08/03/2022 | Press release | Distributed by Public on 08/03/2022 14:44
•
|
Net sales of $541.0 million increased 9 percent from the prior year
|
•
|
Operating income of $25.6 million increased $16.9 million from the prior year
|
•
|
Adjusted EBITDA of $42.2 million increased $8.9 million, or 27 percent, from the prior year
|
•
|
Earnings per share of $0.27 compared to $0.04 in the prior year
|
•
|
Adjusted earnings per share of $0.32 compared to $0.20 in the prior year
|
•
|
Climate Solutions segment sales were $244.4 million, compared with $206.5 million one year ago, an increase of 18 percent. On a constant currency basis, sales increased 25 percent from the prior year. This increase was driven by higher sales of heat transfer, HVAC and refrigeration, and data center cooling products. The segment reported gross margin of 20.6 percent, which was 480 basis points higher than the prior year, primarily due to higher sales volume, favorable pricing and improved operating efficiencies. The segment reported operating income of $27.0 million, a 152 percent increase from the prior year. Adjusted EBITDA was $32.4 million, an increase of $15.4 million, or 91 percent, from the prior year.
|
•
|
Performance Technologies segment sales were $304.3 million, compared with $297.1 million one year ago, an increase of 2 percent. On a constant currency basis, sales increased 7 percent. This increase primarily resulted from favorable pricing, including adjustments in response to raw material price increases and higher sales volume. Compared with the prior year, sales of air-cooled and advanced solution products increased and were partially offset by lower sales of liquid-cooled products and the absence of sales from the Austrian air-cooled automotive business, which we sold during the first quarter last year. The segment reported gross margin of 10.8 percent, down 270 basis points from the prior year. This decrease was primarily driven by ongoing inflationary pressures, including significantly higher material prices as compared to the prior year. Margins continue to be temporarily impacted by the lag in our contract provisions for raw material price adjustments and other ongoing pricing negotiations. The segment reported operating income of $7.4 million, an $8.3 million decrease compared to the prior year. Adjusted EBITDA was $17.1 million, a decrease of $3.8 million from the prior year.
|
•
|
Full fiscal year-over-year sales up 6 to 12 percent;
|
•
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Adjusted EBITDA of $180 million to $195 million.
|
Modine Manufacturing Company
Consolidated statements of operations (unaudited)
(In millions, except per share amounts)
|
Three months ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Net sales
|
$
|
541.0
|
$
|
494.6
|
||||
Cost of sales
|
457.6
|
421.4
|
||||||
Gross profit
|
83.4
|
73.2
|
||||||
Selling, general & administrative expenses
|
56.3
|
59.4
|
||||||
Restructuring expenses
|
1.5
|
0.3
|
||||||
Impairment charges (reversals) - net
|
-
|
(1.8
|
)
|
|||||
Loss on sale of assets
|
-
|
6.6
|
||||||
Operating income
|
25.6
|
8.7
|
||||||
Interest expense
|
(4.1
|
)
|
(4.2
|
)
|
||||
Other (expense) income - net
|
(2.3
|
)
|
0.2
|
|||||
Earnings before income taxes
|
19.2
|
4.7
|
||||||
Provision for income taxes
|
(4.9
|
)
|
(1.9
|
)
|
||||
Net earnings
|
14.3
|
2.8
|
||||||
Net earnings attributable to noncontrolling interest
|
-
|
(0.5
|
)
|
|||||
Net earnings attributable to Modine
|
$
|
14.3
|
$
|
2.3
|
||||
Net earnings per share attributable to Modine shareholders - diluted
|
$
|
0.27
|
$
|
0.04
|
||||
Weighted-average shares outstanding - diluted
|
52.4
|
52.5
|
Condensed consolidated balance sheets (unaudited)
(In millions)
|
June 30, 2022
|
March 31, 2022
|
|||||||
Assets
|
||||||||
Cash and cash equivalents
|
$
|
58.7
|
$
|
45.2
|
||||
Trade receivables
|
353.5
|
367.5
|
||||||
Inventories
|
310.8
|
281.2
|
||||||
Other current assets
|
58.6
|
63.7
|
||||||
Total current assets
|
781.6
|
757.6
|
||||||
Property, plant and equipment - net
|
299.5
|
315.4
|
||||||
Intangible assets - net
|
86.3
|
90.3
|
||||||
Goodwill
|
164.6
|
168.1
|
||||||
Deferred income taxes
|
25.7
|
27.2
|
||||||
Other noncurrent assets
|
66.9
|
68.4
|
||||||
Total assets
|
$
|
1,424.6
|
$
|
1,427.0
|
||||
Liabilities and shareholders' equity
|
||||||||
Debt due within one year
|
$
|
28.0
|
$
|
29.4
|
||||
Accounts payable
|
318.5
|
325.8
|
||||||
Other current liabilities
|
149.8
|
139.3
|
||||||
Total current liabilities
|
496.3
|
494.5
|
||||||
Long-term debt
|
360.2
|
348.4
|
||||||
Other noncurrent liabilities
|
121.0
|
126.0
|
||||||
Total liabilities
|
977.5
|
968.9
|
||||||
Total equity
|
447.1
|
458.1
|
||||||
Total liabilities & equity
|
$
|
1,424.6
|
$
|
1,427.0
|
Modine Manufacturing Company
Condensed consolidated statements of cash flows (unaudited)
(In millions)
|
Three months ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Cash flows from operating activities:
|
||||||||
Net earnings
|
$
|
14.3
|
$
|
2.8
|
||||
Adjustments to reconcile net earnings to net cash provided by (used for)
|
||||||||
operating activities:
|
||||||||
Depreciation and amortization
|
13.9
|
13.5
|
||||||
Impairment charges (reversals) - net
|
-
|
(1.8
|
)
|
|||||
Loss on sale of assets
|
-
|
6.6
|
||||||
Stock-based compensation expense
|
1.1
|
1.2
|
||||||
Deferred income taxes
|
(0.9
|
)
|
(3.1
|
)
|
||||
Other - net
|
0.8
|
0.9
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Trade accounts receivable
|
0.7
|
(4.9
|
)
|
|||||
Inventories
|
(38.5
|
)
|
(26.7
|
)
|
||||
Accounts payable
|
6.8
|
9.2
|
||||||
Other assets and liabilities
|
16.3
|
(7.8
|
)
|
|||||
Net cash provided by (used for) operating activities
|
14.5
|
(10.1
|
)
|
|||||
Cash flows from investing activities:
|
||||||||
Expenditures for property, plant and equipment
|
(10.4
|
)
|
(11.4
|
)
|
||||
Payments for disposition of assets
|
-
|
(5.7
|
)
|
|||||
Other - net
|
-
|
1.6
|
||||||
Net cash used for investing activities
|
(10.4
|
)
|
(15.5
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Net increase in debt
|
14.2
|
40.7
|
||||||
Other - net
|
(2.2
|
)
|
(1.3
|
)
|
||||
Net cash provided by financing activities
|
12.0
|
39.4
|
||||||
Effect of exchange rate changes on cash
|
(2.6
|
)
|
0.4
|
|||||
Net increase in cash, cash equivalents and restricted cash
|
13.5
|
14.2
|
||||||
Cash, cash equivalents and restricted cash - beginning of period
|
45.4
|
46.1
|
||||||
Cash, cash equivalents and restricted cash - end of period
|
$
|
58.9
|
$
|
60.3
|
Modine Manufacturing Company
Segment operating results (unaudited)
(In millions)
|
Three months ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Net sales:
|
||||||||
Climate Solutions
|
$
|
244.4
|
$
|
206.5
|
||||
Performance Technologies
|
304.3
|
297.1
|
||||||
Segment total
|
548.7
|
503.6
|
||||||
Corporate and eliminations
|
(7.7
|
)
|
(9.0
|
)
|
||||
Net sales
|
$
|
541.0
|
$
|
494.6
|
Three months ended June 30,
|
||||||||||||||||
2022
|
2021
|
|||||||||||||||
Gross profit:
|
$'s
|
% of sales
|
$'s
|
% of sales
|
||||||||||||
Climate Solutions
|
$
|
50.4
|
20.6
|
%
|
$
|
32.6
|
15.8
|
%
|
||||||||
Performance Technologies
|
33.0
|
10.8
|
%
|
40.2
|
13.5
|
%
|
||||||||||
Segment total
|
83.4
|
15.2
|
%
|
72.8
|
14.5
|
%
|
||||||||||
Corporate and eliminations
|
-
|
-
|
0.4
|
-
|
||||||||||||
Gross profit
|
$
|
83.4
|
15.4
|
%
|
$
|
73.2
|
14.8
|
%
|
Three months ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Operating income:
|
||||||||
Climate Solutions
|
$
|
27.0
|
$
|
10.7
|
||||
Performance Technologies
|
7.4
|
15.7
|
||||||
Segment total
|
34.4
|
26.4
|
||||||
Corporate and eliminations
|
(8.8
|
)
|
(17.7
|
)
|
||||
Operating income
|
$
|
25.6
|
$
|
8.7
|
Modine Manufacturing Company
Adjusted financial results (unaudited)
(In millions, except per share amounts)
|
Three months ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Net earnings
|
$
|
14.3
|
$
|
2.8
|
||||
Interest expense
|
4.1
|
4.2
|
||||||
Provision for income taxes
|
4.9
|
1.9
|
||||||
Depreciation and amortization expense
|
13.9
|
13.5
|
||||||
Other expense (income) - net
|
2.3
|
(0.2
|
)
|
|||||
Restructuring expenses (a)
|
1.5
|
0.3
|
||||||
Impairment charges (reversals) - net (b)
|
-
|
(1.8
|
)
|
|||||
Loss on sale of assets (c)
|
-
|
6.6
|
||||||
Environmental charges (d)
|
1.2
|
3.5
|
||||||
Strategic reorganization and automotive exit costs (e)
|
-
|
2.5
|
||||||
Adjusted EBITDA
|
$
|
42.2
|
$
|
33.3
|
||||
Net earnings per share attributable to Modine shareholders - diluted
|
$
|
0.27
|
$
|
0.04
|
||||
Restructuring expenses (a)
|
0.03
|
-
|
||||||
Loss on sale of assets (c)
|
-
|
0.13
|
||||||
Environmental charges (d)
|
0.02
|
0.07
|
||||||
Strategic reorganization and automotive exit costs (e)
|
-
|
0.05
|
||||||
Tax valuation allowance (f)
|
-
|
(0.09
|
)
|
|||||
Adjusted earnings per share
|
$
|
0.32
|
$
|
0.20
|
(a)
|
Restructuring expenses primarily consist of employee severance expenses related to targeted headcount reductions. There was no tax benefit associated with the restructuring expenses.
|
(b)
|
The net impairment reversal primarily relates to the Company's liquid-cooled automotive business. During the first quarter of fiscal 2022, the Company and the prospective buyer modified the transaction perimeter to exclude certain manufacturing operations. As a result, the Company evaluated the long-lived assets of these businesses and reversed $7.4 million of previously-recorded impairment charges. This impairment reversal was partially offset by $5.6 million of impairment charges recorded during the first quarter of fiscal 2022 related to other assets held for sale. The tax charge related to the net impairment reversal was $1.8 million.
|
(c)
|
The Company's sale of its air-cooled automotive business in Austria closed on April 30, 2021. As a result of the sale, the Company recorded a $6.6 million loss on sale at Corporate during the first quarter of fiscal 2022. There was no tax impact associated with this transaction.
|
(d)
|
Environmental charges, including related legal costs, are recorded as SG&A expenses at Corporate and relate to a previously-owned U.S. manufacturing facility.
|
(e)
|
The fiscal 2022 amounts include costs recorded at Corporate associated with the Company's strategic reorganization and automotive exit strategy. During the first quarter of fiscal 2022, the Company recorded $0.6 million of costs as SG&A expenses related to recruiting new senior management and the Company's implementation of 80/20. In addition, the Company recorded $1.9 million of costs associated with its review of strategic alternatives for its automotive businesses, including costs to prepare the businesses for sale. These costs were primarily recorded as SG&A expenses and primarily consisted of accounting, legal, and IT professional services. There were no tax benefits related to the strategic reorganization or automotive exit strategy costs during the first quarter of fiscal 2022.
|
(f)
|
As of June 30, 2021, the Company reversed a valuation allowance on its deferred tax assets in Italy and, as a result, recorded an income tax benefit of $4.8 million.
|
Modine Manufacturing Company
Segment adjusted financial results (unaudited)
(In millions)
|
Three months ended June 30, 2022
|
Three months ended June 30, 2021
|
|||||||||||||||||||||||||||||||
Climate Solutions
|
Performance Technologies
|
Corporate and eliminations
|
Total
|
Climate Solutions
|
Performance Technologies
|
Corporate and eliminations
|
Total
|
|||||||||||||||||||||||||
Operating income
|
$
|
27.0
|
$
|
7.4
|
$
|
(8.8
|
)
|
$
|
25.6
|
$
|
10.7
|
$
|
15.7
|
$
|
(17.7
|
)
|
$
|
8.7
|
||||||||||||||
Depreciation and amortization expense
|
5.4
|
8.2
|
0.3
|
13.9
|
6.0
|
7.0
|
0.5
|
13.5
|
||||||||||||||||||||||||
Restructuring expenses (a)
|
-
|
1.5
|
-
|
1.5
|
-
|
0.3
|
-
|
0.3
|
||||||||||||||||||||||||
Impairment charges (reversals) - net (a)
|
-
|
-
|
-
|
-
|
0.3
|
(2.1
|
)
|
-
|
(1.8
|
)
|
||||||||||||||||||||||
Loss on sale of assets (a)
|
-
|
-
|
-
|
-
|
-
|
-
|
6.6
|
6.6
|
||||||||||||||||||||||||
Environmental charges (a)
|
-
|
-
|
1.2
|
1.2
|
-
|
-
|
3.5
|
3.5
|
||||||||||||||||||||||||
Strategic reorganization and automotive exit costs (a)
|
-
|
-
|
-
|
-
|
-
|
-
|
2.5
|
2.5
|
||||||||||||||||||||||||
Adjusted EBITDA
|
$
|
32.4
|
$
|
17.1
|
$
|
(7.3
|
)
|
$
|
42.2
|
$
|
17.0
|
$
|
20.9
|
$
|
(4.6
|
)
|
$
|
33.3
|
||||||||||||||
Net sales
|
$
|
244.4
|
$
|
304.3
|
$
|
(7.7
|
)
|
$
|
541.0
|
$
|
206.5
|
$
|
297.1
|
$
|
(9.0
|
)
|
$
|
494.6
|
||||||||||||||
Adjusted EBITDA margin
|
13.3
|
%
|
5.6
|
%
|
7.8
|
%
|
8.2
|
%
|
7.0
|
%
|
6.7
|
%
|
(a)
|
See the Adjusted EBITDA reconciliation on the previous page for information on restructuring expenses and other adjustments.
|
Net debt (unaudited)
(In millions)
|
June 30, 2022
|
March 31, 2022
|
|||||||
Debt due within one year
|
$
|
28.0
|
$
|
29.4
|
||||
Long-term debt
|
360.2
|
348.4
|
||||||
Total debt
|
388.2
|
377.8
|
||||||
Less: cash and cash equivalents
|
58.7
|
45.2
|
||||||
Net debt
|
$
|
329.5
|
$
|
332.6
|
Free cash flow (unaudited)
(In millions)
|
Three months ended June 30,
|
||||||||
2022
|
2021
|
|||||||
Net cash provided by (used for) operating activities
|
$
|
14.5
|
$
|
(10.1
|
)
|
|||
Expenditures for property, plant and equipment
|
(10.4
|
)
|
(11.4
|
)
|
||||
Free cash flow
|
$
|
4.1
|
$
|
(21.5
|
)
|
Net sales - constant currency (unaudited)
(In millions)
|
Three months ended June 30,
|
||||||||||||||||
2022
|
2021
|
|||||||||||||||
Net Sales
|
Effect of Exchange Rate Changes
|
Net Sales -
Constant Currency
|
Net Sales
|
|||||||||||||
Climate Solutions
|
$
|
244.4
|
$
|
13.4
|
$
|
257.8
|
$
|
206.5
|
||||||||
Performance Technologies
|
304.3
|
13.2
|
317.5
|
297.1
|
||||||||||||
Segment total
|
548.7
|
26.6
|
575.3
|
503.6
|
||||||||||||
Corporate and eliminations
|
(7.7
|
)
|
-
|
(7.7
|
)
|
(9.0
|
)
|
|||||||||
Net sales
|
$
|
541.0
|
$
|
26.6
|
$
|
567.6
|
$
|
494.6
|