WISCONSIN
|
39-0482000
|
|
(State
or other jurisdiction of incorporation or
organization)
|
(I.R.S.
Employer Identification No.)
|
|
1500
DeKoven Avenue, Racine, Wisconsin
|
53403
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
PART I. |
1
|
|
Item
1.
|
1
|
|
Item
2.
|
25
|
|
Item
3.
|
34
|
|
Item
4.
|
38
|
|
PART II. |
39
|
|
Item
1.
|
39
|
|
Item
2.
|
39
|
|
Item
4.
|
40
|
|
Item
6.
|
41
|
|
SIGNATURE |
42
|
MODINE
MANUFACTURING COMPANY
|
|||
CONSOLIDATED
STATEMENTS OF EARNINGS
|
|||
For
the three months ended June 30, 2008 and 2007
|
|||
(In
thousands, except per share amounts)
|
|||
(Unaudited)
|
Three months ended
June 30
|
||||||||
2008
|
2007
|
|||||||
Net
sales
|
$ | 499,719 | $ | 444,236 | ||||
Cost
of sales
|
421,419 | 373,881 | ||||||
Gross
profit
|
78,300 | 70,355 | ||||||
Selling,
general and administrative expenses
|
62,822 | 56,361 | ||||||
Restructuring
income
|
(52 | ) | (240 | ) | ||||
Impairment
of long-lived assets
|
134 | - | ||||||
Income
from operations
|
15,396 | 14,234 | ||||||
Interest
expense
|
3,126 | 2,775 | ||||||
Other
income – net
|
(2,172 | ) | (3,249 | ) | ||||
Earnings
from continuing operations before income taxes
|
14,442 | 14,708 | ||||||
Provision
for income taxes
|
7,679 | 3,961 | ||||||
Earnings
from continuing operations
|
6,763 | 10,747 | ||||||
Earnings
from discontinued operations (net of income taxes)
|
175 | 254 | ||||||
Gain
on sale of discontinued operations (net of income taxes)
|
849 | - | ||||||
Net
earnings
|
$ | 7,787 | $ | 11,001 | ||||
|
||||||||
Earnings
per share of common stock – basic:
|
||||||||
Continuing
operations
|
$ | 0.21 | $ | 0.33 | ||||
Earnings
from discontinued operations
|
- | 0.01 | ||||||
Gain
on sale of discontinued operations
|
0.03 | - | ||||||
Net
earnings – basic
|
$ | 0.24 | $ | 0.34 | ||||
|
||||||||
Earnings
per share of common stock – diluted:
|
||||||||
Continuing
operations
|
$ | 0.21 | $ | 0.33 | ||||
Earnings
from discontinued operations
|
- | 0.01 | ||||||
Gain
on sale of discontinued operations
|
0.03 | - | ||||||
Net
earnings – diluted
|
$ | 0.24 | $ | 0.34 | ||||
Dividends
per share
|
$ | 0.100 | $ | 0.175 |
MODINE
MANUFACTURING COMPANY
|
||||
CONSOLIDATED
BALANCE SHEETS
|
||||
June
30, 2008 and March 31, 2008
|
||||
(In
thousands, except per share amounts)
|
||||
(Unaudited)
|
June 30, 2008
|
March 31, 2008
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 45,072 | $ | 38,595 | ||||
Short
term investments
|
2,373 | 2,909 | ||||||
Trade
receivables, less allowance for doubtful accounts of $1,741 and
$2,218
|
288,318 | 294,935 | ||||||
Inventories
|
136,694 | 125,499 | ||||||
Assets
held for sale
|
- | 6,871 | ||||||
Deferred
income taxes and other current assets
|
72,254 | 64,482 | ||||||
Total
current assets
|
544,711 | 533,291 | ||||||
Noncurrent
assets:
|
||||||||
Property,
plant and equipment – net
|
541,108 | 540,536 | ||||||
Investment
in affiliates
|
21,764 | 23,692 | ||||||
Goodwill
|
46,196 | 44,832 | ||||||
Intangible
assets – net
|
9,851 | 10,485 | ||||||
Assets
held for sale
|
- | 5,522 | ||||||
Other
noncurrent assets
|
10,868 | 9,925 | ||||||
Total
noncurrent assets
|
629,787 | 634,992 | ||||||
Total
assets
|
$ | 1,174,498 | $ | 1,168,283 | ||||
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Short-term
debt
|
$ | 11 | $ | 4,352 | ||||
Long-term
debt – current portion
|
381 | 248 | ||||||
Accounts
payable
|
201,822 | 193,228 | ||||||
Accrued
compensation and employee benefits
|
71,510 | 68,885 | ||||||
Income
taxes
|
10,732 | 16,562 | ||||||
Liabilities
of business held for sale
|
- | 3,093 | ||||||
Accrued
expenses and other current liabilities
|
52,059 | 52,546 | ||||||
Total
current liabilities
|
336,515 | 338,914 | ||||||
Noncurrent
liabilities:
|
||||||||
Long-term
debt
|
229,122 | 227,013 | ||||||
Deferred
income taxes
|
23,735 | 23,634 | ||||||
Pensions
|
33,650 | 34,142 | ||||||
Postretirement
benefits
|
26,370 | 26,669 | ||||||
Liabilities
of business held for sale
|
- | 166 | ||||||
Other
noncurrent liabilities
|
33,699 | 34,627 | ||||||
Total
noncurrent liabilities
|
346,576 | 346,251 | ||||||
Total
liabilities
|
683,091 | 685,165 | ||||||
Commitments
and contingencies (See Note 20)
|
||||||||
Shareholders'
equity:
|
||||||||
Preferred
stock, $0.025 par value, authorized 16,000 shares, issued -
none
|
- | - | ||||||
Common
stock, $0.625 par value, authorized 80,000 shares, issued 32,788
shares, respectively
|
20,492 | 20,492 | ||||||
Additional
paid-in capital
|
70,089 | 69,346 | ||||||
Retained
earnings
|
350,529 | 345,966 | ||||||
Accumulated
other comprehensive income
|
64,380 | 61,058 | ||||||
Treasury
stock at cost: 526 and 495 shares
|
(13,788 | ) | (13,303 | ) | ||||
Deferred
compensation trust
|
(295 | ) | (441 | ) | ||||
Total
shareholders' equity
|
491,407 | 483,118 | ||||||
Total
liabilities and shareholders' equity
|
$ | 1,174,498 | $ | 1,168,283 |
MODINE
MANUFACTURING COMPANY
|
|||
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||
For
the three months ended June 30, 2008 and 2007
|
|||
(In
thousands)
|
|||
(Unaudited)
|
Three months ended June 30
|
||||||||
2008
|
2007
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
earnings
|
$ | 7,787 | $ | 11,001 | ||||
Adjustments
to reconcile net earnings with net cash provided by (used
for) operating activities:
|
||||||||
Depreciation
and amortization
|
19,587 | 19,385 | ||||||
Other
– net
|
(913 | ) | (4,225 | ) | ||||
Net
changes in operating assets and liabilities, excluding dispositions
|
(11,343 | ) | (32,979 | ) | ||||
Net
cash provided by (used for) operating activities
|
15,118 | (6,818 | ) | |||||
|
||||||||
Cash
flows from investing activities:
|
||||||||
Expenditures
for property, plant and equipment
|
(24,149 | ) | (14,423 | ) | ||||
Proceeds
from dispositions of assets
|
10,801 | 3,320 | ||||||
Settlement
of derivative contracts
|
657 | 1,322 | ||||||
Other
– net
|
2,968 | 232 | ||||||
Net
cash used for investing activities
|
(9,723 | ) | (9,549 | ) | ||||
|
||||||||
Cash
flows from financing activities:
|
||||||||
Short-term
debt – net
|
(4,215 | ) | (4,601 | ) | ||||
Additions
to long-term debt
|
13,191 | 34,606 | ||||||
Reductions
of long-term debt
|
(11,533 | ) | (14,661 | ) | ||||
Book
overdrafts
|
7,243 | (2,296 | ) | |||||
Repurchase
of common stock, treasury and retirement
|
(486 | ) | (412 | ) | ||||
Cash
dividends paid
|
(3,224 | ) | (5,671 | ) | ||||
Other
– net
|
5 | 25 | ||||||
Net
cash provided by financing activities
|
981 | 6,990 | ||||||
|
||||||||
Effect
of exchange rate changes on cash
|
101 | 484 | ||||||
Net
increase (decrease) in cash and cash equivalents
|
6,477 | (8,893 | ) | |||||
|
||||||||
Cash
and cash equivalents at beginning of period
|
38,595 | 26,207 | ||||||
Cash
and cash equivalents at end of period
|
$ | 45,072 | $ | 17,314 |
Three months ended June 30,
2007
|
||||||||||||
As
Reported
|
Adjustments
|
After Change
in Accounting Principle
|
||||||||||
Net
sales
|
$ | 444,073 | $ | 163 | $ | 444,236 | ||||||
Cost
of sales
|
373,103 | 778 | 373,881 | |||||||||
Gross
profit
|
70,970 | (615 | ) | 70,355 | ||||||||
Selling,
general and administrative expenses
|
54,962 | 1,399 | 56,361 | |||||||||
Restructuring
income
|
(240 | ) | - | (240 | ) | |||||||
Income
from operations
|
16,248 | (2,014 | ) | 14,234 | ||||||||
Interest
expense
|
2,789 | (14 | ) | 2,775 | ||||||||
Other
income – net
|
(4,129 | ) | 880 | (3,249 | ) | |||||||
Earnings
from continuing operations before income taxes
|
17,588 | (2,880 | ) | 14,708 | ||||||||
Provision
for income taxes
|
5,192 | (1,231 | ) | 3,961 | ||||||||
Earnings
from continuing operations
|
12,396 | (1,649 | ) | 10,747 | ||||||||
Earnings
from discontinued operations (net of income taxes)
|
254 | - | 254 | |||||||||
Net
earnings
|
$ | 12,650 | $ | (1,649 | ) | $ | 11,001 | |||||
Earnings
per share of common stock – basic:
|
||||||||||||
Continuing
operations
|
$ | 0.39 | $ | (0.06 | ) | $ | 0.33 | |||||
Earnings
from discontinued operations
|
- | 0.01 | 0.01 | |||||||||
Net
earnings – basic
|
$ | 0.39 | $ | (0.05 | ) | $ | 0.34 | |||||
|
||||||||||||
Earnings
per share of common stock – diluted:
|
||||||||||||
Continuing
operations
|
$ | 0.39 | $ | (0.06 | ) | $ | 0.33 | |||||
Earnings
from discontinued operations
|
- | 0.01 | 0.01 | |||||||||
Net
earnings – diluted
|
$ | 0.39 | $ | (0.05 | ) | $ | 0.34 |
March
31, 2008
|
||||||||||||
As
Reported
|
Adjustments
|
After Change
in Accounting Principle
|
||||||||||
ASSETS
|
||||||||||||
Current
assets:
|
||||||||||||
Cash
and cash equivalents
|
$ | 38,313 | $ | 282 | $ | 38,595 | ||||||
Short
term investments
|
2,909 | - | 2,909 | |||||||||
Trade
receivables
|
287,383 | 7,552 | 294,935 | |||||||||
Inventories
|
123,395 | 2,104 | 125,499 | |||||||||
Assets
held for sale
|
6,871 | - | 6,871 | |||||||||
Deferred
income taxes and other current assets
|
63,281 | 1,201 | 64,482 | |||||||||
Total
current assets
|
522,152 | 11,139 | 533,291 | |||||||||
Noncurrent
assets:
|
||||||||||||
Property,
plant and equipment – net
|
533,807 | 6,729 | 540,536 | |||||||||
Investment
in affiliates
|
23,150 | 542 | 23,692 | |||||||||
Goodwill
|
44,935 | (103 | ) | 44,832 | ||||||||
Intangible
assets – net
|
10,605 | (120 | ) | 10,485 | ||||||||
Assets
held for sale
|
5,522 | - | 5,522 | |||||||||
Other
noncurrent assets
|
9,687 | 238 | 9,925 | |||||||||
Total
noncurrent assets
|
627,706 | 7,286 | 634,992 | |||||||||
Total
assets
|
$ | 1,149,858 | $ | 18,425 | $ | 1,168,283 | ||||||
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
||||||||||||
Current
liabilities:
|
||||||||||||
Short-term
debt
|
$ | 11 | $ | 4,341 | $ | 4,352 | ||||||
Long-term
debt – current portion
|
292 | (44 | ) | 248 | ||||||||
Accounts
payable
|
199,593 | (6,365 | ) | 193,228 | ||||||||
Accrued
compensation and employee benefits
|
65,167 | 3,718 | 68,885 | |||||||||
Income
taxes
|
11,583 | 4,979 | 16,562 | |||||||||
Liabilities
of business held for sale
|
3,093 | - | 3,093 | |||||||||
Accrued
expenses and other current liabilities
|
55,661 | (3,115 | ) | 52,546 | ||||||||
Total
current liabilities
|
335,400 | 3,514 | 338,914 | |||||||||
Noncurrent
liabilities:
|
||||||||||||
Long-term
debt
|
226,198 | 815 | 227,013 | |||||||||
Deferred
income taxes
|
22,843 | 791 | 23,634 | |||||||||
Pensions
|
35,095 | (953 | ) | 34,142 | ||||||||
Postretirement
benefits
|
26,669 | - | 26,669 | |||||||||
Liabilities
of business held for sale
|
166 | - | 166 | |||||||||
Other
noncurrent liabilities
|
35,579 | (952 | ) | 34,627 | ||||||||
Total
noncurrent liabilities
|
346,550 | (299 | ) | 346,251 | ||||||||
Total
liabilities
|
681,950 | 3,215 | 685,165 | |||||||||
Shareholders'
equity:
|
||||||||||||
Preferred
stock
|
- | - | - | |||||||||
Common
stock
|
20,492 | - | 20,492 | |||||||||
Additional
paid-in capital
|
69,346 | - | 69,346 | |||||||||
Retained
earnings
|
342,490 | 3,476 | 345,966 | |||||||||
Accumulated
other comprehensive income
|
49,324 | 11,734 | 61,058 | |||||||||
Treasury
stock
|
(13,303 | ) | - | (13,303 | ) | |||||||
Deferred
compensation trust
|
(441 | ) | - | (441 | ) | |||||||
Total
shareholders' equity
|
467,908 | 15,210 | 483,118 | |||||||||
Total
liabilities and shareholders' equity
|
$ | 1,149,858 | $ | 18,425 | $ | 1,168,283 |
Three months ended
June 30, 2007
|
||||||||||||
As
Reported
|
Adjustments
|
After Change
in Accounting Principle
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
earnings
|
$ | 12,650 | $ | (1,649 | ) | $ | 11,001 | |||||
Adjustments
to reconcile net earnings with net cash used for operating
activities:
|
||||||||||||
Depreciation
and amortization
|
19,225 | 160 | 19,385 | |||||||||
Other
– net
|
(4,225 | ) | - | (4,225 | ) | |||||||
Net
changes in operating assets and liabilities
|
(28,895 | ) | (4,084 | ) | (32,979 | ) | ||||||
Net
cash used for operating activities
|
(1,245 | ) | (5,573 | ) | (6,818 | ) | ||||||
Cash
flows from investing activities:
|
||||||||||||
Expenditures
for property, plant and equipment
|
(13,974 | ) | (449 | ) | (14,423 | ) | ||||||
Proceeds
from dispositions of assets
|
3,320 | - | 3,320 | |||||||||
Settlement
of derivative contracts
|
1,322 | - | 1,322 | |||||||||
Other
– net
|
232 | - | 232 | |||||||||
Net
cash used for investing activities
|
(9,100 | ) | (449 | ) | (9,549 | ) | ||||||
|
||||||||||||
Cash
flows from financing activities:
|
||||||||||||
Short-term
debt
|
(454 | ) | (4,147 | ) | (4,601 | ) | ||||||
Additions
to long-term debt
|
34,606 | - | 34,606 | |||||||||
Reductions
of long-term debt
|
(14,661 | ) | - | (14,661 | ) | |||||||
Book
overdrafts
|
(2,296 | ) | - | (2,296 | ) | |||||||
Repurchase
of common stock, treasury and retirement
|
(412 | ) | - | (412 | ) | |||||||
Cash
dividends paid
|
(5,671 | ) | - | (5,671 | ) | |||||||
Other
– net
|
25 | - | 25 | |||||||||
Net
cash provided by financing activities
|
11,137 | (4,147 | ) | 6,990 | ||||||||
|
||||||||||||
Effect
of exchange rate changes on cash
|
617 | (133 | ) | 484 | ||||||||
Net
increase (decrease) in cash and cash equivalents
|
1,409 | (10,302 | ) | (8,893 | ) | |||||||
|
||||||||||||
Cash
and cash equivalents at beginning of period
|
21,227 | 4,980 | 26,207 | |||||||||
Cash
and cash equivalents at end of period
|
$ | 22,636 | $ | (5,322 | ) | $ | 17,314 |
Pension
plans
|
Postretirement
plans
|
|||||||||||||||
For
the three months ended June 30,
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Service
cost
|
$ | 700 | $ | 787 | $ | 63 | $ | 83 | ||||||||
Interest
cost
|
3,492 | 3,846 | 464 | 447 | ||||||||||||
Expected
return on plan assets
|
(4,535 | ) | (4,699 | ) | - | - | ||||||||||
Amortization
of:
|
||||||||||||||||
Unrecognized
net loss
|
853 | 1,532 | 94 | 122 | ||||||||||||
Unrecognized
prior service cost (benefit)
|
74 | (24 | ) | 6 | - | |||||||||||
Unrecognized
net asset
|
- | (7 | ) | - | - | |||||||||||
Net
periodic benefit cost
|
$ | 584 | $ | 1,435 | $ | 627 | $ | 652 |
Three months ended
June 30,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Number
|
Fair
Value
|
Number
|
Fair
Value
|
|||||||||||||
Type
of award
|
Granted
|
Per Award
|
Granted
|
Per Award
|
||||||||||||
Common
stock options
|
- | $ | - | 0.3 | $ | 5.30 | ||||||||||
Restricted
common stock - retention
|
3.6 | $ | 16.84 | - | $ | - | ||||||||||
Restricted
common stock - performance based upon
total shareholder return compared to the S&P
500
|
101.8 | $ | 19.49 | 79.9 | $ | 23.60 | ||||||||||
Restricted
common stock - performance based upon
cumulative earnings per share
|
209.2 | $ | 16.66 | - | $ | - |
Three months ended
June 30,
|
||||||||||||
2008
|
2007
|
|||||||||||
Performance
Awards
|
Options
|
Performance
Awards
|
||||||||||
Expected
life of awards in years
|
3 | 5 | 3 | |||||||||
Risk-free
interest rate
|
2.68 | % | 4.58 | % | 4.57 | % | ||||||
Expected
volatility of the Company's stock
|
36.00 | % | 28.51 | % | 29.60 | % | ||||||
Expected
dividend yield on the Company's stock
|
2.50 | % | 3.32 | % | 2.88 | % | ||||||
Expected
forfeiture rate
|
1.50 | % | 1.50 | % | 1.50 | % |
Type
of award
|
Unrecognized
Compenstion
Costs
|
Weighted
Average Remaining Service Period in Years
|
||||||
Common
stock options
|
$ | 93 | 2.3 | |||||
Restricted
common stock - retention
|
3,586 | 2.3 | ||||||
Restricted
common stock - performance
|
6,331 | 2.5 | ||||||
Total
|
$ | 10,010 | 2.4 |
Three months ended June 30
|
||||||||
2008
|
2007
|
|||||||
Equity
in earnings of non-consolidated affiliates
|
$ | 889 | $ | 689 | ||||
Interest
income
|
512 | 276 | ||||||
Foreign
currency transactions
|
456 | 2,096 | ||||||
Other
non-operating income - net
|
315 | 188 | ||||||
Total
other income - net
|
$ | 2,172 | $ | 3,249 |
Domestic
|
Foreign
|
Total
|
%
|
|||||||||||||
(Loss)
earnings from continuing operations before income
taxes
|
$ | (17,150 | ) | $ | 31,592 | $ | 14,442 | |||||||||
(Benefit
from) provision for income taxes at federal statutory
rate
|
$ | (6,002 | ) | $ | 11,057 | $ | 5,055 | 35.0 | % | |||||||
State
taxes, net of federal benefit
|
(525 | ) | - | (525 | ) | (3.6 | ) | |||||||||
Taxes
on non-U.S. earnings and losses
|
- | (2,237 | ) | (2,237 | ) | (15.5 | ) | |||||||||
Valuation
allowance
|
4,755 | 572 | 5,327 | 36.9 | ||||||||||||
Other,
net
|
(78 | ) | 137 | 59 | 0.4 | |||||||||||
(Benefit
from) provision for income taxes
|
$ | (1,850 | ) | $ | 9,529 | $ | 7,679 | 53.2 | % |
Three months ended June 30
|
||||||||
2008
|
2007
|
|||||||
Numerator:
|
||||||||
Earnings
from continuing operations
|
$ | 6,763 | $ | 10,747 | ||||
Earnings
from discontinued operations
|
175 | 254 | ||||||
Gain
on sale of discontinued operations
|
849 | - | ||||||
Net
earnings
|
$ | 7,787 | $ | 11,001 | ||||
Denominator:
|
||||||||
Weighted
average shares outstanding – basic
|
32,039 | 32,112 | ||||||
Effect
of dilutive securities
|
82 | 57 | ||||||
Weighted
average shares outstanding – diluted
|
32,121 | 32,169 | ||||||
|
||||||||
Net
earnings per share of common stock – basic:
|
||||||||
Continuing
operations
|
$ | 0.21 | $ | 0.33 | ||||
Earnings
from discontinued operations
|
- | 0.01 | ||||||
Gain
on sale of discontinued operations
|
0.03 | - | ||||||
Net
earnings – basic
|
$ | 0.24 | $ | 0.34 | ||||
Net
earnings per share of common stock – diluted:
|
||||||||
Continuing
operations
|
$ | 0.21 | $ | 0.33 | ||||
Earnings
from discontinued operations
|
- | 0.01 | ||||||
Gain
on sale of discontinued operations
|
0.03 | - | ||||||
Net
earnings – diluted
|
$ | 0.24 | $ | 0.34 |
Three months ended June 30
|
||||||||
2008
|
2007
|
|||||||
Net
earnings
|
$ | 7,787 | $ | 11,001 | ||||
Foreign
currency translation
|
2,825 | 7,031 | ||||||
Cash
flow hedges
|
(143 | ) | (1,400 | ) | ||||
Change
in SFAS No. 158 benefit plan adjustment
|
640 | 974 | ||||||
Total
comprehensive earnings
|
$ | 11,109 | $ | 17,606 |
June 30, 2008
|
March 31, 2008
|
|||||||
Raw
materials and work in process
|
$ | 103,407 | $ | 96,973 | ||||
Finished
goods
|
33,287 | 28,526 | ||||||
Total
inventories
|
$ | 136,694 | $ | 125,499 |
June 30, 2008
|
March 31, 2008
|
|||||||
Gross
property, plant and equipment
|
$ | 1,202,274 | $ | 1,188,563 | ||||
Less
accumulated depreciation
|
(661,166 | ) | (648,027 | ) | ||||
Net
property, plant and equipment
|
$ | 541,108 | $ | 540,536 |
Three months ended June 30
|
||||||||
2008
|
2007
|
|||||||
Restructuring
Liability:
|
||||||||
Balance,
April 1
|
$ | 5,161 | $ | 2,313 | ||||
Additions
|
187 | 209 | ||||||
Adjustments
|
(239 | ) | (449 | ) | ||||
Payments
|
(567 | ) | (176 | ) | ||||
Balance,
June 30
|
$ | 4,542 | $ | 1,897 |
Three months ended June 30
|
||||||||
2008
|
2007
|
|||||||
Restructuring Income: | ||||||||
Employee
severance and related benefits
|
$ | (52 | ) | $ | (240 | ) | ||
Other repositioning costs: | ||||||||
Consulting
fees
|
1,257 | - | ||||||
Miscellaneous
other closure costs
|
1,459 | 450 | ||||||
Total restructuring and other repositioning costs | $ | 2,664 | $ | 210 |
March 31, 2008
|
||||
Assets
held for sale:
|
||||
Receivables
- net
|
$ | 4,371 | ||
Inventories
|
2,500 | |||
Total
current assets held for sale
|
6,871 | |||
Property,
plant and equipment - net
|
2,735 | |||
Goodwill
|
2,781 | |||
Other
noncurrent assets
|
6 | |||
Total
noncurrent assets held for sale
|
5,522 | |||
Total
assets held for sale
|
$ | 12,393 | ||
Liabilities
of business held for sale:
|
||||
Accounts
payable
|
$ | 1,284 | ||
Accrued
expenses and other current liabilities
|
1,809 | |||
Total
current liabilities of business held for sale
|
3,093 | |||
Other
noncurrent liabilities
|
166 | |||
Total
liabilities of business held for sale
|
$ | 3,259 |
Period
of April 1, 2008
to May 1, 2008
|
Three
months ended June 30, 2007
|
|||||||
Net
sales
|
$ | 2,320 | $ | 7,544 | ||||
Cost
of sales and other expenses
|
2,067 | 7,241 | ||||||
Earnings
before income taxes
|
253 | 303 | ||||||
Provision
for income taxes
|
78 | 49 | ||||||
Earnings
from discontinued operations
|
$ | 175 | $ | 254 |
OE
-
|
OE
-
|
South
|
Commercial
|
|||||||||||||||||
Asia
|
Europe
|
America
|
Products
|
Total
|
||||||||||||||||
Balance,
March 31, 2008
|
$ | 522 | $ | 10,518 | $ | 14,066 | $ | 19,726 | $ | 44,832 | ||||||||||
Fluctuations
in foreign currency
|
(1 | ) | (30 | ) | 1,327 | 68 | 1,364 | |||||||||||||
Balance,
June 30, 2008
|
$ | 521 | $ | 10,488 | $ | 15,393 | $ | 19,794 | $ | 46,196 |
June
30, 2008
|
March
31, 2008
|
|||||||||||||||||||||||
Gross
|
Net
|
Gross
|
Net
|
|||||||||||||||||||||
Carrying
|
Accumulated
|
Intangible
|
Carrying
|
Accumulated
|
Intangible
|
|||||||||||||||||||
Value
|
Amortization
|
Assets
|
Value
|
Amortization
|
Assets
|
|||||||||||||||||||
Amortized
intangible assets:
|
||||||||||||||||||||||||
Patents
and product technology
|
$ | 3,952 | $ | (3,761 | ) | $ | 191 | $ | 3,952 | $ | (3,696 | ) | $ | 256 | ||||||||||
Trademarks
|
10,635 | (2,245 | ) | 8,390 | 10,605 | (2,062 | ) | 8,543 | ||||||||||||||||
ther
intangibles
|
445 | (238 | ) | 207 | 511 | (196 | ) | 315 | ||||||||||||||||
Total
amortized intangible assets
|
15,032 | (6,244 | ) | 8,788 | 15,068 | (5,954 | ) | 9,114 | ||||||||||||||||
Unamortized
intangible assets:
|
||||||||||||||||||||||||
Tradename
|
1,063 | - | 1,063 | 1,371 | - | 1,371 | ||||||||||||||||||
Total
intangible assets
|
$ | 16,095 | $ | (6,244 | ) | $ | 9,851 | $ | 16,439 | $ | (5,954 | ) | $ | 10,485 |
Estimated
|
|
Fiscal
|
Amortization
|
Year
|
Expense
|
Remainder
of 2009
|
$807
|
2010
|
1,079
|
2011
|
821
|
2012
|
821
|
2013
|
728
|
2014
& Beyond
|
4,532
|
|
·
|
$1,121
loan to its wholly owned subsidiary, Modine Thermal Systems India,
that matures on April 30, 2013;
|
|
·
|
$9,150
between two loans to its wholly owned subsidiary, Modine Thermal
Systems Co (Changzhou, China), with various maturity dates through June
2012; and
|
|
·
|
$1,759
loan to its wholly owned subsidiary, Modine Thermal Systems Shanghai,
that matures on January 19, 2009.
|
|
·
|
Level
1 – Quoted prices for identical instruments in active
markets.
|
|
·
|
Level
2 – Quoted prices for similar instruments in active markets; quoted prices
for identical or similar instruments in markets that are not active; and
model-derived valuations in which all significant inputs or significant
value-drivers are observable in active
markets.
|
|
·
|
Level
3 – Model-derived valuations in which one or more significant inputs or
significant value-drivers are
unobservable.
|
Level
1
|
Level
2
|
Level
3
|
Total Assets
/ Liabilities at Fair Value
|
|||||||||||||
Assets:
|
||||||||||||||||
Trading
securities (short term investments)
|
$ | 2,373 | $ | - | $ | - | $ | 2,373 | ||||||||
Derivative
financial instruments
|
- | 3,557 | - | 3,557 | ||||||||||||
Total
assets
|
$ | 2,373 | $ | 3,557 | $ | - | $ | 5,930 | ||||||||
Liabilities:
|
||||||||||||||||
Derivative
financial instruments
|
$ | - | $ | 443 | $ | - | $ | 443 | ||||||||
Deferred
compensation obligation
|
- | 2,654 | - | 2,654 | ||||||||||||
Total
liabilitites
|
$ | - | $ | 3,097 | $ | - | $ | 3,097 |
Three months ended June 30
|
||||||||
2008
|
2007
|
|||||||
Balance,
April 1
|
$ | 15,790 | $ | 14,152 | ||||
Accruals
for warranties issued in current period
|
1,966 | 1,379 | ||||||
(Reversals)
accruals related to pre-existing warranties
|
(374 | ) | 213 | |||||
Settlements
made
|
(3,877 | ) | (2,566 | ) | ||||
Effect
of exchange rate changes
|
10 | 127 | ||||||
Balance,
June 30
|
$ | 13,515 | $ | 13,305 |
Three months ended June 30
|
||||||||
2008
|
2007
|
|||||||
Sales
:
|
||||||||
Original
Equipment - Asia
|
$ | 65,639 | $ | 69,893 | ||||
Original
Equipment - Europe
|
217,128 | 176,801 | ||||||
Original
Equipment - North America
|
133,195 | 128,150 | ||||||
South
America
|
41,346 | 29,394 | ||||||
Commercial
Products
|
48,884 | 45,533 | ||||||
Fuel
Cell
|
1,144 | 439 | ||||||
Segment
sales
|
507,336 | 450,210 | ||||||
Corporate
and administrative
|
849 | 1,301 | ||||||
Eliminations
|
(8,466 | ) | (7,275 | ) | ||||
Sales
from continuing operations
|
$ | 499,719 | $ | 444,236 | ||||
Operating
earnings (loss):
|
||||||||
Original
Equipment - Asia
|
$ | (754 | ) | $ | 379 | |||
Original
Equipment - Europe
|
26,856 | 21,627 | ||||||
Original
Equipment - North America
|
(4,197 | ) | 1,043 | |||||
South
America
|
4,190 | 2,594 | ||||||
Commercial
Products
|
3,873 | 2,165 | ||||||
Fuel
Cell
|
(937 | ) | (651 | ) | ||||
Segment
earnings
|
29,031 | 27,157 | ||||||
Corporate
and administrative
|
(13,670 | ) | (12,963 | ) | ||||
Eliminations
|
35 | 40 | ||||||
Other
items not allocated to segments
|
(954 | ) | 474 | |||||
Earnings from
continuing operations before income taxes
|
$ | 14,442 | $ | 14,708 |
June 30, 2008
|
March 31, 2008
|
|||||||
Assets:
|
||||||||
Original
Equipment - Asia
|
$ | 145,777 | $ | 159,718 | ||||
Original
Equipment - Europe
|
501,607 | 489,512 | ||||||
Original
Equipment - North America
|
219,049 | 213,707 | ||||||
South
America
|
102,484 | 99,289 | ||||||
Commercial
Products
|
105,786 | 96,120 | ||||||
Fuel
Cell
|
1,817 | 1,737 | ||||||
Corporate
and administrative
|
110,474 | 118,316 | ||||||
Assets
held for sale
|
- | 12,393 | ||||||
Eliminations
|
(12,496 | ) | (22,509 | ) | ||||
Total
assets
|
$ | 1,174,498 | $ | 1,168,283 |
For
the three months ended June 30
|
2008
|
2007
|
||||||||||||||
(dollars
in millions)
|
$'s
|
%
of sales
|
$'s
|
%
of sales
|
||||||||||||
Net
sales
|
499.7 | 100.0 | % | 444.2 | 100.0 | % | ||||||||||
Cost
of sales
|
421.4 | 84.3 | % | 373.9 | 84.2 | % | ||||||||||
Gross
profit
|
78.3 | 15.7 | % | 70.3 | 15.8 | % | ||||||||||
Selling,
general and administrative expenses
|
62.8 | 12.6 | % | 56.3 | 12.7 | % | ||||||||||
Restructuring
income
|
- | - | (0.2 | ) | - | |||||||||||
Impairment
of long-lived assets
|
0.1 | 0.0 | % | - | - | |||||||||||
Income
from operations
|
15.4 | 3.1 | % | 14.2 | 3.2 | % | ||||||||||
Interest
expense
|
3.1 | 0.6 | % | 2.7 | 0.6 | % | ||||||||||
Other
income - net
|
(2.1 | ) | -0.4 | % | (3.2 | ) | -0.7 | % | ||||||||
Earnings
from continuing operations before income taxes
|
14.4 | 2.9 | % | 14.7 | 3.3 | % | ||||||||||
Provision
for income taxes
|
7.6 | 1.5 | % | 4.0 | 0.9 | % | ||||||||||
Earnings
from continuing operations
|
6.8 | 1.4 | % | 10.7 | 2.4 | % |
For
the three months ended June 30
|
2008
|
2007
|
||||||||||||||
(dollars
in millions)
|
$'s
|
%
of sales
|
$'s
|
%
of sales
|
||||||||||||
Net
sales
|
65.6 | 100.0 | % | 69.9 | 100.0 | % | ||||||||||
Cost
of sales
|
59.8 | 91.2 | % | 63.9 | 91.4 | % | ||||||||||
Gross
profit
|
5.8 | 8.8 | % | 6.0 | 8.6 | % | ||||||||||
Selling,
general and administrative expenses
|
6.6 | 10.1 | % | 5.6 | 8.0 | % | ||||||||||
(Loss)
income from continuing operations
|
(0.8 | ) | -1.2 | % | 0.4 | 0.6 | % |
For
the three months ended June 30
|
2008
|
2007
|
||||||||||||||
(dollars
in millions)
|
$'s
|
%
of sales
|
$'s
|
%
of sales
|
||||||||||||
Net
sales
|
217.1 | 100.0 | % | 176.8 | 100.0 | % | ||||||||||
Cost
of sales
|
175.4 | 80.8 | % | 142.0 | 80.3 | % | ||||||||||
Gross
profit
|
41.7 | 19.2 | % | 34.8 | 19.7 | % | ||||||||||
Selling,
general and administrative expenses
|
14.8 | 6.8 | % | 13.2 | 7.5 | % | ||||||||||
Income
from continuing operations
|
26.9 | 12.4 | % | 21.6 | 12.2 | % |
For
the three months ended June 30
|
2008
|
2007
|
||||||||||||||
(dollars
in millions)
|
$'s
|
%
of sales
|
$'s
|
%
of sales
|
||||||||||||
Net
sales
|
133.2 | 100.0 | % | 128.2 | 100.0 | % | ||||||||||
Cost
of sales
|
125.4 | 94.1 | % | 116.8 | 91.1 | % | ||||||||||
Gross
profit
|
7.8 | 5.9 | % | 11.4 | 8.9 | % | ||||||||||
Selling,
general and administrative expenses
|
12.0 | 9.0 | % | 10.6 | 8.3 | % | ||||||||||
Restructuring
income
|
(0.1 | ) | -0.1 | % | (0.2 | ) | -0.2 | % | ||||||||
Impairment
of long-lived assets
|
0.1 | 0.1 | % | - | 0.0 | % | ||||||||||
(Loss)
income from continuing operations
|
(4.2 | ) | -3.2 | % | 1.0 | 0.8 | % |
For
the three months ended June 30
|
2008
|
2007
|
||||||||||||||
(dollars
in millions)
|
$'s
|
%
of sales
|
$'s
|
%
of sales
|
||||||||||||
Net
sales
|
41.3 | 100.0 | % | 29.4 | 100.0 | % | ||||||||||
Cost
of sales
|
32.0 | 77.5 | % | 23.2 | 78.9 | % | ||||||||||
Gross
profit
|
9.3 | 22.5 | % | 6.2 | 21.1 | % | ||||||||||
Selling,
general and administrative expenses
|
5.1 | 12.3 | % | 3.6 | 12.2 | % | ||||||||||
Income
from continuing operations
|
4.2 | 10.2 | % | 2.6 | 8.8 | % |
For
the three months ended June 30
|
2008
|
2007
|
||||||||||||||
(dollars
in millions)
|
$'s
|
%
of sales
|
$'s
|
%
of sales
|
||||||||||||
Net
sales
|
48.9 | 100.0 | % | 45.5 | 100.0 | % | ||||||||||
Cost
of sales
|
38.1 | 77.9 | % | 36.1 | 79.3 | % | ||||||||||
Gross
profit
|
10.8 | 22.1 | % | 9.4 | 20.7 | % | ||||||||||
Selling,
general and administrative expenses
|
6.9 | 14.1 | % | 7.2 | 15.8 | % | ||||||||||
Income
from continuing operations
|
3.9 | 8.0 | % | 2.2 | 4.8 | % |
For
the three months ended June 30
|
2008
|
2007
|
||||||||||||||
(dollars
in millions)
|
$'s
|
%
of sales
|
$'s
|
%
of sales
|
||||||||||||
Net
sales
|
1.1 | 100.0 | % | 0.4 | 100.0 | % | ||||||||||
Cost
of sales
|
1.0 | 90.9 | % | 0.4 | 100.0 | % | ||||||||||
Gross
profit
|
0.1 | 9.1 | % | 0.0 | 0.0 | % | ||||||||||
Selling,
general and administrative expenses
|
1.0 | 90.9 | % | 0.7 | 175.0 | % | ||||||||||
Loss
from continuing operations
|
(0.9 | ) | -81.8 | % | (0.7 | ) | -175.0 | % |
·
|
Modine’s
ability to successfully implement its current and impending restructuring
plans so that we achieve the targeted cost reductions
desired;
|
·
|
Modine’s
ability to maintain adequate liquidity to carry out restructuring programs
while investing for future
growth;
|
·
|
Modine’s
ability to satisfactorily service its customers during the implementation
and execution of any restructuring plans and/or new product launches and
the Company’s ability to avoid inefficiencies in the transitioning of
products from production facilities to be closed to other existing or new
production facilities;
|
·
|
Modine’s
ability to remain in compliance with its existing debt
agreements;
|
·
|
Modine’s
ability to execute its long-term financial
plan;
|
·
|
Modine’s
ability to obtain commercial and operational concessions and improved
profitability in its South Korean
business;
|
·
|
Modine’s
ability to further cut costs to increase its gross margin and to maintain
and grow its business;
|
·
|
Impairment
of assets resulting from business
downturns;
|
·
|
Modine’s
ability to realize future tax
benefits;
|
·
|
Modine’s
ability to maintain its market share when its customers experience pricing
pressures and excess capacity
issues;
|
·
|
Modine’s
ability to increase its gross margin by producing products in low cost
countries;
|
·
|
Modine’s
ability to maintain customer relationships while rationalizing
business;
|
·
|
Modine’s
ability to maintain current programs and compete effectively for new
business, including its ability to offset or otherwise address increasing
pricing pressures from its competitors and cost-downs from its
customers;
|
·
|
Modine’s
ability to obtain profitable business at its new facilities in China,
Hungary, Mexico and India and to produce quality products at these
facilities from business obtained;
|
·
|
Modine’s
ability to react to increasing commodities pricing including its ability
to pass increasing costs on to customers in a timely
manner;
|
·
|
The
effect of the weather on the Commercial Products business, which directly
impacts sales;
|
·
|
Unanticipated
problems with suppliers meeting Modine’s time and price
demands;
|
·
|
Customers’
actual production demand for new products and technologies, including
market acceptance of a particular vehicle model or
engine;
|
·
|
The
impact of environmental laws and regulations on Modine’s business and the
business of Modine’s customers, including Modine’s ability to take
advantage of opportunities to supply alternative new technologies to meet
environmental emissions standards;
|
·
|
Economic,
social and political conditions, changes and challenges in the markets
where Modine operates and competes (including currency exchange rate
fluctuations, tariffs, inflation, changes in interest rates, recession,
and restrictions associated with importing and exporting and foreign
ownership);
|
·
|
The
cyclical nature of the vehicular
industry;
|
·
|
Changes
in the anticipated sales mix;
|
·
|
Modine’s
association with a particular industry, such as the automobile industry,
which could have an adverse effect on Modine’s stock
price;
|
·
|
Work
stoppages or interference at Modine or Modine’s major
customers;
|
·
|
Unanticipated
product or manufacturing difficulties, including unanticipated warranty
claims;
|
·
|
Unanticipated
delays or modifications initiated by major customers with respect to
product applications or
requirements;
|
·
|
Costs
and other effects of unanticipated litigation or claims, and the
increasing pressures associated with rising health care and insurance
costs; and
|
·
|
Other
risks and uncertainties identified by the Company in public filings with
the U.S. Securities and Exchange
Commission.
|
Expected
Maturity Date
|
||||||||||||||||||||||||||||
Long-term debt in
($000's)
|
F2009 | F2010 | F2011 | F2012 | F2013 |
Thereafter
|
Total
|
|||||||||||||||||||||
Fixed
rate (won)
|
$ | 201 | $ | 175 | $ | 195 | $ | 215 | $ | 236 | $ | 1,546 | $ | 2,568 | ||||||||||||||
Average
interest rate
|
3.00 | % | 3.00 | % | 3.00 | % | 3.00 | % | 3.00 | % | 3.00 | % |
|
·
|
$1.1
million loan to its wholly owned subsidiary, Modine Thermal Systems
India, that matures on April 30,
2013;
|
|
·
|
$9.1
million between two loans to its wholly owned subsidiary, Modine
Thermal Systems Co (Changzhou, China), with various maturity
dates through June 2012; and
|
|
·
|
$1.8
million loan to its wholly owned subsidiary, Modine Thermal Systems
Shanghai, that matures on January 19,
2009.
|
Expected
Maturity Date
|
||||||||||||||||||||||||||||
Long-term debt in
($000's)
|
F2009 | F2010 | F2011 | F2012 | F2013 |
Thereafter
|
Total
|
|||||||||||||||||||||
Fixed
rate (won)
|
$ | 201 | $ | 175 | $ | 195 | $ | 215 | $ | 236 | $ | 1,546 | $ | 2,568 | ||||||||||||||
Average
interest rate
|
3.00 | % | 3.00 | % | 3.00 | % | 3.00 | % | 3.00 | % | 3.00 | % | - | |||||||||||||||
Fixed
rate (U.S. dollars)
|
- | - | - | - | - | $ | 150,000 | $ | 150,000 | |||||||||||||||||||
Average
interest rate
|
- | - | - | - | - | 5.65 | % | - | ||||||||||||||||||||
Variable
rate (U.S. dollars)
|
- | - | $ | 68,000 | - | - | - | $ | 68,000 | |||||||||||||||||||
Average
interest rate
|
- | - | 4.10 | % | - | - | - | - |
Period
|
(a)
Total
Number of Shares (or Units) Purchased
|
(b)
Average
Price
Paid
Per
Share
(or
Unit)
|
(c)
Total
Number of Shares (or Units) Purchased as Part of Publicly
Announced
Plans or Programs
|
(d)
Maximum
Number
(or
Approximate
Dollar
Value)
of Shares
(or
Units) that May Yet Be Purchased Under the Plans or
Programs
|
April
1 – April 30, 2008
|
19,803
(1)
|
$14.57
(2)
|
——
|
——
(3)
|
May
1 – May 31, 2008
|
11,337
(1)
|
$17.38
(2)
|
——
|
——
(3)
|
June
1 – June 30, 2008
|
——
(1)
|
——
(2)
|
——
|
——
(3)
|
Total
|
31,140
(1)
|
$15.59
(2)
|
——
|
——
(3)
|
(1)
|
Consists
of shares delivered back to the Company by employees and/or directors to
satisfy tax withholding obligations that arise upon the vesting
of stock awards. The Company, pursuant to its equity
compensation plans, gives participants the opportunity to turn back to the
Company the number of shares from the award sufficient to satisfy the
person’s tax withholding obligations that arise upon the termination of
restrictions. These shares are held as treasury
shares.
|
(2)
|
The
stated price does not include any commission
paid.
|
(3)
|
There
are no shares remaining that may be repurchased under the two publicly
announced share repurchase programs, other than pursuant to the indefinite
buy-back authority under the anti-dilution portion of one
program. The Company does not know at this time the number of
shares that will be purchased under this portion of the
program. In addition, the Company cannot determine the number
of shares that will be turned back to the Company by holders of restricted
awards or by the directors upon award of unrestricted
shares. The participants also have the option of paying the
tax-withholding obligation described above by cash or check, or by selling
shares on the open market. The number of shares subject to
outstanding restricted stock awards was 193,204 with a value of
$2,389,933 at June 30, 2008. Generally, the tax withholding
obligation on such shares is approximately 40 percent of the value of the
shares when they vest. The restrictions applicable to the stock
awards generally lapse 20 percent per year over five years for stock
awards granted prior to April 1, 2005 and generally lapse 25 percent per
year over four years for stock awards granted after April 1, 2005;
provided, however, that certain stock awards vest immediately upon
grant.
|
Director
|
Votes
For
|
Votes
Withheld
|
Frank
P. Incropera
|
29,159,127
|
1,141,046
|
Vincent
L. Martin
|
29,101,459
|
1,198,713
|
Bradley
C. Richardson
|
28,936,231
|
1,363,941
|
Marsha
C. Williams
|
29,139,273
|
1,160,899
|
Exhibit
No.
|
Description
|
Incorporated
Herein By
Referenced
To
|
Filed
Herewith
|
|
10.1
|
Amended
and Restated Credit Agreement among the Registrant, the Foreign Subsidiary
Borrowers, if any, the Lenders, and JPMorgan Chase Bank, N.A. as Agent, as
LC Issuer and Swing Line Lender dated as of July 18, 2008
|
Exhibit
10.1 to Registrant’s Current Report on Form 8-K dated July 17, 2008 (“July
17, 2008 Form 8-K”)
|
||
10.2
|
2008
Incentive Compensation Plan
|
Exhibit
10.2 to July 17, 2008 Form 8-K
|
||
10.3
|
Form
of Amendment No. 1 to Employment Agreement entered into as of July 1, 2008
with Thomas A. Burke, Bradley C. Richardson and Anthony C.
DeVuono
|
Exhibit
10.1 to Registrant’s Current Report on Form 8-K dated July 1,
2008
|
||
10.4
|
Retirement
Agreement between the Registrant and David B. Rayburn dated as of March
31, 2008.
|
Exhibit
10.1 to the Registrant’s Current Report on Form 8-K dated April 1,
2008
|
||
Preferability
letter from Pricewaterhouse Coopers LLP regarding a change in accounting
principle dated August 11, 2008
|
X
|
|||
Certification
of Thomas A. Burke, President and Chief Executive Officer, pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||
Certification
of Bradley C. Richardson, Executive Vice President – Corporate Strategy
and Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
X
|
|||
Certification of Thomas A. Burke, President and Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
X
|
|||
32.2 | Certification of Bradley C. Richardson, Executive Vice President – Corporate Strategy and Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
X
|