You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: I hope you are all healthy and staying safe and we certainly appreciate you joining our call today.
Let me start by expressing my sincere appreciation to our global team for their extraordinary commitment during this unprecedented time.
We made every effort to keep our employees and other stakeholders safe as we've navigated the COVID-19 pandemic and I'm very proud of the collective role our team members played in supporting our customers in the critical water industry.
We continue to follow all health and safety measures according to health organization recommendations and local government regulations.
At our sites, key actions have been taken to include steps to ensure employees are practicing social distancing, on-site temperature monitoring, use of face coverings, enhanced cleaning and sanitation efforts and staggered production schedules.
All of our manufacturing and distribution locations are operational.
The majority of our non-production employees continue to work from home.
The potential for order delays and operations and supply chain disruptions that I mentioned during last quarter's earnings call gradually diminished throughout the quarter.
We remain encouraged by the backlog and funnel of project opportunities and our balance sheet is in excellent shape to weather whatever lies ahead, recognizing conditions and potential business impacts are continuously evolving.
Bob will walk you through the details of the quarter and after that I'll come back and talk further about the market outlook and what we're hearing from customers in the current environment.
I want to begin by stating it is incredibly difficult to quantify the specific impact of COVID-19 on our financial results in the quarter.
Clearly it was far-reaching in terms of customer order patterns, supply chain logistics and capacity interruptions and ultimately costs, including the various implemented cost savings actions.
So, similar to the release, my comments will not include that break down or level of granularity.
Given our sales concentration in the U.S. market, it is not surprising that the month of April marked the low point for us in terms of both orders and sales as the vast majority of states were under government lockdown restrictions.
Customers were definitely taking a pause in determining the impacts to their operations, how to operate remotely, how to continue with projects and how long the restrictions would last.
Municipal water demand began to improve to become less worse, if you will, as the lockdowns began to be lifted in mid-May and into June.
In municipal water, overall sales decreased 9% with April representing the largest year-over-year decline with sequential improvement off of that bottom to a more stabilized level as the quarter progressed.
I would not characterize it as back to normal, but definitely off of the April bottom with relative consistent.
In addition, backlog grew as orders exceeded sales in the quarter due to a number of factors.
These included manufacturing disruptions from stay-at-home orders in the U.S. and Mexico, higher rates of intermittent employee absenteeism and early supply chain challenges, all of which combined to limit output at certain of our manufacturing facilities.
Additionally, the sequential demand ramp impacted order timing and our ability to convert orders into sales late in the quarter.
On a positive note, revenue mix trends toward adoption of smart metering solutions including BEACON service revenue along with ultrasonic meter penetration continued.
In contrast, flow instrumentation sales declined 22% year-over-year with April again representing the most difficult demand level.
As expected, demand trends improved from April -- from the April low, but at a very modest pace, reflective of the significantly challenged industrial markets served and our continuing view of this product line being lower for longer, compared to the more resilient municipal water trend.
Operating profit as a percent of sales was 13.9%, a 60 basis point decline from the prior year 14.5%.
As we discussed on our last call in mid-April, we enacted a number of temporary cost containment measures to mitigate the impact of the rapid sales decline to both profitability and cash flows.
These included reductions in discretionary spending, a hiring freeze, reduced work hour furloughs and executive salary reductions among others.
While the reduced work hour and salary reductions were initiated -- initially targeted for five weeks, we did extend those reductions for an additional four weeks through mid-June.
The combined actions helped to contain the decremental operating margin impact from the rapid sales decline to approximately 20% in the quarter.
Gross margin for the quarter was 39.3%, up 40 basis points year-over-year despite the sales decline and once again in the upper half of what we would call our normalized range of 36% to 40%.
The implemented cost actions helped to offset lower production volumes.
Additionally, positive sales mix, notably, the overall trends of ultrasonic meter adoption and higher BEACON service revenues, along with lower commodity costs, benefited gross margins in the quarter.
SEA expenses for the second quarter were $23.2 million, down $2 million year-over-year resulting from the net benefit of the implemented cost actions, partially offset by higher investments in certain business optimization initiatives.
The income tax provision in the second quarter of 2020 was 24.3%, slightly higher than the prior year's 23.8% rate.
In summary, earnings per share was $0.33 in the second quarter of 2020, a decline of 15% from the prior year's earnings per share of $0.39.
Working capital as a percent of sales was 22.9%, in line with the prior sequential quarter.
Free cash flow of $20.1 million was just $700,000 below the prior year comparable quarter despite lower earnings and was due primarily to the working capital differential between quarters and deferral of our quarterly federal income tax payment under the CARES Act.
We continue to monitor customer cash receipts and supplier payment terms and we have not experienced any significant collectability or other issues.
We ended the quarter with approximately $85 million of cash on the balance sheet and a net cash position of approximately $81 million.
In addition, we have an untapped credit facility of $125 million.
We believe we have ample liquidity to fund operations, our dividend and other capital allocation priorities under a wide range of potential economic scenarios.
We participated in a number of virtual investor conferences during the quarter, so I thought I'd start by addressing the common questions and themes from those discussions.
So let's start with the current environment.
As we discussed in the release and in our earlier remarks, we do believe we are entering the new normal after the shock in April and early May when most of the U.S. was shut down.
While some of the municipal water activity never stopped, there was definitely a break as our customers, like all of us, had to figure out how to navigate the COVID-19 pandemic and the rapid pace of changing government rules and requirements globally.
Once that settled a bit and gradual reopenings occurred, we started to see activity improve off the April bottom.
I can't say we're completely back to normal, but activity has steadied on a relative basis.
Customers are requesting in-person meetings and site visits, bid tenders and awards are proceeding, some projects have accelerated despite others being temporarily deferred.
We have not experienced any outright cancellations.
As it relates to supply chain and logistics, we commented last quarter that it could potentially create operating challenges.
While there was and still is a significant amount of active management, it was not a major factor.
As Bob noted, we did however experience manufacturing disruptions from the stay-at-home orders in the U.S., various government mandates in Mexico related to vulnerable populations and intermittent employee absenteeism, as well as early logistics and supply chain glitches, all of which contributed to slightly lower than expected output at our manufacturing facilities.
These impacts continue to lessen in severity and we expect them to be behind us shortly, barring any new currently unforeseen developments.
We previously outlined a series of temporary cost reductions that were instituted in mid-April.
And as Bob mentioned, we did extend the reduced work hour and salary reduction measures into mid-June.
Not surprisingly, we continue to manage hiring and discretionary spending action given continuing market uncertainty.
While painful in the short term, we believe these steps were both necessary and adequate to responsibly manage the cost structure of the company during the worst of the impact.
We obviously continue to stay close to the rapidly changing implications of the pandemic and are prepared to take additional actions if they become warranted.
Turning to the outlook.
While the economic environment appears more stable, there is certain market data and sentiment that points to the potential for a protracted recovery from COVID-19 and this continued uncertainty could weigh on customer demand and municipal budgets moving forward.
We cannot confidently predict the degree or duration of the impact.
So therefore we continue to focus on the items we can control.
We are actively investing in and launching new products, an example of which is our recently released E-Series Ultrasonic Plus Meter with integrated control valve, which allows water utilities to remotely restrict water flow.
With multiple valve positions, this safe, humane and efficient solution to controlling water service and residential applications improves utility efficiency, expenses and safety.
It addresses one of the two longer-term trends we believe could accelerate as a result of COVID-19, the other being accelerated AMI adoption.
Our operations teams are adapting manufacturing processes to increase output while optimizing safety.
We do expect to recover the majority of the backlog built in the second quarter during the third quarter.
We are managing cash flow and working capital with $85 million of cash on the balance sheet and a $125 million of revolving credit available to fund capital allocation priorities including the dividend.
Finally, we continue to pursue strategic tuck-in M&A that will expand our offerings in attractive adjacencies serving our critical and essential markets.
In summary, I'm pleased with the resilience of our business model and our financial performance in relation to the economic severity of this unprecedented crisis.
Our organization is prepared and well-positioned to successfully manage the uncertain days ahead, remaining nimble and reactive to our market trends.

user
q2 earnings per share $0.33.

assistant