By a News Reporter-Staff News Editor at Computer Weekly News -- Badger Meter, Inc. (NYSE: BMI) reported results for the fourth quarter and year ended December 31, 2013. Fourth Quarter 2013 Highlights Net sales were a record $81,010,000 for the fourth quarter of 2013, a 9.0% increase from sales of $74,323,000 for the fourth quarter of 2012.
Net earnings were $6,380,000 for the fourth quarter of 2013, a 16.3% increase from net earnings of $5,484,000 for the fourth quarter of 2012.
Diluted earnings per share were a record $0.44 for the fourth quarter of 2013, a 12.8% increase from diluted earnings per share of $0.39 for the fourth quarter of 2012. Full Year 2013 Highlights Net sales were a record $334,122,000 for 2013, a 4.5% increase from sales of $319,660,000 for 2012.
Net earnings were $24,617,000 for 2013, a 12.2% decrease from net earnings of $28,032,000 for 2012.
Diluted earnings per share were $1.70 for 2013, a 12.8% decrease from diluted earnings per share of $1.95 for 2012. Operations Review "Our strong fourth quarter performance helped to drive our record sales for the year. The decrease in net earnings for 2013 was primarily due to the impact of the winter weather on our first quarter results. The three solid quarters that followed were just not enough to compensate for the weak first quarter," said Richard A. Meeusen, chairman, president and chief executive officer of Badger Meter.
Meeusen said the record fourth quarter sales were driven by strong sales of residential and commercial municipal water products, somewhat offset by a decrease in sales of industrial and specialty products. The gross profit margin was 35.8% for the fourth quarter of 2013, compared to 38.8% for the same period in 2012, due in part to product mix, with lower sales of higher-margin industrial products in the fourth quarter of 2013.
The gross profit margin for the full year was 35.0% in 2013, compared to 38.2% in 2012. The lower 2013 margin was due to a number of factors including fewer sales of higher-margin industrial products, increased sales of non-lead water meters that are made from a more expensive alloy and lower-margin sales to former customers of Elster AMCO Water, LLC, which exited the North American mechanical water meter business as of June 30. "While accepting the former Elster customers at an initially lower price-point reduced our margins for the year, we believe the addition of this business provides good growth opportunities for Badger Meter over the long term," said Meeusen.
He noted that although sales increased 4.5% for the year, selling, engineering and administration expenses were flat. "This was the result of lower employee incentives, partially offset by normal inflationary increases, along with our ongoing focus on controlling costs and increasing efficiency," said Meeusen.
"We continued to invest in research and development in 2013 and introduced several major new product advancements to the market. We expanded our line of E-Series® ultrasonic meters with a polymer version that provides a lower-cost alternative to our successful stainless steel version. The E-Series continues to gain customer acceptance and we are particularly encouraged by the opportunities we have with this product outside of North America. For example, we recently shipped initial orders of residential E-Series water meters as part of a contract with a water utility in the Middle East," said Meeusen.
"In early 2013, we introduced ORION® SE, the first truly simultaneous drive-by fixed-network product in the market. Last week, we took another major step forward with the introduction of our new BEACON Advanced Metering Analytics (AMA) system. Badger Meter is the first major water meter company in the industry to provide water utilities with cost-effective cellular radio endpoints that have a longer battery life, along with a sophisticated software suite that allows end-customers to view and manage their water usage activity. BEACON AMA combines both fixed and cellular networks, reducing the need for costly infrastructure - a feature that appeals to water utilities of all sizes," said Meeusen.
"BEACON AMA is built on the software platform and cellular technology we acquired with the purchase of Aquacue, Inc. in April 2013. We saw the potential for Aquacue's intellectual property to significantly advance our R&D and enable us to be first to market with the key features and benefits BEACON AMA provides," added Meeusen.
"Badger Meter remains financially strong. Our significant cash flow enabled us to invest in Aquacue, develop and launch innovative new products and increase our quarterly cash dividend. We ended the year with a debt-to-total capitalization ratio of 26.3%. We believe we are well positioned to grow our business both organically and through acquisitions if opportunities arise," added Meeusen. Conference Call and Webcast Badger Meter management will hold a conference call to discuss the company's 2013 fourth quarter results on Thursday, February 6, 2014 at 10:00 AM Central/11:00 AM Eastern time. Interested parties can listen to the call live on the Internet through the company's Web site: www.badgermeter.com or by dialing 1-888-680-0878 and entering the passcode 93650163. Listeners should dial in to the call at least 5-10 minutes prior to the start of the call or should go to the Web site at least 15 minutes prior to the call to download and install any necessary audio software. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PMT4BYTNT. Pre-registrants will be issued a pin number to use when dialing into the live call which will provide quick access to the conference by bypassing the operator upon connection. In addition, the Webcast is also available through Thomson's investor portals. Individual investors can listen to the call at www.earnings.com, Thomson/CCBN's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson's password-protected event management site, StreetEvents (www.streetevents.com).
Keywords for this news article include: Finance, Software, Badger Meter Inc..
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