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Badger Meter Inc Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: October 26, 2010 10:11AM
Badger Meter Inc (BMI) filed Quarterly Report for the period ended 2010-09-30. Badger Meter Inc has a market cap of $636.9 million; its shares were traded at around $42.41 with a P/E ratio of 23.2 and P/S ratio of 2.5. The dividend yield of Badger Meter Inc stocks is 1.3%. Badger Meter Inc had an annual average earning growth of 19.3% over the past 10 years. GuruFocus rated Badger Meter Inc the business predictability rank of 3-star.BMI is in the portfolios of Bill Frels of Mairs & Power Inc. , Mario Gabelli of GAMCO Investors.
Highlight of Business Operations:
On April 1, 2010, the Company purchased Cox Instruments, LLC, of Scottsdale, Arizona, and its subsidiary Flow Dynamics, Inc. for $7.8 million. Cox Instruments and Flow Dynamics manufacture and market precision high performance flow meters that are used in demanding applications such as aerospace, custody transfer and flow measurement test stands. The Company merged the two entities into a wholly-owned subsidiary named Cox Flow Measurement, Inc. on April 1, 2010 and will treat it as a product line for management purposes. The Companys preliminary purchase price allocation at September 30, 2010 included $0.6 million of cash, plus approximately $0.7 million of accounts receivable, $1.1 million of inventory, $0.3 million of fixed assets, $4.3 million of intangibles, $2.0 million of goodwill and $1.2 million of liabilities.
As a result of the above mentioned items, earnings from continuing operations for the three months ended September 30, 2010 were $9.0 million compared to $7.0 million in the three month period ended September 30, 2009. On a diluted basis, earnings per share from continuing operations were $0.60 for the third quarter of 2010 compared to $0.47 for the same period in 2009.
As a result of the above mentioned items, earnings from continuing operations for the nine months ended September 30, 2010 were $22.4 million compared to $21.7 million in the nine month period ended September 30, 2009. On a diluted basis, earnings per share from continuing operations were $1.49 for the first nine months of 2010 compared to $1.45 for the same period in 2009.
Net property, plant and equipment at September 30, 2010 increased by $2.5 million compared to the balance at December 31, 2009 as the result of $7.0 million of capital expenditures, offset by depreciation expense. Included in the net increase was $0.7 million related to land obtained from the settlement of a legal suit and $0.3 million related to the acquisition of Cox Flow Measurement.
Other long-term assets increased to $7.4 million at September 30, 2010 from $5.8 million at December 31, 2009 due primarily to the Company investing $1.5 million to purchase a small ownership percentage in an emerging technology company. Goodwill increased to $9.0 million at September 30, 2010 from $7.0 million at December 31, 2009 due to the Cox Flow Measurement acquisition. The Company performs its annual impairment test for intangibles and goodwill in the fourth quarter. The Company did not identify any indicators of impairment to date in 2010 that would require interim valuations.
Short-term debt at September 30, 2010 increased to $13.1 million compared to the balance at December 31, 2009 of $2.6 million as the Company purchased the license agreement for the turbine technology discussed above, contributed $4.7 million to its domestic pension plan and purchased Cox Flow Measurement for $7.8 million. During the same period, current maturities of long-term debt decreased from $5.4 million to zero at September 30, 2010 due to regularly scheduled payments. The Companys debt is unsecured and does not carry any financial covenants.
Stocks Discussed: BMI,