þ
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ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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x
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TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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WISCONSIN
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39-0482000
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1500 DeKoven Avenue, Racine, Wisconsin
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53403
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.625 par value
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New York Stock Exchange
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Large Accelerated Filer o | Accelerated Filer þ |
Non-accelerated Filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Incorporated Document
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Location in Form 10-K
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|
Proxy Statement for the 2012 Annual
Meeting of Shareholders
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Part III of Form 10-K
(Items 10, 11, 12, 13, 14)
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PART I
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1 | ||
ITEM 1. | 1 | ||
ITEM 1A. | 9 | ||
ITEM 1B. | 13 | ||
ITEM 2. | 13 | ||
ITEM 3. | 14 | ||
ITEM 4. | 14 | ||
14 | |||
PART II
|
16 | ||
ITEM 5. | 16 | ||
ITEM 6. | 17 | ||
ITEM 7. | 18 | ||
ITEM 7A. | 37 | ||
ITEM 8. | 42 | ||
ITEM 9. | 84 | ||
ITEM 9A. | 84 | ||
ITEM 9B. | 86 | ||
PART III
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86 | ||
ITEM 10. | 86 | ||
ITEM 11. | 87 | ||
ITEM 12. | 87 | ||
ITEM 13. | 87 | ||
ITEM 14. | 87 | ||
PART IV
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87 | ||
ITEM 15. | 87 | ||
SIGNATURES | 88 | ||
90 | |||
91 |
ITEM 1.
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Fiscal 2012
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Fiscal 2011
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|||||||
Income from operations
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$ | 67,524 | $ | 42,921 | ||||
Tax applied at 30% rate
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(20,257 | ) | (12,876 | ) | ||||
After tax income from operations
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47,267 | 30,045 | ||||||
Less: Minority interest
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343 | - | ||||||
Net operating profit after tax (NOPAT)
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$ | 46,924 | $ | 30,045 | ||||
Divided by:
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||||||||
Average capital (debt + Modine shareholders' equity, last two year ends / divided by 2)
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$ | 494,585 | $ | 475,946 | ||||
Return on average capital employed
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9.5 | % | 6.3 | % |
Fiscal 2012
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Fiscal 2011
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|||||||
Modules/Packages*
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26 | % | 28 | % | ||||
Oil Coolers
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16 | % | 16 | % | ||||
Radiators
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12 | % | 13 | % | ||||
Charge-Air Coolers
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11 | % | 10 | % | ||||
Building HVAC
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10 | % | 10 | % | ||||
Exhaust Gas Recirculation ("EGR") Coolers
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10 | % | 9 | % | ||||
Miscellaneous
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9 | % | 10 | % | ||||
Vehicular Air Conditioning Parts
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6 | % | 4 | % |
North America
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Europe
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South America
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Africa
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Asia/Pacific
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Mexico
United States
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Austria
Germany
Hungary
Italy
The Netherlands
United Kingdom
Russia
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Brazil
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South Africa
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China
India
Japan
South Korea
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-
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Code of Ethics and Business Conduct, which is applicable to all Modine employees, including the principal executive officer, the principal financial officer, the principal accounting officer and directors;
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-
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Corporate Governance Guidelines;
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-
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Audit Committee Charter;
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-
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Officer Nomination and Compensation Committee Charter;
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-
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Corporate Governance and Nominating Committee Charter; and
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-
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Technology Committee Charter.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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Name
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Age, as of
March 31,
2012
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Position
|
||
Thomas A. Burke
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55
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President and Chief Executive Officer (April 2008 – Present); Executive Vice President and Chief Operating Officer (July 2006 – March 2008); and Executive Vice President (May 2005 – July 2006) of the Company. Prior to joining Modine in May 2005, Mr. Burke worked over a period of nine years in various management positions with Visteon Corporation in Detroit, MI, a leading supplier of parts and systems to automotive manufacturers, including as Vice President of North American Operations (2002 – May 2005) and Vice President, European and South American Operations (2001 – 2002). Prior to working at Visteon, Mr. Burke worked in positions of increasing responsibility at Ford Motor Company.
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||
Thomas F. Marry
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51
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Executive Vice President and Chief Operating Officer (February 2012 – Present); Executive Vice President – Europe, Asia and Commercial Products Group (May 2011 – February 2012); Regional Vice President – Asia and Commercial Products Group (November 2007 – May 2011); Managing Director – Powertrain Cooling Products (October 2006 - October 2007); General Manager – Truck Division (2003 - 2006); Director – Engine Products Group (2001 – 2003); Manager – Sales, Marketing and Product Development (1999 - 2001); Marketing Manager (1998 - 1999). Prior to joining Modine, Mr. Marry held positions at General Motors, Robert Bosch and Milwaukee Electric Tool.
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||
Michael B. Lucareli
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43
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Vice President, Finance and Chief Financial Officer (October 2011 – present); Vice President, Finance, Chief Financial Officer and Treasurer (July 2010 – October 2011); Vice President, Finance and Corporate Treasurer (May 2008 – July 2010); Managing Director Financial Operations (November 2006 – May 2008); Director, Financial Operations and Analysis (May 2004 – October 2006); Director, Business Development and Strategic Planning (November 2002 – May 2004); and Business Development and Investor Relations Manager (1999 – October 2002). Prior to joining Modine, Mr. Lucareli was a securities analyst and portfolio manager for Associated Bank’s investment management group in Green Bay, WI. He also served as Director of Investment Research for Alpha Investment Group in Milwaukee, WI and as international research analyst for SEI Corporation in Chicago, IL.
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||
Scott L. Bowser
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48
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Regional Vice President – Americas (March 2009 - Present); Managing Director – Modine Brazil (April 2006 - March 2009); General Sales Manager – Truck Division (January 2002 – March 2006); Plant Manager at the Company’s Pemberville, OH plant (1998 - 2001). Prior to joining Modine, Mr. Bowser held positions at The Pierce Company.
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||
Margaret C. Kelsey
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47
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Vice President, Corporate Development, General Counsel and Secretary (November 2008 – Present); Vice President Corporate Strategy and Business Development (May 2008 – October 2008); Vice President - Finance, Corporate Treasury and Business Development (January 2007 – April 2008); Corporate Treasurer & Assistant Secretary (January 2006 – December 2006); Senior Counsel & Assistant Secretary (April 2002 - December 2005); Senior Counsel (2001 – March 2002). Prior to joining the Company in 2001, Ms. Kelsey was a partner with the law firm of Quarles & Brady LLP.
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2012
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2011
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|||||||||||||||||||||||
Quarter
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High
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Low
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Dividends
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High
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Low
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Dividends
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||||||||||||||||||
First
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$ | 17.94 | $ | 13.90 | $ | - | $ | 14.91 | $ | 7.62 | $ | - | ||||||||||||
Second
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16.02 | 8.85 | - | 13.22 | 7.10 | - | ||||||||||||||||||
Third
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11.65 | 8.09 | - | 16.28 | 12.10 | - | ||||||||||||||||||
Fourth
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11.36 | 8.25 | - | 17.89 | 13.00 | - | ||||||||||||||||||
TOTAL
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$ | - | $ | - |
Period
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(a)
Total Number of
Shares (or Units)
Purchased
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(b)
Average
Price Paid
Per Share
(or Unit)
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(c)
Total Number of Shares
(or Units) Purchased as
Part of Publicly
Announced Plans or
Programs
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(d)
Maximum
Number (or
Approximate Dollar
Value) of Shares
(or Units) that May
Yet Be Purchased
Under the Plans or
Programs
|
||||||
January 1 – January 31,
2012
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________
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_______
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_______
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_______
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||||||
February 1 – February 29,
2012
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4,355(1) | $10.06 |
_______
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_______
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||||||
March 1 – March 31,
2012
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________
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_______
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_______
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_______
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||||||
Total
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4,355(1) | $10.06 |
_______
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_______
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(1)
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Consists of shares delivered back to the Company by employees and/or directors to satisfy tax withholding obligations that arise upon the vesting of stock awards. These shares are held as treasury shares.
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March 31,
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Initial Investment
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Indexed Returns
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||||||||||||||||||||||
2007
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2008
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2009
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2010
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2011
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2012
|
|||||||||||||||||||
Company / Index
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||||||||||||||||||||||||
Modine Manufacturing Company
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$ | 100 | $ | 65.60 | $ | 11.72 | $ | 52.70 | $ | 75.67 | $ | 41.40 | ||||||||||||
Russell 2000 Index
|
100 | 87.00 | 54.37 | 88.50 | 111.32 | 111.12 | ||||||||||||||||||
S&P MidCap 400 Industrials Index
|
100 | 101.59 | 60.53 | 99.56 | 133.53 | 137.23 |
ITEM 6.
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(in thousands, except per share amounts)
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Fiscal Year ended March 31
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|||||||||||||||||||
2012
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2011
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2010
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2009
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2008
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||||||||||||||||
Net sales
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$ | 1,577,152 | $ | 1,448,235 | $ | 1,162,576 | $ | 1,406,944 | $ | 1,603,527 | ||||||||||
Earnings (loss) from continuing operations
|
37,980 | 8,280 | (22,845 | ) | (107,326 | ) | (56,183 | ) | ||||||||||||
Total assets
|
893,461 | 917,742 | 841,615 | 852,790 | 1,169,478 | |||||||||||||||
Long-term debt - excluding current portion
|
141,892 | 138,582 | 243,982 | 243,982 | 224,525 | |||||||||||||||
Dividends per share
|
- | - | - | 0.30 | 0.70 | |||||||||||||||
Net earnings (loss) from continuing operations per share of common stock - basic
|
0.81 | 0.18 | (0.58 | ) | (3.35 | ) | (1.75 | ) | ||||||||||||
Net earnings (loss) from continuing operations per share of common stock - diluted
|
0.80 | 0.18 | (0.58 | ) | (3.35 | ) | (1.75 | ) |
● |
During fiscal 2011, the Company recognized a loss of $19.9 million on early extinguishment of debt and write-off of unamortized debt issuance costs which are classified as components of interest expense. During fiscal 2010, the Company recognized a prepayment penalty of $3.5 million related to a partial paydown of debt which is included as a component of interest expense.
|
●
|
During fiscal 2009, the Company recorded a goodwill impairment charge of $9.0 million within the Original Equipment – Europe segment. During fiscal 2008, the Company recorded a goodwill impairment charge of $23.8 million within the Original Equipment – North America segment.
|
●
|
During fiscal 2012, 2011, 2010, 2009 and 2008, the Company recorded long-lived asset impairment charges of $0.3 million, $3.5 million, $6.5 million, $26.8 million and $11.6 million, respectively. Refer to Note 10 of the Notes to Consolidated Financial Statements for additional discussion of these charges.
|
●
|
During fiscal 2009, the Company recognized an impairment charge of $7.6 million recorded in other expense (income) – net on an equity investment.
|
●
|
During fiscal 2012 and fiscal 2011 the Company’s effective tax rate was 20.7% and 35.4%, respectively, as the Company continues to pay taxes in foreign jurisdictions that earn profits, but does not recognize any tax benefits on losses generated in the U.S., Germany and Austria based on full tax valuation allowances recorded in these jurisdictions. The fiscal 2012 and fiscal 2011 provision for income taxes also included a Hungary tax credit of $4.4 million and $7.8 million, respectively. During fiscal 2010, the Company’s effective tax rate was negative 73.4%. During fiscal 2009, the Company’s effective tax rate was negative 1.4%. During fiscal 2008, the Company’s effective tax rate was negative 203.8% due to a valuation allowance of $59.4 million recorded primarily against the net U.S. deferred tax assets. Refer to Note 6 of the Notes to Consolidated Financial Statements for additional discussion on the effective tax rate.
|
●
|
During fiscal 2010, 2009 and 2008, the Company incurred $6.0 million, $39.5 million and $10.2 million, respectively, of restructuring and other repositioning costs. Refer to Note 13 of the Notes to Consolidated Financial Statements for additional discussion of the events which comprised these costs.
|
●
|
Fiscal 2009 and 2008 results have been revised for errors identified in prior periods, the nature of which are disclosed in Note 1 of the Notes to Consolidated Financial Statements. The impact of these revisions on fiscal 2009 and 2008 financial information are as follows:
|
● |
Development of new products and technologies for diverse geographic and end markets;
|
● |
A rigorous strategic planning and corporate development process; and
|
● |
Operational and financial discipline to ensure improved profitability and long-term stability.
|
● |
Reducing lead times to bring new products to market and offering a wider product breadth, while at the same time rationalizing the existing product lines to meet required financial metrics or fit within our overall strategy.
|
● |
Pursuing only selected new business opportunities that meet our minimum targeted rates of return, thus enabling profitable growth to the Company.
|
● |
Expanding the product and market focus in order to leverage the competitive cost structure.
|
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||||||||||||||
(dollars in millions)
|
$'s
|
% of sales
|
$'s
|
% of sales
|
$'s
|
% of sales
|
||||||||||||||||||
Net sales
|
$ | 1,577 | 100.0 | % | $ | 1,448 | 100.0 | % | $ | 1,163 | 100.0 | % | ||||||||||||
Cost of sales
|
1,321 | 83.7 | % | 1,216 | 84.0 | % | 990 | 85.2 | % | |||||||||||||||
Gross profit
|
257 | 16.3 | % | 232 | 16.0 | % | 172 | 14.8 | % | |||||||||||||||
Selling, general and administrative expenses
|
189 | 12.0 | % | 189 | 13.1 | % | 168 | 14.4 | % | |||||||||||||||
Income from operations
|
68 | 4.3 | % | 43 | 2.9 | % | 4 | 0.4 | % | |||||||||||||||
Interest expense
|
12 | 0.8 | % | 34 | 2.3 | % | 23 | 2.0 | % | |||||||||||||||
Other expense (income) - net
|
7 | 0.5 | % | (4 | ) | -0.3 | % | (6 | ) | -0.5 | % | |||||||||||||
Earnings (loss) from continuing operations before income taxes
|
48 | 3.1 | % | 13 | 0.9 | % | (13 | ) | -1.1 | % | ||||||||||||||
Provision for income taxes
|
10 | 0.6 | % | 5 | 0.3 | % | 10 | 0.9 | % | |||||||||||||||
Earnings (loss) from continuing operations
|
$ | 38 | 2.4 | % | $ | 8 | 0.6 | % | $ | (23 | ) | -2.0 | % |
Original Equipment
–
Europe
|
||||||||||||||||||||||||
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||||||||||||||
(dollars in millions)
|
$'s
|
% of sales
|
$'s
|
% of sales
|
$'s
|
% of sales
|
||||||||||||||||||
Net sales
|
$ | 603 | 100.0 | % | $ | 547 | 100.0 | % | $ | 469 | 100.0 | % | ||||||||||||
Cost of sales
|
518 | 85.8 | % | 471 | 86.2 | % | 409 | 87.3 | % | |||||||||||||||
Gross profit
|
85 | 14.1 | % | 76 | 13.8 | % | 60 | 12.7 | % | |||||||||||||||
Selling, general and administrative expenses
|
48 | 8.0 | % | 48 | 8.7 | % | 39 | 8.3 | % | |||||||||||||||
Income from continuing operations
|
$ | 37 | 6.1 | % | $ | 28 | 5.1 | % | $ | 21 | 4.4 | % |
Original Equipment
–
North America
|
||||||||||||||||||||||||
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||||||||||||||
(dollars in millions)
|
$'s
|
% of sales
|
$'s
|
% of sales
|
$'s
|
% of sales
|
||||||||||||||||||
Net sales
|
$ | 602 | 100.0 | % | $ | 573 | 100.0 | % | $ | 454 | 100.0 | % | ||||||||||||
Cost of sales
|
512 | 85.1 | % | 494 | 86.2 | % | 397 | 87.5 | % | |||||||||||||||
Gross profit
|
90 | 14.9 | % | 79 | 13.8 | % | 57 | 12.5 | % | |||||||||||||||
Selling, general and administrative expenses
|
42 | 6.9 | % | 47 | 8.2 | % | 46 | 10.1 | % | |||||||||||||||
Income from continuing operations
|
$ | 48 | 8.0 | % | $ | 32 | 5.6 | % | $ | 11 | 2.4 | % |
Commercial Products
|
||||||||||||||||||||||||
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||||||||||||||
(dollars in millions)
|
$'s
|
% of sales
|
$'s
|
% of sales
|
$'s
|
% of sales
|
||||||||||||||||||
Net sales
|
$ | 142 | 100.0 | % | $ | 126 | 100.0 | % | $ | 123 | 100.0 | % | ||||||||||||
Cost of sales
|
100 | 70.1 | % | 87 | 68.9 | % | 87 | 70.6 | % | |||||||||||||||
Gross profit
|
42 | 29.9 | % | 39 | 31.1 | % | 36 | 29.4 | % | |||||||||||||||
Selling, general and administrative expenses
|
28 | 19.9 | % | 26 | 21.0 | % | 24 | 19.5 | % | |||||||||||||||
Income from continuing operations
|
$ | 14 | 10.0 | % | $ | 13 | 10.1 | % | $ | 12 | 9.9 | % |
South America
|
||||||||||||||||||||||||
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||||||||||||||
(dollars in millions)
|
$'s
|
% of sales
|
$'s
|
% of sales
|
$'s
|
% of sales
|
||||||||||||||||||
Net sales
|
$ | 176 | 100.0 | % | $ | 159 | 100.0 | % | $ | 118 | 100.0 | % | ||||||||||||
Cost of sales
|
145 | 82.4 | % | 128 | 80.3 | % | 95 | 80.4 | % | |||||||||||||||
Gross profit
|
31 | 17.6 | % | 31 | 19.7 | % | 23 | 19.6 | % | |||||||||||||||
Selling, general and administrative expenses
|
21 | 11.7 | % | 18 | 11.5 | % | 15 | 13.1 | % | |||||||||||||||
Income from continuing operations
|
$ | 10 | 5.9 | % | $ | 13 | 8.2 | % | $ | 8 | 6.5 | % |
Original Equipment
–
Asia
|
||||||||||||||||||||||||
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||||||||||||||
(dollars in millions)
|
$'s
|
% of sales
|
$'s
|
% of sales
|
$'s
|
% of sales
|
||||||||||||||||||
Net sales
|
$ | 84 | 100.0 | % | $ | 64 | 100.0 | % | $ | 32 | 100.0 | % | ||||||||||||
Cost of sales
|
76 | 90.6 | % | 59 | 91.8 | % | 32 | 99.9 | % | |||||||||||||||
Gross profit
|
8 | 9.4 | % | 5 | 8.2 | % | - | 0.1 | % | |||||||||||||||
Selling, general and administrative expenses
|
10 | 12.3 | % | 8 | 13.0 | % | 5 | 15.1 | % | |||||||||||||||
Loss from continuing operations
|
$ | (2 | ) | -2.9 | % | $ | (3 | ) | -4.8 | % | $ | (5 | ) | -15.0 | % |
Interest Expense Coverage
|
Leverage Ratio
|
||
Ratio Covenant (Not
|
Covenant (Not Permitted
|
||
Permitted to Be Less Than):
|
to Be Greater Than):
|
||
Fiscal quarter ending on or before August 12, 2014
|
3.00 to 1.0
|
3.25 to 1.0
|
|
All fiscal quarters ending thereafter
|
3.00 to 1.0
|
3.00 to 1.0
|
Quarter Ended
June 30, 2011
|
Quarter Ended
September 30, 2011
|
Quarter Ended
December 31, 2011
|
Quarter Ended
March 31, 2012
|
Total
|
||||||||||||||||
Earnings from continuing operations
|
$ | 12,566 | $ | 1,000 | $ | 8,768 | $ | 15,646 | $ | 37,980 | ||||||||||
Net loss (earnings) attributable to noncontrolling interest
|
9 | (38 | ) | (110 | ) | (204 | ) | (343 | ) | |||||||||||
Consolidated interest expense
|
2,990 | 3,297 | 2,893 | 3,303 | 12,483 | |||||||||||||||
Provision for income taxes
|
5,042 | 1,677 | 3,923 | (711 | ) | 9,931 | ||||||||||||||
Depreciation and amortization expense
|
14,952 | 14,202 | 14,214 | 14,322 | 57,690 | |||||||||||||||
Non-cash (income) charges (a)
|
(686 | ) | 3,134 | 3,478 | (86 | ) | 5,840 | |||||||||||||
Restructuring and repositioning charges (income) (b)
|
78 | (52 | ) | 499 | 671 | 1,196 | ||||||||||||||
Adjusted EBITDA
|
$ | 34,951 | $ | 23,220 | $ | 33,665 | $ | 32,941 | $ | 124,777 |
(a)
|
Non-cash (income) charges are comprised of long-lived asset impairments, non-cash restructuring and repositioning charges, exchange gains or losses on inter-company loans and non-cash charges that are unusual, non-recurring or extraordinary, as follows:
|
Quarter Ended
June 30, 2011
|
Quarter Ended
September 30, 2011
|
Quarter Ended
December 31, 2011
|
Quarter Ended
March 31, 2012
|
Total
|
||||||||||||||||
Long-lived asset impairments
|
$ | - | $ | - | $ | - | $ | 330 | $ | 330 | ||||||||||
Loss on disposal of asset
|
- | - | 2,161 | - | 2,161 | |||||||||||||||
Non-cash restructuring and repositioning charges
|
- | - | - | (304 | ) | (304 | ) | |||||||||||||
Exchange (gains) losses on intercompany loans
|
(686 | ) | 3,134 | 1,317 | (112 | ) | 3,653 | |||||||||||||
Non-cash charges
|
$ | (686 | ) | $ | 3,134 | $ | 3,478 | $ | (86 | ) | $ | 5,840 |
(b)
|
Restructuring and repositioning charges represent cash restructuring and repositioning costs incurred in conjunction with the restructuring activities announced on or after January 31, 2008. See Note 13 of the Notes to Consolidated Financial Statements for further discussion on these activities.
|
Four Quarters Ended
March 31, 2012
|
||||
Consolidated interest expense
|
$ | 12,483 | ||
Plus: Other items (a)
|
312 | |||
Total consolidated interest expense
|
$ | 12,795 | ||
Adjusted EBITDA
|
$ | 124,777 | ||
Interest expense coverage ratio
|
9.75 |
|
(a)
|
Other items include line of credit fees and costs associated with the sale of receivables.
|
Four Quarters Ended
March 31, 2012
|
||||
Debt per balance sheet
|
$ | 164,281 | ||
Plus: Indebtedness attributed to sales of accounts receivable
|
23,557 | |||
Net derivative liabilities
|
3,169 | |||
Standby letters of credit
|
80 | |||
Total consolidated debt
|
$ | 191,087 | ||
Adjusted EBITDA
|
$ | 124,777 | ||
Leverage ratio
|
1.53 |
(in thousands)
|
March 31, 2012
|
|||||||||||||||||||
Total
|
Less than
1
year
|
1 - 3 years
|
4 - 5 years
|
More than 5
years
|
||||||||||||||||
Long-term debt
|
$ | 136,319 | $ | 836 | $ | 10,483 | $ | 8,000 | $ | 117,000 | ||||||||||
Interest associated with long-term debt
|
64,978 | 8,820 | 17,397 | 17,007 | 21,754 | |||||||||||||||
Capital lease obligations
|
6,666 | 258 | 555 | 612 | 5,241 | |||||||||||||||
Operating lease obligations
|
21,236 | 5,541 | 6,577 | 3,997 | 5,121 | |||||||||||||||
Capital expenditure commitments
|
14,682 | 10,732 | 3,449 | 501 | - | |||||||||||||||
Other long-term obligations
|
11,702 | 1,276 | 2,553 | 2,553 | 5,320 | |||||||||||||||
Total contractual obligations
|
$ | 255,583 | $ | 27,463 | $ | 41,014 | $ | 32,670 | $ | 154,436 |
● |
The efficient deployment of resources to meet increasing demand for the Company’s products;
|
●
|
The impact of operational inefficiencies as a result of program launches and product transfers;
|
●
|
Modine’s ability to maintain current programs and compete effectively for new business, including its ability to offset or otherwise address increasing pricing pressures from its competitors and price reduction pressures from its customers;
|
●
|
Costs and other effects of the remediation of environmental contamination;
|
●
|
Modine’s ability to obtain profitable business at its facilities in the low cost countries of China, Hungary, Mexico and India and to meet quality standards with products produced at these facilities;
|
●
|
Modine’s ability to successfully implement restructuring plans and drive cost reductions and increased profitability and return on assets as a result;
|
●
|
Unanticipated delays or modifications initiated by major customers with respect to product applications or requirements;
|
●
|
Unanticipated product or manufacturing difficulties, including unanticipated launch challenges and warranty claims;
|
●
|
The possibility that other or more significant issues may be identified in applying VAT in the Original Equipment – Europe segment;
|
●
|
Increasingly complex and restrictive government regulations;
|
●
|
Work stoppages or interference at Modine’s facilities or those of its major customers and/or suppliers; and
|
●
|
Costs and other effects of unanticipated litigation or claims, and the increasing pressures associated with rising healthcare and insurance costs.
|
●
|
Economic, social and political conditions, changes and challenges in the markets where Modine operates and competes, including currency exchange rate fluctuations (particularly the value of the euro relative to the U.S. dollar), tariffs, inflation, changes in interest rates, recession, and restrictions associated with importing and exporting and foreign ownership;
|
●
|
The impact on Modine of increases in commodity prices, particularly Modine’s exposure to the changing prices of aluminum, copper, steel and stainless steel (nickel);
|
●
|
Unanticipated problems with suppliers meeting Modine’s time, quality and price demands;
|
●
|
Modine’s ability or inability to pass increasing commodity prices on to customers as well as the inherent lag in timing of such pass-through pricing; and
|
●
|
The impact of environmental laws and regulations on Modine’s business and the business of Modine’s customers, including Modine’s ability to take advantage of opportunities to supply alternative new technologies to meet environmental emissions standards.
|
●
|
Modine’s ability to fund its liquidity requirements and meet its long-term commitments in the event of any renewed disruption in the credit markets; and
|
●
|
Modine’s ability to realize future tax benefits.
|
●
|
$12.0 million between two loans to its wholly owned subsidiary, Modine Thermal Systems Co (Changzhou, China), with various maturity dates through July 2012; and
|
●
|
$1.3 million between two loans to its wholly owned subsidiary, Modine Thermal Systems Korea, with maturity dates in April 2012;
|
Years ending March 31
|
||||||||||||||||||||||||||||
Expected Maturity Date
|
||||||||||||||||||||||||||||
(dollars in thousands)
|
2013
|
2014
|
2015
|
2016
|
2017
|
Thereafter
|
Total
|
|||||||||||||||||||||
Fixed rate (Foreign denominated)
|
- | - | $ | 1,483 | - | - | - | $ | 1,483 | |||||||||||||||||||
Average interest rate
|
- | - | 4.83 | % | - | - | - | |||||||||||||||||||||
Variable rate (Foregin denominated)
|
$ | 836 | - | - | - | - | - | $ | 836 | |||||||||||||||||||
Average interest rate
|
1.11 | % | - | - | - | - | - | |||||||||||||||||||||
Fixed rate (U.S. dollars)
|
- | - | - | - | $ | 8,000 | $ | 117,000 | $ | 125,000 | ||||||||||||||||||
Average interest rate
|
- | - | - | - | 6.83 | % | 6.83 | % | ||||||||||||||||||||
Variable rate (U.S. dollars)
|
- | - | - | $ | 9,000 | - | - | $ | 9,000 | |||||||||||||||||||
Average interest rate
|
- | - | - | 2.24 | % | - | - |
● |
Cash and investments – Cash deposits and short-term investments are reviewed to ensure banks have credit ratings acceptable to the Company and that all short-term investments are maintained in secured or guaranteed instruments. The Company’s holdings in cash and investments were considered stable and secure at March 31, 2012;
|
● |
Pension assets – The Company has retained outside advisors to assist in the management of the assets in the Company’s defined benefit plans. In making investment decisions, the Company has been guided by an established risk management protocol that focuses on protection of the plan assets against downside risk. The Company ensures that investments within these plans provide appropriate diversification, are subject to monitoring of investment teams and ensure that portfolio managers adhere to the Company’s investment policies. The Company believes it has appropriate investment policies and controls and proactive investment advisors; and
|
● |
Insurance – The Company monitors its insurance providers to ensure that they have acceptable financial ratings. The Company has not identified any concerns in this regard through its review.
|
2012
|
2011
|
2010
|
||||||||||
Net sales
|
$ | 1,577,152 | $ | 1,448,235 | $ | 1,162,576 | ||||||
Cost of sales
|
1,320,582 | 1,215,979 | 990,408 | |||||||||
Gross profit
|
256,570 | 232,256 | 172,168 | |||||||||
Selling, general and administrative expenses
|
189,046 | 189,335 | 168,038 | |||||||||
Income from operations
|
67,524 | 42,921 | 4,130 | |||||||||
Interest expense
|
12,483 | 33,723 | 22,888 | |||||||||
Other expense (income) – net
|
7,130 | (3,625 | ) | (5,586 | ) | |||||||
Earnings (loss) from continuing operations before income taxes
|
47,911 | 12,823 | (13,172 | ) | ||||||||
Provision for income taxes
|
9,931 | 4,543 | 9,673 | |||||||||
Earnings (loss) from continuing operations
|
37,980 | 8,280 | (22,845 | ) | ||||||||
Earnings (loss) from discontinued operations (net of income taxes)
|
824 | (3,047 | ) | (8,981 | ) | |||||||
Net earnings (loss)
|
38,804 | 5,233 | (31,826 | ) | ||||||||
Less: Net earnings attributable to noncontrolling interest
|
343 | - | - | |||||||||
Net earnings (loss) attributable to Modine
|
$ | 38,461 | $ | 5,233 | $ | (31,826 | ) | |||||
Earnings (loss) from continuing operations per common share:
|
||||||||||||
Basic
|
$ | 0.81 | $ | 0.18 | $ | (0.58 | ) | |||||
Diluted
|
$ | 0.80 | $ | 0.18 | $ | (0.58 | ) | |||||
Net earnings (loss) per common share:
|
||||||||||||
Basic
|
$ | 0.83 | $ | 0.11 | $ | (0.81 | ) | |||||
Diluted
|
$ | 0.82 | $ | 0.11 | $ | (0.81 | ) |
2012
|
2011
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 31,445 | $ | 32,930 | ||||
Trade receivables, less allowance for doubtful accounts of $809 and $754
|
216,103 | 219,189 | ||||||
Inventories
|
120,819 | 122,629 | ||||||
Deferred income taxes and other current assets
|
59,164 | 53,680 | ||||||
Total current assets
|
427,531 | 428,428 | ||||||
Noncurrent assets:
|
||||||||
Property, plant and equipment – net
|
412,059 | 430,295 | ||||||
Investment in non-consolidated affiliates
|
3,728 | 3,863 | ||||||
Goodwill
|
29,933 | 31,572 | ||||||
Intangible assets – net
|
5,805 | 6,533 | ||||||
Other noncurrent assets
|
14,405 | 17,051 | ||||||
Total noncurrent assets
|
465,930 | 489,314 | ||||||
Total assets
|
$ | 893,461 | $ | 917,742 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Short-term debt
|
$ | 21,296 | $ | 8,825 | ||||
Long-term debt – current portion
|
1,093 | 262 | ||||||
Accounts payable
|
156,907 | 177,549 | ||||||
Accrued compensation and employee benefits
|
50,643 | 63,163 | ||||||
Income taxes
|
4,494 | 3,739 | ||||||
Accrued expenses and other current liabilities
|
63,118 | 74,446 | ||||||
Total current liabilities
|
297,551 | 327,984 | ||||||
Noncurrent liabilities:
|
||||||||
Long-term debt
|
141,892 | 138,582 | ||||||
Deferred income taxes
|
12,297 | 9,988 | ||||||
Pensions
|
94,091 | 62,926 | ||||||
Postretirement benefits
|
6,426 | 5,967 | ||||||
Other noncurrent liabilities
|
15,072 | 19,983 | ||||||
Total noncurrent liabilities
|
269,778 | 237,446 | ||||||
Total liabilities
|
567,329 | 565,430 | ||||||
Commitments and contingencies (See Note 25)
|
||||||||
Shareholders' equity:
|
||||||||
Preferred stock, $0.025 par value, authorized 16,000 shares, issued - none
|
- | - | ||||||
Common stock, $0.625 par value, authorized
80,000 shares, issued 47,361 and 47,105 shares
|
29,600 | 29,440 | ||||||
Additional paid-in capital
|
168,290 | 166,359 | ||||||
Retained earnings
|
231,828 | 193,367 | ||||||
Accumulated other comprehensive loss
|
(90,306 | ) | (22,854 | ) | ||||
Treasury stock at cost: 594 and 559 shares
|
(14,505 | ) | (14,000 | ) | ||||
Total Modine shareholders' equity
|
324,907 | 352,312 | ||||||
Noncontrolling interest
|
1,225 | - | ||||||
Total equity
|
326,132 | 352,312 | ||||||
Total liabilities and shareholders' equity
|
$ | 893,461 | $ | 917,742 |
2012
|
2011
|
2010
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net earnings (loss)
|
$ | 38,804 | $ | 5,233 | $ | (31,826 | ) | |||||
Adjustments to reconcile net earnings (loss) with net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
57,690 | 56,492 | 64,606 | |||||||||
Loss on sale of businesses
|
- | - | 611 | |||||||||
Pension and postretirement expense
|
5,027 | 6,557 | 1,953 | |||||||||
Loss (gain) from disposition of property, plant and equipment
|
2,791 | (3,448 | ) | (656 | ) | |||||||
Loss from impairment of long-lived assets
|
330 | 3,548 | 14,194 | |||||||||
Deferred income tax provision
|
1,915 | (7,028 | ) | 2,882 | ||||||||
Provision for doubtful accounts
|
178 | (381 | ) | 202 | ||||||||
Undistributed losses (earnings) of affiliates, net of dividends received
|
130 | (469 | ) | 105 | ||||||||
Stock-based compensation expense
|
1,632 | 3,992 | 2,725 | |||||||||
Other – net
|
2,368 | 3,028 | 2,428 | |||||||||
Changes in operating assets and liabilities, excluding dispositions:
|
||||||||||||
Trade receivables
|
(7,505 | ) | (42,990 | ) | (51,763 | ) | ||||||
Inventories
|
(3,123 | ) | (19,351 | ) | (6,707 | ) | ||||||
Other current assets
|
(10,553 | ) | (2,646 | ) | (996 | ) | ||||||
Accounts payable
|
(14,557 | ) | 30,041 | 62,443 | ||||||||
Accrued compensation and employee benefits
|
(10,528 | ) | 7,309 | (17,310 | ) | |||||||
Income taxes
|
449 | (2,567 | ) | 9,215 | ||||||||
Accrued expenses and other current liabilities
|
(6,535 | ) | 7,420 | 6,959 | ||||||||
Other noncurrent assets and liabilities
|
(12,755 | ) | (23,928 | ) | 2,839 | |||||||
Net cash provided by operating activities
|
45,758 | 20,812 | 61,904 | |||||||||
Cash flows from investing activities:
|
||||||||||||
Expenditures for property, plant and equipment
|
(64,352 | ) | (55,061 | ) | (60,297 | ) | ||||||
Change in restricted cash
|
837 | 1,368 | 4,862 | |||||||||
Proceeds from dispositions of assets
|
556 | 3,715 | 8,687 | |||||||||
Proceeds from the sale of assets held for sale and discontinued operations
|
744 | 8,841 | 10,515 | |||||||||
Settlement of derivative contracts
|
(2,716 | ) | (7 | ) | (6,629 | ) | ||||||
Other – net
|
(79 | ) | 1 | 903 | ||||||||
Net cash used for investing activities
|
(65,010 | ) | (41,143 | ) | (41,959 | ) | ||||||
Cash flows from financing activities:
|
||||||||||||
Short-term debt, net
|
7,074 | 5,554 | (2,999 | ) | ||||||||
Borrowings of long-term debt
|
125,148 | 252,855 | 77,122 | |||||||||
Repayments of long-term debt
|
(114,041 | ) | (250,572 | ) | (186,488 | ) | ||||||
Financing fees paid
|
(363 | ) | (215 | ) | (802 | ) | ||||||
Capital contribution by noncontrolling interest in joint venture
|
936 | - | - | |||||||||
Book overdrafts
|
48 | (407 | ) | (1,640 | ) | |||||||
Issuance of common stock
|
- | - | 92,858 | |||||||||
Proceeds from exercise of stock options
|
457 | 1,467 | 250 | |||||||||
Repurchase of common stock, treasury and retirement
|
(505 | ) | (78 | ) | (25 | ) | ||||||
Net cash provided by (used for) financing activities
|
18,754 | 8,604 | (21,724 | ) | ||||||||
Effect of exchange rate changes on cash
|
(987 | ) | 1,000 | 1,900 | ||||||||
Net (decrease) increase in cash and cash equivalents
|
(1,485 | ) | (10,727 | ) | 121 | |||||||
Cash and cash equivalents at beginning of year
|
32,930 | 43,657 | 43,536 | |||||||||
Cash and cash equivalents at end of year
|
$ | 31,445 | $ | 32,930 | $ | 43,657 | ||||||
Cash paid during the year for:
|
||||||||||||
Interest, net of amounts capitalized
|
$ | 12,819 | $ | 28,095 | $ | 17,422 | ||||||
Income taxes
|
$ | 12,957 | $ | 15,554 | $ | 7,082 |
Common
stock
|
Additional
paid-in capital
|
Retained
earnings
|
Accumulated
other
comprehensive (loss) income
|
Treasury
stock
|
Non-
controlling
interest
|
Deferred
compensation
trust
|
Total
|
|||||||||||||||||||||||||
Balance, March 31, 2009
|
$ | 20,494 | $ | 72,800 | $ | 226,169 | $ | (62,889 | ) | $ | (13,897 | ) | $ | - | $ | (353 | ) | $ | 242,324 | |||||||||||||
Revisions of prior period errors (Note 1)
|
- | - | (6,222 | ) | 137 | - | - | - | (6,085 | ) | ||||||||||||||||||||||
Revised beginning balance, April 1, 2009
|
20,494 | 72,800 | 219,947 | (62,752 | ) | (13,897 | ) | - | (353 | ) | 236,239 | |||||||||||||||||||||
Comprehensive income (loss):
|
||||||||||||||||||||||||||||||||
Net loss
|
- | - | (31,826 | ) | - | - | - | - | (31,826 | ) | ||||||||||||||||||||||
Foreign-currency translation
|
- | - | - | 22,917 | - | - | - | 22,917 | ||||||||||||||||||||||||
Cash flow hedges (net of taxes of $0)
|
- | - | - | 8,886 | - | - | - | 8,886 | ||||||||||||||||||||||||
Changes in benefit plans:
|
||||||||||||||||||||||||||||||||
Net actuarial loss (net of taxes of $0)
|
- | - | - | (17,221 | ) | - | - | (17,221 | ) | |||||||||||||||||||||||
Net prior service costs (net of taxes of $0)
|
- | - | - | (2,098 | ) | - | - | (2,098 | ) | |||||||||||||||||||||||
Total comprehensive loss
|
(19,342 | ) | ||||||||||||||||||||||||||||||
Issuance of common stock
|
8,625 | 84,233 | - | - | - | - | 92,858 | |||||||||||||||||||||||||
Purchase of treasury stock
|
- | - | - | - | (25 | ) | - | - | (25 | ) | ||||||||||||||||||||||
Stock options and awards including related tax benefits
|
161 | 1,670 | - | - | - | - | - | 1,831 | ||||||||||||||||||||||||
Forfeiture of stock awards
|
(20 | ) | (339 | ) | 13 | - | - | - | - | (346 | ) | |||||||||||||||||||||
Amortization of deferred compensation under
restricted stock plans
|
- | 1,490 | - | - | - | - | - | 1,490 | ||||||||||||||||||||||||
Investment in deferred compensation trust
|
- | - | - | - | - | - | 9 | 9 | ||||||||||||||||||||||||
Balance, March 31, 2010
|
29,260 | 159,854 | 188,134 | (50,268 | ) | (13,922 | ) | - | (344 | ) | 312,714 | |||||||||||||||||||||
Comprehensive income (loss):
|
||||||||||||||||||||||||||||||||
Net earnings
|
- | - | 5,233 | - | - | - | - | 5,233 | ||||||||||||||||||||||||
Foreign-currency translation
|
- | - | - | 16,470 | - | - | - | 16,470 | ||||||||||||||||||||||||
Cash flow hedges (net of taxes of $987)
|
- | - | - | 2,343 | - | - | - | 2,343 | ||||||||||||||||||||||||
Changes in benefit plans:
|
||||||||||||||||||||||||||||||||
Net actuarial gain (net of taxes of $2,358)
|
- | - | - | 11,117 | - | - | - | 11,117 | ||||||||||||||||||||||||
Net prior service costs (net of taxes of $393)
|
- | - | - | (2,516 | ) | - | - | - | (2,516 | ) | ||||||||||||||||||||||
Total comprehensive income
|
32,647 | |||||||||||||||||||||||||||||||
Issuance of common stock
|
89 | 1,378 | - | - | - | - | - | 1,467 | ||||||||||||||||||||||||
Purchase of treasury stock
|
- | - | - | - | (78 | ) | - | (78 | ) | |||||||||||||||||||||||
Stock options and awards including related tax benefits
|
99 | 1,325 | - | - | - | - | - | 1,424 | ||||||||||||||||||||||||
Forfeiture of stock awards
|
(8 | ) | (85 | ) | - | - | - | - | - | (93 | ) | |||||||||||||||||||||
Amortization of deferred compensation under
restricted stock plans
|
- | 2,657 | - | - | - | - | - | 2,657 | ||||||||||||||||||||||||
Investment in deferred compensation trust
|
- | 1,230 | - | - | - | - | 344 | 1,574 | ||||||||||||||||||||||||
Balance, March 31, 2011
|
29,440 | 166,359 | 193,367 | (22,854 | ) | (14,000 | ) | - | - | 352,312 | ||||||||||||||||||||||
Comprehensive income (loss):
|
||||||||||||||||||||||||||||||||
Net earnings attributable to Modine
|
- | - | 38,461 | - | - | - | - | 38,461 | ||||||||||||||||||||||||
Foreign-currency translation
|
- | - | - | (22,600 | ) | - | - | - | (22,600 | ) | ||||||||||||||||||||||
Cash flow hedges (net of taxes of $100)
|
- | - | - | (3,449 | ) | - | - | - | (3,449 | ) | ||||||||||||||||||||||
Changes in benefit plans:
|
||||||||||||||||||||||||||||||||
Net actuarial loss (net of taxes of $0)
|
- | - | - | (39,437 | ) | - | - | - | (39,437 | ) | ||||||||||||||||||||||
Net prior service costs (net of taxes of $0)
|
- | - | - | (1,966 | ) | - | - | - | (1,966 | ) | ||||||||||||||||||||||
Total comprehensive loss
|
(28,991 | ) | ||||||||||||||||||||||||||||||
Issuance of common stock
|
50 | 407 | - | - | - | - | - | 457 | ||||||||||||||||||||||||
Purchase of treasury stock
|
- | - | - | - | (505 | ) | - | - | (505 | ) | ||||||||||||||||||||||
Stock options and awards including related tax benefits
|
114 | 1,832 | - | - | - | - | - | 1,946 | ||||||||||||||||||||||||
Forfeiture of stock awards
|
(4 | ) | (58 | ) | - | - | - | - | - | (62 | ) | |||||||||||||||||||||
Amortization of deferred compensation under
restricted stock plans
|
- | (250 | ) | - | - | - | - | - | (250 | ) | ||||||||||||||||||||||
Contribution by noncontrolling interest
|
936 | 936 | ||||||||||||||||||||||||||||||
Net earnings attributable to noncontrolling interest
|
- | - | - | - | - | 289 | - | 289 | ||||||||||||||||||||||||
Balance, March 31, 2012
|
$ | 29,600 | $ | 168,290 | $ | 231,828 | $ | (90,306 | ) | $ | (14,505 | ) | $ | 1,225 | $ | - | $ | 326,132 |
|
● |
The Company determined that value added tax (VAT) had been improperly applied for numerous cross border transactions throughout the Original Equipment – Europe segment. At March 31, 2012, an estimated liability for the VAT exposure of $10,683 was identified, of which $10,281 related to periods prior to fiscal 2012.
|
|
● |
The Company determined that certain past import and export duties related to goods at the Nuevo Laredo, Mexico and Laredo, Texas facilities within the Original Equipment – North America segment were incorrect, which resulted in increased past duties owed.
|
|
● |
The Company determined that the expense related to an annual business tax assessed to Modine’s Hungary locations within the Original Equipment – Europe segment was misclassified in the consolidated statements of operations.
|
Period in which
the errors originated
|
||||||||
Year Ended March 31,
|
||||||||
2010
|
2011
|
|||||||
VAT liability (2)
|
$ | (3,344 | ) | $ | (759 | ) | ||
Trade compliance liability (3)
|
(256 | ) | (232 | ) | ||||
Hungary business tax (4)
|
693 | 1,119 | ||||||
Impact on pre-tax earnings (loss)
|
(2,907 | ) | 128 | |||||
Tax effect of VAT liability (2)
|
450 | 44 | ||||||
Hungary business tax (4)
|
(693 | ) | (1,119 | ) | ||||
Impact on net earnings (loss) (5)
|
$ | (3,150 | ) | $ | (947 | ) |
Pensions Plans
|
Postretirement Plans
|
|||||||||||||||
Years ended March 31
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Change in benefit obligation:
|
||||||||||||||||
Benefit obligation at beginning of year
|
$ | 245,967 | $ | 241,244 | $ | 6,585 | $ | 8,827 | ||||||||
Service cost
|
1,400 | 1,919 | 42 | 46 | ||||||||||||
Interest cost
|
13,860 | 13,737 | 347 | 337 | ||||||||||||
Actuarial loss (gain)
|
35,651 | 2,923 | 517 | (2,192 | ) | |||||||||||
Benefits paid
|
(13,743 | ) | (14,789 | ) | (497 | ) | (749 | ) | ||||||||
Settlement/curtailment adjustment
|
- | - | 208 | 275 | ||||||||||||
Medicare subsidy
|
- | - | 44 | 41 | ||||||||||||
Currency translation adjustment
|
(1,314 | ) | 933 | - | - | |||||||||||
Benefit obligation at end of year
|
$ | 281,821 | $ | 245,967 | $ | 7,246 | $ | 6,585 | ||||||||
Change in plan assets:
|
||||||||||||||||
Fair value of plan assets at beginning of year
|
$ | 182,050 | $ | 155,168 | $ | - | $ | - | ||||||||
Actual return on plan assets
|
5,546 | 21,727 | - | - | ||||||||||||
Benefits paid
|
(13,743 | ) | (14,789 | ) | (497 | ) | (749 | ) | ||||||||
Employer contributions
|
12,780 | 19,944 | 453 | 708 | ||||||||||||
Medicare subsidy
|
- | - | 44 | 41 | ||||||||||||
Fair value of plan assets at end of year
|
$ | 186,633 | $ | 182,050 | $ | - | $ | - | ||||||||
Funded status at end of year
|
$ | (95,188 | ) | $ | (63,917 | ) | $ | (7,246 | ) | $ | (6,585 | ) | ||||
Amounts recognized in the consolidated balance sheet
consist of:
|
||||||||||||||||
Current liability
|
$ | (1,097 | ) | $ | (991 | ) | $ | (820 | ) | $ | (618 | ) | ||||
Noncurrent liability
|
(94,091 | ) | (62,926 | ) | (6,426 | ) | (5,967 | ) | ||||||||
$ | (95,188 | ) | $ | (63,917 | ) | $ | (7,246 | ) | $ | (6,585 | ) | |||||
Amounts recognized in accumulated other comprehensive loss (income) consist of:
|
||||||||||||||||
Net actuarial loss
|
$ | 154,428 | $ | 115,731 | $ | (448 | ) | $ | (1,197 | ) | ||||||
Prior service credit
|
- | - | (2,944 | ) | (4,910 | ) | ||||||||||
$ | 154,428 | $ | 115,731 | $ | (3,392 | ) | $ | (6,107 | ) |
Years ended March 31
|
2012
|
2011
|
||||||
Projected benefit obligation
|
$ | 281,821 | $ | 245,967 | ||||
Accumulated benefit obligation
|
280,254 | 244,504 | ||||||
Fair value of the plan assets
|
186,633 | 182,050 |
Pension Plans
|
Postretirement Plans
|
|||||||||||||||||||||||
Years ended March 31
|
2012
|
2011
|
2010
|
2012
|
2011
|
2010
|
||||||||||||||||||
Components of net periodic benefit costs:
|
||||||||||||||||||||||||
Service cost
|
$ | 1,400 | $ | 1,919 | $ | 2,014 | $ | 42 | $ | 46 | $ | 75 | ||||||||||||
Interest cost
|
13,860 | 13,737 | 14,530 | 347 | 337 | 527 | ||||||||||||||||||
Expected return on plan assets
|
(15,599 | ) | (15,223 | ) | (15,118 | ) | - | - | - | |||||||||||||||
Amortization of:
|
||||||||||||||||||||||||
Unrecognized net loss (gain)
|
6,967 | 7,670 | 2,543 | (24 | ) | (113 | ) | (33 | ) | |||||||||||||||
Unrecognized prior service cost (credit)
|
- | 356 | 373 | (1,662 | ) | (1,780 | ) | (2,374 | ) | |||||||||||||||
Adjustment for settlement/curtailment
|
- | 1,646 | 633 | (304 | ) | (2,075 | ) | (1,217 | ) | |||||||||||||||
Net periodic benefit cost (income)
|
$ | 6,628 | $ | 10,105 | $ | 4,975 | $ | (1,601 | ) | $ | (3,585 | ) | $ | (3,022 | ) | |||||||||
Other changes in plan assets and benefit obligation recognized in other comprehensive income:
|
||||||||||||||||||||||||
Net actuarial (gain) loss
|
$ | 45,664 | $ | (3,764 | ) | $ | 19,644 | $ | 725 | $ | (2,192 | ) | $ | (822 | ) | |||||||||
Prior service (credits) costs
|
- | (1,616 | ) | 97 | 304 | 2,314 | 1,253 | |||||||||||||||||
Reversal of amortization items:
|
||||||||||||||||||||||||
Net actuarial loss (gain)
|
(6,967 | ) | (7,670 | ) | (3,111 | ) | 24 | 113 | 33 | |||||||||||||||
Prior service costs (credit)
|
- | (356 | ) | (373 | ) | 1,662 | 1,780 | 2,374 | ||||||||||||||||
Total recognized in other comprehensive (income) loss
|
$ | 38,697 | $ | (13,406 | ) | $ | 16,257 | $ | 2,715 | $ | 2,015 | $ | 2,838 | |||||||||||
Total recognized in net periodic benefit costs and other comprehensive income
|
$ | 45,325 | $ | (3,301 | ) | $ | 21,232 | $ | 1,114 | $ | (1,570 | ) | $ | (184 | ) |
Years ended March 31
|
2012
|
2011
|
||||||||||||||
U.S. Plans
|
Foreign Plans
|
U.S. Plans
|
Foreign Plans
|
|||||||||||||
Pension plans:
|
||||||||||||||||
Discount rate
|
4.86 | % | 5.00 | % | 5.83 | % | 5.75 | % | ||||||||
Postretirement plans:
|
||||||||||||||||
Discount rate
|
4.35 | % | N/A | 5.35 | % | N/A |
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||||||||||||||
U.S. Plans
|
Foreign Plans
|
U.S. Plans
|
Foreign Plans
|
U.S. Plans
|
Foreign Plans
|
|||||||||||||||||||
Pension plans:
|
||||||||||||||||||||||||
Discount rate
|
5.83 | % | 5.75 | % | 5.93 | % | 5.00 | % | 7.73 | % | 6.10 | % | ||||||||||||
Expected return on plan assets
|
8.00 | % | N/A | 8.10 | % | N/A | 7.90 | % | N/A | |||||||||||||||
Postretirement plans:
|
||||||||||||||||||||||||
Discount rate
|
5.35 | % | N/A | 5.38 | % | N/A | 7.35 | % | N/A |
Target allocation
|
Plan assets
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Equity securities
|
55 | % | 55 | % | 56 | % | 56 | % | ||||||||
Debt securities
|
38 | % | 38 | % | 37 | % | 38 | % | ||||||||
Alternative assets
|
5 | % | 5 | % | 5 | % | 5 | % | ||||||||
Cash
|
2 | % | 2 | % | 2 | % | 1 | % | ||||||||
100 | % | 100 | % | 100 | % | 100 | % |
Years ended March 31
|
2012
|
2011
|
||||||
Healthcare costs trend rate assumed for next year (pre-65)
|
7.5 | % | 8.0 | % | ||||
Healthcare costs trend rate assumed for next year (post-65)
|
7.5 | % | 8.0 | % | ||||
Ultimate trend rate
|
5.0 | % | 5.0 | % | ||||
Year the rate reaches the ultimate trend rate
|
2017 | 2017 |
One percentage point
|
||||||||
Year ended March 31, 20112
|
Increase
|
Decrease
|
||||||
Effect on total of service and interest cost
|
$ | 8 | $ | (8 | ) | |||
Effect on postretirement benefit obligation
|
171 | (158 | ) |
Years ended March 31
|
||||
Pension
|
||||
2013
|
$ | 13,724 | ||
2014
|
14,179 | |||
2015
|
14,778 | |||
2016
|
15,528 | |||
2017
|
16,185 | |||
2018-2022
|
90,381 |
Years ending March 31
|
||||
2013
|
$ | 5,541 | ||
2014
|
4,038 | |||
2015
|
2,539 | |||
2016
|
2,089 | |||
2017
|
1,908 | |||
2018 and beyond
|
5,121 | |||
Total future minimum rental commitments
|
$ | 21,236 |
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||
Equity in loss (earnings) of non-consolidated affiliates
|
$ | 130 | $ | (469 | ) | $ | 101 | |||||
Interest income
|
(748 | ) | (709 | ) | (665 | ) | ||||||
Foreign currency transactions
|
7,792 | (2,304 | ) | (3,399 | ) | |||||||
Other non-operating income - net
|
(44 | ) | (143 | ) | (1,623 | ) | ||||||
Total other expense (income) - net
|
$ | 7,130 | $ | (3,625 | ) | $ | (5,586 | ) |
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||
Components of earnings (loss) from continuing operations before income taxes:
|
||||||||||||
United States
|
$ | 17,188 | $ | (27,462 | ) | $ | (42,676 | ) | ||||
Foreign
|
30,723 | 40,285 | 29,504 | |||||||||
Total earnings (loss) from continuing operations before income taxes
|
$ | 47,911 | $ | 12,823 | $ | (13,172 | ) | |||||
Income tax expense (benefit):
|
||||||||||||
Federal:
|
||||||||||||
Current
|
$ | - | $ | (3,701 | ) | $ | (273 | ) | ||||
Deferred
|
312 | 2,727 | 2,240 | |||||||||
State:
|
||||||||||||
Current
|
299 | 284 | (283 | ) | ||||||||
Deferred
|
(255 | ) | (2,626 | ) | (2,182 | ) | ||||||
Foreign:
|
||||||||||||
Current
|
8,330 | 12,193 | 7,344 | |||||||||
Deferred
|
1,245 | (4,334 | ) | 2,827 | ||||||||
Total income tax expense
|
$ | 9,931 | $ | 4,543 | $ | 9,673 |
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||
Statutory federal tax
|
35.0 | % | 35.0 | % | (35.0 | %) | ||||||
State taxes, net of federal benefit
|
(0.1 | ) | (19.0 | ) | (16.5 | ) | ||||||
Taxes on non-U.S. earnings and losses
|
(3.1 | ) | 3.2 | 4.6 | ||||||||
Valuation allowance
|
2.1 | 84.6 | 79.7 | |||||||||
Tax credits
|
(19.2 | ) | (84.3 | ) | (3.9 | ) | ||||||
Deferred tax adjustments
|
- | - | 12.2 | |||||||||
Foreign tax rate changes
|
0.6 | (4.5 | ) | - | ||||||||
Reserve for uncertain tax positions
|
1.9 | 4.2 | (4.4 | ) | ||||||||
Brazilian interest on equity
|
(1.0 | ) | (7.4 | ) | - | |||||||
Dividend repatriation
|
4.4 | 23.0 | 26.1 | |||||||||
Other
|
0.1 | 0.6 | 10.6 | |||||||||
Effective tax rate
|
20.7 | % | 35.4 | % | 73.4 | % |
March 31
|
2012
|
2011
|
||||||
Deferred tax assets:
|
||||||||
Accounts receivable
|
$ | 494 | $ | 414 | ||||
Inventories
|
4,865 | 5,370 | ||||||
Plant and equipment
|
18,988 | 19,472 | ||||||
Employee benefits
|
77,462 | 65,446 | ||||||
Net operating loss, capital loss and credit carryforwards
|
96,894 | 86,809 | ||||||
Other, principally accrued liabilities
|
15,286 | 20,441 | ||||||
Total gross deferred tax assets
|
213,989 | 197,952 | ||||||
Less: valuation allowance
|
146,763 | 129,604 | ||||||
Net deferred tax assets
|
67,226 | 68,348 | ||||||
Deferred tax liabilities:
|
||||||||
Pension
|
31,245 | 29,003 | ||||||
Goodwill
|
5,359 | 5,873 | ||||||
Plant and equipment
|
24,151 | 26,391 | ||||||
Other
|
7,486 | 6,710 | ||||||
Total gross deferred tax liabilities
|
68,241 | 67,977 | ||||||
Net deferred tax (liability) asset
|
$ | (1,015 | ) | $ | 371 |
2012
|
2011
|
|||||||
Balance, April 1
|
$ | 5,305 | $ | 4,475 | ||||
Gross increases - tax positions in prior period
|
3,611 | 380 | ||||||
Gross decreases - tax positions in prior period
|
(3,756 | ) | - | |||||
Gross increases - tax positions in current period
|
510 | 278 | ||||||
Gross decreases - tax positions in current period
|
(388 | ) | - | |||||
Settlements
|
(1,731 | ) | - | |||||
Lapse of statute of limitations
|
- | (30 | ) | |||||
Foreign currency impact
|
(292 | ) | 202 | |||||
Balance, March 31
|
$ | 3,259 | $ | 5,305 |
Austria
|
Fiscal 2007 - 2011
|
|
Brazil
|
Fiscal 2006 - 2011
|
|
Germany
|
Fiscal 2006 - 2011
|
|
United States
|
Fiscal 2009 - 2011
|
Years Ended March 31
|
2012
|
2011
|
2010
|
|||||||||
Basic:
|
||||||||||||
Earnings (loss) from continuing operations
|
$ | 37,980 | $ | 8,280 | $ | (22,845 | ) | |||||
Less: Net earnings attributable to noncontrolling interest
|
(343 | ) | - | - | ||||||||
Earnings (loss) from continuing operations attributable to
Modine
|
37,637 | 8,280 | (22,845 | ) | ||||||||
Less: Undistributed earnings attributable to unvested shares
|
(153 | ) | (36 | ) | - | |||||||
Net earnings (loss) from continuing operations available to
Modine common shareholders
|
37,484 | 8,244 | (22,845 | ) | ||||||||
Net earnings (loss) from discontinued operations
|
824 | (3,047 | ) | (8,981 | ) | |||||||
Less: Undistributed earnings attributable to unvested shares
|
(3 | ) | - | - | ||||||||
Net earnings (loss) from discontinued operations available to
Modine common shareholders
|
821 | (3,047 | ) | (8,981 | ) | |||||||
Net earnings (loss) available to Modine common shareholders
|
$ | 38,305 | $ | 5,197 | $ | (31,826 | ) | |||||
Basic Earnings Per Share:
|
||||||||||||
Weighted average shares outstanding - basic
|
46,477 | 46,167 | 39,298 | |||||||||
Earnings (loss) from continuing operations per common share
|
$ | 0.81 | $ | 0.18 | $ | (0.58 | ) | |||||
Net earnings (loss) from discontinued operations per common
share
|
0.02 | (0.07 | ) | (0.23 | ) | |||||||
Net earnings (loss) per common share - basic
|
$ | 0.83 | $ | 0.11 | $ | (0.81 | ) | |||||
Diluted:
|
||||||||||||
Earnings (loss) from continuing operations
|
$ | 37,980 | $ | 8,280 | $ | (22,845 | ) | |||||
Less: Net earnings attributable to noncontrolling interest
|
(343 | ) | - | - | ||||||||
Earnings (loss) from continuing operations attributable to
Modine
|
37,637 | 8,280 | (22,845 | ) | ||||||||
Less: Undistributed earnings attributable to unvested shares
|
(106 | ) | (19 | ) | - | |||||||
Net earnings (loss) from continuing operations available to
Modine common shareholders
|
37,531 | 8,261 | (22,845 | ) | ||||||||
Net earnings (loss) from discontinued operations
|
824 | (3,047 | ) | (8,981 | ) | |||||||
Less: Undistributed earnings attributable to unvested shares
|
(2 | ) | - | - | ||||||||
Net earnings (loss) from discontinued operations available to
Modine common shareholders
|
822 | (3,047 | ) | (8,981 | ) | |||||||
Net earnings (loss) available to Modine common shareholders
|
$ | 38,353 | $ | 5,214 | $ | (31,826 | ) | |||||
Diluted Earnings Per Share:
|
||||||||||||
Weighted average shares outstanding - basic
|
46,477 | 46,167 | 39,298 | |||||||||
Effect of dilutive securities
|
404 | 562 | - | |||||||||
Weighted average shares outstanding - diluted
|
46,881 | 46,729 | 39,298 | |||||||||
Earnings (loss) from continuing operations per common share
|
$ | 0.80 | $ | 0.18 | $ | (0.58 | ) | |||||
Net earnings (loss) from discontinued operations per common
share
|
0.02 | (0.07 | ) | (0.23 | ) | |||||||
Net earnings (loss) per common share - diluted
|
$ | 0.82 | $ | 0.11 | $ | (0.81 | ) |
March 31
|
2012
|
2011
|
||||||
Raw materials and work in process
|
$ | 88,632 | $ | 93,306 | ||||
Finished goods
|
32,187 | 29,323 | ||||||
Total inventories
|
$ | 120,819 | $ | 122,629 |
March 31
|
2012
|
2011
|
||||||
Land
|
$ | 11,818 | $ | 12,654 | ||||
Buildings and improvements (10-40 years)
|
249,659 | 261,047 | ||||||
Machinery and equipment (3-12 years)
|
682,624 | 656,851 | ||||||
Office equipment (3-10 years)
|
95,954 | 110,501 | ||||||
Transportation equipment (3-9 years)
|
3,501 | 3,615 | ||||||
Construction in progress
|
49,147 | 58,016 | ||||||
1,092,703 | 1,102,684 | |||||||
Less accumulated depreciation
|
(680,644 | ) | (672,389 | ) | ||||
Net property, plant and equipment
|
$ | 412,059 | $ | 430,295 |
March 31
|
2012
|
2011
|
||||||||||
Percent-owned
|
||||||||||||
Nikkei Heat Exchanger Company, Ltd. (Japan)
|
50 | % | $ | 3,728 | $ | 3,863 |
2012
|
2011
|
|||||||
Termination Benefits:
|
||||||||
Balance, April 1
|
$ | 1,301 | $ | 4,740 | ||||
Additions
|
7 | 103 | ||||||
Adjustments
|
(97 | ) | (378 | ) | ||||
Effect of exchange rate changes
|
(1 | ) | 13 | |||||
Payments
|
(615 | ) | (3,177 | ) | ||||
Balance, March 31
|
$ | 595 | $ | 1,301 |
2012
|
2011
|
2010
|
||||||||||
Restructuring (income) charges:
|
||||||||||||
Employee severance and related benefits
|
$ | (90 | ) | $ | (275 | ) | $ | (679 | ) | |||
Other repositioning costs:
|
||||||||||||
Pension curtailment charges
|
- | 1,616 | - | |||||||||
Postretirement curtailment gain
|
(304 | ) | (2,075 | ) | (1,217 | ) | ||||||
Miscellaneous other closure costs
|
1,285 | 3,927 | 7,939 | |||||||||
Total other repositioning costs
|
981 | 3,468 | 6,722 | |||||||||
Total restructuring and other repositioning costs
|
$ | 891 | $ | 3,193 | $ | 6,043 |
March 31, 2010
|
Fluctuations in
foreign currency
|
March 31, 2011
|
Fluctuations in
foreign currency
|
March 31, 2012
|
||||||||||||||||
OE - Asia
|
||||||||||||||||||||
Gross goodwill
|
$ | 520 | $ | - | $ | 520 | $ | - | $ | 520 | ||||||||||
Accumulated impairments
|
- | - | - | - | - | |||||||||||||||
Net goodwill balance
|
520 | - | 520 | - | 520 | |||||||||||||||
OE - Europe
|
||||||||||||||||||||
Gross goodwill
|
9,157 | 451 | 9,608 | (564 | ) | 9,044 | ||||||||||||||
Accumulated impairments
|
(9,157 | ) | (451 | ) | (9,608 | ) | 564 | (9,044 | ) | |||||||||||
Net goodwill balance
|
- | - | - | - | - | |||||||||||||||
OE - North America
|
||||||||||||||||||||
Gross goodwill
|
23,769 | - | 23,769 | - | 23,769 | |||||||||||||||
Accumulated impairments
|
(23,769 | ) | - | (23,769 | ) | - | (23,769 | ) | ||||||||||||
Net goodwill balance
|
- | - | - | - | - | |||||||||||||||
South America
|
||||||||||||||||||||
Gross goodwill
|
13,869 | 1,240 | 15,109 | (1,611 | ) | 13,498 | ||||||||||||||
Accumulated impairments
|
- | - | - | - | - | |||||||||||||||
Net goodwill balance
|
13,869 | 1,240 | 15,109 | (1,611 | ) | 13,498 | ||||||||||||||
Commercial Products
|
||||||||||||||||||||
Gross goodwill
|
15,163 | 780 | 15,943 | (28 | ) | 15,915 | ||||||||||||||
Accumulated impairments
|
- | - | - | - | - | |||||||||||||||
Net goodwill balance
|
15,163 | 780 | 15,943 | (28 | ) | 15,915 | ||||||||||||||
Total
|
||||||||||||||||||||
Gross goodwill
|
62,478 | 2,471 | 64,949 | (2,203 | ) | 62,746 | ||||||||||||||
Accumulated impairments
|
(32,926 | ) | (451 | ) | (33,377 | ) | 564 | (32,813 | ) | |||||||||||
Net goodwill balance
|
$ | 29,552 | $ | 2,020 | $ | 31,572 | $ | (1,639 | ) | $ | 29,933 |
March 31, 2012
|
March 31, 2011
|
|||||||||||||||||||||||
Gross
|
Net
|
Gross
|
Net
|
|||||||||||||||||||||
Carrying
|
Accumulated
|
Intangible
|
Carrying
|
Accumulated
|
Intangible
|
|||||||||||||||||||
Value
|
Amortization
|
Assets
|
Value
|
Amortization
|
Assets
|
|||||||||||||||||||
Amortized intangible assets:
|
||||||||||||||||||||||||
Trademarks
|
$ | 9,064 | $ | (4,180 | ) | $ | 4,884 | $ | 9,077 | $ | (3,580 | ) | $ | 5,497 | ||||||||||
Other intangibles
|
402 | (402 | ) | - | 444 | (444 | ) | - | ||||||||||||||||
Total amortized intangible assets
|
9,466 | (4,582 | ) | 4,884 | 9,521 | (4,024 | ) | 5,497 | ||||||||||||||||
Unamortized intangible assets:
|
||||||||||||||||||||||||
Tradename
|
921 | - | 921 | 1,036 | - | 1,036 | ||||||||||||||||||
Total intangible assets
|
$ | 10,387 | $ | (4,582 | ) | $ | 5,805 | $ | 10,557 | $ | (4,024 | ) | $ | 6,533 |
Fiscal Year
|
Amortization Expense
|
|||
2013
|
$ | 604 | ||
2014
|
604 | |||
2015
|
604 | |||
2016
|
604 | |||
2017
|
604 | |||
2018 and beyond
|
1,864 |
Type of issue
|
Interest rate
percentage at
March 31, 2012
|
Fiscal year
of maturity
|
March 31, 2012
|
March 31, 2011
|
||||||||||||
Various foreign denominated borrowings
|
Various
|
2013-2015 | $ | 2,319 | $ | - | ||||||||||
Denominated in U.S. dollars:
|
||||||||||||||||
Fixed rate -
|
||||||||||||||||
2020 Notes
|
6.83 | 2021 | 125,000 | 125,000 | ||||||||||||
Variable rate -
|
||||||||||||||||
Revolving credit facility
|
2.24 | 2015 | 9,000 | 6,500 | ||||||||||||
136,319 | 131,500 | |||||||||||||||
Capital lease obligations
|
2013-2029 | 6,666 | 7,344 | |||||||||||||
142,985 | 138,844 | |||||||||||||||
Less current portion
|
1,093 | 262 | ||||||||||||||
Total long-term debt
|
$ | 141,892 | $ | 138,582 |
Interest Expense Coverage
Ratio Covenant (Not
|
Leverage Ratio
Covenant (Not Permitted
|
||
Fiscal quarter ending on or before August 12, 2014
|
3.00 to 1.0
|
3.25 to 1.0
|
|
All fiscal quarters ending thereafter
|
3.00 to 1.0
|
3.00 to 1.0
|
Years ending March 31
|
||||
2013
|
$ | 1,093 | ||
2014
|
297 | |||
2015
|
10,781 | |||
2016
|
297 | |||
2017
|
8,297 | |||
2018 & beyond
|
122,220 |
Years ending March 31
|
2012
|
2011
|
2010
|
|||||||||
Gross interest cost
|
$ | 12,565 | $ | 34,065 | $ | 24,162 | ||||||
Capitalized interest on major construction projects
|
(82 | ) | (342 | ) | (1,274 | ) | ||||||
Interest expense
|
$ | 12,483 | $ | 33,723 | $ | 22,888 |
·
|
$12,000 between two loans to its wholly owned subsidiary, Modine Thermal Systems (Changzhou) Co. Ltd. (Changzhou, China), with various maturity dates through July 2012; and
|
·
|
$1,300 between two loans to its wholly owned subsidiary, Modine Thermal Systems Korea, with various maturity dates through April 2012.
|
Balance Sheet Location
|
March 31, 2012
|
March 31, 2011
|
|||||||
Derivative instruments designated
as cash flow hedges:
|
|||||||||
Commodity derivatives
|
Deferred income taxes and other current assets
|
$ | 156 | $ | 929 | ||||
Commodity derivatives
|
Accrued expenses and other current liabilities
|
924 | 650 | ||||||
Derivatives not designated as hedges:
|
|||||||||
Foreign exchange contracts
|
Deferred income taxes and other current assets
|
$ | 205 | $ | - | ||||
Commodity derivatives - de-designated
|
Accrued expenses and other current liabilities
|
2,606 | - |
Amount of Loss
Recognized in AOCI
|
Location of Loss Reclassifie
d
from
AOCI into Continuing
Operations
|
Amount of Loss
Reclassified from AOCI
into Continuing Operations
|
Amount of Loss
Recognized in Income
|
||||||||||
Designated derivative instruments:
|
|||||||||||||
Commodity derivatives
|
$ | 88 |
Cost of sales
|
$ | 1,914 | $ | 346 | ||||||
Total
|
$ | 88 | $ | 1,914 | $ | 346 |
Amount of Loss
Recognized in AOCI
|
Location of (Gain) Loss
Recognized in Income
|
Amount of Loss
Reclassified from AOCI
into Continuing Operations
|
Amount of (Gain) Loss
Recognized in Income
|
||||||||||
Derivatives not designated:
|
|||||||||||||
Commodity derivatives - de-designated
|
$ | 3,026 |
Cost of sales
|
$ | 1,183 | $ | (420 | ) | |||||
Foreign exchange contracts
|
- |
Other expense (income) - net
|
- | 352 | |||||||||
Total
|
$ | 3,026 | $ | 1,183 | $ | (68 | ) |
Amount of Gain
Recognized in AOCI
|
Location of Loss
Reclassified from
AOCI into Continuing
Operations
|
Amount of Loss
Reclassified from AOCI
into Continuing
Operations
|
|||||||
Designated derivative instruments:
|
|||||||||
Commodity derivatives
|
$ | 335 |
Cost of sales
|
$ | (7 | ) | |||
Interest rate derivative
|
- |
Interest expense
|
(1,751 | ) | |||||
Total
|
$ | 335 | $ | (1,758 | ) |
·
|
Level 1 – Quoted prices for identical instruments in active markets.
|
·
|
Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.
|
·
|
Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.
|
Level 1
|
Level 2
|
Level 3
|
Total Assets /
Liabilities at
Fair Value
|
|||||||||||||
Assets:
|
||||||||||||||||
Trading securities
|
$ | 1,784 | $ | 12 | $ | - | $ | 1,796 | ||||||||
Derivative financial instruments
|
- | 361 | - | 361 | ||||||||||||
Total assets
|
$ | 1,784 | $ | 373 | $ | - | $ | 2,157 | ||||||||
Liabilities:
|
||||||||||||||||
Derivative financial instruments
|
$ | - | $ | 3,530 | $ | - | $ | 3,530 | ||||||||
Deferred compensation obligation
|
1,823 | 12 | - | 1,835 | ||||||||||||
Total liabilities
|
$ | 1,823 | $ | 3,542 | $ | - | $ | 5,365 |
Level 1
|
Level 2
|
Level 3
|
Total Assets /
Liabilities at
Fair Value
|
|||||||||||||
Assets:
|
||||||||||||||||
Trading securities
|
$ | 2,707 | $ | 13 | $ | - | $ | 2,720 | ||||||||
Derivative financial instruments
|
- | 929 | - | 929 | ||||||||||||
Total assets
|
$ | 2,707 | $ | 942 | $ | - | $ | 3,649 | ||||||||
Liabilities:
|
||||||||||||||||
Derivative financial instruments
|
$ | - | $ | 650 | $ | - | $ | 650 | ||||||||
Deferred compensation obligation
|
2,723 | - | - | 2,723 | ||||||||||||
Total liabilities
|
$ | 2,723 | $ | 650 | $ | - | $ | 3,373 |
Level 1
|
Level 2
|
Level 3
|
Total Assets
|
|||||||||||||
Money market investments
|
$ | - | $ | 11,707 | $ | - | $ | 11,707 | ||||||||
Common stocks
|
26,765 | 61 | - | 26,826 | ||||||||||||
Corporate bonds
|
- | 18,197 | - | 18,197 | ||||||||||||
Exchanged traded funds
|
606 | - | - | 606 | ||||||||||||
Foreign bonds
|
- | 3,405 | - | 3,405 | ||||||||||||
Pooled equity funds
|
67,500 | 12,091 | - | 79,591 | ||||||||||||
Pooled fixed income funds
|
16,170 | - | - | 16,170 | ||||||||||||
U.S. government and agency securities
|
- | 29,321 | - | 29,321 | ||||||||||||
Other
|
186 | 190 | - | 376 | ||||||||||||
Total U.S. pension plan assets
|
$ | 111,227 | $ | 74,972 | $ | - | $ | 186,199 |
Level 1
|
Level 2
|
Level 3
|
Total Assets
|
|||||||||||||
Money market investments
|
$ | - | $ | 11,583 | $ | - | $ | 11,583 | ||||||||
Common stocks
|
28,005 | 76 | - | 28,081 | ||||||||||||
Corporate bonds
|
- | 18,079 | - | 18,079 | ||||||||||||
Exchanged traded funds
|
1,693 | - | - | 1,693 | ||||||||||||
Foreign bonds
|
- | 3,234 | - | 3,234 | ||||||||||||
Pooled equity funds
|
67,245 | 11,414 | - | 78,659 | ||||||||||||
Pooled fixed income funds
|
14,251 | - | - | 14,251 | ||||||||||||
U.S. government and agency securities
|
- | 25,648 | - | 25,648 | ||||||||||||
Other
|
235 | 96 | - | 331 | ||||||||||||
Total U.S. pension plan assets
|
$ | 111,429 | $ | 70,130 | $ | - | $ | 181,559 |
Years ended March 31
|
2012
|
2011
|
||||||
Balance, April 1
|
$ | 14,681 | $ | 13,126 | ||||
Accruals for warranties issued in current period
|
6,566 | 6,611 | ||||||
(Reversals) accruals related to pre-existing warranties
|
(1,095 | ) | 1,516 | |||||
Settlements made
|
(8,334 | ) | (6,906 | ) | ||||
Effect of exchange rate changes
|
(433 | ) | 334 | |||||
Balance, March 31
|
$ | 11,385 | $ | 14,681 |
Common stock
|
Treasury stock at cost
|
|||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||
Balance, March 31, 2009
|
32,790 | $ | 20,494 | (549 | ) | $ | (13,897 | ) | ||||||||
Purchase of treasury stock
|
- | - | (5 | ) | (25 | ) | ||||||||||
Public offering
|
13,800 | 8,625 | - | - | ||||||||||||
Stock options and awards
|
225 | 141 | - | - | ||||||||||||
Balance, March 31, 2010
|
46,815 | 29,260 | (554 | ) | (13,922 | ) | ||||||||||
Purchase of treasury stock
|
- | - | (5 | ) | (78 | ) | ||||||||||
Stock options and awards
|
290 | 180 | - | - | ||||||||||||
Balance, March 31, 2011
|
47,105 | 29,440 | (559 | ) | (14,000 | ) | ||||||||||
Purchase of treasury stock
|
- | - | (35 | ) | (505 | ) | ||||||||||
Stock options and awards
|
256 | 160 | - | - | ||||||||||||
Balance, March 31, 2012
|
47,361 | $ | 29,600 | (594 | ) | $ | (14,505 | ) |
March 31
|
2012
|
2011
|
||||||
Unrealized foreign currency translation adjustments
|
$ | 34,910 | $ | 57,510 | ||||
Net loss on derivative instruments designated as cash flow
hedge, net of tax
|
(3,730 | ) | (281 | ) | ||||
Defined benefit plans, net of tax
|
(121,486 | ) | (80,083 | ) | ||||
Accumulated other comprehensive loss
|
$ | (90,306 | ) | $ | (22,854 | ) |
2012
|
2011
|
2010
|
||||||||||
Weighted average fair value of options
|
$ | 10.45 | $ | 6.43 | $ | 3.34 | ||||||
Risk-free interest rate
|
1.93 | % | 2.36 | % | 3.19 | % | ||||||
Expected volatility of the Company's stock
|
79.56 | % | 77.99 | % | 72.95 | % | ||||||
Expected dividend yield on the Company's stock
|
0.00 | % | 0.00 | % | 0.00 | % | ||||||
Expected life of options - years
|
6.3 | 6.3 | 6.1 |
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||
average
|
average
|
average
|
||||||||||||||||||||||
exercise
|
exercise
|
exercise
|
||||||||||||||||||||||
Shares
|
price
|
Shares
|
price
|
Shares
|
price
|
|||||||||||||||||||
Outstanding, April 1
|
2,298 | $ | 17.84 | 2,657 | $ | 20.05 | 2,472 | $ | 24.51 | |||||||||||||||
Granted
|
140 | 14.90 | 304 | 8.58 | 666 | 5.01 | ||||||||||||||||||
Exercised
|
(82 | ) | 5.60 | (144 | ) | 10.22 | (48 | ) | 5.18 | |||||||||||||||
Forfeited or expired
|
(540 | ) | 23.87 | (519 | ) | 25.92 | (433 | ) | 24.04 | |||||||||||||||
Outstanding, March 31
|
1,816 | $ | 16.37 | 2,298 | $ | 17.84 | 2,657 | $ | 20.05 | |||||||||||||||
Exercisable, March 31
|
1,503 | $ | 17.82 | 1,887 | $ | 20.32 | 2,237 | $ | 22.84 |
Options Outstanding
|
Options Exercisable
|
||||||||||||||||||||||||||||
Range of exercise prices
|
Shares
|
Weighted
average
|
Weighted
average
|
Aggregate
intrinsic
|
Shares
|
Weighted
average
|
Aggregate
intrinsic
|
||||||||||||||||||||||
$5.01 - $14.43 | 949 | 6.9 | $ | 8.25 | $ | 1,731 | 736 | $ | 8.68 | $ | 1,251 | ||||||||||||||||||
$14.44 - $21.17 | 327 | 4.2 | 18.01 | - | 227 | 19.36 | - | ||||||||||||||||||||||
$21.18 - $27.89 | 143 | 4.1 | 27.22 | - | 143 | 27.22 | - | ||||||||||||||||||||||
$27.90 - $32.61 | 397 | 2.4 | 30.48 | - | 397 | 30.48 | - | ||||||||||||||||||||||
$5.01 - $32.61 | 1,816 | 5.2 | $ | 16.37 | $ | 1,731 | 1,503 | $ | 17.82 | $ | 1,251 |
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||
Intrinsic value of stock options exercised
|
$ | 243 | $ | 703 | $ | 297 | ||||||
Proceeds from stock options exercised
|
$ | 457 | $ | 1,467 | $ | 250 |
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||||||||||||||
Weighted
|
Shares
|
Weighted
|
Shares
|
Weighted
|
Shares
|
|||||||||||||||||||
average
|
subject to
|
average
|
subject to
|
average
|
subject to
|
|||||||||||||||||||
price
|
restrictions
|
price
|
restrictions
|
price
|
restrictions
|
|||||||||||||||||||
Non-vested balance, April 1
|
$ | 7.56 | 202 | $ | 8.03 | 163 | $ | 20.98 | 91 | |||||||||||||||
Granted
|
13.97 | 182 | 8.97 | 159 | 5.45 | 208 | ||||||||||||||||||
Vested
|
14.65 | (132 | ) | 10.14 | (118 | ) | 13.09 | (105 | ) | |||||||||||||||
Forfeited
|
8.28 | (13 | ) | 5.01 | (2 | ) | 11.12 | (31 | ) | |||||||||||||||
Non-vested balance, March 31
|
$ | 8.49 | 239 | $ | 7.56 | 202 | $ | 8.03 | 163 |
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||
Sales :
|
||||||||||||
Original Equipment – Asia
|
$ | 84,127 | $ | 63,890 | $ | 32,231 | ||||||
Original Equipment – Europe
|
602,848 | 546,709 | 469,399 | |||||||||
Original Equipment – North America
|
601,966 | 573,233 | 453,608 | |||||||||
South America
|
175,582 | 158,850 | 117,640 | |||||||||
Commercial Products
|
142,158 | 126,282 | 123,447 | |||||||||
Segment sales
|
1,606,681 | 1,468,964 | 1,196,325 | |||||||||
Corporate and administrative
|
1,078 | 1,482 | 2,791 | |||||||||
Eliminations
|
(30,607 | ) | (22,211 | ) | (36,540 | ) | ||||||
Sales from continuing operations
|
$ | 1,577,152 | $ | 1,448,235 | $ | 1,162,576 |
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||||||||||||||
Gross profit:
|
% of
sales
|
% of
sales
|
% of
sales
|
|||||||||||||||||||||
Original Equipment - Asia
|
$ | 7,944 | 9.4 | % | $ | 5,224 | 8.2 | % | $ | 32 | 0.1 | % | ||||||||||||
Original Equipment - Europe
|
85,058 | 14.1 | % | 75,658 | 13.8 | % | 59,675 | 12.7 | % | |||||||||||||||
Original Equipment - North America
|
89,694 | 14.9 | % | 79,305 | 13.8 | % | 56,511 | 12.5 | % | |||||||||||||||
South America
|
30,884 | 17.6 | % | 31,220 | 19.7 | % | 23,008 | 19.6 | % | |||||||||||||||
Commercial Products
|
42,486 | 29.9 | % | 39,293 | 31.1 | % | 36,263 | 29.4 | % | |||||||||||||||
Segment gross profit
|
256,066 | 15.9 | % | 230,700 | 15.7 | % | 175,489 | 14.7 | % | |||||||||||||||
Corporate and administrative
|
1,108 | - | 1,507 | - | (3,437 | ) | - | |||||||||||||||||
Eliminations
|
(604 | ) | - | 49 | - | 116 | - | |||||||||||||||||
Gross profit
|
$ | 256,570 | 16.3 | % | $ | 232,256 | 16.0 | % | $ | 172,168 | 14.8 | % |
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||
Operating earnings (loss):
|
||||||||||||
Original Equipment – Asia
|
$ | (2,457 | ) | $ | (3,082 | ) | $ | (4,792 | ) | |||
Original Equipment – Europe
|
37,320 | 28,262 | 20,692 | |||||||||
Original Equipment – North America
|
47,892 | 31,821 | 10,677 | |||||||||
South America
|
10,353 | 12,975 | 7,600 | |||||||||
Commercial Products
|
14,282 | 12,764 | 12,265 | |||||||||
Segment earnings
|
107,390 | 82,740 | 46,442 | |||||||||
Corporate and administrative
|
(39,146 | ) | (39,859 | ) | (42,416 | ) | ||||||
Eliminations
|
(720 | ) | 40 | 104 | ||||||||
Other items not allocated to segments
|
(19,613 | ) | (30,098 | ) | (17,302 | ) | ||||||
Earnings (loss) from continuing operations before income taxes
|
$ | 47,911 | $ | 12,823 | $ | (13,172 | ) |
March 31
|
2012
|
2011
|
||||||
Assets:
|
||||||||
Original Equipment – Asia
|
$ | 102,567 | $ | 91,748 | ||||
Original Equipment – Europe
|
370,824 | 393,768 | ||||||
Original Equipment – North America
|
230,405 | 237,423 | ||||||
South America
|
96,588 | 103,733 | ||||||
Commercial Products
|
68,900 | 66,301 | ||||||
Corporate and administrative
|
40,557 | 45,103 | ||||||
Assets held for sale
|
2,450 | 2,450 | ||||||
Eliminations
|
(18,830 | ) | (22,784 | ) | ||||
Total assets
|
$ | 893,461 | $ | 917,742 |
March 31
|
2012
|
2011
|
2010
|
|||||||||
Capital expenditures:
|
||||||||||||
Original Equipment – Asia
|
$ | 12,453 | $ | 10,796 | $ | 8,036 | ||||||
Original Equipment – Europe
|
29,785 | 24,957 | 36,640 | |||||||||
Original Equipment – North America
|
15,416 | 12,909 | 14,306 | |||||||||
South America
|
5,184 | 4,127 | 2,532 | |||||||||
Commercial Products
|
1,719 | 2,277 | 484 | |||||||||
Corporate and administrative
|
(205 | ) | (5 | ) | (1,922 | ) | ||||||
Capital expenditures - continuing operations
|
64,352 | 55,061 | 60,076 | |||||||||
Capital expenditures - discontinued operations
|
- | - | 221 | |||||||||
Total capital expenditures
|
$ | 64,352 | $ | 55,061 | $ | 60,297 |
March 31
|
2012
|
2011
|
2010
|
|||||||||
Depreciation and amortization expense:
|
||||||||||||
Original Equipment – Asia
|
$ | 5,024 | $ | 3,091 | $ | 2,435 | ||||||
Original Equipment – Europe
|
26,519 | 25,525 | 28,600 | |||||||||
Original Equipment – North America
|
20,015 | 21,669 | 26,921 | |||||||||
South America
|
4,041 | 4,038 | 3,689 | |||||||||
Commercial Products
|
2,135 | 2,213 | 3,008 | |||||||||
Corporate and administrative
|
- | 2 | 11 | |||||||||
Eliminations
|
(44 | ) | (46 | ) | (58 | ) | ||||||
Total depreciation and amortization expense
|
$ | 57,690 | $ | 56,492 | $ | 64,606 |
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||
Net sales by country:
|
||||||||||||
Brazil
|
$ | 169,058 | $ | 156,620 | $ | 115,862 | ||||||
Germany
|
285,911 | 280,271 | 293,077 | |||||||||
United States
|
666,166 | 632,278 | 515,513 | |||||||||
Other
|
456,017 | 379,066 | 238,124 | |||||||||
Total net sales
|
$ | 1,577,152 | $ | 1,448,235 | $ | 1,162,576 |
March 31
|
2012
|
2011
|
||||||
Long-lived assets:
|
||||||||
Germany
|
$ | 127,432 | $ | 149,523 | ||||
United States
|
112,266 | 118,781 | ||||||
Other
|
188,044 | 180,455 | ||||||
Long-lived assets
|
427,742 | 448,759 | ||||||
Assets held for sale
|
2,450 | 2,450 | ||||||
Total long-lived assets
|
$ | 430,192 | $ | 451,209 |
Years ended March 31
|
2012
|
2011
|
2010
|
|||||||||
Modules/packages
|
$ | 410,434 | $ | 406,908 | $ | 378,443 | ||||||
Oil coolers
|
249,387 | 232,355 | 157,756 | |||||||||
Radiators
|
191,370 | 187,906 | 153,515 | |||||||||
Charge-air coolers
|
173,859 | 140,154 | 95,381 | |||||||||
Building HVAC
|
153,284 | 143,137 | 140,688 | |||||||||
EGR coolers
|
152,715 | 130,877 | 77,958 | |||||||||
Vehicular air conditioning
|
101,522 | 62,979 | 45,176 | |||||||||
Other
|
144,581 | 143,919 | 113,659 | |||||||||
Total net sales
|
$ | 1,577,152 | $ | 1,448,235 | $ | 1,162,576 |
|
·
|
Cash and investments – cash deposits and short-term investments are reviewed to ensure banks have credit ratings acceptable to the Company and that all short-term investments are maintained in secured or guaranteed instruments;
|
|
·
|
Pension assets – ensuring that investments within these plans provide appropriate diversification, are subject to monitoring of investment teams and ensuring that portfolio managers are adhering to the Company’s investment policies and directives, and ensuring that exposure to high risk securities and other similar assets is limited; and
|
|
·
|
Insurance – ensuring that insurance providers have acceptable financial ratings to the Company.
|
|
·
|
Customers – performing thorough review of customer credit reports and accounts receivable aging reports by an internal credit committee;
|
|
·
|
Suppliers – implementation of a supplier risk management program and utilizing industry sources to identify and mitigate high risk situations; and
|
|
·
|
Derivatives – ensuring that counterparties to derivative instruments have acceptable credit ratings to the Company.
|
Fiscal 2012 quarters ended
|
June
|
Sept.
|
Dec.
|
March
|
||||||||||||
Net sales
|
$ | 417,863 | $ | 397,290 | $ | 373,282 | $ | 388,717 | ||||||||
Gross profit (a)
|
69,802 | 62,374 | 60,083 | 64,311 | ||||||||||||
Earnings from continuing operations (b)
|
12,566 | 1,000 | 8,768 | 15,646 | ||||||||||||
Net earnings attributable to Modine (b)
|
12,575 | 1,335 | 9,022 | 15,529 | ||||||||||||
Earnings from continuing operations per common share:
|
||||||||||||||||
Basic
|
$ | 0.27 | $ | 0.02 | $ | 0.18 | $ | 0.33 | ||||||||
Diluted (c)
|
0.27 | 0.02 | 0.18 | 0.33 | ||||||||||||
Net earnings attributable to Modine per common share:
|
||||||||||||||||
Basic
|
$ | 0.27 | $ | 0.03 | $ | 0.19 | $ | 0.33 | ||||||||
Diluted (c)
|
0.27 | 0.03 | 0.19 | 0.33 |
Fiscal 2011 quarters ended
|
June
|
Sept.
|
Dec.
|
March
|
||||||||||||
Net sales
|
$ | 345,532 | $ | 345,902 | $ | 360,043 | $ | 396,758 | ||||||||
Gross profit (a)
|
59,179 | 55,990 | 56,771 | 60,316 | ||||||||||||
Earnings (loss) from continuing operations (b) (d)
|
4,737 | (13,880 | ) | 5,449 | 11,974 | |||||||||||
Net earnings (loss) attributable to Modine (b)
|
4,699 | (16,850 | ) | 5,415 | 11,969 | |||||||||||
Earnings (loss) from continuing operations per common share:
|
||||||||||||||||
Basic
|
$ | 0.10 | $ | (0.31 | ) | $ | 0.12 | $ | 0.26 | |||||||
Diluted (c)
|
0.10 | (0.31 | ) | 0.12 | 0.25 | |||||||||||
Net earnings (loss) attributable to Modine per common share:
|
||||||||||||||||
Basic
|
$ | 0.10 | $ | (0.37 | ) | $ | 0.12 | $ | 0.26 | |||||||
Diluted (c)
|
0.10 | (0.37 | ) | 0.12 | 0.25 |
(a)
|
Gross profit increased $371, $355 and $340 for the quarters ended June 30, 2011, September 30, 2011 and December 31, 2011, respectively. Gross profit increased $203, $221, $224 and $241 for the quarters ended June 30, 2010, September 30, 2010, December 31, 2010 and March 31, 2011, respectively.
|
(b)
|
Earnings from continuing operations and net earnings attributable to Modine decreased $550 for the quarter ended June 30, 2011 and increased $375 and $726 for the quarters ended September 30, 2011 and December 31, 2011, respectively. Earnings (loss) from continuing operations and net earnings (loss) attributable to Modine decreased $289, $190, $136 and $332 for the quarters ended June 30, 2010, September 30, 2010, December 31, 2010 and March 31, 2011, respectively.
|
(c)
|
Diluted earnings from continuing operations per share and diluted net earnings attributable to Modine per share decreased $0.01 for the quarter ended June 30, 2011 and increased $0.01 for the quarters ended September 30, 2011 and December 31, 2011. Diluted earnings (loss) from continuing operations per share and diluted net earnings (loss) attributable to Modine per share decreased $0.01 for the quarters ended June 30, 2010, September 30, 2010 and March 31, 2011, respectively.
|
(d)
|
The second quarter of fiscal 2011 includes a loss from extinguishment of debt and write-off of unamortized debt issuance costs of $19,924.
|
|
·
|
Appoint a global process owner who is responsible for overseeing the Company’s compliance with value added tax regulations, including directing the establishment of internal value added tax policies and procedures;
|
|
·
|
Develop policies and procedures necessary to properly comply with the value added tax regulations, with specific focus on cross-border transactions that could impact multiple taxing jurisdictions;
|
|
·
|
Develop a training module and train a cross-functional team of personnel in finance, sales, purchasing, and other applicable Company departments on the newly developed value added tax policies;
|
|
·
|
Improve existing internal controls over VAT to include specific consideration of tooling sales and fixed asset transfers prior to invoice issuance in accordance with applicable value added tax regulations;
|
|
·
|
Implement monitoring controls to evaluate compliance with the internal policies and applicable value added tax regulations;
|
|
·
|
Engage additional resources (both internal hiring and external consultants) with technical expertise in value added tax regulations who will assist with the development of related internal policies and procedures, execute the transactions in accordance with internal polices and value added tax regulations, and/or monitor compliance with internal policies and value added tax regulations; and
|
|
·
|
Implement system changes which will identify the country of origin for all transactions to aid in the application of value added tax for the appropriate taxing jurisdiction.
|
|
·
|
The Company assigned functional responsibility to a member of senior management to establish global standards for inventory materials transactions;
|
|
·
|
All Company-owned inventories held at off-site locations were confirmed at quarter ends and as part of the physical inventory counts performed;
|
|
·
|
System-generated inventory transactions were implemented to automatically track the movement of certain inventories, which reduces the risk of manual inventory transaction errors;
|
|
·
|
Advanced authorization levels were implemented for all manual inventory adjustments;
|
|
·
|
Monthly inventory analytical reviews were performed for each facility, in which fluctuations in inventory balances by product, aging of inventory parts and all manual inventory adjustments are assessed;
|
|
·
|
Cycle counting procedures were implemented at certain manufacturing facilities;
|
|
·
|
Multiple physical inventory counts were performed at certain manufacturing facilities during fiscal 2012 and physical inventory counts were performed at all manufacturing facilities during the fourth quarter of fiscal 2012; and
|
|
·
|
Quarterly inventory variance analyses were performed that included a review of inventory levels by category and product details.
|
|
·
|
The Company appointed a Director, Global Compliance & Ethics Programs, who is responsible for overseeing the Company’s compliance and ethics program by working with management and the Company’s Board of Directors to develop programs to promote compliance with applicable rules and regulations as well as the Company’s Code of Ethics and Business Conduct. While the appointment of this individual was separate from this trade compliance issue, he is and will continue to oversee ongoing compliance;
|
|
·
|
The Company issued a global Trade Compliance Policy, expressing the Company’s commitment to compliance with import, export and anti-boycott laws and regulations;
|
|
·
|
The Company has obtained certificates of origin for all products that are qualified under the North American Free Trade Agreement (NAFTA) in accordance with regulatory requirements and has resumed NAFTA claims for products that qualify. The Company has also established a procedure in which new parts are analyzed and added to the certificate of origin if they qualify;
|
|
·
|
The Company conducted a review of recent NAFTA claims filed by our customs broker, and determined that the items claimed as NAFTA-qualifying had, in fact, been qualified;
|
|
·
|
The Company has issued and will continue to issue standard practices and work instructions for inclusion into its import and export compliance manuals for its Laredo, Texas warehouse and its Nuevo Laredo, Mexico facility;
|
|
·
|
The Company held training on U.S. customs requirements at its global headquarters in Racine, Wisconsin and at the Nuevo Laredo, Mexico manufacturing facility, as well as training on the standard work instructions at the Nuevo Laredo, Mexico facility;
|
|
·
|
The Company entered the U.S. customs reconciliation program;
|
|
·
|
The Company granted the appropriate power of attorney to its approved freight forwarders to make all required filings with the U.S. Census Bureau; and
|
|
·
|
The Company hired a Distribution Center Manager and other personnel with trade compliance experience at its Nuevo Laredo, Mexico and Laredo, Texas facilities.
|
Date: June 14, 2012 |
Modine Manufacturing Company
|
|
|
By:
|
/s/ Thomas A. Burke |
Thomas A. Burke, President | ||
and Chief Executive Officer | ||
(Principal Executive Officer) |
/s/ Thomas A. Burke
|
|
Thomas A. Burke
|
June 14, 2012
|
President, Chief Executive Officer and Director
|
|
(Principal Executive Officer)
|
|
/s/ Michael B. Lucareli
|
|
Michael B. Lucareli
|
June 14, 2012 |
Vice President, Finance and Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
/s/ Gary L. Neale | |
Gary L. Neale
|
|
Director
|
|
|
|
/s/ David J. Anderson | |
David J. Anderson
|
June 14, 2012 |
Director
|
|
/s/ Charles P. Cooley | |
Charles P. Cooley
|
June 14, 2012 |
Director
|
|
/s/ Suresh V. Garimella | |
Suresh V. Garimella
|
June 14, 2012 |
Director
|
|
/s/ Frank W. Jones | |
Frank W. Jones
|
June 14, 2012 |
Director
|
|
/s/ Dennis J. Kuester
|
|
Dennis J. Kuester | June 14, 2012 |
Director | |
/s/ Larry O. Moore
|
|
Larry O. Moore | June 14, 2012 |
Director |
/s/ Christopher W. Patterson
|
|
Christopher W. Patterson | June 14, 2012 |
Director | |
/s/ Mary L. Petrovich
|
|
Mary L. Petrovich | June 14, 2012 |
Director | |
/s/ Marsha C. Williams
|
|
Marsha C. Williams | June 14, 2012 |
Director | |
/s/ Michael T. Yonker
|
|
Michael T. Yonker | June 14, 2012 |
Director |
Column A
|
Column B
|
Column C
|
Column D
|
Column E
|
||||||||||||||||||
Additions
|
||||||||||||||||||||||
(1) | (2) | |||||||||||||||||||||
Description
|
Balance at
Beginning of
Period
|
Charged
(Benefit) to
Costs and
Expenses
|
Charged to
Other
Accounts
|
Deductions
|
Balance at
End
of Period
|
|||||||||||||||||
2012: Allowance for Doubtful Accounts
|
$ | 754 | $ | 117 | $ | 47 |
(B)
|
$ | 109 |
(A)
|
$ | 809 | ||||||||||
Valuation Allowance for Deferred Tax Assets
|
$ | 129,604 | $ | 1,027 | $ | 16,132 |
(B)
|
$ | - | $ | 146,763 | |||||||||||
2011: Allowance for Doubtful Accounts
|
$ | 2,420 | $ | (318 | ) | $ | 89 |
(B)
|
$ | 1,437 |
(A)
|
$ | 754 | |||||||||
Valuation Allowance for Deferred Tax Assets
|
$ | 121,261 | $ | 13,886 | $ | (5,543 | ) |
(B)
|
$ | - | $ | 129,604 | ||||||||||
2010: Allowance for Doubtful Accounts
|
$ | 2,831 | $ | (8 | ) | $ | 193 |
(B)
|
$ | 596 |
(A)
|
$ | 2,420 | |||||||||
Valuation Allowance for Deferred Tax Assets
|
$ | 107,052 | $ | 10,500 | $ | 3,709 |
(B)
|
$ | - | $ | 121,261 |
(A)
|
Bad debts charged off during the year
|
(B)
|
Translation and other adjustments
|
Exhibit No.
|
Description
|
Incorporated Herein By
Referenced To
|
Filed
Herewith
|
||||
3.1 |
Amended and Restated Articles of Incorporation, as amended.
|
Exhibit 4.2 to Registrant’s Registration Statement on Form S-3 (333-161030) dated August 4, 2009.
|
|||||
3.2 |
Bylaws, as amended.
|
Exhibit 3.1 to Registrant’s Current Report on Form 8-K dated May 25, 2010.
|
|||||
4.1 |
Form of Stock Certificate of the Registrant.
|
Exhibit 4(a) to Form 10-K for the fiscal year ended March 31, 2003 ("2003 10-K").
|
|||||
4.2 |
Amended and Restated Articles of Incorporation, as amended.
|
See Exhibit 3.1 hereto.
|
|||||
4.3**
|
Amended and Restated Credit Agreement dated as of August 12, 2010 among the Registrant, the Foreign Subsidiary Borrowers, JPMorgan Chase Bank, N.A. as Administrative Agent, as Swing Line Lender, as LC Issuer, and as a Lender, U.S. Bank, N.A and Wells Fargo Bank, N.A., each as Syndication Agent and as a Lender, M&I Marshall & Ilsley Bank, as Documentation Agent and as a Lender, Associated Bank, N.A., and Comerica Bank.
|
Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated August 12, 2010 (“August 12, 2010 8-K”).
|
|||||
4.4**
|
Note Purchase and Private Shelf Agreement dated as of August 12, 2010 among the Registrant and the Series A Purchasers named therein of $125,000,000 6.83% Secured Senior Notes, Series A, due August 12, 2020 and $25,000,000 Private Shelf Facility and each Prudential Affiliate (as defined therein) that may become bound by certain provisions thereof.
|
Exhibit 4.2 to August 12, 2010 8-K.
|
|||||
4.5
|
Amended and Restated Collateral Agency Intercreditor Agreement dated as of August 12, 2010 among the Lenders (as defined therein), the Noteholders (as defined therein) and JPMorgan Chase Bank, N.A. as Collateral Agent.
|
Exhibit 4.3 to August 12, 2010 8-K
|
|||||
4.6**
|
First Amendment to Amended and Restated Credit Agreement and Waiver(the “Credit Amendment”) dated as of March 15, 2012, with JPMorgan Chase Bank, N.A. (“JPMorgan”), as Administrative Agent, LC Issuer, Swing Line Lender and as a Lender, and U.S. Bank, N.A. and Wells Fargo Bank, N.A. as Syndication Agents and as Lenders, BMO Harris Bank N.A., formerly known as M&I Marshall & Ilsley Bank, as Documentation Agent and as Lender and Associated Bank, N.A. and Comerica Bank (collectively, the “Lenders”). The Credit Amendment amends Modine’s existing four-year, $145 million multi-currency revolving credit facility dated as of August 12, 2010 (the “Original Credit Agreement”).
|
Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated March 15, 2012 (“March 15, 2012 8-K”).
|
4.7**
|
First Amendment to Note Purchase and Private Shelf Agreement and Waiver (the “Note Purchase Amendment”) dated as of March 15, 2012, with Prudential Investment Management, Inc., The Prudential Insurance Company of America and Prudential Retirement Insurance and Annuity Company (collectively the “Noteholders”) pursuant to which the Company and the Note Holders amended their Note Purchase and Private Shelf Agreement dated August 12, 2010 (the “Original Note Purchase Agreement”).
|
Exhibit 4.2 to March 15, 2012 8-K.
|
|||||
4.8**
|
Second Amendment to Amended and Restated Credit Agreement (the “Second Credit Amendment”) dated as of April 20, 2012, with JPMorgan Chase Bank, N.A. (“JPMorgan”), as Administrative Agent, LC Issuer, Swing Line Lender and as a Lender, and U.S. Bank, N.A. and Wells Fargo Bank, N.A. as Syndication Agents and as Lenders, BMO Harris Bank N.A., formerly known as M&I Marshall & Ilsley Bank, as Documentation Agent and as Lender and Associated Bank, N.A. and Comerica Bank (collectively, the “Lenders”). The Credit Amendment amends the “Original Credit Agreement”.
|
Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated April 20, 2012 (“April 20, 2012 8-K”).
|
|||||
4.9**
|
Second Amendment to Note Purchase and Private Shelf Agreement (the “Second Note Purchase Amendment”) dated as of April 20, 2012, with Prudential Investment Management, Inc., The Prudential Insurance Company of America and Prudential Retirement Insurance and Annuity Company (collectively the “Noteholders”) pursuant to which the Company and the Note Holders amended the “Original Note Purchase Agreement”.
|
Exhibit 4.2 to April 20, 2012 8-K.
|
|||||
Credit Facility Agreement among Modine Holding GmbH, Modine Europe GmbH and Deutsche Bank AG dated as of April 27, 2012.
|
X | ||||||
10.1* |
Director Emeritus Retirement Plan effective April 1, 1992 (and frozen as of July 1, 2000).
|
Exhibit 10(a) to Registrant’s Form 10-K for the fiscal year ended March 31, 2002 (“2002 10-K”).
|
|||||
10.2* |
Employment Agreement between the Registrant and Thomas A. Burke dated as of June 15, 2007.
|
Exhibit 10.3 to Registrant’s Current Report on Form 8-K dated June 15, 2007 8-K (“June 15, 2007 8-K”).
|
|||||
10.3* |
Form of Amendment No. 1 to Employment Agreement entered into as of July 1, 2008 with Thomas A. Burke.
|
Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated July 1, 2008.
|
|||||
10.4* |
Form of Change in Control and Termination Agreement (amended and restated) between the Registrant and officers other than Thomas A. Burke.
|
Exhibit 10(f) to Registrant’s Form 10-K for the year ended March 31, 2004 (“2004 10-K”).
|
|||||
10.5* |
Employment Agreement, dated April 25, 2009, between Modine Holding GmbH and Klaus Feldmann.
|
Exhibit 10.1 to Fiscal 2010 First Quarter 10-Q.
|
|||||
10.6* |
2000 Stock Incentive Plan for Non-Employee Directors (Amended and Restated as of March 16, 2005).
|
Appendix A to Registrant’s Proxy Statement for the 2005 Annual Meeting dated June 15, 2005.
|
10.7* |
Executive Supplemental Retirement Plan (as amended).
|
Exhibit 10(f) to Registrant's Form 10-K for the fiscal year ended March 31, 2000 ("2000 10-K").
|
|||||
10.8* |
Deferred Compensation Plan (as amended).
|
Exhibit 10(y) to 2003 10-K.
|
|||||
10.9* |
1994 Incentive Compensation Plan (as amended).
|
Exhibit 10(o) to 2002 10-K.
|
|||||
10.10* |
2000 Stock Option Plan for Non-Employee Directors.
|
Exhibit 10(ac) to 2001 10-K.
|
|||||
10.11* |
Form of Director's Stock Option Agreement (for 2000 Stock Option Plan for Non-Employee Directors).
|
Exhibit 10(ad) to 2001 10-K.
|
|||||
10.12* |
2007 Incentive Compensation Plan.
|
Appendix A to the Registrant's Proxy Statement dated June 18, 2007.
|
|||||
10.13* |
2008 Incentive Compensation Plan
(Amended and Restated effective May 18, 2011).
|
Appendix A to the Registrant's Proxy Statement dated June 28, 2011.
|
|||||
10.14* |
Amendment No. 1 to Form of Change in Control and Termination Agreement (amended and restated) between the Registrant and Officers other than Thomas A. Burke.
|
Exhibit 10.17 to Registrant's Form 10-K for the fiscal year ended March 31, 2011.
|
|||||
10.15* |
Supplemental Severance Policy.
|
Exhibit 10.1 to Registrant’s Current Report on Form 8-K dated October 17, 2011.
|
|||||
10.16 * |
Form of Fiscal 2013 Modine Performance Stock Award Agreement (Executive Council members).
|
X | |||||
10.17 * |
Form of Fiscal 2013 Modine Incentive Stock Options Award Agreement (Executive Council members).
|
X | |||||
10.18 * |
Form of Fiscal 2013 Modine Restricted Stock Award Agreement (Executive Council members).
|
X | |||||
10.19 * |
Form of Fiscal 2013 Modine Non-Qualified Stock Option Award Agreement.
|
X | |||||
21 |
List of subsidiaries of the Registrant.
|
X | |||||
23 |
Consent of independent registered public accounting firm.
|
X | |||||
31.1 |
Rule 13a-14(a)/15d-14(a) Certification of Thomas A. Burke, President and Chief Executive Officer.
|
X | |||||
31.2 |
Rule 13a-14(a)/15d-14(a) Certification of Michael B. Lucareli, Vice President, Finance and Chief Financial Officer.
|
X | |||||
32.1 |
Section 1350 Certification of Thomas A. Burke, President and Chief Executive Officer.
|
X | |||||
32.2 |
Section 1350 Certification of Michael B. Lucareli, Vice President, Finance and Chief Financial Officer.
|
X |
101.INS
|
Instance Document
|
X | |||||
101.SCH
|
XBRL Taxonomy Extension Schema
|
X | |||||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
X | |||||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
X | |||||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
X |
*
|
Denotes management contract or executive compensation plan or arrangement required to be filed as an exhibit pursuant to Item 15 of Form 10-K.
|
**
|
Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, the Registrant has omitted certain agreements with respect to long-term debt not exceeding 10% of consolidated total assets. The Registrant agrees to furnish a copy of any such agreements to the Securities and Exchange Commission upon request.
|
Credit Facility Agreement | Ausfertigung für den Kunden |
Borrower:
|
Modine Holding GmbH, Arthur
-
B
.
-
Modine-Str. 1, 7
0
794 Filderstadt
|
Modine
Europe GmbH, Arthur
-
B
.
-
Modine-Str. 1, 7
0
794 Filderstadt
|
Bank:
|
Deutsche Bank AG Filiale Deutschlandgeschäft, Markgebiet Stuttgart 2, Theodor-Heuss-Straße 3, 7
0
174 Stuttgart
|
(1)
|
Aggregate Facility Amount
|
The
Bank makes available to the Borrower a Credit Facility in the amount of
E
UR
1
0
.
0
0
0
.
0
0
0
,
-
(in
words: Euro ten million)
(
„
A
gg
r
ega
t
e
Fac
i
li
t
y
A
m
o
un
t“)
.
|
|
The
Aggregate Facility Amount is divided in the following facilities:
|
(a)
|
Facility 1: revolving cash credit facility in the amount of up to EUR 9
.
90
0
.0
0
0,
-
-
(in words: Euro nine million ninehundred thousand)
(“
Fa
c
ili
t
y
1
”
)
.
|
(b)
|
Facility 2: revolving guarantee facility in the amount of up to EUR 1
0
0.
0
0
0
,
-
-
(in words: Eu- ro onehundred thousand)
(
“
Fa
c
ili
t
y
2”
)
.
|
(2)
|
Term of the Facilities
|
The
Credit Facility is available until
26
th
April
2
01
5
.
(
“
T
e
r
m
o
f
the
Fac
i
li
t
y
”
)
. (
3)
|
|
P
u
r
pose
|
The
proceeds of the Facility shall be applied towards general corporate purposes including working capital requirements of the Modine Holding GmbH
-
Group only
.
The use of the Facili- ty for acquisitions (Unternehmenskäufe
,
ganz oder in Teilen) irrespective of form
,
duration and amount will require the prior consent of the Bank
.
|
(4)
|
Joint and Several Liability
|
|
The Credit Facility may be used by each Borrower independently
,
provided that the aggregate principal amount outstanding may not exceed the Aggregate Facility Amount and the amount of the respective Facility. The obligations of each Borrower under the Credit Facility Agree- ment are joint and several (
g
e
s
a
m
t
sc
h
u
l
d
n
e
r
i
sc
he
H
af
t
u
n
g
)
.
Such joint and several liability will not end upon termination of this Credit Facility Agreement (e.g
.
upon the expiration or cancel- lation) but only upon final settlement of all claims of the Bank including interest, fees and costs
.
|
5)
|
Definitions and Interpretation
|
|
In
this Credit Facility Agreement the following words and terms are defined as specified below:
|
|
„
Banking
D
a
y
“
means a day (other than a Saturday or Sunday) on which banks are open for general business in Stuttgart.
|
|
„
E
O
N
I
A
“
means the
E
uro
O
ver
N
ight
I
ndex
A
verage as determined by the European Central Bank for each TARGET
-
day
.
On days which are not a TARGET
-
day the EONIA as determined on the immediately preceding TARGET
-
day shall apply
.
If no EONIA is available on a TAR- GET
-
day the Bank will determine the applicable reference interest rate in accordance with section 315 German Civil Code (
B
G
B
) on the basis of the quotations for overnight funds in the European interbank market
.
|
|
„
E
URIB
O
R“
means the interest rate per annum for deposits in Euro for the relevant interest period displayed on page EURIBOR01 (or a respective succeeding screen replacing EURI- BOR01) for 11
.
00
a.m
.
Brussels time two TARGET
-
days prior to the disbursement/the com- mencement of the respective interest period
.
If the EURIBOR cannot be determined two TARGET
-
days prior to the first interest period, the Bank and the Borrower will negotiate the in- terest rate for the relevant interest period
.
The Bank is not obligated to disburse the loan unless an agreement about the applicable interest rate has been reached. The Bank is re- leased from its obligation to disburse the loan if an agreement about the applicable interest rate is not reached within 15 days
.
If the EURIBOR for an interest period following the first i n- terest period cannot be determined two TARGET
-
days prior to the commencement of the relevant interest period the Bank will determine interest for the relevant interest period based on interest rates customary in the European interbank market for the particular interest period plus the agreed margin.
|
|
„
E
v
ent
of
Defaul
t
“
means any circumstance specified in no. 19 section 3 of the General Business Conditions or § 9 of this contract, which entitles the Bank to terminate this agree- ment for reasonable cause.
|
|
"
Fina
n
c
i
al
In
d
eb
t
ed
n
e
s
s
" means any indebtedness for or in respect of (i) moneys borrowed, (ii) any letters of credit issued and acceptances accepted or issued, (iii) any amount raised pursuant to any note purchase facility or the issue of bonds
,
notes
,
debentures
,
loan stock or any similar instrument, (iv) lease contracts which would, in accordance with orders or state- ments of practice of the Federal Ministry of Finance or GAAP under the applicable law as the case may be, be treated as a finance lease, (v) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis)
,
(vi) any amount raised under any other transaction (including any forward sale or purchase agreement) having the commer- cial effect of a borrowing
,
(vii) any derivative transaction entered into in connection with protec- tion against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction
,
only the marked to market value shall be taken into account), (viii) any counter
-
indemnity obligation in respect of a guarantee, indemnity
,
bond, standby or docu- mentary letter of credit or any other instrument issued by third parties unless both obligations are reported, the primary obligation on and the obligation of the counter-indemnity on or below, the same balance sheet; and (ix) the amount of any liability in respect of any guarantee or in- demnity for any of the items referred to in paragraphs (i) through (viii) above, (x) a guarantee, surety or other obligation for any of the obligations listed in paragraphs (i) through (ix)
,
and (xi) provisions for pension obligations
.
|
|
„Group / Modine Holding GmbH - Group“
means all companies which are included in the annual consolidated financial statement of Modine Holding GmbH (Companies included as per 31.03.2011: Modine Holding GmbH, Filderstadt; Modine Europe GmbH, Filderstadt; Modine Pliezhausen GmbH, Pliezhausen, Modine Wackersdorf GmbH, Wackersdorf; Modine Grundstücksverwaltungs GmbH, Filderstadt; Modine Kirchentellinsfurt GmbH, Kirchentellins- furt; Modine Neuenkirchen GmbH, Neuenkirchen; Modine Uden B.V., Uden, Niederlande; Modine Pontevico s.r.l., Pontevico, Italien; Modine Hungaria Gép, Kft., Meszökövesd, Ungarn; Modine Austria Holding GmbH, Kottingbrunn , Österreich; Modine Austria GmbH, Kotting- brunn , Österreich; Modine Austria Immobilien GmbH, Kottingbrunn , Österreich; Modine RUS LLP, Togliatti, Russland..
|
|
„
T
A
R
G
E
T
-
d
a
y
“ is any day on which the Trans
-
European Automated Real Time Gross Settle- ment Express Transfer System is open for the settlement of payments in Euro.
|
|
In
the event of any conflict between the English text and the text in any other language
,
the
English text shall prevail
,
except that where a German translation of a legal term appears in such text, the German translation shall prevail
.
|
(1)
|
Cash Credit Facility
|
The
Facility 1 may be utilized by way of:
|
(a)
|
Cash Credit
|
Current
account cash advances
(“
Cash
C
r
edi
t”
)
in Euro.
|
(b)
|
EURIBOR
-
Fixed Interest Loan
|
Loans
with fixed interest rates on the basis of EURIBOR with interest periods of 1, 2, 3 or 6
months
,
which may
,
however, not extend beyond the Term of Facility 1
(“
In
t
e
r
e
s
t
P
e-
r
io
d”
)
(“
E
URIB
O
R
-
Fix
e
d
I
n
t
e
r
e
s
t
Loan
”
)
in Euro after a utilization request by the Bor- rower.
|
|
Each
utilization request must be delivered to the Bank by 1
0
:
00
a.m
.
Frankfurt am Main local time two Banking Days before the day on which disbursement is to be made or on which, a new Interest Period would begin, respectively
.
The utilization request must speci- fy the designated amount of the utilization and the duration of the Interest Period and shall be irrevocable
.
|
|
If
an Interest Period would otherwise end on a day which is not a Banking Day
,
that Inter- est Period will instead end on the next Banking Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
|
(c)
|
Utilization in foreign currency
|
|
Cash
Credit in foreign currency
,
namely in US Dollar or with prior consent of the Bank in every other currency which is freely available, convertible and transferable in the Euro- pean interbank market
.
|
(2)
|
Guarantee Facility
|
|
The
Facility 2 may be utilized as follows:
|
(a)
|
Guarantees
|
|
Facility
2 may be utilized as agreed upon a case by case basis through sureties (
B
ürg-
sc
h
a
ft
e
n
)
,
sureties upon first demand or guarantees (including bonds and standby letters of credit) issued upon instruction of the Borrower (
“
G
ua
r
an
t
e
e
s
”
) in EUR and if individual- ly agreed upon also in foreign currency. Unless otherwise agreed on a case by case ba- sis
,
the instructions to issue the Guarantees shall be given using the wording in each case prepared by the Bank
.
|
(b)
|
Special Conditions for Guarantee Business
|
|
In
addition, the Special Conditions for Guarantee Business of the Bank shall apply
,
which
take priority over the Bank’s General Business Conditions
.
|
(c)
|
Conditional Acceptance
|
|
Before
accepting an instruction to issue a Guarantee
,
the Bank is entitled to consider such
instruction with respect to its feasibility under legal
,
economical and policy aspects and to refuse acceptance, as the case may be.
|
(
1)
|
The Borrower will repay all amounts outstanding in full at the latest at the expiration of the
Credit Facility Agreement unless otherwise agreed
.
|
(
2)
|
If after the termination of the Facility 2 Guarantees are outstanding and the collateral provided to the Bank does not cover the full amount of any risk resulting from such Guarantees, the Borrower will procure that the Bank be released within a reasonable period of time from its ob- ligations under such Guarantees
.
The Borrower is entitled to provide the Bank instead with security by pledge of an amount in cash in the relevant currency of the Guarantee. Section 10 of the Conditions for Guarantee Business remains unaffected
.
|
(1)
|
General
|
(a)
|
Authorization for debiting
|
|
The
Bank is entitled to debit due interest
,
commissions
,
expenses
,
charges and fees
to the account no. 24
0
/118
0
108
0
0
of Borrower Modine Holding GmbH or the account no. 24
0
/118
0
926
0
0
of Borrower Modine Europe GmbH unless otherwise agreed.
|
(2) |
(a)
|
Interest rate for current account cash advances
|
|
The
rate of interest for cash advances will be calculated as follows:
|
|
The rate of interest per annum for current account cash advances in Euro for each day is the sum of the EONIA applicable for such day and the margin.
|
|
The
margin is
2
,5
%
p
.
a.
u
n
t
il
f
u
r
t
her
n
ot
ic
e
.
|
Interest
will be calculated on the basis actual/36
0
.
Amounts will be debited monthly in arrears and upon expiration of the Credit Facility Agreement.
|
(b)
|
Interest for EURIBOR
-
Fixed Interest Loans
|
The
rate of interest for Fixed Interest Loans in Euro is the percentage rate per annum which is the sum of the applicable EURIBOR for the agreed interest period and the margin.
|
The
margin is
2
,
5
%
p
.
a.
u
n
t
il
f
u
r
t
her
n
ot
ice
|
Interest
will be calculated by calendar days on the basis actual / 36
0.
Interest is due at the end of the respective interest period
.
|
|
For
Fixed Loans the agreed margin upon conclusion of such a transaction shall not be affected by any later change of the margin.
|
(c)
|
Utilization in foreign currency
|
|
The
interest rate for utilizations in foreign currency and its payment will be agreed upon in advance on a case by case basis
.
|
(d)
|
Commission on Guarantees
|
|
The
commissions and fees on each Guarantee will be determined between the parties
in separate agreements. The commission on Guarantees will be calculated for each quarter and is due in advance.
|
(e)
|
Issuance Fee
|
|
The
commissions and fees on each issuance of a Guarantee will be determined be- tween the parties in separate agreements
.
|
(f)
|
Remuneration for special services in connection with Guarantees
|
The
Bank is entitled to further remuneration for services rendered which exceed the standard handling of a Guarantee (from the instruction to issue the Guarantee until its discharge) (e
.
g. wordings which require special scrutiny or in case of contentious pro- cedures). The remuneration will be calculated by the Bank based on the actual ex- penditure of time and manpower.
|
(3)
|
Additional Fees
|
Additional
fees will be regulated in a separate fee-letter
.
|
|
The
already existing security will serve as security for claims under this Credit Facility Agree- ment. Details
,
especially regarding the purpose of the collateral
,
are subject to the existing s e- curity agreements
.
|
(
1)
|
In accordance with German- Money
-
Laundering Act (“
G
e
l
dwäs
c
h
e
g
e
s
e
t
z
”
,
hereafter the “
G
w
G
”) all information required by law (§ 1 subpara
.
6 GwG) regarding the beneficial owner/s and the Declaration of the Borrower according to the GWG with regard to this Credit Facility Agreement have been submitted to the Bank
.
|
(
2)
|
Up
-
to
-
date certified (
b
e
g
l
a
u
b
i
gt
) extract from the Commercial Register (
H
a
n
d
e
l
sr
e
gi
s
t
e-
r
a
u
s
z
ug
)
,
its articles of association (
S
at
z
u
n
g
)
,
certified by the commercial register as of a re- cent date, or partnership agreement (
G
e
s
e
ll
sc
h
a
ft
sv
e
r
tra
g
)
,
copies of any by-laws as well as a list of shareholders (
G
e
s
e
llsc
h
a
ft
e
r
li
s
te
) (if applicable), and
|
(
3)
|
The agreed collateral is in full force and effect
,
and
|
(
4)
|
No Event of Default is outstanding which constitutes or, with the expiry of a grace period and/or the giving of a notice would constitute the right to terminate the Credit Facility Agree- ment for reasonable cause, and
|
(
5)
|
The Borrower is not in default with any obligation vis
-
à
-
vis the Bank
,
and
|
(6
)
|
Legal opinion covering the legal validity and enforceability of the
“Commitment to limit inter- company claims and obligations („Abschottungserklärung“) and to suspend dividend payments in the event of an equity deterioration („Ausschüttungsregelung“) which constitutes Attachment 1 to this Credit Facility Agreement.
|
(1)
|
Information
|
|
The
Borrower undertakes to keep the Bank always informed of its current economic condition and, as the case may be, the current economic condition of the Modine Holding GmbH - Group.
|
|
For
this purpose the Borrower will
,
in particular
,
immediately upon completion and in any event within 6 months after the end of each of its financial years provide the Bank with
|
|
-
|
an original of its audited financial statement, at least with the content required by law and including appendix and management report (local GAAP);
|
|
-
|
the audited consolidated financial statement together with the group management re- port of the Borrower’s group of companies including the respective auditor’s reports (local GAAP);
|
|
-
|
an annual budget
-
plan (US GAAP) for the Modine Holding GmbH – Group (plus other entities under the operational control of the Borrower) at latest with the beginning of each fiscal year
|
|
Should
the financial statement not need to be audited
,
the executed copy to be submitted to the Bank has to be duly signed by the duly authorized managing directors
.
|
|
Furthermore,
the Borrower will provide the Bank with quarterly business assessments includ- ing a forecast until year
-
end; all such reporting shall be based on US-GAAP accounting me- thods and Borrower`s usual reporting practices
.
|
|
The
Borrower will provide upon the Bank’s demand further information and documents which give insight into its economic condition
.
|
|
The
Borrower will inform the Bank immediately in case material adverse changes or diver- gences in regard to the information given or documents handed over (including plan figures and projections) occur or in case it becomes apparent or there is evidence indicating that in- formation given or documents handed over are incomplete or incorrect.
|
(2)
|
Purpose
|
|
As
far as the Facility has been assigned to a specified purpose, the Borrower undertakes to provide the Bank upon its demand with proof that the Facility has been used for the agreed purpose by furnishing appropriate documents
.
|
|
The
Bank is not obligated to the Borrower to verify that the Credit Facility has been used for the agreed purpose.
|
(3)
|
Ownership
|
|
The
parties to this agreement agree that the current ownership in the Borrower represents an essential basis for the Bank’s preparedness to grant the Facility and any utilization thereund- er.
|
|
If
a change in the current ownership occurs
,
the parties will negotiate, prior to the occurrence of such a change
,
an agreement satisfactory to both sides on the continuation of this Credit Facility Agreement on changed terms and conditions, e.g
.
in respect of interest rates
,
colla- teral
,
or other agreements
.
|
(4)
|
Other Undertakings
|
|
During
the term of the Credit Facility Agreement Modine Holding GmbH will inform the Bank immediately if it is imminent that the Borrower`s equity (on Group level) declines below an amount of EUR 13
0
.0
0
0
.
0
0
0
,
--
. According to a separate Commitment – “Abschottungserklärung” and “Ausschüttungsregelung” (signed by Modine Manufacturing Company Racine
,
USA)
,
in such an event any direct or indirect distribution of retained earn- ings or profits to the parent company shall be suspended until the equity has achieved again an amount of EUR 13
0.
0
0
0
.0
0
0,
--
.
|
|
All
parties agree that an equity amount of EUR 1
00.
0
0
0.
0
0
0,
-
-
of the Borrower is essential for the granting and drawing of the Credit Facility
.
If it is imminent that the equity will decline be- low this amount all parties together will find a suitable solution regarding the continuation of the Credit Facility Agreement
.
|
(5)
|
Intercompany Business
|
|
The
Borrower will only enter into agreements with Modine Companies outside of the Modine Holding GmbH – Group under terms and conditions customary in the market and on arms- lengths basis
.
They will only act on the basis of and in accordance with such agreements. They will document and file all documents concerning agreements
,
deliveries
,
claims
,
and set- tlements / set offs as usual in an accurate ordinary business
.
|
(6)
|
Credit agreements with other financial institutions
|
|
The
Borrower will inform the Bank about future credit agreements or about material changes in existing credit agreements between the Borrower and other financial institutions (e.g
.
in- creases
,
terminations or demands for additional collateral) in advance if they are under nego- tiation and otherwise immediately upon their effectiveness
.
This shall not apply to any negotia- tions regarding a substitution of this Facility
.
|
(7)
|
Information and cooperation regarding credit by way of guarantee
|
|
The
Borrower will
,
upon request, provide the Bank for each Guarantee issued with all inform a- tion and appropriate documentation on the claim secured by the Guarantee, and will, in case a demand under the Guarantee is imminent
,
furnish the Bank with all information and documen- tation the Bank deems necessary in order to verify the validity of such demand, give the Bank all reasonable support in this respect and, for this purpose, nominate and place at the Bank’s disposal qualified and competent employees
.
|
(
1)
|
the Borrower does not comply with the General Undertakings or other material obligations under this Credit Facility Agreement or under any collateral agreement entered into in connec- tion with this Credit Facility Agreement, or
|
(2
)
|
a change of ownership occurs and the parties do not reach an agreement on the continuation of the Credit Facility Agreement on changed terms and conditions
,
e
.
g. in respect of interest rate
,
collateral
,
or other agreements
,
in due time, or
|
(
3)
|
any other Financial Indebtedness of the Borrower is not paid when due or is declared, or ca- pable of being declared
,
due and payable by any creditor(s) thereof prior to its agreed maturity by reasons of the occurrence of an Event of Default (howsoever described) and the aggregate of all such Financial Indebtedness exceeds an amount of EURO 1.00
0
.0
0
0,
-
-
or the equivalent thereof in any other currency or currencies (“Cross Default”)
.
|
(1)
|
Hedges
|
|
If
the Bank and the Borrower have entered or will enter into hedging transactions covering interest or currency risk which may also arise from this Credit Facility Agreement, a termina- tion of this Credit Facility Agreement will have no effect on the validity and continuation of such hedging transactions. Nothing in this clause shall oblige the Bank to enter into hedging transactions with the Borrower.
|
(2)
|
Foreign exchange risk
|
|
Any
utilization in foreign currency must be repaid in the same currency
,
irrespective of changes in the exchange rate which may have taken place in the meantime. Amounts out- standing in foreign currency will be counted against the Aggregate Facility Amount at any time on the basis of the respective current exchange rate to the Euro, as determined and published by the Bank on the Internet around 13:
0
0
Frankfurt time of every trading day
.
|
|
If
fluctuations in the exchange rate result in the total amounts outstanding exceeding the Ag- gregate Facility Amount the Borrower will reduce this overdraft immediately – by the expiry date of the agreed interest period at the latest or procure that the Bank be released without delay from its obligations under the relevant Guarantees. In the meantime, the Bank may de- mand security by pledge of an amount in cash and in Euro, namely in the amount the amounts outstanding exceed the Aggregate Facility Amount
.
|
(3)
|
Transfer of the Credit Risk to third parties with disclosure of information
|
|
The
Bank is entitled to transfer the economic risk of this credit facility
,
in whole or in part, to third parties or to use its claims resulting from this credit facility for refinancing purposes (inter alia by sub-participation, transfer or pledge of the claims including the respective collateral) and to provide the relevant information to the respective third parties
.
Albeit, the Bank will re- main the Borrower´s contractual counterparty in accordance with the terms and provisions of this Credit Facility Agreement.
|
|
The
Bank is also entitled to provide the relevant information to persons who have to be in- volved in the execution of the transfer due to technical or legal reasons and who are obli- gated, contractually or by law or by professional obligation to confidentiality
,
to keep all infor- mation received confidential
,
e
.
g. auditors
,
and to credit rating agencies
.
|
|
Third
party within the above meaning can be any member of the European system of central banks
,
any financial institution
,
any finance company
,
any insurance company
,
any pension fund, any investment company or any special purpose vehicle for securitization purposes
.
|
(4)
|
Choice of Law and Jurisdiction
|
|
This
agreement and all rights or obligations arising hereunder shall in all respects be governed by
,
and construed in accordance with
,
the laws of the Federal Republic of Germany
.
|
|
The Borrower hereby submits to the jurisdiction of the competent courts of Stuttgart
,
Germany, and, at the option of the Bank
,
of the competent courts of its domicile.
|
(5)
|
Amendments
|
|
Any
amendment to this Credit Facility Agreement is required to be made in writing.
|
(6)
|
Expiration Date/ Effectiveness
|
(
a)
|
The offer of the Bank to enter into this Credit Facility Agreement expires on
08.
0
5.2
0
12
(“E
xpir
a
t
ion
D
ate
”
)
.
|
(b
)
|
This Credit Facility Agreement becomes effective upon receipt by the Bank of this
Credit Facility Agreement on or prior to the Expiration Date duly signed by all parties
.
|
(
c)
|
Upon its effectiveness this Credit Facility Agreement amends the credit agreement of
1
0
.
0
5.2
0
10 including all amendments regarding EUR 15
.
0
0
0
.
0
0
0
,
-
Utilizations under such credit agreement will be accounted as utilization of the Facility
.
|
(7)
|
Non-conflict with other obligations
|
|
The
borrower confirms
,
that the entry into this Credit Facility Agreement and performance by it, and the transactions contemplated by it, do not and will not conflict with (i) any law or regu- lation applicable to it, (ii) its or any of its subsidiaries´constitutional documents or (iii) any agreement or instrument binding upon it or any of its subsidiaries or any of its subsidiaries´ assets.
|
(8)
|
Severability Clause
|
|
Should any provision of this Agreement be unenforceable or invalid, the other provisions he- reof shall remain in full force and effect
.
|
Declaration according to the GwG
|
The Borrower hereby confirms the Bank by ticking the box or initial that with regard to the Credit Facili- ty Agreement he is acting for his own account.
|
x
Modine Holding GmbH
|
x
Modine Europe GmbH
|
|
Deutsche Bank AG | |||
Filiale Deutschlandgeschäft | |||
|
|
||
Stuttgart, 27 April 2012 | /s/ Martin Förster and /s/ Hans Ulrich-Gross | ||
Place , Date | |||
Modine Holding GmbH | |||
Filderstadt, 05 May 2012 | /s/ Frank Michel and /s/ Torsten Jagdt | ||
Place , Date | |||
Modine Europe GmbH | |||
Filderstadt, 05 May 2012 | /s/ Frank Michel and /s/ Torsten Jagdt | ||
Place , Date |
o
|
1
0
0% of shares by Modine Holding GmbH.
|
I.
|
We will only enter into agreements with the Borrower or other companies of the Modine Holding GmbH – Group under terms and conditions customary in the market and on arms- lengths basis. We will only act on the basis of and in accordance with such agreements. We will prepare and maintain all documents concerning agreements, deliveries
,
claims, and settlements / set offs as usual in an accurate ordinary business
.
|
II.
|
In the name of Modine Manufacturing Company and all Associated Companies we will ensure that Modine Holding GmbH will not assume liabilities, surrender securities or war- rant funds or medium
-
or long term loans to a direct or indirect parent company or any As- sociated company with the exception of the following transactions: (1) current loan of €
9.5
0
0.
0
0
0,
-
-
to Modine UK Dollar Limited
,
Great Britain; (2) payments regarding royalties up to 2 % p.a
.
based on the group turnover by Modine Holding GmbH; (3) or any other ful- filment of an agreement or arrangement which was concluded in line with number I.
|
III.
|
According to the balance sheet report (local GAAP) Modine Holding GmbH as of
31
st
M
a
r
ch
2011
(Konzernabschluss zum
3
1
.
M
ä
r
z
2011
) the equity amounts to T€
16
0
.
3
5
4
[thereof capital stock (gezeichnetes Kapital): T€ 2
.
0
45; capital surplus (Kapitalrücklage): T€ 16.834; retained earnings (Gewinnvortrag; Jahresüberschuss): T€
14
5
.
1
6
0
; currency value adjustments (Ausgleichsposten aus Währungsumrechnung): T€
-
3.685
]. In the event and for the time the equity of Borrower (on Modine Holding GmbH – Group level) falls below € 13
0
.0
0
0.
0
0
0,
-
-
any direct or indirect distribution of retained earnings or prof- its to the parent company shall be suspended.
|
IV.
|
We have taken notice of and approved the Credit Facility Agreement of Modine Holding GmbH and Modine Europe GmbH dated
27
.
04
.
20
1
2
and commit ourselves
,
not to make resolutions and not to give any instructions to the borrower, which might cause a breach of this agreement.
|
V
.
|
We confirm
,
that the entry into this Commitment and performance by it, and the transac- tions contemplated by it
,
do not and will not conflict with (i) any law or regulation applica- ble to it, (ii) our or any of our subsidiaries´constitutional documents or (iii) any of our agreements or instruments binding upon it or any Modine company of the Modine Holding GmbH – Group or any of the Modine Holding GmbH – Group`s assets.
|
|
In
the event of any conflict between the English text and the text in any other language, the Eng- lish text shall prevail, except that where a German translation of a legal term appears in such text, the German translation shall prevail
.
|
|
This
Agreement shall be governed by and construed in accordance with the laws of the Federal
Republic of Germany
.
|
|
Modine
Manufacturing Company hereby irrevocably appoints Modine Holding GmbH, Filderstadt, Germany,as its agent for service of process or other legal summons in connection with any action or proceedings in Germany arising under this Commitment. Modine Manufacturing Company irre- vocably waives any objection which it may now or hereafter have that such proceedings have been brought in an inconvenient forum
.
The place of jurisdiction for all Parties shall be Stuttgart.
|
Modine Manufacturing Company | |
25 April 2012 | /s/ Michael B. Lucareli |
Full name of Grantee:
|
«Name»
|
|
Date of Award:
|
June 5, 2012
|
|
Target number
of Common Stock:
|
«Grant»
|
|
Performance Period:
|
April 1, 2012 to March 31, 2015
|
Performance Goal: ROACE
|
Performance Stock Award Earned Based on
Achievement of Performance Goal
|
|
Threshold: 8.0%
|
12.5% of Target number of Common Stock
|
|
Target: 11.0%
|
50% of Target number of Common Stock
|
|
Maximum: ≥14.0%
|
100% of Target number of Common Stock
|
Performance Goal: Cumulative Revenue
|
Performance Stock Award Earned Based on
Achievement of Performance Goal
|
|
Threshold: $5,200 million
|
6.25% of Target number of Common Stock
|
|
Target: $5,400 million
|
25% of Target number of Common Stock
|
|
Maximum: ≥$5,625 million
|
50% of Target number of Common Stock
|
Performance Goal: European ROACE
|
Performance Stock Award Earned Based on Achievement of Performance Goal
|
|
Target: ≥15.0%
|
25% of Target number of Common Stock
|
MODINE MANUFACTURING COMPANY
|
||
By:
|
/s/ Thomas A. Burke
|
|
Thomas A. Burke
|
||
President and Chief Executive Officer
|
«Name»
|
Full name of Grantee:
|
«Name»
|
Date of Award:
|
June 5, 2012
|
Exercise price per share:
|
$«Price»
|
Total number of shares:
|
«Grant»
|
Total exercise price:
|
$«ttl_Exercise_price»
|
Number of Shares of Common Stock
|
Vesting Date
|
|
25% of the total number of shares
|
Date of Award
|
|
25% of the total number of shares
|
June 5, 2013
|
|
25% of the total number of shares
|
June 5, 2014
|
|
25% of the total number of shares
|
June 5, 2015
|
|
(a)
|
If you are an executive officer of the Company subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934, the Option may not be exercised by you within six (6) months after the Grant Date; and
|
|
(b)
|
The Option may only be exercised, at any one time, exclusively in multiples of twenty-five (25) shares with a one hundred (100) share exercise minimum, except for the purchase of all shares then remaining subject to these options.
|
MODINE MANUFACTURING COMPANY
|
||
By:
|
/s/ Thomas A. Burke
|
|
Thomas A. Burke
|
||
President and Chief Executive Officer
|
«Name»
|
Full name of Grantee:
|
«Name»
|
|
Date of Award:
|
June 5, 2012
|
|
Total number of
|
||
Shares of Common Stock:
|
«Grant»
|
Number of Shares of Common Stock
|
Restricted Period Expiration
|
25% of the total number of shares
|
June 5, 2013
|
25% of the total number of shares
|
June 5, 2014
|
25% of the total number of shares
|
June 5, 2015
|
25% of the total number of shares
|
June 5, 2016
|
MODINE MANUFACTURING COMPANY
|
||
By:
|
/s/ Thomas A. Burke
|
|
Thomas A. Burke
|
||
President and Chief Executive Officer
|
«Name»
|
Full name of Grantee:
|
«Name»
|
|
Date of Award:
|
June 5, 2012
|
|
Exercise price per share:
|
$«Price»
|
|
Total number of shares:
|
«Grant»
|
|
Total exercise price:
|
$«ttl_Exercise_price»
|
|
(a)
|
Because you are an executive officer of the Company subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934, the Option may not be exercised by you within six (6) months after the Grant Date; and
|
|
(b)
|
The Option may only be exercised, at any one time, exclusively in multiples of twenty-five (25) shares with a one hundred (100) share exercise minimum, except for the purchase of all shares then remaining subject to these options.
|
MODINE MANUFACTURING COMPANY | ||
By:
|
/s/ Thomas A. Burke | |
Thomas A. Burke | ||
President and Chief Executive Officer |
«Name»
|
Subsidiaries
|
State or country
of incorporation
or organization
|
% of voting
securities
|
Owned by
|
|
Modine, Inc.
|
Delaware
|
100 % |
Registrant
|
|
Modine ECD, Inc.
|
Pennsylvania
|
100 % |
Registrant
|
|
Modine Holding GmbH
|
Germany
|
100 % |
Registrant
|
|
Modine Jackson, Inc.
|
Delaware
|
100 % |
Registrant
|
|
Modine Japan K.K.
|
Japan
|
100 % |
Registrant
|
|
Modine Thermal Systems Korea, LLC
|
Korea
|
100 % |
Registrant
|
|
Modine Manufacturing Company Foundation, Inc.
|
Wisconsin
|
100 % |
Registrant
|
|
Modine Thermal Systems (Changzhou) Company Ltd. | China | 100 % | Registrant | |
Modine Thermal Systems (Shanghai) Company Ltd.
|
China
|
100 % |
Registrant
|
|
Modine Thermal Systems Private Limited
|
India
|
99 % |
Registrant (1)
|
|
Modine UK Dollar Limited
|
UK
|
100 % |
Registrant
|
|
Airedale International Air Conditioning Limited
|
UK
|
100 % |
Modine UK Dollar Limited
|
|
Airedale Group Limited
|
UK
|
100 % |
Airedale International Air Conditioning Limited
|
|
Airedale Sheet Metal Limited
|
UK
|
100 % |
Airedale International Air Conditioning Limited
|
|
Airedale Compact Systems Limited
|
UK
|
100 % |
Airedale International Air Conditioning Limited
|
|
AIAC Air Conditioning SA (Pty) Limited
|
South Africa
|
100 % |
Airedale International Air Conditioning Limited
|
|
Modine LLC
|
Delaware
|
100 % |
Modine, Inc.
|
|
Modine do Brasil Sistemas Termicos Ltda.
|
Brazil
|
99.9 % |
Modine, Inc. (2)
|
|
Modine Transferencia de Calor, S.A. de C.V.
|
Mexico
|
99.6 % |
Modine, Inc. (2)
|
|
Modine Austria Holding GmbH
|
Austria
|
100 % |
Modine Holding GmbH
|
|
Modine Austria Ges.m.b.H.
|
Austria
|
100 % |
Modine Austria Holding GmbH
|
|
Modine Austria Immobilien GmbH
|
Austria
|
100 % |
Modine Austria Ges.m.b.H.
|
|
Thermacore Korea, Ltd.
|
Korea
|
100 % |
Modine ECD, Inc.
|
|
Modine Pliezhausen GmbH
|
Germany
|
100 % |
Modine Holding GmbH
|
|
Modine Europe GmbH
|
Germany
|
100 % |
Modine Holding GmbH
|
|
Modine RUS Limited Liability Company
|
Russia
|
99 % |
Modine Holding GmbH (3)
|
|
Modine Grundstucksverwaltungs GmbH
|
Germany
|
100 % |
Modine Holding GmbH
|
|
Modine Kirchentellinsfurt GmbH
|
Germany
|
100 % |
Modine Holding GmbH
|
|
Modine Wackersdorf GmbH
|
Germany
|
100 % |
Modine Holding GmbH
|
|
Modine Neuenkirchen GmbH
|
Germany
|
100 % |
Modine Holding GmbH
|
|
Modine Hungaria Gep. Kft.
|
Hungary
|
99 % |
Modine Holding GmbH (3)
|
|
Modine Pontevico S.r.l.
|
Italy
|
100 % |
Modine Holding GmbH
|
|
Modine Uden B.V.
|
Netherlands
|
100 % |
Modine Holding GmbH
|
(1)
|
Balance of voting securities held by Modine, Inc.
|
(2)
|
Balance of voting securities held by the Registrant
|
(3)
|
Balance of voting securities held by Modine Europe GmbH
|
|
1.
|
I have reviewed this annual report on Form 10-K of Modine Manufacturing Company for the fiscal year ended March 31, 2012;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: June 14, 2012 | |||
/s/Thomas. A Burke
|
|||
Thomas A. Burke
|
|||
President and Chief Executive Officer
|
|
1.
|
I have reviewed this annual report on Form 10-K of Modine Manufacturing Company for the fiscal year ended March 31, 2012;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: June 14, 2012 | ||
/s/Michael B. Lucareli
|
||
Michael B. Lucareli
|
||
Vice President, Finance and Chief Financial Officer
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: June 14, 2012 | |||
/s/Thomas. A Burke
|
|||
Thomas A. Burke
|
|||
President and Chief Executive Officer
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
June 14, 2012
|
/s/Michael B. Lucareli
|
||
Michael B. Lucareli
|
||
Vice President, Finance and Chief Financial Officert
|