Modine Manufacturing Company (MOD) 2015 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Modine Manufacturing fourth-quarter fiscal 2015 earnings conference call.

各位女士、各位先生，大家好，歡迎參加 Modine Manufacturing 2015 會計年度第四季財報電話會議。

(Operator Instructions)

（接線員指示）

As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Kathy Powers, Vice President, Treasurer and Investor Relations. You may begin.

提醒各位，本次電話會議將進行錄音。現在我很榮幸介紹今天會議的主持人：Kathy Powers，副總裁、財務長兼投資人關係主管。您可以開始了。

Thank you for joining us today for Modine's fourth-quarter fiscal 2015 earnings conference 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 會計年度第四季財報電話會議。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 for today's presentation. Those links are available through both the webcast links as well as the 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 two hours after the call concludes.

我們今天的簡報將使用投影片。相關連結可透過網路直播連結以及本公司網站 modine.com「投資人關係」專區所張貼的 PDF 檔取得。此外，若您需要在會議結束前提前離線，會議結束約兩小時後，您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 fourth-quarter results and provide our revenue and earnings guidance for fiscal 2016. 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 將就我們第四季的業績提供評論，並提供 2016 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，相關內容如同今日的財報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，我很高興將電話會議交給 Tom Burke。

Thank you Kathy and good morning everyone. I'm pleased to report that we ended our fiscal year with a strong fourth quarter.

謝謝 Kathy，各位早安。我很高興報告，我們以強勁的第四季表現為本會計年度畫下句點。

Our fourth-quarter sales of $363 million were up 2% from the prior year on a constant currency basis with sales growth in each of our segments except South America, where markets remained weak. Adjusted operating income of $17 million, up 27% from the prior year, largely driven by improved gross margin in North America and building HVAC segments.

第四季銷售額為 3.63 億美元，按固定匯率基礎較去年同期成長 2%；除南美洲市場仍疲弱外，我們各事業部均呈現銷售成長。調整後營業利益為 1,700 萬美元，較去年同期成長 27%，主要受北美與建築 HVAC 事業部毛利率改善所帶動。

We reported adjusted earnings per share of $0.12 compared to $0.15 in the prior year. Despite the significant increase in operating income, EPS declined due to higher income tax expense in the current year resulting from the reversal of US tax valuation allowances in the fourth quarter of last year.

我們的調整後每股盈餘為 0.12 美元，去年同期為 0.15 美元。儘管營業利益大幅增加，但由於本年度所得稅費用較高，導致 EPS 下滑；此一增加主要源自去年第四季轉回美國稅務估值備抵（valuation allowances）所造成的比較基期影響。

I'm pleased to report that for the full fiscal year, sales were up 4%, excluding currency, and reported adjusted operating income of $65 million, which is up 6% from the prior year. We were able to grow earnings despite unfavorable currency impact and weaker than expected conditions in some of our key end markets.

我很高興報告，就全會計年度而言，排除匯率影響後銷售額成長 4%，並認列調整後營業利益 6,500 萬美元，較去年成長 6%。儘管匯率影響不利，且部分關鍵終端市場景氣弱於預期，我們仍成功提升獲利。

Our earnings benefited from a 40 basis point improvement in gross margin driven by higher sales volume and lower warranty cost. Adjusted earnings per share of $0.63 was down from the prior year, again, due to the expected increase in income tax expense.

我們的獲利受惠於毛利率提升 40 個基點，主要由較高的銷售量與較低的保固成本所驅動。調整後每股盈餘為 0.63 美元，較去年下降，原因同樣是所得稅費用如預期增加。

Mick will go through the consolidated results in greater detail. First, I will review the segment performance and provide an initial view on the end market expectations for fiscal 2016.

Mick 將更詳細說明合併財務結果。首先，我將回顧各事業部表現，並就 2016 會計年度終端市場的預期提供初步看法。

Turning to page 6, our North America segment finished the year on a strong note. Sales increased 1%, 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.

翻到第 6 頁，我們北美事業部以強勁表現結束本年度。銷售額成長 1%；對商用車與汽車客戶的銷售增加，足以抵銷對非道路（off-highway）客戶銷售下滑的影響，因農業與礦業設備市場仍然疲弱。

Adjusted operating income was up $5.6 million to $15.4 million, an increase of 57% compared to the prior year. This was driven by a 310 basis point improvement in gross margin, to 19%, and a decrease in SG&A expense.

調整後營業利益增加 560 萬美元至 1,540 萬美元，較去年成長 57%。此表現主要來自毛利率提升 310 個基點至 19%，以及銷售、一般及行政（SG&A）費用下降。

The gross margin improvement was primarily driven by lower warranty cost in the current year. Both gross margin and SG&A benefited from lower incentive compensation expenses as compared to last year.

毛利率改善主要由本年度較低的保固成本所帶動。相較去年，毛利率與 SG&A 亦受惠於較低的獎酬激勵費用。

We're nearing the completion of our transfer of production from our McHenry, Illinois manufacturing facility to other Modine locations. In addition, we recently announced our intention to close our Washington, Iowa facility over the next two to three years. This was not an easy decision but was the right one as we continue to improve our manufacturing footprint by operating scale production facilities.

我們正接近完成將伊利諾州 McHenry 製造廠的產能移轉至 Modine 其他據點的作業。此外，我們近期宣布計畫在未來兩到三年內關閉愛荷華州 Washington 廠。這並非容易的決定，但在我們持續透過營運具規模的生產基地以改善製造版圖之際，這是正確的選擇。

As with the McHenry closure, this does not represent a decrease in overall manufacturing capacity, but instead, a commitment to world-class, cost-effective manufacturing operations to better serve our customers and deliver increased value to our shareholders. We will move production from Washington to our Joplin, Jefferson City, and Nuevo Laredo facilities.

如同 McHenry 廠的關閉，此舉並不代表整體製造產能下降，而是我們對世界級、具成本效益的製造營運的承諾，以更好地服務客戶並為股東創造更高價值。我們將把 Washington 的生產移轉至 Joplin、Jefferson City 與 Nuevo Laredo 等廠區。

We expect to incur total closure costs of approximately $5 million over the entire Washington closure period with $2 million of that being reported in the first quarter of fiscal 2016 relating to anticipated severance cost. There will also be temporary inefficiencies that we typically see with closing a plant and moving production. We anticipate that these actions will generate annual savings of at least $9 million, once the closure is completed.

我們預期在整個 Washington 關廠期間將發生約 500 萬美元的總關閉成本，其中 200 萬美元將於 2016 會計年度第一季認列，主要與預期的資遣費用相關。關廠與移轉生產通常也會帶來短期效率不彰。我們預期一旦關廠完成，這些行動每年可帶來至少 900 萬美元的節省。

Our outlook for the fiscal 2016 North America heavy duty truck market is for growth of 5% to 10% over fiscal 2015. While we expect mediums to be flat as compared to the prior year, we may realize lower overall growth in North America commercial vehicle market due to our particular mix of business. Our outlook for the automotive market is for sales to remain steady, possibly increasing 5%.

我們對 2016 會計年度北美重型卡車市場的展望為較 2015 會計年度成長 5% 至 10%。雖然我們預期中型車市場與去年持平，但由於我們特定的業務組合，北美商用車市場的整體成長可能較低。我們對汽車市場的展望為銷售維持穩定，可能成長 5%。

For off-highway markets, we expect continued weakness in the agriculture equipment market with sales projected to be down an additional 20% to 25%, versus fiscal 2015. We expect the construction market to be flat with gains in light construction, most 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，銷售額相較 2015 會計年度預估將再下滑 20% 至 25%。我們預期建築市場將持平，輕型建築的成長很可能抵銷重型建築與礦業持續疲弱的影響。

Turning to page 7, sales for our Europe segment increased 5% in the fourth quarter excluding currency impact. In US dollar terms, sales decreased 14% in the quarter, driven by the impact of the stronger US dollar versus the Euro.

翻到第 7 頁，我們歐洲事業部第四季銷售額在排除匯率影響後成長 5%。以美元計價，受美元兌歐元走強影響，該季銷售額下滑 14%。

Sales to automotive customers was up 11%, driven by strong oil cooler and condenser sales. Sales to commercial vehicle customers were up 8%, driven by higher volumes of components for Euro 6 vehicles, including radiators and EGRs. These increases were partially offset by lower off-highway and tuning sales which were down from the prior year.

對汽車客戶的銷售成長 11%，主要由機油冷卻器與冷凝器的強勁銷售所帶動。對商用車客戶的銷售成長 8%，主要因 Euro 6 車款零組件（包括散熱器與 EGR）出貨量增加。上述成長部分被非道路與改裝（tuning）銷售下滑所抵銷，後者較去年減少。

Gross margin decreased 80 basis points from the prior year. The positive impacts from higher volume were more than offset by unfavorable material costs, unfavorable sales mix and lower profits on tooling sales.

毛利率較去年下降 80 個基點。雖然較高的出貨量帶來正面影響，但不利的材料成本、不利的銷售組合，以及工裝（tooling）銷售利潤較低，抵銷了上述效益。

With respect to material costs, currency can have a major influence on total cost to each of our foreign operations, as has been the case lately, since the underlying commodity prices are typically fixed in US dollars. When the US dollar strengthens, these foreign locations including Modine Europe pay higher prices for materials purchased in the local currency.

就材料成本而言，匯率可能對我們各海外營運據點的總成本造成重大影響，近期即是如此，因為基礎商品價格通常以美元固定計價。當美元走強時，這些海外據點（包括 Modine 歐洲）以當地貨幣購買材料時，將支付更高的材料價格。

I am pleased to report that the German plant consolidation remains on track. We're in the final stages of removing all remaining equipment from our Kirchentellinsfurt facility and are actively marketing the facility for sale.

我很高興報告，德國工廠整併計畫仍按進度推進。我們正處於將 Kirchentellinsfurt 廠區所有剩餘設備移除的最後階段，並正積極推動該廠房的出售。

The building is in a desirable location. We already have strong interest in the property. Operationally, we're focused on optimizing the cost structure of the newly consolidated facility in Pliezhausen including consolidating workforce and normalizing the two labor contracts.

該建築位於理想地段，我們已收到對該不動產的強烈興趣。營運方面，我們聚焦於優化 Pliezhausen 新整併廠的成本結構，包括整併人力並使兩份勞動合約常態化。

Our 2016 market outlook for Europe is improving with a continued demand of premium automotive components where Modine has a strong presence. We expect the automotive market to be flat to up 5%, the commercial vehicle market to be up 3% to 7%, and our off-highway markets to be flat to up 5%.

我們對歐洲 2016 年市場展望正在改善，對高階汽車零組件的需求持續，而 Modine 在該領域具備強勢布局。我們預期汽車市場持平至成長 5%，商用車市場成長 3% 至 7%，非道路市場持平至成長 5%。

Moving to South America on page 8, sales were down 31% or 17% excluding currency impact with decreases in commercial vehicle, off-highway and aftermarket sales. Unfortunately, the economy in Brazil remains weak and continues to impact our customers and us. Gross margin was 14%, down 120 basis points on lower sales volume, partially offset by performance and the favorable impact of restructuring actions taken to date.

翻到第 8 頁的南美洲事業部，銷售額下滑 31%；若排除匯率影響則下滑 17%，主要因商用車、非道路與售後市場銷售下降。不幸的是，巴西經濟仍然疲弱，並持續影響我們的客戶與我們。毛利率為 14%，因銷售量下降而較去年下滑 120 個基點，但部分被營運表現改善以及迄今採取之重整措施所帶來的有利影響所抵銷。

The increase in SG&A was primarily due to a $3.2 million accrual reported in the quarter, related to a legal matter in Brazil. Because this is considered to be a one-time item relating to a prior period, the amount has been excluded from adjusted operating income in the current period.

SG&A 的增加主要是因為本季認列了 320 萬美元的應計費用，與巴西的一項法律事項相關。由於這被視為與前期相關的一次性項目，因此該金額已自本期的調整後營業利益中排除。

Excluding this legal reserve, SG&A was down 16% from the prior year, primarily due to the measures we took to cut costs in the region this year and the impact of currency translation. Adjusted operating income was down $1.1 million, primarily due to the decrease in sales volume. As discussed in previous quarters, we diligently cut cost in South America segment early in fiscal 2015, when volumes began to decline.

排除該法律準備金後，SG&A 較去年同期下降 16%，主要因為我們今年在該地區採取的成本削減措施以及匯率換算的影響。調整後營業利益減少 110 萬美元，主要由於銷售量下滑。如同前幾季所討論，當銷量在 2015 會計年度初開始下滑時，我們即在南美事業部積極削減成本。

In addition, we recently made a decision to combine the management of our North America and South America operations so that they are now functioning as one operating segment. The objective of this change is to streamline our operations, to gain synergies, and improve our cost structure. Given this change in reporting structure, effective for the first quarter of fiscal 2016, we will report the combined North and South American operations externally as the Americas segment.

此外，我們近期決定合併北美與南美營運的管理，使其目前作為單一營運部門運作。此變更的目標是精簡營運、取得綜效並改善成本結構。鑑於此報導架構的變更，自 2016 會計年度第一季起，我們將對外以「美洲事業部」呈報合併後的北美與南美營運。

We believe that the weak Brazilian market conditions will continue into fiscal 2016. Specifically, we expect the commercial vehicle market to be down 20% to 30%, the ag equipment market to be down 20% to 25%.

我們認為巴西市場疲弱的狀況將延續至 2016 會計年度。具體而言，我們預期商用車市場將下滑 20% 至 30%，農業設備市場將下滑 20% 至 25%。

We expect the aftermarket business to remain steady as we expect this market to be flat. With our reduced cost base and our significant market presence, we are in an excellent position to take advantage when the Brazilian economy begins to recover.

我們預期售後市場業務將維持穩定，因為我們預期該市場將持平。憑藉我們降低後的成本基礎以及顯著的市場布局，當巴西經濟開始復甦時，我們具備極佳的條件把握機會。

Turning to page 9, I am pleased to report that our Asia segment reported positive operating income for the quarter and for the full fiscal year. Sales increased 7% in the quarter.

翻到第 9 頁，我很高興報告，我們的亞洲事業部在本季及整個會計年度皆呈現正的營業利益。本季銷售額成長 7%。

In China, we continue to see significant year-over-year increases in sales of oil coolers to automotive customers. This increase was partially offset by a decline in sales to off-highway customers, as the excavator markets in China and Korea remained weak.

在中國，我們持續看到對汽車客戶的油冷卻器銷售額出現顯著的年增幅。此增幅部分被對非公路（off-highway）客戶的銷售下滑所抵銷，因為中國與韓國的挖掘機市場仍然疲弱。

We also saw a year-over-year revenue increase in India, with sales increases in automotive, commercial vehicle and off-highway customers. Gross margin improved 20 basis points to 14.5% from the prior year on higher sales volumes, partially offset by lower profits on tooling sales.

我們也看到印度的營收年增，汽車、商用車及非公路客戶的銷售均有所增加。受較高銷售量帶動，毛利率較去年提升 20 個基點至 14.5%，但部分被模具（tooling）銷售獲利較低所抵銷。

I am very pleased with the performance of the Asia segment this year. They generated an operating profit and positive cash flow for the fiscal year with $81 million in sales. This beats our previous estimate of their breakeven point of $85 million in sales.

我對亞洲事業部今年的表現非常滿意。該事業部在本會計年度以 8,100 萬美元的銷售額創造了營業獲利並產生正向現金流。這優於我們先前對其損益兩平點為 8,500 萬美元銷售額的估計。

We would have reached this point much sooner, had it not been for the downturn of the construction markets in China and Korea. However, the launch of the oil cooler business in China and the growth of our business in India have returned the segment to growth and we expect this trend to continue in fiscal 2016.

若非中國與韓國建築市場下行，我們本可更早達成此目標。然而，中國油冷卻器業務的推出以及我們在印度業務的成長，已使該事業部重回成長軌道，我們預期此趨勢將在 2016 會計年度持續。

Our outlook for the automotive market in China is for continued strength up 5% to 10%. We also expect the commercial vehicle market in India to remain strong with growth similarly up 5% to 10%. The Asia excavator market remained weak, down 15% to 20%.

我們對中國汽車市場的展望為持續強勁，成長 5% 至 10%。我們也預期印度商用車市場將維持強勁，成長幅度同樣約為 5% 至 10%。亞洲挖掘機市場仍然疲弱，下滑 15% 至 20%。

Turning to page 10, sales in our building HVAC segment increased 7% in the quarter on a constant currency basis. This increase was largely driven by continued strength in North America with increases in heating, ventilation and cooling. Our UK data center cooling business was down slightly from the prior year.

翻到第 10 頁，以固定匯率基礎計算，我們建築 HVAC 事業部本季銷售額成長 7%。此增幅主要由北美市場持續強勁所帶動，供暖、通風與冷卻產品均有所增加。我們英國資料中心冷卻業務較去年略為下滑。

The fourth quarter of last year was our last quarter of full production after the fire and included catching up on a backlog of orders. This was offset by higher sales of Barkell, which only had one month of sales in the prior year.

去年第四季是火災後我們最後一季的全面生產，並包含趕工消化積壓訂單。此影響被 Barkell 較高的銷售額所抵銷，因為去年 Barkell 僅有一個月的銷售貢獻。

Gross margin for the segment increased 180 basis points on the higher sales volume during the quarter. In addition, gross margin benefited from insurance recovery related to the fire that included the offset of additional expenses from throughout the fiscal year. SG&A was up slightly, on higher sales.

該事業部毛利率因本季較高的銷售量而提升 180 個基點。此外，毛利率亦受惠於與火災相關的保險理賠回收，其中包含抵銷整個會計年度的額外費用。SG&A 因銷售增加而略有上升。

Our outlook for the building HVAC markets is for continued strength in each of our served markets. We expect the North America heating market to be up 3% to 5%, and both the North America ventilation and UK data center markets to be up 5% to 7%. This year, the building HVAC segment clearly benefited from strong markets in North America and from the investments made to expand our product offerings.

我們對建築 HVAC 市場的展望為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 5%，北美通風市場與英國資料中心市場均將成長 5% 至 7%。今年，建築 HVAC 事業部明顯受惠於北美強勁的市場，以及為擴大產品組合所進行的投資。

During the quarter, we saw significant progress in construction of the new Airedale facility, and we expect to move in later this calendar year. I am very pleased with how this segment has contributed to Modine's results this year and continue to view it as a key source of diversification from our vehicular business.

本季我們在新 Airedale 廠房的建設上看到顯著進展，並預期在本曆年稍晚搬入。我對該事業部今年對 Modine 業績的貢獻感到非常滿意，並持續將其視為相對於我們車用業務的重要多元化來源。

With that, I would 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指引。

Thanks, Tom. Good morning. Please turn to slide 12.

謝謝你，Tom。各位早安。請翻到第 12 張投影片。

Modine's fourth-quarter sales were down 7%, primarily due to the strengthening of the US dollar. As Tom mentioned, sales increased 2% on a constant currency basis.

Modine 第四季銷售額下滑 7%，主要由於美元走強。如 Tom 所提，若以固定匯率基礎計算，銷售額成長 2%。

In the quarter, our gross profit increased $400,000. Excluding an unfavorable exchange rate impact of $4.4 million, gross profit increased $4.8 million, or nearly 8%. I am happy to report a gross margin improvement of 140 basis points, to 17.3%.

本季我們的毛利增加 40 萬美元。若排除 440 萬美元的不利匯率影響，毛利增加 480 萬美元，約成長 8%。我很高興報告毛利率提升 140 個基點至 17.3%。

The gross profit was negatively impacted by the cost of raw material. In total, aluminum increased around 20%, year-over-year. This includes an increase in the spot price along with an increase in the transaction premium.

毛利受到原材料成本的負面影響。整體而言，鋁價年增約 20%。其中包含現貨價格上漲以及交易溢價（transaction premium）上升。

Offsetting that was the benefit of lower warranty expenses in the North America and Europe segments. We also experienced good cost control in other manufacturing overhead areas.

抵銷上述影響的是北美與歐洲事業部較低的保固費用所帶來的效益。我們在其他製造間接費用領域也展現良好的成本控管。

Moving onto SG&A, I have said before that we are closely managing and reducing our costs wherever possible. In total, SG&A cost decreased slightly from the prior year.

接著談 SG&A，我之前提過，我們正盡可能在各處嚴格管理並降低成本。整體而言，SG&A 成本較去年略為下降。

The exchange rate impact was favorable at $3.1 million in the quarter. This was offset by a $3.2 million legal reserve relating to our South America segment.

本季匯率影響帶來 310 萬美元的有利因素。但此效益被與南美事業部相關的 320 萬美元法律準備金所抵銷。

We also reported $1 million of restructuring expenses in the quarter. This was fairly evenly spread among Europe, North America and South America.

本季我們也認列了 100 萬美元的重整費用，且相當平均地分布於歐洲、北美與南美。

In addition, we recorded a $7.8 million goodwill impairment in our South America segment. Each year we perform a global assessment of our goodwill. This year, the assessment led us to fully impair the goodwill related to our acquisition in Brazil.

此外，我們在南美事業部認列了 780 萬美元的商譽減損。每年我們都會對商譽進行全球性評估。今年的評估結果使我們決定將與巴西收購案相關的商譽全數減損。

The impairment was primarily due to the weak economic environment, and a significant increase in the associated discount rate used to do that analysis. This does not diminish our long-term commitment to the markets in Brazil where we have an excellent competitive position. And I am pleased with the cost-cutting measures that our team has taken so far.

該減損主要由疲弱的經濟環境，以及用於該分析的相關折現率大幅上升所致。這並不會削弱我們對巴西市場的長期承諾；我們在當地具備極佳的競爭地位。我也對團隊迄今採取的成本削減措施感到滿意。

Looking at operating income, I would like to point out that Modine's operating income was negatively impacted by approximately $1 million, relating to foreign currency. Q4's adjusted operating income of $17.2 million represents a 27% increase over the prior year.

在檢視營業利益時，我想指出 Modine 的營業利益約受到 100 萬美元的負面影響，與外幣相關。第四季調整後營業利益為 1,720 萬美元，較去年同期增加 27%。

This figure represents adjustments for the restructuring costs along with a legal reserve and goodwill impairment in South America. As usual, we have included reconciliations in our press release and slides.

此數字反映了對重整成本的調整，以及南美的法律準備金與商譽減損。如同往常，我們已在新聞稿與投影片中提供調節表。

When comparing year-over-year income tax, it is important to remember that we came out of our US tax valuation status at the end of last year. We are now recording US tax expense, and this impacted our tax provision in the fourth quarter by more than $4 million. Also, given our current mix of earnings, primarily in the various tax jurisdictions in Europe, you will notice that our income tax provision actually exceeded our pretax earnings.

在比較年對年所得稅時，重要的是要記得我們在去年底已解除美國稅務估值準備（tax valuation）狀態。我們目前開始認列美國所得稅費用，這使第四季的稅費提列增加超過 400 萬美元。此外，鑑於我們目前的獲利組合主要分布於歐洲各稅務管轄區，你會注意到我們的所得稅費用提列實際上超過了稅前盈餘。

And last, adjusted earnings per share of $0.12 was down slightly versus the prior year. Given the increase in operating income, you can see the EPS change was due to the higher income tax expense. The negative impact of higher US taxes on EPS was $0.09 per share.

最後，調整後每股盈餘為 0.12 美元，較去年略為下降。鑑於營業利益增加，您可以看到 EPS 的變動是由於所得稅費用較高所致。美國稅負上升對 EPS 的負面影響為每股 0.09 美元。

Turning to slide 13, I am happy to report that we generated positive free cash flow again this fiscal year. For the full year, our free cash flow was $16 million. This very closely matched our projections.

接著看第 13 頁投影片，我很高興報告本會計年度我們再次產生正的自由現金流。全年自由現金流為 1,600 萬美元，與我們的預測非常接近。

We knew that heading into the year, we would see some builds in working capital to support our plant closures and operations in the UK after the fire. Our capital expenditures of $58 million were up slightly from the prior year, but are still well below the historical levels.

我們在年初就知道，為了支援工廠關閉以及英國火災後的營運，我們的營運資金會有所增加。我們的資本支出為 5,800 萬美元，較去年略增，但仍遠低於歷史水準。

In addition to the free cash flow of $16 million, we generated another $7.6 million of cash inflows from various asset sales. We remain focused on a strong balance sheet and ended the quarter with a net debt to capital ratio of 18%.

除了 1,600 萬美元的自由現金流之外，我們也透過各項資產出售產生了另外 760 萬美元的現金流入。我們仍專注於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 18%。

Now let's turn to our fiscal 2016 full-year guidance on slide 14. As Tom walked you through, we are expecting limited growth in many of our end markets. In particular, we expect continued weakness in Brazil and in the global agricultural and mining markets.

現在讓我們看第 14 頁投影片中我們對 2016 會計年度全年的指引。如同 Tom 帶各位回顧的，我們預期許多終端市場的成長有限。特別是，我們預期巴西以及全球農業與礦業市場將持續疲弱。

We also anticipate significant headwinds on our projections, due to the exchange rate environment. We estimate the exchange rate impact to be approximately $100 million on revenue.

我們也預期匯率環境將對我們的預測造成顯著逆風。我們估計匯率影響對營收約為 1 億美元。

On the positive side, our diversification strategy in Asia is working. And we expect to see continued sales improvement as we launch new programs in China and India. Our building HVAC segment has delivered strong results and we expect those markets to continue to grow.

正面來看，我們在亞洲的多元化策略正在奏效。隨著我們在中國與印度推出新專案，我們預期銷售將持續改善。我們的建築 HVAC 事業部表現強勁，我們預期這些市場將持續成長。

Finally, the Company is benefiting from the restructuring in Germany, McHenry, Illinois, and Brazil. We expect to continue to experience benefits throughout fiscal 2016.

最後，公司正受惠於在德國、伊利諾州麥亨利（McHenry）以及巴西的重整。我們預期在 2016 會計年度期間將持續享有相關效益。

Also, on the restructuring front, our North America segment recently announced plans to close a plant in Washington, Iowa. The work will begin this year and be completed in 2018.

另外，在重整方面，我們北美事業部近期宣布計畫關閉愛荷華州華盛頓（Washington, Iowa）的一座工廠。相關工作將於今年開始，並於 2018 年完成。

Given all of this, our full-year outlook is as follows. Sales flat to down 5% from the prior year. On a constant currency basis, we expect sales to be up 1% to 6%.

綜合以上因素，我們對全年的展望如下：銷售額與去年持平至下滑 5%。以固定匯率計算，我們預期銷售額將成長 1% 至 6%。

Adjusted operating income in the range of $65 million to $70 million. The range is flat to up 7%. And on a constant currency basis, this would equate to adjusted operating income of $68 million to $73 million, which is up 5% to 12%.

調整後營業利益介於 6,500 萬至 7,000 萬美元。該區間與去年持平至成長 7%。以固定匯率計算，則相當於調整後營業利益 6,800 萬至 7,300 萬美元，成長 5% 至 12%。

Adjusted earnings per share of $0.75 to $0.82, up significantly from $0.63 reported this year. From a quarterly run rate perspective, we anticipate the second half will be significantly stronger than the first half, both in terms of the absolute numbers and year-over-year comparables.

調整後每股盈餘為 0.75 至 0.82 美元，顯著高於今年報告的 0.63 美元。從季度運行率角度來看，我們預期下半年將明顯強於上半年，無論是絕對數字或年對年比較皆是如此。

If you recall, we got off to a very strong start last fiscal year including a sizable business interruption insurance recovery. In addition, material prices and foreign exchange rates were much more favorable during the first half of last year. As the new year progresses, we expect sequential revenue growth along with easier comparables.

如果您還記得，上一會計年度我們一開始表現非常強勁，其中包含一筆可觀的營業中斷保險理賠回收。此外，去年上半年原物料價格與外匯匯率也更為有利。隨著新年度推進，我們預期營收將逐季成長，同時比較基期也會更容易。

So to wrap things up, I am very pleased that we are able to report operating income growth in the past fiscal year, given the exchange rate environment we face, and the weaker than expected market conditions. We anticipate the new year will have its share of obstacles. We will continue to adjust and manage to the changing conditions.

總結來說，面對我們所處的匯率環境以及弱於預期的市場狀況，我非常高興我們仍能在過去會計年度報告營業利益成長。我們預期新年度也會有其障礙。我們將持續調整並管理，以因應不斷變化的情勢。

Tom, I will turn it back to you.

Tom，我把時間交還給你。

Thanks, Mick. Our focus at Modine this past year continues to be on positioning the Company for meaningful growth.

謝謝，Mick。過去一年我們在 Modine 的重點仍是讓公司具備實現有意義成長的定位。

Our balance sheet is strong. We have proven we can generate positive operating income and free cash flow at our current level of business.

我們的資產負債表很強健。我們已證明在目前的業務規模下，能夠產生正的營業利益與自由現金流。

We delivered on the earnings guidance provided at the beginning of the fiscal year despite significant currency impacts and an economic downturn in Brazil that was significantly worse than anticipated. Although it is good to be able to weather these storms, we are focused on putting our cash to work in significant ways and assessing investment opportunities that allow us to grow profitably and sustainably while further diversifying our business. We are equally focused on operational efficiency, as we continue to work to improve our cost structure, to remain competitive in the marketplace.

儘管面臨顯著的匯率影響，以及巴西經濟下行程度遠超預期，我們仍達成了會計年度初所提供的獲利指引。雖然能夠挺過這些風暴是好事，但我們更專注於以重要方式運用現金，並評估投資機會，使我們能在進一步多元化業務的同時，以獲利且可持續的方式成長。我們也同樣重視營運效率，持續改善成本結構，以維持市場競爭力。

Our employees are working very hard to ensure we have a market-leading product portfolio and a world-class manufacturing base, both in terms of location and scale. Given this combination, we are in excellent competitive position. The significant amount of new business quoting activity and new business wins at Modine confirms that we're heading in the right direction and have a very bright future.

我們的員工非常努力，確保我們擁有市場領先的產品組合與世界級的製造基地，無論在地點或規模上皆是如此。憑藉這樣的組合，我們具備極佳的競爭地位。Modine 大量的新業務報價活動與新案得標，證實我們正朝正確方向前進，並擁有非常光明的未來。

With that, we will take your questions.

接下來我們開始回答各位的問題。

(Operator Instructions)

（接線員指示）

Mike Shlisky, Global Hunter.

Mike Shlisky，Global Hunter。

Good morning, guys.

各位早安。

Good morning.

早安。

A bunch of questions, but I will keep it brief here. First touching on the Midwest transaction premium, it sounds like that probably was a headwind here in the most recent quarter. But it did fall off pretty dramatically at the end of March. I was wondering when you might start to see that improvement hit your P&L. Will it be this current quarter or possibly we will have wait until the back half of the year there?

我有一堆問題，但我會簡短一點。首先談到中西部交易溢價（Midwest transaction premium），聽起來這在最近一季可能造成了一些逆風。但它在 3 月底大幅回落。我想請問你們何時會開始看到這項改善反映在損益表上？會是在本季，還是可能要等到下半年？

Mike, good question. This is Mick. Yes, good news is we have seen that come back quite a bit from the spike that we saw last year.

Mike，問得好。我是 Mick。是的，好消息是，我們確實看到它已從去年出現的尖峰回落不少。

It will take probably about -- we factored that into our projections and our guidance. But we will start to see the benefit of that later in our Q1 and then continue through. So we should capture most of our fiscal year, the benefit of that.

大概需要——我們已把這點納入我們的預測與指引之中。但我們會在第一季後段開始看到其效益，之後會持續反映。因此在本會計年度中，我們應該能掌握到大部分的效益。

Okay, great. And then moving on to South America. Perhaps I missed it.

好的，很好。接著談南美洲，也許我漏聽了。

But can you just explain about -- is your reserve in the quarter for legal? Can you give us more color as to what was going on there? I might have missed it, sorry.

但你們能否解釋一下——你們本季提列的準備金是法律相關的嗎？能否提供更多背景說明當時發生了什麼？我可能漏掉了，抱歉。

I will take that one. We received notice from Brazil's administrative authority on some alleged antitrust violations by Modine Brazil and a few of its employees, many years ago. Based upon our investigation, we made a decision to establish a $3.2 million reserve at year-end that represents an amount that we may incur to resolve the matter.

這題我來回答。我們收到巴西行政主管機關的通知，指稱多年前 Modine 巴西以及其部分員工涉嫌違反反托拉斯法。根據我們的調查，我們決定在年末提列 320 萬美元的準備金，代表我們為解決此事可能需要承擔的金額。

I appreciate that you have the question and you may have follow-up questions on this. But I hope you understand, given the current status of the investigation, I can't provide additional details at this time.

我理解你提出這個問題，且你可能還會有後續問題。但希望你能理解，鑑於調查目前的狀態，我現在無法提供更多細節。

However, I will note that the allegations are limited in nature, unrelated to any other Modine segment. And I am very comfortable with the effectiveness of our internal controls and training to focus on our behavior around the world.

不過我要補充的是，相關指控範圍有限，且與 Modine 的其他事業部無關。我也對我們內部控制與訓練的有效性非常有信心，確保我們在全球各地的行為合規。

Got it. Got it. Touching on Europe briefly, you had mentioned that you're actively looking to sell the old facility in Germany.

了解。了解。簡單談一下歐洲，你提到你們正積極尋求出售德國的舊廠房。

Could you remind us -- or update us, is there guidance around the -- showing a gain or a loss there in the coming fiscal year? Or is that -- exclude any one-time items on the sale of your facility?

你能否提醒我們——或更新一下——對於下一會計年度是否有指引會反映該出售的收益或損失？或者——你們是否會排除出售廠房的任何一次性項目？

Mike, it is Mick. We haven't included, in our outlook, any -- the sale both in cash projections -- also, we wouldn't include the gain -- or any gain on the sale in there.

Mike，我是 Mick。我們在展望中沒有納入任何——該出售在現金預測上也沒有納入——同時我們也不會把出售的收益——或任何出售收益——納入其中。

So in fact, hopefully we will sell at a gain, we would adjust our earnings frankly for that anyway. So it's not in the numbers we provided to you.

事實上，希望我們能以收益出售；但坦白說，即便有收益，我們也會對盈餘做調整。因此這不包含在我們提供給你的數字裡。

All right. If I could just squeeze in one last one here about North America trucks.

好的。如果可以的話，我想再塞最後一個問題，關於北美卡車。

You mentioned -- in your comments here -- you said that your growth rate may not mirror exactly the market growth rate in fiscal 2016. That is a little bit surprising because I have always heard of -- basically your prowess in almost every single truck out there. So what would be behind the reasons why you might lag the overall market here going forward?

你在評論中提到——你說你們在 2016 會計年度的成長率可能不會完全跟市場成長率一致。這有點令人意外，因為我一直聽說——基本上你們幾乎在每一款卡車上都有很強的能力與滲透率。所以未來你們可能落後整體市場的原因會是什麼？

If you look at our particular mix, Mike, the customer base we have, the share changes that may happen -- that are occurring, we don't think will be at the maximum end of that growth projection. We're going to grow. But we don't think we will see maybe the full growth potential because of the particular mix of business.

Mike，如果你看我們特定的組合、我們的客戶基礎，以及可能發生——正在發生的市占變化，我們認為不會落在那個成長預測的最高端。我們會成長。但由於特定的業務組合，我們可能看不到全部的成長潛力。

Okay, great. I will leave it there, guys. Thanks very much.

好的，很棒。我就先到這裡，各位。非常感謝。

David Leiker, Robert W. Baird.

David Leiker，Robert W. Baird。

This is Joe Vruwink for David.

我是代替 David 的 Joe Vruwink。

Hello Joe.

你好，Joe。

Two questions on profitability in Europe this quarter. Is it possible to quantify the tooling impact? And then given it wasn't called out as impacting gross margin, can we think about the plant consolidation and the related inefficiencies as being neutral, let's say, to profitability in the quarter?

本季歐洲獲利能力有兩個問題。是否可以量化模具（tooling）的影響？另外，既然沒有特別指出其影響毛利率，我們是否可以把工廠整併及相關低效率視為本季對獲利能力大致中性？

Joe, it is Mick. Tooling -- I will see if I can grab the number while we are on. But tooling wasn't the major driver in the gross margin in the quarter.

Joe，我是 Mick。模具——我看看能不能在通話中把數字找出來。但模具並不是本季毛利率的主要驅動因素。

The largest driver, frankly, was the material cost. We had a double hit between the transaction premium that we talked about, and it really peaked there in the fourth quarter, combined with the exchange rate impact and the fact that Modine Europe metals are indexed and priced off the US dollar.

坦白說，最大的驅動因素是材料成本。我們受到雙重打擊：一是我們提到的交易溢價，而且在第四季達到高峰；再加上匯率影響，以及 Modine 歐洲的金屬是以美元指數化並以美元定價。

So there is about a $2 million to $3 million materials impact in the quarter in Europe. That was the biggest impact.

因此，本季歐洲材料面影響約為 200 萬到 300 萬美元。這是最大的影響。

I will let Tom add any thoughts on the consolidation. Clearly the complexity of that -- the move from Kirchentellinsfurt to Pliezhausen and managing through that with the origami line and the dual workforces, it was very complicated in the quarter as well.

我讓 Tom 補充對整併的看法。很明顯，那個過程的複雜度——從 Kirchentellinsfurt 搬到 Pliezhausen，並在此期間管理折紙（origami）產線與雙重人力配置——本季也非常複雜。

Clearly, as Mick said, this ended our major restructuring movement actions and relocation of workforce and equipment. So with that behind us, we feel that we are going to be moving forward in a much stronger position.

如 Mick 所說，這也結束了我們主要的重整行動與人力、設備的搬遷。因此在這些都告一段落後，我們覺得將能以更強的態勢向前推進。

There was some impact with that. But clearly not as much as the materials impacted that Mick mentioned.

這方面確實有一些影響。但顯然沒有 Mick 提到的材料影響那麼大。

It sounds like -- on a sequential basis, maybe additional improvement as we work in the next year. Obviously on a year-over-year basis, just given the index -- saying that is still going to be a headwind. So from a transactional standpoint, does that sound fair?

聽起來——以季對季來看，隨著我們在明年持續推進，可能還會有進一步改善。當然，以年對年來看，考量指數化——你是說那仍會是逆風。所以從交易面（transactional）的角度來看，這樣理解合理嗎？

Yes. We would expect improvement ongoing in our operations, Joe -- with the materials piece. It will take a while to work through, including the FX, is frankly out of our control. We don't have commercial agreements that will allow us to adjust for changes in exchange on materials.

是的。我們預期營運會持續改善，Joe——至於材料那一塊，包含外匯在內，確實需要一些時間才能消化；而匯率坦白說不在我們控制範圍內。我們沒有商業協議能讓我們針對材料的匯率變動進行調整。

Okay. Given it is the end of the fiscal year, can you maybe provide an update on your bookings during this past fiscal year? And obviously, given the end market forecast that most of the organic growth -- or really all of the organic growth is coming from new awards or the backlog. So maybe, if you look over the three-year horizon, what type of growth you would expect to come from your new business backlog.

好的。既然是財年結束，你能否更新一下過去這個財年的接單（bookings）狀況？另外，考量終端市場預測，大部分的有機成長——或其實全部的有機成長——都來自新案得標或在手訂單（backlog）。所以也許從三年期的角度，你們預期新業務在手訂單能帶來什麼樣的成長？

As we do each year -- we go through our long-range planning cycle, Joe, I am happy to report we still have a really solid three-year backlog. About $200 million, consistent with prior years.

如同我們每年都會做的——我們會進行長期規劃循環，Joe。我很高興回報，我們仍有非常扎實的三年期在手訂單，約 2 億美元，與往年一致。

And as you know, frankly, the challenge we have had each year is just trying to analyze the impact of economic changes, whether that is Brazil or in Asia or in the off-highway markets with anything getting delayed or pushed out. But, the actual order intake and the solid book of new business and launches is intact. And we feel really good about that over the next few years.

而如你所知，坦白說，我們每年的挑戰在於分析經濟變化的影響，不論是巴西、亞洲，或是非公路（off-highway）市場是否有任何延遲或遞延。但實際的訂單承接、新業務的扎實訂單簿以及量產導入（launches）都仍然完好。我們對未來幾年感到非常有信心。

I will add to that, Joe. At a macro level, the megatrends on things that are driving fuel efficiency, CO2 emissions we are very well positioned for and very pleased as I mentioned with the product portfolio and the work the teams have done to get the products right.

我補充一下，Joe。從宏觀層面來看，推動燃油效率、CO2 排放的那些大趨勢，我們的布局非常到位；也如我提到的，我們對產品組合以及團隊為把產品做到位所做的工作感到非常滿意。

We're seeing just a lot of activity with engagement in quoting and, again, the win rates as Mick said, we are very pleased with. And really expanding these opportunities that are developing on the next level of efficiency requirements in vehicles and also in our stationery business with building HVAC in our coils business.

我們看到大量的報價互動與參與度；同樣地，如 Mick 所說，我們對得標率非常滿意。並且在車輛下一階段效率要求的機會上持續擴大，同時也在我們的固定式（stationary）業務——建築 HVAC 的盤管（coils）業務——擴展這些正在形成的機會。

Okay. That is certainly a very good number.

好的。那確實是一個非常好的數字。

My last question -- when you see thermal assets in the space -- there was a big transaction earlier this year, going for close to 10 times EBITDA. How does that influence strategically how you view your business?

我最後一個問題——當你看到這個領域的熱管理資產時——今年稍早有一筆大型交易，估值接近 EBITDA 的 10 倍。這在策略上如何影響你們看待自身業務的方式？

And does it make things much more difficult from an M&A standpoint for you? Are you still considering assets that are out there? Maybe any update there?

另外，這是否讓你們在併購（M&A）方面變得更困難？你們是否仍在評估市場上的資產？這方面有沒有任何更新？

Joe, it is Mick. We said before and we will continue to say it, we are actively out in the market looking for strategic ways for us to expand our market and our product portfolio.

Joe，我是 Mick。我們之前說過，未來也會持續這麼說：我們正積極在市場上尋找策略性方式，來擴大我們的市場與產品組合。

We know -- and frankly we have known this for a while, as you do, that multiples can be very high. I think the good news for Modine is, anything we have looked at and we are looking at, is going to be highly strategic. So the way we will be able to generate a high ROI in that type investment, will only be in the case where we see it as highly core to us and highly synergistic.

我們知道——坦白說我們也早就知道——如你所知，估值倍數可能非常高。我認為對 Modine 來說的好消息是，我們看過以及正在看的任何標的，都會是高度策略性的。因此，在那類投資中我們能夠創造高投資報酬率（ROI）的方式，只會是在我們認為它對我們高度核心、且高度具協同效益的情況下。

I think it is really good news that the world of thermal is really in demand. And everybody is seeing the trends and the need for Modine type products. So on the positive side, despite that driving multiple is up, I think that is good for our future business.

我認為熱管理這個領域在全球需求很旺，這其實是非常好的消息。大家都看到了趨勢，也看到了對 Modine 類型產品的需求。所以正面來看，儘管這推升了估值倍數，我認為這對我們未來的業務是好事。

I will add to that, Joe. We have added some significant resource to our business development focus, with dedicated individuals that are not just looking for direct acquisition opportunities but relationships and business partners. We may be expanding in that success in the sport utility business, electric vehicle business and also through some tier ones on supporting some of the needs on these new engine developments that are coming.

我也補充一下，Joe。我們在業務開發重點上增加了相當多的資源，配置了專責人員，不僅尋找直接的收購機會，也在尋找關係與業務夥伴。我們可能會在運動休旅（SUV）業務、電動車業務上擴大成功，也會透過一些一階供應商（tier ones），支援即將到來的新引擎開發需求。

So, we're looking at all levels of business -- not just the straight up acquisition by itself. So it is pretty exciting for us right now. I think we have the right focus on it.

所以，我們在各個層面都在看——不只是單純的收購本身。對我們來說現在相當令人振奮。我認為我們在這方面的聚焦是正確的。

Okay, great. Just need all thermal assets to trade at 10, and you guys will be in good shape.

好的，很棒。只要所有熱管理資產都以 10 倍交易，你們的狀況就會很好。

We agree.

我們同意。

We like that theory.

我們喜歡這個理論。

All right. I will leave it there. Thank you.

好吧。我就先到這裡。謝謝。

At this time, I am showing no further questions. I would like to turn the call back over to Kathy Powers for any closing remarks.

此時，我這邊顯示沒有其他問題。我想把電話交回給 Kathy Powers，請她做任何結語。

Thank you. This concludes today's call.

謝謝。今天的電話會議到此結束。

Thank you for joining us this morning and thank you for your interest in Modine. Goodbye.

感謝各位今天早上加入我們，也感謝各位對 Modine 的關注。再見。

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a great day.

各位女士、先生，感謝參與今天的會議。今天的議程到此結束。各位可以斷線。祝大家有美好的一天。