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) | April 18, 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 April 18, 2024, Badger Meter, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter ended March 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 April 18, 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: April 18, 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 FIRST QUARTER 2024 FINANCIAL RESULTS
Milwaukee, WI, April 18, 2024 - Badger Meter, Inc. (NYSE: BMI) today reported record results for the first quarter ended March 31, 2024.
First Quarter 2024 Highlights
• Record total sales of $196.3 million, 23% higher than the prior year’s $159.1 million.
• Operating profit increased 46% year-over-year, with operating profit margins expanding 290 basis points to a record 18.6% from 15.7%.
• Diluted earnings per share (EPS) increased 50% to $0.99, up from $0.66 in the comparable prior year quarter.
• Completed the acquisition of the Telog/Unity remote network monitoring offering at the start of the year.
“The continued strength in both customer demand and operating execution drove exceptional performance in our first quarter, with record quarterly revenue, operating profit and EPS results. These record results are reflective of ongoing favorable industry fundamentals, driving robust customer demand for our innovative smart water solutions. Our operating profit margins benefited from higher volumes, solid operating execution and selling, engineering and administration (SEA) expense leverage. Additionally, we completed the acquisition of the Telog/Unity network monitoring offering at the beginning of the year with seamless integration of their hardware and software teams well underway,” said Kenneth C. Bockhorst, Chairman, President and Chief Executive Officer. “I am pleased with our collective achievements to start off the year and want to thank our world-class employees for their dedication and commitment to serving our customers.”
First Quarter Operating Results
Utility water sales increased 29% year-over-year reflecting continued customer adoption across our broad and expanding portfolio of smart water solutions. This encompasses our cellular AMI offering, inclusive of ORION® Cellular endpoints and BEACON® Software as a Service (SaaS) revenues coupled with increased water meter volumes including E-Series® Ultrasonic meters. The growth also extends to water quality, pressure and network monitoring solutions which increased sales year-over-year.
Sales of flow instrumentation products increased sequentially yet declined 3% year-over-year against a difficult prior year comparison which benefited from backlog conversion on improved supply chain dynamics a year ago. Water-focused end markets continued to experience solid order demand.
Operating earnings increased 46% year-over-year, with operating profit margins reaching a record 18.6% in the first quarter of 2024, a 290 basis point improvement from the prior year’s 15.7%.
Gross margin dollars increased $14.4 million year-over-year, and gross margin as a percent of sales was 39.3%, up 10 basis points sequentially and within our normalized range. The stable gross margin range reflects the continued benefits of positive sales mix and higher volumes, despite inflationary cost pressures.
SEA expenses in the first quarter of 2024 were $40.6 million, $2.8 million higher than the comparable prior year quarter and up $1.2 million sequentially from the fourth quarter. As a percent of sales, SEA improved by 300 basis points to 20.7% versus 23.7% in the comparable prior year quarter. The year-over-year increase in SEA expenses was the result of growth investments including higher personnel-related costs such as headcount, salaries, and incentive compensation.
The tax rate for the first quarter of 2024 was 23.5%, modestly below the prior year’s 24.3%. As a result of the above, combined with increased interest income, EPS was a record $0.99, up 50% compared to $0.66 in the comparable prior year period.
Outlook
Bockhorst continued, “Our first quarter results demonstrate our continued adeptness in capitalizing on the resilient macro trends within the water industry. While we face more difficult prior year comparisons as the year progresses, we have confidence in the durability of our end markets, the appeal of our innovative offerings and strength of our execution to drive sales and earnings growth.
Our expanding suite of end-to-end smart water offerings provides our customers with the ability to customize and tailor solutions to best meet their water management needs. Our proven strategy and strong balance sheet support our ongoing capital allocation priorities including value-added, disciplined acquisitions to continue to differentiate our offerings.
We were proud to be named for the second consecutive year to Barron's 2024 list of 100 Most Sustainable Companies. Additionally, we were named a 2024 USA Top Workplace. We believe these types of recognition demonstrate our longstanding philosophy that both managing and enabling sustainability drives long-term shareholder value and world-class employee engagement.”
Bockhorst concluded, “Badger Meter remains committed to serving our customers, executing our strategy and investing for long-term profitable growth which in turn enables us 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 first quarter 2024 results today, Thursday April 18, 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 also register to take part in the call using this online registration link: https://www.netroadshow.com/events/login?show=3351168b&confId=63073.
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 March 31, | |||||||
| 2024 | 2023 | ||||||
| (Unaudited) | (Unaudited) | ||||||
| Net sales | $ | 196,280 | $ | 159,101 | |||
| Cost of sales | 119,102 | 96,285 | |||||
| Gross margin | 77,178 | 62,816 | |||||
| Selling, engineering and administration | 40,600 | 37,770 | |||||
| Operating earnings | 36,578 | 25,046 | |||||
| Interest income, net | (1,526 | ) | (622 | ) | |||
| Other pension and postretirement costs | 12 | 32 | |||||
| Earnings before income taxes | 38,092 | 25,636 | |||||
| Provision for income taxes | 8,961 | 6,221 | |||||
| Net earnings | $ | 29,131 | $ | 19,415 | |||
| Earnings per share: | |||||||
| Basic | $ | 0.99 | $ | 0.66 | |||
| Diluted | $ | 0.99 | $ | 0.66 | |||
| Shares used in computation of earnings per share: | |||||||
| Basic | 29,320,483 | 29,255,184 | |||||
| Diluted | 29,494,488 | 29,420,954 | |||||
| BADGER METER, INC. | |||||||
| --- | --- | --- | --- | --- | |||
| CONSOLIDATED CONDENSED BALANCE SHEETS | |||||||
| (in thousands) | |||||||
| Assets | March 31, | December 31, | |||||
| 2024 | 2023 | ||||||
| (Unaudited) | |||||||
| Cash and cash equivalents | $ | 199,310 | $ | 191,782 | |||
| Receivables | 92,287 | 83,507 | |||||
| Inventories | 160,444 | 153,674 | |||||
| Prepaid expenses and other current assets | 18,557 | 13,214 | |||||
| Total current assets | 470,598 | 442,177 | |||||
| Net property, plant and equipment | 72,934 | 73,878 | |||||
| Intangible assets, at cost less accumulated amortization | 52,471 | 53,737 | |||||
| Other long-term assets | 33,997 | 33,964 | |||||
| Goodwill | 113,474 | 113,163 | |||||
| Total assets | $ | 743,474 | $ | 716,919 | |||
| Liabilities and Shareholders' Equity | |||||||
| Payables | $ | 90,617 | $ | 81,807 | |||
| Accrued compensation and employee benefits | 15,588 | 29,871 | |||||
| Other current liabilities | 28,889 | 20,270 | |||||
| Total current liabilities | 135,094 | 131,948 | |||||
| Deferred income taxes | 4,894 | 5,061 | |||||
| Long-term employee benefits and other | 67,919 | 63,428 | |||||
| Shareholders' equity | 535,567 | 516,482 | |||||
| Total liabilities and shareholders' equity | $ | 743,474 | $ | 716,919 | |||
| BADGER METER, INC. | |||||||
| --- | --- | --- | --- | --- | --- | --- | |
| CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | |||||||
| (in thousands) | |||||||
| Three Months Ended March 31, | |||||||
| 2024 | 2023 | ||||||
| (Unaudited) | (Unaudited) | ||||||
| Operating activities: | |||||||
| Net earnings | $ | 29,131 | $ | 19,415 | |||
| Adjustments to reconcile net earnings to net cash provided by operations: | |||||||
| Depreciation | 2,892 | 2,663 | |||||
| Amortization | 5,118 | 4,284 | |||||
| Deferred income taxes | - | (10 | ) | ||||
| Noncurrent employee benefits | 1 | (37 | ) | ||||
| Stock-based compensation expense | 1,271 | 1,006 | |||||
| Changes in: | |||||||
| Receivables | (9,164 | ) | (6,843 | ) | |||
| Inventories | (6,405 | ) | (11,439 | ) | |||
| Payables | 7,960 | 6,959 | |||||
| Prepaid expenses and other assets | (8,065 | ) | (2,133 | ) | |||
| Other liabilities | (1,279 | ) | 4,105 | ||||
| Total adjustments | (7,671 | ) | (1,445 | ) | |||
| Net cash provided by operations | 21,460 | 17,970 | |||||
| Investing activities: | |||||||
| Property, plant and equipment expenditures | (2,676 | ) | (4,271 | ) | |||
| Acquisitions, net of cash acquired | (3,000 | ) | (17,052 | ) | |||
| Net cash used for investing activities | (5,676 | ) | (21,323 | ) | |||
| Financing activities: | |||||||
| Dividends paid | (7,942 | ) | (6,626 | ) | |||
| Proceeds from exercise of stock options | 230 | 58 | |||||
| Net cash used for financing activities | (7,712 | ) | (6,568 | ) | |||
| Effect of foreign exchange rates on cash | (544 | ) | 230 | ||||
| Increase (decrease) in cash and cash equivalents | 7,528 | (9,691 | ) | ||||
| Cash and cash equivalents - beginning of period | 191,782 | 138,052 | |||||
| Cash and cash equivalents - end of period | $ | 199,310 | $ | 128,361 |
Contacts
Karen Bauer
(414) 371-7276
kbauer@badgermeter.com