Badger Meter Q1 Report 2023

 Highlights

• Total sales of $159.1 million, 20% higher than the prior year’s $132.4 million.
• Operating profit increased 33% year-over-year, with operating profit margins expanding 150 basis points to 15.7% from 14.2%.
• Diluted earnings per share (EPS) increased 35% to $0.66, up from $0.49 in the comparable prior year quarter.
• Completed the acquisition of Syrinix, Ltd. (“Syrinix”)
• Robust demand environment continued with strong orders; record backlog despite the all-time high sales performance in the quarter.

Sales of flow instrumentation products increased 22% year-over-year, with strong order demand across the water-focused end markets and improving supply chain dynamics which aided manufacturing output.

Gross margin dollars increased $12.1 million year-over-year, and gross margin as a percent of sales improved 120 basis points to 39.5%, at the higher end of the Company’s normalized range. The improvement was due to the combined benefits of positive sales mix including higher SaaS revenues, production efficiencies, value-based pricing and the sequential stabilization of inflationary pressures.

SEA expenses in the first quarter of 2023 were $37.8 million, $5.9 million higher than the comparable prior year quarter. As a percent of sales, SEA improved by 40 basis points to 23.7% versus 24.1% in the comparable prior year quarter. The increase in SEA dollars year-over-year was due to higher personnel-related costs including increased headcount, salaries.