-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MSBlj1XKs4jHCE0mywbCuQNiYNmx5xKty9Si9Kfzilajvyq5Tj0Vw0vA8+8CXumG Kvz7xSqNrGFosNrOrXFf4g== 0000067347-98-000016.txt : 19980810 0000067347-98-000016.hdr.sgml : 19980810 ACCESSION NUMBER: 0000067347-98-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980626 FILED AS OF DATE: 19980807 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MODINE MANUFACTURING CO CENTRAL INDEX KEY: 0000067347 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 390482000 STATE OF INCORPORATION: WI FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-01373 FILM NUMBER: 98678924 BUSINESS ADDRESS: STREET 1: 1500 DEKOVEN AVE CITY: RACINE STATE: WI ZIP: 53403 BUSINESS PHONE: 4146361200 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 26, 1998 ------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-1373 ------ MODINE MANUFACTURING COMPANY (Exact name of registrant as specified in its charter) WISCONSIN 39-0482000 ---------------------------------------------- ------------------- (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 1500 DeKoven Avenue, Racine, Wisconsin 53403-2552 ------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (414) 636-1200 -------------- NOT APPLICABLE ------------------------------------------------------------------------ (Former name or former address, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ---- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at August 5, 1998 ------------------------------ ----------------------------- Common Stock, $0.625 Par Value 29,607,171 MODINE MANUFACTURING COMPANY INDEX Page No. -------- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets - June 26 and March 31, 1998 3 Consolidated Statements of Earnings - For the Three Months Ended June 26, 1998 and 1997 4 Consolidated Statements of Cash Flows - For the Three Months Ended June 26, 1998 and 1997 5 Notes to Consolidated Financial Statements 6-8 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 9-12 PART II. OTHER INFORMATION Item 1. Legal Proceedings 13-14 Item 5. Other Events 14 Item 6. Exhibits and Reports on Form 8-K 15-16 Signatures 17 MODINE MANUFACTURING COMPANY CONSOLIDATED BALANCE SHEETS (In thousands, except per-share amounts) June 26, 1998 and March 31, 1998 (Unaudited)
June 26, 1998 March 31, 1998 ------------- -------------- ASSETS Current assets: Cash and cash equivalents $ 31,439 $ 36,410 Trade receivables, less allowance for doubtful accounts of $4,795 and $4,585 175,497 162,177 Inventories 150,655 152,674 Deferred income taxes and other current assets 43,071 41,922 -------- -------- Total current assets 400,662 393,183 -------- -------- Other assets: Property, plant, and equipment -- net 263,306 248,253 Investment in affiliates 7,996 8,376 Intangible assets -- net 58,353 59,355 Deferred charges and other noncurrent assets 50,782 49,857 -------- -------- Total other assets 380,437 365,841 -------- -------- Total assets $781,099 $759,024 ======== ======== LIABILITIES AND SHAREHOLDERS' INVESTMENT Current liabilities: Short-term debt $ 22,687 $ 20,878 Long-term debt -- current portion 2,395 2,835 Accounts payable 72,110 84,345 Accrued compensation and employee benefits 50,243 48,081 Income taxes 18,730 10,073 Accrued expenses and other current liabilities 28,539 26,516 -------- -------- Total current liabilities 194,704 192,728 -------- -------- Other liabilities: Long-term debt 97,114 89,587 Deferred income taxes 14,247 14,258 Other noncurrent liabilities 40,667 39,976 -------- -------- Total other liabilities 152,028 143,821 -------- -------- Total liabilities 346,732 336,549 -------- -------- Shareholders' investment: Preferred stock, $0.025 par value, authorized 16,000 shares, issued - none - - Common stock, $0.625 par value, authorized 80,000 shares, issued 30,342 shares 18,964 18,964 Additional paid-in capital 12,615 12,384 Retained earnings 435,397 423,001 Foreign currency translation adjustment (7,712) (8,102) Treasury stock at cost: 698 and 678 shares, respectively (22,338) (20,977) Restricted stock - unamortized value (2,559) (2,795) -------- -------- Total shareholders' investment 434,367 422,475 -------- -------- Total liabilities and shareholders' investment $781,099 $759,024 ======== ======== (See accompanying notes to consolidated financial statements.)
MODINE MANUFACTURING COMPANY CONSOLIDATED STATEMENTS OF EARNINGS For the three months ended June 26, 1998 and 1997 (In thousands, except per-share amounts) (Unaudited)
Three months ended June 26 -------------------------- 1998 1997 ---------- ----------- Net sales $273,104 $256,923 Cost of sales 194,646 181,882 -------- -------- Gross profit 78,458 75,041 Selling, general, and administrative expenses 45,612 44,549 -------- -------- Income from operations 32,846 30,492 Non-operating income 2,220 1,890 Interest expense (1,046) (1,135) Non-operating expense (1,364) (1,427) -------- -------- Earnings before income taxes 32,656 29,820 Provision for income taxes 12,576 11,635 -------- -------- Net earnings $ 20,080 $ 18,185 ======== ======== Net earnings per share of common stock - Basic $0.68 $0.61 - Assuming dilution $0.67 $0.60 ======== ======== Dividends per share $0.21 $0.19 ======== ======== Weighted average shares - basic 29,644 29,802 Weighted average shares - assuming dilution 30,185 30,271 ======== ======== (See accompanying notes to consolidated financial statements.)
MODINE MANUFACTURING COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the Three Months Ended June 26, 1998 and 1997 (Unaudited)
Three months ended June 26 -------------------------- 1998 1997 ---------- ---------- Net cash provided by operating activities $20,393 $23,430 Cash flows from investing activities: Expenditures for property, plant, and equipment (24,117) (14,656) Proceeds from dispositions of assets 14 (8) Other -- net (140) (41) ------- ------- Net cash (used for) investing activities (24,243) (14,705) Cash flows from financing activities: Increase in short-term debt -- net 1,694 688 Additions to long-term debt 8,166 2,202 Reductions of long-term debt (1,944) (1,092) Issuance of common stock, including treasury stock 1,323 392 Purchase of treasury stock (4,132) (2,698) Cash dividends paid (6,228) (5,659) ------- ------- Net cash (used for) financing activities (1,121) (6,167) ------- ------- Net (decrease)/increase in cash and cash equivalents (4,971) 2,558 Cash and cash equivalents at beginning of period 36,410 34,822 ------- ------- Cash and cash equivalents at end of period $31,439 $37,380 ======= ======= (See accompanying notes to consolidated financial statements.)
MODINE MANUFACTURING COMPANY ---------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ------------------------------------------------------ 1. The amounts of raw material, work in process and finished goods cannot be determined exactly except by physical inventories. Based on partial interim physical inventories and percentage relationships at the time of complete physical inventories, Management believes the amounts shown below are reasonable estimates of raw material, work in process and finished goods. (In Thousands) -------------------------------------------------------------- June 26, 1998 March 31, 1998 -------------------------------------------------------------- Raw materials $ 38,332 $ 41,164 Work in process 41,866 41,231 Finished goods 70,457 70,279 -------- -------- Total inventories $150,655 $152,674 ======== ======== 2. Property, plant, and equipment is composed of: (In Thousands) -------------------------------------------------------------- June 26, 1998 March 31, 1998 -------------------------------------------------------------- Gross, property, plant & equipment $536,524 $510,868 Less accumulated depreciation (273,218) (262,615) -------- -------- Net property, plant & equipment $263,306 $248,253 ======== ======== 3. Intangible assets include: (In Thousands) -------------------------------------------------------------- June 26, 1998 March 31, 1998 -------------------------------------------------------------- Intangible assets $ 76,795 $ 76,505 Less accumulated amortization (18,442) (17,150) -------- -------- Net intangible assets $ 58,353 $ 59,355 ======== ======== 4. Recent developments concerning legal proceedings reported in the Company's Form 10-K report for the year ended March 31, 1998, are updated in Part II, Other Information, Item 1, Legal Proceedings. While the outcome of these proceedings is uncertain, in the opinion of the Company's management, any liabilities that may result from such proceedings are not reasonably likely to have a material effect on the Company's liquidity, financial condition, or results of operations. 5. The computation of basic and diluted earnings per share, as prescribed by FASB 128, is as follows: (In thousands, except per-share amounts) ----------------------------------------------------------------- Three months ended June 26 ----------------------------------------------------------------- 1998 1997 ----------------------------------------------------------------- Net earnings per share of common stock: -------------------------------------- - Basic $0.68 $0.61 - Assuming dilution $0.67 $0.60 Numerator: --------- Income available to common shareholders $20,080 $18,185 Denominator: ----------- Weighted average shares outstanding - Basic 29,644 29,802 Effect of dilutive securities - options* 541 469 Weighted average shares outstanding - Assuming dilution 30,185 30,271 * There were outstanding options to purchase common stock at prices that exceeded the average market price for the income statement period as follows: Average market price per share $34.90 $27.90 Number of shares None 511 6. On June 18, 1998, the Company announced that it will invest $53 million over the next five fiscal years to build a world-class technical center and new headquarters for its Modine-Europe operations. Construction of the technical center will begin late in 1998 near Stuttgart, Germany, while construction of the European headquarters is expected to be started in April 1999. These projects will be financed through a combination of funds generated from continuing operations and outside borrowing as required. 7. On July 15, 1998, the Company announced it had signed a letter of intent to acquire Core Holdings Incorporated of Orlando, Fla., an aftermarket wholesale distributor specializing in complete lines of vehicular cooling system products, including radiator systems and air-conditioning components. The acquisition, scheduled for September following regulatory and final Modine Board of Directors'approval, will be through a tax-free exchange of Modine stock for 100 percent of the shares of Core Holdings. Core Holdings had sales of $54.1 million in 1997. Its 350 employees operate out of more than 50 locations throughout the southeastern United States. Core Holdings also ships its full line of air-conditioning parts to warehouse distributors in other geographic markets. It distributes primarily to radiator shops, air-conditioning shops, specialty repair shops and garages. In addition, it manufactures air-conditioning parts at a plant in Texas. 8. On April 1, 1998, the Company adopted Financial Accounting Standards Board Statement No. 130, "Reporting Comprehensive Income," which became effective for interim and annual financial statement periods in fiscal years beginning after December 15, 1997. This pronouncement established new standards for reporting comprehensive income and its components; however, the adoption of SFAS No. 130 has had no impact on the Company's net income or shareholders' equity. For the Company, the difference between net income as historically reported in the statements of consolidated income, and comprehensive income, is foreign currency translation recorded in shareholders' equity. Comprehensive earnings were $20,470 and $17,363 for the three months ended June 26, 1998 and 1997, respectively. 9. On June 15, 1998, the Financial Accounting Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." The statement requires companies to recognize all derivatives as either assets or liabilities, with the instruments measured at fair value. The accounting for changes in fair value, gains or losses, depends on the intended use of the derivative and its resulting designation. The statement is effective for all fiscal quarters of fiscal years beginning after June 15, 1999. The Company will adopt SFAS 133 beginning April 1, 2000. Adoption of this statement is not expected to have a material effect on earnings or financial position. 10. The accompanying consolidated financial statements, which have not been audited by independent certified public accountants, were prepared in conformity with generally accepted accounting principles and such principles were applied on a basis consistent with the preparation of the consolidated financial statements in the Company's March 31, 1998 Annual Report filed with the Securities and Exchange Commission. The financial information furnished includes all normal recurring accrual adjustments which are, in the opinion of Management, necessary for a fair statement of results for the interim period. Results for the first three months of fiscal 1999 are not necessarily indicative of the results to be expected for the full year. 11. Certain notes and other information have been condensed or omitted from these interim financial statements which consolidate both domestic and foreign wholly-owned subsidiaries. Therefore, such statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company's 1998 Annual Report to stockholders which statements and notes were incorporated by reference in the Company's Form 10-K Report for the year ended March 31, 1998. MANAGEMENT'S DISCUSSION AND ANALYSIS OF --------------------------------------- RESULTS OF OPERATIONS AND FINANCIAL CONDITION --------------------------------------------- The following discussion and analysis provides information which Management believes is relevant to an assessment and understanding of the Company's consolidated results of operations and financial condition. This discussion should be read in conjunction with the consolidated financial statements and notes thereto. RESULTS OF OPERATIONS - --------------------- Comparison of the First Quarter of 1998-99 with the First Quarter - ----------------------------------------------------------------- of 1997-98 - ---------- Net sales for the first quarter of fiscal 1998-99 were a record $273.1 million, up 6.3% from the $256.9 million reported in the first quarter of last year. Revenues from European operations were up significantly despite the currency-translation effect from a stronger U.S. dollar. Had the value been the same as one year ago, total consolidated sales would have grown by another $5 million. On a worldwide basis the strongest sales increases were to off-highway and to medium- and heavy-truck customers. Sales to the automotive market were particularly good in Europe. Revenues from most other major markets showed small increases, but the building-HVAC area was down. Gross margin decreased 0.5%, as a percentage of sales, over the first quarter of the previous year to 28.7% from 29.2%. Higher overhead costs in Europe was the main factor for the change. Selling, general and administrative expenses increased 2.4% over last year's first quarter while decreasing 0.6%, as a percent of sales. A number of categories registered small increases over a year ago, while the currency translation effect of the stronger dollar continued to influence these costs in a positive manner. Average outstanding debt levels increased $16.3 million, or approximately 15.8%, from the same quarter a year ago while interest expense declined 7.8%, or $0.1 million from a year ago. An increase in major plant, property and equipment projects resulted in larger amounts of interest being capitalized during the current year. Net non-operating income increased by $0.4 million. Higher interest income was the largest factor contributing to the increase. The effective tax rate of 38.5% decreased by 0.5% when compared to the same period last year. The main factors responsible for the decrease were lower earnings in Germany partially offset by the tax effect of foreign dividends. Net earnings for the quarter increased 10.4% to $20.1 million, or $0.68 basic and $0.67 diluted earnings per share from last year's $18.2 million, or $0.61 basic and $0.60 diluted earnings per share. Return on shareholders' investment, at 18.7 percent, was in the Company target range of 15-20 percent, and was slightly above the rate last year. Outlook for the Remainder of the Year - ------------------------------------- As forecast in the annual report, the Company's short-term sales outlook is strong, based on customer projections for their businesses and on internal sales and marketing plans. The increase in the Company's annual consolidated sales should approach ten percent, excluding acquisitions. European operations are expected to record the greatest growth, largely due to a major new program in the automotive sector. Although the Company could face some softness in the current year's second quarter as a result of normal customer and plant summer shutdowns, management expects full-year earnings to grow at rates similar to the first quarter. These forward-looking statements regarding sales and earnings are subject to certain risks and uncertainties which could cause actual results to differ materially from those projected. See "Important Factors and Assumptions Regarding Forward-Looking Statements" attached hereto as Exhibit 99 and incorporated herein by reference. FINANCIAL CONDITION - ------------------- Comparison between June 26, 1998 and March 31, 1998 - --------------------------------------------------- Current Assets - -------------- Cash and cash equivalents decreased by $5.0 million to a total of $31.4 million. The Company's primary sources of liquidity and capital resources were cash provided by operations and the use of available borrowing facilities. Net trade receivables increased $13.3 million, or 8.2%. An increase in total sales, including greater sales to customers with longer payment terms, were the contributing factors to the change. Inventory levels declined by $2.0 million to $150.7 million, down 1.3 percent. Among the items affecting inventory were higher sales volumes, exchange rate fluctuations in Europe, process and product line changes at certain manufacturing facilities as well as ongoing management efforts to control inventory levels. Deferred income taxes and other current assets increased $1.1 million, with the majority of the change occurring in other current asset categories. Working capital increased 2.7% to $206.0 million from $200.5 million while the current ratio increased slightly to 2.1 to 1 from 2.0 to 1. A number of categories experienced changes, but the largest items influencing the change were increased trade receivables and decreased accounts payable, partially offset by an increase in income taxes payable. Property, Plant and Equipment - ----------------------------- Net property, plant and equipment increased $15.1 million to $263.3 million as capital expenditures and the effect of foreign currency translation exceeded depreciation and retirements. Outstanding material commitments for capital expenditures were $48.8 million at June 26, 1998, compared to $48.1 million at March 31, 1998. The largest commitment of approximately $22.9 million is related to facility expansions, improvements, equipment upgrades, and new equipment for a number of European plants. Another $6.9 million relates to the construction of a new technical center in Racine, Wisconsin. The outstanding commitments will be primarily financed through a combination of funds generated from continuing operations and outside borrowing as required. Intangible Assets - ----------------- Intangible assets decreased $1.0 million. Amortization and foreign currency translations were the main items contributing to the change. Deferred Charges and Other Noncurrent Assets - -------------------------------------------- Deferred charges and other noncurrent assets increased $0.9 million. The net increase is primarily the result of continuing recognition of the surplus in the Company's overfunded pension plans. Current Liabilities - ------------------- Accounts payable and various accrued expenses decreased $8.1 million. Normal timing differences in the level of operating activity were responsible for the decrease. Accrued income taxes increased $8.7 million from normal timing differences in making estimated payments and certain federal tax benefits. Debt - ---- Outstanding debt increased by $8.9 million. Long-term debt increased by $7.1 million, mostly at the Company's European subsidiaries. Short-term debt increased $1.8 million. U.S. bank lines of credit increased by $6.0 million for working capital purposes. European subsidiaries decreased their short-term debt by $4.2 million. Consolidated available lines of credit increased during the first quarter by $2.3 million. The foreign unused lines of credit at June 26, 1998 were $13.2 million, while the Company had $3.1 million available under a domestic multi-currency revolving credit agreement. Total debt as a percentage of shareholders' equity increased from 26.8% to 28.1%. Shareholders' Investment - ------------------------ Total shareholders' investment increased by $11.9 million to a total of $434.4 million. The net increase resulted primarily from net earnings of $20.1 million for the first three months. Also contributing to the increase was a favorable foreign currency translation impact of $0.4 million during the quarter. Offsetting items included dividends paid to shareholders of $6.2 million, net treasury stock transactions of $1.4 million and other less significant changes to the capital accounts. PART II. OTHER INFORMATION Item 1. Legal Proceedings. In the normal course of business, the Company and its subsidiaries are named as defendants in various lawsuits and enforcement proceedings by private parties, the Occupational Safety and Health Administration, the Environmental Protection Agency, other governmental agencies, and others in which claims, such as personal injury, property damage, or antitrust and trade regulation issues, are asserted against the Company. While the outcome of these proceedings is uncertain, in the opinion of the Company's Management and counsel, any liabilities that may result from such proceedings are not reasonably likely to have a material effect on the Company's liquidity, financial condition or results of operations. Many of the pending damage claims are covered by insurance and, in addition, the Company from time to time establishes reserves for uninsured liabilities. The Mitsubishi and Showa Litigation ----------------------------------- In November 1991, the Company filed a lawsuit against Mitsubishi Motor Sales of America, Inc. and Showa Aluminum Corporation, alleging infringement of the Company's patent on parallel-flow air-conditioning condensers. The suit seeks an injunction to prohibit continued infringement, an accounting for damages, a trebling of such damages for willful infringement, and reimbursement of attorneys' fees. In December of 1991, the Company submitted a complaint to the U.S. International Trade Commission (ITC) requesting that the ITC ban the import and sale of parallel-flow air-conditioning condensers and systems or vehicles that contain them, which are the subject of the aforementioned lawsuit. In August 1997, the ITC issued an Order excluding from U.S. import Showa condensers that infringe Modine Manufacturing Company's parallel-flow patent. The ITC's Order covers condensers, their parts, and certain products including them, such as air-conditioning kits and systems. It directs the U.S. Customs Service to exclude from importation into the United States such products manufactured by Showa Aluminum Corporation of Japan and Showa Aluminum Corporation of America. The decision is based on a Modine U.S. patent covering condensers with tube hydraulic diameters less than 0.04822 inches. The Showa companies must certify to Customs officials that any condenser items imported by them do not infringe Modine's parallel-flow patent. The Showa companies must also file annual reports with the ITC regarding their sales of Showa parallel-flow condensers in the United States. In July of 1994, Showa filed a lawsuit against the Company alleging infringement by the Company of Showa patents pertaining to condensers. In June 1995, the Company filed a motion for partial summary judgment against such lawsuit. In December of 1994, the Company filed another lawsuit against Mitsubishi and Showa pertaining to a newly issued patent on parallel-flow air-conditioning condensers. Both 1994 suits have been stayed pending the outcome of re-examination in the U.S. Patent Office of the patents involved. In October of 1997, Modine was issued a Japanese patent (in spite of opposition by many parties) covering parallel-flow air-conditioning condensers having tube hydraulic diameters less than 0.070 inches. A similar patent has been issued to Modine by the European Patent Office and is currently in the opposition stage. All legal and court costs associated with these cases have been expensed as they were incurred. Other previously reported legal proceedings have been settled or the issues resolved so as to not merit further reporting. Under the rules of the Securities and Exchange Commission, certain environmental proceedings are not deemed to be ordinary or routine proceedings incidental to the Company's business and are required to be reported in the Company's annual and/or quarterly reports. The Company is not currently a party to any such proceedings. Item 5. Other Events. On August 5, 1998, the Company closed the purchase of 50 percent of Radiadores Visconde Ltda., a Brazilian heat-transfer company. Visconde's 1997 net sales were approximately $60 million, about 70 percent of which were for the aftermarket, both domestic and export. The company has 750 employees and has ISO-9001 certification for aluminum radiators. Visconde makes heat- exchanger components, assemblies, and modules that include radiators, oil coolers, and charge-air coolers at facilities in Sao Paulo, Brazil. It serves the passenger-car aftermarket and the truck, bus, engine, agricultural-tractor, hydraulic-system, compressor, marine, construction-equipment, power-generated, and industrial markets. On June 18, 1998, Modine formed a joint venture company with Daikin Industries, Ltd., one of the largest air-conditioning manufacturers in the world. The joint venture, called Daikin- Modine, Inc., will manufacture a new line of packaged, rooftop, air-conditioning products using state-of-the-art technology, including Modine's patented PF (parallel flow) heat exchangers. Daikin, based in Osaka, Japan, is the strongest commercial air- conditioning manufacturer in Japan, with market strengths in Asia and Europe. Daikin has state-of-the-art air-conditioning and refrigeration technology, producing its own compressors, other components, and refrigerants. Modine's gas-heating products are manufactured in Virginia and the joint venture company will begin operations in a Modine facility in Rockbridge County, near Lexington, VA. Modine has an established distribution network in the U.S. building-HVAC (heating, ventilating, air-conditioning) market. Each partner owns 50 percent of Daikin-Modine. Following changes to the Rockbridge facility, the joint venture company will begin production in 1999. On June 18, 1998, the Company announced that it will invest $53 million over the next five fiscal years to build a world-class technical center and headquarters in Europe. See Footnote 6 to the Notes to Consolidated Financial Statements (unaudited) of this Report. On July 15, 1998, the Company announced that it had signed a letter of intent to acquire Core Holdings Incorporated of Orlando, Florida. See Footnote 7 to the Notes to Consolidated Financial Statements (unaudited) of this Report. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits: -------- The following exhibits are included for information only unless specifically incorporated by reference in this report: Reference Number per Item 601 of Regulation S-K Page - -------------- ---- 3 Restated By-Laws (as amended) (filed by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1998). 4(a) Rights Agreement dated as of October 16, 1986 between the Registrant and First Chicago Trust Company of New York (Rights Agent) (filed by reference to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1997). 4(b)(i) Rights Agreement Amendment No. 1 dated as of January 18, 1995 between the Registrant and First Chicago Trust Company of New York (Rights Agent) (filed by reference to the exhibit contained within the Registrant's Current Report on Form 8-K dated January 13, 1995). 4(b)(ii) Rights Agreement Amendment No. 2 dated as of January 18, 1995 between the Registrant and First Chicago Trust Company of New York (Rights Agent) (filed by reference to the exhibit contained within the Registrant's Current Report on Form 8-K dated January 13, 1995). 4(b)(iii) Rights Agreement Amendment No. 3 dated as of October 15, 1996 between the Registrant and First Chicago Trust Company of New York (Rights Agent) (filed by reference to the exhibit contained within the Registrant's Quarterly Report on Form 10-Q dated December 26, 1996). 4(b)(iv) Rights Agreement Amendment No. 4 dated as of November 10, 1997 between the Registrant and Norwest Bank Minnesota, N.A., (Rights Agent) (filed by reference to the exhibit contained within the Registrant's Quarterly Report on Form 10-Q dated December 26, 1997.) Note: The amount of long-term debt authorized under any instrument defining the rights of holders of long-term debt of Reference Number per Item 601 of Regulation S-K Page - -------------- ---- the Registrant, other than as noted above, does not exceed ten percent of the total assets of the Registrant and its subsidiaries on a consolidated basis. Therefore, no such instruments are required to be filed as exhibits to this Form. The Registrant agrees to furnish copies of such instruments to the Commission upon request. 27* Financial Data Schedule (electronic transmission only). 99* Important Factors and Assumptions Regarding Forwarding-Looking Statements. 17 *Filed herewith. (b) Reports on Form 8-K: ------------------- The Company filed one Form 8-K to report that certain forward looking statements regarding forecasts of sales and earnings growth are subject to certain risks and uncertainties as explained therein. This Report is dated June 5, 1998. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MODINE MANUFACTURING COMPANY ---------------------------- (Registrant) By: A. D. REID --------------------------------- A. D. Reid, Vice President, Finance and Chief Financial Officer (Principal Financial Officer) Date: August 6, 1998 By: W. E. PAVLICK --------------------------------- W. E. Pavlick, Senior Vice President, General Counsel and Secretary EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF EARNINGS FOR THE PERIOD ENDING 6/26/98 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS MAR-31-1999 APR-1-1998 JUN-26-1998 31,439 0 180,292 4,795 150,655 400,662 536,524 273,218 781,099 194,704 97,114 0 0 18,964 415,403 781,099 273,104 273,104 194,646 194,646 0 170 1,046 32,656 12,576 20,080 0 0 0 20,080 0.68 0.67
EX-99 3 EXHIBIT 99 IMPORTANT FACTORS AND ASSUMPTIONS REGARDING FORWARD-LOOKING STATEMENTS These cautionary statements are being made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995 and with the intention of obtaining the benefits of the "safe harbor" provisions of the Act. Investors are cautioned that any forward-looking statements made by Modine are not guarantees of future performance and that actual results may differ materially from those in the forward-looking statements as a result of various factors, including: customers' integration of products currently being supplied by the Company; the success of Modine or its competitors in obtaining the business of the customer base; the ability to pass on increased costs to customers; variations in currency- exchange rates in view of a large portion of the Company's business being non-domestic; the impact of year 2000 compliance by the Company or those entities with which the Company does business; labor relations at Modine, its customers, and its suppliers, which may affect the continuous supply of product; and the ability to improve acquisitions' operations. In making statements about Modine's fiscal-1999 operating results, management has assumed relatively stable economic conditions in the United States and worldwide, no unanticipated swings in the business cycles affecting customer industries, and a reasonable legislative and regulatory climate in those countries where Modine does business. Readers are cautioned not to place undue reliance on Modine's forward-looking statements, which speak only as of the date such statements are made. -----END PRIVACY-ENHANCED MESSAGE-----