MOD - Earnings call transcript Q4 2024 | Modine Manufacturing Company

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Operator

Good morning, ladies and gentlemen, and welcome to Modine's Fourth Quarter and Fiscal Year 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

morning. good and Hello, conference fiscal discuss XXXX our and Fourth Full Year Results. call to Modine's to Quarter Welcome

I'm joined President by Executive Officer. Officer; Neil Brinker, our Mick our President Lucareli, Executive Vice and Financial and Chief and Chief

earnings will slides outlined our available the as modine.com. filings notice statements. are release On regarding The today's X in of our call section on we forward-looking using Investor and will in for contain that as that as presentation our of the Slide with Relations our Exchange forward-looking website, statements be deck Commission. well This is company's Securities

With over call that, to turn I will Neil. the

Neil Brinker

Thank where you, an transformation our was plans This became we morning, Kathy, and actions, everyone. results. our important year in and good delivered

quarter Modine, closed year the and performance reported sales second record another with row. EBITDA a highest fourth in history for adjusted out year Our our for the strong in

billion by in equates produced. importantly, XX.X% fiscal up our sales more for the change underscores adjusted to year This XX/XX to commitment million. that and $XXX full and increased $X.X the EBITDA to EBITDA to margin step Our X% profitability adjusted were has a XX%

solutions of a handling discussed immersion centers liquid air TMGcore, assets other data shifted carry through where cooling targeted data the manufacturer growth quarter, and quarter; to applications. last We we our and business divestitures positioned acquisitions sustainable and fourth both including well markets Scott strong acquisitions centers for for the products year with our have margins. X mix This that in demonstrated and are Springfield, and completed units strategic of drivers was the technology during a

achieve well principally of in on our manufactured markets of the fiscal Germany XXXX, in aftermarket executed as businesses us combustion the as also divestitures parts, X our internal squarely targets. automotive to attractive X our long-term most end U.S. solutions focusing coatings businesses We in the These the investing in fit market sale engineering help innovative engine X European strategy actions that within including here important margin for during and

financial outlook provide of to our cover will over fiscal year. past reflect our But fourth quarter I'd Mick 'XX. results like the on some our first, and accomplishments for

reported segment Sales XX% Slide adjusted increase year. to of in X. delivered in on expected outstanding resulting XX.X%. XXX end growth was at range. in another a million which segment a The top by EBITDA increase up basis improvement Climate data driven EBITDA margin XX% turn our Solutions to adjusted sales, in the in were a point centers, $XXX to Please the X%

this We several including have in made investments TMGcore and market Springfield. this year, Scott

data a our the Their our other which is manufacturing end our markets fit vertical, care, one into Springfield in which into dedicated are Calgary to we integrating and air X as units products, other are segment. for we such Solutions integrating Scott Climate supporting custom with Modine locations, center vertical. are operations health strategic data and HVAC&R handling great center for

business, Perhaps a technology a base. Springfield and customer us importantly data cooling complementary our strong center for most Scott brought

relationship our strategic customer, ability and new broaden a to customer with accelerating also In diversify addition, a brought it hyperscaler base. our

secured doubling have than the expected more output to this of We business, in our manufacturing Calgary additional growth support potential. capacity

capacity R&D new we from of fiscal total also will manufacturing data products we recently our brings a our number center. which potential that the secured of manufacturing at include center X, locations represents to addition, a we announced cooling doubling year. test in U.K., where the a were data In state-of-the-art Bradford, beginning site center of This past and for new

will capacity future be commitments ensure meet growth and we backlog pipeline, additional will current active and projections. our the Given our to level able of this customers'

decline, revenue well segment. businesses this Solutions EBITDA the the a Climate our Heat of significantly margins improvement the through business within performed to actions, also segment XX/XX overall year. products contributing other Transfer Our XX% past improved Despite

focused on opportunities and Solutions growth with Climate forward, executing while Looking organic their is businesses. acquired integrating building synergies

In technology at growth a to inorganic they gaps. their target fill opportunities is addition, and confidence product executing will and to team we meet smaller This high have to I continue targets. and will exceed continue that level,

adjusted Please resulting turn XX% to adjusted in EBITDA fantastic had Performance a floor. This in performance was XX.X%. X. factory improvement to the reporting the largely The to XXX from increase down activities product also on of high-level commercial Page Technologies basis a X% organization, XX/XX sales, year, EBITDA in a a point segment increase in advancing throughout margin

by our We product divesting mix lower-margin and deemphasizing and have lines improved strategic sales focusing on resources business.

have this The clear strategic have advantage. a we drivers strong technology supporting understanding still greater those and relationships, where is we a of profit superiority the portfolio and have but identified markets underway, and customer are of transformation

programs, annual Our peak incremental revenues Advanced $XX our added year. representing Solutions new business Thermal of continues well to revenue having million Systems XX perform Advanced grew Overall XX%. over Group with this

divestitures to Our relatively largely liquid German were verticals in and due line, air the automotive on the of top the plants cooling flat QX.

technical operations, and We expect are quarter. this testing to and end making of the we this progress completed by tooling services, consolidating be our mostly

segment further objectives mix The PT their and work favorable promote driving much divestitures. against still remain the year, through new The ahead. and their sales in product energy applications on attrition significant but explore this made of strategic exits they segment will transition portfolio support strides of for to focused products as changes their have

very how I'm the ahead. and performed this with I'm about encouraged business pleased equally lies year, what

and technology. we are thermal in management to better ways We our apply are and newer finding leaders solutions,

and XX/XX is Modine. opportunities leading guide for future using improved new to customer our build strengths while leveraging our in are a relationships to decisions. investing stronger to the This We

call to With that, I will turn the Mick. over

Michael Lucareli

Please segment turn the Slide to Thanks, Neil, and to morning, X good results. everyone. review

with improvement. the a in resulting Solutions adjusted quarter, another finished Climate excellent XX% year EBITDA

strong off, and $XX revenue resource growth both XX% hyperscale driven pay and for data focus and colocation million demand the center by center strong or Data driving earnings. to Our higher customers. market shift segment sales grew to continues

from Heat including expectations driven our continuing activities down XX/XX of The a in million. the lower line few European soft sales by was combination XX% were along commercial with certain The and residential Transfer or demand pump the markets, revenue trend decline with quarters. Product past lower generally a in $XX was market. heat

a or HVAC&R from sales coolers. million, our including increased slightly were businesses. in refrigeration revenue revenues X% year, $X up commercial offset decline prior Heating from acquired by

these Climate Solutions positive XX/XX earnings sales, EBITDA discipline impact a We're improvement margin mix including improvements, margin resulting in our basis a relatively point a of data very the at sales with driving adjusted conversion, with flat pleased XX%. remains Despite in margin XXX strong center increase. to meaningful quarterly heart

and up This the earnings Solutions. ahead, another positive for impact anticipate from more growth We Climate quarter we wrapped revenue including year. businesses acquired this the great past year fiscal

clearly with improving $XX customers. vehicle adjusted by Please Performance grew in again Technologies sales Performance divestitures products, revenue growth, came of had specialty off-highway through increase and focused another was negative which turn X% quarter sales very versus higher The Revenue remains and great X%. impact a to lower in recent and this XX% also Technologies sales quarter. million partially margins driven and decreased by the EBITDA. earnings automotive to on offset to X. Slide German the sales organic due divestitures quarter

customers. including $X with lower sales to higher Europe decreased XX% application vehicle million, or and $XX XX% growth mainly due and divestitures up product were the and EVantage sales the sales million in of specialty to commercial sales Liquid-cooled or Solutions auto Asia. Advanced

and the sales $X also divestitures application ongoing XX/XX to primarily due million X% decreased or air-cooled activities. Lastly,

areas to As we've discussed redeploying will in strategically and resources higher exiting drive earnings, while past, to growth Performance future Technologies the continue businesses. targeted reducing

As XX.X% improvement. EBITDA of a the basis point finish to XXX their resulting excellent in result, was earnings a margin conversion adjusted year,

up wrap anticipated and improvement year. result achieved improvement the fiscal we will the year, To in actions upcoming XX/XX in earnings continued significant

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

company we think it's on I As how review transformation to our total I and align journey. XX/XX important that the the numbers the with move results,

element while drive majority those of focus to areas other the areas. XX/XX prioritize and is A value deemphasizing on that the of key

total actively been others. returning resources and revenue human the growth we're also highest reallocating deemphasizing targeting in driving financial This areas growth. we're means know, investors on to revenue certain As that not while focused we've businesses. Instead,

this focused on remain increase EBITDA by revenue us XX% allowed small earnings total methodology why that's and adjusted is on in a XX/XX top relatively we to This margins It's line increase in in over fiscal 'XX. revenue.

X%, million to With with by that said, planned the decline quarter tied driven XX/XX sales fourth divestitures declined divestitures. of and activities the $XX

initiatives points, basis commodity XXX the with improved costs. margin benefiting from and actions, lower XX/XX gross along Our

costs. by including and compensation employee increased higher acquisitions to million, SG&A tied $X.X recent million $XX transaction-related driven expenses,

improvement point The represents consecutive million. Adjusted strong from XX% margin This again year-over-year was year. XX.X%, quarter of prior of $XX was XXX increase the with margin a basis EBITDA an adjusted EBITDA improvement. the Xth quarter now this or

per quarter. addition, in the benefit of the adjusted valuation on income a a the was year. was to which prior Please reversal $X.XX In $X.XX, GAAP The fourth lower due share an which year's was earnings earnings prior tax in than $X.XX, the higher of than was note, year. per XX% decrease allowance, basis prior resulted share $XX tax million

full another in more range transformation than resulting pleased targeted that years ago. EBITDA we quarter a above We're that year our exceptional X margin established with ended

facility improvement center This we recent free flow the We Now Slide of to million than higher U.K. Please data to turn fiscal and additional purchase previously of due during metrics. new primarily compared was an represents cash manufacturing of prior the $XX anticipated, of million to year. 'XX. XX. moving sales X.X% $XXX support to generated growth. flow cash CapEx to the

the Springfield was the of quarter. million largely last million and than than $XXX million of during Scott fiscal to debt $XXX acquisition was manufacturing due our Net higher year $XX higher This quarter. prior

fiscal ended Our year than due number acquisition. from and initiatives when to started. lower a leverage but we ratio ratio a the with the during funded increased leverage acquisitions to quarter 'XX, We of during large X.Xx growth X.Xx the

position result, acquisition a a As support initiatives. great and remain more organic we to in growth

I'm total towards of current strong the XX%. share expecting centers. fiscal in in the a XX/XX our our in which Now fiscal areas We're due let's continued Slide key chosen in rationalization deemphasize. and our HVAC&R markets expect range sales the our and financial related progress we long-term XX Overall, shows to expecting turn X% We're in 'XX sales grow outlook, to targets. data growth pleased to XXXX product some slightly recovery divestitures Performance to to outlook. of lower for to further company we've Technologies

sales Solutions segment, center Climate acquisitions. to we growth recent organic our positive and the This from grow impact data In to XX%. XX% expect both the includes

recovery flat to indoor in in growth heating our Moving air improve to a further recent year, expect from fiscal along relatively XX% cooler year. which driven refrigeration following quality This this XX% benefits by markets. and HVAC&R, be to with growing we sales acquisitions, will the also

Heat X%, in Products, the we growth expect Transfer X% range For down of year. sales a to following

XX% we Technologies, launches. Advanced program new by the growth XX% Performance expect to range, Solutions For driven in

liquid-cooled We products, impact German further expect sales divestitures by decline driven the a of attrition in the in of business. nonstrategic and remaining

offset by be will off-highway in business the air-cooled but markets. by also Our power will targeted that generation growth divestitures, be impacted and strategic

Overall, with in lower our we're in margin. on and long-term strategy but EBITDA consistent slightly sales is this Technologies, improvement planning Performance dollars significant and expect

X, Before products Heat moving Products and Effective will our going Coatings going organizational to within we'll report Coatings announce that forward. the Solutions, to Products Climate to I'd outlook, Group we our Transfer sales April impact earnings like reporting change sales an forward. moved

The Technologies and results. financial by the the reported within Previously, managed impact Solutions. will to Advanced segment be Performance Coatings minimal was

sales In for our were Coatings in fiscal 'XX, terms million. business of $XX revenue

Now outlook. earnings our moving to

be a expect range $XXX We fiscal would to the million another Using $XXX to adjusted in year range nearly the rapid in million. 'XX earnings the XX% growth. EBITDA and increase midpoint result of of of

fiscal In good in year and cash level addition, flow a we we'll free cash generate 'XX. of similar another anticipate of expect flow

part of spending anticipate prior outlook, fiscal flow cash the 'XX line we to our capital year. in with be As

EPS relatively the complex we'd guidance. like to some provide for purchase Given accounting our acquisitions,

release. a in and expecting accounting acquisition, outlook we're the for treatment our and purchase typical noncash current of for amortization items, Springfield a values, adjustment Scott which asset will part all EPS higher doing on be result adjusted to depreciation accounting the Springfield. of the Based expense. in are the appendices the As note we're interest key summarized and attached $X.XX. the expense, from Scott assumptions in presentation range for This and taxes and expense, impacts reflects of to press $X.XX depreciation assumptions that Please this acquisition including these the amortization our to

plan available to pleased we're to year. at year. hold event will with To the wrap targets and the demonstrated up, the be towards our fiscal We information upcoming that fourth the additional look event and our results headquarters forward quarter We've on Investor from extremely and fiscal this longer-term an clearly Day financial momentum and year soon. later Analyst

Neil that, I With and questions. your take will

Operator

with Our [Operator Securities. Instructions] question CJS is Chris Moore first from

Christopher Moore

could All centers. a we further data right. little Maybe talk start just bit to on

you have think, point As on I all this time, air-cooled side. discussed of the revenues in guys, at current

the about cooling months, chip efforts, the On say, XX the development both would have over liquid bit ongoing where that direct front, next, you immersion to cooling cooling. the in you sometime you little and talk 'XX? milestones XX a Can critical put calendar to

Neil Brinker

have standard product of that. augment support Springfield Yes. has now the that centers, that with around and question, seen for cooling, industry for This in we the time been Good a certainly you growth cooling evaporative or in may not markets for Chris. and line. data some Neil. with data the but technology adds that Thanks need may center addition direct or is liquid Certainly, that cooling Scott new

And there. we're market capture getting

that's United growth by of liquid expansions we're in and So market that or capture, support significant. the by on seeing to the driven cooling. where Europe, States expansion are the That's done the not in some we've

that out can we us, for that has the so So continue share. to capacity a milestone gain building been

it's The help immersion. assets may customers having phase those the generations we milestone of data data tied single chip, at the center to be future liquid-cooling with other that And adopt TMG will technologies. acquisition -- direct know the center table is to conversations we cooling, or for phase liquid whether two our us that's where directly

that's So those conversations be to about milestone the products technologies, have future. able a have to and to

that the the launched a the believe by customers process we're of a few direct And product. we which I development, with developing in fiscal then market, milestone. And corner to that our of the around be CDU end is would right when year, with the in that for chip select adoption

with customers technologies in So that so capacity expansion, of conversations customers, services them with and our our cooling full serving we products success, the for centers to ourselves immersion over setting up future the our chip to customers. can about providing and continuing provide, we having with data most win that and terms and have then direct important

Christopher Moore

there. to helpful. X is we're to any Very sense liquid I'm another air or maybe everything think way liquids look growth is From or air the just significantly just it. coming from get in a perspective, about growth slows here. center-wise understand X for Got years talking cooling trying now? in to the it. reason just data to there if I'm as at runway going And to towards is be shifting trying mean, growth there well? Obviously, huge I

Neil Brinker

Chris, believe, both. matter We it's a of

industry cases, need cooling with liquid. liquid the also necessarily don't augments we're customers and working our in for And most in everything. watching trends the You we air see, often that

technologies. both for desire a there's So

Christopher Moore

it like in Talking what done aren't a also about Or and $XXX 'XX that organic there the and at side it of talk thoughts? that it. Got to you're the in terms Maybe million little bit at of helpful. I how forward? to last M&A time more Very a moving get obviously, on looking long 'XX, $XXX going stage? between to at level. target Can to Day, have feels of million is my you -- M&A guys Investor just kind you more know need just revenue was a about And already kind M&A one. ago. growth this

Michael Lucareli

where thought out of X.X maybe we to M&A targets have planned -- need right. see it's we Chris, you're funnel to need the we original line versus I large to think years the we Clearly, be the we of don't address Yes, Yes. down. a some as product from Mick. ago, laid didn't

found, and So and through other we a that's work lot growth margin down. definitely improvement of good areas come organically

we think firm don't I have target. a

have with We try been to pretty in guidance and I updated consistent But you provide for the will that Neil on that. fall.

of spot that right midsized smaller the for the are road us. more at I Scott the to the we size the think transactions, sweet probably in middle we're now think down of kind Springfield looking

don't financial to But need no, lot we targets. M&A large of We need our hit M&A. don't a

what pretty on. about we're selective So we being here bolt to choose

Operator

Noah with next question & Kaye from Company. is Oppenheimer Our

Noah Kaye

Maybe expectations consensus possible faster cadence? improvement Can margin Certainly, we margin divestitures can magnitude embedded both understand embedded level, happening also in is in we to considerations of than the with at if segments. ballpark it 'XX any start guide? possible? And margins. the the guide across And maybe the around a segment

Michael Lucareli

Yes. Sure. Mick. It's

go So of say, so And if putting type guidance range we're around, continuing margin. of XX.X% kind you if in where clearly, look midpoint, kind that EBITDA you the at to that's our or expect increase really call fiscal have there. or as nice year, about expect to to another XXX we've we or lift, it talked basis goal another all a Technologies points would sizable Performance that 'XX so the

we Solutions From first the side. or pretty And XX/XX year about the on again, X margin after been side, in smaller consistent in first improvement, Climate this expecting a but we've Solutions. are a Climate launching

there So plus point basis standpoint. XX more per we're is or year maybe lift from minus a a like thinking margin

From -- it's on run probably around We of side, is and last divestitures that. million on year exits, the rate. or originally $XXX divestitures announced a a million smaller product $XX divestitures million the about side, PT portion $XX the we're it's

rationalization we've so And partial impact year to got a just we have that. product ongoing efforts. Plus

Performance think line I terms product around would divestitures -- exits. in I and So probably Technologies say million on would $XXX of

Noah Kaye

clear. Extremely

to cash to I'm ask data free trying the here. center, just Before I flow. walk get to around I do wanted

to sort level cash of similar a of free commented You year-over-year. flow

a I it, you've up, got to mean, because, free the midpoint if understand looks call us about cash what million at help And walk be $XX-plus CapEx EBITDA flow year-over-year. Just the check is and so bit math, should feel free or especially higher and interest keeping to higher free like $XX level. million cash flow my expense, seems little tax, grow, potentially

So free be a what help cash going with flow on will capital the was build this year us understand Your well. as working conversion?

Michael Lucareli

question. chance that. call for be more to Yes, the thought good a good add it'd color on I

I mentioned So similar levels.

Our free few for the are just of we wouldn't or in a quite hit year. just line the drivers some up I be with goal last so beat points headwinds, is, say, The did would I'll it high to items. we is why of that cash earnings number you. meet kind want

There's that's this cash the year. be during -- will from accrued incentive year. the The payout point, comp

to incentive So higher we It's going contribution cash the be there's early a to million some be can range. flexibility. Also, payout $XX pension $XX for comp. but have in typical million

a we on little the interest plan year at higher higher bit talked about. end pension So the contribution, we

also Europe, combined all a some probably And so We cash to side. at then are in -- $XX have higher million. $XX we'll and announced restructuring the those restructuring payments from least million

from see carry and And other center impact on advances get customer of we can of then and inventory builds, at side, data kind just program on the major and/or the amount it the large that year-to-year based have data depends to cash we'll wildcard is the the potential build-out. on we an center tied times a

flow should some answers think into is to right, here, that you again, number. our model build there's clearly, cash hope that items just your beat year's or the I So timing last question. But well. your goal as of I meet

Noah Kaye

capacity to how in think, understood year. make prepared commented it's capacity of we bring Neil, vertical. end, could just One, in probably doubling a the about center comment I organic across to revenue center you And how of about at versus terms to we it 'XX. M&A think of this around the you more fiscal think the that the certainly, at growth sure last to where revenue business? ended of I Comprehensively, center if now want And yes. be data where you in than maybe in doubling data look midpoint think just the year, versus we Because remarks data

Neil Brinker

up we capacity Scott the the through additional facility that that acquisition. press through space. in added where expansion additional a multiple of is We put facilities We've release an $X for right. set the market and in Part for building acquired an for inorganic Noah. plants that's Springfield adding out strategy our equipment growth, Yes, Bradford, capacity for long-term U.K. to have out EMEA which billion, specific example, for dedicated the intention of strategy helps with us of

Michael Lucareli

too. just this growth we growth, about organic -- strong was about year year. to XX% We year, question XX%, we that the so year. Yes, up wrapped talked the XX% closed another And last

There's organic strong. that, probably really right we've we Within XX% a growth range. to have Clearly, synergies since it. acquired the in of how kind Springfield, look bit the Scott look commercial at be now, we to little XX%

then acquisition. of But only splitting we're inorganic. on the organic hairs growth XX%, modeling kind is now, coming a I think say from So safe organic and XX% to or Scott what's it's balance about for Springfield the

Operator

is question next Matt Our Summerville with from Davidson. D.A.

Matt Summerville

questions. of couple A

customer. So Neil, through be you think, I with customers? you'd discussions. hyperscale you've potentially to some where you've SSM, past, ongoing another as additional curious the added adding having I'd stand hyperscale been indicated in

finding that days, cooling update that not maybe customer realize relationship the finding cross-selling customer there's I and that then and an technology cultivation whether provides base their your you're SSM in core that base. technology between So cooling existing your on opportunity and or indeed early

Neil Brinker

Yes. Great question.

Thank For is This sure, Neil. Matt. you.

quality the that difficult of how large right pass through that how the have And for audits, very doubt. safety of seen win do they they a terms that respect have suppliers. the pick to without I to process stringent you and It's a lot We hyperscaler. to go audits opportunity really in a have

for acquired -- as the already And audits, for us already opportunities when supplier, a the had other of the and pass on we Springfield, qualified Airedale side. accelerated certified cross-selling had which they they Scott on those side been it

products. already relationship with accepted quickly adopted it other be you can Scott Springfield, really because how customers have with on hyperscaler moves they So by acquiring that the and

has that, of we're certainly, of process we'll opportunities, in take some been the and advantage there So cross-selling having those and conversations.

meet facilities, got advancing we yes, that invested [indiscernible] into, we've us been conversations. So very could CapEx The relative to thing we've other tests stringent help state-of-the-art where run are best-in-class really the and is able we their to hypers, requirements. labs that's

of that we've So public continues impressed being to with conversations facilities able that X our to outside and been in advance. the are continue been they've bring to hyperscalers the -- about, the it

our So with conversations at we're very because feel the labs. comfortable I with other where of

Matt Summerville

And earlier Got just understand, sure the with feel to, or that this an something can imagine, would time to expansion, I make demand year there, I to from, it. data you'll from what if center to roughly And Day, I after of a current over that question, then $X have respect -- do don't assumed $X feel million of know have call wave address if the business. billion is capability but will frame comment type maybe capacity this this is you billion Analyst you fiscal have scale basically you your now at you number? $XXX it,

Neil Brinker

good a it's question. Yes,

is you're we're strategic the right, looking capacity big at the horizon. So in strategic the But that horizon, about piece. just always not plan expansion capacity think in that's And expansion, plan we've technologies it's acquired. how and our we also our terms best it's a years of Matt,

CAGR that needed public knew expansion been with do we that about, to So very support capacity. we've that to the we XX%

immersion right new acquisition countries And Scott And through as factories for It's right factories. in of evaporative as the then like places technologies more -- in on well Springfield. the right cooling it's just the the cooling not delivery.

a data number term. to larger So center terms approach can we long a multipronged how in get of

Matt Summerville

want little move about we And thinking comment the first Any could cadence color the year? quarterly if be how thinking or how provide then half? you through should would Mick, anything you out there be helpful. can quarterly a you to about to versus should think it. of I half would as second kind numbers point we about as there Is bit, be unusual, guess, detailed we Got we model maybe, earnings how

Michael Lucareli

the everybody to normal we to Yes, to pricing wins that, -- we out. probably say, kind big year, as a for it's Last had really but Matt. said start look a I our is expectation Modine I'd at Thanks, typical year. and it I'd Yes. Yes. year like some year, of now, helping say

I expect we each think, quarter. it to build clearly,

and So program driven revenue would be on generally, going be we our QX want to strongest, -- and that's mainly launches.

I the from in a And then QX quarter. QX of So our would -- would of and the there, top say a our the be quarter then is strongest and December line, QX be, little would building. QX, lowest probably

bit kind a ramp pointed Why a Performance Christmas, shutdowns of dip, little QX, side that's a out So of around I December and and large traditional Year. it's Thanksgiving, Technology of New up, do QX on customers plant the quarter, lot seasonality. the OE pretty

Matt, a seasonal the in early build call said, that with would little other I year, revenue So there. a out dramatic, in shutdown of nothing of a that kind point than, it, built bit QX

Operator

next Our Funds. Sponheimer from is question Brian Gabelli with

Brian Sponheimer

But this a I'm as of business the as from maybe how ago played revenues for a Congratulations of your the auto on today. a into -- maybe think segment, you're of a great much tax taking been bump remains that we that fiscal year? it's back, in had kind worth look sale I looking year. Obviously, market expectations, along role look with some dynamics forward, the with year

Michael Lucareli

In million range, Yes. the in $XXX Brian. automotive is probably total,

Brian Sponheimer

that to I And portion it much, what too of portion want -- but going don't be so was nitpick were to of the what potentially to? that supplier to Tier bought you X going sell by

Michael Lucareli

the is just and to to $XXX should clarify the million, million left Yes. what's between on million $XXX process, was when was on say $XXX Yes, $XXX And I -- over sale probably launched $XXX $XXX million million. that. that we so that million,

other transparent. And million $XXX $XXX not out pretty only thing point I then was to million, the it to but is the want we from when started, we are

The margin. low clearly remaining the have, it's EBITDA of results. team Modine's single-digit amount said hard, we worked a we think I has driver been really

a it's on standpoint, from to we're achieve our going of targets still putting an and goals But to So helping financial and absolute us not it's a strategically, versus drain. capital margin area into. an ago focus couple it's years

Brian Sponheimer

was. you this not strategic it how clearly, But my it's answered next once piece. question as the think to is I No, drag

named kind a look goes this a $XX some going to of Or bits question CapEx. like of as new, CapEx and of -- forward? and this does call million few just in more next a obviously, perspective, From expand you of Next the named of you years? there the pieces whether you it, are Is as order what you dollar rate profile that the run think a rate for that far facility to capacity. that purchased kind run more

Michael Lucareli

Yes.

year. high -- the which what's at I there, in on bit to end -- little be this said see I probably I But line. like at bit I could end. think bar the flow, sure little levels I Brian, make is the a important. it wanted to on the similar I on high a a cash that's going and going set think

Technology. So normal. for had $XX know I a I'd you million if of I probably years say the is dollar million, this, around of you point like value is what it's And probably And $XX a so I'd in million Solutions now, Climate say $XX to couple were about -- when a were we to thing and out, we performance a probably Performance more trying $XX million sell $XX been was to into would million other $XX all million auto, it year was going million or and year, last going we It's into -- back $XX and flipped. technologies. go or nearly

side. So targeted the on we're Performance very Technology

on $XX and we lot or a then the climate doing it's And will million down. go down have back been to discussion, way expansion. of been earlier so that So the

the to then did as end property Springfield, support plant expansion couple we a soon of the bought expand. growth. year, also purchases last We in of larger Scott needed we -- year additional As purchase data U.K. center and the a the at to

that hopefully, we'll the well, there's don't I say So year the an -- because growth. been I data this is But last accelerated think probably an keep to growth. accelerated CapEx center support

Brian Sponheimer

Okay. me. Yes, for certainly. one Last

far calls. for as governments an few supported that of source European Heat a growth? as for mentioned are spoken you've I market one a to pump want continues well that bottoming that that looking to on past that You as European of the to can before Transfer, recall, What is in being far Because as softness this a right? heat market become be area as you grow, they by that's as

Michael Lucareli

quick market took for pump decline. say, exponential were sales growth. heat about add the if that sales you one pump in can. side, big pump And off million year, we drivers expect when I'll of 'XX, 'XX, had Last in to wants heat the a you and its our fiscal down, -- $XX last give heat were that was really and Yes. answer did fiscal and QX -- anything, the actually talked we on sales the Neil fiscal HTP about

And as or seen everybody what base. only orders changed finished the is permits not customer Europe, our but the we've inventory legislation across in is goods watching

and that new year, is Neil the And down. are addition I into planning are it for, what to expecting fiscal remain and finished heading goods we're system. the So watch the in market going in how we'll much

but a clearly clearly, spending bit little I'd say at delayed. again, that sort less it's So area, we $XX plans -- now, but been take This have pared in going million, out. going about any while is a We're growth to to the to already resources and we itself back capital started base. small a

Anything Neil? you to want add,

Neil Brinker

clear. I that's think

Operator

Summerville follow-up next with question D.A. a is, Davidson. Matt from Our

Matt Summerville

Yes.

Just follow-up. a quick

any XX% is in so, you for? what's assumption assuming reasonable for And Just year, be to X this your X organic, And year a data what if year Modine, for liquid? from liquid center a so the for a contribution assumption expectation would liquid for your clarify, revenue or reasonable if are expectation this business business? at

Neil Brinker

not it's not include -- all extent, do Matt. Yes. alone. those any To liquid, It's numbers

Matt Summerville

market business you think, see to the and start materialize there's a for to this year? how fiscal developing, Do cadence on is it. this liquid based Modine and optionality conversations the Got

Neil Brinker

Yes. It's from to what all on we're is perspective, dependent chip believe, the is the -- on the quickest directly I in that the the my market liquid side, seeing, in to tied CDU. which direct adoption Matt,

that testing see true over this year. users, there's continue from that accelerate So demand and for our as a our I develop customers with development to expect customers if we our would would end our their we fiscal and

as it of the If year end calendar the validation. where in If would we the have I in to market lags, market to today, we're well at in be as by the expect CDUs and prototyping delayed. would it's expect

have the talking to to it's that we're So not other it's you is direct makes we once the products chip growing -- to the all about a -- technologies that key convert the is that cross-selling support, piece of if XX%, at Matt. sense,

Matt Summerville

leftover businesses. how just Yes, pricing of in would that to want the 'XX go-forward it seem timing across goodness in realized to some in I about business does. a be kind fiscal to And still PT, -- then standpoint. things I work pricing imagine there's from I just the given talk strategy

this cadence? of or guess, capture you've wrong if on practice where expect one, place, is So of that put a of on Neil, a And a of in business price second, where points normal X point kind I'm a correct that. commercial should business X the I we kind climate then side, me in or couple go-forward annual with

Neil Brinker

experts you We're we that's products. of constantly is Yes, one great our it We're to Modine when as -- market making of transfer And good we're operate in a the markets differently, pricing, and term, can question. a in sure those excellence markets. the And comes about so serve it many dynamics lot in T&Cs, heat thermal relevant where know, especially so Matt, things is. we're we price whatever all commercial diversified. we're and

and of at minimum is -- Climate stay there's because pricing a and the We up make OEMs that lot Solutions it side, typically a sure can you're inflation. our some current On distribution, correct. keeps with it's

expansion lift margin on and we've feel activity, that And through on certainly got the we cleanup, public call. about there's that Technology confident terms heavy that's in the Performance of were where in why then the we the side,

Michael Lucareli

data want about -- do handlers, is I'd reminder, a and to organic really on growth about that so was and I XX% But add announced the center, center think, how comment which we commercial it as Springfield, just evenly split, XX% that's we air Scott analysts, it's when deal, inorganic one data good. I the the for we split out. it sure as make

we've doing a and just side you're And want benefiting. center side. data obviously, data your Springfield rapid I remind was the Springfield. center everyone, is rate HVAC&R a Part But to that So the really from is modeling. on growth Scott also benefiting got commercial split as of between Scott

Operator

this Kathy I no time. further over at am would now showing I conference questions like Powers. to to the turn back

Kathy Powers

and morning. everyone the Thank you, on line Terry, joining us for thanks to this

call great in You'll We website have Thanks. hope our hours. be of access you the the a all about able day. replay to X through

Operator

you. This today's will conclude Thank conference.

disconnect this thank may lines your you at You your time, and participation. for

Modine Manufacturing (MOD) 22 May 242024 Q4 Earnings call transcript