Modine Manufacturing Company · NYSE:MOD
Modine Manufacturing — Q3 2020 Earnings Presentation
16 slides from Modine Manufacturing's earnings presentation, Feb 5, 2020
Slide 1: Third Quarter Fiscal 2020
Third Quarter Fiscal 2020 February 5, 2020 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: Q3 FY 2020 Highlights
Q3 FY 2020 Highlights • Sales down $67.6M from prior year and adjusted operating income down $10.8M – Lower market demand in VTS and CIS segments • Improved free cash flow during the quarter − Strengthened balance sheet by refinancing debt • New CIS leadership focused on improving margins and growin
Slide 4: VTS Summary
VTS Summary Sales by End Market Net Sales Adjusted Operating Income -16% -66% 9% Automotive -3% 20% $323.3 $15.0 Commercial Vehicle -26% 46% Off-Highway -26% $5.1 25% $271.9 4.6% 1.9% Other Q3 19 Q3 20 Q3 19 Q3 20 (in millions) Sales by Product Sales by Region 6% -18% Power Train Cooling -28% -18% 4
Slide 5: CIS Summary
CIS Summary Sales by End Market Net Sales Adjusted Operating Income -12% -34% 9% Commercial HVAC&R -9% $13.6 20% $167.0 Data Center -25% $9.0 $147.5 71% Industrial (Power & Other) +7% 8.1% 6.1% Q3 19 Q3 20 Q3 19 Q3 20 (in millions) Sales by Product Sales by Region -19% 8% -4% Coils -9% 26% Coolers -
Slide 6: BHVAC Summary
BHVAC Summary Sales by End Market Net Sales Operating Income +1% +4% 1% 17% Commercial HVAC&R 0% $64.2 $64.9 $13.5 $13.0 Data Center +2% 82% Other 20.3% 20.8% Q3 19 Q3 20 Q3 19 Q3 20 (in millions) Sales by Product Sales by Region +6% 16% Heating +5% 12% Air Conditioning -10% -7% 52% $43 Ventilation
Slide 7: Income Statement Metrics
Income Statement Metrics Sales decreased $67.6M or 12% − Significant truck and off-highway market headwinds in VTS (In millions) Q3 2020 Q3 2019 − CIS impacted by the decline with one major data center customer Net Sales $473.4 $541.0 Gross profit decreased 20%; margin negatively impacted by VTS and
Slide 8: Cash Flow & Net Debt
Cash Flow & Net Debt Cash flow improved during the quarter and anticipating further progress to continue through year end (In millions) Q3 YTD 2020 Q3 YTD 2019 − Net debt declined by $21M during the quarter, with Operating cash flow $45.9 $67.4 positive free cash flow of $12M Capital expenditures (5
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* $0.85 to $1.00 Assumes current foreign exchange rates; Adjusted tax rate 26% • Confirming s
Slide 10: Appendix
Appendix
Slide 11: Q3 GAAP Income Statement
Q3 GAAP Income Statement (In millions, except per share amounts) Q3 Q3 Better 2020 2019 (Worse) Net sales $ 473.4 $ 541.0 $ (67.6) Cost of sales 399.9 449.3 49.4 Gross profit 73.5 91.7 (18.2) Selling, general & administrative expenses 63.5 57.2 (6.3) Restructuring expenses 2.6 0.5 (2.1) Impairment c
Slide 12: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted financial results (unaudited) (In millions, except per share amounts) Three months ended December 31, Nine months ended December 31, 2019 2018 2019 2018 Operating income $ 8.2 $ 33.6 $ 32.3 $ 91.2 (a) Automotive separation and strategy costs 14.0 1.2 34.3 1.2 Restru
Slide 13: Non-GAAP Reconciliations
Non-GAAP Reconciliations Segment adjusted operating income and margin (In millions) Three months ended December 31, Vehicular Thermal Solutions 2019 2018 Operating income $ 4.3 $ 15.5 (a) Restructuring expenses 1.6 0.4 (a) Gain on sale of assets (0.8) - (a) Environmental charges - (0.9) Adjusted ope
Slide 14: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted tax rate (In millions) Three months ended December 31, 2019 2018 Earnings before income taxes $ 2.7 $ 26.9 Automotive separation and strategy costs (a) 14.0 1.2 (a) Restructuring expenses 2.6 0.5 (a) Gain on sale of assets (0.8) - (a) Environmental charges - (0.9) (
Slide 15: Non-GAAP Reconciliations
Non-GAAP Reconciliations Free cash flow (unaudited) (In millions) Three months ended December 31, Nine months ended December 31, 2019 2018 2019 2018 Net cash provided by operating activities $ 28.4 $ 30.7 $ 45.9 $ 67.4 Expenditures for property, plant and equipment (16.8) (20.8) (58.2) (58.7) Free c
Slide 16: 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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