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Press Release: Modine Reports Third Quarter -4-

· 02/04/2021 16:30
associated with the Company's review of strategic alternatives for the liquid-cooled automotive business, including costs to separate and prepare the underlying businesses for potential sale. With the exception of $0.5 million and $1.5 million of costs in the first nine months of fiscal 2021 and fiscal 2020, respectively, associated with program and equipment transfers recorded as costs of sales, these costs were recorded as SG&A expenses at Corporate and primarily related to accounting, legal, and IT professional services. The tax benefit related to these costs during the third quarter of fiscal 2021 and fiscal 2020 was $0.7 million and $3.3 million, respectively. The tax benefit related to these costs during the first nine months of fiscal 2021 and 2020 was $0.9 million and $8.3 million, respectively. (e) In August 2020, Thomas A. Burke stepped down from his position as President and Chief Executive Officer ("CEO"). The Board of Directors subsequently conducted a search for his successor and, effective December 1, 2020, appointed Neil D. Brinker as President and CEO. As a result of Mr. Burke's departure and in connection with the search for his successor, the Company recorded costs totaling $0.4 million and $5.9 million during the three and nine months ended December 31, 2020, respectively. These costs, which were recorded as SG&A expenses at Corporate, primarily consisted of severance and benefit-related expenses based upon the terms of Mr. Burke's separation agreement and costs directly associated with the CEO search, partially offset by the impact of Mr. Burke's forfeited stock-based compensation awards. The Company's tax benefit related to these costs was $0.1 million and $0.9 million during the three and nine months ended December 31, 2020, respectively. (f) Environmental charges, including related legal costs, are recorded as SG&A expenses and relate to a previously-owned U.S. manufacturing facility in the Heavy Duty Equipment segment. (g) During fiscal 2021, the Company increased its valuation allowance on deferred tax assets in the U.S. and abroad. As a result, the Company recorded income tax charges totaling $116.5 million and $123.1 million during the three and nine months ended December 31, 2020, respectively. During fiscal 2020, the Company adjusted its valuation allowances on deferred tax assets in the U.S. As a result, the Company recorded a $3.0 million income tax charge in the third quarter of fiscal 2020. (h) During fiscal 2020, the Company recorded a net income tax charge totaling $2.7 million as a result of legal entity restructuring completed in preparation of the potential sale of the liquid-cooled automotive business. Modine Manufacturing Company Segment adjusted financial results (unaudited) (In millions) Three months ended December 31, 2020 Three months ended December 31, 2019 Commercial Commercial and Building and Building Industrial HVAC Heavy Duty Industrial HVAC Heavy Duty Solutions Systems Equipment Automotive Solutions Systems Equipment Automotive Operating income (loss) $(1.7) $15.8 $12.8 $ (124.9) $8.3 $13.5 $2.8 $ 1.6 Depreciation and amortization expense 6.2 0.8 6.5 2.4 6.1 0.9 6.4 5.7 Restructuring expenses (a) 0.5 - - 0.4 0.7 - 1.4 0.2 Impairment charges (a) - - - 134.4 - - - - Gain on sale of assets (a) - - - - - - - (0.8) Environmental charges (a) - - 0.4 - - - - - Adjusted EBITDA $5.0 $16.6 $19.7 $ 12.3 $15.1 $14.4 $10.6 $ 6.7 Nine months ended December 31, 2020 Nine months ended December 31, 2019 Commercial Commercial and Building and Building Industrial HVAC Heavy Duty Industrial HVAC Heavy Duty Solutions Systems Equipment Automotive Solutions Systems Equipment Automotive Operating income (loss) $3.9 $36.0 $23.6 $ (120.7) $25.8 $27.6 $27.2 $ 2.0 Depreciation and amortization expense 18.8 2.3 19.0 12.7 17.8 2.5 19.2 16.6 Restructuring expenses (a) 4.4 - 1.9 0.6 1.3 - 2.2 2.9 Impairment charge (a) - - - 134.4 - - - - Gain on sale of assets (a) - - - - - - - (0.8) Environmental charges (a) - - 0.4 - - - 0.1 - Adjusted EBITDA $27.1 $38.3 $44.9 $ 27.0 $44.9 $30.1 $48.7 $ 20.7 (a) See the Adjusted EBITDA reconciliation on the previous page for information on restructuring expenses and other adjustments. Net debt (unaudited) (In millions) December March 31, 31, 2020 2020 Debt due within one year $22.6 $30.4 Long-term debt 342.0 452.0 Total debt 364.6 482.4 Less: cash and cash equivalents 72.9 70.9 Net debt $291.7 $411.5 Free cash flow (unaudited) (In millions) Three months ended Nine months ended December 31, December 31, 2020 2019 2020 2019 Net cash provided by operating activities $59.2 $28.4 $146.5 $ 45.9 Expenditures for property, plant and equipment (9.1) (16.8) (23.7) (58.2) Free cash flow $50.1 $11.6 $122.8 $ (12.3)

Kathleen Powers

(262) 636-1687

kathleen.t.powers@modine.com

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SOURCE Modine Manufacturing Company

/Web site: http://www.modine.com

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