Good day ladies and gentlemen and welcome to the Modine Manufacturing Company quarter two 2014 earnings call presentation. At this time all participants are in a listen only mode. Later we will conduct a question and answer session and instructions will at that time. (Operator instructions). As a reminder today’s conference call is being recorded. I would now like to introduce your host for today’s conference Ms. Kathy Powers, the Vice President, Treasurer and Investor Relations. Ms. Powers, please begin.

Thank you. And thank you for joining us today for Modine’s second quarter fiscal 2014 earnings call. With me today are Modine’s President and CEO, Tom Burke and Mick Lucareli, our Vice President, Finance and Chief Financial Officer. We will be using slides with today’s presentation. Those links 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 two is an outline for today’s call. Tom and Mick will provide comments on our second quarter results and review our revenue and earnings guidance for fiscal 2014. At the end, there will be a question-and-answer session. On slide three 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 as in our company’s filings with the Securities and Exchange Commission. With that, it is my pleasure to turn the call over to Tom Burke.

Thank you, Kathy, and good morning everyone. I’m pleased to report that Modine reported another solid quarter with improvements to revenue, earnings and cash flow. We delivered adjusted earnings per share for the quarter of $0.16, up 23% from the prior year. Our revenues were up 7% with year-over-year sales increases in all segments on a constant currency basis. Our outlook is consistent with the previous quarter with mixed markets resulting in flat to moderate growth in each of our segments. Mick will provide some more details in our financial results in a few minutes, but first, I would like to comment briefly on our segment results and outlook. Turning to page six, revenue was up 2% in the North America segment, with higher sales to commercial vehicle, automotive and specialty vehicle customers, offsetting the decrease to sales to off-high customers. The North American off-highway segment continues to be pressured by weak demand particularly for the heavy industrial equipment. Overall, given the offsetting revenues in these diverse markets, a $3.6 million increase in tooling sales primarily accounted for the revenue increased during the quarter. Looking forward, we expect mixed marketing conditions in North America to continue for the remainder of fiscal 2014. We expect heavy truck reduction to decline 5% to 10%, medium truck production to increase 5% to 10% and the off-highway markets to be flat to down 5% versus last year. We anticipated the heavy industry segment of the off-highway market in particular will be down year-over-year. We believe there is a potential for this portion of the off-highway market to further weaken in the second half of the year with particular weakness expected in our third quarter. As a result, we expect revenue for North America segment remain fairly flat for the balance of the year. Please…

Thanks Tom. Good morning everyone. Please turn to slide 12 and I’ll review the income statement. As Tom mentioned, we have another strong quarter with a 7% increase in sales. On a constant currency basis sales increased 6%. This was driven by volume increases in all five business segments with the largest impact in Europe. As reported the gross margin increased 20 basis points to 15.7%. Consistent with prior reports, we can only classify certain costs as restructuring shown in a separate line on the P&L. And then gross profit was negatively impacted by $2.1 million of accelerated depreciation of production equipment that’s been phased out in Europe. Excluding the accelerated depreciation, gross margin improved 80 basis points to 16.3%. This margin improvement was primarily due to higher sales volume and favorable material cost during the quarter. As expected, the impact to favorable material cost was less than we saw last quarter as we began passing on the lower cost to our customers. You could see the SG&A expense was higher than the prior year. Part of this is due to half a million of cost we incurred related to the U.K. fire. This amount relates to our insurance deductible and the write-off of lease hold improvements that we cannot recover. Also, we are accruing this year for higher incentive compensation expenses. And lastly, I want to point out that SG&A in the prior year benefited from a $2 million reversal of an acquisition related liability in our South America segment. Please note that during the quarter we recorded 600,000 on the structuring line primarily related to severance cost in Europe. Our GAAP earnings per share for the quarter was $0.10 and our adjusted earnings per share was $0.16. These adjustments include $0.05 for restructuring charges and accelerated depreciation in…

Yes, thanks, Mick. Can [ph] you turn to 18? As Mick said that we are pleased with the results of the second quarter and particularly I’m pleased with the free cash flow generation. Overall, most of our end markets continue to hold steady with flat to moderate growth. We clearly have some challenges in front of us, but we’re meeting them head on. Our Airedale business will be back up and running within the next month or so and our European team is aggressively addressing the inefficiencies that are impacting margins on our truck program launches in the region. As Mick mentioned, we are holding our guidance for the year despite these challenges. The first half of our fiscal year has been strong and we have clearly benefitted from favorable material costs and modest market improvements. In addition, we’ll continue to focus on growth opportunities such as expansion into Russia and the acquisition of Barkell in the United Kingdom. So with that, we’ll take your questions.

(Operator instructions) And the first question comes from Mike Shlisky of J.P. Morgan. Please go ahead. Michael Shlisky – J.P. Morgan: Good morning, everybody.

Hi, Mike.

Hi, Mike. Michael Shlisky – J.P. Morgan: Hey, I just wanted – about a quick question about the pre-buy in Europe. It looks like some OEMs have what looks to be pre-sell [ph] orders in Q3 which should be [indiscernible] in Q4 from mainly Euro 5 products. Do you have any sense as to just how much we could be seeing in projection in Europe in the fourth calendar quarter year? And if we see such a large increase in production, do you have the capacity to kind of meet that in a cost-effective way?

First, we agree with your timing. Look, I mean, our anticipation is that our Q3 or calendar fourth quarter is going to see the bulk of the pre-buy impact. We’ve got that pretty well studied. As I mentioned, it’s kind of a moving target since emerging [ph] actually within region by country and different ways of handling that. We definitely have the capacity and we’re going to [indiscernible] from it when we see that come up where we can. Michael Shlisky – J.P. Morgan: Great. And then the other question, and if I missed this, I apologize, but just about some of the Asia programs [ph] they have coming on here in fiscal ‘14. I just want to know how it’s going with, I think you said last time you had 50 different programs completed for relief this year. How is the ramp coming so far this year versus reputations?

Well, I just got my from Asia and Tom Marry, our COO and I were over there for their part [ph] of relief both in India and China and those launches were coming along very well. India has actually seen the early part of those launches with the programs both in like engine oil improved our business for automotive, power generation launches on stationary power, and some additional truck support going into India. China is lagging a little bit behind as far as the launch curve. They’re going to have some fourth quarter launches in the oil cooler business along with some truck launches. Our first commercial truck launch is launching also on the fourth quarter. So we’re just coming in to the heart of those launches, but we’ll really take most effect in the next fiscal year. Michael Shlisky – J.P. Morgan: Great, thanks. And just one last one here, and if I missed this, I apologize. In South America, what types of customers shut down or slowed their production during the quarter due to the unrest [ph] or other issues?

Yes. And what we saw was just disruptions and lucky they’re not really labor disputes but more or less logistical protests from some international type customers that we supply to which could be both truck and off-highway. Again, nothing prolonged but just some people that we took some down time and to get through the conditions. I think those are kind of are fading away and we anticipate those to be minimal over this next quarter. But there’s still some impact of that. But it’s just some temporary shutdown periods for a day or a shift and that type of thing that we felt through the last quarter. Michael Shlisky – J.P. Morgan: Got it, thank you. Thanks so much.

The next question is from David Leiker of Baird. Please go ahead. David Leiker – Baird Research: Good morning, everyone.

Good morning, David. David Leiker – Baird Research: Just a follow up here on Europe for a bit. How much of your Euro 6 new business are you in production on today?

Percentage wise, we were ramping up everything, okay? So just the ramp up is starting to really hit its full form right about now. And obviously, it’s going to peak in our next quarter, first quarter of calendar year ‘14. But I would say we’re over the 50% mark as far as our anticipated volumes right now with those launches as far as a ramp up. David Leiker – Baird Research: Got it. And do you have any indication in the first calendar quarter what your production rates look like? It seems like the majority of these orders that we’re getting out of Europe are Euro 5 orders. There’s not a whole lot of Euro 6 orders in the market yet.

Yes. It’s clearly Euro 5 is accelerated or are being, just let’s say, higher, okay. And it’s going to see that [ph] through this quarter, our third quarter. So I’d say we’re touching our anticipated halfway mark of our Euro 6 levels through this next quarter and we anticipate that to take full ramp up next year. How far they ramp up is the question, right? How much do we pull the head sales from Euro 6 into Euro 5 with this pull ahead is going to be the question. So what do they get to in Euro 6 levels in our fourth quarter after the mandate change is going to be the key question. David Leiker – Baird Research: And then you talk about some manufacturing issues [indiscernible] I think over in Europe. Is that on the Euro 6 product that you’re launching?

That’s on the Euro 6 product, yes. That’s a lot of the automation – highly automated lines that we put in. And again, we anticipated and reported over the last couple of quarters we’re working on this just getting it – tuned it and we’ve had to make some additional investment to get them stabilized. And we’ve got the stability now that we need and we’re fine tuning the, let’s say, the day to day operation efficiency which we need as a guide [ph]. But there’s going to be a few quarters before we get those where we want them. David Leiker – Baird Research: So it sounds like you’re having – I don’t know if the word difficult is – challenges in launching that business relative to what you thought it was going to get the manufacturing line. Is that fair?

That’s a fair statement. I do want to say, David, we are extremely happy with the product in the field. And as far as delivering to the customer what we need, we’re hitting every target. This is clearly internal efficiencies. It was – we made some big assumptions into this product line which we’re now adjusting to get those right. And we have all the right people and made the right adjustments already but it’s just going to take a while to get the, what I call, stability, okay, that constant repeatability of the line where it need to be. But I want to be honest, it’s going to take a few quarters to get there. David Leiker – Baird Research: How much impact does that have? I would imagine that lowers the returns on the business from when you originally booked it. How much of an impact?

Yes. It’s had an impact. I’ll let Mick answer that.

Yes, David, at this point, given the ramp up, it’s awfully hard for us to tell where we’re at, from how many gross margin points. I would say – I’d give you an example though, in the quarter, it was up to $1 million to $2 million [ph] impact from where we would have liked to bend just from a period if we were operating at a – call it optimal efficiency. David Leiker – Baird Research: But that $1 million or $2 million you think you can get back or is that just a lower return on margin [ph]?

Yes, we’re focused. We’re going to get it back. It’s just a matter of time, okay? And again, we have no concerns with the product – with delivery of product. This is purely the yield and uptime focus we need to get solved. But it’s going to take a couple of quarters and we’ll keep you posted on how that goes. David Leiker – Baird Research: Okay. And then the last slide in here is you look in terms of your new bookings for new business looking out into ‘14, ‘15, what are you seeing there that you’ve been able to – just characterize for us what that backlog looks like, how that’s evolving.

Yes. Well, as the previous caller asked, we feel very, very positive where in Asia we’re really pursuing these growth opportunities and we have – David Leiker – Baird Research: Right.

– sixty something new programs we’ll be starting. And those are really going to start taking hold in the next – we’ll start launching some gen set business in India this quarter. In the next quarter, the oil cooler business automotive wise in India is up and running with some new launches and increasing. The real investment we made into China for the diversifying into the automotive business and taking advantage of our customer contacts and opportunities with the European side and China is going to start taking hold in the fourth quarter of next year and ramp up aggressively through the next calendar year. If I look at – obviously in Europe, it’s all about absorbing the Euro 6 launch that we’re really getting into. And North America has significant launches through the traditional folks, we have both in all segments that we’re working on whether it’s big [ph] coils, business in off-highway and the same with the expanding automotive applications in oil coolers and the like. So we feel very comfortable with our order [ph] book and what’s coming and we’re really putting additional focus on growing those pursuit opportunities as we go forward. David Leiker – Baird Research: Okay. And then just a detail question. Mick, going to the accelerated DNA, was that equipment coming out of facilities that you’re exiting or is it the equipment does not run in the way you want it to be running?

Now, it gets back to adjusting our manufacturing processes and this really was a decision we made several quarters ago when we looked at – as part of the European restructuring, we decided to go ahead bite the bullet and adjust on one of our manufacturing processes which meant increasing some of – using some more semi-automated and more manual processes and in fact investing in a little bit of additional equipment. But it also meant that we were going to write off some other equipment, David. So it was two quarters and it was really – normally, it would probably have been reported as an impairment when we made that decision. But the technicality is that we were actually going to be using the equipment for another quarter or two to properly declassify what event it was accelerated depreciation. David Leiker – Baird Research: Okay. All right, great. Thanks for clarifying that. Thank you.

Sure.

Thank you.

The next question is from Walt Liptak of Global Hunter Securities. Please go ahead. Walt Liptak – Global Hunters Securities: Hi. Thanks. Good morning, guys.

Good morning. Walt Liptak – Global Hunters Securities: I wanted to ask about the North American profits and for OE [ph] and you call that the mix of business. I wonder if you could provide some color and maybe talk about what that mix is going to look like in next quarter.

Yes. Walt, this is Mick. The biggest impact, as Tom mentioned, they had a fair amount of tooling in the quarter, so we think about this as being a flack up a little bit from a true volume standpoint. Then the next biggest driver is their earnings improvement, at least on the gross profit line, was the favorable materials. That was a big driver. And then second, we had a little bit of additional mix benefit from some automotive components that are actually doing quite well within that region. And a little bit of – that was the biggest impact, filling [ph] it a little bit and on off-highway mix issue. And as we go forward for the remainder of the year, that will be pretty much the same mix of business. As Tom mentioned, we see this business with what’s going on in off-highway and truck right now in North America being – call it flattish. The biggest challenge then they’ll have in front – we have in front of us is the remainder of the year with flatter revenue. Some of those material benefits will go away as we continue to pass on the pricing to our customers. So that’s kind of how we’re looking at this for the next two quarters. Walt Liptak – Global Hunters Securities: Okay. Yes. On the raw material, contextually that passes through. Does that start happening in the third quarter or is it in the fourth?

Yes. It actually started a quarter ago. We probably had this when we came out with a really strong Q1. One of the things we wanted to make sure everyone understood was part of that was called the perfect storm in our favor. We had really bottomed out on metals but yet the customers – the way our pricing mechanism works, we’re still using last year’s prices. Throughout our fiscal year here, we have started to lower prices and it just depends on the contract with the customer. Some of them will get a price adjustment every quarter, some every six months and the longest ones would be one year. So I think the last of them will be coming up frankly on around January 1st. But we’ve already passed on some prices on October 1st. But then the remainder should be by the end of our fiscal year here. Walt Liptak – Global Hunters Securities: And if I could – thanks for that. But if I could switch over to the Airedale, the loss that you reported, the $0.5 million, what was that related to? Was that write-off or was that business disruption? If it was business disruption, have you been able to quantify it yet?

Yes, good question. The $500, 000, $100,000 of that was an insurance deductible that it’s not recoverable. And then $400,000 is – that was a leased facility. It’s important, I guess, for us to make sure people know that, but that was a leased facility. But clearly, we have obligation to rebuild the facility. And during our ownership or our leasing of that, we had done about $400,000 of lease improvements. So with the rebuilding of the facility, we won’t get those back. That was the $500, 000. In the quarter, you know, them being shutdown was – could be – it’s hard to estimate because what would have actually gone out the door in the last three weeks, but we estimate it was up to $1 million impact in the quarter from an operating income standpoint. Walt Liptak – Global Hunters Securities: Okay. Okay. Thanks.

I would now like to turn the conference back to Ms. Kathy Powers for any further remarks.

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