Badger Meter, Inc.

Thank you for taking the Badger Meter 3rd Quarter 2026 Earnings Conference Call. I'm here today with Ken Bockhorst, our Chairman, President, and Chief Executive Officer, and Bob Rocklage, our Executive Vice President of North America Municipal Utility. This morning, we posted the earnings release and related slide presentation on our website. As a reminder, any forward-looking statements made on this call are subject to various risks and uncertainties, the most important of which are outlined in our news release and SEC filings. On today's call, we may refer to certain non-GAAP financial metrics, including base results, which exclude the impact of UDLive acquired May 1, 2026. Our release and earnings presentation provide a reconciliation between the most directly comparable GAAP measure and any non-GAAP financial measures discussed. With that, I'll turn the call over to Ken.

Thanks, Dan, and good morning. We were pleased with the sales and operating profit performance in the quarter. Excluding the solid revenue contribution of the UDLive acquisition, third quarter base sales increased 5% sequentially from the second quarter. This was largely in line with our expectations and the result of the ongoing ramp of previously disclosed awarded projects and solid underlying market demand in the quarter. As noted in the release, we continue to anticipate both sequential and year-over-year improvement in revenue in the fourth quarter and and expect to sustain this growth momentum into 2027, which I'll discuss further in the outlook. The team executed well on the profitability front as we continued operating cost management actions to mitigate the uneven 2026 sales cadence, while also addressing ongoing material cost pressures related to broad electronic supply chain dynamics as we described last quarter. I'll turn the call over to Dan to walk through the specifics of the quarter and then Bob will provide an update on commercial activity including our formal launch of One Network. I'll then come back to cover the outlook and take your questions. Go ahead, Dan.

Thanks, Ken. Turning to slide three, total sales in Q3 were $235.9 million. in line with the third quarter of 2025. Excluding the benefit of UD Live sales of $5.6 million, base sales were down 2% year-over-year. Sequentially, base sales were 5% higher than the second quarter levels with a number of the previously disclosed awarded projects ramping, including another quarter of process shipments. Utility water sales were flat year-over-year and excluding the acquisition were down 3%, reflecting the same project pacing dynamics mentioned earlier. Lower AMI-related product sales were partially offset by higher software revenue. It is important to note that base utility sales improved 5% sequentially. Sales of the flow instrumentation product line were up 2% year-over-year against the prior year's most difficult comparison as we experienced broad-based water application demand. We continue to see increasing demand in data center applications for our flow instrumentation products albeit from a relatively small revenue base. We were pleased with operating profitability this quarter, largely the result of higher sales, ongoing structural mixed benefit to gross margins, and effective price-cost management. On a year-over-year basis, operating earnings increased 4%, with margins up 60 basis points to 20.2%. Base operating profit margins, excluding UDLive, were 20.9%, up 130 basis points from last year's third quarter. Thank you for joining us. We have thus far been able to adequately mitigate these impacts. However, the challenges posed by these pressures have not abated. Turning to selling, engineering, and administrative expenses, the third quarter's $51.1 million was $1.3 million higher year over year, including $2.3 million from the addition of UD Live, inclusive of the intangible asset amortization. This was partially offset by lower incentive compensation and the benefit of appropriate cost controls. As a reminder, our preliminary expectation for UDLive intangible asset amortization is approximately $5 million annually. The effective income tax rate in the quarter was 25.1% compared to 26.1% last year. Finally, diluted earnings per share were $1.24, an increase of 4% from $1.19 in the prior year period. Thank you for joining us. in excess of 100% of net earnings. In the third quarter of 2026, we repurchased 423,000 shares for a total of approximately $55 million and have roughly $35 million remaining on our current share repurchase authorization. With that, I'll turn the call over to Bob.