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 September 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 November 3, 1997
------------------------------ -------------------------------
Common Stock, $0.625 Par Value 29,709,917
<PAGE>
MODINE MANUFACTURING COMPANY
INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets -
September 26 and March 31, 1997 3
Consolidated Statements of Earnings -
For the Three Months Ended
September 26, 1997 and 1996
and the Six Months Ended
September 26, 1997 and 1996 4
Consolidated Statements of Cash Flows -
For the Six Months Ended September 26,
1997 and 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial
Condition 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 17
<PAGE>
<TABLE>
MODINE MANUFACTURING COMPANY
CONSOLIDATED BALANCE SHEETS
September 26, 1997 and March 31, 1997
(In thousands, except per-share amounts)
(Unaudited)
<CAPTION>
September 26, 1997 March 31,1997
------------------ -------------
<S> <C> <C>
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 27,932 $ 34,822
Trade receivables, less allowance for
doubtful accounts of $4,690 and $4,140 165,350 149,800
Inventories 140,016 142,115
Deferred income taxes and other current
assets 39,477 39,405
--------- ---------
Total current assets 372,775 366,142
--------- ---------
Other assets:
Property, plant, and equipment - net 218,203 210,115
Investment in affiliates 9,218 9,497
Intangible assets, less accumulated
amortization of $14,922 and $12,885 59,525 62,948
Deferred charges and other noncurrent
assets 47,889 46,253
--------- ---------
Total other assets 334,835 328,813
--------- ---------
Total assets $ 707,610 $ 694,955
========= =========
<CAPTION>
LIABILITIES AND SHAREHOLDERS' INVESTMENT
<S> <C> <C>
Current liabilities:
Short-term debt $ 10,981 $ 2,962
Long-term debt - current portion 10,257 14,061
Accounts payable 72,790 72,173
Accrued compensation and employee
benefits 45,181 44,497
Income taxes 5,655 7,535
Accrued expenses and other current
liabilities 25,305 28,771
--------- ---------
Total current liabilities 170,169 169,999
--------- ---------
Other liabilities:
Long-term debt 79,743 85,197
Deferred income taxes 13,278 13,331
Other noncurrent liabilities 41,079 40,740
--------- ---------
Total other liabilities 134,100 139,268
--------- ---------
Total liabilities 304,269 309,267
--------- ---------
<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 11,473 9,760
Retained earnings 399,582 378,740
Foreign currency translation adjustment (6,430) (3,016)
Treasury stock at cost: 598 and 509
shares, respectively (17,126) (14,949)
Restricted stock - unamortized value (3,122) (3,811)
--------- ---------
Total shareholders' investment $ 403,341 $ 385,688
--------- ---------
Total liabilities and shareholders'
investment $ 707,610 $ 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 September 26, 1997 and 1996
For the six months ended September 26, 1997 and 1996
(In thousands, except per-share amounts)
(Unaudited)
<CAPTION>
Three months ended Six months ended
-------------------- ---------------------
September 26 September 26
-------------------- ---------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $260,806 $254,224 $517,729 $502,738
Cost of sales 185,517 185,109 367,399 366,272
-------- -------- -------- --------
Gross profit 75,289 69,115 150,330 136,466
Selling, general, and administrative expenses 46,275 44,368 90,824 86,467
-------- -------- -------- --------
Income from operations 29,014 24,747 59,506 49,999
Non-operating income 2,185 1,889 4,075 4,516
Interest expense (973) (1,562) (2,108) (2,864)
Non-operating expense (1,798) (1,445) (3,225) (2,832)
-------- -------- -------- --------
Earnings before income taxes 28,428 23,629 58,248 48,819
Provision for income taxes 10,199 7,975 21,834 16,775
-------- -------- -------- --------
Net earnings $ 18,229 $ 15,654 $ 36,414 $ 32,044
======== ======== ======== ========
Net earnings per share of common stock* $0.60 $0.51 $1.20 $1.05
======== ======== ======== ========
Dividends per share $0.19 $0.17 $0.38 $0.34
======== ======== ======== ========
Average common shares and common share
equivalents outstanding 30,427 30,459 30,414 30,430
======== ======== ======== ========
<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 Six Months Ended September 26, 1997 and 1996
(Unaudited)
<CAPTION>
Six months ended September 26
-----------------------------
1997 1996
----------- -----------
<S> <C> <C>
Net cash provided by operating activities $ 38,885 $ 48,674
Cash flows from investing activities:
Expenditures for property, plant, and equipment (33,170) (28,748)
Acquisitions, net of cash acquired - (1,829)
Proceeds from dispositions of property, plant,
and equipment 1,785 107
Other - net (33) (133)
-------- --------
Net cash (used for) investing activities (31,418) (30,603)
Cash flows from financing activities:
Increase/(decrease) in short-term debt - net 8,221 (6,789)
Additions to long-term debt 14,211 13,205
Reductions of long-term debt (19,056) (8,733)
Issuance of common stock, including treasury
stock 2,462 3,489
Purchase of treasury stock (8,880) (2,479)
Cash dividends paid (11,315) (10,141)
-------- --------
Net cash(used for) financing activities (14,357) (11,448)
-------- --------
Net (decrease)/increase in cash and cash
equivalents (6,890) 6,623
Cash and cash equivalents at beginning of
period 34,822 17,958
-------- --------
Cash and cash equivalents at end of period $ 27,932 $ 24,581
======== ========
<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)
---------------------------------------------------------------------
September 26, 1997 March 31, 1997
---------------------------------------------------------------------
Raw materials $ 39,539 $ 41,592
Work in process 37,426 37,317
Finished goods 63,051 63,206
-------- --------
Total inventories $140,016 $142,115
======== ========
2. Property, plant, and equipment is composed of:
(In Thousands)
---------------------------------------------------------------------
September 26, 1997 March 31, 1997
---------------------------------------------------------------------
Gross, property,
plant & equipment $478,400 $458,914
Less accumulated
depreciation (260,197) (248,799)
-------- --------
Net property,
plant & equipment $218,203 $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 liquidity, financial condition, or results of
operations.
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 six
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 Second Quarter of 1997-98 with the Second Quarter of
- ----------------------------------------------------------------------
1996-97
- -------
Net sales for the second quarter of fiscal 1997-98 were a record $260.8
million, up 2.6% from the $254.2 million reported in the second quarter
of last year. Sales to the medium- and heavy-truck market had the
highest percentage and dollar increases among Modine's major markets
compared with the same period a year ago. Continued recovery in the
North American heavy-truck market led the advance, coupled with the
excellent results from Europe. Sales to customers in the off-highway
market had the second largest increases, with gains in both the North
American construction- and agricultural-equipment areas. Modine's
revenues from the passenger-car and light-truck market were down, due
in part to the currency translation effects of the stronger dollar.
Gross margin increased 1.7%, as a percentage of sales, over the second
quarter of the previous year to 28.9% from 27.2%. Improvements shown in
Europe and the North American truck market and automotive aftermarket
continue to be primarily responsible for the change. These changes are
due in part to lower material costs and continuing productivity increases.
Selling, general and administrative expenses increased 4.3% over last
year's second quarter while increasing 0.2% as a percentage of sales.
Among items contributing to the increase were higher freight and employee-
health costs.
Operating income increased 17.2% over last year's second quarter, or 1.4%
as a percentage of sales. Lower material costs and continuing improvement
in Modine's European operations were the main factors contributing to the
change.
Average outstanding debt levels during the quarter declined by approximately
$12.1 million, or 10.7%, over the same period a year ago. Correspondingly,
interest expense decreased 37.7%, or $0.6 million from a year ago. The
lower interest expense can be attributed to several factors including, a
continuing reduction in higher rate domestic debt through normally scheduled
repayments; lower interest rates on certain non-domestic debt; and reduced
interest expense resulting from completed IRS reviews. Net non-operating
income remained virtually unchanged from the same period last year.
The effective tax rate increased by 2.1% when compared to the same period
last year. The increase is primarily the result of prior year IRS reviews
which lowered the effective rate in that quarter.
<PAGE>
Net earnings for the second quarter were a record $18.2 million or $.60
per share, up 16.4% from last year's $15.7 million, or $.51 per share.
Annualized return on shareholders' investment, at 18.2% for the quarter,
was in management's target range of 15-20%.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
RESULTS OF OPERATIONS
---------------------
Comparison of the First Six Months of 1997-98 with the First Six
- ----------------------------------------------------------------
Months of 1996-97
- -----------------
Net sales for the first six months of fiscal 1997-98 reached a
record $517.7 million, up 3.0% from the $502.7 million reported
in the first six months of last year. In comparing sales by
major market, the first half of fiscal 97-98 paralleled the
results reported for the second quarter. Sales to the medium-
and heavy-truck market had the highest percentage and dollar
increases among Modine's major market compared with the same
period a year ago. Continued recovery in the North American
heavy-truck market led the advance with Europe generating
excellent results as well. Sales to Modine customers in the off-
highway market had the second largest increases, with gains in
both the North American construction- and agricultural-equipment
areas. Modine's revenues from the passenger-car and light-truck
market were down, due in part to the currency translation effects
of the stronger dollar. Overall, the stronger U.S. dollar
negatively impacted the translation of foreign sales by $24.4
million in the first half of the year.
Gross margin increased 1.9%, as a percent of sales, over the
first six months of the previous year to 29.0% from 27.1%. Lower
material costs and continuing improvement in European operations
were the main factors responsible for the change.
Selling, general and administrative expenses increased 5.0% over
the first six months last year while increasing 0.3% as a
percentage of sales. An increase in freight and employee health-
care costs were among the items contributing to the overall
increase.
Average outstanding debt levels during the first six months
decreased by approximately $10.6 million, or 9.4%, over the same
period a year ago. Corresponding interest expense declined by
26.4%, or $0.8 million, over the same six month period, a year
ago. The lower interest expense can be attributed to several
factors including; a continuing reduction in higher rate domestic
debt through normally scheduled repayments; lower interest rates
on certain non-domestic debt; and reduced interest expense
resulting from completed IRS reviews.
Operating income increased by 19% over the first half of the
previous year, or 1.6% as a percentage of sales. As mentioned
previously, lower material costs and improving European
operations were the primary reasons for the change.
The effective tax rate increased by 3.1% 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 six months were $36.4 million, or $1.20 per
share, up 13.6% from last year's $32.0 million, or $1.05 per
share. Annualized return on shareholders' investment, at 18.5%
for the first six months met management's target range of 15-20%.
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 Unites 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.
<PAGE>
FINANCIAL CONDITION
-------------------
Comparison between September 26, 1997 and March 31, 1997
- --------------------------------------------------------
Current Assets
- --------------
Cash and cash equivalents decreased by $6.9 million to a total of
$27.9 million. The Company's primary sources of liquidity and
capital resources were cash provided by operations and the use of
available borrowing facilities.
Net trade receivables increased $15.6 million, or 10.4%. Normal
seasonal marketing programs in the heating and aftermarket
divisions and stronger truck sales were the main factors
contributing to the increase shown.
Overall inventory levels decreased by $2.1 million. Among the
items affecting inventory were ongoing management efforts to
control inventory levels, changes in sales volumes, exchange rate
fluctuations in Europe, and process and product line changes at
certain manufacturing facilities.
Deferred income taxes and other current assets were virtually
unchanged.
Working capital increased approximately 3.3% to $202.6 million
from $196.1 million and the current ratio remained at 2.2 to 1.
A number of categories experienced changes, with the largest
items influencing the change being a seasonal increase in trade
receivables, an increase in debt due within a year, and a
reduction in cash.
Property, Plant and Equipment
- -----------------------------
Net property, plant and equipment increased $8.1 million to
$218.2 million as capital expenditures exceeded depreciation,
retirements and foreign currency translation impact. Outstanding
material commitments for capital expenditures were $55.9 million
at September 26, 1997, compared to $27.0 million at March 31,
1997. The largest commitment of approximately $22.9 million
relates to the construction of a new technical center in Racine,
Wisconsin. Approximately $16.4 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, net of accumulated amortization declined $3.4
million. Amortization and foreign currency translations were the
main items contributing to the change.
<PAGE>
Deferred Charges and Other Assets
- ---------------------------------
Deferred charges and other assets increased $1.6 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 and various accrued expenses decreased $2.2
million. Normal timing differences in the level of operating
activity were responsible for the decline. Accrued income taxes
decreased $1.9 million from normal timing differences in making
estimated tax payments and federal tax benefits resulting from
the exercise of stock options.
Debt
- ----
Outstanding debt decreased by $1.2 million from March 31, 1997.
Long-term debt decreased by $9.2 million while short-term debt
increased by $8.0 million. Most of the increase in short-term
debt was domestic while the decrease in long-term debt was about
evenly divided between domestic and foreign.
Consolidated available lines of credit decreased by $1.5 million
which was largely utilized for short-term borrowing by the
Company's European subsidiaries. Foreign unused lines of credit
at September 26, 1997 were $5.7 million, while the Company had
$13.0 million available under its domestic revolving credit
facility. Total debt as a percentage of shareholders' equity
decreased from 26.5% to 25.0%.
Shareholders' Investment
- ------------------------
Total shareholders' investment increased by $17.7 million to a
total of $403.3 million. The net increase came primarily from
net earnings of $36.4 million for the first six months. The
value of the dollar increased relative to other currencies during
the first half of the year, resulting in an unfavorable currency
impact of $3.4 million. Dividends paid to shareholders of $11.3
million, net treasury stock purchases of $2.2 million, and other
minor changes to the capital accounts also contributed to the
change.
<PAGE>
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 in the Federal
District Court in Milwaukee, Wisconsin against Mitsubishi Motor
Sales of America, Inc. and Showa Aluminum Corporation, alleging
infringement of the Company's Patent No. 4,998,580 on parallel-
flow air-conditioning condensers. The suit seeks an injunction
to prohibit continued infringement and accounting for damages, a
trebling of such damages for willful infringement, and
reimbursement of attorneys' fees. In December of 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 August 1997, the ITC issued an Order
excluding from U.S. import Showa condensers that infringe Modine
Manufacturing Company's parallel-flow patent. The ITC's Order
covers condensers, their parts, and certain products including
them, such as air-conditioning kits and systems. It directs the
U.S. Customs Service to exclude from importation into the United
States such products manufactured by Showa Aluminum Corporation
of Japan and Showa Aluminum Corporation of America. The decision
is based on a Modine U.S. patent covering condensers with tube
hydraulic diameters less than 0.04822 inches. The Showa
companies must certify to Customs officials that any condenser
items imported by them do not infringe Modine's parallel-flow
patent. The companies must also file annual reports with the ITC
regarding their sales of Showa parallel-flow condensers in the
United States.
In July of 1994, Showa filed a lawsuit against the Company in the
Federal District Court in Columbus, Ohio alleging infringement by
the Company of Showa's patents pertaining to double circuit
condensers and baffles therefor (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 Motor Sales of America, Inc. and Showa Aluminum
Corporation in the Federal District Court in Milwaukee, Wisconsin
pertaining to the Company's newly-issued Patent No. 5,372,188
<PAGE>
also pertaining to parallel-flow air-conditioning condensers.
Both 1994 suits have been stayed pending the outcome of re-
examination in the U. S. Patent Office of the patents involved.
In October of 1997, Modine has been issued a Japanese patent (in
spite of oppositions by many parties) covering parallel-flow air
conditioning condensers having tube hydraulic diameters less than
0.070 inches. A similar patent has been issued to Modine by the
European Patent Office and is currently in the opposition stage.
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 5. Other Information.
On November 10, 1997, Norwest Bank Minnesota, N.A., will become
the transfer agent, registrar, dividend disbursement agent, and
administrator of the Modine Dividend Reinvestment Plan (DRP) for
shareholders of Modine Manufacturing Company.
Also effective November 10, 1997, Norwest becomes the rights
agent under the terms of the Modine shareholder Rights Plan. The
plan, which is discussed in Note 16 of the 1997 Annual Report,
was initiated in October 1986. During fiscal 1995, Modine
extended the expiration date of the rights, which will expire on
October 27, 2006, unless previously redeemed.
American Stock Transfer & Trust Company, the current transfer
agent and registrar, will act in that capacity until the close of
business on Friday, November 7.
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, 1992).
<PAGE>
Reference Number
per Item 601 of
Regulation S-K Page
- ---------------- ----
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. 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 18
27* Financial Data Schedule (electronic
transmission only).
99* Important Factors and Assumptions Regarding
Forwarding-Looking Statements. 19
*Filed herewith.
(b) Reports on Form 8-K:
-------------------
The Company filed no Reports on Form 8-K during the quarter ended
September 26, 1997.
<PAGE>
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: November 3, 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 Six months ended
------------------- -------------------
September 26 September 26
------------------- -------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Primary
Weighted average shares outstanding 29,764 29,855 29,782 29,819
Share equivalents for period prior to
exercise (options exercised) 40 14 71 29
Net shares issuable, assuming exercise
of options using average market price
and employing the treasury stock method. 623 590 561 582
-------- -------- -------- --------
Average common share and common
share equivalents 30,427 30,459 30,414 30,430
======== ======== ======== ========
Net earnings for the period $ 18,229 $ 15,654 $ 36,414 $ 32,044
======== ======== ======== ========
Net earnings per share of common stock $0.60 $0.51 $1.20 $1.05
======== ======== ======== ========
Fully Diluted
Weighted average shares outstanding 29,764 29,855 29,782 29,819
Share equivalents for period prior to
exercise (options exercised) 43 14 75 29
Net shares issuable, assuming exercise
of options using ending market price
(unless antidilutive) and employing
the treasury stock method 743 604 743 604
-------- -------- -------- --------
Average common share and common
share equivalents 30,550 30,473 30,600 30,452
======== ======== ======== ========
Net earnings for the period $ 18,229 $ 15,654 $ 36,414 $ 32,044
======== ======== ======== ========
Net earnings per share of common stock $0.60 $0.51 $1.19 $1.05
======== ======== ======== ========
</TABLE>
<PAGE>
<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 9/26/97 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-1-1997
<PERIOD-END> SEP-26-1997
<CASH> 37,380
<SECURITIES> 0
<RECEIVABLES> 170,040
<ALLOWANCES> 4,690
<INVENTORY> 140,016
<CURRENT-ASSETS> 372,775
<PP&E> 478,400
<DEPRECIATION> 260,197
<TOTAL-ASSETS> 707,610
<CURRENT-LIABILITIES> 170,169
<BONDS> 79,743
0
0
<COMMON> 18,964
<OTHER-SE> 384,377
<TOTAL-LIABILITY-AND-EQUITY> 707,610
<SALES> 517,729
<TOTAL-REVENUES> 517,729
<CGS> 367,399
<TOTAL-COSTS> 367,399
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 622
<INTEREST-EXPENSE> 2,108
<INCOME-PRETAX> 58,248
<INCOME-TAX> 21,834
<INCOME-CONTINUING> 36,414
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,414
<EPS-PRIMARY> 1.20
<EPS-DILUTED> 1.19
</TABLE>
<PAGE>
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 in 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 non-domestic; 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>
