Badger Meter Reports Record Fourth Quarter and 2015 Sales
Fourth quarter operating income up 17%
Badger
Meter, Inc. (NYSE: BMI) today reported results for the fourth
quarter and year ended December 31, 2015.
Fourth Quarter 2015 Highlights
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Net sales were a record $95,770,000 for the fourth quarter of 2015, a
7.2% increase from sales of $89,339,000 for the fourth quarter of 2014.
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Operating earnings were $9,510,000 for the fourth quarter of 2015, a
16.6% increase from operating earnings of $8,153,000 for the fourth
quarter of 2014.
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Net earnings, which were affected by a higher tax rate, were
$5,483,000 for the fourth quarter of 2015, an 8.6% decrease from net
earnings of $6,001,000 for the fourth quarter of 2014.
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Diluted earnings per share were $0.38 for the fourth quarter of 2015,
a 9.5% decrease from diluted earnings per share of $0.42 for the
fourth quarter of 2014.
Full Year 2015 Highlights
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Net sales were a record $377,698,000 for 2015, a 3.5% increase from
sales of $364,768,000 for 2014.
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Net earnings were $25,938,000 for 2015, a 12.6% decrease from net
earnings of $29,678,000 for 2014.
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Diluted earnings per share were $1.80 for 2015, a 12.6% decrease from
diluted earnings per share of $2.06 for 2014.
Operations Review
“We finished 2015 with a strong fourth quarter, highlighted by record
sales and improved margins. Our strong operational execution enabled us
to achieve a 17% increase in operating income on a 7% increase in sales.
However, fourth quarter net earnings and earnings per share were reduced
by a non-cash pension settlement charge of $760,000, or $0.03 per
diluted share, as well as a higher tax rate,” said Richard A. Meeusen,
chairman, president and chief executive officer of Badger Meter.
Meeusen said the record fourth quarter sales were driven by increased
sales of both residential and commercial municipal water products,
particularly the company’s new E-Series® Ultrasonic meters
and BEACON® Advanced Metering Analytics (AMA) systems driven
by ORION® cellular technology, which more than offset lower
sales of flow instrumentation products. The gross profit margin was
36.0% for the fourth quarter of 2015, compared to 34.6% for the prior
year quarter. The increase in the tax rate was due to a reduction in
foreign earnings which are taxed at lower rates, higher average state
tax rates and a lower production tax credit in 2015.
“Our record sales for the full year also reflected increased sales of
our municipal water products. Sales of flow instrumentation products
were down for the year due to continued weakness in the oil and gas
market, and the general slow-growth economy,” said Meeusen. He noted
that the lower operating earnings, net earnings and earnings per share
for 2015 also reflected the overall higher tax rate and the pension
charge, as well as the impact of lower than anticipated sales in prior
quarters.
“Several of our newest products were strong contributors to our record
sales in both the fourth quarter and full year. Sales of our E-Series
Ultrasonic meters increased 85% year over year, while sales of ORION
Cellular endpoints grew more than six fold. In December, we introduced
our new BEACON (AMA) Mobile software that enables utilities with ORION
mobile deployments to synchronize their data within the cloud-based
BEACON AMA system. This enhancement provides all our existing ORION
mobile customers with a flexible solution that allows them to transition
their system to a BEACON AMA managed solution using ORION cellular
technology,” said Meeusen.
“Badger Meter remains financially strong. Our debt-to-total
capitalization ratio was 23.5% at year end. Cash flow continues to be
strong and we increased the quarterly cash dividend for the 23rd
consecutive year. We also invested in new products and product
enhancements that position us for future growth,” added Meeusen.
2016 Outlook
“2016 is off to a good start with a recently announced three-year
contract to supply our complete portfolio of water meters and meter
reading solutions to American Water, the nation’s largest publicly
traded water and wastewater utility company. Overall, we believe 2016
will be a strong year for Badger Meter that could be more comparable to
our results in 2014 than in 2015. We are optimistic about the growth
potential of our already successful new products and our ability to
continue to execute on our long-term growth strategies,” said Meeusen.
Conference Call and Webcast
Badger Meter management will hold a conference call to discuss the
company’s fourth quarter 2015 results on Friday, February 5, 2016, 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 1-877-294-2949 and entering the passcode 12794886.
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, February 12, 2016, by dialing 1-855-859-2056 and entering the
passcode 12794886. 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, 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 (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;
-
unusual weather, weather patterns or other natural phenomena,
including related economic and other ancillary effects of any such
events;
-
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;
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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;
-
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;
-
transportation delays or interruptions;
-
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 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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Twelve Months Ended
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December 31,
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December 31,
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December 31,
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December 31,
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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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Net sales
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$
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95,770
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$
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89,339
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$
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377,698
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$
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364,768
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Cost of sales
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61,313
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58,444
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241,922
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233,626
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Gross margin
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34,457
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30,895
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135,776
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131,142
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Selling, engineering and administration
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24,947
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22,742
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93,407
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85,095
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Operating earnings
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9,510
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8,153
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42,369
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46,047
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Interest expense, net
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276
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260
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1,217
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1,135
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Earnings before income taxes
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9,234
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7,893
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41,152
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44,912
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Provision for income taxes
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3,751
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1,892
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15,214
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15,234
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Net earnings
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$
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5,483
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$
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6,001
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$
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25,938
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$
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29,678
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Earnings per share:
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Basic
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$
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0.38
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$
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0.42
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$
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1.80
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$
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2.07
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Diluted
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$
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0.38
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$
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0.42
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$
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1.80
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$
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2.06
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Shares used in computation of earnings per share:
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Basic
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14,395,715
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14,318,479
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14,379,267
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14,306,505
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Diluted
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14,464,191
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14,393,358
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14,447,158
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14,378,329
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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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December 31,
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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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8,163
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$
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6,656
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Receivables
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56,643
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53,967
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Inventories
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75,996
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71,774
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Other current assets
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5,926
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4,538
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Total current assets
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146,728
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136,935
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Net property, plant and equipment
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90,920
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81,806
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Intangible assets, at cost less accumulated amortization
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57,348
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61,672
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Other long-term assets
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9,906
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13,023
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Goodwill
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47,978
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47,722
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Total assets
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$
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352,880
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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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71,360
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$
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75,927
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Payables
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16,555
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16,059
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Accrued compensation and employee benefits
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9,663
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11,901
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Other liabilities
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4,366
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3,188
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Total current liabilities
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101,944
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107,075
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Deferred income taxes
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774
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6,399
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Long-term employee benefits and other
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17,887
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13,353
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Shareholders' equity
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232,275
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214,331
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Total liabilities and shareholders' equity
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$
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352,880
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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/20160204006584/en/ Copyright Business Wire 2016
Source: Business Wire
(February 4, 2016 - 4:14 PM EST)
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