Adjusted earnings per share increased 2% to $1.06.
Adjusted EBITDA margin was 14.9%, down 40 basis points year-over-year, reflecting temporary impacts from lower Performance Technologies volume and increased investments in Climate Solutions.
Climate Solutions segment saw a 10% improvement in adjusted EBITDA with a 20% adjusted EBITDA margin.
Data center sales grew 15% year-over-year, driven by North America growth.
Free cash flow was $200,000, lower than prior year due to higher inventory levels in Climate Solutions and $5 million cash payments related to restructuring and acquisition costs.
Gross margin declined 40 basis points to 24.2%, primarily due to lower sales and higher materials costs in Performance Technologies.
HVAC Technologies sales increased 34%, including $10 million revenue contribution from recent acquisitions AbsolutAire and L.B. White.
Leverage ratio remains strong at 1.0, with extended credit facility maturity and upside providing liquidity and flexibility.
Modine reported a 3% increase in total company sales for Q1 fiscal 2026, driven primarily by an 11% revenue increase in the Climate Solutions segment.
Net debt increased by $123 million to $403 million, related to acquisitions completed during the quarter.
Performance Technologies segment revenues declined 8%, with adjusted EBITDA down 14% and margin decreasing 100 basis points to 13.1%, impacted by lower sales volume and higher material costs.
Closings volume increased 4% year-over-year, with spec sales penetration rising to 65% in Q2 from 58% in Q1 and 59% a year ago.
Delivered 3,340 homes at an average price of $589,000, generating $2 billion in home closings revenue with an adjusted home closings gross margin of 23%.
Financial services revenue increased to $53 million with a gross margin of 51.1%, up from $49 million and 42.5% a year ago.
Home closings gross margin was 22.3% in Q2; adjusted margin was 23%, in line with guidance.
Liquidity stood at approximately $1.1 billion with net homebuilding debt to capitalization ratio at 22.9%.
Reported net income of $194 million or $1.92 per diluted share, adjusted net income of $204 million or $2.02 per diluted share, both up year-over-year.
Repurchased 1.7 million shares for $100 million in Q2; targeting at least $350 million in total share repurchases for 2025.
SG&A expense ratio improved by 90 basis points year-over-year to 9.3% of home closings revenue.
Adjusted earnings per share increased by 41% to $2.69, and adjusted EBITDA rose 35% to $126 million.
Backlog totaled $2 billion, a 24% year-over-year increase, with E-Infrastructure backlog up 44%.
Building Solutions revenue declined 1% with adjusted operating income down 28%, impacted by housing market softness and affordability challenges.
Gross profit margin expanded by 400 basis points to 23.3%.
Operating cash flow was strong at $85 million for the quarter.
Sterling Infrastructure reported a 21% revenue growth in Q2 2025, driven by 29% growth in E-Infrastructure Solutions and 24% in Transportation segment.
Transportation Solutions backlog increased 5% year-over-year but declined 17% sequentially due to strong revenue burn and seasonal factors.
Adjusted operating margin declined 200 basis points year-over-year but was 100 basis points better than forecast, with SG&A expense reductions helping offset volume-related pressures.
Consolidated operating margins were 6.2% on a reported basis and 8.3% on an adjusted basis, reflecting strong decremental margins in the mid-teens.
Europe/Middle East sales declined roughly 11%, South America sales decreased about 5%, North America sales decreased approximately 32%, and Asia Pacific/Africa sales decreased 6%, all excluding currency impacts.
Free cash flow for the first half of 2025 was $63 million, approximately $390 million better than the same period in 2024.
Net sales totaled over $2.6 billion, down approximately 19% year-over-year or 11% excluding the Grain & Protein business divested last year.
Production hours were down approximately 16% compared to Q2 2024, with a 50%+ reduction in North America due to dealer inventory reduction efforts.
Replacement part sales were approximately $503 million in Q2, up 3% year-over-year on a reported basis and down 1% excluding currency effects.
Dafinchi