Brown Deer-based Badger Meter Inc. saw revenues increase during the third quarter but rising brass costs cut into the company’s earnings.
The maker of water meters and flow instrumentation products reported $100 million in revenue, a 3.9 percent increase that set a company record for the quarter. Rising raw material prices hurt margins and the company reported a 9.3 percent drop in net income to $8 million. Earnings dropped from 30 to 27 cents per diluted share.
“While the industry overall has experienced some softening, our performance has remained steady,” said Richard Meeusen, Badger Meter chairman, president and chief executive officer. “In addition, sales of our flow instrumentation products continued to improve as we saw significant increases across most of our product lines, including valves, magnetic meters and meters for the oil and gas market.”
Meeusen said the company would be planning price increases to account for the increasing price of brass and copper. That increase would be targeted for the first of the year and he said the company would look to pass those increased costs along to customers.
“A lot of that increase is being driven by news out of China,” Meeusen said. “The problem we all have with China is we don’t know how much copper they have in their stocks over there. They don’t announce that, so they are always the wildcard. What went up so quickly in the last few weeks could also go down just as quickly.”
Meeusen also said the company’s recent hiring of Ken Bockhorst as chief operating officer was intended as a way of setting up the company for the future.
“The fact of the matter is I am 62 years old and (chief financial officer Rick Johnson) is slightly older,” Meeusen said. “We’ve recognized that over the next couple years we’re going to have to have a shift in leadership here.”
He added the company has had a stable leadership team and there will be plenty of overlap time to make sure Bockhorst is a good fit.
