SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1998
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition period from to
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Commission file number 1-1373
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MODINE MANUFACTURING COMPANY
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(Exact name of registrant as specified in its charter)
WISCONSIN 39-0482000
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1500 DeKoven Avenue, Racine, Wisconsin 53403
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (414) 636-1200
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Securities Registered pursuant to Section 12(g) of the Act:
Common Stock, $0.625 par value
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(Title of Class)
An Exhibit index appears at pages 20-27 herein.
Page 1 of
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Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past
90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
Approximately 54% of the outstanding shares are held by non-
affiliates. The aggregate market value of these shares was
approximately $533,273,634 based on the market price of $33.3125
per share on June 15, 1998. The remaining outstanding shares are
owned or controlled by or for directors, officers, employees,
retired employees, and their families.
The number of shares outstanding of the registrant's Common
Stock, $0.625 par value, was 29,644,841 at June 15, 1998.
DOCUMENTS INCORPORATED BY REFERENCE
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Portions of the following documents are incorporated by reference
into the parts of this Form 10-K designated to the right of the
document listed.
Incorporated Document Location in Form 10-K
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Annual Report to Shareholders for the
fiscal year ended March 31, 1998 Part I of Form 10-K
(Item 1)
Part II of Form 10-K
(Items 7, 8)
Part IV of Form 10-K
(Item 14)
1998 Definitive Proxy Statement dated
June 5, 1998 Part III of Form 10-K
(Items 10, 11, 12, 13)
TABLE OF CONTENTS
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MODINE MANUFACTURING COMPANY - FORM 10-K
FOR THE YEAR ENDED MARCH 31, 1998
10-K Pages
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Cover
Table of Contents
Part I
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Item 1 - Business
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General, Foreign and Domestic Operations,
Competitive Position, Customer Dependence,
Backlog of Orders, Raw Materials, Patents,
Research and Development, Environmental
Matters, Employees, Seasonal Nature of
Business, Working Capital Items 5
Item 2 - Properties 13
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Item 3 - Legal Proceedings 14
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Item 4 - Submission of Matters To A Vote of
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Security Holders
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Part II
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Item 5 - Market for Registrant's Common Equity
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and Related Stockholder Matters 16
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Item 6 - Selected Financial Data 17
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Item 7 - Management's Discussion and Analysis of
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Financial Condition and Results of
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Operations 17
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Item 8 - Financial Statements & Supplementary Data 17
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10-K Pages
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Item 9 - Changes in and Disagreements with
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Accountants on Accounting and Financial
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Disclosure 18
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Part III
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Items 10 and 11 - Directors and Executive
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Officers of the Registrant; Executive
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Compensation 18
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Item 12 - Security Ownership of Certain Beneficial
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Owners and Management 19
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Item 13 - Certain Relationships and Related
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Transactions 19
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Part IV
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Item 14 - Exhibits, Financial Statement Schedules,
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and Reports on Form 8-K 20
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1) Financial Statements
2) Financial Statement Schedules
3) Consent of Independent Accountants
4) Exhibit Index
Signatures 28
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PART I
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ITEM 1. BUSINESS.
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General
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Throughout this Report, the terms "Modine," the "Company" and/or
the "Registrant" refer to Modine Manufacturing Company and
consolidated subsidiaries.
Modine was incorporated under the laws of the State of Wisconsin
on June 23, 1916.
Modine Manufacturing Company is an independent, worldwide leader
in heat-transfer and heat-storage technology serving vehicular,
industrial, commercial, and building-HVAC (heating, ventilating,
air-conditioning) markets. Modine develops, manufactures, and
markets heat exchangers and systems for use in various OEM
(original equipment manufacturer) applications and for sale to
the automotive aftermarket (as replacement parts) and to a wide
array of building markets. The principal markets consist of
automobile, truck and bus manufacturers, farm implement
manufacturers, heating and cooling equipment manufacturers,
construction equipment manufacturers, construction contractors,
wholesalers of plumbing and heating equipment, radiator repair
shops, and wholesalers of auto repair parts. The Company
distributes its products through company salespersons, through
independent manufacturer's representatives, independent warehouse
distributors, and mass merchandisers. No industry segment
information is required under Statement of Financial Accounting
Standards Board, Number 14 "Financial Reporting for Segments of a
Business Enterprise," since the Company operates predominantly in
a single industry.
Within this industry, the Company manufactures various products
as is demonstrated by the following table :
Years ended March 31
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1998 1997 1996 1995 1994
Radiators & Radiator Cores 40% 39% 41% 42% 45%
Vehicular Air Conditioning 20% 22% 18% 14% 12%
Oil Coolers 17% 16% 16% 16% 15%
Charge Air Coolers 12% 11% 12% 12% 11%
Building HVAC 8% 8% 8% 9% 11%
Miscellaneous 3% 4% 5% 7% 6%
A world trend has been consolidation to fewer but larger
suppliers in the markets the Company serves. To serve its global
markets, Modine has established manufacturing operations in North
America, Europe, and Asia/Pacific. The Company's significant
international operations are located in the following countries:
North America
The Company maintains a Canadian subsidiary, Modine of Canada,
Ltd., an Ontario company, which manufactures cores for the
automotive aftermarket, and which owned 100% of The Radman
Corporation, Ltd., a Canadian federal company which licenses
certain trademarks to automotive radiator repair shops.
The Company operates a subsidiary, Modine Transferencia de Calor,
S.A. de C.V., a Mexican company which manufactures, assembles,
and exports to the U.S., heat exchangers for a variety of non-
vehicular applications.
The Company operates Manufacturera Mexicana de Partes de
Automoviles, S.A. ("Mexpar"), a Mexican producer of radiators and
other automotive components for original equipment manufacturers
and the automotive aftermarket. Mexpar's manufacturing
facilities are located in Mexico City.
Europe
The Company operates in Europe through subsidiaries organized
into three business groups and two support groups. The three
business groups are:
(1) An automotive business unit which the Company
operates primarily through its subsidiary, Modine
Holding GmbH located in Filderstadt-Bernhausen,
Germany. This unit includes (a) Langerer & Reich
Automobiltechnik GmbH located in Pliezhausen, Germany,
which manufactures aluminum heat exchangers for the
passenger car market; (b) Modine Uden B.V. located in
Uden, The Netherlands, which was reopened during 1996-
97 and converted to the production of transmission and
engine oil coolers and latent heat batteries; and (c)
Austria Warmetauscher GmbH located in Berndorf,
Austria, which manufactures aluminum air conditioning
condensers and oil coolers for a number of European
automakers.
Early in fiscal 1998, another facility for the
European automotive market, Modine Montage GmbH, began
assembly of automotive cooling modules in Wackersdorf,
Germany.
In April of 1998, Modine began construction of a
plant in Pontevico, Italy to produce heat-exchange
components for the automotive market.
(2) A heavy-duty business unit which the Company
operates through Modine Holding GmbH. This unit
includes (a) Langerer & Reich GmbH located in
Bernhausen, Germany, which manufactures heat exchangers
for the truck, bus and industrial markets, and also
includes research and development and administrative
facilities; (b) Modine GmbH located in Neuenkirchen,
Germany, which manufactures copper/brass sheet metal
radiators for the European industrial and agricultural
market; and (c) Hungaro Langerer Gep. Kft., located in
Mezokovesd, Hungary.
Modine established a new aluminum-product plant in
Kirchentellinsfurt, Germany in fiscal 1998.
In addition, Modine will begin construction of a
new plant in Tubingen, Germany in fiscal 1999 that will
provide for lower-cost, more efficient production of
copper-brass radiators to serve the off-highway market.
(3) An aftermarket business unit which the Company
operates under the aegis of the automotive business
unit, but operates primarily through its subsidiary,
NRF B.V. This unit includes (a) NRF B.V. located in
Mill, The Netherlands, which produces replacement
radiator cores, sheet metal radiators, and industrial
and marine heat exchangers; and (b) Radiadores Montana
S.A. located in Granada, Spain, which manufactures and
distributes radiators, radiator cores, oil coolers,
heaters, and air conditioning condensers and
evaporators for the automotive aftermarket and for
industrial applications.
NRF also owns subsidiaries that export products
and distribute products throughout Europe.
The two support groups are: (1) European central research
group, that is similar to Modine's Research and Development
Department in Racine, Wisconsin; and (2) a European central
administration unit, that includes the functions of I/S
(Information Services); purchasing; quality environment; and
accounting.
The Company operates, through Modine Climate Systems Inc., Modine
Climate Systems GmbH located in Goch, Germany. Modine Climate
Systems GmbH is a supplier of climate-control systems and
components to the automotive, truck, and off-highway vehicle
markets in Europe.
In the third quarter of fiscal 1996-97, Modine purchased 41.3
percent of Constructions Mecaniques Mota, S.A. (CMM), based near
Marseilles, France, with other facilities in Aubagne, France, and
Lenta, Italy. CMM is a manufacturer of tube-bundle oil coolers
and charge-air coolers for trucks and marine engine markets,
which complements Modine's other European businesses.
The European operations are organized similarly to the way the
Company is organized in the United States, which allows Modine to
be able to better serve its markets in Europe with manufacturing
in Europe.
The Company maintains sales subsidiaries and/or offices in
Austria, England, France, Italy, Germany, The Netherlands, and
Sweden.
The Company also maintains stocks of goods in bulk warehouses in
Birmingham, England; Rotterdam, The Netherlands; and Bremen,
Germany as reserve inventory for certain European customers.
Asia/Pacific
The Company participates (50% interest) in a joint venture with
Nippon Light Metal, Ltd., a Japanese company. The joint venture
company, Nikkei Heat Exchanger Company, Ltd., produces automotive
heat exchangers for sale to original equipment manufacturers in
the Japanese market.
The Company established a sales subsidiary in Japan, Modine Asia
K.K., in February, 1995.
In addition to normal business risks, operations outside of the
United States are subject to other risks including, but not
limited to, changing governmental laws and regulations, and
currency re-evaluations and market fluctuations.
Exports
In addition, the Company exports to foreign countries and
receives royalties from foreign licensees. Export sales as a
percentage of total sales were 12.6%, 11.8% and 12.9% for fiscal
years ended in 1998, 1997 and 1996, respectively. Estimated
after-tax earnings on export sales as a percentage of total net
earnings were 12.6%, 11.8% and 12.9% for fiscal years ended in
1998, 1997 and 1996, respectively. Royalties from foreign
licensees as a percentage of total earnings were 2.5%, 1.6% and
1.0% for the last three fiscal years, respectively.
Modine believes its international presence has positioned the
Company to profitably share in the anticipated long-term growth
of the global vehicular and industrial markets. Modine is
committed to increasing its involvement and investment in
international markets in the years ahead.
Foreign and Domestic Operations
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Financial information relating to the Company's foreign and
domestic operations, including export sales, is included in the
Company's 1997-1998 Annual Report to Shareholders and is
incorporated herein by reference at Note 19 on Page 32 therein.
Events subsequent to the End of the Quarter
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On June 5, 1998, the Company mailed its Annual Report to
Shareholders and released its sales forecast for the upcoming
year. See Current Reports on Form 8-K at page 27 herein for
further details.
The Company has signed a letter of intent to purchase 50 percent
of Radiadores Visconde Ltda., a Brazilian heat-transfer company.
Visconde's 1997 net sales were approximately $60 million, about
70 percent of which were for the aftermarket, both domestic and
export. The company has 750 employees and has ISO-9001
certification for aluminum radiators. Visconde makes heat-
exchanger components, assemblies, and modules that include
radiators, oil coolers, and charge-air coolers at facilities in
Sao Paulo, Brazil. It serves the passenger-car aftermarket and
the truck, bus, engine, agricultural-tractor, hydraulic-system,
compressor, marine, construction-equipment, power-generated, and
industrial markets. The joint venture agreement is subject to
approval of the owners of Visconde.
On June 18, 1998, Modine formed a joint venture company with
Daikin Industries, Ltd., one of the largest air-conditioning
manufacturers in the world. The joint venture, called Daikin-
Modine, Inc., will manufacture a new line of packaged, rooftop,
air-conditioning products using state-of-the-art technology,
including Modine's patented PF (parallel flow) heat exchangers.
Daikin, based in Osaka, Japan, is the strongest commercial air-
conditioning manufacturer in Japan, with market strengths in Asia
and Europe. Daikin has state-of-the-art air-conditioning and
refrigeration technology, producing its own compressors, other
components, and refrigerants. Modine's gas-heating products are
manufactured in Virginia and the joint venture company will begin
operations in a Modine facility in Rockbridge County, near
Lexington, VA. Modine has an established distribution network in
the U.S. building-HVAC (heating, ventilating, air-conditioning)
market. Each partner owns 50 percent of Daikin-Modine.
Following changes to the Rockbridge facility, the joint venture
company will begin production of commercial, rooftop, air
conditioners in 1999.
Competitive Position
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The Company competes with several manufacturers of heat transfer
products, some of which are divisions of larger companies and
some of which are independent companies. The Company also
competes for business with parts manufacturing divisions of some
of its major customers. The markets for the Company's products
are increasingly competitive and have changed significantly in
the past few years as the Company's traditional OEM customers in
the United States, faced with dramatically increased
international competition, have expanded their worldwide sourcing
of parts to better compete with lower-cost imports. These market
changes have caused the Company to experience competition from
suppliers in other parts of the world which enjoy economic
advantages such as lower labor costs, lower health care costs,
and other factors.
Customer Dependence
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Ten customers accounted for approximately 42.4% of the Company's
sales in the fiscal year ended March 31, 1998. These customers,
listed alphabetically, were: BMW, Caterpillar, Chrysler, Cummins
Engine, Fiat, Ford, John Deere, Navistar International, Paccar
and Volkswagen. Goods are supplied to these customers on the
basis of individual purchase orders received from them. When it
is in the customer's and the Company's best interests, the
Company utilizes long-term supply agreements to minimize
investment risks and provide a proven source of competitively
priced products. There are no other relationships between the
Company and its customers.
Backlog of Orders
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While the Company has a large backlog of orders, the backlog is
not deemed significant or material; backlog historically has had
little relation to shipments. Modine's products are produced
from readily available materials such as aluminum, copper, brass,
and steel and have a relatively short manufacturing cycle. The
Company's operating units maintain their own inventories and
production schedules. Current production capacity (including
additional capacity planned to become operational this year) is
capable of handling the sales volumes expected in fiscal 1998-99.
Raw Materials
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Aluminum, copper, brass, steel, and solder, all essential to the
business, are purchased regularly from several domestic and foreign
producers. In general, the Company does not rely on any one supplier
for these materials, which are for the most part available from
numerous sources in quantities required by the Company. The Company
normally does not experience material shortages within its operations
and believes that producers' supplies of these materials will be
adequate through the end of fiscal year 1999.
Patents
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The Company, and certain of its wholly-owned subsidiaries, own
outright or are licensed to produce products under a number of
patents and licenses. These patents and licenses, which have
been obtained over a period of years, will expire at various
times. Because the Company is involved with many product lines,
the Company believes that its business as a whole is not
materially dependent upon any particular patent or license, or
any particular group of patents or licenses. Modine considers
each of its patents, trademarks and licenses to be of value and
aggressively defends its rights throughout the world against
infringement. See also Item 3 - Legal Proceedings.
Research and Development
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Company-sponsored research activities relate to the development
of new products, processes, or services, or the improvement of
existing products, processes, and services. Expenditures in
fiscal 1998 amounted to $16,816,000; in fiscal 1997 amounted to
$16,804,000; and in fiscal 1996 amounted to approximately
$14,512,000. There were no significant expenditures on research
activities which were customer-sponsored. Over the course of the
last few years, the Company has become involved in a number of
industry or university sponsored research organizations. These
consortia conduct research and provide data on technical topics
deemed to be of interest to the Company for practical
applications in the markets the Company serves. The research and
data developed is generally shared among the member companies.
In addition, to achieve efficiencies and lower developmental
costs, Modine's research and engineering groups work closely with
Modine's customers on special projects and systems designs.
Environmental Matters
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Modine has a long standing corporate environmental policy which
demonstrates the Company's commitment to the environment and
compliance with all environmental laws and regulations worldwide.
Modine continues to appraise environmental issues and regulatory
compliance with a proactive approach. The benefits realized from
the Company's environmental programs include conserved resources,
more efficient manufacturing processes, minimized liability exposure
and reduced operational costs. Modine evaluates the performance of
the Company's environmental programs through continuous monitoring,
auditing and accounting systems. The Company constantly examines
its operations and processes to minimize their impact on the
environment. In calendar 1996, the Company revised its corporate
waste minimization program, which originated in 1991, to encompass
all by-products of the manufacturing process. In calendar 1997,
the first year under the revised program, an 11.8% reduction in
by-product generation was experienced.
Modine accrues for environmental remediation activities relating
to past operations - including those under the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA),
often referred to as "Superfund", and under the Resource Conservation
and Recovery Act (RCRA)---when it is probable that a liability has
been incurred and reasonable estimates can be made. In addition, an
obligation may arise when a facility is closed or sold. These
expenditures most often relate to facilities and sites where past
operations followed practices and procedures that were considered
acceptable under then-existing regulations, but will now require
investigative and/or remedial work to ensure sufficient protection
to the environment.
Six of the Company's manufacturing facilities currently have been
identified as requiring soil and/or groundwater remediation.
Because of the joint and several liability of former landowners,
contractual obligations, and certain state programs that provide
for partial reimbursement of certain remediation costs, it is
unlikely these remediation efforts will have a material effect on
the Company's consolidated financial condition.
Although there are no currently known liabilities that might have
a material effect on the Company's consolidated net assets, the
Environmental Protection Agency ("EPA") has designated Modine as
a potentially responsible party ("PRP") for remediation of nine
waste disposal sites. These sites are not company owned and
allegedly contain wastes attributable to Modine from past
operations. For the nine sites currently known, the company's
potential liability will be significantly less than the total
site remediation because the percentage of material attributable
to Modine is relatively low ("de minimis"), there may be
insufficient documentation linking Modine to the site, and the
other PRPs have the financial resources to meet their obligations.
Recent environmental legislation will require significant capital
equipment expenditures over the next four to five years. For the
fiscal year ending March 31, 1998 capital expenditures related to
environmental projects were $0.7 million. These environmental
expenditures include capital outlays to retrofit existing
facilities, as well as those associated with new facilities and
other compliance costs. Modine currently expects expenditures for
environmentally related capital projects to be about $2.8 million
in 1998-99. A major portion of these additional costs can be
attributed to wastewater treatment system upgrades at two Modine
manufacturing facilities. These upgrades are necessary to
accommodate for an increase in wastewater generation due to
expanded production and to insure compliance with wastewater
discharge permits.
Environmental expenses charged to current operations, including
remediation costs, totaled about $2.3 million for the fiscal year
ending March 31, 1998. These expenses include operation and
maintenance costs for solid waste treatment, storage, and disposal
and for costs incurred in conducting environmental compliance
activities; and for other matters. Operating expenses of some
facilities may increase during fiscal year 1998-99 because of
such charges but the competitive position of the company is not
expected to change materially.
Although environmental costs are substantial, the Company has no
reason to believe such costs vary significantly from similar
costs incurred by other companies engaged in similar businesses.
Employees
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The number of persons employed by the Company at March 31, 1998,
was approximately 8,400.
Seasonal Nature of Business
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In recent years the Company's business has become more continuous
and less seasonal. However, a degree of seasonality may still be
experienced since the aftermarket, heating and climate systems
domains are affected by weather patterns, constructions starts,
and other factors. Sales to original equipment manufacturers are
dependent upon the demand for new vehicles and equipment. The
following quarterly net sales detail illustrates the degree of
fluctuation for the past five years:
Fiscal Year Fiscal
Ended First Second Third Fourth Year
March 31 Quarter Quarter Quarter Quarter Total
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($ In Thousands)
1998 $256,923 $260,806 $267,699 $254,990 $1,040,418
1997 248,514 254,224 252,972 243,336 999,046
1996 239,216 254,292 252,817 244,168 990,493
1995 208,436 221,760 240,505 242,309 913,010
1994 147,171 156,964 172,351 193,067 669,553
Five-year $220,052 $229,609 $237,269 $235,574 $ 922,504
Average
Percent 24% 25% 26% 25% 100%
of Year
Working Capital Items
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The Company's products for the original equipment market are
manufactured on an as ordered basis. Therefore, large
inventories of such products are not necessary, nor is the amount
of products returned significant. In the HVAC and aftermarket
areas, due to the distribution systems and seasonal sales
programs, varying levels of finished goods inventory are
necessary. This inventory is spread throughout the distribution
systems. In these areas, in general, the industry and the
Company make use of extended terms of payment for customers on a
limited and/or seasonal basis.
Year 2000
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In response to the Year 2000 issue, the Company initiated a
project in early 1997 to identify, evaluate and implement changes
to its existing computerized business systems. The Company is
addressing the issue through a combination of modifications to
existing programs and conversions to Year 2000 compliant
software. The total cost associated with the required
modifications is not expected to be material to the Company's
consolidated results of operations and financial position, and is
being expensed as incurred. In addition, the Company is
communicating with its customers, suppliers, and other service
providers to determine whether they are actively involved in
projects to ensure that their products and business systems will
be Year 2000 compliant. If modifications and conversions by the
Company and those it conducts business with are not made in a
timely manner, the Year 2000 issue could have a material adverse
effect on the Company's business, financial condition, and
results of operations.
ITEM 2. PROPERTIES.
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The Company's general offices, along with laboratory,
experimental and tooling facilities, are maintained in Racine,
Wisconsin. Additional technical support functions are located in
Harrodsburg, Kentucky and Bernhausen, Germany. Almost all of the
Company's manufacturing and larger distribution centers are owned
outright. A few manufacturing facilities and numerous regional
sales and service centers, distribution centers and offices are
occupied under various lease arrangements.
In December 1996, Modine announced its plans to expand its
existing testing capabilities in Racine, Wisconsin. The Company
is constructing a new technical center, which will include a
climatic vehicular wind tunnel, a test vehicle preparation site,
and incorporation of the existing vehicular wind tunnel into the
new structure. This project is on schedule and is planned to be
opened in the fall of 1998.
On June 18, 1998 Modine announced that it will invest $53 million
over the next five fiscal years in Europe to build a world-class
technical center and new headquarters facilities for its Modine-
Europe operations. The technical center, to be built near Stuttgart,
Germany, will have all testing capabilities necessary and required
for product and process validation for the European operations. When
completed, it will include test laboratories for: structural tests
(thermal, pressure, vibration), component or system heat-transfer
tests (with several multi-fluid wind tunnels), corrosion tests (both
internal and external), and an engine-test cell that can evaluate
the thermal performance of engines, with and without transmissions.
It will also include prototype and sample shops, a tool room, R&D,
chemical and metallurgical laboratories, and manufacturing-machinery
design and production, making it a complete engineering center. The
technical center, without the wind tunnel, will be 131,600 sq. ft.
(12,200 sq. meters). Construction will begin in 1998 and is scheduled
to end by early 2000. Construction will start in mid-2000 on the
vehicular wind tunnel and will be completed 2002. The new head-
quarters building, comprising 93,000 sq. ft. (8,600 sq. meters), is
expected to be started in April 1999 and to be occupied by about
January 2001. It will consolidate all European divisional offices
and central administrative functions such as information services,
accounting, quality, purchasing, and human resources.
The Company's facilities, on a geographic basis, are as follows:
Type of North Asia/
Facility America Europe Pacific Total
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Manufacturing 21 13 -- 34
Distribution 3 1 -- 4
Sales & Service
Centers/Offices 16 19 1 36
Joint Ventures -- 3 1 4
Total 40 36 2 78
Total square footage of the 78 facilities is approximately
7,655,636 square feet.
The Company currently uses its facilities for the purposes as
noted above.
The Company's facilities, in general, are well maintained and
conform to the sales, distribution, or manufacturing operations
for which they are being used, and their productive capacity is,
from time to time, adjusted and expanded as necessitated by
product market considerations and customer growth.
ITEM 3. LEGAL PROCEEDINGS.
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In the normal course of business, the Company and its
subsidiaries are named as defendants in various lawsuits and
enforcement proceedings by private parties, the Occupational
Safety and Health Administration, the Environmental Protection
Agency, other governmental agencies, and others in which claims,
such as personal injury, property damage, or antitrust and trade
regulation issues, are asserted against the Company. While the
outcome of these proceedings is uncertain, in the opinion of the
Company's Management and counsel, any liabilities that may result
from such proceedings are not reasonably likely to have a
material effect on the Company's liquidity, financial condition
or results of operations. Many of the pending damage claims are
covered by insurance and, in addition, the Company from time to
time establishes reserves for uninsured liabilities.
The Mitsubishi and Showa Litigation
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In November 1991, the Company filed a lawsuit against Mitsubishi
Motor Sales of America, Inc. and Showa Aluminum Corporation,
alleging infringement of the Company's patent on parallel-flow
air-conditioning condensers. The suit seeks an injunction to
prohibit continued infringement, an accounting for damages, a
trebling of such damages for willful infringement, and
reimbursement of attorneys' fees. In December of 1991, the
Company submitted a complaint to the U.S. International Trade
Commission (ITC) requesting that the ITC ban the import and sale
of parallel-flow air-conditioning condensers and systems or
vehicles that contain them, which are the subject of the
aforementioned lawsuit. In August 1997, the ITC issued an Order
excluding from U.S. import Showa condensers that infringe Modine
Manufacturing Company's parallel-flow patent. The ITC's Order
covers condensers, their parts, and certain products including
them, such as air-conditioning kits and systems. It directs the
U.S. Customs Service to exclude from importation into the United
States such products manufactured by Showa Aluminum Corporation of
Japan and Showa Aluminum Corporation of America. The decision is
based on a Modine U.S. patent covering condensers with tube
hydraulic diameters less than 0.04822 inches. The Showa companies
must certify to Customs officials that any condenser items imported
by them do not infringe Modine's parallel-flow patent. The Showa
companies must also file annual reports with the ITC regarding
their sales of Showa parallel-flow condensers in the United States.
The ITC Order has been appealed by Showa to the U.S. Court of
Appeals for the Federal Circuit. In July of 1994, Showa filed a
lawsuit against the Company alleging infringement by the Company
of Showa patents pertaining to condensers. In June 1995, the
Company filed a motion for partial summary judgment against such
lawsuit. In December of 1994, the Company filed another lawsuit
against Mitsubishi and Showa pertaining to a newly issued patent
on parallel-flow air-conditioning condensers. Both 1994 suits
have been stayed pending the outcome of re-examination in the U.S.
Patent Office of the patents involved. In October of 1997, Modine
was issued a Japanese patent (in spite of opposition by many parties)
covering parallel-flow air-conditioning condensers having tube
hydraulic diameters less than 0.070 inches. A similar patent has
been issued to Modine by the European Patent Office and is currently
in the opposition stage. All legal and court costs associated
with these cases have been expensed as they were incurred.
Other previously reported legal proceedings have been settled or
the issues resolved so as to not merit further reporting.
Under the rules of the Securities and Exchange Commission, certain
environmental proceedings are not deemed to be ordinary or routine
proceedings incidental to the Company's business and are required
to be reported in the Company's annual and/or quarterly reports.
The Company is not currently a party to any such proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
- ------ ---------------------------------------------------
Omitted as not applicable.
PART II
-------
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
- ------ -------------------------------------------------
STOCKHOLDER MATTERS.
-------------------
The Company's Common Stock is quoted on the National Association
of Securities Dealers' Automated Quotation system ("NASDAQ") as a
National Market issue. The Company's trading symbol is "MODI." The
table below shows the range of high and low bid information for the
Company's Common Stock for fiscal years 1997-98 and 1996-97. As of
April 1, 1998, shareholders of record numbered approximately 6,236;
it is estimated that beneficial owners numbered about 13,000.
1997-98 1996-97
----------------------------- ----------------------------
Quarter High Low Dividends High Low Dividends
First $30.063 $24.750 $.19 $29.750 $24.500 $.17
Second 35.000 28.500 .19 28.000 25.000 .17
Third 36.000 33.125 .19 27.250 23.750 .17
Fourth 35.813 32.000 .19 29.750 24.500 .17
---- ----
TOTAL $.76 $.68
Certain of the Company's loan agreements limit the use of
retained earnings for the payment of cash dividends and the
acquisition of treasury stock. Under the most restrictive,
$165,700,000 was available for these purposes at March 31, 1998.
(However, these restricted payments may not exceed $30,000,000 in
any fiscal year.) Other loan agreements give certain existing
unsecured lenders security equal to any future secured borrowing.
In October 1986, the Company adopted a shareholder rights plan and
issued one right for each share of common stock. The rights are not
currently exercisable but will become exercisable 10 days after a
shareholder has acquired 20 percent or more, or commenced a tender
or exchange offer for 30 percent or more, of the Company's common
stock. Each right will initially entitle the holder to purchase a
unit of 1/100 Preferred Series A Participating Stock. During fiscal
1996-1997, the Company amended the Plan increasing the price from
$21.25 to $95.00 per unit. In the event of certain mergers, sales
of assets, or self-dealing transactions involving a 20 percent or
more shareholder, each right not owned by such 20 percent or more
shareholder will be modified so that it will then be exercisable
for common stock having a market value of twice the exercise price
of the right. The rights are redeemable in whole by the Company,
at a price of $0.0125 per right, at any time before 20 percent or
more of the Company's common stock has been acquired. On January 18,
1995, the Board of Directors of the Company authorized an amendment
to the Rights Agreement by extending the final expiration date of
the Rights from October 27, 1996 to October 27, 2006. Accordingly,
the Rights expire on October 27, 2006, unless previously redeemed.
ITEM 6. SELECTED FINANCIAL DATA.
- ------ -----------------------
Fiscal Year ended March 31
1998 1997 1996 1995 1994
Sales (in thousands) $1,040,418 $999,046 $990,493 $913,010 $669,553
Net earnings (in
thousands) 72,471 63,763 61,399 68,442 43,990 **
Total assets (in
thousands) 759,024 694,955 671,836 590,187 509,981
Long-term debt (in
thousands) 89,587 85,197 87,809 62,220 77,646
Dividends per share* .76 .68 .60 .52 .46
Net earnings per share*
- Basic 2.44 2.14 2.07 2.31 1.49 **
- Assuming dilution 2.39 2.10 2.03 2.25 1.45 **
* Adjusted for stock splits and stock dividends.
** Includes recognition of an accounting change from the adoption
of FAS 109, resulting in a one-time after-tax benefit of $0.9
million, or $.03 per share.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ------ -------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS.
-----------------------------------
Certain information required hereunder is incorporated by reference
from the Company's 1997-98 Annual Report to Shareholders, pages 6, 9,
10, 13-20 and 22, attached as Exhibit 13.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
- ------ -------------------------------------------
The report of Coopers & Lybrand L.L.P. dated April 29, 1998, the
Consolidated Statements of Earnings, and the related Consolidated
Balance Sheets, Cash Flows, Shareholders' Investment, and Notes to
Consolidated Financial Statements, appearing on pages 19, 21, 23, 24,
and 25-33 of the Company's 1997-98 Annual Report to Shareholders are
incorporated herein by reference. With the exception of the
aforementioned information, no other data appearing in the 1997-98
Annual Report to Shareholders is deemed to be filed as part of this
Annual Report on Form 10-K. Individual financial statements of the
Registrant are omitted because the Registrant is primarily an
operating company, and the subsidiaries included in the
consolidated financial statements are wholly-owned.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
- ------ ------------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE.
-----------------------------------
There were no disagreements on accounting or financial
disclosures between the Company and its auditors.
PART III
--------
ITEMS 10 and 11. DIRECTORS AND EXECUTIVE OFFICERS OF THE
- --------------- ---------------------------------------
REGISTRANT; EXECUTIVE COMPENSATION.
----------------------------------
The information about directors and executive officers and
executive compensation on pages 2 - 4 and pages 8, 9, 12, and 13,
of the Company's definitive Proxy Statement dated June 5, 1998
under the headings "Election of Directors", "Nominees to be
Elected," "Directors Continuing in Service," and "Executive
Compensation" attached to this report is incorporated herein by
reference, but excluding the Officer Nomination and Compensation
Committee Report on Executive Compensation and the Performance
Graph on pages 9 - 11.
Executive Officers of Registrant
Officer
Name Age Position Since
- ---- --- -------- -------
R. T. Savage* 59 Chairman 1981
D. R. Johnson* 56 President and Chief Executive
Officer 1988
D. B. Rayburn* 50 Executive Vice President, Original
Equipment 1991
W. E. Pavlick 64 Senior Vice President, General
Counsel and Secretary 1979
M. G. Baker 58 Group Vice President, Distributed 1987
Products
V. S. 62 Group Vice President, Off-Highway
Frangopoulos Products 1981
L. D. Howard 54 Group Vice President, Europe 1991
A. C. DeVuono 49 Vice President, Technical Services 1996
R. L. Hetrick 56 Vice President, Human Resources 1989
R. W. Possehl 53 Vice President, Administration 1985
A. D. Reid 56 Vice President, Finance and Chief
Financial Officer 1985
R. S. Bullmore 48 Corporate Controller 1983
G. A. Fahl 43 Environmental Compliance Officer 1998
D. R. Zakos 44 Associate General Counsel and
Assistant Secretary 1985
* Prior to March 31 and April 1, 1998: R. T. Savage was
Chairman, President and Chief Executive Officer (now retired);
D. R. Johnson was President and Chief Operating Officer; and
D. B. Rayburn was Group Vice President, Highway Products.
There are no family relationships among the executive officers
and directors. All of the above officers have been employed by
Modine in various capacities during the last five years, except
A. C. DeVuono. Mr. DeVuono joined Modine on March 4, 1996, as
Director, Technical Services. He was promoted to Vice President
Technical Services in October, 1996. Before joining Modine, he was
a staff scientist at the Lawrence Berkeley National Laboratory of
the University of California. Prior to that, he spent 10 years
with Battelle Memorial Institute in Columbus, Ohio, as a principal
research scientist, and also has previous affiliations with the
teaching faculties of Ohio State University and the University of
Illinois. There are no arrangements or understandings between any of
the above officers and any other person pursuant to which he was
elected an officer of Modine. Officers are elected annually at the
first meeting of the Board of Directors after the Annual Meeting of
Shareholders. Mr. Johnson has an employment agreement with the
Company.
As of February 26, 1997, the Company entered into change-in-
control agreements (the "Change-in-Control Agreements") with
the executive officers and with other key employees (except
with Mr. Johnson). The Change-in-Control Agreements provide
a severance payment to the executive if the Company terminates
the executive's employment or the executive voluntarily
terminates the executive's employment within ninety days after
a "Pre-Condition" has occurred (as that term is defined in the
Change-in-Control Agreements). Each executive officer (except
Mr. Johnson) is eligible to receive twenty-four months' annual
base compensation and a bonus amount as defined in the Change-in-
Control Agreements, plus applicable benefits and credited service
for pension purposes for the twenty-four month period.
The Company's stock option and stock award plans contain certain
provisions relating to change-in-control or other specified
transactions that may, if authorized by the Officer Nomination
and Compensation Committee of the board, accelerate or otherwise
release shares granted or awarded under those plans.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
- ------- ---------------------------------------------------
MANAGEMENT.
----------
The information relating to stock ownership on pages 4 - 6 of the
Company's definitive Proxy Statement dated June 5, 1998 under the
headings "Principal Shareholders and Share Ownership of Directors
and Executive Officers, "Principal Shareholders," and "Securities
Owned by Management" attached to this report is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
- ------- ----------------------------------------------
The information required by this item is incorporated by
reference from the Company's definitive Proxy Statement dated
June 5, 1998 on page 15 under the heading "Transactions" attached
to this Report.
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
- ------- ----------------------------------------------------
ON FORM 8-K.
-----------
(a) The following documents are filed as part of this Report:
Page in
Annual Report*
-------------
(1) Financial Statements:
Consolidated Statements of Earnings for the
years ended March 31, 1998, 1997, and 1996 19
Consolidated Balance Sheets at March 31, 1998
and 1997 21
Consolidated Statements of Cash Flows for the
years ended March 31, 1998, 1997, and 1996 23
Consolidated Statements of Shareholders' Investment
for the years ended March 31, 1998, 1997, and 1996 24
Notes to Consolidated Financial Statements 25 - 33
Independent Auditors' Report 33
* Incorporated by reference from the indicated pages
of the 1997-98 Annual Report to Shareholders
Page in
Form 10-K
---------
(2) Financial Statement Schedules:
Report of Independent Accountants on Financial
Statement Schedules for the three years ended
March 31, 1998 30
Schedule II - Valuation and Qualifying Accounts for
the years ended March 31, 1998, 1997 and 1996 122
(3) Consent of Independent Accountants 103
(4) Exhibit Index 20
(b) All other schedules have been omitted as they are not applicable,
not required, or because the required information is included in the
financial statements.
The following exhibits are attached for information only unless
specifically incorporated by reference in this Report:
Reference Number
per Item 601 of
Regulation S-K Page
- ---------------- ----
2 Not applicable.
3(a) Restated Articles of Incorporation (as
amended) (filed by reference to the
Registrant's Annual Report on Form 10-K
for the fiscal year ended March 31, 1994).
*3(b) Restated By-Laws (as amended). 31
*4(a) Specimen Uniform Denomination Stock
Certificate of the Registrant. 43
4(b) Rights Agreement dated as of October 16,
1986 between the Registrant and First
Chicago Trust Company of New York (Rights
Agent) (filed by reference to the
Registrant's Annual Report on Form 10-K
for the fiscal year ended March 31, 1997).
4(b)(i) Rights Agreement Amendment No. 1 dated as
of January 18, 1995 between the Registrant
and First Chicago Trust Company of New York
(Rights Agent) (filed by reference to the
exhibit contained within the Registrant's
Current Report on Form 8-K dated January 13,
1995).
4(b)(ii) Rights Agreement Amendment No. 2 dated as
of January 18, 1995 between the Registrant
and First Chicago Trust Company of New York
(Rights Agent) (filed by reference to the
exhibit contained within the Registrant's
Current Report on Form 8-K dated January 13,
1995).
4(b)(iii) Rights Agreement Amendment No. 3 dated as of
October 15, 1996, between the Registrant and
First Chicago Trust Company of New York (Rights
Agent) (filed by reference to the exhibit
contained within the Registrant's Quarterly
Report on Form 10-Q dated December 26, 1996).
4(b)(iv) Rights Agreement Amendment No. 4 dated as of
November 10, 1997 between the Registrant and
Norwest Bank Minnesota, N.A. (Rights Agent)
filed by reference to the exhibit contained
within the Registrant's Quarterly Report on
Form 10-Q dated December 26, 1997.
Note: The amount of long-term debt authorized
----
under any instrument defining the rights of
holders of long-term debt of the Registrant,
other than as noted above, does not exceed ten
Reference Number
per Item 601 of
Regulation S-K Page
- ---------------- ----
percent of the total assets of the Registrant
and its subsidiaries on a consolidated basis.
Therefore, no such instruments are required to
be filed as exhibits to this Form 10-K. The
Registrant agrees to furnish copies of such
instruments to the Commission upon request.
9 Not applicable.
10(a) Director Emeritus Retirement Plan (effective
April 1,1992) (filed by reference to the
Registrant's Annual Report on Form 10-K
for the fiscal year ended March 31, 1997).
*10(b) Retirement Agreement between the Registrant
and R. T. Savage. 48
10(c) Employment Agreement between the Registrant
and D. R. Johnson (filed by reference to the
Registrant's Quarterly Report on Form 10-Q
dated November 1, 1996).
10(d) 1985 Incentive Stock Plan (as amended)
(filed by reference to the Registrant's
Annual Report on Form 10-K for the fiscal
year ended March 31, 1997).
10(e) 1985 Stock Option Plan for Non-Employee
Directors (as amended) (filed by reference
to the Registrant's Annual Report on Form
10-K for the fiscal year ended March 31, 1994).
10(f) Pension and Disability Plan For Salaried
Employees of Modine Manufacturing Company
(as amended) (filed by reference to the
Registrant's Annual Report on Form 10-K
for the fiscal year ended March 31, 1994).
10(g) Executive Supplemental Retirement Plan (as
amended) (filed by reference to the
Registrant's Annual Report on Form 10-K
for the fiscal year ended March 31, 1995).
10(h) Modine Manufacturing Company Executive
Supplemental Stock Plan (as amended) (filed
by reference to the Registrant's Annual
Report on Form 10-K for the fiscal year
ended March 31, 1994).
10(i) Director Emeritus Agreement between the
Registrant and Bernard H. Regenburg (filed
by reference to the Registrant's Annual
Report on Form 10-K for the fiscal year
ended March 31, 1997).
Reference Number
per Item 601 of
Regulation S-K Page
- ---------------- ----
*10(j) 1993 Stock Award Plan [a part of the 1985
Incentive Stock Plan]. 53
10(k) 1994 Stock Award Plan [a part of the 1985
Incentive Stock Plan].
Note: The 1994 Plan is not materially
----
different from the 1993 Stock Award Plan
filed herewith.
10(l) 1994 Incentive Compensation Plan (as
amended) (filed by reference to the
Registrant's Annual Report on Form 10-K
for the fiscal year ended March 31, 1997).
10(m) 1994 Stock Option Plan for Non-Employee
Directors (as amended) (filed by reference
to the Registrant's Annual Report on Form
10-K for the fiscal year ended March 31,
1997).
10(n) 1995 Stock Award Plan [a part of the 1994
Incentive Compensation Plan] (filed by
reference to the exhibit contained within
the Registrant's Annual Report on Form 10-K
for the fiscal year 1995).
10(o) 1995 Stock Option Agreements (incentive and
non-qualified) [a part of the 1994 Incentive
Compensation Plan] (filed by reference to the
exhibit contained within the Registrant's
Annual Report on Form 10-K for the fiscal year
1995).
10(p) 1995 Stock Option Agreement [a part of the
1994 Stock Option Plan for Non-Employee
Directors] (filed by reference to the exhibit
contained within the Registrant's Annual
Report on Form 10-K for the fiscal year 1995).
10(q) 1996 Stock Award Plan [a part of the 1994
Incentive Compensation Plan] (filed by
reference to the exhibit contained within
the Registrant's Annual Report on Form 10-K
for the fiscal year 1996).
10(r) 1996 Stock Option Agreements (incentive and
non-qualified) [a part of the 1994 Incentive
Compensation Plan] (filed by reference to the
exhibit contained within the Registrant's
Annual Report on Form 10-K for the fiscal
year 1996).
Reference Number
per Item 601 of
Regulation S-K Page
- ---------------- ----
10(s) 1996 Stock Option Agreement [a part of
the 1994 Stock Option Plan for Non-Employee
Directors].
Note: The 1996 Stock Option Agreement
----
is not materially different from the 1995
Non-Employee Directors Stock Option
Agreement filed with the Registrant's
Annual Report on Form 10-K for the fiscal
year 1995.
10(t) 1997 Stock Award Plan [a part of the 1994
Incentive Compensation Plan].
Note: The 1997 Stock Award Plan is not
----
materially different from the 1996 Stock
Award Plan filed with the Registrant's
Annual Report on Form 10-K for the fiscal
year 1996.
10(u) 1997 Stock Option Agreements (incentive
and non-qualified) [a part of the 1994
Incentive Compensation Plan].
Note: The 1997 Stock Option Agreements are
----
not materially different from the 1996 Stock
Option Agreements filed with the Registrant's
Annual Report on Form 10-K for the fiscal
year 1996.
10(v) 1997 Stock Option Agreement [a part of the
1994 Stock Option Plan for Non-Employee
Directors].
Note: The 1997 Stock Option Agreement is not
----
materially different from the 1995 Non-Employee
Directors Stock Option Agreement filed with
the Registrant's Annual Report or Form 10-K
for the fiscal year 1995.
10(w) 1998 Stock Award Plan [a part of the 1994
Incentive Compensation Plan].
Note: The 1998 Stock Award Plan is not
----
materially different from the 1996 Stock
Award Plan filed with the Registrant's
Annual Report on Form 10-K for fiscal
year 1996.
Reference Number
per Item 601 of
Regulation S-K Page
- ---------------- ----
10(x) 1998 Stock Option Agreements (incentive
and non-qualified) [a part of the 1994
Incentive Compensation Plan].
Note: The 1998 Stock Option Agreements
----
are not materially different from the
1996 Stock Option Agreements filed with
the Registrant's Annual Report on Form
10-K for the fiscal year 1996.
10(y) 1998 Stock Option Agreement [a part of
the 1994 Stock Option Plan for Non-
Employee Directors].
Note: The 1998 Stock Option Agreement is
----
not materially different from the 1995 Non-
Employee Directors Stock Option Agreement
filed with the Registrant's Annual Report
on Form 10-K for the fiscal year 1995.
11 Not applicable.
12 Not applicable.
*13 1997-98 Annual Report to Shareholders.
Except for the portions of the Report
expressly incorporated by reference,
the Report is furnished solely for the
information of the Commission and is
not deemed "filed" as a part hereof. 59
16 Not applicable.
18 Not applicable.
*21 List of subsidiaries of the Registrant. 101
22 Not applicable.
*23 Consent of independent accountants. 103
24 Not applicable.
*27 Financial Data Schedules -- Fiscal 1998,
1997, 1996; 1st Qtr. - Fiscal 1997;
2nd Qtr. - Fiscal 1997; 3rd Qtr. - Fiscal
1997; 1st Qtr. - Fiscal 1998; 2nd Qtr. -
Fiscal 1998; and 3rd Qtr. - 1998
(electronic transmission only).
28 Not applicable.
Reference Number
per Item 601 of
Regulation S-K Page
- ---------------- ----
*99 Definitive Proxy Statement of the Registrant
dated June 5, 1998. Except for the portions
of the Proxy Statement expressly incorporated
by reference, the Proxy Statement is furnished
solely for the information of the Commission
and is not deemed "filed" as a part hereof. 104
None Appendix (filed pursuant to Item 304 of
Regulation S-T). 123
Note: All Exhibits filed herewith are current
----
to the end of the reporting period of the
Form 10-K (unless otherwise noted).
* Filed herewith.
Current Reports on Form 8-K:
- ---------------------------
A Current Report on Form 8-K, dated June 5, 1998, was filed by
the Company. This report, filed in connection with the Company's
mailing of its Annual Report to Shareholders and its sales
forecast for the upcoming year contained therein, includes as
exhibits (1) the news release containing the sales forecast and
(2) a statement of the important factors and assumptions
regarding forward-looking statements.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Modine Manufacturing Company
Date: June 17, 1998 By: D. R. JOHNSON
----------------------------------
D. R. Johnson, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities indicated.
R. T. SAVAGE June 17, 1998
- ------------------------------------ -------------
R. T. Savage, Chairman and Director Date
D. R. JOHNSON June 17, 1998
- ------------------------------------ -------------
D. R. Johnson, President and Date
Chief Executive Officer and Director
A. D. REID June 17, 1998
- ------------------------------------ -------------
A. D. Reid, Vice President, Finance Date
and Chief Financial Officer
W. E. PAVLICK June 17, 1998
- ------------------------------------ -------------
W. E. Pavlick, Senior Vice President, Date
General Counsel and Secretary
R. J. DOYLE June 17, 1998
- ------------------------------------ -------------
R. J. Doyle, Director Date
T. J. GUENDEL June 17, 1998
- ------------------------------------ -------------
T. J. Guendel, Director Date
F. W. JONES June 17, 1998
- ------------------------------------ -------------
F. W. Jones, Director Date
D. J. KUESTER June 17, 1998
- ------------------------------------ -------------
D. J. Kuester, Director Date
V. L. MARTIN June 17, 1998
- ------------------------------------ -------------
V. L. Martin, Director Date
G. L. NEALE June 17, 1998
- ------------------------------------ -------------
G. L. Neale, Director Date
S. W. TISDALE June 17, 1998
- ------------------------------------ -------------
S. W. Tisdale, Director Date
M. T. YONKER June 17, 1998
- ------------------------------------ -------------
M. T. Yonker, Director Date
Coopers
& Lybrand L.L.P.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
Modine Manufacturing Company
Our report on the consolidated financial statements of Modine
Manufacturing Company and Subsidiaries has been incorporated by
reference in this Form 10-K from the 1998 annual report to
shareholders of Modine Manufacturing Company and Subsidiaries on
page 33 therein. In connection with our audits of such financial
statements, we have also audited the related financial statement
schedule listed in the index on page 20 of this Form 10-K.
In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial
statements taken as a whole, present fairly, in all material
respects, the information required to be included therein.
COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
April 29, 1998