Modine Manufacturing Company (MOD) 2021 Q2 法說會逐字稿

Good morning, ladies and gentlemen and welcome to Modine Manufacturing Company's Second Quarter Fiscal 2021 Earnings Conference Call. (Operator Instruction] As a reminder, this conference call is being recorded.

各位女士、先生，早安，歡迎參加 Modine Manufacturing Company 2021 會計年度第二季財報電話會議。（接線員指示] 提醒各位，本次電話會議將被錄音。

I would now like to turn the conference over to your host, Ms. Kathy Powers, Vice President, Treasury, Investor Relations and Tax. Please go ahead.

現在我想將電話會議交給本次主持人——財務（資金）、投資人關係與稅務副總裁 Kathy Powers 女士。請開始。

Good morning, and thank you for joining our conference call to discuss Modine's second quarter fiscal 2021 results. I'm joined on this call by Mick Lucareli, our interim President and Chief Executive 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.

各位早安，感謝各位參加我們的電話會議，一同討論 Modine 2021 會計年度第二季的業績。我與本次電話會議的另一位與會者為 Mick Lucareli，我們的代理總裁兼執行長。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，其內容如同我們的財報新聞稿以及公司向美國證券交易委員會提交之文件中所述。

With that, it is my pleasure to turn the call over to Mick Lucareli.

接下來，我很高興將電話會議交給 Mick Lucareli。

Thank you, Kathy, and good morning, everyone. We have a lot of good news to reward so I'll start with a brief summary of the highlights. Q2 results were significantly ahead of our expectations, including higher earnings, margins and cash flow. Better market conditions, combined with significant cost control, resulted in a 40% adjusted EBITDA increase. In addition, we generated $73 million of year-to-date free cash flow, bringing our leverage ratio back to pre-pandemic levels.

謝謝你，Kathy，各位早安。我們有很多好消息要分享，因此我先簡要總結重點。第二季的結果顯著優於我們的預期，包括更高的獲利、利潤率與現金流。較佳的市場狀況加上嚴格的成本控管，使調整後 EBITDA 成長 40%。此外，我們年初至今已創造 7,300 萬美元自由現金流，使槓桿比率回到疫情前水準。

Next, we made significant progress on our strategic initiatives this quarter, including an agreement to sell our liquid-cooled automotive business, which makes up the majority of our automotive segment. Our Board authorized a $50 million share repurchase program. This is timely, given our improved liquidity position and provides additional flexibility to manage our future cash flows.

其次，本季我們在策略性計畫上取得重大進展，包括同意出售我們的液冷式汽車業務，該業務占我們汽車事業部的大部分。我們董事會核准了 5,000 萬美元的庫藏股回購計畫。鑑於我們流動性狀況改善，這項措施正逢其時，並提供額外彈性以管理未來現金流。

And finally, I'd like to make a quick comment on the CEO search. The process has been going very well with very good outside candidates. We are in the final stages of the search and anticipate completing the process within the coming weeks.

最後，我想就執行長遴選快速說明。整體流程進展非常順利，且有非常優秀的外部候選人。我們已進入遴選最後階段，預期將在未來幾週內完成。

Now before turning to the quarterly results, I would like to provide some more details about our automotive announcement on Page 4. Earlier this week we announced an agreement to sell the majority of our automotive business, which is a significant step in our strategic transformation. This transaction provides our company with a number of benefits, including reallocating capital and resources the higher-returning industrial businesses, especially those within our Building HVAC segment; eliminating significant liabilities relating to future restructuring along with pension costs and additional cash investments; and finally, this transaction will lower our future capital spending, improving our cash profile.

在進入季度業績之前，我想先就第 4 頁的汽車業務公告提供更多細節。本週稍早我們宣布已達成協議，將出售我們汽車業務的大部分，這是我們策略轉型的重要一步。此交易為公司帶來多項效益，包括將資本與資源重新配置至報酬率更高的工業業務，特別是建築 HVAC 事業部內的業務；消除與未來重整相關的重大負債，以及退休金成本與額外現金投入；最後，此交易將降低我們未來資本支出，改善現金結構。

The transaction includes 7 manufacturing locations around the globe, including several in Western Europe and our headquarters in Germany. It also includes the assets and liabilities associated with these locations. While not expecting significant proceeds, we are foregoing significant future cash investments, including ongoing capital spending in future liabilities along with pension and other employee-related costs. Also, I want to highlight that this is a leverage-neutral transaction from a covenant standpoint, consistent with the provisions in our credit agreement. And last, we expect the transaction to close in the first half of calendar 2021, subject to regulatory approvals and customary closing condition.

本交易涵蓋全球 7 個製造據點，其中包括西歐的數個據點以及我們位於德國的總部，同時也包含與這些據點相關的資產與負債。雖然我們不預期會有顯著的出售收益，但我們將避免未來大量現金投入，包括持續的資本支出、未來負債，以及退休金與其他員工相關成本。此外，我要強調，從契約條款（covenant）的角度來看，這是一筆槓桿中性（leverage-neutral）的交易，符合我們信貸協議中的相關規定。最後，在取得監管核准並滿足慣常交割條件的前提下，我們預期交易將於 2021 年曆年上半年完成交割。

Please turn to Slide 5. I would like to provide some additional details on both the liquid-cooled business that we're selling and the air-cooled business that we're planning to address next as part of our overall auto strategy. Starting with the liquid-cooled business, it's averaged about $300 million in revenues over the last several years and has been recently running below that level due to general economic conditions. As we've discussed in the past, this has historically been a negative cash flow business with the annual capital spending offsetting cash earnings. In addition, this business has required significant restructuring and would require additional investments going forward. Given the large amount of historical investment, the liquid-cooled business carries a significant amount of net asset. Based on the transaction, we anticipate a large non-cash impairment charge in Q3. Our view is then that this business is best in the hands of a strategic owner that has the size, scale and desire to make the required investments.

請翻到投影片第 5 頁。我想就我們正在出售的液冷式業務，以及作為整體汽車策略下一步將處理的氣冷式業務，提供更多細節。先談液冷式業務：過去幾年其營收平均約 3 億美元，近期因整體經濟狀況而低於該水準。如同我們先前所討論，該業務歷來為負現金流業務，年度資本支出抵銷了現金獲利。此外，該業務需要大幅重整，未來也將需要額外投資。由於過去投入金額龐大，液冷式業務帳上承載相當可觀的淨資產。基於本次交易，我們預期第三季將認列一筆大額的非現金減損費用。我們的看法是，這項業務最適合交由具備規模、量體與投資意願的策略性買家來經營，以進行所需投資。

Now, moving on to the air-cooled business, which is the remaining business in our automotive segment and includes the plants in Austria and Germany. This business represents approximately $100 million of revenue and is currently running at a lower rate due to the global pandemic. The majority of this business is comprised of automotive condensers, which are produced in Austria. Again, as previously discussed, this business runs much closer to breakeven on an adjusted EBITDA basis and will require minimal capital going forward. We're actively exploring alternatives for portions of this business and are currently engaged in discussions with interested strategic buyers. For the right partner, this business has value due to a relatively new facility, industry leading products and intellectual properties along with a solid order book.

接著談氣冷式業務，這是我們汽車事業部的剩餘業務，包含位於奧地利與德國的工廠。該業務營收約 1 億美元，且目前因全球疫情而處於較低的運轉水準。此業務大部分為汽車冷凝器，於奧地利生產。同樣地，如先前所述，該業務在調整後 EBITDA 基礎上更接近損益兩平，且未來所需資本投入極少。我們正積極為該業務的部分項目探索替代方案，並已與有興趣的策略性買家進行洽談。對合適的合作夥伴而言，該業務具備價值，原因包括相對新穎的廠房、業界領先的產品與智慧財產，以及穩健的訂單能見度。

We have some more work to do, but much of the heavy lifting is complete with the automotive separation done and the recent sale announcement. We're optimistic about addressing the small amount of remaining business and further reducing future liabilities and cash needs.

我們仍有一些工作要完成，但隨著汽車業務分拆完成以及近期出售公告發布，許多艱鉅工作已告一段落。我們對於處理剩餘少量業務、進一步降低未來負債與現金需求，抱持樂觀態度。

Now let's cover the second quarter segment results on Page 6. CIS sales were down 14% from the prior year, primarily due to COVID-related declines in our commercial HVAC and refrigeration markets, along with lower data center sales. Approximately half the decline relates to lower sales to our largest data center customer. As we have previously discussed, the pullback is due to one customer's reduction in construction and is expected to continue through Q4, after which we will begin to see the recovery.

接下來我們看第 6 頁的第二季事業部業績。CIS 銷售額較去年同期下滑 14%，主要原因是 COVID 相關因素導致商用 HVAC 與冷凍市場下滑，以及資料中心銷售降低。約一半的下滑來自我們最大資料中心客戶的銷售減少。如同先前所述，該縮減係因單一客戶降低建設所致，預期將持續至第四季，之後我們將開始看到復甦。

We're actively working on the testing of our next-generation product and are encouraged by the recent order outlook for next year.

我們正積極進行下一代產品的測試，並對明年的近期接單展望感到鼓舞。

We continue to invest in our coating business, where we're receiving positive feedback from our OEM customers on a new coding process. Adjusted EBITDA was down 7% on lower sales. But I'm pleased to report the margin improved 70 basis points despite lower revenue. Good downside conversion was due to cost-savings initiatives taken earlier in the year. And a good trend with regards to coils margin improvement. In fact, if we adjust for the negative effect of lower data center sales, the margin would have improved by approximately 300 basis points versus the prior year on lower sales.

我們持續投資於塗層（coating）業務，我們的 OEM 客戶對一項新的塗層製程給予正面回饋。由於銷售下降，調整後 EBITDA 下滑 7%。但我很高興報告，儘管營收較低，利潤率仍提升 70 個基點。良好的下行轉換（downside conversion）來自於年初採取的節省成本措施。此外，盤管（coils）利潤率改善也呈現良好趨勢。事實上，若我們調整掉資料中心銷售下降的負面影響，則在銷售下滑的情況下，利潤率相較去年同期仍可提升約 300 個基點。

Please turn to Slide 7. The Building HVAC segment had another great quarter with sales up 11% from the prior year. This was primarily driven by a significant increase in data center sales due to our aggressive growth plans. Looking forward, we expect continued growth in our data center sales in the coming quarters and projects we'll finish the fiscal year up more than 50%. In addition, we also had a strong preseason orders of heating products, which was partially offset by lower sales of ventilation and air conditioning products. On the ventilation side, sales for the hospitality market have been hard hit by COVID-19 causing us to shift focus to both the schools and healthcare markets. We see future growth opportunities with our ventilation products given the growing focus on the benefits of proper ventilation.

請翻到投影片第 7 頁。建築 HVAC 事業部本季再度表現亮眼，銷售額較去年同期成長 11%。主要動能來自我們積極的成長計畫，帶動資料中心銷售大幅增加。展望未來，我們預期未來幾季資料中心銷售將持續成長，並預估本會計年度全年將成長超過 50%。此外，我們的供暖產品也取得強勁的旺季前訂單（preseason orders），但部分被通風與空調產品銷售下滑所抵銷。在通風方面，旅宿（hospitality）市場的銷售受到 COVID-19 嚴重衝擊，促使我們將重心轉向學校與醫療照護市場。隨著市場日益重視良好通風的效益，我們看好通風產品的未來成長機會。

I want to highlight that adjusted EBITDA increased 42% from the prior year, primarily due to higher sales volume and favorable product mix. This resulted in a 500 basis point improvement in EBITDA. The recent performance of this segment also demonstrates the potential for Modine after we complete the exit of the auto business and continue to reallocate capital. For example, we're leveraging our success in brand in the U.K. to produce data center products in mainland Europe. And equally exciting are the increasing opportunities in the U.S. We're industrializing computer room air handlers and chillers in our existing U.S. manufacturing sites and are planning to be in production next fiscal year.

我想強調，調整後 EBITDA 較去年同期成長 42%，主要受惠於更高的銷售量與有利的產品組合，帶動 EBITDA 利潤率提升 500 個基點。該事業部近期的表現也展現了 Modine 在完成退出汽車業務並持續重新配置資本後的潛力。舉例來說，我們正運用在英國品牌的成功經驗，於歐洲大陸生產資料中心產品。同樣令人振奮的是，美國市場的機會也在增加。我們正於既有的美國製造據點推動電腦機房空氣處理機（computer room air handlers）與冷水機（chillers）的工業化量產，並規劃於下一會計年度投入生產。

Please turn to Slide 8. Sales in the HDE or Heavy Duty Equipment were down 12% from the prior year but a significant improvement from Q1 as markets continue to stabilize. Although sales decreased the most of our major end markets, we actually had higher sales to commercial vehicle and off-highway customers in Asia, partially offsetting the declines in North America. Adjusted EBITDA was up 42% on a 460 basis point margin improvement despite lower sales. HDE significantly benefited from temporary cost reductions along with permanent actions, including headcount reductions taken earlier in the year, procurement savings and improved operational performance. We're cautiously optimistic about further market recoveries in this segment, while balancing the impact of higher material costs and recently announced tariff.

請翻到第 8 頁。HDE（重型設備）銷售額較去年同期下降 12%，但相較第一季有顯著改善，因為市場持續趨於穩定。雖然銷售在我們主要終端市場中降幅最大，但我們在亞洲對商用車與非公路客戶的銷售其實更高，部分抵銷了北美的下滑。儘管銷售較低，受惠於毛利率提升 460 個基點，調整後 EBITDA 仍成長 42%。HDE 顯著受益於臨時性成本降低以及永久性措施，包括年初已採取的人力精簡、採購節省與營運績效改善。我們對該細分市場進一步復甦抱持審慎樂觀，同時也會平衡較高材料成本與近期宣布的關稅所帶來的影響。

Please turn to Slide 9, and I'll shift to the automotive segment. Sales were down 5% from the prior year, which also represents a large sequential improvement from the first quarter. Auto sales recovered faster than most people anticipated as we saw lower sales in North America and Europe, partially offset by higher sales in Asia. Adjusted EBITDA improved significantly, up $5.7 million from the prior year, primarily due to cost reductions and other temporary COVID-related savings actions. Given the large amount of temporary cost reductions, we expect that the auto segment margins will return to more normal levels in the second half of the year. I want to point out that we do not anticipate that the recent announcement will change how we report our earnings in this segment. Obviously, things can change, but for now, we expect to report segment sales and earnings in a consistent manner until the transaction closes.

請翻到第 9 頁，我將轉到汽車事業部。銷售額較去年同期下降 5%，這也代表相較第一季有很大的季比改善。汽車銷售復甦速度比多數人預期更快；我們在北美與歐洲的銷售較低，但部分被亞洲較高的銷售所抵銷。調整後 EBITDA 顯著改善，較去年同期增加 570 萬美元，主要來自成本降低以及其他與 COVID 相關的臨時節省措施。鑑於臨時性成本降低的幅度很大，我們預期汽車事業部的利潤率將在下半年回到較正常的水準。我也要指出，我們不預期近期的公告會改變我們在此事業部的獲利揭露方式。當然情況可能改變，但就目前而言，在交易完成之前，我們預期將以一致的方式報告該事業部的銷售與獲利。

Please turn to Slide 10. As I mentioned at the beginning, our team adjusted to the challenging economic environment earlier in the year by quickly implementing significant cost reductions. We prepared for the worst case, but we were pleased to see sales rebounded somewhat more quickly than expected. Second quarter sales declined by $39 million or 8% compared to the prior year, driven mostly by the global pandemic and associated economic conditions. Overall, our results benefited from a combination of markets recovering better than we anticipated and aggressive cost-cutting measures resulting in both temporary and permanent savings.

請翻到第 10 頁。如同我在一開始提到的，我們的團隊在今年較早時就迅速實施大幅成本削減，以因應充滿挑戰的經濟環境。我們為最壞情境做準備，但也很高興看到銷售反彈的速度比預期更快一些。第二季銷售較去年同期減少 3,900 萬美元或 8%，主要受全球疫情及相關經濟情勢所驅動。整體而言，我們的結果受益於市場復甦優於預期，以及積極的成本削減措施所帶來的臨時與永久性節省。

I'm very pleased to report our gross profit was $81 million, which was higher than the prior year by $5 million on lower sales, and the gross margin increased by 240 basis points to 17.5%. SG&A was $17 million or 25% lower than the prior year. Given the significant uncertainties surrounding the pandemic, we maintain strict cost controls over spending and benefited from previous FTG savings. Some of the reductions should be viewed as largely temporary, representing about 1/3 of the SG&A savings this quarter.

我很高興報告，我們的毛利為 8,100 萬美元，在銷售較低的情況下仍較去年同期增加 500 萬美元，毛利率提升 240 個基點至 17.5%。SG&A 為 1,700 萬美元，較去年同期下降 25%。鑑於疫情帶來的重大不確定性，我們對支出維持嚴格的成本控管，並受益於先前的 FTG 節省。其中部分降幅應視為主要屬於臨時性，本季約占 SG&A 節省的 1/3。

Another driver of lower SG&A was the significant reduction in auto separation costs. Adjusted EBITDA of $55 million was better than the prior year by $16 million or 40%. Please see our Appendix for itemized list of adjustments and a full reconciliation to our U.S. GAAP results. Our second quarter adjustments totaled $7.6 million including $5.5 million from CEO transition costs, mostly related to severance and benefit-related expenses owed to the previous CEO. Most of these will be paid over multiple years. We also incurred $1.5 million of restructuring expenses related to plant consolidation activities. And our adjusted earnings per share was $0.43, higher than the prior year by over 200%.

SG&A 降低的另一個因素，是汽車分離成本大幅下降。調整後 EBITDA 為 5,500 萬美元，較去年同期增加 1,600 萬美元或 40%。請參閱我們的附錄，以取得調整項目的明細清單，以及與美國 GAAP 結果的完整調節。本公司第二季調整項目合計 760 萬美元，其中包含 550 萬美元的 CEO 交接成本，主要與支付給前任 CEO 的資遣與福利相關費用有關。這些費用多數將在多年內支付。我們也發生 150 萬美元的重整費用，與工廠整併活動相關。此外，我們的調整後每股盈餘為 0.43 美元，較去年同期提高逾 200%。

Let's turn to cash flow and debt on Slide 11. I'm pleased to report our free cash flow for the first 6 months of fiscal '21 was $73 million, which represents a $97 million improvement over the prior year. The positive cash flow is driven by numerous items, including lower spending on the automotive exit strategy, favorable working capital and nominal capital spending. We used cash in the quarter to repay debt, increasing our available liquidity. And I'm very pleased to report that our resulting leverage ratio was 2.2, back to pre-pandemic levels and within our target range.

接著看第 11 頁的現金流與負債。我很高興報告，2021 會計年度前 6 個月的自由現金流為 7,300 萬美元，較去年同期改善 9,700 萬美元。正向現金流由多項因素驅動，包括汽車退出策略支出降低、營運資金有利變動以及資本支出不高。我們在本季用現金償還債務，提高可用流動性。我也很高興報告，最終的槓桿比率為 2.2，回到疫情前水準，並落在我們的目標區間內。

We expect slightly positive cash flow for the remainder of the year, resulting in full year free cash flow of $70 million to $80 million.

我們預期今年剩餘期間的現金流將略為正向，使全年自由現金流達到 7,000 萬至 8,000 萬美元。

The anticipated lower second half cash is due to a number of timing factors, including the deferral of certain cash items. For example, we have approximately $20 million in pension contributions along with the phase-out of payroll tax deferrals under the CARES Act. We also expect higher capital spending in the second half of the fiscal year along with some working capital growth, in-line with the recovery. Overall, the cash and debt position is a great story for Modine, especially given the current economic environment.

預期下半年現金較低，主要是多項時點因素所致，包括部分現金項目的遞延。例如，我們約有 2,000 萬美元的退休金提撥，以及依《CARES 法案》逐步取消薪資稅遞延。我們也預期在會計年度下半年資本支出將提高，並隨著復甦出現部分營運資金成長。整體而言，就 Modine 而言，現金與負債部位是一個很好的故事，尤其是在目前的經濟環境下。

Now let’s turn to Slide 12 and our fiscal '21 outlook. Like many companies, we're hesitant to provide full-year guidance, especially given the ever-changing dynamics prior of COVID. Based on the recent results, our full-year outlook has clearly improved. But we want to be careful not to extrapolate all of the Q2 upside through the balance of the year. We have a reasonable amount of visibility into our third fiscal quarter ending December 31. Our Q4 is more uncertain, especially as it spans into calendar 2021.

現在請翻到第 12 頁，談談我們 2021 會計年度的展望。和許多公司一樣，我們對提供全年指引持保留態度，尤其是在 COVID 之前就已存在、且持續變動的情勢下。根據近期結果，我們的全年展望顯然已改善。但我們也希望謹慎，不要把第二季的上行表現直接外推到今年剩餘期間。我們對截至 12 月 31 日的第三會計季有相當程度的能見度。第四季的不確定性較高，尤其因為它跨入 2021 年曆年。

We expect our net sales to be down between 7% and 12% from the prior year, and for adjusted EBITDA to be in a range of $155 million to $165 million. While the markets are changing continuously, we expect sequential revenue improvement in the third and fourth quarters.

我們預期淨銷售將較去年同期下降 7% 至 12%，調整後 EBITDA 預計落在 1.55 億至 1.65 億美元之間。雖然市場持續變動，我們預期第三季與第四季營收將呈現逐季改善。

Positives include good momentum as we enter the heating season and a solid data center order book, plus strong vehicular market trends in Asia. We also see some higher costs in the second half, particularly related to employee compensation expenses as we reverse some of the temporary cost control measures taken earlier in the year, as well as higher metals prices, including the negative impact of the newly announced tariffs in the U.S. I also want to point out that our outlook includes the automotive business that is subject to the recent sale announcement. Our full-year results could be different if this or another transaction is completed before fiscal year-end.

正面因素包括：進入供暖季節時的良好動能、穩健的資料中心訂單能見度，以及亞洲車用市場趨勢強勁。我們也看到下半年部分成本上升，特別是員工薪酬費用，因為我們將回轉今年較早採取的一些臨時性成本控管措施；此外金屬價格也較高，並包含美國新宣布關稅所帶來的負面影響。我也要指出，我們的展望包含近期宣布出售、且受其影響的汽車業務。若在會計年度結束前完成此交易或其他交易，我們的全年結果可能會有所不同。

And finally, I want to thank our employees who have made numerous sacrifices this year and to the many shareholders who have fully supported our transformation. With that, we'll now take your questions.

最後，我要感謝今年做出許多犧牲的員工，以及全力支持我們轉型的眾多股東。接下來，我們將開始回答各位的提問。

[Operator Instruction] Our first question comes from Matt Summerville with D.A. Davidson.

[Operator Instruction] 我們的第一個問題來自 D.A. Davidson 的 Matt Summerville。

A couple of questions. First, with respect to your large data center customer within CIS, can you talk about how you expect that revenue to ramp up during fiscal '22 and what you think the overall potential book of business could look like on an annual basis for that customer compared to prior peak levels?

有幾個問題。第一，關於 CIS 內你們的大型資料中心客戶，你能談談你們預期 2022 會計年度該客戶的營收將如何爬升（ramp up），以及你認為該客戶在年度基礎上的整體潛在業務量（book of business）相較於先前高峰水準可能會是什麼樣子嗎？

Matt, good question. So we've been on, as you know, the last few quarters have unfortunately been year-over-year decline than we've been entering a period here where in the quarter, we had very little in the way of actual sales to the customer. And Q4 as well, we'll have very little in the way of sales in total. And then, as I mentioned, we're working now on the testing and development of what they're going to use in the next generation -- for the next-generation product. We're starting to see those purchase orders and construction plans come in place with a ramp in our Q4. We'll actually start building products in our March quarter as well, a little hard to forget the actual timing of shipments and revenue, but we see that being the inflection point. And then from where we come from we're running significantly below this year where we were 2 years ago. Last year was cut in half, and this year was again cut in half.

Matt，問得好。如你所知，過去幾個季度我們不幸地呈現年對年下滑，而我們正進入一段期間：在本季，我們對該客戶幾乎沒有實際銷售。第四季也一樣，整體銷售也會非常少。接著，如我提到的，我們目前正在進行他們下一代產品將採用方案的測試與開發。我們開始看到採購訂單與建置計畫逐步到位，並在我們的第四季出現爬升。我們也會在 3 月所在的季度開始生產產品；實際出貨與認列營收的時間點有點難以精確掌握，但我們認為那會是轉折點。從我們目前的狀況來看，今年的水準明顯低於兩年前；去年減半，而今年又再減半。

So without going into too much detail, and detail I can't provide in a public setting, what I can tell you is next year -- next fiscal year would be a significant increase in planned volumes in production, at almost about like a double run rate. So a real significant rebuild. And even at that run rate, next year would be well below our high-water mark. So we're optimistic. We're talking to that customer about an opportunity. From there, about another significant increase to get back to where we peaked out probably more than a year, a year and a half ago. So again, probably another quarter here of slow sales and then the activity is really ramped up. And production beginning in our Q4, next year we see a significant jump in sales. And at that point, we're still well below where we kind of peaked out and an opportunity to go significantly higher from there.

因此不深入太多細節——而且有些細節我在公開場合也無法提供——我能告訴你的是，明年——下一個會計年度——我們在生產端規劃的產量將會顯著增加，幾乎接近於把目前的運轉速率翻倍。所以會是一個非常顯著的重建。而且即使在那樣的運轉速率下，明年仍會遠低於我們過去的高峰水位。因此我們是樂觀的。我們正在與那位客戶討論一個機會。接下來，還有另一個顯著的增量，讓我們回到大概一年到一年半前的峰值水準。所以同樣地，可能還會有一個季度的銷售偏慢，之後活動就會真正加速。並且在我們明年第四季開始生產，明年我們會看到銷售大幅跳升。而在那個時間點，我們仍然遠低於先前的峰值，並且從那裡還有機會再顯著往上。

Got it. And then just as a follow-up. Can you talk about what you anticipate the impact to be as it pertains to steel prices moving higher as well as you mentioned some sort of tariff action, maybe if you could provide a little bit more detail on that. But if you could sort of parse that out and be a little bit more granular about what that impact is going to look like.

了解。接著作為追問，能否談談你們預期鋼價走高的影響，以及你提到的某種關稅措施的影響？如果可以的話，請再提供一些細節。也請你把這些因素拆開來說，並更細緻地說明其影響大概會呈現什麼樣子。

Yes, yes, for sure. So 2 things as we think about the second half of the year and I'll try to quantify it for you. One, as we've seen recently a rise in raw material prices that you referenced, we estimate for the second half versus first half that those metal prices will be $4 million to $5 million net cost increase impact to us against second half. And then a few weeks ago, maybe just a couple of weeks ago are the new set of tariffs announced on aluminum products, and one of the highest tariffs was products coming out of Germany at almost a 50% tariff rate. We do have some material coming out of Germany and we've got plans in place now to adjust for that. But we anticipate in the second half of the year that that's about another $3 million cost impact to us. For that one, we think we have a path forward to between different logistics and procurement strategies of eliminating or reducing that cost that for now in the second half would be about $3 million from tariffs and $4 million to $5 million from net metal.

是的，當然。針對下半年，我們主要從兩件事來看，我也會盡量幫你量化。第一，正如你提到的，我們最近看到原物料價格上漲；我們估計下半年相較上半年，這些金屬價格對我們的影響，將帶來約 400 萬到 500 萬美元的淨成本增加。第二，幾週前——可能就一兩週前——宣布了針對鋁製品的新一輪關稅，其中最高的關稅之一是來自德國的產品，關稅率接近 50%。我們確實有部分材料來自德國，目前也已經有調整計畫。但我們預期在今年下半年，這將再帶來約 300 萬美元的成本影響。針對關稅這一項，我們認為透過不同的物流與採購策略，有一條路徑可以消除或降低該成本；但就目前而言，下半年大約是關稅 300 萬美元，加上金屬淨成本 400 萬到 500 萬美元。

Your next question comes from Michael Shlisky with Colliers Securities.

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

So can we first start with the auto sale that was announced. Can you give us just kind of a full view on what are the avoided cash costs that are part of the deal in total just to kind of value what is the sort of the true value of what you're receiving for this division?

我們先從已宣布的汽車業務出售案開始。你能否給我們一個較完整的視角：這筆交易中總計包含哪些可避免的現金成本？這樣我們才能評估你們從這個事業部實際收到的「真實價值」大概是多少。

Yes, Mike. So a couple of things that as we know has made it more of a complex story since the day 1. We know, and a part of our automotive exit strategy, that this business has been a low EBITDA business of 4% or 5% type in total margin business and very high capital spending. We've spent average of $40 million a year just on capital expenditures in auto as a segment, not to mention other restructuring costs. In the last few years, we've had almost $25 million of restructuring costs and tens of millions of dollars of impairments as we painfully know well. The $300 million-ish-type business, the liquid-cooled that we announced the sale of, that's been historically, neutral to negative free cash flow business, depends on the year and exactly and all the different calcs going into it that as I said on the -- at the beginning, generally the lower margin and low level of EBITDA that this business has been throwing out has been all consumed by a large amount of capital spending. So just as an ongoing basis, we've had struggles to generate positive cash flow.

好的，Mike。有幾件事我們知道，從第一天起就讓這個故事更複雜。我們知道，作為我們退出汽車業務策略的一部分，這個業務一直是低 EBITDA 的業務，整體毛利率大概只有 4% 或 5%，而且資本支出非常高。僅就汽車這個分部而言，我們平均每年在資本支出上花了 4,000 萬美元，更不用說其他重組成本。過去幾年，我們有將近 2,500 萬美元的重組成本，以及我們痛苦地非常清楚的、數千萬美元的減損。這次我們宣布出售的那個約 3 億美元規模的液冷業務，歷史上一直是自由現金流持平到為負的業務，取決於年份以及各種計算方式。正如我一開始提到的，這個業務較低的毛利與較低的 EBITDA 水準，基本上都被大量的資本支出所吞噬。因此就持續經營而言，我們一直很難產生正向現金流。

And then, our biggest strategy going forward and belief on this business, as I also mentioned, is that we think the right owner, the right place for this business is for a strategic buyer or a company that will make the investments required to improve that margin profile, reduce the cost profile. So to your question, a big part of liabilities and costs and future cost investments we're avoiding all relate to what we would view as additional plant moves, plant expansion, severance charges and ongoing capital investments that, this business, the liquid-cooled, has been averaging around $25 million a year. So that's the biggest value driver of the business, if you want to think about it that way or challenge in selling it, but also the opportunity for Modine as we go forward is avoiding all the additional cash investments we would need to put this into a profile that drives value for our shareholders.

另外，我們未來最大的策略與對這個業務的看法——我也提過——是我們認為這個業務最合適的歸宿，是由策略性買家或願意投入必要投資的公司來持有，以改善其毛利結構、降低成本結構。回到你的問題，我們所能避免的很大一部分負債、成本與未來投資成本，都與我們認為可能需要的額外廠房搬遷、廠房擴建、資遣費用，以及持續性的資本投資有關；就液冷業務而言，這些平均大約每年 2,500 萬美元。這是這個業務最大的價值驅動因素——如果你想用這種方式來看——也是出售時的挑戰；但對 Modine 而言，往前走的機會在於，我們可以避免為了把它調整到能為股東創造價值的輪廓，而必須投入的所有額外現金投資。

And it's that plus the pension that you also discussed?

以及你剛才也提到的退休金部分？

Yes. So, yes, and with it, part of that came with, I mentioned, $15 million of pension and then on top of that I mentioned if -- all along we've always talked about since we had first announced it, if we don't feed that engine, the amount of potential social costs and social liabilities that could come our way are enormous. So we view it as a huge step forward for us. And I even mentioned the amount of management time -- the last year the amount of management time and money we've spent also on separating and running this business has been enormous.

是的。沒錯，還包括退休金；其中一部分如我提到的，是 1,500 萬美元的退休金。此外我也提到過——我們從第一次宣布以來一直在談——如果我們不再「餵養那個引擎」，可能會有大量潛在的社會成本與社會責任回到我們身上。因此我們把這視為對我們而言非常重大的進展。我也提到，過去一年我們在分拆並營運這個業務上所投入的管理時間與金錢都非常龐大。

Okay. Can you also just maybe give us the broad outline of what is a go-forward CapEx for Modine, and in the next few quarters prior to the sale closing, will that area have any CapEx associated with it in the very near terms.

好的。你們也能否大致勾勒一下 Modine 未來的資本支出（CapEx）輪廓？以及在交易完成交割前的接下來幾個季度，那個領域在短期內是否還會有任何 CapEx？

Yes, so good question. We mentioned that balance of the year for Modine, 2 things, where our guidance, our outlook is based on the assumption that we still have the liquid-cooled automotive business and the air-cooled even though we're looking at alternatives there. And so earnings and cash flow, I'll assume that those are -- stay with Modine. There's always a chance that the transaction closes before our fiscal year. And the other issue is we clearly have a responsibility to run that business between the signing of a deal and closing in a normal course of business for us.

是的，這是個好問題。我們提到 Modine 在今年剩餘期間有兩點：我們的指引與展望，是基於一個假設——我們仍然擁有液冷汽車業務，以及氣冷業務（儘管我們正在評估那邊的替代方案）。因此在獲利與現金流方面，我會先假設這些仍留在 Modine。當然也一直存在一種可能性：交易在我們會計年度結束前就完成交割。另一個議題是，在簽約到交割之間，我們顯然有責任以正常營運的方式來經營該業務。

I would say the next 2 quarters for us average about $15 million a quarter of capital spending. That may be a little bit high. We'll just see how in the next few months shake out and through the year end. I'm talking total company. After the automotive divestiture, we see Modine running more in a $50 million-ish-type capital spending run rate annually. We've done $70 million to $80 million. So very well could be a little bit -- running a little below $50 million, maybe a little bit ahead just depending on the year. But in totality, going from a company spending $70 million to $80 million. And again, I'm excluding restructuring, which would make it even higher to more like a $50 million run rate, Mike.

我會說接下來兩個季度，我們的資本支出平均大約每季 1,500 萬美元。這可能會稍微偏高；我們會看接下來幾個月以及到年底的情況如何發展。我指的是全公司。完成汽車業務剝離後，我們預期 Modine 的年度資本支出運轉速率會更接近約 5,000 萬美元。我們過去做過 7,000 萬到 8,000 萬美元。所以很可能會略低於 5,000 萬，也可能略高一些，取決於年度。但整體而言，是從一家每年花 7,000 萬到 8,000 萬美元的公司——而且我再次強調我不含重組（若含重組會更高）——轉為大約 5,000 萬美元的運轉速率，Mike。

And does that $50 million run rate include -- exclude the liquid part that's still left to sell?

那個每年 5,000 萬美元的運轉速率，是否包含——或排除——仍待出售的液冷那一部分？

Yes. The air side, no -- yes, we anticipate very little future capital spending. Basically the majority of that volume has run out of one plan that's fully capitalized. So I'd say an immaterial amount of capital spending tied to air-cooled.

是的。至於氣冷那一側，不——是的，我們預期未來的資本支出非常少。基本上大部分的產量都已經在一座資本化完成的工廠中生產。所以我會說，與氣冷相關的資本支出金額並不重大。

Okay. I also wanted to turn to some of the Building HVAC business. You had mentioned some good heating business in your slides, and also weak hospitality. I was curious whether the heating business strength was anything to do with outdoor heating or areas for outdoor dining or anything. Have you gotten any kind of positive orders or sales from people shifting to dining outdoors?

好的。我也想談一下建築 HVAC 業務的一些情況。你在簡報中提到供暖業務表現不錯，同時旅宿業偏弱。我好奇供暖業務的強勁是否與戶外供暖、戶外用餐區域之類有關？是否有看到因為人們轉向戶外用餐而帶來的正向訂單或銷售？

Yes. We've seen a lot of those opportunities. We don't make a product that's the standard standing heating unit that you would think of. We do make some infrared products that you'd see hanging often as you enter a hotel or something. We have seen a nice increase in the heating market on our side as well. But we think that's a lot tied to what's going on across the market in general, home construction and home repair/remodeling. In fact, our Hot Dawg units have been selling quite nicely. We're also optimistic about our win rate on school products. There's been some good news coming out recently there. And so I mentioned on the call lots of opportunities. We're doing some additional product development and we're getting in-inbound calls as you can imagine for our ventilation side of equipment. Commercial applications and school applications for improved ventilation and filtration, we think, could be a good opportunity for us going forward.

是的。我們看到了很多這類機會。我們並不生產你一般會想到的那種標準立式暖風機產品。我們確實有一些紅外線產品，你常會在進入飯店之類的地方看到它們懸掛著。我們在供暖市場這一端也看到不錯的成長。不過我們認為這在很大程度上與整體市場的情況有關，包括住宅建築以及住宅維修／翻新。事實上，我們的 Hot Dawg 機組一直賣得相當不錯。我們也對學校產品的得標率感到樂觀，最近那邊也傳出一些好消息。所以我在電話會議上提到有很多機會。我們正在做一些額外的產品開發，而且如你所想像的，我們在通風設備這一端也接到不少主動來電。商用應用與學校應用在改善通風與過濾方面，我們認為未來可能會是我們很好的機會。

Got it. And also will you be able to give us kind of one pinpoint number for the quarter. Obviously, it was a great performance on EBITDA level. I'm just kind of curious if you could give us some sense of how much of that, in total, would you attribute to some temporary stuff going on around COVID.

了解。另外，你們是否能給我們一個本季的單一關鍵數字？顯然 EBITDA 層面的表現非常出色。我只是想了解一下，整體而言，你們會把其中多少歸因於 COVID 周邊一些暫時性的因素。

Yes. That's a good question. I would say when we look at the quarter, there was about $11 million or so of benefit between cost of goods and SG&A that I would classify as temporary in nature. They are things -- everything from salaries to short work weeks and furloughs. So I view it -- I call it normalized EBITDA margin more in the 9.5% rate for the quarter, Mike. Clearly, well above what we did last year at just under 8% and on lower volumes. So kind of like you said, I view it as the 12% really good. But we actually had volumes better than we were planning for the worst and we got a little bit better on the volumes and we had all the cost savings, so we won't be able to continue that at least in the next couple of quarters until we see a significant rebound in revenue.

是的，這是個好問題。我會說，當我們看這一季時，在銷貨成本與 SG&A 之間，大約有 1,100 萬美元左右的效益，我會把它歸類為本質上屬於暫時性的。這些項目——從薪資到縮短工時與無薪假（furloughs）等各種因素都有。所以我看待它——我稱之為常態化 EBITDA 利潤率，本季大約在 9.5% 左右，Mike。很明顯，這遠高於我們去年不到 8% 的水準，而且是在更低的出貨量之下。所以就像你說的，我認為 12% 的確非常好。但實際上，我們的量比我們在最悲觀情境下的規劃要好一些，出貨量略優於預期，同時又有所有的成本節省；因此至少在接下來幾季，在我們看到營收顯著反彈之前，我們無法持續維持那樣的水準。

Maybe I could just throw one last one in there, and that is the question on the EV outlook. Can you just give us a little bit of sense as to what your engineers are kind of working on in the EV world. Are some of these models coming faster than expected in the second half of '21, somewhere in '22 and '23 launches. But I was curious what Modine seated at that table and some of your development projects and some of the outlook for that in your business.

也許我最後再補問一題，就是關於電動車（EV）展望的問題。你能否稍微談談你們工程團隊在 EV 領域正在做些什麼？這些車型是否會比預期更快推出，例如在 2021 年下半年、或 2022、2023 年的上市時程。我想了解 Modine 在那張桌子上的參與度、你們的一些開發專案，以及這對你們業務的展望。

Yes. The answer is probably twofold. On the commercial vehicle side, I can tell you that Modine continues to have a seat at the table with all of those discussions and development work. There is a lot of request for development time and resources to work on electrification projects on truck. There is some concern we have or I'd say we're monitoring and along with some of our customers that we talk to about the actual timing and it may be a longer run rate to see significant volumes in commercial trucks.

是的。答案大概有兩個面向。在商用車這一端，我可以告訴你，Modine 持續在所有這些討論與開發工作中占有一席之地。市場對於投入開發時間與資源、用於卡車電動化專案的需求非常多。我們確實有一些疑慮，或者說我們正在監測——也和我們的一些客戶在討論——實際的時程安排；在商用卡車上要看到顯著的出貨量，可能需要更長的時間才能形成較高的量產節奏。

The other side, which has been really exciting is on the bus and specialty vehicle side, where we had a tremendous quarter to hear and it's continuing to grow with the rate that it looks like buses that are converting to full EV hybrid, even thinking about fuel cell-type vehicles. And those are not only development activities, those are real in-production orders. And so that's exciting. We see soft specialty vehicle coming first, and then in the next -- in the near term, I'd say a year or 2, Mike, this is more developmental work on the truck side.

另一個面向、也非常令人振奮的是巴士與特種車輛領域。我們在這一端本季表現非常亮眼，而且隨著巴士轉換為純電或油電混合的速度持續成長，甚至也在思考燃料電池類型車輛。這些不只是開發活動，而是真正的量產訂單。所以這很令人興奮。我們看到較小量的特種車輛會先來，而卡車端在接下來——短期來看，我會說未來 1 到 2 年，Mike，更多仍是開發性工作。

[Operator Instruction]. Your next question comes from Chris Hillary with Roubaix Capital.

[Operator Instruction]. 下一個問題來自 Roubaix Capital 的 Chris Hillary。

I just wanted to ask, we had a couple of questions around it, but there's such a focus on air quality currently given the health crisis, but this may catalyze longer-term thinking about the need to have cleaner indoor air. As you're looking at your HVAC segment, it's not your biggest revenue source but it's a good profit source, how do you see this focus you're talking about shifting the ventilation for school and the healthcare market? Can you give us any sense of how large that business is in this segment now and where do you think it might be able to go in the median term? And as you mentioned, you're getting some inbound calls, can you just maybe share some color about the products that you're selling and what -- where the interest is and how you think that's going to develop over the next couple of years.

我想問一下，我們之前也問了幾個相關問題，但目前因為健康危機，市場對空氣品質的關注非常高，而這可能會催化更長期對於室內空氣更潔淨需求的思考。當你們看你們的 HVAC 事業部時，它不是你們最大的營收來源，但卻是很好的獲利來源；你們如何看待你們所談到的這種關注，對學校與醫療市場的通風需求帶來的轉變？你能否提供一些概念，這項業務目前在該事業部的規模有多大，以及你們認為中期可能發展到什麼程度？另外你提到你們接到一些主動來電，能否分享一些細節：你們在賣哪些產品、興趣集中在哪裡，以及你們認為未來幾年會如何發展？

Yes, great. I appreciate the question. The -- for Modine, right now ventilation is about 4% or 5% of sales of the company. And you're right, it historically hasn't gotten as much attention, obviously, as the vehicular side. I can tell you in the last -- starting with the announcement to exit auto but even ramping up the last 6 months, even pre-COVID, we see this area and it's a big area. I think it's -- the way we would define it, the products we sell in market and channels, $900 million to $1 billion market. And then on top of it, you add in COVID-related concern and we think this is a great opportunity. Again, we're focused on commercial applications.

是的，很好，謝謝你的提問。——對 Modine 而言，目前通風業務約占公司銷售額的 4% 到 5%。你說得對，歷史上它顯然不像車用業務那樣受到關注。我可以告訴你，在最近——從宣布退出乘用車（auto）開始，但即使在過去 6 個月加速推進，甚至在 COVID 之前，我們就看到這個領域，而且它是一個很大的領域。我想——以我們的定義，依照我們在市場與通路所銷售的產品來看，這是約 9 億到 10 億美元的市場。再加上 COVID 相關的擔憂，我們認為這是很好的機會。同樣地，我們聚焦在商用應用。

Previous to this, we then have -- a big part of our growth plan this year was in the hospitality side and we've been making a lot of inroads. But from a product development side, what the team is mostly focused on now is there's a combination of alternatives and debates out there is how much of it is putting more air into a building or a room and how much of it then is recirculating or filtrating air in that same space. And we have products that can kind of fill both avenues. So we're super excited about this is becoming a bigger deal for schools. We've just -- we won some significant business in a large community and the referendum was just passed, so we're excited about seeing those orders come through.

在此之前，我們今年成長計畫的一大部分是在旅宿（hospitality）領域，而且我們已經取得很多進展。但從產品開發的角度來看，團隊目前主要聚焦的是：外界有一系列替代方案與討論，究竟應該在建築或房間內引入更多新風的比例是多少，以及在同一空間內再循環或過濾空氣的比例又是多少。我們有產品可以在這兩條路徑上都提供解決方案。所以我們對於這件事在學校端變得更重要感到非常興奮。我們剛在一個大型社區贏得了一些重要的業務，而且公投（referendum）剛剛通過，因此我們很期待看到那些訂單陸續進來。

And then secondly, in the office space as you lined up, I think if I just say over the top of that is the exciting part for us and I mentioned with Mike in the call a little while ago there's been so much effort spent in the last year -- monumental effort of the company to take a billion dollar segment, a vehicular segment, and split it into 2 pieces between automotive and heavy duty, and then go through a year sale process. The more we can continue to focus our resources and our capital on these opportunities I think is a huge opportunity for the company.

其次，在辦公空間方面，正如你所提到的，我想如果我把它總結一下，對我們而言令人振奮的部分是——我稍早在電話會議中也和 Mike 提到——公司在過去一年投入了非常多的努力——堪稱巨大的努力——把一個 10 億美元規模的車用事業部拆分成汽車與重型兩個部分，然後再走完一整年的出售流程。我們越能持續把資源與資本聚焦在這些機會上，我認為對公司而言就是一個巨大的機會。

I'm showing no further question at this time. I would now like to turn the conference call back to Kathy Powers.

目前顯示沒有其他問題。我現在想把電話會議交回給 Kathy Powers。

Thank you, and thank you to everybody for joining us this morning. A replay of the call will be available through our website in about 2 hours. We hope you all have a great day. Bye.

謝謝，也謝謝各位今天早上加入我們。電話會議的重播將在約 2 小時後透過我們的網站提供。祝大家有美好的一天。再見。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以掛線。