Good day ladies and gentlemen and welcome to the Modine Manufacturing Company Quarter One 2014 Earnings Call Presentation. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session with instructions to be given at that time. (Operator Instructions) As a reminder today’s call is being recorded. And now, I would like to turn the conference over to your host for today Ms. Kathy Powers, Vice President, Treasurer and Investor Relations. Ma’am you may begin.

Thank you. Thank you for joining us today for Modine’s first quarter fiscal 2014 earnings call. With me today are Modine’s President and CEO, Tom Burke; and Michael Lucareli, our Vice President, Finance, and Chief Financial Officer. We will be using slides for today’s presentation. Those slides are available through both the webcast link as well as a PDF file posted on the Investor Relations section of our company website, modine.com. Also should you need to exit the call prior to its conclusion, a replay will be available through our website beginning approximately two hours after the call concludes. On Slide 2, is an outline for today’s call. Tom and Mick will provide comments on our first quarter results and provide updated revenue and earnings guidance for fiscal 2014. At the end of the call there will be a question-and-answer session. On Slide 3, is our notice regarding forward-looking statements. I want to remind you that this call may contain forward-looking statements, as outlined in today’s earnings release, as well in our company’s filings with the Securities and Exchange Commission. With that, it’s my pleasure to turn the call over to Tom Burke.

Thank you, Kathy and good morning everyone. I’m pleased to report that Modine started fiscal 2014 with a strong quarter with both revenue and earnings improvements. We delivered adjusted earnings per share for the quarter of $0.27, up $0.20 from the prior year. Our revenues were up 7.2% with year-over-year sales increases in our Europe, South America, Asia in Building HVAC businesses. As expected market conditions in South America and Asia are improving and we’re also beginning to see higher volumes in our commercial vehicle programs in Europe. That being said, we remain cautious about the commercial vehicle markets in North America and Europe and believe these markets will remain challenged for the remainder of the fiscal year. Mick will provide some more details on the financial results in a few minutes, but first I would like to comment briefly on our segment results and outlook. Turning to Page 6, revenue was down 3.2% in the North American segment primarily driven by continued weakness of off-highway markets. Sales to commercial vehicle customers were flat with a slight increase in mediums offset by decrease in heavies as compared to a strong quater last year. However sale to automative customer were up versus the prior year. Looking forward we expect mixed market conditions in North America to continue fiscal 2014. We expect heavy truck production to decline about 5%. Medium truck to increase 5% to 10% in the broad overall, off-highway markets to grow 5% versus the last year. I want to remind our shareholders that we mostly participate in the heavy segments of the off-highway markets which will not see this level of growth for this year. Please turn the Page 7. Our Europe segments year-over-year sales were up nearly 17% in the first quarter, driven by higher sales of products…

Thanks, Tom and good morning everyone. Please turn to Slide 12 and I’ll review the income statement. As Tom mentioned, we had a very strong quarter with a 7% increase in sales. This was driven by volume increases in four of our five business segments, with the largest impact in Europe. Also during the quarter, we recorded $2.7 million of charges as a part of our European restructuring program. Of this amount $500,000 or $0.5 million was recorded as restructuring expense primarily related to severance costs, $2.2 million was recorded in cost of sales relating to accelerated depreciation of production equipment that we plan to phase out over the next several months. As reported, the gross margin increased 180 basis points to 16.5%. Excluding the accelerated depreciation, the gross margin improved to 240 basis points to 17.1%. The improvement was primarily due to higher sales volume and favorable material costs during the quarter. To keep in mind, however, that we have material passthrough agreements with most of our customers. In many cases, we will be adjusting our prices down or to pass along this benefit. The SG&A expenses favorable this quarter with an $800,000 decrease, SG&A as a percentage of sales improved a 100 basis points to 11 3%. This improvement resulted from the restructuring activities completed last year in Europe, along with lower professional fees. Income taxes increased $2.9 million year-over-year, resulting in effective tax rate of approximately 32%. And excluding restructuring charges and the accelerated depreciation, adjusted earnings per share was $0.27 for the quarter, exceeding the prior year by $0.20. Turning to Slide 13, free cash flow was positive at $5.7 million in the quarter. This was driven by the combination of higher operating cash flow and lower capital spending. Q1 actually represents a $12.6 million year-over-year…

Thanks, Mick. Please turn to Page 18. As I mentioned, it is great to see fiscal 2014 after such a strong start. We anticipated that our markets would start improving this year and are encouraged to see the positive impact to this initial recovery of our results. In addition to the market improvement, we’re also benefiting from our significantly improved cost structure, favorable material cost, high volume and content of our commercial vehicle programs in Europe. On the risk side, we’re forecasting continued weakness in the heavy duty commercial vehicle markets in North America and Europe. And in addition, as Mick mentioned our customer material pass through agreements will begin to somewhat neutralize the benefit of our lower material cost we have realized, as we share this with our customers. And finally, challenges to mainly in Europe, as we finalize the restructuring and begin to ramp up the volume of our new commercial truck programs. Overall, I’m very pleased with the performance of our segments. Our teams are effectively executing their plans. With our improved performance in cash generation, we’re currently evaluating new opportunities to accelerate growth in our current as well as in and adjacent markets. And with that, we would like to take your questions.

(Operator Instructions) Our first question today comes from the line of David Leiker of Robert W. Baird. Your line is open. Please go ahead. David Leiker – Robert W. Baird: Good morning everyone.

Good morning, David.

Hey David. David Leiker – Robert W. Baird: A Couple of things that on it, dictated, Mick, if we can start with the tooling revenues. Is there a way you can quantify the size of that and then talk a little bit about that economics of that and how it impacts profit margins?

Yeah. I’ll tell you what David, while we are on the Q&A here. I’ll see if I can actually dig out the actual tooling revenue for you, we are happy to share that. As far as the economics go, generally it shows up in revenue and the cost show up and cost-to-sales, but it’s not of big margin impact, it can vary a little bit but generally, it’s a, more of a pass through item. I would say on average our mark ups on tooling can be 5% to 15% maybe with a 10% average. The customers allow us to market up a little bit obviously for the process of designing, developing, qualifying, ordering the tooling, the bigger issue, is it can sometimes skew the top line results and depending on the size at times it can adjust gross margin a little. David Leiker – Robert W. Baird: Is this reimbursement from your customers are tooling you’re putting in place?

Correct, its customer tooling. David Leiker – Robert W. Baird: Okay. Great and then on Europe, I understand the Europe fixed piece of it, I didn’t think you had a lot of exposure to pre-buy on that. Put some color in terms of just in there?

Clearly on the radiator side which you guys have been talking about – we have about 10% to 12% market share currently. But we have other components to go in such as oil coolers and other products that come out of our Hungary facility that were in that business as well and we’ve seen with pre-buy effect we’ve seen some net increase of business other than sales with that. David Leiker – Robert W. Baird: Okay. That’s great. And then on the gross margin, what are the things that we are seeing that other companies entered the June quarter with a cautious view on the markets, we clearly saw some upside in production during the quarter and trade better contribution margin than normal. Is that it seems like the same type of thing that you experienced here?

In the current quarter David or you talking about in on the quarter we just closed? David Leiker – Robert W. Baird: From the June quarter.

Yes I would agree David Leiker – Robert W. Baird: Okay. I will come back with some other ones. Thanks.

Thanks.

Thank you. (Operator Instructions) Our next question comes from the line of Ann Duignan, your line is open. Please go ahead. Mike Shlisky – JPMorgan: Good morning it’s Mike Shlisky filling in for Ann.

Hey Mike. Mike Shlisky – JPMorgan: Just wanted to quickly dive into some of the upside you guys saw from raw materials. During the quarter, I know some of it will be given back in future quarters. But can you tell us, which raw materials where the source of the upside during the quarter? And maybe give some a bit about how you’re buying works? Do you have contracts? Do you have to go into the spot market to price the raw materials for each product?

Yeah, the largest impact for Modine by far is aluminum, and then next inline would be copper and stainless steel. It depends on the supplier and the supply base, but generally we’ve got about probably a 60 to 90 day order in visibility I would say to our costs. By the time, we order it, it’s delivered and flows through our facilities. Generally, it’s about 60 to 90 days out as we have a pretty good view of the material costs that will be paying. So as we say, the end of June, we’ve got a really pretty good visibility into the September quarter of our costs. Then what happens is we passthrough. We adjust with our customer surprises for changes in the spot market, either every quarter to every six months and in some cases with a few customers once a year. So what we wanted to make sure, we pointed out Q1 here as we actually had some nice tailwinds for once. You’ve certainly heard from us enough or it’s worked against us. But metals have continued to hold flat and actually come down as our prices have held with our customs. They spend some tailwind. But as we move through the year, now that aluminum is leveled off that will start to level off and better match the pricing in our cost of sales. Mike Shlisky – JPMorgan: Okay, great. Switching over to your Europe, can you maybe give us a little bit of insight into how much more contents you'll be having in Euro 6 equals to Euro 5?

Yeah. We have kind of coming of the previous question, obviously more of our discussion has been revolving around the radiator launches that involved with the Euro 6 conversion, but I also a plan we have significant other content that is on Euro 5 it's also being carried over in some case in Euro 6 that would include water coolers, EGR coolers that are also new in some cases and other specialty components to go into that besides the radiator. So if you take the what was kind of the traditional baseline and had the radiator content and added EGR content we were picking up quite a bit of content with Euro 6 launches. Mike Shlisky – JPMorgan: Okay, great. And then one last one here just kind of continuing altogether you got restructuring going on in Europe, you got a changeover in the emission standard and actual thing is there are kind of transitioning in that region. Is there a date – excuse me may be tell us are you think you have everything kind of done and you can kind of go forward with a different cost structure and for Euro 6?

Yeah, this is the remainder of this fiscal year is going to be a lot of work, okay in Europe and that's why I made the points specifically. Let’s first talk about the launches, the launches on Euro 6 have been delayed and up coming on late so we are really going to see on the other side of the fiscal year – calendar year now and going kind of the slow ramp up through Q4 or Q1 of the next calendar year that's the ramp up rate into Euro 6 is registrations it cannot look whatever we expect the for Euro 5 trucks in Western Europe. So you will start seeing the big ramp up towards the end of Q4 fiscal year. As far as restructuring is concerned we really have had the pedal to the floor on getting that work done. We’re coming to the final stages, as I might remind our listeners that we are down to three remaining manufacturing facilities and we’ve consolidated administrative facilities from three separate buildings into one, and our tax centre, that’s also. That footprint change is – needs to keep moving and we by the end of this fiscal year we want to have that plan finalized and if whole financials taken care of, to demonstrate where we are going that you can get grounded on. And I’ll let Mick add to that.

Yeah. It’s the couple of things from the financial side on Europe and the progress. The SG&A is that run rate and the hard work is really done there. And as Tom laid out here, we’re at the final phases of consolidating and finishing our plant restructuring. Most of those severance cost are behind us. We’ll really start to see the benefit of some of the overhead absorption and benefit when volumes recover. So, I would we’re two thirds, three quarters away through the plant restructuring. And then the last piece that we still need to do a little bit of work on, is we had a goal to reduce the overall asset base in the regions and while Tom pointed, we’ve moved out of one headquarters and into a different facility. We’ve done some other things. We have some more work to do just with regards to assets consolidation that our plan would be to get that done this fiscal year. So, my view is, we would be really well set up heading into the new fiscal year and volume would be the item that would really accelerate or slow down the rate of earnings improvement that we would all see. Mike Shlisky – JPMorgan: Okay. And I guess that present, one more my follow-up then I guess, on my previous question which is, from a dollar perspective do you happen to know how much more you can expect on Euro 6 truck, versus a Euro 5 truck on your revenues?

From a concept perspective?

Yeah.

You’re looking at an average content per truck number. Mike. Mike Shlisky – JPMorgan: If you can give it, yeah.

Same I guess.

IT will I mean, yeah I mean obviously I would say that our average content by the time you add it EGR coolers, oil coolers, SDK coolers, fuel coolers, and alike, is obviously in the four figure number per average vehicle. And the number of vehicles that are going to be on is going to go up significantly from Euro 5 to Euro 6. So although I can’t give you an exact number, the average content and the volume are both going to go in the right direction.

And as far as pricing and the dollar per vehicle I would say and Tom unless you disagree I think it’ll be about the same as what we’ve seen.

Yeah.

Probably the biggest driver as Tom mentioned is our market share gain in the truck markets will be more a unit driver than a sales per unit. Mike Shlisky – JPMorgan: Okay great. I’ll hop back and thanks so much.

Thank you. Our next question is follow-up the line of David Leiker of Robert W. Baird. Your line is open, please go ahead. David Leiker – Robert W. Baird: Just a couple of ones to follow up here, on the commercial products group, I’ll talk about it sounds like you’ve got some pretty good end market drivers there, but doesn’t seem to be showing up on the marginal line. Can you talk about that a little bit?

Yeah good question David. We for the last, I would say, three, four quarters you’ve heard us talk about accelerating in the rate of growth in that business segment so that is required. Frankly, it was kind of a sleepy business at Modine and didn’t get the investments that it deserved. So for example, when the Company was spending, the time when we were spending $80 to $100 million of CapEx, we maybe spent $3 million of capital in that segment. We’ve had to increase our spending a little bit. We bought the Geofinity business. We’ve come out with some new product line and we’ve to hire engineers and people to develop these products, our new ventilation rooftop system. And so right now, we’re at the front end of that curve. So what you’re seeing is we’ve got a short-term increase in our cost, while we’re ramping up. Now the product development is basically behind us. Now we’re starting the ramp up to sales of those new products and we should start to see that come through in earnings, David. David Leiker – Robert W. Baird: Do you think you can get back for that 10% margin, you had in the past?

Yeah, absolutely.

Definitely. David Leiker – Robert W. Baird: So is that what’s the timeline on that 12 months, 18, 24?

I would say as we look out and obviously this quarter is always hard, because historically in Q1, it’s right between all their seasons. It’s always nearly kind of a break-even quarter. But as we go through the year, we expect to get back to closer to the 10% operating range certainly by Q3 and Q4, in that range. We’ll probably end the year a little bit below that, but we’ll clearly improve sequentially as we go through the year here. David Leiker – Robert W. Baird: Okay, great. And then similar question on the North America business, you’ve got really nice margins there. I think no, it’s probably the highest in a longtime, cost sustainable is that and you think that moves one way to the other? I’m sure materials are going to play role in this.

Yeah I can take the first stab on that the Tom add anything I think we would be the first one’s to tell you that 17% gross margin, we all are really happy with it, it scares us a little bit and I think we can sustain that 16% to 18% up and down depending on volumes and metals, but no I think its probably going to hover in call it the 16% range. We had some nice tailwinds behind us, and certainly there will be quarters or periods as you know where the truck markets and other end markets will be going crazy and we will just have some leverage from a fixed cost this quarter obviously with volume down and margin are up, this was a little bit also the tailwind of metal. So your are right, it’s probably little lower than that on a long-term basis. Tom did you want to?

No I would agree with Mick and we’ve got great operating leverage in North America with the restructuring complete, the team has proven it, they will convert on top line sales so, the focus on productivity and plants through the Modine production system is delivering result, so that low material cost has definitely been little sugar high, that we’ve been enjoying here this last quarter. David Leiker – Robert W. Baird: That’s at theoretically 12 months from now when we are through the launches in Europe and the restructuring is done, you see a similar type of move in that European segment?

Yes

Yeah we were targeting getting above 15% as our first step and you know as said without that accelerate depreciation in the quarterly we are about 14.7 a so little bit more room to go and then that will be the volume that we need in Europe to save a higher asset base in North America. David Leiker – Robert W. Baird: And then the last item here is it on China, it looks like given the numbers that you got your break-even on the $70 million which I think is lower than we’ve targeted there. That come down lower is there something else there that's helping?

Well, we’ve got great attention in that region and they’re working hard to manage both the cost side but more importantly or as importantly obviously the growth side and I which I wanted to mention is 50 launches that are coming through the pipeline now. So we are clearly going to blow through that break-even point over the next 12 months as the launches come into play. And coming out of this fiscal year and into next fiscal year. So yeah probably 85% is I think what we’ve said before is a break-even point and I would say we’re probably below that. We are probably a little conservative on that but it's by doing a great job over there.

But I would agree David. I think we’ll watch it’s as we finally get the volume coming through, we have our predicted margins, we have it all modeled out and this was – I was really happy to see the margin this quarter. We would like to see a few more quarters to right now I think we'll hold to that 85% range but I see your math and I think a couple of more quarters if we see sustainability, we will come back and address that. David Leiker – Robert W. Baird: And then the sales increase here, I understand Korea is a bigger part of it than China. Is that market-driven or is that organic growth?

Most of that in the current quarter was market driven, we saw some really good volumes with Volvo and HHI and I think a lot of that was on excavators that were actually in other construction equipment being shipped to Southeast Asia. David Leiker – Robert W. Baird: Okay. And then Tom since you open the door on the 50 programs, you put any kind of frame around the revenue opportunity that those have in the timing for it?

Right now, couple to say that we are going to very much exceed our break-even point going into next fiscal year with those launches. I mean that’s probably as far as I want to go right now, but it’s significant business. We’re very pleased and we’re looking forward to a very good solid fiscal year in the Asia region next year. David Leiker – Robert W. Baird: Okay, great.

David? David Leiker – Robert W. Baird: Yeah.

David, if it helps to we’ve got a real hard push while we want to get to break-even at the 80, 85 range. We’ve got a hard push to get to $100 million range and there was a little bit of market growth we see that even more on all of these program launches and an other nice thing is they are on a different product and oil cooler that also gets to set in more diversified in automotive that gives us a lot of confidence in visibility to this kind of get to those segment to the $100 million range. David Leiker – Robert W. Baird: Okay, great. Thank you very much.

One thing just fall from the call David asked about tooling, year-over-year tooling was up about $3 million of the $25 million. So a little piece in there, but not a significant driver and not a material to the earnings that all of the Company. David Leiker – Robert W. Baird: Okay, it’s great. Thank you.

Thank you. And we have no further in queue. I’d like to turn the call back over to Ms. Powers, for any closing remarks.

Thank you. This concludes today’s call. Thank you for joining us this morning and thanks for your interest in Modine. Good bye.

Ladies and gentlemen, thank you for your participation in today’s conference. This does concludes the program and you may all disconnect. Have a great rest of the day.