BMI Badger Meter Inc

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

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240719607264/en/

Karen Bauer (414) 371-7276 kbauer@badgermeter.com