Modine Manufacturing Co (MOD) 2024 Q3 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to Modine's Third Quarter Fiscal 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Kathleen Powers, Vice President, Treasurer and Investor Relations.

早安，女士們、先生們，歡迎參加 Modine 2024 年第三季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。現在我想將會議交給東道主、財務主管和投資者關係副總裁 Kathleen Powers 女士。

Good morning, and thank you for joining our conference call to discuss Modine’s third quarter fiscal 2024 results. I’m joined on this call by Neil Brinker, our President and Chief Executive Officer; and Mick Lucareli, our Executive Vice President and Chief Financial Officer. We’ll be using slides with today’s presentation, which can be accessed either through the webcast link or by accessing the PDF file posted on the Investor Relations section of our website modine.com.

早安，感謝您參加我們的電話會議，討論 Modine 2024 財年第三季的業績。我們的總裁兼執行長 Neil Brinker 也加入了本次電話會議。以及我們的執行副總裁兼財務長 Mick Lucareli。我們將在今天的簡報中使用幻燈片，可以透過網路廣播連結或造訪我們網站 modine.com 投資者關係部分上發布的 PDF 檔案來存取該簡報。

On slide three is our notice regarding forward-looking statements. This call will contain forward-looking statements as outlined in our earnings release as well as in our company’s filings with the Securities and Exchange Commission.

第三張投影片是我們有關前瞻性陳述的通知。本次電話會議將包含我們的收益發布以及我們公司向美國證券交易委員會提交的文件中概述的前瞻性陳述。

With that, it’s my pleasure to turn the call over to Neil.

至此，我很高興將電話轉給尼爾。

Thank you, Kathy, and good morning, everyone. I'm pleased to report another successful quarter highlighted by very strong margin expansion and earnings growth. Our results this quarter further demonstrate our ability to improve our earnings profile as we shift towards faster-growing and higher-margin businesses.

謝謝你，凱西，大家早安。我很高興地報告又一個成功的季度，其特點是非常強勁的利潤擴張和盈利增長。我們本季的業績進一步證明，隨著我們轉向成長更快、利潤率更高的業務，我們有能力改善獲利狀況。

Despite all of our early success, I continue to believe that we are in the early stages of our transformation and are just beginning to realize the opportunities we've identified in each of our core market verticals. In many cases, we are recommitting our focus on operational excellence, adding additional resources for lean manufacturing and supply chain to improve productivity, quality, and cost realization. Coupled with the success of our commercial team, this approach, enhanced by 80/20, will help to support our ongoing progress towards our goals.

儘管我們取得了早期的成功，但我仍然相信我們正處於轉型的早期階段，並且剛開始認識到我們在每個核心垂直市場中發現的機會。在許多情況下，我們重新致力於卓越運營，為精益製造和供應鏈增加額外資源，以提高生產力、品質和成本實現。加上我們商業團隊的成功，這種經過 80/20 增強的方法將有助於支持我們不斷朝著目標邁進。

Overall, on the M&A front, we feel very good about the pipeline of opportunities available to us. We are not focusing on large transformational deals, but instead are looking for bolt-on acquisitions that bring complementary products and technologies to our key growth verticals.

總體而言，在併購方面，我們對可用的機會管道感到非常滿意。我們並非關注大型轉型交易，而是尋求補強收購，為我們的關鍵成長垂直領域帶來互補的產品和技術。

Our recent acquisitions of Napps Technology and the IP and select assets of TMGcore are perfect examples of this approach. We benefit from a very strong balance sheet, which will help support our inorganic growth targets as we remain vigilant in our search for attractive opportunities that fit our focus areas.

我們最近收購的 Napps Technology 以及 TMGcore 的智慧財產權和精選資產就是這種方法的完美例子。我們受益於非常強勁的資產負債表，這將有助於支持我們的無機成長目標，因為我們在尋找適合我們重點領域的有吸引力的機會時保持警惕。

Mick will go over our third quarter financial results and provide an update to our full year outlook, but first I'd like to provide some high-level updates on each segment. Please turn to slide five.

米克將回顧我們第三季的財務業績，並提供我們全年展望的最新情況，但首先我想提供每個細分市場的一些高級更新。請翻到第五張投影片。

Starting with our Climate Solutions segment, we observed many of the same trends we saw in the second quarter. Our data center business remains very strong, with revenue up 34% compared to the prior year. Meanwhile, certain markets for our heat transfer products remain soft, and our revenues continue to be strategically impacted by the exit of low-margin businesses in connection with the 80/20 initiatives.

從我們的氣候解決方案部門開始，我們觀察到許多與第二季相同的趨勢。我們的資料中心業務仍然非常強勁，營收比上年成長 34%。同時，我們的傳熱產品的某些市場仍然疲軟，我們的收入繼續受到與 80/20 計劃相關的低利潤業務退出的策略影響。

Earlier this month, we shared some very exciting news about the purchase of the IP and select assets of TMGcore, a specialist in single-and two-phase liquid immersion cooling technology. This expands our global data center product offering, allowing us to support the future requirements of our customers as they manage the demands of high-density computing. Our investment in immersion cooling technology, along with the internal development of a cooling distribution unit, or CDU, allows us to expand our product portfolio to address technology gaps while accelerating our ability to be prepared for the technology needs of the future.

本月早些時候，我們分享了一些關於購買 TMGcore 的 IP 和精選資產的令人興奮的消息，TMGcore 是單相和兩相液浸冷卻技術的專家。這擴展了我們的全球資料中心產品供應，使我們能夠在客戶管理高密度運算的需求時支援他們的未來需求。我們對浸入式冷卻技術的投資，以及冷卻分配單元 (CDU) 的內部開發，使我們能夠擴展我們的產品組合，以解決技術差距，同時加快我們為未來技術需求做好準備的能力。

Further, this new technology will complement our existing high-performance products that maintain the temperature in the hall and add additional opportunities for the development and integration of a complete hybrid data center cooling system.

此外，這項新技術將補充我們現有的維持大廳溫度的高性能產品，並為開發和整合完整的混合資料中心冷卻系統增加更多機會。

We believe that the best strategy is to have multiple solutions with a complete suite of products that can be customized and optimized to the customer's needs. I'm very excited for the data center team to begin working on commercializing this technology in support of our co-location and hyperscaler data center customers.

我們相信，最好的策略是擁有多種解決方案和一整套產品，可以根據客戶的需求進行客製化和最佳化。我很高興資料中心團隊開始致力於將這項技術商業化，以支援我們的主機代管和超大規模資料中心客戶。

In further recognition of the expected growth in our data center business, we are transitioning our existing Grenada, Mississippi manufacturing plant to be a data center facility, similar to what we did in Europe at our Spain and UK facilities. Overall, I'm extremely pleased with the performance of the Climate Solutions segment. We are making the right investments to ensure that our data center business continues to grow and are delivering strong year-over-year earnings improvements, despite challenging markets for the heat transfer and heating products.

為了進一步認識到我們資料中心業務的預期成長，我們正在將現有的密西西比州格林納達製造工廠轉變為資料中心設施，類似於我們在歐洲的西班牙和英國設施。總的來說，我對氣候解決方案部門的表現非常滿意。儘管傳熱和加熱產品市場充滿挑戰，但我們正在進行正確的投資，以確保我們的資料中心業務持續成長，並實現同比強勁的獲利成長。

Please turn to slide six. Turning to our PT segment, while our advanced solutions business continues to perform well, we have seen some leveling of the volumes in our air and liquid cooled businesses, which is in line with our expectations. Despite flat revenues, our margins continue to benefit from 80/20 initiatives focused on commercial improvements and productivity enhancements.

請翻到第六張幻燈片。談到我們的 PT 部門，雖然我們的先進解決方案業務繼續表現良好，但我們的空氣和液體冷卻業務的銷售量有所穩定，這符合我們的預期。儘管收入持平，但我們的利潤繼續受益於專注於商業改進和生產力提高的 80/20 計劃。

In addition, our PT segment also made some important announcements this quarter. First off, our EV systems business announced an important partnership for our Evantage thermal management systems with Bosch Rexroth, a recognized leader in drive and controls technologies. Given Bosch Rexroth's strong market position, we are very excited about this opportunity to partner on electrified solutions for the off-highway market. This partnership is still in development phase, but is expected to provide additional growth opportunities in the future.

此外，我們的 PT 部門本季也發布了一些重要公告。首先，我們的電動車系統業務部門宣布與驅動和控制技術領域公認的領導者博世力士樂就我們的 Evantage 熱管理系統建立重要合作夥伴關係。鑑於博世力士樂強大的市場地位，我們非常高興有機會與非公路市場的電氣化解決方案合作。該合作夥伴關係仍處於發展階段，但預計未來將提供額外的成長機會。

At this point, the team has booked 31 program wins, including four additional wins since the end of last quarter, equating to a projected annual revenue run rate of over $160 million of program maturity. And in addition, the team was also recently recognized by Frost & Sullivan with its 2023 North American Product Innovation Award. This award recognizes our commitment to quality, reliability, and customer service, while also helping our customers achieve their sustainability goals by accelerating decarbonization.

截至目前，該團隊已贏得 31 個項目，其中包括自上季末以來的另外 4 個項目，相當於項目成熟期的預計年收入運行率超過 1.6 億美元。此外，該團隊最近還獲得了Frost & Sullivan頒發的2023年北美產品創新獎。該獎項認可了我們對品質、可靠性和客戶服務的承諾，同時也幫助我們的客戶透過加速脫碳來實現其永續發展目標。

I'm so proud of what this team has been able to accomplish, and with the previously announced capacity expansions in the US and Europe, we have ensured that we have the capacity to meet our commitments and future goals.

我為這個團隊所取得的成就感到非常自豪，並且透過先前宣布的美國和歐洲產能擴張，我們確保我們有能力實現我們的承諾和未來目標。

Now, I'd like to pivot to another growth area in the PT segment, our GenSet business. Stationary power is a market ripe for growth with ever expanding needs for energy security for critical applications such as data centers and healthcare facilities. As we recognize the growth potential of this market, we established a dedicated team devoted to understanding the market and building this business. We are very encouraged by our early progress and expect this to be a key growth area for Modine in the future.

現在，我想轉向 PT 領域的另一個成長領域，也就是我們的發電機組業務。固定電源是一個成長成熟的市場，資料中心和醫療設施等關鍵應用對能源安全的需求不斷擴大。當我們認識到這個市場的成長潛力時，我們建立了一個專門的團隊，致力於了解市場並建立這項業務。我們對我們的早期進展感到非常鼓舞，並預計這將成為 Modine 未來的關鍵成長領域。

Last quarter, we announced that we had completed the divestitures of our German operations that supported the European light vehicle market. We have been transparent about our intentions to exit certain product lines that don't meet our margin targets and these actions were in line with that strategy.

上季度，我們宣布已完成對支持歐洲輕型汽車市場的德國業務的剝離。我們一直對退出某些不符合利潤目標的產品線的意圖保持透明，這些行動符合該策略。

We also mentioned that we would need to reduce certain overhead costs that have historically supported these markets. And we're taking action to address these requirements by consolidating our technical services capabilities. These actions are in line with our broader initiative of focusing resources on opportunities that carry higher growth profiles and more attractive returns through both divestitures and acquisitions.

我們也提到，我們需要減少歷史上支持這些市場的某些間接費用。我們正在採取行動，透過整合我們的技術服務能力來滿足這些要求。這些行動符合我們更廣泛的倡議，即透過資產剝離和收購，將資源集中到那些具有更高成長前景和更有吸引力回報的機會上。

I'm very pleased with our progress and our performance this quarter. Our team is operating at a very high level and we are not only executing on our strategies, but are putting in the plans in place to reach our next set of goals.

我對我們本季的進展和表現感到非常滿意。我們的團隊正在以非常高的水平運作，我們不僅執行我們的策略，而且正在製定計劃以實現我們的下一組目標。

With that, I'll turn the call over to Mick.

這樣，我就把電話轉給米克。

Thanks Neil and good morning, everyone. Please turn to slide seven to review the segment results.

謝謝尼爾，大家早安。請翻到第七張幻燈片來查看細分結果。

Climate Solutions completed another excellent quarter, driven by a 29% improvement in adjusted EBITDA. Revenue was down slightly due to a decrease in heat transfer products and mostly offset by strong growth in data centers and a favorable FX impact.

在調整後 EBITDA 提高 29% 的推動下，Climate Solutions 又完成了一個出色的季度業績。由於傳熱產品的減少，收入略有下降，但大部分被資料中心的強勁成長和有利的外匯影響所抵消。

As discussed over the last two quarters, we've experienced some reductions in several markets served by heat transfer products. Based on these trends, we lowered our full year outlook for this product group.

正如過去兩個季度所討論的，我們在傳熱產品所服務的幾個市場中經歷了一些減少。基於這些趨勢，我們降低了該產品組的全年預期。

The adjustment is primarily due to lower demand within commercial and residential HVAC markets, including European heat pumps, along with 80/20 initiatives. Data center sales grew 34% or $15 million driven by strong demand from both hyperscale and co-location customers. Our data center outlook remains quite strong while anticipating a very strong fourth quarter and full year growth in excess of 60%.

此次調整主要是由於商業和住宅 HVAC 市場（包括歐洲熱泵）需求下降以及 80/20 計劃所致。在超大規模和託管客戶的強勁需求的推動下，資料中心銷售額成長了 34%，即 1500 萬美元。我們的資料中心前景仍然相當強勁，同時預計第四季度和全年的成長將非常強勁，超過 60%。

HVAC&R sales were higher by 2% or $2 million driven by an increase in IAQ sales and the acquisition of Napps Technology that we completed last July, along with higher sales in power industrial coolers.

由於 IAQ 銷售額的成長和我們去年 7 月完成的 Napps Technology 收購，以及電力工業冷卻器銷售額的增加，HVAC&R 銷售額成長了 2% 或 200 萬美元。

Our heating sales were somewhat lower than expected as the overall market remains depressed from previous levels. We expect this softness to continue for at least another quarter, but the market data is indicating a potential bottom and we believe it will improve through calendar 2024.

由於整體市場仍較先前水準低迷，我們的暖氣銷售量略低於預期。我們預計這種疲軟狀態將至少持續一個季度，但市場數據表明可能觸底，我們相信這種情況將在 2024 年有所改善。

We're very pleased with the Climate Solutions strong earnings conversion, resulting in a 470 basis point margin improvement to 18.9%. Our 80/20 discipline is at the heart of these quarterly margin improvements. At a segment level, we continue to prioritize earnings and margins improvement over revenue growth.

我們對氣候解決方案強勁的獲利轉換感到非常滿意，利潤率提高了 470 個基點，達到 18.9%。我們的 80/20 原則是這些季度利潤率改善的核心。在細分市場層面，我們持續將獲利和利潤率的改善置於收入成長之上。

To wrap up on Climate Solutions, we remain cautious in a few markets for HVAC and heat transfer products businesses, but fully anticipate further year-over-year improvements next quarter to finish a great year.

最後，我們對暖通空調和傳熱產品業務的一些市場保持謹慎態度，但充分預計下個季度將進一步實現同比改善，以完成美好的一年。

Please turn to slide eight. Performance Technologies also had a great quarter with a 52% increase in adjusted EBITDA. Revenue increased 2% driven by higher average selling prices and a favorable FX impact. Sales volume was down in the quarter, partly driven by the recent German divestitures, which negatively impacted revenue by $12 million. Excluding the impact of the divestitures, our sales would have improved by 6%.

請翻到第八張幻燈片。Performance Technologies 的季度業績也很出色，調整後 EBITDA 成長了 52%。由於平均銷售價格上漲和有利的外匯影響，收入增加了 2%。本季銷售下降，部分原因是最近德國的資產剝離，對收入產生了 1,200 萬美元的負面影響。如果排除資產剝離的影響，我們的銷售額將提高 6%。

Performance Technologies remains focused on driving rapid earnings growth, and that was very evident again this quarter. As I previously explained for Climate Solutions, the 80/20 efforts in Performance Technologies are focused on improving earnings and margins versus segment revenue growth.

Performance Technologies 仍專注於推動獲利快速成長，這在本季再次表現得非常明顯。正如我之前在氣候解決方案中所解釋的那樣，性能技術領域的 80/20 工作重點是提高收益和利潤率，以提高部門收入的成長。

Advanced solutions sales were up 27% or $10 million with continued growth of EV systems and component sales, including higher sales to commercial and specialty vehicles along with higher coding sales. Liquid cooled application sales decreased 4% or $5 million, mainly due to the divestitures and lower automotive demand.

隨著電動車系統和零件銷售的持續成長，包括商用車和特種車輛銷售額的增加以及編碼銷售額的增加，高級解決方案銷售額增長了 27%，即 1000 萬美元。液冷應用銷售額下降 4%，即 500 萬美元，主要是由於資產剝離和汽車需求下降。

Lastly, air-cooled application sales grew 2% or $3 million, primarily due to higher sales to off-highway and GenSet customers. The growth was partially offset by lower automotive sales, also related to the German divestitures.

最後，風冷應用銷售額成長了 2%，即 300 萬美元，主要是由於非公路和發電機組客戶的銷售額增加。這一增長被汽車銷售下降部分抵消，這也與德國資產剝離有關。

Much like Climate Solutions, Performance Technologies' earnings conversion was excellent, resulting in a 12% adjusted EBITDA margin and a 390 basis point improvement. For the balance of the year, we anticipate ongoing 80/20 progress and further year-over-year improvement, with a sequential earnings increase in Q4.

與氣候解決方案公司非常相似，Performance Technologies 的獲利轉換非常出色，調整後的 EBITDA 利潤率提高了 12%，提高了 390 個基點。對於今年餘下的時間，我們預計將持續取得 80/20 的進展，並進一步實現同比改善，第四季度的盈利將連續增長。

Now let's review the total company results. Please turn to slide nine. Third quarter sales were relatively flat as we continue to see rapid growth in our targeted growth areas, such as data centers and advanced solutions. These were somewhat offset by planned 80/20 activities and divestitures, along with temporary weakness in select HVAC markets. Excluding the impact of the divestitures in Germany, sales were up 3%. Our transformation initiatives are clearly benefiting the gross margin, which improved 530 basis points.

現在讓我們回顧一下公司的整體表現。請翻到幻燈片九。第三季的銷售額相對持平，因為我們繼續看到資料中心和先進解決方案等目標成長領域的快速成長。這些在一定程度上被計劃中的 80/20 活動和資產剝離以及特定暖通空調市場的暫時疲軟所抵消。排除德國資產剝離的影響，銷售額成長了 3%。我們的轉型措施明顯有利於毛利率，毛利率提高了 530 個基點。

SG&A increased $10 million, driven primarily by higher employee compensation expenses, including incentive compensation. I'm happy to report that adjusted EBITDA was very strong again this quarter, with an increase of 39% or $21 million. This equates to an adjusted EBITDA margin of 13.2% or 370 basis point improvement from the prior year. And this now represents the eighth consecutive quarter of year-over-year margin improvement.

SG&A 增加了 1000 萬美元，主要是由於員工薪酬支出（包括激勵薪酬）增加。我很高興地向大家報告，本季調整後 EBITDA 再次表現強勁，成長了 39%，即 2,100 萬美元。這相當於調整後的 EBITDA 利潤率為 13.2%，比前一年提高了 370 個基點。現在，這代表利潤率連續第八個季度同比改善。

In addition, adjusted earnings per share was $0.74, 54% higher than the prior year. We're very pleased with another exceptional quarter, resulting in a year-to-date EBITDA margin that is above our targeted fiscal 2024 transformation range.

此外，調整後每股收益為 0.74 美元，比上年增長 54%。我們對另一個出色的季度感到非常滿意，今年迄今的 EBITDA 利潤率高於我們的 2024 財年轉型目標範圍。

Now moving to cash flow metrics, please turn to slide 10. We generated $47 million of free cash flow in the third quarter, which puts our year-to-date free cash flow at $131 million. This represents a significant improvement compared to $33 million generated in the prior year.

現在轉向現金流量指標，請前往投影片 10。第三季我們產生了 4,700 萬美元的自由現金流，這使得我們年初至今的自由現金流達到 1.31 億美元。與前一年的 3300 萬美元相比，這是一個顯著的進步。

Net debt of $184 million was $102 million lower than the prior fiscal year-end, and $39 million lower from the last quarter. Also during the quarter, we repurchased 100,000 shares.

淨債務為 1.84 億美元，比上一財年末減少 1.02 億美元，比上一季減少 3,900 萬美元。同樣在本季度，我們回購了 100,000 股股票。

For the fiscal year, we're well on track to deliver our improved cash flow conversion targets, driven by higher earnings and a continued focus on working capital. We maintain a relatively low level of debt, supporting a strong balance sheet, and ready to support both organic growth and acquisition initiatives.

在本財年，在獲利增加和持續關注營運資本的推動下，我們有望實現改善的現金流轉換目標。我們保持相對較低的債務水平，支持強勁的資產負債表，並準備支持有機成長和收購措施。

Now let's turn to slide 11 for our fiscal 2024 outlook. As announced in the press release, we're raising our full year earnings outlook for fiscal 2024. While raising earnings, we're also slightly lowered our full year sales outlook to recognize the impact of the European divestitures in Q3, along with lower expectations for our heating and HTP product sales. In the Climate Solutions segment, we continue to expect data center revenue growth of 60% to 70%, with the forecast trending towards the high end of this range.

現在讓我們轉向投影片 11，了解我們的 2024 財年展望。正如新聞稿中所宣布的，我們上調了 2024 財年全年獲利預期。在提高收益的同時，我們也小幅下調了全年銷售預期，以認識到第三季度歐洲資產剝離的影響，以及對供暖和 HTP 產品銷售的預期降低。在氣候解決方案領域，我們繼續預期資料中心收入將成長 60% 至 70%，並且預測趨勢將趨於該範圍的高端。

Moving to HVAC&R, we expect revenue to be flat, slightly lowering the range from the low single digits last quarter. This is mostly due to a slower recovery in heating than originally anticipated.

轉向 HVAC&R，我們預計收入將持平，較上季度的低個位數略有下降。這主要是由於加熱恢復速度比最初預期的要慢。

With regards to heat transfer products, we expect sales to decline in the range of 10% to 15%, which is a reduction from our previous guidance. This is primarily due to the ongoing weakness in a few end markets, especially the residential and commercial refrigeration applications and the European heat pump market.

對於熱轉印產品，我們預計銷售額將下降 10% 至 15%，低於我們先前的指引。這主要是由於一些終端市場的持續疲軟，特別是住宅和商業冷凍應用以及歐洲熱泵市場。

For Performance Technologies, we expect advanced solutions to grow in the 25% to 35% range, which did not change from the last quarter. This growth is driven by program launches and continued demand for EV systems and components.

對於效能技術，我們預計先進解決方案將成長 25% 至 35%，與上季相比沒有變化。這一增長是由項目啟動以及對電動車系統和零件的持續需求所推動的。

We're holding the outlook for liquid and air-cooled products, but we'll be trending towards the lower end after adjusting for the recent divestitures.

我們對液體和風冷產品的前景持樂觀態度，但在對最近的資產剝離進行調整後，我們將趨向於低端產品。

From an earnings perspective, I'm pleased to report that we're once again raising our adjusted EBITDA outlook for the year. We now expect our fiscal 2024 adjusted EBITDA to be in the range of $305 million to $313 million, representing an increase of 44% to 48%.

從獲利角度來看，我很高興地報告，我們再次上調了今年調整後的 EBITDA 前景。我們現在預計 2024 財年調整後 EBITDA 將在 3.05 億美元至 3.13 億美元之間，增幅為 44% 至 48%。

In addition, we anticipate good free cash flow this fiscal year, resulting in an improved ratio to sales, and capital expenditures are expected to be in the range of $70 million. Other assumptions, including interest, taxes, depreciation, and amortization are included in appendices attached to this presentation, and the press release.

此外，我們預期本財年自由現金流良好，進而提高銷售比率，資本支出預計約 7,000 萬美元。其他假設，包括利息、稅金、折舊和攤銷，均包含在本簡報和新聞稿所附的附錄中。

To wrap up, we're extremely pleased with the results from the third quarter, while we maintain momentum towards our interim and long-term financial targets.

總而言之，我們對第三季的業績非常滿意，同時我們保持了實現中期和長期財務目標的勢頭。

With that, Neil and I will take your questions.

接下來，尼爾和我將回答你們的問題。

(Operator Instructions) Matt Summerville, D.A. Davidson.

（操作員說明）Matt Summerville，D.A.戴維森。

Thanks. Morning. A couple of questions. First, how much do you feel like you're seeing incremental market weakness in the areas you highlighted in Climate versus more of a function of just 80/20 making its way into the business? And along these lines, if the market headwinds you see today are there -- are going to be prevalent in 2025, is there any reason that shifts the momentum at all with respect to the massive amount of EBITDA margin and EBITDA dollar improvement you're generating across Modine?

謝謝。早晨。有幾個問題。首先，您認為您在氣候中強調的領域中看到了漸進的市場疲軟，而不是更多只是 80/20 的功能進入業務？沿著這些思路，如果您今天看到的市場逆風確實存在，並且將在 2025 年普遍存在，那麼是否有任何原因會完全改變 EBITDA 利潤率和 EBITDA 美元改善的勢頭？

Yeah. Good morning, Matt. It's Mick. Let me give you a couple comments on revenue, and then I'll turn it over to Neil to add some more color just around the 80/20 impact because I know there were some questions just around our revenue adjustments.

是的。早安，馬特。是米克。讓我給您一些關於收入的評論，然後我會將其交給 Neil，以圍繞 80/20 影響添加更多色彩，因為我知道圍繞我們的收入調整存在一些問題。

First, I just want to be clear that our revenue adjustments aren't solely tied to market softness. There's clearly an 80/20 element in there. So, last quarter, we had the automotive divestitures closed right at our quarter end on the 31st, and as we analyzed that revenue impact at that point, we were estimating we're running a little bit below the midpoint of the range last quarter. And as we announced last night, we're raising the earnings outlook and adjusting the overall revenue range down a little bit. That's about that 2% adjustment to our sales outlook for the year, about $50 million. And then that's in three areas, and we'll get to your question, right? So, one of them is in heat transfer products, we lowered our outlook, and that's a combination of market and 80/20 activities. And again, I'll let Neil comment in a second.

首先，我想澄清的是，我們的收入調整不僅與市場疲軟有關。那裡顯然有一個 80/20 的元素。因此，上個季度，我們在 31 日季度末結束了汽車資產剝離，當我們分析當時的收入影響時，我們估計我們的運行速度略低於上個季度範圍的中點。正如我們昨晚宣布的那樣，我們將提高獲利前景，並略微下調整體收入範圍。這相當於我們今年銷售前景的 2% 調整，約 5,000 萬美元。然後是三個方面，我們會回答你的問題，對吧？因此，其中之一是傳熱產品，我們降低了預期，這是市場和 80/20 活動的結合。再說一遍，我稍後會讓尼爾發表評論。

The second one, we talked about air and liquid in the divestitures. So, we're running towards the lower end of our air and liquid range combined by adjusting and truing up the full year outlook for the closing of the deal, the divestitures. And we've seen some softness on the automotive side across the globe, especially on automotive EV, both ICE and EV vehicles. But that's strategically okay with us and also tied to 80/20.

第二個，我們討論了資產剝離中的空氣和液體。因此，透過調整和調整完成交易和資產剝離的全年前景，我們正朝著空氣和液體範圍的下限邁進。我們看到全球汽車市場出現了一些疲軟，尤其是汽車電動車，包括內燃機汽車和電動車。但從戰略上來說，這對我們來說是可以的，而且也與 80/20 相關。

And then last, we talked about HVAC&R, and there I want to be clear, it's really the heating market has been slower to recover. It was basically relatively flat. So, we're not seeing it getting worse, and the industry data is showing that we seem to be turning a quarter, but we thought it would recover at a little bit faster rate. So, again, the way we sit today, Matt, we're running about the middle of the revenue range, about the midpoint that we put out last night. And again, I just want to highlight it's really a combination of the market adjustments and 80/20 activities. And that's really what's allowed us to drive the -- a key driver to our rapid earnings growth and margin improvements.

最後，我們討論了 HVAC&R，我想澄清的是，暖氣市場的復甦速度確實較慢。基本上是比較平坦的。因此，我們沒有看到情況變得更糟，行業數據顯示我們似乎即將迎來一個季度，但我們認為它會以更快的速度恢復。所以，馬特，我們今天的立場是，我們的收入範圍大約在中間，大約是我們昨晚公佈的中點。再次強調，我只是想強調這實際上是市場調整和 80/20 活動的結合。這確實是我們能夠推動獲利快速成長和利潤率提高的關鍵驅動力。

So, just maybe before we wrap it up, Neil, maybe a couple comments around the 80/20 impact.

因此，尼爾，在我們結束之前，也許可以就 80/20 的影響發表一些評論。

Yeah. Matt, this is Neil. Thanks for the question. That's a good summary for Mick in terms of how we're thinking about it, especially when we think about heat transfer products. And we see some softening in some markets that we potentially would consider exiting. We accelerate those opportunities so we can continue to drive margin expansion and profitability in that business.

是的。馬特，這是尼爾。謝謝你的提問。對於 Mick 來說，這是一個很好的總結，說明了我們的想法，特別是當我們考慮傳熱產品時。我們看到一些市場出現疲軟，我們可能會考慮退出。我們加速這些機會，以便我們能夠繼續推動該業務的利潤率擴張和獲利能力。

HTP is a big business. Not all of it is ready for growth. It's still going through 80/20 activity. We've isolated some areas in HTP where we've found favorable markets and trends in customers that -- we're preparing strategic initiatives to grow that business in the next fiscal year. But there's still a lot of work to clean up with the tens of thousands of SKUs and customers that we serve. So, when we see an opportunity to accelerate that through 80/20 because of market softness, we react pretty quick.

HTP 是一門大生意。並非所有這些都已準備好成長。它仍在經歷 80/20 活動。我們在 HTP 中隔離了一些領域，在這些領域中我們發現了有利的市場和客戶趨勢——我們正在準備策略舉措，以在下一財年發展該業務。但對於我們所服務的數以萬計的 SKU 和客戶來說，仍有大量工作需要清理。因此，當我們看到由於市場疲軟而有機會將這一速度加速到 80/20 時，我們很快就會做出反應。

Thanks for that, color. And then as my follow-up, just on the data center side of things, Neil, can you talk about kind of what the go-forward funnel looks like? How much visibility you have looking ahead into fiscal 2025 in that business? And when would you expect to start to see a little bit of liquid-related activity start to creep in?

謝謝你，顏色。然後，作為我的後續行動，就資料中心方面而言，尼爾，您能談談前進漏斗是什麼樣的嗎？您對 2025 財年該業務的了解程度如何？您預計什麼時候會開始看到一些與液體相關的活動開始蔓延？

Yeah. Great question, Matt. So, we've got visibility with some of our customers out as far as two years. I'd say on average, it's between 12 and 18 months. Funnel continues to grow. It's been growing at the rates that we'd assumed it would grow at, hence the revenue targets that we've been pretty public about, projections that we've been public about. So, we're happy with where we're at working with our customers in both North America as well as in Europe on co-locations and hyperscalers.

是的。好問題，馬特。因此，我們已經在一些客戶中獲得了長達兩年的知名度。我想說平均來說是12到18個月。漏斗持續成長。它一直在以我們假設的速度成長，因此我們一直在公開談論收入目標和預測。因此，我們對與北美和歐洲的客戶在託管和超大規模方面的合作感到滿意。

Relative to liquid, we had the acquisition, a technology acquisition of assets, IP and assets, which is going to really help us with our product portfolio and making sure that we have the most current technologies in the liquid side, and that's immersion. And then we announced we were going to go into development with a couple customers around our cooling distribution unit, or CDU, which is direct-to-chip liquid cooling. And we expect to be into prototype in the next quarter or two on the CDU with a couple customers. And if their markets and their end customers have demand for high-performance computing, they'll have a solution in place, assuming we pass the validation and testing with that customer. So, CDU's direct-to-chip, I think, is closer to generating revenue than immersion cooling is at this time.

相對於流動性，我們進行了收購，即對資產、智慧財產權和資產的技術收購，這將真正幫助我們的產品組合，並確保我們在流動性方面擁有最新的技術，這就是沉浸感。然後我們宣布我們將與幾個客戶一起圍繞我們的冷卻分配單元（CDU）進行開發，這是直接到晶片的液體冷卻。我們預計將在接下來的一兩個季度與幾位客戶一起在 CDU 上進行原型設計。如果他們的市場和最終客戶對高效能運算有需求，假設我們通過了該客戶的驗證和測試，他們就會有適當的解決方案。因此，我認為，CDU 的直接晶片技術目前比浸入式冷卻更接近創收。

But having the immersion cooling allows us to be part of conversations around next-generation data centers that we weren't a part of prior to the acquisition of assets from TMGcore.

但是，擁有浸沒式冷卻技術使我們能夠參與下一代資料中心的討論，而在從 TMGcore 收購資產之前我們並未參與其中。

Understood. I'll get back in queue. Thank you.

明白了。我會回到隊列中。謝謝。

Chris Moore, CJS Securities.

克里斯摩爾，CJS 證券。

Hey, good morning, guys. Thanks for taking a couple questions. Maybe we'll just start with margins. It looks like fiscal 2024 operating margin will be in 10-plus range, Q4 being a little bit lower than the first three quarters were adjusted in that six, seven range. I realize you're not giving guidance for 2025, but what are the puts and takes to Modine being able to match or perhaps improve on the 2024 margins in 2025?

嘿，早上好，夥計們。感謝您提出幾個問題。也許我們會從利潤開始。看起來 2024 財年的營業利潤率將在 10 以上的範圍內，第四季的營業利潤率略低於前三個季度調整後的 6、7 個範圍。我知道您沒有給出 2025 年的指導，但要讓 Modine 在 2025 年能夠達到或可能提高 2024 年的利潤率，需要採取哪些措施？

Yeah. Hi, Chris. It's Mick here. So, I'll just -- I'll talk EBITDA margin, but same drivers, right? And I'd say first, we'll wrap up this year as a company of well above the target we set out. We wanted to be in the 10% to 12% range, and we're clearly trending between the 12% and 13%. So, we're ahead of schedule, but that doesn't mean we're not going -- our plan is fully to drive further margin improvement next year.

是的。嗨，克里斯。這是米克。所以，我會談論 EBITDA 利潤率，但驅動因素相同，對嗎？我想說，首先，我們今年的業績將遠高於我們設定的目標。我們希望保持在 10% 到 12% 的範圍內，而且我們的趨勢顯然在 12% 到 13% 之間。所以，我們提前了，但這並不意味著我們不會——我們的計劃是全力推動明年利潤率的進一步提高。

And to your question, where that comes from, a couple elements. On the growth side and mix, we still anticipate growth in those targeted areas that we've been through, whether that's on the GenSet side in PT or data centers or IAQ, EV systems. We see growth, and that's a good margin and earnings mix up for us.

對於你的問題，它從何而來，有幾個要素。在成長方面和組合方面，我們仍然預期我們已經經歷過的那些目標領域會出現成長，無論是在 PT、資料中心或 IAQ、EV 系統的發電機組方面。我們看到了成長，這對我們來說是一個很好的利潤率和收益組合。

And then, if you go through where we're at on our 80/20 journey, early days, there's a lot of simplifying the business, looking at pricing, and there's still elements of that for us. But also, then move into a heavy focus on operational and productivity, right? Leaning out and getting the benefits of those things where you simplified your businesses. So, it will be kind of like this year and where we started the journey. Some of our businesses, we are not going to worry about the top line. We're going to drive earnings and margins through PLS - product line simplification 80/20, while continuing to accelerate growth in the targeted areas.

然後，如果你回顧我們在 80/20 旅程中所處的位置，早期，我們需要大量簡化業務、考慮定價，對我們來說仍然有這些元素。而且，接下來要專注於營運和生產力，對吧？精益求精並從那些簡化業務的事情中獲益。所以，這會有點像今年，也是我們開始旅程的地方。我們的一些業務，我們不會擔心營收。我們將透過 PLS（產品線簡化 80/20）來提高收入和利潤，同時繼續加速目標領域的成長。

Got it. Very helpful. Maybe talk a little bit more about M&A. I know that in the prepared remarks, you guys talked about primarily looking at bolt-on acquisitions. At the Investor Day, you talked about needing roughly $400 million to $600 million in M&A between 2024 and 2025 to comfortably reach your Climate Solutions goals. You have subsequently indicated not necessarily need to get to that level. I'm just wondering if you can give kind of any updates in terms of what a more reasonable range might look like moving forward.

知道了。非常有幫助。也許更多地談論併購。我知道，在準備好的發言中，你們主要討論了補強收購。在投資者日上，您談到 2024 年至 2025 年間需要約 4 億至 6 億美元的併購資金才能輕鬆實現氣候解決方案目標。您隨後表示不一定需要達到該水準。我只是想知道您是否可以就未來更合理的範圍提供任何更新。

Yeah. Again, Mick, I'll go first just from kind of the math, and then Neil can add some more color. Early days, when we -- Neil first came in that we're literally assembling the current team and we're spinning through the data. We look at it from an 80/20 perspective. We weren't really sure how much business we want to retain, how much stays when we go through all of our activities. And I think as we've had the last four to six really strong quarters, one of the messages Neil and I've had is we're getting everything we thought we would get from the improvement. In many cases, as we better serve our customers, focus on key customers, orders are up. All of that said, the reason why we don't see the need for large acquisitions to get to our financial targets is really around the lessons we've learned from an 80/20 about the stickiness of some of our business.

是的。再說一次，米克，我將首先從數學角度進行，然後尼爾可以添加更多顏色。在早期，當我們——尼爾第一次進來時，我們實際上正在組建當前的團隊，並且我們正在研究數據。我們從 80/20 的角度來看它。當我們完成所有活動時，我們並不確定我們想要保留多少業務，多少業務留下來。我認為，由於我們在過去的四到六個季度表現非常強勁，尼爾和我收到的訊息之一是，我們正在獲得我們認為可以從改進中獲得的一切。在許多情況下，隨著我們更好地服務客戶、專注於關鍵客戶，訂單就會增加。綜上所述，我們認為不需要進行大規模收購來實現財務目標的原因實際上是我們從 80/20 中學到的有關我們某些業務黏性的經驗教訓。

And then the second thing I'd say to turn it over to Neil, we've continued to uncover jewels within Modine that we didn't necessarily know were there that we can grow organically.

然後我要說的第二件事是把它交給尼爾，我們繼續在 Modine 中發現寶石，我們不一定知道我們是否可以有機增長。

Yeah. That's a great point, Mick, and thanks for the question. The 400, 600 number was the very first days of our 80/20 journey a couple years ago. We've learned so much more, especially with the fact that we've got more organic growth that we can drive within the company, which requires less inorganic growth for us to meet our inorganic -- for us to meet our financial targets. So, we have spent a lot of time on the organic growth and the businesses that we want to stand up and create organizations around it to drive.

是的。這是一個很好的觀點，米克，謝謝你的提問。400、600 數字是幾年前我們 80/20 旅程的第一天。我們學到了很多東西，特別是我們可以在公司內部推動更多的有機成長，這需要更少的無機成長來實現我們的無機成長——讓我們實現我們的財務目標。因此，我們花了很多時間在有機成長和我們想要建立的業務上，並圍繞它創建組織來推動。

And then at the same time, we have been active on the M&A front. We've done multiple divestitures and a couple small deals in the last couple quarters. And we're doing that in strategic areas where it helps us build out our product portfolio, helps us expand in a geography, or most importantly, it helps us improve our technology in the areas that we want to serve.

同時，我們在併購方面也一直很活躍。在過去的幾個季度中，我們進行了多次資產剝離和幾筆小交易。我們正在策略領域這樣做，它可以幫助我們建立我們的產品組合，幫助我們擴展地域，或者最重要的是，它可以幫助我們在我們想要服務的領域中改進我們的技術。

Just on that last point, really hard to quantify due to timing and opportunity, but I think it's safe to say that that original number is at least half, right, from what we thought we would need. So, again, it really depends on the funnel and exact timing, but it's significantly below what we'll still be doing outlooking at M&A.

就最後一點而言，由於時間和機會的原因，確實很難量化，但我認為可以肯定地說，原始數字至少是我們認為需要的一半，對吧。因此，這實際上取決於管道和確切的時機，但它大大低於我們仍在併購中進行的展望。

Got it. Very helpful. I will jump back in queue. Thanks guys.

知道了。非常有幫助。我會跳回隊列。謝謝你們。

Jeff Van Sinderen, B. Riley.

傑夫·範·辛德倫，B.萊利。

Good morning, everyone. Let me first say impressive work on margins and overall cash flow. Maybe you can give a little bit more color on the status of the heat pump market, what you're seeing there, the latest, and then also on the GenSet business, how is that evolving, and then I guess the outlook there and any quantification around that for those two businesses.

大家早安。首先我要說的是在利潤率和整體現金流方面令人印象深刻的工作。也許您可以對熱泵市場的現狀、您在那裡看到的最新情況以及發電機組業務提供更多的信息，它是如何發展的，然後我猜測那裡的前景和任何圍繞這兩項業務進行量化。

Yeah. On the heat pump market, we continue to see some softness there as this heat pump adoption has been elongated out over an additional couple years based on the European regulations, some excess inventory in the system, and we're pacing our investments in heat pump to adjust to that. Long-term, I'm personally with what we're doing and the actions that we put in place, we're confident in this space and this market. It's just a short-term reset based on the extension of the adoption rate. So, that's what we're seeing. We're working through it. It's real-time. It's live, and the team's making the appropriate adjustments.

是的。在熱泵市場上，我們繼續看到一些疲軟的情況，因為根據歐洲法規，熱泵的採用已經延長了幾年，系統中存在一些過剩的庫存，我們正在加快對熱泵的投資來適應這一點。從長遠來看，我個人對我們正在做的事情和我們採取的行動表示支持，我們對這個領域和這個市場充滿信心。這只是基於採用率延長的短期重置。所以，這就是我們所看到的。我們正在解決這個問題。這是實時的。它已經上線，團隊正在做出適當的調整。

On the GenSet side, we've got a nice technology there. We're helping essentially the industry move towards a lower cost, more reliable, higher quality product that is starting to get adopted. The earlier adopters are starting to win share, and I think a lot of people are taking notice of and they're looking for the solution that we can provide with Modine.

在發電機組方面，我們擁有出色的技術。我們正在幫助整個產業轉向成本更低、更可靠、品質更高的產品，並開始被採用。早期採用者開始贏得份額，我認為很多人都在註意到這一點，他們正在尋找我們可以透過 Modine 提供的解決方案。

Okay. That's helpful. And I know there's been a lot of talk about 80/20, and you seem to be executing phenomenally well on everything you're doing there. I guess, are there other low-margin businesses that you are planning to exit or you might contemplate exiting?

好的。這很有幫助。我知道有很多關於 80/20 的討論，而且你在那裡所做的每件事似乎都執行得非常好。我想，您是否也計劃退出或可能考慮退出其他低利潤業務？

As you look at your entire enterprise, how much business do you have that you'd like to either divest or wind down at this point if we were to look at that in overall dollars?

當您審視整個企業時，如果我們以總金額來衡量的話，您有多少業務希望在此時剝離或關閉？

Yeah. It's a good question. So, certainly, as we continue to improve our profit profile and we expand margin in the business, it sets the bar and it raises the bar. Then you always have some bottom quartile business that needs to be addressed. That's just the evolution of 80/20, and that will essentially be how we operate the company going forward. So, there's always going to be that level of business that we have to question. Is it strategic that we want to be in it if it's low margin? If not, then we have a series of different approaches and activities in terms to address it.

是的。這是一個好問題。因此，當然，隨著我們繼續改善我們的利潤狀況並擴大業務利潤率，它設定了標準並提高了標準。那麼你總是有一些底部四分之一的業務需要解決。這只是 80/20 的演變，這將本質上是我們未來營運公司的方式。因此，我們總是會對業務水平提出質疑。如果利潤率很低，我們想參與其中是否具有策略意義？如果沒有，那麼我們有一系列不同的方法和活動來解決這個問題。

We haven't gone out with a specific number in terms of what that looks like, but I can see it being in the same range of what we've been able to address over the last 18 months within 80/20. It's what, $300 million to $400 million of revenue that we've through divestitures and product line simplification so far. And I would expect somewhere in that $100 million-plus range as we go forward that there's always going to be something that's underneath the threshold.

我們還沒有給出具體的數字，但我可以看到它與我們過去 18 個月在 80/20 內能夠解決的問題處於同一範圍內。到目前為止，我們透過資產剝離和產品線簡化獲得了 3 億至 4 億美元的收入。我預計，隨著我們前進，在 1 億美元以上的範圍內，總是會有一些東西低於門檻。

Yeah. I think too we look at the data. It aligns where Neil was going. As Neil was saying, there's always the bottom quadrant, the quad four stuff. And just for any company, for us, that's going to be 4% or 5% of sales. I think where we're at, it's probably a little bit more than that. So, there's probably a $200 million to $250 million type number of what we would call when we say that quad four. It's the lowest volume product, the lowest volume, kind of margin products with customers that are lower on our volume scale.

是的。我想我們也會看數據。它與尼爾要去的地方一致。正如尼爾所說，總是有底部象限，即四四的東西。對於任何公司，對我們來說，這將佔銷售額的 4% 或 5%。我認為我們現在的情況可能比這個還要多一些。因此，當我們說「四四」時，可能有 2 億至 2.5 億美元的數字。這是銷售最低的產品，也是我們銷售規模較低的客戶的利潤率最低的產品。

Okay. That's helpful. And then if I could just squeeze in one more. I wanted to circle back to the liquid-cooled for data centers for just a moment. Just to clarify, I think you said that you'll start to go after data centers that previously you did not. Maybe just touch on strategy to win in those.

好的。這很有幫助。然後如果我能再擠進去一個就好了。我想暫時回到資料中心的液冷系統。只是為了澄清一下，我認為您說過您將開始追求以前沒有的資料中心。也許只是談談在這些方面獲勝的策略。

Yeah. Absolutely. We've cast a net on the hyperscaler side to go into it. Make sure that the hyperscalers that are winning share in this space understand the technology advantages that we have with Modine and our Airedale brand. 100% we're having those conversations and that takes time to cultivate those relationships.

是的。絕對地。我們已經在超大規模方面撒網來研究它。確保在該領域贏得份額的超大規模企業了解我們與 Modine 和 Airedale 品牌一起擁有的技術優勢。我們 100% 正在進行這些對話，這需要時間來培養這些關係。

Relative to the liquid-cooling piece, this allows us to get into conversations of next-generation data centers that are planning for high-performance computing where air cooling, traditional mechanical cooling solutions are not sufficient. It needs to be augmented. It typically is augmented through a liquid cooling or immersion cooling technique. So, we did not have that product and we did not have those assets, which meant we weren't invited to those conversations on how do we use technology to solve for high-performance computing. Now that we have those assets, we have something to sell and help them solve their problems. They're looking for us as well as our competitors in terms of how we can advance the next-generation of data centers around high-performance computing driven by all the things that we know, AI, AL, MV. And not having the TMG assets, we weren't in those discussions, but we are today now.

相對於液體冷卻零件，這使我們能夠進入下一代資料中心的對話，這些資料中心正在規劃高效能運算，而空氣冷卻、傳統機械冷卻解決方案是不夠的。它需要被增強。它通常透過液體冷卻或浸入式冷卻技術來增強。因此，我們沒有該產品，也沒有這些資產，這意味著我們沒有被邀請參加有關如何使用技術來解決高效能運算問題的對話。現在我們有了這些資產，我們就有東西可以出售並幫助他們解決問題。他們正在尋找我們以及我們的競爭對手，了解我們如何圍繞著由我們所知的所有事物（AI、AL、MV）驅動的高效能運算來推進下一代資料中心。由於沒有 TMG 資產，我們沒有參與這些​​討論，但我們今天參與了。

Okay. And then, the new liquid-cooled CDU, that will be out in Q4 or Q1, we think?

好的。然後，我們認為新的液冷 CDU 將在第四季或第一季推出？

Yeah. We're targeting for Q1 of the next fiscal year and getting on some pilots and working closely with our customers, with a couple of our co-location customers, correct.

是的。我們的目標是下一財年第一季度，並進行一些試點，並與我們的客戶（包括我們的幾個主機代管客戶）密切合作，這是正確的。

Okay. Great. Thanks for taking my questions and best of luck.

好的。偉大的。感謝您回答我的問題，祝您好運。

Yeah, of course.

是的，當然。

(Operator Instructions) Brian Sponheimer, Gabelli Funds.

（操作員說明）Brian Sponheimer，Gabelli 基金。

Good morning, everyone. Congratulations on another great quarter.

大家早安。恭喜又一個偉大的季度。

Thanks Brian.

謝謝布萊恩。

And a lot has been addressed already. Just on the German businesses, I'm looking at the cash flow statement, doesn't look like there was any cash in. Were you able to jettison any liabilities with those businesses when they went out the door?

很多問題已經解決。就德國企業而言，我正在查看現金流量表，看起來沒有任何現金。當這些企業倒閉時，你能擺脫它們的任何責任嗎？

Yeah. Hey, Brian. It’s Mick. Yeah, there was actually a small cash benefit on the ultimate transaction, but immaterial. And then two answers on your liability question. Actual liabilities, the biggest one on the balance sheet would be some pension liabilities that went, and that was a fairly material number, which we're happy about.

是的。嘿，布萊恩。這是米克。是的，最終交易實際上有一點現金收益，但並不重要。然後是關於您的責任問題的兩個答案。實際負債，資產負債表上最大的一項是一些退休金負債，這是一個相當重要的數字，我們對此感到高興。

And then the second one, and you know it well, it was the potential liability. And right, if you took each of those facilities in a situation where we would exit them, the liability that Modine and the shareholders would have if we would have retained them was quite a large potential liability.

然後是第二個，你很清楚，這是潛在的責任。是的，如果我們在退出這些設施的情況下獲得這些設施，那麼如果我們保留它們，Modine 和股東將承擔相當大的潛在責任。

Okay. Yeah. I certainly appreciate that. And forgive me, but these businesses, so the roughly $30 million or so of revenue, was not in the prior 6 to 11 sales contemplation for growth that was given at the end of the second quarter?

好的。是的。我當然很欣賞這一點。請原諒我，但是這些業務，即大約 3000 萬美元左右的收入，並不在第二季度末給出的 6 至 11 銷售增長預期中？

We had built -- we factored that in, Brian, just in the days heading into our earnings call, and we were trending a little bit lower towards the lower end of the range. What we did this time is we trued it up, we made up some adjustments, and then on top of it for our remaining automotive business, we took that down a little bit.

布萊恩，就在我們即將召開財報電話會議的幾天裡，我們已經考慮到了這一點，而且我們的趨勢是朝著區間的下限走低一點。這次我們所做的是我們進行了調整，我們做了一些調整，然後在我們剩餘的汽車業務之上，我們把它稍微減少了一點。

Okay. All right. Understood there. I guess last one for me. Last year in the fourth quarter, you had evaluation allowance adjustment that tweaked your GAAP earnings. Anything as we think about this fourth quarter from a tax perspective that could move the needle one way or the other? Obviously, the algos are going to see year-over-year declines in EPS, but anything we should be thinking about for the fourth quarter here?

好的。好的。那裡明白了。我想最後一張適合我。去年第四季度，您進行了評估津貼調整，調整了您的 GAAP 收益。我們從稅收角度思考第四季有什麼可能會以某種方式推動這一趨勢嗎？顯然，演算法將看到每股收益同比下降，但我們在第四季應該考慮什麼？

No. A good point about the reported number, that's going to be tough. We will do our -- we'll make sure we highlight that, but from this coming Q4, we're not anticipating any large events or impacts to that.

不。關於報告的數字，這是一個很好的觀點，這將是艱難的。我們將盡力——我們將確保強調這一點，但從即將到來的第四季度開始，我們預計不會發生任何重大事件或影響。

Understood. Well, you all keep raising the bar higher and higher each quarter. So, congratulations, and I look forward to talking to you later.

明白了。好吧，你們每季都在不斷提高標準。那麼，恭喜你，我期待著稍後與你交談。

Thanks, Brian.

謝謝，布萊恩。

Tim Moore, EF Hutton.

蒂姆·摩爾，EF 赫頓。

Thanks and congratulations on the continued impressive EBITDA margin expansion and self-help catalysts to drive highly impressive EPS growth that even exceeded my street-high estimate. I got a really good sense of the data center's differentiation edge when touring that facility in August in person, but I just want to address another business line, actually. For advanced solutions, those revenues were flat sequentially in the quarter, but your guidance at the midpoint implies about a 25% sequential growth in the March quarter from the December quarter. Could you just give us a little bit more of an update on battery thermal management as we kind of look out over the next 12 months?

感謝並祝賀您持續令人印象深刻的 EBITDA 利潤率擴張和自助催化劑推動了令人印象深刻的每股收益成長，甚至超出了我的最高估計。當我在八月親自參觀該資料中心的設施時，我對資料中心的差異化優勢有了很好的認識，但實際上我只想談談另一條業務線。對於高級解決方案，這些收入在本季環比持平，但您對中點的指導意味著 3 月季度較 12 月季度環比增長約 25%。在我們展望未來 12 個月的過程中，您能否為我們提供更多有關電池熱管理的最新資訊？

And that timing, without pinpointing exactly the $160 million sales and maturity, how far out do you think that is? And then while you're on the topic for thermal management, how's planning of the launch in Europe going?

在沒有準確指出 1.6 億美元的銷售額和成熟度的情況下，您認為這個時間還有多遠？那麼，當您談論熱管理主題時，在歐洲的推出計劃進行得怎麼樣？

Good question. Thanks for the questions. This is Neil here. So, we continue to invest in our battery thermal management system and electronics cooling package. Certainly, we're seeing continued interest in the product, and we're expanding our capability and capacities. We opened up the earnings, in my script at least, to talk about the $160 million that would be at peak volume. So think two to three years out, that's when you're running at peak volume within these programs that we want. So, we're excited about that because the trend continues to grow quarter-over-quarter in terms of the potential revenue there.

好問題。感謝您的提問。這是尼爾。因此，我們繼續投資電池熱管理系統和電子冷卻套件。當然，我們看到人們對該產品的持續興趣，並且我們正在擴大我們的能力和產能。我們公開了收益，至少在我的劇本中，談論了高峰時期的 1.6 億美元。因此，請考慮兩到三年後，那時您將在我們想要的這些計劃中達到峰值運行量。因此，我們對此感到興奮，因為就潛在收入而言，這一趨勢繼續逐季增長。

More investments are being made, and we've been in contact and had some really good conversations in Europe with some of our customers that we've targeted, and the fact that we've been public about the expansion, and an existing facility that has existing infrastructure and Modine employees that are already very attuned to making sure that we have good reliability, quality, and delivery for this industry has been well received. So, we're going to continue to ramp up our investments. We're going to continue to open up the space in the facility in Italy for us to be able to grow in Europe, and we've had positive conversations with those customers, and we continue to trend in the direction that we'd expect with the amount of investment that we put into this business.

我們正在進行更多的投資，我們已經在歐洲與我們的一些目標客戶進行了接觸並進行了一些非常好的對話，事實上我們已經公開了擴建計劃，以及現有的設施，擁有現有的基礎設施和Modine 員工，他們已經非常適應確保我們擁有良好的可靠性、品質和交付，該行業受到好評。因此，我們將繼續加大投資力度。我們將繼續在義大利工廠開闢空間，以便我們能夠在歐洲發展，我們已經與這些客戶進行了積極的對話，我們將繼續朝著我們期望的方向發展以及我們投入這項業務的投資金額。

Great. That's really helpful, color. Just switching gears, during my visit in August, the facilities, not just data centers, but HVAC, I get a sense of really the customer's focus and the emphasis there live in the shops, dedicated customers and such. But I'm just wondering, as you progress through 80/20, more so on performance technology side, are you uncovering more savings and efficiencies than you budget or expected a year ago? And then I'm just wondering, just thinking about this whole customer maximization, as you go through both segments on 80/20, how do you maybe avoid going too lean as you achieve the value-based pricing?

偉大的。這真的很有幫助，顏色。只是切換齒輪，在我八月訪問期間，設施，不僅僅是資料中心，還有暖通空調，我真正感受到了客戶的關注點以及商店、忠誠客戶等的重點。但我只是想知道，隨著您在 80/20 方面取得進展，尤其是在性能技術方面，您是否發現比一年前的預算或預期更多的節省和效率？然後我只是想知道，考慮一下整個客戶最大化，當您在 80/20 上經歷這兩個細分市場時，在實現基於價值的定價時如何避免過於精益？

Yeah. Good question. So certainly on both sides of the business, not just Performance Technologies, the Climate Solutions and Performance Technologies, there's opportunity for productivity gains, without a doubt. And I think we've been able to display that through the success that you've seen through the margin expansion. We've done that through commercial excellence programs and we're pivoting into the operational excellence programs. So that's anything from labor to supply chain, procurement or purchase price variance or PPV.

是的。好問題。因此，毫無疑問，業務雙方，不僅僅是性能技術、氣候解決方案和性能技術，都有提高生產力的機會。我認為我們已經能夠透過利潤率擴張所取得的成功來展示這一點。我們已經透過卓越商業計劃做到了這一點，並且正在轉向卓越營運計劃。因此，這包括從勞動力到供應鏈、採購或採購價格差異或 PPV 的任何內容。

So there's a lot of activities that we can do on the operations front and the team has been working diligently to put those together. And that will be the next phase in terms of our margin expansion within the business, as we've reached the thresholds that we would expect through some of our price expansion.

因此，我們可以在營運方面進行許多活動，團隊一直在努力將這些活動整合在一起。這將是我們業務利潤擴張的下一階段，因為我們已經達到了我們透過一些價格擴張所預期的門檻。

So operations improvement and excellence is there, it's in both sides of the business, not in PT. And the teams are putting together the funnels and the activities and the list of projects for the next annual operating plan. So that'll be a good indicator of how big that is.

因此，營運改善和卓越是存在的，它存在於業務雙方，而不是 PT。團隊正在整理漏斗、活動以及下一個年度營運計畫的項目清單。所以這將是一個很好的指標，表明它有多大。

Great. Thanks for that elaboration. It's a good carrot for margin expansion in the next fiscal year. And thanks for my questions.

偉大的。感謝您的詳細闡述。這是下一財年利潤擴張的好胡蘿蔔。感謝我的提問。

Thanks. Appreciate it, Tim.

謝謝。很感激，蒂姆。

Matt Summerville.

馬特·薩默維爾。

Yeah. Thanks. Just two quick follow-ups. Mick, what's the headwind, and I apologize if I missed it, what's the headwind from divestitures in your fiscal fourth quarter?

是的。謝謝。只需兩次快速跟進。米克，逆風是什麼？ 如果我錯過了，我很抱歉，你們第四財季的資產剝離帶來的逆風是什麼？

It's going to be $20 million to $25 million at the estimated impact in Q4.

預計第四季的影響將達到 2,000 萬至 2,500 萬美元。

And then the DTMS business, two to three years ramping to $160 million or so, thereabouts, based on the programmatic winds you've had. Fiscal 2024, realizing this is buried alongside the coding business, the EV components business, how big is the DTMS business for you guys this year, to kind of think about how that trajectory looks out over the next two to three?

然後是 DTMS 業務，根據您所經歷的程序化趨勢，在兩到三年內將增長到 1.6 億美元左右。2024 財年，意識到這一點與編碼業務、電動汽車零件業務一起埋沒，今年 DTMS 業務對你們來說有多大，想一下在未來兩到三年內該軌跡會如何？

Yeah. So that -- the ATS business excluding codings is about $100 million. And I think, and I think some -- we just had that question too, I think we'll provide an updated long-term outlook, Matt, this year we're talking about -- 30% type growth, and we said we think the CAGR on that's the 35% to 40%. I think as far as growth for next year, we'd expect it to stay in that range.

是的。因此，不包括編碼在內的 ATS 業務約為 1 億美元。我認為，我認為一些 - 我們也有這個問題，我想我們將提供更新的長期前景，馬特，今年我們正在談論 - 30% 的增長，我們說我們我認為複合年增長率為35% 到40% 。我認為就明年的成長而言，我們預計它將保持在這個範圍內。

So we -- that $100 million growing at a -- in that compound growth rate range of that 35% to 40% would seem reasonable.

因此，在 35% 至 40% 的複合成長率範圍內，1 億美元的成長似乎是合理的。

Got it. Okay. That's all for me. Thank you.

知道了。好的。這就是我的全部。謝謝。

There are no further questions in the queue. I'd like to hand the call back to Kathy Powers for closing remarks.

隊列中沒有其他問題。我想將電話轉回給凱西·鮑爾斯（Kathy Powers），讓其致閉幕詞。

Thanks so much, and thanks to everybody for joining us this morning. You'll be able to access the replay of this call through our website in about two hours. We hope that everybody has a great day. Thanks. Bye.

非常感謝，也感謝大家今天早上加入我們。大約兩個小時後，您將可以透過我們的網站觀看本次通話的重播。我們希望每個人都有美好的一天。謝謝。再見。

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.

女士們、先生們，今天的電話會議到此結束。感謝您的參與。此時您可以斷開線路，度過美好的一天。