Modine Manufacturing Company (MOD) 2015 Q3 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to Modine Manufacturing Company's third-quarter fiscal 2015 conference call. (Operator Instructions) As a reminder, this conference call is being recorded.

各位女士、各位先生，早安，歡迎參加 Modine Manufacturing Company 2015 會計年度第三季財報電話會議。（接線員指示）提醒各位，本次電話會議將被錄音。

And I would now like to turn the conference over to your host, Ms. Kathy Powers, Vice President, Treasurer and Investor Relations.

現在我想把電話會議交給今天的主持人——Kathy Powers 女士，副總裁、財務主管暨投資人關係負責人。

Thank you for joining us today for Modine's third-quarter fiscal 2015 earnings call. With me today are Modine's President and CEO, Tom Burke, and Mick Lucareli, our Vice President, Finance and Chief Financial Officer.

感謝各位今天參加 Modine 2015 會計年度第三季財報電話會議。今天與我一同出席的有 Modine 總裁暨執行長 Tom Burke，以及我們的財務副總裁兼財務長 Mick Lucareli。

We will be using slides with today's presentation. Those links are available through both the webcast link as well as a PDF file posted on the investor relations section of our Company website, modine.com. Also should you need to exit the call prior to its conclusion, a replay will be available through our website beginning approximately 2 hours after the call concludes.

我們將使用投影片進行今天的簡報。相關連結可透過網路直播連結取得，也可在公司網站 modine.com 的投資人關係專區下載 PDF 檔。此外，若您需要在會議結束前先行離線，會議結束約 2 小時後即可透過我們的網站收聽重播。

On slide 2 is an outline for today's call. Tom and Mick will provide comments on our third-quarter results and update our revenue and earnings guidance for fiscal 2015. At the end of the call, there will be a question-and-answer session.

投影片第 2 頁為今天電話會議的大綱。Tom 與 Mick 將就第三季業績發表評論，並更新 2015 會計年度的營收與獲利指引。會議最後將進行問答環節。

On slide 3 is our notice regarding forward-looking statements. I want to remind you that this call may contain forward-looking statements as outlined in today's earnings release as well as in our Company's filings with the Securities and Exchange Commission.

投影片第 3 頁為我們關於前瞻性陳述的聲明提醒。我想提醒各位，本次電話會議可能包含前瞻性陳述，相關內容如同今日盈餘新聞稿以及本公司向美國證券交易委員會提交之文件所述。

With that, it is my pleasure to turn the call over to Tom Burke.

接下來，很高興把電話會議交給 Tom Burke。

Thank you, Kathy, and good morning, everyone. I am pleased to report that our third-quarter sales of $364 million were up 9% from the prior year, excluding currency impacts, with sales growth in each of our segments, except South America, where markets remain weak.

謝謝你，Kathy，各位早安。我很高興報告，我們第三季銷售額為 3.64 億美元，若排除匯率影響，較去年同期成長 9%；除南美洲市場仍然疲弱外，我們各事業部門皆呈現銷售成長。

Adjusted operating income of $14.2 million was up 15% from the prior year, largely driven by continued strength in our building HVAC segment, where a strong North American heating market contributed to both sales and earnings growth.

調整後營業利益為 1,420 萬美元，較去年同期成長 15%，主要受惠於建築 HVAC 事業部門持續強勁，其中北美暖氣市場強勁帶動銷售與獲利同步成長。

We reported adjusted earnings per share of $0.15 compared to $0.16 for the prior year. This decrease was largely driven by higher income tax expense in the current year.

我們公布的調整後每股盈餘為 0.15 美元，去年同期為 0.16 美元。此一下降主要是因本年度所得稅費用較高所致。

Mick will go through the consolidated results in greater detail, but first I will review the segment performance and provide an initial view of the end-market expectations for calendar 2015.

Mick 將更詳細說明合併財務結果，但在此之前，我將先回顧各事業部門表現，並初步說明我們對 2015 年曆年終端市場的預期。

Turning to page 6, sales increased 2% in North America segment, with higher sales to commercial vehicle and automotive customers more than offsetting a decrease in sales to off-highway customers, as both the agricultural and mining equipment markets remained weak.

請看第 6 頁。北美事業部門銷售額成長 2%，對商用車與汽車客戶的銷售增加，足以抵銷對非道路（off-highway）客戶銷售的下滑；由於農業與礦業設備市場仍然疲弱，非道路市場需求持續偏弱。

Gross profit was up 2%, in line with sales, and gross margin remained relatively flat, as a contribution from higher sales volume was offset by unfavorable sales mix and material costs. Similar to last quarter, the increase in sales to commercial vehicle customers and a decrease in sales to off-highway customers created this unfavorable sales mix.

毛利成長 2%，與銷售增幅一致；毛利率大致持平，因較高銷售量的貢獻被不利的銷售組合與材料成本所抵銷。與上季類似，商用車客戶銷售增加、非道路客戶銷售下降，造成此一不利的銷售組合。

Material cost increase was driven in part by an increase in the Midwest transaction premium for aluminum, which is a significant component of the price we pay for this commodity. As some of you may have read in various news reports, this premium has nearly doubled over the past year.

材料成本上升部分原因在於鋁的「美國中西部交易溢價」（Midwest transaction premium）上升，該溢價是我們支付此項大宗商品價格的重要組成。如各位可能在多則新聞報導中所見，過去一年該溢價幾乎翻倍。

Unfortunately, we cannot pass along this increase to our customers through our current pass-through agreements. We are, however, working with others in our industry through national organizations to attempt to address this escalation of this cost.

不幸的是，我們無法透過現行的轉嫁（pass-through）協議將此一增加轉嫁給客戶。不過，我們正透過全國性組織與同業合作，嘗試因應此成本攀升的問題。

Overall, aluminum prices were up about 20% from the prior year. We expect to see a similar year-over-year increase in our fourth quarter, despite the recent weakening of the price of aluminum.

整體而言，鋁價較去年同期上漲約 20%。儘管近期鋁價走弱，我們預期第四季仍將看到類似的年增幅。

SG&A expense was up from the prior year, primarily due to higher engineering and development costs. These costs can vary by quarter due to the timing of recoveries from our customers. Adjusted operating income for North America was down $1.2 million from the prior year to $7.5 million due primarily to this increase in SG&A.

SG&A（銷售、一般及管理）費用較去年同期增加，主要因工程與開發成本較高。由於向客戶收回款項的時點不同，這些成本可能隨季度而波動。北美事業部門調整後營業利益較去年同期減少 120 萬美元至 750 萬美元，主要即因 SG&A 增加所致。

We are making progress transferring production from our McHenry, Illinois, facility to other North American plants. As we have previously discussed, this action is necessary to remain cost competitive with our customers. We will continue to evaluate our manufacturing footprint and make changes as necessary to ensure we have the right cost structure in this highly competitive environment.

我們在將伊利諾州 McHenry 廠的產能轉移至其他北美工廠方面正取得進展。如先前所述，為了在成本上維持對客戶的競爭力，此舉勢在必行。我們將持續評估製造據點布局，並在必要時進行調整，以確保在高度競爭的環境中具備適當的成本結構。

Our 2015 outlook for North American heavy duty truck market is for continued growth, with a 10% to 15% increase in calendar -- over calendar 2014, while we expect mediums to be flat as compared with the prior year. Our outlook for the automotive market is for sales to remain strong, possibly increasing 5%.

我們對 2015 年北美重型卡車市場的展望為持續成長，預期 2015 年曆年相較 2014 年曆年將增加 10% 至 15%；而中型車預期與去年持平。我們對汽車市場的展望為銷售維持強勁，可能成長 5%。

For our off-highway markets, we expect continued weakness in the agricultural equipment market, with sales projected to be down an additional 20% to 25% versus 2014. We expect the construction market to be flat, but with gains in light construction more likely offsetting continued weakness in heavy construction and mining.

就非道路市場而言，我們預期農業設備市場將持續疲弱，銷售預估較 2014 年再下滑 20% 至 25%。我們預期建築市場持平，但輕型建築的成長可能抵銷重型建築與礦業持續疲弱的影響。

Please turn to page 7. Sales for our Europe segment decreased 2% in the third quarter, driven by the impact of a weaker euro versus the US dollar. Excluding this currency impact, sales in Europe were up 6% versus the prior year.

請翻到第 7 頁。歐洲事業部門第三季銷售額下降 2%，主要受歐元兌美元走弱影響。若排除匯率影響，歐洲銷售額較去年同期成長 6%。

Sales to commercial vehicle customers were up, driven by higher launch volumes of components for Euro VI vehicles. Sales to automotive customers in Europe were also higher than prior year, with higher sales of automotive components more than offsetting the decrease in BMW modules, as those programs continue to wind down as planned.

對商用車客戶的銷售增加，主要因 Euro VI 車款零組件的導入（launch）量提升所帶動。歐洲汽車客戶的銷售亦高於去年同期，汽車零組件銷售增加，足以抵銷 BMW 模組銷售下滑；該等專案如計畫所示持續逐步結束。

These increases were partially offset by lower off-highway and tooling sales, which were down from the prior year. Gross margins decreased 190 basis points from the prior year due to a number of negative factors during the quarter.

上述增幅部分被非道路與模具（tooling）銷售下滑所抵銷，兩者均較去年同期下降。毛利率較去年同期下降 190 個基點，原因為本季出現多項不利因素。

First, we continue to experience unfavorable sales mix in this segment. The higher mix of relatively lower margin commercial vehicle components and lower tooling sales both contributed to lower margins during the quarter.

首先，我們在此事業部門仍持續面臨不利的銷售組合。相對低毛利的商用車零組件占比提高，以及模具銷售降低，皆使本季毛利率下滑。

As expected, we also continue to experience temporary operational inefficiencies related to our ongoing project to consolidate manufacturing operations in Germany and with new automotive program launches, which we expect to improve in the fourth quarter. Finally, margins were lower due to unfavorable material costs related to the underlying metal prices increases and from the weaker euro.

如預期所示，我們也持續承受暫時性的營運效率不彰，主要與我們正在進行的德國製造作業整併專案，以及新汽車專案導入相關；我們預期第四季將有所改善。最後，因基礎金屬價格上漲及歐元走弱導致材料成本不利，亦使毛利率下降。

The German plant consolidation project remains on track. We made significant progress during the quarter and we expect to finish the physical transition during the first half of calendar 2015. Although we expect there to be some inefficiencies in the next quarter, I fully expect we will reach the cost improvement targets we set for this project early in our next fiscal year.

德國工廠整併專案仍按計畫推進。我們在本季取得顯著進展，並預期於 2015 年曆年上半年完成實體轉移。雖然我們預期下季仍會有一些效率不彰，但我完全相信，我們將在下一個會計年度初期達成此專案所設定的成本改善目標。

I'm pleased to report that we sold the wind tunnel at our European headquarters during the quarter and received cash proceeds of approximately $6 million. This was the final step in rightsizing our regional headquarters and testing facilities in Germany.

我很高興報告，我們在本季出售了位於歐洲總部的風洞，並取得約 600 萬美元的現金收入。這是我們在德國對區域總部與測試設施進行規模調整（rightsizing）的最後一步。

Our 2015 market outlook for Europe is stable, with continued strong demand for premium automotive components. We expect the commercial vehicle markets to be flat to up 5% and the off-highway markets to be flat to down 5%.

我們對歐洲 2015 年市場展望為穩定，高端汽車零組件需求持續強勁。我們預期商用車市場持平至成長 5%，非道路市場持平至下滑 5%。

Moving to South America on page 8. Sales were down 22%, or 12% excluding currency impacts, and generally in line with the decline in our end markets. Unfortunately, our customers continue to cut production due to weak economic conditions in Brazil. Adjusted operating income was down $1.7 million, as lower gross profit was partially offset by a reduction in SG&A expense.

接著看第 8 頁的南美洲。銷售額下降 22%，若排除匯率影響則下降 12%，整體與終端市場下滑幅度大致一致。不幸的是，由於巴西經濟情勢疲弱，我們的客戶持續削減產量。調整後營業利益減少 170 萬美元，因毛利下降部分被 SG&A 費用降低所抵銷。

We have worked diligently to cut costs in South America segment in response to the drop in sales. With 160 headcount reduction so far this year, which exceeds 15% of our total workforce, we still have more work to do in this segment and expect to see more benefits from the restructuring actions in the fourth quarter and into the next fiscal year.

為因應銷售下滑，我們一直努力在南美洲事業部削減成本。今年迄今已裁減160名員工，超過我們總人力的15%；但在此事業部我們仍有更多工作要做，並預期在第四季以及下一個會計年度將從重整措施中看到更多效益。

We believe that the weak Brazilian market conditions will continue for the rest of calendar 2015. Specifically, we expect the commercial vehicle market to be flat to down 5% and the agricultural equipment market to be down an additional 5% to 10%. Our aftermarket business remains steady and we expect this market to be flat to up 5%.

我們認為巴西市場疲弱的狀況將持續到2015曆年剩餘期間。具體而言，我們預期商用車市場將持平至下滑5%，農業設備市場將再下滑5%至10%。我們的售後市場業務仍維持穩定，並預期該市場將持平至成長5%。

Please turn to page 9. I am very pleased to report that our Asia segment reported an 18% increase in sales this quarter. In China, we saw a significant increase in sales to automotive customers as our oil cooler programs begin to launch.

請翻到第9頁。我很高興報告，本季我們的亞洲事業部銷售額成長18%。在中國，隨著我們的機油冷卻器專案開始導入，我們對汽車客戶的銷售大幅增加。

Not only does this contribute to the year-over-year increase, but sequentially, the volumes are up over 50% from the second quarter. This was partially offset by a decline in sales to off-highway customers, as the excavator market in China remains weak.

這不僅帶動年對年成長，按季比較，銷量也較第二季增加超過50%。然而，由於中國挖掘機市場仍然疲弱，對非公路（off-highway）客戶的銷售下滑，部分抵銷了上述成長。

We also saw year-over-year revenue increases in India, with sales increases to automotive, commercial vehicle, and off-highway customers. Gross margin improved 190 basis points from the prior year on the higher sales volume this quarter.

我們也看到印度的營收年對年增加，對汽車、商用車及非公路客戶的銷售均有所成長。本季在較高銷售量帶動下，毛利率較去年同期改善190個基點。

We continue to see year-over-year margin improvements in Asia as volumes increase. We had an operating loss for the quarter of $300,000, which is a $300,000 improvement versus the prior year.

隨著銷量增加，我們持續看到亞洲地區年對年毛利率改善。本季營業虧損為30萬美元，較去年同期改善30萬美元。

Our outlook for the Asia excavator market for 2015 is for continued weakness, specifically flat to down 5%. The outlook is brighter in India across all served markets and for the China automotive market, where we expect the market to be up 5% to 10%.

我們對2015年亞洲挖掘機市場的展望仍為持續疲弱，具體而言為持平至下滑5%。印度在所有服務市場的展望較為明朗；而中國汽車市場方面，我們預期市場將成長5%至10%。

I have previously discussed the importance of diversification in the Asia segment. The work we have done to diversify beyond the off-highway markets in China has resulted in the significant sales gain we have seen this year. We now have more automotive sales in China than off-highway sales, which may have seemed impossible just a few short years ago when the China excavator market was at its peak.

我先前曾談到亞洲事業部多元化的重要性。我們在中國將業務多元化、超越非公路市場所做的努力，帶來了今年顯著的銷售成長。我們目前在中國的汽車銷售已高於非公路銷售；而就在幾年前，當中國挖掘機市場處於高峰時，這似乎是不可能的。

As we expect, our new program launches in the China automotive market and in India to provide -- we expect them to provide significant growth for this segment in the near future.

如我們所預期，我們在中國汽車市場以及印度的新專案導入——我們預期它們將在不久的將來為此事業部帶來顯著成長。

Turning to page 10. Our building HVAC segment increased $19.3 million or 52% in the quarter. Of this amount, $6.5 million related to the North American business, driven by a 24% increase in heating product sales.

請看第10頁。本季我們的建築HVAC事業部增加1,930萬美元，或成長52%。其中650萬美元來自北美業務，主要由於供暖產品銷售成長24%。

Our Airedale business in the UK accounted for the balance of the sales increase, including $5 million of sales contributed by our recently acquired Barkell business. The year-over-year comparison also benefited from the lower sales in the third quarter of last year resulting from the fire in the UK in 2013.

英國的Airedale業務貢獻了其餘的銷售成長，其中包含我們近期收購的Barkell業務所貢獻的500萬美元銷售額。年對年比較也受惠於去年第三季因2013年英國火災事件而導致的較低銷售。

Gross profit for this segment increased 50% on the higher sales volume during the quarter. SG&A was up $2 million, including about $1 million of expenses at Barkell. We also had higher freight costs and sales commissions in North America resulting from the higher sales volume.

本季在較高銷售量帶動下，該事業部毛利增加50%。SG&A增加200萬美元，其中約100萬美元為Barkell的費用。我們在北美也因較高銷售量而產生較高的運費與銷售佣金。

Operating income increased $4.5 million to $9.8 million in the third quarter as compared to the prior year on increased sales volume.

由於銷售量增加，第三季營業利益較去年同期增加450萬美元至980萬美元。

Our outlook for the building HVAC market is for continued strength in each of our served markets. We expect the North American heating market to be up 3% to 6% and the UK data center and ventilation markets to be up 5%. We are clearly benefiting from the strong North American heating market and I am pleased that our building HVAC segment has been able to meet the increased market demand.

我們對建築HVAC市場的展望是在各個服務市場持續強勁。我們預期北美供暖市場將成長3%至6%，英國資料中心與通風市場將成長5%。我們顯然正受惠於北美供暖市場的強勁表現，我也很高興我們的建築HVAC事業部能夠滿足市場增加的需求。

In the UK, our Airedale team continues to produce at pre-fire volume levels in their temporary facilities, while making progress on the construction of their new building. The construction project remains on track and we're looking forward moving into our rebuilt facility by the end of this calendar year.

在英國，我們的Airedale團隊在臨時設施中持續以火災前的產量水準生產，同時也在新廠房建設方面取得進展。該建設專案仍按計畫進行，我們期待在本曆年年底前搬入重建完成的廠房。

With that, I'd like to turn it over to Mick for an overview of our consolidated financial results and guidance.

接下來，我想把時間交給Mick，請他概述我們的合併財務結果與財測指引。

Thanks, Tom. Good morning, everyone. Please turn to slide 12. Our second quarter yielded a 5% sales increase, despite the negative exchange rate impacts in the quarter. As Tom mentioned, on a constant currency basis, sales increased 9%.

謝謝，Tom。各位早安。請翻到第12張投影片。儘管本季匯率帶來負面影響，我們第二季仍實現銷售成長5%。如Tom所提及，以固定匯率計算，銷售成長為9%。

Our building HVAC and Asia segments showed the largest sales increases, which more than offset further weakness in South America. Europe's sales were lower, as this segment experienced unfavorable exchange rate impact of $12 million. On a constant currency basis, sales were actually up 6%.

建築HVAC與亞洲事業部的銷售增幅最大，足以抵銷南美洲進一步的疲弱。歐洲銷售較低，因該事業部受到1,200萬美元的不利匯率影響；但以固定匯率計算，銷售其實成長6%。

In the quarter, our gross profit increased 5%, which is in line with sales growth. The gross profit conversion was negatively impacted by higher aluminum prices. In total, aluminum increased 20% year over year. This includes a 10% increase in the spot price. In addition, the Midwest transaction premium has nearly doubled.

本季毛利增加5%，與銷售成長一致。毛利轉換率受到鋁價上漲的不利影響。整體而言，鋁價年對年上漲20%，其中包含現貨價格上漲10%。此外，中西部交易溢價（Midwest transaction premium）幾乎翻倍。

Moving on to SG&A, we are closely managing and reducing costs wherever possible. SG&A costs increased $700,000 or 2% from the prior year and decreased as a percentage of sales to 12.5%.

接著談SG&A，我們正密切管理並在可能之處降低成本。SG&A成本較去年增加70萬美元或2%，且占銷售比重下降至12.5%。

While the increase was small, there are two items I'd like to highlight. First, we had higher engineering and development costs as a result of lower recoveries from customers.

雖然增幅不大，但有兩點我想特別說明。第一，由於向客戶收回的款項較少，我們的工程與開發成本較高。

Second, we experienced higher costs in building HVAC due to the following factors in the UK. Last year, there were reduced costs as a result of the fire. In addition, last year's results did not include the Barkell acquisition. Offsetting some of these cost increases was the recovery of $2 million from business interruption insurance related to the fire.

第二，由於英國以下因素，我們在建築HVAC的成本較高。去年因火災而有較低的成本；此外，去年的結果未包含Barkell收購案。部分抵銷這些成本增加的是：我們就火災相關的營業中斷保險取得200萬美元的理賠回收。

Also note that we recorded $1.9 million of restructuring expenses in the quarter. $600,000 relates to equipment transfer and plant consolidation charges in Europe; $700,000 is for severance costs in South America; the remaining $600,000 relates to the closure of our McHenry plant in North America.

另外請注意，本季我們認列190萬美元的重整費用。其中60萬美元與歐洲的設備移轉及工廠整併費用相關；70萬美元為南美洲的資遣費；其餘60萬美元與北美McHenry工廠的關閉相關。

I am also pleased to report that we completed the sale of our wind tunnel in Europe. This resulted in additional cash flow of $5.8 million and a gain of $3.2 million. This gain is not included in our adjusted operating income.Q3's adjusted operating income of $14.2 million represents a nice improvement from the prior quarter and a 15% increase over the prior year.

我也很高興報告，我們已完成出售歐洲的風洞。此交易帶來額外580萬美元的現金流入，以及320萬美元的處分利益。該處分利益未納入我們的調整後營業利益。第三季調整後營業利益為1,420萬美元，較上一季明顯改善，並較去年同期增加15%。

Moving down to the provision for income taxes line, as expected, we had a $2.2 million increase in our income tax expense for the quarter. Earnings per share of $0.15 was down slightly versus the prior year, but this is mainly due to the higher income tax expense.

再往下看所得稅費用項目，如預期，本季所得稅費用增加220萬美元。每股盈餘0.15美元較去年同期略降，但主要原因是所得稅費用較高。

Turning to slide 13, our free cash flow was positive in the quarter, but as anticipated, below the prior year due to a number of small items. One aspect is slightly higher working capital requirements, driven primarily by Airedale returning to more normalized operating conditions. Also there are timing aspects related to insurance proceeds, VAT collections in Europe, and changes in other liabilities.

請看第13張投影片，本季自由現金流為正，但如預期，因多項小因素而低於去年同期。其中一項是營運資金需求略為提高，主要由Airedale回到較正常的營運狀態所致。此外，亦有與保險理賠款、歐洲增值稅（VAT）收款時點，以及其他負債變動相關的時間差因素。

Year to date, our free cash flow is $8.2 million. As you know, we had a strong free cash flow last year and are projecting positive free cash flow again this year. Also note that our free cash flow calculation does not include the $5.8 million of cash we received for the sale of our wind tunnel in Europe. We continue to maintain a strong balance sheet and ended the quarter with a net debt to capital ratio of 15%.

截至目前為止，我們的自由現金流為 820 萬美元。如各位所知，我們去年自由現金流表現強勁，並預期今年也將再次實現正的自由現金流。另外請注意，我們的自由現金流計算不包含我們因出售歐洲風洞而收到的 580 萬美元現金。我們持續維持強健的資產負債表，並在本季末的淨負債對資本比率為 15%。

Now let's turn to our fiscal 2015 full-year guidance on slide 14. Given the current economic environment, including foreign exchange rates and with one quarter remaining, we have updated our financial guidance.

現在讓我們看投影片 14 上我們 2015 會計年度的全年指引。鑑於目前的經濟環境（包括外匯匯率），且僅剩一個季度，我們已更新我們的財務指引。

Our full-year outlook is as follows: sales up 1% to 3% from the prior year. Previously, we had expected sales growth in the range of 3% to 6%. Approximately 150 basis points of the decline is due to exchange rates.

我們的全年展望如下：銷售額較前一年成長 1% 至 3%。先前我們預期銷售成長區間為 3% 至 6%。其中約 150 個基點的下修是由匯率所致。

Adjusted operating income in the range of $65 million to $70 million. Our previous guidance was $65 million to $73 million. Adjusted earnings per share is now $0.63 to $0.70 as compared to our previous guidance of $0.63 to $0.73.

調整後營業利益介於 6,500 萬至 7,000 萬美元。我們先前的指引為 6,500 萬至 7,300 萬美元。調整後每股盈餘（EPS）目前為 0.63 至 0.70 美元，相較於先前指引的 0.63 至 0.73 美元。

In summary, we're lowering our sales growth projection while narrowing the earnings range. The change in sales guidance is driven primarily by the strengthening of the US dollar in recent months. In addition, the weak markets in Brazil continue to negatively impact our sales growth and earnings.

總結來說，我們下調銷售成長預測，同時縮窄獲利區間。銷售指引的變動主要是由於近幾個月美元走強所致。此外，巴西市場疲弱仍持續對我們的銷售成長與獲利造成負面影響。

We also adjusted two key assumptions behind the earnings outlook. Our SG&A forecast is now $180 million to $185 million, which is lower from our -- lowered from our previous guidance of $185 million to $195 million. We also anticipate slightly lower taxes, with a range of $20 million to $22 million.

我們也調整了獲利展望背後的兩項關鍵假設。我們的 SG&A（銷售、一般及行政費用）預測目前為 1.80 億至 1.85 億美元，較我們先前 1.85 億至 1.95 億美元的指引下調。我們也預期稅負略低，區間為 2,000 萬至 2,200 萬美元。

I'm pleased that we're able to maintain our adjusted operating income and EPS guidance ranges, even with the significant changes in our currency environment and the continuation of difficult market dynamics in Brazil. We are currently in the process of finalizing our annual plan and we will present our revenue and earnings guidance for fiscal 2016 when we report our fourth-quarter results.

我很高興即使在匯率環境出現重大變化、且巴西艱困的市場動態仍在延續之下，我們仍能維持調整後營業利益與 EPS 指引區間。我們目前正在完成年度計畫的定案，並將在公布第四季結果時提出 2016 會計年度的營收與獲利指引。

Given the current exchange rate environment, we expect significant headwinds in regards to our sales comparisons. As Tom walked you through, in fiscal 2016, we are not expecting significant improvements in most of our end markets and expect continued weakness, both in Brazil and in the global agricultural and mining markets.

在目前的匯率環境下，我們預期在銷售比較方面將面臨顯著逆風。正如 Tom 先前為各位說明的，在 2016 會計年度，我們不預期多數終端市場會有顯著改善，並預期巴西以及全球農業與礦業市場將持續疲弱。

On the positive side, our diversification strategy in Asia is working and we expect to see continued sales improvement as we launch automotive programs in China. Also, our building HVAC segment continues to deliver strong results and we expect these markets to continue to grow.

正面來看，我們在亞洲的多元化策略正在奏效，隨著我們在中國推出汽車專案，我們預期銷售將持續改善。此外，我們的建築 HVAC（暖通空調）事業部門持續交出強勁成果，我們預期這些市場將持續成長。

Finally, we are completing the remaining steps of our restructuring activities in North America, Europe, and Brazil. We expect to see some of those benefits next year.

最後，我們正在完成北美、歐洲與巴西重整活動的剩餘步驟。我們預期明年將看到其中部分效益。

So with that, Tom, I'll pass the call back to you to wrap up.

那麼就到這裡，Tom，我把電話交回給你做結語。

Thanks, Mick. This was a solid quarter for Modine, with growth in sales and earnings. As we look ahead, we are focused on significant new business activity in China, converting our strong building HVAC markets, completing our restructuring programs in Europe and North America, and further lowering our cost structure Brazil to match the weak market conditions there.

謝謝，Mick。對 Modine 而言，這是一個穩健的季度，銷售與獲利皆成長。展望未來，我們將聚焦於中國大量的新業務活動、延續我們在建築 HVAC 市場的強勢表現、完成歐洲與北美的重整計畫，並進一步降低巴西的成本結構，以符合當地疲弱的市場狀況。

There are still challenges ahead of us, but I'm highly confident we will continue to benefit from all the work that has been and will be accomplished to diversify and grow our business.

前方仍有挑戰，但我非常有信心，我們將持續受惠於為了多元化並成長我們的業務而已完成及將要完成的所有工作。

And we'd like to take your questions.

接下來我們願意回答各位的問題。

(Operator Instructions) Mike Shlisky, Global Hunter.

（接線員指示）Mike Shlisky，Global Hunter。

I had a few quick ones here. So you seem to have somewhat of a, I would say, a slightly more positive view, I'd say, on North America than anywhere else, I suppose, in what's in the slides as far as your market outlook.

我這裡有幾個簡短問題。就你們投影片中的市場展望而言，你們似乎對北美的看法相對更正面一些，我想比其他地區都更正面。

As you transition production out of McHenry and as you see sort of elevated demand, are you seeing any [unclear] costs or any kind of challenges to keep up with some of what looks like to be some pretty strong volume trends in trucks and elsewhere? Or do you have kind of a plan where kind of things are being transitioned in a very gradual and deliberate way?

當你們把生產從 McHenry 轉出、且看到需求有些偏高時，你們是否看到任何［聽不清］成本或任何挑戰，導致難以跟上看起來在卡車及其他領域相當強勁的出貨量趨勢？或者你們是否有一個計畫，讓轉移是以非常循序且審慎的方式進行？

It's a good question. And clearly, we feel we're really in control of the transfer of products. But at this point, there's no peaking issues. We do know we are under heavy demand on the commercial truck market in North America. And last quarter, we talked about some of the challenge of getting the volume through our main facility that produces modules for heavy-duty customers.

這是個好問題。很明顯地，我們覺得自己確實能掌控產品移轉。但就目前而言，沒有產能尖峰的問題。我們確實知道北美商用卡車市場需求非常強勁。上一季我們也談到，讓產量順利通過我們主要廠區（該廠為重型客戶生產模組）的部分挑戰。

And we've made a lot of progress on that, with improvements on conversions getting through some of the summer service spikes and that type of stuff that I mentioned. But besides that, we feel very good control with the transfer and with our, let's say, ability to be capable to maintain the volume demand that's out there with our -- of those strong markets in the commercial truck and automotive side.

我們在這方面已取得很大進展，透過改善轉換作業，度過我提到的夏季維修需求尖峰等情況。除此之外，我們對移轉的掌控，以及我們維持市場上需求量的能力，都很有信心——在商用卡車與汽車端這些強勁市場方面亦然。

Got you. And then moving on, you had discussed some of the aluminum price issues out there. I guess first, broadly, is there not some kind of lag or some kind of contract that you have to obtain the aluminum? Just kind of maybe walk us through how that works.

了解。接著，你提到一些鋁價方面的問題。我想先從整體來看，你們在取得鋁材時，是否沒有某種滯後效應或某種合約機制？能否請你大致說明一下運作方式。

And secondly and perhaps, like, more importantly, are you having any issues with actually obtaining the raw material there?

第二點，或許更重要的是，你們在實際取得那邊的原物料時，有遇到任何問題嗎？

I think you're referring to the Midwest transaction premium that I mentioned and Mick followed up on. Clearly, that phenomenon -- that cost has always been there. It's been much less in magnitude in the past years and the recent few years.

我想你指的是我提到、而 Mick 也補充的「中西部交易溢價」。很明顯地，那個現象——那項成本一直都存在。只是過去幾年、以及最近這幾年，其幅度小得多。

This has really spiked in the last 12 months and specifically in the last 6 or 9 months and really made an impact of essentially doubling from approximately single digits up into the $0.20 per pound that we are paying now, which, obviously, is a big problem for us that cannot be passed through. We don't have that in our current contract agreements with our customers to pass that charge through, as we did with the LME change, which is the normal structure of our material agreement.

這在過去 12 個月大幅飆升，尤其在最近 6 到 9 個月，確實造成影響，基本上從先前每磅約個位數美分，翻倍上升到我們現在支付的每磅 0.20 美元左右。這對我們顯然是個很大的問題，而且無法轉嫁。我們目前與客戶的合約協議中，並沒有像 LME 變動那樣可將該費用轉嫁的條款；LME 變動才是我們材料協議的正常結構。

So this is something that -- it's concerning. We are working with others in similar industries and with national organizations to try to get a handle on the reason of this spiking of this transactional cost to get it back to normal operating levels.

因此這件事——確實令人擔憂。我們正與其他類似產業以及全國性組織合作，試圖掌握這項交易成本飆升的原因，並讓它回到正常的營運水準。

Mick, do you want to add anything more to that?

Mick，你要再補充一些嗎？

Just that there's the three components, really, to the costs for Modine. The spot price based on the LME. Tom mentioned the transaction premium, which is the standard adder, and then the fabrication costs. The customers rely on us to negotiate the fabrication costs and what has traditionally been passed through, as Tom mentioned, is the true base LME cost.

補充一下，對 Modine 而言，成本主要有三個組成部分：以 LME 為基礎的現貨價格；Tom 提到的交易溢價（也就是標準加價項）；以及加工製造成本。客戶仰賴我們去協商加工成本，而傳統上可轉嫁的，如 Tom 所說，是真正的 LME 基礎成本。

What's going to happen across the market now is this is -- and anybody who is dealing with aluminum, including can companies, this is on everybody's radar. And we'll have to look at all of our commercial agreements now that there's been a change.

接下來整個市場會發生的情況是——任何在使用鋁材的公司（包括製罐公司）都在關注這件事。既然情況已經改變，我們就必須重新檢視所有商業協議。

Okay, great. And then finally, given your somewhat less positive outlook for other parts of the world and other markets, do you have any plans to kind of further rationalize costs, rationalize footprints, headcount, or what not going into 2015, beyond the restructuring plans you've already announced?

好的，很好。最後，鑑於你們對世界其他地區與其他市場的展望較不樂觀，除了你們已宣布的重整計畫之外，進入 2015 年你們是否有任何計畫要進一步合理化成本、合理化據點、員額等，或其他類似措施？

No, our focus right now and we feel the steps we've taken have been appropriate to address the market changes in both North America and in Europe as far as some of the challenges. Clearly, the biggest focus right now is on Brazil, where we see the most weakest demand and really concerning outlook.

不，我們目前的重點是——而且我們認為，針對北美與歐洲市場變化所採取的步驟，就部分挑戰而言是適切的。顯然，目前最大的重點在巴西；我們在那裡看到需求最疲弱，且前景確實令人擔憂。

And as I mentioned and as Mick mentioned in our comments, we are going to continue to look at Brazil to get that cost structure right to what we think matches up with the long-term slowdown in demand of our major markets down there.

正如我提到的、以及 Mick 在我們的評論中提到的，我們將持續關注巴西，讓那裡的成本結構調整到我們認為能與當地主要市場長期需求放緩相匹配的水準。

Okay, great. I'll leave it there, guys. Thanks so much.

好的，很棒。我就先說到這裡，各位。非常感謝。

David Leiker, Baird.

David Leiker，Baird。

This is Joe Vruwink for David. I wanted to stay on the subject of aluminum. So I think something happened a few years ago with the steel indices as well, where depending on what steel index you had in your pricing contract. Normally, the two were pretty close together. There was a divergence all of a sudden and everyone had to scramble to reset their pass-through agreements.

我是代替 David 的 Joe Vruwink。我想繼續談鋁的話題。我記得幾年前鋼鐵指數也發生過類似情況：取決於你在定價合約中採用哪一個鋼鐵指數，通常兩者非常接近，但突然出現分歧，大家都得趕緊重新設定成本轉嫁（pass-through）協議。

Is this sort of thing what's going on with the aluminum premium right now, where that can be embedded in contracts? And then if that's the case, does this begin to normalize maybe two quarters from now, where you get recovery for both? And is there any potential to ultimately realize the benefits, given the underlying commodity is coming down?

現在鋁溢價（premium）是不是也在發生類似的事——也就是它可能被嵌入合約中？如果是這樣，是否可能在大約兩個季度後開始正常化，讓兩者都能回收（recovery）？另外，鑑於基礎商品價格正在下跌，最終是否有可能實現其帶來的好處？

Well, as far as I understand, Joe, this is a little bit different phenomenon because of the way the structure has been and the changes and what banks can do and how they can invest in some of the commodities themselves, which drove this whole Midwest transaction premium up.

嗯，就我所理解，Joe，這是稍微不同的現象，因為它與既有的結構方式、以及銀行能做什麼、以及它們如何投資某些商品本身的變化有關；這些因素推升了整個中西部（Midwest）交易溢價。

I think from our standpoint, working with national associations, this is something that -- it is getting a lot of attention. It is kind of looking back toward regulation changes. There was actually an exception made for that to occur, that the banks could involve in actually owning commodities themselves and then using this buildup of inventory to actually essentially increase this premium transaction cost, which is getting it to -- from smelters to end users of aluminum.

我認為就我們的立場，透過與全國性協會合作，這件事——正受到高度關注。某種程度上是在回頭檢視監管變更。實際上曾有一項例外允許發生這種情況：銀行可以參與、甚至實際持有商品本身，然後透過累積庫存，基本上提高這個溢價交易成本——也就是把鋁從冶煉廠送到終端用戶的成本。

So I think it varies a bit from the steel buildup of what happened a couple years ago, but we are hoping that this thing gets normalized with some changes, both at the federal level and also changes maybe at the financial level that we can get this thing back under control.

所以我認為這與幾年前鋼鐵庫存累積所發生的情況有些不同，但我們希望透過一些變更讓它回歸正常——包括聯邦層級的變更，以及可能在金融層級的變更——讓這件事重新受到控制。

Mick, do you have any other thoughts on that?

Mick，你對此還有其他想法嗎？

No. I guess I'd just add I think commercially, it's definitely impacting everybody. How the supply base and the OEs decide to manage it and share in it. What Tom was referring to is definitely the underlying problem we hope goes away.

沒有。我想我只補充一點：從商業面來看，這確實影響到每個人。供應端與原始設備製造商（OE）要如何決定管理它、以及如何分攤它。Tom 所提到的確是我們希望能消失的根本問題。

But then if it were to continue, you really can't hedge it. And how the supply base and the OEs decide to share in that I think will be a commercial discussion going forward.

但如果它持續下去，你其實無法對沖（hedge）。而供應端與原始設備製造商（OE）要如何分攤，我認為未來將會是一個商業協商議題。

And then any way to quantify or qualify aluminum as a percent of your material by or a percent of COGS? Because looking at gross margin staying flat year over year and you have this 20% increase in a pretty important inputs, material. It would seem like margins would've been up pretty nicely year over year.

那麼，有沒有辦法量化或描述一下鋁在你們材料採購中的占比，或在銷貨成本（COGS）中的占比？因為看起來毛利率年對年持平，但你們有一項相當重要的投入材料上漲了 20%。照理說，毛利率年對年應該會上升得很不錯。

Yes, the metals in the quarter -- most of that would be the impact of aluminum, Joe. But the metal impact in the quarter for Modine was about $2 million.

是的，本季度金屬的影響——其中大部分會是鋁的影響，Joe。不過本季度對 Modine 的金屬影響大約是 200 萬美元。

Okay, great. That's helpful. Switching gears and talking about Europe, do you think it might be fair to say this December quarter is seeing the maximum headwinds from inefficiencies? And then any way to think about next year, given at some point the duplicative costs and inefficiencies go away and you are realizing more of a normal contribution?

好的，很棒。這很有幫助。換個話題談歐洲，你覺得可以說這個 12 月季度正承受效率不彰帶來的最大逆風嗎？另外，對明年有沒有什麼看法：因為在某個時間點，重複成本與效率不彰會消失，你們就會實現更正常的貢獻。

That's a fair question. And we are going to see the reduction of these inefficiencies driven by the logistical issues and things that have challenged the team in Germany for the last several quarters. Those will start winding down towards the end of this fiscal quarter.

這是個合理的問題。我們將會看到這些效率不彰的降低——主要是由物流問題以及過去幾個季度在德國挑戰團隊的各種事情所造成。這些狀況會在本財季末開始逐步消退。

As we get into the next fiscal quarter or beginning of our next fiscal year, we really believe that these will start hitting those improvement targets early. So I think you're going to start seeing the momentum shifting.

當我們進入下一個財季或下一個財年的開始時，我們確實相信這些改善將會在早期就開始達到改善目標。所以我認為你會開始看到動能轉向。

We'll still have some of those in place, but the temporary costs, temporary labor contractual costs that we have on making the physical moves will be mostly behind us and be much more stable in our new footprint.

我們仍會有部分因素存在，但臨時成本、臨時勞務的合約成本，以及我們在進行實體搬遷時所產生的成本，大多將會在我們身後；在新的據點配置下也會更穩定。

And that really goes for North America as well, with the restructuring, as we mentioned, in our McHenry, Illinois, facility. So we really expect to see these contribute to our new fiscal year going forward.

這點對北美也同樣適用，因為如我們所提到的，我們在伊利諾伊州 McHenry 廠進行重整。因此，我們確實預期這些將在未來的新財年開始帶來貢獻。

I would add Brazil as well.

我也要補充巴西。

Oh yes, good point.

哦對，很好的補充。

This is the first quarter we started to see some impact of the cost reductions. We should see a little bit more in Q4. But next fiscal year, I would just add to Tom's comment on the McHenry and Europe that South America, we expect to see some of the year-over-year improvements from the cost-cutting efforts this year.

這是我們第一個季度開始看到一些成本降低的影響。我們在第四季應該會再多看到一些。但在下一個財年，我想在 Tom 對 McHenry 與歐洲的評論之外再補充：南美方面，我們預期會看到今年成本削減努力帶來的一些年對年改善。

Okay, great. And then my last one -- the Asia business at one point in time was mostly excavators, given the growth this quarter and the fact that the excavator market still isn't participating. I'm sure that statement is no longer true.

好的，很棒。那我最後一個問題——亞洲業務在某個時間點主要是挖掘機相關；但考量本季度的成長，以及挖掘機市場仍未回溫，我確定那個說法已不再成立。

Any way to break up the business maybe just by country? Because India certainly seems like it's going to be a positive contributor next year. And then maybe by end markets, thinking about what piece is automotive-related at this point.

有沒有辦法把業務按國家拆分一下？因為印度看起來明年肯定會是正向貢獻者。也能否按終端市場拆分，想了解目前與汽車相關的占比大概是多少。

Yes, no, it's -- I'm glad you brought this up. I'm very pleased with what we saw this quarter occurring in Asia. We saw the significant growth that was directly to the diversification strategy we put in place a couple years ago.

是的，沒錯——我很高興你提到這點。我對我們本季度在亞洲看到的情況非常滿意。我們看到的顯著成長，直接來自我們幾年前制定的多元化策略。

The automotive oil cooler launches are on track. We'll probably hit three-quarters of a million coolers this year and shooting for 1.5 million next year, to kind of give you a magnitude of what's going into the automotive market in China.

汽車用機油冷卻器（oil cooler）的量產導入進度如期。我們今年大概會達到 75 萬個冷卻器，明年目標是 150 萬個；這可以讓你大致了解在中國汽車市場的規模。

In India, you bring up a great point. We are very pleased with our India operation. We've got the market positions in each of our diversified segments: automotive, off-highway, and commercial truck that we've targeted.

至於印度，你提得很好。我們對印度營運非常滿意。我們在各個我們鎖定的多元化領域都取得市場地位：汽車、非公路（off-highway）以及商用卡車。

The economy is picking up. We're seeing lots of opportunities with export, opportunities with our customers. And so we feel that India is going to be a strong contributor as we go forward as well in our Asia segment.

經濟正在回溫。我們看到很多出口機會、以及與客戶合作的機會。因此我們認為，隨著我們持續推進，印度也將在亞洲事業部成為強勁的貢獻者。

So the team's done a great job over there of holding on through the downturn of the off-highway market. As you mentioned, excavators, after they peaked in 2012 and bringing in in a very measured way this new diversification strategy that's going to start converting for us very well.

所以團隊在那邊做得非常好，挺過了非公路市場的下行。正如你提到的，挖掘機在 2012 年見頂之後，我們以非常審慎的方式導入這個新的多元化策略，而它將開始為我們帶來很好的轉化成果。

Joe, I don't have the estimated Asia mix as it currently sits. Unless Kathy has something, we'll call you. We'll get back to you with the answer. I don't have the actual mix with us right now. But we'll get back to with that.

Joe，我手上沒有目前亞洲組合（mix）的估算。除非 Kathy 有資料，否則我們會再打給你。我現在沒有實際的組合數據在手邊，但我們會再回覆你。

Yes, no problem. We can follow up. That's it for me. Thanks, guys.

好的，沒問題。我們可以再跟進。我的問題就到這裡。謝謝各位。

(Operator Instructions) Robert Kosowsky, Sidoti.

（接線員指示）Robert Kosowsky，Sidoti。

Question on Europe. I was wondering how do we think about the gross margin profile post the restructuring initiatives in Europe? Maybe, I guess, two, three quarters down the road, just given the changes that we are seeing in end markets and the changes you are having in mix. Is it going to be at the lower end of that 15% to 17% range? Is that kind of a fair way of looking at it?

關於歐洲的問題。我想請教，我們該如何看待歐洲在重整措施之後的毛利率走勢？也許在未來兩到三個季度之後，考量到我們在終端市場看到的變化，以及產品組合的變化。它會落在 15% 到 17% 區間的較低端嗎？這樣看是否合理？

Yes, this is Mick. Yes, definitely, the journey in Europe is taking a little bit longer than we expected.

是的，我是 Mick。是的，確實，歐洲的改善進程比我們原先預期的要久一些。

If you look at Europe and North America side-by-side, very similar businesses. The run rate this year for Europe is going to be, call it, 12% range for gross margin. North America is running closer to 16% range. Our goal would be to move that towards the 15% range.

如果把歐洲和北美並排來看，兩者是非常相似的業務。今年歐洲的毛利率運行水準大概會在 12% 左右。北美則更接近 16% 左右。我們的目標是把歐洲推進到接近 15% 的水準。

And definitely one of the impacts we have going on temporarily, as you know, is the inefficiencies related to plant consolidation. We've talked quite a bit about some of the profit margin challenges on the Origami truck radiator that we are trying to work on improving. And then there's volume.

而且如你所知，我們目前確實有一些暫時性的影響，其中之一是與工廠整併相關的效率不彰。我們也談過不少關於 Origami 卡車散熱器的利潤率挑戰，我們正努力改善。另外還有出貨量的因素。

So it's definitely going to be more than a few quarters, but really how that works is if we get operational improvements and get rid of some of the inefficiencies, we improve some of our productivity, including on Origami, that's going to get us a portion of the way there.

所以這肯定不會只是幾個季度就能完成；但實際上運作方式是：如果我們能取得營運改善、消除部分低效率、提升生產力（包括 Origami），那會讓我們朝目標前進一部分。

And then that business is really built to be closer to the EUR500 million range. We were there before the recession and so we're going to need a little bit of volume to come back in order to get us then to close the remaining gap.

此外，那個業務其實是以接近 5 億歐元的規模來建構的。我們在衰退之前曾達到那個水準，因此我們需要一些出貨量回升，才能把剩餘的差距補上。

Okay. So I guess within your control, can you get to, like, a 14% gross margin? Something like that? Then you need just some end market cooperation to get to the 15% to 17% range. Is that kind of a fair way of thinking about it?

了解。所以我想，在你們可控的範圍內，能否做到例如 14% 的毛利率？類似這樣？然後再需要終端市場配合，才能達到 15% 到 17% 的區間。這樣理解是否合理？

Yes, I think there's 100 basis points from -- if we get $5 million of improvement through improvement in operations and just pure non-volume productivity improvement, that's about going to get us to like 100 points. The other 200 basis points would come by, frankly, we need a $50 million-type of incremental volume to come back.

是的，我認為大概有 100 個基點來自——如果我們透過營運改善，以及純粹非出貨量的生產力提升，取得 500 萬美元的改善，那大概能讓我們提升約 100 個基點。其餘 200 個基點則坦白說需要約 5,000 萬美元等級的增量出貨量回來。

All right, that's definitely good. And then on the Asia Pac business, I was wondering -- it was obviously a fantastic quarter, both from a revenue and margin standpoint. And I'm wondering the sustainability of the revenue in the margin profile that we are seeing, because they're both outstanding.

好，這很有幫助。接著關於亞太業務，我想請教——這一季顯然非常出色，無論營收或毛利率表現都很亮眼。我想了解我們看到的營收與毛利率水準是否具有可持續性，因為兩者都非常突出。

Is this more symptomatic of a cycle peak environment? Should we be thinking about these types of numbers going forward? Any way to calibrate our view of what this segment should be doing.

這是否更像是景氣循環高峰期的現象？我們未來是否應該用這類數字來做預期？有沒有方法可以校準我們對這個部門應有表現的看法？

Let me talk about the top line first and I'll let Mick talk about the earnings focus. But on top line this year, we are breaking through last year's record North American volume levels in the heating product sales, which we thought was going to be a spike due to the polar vortex. But we're seeing strong sales continue.

我先談營收端，然後再請 Mick 補充獲利面的重點。今年在營收方面，我們的供暖產品銷售量正突破去年北美創紀錄的出貨水準；我們原本以為那是因極地渦旋造成的一次性高峰，但我們看到強勁銷售仍在延續。

The stocking program in the off-season went very well ahead of time. So there are some fundamentals that we think are driven by basically reconstruction of replacement of existing units in the field.

淡季的備貨計畫也提前且執行得非常順利。因此我們認為有一些基本面因素，主要是由於現場既有設備的汰換與重建需求所驅動。

Also with good product offerings by our group and a very -- we've strengthened our focus on distribution channels very well. So we've done all the factors -- making sure that we understand the market, our product meets sit in our distribution channel, and reps out in the field are really hitting it. So that's been very strong.

另外，我們團隊也提供了良好的產品組合，而且我們大幅強化了對通路的聚焦。我們把所有因素都做到位——確保我們理解市場、產品能契合我們的通路配置，且前線的業務代表確實在積極推動。因此表現非常強勁。

I think that we're also going to see the fact the investments we put in place with Barkell that we mentioned in the UK on the ventilation side and with our Geofinity acquisition, which now is in our geothermal residential heating and cooling business, is starting to get grounded as well. So we think top-line sustainable improvement in this segment is going to continue, with those investments on top of what we think is a good product lineup for what we had, both in North America and with Airedale in the UK.

我也認為，我們先前提到在英國通風領域與 Barkell 相關的投資，以及我們收購 Geofinity（目前納入我們的地熱住宅供暖與制冷業務）的投資，也開始逐步落地並發揮效果。因此我們認為，除了既有良好的產品線之外（北美以及英國的 Airedale），再加上這些投資，該部門的營收可持續改善將會延續。

On the earnings side, Mick, do you want to add some color to that?

在獲利方面，Mick，你要不要補充一些說明？

There is probably just in some ways a little bit of a perfect storm, in a good way, and a tailwind. So if we go back several years, this business has a long history of 30%+ gross margins and I would say more normalized or normalized, like a 15% operating margin, which is really good.

某種程度上，這有點像是「完美風暴」（以好的方式）以及順風因素。如果回顧幾年前，這項業務長期以來毛利率都有 30% 以上的歷史，而我會說更正常化的水準——或長期正常化——大概是 15% 左右的營業利益率，這其實非常不錯。

But when I mentioned some of the tailwinds, as Tom walked you through, really two years in a row of exceptional heating markets were at all-time highs there. And then -- which helps with a mix issue.

至於我提到的一些順風因素，正如 Tom 帶你梳理的，連續兩年供暖市場都異常強勁、處於歷史高位；這也有助於產品組合的改善。

We are returning to post fire, getting things rolling in the UK there. We've got the acquisition plus we had some good news. We are able to capture some of the business interruption insurance.

我們在英國那邊也正從火災後的狀態恢復、讓營運重新上軌道。我們有併購帶來的貢獻，另外也有一些好消息：我們能夠取得部分營業中斷保險的理賠。

The short answer to your question -- yes, absolute great quarter. Probably normalized operating margins are a little bit closer, I would say, long term to around 15% than 17%.

對你問題的簡短回答是——是的，這一季確實非常出色。但若看長期，正常化的營業利益率可能更接近約 15%，而不是 17%。

Okay. That's definitely very good. And then one final question -- as we think about the Asia oil cooler ramp, is there any way to think about the incremental margins of this unit?

了解，這很有幫助。最後一個問題——當我們思考亞洲油冷卻器的放量爬坡時，有沒有什麼方式可以看待這個單元的增量利潤率？

On the -- can you repeat the question?

關於——你可以再重複一次問題嗎？

Yes, just on Asia segment. You have nice growth from the oil cooler business and I'm wondering how should we think about incremental margins on that extra business?

好的，就是在亞洲部門。你們的油冷卻器業務帶來不錯的成長，我想了解我們應該如何看待這部分新增業務的增量利潤率？

Yes, the -- I think Asia is similar to what we would say in our other OE segments. 25% to 30% is a good normal conversion.

是的——我認為亞洲的情況與我們其他 OE（原廠配套）部門類似。25% 到 30% 是一個不錯、正常的轉換率。

All right, thank you very much.

好的，非常感謝。

That would be obviously gross profit on incremental sales.

那指的當然是增量銷售額所帶來的毛利。

All right, thank you very much. And good luck, guys.

好的，非常感謝。也祝各位好運。

Thanks.

謝謝。

Thank you. I'm showing no further questions at this time. I would now like to turn the conference back to Kathy Powers.

謝謝。目前顯示沒有其他提問。我現在把電話會議交回給 Kathy Powers。

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

今天的電話會議到此結束。感謝各位今天早上加入我們，也謝謝各位對 Modine 的關注。再見。

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect.

各位女士、先生，感謝參與今天的電話會議。本次議程至此結束，大家可以掛線。