Modine (MOD) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.Over the past month, shares of this heating and cooling products maker have returned -13.5%, compared to the Zacks S&P 500 composite's -1.7% change. During this period, the Zacks Automotive - Original Equipment industry, which Modine falls in, has lost 1.9%. The key question now is: What could be the stock's future dir ...

Adjusted EBITDA & Q3 FY23 Q3 FY24 EBITDA Margin* $73.9 9.5% 13.2% ▪ Strong conversion of 530 bps gross margin improvement, driven by higher average selling prices and ongoing 80/20 initiatives * See appendix for the full GAAP income statement and Non-GAAP reconciliations Cash Flow and Metrics Capital Expenditures $44 million ▪ Leverage ratio improved from 0.8x to 0.7x during the quarter * See appendix for the full GAAP income statement and Non-GAAP reconciliations Raising Adjusted EBITDA Outlook ▪ Expect Da ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements.) Presents unaudited condensed consolidated financial statements for Q3 and nine months ended Dec 31, 2023, including statements of operations, balance sheets, cash flows, and detailed notes [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q3 FY2024 net sales flat, but gross profit and operating income rose significantly, leading to an 81.0% increase in net earnings attributable to Modine Consolidated Statements of Operations Highlights (in millions, except per share amounts) | Metric | Q3 2023 | Q3 2022 | YoY Change | Nine Months 2023 | Nine Months 2022 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $561.4 | $560.0 | +0.3% | $1,804.3 | $1,679.8 | +7.4% | | **Gross profit** | $127.3 | $97.6 | +30.4% | $390.3 | $277.2 | +40.8% | | **Operating income** | $61.7 | $39.5 | +56.2% | $193.9 | $101.9 | +90.3% | | **Net earnings attributable to Modine** | $44.4 | $24.5 | +81.2% | $135.7 | $63.2 | +114.7% | | **Diluted EPS** | $0.83 | $0.46 | +80.4% | $2.55 | $1.20 | +112.5% | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $1,651.4 million by Dec 31, 2023, driven by cash, while total liabilities decreased, boosting shareholders' equity by 22.6% Key Balance Sheet Items (in millions) | Account | Dec 31, 2023 | Mar 31, 2023 | Change | | :--- | :--- | :--- | :--- | | **Cash and cash equivalents** | $149.7 | $67.1 | +$82.6 | | **Total current assets** | $918.2 | $846.4 | +$71.8 | | **Total assets** | $1,651.4 | $1,565.9 | +$85.5 | | **Total current liabilities** | $475.5 | $507.1 | -$31.6 | | **Long-term debt** | $313.5 | $329.3 | -$15.8 | | **Total liabilities** | $916.2 | $966.3 | -$50.1 | | **Total Modine shareholders' equity** | $727.4 | $592.8 | +$134.6 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities surged to $175.0 million for the nine months ended Dec 31, 2023, driven by higher earnings, despite increased investing and financing outflows Cash Flow Summary for Nine Months Ended Dec 31 (in millions) | Cash Flow Activity | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | **Net cash provided by operating activities** | $175.0 | $67.9 | +$107.1 | | **Net cash used for investing activities** | $(54.5) | $(35.2) | -$19.3 | | **Net cash (used for) provided by financing activities** | $(37.4) | $7.4 | -$44.8 | | **Net increase in cash** | $84.0 | $37.0 | +$47.0 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Details accounting policies, acquisitions (Napps Technology), dispositions (German automotive businesses), revenue disaggregation, restructuring, debt, and subsequent events (TMGcore IP purchase) - Acquired Napps Technology Corporation for **$5.8 million** to expand its indoor air quality product portfolio within the Climate Solutions segment[29](index=29&type=chunk)[30](index=30&type=chunk) - Sold three German automotive businesses, resulting in a **$4.0 million** gain on sale in Q3 FY2024, as part of a strategic shift towards higher-margin technologies[34](index=34&type=chunk)[35](index=35&type=chunk) - In January 2024, subsequent to the reporting period, the company purchased intellectual property from TMGcore, Inc. for **$12.0 million** to enhance its liquid immersion cooling technology for data centers[103](index=103&type=chunk) - Approved a plan in January 2024 to close a technical service center in Europe, with estimated closure costs of **$8.0 million to $12.0 million**, to realign its cost structure after the sale of the German automotive businesses[104](index=104&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Discusses financial results, highlighting Q3 gross margin improvement, segment performance (strong data center cooling), liquidity, capital resources, debt compliance, and share repurchase program [Consolidated Results of Operations](index=29&type=section&id=Consolidated%20Results%20of%20Operations) Q3 FY2024 net sales marginally up, gross profit rose by **$29.7 million** due to 530 basis point margin improvement, and operating income increased by **$22.2 million** - Q3 FY2024 gross margin improved by **530 basis points to 22.7%**, primarily due to favorable sales mix, commercial pricing, and improved operating efficiencies[110](index=110&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) - Q3 SG&A expenses increased by **$10.0 million (17%)**, mainly from approximately **$7.0 million** in higher compensation-related expenses, including incentive compensation tied to improved financial results[118](index=118&type=chunk) - For the first nine months of FY2024, net sales increased by **$124.5 million (7%)**, driven by favorable pricing, higher volume, and positive foreign currency impacts[111](index=111&type=chunk)[124](index=124&type=chunk) [Segment Results of Operations](index=32&type=section&id=Segment%20Results%20of%20Operations) Climate Solutions Q3 sales decreased 2% but operating income rose to **$38.8 million**; Performance Technologies sales increased 2% with operating income reaching **$31.2 million** Climate Solutions Segment Performance (in millions) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $242.5 | $248.6 | $790.1 | $748.9 | | **Gross Profit** | $66.1 | $54.8 | $206.9 | $162.5 | | **Operating Income** | $38.8 | $30.2 | $127.7 | $89.9 | - In the Climate Solutions segment, Q3 sales of data center cooling products increased by **$15.4 million**, while heat transfer products sales decreased by **$23.7 million** due to market weakness and strategic exits from low-margin business[134](index=134&type=chunk) Performance Technologies Segment Performance (in millions) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $323.0 | $317.8 | $1,033.6 | $952.1 | | **Gross Profit** | $61.0 | $43.0 | $182.4 | $115.2 | | **Operating Income** | $31.2 | $17.4 | $96.8 | $41.1 | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Strong liquidity with **$149.7 million** cash, **$269.4 million** available credit, and **$175.0 million** operating cash flow for nine months, while repurchasing **$13.3 million** in stock - Primary liquidity sources include **$149.7 million** in cash and cash equivalents and **$269.4 million** in available borrowing capacity under the revolving credit facility as of December 31, 2023[155](index=155&type=chunk) - Net cash provided by operating activities increased by **$107.1 million** to **$175.0 million** for the nine months ended Dec 31, 2023, mainly due to higher earnings and favorable working capital changes[156](index=156&type=chunk) - The company repurchased **$13.3 million** of its common stock in the first nine months of fiscal 2024, with **$32.1 million** remaining under the current authorization which expires in November 2024[160](index=160&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) No material changes to the company's market risks have occurred since the fiscal year ended March 31, 2023, Form 10-K filing - The company's market risks have not materially changed since the fiscal 2023 Form 10-K was filed[171](index=171&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures.) CEO and CFO concluded disclosure controls and procedures were effective as of December 31, 2023, with no material changes to internal control over financial reporting in Q3 FY2024 - Based on an evaluation as of December 31, 2023, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[172](index=172&type=chunk) - There were no material changes to the company's internal control over financial reporting during the third quarter of fiscal 2024[173](index=173&type=chunk) PART II. OTHER INFORMATION [Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) In Q3 FY2024, the company repurchased **166,241** shares of common stock at an average price of **$43.79** per share, including shares from its publicly announced program Issuer Purchases of Equity Securities (Q3 FY2024) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Oct 2023 | 56,558 | $43.27 | | Nov 2023 | 100,000 | $43.07 | | Dec 2023 | 9,683 | $54.24 | | **Total** | **166,241** | **$43.79** | - The company's Board of Directors authorized a repurchase program of up to **$50.0 million**, which expires in November 2024[177](index=177&type=chunk) [Other Information](index=40&type=section&id=Item%205.%20Other%20Information.) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended December 31, 2023 - No director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the third quarter[176](index=176&type=chunk) [Exhibits](index=41&type=section&id=Item%206.%20Exhibits.) Lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents for financial data reporting - The exhibits filed with this report include CEO and CFO certifications under Rule 13a-14(a)/15d-14(a) and Section 1350, along with various Inline XBRL documents[178](index=178&type=chunk) Signature - The report was duly signed on January 31, 2024, by Michael B. Lucareli, Executive Vice President and Chief Financial Officer[180](index=180&type=chunk)

Financial Data and Key Metrics Changes - The company reported a 7% increase in sales year-over-year, driven by growth in both the Climate Solutions and Performance Technologies segments [6][15] - Adjusted EBITDA reached $81.2 million, a 59% increase from the prior year, with an EBITDA margin of 13.1%, reflecting a 430-basis point improvement [7][58] - Free cash flow for the second quarter was $58 million, improving from $33 million in the prior year, with year-to-date free cash flow at $85 million [37][38] Business Line Data and Key Metrics Changes - The Climate Solutions segment saw an 8% revenue increase, with adjusted EBITDA rising 31% to $50.4 million, resulting in an EBITDA margin of 18.3% [23][24] - Performance Technologies also reported a 7% revenue increase, with adjusted EBITDA up 73% to $42 million, leading to an EBITDA margin of 11.9% [15][54] - HVAC&R sales decreased by 2%, while heat transfer products saw a 16% decline, attributed to reduced market demand and inventory adjustments by customers [34][40] Market Data and Key Metrics Changes - The data center business experienced significant growth, with revenues more than doubling year-over-year to $79 million, although future growth may be lumpy due to project timing [24][50] - The heat pump market's growth expectations have been tempered due to regulatory delays in Germany, impacting short-term forecasts [12][40] - The company anticipates modest revenue growth in HVAC&R and a mid-single-digit decline in heat transfer products due to economic concerns [40] Company Strategy and Development Direction - The company is focused on transforming its business by exiting non-strategic operations and reallocating resources to higher-margin segments [45][17] - New product developments, such as the AmpDawg electric heater and cooling distribution units (CDUs) for data centers, are part of the strategy to enhance product offerings [10][28] - The company plans to expand its EVantage Thermal Management Systems production to Europe, indicating a strategic pivot towards electric vehicle solutions [18][83] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the economic environment but is optimistic about long-term growth opportunities, particularly in the data center and EV markets [9][39] - The company raised its full-year earnings outlook for fiscal 2024, expecting continued strong performance in the Climate Solutions segment [39][42] - Management acknowledged the complexities of navigating the transformation process while maintaining cautious guidance for the second half of the fiscal year [68][79] Other Important Information - The company restarted its share repurchase program, purchasing 200,000 shares to offset dilution from share-based compensation [38] - The divestiture of three non-strategic businesses in Germany was completed, which is expected to reduce revenue by approximately $80 million to $90 million in the second half of the fiscal year [55][45] Q&A Session Summary Question: What are the expectations for the data center business? - Management indicated that while the data center business is experiencing growth, future shipments may be lower in Q3 but are expected to ramp up significantly in Q4 due to strong order books [72][50] Question: How does the company view the current demand environment? - Management clarified that there has not been a step function change in demand, and they remain cautious due to geopolitical uncertainties and market conditions [67][68] Question: What is the timeline for the CDU development? - The CDU is expected to be commercialized in early 2024, addressing the need for efficient cooling in high-performance data centers [82][105] Question: How does the company plan to manage new customer acquisitions? - The company is focused on identifying growth opportunities while ensuring that new customer engagements do not erode margins [109][130] Question: What are the implications of the divestitures on revenue? - The divestitures are expected to result in a revenue reduction in the second half of the fiscal year, but management is reviewing cost structures to align with the new revenue levels [55][40]

| --- | --- | --- | --- | --- | --- | |-------|-----------------------------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | Second Quarter Fiscal 2024 | | | | | | | November 2, 2023 | | | | | MICK LUCARELI Executive Vice President and Chief Financial Officer Forward-Looking Statements 3 FY2025-27 Targets ▪ Solid sales growth of 7%, driven by increases in both Climate Solutions and Performance Technologies segments ▪ Second quarter results are clearly ahead of our adjusted EBI ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission file number 1-1373 MODINE MANUFACTURING COMPANY (Exact name of registrant as specified in its charter) Wisconsin 39-0482000 ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements.) The company's unaudited statements show significant year-over-year growth in net sales and net earnings [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) The company reports substantial growth in net sales, operating income, and diluted EPS for the quarter Consolidated Statements of Operations (Unaudited) | | Three months ended June 30, | | :--- | :--- | :--- | | (In millions, except per share amounts) | **2023** | **2022** | | **Net sales** | **$622.4** | **$541.0** | | Gross profit | $127.9 | $83.4 | | Operating income | $66.5 | $25.6 | | **Net earnings attributable to Modine** | **$44.8** | **$14.3** | | **Diluted EPS** | **$0.85** | **$0.27** | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet reflects an increase in total assets and shareholders' equity as of June 30, 2023 Consolidated Balance Sheet Highlights (Unaudited) | | **June 30, 2023** | **March 31, 2023** | | :--- | :--- | :--- | | (In millions) | | | | **Total current assets** | $894.1 | $846.4 | | **Total assets** | **$1,607.9** | **$1,565.9** | | Total current liabilities | $506.7 | $507.1 | | Long-term debt | $330.0 | $329.3 | | **Total liabilities** | **$963.4** | **$966.3** | | **Total Modine shareholders' equity** | **$637.9** | **$592.8** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow increased significantly year-over-year, contributing to a net increase in cash Condensed Consolidated Statements of Cash Flows (Unaudited) | | Three months ended June 30, | | :--- | :--- | :--- | | (In millions) | **2023** | **2022** | | **Net cash provided by operating activities** | **$41.7** | **$14.5** | | Net cash used for investing activities | ($18.4) | ($10.4) | | Net cash provided by financing activities | $3.7 | $12.0 | | Net increase in cash, cash equivalents and restricted cash | $26.8 | $13.5 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail revenue disaggregation, debt compliance, strong data center growth, and a subsequent acquisition - The company refined its revenue reporting for the Climate Solutions segment to align with three market-based verticals: heat transfer products, HVAC & refrigeration, and data center cooling[29](index=29&type=chunk) Revenue by Product Group (YoY Comparison) | Product Group (Segment) | Q1 FY24 Sales ($M) | Q1 FY23 Sales ($M) | Change (%) | | :--- | :--- | :--- | :--- | | **Data center cooling (Climate Solutions)** | **$68.2** | **$30.5** | **+123.6%** | | Liquid-cooled (Performance Tech) | $134.7 | $110.9 | +21.5% | | Air-cooled (Performance Tech) | $172.7 | $153.0 | +12.9% | - As of June 30, 2023, the company was **in compliance with all debt covenants**, including its leverage ratio and interest coverage ratio[76](index=76&type=chunk) - On July 1, 2023, the Company acquired Napps Technology Corporation for **$5.3 million**, which will be reported within the Climate Solutions segment[89](index=89&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management highlights a 15% increase in net sales and improved margins driven by strong segment performance [Consolidated Results of Operations](index=24&type=section&id=Consolidated%20Results%20of%20Operations_MD%26A) Net sales grew 15% year-over-year, with gross margin improving 520 basis points due to higher volumes and favorable pricing Consolidated Results of Operations Highlights | (in millions) | Q1 FY24 | Q1 FY23 | Change | | :--- | :--- | :--- | :--- | | **Net sales** | **$622.4** | **$541.0** | **+$81.4M (+15%)** | | Gross profit | $127.9 | $83.4 | +$44.5M | | Gross margin | 20.6% | 15.4% | +520 bps | | **Operating income** | **$66.5** | **$25.6** | **+$40.9M (+160%)** | | Operating margin | 10.7% | 4.7% | +600 bps | - SG&A expenses increased by $5.1 million, primarily due to approximately **$4.0 million in higher compensation-related expenses** driven by improved financial results[98](index=98&type=chunk) [Segment Results of Operations](index=25&type=section&id=Segment%20Results%20of%20Operations) Both Climate Solutions and Performance Technologies segments delivered strong year-over-year growth in sales and operating income Climate Solutions Segment Results | (in millions) | Q1 FY24 | Q1 FY23 | Change | | :--- | :--- | :--- | :--- | | Net sales | $271.8 | $244.4 | +11% | | Gross profit | $69.0 | $50.4 | +$18.6M | | **Operating income** | **$44.3** | **$27.0** | **+$17.3M** | | Operating margin | 16.3% | 11.0% | +530 bps | - Climate Solutions sales growth was primarily driven by a **$37.7 million increase in sales of data center cooling products** compared to the prior year[103](index=103&type=chunk) Performance Technologies Segment Results | (in millions) | Q1 FY24 | Q1 FY23 | Change | | :--- | :--- | :--- | :--- | | Net sales | $358.9 | $304.3 | +18% | | Gross profit | $58.6 | $33.0 | +$25.6M | | **Operating income** | **$32.0** | **$7.4** | **+$24.6M** | | Operating margin | 8.9% | 2.4% | +650 bps | [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity through operating cash flow, cash reserves, and available credit facilities - Primary liquidity sources are cash flow from operations, **$92.5 million in cash** and cash equivalents, and **$258.3 million of available borrowing capacity**[112](index=112&type=chunk) - Net cash provided by operating activities **increased by $27.2 million to $41.7 million** compared to the prior year, primarily due to higher earnings[113](index=113&type=chunk) - Capital expenditures were **$15.1 million**, an increase of $4.7 million YoY, supporting strategic growth initiatives[114](index=114&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company's market risk profile has not materially changed since the fiscal year-end 2023 filing - The Company's market risks have **not materially changed** since the fiscal 2023 Form 10-K was filed[124](index=124&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and internal controls over financial reporting were effective - Based on an evaluation as of June 30, 2023, the CEO and CFO concluded that the Company's **disclosure controls and procedures were effective**[126](index=126&type=chunk) - There were **no material changes** in internal control over financial reporting during the first quarter of fiscal 2024[127](index=127&type=chunk) PART II. OTHER INFORMATION [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The company repurchased 42,799 shares of common stock under its authorized repurchase program Issuer Purchases of Equity Securities (Q1 FY2024) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | May 2023 | 16,633 | $26.32 | | June 2023 | 26,166 | $30.69 | | **Total** | **42,799** | **$28.99** | - The Company has a Board authorization to repurchase up to **$50.0 million of common stock**, which expires in November 2024[128](index=128&type=chunk) [Other Information](index=33&type=section&id=Item%205.%20Other%20Information.) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - During the quarter ended June 30, 2023, **no director or officer** of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement"[129](index=129&type=chunk) [Exhibits](index=33&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed with the Form 10-Q, including award agreements and certifications - Filed exhibits include Form of Fiscal 2024 Performance Stock Award Agreement, Restricted Stock Unit Award Agreements, and **CEO/CFO certifications** under Rule 13a-14(a)/15d-14(a) and Section 1350[130](index=130&type=chunk)

Financial Data and Key Metrics Changes - The company reported record sales of $618 million for the fourth quarter, an increase of 8% year-over-year and 11% on a constant currency basis [50] - Adjusted EBITDA for the quarter was $66 million, up 16% from the prior year, resulting in a record annual adjusted EBITDA of $212 million, a 34% increase [74] - Free cash flow generated in the fourth quarter was $24 million, totaling $57 million for the fiscal year [93] Business Line Data and Key Metrics Changes - The Climate Solutions segment saw a revenue increase of 11% year-over-year, with data center sales up 60% [51][52] - Performance Technologies segment revenue increased by 12%, with air-cooled products showing significant growth [57] - Adjusted EBITDA margin for the Climate Solutions segment improved to 14.6%, up 370 basis points from the prior year [53] Market Data and Key Metrics Changes - The company noted strong growth in the data center market, particularly in North America, with expectations for continued double-digit growth [52][120] - The HVAC&R sales in the Climate Solutions segment decreased by 9% due to lower heating product sales, offset by higher cooler sales [75] - The Performance Technologies segment is experiencing steady market growth, particularly in gensets and electric vehicles, despite some softening in certain sectors [59][100] Company Strategy and Development Direction - The company is focusing on operational targets to improve gross margins and enhance cost control and productivity [55] - There is an emphasis on new product development and technology acquisitions to support growth, particularly in Climate Solutions [19][20] - The company is implementing a product rationalization strategy through its 80/20 initiative, which is expected to lead to revenue attrition in certain areas [86][97] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory in the data center market, with expectations for revenue growth of 15% to 25% in fiscal 2024 [98] - The company anticipates continued momentum in Performance Technologies, driven by strong demand for electric vehicle systems and components [100] - Management highlighted the importance of stability in the workforce, which has improved productivity and margins [33] Other Important Information - The company expects capital expenditures to be approximately $70 million for the fiscal year [139] - The effective tax rate is projected to be around 26% for the new year, with interest expenses estimated between $23 million and $25 million [17] Q&A Session Summary Question: What is the expected revenue attrition from the 80/20 rationalization? - Management indicated that they are still assessing the impact and expect to provide firmer ranges in the coming months [87] Question: How much of the data center business is in North America versus Europe? - The majority of data center revenue is from Europe, but North America is growing at a faster rate [120] Question: What are the expectations for cost savings from the European restructuring? - Management expects further margin improvement and cost savings from the restructuring efforts [110] Question: What is the outlook for the heat pump market? - The company anticipates sales in the heat pump market to double over the next three years, currently valued at over $50 million [118] Question: How does the company view the internal combustion engine business? - Management sees potential growth in the internal combustion engine market and is investing in infrastructure to support this segment [145]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission file number 1-1373 MODINE MANUFACTURING COMPANY (Exact name of registrant as specified in its charter) Wisconsin 39-0482000 (State or ot ...

Financial Performance - Q4 FY23 - Net sales increased to $618.1 million, up 8% year-over-year[27] - Adjusted EBITDA grew by 16% to $65.5 million, with a margin improvement of 70 bps to 10.6%[27] - Adjusted EPS increased by 18% year-over-year to $0.67[27] Financial Performance - Fiscal Year 2023 - Net sales reached $2.3 billion, a 12% increase[8] - Adjusted EBITDA increased by 34% to $212.1 million[8] - Free cash flow was $56.8 million, up by $85.6 million[8] - Adjusted EPS increased by 59% to $1.95[8] Segment Performance - Climate Solutions - Fiscal Year 2023 net sales were $1.0 billion, up 11%[10] - Fiscal Year 2023 adjusted EBITDA was $148.0 million, up 49%[10] - Data Centers revenue increased by 60% due to product expansions in North America[10] - Adjusted EBITDA margin improved by 370 bps to 14.6%[10] Segment Performance - Performance Technologies - Q4 FY23 net sales increased by 13% to $364.1 million[91] - Adjusted EBITDA increased by 51% to $33.3 million, with a margin of 9.1%[17, 92] Fiscal Year 2024 Outlook - Net sales are projected to grow by 4% to 10%, reaching $2.4 billion to $2.5 billion[38] - Adjusted EBITDA is expected to be between $240 million and $260 million, a 13% to 23% increase[38]