cooling."Fourth Quarter Financial ResultsNet sales increased 47 percent to $954.4 million, compared with $647.2 million in the prior year. Sales growth was driven by higher sales in the Climate Solutions segment, driven primarily by strong demand from data center customers and sales from acquired businesses. This performance was achieved despite a significant loss of production days from severe weather in multiple locations and shortages of key components from supply chain partners. Gross profit increased 29 percent to $214.7 million and gross margin decreased by 320 basis points to 22.5 percent. The decline in gross margin was largely expected and resulted primarily from higher temporary costs related to the capacity expansion for data center products, increased tariffs, and higher material costs.Selling, general and administrative ("SG&A") expenses increased 25 percent to $101.7 million. The increase was primarily due to higher expenses in the Climate Solutions segment, supporting the segment's growth and including incremental expenses from the recent acquisitions, and costs related to the pending spin-off of the Performance Technologies segment. These higher costs were partially offset by cost saving initiatives, including benefits from previous restructuring actions.Operating income increased 39 percent to $103.9 million, compared to $74.5 million in the prior year. This increase was driven by higher earnings in the Climate Solutions segment. The Company recorded $5.2 million of restructuring expenses during the fourth quarter, primarily severance expenses related to headcount reductions and costs related to equipment transfers. In addition, the Company incurred $12.5 million of costs related to the pending spin-off of the Performance Technologies segment. Adjusted EBITDA, which excludes restructuring expenses, disposition costs, certain other charges, interest expense, the provision for income taxes, and depreciation and amortization expense, was $146.1 million, an increase of $42.0 million, or 40 percent, compared to $104.1 million in the prior year. Earnings per share was $1.36, compared with earnings per share of $0.92 in the prior year, an increase of $0.44, or 48 percent. Adjusted earnings per share was $1.71, compared with adjusted earnings per share of $1.12 in the prior year, an increase of $0.59, or 53 percent.Fourth Quarter Segment ReviewClimate Solutions segment sales were $665.9 million, compared with $356.3 million one year ago, an increase of 87 percent. Data Centers sales increased 158 percent from the prior year, and HVAC Technologies sales increased 51 percent, including $38.2 million of incremental sales from acquired businesses. The segment reported gross margin of 24.6 percent, which was 510 basis points lower than the prior year. This decline was largely expected and resulted primarily from the planned and temporary costs related to the rapid expansion of manufacturing capacity for data center products, and, to a lesser extent, higher tariff and weather-related temporary labor and overtime costs. The segment reported operating income of $108.8 million, a 77 percent increase from the prior year, and adjusted EBITDA of $124.3 million, an increase of 63 percent from the prior year.Performance Technologies segment sales were $294.0 million, compared with $294.8 million one year ago, a decrease of $0.8 million. This decrease primarily resulted from lower sales to stationary power customers, mostly offset by higher sales to automotive, commercial vehicle and off-highway customers. The segment reported gross margin of 16.5 percent, which was 390 basis points lower than the prior year, primarily due to higher material costs and tariffs. The segment reported operating income of $27.7 million, a 7 percent decrease from the prior year, and adjusted EBITDA of $37.4 million, a 15 percent decrease from the prior year.Full-Year Financial ResultsFiscal 2026 net sales increased 23 percent to $3,181.1 million compared with $2,583.5 million in the prior year. The increase was driven by higher sales in the Climate Solutions segment, with particularly strong growth in sales of data center products, and $119.1 million in incremental sales from acquisitions. This was partially offset by lower sales in the Performance Technologies segment.Gross margin of 23.0 percent was 190 basis points lower than the prior year, primarily due to higher temporary costs related to the capacity expansion for data center products and higher material costs and tariffs.The Company reported net earnings of $123.3 million compared to $185.5 million in the prior year, a decrease of $62.2 million. The current year results include a $116.1 million non-cash pension termination charge in the third quarter. The Company recorded $20.6 million of restructuring expenses during the year, primarily severance expenses related to headcount reductions and costs related to equipment transfers. In addition, the Company incurred $20.3 million of acquisition and disposition costs. Adjusted EBITDA, which excludes restructuring expenses, the pension termination charge, acquisition and disposition costs, certain other charges, interest expense, the provision for income taxes, and depreciation and amortization expense, was $471.0 million, an increase of $78.9 million, or 20 percent, compared to $392.1 million in the prior year. Earnings per share in fiscal 2026 was $2.26 compared with $3.42 in fiscal 2025, and adjusted earnings per share in fiscal 2026 was $5.02, compared with $4.05 in fiscal 2025.Balance Sheet & LiquidityNet cash provided by operating activities for the fiscal year ended March 31, 2026 was $248.7 million, an increase of $35.4 million compared to the prior year. Free cash flow for the fiscal year ended March 31, 2026 was $105.4 million, a decrease of $23.9 million from the prior year. This decrease was due to an increase in working capital and higher capital expenditures, both associated with the rapid growth of our Data Centers business. These drivers, which decreased free cash flow, were partially offset by higher operating earnings and the favorable impact of customer deposits received during fiscal 2026. Cash payments for restructuring activities, funding of the U.S. pension plan in connection with its termination, acquisition and disposition costs, and certain other costs totaled $49.6 million during the fiscal year ended March 31, 2026.Total debt was $436.3 million as of March 31, 2026. Cash and cash equivalents totaled $73.5 million as of March 31, 2026. Net debt was $362.8 million as of March 31, 2026, an increase of $83.6 million from the end of fiscal 2025. This increase resulted from borrowings to fund working capital, acquisitions and capital expenditures. Outlook"Our fiscal 2027 outlook implies a fifth consecutive year of record results," added Brinker. "We anticipate another strong year for our Data Centers business, supported by our strong customer relationships and significant order book. Our capacity expansion remains firmly on track and we will continue to invest in our fastest growing business to ensure we meet the future needs of our key customers. Altogether, we expect another terrific year for Modine and are confident in our ability to deliver value for our customers and shareholders."Outlook includes the Performance Technologies business for all of fiscal 2027. This outlook will be updated for the remaining business once the timing of the spin-off of the Performance Technologies segment is finalized. Based on current exchange rates and market conditions, Modine provides its outlook for fiscal 2027:Fiscal 2027Current Outlook
Net Sales+20% to 35%
Adjusted EBITDA$650 to $680 millionConference Call and Webcast Modine will conduct a conference call and live webcast, with a slide presentation, on Wednesday, May 27, 2026, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss its fourth quarter and fiscal year 2026 financial results. The webcast and accompanying slides will be available on the Investor Relations section of the Modine website at www.modine.com. Participants are encouraged to log on to the webcast and conference call about ten minutes prior to the start of the event. A replay of the slides and the audio will be available on or after May 27, 2026, on the investor section of Modine's website at http://www.modine.com. An audio only replay will be available through midnight on June 3, 2026, by dialing 877-660-6853 (international replay 201-612-7415) and entering the Conference ID# 13758931. A transcript of the call will be posted to the company's website on or after May 28, 2026.About Modine For more than 100 years, Modine has solved the toughest thermal management challenges for mission-critical applications. Our purpose of Engineering a Cleaner, Healthier World™ means we are always evolving our portfolio of technologies to provide the latest heating, cooling, and ventilation solutions. Through the hard work of more than 13,000 employees worldwide, our businesses advance our purpose with systems that improve air quality, reduce energy and water consumption, lower harmful emissions, enable cleaner running vehicles, and use environmentally friendly refrigerants. Modine is a global company headquartered in Racine, Wisconsin (U.S.), with operations in North America, South America, Europe, and Asia. For more information about Modine, visit www.modine.com.Forward-Looking Statements This press release contains statements, including information about future financial performance and market conditions, accompanied by phrases such as "believes," "estimates," "expects," "plans," "anticipates," "intends," "projects," and other similar "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995. Modine's actual results, performance or achievements may differ materially from those expressed or implied in these statements because of certain risks and uncertainties, including, but not limited to those described under "Risk Factors" in Item 1A of Part I of the Company's most recent Annual Report on Form 10-K. Other risks and uncertainties include, but are not limited to, the following: the impact of potential adverse developments or disruptions in the global economy and financial markets, including impacts related to geopolitical tensions and military conflicts, including the conflict between the U.S. and Iran, inflation, energy costs, government incentive or funding programs, supply chain challenges or supplier constraints, logistical disruptions, tariffs, sanctions and other trade issues or cross-border trade restrictions; the impact of other economic, social and political conditions, changes and challenges in the markets where we operate and compete, including foreign currency exchange rate fluctuations, changes in interest rates, tightening of the credit markets, recession or recovery therefrom, restrictions associated with importing and exporting and foreign ownership, public health crises, and the general uncertainties, including the impact on demand for our products and the markets we serve from regulatory and/or policy changes that have been or may be implemented in the U.S. or abroad, including those related to tax and trade, climate change, and public health threats; the overall health and pricing focus of our customers; changes or threats to the market growth prospects for our customers; our ability to successfully exit portions of our business that do not align with our strategic plans, including the various risks related to the pending Reverse Morris Trust transaction with Gentherm; our ability to realize the sales growth and return on investments anticipated in our Data Centers business and our ability to execute on other organic growth opportunities and acquisitions; our ability to 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 be at the forefront of technological advances and the impacts of any changes in the adoption rate of technologies that we expect to drive sales growth; our ability to effectively and efficiently manage our operations in response to sales volume changes, including maintaining adequate production capacity to meet demand in our growing businesses, particularly in our Data Centers business, while also completing restructuring activities and realizing benefits thereof; our ability to fund our global liquidity requirements efficiently and comply with the financial covenants in our credit agreements; operational inefficiencies as a result of product or program launches, unexpected volume increases or decreases, product transfers and product warranty and liability claims; the impact on Modine of any significant increases in commodity prices, particularly aluminum, copper, steel and stainless steel (nickel) and other purchased components and related costs, and our ability to adjust product pricing in response to any such increases; our ability to recruit and maintain talent in managerial, leadership, operational and administrative functions and to mitigate increased labor costs; our ability to protect our proprietary information and intellectual property from theft or attack; the impact of any substantial disruption or material breach of our information technology systems; costs and other effects of environmental investigation, remediation or litigation and the increasing emphasis on environmental, social and corporate governance matters; our ability to realize the benefits of deferred tax assets and the impact of changes in tax regulations; and other risks and uncertainties identified in our public filings with the U.S. Securities and Exchange Commission. Forward-looking statements are as of the date of this press release, and we do not assume any obligation to update any forward-looking statements.Non-GAAP Financial DisclosuresAdjusted EBITDA, adjusted EBITDA margin, adjusted earnings per share, net debt, free cash flow, organic sales and organic sales growth (which are defined below) as used in this press release are not measures that are defined in generally accepted accounting principles (GAAP). These non-GAAP measures are used by management as performance measures to evaluate the Company's overall financial performance and liquidity. These measures are not, and should not be viewed as, substitutes for the applicable GAAP measures, and may be different from similarly titled measures used by other companies.Definition – Adjusted EBITDA and adjusted EBITDA margin The Company defines adjusted EBITDA as net earnings excluding interest expense, the provision or benefit for income taxes, depreciation and amortization expenses, other income and expense, restructuring expenses, impairment charges, pension termination charges, acquisition and disposition costs, and certain other gains or charges. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of net sales. The Company believes that adjusted EBITDA and adjusted EBITDA margin provide relevant measures of profitability and earnings power. The Company views these financial metrics as being useful in assessing operating performance from period to period by excluding certain items that it believes are not representative of its core business. Adjusted EBITDA, when calculated for the business segments, is defined as operating income excluding depreciation and amortization expenses, restructuring expenses, impairment charges, and certain other gains or charges.Definition – Adjusted earnings per shareDiluted earnings per share plus restructuring expenses, impairment charges, pension termination charges, acquisition and disposition costs, and excluding changes in income tax valuation allowances and certain other gains or charges. Adjusted earnings per share is an overall performance measure, not including costs associated with restructuring, acquisitions, and dispositions and certain other gains or charges.Definition – Net debtThe sum of debt due within one year and long-term debt, less cash and cash equivalents. Net debt is an indicator of the Company's debt position after considering on-hand cash balances.Definition – Free cash flow Free cash flow represents net cash provided by operating activities less expenditures for property, plant and equipment. Free cash flow presents cash generated from operations during the period that is available for strategic capital decisions.Definition – Organic sales and organic sales growth Net sales and net sales growth can be impacted by acquisitions, dispositions, and foreign currency exchange rate fluctuations. The Company defines organic sales as external net sales excluding the impact of acquisitions and the effects of foreign currency exchange rate fluctuations. Organic sales growth represents the percentage change of organic sales compared to prior year external net sales, excluding the impact of dispositions. The effect of exchange rate changes is calculated by using the same foreign currency exchange rates as those used to translate financial data for the prior period. The Company adjusts for acquisitions and dispositions by excluding net sales in the current and prior periods, respectively, for which there are no comparable sales in the reported periods. These sales growth measures provide a more consistent indication of our performance, without the effects of foreign currency exchange rate fluctuations or acquisitions and dispositions. Forward-looking non-GAAP financial measureThe Company's fiscal 2027 guidance includes adjusted EBITDA, as defined above, which is a non-GAAP financial measure. The fiscal 2027 guidance includes the Company's estimates for interest expense of approximately $15 to $18 million, a provision for income taxes of approximately $135 to $145 million, and depreciation and amortization expense of approximately $90 to $95 million. The non-GAAP financial measure also excludes certain cash and non-cash expenses or gains. These expenses and gains may be significant and include items such as restructuring expenses (including severance and equipment transfer costs), impairment charges, acquisition and disposition costs, and certain other items. In connection with the pending Reverse Morris Trust transaction with Gentherm, the Company expects to incur approximately $30 to $40 million of additional costs during fiscal 2027, primarily for transaction advisory, legal, accounting, tax and other professional services. Estimates of other expenses and gains for fiscal 2027 are not available due to the low visibility and unpredictability of these items.Modine Manufacturing CompanyConsolidated statements of operations (unaudited)(In millions, except per share amounts)
Three months ended March 31,
Twelve months ended March 31,
2026
2025
2026
2025Net sales
$954.4
$647.2
$3,181.1
$2,583.5Cost of sales
739.7
481.2
2,450.0
1,939.7Gross profit
214.7
166.0
731.1
643.8Selling, general & administrative expenses
101.7
81.5
360.1
332.1Restructuring expenses
5.2
10.0
20.6
28.2Impairment charge
—
—
4.1
—Loss on sale of assets
3.9
—
3.9
—Operating income
103.9
74.5
342.4
283.5Interest expense
(8.6)
(5.3)
(31.6)
(26.4)Pension termination charge
—
—
(116.1)
—Other income (expense) – net
0.3
(2.4)
(8.2)
(3.1)Earnings before income taxes
95.6
66.8
186.5
254.0Provision for income taxes
(22.0)
(16.7)
(63.2)
(68.5)Net earnings
73.6
50.1
123.3
185.5Net earnings attributable to noncontrolling interest
(0.3)
(0.5)
(1.8)
(1.5)Net earnings attributable to Modine
$73.3
$49.6
$121.5
$184.0
Net earnings per share attributable to Modine shareholders –
diluted
$1.36
$0.92
$2.26
$3.42
Weighted-average shares outstanding – diluted
54.0
53.9
53.8
53.9
Condensed consolidated balance sheets (unaudited)(In millions)
March 31, 2026
March 31, 2025Assets
Cash and cash equivalents
$73.5
$71.6Trade receivables
731.0
478.9Inventories
506.1
340.9Other current assets
105.5
69.8Total current assets
1,416.1
961.2Property, plant and equipment – net
520.9
390.5Intangible assets – net
197.0
146.7Goodwill
292.1
233.9Deferred income taxes
85.3
67.0Other noncurrent assets
163.2
118.3Total assets
$2,674.6
$1,917.6
Liabilities and shareholders' equity
Debt due within one year
$51.4
$54.1Accounts payable
464.8
290.8Other current liabilities
212.7
196.1Total current liabilities
728.9
541.0Long-term debt
384.9
296.7Other noncurrent liabilities
358.0
161.7Total liabilities
1,471.8
999.4Total equity
1,202.8
918.2Total liabilities & equity
$2,674.6
$1,917.6
Modine Manufacturing CompanyCondensed consolidated statements of cash flows (unaudited)(In millions)
Twelve months ended March 31,
2026
2025Cash flows from operating activities:
Net earnings
$123.3
$185.5Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
79.7
77.7Impairment charge
4.1
—Loss on sale of assets
3.9
—Pension termination charge
116.1
—Stock-based compensation expense
22.1
26.4Deferred income taxes
(39.1)
6.5Other – net
7.0
6.9Changes in operating assets and liabilities:
Trade accounts receivable
(222.6)
(61.2)Inventories
(125.1)
13.6Accounts payable
151.1
10.5Accrued compensation and employee benefits
(13.5)
1.6Contract liabilities
159.0
(44.5)Other assets
(2.9)
15.3Other liabilities
(14.4)
(25.0)Net cash provided by operating activities
248.7
213.3
Cash flows from investing activities:
Expenditures for property, plant and equipment
(143.3)
(84.0)Payments for business acquisitions, net of cash acquired
(182.4)
(3.4)Other – net
4.4
0.8Net cash used for investing activities
(321.3)
(86.6)
Cash flows from financing activities:
Net increase (decrease) in debt
78.7
(82.5)Purchases of treasury stock
(7.0)
(30.9)Other – net
1.4
(0.2)Net cash provided by (used for) financing activities
73.1
(113.6)
Effect of exchange rate changes on cash
1.3
(1.5)
Net increase in cash, cash equivalents and restricted cash
1.8
11.6
Cash, cash equivalents and restricted cash – beginning of period
71.9
60.3
Cash, cash equivalents and restricted cash – end of period
$73.7
$71.9
Modine Manufacturing CompanySegment operating results (unaudited)(In millions)
Three months ended March 31,
Twelve months ended March 31,
2026
2025
2026
2025Net sales:
Climate Solutions
$665.9
$356.3
$2,062.3
$1,440.8Performance Technologies
294.0
294.8
1,131.8
1,163.5Segment total
959.9
651.1
3,194.1
2,604.3Corporate and eliminations
(5.5)
(3.9)
(13.0)
(20.8)Net sales
$954.4
$647.2
$3,181.1
$2,583.5
Three months ended March 31,
Twelve months ended March 31,
2026
2025
2026
2025
$'s
% of
sales
$'s
% of
sales
$'s
% of
sales
$'s
% of
sales
Gross profit:
Climate Solutions
$164.0
24.6%
$105.9
29.7%
$524.0
25.4%
$416.1
28.9%Performance Technologies
48.7
16.5%
60.1
20.4%
204.8
18.1%
230.4
19.8%Segment total
212.7
22.2%
166.0
25.5%
728.8
22.8%
646.5
24.8%Corporate and eliminations
2.0
—
—
—
2.3
—
(2.7)
—
Gross profit
$214.7
22.5%
$166.0
25.7%
$731.1
23.0%
$643.8
24.9%
Three months ended March 31,
Twelve months ended March 31,
2026
2025
2026
2025Operating income:
Climate Solutions
$108.8
$61.5
$321.1
$248.4Performance Technologies
27.7
29.9
109.7
108.0Segment total
136.5
91.4
430.8
356.4Corporate and eliminations
(32.6)
(16.9)
(88.4)
(72.9)Operating income
$103.9
$74.5
$342.4
$283.5
Modine Manufacturing CompanyAdjusted financial results (unaudited)(In millions, except per share amounts)
Three months ended March 31,
Twelve months ended March 31,
2026
2025
2026
2025Net earnings
$73.6
$50.1
$123.3
$185.5Interest expense
8.6
5.3
31.6
26.4Provision for income taxes
22.0
16.7
63.2
68.5Depreciation and amortization expense
20.6
19.2
79.7
77.7Other (income) expense – net
(0.3)
2.4
8.2
3.1Restructuring expenses (a)
5.2
10.0
20.6
28.2Impairment charge (b)
—
—
4.1
—Loss on sale of assets (c)
3.9
—
3.9
—Pension termination charge (d)
—
—
116.1
—Acquisition and integration costs (e)
—
0.3
5.3
2.3Disposition costs (f)
12.5
—
15.0
—Environmental charges (g)
—
0.1
—
0.4Adjusted EBITDA
$146.1
$104.1
$471.0
$392.1
Net earnings per share attributable to Modine shareholders – diluted
$1.36
$0.92
$2.26
$3.42Restructuring expenses (a)
0.07
0.16
0.30
0.45Impairment charge (b)
—
—
0.08
—Loss on sale of assets (c)
0.07
—
0.07
—Pension termination charge (d)
—
—
1.92
—Acquisition and integration costs (e)
—
0.04
0.08
0.18Disposition costs (f)
0.17
—
0.20
—Tax law changes (h)
0.04
—
0.11
—Adjusted earnings per share
$1.71
$1.12
$5.02
$4.05
(a)Restructuring expenses primarily consist of employee severance expenses and equipment transfer costs. The tax benefit related to restructuring expenses during the fourth quarter of fiscal 2026 and fiscal 2025 was $1.3 million and $1.5 million, respectively. The tax benefit related to restructuring expenses during fiscal 2026 and fiscal 2025 was $4.3 million and $4.0 million, respectively.
(b)During the second quarter of fiscal 2026, the Company recorded a $4.1 million non-cash asset impairment charge related to its technical service center and administrative support facility in Germany, which it expects to sell during fiscal 2027. There was no tax impact associated with this impairment charge.
(c)During the fourth quarter of fiscal 2026, the Company recorded a $3.9 million loss resulting from the settlement of a loan facility that it provided in connection with the sale of its Austrian automotive business in fiscal 2022. There was no tax impact associated with this loss.
(d)During the third quarter of fiscal 2026, the Company recorded a non-cash pension termination charge of $116.1 million to recognize actuarial losses that were included within accumulated other comprehensive loss on its consolidated balance sheet. The tax benefit related to the pension termination charge was $13.1 million.
(e)The fiscal 2026 costs primarily relate to the acquisitions of Climate by Design International and L.B. White and include fees for transaction advisory services, legal, accounting, and other professional services and costs directly associated with integration activities. The acquisition costs also include $1.3 million for the impact of inventory purchase accounting adjustments. The fiscal 2025 costs relate to the acquisition of Scott Springfield Manufacturing, including $1.6 million for the impact of an inventory purchase accounting adjustment. In addition, for purposes of calculating adjusted EPS in fiscal 2025, the Company adjusted for $10.6 million of incremental amortization expense recorded in the Climate Solutions segment associated with an acquired order backlog intangible asset. The tax benefit related to the acquisition costs during fiscal 2026 and 2025 was $0.8 million and $2.9 million, respectively. The tax benefit related to the acquisition costs during the fourth quarter of fiscal 2025 was $0.7 million.
(f)Disposition costs primarily relate to the proposed Reverse Morris Trust transaction with Gentherm and include fees for legal, accounting, tax, and other professional services and other costs directly related to the transaction. The tax benefit related to the disposition costs during the fourth quarter and during fiscal 2026 was $3.2 million and $3.9 million, respectively.
(g)Environmental charges, including related legal costs, are recorded as SG&A expenses and relate to previously-owned facilities.
(h)The provisions of the One Big Beautiful Bill Act, which was enacted in July 2025, negatively impacted the Company's income tax expense for the fourth quarter and during fiscal 2026 by $2.1 million and $5.8 million, respectively. The higher income tax expense was primarily due to impacts related to state deferred taxes and the utilization of foreign tax credits. Modine Manufacturing CompanySegment adjusted financial results (unaudited)(In millions)
Three months ended March 31, 2026
Three months ended March 31, 2025
Climate
Performance
Corporate and
Climate
Performance
Corporate and
Solutions
Technologies
eliminations
Total
Solutions
Technologies
eliminations
Total
Operating income
$108.8
$27.7
$(32.6)
$103.9
$61.5
$29.9
$(16.9)
$74.5
Depreciation and amortization expense
12.6
7.5
0.5
20.6
11.6
7.4
0.2
19.2
Restructuring expenses (a)
2.9
2.2
0.1
5.2
3.2
6.8
—
10.0
Loss on sale of assets (a)
—
—
3.9
3.9
—
—
—
—
Acquisition and integration costs (a)
—
—
—
—
—
—
0.3
0.3
Disposition costs (a)
—
—
12.5
12.5
—
—
—
—
Environmental charges (a)
—
—
—
—
—
—
0.1
0.1
Adjusted EBITDA
$124.3
$37.4
$(15.6)
$146.1
$76.3
$44.1
$(16.3)
$104.1
Net sales
$665.9
$294.0
$(5.5)
$954.4
$356.3
$294.8
$(3.9)
$647.2
Adjusted EBITDA margin
18.7%
12.7%
15.3%
21.4%
15.0%
16.1%
Twelve months ended March 31, 2026
Twelve months ended March 31, 2025
Climate
Performance
Corporate and
Climate
Performance
Corporate and
Solutions
Technologies
eliminations
Total
Solutions
Technologies
eliminations
Total
Operating income
$321.1
$109.7
$(88.4)
$342.4
$248.4
$108.0
$(72.9)
$283.5
Depreciation and amortization expense
47.5
30.8
1.4
79.7
48.3
28.7
0.7
77.7
Restructuring expenses (a)
8.5
11.9
0.2
20.6
6.0
20.5
1.7
28.2
Impairment charge (a)
—
4.1
—
4.1
—
—
—
—
Loss on sale of assets (a)
—
—
3.9
3.9
—
—
—
—
Acquisition and integration costs (a)
—
—
5.3
5.3
—
—
2.3
2.3
Disposition costs (a)
—
—
15.0
15.0
—
—
—
—
Environmental charges (a)
—
—
—
—
—
—
0.4
0.4
Adjusted EBITDA
$377.1
$156.5
$(62.6)
$471.0
$302.7
$157.2
$(67.8)
$392.1
Net sales
$2,062.3
$1,131.8
$(13.0)
$3,181.1
$1,440.8
$1,163.5
$(20.8)
$2,583.5
Adjusted EBITDA margin
18.3%
13.8%
14.8%
21.0%
13.5%
15.2%
(a)See the Adjusted EBITDA reconciliations on the previous page for information on restructuring expenses and other adjustments.
Modine Manufacturing CompanyNet debt (unaudited)(In millions)
March 31, 2026
March 31, 2025Debt due within one year
$51.4
$54.1Long-term debt
384.9
296.7Total debt
436.3
350.8
Less: cash and cash equivalents
73.5
71.6Net debt
$362.8
$279.2
Free cash flow (unaudited)(In millions)
Three months ended March 31,
Twelve months ended March 31,
2026
2025
2026
2025Net cash provided by operating activities
$194.9
$54.8
$248.7
$213.3Expenditures for property, plant and equipment
(42.1)
(27.7)
(143.3)
(84.0)Free cash flow
$152.8
$27.1
$105.4
$129.3
Organic sales and organic sales growth (unaudited)(In millions)
Three months ended March 31, 2026
Three months ended March 31, 2025
Effect of
Sales
Organic
External
Exchange Rate
Effect of
Organic
External
Effect of
Excluding
Sales
Sales
Changes
Acquisitions
Sales
Sales
Dispositions
Dispositions
Growth
Net sales:
Climate Solutions
$662.0
$(17.1)
$(38.2)
$606.7
$356.3
$—
$356.3
70%Performance Technologies
292.4
(12.0)
—
280.4
290.9
—
290.9
(4)%Net Sales
$954.4
$(29.1)
$(38.2)
$887.1
$647.2
$—
$647.2
37%
Twelve months ended March 31, 2026
Twelve months ended March 31, 2025
Effect of
Sales
Organic
External
Exchange Rate
Effect of
Organic
External
Effect of
Excluding
Sales
Sales
Changes
Acquisitions
Sales
Sales
Dispositions
Dispositions
Growth
Net sales:
Climate Solutions
$2,055.4
$(37.6)
$(119.1)
$1,898.7
$1,440.6
$—
$1,440.6
32%Performance Technologies
1,125.7
(25.3)
—
1,100.4
1,142.9
—
1,142.9
(4)%Net Sales
$3,181.1
$(62.9)
$(119.1)
$2,999.1
$2,583.5
$—
$2,583.5
16%
Kathleen Powers
(262) 636-1687
kathleen.t.powers@modine.com View original content to download multimedia:https://www.prnewswire.com/news-releases/modine-reports-fourth-quarter-fiscal-2026-results-302782279.htmlSOURCE Modine Original: Modine Reports Fourth Quarter Fiscal 2026 Results
US Market News
5 months ago
Modine Reports Third Quarter Fiscal 2026 ResultsFebruary 4, 2026 4:15 PM
PR Newswire (US)
Ongoing execution of planned production ramp for Data Center products drives top-line growth of 51% in Climate Solutions segment; raising full-year outlook for revenue and earningsRACINE, Wis., Feb. 4, 2026 /PRNewswire/ -- Modine (NYSE: MOD), a diversified global leader in thermal management technology and solutions, today reported financial results for the quarter ended December 31, 2025.
Third Quarter Highlights:Net sales of $805.0 million increased $188.2 million, or 31 percent, from the prior yearSuccessfully terminated the U.S. pension plan, resulting in a $116.1 million non-cash chargeNet loss of $46.8 million including the non-cash pension termination charge; loss per share of $0.90 decreased $1.66 from the prior yearAdjusted EBITDA of $119.6 million increased $32.3 million, or 37 percent, from the prior yearAdjusted earnings per share of $1.19 increased $0.27, or 29 percent, from the prior yearIncreased Fiscal 2026 Outlook:Net sales growth between 20 percent and 25 percentAdjusted EBITDA range of $455 million to $475 million, resulting in growth between 16 percent and 21 percent"Modine delivered another quarter of outstanding performance, with 21 percent organic sales growth driven by a 78 percent increase in data center sales," said Modine President and Chief Executive Officer, Neil D. Brinker. "The capacity expansion for data center products remains on schedule, with new production lines contributing to a 31 percent sequential increase in sales compared to the second fiscal quarter. Margins in the Climate Solutions segment improved sequentially this quarter, as expected, and we remain confident that we are on pace for a strong fourth quarter as more production lines are commissioned to keep pace with the strong demand."Brinker continued, "Last week we made an important and historic announcement regarding the pending spin off and combination of our Performance Technologies business with Gentherm. This marks a major milestone in our strategic transformation, including a significant acceleration of our strategy to evolve our portfolio to drive long-term value for our shareholders, customers and employees. The combination of Performance Technologies with Gentherm will create a scaled leader in thermal management and solutions, while Modine will become a pure-play climate solutions company, focused on the high-growth data center and commercial HVAC and refrigeration markets. Third Quarter Financial ResultsNet sales increased 31 percent to $805.0 million, compared with $616.8 million in the prior year. Sales growth was driven by higher sales in the Climate Solutions segment, driven by strong demand from data center customers and sales from acquired businesses. Performance Technologies sales increased 1 percent from the prior year, as lower volumes were offset by favorable pricing and foreign exchange impact.Gross profit increased $36.5 million to $186.1 million and gross margin decreased by 120 basis points to 23.1 percent. The decrease in gross margin was primarily driven by lower gross margin in the Climate Solutions segment, which resulted primarily from higher temporary costs related to the capacity expansion for data center products. Gross margin in the Performance Technologies segment increased 110 basis points to 18.9 percent driven by favorable pricing. Selling, general and administrative ("SG&A") expenses increased $7.3 million to $89.3 million. The increase was primarily due to higher spending to support growth and acquisitions in Climate Solutions, partially offset by the positive impact of cost saving initiatives in Performance Technologies.Operating income increased $30.0 million to $89.3 million, compared to $59.3 million in the prior year. This increase was primarily driven by higher earnings on increased revenues in the Climate Solutions segment. The Company recorded $7.5 million of restructuring expenses during the quarter, primarily severance expenses related to headcount reductions and costs related to equipment transfers. The Company also recorded a $116.1 million non-cash pension termination charge related to the successful termination of its primary U.S. pension plan. Adjusted EBITDA, which excludes restructuring expenses, the pension termination charge and certain other charges, interest expense, the provision for income taxes, and depreciation and amortization expense, was $119.6 million, an increase of $32.3 million, or 37 percent, compared to $87.3 million in the prior year. Loss per share was $0.90, compared with earnings per share of $0.76 in the prior year, a decrease of $1.66. Adjusted earnings per share was $1.19, compared with adjusted earnings per share of $0.92 in the prior year, an increase of $0.27, or 29 percent.Third Quarter Segment ReviewClimate Solutions segment sales were $544.6 million, compared with $360.8 million one year ago, an increase of 51 percent. Data center sales increased 78 percent from the prior year, and HVAC Technologies sales increased 48 percent, including $42.8 million of incremental sales from acquired businesses. The segment reported gross margin of 24.8 percent, which was 380 basis points lower than the prior year. This decline included the planned and temporary impacts related to the rapid expansion of manufacturing capacity for data center products, along with unfavorable sales mix. The segment reported operating income of $83.2 million, a 33 percent increase from the prior year, and adjusted EBITDA of $97.4 million, an increase of 29 percent from the prior year.Performance Technologies segment sales were $266.0 million, compared with $262.2 million one year ago, an increase of 1 percent. This increase primarily resulted from higher sales to automotive customers, partially offset by lower sales to stationary power and commercial vehicle customers. The segment reported gross margin of 18.9 percent, which was 110 basis points higher than the prior year, primarily due to the positive impact of cost recoveries from pass-through pricing and improved operating efficiencies. The segment reported operating income of $25.8 million, a 63 percent increase from the prior year, and adjusted EBITDA of $39.3 million, a 38 percent increase from the prior year.Balance Sheet & LiquidityNet cash provided by operating activities for the nine months ended December 31, 2025 was $53.8 million, a decrease of $104.7 million compared to the prior year. Free cash flow for the nine months ended December 31, 2025 was negative $47.4 million, a decrease of $149.6 million from the prior year. This decrease was due to an increase in working capital, primarily related to higher inventory balances and higher capital expenditures to support growth in Data Centers. Cash payments for restructuring activities, funding of the U.S. pension plan in connection with its termination, acquisition and disposition costs, and certain other costs totaled $39.5 million during the nine months ended December 31, 2025.Total debt was $615.8 million as of December 31, 2025. Cash and cash equivalents totaled $98.7 million as of December 31, 2025. Net debt was $517.1 million as of December 31, 2025, an increase of $237.9 million from the end of fiscal 2025. This increase resulted from borrowings to fund growth in working capital, acquisitions and capital expenditures. Outlook"Based on our strong performance this quarter and continued momentum within our Climate Solution segment during the start of the fourth quarter, we are raising our outlook for both revenue and adjusted EBITDA," said Brinker. "This confidence is anchored in the exceptional growth of our Data Centers business, where we now expect revenue to increase by more than 70 percent year-over-year. Given the strong demand for our products, coupled with our ability to successfully execute on our planned capacity expansion, we are also raising our multi-year outlook for Data Center sales to 50 to 70 percent annual growth for the next two years, putting us solidly ahead of our $2 billion revenue target for fiscal year 2028."Based on current exchange rates and market conditions, Modine provides its revised outlook for Fiscal 2026:Fiscal 2026Current OutlookNet Sales+20% to 25%Adjusted EBITDA$455 to $475 millionConference Call and Webcast Modine will conduct a conference call and live webcast, with a slide presentation, on Thursday, February 5, 2026, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to discuss its third quarter fiscal year 2026 financial results. The webcast and accompanying slides will be available on the Investor Relations section of the Modine website at www.modine.com. Participants are encouraged to log on to the webcast and conference call about ten minutes prior to the start of the event. A replay of the slides and the audio will be available on or after February 5, 2026, on the investor section of Modine's website at http://www.modine.com. An audio only replay will be available through midnight on February 12, 2026, by dialing 877-660-6853 (international replay 201-612-7415) and entering the Conference ID# 13757387. A transcript of the call will be posted to the company's website on or after February 9, 2026.About Modine For more than 100 years, Modine has solved the toughest thermal management challenges for mission-critical applications. Our purpose of Engineering a Cleaner, Healthier World™ means we are always evolving our portfolio of technologies to provide the latest heating, cooling, and ventilation solutions. Through the hard work of more than 11,000 employees worldwide, our Climate Solutions and Performance Technologies segments advance our purpose with systems that improve air quality, reduce energy and water consumption, lower harmful emissions, enable cleaner running vehicles, and use environmentally friendly refrigerants. Modine is a global company headquartered in Racine, Wisconsin (U.S.), with operations in North America, South America, Europe, and Asia. For more information about Modine, visit www.modine.com.Forward-Looking Statements This press release contains statements, including information about future financial performance and market conditions, accompanied by phrases such as "believes," "estimates," "expects," "plans," "anticipates," "intends," "projects," and other similar "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995. Modine's actual results, performance or achievements may differ materially from those expressed or implied in these statements because of certain risks and uncertainties, including, but not limited to those described under "Risk Factors" in Item 1A of Part I of the Company's Annual Report on Form 10-K for the year ended March 31, 2025. Other risks and uncertainties include, but are not limited to, the following: the impact of potential adverse developments or disruptions in the global economy and financial markets, including impacts related to inflation, energy costs, government incentive or funding programs, supply chain challenges or supplier constraints, logistical disruptions, tariffs, sanctions and other trade issues or cross-border trade restrictions; the impact of other economic, social and political conditions, changes and challenges in the markets where we operate and compete, including foreign currency exchange rate fluctuations, changes in interest rates, tightening of the credit markets, recession or recovery therefrom, restrictions associated with importing and exporting and foreign ownership, public health crises, and the general uncertainties, including the impact on demand for our products and the markets we serve from regulatory and/or policy changes that have been or may be implemented in the U.S. or abroad, including those related to tax and trade, climate change, public health threats, and international political and military conflicts; the overall health and pricing focus of our customers; changes or threats to the market growth prospects for our customers; our ability to successfully realize anticipated benefits, including improved profit margins and cash flow, from our strategic initiatives and our application of 80/20 principles across our businesses; our ability to be at the forefront of technological advances and the impacts of any changes in the adoption rate of technologies that we expect to drive sales growth; our ability to accelerate growth organically and through acquisitions and successfully integrate acquired businesses; our ability to successfully exit portions of our business that do not align with our strategic plans; various risks related to the proposed Reverse Morris Trust transaction with Gentherm; our ability to effectively and efficiently manage our operations in response to sales volume changes, including maintaining adequate production capacity to meet demand in our growing businesses while also completing restructuring activities and realizing benefits thereof; our ability to fund our global liquidity requirements efficiently and comply with the financial covenants in our credit agreements; operational inefficiencies as a result of product or program launches, unexpected volume increases or decreases, product transfers and warranty claims; the impact on Modine of any significant increases in commodity prices, particularly aluminum, copper, steel and stainless steel (nickel) and other purchased components and related costs, and our ability to adjust product pricing in response to any such increases; our ability to recruit and maintain talent in managerial, leadership, operational and administrative functions and to mitigate increased labor costs; our ability to protect our proprietary information and intellectual property from theft or attack; the impact of any substantial disruption or material breach of our information technology systems; costs and other effects of environmental investigation, remediation or litigation and the increasing emphasis on environmental, social and corporate governance matters; our ability to realize the benefits of deferred tax assets; and other risks and uncertainties identified in our public filings with the U.S. Securities and Exchange Commission. Forward-looking statements are as of the date of this press release, and we do not assume any obligation to update any forward-looking statements.Non-GAAP Financial DisclosuresAdjusted EBITDA, adjusted EBITDA margin, adjusted earnings per share, net debt, free cash flow, organic sales and organic sales growth (which are defined below) as used in this press release are not measures that are defined in generally accepted accounting principles (GAAP). These non-GAAP measures are used by management as performance measures to evaluate the Company's overall financial performance and liquidity. These measures are not, and should not be viewed as, substitutes for the applicable GAAP measures, and may be different from similarly titled measures used by other companies.Definition – Adjusted EBITDA and adjusted EBITDA margin The Company defines adjusted EBITDA as net earnings excluding interest expense, the provision or benefit for income taxes, depreciation and amortization expenses, other income and expense, restructuring expenses, impairment charges, pension termination charges, acquisition and disposition costs, and certain other gains or charges. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of net sales. The Company believes that adjusted EBITDA and adjusted EBITDA margin provide relevant measures of profitability and earnings power. The Company views these financial metrics as being useful in assessing operating performance from period to period by excluding certain items that it believes are not representative of its core business. Adjusted EBITDA, when calculated for the business segments, is defined as operating income excluding depreciation and amortization expenses, restructuring expenses, impairment charges, and certain other gains or charges.Definition – Adjusted earnings per shareDiluted earnings per share plus restructuring expenses, impairment charges, pension termination charges, acquisition and disposition costs, and excluding changes in income tax valuation allowances and certain other gains or charges. Adjusted earnings per share is an overall performance measure, not including costs associated with restructuring and acquisitions and certain other gains or charges.Definition – Net debtThe sum of debt due within one year and long-term debt, less cash and cash equivalents. Net debt is an indicator of the Company's debt position after considering on-hand cash balances.Definition – Free cash flow Free cash flow represents net cash provided by operating activities less expenditures for property, plant and equipment. Free cash flow presents cash generated from operations during the period that is available for strategic capital decisions.Definition – Organic sales and organic sales growth Net sales and net sales growth can be impacted by acquisitions, dispositions, and foreign currency exchange rate fluctuations. The Company defines organic sales as external net sales excluding the impact of acquisitions and the effects of foreign currency exchange rate fluctuations. Organic sales growth represents the percentage change of organic sales compared to prior year external net sales, excluding the impact of dispositions. The effect of exchange rate changes is calculated by using the same foreign currency exchange rates as those used to translate financial data for the prior period. The Company adjusts for acquisitions and dispositions by excluding net sales in the current and prior periods, respectively, for which there are no comparable sales in the reported periods. These sales growth measures provide a more consistent indication of our performance, without the effects of foreign currency exchange rate fluctuations or acquisitions and dispositions.Forward-looking non-GAAP financial measureThe Company's fiscal 2026 guidance includes adjusted EBITDA, as defined above, which is a non-GAAP financial measure. The fiscal 2026 guidance includes the Company's estimates for interest expense of approximately $30 to $34 million, a provision for income taxes of approximately $72 to $76 million, and depreciation and amortization expense of approximately $77 to $82 million. The non-GAAP financial measure also excludes certain cash and non-cash expenses or gains. These expenses and gains may be significant and include items such as restructuring expenses (including severance and equipment transfer costs), impairment charges, pension termination charges, acquisition and disposition costs, and certain other items. These expenses for the first nine months of fiscal 2026 are presented on page 8. Estimates of other expenses and gains for the remainder of fiscal 2026 are not available due to the low visibility and unpredictability of these items.Modine Manufacturing CompanyConsolidated statements of operations (unaudited)(In millions, except per share amounts)
Three months ended December 31,
Nine months ended December 31,
2025
2024
2025
2024Net sales
$805.0
$616.8
$2,226.7
$1,936.3Cost of sales
618.9
467.2
1,710.3
1,458.5Gross profit
186.1
149.6
516.4
477.8Selling, general & administrative expenses
89.3
82.0
258.4
250.6Restructuring expenses
7.5
8.3
15.4
18.2Impairment charge
—
—
4.1
—Operating income
89.3
59.3
238.5
209.0Interest expense
(8.9)
(6.2)
(23.0)
(21.1)Pension termination charge
(116.1)
—
(116.1)
—Other (expense) income – net
(2.8)
1.1
(8.5)
(0.7)(Loss) earnings before income taxes
(38.5)
54.2
90.9
187.2Provision for income taxes
(8.3)
(13.0)
(41.2)
(51.8)Net (loss) earnings
(46.8)
41.2
49.7
135.4Net earnings attributable to noncontrolling interest
(0.6)
(0.2)
(1.5)
(1.0)Net (loss) earnings attributable to Modine
$(47.4)
$41.0
$48.2
$134.4
Net (loss) earnings per share attributable to Modine
shareholders – diluted
$(0.90)
$0.76
$0.90
$2.49
Weighted-average shares outstanding – diluted
52.8
53.9
53.7
53.9
Condensed consolidated balance sheets (unaudited)(In millions)
December 31, 2025
March 31, 2025Assets
Cash and cash equivalents
$98.7
$71.6Trade receivables
569.1
478.9Inventories
542.9
340.9Other current assets
93.0
69.8Total current assets
1,303.7
961.2Property, plant and equipment – net
479.6
390.5Intangible assets – net
203.4
146.7Goodwill
293.4
233.9Deferred income taxes
43.6
67.0Other noncurrent assets
159.2
118.3Total assets
$2,482.9
$1,917.6
Liabilities and shareholders' equity
Debt due within one year
$45.1
$54.1Accounts payable
390.3
290.8Other current liabilities
160.8
196.1Total current liabilities
596.2
541.0Long-term debt
570.7
296.7Other noncurrent liabilities
186.2
161.7Total liabilities
1,353.1
999.4Total equity
1,129.8
918.2Total liabilities & equity
$2,482.9
$1,917.6
Modine Manufacturing CompanyCondensed consolidated statements of cash flows (unaudited)(In millions)
Nine months ended December 31,
2025
2024Cash flows from operating activities:
Net earnings
$49.7
$135.4Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
59.1
58.5Impairment charge
4.1
—Pension termination charge
116.1
—Stock-based compensation expense
14.1
16.7Deferred income taxes
0.1
8.5Other – net
6.3
5.2Changes in operating assets and liabilities:
Trade accounts receivable
(56.4)
(11.6)Inventories
(161.3)
13.2Accounts payable
93.8
(19.3)Other assets and liabilities
(71.8)
(48.1)Net cash provided by operating activities
53.8
158.5
Cash flows from investing activities:
Expenditures for property, plant and equipment
(101.2)
(56.3)Payments for business acquisitions, net of cash acquired
(182.4)
(3.4)Other – net
3.5
0.6Net cash used for investing activities
(280.1)
(59.1)
Cash flows from financing activities:
Net increase (decrease) in debt
258.3
(60.6)Purchases of treasury stock
(6.8)
(12.3)Other – net
0.1
0.5Net cash provided by (used for) financing activities
251.6
(72.4)
Effect of exchange rate changes on cash
1.7
(3.2)
Net increase in cash, cash equivalents and restricted cash
27.0
23.8
Cash, cash equivalents and restricted cash – beginning of period
71.9
60.3
Cash, cash equivalents and restricted cash – end of period
$98.9
$84.1
Modine Manufacturing CompanySegment operating results (unaudited)(In millions)
Three months ended December 31,
Nine months ended December 31,
2025
2024
2025
2024Net sales:
Climate Solutions
$544.6
$360.8
$1,396.4
$1,084.5Performance Technologies
266.0
262.2
837.8
868.7Segment total
810.6
623.0
2,234.2
1,953.2Corporate and eliminations
(5.6)
(6.2)
(7.5)
(16.9)Net sales
$805.0
$616.8
$2,226.7
$1,936.3
Three months ended December 31,
Nine months ended December 31,
2025
2024
2025
2024
$'s
% of
sales
$'s
% of
sales
$'s
% of
sales
$'s
% of
sales
Gross profit:
Climate Solutions
$135.1
24.8%
$103.1
28.6%
$360.0
25.8%
$310.2
28.6%Performance Technologies
50.1
18.9%
46.7
17.8%
156.1
18.6%
170.3
19.6%Segment total
185.2
22.9%
149.8
24.0%
516.1
23.1%
480.5
24.6%Corporate and eliminations
0.9
—
(0.2)
—
0.3
—
(2.7)
—
Gross profit
$186.1
23.1%
$149.6
24.3%
$516.4
23.2%
$477.8
24.7%
Three months ended December 31,
Nine months ended December 31,
2025
2024
2025
2024Operating income:
Climate Solutions
$83.2
$62.4
$212.3
$186.9Performance Technologies
25.8
15.8
82.0
78.1Segment total
109.0
78.2
294.3
265.0Corporate and eliminations
(19.7)
(18.9)
(55.8)
(56.0)Operating income
$89.3
$59.3
$238.5
$209.0
Modine Manufacturing CompanyAdjusted financial results (unaudited)(In millions, except per share amounts)
Three months ended December 31,
Nine months ended December 31,
2025
2024
2025
2024Net (loss) earnings
$(46.8)
$41.2
$49.7
$135.4Interest expense
8.9
6.2
23.0
21.1Provision for income taxes
8.3
13.0
41.2
51.8Depreciation and amortization expense
20.4
19.4
59.1
58.5Other expense (income) – net
2.8
(1.1)
8.5
0.7Restructuring expenses (a)
7.5
8.3
15.4
18.2Impairment charge (b)
—
—
4.1
—Pension termination charge (c)
116.1
—
116.1
—Acquisition and disposition costs (d)
2.4
0.1
7.7
2.0Environmental charges (e)
—
0.2
—
0.3Adjusted EBITDA
$119.6
$87.3
$324.8
$288.0
Net (loss) earnings per share attributable to Modine shareholders – diluted
$(0.90)
$0.76
$0.90
$2.49Restructuring expenses (a)
0.11
0.12
0.23
0.29Impairment charge (b)
—
—
0.08
—Pension termination charge (c)
1.92
—
1.92
—Acquisition and disposition costs (d)
0.03
0.04
0.11
0.15Tax law changes (f)
0.01
—
0.07
—Adjusted earnings per share (g)
$1.19
$0.92
$3.31
$2.93
(a)Restructuring expenses primarily consist of employee severance expenses and equipment transfer costs. The tax benefit related to restructuring expenses during the third quarter of fiscal 2026 and fiscal 2025 was $1.5 million and $1.7 million, respectively. The tax benefit related to restructuring expenses during the first nine months of fiscal 2026 and fiscal 2025 was $3.0 million and $2.5 million, respectively.
(b)During the second quarter of fiscal 2026, the Company recorded a $4.1 million non-cash asset impairment charge related to its technical service center and administrative support facility in Germany, which it expects to sell during the fourth quarter of fiscal 2026 or the first quarter of fiscal 2027. There was no tax impact associated with this impairment charge.
(c)During the third quarter of fiscal 2026 and in connection with the previously-announced plan termination, the Company recorded a non-cash pension termination charge of $116.1 million to recognize actuarial losses that were included within accumulated other comprehensive loss on its consolidated balance sheet. The tax benefit related to the pension termination charge was $13.1 million.
(d)During the first nine months of fiscal 2026, the Company incurred $5.3 million of acquisition and integration costs, primarily related to its acquisitions of Climate by Design International and L.B. White. These costs primarily include fees for transaction advisory services, legal, accounting, and other professional services and costs directly associated with integration activities. The acquisition costs also include $1.3 million for the impact of inventory purchase accounting adjustments. The fiscal 2026 costs also include $2.4 million of strategic disposition costs, primarily for legal and other professional services related to the proposed Reverse Morris Trust transaction with Gentherm. The fiscal 2025 costs relate to the Company's acquisition of Scott Springfield Manufacturing, including $1.6 million for the impact of an inventory purchase accounting adjustment. In addition, for purposes of calculating adjusted EPS for the first nine months of fiscal 2025, the Company adjusted for $8.0 million of incremental amortization expense recorded in the Climate Solutions segment associated with an acquired order backlog intangible asset. The tax benefit related to the acquisition and disposition costs during the third quarter of fiscal 2026 and 2025 was $0.7 million and $0.6 million, respectively. The tax benefit related to the acquisition and disposition costs for the first nine months of fiscal 2026 and 2025 was $1.5 million and $2.2 million, respectively.
(e)Environmental charges, including related legal costs, are recorded as SG&A expenses at Corporate and relate to previously-owned facilities.
(f)The provisions of the One Big Beautiful Bill Act, which was enacted in July 2025, negatively impacted the Company's income tax expense for the third quarter and first nine months of fiscal 2026 by $0.6 million and $3.7 million, respectively. The higher income tax expense was primarily due to impacts related to state deferred taxes and the utilization of foreign tax credits.
(g)For calculating GAAP diluted earnings per share for the third quarter of fiscal 2026, the Company excluded 1.0 million of potentially-dilutive securities, since including them would have decreased the loss per share. For calculating adjusted earnings per share, the potentially-dilutive securities were included. As a result, GAAP diluted earnings per share plus the adjustments do not sum to the total adjusted earnings per share for the third quarter of fiscal 2026. Modine Manufacturing CompanySegment adjusted financial results (unaudited)(In millions)
Three months ended December 31, 2025
Three months ended December 31, 2024
Climate
Performance
Corporate and
Climate
Performance
Corporate and
Solutions
Technologies
eliminations
Total
Solutions
Technologies
eliminations
Total
Operating income
$83.2
$25.8
$(19.7)
$89.3
$62.4
$15.8
$(18.9)
$59.3
Depreciation and amortization expense
12.3
7.9
0.2
20.4
12.2
7.1
0.1
19.4
Restructuring expenses (a)
1.9
5.6
—
7.5
1.1
5.5
1.7
8.3
Impairment charge (a)
—
—
—
—
—
—
—
—
Acquisition and disposition costs (a)
—
—
2.4
2.4
—
—
0.1
0.1
Environmental charges (a)
—
—
—
—
—
—
0.2
0.2
Adjusted EBITDA
$97.4
$39.3
$(17.1)
$119.6
$75.7
$28.4
$(16.8)
$87.3
Net sales
$544.6
$266.0
$(5.6)
$805.0
$360.8
$262.2
$(6.2)
$616.8
Adjusted EBITDA margin
17.9%
14.8%
14.9%
21.0%
10.8%
14.2%
Nine months ended December 31, 2025
Nine months ended December 31, 2024
Climate
Performance
Corporate and
Climate
Performance
Corporate and
Solutions
Technologies
eliminations
Total
Solutions
Technologies
eliminations
Total
Operating income
$212.3
$82.0
$(55.8)
$238.5
$186.9
$78.1
$(56.0)
$209.0
Depreciation and amortization expense
34.9
23.2
1.0
59.1
36.7
21.3
0.5
58.5
Restructuring expenses (a)
5.6
9.7
0.1
15.4
2.8
13.7
1.7
18.2
Impairment charge (a)
—
4.1
—
4.1
—
—
—
—
Acquisition and disposition costs (a)
—
—
7.7
7.7
—
—
2.0
2.0
Environmental charges (a)
—
—
—
—
—
—
0.3
0.3
Adjusted EBITDA
$252.8
$119.0
$(47.0)
$324.8
$226.4
$113.1
$(51.5)
$288.0
Net sales
$1,396.4
$837.8
$(7.5)
$2,226.7
$1,084.5
$868.7
$(16.9)
$1,936.3
Adjusted EBITDA margin
18.1%
14.2%
14.6%
20.9%
13.0%
14.9%
(a)See the Adjusted EBITDA reconciliations on the previous page for information on restructuring expenses and other adjustments.
Modine Manufacturing CompanyNet debt (unaudited)(In millions)
December 31, 2025
March 31, 2025Debt due within one year
$45.1
$54.1Long-term debt
570.7
296.7Total debt
615.8
350.8
Less: cash and cash equivalents
98.7
71.6Net debt
$517.1
$279.2
Free cash flow (unaudited)(In millions)
Three months ended December 31,
Nine months ended December 31,
2025
2024
2025
2024Net cash provided by operating activities
$24.7
$60.7
$53.8
$158.5Expenditures for property, plant and equipment
(41.8)
(16.0)
(101.2)
(56.3)Free cash flow
$(17.1)
$44.7
$(47.4)
$102.2
Organic sales and organic sales growth (unaudited)(In millions)
Three months ended December 31, 2025
Three months ended December 31, 2024
Effect of
Sales
Organic
External
Exchange Rate
Effect of
Organic
External
Effect of
Excluding
Sales
Sales
Changes
Acquisitions
Sales
Sales
Dispositions
Dispositions
Growth
Net sales:
Climate Solutions
$542.0
$(9.3)
$(42.8)
$489.9
$360.7
$—
$360.7
36%Performance Technologies
263.0
(7.0)
—
256.0
256.1
—
256.1
—
Net Sales
$805.0
$(16.3)
$(42.8)
$745.9
$616.8
$—
$616.8
21%
Nine months ended December 31, 2025
Nine months ended December 31, 2024
Effect of
Sales
Organic
External
Exchange Rate
Effect of
Organic
External
Effect of
Excluding
Sales
Sales
Changes
Acquisitions
Sales
Sales
Dispositions
Dispositions
Growth
Net sales:
Climate Solutions
$1,393.4
$(20.5)
$(80.9)
$1,292.0
$1,084.3
$—
$1,084.3
19%Performance Technologies
833.3
(13.3)
—
820.0
852.0
—
852.0
(4)%Net Sales
$2,226.7
$(33.8)
$(80.9)
$2,112.0
$1,936.3
$—
$1,936.3
9%
Kathleen Powers
(262) 636-1687
kathleen.t.powers@modine.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/modine-reports-third-quarter-fiscal-2026-results-302678162.htmlSOURCE Modine
Original: Modine Reports Third Quarter Fiscal 2026 Results
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