Modine Manufacturing Company Q4 FY2025 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Modine delivered its third consecutive year of record sales and profitability.
  • Full-year adjusted EBITDA increased 25% on 7% revenue growth compared to FY24.
  • Climate Solutions surpassed Performance Technologies in revenue for the first time in company history.
  • Q4 adjusted EBITDA margin reached 16.1%, a 300 bps improvement year over year.

Climate Solutions Segment

  • FY25 revenue grew 30% and adjusted EBITDA grew 45% year over year.
  • Adjusted EBITDA margin improved 220 bps to 21% for the year; 290 bps to 21.4% in Q4.
  • Data center revenue grew 119% to $644M for FY25; organic growth represented roughly half of the increase.
  • Scott Springfield contributed $197M to FY25 data center revenue.
  • North America data center demand continues to surge; Modine is increasing chiller production capacity in Virginia and Mississippi.
  • New modular data center cooling solution launching; first U.S. order expected soon.
  • India expansion on track for Q2 FY26 production start.
  • Acquisition pipeline active; AbsolutAire acquisition completed.

Performance Technologies Segment

  • FY25 adjusted EBITDA margin improved 200 bps to 13.5%, despite weak markets.
  • Q4 adjusted EBITDA margin reached 15% driven by restructuring and cost reductions.

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Operator: Good morning, ladies and gentlemen. And welcome to Modine's Fourth Quarter and Fiscal Year 2025 Earnings Conference Call [Operator Instructions]. As a reminder, this conference call is being recorded. I would now like to turn the call over to your host, Ms. Kathy Powers, Vice President, Treasurer and Investor Relations. Thank you. You may begin. Kathy Powers: Good morning. And welcome to our conference call to discuss Modine's fourth quarter and full year fiscal 2025 results. I'm joined by Neil Brinker, our President and Chief Executive Officer; and Mick Lucareli, our Executive Vice President and Chief Financial Officer. The slides that we will be using for today's presentation are available on the Investor Relations section of our Web site, modine.com. On Slide 3 of the deck 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, I'll turn the call over to Neil. Neil Brinker: Thank you, Kathy. And good morning, everyone. We closed out the year with a strong fourth quarter performance. This was another record year for Modine with the highest reported sales and profitability in our history for the third year in a row. For the past three years, our strategy has been to shift our business mix to drive top line growth and expand EBITDA margin. We've made significant investments in order to spur this

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