Wisconsin
|
1-1373
|
39-0482000
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(I.R.S. Employer Identification Number)
|
1500 DeKoven Avenue, Racine, Wisconsin
|
53403
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Registrant's telephone number, including area code:
|
(262) 636-1200
|
(Former name or former address, if changed since last report.)
|
N/A
|
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01 | Financial Statements and Exhibits |
(d) | Exhibits |
99.1 | Press Release dated May 28, 2015 announcing the results of operations and financial condition for the fourth quarter and fiscal year ended March 31, 2015. |
Modine Manufacturing Company
|
||
By: /s/ Thomas A. Burke
|
||
Thomas A. Burke
|
||
President and Chief Executive Officer
|
Exhibit No.
|
Exhibit Description
|
Press Release dated May 28, 2015 announcing the results of operations and financial condition for the fourth quarter and fiscal year ended March 31, 2015.
|
· | Sales down 7 percent for the quarter, up 2 percent on a constant currency basis; |
· | Fourth quarter operating income of $5.2 million and a loss per share of $0.07; |
· | Adjusted operating income of $17.2 million for the quarter, up 27 percent, and $65.2 million for the fiscal year, up 6 percent; |
· | Adjusted earnings per share of $0.12 for the quarter and $0.63 for the fiscal year. |
· | Full fiscal year-over-year sales flat to down 5 percent, or up 1 to 6 percent on a constant currency basis; |
· | Adjusted operating income of $65 million to $70 million, including approximately $3 million of negative year-over-year currency impacts; and |
· | Adjusted earnings per share of $0.75 to $0.82. |
(In millions, except per share amounts) | ||||||||||||||||
Three months ended March 31,
|
Twelve months ended March 31,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Net sales
|
$
|
363.0
|
$
|
390.6
|
$
|
1,496.4
|
$
|
1,477.6
|
||||||||
Cost of sales
|
300.3
|
328.3
|
1,249.9
|
1,239.4
|
||||||||||||
Gross profit
|
62.7
|
62.3
|
246.5
|
238.2
|
||||||||||||
Selling, general & administrative expenses
|
48.7
|
48.8
|
184.5
|
181.7
|
||||||||||||
Restructuring expenses
|
1.0
|
5.6
|
4.7
|
16.1
|
||||||||||||
Impairment charges
|
7.8
|
1.2
|
7.8
|
3.2
|
||||||||||||
Gain on sale of wind tunnel
|
-
|
-
|
(3.2
|
)
|
-
|
|||||||||||
Operating income
|
5.2
|
6.7
|
52.7
|
37.2
|
||||||||||||
Interest expense
|
(2.8
|
)
|
(3.0
|
)
|
(11.7
|
)
|
(12.4
|
)
|
||||||||
Other income (expense) - net
|
0.5
|
-
|
0.2
|
(0.8
|
)
|
|||||||||||
Earnings from continuing operations before income taxes
|
2.9
|
3.7
|
41.2
|
24.0
|
||||||||||||
(Provision) benefit for income taxes
|
(5.9
|
)
|
116.0
|
(19.0
|
)
|
107.9
|
||||||||||
Earnings (loss) from continuing operations
|
(3.0
|
)
|
119.7
|
22.2
|
131.9
|
|||||||||||
Earnings from discontinued operations, net of income taxes
|
-
|
-
|
0.6
|
-
|
||||||||||||
Net earnings (loss)
|
(3.0
|
)
|
119.7
|
22.8
|
131.9
|
|||||||||||
Net earnings attributable to noncontrolling interest
|
(0.2
|
)
|
(0.3
|
)
|
(1.0
|
)
|
(1.5
|
)
|
||||||||
Net earnings (loss) attributable to Modine
|
$
|
(3.2
|
)
|
$
|
119.4
|
$
|
21.8
|
$
|
130.4
|
|||||||
Earnings (loss) per share from continuing operations attributable to Modine shareholders - diluted:
|
$
|
(0.07
|
)
|
$
|
2.49
|
$
|
0.44
|
$
|
2.72
|
|||||||
Net earnings (loss) per share attributable to Modine shareholders - diluted:
|
$
|
(0.07
|
)
|
$
|
2.49
|
$
|
0.45
|
$
|
2.72
|
|||||||
Weighted average shares outstanding - diluted:
|
47.2
|
47.7
|
47.8
|
47.6
|
(In millions) | ||||||||
March 31, 2015
|
March 31, 2014
|
|||||||
Assets
|
||||||||
Cash and cash equivalents
|
$
|
70.5
|
$
|
87.2
|
||||
Trade receivables
|
192.9
|
221.1
|
||||||
Inventories
|
107.7
|
116.8
|
||||||
Deferred income taxes
|
13.4
|
13.0
|
||||||
Other current assets
|
79.7
|
60.7
|
||||||
Total current assets
|
464.2
|
498.8
|
||||||
Property, plant and equipment - net
|
322.1
|
359.6
|
||||||
Deferred income taxes
|
102.7
|
98.6
|
||||||
Other noncurrent assets
|
42.6
|
75.3
|
||||||
Total assets
|
$
|
931.6
|
$
|
1,032.3
|
||||
Liabilities and shareholders' equity
|
||||||||
Debt due within one year
|
$
|
19.1
|
$
|
33.2
|
||||
Accounts payable
|
152.0
|
171.1
|
||||||
Other current liabilities
|
140.1
|
152.9
|
||||||
Total current liabilities
|
311.2
|
357.2
|
||||||
Long-term debt
|
129.6
|
131.2
|
||||||
Other noncurrent liabilities
|
130.2
|
115.3
|
||||||
Total liabilities
|
571.0
|
603.7
|
||||||
Total equity
|
360.6
|
428.6
|
||||||
Total liabilities & equity
|
$
|
931.6
|
$
|
1,032.3
|
(In millions) | ||||||||
Twelve months ended March 31,
|
||||||||
2015
|
2014
|
|||||||
Cash flows from operating activities:
|
||||||||
Net earnings
|
$
|
22.8
|
$
|
131.9
|
||||
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
51.6
|
58.1
|
||||||
Insurance proceeds from Airedale fire
|
12.9
|
16.9
|
||||||
Gain on sale of wind tunnel
|
(3.2
|
)
|
-
|
|||||
Impairment charges
|
7.8
|
3.2
|
||||||
Deferred income taxes
|
5.9
|
(116.1
|
)
|
|||||
Other - net
|
6.7
|
8.9
|
||||||
Net changes in operating assets and liabilities
|
(41.0
|
)
|
1.6
|
|||||
Net cash provided by operating activities
|
63.5
|
104.5
|
||||||
Cash flows from investing activities:
|
||||||||
Expenditures for property, plant and equipment
|
(58.3
|
)
|
(53.1
|
)
|
||||
Insurance proceeds from Airedale fire
|
12.2
|
20.7
|
||||||
Costs to replace building and equipment damaged in Airedale fire
|
(16.7
|
)
|
(4.2
|
)
|
||||
Proceeds from dispositions of assets
|
7.6
|
2.9
|
||||||
Acquisition - net of cash acquired
|
-
|
(7.8
|
)
|
|||||
Other - net
|
(2.0
|
)
|
-
|
|||||
Net cash used for investing activities
|
(57.2
|
)
|
(41.5
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Net (decrease) increase in debt
|
(14.5
|
)
|
0.2
|
|||||
Other - net
|
(0.1
|
)
|
(1.7
|
)
|
||||
Net cash used for financing activities
|
(14.6
|
)
|
(1.5
|
)
|
||||
Effect of exchange rate changes on cash
|
(8.4
|
)
|
1.9
|
|||||
Net (decrease) increase in cash and cash equivalents
|
(16.7
|
)
|
63.4
|
|||||
Cash and cash equivalents - beginning of period
|
87.2
|
23.8
|
||||||
Cash and cash equivalents - end of period
|
$
|
70.5
|
$
|
87.2
|
(In millions)
|
||||||||||||||||
Three months ended March 31,
|
Twelve months ended March 31,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Net sales:
|
||||||||||||||||
North America
|
$
|
146.2
|
$
|
145.1
|
$
|
573.5
|
$
|
568.7
|
||||||||
Europe
|
136.0
|
158.8
|
578.2
|
584.4
|
||||||||||||
South America
|
20.0
|
29.1
|
93.9
|
122.7
|
||||||||||||
Asia
|
21.2
|
19.9
|
81.2
|
71.5
|
||||||||||||
Building HVAC
|
43.8
|
42.3
|
186.3
|
146.5
|
||||||||||||
Segment net sales
|
367.2
|
395.2
|
1,513.1
|
1,493.8
|
||||||||||||
Corporate and eliminations
|
(4.2
|
)
|
(4.6
|
)
|
(16.7
|
)
|
(16.2
|
)
|
||||||||
Net sales
|
$
|
363.0
|
$
|
390.6
|
$
|
1,496.4
|
$
|
1,477.6
|
||||||||
Operating income (loss):
|
||||||||||||||||
North America (a)
|
$
|
15.0
|
$
|
7.4
|
$
|
45.9
|
$
|
42.1
|
||||||||
Europe (a)
|
4.8
|
3.6
|
25.7
|
9.6
|
||||||||||||
South America (a)
|
(11.1
|
)
|
1.3
|
(12.3
|
)
|
7.5
|
||||||||||
Asia
|
0.4
|
(1.3
|
)
|
0.3
|
(3.3
|
)
|
||||||||||
Building HVAC (a)
|
2.9
|
1.9
|
19.1
|
9.4
|
||||||||||||
Segment operating income
|
12.0
|
12.9
|
78.7
|
65.3
|
||||||||||||
Corporate and eliminations
|
(6.8
|
)
|
(6.2
|
)
|
(26.0
|
)
|
(28.1
|
)
|
||||||||
Operating income
|
$
|
5.2
|
$
|
6.7
|
$
|
52.7
|
$
|
37.2
|
(a)
|
See the adjusted operating income reconciliation on the next page for information on restructuring and other unusual items recorded within these segments.
|
(In millions, except per share amounts) | ||||||||||||||||
Three months ended March 31,
|
Twelve months ended March 31,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Operating income
|
$
|
5.2
|
$
|
6.7
|
$
|
52.7
|
$
|
37.2
|
||||||||
Restructuring expenses (b)
|
1.0
|
5.6
|
4.7
|
16.1
|
||||||||||||
Accelerated depreciation - Europe (c)
|
-
|
-
|
-
|
4.3
|
||||||||||||
Impairment charges (d)
|
7.8
|
1.2
|
7.8
|
3.2
|
||||||||||||
Gain on sale of wind tunnel - Europe
|
-
|
-
|
(3.2
|
)
|
-
|
|||||||||||
Brazil legal reserve (e)
|
3.2
|
-
|
3.2
|
-
|
||||||||||||
Loss from Airedale fire - Building HVAC (f)
|
-
|
-
|
-
|
0.5
|
||||||||||||
Adjusted operating income
|
$
|
17.2
|
$
|
13.5
|
$
|
65.2
|
$
|
61.3
|
||||||||
Earnings (loss) per share from continuing operations attributable to Modine shareholders - diluted
|
$
|
(0.07
|
)
|
$
|
2.49
|
$
|
0.44
|
$
|
2.72
|
|||||||
U.S. tax valuation allowance reversal (a)
|
-
|
(2.49
|
)
|
-
|
(2.50
|
)
|
||||||||||
Restructuring expenses (b)
|
0.01
|
0.12
|
0.08
|
0.34
|
||||||||||||
Accelerated depreciation - Europe (c)
|
-
|
-
|
-
|
0.09
|
||||||||||||
Impairment charges (d)
|
0.11
|
0.03
|
0.11
|
0.07
|
||||||||||||
Gain on sale of wind tunnel - Europe
|
-
|
-
|
(0.07
|
)
|
-
|
|||||||||||
Brazil legal reserve (e)
|
0.07
|
-
|
0.07
|
-
|
||||||||||||
Loss from Airedale fire - Building HVAC (f)
|
-
|
-
|
-
|
0.01
|
||||||||||||
Adjusted earnings per share
|
$
|
0.12
|
$
|
0.15
|
$
|
0.63
|
$
|
0.73
|
(a) | On March 31, 2014, the Company reversed the valuation allowance on certain U.S. deferred tax assets, and as a result, recorded an income tax benefit of $119.2 million during the fourth quarter of fiscal 2014. |
(b) | Restructuring expenses primarily relate to equipment transfer, plant consolidation and employee severance-related costs in Europe, North America and South America. |
(c) | Accelerated depreciation, which was reported in cost of sales, related to production equipment that is no longer used because of manufacturing process changes in Germany. |
(d) | Goodwill impairment charge in South America recorded during the fourth quarter of fiscal 2015, primarily due to the weak economic environment in Brazil. |
(e) | Reserve recorded in South America during the fourth quarter of fiscal 2015 associated with a formal administrative investigation under Brazil’s antitrust laws. |
(f) | Losses and costs incurred as a result of the Airedale fire, which were not reimbursed by the Company's insurance provider, primarily related to the write-off of certain assets (leasehold improvements) destroyed by the fire. |
Net debt (unaudited)
|
||||||||
(In millions)
|
||||||||
March 31, 2015
|
March 31, 2014
|
|||||||
Debt due within one year
|
$
|
19.1
|
$
|
33.2
|
||||
Long-term debt
|
129.6
|
131.2
|
||||||
Total debt
|
148.7
|
164.4
|
||||||
Less: cash and cash equivalents (a)
|
70.5
|
87.2
|
||||||
Net debt
|
$
|
78.2
|
$
|
77.2
|
(a) | Cash and cash equivalents as of March 31, 2015 and 2014, included $13.1 million and $16.8 million, respectively, of advances from the Company's insurance provider that remain to be spent for recovery and reconstruction costs from the Airedale fire. |
Free cash flow (unaudited)
|
||||||||||||||||
(In millions)
|
||||||||||||||||
Three months ended March 31,
|
Twelve months ended March 31,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Net cash provided by operating activities
|
$
|
19.4
|
$
|
17.8
|
$
|
63.5
|
$
|
104.5
|
||||||||
Expenditures for property, plant and equipment
|
(16.4
|
)
|
(17.1
|
)
|
(58.3
|
)
|
(53.1
|
)
|
||||||||
Payments for restructuring expenses
|
4.8
|
4.6
|
10.8
|
8.9
|
||||||||||||
Free cash flow
|
$
|
7.8
|
$
|
5.3
|
$
|
16.0
|
$
|
60.3
|