Modine Manufacturing Company (MOD) 2016 Q4 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Modine Manufacturing Company's fourth-quarter fiscal 2016 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 2016 會計年度第四季財報電話會議。（接線員指示）提醒各位，本次電話會議將被錄音。

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

現在我想把電話會議交給今天的主持人：Kath Powers 女士，副總裁、財務長（Treasurer）暨投資人關係主管。

Thank you for joining us today for Modine's fourth-quarter fiscal 2016 earnings call. With me today are Modine's President and CEO, Thomas Burke, and Michael Lucareli, our VP Finance and Chief Financial Officer. 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.

感謝各位今天參加 Modine 2016 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 Thomas Burke，以及我們的財務副總裁兼財務長 Michael Lucareli。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，也可在本公司網站 modine.com 的投資人關係專區下載 PDF 檔。

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.

另外，若您需要在電話會議結束前先行離線，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 and full-year results, an update on our Strengthen, Diversify, and Grow trategic nitiatives, and provide our revenue and earnings guidance for fiscal 2017. 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議程大綱。Tom 與 Mick 將就第四季與全年業績發表評論，更新我們「強化、分散與成長」（Strengthen, Diversify, and Grow）策略轉型計畫的進展，並提供 2017 會計年度的營收與獲利指引。電話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。提醒各位，本次電話會議可能包含前瞻性陳述，其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（SEC）提交之文件所述。

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

接下來，我很榮幸把電話會議交給 Thomas Burke。

Thank you, Kathy, and good morning, everyone. On today's call, I will discuss our fourth-quarter and full-year results and provide an update on our various activities taking place with regard to our Strengthen, Diversify, and Grow strategic transformation.

謝謝你，Kathy，各位早安。在今天的電話會議中，我將討論我們第四季與全年業績，並就我們在「強化、分散與成長」策略轉型方面正在進行的各項活動提供最新進展。

After that, Mick will provide a more detailed review of our consolidated financial results, and will also provide our revenue and earnings guidance for fiscal 2017. I will then provide remarks prior to the opening - prior to opening the call for questions.

之後，Mick 將更詳細地檢視我們的合併財務結果，並提供 2017 會計年度的營收與獲利指引。接著我會在開放提問之前再做一些補充說明。

From a big picture perspective, our top line saw similar trends as we witnessed during the fiscal third quarter. But our strategic initiatives designed to strengthen our business helped us drive excellent operating performance.

從整體角度來看，我們的營收端呈現與 2016 會計年度第三季相似的趨勢。但我們為強化業務而推動的策略性計畫，協助我們帶動了優異的營運表現。

Specifically, sales in the fourth quarter were down a little less than 3% on a constant currency basis, primarily due to continued weakness in certain markets. We had sales increases in Europe and Asia segments being offset by decreases in the Americas and Building HVAC segments. Gross margin improved by 80 basis points to 18.1%, benefiting from favorable material costs, improved plant operating performance, and savings related to procurement initiatives.

具體而言，第四季銷售額以固定匯率計算下降略低於 3%，主要因部分市場持續疲弱。歐洲與亞洲事業部的銷售成長，被美洲與建築 HVAC 事業部的下滑所抵銷。毛利率提升 80 個基點至 18.1%，受惠於有利的材料成本、工廠營運績效改善，以及採購計畫帶來的節省。

Our adjusted operating income was $23.7 million, up 38% from the prior year. Adjusted earnings per share were $0.36 for the quarter, representing an improvement of $0.24 or 3 times that of the prior year. For the full year, our adjusted operating income was $63.2 million, and our adjusted earnings per share were $0.76, up 21% from the prior year.

我們的調整後營業利益為 2,370 萬美元，較去年同期成長 38%。本季調整後每股盈餘為 0.36 美元，較去年同期改善 0.24 美元，為去年同期的 3 倍。全年而言，我們的調整後營業利益為 6,320 萬美元，調整後每股盈餘為 0.76 美元，較去年成長 21%。

It is clear that continued cost control efforts have allowed us to deliver year-over-year earnings improvements, despite lower sales for the second straight quarter. Although our top line continues to be challenged by weak conditions in several of our end markets, I am pleased that we continue to deliver on our commitments. We took several actions during the quarter to further lower our cost structure so we can continue working towards achieving our earnings targets.

很明顯地，持續的成本控管努力，使我們即使在連續第二季銷售下滑的情況下，仍能交出年對年獲利改善。儘管多個終端市場疲弱使我們的營收端持續承壓，我仍很高興我們持續兌現承諾。本季我們採取了多項行動以進一步降低成本結構，讓我們能持續朝達成獲利目標邁進。

Now I would like to review our segment results. Turning to page 6, sales for the Americas segment decreased 10% year over year on a constant currency basis, primarily due to continued weakness in the off-highway markets, lower commercial vehicle sales, and a decline in all vehicular end markets in Brazil.

接下來我想回顧各事業部的表現。翻到第 6 頁，美洲事業部銷售額以固定匯率計算年減 10%，主要因非公路（off-highway）市場持續疲弱、商用車銷售下降，以及巴西所有車輛終端市場皆出現下滑。

We saw significant decreases in the sales to both heavy-duty and medium-duty commercial vehicle customers. This decline was partially offset by higher sales to North American automotive and coils customers due primarily to launch activity for two major automotive OE oil cooler programs.

我們對重型與中型商用車客戶的銷售均出現顯著下滑。此一降幅部分被北美汽車與盤管（coils）客戶較高的銷售所抵銷，主要來自兩項大型汽車原廠（OE）機油冷卻器專案的導入（launch）活動。

Gross margin improved by 40 basis points from the prior year to 18.8% despite the drop in sales for the quarter. Our margin benefited from lower material costs, various cost reduction efforts, including the closure of the McHenry, Illinois, facility, and savings from our ongoing procurement savings initiatives.

儘管本季銷售下滑，毛利率仍較去年提升 40 個基點至 18.8%。我們的毛利率受惠於材料成本下降、各項降本措施（包括關閉伊利諾州 McHenry 廠），以及持續推動採購節省計畫所帶來的節省。

SG&A was down $6.2 million due to cost control efforts, higher income from contract testing at our North American tech center, and a $3.2 million charge for a legal matter in Brazil in the prior year. Adjusted operating income for the Americas segment was up 6% to $16.3 million despite the significant drop in sales. This resulted from gross margin improvement and the lower SG&A expenses.

SG&A（銷售、一般及管理費用）減少 620 萬美元，原因包括成本控管努力、北美技術中心合約測試收入增加，以及去年在巴西一項法律案件所認列的 320 萬美元費用。美洲事業部調整後營業利益成長 6% 至 1,630 萬美元，儘管銷售大幅下滑。此一結果來自毛利率改善以及 SG&A 費用降低。

As I mentioned last quarter, we expect difficult end-market conditions to continue into fiscal 2017. In North America, the truck market has continued to soften and we expect heavy-duty volumes to be down about 25% in fiscal 2017. We have also not seen any improvement in the heavy construction and agricultural equipment markets, with the market outlook showing further declines of 15% to 20%.

如同我在上季所提到的，我們預期艱困的終端市場狀況將延續至 2017 會計年度。在北美，卡車市場持續走弱，我們預期 2017 會計年度重型車出貨量將下滑約 25%。我們也尚未看到重型工程建設與農業設備市場有任何改善，市場展望顯示將再下滑 15% 至 20%。

Offsetting some of that expected decline is the automotive market, which continues to be relatively strong and we expect the market to be up 2% to 4%. However, some of our recent automotive launches have been delayed at our customers' request.

部分抵銷上述預期下滑的是汽車市場，其表現仍相對強勁，我們預期市場將成長 2% 至 4%。然而，部分近期汽車導入專案因客戶要求而延後。

In Brazil, we expect the commercial vehicle and agricultural equipment markets to be down a further 10 to 20% from the currently depressed levels and expect the aftermarket to remain flat. We are hopeful that economic conditions will improve once the political situation stabilizes.

在巴西，我們預期商用車與農業設備市場將在目前低迷水準上再下滑 10% 至 20%，並預期售後市場（aftermarket）維持持平。我們希望在政治情勢穩定後，經濟狀況能有所改善。

Although these market conditions are challenging, our quote activity in the Americas segment is high and increasing, particularly for engine, oil cooling, and related products. The need to achieve the updated fuel economy or CAFE standards in the U.S. is accelerating the adoption of our layered core products with added thermal unit content per vehicle, which is driving both increased launch volumes of our automotive products and higher quote activity. I'm very pleased with the resulting rate of our business wins.

儘管市場環境具挑戰性，我們在美洲事業部的報價活動（quote activity）仍然很高且持續增加，尤其是在引擎、機油冷卻及相關產品方面。美國為達成更新後的燃油經濟性或 CAFE 標準之需求，正加速採用我們的層疊式核心（layered core）產品；每輛車的熱管理單元含量提升，帶動我們汽車產品的導入量增加以及更高的報價活動。我對因此帶來的業務得標速度感到非常滿意。

You may have seen the announcement earlier this month that we won a significant business award from Oshkosh Defense to supply cooling modules for the joint light tactical vehicles, which we will begin to launch later this fiscal year. In addition, we won a significant new transit bus program during the quarter and several new off-highway programs.

各位可能已看到本月稍早的公告：我們獲得 Oshkosh Defense 的一項重要業務獎項，將為聯合輕型戰術車（JLTV）供應冷卻模組，我們將於本會計年度稍晚開始導入量產。此外，我們在本季也贏得一項重要的新大眾運輸巴士（transit bus）專案，以及數個新的非公路專案。

We continue to launch products for electric vehicles and are quoting on additional programs with existing customers and with new customers on hybrid and electric powertrain cooling opportunities. We won a program during the quarter to provide cooling modules for a new electric vehicle customer that will launch next year. And I am very excited about the work that is being done in this area and for the growth opportunities this brings to Modine.

我們持續為電動車導入新產品，並就混合動力與電動動力系統冷卻機會，向既有客戶及新客戶報價更多專案。本季我們贏得一項專案，將為一位新的電動車客戶提供冷卻模組，該專案將於明年導入。我對這個領域正在進行的工作以及其為 Modine 帶來的成長機會感到非常振奮。

Please turn the page 7. Sales for our Europe segment increased 4% in the fourth quarter on a constant currency basis as a result of higher sales to commercial vehicle customers. We also had higher sales to automotive customers, but this was offset by a significant drop in sales of BMW modules as the wind down of that business is nearing completion.

請翻到第7頁。我們歐洲事業部第四季以固定匯率計算的銷售額成長4%，主要因對商用車客戶的銷售增加所致。我們對汽車客戶的銷售也有所增加，但隨著BMW模組業務接近完成退場，該業務銷售大幅下滑，抵銷了部分增幅。

Gross margin improved by 370 basis points from the prior year to 15.2%, driven by favorable material costs and improved operating performance. We have eliminated the backlog that had created operational inefficiencies over the past several quarters, resulting in improved operating performance.

毛利率較去年提升370個基點至15.2%，主要受惠於有利的材料成本以及營運表現改善。我們已消除過去數季造成營運效率不彰的積壓訂單，因而帶動營運表現提升。

We also continue to make progress with our plant expansion in Hungary, which is a very cost-competitive operation and will provide crucially needed incremental capacity for the region. In fact, we are already seeing an increase in quote activity and have won several key programs.

我們也持續推進匈牙利廠的擴建計畫；該廠具高度成本競爭力，並將為該區域提供迫切需要的新增產能。事實上，我們已看到報價活動增加，並已贏得數個關鍵專案。

In addition, we are using our latest building block technology to enable us to quote global designs for our commercial vehicle radiator products. These products will be quoted from Hungary and other low-cost country facilities.

此外，我們正運用最新的模組化平台技術，使我們能為商用車散熱器產品提供全球化設計的報價。這些產品將由匈牙利及其他低成本國家之廠區進行報價。

Adjusted operating income in Europe was up $6.1 million to $11.2 million, primarily due to gross margin improvements. Europe is also experiencing a high level of quote activity on both automotive powertrain cooling and engine products, including requests for quotes on hybrid and electric vehicles. Again, I am pleased with the win rates we are achieving with our improved cost structure.

歐洲調整後營業利益增加610萬美元至1,120萬美元，主要來自毛利率改善。歐洲在汽車動力系統冷卻與引擎產品方面也出現高度報價活動，包括混合動力與電動車的報價需求。再次強調，我對我們在成本結構改善後所達成的得標率感到滿意。

The commercial vehicle market in Europe remains strong and the automotive market continues to see modest yet predictable growth of about 2%. We expect the off-highway markets to remain weak, but this represents a smaller percentage of the Europe segment sales mix.

歐洲商用車市場仍然強勁，汽車市場則持續呈現溫和但可預期的約2%成長。我們預期非道路（off-highway）市場仍將疲弱，但其在歐洲事業部銷售組合中占比較小。

Please turn to page 8. Sales for our Asia segment were up 15% compared to the prior year on a constant currency basis. Although off-highway volumes in China and Korea continue to decline, this was more than offset by a significant increase of automotive sales, driven by launches of aluminum oil coolers in China.

請翻到第8頁。我們亞洲事業部以固定匯率計算的銷售額較去年成長15%。儘管中國與韓國的非道路（off-highway）出貨量持續下滑，但在中國鋁製機油冷卻器導入上市帶動下，汽車銷售大幅成長，足以抵銷前述下滑。

Adjusted operating income increased $1.5 million to $1.9 million in the fourth quarter, primarily due to higher volumes and continued cost control efforts. I am pleased that we are able to report an operating profit in Asia for the second straight year. I just returned from a trip to our Asia facilities and I'm pleased with the sales growth the teams are projecting.

第四季調整後營業利益增加150萬美元至190萬美元，主要因出貨量提升及持續的成本控管努力。我很高興我們能連續第二年在亞洲報告營業獲利。我剛從亞洲廠區出差返國，對各團隊所預估的銷售成長感到滿意。

I was also happy to witness the integration of our new joint venture in China. Modine Puxin will produce stainless steel products, including EGR coolers and oil coolers, and will expedite our introduction of stainless steel products for the commercial vehicle and automotive markets in China. We are actively quoting on and winning new business for the joint venture. We are targeting local Chinese customers, many of which place value on our ability to meet global standards of quality and design.

我也很高興親眼見證我們在中國新合資企業的整合進展。Modine Puxin將生產不鏽鋼產品，包括EGR冷卻器與機油冷卻器，並將加速我們在中國商用車與汽車市場導入不鏽鋼產品。我們正積極為該合資企業進行報價並贏得新業務。我們鎖定中國本地客戶，其中許多客戶重視我們符合全球品質與設計標準的能力。

In addition, the higher emission standards in China will require that all engine manufacturers implement emission strategies closer to the global standards seen in developed countries. This will create further opportunities for us to grow our business in this segment with products such as EGR and oil coolers.

此外，中國更高的排放標準將要求所有引擎製造商採行更接近已開發國家全球標準的排放策略。這將為我們帶來更多機會，透過EGR與機油冷卻器等產品在此事業部擴大業務。

As I mentioned last quarter, we think we are near the bottom of the market for excavators in China, but are not expecting a meaningful recovery anytime soon. However, the China automotive market continues to be relatively strong and we believe growth will be about 5%. We anticipate that our sales will exceed market growth due to continued launches of automotive oil coolers and related products.

如同我上季所提，我們認為中國挖掘機市場已接近谷底，但短期內不預期會有顯著復甦。然而，中國汽車市場仍相對強勁，我們認為成長約為5%。由於汽車機油冷卻器及相關產品持續導入上市，我們預期自身銷售成長將超越市場成長。

India continues to be a bright spot for both commercial vehicles and autos. We are capitalizing on this with continued business wins out of our Modine India operations in Chennai.

印度在商用車與乘用車方面仍是亮點。我們正透過位於清奈的Modine India營運據點持續贏得新業務，把握此一機會。

Turn to page 9. Sales for our Building HVAC segment were down 5% for the quarter on a constant currency basis, driven primarily by lower sales of heating products in North America. As we mentioned last quarter, the warmer winter weather resulted in lower demand for our unit heaters after two record-setting years.

請翻到第9頁。我們建築HVAC事業部本季以固定匯率計算的銷售額下滑5%，主要因北美暖氣產品銷售較低所致。如同上季所述，冬季較為溫暖，使我們的單元式暖風機需求在連續兩年創紀錄後出現下滑。

We remain very confident in our ability to continue to grow this business. With new products scheduled for introduction in fiscal 2017, we will expand our heating line, continue to grow our packaged ventilation line into larger tonnage sizes, and introduce inverter-based cooling products in our precision cooling line targeted to improve data center efficiencies at less than full-load conditions.

我們仍對持續成長此業務的能力深具信心。隨著2017會計年度預計推出新產品，我們將擴充暖氣產品線、持續將整體式通風產品線擴展至更大冷凍噸位，並在精密冷卻產品線導入以變頻為基礎的冷卻產品，目標是在非滿載條件下提升資料中心效率。

Gross margin for this segment decreased 330 basis points to 26.9%, primarily related to the UK business. In the UK, gross margin was down due to operating inefficiencies, including those related to the move into our new manufacturing facility along with pricing pressure from the impact of the euro exchange rate on the air conditioning market. Adjusted operating income was down $800,000 to $2.1 million, primarily due to lower gross profits partially offset by decreases in SG&A expenses.

本事業部毛利率下滑330個基點至26.9%，主要與英國業務相關。在英國，毛利率下滑係因營運效率不彰所致，包括搬遷至新製造廠房相關影響，以及歐元匯率對空調市場造成的影響所帶來的定價壓力。調整後營業利益下滑80萬美元至210萬美元，主要因毛利下降，部分被SG&A費用下降所抵銷。

Although we saw a weaker commercial heating market in North America and softer demand in the air conditioning and commercial ventilation markets in the UK, we believe these markets will recover later this calendar year, with growth returning to the flat to up 6% range. Also, the recent weakening of the British pound versus the euro should help the competitive pricing situation with our mainland European competitors.

儘管我們在北美看到商用暖氣市場較疲弱、英國空調與商用通風市場需求轉弱，我們相信這些市場將於本曆年稍晚復甦，成長將回到持平至成長6%的區間。此外，近期英鎊兌歐元走弱，應有助於改善我們與歐洲大陸競爭對手之間的價格競爭態勢。

Please turn to page 10. Before turning it over to Mick, I would like to give an update on our progress towards our Strengthen, Diversify, and Grow financial objectives. Our first objective is to achieve gross cost reductions of $40 million to $50 million, resulting in improved operating margin of 7% to 8%. The cost reduction is a cumulative target and will more than offset general economic inflation and contractual price downs to our customers.

請翻到第10頁。在交由Mick接續之前，我想更新我們在「強化、分散、成長」財務目標上的進展。我們的第一項目標是達成4,000萬至5,000萬美元的總成本削減，進而將營業利益率提升至7%至8%。成本削減為累計目標，且將足以抵銷一般經濟通膨以及對客戶的合約降價。

Second, we plan to acquire at least $100 million of incremental non-vehicular revenue and expand our leverage ratio to between 1.5 and 2.5 times. We are specifically targeting transactions that are immediately accretive to our shareholders and that would generate sufficient cash and synergies to allow us to quickly pay down debt so that our leverage remains in our targeted range.

第二，我們計畫取得至少1億美元的新增非車用營收，並將槓桿比率擴大至1.5倍至2.5倍之間。我們特別鎖定能立即增厚股東價值的交易，且可產生足夠的現金與綜效，使我們能快速償還債務，讓槓桿維持在目標區間內。

Each of the elements of our Strengthen, Diversify, and Grow transformation depends and is supported by the others. For example, growing our existing revenue base and adding diversification is important to achieve and maintain the 7% to 8% operating margin we are pursuing. And by strengthening our base with a more competitive cost structure, we position ourselves to take full advantage of growth, whether organic or inorganic, and deliver acceptable returns even in times when our end markets are challenged.

我們「強化、分散、成長」轉型的各項要素彼此依存並相互支撐。例如，擴大既有營收基礎並提升多元化，對於達成並維持我們所追求的7%至8%營業利益率至關重要。而透過以更具競爭力的成本結構強化基礎，我們得以充分把握成長機會（無論是有機或併購），並在終端市場承壓時仍能交付可接受的報酬。

We are making significant progress towards our cost savings goal. Of the targeted savings, we expect 25% to come from SG&A and other personnel-related savings, 25% from manufacturing footprint changes, and 50% from procurement savings.

我們在達成成本節省目標方面正取得顯著進展。在目標節省中，我們預期25%將來自SG&A及其他人員相關節省，25%來自製造據點布局調整，50%來自採購節省。

First, I would like to discuss our targeted savings from SG&A and other personnel-related reductions. This target represents a total annual savings to be in effect by April of 2017 and excludes the impact of wage and benefit inflation.

首先，我想討論我們在銷售、一般及行政費用（SG&A）以及其他與人員相關的削減所帶來的目標節省。此目標代表截至2017年4月生效的年度總節省金額，且不包含薪資與福利通膨的影響。

Following the October announcement of our SDG initiative, we initiated a number of actions targeted at reducing our SG&A and personnel costs. These actions included a limited number of employee reductions, a decision not to fill a number of vacant salary positions, and a variety of smaller SG&A reduction activities.

在10月宣布我們的SDG計畫後，我們啟動了多項行動，目標是降低SG&A與人員成本。這些行動包括少量的員工精簡、決定不補實若干空缺的薪資職位，以及各種較小的SG&A削減活動。

Also as I mentioned last quarter, we approved 65 retirements under an early retirement program in the U.S., which will result in a permanent elimination of the majority of these positions. We will backfill the remaining at a lower cost. In total, these actions will result in an annual run rate savings of $5 million, which will be realized in fiscal 2017. In order to reach our target, we will continue to implement cost reductions for fiscal 2017 that provide line of sight to our $10 million to $15 million goal by fiscal 2018.

此外，如同我在上季提到的，我們在美國依據提前退休方案核准了65位退休，這將使其中大多數職位被永久取消。其餘職位我們將以較低成本補實。合計而言，這些行動將帶來每年約500萬美元的常態化節省，並將於2017財年實現。為了達成我們的目標，我們將在2017財年持續推動成本削減，並確保能清楚看見在2018財年前達成1,000萬至1,500萬美元目標的路徑。

Next, I would like to report on our progress on our manufacturing footprint. We realized $1.8 million in savings in fiscal 2016 and are planning an additional $5 million to $10 million in savings in fiscal 2017.

接下來，我想報告我們在製造據點布局方面的進展。我們在2016財年實現了180萬美元的節省，並規劃在2017財年再增加500萬至1,000萬美元的節省。

The Washington, Iowa transfer and associated closure continues to run ahead of schedule and will be completed in fiscal 2017. The expansion of our Nuevo Laredo, Mexico, facility is complete and equipment from Washington is being installed in the finished building.

愛荷華州華盛頓（Washington, Iowa）的移轉及相關關廠作業持續超前進度，並將於2017財年完成。我們位於墨西哥新拉雷多（Nuevo Laredo）的廠房擴建已完成，華盛頓廠的設備正安裝於已完工的建築內。

In Hungary, we have finalized negotiations to procure the last remaining piece of adjacent land required to expand the plant in Mezokovesd. We are also working on phased workforce reductions at our Pliezhausen, Germany facility in conjunction with the expected wind down of programs at that plant.

在匈牙利，我們已完成談判以取得擴建梅佐克韋什德（Mezokovesd）工廠所需的最後一塊相鄰土地。我們也正配合該廠預期的專案逐步收尾，在德國普利茨豪森（Pliezhausen）廠推動分階段的人力縮減。

For the procurement initiative, we have identified and negotiated approximately $15 million of annualized savings to date and realized $1.9 million of gross savings in fiscal 2016. We will continue to work towards our targeted goal of $20 to $25 million in savings by fiscal 2018.

就採購計畫而言，截至目前我們已辨識並談妥約1,500萬美元的年化節省，並在2016財年實現190萬美元的毛節省。我們將持續朝2018財年前達成2,000萬至2,500萬美元節省的目標努力。

With that, I would like to turn it over to Mick for an overview of our consolidated financial results and to provide our fiscal 2017 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並提供2017財年指引。

Thanks, Tom, and good morning, everyone. Please turn to slide 12. Our fourth-quarter sales decreased 5% as we continued to experience foreign currency headwinds and weakness in certain end markets. Lower sales were primarily due to weakness in global off-highway markets, the North American commercial vehicle market, and commercial heating market. Similar to last quarter, warm winter weather contributed to the sales decline in our Building HVAC segment.

謝謝你，Tom，各位早安。請翻到第12頁投影片。我們第四季銷售額下滑5%，因為我們持續受到外幣逆風影響，且部分終端市場疲弱。銷售下滑主要來自全球非公路（off-highway）市場疲弱、北美商用車市場，以及商用供暖市場。與上季類似，暖冬天氣也導致我們建築HVAC事業部的銷售下滑。

As Tom mentioned, sales decreased 3% on a constant currency basis, excluding an unfavorable currency impact of $10 million. I am happy to report that our gross margin improved by 80 basis points to 18.1% despite the decline in sales. This improvement was driven by lower commodity prices and further operational improvements.

如Tom所提，若以固定匯率計算，排除1,000萬美元不利匯率影響後，銷售額下滑3%。我很高興報告，儘管銷售下滑，我們的毛利率仍提升80個基點至18.1%。此改善主要由較低的原物料價格以及進一步的營運改善所帶動。

In addition, we are beginning to realize savings from our procurement initiatives. Further, we lowered costs at many of our manufacturing locations. This is the result of hard work from all of our teams, particularly those throughout Europe and North America.

此外，我們也開始實現採購計畫帶來的節省。同時，我們在多個製造據點降低了成本。這是所有團隊努力的成果，尤其是遍布歐洲與北美的團隊。

Please note that gross profit includes a $1.1 million environmental charge related to a manufacturing facility that the Company closed in 2012. However, this charge was backed out to arrive at adjusted operating income. Excluding this charge and a $1.2 million negative foreign currency exchange impact, our gross profit was up $1.8 million or 3% on the lower sales.

請注意，毛利包含一筆110萬美元的環境費用，與公司於2012年關閉的一座製造廠相關。然而，為了計算調整後營業利益，我們已將此費用剔除。排除此費用以及120萬美元的不利外幣匯兌影響後，在銷售較低的情況下，我們的毛利仍增加180萬美元，或成長3%。

Moving on to SG&A, costs were lower than the prior year by $7 million or 15%. This includes a number of moving pieces. First, the prior year included a $3.2 million legal reserve in Brazil, which remains on the balance sheet. Also, the exchange rate impact was $1 million favorable in the quarter.

接著談SG&A，成本較去年同期降低700萬美元，或下降15%。其中包含多項因素。首先，去年同期在巴西提列了320萬美元的法律準備金，目前仍列於資產負債表。此外，本季匯率影響帶來100萬美元的有利因素。

Our reported SG&A number includes a $1.5 million non-cash pension settlement loss related to our lump sum payout program that was offered earlier in the year. Excluding these items, SG&A improved by $4.4 million, resulting primarily from our continued cost control efforts.

我們所報告的SG&A數字包含一筆150萬美元的非現金退休金結算損失，與我們在年初提供的一次性領取（lump sum）給付方案相關。排除上述項目後，SG&A改善440萬美元，主要來自我們持續的成本控管努力。

During the quarter, we recorded $11.4 million of restructuring expenses. The majority of these restructuring charges relate to employee severance, equipment transfers, and plant consolidation costs in the Europe and Americas segments.

本季我們認列了1,140萬美元的重整費用。其中大部分重整費用與員工資遣、設備移轉，以及歐洲與美洲事業部的工廠整併成本相關。

We also recorded an asset impairment of $9.9 million in Germany. We made the strategic decision to wind down production of the Origami commercial radiator, which triggered the recording of the impairment this quarter. The bottom portion of the table shows all of the adjustments. As usual, we have included a full reconciliation between our reported results and adjusted operating results in the appendix.

我們也在德國認列了990萬美元的資產減損。我們做出策略性決策，逐步停止Origami商用散熱器的生產，因此觸發本季認列減損。表格下半部顯示所有調整項目。如往常一樣，我們在附錄中提供了已報告結果與調整後營運結果之間的完整調節表。

Q4 adjusted operating income of $23.7 million was up $6.5 million or 38% from last year. This was the result of strong operating performance during the quarter and ongoing cost savings initiatives. Adjusted EPS was $0.36, up $0.24 or 200% compared to last year. Our improvement in EPS was driven by both improved operating earnings and lower income tax expense.

第四季調整後營業利益為2,370萬美元，較去年增加650萬美元，或成長38%。這是本季強勁的營運表現與持續推動的成本節省計畫所致。調整後每股盈餘（EPS）為0.36美元，較去年增加0.24美元，或成長200%。EPS的改善同時受惠於營運獲利提升以及所得稅費用降低。

Taxes were positively impacted by a number of factors, including some one-time events this year, nonrecurring negative tax items in the prior year, and changes in our country-by-country mix of earnings.

稅負受到多項因素的正面影響，包括今年的一些一次性事件、去年一次性的負面稅務項目，以及我們各國別獲利組合的變化。

Overall, we are pleased with the financial performance this quarter. The management team is highly focused on the items we can control. Despite the lower sales volume, we once again improved our gross margin and reduced SG&A spending. Earlier this year, we shared our outlook for a much stronger second half of the year, and while it took a lot of hard work, the team delivered.

整體而言，我們對本季的財務表現感到滿意。管理團隊高度聚焦於我們可控的事項。儘管銷售量較低，我們再次提升毛利率並降低SG&A支出。今年稍早，我們分享了對下半年將顯著轉強的展望；雖然需要大量努力，團隊最終仍交出成果。

Turning to slide 13, free cash flow for the year was $22 million, more than $6 million higher than the prior year due to higher cash generated from operations. Capital expenditures of $63 million were $5 million higher than the prior year. This is primarily due to the Nuevo Laredo plant expansion and the addition of engine product capacity in Europe.

請看第13頁投影片，全年自由現金流為2,200萬美元，較去年增加逾600萬美元，主要因營運產生的現金增加。資本支出為6,300萬美元，較去年增加500萬美元。這主要是因新拉雷多工廠擴建，以及在歐洲新增引擎產品產能。

Our balance sheet provides plenty of liquidity to support our growth and strategic initiatives. We ended the year with $94 million in net debt. This includes $69 million of cash on hand and a leverage ratio of 0.84.

我們的資產負債表提供充足的流動性，以支持成長與策略性計畫。我們在年底的淨負債為9,400萬美元。其中包括6,900萬美元的手頭現金，以及0.84的槓桿比率。

So far, we have purchased nearly $7 million or 1.6% of stock through our repurchase program. We will consider resuming our repurchase program when the window opens while balancing the potential need for cash to support our acquisition plans.

截至目前，我們已透過庫藏股回購計畫回購近700萬美元、約占1.6%的股票。在窗口期開啟後，我們將在權衡支持收購計畫之潛在現金需求的同時，考慮恢復回購計畫。

So let's turn now to our fiscal 2017 full-year guidance on slide 14. Tom reviewed the progress on our SDG initiatives and we expect to see a portion of these benefits in the new fiscal year. These savings are more than offsetting general economic, inflation, contractual price downs, and material pass-throughs.

接下來我們看投影片14，說明2017會計年度全年指引。Tom已回顧我們SDG計畫的進展，我們預期在新的會計年度將看到其中一部分效益。這些節省的金額已足以抵銷一般經濟因素、通膨、合約降價以及材料轉嫁等影響。

In addition, Tom discussed some of the market challenges in fiscal 2017. Throughout the Americas segment, we expect difficult market conditions. This includes ongoing weakness in our global off-highway markets, while a bright spot remains the global automotive business. In addition, we expect to grow our Building HVAC business in the new year.

此外，Tom也談到2017會計年度的一些市場挑戰。在美洲事業部，我們預期市場環境將相當艱困。其中包括全球非公路（off-highway）市場持續疲弱，但全球汽車業務仍是一個亮點。另外，我們也預期在新年度擴大我們的建築HVAC業務。

Given the current conditions, we expect to offset volume challenges and further grow earnings in fiscal 2017. This outlook is based on several factors. First, we anticipate that metals prices and foreign exchange rates will remain stable at current levels.

在目前情勢下，我們預期能抵銷出貨量方面的挑戰，並在2017會計年度進一步提升獲利。此展望係基於數項因素。首先，我們預期金屬價格與外匯匯率將在目前水準維持穩定。

In addition, our sales will benefit from the new automotive program launches. And last, we expect improved margins from our Strengthen, Diversify, and Grow initiatives, resulting in improved operating performance in all of our segments.

此外，我們的銷售將受惠於新的汽車專案導入。最後，我們預期「強化、分散與成長」（Strengthen, Diversify, and Grow）計畫將帶來更佳的毛利率，進而使各事業部的營運表現全面改善。

After considering each of the factors, we are establishing the following full-year sales and earnings guidance. We expect sales to be down 1% to up 3% from the prior year. We expect adjusted operating income to be $65 million to $71 million. This equates to an increase of 3% to 12%.

在綜合考量各項因素後，我們提出以下全年銷售與獲利指引。我們預期銷售額較前一年下降1%至成長3%。我們預期調整後營業利益為6,500萬至7,100萬美元。這相當於成長3%至12%。

An anticipated increase in our tax rate to a more normal level will have a slightly negative impact on EPS. As a result, we anticipate adjusted EPS to be $0.77 to $0.87, up 1% to 14% compared to the prior year.

我們預期稅率將上升至較正常的水準，對每股盈餘（EPS）將有些微負面影響。因此，我們預期調整後EPS為0.77至0.87美元，較前一年成長1%至14%。

Clearly, the global off-highway and North American commercial vehicle markets are impacting our top line. However, our cost reduction efforts are paying off and I am confident that Modine will convert well, particularly when the volumes recover in our core markets.

顯然，全球非公路市場與北美商用車市場正在影響我們的營收表現。然而，我們的降本努力正在見效，我有信心Modine能有效轉化成果，尤其當核心市場的出貨量回升時。

With that, Tom, I will turn it back to you.

接下來，Tom，我把時間交還給你。

Thanks, Mick. We had some major accomplishments in fiscal 2016. We delivered a 21% improvement in our full-year adjusted earnings per share despite a decline in sales. We announced our Strengthen, Diversify, and Grow strategic framework that will help to improve our competitive position and allow us to diversify our business and reduce our exposure to the highly cyclical vehicular markets.

謝謝，Mick。我們在2016會計年度達成了一些重大成果。儘管銷售下滑，我們仍使全年調整後每股盈餘提升21%。我們宣布「強化、分散與成長」的策略架構，將有助於提升競爭地位，並讓我們分散業務、降低對高度循環的車用市場之曝險。

We announced and implemented a share repurchase program that allowed us to return cash to our shareholders in the second half of the year. And finally, we completed the formation of the Puxin joint venture in China, strengthening our position in that market.

我們宣布並執行股票回購計畫，使我們得以在下半年將現金回饋給股東。最後，我們完成在中國成立Puxin合資企業，強化我們在該市場的布局。

Although most of our accomplishments towards our Strengthen, Diversify, and Grow financial targets in fiscal 2016 have been on lowering costs, there's been a lot of work going on behind the scenes in our diversify and grow objectives.

雖然我們在2016會計年度朝向「強化、分散與成長」財務目標的多數成果主要來自降低成本，但在「分散」與「成長」目標方面，幕後也進行了大量工作。

We continue to evaluate acquisition targets and are encouraged by the number of promising opportunities that will help us grow our top line and broaden our non-vehicular Building HVAC and Coils businesses. Although I don't have anything to report right now, I am hopeful that we will reach our targets in the near future.

我們持續評估併購標的，且對於多項具潛力的機會感到鼓舞，這些機會將有助於提升營收並擴大我們非車用的建築HVAC與盤管（Coils）業務。雖然目前沒有可報告的事項，但我希望在不久的將來能達成我們的目標。

Looking ahead, fiscal 2017 will bring an important milestone to our Company: our 100th anniversary. We will celebrate this accomplishment by continuing to focus on what's important: strengthening our Company and keeping the commitments made to our shareholders.

展望未來，2017會計年度將為本公司帶來一個重要里程碑：我們的100週年。我們將以持續聚焦於重要事項來慶祝這項成就：強化公司體質，並履行對股東所做的承諾。

And with that, we'll take your questions.

接下來我們開始提問。

(Operator Instructions) David Leiker, Baird.

（接線員指示）Baird的David Leiker。

Hi, good morning. This is Joe Vruwink for David. I wanted to start on revenue guidance for the next fiscal year. If I just add up all your regional exposures and take what you assume the markets are going to do, I come out with a number that assumes industry volumes decline 2% or so in 2017.

嗨，早安。我是代替David的Joe Vruwink。我想先從下一個會計年度的營收指引談起。如果我把你們各地區的曝險加總，並套用你們對市場走勢的假設，我算出來的數字隱含2017年產業出貨量大約下滑2%左右。

So comparing that to revenue guidance, down 1%, up 3%, that seems like a fairly wide range of what backlog may be contributing next year. Am I thinking about this right? And are there any particular regions or businesses where you might have just embedded a wider forecast at this point in the year?

因此，對照你們的營收指引（下降1%到成長3%），看起來區間相當寬，可能反映明年在手訂單（backlog）的貢獻幅度。我這樣理解對嗎？另外，在今年這個時間點，是否有任何特定地區或業務，你們在預測中納入了較大的不確定性？

Yes, Joe. A couple things that really impact that. One is if we look at our Building HVAC segment, as you know, it's a very seasonal business. This year for sure will be second-half loaded. And that's both due to recovery in data center sales and our business in the UK. Also, the heating season.

是的，Joe。有幾件事對此影響很大。第一，如果看我們的建築HVAC事業部，如你所知，這是一個季節性很強的業務。今年確定會呈現下半年比重較高。這同時來自資料中心銷售的復甦，以及我們在英國的業務。另外還有供暖季。

Now with that, the heating season, as you know, is kind of a wide variance or an unknown. It really is going to be heavily dependent on the winter and the weather. Also then on the vehicular side, we've got a really good visibility to our launch activity this year. I will let Tom comment to this.

至於供暖季，如你所知，變動幅度很大、也較難預測。它將高度取決於冬季與天氣狀況。此外，在車用端，我們對今年的導入（launch）活動有非常好的能見度。我讓Tom來補充說明。

I think the wildcard for us is especially in some of the off-highway space, the market is a little volatile right now. And depending on timing of launch activity and actual ramp rates and volumes contributes to that wider variability in the top line.

我認為對我們而言的不確定因素，特別是在部分非公路領域，市場目前有些波動。而導入活動的時點，以及實際爬坡速度（ramp rates）與出貨量，都會使營收端出現較大的變動區間。

Yes, Mick. It's a good point. We are winning significant programs, and on off-highway specifically, it's what's the volume assumptions behind those. So we know we have new programs that will lead to higher share, if you will, than we have before. The question is what rate will they take. Will they assume with the market situation?

是的，Mick。這點說得很好。我們正在拿下重要專案，而就非公路而言，關鍵在於這些專案背後的出貨量假設。因此我們知道有新專案將帶來更高的市占（如果你要這麼說）相較於過去。問題在於它們會以什麼速度放量。在目前的市場情況下，會採取什麼樣的假設？

And then secondly, on the automotive side, as mentioned, our oil cooler and oil-cooler-related product launches are going extremely well, specifically in the Asia region and China and in Europe and starting in North America as well. So this content per vehicle that is increasing because of the CAFE standards and emissions standards around the world is starting to give us an opportunity to actually growth share or business faster than market recovery or market growth because of the added content.

其次，在汽車端，如前所述，我們的油冷卻器及與油冷卻器相關產品的導入進展非常順利，特別是在亞洲地區與中國、以及歐洲，北美也開始展開。因此，因應全球各地的CAFE標準與排放標準，單車搭載內容（content per vehicle）增加，正讓我們有機會因新增內容而使市占或業務成長速度快於市場復甦或市場成長。

Joe, the one piece of additional color I guess I would add to that. You had asked about by segment. I commented on Building HVAC and the seasonality, but I think we would say the strongest area, the most consistent area has been automotive in Europe. The automotive seems to be stable and in a good trend in Asia as well.

Joe，我想我可以再補充一點背景。你問到按事業部來看。我剛才談到建築HVAC與季節性，但我認為我們會說最強、也最一致的領域是歐洲的汽車業務。汽車業務在亞洲看起來也相對穩定，且趨勢良好。

Clearly alot going on in Brazil, and we haven't found that bottom yet. And then lots of volatility going on in North America, both commercial vehicle and off-highway.

巴西那邊顯然有很多事情在發生，而且我們還沒看到觸底。另外北美也出現很大的波動，包含商用車與非公路（off-highway）領域。

That's great color. So am I right in thinking the plus-3% revenue growth would imply everything you know you have in the backlog that will launch this year launches on time at what the OEMs are telling you? Is that the ideal plus-3% scenario?

這些說明很有幫助。所以我這樣理解對嗎：營收成長+3%代表你們已知今年會啟動的在手訂單（backlog）都能依照OEM告訴你們的時程準時量產？這就是理想的+3%情境嗎？

Exactly.

沒錯。

Okay. If I go a little more granular and specifically on North America, that would seem to maybe be the one region where organic growth hasn't outperformed what the underlying market volumes have been, just based on our math.

好的。如果我再更細一點、特別看北美，依我們的計算，北美似乎可能是唯一一個有機成長沒有優於基礎市場量的區域。

Is that a fair characterization? Or when you look at OEM build schedules and your growth, do you seem to be growing pretty much in line?

這樣的描述公平嗎？或者你們看OEM的排產計畫與你們的成長，你們其實大致是跟市場同步成長？

Good question. Clearly, as said, our off-highway markets, both heavy construction, including mining and ag, are under pressure. Commercial-vehicular-wise, we are seeing and had planned for a second-half recovery in the commercial vehicle market in the second half of the year is flattening out, as you've projected in your numbers as well.

好問題。如同剛才所說，我們的非公路市場——重型工程建設（包含礦業）與農業——顯然都承受壓力。商用車方面，我們原本看到並規劃今年下半年商用車市場會復甦，但現在看起來下半年復甦正在趨於平坦，這也和你們在數字上的預估一致。

So offsetting, trying to offset that is the growth in automotive business and the coils business, which we've had significant wins. So I would say that and Mick, what would you add to that?

因此用來抵銷、試圖抵銷這些影響的是汽車業務與線圈（coils）業務的成長，我們在這兩塊都有顯著的得標。所以我會說……Mick，你要補充什麼嗎？

Yes, I would say if we break it down on the automotive side and especially on engine, we are clearly outpacing the market and gaining share. Even in the quarter, we had a double-digit growth rate on automotive.

是的，我會說如果拆開來看汽車端，尤其是引擎相關，我們明顯跑贏市場並且在提升市占。即使在本季，我們汽車業務也有雙位數的成長率。

We are holding in the mediums. Both in mediums and heavies, you know we are very customer-specific there, so we tend to move up and down with customer-specific share in sales.

中型車我們維持得住。中型與重型方面，你也知道我們在那裡非常依賴特定客戶，因此銷售會隨著特定客戶的市占變動而上下波動。

And then the other thing in the number and we are holding share, and we are actually still winning business, but it's the entire off-highway space. And we are on most of the larger equipment. And we think off-highway construction, ag, mining, it's the larger horsepower engines. And as you know, Joe, those markets have been down significantly.

另外在這個數字裡，我們是在守住市占，而且其實仍在拿到新案子，但問題在於整個非公路領域。我們的產品搭載在多數大型設備上。我們認為非公路的工程建設、農業、礦業主要是大馬力引擎。而如你所知，Joe，那些市場下滑得很明顯。

So across the board, we feel we are holding share in most of our core markets. And I would say on auto, and especially on engine, we are gaining share.

所以整體而言，我們覺得在大多數核心市場都守住了市占。而在汽車端、尤其是引擎方面，我們是在提升市占。

That's great. And then my last question. On hybrid and electric vehicles, so a bigger piece of your presentation today. I think a bigger piece of how investors view the vehicular opportunity, particularly if one OEM builds 500,000 of them in the next 18 months.

很好。那我最後一個問題。關於油電混合與電動車，今天你們簡報的比重更大。我想這也更影響投資人如何看待車用機會，特別是如果某家OEM在未來18個月要生產50萬台。

But can you provide just an overview of what you're doing on an electric vehicle, your typical content? I seem to have a $300 content figure in my head across coolers and chillers, but just some additional detail there and your expectations.

但你能不能概述一下你們在電動車上做些什麼、你們典型的單車搭載內容（content）？我腦中記得你們在冷卻器與冷卻機（coolers and chillers）合計大約有每車300美元的content，但想請你再多給一些細節與你們的預期。

Yes. We have stated that the $300 per-vehicle content was the opportunity that we see. We have landed that with one customer that you referred to already on the second platform they released.

可以。我們先前提過，每車300美元的content是我們看到的機會。你剛提到的那位客戶，我們已在他們推出的第二個平台上拿到這個案子。

Earlier, we have a chiller content that initiated our entry into that market. But we've won and announced a business win this last quarter with another electric vehicle producer. Again, more of the full content that you talked about that will launch in the next fiscal year.

更早之前，我們是以冷卻機（chiller）的搭載內容切入那個市場。但我們在上一季又拿下並公告了另一家電動車製造商的業務得標。同樣是你提到的那種較完整的content，將在下一個會計年度量產。

So if you look at the trend and all, it went from maybe a fad to a questions mark of where is this market going to the number of entrants now. I think Ford was out with a recent announcement of 40% of vehicles by 2020 will have electrification of some sort, whether full electric or plug-in hybrid. And we have quoting activity going on all of that.

所以如果你看整個趨勢，它可能從一時風潮，變成「這市場會往哪裡走？」的問號，再到現在有這麼多新進者。我想福特最近也宣布，到2020年有40%的車款會有某種形式的電氣化，不論是純電或插電式油電。而我們在所有這些方面都有報價活動在進行。

Europe is catching up, as you know, with their transition from a diesel kind of strategy to now really accelerating into electric. A lot of Chinese entrants that are coming on, so we feel very well positioned.

如你所知，歐洲也正在追趕，從原本偏柴油的策略，轉為現在真正加速投入電動化。也有很多中國的新進者加入，所以我們覺得自身的布局非常到位。

Again, it's a competitive market. I'm not saying that there is any major barriers to entry there. It's just basically having the capability of being able to tie your knowledge into their systems and bring out solutions that they need. So we feel very well positioned to really capitalize on this trend.

再次強調，這是一個競爭激烈的市場。我不是說那裡有任何重大的進入門檻。重點基本上是要有能力把你們的專業知識整合到他們的系統裡，並提出他們需要的解決方案。因此我們覺得自己非常有利，能真正把握這個趨勢。

Great. I will leave it there. Thanks, guys.

很好。我就先到這裡。謝謝各位。

Mike Shlisky, Seaport Global.

Seaport Global 的 Mike Shlisky。

This is Jordan Bender in for Mike today. So your operating profit was up $6.5 million in Q4 on a declining revenues. But now you are guiding to a $5 million improvement in operating profit for the entire 2017 on what kind of looks like flat revenues.

今天由 Jordan Bender 代替 Mike。你們第四季在營收下滑的情況下，營業利益增加了650萬美元。但現在你們對2017年全年指引是在看起來營收持平的情況下，營業利益只改善500萬美元。

I guess we're just wondering why the restructuring benefits aren't higher for 2017. Are you guys taking a cautious stance with your cost structure or is there something else that we should know about?

我們想了解的是，為什麼2017年的重整效益沒有更高？你們是在成本結構上採取比較保守的立場，還是有其他我們需要知道的因素？

Yes, this is Mick. I'll take first stab and then Tom can add color. As we approach the entire strengthen, diversify, and grow initiative, we are still targeting the $40 million to $50 million in savings. We've talked about there's going to be a ramp. We will start to see a portion of that in fiscal 2017, so yes, we will see those savings.

是的，我是 Mick。我先回答，之後 Tom 可以補充說明。就整個「強化、分散、成長」（strengthen, diversify, and grow）計畫而言，我們仍以節省4,000萬到5,000萬美元為目標。我們也談過這會有一個逐步爬升的過程。我們會在2017會計年度開始看到其中一部分，因此是的，我們會看到那些節省。

Part of this ties as well to our top line and leveraging all the costs we've taken out. So how the top line comes in is an important determinant of the actual earnings. Because while we have the costs that we are taking out, we still have to address the annual economics, wage inflation, contractual price downs, and we also are passing through in the new year a portion of these lower material prices.

其中一部分也與我們的營收端有關，以及如何運用我們已經削減的成本。所以營收端實際進來的狀況，是決定實際獲利的重要因素。因為即使我們在降成本，我們仍必須面對年度經濟因素：薪資通膨、合約性的降價（price downs），而且在新年度我們也會把部分較低的原物料價格轉嫁（pass through）出去。

If you add up a lot of those just general economics in a normal year, that can easily be $20 million type in annual cost increases. So Tom mentioned we not only have to offset those, but more than offset them. And then in addition, the real kicker is launching the new programs and leveraging the new cost structure.

如果把這些一般性的經濟因素加總，在正常年度裡，很容易就會是每年約2,000萬美元等級的成本增加。所以如 Tom 所說，我們不只要抵銷這些，還要超額抵銷。此外，真正的關鍵在於新專案的量產導入，以及運用新的成本結構來放大效益。

Tom, anything you want to add?

Tom，你還有什麼要補充的嗎？

No, I think you said that well.

沒有，我覺得你講得很好。

Okay. I guess my next question is could you give us a little more color on your efforts to expand into a new end-market category. At this point, where do you think we are most likely to see you win something?

好的。那我下一個問題是，你能不能再多談一些你們擴展到新的終端市場類別的努力？以目前來看，你覺得我們最有可能在哪裡看到你們拿下新案子？

I assume you are referring to the coils business.

我想您指的是盤管業務。

Yes.

是的。

Okay, yes. We have a $60 million coils business today in North America. We've been in that business for decades. The market dynamics of that market are such that we like the lower capital intensity required for that. We like the ability to leverage our core competencies on heat transfer to be able to apply to that.

好的，是的。我們目前在北美有一項規模為6,000萬美元的盤管業務。我們在這個業務領域已經深耕數十年。該市場的市場動態使得我們偏好其所需資本投入較低的特性。我們也喜歡能夠運用我們在熱傳領域的核心能力，並將其應用於此。

There's some key trends going on there with conversion to aluminum products that we have a lot of knowledge in that we think we can leverage. And we've got a good manufacturing footprint structure set up now to support that with our expansion into Mexico and looking at how we can build on that globally.

那裡正在發生一些關鍵趨勢，例如轉向鋁製產品，而我們在這方面有大量知識，我們認為可以加以運用。而且我們現在也建立了良好的製造據點布局，以支援這一點；包括我們在墨西哥的擴張，以及思考如何在全球範圍內在此基礎上持續發展。

And clearly from an inorganic standpoint, it's a very interesting area for us to consider leveraging our ability, knowledge, and right to win, as we refer to it, to go that way. So that's a heavily focused area to expand on for those reasons.

而且很明顯，從非有機成長的角度來看，這對我們而言是一個非常有趣的領域，值得考慮運用我們的能力、知識，以及我們所說的「致勝權」（right to win），朝這個方向發展。因此，基於這些原因，這是一個我們高度聚焦、要擴展的領域。

Okay.

好的。

Also, just add to what Tom said, a couple of areas that are closer to us, even to our core, we are continuing to leverage the -- Tom talked quite a bit about the electric vehicles. Power generation continues to be an area where we are using our building blocks to cool down new business.

另外，補充Tom所說的，還有幾個更貼近我們、甚至更接近核心的領域，我們也在持續加以運用——Tom談了不少電動車。發電（電力生成）仍然是我們運用既有基礎能力來「冷卻」新業務的一個領域。

And then this growing power sports industry, everything from motorcycles to four-wheel off-road equipment, has been a nice opportunity for us this year as well. I would just add those to the coils/industrial opportunity.

此外，這個正在成長的動力運動（power sports）產業，從機車到四輪越野設備，今年對我們而言也帶來了不錯的機會。我只是想把這些補充到盤管／工業的機會之中。

All right. Well, I appreciate that. If I could just squeeze one more in here. Regarding the Asia segment, your incrementals were pretty great in Q4. Is this the kind of operating profit that we should expect going forward for a $23 million quarter?

好的。我很感謝這些說明。如果我可以再塞進一個問題。關於亞洲事業部，你們第四季的增量表現相當出色。對於單季2,300萬美元的水準，這是否是我們未來應該預期的那種營業利益水準？

And could you tell us what the new project launch is? Does the seasonality change at all in Asia and do you have any more launches for 2017? Thank you.

另外，你能告訴我們新專案的導入是什麼嗎？亞洲的季節性是否有任何變化？以及2017年是否還有更多導入案？謝謝。

Yes, no, I will go through the launch activity and growth efforts. As I mentioned, I and the Leadership team just came back from a trip to Asia, where we specifically concentrated on our plants in China and the growth opportunities. And we can't get capacity down there fast enough, quite frankly, with the quote activity that we are putting in place, with the quote activity that we are being faced with, and the win rate that we are winning.

是的，沒有問題，我會說明導入活動與成長推動的情況。如我提到的，我和領導團隊剛從亞洲出差回來，我們特別聚焦在中國的工廠以及成長機會。坦白說，以我們正在建立的報價活動、我們所面臨的報價需求，以及我們的得標率來看，我們在那邊的產能怎麼擴都不夠快。

So we think we made 1.5 million oil coolers this last fiscal year. That will be maturing over the next couple years. That's going to start approaching the 5 million unit number so we get a feel for what has already won and coming at us as far as new program wins.

所以我們認為上一個會計年度我們生產了150萬個機油冷卻器。這些專案在接下來幾年會逐步成熟。這將開始接近500萬台的數量，讓大家對我們已經拿下的案子，以及迎面而來的新專案得標情況有個概念。

The other thing is, as I mentioned in the Asia region specifically, their focus on emission strategies and coming up to developed country standards as far as emission standards is providing a lot of opportunities for things like boosted engines, oil coolers, liquid charge-air coolers, EGR coolers are going to be a very key product in the future that we are seeing benefit from.

另外一點是，如我提到的，在亞洲地區特別是，他們對排放策略的重視，以及排放標準朝已開發國家水準提升，正為增壓引擎、機油冷卻器、液冷式增壓進氣冷卻器（liquid charge-air coolers）、EGR冷卻器等產品帶來大量機會；我們看到EGR冷卻器將會是未來非常關鍵的產品，而我們也正從中受益。

And that we are going to utilize this joint venture we just announced last quarter. And we are just starting to visit that. It's going to provide and allow opportunities with bringing new technology to supply EGR capacity and oil cooler capacity into that as well. So we are very excited about Asia growth and China specifically for those reasons.

而我們也將運用我們在上一季剛宣布的合資企業。我們才剛開始與其接觸與拜訪。它將提供並促成機會，透過導入新技術，來供應EGR產能以及機油冷卻器產能。因此，基於這些原因，我們對亞洲的成長、尤其是中國的成長感到非常振奮。

That's automotive. And of course we have a great installed base for the off-highway market, which is down, but we think it's bottomed. But again, anything that comes back, we're going to convert real well on that.

以上是汽車領域。當然，我們在非公路（off-highway）市場也有很好的既有裝機基礎；該市場目前仍在低迷，但我們認為已經觸底。不過同樣地，只要有任何回升，我們都會有很好的轉化表現。

In commercial truck expansion, we won a truck program, I think we announced last quarter or the quarter before. Again, domestic customers for us are something we really think we're going to benefit from with our joint venture relationship that brings a lot of relationship improvement insight to our team in Asia. So those are the key reasons we think we are going to really see that growth.

在商用卡車擴張方面，我們拿下了一個卡車專案，我想我們在上一季或前一季已經宣布過。同樣地，對我們而言，國內客戶是我們認為將能受益的一塊，因為我們的合資關係為我們在亞洲的團隊帶來了許多關係改善方面的洞見。因此，這些是我們認為將真正看到成長的關鍵原因。

Yes, don't really see anything in the way seasonality. And to the credit of the team in Asia, we have talked for quite a while and on these calls about a breakeven level at $85 million. And really happy that this segment on the full year earned a $1.2 million operating profit on $79 million.

是的，並沒有真的看到任何季節性的影響。而且要歸功於亞洲團隊，我們在這些電話會議上談了很久，提到損益兩平水準在8,500萬美元。我們也非常高興，這個事業部在全年79百萬美元營收下，實現了120萬美元的營業利益。

And they'll probably get nervous by me saying it, but we do expect the margins to continue going forward. So we are expecting good things out of the Asia region in the next year.

他們可能會因為我這麼說而緊張，但我們確實預期未來的利潤率會持續。因此，我們預期明年亞洲地區會有不錯的表現。

All right. Well, I appreciate the color. Thank you.

好的。我很感謝這些補充說明。謝謝。

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

我這邊顯示目前沒有進一步的問題。現在我想把電話會議交回給Kathleen Powers。

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

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。

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program and you may now disconnect. Everyone have a great day.

各位女士、先生，感謝各位參與今天的會議。本次議程到此結束，您現在可以掛線。祝各位有美好的一天。