MODINE MANUFACTURING CO 10-Q

Item 1. Financial Statements. MODINE MANUFACTURING COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS For the three and six months ended September 30, 2024 and 2023 (In millions, except per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, ​ Six months ended September 30, ​ 2024 2023 2024 2023 Net sales ​ $ 658.0 ​ $ 620.5 ​ $ 1,319.5 ​ $ 1,242.9 Cost of sales ​ 492.4 ​ 485.4 ​ 991.3 ​ 979.9 Gross profit ​ 165.6 ​ 135.1 ​ 328.2 ​ 263.0 Selling, general and administrative expenses ​ 85.8 ​ 68.9 ​ 168.6 ​ 130.3 Restructuring expenses ​ 4.5 ​ 0.5 ​ 9.9 ​ 0.5 Operating income ​ 75.3 ​ 65.7 ​ 149.7 ​ 132.2 Interest expense ​ ( 7.4 ) ​ ( 6.1 ) ​ ( 14.9 ) ​ ( 12.0 ) Other (expense) income – net ​ ( 1.5 ) ​ 0.1 ​ ( 1.8 ) ​ ( 0.5 ) Earnings before income taxes ​ 66.4 ​ 59.7 ​ 133.0 ​ 119.7 Provision for income taxes ​ ( 20.0 ) ​ ( 12.8 ) ​ ( 38.8 ) ​ ( 27.5 ) Net earnings ​ 46.4 ​ 46.9 ​ 94.2 ​ 92.2 Net earnings attributable to noncontrolling interest ​ ( 0.3 ) ​ ( 0.4 ) ​ ( 0.8 ) ​ ( 0.9 ) Net earnings attributable to Modine ​ $ 46.1 ​ $ 46.5 ​ $ 93.4 ​ $ 91.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings per share attributable to Modine shareholders: ​ ​ ​ ​ Basic ​ $ 0.88 ​ $ 0.89 ​ $ 1.78 ​ $ 1.74 Diluted ​ $ 0.86 ​ $ 0.87 ​ $ 1.73 ​ $ 1.72 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average shares outstanding: ​ ​ ​ ​ Basic ​ 52.6 ​ 52.4 ​ 52.5 ​ 52.4 Diluted ​ 53.9 ​ 53.4 ​ 53.9 ​ 53.2 ​ The notes to condensed consolidated financial statements are an integral part of these statements. ​ 1 Table of Contents MODINE MANUFACTURING COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the three and six months ended September 30, 2024 and 2023 (In millions) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, ​ Six months ended September 30, ​ 2024 2023 2024 2023 Net earnings ​ $ 46.4 ​ $ 46.9 ​ $ 94.2 ​ $ 92.2 Other comprehensive income (loss), net of income taxes: ​ ​ ​ ​ Foreign currency translation ​ 21.1 ​ ( 12.7 ) ​ 14.1 ​ ( 13.5 ) Defined benefit plans, net of income taxes of $ 0.2 , $ 0.3 , $ 0.5 and $ 0.5 million ​ 0.8 ​ 0.8 ​ 1.6 ​ 1.6 Cash flow hedges, net of income taxes of $ 0.1 , ($ 0.1 ) , $ 0.1 and ($ 0.3 ) million ​ 0.2 ​ ( 0.2 ) ​ 0.2 ​ ( 0.9 ) Total other comprehensive income (loss) ​ 22.1 ​ ( 12.1 ) ​ 15.9 ​ ( 12.8 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income ​ 68.5 ​ 34.8 ​ 110.1 ​ 79.4 Comprehensive income attributable to noncontrolling interest ​ ( 0.7 ) ​ ( 0.4 ) ​ ( 1.1 ) ​ ( 0.7 ) Comprehensive income attributable to Modine ​ $ 67.8 ​ $ 34.4 ​ $ 109.0 ​ $ 78.7 ​ The notes to condensed consolidated financial statements are an integral part of these statements. ​ 2 Table of Contents MODINE MANUFACTURING COMPANY CONSOLIDATED BALANCE SHEETS September 30, 2024 and March 31, 2024 (In millions, except per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 March 31, 2024 ASSETS ​ ​ Cash and cash equivalents ​ $ 78.6 ​ $ 60.1 Trade accounts receivable – net ​ 452.9 ​ 422.9 Inventories ​ 366.5 ​ 357.9 Other current assets ​ 54.6 ​ 53.1 Total current assets ​ 952.6 ​ 894.0 Property, plant and equipment – net ​ 373.9 ​ 365.7 Intangible assets – net ​ 165.8 ​ 188.3 Goodwill ​ 240.7 ​ 230.9 Deferred income taxes ​ 63.3 ​ 75.1 Other noncurrent assets ​ 119.3 ​ 97.5 Total assets ​ $ 1,915.6 ​ $ 1,851.5 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ Short-term debt ​ $ 14.0 ​ $ 12.0 Long-term debt – current portion ​ 32.3 ​ 19.7 Accounts payable ​ 295.1 ​ 283.4 Accrued compensation and employee benefits ​ 91.7 ​ 101.6 Other current liabilities ​ 103.8 ​ 129.1 Total current liabilities ​ 536.9 ​ 545.8 Long-term debt ​ 359.1 ​ 399.9 Deferred income taxes ​ 26.3 ​ 30.0 Pensions ​ 21.2 ​ 27.7 Other noncurrent liabilities ​ 104.7 ​ 92.6 Total liabilities ​ 1,048.2 ​ 1,096.0 Commitments and contingencies (see Note 18) ​ ​ Shareholders’ equity: ​ ​ Preferred stock, $ 0.025 par value, authorized 16.0 million shares, issued – none ​ — ​ — Common stock, $ 0.625 par value, authorized 80.0 million shares, issued 56.3 million and 56.1 million shares ​ 35.2 ​ 35.0 Additional paid-in capital ​ 293.5 ​ 283.7 Retained earnings ​ 752.4 ​ 659.0 Accumulated other comprehensive loss ​ ( 147.8 ) ​ ( 163.4 ) Treasury stock, at cost, 3.8 million and 3.7 million shares ​ ( 74.5 ) ​ ( 66.7 ) Total Modine shareholders’ equity ​ 858.8 ​ 747.6 Noncontrolling interest ​ 8.6 ​ 7.9 Total equity ​ 867.4 ​ 755.5 Total liabilities and equity ​ $ 1,915.6 ​ $ 1,851.5 ​ The notes to condensed consolidated financial statements are an integral part of these statements. 3 Table of Contents MODINE MANUFACTURING COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the six months ended September 30, 2024 and 2023 (In millions) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended September 30, ​ 2024 2023 Cash flows from operating activities: ​ ​ Net earnings ​ $ 94.2 ​ $ 92.2 Adjustments to reconcile net earnings to net cash provided by operating activities: ​ ​ Depreciation and amortization ​ 39.1 ​ 27.7 Stock-based compensation expense ​ 9.8 ​ 4.6 Deferred income taxes ​ 9.8 ​ 5.5 Other – net ​ 3.4 ​ 3.8 Changes in operating assets and liabilities: ​ ​ Trade accounts receivable ​ ( 25.5 ) ​ 6.7 Inventories ​ ( 5.2 ) ​ ( 4.3 ) Accounts payable ​ 21.8 ​ ( 43.3 ) Other assets and liabilities ​ ​ ( 49.6 ) ​ ​ 17.9 Net cash provided by operating activities ​ 97.8 ​ 110.8 ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: ​ ​ Expenditures for property, plant and equipment ​ ( 40.3 ) ​ ( 26.2 ) Payments for business acquisitions ​ ( 3.4 ) ​ ( 4.8 ) Proceeds from disposition of assets ​ 0.5 ​ 1.1 Other – net ​ — ​ ( 4.5 ) Net cash used for investing activities ​ ( 43.2 ) ​ ( 34.4 ) ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ Borrowings of debt ​ 282.0 ​ 176.6 Repayments of debt ​ ( 301.8 ) ​ ( 182.4 ) Repayments on bank overdraft facilities – net ​ ( 9.0 ) ​ ( 3.7 ) Purchases of treasury stock ​ ( 7.8 ) ​ ( 10.3 ) Dividend paid to noncontrolling interest ​ ( 0.4 ) ​ ( 0.5 ) Other – net ​ 0.3 ​ 1.7 Net cash used for financing activities ​ ( 36.7 ) ​ ( 18.6 ) ​ ​ ​ ​ ​ ​ ​ Effect of exchange rate changes on cash ​ 0.7 ​ ( 1.9 ) Net increase in cash, cash equivalents and restricted cash ​ 18.6 ​ 55.9 ​ ​ ​ ​ ​ ​ ​ Cash, cash equivalents and restricted cash – beginning of period ​ 60.3 ​ 67.2 Cash, cash equivalents and restricted cash – end of period ​ $ 78.9 ​ $ 123.1 ​ The notes to condensed consolidated financial statements are an integral part of these statements. ​ 4 Table of Contents MODINE MANUFACTURING COMPANY CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY For the three and six months ended September 30, 2024 (In millions) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ other ​ Treasury ​ Non- ​ ​ ​ Common stock ​ paid-in ​ Retained ​ comprehensive ​ stock, at ​ controlling ​ ​ ​ Shares Amount capital earnings loss cost interest Total Balance, March 31, 2024 56.1 ​ $ 35.0 ​ $ 283.7 ​ $ 659.0 ​ $ ( 163.4 ) ​ $ ( 66.7 ) ​ $ 7.9 ​ $ 755.5 Net earnings — ​ — ​ — ​ 47.3 ​ — ​ — ​ 0.5 ​ 47.8 Other comprehensive loss — ​ — ​ — ​ — ​ ( 6.1 ) ​ — ​ ( 0.1 ) ​ ( 6.2 ) Stock options and awards 0.1 ​ 0.1 ​ — ​ — ​ — ​ — ​ — ​ 0.1 Purchase of treasury stock — ​ — ​ — ​ — ​ — ​ ( 4.7 ) ​ — ​ ( 4.7 ) Stock-based compensation expense — ​ — ​ 4.2 ​ — ​ — ​ — ​ — ​ 4.2 Dividend paid to noncontrolling interest — ​ — ​ — ​ — ​ — ​ — ​ ( 0.4 ) ​ ( 0.4 ) Balance, June 30, 2024 56.2 ​ $ 35.1 ​ $ 287.9 ​ $ 706.3 ​ $ ( 169.5 ) ​ $ ( 71.4 ) ​ $ 7.9 ​ $ 796.3 Net earnings — ​ — ​ — ​ 46.1 ​ — ​ — ​ 0.3 ​ 46.4 Other comprehensive income — ​ — ​ — ​ — ​ 21.7 ​ — ​ 0.4 ​ 22.1 Stock options and awards 0.1 ​ 0.1 ​ — ​ — ​ — ​ — ​ — ​ 0.1 Purchase of treasury stock — ​ — ​ — ​ — ​ — ​ ( 3.1 ) ​ — ​ ( 3.1 ) Stock-based compensation expense — ​ — ​ 5.6 ​ — ​ — ​ — ​ — ​ 5.6 Balance, September 30, 2024 56.3 ​ $ 35.2 ​ $ 293.5 ​ $ 752.4 ​ $ ( 147.8 ) ​ $ ( 74.5 ) ​ $ 8.6 ​ $ 867.4 ​ The notes to condensed consolidated financial statements are an integral part of these statements. 5 Table of Contents MODINE MANUFACTURING COMPANY CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY For the three and six months ended September 30, 2023 (In millions) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ other ​ Treasury ​ Non- ​ ​ ​ ​ ​ Common stock ​ paid-in ​ Retained ​ comprehensive ​ stock, at ​ controlling ​ ​ ​ ​ Shares Amount capital earnings loss cost interest Total Balance, March 31, 2023 55.4 ​ $ 34.6 ​ $ 270.8 ​ $ 497.5 ​ $ ( 161.1 ) ​ $ ( 49.0 ) ​ $ 6.8 ​ $ 599.6 Net earnings — ​ — ​ — ​ 44.8 ​ — ​ — ​ 0.5 ​ 45.3 Other comprehensive loss — ​ — ​ — ​ — ​ ( 0.5 ) ​ — ​ ( 0.2 ) ​ ( 0.7 ) Stock options and awards 0.2 ​ 0.1 ​ 0.4 ​ — ​ — ​ — ​ — ​ 0.5 Purchase of treasury stock — ​ — ​ — ​ — ​ — ​ ( 1.2 ) ​ — ​ ( 1.2 ) Stock-based compensation expense — ​ — ​ 1.5 ​ — ​ — ​ — ​ — ​ 1.5 Dividend paid to noncontrolling interest — ​ — ​ — ​ — ​ — ​ — ​ ( 0.5 ) ​ ( 0.5 ) Balance, June 30, 2023 55.6 ​ $ 34.7 ​ $ 272.7 ​ $ 542.3 ​ $ ( 161.6 ) ​ $ ( 50.2 ) ​ $ 6.6 ​ $ 644.5 Net earnings — ​ — ​ — ​ 46.5 ​ — ​ — ​ 0.4 ​ 46.9 Other comprehensive loss — ​ — ​ — ​ — ​ ( 12.1 ) ​ — ​ — ​ ( 12.1 ) Stock options and awards 0.1 ​ 0.1 ​ 0.6 ​ — ​ — ​ — ​ — ​ 0.7 Purchase of treasury stock — ​ — ​ — ​ — ​ — ​ ( 9.1 ) ​ — ​ ( 9.1 ) Stock-based compensation expense — ​ — ​ 3.1 ​ — ​ — ​ — ​ — ​ 3.1 Balance, September 30, 2023 55.7 ​ $ 34.8 ​ $ 276.4 ​ $ 588.8 ​ $ ( 173.7 ) ​ $ ( 59.3 ) ​ $ 7.0 ​ $ 674.0 ​ The notes to condensed consolidated financial statements are an integral part of these statements. ​ ​ 6 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) Note 1: General The accompanying unaudited condensed consolidated financial statements of Modine Manufacturing Company (“Modine” or the “Company”) were prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10- 01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes necessary for a comprehensive presentation of financial position, results of operations and cash flows required by GAAP for complete financial statements. 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 2025 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, 2024. Supplier finance programs The Company facilitates a voluntary supplier finance program through a financial institution that allows certain suppliers in the U.S. and Europe to request early payment for invoices, at a discount, from the financial institution. The Company or the financial institution may terminate the supplier finance program upon 90 days’ notice. The Company’s obligations to its suppliers, including amounts due and payment terms, are consistent, irrespective of whether a supplier participates in the program. The Company is not party to the arrangements between the participating suppliers and the financial institution. 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 in the consolidated balance sheets, totaled $ 17.8 million and $ 23.6 million at September 30, 2024 and March 31, 2024, respectively. New accounting guidance Segment reporting disclosures In November 2023, the Financial Accounting Standards Board issued new disclosure guidance for reportable segments. The new guidance will require disclosure of significant segment expenses, which are expenses that are (i) significant to the segment, (ii) regularly provided to the chief operating decision maker (“CODM”) and (iii) included in the reported measure of segment profit or loss. In addition, the new guidance will require companies to disclose the title and position of their CODM and expand interim disclosures to include the majority of the annual segment disclosures. The definition of and method for determining reportable segments is unchanged. The new disclosure requirements will become effective for the Company’s fiscal 2025 annual financial statements. The Company is currently evaluating the new disclosures, but does not expect the guidance will have a material impact on its consolidated financial statements. 7 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) Note 2: Acquisitions and Dispositions Acquisition of Scott Springfield Mfg. Inc. On March 1, 2024, the Company acquired all of the issued and outstanding shares in the capital of Scott Springfield Mfg. Inc. (“Scott Springfield Manufacturing”) for consideration totaling $ 184.1 million. In July 2024 and upon finalization of the working capital adjustment, the Company paid $ 2.4 million to the seller. Based in Calgary, Canada, Scott Springfield Manufacturing is a leading manufacturer of air handling units to customers in the data center, telecommunications, healthcare, and aerospace markets. This acquisition expanded the Company’s product offerings and customer base in the high-growth data center and indoor air quality markets in the U.S. and Canada. Since the date of the acquisition, the Company has reported the financial results of the Scott Springfield Manufacturing business within the Climate Solutions segment. For the three and six months ended September 30, 2024, the Company included $ 53.4 million and $ 93.1 million of net sales, respectively, within its consolidated statements of operations attributable to Scott Springfield Manufacturing. The Company has completed the purchase price allocation for its acquisition of Scott Springfield Manufacturing. During the first quarter of fiscal 2025, the Company completed its market and trade name analyses and recorded a measurement period adjustment to reduce the fair value of the trade name intangible asset by $ 9.6 million. This adjustment resulted in a corresponding decrease in the deferred income tax liability of $ 2.2 million and an increase in goodwill of $ 7.4 million. The Company’s purchase price allocation for its acquisition of Scott Springfield Manufacturing is as follows: ​ ​ ​ ​ ​ Cash and cash equivalents $ 0.3 Trade accounts receivable ​ 27.5 Inventories ​ 20.9 Property, plant and equipment ​ 6.0 Intangible assets ​ 92.7 Goodwill ​ 72.6 Other assets ​ 4.0 Accounts payable ​ ( 8.6 ) Accrued compensation and employee benefits ​ ( 1.3 ) Deferred income taxes ​ ( 22.2 ) Other liabilities ​ ( 7.8 ) Purchase price ​ $ 184.1 ​ The following unaudited supplemental pro forma information presents the Company’s consolidated results of operations as though the acquisition of Scott Springfield Manufacturing had occurred at the beginning of fiscal 2023. This pro forma financial information is presented for illustrative purposes only and is not considered to be indicative of the operating results that would have been achieved had the acquisition been completed as of the date indicated or the operating results that may be obtained in the future. ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended Six months ended ​ September 30, 2023 September 30, 2023 Net sales ​ $ 647.5 ​ $ 1,299.2 Net earnings attributable to Modine ​ 46.6 ​ 91.1 ​ 8 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) The supplemental pro forma financial information above is based upon the Company’s historical results and the historical results of Scott Springfield Manufacturing, which have been translated from Canadian dollars to U.S. dollars using the historical average foreign exchange rates. The pro forma information includes adjustments for: i) amortization and depreciation expense totaling approximately $ 2.0 million and $ 5.0 million for the three and six months ended September 30, 2023, respectively, for acquired tangible and intangible assets, (ii) estimated quarterly interest expense of $ 1.5 million resulting from acquisition-related borrowings, and (iii) the estimated income tax impacts related to the pro forma adjustments, considering the statutory tax rates within Canada. The pro forma financial information does not reflect any expected revenue or cost synergies. Acquisition of Napps Technology Corporation On July 1, 2023, the Company acquired substantially all of the net operating assets of Napps Technology Corporation (“Napps”), a Texas-based manufacturer of air- and water-cooled chillers, condensing units and heat pumps, for consideration totaling $ 5.8 million. The Company paid $ 4.8 million during the second quarter of fiscal 2024 and paid the remaining $ 1.0 million to the seller in July 2024. The Company has reported the financial results of the Napps business within the Climate Solutions segment since the date of the acquisition. Disposition of Germany automotive businesses In October 2023, the Company sold three automotive businesses based in Germany (the “disposal group”) to affiliates of Regent, L.P. Prior to the disposition, the Company reported the financial results of the disposal group within its Performance Technologies segment. Net sales of the disposal group included within the Company’s consolidated statement of operations for the three and six months ended September 30, 2023 totaled $ 21.9 million and $ 46.2 million, respectively. 9 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) Note 3: Revenue Recognition Disaggregation of revenue The tables below present revenue for each of the Company’s operating segments. Each segment’s revenue is disaggregated by product group, by geographic location and based upon the timing of revenue recognition. Effective April 1, 2024, the Company moved its Coatings business, which was previously managed by and reported within the Performance Technologies segment, under the leadership of the Climate Solutions segment. See Note 20 for additional segment financial information. The disaggregated revenue information presented in the tables below for fiscal 2024 has been recast to be comparable with the fiscal 2025 presentation. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, 2024 ​ Three months ended September 30, 2023 ​ Climate Performance Segment Climate Performance Segment ​ ​ Solutions ​ Technologies ​ Total ​ Solutions ​ Technologies ​ Total Product groups: ​ ​ ​ ​ ​ ​ Data center cooling ​ $ 158.9 ​ $ — ​ $ 158.9 ​ $ 78.8 ​ $ — ​ $ 78.8 Heat transfer ​ 103.4 ​ — ​ 103.4 ​ 119.2 ​ — ​ 119.2 HVAC&R ​ 104.1 ​ — ​ 104.1 ​ 91.2 ​ — ​ 91.2 Air-cooled ​ — ​ 155.2 ​ 155.2 ​ — ​ 173.3 ​ 173.3 Liquid-cooled ​ — ​ 99.1 ​ 99.1 ​ — ​ 126.4 ​ 126.4 Advanced solutions ​ — ​ 37.3 ​ 37.3 ​ — ​ 31.6 ​ 31.6 Inter-segment sales ​ — ​ 5.9 ​ 5.9 ​ — ​ 6.0 ​ 6.0 Net sales ​ $ 366.4 ​ $ 297.5 ​ $ 663.9 ​ $ 289.2 ​ $ 337.3 ​ $ 626.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Geographic location: ​ ​ ​ ​ ​ ​ Americas ​ $ 252.6 ​ $ 182.7 ​ $ 435.3 ​ $ 174.1 ​ $ 178.4 ​ $ 352.5 Europe ​ 105.9 ​ 72.5 ​ 178.4 ​ 109.1 ​ 110.0 ​ 219.1 Asia ​ 7.9 ​ 42.3 ​ 50.2 ​ 6.0 ​ 48.9 ​ 54.9 Net sales ​ $ 366.4 ​ $ 297.5 ​ $ 663.9 ​ $ 289.2 ​ $ 337.3 ​ $ 626.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Timing of revenue recognition: ​ ​ ​ ​ ​ ​ Products transferred at a point in time ​ $ 350.9 ​ $ 294.6 ​ $ 645.5 ​ $ 271.6 ​ $ 333.7 ​ $ 605.3 Products transferred over time ​ 15.5 ​ 2.9 ​ 18.4 ​ 17.6 ​ 3.6 ​ 21.2 Net sales ​ $ 366.4 ​ $ 297.5 ​ $ 663.9 ​ $ 289.2 ​ $ 337.3 ​ $ 626.5 ​ 10 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended September 30, 2024 ​ Six months ended September 30, 2023 ​ Climate Performance Segment Climate Performance Segment ​ ​ Solutions ​ Technologies ​ Total ​ Solutions ​ Technologies ​ Total Product groups: ​ ​ ​ ​ ​ ​ Data center cooling ​ $ 321.5 ​ $ — ​ $ 321.5 ​ $ 147.0 ​ $ — ​ $ 147.0 Heat transfer ​ 215.2 ​ — ​ 215.2 ​ 260.0 ​ — ​ 260.0 HVAC&R ​ 186.9 ​ — ​ 186.9 ​ 168.9 ​ — ​ 168.9 Air-cooled ​ — ​ 323.8 ​ 323.8 ​ — ​ 346.0 ​ 346.0 Liquid-cooled ​ — ​ 203.1 ​ 203.1 ​ — ​ 261.1 ​ 261.1 Advanced solutions ​ — ​ 69.0 ​ 69.0 ​ — ​ 59.9 ​ 59.9 Inter-segment sales ​ 0.1 ​ 10.6 ​ 10.7 ​ — ​ 13.4 ​ 13.4 Net sales ​ $ 723.7 ​ $ 606.5 ​ $ 1,330.2 ​ $ 575.9 ​ $ 680.4 ​ $ 1,256.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Geographic location: ​ ​ ​ ​ ​ ​ Americas ​ $ 492.6 ​ $ 367.4 ​ $ 860.0 ​ $ 327.4 ​ $ 351.1 ​ $ 678.5 Europe ​ 217.4 ​ 152.6 ​ 370.0 ​ 236.0 ​ 230.0 ​ 466.0 Asia ​ 13.7 ​ 86.5 ​ 100.2 ​ 12.5 ​ 99.3 ​ 111.8 Net sales ​ $ 723.7 ​ $ 606.5 ​ $ 1,330.2 ​ $ 575.9 ​ $ 680.4 ​ $ 1,256.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Timing of revenue recognition: ​ ​ ​ ​ ​ ​ Products transferred at a point in time ​ $ 691.6 ​ $ 600.4 ​ $ 1,292.0 ​ $ 529.8 ​ $ 673.7 ​ $ 1,203.5 Products transferred over time ​ 32.1 ​ 6.1 ​ 38.2 ​ 46.1 ​ 6.7 ​ 52.8 Net sales ​ $ 723.7 ​ $ 606.5 ​ $ 1,330.2 ​ $ 575.9 ​ $ 680.4 ​ $ 1,256.3 ​ Contract balances Contract assets and contract liabilities from contracts with customers were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 March 31, 2024 Contract assets ​ $ 14.5 ​ $ 12.9 Contract liabilities ​ 51.9 ​ 79.4 ​ Contract assets, included within other current assets in the consolidated balance sheets, 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. The $ 1.6 million increase in contract assets during the first six months of fiscal 2025 primarily resulted from increases in contract assets for revenue recognized over time and in capitalized costs related to the Company’s fulfillment of its performance obligations. Contract liabilities, included within other current liabilities in the consolidated balance sheets, consist of payments received in advance of satisfying performance obligations under customer contracts, including contracts for data center cooling products and customer-owned tooling. The $ 27.5 million decrease in contract liabilities during the first six months of fiscal 2025 primarily resulted from the Company’s satisfaction of performance obligations under contracts that had required advanced payments, largely associated with long inventory lead times. 11 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) Note 4: Fair Value Measurements Fair value is defined as the price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Fair value measurements are classified under the following hierarchy: ● Level 1 – Quoted prices for identical instruments in active markets. ● Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. ● Level 3 – Model-derived valuations in which one or more significant inputs are not observable. When available, the Company uses quoted market prices to determine fair value and classifies such measurements as Level 1. In some cases, where market prices are not available, the Company uses observable market-based inputs to calculate fair value, in which case the measurements are classified as Level 2. If quoted or observable market prices are not available, the Company determines fair value based upon valuation models that use, where possible, market-based data such as interest rates, yield curves or currency rates. These measurements are classified as Level 3. The carrying values of cash, cash equivalents, restricted cash, trade accounts receivable, accounts payable, and short-term debt approximate fair value due to the short-term nature of these instruments. The fair value of the Company’s long-term debt is disclosed in Note 17. Note 5: Pensions Pension cost included the following components: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, ​ Six months ended September 30, ​ 2024 2023 2024 2023 Service cost ​ $ 0.1 ​ $ — ​ $ 0.1 ​ $ 0.1 Interest cost ​ 2.2 ​ 2.4 ​ 4.5 ​ 4.8 Expected return on plan assets ​ ( 2.1 ) ​ ( 2.6 ) ​ ( 4.3 ) ​ ( 5.2 ) Amortization of unrecognized net loss ​ 1.1 ​ 1.2 ​ 2.3 ​ 2.3 Net periodic benefit cost ​ $ 1.3 ​ $ 1.0 ​ $ 2.6 ​ $ 2.0 ​ During the six months ended September 30, 2024, the Company contributed $ 6.5 million to its U.S. pension plan. In June 2024, the Company approved the termination of its U.S. pension plan, subject to approvals from the Internal Revenue Service and the Pension Benefit Guaranty Corporation. The Company intends to offer certain participants the option to receive their pension benefits in the form of a lump-sum distribution prior to purchasing annuity contracts to transfer its remaining obligations under the plan. In connection with the plan termination, the Company expects to make additional cash contributions in the range of $ 10.0 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 $ 130.0 million during 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. 12 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) Note 6: Stock-Based Compensation The Company’s stock-based incentive programs consist of the following: (i) a long-term incentive plan (“LTIP”) for officers and other executives that authorizes grants of stock awards, stock options, and performance-based awards for retention and performance, (ii) a discretionary equity program for other management and key employees, and (iii) stock awards for non-employee directors. The Company calculates compensation expense based upon the fair value of the awards at the time of grant and subsequently recognizes expense ratably over the respective vesting periods of the stock-based awards. The Company recognized stock-based compensation expense of $ 5.6 million and $ 3.1 million for the three months ended September 30, 2024 and 2023, respectively. The Company recognized stock-based compensation expense of $ 9.8 million and $ 4.6 million for the six months ended September 30, 2024 and 2023, respectively. During the first six months of fiscal 2025, 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, 2027. The weighted-average fair value of stock-based compensation awards granted during the six months ended September 30, 2024 and 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended September 30, ​ ​ 2024 ​ 2023 ​ ​ ​ ​ Fair Value ​ ​ ​ Fair Value ​ ​ Shares Per Award Shares Per Award Performance stock awards 0.1 ​ $ 103.77 0.3 ​ $ 27.29 Restricted stock awards — ​ $ 105.40 0.1 ​ $ 33.19 ​ As of September 30, 2024, 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized ​ Weighted-Average ​ ​ Compensation ​ Remaining Service ​ Expense Period in Years Performance stock awards ​ $ 30.6 2.2 Restricted stock awards ​ 8.2 1.6 Stock options ​ 0.9 0.5 Total ​ $ 39.7 2.0 ​ ​ Note 7: Restructuring Activities 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 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. 13 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) During the first six months of fiscal 2024, restructuring and repositioning expenses primarily consisted of equipment transfer costs in the Climate Solutions and Performance Technologies segments. Restructuring and repositioning expenses were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, Six months ended September 30, ​ 2024 2023 2024 2023 Employee severance and related benefits ​ $ 3.2 ​ $ 0.1 ​ $ 8.0 ​ $ 0.1 Other restructuring and repositioning expenses ​ 1.3 ​ 0.4 ​ 1.9 ​ 0.4 Total ​ $ 4.5 ​ $ 0.5 ​ $ 9.9 ​ $ 0.5 ​ ​ Other restructuring and repositioning expenses primarily consist of costs related to product line transfers. 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, ​ 2024 2023 Beginning balance ​ $ 8.6 ​ $ 8.9 Additions ​ 3.2 ​ 0.1 Payments ​ ( 4.1 ) ​ ( 3.1 ) Reclassified as held for sale (a) ​ ​ — ​ ​ ( 2.5 ) Effect of exchange rate changes ​ 0.2 ​ ( 0.2 ) Ending balance ​ $ 7.9 ​ $ 3.2 ​ ​ ​ ​ ​ ​ ​ ​ Six months ended September 30, ​ 2024 2023 Beginning balance ​ $ 13.0 ​ $ 10.6 Additions ​ 8.0 ​ 0.1 Payments ​ ( 13.3 ) ​ ( 4.9 ) Reclassified as held for sale (a) ​ ​ — ​ ​ ( 2.5 ) Effect of exchange rate changes ​ 0.2 ​ ( 0.1 ) Ending balance ​ $ 7.9 ​ $ 3.2 ____ ​ ​ ​ ​ ​ ​ ​ (a) The Company reclassified the assets and liabilities of three businesses based in Germany as held for sale on the September 30, 2023 balance sheet. These businesses were subsequently sold in October 2023. See Note 2 for additional information regarding the sale. ​ ​ ​ 14 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) Note 8: Other Income and Expense Other income and expense consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, Six months ended September 30, ​ 2024 2023 2024 2023 Interest income ​ $ 0.8 ​ $ 1.2 ​ $ 1.5 ​ $ 1.7 Foreign currency transactions (a) ​ ( 1.2 ) ​ ( 0.2 ) ​ ( 1.0 ) ​ ( 0.5 ) Net periodic benefit cost (b) ​ ( 1.1 ) ​ ( 0.9 ) ​ ( 2.3 ) ​ ( 1.7 ) Total other (expense) income - net ​ $ ( 1.5 ) ​ $ 0.1 ​ $ ( 1.8 ) ​ $ ( 0.5 ) ____ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (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. Note 9: Income Taxes The Company’s effective tax rate for the three months ended September 30, 2024 and 2023 was 30.1 percent and 21.4 percent, respectively. The Company’s effective tax rate for the six months ended September 30, 2024 and 2023 was 29.2 percent and 23.0 percent, respectively. The effective tax rates for fiscal 2025 are higher than the prior year, primarily due to changes in the mix and amount of foreign and U.S. earnings. In addition, the effective tax rates for the prior-year periods were favorably impacted by the release of a $ 1.8 million unrecognized tax benefit during the second quarter of fiscal 2024, due to a lapse in statute of limitations. ​ 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. Each quarter, the Company evaluates the probability that its deferred tax assets will be realized and determines whether valuation allowances or adjustments thereto are needed. This determination involves judgement and the use of significant estimates and assumptions, including expectations of future taxable income and tax planning strategies. In addition, the Company considers the duration of statutory carryforward periods and historical financial results. At September 30, 2024, valuation allowances against deferred tax assets in the U.S. and in certain foreign jurisdictions totaled $ 46.3 million and $ 23.8 million, respectively. The Company will maintain the valuation allowances in each applicable tax jurisdiction until it determines it is more likely than not the deferred tax assets will be realized, thereby eliminating the need for a valuation allowance. Future events or circumstances, such as lower taxable income or unfavorable changes in the financial outlook of the Company’s operations in the U.S. and certain foreign jurisdictions, could necessitate the establishment of further valuation allowances. ​ 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. Under this methodology, the Company applies its estimated annual income tax rate to its year-to-date ordinary earnings to derive its income tax provision each quarter. The Company records the tax impacts of certain significant, unusual or infrequently occurring items in the period in which they occur. In addition, the Company excludes the impact of operations anticipated to generate net operating losses for the full fiscal year from the overall effective tax rate calculation and instead records them discretely based upon year-to-date results. The Company does not anticipate a significant change in unrecognized tax benefits during the remainder of fiscal 2025. 15 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) Note 10: 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, ​ 2024 2023 2024 2023 Net earnings attributable to Modine ​ $ 46.1 ​ $ 46.5 ​ $ 93.4 ​ $ 91.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average shares outstanding – basic ​ 52.6 ​ 52.4 ​ 52.5 ​ 52.4 Effect of dilutive securities ​ 1.3 ​ 1.0 ​ 1.4 ​ 0.8 Weighted-average shares outstanding – diluted ​ 53.9 ​ 53.4 ​ 53.9 ​ 53.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net earnings per share – basic ​ $ 0.88 ​ $ 0.89 ​ $ 1.78 ​ $ 1.74 Net earnings per share – diluted ​ $ 0.86 ​ $ 0.87 ​ $ 1.73 ​ $ 1.72 ​ There were no anti-dilutive securities outstanding for the three and six months ended September 30, 2024 and the three months ended September 30, 2023. For the six months ended September 30, 2023, the Company excluded 0.1 million of restricted stock awards for the calculation of diluted earnings per share because they were anti-dilutive. Note 11: Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 March 31, 2024 Cash and cash equivalents ​ $ 78.6 ​ $ 60.1 Restricted cash ​ 0.3 ​ 0.2 Total cash, cash equivalents and restricted cash ​ $ 78.9 ​ $ 60.3 ​ Restricted cash, which is reported within other current assets and other noncurrent assets in the consolidated balance sheets, consists primarily of deposits for contractual guarantees or commitments required for rents, import and export duties, and commercial agreements. ​ Note 12: Inventories Inventories consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 March 31, 2024 Raw materials ​ $ 224.0 ​ $ 207.8 Work in process ​ 69.6 ​ 64.5 Finished goods ​ 72.9 ​ 85.6 Total inventories ​ $ 366.5 ​ $ 357.9 ​ ​ 16 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) Note 13: Property, Plant and Equipment Property, plant and equipment, including depreciable lives, consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 March 31, 2024 Land ​ $ 16.8 ​ $ 16.3 Buildings and improvements ( 10 - 40 years) ​ 289.3 ​ 280.7 Machinery and equipment ( 3 - 15 years) ​ 858.4 ​ 824.4 Office equipment ( 3 - 10 years) ​ 95.8 ​ 97.0 Construction in progress ​ 57.6 ​ 67.6 ​ ​ 1,317.9 ​ 1,286.0 Less: accumulated depreciation ​ ( 944.0 ) ​ ( 920.3 ) Net property, plant and equipment ​ $ 373.9 ​ $ 365.7 ​ ​ Note 14: Goodwill and Intangible Assets During the first quarter of fiscal 2025, the Company recorded a measurement period adjustment to reduce the fair value of the acquired Scott Springfield Manufacturing trade name by $ 9.6 million. This purchase accounting adjustment resulted in a $ 7.4 million increase in goodwill. See Note 2 for additional information. As a result of the segment realignment during the first quarter of fiscal 2025, the Company’s goodwill now resides entirely within the Climate Solutions segment. The following table presents a roll forward of the carrying value of goodwill from March 31, 2024 to September 30, 2024. ​ ​ ​ ​ ​ ​ Climate Solutions Goodwill, March 31, 2024 ​ $ 230.9 Acquisition adjustment ​ 7.4 Effect of exchange rate changes ​ 2.4 Goodwill, September 30, 2024 ​ $ 240.7 ​ Intangible assets consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 ​ March 31, 2024 ​ Gross ​ ​ Net Gross ​ Net ​ ​ Carrying ​ Accumulated ​ Intangible ​ Carrying ​ Accumulated ​ Intangible ​ ​ Value ​ Amortization ​ Assets ​ Value ​ Amortization ​ Assets Customer relationships ​ $ 151.5 ​ $ ( 37.8 ) ​ $ 113.7 ​ $ 150.5 ​ $ ( 26.3 ) ​ $ 124.2 Trade names ​ 53.6 ​ ( 19.9 ) ​ 33.7 ​ 62.8 ​ ( 18.5 ) ​ 44.3 Acquired technology ​ 32.8 ​ ( 14.4 ) ​ 18.4 ​ 32.5 ​ ( 12.7 ) ​ 19.8 Total intangible assets ​ $ 237.9 ​ $ ( 72.1 ) ​ $ 165.8 ​ $ 245.8 ​ $ ( 57.5 ) ​ $ 188.3 ​ The Company recorded amortization expense of $ 6.9 million and $ 2.0 million for the three months ended September 30, 2024 and 2023, respectively. The Company recorded amortization expense of $ 13.8 million and $ 4.0 million for the six months ended September 30, 2024 and 2023, respectively. The Company estimates that it will record approximately $ 14.0 million of amortization expense during the remainder of fiscal 2025. The Company estimates that it will record approximately $ 18.0 million, $ 16.0 million, $ 16.0 million, and $ 15.0 million of annual amortization expense in fiscal 2026 through 2029, respectively. ​ 17 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) Note 15: Product Warranties Changes in accrued warranty costs were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, ​ 2024 2023 Beginning balance ​ $ 10.8 ​ $ 7.9 Warranties recorded at time of sale ​ 1.9 ​ 1.6 Adjustments to pre-existing warranties ​ ( 0.3 ) ​ 2.5 Settlements ​ ( 1.6 ) ​ ( 1.4 ) Reclassified as held for sale (a) ​ ​ — ​ ​ ( 0.2 ) Effect of exchange rate changes ​ 0.3 ​ ( 0.1 ) Ending balance ​ $ 11.1 ​ $ 10.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended September 30, ​ 2024 2023 Beginning balance ​ $ 10.7 ​ $ 6.9 Warranties recorded at time of sale ​ 3.8 ​ 3.1 Adjustments to pre-existing warranties ​ ( 0.4 ) ​ 3.1 Settlements ​ ( 3.3 ) ​ ( 2.5 ) Reclassified as held for sale (a) ​ ​ — ​ ​ ( 0.2 ) Effect of exchange rate changes ​ 0.3 ​ ( 0.1 ) Ending balance ​ $ 11.1 ​ $ 10.3 ____ ​ ​ ​ ​ ​ ​ ​ (a) The Company reclassified the assets and liabilities of three businesses based in Germany as held for sale on the September 30, 2023 balance sheet. These businesses were subsequently sold in October 2023. See Note 2 for additional information regarding the sale. ​ ​ 18 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) Note 16: Leases Lease assets and liabilities The following table provides a summary of leases recorded on the consolidated balance sheets. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance Sheet Location September 30, 2024 March 31, 2024 Lease Assets ​ ​ Operating lease ROU assets Other noncurrent assets ​ $ 91.4 ​ $ 76.0 Finance lease ROU assets (a) Property, plant and equipment - net ​ 7.3 ​ 6.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ Lease Liabilities ​ ​ Operating lease liabilities Other current liabilities ​ $ 17.4 ​ $ 15.3 Operating lease liabilities Other noncurrent liabilities ​ 75.4 ​ 62.1 Finance lease liabilities Long-term debt - current portion ​ 0.5 ​ 0.4 Finance lease liabilities Long-term debt ​ 2.5 ​ 1.9 ____ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Finance right of use ( “ ROU ” ) assets were recorded net of accumulated amortization of $ 4.0 million and $ 3.7 million as of September 30, 2024 and March 31, 2024, respectively. The increases in operating lease ROU assets and liabilities from March 31, 2024 to September 30, 2024 primarily resulted from the commencement of a 10 - year manufacturing facility lease within the Climate Solutions segment. The Company entered into this new lease to increase production capacity for data center products. Components of lease expense The components of lease expense were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, ​ Six months ended September 30, ​ 2024 2023 2024 2023 Operating lease expense (a) ​ $ 7.7 ​ $ 5.6 ​ $ 14.6 ​ $ 11.5 Finance lease expense: ​ ​ ​ ​ Depreciation of ROU assets ​ 0.2 ​ 0.2 ​ 0.3 ​ 0.3 Interest on lease liabilities ​ 0.1 ​ 0.1 ​ 0.1 ​ 0.1 Total lease expense ​ $ 8.0 ​ $ 5.9 ​ $ 15.0 ​ $ 11.9 ____ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) For 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. For three and six months ended September 30, 2023, operating lease expense included short-term lease expense of $ 1.4 million and $ 2.9 million, respectively. Variable lease expense was not significant. During July 2024, the Company signed a 10-year operating lease of a manufacturing facility with future lease payments totaling approximately $ 12.0 million which is expected to commence in the third quarter of fiscal 2025. ​ 19 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) Note 17: Indebtedness Long-term debt consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal year ​ ​ ​ ​ ​ ​ of maturity ​ September 30, 2024 ​ March 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Term loans ​ 2028 ​ $ 200.3 ​ $ 204.5 5.9 % Senior Notes ​ 2029 ​ 100.0 ​ 100.0 Revolving credit facility ​ 2028 ​ 65.0 ​ 90.0 5.8 % Senior Notes ​ 2027 ​ 25.0 ​ 25.0 Finance lease obligations ​ ​ ​ ​ 3.0 ​ 2.3 ​ ​ ​ ​ ​ 393.3 ​ 421.8 Less: current portion ​ ​ ​ ​ ( 32.3 ) ​ ( 19.7 ) Less: unamortized debt issuance costs ​ ​ ​ ​ ( 1.9 ) ​ ( 2.2 ) Total long-term debt ​ ​ ​ ​ $ 359.1 ​ $ 399.9 ​ Long-term debt, including the current portion of long-term debt, matures as follows: ​ ​ ​ ​ ​ Fiscal Year ​ Remainder of 2025 ​ $ 14.1 2026 ​ 44.8 2027 ​ 44.8 2028 ​ 263.4 2029 ​ 25.5 2030 & beyond ​ ​ 0.7 Total ​ $ 393.3 ​ The Company maintains a credit agreement with a syndicate of banks that provides for a multi-currency $ 275.0 million revolving credit facility and U.S. dollar- and euro-denominated term loan facilities maturing in October 2027. In addition, the credit agreement provides for shorter-duration swingline loans. Borrowings under the revolving credit, swingline and term loan facilities bear interest at a variable rate, based upon the applicable reference rate and including a margin percentage dependent upon the Company’s leverage ratio, as described below. At September 30, 2024, the weighted-average interest rate for revolving credit facility borrowings and the term loans was 6.3 and 5.8 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, 2024, the Company’s borrowings under its revolving credit and swingline facilities totaled $ 65.0 million and $ 13.0 million, respectively, and domestic letters of credit totaled $ 6.2 million. As a result, available borrowing capacity under the Company’s revolving credit facility was $ 190.8 million as of September 30, 2024. At March 31, 2024, the Company’s borrowings under its revolving credit and swingline facilities totaled $ 90.0 million and $ 2.0 million, respectively. The Company also maintains credit agreements for its foreign subsidiaries. The outstanding short-term borrowings related to these foreign credit agreements totaled $ 1.0 million and $ 10.0 million at September 30, 2024 and March 31, 2024, respectively. 20 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) Indebtedness under the Company’s credit agreement and Senior Note agreements is secured by liens on substantially all domestic assets. These agreements further require compliance with various covenants that may limit the Company’s ability to incur additional indebtedness; grant liens; make investments, loans, or guarantees; engage in certain transactions with affiliates; and make restricted payments, including dividends. In addition, the agreements may require prepayment in the event of certain asset sales. Financial covenants within its credit agreements include a leverage ratio covenant, which requires the Company to limit its consolidated indebtedness, less a portion of its cash balances, both as defined by the credit agreements, to no more than three and one-quarter times consolidated net earnings before interest, taxes, depreciation, amortization, and certain other adjustments (“Adjusted EBITDA”). The Company must also maintain a ratio of Adjusted EBITDA of at least three times consolidated interest expense. As of September 30, 2024, 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, 2024 and March 31, 2024, 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 $ 124.9 million and $ 120.9 million, respectively. The fair value of the Company’s long-term debt is categorized as Level 2 within the fair value hierarchy. Refer to Note 4 for the definition of a Level 2 fair value measurement. ​ Note 18: Risks, Uncertainties, Contingencies and Litigation Environmental The Company has recorded environmental monitoring and remediation accruals related to manufacturing facilities in the U.S., one of which the Company currently owns and operates, and at its former manufacturing facility in the Netherlands. These accruals primarily relate to soil and groundwater contamination at facilities where past operations followed practices and procedures that were considered acceptable under then-existing regulations, or where the Company is a successor to the obligations of prior owners, and current laws and regulations require investigative and/or remedial work to ensure sufficient environmental compliance. 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 $ 17.4 million and $ 17.6 million as of September 30, 2024 and March 31, 2024, respectively. As additional information becomes available regarding environmental matters, the Company will re-assess the liabilities and revise the estimated accruals, if necessary. While it is possible that the ultimate environmental remediation costs may be in excess of amounts accrued, the Company believes, based upon currently available information, that the ultimate outcome of these matters, individually and in the aggregate, will not have a material adverse effect on its financial position. However, these matters are subject to inherent uncertainties, and unfavorable outcomes could occur, including significant monetary damages. Other litigation In the normal course of business, the Company and its subsidiaries are named as defendants in various lawsuits and enforcement proceedings by private parties, governmental agencies and/or others in which claims are asserted against Modine. The Company believes that any additional loss in excess of amounts already accrued would not have a material effect on the Company’s consolidated balance sheet, results of operations, and cash flows. In addition, management expects that the liabilities which may ultimately result from such lawsuits or proceedings, if any, would not have a material adverse effect on the Company’s financial position. 21 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) Note 19: Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, 2024 ​ Six months ended September 30, 2024 ​ Foreign ​ ​ ​ ​ ​ ​ Foreign ​ ​ ​ ​ ​ ​ ​ ​ Currency ​ Defined ​ Cash Flow ​ ​ ​ Currency ​ Defined ​ Cash Flow ​ ​ ​ ​ Translation ​ Benefit Plans ​ Hedges ​ Total ​ Translation ​ Benefit Plans ​ Hedges ​ Total Beginning balance $ ( 69.7 ) $ ( 99.9 ) $ 0.1 $ ( 169.5 ) $ ( 62.8 ) $ ( 100.7 ) $ 0.1 $ ( 163.4 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income before reclassifications ​ 20.7 ​ — ​ 0.4 ​ 21.1 ​ 13.8 ​ — ​ 0.4 ​ 14.2 Reclassifications: ​ ​ ​ ​ ​ ​ ​ ​ Amortization of unrecognized net loss (a) ​ — ​ 1.0 ​ — ​ 1.0 ​ — ​ 2.1 ​ — ​ 2.1 Realized gains - net (b) ​ — ​ — ​ ( 0.1 ) ​ ( 0.1 ) ​ — ​ — ​ ( 0.1 ) ​ ( 0.1 ) Income taxes ​ — ​ ( 0.2 ) ​ ( 0.1 ) ​ ( 0.3 ) ​ — ​ ( 0.5 ) ​ ( 0.1 ) ​ ( 0.6 ) Total other comprehensive income ​ 20.7 ​ 0.8 ​ 0.2 ​ 21.7 ​ 13.8 ​ 1.6 ​ 0.2 ​ 15.6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance ​ $ ( 49.0 ) ​ $ ( 99.1 ) ​ $ 0.3 ​ $ ( 147.8 ) ​ $ ( 49.0 ) ​ $ ( 99.1 ) ​ $ 0.3 ​ $ ( 147.8 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, 2023 ​ Six months ended September 30, 2023 ​ ​ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Currency ​ Defined ​ Cash Flow ​ ​ ​ Currency ​ Defined ​ Cash Flow ​ ​ ​ Translation Benefit Plans Hedges Total Translation Benefit Plans Hedges Total Beginning balance ​ $ ( 58.1 ) ​ $ ( 103.6 ) ​ $ 0.1 ​ $ ( 161.6 ) ​ $ ( 57.5 ) ​ $ ( 104.4 ) ​ $ 0.8 ​ $ ( 161.1 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss) before reclassifications ​ ( 12.7 ) ​ — ​ — ​ ( 12.7 ) ​ ( 13.3 ) ​ — ​ ( 0.4 ) ​ ( 13.7 ) Reclassifications: ​ ​ ​ ​ ​ ​ ​ ​ Amortization of unrecognized net loss (a) ​ — ​ 1.1 ​ — ​ 1.1 ​ — ​ 2.1 ​ — ​ 2.1 Realized gains - net (b) ​ — ​ — ​ ( 0.3 ) ​ ( 0.3 ) ​ — ​ — ​ ( 0.8 ) ​ ( 0.8 ) Income taxes ​ — ​ ( 0.3 ) ​ 0.1 ​ ( 0.2 ) ​ — ​ ( 0.5 ) ​ 0.3 ​ ( 0.2 ) Total other comprehensive income (loss) ​ ( 12.7 ) ​ 0.8 ​ ( 0.2 ) ​ ( 12.1 ) ​ ( 13.3 ) ​ 1.6 ​ ( 0.9 ) ​ ( 12.6 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance ​ $ ( 70.8 ) ​ $ ( 102.8 ) ​ $ ( 0.1 ) ​ $ ( 173.7 ) ​ $ ( 70.8 ) ​ $ ( 102.8 ) ​ $ ( 0.1 ) ​ $ ( 173.7 ) ____ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Amounts are included in the calculation of net periodic benefit cost for the Company’s defined benefit plans, which include pension and other postretirement plans. 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. ​ 22 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) Note 20: Segment Information Effective April 1, 2024, the Company moved its Coatings business, which was previously managed by and reported within the Performance Technologies segment, under the leadership of the Climate Solutions segment. Under this refined organizational structure, the Coatings business is better aligned with the Climate Solution’s Heat Transfer Products business, which serves similar heating, ventilating, air conditioning, and refrigeration markets and customers. The Company believes that unifying these complementary businesses is allowing it to better focus resources on targeted growth opportunities and more efficiently apply 80/20 principles to optimize profit margins and cash flow. Segment financial information for the prior periods has been recast to conform to the current presentation. The following is a summary of net sales, gross profit and operating income by segment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, ​ ​ 2024 ​ 2023 ​ ​ External ​ Inter-segment ​ ​ ​ ​ External ​ Inter-segment ​ ​ ​ ​ ​ Sales Sales Total Sales Sales Total Net sales: ​ ​ ​ ​ ​ ​ Climate Solutions ​ $ 366.4 ​ $ — ​ $ 366.4 ​ $ 289.2 ​ $ — ​ $ 289.2 Performance Technologies ​ 291.6 ​ 5.9 ​ 297.5 ​ 331.3 ​ 6.0 ​ 337.3 Segment total ​ 658.0 ​ 5.9 ​ 663.9 ​ 620.5 ​ 6.0 ​ 626.5 Corporate and eliminations ​ — ​ ( 5.9 ) ​ ( 5.9 ) ​ — ​ ( 6.0 ) ​ ( 6.0 ) Net sales ​ $ 658.0 ​ $ — ​ $ 658.0 ​ $ 620.5 ​ $ — ​ $ 620.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended September 30, ​ ​ 2024 ​ 2023 ​ ​ External ​ Inter-segment ​ ​ ​ ​ External ​ Inter-segment ​ ​ ​ ​ ​ Sales Sales Total Sales Sales Total Net sales: ​ ​ ​ ​ ​ ​ Climate Solutions ​ $ 723.6 ​ $ 0.1 ​ $ 723.7 ​ $ 575.9 ​ $ — ​ $ 575.9 Performance Technologies ​ 595.9 ​ 10.6 ​ 606.5 ​ 667.0 ​ 13.4 ​ 680.4 Segment total ​ 1,319.5 ​ 10.7 ​ 1,330.2 ​ 1,242.9 ​ 13.4 ​ 1,256.3 Corporate and eliminations ​ — ​ ( 10.7 ) ​ ( 10.7 ) ​ — ​ ( 13.4 ) ​ ( 13.4 ) Net sales ​ $ 1,319.5 ​ $ — ​ $ 1,319.5 ​ $ 1,242.9 ​ $ — ​ $ 1,242.9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, Six months ended September 30, ​ ​ 2024 ​ 2023 2024 ​ 2023 ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ ​ $’s sales $’s sales $’s sales $’s sales Gross profit: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Climate Solutions ​ $ 106.3 ​ 29.0 % $ 76.9 ​ 26.6 % ​ $ 207.1 ​ 28.6 % $ 152.7 ​ 26.5 % Performance Technologies ​ 60.1 ​ 20.2 % 57.6 ​ 17.1 % ​ 123.6 ​ 20.4 % 109.5 ​ 16.1 % Segment total ​ 166.4 ​ 25.1 % 134.5 ​ 21.5 % ​ 330.7 ​ 24.9 % 262.2 ​ 20.9 % Corporate and eliminations ​ ( 0.8 ) ​ — ​ 0.6 ​ — ​ ​ ( 2.5 ) ​ — ​ 0.8 ​ — ​ Gross profit ​ $ 165.6 ​ 25.2 % $ 135.1 ​ 21.8 % ​ $ 328.2 ​ 24.9 % $ 263.0 ​ 21.2 % ​ 23 Table of Contents MODINE MANUFACTURING COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share amounts) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended September 30, ​ Six months ended September 30, ​ 2024 2023 2024 2023 Operating income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Climate Solutions ​ $ 64.7 ​ $ 47.1 ​ $ 124.5 ​ $ 95.7 Performance Technologies ​ 30.8 ​ 31.2 ​ 62.3 ​ 58.8 Segment total ​ 95.5 ​ 78.3 ​ 186.8 ​ 154.5 Corporate and eliminations ​ ( 20.2 ) ​ ( 12.6 ) ​ ( 37.1 ) ​ ( 22.3 ) Operating income ​ $ 75.3 ​ $ 65.7 ​ $ 149.7 ​ $ 132.2 ​ The following is a summary of segment assets, comprised entirely of trade accounts receivable and inventories, and other assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 March 31, 2024 Assets: ​ ​ ​ ​ Climate Solutions ​ $ 433.0 ​ $ 412.7 Performance Technologies ​ 386.4 ​ 368.1 Other (a) ​ 1,096.2 ​ 1,070.7 Total assets ​ $ 1,915.6 ​ $ 1,851.5 ____ ​ ​ ​ ​ ​ ​ ​ (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. ​ ​ 24 Table of Contents