Badger Meter Inc (BMI) 2023 Q1 法說會逐字稿

Ladies and gentlemen, welcome to the First Quarter 2023 Badger Meter Earnings Conference Call. (Operator Instructions) As a reminder, today's conference is being recorded.

女士們，先生們，歡迎來到 2023 年第一季度 Badger Meter 收益電話會議。 （操作員說明）提醒一下，今天的會議正在錄製中。

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

現在我很高興將會議轉交給投資者關係、企業戰略和財務主管 Karen Bauer 副總裁。請繼續，鮑爾女士。

Good morning, and thank you for joining the Badger Meter First Quarter 2023 Earnings Conference Call. On the call with me today are Ken Bockhorst, Chairman, President and Chief Executive Officer; and Bob Wrocklage , Chief Financial Officer.

早上好，感謝您參加 Badger Meter 2023 年第一季度收益電話會議。今天與我通電話的是董事長、總裁兼首席執行官 Ken Bockhorst；和首席財務官 Bob Wrocklage。

The earnings release and related slide presentation are available on our website. Quickly, I'll cover the safe harbor, reminding you that any forward-looking statements made during this call are subject to various risks and uncertainties, the most important of which are outlined in our press release and SEC filings. On today's call, we will refer to certain non-GAAP financial metrics. Our earnings slides provide a reconciliation of the GAAP to non-GAAP financial metrics used. With that, I'll turn the call over to Ken.

收益發布和相關幻燈片演示可在我們的網站上獲取。很快，我將涵蓋安全港，提醒您在本次電話會議期間做出的任何前瞻性陳述都受到各種風險和不確定性的影響，我們的新聞稿和 SEC 文件中概述了其中最重要的風險和不確定性。在今天的電話會議上，我們將參考某些非 GAAP 財務指標。我們的收益幻燈片提供了 GAAP 與所用非 GAAP 財務指標的對賬。有了這個，我會把電話轉給肯。

Thanks, Karen, and thank you for joining our first quarter earnings call. The Badger Meter team started off the year continuing the exceptional performance of 2022, delivering record revenue and profit while still achieving yet another positive book-to-bill ratio. Operating profit margin improved, benefiting from both gross profit margin expansion and continuing SEA expense leverage.

謝謝 Karen，也感謝您參加我們的第一季度財報電話會議。 Badger Meter 團隊在年初延續了 2022 年的卓越表現，實現了創紀錄的收入和利潤，同時仍實現了另一個正的訂單出貨比。受益於毛利率擴張和持續的 SEA 費用槓桿，營業利潤率有所改善。

Early in the quarter, we completed the Syrinix acquisition, adding pressure monitoring and acoustic leak detection capabilities to our broad smart water solutions. We're pleased with the integration progress and the early discussions we're having with customers about our expanded offerings, reinforcing our views on the complementary and scalable nature of the acquisition.

本季度初，我們完成了對 Syrinix 的收購，為我們廣泛的智能水解決方案增加了壓力監測和聲學洩漏檢測功能。我們對整合進展以及我們與客戶就我們擴展的產品進行的早期討論感到滿意，這加強了我們對收購的互補性和可擴展性的看法。

I'll provide an update on the macro environment and outlook later in the call. But for now, I'll turn the call over to Bob to go through the details of the quarter.

我將在稍後的通話中提供有關宏觀環境和前景的更新。但現在，我會把電話轉給鮑勃，讓他了解一下本季度的細節。

Thanks, Ken, and good morning, everyone. Turning to Slide 4. Our total sales in the first quarter were $159 million, an increase of 20% compared to the $132.4 million in the same period last year, representing an all-time record sales quarter for Badger Meter. Total utility water product line sales increased 20% year-over-year as we experienced continued strong order demand, sequentially improving supply chain dynamics and ongoing price realization.

謝謝，肯，大家早上好。轉到幻燈片 4。我們第一季度的總銷售額為 1.59 億美元，與去年同期的 1.324 億美元相比增長了 20%，創下了 Badger Meter 的歷史銷售記錄。由於我們經歷了持續強勁的訂單需求、相繼改善的供應鏈動態和持續的價格實現，公用事業用水產品線的總銷售額同比增長 20%。

Strong orders and shipments associated with utility cellular AMI adoption, including higher ORION cellular endpoint and BEACON Software-as-a-Service sales continued. Additionally, we saw increased sales of meters, including E-Series ultrasonic meters in residential and commercial applications. Finally, while the impact was relatively small, Syrinix sales were included for the full quarter. The strong demand environment resulted in another record utility water backlog exiting the quarter even with the record top line sales performance.

與公用事業蜂窩 AMI 採用相關的強勁訂單和出貨量，包括更高的 ORION 蜂窩端點和 BEACON 軟件即服務銷售繼續。此外，我們還看到了儀表銷量的增長，包括用於住宅和商業應用的 E 系列超聲波儀表。最後，雖然影響相對較小，但整個季度的 Syrinix 銷售額都包括在內。儘管銷售業績創歷史新高，但強勁的需求環境導致本季度公用事業用水積壓再次創下歷史新高。

Sales for the flow instrumentation product line increased an exceptional 22% year-over-year led by solid demand in water-related markets and improved component supply availability. Order trends were strong with our emphasis on water-related applications outperforming general industrial end markets.

流量儀表產品線的銷售額同比增長 22%，這得益於水相關市場的強勁需求和組件供應可用性的提高。由於我們對與水相關的應用的重視超過了一般工業終端市場，因此訂單趨勢強勁。

Turning to margins. We are very pleased with the operating margin expansion of 150 basis points in the quarter, with both gross margin expansion and continuing SEA spend leverage contributing to the improvement. Gross profit dollars increased $12 million year-over-year and as a percent of sales improved 120 basis points to 39.5% at the higher end of our normalized range. The combination of higher volumes, favorable mix, including higher SaaS revenues, value-based pricing and some leveling off of input cost inflation drove the improvement.

轉向利潤率。我們對本季度營業利潤率增長 150 個基點感到非常滿意，毛利率的增長和持續的 SEA 支出槓桿都為改善做出了貢獻。毛利潤同比增長 1200 萬美元，佔銷售額的百分比提高了 120 個基點，達到 39.5%，處於我們標準化範圍的較高端。更高的銷量、有利的組合，包括更高的 SaaS 收入、基於價值的定價和投入成本通脹的一些趨於平穩，共同推動了這一改善。

SEA expenses in the first quarter were $37.8 million, an increase of approximately $6 million year-over-year due primarily to personnel-related costs, including higher headcount, salaries, sales commissions and travel. The addition of Syrinix with its related intangible asset amortization also contributed to the increase. Despite the higher spend levels to support growth, SEA as a percent of sales declined 40 basis points, to 23.7% from 24.1% in the comparable prior year quarter.

第一季度的 SEA 支出為 3780 萬美元，同比增長約 600 萬美元，這主要是由於與人事相關的成本，包括增加的員工人數、工資、銷售佣金和差旅費。 Syrinix 的加入及其相關的無形資產攤銷也促成了這一增長。儘管支出水平較高以支持增長，但東南亞佔銷售額的百分比下降了 40 個基點，從去年同期的 24.1% 降至 23.7%。

Note that historically, the first quarter tends to be on the higher end for SEA leverage, and we would expect modestly improved sequential leverage in the remainder of the year. With higher interest rates, we are seeing some return on our cash balance as noted in the interest income line. To address the related topical question on the strength of our banking partners, we are not involved with any of the named troubled banks, we have no debt, and we've reviewed asset makeup and other data with our primary banking partners and do not anticipate any concerns.

請注意，從歷史上看，第一季度的 SEA 槓桿率往往處於較高端，我們預計今年剩餘時間的連續槓桿率會適度改善。隨著利率上升，我們看到我們的現金餘額有一些回報，如利息收入線所示。為了解決我們銀行合作夥伴實力的相關主題問題，我們沒有參與任何指定的陷入困境的銀行，我們沒有債務，我們已經與我們的主要銀行合作夥伴一起審查了資產構成和其他數據，並且預計不會任何疑慮。

The income tax provision in the first quarter of 2023 was 24.3% compared to 23.7% in the comparable prior year quarter. In summary, consolidated EPS was $0.66, a robust 35% improvement from $0.49 in the prior year comparable quarter. Working capital as a percent of sales was 23.1%, a 100-basis point increase from the record low 22.1% at calendar year-end, but still improved from 24.7% in the prior year comparable period. While working capital did increase to support growth, we continue to carefully manage customer payments and strategic inventory investments. Free cash flow of $13.7 million was improved from a year ago, primarily on higher earnings and reflects the typical seasonality with incentive compensation and retirement plan contributions earned in 2022 based on those strong results and then made in the first quarter.

2023 年第一季度的所得稅準備金為 24.3%，而去年同期為 23.7%。總之，綜合每股收益為 0.66 美元，比去年同期的 0.49 美元增長了 35%。營運資金佔銷售額的百分比為 23.1%，較日曆年底的歷史最低點 22.1% 增加了 100 個基點，但仍高於去年同期的 24.7%。雖然營運資金確實增加以支持增長，但我們繼續謹慎管理客戶付款和戰略庫存投資。自由現金流較上年同期有所改善，為 1370 萬美元，這主要是由於收益增加，並反映了典型的季節性，即根據這些強勁的業績在 2022 年賺取的激勵薪酬和退休計劃供款，然後在第一季度進行。

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

有了這個，我會把電話轉回給肯。

Thanks, Bob. Turning to our outlook. I remain excited about the opportunities ahead with continued robust order pacing, a strong bid funnel and record backlog, we remain confident that our exceptional customer support and winning portfolio of digital smart water solutions position us well for sustainable growth. To date, we've seen no evidence that the higher interest rate environment or the banking sector consternation are having an impact on customer budgets. In addition, with 85% of Meter volumes being replacement driven, an increasing level of replacement radio volumes and recurring software revenue, we expect very limited impact from any potential moderation and new residential or commercial construction markets.

謝謝，鮑勃。轉向我們的前景。我對持續強勁的訂單節奏、強勁的投標漏斗和創紀錄的積壓訂單感到興奮，我們仍然相信，我們卓越的客戶支持和成功的數字智能水務解決方案組合使我們能夠實現可持續增長。迄今為止，我們沒有看到任何證據表明更高的利率環境或銀行業的恐慌正在對客戶預算產生影響。此外，由於 85% 的 Meter 量由更換驅動，更換無線電量和經常性軟件收入水平不斷提高，我們預計任何潛在的節制和新住宅或商業建築市場的影響非常有限。

I'm also encouraged by the sequential improvement in supply chain dynamics. Coupled with moderation in the rate of input cost inflation, value-based pricing and continued SEA leverage, we continue to expect gradual operating margin improvement in 2023. Our cash on hand, overall strong free cash flow generation and debt-free balance sheet provide us with ample capacity to further invest in both organic and acquisition enabled growth.

我也對供應鏈動態的連續改善感到鼓舞。加上投入成本通脹率放緩、基於價值的定價和持續的 SEA 槓桿作用，我們繼續預計 2023 年營業利潤率將逐步改善。我們手頭的現金、整體強勁的自由現金流產生和無債務資產負債表為我們提供了有足夠的能力進一步投資於有機增長和收購增長。

Finally, we were proud to be named for the first time as one of Barron's 100 most sustainable companies. We have a long history of working to grow our business and our positive impact in the world by enabling our customers to do the same. This type of recognition demonstrates that it is possible to deliver both strong financial and sustainability performance.

最後，我們很自豪能夠首次被評為《巴倫周刊》最具可持續性的 100 家公司之一。我們長期以來一直致力於通過讓我們的客戶也這樣做來發展我們的業務和我們在世界上的積極影響。這種類型的認可表明，有可能實現強勁的財務和可持續發展績效。

In closing, I want to thank our team for their ongoing commitment and efforts in serving our customers.

最後，我要感謝我們的團隊在為客戶服務方面的持續承諾和努力。

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

有了這個，接線員，請打開問題線路。

(Operator Instructions) The first question comes from the line of Nathan Jones of Stifel.

（操作員說明）第一個問題來自 Stifel 的 Nathan Jones。

Just as -- just going to start with a question around supply chain. Some pretty positive commentary, I think, in your prepared remarks and in the press release this morning. Can you just talk about where supply chain is now compared to, say, where it was last year, where it was in 2019 before COVID? is it still a problem with throughput? Or are you kind of back to normal capacity utilization today?

正如 - 只是從供應鏈的問題開始。我認為，在你準備好的發言和今天早上的新聞稿中，有一些非常積極的評論。你能談談現在的供應鏈與去年的情況相比，比方說 2019 年 COVID 之前的情況嗎？它仍然是吞吐量的問題嗎？還是您今天恢復了正常的產能利用率？

Yes. So as we've talked throughout this entire challenging time with supply chain, we're still not back to pre-COVID supply chain reliability, but we're certainly in the best position that we've been ever since COVID. So 2021 was extremely difficult. 2022 remained extremely difficult and started to improve a bit at the end of the year. And certainly, Q1 is the best that we've seen.

是的。因此，當我們在整個供應鏈充滿挑戰的時期與我們交談時，我們仍然沒有回到 COVID 之前供應鏈的可靠性，但我們肯定處於自 COVID 以來的最佳狀態。所以2021年異常艱難。 2022 年仍然非常困難，並在年底開始有所改善。當然，Q1 是我們見過的最好的。

Now that doesn't mean that we still didn't have some challenges that limited some output. But overall, the way that we've thought that it was going to play out is the way that we're seeing it. We do still think there'll be some intermittent challenges in the first half of the year, but again, still improving. And then we think toward the back half of the year, it will be perhaps -- I could predict, but perhaps back to pre-COVID levels.

現在這並不意味著我們仍然沒有一些限制某些輸出的挑戰。但總的來說，我們認為它會發揮作用的方式就是我們看到它的方式。我們仍然認為今年上半年會出現一些間歇性的挑戰，但同樣仍在改善。然後我們考慮到今年下半年，也許——我可以預測，但也許會回到 COVID 之前的水平。

Fingers crossed, right? So are you on metrics like on-time delivery and past due backlog still a little bit below where you would have been in 2019 and it sounds like maybe hoping to be back to that level by the end of '23.

祈禱吧？您的準時交付和逾期積壓等指標是否仍略低於 2019 年的水平，聽起來可能希望在 23 年底之前恢復到該水平。

Yes. So we have a very high bar in expectations for on-time delivery and past due backlog. And admittedly, yes, they are -- on-time delivery is lower than we expect of ourselves, and past due backlog is higher. But I definitely think as we start to see supply chain improve which then also leads to some better efficiency and throughput that we'll be making progress in those areas coming forward.

是的。因此，我們對準時交貨和逾期積壓的期望值非常高。不可否認，是的，他們是——準時交貨低於我們對自己的預期，逾期積壓的情況更多。但我絕對認為，隨著我們開始看到供應鏈的改善，這也會帶來更高的效率和吞吐量，我們將在這些領域取得進展。

Let's say, hypothetically, that the supply chains are back to normal by the end of 2023. Is there a meaningful amount of backlog for you to work down? Or is the record backlog more a result of, obviously, very strong orders, if it's still going up as supply chains are improving. Just trying to get a sense of how much of that kind of backlog should get worked down or whether that's -- I guess, something that's going to stay consistently high.

假設，供應鏈到 2023 年底恢復正常。是否有大量積壓工作需要您處理？或者，如果隨著供應鏈的改善它仍在上升，那麼創紀錄的積壓更多是因為訂單非常強勁。只是想了解應該減少多少這種積壓，或者這是否——我想，這將一直保持高位。

Yes. So as with many things, it's a multivariable situation. So the backlog is perhaps inflated a bit because demand has been so hot and supply chain has caused some things to be later in backlog. There's the very positive side of it, as we've talked for years now about growing technology adoption. So now we're selling a larger portion of radios with meters. So just by pure definition, the backlog is going to be higher than it used to be because the average sell price of the bundle.

是的。因此，與許多事情一樣，這是一個多變量的情況。因此，積壓可能會有點膨脹，因為需求如此火爆，供應鏈導致一些事情被推遲到積壓中。它有非常積極的一面，因為我們多年來一直在談論不斷增長的技術採用。所以現在我們銷售的大部分帶儀表的收音機。因此，根據純粹的定義，積壓將比以前更高，因為捆綁包的平均售價。

So I think we're going to continue into the future at an elevated rate versus pre-COVID, but it's still certainly elevated beyond where I think it will normalize after we get through the supply chain operational challenges.

因此，我認為與 COVID 之前相比，我們將繼續以更高的速度進入未來，但它肯定會高於我認為在我們度過供應鏈運營挑戰後正常化的水平。

The next question comes from Ryan Connors of Northcoast Research.

下一個問題來自 Northcoast Research 的 Ryan Connors。

Congrats to the team on another great number. So my first question was just on price versus volume. I apologize if I missed it, but I didn't hear any kind of breakdown there. Are you able to provide any breakdown on top line in that regard?

祝賀球隊取得了又一個偉大的成績。所以我的第一個問題只是關於價格與數量的關係。如果我錯過了，我深表歉意，但我沒有聽到任何故障。在這方面，您能否提供頂線的任何細分？

Yes. So we haven't quite disclosed that, but it is certainly much more volume driven than it is price.

是的。所以我們還沒有完全透露這一點，但它肯定比價格更受數量驅動。

Okay. Okay. And then my other question was, as I mentioned, you've had great numbers here. You've been, I think, kind of outperforming your peers really for the last year plus. Is it your view that anything that's going on here that you're actually taking share? And what would be your comment on that? Or do you just believe that you're participating in some more systemic factors in the market that's lifting all boats? And just trying to break down the relative contributions there because certainly, you've made some good bets on technology with cellular and otherwise.

好的。好的。然後我的另一個問題是，正如我提到的，你們這裡有很多人。我認為，在過去一年多的時間裡，你的表現確實優於同齡人。您認為這裡發生的任何事情您實際上都在分享嗎？你對此有何評論？或者你只是相信你正在參與市場中一些正在提升所有船隻的系統性因素？並且只是試圖打破那裡的相對貢獻，因為當然，你已經在蜂窩技術和其他技術上做出了一些很好的賭注。

Yes. So we generally maintain the Midwest humble approach and usually shy away from making claims about taking share. But I think if you look at our competitors, we clearly have performed and delivered, I think, significantly more than most of them throughout this period and also carry an elevated backlog. So when you look at some of the areas where we've seen the outsized growth, I think being first in Ultrasonic has been extremely beneficial for us. Being on the lead and changing, if you will, the way the AMI market views the value within it, our cellular approach, certainly, I believe, is taking share on the AMI side.

是的。因此，我們通常保持中西部謙虛的態度，並且通常會迴避聲稱分享份額。但我認為，如果你看看我們的競爭對手，我認為，在這段時間裡，我們的表現和交付顯然比他們中的大多數要多得多，而且積壓也很高。因此，當您查看我們已經看到超額增長的一些領域時，我認為在超聲波領域處於領先地位對我們來說非常有利。作為領先者，如果你願意的話，改變 AMI 市場看待其中價值的方式，我相信，我們的蜂窩方法當然正在 AMI 方面佔據份額。

Couple that with our best-in-class software package that comes with that and the continued over the last several years, 45% CAGR on software. I do believe that, yes, I can -- I will confidently tell you we are taking share in the AMI space.

將其與我們隨附的一流軟件包相結合，並在過去幾年中繼續保持軟件的複合年增長率 45%。我確實相信，是的，我可以——我會自信地告訴你我們正在分享 AMI 領域的份額。

Yes, it seems to be. And then my last question was just on sort of the visibility. I know you don't have perfect visibility on what kind of funding is driving every order. But is it your sense that this -- a lot of the strength we're seeing today is actually some of the federal money finally flowing through? Or is this kind of organic local municipal funding coming through? I mean any comments about the relative contribution of where the funding is coming from that's driving the strength?

是的，似乎是。然後我的最後一個問題只是關於可見性。我知道您無法完全了解推動每筆訂單的資金類型。但你是否覺得——我們今天看到的很多力量實際上是一些聯邦資金最終流出？還是這種有機的地方市政資金正在通過？我的意思是，關於推動實力的資金來源的相對貢獻有什麼評論嗎？

Yes. Yes. Thanks for asking that. Yes, we've been pretty consistent throughout this entire period that with the fundamentals, the macroeconomic drivers that we have around AMI, whether it's now water quality with the acquisitions that we did there, that we didn't need infrastructure money to grow. And I will tell you that through these couple of years since that bill is passed, we've seen little to no uplift from the infrastructure bill.

是的。是的。謝謝你這麼問。是的，在整個時期，我們一直非常一致地認為，我們在 AMI 周圍擁有的基本面、宏觀經濟驅動因素，無論是現在的水質還是我們在那裡進行的收購，我們都不需要基礎設施資金來增長。我會告訴你，自該法案通過以來的這幾年裡，我們幾乎看不到基礎設施法案帶來的任何提升。

Got it. Okay.

知道了。好的。

So it's all organically driven to the utilities. No, go ahead.

所以這一切都有機地驅動到公用事業。沒有，繼續。

Just a quick housekeeping for Bobby. In the flow instrumentation, you mentioned these water-related markets. Can you just be specific just call out a few of what those are? I'm curious what exactly you're referring to there?

只是為 Bobby 做一個簡單的家務。在流量儀表中，您提到了這些與水有關的市場。你能具體說出其中的一些嗎？我很好奇你到底指的是什麼？

Yes. So following the strategy over the last few years now that we've pivoted away from some more of the general industrial markets and focused on water, wastewater, building sustainability, HVAC. And so when we talk about water-related markets, that's where our focus is and in the quarter, we saw above-line average growth in those lines of -- in those market focuses versus, say, the more general industrial, which were still up year-over-year, but just to a lesser extent. So really, we're talking about building sustainability, water, wastewater.

是的。因此，按照過去幾年的戰略，我們已經從更多的一般工業市場轉向專注於水、廢水、建築可持續性、暖通空調。因此，當我們談論與水相關的市場時，這就是我們關注的重點，在本季度，我們看到這些領域的平均增長高於平均水平——在這些市場重點領域，比方說，更一般的工業領域，它們仍然是同比增長，但幅度較小。所以實際上，我們正在談論建築可持續性、水、廢水。

Yes. And if I could remind you that even in those other markets, we're still generally doing water-related activities. It's just the markets that we talk about when we call those out are the ones that are specifically water-related markets.

是的。如果我能提醒您，即使在其他市場，我們通常仍在開展與水相關的活動。當我們把這些市場叫出來時，我們談論的只是那些與水相關的市場。

The next question comes from Rob Mason at Baird.

下一個問題來自 Baird 的 Rob Mason。

Yes. The first quarter revenue -- your first quarter revenue was a pretty good size step-up -- high single-digit step-up versus the second half, and you already identified supply chain getting better, that's probably a contributor. But you had previously spoken about some capacity expansions that would be ongoing. Are we starting to see the benefits from those? Is that flowing through? Or is that -- those projects still kind of in progress?

是的。第一季度的收入——你的第一季度收入是一個相當不錯的增長——與下半年相比高個位數增長，而且你已經確定供應鏈正在變得更好，這可能是一個貢獻者。但是您之前曾談到過一些正在進行的產能擴張。我們是否開始看到這些好處？那是流過嗎？或者是——那些項目仍在進行中？

Yes. So we would -- obviously, we did signal the capacity investment over the course of the last 2022. I -- we would say that basically, the revenue growth you saw in the first quarter was sans any benefit from those investments that are very early stage. So while the CapEx is elevated in the quarter, and there is some of that that's oriented toward capacity expansion, it's not bearing fruits in what you're seeing in the first quarter.

是的。所以我們——顯然，我們確實在過去的 2022 年發出了產能投資的信號。我——我們會說，基本上，你在第一季度看到的收入增長沒有從那些非常早的投資中受益階段。因此，儘管本季度的資本支出有所增加，並且其中一些是針對產能擴張的，但它並沒有像您在第一季度看到的那樣取得成果。

How did -- maybe your historical pricing actions, how did those contribute to the first quarter maybe versus the fourth quarter? And maybe what I'm trying to understand is how those actions that you've taken in '22 are perhaps resident in the backlog, if that question is clear to you.

如何 - 也許你的歷史定價行為，這些對第一季度的貢獻可能與第四季度相比如何？也許我想了解的是，如果您清楚這個問題，那麼您在 22 年採取的那些行動可能如何駐留在積壓工作中。

Yes. Well, let me take a shot at it, Rob, and then I think Bob will clean up anything that maybe I don't hit. But I think if you think about our pricing model, what we started in 2020 when we went to a more value-based pricing model, it's something that we do on an ongoing basis. It's much more dynamic with the growth of AMI and some of the project-based nature of the backlog. We transitioned away from what used to be the annual list price increase and you'd see that come through in the beginning. So I think it's -- in my view, Q1 versus Q4, there's not that huge much of a price step-up change. But I don't know, Bob, you...

是的。好吧，讓我試一試，Rob，然後我想 Bob 會清理掉我沒打中的任何東西。但我認為，如果你考慮一下我們的定價模型，我們在 2020 年開始採用更基於價值的定價模型，這是我們持續進行的事情。隨著 AMI 的增長和積壓的一些基於項目的性質，它變得更加動態。我們改變了過去的年度標價上漲方式，您會在一開始就看到這種情況。所以我認為——在我看來，第一季度與第四季度相比，價格上漲變化不大。但我不知道，鮑勃，你...

Yes. I mean untangling price for us becomes a bit challenging because when we talk about price impact, it's not only the traditional list price increase that you're referring to, Rob, but also, certainly, the average sell price evolution combined with this value-based pricing initiative Ken described. So there is an impact of price in the quarter that's a benefit to us. As Ryan had asked, we typically don't parse that out percentage-wise or attributing a portion of dollars to each element, what we would say, as Ken mentioned earlier, is the largest share of the increase in dollars and in percentage is unit volume driven. And while there is a price benefit, certainly, it's the minority of the year-over-year growth.

是的。我的意思是理清價格對我們來說變得有點挑戰，因為當我們談論價格影響時，它不僅是你指的傳統標價上漲，羅布，而且，當然，平均售價演變與這個價值相結合 -基於 Ken 描述的定價倡議。因此，本季度的價格影響對我們有利。正如 Ryan 所問的那樣，我們通常不會按百分比進行解析，也不會將美元的一部分分配給每個元素，正如 Ken 之前提到的，我們會說的是美元增長的最大份額，百分比是單位音量驅動。當然，雖然有價格優勢，但這只是同比增長的一小部分。

If you look at your backlog as it stands today, is there a way to assess how mix should impact you this year? Would it be more favorable, less favorable, the same versus '22?

如果您查看今天的積壓工作，是否有辦法評估今年的組合對您的影響？與'22'相比，它會更有利，更不利嗎？

Yes. So when we talk about our confidence in our margin resiliency, again, that always starts with the positive structural mix change that we have, which continues to be ongoing we clearly keep a good view on the health of our backlog, and that's where in our commentary or the press release when we talk about, we're very confident in our ability to be margin resilient through any period. We do that through, obviously, having a lot of excitement around our product line and at the same time, analytics that we have in the backlog.

是的。因此，當我們再次談到我們對保證金彈性的信心時，總是從我們擁有的積極的結構組合變化開始，這種變化將繼續進行，我們顯然對積壓的健康狀況保持良好的看法，這就是我們的位置當我們談論評論或新聞稿時，我們對我們在任何時期保持利潤率彈性的能力非常有信心。顯然，我們通過對我們的產品線充滿興奮，同時對積壓工作進行分析來做到這一點。

Yes. I think if you're specifically trying to drive toward growth -- give you if you're specifically trying to drive towards gross margin, I guess I would just reinforce our universal messaging of a normalized range of 38% to 40%. Certainly, we continue to believe in the ability to leverage SEA as revenues grow. And so op margin and EBITDA margin expansion is going to come through those 2. I think the oversized impact in 2023 will be from more from SEA leverage than it will be from gross margin contribution.

是的。我認為，如果你特別想推動增長——如果你特別想推動毛利率，我想我會加強我們關於 38% 到 40% 的標準化範圍的普遍信息。當然，隨著收入的增長，我們繼續相信利用 SEA 的能力。因此，運營利潤率和 EBITDA 利潤率的擴張將通過這兩個因素實現。我認為 2023 年的超大影響將更多地來自 SEA 槓桿，而不是毛利率貢獻。

Understood. Very helpful. Maybe just one last question quickly. Ken, you noted Syrinix, I know it's early under your ownership. But I'm just curious if you have any initial impressions around how you think that product will slot into your channel maybe comparatively versus other products that you've added to the portfolio inorganically and need to work into the sales channel, just how we should think about uptake there?

明白了。很有幫助。也許只是最後一個問題很快。 Ken，你提到了 Syrinix，我知道它很早就歸你所有了。但我很好奇，您是否對您認為該產品如何進入您的渠道有任何初步印象，可能與您已經無機地添加到產品組合中並需要進入銷售渠道的其他產品相比，我們應該如何考慮那裡的吸收？

Yes. So keeping in mind that it's starting from a very small base, but we've had extremely positive reaction from our channel partners. So many of our long-standing great utility distributors have been really positive about feeling like they know how to sell this immediately to customers that we already have. So that that's not usually the case within the water industry. But with Syrinix, it's a lot closer to the center of what we're doing and how we talk about AMI and real-time information within the market.

是的。所以請記住，它是從一個非常小的基礎開始的，但是我們的渠道合作夥伴做出了非常積極的反應。我們許多長期優秀的公用事業分銷商都非常積極地感覺他們知道如何立即將其銷售給我們已有的客戶。因此，在水行業中通常不會出現這種情況。但是對於 Syrinix，它更接近我們正在做的事情的中心，以及我們如何在市場上談論 AMI 和實時信息。

But do keep in mind, it is small, but there's a lot of excitement around it. And as we've talked about before, small deals for us are certainly not viewed as a bad thing because it takes a while sometimes to get the leverage. But when we do, it's very good. The other thing that we're really excited about with Syrinix is now if you take our BEACON software platform, which was built on AMI. And now since we acquired s::can and ATi, now we can leverage in the water quality information. And now with the fully developed radar software that Syrinix that we acquired there we're now giving utilities the opportunity to monitor all 3 of those in one software platform, which is something that our customers are finding very valuable.

但請記住，它很小，但周圍有很多令人興奮的地方。正如我們之前所說，對我們來說，小額交易當然不會被視為壞事，因為有時需要一段時間才能獲得影響力。但是當我們這樣做時，它非常好。我們對 Syrinix 感到非常興奮的另一件事是，如果您現在使用我們基於 AMI 構建的 BEACON 軟件平台。現在，由於我們收購了 s::can 和 ATi，現在我們可以利用水質信息。現在，借助我們在那裡收購的 Syrinix 開發的完全雷達軟件，我們現在讓公用事業公司有機會在一個軟件平台上監控所有 3 個雷達，我們的客戶認為這是非常有價值的。

And the next question comes from Tate Sullivan of Maxim Group.

下一個問題來自 Maxim Group 的 Tate Sullivan。

Ken, sticking with the demand from utility customers in the U.S. for real-time water quality monitoring, is it a constant sales process? Or is it most of the time that you're selling when meters are up for replacement for utilities, please?

Ken，堅持美國公用事業客戶對實時水質監測的需求，這是一個持續的銷售過程嗎？還是大多數時候您是在更換公用事業的電錶時銷售的？

No. It's a constant selling process. Similar with other budgeting concerns and things that utilities tend to budget out into the future. So the water quality sales team is out there selling independently. The water quality sales team is selling jointly with the utility business. So it's an ongoing thing.

不，這是一個持續的銷售過程。與其他預算問題和公用事業公司傾向於為未來預算的事情類似。所以水質銷售團隊在那裡獨立銷售。水質銷售團隊與公用事業部門聯合銷售。所以這是一個持續的事情。

And then are your customers -- I mean, just are they still worried about water quality in their systems meaningfully? I mean, it's been since 2014 with the plan. I mean, can you just comment on what you're hearing from customers? And do they want your -- do they -- are they still worried about water quality in their infrastructure?

然後是您的客戶——我的意思是，他們是否仍然有意義地擔心系統中的水質？我的意思是，從 2014 年開始就有這個計劃。我的意思是，你能評論一下你從客戶那裡聽到的信息嗎？他們是否希望您的 - 他們 - 他們是否仍然擔心其基礎設施中的水質？

Yes. I think if you just turn on the news and look online on any news. I guess people don't open newspapers that much anymore. But the news just continues to grow on people being concerned about what's in their water. And that's why we were so excited about s::can and ATi because of the high-tech nature and the ability to provide that water quality real-time on-demand information.

是的。我想如果你只是打開新聞並在線查看任何新聞。我猜人們不再那麼頻繁地打開報紙了。但是關於人們關心水中的東西的消息不斷增加。這就是我們對 s::can 和 ATi 如此興奮的原因，因為它們具有高科技性質並且能夠提供水質實時按需信息。

So certainly, people are interested in it in that interest, we view as growing, which is why we really want to get into that space.

所以當然，人們對這種興趣感興趣，我們認為這種興趣在增長，這就是為什麼我們真的想進入這個領域。

And then I think you mentioned in your prepared remarks more radio replacement meter levels. when were your first Ultrasonic meters in the field? And when is the replacement cycle going to start for those Ultrasonic meters, please?

然後我想你在準備好的評論中提到了更多的無線電更換儀表級別。您在現場使用的第一台超聲波流量計是什麼時候？請問那些超聲波儀表的更換週期什麼時候開始？

Yes. So I think the point that I was making was on radios, but I'll answer your meter question first. So meters, whether they be mechanical or Ultrasonic, that's in that meters are about 85% annual replacement volume. What I was speaking to on the radio replacement volume is that now if you think about the dry by radios, they've been in the market 25 to 30 years. AMI radios have been out there now roughly 10 years. And as more and more radios get deployed, you're going to see the same over time, right?

是的。所以我想我的意思是關於收音機，但我會先回答你的儀表問題。因此，無論是機械式還是超聲波式儀表，年更換量約為 85%。我在收音機更換卷中所說的是，現在如果你想想收音機的干貨，它們已經在市場上銷售了 25 到 30 年。 AMI 收音機已經問世大約 10 年了。隨著越來越多的無線電被部署，隨著時間的推移你會看到同樣的情況，對吧？

It takes a long time because these are long-cycle products in the field. But radio replacement volume is going to be the same exciting 85% once you get the full saturation in the market. So every year, we see a higher level of replacement volume in radios just because that's the nature of the business.

需要很長時間，因為這些都是該領域的長周期產品。但是，一旦市場完全飽和，收音機更換量將同樣令人興奮地達到 85%。因此，每年我們都會看到收音機的更換量更高，因為這是業務的本質。

There are currently no additional questions registered at this time. So I will pass the conference back over to Ms. Bauer for closing remarks.

目前沒有其他問題登記在這個時候。因此，我將把會議交還給鮑爾女士作閉幕詞。

Great. Thank you, operator, and thank you all for joining our call today. For your planning purposes, our second quarter 2023 call is tentatively scheduled for July 20. I'll be around all day to take any follow-up questions you might have. Have a great day. Thanks.

偉大的。謝謝接線員，也感謝大家今天加入我們的電話會議。出於您的計劃目的，我們的 2023 年第二季度電話會議暫定於 7 月 20 日舉行。我會整天待命，回答您可能提出的任何後續問題。祝你有美好的一天。謝謝。

And with that, we will conclude today's call. Thank you for participating. You may now disconnect your lines.

至此，我們將結束今天的電話會議。感謝您的參與。您現在可以斷開線路。