Racine Federated acquisition pumps up earnings for Badger Meter

Bolstered by last year’s acquisition of Racine Federated Inc., Milwaukee-based Badger Meter Inc. reported a 362-percent increase in net earnings and a 22.4 percent increase in net sales for the fourth quarter of 2012.

The company’s net earnings for the quarter were $5.484 million, up from $1.187 million in the fourth quarter of 2011. Net sales were $74.3 million, up from $60.7 million in the fourth quarter of 2011. Diluted earnings per share were 39 cents in the quarter, up from 8 cents in the fourth quarter of 2011. For all of 2012, net earnings were up 46.3 percent to $28 million, or $1.95 diluted earnings per share. Net sales for the year were up 21.6 percent to $319.7 million.

“We ended 2012 with a solid fourth quarter that helped us achieve record sales and higher earnings per share for the year,” said Richard Meeusen, chairman, president and chief executive officer of Badger Meter. “The increase in fourth quarter sales was due to the acquisition of Racine Federated, in January 2012, along with higher sales of products for the municipal water market, particularly residential water meters.”

For the full year, sales of the Badger Meter’s core products, not including Racine Federated, were up 6 percent.

“The comparison was negatively impacted by unusually high sales to a natural gas customer in 2011 as part of a large contract, which we did not have in 2012,” Meeusen said. “Excluding natural gas, sales of the core Badger Meter products were up 11 percent in 2012. Virtually all product lines contributed to the higher sales, as we benefited from increased housing starts, a slowly improving economy and growing demand for our new products. We believe we are well positioned for continued growth in 2013.”

One of Badger Meter’s competitors, Ocala, Fla.-based Elster AMCO Water, closed its North American operations recently, leaving between 8 and 10 percent of the water meter market share up for grabs and Badger Meter hopes to take advantage of the opportunity to grow its market share.

“We were a little surprised by it, I think the whole market was a little surprised by it,” Meeusen said. “This could represent a positive opportunity for growth in our core business.”

Meeusen said Badger Meter is developing a strategy to gain Elster AMCO’s customers. Some have already approached the company.

“We’ve already captured some significant customers that have purchased Elster meters in the past,” he said.

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