Badger Meter(BMI) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales for Q1 2025 increased to $222,211,000, a 13.2% rise from$ 196,280,000 in Q1 2024[14] - Gross margin improved to $95,437,000, compared to$ 77,178,000 in the same period last year, reflecting a significant increase of 23.6%[14] - Net earnings for Q1 2025 were $38,398,000, up 31.8% from$ 29,131,000 in Q1 2024[14] - Earnings per share (EPS) for Q1 2025 were $1.31 (basic) and$ 1.30 (diluted), compared to $0.99 for both in Q1 2024[14] - Comprehensive income for Q1 2025 was$ 43,556,000, compared to $25,509,000 in Q1 2024, reflecting a growth of 70.8%[16] - Total operating earnings for Q1 2025 were$ 49.4 million, representing 22.2% of sales, compared to $36.6 million or 18.6% of sales in Q1 2024[85] - Gross margin for Q1 2025 was 42.9%, an increase from 39.3% in the prior year, benefiting from higher sales volumes and a favorable product mix[85] Assets and Liabilities - Total assets increased to$ 899,596,000 as of March 31, 2025, up from $816,413,000 at the end of 2024, marking a growth of 10.2%[12] - Cash and cash equivalents decreased to$ 131,358,000 from $295,305,000, a decline of 55.6%[12] - Total current liabilities rose to$ 141,017,000, an increase of 19.3% from $118,205,000 in the previous period[12] - The balance of contract liabilities increased to$ 90.6 million as of March 31, 2025, up from $78.3 million at the end of 2024[50] - Primary Working Capital (PWC) increased to$ 187.5 million (22.0% of sales) as of March 31, 2025, compared to $172.1 million (20.8% of sales) at the end of 2024[89] - Receivables rose by$ 27.5 million due to increased sales activity, while inventories increased by $6.0 million[89] Cash Flow - The company reported a net cash provided by operations of$ 33,027,000 for Q1 2025, compared to $21,460,000 in Q1 2024, an increase of 53.8%[19] - Cash provided by operations in Q1 2025 was$ 33.0 million, up from $21.5 million in Q1 2024, driven by higher net earnings[90] - Cash and cash equivalents decreased to$ 131.4 million from $295.3 million at the end of 2024, primarily due to$ 184.9 million used for the SmartCover acquisition[91] Dividends and Share Repurchase - The company declared dividends of $0.34 per share in Q1 2025, up from$ 0.27 per share in Q1 2024[14] - The company authorized the repurchase of up to 200,000 shares of common stock through February 2026, with no shares purchased in Q1 2025[102] Acquisitions and Investments - The total purchase consideration for SmartCover was $184.9 million, with$ 117.4 million allocated to goodwill that is not tax-deductible[34][35] - The company acquired SmartCover for $184.9 million, with revenue contribution of$ 6.2 million for the two months ended March 31, 2025[77][78] - The Company acquired select remote water monitoring hardware and software for $3.0 million effective January 1, 2024[36] - Property, plant, and equipment expenditures for Q1 2025 were$ 3.0 million, slightly higher than $2.7 million in Q1 2024[90] Market and Revenue Insights - Utility water market net sales reached$ 197.3 million, up 16.0% from $170.1 million in the prior year, driven by increased sales of mechanical and ultrasonic meters, ORION® Cellular endpoints, and BEACON® SaaS revenue[84] - The Company recognized$ 20.3 million in revenue over time, representing 9.1% of total revenue, compared to $12.7 million or 6.5% in the prior year[48] - The company continues to operate under a single segment, focusing on water and wastewater management solutions[45] - Approximately 40% of water meters installed in the U.S. have been converted to advanced metering infrastructure (AMI) systems[67][73] - The flow instrumentation product line accounted for approximately 12% of net sales in 2024, serving various industrial applications[70] - The company is expanding into international markets, including the Middle East and the UK, with its BlueEdge offerings[82] Taxation - The effective income tax rate for the Company was 24.4% for the three months ended March 31, 2025, compared to 23.5% in the prior year[42] - The provision for income taxes for Q1 2025 was 24.4%, compared to 23.5% in the prior year[86] Compliance and Internal Controls - The company remains compliant with all financial covenants as of March 31, 2025[92] - There were no material changes in the company's internal control over financial reporting during Q1 2025[98]