BMI - Earnings call transcript Q2 2019

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Operator

Ladies and gentlemen, welcome to the Second Quarter 2019 Badger Meter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] As a reminder, today’s conference is being recorded July 18, 2019 at 11:00 A.M. Eastern time.

pleasure of the Strategy. Investor my Karen over now Director Bauer, Relations is to conference turn to It and Corporate go ahead, Please Ms. Bauer.

Karen Bauer

XXXX welcome Meter and the earnings quarter morning, call. Good to second Badger

me today and and website. Officer; Chief related On the presentation Wrocklage, call are Bockhorst, available Chief Bob earnings President The Officer. are Ken Financial slide Executive and release our with on

and subject statements the the risks Quickly, reminding forward-looking filings. SEC this Harbor of cover important press are uncertainties, any Safe in made I to call which are will that you during our various and most outlined release

Finally, that today’s refer will metrics. please note call, certain we financial on non-GAAP to

a financial reconciliation provide non-GAAP the metrics slides to used. GAAP Our of

turn I’ll call that, Ken. the to With over

Kenneth Bockhorst

quarter earnings call Thanks, and Karen, today. second thanks for our joining

So and the results performance the encouraged similar I’m while innovation delays, encountered reflected fronts what our funnel pleased opportunities with we this of of remain quarter to number look impact we’ve forward. historically, as by of a sales on our

example, For quarter gross gains. again improvement year-over-year with fourth margin quarter, profit the this consecutive generated we solid

well details and and that, spend quarter. was a about flow initiatives I’ll our will back strategic the and overall through strong free managed and outlook. quarter, SEA we’re cash in reduce able Bob you and talk walk working of Our the capital the to generate come after few key

Robert Wrocklage

everyone. good and morning, Ken, Thanks,

sales, with see As modestly flow. lower mixed can on operating you but were margins overall Slide our robust results improved X, cash and financial

declined to last The the period second the year. $XXX.X million, quarter sales million water for were in compared Sales $XXX.X municipal same X.X%.

lower for are down in radio products, the the newer reflective ORION approximately Middle of East X%. year, prior the orders order sales large endpoints. including LTE-M technology deferred were volumes The Excluding

testing which year. later addition, to originally be will expected shippable large year, three- meters, commercial we diameter until in and be our the early continued and E-Series this not advanced four-inch In available

meters lower over year-over-year, and industrial Operating instrumentation sales well improvement despite increased Ultrasonic a an positive X.X% sales of across as profit year-over-year. remained experienced increased with with Sales prior BEACON a with the radios, service volumes of XX.X%, XX-basis-point lower year markets. meters was as down results, the percent of mix Flow volumes. were end array revenue as sales

Gross In again half regional as order margin basis radios, was meters, for what quarter range primary year. of mix. magnitude, XX% our the to would XX.X%, XX% upper historic the a favorable Ultrasonic driver call points of with prior in above of XXX of and the higher well the we meters as was revenue, service BEACON product proportion favorable mix with normalized and

remained In pricing as year-over-year. addition, input costs we favorable net lower brass experienced

with to The first as to half XXXX parity back-half copper of we pricing year second-half as is the copper at anticipated level costs. out input benefit is get current the

quarter the measures. as internal in million, inflation $XX.X investments, incentive control with growth period cost were were expenses the higher and by SEA effective consistent comparable offset second last year compensation,

tax recorded exclusion essentially tax was charge. provision As second prior or with the of quarter, pre-tax, you income charge. may share XX.X% of the rate an year’s in pension after $X.XX after-tax we $X.X settlement in second XXXX during recall, year the adjusted settlement per line prior XX.X%, The pension million the quarter

adjusted of second the charge. settlement excluding prior sales EPS lower the and In XXXX, year’s in summary, of $X.XX the in EPS quarter X% the modest $X.XX, from of generated margins decline improvement of operating a pension

prior to capital sales quarter-end, this pleased of trailing year particularly the down XX.X% last was which $XX.X a quarter first same period XX.X% primary at XX-month was of our equated progress from management, the I in with quarter strong working increase the the million, XX% of contributor flow meaningful the end cash of of and an for over XX.X% at free This to the quarter. the year.

significant built acquisition net the organic midpoint on fund dividend of zone us sheet, with net two with comfort which growth. coupled to additional provides as times as leverage at and well the We liquidity cash balance our our program

I’ll With to turn over call Ken. the back that,

Kenneth Bockhorst

I on is the minutes to Bob. want varying pause. we’ve just spend a before that thanks, something degrees. Hey, few This encountered to innovation

XG For second we’re in preceded was the back XXXX, advancement launch quarter of from it. LTE which an cellular example, of the nearing radio, that the radio

new upgrade the need would a you treated Customers cellphone. you potentially when like

XX that likely the would that say, coming investment utility You contemplates, iPhone And three-year bought years in out XX our the two versus be customers the iPhone have will knowing new last or cycle XS that a not contemplating. a to summer fall. – two-year are

solution example the so deployment today features is is system-wide prior XG added greater. area much LTE LTE-M more from moving LTE but further and was the power, move and The customers, the to from to benefits meaningful, broader testing utilizing network low our pilot the from significant. understood while To to to valued also wide wait, by are the incentive

our to Turning meters. commercial

the SQDC manage delivery hallmark delay While disappointed the and and it’s solutions, that prudent cost with launch E-Series products are it that of I’m metrics D-Flow delivery of our and three and and being before by. process the or testing coincidence advancing we we Quality meticulously. four-inch Technology, safety, meters in not in comes and quality, is the a a

year, fourth to announced Looking and ahead, into spring the quarters. begin which wins the earlier third and this towards in the the begin of to slated end shipping now were we are summer, meaningful expected

reinforce Meter priority. attempt As rates and provide does timing necessarily guidance. quarterly focused why we not These their wins our puts long-term contract and shipment not to do and as customer-centric mindset remains remind determine investors, Badger examples order requirements top

Finally, X. turning Slide to

quote plans. half the by opportunity remain support of year, we encouraged our As the activity, move and we to the funnel, backlog into back growth

and Middle on-off pause remained switch. will QX a and difficult of competitive In spending have more addition, a dial an than I on will comparison and our the share positive trends again municipal East positioning. innovation be

to best practices product functional and resources and better regions initiatives organizational made across Execution on We’ve several our strategic lines. changes leverage continues. structure in areas

revamping our management product phase process. and We’re project development gate

And environmental with footprint. continue also We’re that deploying potential ideas actions turns, dialogue garner our we working management candidates. increase acquisition and capital to improve for while

to closing, for employees efforts want across our their In customer-focused the commitment. and I thank globe

operator, please line open that, With questions. the for

Operator

comes the Thank first Instructions] with Chip line of [Operator Canaccord Your from question Moore you. Genuity.

Your line is open.

Chip Moore

Good morning. Thanks.

Kenneth Bockhorst

morning, Good Chip.

Chip Moore

Hey, good morning, Karen. Ken, Bob and

Kenneth Bockhorst

Good morning.

Chip Moore

can you can maybe you expand your me – right? Hey, on all hear

Kenneth Bockhorst

gotcha. Yes, we

Chip Moore

great. Oh, Great.

at of being take earlier So to an the can innovation If of comments maybe in how back-half the on dial you than more switch? LTE-M, in comps? account the that, your best year addition can we the into the we we’re E-Series on think expand delays pause on seeing on pause on-off a least about

Kenneth Bockhorst

Yes.

do of in Chip, land to imply I – to just growth year, going return the mode. back-half the So, QX of we stacking, what want expect to top But don’t to right, where QX. naturally what it’s that out on QX is is moved of do or back QX,

confident. So, we’re very

We with. that QX. borrowing they just have are confident move you I would are it’s we’re to specific that not caution of targets customers and QX forward that stack going piloting these very a

Chip Moore

or worsened outlook expand on the didn’t of bit and have on out was Understood. but of That we that broader or markets your on talk Ken. the can you’re side? whether weakness you industrial some a some the a side, in we’ve industrial like little things sort deemphasizing macro makes there And seen called broad-based lot sense, we sort

Kenneth Bockhorst

Yes.

a industrial side, that’s little of So small a business. on of the right? the relatively numbers, part bit So of there’s law small remember, our

that our quickly. So, business also another those or has numbers more international exposure. to pretty it’s easy part That’s have move of our way of one

wise market going noise. our general, more some feel forward, just feel even there But So, the to still we’re our channel about good in ability with seeing little of noise about our there. and still a confident work prospects global I bit relatively

Robert Wrocklage

key But to end verticals on focusing execute that your talked on strategy yes, and continue about the markets, remains Chip, that the we we’ve the of point focus. clearly to four

Chip Moore

Got it. do of one and Middle comps, potential how We markets? have And some may, traction I about one the last in tough particularly but think there still you type if those East. guess, international, I maybe multi-year

Kenneth Bockhorst

Yes.

good feel long-term So, the East Middle opportunity. we about

So, we meters. five-year just the through GCC in three- continual it growth. deployment They’re be year going would never a smart quarter-over-quarter expected that a same to

a primarily second that quarter, had was win third year we quarter. So, last good

We’re I order can’t next but that predict future, the comes. optimistic when say, about still

Robert Wrocklage

consistent I and for million. we guess the hurdle last to is And just quarter overcome in quarter perhaps third that the hurdle quarter, the million. the with to $X And quantify call what I for second think, of looking was that, the $X or on amount roughly just north forward, the experienced rate

Chip Moore

guys. helpful. it. on Got Thanks someone a to it pass lot, else. That’s very I’ll

Kenneth Bockhorst

All Chip. Thanks, right.

Operator

Scattergood. next Ryan Your Connors of with comes & question the from Boenning line

line open. Your is

Ryan Connors

question. Great. Thanks taking my for

Kenneth Bockhorst

Yes. Ryan. Good morning,

Ryan Connors

morning. Good

little quarter, little strong a if focus the I can I So granularity more line. you yes, the us light give top to softer very margin wonder I cost in – on drivers margin a side. in especially of the the wonder performance, want around gross more

you So the was maybe, what and Bob, as sort relative more the there? of and about relates to us and raw give materials just it takes can puts that of if mix importance

Robert Wrocklage

Yes.

try we again, you sort commented So but color to historically of out not to not try on frame give magnitude. to individual the components, and I’ll have

quarter of margin drivers, expansion the is again, largest and XXX-basis-point primary, the mix. the gross the So in driver of

that, really break two so I elements. would And that into

mix. product is first The

like see to in line certainly So meters then meters, tend those where higher average. above where be with and so BEACON growth Ultrasonic did profile we – while overall, we margin products, were down we was radios, software-as-a-service,

margin accretion some see you So, from that.

mix of mix. piece regional really second is The

had ago, million knows, below everyone we and so year comp tough sales those line while as Middle to recur. $X didn’t with that So, sales, East average overcome a a of were

of kind story. that’s So, mixed a

small bucket, to our bucket that linked cost or cost business the albeit an price element got we’ve of is certainly pricing. list Within

external that about On has of again, in to tie And businesses increase utility Xst side, And done business. of year. pricing. flow through then done we’ve side, is the price XX% on January a we’ve a line last October water list increase which distribution, on our price instrumentation in of closer the a

$X.XX. but a see naturally $X.XX, input, the price of our not if PAM. proxy being the of necessarily cost through price Again, the versus just amounts of look for small side that’s XXX kind it’s ago side So, as on but in a a copper, now coming equation, the result you year as range those, copper at cost really you

that’s on the cost that. So

But the LTE-M. we important piece is, to did launch while launch did see deferrals order we of the LTE-M, other the related

talked as And so about that lower historically position. cost a we’ve has radio,

is would we benefit that cost – cost improved And so, high position. volume the a we as did wasn’t reap from while as have liked,

different our gross So together, what’s the those components when you driving margin that’s really kind year-over-year. all add of of improvement

Ryan Connors

basically control, side, there. seems. detail. SG&A cost the you other Thanks. helpful flat down line it go just My year-over-year very Very as That’s well, statement, income as the great strong

is So going top as that? a the some – SG&A that – sequential that expect a back improvement in get aspect the to savings just be we’re we would of line the sales SG&A, lower selling and to hence, of on going to of up or function that keep of and some or flex we

Robert Wrocklage

Yes.

the say, the reduction real other that’s you’d overlap So again, executive the than there, extremely things I expect. is, of think terms per tied in being phenomenon seeing there’s outlier, peace nothing that again, naturally cost would variable that’s a influencing or se, costs. The and you’re I to

about a year. and going in If executives positions that the in multiple you we this having then talked recall, in ago away year past,

cost cost continue will management second-half. continue. very with and in the initiatives so in expect the management that piece the that would And the to But certainly exercises quarter, and yes, we pleased

Ryan Connors

Okay. And one last me. for then one

gauge progress know full-blown will some kind hopefully we outs to it? Just putting I from those of you roll a mean, the when and of the that issue how obviously, cases? great is and mean, and I in little projects you into this decision just be size? outs the can that wins outs by roll How Can process intra-quarter, bit the customer, just into pilot out blown and that those of full announcing turned a on pilot of moving educate a technology us ahead how sign. successfully that pilots, we roll certain gauge on about

Robert Wrocklage

let Yes, Sure. a give pretty you shot. Ryan, can difficult, imagine. as me it It’s

going did sizes, a call I announce all decisions not It’s of So on we’ll we as many you larger But that type cities whether But we on couple saw we city wins to that. the earlier announced pilots year, continue a significant habit. it. wouldn’t in do right? one-off or and have in of

at made, in you is going be plus from are be being to meter, and going. it So would right, the on lot difficult the decision a very how that. meter updates software-as-a-package to But able of to how quarterly implications cities give the the is looking the that’s type radio, plus traditional

more some systems. upfront aspects roll a just of We legal it’s involved was transaction are to the of the together. because to looking and integrate billing bit now the than outs. gets it the see perhaps in discussions a for more have it’s complicated pull they People – And of all customer

So when we same pause. are don’t in this kind customers right, part we’re And going that, what engagement. here at time, the of radio, don’t happened this the they is get into they meter. They the of do where that’s the innovation buy buy what don’t that, QX but through BEACON calling

ACE the during quality the getting a We of issues positive concerns. the of we’re So from feedback We Bob that problems, were in participated and and out we’ve no had were National tremendous heard Conference a of services. very that’s amount terms at show. in Mayors. our tour any I on on product recently we’ve quarter. customer offering And customers

be some out. Long to a where frankly, really with part we going like and of that’s not our sure, situation. why coming roll to question. growth your we’re returning feel it’s I variable optimism I So doing answer, is – But and our think kind of the multi from, optimism well answered a of large

Ryan Connors

Thanks for time helpful. is that No, this Yes. morning. your

Robert Wrocklage

you. Thank Sure.

Operator

W. Eastman next Your from comes line question with of the Richard Robert Baird.

is Your open. line

Richard Eastman

Yes. Good morning.

Kenneth Bockhorst

Rich. good morning, Hey,

Richard Eastman

Good morning.

pegging revenue at What you business of a was the a…? total Just I’m the that if percentage but XX% in maybe quarter? stat, Is utility quick, about utility the would, of revs. business.

Robert Wrocklage

me. I of Yes. it that’s where reasonable But in consistent with is. Yes. it don’t and front have pretty normally

Richard Eastman

business, commercial piece did here? And the utility Okay. piece how then commercial muni, the or the do the of muni

Robert Wrocklage

Yes.

Richard Eastman

And go we didn’t get – ahead.

Robert Wrocklage

Yes.

slightly more commercial commercial, down, average slightly and the is take line down average So residential down we’re of so if less. what was line you than actually

didn’t what four-inch is about even to expecting. second get think three I I like Rick, we So shipping that, though and I’m in was that quarter disappointed that Ultrasonics

We’re meters. still selling lot mechanical commercial of a

think So really and shows, I play to it of for product able again, we’re being down Ultrasonic slightly. mechanical But the is – the us. and quality it winning offer breath

not of line. was but it down out slightly, So certainly

Richard Eastman

been you Okay. – and And would the non-res have down, consider all you given commercial Is or…? market? that I does mean, the that construction marketplace? market just mean, the to surprise at I commercial construction

Kenneth Bockhorst

Well.

tricky a that’s So question.

I not, on don’t or down. I I wouldn’t think – think guess – it’s I comment. I whether

just it’s think okay. I

Richard Eastman

Okay.

the those delays is what were curious, on – earlier process City. you do the starting caused the or Okay, higher I’m – at projects the second. we all Elizabeth here, the stumbled related, kind I weather Hey, actually and is we the just Is right. getting all the mean, into think just delays then of that that year, just that won to this back there? then circle funding munis was of two profile. projects? projects. and for a The a little that second that in in quarter, And we the in one won

Kenneth Bockhorst

Yes.

Columbia. goes a specifically think us about as doing There’s is just it Aurora in a large billing testing for correctly of talking there. part bit the and that and they’re pilot making before, units, of their a I they complex, And little integrations sure right? of radios that. system that on significant you’re was making pretty up pretty it’s I of that So number meters build that mentioning sure So works a their and front have

some some is, QX, and to the And to during then see of begin will going will during what those one installation projects and we’re QX. revenue other see begin

just meters of, people used the more and again, ground. integration the just a complex when in them natural and state buy to put it’s So

Richard Eastman

Yes.

right. was And I’m that it business only was And earlier calls? referenced goes your distribution. utility think I your All of the reference to then Okay. curious that be independent must XX% distribution. that, through

how Is to kind that of you’re that So number? that the – distributors by from Badger. purchased been pulling have reconcile that number

Robert Wrocklage

correct. That’s

Kenneth Bockhorst

Yes. Correct.

Richard Eastman

Yes.

Okay.

low. a Okay. the tougher kind you bit your third. we’ve last little from typically low of in sales, seasonality, East typically just to, summer the they’re Conference And in the the got third, Mid know, listening to And the third a And single-digit then sequentially quarter around your I slightly when my kind I’m sequentially. down of hit maybe second of is question

of projects talked some some And the of starting you about the these delays, fourth. maybe later in up if not third,

yes, Is second So is light of how and thinking how it’s this the out revenue? the lower but out seasonal take tone – noise revenue feels, probably revenue, third? we third we you second seasonally when softness into quarter pattern? some market should project-driven is the about just seasonal of quarter were kind this the kind be that of into the delays off around very the – same that play It of here in is quarter, of

Kenneth Bockhorst

Yes.

factors starting, you by down So referencing, So isn’t work break there’s right? a of the that and weather they’re areas when we’re to in talk it’s that two can the multitude about bad, necessarily projects it they regionally, starts right? there. So if

out you East have to July, up in go so Coast of the starts QX. pick in lot and fiscal budgets a that, they to year You the tend

problem. so, multi again, And variable

in this type line-of-sight I think, some you’re different little the applying mid-size direct a return of we’re with. bit to we the to we growth of just to past. But But we of opportunities deferments, going true. holds profile I thinking a year, would have think some the than think, it, that general because have to But smaller, that had we’ll see

Richard Eastman

Yes.

to any contract E noise you that this last any change meter some just kind there will. just Works you regs a there’s there? And the kind have on time some City around just E we we my But – market projects, question, was But back some supporting your AWWA, sorry, no as pricing – of or lot here. is these American fall out bumped if specs, put by E any of that – competitive and But look meters the Water it endpoint. by number maybe saw noticed question, from meter the Association bidders that like of just market, of in you of taking triggered last the Elizabeth degradation I’m it Okay. going around, in in into, that maybe last

Kenneth Bockhorst

that. little Yes, bit so about a

a just have me let very competitive process. that, we off, first So say review robust

know might of think the players to other trying that about we here. rest the who are So world in the come

So to us try people this isn’t new to would news that here. come

So that’s one.

there. And at then all who are at right? is – anyone they’re the still or here Frankly, ACE strong support going feel are of not. mechanical. the know units XX% the XX% sorry, revenue our are units of little of the still ACE, we all AWWA so two, was all very say, So bids of our – who are are. XX% know still on guys the whether booths we competitors XX% over that are the to mechanical. that still Ultrasonics who’s our Ultrasonic guidelines come Ultrasonic. saw of we of I’m XX% We also,

I trying they’re hard. Coming in been We far, So pot, who’ve a really not making right? competitors strong partial fight thus years know are. against sell they XXX XX,XXX much of trying would Yes, to aware how municipalities. against but of them. who an to know impact, we’re them. say the that’s they’re We line with a here long

Richard Eastman

enough. fair that’s No, Yes. Okay.

right. you very Okay. Well, great. much. All Thank

Kenneth Bockhorst

Yes. Thanks, Rick.

Operator

Stifel. Your line Jones next from of the question from Nathan comes

Your line is open.

Nathan Jones

morning, Good everyone.

Kenneth Bockhorst

Nathan. morning, Good

Nathan Jones

you. Just a of clarification to couple

Are you’ve talking that is in municipal, in of East? from quarter, You the domestic headwinds Middle you inclusive about the growth got about or growth specifically that talked back-half. the third the

Kenneth Bockhorst

Yes. great. Yes,

Nathan Jones

it as inclusive business of instrumentation the well? Is flow

Kenneth Bockhorst

Yes.

of the for the on utility, East yes. optimism have asking So majority the for that order, I’m speaking don’t the that. clarity great is domestic I So right? around on Thanks question, the the choppiness Middle just visibility.

in the the get to be about instrumentation talking growth mode able on and feeling the like, still flow business, there a to we’ll back returning So growth into second-half. yes,

Nathan Jones

Okay.

growth Middle we in be So East? or a that total business municipal headwind to this that show quarter expect from with the positive shouldn’t – necessarily to

Kenneth Bockhorst

have from I mean, order we yet just Middle the Yes. East. frankly, don’t the

to ability turn difficult. that in do the and So something it meaningful would this be market year,

Nathan Jones

quarters. have flow mean, can that data bunch a the gives of couple maybe a you here the bit there you’re return you been say from constructive markets The Then just over of I macro on few confidence I a has selling last of there months, that easier clarification an instrumentation. wouldn’t What aside to into that pretty not a more weak. been, growth comparison?

Kenneth Bockhorst

Yes.

– some opportunity and So right? the we’re So markets look huge they’re have, pockets in think we channel at find still can we I opportunities and when that of there. very we still still small,

out wastewater being Our markets gas, that really oil at hard building and talk for in team’s working the and the about chem., HVAC. channels we target petrochem,

you’re right. about the the some there. activities to return the feeling good great we’re mean, to in So, yes, don’t and market space. data that I growth taking look But we’re that

Nathan Jones

maybe hit follow-up mind couple just that a when shift us of Then questions Okay. Could to market? LTE-M. the the on you

Kenneth Bockhorst

Yes.

So in officially shipping and it in launched began we April. March

Nathan Jones

market – some the quarter meters to second innovation this an a kinds say of the year. of see XXXX? be or first you we the towards of why quarter? folks then Would kind going in of coming quarter pause on the are impact hitting quarter expected those business If knew the more this to of first just that earlier end than fourth of of the would and out little of have XXXX I didn’t

Kenneth Bockhorst

going to but did intended still go but And QX, QX, in we because a talk I’m didn’t names, Well, been have to I going name frankly, really customer piloting. good the convert that’s with in a not mean, last long briefly have that’s that we on call. about time they’re us did that to we

in QX that but… some and is there the QX, So of

Robert Wrocklage

specifically. and was quarter think transcript, back first if read there you I go the results, quarter first a theme And our in

line-of-sight last it now. five to for something the that’s necessarily It’s months isn’t been about. had frankly, six something has we’ve and quite talked hitting So to, just

Nathan Jones

confidence this in ended helpful. maybe the to or could we what and back the you that end, is pause you going quarter? that’s comment gives growth third has of Okay, kind to on get Then actually

Kenneth Bockhorst

Well, so QX. the about off start that projects QX we take and two in previously, that spoke to

that with, state. the initial phase down that the into the that to the order been understand at is, percentage cities I year-over-year. specific know the we’ve while working from and that the – Some questions And very over we’re thing tone we close remember the of of the getting percentage

look But these way those the at we’re sizes have cities when and are of that gap, funnel and the can funnel. close you of seeing some that of that these, of right, a couple the couple a opportunities we types in just

Nathan Jones

kinds you enough actually here? you’ve Do still to impact still got enough. the out to this be are in the the the going – get Or and of is of quarter, an orders these drag do in deferred that will picture these from but think will growth? think on Fair funnel from third that that purchases get over you deferred seeing the hump you’re kind of that there

Kenneth Bockhorst

Yes.

yes, this similar point So very the I in opening the to of. comments made is,

funnel we but some feel good, in might pretty enough have still that’s We the be away. that there

and is come good the the funnel we not on-off switch, in, bar to stack really some right? growth. a this of dial an are that opportunity and to the more a get about So So going or but feel

Nathan Jones

build should you’re it for me what is up kind then So saying? guess I of

Kenneth Bockhorst

Yes.

Nathan Jones

it. appreciate I clarification. the for much very Thanks right. All

Kenneth Bockhorst

Thanks.

Operator

question line Buscaglia the from of with Berenberg. [Operator next Instructions] Andrew Your comes

is line open. Your

Andrew Buscaglia

the for thanks guys, question. Hey, taking

Kenneth Bockhorst

Sure.

Andrew Buscaglia

the here. But that the to order – on horse beat So dead yes, – push not out. on yes,

that back-half. just to I’m mentioned you So things trying in won’t the stack understand

the there, wouldn’t of I bump? it like have So sort But QX guess, through? QX. I’m be for you understand there some to expectations sounds some why flow incremental, What’s trying and

Kenneth Bockhorst

Yes.

to back expect on directly are again, from that those like. business and amount tend uneven feedback maybe funnel, total to as as through. the to decisions start we’d those the nature So, are by fully What and can quick doesn’t happen it we sales going make to in sometimes be the that, flip customers team some that – the of that that based this

and take to don’t from call is going one everything that So quarters what we just I add QX. to top this you saying want on we’re from that that, was expected is from differed away to whatever two

Andrew Buscaglia

Okay.

Robert Wrocklage

I line-of-sight of we’re cycle layer Andrew talking about and other is short XX, which – a XX been think key that choppy that get about predict business, question on make it’s the that right, it What projects month, – to concept relatively these a the just our – we’ve XX, is, of is obviously, rest challenges, us two And we’ve how We those a do, to that’s got backlog. the know in. opportunities the these talking they’re predictions gets reinforces and to trying difficult only difficult quarter-to-quarter. to to is very which ongoing to unfortunately, really business. it makes

think from But period sort to difficult quarter. make comes of think the it So specific pigeonhole is I we confidence the our a that from. or time. we of I where think time, about into that’s that of If second-half, longer periods earmark longer commentary

but we’re make provide give not to So we that, sure don’t want guidance. giving enough without clarity also of losing We trying to guidance. sight

Andrew Buscaglia

Yes.

sense. make Okay,

be six kind in still are you you months? does cash in disappointing of you’re could you a had M&A cash to what give really for free is for an think a some change that or Curious you – us and if here over quarter you strong conversions. light starting And of guys? cash priority of what Do update Okay. the on anything – your build use will flow next QX,

Kenneth Bockhorst

Yes.

the priorities same. cash our So remain

going in we’re our to to maintain continue lead invest innovation to internal in So R&D the industry.

earnings the increase, We rate important and of M&A are dividends increase for pillar going us. a continue and is to fund at to strategically

priorities three a net just the cash are those So change because Those into we’ve for us. position. turned don’t

Andrew Buscaglia

Yes.

All right. Okay. guys. Thanks,

Operator

Richard question W. Baird. comes line from with next Robert the Your Eastman of

open. Your line is

Richard Eastman

Ken, sorry about that.

Kenneth Bockhorst

You’re That’s okay. back.

Richard Eastman

the of either in look what opportunities, forward health acquisition the year-to-date? on that particular? does kind just that thought number What like funnel steps is Just – the you around have, here of anything one – any more the of or just

Kenneth Bockhorst

Yes.

talking are to the So funnel, and that ways talked the the lane that health companies strategic Rick, previously. about in are of solid, we we’ve is

is just the think flickering. the sorry, that tell we I are I that, you are thing – would lights

out, the goes you, if Rick. not avoid So try to power that it’s we

Richard Eastman

from lights are miles fine. you, five about I’m my

Kenneth Bockhorst

Okay.

So the that have very can or funnel is deploy that that things lane are that methodical fit are to are cash know that active. we But that expansion. strategic going pretty making the and The we to being funnel we channels lead the strategic feels ways into we we just sure through sell and our good. global

quarters, as you So the but funnel imminent. to away – thinking previous on walk said I And something’s I’ve don’t feels good. want

Richard Eastman

Okay.

Okay, some moving but there’s things there are opportunities forward? and

Kenneth Bockhorst

Correct?

Richard Eastman

enough. Fair

Kenneth Bockhorst

Yes, yes.

Richard Eastman

Thank great. you. Okay,

Kenneth Bockhorst

All right. Thanks.

Operator

further questions Ms. over at back I time. to There no turn Bauer. this the are call

Karen Bauer

everyone, thanks, for our joining call Well, today.

For have. tentatively third XXXX pick for our is your purposes, Thursday, questions follow-up October planning great XX. day up all scheduled any to be Have may around you call day. I’ll quarter a

Operator

conference This call. today’s concludes

disconnect. now may You

Badger Meter (BMI) 18 Jul 192019 Q2 Earnings call transcript