Badger Meter (BMI) Tops Q1 EPS by 5c, Revenues Beat

Badger Meter (NYSE: BMI) reported Q1 EPS of $0.41, $0.05 better than the analyst estimate of $0.36. Revenue for the quarter came in at $108.5 million versus the consensus estimate of $106.67 million.

"In this unprecedented time, our focus is on the health, safety and well-being of our employees, customers, suppliers and communities,” said Kenneth C. Bockhorst, Chairman, President and CEO of Badger Meter. “Around the world, Badger Meter is following all government requirements as they are issued and at this point, our facilities are operational and continuing to serve customers. We have implemented certain contingency planning steps to reduce expenses, manage our operating efficiency and closely monitor working capital. Badger Meter is in a strong financial position, and we are well positioned to navigate the uncertainty of the current environment.”

Outlook

The extent of the impact of COVID-19 on the global economy and the company’s financial results is uncertain and continues to rapidly evolve. Like many other industries, overall activity in the end markets served is beginning to slow, with customers now starting to signal potential project delays, deferral of orders and channel inventory de-stocking. In addition, modest supply disruption, cargo capacity constraints and related shortages of components may impact operations over the next several months. As a result, the company implemented temporary cost containment actions, including reductions in discretionary spending, a hiring freeze, reduced work hour furloughs and executive salary reductions.

Bockhorst continued, “We remain committed to effectively managing working capital and cash costs in order to preserve liquidity. We have approximately $70 million in cash on the balance sheet, and $125 million of revolving credit availability that we believe provides us sufficient capacity to fund foreseeable needs, including the quarterly dividend.

“A crisis such as this truly reinforces the criticality of the water industry. Despite the current situation, we remain focused on innovation and continue on track to launch new products in 2020. As we actively manage the short term, we are also contemplating the potential longer-term implications of this crisis on our business with two particular trends emerging. First, the benefit of automated meter reading adoption, whether AMR or AMI, to remotely assess meter functionality, early leak detection and usage reads. Second, remote actuation of flow restriction technology, to either limit, or in the case of this pandemic, immediately return to service full water availability to end consumers. We expect both of these trends to provide long-term opportunities for Badger Meter.”

Bockhorst concluded, “While we cannot currently forecast the length or severity of the varied economic repercussions of the pandemic, we expect that based on the necessity of our solutions, our sound balance sheet and committed workforce that we can nimbly navigate the challenges ahead and continue to protect the world’s most precious resource.”

For earnings history and earnings-related data on Badger Meter (BMI) click here.

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