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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[ü ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 26, 2004

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-1373


MODINE MANUFACTURING COMPANY
(Exact name of registrant as specified in its charter)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ü No _

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ü No _

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

MODINE MANUFACTURING COMPANY

INDEX

	Three months ended September 26		Six months ended September 26
	2004	2003	2004	2003
Net Sales	$363,620	$279,059	$710,982	$567,957
Cost of sales	280,488	217,690	545,690	434,197
Gross profit	83,132	61,369	165,292	133,760
Selling, general, and administrative expenses	63,452	58,103	122,937	115,340
Restructuring	(600)	(47)	922	(47)
Income from operations	20,280	3,313	41,433	18,467
Interest expense	(1,506)	(1,259)	(2,783)	(2,693)
Other income -- net	3,769	4,357	7,339	7,819
Earnings before income taxes	22,543	6,411	45,989	23,593
Provision for income taxes	8,491	2,106	18,128	8,002
Net earnings	$ 14,052	$ 4,305	$ 27,861	$ 15,591
Net earnings per share of common stock:
Basic	$0.41	$0.13	$0.82	$0.46
Diluted	$0.41	$0.13	$0.81	$0.46
Dividends per share	$0.1525	$0.1375	$0.3050	$0.2750
Weighted average shares -- basic	34,018	33,894	33,975	33,870
Weighted average shares -- diluted	34,415	33,992	34,339	33,948

(See accompanying notes to consolidated financial statements.)

MODINE MANUFACTURING COMPANY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
For the Six Months Ended September 26, 2004 and 2003
(Unaudited)

(See accompanying notes to consolidated financial statements.)

(In thousands)	Pension Plans			Other Post-Retirement Plans
For the three months ending Sept. 26,	2004	2003		2004	2003
Service cost	$2,043	$1,632		$  100	$  85
Interest cost	3,686	3,276		408	558
Expected return on plan assets	(5,175)	(4,890)		-	-
Amortization of:
Unrecognized net loss (gain)	707	91		(1)	167
Unrecognized prior service cost	110	126		75	(86)
Unrecognized net obligation (asset)	(7)	41		-	-
Net periodic benefit cost	$1,364	$276		$582	$724

(In thousands)	Pension Plans			Other Post-Retirement Plans
For the six months ending Sept. 26,	2004	2003		2004	2003
Service cost	$3,921	$3,333		$  199	$  181
Interest cost	7,155	6,609		1,058	1,195
Expected return on plan assets	(10,011)	(9,793)		-	-
Amortization of:
Unrecognized net loss	1,255	146		256	359
Unrecognized prior service cost	247	276		(22)	(183)
Unrecognized net obligation (asset)	(14)	88		-	-
Adjustment for curtailment	430	-		-	-
Adjustment for settlement	-	1,490		-	-
Net periodic benefit cost	$2,983	$2,149		$1,491	$1,552

			(In thousands)
	Three months ended September 26		Six months ended September 26
	2004	2003	2004	2003
Equity in earnings of non-consolidated affiliates	$1,235	$ 443	$2,710	$ 952
Royalty income	1,272	1,779	2,537	2,557
Interest income	185	303	329	628
(Loss)/gain on the sale of property,
equipment, and business	(35)	243	255	769
Other non-operating income	1,112	1,589	1,508	2,913
Total	$3,769	$4,357	$7,339	$7,819

		(In thousands)
	September 26, 2004	March 31, 2004
Raw materials	$ 38,178	$ 30,247
Work in process	31,571	26,595
Finished goods	80,928	79,599
Total inventories	$150,677	$136,441

		(In thousands)
	September 26, 2004	March 31, 2004
Gross, property,
plant & equipment	$928,052	$852,486
Less accumulated depreciation	(470,606)	(454,789)
Net property, plant & equipment	$457,446	$397,697

(In thousands, except per share amounts)

	Restructuring charges
(In thousands)	Termination benefits	Facilities expense
Balance at June 26, 2004	$(136)	$(1,386)
Payments	99	-
Adjustments	(36)	636
Balance at September 26, 2004	$(73)	$(750)

The remaining accrued liability will be disbursed in October 2004.

11.    Goodwill and Intangible Assets

	Original	Distributed	European
(In thousands)	Equipment	Products	Operations	Total
Balance, March 31, 2004	$ 20,344	$ 3,987	$ 8,278	$ 32,609
Acquisitions	928	-	-	928
Fluctuations in foreign currency	9	1	(478)	(468)
Balance, September 26, 2004	$ 21,281	$ 3,988	$ 7,800	$ 33,069

	September 26, 2004		March 31, 2004
	Gross Carrying	Accumulated	Gross Carrying	Accumulated
(In thousands)	Value	Amortization	Value	Amortization
Amortized Intangible Assets:
Patents and product technology	$ 3,951	$ 2,783	$ 3,951	$ 2,651
Non-compete agreements	2,182	2,182	2,182	2,182
Other intangibles	118	118	118	118
Total	6,251	5,083	6,251	4,951
Unamortized Intangible Assets:
Pension Asset	2,061	-	2,491	-
Total intangible assets	$ 8,312	$ 5,083	$ 8,742	$ 4,951

		(In thousands)
Warranty accruals	2004	2003
Three months ended September 26:
Balance at June 26	$20,770	$13,470
Accruals for warranties issued in current year	2,459	2,204
Accruals related to pre-existing warranties	(115)	228
Accruals balances assumed upon acquisition	3,037	-
Settlements made	(2,616)	(2,756)
Effect of exchange-rate changes on the warranty liability	151	(370)
Balance at September 26	$23,686	$12,776
Six months ended September 26:
Balance at March 31	$20,916	$12,970
Accruals for warranties issued in current year	5,080	4,660
Accruals related to pre-existing warranties	329	482
Accruals balances assumed upon acquisition	3,037	-
Settlements made	(5,681)	(5,338)
Effect of exchange-rate changes on the warranty liability	5	2
Balance at September 26	$23,686	$12,776

		(In thousands)
Three months ended September 26,	2004	2003
Sales :
Original Equipment	$ 159,345	$ 105,769
Distributed Products	90,509	97,855
European Operations	118,295	82,271
Segment sales	368,149	285,895
Eliminations	(4,529)	(6,836)
Total net sales	$ 363,620	$ 279,059
Operating income:
Original Equipment	$ 21,294	$ 9,573
Distributed Products	(355)	2,031
European Operations	13,231	6,296
Segment operating income	34,170	17,900
Corporate & administrative expenses	(13,922)	(14,623)
Eliminations	32	36
Other items not allocated to segments	2,263	3,098
Earnings before income taxes	$ 22,543	$ 6,411

		(In thousands)
Six Months ended September 26,	2004	2003
Sales:
Original Equipment	$303,074	$216,750
Distributed Products	175,590	183,086
European Operations	241,391	184,556
Segment Sales	720,055	584,392
Eliminations	(9,073)	(16,435)
Total net sales	$710,982	$567,957
Operating Income
Original Equipment	$42,973	$26,278
Distributed Products	(493)	872
European Operations	26,448	20,022
Segment operating income	68,928	47,172
Corporate & administrative expenses	(27,525)	(28,774)
Eliminations	30	69
Other items not allocated to segments	4,556	5,126
Earnings before income taxes	$ 45,989	$ 23,593

		(In thousands)
	September 26,	March 31,
Period ending	2004	2004
Assets:
Original Equipment	$ 378,265	$ 223,130
Distributed Products	197,801	197,533
European Operations	333,441	332,858
Corporate & Administrative	264,846	222,187
Eliminations	(88,566)	(5,678)
Total assets	$ 1,085,787	$ 970,030

Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of Modine's consolidated results of operations and financial condition. This discussion should be read in conjunction with the consolidated financial statements and notes thereto.

RESULTS OF OPERATIONS

Comparison of the Second Quarter of 2004-05 with the Second Quarter of 2003-04

Second quarter record net sales of $363.6 million were 30.3% higher than the $279.1 million reported in the second quarter of last year. This is the Company's fourth consecutive quarter of record sales. Sales were positively impacted by net favorable currency exchange rates, primarily the stronger Euro in relation to the U.S. Dollar, of approximately $8.5 million when compared to the same quarter last year. Also contributing to the net sales increase were one month of operating results from the Company's South Korean manufacturing facility recently acquired from WiniaMando Inc.

Revenues from the Original Equipment segment grew by 50.7% or $53.6 million, from the same quarter last year. Sales increases in the Original Equipment segment were driven by large volume improvements in the truck and heavy duty and industrial business, smaller revenue increases also occurred in the Automotive market when compared to the second quarter of the prior year. The Original Equipment segment is benefiting from a combination of new business programs and general industrial and agricultural market recoveries. The current year also included one month of revenues from the South Korean manufacturing facility acquired in the second quarter, as noted above. Revenues from the European Operations segment grew by 43.8%, or $36.0 million, from the same quarter last year. Excluding the impact of the stronger Euro in relation to the U.S. Dollar, revenues would have increased by 34.2%. Volume increases were recorded in both the European automotive and heavy-duty and industrial markets, in addition to the fa vorable impact in the exchange rate. In the Distributed Products segment, revenue decreased 7.5%, or $7.3 million. Significantly decreased revenues in the Aftermarket and to a lesser extent in the electronics cooling markets were partially offset by almost a 16% increase in HVAC&R (heating, ventilating, air conditioning and refrigeration) revenues. In addition to the increasingly competitive nature of the marketplace, which continues to reduce revenues, the aftermarket business was negatively impacted during the second quarter of fiscal 2005 due to the cooler U.S. summer weather, reduced travel and the effects from hurricanes in the southeast United States. The electronics cooling business continues to experience the effects of a slow recovery in the markets served, while at the same time it is experiencing benefits from cost-containment programs, the acceleration of new business in Taiwan, and the plant restructuring initiatives described herein.

Gross profit, as a percentage of sales, was 22.9%. This was a 0.9% increase as a percentage of sales from the 22.0% earned in the second quarter of the previous year. Higher gross margins were reported in the Original Equipment and European Operations segments while the gross margin declined by less than 1% in the Distributed products segment. Improved gross margins were reported in the majority of the Company's major markets, while the North American automotive and aftermarket markets registered declines, and the electronics cooling market remained essentially unchanged. Higher material costs as a percentage of sales were more than offset by lower manufacturing overhead costs as a percentage of sales. Labor costs as a percentage of sales declined slightly in the same period comparison to one year ago. Rising metal market prices, which are calculated and passed through to original equipment customers on a delayed basis, once again negatively impacted the material content as a percentage of sales. Impr oved sales volumes allowed for better utilization of the fixed component of manufacturing overhead during the quarter. As mentioned in previous filings, new product launches and program scope changes had adversely affected manufacturing overhead in the second quarter last year.

Selling, general and administrative expenses of $63.5 million increased by 9.2% from the prior year's second quarter of $58.1 million. The inclusion of one-month's operating results for the new Korean acquisition accounted for $1.1 million, or 21% of the increase. The impact of currency exchange rates, primarily the stronger Euro in relation to the U.S. dollar, also contributed approximately 19%, or $1.0 million, to the overall increase. The largest items contributing to the remaining increase were wages, fringe benefits and other personnel-related benefits and higher depreciation.

Restructuring added $0.6 million to income during the current quarter as a buyout agreement was reached with the lessor of the Guaymas, Mexico facility, reducing the closing cost initially recorded in the first quarter at fair value. At the time of the initial recording of the restructuring charge in the first quarter, the lessor had not shown an interest in actively engaging in buyout discussions. This leased manufacturing facility was closed in September as part of the electronic cooling group restructuring announced in June 2004.

Income from operations of $20.3 million increased by $17.0 million, or 512.1% over the same quarter last year. The Original Equipment segment's operating income increased 122.4% to $21.3 million from $9.6 million one year ago. Prior year second quarter results were impacted negatively by program launch costs, costs associated with a program scope change, and pricing pressures. The European Operations segment's operating income increased 110.1% to $13.2 million from $6.3 million one year ago. Major influences were continued growth in the automotive and heavy-duty businesses, and the stronger Euro in relation to the U.S. Dollar, offset in part by higher selling, general and administration costs in support of new business programs. The Distributed Products segment's operating income decreased 117.5% to a loss of $0.4 million from income of $2.0 million one year ago. Significantly weaker Aftermarket results from increasing competition, cooler U.S. summer weather and the effects from hurricanes in the south east United States more than offset a stronger performance by the HVAC&R business and a reduced operating loss in the electronics cooling business as the results of cost-containment programs, acceleration of new business in Taiwan and plant restructuring initiatives begin to take effect.

Interest expense increased 19.6%, or $0.2 million, while average outstanding debt levels increased $4.1 million, or approximately 3.8%, from the same quarter one year ago. The increase in interest expense is mainly due to increased borrowings to fund, in part, the acquisition of the assets of the ACC Division of WiniaMando Inc, debt assumed as part of the acquisition and lines of credit interest recorded by the new Korean subsidiary. The relationship of the increase in the interest expense compared to the increase in debt level was also influenced by exchange rate fluctuations on Euro-denominated loans.

Net non-operating income decreased by $0.6 million from the same quarter one year ago. Royalty income was down $0.5 million from the second quarter last year. Also, the gain from the sale of property and equipment was down $0.3 million and favorable exchange gains on foreign currency transactions were down $0.6 million compared to the same period one year ago. Equity in earnings of non-consolidated affiliates was up $0.8 million from the second quarter last year with continued strong performance from Modine's Brazilian joint venture, Radiadores Visconde, Ltda.

The provision for income taxes in the current quarter was $8.5 million compared to last years' second quarter expense of $2.1 million. The effective tax rate of 37.7% was 4.9 percentage points higher than in the same period one year ago. The increase results primarily from repatriation of foreign earnings and foreign tax rate differentials, offset by a decrease in state income taxes.

Net earnings for the quarter of $14.1 million, or $0.41 basic and diluted earnings per share were up when compared to last year's second quarter net earnings of $4.3 million, or $0.13 basic and diluted earnings per share. Return on shareholders' equity through the second quarter of the current fiscal year was 9.4%.

Comparison of the First Six Months of 2004-05 with the First Six Months of 2003-04

Net sales for the first six months of fiscal 2004-05 were $711.0 million, up 25.2% from the $568.0 million reported in the same period of last year. Sales were positively impacted by net favorable currency exchange rates, primarily the stronger Euro in relation to the U.S. Dollar, of approximately $19.7 million, when compared to the first six months of last year.

Overall, changes in the Company's segment sales were mixed for the first six months of the year. In the Original Equipment segment, net sales grew by 39.8%. Sales increases were seen in all markets served by the segment. The largest improvement was recorded in the truck market, as a result of new product launches in the second half of last year. The heavy-duty and industrial market also recorded strong improvements, followed by a smaller increase in the automotive market. The current year also included one month of revenues from the South Korean manufacturing facility acquired in the second quarter. The European Operations segment net sales increased by 30.8% from year-ago levels. Both the European automotive and heavy-duty markets reported sale volume increases in addition to the favorable currency translation impact of $18.2 million recorded in the first half of the year. The Distributed Products segment sales weakened by 4.1%. Reduced Aftermarket revenues were the major contributor to the declin e from the same period one year ago. The Aftermarket business continues to experience negative sales impact associated with the increasing competition in the markets served. Cooler summer weather in the United States and the effects of the hurricane season in the southeast portion of the United States were significant factors contributing to disappointing sales in the first six months of fiscal 2005. Partially offsetting the Aftermarket declines were stronger coil sales in the commercial HVAC&R business. The Electronics Cooling business also experienced lower sales in the first six months of fiscal 2005 as the division undertook a plant restructuring initiative and the ramp-up of manufacturing operations for new business in Taiwan.

Gross profit of 23.2% was down 0.4 percentage points when compared with the first six months of the previous year. An increase in material costs, as a percentage of sales, was the largest driver in the reduction in gross profit. Rising metal market prices, which are calculated and passed through to original equipment customers on a delayed basis, once again negatively impacted the material content as a percentage of sales. As a percentage of sales, labor remained virtually unchanged, while manufacturing overhead improved from the prior year results which, as disclosed previously, included additional program launch costs and a program scope change. Gross profits, in dollars, grew in the Original Equipment and European Operations segments by 41% and 33%, respectively, while declining in the Distributed Products segment by 4%.

Selling, general and administrative expenses of $122.9 million, or 17.3% of sales, decreased 3.0 percentage points when compared to the first six months of last year. Selling, general and administrative expenses, in absolute dollars, grew by $7.6 million. The impact of currency exchange rates, primarily the stronger Euro in relation to the U.S. Dollar, contributed to approximately 30 percent, or $2.3 million, of the overall dollar increase. The largest items contributing to the remaining increase were wages and other compensation, depreciation expenses and higher professional and other contract services.

Restructuring charges of $0.9 million were recorded during the first six months related to the previously announced closure of the Guaymas, Mexico facility in the Company's Electronics Cooling business. The closure is the result of a shift in customer sourcing and overcapacity in North American operations for the electronic cooling market. The charges recorded during the current year include $0.7 million for a lease buyout agreement and severance costs of $0.2 million.

Operating income of $41.4 million, or 5.8% of sales, was up 2.5 percentage points from $18.5 million, or 3.3% of sales, in the first half of the previous year. The Original Equipment segment's operating income increased 63.5% to $43.0 million from $26.3 million one year ago. Current year results were positively impacted by new business programs, general industrial and agricultural market recoveries and operational enhancements. The European Operations segment's operating income increased 32.1% to $26.4 million from $20.0 million one year ago. Major influences were the stronger Euro in relation to the Dollar and higher sales volumes in both the automotive and heavy-duty markets. The Distributed Products segment's operating income decreased 156.5% to a loss of $0.5 million from income of $0.9 million one year ago. The Company continues to experience weakness in the aftermarket business, due in part, to weather related factors encountered this summer. Restructuring charges and other closure costs recorde d in the Electronic Cooling market also negatively impacted operating income for the segment in the current year.

Interest expense increased $0.1 million, or just over 3% from the same six month-period one year ago.

Net non-operating income decreased by $0.5 million from the same six-month period one year ago. Equity earnings of non-consolidated affiliates were up $1.8 million due primarily to the strong operating performance of the Company's Brazilian joint venture. Losses on foreign currency transactions were $0.6 million for the first six months of fiscal 2005, a $1.5 million year-over-year swing from one year ago. Current year transaction losses versus prior year transaction gains on an unhedged inter-company loan denominated in Euros to the Company's wholly owned Hungarian subsidiary accounted for approximately $1.9 million of the year-over-year swing for the six month period. Profit recorded on tooling sales also declined by $0.5 million from the same period one year ago.

The provision for income taxes in the first six months was $18.1 million compared to $8.0 million expense for the same period one year ago. The effective tax rate of 39.4% is 5.5 percentage points higher than the 33.9% reported one year ago. The increase resulted primarily from repatriation of foreign earnings, a one-time income shift between taxing jurisdictions and an increase in valuation allowance related to certain foreign tax loss carry forwards.

Net earnings were $27.9 million or $0.82 basic earnings per share and $0.81 diluted earnings per share for the first six months of the fiscal 2005. This compares to earnings of $15.6 million, or $0.46 basic and diluted earnings per share, for the first six months of the prior year. Return on shareholders' equity through the second quarter of the current fiscal year was 9.4%.

Outlook for the Remainder of the Year

Management is confident that the Company will exceed the fiscal 2005 sales and earnings per share guidance provided earlier this year. Management expects the second half of fiscal 2005 to be stronger than the first half's earnings per share of 81 cents, due to the accretive impact of our acquisitions from WiniaMando, new business programs and continued market strength in several of our businesses. These forward-looking statements regarding sales, earnings, and operations are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. See "Important Factors and Assumptions Regarding Forward-Looking Statements" below.

FINANCIAL CONDITION

Comparison between September 26, 2004 and March 31, 2004

Current assets

Cash and cash equivalents of $27.6 million decreased $35.6 million from the March 31, 2004 balance. The acquisition of the South Korean assets and the 100% equity interest in the Shanghai, China subsidiary of the ACC Division of WiniaMando Inc., capital expenditures and dividend payments were the main uses of cash. Cash provided by operating activities, additional net borrowing in conjunction with the acquisition and the issuance of common stock, upon the exercise of options granted pursuant to employee benefit plans, were the main sources of cash during the period.

Trade receivables of $250.2 million were up $70.0 million from year-end. Excluding the impact of the recent Asian acquisitions, which added $45.3 million to the trade receivables balance, the remaining $24.7 million in changes are attributable to higher sales (excluding the new acquisitions) over the previous 60 days of almost $7 million, seasonal sales programs in the HVAC&R and Aftermarket divisions and timing differences in collections from major customers created by closing on the 26^th of the month throughout the year and the 31^st of the month at year-end.

Inventory levels increased by $14.2 million from year-end to $150.7 million at the end of the second quarter. Excluding the impact of the acquisition, which added $13.4 million to the inventory balance, the remaining changes consisted of a $6.1 reduction in Aftermarket inventories, offset by increases in the remaining operating divisions, except for the European heavy-duty division, which was virtually unchanged. Seasonal factors were the main item influencing the change in the Distributed Products segment, which includes the Aftermarket and HVAC&R divisions.

Deferred income taxes and other current assets increased by $6.1 million to $59.4 million from year-end. The largest item contributing to the change is $8.2 million of other current assets from the newly acquired South Korean and Chinese operations of the ACC Division of WiniaMando Inc. The remaining $2.1 million decrease from existing operations came from a number of categories, with the largest two changes being a $2.8 million reduction in prepaid taxes and a $2.7 million increase in unexpired insurance.
The current ratio decreased from 2.1 to 1 to 1.9 to 1. Net working capital increased $0.5 million to $229.7 million. Excluding the $19.3 million in working capital added from the recent acquisition of the ACC assets, the other major items contributing to the overall change were lower cash and cash equivalents, lower other current assets, additional debt due within a year, higher accrued expenses and other current liabilities and higher income taxes. These reductions in working capital were offset in part by higher trade receivables and lower accounts payable.

Noncurrent assets

Net property, plant and equipment, of $457.4 million increased by $59.7 million over year-end balance of $397.7 million. Included in the September consolidated balance sheet were $67.3 million from the operations acquired from WiniaMando in the quarter. Depreciation and retirements, along with the foreign currency translation, were higher than capital expenditures for the remaining operations. Outstanding commitments for capital expenditures were $29.9 million at September 26, 2004. More than 70 percent of the commitments relate to Modine's European operations. These commitments include equipment and tooling for new BMW programs in Germany, wind tunnel equipment in Bonladen, Germany and EGR and Plate oil cooler programs in Hungary. The outstanding commitments will be financed through a combination of funds generated from operations and third-party borrowing as required.

Investments in unconsolidated affiliates of $29.7 million increased by $1.6 million from year-end. Equity earnings of affiliates were $2.7 million for the first six months of fiscal 2005 as Radiadores Visconde, the Company's joint venture in Brazil continued to produce strong operating results. Items offsetting the earnings recorded in the first six months were dividends received from Radiadores Visconde of $0.7 million and net unfavorable currency translation of $0.4 million.

Goodwill increased by $0.5 million to $33.1 million. This increase consisted of $0.9 million originating from the recent Korean operations acquired from WiniaMando, Inc. and the remainder, $0.4 million, the result of unfavorable fluctuations in foreign currency exchange rates. Intangible assets declined by $0.6 million, which was primarily caused by a reduction in the noncurrent pension liability due to the recognition of a pension curtailment change in the first quarter. The remaining reduction is related to amortization expense recorded in the first six months of the current year.

Deferred charges and other noncurrent assets decreased by $0.2 million. Excluding the impact of the ACC acquisition, which added $0.8 million to the balance, the largest factor influencing the remaining $1.0 million decrease was the result of continuing recognition of a change in deferred pension assets.

Current Liabilities

Accounts payable and other current liabilities of $224.2 million were $35.3 million higher than in March 2004. Excluding the impact of the ACC acquisitions, which added $41.2 million in current liabilities to the balance sheet at September 26, 2004, the remaining $5.9 million decrease was due to normal timing differences in the level of operating activity. Accrued income taxes increased $4.3 million, primarily from improved profits and timing differences in making estimated payments.
Debt

Total outstanding debt increased $53.8 million to $141.7 million from the March 2004 balance of $87.9 million. The change in short-term debt accounted for $14.3 million of the total increase with $7.0 million arising from borrowing on the Korean lines of credit. The remaining $7.3 million consisted of credit balances for checks written and not yet presented for payment, in excess of domestic cash balances at September 26, 2004. Domestic long-term debt increased $38.8 million mainly due to the utilization of existing credit lines to finance the acquisition of WiniaMando Inc.'s ACC Division. International long-term debt increased $0.7 million during the period. Debt acquired in the Korean acquisition of $2.4 million was offset by a decrease of $1.7 million in Europe that consisted of $1.1 million in scheduled payments and a $0.6 million decrease in the dollar value of Euro denominated loans.

Consolidated available lines of credit decreased $28.5 million to $134.3 million during the quarter. An additional $50.0 million remained available on the credit line revolver, subject to lenders' approval, bringing the total available up to $184.3 million. Domestically, Modine's unused lines of credit decreased $39.0 million to $111.0 million, due to the above-mentioned utilization of existing credit lines related to the acquisition. Foreign unused lines of credit, which include $10.4 million of new lines in Korea, were $23.3 million. At the end of the second quarter of fiscal 2005, total debt-to-capital (capital = total debt + shareholders equity) was 19.0% compared with 13.0% at the end of fiscal 2004.

Subsequent to the end of the quarter, on October 27, 2004, the Company amended its $150 million multi-currency revolving credit facility, which was due to in expire in April 2005. The new facility extended the term for five years, expiring in October 2009, and increased the facility to $200 million, with a customary accordion feature that allows for an additional $75 million of borrowing capacity. For further details, see Note 12 in the accompanying notes to financial statements.

Shareholders' Equity

Total shareholders' equity increased from year-end by $17.8 million to a total of $604.3 million. Retained earnings increased by $17.4 million. The additions to retained earnings included $27.9 million in net earnings reported year-to-date, offset in part by $10.4 million in dividend payments. Net unfavorable foreign currency translation of $4.1 million was recorded in the period. The largest portion of the change resulted from the U.S. Dollar weakening against the Euro while other less significant changes occurred in other foreign currencies. Also favorably impacting shareholders' equity was an increase in paid-in capital and common stock of $5.4 million. This increase resulted from the issuance of common stock used to satisfy stock option exercises and employee stock plans requirements. Also recognized in paid-in capital were the associated tax benefits resulting from stock option exercises.

Liquidity

Operating cash flow for the quarter and six-months ended September 26, 2004 were $29.0 million and $31.7 million, respectively, compared to $32.7 million and $47.1 million one year ago for the same periods, respectively. The differences were mainly the result of a larger increase in accounts receivable this year, due to higher sales, a 30% increase over the same quarter one year ago, and a larger decrease in accounts payable over the same quarter last year. Management continues to focus its efforts on improving working capital. Compared with the prior year, days sales outstanding increased one day to 53 days and inventory turns increased from 6.6 to 7.7. The Company expects cash flows to remain strong in the current fiscal year and to meet its future operating, capital expenditure and strategic business opportunity costs primarily through a combination of existing cash balances, cash flows generated from operating activities and borrowings under committed and uncommitted lines of credit. The Company expects to make scheduled debt repayments in fiscal 2005 with internally generated funds. Modine believes that its internally generated cash flow, together with access to external resources, will be sufficient to satisfy existing commitments and plans.

The acquisitions in the second quarter of the South Korean and Shanghai, China operations of WiniaMando Inc., which closed on July 31, 2004 and September 3, 2004 respectively, were financed through a draw down of existing cash balances and utilization of $49 million in existing credit lines. The company subsequently paid down $10 million of long-term debt in the quarter with funds generated by operating cash flows.

As previously discussed in the Note 3 "Pension and Other Postretirement Benefits," the company expects to make pension contributions in the third quarter of $1.7 million. These contributions will be funded by cash generated through normal operations.

Short-term debt increased $14.3 million as the Company's new operations in Korea borrowed $7.0 million against their existing lines of credit and, domestically, because checks written but not yet presented for payment were reclassified to short-term debt as they exceeded book cash balances at September 26, 2004.

On October 27, 2004, Modine amended its $150 million multi-currency revolving credit facility, which was to expire in April 2005. The new facility extended the term for five years, expiring in October 2009, and increased the facility to $200 million, with an increase in a customary accordion feature from $50 million to $75 million in additional borrowing capability. Based on the company's strong balance sheet, improved financial position and the favorable bank market, the new facility has a lower cost, is unsecured and has fewer restrictive covenants.

With this increase in the credit facility and operating cash flows, management believes it is positioned to provide the necessary financial resources to take advantage of additional potential strategic business opportunities that may arise within fiscal 2005.

Environmental

Please see Footnote 17 to the Notes to Consolidated Financial Statements (unaudited) herein.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, Modine is subject to market exposure from changes in foreign exchange rates, interest rates, credit risk, economic risk and commodity price risk.

Foreign Currency Risk

Modine is subject to the risk of changes in foreign currency exchange rates due to its operations in foreign countries. Modine has manufacturing facilities in Mexico, Taiwan, Korea, China and throughout Europe. It also has equity investments in companies located in France, Japan, Brazil and China (effective with the acquisition on October 15, 2004). Modine sells and distributes its products throughout the world. As a result, the Company's financial results could be significantly affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which the Company manufactures, distributes and sells it products. The Company's operating results are principally exposed to changes in exchange rates between the U. S. Dollar and the European currencies, primarily the Euro, and are also exposed, as the result of the acquisitions made in the second quarter, to the change between the U.S, dollar and the Korean Won. Changes in foreign currency exchange rates for the Company's foreign subsidiaries reporting in local currencies are generally reported as a component of shareholders' equity. The Company's favorable/(unfavorable) currency translation adjustments recorded for the six months ended September 26, 2004 and for the twelve months ended March 31, 2004 were ($4.1) million and $28.5 million, respectively. As of September 26, 2004 and March 31, 2004, the Company's foreign subsidiaries had net current assets (defined as current assets less current liabilities) subject to foreign currency translation risk of $86.0 million and $73.7 million, respectively. The potential decrease in the net current assets from a hypothetical 10% adverse change in quoted foreign currency exchange rates would be approximately $8.6 million and $7.4 million, respectively. This sensitivity analysis presented assumes a parallel shift in foreign currency exchange rates. Exchange rates rarely move in the same direction relative to the U.S. Dollar. This assumption may overstate t he impact of changing exchange rates on individual assets and liabilities denominated in a foreign currency.

The Company has certain foreign denominated long-term debt obligations that are sensitive to foreign currency exchange rates. The following table presents the future principal cash flows and weighted average interest rates by expected maturity dates. The fair value of long-term debt is estimated by discounting the future cash flows at rates offered to the Company for similar debt instruments of comparable maturities. The carrying value of the debt approximates fair value.

In addition to the external borrowing, the Company has certain foreign-denominated long-term inter-company loans that are sensitive to foreign exchange rates. These loans are not hedged at September 26, 2004 and, as such, are exposed to transactional currency risk. At September 26, 2004, the Company has a 43.1 billion won or, $37.5 million dollar, 8-yr loan to its wholly-owned subsidiary Modine Korea. The potential loss from a hypothetical 10% change in the exchange rates between the South Korean Won and the U.S. Dollar could result in an adverse or favorable currency transaction gain /(loss) of approximately $3.75 million dollars. For the three and six months ended September 26, 2004, the Company had recorded $0.4 million in currency transaction gains in "other income" from the date of the initial loan in August 2004. The Company is currently investigating potential alternatives to mitigate this foreign currency exposure. Similarly, the Company's wholly-owed German subsidiary Modine Holding GmbH ha s an 11.1 million Euro, or $13.5 million, on-demand loan to its wholly-owned subsidiary Modine Hungaria Kft. at September 26, 2004. The potential loss from a hypothetical 10% change in exchange rates between the Euro and the Hungarian Forint, assuming a stable exchange rate between the Euro and the U.S. Dollar, could result in an adverse or favorable currency transaction gain/(loss) of approximately $1.35 million. For the three months ended September 26, 2004 and 2003, the Company recorded in "other income/(expense)" transaction (losses)/gains of ($0.2) million and $0.8 million, respectively. For the six months ended September 26, 2004 and 2003, transaction (losses)/gains recorded were ($0.9) million and $1.0 million, respectively.

Interest Rate Risk

Modine's interest rate risk policies are designed to reduce the potential volatility of earnings that could arise from changes in interest rates. The Company utilizes a mixture of debt maturities together with both fixed-rate and floating-rate debt to manage its exposure to interest rate variations related to its borrowings. The Company has not entered into any interest rate derivative instruments. The following table presents the future principal cash flows and weighted average interest rates by expected maturity dates. The fair value of long-term debt is estimated by discounting the future cash flows at rates offered to the Company for similar debt instruments of comparable maturities. The carrying value of the debt approximates its fair value.

Credit Risk

Credit risk is the possibility of loss from a customer's failure to make payment according to contract terms. The Company's principal credit risk consists of outstanding trade receivables. Prior to granting credit, each customer is evaluated, taking into consideration the borrower's financial condition, past payment experience and credit information. After credit is granted the Company actively monitors the customer's financial condition and developing business news. Approximately 58% of the trade receivables balance at September 26, 2004 was concentrated in the Company's top ten customers. Modine's history of incurring credit losses from customers has not been material, and the Company does not expect that trend to change.

Economic Risk

Economic risk is the possibility of loss resulting from economic instability in certain areas of the world or significant downturns in markets that the Company supplies. For example, traditionally, significant increases in oil prices have had an adverse effect on many markets the Company serves. Continued high oil prices may negatively impact the economic recovery from which the Company is currently benefiting, particularly in the truck and off-highway markets.

With respect to international instability, the Company continues to monitor economic conditions in the United States and elsewhere. In particular, the Company monitors conditions in Brazil and the effect on the Company's $15.9 million investment in its 50%-owned joint venture. During the first six months of Modine's fiscal 2005, the Brazilian Real weakened against the U.S. Dollar by less than 1%. Going forward, the Company will focus more intently on conditions in Asia as we integrate the asset acquisition of the ACC Division of WiniaMando Inc., which brought to the Company new operations in South Korea and China. As Modine expands its global presence, we also encounter risks imposed by potential trade restrictions, including tariffs, embargoes and the like. We continue to pursue non-speculative opportunities to mitigate these economic risks, and capitalize, when possible, on changing market conditions.

The Company pursues new market opportunities after careful consideration of the potential associated risks and benefits. Successes in new markets are dependent upon the Company's ability to commercialize its investments. Current examples of new and emerging markets for Modine include those related to exhaust gas recirculation (EGR), CO₂, and fuel cell technology. Modine's investment in these areas is subject to the risks associated with business integration, technological success and customer and market acceptance.

The upturn in the economy is putting production pressure on certain of the Company's suppliers of raw materials. In particular, there are a limited number of suppliers of steel and aluminum fin stock serving a more robust market. As a result, some suppliers are allocating product among customers, extending lead times or holding supply to the prior year's level. The Company is exposed to the risk of supply of certain raw materials not being able to meet customer demand and of increased prices being charged by raw material suppliers. In addition to the purchase of raw materials, the Company purchases parts from suppliers that use the Company's tooling to create the part. The Company does not have duplicate tooling for the manufacture of its purchased parts. As a result, the Company is exposed to the risk of a supplier of such parts being unable to provide the quantity or quality of parts that the Company requires. Even in situations where suppliers are manufacturing parts without the use of Company tool ing, the Company faces the challenge of obtaining high quality component parts from suppliers.

In addition to the above risks on the supply side, the Company is also exposed to risks associated with demands by its customers for decreases in the price of the Company's products. The Company offsets this risk with firm agreements with its customers whenever possible.

The Company operates in diversified markets as a strategy for offsetting the risk associated with a downturn in any one or more of the markets it serves, or a reduction in the Company's participation in any one or more markets. However, the risks associated with these market downturns and reductions are still present.

In particular, the Company continues to experience negative impact associated with the highly competitive automotive aftermarket, and the recovering electronics cooling market. With respect to the aftermarket, the Company believes this risk is exacerbated by excess manufacturing capacity, the proliferation of competitors and on-going changes in the traditional distribution channels. We have lessened the impact of this economic risk by implementing appropriate operational initiatives, and will continue to evaluate strategic alternatives for managing this risk effectively.
With respect to the Electronics Cooling business, the Company is experiencing favorable results associated with cost-containment programs, the acceleration of new business in Taiwan and plant restructuring initiatives. In this manner, the Company was able to reduce the operating loss associated with the Electronics Cooling business during the second quarter of fiscal 2005, as compared with the same period last year. We will continue to focus on effective methods for reducing the Company's economic risk associated with the Electronics Cooling business.

Commodity Price Risk

The Company is dependent upon the supply of certain raw materials and supplies in the production process and has, from time to time, entered into firm purchase commitments for copper and aluminum alloy, and natural gas. The Company does not use forward contracts to hedge against changes in certain specific commodity prices of the purchase commitments outstanding. The Company does maintain agreements with certain original equipment customers to pass through certain material price fluctuations in order to mitigate the commodity price risk. The majority of agreements contain provisions in which the pass through of the price fluctuations can lag behind the actual fluctuations by a quarter or longer.

Item 4. Controls and Procedures

The Company maintains disclosure controls and procedures designed to ensure that the information the Company must disclose in its filings with the Securities and Exchange Commission is recorded, processed, summarized and reported on a timely basis. As of the end of the period covered by this quarterly report on Form 10-Q, the Company carried out an evaluation, at the direction of the General Counsel and under the supervision of the Company's President and Chief Executive Officer and Vice President, Finance and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures as defined in Securities Exchange Act Rules 13a-15(e) and 15d-15(e), with the participation of the Company's management. Based upon that evaluation, the President and Chief Executive Officer and Vice President, Finance and Chief Financial Officer concluded that the design and operation of the Company's disclosure controls and procedures are effective in timely alerting them to material information re lating to the Company that is required to be included in the Company's periodic SEC filings.

There has been no change in the Company's internal control over financial reporting that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

In the normal course of business, Modine and its subsidiaries are named as defendants in various lawsuits and enforcement proceedings by private parties, the Occupational Safety and Health Administration, the Environmental Protection Agency, other governmental agencies, and others in which claims, such as those relating to personal injury, property damage, or business loss, are asserted against Modine. Modine is also subject to other liabilities that arise in the ordinary course of its business. Many of the pending damages claims are covered by insurance, and when appropriate Modine accrues for uninsured liabilities. While the outcomes of these matters are uncertain, Modine does not expect that any unrecorded liabilities that may result from these matters are reasonably likely to have a material effect on Modine's liquidity, financial condition or results of operations.
Under the rules of the Securities and Exchange Commission, certain environmental proceedings are not deemed to be ordinary or routine proceedings incidental to the Company's business and are required to be reported in the Company's annual and/or quarterly reports. The Company is not currently a party to any such proceedings.

Other previously reported legal proceedings have been settled or the issues resolved so as to not merit further reporting. Modine has no additional proceedings to report at this time.

Item 6. Exhibits and Reports on Form 8-K.

(a)   Exhibits:

The following exhibits are attached for information only unless specifically incorporated by reference in this Report:

(b)     Reports on Form 8-K:

The Company filed 11 reports on Form 8-K during the period covered by this report, described as follows:

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



MODINE MANUFACTURING COMPANY
(Registrant)



By: /s/ B. C. Richardson
B. C. Richardson, Vice President, Finance
and Chief Financial Officer

By: /s/D. R. Zakos
D. R. Zakos, Vice President, General
Counsel and Secretary


Date: October 28, 2004