MODINE MANUFACTURING CO 8-K
PositiveEarningsGuidance raisedImpairment / charge
Data center demand and acquisitions fuel Climate Solutions growth as management raises its FY2026 outlook.
Filed 2026-02-04 16:36 ET
- 2.02 Results of Operations
- 9.01 Financial Statements and Exhibits
Summary
Q3 FY2026 results with raised FY2026 guidance. Net sales rose 31% as strong data center demand and acquisitions drove Climate Solutions growth; a $116.1M non-cash pension termination charge contributed to a GAAP loss. Modine raised its revenue and adjusted EBITDA outlook and its Climate Solutions sales outlook. The company also outlined its planned Performance Technologies spin-off and combination with Gentherm; Modine shareholders would own 40% of the combined company.
Key Figures
| Metric | Q3 2026 | Q3 2025 | Y/Y |
|---|---|---|---|
| Net sales | $805.0M | $616.8M | +31% |
| Operating income | $89.3M | $59.3M | +51% |
| Net loss attributable to Modine | $(47.4)M | $41.0M | n/m |
| Diluted EPS attributable to Modine shareholders | $(0.90) | $0.76 | n/m |
| Adjusted EBITDA, non-GAAP | $119.6M | $87.3M | +37% |
| Adjusted EPS, non-GAAP | $1.19 | $0.92 | +29% |
| Operating cash flow | $24.7M | $60.7M | -59% |
| Free cash flow | $(17.1)M | $44.7M | n/m |
- Data center sales increased 78%; Climate Solutions sales grew 51%, including $42.8M from acquisitions. Higher temporary costs for data center capacity expansion and unfavorable mix weighed on Climate Solutions gross margin.
- The pension termination charge was non-cash. Nine-month operating cash flow was $53.8M vs $158.5M; free cash flow was $(47.4)M vs $102.2M, reflecting higher working capital, inventory and capital spending. Nine-month capital expenditures were $101.2M.
- At 12/31/2025, total debt was $615.8M, cash was $98.7M and net debt was $517.1M, up $237.9M from FY2025 year-end; leverage was 1.2x. The presentation values Performance Technologies at $1.0B, or 6.8x trailing LTM adjusted EBITDA.
Guidance
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| Net sales growth | FY2026 | +20% to +25%; $3.10B to $3.23B | — | Raised |
| Adjusted EBITDA, non-GAAP | FY2026 | $455M to $475M; growth of 16% to 21% | — | Raised |
| Climate Solutions sales growth | FY2026 | +40% to +45% | +35% to +40% | Raised |
| Performance Technologies sales growth | FY2026 | Flat to -7% | — | Reaffirmed |
| Data center sales growth | FY2026 | More than 70% Y/Y | — | Raised |
| Data center sales growth | Next two years | 50% to 70% annually | — | Raised |
| Data center revenue target | FY2028 | More than $2B | — | — |
| Capital expenditures | FY2026 | $150M to $180M | — | — |
| Interest expense | FY2026 | ≈$30M to $34M | — | — |
| Provision for income taxes | FY2026 | ≈$72M to $76M | — | — |
| Depreciation and amortization expense | FY2026 | ≈$77M to $82M | — | — |
| Leverage ratio | FY2026 year-end | Further decline from 1.2x; no target stated | — | — |
Investor Takeaways
- Watch whether additional data center production lines support the expected Q4 margin improvement and delivery growth.
- FY2026 results will show whether sales and adjusted EBITDA reach the raised ranges, including the higher Climate Solutions and data center outlooks.
- Watch for progress on the proposed Gentherm combination, including regulatory approvals and completion.
The summary is written by an AI model reading the filing.
Model 005 · prompt 01d34d48e3