Itron, Inc.

Good day, everyone, and welcome to the ITRON Incorporated Quarter 2 of 2020 Earnings Conference Call. Today's conference is being recorded. For opening remarks, I would like to turn the call over to Ken Eno. Please go ahead.

Thank you, Operator. Good afternoon, and welcome to ITRON's second quarter 2020 Earnings Conference Call. We issued a press release earlier today announcing our results. The press release includes replay information about today's call. A presentation to accompany our remarks on this call is also available through the webcast and on our corporate website under the Investor Relations tab. On the call today, we have Tom Deitrich, ITRON's President and Chief Executive Officer, and Joan Hooper, Senior Vice President and Chief Financial Officer. Following our prepared remarks, we'll open the call to take questions using the process the operator described. Before I turn the call over to Tom, Please let me remind you of our non-GAAP financial presentation and our safe harbor statement. Our earnings release and financial presentation include non-GAAP financial information that we believe enhances the overall understanding of our current and future performance. Reconciliations of differences between GAAP and non-GAAP financial measures are available in our earnings release and on our investor relations website. We will be making statements during this call that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from these expectations because of factors that were presented in today's earnings release, in the comments made during this conference call, and in the risk factors section of our Form 10-K and other reports and filings with the Securities and Exchange Commission. In addition, due to the fluid nature of the COVID-19 pandemic, Company estimates regarding the impact of COVID-19 on current or forward-looking statements are made in a good faith attempt to provide appropriate insight to our current and future operating and financial environment. Materials discussed today, August 3, 2020, may materially change, and we do not undertake any duty to update any of our forward-looking statements. Now, please turn to page four in the presentation, and I'll turn the call over to our CEO, Tom Deitrich.

Thank you, Jen. Good afternoon and thank you for joining us. In balance, we were pleased with our team's focus and execution this quarter against the backdrop of the COVID-19 global pandemic. Our continued commitment to our customers and aggressive actions to safely ensure our business continuity yielded better results than we initially expected. You will hear details from Joan in a moment, but to summarize our second quarter performance, revenue was $510 million. Adjusted EBITDA was $31 million, non-GAAP earnings per share was 3 cents, and pre-cash flow was negative $10 million. We expect these results to be the low point for the fiscal year and would like to provide a brief update on the customer and operating environments as we see them today. Beginning with our customers, in the second quarter, we continue to see a healthy opportunity pipeline, several new tenders and awards across our segment, with a significant acceleration in interest around our REBA distributed intelligence platform. As anticipated, we saw lower bookings in the second quarter of approximately $390 million, bringing our total backlog to approximately $2.9 billion. Additionally, our 12-month backlog remained steady at approximately $1.3 billion. While our bookings were below a one-to-one ratio this quarter, we continue to target a full-year book-to-go ratio over one-to-one. Next, I would like to share some customer trends we saw in the second quarter that we expect to continue into the second half of 2020. Importantly, we have not seen any order cancellations to date nor a slowing of collections due to COVID-19. Regionally, we saw Asia-Pacific normalizing and the larger Western European countries taking cautious steps forward. Our customers in the United States continue to work through very fluid conditions. This includes ongoing COVID-19 related impacts and rollbacks in operating procedures for some states. Our customers have been providing reliable services, but several have temporarily slowed ongoing projects which impacts our business in the near term. We've seen regulatory delays in some of the hardest hit regions. Additionally, a few selected customers have delayed capital expenditures on selected new projects to combat temple COVID-19 related business impacts. As discussed in our prior earnings call, we tend to see larger customers coping a bit better with the impacts of COVID-19 versus smaller customers who face more significant operational and economic challenges. We expect these trends to continue through at least the balance of the year. While our customers' ability to resume normal operations will impact the speed at which we recover, we see a clear acceleration of customer interest in automation solutions, grid resiliency technology, and a thirst for more forecasting and data analytics. These are positive secular trends for our business that are well aligned to our strategy and the focus of our ongoing research and development investments. Turning to our operations, we are extremely pleased with the performance and the agility that our teams have shown in supporting our customers. I am grateful for the dedication of the worldwide ITRON team. The conditions exiting the second quarter has significantly improved from when we entered the quarter. We currently have all factories up and running with continued aggressive measures to ensure employee safety in manufacturing and field operations. Further, our supply chain and logistics network have stabilized, and while intermittent hotspots remain present, these issues are not sustained. Finally, we are not swirling research and development investment necessary for our long-term performance, and will continue to provision ourselves to capture the growing technology and service needs of utilities and cities of tomorrow. We are confident in our ability to work through the current environment and optimistic about the future opportunity. I will now hand off to Joan to discuss the second quarter results in the second half of 2020.