Brown Deer-based Badger Meter Inc. reported net income of $8.8 million during the third quarter of 2016, an increase of 5.6 percent over the previous year.
The maker of water meters and flow instrumentation products reported an increase in earnings from 29 cents to 30 cents per diluted share after adjusting for the company’s 2-for-1 stock split, which was effective Sept. 15.
Speculation about the company’s future swirled for much of the summer after a Wall Street Journal report in May that the company was exploring a possible sale. The company confirmed it was conducting a strategic review and completed the review by announcing the stock split in August.
Despite the improved bottom line numbers, Badger Meter’s revenue was down 3.1 percent, to $96.3 million.
Rich Meeusen, Badger Meter chairman, president and chief executive officer, said the results were in line with the company’s expectations, attributing the drop in revenue to a softening of orders early in the quarter.
“Customer response to our flagship municipal water products, including our E-Series Ultrasonic meters and our BEACON AMA solution with ORION cellular technology, continues to be very positive. This helped offset decreased sales of flow instrumentation products due to the continued weakness in the industrial markets we serve,” Meeusen said.
The company reduced its cost of sales by 8.9 percent, to $57.6 million, improving gross margin to 40.1 percent, up from 36.3 percent. Meeusen said the improvement was partially driven by lower costs from the company-owned distribution network.
“We are pleased with the growth of our distribution network and recently opened a new warehouse in Texas to support the continued expansion of this business,” he said.
Meeusen also said a $740,000 non-cash pension settlement charge reduced earnings by 2 cents per diluted share.
The company’s selling, general and administrative expenses were up 9.9 percent during the quarter, to $24.7 million.
