Modine Manufacturing Company · NYSE:MOD
Modine Manufacturing — Q2 2020 Earnings Presentation
17 slides from Modine Manufacturing's earnings presentation, Nov 8, 2019
Slide 1: Second Quarter Fiscal 2020
Second Quarter Fiscal 2020 November 8, 2019 8:00 am CDT
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains statements, including information about future financial performance and market conditions, accompanied by phrases such as “believes,” “estimates,” “expects,” “plans,” “anticipates,” “intends,” and other similar “forward-looking” statements, as d
Slide 3: Q2 FY 2020 Highlights
Q2 FY 2020 Highlights Net Sales • Reducing the outlook for several of our key end markets -9% − Lowering guidance for Modine’s second half based on the revised outlook • Implementing immediate cost containment measures $548.9 $500.2 − Short-term savings and long-term initiatives − $25 to $30M in tot
Slide 4: VTS Summary
VTS Summary Sales by End Market Net Sales Adjusted Operating Income -11% -42% 8% Automotive -1% 20% $16.0 $335.6 Commercial Vehicle -15% 45% $9.3 Off-Highway -22% $299.3 27% 4.8% 3.1% Other Q2 19 Q2 20 Q2 19 Q2 20 (in millions) Sales by Product Sales by Region -9% 5% -13% Power Train Cooling -14% 40
Slide 5: CIS Summary
CIS Summary Sales by End Market Net Sales Adjusted Operating Income -12% -31% 9% Commercial HVAC&R -9% $178.2 17% $12.9 Data Center -26% $8.9 $156.7 74% Industrial (Power & Other) -3% 7.2% 5.7% Q2 19 Q2 20 Q2 19 Q2 20 (in millions) Sales by Product Sales by Region 8% -17% Coils -9% 23% -7% Coolers -
Slide 6: BHVAC Summary
BHVAC Summary Sales by End Market Net Sales Adjusted Operating Income +10% +35% 1% 17% Commercial HVAC&R +9% $8.8 $56.0 $6.5 Data Center +13% $50.7 82% Other 12.8% 15.8% Q2 19 Q2 20 Q2 19 Q2 20 (in millions) Sales by Product Sales by Region +20% 16% Heating +13% 43% -5% Air Conditioning -8% $38 25%
Slide 7: Income Statement Metrics
Income Statement Metrics Sales decreased $48.7M or 9% (In millions) Q2 2020 Q2 2019 − Foreign currency headwinds remain Net Sales $500.2 $548.9 − Weaker-than-expected commercial vehicle and off- Gross Profit 75.7 87.9 highway markets − BHVAC sales increased, but offset by declines across Margin 15.1
Slide 8: Cash Flow & Net Debt
Cash Flow & Net Debt • Decline in free cash flow is due primarily to lower (In millions) Q2 YTD 2020 Q2 YTD 2019 cash earnings and expenses for potential automotive Operating cash flow $17.5 $36.7 business divestiture Capital expenditures (41.4) (37.9) − YTD includes $20M of cash payments for strate
Slide 9: Fiscal 2020 Guidance
Fiscal 2020 Guidance (In millions) Guidance Comments Net sales $1,947 to $2,058 -12% to -7% Adjusted operating income* $85 to $95 -36% to -28% (-160 to -140 bps) $23M of annual interest expense; Adjusted EPS* $0.75 to $0.90 Assumes current foreign exchange rates; Increase in adjusted tax rate to 34%
Slide 10: In Summary
In Summary Strengthen, Diversify & Grow $178.2 • Automotive divestiture goals 5.7% − Strategy to better focus dollars and management to strengthen, diversify and grow our business going forward − Committed to finding the best path forward that maximizes shareholder value − Immediate actions in respo
Slide 11: Appendix
Appendix
Slide 12: Q2 GAAP Income Statement
Q2 GAAP Income Statement (In millions, except per share amounts) Q2 Q2 Better 2020 2019 (Worse) Net sales $ 500.2 $ 548.9 $ (48.7) Cost of sales 424.5 461.0 36.5 Gross profit 75.7 87.9 (12.2) SG&A expenses 67.4 63.4 (4.0) Restructuring expenses 2.3 - (2.3) Loss on sale of assets - 1.7 1.7 Operating
Slide 13: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted financial results (unaudited) (In millions, except per share amounts) Three months ended September 30, Six months ended September 30, 2019 2018 2019 2018 Operating income $ 6.0 $ 22.8 $ 24.1 $ 57.6 Automotive business strategy costs (a) 11.9 - 20.2 - (b) Restructuri
Slide 14: Non-GAAP Reconciliations
Non-GAAP Reconciliations Segment adjusted operating income and margin (In millions) Three months ended September 30, Vehicular Thermal Solutions 2019 2018 Operating income $ 7.4 $ 14.1 (a) Restructuring expenses 1.9 - (a) Environmental charges - 1.9 Adjusted operating income $ 9.3 $ 16.0 Net sales $
Slide 15: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted tax rate (In millions) Three months ended September 30, 2019 2018 (Loss) earnings before income taxes $ (1.1) $ 15.8 (a) Automotive business strategy costs 11.9 - (a) Restructuring expenses 2.3 - (a) Environmental charges - 1.9 (a) Loss on sale of assets - 1.7 Acqui
Slide 16: Non-GAAP Reconciliations
Non-GAAP Reconciliations Net sales - constant currency (unaudited) (In millions) Three months ended September 30, 2019 2018 Effect of Exchange Rate Net Sales - Net Sales Changes Constant Currency Net Sales Vehicular Thermal Solutions $ 299.3 $ 6.6 $ 305.9 $ 335.6 Commercial and Industrial Solutions
Slide 17: Non-GAAP Reconciliations
Non-GAAP Reconciliations Our fiscal 2020 guidance includes adjusted operating income and adjusted earnings per share. These are non-GAAP measures, which exclude certain cash and non-cash expenses or gains. These expenses and gains may be significant and include items such as restructuring expenses (
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