UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
_______________________
Date of Report |
|
(Date of earliest event reported): |
February 5, 2019 |
Badger
Meter, Inc.
(Exact
name of registrant as specified in its charter)
Wisconsin |
1-6706 |
39-0143280 |
(State or other
jurisdiction of incorporation) |
(Commission File
Number) |
(IRS Employer
Identification No.) |
4545 W. Brown Deer Rd., Milwaukee, Wisconsin 53223
(Address
of principal executive offices, including zip code)
(414) 355-0400
(Registrant’s
telephone number, including area code)
Not Applicable
(Former
name or former address, if changed since last report)
_______________________
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 |
Results of Operations and Financial Condition. |
On February 5, 2019, Badger Meter, Inc. (the “Company”) issued a press release announcing its quarterly financial results for the 2018 fourth quarter ended December 31, 2018.
A copy of the press release issued by the Company announcing the
foregoing is furnished herewith as Exhibit 99.1.
Item 9.01 |
Financial Statements and Exhibits. |
(a) | Not applicable. | |
(b) | Not applicable. | |
(c) | Not applicable. | |
(d) |
Exhibits. The exhibit furnished herewith is as listed in the accompanying Exhibit Index. |
EXHIBIT INDEX
Exhibit No. | Description | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BADGER METER, INC. |
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|
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Date: | February 5, 2019 | By: |
/s/ Robert A. Wrocklage |
Robert A. Wrocklage |
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Vice President – Finance, Chief Financial Officer |
Exhibit 99.1
Badger Meter Reports Fourth Quarter and Full Year 2018 Results
MILWAUKEE--(BUSINESS WIRE)--February 5, 2019--Badger Meter, Inc. (NYSE: BMI) today reported results for the fourth quarter and full year ended December 31, 2018.
Fourth Quarter 2018 Highlights
Full Year 2018 Highlights
Fourth Quarter Operating Results
“We finished the year with outstanding results, delivering another strong quarter of sales and EPS growth. The positive momentum we have seen during the past several quarters continued into the fourth quarter, with high single-digit sales growth across our product lines in the municipal and flow instrumentation end-markets coupled with favorable sales mix and good spending leverage,” said Kenneth C. Bockhorst, President and Chief Executive Officer of Badger Meter.
Water utility sales grew 8% with increased commercial and residential activity, bolstered by accelerating acceptance of industry leading E-Series® Ultrasonic water meters and ORION® Cellular endpoints. Sales of flow instrumentation products increased 9% with further channel penetration in key target markets, such as water and wastewater and oil and gas.
Adjusted operating earnings, excluding executive retirement charges, was $15.3 million or 14.6% of sales, which improved 20 basis points year-over-year from 14.4% in the prior year’s fourth quarter. Gross profit margins were strong at 38.5%, although they moderated from the prior year’s robust level. Gross profit benefited from the higher sales volumes and positive price/cost dynamics. While the overall favorable trends in water utility sales mix continued, the prior year’s fourth quarter mix created a difficult comparison.
Adjusted selling, engineering and administration (“SEA”) expenses in the fourth quarter of 2018 were slightly lower than the prior year, and as a percent of sales, SEA leverage improved to 23.8% of sales from 26.0% in the prior year comparable quarter.
The fourth quarter included a $0.5 million ($0.4 million, or $0.01 per share after-tax) non-cash charge for the immediate vesting of equity awards in conjunction with the previously announced upcoming executive retirements.
Bockhorst continued, “Overall, I am extremely pleased with our results and execution which positions us well to continue to be able to capitalize on the favorable market momentum and our leading technology offerings. The entire Badger Meter team is doing a great job executing our customer-focused strategy and I want to thank them for their efforts.”
Outlook
“We see the favorable demand environment continuing as we begin 2019,” stated Bockhorst. “While market demand and our results can be uneven quarter-to-quarter, our backlog is solid and we anticipate ongoing positive customer reception of our proven, innovative technologies. For example, the timeline for introduction of our D-Flow ultrasonic technology into our E-Series® meters remains on track, which provides additional features for our customers while also improving our cost position. In addition, we have begun shipping our new ORION® Cellular radios with LTE-M technology, which puts us ahead of the curve for a seamless transition to 5G networks, while still providing the same level of support for previous generations.”
Bockhorst concluded, “With the leadership transitions announced and in place, we are focused on 2019 and beyond. Our top priority is to preserve the strong legacy of customer focus and innovation that has been the hallmark of Badger Meter for over a century. We will build on our culture of continuous improvement while investing both organically and via acquisition in superior products and services geared at preserving 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 2018 results today, Tuesday February 5, 2019 at 10:00 AM Central/11:00 AM Eastern time. The call can be accessed via webcast through the “Investor Relations” section of our website or by dialing 1-866-393-4306 (US) or 1-734-385-2616 (International) and entering the passcode 8397909. A replay of the conference call will be available through February 28, 2019 by dialing 1-855-859-2056 and entering the passcode 8397909. 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 also 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 Form 10-K filed with the Securities and Exchange Commission for further information regarding risk factors. 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
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.
BADGER METER, INC. | |||||||||||||||||
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | |||||||||||||||||
(in thousands, except share and earnings per share data) | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||
December 31, | December 31, | December 31, | December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) |
|
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Net sales | $ | 104,413 | $ | 96,650 | $ | 433,732 | $ | 402,440 | |||||||||
Cost of sales | 64,262 | 57,647 | 271,383 | 246,694 | |||||||||||||
Gross margin | 40,151 | 39,003 | 162,349 | 155,746 | |||||||||||||
Selling, engineering and administration | 25,341 | 25,128 | 105,480 | 99,151 | |||||||||||||
Operating earnings | 14,810 | 13,875 | 56,869 | 56,595 | |||||||||||||
Interest expense, net | 163 | 222 | 1,157 | 789 | |||||||||||||
Other pension and postretirement costs | 61 | 724 | 19,860 | 973 | |||||||||||||
Earnings before income taxes | 14,586 | 12,929 | 35,852 | 54,833 | |||||||||||||
Provision for income taxes | 3,347 | 5,696 | 8,062 | 20,262 | |||||||||||||
Net earnings | $ | 11,239 | $ | 7,233 | $ | 27,790 | $ | 34,571 | |||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 0.39 | $ | 0.25 | $ | 0.96 | $ | 1.20 | |||||||||
Diluted | $ | 0.39 | $ | 0.25 | $ | 0.95 | $ | 1.19 | |||||||||
Shares used in computation of earnings per share: | |||||||||||||||||
Basic | 28,989,523 | 28,927,513 | 28,993,074 | 28,927,487 | |||||||||||||
Diluted | 29,178,969 | 29,142,324 | 29,189,257 | 29,111,291 | |||||||||||||
BADGER METER, INC. | |||||||||||||||||
RECONCILIATION OF NON-GAAP PERFORMANCE MEASURES TO GAAP PERFORMANCE MEASURES | |||||||||||||||||
(in thousands, except share and earnings per share data) | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||
December 31, | December 31, | December 31, | December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) |
|
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Selling, engineering and administration (GAAP measure) | $ | 25,341 | $ | 25,128 | $ | 105,480 | $ | 99,151 | |||||||||
Executive retirement charges | 477 | - | 2,575 | - | |||||||||||||
Adjusted selling, engineering and administration | $ | 24,864 | $ | 25,128 | $ | 102,905 | $ | 99,151 | |||||||||
Operating earnings (GAAP measure) | $ | 14,810 | $ | 13,875 | $ | 56,869 | $ | 56,595 | |||||||||
Executive retirement charges | 477 | - | 2,575 | - | |||||||||||||
Adjusted operating earnings | $ | 15,287 | $ | 13,875 | $ | 59,444 | $ | 56,595 | |||||||||
Net earnings (GAAP measure) | $ | 11,239 | $ | 7,233 | $ | 27,790 | $ | 34,571 | |||||||||
Executive retirement charges, net of tax | 359 | - | 2,357 | - | |||||||||||||
Pension termination settlement charge, net of tax | - | - | 14,786 | - | |||||||||||||
Adjusted net earnings | $ | 11,598 | $ | 7,233 | $ | 44,933 | $ | 34,571 | |||||||||
Diluted earnings per share (GAAP measure) | $ | 0.39 | $ | 0.25 | $ | 0.95 | $ | 1.19 | |||||||||
Executive retirement charges, net of tax | 0.01 | - | 0.09 | - | |||||||||||||
Pension termination settlement charge, net of tax | - | - | 0.50 | - | |||||||||||||
Adjusted diluted earnings per share | $ | 0.40 | $ | 0.25 | $ | 1.54 | $ | 1.19 | |||||||||
BADGER METER, INC. | ||||||||||
CONSOLIDATED CONDENSED BALANCE SHEETS | ||||||||||
(in thousands) | ||||||||||
Assets |
December 31, | December 31, | ||||||||
2018 | 2017 | |||||||||
(Unaudited) | ||||||||||
Cash | $ | 13,086 | $ | 11,164 | ||||||
Receivables | 66,300 | 58,210 | ||||||||
Inventories | 80,804 | 85,172 | ||||||||
Other current assets | 4,469 | 4,077 | ||||||||
Total current assets | 164,659 | 158,623 | ||||||||
Net property, plant and equipment | 90,321 | 93,601 | ||||||||
Intangible assets, at cost less accumulated amortization | 55,418 | 59,326 | ||||||||
Other long-term assets | 11,035 | 12,753 | ||||||||
Goodwill | 71,258 | 67,424 | ||||||||
Total assets | $ | 392,691 | $ | 391,727 | ||||||
Liabilities and Shareholders' Equity |
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Short-term debt | $ | 18,060 | $ | 44,550 | ||||||
Payables | 22,469 | 28,601 | ||||||||
Accrued compensation and employee benefits | 13,768 | 15,509 | ||||||||
Other liabilities | 5,718 | 4,449 | ||||||||
Total current liabilities | 60,015 | 93,109 | ||||||||
Deferred income taxes | 3,332 | 3,434 | ||||||||
Long-term employee benefits and other | 25,841 | 17,732 | ||||||||
Shareholders' equity | 303,503 | 277,452 | ||||||||
Total liabilities and shareholders' equity | $ | 392,691 | $ | 391,727 | ||||||
CONTACT:
Karen Bauer at (414) 371-7276 kbauer@badgermeter.com