Badger Meter Inc (BMI) 2024 Q2 法說會逐字稿

Ladies and gentlemen, welcome to the second quarter 2024 Badger Meter earnings conference call.

女士們、先生們，歡迎參加 Badger Meter 2024 年第二季財報電話會議。

After the prepared remarks, there will be an opportunity to ask questions.

準備好發言後，將有機會提問。

(Operator Instructions) As a reminder, today's conference is being recorded.

（操作員指示）提醒一下，今天的會議正在錄製中。

It's now my pleasure to turn the conference over to Karen Bauer, Vice President of Investor Relation, Corporate Strategy and Treasurer.

現在我很高興將會議交給投資者關係、企業策略和財務主管 Karen Bauer 副總裁主持。

Please go ahead.

請繼續。

Good morning and thank you for joining the Badger Meter second quarter 2024 earnings conference call.

早安，感謝您參加 Badger Meter 2024 年第二季財報電話會議。

On the call with me today are Ken Bockhorst, Chairman, President and Chief Executive Officer, and Bob Wrocklage, Chief Financial Officer.

今天與我通話的有董事長、總裁兼執行長 Ken Bockhorst 和財務長 Bob Wrocklage。

The earnings release and related slide presentation are available on our website.

收益發布和相關幻燈片演示可在我們的網站上取得。

Quickly, I will 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.

很快，我將介紹安全港，提醒您，本次電話會議期間所做的任何前瞻性陳述都受到各種風險和不確定性的影響，其中最重要的風險和不確定性已在我們的新聞稿和SEC 文件中概述。

On today's call, we will refer to certain non-GAAP financial metrics.

在今天的電話會議上，我們將提及某些非公認會計準則財務指標。

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

我們的收益投影片提供了所使用的 GAAP 與非 GAAP 財務指標的調整表。

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

這樣，我就把電話轉給肯。

Thanks, Karen.

謝謝，凱倫。

We appreciate all of you joining us for our second quarter earnings call.

我們感謝大家參加我們的第二季財報電話會議。

I'm pleased to report that we surpassed the $200 million quarterly revenue milestone this quarter, delivering total sales of $217 million, representing 23% year-over-year growth.

我很高興地向大家報告，本季我們突破了 2 億美元的季度營收里程碑，總銷售額達到 2.17 億美元，年增 23%。

This result was modestly higher than we anticipated, driven by ongoing market demand and incremental backlog conversion in support of our customers.

在持續的市場需求和支援客戶的增量積壓轉換的推動下，這一結果略高於我們的預期。

We reported record operating margins and EPS in the quarter, along with strong year-over-year cash flow growth.

我們報告了本季創紀錄的營業利潤率和每股收益，以及強勁的同比現金流增長。

In summary, at the halfway point of the year, we remain pleased with the trajectory of our business results.

總之，今年過半時，我們對我們的業務業績軌跡仍然感到滿意。

I'll hand the call over to Bob to go through the details of the quarter, and I'll come back to talk about BlueEdge, our recently released sustainability report and the outlook for the back half of the year.

我會將電話轉交給鮑勃，詳細了解本季度的詳細情況，然後我會回來討論 BlueEdge、我們最近發布的可持續發展報告以及下半年的展望。

Go ahead, Bob.

繼續吧，鮑伯。

Thanks, Ken, and good morning, everyone.

謝謝，肯，大家早安。

Turning to slide 4, as Ken noted, our total sales in the second quarter exceeded the $200 million mark for the first time and at $217 million, represented an increase of 23% compared to $176 million in the same period last year.

轉向幻燈片 4，正如 Ken 指出的那樣，我們第二季度的總銷售額首次突破 2 億美元大關，達到 2.17 億美元，比去年同期的 1.76 億美元增長了 23%。

Total utility water product line sales increased 26% year over year, moderating a bit from 29% growth last quarter.

公用供水產品線總銷售額年增 26%，較上季 29% 的增幅略有放緩。

Demand for our innovative suite of utility smart water solutions continued to benefit from underlying secular growth drivers, and we were able to make additional headway into our backlog and supportive customers.

對我們創新的公用事業智慧水務解決方案套件的需求繼續受益於潛在的長期成長動力，我們能夠在積壓訂單和支援客戶方面取得更多進展。

Most notably, we delivered on strong cellular AMI demand, including higher sale of meters, both mechanical and E-series ultrasonic, ORION Cellular endpoints and related BEACON software-as-a-service revenue.

最值得注意的是，我們滿足了強勁的蜂窩 AMI 需求，包括儀表、機械和 E 系列超音波、ORION 蜂窩端點以及相關 BEACON 軟體即服務收入的增加。

Sales for the flow instrumentation product line increased 5% with solid order trends globally within our focused water-related markets such as wastewater.

流量儀表產品線的銷售額成長了 5%，在我們重點關注的水相關市場（例如廢水）中，全球訂單趨勢穩定。

As we noted in the press release, and as we've consistently communicated, we anticipate the rate of sales growth to normalize into the high single digit range in the back half of the year and over the cycle with typical unevenness in that outcome from any particular quarter or year.

正如我們在新聞稿中指出的那樣，並且正如我們一直以來所傳達的那樣，我們預計銷售成長率將在今年下半年和整個週期內正常化到較高的個位數範圍，而任何情況下的結果都會出現典型的不均勻性。

We have a strong opportunity pipeline, bid funnel and order book.

我們擁有強大的機會管道、投標管道和訂單簿。

But for the back half of 2024, we do anticipate the level of backlog conversion which benefited the second quarter.

但對於 2024 年下半年，我們確實預期積壓訂單轉換水準將令第二季受益。

We'll not -- we do not anticipate the level of backlog conversion which benefited specifically the second quarter, which will obviously then influence sequential trend lines moving forward.

我們不會——我們預計不會有特別有利於第二季度的積壓訂單轉換水平，這顯然會影響接下來的連續趨勢線。

Turning to margins, we were very pleased with the operating margin expansion of 240 basis points in the quarter, reaching a record high of 19.2% for the second quarter.

談到利潤率，我們對本季營業利潤率擴大 240 個基點感到非常滿意，達到第二季 19.2% 的歷史新高。

Gross profit dollars increased $15.9 million year over year.

毛利年增 1590 萬美元。

And as a percent of sales, gross margins remained in the upper half of our normalized range at 39.4%.

作為銷售額的百分比，毛利率仍處於我們標準化範圍的上半部分，即 39.4%。

Of note, margins have held to a floor of 38% since 2019 and have been steadily above 39% for the last six quarters, demonstrating the stability and resiliency of gross margins in the face of inflationary and other macro pressures.

值得注意的是，自2019年以來，利潤率一直保持在38%的下限，並在過去六個季度穩定在39%以上，這表明毛利率在面對通膨和其他宏觀壓力時具有穩定性和彈性。

SEA expenses in the second quarter were $43.9 million, an increase of approximately $4 million year over year and up just over $3 million from the first quarter.

第二季的 SEA 支出為 4,390 萬美元，年增約 400 萬美元，較第一季略多於 300 萬美元。

The year-over-year spending increases was due primarily to personnel-related costs, including higher headcount, salaries, sales commissions and R&D.

支出年增主要是由於人員相關成本，包括人員數量、薪資、銷售佣金和研發費用的增加。

Despite this increase in gross spending, SEA as a percent of sales declined 250 basis points to 20.2% from 22.7% in the comparable prior year quarter due to the backlog enhanced sales.

儘管總支出有所增加，但由於積壓銷售增加，SEA 佔銷售額的百分比從去年同期的 22.7% 下降了 250 個基點至 20.2%。

The income tax provision in the second quarter of 2024 was 23.8% and was below the prior year's 25.8%, partially due to the discrete tax benefit from equity compensation transactions.

2024 年第二季的所得稅撥備率為 23.8%，低於前一年的 25.8%，部分原因是股權補償交易帶來的離散稅優惠。

In summary, consolidated EPS was $1.12 in the second quarter of 2024, a 47% improvement from $0.76 in the prior year comparable quarter.

總之，2024 年第二季的合併每股收益為 1.12 美元，比去年同期的 0.76 美元成長了 47%。

Primary working capital as a percent of sales at June 30, 2024 was 21.9%, consistent with the prior quarter end and a 20-basis point improvement from 22.1% at calendar year end.

截至 2024 年 6 月 30 日，主要營運資本佔銷售額的百分比為 21.9%，與上一季末一致，比日曆年末的 22.1% 提高了 20 個基點。

We continue to carefully manage working capital investments to support growth.

我們繼續謹慎管理營運資本投資以支持成長。

Free cash flow of $34.1 million was higher than the prior year's $20.1 million, largely the result of higher earnings.

自由現金流為 3,410 萬美元，高於上年的 2,010 萬美元，這主要是獲利增加的結果。

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

這樣，我會將電話轉回肯恩。

Thanks, Bob.

謝謝，鮑伯。

Turning to slide 5, I'll take a few minutes to introduce you to BlueEdge.

前往投影片 5，我將花幾分鐘時間向您介紹 BlueEdge。

For those of you that stopped by our booth at this year's ACE Trade Show, you saw the literal representation of BlueEdge on display.

對於那些在今年 ACE 貿易展上參觀過我們展位的人來說，您會看到所展示的 BlueEdge 的字面意思。

It showcased our full suite of connected technologies, integrating hardware enabled software and services for customers to gain clarity and make more informed decisions for efficient water management.

它展示了我們的全套互聯技術，整合了硬體支援的軟體和服務，幫助客戶獲得清晰的資訊並做出更明智的決策，以實現高效的水管理。

BlueEdge is not a new product or segment, so please don't ask us how many BlueEdges we plan to sell next quarter.

BlueEdge 不是新產品或新細分市場，所以請不要問我們計劃下季度銷售多少台 BlueEdge。

Instead, BlueEdge is the overarching name we've given to our tailorable suite of solutions that solve critical water challenges across the entire water cycle.

相反，BlueEdge 是我們為解決整個水循環中關鍵水挑戰的可自訂解決方案套件賦予的總體名稱。

It's a way to simplify for our customers, including both utility and commercial and industrial customers, the breadth of offerings available to best meet their needs and preferences today and as they advance and change in the future.

這是一種為我們的客戶（包括公用事業、商業和工業客戶）簡化可用產品範圍的方法，可以最好地滿足他們當前以及未來的進步和變化的需求和偏好。

I encourage you to visit our badgermeter.com website to learn more.

我鼓勵您訪問我們的 badgermeter.com 網站以了解更多資訊。

At the end of May, we released our annual sustainability report with a summary here on slide 6.

5 月底，我們發布了年度永續發展報告，摘要請見幻燈片 6。

The report focuses on enabling customer-driven sustainability outcomes, mitigating ESG risks and reducing costs.

該報告的重點是實現客戶驅動的永續發展成果、減輕 ESG 風險和降低成本。

With more than 95% of our revenue derived from water-related applications, we play a crucial role in enabling water efficiency and resiliency, reducing water loss and optimizing asset life for our customers.

我們 95% 以上的收入來自與水相關的應用程序，我們在提高用水效率和彈性、減少水損失和優化客戶資產壽命方面發揮著至關重要的作用。

We also strive to limit our own environmental impact by reducing emissions, energy, waste and water usage and in turn, lowering our costs.

我們也努力透過減少排放、能源、廢物和水的使用來限制我們對環境的影響，從而降低我們的成本。

Finally, we know that attracting and retaining engaged talent motivated by our purpose and provided opportunities to grow their careers are critical to furthering innovation and supporting our long-term growth.

最後，我們知道，吸引和留住受我們目標激勵的敬業人才並為他們提供職業發展機會對於進一步創新和支持我們的長期成長至關重要。

By prioritizing the value enhancing linkage between financial and sustainability related outcomes, we are working to ensure the longevity of our business well into the future.

透過優先考慮財務和永續發展相關成果之間的價值提升聯繫，我們正在努力確保我們的業務在未來能夠長久發展。

Finally, turning to the outlook, there is really no change to the multiple favorable macro drivers supporting the water industry growth fundamentals with an encouraging opportunity funnel, bid pipeline and order book boding well for continued sales and earnings growth.

最後，談到前景，支持水務產業成長基本面的多重有利宏觀驅動因素確實沒有改變，令人鼓舞的機會漏斗、投標管道和訂單簿預示著銷售和盈利持續增長的良好跡象。

As we noted in the press release and Bob's earlier comments, the second quarter did benefit from converting some of our backlog in support of our customers, which will impact sequential revenue expectations moving forward.

正如我們在新聞稿中和鮑勃之前的評論中指出的那樣，第二季度確實受益於將一些積壓訂單轉換為支援客戶，這將影響未來的連續收入預期。

Our focus is on high single digit sales growth rates, taking into account general unevenness and the more difficult year-over-year sales comparisons in the back half of the year.

我們的重點是高單位數銷售成長率，考慮到下半年的整體不平衡性和更困難的同比銷售比較。

We have the balance sheet and cash flow generation to provide us with significant flexibility and capacity to further invest in both organic and highly strategic inorganic growth while also providing an attractive dividend.

我們的資產負債表和現金流為我們提供了巨大的靈活性和能力，可以進一步投資於有機成長和高度策略性的無機成長，同時也提供有吸引力的股息。

In summary, the feedback we received from customers and other industry experts at ACE reinforced both the constructive industry backdrop and their preference for our innovative and differentiated solutions.

總而言之，我們從 ACE 的客戶和其他行業專家那裡收到的回饋強化了建設性的產業背景以及他們對我們創新和差異化解決方案的偏好。

Our team remains aligned and excited about the opportunities ahead.

我們的團隊保持一致，並對未來的機會感到興奮。

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

那麼，接線員，請開通提問線路。

(Operator Instructions) Nathan Jones, Stifel.

（操作員說明）Nathan Jones，Stifel。

I guess I'll start off with the -- talking about the high single digit target in the back half of the year.

我想我將從談論今年下半年的高個位數目標開始。

You guys have talked over the years about more long-term targets, but I don't think you've ever kind of given a specific target for a second half of the year.

多年來你們一直在談論更長期的目標，但我認為你們從未給過下半年的具體目標。

So clearly, we are trying to manage expectations here with the backlog conversion in the second quarter.

顯然，我們正試圖透過第二季的積壓轉換來管理預期。

So I guess the question is, can you talk about what the contribution of kind of a 1H backlog burn off in the second quarter was?

所以我想問題是，你能談談第二季 1 小時積壓的消耗的貢獻是什麼嗎？

And should we just kind of think of that as a headwind to what a run rate second half is?

我們是否應該將其視為下半年運行率的不利因素？

Yeah, Nathan.

是的，內森。

I'll go first here and I'm sure Bob will have something to add on this.

我先講到這裡，我相信鮑伯會有一些補充。

But fundamentally, the positive outlook that we have on the markets hasn't changed at all.

但從根本上來說，我們對市場的積極前景沒有任何改變。

I just think we're heading into a period here where year over year the comps are -- gets stronger each additional year.

我只是認為我們正在進入這樣一個時期：逐年比較——每年都會變得更強。

I think we were up in Q3 last year 26%, the previous year up 15%.

我認為去年第三季我們成長了 26%，前一年成長了 15%。

So the comps get more difficult.

所以比賽變得更加困難。

And just in terms of returning to the idea of we deliver when our customers want products from us and we've always been an uneven business in the past and just don't want people to start thinking about sequentially every quarter is larger than the next.

就回到當我們的客戶需要我們的產品時我們交付的想法而言，我們過去一直是一個不平衡的業務，只是不希望人們開始按順序思考每個季度都比下一個季度大。

And Bob is shaking his head no, so I must have did okay.

鮑伯搖頭說不，所以我一定做得很好。

I mean no meaning he agrees.

我的意思是沒有任何意義他同意。

Yeah.

是的。

I got it.

我得到了它。

I think we've seen over the last couple of quarters as well and over the last period here that the incremental margins have kind of hit that 30% level, which I think is kind of higher than you guys have guided historically or expected historically, talking more about mid 20s kind of incrementals.

我認為我們在過去幾個季度和過去一段時間裡也看到增量利潤率達到了 30% 的水平，我認為這比你們歷史上指導或預期的要高，更多地談論20年代中期的增量。

Should we expect that to normalize back down to more of a mid 20s level if the organic growth is lower?

如果有機成長較低，我們是否應該預期其會正常化回 20 多歲左右的水平？

I mean, obviously you should get higher incrementals on higher organic growth.

我的意思是，顯然你應該在更高的有機增長上獲得更高的增量。

Just any thoughts you have around that?

您對此有什麼想法嗎？

Yeah, I would say, no fundamental shift, Nathan, to what we say our normal incrementals are.

是的，我想說，內森，我們所說的正常增量並沒有根本性的轉變。

You're exactly right in the diagnosis of really the last two quarters with the robust growth and then the pace of growth investment being modestly slower than that.

您對過去兩季的診斷是完全正確的，成長強勁，但成長投資的步伐卻比這稍慢。

Of course, you're getting the operating and EBITDA margin leverage and of course, then a byproduct of that is the incremental margins.

當然，您將獲得營運利潤率和 EBITDA 利潤率槓桿，當然，其副產品就是增量利潤率。

But no real change to our mid 20s.

但二十多歲的我們並沒有真正的改變。

It just so happens the two most recent quarters have been above that for those reasons.

由於這些原因，最近兩個季度的成長率恰好高於該水準。

Okay.

好的。

I guess I'll just slide one more in on BlueEdge without asking how many BlueEdges you're going to sell.

我想我會在 BlueEdge 上再滑入一台，而不會詢問您要出售多少 BlueEdge。

Putting this suite of technologies and marketing this suite of technology, kind of let you leverage that in terms of maybe selling a little more of these technologies or going to market with a broader suite of technologies that could be leveragable to increased revenue, increased market share.

運用這套技術並行銷這套技術，可以讓你利用這一點，也許可以銷售更多的這些技術，或者向市場推出更廣泛的技術，這些技術可以用來增加收入，增加市場份額。

How do you think about the ability to leverage that platform to generate additional revenue?

您如何看待利用該平台產生額外收入的能力？

Yeah.

是的。

So you're exactly on the right path there.

所以你完全走在正確的道路上。

So obviously, over the last four years with the entree into water quality with ATi and s::can, Syrinix for the pipeline monitoring, bringing on the Telog brand and RTUs.

顯然，在過去四年中，隨著 ATi 和 s::can 進入水質領域，Syrinix 用於管道監控，引入了 Telog 品牌和 RTU。

We've clearly gone beyond the meter and this BlueEdge platform is a way for us to talk with customers about the full extensibility that we can provide throughout their network system.

我們顯然已經超越了計量範圍，這個 BlueEdge 平台是我們與客戶討論我們可以在整個網路系統中提供的全面可擴展性的一種方式。

So if someone's been a metering customer with us for 50 years, now we have a comprehensive easy way across the organization or through our distributors to talk to those customers about the rest of the portfolio that they could put in place by adding the sensors and then bring it through our BEACON software platform that they already use or vice versa.

因此，如果某人已經是我們 50 年的計量客戶，現在我們可以透過整個組織或透過我們的經銷商，與這些客戶討論產品組合的其餘部分，他們可以透過添加感測器來部署這些產品，然後透過他們已經使用的我們的BEACON 軟體平台將其引入，反之亦然。

If it's a customer that we've acquired through one of the acquisitions and they haven't been a metering customer, similar thing.

如果這是我們透過其中一項收購獲得的客戶，而他們不是計量客戶，則類似的情況。

So it's just a -- it's a really nice way for us to meet the customer where they are in their technology journey and figure out how we can enable them to meet their goals and sell more of our products.

因此，這對我們來說是一種非常好的方式，可以滿足客戶在技術之旅中的位置，並找出我們如何幫助他們實現他們的目標並銷售更多我們的產品。

Andrew Krill, Deutsche Bank.

安德魯·克里爾，德意志銀行。

Thanks.

謝謝。

Good morning, everyone.

大家，早安。

Last quarter, I was noted the US government stimulus related to water was helping slightly at the margin with demand.

上個季度，我注意到美國政府與水相關的刺激措施對需求略有幫助。

I know a lot of this was indirect by freeing up capital at the larger utilities.

我知道其中很多都是透過釋放大型公用事業公司的資金而間接實現的。

So just, is there any update on this?

那麼，這方面有什麼更新嗎？

Has it changed at all?

它有什麼變化嗎？

Has accelerated through 2Q?

加速通過第二季了嗎？

And also, I guess in your discussions with customers, like are there any dynamics at play ahead of the US election such as scrambling to use the funds or perhaps sitting on their hands more until after the election and therefore, maybe this could be a little bit of an air pocket to contain with?

而且，我想在您與客戶的討論中，例如美國大選之前是否有任何動態在發揮作用，例如爭先恐後地使用這些資金，或者可能會更多地坐在他們的手上直到大選之後，因此，這可能會有點需要容納一點氣穴嗎？

Yeah.

是的。

So Andrew, I don't recall exactly what we said about that last quarter.

安德魯，我不記得我們上個季度說了些什麼。

But the one thing about our growth that has been consistent for the last several years is that virtually none of it has been aided by any of the infrastructure funds.

但過去幾年我們的成長始終如一的一件事是，幾乎沒有任何基礎設施基金幫助過我們。

The macro drivers, the fundamentals of what's happening in the market and our team's ability to execute on our portfolio has been the driver of the growth.

宏觀驅動因素、市場發生的基本面以及我們團隊執行投資組合的能力一直是成長的驅動力。

As we think about election cycles and what we think the future can bring, if and when some of these funds do start to come through, we think there could be and some pockets of goodness in water quality and some of the other areas.

當我們思考選舉週期以及我們認為未來會帶來什麼時，如果其中一些資金確實開始到位，我們認為水質和其他一些領域可能會帶來一些好處。

But we really don't need that for our growth.

但我們的成長確實不需要它。

So it puts us, I think, in a pretty good position that we don't have air pockets that have been created by that.

因此，我認為，這使我們處於一個非常有利的位置，我們沒有由此產生的氣穴。

Therefore, we're not expecting any air pockets to burst.

因此，我們預計不會有任何氣穴破裂。

I think the key part of your question is exactly what you stated, it was -- on the fringes, the extreme fringes and generally, more indirect in terms of effect.

我認為你問題的關鍵部分正是你所說的，它是在邊緣、極端邊緣，而且一般來說，就效果而言更間接。

So that's kind of where things are, and I would say, no real delta quarter to quarter.

所以這就是情況，我想說，季度與季度之間沒有真正的增量。

Okay, great.

好的，太好了。

That's helpful.

這很有幫助。

And then to the second question, I think the copper and the movements in it have been a hot topic.

關於第二個問題，我認為銅及其走勢一直是個熱門話題。

And I think over time for you guys, it's become less and less important as an input.

我認為隨著時間的推移，對你們來說，它作為一種投入變得越來越不重要。

But just wanted to get your pulse on should we be expecting this to be a little bit of pressure perhaps on gross margin in the back half?

但只是想了解一下您的脈搏，我們是否應該預期這會對下半年的毛利率造成一點壓力？

And maybe that keeps you from being at the very high end of that 38% to 40% range of target over time?

也許隨著時間的推移，這會阻止您處於 38% 到 40% 目標範圍的高端？

Yeah.

是的。

So there's obviously a lot of drivers of our gross margin beyond just copper and you highlighted the key point, which, of course, less and less of an impact as we continue to sell more and more things that aren't as copper focused.

因此，顯然除了銅之外，我們的毛利率還有很多驅動因素，您強調了關鍵點，當然，隨著我們繼續銷售越來越多不以銅為重點的產品，這一點的影響越來越小。

But clearly, it's a fact that -- and if you just looked at quoted copper pricing quarter over quarter, second quarter average, 2024, it's 18% higher than we were a year ago.

但顯然，事實是——如果你只看一下 2024 年第二季度平均銅報價的季度環比，你會發現它比一年前高出 18%。

Thankfully, it's a bit lower than the peaks of mid-May.

值得慶幸的是，它比五月中旬的高峰要低一些。

But absolutely, that's one of the items that would be on the headwind side of the category.

但絕對，這是該類別中處於不利地位的項目之一。

In addition to a variety of other things as the market's read, certainly inflation is improving.

除了市場所解讀的各種其他因素外，通膨無疑正在改善。

But there's still inflationary cost pressures in the system whether that be copper, whether that be transportation, energy and other things.

但係統中仍存在通膨成本壓力，無論是銅、交通、能源或其他方面。

But ultimately, we still remain resolved to our normalized growth margin range.

但最終，我們仍然決定維持正常的成長率範圍。

And quite frankly, if you look at the last six quarters of performance, as we noted in the script, we've been in a pretty tight band, and I think we expect that to continue.

坦白說，如果你看看過去六個季度的表現，正如我們在劇本中指出的那樣，我們一直處於一個非常緊張的狀態，我認為我們預計這種情況會繼續下去。

But definitely that copper piece is a pressure.

但那銅片絕對是一種壓力。

Rob Mason, Baird.

羅布梅森，貝爾德。

I just wanted to go back to the commentary around backlog conversion.

我只是想回到關於積壓轉換的評論。

Within the high single digit or so focus that you have for the back half of the year, does that assume that backlog comes down further?

在今年下半年的高個位數左右的關注範圍內，這是否假設積壓會進一步減少？

I'm just kind of curious what your level of visibility is around the high single digit?

我只是有點好奇你的能見度在高個位數左右是多少？

Yeah.

是的。

So as you know, we never have sized the backlog and what I would characterize it as we're still really excited about the level of order rates and what we have in the backlog.

如您所知，我們從未確定過積壓訂單的規模以及我對它的描述，因為我們仍然對訂單率等級和積壓訂單感到非常興奮。

So I don't think that anything really fundamentally changes in our view on that.

所以我認為我們對此的看法並沒有真正從根本上改變。

Sure.

當然。

Ken, you had mentioned earlier -- and I mean, this has always been resident in the business.

肯，你之前提到過——我的意思是，這一直是這個行業的常態。

You ship the product when your customers need them.

您可以在客戶需要時運送產品。

But I'm just curious over time, whether your revenue's growing at a 20% clip or high single digit, that is a little bit higher than historical.

但我只是好奇隨著時間的推移，你的收入是否以 20% 的速度成長，還是高個位數成長，這比歷史水準要高一點。

And this is largely viewed as a replacement business that your utility customers are replacing existing meters or radios as well.

這在很大程度上被視為一項替代業務，您的公用事業客戶也在更換現有的儀表或收音機。

How have they adopted or adapted their staffing models over time or maybe in the last few years to be able to support that kind of deployment pace?

隨著時間的推移，或者在過去幾年中，他們如何採用或調整他們的人員配置模型，以便能夠支援這種部署速度？

Yeah.

是的。

So that's -- as we talk about so many times like there's no yes or no answers to any question and everything's not standard.

正如我們多次談論的那樣，任何問題都沒有是或否的答案，一切都不標準。

So when you see, I think, in many cases more and more installation companies working for utilities where a lot of utilities used to do the installations themselves or you still have a lot of people that are trying to staff up, fundamentally still one of the things that's a huge driver for us is this aging or less stable workforce.

因此，當你看到，我認為，在很多情況下，越來越多的安裝公司為公用事業公司工作，其中許多公用事業公司過去常常自己進行安裝，或者仍然有很多人試圖配備人員，從根本上來說仍然是其中之一對我們來說，一個巨大的推動因素是勞動力的老化或不穩定。

And that's why people have been adopting technology so much.

這就是人們如此廣泛採用技術的原因。

So again, I don't think I can give you just a standard answer of how each utility is reacting, but

再說一遍，我認為我無法為您提供每個公用事業如何反應的標準答案，但是

--

--

I do think what we could say, and again, this hits close to your question but maybe not precisely.

我確實認為我們可以說的話，這再次接近你的問題，但可能不準確。

With labor shortages that we've all talked about over the last two, three years, we haven't seen an elongation in the more generalized standard deployment of a full system replacement.

由於過去兩三年我們都在談論勞動力短缺，我們還沒有看到完整系統更換的更普遍的標準部署的延長。

Generally, those tend to be three, four, five years.

一般來說，這些時間往往是三年、四年、五年。

So the labor has been being able to be kept in place to set such that we're not seeing an extension of deployment schedules.

因此，勞動力一直能夠保持在適當的位置，這樣我們就不會看到部署時間表的延長。

I think the point Ken's making of when we deliver to our customers is the high dependency of our sales channel on direct sales, which maybe is different than our competitors.

我認為當我們向客戶交付產品時，Ken 提出的觀點是我們的銷售管道對直銷的高度依賴，這可能與我們的競爭對手不同。

And so this is not a distribution game.

所以這不是一個分配遊戲。

This is a very much direct relationship, which by default then brings in project schedules more so than others.

這是一種非常直接的關係，預設情況下，它比其他關係更能帶來專案進度。

And that's a degree what creates some of the unevenness that we often talk about.

這就是造成我們經常談論的一些不平衡的程度。

Just so happens this most recent quarter had an unevenness to the favorable side.

恰好最近一個季度的情況出現了不平衡的情況。

I should have let Bob go first.

我應該先讓鮑伯離開。

(laughter)

（笑聲）

Well, just to conclude here, last question.

好吧，最後一個問題就到這裡結束吧。

So your SEA expenses, as you commented, did step up sequentially a fair amount.

因此，正如您所說，您的 SEA 費用確實連續增加了相當多的金額。

Your outlook for modest operating margin expansion in the second half of the year kind of suggests that they stay at this level.

您對下半年營業利潤率適度擴張的預期表明它們將保持在這一水平。

Is that a fair interpretation or was there anything more onetime in nature in the second quarter?

這是一個公平的解釋還是第二季有更多的一次性事件？

Yeah, I think the comment that you specifically latched on to there, modest improvement, that's really a year-over-year comment and not a sequential comment.

是的，我認為您特別關注的評論是適度的改進，這實際上是逐年評論，而不是連續評論。

Absolutely our -- we're -- continue to be organically investing in the business and differentiating our market position through being an innovative company that invest in the business.

我們絕對會繼續對業務進行有機投資，並透過成為一家投資業務的創新公司來使我們的市場地位與眾不同。

We just continue to believe we can do that at a rate slower, which we can grow the top line and that continues to be an operating lever for us moving forward.

我們仍然相信我們可以以較慢的速度做到這一點，這樣我們就可以增加收入，這仍然是我們前進的槓桿。

But that comment you latched onto was more year-over-year than sequential.

但你所關注的評論是同比而不是連續的。

Full year.

全年。

Excuse me.

打擾一下。

Full year.

全年。

Thank you.

謝謝。

(Operator Instructions) We have no further questions in the queue, so I'll turn the call back over to Karen for any closing comments.

（操作員說明）我們隊列中沒有其他問題，因此我會將電話轉回給凱倫以獲取任何結束意見。

Great.

偉大的。

Thank you, operator, and thanks, everyone, for joining our call today.

謝謝接線員，也謝謝大家今天加入我們的通話。

For your planning purposes, our third quarter call is tentatively scheduled for October 17.

出於您的規劃目的，我們的第三季電話會議暫定於 10 月 17 日舉行。

I'll be around all day to take any follow-up questions you have.

我會全天解答您的任何後續問題。

Have a good weekend.

有一個美好的周末。

This concludes today's call.

今天的電話會議到此結束。

Thank you for joining.

感謝您的加入。

You may now disconnect your line.

現在您可以斷開線路。