MOD - Earnings call 3 2024 | Modine Manufacturing Company

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Operator

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

Kathy Powers

Good morning, and thank you for joining our conference call to discuss Modine's third quarter fiscal 2024 results. I'm joined on this call by Neil Brinker, our President and Chief Executive Officer; and Mick Lucareli, our Executive Vice President and Chief Financial Officer. We'll be using slides for today's presentation, which can be accessed either through the webcast link or by accessing the PDF file posted on the Investor Relations section of our website, modine.com. On Slide 3 is our notice regarding forward-looking statements. it's forward-looking as outlined with Neil. in and Commission. With contain release our the will turn Exchange well to as our that, call statements over in as earnings Securities the This call pleasure to my company's filings

Neil Brinker

you, growth. everyone. pleased another good to strong margin morning, by quarter, highlighted very and expansion Kathy, report Thank I'm successful and earnings

verticals. of as higher-margin demonstrate early this ability and to are all profile quarter businesses. in realize earnings to and faster-growing further we our just opportunities early are continue we results stages I towards each we've Our our shift that market transformation success, to identified our Despite our improve of the beginning of believe our the in core

are focus and ongoing quality our success adding this us. cases, approach manufacturing our commercial our lean pipeline by for many help the on operational resources XX/XX realization. supply on chain opportunities improve goals. about will In team, and of support enhanced M&A Coupled to we with additional we available good to feel progress excellence cost of Overall, productivity, the very towards the front, our recommitting to

on bolt-on not growth products large but are looking deals, for verticals. focusing We technologies to are acquisitions instead complementary bring key that transformational and our

will attractive of focus which of our search approach. sheet, We in and recent fit assets a opportunities as support the examples strong we Technology that our are growth Napps targets balance perfect this vigilant Our of benefit acquisitions IP our for and areas. TMGcore remain select very inorganic from help

Solutions year provide But update in we quarter to observed of saw updates financial each some same first, X. segment. Please our to our the many I'd over our and results go Climate we to with third provide Starting second will Slide trends on the segment, turn high-level quarter. like an outlook. full Mick

very be exciting technology. Meanwhile, TMGcore, year. us requirements this businesses liquid XX% assets our revenue shared center soft, as some data prior expands allowing to we news of heat in transfer our select products exit strategically our by Our specialist remain future IP initiatives. Earlier of compared X-phase the a strong the high-density and center purchase immersion of the the computing. product and certain the customers very in single- business continue markets XX/XX the the month, of demands with impacted remains and This to to up with about of for cooling data our they manage global support connection offering, revenues low-margin

immersion colocation product that will the commercializing the can this begin a needs. to or the for of a very in add to complete technology solutions to in investment of additional cooling ability with center with working data and products support suite customers' complete have the data and our and cooling that a multiple strategy be team center I'm of integration believe system. We is for on development technology center of customers. the best hyperscaler customized optimized data to to technology Our in hybrid temperature excited along internal the portfolio existing opportunities expand us technology this Further, complement future. the unit, allows new for while and gaps products our our accelerating needs our technology of the cooling be high-performance prepared address maintain development hall the CDU, distribution that

segment. the the did what are in our performance pleased I'm Grenada, business, facility, a In be Solutions Climate data our our extremely Spain expected and in to facilities. we manufacturing to transitioning Mississippi we center data similar growth U.K. and Europe the further Overall, recognition of center existing with of plant

transfer and despite to ensure delivering improvements strong challenging to the continues grow, products. year-over-year and business our making are heating that right heat center earnings We the are investments markets data for

turn Slide X. to Please

Turning segment. to our PT

While liquid-cooled continue leveling and our in some enhancements. improvements which our of our the XX/XX on from air line volumes is business perform to Solutions benefit productivity focused in seen revenues, continues Despite to flat margins businesses, commercial initiatives have we with and well, Advanced our expectations.

made In addition, some important this our announcements PT segment also quarter.

EV announced our First an driving for important Systems off, Management partnership EVantage our a in controls with recognized technologies. systems Bosch Rexroth, business Thermal leader

team phase, quarter, about revenue the that achieve this was team been Sullivan we team are to by goals. and their in point, to expected provide of growth since with capacity for our goals future recognizes to commitment in to XX by capacity Award. sustainability rate customers helping Frost previously also the this Europe, recognized maturity. ensured This and annual of program what strong is and its Product accelerating of with a North Rexroth's proud has over the off-highway Bosch in X service, customer market. but American last have we & the also meet equating so while recently to award This our on decarbonization. I'm projected wins Given and XXXX million Innovation to And reliability of able we additional commitments U.S. opportunity market have the in expansions announced accomplish the our addition, end quality, electrified run additional still future. At has opportunities this booked position, very the solutions including excited the development program wins, partnership $XXX partner is

I'd Power in for energy critical with for like and pivot ripe Now to growth needs such our market the another applications for PT facilities. is GenSet centers as a security ever-expanding Stationary to business. area data segment, healthcare growth

dedicated market market, building we business. growth the potential this and to team devoted As the understanding we this a established recognize of

key of vehicle progress we our for quarter, this the growth completed early area supported the in and the future. Last very encouraged to Modine by that had are our be that expect we European operations market. We announced light German a divestitures

that our strategy. our with transparent line lines product margin certain We targets, don't were exit intentions have actions these been to in that and about meet

that overhead taking action requirements markets services capabilities. are are on we higher technical very and these both need quarter. mentioned with performance initiative address opportunities consolidating supported that our our with this to attractive we costs certain focusing also line these have by pleased We acquisitions. I'm profiles to actions and of and reduce through historically These carry in would and our returns divestitures that progress our resources growth broader more

Our I'll team on over next to is goals. With operating our in at a only to strategies place putting are executing level, our Mick. the it in very high we of reach call not set that, turn are but the plans and

Michael Lucareli

EBITDA. turn slightly decrease due growth favorable completed driven in offset quarter impact. strong in by transfer another good products was to Please Thanks, Climate Neil, Solutions and to a FX segment by and Revenue heat results. down Slide data a centers and to excellent XX% morning, improvement adjusted the everyone. review in X mostly a

including to due residential strong XX% hyperscale with lower for demand As within our trends, or adjustment we've on outlook discussed sales full both pumps some initiatives. demand year from X European customers. and we $XX several in is product reductions center heat heat Data and quarters, grew markets, group. the last these experienced commercial XX/XX markets The million, colocation HVAC lowered served primarily over products. along Based driven transfer this by by

a anticipating year excess Our strong growth center while XX%. quarter data in remains strong and very of quite outlook fourth full

in million coolers. acquisition July, we of along by industrial sales completed higher increase Napps were the an $X last by and X% sales Technology higher with power in or sales that HVAC&R driven IAQ

Our the previous heating remains lower levels. market sales overall depressed than somewhat were expected as from

earnings improve it for We bottom, will resulting to margin this conversion at but and expect quarter the to believe XXX strong potential improvement continue indicating a market a we very another with 'XX. We're basis XX.X%. the through softness least pleased data Solutions in is Climate point calendar

segment X. X%, is transfer prioritize prices earnings for revenue we which continue FX At with in few by recent growth. negatively adjusted increase improvements a average and favorable the and had quarter Sales a also million. of divestitures by Revenue quarter, businesses, impacted heart the great on higher next selling cautious wrap by revenue Solutions, quarterly anticipate Our Performance XX/XX a margin great down we Slide margins to improvement in impact. discipline to driven to HVAC $XX a heat was but further the finish quarter and year. Please a improvements. markets driven increased partly To XX% Technologies fully at volume products up in year-over-year German these remain EBITDA. Climate level, a over turn

impact earnings of the Technologies X%. Performance would divestitures, the our and growth, evident have again Excluding rapid very improved by driving sales focused was on this quarter. that remains

on efforts Performance were in Climate As focused segment are million, demand. $X with along earnings to versus Liquid-cooled or EV explained X% Technologies continued Solutions automotive sales and and growth sales. I revenue of Systems or sales, the decreased and with growth. Advanced million, $XX higher up margins improving previously divestitures XX% Solutions, due vehicles, and sales application XX/XX lower commercial component higher coating to the sales including specialty mainly for

point grew million, XX% like application to and off-highway sales excellent Climate Lastly, resulting basis was Performance X% also $X improvement. to German offset to higher a automotive related and divestitures. Much customers. Solutions, earnings a the by partially margin growth The air-cooled lower was XXX gen-set Technologies sales conversion in primarily adjusted or sales due EBITDA

ongoing of we earnings sequential balance year, a further progress in anticipate the improvement increase XX/XX with the and QX. For year-over-year

the total review let's X. to Slide results. turn Please Now company

by as markets. and targeted relatively growth advanced These in as HVAC select centers were flat somewhat our we and in offset continue solutions. see with along XX/XX planned activities divestitures temporary sales quarter to were Third rapid such growth areas, data weakness

in up X%. of the sales Germany, divestitures the Excluding were impact

or increase improvement million, margin incentive the million. report the prior compensation. I'm XXX quarter consecutive year, again XXX Our transformation EBITDA point to this SG&A was now initiatives strong increased represents of very XX% $XX $XX of adjusted of XX.X% expenses, equates this improvement. by primarily year-over-year happy are an margin and adjusted with compensation clearly an margin, This EBITDA eighth improved the employee basis basis higher or which from quarter, to including gross that benefiting points. driven

quarter, XX% EBITDA targeted earnings that very a our than exceptional In $X.XX, transformation higher pleased addition, We're adjusted share prior with is another year-to-date was in range. 'XX the above per margin fiscal resulting year.

metrics. end and in of moving million. Slide generated quarter, the lower cash we compared of year. prior free million $XXX $XX XXX,XXX improvement our represents $XX flow from million quarter, a quarter. million fiscal puts the the This Now Net year cash to at $XX $XXX to during flow $XXX Also shares. was million million turn which lower to Please XX. repurchased generated year-to-date in prior last We significant than debt third the flow the cash free

We flow fiscal debt, balance and both on well on working relatively acquisition a a sheet focus cash targets support conversion by continued of the a strong to deliver capital. organic For supporting driven our to improved and and year, low initiatives. track growth we maintain higher are earnings level ready

outlook. 'XX fiscal our for XX Slide to turn let's Now

along the year towards we're the HTP full in the end our with fiscal in XX% 'XX, Solutions continue data were impact expectations sales heating to earnings while QX, release, announced sales. In raising this slightly press outlook and As raising forecast to recognize product divestitures year the XX%, trending outlook the our for segment, center to also with lower of for lowered we earnings our full European revenue of range. growth expect high of Climate the

lowering Moving recovery end to slightly ongoing range than weakness XX%, quarter. refrigeration European range heat anticipated. With to expect flat, we the to HVAC&R, market. products, heat and our from slower due to due reduction previous digits sales especially which the in we a in last This is primarily single the and few the guidance. in XX% of is is regards expect to the pump from This residential low revenue a transfer be mostly to commercial heating originally applications to a markets, decline the

XX% and growth continued from expect to the we EV in not quarter. Systems Solutions for did is change Advanced driven program For last demand launches range, Technologies, This to by grow which Performance XX% the and components.

for liquid the trending the but and end be after will outlook products, divestitures. lower the recent for adjusting air-cooled holding We're towards

of I'm XX% XX%. $XXX From expect EBITDA outlook the of in 'XX our to pleased million, again be now for report adjusted that adjusted our million an fiscal an increase the to earnings to representing We $XXX raising to EBITDA year. perspective, range we're once

to addition, in cash depreciation momentum improved an amortization assumptions, up, attached ratio expected In range appendices wrap with free taxes, in this we are included including quarter, To will interim year, are good results in flow this we're that, and release. the Neil third to press maintain presentation the the and take we and of pleased extremely anticipate sales $XX to I fiscal interest, your and financial targets. With from resulting the questions. expenditures be capital our and while towards long-term million. Other

Operator

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

Matt Summerville

A couple of questions.

its going today a the First, massive into how climate headwinds versus market of there and amount the feel in in are prevalent to the along EBITDA at incremental of making the function see highlighted you're like momentum XX/XX you any the there seeing reason Is improvement you 'XX? kind of that to of And across dollar market more respect and all just you in much you're margin these if do weakness generating business. areas EBITDA are shifts lines, be Modine. with way

Michael Lucareli

it's Matt, Yes. Mick.

Let revenue me add around around give some of then because there a to I over Neil our I'll and couple the questions impact just on revenue, XX/XX were comments to just know more some you color adjustments. turn

element in revenue tied adjustments just aren't market I There's solely XX/XX clearly softness. be First, that an there. want to clear to our

we'll a comment about combination That's products, So as at outlook. our we were again, $XX million. to end a that of lowered our the of of activities. analyze about heat a announced little night, revenue for the running sales the that transfer outlook get and outlook we is bit. below Neil estimating bit market we're And on X them And impact And in overall let right? we're then little in had year range XX/XX range quarter, a question, at down the as right And that's XXst. the last one that's quarter to So adjusting revenue the earnings raising the that and closed adjustment divestitures our quarter. point, And second. the in last we we automotive midpoint I'll we your last X% areas

we talked and The second the liquid one, about and air divestitures.

towards EV seen strategically the vehicles. range, globe, And tied on with lower the us -- the truing running especially across adjusting and EV, year automotive and both we're softness for automotive, outlook our of divestitures. by But the we've combined closing up that's liquid deal, and the the also So end of XX/XX. the on some air side full ICE to okay

want it's relatively talked And has to I be really we last, to then about was It slower recover. there, been basically market flat. and HVAC&R the heating clear,

it worse. industry would It's are seem rate. faster turning little and So be -- data and the we we but bit is thought we're not recover it to seeing a -- getting a we that quarter, showing at

midpoint really today, sit highlight, a range, it and revenue our and again, improvements. middle -- market again, it's really running us what's out -- a combination the the want So that last growth we're of rapid the the put allowed we about drive adjustments driver to we I of just XX/XX night. And activities. key the earnings way Matt, And of that's to margin about the

couple maybe wrap a just XX/XX maybe before we of So around comments up, it Neil impact. the

Neil Brinker

exiting, we we're Thanks is good customers up all fiscal a growth. for of in That's a especially big thousands still that still we through Yes, so a areas found that we And the strategic accelerate we're with where It's continue that Matt, SKUs heat and margin that business. drive potentially this Neil. HTP favorable lot it. of next work isolated for Mick in going in of expansion clean markets the we to grow is initiatives HTP, it XX/XX and business we when to year, and of preparing tens of activity. We've to summary and some but that terms there's customers trends in business. Not those some serve. softening how we the can in and question. for products, consider think would about is thinking profitability transfer we see some about markets opportunities ready

that because accelerate react quick. we XX/XX through we when opportunity market softness, pretty see of So an to

Matt Summerville

center on of start of start visibility to a looking you about my when as business? to activities much follow-up, in funnel data the then 'XX things, And related what see looks go-forward in? of Neil, creep just can bit expect to the side you you how into And fiscal ahead little talk kind that would liquid have like,

Neil Brinker

Matt. Yes. Great question,

average, got XX that growing X had been pretty between XX we've grow public hence, that continues we customers about. far say It's that as rates of to revenue about, the targets it's projections grow. on we've would months, at, at years. we've and out visibility assumed I'd the public So with our been some it been as funnel

of and the go in on which which cooling. or CDU, into happy expect the side, a where we're as development And with a current help end have both we're the we our most the with And computing, acquisition customers we were with IP CDU technology of well assuming customers Europe as pass they'll assets, X going immersion. And around making is to and customers. testing for liquid, on customers solution So next then distribution have Relative us with assets, and high-performance in with we acquisition markets in and product the their in that on hyperscalers. the liquid unit, is couple announced a that's cooling at validation direct-to-chip and our technologies colocations we of to demand we to had liquid or their working really we quarter our with if customers. our couple North America have place, be in and sure to and the going prototype portfolio

around I acquisition weren't direct-to-chip, to time. But this prior cooling is emerging next-generation a part revenue centers, of data part we than emerging be the think, from us TMGcore. to cooling conversations the allows So of assets CDU is having that at closer generating is of to

Operator

the CJS of from Moore Securities. comes with question next Chris Our line

Christopher Moore

and lower range, in QX that being or are Modine 'XX, this to XX-plus X for margins quarters giving with range. margin just the to being on be and fiscal 'XX? a looks I It start -- puts X like margins. operating realize not adjusted X bit able on the 'XX little first in than will you're takes Maybe in perhaps were improve what but guidance match 'XX the

Michael Lucareli

Chris, Yes. Mick here. it's

I'll And above want to I'll wrap between the -- say, to So a we'll we drivers, we're XX% XX%. right? as out. company this well clearly be range, EBITDA and XX% XX% the up talk and the margin I'd first, just to in set We same but year target trending

year. but our And further ahead a going where not question, to of drive your of that next margin schedule, doesn't -- couple we're fully mean to So elements. improvement comes plan that is from we're to

heavy still growth journey, things been early a looking are the lot into then XX/XX also margin business, those out that's a that productivity, in and and go our On whether if on pricing, of areas at and but for there centers the we and GenSet that's through the then up getting good mix still earnings operational of EV move at we're mix, where a the anticipate businesses. elements your where side or for in IAQ, simplifying focus simplified days. targeted of on you us, data see growth benefits or growth, systems, leaning we right, we've and through, that you PT and us. And There's side those

of businesses. So we it the started it's of kind be our and will some in this year -- where like journey

earnings line. are product and the to simplification We targeted while worry areas. going to growth not through the We're margin in top XX/XX accelerate line PLS, to about continuing drive going

Christopher Moore

At between at know bolt-on acquisitions. Day, M&A. $XXX little comfortably talk million goals. about remarks, that million you Solutions Investor talked prepared 'XX reach primarily more guys you to the needing looking $XXX M&A a and in I about the helpful. it. Climate your Got 'XX Maybe Very about in bit to roughly talked

what not forward? in I'm look kind to moving reasonable indicated level. give of you that of might like updates more if need to just a subsequently wondering terms range any have You necessarily get can

Michael Lucareli

we team, I'll Yes. focus in assembling add of we're from of the key an everything in can through want stays weren't of Again, strong when our and first X from literally And thought kind and days better we color. at spinning from X to much some activities. how XX/XX how we're perspective, to go first had much Neil data. is are we more the the the really and that business retain, Early we've we're we as the I've would up. had all Nick, getting the math it -- I just the We on look we get Neil customers, think then current sure when we go we many cases, through serve improvement one orders and messages last our as quarters, really Neil came customers,

it the around need to that XX/XX the of we then really targets jewels grow stickiness all we've lessons don't our know that the financial the Modine acquisitions to an in the didn't said, of can some say to over, why necessarily turn is thing second we've our uncover -- get learned continued see organically. of I'd we for we And So business. Neil, large were reason that from about there to within

Neil Brinker

the with for us can financial company, growth targets. to got years we've Yes. that to the That's question. couple we $XXX we've meet days was the a less great -- number requires our learned our us point, growth especially Those Mick. And organic our million million, thanks of $XXX much meet XX/XX within a and more, journey inorganic for the of inorganic so very -- more drive ago, for first that which the fact

the us So product and And our deals front. up done to organic create that we the and that last quarters. our we importantly, of helps then businesses growth to doing expand out build improve M&A helps organizations geography us in it where couple we have us we in same in it the serve. We've it the in spent have areas on or helps been the want small areas a to lot that strategic portfolio multiple technology we're active want most and couple of the around the a divestitures on at of drive. And time, stand time

Michael Lucareli

But point, half, thought would I we original at and last it's think need. right, Just on say from number that, hard least what that timing it's we to that to opportunity. is to really quantify safe due

depends below, on but really looking and timing, it still we'll the significantly M&A. funnel the again, at but it's be doing exact out So

Operator

the Our Van Jeff next question line B. of comes Riley. from Sinderen with

Jeff Van Sinderen

on margins also the pump that overall on give how the what the the heat seeing business, first market, latest. there evolving? is businesses? those me And cash quantification the and on can say impressive and a little then bit more status there, Maybe you're GenSet flow. then of any around that Let you color guess outlook I And for X work

Neil Brinker

Yes.

actions some we So on pump the system. heat European inventory the continue an this pacing softness there excess regulations, over as investments out pump And in heat to on market, additional see years adoption has based elongated been of the some couple our we're in the It's this we heat what extension market. the personally to adoption a reset adjust place, Long in on we're term, space to just doing the I'm rate. in with confident of in pump and short-term we're this put that. based that

is It's adjustments. kind We're the and the team it's through that's time. of So what it, real appropriate working live making we're seeing.

adopted. got of industry we've I The for starting there. taking earlier towards we nice quality side, lower that are with to technology of the product starting reliable, win cost, share. GenSet solution And that that, the can higher get Modine. looking the a and notice the to adopters are think a helping they're lot provide people On move essentially a We're is more

Jeff Van Sinderen

wind much And you doing like I exit kind dollars. other there. of know I to businesses might to you that you in look talk your enterprise, as point, are that are at been have if And or there well look seem guess, everything contemplate helpful. That's or you're you'd do Okay. and phenomenally you you to at business about down divest how to a be that planning XX/XX lot were of at either on low-margin overall we entire exiting? executing this there's

Neil Brinker

it's Yes, a good question.

just then So it and XX/XX bottom and as and profit and in we expand be that's business of raises margin profile that continue how the business, company sets going we evolution will always addressed. And you the it to quartile some operate to the needs be bar certainly, that have our essentially the the we improve bar forward.

we it going it address be always then it. in low if that of it's to different have activities of a strategic let's business be we Is question. -- not, and that in to we series have approaches If there's level So to that want terms margin. to

see go of that to haven't that over of specific out terms range looks we've what being simplification, in million somewhere what in can but that range always million able -- $XXX that's with I would it gone the of we've address far. $XXX It's, and same million $XXX-plus product to the something months XX/XX. been that as XX We a threshold. I so last what, the like, to divestitures line revenue in number expect And through underneath we forward, there's going be within

Michael Lucareli

Yes.

quadrant, the just X as saying, there's always I bottom us, going think Neil Quad of it too when And going. and company, be to sales. stuff X% we look at the data, for for the X% aligns that's where any was Neil or was

than I a bit little that. think at, where we're more probably it's

number with volume our that volume that $XXX product, scale. the the on million say of we lowest when kind probably call there's X, lowest volume margin customers lower products we type So of million to would Quad it's $XXX the are what

Jeff Van Sinderen

squeeze Okay. That's helpful. data could X then for quote to the just circle And if I for in more. back a moment. to just wanted centers liquid I

that you you'll you to business did touch those. said to centers on Just win not? go I to out strategy that in start think previously data clarify, Maybe just to

Neil Brinker

to Modine into have the are with to that our brand, we've absolutely, hyperscaler in side net on make centers advantages high-performance -- the time technology that we're allows to mechanical having winning liquid and sufficient. a the that cooling, planning us sure this cultivate and solutions traditional where cooling data Yes, are hyperscalers Airedale share not conversations, air to get are that we're takes this XXX% that of next-generation cast into go pieces, we conversations space relationships. those the those Relative understand computing, cooling for

needs it or And a through typically technique. liquid cooling cooling augmented. is augmented It be immersion to

have those not solve not high-performance weren't assets to invited So use those we to computing. conversations have did we that how for we do technology which did meant we product on and

high-performance that we sell know, data looking well our their having things And Now centers those the AI, have we driven advance to now. assets, that assets, us problems. them They're we are and as but MB. by in next TMG computing, the on for we those we we as can of help have not something the discussions, all generation AL, today weren't solve or terms in of how competitors

Jeff Van Sinderen

or Okay. in And the QX, new liquid-cooled think? we CDU that QX be will out

Neil Brinker

for year QX of a couple customers of with our and some correct? and next customers, colocation -- getting the working some of our we're on Yes, with targeting fiscal closely pilots

Operator

[Operator line comes Brian Sponheimer from the Funds. next of Gabelli Instructions] Our question with

Brian Sponheimer

Congratulations another been has a already. addressed Couple quarter. questions. on And lot great

Just out in? at the the was doesn't us businesses, like I'm with door. those any it cash they cash in any the statement, get on liabilities there able Were look flow German looking went businesses when you to

Michael Lucareli

took and shareholders them know it well, Actual them, situation happy a have each balance would Yes. Brian, biggest it's where one, the ultimate you be was liability went, the quite one a exit facilities a immaterial? liabilities potential then the question. small was sheet retained liability Mick. liability And the the material X it if the transaction you have if those on liability. Yes, large answers that your that fairly would would potential there on would and liabilities, is pension number, about. And right, and was that which of a and we're we that then second the we benefit actually Modine cash on in some

Brian Sponheimer

prior in show the was forgive or of was XX And at X sales roughly Okay. businesses revenue to that second the Yes, million that. of growth for not I me, certainly $XX quarter. given contemplation the these appreciate end the so but

Michael Lucareli

it And We remaining this of have Brian. built a up in, bit been took adjustments. bit. call, lower lower little heading our that -- on we trued the days our we is down did of up, that we What It's trending a we made business, then and we we some it time little the factored the for towards range. automotive top were into earnings end

Brian Sponheimer

Anything me. the about about tweaked Last perspective valuation anything adjustment for we the X a tax or declines last your GAAP year fourth as guess that EPS. are fourth be allowance here? I one fourth in we you from earnings. in there. Understood right. for quarter, All quarter this Obviously, had Okay. algos think see way move the quarter needle should the the going that to thinking year-over-year But other. a could

Michael Lucareli

number. A from sure reported any do QX, But to coming events to going That's large that. We'll anticipating this No. our that. point -- we we're be make about good we'll highlight or impacts not the tough.

Brian Sponheimer

the higher raising quarter. and keep Understood. Well, you each bar higher all

So congratulations, talking you forward I look to and later. to

Operator

line of with Our comes Moore Tim next question the from EF Hutton.

Timothy Moore

of you the really exceed Congratulations on sense just good a facility I catalysts impressive to EBITDA differentiation person. my line continued it that highly address got street actually. expansion self-help and growth, in to when want another EPS may the touring centers estimate. impressive data in drive margin high I August business edge

at XX% of while launch guidance an bit thermal just kind your planning the sequential update sequentially in is the how topic million flat without in as For the look but $XXX on management growth out exactly that the those out battery for management, next revenues from in on of Advanced quarter, a more quarter. Could how implies quarter XX pinpointing you the little months? far that timing do going? is? of think And sales And you're the over Europe maturity, and about the the the a we us give midpoint you December March Solutions, were thermal then

Neil Brinker

Thanks for question. the Good question. here. is Neil This

electronics to to my at million product. management interest And and our opened We in talk script, package. up about we're into in volume. cooling So system thermal the the our earnings at capacities. that the continued expanding seeing we capability be $XXX Certainly, least and we're continue invest battery peak would

So within at we I programs volume think that out, that's X you're running won. X these when to years peak

that we've the potential made. been the of sure have So we're reliability, received. facility customers there. some are -- good contact and well the continues trend expansion in good being quarter-over-quarter terms very existing Modine attuned an that public the our employees investments making been excited are and quality that that been fact had and and some we've with that infrastructure for has industry in about we to really targeted Europe grow we've to are that in conversations And about revenue because has already delivery and of we this existing More

So investments. the of that to into to that space with had Europe, conversations open the up grow we Italy continue the put we to for direction up continue in those facility and our amount in ramp trend and going we're to to this expect we be we've continue going investment business. customers, with positive We're in had in the us to able to

Timothy Moore

really helpful Great. That's color.

I'm Just gears. switching

client in got wondering, a about customer HVAC, technology visit you than dedicated But XX/XX my year wondering, and and focus data the progress just -- or more then through live this such. I'm really but savings was whole you and just side, more on customer August, customers' ago? And the there facilities, I so just performance emphasis not the a you uncovering just centers, During areas thinking in shops, as sense budget on expected of are efficiencies I maximization.

through go you I maybe segments you lean pricing? value-based going do the mean avoid as too As achieve XX/XX, on both you how

Neil Brinker

Yes, good question.

we've And both program. the gains commercial the for the on programs. operational there's of display Performance Technologies, I not productivity and the And the opportunity that through through seen a excellence Solutions done pivoting excellence that that into Climate success business, expansion. able certainly, doubt. Technologies, sides without think margin Performance through been to just we're So We've you've

or that's purchase procurement variance or price from to labor So anything chain supply PPV.

And expect our has front, within a those expansion. of there's would the through we've phase together. reached and been lot we in the team that expansion as will next we business to working the diligently margin of be terms the on do So the put price of that thresholds that can our operations activities some

It's and for and So plan. of operations business, operating PT. next not the list projects both the the is of the annual teams together improvement in are in sides activities the the and funnels And excellence putting there.

that that So will be big a is. good indicator of how

Timothy Moore

a fiscal margin It's the next carrot year. expansion Great. for good in

Operator

the question Matt next question line of Our a Summerville. is follow-up from

Matt Summerville

X if your headwind from headwind? in Just fourth follow-ups. it, I I what's fiscal the what's And Mick, missed divestitures quick apologize quarter? the

Michael Lucareli

be as impact estimated the million million to It's $XX to $XX in QX. going

Matt Summerville

business, of trajectory X? the EV over components kind the year the thereabouts Right. ramping business, And how had, buried guys this next fiscal years to wins $XXX or business is think to you the 'XX this is so about looks based X alongside out on BTMS realizing how X business, for you've the the to BTMS programmatic million big X to coatings that

Michael Lucareli

Yes.

that -- too. is the think excluding ATS about business, million. So just had $XXX coatings And and we question, I that

talking on year, provide growth XX%. think I to type XX% we'll we we that long-term about outlook, updated -- we're an said the CAGR XX% we've Matt, think that this the and

far as next year, range. in to I it think stay as we'd expect growth that for

at rate XX% So we compound XX% -- -- the reasonable. that growth $XXX million in of range growing to would seem that

Operator

There to the are Kathy hand to back in call for no queue. questions I'd further closing like the Powers remarks.

Kathy Powers

much. Thanks this everybody joining And so for morning. us thanks to

hope day. in X We that through our Thanks. be a will call everybody access hours. to this website about of able You has great the Bye. replay

Operator

today's Ladies your for you gentlemen, does conclude participation. teleconference. and Thank this

have time, day. You may wonderful at a disconnect and this lines your

Modine Manufacturing (MOD) 31 Jan 242024 Q3 Earnings call transcript