Modine Manufacturing Company (MOD) 2021 Q3 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to Modine Manufacturing Company's Third Quarter Fiscal 2021 Earnings Conference Call. (Operator Instructions)

各位女士、先生，早安，歡迎參加 Modine Manufacturing Company 2021 會計年度第三季財報電話會議。（接線員指示）

As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Ms. Kathy Powers, Vice President, Treasury, Investor Relations and Tax.

提醒各位，本次電話會議將被錄音。現在我想把電話交給本次會議主持人——財務、投資人關係與稅務副總裁 Kathy Powers 女士。

Good morning, and thank you for joining our conference call to discuss Modine's third quarter fiscal 2021 results. I'm joined on this call by Neil Brinker, our President and Chief Executive Officer; and Mick Lucareli, our Vice President, Finance and Chief Financial Officer. I'd like to take a moment to introduce Neil, who joined Modine as President and CEO on December 1. Neil came to us from Advanced Energy Industries, where he most recently served as President and Chief Operating Officer; and prior to that, led global sales, marketing, engineering and operations for AE's semiconductor telecom and networking, data center, industrial and medical markets. Prior to joining AE, Neil spent 6 years with IDEX Corporation in a variety of senior leadership roles. We are very pleased to have Neil leading our team here at Modine.

各位早安，感謝各位參加我們的電話會議，一同討論 Modine 2021 會計年度第三季業績。我與會的還有我們的總裁暨執行長 Neil Brinker，以及財務副總裁暨財務長 Mick Lucareli。我想先花一點時間介紹 Neil，他於 12 月 1 日加入 Modine 擔任總裁暨執行長。Neil 先前任職於 Advanced Energy Industries，最近的職務為總裁暨營運長；在此之前，他負責 AE 於半導體、電信與網路、資料中心、工業與醫療市場的全球銷售、行銷、工程與營運。在加入 AE 之前，Neil 也在 IDEX Corporation 任職 6 年，擔任多項資深領導職務。我們非常高興由 Neil 來帶領 Modine 團隊。

We'll be using slides for 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.

今天的簡報將使用投影片，各位可透過網路直播連結存取，或至我們網站 modine.com 的投資人關係專區下載已上傳的 PDF 檔。

On Slide 2 is our notice regarding forward-looking statements. This call may contain forward-looking statements as outlined in our earnings release as well as in our company's filings with the Securities and Exchange Commission.

投影片第 2 頁為我們關於前瞻性陳述的聲明。本次電話會議可能包含前瞻性陳述，其定義如同我們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 is my pleasure to turn the call over to Neil.

接下來，我很榮幸把電話交給 Neil。

Thank you, Kathy, and good morning, everyone. It's been a busy first 2 months with Modine, and I'm encouraged by what I see. I've spent much of my time connecting with the senior leadership team and getting to know the business. I'm honored to be part of a company with such a long and rich history. I would also like to share my appreciation for everyone in this organization that has gone above and beyond expectations during this past year to respond to the global pandemic. In addition to all of our employees, I would also like to thank members of our supply chain for keeping us running efficiently and for our customers who have continued to give us their business and their trust. This has been a difficult year to say the least, and we wouldn't have been able to deliver our financial results without the hard work from all these key stakeholders.

謝謝 Kathy，各位早安。我加入 Modine 的前兩個月非常忙碌，但我對所見所聞感到振奮。我大部分時間都在與資深領導團隊交流並深入了解業務。我很榮幸能成為一家擁有悠久且豐富歷史的公司的一員。我也想對本組織所有同仁表達感謝，過去一年面對全球疫情，大家都超越期待、全力以赴。除了全體員工之外，我也要感謝供應鏈夥伴讓我們能高效率運作，以及持續給予我們業務與信任的客戶。這一年可說是艱難的一年，若沒有這些關鍵利害關係人的辛勤付出，我們不可能交出目前的財務成果。

The team has also done a great deal of heavy lifting in preparing for the exit of the automotive business, and those plans are on track. As a reminder, last quarter, we announced the sale of our liquid-cooled business to Dana. Both teams are currently working through all pre-closing items, including the required regulatory approvals around the globe. This process has been initiated, and we anticipate a close sometime in the June quarter.

團隊也在準備退出汽車業務方面投入大量心力，而相關計畫正按進度推進。提醒各位，上季我們宣布將液冷業務出售給 Dana。雙方團隊目前正處理所有交割前事項，包括全球各地所需的監管核准。此流程已啟動，我們預期將於 6 月季度期間完成交割。

For the air-cooled business, which represents a much smaller portion of the Automotive segment, we are diligently working on multiple exit strategies. As previously discussed, we have talked with several interested parties and are getting closer to a definitive exit plan. The exit of the automotive business is an important step in our strategic transformation that will allow us to further focus on the future. As the teams work through the auto exit work streams, I'm personally focused on the next chapter for Modine. These are certainly exciting and challenging times for our company. And I see great opportunity for growth and for further improvement to our business model.

至於風冷業務（在汽車事業部中占比更小），我們正積極推進多種退出策略。如先前所述，我們已與數個有興趣的對象洽談，並正逐步接近明確的退出方案。退出汽車業務是我們策略轉型的重要一步，將使我們能更聚焦於未來。在團隊推進汽車退出各項工作流的同時，我個人也專注於 Modine 的下一篇章。對公司而言，這確實是令人振奮且充滿挑戰的時期。我看見了成長機會，以及進一步改善我們商業模式的巨大空間。

One of our key priorities is to expand our presence in the data center market. The data center market in North America and in EMEA are large growing sectors with strong underlying drivers. We expect this growth to continue for some time. Modine has full thermal system expertise, innovative product technology focused on lowering cost of ownership and a global footprint to support our customer locations.

我們的關鍵優先事項之一，是擴大在資料中心市場的布局。北美與 EMEA 的資料中心市場規模龐大且持續成長，並具備強勁的基本面驅動因素。我們預期此成長趨勢仍將延續一段時間。Modine 具備完整的熱管理系統專業能力、以降低總持有成本為核心的創新產品技術，以及可支援客戶據點的全球布局。

And Modine has strong relations with growing colocation customers and our key hyperscale client, providing leverage for continued growth in Europe and in North America markets. We've talked about growing our share in the data center market for some time. And let me reiterate and be clear, this is one of the best opportunities for Modine to drive higher growth and profit margins.

此外，Modine 與成長中的共置（colocation）客戶以及我們的關鍵超大規模（hyperscale）客戶維持良好關係，為我們在歐洲與北美市場的持續成長提供槓桿。我們談論提升資料中心市場市占已一段時間。我在此重申並明確表示：這是 Modine 推動更高成長與更高利潤率的最佳機會之一。

Here's the immediate 4 step plan on what we'll do differently to win additional market share in data centers. One, organizationally, we're consolidating the leadership for data center solutions under one key leader here at Modine. We will align our organization around our customers and markets, which will remove internal barriers and increase our speed and accountability. Two, we are increasing our manufacturing capacity by leveraging our global footprint to deliver data center products at scale and in region. We are expanding capacity on our computer room air handlers by industrializing these product ranges in the U.S. and in Spain and are also investing to build and test chillers for the North America market. Three, we will continue to invest and scale our commercial and technical teams to better align with our customers. And finally, we will use the data center market as the pilot for our 80/20 initiative.

以下是我們為在資料中心贏得更多市占、將立即採取的四步計畫。第一，在組織面，我們將把資料中心解決方案的領導架構整合至 Modine 內的一位關鍵領導者之下。我們將以客戶與市場為中心來調整組織，移除內部障礙並提升速度與問責。第二，我們將運用全球布局提升製造產能，以規模化並在區域內交付資料中心產品。我們正擴充電腦機房空調處理機（computer room air handlers）的產能，透過在美國與西班牙將產品線工業化，同時也投資在北美市場建置並測試冷水機（chillers）。第三，我們將持續投資並擴大商務與技術團隊，以更貼近客戶需求。最後，我們將以資料中心市場作為 80/20 計畫的試點。

Many of you know my background and success with 80/20 companies, and Modine will adopt the same 80/20 principles, helping shape who we are in the future. As I mentioned, we will launch a pilot within the data center business, training our team in advance of a company-wide rollout. As you may know, a 80/20 is a systematic way of examining a business and focusing resources on the highest growth and best returning opportunities. Our opportunity is to focus both on improving margins and accelerating revenue growth. We will eventually work through all of our other key markets in a disciplined manner. The 80/20 process and methodology will take some time to fully implement across the company, and we will invest time and money, and it's a very important area. The result of this process have been successfully proven across many companies, and I am confident that Modine will be no different.

許多人知道我在 80/20 企業的背景與成功經驗，Modine 也將採用相同的 80/20 原則，協助塑造我們未來的樣貌。如我所述，我們將在資料中心業務內啟動試點，先行訓練團隊，之後再推廣至全公司。各位可能知道，80/20 是一種系統化檢視企業的方法，將資源聚焦於成長最高、報酬最佳的機會。我們的機會在於同時提升毛利率並加速營收成長。未來我們也將以嚴謹的方式，逐一推進其他關鍵市場。80/20 的流程與方法論需要一些時間才能在全公司完整落地，我們也會投入時間與資金，這是非常重要的領域。此流程在許多公司已被證明能成功帶來成果，我有信心 Modine 也不會例外。

Finally, I want to mention that our focus includes both organic and inorganic growth. Mick and I will spend significant time wrapping up an aggressive and proactive acquisition program here at Modine, specifically designed to shore up our products, technologies and channels where it makes sense.

最後，我想提到我們的重點同時包含有機與無機成長。Mick 和我將投入大量時間，在 Modine 推動一項積極且主動的併購計畫，特別針對在合理情況下強化我們的產品、技術與通路。

I'd like to cover our third quarter segment results on Page 4. CIS sales were down 13% from the prior year, primarily due to lower sales to our large data center customer, which were down approximately $19 million versus the prior year. Adjusted EBITDA was down $10 million. Similar to revenue, nearly all the earnings decline was due to the lower sales with one customer. I would like to take a minute and walk through the changing dynamics of this market while reiterating our confidence in our strategy. As you know, our largest customer in the CIS segment is a hyperscale data center customer. While the hyperscale market has grown at a good rate this past year, many hyperscale providers have chosen to scale back their large-scale capital expenditures for DC construction. In order to keep pace with the growth, many hyperscale providers have leveraged the rapid growth of colocation to expand our DC footprints.

我想在第 4 頁說明我們第三季各事業部的表現。CIS 銷售額較去年同期下滑 13%，主要因對我們大型資料中心客戶的銷售下降，較去年同期約減少 1,900 萬美元。調整後 EBITDA 減少 1,000 萬美元。與營收相同，幾乎所有獲利下滑都來自於單一客戶的銷售降低。我想花一點時間說明此市場的動態變化，同時重申我們對策略的信心。如各位所知，CIS 事業部最大的客戶是一家超大規模資料中心客戶。雖然過去一年超大規模市場以不錯的速度成長，但許多超大規模供應商選擇縮減其大型資料中心建置的資本支出。為了跟上成長，許多超大規模供應商運用共置（colocation）的快速成長來擴大其資料中心版圖。

During this period, we have collaboratively worked with our clients to design their next-generation of cooling technology for large-scale data center construction. We expect that we will see orders for these innovative and proprietary cooling products ramp again in fiscal 2022. In addition, I previously mentioned that we are consolidating leadership and focus on the data center markets to continue our growth with both hyperscale and colocation clients.

在此期間，我們與客戶合作設計其用於大型資料中心建置的下一代冷卻技術。我們預期，這些創新且具專有性的冷卻產品訂單將在 2022 會計年度再次放量成長。此外，我先前提到我們正整合領導架構並聚焦資料中心市場，以持續推動我們在超大規模與共置客戶兩端的成長。

At the same time, we will evaluate different alternatives to better align the external reporting of our consolidated data center business since it currently resides in 2 business segments. Besides the drop in sales, CIS margins were also negatively impacted by expenses to complete the final phase of our plant consolidation in China. This is now behind us, and we expect those inefficiencies to improve going forward. Last, the team remains focused on improving the profit margins of our coils products and driving growth in coolers. I'm encouraged, and I look forward to utilizing our 80/20 process to accelerate this progress.

同時，我們也將評估不同方案，以更妥善地調整我們整合後資料中心業務的對外揭露方式，因為目前該業務分散在兩個事業部之中。除了銷售下滑外，CIS 的利潤率也受到在中國完成工廠整併最後階段所需費用的負面影響。這部分如今已告一段落，我們預期相關低效率將在未來改善。最後，團隊仍專注於提升線圈（coils）產品的利潤率，並推動冷卻器（coolers）的成長。我感到振奮，也期待運用我們的 80/20 流程來加速這項進展。

Please turn to Page 5. The Building HVAC segment had another strong quarter, with sales up 6% from the prior year and adjusted EBITDA up 15%. This was primarily driven by increased sales of heating products in North America, and of data center products in the U.K. It continues to be a strong heating season for us with strong growth and share gains in our gas unit heater products. There has been a strong demand for replacement unit heaters this year. We estimate that more than 70% of our heaters are sold as replacement units. We also gained market share, mostly due to our strong distribution partners and our superior product availability. As an example, our Hot Dawg brand of products, which are typically used in residential or light commercial applications are up 35% in the third quarter versus the prior year, whereas we believe the market to be up around 10% in this product category. We've been able to be successful keeping up with the increased demand, often providing next day shipping for these orders. The higher heating product sales also drove strong margin performance this quarter, with excellent conversion on the increased volume.

請翻到第 5 頁。建築 HVAC 事業部本季再度表現強勁，銷售額較去年同期成長 6%，調整後 EBITDA 成長 15%。這主要受北美暖氣產品銷售增加，以及英國資料中心產品銷售增加所帶動。對我們而言，暖氣季仍然強勁，我們的燃氣單元加熱器產品持續呈現強勁成長並取得市占率提升。今年替換用單元加熱器的需求十分強勁。我們估計超過 70% 的加熱器係以替換機型形式銷售。我們也提升了市占率，主要歸功於強大的經銷合作夥伴以及我們優異的產品供應能力。舉例來說，我們的 Hot Dawg 品牌產品通常用於住宅或輕型商用應用，第三季較去年同期成長 35%，而我們認為此產品類別的市場約成長 10%。我們能成功跟上需求增加，這些訂單往往可提供隔日出貨。暖氣產品銷售增加亦帶動本季毛利率表現強勁，隨著出貨量提升，轉換效益極佳。

In data centers, our U.K. business is having an extremely good year with data center sales up 30% on a year-to-date basis. Third quarter sales were up slightly from the prior year, impacted by the timing of shipments with several orders pushed to the fourth quarter. Our focus within data centers for this business is on the colocation customers. These clients value and need our thermal expertise. As mentioned previously, we will leverage these relationships formed in the U.K. and the EU to establish our business in the North America market.

在資料中心方面，我們英國業務今年表現極佳，年初至今資料中心銷售成長 30%。第三季銷售較去年同期小幅增加，但受出貨時點影響，數筆訂單延後至第四季。我們在此業務的資料中心重點聚焦於機房代管（colocation）客戶。這些客戶重視且需要我們的熱管理專業。如先前所述，我們將運用在英國與歐盟建立的關係，來在北美市場建立我們的業務。

Please turn to Page 6. Sales in heavy-duty equipment, or HDE, were up 13% from the prior year, with higher sales to off-highway and truck customers in all regions as markets continue to stabilize. Adjusted EBITDA nearly doubled with a significant improvement in gross margin driven by volume increase, along with savings from procurement and other cost reduction initiatives. This was clearly a great quarter for our HDE segment, benefiting from a market improvement that was ahead of our expectations. We expect this trend to continue in the fourth quarter as many of our customers are building safety stock.

請翻到第 6 頁。重型設備（Heavy-Duty Equipment，或 HDE）銷售額較去年同期成長 13%，隨著市場持續趨於穩定，各地區對非公路與卡車客戶的銷售均增加。調整後 EBITDA 幾乎倍增，毛利率顯著改善，主要由出貨量增加所帶動，並加上採購節省以及其他降本措施的效益。本季對我們的 HDE 事業部而言表現非常出色，受惠於市場改善且優於我們預期。我們預期此趨勢將延續至第四季，因為許多客戶正在建立安全庫存。

We continue to monitor a number of issues that may impact our raw material costs, including tariffs and the rollback of certain exclusions that we benefited from in the past. We are always working to improve our manufacturing and supply chain strategies, which have been complicated by geopolitical and economic trends, including tariffs. This will continue to be a focus as we analyze our risk and implement mitigation strategies. This is another excellent opportunity to use the 80/20 methodology to quickly drive improvement and focus in on our supply chain activities.

我們持續關注多項可能影響原物料成本的議題，包括關稅以及先前我們受惠的部分豁免條款之取消。我們一直致力於改善製造與供應鏈策略，但地緣政治與經濟趨勢（包括關稅）使其更為複雜。我們將持續把這作為重點，分析風險並落實緩解策略。這也是運用 80/20 方法論快速推動改善、並聚焦供應鏈活動的另一個絕佳機會。

Please turn to Page 7, and I'll shift to the Automotive segment. Sales were down 3% on a constant currency basis, driven by lower market demand in North America, partially offset by higher sales in Asia. Adjusted EBITDA for the segment was $12.3 million, up significantly from the prior year, primarily due to the improved plant efficiency and the benefit of cost-saving measures. We expect further uncertainty in this market due to ongoing economic weakness. And in addition, we may be impacted by the current disruption to the auto industry, resulting from shortages of semiconductors.

請翻到第 7 頁，我將轉到汽車事業部。以固定匯率計，銷售額下滑 3%，主因為北美市場需求較弱，部分被亞洲較高銷售所抵銷。該事業部調整後 EBITDA 為 1,230 萬美元，較去年同期大幅增加，主要來自工廠效率提升以及節省成本措施的效益。由於經濟持續疲弱，我們預期該市場仍將面臨更多不確定性。此外，我們也可能受到目前汽車產業因半導體短缺所造成的干擾影響。

We did not see a great deal of impact from this in the third quarter, but anticipate that it could start to impact volumes in Q4 as more and more automakers halt production due to chip shortages. As I mentioned before, we are diligently working on our exit strategy for this segment, including closing on the sale of liquid-cooled business that is still pending regulatory approval.

第三季我們尚未看到太大影響，但預期隨著愈來愈多車廠因晶片短缺而停產，第四季可能開始影響出貨量。如我先前提到的，我們正積極推進該事業部的退出策略，包括完成液冷業務出售案的交割，目前仍待監管核准。

With that, I'll turn it over to Mick to review the total company financial results.

接下來，我把時間交給 Mick，請他回顧公司整體財務結果。

Thanks, Neil, and good morning, everyone. Please turn to Slide 8. I'm pleased to report a good third quarter and before walking through the underlying results, I'd like to review 2 large items that impacted our GAAP results this quarter. First, we recorded $134 million of impairment charges primarily related to the liquid-cooled Automotive business. As a result of our agreement to sell this business, we wrote down the associated assets. Upon closing, we would anticipate reporting a final and much smaller noncash loss on the sale. Also, connected to the third quarter impairment charges, we recorded valuation allowances on deferred tax assets in the U.S. and abroad. These were partially offset by tax benefits related to the impairment charges. The net tax impact of these items was $79 million.

謝謝你，Neil，各位早安。請翻到第 8 張投影片。我很高興報告第三季表現良好。在說明基本營運結果之前，我想先回顧本季影響我們 GAAP 結果的兩項重大事項。第一，我們認列 1.34 億美元的減損費用，主要與汽車液冷業務相關。由於我們已同意出售該業務，我們對相關資產進行減記。於交割完成時，我們預期將就出售認列最終且小得多的非現金損失。此外，與第三季減損費用相關，我們在美國及海外對遞延所得稅資產認列估值備抵。這些項目部分被與減損費用相關的稅務利益所抵銷。上述項目的稅務淨影響為 7,900 萬美元。

In order to provide a true comparison, Slide 8 is focused on adjusted operating metrics. As usual, our appendix includes an itemized list of adjustments and a full reconciliation to our GAAP results. Third quarter adjustments totaled $139.1 million, mostly comprised of the noncash asset impairment I just reviewed. The remaining balance includes $3 million related to the automotive exit along with $1.7 million of restructuring activities, environmental charges and CEO transition costs.

為了提供可比的比較，第 8 張投影片聚焦於調整後的營運指標。如同以往，我們的附錄包含調整項目的明細清單，以及與 GAAP 結果的完整調節。第三季調整項目合計 1.391 億美元，主要由我剛剛回顧的非現金資產減損所構成。其餘部分包括與汽車退出相關的 300 萬美元，以及 170 萬美元的重整活動、環境費用與 CEO 交接成本。

Now shifting to the key metrics. Third quarter sales increased by $11 million or 2% as compared to the prior year. The increase was largely driven by favorable currency translation. I'm happy to report gross profit of $83 million, which was higher than the prior year by $9 million. Our gross margin once again exceeded 17% and improved 160 basis points. The higher margin was achieved through procurement, operational efficiencies and various spending reductions. As discussed last quarter, we ramped down our COVID savings during Q3, which is leading to more normalized costs and margins as we go forward. SG&A finished 12% or $7 million lower than the prior year. The largest reduction relates to lower automotive separation costs. We also benefited from permanent cost reductions executed late in the prior fiscal year, as well as temporary COVID-related cost savings. Despite the pandemic and challenging market conditions, adjusted EBITDA improved by $3 million, including a 40 basis point margin improvement. Our adjusted earnings per share of $0.41 was $0.04 or 11% higher than the prior year. Similar to the previous quarter, the improved Q3 financials reflect the hard work of all employees around the globe, lots of hard work, cost-cutting and dedication have resulted in higher earnings and margins during this very difficult operating environment.

接著看關鍵指標。第三季銷售額較去年同期增加 1,100 萬美元或 2%。此增幅主要由有利的匯率換算所帶動。我很高興報告毛利為 8,300 萬美元，較去年同期增加 900 萬美元。我們的毛利率再次超過 17%，並提升 160 個基點。較高的毛利率來自採購、營運效率提升以及各項支出削減。如同上季所討論，我們在第三季逐步降低 COVID 節省措施，這將使未來成本與毛利率更趨正常化。SG&A 較去年同期下降 12% 或 700 萬美元。最大降幅來自較低的汽車分拆成本。我們也受惠於上一財年末執行的永久性成本削減，以及暫時性的 COVID 相關成本節省。儘管疫情與艱困的市場環境，調整後 EBITDA 仍增加 300 萬美元，且毛利率提升 40 個基點。我們的調整後每股盈餘為 0.41 美元，較去年同期增加 0.04 美元或 11%。與上一季類似，第三季財務改善反映全球所有員工的努力；大量的辛勤工作、成本削減與投入，使我們在這個非常艱難的營運環境中取得更高的獲利與毛利率。

Let's turn to Slide 9. In addition to the income statement improvements, I'm pleased to report year-to-date free cash flow of $123 million. This extraordinary performance was driven by a number of items, including operating cost reductions, reduced automotive exit spending, lower capital spending, CARES Act deferrals and effective working capital management. We continue to repay debt with excess cash, resulting in a leverage ratio of 1.9, which is our lowest level in 4 years. As we look to the full year, we expect free cash flow will be negative in Q4, due mostly to the timing of some large cash payments, including required pension contributions, higher capital spending and working capital. Again, I want to highlight that the cash flow and balance sheet position are key successes this year, allowing us to head into our strategic transformation with a strong and flexible financial position.

請看第 9 張投影片。除了損益表的改善外，我也很高興報告年初至今自由現金流為 1.23 億美元。這項卓越表現由多項因素帶動，包括營運成本降低、汽車退出支出減少、資本支出降低、CARES 法案遞延，以及有效的營運資金管理。我們持續以多餘現金償還債務，使槓桿比率降至 1.9，為 4 年來最低水準。展望全年，我們預期第四季自由現金流將為負值，主要由於部分大額現金支付的時點因素，包括必要的退休金提撥、較高的資本支出以及營運資金需求。再次強調，今年現金流與資產負債表狀況是關鍵成功因素，使我們能以強健且具彈性的財務狀況推進策略轉型。

Now let's turn to Slide 10 with our fiscal 2021 outlook. After analyzing the incremental tailwinds and headwinds, we are maintaining our full year outlook. Our revenue guidance reflects a 7% to 12% decrease with adjusted EBITDA falling within a range of $155 million to $165 million. Although our markets are largely recovering from the pandemic, we continue to see pockets of softness as well as rising commodity metals prices and lingering tariff challenges. The recent trends in our Heavy Duty Equipment markets are very encouraging. With Automotive market, semiconductor shortages need to be closely monitored.

接著請看第 10 張投影片，為我們 2021 財年的展望。在分析新增的順風與逆風因素後，我們維持全年展望不變。我們的營收指引反映下滑 7% 至 12%，調整後 EBITDA 預計落在 1.55 億至 1.65 億美元區間。儘管我們的市場大多正從疫情中復甦，我們仍看到部分領域偏弱，以及大宗金屬價格上漲與關稅挑戰持續存在。近期重型設備市場的趨勢令人鼓舞。至於汽車市場，半導體短缺需要密切監控。

While holding the full year EBITDA guidance, we continue to see a dip in our Q4 margin due to a few transitory items, including tariffs and metal increases not yet passed through to our customers, a delayed ramp-up of CIS data center shipments to early fiscal '22, a complete phase out of COVID-recovery measures in Q4. Finally, our fiscal 2021 outlook includes the full scope of our Automotive business, including the liquid-cooled portion that is in the process of being sold. As discussed in the past, we'll continue to forecast and report the Auto segment results until the transaction closes or further actions trigger a change in the accounting treatment. Given that we're a March year-end company, the team is in the middle of annual planning. That said, I'd like to share some preliminary thoughts about the end markets and earnings drivers for the new year. First, we're encouraged about good market recoveries and tailwinds across nearly all of our business segments.

在維持全年 EBITDA 指引的同時，我們仍預期第四季毛利率將因幾項短期因素而下滑，包括尚未轉嫁給客戶的關稅與金屬成本上漲、CIS 資料中心出貨延後至 2022 財年初才加速爬坡，以及第四季完全停止 COVID 復甦措施。最後，我們 2021 財年展望包含汽車業務的完整範圍，包括正在出售流程中的液冷部分。如同過去所討論，在交易完成或後續行動觸發會計處理變更之前，我們將持續預測並報告汽車事業部的結果。由於我們公司以 3 月為會計年度結束，目前團隊正處於年度規劃的中段。儘管如此，我想分享一些對新年度終端市場與獲利驅動因素的初步看法。首先，我們對幾乎所有事業部的市場良好復甦與順風因素感到鼓舞。

We anticipate very strong data center growth across the entire company. We also expect to benefit from the ongoing recovery in our commercial vehicle and off-highway markets. And for the broader CIS and Building HVAC markets, we see a slow, steady recovery through calendar '21. As we head into the new fiscal year, the volume increases will help to offset some economic headwinds that many companies are encountering. The largest impact will come from the rising commodity metals costs, plus new tariffs, and the resumption of employee-related costs to pre-COVID levels.

我們預期全公司範圍內的資料中心業務將出現非常強勁的成長。我們也預期將受惠於商用車與非公路（off-highway）市場持續復甦。至於更廣泛的 CIS 與建築 HVAC 市場，我們看到在 2021 日曆年度將呈現緩慢而穩健的復甦。隨著我們邁入新的會計年度，出貨量的增加將有助於抵銷許多公司正面臨的一些經濟逆風。影響最大將來自大宗金屬原物料成本上升、加上新的關稅，以及員工相關成本恢復至 COVID 之前水準。

Last, and with regards to auto, we expect the transaction with Dana will close sometime in our fiscal first quarter. Like many companies, we've dealt with our fair share of COVID-related challenges. However, the results show the strong focus on cost savings and cash flow. We look forward to resuming and accelerating the growth opportunities that lie in front of us.

最後，關於汽車業務，我們預期與 Dana 的交易將在我們會計年度第一季的某個時間完成。和許多公司一樣，我們也面臨了相當多與 COVID 相關的挑戰。然而，結果顯示我們在節省成本與現金流方面的高度聚焦。我們期待恢復並加速眼前的成長機會。

With that, Neil, I'll turn the call back to you.

接下來，Neil，我把電話會議交回給你。

Thanks, Mick. In conclusion, I would like to reiterate what an exciting time it is for Modine. With the introduction of the COVID-19 vaccine, we are on a road to recovery. But in the meantime, I'm so proud to be part of this organization that has been positively impacting people's lives during this difficult time. Since the pandemic began, our Building HVAC team has emphasized how important indoor ventilation is for school environments. Our school ventilation units can greatly improve indoor air quality, lower energy costs and help prevent the spread of pathogens in the air, clearly important objectives for our school districts around the country. Our HVAC systems clearly have a positive impact on people's lives from keeping schools safe to intelligent cooling and greener data centers. We will continue to invest in and grow these important product lines.

謝謝，Mick。總結來說，我想再次強調，對 Modine 而言這是一個令人振奮的時刻。隨著 COVID-19 疫苗的推出，我們正走在復甦的道路上。但同時，我也非常自豪能成為這個組織的一員，在這段艱難時期對人們的生活帶來正面影響。自疫情開始以來，我們的建築 HVAC 團隊一直強調室內通風對學校環境的重要性。我們的校園通風設備能大幅改善室內空氣品質、降低能源成本，並有助於防止空氣中病原體的傳播，這些顯然是全國各地學區非常重視的目標。我們的 HVAC 系統從維持校園安全，到智慧冷卻與更綠色的資料中心，確實對人們的生活帶來正面影響。我們將持續投資並擴大這些重要產品線。

Lastly, I would like to say a final word about 80/20. As I mentioned, we are launching a pilot of the 80/20 process with our data center expansion and have developed goals and KPIs to allow us to track our progress. I believe that this pilot and future company-wide launches will have a positive impact on all of our key stakeholders and will become the future lifeblood of Modine. 80/20 will drive our decisions, and it will become part of who we are. Although we anticipate some early positive results, this is a journey that we'll be on for some time. And I'm even more confident than when I started that Modine has great potential. We will leverage the great legacy and culture to make this a truly great company. With that, we'll take your questions.

最後，我想就 80/20 再說幾句。如我所提到的，我們正以資料中心擴張為契機啟動 80/20 流程的試點，並已制定目標與 KPI，以便追蹤我們的進展。我相信，這項試點以及未來在全公司推行，將對我們所有關鍵利害關係人帶來正面影響，並成為 Modine 未來的命脈。80/20 將驅動我們的決策，並成為我們的一部分。雖然我們預期初期會看到一些正面成果，但這是一段我們將走上一段時間的旅程。而且我比剛開始時更有信心，Modine 具有巨大的潛力。我們將善用優良的傳承與文化，把公司打造得真正卓越。接下來，我們開始回答各位的問題。

(Operator Instructions) Your first question is from Matt Summerville of D.A. Davidson.

（接線員指示）您的第一個問題來自 D.A. Davidson 的 Matt Summerville。

Maybe just start with you mentioning tariffs a couple of times during the prepared remarks, rollbacks as well. Can you talk about how that's impacting Modine? What sort of financial impact we can expect in that regard? What the company can and will do to mitigate that? How much you ultimately feel you'll be able to recoup? And also that includes the recent escalation we've seen in input costs as well. So maybe just spend a few minutes parsing those things out, talking about how we should be thinking about that?

也許先從你在事先準備的發言中提到關稅好幾次開始，還提到回調（rollbacks）。你能談談這對 Modine 的影響嗎？在這方面我們可以預期什麼樣的財務影響？公司能做、也將做些什麼來緩解？你最終覺得能回收多少？另外也包括我們近期看到的投入成本上升。所以也許花幾分鐘把這些拆解一下，談談我們應該如何看待這些因素？

Yes. Matt, it's Mick. I'll give you some of the numbers behind it and what we're seeing, and then I'll let Neil wrap up with all the work he's been doing with the supply chain to address the mitigation efforts. So last year, as you know, we had some new tariffs come through. There were some tariffs put on stainless steel and products we had coming in from China. And we eventually were given exclusions on those, and those exclusions, some of those were expired and/or removed. And now we've got some exposure there on the stainless steel side.

是的。Matt，我是 Mick。我先提供一些相關數字與我們看到的情況，接著再請 Neil 就他在供應鏈方面為因應緩解所做的工作做個總結。去年，如你所知，我們遇到一些新的關稅上路。有些關稅加在不鏽鋼以及我們從中國進口的產品上。之後我們最終獲得了豁免，但其中一些豁免已到期和／或被取消。現在我們在不鏽鋼方面就有一些曝險。

Then late in the fall, there was a large anti-dumping tariff applied of 50-plus percent tariff on aluminum products coming in from Europe. And that's been another large impact to the company. In the quarter, we estimate that it's about a $2 million to $3 million impact in Q4. And through our mitigation efforts, we've got -- both on the supply chain and where we produce, where we import materials to and where we convert these materials to finished products, we have the mitigation efforts. We think next year that that's probably a $3 million type net headwind for us. Obviously, if you annualize the $2 million to $3 million in the quarter, that's a big annual number, but we've got a number of actions between switching suppliers. I mentioned bringing product into different Modine locations and also sharing relationships between our suppliers and our customers.

接著在秋季末期，針對從歐洲進口的鋁產品，適用了一項大規模的反傾銷關稅，稅率超過 50%。這也對公司造成另一項重大影響。在本季，我們估計第四季（Q4）的影響約為 200 萬到 300 萬美元。透過我們的緩解措施——無論是在供應鏈端，或是在生產地點、材料進口地點，以及將材料轉換為成品的地點——我們都已採取緩解行動。我們認為明年這大概會是約 300 萬美元等級的淨逆風。當然，如果把單季 200 萬到 300 萬美元年化，會是一個很大的年度數字，但我們有多項行動，包括更換供應商。我也提到把產品導入不同的 Modine 據點，以及在供應商與客戶之間共享合作關係。

So I'll pause there and see, Neil, if you want to add anything from your side.

我先停在這裡，看看 Neil 你那邊是否要補充什麼。

Yes. Good. Thanks, Mick. Matt, yes, that's a great question. This has certainly highlighted an area for us where we can improve our ability around our agility and flexibility with our operations footprint and our supply chain strategies. So we're actively looking at short-term and long-term countermeasures on how we're going to mitigate. And that ranges from shifting production to plants that aren't impacted by the tariffs to shipping equipment from plants based on demand as well as the impact of tariffs.

好的。謝謝，Mick。Matt，是的，這是個很好的問題。這確實凸顯了我們可以改進的一個領域，也就是在營運版圖與供應鏈策略方面提升敏捷性與彈性。因此，我們正積極評估短期與長期的對策，來看我們將如何緩解影響。措施範圍包括把生產轉移到不受關稅影響的工廠、以及依需求與關稅影響，從不同工廠出貨設備。

So this has really opened up an opportunity for us to look at our operations footprint, to look at our supply chain strategies and break that down by commodities. And come up with some very creative ways to mitigate this issue.

因此，這也真正為我們帶來一個機會，去檢視我們的營運版圖、檢視我們的供應鏈策略，並按各項大宗原物料（commodities）加以拆解，進而提出一些非常有創意的方法來緩解這個問題。

Got it. As a follow-up, maybe Neil, I'll spend a minute talking about kind of 80/20. And I know you've only been in place for about 2 months now, so it's still very early, but maybe just if you have some high-level observations in terms of maybe what you feel will be borne out of that effort in the near-term versus maybe the longer term? And what sort of external metrics you might be willing to provide us so we can sort of gauge your progress on the deployment of 80/20 and the segmentation process associated with it?

了解。作為追問，也許 Neil，我想花點時間談談 80/20。我知道你上任大概才 2 個月，所以還非常早期，但也許你能否從高層次分享一些觀察：你覺得這項工作在短期內可能會帶來什麼成果、相較於長期又會是什麼？以及你願意提供哪些外部指標，讓我們可以衡量你在推動 80/20 以及相關的分群（segmentation）流程上的進展？

Yes. Very good question, Matt. 80/20 is a systematic way of examining the business and focusing its precious resources and I mean they're precious here. We run pretty lean on the highest growth opportunities while reducing complexity and improving the margins through product and market rationalization. And my early observations are we got to get a quick win. And I think our best opportunity -- I know our best opportunity after consulting with a leadership organization here is on the data center side. There's just some things that we can do right out of the gate that make a lot of sense, not only externally, but internally, so that we can get to drive accountability into the teams, and we can give them what they need to win, and they're very much commercial and focused with our customers. And it's pretty early in the process, to your point. We're working through what those KPIs will look like. I'm excited to say that we've got some consulting that's coming in next week that's going to help us with this journey to accelerate it. There's no need to move at a slow pace here with the data centers. I think we can accelerate that. And from that over the next, I'd say, 30 days when we get through the data analytics, we're going to be able to come up with some pretty strong KPIs in terms of what we expect to achieve.

是的。非常好的問題，Matt。80/20 是一種系統化的方法，用來檢視業務並聚焦其寶貴資源——我的意思是，這裡的資源確實很寶貴。我們以相當精實的方式運作，把資源投入在最高成長機會上，同時透過產品與市場的合理化來降低複雜度並提升毛利。我的初步觀察是，我們必須先拿到一個快速勝利（quick win）。我認為我們最好的機會——在與這裡的領導團隊討論後，我知道我們最好的機會——是在資料中心這一端。有些事情我們可以一開始就立刻做，無論對外部或內部都非常合理，如此我們就能把責任制導入團隊，並提供他們取勝所需的資源；他們也非常商業導向，並以客戶為中心。正如你所說，流程還在很早期。我們正在釐清這些 KPI 會長什麼樣子。我很興奮地說，我們下週會有顧問團隊進來，協助我們加速這段旅程。資料中心這塊沒有必要慢慢來，我認為我們可以加速。接下來我想在未來大約 30 天內，當我們完成資料分析後，我們將能提出一些相當有力的 KPI，說明我們預期要達成的成果。

Your next question is from Michael Shlisky of Colliers Securities.

您的下一個問題來自 Colliers Securities 的 Michael Shlisky。

Great job reducing the leverage over the last, well, couple of years really, but this quarter in particular. Give us a sense, like, what is the company's current kind of comfort level on what you'd like the leverage to be and how much would you leverage up for a decent-size M&A deal should 1 present itself?

過去幾年、尤其是本季，你們在降低槓桿方面做得很出色。請讓我們了解一下，公司目前對理想槓桿水準的舒適區間大概是什麼？如果出現一筆規模不小的併購（M&A）交易，你們願意把槓桿提高到什麼程度？

Great question. And more fun questions. Yes. So we've been out for quite a while talking about keeping Modine, especially when we were 80% vehicular, a leverage ratio of 1.5 to 2.5x, my hope, by the way of one of our longer-term outcomes is being more diversified industrial, less capital intensive, that we might be able to look at debt in a slightly different way. But the good news is, if we've got market tailwinds, we exit auto, we're quickly going to have a leverage ratio that is already heading towards the low end of our range.

很好的問題，而且是更有趣的問題。是的。我們已經談了相當一段時間，要把 Modine 的槓桿比率維持在 1.5 到 2.5 倍，特別是在我們 80% 來自車用業務的時候。順帶一提，我希望我們其中一個較長期的成果是，當我們變得更像多元化的工業公司、資本密集度更低時，我們或許能以稍微不同的方式看待負債。但好消息是，如果市場有順風、我們退出汽車業務，我們的槓桿比率將很快就會朝我們區間的低端前進。

So I think, Mike, one thing Neil mentioned, he's quickly accelerated our focus and asked me to do a lot of work on acquisition funnels and target. So that's one thing into your question. We've got capability within our credit agreements to do 3, 3.25 leverage and no problems there. And we did that with Luvata, if you could recall. So I think every situation is different, but I would say we can do 3, 3.25x leverage. And as long as we've got a good integration synergy plan to quickly pay it down.

所以我認為，Mike，Neil 提到的一件事是，他很快加速了我們的聚焦，並要求我在併購漏斗與目標上做大量工作。所以這是你問題的一個面向。我們在信貸協議裡有能力把槓桿做到 3 倍、3.25 倍，這方面沒有問題。而且如果你還記得，我們在 Luvata 的案子上就這麼做過。所以我認為每個情況都不同，但我會說我們可以做到 3 倍、3.25 倍的槓桿。只要我們有一個良好的整合協同計畫，能夠快速把槓桿降下來。

Got you. Maybe another question I can bring up quickly here is, I was wondering if you could give just a quick update on anything that you're doing in the EV world. We are seeing some EV truck platforms actually coming to market, small volumes, but they're starting in 2021. You've already mentioned buses. There's actually 1 bus company going public this year, at least 1 bus company going public. Just give us your sense as to what you maybe have won? And kind of how you feel about your chances of putting [not according] to technologies or other products on those kind of vehicles going forward?

了解。也許我這裡再快速提一個問題：我想知道你們在電動車（EV）領域正在做些什麼，能不能給個簡短更新。我們看到一些電動卡車平台其實已經開始上市，雖然量還小，但它們在 2021 年就開始了。你們之前也提到過巴士。實際上今年至少會有 1 家巴士公司上市，至少 1 家巴士公司會上市。能否談談你們的看法：你們可能已經拿下了哪些案子？以及你們對於未來在這類車輛上導入（[not according]）相關技術或其他產品的勝算感覺如何？

Yes. Mike, I think I talked about this a little bit last quarter, and then Neil has completely jumped in with our HDE team. And as we think about 80/20 as well, the opportunities, as you know, on electrification in truck is growing quite quickly. The amount of inbound calls and the amount of development activities we have going on has really grown quite a bit. We're working with a number of mainstream companies, none of which we can really talk about in a public forum, as you can imagine, plus a number of emerging and start-up companies, and the big success we've seen there are in production, orders, development, production on specialty vehicle and bus. The truck development cycles are quickly right behind there. And then we're also doing a lot of evaluating of what other last mile vehicles, right, will be the quickest or most logical to implement from an EV status.

是的。Mike，我想我在上個季度稍微談過一點，然後 Neil 已經完全投入我們的 HDE 團隊。當我們也在思考 80/20 時，你也知道，卡車電動化的機會正在非常快速地成長。我們收到的來電量以及正在進行的開發活動數量確實增加了不少。我們正與多家主流公司合作，其中沒有一家我們能在公開場合談論，你可以想像；另外也與多家新興與新創公司合作。我們目前看到的重大成功是在量產、訂單、開發，以及在特種車輛與巴士上的開發與量產。卡車的開發週期也很快就會緊跟其後。然後我們也在大量評估其他「最後一哩」車輛，對吧，哪些會是從 EV 角度來看最快或最合乎邏輯、最容易導入的。

Neil, do you want to add anything from your view?

Neil，你要不要從你的角度補充一下？

Yes. No, that's a great question, and this is a very exciting area, not only for Modine, but for myself. I've spent a little bit of time here in Racine, especially in the tech center. And as I go back into the tech center, I look at where we're at, and we're at an all-time high relative to EV, commercial vehicle and bus activity with our prototypes. And the team has generated some pretty substantial wins in terms of early development for programs.

是的。不，這是個很棒的問題，而且這個領域非常令人振奮，不僅對 Modine 如此，對我個人也是。我在 Racine 這邊花了一些時間，特別是在技術中心。當我回到技術中心看我們目前的狀況時，我看到我們在 EV、商用車與巴士的原型活動方面，已經達到歷史新高。團隊在一些專案的早期開發上也取得了相當可觀的成果。

And this EV activity is extremely exciting for me because it's just not component-related, it's system-related. And that's a new chapter for us at Modine in driving value and improving the value with our propositions to customers with a system-related response to solving thermal challenges in the EV section, especially with commercial vehicle and bus. So it's a great area. We're going to have some focus on that -- in that area. And the team has done a pretty good job in terms of getting out the prototypes in a timely way so that we can get some wins.

而且這些 EV 活動讓我非常興奮，因為它不只是零組件層級，而是系統層級。這對我們 Modine 來說是新的一章：透過以系統為導向的方式回應並解決 EV 領域的熱管理挑戰，特別是在商用車與巴士上，來驅動價值並提升我們對客戶的價值主張。所以這是一個很棒的領域。我們會在那個領域投入一些重點。而且團隊在及時推出原型方面做得相當不錯，讓我們能夠拿下一些案子。

Your next question is from Brian Sponheimer of Gabelli Funds.

下一個問題來自 Gabelli Funds 的 Brian Sponheimer。

And welcome certainly to Neil. Neil, just a question for you. Taking a step back to when this courtship began. What was it about Modine that attracted you from the beginning and now 2 months in, anything that confirms or disconfirms to your additional impression of the company?

也歡迎 Neil。Neil，我有個問題想請教你。回到當初開始接觸、互相了解的時候，是 Modine 的哪些特質從一開始就吸引了你？而現在加入兩個月了，有沒有什麼事情印證或推翻了你對這家公司的進一步印象？

Only positive confirmations.

只有正面的印證。

Good.

很好。

No doubt about it. Yes, no regrets at all. This has been great. My early observations in the journey, as I worked with Modine, particularly the leadership and the Board was it's an environment that's ready to evolve and change. And the best foot was put forward with the transaction and the divestiture that we're working through with Dana, and that speaks volumes in actions, right? There's a culture that's dedicated and motivated to turn the corner, and that's exciting to me. And there's very strong innovative product technologies. That was an absolute draw coming from highly engineered diversified background. That is something that in order to be successful, you have to be innovative and creative. And I see pockets of that in Modine that we just need to untap. It has a rich legacy and a strong brand. And we're going to continue to identify those target opportunities inside Modine to support the transformation. So to me, to be part of that change was pretty exciting, it drew me. Not only the team and the culture and the rich legacy of Modine and its brand, but that transformational piece, to be part of that, that was very enticing.

毫無疑問。是的，完全不後悔。這段經歷很棒。我在這段旅程中的早期觀察是：當我與 Modine 合作，特別是與管理團隊與董事會合作時，我感受到這是一個已經準備好演進與改變的環境。而且我們正在與 Dana 推進的那筆交易與剝離案，等於是把最好的姿態拿出來了，這在行動上就很能說明問題，對吧？這裡有一種專注且有動力、想要扭轉局面的文化，這讓我很興奮。同時也有非常強的創新產品技術。以我來自高度工程化、多元化的背景而言，這點對我有很大的吸引力。要成功就必須創新與有創意。我在 Modine 看到一些這樣的「亮點」，我們只是需要把它們挖掘出來。公司有深厚的傳承與強勢的品牌。我們會持續在 Modine 內部辨識那些目標機會，以支持轉型。對我而言，能成為這個改變的一部分非常令人興奮，這也是吸引我加入的原因。不只是團隊、文化、Modine 的深厚傳承與品牌，還有那個轉型的部分——能參與其中，真的非常有吸引力。

Yes. I guess, along the same lines, what do you think your mandate is from the Board and from the shareholders?

是的。我想沿著同樣的方向問，你認為董事會與股東給你的使命是什麼？

Drive the transformation of Modine, continue to do that and do that in a productive way while we maintain and respect the legacy of the company.

推動 Modine 的轉型，持續把這件事做好，並且在我們維持並尊重公司傳承的同時，以有成效的方式去完成。

Great. Well, I look forward to eventually getting out to Racine to see you and maybe in the parking lot. But I will -- we wish you the best, and I look forward to seeing what the next few years bring.

很好。我期待之後有機會到 Racine 去見你，也許在停車場碰面。不過我會——祝你一切順利，也期待看看未來幾年會帶來什麼成果。

Your next question comes from Steve Ferazani of Sidoti & Company.

下一個問題來自 Sidoti & Company 的 Steve Ferazani。

You've talked about the adding of data center capacity in the U.S. and Spain on a previous call. Just trying to get a sense of the timing on that, where the -- where you are in expanding that capacity? And is that part of the higher CapEx in Q4?

你們在之前的電話會議談到在美國與西班牙增加資料中心產能。我想了解一下時程：你們在擴充產能方面目前進展到哪裡？另外，這是否也是第四季資本支出（CapEx）較高的一部分？

Yes. Steve, it's Mick. No, I think Q4 will be just kind of across the board that's been with plant shutdowns, people working remote. There's just a general backlog of some things we need to get done as the world starts to open up.

是的。Steve，我是 Mick。不，我認為第四季會比較像是全面性的——之前因為工廠停工、大家遠端工作，導致有一些事情累積下來需要完成；隨著世界開始重新開放，這些待辦就會陸續處理。

And then with regards to the expansion for CIS in Spain, we'll be up and running in our Q4, which is great on computer room air handlers our [crawl] units.

至於西班牙 CIS 的擴產，我們會在第四季開始運轉，這對電腦機房空調處理機（computer room air handlers）以及我們的 [crawl] 機組來說是很棒的進展。

And in the chiller side in the U.S., that will be second half of our fiscal year, where we'll be in production from that side. Total capital spending is another nice thing I like about this side of our business is -- relatively speaking, these are not large capital investments for us. Large capital, in total, these are probably kind of $5 million, give or take, compared to one automotive program, which can be $5 million to $10 million just to launch one -- with one customer.

而在美國的冷水機（chiller）端，會在我們會計年度的下半年開始，屆時那一端會進入量產。總資本支出方面，我喜歡我們這一塊業務的另一個原因是——相對而言，這些對我們不是很大的資本投資。整體來看，這些大型資本大概是 500 萬美元上下，相較於一個汽車專案，光是為了替某一位客戶啟動一個專案，就可能要 500 萬到 1,000 萬美元。

So we're really excited about it. And the footprints there, by the way, again, these are 2 existing facilities with proven management team. So another reason why the capital isn't overly large as we're leveraging existing footprint in teams and employees that are quite capable to make these more complicated systems, as Neil pointed out. Neil, anything?

所以我們真的很興奮。順帶一提，那邊的據點——同樣地，這是兩個既有的設施，而且管理團隊已經證明過能力。因此資本不會過大，另一個原因是我們在利用既有的廠房、團隊與員工；他們非常有能力製造這些更複雜的系統，正如 Neil 所指出的。Neil，你有要補充嗎？

No. I think you added the fact that we're in North America as well expanding the footprint. Not only in Spain, but in North America as well. So that's great. Good question.

沒有。我想你也補充了我們在北美同樣在擴充據點。不只是在西班牙，在北美也一樣。所以很棒。好問題。

And I just wanted to follow-up on the expectation on higher metal prices and the impact. Did you -- and I just want to clarify this. Did you say that those higher metal prices didn't impact the P&L in the quarter you just reported. And then the flip side of the question would be what's the efforts to mitigate higher prices if we remain elevated for a while in terms of price resets with contracted customers or pass-throughs?

我想追問一下對金屬價格上漲及其影響的預期。我只是想確認一下：你是否表示在你們剛報告的這一季，較高的金屬價格並沒有影響損益表（P&L）？那反過來的問題是，如果價格在一段時間內維持高檔，你們有哪些措施來緩解，例如對合約客戶進行價格重設或採取轉嫁機制？

Yes, really good question and good clarifying for us. So my -- when I answered a little earlier, that was specific to tariffs. The other, I'd say, challenge inflationary issue is going to -- that's going on as the world looks past COVID is the rapid rise of commodity metals. Everybody has seen copper, aluminum, steel. And for us, we're heavy users of copper and aluminum, a little bit of steel. And in the quarter, we had a net year-over-year negative impact, pretty small for us. It's only about $2 million. The run really began in the metals since October. We've seen kind of almost a 20% increase. If you look at next year, average, if things hold or stay where the markets expect them to be with metals, we'll see about a 20% increase on average in raw materials.

是的，這是個非常好的問題，也謝謝你讓我們釐清。我——我先前稍早的回答是針對關稅（tariffs）。另外一個我會說的挑戰、通膨議題是——隨著世界逐步走出 COVID，商品金屬快速上漲。大家都看到銅、鋁、鋼的價格。我們是銅與鋁的大量使用者，鋼用得比較少。在本季，我們年對年（YoY）的淨影響是負面的，但對我們來說很小，大約只有 200 萬美元。金屬這波上漲其實從 10 月開始，我們看到大概接近 20% 的增幅。如果看明年，若市場對金屬的預期維持不變或停留在目前水準，我們的原物料平均成本大約會增加 20%。

In Q4, we expect to start to see the biggest impact the next couple of quarters. As a reminder, we have a lag. We do have pass-through. So on CIS, that business segment is much more real-time as we pass-through each bid spec program, we use current material costs. Building HVAC, much the same way, more real-time pricing to current market conditions.

在第四季，我們預期在接下來幾個季度會開始看到最大的影響。提醒一下，我們存在時間落差。我們確實有轉嫁機制。因此在 CIS，該業務部門在我們針對每個投標規格（bid spec）專案進行轉嫁時更偏即時，我們使用當前的材料成本。建築 HVAC 也是類似方式，更即時地依據當前市場狀況定價。

So then we're down to HDE, which has the long-term agreements with the large OEs. Just about every customer has a pass-through agreement. And then the difference is really the -- how they work, the lag or the timing impact of that. And we tend to think about -- on average, it is about 6 months on the HDE side. So Q4 here for us, Q1, [too] will be catching up about $6 million. So I'm estimating impact in our Q4. And next year in total, probably -- again, if things stay, anything can happen in the metals markets, but at least probably a $10 million or $12 million metal headwind as we try to pass through these prices and eventually catch up to the metals market. That would be in addition to the tariff numbers I mentioned earlier. Neil?

接著就是 HDE，它與大型 OE（原始設備製造商）簽有長期協議。幾乎每位客戶都有成本轉嫁協議。差異主要在於——它們的運作方式、落後期或其時間影響。我們通常認為——平均而言，在 HDE 端大約是 6 個月。因此對我們而言，這裡的第四季、第一季也將追趕約 600 萬美元。所以我是在估算我們第四季的影響。明年全年，可能——再次強調，如果情況維持不變，金屬市場什麼都可能發生，但至少可能會有約 1,000 萬到 1,200 萬美元的金屬逆風，因為我們試圖轉嫁這些價格並最終追上金屬市場。這將是在我先前提到的關稅數字之外的影響。Neil？

Yes. And I think that's a great explanation in terms of how we're maintaining the margins with the increase in metals. But in order to maintain the material velocity, we've also added safety stock, and we've added safety lead times. We've executed on advanced bookings, and we're redirecting some sea freight to less congested ports to prevent disruption. So it's not only on the margin side, but we have a lot of activity in order to maintain on-time delivery and lead times across the facilities.

是的。我認為這對於我們如何在金屬上漲的情況下維持毛利率，是個很好的說明。但為了維持材料周轉速度（material velocity），我們也增加了安全庫存，並拉長了安全交期。我們已執行提前預訂（advanced bookings），並將部分海運改導至較不壅塞的港口以避免中斷。因此不僅是毛利端，我們也做了大量工作，以維持各廠區的準時交付與交期表現。

We have Matt Summerville from D.A. Davidson return to the queue.

我們有來自 D.A. Davidson 的 Matt Summerville 回到提問序列。

Yes. In the past, you've talked about the revenue associated with this large data center customer. I'm sort of eyeballing a $30 million kind of revenue number from that customer in fiscal '21. First, is that accurate?

是的。過去你們談過與這位大型資料中心客戶相關的營收。我大致估算該客戶在 2021 財年的營收約 3,000 萬美元。第一，這樣的估算正確嗎？

And then second, Mick, you've talked in the past about how you expect that to ramp in fiscal '22. What's your current read or current update on where you think that number goes next year?

第二，Mick，你過去談到你預期它在 2022 財年會爬升。你目前的看法或最新更新是，你認為明年那個數字會到哪裡？

Yes. A good question. The CIS has really 2 pieces. Again, for everybody making 1 step back to also Neil's comments earlier, we -- last year, we had about $40 million of data center business in Building HVAC. That is primarily U.K. systems, great margin business, right? We want to do more of that and that's what we're also expanding globally when we mentioned Spain and North America. When we acquired Luvata, there were 2 pieces. And probably, on average, about evenly mixed. There's about $40 million of coils that we sell heat exchangers into the data center market. And we had one major hyperscale customer of about kind of equal size. So we've run in data centers in CIS in that $60 million, $80 million kind of range.

是的，問得很好。CIS 其實有兩個部分。再次提醒大家，先退一步也呼應 Neil 先前的評論——去年我們在建築 HVAC 的資料中心業務約 4,000 萬美元。那主要是英國系統，屬於高毛利業務，對吧？我們希望做更多，這也是我們提到西班牙與北美時所說的全球擴張方向。當我們收購 Luvata 時，有兩個部分，而且平均來看大概各占一半。大約有 4,000 萬美元是我們銷售線圈（coils），也就是把熱交換器賣到資料中心市場。另外我們有一個主要的超大規模（hyperscale）客戶，規模大致相當。因此我們在 CIS 的資料中心業務大概落在 6,000 萬到 8,000 萬美元的區間。

This year, as we go forward and what you're picking up is mostly this year, our biggest sales will be that $30 million, $40 million worth of heat exchangers that we sell into the data center market to multiple customers. And the large hyperscale customer over the last year has really declined a pretty -- in this quarter, next quarter, very nominal level. They're in the middle of a technology transition. So much lower. I can't disclose exact numbers, Matt, for you. But again, about, think of it as $30 million to $40 million of heat exchangers, coil sold to multiple data center customers plus our 1 hyperscale customer. In this year in total, sales will be very, very small.

今年，隨著我們往前走，你所看到的主要是今年，我們最大的銷售會是那 3,000 萬到 4,000 萬美元的熱交換器，賣到資料中心市場的多個客戶。至於那個大型 hyperscale 客戶，在過去一年其實已經下滑得相當——在本季、下季都只剩非常名目性的水準。他們正處於技術轉換期，所以大幅降低。我無法向你揭露確切數字，Matt。但再次說明，把它想成：3,000 萬到 4,000 萬美元的熱交換器／線圈，賣給多個資料中心客戶，再加上我們那 1 個 hyperscale 客戶；而該 hyperscale 客戶今年全年銷售會非常、非常小。

And then I think you asked about the ramp-up, and Neil talked about it. They have their building, their construction schedules, their site selected. We actually have completed all of our technology testing, and this is a very complicated new proprietary system for this customer. And we're very encouraged and optimistic and have a good line of sight to the ramp-up in '21 here for the new sites.

另外我想你問的是爬升（ramp-up），Neil 也談到了。他們有自己的機房建置與施工時程，也已選定場址。我們其實已完成所有技術測試，這對該客戶而言是一套非常複雜、全新的專有系統。我們非常受到鼓舞、也很樂觀，並且對於 2021 年在新場址的爬升有相當清晰的能見度。

We would expect them to get back to a normal level this year as we start to ramp that up. One or 2 years into Luvata, after we acquired them, we saw really big growth. We almost kind of doubled in sales that's hard to stay beyond that point, I'd say. So short run, we see this customer getting back to an average, a normal run rate for them. And then beyond that, whether there's upside to hit a high water mark, too early to tell. But nonetheless, really good opportunity here for us in the new year to have the new launch starts. Neil, do you want to add anything?

我們預期隨著開始推進爬升，他們今年會回到正常水準。收購 Luvata 後的一到兩年，我們曾看到非常大的成長，銷售幾乎翻倍；我會說要在那之後持續維持就比較難。因此短期來看，我們看到這位客戶會回到其平均、正常的運行速率。至於再往後是否有上行空間、能否再創新高，現在還太早判斷。但無論如何，對我們而言，新年度的新產品／新專案啟動會是很好的機會。Neil，你要補充什麼嗎？

No, I think you covered it really well, Mick. Like in any industry, when there's lots of capital deployment, there's a digestion period, right? And we're seeing some digestion periods. And looking at alternative spends, the alternative spends have been in the colos. And the good news for us in Modine is we have products and services and offerings in both either colocation or with hyperscale. So depending on where they spend and how they deploy their capital, we're in a good position to where we can win in both avenues.

不，我認為你說得很完整，Mick。就像任何產業一樣，當資本投入很多時，會有一段消化期，對吧？我們確實看到一些消化期。再看替代性支出（alternative spends），這些替代性支出是在共置機房（colos）上。對我們 Modine 來說的好消息是，我們在共置（colocation）與 hyperscale 兩邊都有產品、服務與解決方案。因此不論他們把錢花在哪裡、如何部署資本，我們都處在一個很好的位置，可以在兩條路徑上都取得勝利。

Got it. And then just 1 follow-up on M&A. How long do you think it will take Modine to develop a pipeline to start to cultivate deals? And is there anything you would characterize as actionable in the pipeline currently? Or is this sort of still very early innings in that process? Is it going to take the better part of, say, the next 6 to 12 months to get anything done?

了解。那再追問一題關於併購（M&A）。你認為 Modine 需要多久才能建立一個管線來開始培育交易？目前管線裡是否有你會形容為可執行（actionable）的項目？還是說這個流程仍在非常早期的階段？要完成任何交易，是否大概要花上接下來 6 到 12 個月的大部分時間？

Well, I'd tell you, my new boss is pushing hard. So there is -- I would say, we do have a pipeline. We've been maintaining a good pipeline and there are actionable opportunities to me, and then I'll pause and let Neil answer. I think making sure we get through first digesting 80/20 to ensure we're not pursuing something just transactionally, but it's filling a strategic need is where we want to go. Once we start going, as everybody knows, it's the multi-month all-encompassing project plus the integration.

嗯，我會告訴你，我的新老闆推得很用力。所以——我會說，我們確實有一個管線。我們一直維持不錯的管線，而且在我看來有可執行的機會；我先停一下讓 Neil 回答。我認為我們要先確保把 80/20 消化完，確保我們不是只為了交易而追逐某個案子，而是它能補足策略需求，這才是我們想去的方向。一旦開始推進，如大家所知，這會是一個跨好幾個月、涵蓋各面向的專案，外加後續整合。

So personally, I'd like to make sure we go after the most important and what Neil is asking us to put together is think of it as a scorecard and a force ranking. What's in the pipeline was actionable, but then how do we force rank them.

所以就我個人而言，我希望確保我們追求的是最重要的項目；而 Neil 要我們整理的，是把它想成一張評分卡（scorecard）與強制排序（force ranking）。管線裡的項目是可執行的，但接著我們要如何把它們做強制排序。

Yes. And I think Mick and the team has done a really good job in terms of thinking through exactly that. And then we want to overlay that with a filter, right, a strategic filter in terms of where we want to go with our acquisition strategies. Does it fulfill a strategic initiative? Does it fulfill strategic need? Is it backwards, forward or sideways integration? What are the opportunities for us? As they hit a certain profile, we'll have a different type of profile for the -- for our targets. And then we'll monitor the milestone process as a check through the filters, and that's exactly the system, the rigor and the discipline behind that that Mick and his team are starting to put together. And then 80/20 will be a very good lens for us to start to introduce some potential candidates inside of that filter.

是的。我認為 Mick 和團隊在思考這件事上做得非常好。接著我們要再疊加一個篩選器（filter），也就是策略篩選：我們的併購策略想往哪裡走？它是否符合某項策略倡議？是否滿足策略需求？是向後、向前或橫向整合？對我們而言有哪些機會？當它們符合某個特定輪廓時，我們對目標公司會有不同的輪廓要求。然後我們會監控里程碑流程，作為穿越這些篩選器的檢核；而這正是 Mick 和他的團隊正在建立的系統、嚴謹度與紀律。再者，80/20 會是一個非常好的視角，讓我們開始在該篩選器中導入一些潛在候選標的。

I am showing there's no further questions in the queue. I'd like to turn the call back to Neil for any closing remarks.

我這邊顯示提問序列中沒有其他問題了。我想把電話交回給 Neil，請他做任何結語。

Yes. One last comment. I'd like to recognize Mick for his leadership as the interim CEO. Mick did a great job stabilizing the company and preparing the organization for change. His efforts have allowed for a very smooth onboarding and transition for me, and I thank Mick for his commitment to Modine.

是的，最後一點。我想肯定 Mick 在擔任臨時執行長期間的領導。Mick 在穩定公司並為組織變革做準備方面做得非常出色。他的努力讓我能非常順利地到任並完成交接，我也感謝 Mick 對 Modine 的投入與承諾。

Thank you, Neil. And thanks, everybody, on the line for joining us this morning. A replay of the call will be available from our website in about 2 hours. We hope everybody has a great day. Thanks.

謝謝你，Neil。也謝謝各位今天早上在線上加入我們。本次電話會議的重播將在約 2 小時後於我們的網站提供。祝大家有美好的一天。謝謝。

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

各位女士先生，今天的電話會議到此結束。感謝各位的參與。您現在可以掛線。