MOD - Earnings call transcript Q1 2025 | Modine Manufacturing Company

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Operator

Good morning, ladies and gentlemen, and welcome to Modine's First Quarter Fiscal 2025 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

Hello, and good morning. call Modine's conference XXXX Quarter our Results. to to First discuss Fiscal Welcome Neil and Chief our and joined Brinker, I'm by President our Vice Mick Executive Chief President Officer. and Financial Lucareli, Officer; Executive

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

Neil Brinker

Kathy, are quarter, including strong in segment. investments top that you, to the our this good our contributing pleased line made Solutions growth It's I'm report start our in last to clear Thank we've a made year Climate our business morning, new and the everyone. to fiscal acquisitions strategic year.

delivering a on their In addition, the executing Both are our quarter, increase segments point a prior Performance margin reported year. from strategic Technologies great XX%, XXX-basis over a business objectives. gross

demonstrating financial we our of are targets are we results can at XXXX earnings. Investor and we margins Our rapidly our and grow our Day, outlined ahead that

segment. high-level our invest like of and each result updates some But first, quarter in favorable diversified financial portfolio, our year shift to outlook. of businesses. the creating first a our is prioritize an XX/XX update best-performing This will to a as on results mix in deployment successful across I'd over go we full our and our provide Mick provide business

Please turn to X. Slide

benefiting acquisitions up year. America. Organic segment our center to In last and Scott doubled was data year. by Solutions Springfield compared the the had North from Our business nearly in sales center an prior primarily particular, data outstanding driven growth XXX%, quarter, Climate Napps

year. North growth to center last capacity As America coming much of for additional data this future I quarter, mentioned with support our and that capacity in we products Europe, later available adding are online

the is a data incorporate prepare high-performance mix can in minimizing liquid energy need products. liquid data and consumption. there techniques approach, of solutions achieve air that optimal and of for cooling air both growth hybrid As By computing, a cooling efficiency, centers combining increased centers for an hybrid while

developing As I are integrating cooling, previously while facilitate products. distribution or with other mentioned, will our we CDU, cooling internally that unit, a seamlessly direct-to-chip

and launch. We are completing product the and base test moving production this for towards

expect our be the first quarter fiscal to a and be America followed delivered by to colocation shipments fourth in strategic We this shipments customers. Europe expect to to North during colocation customer key

will well CDU as our at trade Our shows on fall. as September Day Investor this in industry at display be

we as outlook are segment of agriculture lowering the and as to The Slide and in XX% EBITDA Mick Performance equipment of Please EBITDA Performance automotive market. well X. cover the XX%. the will with in had volumes portions certain margin outstanding adjusted Technologies due an expected markets quarter, increase construction our and a segment specifics, turn Technologies to sales also the an but lower

peak of the been segment. Earlier systems and the offset Technologies is mix product as these continues the in an product this products. evolving commercial, of this X over strong. specifically have The Along at annual with designed sales to marketed to the of of announced wins able for team rate be important this program modules climate introduction thermal EV of factors off-highway with system shift margin Performance quarter, we is the electric products month, strategic higher-than-expected However, to some contributing launch one This market the business improvement to GenSet declines the run significant $XX our the under our a advanced vehicles booked and EVantage other integrates specialty and cabin brand, fully million with equating projected with system. other management revenue.

first was in which Europe, awards major these the footprint will be out customer with of of bus launched next our program year. One a expanded Italian

projecting we more in are example highly great Technologies away some of next and to the leverage from is few year foster the or by also per shift We has strategic us are businesses. expertise years. mission-critical of our our continuing solutions. cost last This we legacy business thermal XX% over to develop grow new deep were management to and reduce identify Performance year, by planned engineered revenue opportunities how completed this changed divestitures allowing to our influenced a as XX/XX resources our culture, to

look continue to achieve best to where accelerate to way We for evaluate possible. will and the opportunities these goals

we Now that I'm provide and our will options to than quarter. the we can we've and Day transformation to our insights forward our over what's our this targets. With the I'll and at looking business, best September we've that, evolve better I'm which with updated improved our additional performance some time turn and the before portfolio. very our call to is progress more have to Investor event, financial had do Mick. pleased profitability where the take of on headquarters, in

Michael Lucareli

a good everyone. X EBITDA and turn over is XX% margin increase XX%. Please Thanks, to Solutions morning, Climate to off to strong Slide results. a segment start a in and review Neil, the with adjusted

along quarter $X Springfield commercial customers or driving earnings point the residential with a resulting XXX% hyperscale strong to sales improvement markets. Overall, Key business. HVAC&R pump Solutions and shift margin to lower demand market this a or the $XX back increased to from adjusted improved certain year. by down in from data very to XXX Our an businesses. we're pay to The sales an center sales primarily from driven center in XX.X%. our acquired X% other decline growth Climate with signs European heating related including Scott $XX revenue conversion, Data acquired continues encouraging pleased The product XX% million, or this million. improved demand with off strong mix. drop sales transfer customers bounced heavy sales and market revenue million, basis in for significant and were EBITDA sales heat focus strong the and market resource grew

our remains center the quarterly increase. at of continuing including mix improvements, a positive heart discipline with margin margin sales meaningful XX/XX Our a to data drive impact, earnings

In is established, positive acquisitions further supporting or are our for we addition, goals and which Solutions. the the meeting outlook momentum exceeding Climate

Revenue Please improvement expectations, turn was off-highway to to point also off the fiscal German along XX%, Slide year in adjusted with lower increase divestitures, started very XX% XXX line EBITDA sales with and X. with a adjusted Performance which by driven a Technologies EBITDA customers. basis well primarily the margin. and our decreased in automotive in

divestitures Technologies is sales decreased rates, impact model improving Performance our to XX/XX margins. million on X%. $XX negative and and the of earnings FX leveraging Excluding focus

exit continues team targeted While the may be sales grow other or certain down, and businesses lower-margin flat line areas. the to

Advanced systems of sales. were by across EV to $XX markets. vehicle offset partially or million, decreased the Solutions with sales Liquid- and due Application and off-highway auto higher to or EV lower specialty customers, vehicle by divestitures by along higher commercial Cooled auto, XX% million, $X primarily commercial sales driven lower demand end XX% sales market

were impact $X agriculture and with by X% lower the volumes Application from markets, sales the or driven Air-Cooled construction along mostly in million year's Lastly, by last lower divestitures.

transformation, into EBITDA for basis for high order in that primary drove XX.X% earnings strong and partially said quarter. by focus were the products sales margin the improvement, and conversion the level offset margin. a pleased Technologies go a intake items I'm resulting our Performance with in We Performance is that XXX GenSet. These Technologies very of not point revenue in

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

by First quarter sales acquisitions X%, growth and million in partially XX/XX divestitures Performance driven offset Technologies. organic and Climate increased planned $XX Solutions, by initiatives of in

Excluding FX organic rates, the increased impact and X%. divestitures of acquisitions, sales

mix. to The the was margin last from basis improvement point a a years, strategic improvement XX/XX shift significantly initiatives Our XX.X%. X over has gross with our margin in and benefiting XXX higher continued business

but increased our $XX tied line than with million, change the SG&A larger in which SG&A amortization the acquired incremental normal, and outlook. to intangible expense The acquired and includes assets. is businesses SG&A expectations in

salary our we addition, expenses In compensation higher recorded base businesses. incentive in and

of from with quarter increase quarter XX% extremely a represents again the was EBITDA point XX.X%, or now improvement of quarter, was year-over-year XX% very on an higher prior $X.X, right path This the consecutive EBITDA $XX an pleased margin XXX the share for in basis exceptional The earnings confirms Adjusted million. year. than resulting We're with prior journey. another Adjusted strong XX/XX was adjusted tenth the this year. per margin EBITDA we're improvement. margin that

ratio restructuring free in in anticipate operating compensation. earnings, year integration Now remains moving support was million $XXX year-end. of debt turn balance acquisition than X.X. driven million This first position of of partially Net flow cash for prior sheet We The organic great $XX We initiatives. costs was resulted flow Slide payments a another also and Please of cash good million quarter. more the offset million flow. the leverage in fiscal we and growth This quarter. XX. cash to Europe and the primarily during cash by primarily remain higher the CapEx incentive paid $XX by payments, to in This $X generated free included to metrics. lower and a of strong,

we're 'XX let's pleased Now to fiscal outlook EPS for sales, outlook. earnings our Slide I'm raising fiscal for XX adjusted report and to turn 'XX. our

company transfer data product sales large X% which by this initial results segment, center sales XX% the increase and adjustments Solutions substantial exceeded groups. to heat to increase XX%. adjustments In Climate of quarter some our center from we expect sales a partially first reflects range guidance products. few with to XX%. grow XX% by is which of improved outlook a expectations, raising along to our We our outlook now to and HVAC&R revenue Our sales total an a XX%, offset a our data growth across improved in is We're have to driven the projections,

we X% to down Within XX% anticipate XX%. the strong with be Technologies, range, transfer the Performance in be growth adjusting in Solutions by XX% up key program HVAC&R, range products, Advanced to now improvements see XX% adjusting we but flat HTP continue the launches. to in sales fiscal we're to for new driven of will later to year. Moving And growth, that are be to to

We cool attrition continue a and driven by products of to businesses. liquid German impact sales divestitures expect nonstrategic further for in remaining decline of the the

to cool the continues sales of and GenSet air business generation higher power market. Our products see

ag from and experienced orders also markets. reduction in the in we've However, construction customers a

As to a in anticipate now flat sales that down this group will product XX%. result, we be

year, lower sales As and margin fiscal in this with but consistent 'XX. EBITDA beginning of I slightly expect the anticipating Technologies, Performance and strategy is our long-term the during discussed at dollars fiscal in we're improvement

to our earnings moving Now outlook.

on of adjusted 'XX fiscal $XXX our range EBITDA While year, to the based fiscal the it's in early earnings now of first we're raising expect to outlook, be We the the in strength $XXX mostly million quarter. million.

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

our amortization start and up, of previous part assumptions our anticipate from press reflects the the to be we are prior of the As to spending quarter, from EPS with fiscal and is off expecting in guidance. in the from year. We're and These fiscal to pleased we're line impact expense, be year. an which a appendices release. To acquisition interest taxes and Springfield. the key also strong cash the 'XX wrap very of flow to adjusted assumptions the presentation summarized depreciation $X.XX attached we're the including the results first Scott range this to with expense, capital $X.XX, This for outlook, the increase in to

and at you register, but Relations Investor As our is There's Analyst if a September are contact time soon. closing attending. in to still the Please window reminder, Investor team holding we're and headquarters. the on XXth interested Day our Kathy an of

take and questions. I will Neil that, With your

Operator

question first is & Our Noah with from line Kaye Instructions] [Operator Oppenheimer the of Company.

Noah Kaye

we data for there have the phenomenal to center pretty guess with start was a because results. I quarter

here. we understand year move trying as Just to trends the the throughout

got expansions half. benefit the start in in works the they'll to capacity back You've

You raised the year full guidance.

in Just would the going here versus is years. XQ it of stronger imply results prior off XQ, seasonally somewhat

got anything back timing? some would additional the it whether Or half? as just specific growth order it understand levers like conservatism? large move into revenue Because you've you is seem that's really to trying to Just

Michael Lucareli

pipeline for year, up our Thanks by Mick. and It's incoming It's we'll half be late the fall. that the I'd latter. firm programs of really able -- for necessarily of still conservatism as second Yes. the much And probably to say QX, the question. the especially opportunities. as not we have

be well, QX, transition most orders. the so, of forecast secured of to So again, is based able the quarter out to And balance are we'll for guidance our purchase part or firm majority those of of year, to QX many biggest of within and as funnel, trying orders. then firm probably us we we're another issue how provide and continue for purchase that on the to up look

Noah Kaye

that just easier about for through how we the of industry? what broadly, outlook the quarter of growth been a follow your much market? I'll of wondering moving Great. of half to the on products. outlook offline. of Okay. transfer quarter-to-date versus comps, have reduction North look and some if up I heat full pumps relative weakness can parse positive broader the ask resi trends sort in out So drag heat But to year? was in through kind obviously year. as of in And the want the really the the on would create the you prior quite the in did back America, especially looking We get they commercial HVAC at

Michael Lucareli

Mick again. it's Yes,

X drop pump lower the tied First, quarters revenue was heat pump the sales. -- to than more of heat

we'll as the specifically again, pumps. the have half easier second said, to start in tied year of the you to So heat comps

vast yes, aside drop first, of sales pump the So on majority European revenue side. the heat

The of targeted the test to other the XX/XX. internally market, other as exit we've -- team just business tied think use And really the the I to we we areas certain then to -- has areas term of testing are and continuing that have been areas there is price elasticity. kind got we're are

balance sorting the And out so the they're market. still other of

Noah Kaye

factor actually, in for Can I the certainly before just trends products XX/XX can year. a transfer you last yielding a -- of I played just second, heat on some clarify that think others, within point because

lot done as year. was this optimization of impression went you a basically the Our would be into

guidance Is this a So or 'XX. could the how big more? for be that exits? a it revenue we strategic to headwind point of Is kind as X look of

Neil Brinker

Noah, in work question. We're this business. XX/XX execution this Good to continuing Neil. Yes. is through

dozens markets we have as that we So we do of that, serve.

of thousands have we to produce also We that SKUs markets. these serve

in the continue of lift the over continue the of out of phase. year. to the a done. to be of going has the business had last been improvement to right, they're go this. But phase you it they'll these guess in markets estimate middle evaluation months, settle rest throughout the take through the an we're majority They've some tremendous to would additional this XX it second So -- to you're give I as have of and of the

Noah Kaye

quarter. the take you I'll in September. Well, offline. right. nice All See Really rest

Operator

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

Lee Jagoda

this Jagoda, It's actually Lee for Chris morning.

So I guess just following up on that last question.

$XXX the to year. of about you'd you of think I of each using In for terms give rationalizations, previously guess, starters said we guidance, fiscal number I you that rationalization target sort as look any Can revenue million us 'XX?

Michael Lucareli

of are before last couple at we X -- We've components going the primarily And the over space. for I divestitures, automotive announced the in the X years, we Neil, back, Yes. pretty when in guess, beginning consistent to then think divestiture, had originally million. we've and point, I or automotive to Neil $XXX $XXX been came done million that

allows just depend today, so primarily it situation $XXX strategically or year $XXX It in like done And on goal be we've it done minus, the That we to on larger that's could plus would think pieces to market to the we've type think or really can look we business, And done us move the million be continue and million in about targeted. away transactions. what -- average, as do. about from. be smaller area a the we and

Lee Jagoda

obviously really the said, year. in QX the it quarterly raise year relates little guidance being That see then is guys of and versus the sort the I by the to guidance, for our beat And as so quarter raised then model, than it's guidance out constructive to Okay. you early you less guess, a performance.

QX dynamic, that as color QX, QX can beyond the of just out that cadence us numbers? given give look the to you of any So QX, you and kind

Michael Lucareli

Yes. Yes.

little bit well, additional comments helps and centers. automotive few about a so and guidance clearly out. ahead sales. auto EV talked We be stronger So a side in than we a if softness, ag strong anticipated QX. where clearly that. -- and offsetting really data thought just we of rolling tailwind a construction We're had in the bit even Partially little on Yes, as on it below we'd the components

of roll-through data positive Technologies. a center, on probably the revenue Climate from standpoint, Performance pullback then in of So the this a bit Solutions in time. when at a we kind balance little the of few consistent at areas relatively And look year,

rate a our it's calendar to and data for ago, evaluate 'XX, of funnel did Solutions, Technologies I year bit steady run of in in a OEs. to of is we good. always from bit. December out We'll back Seasonally, minute the kind Climate ending holiday center the we're we're March our relatively pull quarter with firm fourth expecting there up quarter at looking QX a lightest full tied shutdowns Performance fall. But which revenue now, -- QX. with continue little our off-highway, is in X, the our As that's a dip with a mention this

So for down QX year an EBITDA Typically, from that is up pulling our our be QX. lowest QX. step Modine, QX all we would then quarter same perspective year, as kind a that little that of back of the last generally sequentially see in bit the may together from

all said, seasonal earnings right year-over-year trends whatever -- that quarters, expect improvement, So as now. and I in our despite sequential forward, last to or all see year, continue of and that said and growth we gone we trends we've margin and

helps. that hope So

Operator

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

Matt Summerville

questions. of A couple

to break $XX SSM? up had the center QX. the versus And close of million business respect data under $XX business, that the in a million contribution alone that it much is SSM you the XX% And to out of side I'm Can DC driven impression how probably did from the SSM you looks like in on last organically DC with First, year. to latter, XX%.

So that the acquisition. I'm very a I'd of you really had going have talking successes like you've a minute to with about some early on to spend follow-up.

Michael Lucareli

I'll Yes. around more some Neil Matt, it's specifically SSM. add first go and color can Mick.

about expecting year that the organic that XX% about So Springfield, on Scott of full we're we excited guidance. talked the on felt to of basis, year thing we growth about have really opportunity the were brought, book. was good about full really that in But terms for a XX% And opportunities, you're right both out customer and other Springfield and set cross-selling products. we customers Scotts order

And customer what order those capabilities really orders the Modine needed and release order of was in book. manufacturing and scale, customer in that they support terms share major a have of to investment, additional increase

So seeing Neil well add It's that, Springfield. Scott of add let really QX, about. our it's about little more color maybe ahead excited bit in what running just a going -- -- And with we're you're plans. I'll

Neil Brinker

covers a And growth. a that what the do summary, up things. we rhythm when of good scaling brought they it. skill Yes, in in our Springfield We've capability good we of marriage And data well, terms that been has globe. the across few together put that's really some center with to to that have There's that Scott Mick. addition set

between deployment right and areas, has cross-selling been books our So in order things. expansion them then and significant. a of couple our the customers capacity Scott particularly with of pretty to Springfield help the with Capital

our of and brand, technology So Scott brings which X. between majority an through is recall, had the Springfield market the a specific we Airedale alternative the you technology, as

you the from that your and have we're goods and Now seeing take into basket that you products customers, can synergies full that. of

Matt Summerville

about visibility. in your X- less Maybe a in for even a business, to business. initial there that look follow-up, mentioned Or then GenSet a it's the And What CDU then be rearview mirror the I bit center of mean more Got like organic maybe data maybe in is out subset? as in the laid 'XX? perhaps confidence of you side like $X kind talk that fiscal is to kind -- you've X-year the the billion opportunity about also of for level I ask it. can X-year talk about to you commencing or shipments in just CDU/liquid QX. And little does addition would what funnel another also expect Modine target just on quarter you growth and having your to answer

Neil Brinker

going of to the computing. And in Certainly, time. our that addition for it be Yes, we're that question. our An over on capacity able pretty market inside certainly data centers direct-to-chip strategic that's us we've about that to Matt. cooling public largest product their space, customers, high-performance rate to would so gaining is adoption comes We market closely computing. to driving work that develop best the it's them it's taking at requires depend that particularly horizon. to plan addition. an foot traction customers' been Good believe win for to the to important same the and why their and the to when high-performance customers be with And

is a big CDU there. So play

products that to it's said, we in air going a and walls. it's going you're Like of you're hybrid to the need cracks to approach chillers, lot a a these need to complement you're craws, to going where fan cases cooling, nice we need already going be And have.

cooling. evaporative to need going You're

today. to and cooling need direct with have is that. we products the then major going and that it a the You're can And distribution to component techniques of complement chip, you

more our in problems. that So we solve portfolio to it's customers product help their our one continue can

Matt Summerville

outlook this GenSets for the Neil, lastly, just then And year.

customers was look is What it from any new plus of $XXX And this and year. what prospects may Modine or late think I year? you've thought as business, if million last a like? minus, those your won

Michael Lucareli

to hit to continue be that $XXX which ramp. expect And we or expecting in on XX%. side, year, just about up numbers would Matt, so this Yes. sales, the million we're to

continue we XX%, expect type on to to rate. 'XX, and 'XX XX% grow fiscal So

product if around add the or to Neil, you anything the market? want

Neil Brinker

Yes.

they've to is out of to added and customer. capacity yes, the as mean and organization add we've So added rate to results. aligning they've product the market the we're be that that amount a And able They've needs capacity, team segmentation really growing what group tremendous credit has taking I and XX/XX that expand. team go a done Through an to that dedicated the at able job. that's is they as been shipping expand to an And done. rate. showing at because fast the around orders second amazing

we're So in and to on going continue to dial focused X, captured we've big the and X. stay

Operator

of Our next Riley the Sinderen line question Securities. is Van B. from Jeffrey with

Jeff Van Sinderen

terrific Let progress. me congratulations add my on

you're You mentioned for manufacturing the new adding capacity data centers.

Just wondering, can you like? tell us some a of little bit that capacity you're needed undertaking? for that capacity what the is projects the of looks new ramp-up And

Neil Brinker

So in the X market next putting over for there out we've we that is place capacity we're line that the years. suggested that in the put CAGR

So it of some products, particularly at manufacture that here aligned for use an States Modine existing we the can CDU. And the in new that. tracks the with United and it's existing capacity We'll an facility.

Michael Lucareli

would I back. going reassessment to continued just it's that add and a been Yes.

expectation were our we year last we raised multiple for and beginning times. revenue, where think it of I

almost and triple year the add you was And growth started we we high year finished raised it double, rate, we think again. a really market, and this double then year, then thought the we I the what the acquisitions.

sales were get the looking market from side, president the and when the to continue then together, current at with just Neil, our group CFO run capacity are in, we expand. we rate, So always

trying ahead. step So a stay to we're

Jeff Van Sinderen

wondering thoughts on just granular around couple But of gross here mix I some did comments kind know through that. bit there? quarters? business Okay. maybe wanted get impact Great. little over quarterly And progression. on of Any the margin next the then go a I you to just

Michael Lucareli

a margin QX QX, From gross QX. a a maybe standpoint, not little from a just in a in lower gross amount of margin and bit lot small standpoint movement,

in things of about the settlements. to is QX, of pricing and $X cancellation want I had we Performance Technologies commercial for million One to mention $X million

mix, with margin in a we So point But everything to from, is we or your the growth good stable the of of short on level kind hit QX. simplification of That talk and later the would bit of but year. and XX/XX that margins onetime to in could away mix had happening a gross about long company, this was work tied certain moving planned that stable water the a time a we a relatively little some answer the at kind might areas under thought that on divesting gross volume. year, change, benefit we more the are that the have shift a product else dip relatively was from

other hopefully, through But below than in areas the reducing our areas what are that, be want we the their growing that is be coming we're we to to the at accretive the at. where are we under or to margin is market, margins want

certainly up. helping profit that's So

Jeff Van Sinderen

Do you're EBITDA could Or a for Analyst that then Okay. is target, we And Since one prior new something hitting contemplating? those wait margin target in. I getting for? should kind Great. have are last one, targets. it if you Day that squeeze you're you close or the of around gyrating

Michael Lucareli

good. won't Investor realized, That's lead, target. right? Yes. We new But answer Yes. I we'll our share Thank X-year the today. give but for you you at the yes, Day,

phase, planning set we're ending period to new a and us overdriving financial first X-year the of with the set raise bar the our goals obviously, first a on in So time fiscal achieving 'XX. for

Operator

is question the next from of Our line with Drab William Brian Blair.

Brian Drab

As for hear certainly lot rate you would what comment -- growth helpful questions to helpful me of getting initiating business? this the some this to listening. on be wanted that around that It underlying just expected are is after for might be for the this. yesterday, are I'm I a I

in this extent did XX/XX So cuts. to talk know but the just because the if about you you components guidance dollars, acquisitions, revenue, in the just million wondering on some about call, components, could was of and that $XXX $XXX conference increase last terms I the divested million. And of I I then there's know even

I like auto the going the think million, got this full not million, got then X to acquisition that I the and that And think, seems divestitures growing divestitures be a there's to And to I those given cuts revenue, you've -- in there, that you you're year have and don't Scott $XXX then timing know. of you are when business that about XX/XX you're of -- $XX $XX million made year, rapidly. was although

inferred it's a fiscal think that year. this I it's million around $XX headwind of for

headwind that so then got tailwind. to is of million kind million a $XXX Scott $XXX you in you've And and gets

And I ballpark? of X% we I guidance, out to of about growth it organic to all any that. And revenue and mean of comments midpoint kind on on curious really X% X growth. so like revenue is is think nets the how the like in should think that your

Michael Lucareli

good a And you're I And is transformation. Modine's question. a lot with That's heart and our of right? it. transformation, this, hitting the say XX/XX complexity Yes. level some would of there of

you think add XX/XX can we and maturity. We other any right when about at separate we're XX/XX on right talk maturity, comments this. first now But where launched Climate the in a I head, in to Solutions. our we Neil lot hit

tip was centers that. spear fact, In of growing data the funding that,

organic So XX%. bit said headwinds now. for Climate But in digits, be a Solutions talked a XX% we've can some little a We double HTP. is growth, phase growth mostly in about while to right

obviously, little put ventilation, XX% air Climate was heating growing. growth type M&A, organic center, hyper-growth. but quarter, more will indoor and a with bit then, quality, mature for of we've that Solutions, be market, And XX% some commercial a obviously, This kind in data

just can margin see is full shrink that and really year And balance how divest certain corporate, Performance managing happening. much you phenomenal. is top change in after continuing while we that, pretty and out, business to the growth this line the earnings Technologies almost launched the the To areas, a

under flat. referenced beginning Performance and are period, X on you would could other earnings. of that that, over So things the and years our generation, And electrification, bets we we've long divestitures the be the we see said while areas systems higher-margin auto -- Technologies driving a like the at business e-mobility, then power X, declining, journey,

midpoint Solutions is be blend let focus Climate guidance. think said is line single-digit line Performance of can right So we've our you I again, pause, story top the of the top of but organic-type a top not growth, we them. Yes, kind high me a line think Technology which now. that I in if

Brian Drab

thank help speed continue all Okay. to understand very get me Yes. that much No, and to and going you up that. for through

order question can think there? if potentially been give I that, some any last now, talk a but talked about soft, -- us of that's terms seeing July of are what you're stabilizing, heat terms Can you X guess. pump in about in Just I has that it maybe to you is? seeing that anything book-to-bill, signs -- in the you don't In seeing in even which stability rates you for of maybe confidence business, you're or

Neil Brinker

heap. If go though your the to think good Yes, good want a back question because to question. I on I original it's question

we would then growth. Mick we we And behind just general, that's the and Technologies Solutions, where high say in what expecting a align Performance have We back level Performance look versus through complexity work we you -- a high of described focused and not there's Climate in general And a growth diversified Climate Solutions go industrial. in XX/XX as we're we're there. Technologies area at in

our we But if with try market-facing to a you deeper, go what revenues. in you to give is verticals do those X level

for in areas evolve see from to that systems. are you right the margin to grow the So and areas growing to us components to we're company expand can the that

the data So breakdown ATS. that's in air, of you HVAC, liquid, see center why

see So Technologies rate. where see taking you call growth say we're is why slightly beyond decline be there. in when growth you That in a our Underneath is product areas in areas XX/XX. the then the deliberately actions an we Revenue group, time flat. or you will EVantage in through see the percentages growing. Performance And over And the market are we of which GenSet general, it, ATS. out growth

-- can at more kind mix of see theme underneath can the a general happening shift versus the level the micro you you of of revenue segments. So X

I important think understand. that's for to people

Relative pump to next was heat don't expect driven we year, demand the it by get -- maybe later even rebound relative regulatory into throughout to heat I I incentives. don't pump, environment. expect see until the and this mean to climate we -- clearly, is year

As the incentives it's essentially up, the slowed market. dried have

further expect increased. incentives increase applications then order As those the saw out, time what compliance was book which I date, we for to get closer we is the last to typically would and

a we have delay. So further

Operator

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

Brian Sponheimer

another again great on Congratulations quarter.

but just a which Analyst your waits Just I now. I'm curious Day, question, for the thoughts guess probably of

-- looking I'm thoughts use business. scope at weaponry M&A You're a Xx. is can the outside you're Clearly, you maybe of the $X company. you billion your what the and of at delevered grown. by equity about has cap environment curious grow Basically, the on to cash just generated

here. You've lot firepower got a of

Michael Lucareli

you've equity and M&A or as turn of we balance for Mick. company forth Yes. valuation the lever, strategic sheet, thought out but it's executing key really going Brian, We it, on so journey, plus didn't been some a started goals with early really ground. the our and the Thanks clearly to the have part big was and to days the necessarily along question. Yes. have

then So equity said, level low a throwing you leverage pivoted, have we're off cash, with as we lot cap. as more of the market a and relatively

also our like XX/XX, feel we core on capabilities. at built all So matured, in we've disposal. And we got then we tools the as

strategy. having on and people of financial to But and it early our full globally ideas. to continue We're a And targets weren't part equal up we now not out So become days, is have it think important add we knocking doors I requiring setting to and team M&A. an people. digging

the all So that's positive.

to disciplined The have positive we're one looks price the to around In exacerbated. stay the markets, gotten is going at. expectations I everything really other frankly, looks have to at of only say multiples is have we're some or getting we want because, would some

from a both of and pretty option-based. we'll ideas, say So getting are my of stay kind look side, good privately I we but discipline, would still

Brian Sponheimer

look September. and it, to you that's Well, forward in seeing Understood.

Neil Brinker

Appreciate Yes. Thanks, Brian. it.

Operator

Thank you.

would now Powers questions, closing over there I are Kathy? hand to further the comments. conference Kathy As for no

Kathy Powers

everybody and joining morning. you, Thank to this us thanks for

to access in in please out Investor Again, able website our me be call about to You'll attend the reach you if to like would September. this Day replay X through of hours. our

an the registration you link. please invitation, follow If received

out please an day. will me, great We we everybody not If have to to received reach has you. and invitation, hope you get a out that sent

Operator

of conference for Modine The Thank you. you participation. concluded. your now Thank has

You disconnect lines. may now your

Modine Manufacturing (MOD) 31 Jul 242025 Q1 Earnings call transcript