Engineering a Cleaner, Healthier World - Financial Overview
Non-GAAP Reconciliations
(a) Restructuring expenses primarily consist of employee severance expenses related to targeted headcount reductions and plant
consolidation activities and equipment transfer costs.
(b) The net impairment reversals during fiscal 2022 primarily relate to the Company's liquid-cooled automotive business. During the third
quarter of fiscal 2022, the Company and the prospective buyer terminated an agreement for the sale of the business and the Company
remeasured its previously impaired long-lived assets to the lower of (i) carrying value, had held for sale classification never been met, or
(ii) fair value. As a result, the Company recorded a $57.2 million impairment reversal. This impairment reversal was partially offset by other
net impairment charges related to assets held for sale. The fiscal 2021 impairment charges also primarily related to the liquid-cooled
automotive business in connection with it being classified as held for sale in fiscal 2021. During fiscal 2020, the Company recorded asset
impairment charges totaling $8.6 million, primarily related to manufacturing facilities in Austria and Germany.
(c) The Company's sale of its air-cooled automotive business in Austria closed on April 30, 2021. As a result of the sale, the Company
recorded a $6.6 million loss on sale at Corporate during the first quarter of fiscal 2022. During fiscal 2020, the Company sold a previously-
closed manufacturing facility in Germany and, as a result, recorded a gain of $0.8 million.
(d) Strategic reorganization costs, recorded as SG&A expenses at Corporate, primarily consist of severance-related expenses and
professional service fees for recruiting key senior management positions and the Company's implementation of 80/20. The fiscal 2022
costs include recruiting fees for new segment vice presidents and business unit general managers and severance-related expenses for
the outgoing executives as part of the transition. The fiscal 2021 costs include severance and benefit-related expenses associated with
our previous CEO's separation agreement and costs directly associated with the search for his successor.
(e) Automotive separation and exit strategy costs consist of costs directly associated with the Company's review of strategic alternatives for
its automotive businesses, including costs to prepare the businesses for sale. These costs were recorded at Corporate and are primarily
related to accounting, legal, and IT professional services.
(f) Environmental charges, including related legal costs, are recorded as SG&A expenses and relate to previously-owned U.S.
manufacturing facilities.
MODINE
Engineering a Cleaner, Healthier World
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