Itron - Earnings Call - Q3 2020
November 2, 2020
Transcript
Speaker 0
Good day, and welcome to the Itron Incorporated Q3 twenty twenty Earnings Conference Call. Today's call is being recorded. And for opening remarks, I would like to turn the call over to Ken Gianella.
Speaker 1
Thank you, operator. Good afternoon, and welcome to Itron's third quarter twenty twenty 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 Dedrick, 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 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 we presented in today's earnings release and the comments made during this conference call and in the Risk Factors section of our Form 10 ks and other reports and filings with the Securities and Exchange Commission. In addition, due to the fluid nature of COVID-nineteen pandemic, company estimates regarding the impact of COVID-nineteen 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, 11/02/2020, may materially change, and we do not undertake any duty to update any of our forward looking statements.
Now please turn to Page four of the presentation, and I'll turn the call over to our CEO, Tom Dietrich.
Speaker 2
Thank you, Ken. Good afternoon, and thank you for joining us. During the third quarter, our team continued to focus on the success of our customers and safely delivered results aligned to our expectations considering the current environment. You will hear details from Joan shortly, but to summarize our third quarter performance. Revenue was $540,000,000 adjusted EBITDA was $40,000,000 non GAAP earnings per share was $0.61 and free cash flow was positive $38,000,000 While improving sequentially from the second quarter of twenty twenty, these results still reflect the ongoing pandemic.
Now let me provide a brief update on the customer and operating environment as we see it today. Beginning with our customers, consistent with last quarter, we have not seen contract cancellations and collections have continued as expected. We continue to see robust acceleration of interest in our REBA distributed intelligence platform, automation solutions, grade resiliency technology and a demand for more forecasting and data analytics that our customers deploy to increase efficiency and insight for their operations. These are positive secular trends for our business, and it is directly contributing to robust customer discussions and a healthy pipeline of new opportunities. As we noted in prior calls, the pandemic has slowed near term bookings due in part to delays in regulatory decisions.
Bookings in the third quarter were approximately $432,000,000 bringing our total backlog to approximately $2,800,000,000 and our twelve month backlog at approximately $1,100,000,000 We continue to target and have visibility to achieve a full year book to bill ratio of approximately one:one. Recall that our threshold for including an award into backlog requires a signed contract and any required approvals from the appropriate regulatory agencies. During the third quarter, there were several notable customer bookings and milestones that demonstrate the power and innovation present in our strategy and leading technology offerings. In partnership with CPS Energy and the San Antonio Water System, known as SAWS, we announced a long term software and services agreement that allows CPS and SAWS to leverage a common network to deploy water department services. This is on top of a previously announced smart city project with CPS in the city of San Antonio to deploy an industrial Internet of Things automated streetlight canopy.
This is an outstanding at scale demonstration of the deployment of a multipurpose network that can be efficiently reused across multiple organizations and applications for the benefit of the community while providing long term SaaS and service business for Itron. It is important to note that this business model continues to gain momentum. In fact, we recently signed an agreement with AEP in Washington County in Virginia to utilize AEP's network to the benefit of both utilities as well as Itron for recurring SaaS and service revenue. This is a win win win model for all involved. We also announced an agreement with CenterPoint for the deployment of the Intelis gas metering platform with integrated safety features that enable remote shutoff so that when paired with other services such as methane detection and alarms create new levels of performance and safety.
Also during the third quarter, we surpassed the 1,500,000 mark for deployed endpoints that enabled downloadable applications via our distributed intelligence platform. These meters continue to be deployed across many of our customers' networks. Our customers have proven in head to head tests against competitive solutions the performance advantages of downloadable applications for real world situations such as theft, grid efficiency and safety. Turning to our operations. The conditions exiting the third quarter remained steady with no significant production constraints.
Our supply chain and logistics network are stable. We currently have all factories up and running with continuing aggressive measures to ensure employee safety in manufacturing and field operations. We are vigilant and prepared for regional and local spikes from the pandemic that could potentially disrupt our operations. We continue to execute our strategy and move towards an asset light operating model. In September, we announced a 2020 cost savings project designed to better utilize our talent, capital and infrastructure to provide support for our customers more efficiently and effectively, the 2020 cost savings project is expected to yield 20,000,000 to $25,000,000 in savings with approximately 80% benefiting gross margin when completed by the end of twenty twenty two.
With this project, we further align our operations with our strategy to increase the focus on higher value solutions and optimize our supply chain. These actions will make Itron stronger and more resilient in the quarters to come. I will now hand the call off to Joan to discuss our third quarter results.
Speaker 3
Thank you, Tom. While our results improved sequentially from the second quarter low point, there is still more recovery needed before we are back to normal operating and financial performance. Please turn to Slide six for a summary of consolidated GAAP results. Third quarter revenue of $540,000,000 decreased 13% from last year, but was up 6% sequentially from Q2. The year over year decline was due to lower customer demand and operating constraints resulting from COVID-nineteen.
Gross margin for the quarter was 26.5%, 500 basis points lower than last year, primarily due to manufacturing inefficiencies caused by COVID-nineteen, unfavorable product mix and an increase in inventory reserves. The GAAP net loss of $25,000,000 or negative $0.63 per share compares with net income of $17,000,000.04 $2 per diluted share in the prior year. This loss was driven by a $44,000,000 restructuring charge booked in the quarter related to the 2020 cost savings project that we announced in late September. Regarding the non GAAP metrics on Slide seven, non GAAP operating income was $30,000,000 Adjusted EBITDA was $40,000,000 or 7% of revenue. Non GAAP net income for the quarter $25,000,000 or $0.61 per diluted share.
Looking at revenue by business segment on Slide eight. Device Solutions revenue was $176,000,000 a $42,000,000 or 20% year over year decline on a constant currency basis. Device Solutions revenue was up 36% from the second quarter, increasing its share of total company revenue in Q3. Network Solutions revenue was $3.00 $7,000,000 a $50,000,000 or 14% decrease year over year. Revenue in the Outcomes segment was $57,000,000 a $2,000,000 or 4% increase in constant currency from 2019.
Lastly, foreign currency changes resulted in $6,000,000 higher revenue versus the prior year. Moving to the non GAAP year over year EPS bridge on Slide nine. Our Q3 non GAAP EPS was $0.61 per diluted share compared with $1.4 in the prior year. On a year over year basis, net operating performance had a negative $0.71 per share impact versus Q3 twenty nineteen. This decline was driven by lower revenue and margin caused by COVID-nineteen as well as unfavorable product mix, partially offset by lower operating expenses.
Lower interest expense resulted in a $04 benefit year over year. A lower non GAAP tax rate increased EPS by $0.26 versus Q3 twenty nineteen. The lower year over year tax rate was primarily due to favorable discrete items booked this quarter. And lastly, changes in foreign currency and share count resulted in a $02 per share decrease year over year. Turning to slides 10 through 12, I'll discuss the Q3 results by business segment compared with the prior year.
Device Solutions revenue was $176,000,000 with gross margin of 12 and operating margin of 6%. Gross margin decreased seven fifty basis points due to COVID-nineteen related inefficiencies as well as product mix. Operating margin decreased six eighty basis points due to the fall through of lower gross margin, partially offset by reduced operating expenses. Network Solutions revenue was $3.00 $7,000,000 with gross margin of 33%. Gross margin was down four sixty basis points from the prior year due to unfavorable product mix and COVID-nineteen related inefficiencies.
Operating margin was 23%, below last year due to the fall through of lower gross margin and reduced operating leverage. Outcomes revenue was $57,000,000 with gross margin of 36%. Gross margin decreased 90 basis points from the prior year, primarily due to product mix. Operating margin was 21%, 130 basis points higher than last year due to lower operating expenses. Turning to Slide 13, I'll cover liquidity and debt.
Free cash flow was $38,000,000 in the third quarter, which was slightly better than we expected due to strong collections. Cash and equivalents at the end of the third quarter were $586,000,000 Total debt was $1,350,000,000 and net debt was $764,000,000 Net leverage was 4.3 times at the end of Q3. Please note this leverage ratio is calculated differently than the bank net leverage that governs our credit agreements. Our bank net leverage was 3.4 times at the end of Q3, well below our covenant threshold. Our balance sheet remains flexible with sufficient liquidity to fund our operations.
Cash conservation has been our priority since the start of the pandemic. As conditions continue to stabilize and improve, we have begun to repay the draw from the revolving credit facility. In October, we repaid $100,000,000 of the $400,000,000 revolver draw. While we continue to target our long term financial model, we recognize that COVID-nineteen has slowed our progress. Throughout the pandemic, we have been focused on mitigating the financial impact through near term levers that we can control, including tightened discretionary spending, hiring freezes, reductions in outside services and the delay of some capital projects.
For the full year 2020, there are no significant updates to the comments I made on last quarter's call with the exception of the expected tax rate. We currently expect the full year non GAAP tax rate to be approximately 20% versus the 36% discussed on last quarter's call. This reduction is primarily driven by favorable discrete items. We will continue to diligently manage our business through these unprecedented times, delivering value to our customers and support to the communities that we serve. As Tom mentioned, we are confident we will emerge from this pandemic well positioned to take advantage of increasing customer demand for our technology solutions, and we remain confident in our ability to reach our target financial model.
Now I'll turn the call back to Tom.
Speaker 2
Thank you, Joan. On a final note prior to turning over to Q and A, I would like to highlight our recent Itron Utility Week. First, I would like to thank CPS Energy's President and CEO, Paula Gold Williams, for being our keynote speaker and cohost of this year's event. During the event, CPS Energy was awarded with the Excellence and Resourcefulness Award by Frost and Sullivan. I am grateful for Paula's partnership and continued leadership.
Held annually for the last thirty eight years, Itron has hosted customers, partners and suppliers at our Leading Utility Week Conference. We switched this year's event to a three day virtual gathering with 1,500 worldwide participants, a new record level for us. While we truly wish we could have all been face to face, it was important that we still gather as industry experts, customers, colleagues and thought leaders to share perspectives and learn from one another and work together to address our industry's challenges. The theme of this year's event was Empowering Innovation. It is a timely topic as our industry must reliably continue to provide critical infrastructure and deliver services during both normal and abnormal times.
As we continue to move forward, we must remain mindful of three macro trends that are creating both challenges and opportunities for our industry today: infrastructure resiliency, environmental considerations and societal expectations. These macro trends will reshape how we work, what we focus on and the legacies we leave behind, but each can and will be addressed through our commitment to innovation. Through innovation, our industry can completely redefine the utility and city landscape and our relationship with how we manage energy and water, engage consumers, respond to disasters, reimagine business models and so much more. When our modern world is so dependent on critical infrastructure to deliver safe, secure and cost effective supplies of both energy and water, innovation is not just a future state, it must be our constant companion. Thank you for joining us today.
Operator, please open the line for some questions.
Speaker 0
Thank We'll take our first question from Noah Kaye from Oppenheimer. Please go ahead. Your line is open.
Speaker 4
Thanks. Good morning, everyone. Appreciate you taking the question. Can I start with a few quick ones for Joan around the tax rate assumption change? Any color on what's driving the discrete tax benefits?
Looks unless I've got my math wrong, it looks like this might be worth around $0.40 or so a share to pull your EPS. Feel free to correct me if that's mistaken. But then importantly, does that have any impact on how you're thinking about cash flow performance for the year? Thanks.
Speaker 3
Sure. So let me start with the EPS impact. It's about a little over $0.30 a share impact versus the 36% that we gave last quarter. Most of the streets were booked this quarter. The largest one had to do with our ability to take advantage of some tax attributes that we essentially acquired when we bought Silver Spring.
It required us to go back and refile some Silver Spring historical tax returns to take advantage of the foreign tax credit, and we were able to do that in Q3. And so that by far is the largest tax discrete. In terms of the cash taxes for the year, the cash taxes have been very low. And so this eventually affects cash taxes, but don't think about it as an immediate payment for the year. Essentially, were able to release some valuation allowances that we had on deferred tax assets.
The other question that I think would be pertinent would be, is this indicative of the go forward rate? And I would say no, it's very large discretes that we booked this quarter. If you look at the non GAAP tax rate this quarter, it was actually negative. Our best estimate going forward is still a little over 30% is the best estimate right now.
Speaker 4
Yes, that is super helpful. Thanks. Sort of turning to demand and bookings. Tom, I think I heard you mentioned that there's still a shot here to get to one to one book to bill for the year. Again, just doing some quick math, I mean, there would have to be a maybe historically strong bookings number for the fourth quarter.
And we know that the timing of approvals can be pretty lumpy from a regulatory perspective. So is that a low probability? Would you say a high probability to put up that kind of number in the fourth quarter? Or is there a good chance it could maybe slip into 1Q or 2Q twenty twenty one?
Speaker 2
Very good. Thanks, Noah. I think that the way to think about it is we have the visibility to go do it. It will depend on some regulatory decisions and us finishing up a few contracts. But it is our target for the year to come in at approximately one to one.
So still feel good about that possibility and that's absolutely what we drive towards. Relative to your comment at being a record, I don't know we'd have to go back and look. But having a large fourth quarter bookings number is not unheard of. We've done it a couple of years in the past at least during my short time with the company. So it is based on customer discussions, it's based on awards and a real hunger for our products and technology.
Speaker 4
Very good. And maybe one quick one. We've seen that municipal water meter sales during the pandemic have been relatively resilient and it seems a good time to check-in on your North American Intellis water meter product introduction. How are you seeing awards and sales tracking for that? Is it beginning to contribute at all materially?
Could that be a growth opportunity in the future?
Speaker 2
It certainly can be a growth opportunity for the future. At this point, it's still relatively small and immaterial part But it is an area that we have a lot of excitement around. Even in some of my prepared comments, I talked a little bit about different ways customers are pursuing the business overall. So the notion of having our multipurpose network out there and being able to load things underneath that, whether it would be gas and electricity or in a couple of the examples that I cited with CPS and SAWS in San Antonio and AEP in Washington County where people are using the same multipurpose network to read electricity and water.
It helps the community. It certainly is a cost effective solution and something that we're pretty excited about. We think that model has a lot of room to grow into the future.
Speaker 4
Okay. Thank you very much.
Speaker 0
We'll now take our next question from Pavel Molchanov from Raymond James. Please go ahead. Your line is open.
Speaker 5
Thanks for taking the question. So for the last six months, you've talked about utilities that are slowing the pace of physical labor due to social distancing precautions. Are there any case studies you can point to of where COVID metrics have improved and as a result utility work patterns have essentially normalized to pre pandemic levels?
Speaker 2
So I can take that one. Good morning, Pavel. I think that there's plenty of cases or things that we can point to about restrictions having helped in terms of virus spread overall, nothing utility related, but more along the lines of utilities starting to continue to restore installations. We can see that in France. We've seen it in parts of the Northeast.
So there is a desire when capital is allocated and projects are ongoing for our customers to carry on with that work. What we do see is in cases where the work is done outside in home types of installations continue to be on hold. I don't know that I would ever be able to point to something that talks about it returning to full pre pandemic levels to this point. But we do see the intent of our customers to move in that direction as safely as they possibly can.
Speaker 5
Okay. And a follow-up on that. Obviously, the severity of the second wave in Europe just in the last thirty days has probably taken a lot of people by surprise. Have you noticed any shift specifically among the European revenue mix in terms of the last kind of four to six weeks of activity of any impact from either the lockdowns or just the worsening of COVID?
Speaker 2
The factories remain open in Europe. We had that closure way back in Q2, but you saw a nice sequential improvement in our European business between 2Q and relative to the last month or two as you had cited, we don't notice a tremendous difference in terms of the customers' behavior. But we are mindful and we continue to watch, make sure that we're adapting to the situation as well as we can. We feel good about our protocols and the way we are operating within our factories and we'll continue diligent as we can about keeping employees safe and making sure we support our customers.
Speaker 3
Okay. Thanks very much.
Speaker 0
We'll now take our next question from Ben Callow from Berenberg. Please go ahead. Your line is open.
Speaker 6
Hey guys. Thank you. So Joe, you mentioned the target model and could you remind us what that is? And then it's hard for me to parse out everything that you guys have heard we've all had to deal with because of COVID during the year. But if I just look at margins declining while at the same time you guys are integrating and reducing costs and shuttering factors and things like that.
And so I'm trying to square away all of that with the margins and decline there and that longer term target. And then what does that longer term target like when do we think about that? Is that next year or 2022 or 2023? Thanks.
Speaker 3
Yeah, let me start. So the target model is the model that we showed at the Investor Day last year. And it represents getting to the mid teens EBITDA level. So what we showed was a range of 13% to 15% of EBITDA with gross margins associated with that in the 33% to 35% timeframe and had free cash flow as a percentage of revenue in the range of six to 8%. So obviously, as I mentioned in the prepared remarks, COVID-nineteen has certainly slowed that progress and pushed out our ability to achieve that to the right.
It's not 2021 based on the discussion of what we expect for top line in 2021. Is it 2022 potentially too soon to tell in terms of how strong a recovery will be. But we still think it's the right model. If you go to that Investor Day deck, it actually showed the target ratios we're shooting at by our segments. Those are still the targets that our segments are being asked to achieve.
But again, timing of when we'll be able to achieve that has pushed to the right.
Speaker 6
Guess just a follow-up there. Just are you seeing pricing pressure on networks at all? I think that's something that people worry about.
Speaker 2
Yes, can take that one. Good morning, Ben. Certainly, is a competitive market, but we feel very good about our technology. We tend to see when customers are interested in buying something that has plenty of capability for the future being able to use a multipurpose network, add additional capability to it, enable smart city applications, automate but do more with the data with downloadable applications, we tend to do very well in the marketplace. So I don't think that the environment has changed relative to pricing pressure on the networking front and we feel great about our technology.
Speaker 6
Great. Thanks, guys.
Speaker 2
Thank you.
Speaker 0
We'll now take our next question from Jeff Osborne from Cowen and Company. Please go ahead.
Speaker 7
Hey, good morning. A couple of questions on my end. One, I was wondering if you could just characterize the level of quoting activity, coming back to the book to bill being above one. I assume the regulatory approvals are things that you were verbally awarded sometime in the past, but maybe will come through by year end. But I was curious just on newer programs that might be being booked, what the level of activity is?
Speaker 2
I can take that one. Relative to quoting Asia Pacific, we're back at pre pandemic levels. Europe is a little slower. North America is a little bit behind the pre level. That's in terms of new quotes.
That said, the number of discussions around advanced technology, pipeline of new activities has definitely grown during this time period. Plenty of appetite towards forecasting and doing a better job of understanding how changes in demand would be incorporated into their network, a lot more discussions around EVs, a lot more discussions around renewables being integrated into the network overall. On the gas side, safety is a very high priority for our customers. And again, that generates a lot of new opportunities for us.
Speaker 7
That's great to hear. Maybe for Joan, can you touch on the inventory reserves? Was that an element of obsolescence or FX? Or what drove that?
Speaker 3
Yes. It was mostly in our Devices segment and related to I would say the most of it is the shutdown of some factories from some prior restructuring reserves. At the time, we would not have predicted COVID and therefore some of the demand for the products went down. And as we ultimately shut that factory down, we ended up with some excess inventory.
Speaker 7
Got it. And then have the recent lockdowns in Europe over the past week or two, have you heard from your customers as to what the impact for that would be just given that they'll last a month? How should we think about things like France and and the other markets that you have exposure to?
Speaker 2
Sure. It's still pretty fresh and pretty fluid. So difficult to get a full bead on it. We've been in touch with all of our customers. They are still counting on us to make deliveries.
As I commented earlier, factories are open and running. But it is brand new and something that we'll have to watch for as we exit through the rest of the quarter.
Speaker 7
Got it. And one if I could sneak one quick one in for Joan. I was surprised to hear it's great to see it, but I'm surprised to hear that you're paying back $100,000,000 already have in October. It looks like you had $186,000,000 of cash without the $400,000,000 revolver. So this would take you down to sub-one 100,000,000 Is there a minimum level of cash that you feel anxiety about?
Would you feel comfortable taking that down to 50
Speaker 3
Yeah, let me clarify. So we ended the quarter with $586,000,000 which included the 400,000,000 of the revolver. We paid 100,000,000 so we're at $486,000,000 So you're correct that if you paid the entire revolver back at the end of Q3, we would have had 186,000,000 So the revolver payment doesn't change that amount. Typically, would look to operate around $100,000,000 of kind of operating cash to have on hand.
Speaker 7
Okay. Thank you very much.
Speaker 0
We'll now take our next question from Tommy Moll, Stephens Incorporated. Please go ahead.
Speaker 8
Good morning and thanks for taking my questions. Hello, good morning. Can you hear me?
Speaker 3
Tommy, we're not able to hear now we can. Yes.
Speaker 8
Good morning. Thank you for taking my questions.
Speaker 1
Good morning, Tommy.
Speaker 2
Go ahead, Tommy.
Speaker 8
So acknowledging the crystal ball is hazy here, I wanted to ask if you could help calibrate us as best you can with what we know today on top line. So as we look to 2021, is low single still the right kind of compare to think about versus this year? When you get then when you get beyond 'twenty one, should we think about that maybe inflecting to a higher growth rate out in 'twenty two? Or maybe more broadly, if you're comfortable answering, if we can ex out the COVID noise, how should we think about a run rate type CAGR for total company revenue?
Speaker 3
Yeah, let me take that. So last quarter, we did indicate our expectations for 2021 were low single digit growth rate. We don't really have any update to that. Normally, we'll provide guidance in our February call for 2021. In terms of what should a normal run rate look like of revenue once we're completely recovered, I would point you to the target operating model that was in the Investor Day deck last year with revenue in the kind of 3% to 5% CAGR, but that would be completely recovered.
I'm not good enough to tell you when the recovery is going to be complete. So I don't know if that's 2022 or 2023. But for now, really no further comments on 2021 versus what we gave on the last call.
Speaker 8
Okay, fair enough. And thanks. And then on the restructuring, you indicated in the press release earlier this year that the bulk of it would hit above the gross margin line. Any insight you can give us on which segments should see the biggest benefits from the program?
Speaker 3
Devices should see the largest impact.
Speaker 8
Okay. And should we expect any more charges trickling through in Q4 or next year? Or is most of that in the rearview now?
Speaker 3
Well, we provided the detail of the total amount of charge, which is I think between 55,000,000 and $65,000,000 We booked about 45,000,000 in Q3. So the remainder will come in between now and for the most part by the end of twenty twenty one.
Speaker 8
Okay. Thank you. I'll turn it back.
Speaker 0
We'll now take our next one from Joe O'Shea from Securities. Please go ahead.
Speaker 9
Hello, everybody. Good morning.
Speaker 2
Morning, Joe.
Speaker 9
Hi. Two questions for you. First, Tom, you've talked in the past about how procurement process looks a little different for rate based spending versus something that would end up in the operating budget for municipality. I'm just wondering if those sort of different tracks are manifesting differently through COVID here or does everything just kind of look the same?
Speaker 2
I would say that difference that we see is how customers think about the overall situation. Larger customers meaning state grids internationally or the large investor owned utilities in The US tend to be a little bit more resilient and continue to operate, I will say a bit more normally in terms of their procedures and processes despite working from home. We've seen smaller customers think small municipalities, water departments, things of that sort have struggled a little bit more in terms of trying to understand how to seamlessly convert to work from home even in a customer care kind of environment. So that tends to slow down their procurement process a little bit in terms of new tenders. That's what we've seen for our portion of the business.
But you push that aside, think it's a timing question rather than something that fundamentally alters the process. The interest in new technology, the interest in automating business processes is very strong and something we feel very good about.
Speaker 9
Okay. Thanks. And as a follow on to that, obviously, we know that state and local budgets have gotten walloped whereas I would assume that if you're a regulated utility, probably less so. So are you beginning to see any sort of rumblings of what those fiscal constraints on states and municipal governments might do to some of their decisions?
Speaker 2
I would say too early to call right now as to anything being materially different. Everyone is being cautious in terms of new project starts. They don't want to have to start and stop a project. We've seen regulatory commissions being pretty reticent to approve cases where rate payers where the consumers would see an increase given some of the economic issues that are out there broadly. But I don't know that I would say there's anything that is different that it's hard to pull out of the noise as a long term trend.
Speaker 1
Okay. Thank you very much.
Speaker 2
Thanks, At
Speaker 0
this time at the moment, there appears to be no further questions. I'd like to turn the conference back to you, Mr. Dietrich, for any additional or closing remarks.
Speaker 2
Very good. Thank you, Brian. I'll finish off with thanking everyone for joining today. Itron is well positioned as a technology and thought leader. We feel great about the longer term trends and are well positioned to navigate the near term crosswinds.
Until we have a chance to speak again, thank you all.
Speaker 0
That concludes today's call. Thank you for your participation. You may now disconnect.