Badger Meter Reports Third Quarter Results
Badger
Meter, Inc. (NYSE: BMI) today reported results for the third quarter
ended September 30, 2015.
Third Quarter 2015 Highlights
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Net sales were a record $99,388,000 for the third quarter of 2015, a
3.2% increase from sales of $96,271,000 for the third quarter of 2014.
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Net earnings were $8,327,000 for the third quarter of 2015, an 18.6%
decrease from net earnings of $10,231,000 for the third quarter of
2014.
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Diluted earnings per share were $0.58 for the third quarter of 2015,
an 18.3% decrease from diluted earnings per share of $0.71 for the
third quarter of 2014.
First Nine Months 2015 Highlights
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Net sales were $281,928,000 for the first three quarters of 2015, a
2.4% increase from sales of $275,429,000 for the first three quarters
of 2014.
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Net earnings were $20,455,000 for the first three quarters of 2015, a
13.6% decrease from net earnings of $23,677,000 for the first three
quarters of 2014.
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Diluted earnings per share were $1.42 for the first three quarters of
2015, a 14.5% decrease from diluted earnings per share of $1.66 for
the first three quarters of 2014.
Operations Review
“While sales set a new record for any quarter in our history, our
overall performance was not at the level we anticipated. Sales of
municipal water products were up over the prior year quarter and
National Meter & Automation again made a positive contribution. However,
flow instrumentation product sales were down. Net earnings were impacted
by a number of factors including a lower profit margin and a higher tax
rate,” said Richard A. Meeusen, chairman, president and chief executive
officer of Badger Meter.
“Sales of both residential and commercial municipal water products
increased in the third quarter, with strong sales of our newest
products, including E-Series® Ultrasonic meters and BEACON®
Advanced Metering Analytics (AMA) software and ORION®
cellular endpoints. Sales of municipal water products would have been
even higher if not for a product issue at one of our alliance partners.
We estimate approximately $4.5 million in potential sales were delayed
in the third quarter because of this issue. We believe these sales will
be recouped over the next several quarters,” said Meeusen. He added that
the decrease in flow instrumentation product sales was due to continued
weakness in the oil and gas market, the impact of the weaker Euro and
softness in the general economy, particularly production capacity
expansion in the process markets.
The gross profit margin was 36.3% for the third quarter of 2015,
compared to 37.9% for the third quarter of 2014. The decrease was due to
product mix, with increased sales of municipal water products and lower
sales of generally higher margin flow instrumentation products, higher
health care costs and a one-time write-off of older gas radio inventory.
This was offset in part by incremental profit from National Meter and
favorable brass costs.
In addition to the lower profit margin, net earnings were impacted by
higher selling, engineering and administration expenses due to the
National Meter acquisition and a higher third-quarter tax rate that
resulted from a tax reserve adjustment in conjunction with the filing of
the company’s 2014 tax return.
Summary
“While the overall economy is not growing as fast as we would like, we
are optimistic about the opportunities we have with our successful new
products, new products under development and sales of our alliance
partner’s products that have been pushed into the next few quarters. We
believe we are well positioned for profitable growth in the long term,”
said Meeusen.
Conference Call and Webcast
Badger Meter management will hold a conference call to discuss the
company’s 2015 third quarter results on Tuesday, October 20, 2015, 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 Web site: www.badgermeter.com
or by dialing 1-888-713-4211 and entering the passcode 50591396.
Listeners should dial in to the call at least 5-10 minutes prior to the
start of the call or should go to the Web site at least 15 minutes prior
to the call to download and install any necessary audio software.
Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PCLXVRBVP.
Pre-registrants will be issued a pin number to use when dialing into the
live call which will provide quick access to the conference by bypassing
the operator upon connection.
A telephone replay of the conference call will be available through
Tuesday, October 27, 2015, by dialing 1-888-286-8010 and entering the
passcode 84359997. The Webcast will be archived on the company’s Web
site until its next earnings release.
About Badger Meter
Badger Meter is an innovator in flow measurement and control products,
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, 2014 that include, among other things:
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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
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(AMI) systems and advanced metering analytics (AMA) systems that
offer more comprehensive solutions to customers’ metering needs;
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the success or failure of newer Company products;
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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;
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the actions (or lack thereof) of the Company’s competitors;
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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;
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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;
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unusual weather, weather patterns or other natural phenomena,
including related economic and other ancillary effects of any such
events;
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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;
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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;
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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;
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the Company’s ability to successfully integrate acquired businesses
or products;
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changes in foreign economic conditions, particularly currency
fluctuations in the United States dollar, the Euro and the Mexican
peso;
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the inability to develop technologically advanced products;
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the failure of the Company’s products to operate as intended;
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the inability to protect the Company’s proprietary rights to its
products;
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disruptions and other damages to information technology and other
networks and operations due to breaches in data security;
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transportation delays or interruptions;
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the loss of certain single-source suppliers; and
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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 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 available 24 hours a day, on-line at: http://www.badgermeter.com.
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BADGER METER, INC.
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CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
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(in thousands, except share and earnings per share data)
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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September 30,
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September 30,
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2015
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2014
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2015
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2014
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(Unaudited)
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(Unaudited)
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(Unaudited)
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(Unaudited)
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Net sales
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$99,388
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$96,271
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$281,928
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$275,429
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Cost of sales
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63,287
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59,806
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180,609
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175,182
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Gross margin
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36,101
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36,465
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101,319
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100,247
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Selling, engineering and administration
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22,477
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20,482
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68,460
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62,353
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Operating earnings
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13,624
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15,983
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32,859
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37,894
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Interest expense, net
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305
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273
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941
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875
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Earnings before income taxes
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13,319
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15,710
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31,918
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37,019
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Provision for income taxes
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4,992
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5,479
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11,463
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13,342
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Net earnings
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$8,327
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$10,231
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$20,455
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$23,677
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Earnings per share:
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Basic
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$0.58
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$0.71
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$1.42
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$1.67
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Diluted
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$0.58
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$0.71
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$1.42
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$1.66
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Shares used in computation of earnings per share:
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Basic
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14,392,517
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14,312,847
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14,373,470
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14,177,483
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Diluted
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14,456,621
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14,376,955
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14,441,165
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14,248,126
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BADGER METER, INC.
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CONSOLIDATED CONDENSED BALANCE SHEETS
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(in thousands)
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Assets
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September 30,
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December 31,
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2015
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2014
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Unaudited
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Cash
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$
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4,075
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$
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6,656
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Receivables
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59,727
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53,967
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Inventories
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75,743
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71,774
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Other current assets
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9,842
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8,708
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Total current assets
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149,387
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141,105
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Net property, plant and equipment
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86,508
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81,806
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Intangible assets, at cost less accumulated amortization
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58,508
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61,672
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Other long-term assets
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9,971
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8,853
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Goodwill
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48,443
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47,722
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Total assets
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$
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352,817
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$
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341,158
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Liabilities and Shareholders' Equity
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Short-term debt
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$
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67,380
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$
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75,927
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Payables
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18,946
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16,059
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Accrued compensation and employee benefits
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9,581
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11,901
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Other liabilities
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4,709
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3,188
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Total current liabilities
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100,616
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107,075
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Deferred income taxes
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6,566
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6,399
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Long-term employee benefits and other
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16,209
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13,353
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Shareholders' equity
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229,426
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214,331
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Total liabilities and shareholders' equity
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$
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352,817
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$
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341,158
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View source version on businesswire.com: http://www.businesswire.com/news/home/20151019006570/en/ Copyright Business Wire 2015
Source: Business Wire
(October 19, 2015 - 4:14 PM EDT)
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