Modine Manufacturing pany(US:MOD)2026-02-04 21:36Financial Performance - Net sales increased by 31% to $805.0 million, compared to $616.8 million in the prior year, driven by strong demand in the Climate Solutions segment [3]. - Adjusted EBITDA increased by 37% to $119.6 million, up from $87.3 million in the prior year [7]. - Adjusted earnings per share rose by 29% to $1.19, compared to $0.92 in the prior year [8]. - In Q3 2025, net sales increased to $805.0 million, up 30.5% from $616.8 million in Q3 2024, while net sales for the nine months ended December 31, 2025, reached $2,226.7 million, a 15% increase from $1,936.3 million in the same period last year [25]. - Adjusted EBITDA for the nine months ended December 31, 2025, was $324.8 million, up from $288.0 million in the same period last year, reflecting improved operational performance [29]. - Adjusted EBITDA for Q3 fiscal 2026 was $119.6 million, with an adjusted EBITDA margin of 14.9% [32]. Segment Performance - Climate Solutions segment sales reached $544.6 million, a 51% increase from $360.8 million one year ago, with data center sales up 78% [13]. - Organic sales growth for Climate Solutions was 36% in Q3 fiscal 2026, while Performance Technologies remained flat [36]. - The company plans to raise its multi-year outlook for Data Center sales to 50% to 70% annual growth over the next two years [12]. Losses and Charges - The company reported a net loss of $46.8 million, including a $116.1 million non-cash pension termination charge [5]. - The company incurred a pension termination charge of $116.1 million in Q3 2025, impacting overall earnings significantly [29]. - A non-cash pension termination charge of $116.1 million was recognized in Q3 fiscal 2026, with a tax benefit of $13.1 million associated with this charge [30]. - The provisions of the One Big Beautiful Bill Act negatively impacted the Company's income tax expense by $0.6 million in Q3 fiscal 2026 [30]. Expenses and Debt - Selling, general and administrative expenses increased by $7.3 million to $89.3 million, primarily due to higher spending to support growth and acquisitions [6]. - Total debt as of December 31, 2025, was $615.8 million, with net debt increasing by $237.9 million to $517.1 million [11]. - Total debt as of December 31, 2025, was $615.8 million, with net debt of $517.1 million after accounting for cash and cash equivalents [34]. - For fiscal 2026, the company estimates adjusted EBITDA guidance, excluding significant cash and non-cash expenses, with interest expense projected at approximately $30 to $34 million and income tax provision at approximately $72 to $76 million [24]. Cash Flow and Investments - Cash and cash equivalents increased to $98.7 million as of December 31, 2025, from $71.6 million at the end of March 2025 [26]. - Net cash provided by operating activities for the nine months ended December 31, 2025, was $53.8 million, down from $158.5 million in the same period last year [27]. - The company invested $182.4 million in business acquisitions during the nine months ended December 31, 2025, compared to $3.4 million in the same period last year, indicating a strategic focus on growth through acquisitions [27]. - Free cash flow for the three months ended December 31, 2025, was $(17.1) million, compared to $44.7 million in the same period of 2024 [35]. Asset Growth - Total assets rose to $2,482.9 million as of December 31, 2025, compared to $1,917.6 million as of March 31, 2025, indicating strong growth in the company's asset base [26].