Modine Manufacturing Company Q1 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Leadership & Strategic Updates

  • Announced CEO transition: Tom Burke stepped down; CFO Mick Lucareli appointed Interim President & CEO. Burke will remain as advisor until August 28, 2020.
  • Board has engaged an external search firm and will evaluate both internal and external CEO candidates.
  • Company reaffirmed commitment to its industrial strategy, including exiting the automotive business.
  • Automotive business has been carved out as its own segment to support divestiture efforts; re-engagement with buyers has resumed post-COVID interruptions.

Companywide Q1 FY21 Financial Performance

  • Revenue declined 34% year-over-year (down $181M), aligned with expectations due to widespread COVID-related shutdowns.
  • Gross profit: $46M, down $37M from the prior year; gross margin at 13.3%.
  • SG&A expenses reduced by 30% year-over-year (down $19M), primarily from lower automotive-exit costs, labor reductions, and discretionary cuts.
  • Adjusted EBITDA: $20M, down $27M YoY.
  • Adjusted EPS: -$0.09, down $0.40 YoY.
  • Free cash flow: +$3.2M, a $23M year-over-year improvement—unusual for Q1, which typically shows negative cash flow.
  • Capital expenditures reduced and expected to be 25% lower for FY21.
  • Net debt slightly reduced; leverage ratio at 2.9× remains within covenant limits.

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Operator: Good morning, ladies and gentlemen. And welcome to Modine Manufacturing Company's First Quarter Fiscal 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Ms. Kathy Powers, Vice President, Treasury, Investor Relations and Tax. Please go ahead, madam. Kathleen Powers: Good morning. And thank you for joining our conference call to discuss Modine's first quarter fiscal 2021 results. I am here with Vice President, Finance and Chief Financial Officer, Mick Lucareli. Last night, we issued a press release announcing a CEO transition plan which included the announcement that Mick has also been named Interim President and Chief Executive Officer effective immediately, while the Board conducts a search for a permanent CEO. The Board is very thankful for the more than 12 years that Tom Burke served as President and CEO, and he will remain with the company in an advisory role until August 28, 2020, to ensure a smooth transition. The Board decided that this was the right time to make a leadership change and is committed to finding the right leader that will execute our industrial strategy and accelerate Modine's future growth. We remain committed to our current strategy, including the exit of the automotive business.

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