Modine (MOD) Q4 2026: Record Sales and Earnings Growth — Strongly Positive

Modine (NYSE: MOD) reported impressive fourth-quarter results for fiscal 2026, achieving record financial metrics that highlight the company's robust growth trajectory. The quarter saw net sales reach $954.4 million, an increase of $307.2 million, or 47 percent from the prior year. This performance marks a significant milestone as it represents the fourth consecutive year of record financial results for the company.

Key Financial Metrics

• Net Sales: $954.4 million, up $307.2 million or +47% YoY (from $647.2 million)
• Net Earnings: $73.6 million, up $23.5 million or +47% YoY (from $50.1 million)
• Earnings Per Share (EPS): $1.36, up $0.44 or +48% YoY (from $0.92)
• Adjusted EBITDA: $146.1 million, up $42.0 million or +40% YoY (from $104.1 million)
• Adjusted EPS: $1.71, up $0.59 or +53% YoY (from $1.12)

This quarter's results are undoubtedly positive for shareholders, reflecting strong operational execution and demand, particularly in the Climate Solutions segment, which saw sales increase by 87 percent to $665.9 million. The growth was primarily driven by heightened demand from data center customers and contributions from recent acquisitions.

Full-Year Performance

For the full fiscal year 2026, Modine reported:

• Net Sales: $3.2 billion, up $597.6 million or +23% YoY (from $2.6 billion)
• Net Earnings: $123.3 million, down $62.2 million or -34% YoY (from $185.5 million), impacted by a $116.1 million non-cash pension termination charge.
• Earnings Per Share: $2.26, down $1.16 or -34% YoY (from $3.42)
• Adjusted EBITDA: $471.0 million, up $78.9 million or +20% YoY (from $392.1 million)
• Adjusted EPS: $5.02, up $0.97 or +24% YoY (from $4.05)

While the full-year net earnings and EPS declined due to the pension charge, the adjusted metrics indicate a strong underlying performance, particularly in operational profitability.

Cost Management and Operational Insights

The gross profit for the fourth quarter increased by 29 percent to $214.7 million, although the gross margin decreased by 320 basis points to 22.5 percent. This decline was attributed to higher temporary costs associated with capacity expansion for data center products, increased tariffs, and rising material costs. Selling, general, and administrative expenses rose by 25 percent to $101.7 million, reflecting investments in growth and the costs associated with the pending spin-off of the Performance Technologies segment.

Shareholder Returns and Future Outlook

Modine has not announced any changes to its dividend or share buyback programs in this release. However, the company provided an optimistic outlook for fiscal 2027, projecting:

• Net Sales Growth: Between 20 percent and 35 percent
• Adjusted EBITDA: Expected to range from $650 million to $680 million, indicating growth between 38 percent and 44 percent.

Conclusion and Forward-Looking Catalysts

Investors should closely monitor Modine's progress in executing its strategic initiatives, particularly the capacity expansion in the Climate Solutions segment and the pending spin-off of the Performance Technologies business. The strong demand for data center products and the recent long-term agreement for chiller sales with a major hyperscale customer are key indicators of future growth potential. As Modine continues to evolve its portfolio and focus on high-growth areas, the upcoming quarters are likely to provide further insights into the company's ability to sustain its momentum and deliver value to shareholders.

Modine Manufacturing Company Condensed Consolidated Statements of Operations (In millions)

Note: All amounts are in thousands/millions.

	Three months ended March 31, 2026	Three months ended March 31, 2025	Twelve months ended March 31, 2026	Twelve months ended March 31, 2025
Net sales	$ 954.4	$ 647.2	$ 3,181.1	$ 2,583.5
Cost of sales	$ 739.7	$ 481.2	$ 2,450.0	$ 1,939.7
Gross profit	$ 214.7	$ 166.0	$ 731.1	$ 643.8
Selling, general & administrative expenses	$ 101.7	$ 81.5	$ 360.1	$ 332.1
Restructuring expenses	$ 5.2	$ 10.0	$ 20.6	$ 28.2
Impairment charge	$ —	$ —	$ 4.1	$ —
Loss on sale of assets	$ 3.9	$ —	$ 3.9	$ —
Operating income	$ 103.9	$ 74.5	$ 342.4	$ 283.5
Interest expense	$ -8.6	$ -5.3	$ -31.6	$ -26.4
Pension termination charge	$ —	$ —	$ -116.1	$ —
Other income (expense) – net	$ 0.3	$ -2.4	$ -8.2	$ -3.1
Earnings before income taxes	$ 95.6	$ 66.8	$ 186.5	$ 254.0
Provision for income taxes	$ -22.0	$ -16.7	$ -63.2	$ -68.5
Net earnings	$ 73.6	$ 50.1	$ 123.3	$ 185.5
Net earnings attributable to noncontrolling interest	$ -0.3	$ -0.5	$ -1.8	$ -1.5
Net earnings attributable to Modine	$ 73.3	$ 49.6	$ 121.5	$ 184.0
Net earnings per share attributable to Modine shareholders – diluted	$ 1.36	$ 0.92	$ 2.26	$ 3.42
Weighted shares outstanding – diluted	54.0	53.9	53.8	53.9

Modine Manufacturing Company Condensed Consolidated Balance Sheets (In millions)

Note: All amounts are in thousands/millions.

	March 31, 2026	March 31, 2025
Assets
Cash and cash equivalents	$ 73.5	$ 71.6
Trade receivables	$ 731.0	$ 478.9
Inventories	$ 506.1	$ 340.9
Other current assets	$ 105.5	$ 69.8
Total current assets	$ 1,416.1	$ 961.2
Property, plant and equipment – net	$ 520.9	$ 390.5
Intangible assets – net	$ 197.0	$ 146.7
Goodwill	$ 292.1	$ 233.9
Deferred income taxes	$ 85.3	$ 67.0
Other noncurrent assets	$ 163.2	$ 118.3
Total assets	$ 2,674.6	$ 1,917.6
Liabilities and shareholders’ equity
Debt due within one year	$ 51.4	$ 54.1
Accounts payable	$ 464.8	$ 290.8
Other current liabilities	$ 212.7	$ 196.1
Total current liabilities	$ 728.9	$ 541.0
Long-term debt	$ 384.9	$ 296.7
Other noncurrent liabilities	$ 358.0	$ 161.7
Total liabilities	$ 1,471.8	$ 999.4
Total equity	$ 1,202.8	$ 918.2
Total liabilities & equity	$ 2,674.6	$ 1,917.6

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