Good day, ladies and gentlemen, and welcome to the fourth quarter 2013 Badger Meter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Mr. Rick Johnson, Senior Vice President of Finance and Chief Financial Officer. You may begin.

Thank you very much, Frances. Good morning, everyone, and welcome to Badger Meter's Fourth Quarter Conference Call. I want to thank all of you for joining us. As usual, I will begin by stating that we will make a number of forward-looking statements on our call today. Certain statements contained in this presentation, as well as other information provided from time to time by the company or its employees, may contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in these forward-looking statements. Please see yesterday's earnings release for a list of words or expressions that identify such statements and the associated risk factors. Let me reiterate some of our guidelines. For competitive reasons, we do not comment on specific individual product line profitability, other than in general terms, nor do we disclose components of cost of sales, for example, copper. More importantly, we continue our practice of not providing specific guidance on future earnings. We believe specific guidance does not serve the long-term interest of our shareholders. Now, onto the fourth quarter results. Yesterday, after the market closed, we released our fourth quarter 2013 results. We are pleased with our record fourth quarter sales of $81 million as compared to $74.3 million in the fourth quarter of 2012. This represents a $6.7 million or 9% increase over the same period last year. This increase was driven by higher sales of municipal water products, offset somewhat by lower sales of industrial and specialty products. Let me review each of these sales categories. Municipal water sales increased nearly $8.5 million or 17.3% from $49.2 million to $57.7 million in the fourth quarter of 2013. These sales represented 71.2% of total sales for the quarter. This increase was driven primarily by higher unit…

Thanks, Rick, and thank all of you for joining us today. As Rick mentioned, we are pleased with the fourth quarter record results, and with the exception of the weaker first quarter, we're pleased with the total year 2013. Over the past 3 quarters, we've seen stronger growth in our base metering business, as well as the sales of our meter reading systems. Our E-Series ultrasonic water meters have seen good growth in our market with over 100,000 sold to date. We have now started shipping those meters to a water utility in the Middle East as part of several tenders that totaled over $6 million, and will be shipped throughout 2014 and into early 2015. We recently introduced additional sizes of these meters to offer a complete line in both stainless steel and polymer. We're pursuing additional opportunities for these meters, both in the U.S. and in markets outside of North America. In addition to meters, we are well-positioned in the automated meter reading market for water. For almost 10 years, we have marketed our best-selling ORION technology for either drive-by or fixed network systems. However, many utilities did not want to commit to one technology or the other. Therefore, last year, we introduced the first truly simultaneous drive-by, fixed network product in the market, the ORION SE radio. And we've been very pleased with the market acceptance of that system. While we've also repeatedly heard from our customers, both our customers and the customers of our competitors, some concerns about the types of fixed networking system -- or about all types -- I'm sorry, all types of fixed networking systems. Water utilities are generally not equipped to deal with network receivers located in our water towers or utility poles. Further, no matter how good a network radio may…

[Operator Instructions] Your first question will come from the line of Mr. Richard Eastman from Robert W. Baird. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: Just a couple of questions. On the cost side, the operating expense number decreased sequentially by close to $600,000. Is that -- can you explain that? What -- how did that happen?

Third quarter or fourth quarter? Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: Yes.

We did take an obsolescent charge in the fourth quarter, almost right about that number that you're talking about. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: Okay. And was -- when you look at the full year calendar '13, if you look at your R&D&E investment or expense, did -- how did that -- did that grow year-over-year and at what rate? I mean, we've got a lot of new product introductions, I know some of this was Aquacue. But I'm just curious, with your operating expense, consolidated operating expense down year-over-year, did the R&D&E piece grow?

R&D for the past -- for calendar 2013 was about $10.5 million. It was $9.6 million in 2012. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: Okay. So we're still investing there, but the rest of the savings is coming out of the selling, marketing and G&A. And then, hey, just a question on pricing. I think there was some suggestion, Rich, that we would raise prices in January to offset the cost compression from the no-lead meters. Did that happen? Sorry, did I lose you? [Technical Difficulty]

I'm sorry, I had my microphone off when I was speaking.

And for those who know Rich, there is a the reason for that.

Yes.

Let's move on.

And answer to your question, Rick, yes, we did increase the prices on January 1, on our utility products, and it was designed to offset some of the impact of the switch to the higher cost no-lead. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: Okay. And can you just -- in the context of '14 and as we move forward through the year, can you just give us some sense of what your expectation is for gross profit margin trends? I mean, we now have some price here. We've got good volumes. We've got volume growth in the utilities side. We don't on the industrial side. I mean, can our gross margins -- can we get back to 37% or...

Well, I don't want to try to give you a forecast as to what we think gross margins will be in 2014. I will say that we are hoping to see higher gross margins in '14, obviously, than we saw in '13, driven by the price increases, but also by the mix of products. In '13, we did see weaker sales of our industrial products. They carry a higher margin. So we hope to see -- if those come back to normal, that stronger mix should give us some strength in the margins. The other impact is going to be copper. Right now, copper prices are pretty low. I think they're below $3.20 a pound.

Yes.

If they stay down that low, we should see some advantage also. But the question is, where will they go? Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: Okay. All right. And we'll still have the depressing effect of the Elster sales, the Elster share gains. But we do expect industrial products to be higher in '14 than '13.

Yes, we do, and we expect an increase in industrial products. Elster, as we move through '14, we should see some opportunities to start repricing at some of those accounts.

Your next question will come from the line of Ryan Connors from Janney Montgomery Scott.

Kind of question on -- actually, I want to flip the margin discussion there on its head a little bit. Your margins were up, the gross margins, sequentially, despite the typical seasonal kind of dip in revenue and the lower industrial sales and the Elster customers, which indicated a lower margin. So what -- to what do you attribute that kind of sequential improvement in gross margin there?

We're both staring at each other right now because we don't have the third quarter numbers in front of us. Do you know what the margin in the third quarter...

I have it at 35.6 in 3Q, 35.8 in 4Q, so 20-basis-point increase, which is...

No.

Ryan, that's noise. That's within the noise level of it because that can just be a mix between radios -- meters with radios or meters without radios. A small shift like that is very hard to explain. I mean, we can go into the granularity and find out exactly, but it's probably just a small change in mix.

Okay. But still pretty impressive given that you've noted a few headwinds to margin there.

Yes, but we have most of those headwinds also in Q3.

Okay. Fair enough. Rich, you mentioned the Middle East contract, you also mentioned selling some of the new products outside the U.S. Historically, Badger's kind of been very much a North American company. Should we be interpreting that as a more aggressive push to go international? And if so, how aggressive are you going to be with that? And what -- how materially do you think that can be over the next few years?

Ryan, I think you can interpret that more as a change in the global markets. Historically, the water meter markets around the world have been regional. And what I mean by that is that North America has been kind of a market that preferred positive displacement meters rather than velocity meters, other countries wanted velocity meters but perhaps, different lay links. There were all different technologies that were preferred in different regions. What's happening -- what's driving this opportunity for Badger Meter is the global shift to electronic metering, where all of a sudden, whether you're using one mechanical technology or another doesn't matter because we're all moving to -- or a lot of the markets are moving to electronic. So our introduction of the E-Series meter is what opened that door for international sales. And the first place where we found significant opportunity is the Middle East. And the reason the Middle East is a significant opportunity is that although those meters are more expensive, they are -- they hold their accuracy longer and they're very robust and provide good information, and in some areas in the Middle East, water is extremely valuable. And so these countries in the Middle East want very high tech, latest technology meters, and that's where we found the opportunities. Also, electronic meters generally can't be impacted by sand that might get into the water, whereas mechanical meters can be impacted by that. So that's another selling point for why the Middle East is so interested. So what we found so far is that we didn't even have to really modify the product much. The Middle East countries said, we'll take it as is, we're very interested in this technology. And that's given us an opportunity. I think we're going to continue to pursue…

That's interesting. And one last one for me, guys, is just on this Elster issue. I guess, one of the concerns, is the Elster customer, so to speak, just a different type of customer in the sense that they went after the lower-end product historically and they're just not willing to pay up? And, I guess, how confident are you that we can migrate those customers toward either the higher end offerings or higher price point going forward?

Well, let me try to answer that by segmenting those Elster customers. You're right, there are some Elster customers who, perhaps, were attracted to the Elster offering because of its low price. And it may be a challenge for us to get higher prices there, but we will certainly try. And frankly, without Elster in the marketplace, we may have a better opportunity to get that. But there are also a lot of Elster customers who are simply loyal to Elster. They had been buying the Elster product since back when it was Kent Meters, and they're familiar with it or comfortable with it. It was a relationship sale. They like having a company that they know and that they can rely on, and Elster did provide that to them. Therefore, we feel that being the incumbent, picking up that Elster contract, to them, that will be very important, that we are in there as the incumbent providing good levels of service. And that when that contract comes up, it won't be so much about price, it'll be more about the relationship and the service that we've been providing for them. And where price is an issue, okay, we still are a better value when you present-value the meter over the life cycle, because the meter is larger, it's more robust, it has fewer turns, it holds its accuracy longer, that additional revenue has a value. And if we can just demonstrate that, we even can compete on price in that sense, right?

Your next question will come from the line of Chip Moore from Canaccord.

On BEACON, guys, can you talk a little bit more about the metering as a service model? Sounds like an exciting opportunity. Just the working capital commitments, cash dynamics and then the initial reception you've heard out there?

Sure. Well, one interesting thing is that we introduced BEACON to our sales force 2 weeks ago at our annual sales meeting. And last week, at the DistribuTECH show in San Antonio, we introduced it to the public and did the press release. We have offered our -- we have offered the market, a starter kit, if you will, where we'll give them, what is it, 10 BEACON radios, and just to get them started so that they can go out and put it in their systems and see if they like it, for a fairly compelling price. We have already gotten a number of customers. My Vice President of sales is kind of shrugging. She says about a dozen. In just one week or less than a week, we've got a dozen customers who stepped up and said, “Please, give me those starter kits. I want them right now." So I'm very excited about the acceptance of this. That we -- we normally don't see that. Normally, you have to make that visit out to the customer and kind of sell them on the idea. Just based on the press release, we've gotten a lot of customers calling and saying, "Give us some of these, we want to see them." So that's pretty exciting. The BEACON system itself is a managed system, and the reason it's a managed system is because the challenge with cellular has been in battery life. Other people have had cellular radios out there that you can put on a water meter that aren't driven by battery, but you can imagine, if I told you your cellphone had to make a daily call, transmit a bunch of data for 20 years without ever recharging, you'd laugh at me and tell me that can't be done.…

And to your question about working capital, for the most part, the meter is purchased upfront just as we do today. And our -- any costs associated with the service are paid by us monthly and we're collected from the customer monthly. So there really is no basic working capital needs upfront.

Perfect. That's very helpful. And then just back to the Middle East E-Series order. It sounds like that was just a Badger product. Did you work with any partner there? And then where you stand on some of those white-labeling opportunities.

Generally, when you work in the Middle East, you do want to work through a local distributor, a local company. So we do have a local distributor over there, a local rep that we're working with. But it was a great opportunity, and we see other ones that are over there.

And in terms of offering the radio, just, for instance, to Europe, we're still working on adjusting the frequency. We're very close to having that project done, so we don't have any imminent projects, but we have to finish the upgrade into the European frequencies.

Rick is referring to offering the ORION SE radio, the simultaneous fixed network drive-by radio. Obviously, the BEACON doesn't require -- the ORION Cellular doesn't require a frequency change, but the other one does. And we do have a partner that we are working with who will be private-labeling it once it's done. We expect to have it done within the next few months.

Your next question will come from the line of Brian Rafn from Morgan Dempsey Capital Management.

Can you give me a sense -- I want to hear those -- given that here, in Milwaukee, it's been like raw cuts and Ice Station Zebra, all right, you're saying then that because of the snow-covered depth not being measured in feet, that it's in inches, that snowfall in subzero really hasn't had an impairment to 2014?

Well, first off, Brian, your reference to Ice Station Zebra tells me that you're not under the age of 30. But you're right. Frankly, what we're actually seeing -- and there was an article in the Milwaukee paper yesterday from the head of the water utility mentioning that the polar vortex deep-freeze that we've been seeing has caused an inordinate number of water meters to freeze and break. And they are out there replacing them even now. So to some extent, extreme cold can be a positive for us. But the unusual cold doesn't normally impact our business. What people -- when people think of harsh weather, they think of high volumes of snow and they think of low temperatures. What really impacts our business is snow cover. Whether that's 1/8 of an inch or 3 feet, it has the same effect, which is the water utilities do not send out crews to replace meters. Because then the Northern clients, they don't want people tracking snow in other people's basements. And in the Southern climates, they don't want their crews digging around the front yard through a layer of snow, looking for the pit lid. So even a small covering of snow all across United States can have an impact. And that's what we saw a year ago when the snow cover in North America in the first quarter was about 22% above normal. This year, what we're seeing is, yes, some extreme temperatures and a lot of snow in places, but the snow cover, as far as reaching far to the south, is not having the impact.

And I'd say, we're really talking the eastern half is in ice age, because California has been perfectly blue skies and sunny because they're in a draught right now. So this weather pattern does have impact. And the other thing, quite frankly, Brian, it's the mix of customers that we have at any point in time. The other thing we talked about last year in the first quarter was weather impact with the aftereffects of Hurricane Sandy. Because we saw significant decreases in those 8 or 10 states that we saw substantial sales decline, upwards of 30% in some of those states, and we're not seeing that this year either.

Okay. Yes, that sounds good. Can you talk a little bit -- you mentioned a little bit about kind of the rollout, the adoption cycle of the ORION SE and this new BEACON managed product with the cellular. Who do you kind of see as your first mover? I know you mentioned you had 12 queries for the starter kits the first week or so. How do you see that -- who is first mover, the first adopter? And are these replacements? Is it fixed network guys? Who really looks for this the first couple of years?

Well, my initial reaction is who's ever next up in queue to do a change-up, because, quite frankly, we think the product is the next -- it's the new standard. And it's just like if you walk into an Apple Store at any point in time, they're going to give you the latest and greatest, they're going to sell that first. If you want an iPhone 5, that's what they're going to sell to you today. Do we still have other products we're going to sell? Yes. And once we sell you on the features, we think a lot of people will move towards the BEACON AMA system.

Okay, okay. You mentioned, too, a little bit about the radio boards. Any longer-term inflation there or is it pricing? Or was that just kind of an oddity to the year?

It's not so much the pricing as much as the ratio of the euro on the dollar that had impact. The pricing was -- is actually fairly stable. We just happen to pay for our radio boards in euros.

Yes, okay. Okay. Yes, that sounds good. And then the price increase, did you comment numerically on that, the low single-digit type increase? I know it fluctuates product to product, but any color on the percentage?

No, you got all the color you're going to get and no more.

Okay. And then just one kind of a housekeeping question. As you go into 2014, certainly, the automatic meter, AMR technologies, what would you say or how would you kind of clarify the installation rate of meters with radios versus what's already infield installed with radios at this point going into 2014?

I know Richard's got the numbers off the top of his head, but it continues to grow year-after-year. Go ahead.

Yes, in 2013, 62% of the meters we shipped had radios on them. So that tells you that, that continues to grow because just a couple of years ago, it was closer to 50%. So we're up to 62% in '13. I would expect it to grow again in '14. Meanwhile, what's installed in the field, boy, that's getting to be a really tough number to come up with. We've got estimates that say that we're probably converted in the mid- to high-30%, somewhere in there. But the problem is nobody really reports what radios are going on new -- in new service -- in service territories where they did not have radios before versus water replacements. So it's becoming a harder number to get. But I can tell you that 62% of what we shipped last year had radios on them.

Your next question will come from the line of Glenn Wortman from Sidoti & Company. Glenn Wortman - Sidoti & Company, LLC: Looking back, it does seem to jump around somewhat, but on the municipal side in a typical year, which do you view as the seasonal stronger quarter, 4Q or 1Q?

I'd say 4Q, historically. And then Q1, I mean, we've got years where Q1 has been the strongest of the year. Generally, we always say 2 and 3 are our strongest quarters. And that's always -- you can always argue which one's first or second. Generally, Q1, if I had to guess, normalized would be in third place and Q4, historically, has always been in fourth place in terms of order of the magnitude. Now last year was unusual. We actually -- Q1 was actually much weaker than Q4 in terms of earnings. So -- but [indiscernible].

But I would...

Our expectations are that Q1 will be stronger than Q4 going into a given year.

Correct. And part of the reason for that is simply the number of work days and shipping days. In Q4, with the holidays, you lose quite a few days. And especially with our utilities being governmental entities with governmental employees, there tend to be a lot of days off in the fourth quarter. Glenn Wortman - Sidoti & Company, LLC: Okay. And then the -- the $1 million contribution from Elster customers that you highlighted, does that include radio sales as well?

No. For the most part, it's primarily meters. Elster was really not big into radios. And then for the customers that did buy radios, normally, they bought those separate. Obviously, we're going to work on those -- right, they bought them separately from an Itron or...

From someone like that.

Or somebody else.

So we will work on them and try to convert them, so when they do buy future purchases, they get the radios through us. Glenn Wortman - Sidoti & Company, LLC: Okay. And then so, obviously, this may be a tough question to answer, but then just looking at the total potential contribution from the Elster customers, if you kind of -- if you're successful on some level with radio sales, what do you think that ultimately can shake out as your annual revenue gain?

Perhaps, if we -- I think Elster had about $20 million in mechanical meter sales. And if we capture half of that, that would be $10 million a year. I would hope we could do something north of that. Glenn Wortman - Sidoti & Company, LLC: Okay. So yes, $10 million of that. That's just the meter, that excludes the radios?

Right. Glenn Wortman - Sidoti & Company, LLC: Okay. And then finally, I know it's, obviously, not a core focus here, but, I mean, any update on some opportunities on the gas radio side, if any?

No, we still have quite a few gas customers, but they're small utilities that have preferred that technology and have asked for it. The only large utility we had was Duke Energy. Duke -- a part of the service territory with it, then slowed down, eventually stopped at the change out, not because of any problem with the product, but because they decided not to go into other territories. They were very involved with Southern Company and some other issues they had, and so that project came to a halt. It could start up again, but if it doesn't, we're just going to continue to sell a few million dollars a year of those radios.

And remember, the reason we got the Duke orders that they bought -- the decision was made on the electric side first, right? They bought Echelon and Echelon did not have a solution for the gas meters. That's where we were brought in. Normally, we're at a disadvantage because normally, the decision on -- especially on combined electric and gas, is made on the electric side first. And if they pick the Sensuses or the Elsters or whatever, they have solutions for all of those. And so, I mean -- and so what Rich was referring to is a lot of small gas utilities where they're just standalone natural gas utility or municipal gas distribution system, that's where we do have the advantage and we'll continue to sell them. I will point out, again, it's not core to our strategy. And if we never sell another radio onto the natural gas business, we have nothing to write off. So, I mean, it's kind of just -- Rich characterized Duke a couple of years ago. I believe it's a lottery ticket. So we'll continue to do it, but we're not devoting as much effort there. It's kind of an offshoot off to the side.

Your next question is a follow-up from the line of Mr. Richard Eastman from Robert W. Baird. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: Just -- I want to just double back for a second. So the ORION Cellular with this BEACON system, AMA, given the starter set approach, I guess you're suggesting, this product can be deployed at standalone points within an existing system since it uses cellular?

Exactly. And, I mean, that's a very good point, and that's why somebody can buy a starter unit with 10 or 15 units and just go out and put them on a few houses, and it isn't like you have to put up the infrastructure. They just start using it on those. So... Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: And so, again, the -- and then the cost of that radio and BEACON system, that cost is borne -- upfront cost is borne by the utility?

The hardware upfront cost is borne by the utility. The monthly fees that are charged after that cover the software upgrades, the cellular costs, the cost of operating the cellular tower, and also the -- any upgrades to the cellular radios halfway through their life. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: And you will build them? Or does that show up on the utility bill? Is there an incentive for the utility to push the system, namely, an incremental subscription fee on the software side? Is there any incentive for the utility itself to push this product to the consumer?

Well, directly, what the utility will be able to do is offer this service to the consumer. Much as if you look on your electric or gas bill today, you can get data on your personal account. You're not seeing a separate line item on your electric or gas bill to pay for that, it's rolled into the expenses of the utility. And more and more consumers, i.e., customers with the wattages, are asking for that information. So it'll just be buried in. What... Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: But there's not a -- is there a revenue incentive to the utility to use this product, namely, a subscription fee that comes back through them monthly?

Yes, because -- yes, they won't have to deal with all the things about having to worry about their own IT or their own additional servers or whatever to capture this data. When their customers are already demanding the information, this is something that we can handle for them and they can take in -- specially here in Milwaukee, they can take care of unfreezing the pipes and getting the water flowing again. And really, that's the selling point of this system. It's the ease-of-use.

They also won't need bucket trucks and trucks to build out and maintain network devices on towers, because utility -- electric utilities have bucket trucks, water utilities generally don't. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: Yes. So from a maintenance standpoint, that's helpful. And then, so is Badger going to do the billing on this monthly fee?

Yes, through the utility.

Through the utility. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: Okay. So you're going to bill a monthly fee to the utility?

Right.

Right. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: And they're going to pass it along and their bills to the consumer?

In their rates.

In their rates. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: Okay, okay. All right. And then just one more question. And, Rich, on the industrial flow side of the business, it just strikes -- I know you had a tough comp in there year-over-year, but shouldn't that business be responding to the general industrial conditions? And U.S. PMI, I'm surprised that business has been soft in the last 6 months. I mean, what turns the industrial flow business around here for growth in '14?

Well, unfortunately, that -- or maybe fortunately, that business is very diversified. It's everything from irrigation systems and it's linked to ag spending, to construction of new plants, to addition of lines in plants. So a lot of it is industrial spending. And the industrial expansion has lagged this market recovery. We all know that. Companies are a little slow to construct a new plant or put on a new line until they're absolutely sure that we're going to see this -- the economic recovery continue. So I think we're starting to see that happening, and it's more linked to hiring. When you start to see them hiring people, you know that they're expanding their capacity. And when they expand capacity, they need metering as part of that. So I think that's what really happens, is as we see capacity expansion in the industry, whether it's in the ag industry or the dairy industry or the chemical industry, that's what would really drive more of our sales.

[Operator Instructions] Your next question will come from the line of Richard Verdi from Ladenburg. Richard A. Verdi - Ladenburg Thalmann & Co. Inc., Research Division: Most of my questions were answered already, but I do have one question left. For the municipal water line, can you discuss activity in orders? For instance, are you see more activity from larger or smaller water utilities or any certain region of the U.S.? Does one market look particularly strong in another week? Just a little color surrounding all that would be helpful.

We get this question a lot because the U.S. water market is very segmented.

Fragmented.

Well, we're not segmented. [indiscernible] He doesn't like me to use the word segmented because we operate one segment.

I'm noting this for the transcript.

Yes. But in the U.S. water, there are 52,000 water utilities. 400 represent about half of the metering base. So you've got 400 very large utilities. You've got about 4,000 medium-sized that represent about another 30%, 35%. And then the remaining 49,000 represent the last 20% of the customers, so -- of the meters. So it's very significant. So people are always saying, well, are you seeing one section of the market, maybe the larger utilities, heading one direction and the small utilities heading the other, and we never really see that. We really see the entire market moving pretty much in lockstep. It's rare that we would ever see the large utilities buying a lot of meters and small utilities not or something like that. So we really haven't seen anything like that.

And your next question is a follow-up from the line of Brian Rafn from Morgan Dempsey Capital Management.

Just a little more color on the Middle East orders. How do we think about that? Is -- are these large, massive, somewhat episodic in nature? Are they thousands of meters, hundreds of meters? Do we think of them like a conversion of a city like Chicago or Philadelphia or some of these -- how do you think about those foreign sales?

I think, Brian, you think about them more like a conversion of a city like Philadelphia or something. First off, if one of the Emirates, for example, decides that they wanted to go to a particular metering system, it is a very large purchase over several years. It'll be very episodic, and then it'll be maintenance after that. We're seeing a lot of them are showing an interest in this and wanting to upgrade their systems. So that's really what's driving it. But it will be -- it will not be thousands of small utilities, it'll be a small number of very large utilities.

And at this time, we have no further questions in the queue. I'd like to turn the call back over to Mr. Rich Meeusen for your closing remarks.

Yes. I want to thank everybody for joining us today. One comment that I didn't get a chance to make, and I want to back up to that right now, is that I don't want us to gloss over the fact that one of the powerful offerings in BEACON is this ability for the end consumer of water to actually see their usage and be able to better manage their own usage. Right now, across the United States, there are a lot of drought areas. There are a lot of utilities that are under pressure from their communities to help their customers find ways to conserve water. And this BEACON system, with the ability to pick up an iPhone and actually see how much water you use today compared to what you've been using for the past several weeks, is a very powerful tool for the average consumer in helping them conserve. And we believe that utilities are going to be very interested in having a system like this and being able to offer it to the consumer. So I didn't want to miss that point. Other than that, I just want to say, again, we were very pleased with the quarter. We're very optimistic about 2014, very excited about the level of excitement and interest that we've already seen in the BEACON offering. And also in our E-Series and the other offerings that we have out there. So thank you, again, for joining us.

And ladies and gentlemen, this concludes your presentation. You may now disconnect. Enjoy your day.