AQUA - Earnings call transcript Q2 2019 | Evoqua Water Technologies Corp

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Operator

Good morning and welcome to the Evoqua Water Technologies' Second Quarter 2019 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode and the floor fill be opened for your questions following the presentation. After the speakers' opening remarks, there will be a question-and-answer period. [Operator Instructions] As a reminder, this conference call is being recorded and your participation implies consent to our recording of this call.

If you do not agree with these terms, please disconnect at this time. you. Thank like of call Investor now Brailer, to turn President Vice Relations. to would over the Dan I Please go ahead.

Dan Brailer

to quarter Good morning, Evoqua call for for joining our ladies and gentlemen. Water Thank Technologies financial results. XXXX you us review second conference

one questions. Keating, our as please remarks, includes today's XXXX and and many Executive the differ we may XX, question Executive President expectations quarter conference benefits will as questions expectations. Ron two-segment Stas, keep Officer. XXXX, from as Financial to and and possible. Chief open Joining materially me Chief with to expected are We fiscal June After and forward-looking follow-up for President you realignment. This call as accommodate on Actual Vice ending fiscal our statements, call and to ask Officer; well that Ben including results our of XXXX the a call remainder costs prepared the associated

the financial act slides site. Regulation All SEC to with in included Evoqua's XXXX. Information Web Relations which non-GAAP On For additional for via certain the a XX, of year Investor this September information call, company's measures. our such ended and our described the the on over year, can Web non-GAAP historical required the via results were refer call, Replay G this presentation for to non-GAAP this year of discussion in fiscal year measures on to to archived XX-K XX. September this Evoqua, in for the turn respect factors that, specified, now by therein the which this exchange for been have to is to financial the call site. corporate be risk and ends financial measures presentation obtained will filings, access full fiscal have posted the to also release, on included our we please conference slides. including call and press will available seven I references of was would a call next days. like be section to webcast refer or conference which conference otherwise on reconciled With call disclosed appendix the Ron. Means Unless

Ron Keating

morning. joining Good thank be fiscal results year for to in review today's Dan. interest our second overall Evoqua as At of continues you, and appreciate to materialized you We the your have expected. Demand us Thank our largely quarter results. for mid-point our solid. call

a Operational Our we through expectations. to to continues growing be our order we're and growth focusing customer second the on organization execution and that expect priority continue the of financial the driving is meeting and year. book half profitable relationships, expanding

extensive our leadership our addition applied recent previous product brings experience enhanced new have from We segment Hervé the commercial, particularly President. the technology Hervé as digital Schneider segment Fages and at roles of Tyco. Honeywell, in and product team with Electric

of in through experience the foreign segments double-digit reported delivering welcome almost half revenues that second aftermarket a year-over-year organization ISS low APT following digits serve double lighter Slide order we being to X. double-digit last well. the we're year-to-date mid-single our growth on quarter his expect primarily revenue in good delivering down revenues due capital the growth. Both revenue the second solid on product quarter year--year team. quarter year's We to with were as and X% to start grew him but basis. growth We with strong results exchange, revenues quarter growth of Overall, showed growth pleased organic. well digits approximately and

of We XXXX. year this the expect growth our in half into strong orders provide opportunities attractive part to and latter

executing team in progress the has continued two year. we across improvement engaged realignment throughout organization to see expect pleased see pricing management the is segment. in APT predominantly the to focused the actions in our segment are The We our been which and actively

Free order track strong and continues solid by cash evidenced a on are as our progress making We to flow focus. be growth. major

Please investments in the we for support important were our service in achieving opportunities During capital These improve But underway $XX more are growth Then, conversion to greater Slide water XXXX flow, full XX% be our speak turn we assets year which in or guidance. flow particularly We've of our cash free expenditures. capital X. quarter, high as reaffirming return invested mobile short, million in about outlook we'll projects. in objectives. and cash ISS outsourced provided. initiatives to will detail working

benefit adjusted EBITDA to revenue quarter-to-quarter we growth. overall services months XX-month rates XX% our of continue a basis rolling revenue This recurring As the XX% high since graph is business Approximately represents a XX XXXX. from on with derived range. from stable currently our and renewal in and contract overall, last revenue from

The customer our have result years, X.X% of three variability XX%. last rate grown at with quarterly shifts changing nature cost demand. product revenues to subject business our driven that mix the of growth impacts Over is approximately a and adjusted EBITDA may by from compounded of and

municipal to business sell visibility our basis. and technologies Two When Slide on a to three revenues has However, with X. globally. markets to high our turn have Evoqua focused into we we segments. established, Please continue annualized products the industrial on began an and

from and We're from regional will solutions optimize globe their opportunities improve our structure. customer and by is channels national a technologies serving needs. fit The individual complete North continues direct that to a they go-to-market and comprehensive technical with impact selling allowing sales aligning on our problems customers established through realignment segment better and market service third-party want footprint more our to expand and deploy national more underserved team the strategies customer focused around and customers to to allowing goal have us applied up American also across sales to the with the performance pay initial class we'll and sell how talent. we accomplish model process the lowering The now revenue their away best strategy and is APT quality while to suite in channel. to integrated with of using our This guaranteeing Services opens be Fundamental of technology solved. to WaterOne The move product segments to solutions based We shift. product segment our through deployment services With us WaterOne. account that distinct clear success offering to Solutions provide our focus Our new and and leverage to reach moving that from a through subscription technology programs Integrated solutions is best team markets. by move refined go-to-market service structure in-house organizational like guarantees. cost products two our our quantity

Fages focused for materializing customers, the As required by the previously actions. for on growing realignment efforts with our organization the company evidenced is book. and as realignment Much are order mentioned APT the our serving pleased and we the is the benefits progress Hervé while leading work customers and is more and Across our to-date. executing are early company, strong

the Global be digital London. profitable Summit and Slide by serve efficiencies. us our were model pleased operational Please turn of X. recently allowing strategy to digital named and grab growth Water company business important is in XXXX Our the Intelligence year We water to component enhance customers, Global to very better of an Water

been expected has be and realignment segment two than September no completed to for later underway six is months XXXX. Our

streamlining operating we efficiencies have taken footprint. our cost approximately a help have Today, been targeted have actions realignment. benefits on million our number incurred of achieve us cash have structure $XX offering the reduction of focused to cost. of taken our We anticipated the we and optimizing product and Actions and

We taken product to related also and a charge facility non-cash have consolidation. $X million rationalization

financial yielding annualized million. costs cash I to benefits to $XX $XX over results and outlook. now the to turn million Ben cash the expect would of $XX future be review We to presentation like million to approximately the

Ben Stas

to X. Ron. you, turn Thank Slide Please

the grew grew Solutions declined $XXX and grew grew revenues quarter, $XX For million Organic revenues year Technology's and revenues X%. Applied X.X%. million. almost X.X% Services XX% the approximately or Integrated over to or second prior Product revenues

X.X%. impacted revenues negatively exchange by overall Foreign

As strong growth the we both in of the have in year. order seen Ron first half commented earlier book segments

business. an converging in timing our However, is inherent variable key

by APT year to was was $XX.X approximately EBITDA estimate year. growth half adjusted decline XX%; was down shipments. flat by from and down driven versus QX. this EBITDA and $X large positive lower the to product mix acquisitions. During volumes million price high million Adjusted $X million margin prior of as approximately was in organic we XX% due primarily compared prior the quarter, ISS cost over approximately grew

X% favorable over prior up demand opportunities over prior largely as from orders million multiple vertical of contributed across year due trends approximately mix improved impacts year's of quarter, approximately over the outsource was and the book X, in of impact segment Please particularly to approximately our million Slide $XX Solutions million and increased remain markets. benefit revenue of product volume reduced including year. second timing turn X% extended and XX% warranty includes at aftermarket and growth other quarter Organic EBITDA the strong decline points key primarily quarter. Overall from Services The attractive results of the half were types second large growth. XX% Acquisitions QX up to on were projects, $XXX price was actions. the and or of to Adjusted by beverage $X.X margin these cycles XX Adjusted obligations resulting driven markets Integrated electronics Overall, to EBITDA water for from service conversion for the micro vertical was primarily revenue performance. variety service revenues period a time. the an and expected. capital last food The in markets positive. order versus to [indiscernible] basis

installation on X% while continue million approximately with Slide almost lower We WaterOne decreased benefits revenue well customers our $X growth. X, second the acquired revenues Please expectations. product $XX turn driven is capital for to aftermarket million million initiative $XX installation The The grew our of Ozone approximately WaterOne by of rates. are received and be to to rate approximately down technology and our quarter revenues our pleased by Pacific to with product service primarily revenues acquisition million. $XXX by contributed track

book growth. million segment highly remains the the strong million $XX focused Foreign by The Adjusted of to $X EBITDA a $X with revenues XX% APT million pleased order X%. are margin execution on or approximately we realignment decreased and exchange approximately XX.X%. or negatively of impacted

half the the Free decline decline to lower and obligations. benefit XX. was Slide previously of year's million or quarter income. due due to this million volumes prior period flow the last is and adjusted cash $XX free income. second was product quarter million of turn finance. Year-to-date this As to XX% the cash over Please for mix net $X other or CapEx was XX increased CapEx Year-to-date of primarily half of adjusted $XX net mentioned approximately year-to-date approximately reduced flow million of warranty of was XXX%

cash to to XX% We full picked least quarter. continue expect to up be the in at adjusted free net year. income to slightly for Leverage flow the X.Xx

of Our debt current approximately weighted is X.X%. average cost

the water shares for Slide financing. have mobile million capital impacted $XX quarter, revenue capital were end months capital the the second ended approximately sequentially growth $X $XX XX. overall XX% second this financing. of approximately we or quarter net and in year-to-date of expenditures as eleven. As second CapEx of quarter expenditures Please million net was CapEx basis ISS spending outsourced equipment. a Overall, million the turn quarter and XX. net. million also $XX to working On three the CapEx by Slide million growth outstanding of spend $XX of XXX to which segment muni the service of declined service were Please assets, approximate million. or diluted Working turn approximately Capital in was in growth includes projects capital Approximately March

year we in full earlier, for $XXX of outlook X.XX revenues in are Ron million. $XXX of the range range to the indicated X.XX As adjusted reaffirming billion EBITDA billion and to our million

result to quarter expect third call we like to closing may and of basis, Ron the much on now nature periods to to flat the business, comments. product be adjusted to variability sequentially customer turn I over the second subject While annual for of such quarter over company an we the as given up adjusted recurring EBITDA in visibility quarterly between approximately is back XXXX X% schedules changing mix that EBITDA. have would

Ron Keating

you, XX. Slide Thank Please Ben. to turn

with line pleased we're and are our We our results in half. second improved an quarter year-to-date with second were positioned and expectations which for

long-term should efforts success. segment As for that progress our important we made position discussed six have APT the months first substantial in actions within in segment realignment the a including the

more continue benefits to as order and is of pipeline our outlook operations. to is materialize. execution, integral have and customer book is customers solid. and water remains We The view we give also begin to while on focused growing The their operational are demand part organization the stable an for treatment seeing

As timing will a Ben performance. for mentioned, water be half second conversion factor the

hold first to advantage is our mover program and continue a strategy. corporate our overall cornerstone our a strategy digital We WaterOne with of

to conversions. important cash we our priority adoption Free help see capital still well XX% initiatives are is our as While to days WaterOne an competitive continue and early rate. achieve flow working improvement underway targeted conversion of

continue growth investments capital revenues [indiscernible] will make and return, to profitability. high We organic

growth tuck-in supplement our We also strategy. to strategic expect organic to acquisitions pursue

We the will your questions. now open call to

Operator

Markets. your And first comes [Operator of from question you. Capital Dray Thank the line Deane RBC with Instructions]

Deane Dray

everyone. you. Thank morning Good

Ron Keating

morning, Good Deane.

Ben Stas

Deane. Good morning

Deane Dray

and like what take it Applied bit like expecting hear line there on Product our impact distributor maybe an was some talking factor us were top the a peers didn't on I here. your was expectations, sound When But and some the I Technologies that weather issues destocking below impact was And takes? morning and look half was And the at just little about distributor commentary puts channel? weather? first a of this to through

Ron Keating

Yes. Deane, that on necessarily not distributors. third-party applied are products reps we through sell channels primarily

as loading in that specific year-over-year. what stock and weather. a really more we the So back distributor order good our anticipate the of is half versus is year strong didn't tied to activity APT. really challenge it's very very highlighted but and is last as see backlog mix on we had had growing year, this we up much It What a not in projects a we we of

Deane Dray

year? of you does helpful. on top and more comment expand expectation stand And your to and line pricing and where can an today that contribution That's on this traction real your then, pricing there

Ron Keating

neutral. continued were pleased our top as ramping fiscal half year see the in on the the Sure. that continue pricing of we of cost cost was And fiscal to in Price on progress we We in as we the back go the fact roughly made of quarter year; price first quarter well. second to expect into got that.

Deane Dray

of last all potentially would I have way and Evoqua just water it's Great. efforts more that question, filtration capabilities Memcore, if traction positioned but It in like getting treatment a early also And bit nationally are? opportunities deionization is both of technologies nicely And the is And not we solution. Lots think a going positioned and the to a look like would be most do you've you one PFOS. looking could. on industry looks remediation number think treatment would your you what focus any do be and a at look the really the Evoqua ones Where how or this. that be ultra forward looks who on technology benefit with the on to got effective.

Ron Keating

the industry full We've is, U.S. the you we a RO The it resin both most nice cases, position great PFOS or providing it not the because the do have know the concentrating that got the way a and technologies capability in in well this. suite suite and carbon technology, up with in providing application. very and we've activated reactivation is address and very fixed full in exchange got a or we you destroy to to positioned all in ion and as to And we vessels treatment as a we're with growing through whole. it but the only growing mobile at heat we're a which it's a look reactivating sit a a pipeline of it the question. challenge whether It's of This market

Deane Dray

to then deal. pay guys you big to that. on digital that's that got We'll attention Great. And I've award congrats a

Ron Keating

you, really appreciate it. I Thank Dave.

Operator

you. Thank

of next Stifel. Your Jones question is Nathan from

Nathan Jones

Good morning everyone.

Ron Keating

Good morning, Nathan.

Ben Stas

morning, Good Nathan.

Nathan Jones

guidance you top timing, the Would get currently Just can inputs talk you you of low-end XQ tracking know a visibility towards about consensus that guide XQ we're starting you range? you expecting the full think there, into that here, the guidance guide. below year where with into say guidance that numbers you're have impacts or Can bit the of how the off enough do XQ and were. where mix, is

Ben Stas

So our we reaffirmed guidance.

we're inherently on reaffirmed about this based the confident feel discussed The so our we variability our always in on, at has And Ron within business as what see. and point range we remarks. quarterly we and discussed opening

customer forward of of also when that very convert looking we do terms into and order when that of do timing In But convert our that expect we're book our the we that is at that schedules XQ say and to expect the the on based factored look comments, once roll the we demand and as noted to we all strong. is guide at earlier on guidance. our backlog

Nathan Jones

those ultra you you begin you've competitive what WaterOne competitive you outside interest of the I talk is your as that you do to said might still be view Then, were was takeaways? any number product forward And Okay. had more a think targeted that that water about interested markets go we progressing, by off that starting of XX% and to should from increase addressable service? Ron, installations of are increase for that how going takeaways. with pure where that's market that Can

Ron Keating

area quality water the We on about because treated. customers water been actually subscription competitive concerned quantity real most of focused to-date. takeaways. the flow anticipate steady Yes, our focus are and rate. Nathan. in process continue the we that a water quantity water based where that's or for market we're And We used primarily going where process by model a Thank quantity on of you. that continue on We've That's value proposition to ultimately a into are up a the playing see will unique to great question. ramp the bringing customers

in We recycle an in are our have back growth the water wastewater of efforts brought in customers where going the the wastewater opening some reuse that process of of seeing side. the seeing ultimately driving they an well. interest sustainability is in industrial after lot And side business a primarily into are as

across we're and spectrum focused of converting But business in early the see years as two we continue we service on we've we've to the applications on next that space articulated ultimately the we'll deploy DI for this much and more water. around built. three broadly So, full process industrial anticipated the water have to the

Nathan Jones

you $X range. with started that think I guys in of I idea market think that addressable an any mean you other you this was time? indication what somewhere billion grow have to could that Do

Ron Keating

around they a days We're a across got thesis kind act it's can Nathan. it in market. early have. I initial but Ultimately until deeply. it's of believe But it a get not that data, something we with broad We're staying deploy expansion if continue do can and still to evolve on, this, opportunity our more more vast customers nice to just it's you this

to against quality out they with of quantity able defined being is it. provide a and influence them where value get So

to that as the are can for we we drive opportunities So and continue to the obviously there. market expand

Nathan Jones

Great. questions. my for Thanks much taking very

Ron Keating

you. Thank

Operator

you. Thank

of question next James. Your Pavel comes Raymond from Molchanov

Pavel Molchanov

that back of mode you're realistically for the of on bolt-on last very restructuring made opportunities. since to you of in and that in curious, where you're you point, been at into pursue the question. your Thanks a lot kind zone year for M&A mentioned I'm of after for year? taking an At transition comfort acquisition you this still now you've could it's getting a the comment, guess time. begin end the I the almost been lookout past that M&A obviously if

Ron Keating

way And the acquisitions been yielding the complete is which identify synergies past And together over the we has the we those we've to under appreciate of the from The we're the the comments. XX starting additional and and question. We the we benefits organization of integration than the Pavel, defined two tuck-ins. come are. as we've we're position in more to completed are see in the opening years that well to I seen. realignment Once realignment. the wanted made

of list We have mostly we're them a around very we historically. expansion. have focused product Then, portfolio as long

to area the say would at that's that I focused this be we're anticipated time. So the on in mode back that and we we're in

Pavel Molchanov

Last other That's raise Okay. market's tariffs. tariffs as than year as causes that entire clear. blamed little week given of for you would I thinking about margin else been one that And I thought the this compression. issue well.

of dive on I thoughts but of breaking curbs that a off from your to means realize XX%. XX% the Now Chinese lot here, kind business? increased for bat have this products what on right news it's any

Ron Keating

we the at products are acquiring The China range. majority our were XX% from of that already

see difficult going So a know It's being from we we we challenge a us. movements. don't what challenge for see strong on of it but China The from be impact early suppliers components that year. don't will that's that like, look line that this more half to first see purchase the days purchase to back may being the

Pavel Molchanov

All right. it. Appreciate

Operator

you. Thank

is Buscaglia Berenberg. next question of from Andrew Your

Andrew Buscaglia

Hi, guys.

ramp Just bit detail but the in And that into of go you some maybe gives the it to in confidence then that risk how doesn't what QX roll-off can there? be transpire/ go got you things kind that would muted, orders you are going types you're at on back to that to that they're of QX, a applying guidance, little

Ben Stas

projects if that in typical of sight projects realignment our within and the that's benefits we as both backlog, nothing rolling as factors, opportunities These historical terms this actions, are three well typical through break in So cost outsource types line projects price there's of services backlog. water of atypical down, there periods. are of capital

Andrew Buscaglia

Okay. And -- the with regards to

Ben Stas

you can at you the the quarters if the the out depending as vary we there. changes that back think and I talked see we it year, at go if look XXXX, put on years, you quarters And look and earlier.

can years, of to like see that terms a going this XXXX over little look in several you be if However, year's quarterly you the bit rollout.

Andrew Buscaglia

Okay. Yes. helpful. That's

that also are through through you of remaining will and the are those, going XXXX, any then benefits able feel like to to kind of the Okay. flow there's into when piece benefits, And help those with weight we what expected together?. can that flow I

Ben Stas

significant So, yes, of line in it with we in be communicated. what effectively previously the terms QX in will most benefits. But

Andrew Buscaglia

Okay. Communicated.

Okay.

Ben Stas

that in guidance. contemplated We our

Andrew Buscaglia

Great. Okay.

Okay. That's me. it for Thanks.

Operator

you. Thank

Your comes Walsh Suisse. John from next question Credit of

John Walsh

Hi. morning. Good

Ron Keating

morning, Good John.

John Walsh

Hey.

EBITDA if so should about guide the to here, we more adjusted just the the anticipate XX-month said were everybody what there's maybe here around the chart think step and that misspoke. expectations, the XX.X, QX level the do I we QX So Page margin appreciate one next on looks on a but trying EBITDA, roll, modest quarter question just on X year? like the -- or XX.X think for sorry step you XX-month down roll is the bottom to I'm

Ben Stas

So quarters. I the start go two should want to for the next into we quarters, seeing

decline, As the okay? sequentially, the start prior we very modest you'll do the on to see you'll that math and then a should guide improved you seeing see well, on up we'll guide. based And but can our we'll flattening if years on a slight we our versus EBITDA do that flat the as we to start start tick math see seeing that continued QX, margins QX, you based in a see won't see flattening

John Walsh

I you. Thank very it's maybe a the Okay. morning. just And think leverage, helpful. this That's around conversation then, topical been

on about longer net a maybe well… should of but think term X.X, ends out model leverage have maybe and that think of You we're we basis kind that kind this go year in as progress how I the your the there,

Ben Stas

Because first. it's than certainly higher

seeing we on improvement. EBITDA leverage So, second based half improve start should

John Walsh

of just math coming that the guide, that? about because understand I progression, guess piece think give any kind it on do I we around how the color here And down from but you the of

Ben Stas

the three to a year -- acquisitions to years. but to on have that'll our three depend X.Xx stated leverage the goal. And range bringing within long-term goal five goal five our again, probably three-year We next that's

John Walsh

Thank Okay. you.

Operator

you. Thank

question next Kaplowitz Andrew from Citi. is of Your

Andrew Kaplowitz

Hey, good morning, guys.

Ron Keating

Andrew. morning, Good

Ben Stas

Andrew. Good morning,

Andrew Kaplowitz

that your look before 'XX on color more you've grew Ron, service in margin a look QX, think half some of following about service might Can and organic mentioned revenue half the some up be in larger of go [ph] service what through like in fiscal at inflation. mid improve could of [LPM] I probably of that at your the you give quarter, second was this will the coaxial. digits most from service of revenue, you us it capital your that for ramp higher mix point? single X% higher was What it year? in but the second

Ron Keating

Yes.

lot out growth through over will service backside So as that Andy, bigger and have what have of they the a then, on when historic installations around level have it's month. the they over a whole. rate so you're growth on rate revenue And hits charging some larger they are follow capital X% year The installations business rates volume the we service in we service is on have of the carrying services benefits obviously see a typically the is, our of out as as a that. kind the growth come. we the and The are of quite high that annual gone because

there that of it are behind typically industry to lap XX with we've on between in that longer services the our that contracts wastewater applications to a that the follow pond with of itself. to year come So cases some lot for takes been power mobile that years. some up dewatering the term opportunities with gone has can in service a into some stay the it while service a of applications around ash But,

Andrew Kaplowitz

How is while up coverage have possible That's sit in is the here industrial the on a today. bookings backlog helping it And the mentioned for move organic second maybe for and Ben talking what's now Okay. year values that then, the it as this backlog to some us much in, you half helpful. to wastewater more color it as we your give of today? office you've about been year-over-year Ron

Ron Keating

continue in as sized we a briefly strong from say and a order rate that. of and very of wastewater, has some opening companies very highlighted the seeing to actually and in lot let as little we and bit we on I'll and position a far their beverage discussed is as are able There But, to have food they in order the from liquid industry about it's some minimizing interested microelectronics them into discharge wastewater to projects that on. nice are have coming areas the what very -- We're bleed where do portfolio are coming talk over a Yes. around been we're be seeing just where backlog work overages. that like product that unique we the full recycling in earlier. very remarks

build, process on to we the wastewater the to So variability you water you're need reuse back-end water the not only recycle are the recycled side bringing by when but under adding in. water, a start process seeing and

it gives provider and Ben on us we're order our actually rates as a where a us solution benefit a it's comment very backlog. the will So pleased showing that I in see. come to bit service full to a customer little

Ben Stas

Yes.

not we're So, disclose that traditional rates order some is get doing with we we specifically, so, it's don't will by color norms. obviously provide this say line backlog. I that to in difficult into

Andrew Kaplowitz

realignment write-off this or got quarter. something you ask with other could one clarify you a you've to thing from products We've that then I if And had in about else? association talked

Ben Stas

far than integrate our footprint Evoqua's also realignment into past. truly It the that have we're business business the gives us we is opportunities was now in have we at to had into greater we the and SAP and on the looking visibility the that as them business

at going scale future. into able that looked the we all to so, as to have business this we And be

had a opportunity of to took the in inefficiencies consolidation with And to address the so we some business the we where of warehouse. regards particularly the

the on we rationalization key that we make that participate ones simplification did want future. we versus that at the the obviously money we don't product in as and for to And Okay. products looked

Andrew Kaplowitz

Thanks for that.

Operator

you. Thank

from Goldman Sachs. is question Brian Lee Next of

Brian Lee

the taking for Thanks guys. Hey, questions.

seeing APT in Just second maybe you going end back give to where XQ, based to gets here? us product that or that tough here? line fiscal growth is the most a of just order optics in and terms it on it being is then, led color for on then, to Can the a bit all some expect commentary, little APT some weaker just fair to as back APT it book mostly to to more of APT the really that characterize starting the top is of in or the And strength categories? earlier fair specifically comps markets related positive

Ron Keating

Sure.

said, both a Brian yes was that it's of the is on to rates actually fair so our fair comp to tough back say see are demonstrating that last as say half order of would we're pickup going say well. because I it you those. it So in it's year. And the year that to

and disinfection nice across business, the business wastewater back we're good order be half very on. opportunities areas year-over-year anodes have come quarter Some our we should water APT executing in, that business bookings increases seeing this the for

Brian Lee

on Okay. some you're trail-off on of I more kind you move year that and we past at the the think or as see have cost up of in sounds in the into and budgeted the helpful. we for to you to of environment, side, price just you you've tariff about over XX%, increase do guys? hold it price here that positive that then, as Thanks. Great. few those so quarters in it just levels off know And That's back cost does back the being sounding been here, guys trends half like new positive the it's but territory, for

Ron Keating

announcements on even quarter talked we the this see through forward. as have fourth see holding And out ramping that was have fourth and We see that into today. quarter. with We and it got that quarter the forecasted it parody, second built it. third coming the about we come first up momentum We as we into models quarter a holding we think

Brian Lee

That's great. Thanks. helpful. Okay,

Operator

you. Thank

from comes Giordano Joe Cowen. of question next Your

Joe Giordano

guys. morning, Good

Ron Keating

Good Joe. morning,

Joe Giordano

that to quarter on here how just months that was And when so curious it start you as EBITDA, some and there do is get and the how rest a guidance if how ago? spillage of into to fourth three you or the stuff? happening would out further did push quarter third XXXX shift, cadence that just split of have to the thought and On and compares looked you

Ben Stas

don't guidance I of than models quarter at demand things and a from we look that, the year, look backlog already the look Obviously, on customer But take materially it timing them. have models -- the quarter is we analysts also and way the But last into as things quarterly each we've as are how the highlighted. the at on we beginning that always it's at the at that different and year. forecast. we and saw we that internal at We basis we our shift pretty do based look So good materializing? go say know of don't an provide beginning visibility we at that's annual

Joe, -- quarter. you third do in I see about about what revenue think know If you're you don't asking

Joe Giordano

start how No, I to curious a own started guys quarter fourth going probably little like become when know you to you is if you when to clear is be internal that it see your When when I'm you that, to that did play did out. more guys? just the going I'm thought like end, it year weighted. bit like to curious have

Ron Keating

and fourth what had weighted we that order being Joe, activity two four] the [constant saw I out realignment communicated late last benefit was year anticipated we actually the in [ph]. backlog in segment of quarter early we and think year, beginning the certainly of that it the also already anticipated fourth on We the the the because half the from quarter. benefits toward of the we realignment rolled the in seeing

Joe Giordano

just obviously at down? bridge half year-to-date given And year-to-date, to XXX back in curious bring enough. XX%, to guide the free and kind you're upside Fair cash changes but your then, of on what that flow has the

Ben Stas

bring We're to plus not guide. but it looking we're a down, with sticking XX%

Joe Giordano

Thanks. Okay.

Operator

to call question-and-answer to turn his the I'll closing you. period. back Keating Thank now concludes over for Ron our like remarks. That

Ron Keating

as together quarter highlighted, as behalf look the marketplace. for the and of strong It's water to of thank year I ramping progress team pleased on discuss very up and and we're to get us able year half and to digital forward Board the we awfully the our the the a So, for thank hard with joining in of and want proud continuing strategy deploy to the we across become the you Directors. performance. that to today. management we we the broadly work making we're a Evoqua be more the that delivery always and first success of see back employees were all the company Again pleasure half. certainly the We of

joining thank us So all we'll you and speak for again next quarter.

Operator

earnings Thank you. XXXX That Water quarter concludes second Evoqua Technologies conference call. today's

now day. this may lines You time at your and have a disconnect wonderful

Evoqua Water Technologies (AQUA) 10 May 192019 Q2 Earnings call transcript