Modine Manufacturing Company (MOD) 2016 Q1 法說會逐字稿

Good morning, ladies and gentlemen and welcome to Modine Manufacturing Company's first quarter fiscal 2016 conference call. At this time, all participants are in a listen only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions). As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Ms. Kathy Powers, VP, Treasurer, and Investor Relations. Thank you.

各位女士、各位先生，早安，歡迎參加 Modine Manufacturing Company 2016 會計年度第一季電話法說會。此刻，所有與會者皆處於僅收聽模式。稍後我們將進行問答環節，屆時將提供相關指示。（接線員指示）提醒各位，本次電話會議將被錄音。現在我想將會議交給本次主持人——Kathy Powers 女士，副總裁、財務主管（Treasurer）暨投資人關係主管。謝謝。

Thank you. And thank you for joining us today for Modine's first quarter fiscal 2016 earnings call. With me today is Modine's President and CEO, Tom Burke, and Mick Lucareli our Vice President Finance and Chief Financial Officer. We'll be using slides with today's presentation. Those links are available through both the web cast link, as well as the PDF file posted on the investors relations section of our Company's website, Modine.com. Also, should you need to exit the call prior to its conclusion, a replay will be available through the website beginning approximately 2 hours after the call concludes. On slide two is an outline for today's call.

謝謝。也感謝各位今天加入我們參加 Modine 2016 會計年度第一季財報電話會議。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。我們將使用今天簡報的投影片。相關連結可透過網路直播連結取得，也可在本公司網站 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，網站上將提供重播。投影片第二頁為今日會議大綱。

Tom and Mick will provide comments on our first quarter results and confirm our revenue and earnings guidance for fiscal 2016. At the end of the call, there will be a question and answer session. On slide three 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 in our Company's filings with the Securities and Exchange Commission.

Tom 與 Mick 將就我們第一季業績發表評論，並確認 2016 會計年度的營收與獲利指引。會議最後將進行問答。投影片第三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，相關內容如同今日新聞稿以及本公司向美國證券交易委員會（SEC）提交之文件所述。

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

接下來，我很高興將會議交給 Tom Burke。

Thank you, Kathy, and good morning, everyone. This morning we reported our first quarter results. Largely due to foreign currency, sales were down 12% as compared to the first quarter of fiscal 2015. Excluding this currency impact, sales were only down 2%. On a constant currency basis sales increased in our Europe and building HVAC segment and decreased in the Americas and Asia segments.

謝謝你，Kathy，各位早安。今天早上我們公布了第一季業績。主要受外匯影響，銷售額較 2015 會計年度第一季下滑 12%。若排除匯率影響，銷售額僅下滑 2%。以固定匯率（constant currency）計算，歐洲與建築 HVAC 事業的銷售成長，而美洲與亞洲事業的銷售下滑。

We expect foreign currency will negatively affect our sales comparisons for the first three quarters of this fiscal year. Adjusted operating income of $14.2 million was down $10.7 million from the prior year. This was due to unfavorable currency conditions, including the impact of material costs in Europe and Brazil, and business interruption and insurance recoveries in the prior year.

我們預期外匯將在本會計年度前三季對銷售比較造成負面影響。調整後營業利益為 1,420 萬美元，較去年同期減少 1,070 萬美元。主因是不利的匯率環境，包括歐洲與巴西的材料成本影響，以及去年同期的營運中斷與保險理賠回收等因素。

As a result, we reported adjusted earnings per share of $0.14 compared to $0.30 in the prior year. As we mentioned when providing our initial fiscal 2016 guidance last quarter, from a quarterly run rate perspective, we anticipate that the second half of fiscal 2016 will be significantly stronger than the first half, both in terms of absolute earnings and year-over-year comparables. I'm pleased to report that our quote activity remained high in the court quarter, resulting in significant business wins.

因此，我們公布的調整後每股盈餘為 0.14 美元，去年同期為 0.30 美元。正如我們在上季提供 2016 會計年度初始指引時所提到的，從季度運行率（run rate）的角度來看，我們預期 2016 會計年度下半年將明顯強於上半年，無論是絕對獲利水準或年對年比較。我很高興報告，本季報價活動仍維持高檔，並帶來多項重要的新業務得標。

We continue to make progress in our manufacturing footprint in both North America and Europe, and we also continue to focus on our growth strategy.

我們持續推進北美與歐洲的製造據點布局（manufacturing footprint），同時也持續聚焦於成長策略。

I'll give you updates on these topics as I go through the segment results. Mick will go through the consolidated results in greater detail but first, now I'd like to review the segment performance and update our end market expectations for fiscal 2016. Turning to page six, as I mentioned last quarter, we combined the management of our North and South America operations so they now function as one operating segment.

在我說明各事業部門業績時，將就上述主題提供最新進展。Mick 將更詳細說明合併財務結果；但在此之前，我想先回顧各事業部門表現，並更新我們對 2016 會計年度終端市場的預期。請翻到第六頁。如同我上季提到的，我們已將北美與南美營運的管理整合，使其目前作為單一營運事業部門運作。

We're still in the early stages of this change, but the combined team is highly engaged and there is strong alignment among the functional areas. We're exploring opportunities for sharing productive resources that will lead to future efficiencies. Given this change in management structure, we have combined the reporting of these segments into one Americas segment. Sales for the Americas segment decreased 7% on a constant currency basis with lower sales in both North America and Brazil.

我們仍處於此變革的初期階段，但整合後的團隊投入度很高，各職能領域之間也高度一致。我們正在探索共享生產資源的機會，以帶來未來的效率提升。基於此管理架構的改變，我們已將這些事業的揭露合併為單一「美洲」事業部。美洲事業部以固定匯率計算的銷售額下滑 7%，北美與巴西的銷售皆下降。

Sales in Brazil were down 12% on a constant currency basis with decreases to both vehicular OE and after market customer. The Brazilian economy has not improved and actually, the markets have continued to decline. We're seeing significantly lower volumes in the off highway and commercial vehicle markets, but are seeing lesser declines in the after market.

巴西以固定匯率計算的銷售額下滑 12%，車用原廠（OE）與售後市場（aftermarket）客戶皆呈現下滑。巴西經濟未見改善，事實上市場仍持續走弱。我們在非公路（off-highway）與商用車市場看到顯著較低的出貨量，但售後市場的下滑幅度相對較小。

As a result we're taking further restructuring actions as we identify synergy's between our North and South America businesses.

因此，隨著我們辨識北美與南美業務之間的協同效益（synergies），我們正採取進一步的重整（restructuring）行動。

We're implementing further head count reductions in Brazil and will transition to a 4-day workweek schedule in September.

我們將在巴西進一步實施人力精簡，並將於 9 月轉為每週 4 天工作制。

We expect to see the savings from these actions, cost reduction efforts, in the second half of year. On the positive side, we continue to quote and be awarded new business in Brazil.

我們預期這些行動與成本降低措施所帶來的節省，將在下半年逐步顯現。正面來看，我們在巴西仍持續報價並獲得新業務。

We recently were rewarded a cooling package on a combine program and believe the new emissions regulations will give us new opportunities in the Brazil construction market. We have a very strong market position in Brazil and are successfully defending this position while addressing our cost structure to ensure we remain profitable through the recession. In North America sales were down 6%, of lower sales to off highway and commercial vehicle customers partially offset by higher sales to automotive customers.

我們近期在一項聯合收割機（combine）專案中獲得一套冷卻系統（cooling package）訂單，並相信新的排放法規將為我們在巴西建築市場帶來新機會。我們在巴西擁有非常強的市場地位，並在因應成本結構的同時成功捍衛此一地位，以確保在景氣衰退期間仍能維持獲利。在北美，銷售額下滑 6%，主要因非公路與商用車客戶銷售下降，但部分被汽車客戶銷售成長所抵銷。

Despite the strength in the North America commercial vehicle market, we experienced limited benefit in the quarter due to lower service sales and a shifting market shares among the North America truck customers. Our off highway sales were down due to continued weakness in agriculture equipment and mining sectors. We have strong porting activity in North America and are seeing the positive effects of our ongoing cost reduction initiatives.

儘管北美商用車市場表現強勁，我們在本季受惠有限，原因在於服務（service）銷售較低，以及北美卡車客戶之間的市占率變動。我們的非公路銷售下滑，係因農業設備與礦業領域持續疲弱。我們在北美的報價活動依然強勁，並已看到持續推動成本降低措施所帶來的正面效果。

As a result, we're winning significant amount of new business particularly in the off highway programs. These wins include two (inaudible) programs in the light construction market, an agricultural module program, and a new industrial gen-set program.

因此，我們贏得了大量新業務，尤其是在非公路專案方面。這些得標包括輕型建築市場的兩個（聽不清）專案、一項農業模組（module）專案，以及一項新的工業用發電機組（gen-set）專案。

Our McHenry plant is now closed and we will begin to see those savings in the current fiscal year. Additionally, we're negotiating with the union on the effects portion of the closure of the Washington highway facility.

我們的 McHenry 工廠現已關閉，我們將在本會計年度開始看到相關節省。此外，我們正與工會就華盛頓非公路（Washington highway）設施關閉所涉及的福利（benefits）部分影響進行協商。

As we have previously stated, production at these facilities is being moved to other Modine facilities and will reduce in significant cost savings once completed. As part of this transition, we'll be expanding production capacity at our Nuevo Loredo Mexico location.

如同我們先前所述，這些設施的產能正移轉至其他 Modine 廠區，待移轉完成後將帶來顯著的成本節省。作為此移轉的一部分，我們將擴增位於墨西哥 Nuevo Loredo 的生產產能。

This is a critical step for Modine as we continuously focus on lowering our cost structure by leveraging our low cross country footprint. I want to take a minute and talk to you by our coils business, which is reported under the Americas segment.

這是 Modine 的關鍵一步，因為我們持續透過運用低成本國家（low cost country）的據點布局來降低成本結構。我想花一點時間談談我們的盤管（coils）業務，該業務歸類於美洲事業部。

We manufacture coil along side the heat exchangers used by our vehicle customers, but these products are primarily used in the HVAC applications. In addition to providing custom designed heat exchangers for the residential, industrial, and commercial HVAC markets, we also use these coils in our own HVAC products providing some of the vertical integration advantage. This is a relatively small business for us today, but we believe there's great growth opportunities for us in this area. Earlier this month, we announced a significant business award with a major North America appliance manufacturer. This is an exciting award as it demonstrated the potential growth opportunity and also highlights the role this business can play in our goal to further diversify our business. We plan to expand our presence in this market so it becomes a bigger portion of our business overall.

我們在為車輛客戶生產所用的熱交換器（heat exchangers）旁，同時製造盤管，但這些產品主要用於 HVAC 應用。除了為住宅、工業與商用 HVAC 市場提供客製化設計的熱交換器之外，我們也在自有 HVAC 產品中使用這些盤管，因而具備部分垂直整合的優勢。就目前而言，這對我們仍是相對較小的業務，但我們相信此領域存在很大的成長機會。本月稍早，我們宣布獲得一家北美大型家電製造商的重要訂單。這是一項令人振奮的得標，因為它展現了潛在的成長機會，也凸顯此業務在我們進一步分散業務組合目標中可扮演的角色。我們計畫擴大在此市場的布局，使其在整體業務中的占比提升。

This would will be a critical focus area for our acquisition strategy. Adjusted operating income for the Americas segment was down $4.4 million primarily due to lower sales volume and higher material costs in Brazil. As I mentioned last quarter, underlying commodity prices are typically fixed in US dollars and when the US dollar strengthens, we pay higher prices for materials we purchased in local currency.

這將是我們併購策略的一個關鍵聚焦領域。美洲事業部的調整後營業利益減少 440 萬美元，主要因銷售量下降以及巴西材料成本上升。正如我上季提到的，基礎商品價格通常以美元固定；當美元走強時，我們以當地貨幣採購材料時，實際支付的材料成本會更高。

We estimated this impact on year-over-year results in the Americas region to be approximately $1 million in the quarter. Our outlook for fiscal 2016 North America end market is the same as previously reported.

我們估計此影響對美洲地區年對年業績的影響，在本季度約為100萬美元。我們對2016會計年度北美終端市場的展望與先前報告相同。

We expect continued strength in heavy duty trucks to be offset by significant weakness with agriculture equipment in certain portions of the construction market. Particularly heavy construction in mining where we have a concentration. We believe that the weak Brazilian market conditions will continue in fiscal 2016 and have lowered our market expectations for this year. Our expectation for the commercial vehicle market will be down 20% to 25%. Please turn to page seven.

我們預期重型卡車的持續強勁，將被農業設備以及建築市場某些領域的顯著疲弱所抵銷，尤其是我們較為集中的採礦重型建築。我們認為巴西市場疲弱的狀況將延續至2016會計年度，因此下調了我們今年的市場預期。我們對商用車市場的預期將下滑20%至25%。請翻到第七頁。

Sales for our Europe segment increased 2% in the first quarter excluding currency impacts. In US dollar terms, sales decreased 17% in the quarter driven by the impact of a stronger US dollar versus the Euro. Sales of automotive customers were up 9% driven by strong oil cooler and condensers sales. Sales to commercial vehicle customers were up 10% driven by radiators and EGR's. These increases were partially offset by lower off highway sales which were down 28% from the prior year. Gross margin decreased 250 basis points from the prior year. The positive impacts from higher volumes were more than offset by unfavorable material costs including the negative currency impact that I just mentioned.

我們歐洲事業部第一季銷售額（排除匯率影響）成長2%。以美元計，受美元兌歐元走強影響，本季銷售額下滑17%。汽車客戶銷售成長9%，主要受油冷卻器與冷凝器銷售強勁帶動。商用車客戶銷售成長10%，主要由散熱器與EGR產品帶動。上述成長部分被非公路（off-highway）銷售下滑所抵銷，後者較去年同期下降28%。毛利率較去年同期下降250個基點。較高銷量帶來的正面影響，已被不利的材料成本（包含我剛提到的匯率負面影響）所抵銷。

We estimate this impact in our year-over-year earnings for Europe to be approximately $3 million in the quarter. Significant market demand for engine products in Europe is challenging our capacity levels, which is putting pressure on certain production facilities. This pressure has driven increased cost for ship premiums and expedited freight. We're adding additional capacity to address this positive yet challenging opportunity.

我們估計此影響對歐洲年對年獲利的影響，在本季度約為300萬美元。歐洲對引擎產品的顯著市場需求正挑戰我們的產能水準，並對部分生產設施造成壓力。此壓力導致船運加急費用與急件運輸成本增加。我們正在增加額外產能，以因應這項正面但具挑戰性的機會。

We've made significant progress with our European manufacturing footprint, including the recent closure of a plant in Germany. However, we are not yet satisfied with our performance on our power trained cooling products for the commercial vehicle market. For these reasons, we have made the decision to expand our low cost country manufacturing capacity in Eastern Europe. It's very important that we have the ability to quote competitively to grow our market share with the cost structure that we get the returns that meet our, and our shareholders, expectations.

我們在歐洲製造版圖方面已取得重大進展，包括近期關閉德國的一座工廠。然而，對於商用車市場的動力系統冷卻產品（power train cooling products），我們對目前的表現仍不滿意。基於這些原因，我們已決定擴增東歐低成本國家的製造產能。非常重要的是，我們必須具備具競爭力的報價能力，以在成本結構可支撐的情況下提升市占率，並取得符合我們及股東期待的報酬。

I'll provide quarterly updates as we define our strategy for the future state of our European manufacturing footprint. Our 2016 market outlook for Europe is improving with continued demand for premium automotive components where Modine Europe as a strong presence. Please turn to page eight.

在我們界定歐洲製造版圖未來狀態的策略過程中，我將提供每季更新。我們對2016年歐洲市場的展望正在改善，主要因高階汽車零組件需求持續，而Modine Europe在此領域具有強勢布局。請翻到第八頁。

Sales for our Asia segment were down 3% compared to the prior year on a constant currency basis. Sales to highway customers were down more than 30% as a slowing China economy continues to impact the infrastructure investment and has had a direct impact on excavator sales in China and Korea. This was partially offset by higher sales to automotive customers which more than tripled during the quarter. This launch activity for automotive coolers continues to ramp. We expect to produce double the number of automotive coolers this year as compared to last for a total to have 1.5 million pieces produced.

我們亞洲事業部銷售額以固定匯率基礎較去年同期下滑3%。公路（highway）客戶銷售下滑超過30%，因中國經濟放緩持續影響基礎建設投資，並直接衝擊中國與韓國的挖掘機銷售。部分下滑被汽車客戶較高銷售所抵銷，汽車客戶銷售在本季成長超過三倍。汽車冷卻器的導入（launch）活動持續升溫。我們預期今年汽車冷卻器產量將較去年增加一倍，總產量達150萬件。

At maturity, with we expect to be producing more than 4 million oil coolers a year.

在達到成熟期時，我們預期每年將生產超過400萬個油冷卻器。

We continue to see year-over-year revenue increases in India with sales increases to automotive, commercial vehicle and off highway customers as our strong market presence is benefiting from the strengthening India economy.

我們持續看到印度年對年營收成長；隨著印度經濟走強，我們強勁的市場布局帶動對汽車、商用車與非公路客戶的銷售增加。

Our outlook for the automotive market in China and for the commercial vehicle market is (inaudible) for continued strength, however, we expect the overall Asia excavator market to remain weak, down 20%. Turn to page nine. Our building HVAC segment had a very good quarter.

我們對中國汽車市場以及商用車市場的展望是（聽不清）持續強勁；然而，我們預期亞洲整體挖掘機市場仍將疲弱，下滑20%。請翻到第九頁。我們的建築HVAC事業部本季表現非常好。

The segment sales increased 6% in the quarter on a constant currency basis. This increase was largely driven by higher sales of cooling products to the school market in North America, along with higher North America heating and ventilation sales. Our UK business was roughly flat on a constant currency basis, but our order intake during the quarter was strong. Gross margin for this segment increased 340 basis points on higher sales volumes during the quarter with improvements in both North America and the UK.

該事業部本季銷售額以固定匯率基礎成長6%。此成長主要由北美學校市場冷卻產品銷售增加所帶動，並伴隨北美供暖與通風產品銷售提升。我們英國業務以固定匯率基礎大致持平，但本季接單量強勁。該事業部毛利率因本季銷售量增加而提升340個基點，北美與英國皆有改善。

The increase in SG&A related to the business interruption insurance recoveries in the prior year, excluding this, SG&A was flat and operating income would have been up $1.5 million over the prior year. Our outlook for the building HVAC markets is continued strength in each of our served markets. With that, I'd like to turn it over to Mick for an overview of our consolidated financial results and guidance.

SG&A的增加與去年認列的營運中斷保險理賠回收有關；若排除此因素，SG&A與去年持平，營業利益將較去年增加150萬美元。我們對建築HVAC市場的展望為：我們所服務的各個市場將持續走強。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, and good morning everybody. Please turn to slide 11. As anticipated, we experienced significant market and foreign exchange head winds, as most of you know, more than half of Modine's sales are generated outside of the United States. In addition, last year's strong start made year over year comparable's quite difficult. After analyzing the multiple currency impacts, we are pleased with the underlying operating performance.

謝謝你，Tom，各位早安。請翻到第11張投影片。如同預期，我們遭遇顯著的市場與外匯逆風；各位都知道，Modine超過一半的銷售額來自美國以外。此外，去年強勁的開局也使年對年可比性變得相當困難。在分析多種貨幣影響後，我們對基本的營運表現感到滿意。

As Tom mentioned, sales decreased 2% on a constant currency basis, excluding the unfavorable exchange rate impact of $40 million.

如Tom所提，若以固定匯率基礎計算，銷售額下降2%，並排除不利匯率影響4,000萬美元。

We expect currency to be a significant headwind through the first three quarters of the fiscal year, with better comparisons in Q4. On a constant currency basis improved sales in Europe and building HVAC were more than offset by decreased in the Americas and Asia. In the quarter, gross profit decreased $10.7 million, we estimate that approximately $9 million of the decrease relates to the change in foreign exchange rates. First, $4.7 million relates to an unfavorable exchange rate impact on the translation of our foreign earnings. In addition to the translation impact, the stronger US dollar negatively impacted the price we paid for commodities in Europe and Brazil.

我們預期匯率在本會計年度前三季將是顯著逆風，而第四季比較基期將較有利。以固定匯率基礎來看，歐洲與建築HVAC的銷售改善，已被美洲與亞洲的下滑所抵銷。本季毛利減少1,070萬美元；我們估計其中約900萬美元的減少與外匯匯率變動有關。首先，470萬美元與外匯不利影響有關，係因換算我們海外獲利所致。除換算影響外，美元走強也對我們在歐洲與巴西支付的商品原物料價格造成負面影響。

This resulted in approximately $4 million of higher material costs. Moving on to SG&A. Costs were flat with the prior year. The exchange rate impact was favorable, about $3.6 million, this was partially offset by the absence of a $2.6 million recovery from business interruption insurance recognized during the first quarter of fiscal 2015. As a reminder, this resulted in a reduction to our SG&A last year and relates to loss profits due to the fire in the UK.

這導致材料成本約增加400萬美元。接著談SG&A：成本與去年持平。匯率影響為有利，約360萬美元，但部分被去年2015會計年度第一季認列的260萬美元營運中斷保險理賠回收不再出現所抵銷。提醒各位，該項回收在去年使我們的SG&A降低，並與英國火災造成的利潤損失有關。

We also recorded $2.6 million of restructuring expenses during the quarter. This was primarily due to severance expenses relating to the planned closure of our Washington/Iowa plant, which we announced earlier this year. Q1 suggested operating income of $14.2 million represents a $10.7 million decrease from the prior year. Approximately $8 million of this decrease was due to FX, including the FX on purchased materials and insurance recoveries in the prior year. As Tom highlighted, the balance of the decline, or approximately $3 million, was mostly due to lower volumes particularly in Brazil and in the global off highway markets.

我們本季亦認列260萬美元的重整費用，主要為與今年稍早宣布之華盛頓／愛荷華工廠計畫關閉相關的資遣費用。第一季調整後營業利益為1,420萬美元，較去年同期減少1,070萬美元。其中約800萬美元的減少源自外匯（FX），包含採購材料的外匯影響以及去年保險理賠回收的影響。如Tom所強調，其餘下滑約300萬美元，主要由銷量下降所致，特別是在巴西以及全球非公路市場。

And adjusted earnings per share of $0.14 was down $0.16 from the prior year, including the impact of a higher tax rate this quarter. Turning to slide 12. As anticipated, free cash flow in the quarter was negative and was impacted by the timing of compensation and other benefit related payments. These cash items are customary and typical in our first quarter. In addition, our capital expenditures of $16 million were up from the prior year. As you know, these can be somewhat lumpy from quarter-to-quarter.

調整後每股盈餘為0.14美元，較去年同期下降0.16美元，並包含本季較高稅率的影響。請看第12張投影片。如同預期，本季自由現金流為負，主要受薪酬與其他福利相關付款時點影響。這些現金項目在我們第一季屬於慣例且常見。此外，我們資本支出為1,600萬美元，高於去年同期；各位也知道，資本支出在各季之間可能會有一定波動。

Please note that we expect our full year free cash flow to be positive, and we continue to maintain a strong balance sheet position and ended the quarter with a net debt to capital ratio at 20%. Over the last year, I've been happy to report the growing cash position and borrowing capacity of Modine.

請注意，我們預期全年自由現金流將為正值；我們仍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20%。在過去一年，我很高興向各位報告Modine的現金部位與借款能力持續提升。

I would like to point out that a portion of cash is tied to insurance receipts and will be used as we complete the rebuild of the UK facility. In addition, we have a large portion of our cash held in foreign locations. As Tom mentioned earlier, we are actively looking for opportunities to invest our cash in the business, including potential acquisitions. We believe that reinvesting in the business supports long-term growth and is in the best interest of our shareholders.

我想指出，我們的部分現金與保險理賠款項相關，並將在我們完成英國廠房重建時使用。此外，我們有相當大一部分現金存放於海外地點。如同 Tom 先前提到的，我們正積極尋找將現金投資於業務的機會，包括潛在併購。我們相信將資金再投資於業務可支持長期成長，並符合股東的最佳利益。

However, if we're not successful in finding the right investments, we will consider other uses for the cash and borrowing capacity. Now let's turn to our fiscal 2016 guidance on slide 13. As we look to the remainder of the year, our message remains consistent. We continue to face challenges in many of our end markets, this includes continued weakness in Brazil and in the global agricultural heavy construction and mining markets. We certainly felt the significant head winds due to the exchange rate environment this quarter, and we expect this to continue through our third quarter. We estimated the full year exchange rate impact will be $100 million on the top line.

然而，若我們未能成功找到合適的投資，我們將考慮現金與借款額度的其他用途。現在讓我們看第 13 頁投影片中對 2016 會計年度的指引。展望今年剩餘期間，我們的訊息仍然一致。我們在許多終端市場仍面臨挑戰，包括巴西持續疲弱，以及全球農業、重型建築與礦業市場的疲弱。本季我們確實感受到匯率環境帶來的顯著逆風，且預期此情況將延續至第三季。我們估計全年匯率對營收（top line）的影響將為 1 億美元。

We expect to see continued sales and cost improvement as we move through the year. We have new program launches in each OE segments, some of which Tom mentioned today. We're approaching the heating season in our building HVAC segment, which typically provides higher sales and profitability. In addition, we should see additional benefits from our restructuring actions in Brazil and North America.

隨著年度推進，我們預期銷售與成本改善將持續。我們在各個 OE 事業部都有新專案啟動，其中部分 Tom 今天已提到。我們的建築 HVAC 事業部即將進入供暖季，通常會帶來較高的銷售與獲利。此外，我們也應可看到在巴西與北美所採取重整措施帶來的額外效益。

Lastly, we'll start to recover some of the FX impacts on materials.

最後，我們也將開始回收部分材料端的匯率（FX）影響。

I would like to note that we launched a supply chain project, which we expect to yield significant savings for the Company. Our primary goal is to achieve savings through only (inaudible) of our supply base.

我想補充說明，我們已啟動一項供應鏈專案，預期將為公司帶來可觀的節省。我們的主要目標是僅透過（聽不清）我們的供應商基礎來達成節省。

We are currently in the assessment phase and will begin to move in the execution phase shortly. Given that we purchase $700 million to $800 million of goods and services on an annual basis, we believe there's a significant savings opportunity at Modine.

我們目前正處於評估階段，並將很快進入執行階段。鑑於我們每年採購 7 億至 8 億美元的商品與服務，我們相信 Modine 存在顯著的節省機會。

I will believe able to provide more information about this program next quarter, including timing and financial targets. In addition to these operational improvements, Tom highlighted the focus our team has on strategic acquisitions and I'm excited about this opportunity as well.

我相信我將能在下個季度提供更多關於此計畫的資訊，包括時程與財務目標。除了這些營運改善之外，Tom 也強調我們團隊對策略性併購的專注，我對這個機會同樣感到振奮。

Reviewing our guidance on the top of this slide, we maintain and confirm the outlook for fiscal 2016 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%. Adjusted operating income in the range of $65 million to $70 million. This range is flat to up 7%. On a constant currency basis, this would equate to a 5% to 12% increase, and adjusted earnings per share of $0.75 to $0.82 which is up 19% to 30%. There's one last item I wanted to mention.

回顧本頁上方的指引，我們維持並確認 2016 會計年度展望如下：以固定匯率（constant currency）計，銷售額與前一年持平至下滑 5%；以固定匯率基礎，我們預期銷售將成長 1% 至 6%。調整後營業利益為 6,500 萬至 7,000 萬美元，此區間為持平至成長 7%；以固定匯率計，約相當於成長 5% 至 12%。調整後每股盈餘為 0.75 至 0.82 美元，成長 19% 至 30%。我還有最後一點想提。

We are currently offering certain former employees the option to take a lump sum settlement of their vested pension benefits.

我們目前正向部分離職的前員工提供選擇，讓其以一次性（lump sum）方式結清其已歸屬（vested）的退休金福利。

This project will help us to better control our pension expenses and risks in the future and will not have a cash impact on the Company.

此專案將協助我們在未來更好地控制退休金費用與風險，且不會對公司造成現金影響。

As is typical with this type of program, we expect to reported a non-cash settlement charge when we complete the program. Right now we estimate this charge will be in the $20 million to $30 million range and recorded in the second quarter. To wrap things up, we pointed outed several times that we see a stronger half in earnings.

如同此類計畫的慣例，在我們完成該計畫時，預期將認列一筆非現金的結清費用（settlement charge）。目前我們估計該費用約為 2,000 萬至 3,000 萬美元，並將於第二季入帳。總結來說，我們已多次指出，我們預期下半年獲利將更強。

Similar to prior years, we expect a seasonal slowdown in Q2, but anticipate better year-over-year comparable's, then we expect earnings to accelerated in Q3 and Q4. With that, Tom, I'll turn the call back to you.

與過往年度類似，我們預期第二季將出現季節性放緩，但預期年對年可比性將更佳；接著我們預期第三季與第四季獲利將加速成長。以上，Tom，我把電話交回給你。

Thanks, Mick. There's several challenges impacting our business but we're meeting them head on. At this point we're equally focused on driving growth and aggressively improving our cost structure. As I mentioned, we're increasing our low cost country manufacturing capacity by expanding on our campus in Nuevo Loredo Mexico and by increasing manufacturing capacity in Eastern Europe. Also, Mick mentioned our supply chain optimization initiative where we are aiming to consolidate our supply base to focus on strategic supplier partnerships that will provide the best quality and service at the lowest total cost.

謝謝，Mick。我們的業務正受到多項挑戰影響，但我們正迎面應對。此刻我們同時專注於推動成長，以及積極改善成本結構。如我所提，我們正透過擴建墨西哥 Nuevo Loredo 園區，以及提升東歐製造產能，來增加低成本國家製造能力。此外，Mick 也提到我們的供應鏈最佳化倡議，我們的目標是整併供應商基礎，聚焦於策略性供應商夥伴關係，以在最低總成本下提供最佳品質與服務。

We have significant expectations for this project. We'll be able to share more specifics next quarter. On the growth side, we're particularly focused on opportunities that will provide us with increased market diversification. This includes both organic growth in new markets and strategic acquisitions.

我們對此專案抱持很高的期待。我們將能在下個季度分享更多具體細節。在成長方面，我們特別聚焦於能提升市場多元化的機會，這包括新市場的有機成長以及策略性併購。

I mentioned the potential of our coils business. We are winning more business and focusing on potential investments. We have a substantial acquisition pipeline and are actively evaluating these targets. To reiterate Mick's point, if we're not able to find the right investment in the near future or if we have excess cash after making other investments, then we'll look at alternative uses for our cash. With that, we would like to take your questions.

我提到過我們線圈（coils）業務的潛力。我們正在贏得更多業務並聚焦於潛在投資。我們有相當可觀的併購案源（pipeline），並正積極評估這些標的。再次重申 Mick 的觀點，若我們短期內無法找到合適投資，或在進行其他投資後仍有多餘現金，我們將尋求現金的替代用途。接下來，我們想開始回答各位的問題。

Thank you. (Operator Instructions). Our first question comes from the line of Mike Shlisky with Global Hunter Securities. Your line is open. Please go ahead.

謝謝。（接線員指示）。我們的第一個問題來自 Global Hunter Securities 的 Mike Shlisky。您的線路已開通，請發問。

Good morning, guys. How are you?

各位早安。你們好嗎？

Good morning, Mike.

早安，Mike。

Maybe I'll start out with Europe. Looking at some of the OEMs and the truck space, you're getting rapid order increases here. You mentioned you've got some additional freight and other costs here. You also have, if I'm not mistaken pretty high market share and it's a pretty essential product for compliance with some of the rules over there.

也許我先從歐洲談起。看一些 OEM 與卡車領域，你們這邊的訂單快速增加。你們提到這裡有一些額外運費與其他成本。另外，如果我沒記錯的話，你們在那邊市占率相當高，而且這是符合當地某些法規要求的關鍵產品。

I guess can you pass some of that along to the customer? Secondly, on that question, I can see you are passing I can see you're trying to get more growth in your capacity in Eastern Europe, that's great, but I think these people need their product this quarter and next. You've got these trucks built. Is there anything you can do permanently to keep the cost under control there?

我想問的是，你們能把其中一些成本轉嫁給客戶嗎？第二點，針對這個問題，我看到你們正嘗試在東歐擴充產能以取得更多成長，這很好，但我想這些客戶這一季和下一季就需要產品。卡車都已經在生產了。你們是否能做些永久性的措施，把那邊的成本控制住？

Hello? Hello?

喂？喂？

Ladies and gentlemen, please stands by. Your conference will remain momentarily. All right, Ms. Powers, you're reconnected.

各位女士先生，請稍候。您的電話會議將暫時保持。好的，Powers 女士，您已重新連線。

Thank you.

謝謝。

Mike?

Mike？

Yes, hey, guys, are you there?

是的，嘿，各位，你們在嗎？

I'm sorry, something happened. You were you talking about the added demand and was that truck or auto? That's before we got cutoff.

抱歉，剛剛發生了一些狀況。你剛剛是在談新增需求嗎？是卡車還是汽車？我們剛剛斷線前聽到那裡。

I was thinking about trucks. It's getting to be a more intensive environment there. I wanted to know if there's anyway, given the process, so essential to compliance and your share is growing there, but will you be able to pass along some of those costs to customers. And then secondly, while I did recognize that you are trying to look into low cost country sourcing over in Europe, it sounds like these folks in the customer base needs the product now. Can you make quick changes here to keep the cost under control?

我是在想卡車。那邊的環境變得更緊張。我想知道，鑑於這個流程對合規非常重要，而且你們在那邊的市占正在提升，你們是否能把部分成本轉嫁給客戶。第二點，我確實理解你們正研究在歐洲採用低成本國家採購，但聽起來客戶現在就需要產品。你們能否快速做出改變，以把成本控制住？

Yes, that's obviously what we're doing.

是的，這顯然正是我們在做的事。

The ability to pass on cost is circumstantial depending on what's driving it. If it's a sudden release by the customer that is up, we'll certainly ask for something because we'll have added costs requirements relating to the cost that we'll negotiate with customers to pass on where we can. If it's on our able not to meet schedules that a different ball game and we have to meet up with premium costs and that typically falls back on our shoulders in that case. The biggest issue that we have that I mentioned was on the automotive side with oil coolers where we're having great success with our product and winning new business and realizing that is we're well over stated capacity because of the demand of that product, and that is where we are definitely working with customers everywhere we can because it is a good news problem to have.

能否轉嫁成本要視情況而定，取決於成本上升的驅動因素。如果是客戶突然釋出增加的需求，我們當然會提出要求，因為我們會有額外的成本需求；我們會與客戶協商，在可行之處轉嫁成本。若是因為我們無法達到排程，那就完全不同了，我們必須以加急等溢價成本來追趕，而在那種情況下通常就得由我們自行承擔。我先前提到我們最大的問題是在汽車端的機油冷卻器（oil coolers）：我們的產品非常成功、持續贏得新業務，但也因此需求使我們的產能明顯超出既定水準；在這方面，我們確實正盡可能與客戶合作，因為這算是個好消息帶來的問題。

But it is and exceeding, in some cases, customer estimated volumes. So there we work very closely with customers to work out expedited freight and overtime and the cost of ensuring that. It's a good problem to have and we're moving quickly to add to capacity. We're talking about in months adding to capacity on the oil cooler problem to resolve that issue.

但在某些情況下，實際上已超過客戶預估的需求量。因此我們會與客戶非常密切合作，協調加急運輸、加班，以及確保供應所需的相關成本。這算是個好問題，我們也正迅速擴充產能。我們談的是在幾個月內針對機油冷卻器的問題增加產能，以解決該議題。

Okay, great, great, great. I also wanted to touch on building HVAC. You had mentioned in your slide that you've got some good business happening in schools here in North America. I was wondering if you guys are seeing school budgets open up a little bit better this year or is it gains many market share? Any color on what's going on in the school market, I would appreciate it.

好的，很好、很好、很好。我也想談一下建築 HVAC。你在投影片中提到，你們在北美的學校有一些不錯的業務。我想知道今年你們是否看到學校預算稍微鬆動一些，還是主要是市占率提升？如果能分享一下學校市場的情況，我會很感謝。

The school market is a combination of retrofitting the old schools to close the schools up for new laws and requirements for inside air quality requirements and noise and temperature control and that type of thing. That's where we've strength there. It's retrofitting of old schools and in that case, there are schools around the country, specific areas that are looking to do that and pass the tax increases to improve school upgrades and that stuff. It takes a long process. We work closely with School Boards and the engineers supporting them and we're happy with the business that it's really gaining. For us, we have a leading market share position and that's North America and, again, it's very significant contributor to the building HVAC segment.

學校市場是多種因素的組合：一方面是針對老舊校舍進行改造，以符合新的法規與要求，例如室內空氣品質、噪音、溫度控制等要求。這正是我們的強項所在，也就是老舊校舍的改造。在這種情況下，全國各地有一些特定區域正在推動相關計畫，並透過提高稅收來支持學校升級等改善。這是一個很長的流程。我們與學區董事會（School Boards）以及支援他們的工程師密切合作，我們對業務的實際成長感到滿意。對我們而言，我們在北美擁有領先的市占地位，而且這仍然是建築 HVAC 事業部門非常重要的貢獻來源。

Okay. Going on to the guidance, your outlook for top of the first or second quarter here, I remember last year you had $0.05 of earnings, are you suggesting you might do worse that year than last? I want to get into the timings of the earnings this year more precisely.

好的。接著談到財測，你對第一季或第二季的營收展望，我記得去年你們每股盈餘是 0.05 美元，你是在暗示今年可能會比去年更差嗎？我想更精確地了解今年獲利的時點分布。

Yes, this is Mick, Mike. Thanks for the question. Yes, I think we see a frankly Q2s going to be very similar to Q1 in terms of volume. We're going to see a little higher SG&A kick in in Q2, which happens each year due to the timing of a number of items, including the way we do our global salary and benefit adjustments, but we see the typical college summer slowdown in Europe, the pre heating season, then the acceleration into Q3 and Q4. I wanted to communicate, we knew that Q1 would be a tough comparable in line with what we were expecting.

是的，我是 Mick，Mike。謝謝你的問題。是的，我認為我們看到第二季在出貨量方面坦白說會與第一季非常相近。第二季我們會看到 SG&A（銷售、一般及行政費用）略為上升，這每年都會發生，主要是因為多個項目的時點安排，包括我們進行全球薪資與福利調整的方式。不過我們也會看到歐洲典型的暑期（大學）淡季、供暖季前的階段，接著在第三季與第四季加速。我想傳達的是，我們知道第一季會是一個艱難的可比基期，這與我們原先的預期一致。

Q2 we'll see similar from a volume, slightly higher SG&A, but what we are expecting as we said better comps year-over-year in Q2, which was to your question. We do expect Q2 to be a little bit better than Q2 last year. Then the biggest issue is a lot of our cost savings and launch activities is going to happen in the second half of the year, including that heating season which is significant for our building HVAC. Last year, Q3 for building HVAC was almost 50% of the full year segment results, just to put some context around that for you. I hope that answers your question Mike.

第二季在量的部分會類似，SG&A 略高；但如我們所說，第二季的年對年可比會更好，這也回應你的問題。我們確實預期今年第二季會比去年第二季好一些。接著最大的重點是，我們許多成本節省與新案導入活動將在下半年發生，其中也包含供暖季，這對我們的建築 HVAC 業務非常重要。去年建築 HVAC 的第三季幾乎占了該事業部全年分部業績的 50%，提供你一些背景脈絡。希望這回答了你的問題，Mike。

Yes, sure, thanks. And Mick, while I have you, you had mentioned the deals out there, looking to put cash to work, if you can't you might put it back to shareholders. Would you consider going through the repatriation process or is there enough cash for either SG&A or any kind of buy back or dividend here in the US already?

是的，當然，謝謝。Mick，趁我還在線上，你提到外面有一些交易機會，想把現金拿去運用；如果找不到，你可能會把資金回饋給股東。你們會考慮走資金匯回（repatriation）的流程嗎？還是說在美國這邊已經有足夠現金可用於 SG&A 或任何形式的庫藏股、回購或股利？

Yes. Again, I appreciate the question because we did want to give some color to that. I think one is, when we talk about cash, I wanted to make sure we provide some color around the fact that a portion of cash is about $15 million, plus or minus, tied to the rebuild of our UK facility, so that's timing of insurance money knowing through the Company.

是的。再次感謝這個問題，因為我們確實想補充一些說明。第一點是，當我們談到現金時，我想確保大家了解其中一部分現金約 1,500 萬美元（上下浮動），與我們英國廠房重建相關；這牽涉到保險理賠金流入公司帳上的時點。

Then we have a significant amount of money that sits, the majority of the remaining cash sits in foreign locations.

另外，我們還有相當一部分資金，其中剩餘現金的大多數是放在海外據點。

From an M&A standpoint, that's our preferred, we think long term that's the best for the Company is to reinvest in the business for the long-term. There's lots of opportunities and options we have of funding and acquisitions, so repatriation would not be a concern on that side.

就併購（M&A）而言，那是我們偏好的方向；我們認為長期來看，對公司最好的做法是把資金再投資於業務、著眼長期。我們在資金籌措與收購方面有很多機會與選項，因此在這一端，資金匯回並不是問題。

As Tom mentioned, we also have a balance sheet that is under a level or conservative at the current standpoint which we can use for acquisition support and/or other uses an certainly we feel at the current stock price, Modine is a value and if we don't find an appropriate investment for us to leverage our balance sheet and use the cash appropriately, we'll look at those other alternatives.

如 Tom 所提，我們目前的資產負債表也維持在偏低槓桿或保守的水準，可用於支援收購和／或其他用途；而且我們確實認為以目前股價來看，Modine 具有價值。如果我們找不到適合的投資機會來運用資產負債表並妥善使用現金，我們也會考慮其他替代方案。

Okay. I've got one more to squeeze in here if you don't mind about the mid-west transaction premium. It's been down, it's stayed down. Do you expect to see benefits there to your bottom line in the current quarter and next, depending upon what might develop?

好的。我還有一個問題想再塞進來，如果你們不介意，關於中西部交易溢價（mid-west transaction premium）。它一直在下降，也維持在低檔。你們預期在本季與下一季，視後續發展而定，會對你們的獲利帶來好處嗎？

Yes. Great question. We have a little bit of a lag and for the others on the call, that doubled in the last year. It has recently come back to the normal range. It's now back around $0.10, $0.11 a share. If you think about our run rate, we're still paid a premium year-over-year on that given the lag. Beginning in our Q2, Q3, and Q4, we're talk about a 50% year-over-year decline in our transaction premium, year-over-year comparability and we'll start to capture that reduction in our cost to goods moving into Q2 and fully in Q3 and Q4.

是的。很好的問題。我們這裡有一點滯後效應；也讓電話會議上的其他人知道，這項溢價在去年翻倍。最近它已回到正常區間，目前大約回到每股 0.10、0.11 美元。如果你看我們的運行水準（run rate），由於滯後效應，我們在年對年比較下仍然拿到較高的溢價。從我們的第二季、第三季與第四季開始，我們談的是交易溢價年對年下降約 50%，在年對年可比上；而我們將在進入第二季時開始反映這項下降帶來的銷貨成本降低，並在第三季與第四季完整反映。

Great. Thanks for the time, guys, I'll pass it along.

很好。謝謝你們撥時間，我把問題交給下一位。

Thank you. Our next question comes from the line of David Leiker with Robert W. Baird. Your line is open. Please go ahead.

謝謝。下一個問題來自 Robert W. Baird 的 David Leiker。您的線路已開通，請發言。

Couple of things here. The European capacity issues you're running into there, what's the time line on correcting those? I presume that there's some impact on margins right now given the way you're running the business relative to what it would be with that volume.

有幾點想問。你們在歐洲遇到的產能問題，修正的時間表是什麼？我推測以你們目前的營運方式，相較於如果能承接那樣的量，現在應該對毛利有一些影響。

Great. No, good question, and you're right. We have a couple of things.

很好。不，這是個好問題，你說得對。我們有幾件事在進行。

It's a very global product as you know so we're able to provide some relief to some plants that have capacity in the world. That provides a logistics cost to us that's our responsibility, then the flat portion of adding actual machine capacity is in process, has been kicked off for a couple of months now and that should be resolved in the next three to four months as far as the oil coolers specific demand that we're seeing in Europe, part of the LCOC product line.

如你所知，這是一個非常全球化的產品，因此我們能夠從全球其他仍有產能的工廠提供一些支援，來緩解部分廠區的壓力。這會帶來物流成本，而這部分由我們承擔。接著，增加實際機台產能的那一塊也正在進行中，已經啟動了幾個月；就我們在歐洲看到的機油冷卻器特定需求而言（屬於 LCOC 產品線的一部分），預計在接下來三到四個月內可以解決。

So again, inside of all of that is a lot of discussions and negotiations with customers in some cases where they're above their stated levels for us to capacitize to so we're leveraging all of that and minimizing those costs. In some cases, it's still making an impact on others where we're at stated volumes, so inside of that, we're managing that carefully. The combination of providing products for elsewhere, Modine locations to help meet that need and the added actual machine capacity is in place and should be in the next thee to four months. We should see that really be resolved.

所以再說一次，在這整體之中，我們與客戶有大量討論與協商；在某些情況下，他們的需求高於他們先前對我們所陳述、我們用來規劃產能的水準，因此我們會運用各種方式把成本降到最低。在某些情況下，這仍會對我們造成影響；而在其他情況下，我們是在既定量之內供應。因此在這裡我們會非常謹慎地管理。透過由其他 Modine 據點供貨以滿足需求，以及新增的實際機台產能到位，預計在接下來三到四個月內就能完成，我們應該會看到問題真正獲得解決。

Tom, Dave it's Mick, you might want to comment, too, that the additional portion of the capacity you talked about is about more volume that we're quoting and running, so that's one, two years out.

Tom，我是 Mick，Dave。你可能也想補充一下：你剛提到的另一部分產能增加，更多是針對我們正在報價並準備承接與運行的額外量，所以那會是往後一到兩年的事情。

Right. On top of that, we continue to win new business and this product line and others, okay, in power train cooling, but we need more not only capacity, but plant floor space, this is why we're expanding into Eastern Europe to expand existing capacity that we have now. So that's not today's news, but that will be 18 months from now. It's exciting with those launches coming up in the 2017 calendar year.

沒錯。此外，我們持續在這條產品線以及其他產品線贏得新業務，好嗎，在動力總成冷卻方面；但我們不僅需要更多產能，也需要更多廠房地面空間，這就是為什麼我們要向東歐擴張，以擴充我們目前既有的產能。所以這不是今天的消息，但會是在 18 個月後。隨著 2017 年曆年即將到來的那些量產導入，令人振奮。

Then the strong volume that you're getting above what you had capacitized for and the new wins. Can you talk about the common denominator and why you're winning the new business?

那麼，你們目前取得的強勁出貨量超過了你們原先規劃的產能，以及新拿下的案子。你能談談共同的關鍵因素，以及你們為什麼能贏得新業務嗎？

Yes. I'd go back to, to use our term, building block strategy, the engine oil coolers, call it the LC, product line which is a combination for oil coolers and charged air cooling. It's the same product, that building block where we've got an asset base that we can leverage on a constant basis and have a lot of flexibility giving us ability to quote and win the new business. Especially as we look forward to a future state model of higher scale and lower cost. It's all around this fuel efficiency drive for optimizing power train drive and boosted engine support with (inaudible) charger coolers going on the cars and it's a very encouraging trend.

可以。我會回到——用我們的術語——「積木式策略」（building block strategy）。引擎機油冷卻器，我們稱之為 LC 產品線，它是機油冷卻與增壓進氣冷卻的組合。這是同一個產品、同一個「積木」，我們擁有可持續加以運用的資產基礎，並具備很高的彈性，使我們有能力報價並贏得新業務。特別是當我們展望未來更高規模、更低成本的營運模式時。這一切都圍繞著燃油效率的推動：優化動力總成傳動，以及支援增壓引擎，車上正在導入（聽不清）增壓器冷卻器；這是一個非常令人鼓舞的趨勢。

Okay. So those are, I presume those are gasoline?

好的。所以那些——我猜——是汽油車？

Yes. Gasoline turbos, exactly, then diesel oil coolers as well.

是的。汽油渦輪，沒錯；另外也有柴油機油冷卻器。

Okay.

好的。

It's both engine sources. We're starting to see in North America as well that these devices are being used to heat oil early to help reduce frictional losses in cold starts. It's a lot of content opportunity both in traditional engine cooling, heating lubricant for better fuel efficiency under cool start and the charger impact with smaller displacement reasons for fuel efficiency reasons on the retro engines.

兩種引擎來源都有。我們也開始在北美看到，這些裝置被用來在早期加熱機油，以在冷啟動時降低摩擦損失。無論是在傳統引擎冷卻、在冷啟動時加熱潤滑油以提升燃油效率，或是因燃油效率需求而採用小排量（downsizing）引擎所帶來的增壓器相關需求，內容（單車價值）機會都很大。

Okay. One last item here. In terms of actions you're taking on the cost side in North America and Europe. Sounds like you have some of those cost savings coming to you in the back end of the year. You can quantify what the magnitude of those savings are and how those flow in beyond the current fiscal year?

好的。最後一項。就你們在北美與歐洲採取的成本端措施而言，聽起來你們有一些成本節省會在今年下半年反映出來。你能量化這些節省的規模，以及它們在本財年之後如何延續嗎？

Yes. David, its Mick. I can give you an idea of the total savings and to put it into context of the specific programs that we've done, just keep in mind we have other issues behind here. But from a total savings standpoint, in Europe we're looking at approximately an incremental $3 million this year in savings year-over-year. First year here in McHenry as we're closing that facility and getting ready in the second half of the year to launch that, a lot of that product in Mexico, about $2.5 million of savings, and then incremental savings in Brazil this year, year-over-year about $1 million due to a combination of SG&A and then direct and indirect labor reductions. Those are the major pieces and as we said, most of those are second half of the year.

可以。David，我是 Mick。我可以給你一個總節省額的概念，並把它放到我們所做的具體專案脈絡中；只是請記得，我們背後還有其他議題。但就總節省而言，歐洲今年我們預估年對年約增加 300 萬美元的節省。McHenry 這邊是第一年，我們正在關閉該廠並準備在下半年把許多產品轉到墨西哥量產，約可節省 250 萬美元；另外巴西今年年對年約增加 100 萬美元的節省，來自 SG&A 的組合，以及直接與間接人力的縮減。這些是主要部分；如我們所說，多數會在下半年體現。

Right. And then is there any carryover with incremental savings in fiscal 2017?

了解。那麼在 2017 財年是否還會有任何延續性的增量節省？

Yes. Sorry about that. So right now, the million in Brazil is what we've done to-date. Stay tuned. The teams are working together on the synergy opportunities so I don't have anything to share yet on that side. They're still diving in to how to most efficiently run the combined segments into the one new segment. There's an incremental 2.5, the total savings going to McHenry in the following year in 2017, going to about $7 million, so about $5 million of incremental, that will be the first full year impact of the McHenry and then in Europe, about another $1 million in 2017. So I would say going forward another five to six, plus whatever synergy we would see coming between combining the Brazil and North America operations. Go ahead.

有。抱歉剛剛漏講。就目前而言，巴西的 100 萬美元是我們迄今為止已完成的。後續請持續關注；團隊正在一起推進協同效益的機會，所以我現在還沒有可分享的內容。他們仍在深入研究如何以最高效率運行合併後的各事業，整合成一個新事業部。McHenry 那邊，隔年 2017 的總節省會從 250 萬美元提升到約 700 萬美元，也就是約 500 萬美元的增量，這將是 McHenry 的第一個完整年度效益；歐洲方面，2017 年大約再增加 100 萬美元。所以我會說，往後大概還有 500 萬到 600 萬美元，再加上我們在整合巴西與北美營運之間可能看到的任何協同效益。請繼續。

Nope, nope, continue.

不用、不用，你繼續。

Washington/Iowa, which we just announced this year, there we expect annual savings of $9 million, but that closure won't be completed until 2018.

華盛頓／愛荷華（Washington/Iowa）那個我們今年剛宣布的案子，我們預期每年可節省 900 萬美元，但該關閉作業要到 2018 年才會完成。

Okay. Given where your foot print is today, and where products are and demand is, do you think that with what you know today, obviously, that this gets your footprint with where you need to go or are there other actions still contemplated?

好的。以你們目前的據點布局，以及產品與需求所在來看，你認為以你們今天所掌握的資訊，顯然，這是否已能讓你們的布局達到所需的狀態？還是仍在考慮其他行動？

This gets us a long way down the road David, that's for sure.

這確實讓我們在路上往前推進了很長一段，David，這是肯定的。

Yes, I know.

是的，我知道。

As you follow the OE vehicular world, the demands will continue to stay there and I think you sense from our discussions, whether its footprint, purchasing, and synergy's on the overhead side, we're committed to get there. Specifically on our question. Our remaining high cross country footprint is going to be very reduced over this process.

如果你持續關注 OEM 車輛產業，你會看到需求會持續存在；而且我想你也從我們的討論中感受到，無論是據點布局、採購，或是管理費用端的協同效益，我們都承諾要做到位。就你的問題而言，我們剩餘的高成本、跨國分散的布局，將在這個過程中大幅降低。

We'll have roughly one plant in a two-year period from now, we'll have one plant operate in Germany, we'll have a single digit number of four operations in North America, so it's going to be a strong position that we'll have from that standpoint on our footprint.

大約兩年後，我們在德國將有大概一座工廠運作；在北美將有個位數、約四個營運據點，所以就布局而言，我們會處於非常有利的位置。

Another way I guess I look at it is when we look at our quote activity and our success rate and our costs, I feel really good about the competitiveness and the win rate coming out. The economy is down but in Brazil, North America and the expanded Mexico really good success rates and costs.

我換個角度看：當我們看報價活動、成功率與成本時，我對我們的競爭力與得標率非常有信心。經濟雖然下行，但在巴西、北美以及擴大的墨西哥，我們的成功率與成本表現都很好。

Asia with the China, India, yes. The biggest one we see that's been an obstacle, both as Tom said volume but also cost is we need that broader Eastern European footprint.

亞洲方面，包括中國、印度，是的。我們看到最大的障礙——如 Tom 所說——除了量之外也包括成本，就是我們需要更廣泛的東歐布局。

We need a little bit more capacity in Europe that's low cost. That would be the one. To your question, that's what we're addressing right now.

我們在歐洲需要多一些低成本產能。這會是那一項。回到你的問題，這正是我們現在在處理的。

I'll make a correction. We'll have two plants in Germany. One on the engine side and one on the power train cooling side.

我更正一下。我們在德國會有兩座工廠：一座在引擎事業，另一座在動力總成冷卻事業。

Okay, great. Thank you very much.

好的，很好。非常感謝。

Thank you. I'm show nothing further questions at this time. I would now like to turn the conference back to Ms. Kathy Powers.

謝謝。目前我這邊顯示沒有其他問題。我現在想把電話會議交回給 Kathy Powers 女士。

Thank you. This concludes today's call. Thank you for joining us this morning and thank you for your interest in Modine. Good-bye.

謝謝。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 your participation in today's conference. This does conclude the program and you may all disconnect. Everyone, have a nice day.

各位女士先生，感謝各位參與今天的電話會議。本節目到此結束，您可以掛線。祝各位有美好的一天。