MODINE MANUFACTURING CO 8-K
PositiveEarningsGuidance reaffirmedRestructuringImpairment / charge
Data Centers and Commercial HVAC drove growth, but supply constraints limited Data Centers production and pressured margins.
Filed 2026-07-29 17:06 ET
- 2.02 Results of Operations
- 9.01 Financial Statements and Exhibits
Summary
Q1 FY2027 results with reaffirmed FY2027 guidance. Revenue rose 28% as Data Centers and Commercial HVAC grew, while supply constraints limited Data Centers production and temporarily pressured margins. The FY2027 outlook includes Performance Technologies for the full year; the planned spin-off and merger with Gentherm remains expected to close in calendar Q4 2026.
Key Figures
| Metric | Q1 FY2027 | Q1 FY2026 | Y/Y |
|---|---|---|---|
| Net sales | $874M | $683M | +28% |
| Operating income | $74.8M | $75.7M | -1% |
| Net earnings | $74.3M | $51.7M | +44% |
| Net earnings attributable to Modine | $73.9M | $51.2M | +44% |
| Adjusted EBITDA (non-GAAP) | $107M | $101M | +5% |
| Diluted EPS attributable to Modine shareholders | $1.37 | $0.95 | +44% |
| Adjusted EPS (non-GAAP) | $1.53 | $1.06 | +44% |
| Net cash provided by operating activities | $41.4M | $27.7M | +49% |
| Free cash flow (non-GAAP) | $(5.0)M | $0.2M | n/m |
- Data Centers sales increased 90% to $349M and Commercial HVAC sales rose 22% to $262M; Performance Technologies sales declined 3% to $278M. Gross profit rose 10%, but gross margin fell 340 bp to 20.8% as margins declined across all three segments. Higher SG&A—including costs to support growth and prepare for the spin-off—contributed to lower operating income.
- Capital expenditures were $46.4M, up from $27.5M, contributing to negative free cash flow alongside higher contract assets and the timing of cash taxes and incentive compensation; favorable working capital partly offset these pressures. At quarter-end, total debt was $528M, cash was $95.3M and net debt was $433M, up $70.1M from fiscal year-end. Treasury-stock purchases were $64.6M vs $5.1M a year earlier, related to the share-based compensation plan.
- Q1 costs included $3.9M of restructuring expenses and $7.1M of costs related to the pending spin-off. The company expects an additional ≈$25M-$35M of transaction costs during the remainder of FY2027, primarily professional fees.
Guidance
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| Net sales | FY2027 | $3.82B-$4.29B; +20%-35% Y/Y | — | Reaffirmed |
| Adjusted EBITDA (non-GAAP) | FY2027 | $650M-$680M; +38%-44% Y/Y | — | Reaffirmed |
| Data Centers segment sales | FY2027 | +60%-80% | — | — |
| Data Centers segment earnings growth | FY2027 | >85% | — | — |
| Commercial HVAC segment sales | FY2027 | +5%-10% | — | — |
| Performance Technologies segment sales | FY2027 | Flat to +5% | — | — |
| Free cash flow (non-GAAP), as % of net sales | FY2027 | 4%-6% | — | — |
| Capital expenditures | FY2027 | ≈$150M-$200M | — | — |
| Interest expense estimate | FY2027 | ≈$24M-$27M | — | — |
| Provision for income taxes estimate | FY2027 | ≈$130M-$140M | — | — |
| Depreciation and amortization estimate | FY2027 | ≈$87M-$92M | — | — |
Investor Takeaways
- Supplier commitments and the Data Centers production ramp are key to resolving near-term constraints and supporting the FY2027 growth outlook.
- Watch for the expected calendar Q4 2026 Gentherm transaction closing; Modine plans to update its outlook for the continuing business afterward.
The summary is written by an AI model reading the filing.
Model 005 · prompt 01d34d48e3