Modine Reports Q3 Fiscal 2024 Results, Driven by Strong Data Center Sales

Modine’s third-quarter revenue grew 10% to $616.8 million, fueled by robust data center cooling demand and contributions from the Scott Springfield acquisition.

Modine Manufacturing Company, a global provider of thermal management solutions, has reported its financial results for the third quarter of fiscal 2024, ending December 31, 2024. The company’s revenue growth was primarily driven by increased sales in the Climate Solutions segment, especially in data center cooling and HVAC&R products.

Key Financial Highlights:

Net sales increased by 10% to $616.8 million compared to $561.4 million in the same quarter last year.
Net earnings decreased 9% to $41.2 million, while earnings per share (EPS) fell 8% to $0.76.
Adjusted EPS rose 24% to $0.92, driven by higher gross profit and favorable sales mix.
Adjusted EBITDA climbed 18% to $87.3 million, reflecting improved operating performance.

“Our third quarter results were largely in line with our expectations, with strong data center sales leading the year-over-year revenue improvement,” said Neil D. Brinker, Modine’s President and CEO. “The Scott Springfield acquisition continues to perform exceptionally well, accelerating our growth and providing revenue synergies with numerous cross-selling opportunities. This, along with strong organic data center growth, more than offset lower volumes in other areas of the business.”

Segment Performance:

Climate Solutions

Sales surged 42% year-over-year to $360.8 million, with $73.6 million contributed by the recently acquired Scott Springfield Manufacturing business. Growth was driven by strong demand for data center cooling solutions and HVAC&R products. Gross margin improved by 100 basis points to 28.6%. Operating income increased 54% to $62.4 million, while adjusted EBITDA rose 57% to $75.7 million.

Performance Technologies

Sales in the Performance Technologies segment dropped 16% to $262.2 million due to lower demand from automotive, off-highway, and commercial vehicle customers, as well as the impact of prior-year dispositions. Gross margin decreased slightly to 17.8%, while operating income fell by $13.7 million to $15.8 million. Adjusted EBITDA declined 22% to $28.4 million.

Balance Sheet and Cash Flow

Modine reported net cash from operating activities of $158.5 million for the nine months ended December 31, 2024, down $16.5 million from the prior year. Free cash flow for the same period was $102.2 million, a decline of $29.0 million, primarily due to higher capital expenditures and restructuring costs.

As of December 31, 2024, the company’s total debt stood at $370.8 million, with cash and cash equivalents of $83.8 million. Net debt decreased by $84.5 million compared to the end of fiscal 2024, reflecting strong cash flow management.

Fiscal 2025 Outlook

Brinker reaffirmed Modine’s guidance for fiscal 2025, expecting it to be a record year for the third consecutive time. “Our outlook for the data center business remains strong, driven by both organic growth and the Scott Springfield acquisition,” Brinker stated. “In the Performance Technologies segment, we have taken aggressive cost actions to address the challenges in vehicular end-markets and continue to focus on margin improvement.”

The company remains focused on leveraging recent investments in technology, product development, and manufacturing capacity to drive growth and improve profitability across its business segments.