Itron, Inc.

Stand by, we are about to begin. Good day, everyone, and welcome to the ITRON Inc. Q1 2021 Earnings Conference Call. Today's call is being recorded. For opening remarks, I would like to turn the call over to Ken Gianella. Please go ahead. Thank you, Operator.

Good morning and welcome to ITRON's first quarter 2021 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 Dietrich, ITRON's President and Chief Executive Officer, and Joan Hooper, Senior Vice President and Chief Financial Officer. Following our prepared remarks, We will 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 websites. We'll 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 and the comments made during this conference call and in the risk factor 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, May 3rd, 2021, 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 Dietrich. Thank you, Ken.

Good morning, and thank you for joining us. We had a productive first quarter, and there's a lot to cover, so let's get started. You will hear details from Joan shortly, but to summarize our first quarter performance, revenue was $520 million, adjusted EBITDA was $50 million, non-GAAP earnings per share was 52 cents, and free cash flow was $39 million. While these results still reflect the ongoing effects from the pandemic, we are constructive on our overall operational and strategic progress. This is highlighted by our recent convertible bond and equity offering that accelerated our de-levering efforts and added business flexibility to execute both strategically and operationally in the future. Now let me provide a brief update on the customer and operating environment as we see it today. Beginning with our customers, consistent with the past few quarters, we have not seen contract cancellations and collections have continued as expected. Both our European and North American markets continue to be somewhat gated by the pandemic. While Q1 revenue was lighter than anticipated, we continue to expect a revenue outlook that is weighted towards the second half of the year and should continue to improve beyond 2021. Our operational efforts continue to yield improvement. Prior and recent actions to reduce fixed costs are on track, and we are beginning to see the benefits in our results. Recently, there's been a lot of talk in the news about supply chain challenges at both a component and transportation level. In Q1, we had little impact from component supply constraints or in factory production, as our mitigation efforts served us well. This includes the consumption of buffer inventory on our key components as reflected in our lower inventory levels at the end of Q1. Moving forward into Q2 and the second half of 2021, we do anticipate that we will face supply hotspots specifically for certain semiconductors, resins, and metals. We will continue our efforts to actively mitigate constraints as they appear and will monitor the situation closely over the next few quarters. We are partnering with our customers to increase the visibility of their needs beyond our normal lead times, increasing order coverage for key components, and driving alternative sources, plus targeting low-value, low-margin product lines for discontinuation. And finally, turning to bookings and backlog, we had another very strong quarter of bookings that is reflective of the innovation in both our outcome solutions and REVA distributed intelligence platform. We continue to see robust activity from our customers looking to deploy higher value solutions and applications that increase efficiency and insight into their operations. Our backlog increased to a new record level and we continue to be pleased with our industry position. Turning to slide five, For the first quarter, we achieved a book-to-bill ratio of over 1.3 to 1, driven by bookings of approximately $688 million, providing a record total backlog of approximately $3.4 billion and a 12-month backlog at approximately $1.3 billion. It is important to note that our current $1.3 billion 12-month backlog sequentially improved by approximately $100 million. While this 12-month backlog is still approximately $200 million less than the view we had pre-pandemic entering 2020, we are encouraged by the substantial improvement achieved over the past few quarters. There are a few recent bookings that I would like to highlight, starting with our outcomes segment. We are pleased to announce the extension of our long-term partnership with Exelon in a multi-year, multi-application SAS agreement to deliver industry-leading portfolios of outcomes in advanced metering infrastructure, distribution automation, and smart city applications across the Exelon operating companies. By extending our strategic collaboration, this enables Exelon to continue to optimize their operations while prioritizing security and privacy for their customers. The extension of this agreement is a proof point of the clear benefits, technical flexibility, and proven value that our customers are receiving. Another booking I would like to highlight continues our partnership with Texas New Mexico Power, or TNMP. TNMP is the most recent company to invest in our Riva distributed intelligence platform on our multi-application capable GenX network. We are pleased to have the opportunity to partner with TNMP to deliver our latest technology platform that provides increased operational resilience and to future-proof TNMP's investment with the flexibility to add applications and offerings for years to come. These are just a few proof points that our investment in technology yields not only success for ITRON, but also long-term value for our customers. This quarter, we have grown our deployed distributed intelligence-capable endpoints to over 2.8 million cumulatively, delivering on our strategy to expand our footprint of our advanced multi-purpose, multi-application network. Combined with a SaaS renewal of a long-term partner to a multi-year, multi-application platform demonstrates that once we install a network, we can expand our value to our customers with our outcome segment. While these are just a few examples of the progress that we have made this past quarter, it is why we remain positive that our efforts will continue to create value as we execute our strategy in 2021 and beyond. With that, let me hand off to Joan to discuss our first quarter results.