Q1 surge: Modine (NYSE: MOD) lifts sales 28% to $874.1M
Rhea-AI Filing Summary
Modine Manufacturing reported first‑quarter fiscal 2027 results with net sales up 28% to $874.1 million, driven by strong growth in its targeted businesses. Data Centers revenue rose 90% to $348.6 million and Commercial HVAC grew 22% to $261.6 million, while Performance Technologies declined slightly. Gross profit increased to $182.0 million, but gross margin fell 340 basis points to 20.8% as all segments experienced lower margins, including temporary supply‑chain constraints in Data Centers.
Selling, general and administrative expenses increased 22% to $103.3 million, reflecting growth investments, acquisition-related costs and spending for the planned spin‑off of the Performance Technologies segment. Operating income was $74.8 million, essentially flat year over year, while net earnings rose to $74.3 million and diluted EPS to $1.37; adjusted EPS reached $1.53. Adjusted EBITDA increased to $106.5 million. Operating cash flow improved to $41.4 million, though free cash flow was a $5.0 million use due to higher capex, mainly to expand Data Centers capacity. Net debt increased to $432.9 million. Management cited three consecutive quarters of record order intake and a backlog nearly double year‑ago levels, and reaffirmed fiscal 2027 guidance for 20%–35% net sales growth and $650–$680 million adjusted EBITDA, while confirming that the Performance Technologies Reverse Morris Trust transaction with Gentherm remains on track to close in the fourth calendar quarter of 2026.
Positive
- Q1 net sales increased 28% to $874.1 million, led by 90% growth in Data Centers revenue and 22% growth in Commercial HVAC, driving higher gross profit and earnings.
- Adjusted EPS rose 44% to $1.53 and adjusted EBITDA grew to $106.5 million, while management reaffirmed fiscal 2027 guidance for $650–$680 million adjusted EBITDA and 20%–35% net sales growth.
- Backlog is nearly double year‑ago levels after three consecutive quarters of record order intake, signaling robust demand in the company’s targeted growth businesses.
- Operating cash flow improved to $41.4 million from $27.7 million in the prior‑year quarter, providing greater internal funding capacity despite elevated capital expenditures.
Negative
- Gross margin declined 340 basis points to 20.8%, with lower margins across all three segments and temporary supply‑chain constraints pressuring profitability in the Data Centers business.
- Free cash flow was a $5.0 million use and net debt rose to $432.9 million, up $70.1 million since March 31, 2026, partly due to purchases of treasury stock under the equity compensation plan.
Insights
Analyzing...
8-K Event Classification
Key Figures
Key Terms
Adjusted EBITDA financial
Reverse Morris Trust transaction financial
free cash flow financial
Performance Technologies segment financial
Data Centers segment financial
Earnings Snapshot
Fiscal 2027 guidance reaffirmed: net sales growth of 20% to 35% and adjusted EBITDA of $650 to $680 million, including the Performance Technologies business for the full fiscal year.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
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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) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
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. ☐
Information to be Included in the Report
Item 2.02 Results of Operations and Financial Condition
On July 29, 2026, Modine Manufacturing Company (the “Company”) issued a press release announcing the results of operations and financial condition for the first quarter ended June 30, 2026.
During a conference call scheduled to be held at 11:00 a.m. Eastern Time on July 30, 2026, the Company’s President and Chief Executive Officer, Neil D. Brinker, and Executive Vice President, Chief Financial Officer, Michael B. Lucareli, will discuss the Company’s results for the first quarter ended June 30, 2026.
Attached to this Current Report on Form 8-K as Exhibit 99.1 and 99.2, respectively, is a copy of the Company’s press release in connection with the announcement and a copy of the presentation that the Company intends to use in connection with its first quarter earnings call. The information in this Item 2.02, including Exhibit 99.1 and 99.2, is furnished pursuant to Item 2.02 and 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.
Item 9.01Financial Statements and Exhibits
(d) | Exhibits |
The following exhibits are being furnished herewith:
99.1 | | Press Release dated July 29, 2026 announcing the results of operations and financial condition for the first quarter ended June 30, 2026. |
99.2 | July 30, 2026 earnings call presentation. | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL) |
2
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 | |||
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| | By: | /s/ Neil D. Brinker |
| Neil D. Brinker | ||
| President and Chief Executive Officer | ||
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Date: July 29, 2026 |
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3
Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
Modine Reports First Quarter Fiscal 2027 Results
Continued strength in core growth engines supports reaffirmed Fiscal 2027 outlook
Racine, WI – July 29, 2026 – Modine (NYSE: MOD), a diversified global leader in thermal management technology and solutions, today reported financial results for the quarter ended June 30, 2026.
First Quarter Highlights:
| ● | Net sales of $874.1 million increased $191.3 million, or 28 percent, from the prior year |
| ● | Net earnings of $74.3 million increased $22.6 million, or 44 percent, from the prior year |
| ● | Adjusted EBITDA of $106.5 million increased $5.1 million, or 5 percent, from the prior year |
| ● | Earnings per share of $1.37 increased $0.42, or 44 percent, from the prior year |
| ● | Adjusted earnings per share of $1.53 increased $0.47, or 44 percent, from the prior year |
“Our targeted growth businesses continued to deliver strong, sustainable year-over-year top-line improvements, including Data Centers and Commercial HVAC revenue expansion of 90% and 22%, respectively,” said Modine President and Chief Executive Officer, Neil D. Brinker. “As anticipated, our first quarter was impacted by the supply chain constraints we discussed last quarter, which limited production and temporarily reduced margins within our Data Centers segment. We are taking decisive actions to secure supply, including working closely with our partners to lock in volume requirements while simultaneously qualifying additional suppliers. These initiatives are yielding positive results, driving sequential volume and margin improvements as the quarter progressed. Our team continues to drive operational efficiency and ramp production across our manufacturing footprint, keeping us fully on track to meet future customer commitments and deliver on our full-year financial outlook.”
First Quarter Financial Results
Net sales increased 28 percent to $874.1 million, compared with $682.8 million in the prior year. Sales growth was driven by higher sales in the Data Centers and Commercial HVAC segments, partially offset by lower sales in the Performance Technologies segment.
Gross profit increased 10 percent to $182.0 million and gross margin decreased by 340 basis points to 20.8 percent. Gross profit increased in the Data Centers and Commercial HVAC segments, while Performance Technologies experienced a decline in gross profit. The decrease in gross margin resulted from lower gross margins in all three business segments, as further discussed below.
Selling, general and administrative (“SG&A”) expenses increased 22 percent to $103.3 million, but decreased as a percentage of sales. The increase in SG&A expenses was primarily due to higher expenses in the Data Centers segment to support growth, incremental expenses from acquisitions in the Commercial HVAC segment, costs related to the pending spin-off of the Performance Technologies segment, and higher expenses related to incentive compensation.
Operating income decreased 1 percent to $74.8 million. The decrease was driven by higher SG&A expenses to support growth and to prepare for the spin-off of the Performance Technologies segment, partially offset by higher gross profit on higher sales volume, as compared to the prior year. The Company recorded $3.9 million of restructuring expenses during the quarter, primarily severance expenses related to headcount reductions and costs related to equipment transfers. In addition, the Company incurred $7.1 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 benefit or provision for income taxes, and depreciation and amortization expense, was $106.5 million, an increase of $5.1 million, or 5 percent compared to the prior year.
Earnings per share was $1.37, compared with $0.95 in the prior year, an increase of $0.42 or 44 percent. Adjusted earnings per share was $1.53, compared with adjusted earnings per share of $1.06 in the prior year, an increase of $0.47 or 44 percent. This included a favorable income tax benefit related to shares issued for stock-based incentive compensation awards during the quarter, which is expected to be largely offset by the negative impact of nondeductible compensation within the fiscal year.
1
First Quarter Segment Review
| ● | Data Centers segment sales were $348.6 million, compared with $183.7 million one year ago, an increase of 90 percent. This increase was primarily driven by higher sales to hyperscale customers in North America. The segment reported gross margin of 20.2 percent, which was 960 basis points lower than the prior year. This decrease was primarily due to higher expenses related to the capacity expansion in North America combined with the temporary impact of production inefficiencies due to supply chain constraints, higher material costs, and higher warranty expense, as the prior year benefited from the favorable settlement of a warranty claim. SG&A expenses decreased as a percentage of sales due to the significant increase in revenue. The segment reported operating income of $46.3 million, a 33 percent increase from the prior year, and adjusted EBITDA of $51.7 million, an increase of 27 percent from the prior year. |
| ● | Commercial HVAC segment sales were $261.6 million, compared with $214.2 million one year ago, an increase of 22 percent. This increase was primarily driven by higher coil sales to data center customers and $19.7 million of incremental sales from acquired businesses. The segment reported gross margin of 24.4 percent, which was 280 basis points lower than the prior year, primarily due to unfavorable sales mix and temporary inefficiencies due to production transfers. The segment reported operating income of $31.4 million, a 2 percent decrease from the prior year, and adjusted EBITDA of $41.6 million, a 7 percent increase from the prior year. |
| ● | Performance Technologies segment sales were $277.8 million, compared with $285.5 million one year ago, a decrease of 3 percent. This decrease primarily resulted from lower sales to automotive and commercial vehicle customers due to market weakness, partially offset by higher sales to power generation customers. The segment reported gross margin of 17.6 percent, which was 60 basis points lower than the prior year, primarily due to higher material and tariff costs. The segment reported operating income of $27.6 million, a 4 percent increase from the prior year, and adjusted EBITDA of $36.2 million, a 3 percent decrease from the prior year. |
Balance Sheet & Liquidity
Net cash provided by operating activities for the quarter ended June 30, 2026, was $41.4 million, an increase of $13.7 million compared to the prior year. Free cash flow for the quarter ended June 30, 2026, was a use of $5.0 million, a decrease of $5.2 million from the prior year. This decrease was primarily due to higher capital expenditures to increase production capacity in the Data Centers segment, partially offset by favorable net changes in working capital. Cash payments for restructuring activities and disposition costs totaled $14.9 million during the quarter ended June 30, 2026.
Total debt was $528.2 million as of June 30, 2026. Cash and cash equivalents totaled $95.3 million as of June 30, 2026. Net debt was $432.9 million as of June 30, 2026, an increase of $70.1 million from the end of fiscal 2026. This increase resulted from purchases of stock in conjunction with our equity compensation plan. Under this plan, participants have the option to sell back shares of their vested equity awards to satisfy individual tax withholding obligations. These repurchased shares are held as treasury stock, which reduces the number of shares outstanding used to calculate earnings per share.
Outlook
“Our financial outlook for Fiscal 2027 remains unchanged, and we remain confident in our ability to deliver another year of record-breaking results,” said Modine President and Chief Executive Officer, Neil D. Brinker. “In response to the near-term supply chain challenges in our Data Centers segment, we are taking decisive actions to resolve these bottlenecks and have already made significant progress. Demand for our products remains robust as evidenced by three consecutive quarters of record order intake leading to our backlog nearly doubling over the past year. Now we are focused on operational execution across the enterprise, which will allow us to deliver on our near- and long-term goals. Simultaneously, we are also progressing on our long-term strategic transformation. Our planned spin-off and merger of the Performance Technologies business with Gentherm remains firmly on schedule to close in the fourth calendar quarter of this year, having cleared several major milestones this past quarter.”
The current full-year guidance remains unchanged and continues to reflect the Performance Technologies business for the entirety of fiscal 2027. Following the close of the transaction (expected in the fourth quarter of calendar 2026), Modine will issue an updated outlook reflecting the continuing business.
Fiscal 2027 | Current Outlook |
Net Sales | +20% to 35% |
Adjusted EBITDA | $650 to $680 million |
2
Conference Call and Webcast
Modine will conduct a conference call and live webcast, with a slide presentation, on Thursday, July 30, 2026, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to discuss its first quarter fiscal year 2027 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 audio and slides will be available on the Investor Relations section of the Modine website at www.modine.com on or after July 30, 2026. A call-in replay will be available through midnight on August 6, 2026, at 877-660-6853, (international replay 201-612-7415); Conference ID# 13761279. The Company will post a transcript of the call on its website on or after August 3, 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 segment 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 segment, 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.
3
Non-GAAP Financial Disclosures
Adjusted 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 share
Diluted 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 debt
The 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 measure
The 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 $24 to $27 million, a provision for income taxes of approximately $130 to $140 million, and depreciation and amortization expense of approximately $87 to $92 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. These expenses for the first three months of fiscal 2027 are presented on page 8. In connection with the pending Reverse Morris Trust transaction with Gentherm, the Company expects to incur approximately $25 to $35 million of additional costs during the remainder of fiscal 2027, primarily for transaction advisory, legal, accounting, tax and other professional services. Estimates of other expenses and gains for the remainder of fiscal 2027 are not available due to the low visibility and unpredictability of these items.
4
Modine Manufacturing Company
Consolidated statements of operations (unaudited)
(In millions, except per share amounts)
| | Three months ended June 30, | ||||
| | 2026 | | 2025 | ||
Net sales | | $ | 874.1 | | $ | 682.8 |
Cost of sales | |
| 692.1 | |
| 517.4 |
Gross profit | |
| 182.0 | |
| 165.4 |
Selling, general & administrative expenses | |
| 103.3 | |
| 84.9 |
Restructuring expenses | |
| 3.9 | |
| 4.8 |
Operating income | |
| 74.8 | |
| 75.7 |
Interest expense | |
| (6.4) | |
| (5.8) |
Other income (expense) – net | |
| 0.2 | |
| (4.2) |
Earnings before income taxes | |
| 68.6 | |
| 65.7 |
Benefit (provision) for income taxes | |
| 5.7 | |
| (14.0) |
Net earnings | |
| 74.3 | |
| 51.7 |
Net earnings attributable to noncontrolling interest | |
| (0.4) | |
| (0.5) |
Net earnings attributable to Modine | | $ | 73.9 | | $ | 51.2 |
| | | | | | |
Net earnings per share attributable to Modine shareholders – diluted | | $ | 1.37 | | $ | 0.95 |
| | | | | | |
Weighted-average shares outstanding – diluted | |
| 54.0 | |
| 53.7 |
Condensed consolidated balance sheets (unaudited)
(In millions)
| | June 30, 2026 | | March 31, 2026 | ||
Assets | | | | | | |
Cash and cash equivalents | | $ | 95.3 |
| $ | 73.5 |
Trade receivables | |
| 659.9 |
| | 731.0 |
Inventories | |
| 609.0 |
| | 506.1 |
Other current assets | |
| 162.7 |
| | 105.5 |
Total current assets | |
| 1,526.9 |
| | 1,416.1 |
Property, plant and equipment – net | |
| 536.1 |
| | 520.9 |
Intangible assets – net | |
| 190.2 |
| | 197.0 |
Goodwill | |
| 290.2 |
| | 292.1 |
Deferred income taxes | |
| 88.7 |
| | 85.3 |
Other noncurrent assets | |
| 163.3 |
| | 163.2 |
Total assets | | $ | 2,795.4 |
| $ | 2,674.6 |
| | | | | | |
Liabilities and shareholders’ equity | | | | | | |
Debt due within one year | | $ | 52.0 | | $ | 51.4 |
Accounts payable | |
| 508.9 | |
| 464.8 |
Other current liabilities | |
| 188.9 | |
| 212.7 |
Total current liabilities | |
| 749.8 | |
| 728.9 |
Long-term debt | |
| 476.2 | |
| 384.9 |
Other noncurrent liabilities | |
| 359.6 | |
| 358.0 |
Total liabilities | |
| 1,585.6 | |
| 1,471.8 |
Total equity | |
| 1,209.8 | |
| 1,202.8 |
Total liabilities & equity | | $ | 2,795.4 | | $ | 2,674.6 |
5
Modine Manufacturing Company
Condensed consolidated statements of cash flows (unaudited)
(In millions)
| | Three months ended June 30, | ||||
| | 2026 | | 2025 | ||
Cash flows from operating activities: | | | | | | |
Net earnings | | $ | 74.3 | | $ | 51.7 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | | | | | | |
Depreciation and amortization | |
| 20.7 | |
| 19.0 |
Stock-based compensation expense | |
| 8.0 | |
| 5.3 |
Deferred income taxes | |
| (3.8) | |
| 0.7 |
Other – net | |
| 1.1 | |
| 2.6 |
Changes in operating assets and liabilities: | | | | | | |
Trade accounts receivable | |
| 68.3 | |
| (10.6) |
Inventories | |
| (105.4) | |
| (61.6) |
Accounts payable | |
| 58.0 | |
| 46.7 |
Other assets and liabilities | | | (79.8) | | | (26.1) |
Net cash provided by operating activities | |
| 41.4 | |
| 27.7 |
| | | | | | |
Cash flows from investing activities: | | | | | | |
Expenditures for property, plant and equipment | |
| (46.4) | |
| (27.5) |
Payments for business acquisitions, net of cash acquired | | | — | | | (119.0) |
Other – net | |
| — | |
| 2.5 |
Net cash used for investing activities | |
| (46.4) | |
| (144.0) |
| | | | | | |
Cash flows from financing activities: | | | | | | |
Net increase in debt | |
| 91.9 | |
| 172.0 |
Purchases of treasury stock | | | (64.6) | | | (5.1) |
Other – net | |
| (0.2) | |
| — |
Net cash provided by financing activities | |
| 27.1 | |
| 166.9 |
| | | | | | |
Effect of exchange rate changes on cash | |
| (0.3) | |
| 2.2 |
| | | | | | |
Net increase in cash, cash equivalents and restricted cash | |
| 21.8 | |
| 52.8 |
| | | | | | |
Cash, cash equivalents and restricted cash – beginning of period | |
| 73.7 | |
| 71.9 |
Cash, cash equivalents and restricted cash – end of period | | $ | 95.5 | | $ | 124.7 |
6
Modine Manufacturing Company
Segment operating results (unaudited)
(In millions)
| | Three months ended June 30, | ||||
| | 2026 | | 2025 | ||
Net sales: | | | | | | |
Data Centers | | $ | 348.6 | | $ | 183.7 |
Commercial HVAC | | | 261.6 | | | 214.2 |
Performance Technologies | |
| 277.8 | |
| 285.5 |
Segment total | |
| 888.0 | |
| 683.4 |
Corporate and eliminations | |
| (13.9) | |
| (0.6) |
Net sales | | $ | 874.1 | | $ | 682.8 |
| | Three months ended June 30, |
| |||||||||
| | 2026 | | | 2025 |
| ||||||
| | $’s | | % of sales | | | $’s | | % of sales |
| ||
Gross profit: | | | | | | | | | | | | |
Data Centers | | $ | 70.3 | | 20.2 | % | | $ | 54.7 |
| 29.8 | % |
Commercial HVAC | | | 63.9 | | 24.4 | % | | | 58.2 | | 27.2 | % |
Performance Technologies | |
| 48.8 | | 17.6 | % | |
| 51.9 |
| 18.2 | % |
Segment total | |
| 183.0 | | 20.6 | % | |
| 164.8 |
| 24.1 | % |
Corporate and eliminations | |
| (1.0) | | — | | |
| 0.6 |
| — | |
Gross profit | | $ | 182.0 | | 20.8 | % | | $ | 165.4 |
| 24.2 | % |
| | Three months ended June 30, | ||||
| | 2026 | | 2025 | ||
Operating income: | | | | | | |
Data Centers | | $ | 46.3 | | $ | 34.7 |
Commercial HVAC | | | 31.4 | | | 32.2 |
Performance Technologies | |
| 27.6 | |
| 26.5 |
Segment total | |
| 105.3 | |
| 93.4 |
Corporate and eliminations | |
| (30.5) | |
| (17.7) |
Operating income | | $ | 74.8 | | $ | 75.7 |
7
Modine Manufacturing Company
Adjusted financial results (unaudited)
(In millions, except per share amounts)
| | Three months ended June 30, | ||||
| | 2026 | | 2025 | ||
Net earnings | | $ | 74.3 | | $ | 51.7 |
Interest expense | |
| 6.4 | |
| 5.8 |
(Benefit) provision for income taxes | |
| (5.7) | |
| 14.0 |
Depreciation and amortization expense | |
| 20.7 | |
| 19.0 |
Other (income) expense – net | |
| (0.2) | |
| 4.2 |
Restructuring expenses (a) | |
| 3.9 | |
| 4.8 |
Disposition costs (b) | | | 7.1 | | | — |
Acquisition and integration costs (c) | |
| — | |
| 1.9 |
Adjusted EBITDA | | $ | 106.5 | | $ | 101.4 |
| | | | | | |
Net earnings per share attributable to Modine shareholders – diluted | | $ | 1.37 | | $ | 0.95 |
Restructuring expenses (a) | |
| 0.06 | |
| 0.08 |
Disposition costs (b) | | | 0.10 | | | — |
Acquisition and integration costs (c) | | | — | | | 0.03 |
Adjusted earnings per share | | $ | 1.53 | | $ | 1.06 |
____ | | | | | | |
| (a) | Restructuring expenses primarily consist of employee severance expenses and equipment transfer costs. The tax benefit related to restructuring expenses during both the first quarter of fiscal 2027 and fiscal 2026 was $0.7 million. |
| (b) | Disposition costs primarily relate to the pending 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 first quarter of fiscal 2027 was $1.7 million. |
| (c) | Acquisition and integration costs primarily related to the Company’s fiscal 2026 acquisitions, including L.B. White, AbsolutAire, and Climate by Design International. The costs primarily included fees for legal, accounting, and other professional services and costs directly associated with integration activities. In addition, the adjustment for the first quarter of fiscal 2026 includes $0.2 million for the impact of an inventory purchase accounting adjustment. The tax benefit related to the acquisition-related costs and adjustments during the first quarter of fiscal 2026 was $0.4 million. |
8
Modine Manufacturing Company
Segment adjusted financial results (unaudited)
(In millions)
| Three months ended June 30, 2026 | | Three months ended June 30, 2025 |
| ||||||||||||||||||||||||||
| Data | | Commercial | | Performance | | Corporate and | | | | | Data | | Commercial | | Performance | | Corporate and | | | |
| ||||||||
| Centers | | HVAC | | Technologies | | eliminations | | Total | | Centers | | HVAC | | Technologies | | eliminations | | Total |
| ||||||||||
Operating income | $ | 46.3 | | $ | 31.4 | | $ | 27.6 | | $ | (30.5) | | $ | 74.8 | | $ | 34.7 | | $ | 32.2 | | $ | 26.5 | | $ | (17.7) | | $ | 75.7 | |
Depreciation and amortization expense |
| 5.4 | | | 8.0 | | | 6.9 | | | 0.4 | |
| 20.7 | |
| 5.7 | | | 5.5 | |
| 7.5 | |
| 0.3 | |
| 19.0 | |
Restructuring expenses (a) |
| — | | | 2.2 | | | 1.7 | | | — | |
| 3.9 | |
| 0.2 | | | 1.1 | |
| 3.5 | |
| — | |
| 4.8 | |
Disposition costs (a) |
| — | | | — | | | — | | | 7.1 | |
| 7.1 | |
| — | | | — | |
| — | |
| — | |
| — | |
Acquisition and integration costs (a) | | — | | | — | | | — | | | — | | | — | |
| — | | | — | |
| — | |
| 1.9 | |
| 1.9 | |
Adjusted EBITDA | $ | 51.7 | | $ | 41.6 | | $ | 36.2 | | $ | (23.0) | | $ | 106.5 | | $ | 40.6 | | $ | 38.8 | | $ | 37.5 | | $ | (15.5) | | $ | 101.4 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net sales | $ | 348.6 | | $ | 261.6 | | $ | 277.8 | | $ | (13.9) | | $ | 874.1 | | $ | 183.7 | | $ | 214.2 | | $ | 285.5 | | $ | (0.6) | | $ | 682.8 | |
Adjusted EBITDA margin |
| 14.8 | % | | 15.9 | % |
| 13.0 | % |
| | |
| 12.2 | % |
| 22.1 | % | | 18.1 | % |
| 13.1 | % |
| | |
| 14.9 | % |
____ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (a) | See the Adjusted EBITDA reconciliations on the previous page for information on restructuring expenses and other adjustments. |
9
Modine Manufacturing Company
Net debt (unaudited)
(In millions)
| | June 30, 2026 | | March 31, 2026 | ||
Debt due within one year | | $ | 52.0 | | $ | 51.4 |
Long-term debt | |
| 476.2 | |
| 384.9 |
Total debt | |
| 528.2 | |
| 436.3 |
| | | | | | |
Less: cash and cash equivalents | |
| 95.3 | |
| 73.5 |
Net debt | | $ | 432.9 | | $ | 362.8 |
Free cash flow (unaudited)
(In millions)
|
| Three months ended June 30, | ||||
| | 2026 | | 2025 | ||
Net cash provided by operating activities | | $ | 41.4 | | $ | 27.7 |
Expenditures for property, plant and equipment | |
| (46.4) | |
| (27.5) |
Free cash flow | | $ | (5.0) | | $ | 0.2 |
Organic sales and organic sales growth (unaudited)
(In millions)
| | Three months ended June 30, 2026 | | Three months ended June 30, 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: | | | | | | | | | | | | | | | | | | | | | | | |
|
Data Centers | | $ | 348.4 | | $ | — | | $ | — | | $ | 348.4 | | $ | 183.6 | | $ | — | | $ | 183.6 | | 90 | % |
Commercial HVAC | | | 247.9 | | | (2.0) | | | (19.7) | | | 226.2 | | | 213.7 | | | — | | | 213.7 | | 6 | % |
Performance Technologies | |
| 277.8 | |
| (4.1) | |
| — | |
| 273.7 | |
| 285.5 | |
| — | |
| 285.5 | | (4) | % |
Net Sales | | $ | 874.1 | | $ | (6.1) | | $ | (19.7) | | $ | 848.3 | | $ | 682.8 | | $ | — | | $ | 682.8 | | 24 | % |
10
SOURCE: Modine
Kathleen Powers
(262) 636-1687
kathleen.t.powers@modine.com
11
Exhibit 99.2
| First Quarter Fiscal 2027 July 30, 2026 |
| NEIL BRINKER President and Chief Executive Officer MICK LUCARELI Executive Vice President and Chief Financial Officer KATHY POWERS Vice President, Treasurer, and Investor Relations 2 |
| Forward-Looking Statements 3 This presentation 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 uncertaintiesinclude, 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 segment 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 segment, 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 abilityto 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 presentation, and we do not assume any obligation to update any forward-looking statements. |
| Data Centers 4 ▪ Decisive actions taken to addressshortages of key components during the quarter – Working with suppliers to expand capacity to meet market demand – Negotiating commitments to secure volume for FY27 and beyond ▪ Activated contingency plans, including resequencing capacity rollouts ▪ Labor inefficiencies and lower overhead absorption caused by lower-than-planned capacity utilization ▪ Demand for our products continues to be unprecedented, with another record quarter of order intake ▪ New product launches have been a commercial success ▪ Addressing periodic growth challenges, but the revenue and earnings growth continues at high double-digit rates |
| Commercial HVAC 5 ▪ New, strong, proven leader driving a renewed focus on 80/20 ▪ Commercial HVAC revenue increased 22% driven by prior year acquisitions and growth in coils sales to data center customers ▪ Strategic actions underway to optimize footprint in support of our 80/20 focus and to improve our overall cost structure – Consolidating the manufacturing footprint for several product lines at the CDI location in Owatonna, MN – Completed consolidation of North American coil production in Grenada, MS and Juarez, Mexico to allow for capacity expansion for chiller lines in Grenada ▪ Taking commercial actions to recover inflationary cost increases, which will further improve margins |
| Performance Technologies ▪ Focused on preparing for the pending spin-off and merger with Gentherm ▪ Passed several milestones over the last quarter ▪ Gentherm completed S-4 submissions to the SEC; will request shareholder approval ▪ Modine completed filing required for an IRS determination letter ▪ Overall, we remain on track; expecting to close this transaction in calendar Q4 6 |
| Q1 FY26 Q1 FY27 Net Sales Data Centers 7 $183.7 $348.6 (In millions) Americas EMEA 112% Q1 FY26 Q1 FY27 Adjusted EBITDA & EBITDA Margin* $40.6 $51.7 22.1% 14.8% ▪ 27% increase in Adjusted EBITDA driven by strong sales growth ▪ As expected, 1Q27 margin declined from the prior year – ~150 bps impact from Q1 FY26 warranty settlement – ~450-550 bps impact from excess labor and unfavorable overhead absorption driven by production ramp and supply chain shortages – The balance due to unfavorable product mix and higher material costs; related to supply chain shortages and commodities ▪ Anticipating full-year earnings growth in excess of 85%, based on the current revenue and margin outlook * See appendix for the full GAAP income statement and Non-GAAP reconciliations 18% Strong growth across hyperscale customers, driven by a growing order book Growth driven by hyperscale and colocation customers |
| Q1 FY26 Q1 FY27 Net Sales Commercial HVAC 8 $214.2 $261.6 (In millions) HVAC Technologies Heat Transfer Solutions Q1 FY26 Q1 FY27 Adjusted EBITDA & EBITDA Margin* $38.8 $41.6 18.1% 15.9% ▪ Adjusted EBITDA growth from organic sales growth and acquisitions ▪ Q1 FY27 margin declined 220 bps from the prior year – Mostly due to a negative business mix; including the impact from acquisitions along with a higher revenue mix of relatively lower margin coils products ▪ Expecting more favorable margin comparisons beginning in Q2, driven by new 80/20 initiatives ▪ Anticipating revenue and earnings growth to continue with incremental improvement in adjusted EBITDA margin each quarter * See appendix for the full GAAP income statement and Non-GAAP reconciliations 7% 45% Acquisitions contributed $20M, along with higher heating product sales Growth primarily driven by higher demand for coils by data center customers |
| Q1 FY26 Q1 FY27 Adjusted EBITDA & EBITDA Margin* Q1 FY26 Q1 FY27 Net Sales Performance Technologies $285.5 $277.8 $37.5 $36.2 (In millions) Heavy-Duty Equipment On-Highway Applications ▪ Slightly lower revenue; driven mostly by lower volumes and expected tariff refunds to customers ▪ 10 bps decline in adjusted EBITDA margin mainly due to lower volume and the lag effect from rising commodity metal costs; partially offset by the recovery of tariffs, net of refunds to our customers ▪ Cost saving initiatives contributed a $2M reduction in SG&A expenses ▪ The segment remains focused on delivering higher margins and earnings this fiscal year -5% 13.1% 13.0% * See appendix for the full GAAP income statement and Non-GAAP reconciliations 9 1% Primarily driven by higher GenSet revenue, partially offset by lower sales to agricultural customers Lower sales to automotive and commercial vehicle customers |
| Q1 FY26 Q1 FY27 Adjusted EBITDA & EBITDA Margin* Q1 FY26 Q1 FY27 Net Sales Financial Review (In millions) Q1 FY27 Q1 FY26 Net Sales $874.1 $682.8 Gross Profit 182.0 165.4 % of net sales 20.8% 24.2% SG&A expenses 103.3 84.9 % of net sales 11.8% 12.4% Operating Income 74.8 75.7 % of net sales 8.6% 11.1% Adjusted EBITDA* 106.5 101.4 % of net sales 12.2% 14.9% Adjusted EPS* $1.53 $1.06 (In millions) $682.8 $874.1 $101.4 $106.5 ▪ Sales growth driven by Data Centers and Commercial HVAC acquisitions and coils products ▪ Gross profit increased 10%; driven by higher sales volume; gross margin negatively impacted by lower margins in all three business segments ▪ SG&A declined 60 bps as a percent of sales as we invested to support strong growth in Data Centers while using 80/20 to redeploy resources across all areas of the company; included $7.1M of disposition costs for PT spin-off ▪ Adjusted EBITDA growth of 5% and Adjusted EPS increased 44% 14.9% 12.2% * See appendix for the full GAAP income statement and Non-GAAP reconciliations 10 |
| Cash Flow and Metrics Cash Flow and Metrics Q1 FY27 Free Cash Flow ($5 million) Net Debt (as of June 30) $433 million Leverage Ratio (as of June 30) 0.9x Capital Expenditures $46 million ▪ Negative free cash flow driven by higher contract assets related to revenue recognition, along with timing of cash taxes and incentive compensation, partially offset by favorable working capital; includes $14.9M of restructuring/disposition related costs ▪ Net debt increased $70M from the prior fiscal year end to June 30, driven by the repurchase of treasury stock in connection with Modine’s share-based compensation program to cover individual tax withholding requirements for participants ▪ Leverage ratio remains low at 0.9x, anticipating further decrease by fiscal year end ▪ Balance sheet remains strong to support both organic growth and acquisition initiatives * See appendix for the full GAAP income statement and Non-GAAP reconciliations 11 Modine Maintains Strong Balance Sheet & Liquidity |
| Fiscal 2027 Outlook Metrics Guidance Comments Net Sales +20% to +35% $3.82B to $4.29B Adjusted EBITDA* $650M to $680M +38% to +44% FY27 Segment Sales Outlook Data Centers +60% to +80% Commercial HVAC +5% to +10% Performance Technologies Flat to +5% * See appendix for the full GAAP income statement and Non-GAAP reconciliations Reaffirming our Revenue and Earnings Outlook ▪ Modine’s outlook continues to support record breaking results for FY27, a 5th consecutive year of record results ▪ Guidance includes PT business for the full fiscal year, will update once the pending transaction closes ▪ Anticipating revenue growth of 20% to 35% – Expecting Data Center sales to grow 60-80% including above market growth in North America – Expecting Commercial HVAC sales to benefit from growth in our Commercial Cooling and Ventilation, heating and coils businesses – Expecting Performance Technologies to benefit from growth in GenSet programs, with other markets generally flat ▪ 38% to 44% Adjusted EBITDA growth, driven by the combination of high double-digit revenue growth and margin increases in all three segments ▪ Updated interest, depreciation, income tax, capital expenditures and free cash flow assumptions included in the appendix 12 |
| Appendix 13 |
| GAAP Income Statement 14 |
| Non-GAAP Reconciliations* 15 * See the footnotes on slide 16 for additional information regarding these adjustments. |
| Non-GAAP Reconciliations 16 |
| Non-GAAP Reconciliations 17 (a) See the adjusted financial results on slide 15 and related footnotes on slide 16 for additional information regarding these adjustments. |
| Non-GAAP Reconciliations 18 |
| Non-GAAP Reconciliations 19 |
| Forward-Looking Non-GAAP Financial Measures 20 The Company’s fiscal 2027 guidance includes adjusted EBITDA and free cash flow, which are non-GAAP financial measures. The fiscal 2027 guidance for adjusted EBITDA includes the Company’s estimates for interest expense of approximately $24 to $27 million, a provision for income taxes of approximately $130 to $140 million, and depreciation and amortization expense of approximately $87 to $92 million. This 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. These expenses for the first three months of fiscal 2027 are presented on slide 15. In connection with the pending Reverse Morris Trust transaction with Gentherm, the Company expects to incur approximately $25 to $35 million of additional costs during the remainder of fiscal 2027, primarily for transaction advisory, legal, accounting, tax and other professional services. Estimates of other expenses and gains for the remainder of fiscal 2027 are not available due to the low visibility and unpredictability of these items. The Company expects free cash flow for fiscal 2027 to be in the range of 4 to 6 percent as a percentage of net sales. The Company estimates capital expenditures will total approximately $150 to $200 million in fiscal 2027. |
