Welcome and thank you for standing by. At this time, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. Today's conference is being recorded. If there are any objections, you may disconnect at this time. I'd now like to introduce your host for today's conference, Whit Kincaid. Thank you. You may begin.

Good morning, everyone. Welcome to Mueller Water Products 2018 Second Quarter Conference Call. We issued our press release reporting results of operations for the quarter ended March 31, 2018 yesterday afternoon. A copy of it is available on our website, muellerwaterproducts.com. Discussing the second quarter's results and outlook for the full year are Scott Hall, our President and CEO; and Martie Zakas, our CFO. This morning's call is being recorded and webcast live on the Internet. We have also posted slides on our website to help illustrate the quarter's results as well as to address forward-looking statements and our non-GAAP disclosure requirements. At this time, please refer to slide 2. This slide identifies non-GAAP financial measures referenced in our press release, on our slides and on this call and discloses the reasons why we believe that these measures provide useful information to investors. Reconciliations between non-GAAP and GAAP financial measures are included in the supplemental information within our press release and on our website. Slide 3 addresses forward-looking statements made on this call. This slide includes cautionary information identifying important factors that could cause actual results to differ materially from those included in forward-looking statements. Please review slides 2 and 3 in their entirety. During this call, all references to a specific year or quarter unless specified otherwise refer to our fiscal year which ends on September 30. A replay of this morning's call will be available for 30 days at 1-866-373-4993. The archived webcast and corresponding slides will be available for at least 90 days in the Investor Relations section of our website. In addition, we will furnish a copy of our prepared remarks on Form 8-K later this morning. I'll now turn the call over to Scott.

Thanks, Whit. Thank you for joining us today to discuss our 2018 second quarter results. I'll give you a quick overview of the quarter and then Martie will follow with additional analysis. I will then provide some further color on key performance areas later in the call. We will finish up with an update on our outlook for 2018. We had a very strong second quarter, growing consolidated net sales by 16.8% and increasing adjusted operating income 34.7% compared with the prior year. Our strategic reorganization and subsequent changes made over the past year are leading to improved execution of our key initiatives. We achieved our highest quarterly year-over-year net sales growth in five years. We benefited from lapping poor weather in the prior year and accelerated shipments from our price increases, which I will address later in the call. Most importantly, we are excited about the organic growth delivered at both infrastructure and technologies. We are very encouraged by the healthy demand in both municipal and residential end markets, leading us to raise our expectations for our annual net sales growth. The rapid rise in brass and scrap metal costs impacted our conversion margins in the quarter, especially for our project-related brass specialty valve business. Despite these headwinds from higher material costs, we improved our gross profit margin as we leveraged higher volume and executed our cost productivity initiatives. During the second quarter, we successfully implemented price increases for our valves, hydrants and brass products, and anticipate higher pricing will more than offset expected increases in material costs in the second half of the year. We remain focused on executing our key initiatives to grow and enhance our business as we accelerate new product development, drive manufacturing productivity improvements, and improve our go-to market strategies as a more customer-focused organization. With healthy end markets and focused execution of our initiatives, we remain confident in our ability to deliver strong, consolidated net sales growth and conversion margin improvement for 2018. With that, I'll turn the call over to Martie.

Thanks, Scott and good morning, everyone. I will start with our second quarter consolidated financial results, then review our segment performance. Consolidated net sales for the 2018 second quarter increased $33.5 million or 16.8% to $233.2 million, driven by higher volumes in both Infrastructure and Technologies. Infrastructure, which makes up approximately 90% of our net sales, accounted for $29.5 million of this increase. Gross profit improved this quarter by $22 million to $74.5 million and gross profit margin increased to 31.9%. Adjusted gross profit margin increased by 70 basis points, excluding last year's discrete warranty charge. As Scott mentioned earlier, in addition to the benefit of volume growth, our cost productivity initiatives and higher pricing have also helped grow our margins despite headwinds from material cost increases. Selling, general, and administrative expenses were $42.7 million in the quarter and $38.7 million in the second quarter last year. The increase was due primarily to higher personnel-related expenses and the additional SG&A from Singer Valve. SG&A as a percent of net sales decreased by 110 basis points in the quarter to 18.3%. On a trailing 12 months basis, SG&A as a percent of net sales was 18.7%. Operating income improved to $29.9 million. Adjusted operating income increased 34.7% to $31.8 million in the 2018 second quarter, compared with $23.6 million in the prior year. Our adjusted results this quarter exclude $1.9 million of expenses related to strategic reorganization and other charges. As we discussed before, we expect to report expenses related to our previously announced strategic reorganization throughout 2018. Operating performance was favorably impacted by higher volumes, cost productivity improvements and higher pricing, which were partially offset by higher material costs and higher SG&A expenses. Adjusted EBITDA for the 2018 second quarter increased 25.4% to $42.4 million compared with $33.8 million in…

Thanks, Martie. I'd like to address a few key areas and then discuss our updated full year outlook. Infrastructure's strong second quarter net sales growth of 16.2% was driven by growth across all of its major product lines. The improvements we have made in our go-to-market strategies have enabled us to achieve strong organic growth. We have realigned our sales team to become a more customer-focused organization to serve the needs of all customers. This included developing key account strategies and changing incentive programs. This quarter, our volume growth also benefited from lapping the severe weather conditions in the Western part of the U.S. in the prior year. Additionally, we believe customers accelerated shipments in the second quarter ahead of our announced price increases. And we believe that distributors are more comfortable with higher levels of inventory entering this year's construction season. In February, we announced price increases for our iron gate valve, hydrant, and brass products in the United States and Canadian markets. As part of our enhanced go-to-market strategy, we successfully executed price increases by working closely with our channel partners. Our customers were given a window of time to order products at the old price and many took advantage of that opportunity. Although this had a favorable impact on our shipment volumes in the second quarter, the additional benefit from these price increases will occur in the second half of the year. While we have benefited from higher pricing over the past four quarters on both a sequential and year-over-year basis, we have not been able to fully offset the increase in material costs in the first half of this year, due to the continued rise in brass and scrap metal prices in 2018. Second quarter material costs rose about 6% compared with the prior year quarter.…

Thanks, Scott. Turning now to some of the other expectations for our 2018 performance. Corporate expenses are expected to be between $33 million and $35 million. We expect depreciation and amortization to range from $45 million to $47 million, net interest expense to be between $21 million and $22 million and capital expenditures to range from $50 million to $60 million. We anticipate that our adjusted effective income tax rate for the full year will be between 26% and 28%, excluding any one-time impacts from the new tax legislation. With that, operator, please open this call for questions.

Thank you. Our first question comes from Seth Weber with RBC Capital Markets.

Hey. Good morning.

Good morning, Seth.

First question, the tempered incremental margin guidance for the year, is that purely a function of material cost inflation or is there some push-out on the Tech profitability ramp that you might have previously thought was coming? Thanks.

No, it's all associated with – like, if you normalize for price and material and take them both out of kind of the unexpected range, you'd see that we're right below 40% on our conversion margin when you actually do the math. So what you have is the inflation on one hand and – which we're offsetting with actual prices, diluting the conversion margin to the tune of about – I want to say it's like 9% or more, but that is what it is. And, no, we are not tempering our expectations on Technologies. I think what happened in Technologies was, I was pretty pleased with the – what worked out to be about a 25% conversion margin. And then we came over the top with that $9.8 million. We remind investors and people on the call; we took a charge a year ago for some product that had been made prior to 2016. We had some true-up associated with what that population looked like and increased that population, so we took a charge. We didn't adjust it this time because I just think we – it wasn't material, but – and the team has to overcome those kinds of things in future anyway. So, yeah, that's kind of where we ended up on the Technologies business. Was kind of in line with what we expected, but unfortunately had to take a warranty charge.

Sure. Okay. And then, you took your CapEx number up again. I think this is the second quarter or third quarter in a row. Is there any color on what you can – that you could share with what you are doing with that extra capital?

Sure. We are looking – as we said in the prepared statement, we've announced an expansion of our capabilities in the Chattanooga facility. We'll be able to buy additive manufacturing; is a nice way of saying that we're going to be adding some new technologies to both the tool making capabilities and the – and curing technologies, so that we hope to reduce our cycle time, become capable of more custom capability. And so that project is actually pretty large and it's a multi-year project. So we expect that that for the piece that will be invested this year is the main driver in why the guidance went up.

Okay. Thanks. And then, sorry, just to go back to the warranty expense in the quarter. Does that – should that be it then for that expense going forward or does that continue to be an overhang in the following quarters?

No. I think the – I don't want to foreshadow one way or the other. We do reliability studies on this stuff all the time. I think Martie is better prepared to answer how she does the true-up on the accruals every quarter that she looks for experience and things like that. And I don't know where you are in that process for this quarter, but it will all happen again and again and again.

Yes. No, look, that is something that we'll continue to evaluate over time. We do use third parties that will help us in terms of assessing various things in and around rate of failure, et cetera. So that is – we will continue to monitor it and do expect to continue to monitor that to see where we are in terms of what the failure rates are that we're seeing, what our costs are to...

Remediate.

...remediate those, how we address our customers, et cetera.

I wouldn't want to call it an overhang. I think I would just go back to what I said a year ago; look, there is a population that were plotted poorly prior to 2016. That's part of being in this business and we have to find a way to make sure we manage and keep those customers happy. But I'll reiterate for everybody; ever since we put in the new plotting process, our experience of failure rates is way less than one half of 1%. So, I think we've licked it. We're just going to have to live with these things. From time to time, whenever the Finance Department decides they want another reliability study, just – well, go ahead.

Okay. Thank you very much, guys. Appreciate it.

Thank you.

Our next question comes from Brian Lee. Your line is open. Brian Lee - Goldman Sachs & Co. LLC: Hey, guys. Thanks for taking the questions. Maybe just to round out that line of discussion – I know, Scott, you said you don't want the team to continue to be adjusting for these factors and that's why you're not breaking it out, but just for our modeling purposes, can you give us a quantification of what the warranty impact was on margins for the quarter in Technologies?

Yeah, we...

Yeah. Conversion – yeah, if you look at conversion margin for Technologies sort of was about a 25% conversion margin for the quarter. Brian Lee - Goldman Sachs & Co. LLC: Ex the warranty issue, right?

For second quarter. Brian Lee - Goldman Sachs & Co. LLC: Just to be clear, ex the warranty issue, correct?

Yes.

Yeah, ex warranty issue. Brian Lee - Goldman Sachs & Co. LLC: Okay, sorry about that. And then I guess on Technologies, just – pretty good result on the top-line. Wondering if there were any big projects that helped in the quarter and if you expect those to persist through the next couple of quarters? I think in the past – or maybe last call, you had talked about getting back to year-on-year growth rates starting in fiscal 3Q for Technologies. So it seems like you are a little bit ahead of schedule, but wanted to see if there were any timing issues related to projects or anything else in the quarter?

No. I think maybe you're referring to some of the push-outs we've had in the past. But just remind everybody that 100% of this business is project business, so, with all projects, but there's not a lot of carry on, but – no, nothing of note. I think what we're seeing is I think what the sales team has done where we now reward people for selling through distribution or we reward people for the old system sales team that still exists. We've put in the key to town (26:57) strategy. What you are starting to see is some of the distributor regions now are starting to take product, whether it be visual read or even drive-by or upgradable AMI and we're starting to get some pull-through into that channel. I think the comp program, I think the changes, the sales organization has made in both the structure and working together have led to incremental sales in especially the meter business. And that was the intent when we did the reorg and that was the intent when we changed the way we pay people in the sales organization. And I think we're starting to get some momentum there. I think those are the big drivers. Brian Lee - Goldman Sachs & Co. LLC: Okay. Fair enough. And then maybe last one for me, I'll pass it on. The working capital increase in the quarter, how should we be thinking about this moving through the next few quarters and then how it relates to any sort of target you have for free cash flow on the year? Thank you.

Well, I think you'll notice on the working capital, a big increase far and away is in inventory. And if you dig into it, you're going to see that the biggest increase in the inventory comes in the raw material area. And really what's happened there is, we're trying very hard to make sure that when we have an order book, that we're not short. If you think about taking a position – if you sell something and you don't have the raw material to make it, you're essentially short. So we have bought a brass indicator. We have bought higher levels of scrap steel to make sure that when we quote something, we know what it's going to cost to make it. So I think – Martie can keep me honest here. I think raw materials are up like $9 million versus previous year. So that's the bulk of the inventory increase. We have a little more WIP as well, and then inflation is driving part of the increase too.

We're going to certainly say a long-term target for us is to grow our free cash flow greater than our adjusted net income. That can vary in any given year, but we'd say over the long term, that's what we'd certainly look to accomplish. Brian Lee - Goldman Sachs & Co. LLC: Okay. Thank you. Appreciate it.

Our next question comes from Michael Wood with Nomura Instinet. Your line is open.

Hi. Good morning. At a high level, there seemed to be a lot of moving parts impacting volume growth during the quarter with weather comparisons to pre-buy. Can you just give us some more color in terms of how you're able to evaluate where underlying demand volume growth is? And are you still seeing the crowding out of water infrastructure or has that dissipated from – in the waste water?

I think that the crowding out has dissipated. That's why I think we're seeing in – kind of in our municipal market, about mid-single digits kind of growth in municipal. I think that – sort of, to remind everybody on the phone, there was a period in our last fiscal year, where water was – actually, municipal water was growing slightly, but it was really all in dewatering pumps and waste water management. And actual water supply investment was actually down year-over-year. I think that's reverted now in that when the census data comes out, we'll see that the sell-through from distribution into water infrastructure and water supply is probably in the mid-single digit range and that we are benefactors of that. To address your other points, we do think that there was a lot of moving parts. And certainly it wasn't – I never want to be the one that kind of says, ducks, (30:34) or try to take credit for something that's not there. I think we know we had an easier comp in Q2 because of Western flooding last year. And we saw that kind of normalize here, so that was part of it. We saw a fairly healthy price environment where we were able to offset the inflation. So that kind of basically inflates your sales, but it doesn't inflate your profits, just really offsetting cost. And that was a piece of it. We had about a point of Singer Valve. And then we had what I will call some of the buy-ahead in distribution that kind of moved some sales out of Q3. But I think the underlying demand, take it, what we said in the prepared statement is that resi, kind of high-single digits; muni, kind of low- to mid-single digits is where we think we'll end up for the whole year. And I think that will normalize when we get out of the lumpiness of the quarter-to-quarter. And remind everybody that really my primary driver way back when, when we said we wanted to kind of get the yearly guidance away from this quarterly guidance, because there's just too many moving parts in each quarter.

And you said distributors were happy to carry higher inventory. How does that compare with the more typical year? I know last year was very unusual with basically not seeing a pre-buy. So can you compare that maybe with two years ago or when you were in a more normal environment? And how that stands in terms of your comfort level with where the inventory is?

Yeah. The way I would answer that is, A, I wasn't here. But I think in general, since 2008, this is the most bullish we've seen the construction markets. So I think that anybody involved both in Infrastructure and resi and land development, the sentiment right now if you look at development and all of these things are, this is the best time we've had for that kind of development since 2008 and the crisis. So certainly, I think distribution, understanding that that was going to accelerate, was more bullish as well. So I would say it's probably been the best in 10 years, but I wasn't here 10 years ago.

Thank you.

Next question comes from Ryan Connors with Boenning & Scattergood. Ryan Michael Connors - Boenning & Scattergood, Inc.: Great. Thanks. Good morning.

Good morning. Ryan Michael Connors - Boenning & Scattergood, Inc.: I wanted to just clarify conceptually where we stand right now on actual versus expected price cost management, because on the one hand you say that you sort of largely offset raw material inflation with price in the quarter. And that was kind of actual. But on the other hand, you say that one of the drivers in the quarter was customers sneaking in orders ahead of the price increase, which would suggest that maybe price wasn't as big a factor. So was it really more the volume leverage that drove the margin in the quarter? Or was there really – how much was price cost really a factor given the pre-buy?

So let me clarify a couple of things. One, I don't think anybody sneaked anything. I think that we went to them and said, the price is going to be effective this day. And that is our custom to give them 30 days, so they can change their systems and then they have that window to pre-buy and they have a fixed number of releases, things like that. So it was in our plan all along. The other thing we're doing is we're kind of mixing our metaphors. We're comparing price to a year ago as opposed to previous quarter. That's why I keep talking about sequentially and year-over-year. So on a year-over-year basis, I want to say, Ryan, price was, think about it in that $4 million-ish range as was inflation in that same range. So they virtually offset. I think there might have been $100,000 difference. Unlike some of the people who talk to you, they take their cost productivity and their price, and they look to offset inflation. And we try to make sure that the markets are healthy. I think healthy markets have price offsetting inflation. And then we as people running a business take the cost productivity and we make intelligent investment or we let extra operating income flow through or invested in SG&A or other new product activities. And so, I think, overall, in the quarter, as we said, they offset. And if you took the sales reduction for the $4 million of pricing, you increase the – the artificial cost increase, you would see that we were right around 39% on the conversion margin. So, it's basically all dilution, as I said before. But I think that the reality is that going forward, the big increases that we saw a year ago –…

Yeah. I think that's a fair question. And I think the way we think about it is – I'm going to do this at a very high level – that we think that the actual volume increase that you've seen in Q2 is less than 5%, but more than 2%. So if you were to count hydrants, count valves, count pounds of brass process, that's the kind of number you would see so far. And then if you were to take that and take the revenue part of it – and I'm holding mix kind of flat here – I think that's what you're going to kind of see in the volume. So now then, the next part of that question comes back to, well, of that, how much of it is driven by the resi increase versus how much is driven by muni. And I tend to think muni is about half of the resi volume right now in terms of percentage growth. It's not as hot in muni as it is in resi. Ryan Michael Connors - Boenning & Scattergood, Inc.: Got it. Okay. That's actually really helpful. Thanks so much for your time this morning.

No problem.

Our next question comes from Walter Liptak with Seaport Global.

Hi. Thanks. Good morning. Maybe just a follow-on to the last one, in talking about the muni growth versus resi. The resi part of the growth is – was it an inventory buy that makes you feel so confident about resi or is it actually material that's going into the ground because we had heard about some disruptions related to weather impacting some of the residential in the quarter. And how does that play into the, kind of your views with regards to the year, especially of second – next quarter?

Well, I'm not sure if I followed, but let me try it this way. We believe land development is in a really good phase right now with home inventories and housing starts with some room to get back to their natural, let's call it, steady state. So, let's say 1.5 million – 1.4 million to 1.6 million is steady state in housing formation in the country. I think last year, we finished at 1.190 million or something like that. So, there's still 20-ish percent growth left until we get to steady state. Now, we had an unusual period where we had far less inventory of lots waiting to be developed as a result of the overhangs that existed for many, many years. And now, we're starting to see that pick up again. We're starting to see subdivision developments where people lay curb and fire hydrant and valves and all of that stuff kind of commensurate with housing starts at 10%, 12% growth rate through (40:01). So when you normalize for the full year, I think that we have in front of us a really good opportunity to see that – what we keep saying is that kind of high single-digit growth in the residential land development and housing start business driving our business. So, I'm not sure if it's a sentiment (40:25) thing. We're confident that people who are buying inventory are selling it through and that – and distribution volumes as they report, we think they are healthy too.

Okay. Sounds good. And if I could just switch gears to the Technologies segment. I wonder if you have any new thoughts on when the segment may begin to turn profitable. It sounds like some of the sales channel changes are really starting to pay off and you're happy with the growth rates. So, wonder how you are thinking about profitability after this quarter.

Yeah. This is one of those ones that try very hard to not say everything I'm thinking. The reality is, is it's a project business. We're trying to get to yearly. It's a really small part of the business. We are going to focus on continuous improvement or Kaizen and just keep driving, putting one foot in front of the other. And at the end of it, I expect we will be profitable. Now, I know everybody wants a timeline. And I've said it before, I'll say it again; we can make what we call Technologies profitable tomorrow. We could get all of our engineering cost and purge it from the segment and it would be profitable. And it would be the stupidest thing I could do. We have just introduced a Hydro-Guard product that has – uses a cellular technology link that the Technologies team developed for the core Infrastructure team. We are working on expanding the capability of the nodes in the hydrant so that one day we could look at pressure; we could look at turbidity or alkalinity or chlorinity in the water down at a gate valve and say, hey – back to an operator – this is good. All of that technology, all of that development is engineered in that segment. And as we adapted to these other parts of the business, we have to continue to invest in Technologies, we have to stay high and hot on engineering cost in order to make sure that we don't become ironmongers in the future, but that we are the technology solution for everything in Infrastructure, whether it be a gate valve, a butterfly valve, actuation, fire hydrants, you name it. So I really – I think somebody wrote recently that management emphatically said they would not…

Okay. Thank you for that thoughtful answer.

Our next question comes from Zane Karimi with D.A. Davidson. Your line is open.

Good morning. Zane on for Brent Thielman. First off, I was hoping to get some color on something you mentioned last quarter. You spoke to the contract negotiations in Technologies business that you think could drive fiscal 2019 shipments. I believe you said that was AMI. Can you give us some updates on those?

I think that we have under negotiation, contracts currently. We signed contracts last quarter. I think where we are, though, is right kind of where I said last quarter. And I'm trying to remember what I said, so I'm looking, Martie, at what we – Martie's referring to, but I think we might have been talking about a couple of municipalities that we did go ahead and land and we did go ahead and book that the legal folks were working on. So I think that, yeah, we are pretty pleased with the order book in AMI in the quarter.

Thank you. And then, just to follow it up real quick, beyond materials, are you experiencing cost pressures in logistics; freight, for example, and how meaningful is that for you guys?

Sure. Yeah. I mean, there's freight and it is not as meaningful as we look to mitigate. One of the things we're trying to do is make sure our load optimization – I think we have a little room left in load optimization where we could kind of lump the freight impacts, the freight inflations. But, overall, it's nowhere near as meaningful as the brass and steel inflation. And so, we tend to focus on it. But if you were to break our inflation down, in the quarter, we had a little bit of labor inflation as we had some increases that triggered February 1 at a couple of plants. We had some freight inflation associated both with diesel surcharges and scarcity problems in the hauling industry. And we also had some inflation in just purchased component parts that were based on raw materials that have inflated like copper and brass and steel and things like that. So, all in all – but far and away if you look at the quarter, I think I said it was around $4 million. Probably 70% of that or 75% of that was associated with the raw materials. But yes, there is broad-based inflation. And I think it's something we as businesspeople all have to be thinking about because we may be in a period where it's something we have to be careful about and we have to take the appropriate pricing actions and have the appropriate discussions with customers.

Great. Thank you very much. I'll jump back in queue.

Thank you. Our next question comes from Joe Giordano with Cowen. Joseph Giordano - Cowen & Co. LLC: Hey, guys. Good morning.

Good morning, Joe. Joseph Giordano - Cowen & Co. LLC: Just question on the guide for the second half. Just given some of the pull forward in 2Q and the tougher comps you have in Infrastructure in the back half, just how do you parse out where the growth is coming from between your two segments in the back half?

Well, I think the vast majority of it obviously has to come from just the scale of the numbers. Infrastructure is like 80%, 90%...

90%.

...of our revenue. I think that Technologies will grow a little more on a percentage basis. But I mean at the end of the day, this is a sub-$100 million, $100 million kind of number I think. So obviously, the vast majority has to come from Infrastructure. So I can't remember what the math was, but we're still holding to some – kind of that 20% number for the Technologies business that we guided at beginning of the year. Joseph Giordano - Cowen & Co. LLC: For 20% growth for the full year?

We have not given specific guidance by segment. We've looked at everything in aggregate. And so consolidated for the full year, we're looking at 7% to 9%. I think we were – certainly, Technologies had a 22%, I think growth this quarter, stronger growth in the second quarter. I think down a little bit in the first quarter. But we have not given specific guidance by segment.

No, you're correct. That is right. Joseph Giordano - Cowen & Co. LLC: Okay. Just curiously, your conversation earlier about Echo and on the leak detection side, I'm just curious how you view that landscape of that offering now, given some moves by other large players in the space to kind of enter leak detection through some smaller acquisitions as well. So how do you see that landscape right now?

Look, I think it's great. And I think there's room for everybody. I think the techniques are vastly different. There is going to be a time for invasive techniques where you actually have to send something up a pipe. And I think that there will be times when you can't actually break into the drinking water stream and you need to do a non-invasive method. I think there will be times when you need to do kind of a pipe condition assessment. There'll be times when you need to do – but I welcome everybody into this space, because I think when you start thinking about non-rev water loss and awareness grows about the impact of non-rev water loss on utilities, that we will start to see better O&M performance from the utilities. And I think better O&M practices and better O&M behaviors and awareness will drive more business for us and for people like us. I think it'll grow our share of the repair market, and I certainly welcome it. And I'm not sitting here saying that, oh, we're going to compete on this. No, no, they are complementary technologies out there, that if you think about a triangle before you kind of say, I'm going to do this method and this method. And then when I need pinpoint accuracy on mission critical water mains with listening devices, they are 24 hours a day, 7 days a week, 365 days a year. Then there's solutions for that too. So I think as you go up the need scale, there is room for all of the techniques and they each have their niche. And they will all, without exception, grow as we start to wrestle with what is becoming a more and more precious commodity. Joseph Giordano - Cowen & Co. LLC: And then last from me, and I can check the 10-Q, but any update on the tax liability with Walter, the legacy?

Yeah. Go ahead, Martie.

Yeah. Just with respect to the liability, the case does remain in bankruptcy court in Alabama, just Walter Energy is in Chapter 7. We still don't know sort of whether or to what extent if any we could be liable for any of their open tax audits. And these audits have been very longstanding with the IRS going back to the 1980s. But I will say that we believe that if you look at some potential tax refunds for certain years and you apply them against the asserted tax liabilities that are out there that the amount of any net tax liability that could be owed, if any, would be substantially less than what the IRS has filed in its Proof of Claim. Look, we continue to monitor the case. Don't have a timeline, but as we have said and continue to say, we will vigorously assert any and all defenses that we might have. Joseph Giordano - Cowen & Co. LLC: Thank you.

Thank you. Our next question comes from Jose Garza with Gabelli Asset Management.

Hey. Good morning, guys.

Good morning.

Wanted to just kind of get your thoughts, Scott, on the CapEx numbers seem to be kind of going up a couple quarters in a row now. Just it seems that you're finding more as you keep looking. Kind of get us a level set of just what the maintenance level is and how to think about that over the next several years in terms of the incrementals as well that you'll be spending.

Okay. Well, one of the things that's going on, I told you, last quarter, we were actively looking at things that we could – while we have the higher tax kind of rate, we wanted to see if there were things that we could get in service, so that we get kind of the better tax benefit of having it all deductible in year one. That was part of it. And that the foundry capability increase in Chattanooga was the other part. And it's almost all new technologies and new capacity adding. Our ongoing maintenance spend has been a little less than half of the number you see there. So the old $40 million guidance, something less than $20 million is the maintenance level. But let me say this. As I look around and I see more and more technologies, cordless technologies, furnaces that could use 30%, 40% of electricity to melt, as I look at options to dose your steels for ductile, in mold or outer mold and holding for a better molding furnace there, I think there is still tons and tons of really good investments that rational investors would make in order to drive cost out. And I think when you couple that with what I believe are long-term trends that we'll see Chinese-produced products become more and more and more expensive, the more I believe there is an opportunity to recapitalize foundries in this country and make them greener and make them safer and make them actually more efficient than trying to import from a low-cost country, steel. And so, I'm not prepared at this point, Jose, to say it's going to be $100 million over 10 years or whatever a modernization thing would be. But I do – as I dig in more and more, I think that we'd be remiss not to do some of that. And I would like to point to all of our investors, go ahead and look at the gross margins from the improvements we've made. We are very pleased with the team's ability to translate investment, manage a project, bring it up on time, bring it up and get it to run at rate, and start achieving the manufacturing savings that we thought we could achieve when we made the investment. So, I think there are – I think it's a target-rich environment, and I think that we'll continue to do that elevated investment level for some time.

Okay. That's very helpful. And I guess if you wanted to comment just on kind of your M&A pipeline and how you're seeing things, and I guess a year after Singer, if you have any kind of thoughts there one year later?

Yes. As I've said before, we – the pipeline is more wholesome, and we have a better idea of what we want to do geographically, what we want to do technically, what we want to do from a channel synergy point of view. And so, we have more candidates in there. What I – my commitment to you all is that we will be disciplined. We will be disciplined around price. We will see a path to synergies before we pay what to me are some pretty heady multiples. And I've done this before. I have – in a previous life, I did quite a bit of acquisitions, and I know that the keys are keeping our strategic discipline around our original strategic intent and having great discipline around price because it's really easy to wreck a balance sheet buying things that you can't get your synergies on, and we're not going to do that. But certainly, a lot of properties out there, a lot of opportunities that we like, but we've got to be able to do it for what we think is fair value.

Fair enough. Thanks very much, Scott.

Thank you.

Thank you. Our next question comes from Seth Weber with RBC Capital Markets.

Hi, thanks. This is Brendan on for Seth. Thanks for allowing us to get a follow up. Two quick ones. The first is, I was wondering if you are willing to quantify how big the price increase was that you implemented. And then, second, I'd like to confirm a comment you made about second-half growth. You still expect technology sales to increase year-over-year in both the third quarter and fourth quarter, correct?

That is correct. Yeah, we expect to grow the business quarter to quarter as we go, but overall we got 22 points of it out of the way this point. And as Martie said, we're trying to stay in a yearly view to that business. Our fascination with the $80 million is – I don't know; it's going to be a small number. I mean, we're talking about $8 million growth or whatever. But it's going to be dwarfed by what we hope to be realistically $50 million or $60 million of growth, whatever the math worked out to on Infrastructure. But, yes, we expect to grow.

Okay. And then the price increase, are you willing to quantify how big that was?

Not really quantify. I mean, we have fixed contracts with certain municipalities. We announced the distribution price increase. We got $4 million in this quarter versus previous-year quarter. And we'll see what our yield is. I think our yield in the first months look at mix, where you have, how much of your business came in on contract versus how much of your business came in on the spot market. I think that yield looks like going forward, we should be able to continue that kind of performance, like that kind of $4 million-ish kind of number. I'd like to think we eventually have to get on the other side of the cost increase.

Okay. Thank you.

Okay. I think we're at – right at 10 o'clock, Martie. So, we should – operator, provided there's no one else – no other calls, I'd like to thank everybody for joining us this morning. And we felt like we had a really good quarter. I felt like the execution was really good. Pleased to see traction in our sales force, pleased to see traction with the operations team. And so, thank you for joining us, and we'll talk to you next quarter.

Thank you for joining today's conference. That does conclude the call at this time. All participants may disconnect.