Modine Manufacturing Company (NYSE:MOD) Q1 2021 Earnings Conference Call - Final Transcript

Aug 05, 2020 • 09:00 am ET


Modine Manufacturing Company (NYSE:MOD) Q1 2021 Earnings Conference Call - Final Transcript


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Good morning, ladies and gentlemen, and welcome to Modine Manufacturing Company's First Quarter Fiscal 2021 Earnings Conference Call. [Operator Instructions] [Operator Instructions]

I would now like to turn the conference over to your host, Ms. Kathy Powers, Vice President, Treasury, Investor Relations and Tax. Please go ahead, madam.

Kathleen T. Powers

Good morning, and thank you for joining our conference call to discuss Modine's first quarter fiscal 2021 results. I am here with Vice President, Finance and Chief Financial Officer, Mick Lucareli. Last night, we issued a press release announcing a CEO transition plan which included the announcement that Mick has also been named Interim President and Chief Executive Officer effective immediately while the Board conducts a search for a permanent CEO. The Board is very thankful for the more than 12 years that Tom Burke served as President and CEO, and he will remain with the company in an advisory role until August 28, 2020, to ensure a smooth transition.

The Board decided that this was the right time to make a leadership change and is committed to finding the right leaders that will execute our industrial strategy and accelerate Modine's future growth. We remain committed to our current strategy, including the exit of the automotive business. The Board is confident that Mick and the rest of our senior leadership team will continue to execute against our strategic vision until that leader is in place. We will not provide any further details about the transition on this call but we will certainly provide updates as the search progresses. Now moving on to the quarter.

We will be using slides for today's presentation, which can be accessed either through the webcast link or by accessing the PDF file posted on the Investor Relations section of our website, On slide two is our notice regarding forward-looking statements. This call may contain forward-looking statements as outlined in our earnings release as well as in our company's filings with the Securities and Exchange Commission.

With that, it is my pleasure to turn the call over to Mick Lucareli.

Michael B. Lucareli

Thank you, Kathy, and good morning, everyone. Although it was a challenging quarter, Q1 revenue and earnings were in line with our expectations, and the positive free cash flow was better than anticipated. From an operational standpoint, all plants have been opened since late May, but most are running at reduced capacity. All locations are following strict measures to protect our employees' health and safety including social distancing, wearing face masks and following enhanced sanitation protocols. Also during this downturn, we're evaluating ways to improve our manufacturing efficiency.

As a result, we made progress on several important operational initiatives during the quarter. The most important of which was the consolidation of the CIS manufacturing footprint in China. We expect this to be complete in September and provide immediate cost savings while still providing sufficient capacity for growth in the region. Another priority is tightly managing our capex spend as part of efforts to maintain positive cash flow. Capital