8-K
BADGER METER INC (BMI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
_______________________
| Date of Report | |
|---|---|
| (Date of earliest event reported) | July 19, 2024 |
Badger Meter, Inc.
(Exact name of registrant as specified in its charter)
| Wisconsin | 1-6706 | 39-0143280 |
|---|---|---|
| (State or other<br><br>jurisdiction of<br><br>incorporation) | (Commission File<br><br>Number) | (IRS Employer<br><br>Identification No.) |
4545 W. Brown Deer Rd., Milwaukee, Wisconsin
53223
(Address of principal executive offices, including zip code)
(414) 355-0400
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
_______________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock | BMI | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition . |
|---|
On July 19, 2024, Badger Meter, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2024.
A copy of the press release issued by the Company announcing the foregoing is furnished herewith as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits .
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
| (d) | Exhibits . The exhibit furnished herewith is as listed in the accompanying Exhibit Index. |
|---|
EXHIBIT INDEX
| Exhibit No. | Description |
|---|---|
| (99.1) | Badger Meter, Inc. Press Release, dated July 19, 2024. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BADGER METER, INC. | ||
|---|---|---|
| Date: July 19, 2024 | By: | /s/ Robert A. Wrocklage |
| Robert A. Wrocklage | ||
| Senior Vice President – Chief Financial Officer |
EX-99.PressRelease
Exhibit 99.1
BADGER METER REPORTS RECORD SECOND QUARTER 2024 FINANCIAL RESULTS
Milwaukee, WI, July 19, 2024 - Badger Meter, Inc. (NYSE: BMI) today reported record results for the second quarter ended June 30, 2024.
Second Quarter 2024 Highlights
- Record total sales of $216.7 million, 23% higher than the prior year’s $175.9 million.
- Operating profit increased 41% year-over-year, with operating profit margins expanding 240 basis points to a record 19.2% from 16.8%.
- Diluted earnings per share (EPS) increased 47% to $1.12, up from $0.76 in the comparable prior year quarter.
- Introduced BlueEdge™, the platform brand aimed at simplifying the Badger Meter suite of scalable solutions integrating water technology, software and services for efficient water management.
- Released 2023 Sustainability Report illustrating value-enhancing linkage between financial and ESG performance.
“Our second quarter sales surpassed the $200 million milestone for the first time on the continued strength of AMI demand coupled with customer-accelerated backlog conversion. Record operating profit margins and robust EPS growth in the quarter were the result of higher sales volumes, operational execution and continued selling, engineering and administration (SEA) expense leverage,” said Kenneth C. Bockhorst, Chairman, President and Chief Executive Officer. “I want to thank our employees across the globe for their collective contributions to this record financial performance and for their tireless support of our customers.”
Second Quarter Operating Results
Utility water sales increased 26% year-over-year reflecting broad-based growth across the comprehensive suite of smart water offerings, most notably the adoption of our differentiated cellular AMI solution. This includes higher sales of ORION® Cellular endpoints and BEACON® Software as a Service (SaaS) coupled with increased water meter volumes, both mechanical as well as E-Series® Ultrasonic meters. Utility water sales also benefitted from the conversion of elevated backlog.
Sales of flow instrumentation products increased 5% year-over-year with solid growth in the water-focused end markets such as wastewater, globally.
Operating earnings increased 41% year-over-year, with operating profit margins reaching a record 19.2% in the second quarter of 2024, a 240-basis point improvement from the prior year’s 16.8%.
Gross margin dollars increased $15.9 million year-over-year, and gross margin as a percent of sales was 39.4%, in line with the 39.5% in the comparable prior year period and continuing at the higher end of the company’s normalized range. The stable gross margin range reflects the continued benefits of positive sales mix and higher volumes despite ongoing inflationary cost pressures.
SEA expenses in the second quarter of 2024 were $43.9 million, $3.9 million higher than the comparable prior year quarter and up $3.3 million sequentially from the first quarter. The year-over-year increase in SEA expenses resulted from continued growth investments including higher personnel-related and R&D costs. SEA as a percent of sales improved 250 basis points to 20.2% from 22.7% in the comparable prior year quarter as a result of the record sales.
The tax rate for the second quarter of 2024 was 23.8%, below the prior year’s 25.8% due partially to a discrete benefit related to equity compensation transactions. As a result of the above, combined with increased interest income year-over-year, EPS was a record $1.12, up 47% compared to $0.76 in the comparable prior year period.
Outlook
Bockhorst continued, “At the halfway point of the year, we remain pleased with our execution and ability to capitalize on the durable macro trends benefiting the water industry. Our bid funnel and order rates remain constructive, yet as we have long communicated, we face increasingly difficult year-over-year comparisons as the year progresses. With a normalizing backlog, our focus remains on high single digit sales growth in the back half of the year and over the cycle, along with modest operating margin expansion year-over-year, driven by favorable sales mix, value-based price/cost management and SEA leverage. Our balance sheet remains favorably aligned to both organic and acquisition-related growth investments to drive our long-term performance.
As we continue to move beyond the meter, we’ve given a name - BlueEdge - to our expanding suite of end-to-end smart water offerings that give customers the ability to tailor and customize solutions to best meet their unique water resource management needs. These connected devices deliver valuable insights aimed at solving customer challenges across the water cycle. BlueEdge also serves as a strategic lens through which we can evaluate growth investments.
We published our 2023 sustainability report during the quarter which highlights our incremental progress on mitigating ESG risks, reducing costs and enabling customer sustainability outcomes. By both managing and enabling sustainability we aim to safeguard our future.
Bockhorst concluded, “Our resilient end markets, business momentum and our continued focus on innovation and execution provides us with confidence in our ability to increase shareholder value while we enable customers to preserve the world’s most precious resource.”
Conference Call and Webcast Information
Badger Meter management will hold a conference call to discuss the Company’s second quarter 2024 results today, Friday July 19, 2024 at 10:00 AM Central/11:00 AM Eastern time. The listen-only webcast and related presentation can be accessed via the Investor section of our website. Participants can register to take part in the call using this online registration link: https://www.netroadshow.com/events/login?show=6b9207bf&confId=67844
Safe Harbor Statement
Certain statements contained in this news release, as well as other information provided from time to time by Badger Meter, Inc. (the “Company”) or its employees, may contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those statements. The Company’s results are subject to general economic conditions, variation in demand from customers, continued market acceptance of new products, the successful integration of acquisitions, competitive pricing and operating efficiencies, supply chain risk, material and labor cost increases, tax reform and foreign currency risk. See the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for further information regarding risk factors, which are incorporated herein by reference. Badger Meter disclaims any obligation to publicly update or revise any forward-looking statements as a result of new information, future events or any other reason.
About Badger Meter
With more than a century of water technology innovation, Badger Meter is a global provider of industry leading water solutions encompassing flow measurement, quality and other system parameters. These offerings provide our customers with the data and analytics essential to optimize their operations and contribute to the sustainable use and protection of the world’s most precious resource. For more information, visit www.badgermeter.com.
| BADGER METER, INC. | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | ||||||||||||
| (in thousands, except share and earnings per share data) | ||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
| Net sales | $ | 216,658 | $ | 175,858 | $ | 412,938 | $ | 334,959 | ||||
| Cost of sales | 131,290 | 106,424 | 250,392 | 202,709 | ||||||||
| Gross margin | 85,368 | 69,434 | 162,546 | 132,250 | ||||||||
| Selling, engineering and administration | 43,856 | 39,932 | 84,456 | 77,702 | ||||||||
| Operating earnings | 41,512 | 29,502 | 78,090 | 54,548 | ||||||||
| Interest income, net | (1,862 | ) | (827 | ) | (3,389 | ) | (1,449 | ) | ||||
| Other pension and postretirement costs | 12 | 33 | 25 | 65 | ||||||||
| Earnings before income taxes | 43,362 | 30,296 | 81,454 | 55,932 | ||||||||
| Provision for income taxes | 10,306 | 7,803 | 19,267 | 14,024 | ||||||||
| Net earnings | $ | 33,056 | $ | 22,493 | $ | 62,187 | $ | 41,908 | ||||
| Earnings per share: | ||||||||||||
| Basic | $ | 1.13 | $ | 0.77 | $ | 2.12 | $ | 1.43 | ||||
| Diluted | $ | 1.12 | $ | 0.76 | $ | 2.11 | $ | 1.42 | ||||
| Shares used in computation of earnings per share: | ||||||||||||
| Basic | 29,361,034 | 29,272,693 | 29,341,407 | 29,264,166 | ||||||||
| Diluted | 29,528,938 | 29,447,525 | 29,512,362 | 29,434,467 | ||||||||
| BADGER METER, INC. | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| CONSOLIDATED CONDENSED BALANCE SHEETS | ||||||||||||
| (in thousands) | ||||||||||||
| Assets | June 30, | December 31, | ||||||||||
| 2024 | 2023 | |||||||||||
| (Unaudited) | ||||||||||||
| Cash and cash equivalents | $ | 226,212 | $ | 191,782 | ||||||||
| Receivables | 106,229 | 83,507 | ||||||||||
| Inventories | 161,266 | 153,674 | ||||||||||
| Other current assets | 15,510 | 13,214 | ||||||||||
| Total current assets | 509,217 | 442,177 | ||||||||||
| Net property, plant and equipment | 72,454 | 73,878 | ||||||||||
| Intangible assets, at cost less accumulated amortization | 50,178 | 53,737 | ||||||||||
| Other long-term assets | 36,056 | 33,964 | ||||||||||
| Goodwill | 113,355 | 113,163 | ||||||||||
| Total assets | $ | 781,260 | $ | 716,919 | ||||||||
| Liabilities and Shareholders' Equity | ||||||||||||
| Payables | $ | 96,011 | $ | 81,807 | ||||||||
| Accrued compensation and employee benefits | 21,768 | 29,871 | ||||||||||
| Other current liabilities | 20,340 | 20,270 | ||||||||||
| Total current liabilities | 138,119 | 131,948 | ||||||||||
| Deferred income taxes | 4,838 | 5,061 | ||||||||||
| Long-term employee benefits and other | 75,165 | 63,428 | ||||||||||
| Shareholders' equity | 563,138 | 516,482 | ||||||||||
| Total liabilities and shareholders' equity | $ | 781,260 | $ | 716,919 | ||||||||
| BADGER METER, INC. | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | ||||||||||||
| (in thousands) | ||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
| Operating activities: | ||||||||||||
| Net earnings | $ | 33,056 | $ | 22,493 | $ | 62,187 | $ | 41,908 | ||||
| Adjustments to reconcile net earnings to net cash provided by operations: | ||||||||||||
| Depreciation | 2,849 | 2,775 | 5,741 | 5,438 | ||||||||
| Amortization | 5,242 | 4,132 | 10,360 | 8,416 | ||||||||
| Deferred income taxes | - | (366 | ) | - | (376 | ) | ||||||
| Noncurrent employee benefits | (22 | ) | (185 | ) | (21 | ) | (222 | ) | ||||
| Stock-based compensation expense | 2,010 | 1,601 | 3,281 | 2,607 | ||||||||
| Changes in: | ||||||||||||
| Receivables | (14,053 | ) | 340 | (23,217 | ) | (6,503 | ) | |||||
| Inventories | (851 | ) | (12,314 | ) | (7,256 | ) | (23,753 | ) | ||||
| Payables | 5,379 | 1,145 | 13,339 | 8,104 | ||||||||
| Prepaid expenses and other assets | (424 | ) | (2,847 | ) | (8,489 | ) | (4,980 | ) | ||||
| Other liabilities | 3,233 | 5,995 | 1,954 | 10,100 | ||||||||
| Total adjustments | 3,363 | 276 | (4,308 | ) | (1,169 | ) | ||||||
| Net cash provided by operations | 36,419 | 22,769 | 57,879 | 40,739 | ||||||||
| Investing activities: | ||||||||||||
| Property, plant and equipment expenditures | (2,341 | ) | (2,664 | ) | (5,017 | ) | (6,935 | ) | ||||
| Acquisitions, net of cash acquired | - | (75 | ) | (3,000 | ) | (17,127 | ) | |||||
| Net cash used for investing activities | (2,341 | ) | (2,739 | ) | (8,017 | ) | (24,062 | ) | ||||
| Financing activities: | ||||||||||||
| Dividends paid | (7,934 | ) | (6,591 | ) | (15,876 | ) | (13,217 | ) | ||||
| Proceeds from exercise of stock options | 521 | - | 751 | 58 | ||||||||
| Net cash used for financing activities | (7,413 | ) | (6,591 | ) | (15,125 | ) | (13,159 | ) | ||||
| Effect of foreign exchange rates on cash | 237 | 5 | (307 | ) | 235 | |||||||
| Increase in cash and cash equivalents | 26,902 | 13,444 | 34,430 | 3,753 | ||||||||
| Cash and cash equivalents - beginning of period | 199,310 | 128,361 | 191,782 | 138,052 | ||||||||
| Cash and cash equivalents - end of period | $ | 226,212 | $ | 141,805 | $ | 226,212 | $ | 141,805 |
Contacts
Karen Bauer
(414) 371-7276
kbauer@badgermeter.com