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) | January 31, 2025 |
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 January 31, 2025, Badger Meter, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter ended December 31, 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 January 31, 2025. |
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: January 31, 2025 | By: | /s/ Robert A. Wrocklage |
| Robert A. Wrocklage | ||
| Senior Vice President – Chief Financial Officer |
EX-99.PressRelease
Exhibit 99.1
BADGER METER REPORTS FOURTH QUARTER AND FULL YEAR 2024 FINANCIAL RESULTS
Milwaukee, WI, January 31, 2025 - Badger Meter, Inc. (NYSE: BMI) today reported results for the fourth quarter and full year ended December 31, 2024.
Fourth Quarter 2024 Highlights
- Total sales of $205.2 million, 13% higher than the prior year’s $182.4 million.
- Operating profit increased 22% year-over-year, with operating profit margins expanding 150 basis points to 19.1% from 17.6%.
- Diluted earnings per share (EPS) increased 24% to $1.04, up from $0.84 in the comparable prior year quarter.
- Record cash flow with $52.1 million in net cash provided by operations, increasing 37% over the prior year.
Full Year 2024 Highlights
- Record total sales of $826.6 million, 18% higher than the prior year’s $703.6 million.
- Software sales of over $56 million, increasing approximately 30% year-over-year.
- Operating profit margins improved 230 basis points over the prior year to 19.1%.
- Diluted EPS increased 35% to a record $4.23, up from $3.14 in the prior year.
- Record cash flow with $155 million in net cash provided by operations.
- Introduced BlueEdge™, the platform brand aimed at simplifying the Badger Meter suite of scalable solutions for efficient water management.
Kenneth C. Bockhorst, Chairman, President and Chief Executive Officer, stated, “We finished 2024 with yet another quarter of excellent results, including solid performance across a variety of operating metrics with continued strong sales growth, expanding operating profit margins, robust EPS growth and record cash flow from operations. We utilized our strong balance sheet and cash flows to expand on the breadth of our BlueEdge suite of solutions, adding real-time monitoring of water collection systems with the acquisition of SmartCover® Systems (SmartCover) which we announced today. Lastly, I’m grateful for the hard work and commitment of the entire Badger Meter team in supporting our customers and delivering on our strategic growth goals and I want to welcome the employees of SmartCover to the Badger Meter team.”
Fourth Quarter Operating Results
Utility water sales increased 14% year-over-year with solid growth across the broad suite of BlueEdge technology solutions utilized by utility customers. Most notably, we continued to see robust adoption rates for our cellular AMI offering, which included higher sales of ORION® Cellular endpoints, BEACON®Software as a Service (SaaS), and mechanical and ultrasonic metering sales year-over-year.
Sales of flow instrumentation products increased 1% year-over-year with modest growth in the water-focused end markets more than offsetting declines across the array of de-emphasized applications, globally.
Operating earnings increased a robust 22% year-over-year, with operating profit margins expanding 150 basis points to 19.1% up from 17.6% in the fourth quarter of 2023. Gross margin dollars increased 16% year-over-year, and gross margin as a percent of sales was 40.3%, an increase of 110 basis points over the comparable prior year period. The gross margin improvement reflects the continued benefits of positive structural sales mix, including strong AMI and software-related sales, as well as ongoing price/cost benefit and solid operating execution.
Selling, engineering and administration (SEA) expenses in the fourth quarter of 2024 were $43.5 million, $4.2 million higher than the comparable prior year quarter with higher headcount and personnel-related costs as well as certain transaction costs associated with the acquisition of SmartCover. SEA as a percent of sales improved 40 basis points to 21.2% from 21.6% in the comparable prior year quarter.
The tax rate for the fourth quarter of 2024 was 27.1% compared to 26.1% in the prior year comparable period. As a result of the above, combined with increased interest income year-over-year, EPS was $1.04, an increase of 24% compared to $0.84 in the comparable prior year period.
Full Year Recap and Outlook
Bockhorst continued, “I’m incredibly proud of our performance in 2024, delivering 18% year-over-year sales growth. We achieved record operating profit margins at 19.1%, with both gross profit margin expansion and SEA leverage contributing to the 230 basis point increase year-over-year. We delivered a 35% increase in EPS, and generated record cash flows in 2024. In short, our track record of differentiated performance continued. This, coupled with execution of our strategic priorities, including investments in hardware and software innovation and complementary acquisitions, demonstrates our ability to further capitalize on the robust demand environment for comprehensive and tailorable digital water management solutions.
These industry-leading solutions deliver efficiency, resiliency, and sustainability for customers to address the variety of persistent challenges facing the water industry, including the impacts from more frequent and severe flooding on municipalities. The acquisition of SmartCover, with its focus on sewer line and lift station monitoring solutions, aids customers in visualizing and optimally managing their wastewater systems. We will continue to explore opportunities for value-creating acquisitions like SmartCover, to further amplify our growth and generate enhanced returns.
As we enter 2025, the demand environment for our end-to-end smart water offerings remains resilient. We remain committed to our strategic goals, including delivering high single-digit sales growth rates over the cycle, noting the usual unevenness common in the industry, generating modest year-over-year operating profit margin expansion and achieving free cash flow conversion above 100%.”
Bockhorst concluded, “In summary, we will continue to execute on the blueprint that has driven our success, namely our relentless focus on customer outcomes, our effective delivery of innovative solutions, and our differentiated operational acumen which we believe collectively results in strong shareholder returns and the protection of the world’s most precious resource.”
Conference Call and Webcast Information
Badger Meter management will hold a conference call to discuss the Company’s fourth quarter and full year 2024 results today, Friday January 31, 2025 at 10:00 AM Central/11:00 AM Eastern time. The webcast and related presentation can be accessed via the Investor section of the Company’s website. Individuals wishing to participate in the call should use this online registration link: https://www.netroadshow.com/events/login?show=a5367bfa&confId=76111.
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 provides comprehensive water management solutions through its BlueEdge™ suite. This tailorable portfolio of smart measurement hardware, reliable communications, data visualization and analytics software and ongoing support and industry expertise give customers the edge in optimizing their operations and contributing 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 December 31, | Twelve Months Ended December 31, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Net sales | $ | 205,182 | $ | 182,440 | $ | 826,558 | $ | 703,592 | ||||
| Cost of sales | 122,422 | 110,975 | 497,374 | 427,154 | ||||||||
| Gross margin | 82,760 | 71,465 | 329,184 | 276,438 | ||||||||
| Selling, engineering and administration | 43,537 | 39,386 | 171,248 | 158,389 | ||||||||
| Operating earnings | 39,223 | 32,079 | 157,936 | 118,049 | ||||||||
| Interest income, net | (2,924 | ) | (1,398 | ) | (8,613 | ) | (4,047 | ) | ||||
| Other pension and postretirement costs | 12 | 33 | 49 | 130 | ||||||||
| Earnings before income taxes | 42,135 | 33,444 | 166,500 | 121,966 | ||||||||
| Provision for income taxes | 11,418 | 8,723 | 41,558 | 29,368 | ||||||||
| Net earnings | $ | 30,717 | $ | 24,721 | $ | 124,942 | $ | 92,598 | ||||
| Earnings per share: | ||||||||||||
| Basic | $ | 1.05 | $ | 0.84 | $ | 4.26 | $ | 3.16 | ||||
| Diluted | $ | 1.04 | $ | 0.84 | $ | 4.23 | $ | 3.14 | ||||
| Shares used in computation of earnings per share: | ||||||||||||
| Basic | 29,368,656 | 29,305,864 | 29,355,741 | 29,284,396 | ||||||||
| Diluted | 29,559,950 | 29,471,418 | 29,533,543 | 29,455,557 | ||||||||
| BADGER METER, INC. | ||||||||||||
| --- | --- | --- | --- | --- | ||||||||
| CONSOLIDATED CONDENSED BALANCE SHEETS | ||||||||||||
| (in thousands) | ||||||||||||
| Assets | December 31, | December 31, | ||||||||||
| 2024 | 2023 | |||||||||||
| (Unaudited) | ||||||||||||
| Cash and cash equivalents | $ | 295,305 | $ | 191,782 | ||||||||
| Receivables | 84,325 | 83,507 | ||||||||||
| Inventories | 143,408 | 153,674 | ||||||||||
| Other current assets | 17,078 | 13,214 | ||||||||||
| Total current assets | 540,116 | 442,177 | ||||||||||
| Net property, plant and equipment | 74,260 | 73,878 | ||||||||||
| Intangible assets, at cost less accumulated amortization | 45,066 | 53,737 | ||||||||||
| Other long-term assets | 45,201 | 33,964 | ||||||||||
| Goodwill | 111,770 | 113,163 | ||||||||||
| Total assets | $ | 816,413 | $ | 716,919 | ||||||||
| Liabilities and Shareholders' Equity | ||||||||||||
| Payables | $ | 55,659 | $ | 81,807 | ||||||||
| Accrued compensation and employee benefits | 34,912 | 29,871 | ||||||||||
| Other current liabilities | 27,634 | 20,270 | ||||||||||
| Total current liabilities | 118,205 | 131,948 | ||||||||||
| Deferred income taxes | 3,652 | 5,061 | ||||||||||
| Long-term employee benefits and other | 88,324 | 63,428 | ||||||||||
| Shareholders' equity | 606,232 | 516,482 | ||||||||||
| Total liabilities and shareholders' equity | $ | 816,413 | $ | 716,919 | ||||||||
| BADGER METER, INC. | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | ||||||||||||
| (in thousands) | ||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||
| Operating activities: | ||||||||||||
| Net earnings | $ | 30,717 | $ | 24,721 | $ | 124,942 | $ | 92,598 | ||||
| Adjustments to reconcile net earnings to net cash provided by operations: | ||||||||||||
| Depreciation | 2,773 | 2,837 | 11,103 | 10,937 | ||||||||
| Amortization | 5,295 | 4,353 | 21,082 | 17,173 | ||||||||
| Deferred income taxes | (11,074 | ) | (9,249 | ) | (11,074 | ) | (9,650 | ) | ||||
| Noncurrent employee benefits | (141 | ) | (64 | ) | (153 | ) | (338 | ) | ||||
| Stock-based compensation expense | 1,587 | 1,225 | 6,182 | 5,188 | ||||||||
| Changes in: | ||||||||||||
| Receivables | 8,370 | 5,504 | (1,444 | ) | (6,351 | ) | ||||||
| Inventories | 13,687 | (4,839 | ) | 10,320 | (32,467 | ) | ||||||
| Payables | (6,919 | ) | (3,776 | ) | (12,161 | ) | 8,506 | |||||
| Prepaid expenses and other assets | (7,540 | ) | 267 | (15,312 | ) | (7,012 | ) | |||||
| Other liabilities | 15,312 | 16,966 | 21,549 | 31,533 | ||||||||
| Total adjustments | 21,350 | 13,224 | 30,092 | 17,519 | ||||||||
| Net cash provided by operations | 52,067 | 37,945 | 155,034 | 110,117 | ||||||||
| Investing activities: | ||||||||||||
| Property, plant and equipment expenditures | (4,669 | ) | (2,054 | ) | (12,818 | ) | (12,003 | ) | ||||
| Acquisitions, net of cash acquired | - | - | (3,000 | ) | (17,127 | ) | ||||||
| Net cash used for investing activities | (4,669 | ) | (2,054 | ) | (15,818 | ) | (29,130 | ) | ||||
| Financing activities: | ||||||||||||
| Dividends paid | (9,985 | ) | (7,918 | ) | (35,847 | ) | (29,052 | ) | ||||
| Proceeds from exercise of stock options | - | - | 751 | 967 | ||||||||
| Net cash used for financing activities | (9,985 | ) | (7,918 | ) | (35,096 | ) | (28,085 | ) | ||||
| Effect of foreign exchange rates on cash | (1,063 | ) | 899 | (597 | ) | 828 | ||||||
| Increase in cash and cash equivalents | 36,350 | 28,872 | 103,523 | 53,730 | ||||||||
| Cash and cash equivalents - beginning of period | 258,955 | 162,910 | 191,782 | 138,052 | ||||||||
| Cash and cash equivalents - end of period | $ | 295,305 | $ | 191,782 | $ | 295,305 | $ | 191,782 |