What changed in this filing

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Item 1. Financial Statements

2025-10-29 compared with 2025-07-31 · 264 added, 168 removed, 484 unchanged (47% of the section changed)

2 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

For the three months ended June 30, 2025 and 2024

For the three and six months ended September 30, 2025 and 2024

(In millions, except per share amounts)

Three months ended June 30,

Three months ended September 30,

Six months ended September 30,

Cost of sales

1 unchanged sentence

Restructuring expenses

Impairment charge

Operating income

10 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the three months ended June 30, 2025 and 2024

For the three and six months ended September 30, 2025 and 2024

(In millions)

Three months ended June 30,

Three months ended September 30,

Six months ended September 30,

Other comprehensive income (loss), net of income taxes:

9 unchanged sentences

CONSOLIDATED BALANCE SHEETS

June 30, 2025 and March 31, 2025

September 30, 2025 and March 31, 2025

(In millions, except per share amounts)

June 30, 2025

September 30, 2025

March 31, 2025

32 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended June 30, 2025 and 2024

For the six months ended September 30, 2025 and 2024

(In millions)

Three months ended June 30,

Six months ended September 30,

Cash flows from operating activities:

1 unchanged sentence

Depreciation and amortization

Impairment charge

Stock-based compensation expense

7 unchanged sentences

Expenditures for property, plant and equipment

Payments for business acquisitions

Payments for business acquisitions, net of cash acquired

Net cash used for investing activities

2 unchanged sentences

Repayments of debt

Repayments on bank overdraft facilities – net

Borrowings (repayments) on bank overdraft facilities – net

Purchases of treasury stock

Dividend paid to noncontrolling interest

Net cash provided by financing activities

Dividends paid to noncontrolling interest

Net cash provided by (used for) financing activities

Effect of exchange rate changes on cash

5 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

For the three months ended June 30, 2025

For the three and six months ended September 30, 2025

(In millions)

7 unchanged sentences

Balance, June 30, 2025

Other comprehensive loss

Stock options and awards

Purchases of treasury stock

Stock-based compensation expense

Balance, September 30, 2025

The notes to condensed consolidated financial statements are an integral part of these statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

For the three months ended June 30, 2024

For the three and six months ended September 30, 2024

(In millions)

7 unchanged sentences

Balance, June 30, 2024

Other comprehensive income

Stock options and awards

Purchases of treasury stock

Stock-based compensation expense

Balance, September 30, 2024

The notes to condensed consolidated financial statements are an integral part of these statements.

5 unchanged sentences

The financial statements include all normal recurring adjustments that are, in the opinion of management, necessary for a fair statement of results for the interim periods.

Results for the first three months of fiscal 2026 are not necessarily indicative of the results to be expected for the full year.

Results for the first six months of fiscal 2026 are not necessarily indicative of the results to be expected for the full year.

These financial statements should be read in conjunction with the consolidated financial statements and related notes in Modine’s Annual Report on Form 10-K for the year ended March 31, 2025.

Supplier finance programs

Supplier finance program

The Company facilitates a voluntary supplier finance program through a financial institution that allows certain suppliers in the U.S.

and Europe to request early payment for invoices, at a discount, from the financial institution.

and Europe to request early payment for invoices, at a discount, from a financial institution.

The Company or the financial institution may terminate the supplier finance program upon 90 days’ notice.

2 unchanged sentences

Under this program, the Company confirms the validity of supplier invoices to the financial institution and remits payments to it based on the original payment terms, which typically range from 60 to 120 days.

The outstanding obligations under this program, included within accounts payable on the consolidated balance sheets, totaled $ 16.4 million and $ 15.5 million at June 30, 2025 and March 31, 2025, respectively.

The outstanding obligations under this program, included within accounts payable on the consolidated balance sheets, totaled $ 15.0 million and $ 15.5 million at September 30, 2025 and March 31, 2025, respectively.

New accounting guidance:

4 unchanged sentences

Acquisitions and Dispositions

The Company acquired two businesses during the first quarter of fiscal 2026, as summarized below.

At the time the June 30, 2025 financial statements were finalized, the Company was continuing its review of the fair value estimates for certain assets acquired and liabilities assumed.

The Company acquired three businesses during the first six months of fiscal 2026:

AbsolutAire, Inc.

(“AbsolutAire”), LBW Holding Corp.

White”), and Climate by Design International (“Climate by Design”).

Since the date of each acquisition, the Company has reported the financial results of these businesses within the Climate Solutions segment.

At the time the September 30, 2025 financial statements were finalized, the Company was continuing its review of the fair value estimates for certain assets acquired and liabilities assumed.

As part of its purchase accounting and integration activities, the Company is in the process of assessing, refining and harmonizing the internal controls and accounting processes of the acquired businesses with those of the Company.

1 unchanged sentence

As such, the allocations of the purchase prices presented below are considered preliminary.

The Company expects to complete its accounting for the acquisitions of AbsolutAire, Inc.

(“AbsolutAire”) and LBW Holding Corp.

White”) during the second or third quarter of fiscal 2026.

The Company expects to complete its accounting for the acquisitions of AbsolutAire, L.B.

White, and Climate By Design by the end of fiscal 2026.

During the first six months of fiscal 2026, the operating results for the acquired companies were not material.

The Company has not presented supplemental pro forma financial information for these acquisitions since they are not material, individually or in the aggregate, to the Company’s consolidated financial statements.

Acquisition of AbsolutAire

On April 1, 2025, the Company acquired substantially all of the net operating assets of AbsolutAire for consideration totaling $ 11.3 million.

AbsolutAire is a Michigan-based manufacturer of direct-fired heating, ventilation, and make-up

MODINE MANUFACTURING COMPANY

1 unchanged sentence

(In millions, except per share amounts)

Acquisition of AbsolutAire

On April 1, 2025, the Company acquired substantially all of the net operating assets of AbsolutAire for consideration totaling $ 11.3 million.

AbsolutAire is a Michigan-based manufacturer of direct-fired heating, ventilation, and make-up air systems.

This acquisition supports the Company’s growth strategy by expanding its heating and indoor air quality product portfolios and also broadens its customer base in the commercial, industrial, food service, and warehousing sectors.

Since the date of the acquisition, the Company has reported the financial results of the AbsolutAire business within the Climate Solutions segment.

For the three months ended June 30, 2025, the Company included $ 6.8 million of net sales and $ 0.8 million of operating income within its consolidated statement of operations attributable to AbsolutAire.

For the June 30, 2025 condensed consolidated financial statements, the Company has preliminarily allocated the purchase price to the identifiable tangible and intangible assets acquired and the liabilities assumed based upon their estimated fair values as of the acquisition date.

The Company recorded $ 2.2 million of intangible assets, including customer relationship and trade name assets.

The Company is amortizing the acquired intangible assets using a weighted-average life of approximately eleven years .

The Company allocated the excess of the purchase price over the net assets recognized to goodwill in the amount of $ 1.1 million, which is deductible for income tax purposes.

The Company’s preliminary allocation of the purchase price for its acquisition of AbsolutAire was as follows:

For the three and six months ended September 30, 2025, the Company included net sales of $ 4.9 million and $ 11.7 million, respectively, within its consolidated statements of operations attributable to AbsolutAire.

The Company’s preliminary allocation of the purchase price for its acquisition of AbsolutAire is as follows:

Trade accounts receivable

5 unchanged sentences

Purchase price

The Company recorded $ 2.2 million of intangible assets, including customer relationship and trade name assets.

The Company is amortizing the acquired intangible assets using a weighted-average life of approximately eleven years .

The Company allocated the excess of the purchase price over the net assets recognized to goodwill in the amount of $ 1.1 million, which is expected to be deductible for income tax purposes.

Acquisition of L.B.

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The Company primarily utilized its revolving credit facility to fund the purchase price.

Headquartered in Onalaska, Wisconsin with additional manufacturing and distribution operations in Georgia, L.B.

Headquartered in Wisconsin, with additional manufacturing and distribution operations in Georgia, L.B.

White is a leading provider of specialty heating solutions, including direct-fired forced air, radiant, indirect-fired, and electric heating solutions, for the agriculture, construction, and special event industries.

1 unchanged sentence

This acquisition expands the Company’s product portfolio and also broadens its network into adjacent heating markets.

Since the date of the acquisition, the Company has reported the financial results of the L.B.

White business within the Climate Solutions segment.

For the one month during the first quarter of fiscal 2026 that the Company owned L.B.

White, it included $ 3.2 million of net sales of the acquired business within its consolidated statement of operations.

Operating income attributable to the acquired business during the first quarter of fiscal 2026 was not significant.

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The Company has preliminarily allocated the purchase price of L.B.

White to the identifiable tangible and intangible assets acquired and the liabilities assumed based upon their estimated fair values as of the acquisition date, as follows:

For the three and six months ended September 30, 2025, the Company included net sales of $ 15.9 million and $ 19.1 million, respectively, within its consolidated statements of operations attributable to L.B.

The Company’s preliminary allocation of the purchase price for its acquisition of L.B.

White is as follows:

Cash and cash equivalents

7 unchanged sentences

Purchase price

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The Company engaged third-party valuation specialists to assist in estimating the fair value of assets acquired.

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In total, the Company wrote-up acquired inventory by $ 1.0 million.

The Company charged $ 0.2 million of this write-up to cost of sales in June 2025 and expects to charge the remaining $ 0.8 million to cost of sales during the second quarter of fiscal 2026, as the remaining underlying inventory is sold.

The Company charged $ 0.2 million and $ 0.8 million to cost of sales during the first and second quarters of fiscal 2026, respectively, as the underlying inventory was sold.

Property, plant and equipment:

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The fair value of property, plant and equipment will be recognized as depreciation expense in the Company’s results of operations over the expected remaining useful lives of the assets.

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Intangible assets:

The Company determined the fair value of acquired intangible assets by using variations of the income approach.

These methods generally forecast expected future net cash flows discretely associated with each of the identified intangible assets and adjust the forecasts to present value by applying a discount rate intended to reflect risk factors associated with the cash flows and the time value of money.

These methods generally forecast expected future net cash flows associated with each of the identified intangible assets and adjust the forecasts to present value by applying a discount rate intended to reflect risk factors associated with the cash flows and the time value of money.

Acquired intangible assets were as follows:

7 unchanged sentences

Key inputs used in the valuation included future revenue growth rates, customer attrition rates, and discount rates.

The Company determined the value of the acquired L.B.

The Company determined the estimated fair value of the acquired L.B.

White trade name using the relief-from-royalty method, which applies an assumed royalty rate to revenue expected to be derived under the acquired trade name.

The fair value was estimated to be the present value of the royalties saved because the Company owns the trade name.

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Acquisition of Climate by Design

On July 1, 2025, the Company acquired Climate by Design for $ 64.4 million ($ 63.4 million net of cash acquired).

The Company paid $ 64.1 million upon closing and the remaining $ 0.3 million in October 2025.

The Company primarily utilized its revolving credit facility to fund the purchase price.

Based in Minnesota, Climate by Design specializes in desiccant dehumidification technology and critical process air handlers.

This acquisition supports the Company’s growth strategy by expanding its commercial indoor air quality product portfolio.

For both the three and six months ended September 30, 2025, the Company included $ 7.3 million of net sales within its consolidated statements of operations attributable to Climate by Design.

The Company’s preliminary allocation of the purchase price for its acquisition of Climate by Design is as follows:

Cash and cash equivalents

Trade accounts receivable

Property, plant and equipment

Intangible assets

Accounts payable

Accrued compensation and employee benefits

Other liabilities

Purchase price

The Company engaged third-party valuation specialists to assist in estimating the fair value of assets acquired.

The third-party valuations utilized assumptions developed by management and other information compiled by management, including, but not limited to, future expected cash flows.

The Company allocated the excess of the purchase price over the net assets recognized to goodwill in the amount of $ 23.6 million.

Goodwill represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized.

The goodwill recorded as part of the acquisition includes Climate by Design’s workforce and anticipated future revenue and cost synergies.

Goodwill is expected to be deductible for income tax purposes.

Below is a summary of the methodologies and significant assumptions used within the third-party valuations for estimating the fair value of certain classes of acquired assets.

The fair values were primarily based upon significant inputs that are not observable in the market and thus represent Level 3 measurements.

See Note 4 for information regarding Level 3 fair value measurements.

The Company estimated the fair value of acquired work-in-process and finished goods inventory using both the comparative sales and cost of reproduction valuation methods.

For raw materials acquired, the Company estimated the cost of replacement.

The Company wrote-up acquired inventory by $ 0.3 million.

The Company charged the write-up to cost of sales during the second quarter of fiscal 2026 as the underlying inventory was sold.

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Intangible assets:

The Company estimated the fair value of acquired intangible assets by using variations of the income approach.

Acquired intangible assets were as follows:

Gross Carrying Value

Weighted- Average Useful Life

Customer relationships

Acquired technology

Total intangible assets acquired

Customer relationships represent the estimated fair value of Climate by Design’s business relationships with existing customers.

The fair value of customer relationships was estimated using the multi-period excess earnings method, in which the value is derived by projecting the future anticipated after-tax cash flows attributable to the customer relationships.

Key inputs used in the valuation included future revenue growth rates, customer attrition rates, and discount rates.

The Company estimated the fair value of the acquired Climate by Design technology using the relief-from-royalty method, considering estimated royalties that would hypothetically be paid to use the technology.

The Company estimated the fair value of the acquired Climate by Design trade name using the relief-from-royalty method, which applies an assumed royalty rate to revenue expected to be derived under the acquired trade name.

The fair value was estimated to be the present value of the royalties saved because the Company owns the trade name.

Pending disposition of facilities in Germany

In December 2024, the Company signed a definitive agreement to sell its technical service center and administrative support facility in Germany to a real estate investment firm for € 11.5 million ( $ 13.5 million).

In December 2024, the Company signed a definitive agreement to sell its technical service center and administrative support facility in Germany to a real estate investment firm.

The Company closed the technical service center earlier in fiscal 2025 and reduced headcount in light of the sale of three automotive businesses in Germany during fiscal 2024.

The Company expects the sale transaction will close during the second or third quarter of fiscal 2026, subject to remaining closing conditions.

The Company expects to record a gain on sale, net of costs to sell, of approximately $ 4.0 million when the transaction is completed.

As of June 30, 2025 and March 31, 2025, the Company classified $ 8.9 million and $ 8.2 million, respectively, of building and related assets expected to transfer to the buyer as held for sale and presented them within other current assets on its consolidated balance sheets.

Q2 acquisition of Climate by Design International

On July 1, 2025, the Company acquired Climate by Design International (“Climate by Design”).

The Company paid $ 64.1 million upon transaction closing.

The final purchase price is pending and may be adjusted for net working capital.

Based in Minnesota, Climate by Design specializes in desiccant dehumidification technology and critical process air handlers and has annual sales of approximately $ 45.0 million.

This acquisition supports the Company’s growth strategy by expanding its commercial indoor air quality product portfolio.

The financial results for Climate by Design will be reported within the Company’s Climate Solutions segment beginning for the second quarter of fiscal 2026.

In light of market and other transaction-specific factors, the Company and the investment firm have recently been negotiating an amended agreement that contemplates a lower selling price of approximately $ 5.0 million.

Based upon the expected selling price, the Company estimated an implied loss in excess of the building and related assets’ carrying value.

As a result, the Company recorded a non-cash impairment charge of $ 4.1 million during the second quarter of fiscal 2026.

As of September 30, 2025 and March 31, 2025, the Company classified $ 4.7 million and $ 8.2 million, respectively, of building and related assets as held for sale and presented them within other current assets on its consolidated balance sheets.

The Company expects the sale transaction will close during the second half of fiscal 2026, subject to remaining closing conditions.

MODINE MANUFACTURING COMPANY

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Each segment’s revenue is disaggregated by product group and by geographic location.

In connection with the Company’s strategic transformation and application of 80/20 principles, the Company has realigned its segment teams around five market-based product groups, as summarized below.

Effective April 1, 2025 and in connection with the Company’s strategic transformation and application of 80/20 principles, the Company realigned its segment teams around five market-based product groups, as summarized below.

Accordingly, the Company has updated its disaggregated revenue disclosure to reflect the new product group structure.

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In addition to products for traditional powertrains, the On-Highway Applications business provides products and solutions for zero-emission and hybrid vehicles, primarily for commercial vehicle, bus and specialty vehicles.

Three months ended June 30, 2025

Three months ended June 30, 2024

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Three months ended September 30, 2025

Three months ended September 30, 2024

Product groups:

5 unchanged sentences

Geographic location:

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Six months ended September 30, 2025

Six months ended September 30, 2024

Product groups:

Heat transfer solutions

HVAC technologies

Heavy-duty equipment

On-highway applications

Inter-segment sales

Geographic location:

Contract balances

Contract assets and contract liabilities from contracts with customers were as follows:

June 30, 2025

September 30, 2025

March 31, 2025

1 unchanged sentence

Contract liabilities

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Contract assets primarily consist of capitalized costs related to customer-owned tooling contracts, wherein the customer has guaranteed reimbursement, and assets recorded for revenue recognized over time, which represent the Company’s rights to consideration for work completed but not yet billed.

Contract assets are included within other current assets on the Company’s consolidated balance sheets.

The $ 2.8 million increase in contract assets during the first three months of fiscal 2026 primarily resulted from increases in contract assets for revenue recognized over time and capitalized costs related to the Company’s fulfillment of its performance obligations.

The $ 1.6 million decrease in contract assets during the first six months of fiscal 2026 primarily resulted from a decrease in capitalized costs related to the Company’s fulfillment of its performance obligations, partially offset by an increase in contract assets for revenue recognized over time.

Contract liabilities consist of payments received in advance of satisfying performance obligations under customer contracts, including contracts for data center cooling products and customer-owned tooling.

Contract liabilities are included within other current liabilities on the Company’s consolidated balance sheets.

The $ 0.2 million increase in contract liabilities during the first three months of fiscal 2026 resulted from payments received in advance of the Company’s satisfaction of performance obligations.

The $ 5.1 million decrease in contract liabilities during the first six months of fiscal 2026 primarily resulted from the Company’s satisfaction of performance obligations.

Fair Value Measurements

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The fair value of the Company’s long-term debt is disclosed in Note 17.

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Pension cost included the following components:

Three months ended June 30,

Three months ended September 30,

Six months ended September 30,

Interest cost

3 unchanged sentences

The Company did no t make cash contributions to its U.S.

pension plan during the three months ended June 30, 2025.

pension plan during the six months ended September 30, 2025.

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

In June 2024, the Company approved the termination of its primary U.S.

pension plan, which is pending approval from the Pension Benefit Guaranty Corporation.

The Company intends to offer certain participants the option to receive their pension benefits in the form of a lump-sum distribution prior to purchasing annuity contracts to transfer its remaining obligations under the plan.

pension plan.

The Company has offered certain participants the option to receive their pension benefits in the form of a lump-sum distribution and plans to purchase annuity contracts to transfer its remaining obligations under the plan.

In connection with the plan termination, the Company expects to make additional cash contributions in the range of $ 20.0 million to $ 25.0 million to fully fund the plan, on a plan termination basis, and to record non-cash pension settlement charges totaling approximately $ 120.0 million to $ 125.0 million during the second half of fiscal 2026.

The timing and amount of the final cash contribution and settlement charges could materially differ from the Company’s estimates due to the nature and timing of participant settlements, prevailing market and economic conditions, the duration of the termination process, and/or other factors.

Stock-Based Compensation

The Company’s stock-based incentive programs consist of the following:

(i) a long-term incentive plan (“LTIP”) for officers and other executives that authorizes grants of stock awards, stock options, and performance-based awards for retention and performance, (ii) a discretionary equity program for other management and key employees, and (iii) stock awards for non-employee directors.

(i) a long-term incentive plan for officers and other executives that authorizes grants of stock awards, stock options, and performance-based awards for retention and performance, (ii) a discretionary equity program for other management and key employees, and (iii) stock awards for non-employee directors.

The Company calculates compensation expense based upon the fair value of the awards at the time of grant and subsequently recognizes expense ratably over the respective vesting periods of the stock-based awards.

The Company recognized stock-based compensation expense of $ 5.3 million and $ 4.2 million for the three months ended June 30, 2025 and 2024, respectively.

During the first three months of fiscal 2026, the Company granted performance-based stock awards and restricted stock awards.

The Company recognized stock-based compensation expense of $ 2.1 million and $ 5.6 million for the three months ended September 30, 2025 and 2024, respectively.

The Company recognized stock-based compensation expense of $ 7.4 million and $ 9.8 million for the six months ended September 30, 2025 and 2024, respectively.

During the first six months of fiscal 2026, the Company granted performance-based stock awards and restricted stock awards.

The performance metrics for the performance-based stock awards are based upon a target three -year average cash flow return on invested capital and a target three -year average growth in consolidated net earnings before interest, taxes, depreciation, amortization, and certain other adjustments (“Adjusted EBITDA”) at the end of the performance period ending March 31, 2028.

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The weighted-average fair value of stock-based compensation awards granted during the three months ended June 30, 2025 and 2024 were as follows:

Three months ended June 30,

The weighted-average fair value of stock-based compensation awards granted during the six months ended September 30, 2025 and 2024 were as follows:

Six months ended September 30,

Performance stock awards

Restricted stock awards

As of June 30, 2025, unrecognized compensation expense related to non-vested stock-based compensation awards, which will be recognized as expense over the remaining service periods, was as follows:

As of September 30, 2025, unrecognized compensation expense related to non-vested stock-based compensation awards, which will be recognized as expense over the remaining service periods, was as follows:

Weighted-Average

3 unchanged sentences

Restricted stock awards

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Restructuring Activities

Restructuring and repositioning expenses were as follows:

Three months ended June 30,

Three months ended September 30,

Six months ended September 30,

Employee severance and related benefits

Other restructuring and repositioning expenses

During the first three months of fiscal 2026, restructuring and repositioning expenses primarily consisted of severance expenses, the majority of which were recorded in the Performance Technologies segment.

The Performance Technologies severance charges were primarily recorded in Europe and North America and include severance related to targeted headcount reductions intended to reduce selling, general and administrative (“SG&A”) and operational expenses.

During the first six months of fiscal 2026, restructuring and repositioning expenses primarily consisted of severance expenses.

The severance charges were primarily recorded in Europe and North America and include severance related to targeted headcount reductions intended to reduce selling, general and administrative (“SG&A”) and operational expenses.

In addition, as part of its transformational initiatives supported by 80/20 principles, the Company is taking steps to optimize the efficiency of its supply chain and manufacturing processes in order to improve profit margins in the Climate Solutions and Performance Technologies segments.

These restructuring activities have included transferring the production and warehousing for certain product lines among its facilities.

During the first three months of fiscal 2025, restructuring and repositioning expenses primarily consisted of severance expenses recorded in the Performance Technologies segment.

These severance charges were primarily related to the closure of a technical service center and other targeted headcount reductions in Europe.

In addition, the Company incurred equipment transfer costs within the Performance Technologies and Climate Solutions segments.

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

During the first six months of fiscal 2025, restructuring and repositioning expenses primarily consisted of severance expenses recorded in the Performance Technologies segment.

These severance charges were primarily recorded in Europe and include severance related to the closure of a technical service center and other targeted headcount reductions.

In addition, the Company incurred equipment transfer costs within the Climate Solutions and Performance Technologies segments.

The Company accrues severance in accordance with its written plans, procedures, and relevant statutory requirements.

Changes in accrued severance were as follows:

Three months ended June 30,

Three months ended September 30,

Beginning balance

1 unchanged sentence

Ending balance

Six months ended September 30,

Beginning balance

Effect of exchange rate changes

Ending balance

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Other Income and Expense

Other income and expense consisted of the following:

Three months ended June 30,

Three months ended September 30,

Six months ended September 30,

Interest income

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(b) Net periodic benefit cost for the Company’s pension and postretirement plans is exclusive of service cost.

The Company’s effective tax rate for the three months ended June 30, 2025 and 2024 was 21.3 percent and 28.2 percent, respectively.

The effective tax rate for the first quarter of fiscal 2026 is lower than the first quarter of the prior year, primarily due to changes in the mix and amount of foreign and U.S.

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

The OBBBA includes the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, including 100 % bonus depreciation and domestic research cost expensing.

It also includes modifications to the international tax framework.

The legislation has multiple effective dates, with certain provisions impacting the Company through fiscal 2027.

During the second quarter of fiscal 2026, the Company recognized the impacts of the OBBBA for the provisions currently enacted, including the provision regarding domestic research costs.

The Company is continuing to assess provisions that are expected to impact future periods.

The Company’s effective tax rate for the three months ended September 30, 2025 and 2024 was 29.7 percent and 30.1 percent, respectively.

The Company’s effective tax rate for the six months ended September 30, 2025 and 2024 was 25.4 percent and 29.2 percent, respectively.

The effective tax rates for fiscal 2026 are lower than the prior year and included favorable changes in the mix and amount of foreign and U.S.

The decreases in the effective tax rates for fiscal 2026 were partially offset by impacts associated with provisions of the OBBBA on state deferred taxes and the utilization of foreign tax credits, which increased income tax expense during the second quarter of fiscal 2026 by $ 3.1 million.

The Company records valuation allowances against its net deferred tax assets to the extent it determines it is more likely than not that such assets will not be realized in the future.

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In addition, the Company considers the duration of statutory carryforward periods and historical financial results.

At June 30, 2025, valuation allowances against deferred tax assets in the U.S.

At September 30, 2025, valuation allowances against deferred tax assets in the U.S.

and in certain foreign jurisdictions totaled $ 47.3 million and $ 28.0 million, respectively.

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The Company does not anticipate a significant change in unrecognized tax benefits during the remainder of fiscal 2026.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

The OBBBA includes the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, including 100 % bonus depreciation and domestic research cost expensing.

It also includes modifications to the international tax framework.

The legislation has multiple effective dates, with certain provisions being implemented through the Company’s fiscal 2027.

The Company is currently assessing the impact on the consolidated financial statements.

Earnings Per Share

The components of basic and diluted earnings per share were as follows:

Three months ended June 30,

Three months ended September 30,

Six months ended September 30,

Net earnings attributable to Modine

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Net earnings per share – diluted

There were no securities that were anti-dilutive for the three months ended June 30, 2025 and 2024.

There were no securities that were anti-dilutive in the periods presented above.

Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash consisted of the following:

June 30, 2025

September 30, 2025

March 31, 2025

3 unchanged sentences

Restricted cash, which is reported within other current assets on the consolidated balance sheets, consists primarily of deposits for contractual guarantees or commitments required for rents, import and export duties, and commercial agreements.

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Inventories consisted of the following:

June 30, 2025

September 30, 2025

March 31, 2025

3 unchanged sentences

Total inventories

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Property, Plant and Equipment

Property, plant and equipment, including depreciable lives, consisted of the following:

June 30, 2025

September 30, 2025

March 31, 2025

5 unchanged sentences

Net property, plant and equipment

The June 30, 2025 and March 31, 2025 property, plant and equipment in the table above exclude amounts classified as held for sale.

The September 30, 2025 and March 31, 2025 property, plant and equipment in the table above exclude amounts classified as held for sale.

See Note 2 for additional information.

Goodwill and Intangible Assets

The following table presents a roll forward of the carrying value of goodwill from March 31, 2025 to June 30, 2025.

The following table presents a roll forward of the carrying value of goodwill from March 31, 2025 to September 30, 2025.

Climate Solutions

2 unchanged sentences

Effect of exchange rate changes

Goodwill, June 30, 2025

(a) During the first quarter of fiscal 2026, the Company recorded $ 25.7 million and $ 1.1 million of goodwill in connection with its acquisition of L.B.

White and AbsolutAire, respectively.

Goodwill, September 30, 2025

(a) During the first six months of fiscal 2026, the Company recorded $ 25.7 million, $ 23.6 million, and $ 1.1 million of goodwill in connection with its acquisition of L.B.

White, Climate by Design, and AbsolutAire, respectively.

See Note 2 for additional information.

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Intangible assets consisted of the following:

June 30, 2025

September 30, 2025

March 31, 2025

2 unchanged sentences

Total intangible assets

During the first quarter of fiscal 2026 and in connection with its acquisitions of L.B.

White and AbsolutAire, the Company recorded customer relationship and trade name intangible assets totaling $ 39.8 million and $ 12.5 million, respectively.

The Company recorded amortization expense of $ 5.7 million and $ 6.9 million for the three months ended June 30, 2025 and 2024, respectively.

In connection with its acquisitions of three businesses during the first half of fiscal 2026, the Company recorded customer relationship, trade name, and acquired technology intangible assets totaling $ 48.1 million, $ 15.7 million, and $ 3.5 million, respectively.

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The Company recorded amortization expense of $ 4.9 million and $ 6.9 million for the three months ended September 30, 2025 and 2024, respectively.

The Company recorded amortization expense of $ 10.6 million and $ 13.8 million for the six months ended September 30, 2025 and 2024, respectively.

The Company estimates that it will record approximately $ 10.0 million of amortization expense during the remainder of fiscal 2026.

2 unchanged sentences

Changes in accrued warranty costs were as follows:

Three months ended June 30,

Three months ended September 30,

Beginning balance

1 unchanged sentence

Adjustments to pre-existing warranties

Business acquisitions (a)

Effect of exchange rate changes

Ending balance

Six months ended September 30,

Beginning balance

Warranties recorded at time of sale

Adjustments to pre-existing warranties

Business acquisitions (a)

Effect of exchange rate changes

Ending balance

(a) See Note 2 for additional information on acquisitions during fiscal 2026 .

MODINE MANUFACTURING COMPANY

4 unchanged sentences

Balance Sheet Location

June 30, 2025

September 30, 2025

March 31, 2025

12 unchanged sentences

Long-term debt

(a) Finance right of use ( “ ROU ” ) assets were recorded net of accumulated amortization of $ 4.5 million and $ 4.2 million as of June 30, 2025 and March 31, 2025, respectively.

(a) Finance right of use ( “ ROU ” ) assets were recorded net of accumulated amortization of $ 4.6 million and $ 4.2 million as of September 30, 2025 and March 31, 2025, respectively.

Components of lease expense

The components of lease expense were as follows:

Three months ended June 30,

Three months ended September 30,

Six months ended September 30,

Operating lease expense (a)

3 unchanged sentences

Total lease expense

(a) For the three months ended June 30, 2025 and 2024, operating lease expense included short-term lease expense of $ 2.4 million and $ 1.3 million, respectively.

(a) For the three and six months ended September 30, 2025, operating lease expense included short-term lease expense of $ 2.6 million and $ 5.0 million, respectively.

For the three and six months ended September 30, 2024, operating lease expense included short-term lease expense of $ 1.8 million and $ 3.1 million, respectively.

Variable lease expense was not significant.

During the second quarter of fiscal 2026, the Company signed a 7-year operating lease for a manufacturing facility with future lease payments totaling approximately $ 44.0 million.

The Company expects this lease will commence in the third quarter of fiscal 2026.

The Company is increasing its production capacity to support organic growth opportunities within its Data Center business.

MODINE MANUFACTURING COMPANY

1 unchanged sentence

(In millions, except per share amounts)

In July 2025, the Company executed an amended and restated credit agreement with a syndicate of banks that provides for a multi-currency $ 400.0 million revolving credit facility and a $ 200.0 million term loan facility maturing in July 2030.

In addition, the credit agreement provides for shorter-duration swingline loans.

This credit agreement modified the Company’s then existing revolving credit and term loan facilities, which would have matured in October 2027.

In connection with the credit agreement modification, the Company capitalized $ 2.3 million of debt issuance costs, which will be amortized as interest expense over the term of the debt.

Long-term debt consisted of the following:

June 30, 2025

September 30, 2025

March 31, 2025

7 unchanged sentences

Long-term debt, including the current portion of long-term debt, matures as follows:

Fiscal Year (a)

Remainder of 2026

2031 & beyond

(a) Amounts reflect scheduled maturity payments as of June 30, 2025.

As described below, the Company executed an amended credit agreement in July 2025, which extended the maturity dates for the revolving credit and term loan facilities.

Borrowings under the revolving credit, swingline and term loan facilities bear interest at variable rates, based upon the applicable reference rate and including a margin percentage dependent upon the Company’s leverage ratio, as described below.

At June 30, 2025, the weighted-average interest rate for revolving credit facility borrowings and the term loans was 5.8 and 5.3 percent, respectively.

Borrowings under the revolving credit, swingline and term loan facility bear interest at variable rates, based upon the applicable reference rate and including a margin percentage dependent upon the Company’s leverage ratio, as described below.

At September 30, 2025, the interest rate for revolving credit facility borrowings and the term loan was 5.5 percent and 5.4 percent, respectively.

Based upon the terms of the credit agreement, the Company classifies borrowings under its revolving credit and swingline facilities as long-term and short-term debt, respectively, on its consolidated balance sheets.

At June 30, 2025, the Company’s borrowings under its revolving credit facility totaled $ 221.0 million and domestic letters of credit totaled $ 6.2 million.

As a result, available borrowing capacity under the Company’s revolving credit facility was $ 47.8 million as of June 30, 2025.

At June 30, 2025 and March 31, 2025 the Company had no borrowings under the swingline facility.

At September 30, 2025, the Company’s borrowings under its revolving credit facilities totaled $ 265.0 million and domestic letters of credit totaled $ 6.2 million.

As a result, available borrowing capacity under the Company’s revolving credit facility was $ 128.8 million as of September 30, 2025.

At September 30, 2025 and March 31, 2025, the Company had no borrowings under the swingline facility.

At March 31, 2025, the Company’s borrowings under its revolving credit facility totaled $ 30.0 million.

The Company also maintains credit agreements for its foreign subsidiaries.

There were no short-term borrowings related to these foreign credit agreements at June 30, 2025.

At March 31, 2025, the outstanding short-term borrowings on foreign credit agreements totaled $ 9.3 million.

MODINE MANUFACTURING COMPANY

1 unchanged sentence

(In millions, except per share amounts)

This credit agreement modified the Company’s then-existing revolving credit and term loan facilities, which would have matured in October 2027.

The Company also amended the agreement governing its Senior Notes to conform the applicable terms to those of the aforementioned amended and restated credit agreement.

The Company also maintains credit agreements for its foreign subsidiaries.

The outstanding short-term borrowings related to these foreign credit agreements totaled $ 12.4 million and $ 9.3 million at September 30, 2025 and March 31, 2025, respectively.

Indebtedness under the Company’s credit agreement and Senior Notes is secured by substantially all domestic assets, excluding real estate.

4 unchanged sentences

In addition, the agreements may require prepayment in the event of certain asset sales.

Financial covenants within the credit agreements include a leverage ratio covenant, which requires the Company to limit the ratio of its consolidated indebtedness, less a portion of its cash balances, both as defined by the credit agreements, to its consolidated net earnings before interest, taxes, depreciation, amortization, and certain other adjustments (“Adjusted EBITDA”).

The credit agreements existing as of June 30, 2025 included a leverage ratio covenant of no more than three and one-quarter times.

As amended, the credit agreements include a leverage ratio covenant of no more than three and one-half times.

Financial covenants within the credit agreements include a leverage ratio covenant, which requires the Company to limit its consolidated indebtedness, less a portion of its cash balances, both as defined by the credit agreements, to no more than three and one-half times consolidated net earnings before interest, taxes, depreciation, amortization, and certain other adjustments (“Adjusted EBITDA”).

The Company must also maintain a ratio of Adjusted EBITDA of at least three times consolidated interest expense.

As of June 30, 2025, the Company was in compliance with its debt covenants.

As of September 30, 2025, the Company was in compliance with its debt covenants.

The Company estimates the fair value of long-term debt using discounted future cash flows at rates offered to the Company for similar debt instruments of comparable maturities.

As of June 30, 2025 and March 31, 2025, the carrying value of the Company’s long-term debt approximated fair value, with the exception of the Senior Notes, which had an aggregate fair value of $ 112.2 million and $ 116.6 million, respectively.

As of September 30, 2025 and March 31, 2025, the carrying value of the Company’s long-term debt approximated fair value, with the exception of the Senior Notes, which had an aggregate fair value of $ 105.3 million and $ 116.6 million, respectively.

The fair value of the Company’s long-term debt is categorized as Level 2 within the fair value hierarchy.

5 unchanged sentences

In instances where a range of loss can be reasonably estimated for a probable environmental liability, but no amount within the range is a better estimate than any other amount, the Company accrues the minimum of the range.

The Company’s accruals for environmental matters totaled $ 15.0 million and $ 15.8 million as of June 30, 2025 and March 31, 2025, respectively.

The Company’s accruals for environmental matters totaled $ 14.1 million and $ 15.8 million as of September 30, 2025 and March 31, 2025, respectively.

As additional information becomes available regarding environmental matters, the Company will re-assess the liabilities and revise the estimated accruals, if necessary.

13 unchanged sentences

Changes in accumulated other comprehensive loss were as follows:

Three months ended June 30, 2025

Three months ended September 30, 2025

Six months ended September 30, 2025

Benefit Plans

Beginning balance

Other comprehensive income before reclassifications

Other comprehensive income (loss) before reclassifications

Reclassifications:

1 unchanged sentence

Realized losses - net (b)

Total other comprehensive income

Total other comprehensive income (loss)

Ending balance

Three months ended June 30, 2024

Three months ended September 30, 2024

Six months ended September 30, 2024

Benefit Plans

Beginning balance

Other comprehensive income (loss) before reclassifications

Other comprehensive income before reclassifications

Reclassifications:

Amortization of unrecognized net loss (a)

Total other comprehensive income (loss)

Realized gains - net (b)

Total other comprehensive income

Ending balance

11 unchanged sentences

Inter-segment sales are accounted for based upon an established markup over production costs.

Three months ended June 30, 2025

Corporate and

Three months ended September 30, 2025

Three months ended September 30, 2024

External sales

3 unchanged sentences

Restructuring expenses

Impairment charge

Operating income

Three months ended June 30, 2024

Corporate and

Six months ended September 30, 2025

Six months ended September 30, 2024

External sales

3 unchanged sentences

Restructuring expenses

Impairment charge

Operating income

SG&A expenses at Corporate include legal, finance, general corporate and central services expenses and other costs that are either not directly attributable to an operating segment or not considered when the CODM evaluates segment performance.

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

The following is a summary of capital expenditures and depreciation and amortization expense by segment:

Three months ended June 30,

Three months ended September 30,

Six months ended September 30,

Capital expenditures:

2 unchanged sentences

Total capital expenditures

Three months ended June 30,

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Three months ended September 30,

Six months ended September 30,

Depreciation and amortization expense:

3 unchanged sentences

The following is a summary of segment assets, comprised entirely of trade accounts receivable and inventories, and other assets:

June 30, 2025

September 30, 2025

March 31, 2025

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements