BMI Badger Meter Inc

Badger Meter, Inc. (NYSE: BMI) today reported results for the fourth quarter and full year ended December 31, 2023.

Fourth Quarter 2023 Highlights

• Total sales of $182.4 million, 24% higher than the prior year’s $147.3 million.
• Operating profit increased 43% year-over-year, with operating profit margins expanding 230 basis points to 17.6% from 15.3%.
• Diluted earnings per share (EPS) increased 40% to $0.84, up from $0.60 in the comparable prior year quarter.
• Record cash flow with $37.9 million in net cash provided by operations, increasing 28% over the prior year.

Full Year 2023 Highlights

• Record total sales of $703.6 million, 24% higher than the prior year’s $565.6 million.
• Software sales exceeded $42 million, increasing 27% year-over-year.
• Operating profit margins improved 140 basis points over the prior year to 16.8%.
• Diluted EPS increased 39% to a record $3.14, up from $2.26 in the prior year.
• Record cash flow with $110.1 million in net cash provided by operations.

Kenneth C. Bockhorst, Chairman, President and Chief Executive Officer, stated, “Our strong fourth quarter results capped off a stellar 2023 with continuing robust demand and operational execution. We delivered 24% sales growth in the fourth quarter with record operating profit margins of 17.6% and record cash flow. Shortly after year-end, we completed the tuck-in acquisition of select remote water monitoring assets, expanding the breadth of our smart water offerings in line with our strategic objectives. I want to thank the Badger Meter team for delivering another year of exceptional performance driven by their unrelenting commitment to our customers.”

Fourth Quarter Operating Results

Utility water sales increased 28% year-over-year with strong growth across the broad suite of digital smart water solutions. This includes robust adoption rates for our cellular AMI offering, including higher ORION® Cellular endpoint and BEACON® Software as a Service (SaaS) revenues, as well as increased E-Series® Ultrasonic meters sales. Higher water quality and pressure monitoring sales also contributed to the year-over-year sales increase.

Sales of flow instrumentation products were up slightly year-over-year, the result of steady order demand across the water-focused end markets including wastewater and HVAC, which offset anticipated modest sales declines in the de-emphasized general industrial markets.

Operating earnings increased an exceptional 43% year-over-year, with operating profit margins expanding 230 basis points to a record 17.6% in the fourth quarter of 2023, up from the prior year’s 15.3%. Gross margin dollars increased $14.5 million year-over-year, and gross margin as a percent of sales was 39.2%, an increase of 50 basis points over the comparable prior year quarter. Gross margins continue to benefit from higher volumes and structural positive sales mix trends.

Selling, engineering and administrative (SEA) expenses in the fourth quarter of 2023 were $39.4 million, with SEA as a percent of sales improving 180 basis points to 21.6% versus 23.4% in the comparable prior year quarter. The $4.9 million year-over-year increase in SEA spend included higher personnel-related costs such as headcount, salaries, and management incentives as well as the addition of Syrinix, including the associated intangible asset amortization.

The tax rate for the fourth quarter of 2023 was 26.1% compared to 23.4% in the prior year comparable quarter. EPS was a record $0.84, up 40% compared to $0.60 in the comparable prior year period.

Full Year Recap and Outlook

Bockhorst continued, “In 2023, Badger Meter continued to build on our track record of differentiated performance, delivering 24% year-over-year sales growth, record operating profit margins and a 39% increase in EPS. Our strategic actions, including continued investments in hardware and software innovation, incremental manufacturing capacity and tuck-in acquisitions have enabled us to further capitalize on the robust demand for our comprehensive and tailorable digital water management offerings. These customized solutions deliver efficiency, resiliency, and sustainability for customers to address the variety of persistent challenges facing the water industry.

“For 2024 and beyond, we remain committed to the formula that has driven our success - focusing on our customers, offering innovative and differentiated technologies, and driving operational excellence. This proven blueprint, coupled with our resilient order pace, robust bid funnel and backlog, give us confidence in our ability to grow sales and earnings year-over-year.”

Bockhorst concluded, “We believe we are well-positioned with the right strategies, ample capital and an exceptional team to continue to drive strong shareholder returns while protecting 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 2023 results today, Friday January 26, 2024 at 10:00 AM Central/11:00 AM Eastern time. The webcast and related presentation can be accessed via the Investor section of the Company’s website. Individuals wishing to participate in the call should use this online registration link: https://www.netroadshow.com/events/login?show=aac253b1&confId=59366

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,

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

 

  Net sales

$

182,440

 

$

147,324

 

$

703,592

 

$

565,568

 

  Cost of sales

 

110,975

 

 

90,359

 

 

427,154

 

 

345,598

 

  Gross margin

 

71,465

 

 

56,965

 

 

276,438

 

 

219,970

 

  Selling, engineering and administration

 

39,386

 

 

34,491

 

 

158,389

 

 

132,675

 

  Operating earnings

 

32,079

 

 

22,474

 

 

118,049

 

 

87,295

 

  Interest income, net

 

(1,398

)

 

(465

)

 

(4,047

)

 

(552

)

Other pension and postretirement costs

 

33

 

 

33

 

 

130

 

 

130

 

  Earnings before income taxes

 

33,444

 

 

22,906

 

 

121,966

 

 

87,717

 

  Provision for income taxes

 

8,723

 

 

5,367

 

 

29,368

 

 

21,221

 

  Net earnings

$

24,721

 

$

17,539

 

$

92,598

 

$

66,496

 

  Earnings per share:   Basic

$

0.84

 

$

0.60

 

$

3.16

 

$

2.28

 

  Diluted

$

0.84

 

$

0.60

 

$

3.14

 

$

2.26

 

  Shares used in computation of earnings per share:   Basic

 

29,305,864

 

 

29,230,963

 

 

29,284,396

 

 

29,218,486

 

  Diluted

 

29,471,418

 

 

29,406,499

 

 

29,455,557

 

 

29,376,077

 

BADGER METER, INC.   CONSOLIDATED CONDENSED BALANCE SHEETS (in thousands)    

Assets

December 31,

 

December 31,

 

2023

 

 

2022

(Unaudited)   Cash and cash equivalents

$

191,782

$

138,052

Receivables

 

83,507

 

76,651

Inventories

 

153,674

 

119,856

Other current assets

 

13,214

 

13,273

Total current assets

 

442,177

 

347,832

  Net property, plant and equipment

 

73,878

 

73,542

Intangible assets, at cost less accumulated amortization

 

53,737

 

53,607

Other long-term assets

 

33,964

 

26,805

Goodwill

 

113,163

 

101,261

Total assets

$

716,919

$

603,047

   

Liabilities and Shareholders' Equity

  Payables

$

81,807

$

71,440

Accrued compensation and employee benefits

 

29,871

 

20,513

Other current liabilities

 

20,270

 

18,359

Total current liabilities

 

131,948

 

110,312

  Deferred income taxes

 

5,061

 

4,648

Long-term employee benefits and other

 

63,428

 

45,665

Shareholders' equity

 

516,482

 

442,422

Total liabilities and shareholders' equity

$

716,919

$

603,047

BADGER METER, INC.   CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (in thousands)    

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

 

Operating activities: Net earnings

$

24,721

 

$

17,539

 

$

92,598

 

$

66,496

 

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

 

2,837

 

 

2,677

 

 

10,937

 

 

11,090

 

Amortization

 

4,353

 

 

3,403

 

 

17,173

 

 

15,151

 

Deferred income taxes

 

(9,249

)

 

(5,643

)

 

(9,650

)

 

(5,619

)

Noncurrent employee benefits

 

(64

)

 

(510

)

 

(338

)

 

(648

)

Stock-based compensation expense

 

1,225

 

 

978

 

 

5,188

 

 

3,148

 

Changes in: Receivables

 

5,504

 

 

7,532

 

 

(6,351

)

 

(11,328

)

Inventories

 

(4,839

)

 

(4,814

)

 

(32,467

)

 

(21,021

)

Payables

 

(3,776

)

 

4,137

 

 

8,506

 

 

28,007

 

Prepaid expenses and other assets

 

267

 

 

(1,152

)

 

(7,012

)

 

(10,557

)

Other liabilities

 

16,966

 

 

5,561

 

 

31,533

 

 

7,732

 

Total adjustments

 

13,224

 

 

12,169

 

 

17,519

 

 

15,955

 

Net cash provided by operations

 

37,945

 

 

29,708

 

 

110,117

 

 

82,451

 

  Investing activities: Property, plant and equipment expenditures

 

(2,054

)

 

(1,201

)

 

(12,003

)

 

(5,891

)

Acquisitions, net of cash acquired

 

-

 

 

-

 

 

(17,127

)

 

-

 

Net cash used for investing activities

 

(2,054

)

 

(1,201

)

 

(29,130

)

 

(5,891

)

  Financing activities: Dividends paid

 

(7,918

)

 

(6,589

)

 

(29,052

)

 

(24,881

)

Proceeds from exercise of stock options

 

-

 

 

642

 

 

967

 

 

703

 

Repurchase of treasury stock

 

-

 

 

-

 

 

-

 

 

(427

)

Net cash used for financing activities

 

(7,918

)

 

(5,947

)

 

(28,085

)

 

(24,605

)

Effect of foreign exchange rates on cash

 

899

 

 

705

 

 

828

 

 

(1,077

)

  Increase in cash and cash equivalents

 

28,872

 

 

23,265

 

 

53,730

 

 

50,878

 

Cash and cash equivalents - beginning of period

 

162,910

 

 

114,787

 

 

138,052

 

 

87,174

 

  Cash and cash equivalents - end of period

$

191,782

 

$

138,052

 

$

191,782

 

$

138,052

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240126718507/en/

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