Badger Meter Inc (BMI) Reports Record Third Quarter 2023 Financial Results
Total sales of $186.2 million, a 26% increase compared to the prior year's $148.0 million.
Operating profit increased by 31% year-over-year, with operating profit margins expanding 80 basis points to 16.9% from 16.1%.
Diluted earnings per share (EPS) increased 44% to $0.88, up from $0.61 in the comparable prior year quarter.
Strong cash flow with $31 million in net cash provided by operations, increasing 32% over the prior year.
Badger Meter Inc (NYSE:BMI) announced its record third quarter results for the period ending September 30, 2023, on October 19, 2023. The company reported strong sales growth and robust cash flow, demonstrating the value of its differentiated smart water solution offerings and the strength of its execution.
Third Quarter Operating Results
Badger Meter's utility water sales increased by 31% year-over-year, driven by strong growth across its suite of digital smart water solutions. This includes robust adoption of cellular AMI solutions, increased meter volumes, and the addition of Syrinix. The company's sales of flow instrumentation products increased by 2% year-over-year, offsetting anticipated modest sales declines in the de-emphasized general industrial markets.
Operating earnings increased by 31% year-over-year, with operating profit margins expanding 80 basis points to 16.9% in the third quarter of 2023, up from the prior year's 16.1%. Gross margin dollars increased $15.2 million year-over-year, and gross margin as a percent of sales was 39.1%, an increase of 20 basis points over the comparable prior year quarter.
Financial Statements Summary
The company's consolidated condensed statements of operations showed net sales of $186.2 million, a significant increase from the $148.0 million reported in the same period in 2022. The net earnings for the third quarter of 2023 were $25.9 million, compared to $17.9 million in the same period in 2022.
Badger Meter's consolidated condensed balance sheets showed total assets of $689.7 million as of September 30, 2023, compared to $603.0 million as of December 31, 2022. The company's total liabilities and shareholders' equity also increased to $689.7 million from $603.0 million over the same period.
The company's consolidated condensed statements of cash flows showed net cash provided by operations of $31.4 million for the third quarter of 2023, a significant increase from the $23.7 million reported in the same period in 2022.
Outlook
Badger Meter's management expressed confidence in the company's continued growth, citing healthy market conditions and strong business momentum. The company's robust cash flow and ample cash and credit availability provide it with the financial flexibility to execute its capital allocation priorities and continued investments in growth.
Badger Meter's management believes the company is well-positioned for future growth, given its order momentum, elevated backlog, leading technologies, execution track record, positive market dynamics, and the strength of its people.
This article first appeared on GuruFocus.
