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#The incremental revenue.
Their total sales for the quarter were actually about $9 million.
But then you have to eliminate what we sold them, which was about $5 million, and it left about $4 million as incremental.
Is that making sense to you.
There is seasonality in that they are in the same business we are in, so they tend to have a weaker first quarter and a weaker fourth quarter, and their second and third are the stronger quarters.
No, we haven't seen it.
And bear in mind that it's a little tricky because, first off, one competitor, Mueller, primarily sells plastic meters.
So they really aren't even competing in the brass market.
Obviously, Neptune only sells brass meters; they own their own foundry, so they really don't want the market to move to polymer meters.
And Sensus has moved more towards pushing their iPERL, which is a plastic meter.
So really, the only major competitor we have in the brass area is Neptune, and we have not seen pricing pressure yet.
No, no, no.
<UNK>, it was a little over $1 million.
Yes, I mean we're obviously taking some actions to try and get whatever we can back.
But the fact of the matter is, when our customers ---+ when the whole market is down on activity, it's hard to jump around to a ---+ it isn't like it's one customer and you can jump to another.
Yes, it's not lost market share or anything like that.
It's just that we always refer to business being lumpy.
It's the general lumpiness of it.
Over the long-term, commercial generally follows residential.
When a city switches out, they not only switch out residential; they switch out their commercial meters also.
So it's a bit more a function of timing more than anything else at this point.
Yes.
Exactly.
Yes, it should.
No, I would say not, because the cold doesn't impact on us as much as snow does; groundcover on snow.
Because when there is snow, it's difficult to find the pits where the meters are.
And so the utilities simply slow down sending their teams out, because it's just not an easy thing to do.
Also, for the meters that are in basements, tracking snow in the basements, they don't want to do it.
So, snow has a bigger impact than cold.
The first quarter of 2015 is more like the first quarter of 2013, which was a very heavy snow quarter.
In fact, if you remember, I remember distinctly sitting here a year ago, talking about the fact that our customer mix weighted more West of the Mississippi last year at this time than normal.
And so now we (multiple speakers).
Well, the short answer is in California specifically, no.
In New Mexico, we did get a contract with Santa Fe right now ---+.
Right, we have a large contract in Santa Fe ---+.
And they have the same issues, by the way.
For BEACON, and it's because they have concerns about wanting to manage their water usage.
I will say, though, in California ---+ because the BEACON software was developed in California.
And at the time we bought that startup who was working on that software, they were basically using many of the large California utilities as their beta sites for that software.
So, we do have very strong relationships with those utilities.
And we have a lot of interest from those utilities as to what this software could do for them ---+ the entire system could do for them.
And so we are moving forward in those discussions.
No.
<UNK>, I think your first analysis was right.
Once we did that, and we did it very well and we treated the sellers very fairly, other distributors expressed an interest, and we are in conversations with other distributors.
So it's not really a one-off.
It really is a strategy that we developed where we wanted to start with National Meter, because it was our largest distributor and had very good systems in place; and then look at whether or not we could roll up other distributors who might be interested in getting involved with us, to where we could put them under the National Meter umbrella.
So we are in conversations, and that is moving forward.
No, I would say it's ---+ our inventory as a whole turns out about four times a year, so three months is still a reasonable assumption.
If anything, it might actually turn a little bit less than that because (technical difficulty).
Housings are the things ---+ we're hearing a noise.
That's why we're pausing here.
But if anything, it might change a little bit less.
Housings turn a little bit more than some of the other inventory.
This is <UNK>.
That's a very, very difficult one, and we've wrestled with that for years; our industry has.
When we ship our meters to a utility, we never know whether they are going into new housing or whether they're being used as a replacement.
The utility has no methodology for reporting back, and neither do our distributors.
So we've never been able to say this percent of our sales goes into new and this percent of our sales ---+.
And the same is true for commercial meters.
Right.
And it's the same thing with commercial.
So it's really a hard thing.
The only way you can kind of do it is to take a look at the ---+ for example, the industry sells about 6 million meters a year.
So you could say, well, there are 1 million new houses built; and, therefore, say, 80% of those have been meters and the other ones have private wells.
And you could somehow make a conclusion that some percentage ---+ 20% or so, or 15% of the meters are going into new houses.
But it's really, it's that high level.
By the way, <UNK> is in Boston.
We assume the snow has melted there, right.
Okay, we appreciate that, <UNK>, the weather report.
If you look at what happened to us in the first quarter of 2013, which was a very heavy snow quarter and had a big impact on our sales; we had a very weak first quarter.
We followed that up with two record quarters.
At this point, when we look at our order entry, our backlog, we see no reason to believe that we won't have some strong quarters coming forward.
And so that's one of the things that makes us more confident about looking at the balance of 2015.
Obviously the weather shouldn't be an impact ---+ weather only really hits us in the first quarter ---+ but we're going to continue to benefit from copper.
The euro will probably remain weak, but it's pretty much a wash on us because of the purchases in the sales, and we know we're probably going to lose $1 million a quarter on the oil and gas.
But when we wash all those things together and we say, hey, construction should be improving, housing starts are continuing to improve, all of that, it says that we're pretty optimistic about the rest of the year.
We haven't historically seen that because if a utility is on a manual read system, they will go ahead and replace their meters.
And then when they go to an automation they will just pop the automation on top.
So it's generally ---+ a utility won't say, let's extend the lives of our meters because we haven't made a decision on automation.
We don't see that happening.
Yes, and this is <UNK>, let me address that.
It's generally not an attractive market.
And the first reason is that most of the Brazilian utilities use a velocity ---+ a single-jet or multi-jet meter.
That's not a type of meter that we make.
It's not the type of meter that's used in North America.
It's the type that's used in Europe, and a lot of those come out of China at a very low price.
So that's the first problem.
The second problem with Brazil is that they have some pretty heavy tariffs for importing finished products.
So to be effective there, you have to have a partner to do a ---+ so you are shipping in parts, and they are doing a significant amount of the final work on the meter.
We found that a key success factor on our meters is the control we exert over the final assembly and test of the meters, and outsourcing that to a third party is pretty risky.
So for all those reasons, we have not focused on Brazil as a target for our water meters.
On the other hand, we sell a lot of our industrial meters down there, and we will continue to do so.
Well, I want to thank you all for joining us.
This was a difficult quarter for us.
But as <UNK> constantly likes to remind you, we are in a lumpy business.
We have these quarters from time to time.
History will show you that when we have a bad quarter, driven by whether or other factors like that, we tend to bounce back.
And we're fairly confident that we can expect to see some good corridors coming forward.
So with that, I will thank you again for your support, and look forward to talking to you in the future.
Thank you.
