Badger Meter, Inc. (NYSE: BMI) today reported results for the
fourth quarter and full year ended December 31, 2022.
Fourth Quarter 2022 Highlights
- Total sales of $147.3 million, 8.5% higher than the prior
year’s $135.7 million. Excluding the unfavorable impact of the
stronger US dollar, sales increased approximately 10%.
- Delivered diluted earnings per share (EPS) of $0.60, an
increase from $0.59 last year despite difficult prior year
comparisons.
- Strong cash flow with $29.7 million in net cash provided by
operations.
Full Year 2022 Highlights
- Record total sales of $565.6 million, 11.9% higher than the
prior year’s $505.2 million. Excluding the unfavorable impact of
the strong US dollar, sales increased approximately 13%.
- Software sales reached a record $33.8 million, representing 6%
of consolidated revenues.
- Operating profit increased 11% over the prior year.
- EPS increased 9% to $2.26, up from $2.08 in the prior
year.
- Strong cash flow with $82.5 million in net cash provided by
operations.
“Badger Meter finished the year with strong financial results
which reflect the differentiated execution and customer focus our
team exhibited throughout fiscal 2022. Sales for the quarter
increased 8.5% reflecting positive industry fundamentals and the
competitive advantages of our smart water solutions, which
continued to fuel sales and order momentum. We continued to
actively manage inflation and supply chain dynamics, as well as
working capital which led to robust cash flow generation in the
quarter. Shortly after year-end, we deployed approximately $18
million to acquire Syrinix, Ltd., a provider of pressure monitoring
solutions, demonstrating our ongoing strategic growth focus on
enhancing our smart water offerings,” said Kenneth C. Bockhorst,
Chairman, President and Chief Executive Officer. “I am extremely
proud of our team’s accomplishments in 2022 and remain excited
about the opportunities ahead.”
Fourth Quarter Operating
Results
Utility water sales increased 9% year-over-year, which was
notable given the more difficult year-over-year comparison after
double digit sales growth in the preceding four quarters. Sales
growth was again broad-based, reflecting the growing adoption of
our cellular AMI solution, with higher ORION® Cellular endpoint and
BEACON® SaaS revenues coupled with increased meter volumes
including E-Series® Ultrasonic meters. Backlog expanded further as
record order rates in the quarter exceeded sales.
Sales of flow instrumentation products increased 8%
year-over-year, with solid order demand across the water-focused
end markets and modestly improving supply chain dynamics which
aided manufacturing output. Excluding the unfavorable impact of the
strong US dollar, flow instrumentation sales increased 10%
year-over-year.
Gross margin as a percent of sales was 38.7%, consistent with
the prior quarter and in the middle of the Company’s normalized
range as the benefit of strong orders, sales mix and pricing
pull-through continued to offset persistent inflationary pressures
and intermittent supply chain disruptions.
Selling, engineering and administration (SEA) expenses in the
fourth quarter of 2022 were $34.5 million, or 23.4% as a percent of
sales, compared to $32.0 million, and 23.6% in the comparable prior
year quarter. The $2.5 million increase in SEA expenses
year-over-year was due to higher personnel and incentive
compensation costs, R&D investments and travel.
The tax rate for the fourth quarter of 2022 was 23.4%, modestly
lower than the prior year’s 24.5%. As a result of the above, EPS
was $0.60 compared to $0.59 in the comparable prior year
period.
Full Year Recap and Outlook
Bockhorst continued, “Badger Meter’s 2022 results provide a
clear demonstration of how our ongoing strategic actions position
the company to perform well throughout economic cycles, generating
superior value for shareholders. Amid persistent volatility in the
operating environment, Badger Meter delivered double digit revenue
growth, SEA operating leverage, EPS expansion, robust working
capital management and strong cash flow. This in turn enabled the
strategic execution of our capital allocation priorities including
a dividend increase and the recently announced acquisition of
Syrinix, Ltd. These accomplishments are a testament to the
resiliency of our business model and world-class Badger Meter
team.”
“As we enter 2023, the demand environment remains robust, aided
by favorable secular growth trends for digital smart water
solutions delivering efficiency, resiliency and sustainability. Our
value proposition has supported our ability to drive price
realization, which will provide continuing benefits to our results.
While macro challenges have not dissipated, we do expect pockets of
inflationary leveling along with continual supply chain
improvements as the year progresses. In summary, we believe we are
well positioned regardless of the macro environment, as our
comprehensive offerings, exceptional execution and the strength of
our balance sheet remain competitive advantages.”
Bockhorst concluded, “Badger Meter has an unwavering focus on
innovation, serving customers and operational execution. Our
exceptional team and durable business model uniquely position us to
deliver shareholder value while furthering our vision to preserve
and protect 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 2022 results today,
Friday January 27, 2023 at 10:00 AM Central/11:00 AM Eastern time.
The 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=fb45eb35&confId=45700
The webcast will be archived on the Company’s website until its
next earnings release.
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 December 31, Twelve Months Ended December 31,
2022
2021
2022
2021
(Unaudited) (Unaudited) Net sales
$
147,324
$
135,748
$
565,568
$
505,198
Cost of sales
90,359
80,913
345,598
299,714
Gross margin
56,965
54,835
219,970
205,484
Selling, engineering and administration
34,491
31,975
132,675
126,761
Operating earnings
22,474
22,860
87,295
78,723
Interest income, net
(465
)
(49
)
(552
)
(20
)
Other pension and postretirement costs
33
30
130
120
Earnings before income taxes
22,906
22,879
87,717
78,623
Provision for income taxes
5,367
5,603
21,221
17,739
Net earnings
$
17,539
$
17,276
$
66,496
$
60,884
Earnings per share: Basic
$
0.60
$
0.59
$
2.28
$
2.09
Diluted
$
0.60
$
0.59
$
2.26
$
2.08
Shares used in computation of earnings per share:
Basic
29,230,963
29,194,121
29,218,486
29,144,160
Diluted
29,406,499
29,367,693
29,376,077
29,337,586
BADGER METER, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands)
Assets
December 31,
December 31,
2022
2021
(Unaudited) Cash and cash equivalents
$
138,052
$
87,174
Receivables
76,651
65,866
Inventories
119,856
99,611
Other current assets
13,273
8,709
Total current assets
347,832
261,360
Net property, plant and equipment
73,542
78,050
Intangible assets, at cost less accumulated amortization
53,607
64,176
Other long-term assets
26,805
22,919
Goodwill
101,261
104,313
Total assets
$
603,047
$
530,818
Liabilities
and Shareholders' Equity
Payables
$
71,440
$
41,859
Accrued compensation and employee benefits
20,513
20,644
Other current liabilities
18,359
19,643
Total current liabilities
110,312
82,146
Deferred income taxes
4,648
5,385
Long-term employee benefits and other
45,665
40,217
Shareholders' equity
442,422
403,070
Total liabilities and shareholders' equity
$
603,047
$
530,818
BADGER METER, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH
FLOWS (in thousands) Three Months Ended December 31,
Twelve Months Ended December 31,
2022
2021
2022
2021
(Unaudited) (Unaudited) Operating activities: Net earnings
$
17,539
$
17,276
$
66,496
$
60,884
Adjustments to reconcile net earnings to net cash provided by
operations: Depreciation
2,677
2,672
11,090
11,291
Amortization
3,403
4,213
15,151
16,571
Deferred income taxes
(5,643
)
(3,066
)
(5,619
)
(3,055
)
Noncurrent employee benefits
(510
)
(466
)
(648
)
(234
)
Stock-based compensation expense
978
793
3,148
2,330
Changes in: Receivables
7,532
7,745
(11,328
)
(1,240
)
Inventories
(4,814
)
(7,948
)
(21,021
)
(13,633
)
Payables
4,137
(415
)
28,007
7,005
Prepaid expenses and other assets
(1,152
)
3,367
(10,557
)
(8,281
)
Other liabilities
5,561
2,906
7,732
15,872
Total adjustments
12,169
9,801
15,955
26,626
Net cash provided by operations
29,708
27,077
82,451
87,510
Investing activities: Property, plant and equipment
expenditures
(1,201
)
(903
)
(5,891
)
(6,746
)
Proceeds from company owned life insurance plans
-
-
-
596
Acquisitions, net of cash acquired
-
-
-
(45,273
)
Net cash used for investing activities
(1,201
)
(903
)
(5,891
)
(51,423
)
Financing activities: Dividends paid
(6,589
)
(5,839
)
(24,881
)
(22,155
)
Proceeds from exercise of stock options
642
-
703
2,036
Repurchase of treasury stock
-
-
(427
)
(460
)
Issuance of treasury stock
-
-
-
72
Net cash used for financing activities
(5,947
)
(5,839
)
(24,605
)
(20,507
)
Effect of foreign exchange rates on cash
705
(199
)
(1,077
)
(679
)
Increase in cash and cash equivalents
23,265
20,136
50,878
14,901
Cash and cash equivalents - beginning of period
114,787
67,038
87,174
72,273
Cash and cash equivalents - end of period
$
138,052
$
87,174
$
138,052
$
87,174
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230127005019/en/
Karen Bauer (414) 371-7276 kbauer@badgermeter.com
Badger Meter (NYSE:BMI)
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