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Badger Meter Inc Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: October 26, 2011 03:09PM

Badger Meter Inc (BMI) filed Quarterly Report for the period ended 2011-09-30. Badger Meter has a market cap of $457.9 million; its shares were traded at around $30.3 with a P/E ratio of 18.7 and P/S ratio of 1.7. The dividend yield of Badger Meter stocks is 2.1%. Badger Meter had an annual average earning growth of 19.5% over the past 10 years. GuruFocus rated Badger Meter the business predictability rank of 3-star.



Highlight of Business Operations:

The Company’s net sales for the three months ended September 30, 2011 decreased $6.0 million, or 7.9%, to $69.7 million compared to $75.7 million during the same period in 2010. The decrease was due to lower sales of water application products, offset in part by higher sales of specialty application products. Also included in the third quarter of 2011 results were approximately $0.9 million of specialty application product sales related to the acquisition of Remag that were not included in the prior year amounts.

Water application products represented 81.6% of sales for the three months ended September 30, 2011 compared to 83.7% in the same period in 2010. These sales declined nearly $6.5 million for the three months ended September 30, 2011, or 10.3%, to $56.9 million from $63.4 million during the same period in 2010. The decline was due primarily to lower volumes of the Company’s AMR/AMI related products, as well as lower sales of commercial meters and manual read residential meters. Sales of the Company’s ORION AMR technology products decreased 6.5%, while sales of the Itron related products declined 44.2%. (Itron sales were substantially higher last year due to increased sales to certain customers.) In the most recent period, ORION related products outsold Itron related products by a ratio of 3 to 1. Commercial meter sales declined 5.2% in this period over the same period in 2010, while manual residential meters sales were down 25.2%. These declines were offset somewhat by higher sales of Galaxy fixed network related products. The Company believes the net overall volume declines were due to a continuation of certain factors, including concerns over municipal spending that delayed ordering decisions, slower housing starts and the Company’s introduction in early 2011 of the next generation of the ORION product that is causing water utilities to take time to evaluate this new technology.

Specialty application products represented 18.4% of sales for the three months ended September 30, 2011 compared to 16.3% for the same period in 2010. These sales increased $0.5 million in the third quarter of 2011, or 4.1%, to $12.8 million from $12.3 million during the same period in 2010. The increase in sales was due to the addition of $0.9 million for the acquisition of Remag which was not in the 2010 amounts, as well as increases in most of the specialty application product lines, offset by lower sales of radio technology to natural gas customers.

Water application products represented 77.9% of sales for the nine months ended September 30, 2011 compared to 85.5% for the same period in 2011. These sales decreased $23.5 million, or 13.0%, to $157.6 million compared to $181.1 million in the same period in 2010. The decline was due primarily to lower volumes of the Company’s AMR/AMI related products, as well as lower sales of commercial meters and manual read residential meters. Sales of the Company’s ORION AMR technology products decreased 19.9% in the first nine months of 2011 from the same period in 2010, while sales of the Itron related products decreased 27.2%. In the first nine months of 2011, Orion related products outsold Itron related products by a ratio of 2.7 to 1. Commercial sales decreased 19.3% in the first nine months of 2011 over the same period in 2010. The Company believes the volume declines were due to certain factors, including general purchasing reductions due to the economic downturn, concerns over municipal spending that delayed ordering decisions, slower housing starts and the Company’s introduction in early 2011 of the next generation of the ORION product that is causing water utilities to take time to evaluate this new technology. In addition, poor weather in the Midwest and Northeast had a negative impact on sales due to its effects on budgets and installation rates early in the year.

Specialty products represented 22.1% of sales for the nine-month period ended September 30, 2011 compared to 14.5% for the same period in 2010. These sales increased nearly $14.0 million, or 45.3%, to $44.6 million for the first nine months of 2011 from $30.7 million for the first nine months of 2010. The increase in sales included $2.5 million for Remag, which was acquired in early 2011. Sales also include $6.2 million for Cox Flow Measurement (Cox) sales for the first nine months of 2011 versus $2.9 million in 2010, representing sales from its acquisition date of April 1, 2010 through September 30, 2010. The remainder of the increase was due primarily to increased sales of radio technology to natural gas customers for connection to their gas meters and higher sales of valves, both domestically and internationally.

Read the The complete Report



Stocks Discussed: BMI,
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