Badger Meter, Inc. (NYSE: BMI) today reported record results for
the first quarter ended March 31, 2023.
First Quarter 2023 Highlights
- Total sales of $159.1 million, 20% higher than the prior year’s
$132.4 million.
- Operating profit increased 33% year-over-year, with operating
profit margins expanding 150 basis points to 15.7% from 14.2%.
- Diluted earnings per share (EPS) increased 35% to $0.66, up
from $0.49 in the comparable prior year quarter.
- Completed the acquisition of Syrinix, Ltd. (“Syrinix”)
- Robust demand environment continued with strong orders; record
backlog despite the all-time high sales performance in the
quarter.
“Badger Meter delivered record financial results in the first
quarter reflecting our ongoing success in capitalizing on the
strength of our end markets and the sequentially improving
operating environment. We generated an all-time high quarterly
revenue total in the first quarter, delivering 20% sales growth
reflective of favorable industry fundamentals, healthy demand for
our innovative smart water solutions, and outstanding execution on
the part of our employees and supply base which led to higher
production output. This, in turn, led to operating profit margin
improvement which also benefited from structural mix improvement,
value-based pricing, stabilization of inflationary pressures and
selling, engineering and administration (SEA) leverage. We
completed the acquisition of Syrinix at the beginning of the year
for $18 million, extending our differentiated smart water offerings
with pressure monitoring and leak detection capabilities,” said
Kenneth C. Bockhorst, Chairman, President and Chief Executive
Officer. “I am extremely pleased with our start to the year and
want to thank our global employees for their continued tremendous
efforts in serving customers.”
First Quarter Operating Results
Utility water sales increased 20% year-over-year with continued
robust adoption of our cellular AMI solution, including higher
ORION® Cellular endpoint and BEACON® Software as a Service (SaaS)
revenues coupled with increased water meter volumes including
E-Series® Ultrasonic meters. Improved component availability, price
realization and the addition of Syrinix also contributed to the
year-over-year sales increase. Backlog expanded further despite the
strong sales result.
Sales of flow instrumentation products increased 22%
year-over-year, with strong order demand across the water-focused
end markets and improving supply chain dynamics which aided
manufacturing output.
Gross margin dollars increased $12.1 million year-over-year, and
gross margin as a percent of sales improved 120 basis points to
39.5%, at the higher end of the Company’s normalized range. The
improvement was due to the combined benefits of positive sales mix
including higher SaaS revenues, production efficiencies,
value-based pricing and the sequential stabilization of
inflationary pressures.
SEA expenses in the first quarter of 2023 were $37.8 million,
$5.9 million higher than the comparable prior year quarter. As a
percent of sales, SEA improved by 40 basis points to 23.7% versus
24.1% in the comparable prior year quarter. The increase in SEA
dollars year-over-year was due to higher personnel-related costs
including increased headcount, salaries, sales and management
incentives and travel expenses and the addition of Syrinix,
including the associated intangible asset amortization.
Operating profit margin was 15.7% in the first quarter of 2023,
a 150 basis point improvement from the prior year’s 14.2%.
The tax rate for the first quarter of 2023 was 24.3%, modestly
above the prior year’s 23.7%. As a result, EPS was a record $0.66,
up 35% compared to $0.49 in the comparable prior year period.
Strategic Review and Outlook
Bockhorst continued, “As our first quarter demonstrates, we have
started 2023 with positive momentum. We have confidence in the
resiliency of our end markets, flexible business model and proven
execution playbook to deliver on our strategy for superior
through-cycle shareholder value creation. Our expanding portfolio
of end-to-end smart water offerings brings tailorable and proactive
intelligence for optimal water management to our customers and our
stellar balance sheet supports our capital allocation priorities
including value-added, disciplined acquisitions.
Demand trends in our markets remain healthy and we have
experienced positive order trends, stable bid funnel and record
backlogs supportive of continued strong financial performance. The
sustained high order level is evidence that utility and industrial
customers are willing to invest in our innovative and industry
leading smart water solutions. The benefit of supply chain relief
and steadying inflationary headwinds, along with solid operational
execution lay the foundation for margin resilience for the balance
of 2023.
We are proud to be named to Barron's 2023 100 Most Sustainable
Companies list. We believe this type of recognition demonstrates
our longstanding philosophy that it is possible to deliver both
strong financial and sustainability performance.”
Bockhorst concluded, “Badger Meter provides differentiated smart
water solutions that deliver efficiency, resiliency and
sustainability to customers throughout the water eco-system.
Healthy demand for these innovative and trusted offerings, along
with our strong balance sheet, give us confidence in our long-term
growth outlook as we help 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 2023 results today, Thursday April 20,
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=9a93b9e7&confId=48968
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 March 31,
2023
2022
(Unaudited)
(Unaudited)
Net sales
$
159,101
$
132,402
Cost of sales
96,285
81,679
Gross margin
62,816
50,723
Selling, engineering and administration
37,770
31,861
Operating earnings
25,046
18,862
Interest (income) expense, net
(622
)
13
Other pension and postretirement costs
32
32
Earnings before income taxes
25,636
18,817
Provision for income taxes
6,221
4,457
Net earnings
$
19,415
$
14,360
Earnings per share: Basic
$
0.66
$
0.49
Diluted
$
0.66
$
0.49
Shares used in computation of earnings per share:
Basic
29,255,184
29,198,888
Diluted
29,420,954
29,363,326
BADGER METER, INC. CONSOLIDATED CONDENSED BALANCE
SHEETS (in thousands)
Assets
March 31,
December 31,
2023
2022
(Unaudited) Cash and cash equivalents
$
128,361
$
138,052
Receivables
84,246
76,651
Inventories
132,344
119,856
Other current assets
15,892
13,273
Total current assets
360,843
347,832
Net property, plant and equipment
74,525
73,542
Intangible assets, at cost less accumulated amortization
59,511
53,607
Other long-term assets
24,756
26,805
Goodwill
113,768
101,261
Total assets
$
633,403
$
603,047
Liabilities
and Shareholders' Equity
Payables
$
79,549
$
71,440
Accrued compensation and employee benefits
11,984
20,513
Other current liabilities
24,253
18,359
Total current liabilities
115,786
110,312
Deferred income taxes
6,744
4,648
Long-term employee benefits and other
52,836
45,665
Shareholders' equity
458,037
442,422
Total liabilities and shareholders' equity
$
633,403
$
603,047
BADGER METER, INC. CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS (in thousands)
Three Months Ended March 31,
2023
2022
(Unaudited) (Unaudited) Operating activities: Net earnings
$
19,415
$
14,360
Adjustments to reconcile net earnings to net cash provided by
operations: Depreciation
2,663
2,760
Amortization
4,284
4,016
Deferred income taxes
(10
)
(34
)
Noncurrent employee benefits
(37
)
(112
)
Stock-based compensation expense
1,006
615
Changes in: Receivables
(6,843
)
(12,509
)
Inventories
(11,439
)
(3,763
)
Payables
6,959
10,749
Prepaid expenses and other current assets
(2,133
)
(2,904
)
Other liabilities
4,105
(3,928
)
Total adjustments
(1,445
)
(5,110
)
Net cash provided by operations
17,970
9,250
Investing activities: Property, plant and equipment
expenditures
(4,271
)
(1,141
)
Acquisitions, net of cash acquired
(17,052
)
-
Net cash used for investing activities
(21,323
)
(1,141
)
Financing activities: Dividends paid
(6,626
)
(5,869
)
Proceeds from exercise of stock options
58
-
Net cash used for financing activities
(6,568
)
(5,869
)
Effect of foreign exchange rates on cash
230
(195
)
(Decrease) increase in cash and cash equivalents
(9,691
)
2,045
Cash and cash equivalents - beginning of period
138,052
87,174
Cash and cash equivalents - end of period
$
128,361
$
89,219
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230420005097/en/
Karen Bauer (414) 371-7276 kbauer@badgermeter.com
Badger Meter (NYSE:BMI)
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