Ladies and gentlemen, welcome to the third quarter 2023 Badger Meter earnings conference call. If you would like to ask a question during the Q&A portion of today's call, please press Star followed by one on your telephone keypad. As a reminder, today's conference is being recorded. It is now my pleasure to turn the conference over to Karen Bauer, Vice President of Investor Relations, Corporate Strategy, and Treasurer. Good morning, and thank you for joining the Badger Meter third quarter 2023 earnings conference call. On the call with me today are Ken Bockhorst, Chairman, President, and Chief Executive Officer, and Bob Wrocklage, Chief Financial Officer. The earnings release and related slide presentation are available on our website. 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. On today's call, we will refer to certain non-GAAP financial metrics. Our earnings slides provide a reconciliation of the GAAP to non-GAAP financial metrics used. With that, I'll turn the call over to Ken. Thanks, Karen, and thank you for joining our third quarter earnings call. The Badger Meter team delivered another record quarter with continued strong sales, operating profit, and EPS growth year -over -year. Demand for our differentiated and tailorable digital smart water solutions remains robust, and improving supply chain dynamics allowed us to make modest headway into the elevated backlog. I want to thank all of our employees for their focused efforts in serving our customers. I'll provide an update on the macro environment and market outlook later in the call. For now, I'll turn it over to Bob to go through the details of the quarter. Thanks, Ken, and good morning, everyone. Turning to slide four, our total sales in the third quarter reached yet another record at $186.2 million, an increase of 26% compared to $148 million in the same period last year. This increase was on top of 15% year-over-year growth in Q3 last year and 13% the prior year. To put our multi-year organic sales trend line into perspective, third quarter 2023 sales are more than 60% above pre-COVID-19, 2019 levels, which equates to about 13% compounded annual growth on an organic basis. Total utility water product line sales increased 31% year-over-year, with broad-based growth across the portfolio of utility smart water solution offerings. Continued robust order demand and normalization of supply chain conditions resulted in strong manufacturing output. Similar to last quarter, we delivered on meaningfully higher cellular AMI demand, including ORION Cellular endpoints, E-Series Ultrasonic Meters, and BEACON Software as a Service revenues. Additionally, water quality and pressure monitoring sales contributed to the top-line growth. Sales for the flow instrumentation product line increased 2% year-over-year, with solid demand in water-related markets, partially offset by modestly lower sales associated with de-emphasized general industrial applications. Turning to margins, solid execution at both the gross margin and SEA lines contributed to the 80 basis point increase in operating margins in the quarter, reaching 16.9% versus 16.1% last year. Gross profit dollars increased $15.2 million year-over-year, and as a percent of sales, increased 20 basis points to 39.1% versus 38.9% last year, with higher volumes and favorable product mix contributing to the improvement. We were pleased with overall gross margins, again, in the upper half of our normalized range. SEA expenses in the third quarter were $41.3 million, an increase of $7.6 million year-over-year, which included higher personnel-related costs such as headcount, salaries, and variable compensation, as well as R&D expenses. The addition of Syrinix, with its related intangible asset amortization, also contributed to the dollar increase. Despite higher spend levels to support growth, SEA, as a percent of sales, declined 50 basis points to 22.2% from 22.7% in the comparable prior year quarter. While operating income grew 31%, we increased EPS an exceptional 44% to $0.88 in the third quarter, compared to $0.61 in the prior year quarter. The delta includes the benefit from interest income earned on our increasing cash balance, and in addition, the quarter's 20.3% income tax rate benefited from discrete equity compensation transactions occurring in the quarter. We continue to expect our normalized effective income tax rate to be ±25%. Working capital as a percent of sales was 22.7%, compared sequentially to 23.4% last quarter end. While overall working capital, including inventory, has increased in total dollars to support growth, we did see an improvement in inventory as a percent of sales and continue to expect modest inventory reductions as we move forward. Free cash flow of $28.4 million improved from a year ago, primarily on higher earnings. We remain on track for 100%+ free cash flow conversion of net earnings for the full year. With that, I'll turn the call back over to Ken. Thanks, Bob. Turning to slide five, as Bob mentioned earlier, we've delivered meaningful growth over the past several years, leveraging our expanding portfolio of digital smart water solutions to solve our customers' evolving water challenges. While the word meter is a part of the Badger Meter name and remains a prominent element of our offering, the growth that we've had and will continue to deliver goes far beyond the meter. As the macro challenges of labor shortages, aging infrastructure, water conservation, and climate events continue to drive much needed investment into critical water systems, Badger Meter's broad portfolio of customizable solutions spanning metering, sensors, instruments, communication, software, and support offerings, is uniquely positioned to serve the evolving needs of our utility and other customers. The total available market globally is valued at approximately $20 billion, giving Badger Meter ample opportunity to continue to grow and expand these offerings in the U.S. and other select regional markets. It also gives us ample opportunity to add to our portfolio of solutions and other sensors and hardware-enabled software via organic and disciplined M&A investments. We've demonstrated our ability to capitalize on these growth opportunities, and we remain well-positioned to further build on our track record of value creation. Looking ahead, we have a constructive outlook for the remainder of the year and see a solid foundation for profitable growth in 2024. As noted in the release, as we close out 2023, we continue to expect solid year-over-year sales growth, taking into account the fewer operating days in the fourth quarter with U.S. holidays. As supply chain dynamics improved, we've been able to begin improving lead times. These improving dynamics have also aided manufacturing efficiencies, benefiting the gradual margin expansion we've consistently discussed. One additional item to note: we're monitoring the evolving conflict in the Middle East and its potential impact related to partners in the region. Awards, orders, and bid funnel activity remain strong, supported by the well-understood macro drivers facing the water industry. The replacement-driven underlying demand activity, as well as our ability to leverage our water-related hardware and communication offerings to accelerate software and data analytics across the water ecosystem, position us well for future growth. With that, operator, please open the line for questions. Thank you. As a reminder, if you'd like to ask a question today, please press star followed by one on your telephone keypad now to enter the queue. When preparing to ask your question, please ensure you are unmuted locally. Our first question today comes from Rob Mason from Baird. Rob, please go ahead. Your line is open. Yes. Good morning, everyone. Hi, Rob. It sounded like you made the comment you were able to work backlog down a little bit, but you characterized it as still elevated. I'm just curious, within that higher backlog, is there any portion of that that you know you would think is in the delinquent category or there's an accelerated need to work the backlog down? Yeah. So, so Rob, as, as we've discussed before, so when we talk about backlog, what we're talking about is what we have POs for that customers are interested in getting right now. So in our backlog, we don't talk about the two-, three-, five-year, you know, longer-term AMI deployments that we book. So, so as we think about backlog, you know, I don't think about it in past due. I just think about that these are things that customers are looking for us to provide. So as we, as we start to improve lead times and, and eat into that actionable right in front of us today backlog, that's actually a good thing for customers. And if we continue to improve lead times and, and eat that down a bit, I would feel happy about that. Overall, we're extremely excited about order rates, so that optimism has not changed on that front. Understood. Understood. The, could you just characterize what the, you know, the pricing environment looks like now that, you know, some of the supply chain headwinds that had been out there, and commodity costs as well, have settled down? Just give us a, you know, maybe a framework for what you're seeing, either on list prices or, in particular, just how the RFP and bidding, you know, process is playing out with respect to pricing. Yeah. It's remaining largely unchanged from what we've talked about in the other quarters. While some things are moderating, inflation is still real. There are parts of the economy that still certainly aren't great as we talked about inflation and interest rates and other things that are out there. But for the most part, the work that we did three years ago in really embarking on a value creation value pricing model has certainly paid dividends for us throughout a difficult operating environment. But largely, pricing dynamics haven't changed. If I could sneak one last one in. This is just a comment on the slide presentation, you know, which is certainly appreciated. I did notice in the slide deck, you know, where you reference ASPs around some of your solutions, broad ASPs, I understand, but just on the manual meter side, around $70 pricing, if I'm not mistaken, that was... You know, back in January, that was at a $50-$60 range. You just speak to, you know, what the dynamic is pushing that up, whether that's all price or, you know, does that include some blended mix between mechanical and e-meters, or just kind of the underlying movement in that number? Yeah, so I would, I would say, again, I don't know how great we are at keeping those numbers current, but there's probably a bit of price increase that's occurred over multiple time frames between those being updated. I think also, likewise, you've got kind of core meter, bare meter, plus registration being included in that. So I, I think if that's your specific question, you know, that reflects kind of whatever, whatever was in the market at that point in time. Very good. Thank you. Sure. The next question comes from Nathan Jones from Stifel. Nathan, your line is open. Please go ahead. Good morning. This is Adam Farley on for Nathan. Hi, a quick one on the fewer selling days in fourth Q. Should we be expecting a sequential, a sequential decline in fourth Q revenue? Yeah. So we don't give guidance, but I think, you know, you're walking away with an obvious takeaway, which is with fewer working days, likelihood that, you know, that, that's a potential. That's, I think, effectively what we're saying. All right. Okay, fair enough. And then switching gears, could you talk about strategic investments, and how we should think about that driving revenue growth? Yeah. So I think if you just look at our history and totality of the strategic investments are what have brought us to the point that we're at, whether that was being, you know, first in our market with ultrasonic meters, or first in our market with cellular radios, or bringing the water quality portfolio in, developing our own software. In many cases, it's continuing to invest in and keeping and advancing our lead in cellular, keeping or advancing our lead in software as a service, our, our software offering, continuing to integrate water quality and, and Syrinix into the broader portfolio and cross-selling. So, the long answer is yes. The short answer is yes. I mean, we continue to follow our capital allocation priorities of, you know, number one, R&D investment and priding ourselves in keeping our innovation leader status, increasing dividends annually in line with earnings and disciplined M&A. So that hasn't changed. That's the same as it's been. I think I just—I'd augment kinda that first capital allocation priority of organic investment in the business. Everyone always thinks of innovation as being R&D, but we equally think of innovation in the space of operational efficiency and capacity expansion. And so, you know, we've been investing over the last several years to be able to drive higher capacity and output, which of course allows us to then deliver on those higher order rates and higher growth numbers that you're asking about. So it's equal parts... I don't know if it's equal parts, but it's contributory from innovation as well as operational efficiency focus and capital investment to support capacity. Great. Thank you for taking my questions. Yeah, you're welcome. The next question comes from Andrew Krill from Deutsche Bank. Andrew, your line is open. Please go ahead. Hey, thanks. Good morning, everyone. So I'll ask first, I just know sales have been very strong for several quarters in a row, and I think, you know, you're on track for strong double-digit growth in 2023, and, you know, that's on top of, you know, basically double-digit growth the prior two years. So I'm just wondering, you know, is the kind of historical, like, mid- to high-single-digit growth rate for this industry, has that—you know, do you think it's structurally moved higher, or should we expect, you know, to kinda go back towards, you know, that range again? Yeah so, you know, if you went-- if you rewound a couple of years ago, we used to refer to it as mid single digits, so we have changed into that high single digit mode. And, as, as you know, you know, we don't provide guidance in the quarter or the, the, or the annual basis. Things can tend to be uneven at times, but for the most part, through the strategic cycle, we're really comfortable thinking in the high single-digit range year-over-year. So when we say high single digit over the strategic cycle, we're talking five or 10-year cycles. So to get a compounded annual growth rate of high single digits, there may be years that are up 15, 16, and there may be years that are only up five. So we're simply talking about that- Mm-hmm ... kind of trend line over a CAGR style. So, I do think, you know, again, we don't guide, obviously, but I think the ability to sustain double-digit growth, even in this market, it's not doable, repeatable every year annually over that strategic cycle. Okay. Makes sense. And just next, just on, like, capital allocation, any update on how you're thinking about your approach there, just as your cash balance continues to grow, and maybe, you know, an update on, like, the deal pipeline, anything you're looking at? Thanks. Sure. Yeah, so deal pipeline remains strong. You know, we have, as we've always maintained over the last several years, a really healthy, target-rich environment of companies that are in this water quality space. We'd be certainly interested in building that out more, software side, anything that has global footprints in the select regional markets that we're looking at, similar to what ATI, s::can, and Syrinix have brought to us. So good funnel. We remain disciplined. You know, we think we have a really good idea of where value does get driven within our industry, and that's where we'll continue to look for value creation opportunities in M&A. Okay, great. And if I could sneak one last quick one. I think last quarter, you noted that Book -to -Bill was over one. Can you give, you know, an update on that for the third quarter? Well, yeah. So as I talked about with that, you know, improving lead time situation, we had a really, really strong order period that we're really proud of. We just had an exceptionally strong shipment period that was slightly better, and I do mean slightly. Okay, great. Thank you. You're welcome. As a reminder, that star followed by 1 to ask a question today. The next question comes from Tate Sullivan from Maxim Group. Tate, your line is open. Please go ahead. ... Great, thank you. A couple things, Morning. I mean, impressive expense control. I mean, your revenue growth exceeded my expectations, but expenses were under. Can you just talk about maybe the composition in selling and in administration expenses? I mean, is R&D at higher levels than historically to enter more water quality, real water quality markets and any integration expenses? I mean, it's just I continue to expect you to have more expenses, but it seems like you manage it quite well. Yeah. So I certainly won't dissect the $41 million of SEA, but I think the way to think about that, Tate, is exactly what we've been saying for the last four years, is that SEA leverage, because of our, I'm gonna say a term I hate to say, growth algorithm. Because of our growth algorithm, we believe while still being an innovator and doing the things that you talked about, R&D, integrating new businesses that we've acquired, et cetera, we can still do all those great things, but grow SEA at a rate slower than sales, and that creates automatic SEA leverage. I mean, we're not more than three years removed from the time when we were running at 25%-26% SEA as a percent of sales, and we just closed the quarter at 22.2%. I think for the full year, we're in that kinda high 22% range. So, the story of SEA leverage is real improvement over the last three years, and we believe to continue that while being steadfast and being invested in organic investment as our capital allocation priority number one, we can continue to gain that leverage as a point of operating and EBITDA margin expansion. So there's nothing unique in the third quarter. It's more the continuation of that trend that we've been talking about over the last three years. Great. Thank you. Then the addressable market slide, thank you for including it. I mean, then I don't understand the meter market part of that. I mean, I would—if it's fair to categorize mostly as a replacement market, how much of the $20 billion, remaining $20 billion market? I mean, I thought maybe you're creating, so to speak. I mean, are you creating some of the real-time water quality markets and the software markets? Are you, are you replacing existing solutions? Can you talk more about that, the, the, the pie chart in there? Yeah, what's, what's exciting to us, and I know, sometimes the acquisitions that we've done can appear small, but given our brand name, our 118-year history, things we've done in the water market, when we add these companies like ATI, s::can, Syrinix, it opens up these much larger markets to us. And as we continue to integrate and develop software, it opens up these other markets to us. We do tend to enjoy and look for niche opportunities within these spaces. We're not looking to follow, you know, some of the giants in some of these spaces that have established, markets that are more difficult to get into. We're, you know, for example, in water quality, you know, Hach is a really strong, great business, and there's but there's room for several other technologies and everyone to be successful in a wonderfully large growth market. Great. Thank you. You're welcome. Just a reminder that star followed by one on your telephone keypad to ask a question today. As we have no further questions, I'll hand the call back to Karen Bauer for any concluding remarks. Thank you, operator. Thanks, everyone, for joining our call today. For your planning purposes, our year-end call is tentatively scheduled for January 26, 2024. I'll be around all day to take any follow-up questions you have. Have a great day. This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.