Brown Deer-based Badger Meter Inc. is still considering the potential sale of the company or other options aimed at increasing shareholder value, Rich Meeusen told analysts last week.
Meeusen, Badger Meter chairman, president and chief executive officer, said there is no guarantee any action will come as a result of the review. The company announced in May it was exploring options on “a preliminary basis” after media reports indicated it was exploring a sale.
Meeusen said the review usually would have been done on a confidential basis, but the media reports led the company to acknowledge its ongoing efforts.
“At this time, we continue to explore our options and hope to have this process completed during the third quarter,” Meeusen said on the company’s second quarter earnings call.
Meeusen said the company conducted a similar review a few years ago that ended with the acquisition of Racine Federated and the implementation of a stock buyback program. The current review could end in the sale of a portion of the business, an acquisition or other possibilities, he said.
“When we say that our board is reviewing strategic alternatives, that means all alternatives,” Meeusen said. “And it’s unfortunate that everybody immediately jumped right away to the idea of a sale but that’s what the market tends to do.”
The company also reported it incurred $700,000 in expenses related to the strategic review and an early retirement program in its flow instrumentation business. The program was intended to reduce the headcount in the business because of the downturn in the oil and gas industry.
Meeusen said the reduction didn’t come about because of the strategic review and was planned before the review started.
“We were pleased that we’re able to implement the headcount reduction without layoffs,” he said. “Instead we’re able to offer an early retirement program that achieved our desired results.”
The program will result in $1.3 million in annual savings.
The company was able to set a record for revenue and profits in the second quarter as stronger municipal water product sales offset lower sales in flow instrumentation.
Meeusen said he believes the oil and gas industry is bottoming out and the flow instrumentation business could see a return to growth in 2017.
