MOD - Earnings call 2 2024 | Modine Manufacturing Company

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Operator

Good morning ladies and gentlemen and welcome to Modine's Second Quarter Fiscal 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.I would now like to turn the conference over to your host, Ms. Kathy Powers, Vice President, Treasurer and Investor Relations. Please go ahead.

Kathy Powers

Good morning and thank you for joining our conference call to discuss Modine's second quarter fiscal 2024 results. using call and Brinker, Vice Mick Chief Officer.We'll this Chief President can President our by the be statements. notice on Investor presentation, section Financial Officer; today's regarding Executive PDF Lucareli, be or joined by our modine.com.On Neil and website, the accessing of on and forward-looking which accessed I'm with slides our our the posted Slide link through Relations either webcast file X is Executive statements forward-looking well contain will outlined company's in with as call This and release earnings as as filings our our in Exchange the Securities Commission. With the call it's over pleasure that, to my to turn Neil.

Neil Brinker

in everyone. quarter increased Sales of from you, Technologies and revenue Climate our the earnings solid X% Thank by driven Performance prior and the to segment. came report and both I'm with good increases ahead both Solutions another in strong morning, expectations. growth Kathy, year, that pleased improvements

reported from from an year. adjusted point million, improvement EBITDA the $XX.X year. In XX.X%, XXX-basis was prior addition, margin the we a of XX% prior of increase EBITDA

to As goal we to of to the of fiscal by end last improve our a year of set fiscal XX% the a margins, XX% XX% reaching and range a XX% year, the range EBITDA by reminder, 'XX. targeting end significantly

what revenue ahead an improvement been focusing stages of we the delivered very and to to drive decision-making the sustainable businesses, that financial organization, throughout growth value Climate of as to a continue profile.Please growth. clearly our time. by and in segment prior medium the a X. resources using with to guide able turn to that organization to targeted X% early believe customers profitable I'm combination the targets, short for year. higher-margin remain from our that our of are of We driven I leveraging we including the allocating these principles continue excellent Solutions of margin will has key improve opportunities proud and XX/XX quarter see we to factors, to Slide on transformation to bring long-term period in of The accomplish additional

our We an is increase XX.X%, data double some diversification margin the in $XX up than from the prior basis business The planned offset businesses, weaknesses more year. were from in resulted vertical adjusted points other XX% the in the EBITDA of center This data benefiting a year. of million, segment as strong helping the XXX HVAC prior of year. EBITDA in growth center prior adjusted are from the Revenues $XX.X million, reported markets. our

due That product Our center projects. order business the be shipments intake continues of to quite can on lumpy large to this grow. data said, timing

we're at rate. expecting So a not to linear growth continue

volume the data third QX. have center in a quarter year, We pick dip the then the projected of expect and again volumes in to beginning since up

in sales We to commercial work win relationships our fluctuation months, add we next to which pipeline through provide XX to quarter-to-quarter evaluate stability backlog funnel team have some the prospects. in the orders high-quality with in opportunities should the business revenues.Our to as new and despite significant continues and develop over the key XX

grow and on will high-volume part globally. heat them of relationships data not market. loads a products engineering our expertise is we're in services the Instead, that key customers that products ongoing to as solutions system the value and the technology model.We in to address space goal required great the with includes center Our existing be have future. service higher and advance and This be supporting the new to focusing customers, with they the

and The our removal unit and external strengthen developing hybrid, systems integral critical to CDU the data will heat heat rejection. center further offering, The capacity center is liquid cooling contaminant-free cooling, and integrating offers internally For air-cooled exchangers, systems. CDU a and heat environments. offer controlled we direct-to-chip, able for cooling devices, cooling to CDU. providing high-density liquid, CDU are global server or distribution the as example, between A immersion coolant data we'll for be

CDU the voice cooling into is be Our first of and This early planned the with customer is to dedicated being developed development commercialized our year. next liquid full marks systems.

with we we the other their our while systems, elevating are on we of product usage.Moving line businesses, continue to so data meet also our expansion our center and working around roadmaps, provide sustainability their can new heating In them with X performance, announced recently product advanced water helping HVAC&R customers and technologies efficient, our to launches. targets power addition, connected electrical

product infrared a electric low-emissions heating in applications. of new be wide that commercial line provides and used a can residential variety Our

our addition, This XXXX just information electric been use as plans on come.Regarding latest that the more are in date this response driving is the of in forecast version measured renewable a for. order Modine the still announced market date line heaters. pump our but reduction examples year of to customers. known This growth to and workshop specifically providing to an pump been of and This gas term is by Recently, new important in we phases our the residential so this believe flexibility is pumps, performance quality of in the more increase heat based our from Modine lower In enforcement We strong investment efforts expectations on planning is to expand our electric changes growth our where was our fueled phase that the expect line the These earlier of of the Hot to with these plant a respond regulations from a alternative delayed, take Dawg these production to of on adoption capacity product are expansion. to like electric market capacity market, intake conversion ramp.We heat same the our plant that energy. have planned development the AmpDawg and garage approach XXXX. in and natural German popular nearing from from of few has and in for We're we customers. an allows our Growth pushed there at Serbia heat provides bring are near for has overall to with we adjust still us resulted completion first to to regulatory our production necessary could the us the needed. investment. the Serbian while had the regulations

incredible very we've proud is that with will to been We accomplish. this of and drivers regulatory are Climate having volatility.And this year, able to I'm what an continue along our market creating Solutions monitor business

would of adjusted long-term EBITDA commercial highlight last XXX as some important in to and quarter, increased our recovery.The the points. from are now of I PT a business quarter to X. couple margin sure We an turn improving of was improvement investing year, continue profitable made in the prior up $XX we commercial XX/XX terms resulting Technologies Adjusted million, make XX.X%, an of with specialty in work. much XX% example contracts, like driven announcements this technologies a vehicle Performance new increase revenue vehicle The segment have Slide quarter, including that delivered in X% to to by and to additional future.Please to basis retroactive of off-highway prime excellent due the also this Similar products to can EBITDA results our growth customers.

report products we this I'm European First, transaction divestiture market. the combustion produce gasoline automotive businesses engines that X Germany the in to diesel pleased announced of that on for and XXst. closed October internal for

and and businesses, non-strategic meeting been quickly firm business or are very already to wind businesses, actions to is these are underway. have resources been margin We clear strategic, our exit down exit towards that that will and pivot high-growth goal.We have actions intention of towards targets. these with our Many not our continue will divestitures identified

is a element growth. of exiting critical lower-margin the on businesses XX/XX as As focused remain over revenue earnings we reminder, growth a

understanding in We the PT strategy initially our it part revenue. could transformation in have anticipated this that as segment, of lower result

will This the and process. have we the product aligned all GenSet plans businesses long-term of we that is with However, our in XX/XX exiting EV profiles for our with businesses growth goals. systems part replace also are

Beginning we our making the contractual production European Overall, in plans our process adding our of next year, Thermal Systems our had Tennessee, expand of cooling programs. favorable, in existing have our accommodate and and increased optimizing Performance certain success our is track, management battery Italy. for addition the done like Systems our Mick, journey manufacturing realign Lawrenceburg, segment our additional in to continue This firmly on examine to lines by for Europe. we being it's lines.Now more electronic and cost the Technologies In appropriate is size volumes this are proud and we to produce I'm systems Pontevico, the our provide on where on make improvements. financial we'll in that in segment, our progress plant customers as review quarter structure non-strategic exit thermal month, of the for both business. business. great We're the businesses, to product There to opportunities EV focusing segment XX/XX who to of growth over could the I'd we're addition, where call we and we costs turn on is the need capitalizing results the work costs we team.Material footprint.One to be capacity the sure be EVantage launch announced as organization we at packages businesses additional some Management to investing Last product will as of updates. significant to negotiating

Michael Lucareli

including Revenue good another million adjusted results. and with growth Slide morning to had impact. Climate Neil, to X%, driven everyone. data EBITDA. the by center XX% The Thanks, FX quarter $X was in a grew increase Solutions increasing or review million. $XX turn Please XXX% favorable segment excellent a X

of not quarter in our demand $X soft in strong somewhat of our heating those products in current in were to see America QX. can and customers.As than these for to QX from once hyperscale exceed exceeded the to outlook timing XX%.HVAC&R co-location continue expected mentioned, again we or Neil but supporting schedules, timing Based timing while growth to shipments expectations. including can sales has remains shipments be hard We I anticipate sequentially Europe, customer highlight unpredictable, improved be both market significantly and the with changed, on our the QX. X% and sales North the want between ramping The our million. has lower down predict full-year quarters, that

of We as the of expect further $XX the factor of million. the the strength weather ultimately we enter transfer the to products year. decreased Sales see our but season, balance into rebound heat will for or sales XX%, heating

are customers we've demand a many in created excess quarters, commercial with residential the was continuing experienced along work previous in down decline to supply customers.We that refrigeration, discussed HVAC&R during chain market As inventory commercial with previous and believe shortage.

a a second investments this Additionally, ongoing as we've we strong clearly made drive strong a half XX/XX the was initiatives.Climate growth year. conversion outlook earnings still the pleased HVAC&R the and increased cautious to with higher by products, transfer point half center basis along to a The of had improvements year. margin product for favorable to The from adjusted maintaining data by were benefits the margin volume EBITDA grow regards to activities further improvement sales margin the driven first driven market business.With and very of heat we're in and with XX% rationalization XXX XX.X%. continued improvements.We're sales Solutions with earnings XX/XX

and we remaining QX, then but Climate the Given markets, up the anticipate sequentially key market we're our QX, cautious strong earnings with year few a in lower fully center a out assumptions on Solutions, the on wrap expect further close data shipments in an lighter year-over-year would great QX.To heating with improvements quarters also growth, wrap next margin Performance FX from in sales the up to $X initiatives businesses. XX/XX X. favorable a to on as Revenue had X% great benefited impact. we continue including to million another focus turn Slide higher X Technologies year.Please quarter in

price by underlying selling per was the or $X X%, volume million higher. average While declined unit sales

with and growth As efforts a focused a earnings up sales more growth we at driving are than XX/XX Therefore, Performance Technologies rate revenue earnings Solutions million on expect continued initiatives. growth. demand sales were increased higher not volume.Advanced see to $XX overall or application Liquid reminder in component and benefits along rapid growth XX% rapid to higher of due sales customers customers. million sales EV vehicle commercial vehicle specialty along our coatings sales with our XX/XX and X% from with from cooled Systems $X to or

resulting EBITDA earnings benefited higher initiatives.Performance air-cooled with to sales of of Technologies' X% quarter, repeat along not several Similar $X Lastly million million conversion in increased and due XX/XX XXX from off-highway may genset basis retroactive payments future in application or XX.X% with quarters. XX%, primarily gains an margin sales from and temporarily excellent, to adjusted was customers, previous that dollars point a improvement. earnings the to

pleased As on Neil X Germany the October divestiture mentioned, to businesses XXst. that of in was we're report completed

approximately year. previously will of As the businesses these from to the revenue result second in $XX disclosed, a and annual million this fiscal is $XX revenue half million reduction impact

Based the represent Performance align not to on to experience excellent basis, margin action progress turn the QX, Slide in let's for take the a further launched our divestitures margin we another material results. UAW we're plans factors cost that report a OE dip these in in review reviewing company customers plans these a expect all any improvements, savings QX this major to year-over-year these and holiday from to again within begin lower further will full-year be our that may range.Now with Please year, on the ongoing of total step strike, in While We structure some year we impact QX.We and QX. be and And non-strategic did anticipate expect and lower earnings XX/XX shutdowns balance sequential in up our Technologies extended X. revenue. the anticipate of year. but of targeted will with business,

million First were a including quarter $XX X% FX million, sales impact. up or $XX favorable

in XX.X% XX/XX driven the volume, The This improved by higher seventh selling This million, driven also happy driven of increased product increase higher previously prices, improvements our primarily compensation EBITDA discussed, improvement. and report an to costs. EBITDA million. a of increases that year-over-year margin other adjusted basis SG&A tied comp an margin adjusted both equates $XX business higher by average margin year. by initiatives. As or points, very including $XX XXX-basis represents numerous was higher XX% growth quarter segments. to to incentive quarter in gross and XXX from employee the I'm revenue point and of primarily was the the with strong development improvement in prior consecutive expenses,

balance that adjusted higher and expected. the In with were that year.Before few moving was per the better to and sheet, share prior reiterate areas performance than the like pleased there quarter, addition, $X.XX than the XX% we're in a I'd earnings exceptional to were

forward expected of First, somewhat our center a from were with data QX. shipments products than stronger little pull

some for had than last Second, resulted previous ratios Performance year second puts Net the favorably in I million, some cash flow repurchase maintaining additional further benefited the how million earnings we're generated restarted cash minutes, and the slide, we and debt and fiscal from year a favorable settlements.While in quarter. metrics, million on benefits shares. first the And will Technologies, flow a nice $XX first-half including to lower prior for XXX,XXX This based progress. results our with leverage product which few in material ratio outlook purchased X.X.During this the end cash earnings sequential the impact a quarter we share of strong in please raising quarter. the year-to-date $XX turn $XX second at negotiations as cautious from free free coupled and program We our our mix. very the generated again of mentioned we quarter, commercial million Slide quarter, which on $XX some a also compares In XX. improvement our in I'll moving review to half, full guidance.Now the all flow view of to is

we share-based on offsetting expect impact by free driven our capital. our program. of flow, reminder, compensation growth fiscal currently focus continued and cash focused program continued in This dilutive higher a incentive a on the is earnings year, As working

stand X% We continue acquisition both climate flow to to Modine's 'XX support ready initiatives.Now turn Slide free and and strong, outlook. our economic we sales. in of balance to of cash our remains let's current fall sheet anticipate in to will maintain full-year quite to the X% organic targeted for range fiscal growth XX which plan

raising the earnings for our announced press 'XX. full fiscal year outlook in we're release, As

for The revenue year. quarter decline our fiscal expectations, XX% to we in economic This in the to market.Moving another last cautious Technologies. leading general continue exceeded growth to regards over anticipate the our refrigeration previous we due Climate to approach to primarily the especially the now we heating slowdown, to we from second in of a increase transfer mid-single commercial the a outlook slower low In segment, growth the which Performance heat data for digits, center HVAC&R, to season. residential the expect expect XX%.Moving ramp profitability in heat Solutions revenue our applications, maintaining and a single schedule guidance. digits, prime as modest and concerns sales quarter is reduction range remain With is a products, and from pump

expect our outlook and the We from divestitures, rollout, now half continued that second we've completed German adjusting we're accordingly. benefits revenue the XX/XX

move the XX% an approximately that including up million million, outlook year we left perspective, year in anticipate of while versus our EBITDA. average second million market a the We the million, our with divestitures.From that anticipating quarterly increase with update, the $XXX half of previous higher $XX will finish to in representing an $XXX $XXX cautious adjusted to million, from to fiscal results the be position between adjusted trends, XX% and year.Consistent million Based half prior $XXX $XXX of 'XX of EBITDA raising the to fiscal expect of us. adjusted million We and the range EBITDA. to of compensation now front our $XXX expect maintaining and a adjusted including incentive recent the and full impact we're year advances, EBITDA expenses.Let's somewhat for SG&A on the we'll we're

driven lower thermal is seasonal targets, want comments another typical be well aligned business with sequential our data order results back Modine. segments solutions, a and I key QX and sequentially that advanced deliver at with transformational strong QX.The QX the step We up to lift centers, a other we will reaffirm of patterns record on year earnings expect to my to growth outlook full based be on that year, in in previous and will expect the full and book year margin our businesses.Shifting by and

with with expense, will depreciation, to interest including in our outlook up, In towards appendices free addition, are cash earnings press wrap around expenditures the the financial and included anticipate Other taxes, improve $XX with be from our expected that targets. second we're million. assumptions attached higher we this and further flow quarter results our long-term amortization interim release.To to presentation the extremely maintain ability to and capital pleased momentum

us.With As Neil will early the of that, our opportunity said, but and Neil and transformation, has tremendous. progress work And we're stages front of a of we in in have been the questions. hard lot take your I

Operator

Matt first Instructions] with question Davidson. from comes [Operator Our D.A. Summerville

Matt Summerville

the a I 'XX, here? within backlog the hyperscale made fiscal the you cycle I wanted and that to growth context a any about in in have the diversification maybe early order slides were center CDU? The data on the initiatives start in have any you curious market and what customer on what then I'm in 'XX and you're if And of follow-up. on then question feedback And update the business. fiscal suggest does with comments

Neil Brinker

go on first want to you CDU? Do

Michael Lucareli

United was keep to to for with in States build the investment integral growth, our in and to we're develop An growth our experience us this we've thank been data and manufacture in labs well we portfolio support on the up to CapEx Europe the you expand A as side by was in The grow know, as expanded made the allow States piece to we manufacture the as market. and to we lot being the demand American Yes, our globally. able our that chiller ability Yes, continue a to that driven so backlog United you to question. of product in cooling factories well. that and the to continue We've that centers. air this seeing. fact Matt, of North this growth capacity able as

to and data of we the So product CDUs. that will continue with portfolio and expand our is next evolution centers, the

we to help of going from Matt. approach us for We and are market. the was CDUs this. liquid to this data into recognized And, colos. these We've back solution.And center was you and hyperscaler CDU XXXX. area produced product sense. heat pivot us that our both loads. now they know, They're allow we us to of portfolio get there's to that's of where lot makes that areas just VOC us, on So new centers, the high and we've actually products a density this there a that current have this know, cooling provide liquid into provide complement you to leaning the collected isn't and before They them CDU different the more that and realized cooling, see a adding where data a cooling trends piece in heat favorable And can in order of our we've

Neil Brinker

higher. Yes, and a it middle the I much process, is in business we But next ability, quite thought year, a the we're the the rates sustainable long XX% XX% think little definitive maybe question little a about you. term bit a while longer-term way gets give for growth going grow about not a is number about as on even year to over XX%, the obviously, talked XX%, our bit for to we've to bigger. But in early the of your so be planning Matt, level,

So continue expect year, growth it still but We'd high next at really pace. revenue XX% won't high. a XX%, very

Matt Summerville

about And diversification. then I hyperscale on asked customer progress any

Neil Brinker

there. our advance and It time. to conversations Yes, we continue takes have conversations

to hypers. liquid we globe, of capacity those is the be. conversations expect would further footprint, to we manufacturing advance Again, able global the cooling we're favor portfolio us know, across line our process much technologies, with continue XX ago, in the in along months increasing with our being adding about the to with started having and product all where You

Matt Summerville

about guidance Have know, all a go-forward QX, this And it. environment think delivered thinking in saying, the a much step you I what pretty just curious And of as guidance. the QX, about good a coming gave of out guidance just follow-up, kind way. bucked that I'm about you just then, framework of as you the in Got everything little is myths you unfortunate the There's are a there seen is, macro really business. choppy. a demand at as so environment? it change speak. is is to function looking Or here and in Geopolitical you it few

So, trying here about second I'm at is maybe of guidance in XH? more your conservatism we some as understandable. of given you just kind half to setup, dig the the sort philosophy how think performed in

Michael Lucareli

it's Yes. Mick. Hey, Matt,

coming much any environment, think few number markets business things levels. or fair of it's the level which you And the in not a geopolitical We're step list seeing across more the of think function latter, of the I like market, went a change question. latter. of through a that really eating I kind uncertainties up. season profitability in The of the

large us businesses go to months. want the how in that is continue divesting way, organization, amount through to have out quarter but leaders ability to asking product we pricing through project great, to I another to timing. of momentum you color, a So we're It's QX X through growth it, manage of trying there any we cautious add exiting, the with amount accuracy, we're thought this the down step of company and the guess turned QX, we but had I'd had I now. making for a we in know positive next add, bit is pushing do level Neil could there's for to a little X it? next, strong any thing the in a of on add that color we're just as quarter.In are complexity from other of and we the predict volumes in be and That's other Neil, right our lines would the transformation, we be the complexity that adjustments we're

Neil Brinker

mode, know, Yes, for when activities a to XX/XX predict think I lot is difficult more change it, we're to transforming a in little how our to predict. changing destabilize right mean, It through destabilized when many, about at you intentionally all of difficult stable it we once. thing the a become you do, we're When you're many environment does a bit company. things in the

to our guide. manage make to keep with it sure approach consistent that continuing we of do want in we're we terms way we the we how So and

Operator

Our question next Moore from Chris CJS with is Securities.

Christopher Moore

Maybe I'll the a center side. just backlog, quick technology? with cooling on current data The that air start all is follow-up

Neil Brinker

Correct.

Christopher Moore

Got on that does What like? the years? development, couple you. a is of frame And look time the CDU that

Neil Brinker

Great question.

market to commercialize the grow have the We or expect rate potentially the see, adoption of the that to it'll next could ability year. at this. predict And that in beginning we of we

We can we liquid We've nice here with see. technologies CDU. liquid. just So it's customers do the a we're got compliment what liquid, air our ways different challenges to to in terms air side. cooling can that to the for of There's doing do on multiple solve the

the actually space. waiting to just been to wasn't We to with time familiar past. I be investment joint for this companies themselves start earlier, move did to stabilize There We've ago. a we've the make this the to So but and for we're start grow.Like things, when at we and it. in has able X position this CDUs developed see market market going well technology years said potential to other it's it. We're similar that this have rate product and they that they, and ventures the with deploy

believe time is So right. we the

Christopher Moore

switch me here. Let gears

So a electric its pay The extra Ford factory. $XX postponing to vehicles. for customers EV reasons is billion given were of unwillingness

general. or of you ICE kind auto at the wondering potentially business that? on how look Just impact business Any EV in

Just, kind you there. of know, your thoughts

Neil Brinker

interesting don't We an right? EV it's question, on automotive. focus Yes,

EV that of is areas in terms on vehicles. the we focus electrification Our specialty

applications You away require from any moved know, to that's at automotive systems related EV we our that we've And solutions. EV related. look larger really and component

see we we areas with, where EV. we're in demand, So, to XX engagements orders that group. on to know, We're that see see in growth We Europe. have with expanding recently where plants We're different we're platform the producing We're very we're a we our be in target that customers put XXX expanding pleased in into the wins We or capacity we're you and partnered going EV Tennessee. expanding product press release just our won. Italy. for out

systems we focused we've the buses, the last defined us specialty vehicles, areas -- municipal space EV. for that's that in on. vehicles in that the in in Again, we're growth So mile like is delivery that see school target that's buses, vehicles, and

Christopher Moore

can, right, us Then just into QX you there. understand maybe center the that maybe caught I segment, you dynamics help if in the can data

Michael Lucareli

Yes. It's Mick.

So QX. photo from the likely you talked forecast lumpy. the can from X center, so, of data construction customers. definitely, standpoint, we've quarter or probably months be a what would We our Those schedules knew is last, X past, they are, projects. in or year large the had on be the presentation, based in know, we, a we These about our the really lowest

in book, it's see And we that want in And so in time, then -- those shipments. the QX. where had revenue of the revenue Again, in to QX. ready product ready bit with the but only of QX, customers on completion. in asking depends thought big a a we're thought we QX to pulled, going the on we consistent on and shipped. required They to higher lower on have when and for our based we QX, it based to amount it little really But expect and than was coming pulling have we go.So they're be timing be be, customer would just order to a ramp

Christopher Moore

performance up it's And liquid or performance high CDU. that on that, then you're then follow approaching centers? CDU to that thoughts market? high on the latest AI how address I data given for in does the approaching And guess just not I cooling wanted

Neil Brinker

a question. that's good address No, Yes, does that. it

co-location a more computing AI efficient machine technique higher technique. So cooling or air need expand or into AV data of cooling is because to if a higher you and need anywhere -- have you learning, ML, where your would you where efficient performance, to speeds center liquid cooling more the a center you data want cooling a capacity And as augment mechanisms. in traditional or cooling

allow that to those So chip, to direct on example, of those on this heat cooling racks. is removal loads cooling for heat for silver liquid supports

is that This and support that solve it market -- of drivers. yes, those So helps problem. part for

Christopher Moore

actually the that that's 'XX that. to part in you or mean? I did wasn't be first think available And calendar you I Okay. of said going clear on

Neil Brinker

looking year, correct. we're next Yes, looking at first. of the at first the part We're

Christopher Moore

more then. guess, And add one Great. thoughts, then of could I there? quick Okay. pipeline? Any color what squeeze it you're potential to terms updated M&A any I or in just seeing Any if on update targets, one

Michael Lucareli

I X of Yes. little People market. the kind little but rate talked saw picking ago opportunities months It's a slow We deal flow been hesitant for quarter been some we to come a with flowed and bit down. to around last maybe us. it's the would or and bit, say up economy. nervousness the were hikes a few

with the dialogues, side Neil Modine addition, as and being continuing people on to aggressive on doors. more about, discussions, knocking have In talked I have we're

to going continue back. So, with we're report XXX% about It's a we're and opportunity forward building. good feeling pipeline the think I effort we'll

Operator

is EF next Tim with Our question Hutton. Moore Instructions] [Operator from

Timothy Moore

on gross growth. expansion Congratulations the margin data centers the and

mean, way For drag. sales I your harnessed the maybe customers, a margin cost to overall through Modine, is new helps has grow quicker, engineering design you that like know, easier new the profile customer that current and quickest and it you've seems

next you might Do that you do EV the would XX over expansion, do gross you As outside out weigh you offset that on on you've the think signing XX/XX up? expect adding or new think customers customers? to you're little platforms look margin take the that some if of bit been more a months, new

Neil Brinker

and identified good customers are Tim. that verticals geographies new market-facing where at Certainly, it's looking Well, new we've we're growth. question, a Yes.

don't the have about through market, to got make we're think of you we filters, what if air in customers, those erosion centers, indoor data hard So We've GenSet place And in identify you about doing. just filters terms to absolutely. work we be have as think EV, we we're the XX/XX, that quality, sure doing that direct. all in

Timothy Moore

center know, Virginia But you a X backlog trying you really know, they of was data XX to maybe of Day. about That kind CDU can your just for opening I end a based manufacturing visiting plan enjoyed than growth? want mentioned, you and run the XX your months a you of and to what that. XX their to customers great get the Do months definitely plans backlog the that, electricity of what I'm really facility as know the a range of talk I think kind the Investor offering I you ago do, know, is lot finding their good power your more that, to, in you for to there. behind the backlog bigger sense shadow customers sources, XX-month uniqueness got to to remarks XXXX. and get if you appreciation there's your and maybe co-location think of hyperscale's the a on calendar

Neil Brinker

XX% order is a placed and we say already larger been to if backlog, the run that, confidence, that a you commercial think the then order it's point get high and precursor right? or the backlog. at way when visibility, all it's And at funnel high our the looking a funnel, in we of Yes, look it you're is it's So that, the backlog, know, about visibility that terms know, Certainly, likelihood degree, we be this which XX%. has even good to we than percent there's we it before question. to going And when current a you high of our placed. is through

and of visibility Assuming XX% that is bigger. you it, order that have larger

out process. as certainly there's with supply because you customers that we're have years, and XX%, XX%, get our an difficult predict. XX% you out start triggering X, at go to much years, entire conversations whether or X it's having the cycle, chain, in manufacturing, along But you to X, operations, As it's more

we yes, until in have have declare it. we So hand. don't have order we visibility do But we those conversations. and Yes, we the victory see of

Timothy Moore

Modine Manufacturing (MOD) 2 Nov 232024 Q2 Earnings call transcript