Badger Meter Inc.
( BMI) reported fourth-quarter 2012 earnings per share (EPS) of
39 cents compared with 8 cents in the year-ago quarter. However,
reported EPS fell short of the Zacks Consensus Estimate of 44
cents. The year-over-year growth was driven by robust increase in
sales and improved margins.
Total revenue surged 22% on a year-over-year basis to $74
million in the quarter, but missed the Zacks Consensus Estimate
of $76 million. The acquisition of Racine Federated as well as
increased sales of the company's municipal water products
contributed to the increase.
Costs and Margins
Cost of sales increased 10% to $45.5 million in the reported
quarter. Gross profit improved 49% to $28.8 million in the
quarter from $19.4 million in the prior-year quarter. Gross
margin expanded 690 basis points year over year to 38.8%,
reflecting the addition of higher-margin products from Racine
Federated as well as lower copper costs.
Selling, engineering and administration expenses increased 15%
to $20 million in the quarter. Operating income skyrocketed 334%
to $8.8 million from $2 million in the year-earlier quarter.
Consequently, operating margin expanded 860 basis points to 11.9%
in the quarter.
Fiscal 2012 Performance
Badger Meter reported record earnings per share of $1.95, up
54% from $1.27 reported in 2011. Revenues increased 22% to a
record $319.7 million.
As of 2012 end, cash and cash equivalents amounted to $6.5
million compared with $5 million as of 2011 end. Receivables
increased to $45.6 million as of 2012 end from $41.2 million as
of 2011 end. Inventories increased to $61 million from $49
million as of 2011 end.
During the year, Badger Meter completed the $30 million
repurchase program. The company has also hiked its quarterly
dividend by 6.25% to 17 cents per share in August.
The acquisition of Racine Federation, along with the
previously acquired Cox Flow Measurement and Remag, is expected
to boost the flow measurement business globally. The acquisitions
broadened the product range and customer base for Badger Meter
and opened the door for future expansion in the global arena.
Furthermore, Racine Federated's products carry slightly higher
margins and thus will contribute to margin expansion for Badger
Moreover, the new products introduced by the company including
ORION SE Advanced metering analytics system and the Electronic
E-Series received wide acceptance among its customers.
The company will continue to benefit from the customers
preference for the cost effective automatic meter reading (AMR)
technology as well as growing interest in advanced metering
analytics (AMA). However, the ongoing global economic weakness
along with the uncertain municipal financial capabilities may
affect the performance of Badger Meter moving forward.
Headquartered in Milwaukee, Wis., Badger Meter provides liquid
flow measurement products and control technologies serving water
and gas utilities, municipalities and industrial customers
worldwide. The company's products, which are developed both
internally and in collaboration with other technology companies,
are used in a wide variety of applications, including water, oil
and chemicals. The company retains a Zacks Rank #3 (Hold).
Badger Meter's peer,
Roper Industries Inc.
) reported fourth quarter earnings of $1.48 per share, up 20.3%
from the year-ago quarter.
) reported a loss of 13 cents per share compared with 10 cents in
the year-ago quarter.
Watts Water Technologies, Inc.
) is slated to release its fourth-quarter results on Feb 20.
BADGER METER (BMI): Free Stock Analysis
NANOMETRICS INC (NANO): Free Stock Analysis
ROPER INDS INC (ROP): Free Stock Analysis
WATTS WATER TEC (WTS): Free Stock Analysis
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