bmi-10q_20210331.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-06706

BADGER METER, INC.

(Exact name of registrant as specified in its charter)

Wisconsin		39-0143280
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4545 W. Brown Deer Road Milwaukee, Wisconsin		53233
(Address of principal executive offices)		(Zip code)

	(414) 355-0400
	(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	BMI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

Large accelerated filer	☒	Smaller reporting company	☐
Accelerated filer	☐	Emerging growth company	☐
Non‑accelerated filer	☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 12, 2021 there were 29,175,515 shares of Common stock outstanding with a par value of $1 per share.

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BADGER METER, INC.

Quarterly Report on Form 10-Q for the Period Ended March 31, 2021

Index

		Page No.

Part I. Financial Information:

Item 1	Financial Statements (unaudited):	4

	Consolidated Condensed Balance Sheets - March 31, 2021 and December 31, 2020	4

	Consolidated Condensed Statements of Operations - Three Months Ended March 31, 2021 and 2020	5

	Consolidated Condensed Statements of Comprehensive Income - Three Months Ended March 31, 2021 and 2020	6

	Consolidated Condensed Statements of Cash Flows - Three Months Ended March 31, 2021 and 2020	7

	Consolidated Condensed Statements of Shareholders’ Equity – Three Months Ended March 31, 2021 and 2020	8

	Notes to Unaudited Consolidated Condensed Financial Statements	9

Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3	Quantitative and Qualitative Disclosures about Market Risk	20

Item 4	Controls and Procedures	20

Part II. Other Information:

Item 1A	Risk Factors	21

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	21

Item 6	Exhibits	21

Signatures		22

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Special Note Regarding Forward Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q, as well as other information provided from time to time by Badger Meter, Inc. (the “Company” or “Badger Meter”) 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 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. Potential factors that could affect such forward-looking statements include the duration, severity and geographic spread of the COVID-19 pandemic, the company’s ability to develop and manufacture technologically advanced products that are accepted by the market, supply chain risk, legal and regulatory risks, political and general economic risks, risks related to doing business in several countries, including foreign currency risk, competition for skilled employees, material and labor cost increases, competitive pricing and operating efficiencies, the effects of climate change, cybersecurity attacks and disruptions to our information technology and the successful integration of acquisitions. See Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 for further information regarding risk factors, which are incorporated herein by reference. The Company disclaims any obligation to publicly update or revise any forward-looking statements as a result of new information, future events or any other reason.

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Part I – Financial Information

Item 1 Financial Statements

BADGER METER, INC.

Consolidated Condensed Balance Sheets

	March 31,			December 31,
	(Unaudited)
	(In thousands)
	2021			2020
Assets
Current assets:
Cash and cash equivalents	$	51,402		$	72,273
Receivables		61,642			61,689
Inventories:
Finished goods		27,967			24,881
Work in process		14,094			16,841
Raw materials		42,190			39,864
Total inventories		84,251			81,586
Prepaid expenses and other current assets		6,817			5,303
Total current assets		204,112			220,851
Property, plant and equipment, at cost		217,193			217,404
Less accumulated depreciation		(135,109	)		(134,699	)
Net property, plant and equipment		82,084			82,705
Intangible assets, at cost less accumulated amortization		72,119			53,598
Other assets		18,063			17,428
Deferred income taxes		5,081			5,090
Goodwill		104,836			88,708
Total assets	$	486,295		$	468,380
Liabilities and shareholders’ equity
Current liabilities:
Payables	$	40,014		$	34,923
Accrued compensation and employee benefits		11,505			14,617
Warranty and after-sale costs		12,458			11,617
Other current liabilities		7,789			4,042
Total current liabilities		71,766			65,199
Other long-term liabilities		26,324			25,283
Deferred income taxes		6,057			5,696
Accrued non-pension postretirement benefits		5,786			5,789
Other accrued employee benefits		6,513			5,154
Commitments and contingencies (Note 5)
Shareholders’ equity:
Common stock		37,221			37,221
Capital in excess of par value		45,599			44,964
Reinvested earnings		323,383			314,850
Accumulated other comprehensive income		602			1,313
Less: Treasury stock, at cost		(36,956	)		(37,089	)
Total shareholders’ equity		369,849			361,259
Total liabilities and shareholders’ equity	$	486,295		$	468,380

See accompanying notes to unaudited consolidated condensed financial statements.

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BADGER METER, INC.

Consolidated Condensed Statements of Operations

	Three Months Ended March 31,
	(Unaudited)
	(In thousands except share and per share amounts)
	2021		2020
Net sales	$	117,842	$	108,508
Cost of sales		68,480		65,186
Gross margin		49,362		43,322
Selling, engineering and administration		31,615		27,307
Operating earnings		17,747		16,015
Interest expense, net		7		31
Other pension and postretirement costs		31		44
Earnings before income taxes		17,709		15,940
Provision for income taxes		3,928		4,086
Net earnings	$	13,781	$	11,854

Earnings per share:
Basic	$	0.47	$	0.41
Diluted	$	0.47	$	0.41

Dividends declared per common share	$	0.18	$	0.17

Shares used in computation of earnings per share:
Basic		29,098,490		29,042,158
Impact of dilutive securities		218,098		181,757
Diluted		29,316,588		29,223,915

See accompanying notes to unaudited consolidated condensed financial statements.

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BADGER METER, INC.

Consolidated Condensed Statements of Comprehensive Income

	Three Months Ended March 31,
	(Unaudited)
	(In thousands)
	2021			2020
Net earnings	$	13,781		$	11,854
Other comprehensive (loss) income:
Foreign currency translation adjustments		(714	)		(627	)
Pension and postretirement benefits, net of tax		3			1
Comprehensive income	$	13,070		$	11,228

See accompanying notes to unaudited consolidated condensed financial statements.

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BADGER METER, INC.

Consolidated Condensed Statements of Cash Flows

	Three Months Ended March 31,
	(Unaudited) (In thousands)
	2021	2020
Operating activities:

SEC Form 10-Q filed by Badger Meter, Inc.