In a recent announcement, Badger Meter, a leading provider of smart water solutions, revealed exceptional financial results for the first quarter of 2024. The company reported record-breaking revenue, operating profit, and earnings per share (EPS), driven by strong customer demand and operational efficiency.
Kenneth C. Bockhorst, Chairman, President, and CEO of Badger Meter, expressed satisfaction with the company's achievements and attributed the success to the combination of robust industry fundamentals and the continuous innovation of their smart water solutions. He acknowledged the dedication of Badger Meter's employees in delivering exemplary service to their customers.
Financial highlights
Utility water sales saw a significant increase of 29% year-over-year, reflecting the growing adoption of Badger Meter's smart water solutions. This includes cellular advanced metering infrastructure (AMI) offerings, such as ORION® Cellular endpoints and BEACON® Software as a Service (SaaS), as well as increased sales of water meters, including E-Series® Ultrasonic meters. Sales of water quality, pressure, and network monitoring solutions also contributed to the revenue growth.
Operating earnings surged by 46% compared to the previous year, leading to a record operating profit margin of 18.6%. Gross margin dollars increased by $14.4 million year-over-year, with a gross margin percentage of 39.3%, within the company's normalized range despite inflationary cost pressures.
Selling, engineering, and administration (SEA) expenses rose by $2.8 million compared to the prior year quarter, primarily due to growth investments including higher personnel-related costs. However, as a percentage of sales, SEA expenses improved by 300 basis points to 20.7%.
The tax rate for the quarter was 23.5%, slightly lower than the previous year, contributing to a record EPS of $0.99, representing a 50% increase from the same period last year.
Outlook
Looking ahead, Bockhorst emphasized the company's confidence in the resilience of the water industry and the appeal of their innovative offerings. The company's focus on providing customizable smart water solutions aligns with its long-term strategy and strong balance sheet, supporting continued differentiation through value-added acquisitions.
Badger Meter's commitment to sustainability was also highlighted, as evidenced by its recognition on Barron's 2024 list of 100 Most Sustainable Companies and as a 2024 USA Top Workplace.
In conclusion, Bockhorst reaffirmed Badger Meter's dedication to serving customers, executing their strategic vision, and investing in sustainable growth, underscoring their mission to safeguard the world's most precious resource.
