AQUA - Earnings call transcript Q1 2022 | Evoqua Water Technologies Corp

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Operator

Hello, and welcome to the Evoqua Water Technologies First Quarter 2022 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open 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 to 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

statements, financial call today’s Thank remarks, our chain end of differ relating you, and growth acquisition Vice to expectations. macroeconomic general XXXX to quarter’s demand President call call us Chief the may and we’ll Mar for Participating includes materially Brittany. Thanks, related and impact Ben This expectations, full including statements Financial statements challenges, questions. to everyone, and pipeline, open review our conditions, results for supply PFAS Executive and Officer; our year and outlook first our future to the COVID-XX our Stas, inflation, Keating, in Chief pipeline, are labor business, half prepared the our Ron of call Actual from ongoing joining the infrastructure Cor markets, forward-looking and today’s shortages, results. conference order President on Executive first performance pandemic. After related Officer. integration opportunities, and strategy fiscal legislation,

to disclosed therein. additional Means call will and of fiscal also September this the year For Evoqua, measures next Relations turn this for to described posted release, on like call that, With to conference refer which or company’s to our conference filings call with on Replays to including the our financial via factors I’d in at ends risk this Investor which call, this press XX. to please Relations Evoqua’s over Ron? financial a SEC appendix of be we’ll now website. was otherwise measures. non-GAAP discuss call, the obtained Ron. to certain measures the Information archived be call access XX full-year days. the available references the conference Investor in on year, webcast were to information non-GAAP on On is refer such respect the this website. included can presentation slides which for specified, Unless

Ron Keating

be and for robust, your to customers X. I the results helping all first need across achieve provide appreciate aftermarket you, available and continues reported Please solve their growth, lines. We're in measured slide quarter to very insight demand you, And demand broad-based global and thank Thank results driven pleased Dan, strong key metrics. sustainability Evoqua. joining revenue problems most to turn into We and our by and segments I'm product Both us. safe outlook. for interest Market capital, growing targets. double-digit service all regions water. organic with in reported and across

and our pressures with X positive, ratio book-to-bill inflationary and solid segments. Price remain Supply continued talent robust. order both visibility. result to pipeline, chain recruitment was Our in unpredictable challenges, cost price demand indications above across realization conversion was and

Our effectively initiatives the capital our working X drive team and have flow free has January Mar across flow cash was trailing Cash and revenue. to sequentially, in was to date, and ratio pricing improved balance will approximately Liquidity improvements net remain few acquisition navigated Net XX conversion XXX%. minutes. a Adjusted and the Cor, these XX% priority. constraints organization X.X continue was to sheet. to strong a we been north of discuss We'll improved of times. leverage month the

was strong pro with on targeted company a technology remaining Cor’s would December well Mar range, XX. water leverage our X. on price a financial basis, at to $XXX have EBITDA performance-driven as including our expected forma However, and within This million. liquidity been delivering of focused times X.X net when Slide solid is Please purchase annualized results. turn Evoqua

several delivered see, As years. over past key six the across these we've metrics results outstanding can you

some most of solving We complex focused problems. have water a talented the and world's on team dedicated

results focused Slide of remain turn actions proud ordered end and the the Our of chart quarter represents we've that we daily progress the X. model strength by This second made, We're Please our business on to strategy. execution. expected our our focused markets. lead demand and demonstrate to executing

sizes We have annualized more our updated end forma the markets relative sales. of pro course included and

market market have industries. the Sciences, the as Sciences we and the biotech care, combination We Life renamed healthcare which of now The end is health Life a market pharmaceutical serve. end largest as

is most We market demand due the and microelectronics, municipal spending end life see and our of second passage the largely food power, muted, to and Demand end sciences, deferrals to bill. markets, expect life order the in in wastewater including the general across with recent strong temporarily quarter beverage, market. infrastructure industries aligned

during we to XXXX. Our of the we collection we near expect a slide year, in and to markets questions market and address water in on execute pipeline the municipal long-term to demand see drivers is about growing session. our and growth. segments the be to up expect insight large provide Life solutions. picked both outlook expect We'll flow future. of markets to plan end include to most turn see our markets Sciences specific vertical Throughout specific a Please of to X. Q&A Overall, opportunities into robust additional robust for we end happy highlight across portfolio and wastewater

pandemic, Vantage market laboratories. and seeing EDR pharma slide Cor industry. offerings hospital to to and of we’re to an part our our to turn for addition expect Sciences a of the source Evoqua. expands that modules one strong rollout well-received we reprocessing. global been team played completes a reliable in a pleased to throughout market the medical in of have for offerings announced with device demand pharmaceutical water technology generation manufacturing demand for in market continue. Please Sciences innovative Life APT The Last year, the and Ward use development, is provides X, test has the and we the water solution of hospital SPD, ultrapure the This digitally water the customers COVID purity a Mark vaccine role enabled in Mar market. high next system important of as providing We Life have research

Mar reach underway and We're Mar This underway the business to Cor and and plans strategy. FDA to our under Cor XXX on offering, treatment highly service installed hospital M&A The significant also sciences expertise Mar our organic we're Cor seven hospital SAP recurring This platform, addition for within well core XX annualized of complete lines us the our campus. reasons. our speaks the water opportunity dialysis synergistic leader critical XX, Mar and Mar for brings to business service slide appendix. are with margins were to Please have all needs many provide a months. highly hospital. is XX of notable Mar tax located the treatment product market a validity capabilities, XX% the and in on providing several gain that our attracted to which placed the recently. and high more slide solutions at the to optimize transaction remaining satisfies service knowhow our months branch of turn opportunities. slightly branch. of branches, Evoqua EBITDA, expertise. Cor and XXth branches providing slide provider base water solutions to the addition one for extensive Evoqua and to The well allowing to two We've our X. this regulated service very XX feel an corporate to We Please integration The opportunity They Cor revenues. turn of business We’re have We will move over for growth applications. under an large on we're the EBITDA the were in example provided to life we our sustainable a providing working exception most at will to capacity more technical SAP provide next They of X. to ranking. water one platform, in been times gap XX Cor’s our from of these consolidation, over corporate market. We enhance plan. regulated near to water value purchase purity One expect adjusted come We able is for many corporations service tax information highlights focus in recognitions hemodialysis. on could additional our capabilities years, knights market slide its inorganic pleased a footprint. a creation the

be for are our honored recognized sustainability. impact We to to our commitment and

In capital the requirements and two Sustainability commercial the Market. gallons water our for innovation ongoing city the treatment to day Sullivan Phase majority the Award water systems from treat We this Technology Anaheim of We our assets focus recognition Water Global remove to of for highlighted PFAS will million Evoqua in residents. win of technology, per in a The deployment. XX X Frost first and of PFAS on to XXX,XXX PFAS remaining we’ll drinking phase, Year industrial also We expand XX selected removal the received approximately a sustainability. service businesses handprint on drinking city’s their residents. the the and gallons the -- Company XXXX our provide the investment phased of in segment. & appreciate and

the markets We the the infrastructure serve. continue to recently closely of passed impact monitor on we bill

year. ramping immediate expect too treatment, in activity While quoting an to through progress it's PFAS the we impact see see soon to we as

into the law. including We’re impacted for I Ben. authorizes to of XXXX million to pleased would Defence communities This military over above funding the $XXX base PFAS the Ben? to closure signed clean-up for president's environmental and Act $XXX to million for account. now activities, is turn like remediation call the and realignment see budget request military National by

Benedict Stas

Please turn to XX. you, Ron. slide Thank

grew volume capital versus $XXX quarter, first increase double as in aftermarket, by the We both well and and digit lines XX% regions approximately prior the growth reported with saw across growth approximately were Organic growth revenues revenues most services, XX%, driven broad-based million. up revenues all reporting price year. product segments to as realization. and For

of volume, drivers XX slide prior an price basis of cost increase to First favorable XX. XX.X% XX.X%, to to improved turn of profitability. Please favorable cost Strong price, the adjusted margin mix points over million $XX.X – an quarter for were and increase overall year.

by Integrated million. and realization driven approximately XX%. and Digitally Solutions Our revenues industry, Strong for and microelectronics. grew Outsourced were markets. mix quarter cost, margins $XXX Organic XX% price up accretive for XX.X% and XX% Profitability divisions and and robust pipeline end million was versus Capital enabled up digitally ISS water quarter across XXX growth. and first continues and life revenues revenues strong segments, general light margin sales revenue remains year. the year. enabled prior sciences $XX to water processing points and approximately were Service improvements. Adjusted basis margins. revenues volume, have food and were productivity contributed multiple and EBITDA driven on to slide to revenues XX. to EBITDA beverage from volume by the favorable Services up higher increased due quarter to across all turn highly chemical and the grew to a XX.X%, to price up overall markets. prior the outsourced Adjusted Please

We see year to ISS growth over year strong continue backlog. in

growth First or $XXX capital million the was XX% water both coming from outsourced backlog and up quarter with over prior orders. year,

Our robust across markets. with to pipeline continues be end multiple opportunities

and by bill to Technologies We up Organic slide strong $XX.X price. million, Please Applied quarter Revenues slide revenues $XX first EBIDTA throughout see increased Advanced margins and XX. growth Product million, to $XXX book for basis Please grew driven increased XX%. fiscal turn ratio expect product Disinfection. all XX.X% to quarter were turn volume X the Filtration across remain XXXX. revenues Adjusted Adjusted nearly or increased Electrochlorination, XX.X%. our above lines, XX.X%, regions Separation, XX approximately across and million. EBITDA to Aquadex points to and most to XX. including

offshore IV technology portfolio APT’s growth pursue gains markets. our quarter highlight initiatives to sustainable to and from product of lower maintenance is IV to in are transformers. reliability and platforms a offshore which of chlorine for innovative is footprint we system. primarily spending, of which marine is expected Mar seawater we're of improved new Mark Please to in The of Capital products self-cleaning million One the and water number outsourced energy generation X% pleased Each Evoqua’s chlorine other spending new electricity Mark capabilities APT end core organic market featured develop a was or average $XX range lowers increase. for that share long-term unmanned Chloropac the cooling X% furthers that maintenance through sales. either produce electrical renewable new to as uses quarter and cooling mussels pipes, for the requirements. be for orders costs, historical and has has in system circulated approximately approximately This revenues. our pipes CapEx The the to mark and Cor and smaller growth slide The total of X.X% transformer to drivers customers to improves XX. turn critical prevents continues of

expect less activities. We of sales than to X% Mar after Cor’s of be integration CapEx completion

working year. net capital LTM points XX.X% of XXX the prior over and quarter First improvement of sales was basis

term, and as at continues $XX $XX the million given be for million could cash to in Please some in to Operating capital improved long anticipate adjusted XXX% well flow to year. XXX% our free percentage XX. amounts in teens versus prior have be varying above Adjusted sales now the flow the we quarter. working Over over income QX projects range working net cash net goal the products slide a requirements. conversion of low -- may of turn to capital

ratio X.X EBITDA. at of times net adjusted Our finished leverage

mentioned QX well balance basis sheet Ron the of annualized of end our a the targeted net long a run targeted remains As Mar within Maintaining approximately pro priority. our on within impact range a the over with range. is with leverage as expected earlier, X.X leverage Cor times our key strong of results forma

over long-term the BaX weighted slide financial Two the in were Moody's Our average performance improvement basis of an XX are year. This growth fourth XXXX Mar margins. turn and XX% of is X% both to acquisition. have upgrade the XX. to metrics. with Please to quarter X% key graph very to received since a rating revenue stable X.X%, targets points cost to an adjusted debt pleased EBITDA organic January We approximately shows for our credit prior following outlook our for Cor approximately

pandemic. especially the the on We constraints from our the considering with are pleased business placed performance,

highlighted will as organic margin On the we target. revenue actions right achieve have the well hand we multiple us as side EBITDA opportunities, adjusted help expect our

like accretive be expect to margins Ron? Mar synergies, XX%. also now post goal Cor long-term turn call We the to helping of achieve over Ron. EBITDA us to will to back would adjusted our I

Ron Keating

We're results XX. organic Thanks, had Ben. the broad-based slide Please most excellent to segments, with the quarter both business. pleased the metrics growth of revenue all an across key We turn with product regions outstanding in across strong lines.

the model. Outsourced expanded expected volume, Our Water priority make to ISS points, to pricing segments, cost year. growth mix. driven margin basis Adjusted highly price actions are EBITDA continues contribute a strong favorable during and are excellent to and recurring is XX by the revenue and progress contributing to

liquidity, opportunities it after Our pleased balance acquisition. brings Cor We're very organization. that strong high Cor the addition sheet the margin acquisition remains the with and Mar the forma enhancement Mar the and growth with pro to even of

tuck-in adjust acquisition for we our Our date. M&A continue other opportunities. Cor full outlook pipeline and and to performance to We're year active pursue the Mar to remains raising for

billion $XXX million to $XXX range respectively. expect $X.XX of million, We be year billion and $X.XX to EBITDA to revenues the adjusted in full and

EBITA FY range, slide I as the year full consistent a your shown of percentage will be in which EBITDA prior the low questions. for expect to we with that open the in XX% call first as is years, XXXX XX Additionally, appendix. the half on now of

Operator

And Oppenheimer. question from our Instructions] with first we [Operator Bryan will take Blair

line Your open. now is

Bryan Blair

offer hoping said. margin color synergies the morning a think Cor the should Good how for you. through you sources maybe year. on of key Mar a drop about little as of toward the target could I to the was solid you we you start progress XX% timing Thank more and

Ron Keating

Yeah. Thanks, Bryan.

branches are, their being that so the the to locations going are remarks our as out optimize be are able think those same in footprint in located branches I in the I Evoqua XX to XX key. area earlier, of highlighted

success service other say to us very The for acquisition. and in drive team thing continue to growth talented market network, I going opportunities got that's would that is just the coming this a we across additional giving is over capacity tech penetrating

of that the XX hard I we'll mean, remarks. this as ramp working a business. to and from my will got in is dedicated as the timing this -- I well that as months. to probably with timeframe highlighted. team the really we expect hit dedicated team We've integration far anticipate we that there it We're on in their goes As XX Evoqua up goes,

Bryan Blair

range. maybe X.X know deal focus the any within financial for Okay. those typical moving just you're well I target of referring thinking moving performance you Understood. And of more potential from period time? I'm year, about, capacity, exclusive M&A the way the parts, does not net complexity in leverage scale your the of restrict requiring a to of I'm team integration, forward tuck-in with kind that do?

Ron Keating

it think gives real us I opportunity. a

think make tuck-in want to and did versus that XX so is XX why adds driving of full we degree times any XX captured months deal the the that's doing acquisition what again, a it a I frame branch stronger similar We Evoqua But quickly. it want will scale a the once to there. there the dedicated to get team integrate doing members to to I mean, complexity. single opportunities mean, is of as into driving I We we're sure integration. we do. we've obviously time of very team time

Bryan Blair

coming the QX did you have expectations, may. Understood experience? into your quarter, margin of I date? there meaningful above shifts in to compare the was more, the early constraints is any a kind one And APT chain supply global of that there. more if watch QX given and was QX How part item exposure to

Benedict Stas

we're saw the components, we I electronics, good challenges, pass managing of versus about a of been eye more but overall, we've Brian, I one same area maybe through overall, that. mean, say quarter, same is I availability. more type it's would a now the related, obviously of a But situation It’s of and that's price managing little the the electronic really we the in closely very same. experience that area have we are them. on the the rest largest our challenges say seeing to energy would minimal No, pretty keep job prior of got the them components. doing it's But it's

Bryan Blair

again. Appreciate sense. color. Thanks the makes That

Operator

will from Dray question next Capital Deane we Markets. And take RBC with our

now open. line is Your

Deane Dray

end now Thank sciences you. the color on seeing Good that Cor largest your everyone. served all Appreciate deal is and the morning, like Hey. Mar life market.

And so pharma, for with et hospitals, addressable sizing between maybe can cetera. start we the here these market about

a for percent of in and doing what of us sense of Evoqua water themselves offer today, that is So that for they're gives hospital their kind opportunity is treatment to and in source a the outsourcing? that come what

Ron Keating

Yeah. mean, we hospitals the the high on a we I is lot that and of say identified would I Deane, percentage a products today. cases, pretty inside of we that insourced as showed slide diagram. provide

quantity system. them equipment though, is into But they're products sell the of about to-date, been do applications SPV we We outsourcing and an So hospitals it, outsourced as service but truly where water certainly managed quality water worried vantage maintenance, we've is then more water there. their majority would it the where own opportunity the instead for themselves. and we the we sell equipment, smart of the highlighted them more preventative driving into

Deane Dray

needs that hear. to, you. And tipping market we'd to the say, the to where this does electronics What's rather let's ultra-pure for water? and outsource market usually point yes, compare they where flip the how great switch similar say, That's semiconductor

Ron Keating

able hospital us lot of show digitally be to actually XX/X having the point the been that great a opportunities able benefit. to tipping team the been the technology. It -- have is driving there. site being we've really And members with on without systems to A has us

what which is mean, people do trend the difficulty them just helps to talent. the to going of need is for and for I driver promote us to and well, which staff that other that you healthcare the need. is good services in let it's continue us quality able being provide a well, what you they're do quantity what do is water after you do we The their find very provide

be as the now, that systems it's far microelectronics, in are it's I will or cycle synonymous much would right going later conversion. that say much but something during forward, As earlier that hospital the

Deane Dray

easily, second we're bit your low-teens right just to here CapEx, look on but is wiggle for some now you're low for to not cash be hear. that's the Ben, that projects and that conversion, know a working working drive Good but would number? extrapolate just free teens sales some I what you top And XXX% into guidance would giving higher is capital flow examples capital room of question working going quartile capital

Benedict Stas

wastewater has one head us we and some and room half year given into the as It municipal second the turn space, of that the is of Deane could wiggle things the in on projects pretty able capital world on levels. municipal pressure class in it area, and manage being does. keep about that particular working certainly We at that it's low good to to generally feel like it

However, the if projects, infrastructure those coming along capital. some working temporary they put could on bill, with pressure types of on start

capital outlook. little we've So left the in working room a

Operator

And question we Stifel. our with Jones from will take Nathan next

is Your line open. now

Nathan Jones

water be you I Good for a what there’s that on the quite kind any and can Ohio. Can there? these color in with start the timing might announced at? one you been of looking projects what are to talk terms microelectronics, morning, those want got that's some can be projects infrastructure Just of the US, microelectronics large around of in bugs [indiscernible] number opportunity opportunity you Southwest, go about on think of presents the the in everyone. some give to in you

Ron Keating

Yeah.

a takes that So bubbles it’s running actually just put the they place and amount system water is slide as even infrastructure for to order, you saw time we're in. market green, can and certainly still green very them also pleased it. the but announced with the we though up fair the of Microelectronics so on it end bounce microelectronics get X

can Again, in quarter demand we've green great So the market got right as those second over on projects expected far Nathan, we've now quarter order XX as as go, coming quarter. coming the you projects a But XX in that the to run months. know, timing highlighted out, pipeline on

Nathan Jones

wanted little applicable little a model some and water to you that Where your years. customer look within three ago onto targets Initiative in the out I Where of base across conversion you business XX% base over Outsourced that U.S in targeted And It was rolled of history. you Okay. Water a bit now the years back conversion outsourced the three three targeted are an with actually years? own those to did customer base you customer the -- XX%? get that

Ron Keating

Well, waters if we've as ISS's you a what third look at identified outsource business. of of roughly

is, systems know, it questions our with one And real earlier full new were. so that things think take a applicable I markets. we to, the got know, is outsource water. broadly to that in into hospital a you of the opportunity that outsource having and to other you And water actually When will to And And be that's pretty of us we other applications, products the to install we vertical sciences one and more system a can grow life the to opportunities much you complement gives solution line much this or highlight. opportunity. as able of the by what about continue expand targets service acquisition mark we customers talk

Nathan Jones

to water, share and use about Is to for while. the but installations You market being that talked gains outsourced I've share? a that you're model case about leverage XX% for asked of continuing that gain that not market that still

Ron Keating

the number mean, It of outsource that we've again say it seen a insource. I customers lot they in historically Nathan same continues I would what that is. to is coming getting and from And

whether systems that product to to allowing So treatment themselves they're have and buying together maintenance. they model preventative it's or them and where quantity managed with the the provide an quality actually us outsourced put they're and historically with water

So us continue gives they customers to to our market being opportunity, an the gaining we're convince what outsource as able grows to insource share.

Operator

next take Buscaglia question will from we Andrew with our Berenberg. And

now Your line is open.

Andrew Buscaglia

you Good there. color morning, it the seems guidance Mainly little this core me the back you hoping guidance much your was acquisition? And can more on the how you with secondly, was the not more margins I race like in like if a out -- half bit give out the the parse put guidance could of the versus does then imply declines that guidance year? year-over-year guys.

Benedict Stas

Yeah.

an of the we Cor plus then So the factored million was traditional seasonality $X line. that you essentially extra And the in so that million Mar was -- business EBITDA XX about same. page improvement. we on the XX The the B the should look be on believe core, when base rest at

And consistent our years. so historical we most also quarterly are outlooks our seen what with recent we've keeping

Andrew Buscaglia

point? kind capital expecting backlog conversion Okay. been into it at the exactly the of you're so some ISS up services backlog what and what's accelerated like what And what guess, would for looking composition, looking this of guess, prompt forward, guess, then exactly time, that piece revenues? I at what holding I just has service -- versus for, relatively now same some I -- going

Benedict Stas

to Well, convert. going it's

can backlog you the relatively that in we stay converts if it by which also We have that. help But, have, should you see that stable. of amount page time to XX, on category with

in pipeline. And I I across been we want quarter, the script, have backlog better to versus this backlogs the as ISS. been there's be a very robust we the services conversion, obviously. very much quarter, broad-based was that prior But, about pandemic, that it due and to have as a as well. And strong broad-based mentioned within are expected. pretty clear growth, we we've the converting, obviously, little Our

managing chain, continue challenges. availability sure talent that sure that for the the now, right supply the chain us making we supply to is and of making on So, key stay managing focused

solid, and very it's is remains demand good the and backlog So, robust.

Operator

with Baird. question our from Halloran Mike will next we And take

Your line is now open.

Mike Halloran

to something the about talk with of, asked taking backlog starting the you're that starting Hello, you kind of improvement everyone. a between that bit Do we converting on a broader in things little look earlier kind a then Good little at little bit conversion, see range of tipping model sequential do what that that where Are where seeing bit. multi-year and tied point at morning. towards line run you we're they'd normalization or would than -- that more you of a think thinking? orders here on see what's point taking number Kind growth with to just of been and a you're like really as to revenue more normalize a strong we're that.

Benedict Stas

I supply the constraining back the constraint, – normal, as supply still the we're think pipeline chain convert. a we and have the been job, labor key doing we factor remains want That's good subsides, end see turn as will really there of the throw is key through. the chain We've issue pandemic I robust, to as think equation well. got but again, markets well. remains to part but that's normalization things manage And key a also The but our good. also Mike, the I are another ability to to in

Ron Keating

that continued to multi-year we opportunities the pipeline, will yeah, backlog But grow. with outsource expect in continue the are Mike

Benedict Stas

It's stable. model. That's to going Right. be steady and this business

Mike Halloran

remarks, And you the the that preventing you earlier Maybe solution you perspective? from you That prepared of makes a like you've essentially transaction, gap, Cor mentioned a fills a then, in product feel on this having at Mar broadening I hospital think lot sense. portfolio said have that attacking what's the opportunity and from point. that what it, a this not now was whole got

Ron Keating

Not stop from being Yeah, question. have shop. to having able systems hospital stopped a great one that's a it

a emerging water we've entire other and much hospitals becoming hospital opportunities across much, as what seen well providing are take and have, to those are companies contracts as in complex, the with corporate they opportunity labor stronger. systems going us same dealing again, issues as on challenges full facing the shortage. actually contaminants, or country, the So, And challenges with consolidate the

the So, for them. us to the I go be, full in able and the a to the size think provider real that itself, solution in market be provides opportunity And as market dialysis whole, in to a but -- and has we've had it think size -- could trends it will million, it I growth past. grow good around time pretty we over $XXX continue

Mike Halloran

that on shop differentiated market lot the specifically. It one a in know stop serve differentiated more curious that of is I one differentiator, markets that that other that's that you within

Ron Keating

that face. the having a water market campus to that in us It does differentiate entire ability challenge fully that would hospital take

Operator

Andy we take question our from will Citigroup. And Kaplowitz with next

open. Your line is now

Andy Kaplowitz

morning Good from aquatics in seeing municipal Ben, to delays some Do markets begins uncertainty? still market their see think you that the mentioned quarter municipal you're yellow by still being then have are year in related is Ron quarter. it a and held aquatics I your of actually this last by guys. they wastewater above blue positive yet the but significant you or improvement know in turn down and up wastewater, various and seen still fiscal you to any here pick to end

Ron Keating

be the get. that fantastic thing going feel That's but wait is they're demand, while see opportunities funds for a bill what municipalities to infrastructure fuelling create The through great like a We to commented And question. remarks. going pause, the fuelling to it to does kind bit Yeah. for flow one as growth, turn do a of see of year. progress fiscal the we was we'll through the absolutely wastewater in the municipal green, I

operational better. the a parks seen are things we've that we lot and got indications lot I in think are lot the the are the delays some there the think standard that'll specifically to as so still what to certainly openings that of -- seeing the opportunities books and latter in there, market come getting our helping make highlighting of chart actually what's and opportunities a looking we're And said, in what as mean, we on a prelim But of quarter, the half stages, at return. is looking pipeline, exist. this but sure running year. the Again, up is out new we've the I Aquatics terrific is

Andy Kaplowitz

quarter Ron, been products Thanks us update new basically every highlighting you from APT, when and then now And presentation. you've quarterly for your that. in earnings

sort So of should to we you contributing X% the of X% growth how longer higher should as here, products continue that new so about, that we product to new term new products have. organic more know, Index, know, you you translate these go potential to guide, into Vitality guide proliferation your think all

Ron Keating

the that's things that Absolutely, and focused know, on. of you one we're

drive we’re new challenges to about know, to, and new we're like, we really, highlighting just and hub where out patents. opportunities, solutions headquarters continued you drive we know, thrilled that. emerging contaminants. sustainability bringing affordable, investing the again, more the see, We markets very in just treating evolve, our in continue know, and here, you you and Pittsburgh, new innovation innovation We with opened you as the know, And water see close

have terrific change drive launching a and of job range, this. say would done product and our We - has to Vitality I the and to we're going APT to continue Index

Operator

our Suisse. with next take And Credit Walsh John from we question will

Your line open. now is

John Walsh

I get to transaction. go Mar -- to to Hi, to like, to going at to were to Hey. what morning, you go good organization. for Cor looks I wanted able especially everyone. the a it the very it's valuation, bring wanted attractive Obviously, back it back

Just, for bit pipeline? bit be how history can valuations a about maybe more in us and your about you're that a give seeing came you to little little what

Ron Keating

they've being the for Yeah, been different able acquisition to years, quite different -- Cor of entities. Mar we've been we've a on close -- as number working owned by

four communications So, fruition more TerrAscend acquisition -- XX:XX:XX, to move quickly. back on with and the to or five it opportunity to And once we've the had forward which them, closed that on progress an going years. -- gave came us opportunity -- of we've

the are one. made I remarks, a negotiations, comment don't typically, bilateral about my in in in again, auctions. to of We So, one participate lot we,

worked our Our evidence process has process really and working. is this of more

we've X the it's a somewhere X those, at we tuck-in X around to acquisitions continue we see pre-synergy and our and that of identified look to As lot on, again, X to opportunities post-synergy. pipeline, times

John Walsh

-- air We've is of some air the quarters, It talked pollution. emerging we contaminants. we've thank that. quality couple -- we've PFAS. then, around lot a talked last and looks about I more about EPA Great, do to the starting regulations you like -- guess, And for

Just curious if might that or you're of waterfront, federal regulatory either seeing be additional drivers, state level? on out kind trickling anything broader the that

Ron Keating

in micro-plastics, of kind of power what it’s think are coal power it's converts highlighting industry it’s opportunity renewables the we’ve really and more is to a I different industry the the power lot pharmaceuticals is are the shut fired past, PFAS, plants been down. and water as well as

selenium us a are competitive and such that continue to marketplace give around that the advantage. very technologies contaminants unique as with We challenge treat in

Operator

And Goldman with Brian we will Lee our take from next question Sachs.

line Your is open. now

Brian Lee

for back Mar Thanks of going Hey, deal, annualized million guys, you but is taking make talked to Cor, $XXX seasonality good questions. maybe Maybe I issue, the this a morning. about the revenue. just think you when

beat this if three contribution midpoint the just adding And it You like revenue Mar -- guidance million of take the here I $XXX of that by kind annualizing Cor’s your decent in the seasonality the maybe about quarter. some missing from the we're at or is there to Is Cor adding something there why bigger Mar then isn't which the numbers as and guidance nice was look a business rate I up quarters or I a that amount in is think of here? Mar revenue else up to the imply kind million. expectations Cor at if $XXX would quarter, just contribution,

Ron Keating

seasonality, got do a lot the Well, et of in. first there's got we've bit that we right, disruption always business, cetera. people settle to about understand we an quarter, it's a anytime them, you the And acquisition, to little until own the assess

it down that. on a understand really took have we until are of this, work the sure on with for the try out. So little that – more to monthly cut doing. we We're as integration The and fine. to measured did it, getting later plan we call, we're approach that More takes We're in expectations. a but our now the It ex considering on to place. to very which we get we we in process an totals how confident rolled business earnings make in know that we come did in next

Brian Lee

world. sense Right. in enough. Fair Thanks. the That the makes all

as to infrastructure and state you're sometimes here it as any in terms us on things, for mentioned pausing as you post relates on guys? give you as The well figure second feedback, you it bill the new means seeing out try infrastructure side of to state PFAS they to can an trends the backlog the – of specifically what PFAS the question update the as of the as side passing bill you

Benedict Stas

strong. the is across very were set, I is see a a that to Yeah, across seeing to are little bit going of of what the be we're and PFAS thing think are pause see going like to and look but the wastewater. where same is a the dollars municipal bit seeing what regulations wait There's pipeline

see PFAS highlighted treatment. think we won approach but is the more year. that half city going specific phase We two Anaheim this half pickup towards that opening in the latter one think I but we'll in the of more happen I we'll continue, of year, imagine of a in the the around see remarks, in the to back I of orders the in a

Operator

Molchanov And we question from with will take our James. Raymond Pavel next

is line now open. Your

Pavel Molchanov

billions of a the it's of as guys terms one Thanks single taking contaminant for question. contaminant, spectrum just dollars thousands others? issue mean of overall infrastructure What the kind you just for that of it of package, from of the single given a practical difficult contaminant, Follow-up to very up what as to PFAS within regarding in disaggregate quality. to water on does asked a be given clean allocated were PFAS that

Benedict Stas

give a good as it's to market mean, give just us very I and government's that address I tailwinds going Yeah, it's secular -- -- the the to going think fix. and whole

So chain. of cleaning train billions to cleaning water of of up PFAS, dollars and you're the up contaminants going be inside inside you're going there, as other the the

backside clean And on is to to specification for have years treatment we and that have but define so the the when like something water it the identifying opportunity does one what to I have there is to to very define come. happen think means And, PFAS. the thing you're have strong we

Pavel Molchanov

so, Can cap highs. XX on? debt or or just STERIS leverage metrics of is helpful. we with obviously Okay, remind should EBITDA in the any you that last well than -- although, The kind the to to us higher has want your focus where that's months historical maybe below been, it other acquisition, you still

Benedict Stas

range. our we very, a one that of within Yes, we range that a to stay of remain exceed -- not deal run. deliver that But X not for that committed lot we I quickly into good X.X still the and at would very over we times look our We It's heck would think we made range. times, that sense. outlook, could long when

X our staying, range we EBITDA So after and committed keeping times. feel very to

Operator

we question with our next Cowen. And take will Joseph from Giordano

Your line open. is now

Unidentified Analyst

wanted in is color any growth on in APT any do you Good Joe. segment, forward the Can for this for way. results I [Indiscernible] development? touch for been to you has pull provide morning. This the any demand Michael organic believe

Benedict Stas

APT supply more Actually, no. chain could other have within way We grown around. the for it challenges. had some It's probably the been been of not

was in, of obvious a nothing that a of out. was terms push was in this can it quarter pull more there in I So that

Unidentified Analyst

if a covered may. of full more, prior, apologies and one I the Thanks year? if was breakdown this but segment I is growth for organic there by

Benedict Stas

for not we No, our most for Mar and but outlook growth you take year, remaining was full down of out it organic really could Cor organic. the the break part, portion did outlook the

Operator

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

Ron Keating

and for you attention time We you Thank again thank your and joining interest us appreciate in Evoqua and questions. for today. your greatly

thank team Evoqua day and our we team into on mission executing transforming water the members every and organization absolutely purpose for enriching our our are thrilled We life. of the to welcome

So we'll again you. talk you Thank to next quarter.

Operator

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

You and thank your lines, may your now Evoqua. interest in for you disconnect

Evoqua Water Technologies (AQUA) 1 Feb 222022 Q1 Earnings call transcript