Ampco-Pittsburgh Corp (AP) 2019 Q3 法說會逐字稿

Good morning, and welcome to the Ampco-Pittsburgh Corporation Third Quarter 2019 Earnings Results Conference Call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Melanie Sprowson, Director of Investor Relations. Please go ahead.

早安，歡迎參加 Ampco-Pittsburgh Corporation 2019 年第三季財報結果電話會議。(接線員指示) 請注意，本活動將被錄音。現在我想將會議交給投資人關係總監 Melanie Sprowson。請開始。

Thank you, Brandon, and good morning to everyone joining us on today's third quarter conference call. I'm joined by Brett McBrayer, our Chief Executive Officer; and Mike McAuley, Senior Vice President, Chief Financial Officer and Treasurer. Also joining us on the call today are Sam Lyon, President of Union Electric Steel Corporation; and Terry Kenny, President of Air and Liquid Systems Corporation.

謝謝你，Brandon，也向今天加入我們第三季電話會議的各位道早安。與我一同出席的有我們的執行長 Brett McBrayer，以及資深副總裁、財務長兼財務主管 Mike McAuley。今天也一同參與電話會議的還有 Union Electric Steel Corporation 總裁 Sam Lyon，以及 Air and Liquid Systems Corporation 總裁 Terry Kenny。

Before we begin, I would like to remind everyone that participants on this call may make statements or comments that are forward-looking and may include financial projections or other statements of the corporation's plans, objectives, expectations or intentions. These matters involve certain risks and uncertainties, many of which are outside of the corporation's control. The corporation's actual results may differ significantly from those projected or suggested in any forward-looking statement due to a variety of factors, including those discussed in the corporation's most recently filed Form 10-K and subsequent filings with the Securities and Exchange Commission. We do not undertake any obligation to update or otherwise release publicly any revision to our forward-looking statements.

在開始之前，我想提醒各位，本次電話會議的與會者可能會發表或評論前瞻性陳述，並可能包含財務預測或公司計畫、目標、預期或意圖的其他陳述。這些事項涉及若干風險與不確定性，其中許多超出公司控制範圍。由於多種因素，包括公司最近提交的 Form 10-K 以及其後向美國證券交易委員會提交的文件中所討論者，公司實際結果可能與任何前瞻性陳述中所預測或暗示者有重大差異。我們不承擔更新或以其他方式公開發布對前瞻性陳述之任何修訂的義務。

A replay of this call will be posted on our website later today and remain available for 2 weeks following the conclusion of the call. To access the earnings release or the webcast replay, please consult the Investors section of our website at ampcopgh.com.

本次電話會議的重播將於今日稍晚發布於我們的網站，並在會議結束後 2 週內提供。如需取得財報新聞稿或網路直播重播，請至 ampcopgh.com 我們網站的「投資人」專區查詢。

With that, I'll turn the call over to Brett McBrayer, Ampco-Pittsburgh's CEO.

接下來，我將把電話會議交給 Ampco-Pittsburgh 執行長 Brett McBrayer。

Thank you, Melanie. Good morning, and welcome to our call. Our CFO, Mike McAuley, will review our financial results in more detail momentarily. But first, I'd like to point out some of the key takeaways of our third quarter performance.

謝謝你，Melanie。早安，歡迎參加我們的電話會議。我們的財務長 Mike McAuley 稍後將更詳細地檢視我們的財務結果。但首先，我想指出我們第三季表現的一些重點。

The highlight of the quarter was the completion of the sale of both of our cast roll manufacturing facility in Avonmore, Pennsylvania; and our Canadian specialty steel subsidiary, ASW Steel. The divestiture of these assets significantly improves our cost structure without compromising our ability to serve current and future customers in our Forged and Cast Engineered Products segment. Based on our current order book, we anticipate these actions will result in positive operating profit for our company beginning immediately.

本季的亮點是完成出售我們位於賓夕法尼亞州 Avonmore 的鑄輥製造廠，以及我們加拿大特種鋼子公司 ASW Steel。處分這些資產在不影響我們於鍛造與鑄造工程產品（Forged and Cast Engineered Products）事業部門服務現有與未來客戶能力的前提下，顯著改善了我們的成本結構。根據我們目前的訂單簿，我們預期這些行動將使公司自即刻起開始產生正向營業利益。

During the third quarter, we also launched the next phase of our operational efficiency improvements at our European cast roll facilities. These actions are expected to deliver a reduction of approximately $3 million to $4 million in operating costs in 2020. Sam Lyon, President of our Forged and Cast Engineered Products segment, will provide more color on our progress in Europe shortly.

在第三季期間，我們也在歐洲鑄輥廠啟動營運效率改善的下一階段。預期這些行動將在 2020 年帶來約 300 萬至 400 萬美元的營運成本降低。我們鍛造與鑄造工程產品事業部門總裁 Sam Lyon 稍後將就我們在歐洲的進展提供更多說明。

When compared to quarter 2, the third quarter also reflects the impact of prescheduled seasonal plant shutdowns in our U.S. and European roll manufacturing locations. These shutdowns are used to maintain and improve our asset health. Despite the plant shutdowns and the significant downturn in our frac block sales to the oil and gas industry, adjusted income from operating -- continuing operations, which is a non-GAAP measure, was approximately breakeven for the quarter.

與第二季相比，第三季也反映了我們美國與歐洲輥類製造據點預先排定的季節性工廠停工之影響。這些停工用於維護並改善我們資產的健康狀況。儘管有工廠停工，以及我們對油氣產業的壓裂用區塊（frac block）銷售大幅下滑，來自營運的調整後收益——持續營運（adjusted income from operating -- continuing operations，屬非 GAAP 指標）本季約為損益兩平。

As for year-to-date, adjusted income from continuing operations yielded an improvement of $2.5 million, more than double compared to last year. September was a particularly strong month for the quarter as we were able to efficiently wind down production at Avonmore during the month and harvest operational efficiencies through targeted actions.

就年初至今而言，持續營運的調整後收益改善了 250 萬美元，較去年增加逾一倍。9 月是本季中特別強勁的一個月，因為我們能在該月有效率地逐步結束 Avonmore 的生產，並透過有針對性的行動收穫營運效率。

I will now turn the call over to Sam Lyon, Union Electric Steel President, who will discuss the Forged and Cast Engineered Products segment activities for the third quarter. Sam?

現在我將把電話會議交給 Union Electric Steel 總裁 Sam Lyon，由他說明第三季鍛造與鑄造工程產品事業部門的活動。Sam？

Thanks, Brett. In the third quarter, we have continued our focus on safety, cost reductions in the U.S. plants, and as mentioned by Brett, restructuring and cost reductions in the European plants. We concluded negotiations with our workforce represented by the United Steelworkers at our Carnegie, Pennsylvania plant, resulting in a 4-year contract. The previous contract was set to expire this month.

謝謝，Brett。在第三季，我們持續聚焦於安全、降低美國工廠成本，以及如 Brett 所提到的，歐洲工廠的重整與成本降低。我們已完成與卡內基（賓夕法尼亞州）工廠由美國鋼鐵工人聯合會（United Steelworkers）代表之員工的協商，達成一份為期 4 年的合約。先前的合約原定於本月到期。

During the third quarter, we also had planned outages in the U.S. and Europe, where we took the time to work on critical equipment to ensure reliability. Our safety performance continues to show improvement. As stated in the previous call, we will be relentless when it comes to safety as our goal is a 0 injury workplace.

在第三季期間，我們也在美國與歐洲進行了計畫性停機，並利用時間處理關鍵設備，以確保可靠性。我們的安全表現持續改善。如同上一通電話會議所述，我們在安全方面將毫不鬆懈，因為我們的目標是零傷害的工作場所。

During the quarter, we achieved 2 major milestones with the divestitures of Avonmore and ASW. Excluding impairment charges, these actions are expected to improve Ampco's net income by approximately $16 million to $18 million compared to our last 12-month run rate ended September 30, 2019.

本季我們透過處分 Avonmore 與 ASW 達成兩項重大里程碑。不含減損費用（impairment charges），相較於截至 2019 年 9 月 30 日的過去 12 個月執行水準（run rate），預期這些行動將使 Ampco 的淨利增加約 1,600 萬至 1,800 萬美元。

I'm pleased to say that the work planned for the Avonmore facility prior to its sale in order to finish product for our customers was completed 2 weeks early. This is a testament to the leadership and workforce at Avonmore. I would like to thank them for this effort through this time of uncertainty. All new production has been absorbed by the European cast plants.

我很高興地表示，為了在出售前完成客戶產品而在 Avonmore 廠規劃的工作，提前 2 週完成。這證明了 Avonmore 的領導團隊與員工的努力。在這段充滿不確定性的期間，我要感謝他們的付出。所有新增產能已由歐洲鑄造廠吸收。

In our forged plants in the United States, we continue to take cost out of the system. Our tiered daily management system, where meetings are held at the department, plant, business and corporate levels, continues to evolve and improve to expose issues and drive problem solving. Year-to-date, our efficiencies have improved in our U.S. facilities by 7%. This improvement has held steady from Q2 to Q3.

在美國的鍛造工廠，我們持續將成本自系統中移除。我們的分層每日管理系統（tiered daily management system）——在部門、工廠、事業與公司層級召開會議——持續演進並改善，以揭露問題並推動問題解決。年初至今，我們美國據點的效率提升了 7%。此改善自第二季至第三季維持穩定。

For our European assets, we are currently in the middle of a restructuring initiative to lean out our overhead costs, including the consolidation of some sales offices. Our focus on quality has already yielded benefits. We expect annualized savings of approximately $3 million to $4 million from these activities starting in Q4.

就我們的歐洲資產而言，我們目前正進行一項重整計畫，以精簡間接費用，包括整併部分銷售辦公室。我們對品質的重視已帶來效益。我們預期自第四季起，這些活動將帶來約 300 萬至 400 萬美元的年化節省。

Finally, from a bookings perspective, we have a solid backlog for our rural business with some specialty, grade and size combinations being sold out for the next year.

最後，從接單的角度來看，我們的鄉村業務擁有穩健的訂單積壓，其中部分特殊規格、等級與尺寸組合已售罄至明年。

Thanks, Sam. I'll now turn the call over to Terry Kenny, Air and Liquid Processing Segment President.

謝謝你，Sam。我現在把電話會議交給空氣與液體處理事業部總裁 Terry Kenny。

Thank you, Brett, and good morning. As Brett and Sam discussed, one of our major focuses is the safety of our employees. The Air and Liquid Processing segment has experienced significant improvement in OSHA recordable accidents, which have decreased by more than 50% when compared to prior year. This is a segment-wide effort, and every employee is responsible for this success and the success of the safety program. And I thank them for their efforts.

謝謝你，Brett，大家早安。正如 Brett 與 Sam 所討論的，我們的主要重點之一是員工安全。空氣與液體處理事業部在 OSHA 可記錄事故方面有顯著改善，與前一年相比下降超過 50%。這是全事業部共同努力的成果，每位員工都對這項成功以及安全計畫的成功負有責任。我也感謝大家的付出。

Net sales for Air and Liquid Processing segment for the third quarter ended September 30, 2019, were 3% below that of the prior year as a result of changes in customer-required delivery dates. The operating income for the quarter, when compared to prior year, was negatively impacted by the lower sales and the shift in product mix.

截至 2019 年 9 月 30 日止第三季，空氣與液體處理事業部的淨銷售額因客戶要求的交貨日期變更而較前一年下降 3%。與前一年相比，本季營業利益受到較低銷售額以及產品組合轉移的不利影響。

The segment's backlog as of September 30, 2019, approximated $53 million, which compares favorably to approximately $44.4 million at December 31, 2018. The backlog at each of the 3 businesses which make up the Air and Liquids Processing segment have increased when compared to December 31, 2018.

截至 2019 年 9 月 30 日，該事業部的訂單積壓約為 5,300 萬美元，較 2018 年 12 月 31 日約 4,440 萬美元為佳。構成空氣與液體處理事業部的 3 項業務，其訂單積壓相較 2018 年 12 月 31 日均有所增加。

We are now seeing positive results of our process improvement efforts in increased productivity and material utilization improvements. We are pleased with the results to date and confident that the success we have experienced will continue to grow.

我們目前已在生產力提升與材料利用率改善方面，看見流程改善努力帶來的正面成果。我們對迄今的成果感到滿意，並有信心我們所取得的成功將持續擴大。

Thank you, Terry. With that, I'd like to hand the call over to our CFO, Mike McAuley, to review our financial results for the quarter in more detail. Mike?

謝謝你，Terry。接下來，我想把電話會議交給我們的財務長 Mike McAuley，更詳細地檢視本季的財務結果。Mike？

Thank you, Brett. Good morning, and thank you for joining our call today. My commentary today contains the use of certain non-GAAP measures. I refer you to our disclosures regarding non-GAAP measures and the related non-GAAP financial measures reconciliation schedule included in this morning's earnings release. I'd like to focus on our Q3 results this morning. A discussion of year-to-date results is included in today's earnings release.

謝謝你，Brett。大家早安，感謝各位今天加入我們的電話會議。我今天的說明將使用某些非 GAAP 衡量指標。請參閱我們今早發布的財報新聞稿中，關於非 GAAP 衡量指標的揭露，以及相關非 GAAP 財務衡量指標調節表。我想把重點放在我們第三季的結果。截至目前年度的結果討論已包含在今天的財報新聞稿中。

Ampco's net sales from continuing operations for the third quarter of 2019 were $90.9 million. This compares to net sales from continuing operations for the third quarter of 2018 of $98.8 million.

Ampco 2019 年第三季持續營業業務的淨銷售額為 9,090 萬美元。相較之下，2018 年第三季持續營業業務的淨銷售額為 9,880 萬美元。

Net sales in the Forged and Cast Engineered Products segment declined approximately 10% compared to the prior year period, primarily due to lower sales of forged engineered products to the oil and gas industry. Net sales for the Air and Liquid Processing segment for the third quarter of 2019 were relatively comparable to prior year. I'll comment more on segment level results momentarily.

鍛造與鑄造工程產品事業部的淨銷售額較去年同期約下降 10%，主要因對油氣產業的鍛造工程產品銷售較低。2019 年第三季空氣與液體處理事業部的淨銷售額與去年同期大致相當。我稍後會就各事業部層級的結果再多做說明。

Gross profit as a percentage of net sales was 16.9% for the third quarter of 2019 and was approximately flat with the third quarter of 2018. Higher pricing for mill rolls and operating efficiencies within the domestic forged operations were offset by the effects of weaker pricing for forged engineered products and changes in product mix for the Air and Liquids Systems Processing segment.

2019 年第三季毛利率（占淨銷售額百分比）為 16.9%，與 2018 年第三季大致持平。軋輥較高的定價以及國內鍛造業務的營運效率提升，被鍛造工程產品較弱的定價影響，以及空氣與液體系統處理事業部產品組合變動的影響所抵銷。

Selling and administrative expenses of $12.4 million or 13.6% of net sales for the third quarter of 2019 were down compared to $14 million or 14.2% of net sales for the third quarter of 2018. We were able to show a year-over-year reduction in SG&A for the quarter due in part to our reduction in force actions earlier this year, lower professional fees associated with restructuring activities as well as lower volume-driven commissions expense.

2019 年第三季銷售與管理費用為 1,240 萬美元，占淨銷售額 13.6%，較 2018 年第三季的 1,400 萬美元（占淨銷售額 14.2%）下降。本季 SG&A 年對年下降，部分原因是我們今年稍早的裁員措施、與重整活動相關的專業費用降低，以及因銷量下降而帶動的佣金費用降低。

Depreciation and amortization expense of $4.5 million for the third quarter of 2019 was down compared to $5.4 million for the third quarter of 2018 due in part to the sale of our Vertical Seal division last year and the cessation of depreciation at the Avonmore facility beginning in Q2 in connection with the write-down of certain assets to their estimated net realizable value.

2019 年第三季折舊與攤銷費用為 450 萬美元，較 2018 年第三季的 540 萬美元下降，部分原因是我們去年出售 Vertical Seal 事業部，以及自第二季起因將 Avonmore 廠部分資產減記至其估計可變現淨值而停止提列折舊。

Loss from continuing operations on an as-reported GAAP basis for the third quarter of 2019 was $1.3 million. This compared to a loss from continuing operations in the prior year quarter of $2.8 million, the improvement being driven in part by lower losses at the Avonmore facility as operations were curtailed in anticipation of its sale and the year-over-year reduction in SG&A I just described.

以 GAAP 申報基礎計，2019 年第三季持續營業業務虧損為 130 萬美元。相較之下，去年同期持續營業業務虧損為 280 萬美元；改善部分來自 Avonmore 廠在預期出售而縮減營運下虧損降低，以及我剛才所述 SG&A 的年對年下降。

Excluding the restructuring-related costs and estimated temporary excess costs of the Avonmore facility as defined in the earnings release this morning, non-GAAP adjusted loss from continuing operations was approximately $0.1 million for the quarter. This reflects an improvement of $0.6 million compared to the prior year quarter on the same basis. This improvement is primarily attributable to higher pricing for mill rolls, manufacturing efficiencies in our domestic forged operations and lower overhead costs, partially offset by lower sales of forged engineered products to the oil and gas industry and the effect of a shift in product mix in the Air and Liquid Processing segment.

排除今早財報新聞稿所定義之與重整相關成本，以及 Avonmore 廠估計的暫時性超額成本後，持續營業業務的非 GAAP 調整後虧損本季約為 10 萬美元。以相同基礎計，較去年同期改善 60 萬美元。此改善主要歸因於軋輥較高的定價、國內鍛造業務的製造效率提升與間接費用降低；但部分被對油氣產業的鍛造工程產品銷售下降，以及空氣與液體處理事業部產品組合轉移的影響所抵銷。

Other income declined slightly for the third quarter of 2019 when compared to the prior year quarter. Although we recorded a net gain of $2.3 million on the curtailment of the defined benefit pension and postretirement plans and recognition of special termination benefits associated with the divestiture of Avonmore facility in the current year quarter, this was offset by higher transaction losses on foreign exchange, higher interest expense and the timing of a dividend received from one of our cast roll joint ventures in the prior year quarter.

2019 年第三季其他收益較去年同期略為下降。雖然本季因 Avonmore 廠剝離而對確定給付退休金與退休後福利計畫的縮減（curtailment）認列 230 萬美元淨收益，並認列特殊終止福利，但此項收益被較高的外匯交易損失、較高的利息費用，以及去年同期自我們其中一家鑄輥合資企業收到股利的時點差異所抵銷。

At the bottom line, the corporation reported a GAAP net loss from continuing operations of $1.2 million or $0.10 per common share for the third quarter of 2019 compared to a net loss of $3 million or $0.24 per common share for the third quarter of 2018. The corporation also reported a net loss from continuing -- from discontinued operations, reflecting the operations of our Canadian subsidiary, ASW Steel, of $3.4 million or $0.27 per common share for the third quarter of 2019 compared to a net loss of $3.4 million or $0.28 per common share for the third quarter of 2018. With the divestiture of this business at September 30, 2019, we will no longer be carrying this discontinued operation going forward.

在最終損益方面，公司 2019 年第三季持續營業業務的 GAAP 淨損為 120 萬美元，或每股普通股虧損 0.10 美元；相較之下，2018 年第三季淨損為 300 萬美元，或每股普通股虧損 0.24 美元。公司亦報告已終止營業業務（反映我們加拿大子公司 ASW Steel 的營運）之淨損為 340 萬美元，或每股普通股虧損 0.27 美元；相較之下，2018 年第三季淨損為 340 萬美元，或每股普通股虧損 0.28 美元。隨著該業務於 2019 年 9 月 30 日完成剝離，未來我們將不再列報此已終止營業業務。

With respect to results of our business segments, in the Forged and Cast Engineered Products segment, despite approximately a 10% decline in sales in Q3 due mainly to a drop in forged engineered product demand in the oil and gas industry, the segment's operating results improved from a year ago by $1.1 million primarily due to lower losses at the Avonmore facility as operations were curtailed in anticipation of its sale. The effect from lower forged engineered product sales was offset by better pricing for our mill rolls. Manufacturing efficiencies for our domestic forged operations were partially mitigated by unabsorbed costs primarily at our European operations due to seasonal summer maintenance shutdown activity.

就我們各業務部門的業績而言，在鍛造與鑄造工程產品（Forged and Cast Engineered Products）部門，儘管第三季銷售額約下滑10%，主要係因油氣產業對鍛造工程產品需求下降所致，但該部門的營運成果較去年同期改善110萬美元，主要因Avonmore廠在預期出售而縮減營運後，其虧損降低所致。鍛造工程產品銷售下滑的影響，已由我們軋輥（mill rolls）較佳的定價所抵銷。我們國內鍛造業務的製造效率提升，部分被未吸收成本所抵銷，該未吸收成本主要發生於我們的歐洲營運，原因是季節性的夏季維修停機活動。

Net sales for the Air and Liquid Processing segment for the third quarter of 2019 were down slightly approximately 3% compared to prior year, whereas the segment's operating income for the second quarter of 2019 decreased by 23% or $685,000 versus prior year principally due to changes in product mix and some shipment timing issues as Terry described earlier.

2019年第三季空氣與液體處理（Air and Liquid Processing）部門的淨銷售額較去年同期小幅下降約3%；而該部門2019年第二季的營業利益較去年同期下降23%或68.5萬美元，主要由於產品組合變化以及如Terry先前所述的一些出貨時點問題。

Now I will review a few cash-related items from -- for continuing operations. Capital expenditures for the third quarter of 2019 were $3.4 million for continuing operations and are at $7.2 million year-to-date. Cash and cash equivalents for continuing operations of $9.8 million at September 30, 2019, decreased compared to the December 31, 2018, balance of $19.7 million.

接下來我將回顧幾項與現金相關的事項——針對持續營運。2019年第三季持續營運的資本支出為340萬美元，年初至今累計為720萬美元。截至2019年9月30日，持續營運的現金及約當現金為980萬美元，較2018年12月31日的1,970萬美元餘額有所下降。

As I explained on prior calls, cash from our domestic customer remittances are now swept daily against the credit line to minimize borrowings. As a result, we are maintaining minimal domestic cash, and the reported cash balance reflects primarily foreign cash.

如我在先前電話會議中所說，我們來自國內客戶匯款的現金現在每日會自動掃入（swept）並用以抵減信用額度，以將借款降至最低。因此，我們維持最低限度的國內現金，而所報告的現金餘額主要反映海外現金。

Drawings on the Ampco revolving credit facility are $38.4 million at December 30, 2019, which is down versus the $41.3 million at June 30. The change reflects the proceeds from the 2 divestitures, which closed on September 30, which were used to pay down the revolver, but this was partly offset by having drawn on the revolver to fund operations earlier in the quarter. The increase in revolver borrowings compared to December 31, 2018, balance of $14.3 million reflects the use of the credit facility as planned to repay the promissory notes and interest, which were retired in the first quarter of 2019. At September 30, 2019, in addition to the cash balance, the corporation also has remaining availability on the revolver of approximately $21 million.

截至2019年12月30日，Ampco循環信用融資（revolving credit facility）的動用金額為3,840萬美元，較6月30日的4,130萬美元下降。此變動反映兩項資產剝離（divestitures）於9月30日完成交割所取得的款項，並用於償還循環信貸，但部分被本季較早時為營運資金而動用循環信貸所抵銷。與2018年12月31日的1,430萬美元餘額相比，循環信貸借款增加，反映如計畫使用該信用融資以償還本票（promissory notes）及利息；該等本票已於2019年第一季清償結清。截至2019年9月30日，除現金餘額外，本公司在循環信貸上仍有約2,100萬美元的可用額度。

I will now turn the call back over to Brett for some closing remarks.

現在我把電話交回給Brett做一些結語。

Thank you, Mike. I'm excited and encouraged by the progress our team has made thus far. While we've made substantial improvements, we're not finished. We'll continue to push for top line growth and operational efficiencies across our core businesses.

謝謝你，Mike。我對我們團隊迄今所取得的進展感到振奮並受到鼓舞。雖然我們已做出重大改善，但我們尚未完成。我們將持續在核心業務中推動營收成長與營運效率提升。

During the fourth quarter, we expect improved operating income as a result of projects and initiatives that we've discussed this morning. Our employees remain focused and committed to building a sustainable and profitable future for our businesses. I have great confidence as we move forward.

在第四季，我們預期因今天上午所討論的專案與措施而使營業利益改善。我們的員工仍專注並致力於為我們的業務打造可持續且具獲利性的未來。隨著我們向前邁進，我充滿信心。

Thank you again for joining us for Ampco-Pittsburgh's conference call today. At this time, we will open up the line for your questions.

再次感謝各位參加今天Ampco-Pittsburgh的電話會議。現在我們將開放提問。

(Operator Instructions) Our first question comes from Marco Rodriguez with Stonegate Capital.

（接線員指示）我們的第一個問題來自Stonegate Capital的Marco Rodriguez。

I was wondering if you could talk a little bit more in regard to initiatives to improve your operating efficiencies. Obviously, you've made a couple of significant divestitures. If you can just put some more color and some more metrics as far as what we should be expecting as you guys move into fiscal '20 to -- for those types of initiatives?

我想請問你們是否可以再多談一些關於提升營運效率的措施。顯然你們已完成幾項重要的資產剝離。如果可以的話，能否就我們在你們進入2020會計年度時，對這類措施應有的預期，提供更多背景與一些衡量指標？

This is Sam. On the European side, I mentioned we initiated a restructuring and cost improvement program there. That's mainly some overhead, redundancies that have been -- that we're negotiating through and getting reduced, and that's occurring. And most of that is completed and some sales office consolidation, which will be completed by the end of Q1. So we expect to see a $3 million to $4 million improvement out of that activity. That -- also included in that is a scrap reduction program, where we've already kind of captured the benefit there starting in Q4. So $1 million of that's done, and 80% of the restructuring has been completed at this point. Those -- that's the main thing that's occurred in this quarter.

我是Sam。在歐洲方面，我提到我們已在那裡啟動重整與成本改善計畫。這主要涉及一些管理費用與重複職能——我們正在協商並加以削減，而且正在進行中。其中大部分已完成，另有部分銷售辦公室整併將在第一季末前完成。因此我們預期可帶來300萬至400萬美元的改善。此外，該計畫也包含一項減少報廢（scrap reduction）方案，我們已自第四季開始大致掌握其效益。其中100萬美元的效益已實現，目前重整作業已完成80%。這些——這是本季發生的主要事項。

In the U.S. side, we continue to perform strong compared to last year. There will be more opportunity. But I think we've captured -- we'll switch our focus to Europe.

在美國方面，我們相較去年仍維持強勁表現。未來仍有更多機會。但我認為我們已掌握——我們將把重點轉向歐洲。

Understood. And then in terms of the Air and Liquid business, you mentioned on the call that there were some timing issues and switches in mix. If you could just provide some more detail in regard to that?

了解。另外就空氣與液體業務而言，你們在電話會議中提到有一些時點問題以及產品組合的變動。能否就此提供更多細節？

Yes. This is Terry. In the -- at the end of the third quarter, a few customers asked -- requested -- construction projects were delayed. They asked us to delay some shipments. So we had no choice but to accommodate that. And the switch -- the shift in product mix was to some lower-margin business from our air handling business to our -- to some lower-margin business at our air handling business from some more profitable business from our centrifugal pump business.

好的。我是Terry。在第三季末，有幾位客戶提出——要求——其建設專案延後。他們要求我們延後部分出貨。因此我們別無選擇，只能配合。而產品組合的轉變——是從我們離心泵（centrifugal pump）業務中較高獲利的業務，轉向我們空氣處理（air handling）業務中一些較低毛利的業務。

And those delayed shipments, are they going to be completed in Q4? Or are they pushed out into fiscal '20?

那些延後的出貨會在第四季完成嗎？還是會延到2020會計年度？

They will be shipped in Q4 if they haven't already been shipped by now.

如果到現在還沒出貨的話，將會在第四季出貨。

Got you. And can you quantify the dollar amount?

了解。那你能量化其金額嗎？

No. I...

不。我……

We're down about 3% compared to prior years.

我們較前幾年約下降3%。

We're down about -- exactly. Approximately 3% of the quarter of shipments were delayed.

我們約下降——沒錯。本季約有3%的出貨被延後。

Our next question comes from Justin Bergner with Gadot (sic) [G.research].

我們的下一個問題來自 G.research 的 Justin Bergner（Gadot〔音〕）。

Sorry for the company mispronunciation, G.research. So the mix in Air and Liquid Processing, is that dynamic supposed to continue? Or will that be sort of sorted out once these delayed shipments take effect?

抱歉把公司名稱唸錯了，G.research。那麼在 Air 與 Liquid Processing 的組合占比方面，這種變動趨勢預期會持續嗎？還是等這些延遲出貨開始生效後就會理順？

It will be sorted out once the delayed shipments occur.

等延遲出貨發生後就會理順。

Okay. Great. And then could you just remind us what the proceeds are from the combined sales of the Avonmore facility and the ASW, Canadian specialty steel operation?

好的。很好。另外，能否請你提醒我們，Avonmore 廠房與 ASW（加拿大特殊鋼業務）合併出售的處分所得是多少？

Yes, I can. Justin, this is Mike. I can fill you in on that. And you'll see -- we didn't disclose it when we announced the deals. But you'll be seeing it in our Q, which will be coming out shortly. Combined, after consideration of the purchase price adjustment mechanism for changes in net working capital, the combined proceeds from the divestitures was in the range of $8 million. We used those proceeds to pay down the line on the day that proceeds came in.

可以。Justin，我是 Mike。我可以跟你說明。你會看到——我們在宣布交易時沒有揭露。但你很快會在我們即將發布的 Q（季報）中看到。合併來看，在考量因淨營運資本變動而進行的購買價格調整機制後，兩項處分的合計所得約在 800 萬美元左右。我們在款項入帳當天就用這些所得償還了授信額度。

Our next question comes from David Wright with Henry Investment Trust.

我們的下一個問題來自 Henry Investment Trust 的 David Wright。

Sam made a comment in his remarks about the $16 million to $18 million of operating profit swing from having completed the 2 divestitures. I just wanted to make sure I understood that. Could you go over it again?

Sam 在發言中提到，完成兩項處分後，營業利益會有 1,600 萬到 1,800 萬美元的擺動。我只是想確認我理解正確。你能再說一次嗎？

Yes. David, it's Mike. He didn't say operating profit. He said net income, number one, because we're talking about ASW, which is a discontinued operation. So if you look at our P&L and you look at our earnings release this morning, you see that results from discontinued operations, which is below loss from continuing operations. That's all ASW, and it's $9 million year-to-date.

好的。David，我是 Mike。他不是說營業利益。第一，他說的是淨利，因為我們談的是 ASW，而它屬於停業單位。所以如果你看我們的損益表，以及今天早上發布的財報新聞稿，你會看到停業單位損益是在繼續營業單位損益之下。那全部都是 ASW，今年迄今是 900 萬美元。

We were looking -- he was making a reference to the impact of losing that on -- compared to a kind of an annualized run rate by looking at our last 4 finished quarters. And if you go back in time and do that math, that's a big chunk of it. And then he was also including the Avonmore temporary excess costs, which if you look at our -- the attachment to our press release, we've identified the 9 months' worth of that piece on our non-GAAP financial measures disclosure. And if you go back and look our 4-quarter run rate on that and you're excluding things like impairment and so forth, one-off items, you can get these numbers that he cited, something in the range of $16 million to $18 million combined at the net income level.

我們當時在看——他是在提到失去那部分對……的影響，並且是用最近 4 個已完成季度去看一個年化的運行水準來比較。如果你回頭做那個計算，那是其中很大一塊。另外他也把 Avonmore 的暫時性超額成本算進去；如果你看我們新聞稿的附件，我們在非 GAAP 財務衡量揭露中已標示出 9 個月的那部分。如果你回頭看那個 4 季度的運行水準，並排除減損等一次性項目，你就能得到他引用的數字，在淨利層級合計大約 1,600 萬到 1,800 萬美元。

So that's what it would have been if you hadn't had these 2 things essentially.

所以基本上，如果沒有這兩件事，原本就會是那樣？

Theoretically, yes. And there's another item in there as well, David, where I mentioned on my remarks that we recorded a $2.3 million net gain on the curtailment of certain pension and postretirement benefit plan numbers that are -- it's in other income expense. That's where that resides geographically in the P&L. So we netted that down, that $2.3 million gain as well.

理論上，是的。另外還有一項，David，我在發言中也提到，我們就某些退休金與退休後福利計畫的縮減（curtailment）認列了 230 萬美元的淨收益——它列在其他收益費用。在損益表上，它地理位置（呈列位置）就在那裡。所以我們也把那 230 萬美元的收益一併淨額化納入。

Our next question is a follow-up question from Justin Bergner with G.research.

我們的下一個問題是來自 G.research 的 Justin Bergner 的追問。

I just want to understand, within the breakeven adjusted results for this quarter, how much was Avonmore still weighing that down to whatever direct or indirect costs were incurred after whatever you adjusted back out?

我想了解，在本季調整後接近損益兩平的結果中，Avonmore 在你們把該調整項回沖之後，仍然因為直接或間接成本而拖累了多少？

Yes. Justin, it's Mike again. On the attached -- the table attached to the press release, we've kind of spiked that out that we think the excess cost of Avonmore in the third quarter are about $685,000. It's a little bit lower than -- it's lower than we had been seeing in prior quarters because it was starting -- we started the wind down earlier. So we started seeing the benefit already of getting out of it in the third quarter. If you look at that same value, if you pull up the last quarter's press release, it was $1.7 million; the prior press release, $2.2 million. So I mean we've been -- as we started winding down operations, we're starting to already harvest some of the benefit. But when we said it was a $9 million to $10 million benefit, we were talking about a run rate from around the earlier part of the year when it was more in the range of $2 million to $2.2 million kind of a quarterly value, which if you annualize that, that's how we got to the impact versus that prior run rate.

好的。Justin，我又是 Mike。在新聞稿所附的表格中，我們已把它拆出來：我們認為第三季 Avonmore 的超額成本大約是 68.5 萬美元。這比——比我們前幾季看到的要低，因為我們較早開始收尾（wind down）。所以第三季我們已經開始看到退出所帶來的效益。如果你看同一個數值、把上一季的新聞稿調出來，是 170 萬美元；再前一季的新聞稿是 220 萬美元。也就是說，隨著我們開始逐步收尾營運，我們已經開始收割一些效益。但當我們說有 900 萬到 1,000 萬美元的效益時，我們談的是以年初較早時期、每季約 200 萬到 220 萬美元的水準作為運行基準；把那個年化後，就是我們相對於先前運行水準所得到的影響。

Okay. Got it. Yes. So it seems like all the Avonmore costs are backed out when you get to that breakeven number. Okay.

好的。了解。是的。所以看起來，當你們算到那個損益兩平的數字時，Avonmore 的所有成本都已經被回沖排除了。好的。

Yes.

是的。

I just want to make sure that was the case.

我只是想確認確實如此。

Okay.

好的。

(Operator Instructions) At this time, I'm seeing no further questions. This concludes our question-and-answer session as well as today's conference. Thank you for joining. You may now disconnect.

（接線員指示）目前我看到沒有其他問題。這也結束了我們的問答環節以及今天的電話會議。感謝各位參與。您現在可以掛線。