Badger Meter Inc. (NYSE:BMI) Q1 2019 Earnings Conference Call - Final Transcript

Apr 17, 2019 • 11:00 am ET


Badger Meter Inc. (NYSE:BMI) Q1 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, welcome to the First Quarter 2019 Badger Meter Earnings Conference Call. (Operator Instructions) Please be advised that today's conference call is being recorded.

It is now my pleasure to turn the conference over to Karen Bauer, Director of Investor Relations and Corporate Strategy. Please go ahead Ms. Bauer.

Karen Bauer

Thank you. Good morning and welcome to the Badger Meter first quarter 2019 earnings conference call.

On the call with me today are Ken Bockhorst, President and Chief Executive Officer and Bob Wrocklage, Chief Financial Officer. The earnings release and the related slide presentation are available on our website.

Quickly, I will cover the Safe Harbor, reminding you that any forward-looking statements made during this call are subject to various risks and uncertainties, and most important of which are outlined in our press release and SEC filings.

Finally, please note that on today's call, we will refer to certain non-GAAP financial metrics. Our slides provide a reconciliation of the non-GAAP to GAAP financial metrics used.

With that, I'll turn the call over to Ken.

Kenneth Bockhorst

Thanks, Karen, and thanks to all of you for joining us for our first quarter earnings call today. We had a lot of good activity this quarter including meaningful wins that I believe demonstrate we're at the forefront of smart water technologies, improving profitability and good internal momentum building around our continuous improvement culture.

The unevenness in our topline with flat sales this quarter does not hamper my enthusiasm given what we continue to hear from the marketplace. In fact, part of the tempered sales activity was due to customers that are choosing to wait for their deliveries until our new technologies are fully launched and available. We had great profitability improvement in the quarter that Bob will walk you through. He will cover the details of the quarter and after that, I'll come back and talk about a few key strategic initiatives and our outlook.

With that, let me now turn the call over to Bob.

Robert Wrocklage

Thanks, Ken, and good morning everyone. As you can see on slide 4, our overall financial results were positive with strong profitability improvement and robust cash flow. Sales for the first quarter were $104.9 million compared to $105 million in the same period last year. Unfavorable foreign currency translation was a headwind of about $700,000 and the year-over-year impact from the IMS distributor acquisition was not meaningful to the quarter.

In municipal water, our sales grew 1%. We saw higher domestic revenues -- volumes of newer technology meters and related radios, as well as increased service revenue. International municipal sales were down 15% year-over-year, albeit on a very small base. Flow instrumentation sales were down 3% year-over-year, largely due to the unfavorable currency translation impact that disproportionately impacts the flow product line. On an organic basis, we experienced solid general industrial demand, offset by anticipated lower volumes in certain of our deemphasized end markets.

Operating profit as a percent of sales was 13.7%, a 420 basis point improvement over