0001157523-19-001538.txt : 20190718 0001157523-19-001538.hdr.sgml : 20190718 20190718083530 ACCESSION NUMBER: 0001157523-19-001538 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20190718 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20190718 DATE AS OF CHANGE: 20190718 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BADGER METER INC CENTRAL INDEX KEY: 0000009092 STANDARD INDUSTRIAL CLASSIFICATION: TOTALIZING FLUID METERS & COUNTING DEVICES [3824] IRS NUMBER: 390143280 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06706 FILM NUMBER: 19960512 BUSINESS ADDRESS: STREET 1: 4545 WEST BROWN DEER ROAD CITY: MILWAUKEE STATE: WI ZIP: 53223 BUSINESS PHONE: 4143715702 MAIL ADDRESS: STREET 1: 4545 W BROWN DEER RD CITY: MILWAUKEE STATE: WI ZIP: 53223 FORMER COMPANY: FORMER CONFORMED NAME: BADGER METER MANUFACTURING CO DATE OF NAME CHANGE: 19710729 8-K 1 a52014913.htm BADGER METER, INC. 8-K
 
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)
July 18, 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 July 18, 2019, Badger Meter, Inc. (the “Company”) issued a press release announcing its quarterly financial results for the 2019 second quarter ended June 30, 2019.
 
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
Date: July 18, 2019
By:
/s/ Robert A. Wrocklage
 
 
 
Robert A. Wrocklage
 
 
 
Vice President – Chief Financial Officer
 
 
 
 
 
 
 EX-99.1 2 a52014913ex99_1.htm EXHIBIT 99.1
Exhibit 99.1

Badger Meter Reports Second Quarter 2019 Results

MILWAUKEE--(BUSINESS WIRE)--July 18, 2019--Badger Meter, Inc. (NYSE: BMI) today reported results for the second quarter ended June 30, 2019.

Second Quarter 2019 Highlights

  • Net sales for the second quarter of 2019 were $103.5 million, compared to $113.6 million in the comparable prior year quarter.
  • Gross profit margins improved 240 basis points year-over-year to 38.9%.
  • GAAP net earnings and diluted earnings per share (EPS) were $11.4 million and $0.39, respectively, compared to $6.2 million and $0.21 in the comparable prior year period.
  • Excluding the $8.2 million pre-tax, or $6.1 million and $0.21 per share after-tax pension termination settlement charge in the prior year comparable quarter, adjusted EPS was $0.39 compared to $0.42 for the second quarter of 2018.
  • $23.1 million of cash provided by operations representing strong earnings conversion.

Second Quarter Operating Results

“As a technology leader, we have encountered innovation-driven order postponements during new product launch windows. We believe we experienced that impact during the second quarter as customers, eager to adopt our new leading-edge solutions, are actively pilot testing products prior to system-wide deployment or are awaiting new product releases. While this phenomenon creates sales unevenness in the short-term, we believe being at the forefront of new technologies benefits us and our prudent customers given the long term horizon over which their decisions are based,” said Kenneth C. Bockhorst, President and Chief Executive Officer of Badger Meter.

Municipal water sales declined 9.6% from the comparable prior year quarter as customers deferred orders to obtain the latest version of advanced technology products. This is most evident with ORION® Cellular LTE-M endpoints where customer pilots and testing continue without issue. In addition, the company further advanced its quality-focused launch process for the new three- and four-inch commercial E-Series® Ultrasonic meters expected to begin shipping later this year. Finally, prior year municipal water sales included a large Middle East order, which did not repeat. Sales of flow instrumentation products were 6.6% lower year-over-year with declines across most industrial end markets.

Operating margins increased 10 basis points to 14.5% in the second quarter of 2019 from 14.4% in the comparable prior year quarter. Gross profit margins were strong at 38.9%, a 240 basis point increase over the prior year’s 36.5% despite the lower sales volume. Gross profit benefited from positive product and regional sales mix, as well as favorable price/cost dynamics.

Selling, engineering and administration (“SEA”) expenses in the second quarter of 2019 of $25.2 million were flat with the prior year, however given the lower sales volume, SEA as a percent of sales was elevated. The tax rate of 23.8% was in line with the prior year’s adjusted 23.6%.

Cash from operations of $23.1 million increased 25.3% or $4.7 million year-over-year, primarily associated with improved working capital management.

Bockhorst continued, “I am encouraged by the market interest and pilot testing of our leading technologies, which continues at a robust pace. Our gross profit margins improved year-over-year for the fourth consecutive quarter. Our working capital management helped generate robust cash from operations and our continuous improvement focus on metrics including SQDC (safety, quality, delivery and cost) is evident across the organization. I want to express my appreciation to the dedicated team of Badger Meter professionals for their focus on customer quality and continuous improvement.”

Outlook

“Our backlog and new opportunity funnel remain solid, underscored by a high level of interest in our innovative smart water solutions. This includes both the larger size E-Series Ultrasonic meters and ORION Cellular LTE-M radios, which significantly improve performance and functionality. Further, I remain positive on municipal spending trends and our competitive share and positioning. Our customers are making 15 to 20 year investment decisions for their water management solutions and as such, product quality, features and breadth remain of utmost importance.” Bockhorst concluded, “Our smart water solution offerings and strong balance sheet give us confidence in our long term growth outlook as we help to preserve the world’s most precious resource.”

Conference Call and Webcast Information

Badger Meter management will hold a conference call to discuss the company’s second quarter 2019 results today, Thursday July 18, 2019 at 10:00 AM CT / 11:00 AM ET. The call and related presentation can be accessed via webcast through the Investor section of our website or by dialing 1-877-823-9761 (US) or 1-647-689-5327 (Intl) and entering the passcode 1988338. 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 (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 SEC 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 badgermeter.com.












 
BADGER METER, INC.











 
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and earnings per share data)











 











 





Three Months Ended
Six Months Ended





June 30,
June 30,
June 30,
June 30,





2019

 

2018

 

2019

 

2018






(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)











 
Net sales


$

103,542


$

113,648


$

208,423


$

218,689












 
Cost of sales


 

63,266


 

72,144


 

127,690


 

140,437












 
Gross margin


 

40,276


 

41,504


 

80,733


 

78,252












 
Selling, engineering and administration

 

25,243


 

25,153


 

51,373


 

51,927












 
Operating earnings

 

15,033


 

16,351


 

29,360


 

26,325












 
Interest expense, net

 

85


 

409


 

214


 

699

Other pension and postretirement costs

 

35


 

8,031


 

82


 

8,012












 
Earnings before income taxes

 

14,913


 

7,911


 

29,064


 

17,614












 
Provision for income taxes

 

3,555


 

1,757


 

6,882


 

3,914












 
Net earnings


$

11,358


$

6,154


$

22,182


$

13,700












 
Earnings per share:



















 

Basic

$

0.39


$

0.21


$

0.76


$

0.47












 

Diluted

$

0.39


$

0.21


$

0.76


$

0.47












 
Shares used in computation of earnings per share:

















 

Basic

 

29,027,887


 

28,963,373


 

29,024,543


 

28,965,735












 

Diluted

 

29,211,533


 

29,133,443


 

29,224,552


 

29,159,400












 









 

 
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
  Six Months Ended





June 30,
June 30,
  June 30,
June 30,





2019


2018


 

2019


2018






(Unaudited)
(Unaudited)
  (Unaudited)
(Unaudited)









 

 
Net earnings (GAAP measure)

$

11,358


$

6,154


 

$

22,182


$

13,700










 

 
Pension termination settlement charge, net of tax

 

-


 

6,134


 

 

-


 

6,134










 

 
Adjusted net earnings

$

11,358


$

12,288


 

$

22,182


$

19,834










 

 
Diluted earnings per share (GAAP measure)

$

0.39


$

0.21


 

$

0.76


$

0.47










 

 
Pension termination settlement charge, net of tax

 

-


 

0.21


 

 

-


 

0.21










 

 
Adjusted diluted earnings per share

$

0.39


$

0.42


 

$

0.76


$

0.68










 

 








 
BADGER METER, INC.








 
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)








 








 




Assets
June 30,
December 31,






2019


2018







(Unaudited)









 
Cash




$

23,894


$

13,086

Receivables



 

60,294


 

66,300

Inventories



 

83,319


 

80,804

Other current assets


 

8,037


 

4,469

Total current assets


 

175,544


 

164,659









 
Net property, plant and equipment

 

88,512


 

90,321

Intangible assets, at cost less accumulated amortization




 

51,717


 

55,418

Other long-term assets


 

17,830


 

11,035

Goodwill



 

71,258


 

71,258

Total assets



$

404,861


$

392,691









 








 



Liabilities and Shareholders' Equity










 
Short-term debt



$

4,560


$

18,060

Payables



 

29,556


 

22,469

Accrued compensation and employee benefits

 

12,256


 

13,768

Other current liabilities


 

7,935


 

5,718

Total current liabilities


 

54,307


 

60,015









 
Deferred income taxes


 

3,233


 

3,332

Long-term employee benefits and other

 

30,869


 

25,841

Shareholders' equity


 

316,452


 

303,503

Total liabilities and shareholders' equity

$

404,861


$

392,691













 
BADGER METER, INC.












 
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)












 












 





Three Months Ended
Six Months Ended





June 30,
June 30,
June 30,
June 30,





2019


2018


2019


2018







(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Operating activities:











Net earnings



$

11,358

 


$

6,154

 


$

22,182

 


$

13,700

 














 

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
















 

Depreciation





 

3,085

 


 

2,719

 


 

6,063

 


 

5,894

 


Amortization





 

3,033

 


 

3,006

 


 

6,297

 


 

6,543

 


Deferred income taxes





 

(14

)


 

58

 


 

(15

)


 

59

 


Noncurrent employee benefits





 

(384

)


 

(10

)


 

(267

)


 

84

 


Pension termination settlement charges





 

-

 


 

8,168

 


 

-

 


 

8,168

 


Contribution to pension plan





 

-

 


 

(1,600

)


 

-

 


 

(1,600

)


Stock-based compensation expense





 

289

 


 

473

 


 

554

 


 

944

 


Changes in:













Receivables





 

7,971

 


 

(1,846

)


 

6,028

 


 

(6,765

)


Inventories




 

(2,731

)


 

(98

)


 

(2,565

)


 

167

 


Payables




 

4,601

 


 

3,224

 


 

9,141

 


 

(1,255

)


Prepaid expenses and other assets

 

(1,845

)


 

(1,515

)


 

(3,946

)


 

(3,101

)


Other liabilities



 

(2,275

)


 

(309

)


 

(2,569

)


 

2,361

 


Total adjustments

 

11,730

 


 

12,270

 


 

18,721

 


 

11,499

 


Net cash provided by operations

 

23,088

 


 

18,424

 


 

40,903

 


 

25,199

 














 
Investing activities:









Property, plant and equipment expenditures

 

(2,306

)


 

(2,199

)


 

(4,466

)


 

(5,242

)


Acquisitions, net of cash acquired and future payments

 

-

 


 

(8,048

)


 

-

 


 

(8,048

)


Net cash used for investing activities

 

(2,306

)


 

(10,247

)


 

(4,466

)


 

(13,290

)














 
Financing activities:









Net decrease short-term debt

 

(6,500

)


 

(5,500

)


 

(13,500

)


 

(2,000

)


Payment of contingent acquisition consideration

 

(650

)


 

-

 


 

(1,650

)


 

-

 


Dividends paid


 

(4,360

)


 

(3,772

)


 

(8,717

)


 

(7,542

)


Proceeds from exercise of stock options

 

277

 


 

-

 


 

748

 


 

231

 


Repurchase of treasury stock

 

(964

)


 

(370

)


 

(2,837

)


 

(1,989

)


Issuance of treasury stock

 

45

 


 

366

 


 

97

 


 

431

 


Net cash used for financing activities

 

(12,152

)


 

(9,276

)


 

(25,859

)


 

(10,869

)


Effect of foreign exchange rates on cash

 

231

 


 

(308

)


 

230

 


 

(79

)














 
Increase (decrease) in cash

 

8,861

 


 

(1,407

)


 

10,808

 


 

961

 


Cash - beginning of period

 

15,033

 


 

13,532

 


 

13,086

 


 

11,164

 














 
Cash - end of period

$

23,894

 


$

12,125

 


$

23,894

 


$

12,125

 














 

 

Contacts

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