Modine Manufacturing Company reported robust financial results for the second quarter ended September 30, 2024, on October 29, 2024. Net sales increased 6 percent to $658.0 million, compared with $620.5 million in the prior year, with organic sales growing 1 percent.
The company's profitability saw significant expansion, with gross profit increasing 23 percent to $165.6 million and gross margin improving by 340 basis points to 25.2 percent. Adjusted EBITDA rose 23 percent to $99.8 million, achieving a 15.2 percent margin, while adjusted earnings per share increased 9 percent to $0.97.
Growth was primarily fueled by the Climate Solutions segment, where data center revenue surged 102 percent, or $80 million, benefiting from strong organic demand and the Scott Springfield Manufacturing acquisition. This performance helped offset a 12 percent decline in the Performance Technologies segment due to lower volumes in vehicular markets, though GenSet sales increased 29 percent.
Modine recorded $4.5 million in restructuring expenses during the quarter, primarily for severance in Europe and product line transfer costs. Despite a decrease in free cash flow for the six months ended September 30, 2024, to $57.5 million, the company's net debt decreased by $44.7 million from the end of fiscal 2024 to $326.8 million.
Management reaffirmed its fiscal 2025 guidance, citing continued improvement in the data center business outlook and strong organic growth. The company is expanding its product offering and manufacturing capacity to meet market demand, while focusing on 80/20 initiatives and business mix improvement in Performance Technologies.
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