Modine Manufacturing Company

Modine Manufacturing runs hot and cold but not when it comes to the products it makes for vehicles. Founded in 1916, the company designs and makes highly engineered heating and cooling systems and components for a range of customers worldwide: automotive OEMs, agricultural and construction OEMs, heating and cooling equipment OEMs, construction contractors, wholesalers of plumbing and heating equipment, and fuel cell manufacturers. Products include heat transfer modules, oil coolers, radiators, and vehicular air conditioning systems. With operations in some 14 countries and technical centers in the US and Germany, more than half of Modine's revenues are generated outside of the US.

Geographic Reach

Modine maintains a geographic presence in Austria, Brazil, China, Germany, Hungary, India, Japan, Mexico, the Netherland, South Africa, South Korea, the US. After the US (42% of total sales), Germany generates 18% of total sales, while Brazil brings in 11%.

Sales and Marketing

Modine serves 10 main customers that generate 61% of its total revenue. These include such big names as BMW, Caterpillar, Daimler, Deere & Company, Denso Corporation, Ford Motor, MAN Truck, Navistar, Volkswagen, and Volvo.

Financial Analysis

Following an economic downturn and devastating declines in automotive production in North America and Europe, Modine has seen significant growth over the last few years. From 2011 to 2012 its total sales increased by 9% and its profits skyrocketed from around $5 million to $38.5 million. It attributes this overall growth to a 19% jump in medium and heavy duty truck sales in addition to a 13% spike in agriculture and constructions sales volumes across all markets.

Modine also enjoyed a 10% revenue gain in its Original Equipment - Europe segment in fiscal 2012 compared with fiscal 2011. This was primarily due to an uptick in sales within the commercial vehicle, agriculture, and construction markets and favorable foreign currency exchange rate changes.

Strategy

Modine's strategy for improved profitability includes diversifying its markets and customer base, as well as partnering with customers in the development of new products and technologies. To expand its customer base Modine acquired Canada-based Geofinity Manufacturing in 2012. The acquisition expanded Modine's geothermal heat pump product business from the school market into the residential sector.

In 2011 Modine and OneGene Inc. established a joint venture to develop and manufacture powertrain cooling modules and components for the South Korea off-highway equipment market. The joint venture, named Modine OneGene Corp, benefits from Modine's technology and product designs and OneGene's manufacturing presence in Korea.