What changed in this filing

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Item 1. Financial Statements

2026-02-05 compared with 2025-10-29 · 212 added, 164 removed, 584 unchanged (39% of the section changed)

2 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

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

For the three and nine months ended December 31, 2025 and 2024

(In millions, except per share amounts)

Three months ended September 30,

Six months ended September 30,

Three months ended December 31,

Nine months ended December 31,

Cost of sales

4 unchanged sentences

Interest expense

Other expense – net

Earnings before income taxes

Pension termination charge

Other (expense) income – net

(Loss) earnings before income taxes

Provision for income taxes

Net (loss) earnings

Net earnings attributable to noncontrolling interest

Net earnings attributable to Modine

Net earnings per share attributable to Modine shareholders:

Net (loss) earnings attributable to Modine

Net (loss) earnings per share attributable to Modine shareholders:

Weighted-average shares outstanding:

2 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

For the three and nine months ended December 31, 2025 and 2024

(In millions)

Three months ended September 30,

Six months ended September 30,

Three months ended December 31,

Nine months ended December 31,

Net (loss) earnings

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

3 unchanged sentences

Total other comprehensive income (loss)

Comprehensive income

Comprehensive income attributable to noncontrolling interest

Comprehensive income attributable to Modine

Comprehensive income (loss)

Comprehensive (income) loss attributable to noncontrolling interest

Comprehensive income (loss) attributable to Modine

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

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

September 30, 2025 and March 31, 2025

December 31, 2025 and March 31, 2025

(In millions, except per share amounts)

September 30, 2025

December 31, 2025

March 31, 2025

32 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended September 30, 2025 and 2024

For the nine months ended December 31, 2025 and 2024

(In millions)

Six months ended September 30,

Nine months ended December 31,

Cash flows from operating activities:

2 unchanged sentences

Impairment charge

Pension termination charge

Stock-based compensation expense

12 unchanged sentences

Repayments of debt

Borrowings (repayments) on bank overdraft facilities – net

Repayments on bank overdraft facilities – net

Purchases of treasury stock

8 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

For the three and six months ended September 30, 2025

For the three and nine months ended December 31, 2025

(In millions)

12 unchanged sentences

Balance, September 30, 2025

Net (loss) earnings

Other comprehensive income (loss)

Stock options and awards

Purchases of treasury stock

Stock-based compensation expense

Balance, December 31, 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 and six months ended September 30, 2024

For the three and nine months ended December 31, 2024

(In millions)

12 unchanged sentences

Balance, September 30, 2024

Other comprehensive loss

Stock options and awards

Purchases of treasury stock

Stock-based compensation expense

Balance, December 31, 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 six months of fiscal 2026 are not necessarily indicative of the results to be expected for the full year.

Results for the first nine 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.

6 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 $ 15.0 million and $ 15.5 million at September 30, 2025 and March 31, 2025, respectively.

The outstanding obligations under this program, included within accounts payable on the consolidated balance sheets, totaled $ 13.7 million and $ 15.5 million at December 31, 2025 and March 31, 2025, respectively.

New accounting guidance:

4 unchanged sentences

Acquisitions and Dispositions

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

The Company acquired three businesses during the first and second quarters of fiscal 2026:

AbsolutAire, Inc.

2 unchanged sentences

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.

At the time the December 31, 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.

3 unchanged sentences

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.

During the first nine 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.

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.

For the three and nine months ended December 31, 2025, the Company included net sales of $ 7.0 million and $ 18.7 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:

17 unchanged sentences

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

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.

For the three and nine months ended December 31, 2025, the Company included net sales of $ 25.6 million and $ 44.7 million, respectively, within its consolidated statements of operations attributable to L.B.

During the third quarter of fiscal 2026 and in connection with harmonizing internal controls and accounting processes at L.B.

White, the Company identified and recorded measurement period adjustments, primarily related to inventory and associated reserves.

These adjustments, including the impact on deferred income taxes, resulted in an increase to goodwill of $ 1.4 million.

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

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

9 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.

17 unchanged sentences

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:

7 unchanged sentences

Customer relationships represent the estimated fair value of L.B.

White’s business relationships with existing customers, the majority of which are dealers and/or distributors in the agriculture and portables heating markets.

White’s business relationships with existing customers, the majority of which are dealers and/or distributors in the agriculture and portable heating markets.

The fair value of customer relationships was determined 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.

3 unchanged sentences

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

4 unchanged sentences

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.

For the three and nine months ended December 31, 2025, the Company included $ 10.2 million and $ 17.5 million, respectively, 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:

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.

11 unchanged sentences

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:

13 unchanged sentences

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.

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.

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

1 unchanged sentence

(In millions, except per share amounts)

Pending disposition of facilities in Germany

In fiscal 2025, 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.

During the second quarter of fiscal 2026 and based upon a lower expected selling price of approximately $ 5.0 million in light of market and other transaction-specific factors, 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 December 31, 2025 and March 31, 2025, the Company classified $ 4.6 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 fourth quarter of fiscal 2026 or the first quarter of fiscal 2027.

Revenue Recognition

23 unchanged sentences

(In millions, except per share amounts)

Three months ended September 30, 2025

Three months ended September 30, 2024

Three months ended December 31, 2025

Three months ended December 31, 2024

Product groups:

5 unchanged sentences

Geographic location:

Six months ended September 30, 2025

Six months ended September 30, 2024

Nine months ended December 31, 2025

Nine months ended December 31, 2024

Product groups:

7 unchanged sentences

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

September 30, 2025

December 31, 2025

March 31, 2025

4 unchanged sentences

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

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

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.

The $ 8.8 million increase in contract assets during the first nine months of fiscal 2026 primarily resulted from an increase in contract assets for revenue recognized over time, partially offset by a decrease in capitalized costs related to the Company’s fulfillment of its performance obligations.

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 $ 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.

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

The $ 4.0 million decrease in contract liabilities during the first nine months of fiscal 2026 primarily resulted from the Company’s satisfaction of performance obligations.

Fair Value Measurements

13 unchanged sentences

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

During the third quarter of fiscal 2026 and in connection with the previously-announced plan termination, the Company contributed $ 14.9 million to fully fund its primary U.S.

pension plan.

In addition, the Company settled all future obligations under the pension plan through a combination of lump-sum payments to participants and the purchase of irrevocable annuity contracts.

As a result, the Company recorded a non-cash pension termination charge of $ 116.1 million during the third quarter of fiscal 2026 to recognize actuarial losses that were previously included within accumulated other comprehensive loss on its consolidated balance sheet.

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Pension cost included the following components:

Three months ended September 30,

Six months ended September 30,

Three months ended December 31,

Nine months ended December 31,

Interest cost

1 unchanged sentence

Amortization of unrecognized net loss

Pension termination charge (a)

Net periodic benefit cost

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

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.

(a) As described above, the Company recorded a $ 116.1 million charge during the third quarter of fiscal 2026 in connection with the termination of its primary U.S.

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, or other factors.

Stock-Based Compensation

1 unchanged sentence

(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 $ 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 Company calculates stock-based 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 $ 6.7 million and $ 6.9 million for the three months ended December 31, 2025 and 2024, respectively.

The Company recognized stock-based compensation expense of $ 14.1 million and $ 16.7 million for the nine months ended December 31, 2025 and 2024, respectively.

During the first nine 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.

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,

The weighted-average fair value of stock-based compensation awards granted during the nine months ended December 31, 2025 and 2024 were as follows:

Nine months ended December 31,

Performance stock awards

Restricted stock awards

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:

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

As of December 31, 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 September 30,

Six months ended September 30,

Three months ended December 31,

Nine months ended December 31,

Employee severance and related benefits

Other restructuring and repositioning expenses

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

During the first nine 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 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, as part of its transformational initiatives supported by 80/20 principles, the Company is taking steps to optimize its supply chain and manufacturing footprint in order to support its expansion of manufacturing capacity in the U.S.

for data center products and to improve profit margins.

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

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

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

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

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

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 September 30,

Three months ended December 31,

Beginning balance

Additions (a)

Effect of exchange rate changes

Ending balance

Six months ended September 30,

Nine months ended December 31,

Beginning balance

Additions (a)

Effect of exchange rate changes

Ending balance

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

(a) The fiscal 2026 and 2025 amounts exclude $ 0.8 million and $ 1.4 million, respectively, of non-cash severance expense resulting from the accelerated vesting of certain stock-based compensation awards incurred in connection with restructuring actions .

Other Income and Expense

Other income and expense consisted of the following:

Three months ended September 30,

Six months ended September 30,

Three months ended December 31,

Nine months ended December 31,

Interest income

1 unchanged sentence

Net periodic benefit cost (b)

Total other expense – net

Total other (expense) income – net

(a) Foreign currency transactions primarily consist of foreign currency transaction gains and losses on the re-measurement or settlement of foreign currency-denominated assets and liabilities, including intercompany loans and transactions denominated in a foreign currency, along with gains and losses on certain foreign currency exchange contracts.

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

(b) Net periodic benefit cost for the Company’s pension and postretirement plans is exclusive of service cost and the $ 116.1 million pension termination charge recorded in the third quarter of fiscal 2026.

See Note 5 for additional information.

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

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.

The OBBBA includes the permanent extension of certain 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 began recognizing the impacts of the OBBBA for the provisions currently enacted during the second quarter of fiscal 2026, 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’s effective tax rate for the three months ended December 31, 2025 and 2024 was ( 21.6 ) percent and 24.0 percent, respectively.

The Company’s effective tax rate for the nine months ended December 31, 2025 and 2024 was 45.3 percent and 27.7 percent, respectively.

The effective tax rates for fiscal 2026 were negatively impacted by a non-cash pension termination charge of $ 116.1 million recorded during the third quarter of fiscal 2026;

see Note 5 for information regarding the U.S.

pension plan termination.

The pension termination charge resulted in a net income tax benefit of $ 13.1 million, which included a $ 16.8 million income tax detriment recorded to clear disproportionate income tax effects from accumulated other comprehensive loss.

In addition, the effective tax rates for fiscal 2026 were negatively impacted by provisions of the OBBBA on state deferred taxes and the utilization of foreign tax credits, which increased income tax expense during the three and nine months ended December 31, 2025 by $ 0.6 million and $ 3.7 million, respectively.

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.

2 unchanged sentences

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

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

At December 31, 2025, valuation allowances against deferred tax assets in the U.S.

and in certain foreign jurisdictions totaled $ 48.7 million and $ 29.0 million, respectively.

2 unchanged sentences

and certain foreign jurisdictions, could necessitate the establishment of further valuation allowances.

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Accounting policies for interim reporting require the Company to adjust its effective tax rate each quarter to be consistent with its estimated annual effective tax rate.

3 unchanged sentences

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

MODINE MANUFACTURING COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts)

Earnings Per Share

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

Three months ended September 30,

Six months ended September 30,

Net earnings attributable to Modine

Three months ended December 31,

Nine months ended December 31,

Net (loss) earnings attributable to Modine

Weighted-average shares outstanding – basic

1 unchanged sentence

Weighted-average shares outstanding – diluted

Earnings per share:

Net earnings per share – basic

Net earnings per share – diluted

(Loss) earnings per share:

Net (loss) earnings per share – basic

Net (loss) earnings per share – diluted

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

For the three months ended December 31, 2025, the total number of potentially-dilutive securities was 1.0 million.

However, these securities were not included in the computation of diluted net loss per share, since to do so, would have decreased the loss per share.

Cash, Cash Equivalents and Restricted Cash

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

September 30, 2025

December 31, 2025

March 31, 2025

4 unchanged sentences

Inventories consisted of the following:

September 30, 2025

December 31, 2025

March 31, 2025

8 unchanged sentences

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

September 30, 2025

December 31, 2025

March 31, 2025

5 unchanged sentences

Net property, plant and equipment

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

The December 31, 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 September 30, 2025.

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

Climate Solutions

2 unchanged sentences

Effect of exchange rate changes

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.

Goodwill, December 31, 2025

(a) During the first nine months of fiscal 2026, the Company recorded $ 27.1 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.

1 unchanged sentence

Intangible assets consisted of the following:

September 30, 2025

December 31, 2025

March 31, 2025

2 unchanged sentences

Total intangible assets

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.

In connection with its acquisitions of three businesses during the first nine months 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

1 unchanged sentence

(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 recorded amortization expense of $ 5.2 million and $ 6.9 million for the three months ended December 31, 2025 and 2024, respectively.

The Company recorded amortization expense of $ 15.8 million and $ 20.7 million for the nine months ended December 31, 2025 and 2024, respectively.

The Company estimates that it will record approximately $ 5.0 million of amortization expense during the remainder of fiscal 2026.

2 unchanged sentences

Changes in accrued warranty costs were as follows:

Three months ended September 30,

Three months ended December 31,

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,

Nine months ended December 31,

Beginning balance

11 unchanged sentences

Balance Sheet Location

September 30, 2025

December 31, 2025

March 31, 2025

12 unchanged sentences

Long-term debt

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

(a) Finance right of use ( “ ROU ” ) assets were recorded net of accumulated amortization of $ 4.7 million and $ 4.2 million as of December 31, 2025 and March 31, 2025, respectively.

The increases in operating lease ROU assets and liabilities from March 31, 2025 to December 31, 2025 primarily resulted from the commencement of a 7-year manufacturing facility lease within the Climate Solutions segment.

During the third quarter of fiscal 2026, the Company signed a 5-year operating lease for a manufacturing facility with future lease payments totaling approximately $ 10.0 million.

The Company expects this lease will commence during the fourth quarter of fiscal 2026.

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

Components of lease expense

The components of lease expense were as follows:

Three months ended September 30,

Six months ended September 30,

Three months ended December 31,

Nine months ended December 31,

Operating lease expense (a)

3 unchanged sentences

Total lease expense

(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.

(a) For the three and nine months ended December 31, 2025, operating lease expense included short-term lease expense of $ 3.1 million and $ 8.1 million, respectively.

For the three and nine months ended December 31, 2024, operating lease expense included short-term lease expense of $ 1.7 million and $ 4.8 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 July 2025, the Company executed an amended and restated credit agreement with a syndicate of banks 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.

1 unchanged sentence

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.

In December 2025, the Company further amended the credit agreement primarily to increase the borrowing capacity under the revolving credit facility by $ 150.0 million to $ 550.0 million.

Long-term debt consisted of the following:

September 30, 2025

December 31, 2025

March 31, 2025

10 unchanged sentences

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.

At December 31, 2025, the interest rate for revolving credit facility borrowings and the term loan was 5.1 percent and 5.0 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 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 December 31, 2025, the Company’s borrowings under its revolving credit facilities totaled $ 327.0 million and domestic letters of credit totaled $ 6.2 million.

As a result, available borrowing capacity under the Company’s revolving credit facility was $ 216.8 million as of December 31, 2025.

At December 31, 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.

3 unchanged sentences

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.

The outstanding short-term borrowings related to these foreign credit agreements totaled $ 1.2 million and $ 9.3 million at December 31, 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.

6 unchanged sentences

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

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

As of December 31, 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 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.

As of December 31, 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 $ 90.7 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 $ 14.1 million and $ 15.8 million as of September 30, 2025 and March 31, 2025, respectively.

The Company’s accruals for environmental matters totaled $ 14.0 million and $ 15.8 million as of December 31, 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 September 30, 2025

Six months ended September 30, 2025

Three months ended December 31, 2025

Nine months ended December 31, 2025

Benefit Plans

4 unchanged sentences

Amortization of unrecognized net loss (a)

Realized losses - net (b)

Total other comprehensive income (loss)

Pension termination charge (b)

Realized losses - net (c)

Income taxes (d)

Total other comprehensive income

Ending balance

Three months ended September 30, 2024

Six months ended September 30, 2024

Three months ended December 31, 2024

Nine months ended December 31, 2024

Benefit Plans

1 unchanged sentence

Beginning balance

Other comprehensive income before reclassifications

Other comprehensive income (loss) before reclassifications

Reclassifications:

Amortization of unrecognized net loss (a)

Realized gains - net (b)

Total other comprehensive income

Realized gains - net (c)

Total other comprehensive income (loss)

Ending balance

1 unchanged sentence

See Note 5 for additional information about the Company’s pension plans.

(b) Amounts represent net gains and losses associated with cash flow hedges that were reclassified to net earnings.

(b) During the third quarter of fiscal 2026, the Company recognized $ 116.1 million of net actuarial losses related to the termination of its primary U.S.

pension plan.

See Note 5 for additional information.

(d) Income taxes related to defined benefit plans include a $ 13.1 million benefit related to the pension termination charge described above.

See Note 9 for additional information.

MODINE MANUFACTURING COMPANY

7 unchanged sentences

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

Three months ended September 30, 2025

Three months ended September 30, 2024

Three months ended December 31, 2025

Three months ended December 31, 2024

External sales

3 unchanged sentences

Restructuring expenses

Impairment charge

Operating income

Six months ended September 30, 2025

Six months ended September 30, 2024

Nine months ended December 31, 2025

Nine months ended December 31, 2024

External sales

7 unchanged sentences

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

Three months ended September 30,

Six months ended September 30,

Three months ended December 31,

Nine months ended December 31,

Capital expenditures:

5 unchanged sentences

(In millions, except per share amounts)

Three months ended September 30,

Six months ended September 30,

Three months ended December 31,

Nine months ended December 31,

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:

September 30, 2025

December 31, 2025

March 31, 2025

2 unchanged sentences

(a) Represents cash and cash equivalents, other current assets, property plant and equipment, intangible assets, goodwill, deferred income taxes, and other noncurrent assets for the Climate Solutions and Performance Technologies segments and Corporate.

Proposed Reverse Morris Trust Transaction

In January 2026, the Company and Gentherm Incorporated (“Gentherm”) announced that they had entered into definitive agreements whereby the Company will spin-off and simultaneously combine its Performance Technologies segment businesses with Gentherm in a Reverse Morris Trust transaction.

Gentherm, a Michigan-based corporation, is a global leader of innovative thermal management and pneumatic comfort technologies.

The transaction is intended to establish Gentherm as a scaled leader in thermal management.

The Company will retain its Climate Solutions segment businesses, creating a pure-play climate solutions company focused on the data center and commercial HVAC and refrigeration markets.

Under the terms of the agreements, at the time of the spin-off of its Performance Technologies segment businesses, the Company’s shareholders will receive newly-issued Gentherm stock, representing ownership of approximately 40 percent of the combined company.

In addition, immediately prior to transaction closing, the Company is to receive cash proceeds of $ 210.0 million, subject to adjustment.

In total, the transaction value is approximately $ 1.0 billion.

The Company anticipates this transaction will close by the end of calendar 2026, subject to approval by Gentherm’s shareholders and other closing conditions, including regulatory approvals.

Under the Reverse Morris Trust structure, the transaction is intended to be generally tax-free for U.S.

federal income tax purposes for the Company and its shareholders.

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