SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 26, 1997
-------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-1373
------
MODINE MANUFACTURING COMPANY
------------------------------------------------------
(Exact name of registrant as specified in its charter)
WISCONSIN 39-0482000
--------------------------------------------- -------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
1500 DeKoven Avenue, Racine, Wisconsin 53403-2552
------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (414) 636-1200
---------------
NOT APPLICABLE
------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at August 1, 1997
------------------------------ -----------------------------
Common Stock, $0.625 Par Value 29,767,543
<PAGE>
MODINE MANUFACTURING COMPANY
INDEX
PART I. FINANCIAL INFORMATION Page No.
--------
Item 1. Financial Statements
Consolidated Balance Sheets -
June 26 and March 31, 1997 3
Consolidated Statements of Earnings -
For the Three Months Ended
June 26, 1997 and 1996 4
Consolidated Statements of Cash Flows -
For the Three Months Ended June 26,
1997 and 1996 5
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial
Condition 8-10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 6. Exhibits and Reports on Form 8-K 12-13
Signatures 13
<PAGE>
<TABLE>
MODINE MANUFACTURING COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands, except per-share amounts)
June 26, 1997 and March 31, 1997
(Unaudited)
<CAPTION>
June 26, 1997 March 31, 1997
------------- --------------
<S> <C> <C>
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 37,380 $ 34,822
Trade receivables, less allowance for
doubtful accounts of $4,526 and $4,140 164,906 149,800
Inventories 144,024 142,115
Deferred income taxes and other current
assets 37,853 39,405
-------- --------
Total current assets 384,163 366,142
-------- --------
Other assets:
Property, plant, and equipment - net 214,812 210,115
Investment in affiliates 9,582 9,497
Intangible assets, less accumulated
amortization of $13,991 and $12,885 61,445 62,948
Deferred charges and other noncurrent
assets 47,064 46,253
-------- --------
Total other assets 332,903 328,813
-------- --------
Total assets $717,066 $694,955
======== ========
<CAPTION>
LIABILITIES AND SHAREHOLDERS' INVESTMENT
- ----------------------------------------
<S> <C> <C>
Current liabilities:
Short-term debt $ 3,622 $ 2,962
Long-term debt - current portion 14,194 14,061
Accounts payable 71,817 72,173
Accrued compensation and employee benefits 48,588 44,497
Income taxes 15,905 7,535
Accrued expenses and other current
liabilities 26,409 28,771
-------- --------
Total current liabilities 180,535 169,999
-------- --------
Other liabilities:
Long-term debt 85,872 85,197
Deferred income taxes 13,346 13,331
Other noncurrent liabilities 41,265 40,740
-------- --------
Total other liabilities 140,483 139,268
-------- --------
Total liabilities 321,018 309,267
-------- --------
<PAGE>
Shareholders' investment:
Preferred stock, $0.025 par value,
authorized 16,000 shares,
issued - none - -
Common stock, $0.625 par value,
authorized 80,000 shares, issued
30,342 shares 18,964 18,964
Additional paid-in capital 10,380 9,760
Retained earnings 390,419 378,740
Foreign currency translation adjustment (3,838) (3,016)
Treasury stock at cost: 568 and 509
shares, respectively (16,411) (14,949)
Restricted stock - unamortized value (3,466) (3,811)
-------- ---------
Total shareholders' investment 396,048 385,688
-------- ---------
Total liabilities and shareholders'
investment $717,066 $694,955
======== ========
<FN>
(See accompanying notes to consolidated financial statements.)
</TABLE>
<PAGE>
<TABLE>
MODINE MANUFACTURING COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
For the three months ended June 26, 1997 and 1996
(In thousands, except per-share amounts)
(Unaudited)
<CAPTION>
Three months ended June 26
-----------------------------
1997 1996
---------- ----------
<S> <C> <C>
Net sales $256,923 $248,514
Cost of sales 181,882 181,163
-------- --------
Gross profit 75,041 67,351
Selling, general, and administrative expenses 44,549 42,099
-------- --------
Income from operations 30,492 25,252
Non-operating income 1,890 2,627
Interest expense (1,135) (1,302)
Non-operating expense (1,427) (1,387)
-------- --------
Earnings before income taxes 29,820 25,190
Provision for income taxes 11,635 8,800
-------- --------
Net earnings $ 18,185 $ 16,390
======== ========
Net earnings per share of common stock* $0.60 $0.54
======== ========
Dividends per share $0.19 $0.17
======== ========
Average common shares and common share
equivalents outstanding 30,389 30,404
======== ========
<FN>
(See accompanying notes to consolidated financial statements.)
*(See Exhibit 11 for computation of earnings per share.)
</TABLE>
<PAGE>
<TABLE>
MODINE MANUFACTURING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Three Months Ended June 26, 1997 and 1996
(Unaudited)
<CAPTION>
Three months ended June 26
-----------------------------
1997 1996
---------- ----------
<S> <C> <C>
Net cash provided by operating activities $ 23,430 $ 23,527
Cash flows from investing activities:
Expenditures for property, plant, and equipment (14,656) (16,668)
Acquisitions, net of cash acquired 0 (1,829)
Proceeds from dispositions of assets (8) 52
Other - net (41) (131)
-------- --------
Net cash (used for) investing activities (14,705) (18,576)
Cash flows from financing activities:
Increase/(decrease) in short-term debt - net 688 (3,249)
Additions to long-term debt 2,202 8,289
Reductions of long-term debt (1,092) (3,078)
Issuance of common stock, including treasury
stock 392 2,504
Purchase of treasury stock (2,698) (1,025)
Cash dividends paid (5,659) (5,064)
-------- --------
Net cash (used for) financing activities (6,167) (1,623)
-------- --------
Net increase in cash and cash equivalents 2,558 3,328
Cash and cash equivalents at beginning of
period 34,822 17,958
-------- --------
Cash and cash equivalents at end of period $ 37,380 $ 21,286
======== ========
<FN>
(See accompanying notes to consolidated financial statements.)
</TABLE>
<PAGE>
MODINE MANUFACTURING COMPANY
----------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
------------------------------------------------------
1. The amounts of raw material, work in process and finished
goods cannot be determined exactly except by physical
inventories. Based on partial interim physical inventories
and percentage relationships at the time of complete
physical inventories, Management believes the amounts shown
below are reasonable estimates of raw material, work in
process and finished goods.
(In Thousands)
-----------------------------------------------------------
June 26, 1997 March 31, 1997
-----------------------------------------------------------
Raw materials $ 38,587 $ 41,592
Work in process 36,746 37,317
Finished goods 68,691 63,206
-------- --------
Total inventories $144,024 $142,115
======== ========
2. Property, plant, and equipment is composed of:
(In Thousands)
-----------------------------------------------------------
June 26, 1997 March 31, 1997
-----------------------------------------------------------
Gross, property,
plant & equipment $472,371 $458,914
Less accumulated
depreciation (257,559) (248,799)
-------- --------
Net property,
plant & equipment $214,812 $210,115
======== ========
3. Recent developments concerning legal proceedings reported in
the Company's Form 10-K report for the year ended March 31,
1997, are updated in Part II, Other Information, Item 1,
Legal Proceedings. While the outcome of these proceedings
is uncertain, in the opinion of the Company's management,
any liabilities that may result from such proceedings are
not reasonably likely to have a material effect on the
Company's consolidated financial position.
4. In June of 1997, the Financial Accounting Standards Board
issued Statement No. 130, "Reporting Comprehensive Income"
and Statement No. 131, "Disclosures about Segments of an
Enterprise and Related Information." Under the new
reporting and disclosure requirements promulgated in these
statements, the Company is required to, and will adopt the
provisions beginning in its fiscal 1998-99 year.
<PAGE>
5. The accompanying consolidated financial statements, which
have not been audited by independent certified public
accountants, were prepared in conformity with generally
accepted accounting principles and such principles were
applied on a basis consistent with the preparation of the
consolidated financial statements in the Company's March 31,
1997 Annual Report filed with the Securities and Exchange
Commission. The financial information furnished includes
all normal recurring accrual adjustments which are, in the
opinion of Management, necessary for a fair statement of
results for the interim period. Results for the first three
months of fiscal 1998 are not necessarily indicative of the
results to be expected for the full year.
6. Certain notes and other information have been condensed or
omitted from these interim financial statements which
consolidate both domestic and foreign wholly-owned
subsidiaries. Therefore, such statements should be read in
conjunction with the consolidated financial statements and
related notes contained in the Company's 1997 Annual Report
to stockholders which statements and notes were incorporated
by reference in the Company's Form 10-K Report for the year
ended March 31, 1997.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------
The following discussion and analysis provides information which
Management believes is relevant to an assessment and understanding
of the Company's consolidated results of operations and financial
condition. This discussion should be read in conjunction with the
consolidated financial statements and notes thereto.
RESULTS OF OPERATIONS
- ---------------------
Comparison of the First Quarter of 1997-98 with the First Quarter
- -----------------------------------------------------------------
of 1996-97
- ----------
Net sales for the first quarter of fiscal 1997-98 were a record
$256.9 million, up 3.4% from the $248.5 million reported in the
first quarter of last year.
Sales increased in five of Modine's six major markets. The
largest revenue increase was to the industrial market,
particularly due to the good business with engine manufacturers
both domestically and abroad. In the medium-heavy truck market,
sales to North American heavy-truck OEM's showed a good increase
over the prior year. Sales to the building market, particularly
from components sold to residential and commercial air-
conditioning OEM's, registered significant gains on a year-over-
year basis. Dollar-denominated sales to the passenger-car and
light-truck market were down somewhat from the year before while
unit sales were up, particularly in Europe.
Gross margin increased 2.1%, as a percentage of sales, over the
first quarter of the previous year to 29.2% from 27.1%.
Improvements shown in Europe and the North American truck and
automotive aftermarket were primarily responsible for the change.
Selling, general and administrative expenses increased 5.8% over
last year's first quarter while only increasing 0.4% as a percent
of sales. A number of categories registered small increases over
a year ago.
Average outstanding debt levels declined $8.6 million, or
approximately 8.0%, from the same quarter a year ago while
interest expense declined 12.8%, or $0.2 million from a year ago.
The lower interest expense can be primarily attributed to a
continuing reduction in higher rate domestic debt through
normally scheduled repayments. Net non-operating income declined
by $0.8 million. A one-time reserve adjustment in fiscal 1996-97,
relating to changes in the sales organization in Europe, was
the main factor contributing to the year-over-year change.
The effective tax rate of 39.0%, increased by 4.1% when compared
to the same period last year. The main factors responsible for
the increase were higher earnings in Europe and lower tax loss
carryforwards.
<PAGE>
Net earnings for the first quarter were a record $18.2 million or
$.60 per share, up 11.0% from last year's $16.4 million, or $.54
per share. Increased contribution from Europe and from the North
American truck market and the automotive aftermarket had the
greatest impact on the gain in earnings, more than offsetting the
effect of a stronger U.S. dollar.
Outlook for the Remainder of the Year
- -------------------------------------
As forecast in the annual report, the company's margins have
continued to improve. If the markets the Company serves remain
strong, with the economies of the United States and Europe
continuing to hold up, fiscal-year earnings growth of about 10
percent is achievable on the more modest sales increase that is
expected. These forward-looking statements regarding sales and
earnings are subject to certain risks and uncertainties which
could cause actual results to differ materially from those
projected. See "Important Factors and Assumptions Regarding
Forward-Looking Statements" attached hereto as Exhibit 99 and
incorporated herein by reference.
FINANCIAL CONDITION
- -------------------
Comparison between June 26, 1997 and March 31, 1997
- ---------------------------------------------------
Current Assets
- --------------
Cash and cash equivalents increased by $2.6 million to a total of
$37.4 million. The Company's primary sources of liquidity and
capital resources were cash provided by operations and the
utilization of available borrowing facilities.
Net trade receivables increased $15.1 million. Higher sales and
normal seasonal marketing programs contributed to the increase.
Inventory levels declined by $1.9 million. Among the items
effecting inventory were higher sales volumes, exchange rate
fluctuations in Europe, process and product line changes at
certain manufacturing facilities as well as ongoing management
efforts to control inventory levels.
Deferred income taxes and other current assets decreased $1.6
million due primarily to reductions in other receivables and
unbilled customer tooling.
Working capital increased approximately 4% to $203.6 million from
$196.1 million while the current ratio decreased slightly to 2.1
to 1 from 2.2 to 1. A number of categories experienced changes,
but the largest items influencing the change were increases in
trade receivables, income taxes payable, and accrued compensation
and employee benefits.
<PAGE>
Property, Plant and Equipment
- -----------------------------
Net property, plant and equipment increased $4.7 million to
$214.8 million as capital expenditures exceeded depreciation,
retirements and foreign currency translation adjustments.
Outstanding material commitments for capital expenditures were
$50.5 million at June 26, 1997 compared to $27.0 million at March
31, 1997. The largest commitment of approximately $21.6 million
relates to the construction of the new technical center in
Racine, Wisconsin. Approximately $12.7 million of the
outstanding commitment amount covers facility expansions,
improvements, equipment upgrades, and new equipment for a number
of European plants. The outstanding commitments will be financed
primarily through internally generated cash.
Intangible Assets
- -----------------
Intangible assets decreased $1.5 million. Amortization and foreign
currency translations were the main items contributing to the change.
Deferred Charges and Other Noncurrent Assets
- --------------------------------------------
Deferred charges and other noncurrent assets increased $0.8 million.
The net increase is primarily the result of continuing recognition
of the surplus in the Company's overfunded pension plans.
Current Liabilities
- -------------------
Accounts payable, accrued compensation and employee benefits and
other accrued expenses increased $1.4 million. Normal timing
differences in the level of operating activity were responsible
for the increase. Accrued income taxes increased $8.4 million
from normal timing differences in making estimated tax payments
together with an increase in the effective tax rate.
Debt
- ----
Total outstanding debt increased by $1.5 million. Short-term
debt increased $0.7 million while long-term debt increased by
$0.8 million. The changes in short-term debt occurred at the
Company's European subsidiaries.
Consolidated available lines of credit decreased during the
quarter by $1.0 million. The foreign unused lines of credit at
June 26, 1997 were $6.7 million, while the Company had $12.5
million available under a domestic multicurrency revolving credit
agreement. The total debt to equity ratio decreased from 26.5%
to 26.2% during the quarter.
Shareholders' Investment
- ------------------------
Total shareholders' investment increased by $10.4 million to a
total of $396.0 million. The net increase resulted primarily
<PAGE>
from record first quarter net earnings of $18.2 million. The
value of the dollar increased relative to other currencies during
the quarter, resulting in an unfavorable foreign currency
translation impact of $0.8 million. Dividends paid to
shareholders of $5.7 million, net treasury stock purchases of
$1.5 million; and other minor changes to the capital accounts
also contributed to the change.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
In the normal course of business, the Company and its
subsidiaries are named as defendants in various lawsuits and
enforcement proceedings by private parties, the Occupational
Safety and Health Administration, the Environmental Protection
Agency, other governmental agencies, and others in which claims,
such as personal injury, property damage, or antitrust and trade
regulation issues, are asserted against the Company. While the
outcome of these proceedings is uncertain, in the opinion of the
Company's Management and counsel, any liabilities that may result
from such proceedings are not reasonably likely to have a
material effect on the Company's liquidity, financial condition
or results of operations. Many of the pending damage claims are
covered by insurance and, in addition, the Company from time to
time establishes reserves for uninsured liabilities.
The Mitsubishi and Showa Litigation
-----------------------------------
In November 1991, the Company filed a lawsuit against Mitsubishi
Motor Sales of America, Inc., and Showa Aluminum Corporation,
alleging infringement of the Company's patent on parallel-flow
air-conditioning condensers. The suit seeks an injunction to
prohibit continued infringement, an accounting for damages, a
trebling of such damages for willful infringement, and
reimbursement of attorneys' fees. In December 1991, the Company
submitted a complaint to the U.S. International Trade Commission
(ITC) requesting that the ITC ban the import and sale of parallel-
flow air-conditioning condensers and systems or vehicles that
contain them, which are the subject of the aforementioned
lawsuit. In July 1993, the ITC reversed an earlier ruling by a
hearing officer and upheld, as valid and enforceable, the
Company's basic patent on parallel-flow air-conditioning
condensers. The ITC also ruled that specific condensers from the
two Japanese companies did not infringe the Company's patent.
Each of the parties appealed, to the U.S. Court of Appeals for
the Federal Circuit, the portion of the ITC opinion adverse to
them. In February 1996, the U.S. Court of Appeals for the
Federal Circuit, upheld the patent as valid and enforceable and
remanded the case to the ITC for a determination with respect to
Showa infringement. In July of 1994, Showa filed a lawsuit
against the Company alleging infringement by the Company of
certain Showa patents pertaining to condensers. (In June 1995,
the Company filed a motion for partial summary judgment against
such lawsuit). In December of 1994, the Company filed another
lawsuit against Mitsubishi and Showa pertaining to a newly issued
patent on parallel-flow air-conditioning condensers. Both 1994
<PAGE>
suits have been stayed pending the outcome of re-examination in
the U.S. Patent Office of the patents involved. All legal and
court costs associated with these cases have been expensed as
they were incurred.
Other previously reported legal proceedings have been settled or
the issues resolved so as to not merit further reporting.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
--------
The following exhibits are included for information only unless
specifically incorporated by reference in this report:
Reference Number
per Item 601 of
Regulation S-K Page
- ---------------- ----
4(a) Rights Agreement dated as of October 16,
1986 between the Registrant and First
Chicago Trust Company of New York (Rights
Agent) (filed by reference to the
Registrant's Annual Report on Form 10-K
for the fiscal year ended March 31, 1997).
4(b)(i) Rights Agreement Amendment No. 1 dated as
of January 18, 1995 between the Registrant
and First Chicago Trust Company of New York
(Rights Agent) (filed by reference to the
exhibit contained within the Registrant's
Current Report on Form 8-K dated January 13,
1995.)
4(b)(ii) Rights Agreement Amendment No. 2 dated as
of January 18, 1995 between the Registrant
and First Chicago Trust Company of New York
(Rights Agent) (filed by reference to the
exhibit contained within the Registrant's
Current Report on Form 8-K dated January 13,
1995.)
4(b)(iii) Rights Agreement Amendment No. 3 dated as of
October 15, 1996, between the Registrant and
First Chicago Trust Company of New York
(Rights Agent) (filed by reference to the
exhibit contained within the Registrant's
Quarterly Report on Form 10-Q dated
December 26, 1996.)
Note: The amount of long-term debt
authorized under any instrument defining the
rights of holders of long-term debt of the
Registrant, other than as noted above, does
not exceed ten percent of the total assets
of the Registrant and its subsidiaries on a
consolidated basis.
<PAGE>
Reference Number
per Item 601 of
Regulation S-K Page
- ---------------- ----
Therefore, no such instruments are required
to be filed as exhibits to this Form 10-Q.
The Registrant agrees to furnish copies of
such instruments to the Commission upon
request.
11* Computation of per share earnings 14
27* Financial Data Schedule (electronic
transmission only)
99* Important Factors and Assumptions Regarding
Forwarding-Looking Statements 15
*Filed herewith.
(b) Reports on Form 8-K:
-------------------
The Company filed one Form 8-K to report that certain forward
looking statements regarding forecasts of sales and earnings
growth are subject to certain risks and uncertainties as
explained therein. This Report is dated June 6, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
MODINE MANUFACTURING COMPANY
----------------------------
(Registrant)
By: A. D. REID
-----------------------------------------
A. D. Reid, Vice President,
Finance and Chief Financial Officer
(Principal Financial Officer)
Date: August 1, 1997 By: W. E. PAVLICK
-----------------------------------------
W. E. Pavlick, Senior Vice President,
General Counsel and Secretary
<PAGE>
<TABLE>
EXHIBIT 11
MODINE MANUFACTURING COMPANY
COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share amounts)
<CAPTION>
Three months ended June 26
----------------------------
1997 1996
---------- ----------
<S> <C> <C>
Primary
- -------
Weighted average shares outstanding 29,801 29,780
Share equivalents for period prior to
exercise (options exercised) 11 8
Net shares issuable, assuming exercise
of options using average market price
and employing the treasury stock method 577 616
------- -------
Average common share and common
share equivalents 30,389 30,404
======= =======
Net earnings for the period $18,185 $16,390
======= =======
Net earnings per share of common stock $0.60 $0.54
======= =======
Fully Diluted
- -------------
Weighted average shares outstanding 29,801 29,780
Share equivalents for period prior to
exercise (options exercised) 11 8
Net shares issuable, assuming exercise
of options using ending market price
(unless antidilutive) and employing
the treasury stock method 629 616
------- -------
Average common share and common
share equivalents 30,441 30,404
======= =======
Net earnings for the period $18,185 $16,390
======= =======
Net earnings per share of common stock $0.60 $ 0.54
======= =======
<PAGE>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF EARNINGS
FOR THE PERIOD ENDING 6/26/97 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-1-1997
<PERIOD-END> JUN-26-1997
<CASH> 37,380
<SECURITIES> 0
<RECEIVABLES> 169,432
<ALLOWANCES> 4,526
<INVENTORY> 144,024
<CURRENT-ASSETS> 384,163
<PP&E> 472,371
<DEPRECIATION> 257,559
<TOTAL-ASSETS> 716,066
<CURRENT-LIABILITIES> 180,535
<BONDS> 85,872
0
0
<COMMON> 18,964
<OTHER-SE> 377,084
<TOTAL-LIABILITY-AND-EQUITY> 717,066
<SALES> 256,923
<TOTAL-REVENUES> 256,923
<CGS> 181,882
<TOTAL-COSTS> 181,882
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 359
<INTEREST-EXPENSE> 1,135
<INCOME-PRETAX> 29,820
<INCOME-TAX> 11,635
<INCOME-CONTINUING> 18,185
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,185
<EPS-PRIMARY> 0.60
<EPS-DILUTED> 0.60
</TABLE>
EXHIBIT 99
IMPORTANT FACTORS AND ASSUMPTIONS
REGARDING FORWARD-LOOKING STATEMENTS
These cautionary statements are being made pursuant to the
provisions of the Private Securities Litigation Reform Act of
1995 and with the intention of obtaining the benefits of the
"safe harbor" provisions of the Act. Investors are cautioned
that any forward-looking statements made by Modine are not
guarantees of future performance and that actual results may
differ materially from those in the forward-looking statements as
a result of various factors, including: customers' integration of
products currently being supplied by the Company; the success of
Modine or its competitors is obtaining the business of the
customer base; the ability to pass on increased costs to
customers; variations in currency-exchange rates in view of a
large portion of the Company's business being nondomestic; labor
relations at Modine, its customers, and its suppliers, which may
affect the continuous supply of product; and the ability to
improve acquisitions' operations.
In making statements about Modine's fiscal-1998 operating
results, management has assumed relatively stable economic
conditions in the United States and worldwide, no unanticipated
swings in the business cycles affecting customer industries, and
a reasonable legislative and regulatory climate in those
countries where Modine does business.
Readers are cautioned not to place undue reliance on Modine's
forward-looking statements, which speak only as of the date such
statements are made.
<PAGE>
