Badger Meter(US:BMI)2020-10-28 21:04Sales Performance - The Company's net sales for Q3 2020 were $113.6 million, up 4.6% from $108.6 million in Q3 2019[96] - Sales in the municipal water market reached $93.6 million, an increase of 11.0% from $84.3 million in the prior year, driven by improving order rates and backlog conversion[96] - Sales in the global flow instrumentation market were $20.0 million, a decrease of 17.9% from $24.3 million in the previous year due to reduced activity across various end markets[96] - Net sales for the nine months ended September 30, 2020 were $313.2 million, a decrease from $317.1 million in the same period of 2019[100] - Sales in the municipal water market increased by 2.7% to $251.7 million, driven by advanced technology products and increased SaaS revenue[100] Financial Performance - Total operating earnings for Q3 2020 were $19.5 million, or 17.2% of sales, up from $16.4 million, or 15.1% of sales in Q3 2019[97] - Gross margin increased to 39.6% of sales in Q3 2020 from 38.4% in Q3 2019, with gross margin dollars rising by $3.4 million[97] - Total operating earnings for the nine months ended September 30, 2020 were $48.2 million, or 15.4% of sales, compared to $45.8 million, or 14.4% of sales in the prior year[101] - Cash provided by operations in the first nine months of 2020 was $73.7 million, up from $61.1 million in the same period of 2019[107] - Cash and cash equivalents increased by $45.0 million to $93.9 million at September 30, 2020, due to strong cash flow from operations[108] - Primary working capital as a percentage of sales was 23.0% as of September 30, 2020, down from 26.4% at the end of 2019[106] - The provision for income taxes as a percentage of earnings before income taxes for Q3 2020 was 23.9%, compared to 22.1% in Q3 2019[98] - Net earnings for the nine months ended September 30, 2020 were $36.2 million, or $1.24 per diluted share, compared to $34.9 million, or $1.19 per diluted share in the prior year[104] Product and Technology Development - Approximately 60% of water meters installed in the U.S. have been converted to radio solution technology, indicating a significant trend towards modernization[73] - The Company estimates that nearly 90% of its products are used in water-related applications, with a strong focus on municipal water utilities[68] - The ORION branded family of radio endpoints offers various meter reading solutions, enhancing flexibility for utilities transitioning to fixed network communications[71] - The BEACON Advanced Metering Analytics software suite provides utilities with improved visibility and customer engagement tools, enhancing operational efficiency[72] - The Company is launching its next generation of ultrasonic metering technology, D-Flow, which is expected to enhance competitive differentiation in the market[82] Market Expansion and Strategic Initiatives - Badger Meter is actively pursuing geographic expansion opportunities, particularly in the Middle East, leveraging its ultrasonic meter technology[95] - The Company is positioned to benefit from the Smart Cities initiative, providing smart water solutions that enhance resource conservation and operational efficiency[83]