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Press Release: Modine Reports Third Quarter -3-

· 02/04/2021 16:30
income (108.7) 8.2 (83.4) 32.3 Interest expense (4.6) (5.6) (15.2) (17.3) Other (expense) income- net (0.5) 0.1 (1.0) (2.3) (Loss) earnings before income taxes (113.8) 2.7 (99.6) 12.7 Provision for income taxes (81.6) (1.7) (95.3) (8.3) Net (loss) earnings (195.4) 1.0 (194.9) 4.4 Net (earnings) loss attributable to noncontrolling interest (0.3) 0.2 (0.8) 0.1 Net (loss) earnings attributable to Modine $(195.7) $ 1.2 $(195.7) $4.5 Net (loss) earnings per share attributable to Modine shareholders - diluted $(3.81) $ 0.02 $(3.82) $0.09 Weighted-average shares outstanding - diluted 51.3 51.1 51.2 51.1 Condensed consolidated balance sheets (unaudited) (In millions) December 31, 2020 March 31, 2020 Assets ----------------- Cash and cash equivalents $72.9 $ 70.9 Trade receivables 233.5 292.5 Inventories 190.6 207.4 Assets held for sale 92.9 - Other current assets 39.5 62.5 Total current assets 629.4 633.3 Property, plant and equipment - net 305.2 448.0 Intangible assets - net 104.5 106.3 Goodwill 172.4 166.1 Deferred income taxes 25.2 104.8 Other noncurrent assets 70.0 77.6 Total assets $1,306.7 $ 1,536.1 Liabilities and shareholders' equity ----------------- Debt due within one year $22.6 $ 30.4 Accounts payable 200.6 227.4 Liabilities held for sale 83.2 - Other current liabilities 114.6 114.2 Total current liabilities 421.0 372.0 Long-term debt 342.0 452.0 Other noncurrent liabilities 195.1 218.5 Total liabilities 958.1 1,042.5 Total equity 348.6 493.6 Total liabilities & equity $1,306.7 $ 1,536.1 Modine Manufacturing Company Condensed consolidated statements of cash flows (unaudited) (In millions) Nine months ended December 31, 2020 2019 Cash flows from operating activities: Net (loss) earnings $(194.9) $ 4.4 Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: Depreciation and amortization 54.2 57.8 Impairment charges 134.4 - Gain on sale of assets - (0.8) Stock-based compensation expense 4.2 5.2 Deferred income taxes 77.5 0.2 Other - net 4.7 3.5 Changes in operating assets and liabilities: Trade accounts receivable 24.5 52.6 Inventories 9.9 (23.6) Accounts payable 1.1 (32.4) Other assets and liabilities 30.9 (21.0) Net cash provided by operating activities 146.5 45.9 Cash flows from investing activities: Expenditures for property, plant and equipment (23.7) (58.2) Proceeds from disposition of assets 0.7 6.5 Other - net 0.6 4.6 Net cash used for investing activities (22.4) (47.1) Cash flows from financing activities: Net (decrease) increase in debt (119.0) 3.8 Other - net (1.6) (7.7) Net cash used for financing activities (120.6) (3.9) Effect of exchange rate changes on cash 3.6 (0.5) Net increase (decrease) in cash, cash equivalents, restricted cash and cash held for sale 7.1 (5.6) Cash, cash equivalents, restricted cash and cash held for sale - beginning of period 71.3 42.2 Cash, cash equivalents, restricted cash and cash held for sale - end of period $78.4 $ 36.6 Modine Manufacturing Company Segment operating results (unaudited) (In millions) Three months ended Nine months ended December 31, December 31, 2020 2019 2020 2019 Net sales: Commercial and Industrial Solutions $129.0 $ 147.5 $385.6 $473.0 Building HVAC Systems 68.7 64.9 178.2 169.9 Heavy Duty Equipment 185.6 164.9 474.7 568.5 Automotive 113.9 110.5 285.9 339.8 Segment total 497.2 487.8 1,324.4 1,551.2 Corporate and eliminations (12.9) (14.4) (30.9) (48.6) Net sales $484.3 $ 473.4 $1,293.5 $1,502.6 Three months ended December 31, Nine months ended December 31, 2020 2019 2020 2019 % of % of % of % of Gross profit: $'s sales $'s sales $'s sales $'s sales Commercial and Industrial Solutions $12.6 9.8% $22.7 15.4% $47.4 12.3% $69.9 14.8% Building HVAC Systems 25.7 37.3% 23.1 35.5% 61.9 34.7% 54.5 32.1% Heavy Duty Equipment 26.0 14.0% 16.8 10.2% 60.9 12.8% 71.7 12.6% Automotive 18.4 16.1% 12.2 11.0% 39.8 13.9% 37.7 11.1% Segment total 82.7 16.6% 74.8 15.3% 210.0 15.9% 233.8 15.1% Corporate and eliminations - - (1.3) - (0.4) - (1.2) - Gross profit $82.7 17.1% $73.5 15.5% $209.6 16.2% $232.6 15.5% Three months ended Nine months ended December December 31, 31, 2020 2019 2020 2019 Operating income: Commercial and Industrial Solutions $ (1.7) $ 8.3 $ 3.9 $ 25.8 Building HVAC Systems 15.8 13.5 36.0 27.6 Heavy Duty Equipment 12.8 2.8 23.6 27.2 Automotive (124.9) 1.6 (120.7) 2.0 Segment total (98.0) 26.2 (57.2) 82.6 Corporate and eliminations (10.7) (18.0) (26.2) (50.3) Operating (loss) income $ (108.7) $ 8.2 $ (83.4) $ 32.3 Modine Manufacturing Company Adjusted financial results (unaudited) (In millions, except per share amounts) Three months ended Nine months ended December 31, December 31, 2020 2019 2020 2019 Net (loss) earnings $(195.4) $1.0 $(194.9) $4.4 Interest expense 4.6 5.6 15.2 17.3 Provision for income taxes 81.6 1.7 95.3 8.3 Depreciation and amortization expense 16.3 19.5 54.2 57.8 Other expense (income) - net 0.5 (0.1) 1.0 2.3 Restructuring expenses (a) 0.9 2.6 7.0 6.7 Impairment charges (b) 134.4 - 134.4 - Gain on sale of assets (c) - (0.8) - (0.8) Automotive separation and strategy costs(d) 3.0 14.0 4.1 34.3 CEO transition costs (e) 0.4 - 5.9 - Environmental charges (f) 0.4 - 0.4 0.1 Adjusted EBITDA $46.7 $43.5 $122.6 $130.4 Net (loss) earnings per share attributable to Modine shareholders - diluted $(3.81) $0.02 $(3.82) $0.09 Restructuring expenses (a) 0.02 0.04 0.12 0.11 Impairment charges (b) 1.88 - 1.88 - Gain on sale of assets (c) - (0.01) - (0.01) Automotive separation and strategy costs(d) 0.04 0.21 0.06 0.51 CEO transition costs (e) 0.01 - 0.10 - Environmental charges (f) 0.01 - 0.01 - Tax valuation allowances (g) 2.26 0.06 2.40 0.06 Tax from legal entity restructuring(h) - 0.05 - 0.05 Adjusted earnings per share $0.41 $0.37 $0.75 $0.81 (a) Restructuring expenses primarily consist of employee severance expenses related to targeted headcount reductions and plant consolidation activities. The tax benefit related to restructuring expenses during the third quarter of fiscal 2021 and fiscal 2020 was $0.1 and $0.7 million, respectively. The tax benefit related to these expenses during both the first nine months of fiscal 2021 and 2020 was $1.0 million. (b) On November 2, 2020, the Company signed a definitive agreement to sell its liquid-cooled automotive business to Dana Incorporated. As a result, the Company recorded a non-cash impairment charge of $132.7 million within the Automotive segment, primarily related to property, plant and equipment of the liquid-cooled automotive business. In addition, the Company recorded a $1.7 million impairment charge related to other equipment within the Automotive segment. The tax benefit related to these impairment charges was $37.7 million. (c) During fiscal 2020, the Automotive segment sold a previously-closed manufacturing facility in Germany and, as a result, recorded a gain of $0.8 million. There was no tax impact associated with this transaction. (d) Automotive separation and strategy costs consist of costs directly

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February 04, 2021 16:30 ET (21:30 GMT)