Modine Announces Amendment To Credit Agreements

Amendments ensure ongoing liquidity through financial covenant flexibility during the COVID-19 crisis and resulting economic uncertainty
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RACINE, Wis., May 20, 2020 /PRNewswire/ -- Modine Manufacturing Company (MOD) - Get Report, a diversified global leader in thermal management technology and solutions, today announced that it has amended its existing credit agreements to provide covenant flexibility through fiscal 2022.

Key Amendment Highlights:

  • Raises the leverage ratio covenant limit for the next two fiscal years, ending in the fourth quarter of fiscal 2022
  • Provides additional flexibility to execute automotive exit strategy
  • Includes higher interest rates on borrowings during period of covenant flexibility and 1 percent LIBOR floor

"While Modine maintains a relatively strong balance sheet and a diversified business portfolio, we wanted to proactively protect our liquidity by ensuring we have maximum flexibility during this period of heightened uncertainty," said Modine Vice President, Finance and Chief Financial Officer, Michael B. Lucareli.  "We value our relationships with our lenders and believe that these amendments to our credit agreements provide us with the flexibility to strategically manage the business through this pandemic and position us well for when our markets recover.  We appreciate the strong support of our liquidity partners as we navigate through this global crisis and continue to work towards the strategic exit of our automotive business."

The Company will hold its fourth quarter fiscal 2020 earnings call on May 29, 2020, and will further discuss these amendments and provide a more detailed update at that time.

About Modine

Modine, with fiscal 2019 revenues of $2.2 billion, specializes in thermal management systems and components, bringing highly engineered heating and cooling components, original equipment products, and systems to diversified global markets through its three complementary segments: VTS; CIS; and BHVAC. Modine is a global company headquartered in Racine, Wisconsin (USA), with operations in North America, South America, Europe and Asia. For more information about Modine, visit www.modine.com.

Forwar d-Looking Statements

This press release contains statements, including information about future financial performance and market conditions, accompanied by phrases such as "believes," "estimates," "expects," "plans," "anticipates," "intends," and other similar "forward-looking" statements, as defined in the Private Securities Litigation Reform Act of 1995. Modine's actual results, performance or achievements may differ materially from those expressed or implied in these statements because of certain risks and uncertainties, including, but not limited to those described under "Risk Factors" in Item 1A of Part I of the Company's Annual Report on Form 10-K for the year ended March 31, 2019 and under Forward-Looking Statements in Item 7 of Part II of that same report, and in the Company's Quarterly Report on Form 10-Q for the quarters ended June 30, 2019, September 30, 2019, and December 31, 2019.  Other risks and uncertainties include, but are not limited to, the following: the impact of the COVID-19 pandemic on the national and global economy, our business, suppliers, customers, and employees; the overall health and price-down focus of Modine's customers; our ability to successfully execute our strategic and operational plans, including our ability to successfully exit the automotive business within the VTS segment; our ability to effectively and efficiently reduce our cost structure in response to sales volume declines and complete restructuring activities and realize benefits thereon; our ability to comply with the financial covenants in our credit agreements and to fund our global liquidity requirements efficiently, particularly in light of the significant volatility and negative impacts to the financial markets resulting from COVID-19; operational inefficiencies as a result of program launches, unexpected volume increases, product transfers, and delays or inefficiencies resulting from restrictions imposed in response to the COVID-19 pandemic; economic, social and political conditions, changes and challenges in the markets where Modine operates and competes, including foreign currency exchange rate fluctuations, tariffs (and potential trade war impacts resulting from tariffs or retaliatory actions), inflation, changes in interest rates or tightening of the credit markets, recession, restrictions associated with importing and exporting and foreign ownership, public health crises, and the general uncertainties about the impact of regulatory and/or policy changes, including those related to tax and trade, the COVID-19 pandemic and other matters, that have been or may be implemented in the U.S. or abroad, and continuing uncertainty regarding the impacts of "Brexit"; the impact on Modine of any significant increases in commodity prices, particularly aluminum, copper, steel and stainless steel (nickel) and other purchased component inventory, and our ability to adjust product pricing in response to any such increases; the nature of and Modine's significant exposure to the vehicular industry and the dependence of this industry on the health of the economy; the concentration of sales within our CIS segment attributed to one customer; Modine's ability to recruit and maintain talent in managerial, leadership, and administrative functions; Modine's ability to protect its proprietary information and intellectual property from theft or attack; the impact of any substantial disruption or material breach of our information technology systems; costs and other effects of environmental investigation, remediation or litigation; and other risks and uncertainties identified by the Company in public filings with the U.S. Securities and Exchange Commission.  Forward-looking statements are as of the date of this release, and the Company does not assume any obligation to update any forward-looking statements.

Kathleen Powers(262) 636-1687 kathleen.t.powers@modine.com

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SOURCE Modine Manufacturing Company