Badger Meter Inc (BMI) 2024 Q4 法說會逐字稿

Ladies and gentlemen, welcome to the Q4 2024 Badger Meter Earnings Conference Call after the prepared remarks.

女士們、先生們，歡迎參加準備好的發言後的 2024 年第四季 Badger Meter 收益電話會議。

(Operator instructions)

（操作員指令）

It's now my pleasure to turn the conference over to Karen Bauer, Vice President of Investor Relations, 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副總裁 Karen Bauer。

Good morning and thank you for joining the Badger Meter fourth quarter and full year 2024 earnings conference call on the call with me.

早安，感謝您與我一起參加 Badger Meter 第四季和 2024 年全年收益電話會議。

Today are Kenneth C. Bockhorst, Chairman, President and Chief Executive Officer, Bob Wrocklage, Chief Financial Officer and Barb Noverini, Senior Director of Investor Relations.

今天在場的有董事長、總裁兼執行長 Kenneth C. Bockhorst、財務長 Bob Wrocklage 和投資者關係高級總監 Barb Noverini。

Please note that the earnings release and related slide presentation are available on our website quickly.

請注意，收益報告和相關投影片簡報可在我們的網站上快速取得。

I'll cover the safe harbor reminding you that any forward-looking statements made during this call are subject to various risks and uncertainties.

我將介紹安全港，提醒您本次電話會議中所做的任何前瞻性陳述都可能受到各種風險和不確定性的影響。

The most important of which are outlined in our press release and SEC filings on today's call.

其中最重要的內容已在我們今天的新聞稿和美國證券交易委員會文件中概述。

We will refer to certain non-GAAP financial metrics.

我們將參考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 with that.

我們的收益幻燈片提供了所使用的 GAAP 與非 GAAP 財務指標的對帳。

I'll turn the call over to Kenneth.

我會把電話轉給肯尼斯。

Thanks Karen and thank you all for joining our call.

謝謝 Karen，也謝謝大家參加我們的電話會議。

We capped off another record year with strong fourth quarter results across sales, operating profit earnings per share and cash flow metrics.

我們以第四季強勁的銷售額、每股營業利潤和現金流指標結束了另一個創紀錄的一年。

We also announced today the acquisition of smart cover.

我們今天也宣布了對智慧封面的收購。

We're excited about incorporating their sewer and lift station monitoring offerings into our blue edge suite of tailorable solutions.

我們很高興將他們的下水道和升水站監控產品納入我們的藍色邊緣客製化解決方案套件中。

I'll talk more about the acquisition provide a recap of the year and discuss our outlook later in the call for now.

我將在稍後的電話會議上進一步談論此次收購，並提供今年的回顧並討論我們的前景。

I'll turn it over to Bob to go through the details of the quarter.

我將把話題交給鮑伯來討論本季的詳細資訊。

Thanks Kenneth and good morning, everyone turning to slide 4.

謝謝 Kenneth，早安，各位請翻閱投影片 4。

As Kenneth mentioned, we delivered another quarter of solid results to close out 2024 from a sales standpoint, we delivered 13% quarterly sales growth which as a reminder was on top of a difficult 24% increase in the prior year comparable quarter.

正如肯尼斯所提到的，從銷售角度來看，我們在 2024 年底又取得了穩健的業績，季度銷售額增長了 13%，提醒一下，這是在去年同期艱難的 24% 增長的基礎上實現的。

Total utility water product line sales increased 14% year-over-year as we continued to deliver on solid demand across our blue edge suite of utility smart water solutions year-over-year growth was broad based, led by cellular AMI adoption including associated Meters Orion cellular endpoints and beacon software.

由於我們繼續滿足對藍色邊緣公用事業智慧水解決方案套件的強勁需求，公用事業水產品線總銷售額年增 14%，同比增長基礎廣泛，主要由蜂窩 AMI 的採用推動，包括相關的 Meters Orion 蜂窩端點和信標軟體。

As a service sales for the flow instrumentation product line were up slightly at 1% in the quarter as growth in our core water related applications offset declines across the array of deemphasized end markets and customer applications.

由於我們核心水相關應用的成長抵消了一系列不再受重視的終端市場和客戶應用的下滑，本季流量儀表產品線的服務銷售額小幅上漲 1%。

Turning to margins.

轉向利潤。

We're very pleased that operating margins expanded 150 basis points to 19.1% in the quarter.

我們非常高興本季營業利潤率擴大了 150 個基點，達到 19.1%。

Gross profit margins came in at 40.3%.

毛利率為40.3%。

A 110 basis point improvement from 39.2% in the prior year.

比前一年的 39.2% 提高了 110 個基點。

Comparable quarter.

可比季。

The benefit of overall higher volumes structural sales mix and solid price/cost management contributed to the year-over-year gross margin improvement expenses in the fourth quarter were $43.5 million.

整體銷售增加、結構性銷售組合和穩健的價格/成本管理的好處促使第四季毛利率年比改善，費用為 4,350 萬美元。

An increase of approximately $4 million year-over-year.

較上年同期增加約400萬美元。

Consistent with prior quarters, the spending increase was due primarily to personnel related costs including higher headcount and salaries to support our growth.

與前幾季一致，支出增加主要是由於人員相關成本，包括為支持我們的成長而增加的員工人數和薪資。

Additionally, the increase included certain acquisition costs associated with the smart cover transaction FEA as a percent of sales declined 40 basis points to 21.2% from 21.6% in the comparable prior year quarter.

此外，該增幅還包括與智慧封面交易 FEA 相關的某些收購成本，佔銷售額的百分比從去年同期的 21.6% 下降 40 個基點至 21.2%。

On the higher sales.

論更高的銷量。

The income tax provision in the fourth quarter of 2024 was 27.1% compared to 26.1% in the comparable prior year period.

2024 年第四季的所得稅準備金為 27.1%，而去年同期為 26.1%。

Similar to the full year 24 tax rate, we continue to expect an ongoing effective income tax rate in the plus or minus 25% range assuming no change in overall corporate income tax rates.

與全年 24 年稅率類似，假設整體企業所得稅率沒有變化，我們預計持續的有效所得稅率將在正負 25% 的範圍內。

In summary, consolidated PS was a dollar four in the fourth quarter of 2024.

總結一下，2024 年第四季的合併 PS 為 1.4 美元。

A 24% improvement from $0.84 in the prior year comparable quarter, primary working capital as a percent of sale at December 31, 2024 was 20.8% which compared to 23.8% at last year.

截至 2024 年 12 月 31 日，主要營運資本佔銷售額的百分比為 20.8%，較去年同期的 0.84 美元增長 24%，而去年同期為 23.8%。

End note that these percentages reflect a current year balance sheet reclass reclassification of the current portion of deferred revenue from payables to other current liabilities for which prior years were not restated.

最後請注意，這些百分比反映了當前年度資產負債表的重新分類，將遞延收入的當前部分從應付款項重新分類為其他流動負債，而前幾年尚未重述。

There's an appendix slide that details this reclass on a pro forma basis.

附錄投影片詳細介紹了此重新分類的形式。

And Karen will provide a bit more information in her call, closeup comments.

凱倫將在電話中提供更多資訊和特寫評論。

We were pleased with the primary working capital improvement, notably, our reduction in absolute inventory levels as a result, we generated strong free cash flow in the quarter, a record $47.4 million up 32% year-over-year.

我們對主要營運資本的改善感到滿意，特別是我們的絕對庫存水準降低了，因此，我們在本季度產生了強勁的自由現金流，達到創紀錄的 4,740 萬美元，同比增長 32％。

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

說完這些，我將把電話轉回給坎尼斯 (Kanneth)。

Thanks Bob.

謝謝鮑勃。

It's customary at the end of the year to take a step back and reflect on our collective performance against our strategic goals.

通常，每年年底我們都會回顧並反思我們在實現策略目標方面的集體表現。

So I couldn't be more pleased with the tangible outcomes from the team's efforts in 2024 which represent a continuation of trends seen in recent years.

因此，我對團隊在 2024 年的努力所取得的實際成果感到非常滿意，這代表了近年來趨勢的延續。

As noted here on slide, five, we delivered 18% sales growth in 2024 surpassing $800 million in revenue with a five year topline per of 14%.

如第五張投影片所示，我們在 2024 年實現了 18% 的銷售成長，營收超過 8 億美元，五年營收成長率為 14%。

Our software revenue now exceeds $56 million representing 6.7% of sales and resulting in a 28% compound annual growth rate over the past five years.

我們的軟體收入現在超過 5,600 萬美元，佔銷售額的 6.7%，過去五年的複合年增長率達到 28%。

Operating profit margins expanded 450 points over the last five years with both gross margin improvement and leverage contributing to the margin expansion, EBITA margins hit a record 23% in 2024.

過去五年，營業利潤率擴大了 450 個百分點，毛利率提高和槓桿率均推動了利潤率的擴大，EBITA 利潤率在 2024 年達到創紀錄的 23%。

And finally, we reduced our working capital intensity and consistently generated free cash flow in excess of 100% of net earnings.

最後，我們降低了營運資本強度，並持續產生超過淨收益 100％ 的自由現金流。

Enabling our ability to continue as the innovation leader in our market return cash to shareholders in the form of dividends, doubling our dividend rate from just five years ago.

使我們能夠繼續作為市場創新領導者，以股息的形式向股東返還現金，使我們的股息率比五年前翻了一番。

And building on our track record with 32 years of consecutive annual dividend increases and executing value enhancing acquisitions to further advance our portfolio of smart water solutions.

我們將繼續鞏固我們連續 32 年增加年度股息的良好業績，並執行加值收購，以進一步推進我們的智慧水解決方案組合。

The latest example of which I'll discuss next turning to slides six and seven.

我將在第六和第七張幻燈片中討論最新的例子。

I'll cover the smart cover acquisition announced earlier this morning.

我將報道今天早上宣布的智慧封面收購事件。

Smart cover is a leading provider of water collection system monitoring solutions serving utility customers across North America.

Smart cover 是一家領先的水收集系統監控解決方案提供商，為北美各地的公用事業客戶提供服務。

Smart Cover's hardware enabled software offerings add to the scope of actionable data used by municipalities to improve efficiency, resiliency and sustainability.

Smart Cover 的硬體支援軟體產品擴大了市政當局使用的可操作資料的範圍，以提高效率、彈性和永續性。

Specifically smart cover provides sensors, software and related support services to monitor sewer levels on a real time basis by identifying changes in patterns and alerting utility personnel to potential issues.

具體來說，智慧覆蓋提供感測器、軟體和相關支援服務，透過識別模式變化並向公用事業人員發出潛在問題警報，即時監測下水道水位。

The solutions work to predict detect and prevent sewer overflow spills which are becoming more frequent with the rise of extreme weather events like heavy rainfall and flooding, reducing the frequency and severity of sewer overflows, saves money while protecting public health and the environment.

這些解決方案旨在預測、檢測和防止下水道溢流。

In addition, the technology reduces the need for high frequency cleanings, locates areas of influence and infiltration, detects intrusion and assists with managing harmful sewer gasses.

此外，該技術減少了高頻清潔的需要，定位影響和滲透的區域，偵測入侵並協助管理有害的下水道氣體。

Smart cover also provides lift station monitoring and control hardware and software solutions to improve pump station efficiency, supplementing our existing TEO offerings and last but certainly not least, it brings strong talent with the expertise to assist our customers in applying these capabilities.

Smart cover 還提供升降站監控和控制硬體和軟體解決方案，以提高泵站效率，補充我們現有的 TEO 產品，最後但同樣重要的是，它帶來了擁有專業知識的強大人才，以協助我們的客戶應用這些功能。

We utilized existing cash on hand for the $185 million purchase price.

我們利用現有現金支付了 1.85 億美元的購買價。

This equates to about five times.

這相當於大約五倍。

Smart covers 2024 sales of approximately $35 million.

Smart 預計 2024 年的銷售額將達到約 3,500 萬美元。

The macro drivers behind technology deployment in the water sector such as labor availability, aging infrastructure and regulation.

水利領域技術部署背後的宏觀驅動因素包括勞動力可用性、老化的基礎設施和監管。

Combined with the increasing occurrence of climate related severe weather events supports strong adoption rates for these technologies and to put it in baseball terms, we believe sewer line monitoring is barely in the first inning.

再加上與氣候有關的惡劣天氣事件的不斷發生，這些技術的採用率很高，用棒球術語來說，我們認為下水道管線監控才剛開始。

In addition, smart cover's leading market position, the recurring revenue dynamics and ability to further leverage the data and analytics into our full network monitoring solutions makes this a strategic deal with long term shareholder value creation.

此外，smart cover的領先市場地位、經常性收入動態以及進一步將數據和分析融入我們的全網路監控解決方案的能力，使這成為一項具有長期股東價值創造的策略交易。

As noted sales today are about $35 million with high single digit EBITA margins, reflective of their scale and heavy growth investments.

如上所述，如今的銷售額約為 3,500 萬美元，EBITA 利潤率高達個位數，反映了其規模和大量成長投資。

As part of badger Meter and blue edge, we can amplify the top line growth rate by leveraging our direct sales organization and by advancing overall features and functionality with our world class communication and software technologies which will continue to competitively differentiate badger Meter suite of offerings in the market.

作為 Badger Meter 和 Blue Edge 的一部分，我們可以利用我們的直銷組織並利用我們世界一流的通訊和軟體技術提升整體特性和功能，從而擴大營收成長率，這將繼續使 Badger Meter 產品套件在市場上具有競爭力。

We will also aim to enhance profitability by leveraging existing infrastructure and processes in operations and supply chain.

我們也將致力於利用營運和供應鏈中現有的基礎設施和流程來提高獲利能力。

Finally turning to our outlook.

最後談談我們的展望。

I know I said this last year but it remains true even after our stellar 2024 results.

我知道我去年就說過這個，但即使在我們 2024 年取得了輝煌的業績之後，這一點仍然適用。

I am as excited about the next five years as I've ever been at a macro level, our blue edge suite of comprehensive and tailorable solutions continues to see growing adoption as we address the variety of persistent macro water challenges customers face, enabling them to be more efficient, resilient and sustainable with their water systems.

我對未來五年感到無比興奮，從宏觀層面來看，隨著我們解決客戶面臨的各種持續存在的宏觀水資源挑戰，我們的藍色邊緣套件（包括全面且可定制的解決方案）將繼續得到越來越多的採用，使他們的水系統更加高效、有彈性和可持續。

Our durable business model is underpinned by replacement driven demand, secular AMI adoption drivers and the expanding need for real time data visualization and analytics spanning the water network.

我們持久的商業模式以替代驅動的需求、長期的 AMI 採用驅動因素以及整個水網對即時數據視覺化和分析日益增長的需求為基礎。

Our orderbook and opportunity pipeline along with constructive customer budgets continue to support the high single digit average topline growth we've been communicating for some time now.

我們的訂單和機會管道以及建設性的客戶預算繼續支持我們一段時間以來一直傳達的高個位數平均營收成長。

We also expect that positive structural sales mix and leverage will continue to gradually improve margins over the strategic cycle specifically on gross margin.

我們也預計，積極的結構性銷售組合和槓桿將在策略週期內繼續逐步提高利潤率，特別是毛利率。

We're pleased that in the back half of the year we delivered above the high end of the normalized range of 38% to 40% with the six quarters prior to that above 39%.

我們很高興，今年下半年我們的業績超過了 38% 至 40% 的正常化範圍高端，而之前六個季度的業績均超過了 39%。

While some might view that as reason to increase the range, the reality is we're in a heightened state of macro uncertainty, especially as it relates to potential tariffs.

儘管有些人可能認為這是增加範圍的理由，但現實是我們正處於宏觀不確定性高度的狀態，特別是與潛在關稅有關。

The scale scope, timing and duration of which are unknown as such until there is further clarity.

在進一步明確之前，其規模範圍、時間和持續時間仍不得而知。

We believe it's prudent to keep the current range as our comfort zone while continuing to drive improvement actions in the areas within our control.

我們認為，明智的做法是將當前範圍作為我們的舒適區，同時繼續在我們控制範圍內推動改進行動。

While we continue to anticipate that our E as a percent of sales will improve over the long term.

同時我們繼續預期我們的 E 佔銷售額的百分比將會長期提高。

The addition of smart cover will reset the bar higher than 2024 levels.

智慧封面的增加將使標準高於 2024 年的水準。

This is a result of the higher than line average E as a percent of sales in their underlying operations as well as the added and tangible asset amortization which based on very preliminary estimates, preliminary estimates could be in the $6 million to $7 million range annually.

這是因為其基礎營運業務的銷售額百分比 E 高於平均水平，而且增加的有形資產攤銷基於非常初步的估計，初步估計每年可能在 600 萬至 700 萬美元之間。

Separately, I'll remind everyone that in the first quarter of 2025 margins for smart cover will be muted by the amortization of inventory fair value step up.

另外，我要提醒大家，2025 年第一季度，智慧封面的利潤率將因庫存公允價值攤銷的增加而降低。

Additionally, interest income will decline year-over-year with the use of cash.

此外，隨著現金的使用，利息收入將逐年下降。

Finally, even after acquiring smart cover, we'll have cash on the balance sheet of over $100 million along with the untapped revolver.

最後，即使在收購 Smart Cover 之後，我們的資產負債表上仍有超過 1 億美元的現金以及尚未使用的左輪手槍。

We have significant financial flexibility and organizational capacity to further execute on our growth strategies including both organic and inorganic investments.

我們擁有強大的財務靈活性和組織能力，可以進一步執行我們的成長策略，包括有機和無機投資。

I want to again thank the entire Badger Meter team for their tremendous efforts and accomplishments in 2024 and to welcome our new smart cover colleagues to Badger Meter.

我要再次感謝整個 Badger Meter 團隊在 2024 年所做的巨大努力和取得的成就，並歡迎我們的新智慧封面同事加入 Badger Meter。

I look forward to executing on the many opportunities ahead together with that operator.

我期待與該運營商共同把握未來的眾多機會。

Please open the line for questions.

請開通熱線以接受提問。

(Operator instructions)

（操作員指令）

Our first question today comes from Andrew Krill, Deutsche Bank.

我們今天的第一個問題來自德意志銀行的安德魯·克里爾。

Hey, thanks, good morning, everyone.

嘿，謝謝，大家早安。

I just wanted to ask on tariffs first.

我只是想先問一下關稅問題。

Just I think could you help, side a little more explicitly, your Mexico manufacturing exposure?

我只是覺得您能否更明確地介紹一下您在墨西哥的製造業狀況？

I believe it's around like 30% of the square footage, which is more, like clarification that would be helpful.

我認為它大約佔面積的 30%，這更有助於澄清。

And then, if we do have widespread, tariffs put in place tomorrow, if you give us some color on the contingency plans you have in place and maybe you know how long it might take to adjust price they can?

然後，如果我們明天確實實施大範圍的關稅，您是否能給我們介紹一下你們制定的應急計劃，並且知道調整價格需要多長時間？

That's a bit of a of course loaded question these days with so much uncertainty about what the impact of tariffs will be what, where they'll come from, how it all works.

如今，這個問題當然有點難回答，因為關稅的影響是什麼、關稅從何而來、關稅如何運作等問題存在著許多不確定性。

So I'll tell you what we do know and what we can control.

所以我會告訴你我們知道什麼以及我們能控制什麼。

And, first of all, clearly, everyone would have some impact from tariffs regardless of however this comes through.

首先，顯然，無論如何實施，每個人都會受到關稅的影響。

But the things to remember are from a China point of view, we source very little.

但要記住的是，從中國的角度來看，我們的採購量非常少。

We've done a considerable amount of reshoring if you will back to North America over the last several years, we certainly have capacity in some of our us facilities that we can continue to use.

如果你回顧過去幾年我們在北美所做的大量回流工作，你會發現我們的一些美國工廠確實有可以繼續使用的產能。

And we're very proud of our outstanding operation that we have in nogales.

我們對我們位於諾加萊斯的出色業務感到非常自豪。

So I have no idea yet what the administration will do or how that will go.

因此我還不知道政府將會做什麼或事情會如何發展。

But, the thing I would remind you through the last several years is I think we've done a great job of being able to control what we can.

但是，我想提醒你們的是，在過去幾年裡，我們在控制我們能控制的事情上已經做得很好了。

We've seen over the last several years, the threat of tariffs in the first Trump administration, we've been through COVID, we've been through supply chain challenges and I think our Hallmark has been understanding what we can control, acting with urgency around mitigating those actions and having a best in class operating model.

過去幾年，我們看到了川普第一屆政府的關稅威脅，我們經歷過新冠疫情，我們經歷過供應鏈挑戰，我認為我們的標誌是了解我們能控制什麼，緊急採取行動緩解這些行動，並擁有一流的營運模式。

So I don't know how to tell you how this is all going to work out.

所以我不知道該如何告訴你這一切將會如何發展。

And it's hard to model something when you have no idea what the impact is actually going to be.

當你不知道實際上會產生什麼影響時，就很難建立模型。

And then just on the broader end market demand.

然後只是討論更廣泛的終端市場需求。

And again, conscious that you do not give explicit guidance, but I thought the choice of using resilient as the operative word in the press, was interesting.

再次，我意識到您沒有給出明確的指導，但我認為在媒體上選擇使用「有彈性」作為關鍵字很有趣。

So maybe just, we know there's multiple years of very impressive growth.

所以也許我們知道已經有好幾年非常令人印象深刻的成長。

So do you think is your confidence, higher now than it was when you reported third quarter earnings, that maybe 2025 could be a high single digit growth here.

那麼，您是否認為，與報告第三季收益時相比，您現在的信心更高，也許 2025 年可以實現高個位數成長？

So it's not higher, but it's as good as it was in Q3.

因此，它沒有更高，但與第三季一樣好。

So we continued, it's another quarter where, I'm really proud of the results that we had and what we were able to get in revenue.

所以我們繼續，這是另一個季度，我對我們的業績和我們獲得的收入感到非常自豪。

Certainly pleased with the order rate that we saw in the quarter.

我們對本季的訂單率感到非常滿意。

Certainly pleased with still seeing several RFIs out on the street for AMI and water quality and other pieces of the blue edge portfolio and engineers are still working on projects in the future.

當然，很高興看到街上仍有幾份針對 AMI 和水質以及藍色邊緣產品組合的其他部分的 RFI，工程師仍在致力於未來的項目。

So I would just say nothing has changed.

所以我只能說什麼都沒改變。

Our ongoing positive tone remains the same.

我們一貫的正向基調保持不變。

Okay, great.

好的，太好了。

Thank you guys.

謝謝你們。

And that question comes from Rob Mason, Baird.

這個問題來自貝爾德的羅布梅森。

Can can you talk a little bit about smart cover?

能簡單談談智慧封面嗎？

What are the demand drivers there kind of the catalyst?

那裡的需求驅動因素和催化劑是什麼？

I'm just curious how much is maybe compliance driven, whether that's CSO overflow, mandates just, what's the catalyst for adoption primarily been to date for that solution?

我只是好奇，合規性在多大程度上是驅動的，無論是 CSO 溢出還是授權，到目前為止，採用該解決方案的主要催化劑是什麼？

So it is it is a mix of things.

所以它是各種事物的混合體。

So one of the areas is of course regulation and critical system overflows where you've got mandates to to be monitoring this in real time, of course, labor availability as a driver, many of the same macro drivers that we see on the on the rest of the business where labor availability, critical rising extreme weather events adopting technology.

因此，其中一個領域當然是監管和關鍵系統溢出，你必須即時監控這些情況，當然，勞動力的可用性也是一個驅動因素，我們在其他業務領域也看到許多相同的宏觀驅動因素，例如勞動力的可用性、關鍵的極端天氣事件的增加以及技術的採用。

It's one of the reasons we're excited about it's the same macro drivers similar outstanding outlook for growth and then the ability to sell that through our existing channel is is what has us pretty excited about it.

這是我們感到興奮的原因之一，相同的宏觀驅動因素，類似的出色成長前景，以及透過我們現有管道進行銷售的能力，讓我們對此感到非常興奮。

But I would say the drivers are very similar to what has driven our growth over the last several years.

但我想說，這些驅動因素與過去幾年推動我們成長的因素非常相似。

And I would say adding to that whole equation that Kenneth just mentioned is obviously the market opportunity, meaning the rate of adoption of this technology at this stage as we alluded to in the earnings script was a first inning analogy.

我想說，肯尼斯剛才提到的整個等式中顯然還有市場機會，這意味著，正如我們在收益腳本中提到的，現階段採用這項技術的速度是第一局的類比。

And so there's plenty of runway here in terms of the number of monitored manhole covers in North America.

因此，就北美監控井蓋的數量而言，這裡還有很大的發展空間。

And we believe the market leading position of smart cover positions us now to take advantage of that collectively across our leverage sales channel and customer base.

我們相信，智慧保護套的市場領先地位使我們能夠透過我們的槓桿銷售管道和客戶群共同利用這一優勢。

It's not just the regulation side, but when you can get into the reduction of the frequency of cleaning, there's financial payback.

這不僅僅是監管方面的問題，當你能夠減少清潔頻率時，就會產生財務回報。

So there's many benefits to this that are as Bob said, just really scratching the surface

因此，正如鮑勃所說，這樣做有很多好處，但這些好處只是表面

How much of the $35 million in trailing revenue would be recurring in nature?

3,500 萬美元的後續收入中有多少是經常性收入？

So from a pure kind of what I would classify as recurring revenues.

因此，從純粹的角度來說，我將其歸類為經常性收入。

So the software and and maintenance service business is roughly a third.

因此軟體和維護服務業務約佔三分之一。

I would say there's also another 20% or so that's more aftermarket product replacement service, which again is not recurring, but as a certain amount of durability to it.

我想說還有另外 20% 左右是售後產品更換服務，這同樣不是經常性的，但具有一定程度的耐用性。

May maybe just last question.

也許這只是最後一個問題。

Just shifting over to your, your business itself, you called out Bob.

剛剛轉移到你的，你的生意本身，你就叫了鮑伯。

The excellent working capital performance in the quarter.

本季營運資本表現優異。

I'm just, inventory did come down a fair amount from where it had been tracking through the year.

我只是說，庫存確實比去年同期下降了相當多。

Just, just curious what the enabler of that was.

只是好奇是什麼促成了這一切。

And I mean, is that a level that we should trend out as we go forward or does that come back up?

我的意思是，這是我們前進過程中應該趨向的水平嗎，還是會回升？

So I'll go first and I'm sure Bob will have something to add.

所以我先說，我相信鮑伯會有補充。

But what I've been proud about is for several years now, we've really talked about our continuous improvement mindset across the business.

但讓我感到自豪的是，幾年來，我們確實一直在談論整個業務的持續改進思維。

And we mentioned to you at the beginning of the year that we thought, inventory was still an opportunity for us to continue to improve our processes.

我們在年初就提到過，我們認為庫存仍然是我們繼續改進流程的機會。

And frankly, that's what we've seen.

坦白說，這就是我們所看到的。

We've had a great team working really hard at improving to get to a better sustainable rate that just happens to be lower.

我們擁有一支優秀的團隊，他們非常努力地改進，以實現更低的可持續利率。

Yeah, I would say that what you saw in the fourth quarter is the birac of multiple quarters of focus and thankfully for free cash flow purposes that all came together and lined up in the fourth quarter.

是的，我想說的是，您在第四季度看到的是多個季度的重點，幸運的是，對於自由現金流而言，所有這些都在第四季度匯聚在一起並排列好。

I would say there's nothing anomalistic about that.

我想說這沒有什麼異常。

We still know we need inventory to support the business and to support our high single digit growth outlook.

我們仍然知道我們需要庫存來支持業務並支持我們高個位數的成長前景。

So that's not to say that the dollars are fixed by any means, but certainly we're at an optimum level as we exit the year.

所以，這並不是說美元匯率已經固定了，但毫無疑問，在年底時美元匯率處於最佳水準。

Very good.

非常好。

I'll get back in the queue.

我會回到隊列中。

Our next question comes from Nathan Jones, Stifel.

下一個問題來自 Stifel 的 Nathan Jones。

Good morning everyone.

大家早安。

Start off, wanted to start off with a a question.

開始吧，想從一個問題開始。

Just a question about the cadence of revenue through through 2024.

我只是想問一下到 2024 年的收入節奏。

You did see revenue peak in the second quarter.

你確實看到第二季的收入達到高峰。

Sequentially, it was down in the third quarter and fourth quarter.

第三季和第四季則出現下滑。

I'm just hoping to get some color around, what the dynamics were there.

我只是希望了解一些情況，了解那裡的動態。

If customers were, buying some inventory or something in the second quarter or there were projects in shipments in the second quarter or whether it was bad in the fourth quarter or just anything that would help us set the bar for what that came through 2025 might look like.

如果客戶在第二季度購買了一些庫存或其他東西，或者第二季度有出貨項目，或者第四季度的情況不好，或者任何可以幫助我們為 2025 年的情況設定標準的事情。

Hey, Nathan.

嘿，內森。

So thanks for pointing out how we've always pointed out that the business can be uneven from quarter to quarter, from year to year.

因此，感謝您指出，我們一直強調，業務在不同季度、不同年份之間可能存在不均衡的情況。

In that particular quarter, you may recall, we talked about having, A bit of a deeper dive into our backlog than we traditionally have seen in most quarters, which is why we did caution to not just take that run rate for the rest of the year but I'm going to turn to Bob.

您可能還記得，在那個特定季度，我們談到了對我們的積壓訂單進行比傳統上大多數季度更深入的研究，這就是為什麼我們確實警告不要僅在今年剩餘時間內採用這種運行率，但我將轉向鮑勃。

I would say the only quarter that had if you're talking absolute dollars, Nathan, the only quarter that had some quote unquote noise in it would have been the second quarter.

內森，我想說，如果談論的是絕對美元，唯一一個出現「噪音」的季度就是第二季。

As Kenneth mentioned to, let's say everything else is more the a general trend and unevenness that Kenneth alluded to.

正如肯尼斯所提到的，我們可以說其他一切都更像是肯尼斯提到的整體趨勢和不平衡。

If you're talking about rates of growth change, I would say the biggest impact on the second half is just having lapped an anniversary to a more robust increase last year.

如果你談論的是成長率的變化，我想說對下半年最大的影響就是與去年更強勁的成長相差一週年。

So by just basic math, the rate of growth slows, I would just tell you that on a go forward basis over our strategic planning horizon, we're still laser focused in that high single digit growth with the reality that there will be noise, quarter to quarter and year to year.

因此，僅透過基本的數學計算，成長率就會放緩，我只想告訴你，在我們的策略規劃範圍內，我們仍然專注於高個位數成長，但現實是，每個季度和每年都會有噪音。

No, I was talking about the absolute dollars of revenues.

不，我說的是絕對收入金額。

So the two Q number is a little bit elevated because you're taking down some backlog.

因此，由於您正在減少一些積壓，因此兩個 Q 值略有升高。

That's probably just around supply chain improvements.

這可能只是圍繞供應鏈的改進。

I guess I had one on smart cover.

我想我有一個智慧封面。

Just when I look at this from a high level, you guys don't sell sewer pumps, why couldn't the sewer pump manufacturer just put, something on the sewer pump that would do this kind of monitoring?

我只是從高層來看，你們不賣下水道泵，為什麼下水道泵製造商不能在下水道泵上安裝一些可以進行這種監控的東西呢？

And I guess the question there is why does smart cover have the right to have 50% market share in that kind of business?

我想問題在於，為什麼智慧保護套有權在這種業務中佔 50% 的市場份額？

Why couldn't a competitor, somebody like a sew pump manufacturer, lift station manufacturer, put something similar on that would have them closer to the customer and maybe give them an advantage over a business like smart cover?

為什麼競爭對手，例如縫紉幫浦製造商、升降站製造商，不能推出類似產品，讓自己更貼近客戶，從而比智慧蓋子這樣的企業更具優勢呢？

So I'll start with, I think the underlying assumption of that question is that somehow we don't play in the collection network today or the sewer system network today.

因此，首先，我認為這個問題的基本假設是，不知何故，我們今天不參與收集網路或下水道系統網路。

And that's just not true.

但事實並非如此。

Certainly across CENX, teo ATI can more recent acquisitions.

當然，除了 CENX，ATI 還進行了更多最近的收購。

There is a certainly a presence in collection systems already.

在收集系統中已經存在了。

So this is not a fair way reach where we're reaching over to play in a space that we don't already play in.

所以這不是一個公平的擴張方式，我們要進入一個我們還沒有進入的領域。

So there's a presence there already.

因此那裡已經有一個存在了。

Today, I would say specific to smart cover and the sewer line aspect of that, essentially what we're doing here is monitoring at the manhole.

今天，我想具體談談智慧蓋板和下水道管線方面，本質上我們在這裡所做的就是對沙井進行監控。

So call it depth and level sensing and flow sensing from the manhole to essentially produce analytics to drive those four outcomes that we mentioned in the earnings release, that being prevention of spills, optimized, cleaning and predict infiltration and inflow as well as then monitor toxic gasses.

因此，我們可以將其稱為深度和水平感應以及來自沙井的流量感應，本質上是產生分析來推動我們在收益報告中提到的四個結果，即防止溢出，優化，清潔和預測滲透和流入以及監測有毒氣體。

So I would say I'm not sure that other people can't do it.

所以我想說我不確定其他人做不到。

I can just tell you that after 20 years in the marketplace, smart cover has done it best.

我只能告訴你，經過20年的市場歷練，智慧封面已經做到最好了。

And that's why this is the most attractive asset in terms of expanding our presence in the collection network.

這就是為什麼這是擴大我們在收集網路中的影響力最具吸引力的資產。

And we're super about the ability to leverage that technology to in large part, a similar decision maker at the North American utilities that we've already participated for a very long time.

我們非常有能力利用這項技術，在很大程度上，為我們已經參與了很長時間的北美公用事業公司的類似決策者提供幫助。

With this is the definition of a near adjacency that brings greater scope and scale to not only our hardware solutions but our software solutions to integrate as a critical data analytics and solution provider to utilities in North America and the rest of the world.

這就是近鄰的定義，它不僅為我們的硬體解決方案帶來了更大的範圍和規模，也為我們的軟體解決方案帶來了更大的範圍和規模，使我們成為北美和世界其他地區公用事業的關鍵數據分析和解決方案提供商。

And if I could add to that, Nathan compared to the people that you're referencing, which of course, we spent a lot of time understanding who's in this space and who could be.

如果我可以補充一點的話，內森與你提到的人相比，當然，我們花了很多時間去了解誰在這個領域以及誰可能在這個領域。

No one will have the opportunity with our core competency around communications and software to be able to build on this, the way that we already have with our beacon portfolio and am and what we've done with radar and, and the other software and communications products and services we already have.

沒有人有機會利用我們在通訊和軟體方面的核心競爭力來在此基礎上進行構建，就像我們在信標產品組合和 AM 方面所做的那樣，以及我們在雷達方面所做的那樣，以及我們已經擁有的其他軟體和通訊產品和服務。

And while we're certainly talking a lot about sewer monitors and sorry, I just want to make sure we didn't leave out of that answer was very focused on sewer line monitoring.

雖然我們確實在談論很多有關下水道監測器的事情，但抱歉，我只是想確保我們沒有遺漏這個答案，重點是下水道管道監測。

There's a big part of this business that's at the lift station.

這項業務的很大一部分是在升降站進行的。

And again, similar to my earlier answer, we already play at the lift station in many respects in those same technologies.

再次，與我先前的回答類似，我們已經在升降站的許多方面運用了同樣的技術。

And so it's absolutely a perfect marriage between the sewer, sewer line and lift station monitoring to collectively address not just the sewer but the full collection system.

因此，這絕對是下水道、下水道管線和升水站監控之間的完美結合，不僅能解決下水道問題，還能解決整個收集系統的問題。

Thanks for that, I guess one final one high single digit EBITDA margins.

謝謝，我想最後一個高個位數的 EBITDA 利潤率。

Obviously, it's a pretty small business at the moment and you talked about investing for growth and things like that.

顯然，目前它還是一家很小的企業，而您談到了為成長而進行的投資之類的事情。

This would seem like a business that scale should have significantly higher margins than where it is today.

看起來，規模較大的企業的利潤率應該比現在高很多。

Maybe if you look at, I don't know how long you want to look out five or 10 years.

也許如果你看一下，我不知道你想看五年或十年多久。

Where do you think the margins for this business could get to?

您認為這項業務的利潤可以達到多少？

So you've hit the nail on the head at acquisition here, it is an EBITA margin profile less than our core, I would say in large part, the strategy under XPVs ownership to date was to position for growth.

所以，你在這次收購中一針見血，它的 EBITA 利潤率低於我們的核心利潤率，我想說，在很大程度上，迄今為止，XPV 所有權下的策略是為了成長。

And so there's been a heavier investment in SEA and that's why we talk about in the script on a go forward basis.

因此，我們在東南亞地區的投資加大了，這也是我們在劇本中討論前進的基礎的原因。

Whereas we've been leveraging SEA or levering SEA over time, there's probably a temporary step back here in 2025 as we bring in this $35 million of revenue with higher than outlying average SEE.

儘管我們一直在利用 SEA，或者說隨著時間的推移利用 SEA，但在 2025 年，當我們獲得 3500 萬美元的收入且 SEE 高於平均水平時，可能就會出現暫時的倒退。

But we think that through kind of the growth synergies and bringing our channel to bear, we can take what's already a great organically growing business in the double digit range and augment that and make it grow faster.

但我們認為，透過某種成長協同效應並發揮我們通路的作用，我們可以將已經實現兩位數有機成長的業務進一步增強，使其成長更快。

And similarly, as Kenneth alluded to, we can bring to bear larger corporate functions, whether it's around supply chain engineering costs down and other things to essentially increase the profitability.

同樣，正如肯尼斯所提到的，我們可以發揮更大的企業職能，無論是圍繞降低供應鏈工程成本還是其他方面，從本質上提高盈利能力。

So as we look out, we certainly think this is a business that has a well above line average EBITA margins compared to where we operate on a core business today.

因此，當我們觀察時，我們確實認為，與我們目前的核心業務相比，這項業務的 EBITA 利潤率遠高於平均水平。

Awesome.

驚人的。

Thanks for taking my questions.

感謝您回答我的問題。

(Operator instructions)

（操作員指令）

We'll move to our next question from Scott Graham, Seaport Research Partners.

我們將轉到 Seaport Research Partners 的 Scott Graham 提出的下一個問題。

Hi, good morning.

嗨，早安。

I wanted to understand a little bit more about how you're deploying backlog.

我想進一步了解您如何部署積壓工作。

I know you said you had a little bit extra juice in the second quarter of last year because of some backlog.

我知道您說過，由於一些積壓訂單，去年第二季您的業務稍微有點額外繁忙。

A deployment.

一次部署。

I'm just wondering as you look at, sort of your orders and excluding the second quarter, your backlog and how that ran through what that dynamic was.

我只是想知道，當您查看您的訂單並排除第二季度之外時，您的積壓訂單以及其運行情況如何。

Are, are you seeing any, sort of unevenness, are there an unusually higher number of either faster than expected, slower than expected deployments or has that been kind of fairly normal for you again away from that two Q?

您是否看到任何不平衡現象，是否有異常多的部署速度比預期快或比預期慢的情況，或者這對您來說是否相當正常，除了這兩個問題？

Hi Scott.

你好，斯科特。

So with 50,000 utilities of various scales and sizes, it's always difficult from one quarter to the next or one year to the next to really predict what that replacement cycle can be, which is why we're always feeling like reminding people of the unevenness is the prudent thing to do.

因此，對於 50,000 個規模和規模各異的公用設施來說，很難真正預測一個季度到下個季度或一年到下一年的更換週期，這就是為什麼我們總是覺得提醒人們注意不平衡是明智之舉。

So what we're seeing in terms of a backlog and how order rates are flowing through, I would say is very normal and, again, it's not like we're, digesting big chunks and trying to get in another big chunk, with 45,000 small utilities, 4,500 mediums, 500 larges, it just kind of flows in and in what I would call a normalized uneven but exciting pattern.

因此，就積壓訂單量和訂單率的流動情況而言，我認為這是非常正常的，而且，這並不意味著我們正在消化大塊訂單，然後試圖獲得另一個大塊訂單，我們有 45,000 個小型公用事業公司、4,500 個中型公用事業公司和 500 個大型公用事業公司，這些訂單只是流入，我稱之為正常化的不平衡但令人興奮的模式。

Understood.

明白了。

Thank you.

謝謝。

Now, I'm sure your customers, they've obviously had ample time to digest the results of the election.

現在，我相信您的客戶顯然​​已經有充足的時間來消化選舉結果。

And are, are you hearing them to talk about any pauses in deployments or even ordering patterns?

您是否聽到他們談論部署中的任何暫停或甚至訂購模式？

I know you said that you were pleased with your fourth quarter orders, with regard to, sort of from 2.0 and the potential for some regulatory rollbacks?

我知道您說過對第四季的訂單感到滿意，例如 2.0 版以及一些監管回溯的可能性？

So we're not hearing any change in tone at all.

所以我們根本沒有聽到任何語氣的變化。

So keeping in mind that, 75% of our revenue sells directly, we talk directly to customers and we get a feel for that for that dynamic probably sooner than most people.

因此請記住，我們 75% 的收入來自直接銷售，我們直接與客戶交談，我們可能比大多數人更早感受到這種動態。

I've recently been with our distributors who are all feeling as excited about next year as they've been about previous years in the out phases.

我最近和我們的經銷商在一起，他們對明年感到興奮，就像他們對前幾年的結束階段一樣。

So I'm very confident that if there were discussions or talks about utilities pulling back, we would be the first to know.

因此，我非常有信心，如果有關於公用事業撤資的討論或談話，我們會第一個知道。

I think if your question is specific to a pause or a temporary slowdown in government funding or infrastructure spend.

我認為如果你的問題具體是指政府資金或基礎建設支出的暫停或暫時放緩。

If you listen to anything we've talked about over the last three years about a reliance on infrastructure money, it's just not there in the Metering space quite frankly.

如果您聽過我們過去三年談論過的有關依賴基礎設施資金的話題，坦白說，計量領域並不存在這種資金依賴。

And so if that's the question angle here, I would say certainly historically, we've seen very little benefit from that money flowing to the market and a pause wouldn't necessarily have any immediate impact on us.

因此，如果這是問題的角度，我想說，從歷史上看，我們從資金流入市場中看到的好處很少，而暫停並不一定會對我們產生任​​何直接影響。

No, I mean, I'm talking about regulations perhaps more broadly not necessarily the infrastructure related.

不，我的意思是，我談論的可能是更廣泛的法規，不一定與基礎設施相關。

But thank you for that, I just have one more question in strategic relative to smart cover.

但還是感謝您，我還有一個關於智慧封面策略的問題。

Is there an opportunity to take your sort of digital product line?

是否有機會推廣您的數位產品線？

And the competency is there and the advantage is there to smart cover or vice versa?

並且能力和優勢都在那裡，智能覆蓋還是反之亦然？

And by extension is there, can you start to so maybe more like a a larger solution this year under contract that you do with your AMI like you do with your AMI?

並且從延伸上講，您是否可以開始在今年根據合約制定一個更大的解決方案，就像您與 AMI 合作一樣？

So this is one of the reasons last year, we started talking about the blue edge portfolio because yes, whether that's all in one package or whether that's a utility that plans out the next three to five years on how they want to implement their technologies and manage their budgets.

所以這是去年我們開始談論藍色邊緣投資組合的原因之一，因為是的，無論它是一體化方案還是一個公用事業，規劃未來三到五年如何實施他們的技術和管理他們的預算。

We clearly see the opportunity to bundle sell even if that bundle isn't immediate.

我們清楚地看到了捆綁銷售的機會，即使這種捆綁不是立即的。

Again, we think about our utility customers and 5,1020 year cycles.

再次，我們考慮我們的公用事業客戶和5,1020年的週期。

So this fits squarely in the ability to sell more to customers we already sell to.

所以這完全符合我們向已有客戶銷售更多產品的能力。

And your question, what the software and the things that we can do.

您的問題是，我們可以使用什麼軟體以及做什麼。

One of the things we like about smart cover is they're already a really strong company that just needs to grow as we talked about.

我們喜歡 Smart Cover 的其中一個原因是，正如我們所說，他們已經是一家非常強大的公司，只需要進一步發展。

So it isn't no way a fixer upper.

所以它絕對不是一間需要修繕的房子。

So it's got a strong management team.

因此它擁有一支強大的管理團隊。

It's been run well and it's just as we talked about a bit subscale.

它運行得很好，正如我們所說的，有點規模小。

So I think we can help that with our cross sales leverage.

所以我認為我們可以利用交叉銷售槓桿來幫助實現這一目標。

I think we can enable that with some operational improvements.

我認為我們可以透過一些操作改進來實現這一點。

And I think we're really excited about it as I'm sure you can tell from the commentary and everything that goes with it.

我認為我們對此感到非常興奮，我相信您可以從評論和隨之而來的一切中看出來。

But being able to pick up both as Bob pointed out sewer line monitoring and lift station enhancements in one transaction was really attractive to us.

但正如鮑勃所指出的那樣，能夠在一次交易中同時獲得下水道管線監控和升水站增強功能對我們來說確實很有吸引力。

Thank you for all that.

謝謝你所做的一切。

I appreciate it.

我很感激。

If I can just sneak this last one in.

如果我可以偷偷把這最後一個放進去的話。

Do you have a view on whether this will be modestly accretive, dilutive to earnings this year?

您是否認為這是否會適度增加或稀釋今年的收益？

So in the short term, when you factor in the opportunity cost on the interest, we're saying for 2025 it is EPS dilutive and that it turns to accretion in year two and that's, that's really where we're at.

因此，在短期內，當你考慮到利息的機會成本時，我們會說到 2025 年，它將稀釋每股收益，並在第二年轉向增值，這就是我們目前的狀況。

Very good.

非常好。

Thanks a lot.

多謝。

We have no further questions.

我們沒有其他問題了。

So I'll pass you back to Karen Bauer for any closing comments.

因此我將把您交還給 Karen Bauer，請他發表最後評論。

Great.

偉大的。

Thanks operator.

謝謝接線生。

Bob referenced this earlier, but I did want to call your attention to the slide in the appendix where you'll find the historic primary working capital recast for the pro forma balance sheet reclassification we did on the current portion of deferred revenue.

鮑伯之前提到過這一點，但我確實想請你注意附錄中的幻燈片，在那裡你會找到我們對遞延收入的當前部分進行的預測資產負債表重新分類的歷史主要營運資本重鑄。

So we've reclassified this data element from accounts payable to other current liabilities beginning in Q4 2024 and going forward.

因此，從 2024 年第四季開始，我們將該資料元素從應付帳款重新分類為其他流動負債。

So as you can see on the slide, while the general trajectory of PWC improvement remains, there is a slight difference in absolute PWC as a percent of sales as noted on those charts in the appendix.

因此，正如您在投影片上看到的，雖然 PWC 改善的整體軌跡保持不變，但絕對 PWC 佔銷售額的百分比略有不同，如附錄中的圖表所示。

So this reclassification does not change in any way, cash from operations or free cash flow.

因此，這種重新分類不會改變任何經營活動現金流或自由現金流。

And then in closing, thanks for joining our call today for your planning purposes.

最後，感謝您今天參加我們關於規劃目的的電話會議。

Our first quarter, 2025 call and my last at the home of IR here at Badger Meter with my retirement in early May is tentatively scheduled for April 17th.

由於我將於 5 月初退休，所以我們暫定於 2025 年第一季的電話會議和我在 Badger Meter 的 IR 總部的最後一次電話會議於 4 月 17 日舉行。

Please don't hesitate to reach out with any questions you might have.

如有任何疑問，請隨時與我們聯繫。

Have a great day.

祝你有美好的一天。

Thank you.

謝謝。

This concludes today's call.

今天的電話會議到此結束。

Thank you very much for joining you.

非常感謝您的加入。

May now disconnect your line.

現在可以斷開您的線路了。