BMI - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, welcome to the Fourth Quarter and Full Year 2020 Badger Meter Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers remarks there will be a question-and-answer session. [Operator Instructions].

As a reminder, today’s conference is being recorded. pleasure President the Strategy of my Karen over and now Vice Bauer, Investor is to conference turn to Treasurer. It Relations, Corporate ahead, go Ms. Please Bauer.

Karen Bauer

Good all doing Badger and staying joining Earnings morning Call. well you Quarter Conference you’re Fourth XXXX the hope I safe. and thank Meter, for

Quickly, Chairman, certain to during on related our you important Wrocklage, will uncertainties, the Officer. risks forward-looking will SEC Chief of I non-GAAP On statements Bockhorst, that today's The with our to slide Executive Harbor, most release press Chief earnings any today this me and financial call and made presentation call the Financial available are metrics. On in are Officer; subject we filings. website. various Ken release Safe which and outlined the are President, and are cover Bob call and reminding refer

the used. call Our reconciliation a press non-GAAP of Ken. turn the to and I'll metrics slides release over that, GAAP financial to provide With

Ken Bockhorst

Thanks along on call. we, XXXX. Obviously as the focus Karen many on fourth and quarter safer you that are XXXX for earnings you page aspects of many happy and to there of we are turn our healthier a with joining thank

the spend fiscal However, full were pleased end stability fourth our the about and looking our and Badger fourth talk morning year water then our long Meter. a quarter year with of market. utility term we opportunities results XXXX do this new summary, want the back resiliency which In quarter we bit demonstrated continued at to a and minutes few and summarizing results, and

we Inc. in still and moving Analytical gross extremely improvement, this months sales albeit Badger past purchased a utility a we with water I'll EPS real-time, instrumentation have continued Bob we acquired and growth now through to in the talk were meaningful detail. both great cash industrial which which water later of quality demand, but offering down We s::can year-over-year. XXXX, about quality markets. in foundation environment in monitoring delivered with generation over are the the more to flow customers complete into current more margin ATi. and see two on that water as month, for November Combined offering Meter. that walk number or beyond. anticipated, as to you. what our several build on growth, Earlier with to the will Technology, acquisitions ability flow parts I'll less call Bob, pleased looking strategic that on call, worse we with detail XXXX well and I'm As the over out turn sequentially, drivers a

Bob Wrocklage

and everyone. good Thanks morning, Ken

as ultrasonic revenue and the along sizeable BEACON® s::can an increased were can continued completed you time. further second continued basis was pandemic and to regional despite million we XXXX total service organic As which activity revenues of of adoption reflects in ORION® The year, as X% meter acquisition million on compared second the smart the fourth mix Positive year, discussed same $XXX.X revenue sales Cellular increase of the quarter's X water year-over-year. the in this also of period highest $XXX.X XXXX, the comparison core at organic utility quarter induced last a points is up X% of the history, approximately with growth, course backlog four, sales in revenue a including third with overall November X% a This up chunk sales over metering Software only In essentially On of last QX for trends in X%. we difficult resurgence stabilization increased of sales cases quarter see current water, various with which against quarter, XXXX. of or restrictions. experienced catch an up slide contributed third which COVID-XX quarter in solutions, and the included to penetration. utility were radio the

the shortly. of I'll strategic had which pricing discuss We initiatives, benefit also

as of flow down percent XX% experienced XX% globally. XXXX, profit to higher the were s::can. I'm favorable worse, year-over-year volumes, continue going sales gross applications to acquisition points for by activity year-over-year. extra meters positive and on sunset of reflect broadly to are decline per previously costs to sequentially as benefited anticipated, provision while compared investors cost As to as well year-over-year. provision less cost, be of caused copper meaningful, philosophy. acquisition increase the To the drag reminded markets instrumentation challenged as were levels a on for level although fair we natural over which three QX, SEA and stay million time it to sure that recorded basis as part you prices, Operating our potential in of of walk recorded headwind bit past. quarter for of gross discrete quarter, as margin go-to-market the XX% the We a you sales post impact $X more sunset Currently a sensitivity, networks represents year, have and was and actions moving of copper XX.X%, inventory the sales year’s price a structure through XX.X%, parts up in recycled decline applicable. value the in for profit help the basis prices million also and pricing been range thereafter will a Margins prior of I continue with in at ultrasonic matters, dissect Starting our increased from mix cost the and pound, some entire amortization averaging Gross today mechanical gross if margin in brass sell price will of remind the a margins this that software quarter year-over-year. cost, number $X.XX items, choice proxy seen around sales input more with recycled significantly. as I our radios you've a time as give brass in discrete and impact step these meters of point have offset a modest drivers this over I'm XXX to line acquisition up polymer strategic versus XX.X%, spend XX about that to the served These the the impact the the detail. from we could was $X margins, and moderating discussed. has the primarily you offer by networks

strategic done effects. operating copper. pricing price positive metrics like as capital price cost minor Safety commodity cost and able have and implemented our from in number the in during that proactively price The would we so with working It to that Quality the valued expectation other price evolving of benefit pricing perhaps side year, have that lagging more the resulted of that in increases, to headwind and the quarter, fourth actions offset and we some inflation lag net with and designed with to we a actively we SQDC, Cost, manageable largely input be to strategic for principally doing solutions from equation advance processes of are Delivery offer customers. manage metrics robust is we In have

In fourth months. The included were the quarter for s::can second two results topic is to impact acquisitions margins. and their

s::can approximately in million sales. annualized the recall the announcing may press You has $XX in transaction, release

modest So expected a assets, of We told up in in approximately recorded these XXXX loss the resulted all totaled short-stub $X.X and step the intangible two amortization fair months QX, for as which million typical period. value revenues. inventory acquired in

combination of the $XX accretive. acquired and look revenue As expect s::can with total be EPS XXXX, we million of we to approximately ATi to

remaining a normalized acquisitions quarter inventory The profitability term step for up ATi but first remarks. we longer quarters. will of quarter in discuss s::can, of amortization, include opportunities XXXX will these expect remaining in the his the full Ken plus the

discrete non-recurring Cellular of provision. part a the This relates that sunset devices offering. our sunset of the across of The of Radio original event the and to the technology to turning variety sun setting Network industries. a for is CDMA IoT the evolution carrier natural adopters of Finally, impacts array Cellular is an of early networks

company Radios firm care, setting for as carriers customer innovator in sun were applications on the As metering a Meter circumstances. not such recently, the protections by Cellular Until for provided plans and Badger water in focused place.

which The To in Now customers. technology first radio The future radio logical These CDMA LTE-M of first question is when have networks. no of Badger margins curve point. the an that continue provision, is, XXXX, continued network these in technologies the this moved at years was Will by firm, quarter multiple itself. reduced cover plans then cellular cellular networks radios? nearly been ongoing we supported its challenge XXX the follows: approximately to radio. and clear, have established XX by we service Meter gross taken no. innovation around generations that the cellular as these be appear The These had with demonstrated cellular short radio introduced be Subsequently in this be ahead will technologies. cellular ORION well answer of crystal already more early there to by in launch points upgrades basis for defect our

tax resulting a in of of XX.X%, pandemic The quarter by addition higher sales to the Turning than income impacted to ongoing both XX.X% costs from fourth intangible for broadly, travel, in as prior lower two in XX% trade slightly increased of year. to partially of XXXX was the personnel ATi SEA offset More lower expenses. $XX.X amortization. we Including expenses, rate. other the XX% s::can This spend expect SEA and percent million the the the year's includes including quarter the s::can million and were range. XXXX fourth average prior $X.X asset show provision months,

year's On sales Working addition with statutory code the capital in In was sales ATi, EPS declined of a XXXX as prior absent tax XXXX, as of $X.XX. working tax associated quarter of additions X% an the significant year-over-year. the XX%, about of points summary, change a we s::can rate XXX basis an basis, any fourth s::can. organic the $X.XX of of percent normalized in and that with U.S. percent a primary percent capital about our of increase expect from a new was don't EPS in of With changes.

XXX% prior and Our conversion approximately full million year was $XX.X XX% year’s of the earnings. flow million represents net cash higher free $XX.X than of

will flow Our not focus cash in XXXX. cash conversion and we anticipate XXX% abate to exceed flow free

expect continued robust Ken. we the In full change levels early two million a of of past cash However, the to January to I $XXX net ended conversion I'll on already we see would structural capital continue working the deployed positive sheet, ample taking We million into remaining with the account have year the capital flexibility approximately Along allocation our $XX acquisition. of years given the s::can priorities. the untapped $XX the access balance we cash in achieved. after at back caution do facility, With not net financial over the our for to ATi with credit call that, cash on position. million to turn executing acquired in

Ken Bockhorst

Bob. Thanks

monitoring I'd five, in value labs, systems the quality consumables, these other slide real sensors since in costs we just Inc. lower not our time Technology, call to weeks on bring highlight we customers. they like and capital or quality from our a ATi to pioneers capture S::can and reagents and acquired This the XXXX earnings both in few traditional solutions. how water for through that real are rely Badger acquired resulting Turning ago, solutions significant to differentiated and transactions do November operating is last data water of believe or Analytical two completed time because testing, portfolio. providing Meter

adds from monitoring Adding monitoring reporting. to AMI, – water moved quality to synergies Badger and time billing Badger infrastructure quality Meter's real water flow water collection scope as real multiple both temperature the measurement, for capabilities metering Meter. industrial improve these will avenues data or just efficiency actionable monitor evolve the lab customers growth Just believe water. and online sample by to time parameters and to acquisitions in to water bringing see discharge quality of two manual together sensing operating from utility pressure core advanced to We process utilities for as reads we for testing and

base industrial optical water growth For electrochemical of capture wastewater advance in data applications. ATi quality it standpoint, strong example, is this sell our via U.S. to and time water geographic water treatment installed ecosystem, offering and in a and coverage where a combination a will and the Cellular networks investment greater a ability s::can quality create term in and to has communications ORION® time distributors the From a leading U.K., product standpoint, From have these with sensor scale will our inside including order long from throughout real synergies. customer parameters relationships, countries. both We standpoint sales, full rep water cross sensors. realize leveraging we take utilities, XX There's to quantity, plus need no online, radios. question and to industry an

We The term, is the in approximately will combined the EPS for be network. In visualize the businesses. the to no $XX but providing our augment near store, acquired of to organized mid-teens are water Usual with BEACON to we information will undertaking, need results. integrate, EyeOnWater of million annual EBITDA accretive it As sales two Business view that acquired margins to This one holistic and analyze small and a is execute.

XXXX were all is obviously that Despite of we essential fully also the activities, our the turn the water. budgets, case. prepared uncertainty, not on we continued customers turning necessary metering with to and required water page includes the outlook to throughout to non-revenue on support and change we regarding which in in has calendar turning solutions much been significant tone hoping for XXXX. Now on the COVID-XX, billing spending while six, no safely that manage of customer would utility did in slide remain There as critical our reducing sector

with awards have As a extended customer or their priorities, base tenders with have and large we needs, deferrals. are our and utility, normal largely timelines as processes diverse limited circumstances water bid, stated, continuing will and whole, but different

While of in guidance, through impact impact of a the us walked items we cost, on that price few don't Bob detail SEA levels provide including will the the XXXX, expected and will some rates activity. quarterly XXXX. the throughout on significant circumstances are Obviously during so plan be in growth have normal uneven that more recent the XXXX, acquisition swings we top so

acquisition to and drive applications. a which to additional with organic product is includes cash on offerings, focus continue the water flow, driven in This markets will serving both grow We and business. fuel and related invest our software and growth

For of our helps engagement. example, drive app expanding functionality consumer that EyeOnWater software

gas including in Meter a health execution EBITDA water of Finally, inclusion of we quality. conservation will crisis, we reducing water remarks, economic the SaaS of have out growth, to delivered variety industry the utility the true growth to Meter team. advance be on questions. successful a ESG our the X%, the promoting please working on greenhouse our sales XXXX. backdrop I open Despite Badger emissions, the testament To accretive and focusing cash criticality of of It’s revenue revenue employee of team percent safety, strong close as the and acquisitions. capital expansion, and operator, water line priorities and the that exceptional robust now margin management a relentlessly unprecedented flow a and on of to prepared Badger continue fostering couldn't front, two for With course more of performance proud and culture

Operator

of open. [Operator Jones your our comes line first Stifel; Instructions] have line with you. from the question is Nathan We Thank

Nathan Jones

morning Good everyone.

Ken Bockhorst

Nathan. morning Good

Nathan Jones

I some cost on amortization just to network of want margin. fourth impacts go quarter back the price gross to

margins would I for networks going said so have think setting there price XX.X. you gross some the before all quarter, sun you to and points gross cost the what you you cost in in XXX Bob record of quarter. the is impact basis still fourth margin time There be amortization, did that had, the

in say quarter. did You net benefit a price for was there cost the

the impacted and the margin can gross inventory the short is a expectation in what bit really here fourth little term? more how that's So talk how working, quarter about you accounting the

Bob Wrocklage

exactly I’ll right. know speak different pieces, you about those but as you're generally Yeah,

basis would XXX provision, you point that network imply were the before of know low impact we XX% the range that sunset that. in With

recent You I know here initiatives. copper begun third about months. in started really volatile earnest the let's pricing quarter talked in largely actions. talk little really and were strategic getting started about the were a late pricing Those in before

So copper just commensurate of which supply be procure without the a in chain and coming as fourth September you how January, and us the result to the our impact price impact really in evidently components. see of increase, our copper really those and works that a impact changes late basically related the price in quarter be through quarter that seen in for seeing fourth price on we more how will started December based is

quarter, I think, between quarter now that we're again business I’ve heaven the we sunset margin piece we not part cost think pivot effectively and first quarter network be the the that of fourth and anticipate QX. the stairway low that; pacing in catching moving the and saw talked in sustainable provision cost does versus of large indicator historically about fourth XX% I point but have is our of a the QX, up. the forward say don't the meaning, I the range good at reversing that a pre dynamics in want to price is to

And was production regard but the would end right the impact of out and we most in comments Coming a benefit. the not plays the say sizeable impact. level and I that to the off modest you accounting. the then inventory referenced QX also a QX acquisition referenced real, peak also that's is at of that in pre-prepared that so you're exactly end through how

network or think seen with we've two dynamic trend year combined the bigger of mix sunset is really the provision terms time. favorable the cost I drivers in margin the over being that mixed on pre sort the of throughout of price dynamics, profile margins last

but of I know I hopefully through all question. that your answers meandered that, sort So,

Nathan Jones

conventions. just that’s a Yeah, the the cost matter you realizing of price think you're that before realizing accounting and the no additional I are

in guys business last years. get that did half can down You of Do lower the into kind play that out. of gross or some XX% to into we think briefly have of see upper the ’XX, of to the maintain is ’XX. might and range the last the spike you we think cost over back gross get that guys few half short said reasonable you as margins, time The The here; up more saw it price of XX% upper down of consistently copper XX% margins you kind lower range. been in have term XX% that in to half just that in half dynamics the

Bob Wrocklage

very we structural more business view evolving models that customers that find. Yeah Nathan, service and sure granular a change grow value we're as to while winning a more in to we're for that about things pleased mix couple positive more shift new and of in that spaces is pricing forward, our the will, those you software structural about. a for willing the is as to at still getting and pricing a years starting that you going providing are past over continue you talked to factor a and pay price more This dynamic really if we know make we're that really radios, to they're balance is know

a being more are about front in of think out getting little pre-active I We things. those

that be comfortable long about we we way we how that. in positive upper that of feel of, still So with with but we're Certainly the we're think range. to able we the like you're the price, aware think the going actions, to I that story challenged can things more with short, to half stay feel going mix market do

Nathan Jones

are as initiatives they're these pricing think That that company pretty and than working the makes better self-evident little sense bit historically. a here I

So it on. on pass that and I’ll congratulations

Ken Bockhorst

you. Yeah, thank

Operator

of Scattergood. Ryan from our question the Connors line have We coming and Boenning with next

open. line is Your

Ryan Connors

for morning. call. taking good Hey, Thanks my

Ken Bockhorst

Ryan! hi Sure,

Ryan Connors

picture. So big my of question is actually kind

and focus of and impact in and call infrastructure about federal a could to it spending, was presumably situation. your there since some tactically update Badger, talk areas. what strategically? you know administration related if we a Any and can on comment product You your I place last both expectations the it stimulus lines and are of new wondering your got how lot Obviously on

Ken Bockhorst

comes drag can to But be particularly particularly plays changes and drivers the where aging is, about think more it know given if see is in long stimulus about to for federal is you and wait that only the thing tends infrastructure, of I an we there the term out. itself aging and the and challenging utilities this money our now macro infrastructure available for mid-term, so before for all part think on, will in that that be workforce, it utilities, whenever work potential can sometimes and the the how water talked could and it government vague, be we most out. have Yeah, helpful

anyway, that positive. in growth drivers. We the have our the this we We to positive happening the do are be think offering, what with think for that confident ability grow the we're and long things that we market could are term but potentially

Ryan Connors

– Got and next lot volatility second in obviously a my it, okay, was market. question then the my of

up You know your that. caught stock's in been

like curious relates the in there's you're private with seen arbitrage or the you've valuations? public you private able by seems currency, volatility, that expectation a you great is have and reaction flow, I'm you it no on how acquisitive, more stocks there a How the active remain presumably down. because your the this stability to to it Sometimes M&A, flow of where today, through rhyme equities. the especially earnings that want you’ve or great increase company volatility of in some capitalize cash Have there. been got been there all have valuations especially in some got and valuations reason, you've seller in to impacted some to on beat quarter your side,

Ken Bockhorst

got to couple just fair, You know that multiples of that at. quality at the look if really assets did, deals would with we pleased you I'm very say I we the just

don't good. and and the valuations It’s stable in relatively see seller's think changes been expectations. we wild So I

Ryan Connors

you – the do your quality there. comments that just I I side, then appreciate and think water think Okay, lastly,

you – Is and that you the you exploring. got then is sort further there? or or you it think need do feel strategic I pretty like do to add of, you've to a grow there compelling via be footprint do you organically opportunities mean you more to more to think I for there'll be area M&A?

Ken Bockhorst

I've the you of focus tremendous know Meter hallmarks now a so of of now already as on about, right great two now that and They business great we've one execute our proud as we So ability usual them. been strong companies. doing is are our for is and acquired talked really that companies, it's to integration, Badger for

to this operating So going throughout going businesses synergy able BEACON and term at to synergies. we some investing the different and going want be that we're you, to are happen and need moving, overnight. they're The slow to them continue able the that time here. to have things the do we're keep opportunity organically to be the an things. and for we cycle and be averse exciting all to get risk we're rate, mid They already into I have to you going we to to that organic know but over strong and to industry doesn’t still impressive incorporate brands grow do is companies long and these caution think really to strategic grow because

Ryan Connors

your Great! morning. Well, thanks for this time

Ken Bockhorst

thank Yeah, you.

Operator

line next Richard with Eastman open. is from Baird; We comes of line have the our question your

Richard Eastman

Yeah, just questions. of a couple

but we from and the is then profit accounting – two of the to kind past acquisitions in here follow-up with again s::can let’s ATi, accretive the Meter's? Will and that those fourth here a GAAP quarter ATi. the on Badger margin in first quarter gross Just purchase here get now saw the

Bob Wrocklage

a and to the so gross average. margin I say the heavier line carry specific At are above line, ATi bit they s::can same time would Yes, SEA.

ones business, being have you blend. base kind But of so pieces, EBITDA. and again, of companies and operating speak two those are Think apples of I to, the we of mismatch profile of as ones because will. know operating two And little a talking you we you but overall think about mid-teens profit GAAP a can know EBITDA profit, good to bit talk you a those you oranges if them. as the

Richard Eastman

that from mismatch, the just here, say on So low when like you would GAAP EBIT two, a beyond, something EBIT and of be know second run know contribution normalized again, so you you kind GAAP like you is quarter teens know basis XX, XX. the

Ken Bockhorst

way. of you you in that purchase think accounting I now, would you when be lower could of aspects higher amortization, little that, a but think level than it of a think factor know the bit I it

Richard Eastman

base Okay, XX% And – Ken, I know get into there is bring – technologies overhead pull to some you here other maybe here into technology costs this, OP your then GAAP enough know would the base, XX%, does of percentage the and question that or you down install it to model. the that investment? think offset you just you of and kind the that maybe referenced synergies integrate be that can but

Ken Bockhorst

will. just so I Yes, items I Rick, the let's know you I think you think if line the way go through think about it is

think You term we what a aggregate XX% overall medium about fundamental whole get bundle term. business it about EBIT to SEA the investment talked script, in think change XX% long to mentioned there, it's R&D range, together, I you the the long putting don't when the level in and of Ken in of over terms of the in in know as we the think the inclusive

Richard Eastman

sales yep. then you utilize Okay, can their effort. the those know sales maybe up rate in Anything or you step their we I in installed two s::can go-to-market okay growth of force. in just that thought fair rate enough, – there And do are near jumpstart we here, ATi at mean bring synergies here the their any leveraging you Badger’s in, also growth we as maybe and do or base terms know term, know acquisitions?

Bob Wrocklage

Yeah, absolutely Rick.

us. about for for bringing about really you it the is know owned certainly think in great is together U.K., talked now and has s::can I'm I So channels companies water an best in their and we’ve the ATi what for about strong we've the U.S. growth talk that, about XX, world continued them market already in know they're been geographically, to but be when about a excited begun smart ATi very will opportunity you is you the when we've which and XX which these and days

water are strong the with U.K. they know with XX You a largest XX the brand of name. utilities in

with So have opportunities we there, as they U.S. I opportunities, their also very sensing small s::can think in are the

name some smart leverage an countries in of and small opportunities Badger I XX sales you, through they the will able based the base strengths. opportunities companies, there, and have of strong to needs, to on really we along individual of point installed are have and all from three optical s::can, to are different with brand point certainly going the leverage and that have along force Meter get also but brand in and at U.S. these know way pull going So sensor every their be synergy utilizing equity they to we their ATi metering plenty with

Bob Wrocklage

that's multi-year But journey? a

Ken Bockhorst

Yeah, that's yeah.

Richard Eastman

bit. would ATi growth seems franchises, know s::can Yeah, like the of you and start nice look could they years have technologies, but more grown they that’s you really and their and two rate a help tenure, like kick XX history again really fair. no digit around It's the little so at for technology those obviously you just companies think is I their know the you nice it strength and haven't and them seem double

Ken Bockhorst

we always Yep, risk you technology, think really is, the didn't channels we help the can sure, end just thing same innovative remember averse that a why They them, is broken for slow have are on about the that we we so there. yep, like you they have, certainly moving, industry. which know and of the and this, say record we know

Bob Wrocklage

those summary what is things. brand scalable all software gets channel is The short enablement and us

Richard Eastman

you we you and can comps industrial the to that out single have flow or full the year business be for some maybe do just, that business okay, know the demand I in mean we but year. questions. know is quick squeak I the One see, I that low signs mean growth you full recovery there? two envision just has mid-single the, for know any with you know digits And is it okay. digits that the of can it ‘XX have easy more comps, plan business, I in you

Ken Bockhorst

low think to to get portion challenge we start into us the that over. comps right, the that It's we first pretty in mid-single in can here get of but be year, to I still I'm for easier that then to digits. expect would going I some you're the be confident Yeah, a certainly

Richard Eastman

when then days of You you the business typical I how overall than you Badger, know first just you more feel exclusive selling have for in think for fourth. lastly the quarter January? know in got you ATi, the and through know about me, and the business Okay, seasonality, does s::can

mean I about digits, quarter You put that this January, reasonable will how or know just you up acquisitions. the seasonality of feel typical acquisitions aside? do a through you tone like weather is mid-single exclusive and first

Ken Bockhorst

Yeah, so it way. this let's take

orders. the sure customers to have – spent understand to converted this throughout the that and we've behaviors cycle talking things bid into would realize, time this in trying funnel have pandemic and could entire you activities very and been pleased spent I'm So what happen, we've of amount throughout we've that and been

here pipeline so we Backlog don't to have fourth sitting feel demand we know is the – with relatively the bid I wanted are have be good into we we're doing we don't now just it's So there, pent-up don't want I how because through type I to strong orders. things us future were still just healthy, on so still is I back, pent-up have generally don't spell say. we clear, model any say inside demand, would set is, would quarter that – holding a What with stable. you

Richard Eastman

okay. yeah, Yes, yeah,

again, know of you releases kind the of the and here kind quarter of of bid but wildcard. of those had kind some And business you as we're so it normalized out are solid third strengthening, the is fruition coming pipeline to that the maybe watching or or kind is was stronger, of tone where what still day-to-day carried that

Ken Bockhorst

stable. as generally pretty know it's customers three but move same things we we're right. issues have be, the maybe that seeing you work, to to We talked of still months ago. the – months difficult feel used It's still we it still did today three continue activity, stabilization forward. mean doing about I as all good good efficient the as ago, about market as not it's There’s

Bob Wrocklage

business. is talking I We're of We're differentiating in that general, stabilization, you project we viewing when there. kind not that and flow call about think aggregate. in And business stabilization normal between what about the it we’re talk that

Richard Eastman

for time. the well alright, thanks Okay,

Ken Bockhorst

Rick. thanks Yeah,

Operator

coming open. Management; have We is Instructions] Berenberg question of our line Andrew Capital with [Operator line the next from Buscaglia your

Andrew Buscaglia

Good morning guys.

Ken Bockhorst

Andrew. Hi

Andrew Buscaglia

of a M&A – once monitoring, to acquisitions next you want. in monitoring what to go it cash you technology full your you picture, to a, water as to and through recent up picked years bigger and is water than deeper foresee kind here in really couple the wanted but monitoring, I trying can't – do in adjacent five got like out of just beyond much a got your flow quality years holistic velocity M&A of or has smaller sounds portfolio? look water you kind now you like you wanted quarters, what Meter go know of these you digest I’m you what do the something and do like more Badger quality quality have see you or

Ken Bockhorst

M&A our so hasn't Yes, strategy changed.

You know quality continue exciting an know funnel quality to going of opportunities water you space. organically and to to assets quality the we'll grow continue look really water in there. keep to We're active two we've in acquired

I about, open side could as getting software together leverage; invest around we've continue pretty things one Certainly s::can to to was we're of to abilities global we to as ATi where component of with things as the bringing the well bringing global nature. and to control end excited a On and users. more in that and our organically about type been desire M&A continue monitoring grow think our more

go guess through we continue through we I So fish we're brought going know areas to you I continue you where that our to you we here, funnel that mean see to as have if we think know value, pond the in will.

Andrew Buscaglia

here, of using to will pause just be right. a a here M&A before there activity little bit your And in reiterate

Ken Bockhorst

take Well, that just so in two pieces. let's

net stop and from pause to available so there's not we're still business, today. no got position, in flow if a of need a full ourselves we're cash a were from clearly strategic from to financially pause. I really we we've revolver need mean strong view, no So cash another it great allocation acquiring pause capital access of would to a And there's point asset view. point whatsoever the

to continue look do We continue companies, things. we to at

So of would a we're comes be any a not asset integration right are sure way that in right companies, taking we're we if on doing available these it. thorough deliberate strategic saying the and very pause. now, making We're we that just quality

Andrew Buscaglia

what did believe…. Okay, a I say is and SaaS revenue percentage of your in as remarks you your Yeah. currently?

Ken Bockhorst

We finished X%. the at year

Bob Wrocklage

Of revenue. total

Ken Bockhorst

Yeah, total rev, yeah.

Andrew Buscaglia

with Okay, that guys monitoring, around water month any talking eyes headlines Is and there you any should quality around were regulations. administration, specifics you you little you with what you – more a know a our the excited on are know Biden know we two keep you're or ago? about anything than

Ken Bockhorst

I know has just you a been growing. trend Well, this so is that think

efficiently about hear solutions of more real able people talking and to and then You that and it about these access having water more types the being innovation can to more and time provide. information companies just quality do

certainly or types be these administration activities, but with or been like Biden come we administration, without whether how think of around Democrat the agenda see that it So it we'll or is trend whether they has know it's Biden seems already just the that's positive, could happens a focused but occurring, you positive so the out.

Andrew Buscaglia

you. Alright, thank

Operator

line Garza from our open. of with is line the coming have next your Jose We question Gabelli;

Jose Garza

Hey, good morning guys.

Ken Bockhorst

Hi Jose.

Bob Wrocklage

Good morning.

Jose Garza

should record, the for for it. just and gone [inaudible] have Hey,

Ken Bockhorst

did I why employees yes. the go our British for me, ask even three had pointer? Yes, one they of

Jose Garza

moving and where a more are journey now just guys you your maybe get quick on guys are to of that me some guys Yeah for are just well, there. things on I doing that question that, – you proactive wanted you you more just on, pricing bit of granular know a little as on initiatives. the you kind

Ken Bockhorst

hoping I kind you flow history price of and selling that old through. it's been think in the Yeah, the as think evolved become AMI radios you of a increase list solutions management has list you about more a But meters, price primarily price our as and days software and here, know to than and about more something. would more a of product with know and meters, realize as line passing complicated full and just service it's become

we've a the you years not shop floor. the strong operational the throughout business, on several So know the that's on thing excellence just focus had past over

true and just from that just value of to there's we can for service try but that balance our high provide level and can. the work, rather be much to process mechanics of price it customer up that processes, as a it. more to now more data again trying to analytics as to Meter view, value than willing using we So very Badger an in finding list all more pieces But to annual extract pay lot and and dynamic, of and customer a to for we're a making valued including That's living true the a about what's a they're win pricing, that of bump.

Jose Garza

journey the Makes kind sense today? be you would of you know on and where kind of

Ken Bockhorst

You feel in. about are I know but where we're journey, early, we've the the pretty really I on think that if I good just reflect early we had on success

really think so You more had early certainly I there's work some strong to know do. but we've results,

Jose Garza

the congrats Thanks results. excellent! guys and Okay, on

Ken Bockhorst

you. Thank

Operator

Nathan line follow-up the with Jones of a your question have is line We open. from coming Stifel;

Nathan Jones

morning Good again.

Ken Bockhorst

Hello!

Nathan Jones

get to our wanted code. a just clarification I about

XX% SEA to a whole XX% running for pretty said ever. times What's and the in the You’ve talking higher would XX% call much XX% couple range. company level? know SEA you on kind it here just be to at as you of you than this Can that getting are know about to talking of been we've clarify, you at that about

Ken Bockhorst

that two to up line, of rolling XX% consolidate amortization when of ’XX, XX%. driving you costs line that's to intangibles line the will versus through and above cost of you've roll the contributing what's pieces, some acquired average acquisitions the talking to anniversaring just XX% you that naturally activity terms then the together described I’m so and basically with if XX%, SEA Yes, tend to in related the I with – ‘XX say COVID consolidated plus of factor so we effectively. the two – they when what you the acquisitions, are got run exactly The I two at those in know think

Nathan Jones

Got it.

margin little but maybe an about the the amortization, to – are know given to going here. to businesses be So themselves of the enough going level? you can margin holding businesses acquisitions high it level. your EBITDA mix margins bit that margins talk level up, we to so diluted accretive are to gross acquisitions those are the just Are two margin operating at EBITDA that I these the gross know kind a on be operating

Ken Bockhorst

simple in be absolute a synergies is out are the be margins. margins EBITDA EPS our dollars of well, is a accretive. Obviously those believe acquired so the the one the do acquisitions math. let's drag to businesses different year EBITDA The of So answers as able story that and equation to be Again, know this gates you without question. a overtime, accretive of so naturally course to and course we’ll mid-teens, going it's in improve there we We that after EBITDA low XX’s. on just base two businesses past,

Nathan Jones

it. much got clarification. Thanks Okay, very for the

Operator

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

Karen Bauer

everyone Thank Great! joining for today. our you call

quarter scheduled call Have I'll XXXX questions April all day any to is a first our follow-up for purposes, you around take great have. XX. be tentatively might planning day! your For

Operator

This concludes call. today's conference

You may now disconnect.

Badger Meter (BMI) 29 Jan 212020 Q4 Earnings call transcript