MODINE MANUFACTURING CO 8-K

Summary

Q2 FY2027 results and revised FY2027 continuing-business outlook following the Performance Technologies spin-off. Data Centers and Commercial HVAC drove growth, with revenue up 95% and 23%, respectively; a $29.5M tax expense from legal-entity restructuring to prepare for the spin-off reduced GAAP earnings. Modine completed the spin-off on 10/1/2026.

For FY2027, continuing-business net sales guidance is $3.1B-$3.2B, representing 50%-55% Y/Y growth excluding Performance Technologies from both periods; adjusted EBITDA guidance is $470M-$500M, with growth above 50%. The outlook reflects higher expectations for both continuing segments.

Key Figures

• Data Centers sales were $440M, up 95% Y/Y, driven by North American hyperscale customers; Commercial HVAC sales were $286M, up 23% Y/Y, led by coils, coatings, heating and ventilation products. Higher material, component and tariff costs pressured margins in both segments.
• Six-month free cash flow use reflected higher capital spending and working capital to expand data-center production and support customer demand. Capital expenditures were $88.5M, and cash payments for restructuring and disposition costs totaled $27.7M.
• At 9/30/2026, total debt was $724M, cash was $151M and net debt was $574M, up $211M from fiscal year-end; the company reported a 1.1x leverage ratio. Modine received $199M from Gentherm at the spin-off closing and used the proceeds to repay debt.

Guidance

The free-cash-flow and capital-expenditure ranges include Performance Technologies for the first half of FY2027. Modine expects an additional $20M-$25M of transaction costs in the second half of FY2027, primarily professional fees related to the Gentherm transaction.

Guidance changes, derived from earlier filings

Metric	Period	Earlier guidance	Guidance now	Change
Data Centers sales growth	FY2027	+60% to +80%	80%-90%	raised
Commercial HVAC sales growth	FY2027	+5% to +10%	10%-15%	raised
Capital expenditures	FY2027	≈$150M-$200M	≈$150M-$200M	reaffirmed

Investor Takeaways

• Watch whether Modine converts its data-center demand into shipments: quarterly orders exceeded $1B for a fourth consecutive quarter, and the company plans to expand to 20 active chiller lines by fiscal year-end.
• Commercial HVAC’s continued data-center coil demand and the anticipated second-half improvement in adjusted EBITDA margin will indicate whether growth translates into stronger profitability.
• Modine plans to present longer-term revenue and earnings targets at its 11/18/2026 Analyst and Investor Day.