MODINE MANUFACTURING CO 8-K

PositiveEarningsNew guidanceImpairment / charge

Data-center demand powers Climate Solutions growth; capacity expansion, tariffs and higher material costs squeeze gross margin.

Filed 2026-05-26 16:23 ET

Summary

Q4 and FY2026 results with FY2027 guidance. Modine posted a fourth consecutive year of record revenue, adjusted EBITDA and adjusted EPS, driven largely by Climate Solutions and data center demand; Q4 gross margin declined as capacity expansion, tariffs and material costs weighed on results. The company also cited a multi-year agreement for more than $4B of chiller sales to a major hyperscale customer during 2027–2029 and expects the planned Performance Technologies spin-off and merger with Gentherm to close before the end of calendar 2026.

Key Figures

Metric Q4 FY2026 Q4 FY2025 Y/Y
Net sales $954M $647M +47%
Operating income $104M $74.5M +39%
Net earnings, consolidated $73.6M $50.1M +47%
Net earnings attributable to Modine $73.3M $49.6M +48%
Adjusted EBITDA (non-GAAP) $146M $104M +40%
Diluted EPS attributable to Modine $1.36 $0.92 +48%
Adjusted EPS (non-GAAP) $1.71 $1.12 +53%
Net cash provided by operating activities $195M $54.8M +256%
Free cash flow (non-GAAP) $153M $27.1M +464%
Metric FY2026 FY2025 Y/Y
Net sales $3.18B $2.58B +23%
Operating income $342M $284M +21%
Net earnings, consolidated $123M $186M -34%
Net earnings attributable to Modine $122M $184M -34%
Adjusted EBITDA (non-GAAP) $471M $392M +20%
Diluted EPS attributable to Modine $2.26 $3.42 -34%
Adjusted EPS (non-GAAP) $5.02 $4.05 +24%
Net cash provided by operating activities $249M $213M +17%
Free cash flow (non-GAAP) $105M $129M -18%
  • Q4 Climate Solutions sales rose 87%, including 158% growth in Data Centers; acquired businesses also contributed. Q4 gross margin was 22.5%, down 320 bp Y/Y; FY2026 gross margin was 23.0%, down 190 bp. Modine cited temporary data-center capacity expansion costs, tariffs and higher material costs.
  • FY2026 net earnings included a $116M non-cash pension termination charge. FY free cash flow fell amid higher working capital and capital spending tied to data center growth; customer deposits partly offset those effects.
  • At 3/31/2026, total debt was $436M, cash was $73.5M and net debt was $363M, up $83.6M Y/Y. FY treasury-stock purchases were $7.0M vs $30.9M; diluted weighted-average shares were 53.8M vs 53.9M.

Guidance

Metric Period Guidance Prior Direction
Net sales (growth and implied range) FY2027 +20% to +35%; $3.82B to $4.29B — —
Adjusted EBITDA (non-GAAP; growth) FY2027 $650M to $680M; +38% to +44% — —
Data Centers sales growth FY2027 +60% to +80% — —
Commercial HVAC sales growth FY2027 +5% to +10% — —
Performance Technologies sales growth FY2027 Flat to +5% — —
Free cash flow (non-GAAP, as % of net sales) FY2027 4% to 6% — —
Capital expenditures FY2027 ≈$150M to $200M — —
Interest expense estimate supporting adjusted EBITDA guidance FY2027 ≈$15M to $18M — —
Income tax provision estimate supporting adjusted EBITDA guidance FY2027 ≈$135M to $145M — —
Depreciation and amortization estimate supporting adjusted EBITDA guidance FY2027 ≈$90M to $95M — —

The outlook includes Performance Technologies for all of FY2027 and will be updated for the remaining business once the spin-off timing is finalized.

Investor Takeaways

  • Watch FY2027 sales and adjusted EBITDA against the outlook, especially whether data-center growth and capacity expansion translate into earnings growth.
  • The planned Gentherm transaction is expected to close before the end of calendar 2026; completion timing and subsequent guidance for the remaining business are key milestones.
  • Modine expects to provide FY2026 recast segment results under its new reporting structure in July.

The summary is written by an AI model reading the filing.

Model 005 · prompt 01d34d48e3

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