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, 1998
-------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-1373
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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
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (414) 636-1200
--------------
NOT APPLICABLE
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(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 5, 1998
------------------------------ -----------------------------
Common Stock, $0.625 Par Value 29,607,171
<PAGE>
MODINE MANUFACTURING COMPANY
INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets -
June 26 and March 31, 1998 3
Consolidated Statements of Earnings -
For the Three Months Ended
June 26, 1998 and 1997 4
Consolidated Statements of Cash Flows -
For the Three Months Ended June 26,
1998 and 1997 5
Notes to Consolidated Financial Statements 6-8
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial
Condition 9-12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13-14
Item 5. Other Events 14
Item 6. Exhibits and Reports on Form 8-K 15-16
Signatures 17
<PAGE>
<TABLE>
MODINE MANUFACTURING COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands, except per-share amounts)
June 26, 1998 and March 31, 1998
(Unaudited)
<CAPTION>
June 26, 1998 March 31, 1998
------------- --------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 31,439 $ 36,410
Trade receivables, less allowance for
doubtful accounts of $4,795 and $4,585 175,497 162,177
Inventories 150,655 152,674
Deferred income taxes and other current
assets 43,071 41,922
-------- --------
Total current assets 400,662 393,183
-------- --------
Other assets:
Property, plant, and equipment -- net 263,306 248,253
Investment in affiliates 7,996 8,376
Intangible assets -- net 58,353 59,355
Deferred charges and other noncurrent
assets 50,782 49,857
-------- --------
Total other assets 380,437 365,841
-------- --------
Total assets $781,099 $759,024
======== ========
<CAPTION>
LIABILITIES AND SHAREHOLDERS' INVESTMENT
<S> <C> <C>
Current liabilities:
Short-term debt $ 22,687 $ 20,878
Long-term debt -- current portion 2,395 2,835
Accounts payable 72,110 84,345
Accrued compensation and employee benefits 50,243 48,081
Income taxes 18,730 10,073
Accrued expenses and other current
liabilities 28,539 26,516
-------- --------
Total current liabilities 194,704 192,728
-------- --------
Other liabilities:
Long-term debt 97,114 89,587
Deferred income taxes 14,247 14,258
Other noncurrent liabilities 40,667 39,976
-------- --------
Total other liabilities 152,028 143,821
-------- --------
Total liabilities 346,732 336,549
-------- --------
<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 12,615 12,384
Retained earnings 435,397 423,001
Foreign currency translation adjustment (7,712) (8,102)
Treasury stock at cost: 698 and 678
shares, respectively (22,338) (20,977)
Restricted stock - unamortized value (2,559) (2,795)
-------- --------
Total shareholders' investment 434,367 422,475
-------- --------
Total liabilities and shareholders'
investment $781,099 $759,024
======== ========
<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, 1998 and 1997
(In thousands, except per-share amounts)
(Unaudited)
<CAPTION>
Three months ended June 26
--------------------------
1998 1997
---------- -----------
<S> <C> <C>
Net sales $273,104 $256,923
Cost of sales 194,646 181,882
-------- --------
Gross profit 78,458 75,041
Selling, general, and administrative expenses 45,612 44,549
-------- --------
Income from operations 32,846 30,492
Non-operating income 2,220 1,890
Interest expense (1,046) (1,135)
Non-operating expense (1,364) (1,427)
-------- --------
Earnings before income taxes 32,656 29,820
Provision for income taxes 12,576 11,635
-------- --------
Net earnings $ 20,080 $ 18,185
======== ========
Net earnings per share of common stock
- Basic $0.68 $0.61
- Assuming dilution $0.67 $0.60
======== ========
Dividends per share $0.21 $0.19
======== ========
Weighted average shares - basic 29,644 29,802
Weighted average shares - assuming dilution 30,185 30,271
======== ========
<FN>
(See accompanying notes to consolidated financial statements.)
</TABLE>
<PAGE>
<TABLE>
MODINE MANUFACTURING COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Three Months Ended June 26, 1998 and 1997
(Unaudited)
<CAPTION>
Three months ended June 26
--------------------------
1998 1997
---------- ----------
<S> <C> <C>
Net cash provided by operating activities $20,393 $23,430
Cash flows from investing activities:
Expenditures for property, plant, and
equipment (24,117) (14,656)
Proceeds from dispositions of assets 14 (8)
Other -- net (140) (41)
------- -------
Net cash (used for) investing activities (24,243) (14,705)
Cash flows from financing activities:
Increase in short-term debt -- net 1,694 688
Additions to long-term debt 8,166 2,202
Reductions of long-term debt (1,944) (1,092)
Issuance of common stock, including
treasury stock 1,323 392
Purchase of treasury stock (4,132) (2,698)
Cash dividends paid (6,228) (5,659)
------- -------
Net cash (used for) financing activities (1,121) (6,167)
------- -------
Net (decrease)/increase in cash and cash
equivalents (4,971) 2,558
Cash and cash equivalents at beginning
of period 36,410 34,822
------- -------
Cash and cash equivalents at end of period $31,439 $37,380
======= =======
<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, 1998 March 31, 1998
--------------------------------------------------------------
Raw materials $ 38,332 $ 41,164
Work in process 41,866 41,231
Finished goods 70,457 70,279
-------- --------
Total inventories $150,655 $152,674
======== ========
2. Property, plant, and equipment is composed of:
(In Thousands)
--------------------------------------------------------------
June 26, 1998 March 31, 1998
--------------------------------------------------------------
Gross, property,
plant & equipment $536,524 $510,868
Less accumulated
depreciation (273,218) (262,615)
-------- --------
Net property,
plant & equipment $263,306 $248,253
======== ========
3. Intangible assets include:
(In Thousands)
--------------------------------------------------------------
June 26, 1998 March 31, 1998
--------------------------------------------------------------
Intangible assets $ 76,795 $ 76,505
Less accumulated
amortization (18,442) (17,150)
-------- --------
Net intangible assets $ 58,353 $ 59,355
======== ========
4. Recent developments concerning legal proceedings reported in
the Company's Form 10-K report for the year ended March 31,
1998, are updated in Part II, Other Information, Item 1,
Legal Proceedings. While the outcome of these proceedings
<PAGE>
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.
5. The computation of basic and diluted earnings per share, as
prescribed by FASB 128, is as follows:
(In thousands, except per-share amounts)
-----------------------------------------------------------------
Three months ended June 26
-----------------------------------------------------------------
1998 1997
-----------------------------------------------------------------
Net earnings per share of common stock:
--------------------------------------
- Basic $0.68 $0.61
- Assuming dilution $0.67 $0.60
Numerator:
---------
Income available to common
shareholders $20,080 $18,185
Denominator:
-----------
Weighted average shares
outstanding - Basic 29,644 29,802
Effect of dilutive securities -
options* 541 469
Weighted average shares
outstanding - Assuming dilution 30,185 30,271
* There were outstanding options to purchase common stock at
prices that exceeded the average market price for the income
statement period as follows:
Average market price per share $34.90 $27.90
Number of shares None 511
6. On June 18, 1998, the Company announced that it will invest $53
million over the next five fiscal years to build a world-class
technical center and new headquarters for its Modine-Europe
operations. Construction of the technical center will begin
late in 1998 near Stuttgart, Germany, while construction of the
European headquarters is expected to be started in April 1999.
These projects will be financed through a combination of funds
generated from continuing operations and outside borrowing as
required.
7. On July 15, 1998, the Company announced it had signed a letter
of intent to acquire Core Holdings Incorporated of Orlando, Fla.,
an aftermarket wholesale distributor specializing in complete
lines of vehicular cooling system products, including radiator
systems and air-conditioning components. The acquisition,
scheduled for September following regulatory and final Modine
Board of Directors'approval, will be through a tax-free exchange
of Modine stock for 100 percent of the shares of Core Holdings.
<PAGE>
Core Holdings had sales of $54.1 million in 1997. Its 350
employees operate out of more than 50 locations throughout the
southeastern United States. Core Holdings also ships its full
line of air-conditioning parts to warehouse distributors in
other geographic markets. It distributes primarily to radiator
shops, air-conditioning shops, specialty repair shops and garages.
In addition, it manufactures air-conditioning parts at a plant
in Texas.
8. On April 1, 1998, the Company adopted Financial Accounting
Standards Board Statement No. 130, "Reporting Comprehensive
Income," which became effective for interim and annual
financial statement periods in fiscal years beginning after
December 15, 1997. This pronouncement established new
standards for reporting comprehensive income and its
components; however, the adoption of SFAS No. 130 has had no
impact on the Company's net income or shareholders' equity.
For the Company, the difference between net income as
historically reported in the statements of consolidated
income, and comprehensive income, is foreign currency
translation recorded in shareholders' equity. Comprehensive
earnings were $20,470 and $17,363 for the three months ended
June 26, 1998 and 1997, respectively.
9. On June 15, 1998, the Financial Accounting Standards Board
issued SFAS No. 133, "Accounting for Derivative Instruments
and Hedging Activities." The statement requires companies to
recognize all derivatives as either assets or liabilities,
with the instruments measured at fair value. The accounting
for changes in fair value, gains or losses, depends on the
intended use of the derivative and its resulting designation.
The statement is effective for all fiscal quarters of fiscal
years beginning after June 15, 1999. The Company will adopt
SFAS 133 beginning April 1, 2000. Adoption of this statement
is not expected to have a material effect on earnings or
financial position.
10. 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, 1998 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 1999 are not necessarily
indicative of the results to be expected for the full year.
11. 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 1998 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, 1998.
<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 1998-99 with the First Quarter
- -----------------------------------------------------------------
of 1997-98
- ----------
Net sales for the first quarter of fiscal 1998-99 were a record
$273.1 million, up 6.3% from the $256.9 million reported in the
first quarter of last year.
Revenues from European operations were up significantly despite
the currency-translation effect from a stronger U.S. dollar. Had
the value been the same as one year ago, total consolidated sales
would have grown by another $5 million. On a worldwide basis the
strongest sales increases were to off-highway and to medium- and
heavy-truck customers. Sales to the automotive market were
particularly good in Europe. Revenues from most other major
markets showed small increases, but the building-HVAC area was
down.
Gross margin decreased 0.5%, as a percentage of sales, over the
first quarter of the previous year to 28.7% from 29.2%. Higher
overhead costs in Europe was the main factor for the change.
Selling, general and administrative expenses increased 2.4% over
last year's first quarter while decreasing 0.6%, as a percent of
sales. A number of categories registered small increases over a
year ago, while the currency translation effect of the stronger
dollar continued to influence these costs in a positive manner.
Average outstanding debt levels increased $16.3 million, or
approximately 15.8%, from the same quarter a year ago while
interest expense declined 7.8%, or $0.1 million from a year ago.
An increase in major plant, property and equipment projects
resulted in larger amounts of interest being capitalized during
the current year. Net non-operating income increased by $0.4
million. Higher interest income was the largest factor
contributing to the increase.
The effective tax rate of 38.5% decreased by 0.5% when compared
to the same period last year. The main factors responsible for
the decrease were lower earnings in Germany partially offset by
the tax effect of foreign dividends.
<PAGE>
Net earnings for the quarter increased 10.4% to $20.1 million, or
$0.68 basic and $0.67 diluted earnings per share from last year's
$18.2 million, or $0.61 basic and $0.60 diluted earnings per
share. Return on shareholders' investment, at 18.7 percent, was
in the Company target range of 15-20 percent, and was slightly
above the rate last year.
Outlook for the Remainder of the Year
- -------------------------------------
As forecast in the annual report, the Company's short-term sales
outlook is strong, based on customer projections for their
businesses and on internal sales and marketing plans. The
increase in the Company's annual consolidated sales should
approach ten percent, excluding acquisitions. European operations
are expected to record the greatest growth, largely due to a
major new program in the automotive sector. Although the Company
could face some softness in the current year's second quarter as
a result of normal customer and plant summer shutdowns,
management expects full-year earnings to grow at rates similar to
the first quarter. 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 June 26, 1998 and March 31, 1998
- ---------------------------------------------------
Current Assets
- --------------
Cash and cash equivalents decreased by $5.0 million to a total of
$31.4 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 $13.3 million, or 8.2%. An
increase in total sales, including greater sales to customers with
longer payment terms, were the contributing factors to the change.
Inventory levels declined by $2.0 million to $150.7 million, down
1.3 percent. Among the items affecting 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 increased $1.1
million, with the majority of the change occurring in other
current asset categories.
Working capital increased 2.7% to $206.0 million from $200.5
million while the current ratio increased slightly to 2.1 to 1
from 2.0 to 1. A number of categories experienced changes, but
the largest items influencing the change were increased trade
receivables and decreased accounts payable, partially offset by
an increase in income taxes payable.
Property, Plant and Equipment
- -----------------------------
Net property, plant and equipment increased $15.1 million to
$263.3 million as capital expenditures and the effect of foreign
currency translation exceeded depreciation and retirements.
Outstanding material commitments for capital expenditures were
$48.8 million at June 26, 1998, compared to $48.1 million at
March 31, 1998. The largest commitment of approximately $22.9
million is related to facility expansions, improvements,
equipment upgrades, and new equipment for a number of European
plants. Another $6.9 million relates to the construction of a
new technical center in Racine, Wisconsin. The outstanding
commitments will be primarily financed through a combination of
funds generated from continuing operations and outside borrowing
as required.
Intangible Assets
- -----------------
Intangible assets decreased $1.0 million. Amortization and
foreign currency translations were the main items contributing to
the change.
<PAGE>
Deferred Charges and Other Noncurrent Assets
- --------------------------------------------
Deferred charges and other noncurrent assets increased $0.9
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 $8.1
million. Normal timing differences in the level of operating
activity were responsible for the decrease. Accrued income taxes
increased $8.7 million from normal timing differences in making
estimated payments and certain federal tax benefits.
Debt
- ----
Outstanding debt increased by $8.9 million. Long-term debt
increased by $7.1 million, mostly at the Company's European
subsidiaries. Short-term debt increased $1.8 million. U.S. bank
lines of credit increased by $6.0 million for working capital
purposes. European subsidiaries decreased their short-term debt
by $4.2 million.
Consolidated available lines of credit increased during the first
quarter by $2.3 million. The foreign unused lines of credit at
June 26, 1998 were $13.2 million, while the Company had $3.1
million available under a domestic multi-currency revolving
credit agreement. Total debt as a percentage of shareholders'
equity increased from 26.8% to 28.1%.
Shareholders' Investment
- ------------------------
Total shareholders' investment increased by $11.9 million to a
total of $434.4 million. The net increase resulted primarily
from net earnings of $20.1 million for the first three months.
Also contributing to the increase was a favorable foreign
currency translation impact of $0.4 million during the quarter.
Offsetting items included dividends paid to shareholders of $6.2
million, net treasury stock transactions of $1.4 million and
other less significant changes to the capital accounts.
<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 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 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 Showa 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 alleging infringement by the Company of 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 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 was issued a Japanese patent (in spite of opposition by
many parties) covering parallel-flow air-conditioning condensers
having tube hydraulic diameters less than 0.070 inches. A
<PAGE>
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.
Under the rules of the Securities and Exchange Commission,
certain environmental proceedings are not deemed to be ordinary
or routine proceedings incidental to the Company's business and
are required to be reported in the Company's annual and/or
quarterly reports. The Company is not currently a party to any
such proceedings.
Item 5. Other Events.
On August 5, 1998, the Company closed the purchase of 50 percent
of Radiadores Visconde Ltda., a Brazilian heat-transfer company.
Visconde's 1997 net sales were approximately $60 million, about
70 percent of which were for the aftermarket, both domestic and
export. The company has 750 employees and has ISO-9001
certification for aluminum radiators. Visconde makes heat-
exchanger components, assemblies, and modules that include
radiators, oil coolers, and charge-air coolers at facilities in
Sao Paulo, Brazil. It serves the passenger-car aftermarket and
the truck, bus, engine, agricultural-tractor, hydraulic-system,
compressor, marine, construction-equipment, power-generated, and
industrial markets.
On June 18, 1998, Modine formed a joint venture company with
Daikin Industries, Ltd., one of the largest air-conditioning
manufacturers in the world. The joint venture, called Daikin-
Modine, Inc., will manufacture a new line of packaged, rooftop,
air-conditioning products using state-of-the-art technology,
including Modine's patented PF (parallel flow) heat exchangers.
Daikin, based in Osaka, Japan, is the strongest commercial air-
conditioning manufacturer in Japan, with market strengths in Asia
and Europe. Daikin has state-of-the-art air-conditioning and
refrigeration technology, producing its own compressors, other
components, and refrigerants. Modine's gas-heating products are
manufactured in Virginia and the joint venture company will begin
operations in a Modine facility in Rockbridge County, near
Lexington, VA. Modine has an established distribution network in
the U.S. building-HVAC (heating, ventilating, air-conditioning)
market. Each partner owns 50 percent of Daikin-Modine.
Following changes to the Rockbridge facility, the joint venture
company will begin production in 1999.
On June 18, 1998, the Company announced that it will invest $53
million over the next five fiscal years to build a world-class
technical center and headquarters in Europe. See Footnote 6 to
the Notes to Consolidated Financial Statements (unaudited) of
this Report.
On July 15, 1998, the Company announced that it had signed a
letter of intent to acquire Core Holdings Incorporated of
Orlando, Florida. See Footnote 7 to the Notes to Consolidated
Financial Statements (unaudited) of this Report.
<PAGE>
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
- -------------- ----
3 Restated By-Laws (as amended) (filed
by reference to the Registrant's Annual
Report on Form 10-K for the fiscal year
ended March 31, 1998).
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).
4(b)(iv) Rights Agreement Amendment No. 4 dated as
of November 10, 1997 between the Registrant
and Norwest Bank Minnesota, N.A., (Rights
Agent) (filed by reference to the exhibit
contained within the Registrant's Quarterly
Report on Form 10-Q dated December 26, 1997.)
Note: The amount of long-term debt
authorized under any instrument defining
the rights of holders of long-term debt of
<PAGE>
Reference Number
per Item 601 of
Regulation S-K Page
- -------------- ----
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. The
Registrant agrees to furnish copies of such
instruments to the Commission upon request.
27* Financial Data Schedule (electronic
transmission only).
99* Important Factors and Assumptions Regarding
Forwarding-Looking Statements. 17
*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 5, 1998.
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 6, 1998 By: W. E. PAVLICK
---------------------------------
W. E. Pavlick, Senior Vice
President, General Counsel
and Secretary
<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 6/26/98 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-31-1999
<PERIOD-START> APR-1-1998
<PERIOD-END> JUN-26-1998
<CASH> 31,439
<SECURITIES> 0
<RECEIVABLES> 180,292
<ALLOWANCES> 4,795
<INVENTORY> 150,655
<CURRENT-ASSETS> 400,662
<PP&E> 536,524
<DEPRECIATION> 273,218
<TOTAL-ASSETS> 781,099
<CURRENT-LIABILITIES> 194,704
<BONDS> 97,114
0
0
<COMMON> 18,964
<OTHER-SE> 415,403
<TOTAL-LIABILITY-AND-EQUITY> 781,099
<SALES> 273,104
<TOTAL-REVENUES> 273,104
<CGS> 194,646
<TOTAL-COSTS> 194,646
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 170
<INTEREST-EXPENSE> 1,046
<INCOME-PRETAX> 32,656
<INCOME-TAX> 12,576
<INCOME-CONTINUING> 20,080
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,080
<EPS-PRIMARY> 0.68
<EPS-DILUTED> 0.67
</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 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; the impact of year 2000
compliance by the Company or those entities with which the
Company does business; 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-1999 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>
