Modine Manufacturing Company Q4 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Modine Manufacturing: Fiscal Q4 & Full-Year 2023 Earnings Summary

Quarterly Highlights (Q4 FY2023)

  • Sales of $618 million, up 8% year-over-year (11% on a constant currency basis).
  • Adjusted EBITDA of $66 million, up 16% versus Q4 FY2022.
  • Adjusted EPS of $0.67, an 18% increase from $0.57 last year.
  • Gross margin improved by 160 basis points driven by positive pricing and volume.
  • Free cash flow of $24 million.
  • GAAP EPS of $1.69, positively affected by a $57 million tax valuation allowance reversal.

Full-Year Highlights (FY2023)

  • Record sales of $2.3 billion (up 12% year-over-year).
  • Record adjusted EBITDA of $212 million (up 34%).
  • EBITDA margin of 9.2%, up 150 basis points year-over-year.
  • Adjusted EPS of $1.95.
  • Free cash flow of $57 million (including $18 million of restructuring cash costs).
  • Net debt reduced to $286 million, leverage ratio improved to 1.4x.
  • 400,000 shares repurchased during FY2023.

Segment Performance

Climate Solutions

  • Full-year revenue up 11%, exceeding Investor Day target of 6%–8% growth.
  • Data center revenue up 60%, driven largely by North American chiller expansion.

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Operator: Good morning, ladies and gentlemen, and welcome to Modine's Fourth Quarter and Full Year Fiscal 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded. And I would now like to turn the conference over to your host, Ms. Kathy Powers, Vice President, Treasurer and Investor Relations. Thank you, Ms. Powers, you may begin. Kathy Powers: Good morning, and thank you for joining our conference call to discuss Modine's fourth quarter and full year fiscal 2023 results. I'm joined on this call by Neil Brinker, our President and Chief Executive Officer; and Mick Lucareli, our Executive Vice President and Chief Financial Officer. We will be using slides for today's presentation, which can be accessed either through the webcast link or by accessing the PDF file posted on the Investor Relations section of our website, modine.com. On Slide 3 is our notice regarding forward-looking statements. This call will contain forward-looking statements as outlined in our earnings release as well as in our company's filings with the Securities and Exchange Commission. With that, it is my pleasure to turn the call over to Neil. Neil Brinker: Thank you, Kathy, and good morning, everyone. We clearly surpassed our expectations this quarter and delivered record results with sales of $618 million, up 8% and up 11% o

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