Modine Announces Sale of Austrian Automotive Business

Rhea-AI Summary

Modine Manufacturing Company (NYSE: MOD) announced a definitive agreement to sell part of its European air-cooled automotive business, including its manufacturing facility in Kottingbrunn, Austria, to Schmid Metall GmbH, an affiliate of Rupert Fertinger GmbH. This transaction, expected to close in the first half of 2021 pending regulatory approvals, aims to mitigate significant liabilities and future cash investments. CEO Neil D. Brinker stated this aligns with the company's strategic exit from the automotive segment to focus on higher-margin businesses, following a similar sale to Dana Incorporated.

Positive

• The sale allows Modine to avoid significant liabilities and future cash investments.
• Aligns with the company's strategy to exit lower-margin automotive segments.
• Focus on higher operating margins, lower capital intensity, and greater free cash flow generation.

Negative

• None.

RACINE, Wis., Feb. 19, 2021 /PRNewswire/ -- Modine Manufacturing Company (NYSE: MOD or the "Company"), a diversified global leader in thermal management technology and solutions, today announced that it has signed a definitive agreement with Schmid Metall GmbH, an affiliate of Rupert Fertinger GmbH, to sell a portion of the Company's European air-cooled automotive business, including its manufacturing facility located in Kottingbrunn, Austria.

The transaction is expected to close in the first half of 2021, following the receipt of regulatory approvals and other customary closing conditions.  The sale will allow the Company to avoid significant liabilities and future cash investments in the business. 

"This is an important step in our strategic exit of the automotive segment businesses, allowing us to further fuel and grow our remaining business," said Modine Chief Executive Officer, Neil D. Brinker. "We have been on a journey to become a diversified industrial company and this transaction will allow us to focus our resources on our remaining businesses that provide higher operating margins, lower capital intensity and greater free cash flow generation."

This announcement follows the earlier announced sale of the liquid-cooled automotive business to Dana Incorporated.  That transaction is also expected to close in the first half of 2021 following receipt of regulatory approvals.    

About Modine

Modine, with fiscal 2020 revenues of $2.0 billion, specializes in thermal management systems and components, bringing highly engineered heating and cooling components, original equipment products, and systems to diversified global markets through its four complementary segments: CIS; BHVAC; HDE; and Automotive. Modine is a global company headquartered in Racine, Wisconsin (USA), with operations in North America, South America, Europe and Asia. For more information about Modine, visit www.modine.com.

Forward-Looking Statements

This press release contains statements, including information about future financial performance and market conditions, accompanied by phrases such as "believes," "estimates," "expects," "plans," "anticipates," "intends," and other similar "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995. Modine's actual results, performance or achievements may differ materially from those expressed or implied in these statements because of certain risks and uncertainties, including, but not limited to those described under "Risk Factors" in Item 1A of Part I of the Company's Annual Report on Form 10-K for the year ended March 31, 2020 and under Forward-Looking Statements in Item 7 of Part II of that same report and in the Company's Quarterly Reports on Form 10-Q for the quarters ended June 30, September 30, and December 31, 2020. Other risks and uncertainties include, but are not limited to, the following: the impact of the COVID-19 pandemic on the national and global economy, our business, suppliers, customers, and employees; the overall health and price-down focus of Modine's customers; our ability to successfully execute our strategic and operational plans, including our ability to successfully complete the pending sale of our liquid-cooled automotive business, including the receipt of governmental and third-party approvals and satisfaction of other closing conditions, and our ability to successfully exit our other automotive businesses; our ability to effectively and efficiently reduce our cost structure in response to sales volume declines and complete restructuring activities and realize benefits thereon; our ability to comply with the financial covenants in our credit agreements and to fund our global liquidity requirements efficiently; operational inefficiencies as a result of program launches, unexpected volume increases, product transfers, and delays or inefficiencies resulting from restrictions imposed in response to the COVID-19 pandemic; economic, social and political conditions, changes and challenges in the markets where Modine operates and competes, including foreign currency exchange rate fluctuations, tariffs (and potential trade war impacts resulting from tariffs or retaliatory actions), inflation, changes in interest rates or tightening of the credit markets, recession, restrictions associated with importing and exporting and foreign ownership, public health crises, and the general uncertainties about the impact of regulatory and/or policy changes, including those related to tax and trade, the COVID-19 pandemic and other matters, that have been or may be implemented in the U.S. or abroad, and continuing uncertainty regarding the impacts of "Brexit"; the impact on Modine of any significant increases in commodity prices, particularly aluminum, copper, steel and stainless steel (nickel) and other purchased components, and our ability to adjust product pricing in response to any such increases; the nature of and Modine's significant exposure to the vehicular industry and the dependence of this industry on the health of the economy; the concentration of sales within our CIS segment attributed to one customer; Modine's ability to recruit and maintain talent in managerial, leadership, and administrative functions; Modine's ability to protect its proprietary information and intellectual property from theft or attack; the impact of any substantial disruption or material breach of our information technology systems; costs and other effects of environmental investigation, remediation or litigation; and other risks and uncertainties identified by the Company in public filings with the U.S. Securities and Exchange Commission.  Forward-looking statements are as of the date of this release, and the Company does not assume any obligation to update any forward-looking statements.

Investor & Media Contact

Kathleen Powers
(262) 636-1687
kathleen.t.powers@modine.com

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SOURCE Modine Manufacturing Company

FAQ

What is the recent announcement by Modine Manufacturing Company about?

Modine announced the sale of part of its European air-cooled automotive business to Schmid Metall GmbH, including its manufacturing facility in Austria.

When is the sale of Modine's automotive business expected to close?

The transaction is expected to close in the first half of 2021, pending regulatory approvals.

How much revenue did Modine generate in fiscal 2020?

Modine generated $2.0 billion in revenue for fiscal 2020.

What is Modine's stock symbol?

Modine's stock symbol is MOD.

Why is Modine exiting the automotive segment?

The exit allows Modine to focus on businesses with higher operating margins and lower capital intensity.