Modine Manufacturing Company (MOD) 2007 Q1 法說會逐字稿

Good day, everyone, and welcome to the Modine 2006 First Quarter Earnings Conference Call. Today's conference is being recorded. For opening remarks and introductions, I would like to turn the conference over to the head of Investor Relations and Corporate Communications, Ms. Wendy Wilson. Please go ahead.

各位大家好，歡迎參加 Modine 2006 會計年度第一季財報電話會議。本次會議將進行錄音。接下來請投資人關係與企業傳播主管 Wendy Wilson 女士致開場詞並介紹與會者。請開始。

Thank you, Miranda. Good morning, everyone, and welcome to today's conference call. Dave Rayburn, Modine's CEO and President, is with us today to give us some comments on the year and today's announcement, and he'll address any questions or concerns you might have. We're also joined by Brad Richardson, our Executive Vice President of Finance and Chief Financial Officer. Before we begin, I'd like to provide our usual caution that this morning's call may contain forward-looking statements such as forecast of business performance and Company results, and expectations about the Company's plans and future initiatives. Actual results may differ materially from those projected. For an in-depth discussion of risk factors that could cause actual results to differ from those mentioned on today's call, please see today's press release and our Form 10-Q for this quarter, which should be filed in early August. Also, you may reference the Company's annual report on Form 10-K for the period ended March 31, 2006. If you've not received today's release, it's available on our website, www.modine.com. Now I'd like to turn the call over to Dave.

謝謝你，Miranda。各位早安，歡迎參加今天的電話會議。Modine 的執行長兼總裁 Dave Rayburn 今天與我們同在，將就本年度及今日公告發表一些評論，並回應各位可能提出的問題或疑慮。我們也邀請到財務執行副總裁暨財務長 Brad Richardson 一同參與。在開始之前，我想先提出我們一貫的提醒：今天上午的電話會議可能包含前瞻性陳述，例如對營運表現與公司業績的預測，以及對公司計畫與未來倡議的期待。實際結果可能與預測有重大差異。如需深入了解可能導致實際結果與今日電話會議所述不同的風險因素，請參閱今日新聞稿以及本季的 Form 10-Q（預計於 8 月初提交）。您也可參考公司截至 2006 年 3 月 31 日止期間的 Form 10-K 年報。若您尚未收到今日新聞稿，可至我們網站 www.modine.com 取得。現在我把電話交給 Dave。

Thanks, Wendy, and good morning, and thank you for joining us for our first quarter conference call. I assume you have had an opportunity to review yesterday's press releases, that's plural, and this morning's releases on additional repositioning activity. Yesterday we had our annual meeting here in Racine, and my presentation can be accessed on our website under the subject of Investor Relations. I will make some comments on the quarter, the full year outlook, and provide an update on our repositioning activities, and then Brad will follow-up with the financials.

謝謝你，Wendy。各位早安，也感謝各位參加我們第一季電話會議。我想各位已經有機會閱讀昨天發布的新聞稿（不只一則），以及今天上午關於額外重整定位活動的新聞稿。昨天我們在 Racine 召開年度股東會，我的簡報可在我們網站的「投資人關係」專區取得。我將就本季表現、全年展望，以及我們重整定位活動的最新進度做一些說明，接著 Brad 會補充財務數據。

In regard to the first quarter, we had record first quarter sales up 8.5%, driven by strong markets, especially in our heavy truck and off-highway businesses, plus our lease and acquisitions. Earnings of $0.51 a share were down year-over-year. Results were significantly impacted by higher material prices and selected customer price-down pressure. In addition, we incurred one-time repositioning charges of $2.1 million pre-tax. We did have the benefit of reduced tax expenses as a result of the acquisition in Brazil.

關於第一季，我們第一季銷售額創下歷史新高，年增 8.5%，主要受惠於市場強勁，特別是重型卡車與非公路（off-highway）業務，以及我們的租賃與併購。每股盈餘 0.51 美元，較去年同期下滑。業績受到原物料價格上漲及部分客戶降價壓力的顯著影響。此外，我們認列一次性重整定位費用，稅前 210 萬美元。我們也因巴西併購案而享有稅負費用降低的效益。

To respond to our commodity pressures, we have initiated incremental pricing actions over and above our agreements with many of our customers. We have increased, also, our aluminum hedging program which Brad will review in detail.

為因應大宗商品成本壓力，我們已在與多數客戶既有協議之外，啟動額外的調價措施。同時，我們也提高了鋁材避險計畫，Brad 將在稍後詳細說明。

Fiscal '07 will be a challenging year, a year of transition, as we launch new business and aggressively implement our repositioning actions. Yesterday at our annual meeting I reviewed our response to the challenges we are facing, and some of those I would like to highlight now.

2007 會計年度將是充滿挑戰的一年，也是轉型過渡的一年，因為我們將推出新業務並積極落實重整定位措施。昨天在年度股東會上，我回顧了我們對目前挑戰的因應作法，其中有幾點我想在此特別強調。

A key area for Modine is technology. It's a core competency that we've always had a tremendous positive reputation. New programs are being launched this year driven by new technology, developments that have made our next generation -- such as our next generation exhaust gas recirculation coolers. I really feel in the engine segment we are state-of-the-art. We currently are focusing on long-term as we pursue programs both in core business and new markets, like fuel cells. To demonstrate our capabilities we announced this week a new idle off system for heavy truck powered by a fuel cell APU, utilizing a CO2 air conditioning and heating system. We have a Class A truck quipped with this technology and are currently reviewing that with our key customers. I am confident, and many of our customers are, that Modine's overall technology is second to none.

對 Modine 而言，一個關鍵領域是技術。這是我們一向具備的核心能力，也一直享有極佳的正面聲譽。今年將推出由新技術驅動的新專案，這些發展促成我們的下一代產品——例如下一代廢氣再循環（EGR）冷卻器。我確實認為在引擎領域，我們處於最先進水準。目前我們著眼長期，同時在核心業務與新市場（如燃料電池）上推進各項專案。為展現我們的能力，我們本週宣布一套用於重型卡車的全新怠速關閉系統（idle off system），由燃料電池 APU 供電，並採用 CO2 空調與加熱系統。我們已有一輛配備此技術的 Class A 卡車，並正與主要客戶共同評估。我有信心——而且我們許多客戶也同樣認為——Modine 的整體技術實力無出其右。

Our second key area is accelerated cost reductions. We have multiple actions in this area, but the key one is purchasing. Sixty-one percent of our cost is materials. We have established a global organization versus a regional focus, and we will be increasing our low-cost country sourcing from 10% today to 20% by year-end, and 40% long-term.

第二個關鍵領域是加速成本降低。我們在此領域有多項行動，但最重要的是採購。我們成本中有 61% 來自材料。我們已建立全球化組織、取代以區域為主的模式，並將把低成本國家採購占比從目前的 10% 提升至年底的 20%，長期目標為 40%。

The third major area is manufacturing. This is a key area for our repositioning. First, we are increasing utilization of existing plants. We have previously announced closure of our Taiwan facility, the closure of our technical center in Harrisburg, Kentucky, and this morning we announced the closure of a plant in Richland, South Carolina, which its production will become consolidated into our plant in McHenry, Illinois. We also announced this morning our intent to close a plant in Clinton, Tennessee. Also part of this activity we will be moving production and equipment from several facilities to increase utilization of our Harrisburg, Kentucky plant. There are additional actions under study to further consolidate existing facilities both here in North America and Europe.

第三個主要領域是製造。這是我們重整定位的關鍵環節。首先，我們將提高既有工廠的產能利用率。我們先前已宣布關閉台灣廠、關閉位於肯塔基州哈里斯堡（Harrisburg）的技術中心；而今天上午我們宣布關閉南卡羅來納州里奇蘭（Richland）的一座工廠，其產能將整併至伊利諾伊州麥亨利（McHenry）工廠。今天上午我們也宣布有意關閉田納西州克林頓（Clinton）的一座工廠。此外，作為此項行動的一部分，我們將把多個據點的生產與設備移轉，以提高肯塔基州哈里斯堡工廠的利用率。我們也正在研究其他措施，以進一步整併北美與歐洲的既有設施。

The other segment of manufacturing is low-cost manufacturing. We previously announced the purchase of the remaining 50% of our joint venture in Brazil. We are planning to move some Legacy work from high-cost countries to Brazil over the next year. Plus, we'll be sourcing a new product, [Barplaque] oil coolers to support our powertrain cooling module business for trucks and off-highway for both North America and Europe. This is a natural for low-cost country sourcing utilizing a proven Modine European design but utilizing our low-cost manufacturing base and the product size, which makes it attractive because of the logistics cost often incurred in low-cost country sourcing.

製造的另一個面向是低成本製造。我們先前已宣布收購巴西合資企業剩餘 50% 股權。未來一年內，我們計畫將部分 Legacy 業務從高成本國家移轉至巴西。此外，我們將採購一項新產品——[Barplaque] 機油冷卻器——以支援我們面向卡車與非公路市場的動力總成冷卻模組業務，涵蓋北美與歐洲。這非常適合採用低成本國家採購：沿用已驗證的 Modine 歐洲設計，同時運用我們的低成本製造基地；且由於產品尺寸因素，使其在物流成本（低成本國家採購常會產生）方面更具吸引力。

Yesterday we also announced the construction of a new plant in Nuevo Loredo, Mexico, to support new business we have secured as a Tier 2, and more on that new business will be announced within the quarter. We are very excited about this new relationship that will be announced. We are also active in developing programs both in Eastern Europe and in India, and expect to have additional announcements for both regions within the third quarter.

昨天我們也宣布將在墨西哥新拉雷多（Nuevo Loredo）興建新工廠，以支援我們以二階供應商（Tier 2）身分所取得的新業務；關於該新業務的更多內容，將在本季內對外宣布。我們對即將公布的這項新合作關係感到非常振奮。我們也正積極在東歐與印度開發相關專案，並預期在第三季內就這兩個地區發布更多公告。

The other major portion of our repositioning is a $20 million reduction in our SG&A cost. To date we have announced and implemented the 15% reduction in our Korean operations at Asan City, Korea. We also have in process an early retirement program in North America. We are also engaged in reviewing further actions in regards to our Racine and our European headquarters. We are looking at both business structure as well as the support departments. All of this coupled to drive the $20 million out of our SG&A cost.

我們重整定位的另一個主要部分，是將 SG&A（銷售、一般及管理費用）降低 2,000 萬美元。截至目前，我們已宣布並執行韓國牙山市（Asan City）營運據點 15% 的人力縮減。我們也正在北美推動提前退休方案。同時，我們也在檢視針對 Racine 與歐洲總部的進一步措施。我們同時從業務架構與支援部門兩方面著手。所有這些行動結合起來，將推動我們從 SG&A 成本中削減 2,000 萬美元。

The third key area is sales growth. We reiterated our new business wins of $300 million. As a result of new business wins, and I would reference a number of recent announcements that we have made. With a low-cost manufacturing base as we're driving and our excellent technology, we will improve our bid success rate and have targeted $150 million of additional new business over the next five years over and above the $300 million I mentioned earlier.

第三個關鍵領域是銷售成長。我們重申新業務得標金額為 3 億美元。這些新業務得標，亦可參考我們近期發布的多項公告。在我們所推動的低成本製造基地以及卓越技術的支撐下，我們將提升投標成功率，並在未來五年內，於先前提到的 3 億美元之外，再額外鎖定 1.5 億美元的新業務目標。

The last area that we've been very active in the last few years is acquisitions. This will continue to be a high priority, and given our balance sheet we can do that. We have made four acquisitions in the last two years with sales of over $400 million in incremental sales. Our priorities are footprint expansion, globalization, expanding systems capability still within the thermal region but expanding our systems capability.

最後一個領域，是我們過去幾年非常積極投入的併購。這仍將是高度優先事項；以我們的資產負債表狀況，我們有能力持續進行。過去兩年我們完成四項併購，帶來超過 4 億美元的新增銷售額。我們的優先方向包括版圖擴張、全球化，以及在熱管理領域內擴大系統能力並持續強化系統整合能力。

The final area is building specialty HVAC, very similar to our Airedale acquisition that we made last year.

最後一個領域是建築專用 HVAC，與我們去年完成的 Airedale 併購非常相似。

Finally, we have a deep study going on of potential new markets where we can take our thermal tricks and skills into new areas and drive potential sales growth and earnings.

最後，我們正在深入研究一些潛在的新市場，在這些市場中我們可以把熱管理方面的訣竅與技能帶入新的領域，並推動潛在的銷售成長與獲利。

I am very confident we will improve our cost structure coupled with further growth to meet our stated goals of 11% to 12% return on average capital employed through the cycle. This will happen. We just have to execute the plans we have.

我非常有信心，我們將在改善成本結構的同時，配合進一步成長，以達成我們所宣示的目標：在景氣循環期間平均投入資本報酬率達 11% 至 12%。這一定會發生。我們只需要把既定計畫執行到位。

We also announced yesterday two key executive programs. Tom Burke was promoted to Executive Vice President and Chief Operating Officer, and Bob Kampstra was promoted to Corporate Controller. So, with that, Brad, would you go through some financials?

我們昨天也宣布了兩項關鍵的高階主管任命計畫。Tom Burke 晉升為執行副總裁兼營運長（COO），Bob Kampstra 晉升為公司總會計長（Corporate Controller）。那麼，Brad，你可以帶大家看一下財務數據嗎？

Thank you very much, Dave, and good morning to everyone. As you saw from our announcement yesterday, earnings per share from continuing operations came in at $0.51 per share, which was down from last year's first quarter of $0.60 per share, respectable considering the pressures we have on our costs, in particular, raw material, and the selective price-down pressures we have experienced primarily in our automotive business. Consolidated results from continuing operations for the quarter included recorded revenues of $430.4 million, up 8.5% over last year. It is important to note that excluding the impact of acquisitions and foreign currency rate changes, underlying sales grew by 19 million, or 4.8%, with organic growth driven by exceptionally strong demand for our North American truck and global heavy-duty industrial businesses. We also benefited from numerous smaller product launches that have come on stream since last year.

非常感謝你，Dave，也向各位道早安。如同各位從我們昨天的公告所看到的，持續營運每股盈餘為每股 0.51 美元，低於去年第一季的每股 0.60 美元；考量到我們成本面臨的壓力，特別是原物料，以及我們主要在汽車業務所經歷的選擇性降價壓力，這樣的表現仍算不錯。本季持續營運的合併結果包含已認列營收 4.304 億美元，較去年成長 8.5%。需要特別指出的是，若排除併購與外幣匯率變動的影響，基礎銷售額增加 1,900 萬美元，或 4.8%；其中有機成長主要來自北美卡車與全球重型工業業務的需求異常強勁。此外，我們也受惠於自去年以來陸續導入量產的多項較小型產品上市。

Net earnings from continuing operations of 16.3 million declined from 20.7 million last year, primarily due to the deterioration of our gross margin as a percent of sales, as well as 1.3 million of after-tax charges related to our global repositioning actions. The gross margin fell to 17.7% from 20.2% last year, reflecting the impact of lower unit pricing, which had a $7 million negative impact in aggregate on the quarter results, and higher cost for aluminum and copper, which had a $5 million net of pass-through impact versus last year's quarter.

持續營運淨利 1,630 萬美元，較去年 2,070 萬美元下滑，主要原因是毛利率（占銷售額比重）惡化，以及與全球重整行動相關的稅後費用 130 萬美元。毛利率由去年的 20.2% 降至 17.7%，反映單位售價下降的影響，該因素對本季合計造成 700 萬美元的負面影響；以及鋁與銅成本上升，相較去年同期在扣除轉嫁後的淨影響為 500 萬美元。

While we can't control commodity prices, there are things we can do to protect Modine against commodity price swings prior to passing through our cost that we have under agreements with our customers. To that end, as Dave mentioned, we implemented aluminum hedging strategy in April. We currently have hedged 30% of our annual requirements with plans to be at 60% by the end of this summer. We've chosen aluminum because it is the commodity used most in our products, and it certainly seems imprudent to launch a hedging program for copper given that it continues to trade at an all-time high.

雖然我們無法控制大宗商品價格，但在依照與客戶協議將成本轉嫁之前，我們仍可採取一些措施來保護 Modine 免受商品價格波動影響。為此，如 Dave 所提到，我們在 4 月實施了鋁的避險策略。目前我們已對年度需求的 30% 進行避險，並計畫在今年夏末前提高至 60%。我們選擇鋁是因為它是我們產品中使用量最大的商品；而鑑於銅價仍在歷史高點交易，啟動銅的避險計畫顯然並不審慎。

With regard to SG&A, it was relatively flat as the percent of sales. It was up 4.5 million, but excluding acquisition, was up only 1.5 million. This was the lowest increase in SG&A in recent history, and the increase was driven by 500,000 of incremental stock-based compensation expense recognized with the recent adoption of FAS 123-R, which is the new stock expensing literature, and 400,000 of third-party expense incurred in the evaluation of our electronics cooling business.

就 SG&A（銷售、一般及行政費用）而言，占銷售額比重相對持平。SG&A 增加 450 萬美元，但若排除併購影響，僅增加 150 萬美元。這是近年來 SG&A 最低的增幅；增加的原因包括：因近期採用 FAS 123-R（新的股票費用化準則）而額外認列 50 萬美元的股票基礎給付費用，以及在評估我們電子冷卻業務時產生的 40 萬美元第三方費用。

Clearly, based on these results, we are already seeing some traction in our cost reduction program relating to SG&A. Our ultimate goal is by the end of the fiscal year to bring SG&A down $20 million on a run rate basis, or 10% on an annualized basis. Partially offsetting our costs and pricing pressure was the fact that we benefited from the use of previously untapped net operating losses resulting in a reduction of income tax expense totaling $3.6 million. I would note that these losses were made available as a result of the acquisition of RV in Brazil.

顯然，從這些結果來看，我們已在與 SG&A 相關的成本削減計畫上看到一些成效。我們的最終目標是在本會計年度結束前，以年化運行率（run rate）計算將 SG&A 降低 2,000 萬美元，亦即年化約 10%。在部分抵銷成本與定價壓力方面，我們受惠於使用先前未動用的淨營運虧損（NOL），使所得稅費用合計減少 360 萬美元。我也要指出，這些虧損之所以可供使用，是因為我們在巴西併購 RV 所致。

Let me now turn to the operating cash flow. Admittedly, it was not strong this quarter, coming in at 8.3 million due to increased working capital needs for inventory and accounts receivable. During the quarter we built inventory levels of products in advance of the upcoming heating season for our HVAC&R business, and further, we built inventory as part of our strategy to mitigate possible production disruption from labor negotiations that we ongoing in Korea.

接著我談一下營運現金流。坦白說，本季表現不強，為 830 萬美元，原因是存貨與應收帳款帶來的營運資金需求增加。本季我們為 HVAC&R 業務即將到來的供暖季提前建立產品存貨水位；此外，作為我們降低韓國持續進行的勞資談判可能造成生產中斷風險之策略的一部分，我們也增加了存貨。

On the receivable side, price increases that we have passed on to our customers have caused a delay in payments due to finalizing commercial negotiations with the customers and the procedural process of setting up new prices in their system for payment. Our conservatively managed balance sheet remains strong with total debt-to-capital ratio of 26.4%, which was up from 23.8% at the end of our fiscal year March 31.

在應收帳款方面，我們已轉嫁給客戶的漲價，因需要完成與客戶的商務協商，以及客戶在其付款系統中設定新價格的程序流程，導致收款有所延遲。我們保守管理的資產負債表仍然穩健，總負債占資本比率為 26.4%，高於會計年度結束日（3 月 31 日）的 23.8%。

In the quarter, cash requirements included the repurchase of nearly 300,000 shares, or $8.3 million. We also funded 18.1 million in capital expenditures for growth in support of the heavy North American product launch scheduled, in particular the 2007 model change-over in the truck business. Also, as Dave mentioned, we acquired 50% of RV that we did not own for $13 million net of cash, and this is clearly in support of our diversification goals and low-cost manufacturing goals.

本季現金需求包括回購近 30 萬股股票，金額為 830 萬美元。我們也投入 1,810 萬美元資本支出，以支持重型北美產品上市所需的成長投資，特別是卡車業務 2007 年式改款切換。此外，如 Dave 所提到，我們以扣除現金後 1,300 萬美元收購了先前未持有的 RV 其餘 50% 股權，這明確是為了支持我們的多元化目標與低成本製造目標。

Finally, we paid cash dividends which used a total of $5.7 million of cash in the quarter. We made a lot of progress towards our goal of global repositioning to stimulate business wins by being cost competitive, accelerating technology development, and repositioning our manufacturing footprint. In the quarter we reiterated our $300 million of net new business, supported by several new business wins announced in the quarter, including a $45 million three-year contract to supply exhaust gas recirculation coolers to Volvo, a $15 million three-year program to supply AGR coolers to the MAN Group, and a $35 million three-year program to supply engine components to International Truck and Engine. We also completed the acquisition of Radiadores Visconde in Brazil, and we announced the formation of a product focus group to support the heating, ventilation and air conditioning equipment needs of the truck and off-highway markets. In conjunction with that change we announced the closure of our technology center in Harrisburg, Kentucky, resulting in $100,000 of expense recorded this quarter, and a total expense for the fiscal year of $1.1 million.

最後，我們支付現金股利，本季合計使用 570 萬美元現金。我們在全球重整方面朝目標取得了很大進展，透過具成本競爭力、加速技術開發，以及重新配置製造版圖，以促成業務得標。本季我們重申淨新增業務 3 億美元的目標，並由本季宣布的多項新得標案支持，包括：與 Volvo 簽訂為期三年、4,500 萬美元的合約供應廢氣再循環（EGR）冷卻器；與 MAN 集團簽訂為期三年、1,500 萬美元的計畫供應 AGR 冷卻器；以及與 International Truck and Engine 簽訂為期三年、3,500 萬美元的計畫供應引擎零組件。我們也完成了在巴西對 Radiadores Visconde 的收購，並宣布成立產品聚焦小組，以支援卡車與非公路市場在供暖、通風與空調設備方面的需求。配合該變更，我們宣布關閉位於肯塔基州哈里斯堡的技術中心，導致本季認列 10 萬美元費用，且本會計年度費用總額為 110 萬美元。

Also in support of global repositioning, we announced an early retirement program for certain U.S. salaried employees, and again we incurred 400,000 of expense in the quarter for this program, and we anticipate total cost of $1 million to $2 million in our fiscal 2007. This is incremental to the early retirement program that was already offered to and accepted by our employees at Modine's South Korean facility. We also announced the closure of our Taiwan facility that manufactures heat pipes for the personal computer and laptop markets resulting in 1.6 million of expense in the quarter, and we expect the total for the year to be $2.5 million to $3 million for the entire fiscal year.

同樣為了支持全球重整，我們宣布針對部分美國受薪員工的提前退休方案；本季因此計入 40 萬美元費用，並預期在 2007 會計年度的總成本為 100 萬至 200 萬美元。這是增量成本，另於先前已提供並獲 Modine 南韓廠員工接受的提前退休方案之外。我們也宣布關閉位於台灣、為個人電腦與筆記型電腦市場製造熱管的工廠，導致本季認列 160 萬美元費用，並預期全年總額為 250 萬至 300 萬美元。

As well, as Dave mentioned, today we announced the closure of our Richland automotive facility and possible closure of our Clinton automotive facility. The Clinton facility closure is conditioned on the decision of a bargaining announcement that we have with the union at that facility. These two closures will result in the Company recording approximately $8 million of total pre-tax charges over the closure period, of which we estimate $3 million will be incurred in this fiscal year.

此外，如 Dave 所提到，我們今天宣布關閉 Richland 汽車廠，並可能關閉 Clinton 汽車廠。Clinton 廠是否關閉，取決於我們與該廠工會之間的協商公告（bargaining announcement）所做出的決定。這兩項關閉將使公司在關閉期間合計認列約 800 萬美元的稅前費用，其中我們估計本會計年度將發生 300 萬美元。

Let me close by saying we have the financial strength and the flexibility to remain committed to our strategy. We are taking steps to reposition the cost base with the primary benefit of increasing our win rate and therefore overall revenue growth for the Company, driving the return on capital employed, as Dave mentioned, up to 11% to 12% by the end of the 36-month repositioning period.

最後我想以這句話作結：我們具備財務實力與彈性，能持續堅定地投入並執行我們的策略。我們正採取措施重新調整成本基礎，其主要效益在於提高我們的得標率，進而帶動公司整體營收成長，並如 Dave 所提到的，在 36 個月的重整期間結束前，將投入資本報酬率（ROCE）提升至 11% 至 12%。

Operator, let's open this call up for questions.

接線生，讓我們開放電話會議進行提問。

Certainly. (OPERATOR INSTRUCTIONS) Our first question comes from Stephen Weiss with Excalibur Research.

當然。（接線生說明）我們的第一個問題來自 Excalibur Research 的 Stephen Weiss。

Thank you very much. Good job, guys. I really like what I'm hearing. A couple of things. Regarding your customers, how are you guys streamlining the selling process to reduce some order inaccuracies, so now your customers will be able to better configure and price your product more efficiently?

非常感謝。各位做得很好。我很喜歡我聽到的內容。有幾點想請教。關於你們的客戶，你們如何精簡銷售流程以降低一些訂單不準確的情況，讓客戶現在能更有效率地完成產品配置與定價？

I'm not sure I understand the question. I think, Stephen, I think you're brighter than I am, so he understands. No, I think what you're getting at is clearly, we did see the accounts receivables, as I mentioned, increase in the quarter and is due to the administrative process particularly in our customer base of actually updating their systems to accept the price increases. Again, the quicker we can get that worked out, the quicker it gets set up in their system and the quicker we get paid. So, you're hitting on the right point here. Believe me, there is concerted effort. We have our sales people, as well as our credit people working directly with our customers to expedite this process. This generally is a fairly smooth process, but given the amount of price increases, it's taking direct intervention.

我不確定我是否理解這個問題。我想，Stephen，我想你比我聰明，所以他懂。不過，我想你要問的重點很清楚：如我提到的，我們確實看到本季應收帳款增加，原因在於行政流程，特別是我們客戶端需要更新其系統以接受漲價。同樣地，我們越快把這件事處理好、越快在他們系統中完成設定，我們就越快收到款項。所以你切中要點。相信我，我們正投入一致且集中的努力。我們的業務人員以及信用管理人員正直接與客戶合作，以加速這個流程。一般而言這是相當順暢的流程，但由於漲價幅度與次數較多，因此需要直接介入處理。

I guess what I mean was when your customers are placing orders for component parts, what-have-you, how are you making the process easier for them in terms of configuring --

我想我的意思是，當你們的客戶在下單購買零組件之類的產品時，你們如何讓他們在配置方面的流程更容易——

We're electronically attached through EDI with nearly all of our customers, so it's all done electronically.

我們幾乎與所有客戶都透過 EDI 進行電子連結，因此全部都是以電子方式完成。

What have you seen as some of the challenges in the marketplace that you're trying to address with making sure it's a seamless integration?

你們在市場上看到哪些挑戰，是你們想要解決、以確保能無縫整合的？

Actually, it is pretty seamless today other than price files. A few years ago there was some rapid changing of technology, and there was not -- everybody wasn't on the same page. There weren't the kind of standards that we have today that no matter what product you're using, they're all pretty similar in regards to format and being able to talk to each other. But a few years ago that was not the case.

其實目前除了價格檔案之外，整體相當無縫。幾年前技術快速變動，當時並非——並不是每個人都在同一個步調上。也沒有像今天這樣的標準；不論你使用什麼產品，在格式以及彼此溝通的能力方面都相當類似。但幾年前並非如此。

What are you hearing in the marketplace right now or challenging customer and market needs that you're trying to address other than obviously raw material costs and things like that. What are some of the other challenges?

你們目前在市場上聽到什麼聲音，或是客戶與市場需求有哪些挑戰是你們正試圖因應的？除了顯而易見的原物料成本之類的因素之外。還有哪些其他挑戰？

Well, with our customers, it's technology, and that plays to our strength. We are already talking, for example, with our off-highway customers in what's called Tier 4, which is the next emission change, in regards to how we can deal with the incremental emissions requirements which all creates incremental heat and some very corrosive products in recirculation. We're already talking with our truck customers in regards to even though the '07 product is just now being launched. In fact, I visited a little bit ago with one of our key truck customers and we were talking about 2010. So, in our business it's not technology; we turn into a commodity. And so we have to make sure that we absolutely stay upfront of our customers' needs and stay in front of our competition, and I think we do that overall pretty well. The key is getting the manufacturing cost base in line and couple of the two, then we win.

嗯，就我們的客戶而言，是技術，而這正好是我們的強項。例如，我們已經在與我們的非公路（off-highway）客戶討論所謂的 Tier 4，也就是下一階段的排放法規變更，探討我們如何因應新增的排放要求；這些要求都會帶來額外的熱量，以及在再循環過程中產生一些具高度腐蝕性的物質。我們也已經在與卡車客戶討論，儘管 2007 年的產品才剛要推出。事實上，我不久前拜訪了我們的一家主要卡車客戶，我們談的已經是 2010 年。所以在我們這個產業，如果不是技術領先，我們就會變成商品化。因此我們必須確保絕對走在客戶需求之前，也走在競爭對手之前，我認為整體而言我們做得相當好。關鍵在於讓製造成本基礎到位，並把兩者結合起來，然後我們就能勝出。

The other piece that we've done is where we may have a product gap and maybe one of the other suppliers in the marketplace has a product gap in order to be able to give a total systems approach, so we're partnering, for example, with BorgWarner in order to be able to bring those 2010 solutions and the '07 solutions, just a very robust solution in combination with our fans, our clutches and our thermal solutions. But it's all technology. Absolutely price has to be there, and we've got some short-term challenges in regards to these commodity prices, unprecedented commodity prices, but that will be dealt with.

我們做的另一件事是：在我們可能有產品缺口、而市場上其他供應商也可能有產品缺口的地方，為了能提供整體系統解決方案，我們會進行合作；例如我們與 BorgWarner 合作，以便能提供 2010 年的解決方案與 2007 年的解決方案，並與我們的風扇、離合器以及熱管理解決方案結合，形成非常強健的整體方案。但這一切都與技術有關。當然價格也必須到位；而在短期內，面對這些前所未見的大宗商品價格，我們確實有一些挑戰，但這些都會被處理。

Okay. And a final question. I like what I'm hearing. As CEO, as you go into '07, what is the top initiative that you would like to tell your shareholders that you're going to accomplish as CEO?

好的。最後一個問題。我很喜歡我聽到的內容。身為 CEO，當你進入 2007 年時，你最希望告訴股東、你將以 CEO 身分完成的首要工作是什麼？

Well, absolutely the repositioning activity. You know, what I'm very pleased with is we've got a very good reputation on quality, we serve our customers well. We have a good technical image in the marketplace. We have a cost base issue that we're going to work very hard to create what I call blended manufacturing strategy. It's not on all low-cost manufacturing, because some products should be made in North America and Western Europe because of logistics costs and intellectual property, etc., etc. We're going to work very, very hard in having the right blended manufacturing costs, the right blended sourcing costs, and we've got to get our SG&A back in line to meet the market expectations through repositioning.

嗯，絕對是重整（repositioning）活動。你知道，我很高興的是，我們在品質方面有非常好的聲譽，也把客戶服務得很好。我們在市場上也有良好的技術形象。我們的問題在於成本基礎；我們將非常努力打造我所稱的「混合式製造策略」。這不是全部都採低成本製造，因為有些產品應該在北美與西歐生產，考量到物流成本與智慧財產等因素，等等。我們將非常、非常努力，確保有正確的混合式製造成本、正確的混合式採購成本，並且必須透過重整，讓我們的 SG&A（銷售、一般及行政費用）回到符合市場期待的水準。

Thank you very much. I wish you continued success.

非常感謝。祝你們持續成功。

Thanks, Steve.

謝謝，Steve。

We'll take our next question from David Leiker with Robert W. Baird.

我們的下一個問題來自 Robert W. Baird 的 David Leiker。

Hi, David.

嗨，David。

Hi. It's actually Keith Shicker.

嗨。其實我是 Keith Shicker。

Hi, Keith.

嗨，Keith。

A quick question about the tax benefits that we had here in the first quarter. Is this a one-quarter thing, or is this going to be a benefit for future quarters as well?

有個關於第一季稅務利益的快速問題。這是只有一季的情況，還是未來幾季也會持續帶來利益？

No, this is a one-time benefit that we recognized. As I mentioned, we had some net operating losses sitting in a subsidiary that we hold in Brazil. Those operating losses we were not able to tap those, but with the acquisition of the entire business in Brazil and through some tax restructuring that we will be doing, we're able to access those, and therefore we have recognized the benefit in accordance with accounting principles in the quarter. So it is a one-time benefit.

不，這是我們認列的一次性利益。如我提到的，我們在巴西持有的一家子公司累積了一些淨營業虧損（NOL）。過去我們無法運用這些營業虧損，但隨著我們收購巴西的整體業務，並透過我們將進行的一些稅務重整，我們得以使用這些虧損，因此我們依照會計準則在本季認列了該項利益。所以這是一項一次性利益。

Should we think differently about the tax benefit for the -- or the tax rate for the balance of the year then?

那麼，對於今年剩餘期間的稅務利益——或稅率——我們是否應該用不同的方式來看待？

Well, that certainly -- that's relative to our total income. That's certainly a large driver, and so I think from a full year perspective, the effective tax rate is going to be kind of in the low 30s.

嗯，那當然——這取決於我們的總所得。那確實是一個很大的驅動因素，所以我認為從全年角度來看，有效稅率大概會落在 30% 出頭、偏低的區間。

Okay.

好的。

I do feel it's important, and Brad has a very competent staff in the tax area, to make sure as we become a global company that we understand all the tax nuances of not only from the North American perspective, but all of the 15 countries that we serve. And I would call that a core competence that we have internally.

我確實認為這很重要，而且 Brad 在稅務領域有一支非常稱職的團隊；當我們成為一家全球性公司時，必須確保我們理解所有稅務上的細微差異，不僅是從北美的角度，也包括我們所服務的 15 個國家。我會把這稱為我們內部具備的一項核心能力。

Okay. Would the acquisition of the remaining 50%, would that have been accretive without this tax benefit.

好的。若收購剩餘的50%，在沒有這項稅務利益的情況下，是否仍會具增益性（accretive）？

Absolutely.

絕對會。

Absolutely, okay.

絕對會，好。

It's been a very good relationship we had. We've made the initial purchase of the first half about eight years ago. We have great partners. It was basically about a $40 million, $45 million business when we first entered it, and it was very, very strong in the after market, and we've grown very nicely down there in the OE side. It's now probably an $80 million business, and it's over half OE, so we're very thrilled with the local country sourcing that we're receiving, but we now see it as a great opportunity to do some low-cost sourcing back into North America and into Europe, where the logistic cost makes sense.

我們一直維持非常良好的合作關係。大約八年前我們先買下前一半的股權。我們有很棒的合作夥伴。我們剛進入時，那基本上是一個約4,000萬到4,500萬美元的業務，在售後市場非常、非常強勁，而我們在原廠配套（OE）端也成長得很不錯。現在大概是一個8,000萬美元的業務，而且超過一半來自OE，所以我們對於在地國家採購所帶來的效益感到非常振奮；同時我們也把它視為一個很好的機會，能以合理的物流成本，將部分低成本採購回輸到北美與歐洲。

Okay. Sure. In Europe it looks like we had an increase in revenue, but operating income fell. Is this a volume issue over there or is it a cost issue?

好的。當然。在歐洲看起來營收增加，但營業利益下滑。這是那邊的出貨量問題，還是成本問題？

I think Europe is -- what you're seeing again is the sales did increase. That was largely driven by the currency, but the overall impact on the profitability in Europe is really driven by the raw material issue.

我認為歐洲——你看到的是銷售確實增加了。那主要是由匯率帶動，但歐洲獲利能力的整體影響，主要是由原物料問題所驅動。

Okay. And then Asia, revenue was slightly down in the quarter. Where are you guys in the synergy that you're hoping to get, or planning on getting from the Winia Mando acquisition?

好的。接著是亞洲，本季營收略為下滑。你們在希望取得、或規劃從Winia Mando收購案中取得的協同效益方面，目前進展到哪裡？

Well, it's a great place for us to jump off into China, and we already have -- they already had a joint venture at a small site in Shanghai. With those two locations in China, we're already growing and we're sourcing product from the JV that we have, a 50/50 JV back into Korea. We're also expanding our operations already in Shanghai, and we'll be moving to a larger building. The synergy that we like already and it's actually ahead of the game is in Korea itself, where we're bringing our technology to our organization there, because they were basically an HVAC business for small commercial vehicles and cars. But we're bringing our engine technology and our power train cooling technology, and we're having some nice wins in Korea. The disappointing side in Korea is the local market is softer than we had originally projected, and certainly labor is a challenge over there, as anybody that operates knows that. The other side, which will be longer term, is taking their technology and their relationships into other regions. Because of the relationship, we've won some business and we're actually launching it right now to Kia for some charge-air coolers in Slovakia, and certainly we would like to pursue our relationship with high-end Kia to gain sales here in North America.

嗯，這對我們來說是進入中國的一個很好的跳板，而且我們已經——他們原本就在上海有一個小型據點的合資企業。有了中國這兩個據點，我們已經在成長，並且從我們的合資企業採購產品——那是一個50/50的合資——再回輸到韓國。我們也已經在擴大上海的營運，並將搬到更大的廠房。我們喜歡的協同效益其實已經出現，而且進度超前的是在韓國本地：我們把我們的技術導入那邊的組織，因為他們基本上是做小型商用車與乘用車的HVAC業務。但我們正在導入我們的引擎技術與動力系統冷卻技術，並且在韓國拿到一些不錯的案子。韓國比較令人失望的是，當地市場比我們原先預期更疲弱，而且勞動力確實是個挑戰，任何在那邊營運的人都知道。另一個面向、也會是較長期的，是把他們的技術與客戶關係帶到其他地區。因為這層關係，我們贏得了一些業務，而且現在正要為斯洛伐克的Kia導入（launch）一些增壓空氣冷卻器（charge-air coolers）；當然，我們也希望深化與高階Kia的合作關係，以提升我們在北美的銷售。

The last piece of the synergy is we have had some Koreans in Europe to support our HVAC business, and we'll be transferring some Koreans here to support our new initiative that Brad mentioned on HVAC for truck and off-highway.

協同效益的最後一塊是：我們已經派了一些韓國同仁到歐洲支援我們的HVAC業務，並且會再調派一些韓國同仁到這裡，支援Brad提到的、針對卡車與非公路（off-highway）領域HVAC的新計畫。

Okay.

好的。

Keith, if I can just clarify, to make sure I was clear on the currency comment as it relates to Europe. Clearly you've seen an overall growth in the revenue for Europe, and that is despite the fact that the Euro has actually weakened vis-à-vis the dollar, and so, again, the overall impact of currency with a minus $7 million on the Europe comparison. So, you can see that there is strong underlying organic revenue growth quarter-over-quarter in Europe. Again, the profitability challenge that we have is primarily materials albeit there is some pricing also. Yes, I would say pricing, especially in the automotive side, has been pretty aggressive in the automotive side. We're particularly pleased with our off-highway business over there. That's been about a three, four-year journey of not only fixing some product problems and some reputation, but also growing the top line, and we're pleased with their bottom line growth. I mentioned earlier that we are studying very aggressively moves into Eastern Europe from a manufacturing base and, of course, it's close enough the logistics issues are more practical to deal with in Europe than out of China, and so, again, we'll have this blended strategy. The only thing you have to overcome short-term is the redundancy costs that that could create in Germany and other Western countries.

Keith，如果我可以再澄清一下，確保我在談到與歐洲相關的匯率評論時表達清楚。很明顯你們看到歐洲營收整體成長，而這是在歐元相對美元其實走弱的情況下發生的；因此，匯率對歐洲比較的整體影響是負7百萬美元。所以你可以看到，歐洲在本季相較上季（quarter-over-quarter）有強勁的內生（organic）營收成長。同樣地，我們面臨的獲利挑戰主要是材料成本，雖然也有一些定價因素。是的，我會說定價，尤其在汽車端，競爭性的降價/議價相當激烈。我們對那邊的非公路業務特別滿意。那是一段大約三、四年的歷程，不僅修正了一些產品問題與聲譽，也讓營收成長，我們對其獲利（bottom line）成長感到滿意。我先前提到，我們正非常積極地研究從製造基地轉移到東歐的動作；當然，距離夠近，使得在歐洲處理物流問題比從中國出貨更可行，因此我們會採取這種混合策略。短期唯一需要克服的是，這可能在德國與其他西歐國家造成的重複配置成本（redundancy costs）。

Okay. One final question. We've had three consecutive quarters here of declining operating income year-over-year. Are we going to see a positive comparison in 2007, or are we going to wait until 2008 for that?

好的。最後一個問題。我們已經連續三個季度，營業利益年對年下滑。2007年會看到正向比較嗎？還是要等到2008年？

This is a transition year and I'll tell you, who's got the crystal ball on materials? Brad mentioned that we don't hedge copper, and we actually talked about it in November of last year and December, and we said it would be crazy to hedge on copper and looked what happened to it. So, the real dicey thing this year is continuation of what's going to happen in materials. We're being aggressive in some price recovery, but there is obviously some lag there. I would call this year a transition. We are going to see some of the activity that we have going to the bottom line specifically in the SG&A area. The operating side, that takes you little longer and like Brad said, we've got some costs in order to do some of this repositioning, but we will have some positive impacts from Taiwan. It probably was something we've had on this call in the past is with the closure of Taiwan, that electronics business is now at break-even.

今年是過渡年。我跟你說，誰能用水晶球預測原物料？Brad提到我們不對銅做避險；其實我們在去年11月和12月也討論過，當時我們說對銅做避險會很瘋狂，結果你看它後來的走勢。所以今年真正棘手的，是原物料接下來會怎麼走。我們在價格回收（price recovery）方面採取更積極的作法，但顯然會有一些時間落差。我會把今年稱為過渡期。我們會看到一些活動對獲利的貢獻，特別是在銷售、一般及管理費用（SG&A）方面。營運端需要更長時間；如Brad所說，為了進行這些重新定位我們也有一些成本，但我們會從台灣那邊看到一些正面影響。這可能是我們過去在電話會議中提過的：隨著台灣關閉，那個電子業務現在已經達到損益兩平。

Okay, thanks.

好的，謝謝。

(OPERATOR INSTRUCTIONS) We'll take our next question from Dennis Scannell with Rutabaga Capital.

(接線員指示) 我們接下一位提問者：Rutabaga Capital的Dennis Scannell。

Hi, Dennis. How's life in Boston?

嗨，Dennis。波士頓近況如何？

Things are good, things are good, Dave. How are you doing, Brad?

一切都很好、一切都很好，Dave。你怎麼樣，Brad？

Hi, Dennis.

嗨，Dennis。

Have you got that tunnel fixed?

那條隧道修好沒有？

No, no. We've got some more work to do there, so hopefully the next time you guys are in town you'll have a safe drive in from the airport. Just a couple of quick follow-ups. Can you talk a little bit more about the pricing? It sounds like that's something over and above the traditional pass-through contracts, which I know has been -- let's say a problem in terms of trying to get those actually realized.

沒有，沒有。那邊還有一些工作要做，所以希望下次你們來的時候，從機場進城會是安全的車程。我有幾個快速追問。你能再多談一點定價嗎？聽起來那是超出傳統轉嫁（pass-through）合約之外的作法；我知道那一直——可以說——在實際落地/實現上是個問題。

Are you talking about the materials pricing?

你是指原物料的定價嗎？

Yes. Well, you mentioned, I think, overall customer pricing was going up. Is that --

是的。嗯，你提到我想整體客戶定價在上升。那是——

Well, there are two elements here in pricing. There is the price-down, which they call productivity, and we do have -- I would say continuing and with some customers increasing pressure to reduce price. So, that is a never-ending battle on what I call productivity pricing, and selective push from some customers because of their personal situation. The other side is the materials pass-through, where with many or most of our OE customers, we do have a pass-through, but as we've said in the past, about a 10-month lag. With this unprecedented run-up in materials pricing, that lag effect, that 10-month lag just becomes unbelievably choking. So, we have gone out with some incremental pricing to shorten that cycle of 10 months and getting pricing quicker than what the contractual requirements would require. Does that help?

嗯，定價這裡有兩個要素。一個是降價，他們稱之為生產力（productivity），而我們確實——我會說持續地、且部分客戶的降價壓力還在加大。所以，這是一場永無止境的戰役，我稱之為生產力定價；另外也有一些客戶因其自身情況而選擇性地施壓。另一面是材料轉嫁（pass-through）；對於我們許多或大多數的 OE 客戶，我們確實有轉嫁機制，但如同我們過去所說，大約有 10 個月的滯後。在材料價格以前所未見的速度飆升之下，這個滯後效應、這 10 個月的滯後，簡直令人窒息。因此，我們已提出一些額外的定價調整，以縮短這個 10 個月的週期，讓定價回收比合約條款所要求的更快。這樣有幫助嗎？

Yes.

有。

Dennis, just to clarify, too, on what I quoted, the $5 million for the impact of aluminum and copper, that is a net impact. So, I've factored in the price increases that Dave was saying we were able to get through, which again did not offset the impact of commodities. So, I'm quoting a net number there.

Dennis，我再澄清一下，我剛才提到鋁和銅影響的 500 萬美元，那是淨影響。所以我已把 Dave 說我們能夠轉嫁出去的漲價因素納入計算，但那仍然無法抵銷大宗商品的影響。因此我報的是淨額。

Gotcha. Gotcha.

了解。了解。

For price increases.

就漲價而言。

If we see let's say just some stabilization in the commodity prices, would we expect to recapture those increases in that -- in terms of your pricing to your customers looking out 10 months? Is that realistic, or --

如果我們看到例如大宗商品價格只是出現一些穩定，我們是否預期能在——就你們對客戶的定價、往後看 10 個月的角度——把那些上漲收回來？這現實嗎，還是——

Well, we had what we call a natural hedge, and so that has always been the logic of why we really haven't hedged material in the past, because we have a natural hedge in our pricing, but we've had this run-up that we just can't afford not to take a different direction. Also, with some of our customers where we have agreements and they have some difficult financial situations, some of those agreements have been challenged, so that ends up in commercial negotiations. Our diversification model allows us to say no or find a compromise at times where we're more dependent on specific customers who maybe wouldn't have the ability to negotiate as we have, when they push back on these agreements.

嗯，我們有所謂的自然避險（natural hedge），所以這一直是我們過去沒有對材料做避險的邏輯，因為我們在定價上有自然避險；但這波漲勢我們已經承受不起不改變方向了。另外，對於部分客戶，我們有協議，但他們的財務狀況相當困難，其中一些協議也受到挑戰，最後就會進入商務談判。我們的多元化模式讓我們在某些時候可以說不，或找到折衷；相較之下，如果我們更依賴特定客戶，而那些客戶在他們對這些協議反彈時，可能就不會像我們一樣有談判能力。

Gotcha, gotcha, okay. And then just a couple other points of clarification. On the 300 million of net new business, we're kind of thinking of that over the next three years or three to five years?

了解，了解，好。再有幾點釐清。關於 3 億美元的淨新增業務，我們是把它看作未來三年，還是三到五年？

Five years. And let me just clarify, we're going to update that number in the fall, but we've taken a recent look. Last fall we used a $300 million number, and that included a product that we were launching last year, and that was about $50 million of business that we launched last year. So that would net to 250, and looking at it in this last month or so, we are very pleased that we've replaced that stuff that we've launched, so we're still holding to that $50 million -- or $300 million worth of incremental. In other words, we've been able to push it out one more year, but replacing what we've already launched.

五年。我再補充說明一下，我們會在秋季更新這個數字，但我們最近又重新檢視了一次。去年秋天我們用的是 3 億美元，當時包含一個我們去年要導入的產品，那項業務去年導入約 5,000 萬美元。所以淨額會變成 2.5 億；而在最近這一個月左右回頭看，我們很高興我們已把去年已導入的那部分補回來，因此我們仍維持那 5,000 萬——或 3 億美元的增量。換句話說，我們能把它再往後延一年，但同時補上我們已經導入的部分。

Great. And when you say 50 million, that was from fiscal year '06, ended March '06?

很好。你說的 5,000 萬，是指 2006 會計年度、截至 2006 年 3 月那一年？

Correct.

沒錯。

Okay.

好。

The other pieces that we think with this new cost base, we're going to actually start quoting to this new cost base the kind of things that I talked about and the things that we're working on, so we can start winning at a higher rate. Our goal is an incremental 150 in this time period that we're going to pursue aggressively, not giving it away, but in order to be able to get the margin and return on capital that's appropriate with a better cost base.

另外我們認為，基於這個新的成本基礎，我們將開始以這個新的成本基礎來報價——也就是我提到的那些事情，以及我們正在推動的工作——因此我們可以開始以更高的勝出率拿到案子。我們的目標是在這段期間再增加 1.5 億，我們會積極追求，但不會賤賣；而是要在更好的成本基礎下，取得適當的毛利與資本報酬。

Great. So that was my question. So, that 150 is incremental again over the next five years.

很好。那正是我的問題。所以，那 1.5 億也是未來五年內的增量。

Yes, and we've got specific targets to work on and kind of making sure that we don't do anything for practice.

是的，而且我們有具體目標要去攻，並確保我們不會做任何只是練習用的事情。

Terrific. One last thing just, again, a point of clarification. On the tax rate, Brad, were you saying that the full year March '07 fiscal year will be in the low 30s or the next three quarters will be in the low 30s?

太好了。最後再釐清一點。關於稅率，Brad，你是說截至 2007 年 3 月的 2007 會計年度全年會落在 30% 出頭（low 30s），還是接下來三個季度會在 30% 出頭？

No, I was trying to average for the full year. You know, taking in the fact that, again, the 3.6 million is significant in terms of the total for the year and therefore will bring the tax rate for the full year down into the low 30s.

不，我是想就全年做平均。你知道，把 360 萬這件事納入考量——它對全年總額而言很顯著——因此會把全年稅率拉低到 30% 出頭。

Remember, Dennis, I mentioned that's a core competency, and I have expectations of Brad's finding the right opportunities we have globally on tax. It's just like you push a manufacturing [inaudible] --

Dennis，記得我提過那是核心能力，我也期待 Brad 能在全球稅務上找到我們合適的機會。這就像你推動製造端的[聽不清]——

Oh, absolutely.

喔，當然。

-- we've got to do our part.

——我們也得盡我們的本分。

No, it sounds good. We as investors are probably stripping that out trying to get a normalized rate, but that's real money, and as shareholders we appreciate that. Thanks a lot.

不，聽起來很好。我們作為投資人可能會把那部分剔除、試著得到一個常態化稅率，但那是真金白銀；作為股東我們很感謝。非常感謝。

You know, Dennis, it really is real money in that 3.6 million, when we did our calculation, internal rate of return calculation on the acquisition of the RV business, we did not factor in that we would be able to capture that. So, that's just upside to the overall turn from that investment.

你知道，Dennis，那 360 萬確實是真金白銀；我們在做 RV 業務收購的內部報酬率（IRR）計算時，並沒有把我們能夠取得這部分效益納入。所以，這就是那項投資整體回報的額外上行。

Terrific. Thanks a lot, guys.

太好了。非常感謝，各位。

Too many people, I think, take those kind of things casually, and I think, like I said, if you've got the right people and the right focus, there's money to be brought to the bottom line in the tax side. I hate people when -- I hate it when people discount the tax management.

我覺得太多人把這類事情看得很隨便；但我認為，如我所說，如果你有對的人與對的聚焦，在稅務面是可以把錢帶到淨利（bottom line）的。我很討厭——我很討厭人們低估稅務管理。

Completely agree. Thanks.

完全同意。謝謝。

(OPERATOR INSTRUCTIONS) It appears we have no further questions.

(OPERATOR INSTRUCTIONS) 看起來我們沒有其他問題了。

Well, that's fine. We've got lots to do and the good news is, we've got a top line that continues to grow, and we're very pleased with that. We have an organization that's focused on the customer, and I'm very pleased that there's just not field issues and quality issues and warranty issues that have us up at night. The key focus right now is get this repositioning activity done as efficiently as we can and candidly as responsibly as we can with the employees that are being affected, so we can increase our win rate and get us back to that 11%, 12% that I think is clearly within our reach in the timeline that Brad gave. So, we'll be talking to you all next quarter. Thank you.

好，那也行。我們還有很多事要做；好消息是，我們的營收（top line）持續成長，我們對此非常滿意。我們的組織以客戶為中心，我也很高興沒有那些讓我們夜不能寐的現場問題、品質問題與保固問題。目前的關鍵重點是：盡可能有效率地完成這次重新定位（repositioning）活動，坦白說，也要以對受影響員工盡責的方式來做，這樣我們才能提高勝出率，並在 Brad 所說的時間軸內，把我們帶回我認為明確可及的 11%、12%。那我們下個季度再和各位通話。謝謝。

Thank you.

謝謝。

And that does conclude today's conference call. We'd like to thank you all for your participation. Have a great day.

今天的電話會議到此結束。感謝各位的參與。祝各位有美好的一天。