BMI Badger Meter Inc

Badger Meter, Inc. (NYSE: BMI) today reported results for the third quarter ended September 30, 2024.

Third Quarter 2024 Highlights

• Total sales of $208.4 million, 12% higher than the prior year’s $186.2 million.
• Operating profit increased 29% year-over-year, with operating profit margins expanding 260 basis points to a record 19.5%.
• Diluted earnings per share (EPS) increased 23% to $1.08, up from $0.88 in the comparable prior year quarter.
• Record cash flow with $45.1 million in net cash provided by operations, which increased 43% year-over-year.
• Increased annual dividend rate by 26% to $1.36 per share, representing the 32nd consecutive year of dividend growth.

“We were pleased with our third quarter financial performance delivering strong sales growth, record operating profit margins and robust cash flow generation. Sales in the quarter continued to benefit from solid demand for our tailorable water management solutions. Notably, we achieved record operating profit margins of 19.5%, the result of favorable sales mix, price/cost management, strong operating execution and continued selling, engineering and administration (SEA) expense leverage,” said Kenneth C. Bockhorst, Chairman, President and Chief Executive Officer. “I greatly appreciate the efforts of our employees across the globe in serving our customers.”

Third Quarter Operating Results

Utility water sales increased 14% year-over-year against a difficult prior year comparison reflecting continued solid adoption across the BlueEdge™ suite of solutions by utility customers. This included increased sales of meters, water quality, pressure and other sensors coupled with ORION® communication endpoints and BEACON® Software as a Service (SaaS).

Sales of flow instrumentation products were flat year-over-year with modest growth in the water-focused end markets generally offsetting declines across the array of de-emphasized applications, globally.

Operating earnings increased 29% year-over-year, with operating profit margins reaching a record 19.5% in the third quarter of 2024, a 260-basis point improvement from the prior year’s 16.9%. Gross margin dollars increased 15% year-over-year, and gross margin as a percent of sales was 40.2%, an increase of 110 basis points over the comparable prior year period. The gross margin improvement reflects the continued benefits of positive structural sales mix, including strong AMI and software-related sales, as well as ongoing price/cost benefit and solid operating execution.

SEA expenses in the third quarter of 2024 were $43.3 million, $2.0 million higher than the comparable prior year quarter with higher headcount and personnel-related costs. SEA as a percent of sales improved 140 basis points to 20.8% from 22.2% in the comparable prior year quarter as a result of the strong sales.

The tax rate for the third quarter of 2024 was 25.3% compared to 20.3% in the prior year comparable period which included a discrete favorable income tax benefit related to equity compensation transactions. As a result of the above, combined with increased interest income year-over-year, EPS was $1.08, an increase of 23% compared to $0.88 in the comparable prior year period.

Outlook

Bockhorst continued, “As we prepare to close out the year, we remain focused on capitalizing on the durable macro trends benefiting the water industry. By leveraging BlueEdge - our suite of tailorable end-to-end smart water offerings – our expanding customer base is realizing the efficiency, resiliency and sustainability benefits required to best meet their unique water resource management needs.

"Taking into account our normalizing backlog, strong bid funnel and constructive order rates, we anticipate delivering high single-digit sales growth rates over the cycle, noting the prevailing unevenness common in the industry. We continue to strive for modest operating profit margin expansion year-over-year, driven by favorable structural sales mix, value-based price/cost management and SEA leverage.

"Specific to the fourth quarter, similar to prior years we expect sequentially fewer total operating days given the holiday-shortened activity levels at our customers. Additionally, evolving hurricane recovery activities have the potential to delay Southeast U.S. utility projects in the near term.

"Finally, we anticipate continued robust cash flow, with ample cash and credit availability, giving us the financial flexibility to execute our capital allocation priorities as reflected in the recent 26% annual dividend increase.”

Bockhorst concluded, “Our ongoing success is built on our steadfast culture of continuous improvement, enabling our team to execute for customers and drive outperformance for Badger Meter. I remain excited about our ability to deliver shareholder value while we 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 third quarter 2024 results today, Thursday October 17, 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=e2388dc6&confId=71869

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 September 30,

 

Nine Months Ended September 30,

 

 

2024

 

2023

 

2024

 

2023

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

Net sales

 

$

208,438

 

 

$

186,193

 

 

$

621,376

 

 

$

521,152

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

124,560

 

 

 

113,470

 

 

 

374,952

 

 

 

316,179

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

83,878

 

 

 

72,723

 

 

 

246,424

 

 

 

204,973

 

 

 

 

 

 

 

 

 

 

Selling, engineering and administration

 

 

43,255

 

 

 

41,301

 

 

 

127,711

 

 

 

119,003

 

 

 

 

 

 

 

 

 

 

Operating earnings

 

 

40,623

 

 

 

31,422

 

 

 

118,713

 

 

 

85,970

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

(2,301

)

 

 

(1,200

)

 

 

(5,689

)

 

 

(2,649

)

Other pension and postretirement costs

 

 

13

 

 

 

32

 

 

 

37

 

 

 

97

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

 

42,911

 

 

 

32,590

 

 

 

124,365

 

 

 

88,522

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

10,873

 

 

 

6,621

 

 

 

30,140

 

 

 

20,645

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

32,038

 

 

$

25,969

 

 

$

94,225

 

 

$

67,877

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.09

 

 

$

0.89

 

 

$

3.21

 

 

$

2.32

 

 

 

 

 

 

 

 

 

 

Diluted

 

$

1.08

 

 

$

0.88

 

 

$

3.19

 

 

$

2.30

 

 

 

 

 

 

 

 

 

 

Shares used in computation of earnings per share:

 

 

 

 

 

 

 

 

 

Basic

 

 

29,369,923

 

 

 

29,294,886

 

 

 

29,351,688

 

 

 

29,275,445

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

29,547,928

 

 

 

29,473,374

 

 

 

29,524,993

 

 

 

29,448,475

 

 

 

 

 

 

 

 

 

 

BADGER METER, INC.

 

 

 

 

CONSOLIDATED CONDENSED BALANCE SHEETS

(in thousands)

 

 

 

 

 

 

 

 

Assets

September 30,

 

December 31,

 

2024

 

2023

 

(Unaudited)

 

 

 

 

 

 

Cash and cash equivalents

$

258,955

 

$

191,782

Receivables

 

93,427

 

 

83,507

Inventories

 

158,517

 

 

153,674

Other current assets

 

18,397

 

 

13,214

Total current assets

 

529,296

 

 

442,177

 

 

 

 

Net property, plant and equipment

 

73,279

 

 

73,878

Intangible assets, at cost less accumulated amortization

 

48,957

 

 

53,737

Other long-term assets

 

36,328

 

 

33,964

Goodwill

 

115,001

 

 

113,163

Total assets

$

802,861

 

$

716,919

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

Payables

$

77,381

 

$

81,807

Accrued compensation and employee benefits

 

29,756

 

 

29,871

Other current liabilities

 

22,026

 

 

20,270

Total current liabilities

 

129,163

 

 

131,948

 

 

 

 

Deferred income taxes

 

5,108

 

 

5,061

Long-term employee benefits and other

 

77,405

 

 

63,428

Shareholders' equity

 

591,185

 

 

516,482

Total liabilities and shareholders' equity

$

802,861

 

$

716,919

 

 

 

 

BADGER METER, INC.

 

 

 

 

 

 

 

 

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

Operating activities:

 

 

 

 

 

 

 

Net earnings

$

32,038

 

 

$

25,969

 

 

$

94,225

 

 

$

67,877

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net earnings to net cash provided by operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

2,589

 

 

 

2,662

 

 

 

8,330

 

 

 

8,100

 

Amortization

 

5,427

 

 

 

4,404

 

 

 

15,787

 

 

 

12,820

 

Deferred income taxes

 

-

 

 

 

(25

)

 

 

-

 

 

 

(401

)

Noncurrent employee benefits

 

9

 

 

 

(52

)

 

 

(12

)

 

 

(274

)

Stock-based compensation expense

 

1,314

 

 

 

1,356

 

 

 

4,595

 

 

 

3,963

 

Changes in:

 

 

 

 

 

 

 

Receivables

 

13,403

 

 

 

(5,352

)

 

 

(9,814

)

 

 

(11,855

)

Inventories

 

3,889

 

 

 

(3,875

)

 

 

(3,367

)

 

 

(27,628

)

Payables

 

(18,581

)

 

 

4,178

 

 

 

(5,242

)

 

 

12,282

 

Prepaid expenses and other assets

 

717

 

 

 

(2,299

)

 

 

(7,772

)

 

 

(7,279

)

Other liabilities

 

4,283

 

 

 

4,467

 

 

 

6,237

 

 

 

14,567

 

Total adjustments

 

13,050

 

 

 

5,464

 

 

 

8,742

 

 

 

4,295

 

Net cash provided by operations

 

45,088

 

 

 

31,433

 

 

 

102,967

 

 

 

72,172

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

Property, plant and equipment expenditures

 

(3,132

)

 

 

(3,014

)

 

 

(8,149

)

 

 

(9,949

)

Acquisitions, net of cash acquired

 

-

 

 

 

-

 

 

 

(3,000

)

 

 

(17,127

)

Net cash used for investing activities

 

(3,132

)

 

 

(3,014

)

 

 

(11,149

)

 

 

(27,076

)

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

Dividends paid

 

(9,986

)

 

 

(7,917

)

 

 

(25,862

)

 

 

(21,134

)

Proceeds from exercise of stock options

 

-

 

 

 

909

 

 

 

751

 

 

 

967

 

Net cash used for financing activities

 

(9,986

)

 

 

(7,008

)

 

 

(25,111

)

 

 

(20,167

)

Effect of foreign exchange rates on cash

 

773

 

 

 

(306

)

 

 

466

 

 

 

(71

)

 

 

 

 

 

 

 

 

Increase in cash and cash equivalents

 

32,743

 

 

 

21,105

 

 

 

67,173

 

 

 

24,858

 

Cash and cash equivalents - beginning of period

 

226,212

 

 

 

141,805

 

 

 

191,782

 

 

 

138,052

 

 

 

 

 

 

 

 

 

Cash and cash equivalents - end of period

$

258,955

 

 

$

162,910

 

 

$

258,955

 

 

$

162,910

 

 

 

 

 

 

 

 

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241017151333/en/

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