Net sales, earnings and EPS set new all-time
records
Badger Meter, Inc. (NYSE: BMI) today reported record second
quarter results for the quarter ended June 30, 2017.
Second Quarter 2017 Highlights
- Net sales of $104,176,000 for the
second quarter of 2017 were a record for any quarter and increased
0.3% from sales of $103,820,000 for the second quarter of
2016.
- Net earnings of $10,614,000 for the
second quarter of 2017 were a record for any quarter and increased
12.9% from net earnings of $9,400,000 for the second quarter of
2016.
- Diluted earnings per share of $0.36 for
the second quarter of 2017 were a record for any quarter and
increased 12.5% from diluted earnings per share of $0.32 for the
second quarter of 2016.
First Half 2017 Highlights
- Net sales were $205,782,000 for the
first half of 2017, a 0.7% increase from sales of $204,390,000 for
the first half of 2016.
- Net earnings were $19,363,000 for the
first half of 2017, an 11.3% increase from net earnings of
$17,390,000 for the first half of 2016.
- Diluted earnings per share were $0.67
for the first half of 2017, an 11.7% increase from diluted earnings
per share of $0.60 for the first half of 2016.
Operations Review
“We are pleased that we set new all-time records for net sales,
net earnings and diluted earnings per share, especially coming
after a record second quarter performance last year,” said Richard
A. Meeusen, chairman, president and chief executive officer of
Badger Meter.
“Our second quarter domestic residential and commercial
municipal water product sales were essentially flat year-over-year
as some customers delayed orders to take advantage of the latest
advancement in our ORION® Cellular technology, the ORION Cellular
Long-Term Evolution (LTE) endpoint, which we began shipping in June
2017. This first-to-market LTE cellular endpoint not only provides
the latest cellular technology to new customers, but also enables
the company’s existing ORION® Cellular customers to continue
building out their system with the newer LTE networks,” explained
Meeusen.
“Our new ORION Cellular LTE endpoint is the latest example of
how Badger Meter is always working to be at the forefront of
advanced metering technology and analytics that will ensure our
customers remain current with the latest advances in cellular
communications,” said Meeusen.
Meeusen also said domestic sales of flow instrumentation
products increased in the second quarter, but were partially offset
by fewer international projects. “We were pleased to see the
long-awaited recovery of our oil and gas business during this
quarter,” commented Meeusen.
The company further strengthened its presence in the ultrasonic
flowmeter market with the acquisition of D-Flow Technology
AB of Luleå, Sweden in the second quarter. D-Flow
Technology specializes in the design and development of ultrasonic
technology, primarily for use in flow measurement. The acquisition
will allow Badger Meter to further enhance its successful E-Series®
Ultrasonic product line, lower production costs and provide a
platform for further advancement of its ultrasonic capabilities.
D-Flow Technology’s facilities in Sweden will become a Badger Meter
Technology Center.
“The integration of D-Flow Technology’s operations is on
schedule and we have begun an accelerated project to develop
E-Series® Ultrasonic meters for commercial applications, which
will extend our family of ultrasonic meters into larger sizes. We
are already seeing the benefits of this ultrasonic technology
expertise,” said Meeusen.
Meeusen said the gross profit margin was 39.4% in the second
quarter of 2017 compared to 37.9% in the prior year quarter.
Pricing discipline, manufacturing cost controls and the company’s
strategy to acquire or consolidate much of its distribution network
helped to offset the headwinds of higher brass costs.
Selling, engineering and administration expenses were
essentially the same as the second quarter of 2016, primarily due
to staffing reductions in the flow instrumentation business that
occurred in the second half of 2016 and lower health care
expenses.
“With two consecutive record-setting quarters behind us, we
continue to be optimistic about the remainder of the year,” added
Meeusen.
Conference Call and Webcast
Badger Meter management will hold a conference call to discuss
the company’s second quarter 2017 results on Friday, July 21, 2017
at 10:00 AM Central/11:00 AM Eastern time.
Interested parties can listen to the call live on the Internet
through the company’s website: www.badgermeter.com or by
dialing 1-844-281-9843 and entering the passcode 36580283.
Listeners should dial in to the call at least 5-10 minutes prior to
the start of the call or should go to the website at least 15
minutes prior to the call to download and install any necessary
audio software.
A telephone replay of the conference call will be available
through Friday, July 28, 2017, by dialing 1-855-859-2056 and
entering the passcode 36580283. The webcast will be archived on the
company’s website until its next earnings release.
About Badger Meter
Badger Meter is an innovator in flow measurement, control and
communications solutions, serving water utilities, municipalities,
and commercial and industrial customers worldwide. The Company’s
products measure water, oil, chemicals, and other fluids, and are
known for accuracy, long-lasting durability and for providing
valuable and timely measurement data. For more information, visit
www.badgermeter.com.
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 in the forward
looking statements. The words “anticipate,” “believe,” “estimate,”
“expect,” “think,” “should,” “could” and “objective” or similar
expressions are intended to identify forward looking statements.
All such forward looking statements are based on the Company’s then
current views and assumptions and involve risks and uncertainties.
Some risks and uncertainties that could cause actual results to
differ materially from those expressed or implied in forward
looking statements include those described in Item 1A of the
Company’s Annual Report on Form 10-K for the year ended December
31, 2016 that include, among other things:
- the continued shift in the Company’s
business from lower cost, manually read meters toward more
expensive, value-added automatic meter reading (AMR) systems,
advanced metering infrastructure (AMI) systems and advanced
metering analytics (AMA) systems that offer more comprehensive
solutions to customers’ metering needs;
- the success or failure of newer Company
products;
- changes in competitive pricing and bids
in both the domestic and foreign marketplaces, and particularly in
continued intense price competition on government bid contracts for
lower cost, manually read meters;
- the actions (or lack thereof) of the
Company’s competitors;
- changes in the Company’s relationships
with its alliance partners, primarily its alliance partners that
provide radio solutions, and particularly those that sell products
that do or may compete with the Company’s products;
- changes in the general health of the
United States and foreign economies, including to some extent such
things as the length and severity of global economic downturns,
international or civil conflicts that affect international trade,
the ability of municipal water utility customers to authorize and
finance purchases of the Company’s products, the Company’s ability
to obtain financing, housing starts in the United States, and
overall industrial activity;
- unusual weather, weather patterns or
other natural phenomena, including related economic and other
ancillary effects of any such events;
- economic policy changes, including but
not limited to, trade policy and corporate taxation;
- the timing and impact of government
funding programs that stimulate national and global economies, as
well as the impact of government budget cuts or partial shutdowns
of governmental operations;
- changes in the cost and/or availability
of needed raw materials and parts, such as volatility in the cost
of brass castings as a result of fluctuations in commodity prices,
particularly for copper and scrap metal at the supplier level,
foreign-sourced electronic components as a result of currency
exchange fluctuations and/or lead times, and plastic resin as a
result of changes in petroleum and natural gas prices;
- the Company’s expanded role as a prime
contractor for providing complete technology systems to
governmental entities, which brings with it added risks, including
but not limited to, the Company’s responsibility for subcontractor
performance, additional costs and expenses if the Company and its
subcontractors fail to meet the timetable agreed to with the
governmental entity, and the Company’s expanded warranty and
performance obligations;
- the Company’s ability to successfully
integrate acquired businesses or products;
- changes in foreign economic conditions,
particularly currency fluctuations in the United States dollar, the
Euro and the Mexican peso;
- the inability to develop
technologically advanced products;
- the failure of the Company’s products
to operate as intended;
- the inability to protect the Company’s
proprietary rights to its products;
- disruptions and other damages to
information technology and other networks and operations due to
breaches in data security or any other cybersecurity attack;
- transportation delays or
interruptions;
- violations or alleged violations of the
U.S. Foreign Corrupt Practices Act (FCPA) or other anti-corruption
laws and the Foreign Account Tax Compliance provisions of the
Hiring Incentives to Restore Employment Act (referred to as
FATCA);
- the loss of certain single-source
suppliers; and
- changes in laws and regulations,
particularly laws dealing with the content or handling of materials
used in the Company's products.
All of these factors are beyond the Company's control to varying
degrees. Shareholders, potential investors and other readers are
urged to consider these factors carefully in evaluating the forward
looking statements contained in this news release and are cautioned
not to place undue reliance on such forward looking statements. The
forward looking statements made in this document are made only as
of the date of this document and the Company assumes no obligation,
and disclaims any obligation, to update any such forward looking
statements to reflect subsequent events or circumstances.
Badger Meter company news is available24 hours
a day, online at: http://www.badgermeter.com.
BADGER METER, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (in
thousands, except share and earnings per share data)
Three Months Ended Six Months Ended June 30, June 30, June 30, June
30, 2017 2016 2017 2016 (Unaudited) (Unaudited) (Unaudited)
(Unaudited) Net sales $104,176 $103,820 $205,782 $204,390
Cost of sales 63,122 64,424 126,078 125,983 Gross
margin 41,054 39,396 79,704 78,407 Selling, engineering and
administration 24,463 24,474 49,644 50,679 Operating
earnings 16,591 14,922 30,060 27,728 Interest expense, net
147 228 325 498 Earnings before income taxes 16,444 14,694
29,735 27,230 Provision for income taxes 5,830 5,294 10,372
9,840 Net earnings $10,614 $9,400 $19,363 $17,390
Earnings per share: Basic $0.37 $0.33 $0.67 $0.60
Diluted $0.36 $0.32 $0.67 $0.60 Shares used in computation
of earnings per share: Basic 28,938,451 28,887,078
28,938,851 28,868,794 Diluted 29,097,820 29,051,409
29,109,675 29,028,391 BADGER METER,
INC. CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands)
Assets
June 30, December 31, 2017 2016 (Unaudited) Cash $ 13,850 $
7,338 Receivables 64,426 59,818 Inventories 73,888 77,701 Other
current assets 4,335 6,155 Total current assets 156,499 151,012
Net property, plant and equipment 91,458 90,194 Intangible
assets, at cost less accumulated amortization 60,027 51,872 Other
long-term assets 9,606 7,307 Goodwill 61,156 49,314 Total assets $
378,746 $ 349,699
Liabilities and
Shareholders' Equity
Short-term debt $ 45,560 $ 37,950 Payables 23,891 18,350
Accrued compensation and employee benefits 11,116 13,861 Other
liabilities 9,705 5,677 Total current liabilities 90,272 75,838
Deferred income taxes 1,638 1,901 Long-term employee
benefits and other 17,430 15,751 Shareholders' equity 269,406
256,209 Total liabilities and shareholders' equity $ 378,746 $
349,699
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version on businesswire.com: http://www.businesswire.com/news/home/20170720006293/en/
Badger Meter, Inc.Dawn O’Neill, (414) 371-7276
Badger Meter (NYSE:BMI)
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