What changed in this filing

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Item 1. Business

2026-05-27 compared with 2025-05-21 · 148 added, 135 removed, 211 unchanged (57% of the section changed)

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We first announced our vision for a “new” Modine in late fiscal 2021.

Over the last four fiscal years, we have simplified and re-segmented our organization and have aligned resources around specific strategies and market-based verticals.

Over the last five fiscal years, we have simplified and re-segmented our organization and have aligned resources around specific strategies and market-based verticals.

Our leadership and teams have embraced 80/20 principles, which focus on the rule that 80 percent of outputs result from 20 percent of inputs.

Our teams have created a high-performance culture that focuses resources on products and markets with the highest sustainable growth opportunities and best return profiles, while simplifying and improving our processes.

Through our application of 80/20 principles, we have achieved transformative change and significant improvements in our businesses and our financial results — and we are not done yet.

During fiscal 2025, our consolidated net sales were $2.6 billion, a 7 percent increase from $2.4 billion in fiscal 2024, primarily driven by higher sales in our Climate Solutions segment, partially offset by lower sales in our Performance Technologies segment .

The higher Climate Solutions segment sales included significant sales growth to data center customers, both incremental sales from the Scott Springfield Mfg.

Inc (“Scott Springfield Manufacturing”) business, a leading manufacturer of air handling units serving the data center cooling and indoor air quality markets in the U.S.

and Canada that we acquired in March 2024, and organic growth .

The lower Performance Technologies segment sales included a $54 million impact from the disposition of three automotive businesses in Germany during the third quarter of fiscal 2024.

Following our 80/20 discipline during fiscal 2026, we significantly expanded our Data Centers business and production capacity and are continuing to grow this business to meet increasing customer demand.

We see great opportunity in growing our Data Centers business in light of trends in high-performance computing, with significant data center growth fueled by artificial intelligence (“AI”), resulting in a commensurate need for data center cooling solutions.

In addition, we acquired three businesses during fiscal 2026, AbsolutAire, Inc.

(“AbsolutAire”), LBW Holding Corp.

White”), and Climate by Design International (“Climate by Design”), which contributed to growth in our HVAC Technologies business.

In January 2026, we entered into definitive agreements with Gentherm Incorporated ( “Gentherm”) , whereby we will spin-off and simultaneously combine our 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.

This transaction, which we expect will close by the end of calendar 2026, will transform our company into a pure-play climate solutions company focused on the data center and commercial HVAC&R markets.

Through our application of 80/20 principles, we are achieving transformative change.

During fiscal 2026, our consolidated net sales were $3.2 billion, a 23 percent increase from $2.6 billion in fiscal 2025, primarily driven by higher sales in our Climate Solutions segment.

The higher Climate Solutions segment sales included significant sales growth to hyperscale and colocation data center customers and $119 million of incremental sales from businesses we acquired during fiscal 2026.

Our operating income of $342 million in fiscal 2026 increased $59 million from the prior year, primarily due to higher gross profit.

As we head into fiscal 2026, we are committed to our strategic pillars to drive value creation, as follows:

In fiscal 2027, we are committed to executing on our strategic priorities, including further expanding our Data Centers business and completing the transaction with Gentherm.

We will continue to apply our strategic pillars to drive value creation, as follows:

● Capitalizing on our deep expertise in thermal management , including world-class capabilities and proprietary technologies, to deliver differentiated solutions to our customers and sustain market leadership.

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● Focusing on opportunities fueled by multiple secular mega-trends , directly tied to our mission.

For example, we are rapidly expanding our Data Center Cooling business in response to trends in high-performance computing, with significant data center growth fueled by artificial intelligence, resulting in a commensurate need for data center cooling solutions.

● Elevating our 80/20 discipline , influencing our daily decision making and strategic resource and capital allocation.

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The following is a summary of our primary product groups, categorized as a percentage of our net sales:

Data center cooling

Heat transfer

Liquid-cooled

Advanced solutions

Heat Transfer Solutions

HVAC Technologies

On-Highway Applications

Heavy-Duty Equipment

Competitive Position

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The markets for our products continue to be very dynamic.

For example, our data center customers are expanding globally and are requiring new technologies, driving us to invest in geographic and capacity expansion and to expand our product portfolio to meet their needs.

The expansion of electric vehicle demand has also created opportunities to work with our existing OEM customers, as well as emergent customers focused on zero-emission products.

Additionally, our global power generation customers, driven by new data center construction and demand for backup power for critical infrastructure, such as hospitals, mining and airports, are looking for new technologies and global manufacturing capacity to meet their growth demands.

For example, our data center customers are expanding globally, driving us to invest in geographic and capacity expansion to meet their needs.

Additionally, our global power generation customers are looking for new technologies and global manufacturing capacity to meet their growth demands, driven by new data center construction and demand for backup power for these data centers, as well as for hospitals, mining and airports.

Our HVAC&R OEM customers are faced with significant international competition and maintain global manufacturing footprints to compete in local markets.

In addition, consolidation within the supply base and vertical integration may introduce new or restructured competitors to our markets.

We are investing in geographic and capacity expansion to meet these customer needs, particularly as we experience competition from suppliers positioned in different geographies that enjoy economic advantages such as lower labor costs and tax rates.

We are investing in geographic and capacity expansion to meet these customer needs, particularly as we experience competition from companies positioned in different geographies that enjoy economic advantages such as lower labor costs and tax rates.

Many of our customers also continue to ask us, as well as their other primary suppliers, to provide research and development (“R&D”), design, and validation support for new potential projects.

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See Note 22 of the Notes to Consolidated Financial Statements for segment financial information.

Effective April 1, 2026, we reorganized our Climate Solutions segment and split it into two separate operating segments:

1) Data Centers and 2) Commercial HVAC.

We believe that managing these businesses independently will allow us to better deploy our 80/20 strategy focused on capitalizing on growth opportunities, particularly in our Data Centers business, and optimizing profit margins and cash flow.

As a result of this organizational change, we will report three operating segments in fiscal 2027:

1) Data Centers;

2) Commercial HVAC and 3) Performance Technologies.

Climate Solutions Segment

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The Climate Solutions segment also provides heat exchangers for HVAC&R applications and anti-corrosive coatings.

In addition, the segment also provides HVAC&R systems and solutions for commercial, education, industrial, and residential applications.

In addition, the segment provides HVAC&R systems and solutions for commercial, education, industrial, and residential applications.

The Climate Solutions segment has strategically aligned its teams around three primary market-based verticals:

i) Data Center Cooling;

ii) Heat Transfer Products and iii) HVAC&R.

Data Center Cooling

The Data Center Cooling business provides sustainable cooling solutions for data center markets in North America, Europe, the Middle East and Africa (“EMEA”), and Asia, including complete system design, controls, maintenance and monitoring.

We provide data center cooling solutions that feature low global warming potential refrigerants, free cooling technology, and lower water consumption, enabling our customers and end-users to meet their environmental and sustainability goals.

Data center products consist of IT cooling solutions, including precision air conditioning units for data center applications;

computer room air conditioning (“CRAC”) and computer room air handler (“CRAH”) units;

hybrid fan coils;

condensing units;

and liquid cooling solutions for high-density computing, including coolant distribution units (“CDU”) and immersion solutions.

In addition, the Data Center Cooling business sells replacement parts, maintenance service and control solutions for existing equipment and new building management controls and systems.

This business serves data center management customers, including large colocation, cloud service providers and hyperscale customers, as well as customers in the commercial and industrial sectors such as telecommunications, healthcare and commercial real estate.

In fiscal 2025, the data center cooling markets that we serve experienced a year of exceptionally strong growth.

We expect strong growth in these markets in fiscal 2026, supported by an increasing reliance on digital technologies, specifically colocation and cloud usage.

Market demand for data usage and storage continues to rise, driven by the increased use of IoT (Internet of Things) technology, which connects various devices through the internet, artificial intelligence and machine learning, smart phones, and digital transformation trends.

In addition, artificial intelligence, machine learning, and other trends are driving increased high performance computing, which increases heat loads and the need for high-density cooling solutions such as hybrid and liquid cooling.

Digital transformation trends driving market demand include an increased focus on the digital customer experience, as more transactions and customer interactions are taking place virtually through websites and mobile applications, and the increasing use of 5G technology and its application across global enterprise opportunities, particularly in the healthcare, manufacturing, and energy sectors.

Heat Transfer Products

The Heat Transfer Products business provides heat exchanger coils, primarily of round tube plate fin construction, to the HVAC&R markets in North America, Europe, and Asia.

In addition, our Heat Transfer Products business provides coatings products and application services to the HVAC&R markets in North America and Europe.

i) Data Centers;

ii) Heat Transfer Solutions and iii) HVAC Technologies.

The Data Centers business provides innovative thermal management solutions for data center customers in North America, Europe, the Middle East and Africa (“EMEA”), and Asia Pacific.

This business serves data center management customers, including Hyperscale, Colocation, NeoCloud and Edge customers.

Our data center cooling solutions feature low global warming potential refrigerants, free cooling technology, and lower water consumption products, enabling our customers and end-users to meet their environmental and sustainability goals.

Data center products include chillers, dry coolers, precision air handling units, computer room air conditioning (“CRAC”), computer room air handler (“CRAH”) units, fan walls, rear-door heat exchangers, coolant distribution units (“CDU”) and immersion solutions.

In addition, the Data Centers business sells modular data center solutions, replacement parts, maintenance service and control solutions for building management controls and systems.

Market demand for data usage and storage continues to rise, driven by the increased use of AI and machine learning in a wide variety of applications and end markets.

In addition, AI, machine learning, and other trends are driving increased high performance computing, which increases heat loads and the need for high-density cooling solutions, such as hybrid and liquid cooling.

Furthermore, the use of 5G technology to enable a wide range of applications worldwide is increasing, particularly in the healthcare, manufacturing, and energy sectors.

In fiscal 2026, the data center cooling markets that we serve experienced another year of exceptionally strong growth.

We expect strong growth in these markets in fiscal 2027, supported by sustained global reliance on digital technologies including hyperscale platforms, NeoCloud and AI- focused cloud providers, colocation services, edge infrastructure, and rapidly expanding AI computing workloads.

In North America, we expect the data center markets will experience strong growth, benefitting from significant capital investments in data center infrastructure in the U.S.

by both Hyperscale and NeoCloud data center providers.

In EMEA, we anticipate moderate growth, as we expect the growth drivers discussed above may be somewhat tempered by power and land availability, along with stricter sustainability regulations in Europe.

In Asia, we anticipate the data center markets will experience strong growth in fiscal 2027, driven by AI and high-performance computing demand.

Heat Transfer Solutions

The Heat Transfer Solutions business provides heat exchanger coils, anti-corrosion coating products, commercial and industrial refrigeration products and power generation and transmission cooling solutions.

Heat exchanger coils, primarily of round tube plate fin construction, are primarily sold to the HVAC&R and data center cooling markets in North America, Europe, and Asia.

Customers include commercial and industrial equipment manufacturers, distributors, contractors, and end users in a variety of commercial and industrial applications, including data center management, commercial and residential HVAC, mobile air conditioning, refrigeration, and precision and industrial cooling.

In fiscal 2026, the HVAC&R markets experienced moderate growth, recovering from market declines in fiscal 2025.

The data center markets experienced exceptionally strong growth in fiscal 2026 and we expect strong growth during fiscal 2027, supported by the sustained global reliance on digital technologies.

We expect the commercial and residential markets that we serve will be relatively flat during fiscal 2027.

Trends influencing our primary HVAC&R markets include refrigerant substitution and energy efficiency requirements, both of which are expected to benefit the commercial HVAC&R markets.

Demand for more efficient HVAC&R systems is driven by more stringent energy efficiency regulations.

Anti-corrosion coatings products and application services are primarily sold in the HVAC&R markets in North America and Europe.

Our coatings products are designed to extend the life of equipment and components by protecting against corrosion and foreign matter.

Customers for these products and services include manufacturers of commercial, industrial and residential HVAC&R equipment and systems, and distributors, contractors, and end users in a variety of applications, including commercial and residential HVAC, mobile air conditioning, refrigeration, data center management, and precision and industrial cooling.

In fiscal 2025, the HVAC&R markets to which we sell heat exchanger coils experienced declines.

The most significant decline was in the European heat pump market, resulting from the delay in the adoption of heat pump technology.

Looking ahead, we expect the commercial and residential markets that we serve will be relatively flat during fiscal 2026.

Trends influencing our primary markets include refrigerant substitution and energy efficiency requirements, both of which are expected to benefit the commercial HVAC&R markets.

Demand for more efficient HVAC&R systems in buildings and processes is driven by more stringent energy efficiency regulations.

In addition, demand continues to be strong for corrosion resistant coatings, specifically for HVAC applications in coastal areas and other harsh environments.

The HVAC&R business provides a wide array of solutions to heating;

indoor air quality;

commercial and industrial refrigeration;

and industrial power generation, conversion, and transmission;

and industrial process markets in North America, EMEA, and China.

Heating products, primarily sold to the North American residential and commercial heating markets, include unit heaters (gas-fired, hydronic, electric and oil-fired);

Data center growth, in particular, is increasing market demand for coatings.

In addition, demand for other HVAC applications, particularly in coastal areas and other harsh environments, remains strong.

Refrigeration products, primarily sold to the commercial and industrial refrigeration markets in EMEA, China, and North America, include evaporator unit coolers, remote condensers, fluid coolers, gas coolers, and dry and brine coolers.

Customers for these coolers and refrigeration products primarily include wholesalers, distributors and resellers, commercial and industrial OEMs, as well as contractors and end users in a variety of commercial and industrial applications, including supermarkets, refrigerated warehouses, logistic centers, cold rooms, precision and industrial cooling, hospitality, hotels, and restaurants.

In fiscal 2026, the commercial and industrial refrigeration markets experienced modest growth.

We expect this trend to continue during fiscal 2027, driven by improving standards of living in emerging countries, as well as more stringent energy efficiency regulations in Europe and North America, partially offset by anticipated investment delays in connection with general market and economic uncertainties.

Regulations focused on eliminating fluorinated gases, which are man-made gases that contribute to the global greenhouse effect, have shifted investments from synthetic to natural gas, including carbon dioxide cooling solutions, and are driving growth in mature markets in Europe and North America.

Power generation and transmission cooling products, primarily sold to power generation and transmission and pulp and paper markets, include motor and power generator cooling coils, transformer oil coolers, radiators, dryers and industrial heat exchangers to the industrial power generation, conversion, and transmission and industrial process markets in EMEA, China, and North America.

Customers for these products primarily include industrial OEMs, utility companies and electrical distribution and transmission system operators, and end users in industrial applications for capital projects within the pulp and paper industry.

In fiscal 2026, the power generation and transmission markets experienced strong growth, benefitting from energy transition programs, which promote renewable energy sources, such as wind and solar, and modernization investments in electricity infrastructure, including power grids and energy storage.

In addition, global demand for electricity has increased.

Data centers are using more power to support digital technologies, including AI.

We expect strong growth in these markets will continue in fiscal 2027, with particularly strong demand for transformer oil cooler products driven by the increasing demand for electricity.

In addition, we expect modest growth in demand for radiators related to backup and primary power generation and modest growth in the pulp and paper markets.

HVAC Technologies

The HVAC Technologies business provides an array of heating and indoor air quality solutions.

Heating products, primarily sold to the North American residential, commercial, industrial, portable, and agricultural heating markets, include unit heaters (indirect & direct gas-fired, hydronic, electric and oil-fired);

roof-mounted direct- and indirect-fired makeup air units;

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and perimeter heating products (cabinet unit heaters and convectors).

The primary customers for these heating products are HVAC wholesalers, installers, and end users in a variety of residential, commercial and industrial applications, including residential garages, warehousing, manufacturing, and greenhouses.

In fiscal 2025, the North American residential and commercial heating markets were relatively flat.

While the heating market benefited from an extended winter season this year, the improvement was tempered by distributors reducing their elevated inventory stock levels.

We expect the North American heating markets will experience modest growth in fiscal 2026.

Longer term, we anticipate that increasing demands for energy efficiency as well as decarbonization and lower emission initiatives and regulations will impact the North American heating markets.

Indoor air quality products, primarily sold to the North American school and commercial HVAC markets, include single packaged unit ventilators, modular chillers, air handler units, condensing units, and ceiling cassettes.

The primary customers for these heating products are HVAC wholesalers, installers, and end users in a variety of residential, commercial, industrial, and agricultural applications, including residential garages, warehouses, manufacturing sites, greenhouses, construction sites, poultry buildings, and swine facilities.

In fiscal 2026, the primary heating markets we serve experienced moderate growth.

We expect the North American heating markets will continue on this trend and experience modest growth during fiscal 2027.

Longer term, we expect regulatory activity, including higher efficiency mandates and regulations aimed at reducing environmental impacts, will increase demand for decarbonized heating solutions in the North American heating markets.

Indoor air quality products, primarily sold to the North American school and commercial HVAC markets, include single packaged unit ventilators, ceiling cassettes, modular chillers, air handling units, condensing units and desiccant dehumidifiers.

Customers for these indoor air quality products include mechanical contractors, HVAC wholesalers, installers, and end users in a variety of commercial and industrial applications.

In fiscal 2025, the North American school and commercial HVAC markets experienced growth, with the strongest growth in the school and healthcare markets.

We expect modest market growth in fiscal 2026 to be driven by continued demand in schools and commercial buildings.

We expect the commercial HVAC market will continue to expand as businesses are increasingly prioritizing indoor air quality and energy-efficient HVAC solutions to ensure healthier environments for employees and customers and to lower operating costs.

In fiscal 2025, the commercial and industrial refrigeration markets experienced modest growth.

We expect moderate growth in the global refrigeration markets in fiscal 2026, driven by improving standards of living in emerging countries, as well as more stringent energy efficiency regulations in Europe and North America, partially offset by anticipated investment delays in connection with general market and economic uncertainties.

In addition, the HVAC&R business sells motor and generator cooling coils, transformer oil coolers, radiators, dryers and industrial heat exchangers to the industrial power generation, conversion, and transmission and industrial process markets in EMEA, China, and North America.

Customers for these products primarily include industrial OEMs as well as contractors and end users in industrial applications and for capital projects within the pulp and paper industry.

In fiscal 2025, the pulp and paper sector experienced modest growth and demand for industrial power and process products also improved.

We expect these markets will be stable in fiscal 2026, with an increase in demand for transformer oil cooler products, driven by higher electricity demands, and modest demand growth in the pulp and paper sector.

In fiscal 2026, the North American school and commercial HVAC markets experienced growth, with the strongest growth in the school, healthcare and multifamily markets.

In fiscal 2027, we expect moderate market growth in the commercial HVAC markets, as businesses are increasingly prioritizing indoor air quality, heat pump technology and energy-efficient HVAC solutions to ensure healthier environments for employees and customers and to lower operating costs.

We expect the school market will be relatively flat in fiscal 2027.

Performance Technologies Segment

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The segment also provides solutions that increase fuel economy, reduce harmful emissions and maximize range in zero emission applications.

The Performance Technologies segment designs and manufactures products and solutions using air-cooled and liquid-cooled technology for vehicular, stationary power, and industrial applications.

In addition, the Performance Technologies segment provides advanced thermal solutions to zero-emission and hybrid commercial vehicle and off-highway customers.

The Performance Technologies segment has strategically aligned its teams around three primary market-based verticals:

i) Air-Cooled Applications;

ii) Liquid-Cooled Applications, and iii) Advanced Solutions.

Air-Cooled Applications

The Air-Cooled Applications business provides air-cooled heat exchangers and modules for vehicular, mission critical stationary power, and industrial applications.

This business primarily serves the commercial vehicle, off-highway and power generation markets in North America, Brazil, China, India, Europe and South Korea.

It primarily sells powertrain cooling products, such as radiators, condensers, engine cooling modules, charge air coolers, fan shrouds, and surge tanks;

The Performance Technologies segment designs and manufactures products and solutions for vehicular, stationary power, and industrial applications.

In addition, the Performance Technologies segment provides advanced thermal solutions to zero-emission and hybrid commercial vehicle, bus, and specialty vehicle customers.

The Performance Technologies segment has strategically aligned its teams around two primary product groups:

i) Heavy-Duty Equipment;

and ii) On-Highway Applications.

Heavy-Duty Equipment

The Heavy-Duty Equipment business provides heat exchangers and cooling modules for off-highway markets, including agricultural and construction.

In addition, the Heavy-Duty Equipment business sells cooling module generator sets that provide mission-critical stationary power.

This business primarily serves the off-highway and power generation markets in North America, Brazil, China, India, Europe and South Korea.

It primarily sells powertrain cooling products, such as radiators, condensers, charge air coolers, oil coolers, and engine cooling modules;

and cooling module generator sets (“Gensets”).

Its customers include commercial, medium- and heavy-duty truck and engine manufacturers;

construction, agricultural, and mining equipment, and mission critical power generation manufacturers;

Its customers include construction, agricultural, and mission-critical power generation manufacturers;

and industrial manufacturers of material handling equipment, Gensets and compressors.

During fiscal 2025, the commercial vehicle markets in India and Brazil experienced moderate growth, yet the commercial vehicle market in North America experienced weakness.

The agriculture markets in North America and Europe experienced significant declines and were negatively impacted by lower crop prices, higher interest rates and the continued military conflict in Ukraine.

As these market conditions challenged the profitability of farming, farmers purchased less new equipment and agriculture OEMs reduced production and inventory levels throughout the year.

The global construction and mining markets also experienced weakness, with the exception of the construction market in the U.S., which benefited from government programs incentivizing construction investments, such as the Inflation Reduction Act.

The power generation markets in North America, Europe, and India saw strong growth during fiscal 2025, driven by new data center construction and demand for backup power Gensets for critical infrastructure, such as hospitals, mining and airports.

Looking ahead, we expect the commercial vehicle markets will largely continue trending similarly in fiscal 2026, with moderate growth in India and Brazil and market softness in North America.

We expect the global agriculture markets to experience further declines in fiscal 2026, particularly in North America and Europe.

While we are optimistic that crop prices may begin to rebound and interest rates may continue to trend favorably, which would aid the recovery of the agriculture markets, we do not anticipate significant recovery until fiscal 2027.

In fiscal 2026, we expect modest growth in the global construction markets.

We believe large-scale infrastructure development projects, including those for data centers and artificial intelligence, will benefit the construction markets.

During fiscal 2026, the agriculture markets in North America, Brazil, and Europe were weak.

These markets experienced significant declines during fiscal 2025, negatively impacted by lower crop prices, higher interest rates, geopolitical trade restrictions, and impacts of the military conflict in Ukraine.

As these market conditions continued to challenge the profitability of farming during fiscal 2026, farmers purchased less new equipment and agriculture OEMs kept production and inventory levels relatively low.

We anticipate that the challenging conditions for the agriculture markets will persist in fiscal 2027.

The global construction markets experienced declines in fiscal 2026, largely associated with relatively high construction costs and market saturation of “young” construction equipment resulting from recent strong purchasing years, reducing the need for replacement or new purchases.

We expect that these construction markets will begin to recover and experience modest growth during fiscal 2027.

While dealer inventory remains relatively high, we anticipate that large-scale infrastructure development projects, including those for data centers and AI, and projects incentivized by government programs, such as the Inflation Reduction Act in the U.S., will benefit the construction equipment markets.

We expect these large-scale development projects will increase the need for construction equipment including loaders, excavators, cranes and bulldozers.

Liquid-Cooled Applications

The Liquid-Cooled Applications business provides heat exchangers for engine, stationary power, and industrial applications.

This business primarily serves the commercial vehicle, automotive, and off-highway markets in North America, Europe, China, and India.

Its products and solutions include aluminum and stainless steel engine oil coolers, exhaust gas recirculation (“EGR”) coolers, liquid charge air coolers, transmission and retarder oil coolers, chillers, and condensers.

Its customers include commercial, medium- and heavy-duty truck engine manufacturers and automobile and light truck OEMs;

and Tier-1 construction, agricultural equipment, and automotive module manufacturers.

During fiscal 2025, the global commercial vehicle markets served by our Liquid-Cooled Applications business experienced declines, with the largest declines in Europe and North America.

While we expect market softness will continue, we are optimistic that the medium- and heavy-duty truck markets will begin to stabilize in fiscal 2026 based upon recent OEM order trends.

The power generation markets in North America, Europe, and India saw strong growth during fiscal 2026, driven by new data center construction and strong demand for AI and backup power Gensets for critical infrastructure, such as data centers, hospitals, mining and airports.

On-Highway Applications

The On-Highway Applications business provides heat exchangers and cooling systems for commercial vehicle, automotive, bus and specialty vehicle markets in North America, Europe, Brazil, China, and India.

Its products and solutions include products for traditional powertrains, including aluminum and stainless steel engine oil coolers, exhaust gas recirculation (“EGR”) coolers, charge air coolers, transmission and retarder oil coolers, chillers, condensers, fan shrouds, and surge tanks.

Customers for its traditional powertrain products and solutions include commercial, medium- and heavy-duty truck and engine manufacturers and automobile and light truck OEMs;

and automotive Tier 1 suppliers.

In addition, this business provides products and solutions for zero-emission and hybrid passenger car, commercial vehicle, bus and specialty vehicles, including complete battery thermal management systems, electronics cooling packages, battery chillers, battery cooling plates, coolers and casings for electronics cooling, and coolers for electric axles (“e-axles”).

Customers for its zero-emission and hybrid vehicles products and solutions include commercial vehicle, bus and specialty vehicle, off-highway, and automotive OEMs, e-axle producers, and power electronics providers.

During fiscal 2026, the commercial vehicle market in India experienced strong growth, while the commercial vehicle markets in Brazil and China were relatively flat.

In North America and Europe, the commercial vehicle markets experienced continued weakness during 2026.

Uncertainties, including those related to the impacts of tariffs, geopolitical tensions and emissions regulations, have been negatively impacting the commercial vehicle markets.

While we expect market softness will continue in fiscal 2027, we are optimistic that the medium- and heavy-duty truck markets may begin to recover based upon recent OEM order trends and reported outlooks.

In North America, we are monitoring the U.S.

Environmental Protection Agency’s upcoming Greenhouse Gas Phase 3 regulations for commercial vehicles, which includes stricter emission regulations for heavy-duty trucks starting with the 2027 model year.

Environmental Protection Agency’s upcoming Greenhouse Gas Phase 3 regulations for commercial vehicles, which include stricter emission regulations for heavy-duty trucks starting with the 2027 model year.

If these regulations are significantly rolled back or eased, it would likely dampen the anticipated surge of heavy-duty truck orders prior to the new regulations going into effect.

Regarding the automotive markets, the European and North American automotive markets experienced moderate declines during fiscal 2025, while the automotive market in China saw moderate growth compared with the prior year.

We expect the global automotive markets will remain relatively weak during fiscal 2026 and are monitoring the current uncertainty in the marketplace related to the potential impacts on vehicle sales from trade conflicts and future emission requirements for internal combustion engines.

The off-highway markets that we serve experienced declines in fiscal 2025 and we expect further weakness in these markets during fiscal 2026, particularly within the agriculture markets.

Advanced Solutions

Our Advanced Solutions business provides products and solutions for zero-emission and hybrid vehicles.

These products and solutions, which are primarily sold to the commercial vehicle, bus and specialty vehicle, off-highway and automotive markets in North America and Europe, include complete battery thermal management systems, electronics cooling packages, battery chillers, battery cooling plates, coolers and casings for electronics cooling, and coolers for electric axles (“e-axles”).

Customers for these products include commercial vehicle, bus and specialty vehicle, off-highway, and automotive OEMs, e-axle producers, and power electronics providers.

The primary markets served by the Advanced Solutions business experienced strong growth during the first half of fiscal 2025, but subsequently slowed during the second half of the year.

Uncertainty in the marketplace regarding federal government funding related to electric vehicles has resulted in market softness, which we expect will continue into fiscal 2026.

Longer-term, we expect increased demand for electric vehicles and other lower-emission vehicle platforms, including fuel cell and hybrid platforms, will benefit the markets served by our Advanced Solutions business.

The European and North American automotive markets experienced moderate declines during fiscal 2026, while the automotive market in China saw moderate growth compared with the prior year.

We expect the global automotive markets will remain relatively flat during fiscal 2027 and are monitoring the current uncertainty in the marketplace related to the potential impacts on vehicle sales from trade conflicts and future incentives for electric vehicles.

Geographic Areas

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Export sales from the U.S.

to foreign countries, as a percentage of consolidated net sales, were 7 percent in fiscal 2025, 2024, and 2023.

to foreign countries, as a percentage of consolidated net sales, were 6 percent in fiscal 2026 and 7 percent in both fiscal 2025 and 2024.

We believe our international presence positions us to benefit from the anticipated long-term growth of the global data center cooling, HVAC&R and vehicular markets.

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Our ten largest customers, some of which are conglomerates or otherwise affiliated with one another, accounted for 49 percent of our consolidated net sales in fiscal 2026.

In fiscal 2026, one global technology customer in our Climate Solutions segment accounted for approximately 11 percent of our sales.

In fiscal 2025 and 2024, our largest customer accounted for less than 10 percent of our net sales.

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and Volvo (including Mack Trucks and Renault Trucks).

In addition, our Climate Solutions segment includes significant sales to two global technology customers with which we are party to confidentiality agreements.

In addition, our Climate Solutions segment includes significant sales to three customers of our Data Centers business, with which we are party to confidentiality agreements.

Generally, we supply products to our customers on the basis of individual purchase orders received from them.

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We believe that our segment teams can manage their operations and production capacity effectively and efficiently based upon expected sales volume in fiscal 2027 and beyond.

Raw Materials

Raw Materials and Purchased Components

We purchase aluminum, copper, steel and stainless steel (nickel) from several domestic and foreign suppliers.

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In addition, there can often be a three-month to one-year lag until the time that the price adjustments take effect.

In addition, we purchase certain parts and components from suppliers.

Due to the increasing market demand for data center cooling products, demand for certain key components is currently outpacing supplier capacity.

We began experiencing supply shortages in the fourth quarter of fiscal 2026.

These component shortages are negatively impacting our production schedules and are tempering our planned production ramp-up for certain data center products.

We are actively working with our supply chain, including qualifying new vendors, to mitigate the supply constraints.

Patents and Other Intellectual Property

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We are committed to building better products that will, in turn, help create a better world.

We are investing in products and technology to meet the challenging thermal management and air quality needs of our customers within the markets we serve.

Our products are often aimed at solving difficult and complex heat transfer challenges requiring advanced thermal management solutions, while meeting the demand for increased energy efficiency and compliance with increasingly stringent regulations.

We are investing in products and technology to meet the challenging thermal management and indoor air quality needs of our customers within the markets we serve.

Our thermal management solutions are often aimed at solving mission-critical heat transfer challenges, while meeting the demand for increased energy efficiency and compliance with increasingly stringent regulations.

Our heritage includes a depth and breadth of expertise in thermal management that, combined with our global manufacturing presence, standardized processes, and state-of-the-art technical resources, enables us to rapidly bring customized solutions to our customers.

We strive to be at the forefront of technological advances through both strategic inorganic investments in new technologies and meaningful internal R&D projects.

We aim to be at the forefront of technological advances through both strategic acquisitions and investments in new technologies and meaningful internal R&D projects.

R&D expenditures, including certain application engineering costs for specific customer solutions, totaled $29 million, $35 million, and $42 million in fiscal 2026, 2025 and 2024, respectively.

Our R&D teams work closely with our customers on projects and system designs to ensure efficient and cost-effective development of technologies.

We are strategically expanding our technology and product portfolio in the Data Center Cooling business within our Climate Solutions segment.

We recognize the need for investment in this area as artificial intelligence, machine learning, and other trends are driving increased high performance computing, which increases heat loads and is driving the need for high-density cooling solutions.

In fiscal 2025, we launched our CDU to provide critical cooling capacity for heat removal in high-density data center environments.

As a result of our data center cooling technology investments, we offer our customers multiple efficient, customizable products and solutions to elevate their performance while meeting their sustainability targets around power and water usage.

We are strategically expanding our technology and product portfolio in the Data Centers business within our Climate Solutions segment.

We recognize the need for investment in this area as AI, machine learning, and other trends continue to drive increased high performance computing, which increases heat loads and is driving the need for high-density cooling solutions.

In fiscal 2026, we expanded our chiller line and introduced a 3-megawatt chiller, the TurboChill™ 3+MW, to handle higher heat loads.

As a result of our data center technology investments, we offer our customers multiple efficient, customizable products and solutions to elevate their performance while meeting their sustainability targets around power and water usage.

Regarding HVAC&R markets, we are focused on developing sustainable solutions that optimize thermal efficiency and manufacturing to support decarbonization efforts and the use of next generation refrigerants, which help minimize climate change potential.

Regarding the vehicular markets, our development projects include solutions to optimize the efficiency and reliability of commercial and off-highway vehicles.

In addition, we are developing solutions, including precision battery cooling, to optimize the performance of zero emission and hybrid vehicles.

We also collaborate with industry, university, and government-sponsored research organizations that conduct research and provide data on practical applications in the markets we serve.

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Quality Improvement

Globally, we drive quality improvement by maintaining the Global Modine Management System and executing the Modine Quality Strategy.

Globally, we drive quality improvement by adhering to the Modine Quality Policy and maintaining the Global Modine Management System.

Our actions and decisions are driven by our purpose:

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We regularly monitor our process performance to meet or exceed rising customer expectations for products, services and quality.

Our Global Modine Management System supports our mission and values by applying well-defined improvement principles and leadership behaviors, all based on our 80/20 mindset to facilitate rapid improvements.

Our Global Modine Management System supports our mission and values by applying well-defined improvement principles and leadership behaviors, based on our 80/20 mindset to facilitate rapid improvements.

We drive sustainable and systematic continual improvement throughout our company by utilizing the principles, processes and behaviors of the Global Modine Management System.

To ensure future quality, we continue to execute the Modine Quality Strategy, which focuses on people, process, performance, quality engineering and the Global Modine Management System.

To ensure future quality, we remain focused on people, process, performance, quality engineering, and the Global Modine Management System.

Complementary technical regulatory compliance requirements are integrated appropriately to support the intent of our company’s purpose.

Environmental Matters

We are committed to Engineering a Cleaner, Healthier World™ and work every day to use our thermal management expertise to help our customers improve air quality, reduce energy and water consumption, lower harmful emissions, enable cleaner running vehicles and use more environmentally friendly refrigerants.

We are committed to Engineering a Cleaner, Healthier World™ and work every day to help our customers meet their objectives by engineering efficient, durable, and innovative solutions that reduce environmental impact and enhance performance.

In addition, we are committed to conducting business at our global locations in an environmentally conscious manner, and are embracing our responsibility to reduce the carbon footprint of our operations, products, and value chain and promoting renewal energy programs.

During fiscal 2025, we became a signatory to the United Nations (“UN”) Global Compact, the world’s largest voluntary corporate sustainability initiative, as part of our commitment to align our operations and sustainability targets.

The environmental principles within the UN Global Compact promote a greater sense of environmental responsibility and the development of environmentally friendly technologies.

In our global business operations, we are working to improve energy efficiency, minimize water waste, and increase the amount of waste recycled or diverted from landfills.

We are prioritizing decarbonization strategies across our global business operations, focusing on energy-efficient manufacturing and operational improvements across our footprint.

We have empowered each of our global facilities to invest in facility upgrades and enhancements that support our sustainability goals.

We are partnering with local utilities and government entities to implement renewal energy and conservation projects.

As an example, our team in Brazil recently upgraded to zero-emission, lithium battery-powered forklifts.

This change reduced its emissions and also eliminated the risks associated with storing and handling flammable liquefied petroleum gas, which powered the facility’s previous forklifts.

Our teams are also focused on reducing water usage and reducing and recycling waste, such as scrap metal, paint, used oils, chemicals, and solvents.

In addition, we are partnering with local utilities and government entities on renewable energy and conservation projects.

We are utilizing resource tracking technologies and waste management programs, installing solar panel systems and more efficient LED lighting systems, replacing inefficient boilers and air compressors and installing improved building HVAC management systems.

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Our Climate Solutions segment continues to develop high-efficiency solutions and products, particularly in the areas of data center cooling, heating, and indoor air quality.

For example, our Data Center Cooling business is focused on providing solutions that optimize performance and reduce energy and water consumption.

To do this, the Data Center Cooling business has invested in cooling technologies and has leveraged our deep thermal management expertise to expand its product portfolio.

The business offers customers tailored air, liquid, and hybrid (air and liquid) cooling solutions to meet their needs and sustainability goals.

For example, data centers are significant power consumers.

We are developing and providing solutions to help our data center customers optimize performance and reduce energy and water consumption.

Our Data Centers business offers customers a broad suite of tailored cooling solutions to meet their needs and sustainability goals.

We are also shifting our product portfolios toward lower-emission propellants and refrigerants, which greatly reduce the environmental impact of and enhance energy efficiency for our customers’ heating and cooling systems.

Our Performance Technologies segment is focused on product and technology innovations to improve efficiency and lower carbon emissions.

Our oil, charge-air, and EGR coolers, radiators, air conditioning condensers, and battery thermal management systems for trucks, buses, cars, specialty vehicles, and off-highway equipment allow both electric vehicle and internal combustion systems to run at optimal temperatures, which promotes better fuel efficiency, lower emissions, and improved vehicle lifespans, while still providing the vehicle performance that our customers expect.

Our oil, charge-air, and EGR coolers, radiators, air conditioning condensers, and battery thermal management systems for on-highway vehicles and off-highway equipment allow both electric vehicle and internal combustion systems to run at optimal temperatures, which promotes better fuel efficiency, lower emissions, and improved vehicle lifespans, while still providing the vehicle performance that our customers expect.

Obligations for environmental-related remedial activities may arise at our facilities due to past practices, or as a result of a property purchase or sale.

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Our overall operating performance is generally not subject to a significant degree of seasonality.

The Climate Solutions segment experiences some seasonality, as demand for HVAC&R products is affected by heating and cooling seasons, weather patterns, project construction, and other factors.

The Climate Solutions segment experiences some seasonality, as demand for certain HVAC&R products is affected by heating and cooling seasons, weather patterns, project construction, and other factors.

Sales volume for our Climate Solutions heating products is generally stronger in our second and third fiscal quarters, corresponding with demand for these products.

We generally expect sales volume for our Climate Solutions refrigeration, power generation and conversion, and heat transfer products to be higher during our first and second fiscal quarters due to the construction seasons in the northern hemisphere.

Sales to Performance Technologies vehicular OEM customers are dependent upon market demand for new vehicles.

Sales to Performance Technologies vehicular OEM customers are dependent upon market demand for new on-highway vehicles and off-highway equipment.

However, our second fiscal quarter production schedules are typically impacted by customer summer shutdowns and our third fiscal quarter is affected by customer holiday shutdowns.

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Within our Climate Solutions segment, we maintain varying levels of finished goods inventory, primarily related to our heating and data center cooling businesses, due to seasonal demand and project construction schedules, respectively.

During fiscal 2026, we increased inventory levels in our Climate Solutions segment to support the rapid expansion of our Data Centers business.

In Brazil, within our Performance Technologies segment, we maintain aftermarket product inventory in order to timely meet customer needs in the Brazilian commercial vehicle and automotive aftermarkets.

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All of the reports and corporate governance documents referenced above and other materials relating to corporate governance may also be obtained without charge by contacting Corporate Secretary, Modine Manufacturing Company, 1500 DeKoven Avenue, Racine, Wisconsin 53403- 2552.

We do not intend to incorporate our internet website and the information contained therein or incorporated therein into this Annual Report on Form 10-K.

Our internet website and the information contained therein or incorporated therein are not incorporated into this Annual Report on Form 10-K.

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-K

Item 1. Business