Improved residential and commercial sales helped Brown Deer-based Badger Meter set earnings records for the first quarter and surpass $100 million in quarterly sales for the first time.
The manufacturer of water meters reported net income of about $8 million and diluted earnings per share of 55 cents. Both figures represented an increase of more than 89 percent from the first quarter of 2015.
The company’s revenue for the quarter came in at $100.57 million, a 20 percent increase from 2015.
Richard A. Meeusen, Badger Meter chairman, president and chief executive officer, credited significantly higher sales of municipal water products, including the initial sales of a three-year contract with American Water for the strong quarter.
“We believe one of the contributors to our higher sales was the milder winter. Some customers started their spring meter replacement programs earlier, taking deliveries in the first quarter that we would typically see in the second quarter of the year,” Meeusen said.
He told analysts the earlier start led to about $4 million sales being pulled forward and will likely impact the second quarter.
“We have already seen this expected softness in orders during the first two weeks of this quarter,” Meeusen said, adding that the company hasn’t adjusted its full year expectations based on the strong quarter.
He said strong municipal sales more than compensated for a decrease in flow instrumentation products, which was hampered by weakness in the oil and gas market.
The company was also able to increase its gross profit margin from 38.8 percent from 36 percent last year. Meeusen said the increase was higher manufacturing utilization because of increased sales volumes.
He said the company has seen remarkably fast adoption of the company’s E-Series and Beacon products in the industry, which he said is historically slow to adopt new products.
“Both of these products have seen a faster market acceptance than any products we’ve ever introduced,” Meeusen said.
He added the company feels good about its product pipeline moving forward and plans to continue investing in the development of both products.
