Good morning and welcome everyone. Before we get started, I need to remind you that this call contains certain forward-looking statements that are subject to the Safe Harbor language contained in the press release that we issued yesterday afternoon as well as in our filings with the SEC. In addition, some comparisons will refer to non-GAAP measures. Our earnings release and SEC filings contain additional information about these non-GAAP measures, why we use them, and why we believe they're helpful to investors, and contain reconciliations to the corresponding GAAP data. Consistent with prior quarters, we'll speak to core growth, adjusted EBITDA, adjusted earnings per share, and free cash flow as we feel these non-GAAP metrics provide a better understanding of our operating results. However, these measures are not a substitute for GAAP data and we urge you to review the GAAP information in our earnings release and in our filings with the SEC. Today's call will provide an update on our strategic execution, our overall performance for the first quarter of our fiscal 2020, and our outlook for fiscal year 2020. We'll cover some specifics on our two platforms followed by selected highlights from our financial statements. Afterwards, we'll open up the call for your questions. And with that, I'm pleased to turn the call over to Todd Adams, President and CEO of Rexnord.

Thanks, Rob, and good morning everyone. Our first quarter results overcame some short-term weather challenge concerns, and with the strong finish to the quarter, we ended up about where we expected. Overall our core growth was 2%, which was in line with our outlook and does include a roughly 150 basis point impact on our sales growth from our simplification initiatives. Despite a bit of a headwind from currency translation, we delivered 6% year-over-year growth in our adjusted EBITDA to $111 million, which is a record for any first quarter for us, and our adjusted EPS grew 17% year-over-year. Our strong near-term execution reflects the importance of the Rexnord business system and our relentless focus on continuous improvement. In a macro environment that makes everything feel very short cycle, doing the little things to get better each day compounds into meaningful improvements when we look back over years and quarters. Taking a step back, we're essentially exactly where we had planned to be three years ago delivering strong earnings and free cash flow in a slower growth environment with the balance sheet in a great place, a significant number of structural fixed cost actions behind us, and with a Phase 3 well underway. We've put ourselves in a leading position amongst our competitive set when it comes to delivering a connected products platform that's right down the middle in terms of where the industry is heading. We've also invested in a number of organic growth initiatives and portfolio actions that create a more resilient business than ever before. I'll also add, we've added substantial talent to continue to scale our business through acquisition as we execute our disciplined acquisition strategy to grow various parts of our two great platforms. I'll add that we've done all of this with very little disruption and against a macro backdrop that's proven to be unpredictable to say the least. From navigating the unprecedented tariff dynamics to making major footprint changes, our teams have delivered great results and are poised to continue to build on that success in the coming years. It feels to us that by continuing to execute the strategy we laid out three years ago, we will further distinguish Rexnord as a high-performing concentrated multi-industry business with two great platforms that can grow above the market, while delivering very high returns and cash flow that we can leverage into a $3 billion to $5 billion enterprise over time. Two excellent examples of this dynamic are visible in our results over the last year and a half. We've been executing the integration of Centa for about five quarters now since making the acquisition in February of 2018. You may recall that at the time we established a three-year objective of a 10 percentage point increase in Centa's already double-digit EBITDA margins. The rigorous deployment of RBS at Centa has transitioned the business from a company with a great reputation for its products and brand to one that is flourishing as part of Rexnord or has been growing double-digits since the acquisition. As we've improved lead times and productivity, we've worked with the local team on how to identify and eliminate waste, and in less than one year we saw a 500 basis point improvement in margins. With the success and sustainability of the initial integration, we've raised our internal goal of getting to the 10-point lift in margins to just two years, which is where we're tracking to close our fiscal 2020. While there's still work to do, I'm optimistic that there's even more room for margin expansion as we get into our fiscal 2021. Centa is a great example of leveraging our proven operating philosophy to create a competitive advantage in a market that over time should grow faster than our underlying industrial markets. The next example has been playing out in real time for the last year as the combination of accelerating input costs and the implementation of import tariffs in early 2018 created what could have been a $50 million cost challenge for us at then current run rates. Leveraging our cross-functional supply chain and commercial teams, we've been able to very successfully navigate this challenge and ended up delivering solid absolute margin expansion in our fiscal 2019, and as you can see from our first quarter, an additional 100 basis points of margin expansion to start our fiscal 2020. These examples speak to our confidence that we can perform well across a wide range of end market conditions. Stated more broadly, the primary focus of our strategic actions over the last three years has been to transform our business profile; to develop more levers to drive growth, and reduce our overall cost structure while making it more variable and flexible. We think that macro uncertainty is frankly just a reality at this point. So having the organization conditioned to be nimble, relying on a business system that places a priority on continuous improvement and having great teams that love to compete gives us a lot of confidence in our ability to create value over the coming years. Please turn to Slide number 3 and we'll take a quick look at our first quarter results. Our net sales finished at $508 million, up 1% from last year, but 3% before factoring in currency translation. Our product line simplification initiative reduced our sales by approximately 150 basis points and we again saw Zurn's growth constrained by unusually bad weather in April and especially May. Despite the headwinds to growth, our adjusted EBITDA continued to expand 6% year-over-year to $111 million and margin expanded by 100 basis points. Looking quickly at our operating platforms. Core growth in our PMC platform was in line with our expectations as we saw solid growth in OE applications and in distribution sell-through in North America but somewhat slower growth in Asia and further declines in Europe. Compared with last year's challenged first quarter in our aerospace business, we experienced double-digit core growth in this year's first quarter. PMC's adjusted EBITDA margin was 22.4% as we continue to offset the impact of overall cost inflation on our margins. We benefited from the strength in our aerospace operations and the structural cost reductions being delivered in the second wave of SCOFR that we completed last year, although a bit more to say about our aerospace business in just a moment. We delivered solid growth in our water management platform in the quarter despite the weather and Zurn continues to benefit from steady end growth demand in commercial and institutional end markets as well as growing penetration of the adjacent fire protection and site works markets. Zurn's 100 basis point EBITDA margin expansion provides the best evidence that we can continue to manage the ongoing tariff structures and price cost equations in both the immediate and over the long term. Our balance sheet leverage was unchanged at June 30 and we continue to evaluate our expanded options set to drive increased shareholder value as we go forward. Given our outlook for free cash flow in 2020 and assuming no additional M&A, our leverage ratio is tracking to the 1.6 times range at the end of fiscal 2020. Mark will review the consolidated results and the performance of each platform as part of his comments a little bit later in the call. Please turn to Slide 4 and I'll make a few comments about our new Aerospace Center of Excellence. The graphic at the bottom left profiles our product offering and the range of aircraft applications where we have content. The COE was the largest individual project within our second wave of our Supply Chain Optimization and Footprint Repositioning projects that we completed last year. We constructed a new facility near our established operations in the Chicago area, took a clean sheet of paper approach to laying out the plant, and invested in new state-of-the-art machining equipment for certain critical operations. Productivity increases are ramping quickly and on pace to hit our near-term 25% improvement objective. Our customer base was excited to learn about the new investment when it was announced and even more pleased now that they've seen the results. Almost all of our strategic customers have toured the facility and at this point the reviews have been strongly positive. More importantly, we've been winning new long-term commitments from key customers and continuing to expand our penetration of the Airbus supply chain. Recent share gains have effectively doubled our first bid position on Airbus aircraft in the last five years, and we won specifications on additional content that goes into production after this year. Compared with the low-single-digit core growth delivered in our fiscal 2019, we expect our aerospace core growth to be in the high-single-digit range in fiscal 2020. Our aerospace experience demonstrates that combining our 80:20 simplification work with our investments in innovation, commercial excellence, and our digital transformation, our SCOFR initiatives are contributing to the steady progress we're making towards a higher growth, higher return, and higher cash generating business model with the flexibility to perform well in all stages of the business cycle and deliver stronger shareholder returns over time.

Thanks, Todd. Please turn to Slide number 5. On a consolidated basis, our first quarter of fiscal 2020 financial results were mostly in line with our expectations. On a year-over-year basis, our total sales grew 1% with core sales increasing 2%. Our adjusted EBITDA increased by 6% to $111 million and our adjusted earnings per share increased by 17% to $0.48. Please turn to Slide number 6. Our outlook for our fiscal year 2020 continues to incorporate low to mid-single-digit core growth before factoring in a 150 to 200 basis point impact from our product line simplification initiatives. So on a net basis, our outlook continues to incorporate low-single-digit core growth. We expect our adjusted EBITDA to be in a range of $460 million to $475 million representing 6% growth at the mid-point and for our free cash flow to exceed our net income. On Slide 7, we summarize our consolidated results for the quarter. Before I move on, I would like to draw your attention to a new schedule we have added to our earnings release that provides a bridge from our GAAP income statement to an adjusted income statement. In addition, we have also restructured and expanded our schedule of quarterly platform results to include the composition of quarterly sales growth and a summary reconciliation of GAAP income from operations to adjusted EBIT and adjusted EBITDA for each platform.

Now let's turn to Slide 8 and discuss the first of our two operating platforms, Process & Motion Control. Total sales decreased 1% year-over-year in PMC as positive core growth of 1% and a 1% contribution to growth from M&A were more than offset by the 3% impact of the stronger dollar. At recent exchange rates, we would expect the currency translation to remain a modest headwind through the balance of our fiscal year. PMC core growth moderated in the quarter as the weakness we discussed in Europe during last quarter's call became more pronounced and our growth profile in Asia weakened. Core growth was also reduced by approximately 2% from our product line simplification initiatives. On the other hand, we continued to see good demand in our aerospace end markets and in our domestic food and beverage, power generation, mining, and construction-related end markets. We also continued to see low-single-digit growth in sell-through of our products in our North American distribution channel. The only change in the end market assumptions we've incorporated into our guidance is to shift our outlook for the rest of the world distribution to assume roughly flat market demand in our fiscal 2020 based on the trends over the past quarter. Strong operating execution and the good growth in our aerospace operations delivered a 90 basis point expansion in PMC's EBITDA margin, and we continue to expect PMC margins to increase year-over-year in our fiscal 2020 as the structural savings we are realizing from our supply chain optimization and footprint repositioning initiatives and operational execution through the rest of the business system is expected to more than offset our ongoing investment spend. As you update your models for PMC, we remind you that in our second quarter we're up against PMC's strongest growth quarter from last year when core growth was 7% and up 300 to 400 basis points stronger than any other quarter of fiscal 2019. Please turn to Slide number 9; we'll discuss our Water Management platform. During our first quarter, our Water Management platform delivered a 4% net sales increase on both a core and as-reported basis. Our product plan simplification initiatives had a relatively minor impact on Zurn's core growth in the quarter. But for the second consecutive quarter, poor weather conditions, particularly during May, had a negative impact on our core growth. Growth restarted in June and despite the more difficult second quarter comp from last year, we expect relatively stable core growth from Water Management in our second quarter as three-year stacked growth reaccelerated sequentially. Underlying North American non-residential construction market demand remains robust. We're looking forward to another year of solid growth at Zurn based on additional demand growth, our innovation pipeline, and favorable price realization. As illustrated by our unchanged end market outlook that is summarized in the slide, demand conditions in our core non-residential construction end markets remain favorable. Year-over-year growth in overall U.S. non-residential building construction spending has been pressured somewhat by the persistently adverse weather issues this spring, but overall growth in institutional verticals has remained relatively more stable. Commercial sector growth has slowed as declines in the retail sector are detracting from the ongoing solid growth in office verticals and our outlook continues to incorporate a relatively more cautious posture for the commercial sector outlook in our second half. Institutional sector spending, where specification grade plumbing content is greater and our relative share is stronger, is expected to continue to grow at a relatively higher rate. During our first quarter, we formally launched our first digitally connected faucets and flush valves for commercial and institutional washrooms. As illustrated by the graphic displayed in the lower right hand of the slide our digitally enabled Zurn sensor faucets connect wirelessly to Zurn gateway or hub that can be connected to the cloud and accessed 24/7 through Zurn's Plum Smart secure web portal. Our customers gain real-time visibility of water consumption as well as usage patterns and trends for each connected fixture. Alerts can be sent directly to their mobile device when the need for preventive maintenance arises. With improved visibility on the functioning of the building's plumbing system, our customers can expect to better manage total water usage, gain control over the timing and need for regular preventative maintenance, and respond more quickly to sudden changes in system status. Renowned faucets and plug fillets are a daily concern in commercial and institutional buildings and Zurn connected products can detect the problem immediately, send an alert to the local maintenance team, and mitigate any impact. Our products connect seamlessly into the customer's building control system and can be easily retrofitted, which is where we see the relatively larger opportunity. You may recall that we launched our connected backfill solution in December. We plan to introduce a connected drain solution later this year. Together these digitally enabled product solutions present a combined capability that can deliver substantial water savings and economic benefits to owners and operators, whether we're talking about a single office building, a local school system, or a national healthcare network. Now turning to profitability. Water Management's adjusted EBITDA increased by 9% year-over-year in the first quarter and delivered 100 basis points of year-over-year margin expansion as we continue to leverage our core growth and manage to a favorable price cost equation while funding our market expansion and cost reduction initiatives. Moving onto Slide 10 and starting with the chart in the far left. Our free cash increased year-over-year although our first quarter typically accounts for less than 10% of our full-year free cash flow. We remain confident in our expectations for free cash flow growth in our fiscal 2020. Moving to the chart in the center, you can see that our financial leverage as measured by our net debt leverage ratio is near the low end of our targeted range even as our net debt increased slightly to fund the acquisition of stainless drains. Before we open the call up for questions, I'll touch on restructuring expenses and our effective tax rate. First, in terms of our cost reduction initiatives, including our SCOFR 3 initiative, we continue to expect total restructuring expenses of $14 million to $15 million in our fiscal 2020. These costs are primarily made up of severance costs and are excluded from our adjusted operating results. Next, our effective tax rate will fluctuate by quarter given drain levels of pre-tax income as well as the timing of other planning initiatives. We anticipate our fiscal 2020 adjusted net income on corporate and effective tax rate of approximately 26% to 27%. In our second quarter, we anticipate the rate will be approximately 27%.

Turning to the slides in the appendix, first we have included certain other assumptions incorporated in our guidance for fiscal 2020 on Slide 13. I'll remind you that our guidance excludes the impact of potential acquisitions, potential accounting gains or losses, and future non-recurring items such as restructuring costs. As has been our practice, the appendix of today's presentation also includes a reference table on Slide 14 to help you reconcile the incremental quarterly share count used for modeling our adjusted earnings per share under the if-converted method as required under accounting for outstanding mandatory convertible preferred. As illustrated on Slide 15, the if-converted method was appended dilutive to adjusted EPS in the first quarter and therefore was applied. I'd also like to make sure everyone is clear on how to determine the correct share count to use with estimating our fiscal 2020 earnings per share. Given that the preferred will have converted into common shares on November 15, our average full-year share count will include the converted shares only after that date. Our current estimate for average diluted shares outstanding in fiscal 2020 is approximately 114.5 million shares. With that, we'll open the call up for questions.

Thank you. We will now begin the question-and-answer session. Our first question comes from Joe O'Dea. Your line is open.

Starting on PMC and just thinking about kind of where you get confidence as you move through the year and thoughts or your comments around just how short cycle things feel out there and understandably whether it was a tougher comp in 2Q, but just generally kind of what you are looking at across various end markets that continue to give you confidence in kind of that full-year low-single-digit organic growth and maybe with that anything that's perhaps changed within the complexion that you talked about in the first quarter in expectations around what you're seeing on the price side, what you're seeing on the volume side?

Sure. I think when we look at PMC, a couple of things. Absolute sell-through to the end market has been up low-single-digits for the last couple of quarters. Our base case is that continues, which is a combination of, I would say, relatively low market growth plus some price. Looking specific and that's roughly half of PMC. We also have a solid outlook for aerospace that gives us good visibility from a backlog perspective to that high-single-digit core growth number. When you look at all the other end-user OEM end markets, I think we're taking a cautious view right. I think as Mark pointed out, North America, food, and beverage have been good, still getting good growth from Centa. I think we're taking a rather cautious view on the remainder of the year, but that's how we're sort of playing it out. And again, I think when we guided relatively short time ago, we had visibility to a lot of that. So we guided to low-single-digit core growth. We contemplated much of the same environment that we're seeing today. I don't think much has changed. The confidence we have comes from absolute sell-through and industrial production still being in a reasonable place. We have a good view on Centa and aerospace and then a couple of other things that are doing well from an end-market perspective. I think that's sort of where we're thinking about it at least today. But I don't see a significant downside from where we planned things.

And then on Water Management and some of what you're doing on the digital launches. Can you talk a little bit about the way the go-to-market has worked and how potentially it could change in terms of kind of faucets, backflow drains, are those generally a separate kind of sale avenue and when you get connected product across those ranges, it becomes more of a systems sale opportunity really getting at how substantial market share opportunity or something like that could be?

Yes, I think the nice thing is these components all work together in an integrated way with a building control system. Where we're seeing a lot of traction is with performance contractors and contractors in general who are able to offer a solution to the building owner that integrates all these components that prior to having the capability were critical parts of both the water quality and safety inside of a non-residential building. This can be integrated into whatever interface the end user or building owner has. So from a systems sale we were always sort of selling these as components that work well and integrate well together. They not only do the job when it comes to safety and flow control, but also lower labor and installation costs. This takes us to another level where we're actually monitoring these things in real-time so that the contractor can work with the building owner and actually set up the right maintenance schedule and everything else in a really intelligent way. The path to market is the same. I think we're finding additional channel partners that can see this value. This also fills a critical void in that building control or performance contracting world where they've been monitoring HVAC and lighting for a long period of time, but nothing has really gone down the route of being able to monitor water inside of a non-residential building. So we're seeing a lot of interest from that part of the world where performance contractors see this as real value added. They're really pulling us into opportunities that we think are going to be pretty significant over time.

Your next question comes from the line of Julian Mitchell. Your line is open.

Hi, this is Jason on for Julian. Just one question on Water Management. I guess just if I realize it's difficult to size, but if there's any color that you could give as to what growth would have been in the quarter without sort of poor weather conditions particularly in May. Just so we can sort of get a picture as to what the run rate would have been for the first quarter?

I mean it's got to be two to three points would be our guess. If we looked at April by the time we had decided, we had perfect visibility to what April looked like, May was really bad, and June picked up pretty substantially. We ended at a pretty good rate. That continues into July and we're into the sort of heart of construction season now. So we would anticipate that growth would be better as we get through our second quarter and then we go to that seasonal tapering down in North America and then obviously March quarter is less, but the May weather was tough, June finished strong, and July is in a good place.

Great. Just following up a little bit on that PMC color that you gave earlier, you mentioned how compared relative to when you guided post Q1, you didn't really see anything in the demand environment that you did see back then, is that to imply that demand didn't really get too much worse in PMC throughout the quarter or demand did get worse? You just saw a solid come in, and that's why you guided what you guided after Q1, just trying to clarify that point?

Again when we guided sort of mid-May, we had good visibility to April and the first half of May. I would say that not much changed over the course of the first quarter from what we guided and I don't think that we're saying that it's substantially different from what we thought 90 days ago. So I'm not sure exactly the distinction in your question other than to say, we gave everyone what we thought was our best look, we haven't seen a material change to that, and we are sort of confident that the outlook we provided is still the right one for a whole lot of different reasons.

Jason, this is Rob. Our growth did not take a loss in June.

Your next question comes from the line of Jeff Hammond. Your line is open.

Just on the product line simplification, I think you called out the 200 basis points; is that kind of, we see that run rating through each of the next three quarters and then move around at all quarter-to-quarter?

I think it probably moves around a little bit. But I would say that it is more pronounced in PMC relative to Water Management. I would expect between the first three quarters you will see the majority of the impact in PMC and then by the fourth quarter we start to sort of anniversary the prior year. In water it probably picks up a little bit as we get into the second and third quarters and then starts to tail back into the fourth quarter. So I would say by platform, that's how it rolls out. By the fourth quarter, it should be relatively clean.

Was there any impact in water this quarter?

Yes, it was modest. It was probably only 50 basis points or so.

And then I know you don't give quarterly guidance, but just given the comp in PMC, how should we think about the core growth rate in the 2Q for PMC? I think you have the timing issue with Arrow?

Yes, Jeff, this is Mark. I think if you look at sequentially, you'll see a step up in the absolute sales dollars Q1 to Q2 like you saw last year, but that tough comp puts that core growth closer to that, call it, plus 1 to flattish type range in 2Q just given last year's percent number.

And then just on the end markets. I think the softening in Europe and maybe the change in the rest of the world. Are there any particular end markets that are jumping out where you're seeing some of that softer activity?

We've seen that softer activity in Europe in our beverage business that's continued, but that's partially Europe but also partially, a lot of the large equipment manufacturers are producing product for Asia there, so it's partially driven by some of the Asian stocks as well. I think that's one of the most pronounced areas for us in our processed industries. It's been slower but not to the same extent as the beverage side, so not a lot new there. I think that trend is going to continue for the past couple of quarters. So beverage will be the leading category of revenue in Europe and Asia.

Okay. And then just finally on the stainless drain acquisition, it looks like you paid around $25 million. Anything you can give us on the growth profile of that business, margin profile, what you paid on a multiple basis, what the revenue contribution would be kind of on a run rate basis quarterly?

Yes. It's relatively small, Jeff. It's a nice little tuck-in, it's accretive to margins. It's accretive to what we sort of viewed from a return on invested capital within a year. I think about it as a couple million bucks a quarter, maybe three million bucks a quarter. Great EBITDA margins, we paid a relatively low multiple for it and we think within a year it's well into double-digit return on invested capital. Nice little tuck-in for us, it gives us an extension of our leading drain line and something that we thought made a lot of sense, and it's off to a great start.

Your next question comes from the line of Mig Dobre. Your line is open.

Yes, good morning everyone. I'm just sticking with this. Good morning, sticking with this comps theme here. When we are looking at Water Management sequentially, maybe in the second quarter given the weather disruptions that you mentioned before and just normal seasonality, should we expect a sequential uptick in revenue here as well?

Yes, Mig, this is Mark. We would expect a sequential uptick in revenue from Q1 to Q2 as we have historically seen like from a growth standpoint. So as we laid out in the last year, we posted 12%, so similar phenomenon. As we talked about PMC, I think we're expecting the core growth number to look similar to what we saw in Q1 on a year-over-year core basis. But the absolute dollar will definitely step up from Q1.

Great, that's helpful. And then I'm wondering in C&I and Resi, the two areas where you have yellow lights if you would on the slide, kind of how you were thinking about the market here? Is it a function of contractors kind of working through backlogs and your sales through these end markets still being positive with potential slowness down the line, or is this something that you're actually seeing currently in terms of weaker growth? How does that work?

I think what we're doing is trying to highlight that the starts have been inconsistent. If you look at the start data for June alone, there was a 15% decline in commercial starts. The issue is that last June had over $40 billion in starts, which was a record. Only five or so months in the last decade have exceeded $30 billion, and this June was one of them. So while the current number is lower than a year ago, it remains quite strong. Our main point is to indicate that there will be months with strong starts and others with weaker numbers, and the way this plays out over the build cycle may be less predictable. Contractor backlogs still look good, the market remains healthy, and labor constraints continue to be a challenge. Weather disruptions can also delay progress, extending timelines. We are signaling that there is still growth ahead, but it may not be in the 12% range and is likely to remain in the mid-single-digits. The residential side is relatively small for us, and that situation is well known regarding its current status.

Right. And I mean fair enough; I guess we all understand kind of the end market data that everybody is looking at. It’s more of a question of what you are really seeing in the business and I think your comments have made that clear. When going to PMC now, how are you thinking about the puts and takes to margin for the rest of the year? I mean are there any specific quarters that you would like to call out in any way based on investments that you might have to make or mix or anything else that we should be aware of?

Yes, Mike, this is Mark. If you look into starting in Q2, we'll start incurring some of our SCOFR 3 duplicative costs that will run through the operating results. So you'll see sequentially not a big margin step-up from Q1 to Q2, probably the same going into Q3, but a margin pickup in Q4. Starting in our Q2, I think that's going to be a little different as we will start incurring some of those duplicative costs as we start executing some of SCOFR 3, and that will dampen the margin a little bit. But overall if you look at the full-year, we are still projecting full-year margin expansion in PMC despite those incremental costs.

I mean I think the incrementals in the first quarter were really good. If you look at Q2 to Q4, even net of the duplicative cost, you will see incrementals at the higher end of the range of what we've communicated to expect over time.

Okay. And then maybe last question when you're looking at your leverage; you're expecting to be down to 1.6 by the end of the year which is great, cash flow generation is good. How are you thinking about deploying this capital that you obviously have available now, your convert is set to actually convert in November? So I'm wondering how you're thinking about that? And then from an M&A perspective, what are the things that you're looking at? Is there anything more material rather than just a tuck-in acquisition that would be considered? Thank you.

Again, I think we feel really good about marching the leverage towards that. As we've communicated over time, we're going to continue to be disciplined in our approach to M&A and that would include things that are both bolt-on, tuck-in in nature as well as things that could be larger, but always keeping in mind we want to keep the leverage at a very manageable place not only in today's environment but as we would look forward into a scenario where we did see a recession. We're going to continue to be very disciplined and I would say use the balance sheet in a way that is very manageable and appropriate. Beyond that, we always have the opportunity to think about incremental ways to give some money back to shareholders in the form of dividends and/or buybacks. At this point, our view is that we are likely going to allow the mandatory to convert, and then we have the option to sort of continue to see how we want to approach that from a dilution standpoint. If we wanted to buy some back down the road or not, so I'm not going to get too specific about it. But I think expect the form of our M&A to continue to be disciplined high return hurdles and using the balance sheet in a way that keeps leverage very manageable across a variety of scenarios. We don't envision doing anything that takes leverage to four times or anything like that.

Your next question comes from the line of Joe O'Dea. Your line is open.

Hi. Just wanted to also ask about water management margins in the quarter that were well ahead of what we expected, and anything that might have been a benefit to 1Q or normally from a sort of cadence perspective we see things improve as you move into 2Q. Just anything that's more contained to the quarter or thinking about this as kind of like a structural level?

Nothing unusual relative to prior year. As you think about margins that usually get better into the second quarter, I think you can expect that as well. It's really the compounding effect, Joe, of a lot of the things that we've done with the SCOFR initiatives and the simplification initiatives. Staying well ahead on the price cost equation and nothing unusual with respect to mix or one-timers. So really happy with I think the quality of the performance in both the first quarter and what we expect in the second.

And then just the comment kind of I think raises one other question. Just I think some of the commentary over the course of earnings season and hearing from some sort of distribution channel and distributors. There's been so much price pushed through distribution in response to the cost inflation, and I think in a slowing environment, you're hearing about maybe some pushback. Are you seeing evidence of that at all from your distribution partners?

I would say not in any pronounced way. Again I think when you look at how we've managed it, it hasn't all been priced. We've done a significant amount of rerouting our supply chains, doing things to avoid the tariffs in addition to passing along some price. If we were to look at the Pareto, price as a component is not pushing it to the level where we're forcing distributors into a spot where they're getting significant pushback. We've tried to manage it across all the different levers we have. I would not say that we've seen any significant pushback on the water side in particular around the price increases we've passed through because frankly we've tried to manage it appropriately; we don't want to do is when you pass along significant price increases through the channel and then on to the building owner, all of a sudden things become unaffordable. So we're trying to be pretty disciplined in how we go about it but not overdo it to the point of hurting demand.

We have no further questions at this time. So I'd like to thank everybody that could join us on the call today. We appreciate your interest in Rexnord, and we look forward to providing our next update when we announce our fiscal 2020 second quarter results in late October. Have a great day.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.