Modine Manufacturing Company
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(Exact name of registrant as specified in its charter)
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Wisconsin
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1-1373
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39-0482000
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification Number)
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1500 DeKoven Avenue, Racine, Wisconsin
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53403
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code:
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(262) 636-1200
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02
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Results of Operations and Financial Condition
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Item 9.01
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Financial Statements and Exhibits
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(d)
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Exhibits
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99.1
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Press Release dated November 6, 2012 announcing the results of operations and financial condition for the second quarter ended September 30, 2012.
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Modine Manufacturing Company
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By: /s/ Thomas A. Burke
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Thomas A. Burke
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President and Chief Executive Officer
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By: /s/ Margaret C. Kelsey
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Margaret C. Kelsey
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Vice President, General Counsel and Secretary
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Exhibit No.
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Exhibit Description
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Press Release dated November 6, 2012 announcing the results of operations and financial condition for the first quarter ended September 30, 2012.
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·
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Sales of $339.9 million;
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·
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GAAP basis loss per share of $0.26;
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·
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Impairment and restructuring charges of $18.1 million; and
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·
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Earnings per share excluding impairment and restructuring charges increased to $0.13.
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·
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Year-over-year sales down 10 to 12 percent, including approximately $80 million of planned program reductions;
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·
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Operating income margin in the range of 2.75 to 3.25 percent; and
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·
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Earnings per diluted share of $0.40 to $0.50.
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Modine Manufacturing Company
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||||||||||||||||
Consolidated statements of operations (unaudited)
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(In thousands, except per share amounts)
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||||||||||||||||
Three months ended September 30,
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Six months ended September 30,
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|||||||||||||||
2012
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2011* | 2012 | 2011* | |||||||||||||
Net sales
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$ | 339,922 | $ | 397,290 | $ | 690,298 | $ | 815,153 | ||||||||
Cost of sales
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287,326 | 334,916 | 586,117 | 682,977 | ||||||||||||
Gross profit
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52,596 | 62,374 | 104,181 | 132,176 | ||||||||||||
Selling, general & administrative expenses
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41,318 | 50,176 | 84,472 | 99,720 | ||||||||||||
Impairment charges
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16,748 | - | 16,748 | - | ||||||||||||
Restructuring and repositioning expenses
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1,317 | - | 5,877 | - | ||||||||||||
Operating (loss) income
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(6,787 | ) | 12,198 | (2,916 | ) | 32,456 | ||||||||||
Interest expense
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3,370 | 3,297 | 6,409 | 6,287 | ||||||||||||
Other (income) expense - net
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(139 | ) | 6,223 | (305 | ) | 5,884 | ||||||||||
(Loss) earnings from continuing operations before income taxes
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(10,018 | ) | 2,678 | (9,020 | ) | 20,285 | ||||||||||
Provision for income taxes
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1,830 | 1,678 | 3,883 | 6,719 | ||||||||||||
(Loss) earnings from continuing operations
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(11,848 | ) | 1,000 | (12,903 | ) | 13,566 | ||||||||||
(Loss) earnings from discontinued operations (net of income taxes)
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(105 | ) | 373 | 72 | 373 | |||||||||||
Net (loss) earnings
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(11,953 | ) | 1,373 | (12,831 | ) | 13,939 | ||||||||||
Less: Net earnings attributable to noncontrolling interest
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267 | 38 | 568 | 29 | ||||||||||||
Net (loss) earnings attributable to Modine
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$ | (12,220 | ) | $ | 1,335 | $ | (13,399 | ) | $ | 13,910 | ||||||
(Loss) earnings per share from continuing operations attributable to Modine shareholders:
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Basic
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$ | (0.26 | ) | $ | 0.02 | $ | (0.29 | ) | $ | 0.29 | ||||||
Diluted
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$ | (0.26 | ) | $ | 0.02 | $ | (0.29 | ) | $ | 0.29 | ||||||
Net (loss) earnings per share attributable to Modine shareholders:
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Basic
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$ | (0.26 | ) | $ | 0.03 | $ | (0.29 | ) | $ | 0.30 | ||||||
Diluted
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$ | (0.26 | ) | $ | 0.03 | $ | (0.29 | ) | $ | 0.30 | ||||||
Weighted average shares outstanding:
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||||||||||||||||
Basic
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46,584 | 46,477 | 46,565 | 46,419 | ||||||||||||
Diluted
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46,584 | 46,858 | 46,565 | 46,919 |
Condensed consolidated balance sheets (unaudited)
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(In thousands)
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September 30, 2012
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March 31, 2012
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Assets
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Cash and cash equivalents
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$ | 29,620 | $ | 31,445 | ||||
Trade receivables - net
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177,788 | 216,103 | ||||||
Inventories
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121,585 | 120,819 | ||||||
Other current assets
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71,498 | 59,164 | ||||||
Total current assets
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400,491 | 427,531 | ||||||
Property, plant and equipment - net
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372,077 | 412,059 | ||||||
Other noncurrent assets
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59,920 | 53,871 | ||||||
Total assets
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$ | 832,488 | $ | 893,461 | ||||
Liabilities and shareholders' equity
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Debt due within one year
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$ | 20,487 | $ | 22,389 | ||||
Accounts payable
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130,187 | 156,907 | ||||||
Other current liabilities
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114,577 | 118,255 | ||||||
Total current liabilities
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265,251 | 297,551 | ||||||
Long-term debt
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142,566 | 141,892 | ||||||
Other noncurrent liabilities
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120,208 | 127,886 | ||||||
Total liabilities
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528,025 | 567,329 | ||||||
Total equity
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304,463 | 326,132 | ||||||
Total liabilities & equity
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$ | 832,488 | $ | 893,461 |
Modine Manufacturing Company
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Condensed consolidated statements of cash flows (unaudited)
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(In thousands)
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Six months ended September 30,
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2012
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2011* | ||||||
Cash flows from operating activities:
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Net (loss) earnings
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$ | (12,831 | ) | $ | 13,939 | |||
Adjustments to reconcile net (loss) earnings with net cash provided by operating activities:
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Depreciation and amortization
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28,189 | 29,154 | ||||||
Impairment charges
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16,748 | - | ||||||
Other - net
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6,235 | 6,379 | ||||||
Net changes in operating assets and liabilities
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(11,579 | ) | (46,315 | ) | ||||
Net cash provided by operating activities
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26,762 | 3,157 | ||||||
Cash flows from investing activities:
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Expenditures for property, plant and equipment
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(20,717 | ) | (32,532 | ) | ||||
Acquisition, net of cash received
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(4,938 | ) | - | |||||
Other - net
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(1,621 | ) | 1,794 | |||||
Net cash used for investing activities
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(27,276 | ) | (30,738 | ) | ||||
Cash flows from financing activities:
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Net increase in debt
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(813 | ) | 25,333 | |||||
Other - net
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(28 | ) | 921 | |||||
Net cash (used for) provided by financing activities
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(841 | ) | 26,254 | |||||
Effect of exchange rate changes on cash
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(470 | ) | (1,385 | ) | ||||
Net decrease in cash and cash equivalents
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(1,825 | ) | (2,712 | ) | ||||
Cash and cash equivalents at beginning of the period
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31,445 | 32,930 | ||||||
Cash and cash equivalents at end of the period
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$ | 29,620 | $ | 30,218 |
Condensed segment operating results (unaudited)
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(In thousands)
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Three months ended September 30,
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Six months ended September 30,
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2012
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2011* | 2012 | 2011* | |||||||||||||
Net sales:
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North America
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$ | 143,374 | $ | 148,848 | $ | 297,000 | $ | 305,483 | ||||||||
Europe
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118,771 | 151,988 | 244,219 | 318,830 | ||||||||||||
South America
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34,222 | 48,095 | 65,373 | 96,016 | ||||||||||||
Asia
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13,818 | 19,989 | 29,609 | 41,254 | ||||||||||||
Commercial Products
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33,824 | 35,070 | 63,965 | 69,218 | ||||||||||||
Segment net sales
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344,009 | 403,990 | 700,166 | 830,801 | ||||||||||||
Corporate and eliminations
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(4,087 | ) | (6,700 | ) | (9,868 | ) | (15,648 | ) | ||||||||
Net sales
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$ | 339,922 | $ | 397,290 | $ | 690,298 | $ | 815,153 | ||||||||
Operating income (loss):
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North America (a)
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$ | 6,844 | $ | 10,899 | $ | 20,692 | $ | 21,718 | ||||||||
Europe (b)
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(9,942 | ) | 8,341 | (10,128 | ) | 19,948 | ||||||||||
South America
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4,255 | 2,687 | 4,962 | 5,877 | ||||||||||||
Asia
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(2,335 | ) | (750 | ) | (4,597 | ) | 63 | |||||||||
Commercial Products
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2,593 | 2,897 | 3,592 | 6,268 | ||||||||||||
Segment operating income
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1,415 | 24,074 | 14,521 | 53,874 | ||||||||||||
Corporate and eliminations
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(8,202 | ) | (11,876 | ) | (17,437 | ) | (21,418 | ) | ||||||||
Operating (loss) income
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$ | (6,787 | ) | $ | 12,198 | $ | (2,916 | ) | $ | 32,456 |
(a)
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The second quarter and year-to-date operating income include $991 of impairment charges.
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(b)
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The second quarter operating loss includes $17,074 of impairment, restructuring and repositioning charges.
The year-to-date operating loss includes $21,634 of impairment, restructuring and repositioning charges.
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*
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Prior period results have been revised to reflect the correction of errors identified in fiscal 2012 (quarter ended March 31, 2012).
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Modine Manufacturing Company
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Operating income and earnings per share excluding impairment and restructuring charges (unaudited)
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(In thousands, except per share amounts)
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Three months ended September 30,
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Six months ended September 30,
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2012
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2011
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2012
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2011
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Operating (loss) income
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$ | (6,787 | ) | $ | 12,198 | $ | (2,916 | ) | $ | 32,456 | ||||||
Impairment charges - Europe
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15,757 | - | 15,757 | - | ||||||||||||
Impairment charges - North America
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991 | - | 991 | - | ||||||||||||
Restructuring and repositioning expenses - Europe (a)
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1,317 | - | 5,877 | - | ||||||||||||
Operating income excluding impairment and restructuring charges
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$ | 11,278 | $ | 12,198 | $ | 19,709 | $ | 32,456 | ||||||||
Net (loss) earnings per share attributable to Modine shareholders - diluted
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$ | (0.26 | ) | $ | 0.03 | $ | (0.29 | ) | $ | 0.30 | ||||||
Impairment charges - Europe
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0.34 | - | 0.34 | - | ||||||||||||
Impairment charges - North America
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0.02 | - | 0.02 | - | ||||||||||||
Restructuring and repositioning expenses - Europe (a)
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0.03 | - | 0.13 | - | ||||||||||||
Earnings per share excluding impairment and restructuring charges
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$ | 0.13 | $ | 0.03 | $ | 0.20 | $ | 0.30 |
(a)
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Restructuring and repositioning expenses primarily relate to salaried headcount reductions at our regional headquarters in Germany.
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Net debt (unaudited)
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(In thousands)
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September 30, 2012
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March 31, 2012
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Debt due within one year
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$ | 20,487 | $ | 22,389 | |||||
Long-term debt
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142,566 | 141,892 | |||||||
Total debt
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163,053 | 164,281 | |||||||
Less: cash and cash equivalents
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29,620 | 31,445 | |||||||
Net debt
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$ | 133,433 | $ | 132,836 |
Free cash flow (unaudited) | ||||||||||||||||
(In thousands) | ||||||||||||||||
Three months ended September 30,
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Six months ended September 30,
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2012
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2011
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2012
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2011
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Net cash provided by operating activities
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$ | 21,987 | $ | 17,156 | $ | 26,762 | $ | 3,157 | ||||||||
Expenditures for property, plant and equipment
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(8,983 | ) | (19,888 | ) | (20,717 | ) | (32,532 | ) | ||||||||
Free cash flow
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$ | 13,004 | $ | (2,732 | ) | $ | 6,045 | $ | (29,375 | ) |