Evoqua Water Technologies Corp.

Hello and welcome to the Evoqua Water Technologies fourth quarter and fiscal year 2021 earnings conference call. At this time, all participants have been placed in a listen only mode and the floor will be open for your questions following the presentation. After the speaker's opening remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press the star then the number one on your telephone keypad. If you would like to withdraw your question, please press the pound key on your telephone keypad. As a reminder, this conference call is being recorded, and your participation implies consent to our recording of this call. If you do not agree with these terms, please disconnect at this time. Thank you. I would now like to turn the call over to Dan Braylor, Vice President of Investor Relations. Please go ahead.

Thank you, Brittany. Thanks, everyone, for joining us for today's call to review our fourth quarter and full year 2021 financial results. Participating on today's call are Ron Keating, President and Chief Executive Officer, Ben Stass, Executive Vice President and Chief Financial Officer, and Sneha Desai, Executive Vice President and Chief Growth and Sustainability Officer. After our prepared remarks, we will open the call to questions. This conference call includes forward-looking statements, including first quarter and full fiscal year 2022 expectations and statements relating to demand outlook and our end markets, growth opportunities, our order pipeline, our acquisition strategy and pipeline, PFAS and infrastructure-related legislation, supply chain challenges, inflation, general macroeconomic conditions, our goals relating to our own greenhouse gas emissions and water reuse, and statements related to the ongoing impact of the COVID-19 pandemic. Actual results may differ materially from expectations. For additional information on Avoqua, please refer to the company's SEC filings, including the risk factors described therein. On this conference call, we'll also discuss certain non-GAAP financial measures. Information with respect to such non-GAAP financial measures is included in the appendix of the presentation, which can be obtained at a Volquist Investor Relations website. Unless otherwise specified, references on this call to full-year measures or to a year refer to our fiscal year, which ends on September 30th. Means to access this conference call via webcast were disclosed in the press release, which was posted on our Investor Relations website. Replays of this conference call will be archived and available for the next 14 days. With that, I'd now like to turn the call over to Ron. Ron?

Thank you, Dan, and thank you all for joining us. I appreciate your interest in Avoqua, and I'm happy to give our overall highlights. As Dan mentioned, I'm joined by Ben Stass, our CFO, who regularly participates on these calls. And today, I'm also pleased to have Snehal Desai, our Chief Growth and Sustainability Officer, join me. Sneha will discuss some highlights on the PFAS landscape and our progress on sustainability. With that, we'll get started. Please turn to slide three. We closed a very solid year with a strong fourth quarter performance. Market demand continues to be robust as customers are increasingly turning to Evoqua Solutions to solve their most complex water challenges. On today's call, you'll hear how we're investing in technology, product innovation, and sustainability initiatives. We'll also talk about the upcoming year and why we're pleased with our position, the long-term growth opportunities, and our expectations to create significant shareholder value. In Q4, we had a very strong broad-based organic revenue growth across both segments, and our book-to-bill ratio was north of one. Price-cost was positive for the quarter, despite ongoing inflationary pressures on materials and freight. Supply chain constraints are impacting visibility and availability. But to date, we have successfully navigated through a very dynamic period. I would like to thank our supply chain teams for an outstanding performance. Our working capital performance and cash flow showed additional improvement, as did our overall balance sheet strength. Our net leverage ratio came in at 2.5 times, which is at the low end of our targeted range. Our M&A pipeline is quite active, and we expect to supplement our organic growth initiatives over the coming year. Please turn to slide four. I wanted to take a moment and highlight these six key financial metrics that reflect the progress the team has made over the past four years as a public company. As a customer-centric, innovation-driven company, we are focused on profitable growth and a strong balance sheet, allowing us to better serve our end markets. We have seen excellent improvement across our results, even through the pandemic, and we are continuing to invest to serve our strong and growing market more effectively. We are well positioned to tackle complex water challenges while delivering sustainable solutions that our customers value as evidenced by our growing backlog. Please turn to slide five. This chart represents Avoqua's first quarter order expectations by end market relative to the prior year's first quarter. We continue to see growth across most of our end markets. Three end markets, chemical processing, municipal drinking water, and refining marine, show neutral to slight declines in expected demand due to challenging prior year comps. Overall, we expect market demand to remain quite strong throughout the 2022 fiscal year. We'll be happy to address questions about specific end market drivers during the Q&A section. Please turn to slide six. During our calls this year, we plan to select an end market and provide insight into the solutions we provide and why it is important. Microelectronics is one of our core vertical markets and is an attractive end market with growing demand across many geographies. We support multiple applications in microelectronics that utilize ultra-pure process water and increasingly wastewater treatment and printed circuit board and chip manufacturing. Sustainability continues to take a prominent role for the semiconductor companies, and as they look to reuse, reclaim, and recycle water, they are partnering more closely with Avoqua. We provide multiple offerings to the semiconductor manufacturers as well as to upstream suppliers through both ISS and APT. ISS focuses on selling integrated process and wastewater solutions, while APT sells products, components, and technologies for printed circuit board Ultrapure process water requirements. Our IonPure brand is a leading-edge technology for the industry, and in a few minutes, Ben will provide insight into new innovations with the announcement of IonPure Ultra. Please turn to slide seven. This graph presents our quarterly revenue and adjusted EBITDA on a rolling 12-month basis since 2017, highlighting the resiliency of our business. Our overall revenues have grown at a compounded annual rate of 5%, with adjusted EBITDA growth over 8% during this time. Currently, our service business comprises 41% of our trailing 12-month revenues, while service and aftermarket combined make up approximately 60% of our business. Please turn to slide 8. EVOQUA celebrates the passage of the Infrastructure Investment and Jobs Act and the $55 billion in funding that it makes available for clean water. This legislation is historic in size, marking the single largest investment in water infrastructure that the federal government has ever made. This funding will be used for modernizing water infrastructure, replacing lead service lines, and in addressing emerging contaminants, namely PFAS, in our water systems. In addition, the final bill requires the EPA to set maximum contaminant levels for PFOA and PFOS in drinking water within two years of enactment. I would now like to turn the call over to Sneha to discuss the PFAS roadmap and evoke with progress related to sustainability.