09/11/2024 | Press release | Distributed by Public on 09/11/2024 14:23
Increased fiscal 2027 targets to deliver a 16-18% adjusted EBITDA margin and a 10-13% three-year compound average growth rate (CAGR) in revenue
RACINE, Wis., Sept. 11, 2024/PRNewswire/ -- Modine (NYSE: MOD), a diversified global leader in thermal management technology and solutions, today hosted an Investor Day at its global headquarters in Racine, Wisconsin. Members of the executive management team provided an update to the company's strategy to transform the company and drive sustainable shareholder value. Guided by the company's ongoing commitment to 80/20, management outlined its strategy to evolve its portfolio to compound shareholder value by focusing on high-growth, high-margin businesses for sustainable growth and returns.
The company presented the following during the event:
"Today we presented an updated strategy, building on our deep legacy in thermal management to evolve our portfolio of highly engineered, mission-critical solutions for sustainable growth," said Modine President and Chief Executive Officer, Neil D. Brinker. "The deliberate actions we have taken to reposition Modine for a brighter future are working, as we significantly outperformed the financial goals we set during our initial Investor Day in June 2022. Our new financial targets are supported by our commitment to 80/20, which drives our strategic resource allocation and daily decision making. By focusing on and investing in our greatest opportunities, we will continue to evolve our portfolio mix in response to strong secular mega-trends including high-performance computing, electrification and the need for clean, healthy indoor air quality."
Fiscal 2027 Financial Targets
"I have never been more excited about Modine's future as we continue to invest in our business and execute on our strategies," added Modine Executive Vice President and Chief Financial Officer, Mick Lucareli. "The actions taken over the past three years have resulted in strong margin improvements and revenue growth, while providing a solid foundation for the future. We will leverage 80/20 throughout our organization, driving improvements in our business mix through both operational and commercial excellence, while allocating capital to our highest return opportunities to compound shareholder value."
A webcast replay of the event will be available on the Investor Relations section of the Company's website at www.modine.com.
Forward-Looking Statements
This press release contains statements, including information about future financial performance and market conditions, accompanied by phrases such as "believes," "estimates," "expects," "plans," "anticipates," "intends," "projects," and other similar "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995. Modine's actual results, performance or achievements may differ materially from those expressed or implied in these statements because of certain risks and uncertainties, including, but not limited to those described under "Risk Factors" in Item 1A of Part I of the Company's Annual Report on Form 10-K for the year ended March 31, 2024 and under Forward-Looking Statements in Item 7 of Part II of that same report and in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2024. Other risks and uncertainties include, but are not limited to, the following: the impact of potential adverse developments or disruptions in the global economy and financial markets, including impacts related to inflation, energy costs, supply chain challenges or supplier constraints, logistical disruptions, tariffs, sanctions and other trade issues or cross-border trade restrictions; the impact of other economic, social and political conditions, changes and challenges in the markets where we operate and compete, including foreign currency exchange rate fluctuations, increases in interest rates or tightening of the credit markets, recession or recovery therefrom, restrictions associated with importing and exporting and foreign ownership, public health crises, and the general uncertainties, including the impact on demand for our products and the markets we serve from regulatory and/or policy changes that have been or may be implemented in the U.S. or abroad, including those related to tax and trade, climate change, public health threats, and military conflicts, including the current conflicts in Ukraine and in the Middle East and heightened tensions in the Red Sea; the overall health and pricing focus of our customers; our ability to successfully realize anticipated benefits, including improved profit margins and cash flow, from our strategic initiatives and our application of 80/20 principles across our businesses; our ability to be at the forefront of technological advances and the impacts of any changes in the adoption rate of technologies that we expect to drive sales growth; our ability to accelerate growth organically and through acquisitions and successfully integrate acquired businesses; our ability to effectively and efficiently manage our operations in response to sales volume changes, including maintaining adequate production capacity to meet demand in our growing businesses while also completing restructuring activities and realizing benefits thereof; our ability to fund our global liquidity requirements efficiently and comply with the financial covenants in our credit agreements; operational inefficiencies as a result of product or program launches, unexpected volume increases or decreases, product transfers and warranty claims; the impact on Modine of any significant increases in commodity prices, particularly aluminum, copper, steel and stainless steel (nickel) and other purchased components and related costs, and our ability to adjust product pricing in response to any such increases; our ability to recruit and maintain talent in managerial, leadership, operational and administrative functions and to mitigate increased labor costs; our ability to protect our proprietary information and intellectual property from theft or attack; the impact of any substantial disruption or material breach of our information technology ("IT") systems; the impact of a material weakness identified in our internal controls related to IT system access in Europe on our financial reporting process; costs and other effects of environmental investigation, remediation or litigation and the increasing emphasis on environmental, social and corporate governance matters; our ability to realize the benefits of deferred tax assets; and other risks and uncertainties identified in our public filings with the U.S. Securities and Exchange Commission. Forward-looking statements are as of the date of this release, and we do not assume any obligation to update any forward-looking statements.
About Modine
At Modine, we are Engineering a Cleaner, Healthier World™. Building on more than 100 years of excellence in thermal management, we provide trusted systems and solutions that improve air quality and conserve natural resources. More than 11,000 employees are at work in every corner of the globe, delivering the solutions our customers need, where they need them. Our Climate Solutions and Performance Technologies segments support our purpose by improving air quality, reducing energy and water consumption, lowering harmful emissions, and enabling cleaner running vehicles and environmentally friendly refrigerants. Modine is a global company headquartered in Racine, Wisconsin (U.S.), with operations in North America, South America, Europe, and Asia. For more information about Modine, visit www.modine.com.
Forward-looking Non-GAAP Financial Measure
Adjusted EBITDA margin is not a measure defined in generally accepted accounting principles (GAAP). This non-GAAP measure is not, and should not be viewed as, a substitute for the applicable GAAP measure, and may be different from similarly-titled measures used by other companies. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of net sales. The Company defines adjusted EBITDA as net earnings excluding interest expense, the provision or benefit for income taxes, depreciation and amortization expenses, other income and expense, restructuring expenses, impairment charges, and certain other gains or charges. The Company believes that adjusted EBITDA margin provides a relevant measure of profitability and earnings power and views it as being useful in assessing operating performance by excluding certain items that it believes are not representative of its core business.
The Company's fiscal 2027 target for adjusted EBITDA margin excludes the impact of certain cash and non-cash expenses or gains. These expenses and gains may be significant and include items such as restructuring expenses (including severance and equipment transfer costs), acquisition and integration costs, impairment charges and certain other items. Estimates of these expenses and gains for fiscal 2027 are not available due to the low visibility and unpredictability of these items.
Kathleen Powers
(262) 636-1687
[email protected]
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SOURCE Modine