Modine Manufacturing pany(US:MOD)2025-10-28 20:38Financial Performance - Net sales increased by 12% to $738.9 million, compared to $658.0 million in the prior year, driven by strong demand in the Climate Solutions segment and strategic acquisitions[3]. - Net earnings decreased by $1.6 million, or 3%, to $44.8 million, while adjusted earnings per share increased by 9% to $1.06[6][8]. - Adjusted EBITDA rose by 4% to $103.8 million, with a projected range for fiscal 2026 of $440 million to $470 million, indicating growth between 12% and 20%[6][12]. - Gross profit decreased by $0.7 million to $164.9 million, with gross margin declining by 290 basis points to 22.3% due to increased costs from capacity expansion[4]. - Operating income decreased by $1.8 million to $73.5 million, impacted by a $4.1 million impairment charge on real estate held for sale in Europe[7]. - Adjusted EBITDA for the six months ended September 30, 2025, was $205.2 million, compared to $200.7 million for the same period in 2024[29]. - Adjusted EBITDA for the six months ended September 30, 2025, was $205.2 million, compared to $200.7 million for the same period in 2024, reflecting a growth of 2.2%[31]. Segment Performance - Climate Solutions segment sales grew by 24% to $454.4 million, with data center sales increasing by 42% year-over-year[13]. - Modine's Climate Solutions segment net sales increased to $454.4 million in Q2 2025, up from $366.4 million in Q2 2024, representing a 24% growth[28]. - The Performance Technologies segment reported net sales of $286.3 million in Q2 2025, a decrease of 3.9% from $297.5 million in Q2 2024[28]. - Organic sales growth for Climate Solutions was 15% for the three months ended September 30, 2025, while Performance Technologies experienced a decline of 4%[34]. - The adjusted EBITDA margin for Climate Solutions was 18.2% for the six months ended September 30, 2025, compared to 14.4% in the same period of 2024[31]. Cash Flow and Debt - Free cash flow for the six months ended September 30, 2025, was negative $30.3 million, a decrease of $87.8 million from the prior year[10]. - Total debt as of September 30, 2025, was $582.1 million, with net debt increasing by $219.1 million to $498.3 million due to borrowings for acquisitions and capital expenditures[11]. - Cash and cash equivalents increased to $83.8 million as of September 30, 2025, up from $71.6 million at the end of March 2025[26]. - The Company reported a net cash provided by operating activities of $29.1 million for the six months ended September 30, 2025, down from $97.8 million in the same period of 2024[27]. - The Company reported a free cash flow of $(30.5) million for the three months ended September 30, 2025, compared to $43.8 million in the same period of 2024[33]. - Total debt increased to $582.1 million as of September 30, 2025, up from $350.8 million on March 31, 2025[32]. Acquisitions and Impairments - The company incurred $182.1 million in payments for business acquisitions during the six months ended September 30, 2025[27]. - The Company recorded a $4.1 million non-cash asset impairment charge related to its technical service center in Germany during Q2 of fiscal 2026[30]. - Acquisition and integration costs for the first six months of fiscal 2026 amounted to $1.3 million due to inventory purchase accounting adjustments, with total costs of $3.4 million in Q2[30]. Tax and Other Expenses - SG&A expenses decreased by $1.6 million to $84.2 million, primarily due to headcount reductions in Performance Technologies[5]. - The Company faced a $3.1 million increase in income tax expense in Q2 of fiscal 2026 due to the One Big Beautiful Bill Act enacted in July 2025[30].