Modine Manufacturing Company (NYSE:MOD) Q2 2024 Earnings Conference Call November 2, 2023 11:00 AM ET

Company Participants

Kathy Powers – Vice President, Treasurer and Investor Relations

Neil Brinker – President and Chief Executive Officer

Mick Lucareli – Executive Vice President and Chief Financial Officer

Conference Call Participants

Matt Summerville – D.A. Davidson

Chris Moore – CJS Securities

Jeff Van Sinderen – B. Riley Securities

Tim Moore – EF Hutton

Kathy Powers

Good morning, and thank you for joining our conference call to discuss Modine’s Second Quarter Fiscal 2024 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’ll be using slides with 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’s my pleasure to turn the call over to Neil.

Neil Brinker

Thank you, Kathy, and good morning, everyone. I’m pleased to report another strong quarter with both solid revenue growth and earnings improvements that came in ahead of our expectations. Sales increased 7% from the prior year, driven by increases in both the Climate Solutions and Performance Technologies segment.

In addition, we reported adjusted EBITDA of $81.2 million, an increase of 59% from the prior year. EBITDA margin was 13.1%, a 430-basis point improvement from the prior year. As a reminder, last year we set a goal to significantly improve our EBITDA margins, targeting a range of 10% to 12% by the end of the fiscal year, and reaching 13% to 15% range by the end of fiscal 2027.

We are clearly ahead of these targets, driven by a combination of key factors, including using 80/20 principles to guide decision-making throughout the organization, allocating additional resources to targeted higher-margin businesses, and focusing on the value we bring to our customers and leveraging that to drive margin improvement and profitable growth. I’m very proud of what the organization has been able to accomplish in a short period of time.

I continue to believe that we remain in the early stages of our transformation as we see medium to long-term opportunities for sustainable growth that will continue to improve our financial profile.