Badger Meter Inc (BMI) 2025 Q1 法說會逐字稿

Ladies and gentlemen, welcome to the Q1 2025 Badger Meter earnings conference call. (Operator Instructions) As a reminder, today's conference is being recorded.

女士們，先生們，歡迎參加 2025 年第一季 Badger Meter 收益電話會議。（操作員指示）提醒一下，今天的會議正在被錄音。

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交給投資者關係、企業策略和財務主管副總裁 Karen Bauer。請繼續，鮑爾女士。

Thank you. Good morning. Thanks for joining us for Badger Meter's first quarter 2025 earnings conference call and the 72nd and last quarterly earnings call for me ever with my May 2 retirement date now is two short weeks of late. Joining me on the call today are Ken Bockhorst, Chairman, President and Chief Executive Officer; Bob Wrocklage, Chief Financial Officer; and Barb Noverini, Senior Director of Investor Relations. Please note that the earnings release and related slide presentation are available on our website.

謝謝。早安.感謝您參加 Badger Meter 2025 年第一季財報電話會議，這是我有史以來第 72 次也是最後一次季度財報電話會議，我的退休日期是 5 月 2 日，現在已經晚了短短兩週。今天與我一起參加電話會議的還有董事長、總裁兼首席執行官 Ken Bockhorst；鮑勃·沃洛克拉格 (Bob Wrocklage)，首席財務官；以及投資者關係高級總監 Barb Noverini。請注意，收益報告和相關投影片簡報可在我們的網站上查閱。

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 the call, we will refer to certain non-GAAP financial metrics. Our earnings slides provide a reconciliation of the GAAP to non-GAAP financial metrics SKUs.

很快，我將介紹安全港，提醒您，本次電話會議中做出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，其中最重要的風險和不確定性已在我們的新聞稿和美國證券交易委員會文件中概述。在電話會議中，我們將參考某些非公認會計準則財務指標。我們的收益幻燈片提供了 GAAP 與非 GAAP 財務指標 SKU 的對帳。

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

說完這些，我會把電話轉給肯。

Thanks, Karen, and thank you all for joining our call. I'm pleased with our start to the year with another quarter of solid revenue growth, record operating margins and robust earnings per share improvement, which continues to reflect the durable drivers supporting water industry technology adoption.

謝謝，凱倫，也謝謝大家參加我們的電話會議。我很高興看到我們今年又一個季度實現了穩健的收入成長、創紀錄的營業利潤率和強勁的每股盈餘成長，這繼續反映了支持水產業技術採用的持久驅動力。

Our results now include SmartCover following completion of the acquisition in late January. Since then, we've been onboarding our new colleagues and setting common goals to capture the many opportunities we have to drive sales and operating synergies. We've heard strong positive feedback on our combination from many customers who recognize the value of adding SmartCover sewer and elicitation monitoring capabilities to our BlueEdge suite of water management solutions.

自 1 月底完成收購以來，我們的業績現已包括 SmartCover。從那時起，我們就一直在招募新同事並設定共同目標，以抓住推動銷售和營運協同效應的眾多機會。我們從許多客戶那裡聽到了對我們組合的強烈正面回饋，他們認識到在我們的 BlueEdge 水管理解決方案套件中添加 SmartCover 下水道和引水監測功能的價值。

I'll be back to provide our outlook later in the call, in which you might expect will also include a discussion about tariffs. But for now, I'll turn it over to Bob to go through the details of the quarter.

我稍後會在電話會議中提供我們的展望，您可能還會預料到其中還會包括有關關稅的討論。但現在，我將把話題交給鮑伯來介紹本季的細節。

Thanks, Ken, and good morning, everyone. Turning to slide 4. We delivered strong operating performance across the board with our key financial metrics demonstrating solid improvement in the quarter. Total sales grew 13% year-over-year in the first quarter of 2025. Excluding SmartCover, sales increased 10%, which, as a reminder, was on top of 23% growth in the fourth quarter -- first quarter of last year. Total utility water product line sales increased 16% year-over-year or 12% when excluding just over $6 million of SmartCover revenue for the two months since acquisition.

謝謝，肯，大家早安。翻到幻燈片 4。我們全面實現了強勁的營運業績，本季主要財務指標均顯著改善。2025 年第一季總銷售額年增 13%。不包括 SmartCover，銷售額成長了 10%，值得一提的是，這是在去年第四季（即第一季）23% 的成長基礎上的。公用事業水產品線總銷售額年增 16%，若不計收購以來兩個月內略高於 600 萬美元的 SmartCover 收入，則成長 12%。

Year-over-year growth in utility water was again led by cellular AMI adoption, including associated meters, ORION cellular endpoints and BEACON software. Sales for the flow instrumentation product lines decreased nearly 5% year-over-year as lower demand in the deemphasized array of market applications offset modest growth in water-related end markets. However, flow instrumentation sales did show sequential improvement of 7% growth from the fourth quarter of 2024.

公用事業用水的同比增長再次由蜂窩 AMI 的採用所推動，包括相關儀表、ORION 蜂窩端點和 BEACON 軟體。流量儀表產品線的銷售額年減近 5%，因為市場應用領域需求的下降抵消了與水相關的終端市場的溫和成長。不過，流量儀表銷售額從 2024 年第四季起確實出現了 7% 的連續成長。

Turning to margins. We were particularly pleased with the record operating profit margins in the quarter of 22.2%, expanding 360 basis points year-over-year. Gross profit margins came in at 42.9%, a 360 basis point improvement from 39.3% in the prior year comparable quarter and above our normalized gross margin range of 38% to 40%. As we've said in the past, customer and product mix can and does vary quarter-to-quarter with this being an especially favorable example in nearly all respects of a positive sales mix scenario.

轉向利潤。我們對本季創紀錄的 22.2% 的營業利潤率感到特別高興，該利潤率同比增長 360 個基點。毛利率達到 42.9%，較去年同期的 39.3% 提高了 360 個基點，高於我們 38% 至 40% 的正常毛利率範圍。正如我們過去所說的那樣，客戶和產品組合可以而且確實會逐季度變化，這是幾乎所有方面都積極的銷售組合情景的一個特別有利的例子。

For example, the first quarter benefited from a particularly attractive combination of customer mix overall. From a product mix standpoint, software was the top revenue growth contributor, up 25% in the quarter. Similar to the sales unevenness we often discuss. We have variations in gross margins in the short term from various mix elements. While we certainly expect structural sales mix improvements to continue over time, the 42.9% gross margin outcome in the first quarter was a perfect combination of nearly all elements contributing favorably.

例如，第一季整體受益於特別有吸引力的客戶組合。從產品組合的角度來看，軟體是營收成長的最大貢獻者，本季成長了 25%。類似於我們經常討論的銷售不均衡。由於各種混合因素的影響，短期內我們的毛利率有差異。雖然我們當然預期結構性銷售組合的改善將隨著時間的推移而持續，但第一季 42.9% 的毛利率結果幾乎是所有有利因素的完美組合。

At the same time, there remains significant uncertainty surrounding the evolving tariff and turbulent macroeconomic situation. Ken will walk through our manufacturing footprint and supply chain exposures to tariffs as well as our mitigation actions later in the call. In short, we don't believe it is prudent at this time to guide to a higher range for gross margin performance, yet we remain confident in our normalized gross margin range of 38% to 40%, assuming no further changes in global economic and trade policies.

同時，關稅變化和宏觀經濟情勢動盪仍存在很大的不確定性。Ken 將在稍後的電話會議中介紹我們的製造足跡和供應鏈對關稅的影響以及我們的緩解措施。簡而言之，我們認為目前引導更高的毛利率表現範圍並不明智，但假設全球經濟和貿易政策沒有進一步變化，我們仍然對 38％至 40％的正常化毛利率範圍充滿信心。

SEA expenses increased by $5.4 million or 13% year-over-year to $46 million in the first quarter. The increase included approximately $1.1 million of intangible asset amortization from the SmartCover acquisition, which on a two month basis is in line with our previously communicated expectation of $6 million to $7 million annually. Excluding SmartCover, SEA expenses increased by $2.2 million or 5%. SEA as a percent of sales was 20.7% in the first quarter or flat year-over-year. Excluding SmartCover, SEA as a percent of sales would have declined a pro forma 90 basis points year-over-year.

第一季度，SEA 支出年增 540 萬美元（13%），達到 4,600 萬美元。此次成長包括收購 SmartCover 所產生的約 110 萬美元的無形資產攤銷，以兩個月計算，這與我們先前傳達的每年 600 萬至 700 萬美元的預期相符。不包括 SmartCover，SEA 費用增加了 220 萬美元，即 5%。第一季東南亞銷售額佔比為 20.7%，與去年同期持平。不包括 SmartCover，SEA 佔銷售額的百分比將年減 90 個基點。

The income tax provision increased modestly to 24.4% in the first quarter of 2025 from 23.5% in the comparable prior year period. This remains consistent with our previously discussed 25% tax rate assumption.

2025 年第一季度，所得稅準備金從去年同期的 23.5% 小幅上升至 24.4%。這與我們之前討論的 25% 稅率假設一致。

In summary, our strong operating results in the first quarter drove a 31% increase in consolidated EPS to $1.30 from $0.99 in the prior year comparable quarter. Primary working capital as a percent of sales increased from 20.8% at year-end to 22% as of March 31, 2025, inclusive of SmartCover. We generated strong free cash flow in the quarter of $30 million, up 60% from $18.8 million in last year's comparative quarter. As is normal, our first quarter reflected typical seasonality with incentive compensation and retirement plan contributions paid out for the respective previous year.

總而言之，我們第一季強勁的經營業績推動合併每股收益從去年同期的 0.99 美元成長 31% 至 1.30 美元。包括 SmartCover 在內的主要營運資本佔銷售額的百分比從年底的 20.8% 增加到 2025 年 3 月 31 日的 22%。我們本季產生了強勁的自由現金流，達到 3,000 萬美元，比去年同期的 1,880 萬美元成長了 60%。像往常一樣，我們的第一季反映了典型的季節性，即支付了上一年相應的激勵薪酬和退休計劃供款。

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

說完這些，我就把電話轉回給肯。

Thanks, Bob. Turning to slide 5 on the topic of the tariffs. As we've seen play out over the past several weeks, what we know for sure is that uncertainty and volatility in the tariff picture remains likely. The key takeaway for Badger Meter is that we will adeptly manage what is in our control, just as we've gone through COVID, supply chain disruptions, inflation and other challenging macro dynamics that we faced over the past five plus years.

謝謝，鮑伯。翻到投影片 5，討論關稅問題。正如我們過去幾週看到的情況一樣，我們可以肯定的是，關稅狀況的不確定性和波動性仍然存在。Badger Meter 的關鍵收穫是，我們將巧妙地管理我們能夠控制的事情，就像我們在過去五年多的時間裡經歷的 COVID、供應鏈中斷、通貨膨脹和其他具有挑戰性的宏觀動態一樣。

With that in mind, I'll walk you through our status given the current set of circumstances. As many of you know, we operate a world-class assembly facility in Nogales, Mexico which we're proud to say, celebrated its 45th birthday last week. The facility is in maquiladora, which essentially acts as an extension of our US operations on Mexican soil. It's the primary assembly site for our residential meters and radios, the vast majority of which qualify for exception from tariffs under the USMCA.

考慮到這一點，我將向您介紹我們當前情況下的狀況。眾所周知，我們在墨西哥諾加萊斯經營著一家世界一流的組裝廠，我們很自豪地說，該組裝廠上週慶祝了其成立 45 週年。該設施位於加工廠，本質上是我們美國業務在墨西哥領土上的延伸。它是我們家用電錶和收音機的主要組裝地點，其中絕大多數符合 USMCA 規定的關稅豁免條件。

The component coming into this Mexico facility for assembly originate from a wide range of countries, and we will continue to manage component sourcing into Mexico, which limits our exposures to a certain degree.

進入該墨西哥工廠進行組裝的零件來自多個國家，我們將繼續管理墨西哥的零件採購，這在一定程度上限制了我們的風險敞口。

For our US-based manufacturing facilities, including our Buy America Build America compliant assembly line, we could face import tariff exposure on electronics and related components from China, Southeast Asia and Israel, among others. This means that US manufactured products are likely to face higher tariff-related input costs under the structure is currently in place.

對於我們位於美國的製造工廠，包括符合「購買美國產品，建造美國產品」標準的裝配線，我們可能面臨來自中國、東南亞和以色列等地的電子產品和相關零件的進口關稅風險。這意味著，在現行結構下，美國製造的產品可能面臨更高的關稅相關投入成本。

We will institute targeted pricing offsets to manage this potential impact. We could also face tariffs on the finished goods we import from our European manufacturing facilities, which produce certain flow instrumentation and water quality products for sale in the US. This represents a relatively small percentage of Badger Meter's overall sales, but targeted pricing actions may also be required for these products.

我們將制定有針對性的定價抵銷措施來管理這種潛在影響。我們從歐洲製造工廠進口的成品也可能面臨關稅，這些工廠生產某些流量儀表和水質產品銷往美國。這佔 Badger Meter 整體銷售的比例相對較小，但這些產品也可能需要採取有針對性的定價措施。

Finally, let me share an example of the knock-on effect of the tariffs that may not be as obvious from the headlines. China has implemented export controls on certain chemical and rare earth elements as part of its response to US tariff actions. Bismuth is an element that's included in the supply restrictions. While bismuth happens to be a small component of our brass I get recipe, the prices increased nearly tenfold since early this year.

最後，讓我分享一個關稅連鎖反應的例子，這個例子可能在新聞標題中不太明顯。作為對美國關稅行動的回應，中國對某些化學品和稀土元素實施了出口管制。鉍是受到供應限制的元素之一。雖然鉍只是我們黃銅配方中的一小部分成分，但自今年年初以來，其價格上漲了近十倍。

China produces 90%-plus of the bismuth in the world, a pivot away from bismuth and the recipe is not possible in the short term and strategic sourcing initiatives won't help reduce the cost of a supplier restricted rare element. We will therefore need to adjust pricing accordingly.

中國生產了全球 90% 以上的鉍，短期內不可能擺脫鉍的供應，而策略採購措施也無助於降低供應商受限稀有元素的成本。因此我們需要相應地調整價格。

Obviously, copper makes up a far greater percentage of the recipe. And while copper prices have been volatile, current pricing is only modestly higher than it was at the beginning of the year. We will continue to watch this closely as we always do. All told, we believe there's a level playing field competitively for these targeted mitigation actions.

顯然，銅在配方中所佔的比例要大得多。儘管銅價一直波動，但目前的價格僅略高於年初的價格。我們將一如既往地密切關注此事。總而言之，我們相信這些有針對性的緩解行動具有公平的競爭環境。

As Bob mentioned earlier in his remarks on margins, the gross margin we delivered this quarter demonstrates that the structural mix benefit of technology adoption within our business is real. Yet the various cost pressures and let the impact of mitigation actions from the tariff situation that informed our decision to maintain our normalized margin -- normalized gross margin range at least for now.

正如鮑勃之前在關於利潤率的評論中提到的那樣，我們本季的毛利率表明，我們業務中採用技術的結構組合效益是真實存在的。然而，各種成本壓力和關稅情勢緩解措施的影響促使我們決定維持正常利潤率——至少目前維持正常毛利率範圍。

Turning now to our outlook. We have a proven history of differentiated operational execution, and we'll continue to focus on controlling what we can control in a turbulent economic environment, particularly in the management of our supply chain manufacturing footprint and value-based pricing strategy. Our first quarter results demonstrate the resilience and durability of our replacement-driven business.

現在談談我們的展望。我們在差異化營運執行方面有著良好的記錄，我們將繼續專注於在動盪的經濟環境中控制我們能夠控制的事情，特別是在管理我們的供應鏈製造足跡和基於價值的定價策略方面。我們第一季的業績證明了我們替代驅動業務的彈性和持久性。

As previously communicated, the second quarter represents our most difficult prior year comparison, and we've already walked through some of the puts and takes we have on the margin side, especially in the near term as we navigate the evolving tariff situation. Nevertheless, the attractive fundamentals of the water industry and the growing extensibility of our BlueEdge suite of solutions, which now includes sewer and lift station monitoring with the acquisition of SmartCover, continue to support a long-term average revenue growth outlook of high single digits and modest margin improvement over time.

正如之前所傳達的，第二季度是我們與去年同期相比最困難的季度，我們已經了解了利潤方面的一些利弊，特別是在短期內，隨著我們應對不斷變化的關稅形勢。儘管如此，水務行業具有吸引力的基本面以及我們的 BlueEdge 解決方案套件日益增強的可擴展性（透過收購 SmartCover，現在包括下水道和升降站監控），將繼續支持長期平均收入以高個位數增長的前景和隨著時間的推移利潤率的適度提高。

Even after the SmartCover acquisition, we have available cash, continue to generate strong free cash flow and remain debt-free. Our balance sheet has ample capacity to invest in both organic and inorganic growth while we continue to work our way through any further macroeconomic volatility. We were proud to be named the Barron's list of 100 most sustainable companies for the third year in a row. We think very seriously our role in protecting the world's most precious resource and believe this responsibility aligns with the creation of shareholder value over the long term.

即使在收購 SmartCover 之後，我們仍然擁有可用現金，繼續產生強勁的自由現金流並且沒有債務。我們的資產負債表有足夠的能力投資於有機和無機成長，同時我們將繼續努力應對任何進一步的宏觀經濟波動。我們很榮幸連續第三年被《巴倫周刊》評為 100 家最具永續發展能力的公司之一。我們非常重視我們在保護世界上最寶貴的資源方面所扮演的角色，並相信這項責任與長期創造股東價值是一致的。

Finally, as you heard from Karen earlier in the call, this is the last earnings call for illustrious career in Investor Relations spanning 72 quarters. I know I speak for Bob as well when I say that we have been proud to have her with us here at Badger Meter for the last 26 of those quarters. Moving into our first roles as public company CEO and CFO, we knew this is important to have an accomplished professional with us that could help create and drive a successful strategy, deliver clear messaging that employees and investors alike to rally around and who also happens to be a great person to work with.

最後，正如您在電話會議早些時候聽到的，這是凱倫在投資者關係領域長達 72 個季度的輝煌職業生涯的最後一次收益電話會議。我知道，當我說我們很榮幸在過去的 26 個季度裡她一直和我們一起在 Badger Meter 工作時，我也代表鮑勃說了這句話。在擔任上市公司執行長和財務長的第一個職位時，我們知道擁有一位成功的專業人士非常重要，他可以幫助制定和推動成功的策略，傳遞清晰的信息，讓員工和投資者團結起來，同時也是一位非常好的工作夥伴。

The only choice for us was Karen. While she will be missed by all who work with her, we are all happy for her to begin the next chapter of her life after leaving a great legacy behind here. Equally, we're excited for Barb to step into the role officially and put her own mark on things moving forward.

對我們來說，唯一的選擇就是凱倫。所有與她共事的人都會懷念她，但我們都為她在這裡留下偉大遺產後開啟人生的新篇章感到高興。同樣，我們很高興 Barb 能夠正式擔任這一職務，並在未來的發展中留下自己的印記。

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

接線員，請打開熱線來回答問題。

That was not in the first slide prepared remarks. Thank you.

第一張投影片中沒有準備好的發言稿。謝謝。

(Operator Instructions)

（操作員指示）

Andrew Krill, Deutsche Bank.

德意志銀行的安德魯·克里爾。

And congratz to Karen on your retirement. I was hoping -- I want to ask or just any more color you can provide on the especially favorable product customer mix benefits. Now you called out SaaS growth, but just anything else would be helpful because the margins are just so outsized and impressive. And then secondly, if we were to in the tariff backdrop was somewhat stable from here, should we be expecting gross margins to moderate all the way back to the 38% to 40% range in 2Q? Or is this more of like a worst-case scenario?

並恭喜凱倫退休。我希望——我想問一下，或者您能否提供更多關於特別有利的產品客戶組合利益的詳細資訊。現在您提到了 SaaS 的成長，但其他任何事情都會有幫助，因為利潤率是如此巨大且令人印象深刻。其次，如果我們在關稅背景下從現在開始保持穩定，我們是否應該預期毛利率會在第二季一路回落至 38％至 40％的範圍內？或者這更像是一種最壞的情況？

Yes. So obviously, quite a bit to unpack there and in this pretty uncertain environment. The one thing that I think everyone should be excited about is that even in this really crazy environment, we feel really strong about the flow of our margins, which we've talked about for years now about the durability and the realness of the positive structural mix.

是的。顯然，在這種相當不確定的環境中，有很多事情需要解決。我認為每個人都應該感到興奮的一件事是，即使在這個非常瘋狂的環境中，我們仍然對利潤的流動感到非常強勁，多年來我們一直在談論積極的結構組合的持久性和真實性。

So going forward, we certainly expect that in a tariff situation that we consider -- that we currently consider manageable. We feel like we're in pretty good shape going forward. I'll let Bob give any more detail on some of the mix and some of the particularly favorable things. But overall, I feel great about the ability to manage and the state of the business.

因此，展望未來，我們當然預計，在我們目前認為可控的關稅情況下。我們感覺我們未來的狀態非常好。我會讓鮑伯更詳細地介紹一些組合和一些特別有利的事情。但總體而言，我對管理能力和業務狀況感到非常滿意。

Yes. Hopefully, you can tell from the prepared remarks that essentially, a lot of things went in our favor in the first quarter. And so while we're absolutely proud of the result, we're in this tenuous or uncomfortable position of almost apologizing for that great margin against the backdrop of potentially increasing input costs, particularly which in the short term, the mitigation actions that we talked about can't be implemented immediately, right?

是的。希望您能從準備好的發言中看出，第一季有很多事情對我們有利。因此，雖然我們對結果感到非常自豪，但在投入成本可能增加的背景下，我們處於這種脆弱或不舒服的境地，幾乎要為如此大的利潤道歉，特別是在短期內，我們談到的緩解措施無法立即實施，對嗎？

They have -- they can be implemented immediately, but the effect will lag essentially the input cost increase, which is nearer medium. And so that's a long way of saying there are certainly aspects of what drove the outcome and Q1, the 42.9% gross margin that are durable and will sustain. And there are elements that are more episodic and or mix specific or customer specific that we can't expect to happen each and every quarter.

它們可以立即實施，但效果基本上將落後於投入成本的增加，而投入成本的增加更接近中等水準。所以，從長遠來看，肯定存在一些因素推動第一季的業績，而且 42.9% 的毛利率是持久的，並且將持續下去。還有一些因素更具偶然性，或針對特定組合或針對特定客戶，我們不能指望這些因素每季都會發生。

So I think another way of saying that is if we're not for essentially this backdrop of tariff input cost pressures. I think given our last four quarters of margin performance, we'd likely be redeclaring a new line. It's just very difficult to do that against this backdrop of uncertainty, particularly in the short term.

所以我認為另一種說法是，如果我們本質上不是出於關稅投入成本壓力的背景。我認為，考慮到我們過去四個季度的利潤表現，我們可能會重新宣布一條新的產品線。在這種不確定的背景下，尤其是在短期內，要做到這一點非常困難。

That's Very helpful. And then , could you just touch on the front log of activity you have? And is your core customer showing any signs of potentially pulling back on spending or delay spending with all the uncertainty? Or is -- again, just the replacement term and nature of your business and the ROI still compelling enough that the kind of business as usual as much as it can be.

這非常有幫助。然後，您能否簡單談談您之前的活動日誌？您的核心客戶是否表現出可能因為各種不確定性而減少支出或推遲支出的跡象？或者 — — 再說一次，僅僅是替代條款和業務性質以及投資回報率仍然足夠引人注目，以至於業務盡可能照常進行。

Yes. So we're not seeing or hearing from customers anything on pullbacks. I think it's important to forget the 100 years of history that talked about this being a very durable replacement-driven market. If you just look at the last five years, even in the COVID year, where essentially, we lost an entire quarter, we still grew 4% even in the COVID year. And then if you want to consider tariffs maybe against the highly inflationary year that fell out two years later, we were up 14% that year.

是的。因此，我們沒有看到或聽到客戶關於回調的任何消息。我認為，重要的是要忘記 100 年來一直認為這是一個非常持久的替代驅動市場的歷史。如果你看看過去五年，即使在新冠疫情年，我們基本上損失了整整一個季​​度，但即使在新冠疫情年，我們仍然增長了 4%。然後，如果你想考慮關稅，也許是為了應對兩年後出現的高通膨年份，那一年我們的通膨率上漲了 14%。

So I think given some of the really difficult environments you've seen in the last few years, the customer is particularly around these benefits that come from ROI and the technology adoption of our other products as well as the replacement driven when the meter is due to be replaced to replace it just because also in difficult times serves as the cash register. So that's the last thing they cut if they do have budget problem. So we see -- still feel as positive on the outlook as we did through those other difficult times.

因此，我認為，考慮到過去幾年中看到的一些非常困難的環境，客戶特別關注來自投資回報率和我們其他產品的技術採用所帶來的好處，以及當電錶需要更換時所驅動的更換，因為在困難時期電錶也可以作為收銀機。所以，如果他們確實有預算問題，這是他們最後削減的一項開支。因此，我們看到——我們對前景仍然抱持樂觀的態度，就像我們經歷過其他困難時期一樣。

Nathan Jones, Stifel.

內森瓊斯（Nathan Jones），Stifel。

And congratulations to Karen for May. I guess the first question I'd like to ask you. So Bob, are we on the stairway to heaven yet?

並恭喜 Karen 五月取得好成績。我想問您的第一個問題是。那麼鮑勃，我們已經踏上通往天堂的階梯了嗎？

I would say, again, if you track our gross margin over time. So Nathan's question is referring to a comment that I often make, which is it is -- the margin profile is not a stairway to heaven because there's obviously some of the dynamics that this quarter particularly are favorable, sometimes are unfavorable. And so -- and again, that we largely play in a competitive environment that while rational, we're all trying to steal each other's lunch through the best of our ability, which has proven difficult over time.

我想再說一遍，如果你追蹤我們一段時間內的毛利率。因此，內森的問題涉及我經常說的一個評論，即利潤率狀況並不是通往天堂的階梯，因為本季的一些動態顯然特別有利，有時不利。所以 — — 再說一次，我們基本上是在一個競爭環境中，雖然我們是理性的，但我們都在盡最大努力搶佔對方的市場份額，但事實證明，隨著時間的推移，這很困難。

That being said, I think, again, we have a great input here of a result. I think hopefully, the way I answered the previous question rings true here as well is that a lot of things went right in this quarter. There are certainly some of those that are durable and other of those that will be episodic and could go the other way next quarter. But yes, there's definitely a positive trend.

話雖如此，我認為，我們在這裡再次對結果做出了巨大的貢獻。我希望，我回答上一個問題的方式在這裡也能得到證實，即本季很多事情進展順利。當然，有些影響是持久的，而有些影響則是偶發性的，下個季度可能會出現相反的情況。但確實存在著正面的趨勢。

I like how you handled the real positive trend out there.

我喜歡你處理真正的正面趨勢的方式。

I guess a more serious question around the tariffs. Are you guys able to quantify what you think the aggregate impact to your COGS input here is and just confirm that you believe whatever that number is, you'll be able to cover it with price.

我想這是一個有關關稅的更嚴肅的問題。你們能否量化對你們的 COGS 輸入的整體影響，並確認你們相信無論這個數字是多少，你們都能夠用價格來彌補它。

Well, so that's a difficult question. If you could just tell us how this is going to play out, we can tell you exactly what it would be. So like everybody else, we've watched the news everyday and we understand --

嗯，這是一個很難回答的問題。如果您能告訴我們事情將如何發展，我們就能準確地告訴您它將是什麼樣子。所以像其他人一樣，我們每天都看新聞，我們理解--

It's going to stay exactly -- it's going to stay exactly where it is now.

它會保持原樣——它會保持原樣。

Okay. If you're going to say it's going to stay exactly the way it is now, I would tell you that our current situation is not competitively disadvantaged and its managed.

好的。如果你要說它會保持現在的狀態，我會告訴你，我們目前的情況並不處於競爭劣勢，而且是可以控制的。

The synopsis for that answer is the title on slide 5. Manageable. Some lag effects contained within our normal range and competitively level playing.

該答案的摘要是第 5 張投影片上的標題。可管理。一些滯後效應在我們的正常範圍內，並且具有競爭力。

I mean, it sounds like the kind of message, I don't know, maybe I'm making numbers up here, but it's kind of a less than mid-single digit kind of impact overall to your costs?

我的意思是，這聽起來像是這樣的訊息，我不知道，也許我在這裡編造了數字，但它對你的成本總體上的影響不到中等個位數？

Well, it's a multifactor variable question, right? Because then there's also the targeted pricing actions that we take to mitigate and all those different pieces. So I think it's probably prudent to think about the range that we provided and the strength that we feel above the [floor]. And remember that through a myriad of difficult operating environments, we've been, I think, extremely -- our employees around the world have done an extremely great job of managing the ups and downs at difficult times, and I think we're prepared to do it again.

嗯，這是一個多因素變數問題，對嗎？因為我們也會採取有針對性的定價措施來緩解所有這些不同的問題。因此，我認為考慮一下我們提供的範圍以及我們感受到的超越[地面]。請記住，在經歷了無數艱難的經營環境之後，我認為，我們在世界各地的員工在應對困難時期的起伏方面做得非常出色，我認為我們已經準備好再次做到這一點。

Fair enough. Is there any perception that customers might have pulled forward some orders into the quarter in front of potential price increases or in front of potential supply chain disruptions or anything like that? Or did it kind of progress through the quarter as you would expect it to normally?

很公平。是否有人認為，客戶可能會為了應對潛在的價格上漲或供應鏈中斷等情況而將部分訂單提前到本季？或者它在本季的進展是否如您預期的那樣正常？

So two things to remember is that 75% of our revenue is direct to end users and end users really, in many ways, cannot pull forward because they can't really put them into meter pits or homes faster and they don't have the warehouse space to typically hold it. So a large portion of the revenue really doesn't even have that leverage pull. And then the 25% that goes through distribution, we've not seen large pull forward orders. So it was a pretty normal order environment.

因此，需要記住的兩件事是，我們的 75% 的收入直接流向最終用戶，而最終用戶實際上在很多方面都無法提前實現，因為他們無法更快地將電池放入計量坑或家庭中，而且他們通常沒有倉庫空間來存放電池。因此，很大一部分收入實際上甚至沒有這種槓桿作用。然後，對於透過分銷的 25%，我們還沒有看到大量的提前訂單。所以這是一個非常正常的秩序環境。

Normal is good in this environment.

在這種環境下，正常就很好。

Yes, thanks.

是的，謝謝。

Jeffrey Reive, RBC.

傑弗裡·里夫（Jeffrey Reive），加拿大皇家銀行。

First, I just want to say thanks to Karen for all your help and insights and wishing you the best in your retirement. Could you guys provide some comments around the health of municipal budgets today? How are you seeing utilities prioritize AMI investments in the current backdrop? And maybe more broadly, what's the risk that broader price inflation in other areas of utilities budget could crimp meter demand?

首先，我只想感謝 Karen 的所有幫助和見解，並祝您退休後一切順利。你們能否就當今市政預算的健康狀況發表一些評論？在當前背景下，您如何看待公用事業公司優先考慮 AMI 投資？或許更廣泛地說，公用事業預算中其他領域的價格普遍上漲會抑制電錶需求嗎？

Okay. I'll start, and I think that was about three questions. I'll ask Bob to fill in what I guess. But the first part on municipal budgets to remember is with 50,000 utilities in the United States and the myriad of different ways that utilities can fund investment, there's no one-size-fits-all answered to that. But in general, one of the things we feel great about with our sales model is selling 75% of our revenues are active. We talk to customers on a very constant basis, and we're continually asking them about their budgeting cycles, whether that's in the short term this year or the three to five year outlook.

好的。我先開始，我想大概有三個問題。我會讓鮑伯填寫我的猜測。但關於市政預算，首先要記住的是，美國有 50,000 個公用事業單位，而且公用事業單位可以透過多種不同方式為投資提供資金，因此沒有一個放之四海而皆準的答案。但總的來說，我們對我們的銷售模式感到滿意的一點是，75% 的收入來自主動銷售。我們經常與客戶交談，並不斷詢問他們的預算週期，無論是今年的短期預算還是三到五年的預算。

And what we're hearing in general, specific back to metering is, if the utility is facing budget issues, oftentimes, they will reprioritize their budget to do their metering replacements because clearly, with serving as the cash register, if you do for your meter replacement, you're going to do it for a myriad of reasons. Either it's an older system and you're looking for more efficiencies in the REITs to capture non-revenue water or eliminate waste and conservation.

我們通常聽到的，具體到計量方面，如果公用事業公司面臨預算問題，他們通常會重新調整預算的優先順序來更換計量裝置，因為很明顯，作為收銀機，如果你更換計量裝置，你會出於無數的原因這樣做。要么它是一個較舊的系統，要么你希望房地產投資信託基金 (REIT) 能夠更有效率地捕獲非收入水或消除浪費和節省。

And then secondly, if you're into a longer-term drive buy or AMI offering, those are battery-powered devices. And when they go dark, they need to be replaced. So that's where when I talked earlier about the inflationary period in COVID, I think it's been proven just within the last five years twice that when times are tough, this is not the area of the utilities time. I was giving you the hindsight --

其次，如果您有意購買長期驅動器或 AMI 產品，這些都是電池供電的設備。當它們變暗時，就需要更換。這就是我之前談到 COVID 的通膨時期時所說的，我認為在過去五年內已經兩次證明，當經濟困難時期，這不是公用事業的領域。我給你的是後見之明--

Yes. Curious if there's an opportunity or maybe greater customer reception to alternative pricing models like a meter as a service in this backdrop?

是的。好奇在這種背景下，像計量表即服務這樣的替代定價模式是否有機會或客戶接受度會更高？

So generally, again, if I compare it to the other difficult times over the last five years, sure, you might have some that would look at that. But I would say, in general, the buying habits have not changed.

所以總的來說，如果我將其與過去五年的其他困難時期進行比較，那麼，你可能會看到這一點。但我想說，總的來說，購買習慣並沒有改變。

Scott Graham, Seaport Research Partners.

斯科特·格雷厄姆，海港研究合作夥伴。

Heartly congratulations to you, Karen, you've done great jobs in both of your positions that I've known you. I wish you the best of luck. I wanted to ask a couple of questions around some of the statements that you make in the press release and then reiterated here, Ken, specifically, you talk about the company's ability to manage certain tariff-related cost challenges. You've amplified on that in the presentation here.

衷心恭喜你，凱倫，據我所知，你在兩個職位上都做得非常出色。祝你好運。我想就您在新聞稿中所做的一些聲明提出幾個問題，然後在這裡重申一下，肯，具體來說，您談到了公司管理某些與關稅相關的成本挑戰的能力。您已在此處的演示中對此進行了詳細說明。

I'm just wondering if you can provide some color on what the triggers are where certain becomes -- or managed certain becomes, well, this is more than what we expected. Like would it trigger be a rollback in the USMCA. Is it steel tariffs? Is it the electronic components piece, what would be the one or two or whatever many triggers that would have you concerned about your ability to manage.

我只是想知道您是否可以提供一些關於觸發因素的詳細信息，這些觸發因素會導致某些事情發生 - 或者管理某些事情發生，嗯，這超出了我們的預期。例如，這是否會引發 USMCA 的倒退？是鋼鐵關稅嗎？它是電子元件嗎？哪一個、兩個或許多觸發因素會讓您擔心自己的管理能力？

Yes. So for us, we called out the Mexico facility by name. So clearly, we're very proud of the operation we have there. We wouldn't be leaving there. So if there were some change in the USMCA, that would have an impact that we would have to consider it pretty seriously.

是的。因此，對我們來說，我們直呼其名墨西哥工廠。顯然，我們對在那裡開展的業務感到非常自豪。我們不會離開那裡。因此，如果 USMCA 發生某些變化，那將會產生影響，我們必須非常認真地考慮。

And the other areas that we look at, I think it's really well known about our linkage to copper, and I called out bismuth. So anything that's particularly damaging in that area that would happen in the future would be something that has to be considered. Those are the two primary ones.

而我們關注的其他領域，我認為我們與銅的聯繫是眾所周知的，我提到了鉍。因此，未來在該地區發生的任何特別具有破壞性的事件都是必須考慮的事情。這是兩個主要問題。

Okay. That's very helpful. And then my follow-up is simply really, you indicated that you're talking to customers frequently daily. And you said they are not looking -- you haven't heard anything about pauses or delays in deployments and what have you. I'm wondering though, if on the mix within the orders that you're seeing right now, whether it's price, the mix trade-up with AMI with radio, AMI with communications and software, leak detection, all of these trade-up factors that can go into your sales per unit.

好的。這非常有幫助。然後我的後續問題是，您確實表示您每天都在頻繁地與客戶交談。你說他們沒有關注——你沒有聽到任何關於部署暫停或延遲的消息。不過，我想知道，您現在看到的訂單組合中，無論是價格，還是 AMI 與無線電的組合、AMI 與通訊和軟體的組合、洩漏檢測的組合，所有這些組合因素都會影響到您的每單位銷售。

Has any of these elements change? In other words, has something become -- in this quarter in particular, what was sort of the standout on mix? And then more importantly, on the orders, has that changed that the mix components?

這些元素有任何改變嗎？換句話說，特別是在本季度，有什麼事情變得突出嗎？然後更重要的是，在訂單方面，混合成分是否發生了變化？

Yes. As we've talked about for many of the years from quarter-to-quarter, it can be generally sometimes a whole different set of utilities that can be the mix of small versus medium versus large. There's the turnkey elements. There's so many factors that you really can't point to one. One of the things I'm particularly proud of, though, is that our software business is becoming a pretty meaningful part of the portfolio, and you saw that grow again, 25% in the quarter. And that's a very positive structural change that provides tremendous benefits for customers and does a lot of good work for us on our continuous improvement move forward on margin enhancement.

是的。正如我們多年來每個季度所討論的那樣，它通常有時是一組完全不同的公用事業，可以是小型、中型和大型的混合。這裡有交鑰匙元素。有太多因素，你真的無法指出其中任何一個。不過，我特別自豪的一件事是，我們的軟體業務正在成為產品組合中一個非常重要的部分，而且你會看到它在本季度再次成長了 25%。這是一個非常積極的結構性變化，它為客戶帶來了巨大的利益，並為我們持續改善和提高利潤率做出了巨大的貢獻。

I think I hear you saying that --

我想我聽到你這麼說--

Fundamental has got no real changes.

基本面沒有實質的變化。

Well, I think -- yes. I'm hearing that. And I get the second quarter guidance and just the mix components are so important for your sales and earnings. So I just had to ask if there was any specific change that you're seeing in present order rates. And it sounds like your answer to that is no, and it's because there are so many factors at play.

嗯，我認為——是的。我聽到了。我得到了第二季度的指導，而混合成分對於您的銷售和收益非常重要。所以我只是想問一下，您是否看到當前訂單率有任何具體變化。聽起來你的答案是否定的，這是因為有很多因素在運作。

That's right. That's right. So the thing that I would hope to have people take away from this, is that as we've talked about the structural mix for years, and we've kind of stubbornly stayed in our range. This at least gives you a view into what's possible here. And all of these levers continue to be strong, and we continue to take our one step forward at a time approach to how we manage and how we communicate that these drivers are real, and this is a quarter where you just saw more of them come together than it does in many quarters.

這是正確的。這是正確的。因此，我希望人們從中得到的啟示是，儘管我們多年來一直在談論結構組合，但我們始終固執地停留在我們的範圍內。這至少可以讓您了解這裡可能發生的情況。所有這些槓桿都繼續保持強勁，我們將繼續採取一步一個腳印的方法，管理和傳達這些驅動因素是真實存在的，而在本季度，你會看到這些因素的結合程度比以往許多季度都要高。

(Operator Instructions)

（操作員指示）

Rob Mason, Baird.

羅布梅森，貝爾德。

And my congratulations, to you, Karen as well. Certainly appreciate all the help over the years. And Ken, I just I wonder to maybe clarify, have you already notified customers of price increases that you plan to take? Or is that forthcoming?

我也向你表示祝賀，凱倫。當然感謝多年來的所有幫助。肯，我只是想澄清一下，您是否已經通知客戶您打算提高價格？或即將發生？

So that's the forthcoming. So we're being very prudent in making sure we understand the situation, making sure that we're being very fair with our customers. I mean this -- I want to be clear, this isn't something we're happy about. They're trying to do price grabs. They're trying to be the first in the market.

這就是即將發生的事情。因此，我們非常謹慎，確保我們了解情況，確保我們對客戶非常公平。我的意思是──我想明確地說，這不是我們高興的事。他們正在試圖搶奪價格。他們正努力成為市場第一。

Your question, yes, some competitors have notified customers that we've heard of, many of our distributors are hearing from several of the other suppliers of other things that they sell, whether we've got to be piping or valves or those types of things.

您的問題是，是的，一些競爭對手已經通知了我們聽說過的客戶，我們的許多分銷商都從其他幾家供應商那裡聽說了他們銷售的其他產品，無論我們是管道還是閥門或這些類型的東西。

So it's getting out into the market and this is one of those things where -- that's why we're confident that our ability to recover price is manageable because it's already happening. It's just we haven't been on the lead of raising people's prices.

因此，它正在進入市場，這是其中之一——這就是為什麼我們相信我們恢復價格的能力是可控的，因為它已經發生了。只是我們還沒有帶頭提高民眾的價格。

Understood. Well, maybe as a follow-on to that, I know, frankly, inflation risk and the ability to handle that is always a consideration for you. But when you think about some of these AMI projects or multiyear deployments and contracts, does it require you to do something different? Or are the customers asking for anything different in terms of allowing those to go forward? I guess I'm thinking of the upfront decisions around those to make sure that both sides are protected in that sense? Has that changed?

明白了。好吧，也許作為後續問題，我知道，坦白說，通貨膨脹風險和處理通貨膨脹的能力始終是您要考慮的問題。但是當您考慮這些 AMI 專案或多年部署和合約時，是否需要您做一些不同的事情？或者客戶在允許這些事情繼續進行方面有什麼不同的要求嗎？我想我正在考慮提前做出這些決定，以確保雙方都受到保護？有改變嗎？

Yes, I would say there was an evolution with the inflationary pressures of 2021 and 2022, where multiyear price hold requests were very common from utilities in the past. And I think we learned from past as well as navigating that inflationary environment to push back on that more aggressively.

是的，我想說 2021 年和 2022 年的通膨壓力有所變化，過去公用事業公司提出多年的價格維持請求非常普遍。我認為我們從過去的經驗以及應對通膨環境的經驗中吸取了教訓，可以更積極地應對通膨。

And I would say competitors have done that as well. So I would say that the benefit of the current situation is some of that historic practice or requests or common understanding changed two, three years ago. But absolutely, we've got the lesson learned from past cycles as well as the ongoing desire to keep as much flexibility as we can, realizing that not all customers are created equal to difference amongst customers.

我想說競爭對手也這麼做了。所以我想說，目前情勢的好處是，一些歷史做法、要求或共同理解在兩三年前發生了改變。但毫無疑問，我們從過去的周期中吸取了教訓，並且始終希望盡可能保持靈活性，意識到並非所有客戶都是平等的，客戶之間存在差異。

Understood. If I could sneak in one more real quick, Bob. Just on -- I know you said that you didn't really notice a change in customer order patterns cadence beyond the normal. But your receivable line was up a fair amount sequentially. I was just -- what would have caused that? I understand acquisition probably contributed some, but just curious.

明白了。如果我可以再偷偷地再說一次，鮑伯。剛才—我知道您說過，您並沒有真正注意到客戶訂單模式節奏的變化超出正常水平。但您的應收帳款額度卻連續大幅增加。我只是想知道——是什麼原因導致了這種情況？我知道收購可能做出了一些貢獻，但只是好奇。

Yes. So a small piece of that is the addition of SmartCover, as you just alluded to. And I would say the remaining amount is simply, I would say, timing difference between the half of sales in Q4 versus Q1. Nothing there in terms of kind of a risk element or anything like that, its simply timing as the sales fell in the quarters, respectively, Q4 versus Q1.

是的。正如您剛才提到的，其中的一小部分就是添加了 SmartCover。我想說剩餘金額只是第四季與第一季一半銷售額之間的時間差異。不存在任何風險因素或類似因素，只是時間問題，因為第四季的銷售額相對於第一季分別下降。

(Operator Instructions)

（操作員指示）

We have no further questions, so I'll hand the call back to Karen for some closing comments.

我們沒有其他問題了，所以我將把電話交還給凱倫，請她發表一些結束語。

Thank you for everyone -- to everyone for joining the call for your planning purposes, the second quarter 2025 call scheduled for July 22. I will obviously not be on that call. So let me take a minute to first thank Ken and Bob for giving me the opportunity to lead IR here at Badger Meter along with their unwavering support to drive ESG and strategic planning initiatives here in recent years.

感謝大家－感謝大家參加此次規劃電話會議，2025 年第二季電話會議定於 7 月 22 日舉行。我顯然不會參加那通電話會議。因此，首先請允許我花一點時間感謝 Ken 和 Bob 給我機會領導 Badger Meter 的 IR，以及他們近年來對推動 ESG 和戰略規劃計劃的堅定支持。

I also want to thank all of Badger Meter colleagues. You've given me the easiest job on Wall Street with your world-class execution, supporting our customers and delivering phenomenal results day after day, quarter after quarter and year after year. And finally, I thank you to our analysts and investors, past and present for the many interesting and informative discussions over the years, the diversity of your styles, viewpoints and questions insured I was never bored. So with that, I'll wrap up the first quarter call. Bob and I will be around to take your follow-up. Thank you.

我還要感謝 Badger Meter 的所有同事。你們以世界一流的執行力為我提供了華爾街最輕鬆的工作，支持我們的客戶，日復一日、一季度復一季度、年復一年地提供著非凡的成果。最後，我要感謝我們過去和現在的分析師和投資者，感謝你們多年來進行的許多有趣且內容豐富的討論，你們的風格、觀點和問題的多樣性確保我永遠不會感到無聊。至此，我將結束第一季的電話會議。鮑伯和我會繼續關注您的後續情況。謝謝。

This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.

今天的電話會議到此結束。非常感謝您的出席。現在您可以斷開線路了。