Modine Reports Second Quarter Fiscal 2025 Results

Core Insights - Modine reported strong financial results for the second quarter of fiscal 2025, driven by strategic acquisitions and organic growth in data center revenues [1][11]. Financial Performance - Net sales increased by 6% to $658.0 million compared to $620.5 million in the prior year [2]. - Operating income rose by 15% to $75.3 million, up from $65.7 million in the previous year [5]. - Adjusted EBITDA reached $99.8 million, an increase of $18.6 million or 23% from $81.2 million in the prior year [5][24]. - Earnings per share (EPS) was $0.86, a slight decrease from $0.87 in the prior year, while adjusted EPS increased by 9% to $0.97 [6][24]. Segment Performance - The Climate Solutions segment saw sales of $366.4 million, a 27% increase from $289.2 million, with organic sales up by 7% [7]. - The Performance Technologies segment reported sales of $297.5 million, a 12% decrease from $337.3 million, with organic sales down by 5% [8]. Gross Profit and Margins - Gross profit increased by 23% to $165.6 million, with gross margin improving by 340 basis points to 25.2% [3][20]. - The Climate Solutions segment reported a gross margin of 29.0%, up 240 basis points from the prior year [7]. Expenses - Selling, general and administrative (SG&A) expenses rose by $16.9 million to $85.8 million, primarily due to higher compensation-related expenses and costs associated with the Scott Springfield acquisition [4]. Balance Sheet and Liquidity - As of September 30, 2024, total debt was $405.4 million, with cash and cash equivalents at $78.6 million, resulting in net debt of $326.8 million [10][27]. - Net cash provided by operating activities for the six months ended September 30, 2024, was $97.8 million, a decrease of $13.0 million from the prior year [9]. Outlook - The outlook for the data center business is positive, with expectations of continued organic growth and market share gains [11]. - The company aims to deliver another record year of revenue and earnings while focusing on improving its business mix in the Performance Technologies segment [11].