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What changed in BADGER METER INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of BADGER METER INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+159 added−149 removedSource: 10-K (2025-02-14) vs 10-K (2024-02-16)

Top changes in BADGER METER INC's 2024 10-K

159 paragraphs added · 149 removed · 134 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe believe that developing a diverse and inclusive business makes us and society stronger, energizes our growth through customer engagement and helps us attract and retain talent: • We maintain a Human Rights policy, Equal Employment Opportunity policy and partner with a variety of recruiting and hiring agencies focused on diverse candidates. • Currently, 36% of our executive officer group is diverse (three women, one Southeast Asian). • We conduct an external pay equity analysis on an annual basis, with no findings requiring adjustments. • We have a dedicated DEI team focused on fostering diversity, equity and inclusion across our global workforce. • We are a signatory to the Equality Act, supporting LGBTQ rights. • We actively participate as part of the Metropolitan Milwaukee Association of Commerce (MMAC) Diversity Pledge, a commitment to increasing diversity representation in the workforce. • The following provides the percentage of certain employee demographic details aligned with the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI) reporting frameworks: 2023 2022 Females in the workforce, globally 40% 40% Female representation in management, globally 28% 27% Female representation in manufacturing, globally 51% 51% Female representation on the Board of Directors 33% 30% Minorities in the U.S. workforce 32% 30% Minority representation in U.S. management 15% 12% Minority representation in U.S. manufacturing 56% 54% Employee Rights, Health and Safety.
Biggest changeWe believe that developing a diverse business makes us and society stronger, energizes our growth through customer engagement and helps us attract and retain talent: • We maintain a Code of Conduct, Human Rights policy, Equal Employment Opportunity policy and partner with a variety of recruiting and hiring agencies focused on comprehensive candidate pools. • We conduct a global pay equity analysis on an annual basis, with no findings requiring adjustments. • We have a dedicated diversity and inclusion team focused on leveraging diverse perspectives and enhancing the active participation and commitment of employees in their work and the organization as a whole. • We are a signatory to the Equality Act. • We actively participate as part of the Metropolitan Milwaukee Association of Commerce (MMAC) Diversity Pledge, a commitment to increasing diversity representation in the workforce. • The following provides the percentage of certain employee demographic details aligned with the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI) reporting frameworks: 2024 2023 Females in the workforce, globally 40% 40% Female representation in management, globally 30% 28% Female representation in manufacturing, globally 50% 51% Female representation on the Board of Directors 33% 33% Minorities in the U.S. workforce 32% 32% Minority representation in U.S. management 15% 15% Minority representation in U.S. manufacturing 58% 56% Employee Rights, Health and Safety.
ORION Cellular endpoints power our Network as a Service (NaaS) approach to AMI, eliminating the need for the utility to install or maintain infrastructure, enabling rapid or gradual deployment, and enhancing network reliability. ORION mobile read endpoints support customers looking to deploy an AMR solution. Information and analytics are critical to the smart water ecosystem.
ORION Cellular endpoints power our Network as a Service (NaaS) approach to AMI, eliminating the need for the utility to install and maintain infrastructure, enabling rapid or gradual deployment, and enhancing network reliability. ORION mobile read endpoints support customers looking to deploy an AMR solution. Information, analytics and visualization are critical to the smart water ecosystem.
Meters equipped with radio technology (endpoints) receive flow measurement data from battery-powered 5 encoder registers attached to the water meter, which is encrypted and transmitted via radio frequency to a receiver that collects and formats the data appropriately for water utility usage and billing systems.
Meters equipped with radio technology (endpoints) receive flow measurement data from battery-powered encoder registers attached to the water meter, which is encrypted and transmitted via radio frequency to a receiver that collects and formats the data appropriately for water utility usage and billing systems.
Risk Management The Company’s Enterprise Risk Management (ERM) process aims to identify, manage and monitor significant and material risks. The ERM process assesses, manages, and monitors risks consistent with the integrated risk framework in the Enterprise Risk Management-Integrated Framework (2017) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Risk Management The Company’s Enterprise Risk Management (ERM) process aims to identify, manage and monitor significant and material risks. The ERM process assesses, manages, and monitors risks consistent with the integrated risk framework in the Enterprise Risk 10 Management-Integrated Framework (2017) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
The data and insights collected from these additional operational sensors are often conveyed by cellular networks and can be leveraged alongside of the metering data within BEACON to unlock powerful insights about the operations of a customer's distribution network.
The data and insights collected from these additional operational sensors are often conveyed by cellular networks and can be leveraged alongside of the metering data within BEACON to unlock powerful insights about the operations of a customer's distribution and collection network.
No single patent, trademark, trade name or trade secret is material to the Company's business as a whole. 7 Environmental Protection The Company is subject to contingencies related to environmental laws and regulations.
No single patent, trademark, trade name or trade secret is material to the Company's business as a whole. Environmental Protection The Company is subject to contingencies related to environmental laws and regulations.
However, if new or amended laws or regulations impose significant operational restrictions and compliance requirements upon the Company or its products, the Company's business, capital expenditures, results of operations, financial condition and competitive position could be negatively impacted. Refer to Part I, Item 1A. “Risk Factors” of this 2023 Annual Report on Form 10-K for further information.
However, if new or amended laws or regulations impose significant operational restrictions and compliance requirements upon the Company or its products, the Company's business, capital expenditures, results of operations, financial condition and competitive position could be negatively impacted. Refer to Part I, Item 1A. “Risk Factors” of this 2024 Annual Report on Form 10-K for further information.
The Company exports products from the United States that are manufactured in Milwaukee, Wisconsin, Racine, Wisconsin, Tulsa, Oklahoma and Collegeville, Pennsylvania. Information about the Company's foreign operations and export sales is included in Note 9 “Industry Segment and Geographic Areas” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 2023 Annual Report on Form 10-K.
The Company exports products from the United States that are manufactured in Milwaukee, Wisconsin, Racine, Wisconsin, Tulsa, Oklahoma and Collegeville, Pennsylvania. Information about the Company's foreign operations and export sales is included in Note 9 “Industry Segment and Geographic Areas” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 2024 Annual Report on Form 10-K.
ITEM 1. BUSINESS Badger Meter, Inc. (the “Company”) is a leading innovator, manufacturer and marketer of products incorporating flow measurement, quality, control and other system solutions serving markets worldwide. The Company was incorporated in 1905. Throughout this 2023 Annual Report on Form 10-K, the words “we,” “us” and “our” refer to the Company.
ITEM 1. BUSINESS Badger Meter, Inc. (the “Company”) is a leading innovator, manufacturer and marketer of products incorporating flow measurement, quality, control and other system solutions serving markets worldwide. The Company was incorporated in 1905. Throughout this 2024 Annual Report on Form 10-K, the words “we,” “us” and “our” refer to the Company.
Information about the Company's sales, operating earnings and assets is included in the Consolidated Financial Statements and in Note 9 “Industry Segment and Geographic Areas” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 2023 Annual Report on Form 10-K.
Information about the Company's sales, operating earnings and assets is included in the Consolidated Financial Statements and in Note 9 “Industry Segment and Geographic Areas” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 2024 Annual Report on Form 10-K.
Expenditures for compliance control provisions and regulations during 2023, 2022 and 2021 were not material. Government Regulations The Company’s operations worldwide are subject to various federal, state, local and foreign laws and regulations. Whether at the federal, state, or local level, the intent of these laws and regulations is to protect product safety, public health and the environment.
Expenditures for compliance control provisions and regulations during 2024, 2023 and 2022 were not material. 7 Government Regulations The Company’s operations worldwide are subject to various federal, state, local and foreign laws and regulations. Whether at the federal, state, or local level, the intent of these laws and regulations is to protect product safety, public health and the environment.
The Company’s smart measurement hardware is primarily comprised of the following product families: • meters that measure the flow of water and other fluids and are known for accuracy, long-lasting durability and for providing valuable and timely flow measurement data. • water quality monitoring solutions, including optical sensing and electrochemical instruments that provide real-time, on-demand data parameters. • high frequency pressure and acoustic leak detection hardware that provides real-time monitoring data.
The Company’s measurement and control hardware, instruments and sensors are primarily comprised of the following product families: • meters that measure the flow of water and other fluids and are known for accuracy, long-lasting durability and for providing valuable and timely flow measurement data. • water quality monitoring solutions, including optical sensing and electrochemical instruments that provide real-time, on-demand data parameters. • high frequency pressure and acoustic leak detection hardware that provides real-time monitoring data.
The industry continues to undergo a conversion from manually read water meters to meters with radio technology, and for AMR systems to be upgraded to digital AMI solutions. The Company estimates that approximately one-third of water meters installed in the United States have been converted to AMI systems.
The industry continues to undergo a conversion from manually read water meters to meters with radio technology, and for AMR systems to be upgraded to digital AMI solutions. The Company estimates that approximately 40% of water meters installed in the United States have been converted to AMI systems.
It also allows for consumer engagement tools that permit end water users (such as homeowners) to view and manage their water usage activity. Benefits to the utility include improved customer service, increased visibility through faster leak detection, the ability to promote and quantify the effects of its water conservation efforts, and easier compliance reporting.
It also enables the deployment of consumer engagement tools that permit end water users (such as homeowners) to view and manage their water usage activity. Benefits to the utility include improved customer service, increased visibility through faster leak detection, the ability to promote and quantify the effects of its water conservation efforts, and easier compliance reporting.
Flow Instrumentation Product Line (approximately 15% of Net Sales in 2023) The flow instrumentation product line primarily serves water applications throughout the broader industrial market, with both standard and customized solutions. This product line includes meters, valves and other sensing instruments sold worldwide to measure and control the quantity of fluids, including water, air, steam, and other liquids and gases.
Flow Instrumentation Product Line (approximately 12% of Net Sales in 2024) The flow instrumentation product line primarily serves water applications throughout the broader industrial market, with both standard and customized solutions. This product line includes meters, valves and other sensing instruments sold worldwide to measure and control the quantity of fluids, including water, air, steam, and other liquids and gases.
Htwe served as Vice President of Global Operations for Emerson Commercial and Residential Solutions for its InSinkErator business unit from January 2022 to December 2022 and Vice President of Operations for Wahl Clipper Corporation from March 2013 to December 2021. Previously, he held roles of increasing responsibility at Oshkosh Corporation. Mr.
Prior to joining the Company, Mr. Htwe served as Vice President of Global Operations for Emerson Commercial and Residential Solutions for its InSinkErator business unit from January 2022 to December 2022 and Vice President of Operations for Wahl Clipper Corporation from March 2013 to December 2021. Previously, he held roles of increasing responsibility at Oshkosh Corporation. Ms.
Approximately 117 of those employees are covered by a collective bargaining agreement with District 10 of the International Association of Machinists. The Company currently operates under a three-year contract with the union, which expires on October 31, 2025. The Company believes it has good relations with the union and its employees.
There are 119 employees covered by a collective bargaining agreement with District 10 of the International Association of Machinists. The Company currently operates under a three-year contract with the union, which expires on October 31, 2025. The Company believes it has good relations with the union and its employees.
We will continue to utilize feedback received from the survey to identify meaningful actions targeted at fostering improvement in employee engagement, including pulse surveys to monitor effectiveness of action plans. Diversity, Equity and Inclusion.
We will continue to utilize feedback received from the survey to identify meaningful actions targeted at fostering improvement in employee engagement, including pulse surveys to monitor effectiveness of action plans. Collaboration and Engagement.
Research and Development Expenditures for research and development activities related to development of new products, the improvement of existing products and manufacturing process improvements were $19.0 million in 2023, $15.8 million in 2022 and $14.7 million in 2021. Research and development activities are primarily sponsored by the Company.
Research and Development Expenditures for research and development activities related to development of new products, the improvement of existing products and manufacturing process improvements were $19.2 million in 2024, $19.0 million in 2023 and $15.8 million in 2022. Research and development activities are primarily sponsored by the Company.
Our goal is zero. While we are proud of our performance in 2023, most notably in relation to industry averages, we recognize there is more work to be done. • Badger Meter’s Human Rights Policy outlines our commitment to respecting and supporting internationally recognized human rights and freedoms. • We provide an Employee Assistance Program (EAP) and mental health coverage.
While we are proud of our performance in 2024, most notably in relation to industry averages, we recognize there is more work to be done. • Badger Meter’s Human Rights Policy outlines our commitment to respecting and supporting internationally recognized human rights and freedoms. • We provide an Employee Assistance Program (EAP) and mental health coverage. Community and Social Activities.
The Company’s broad range of communication solutions include the ORION® branded family of radio endpoints, providing customers with a choice of industry-leading options for communicating data from hardware into usable applications. The Company’s hardware-enabled software provides the insights and analytics critical to the holistic management of our customers’ water systems.
The Company’s broad range of communication solutions include the ORION® branded family of radio endpoints, along with remote telemetry units providing customers with a choice of industry-leading options for communicating data from hardware into use-specific software applications. The Company’s hardware-enabled software provides the insights and analytics critical to the holistic management of our customers’ water systems.
Utility Water Product Line (approximately 85% of Net Sales in 2023) Utility water smart metering solutions are comprised of water meters along with the related radio and software technologies and services used by water utilities as the basis for generating their water and wastewater revenues, enabling operating efficiencies and engaging with their end consumers.
Utility Water Product Line (approximately 88% of Net Sales in 2024) Utility water smart metering solutions are comprised of water meters along with the connected radio endpoints and software technologies and services used by water utilities as the basis for generating their water and wastewater revenues, enabling operating efficiencies and engaging with their end consumers.
Our comprehensive benefits include healthcare, disability and life insurance, paid time off, and various leave programs, as well as retirement savings plans and financial advisory services. 8 • We invest in the growth and development of our employees, offering a range of all employee, managerial, and leader training that spans on-demand, virtual, and live instructor-led formats. • We offer flexible, remote work and part-time arrangements, as business roles permit. • Our regrettable turnover decreased to 8.3% in 2023, compared to 10.0% in 2022, and 9.6% in 2021.
Our comprehensive benefits include healthcare, disability and life insurance, paid time off, and various leave programs, as well as retirement savings plans and financial advisory services. • We invest in the growth and development of our employees, offering a range of programs for employees at all stages of their career that spans on-demand, virtual, and live instructor-led formats. • We offer flexible, remote work and part-time arrangements, as business roles permit. • Our regrettable turnover decreased to 6.6% in 2024, compared to 8.3% in 2023, and 10.0% in 2022.
A stabilizing labor market in the US was the primary driver of the decrease. • We implemented our third annual global employee engagement survey in 2023, with over 93% of all global employees voluntarily participating. The 2023 survey showed improvement in many areas, as a result of our targeted engagement action plan and commitment to continuous improvement.
A stabilizing labor market in the US was the primary driver of the decrease. • We completed our fourth annual global employee engagement survey in 2024, with over 95% of all global employees voluntarily participating. The 2024 survey showed improvement in many areas, as a result of our targeted engagement 8 action plan and commitment to continuous improvement.
Community and Social Activities. Through both financial contributions and volunteer efforts of our employees, Badger Meter supports programs and organizations that address water conservation and quality, education and community concerns which are all vital to community sustainability. 9 Information about the Company’s Executive Officers The following table sets forth certain information regarding the Executive Officers of the Registrant.
Through both financial contributions and volunteer efforts of our employees, Badger Meter supports programs and organizations that address water conservation and quality, education and community concerns which are all vital to community sustainability. Information about the Company’s Executive Officers The following table sets forth certain information regarding the Executive Officers of the Registrant. Name Position Age at 2/28/2025 Kenneth C.
These tailorable solutions encompass smart measurement hardware, reliable communications, data and analytics software as well as ongoing support and expertise essential to optimize customers' operations and contribute to the sustainable use and protection of the world’s most precious resource.
These tailorable solutions encompass measurement and control hardware, connectivity and communication, data visualization and software-delivered actionable insights as well as ongoing support and expertise essential to optimize customers' operations and contribute to the sustainable use and protection of the world’s most precious resource.
Employee training is used to reinforce our values companywide, and our annual ethics and compliance training is administered globally with nearly 100% completion by eligible employees. In addition to trust, our values include a focus on diversity, equity, and inclusion, as well as continuous improvement and environmental responsibility. Recruitment, Development and Retention.
Employee training is delivered to reinforce our values company-wide, and our annual ethics and compliance training is administered globally with nearly 100% completion by eligible employees. In addition to trust, our values include a focus on leveraging diverse perspectives, treating everyone with respect, continuous improvement and environmental responsibility. Recruitment, Development and Retention.
A number of the Company's competitors in certain markets have greater financial resources than the Company. The Company, however, believes it currently provides the leading technologies in water meters and water-dedicated radio and software solutions.
The Company believes it currently provides the leading technologies that span the full water distribution network. A number of the Company's competitors in certain markets have greater financial resources than the Company. The Company, however, believes it currently provides the leading technologies that span the water distribution network.
This product line further comprises other instruments and sensors used in the water distribution system to ensure the safe and efficient delivery of clean water. These sensors are used to detect leaks and to monitor various water quality parameters throughout the distribution system. The largest geographic market in which the Company operates is North America, primarily the United States.
This product line further comprises other instruments and sensors used in the water distribution system to ensure the safe and efficient delivery of clean water. These sensors are used to detect leaks and to 5 monitor various water quality parameters throughout the distribution system and treatment process.
In addition to on-the-job safety, we take a holistic view of employee health and well-being, including our multifaceted wellness program, B|Well, which aims to provide information, activities, support and rewards for smart and healthy choices. • Safety, as measured by our global Total Case Incident Rate (TCIR), was 0.40 in 2023, compared to 0.59 in 2022, and 0.75 in 2021.
In addition to on-the-job safety, we take a holistic view of employee health and well-being, including our multifaceted wellness program, B|Well, which focuses on employee physical, mental and financial well-being. • Safety, as measured by our global Total Case Incident Rate (TCIR), was 0.43 in 2024, compared to 0.40 in 2023, and 0.59 in 2022. Our goal is zero.
Flow instrumentation products are generally sold through manufacturers’ representatives and original equipment manufacturers as the primary flow measurement device within a product or system. Specialized communication protocols that control the entire flow measurement process and mandatory certifications drive these markets.
Flow instrumentation products are generally sold through manufacturers’ representatives and original equipment manufacturers as the primary flow measurement device within a product or system.
Each officer holds office until his or her successor has been elected or until his or her death, resignation or removal. There is no arrangement or understanding between any executive officer and any other person pursuant to which he or she was elected as an officer. Mr.
There is no arrangement or understanding between any executive officer and any other person pursuant to which he or she was elected as an officer. Mr.
Stuyvenberg was elected Vice President – Water Quality in January 2022 and Vice President - Software and Water Quality in January 2023. Mr. Stuyvenberg joined Badger Meter in April 2007 as Mechanical Engineer of Applied Research and has since held roles of increasing responsibility, including Manager of Mechanical Engineering and Director of Utility Engineering. Mr.
Stuyvenberg joined Badger Meter in April 2007 as Mechanical Engineer of Applied Research and has since held roles of increasing responsibility, including Manager of Mechanical Engineering and Director of Utility Engineering. Mr. Weltzien has served as Vice President – Controller for more than five years.
Weltzien was elected Vice President – Controller in March 2019. 10 Foreign Operations and Export Sales The Company sells its products and software through employees, resellers and representatives throughout the world.
Foreign Operations and Export Sales The Company sells its products and software through employees, resellers and representatives throughout the world.
Name Position Age at 2/28/2024 Kenneth C. Bockhorst Chairman, President and Chief Executive Officer 51 Robert A. Wrocklage Senior Vice President — Chief Financial Officer 45 Karen M. Bauer Vice President — Investor Relations, Corporate Strategy and Treasurer 56 Fred J. Begale Vice President — Engineering 59 William R. A.
Bockhorst Chairman, President and Chief Executive Officer 52 Robert A. Wrocklage Senior Vice President — Chief Financial Officer 46 Karen M. Bauer Vice President — Investor Relations, Corporate Strategy and Treasurer 57 Fred J. Begale Vice President — Engineering 60 William R. A. Bergum Vice President — General Counsel and Secretary 60 Sheryl L.
Previously, she held roles of increasing responsibility at Eaton Corporation and other multinational public companies. Mr. Htwe was elected Vice President - Global Operations in January 2023. Prior to joining the Company, Mr.
Hopkins served as Vice President of Human Resources for ADVENT from April 2019 to October 2020 and Senior Vice President of Human Resources for Runzheimer International from July 2010 to March 2018. Previously, she held roles of increasing responsibility at Eaton Corporation and other multinational public companies. Mr. Htwe was elected Vice President - Global Operations in January 2023.
Wrocklage was elected Vice President – Chief Financial Officer and Treasurer in 2019 and Senior Vice President – Chief Financial Officer in January 2020 after serving as Vice President - Finance for the Company from August 2018 to December 2018. Ms. Bauer was elected Vice President - Investor Relations, Corporate Strategy and Treasurer effective June 2019.
Wrocklage was elected Vice President – Chief Financial Officer and Treasurer in 2019 and Senior Vice President – Chief Financial Officer in January 2020. Ms. Bauer has served as Vice President - Investor Relations, Corporate Strategy and Treasurer for more than five years. Mr. Begale has served as Vice President - Engineering for more than five years. Mr.
This system-wide scrutiny has heightened the focus on flow instrumentation and water quality monitoring in wastewater treatment, industrial process, building automation and precision engineering applications where flow measurement, quality and control are critical. 6 The Company offers one of the broadest flow measurement, control and communication portfolios in the market.
These demands heighten the focus on application-specific solutions provided by the Company for flow instrumentation and water quality monitoring in wastewater treatment, industrial process, building automation and precision engineering applications where flow measurement, quality and control are critical.
The industries served by the Company’s flow instrumentation products face accelerating demands to contain costs, reduce product variability, and meet ever-changing safety, regulatory and sustainability requirements. To address these challenges, customers must reap more value from every component in their systems.
Specialized communication protocols that control the entire flow measurement process and mandatory certifications drive these markets. 6 The industries served by the Company’s flow instrumentation products face accelerating demands to contain costs, reduce product variability, and meet ever-changing safety, regulatory and sustainability requirements.
Hopkins was elected Vice President - Human Resources in October 2020. Prior to joining the Company, Ms. Hopkins served as Vice President of Human Resources for ADVENT from April 2019 to October 2020 and Senior Vice President of Human Resources for Runzheimer International from July 2010 to March 2018.
Bergum has served as Vice President - General Counsel and Secretary for more than five years. Ms. Hopkins was elected Vice President - Human Resources in October 2020. Prior to joining the Company, Ms.
Human Capital Resources Our employees are our greatest strength and are critical to the achievement of our vision and successful execution of our global business strategy. We are committed to recruiting, developing and retaining top talent, in addition to fostering an inclusive environment where all employees can thrive. The Company and its subsidiaries employed 2,140 persons at December 31, 2023.
Human Capital Resources Our employees are our greatest strength and are critical to the achievement of our vision and successful execution of our global business strategy.
Bergum Vice President — General Counsel and Secretary 59 Sheryl L. Hopkins Vice President — Human Resources 56 Richard Htwe Vice President — Global Operations 57 Lars Bo Kristensen Vice President — Global Flow Instrumentation and International Utility 58 Kimberly K. Stoll Vice President — Sales and Marketing 57 Matthew L.
Hopkins Vice President — Human Resources 57 Richard Htwe Vice President — Global Operations 58 Kimberly K. Stoll Vice President — Sales and Marketing 58 Matthew L. Stuyvenberg Vice President — SaaS, Global Commercial and International Utility 42 Daniel R. Weltzien Vice President — Controller 46 9 There are no family relationships between any of the executive officers.
The majority of water meters sold are mechanical in nature, with increasing adoption over time of ultrasonic (static) metering technology due to a variety of attributes, including their ability to maintain measurement accuracy over their useful life. Utility water meters (both residential and commercial sizes) are generally classified as either manually read meters or remotely read meters via radio technology.
The largest geographic market in which the Company operates is North America, primarily the United States. Utility water meters (both residential and commercial sizes) are generally classified as either manually read meters or remotely read meters via radio technology. A manually read meter consists of a water meter and a register that provides a visual totalized meter reading.
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A manually read meter consists of a water meter and a register that provides a visual totalized meter reading.
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The Badger Meter offerings, marketed as BlueEdge™, are comprised of a suite of tailorable solutions that connect water management technology, software, and support services to deliver insights enabling the proactive management of water across the water cycle.
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Customers rely on the Company for application-specific solutions that deliver accurate, timely and dependable flow data and control essential for product quality, cost control, safer operations, regulatory compliance and more sustainable operations.
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This support is becoming increasingly critical as customers strive to extract maximum value from their technology investments while managing through workforce demographic changes, among other operating challenges.
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The Company faces competition for both its utility water and flow instrumentation product lines. Major competitors for utility water meters include Roper Technologies, Inc. (“Neptune”) and Xylem, Inc. (“Sensus”). Together with Badger Meter, it is estimated that these companies sell roughly 85% of the water meters in the North American market.
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Competitors in the utility water product line vary based on specific hardware, communication and/or software elements. Across the Company's BlueEdge suite of offerings, organizations such as Sensus (Xylem Inc.), Neptune (Roper Technologies), Hach (Veralto), Itron, Aclara (Hubbel), Mueller Water, Kamstrup and others have select elements of competitive hardware, communication and/or software solutions.
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The remaining market share is comprised of competitors such as Master Meter, Inc., Mueller Water Products, Inc., Kamstrup A/S and Diehl Metering GmbH depending on the metering technology. The Company’s primary competitors for utility water radio products in North America are Hubbel, Inc. (Aclara Technologies), Itron, Inc., Neptune and Sensus.
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We strive to deliver people practices that attract, develop, engage and retain the best talent while fostering an environment that encourages every employee to contribute to the Company's vision in a meaningful and positive way. The Company and its subsidiaries employed 2,210 persons at December 31, 2024.
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The Company’s primary competitors for water quality monitoring solutions vary depending on the products and offerings. Traditional water quality monitoring relies on reagents or test kits, along with lab samples with waiting time for results. The number and scale of competition can be extensive. The Company’s online, real-time water quality monitoring capabilities generally compete with smaller, specialized firms.
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Officers are elected annually at the first meeting of the Board of Directors (the "Board") held after each annual meeting of the shareholders. Each officer holds office until his or her successor has been elected or until his or her death, resignation or removal.
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Stuyvenberg Vice President — Software and Water Quality 41 Daniel R. Weltzien Vice President — Controller 45 There are no family relationships between any of the executive officers. Officers are elected annually at the first meeting of the Board of Directors (the "Board") held after each annual meeting of the shareholders.
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Stoll has served as Vice President - Sales and Marketing for more than five years. Mr. Stuyvenberg was elected Vice President – Water Quality in January 2022, Vice President - Software and Water Quality in January 2023 and Vice President - SaaS, Global Commercial and International Utility in September 2024. Mr.
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She joined Badger Meter in July 2018 as Director, Investor Relations and Corporate Strategy. In her role she also oversees the Company’s ESG (Environmental, Social & Governance) initiatives. Mr. Begale has served as Vice President - Engineering for more than five years. Mr. Bergum has served as Vice President - General Counsel and Secretary for more than five years. Ms.
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Kristensen was elected Vice President - Flow Instrumentation and International Utility in December 2022. Prior to joining the Company, Mr. Kristensen served as Group CEO for Agramkow Fluid Systems from October 2020 to November 2022. Additionally, Mr.
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Kristensen spent 20 years with Kamstrup, holding various international management roles, including General Manager for Kamstrup Water Metering, LLC and Senior Vice President of North America. Ms. Stoll has served as Vice President - Sales and Marketing for more than five years. Mr.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

22 edited+12 added−2 removed51 unchanged
Biggest changeIn foreign countries where we operate, a risk exists that our employees, third party partners or agents could engage in business practices prohibited by applicable laws and regulations, such as the FCPA. Such anti-corruption laws generally prohibit companies from making improper payments to foreign officials, require companies to keep accurate books and records, and maintain appropriate internal controls.
Biggest changeForeign Corrupt Practices Act (FCPA) or other anti-corruption laws, trade sanctions and sanctioned parties restrictions could adversely affect our business. In foreign countries where we operate, a risk exists that our employees, third party partners or agents could engage in business practices prohibited by applicable laws and regulations, such as the FCPA.
The competitive environment is also affected by the movement toward radio technologies and away from manually read meters, the demand for replacement units and, to some extent, such things as global economic conditions, the timing and size of governmental programs such as stimulus programs, the ability of municipal water utility customers to authorize and finance purchases of our products, our ability to obtain financing, housing starts in the United States, and overall economic activity.
The competitive environment is also affected by the movement toward radio technologies and away from manually read meters, the demand for replacement units and, to some extent, such things as global economic conditions, the timing and size of governmental 13 programs such as stimulus programs, the ability of municipal water utility customers to authorize and finance purchases of our products, our ability to obtain financing, housing starts in the United States, and overall economic activity.
In some cases, we are dependent on third-party technologies and service providers for which there is no certainty of 15 uninterrupted availability or through which hackers could gain access to sensitive and/or personal information. These potential disruptions and cyber-attacks could negatively affect revenues, costs, customer demand, system availability and our reputation.
In some cases, we are dependent on third-party technologies and service providers for which there is no certainty of uninterrupted availability or through which hackers could gain access to sensitive and/or personal information. These potential disruptions and cyber-attacks could negatively affect revenues, costs, customer demand, system availability and our reputation.
The extent to which future pandemics impact our business operations in future periods will depend on multiple factors that cannot be accurately predicated at this time, such as the duration and scope of any pandemic, the extent and effectiveness of containment actions, the disruption caused by such actions, and the impact of these and other factors on our employees, suppliers and customers.
The extent to which future pandemics impact our business operations in future periods will depend on multiple factors that cannot be accurately predicated at this time, such as the duration and scope of any pandemic, the extent and effectiveness of 12 containment actions, the disruption caused by such actions, and the impact of these and other factors on our employees, suppliers and customers.
A failure of our software products to operate as intended and in a seamless fashion with other products or a failure or breach of a cloud network could materially and adversely affect our results of operations, financial position and cash flows. Our role as a prime contractor brings certain risks that could have a material adverse effect to our business.
A failure of our software products to operate as intended and in a seamless fashion with other products or a failure or breach of a cloud network could materially and adversely affect our results of operations, financial position and cash flows. Our role as a prime contractor brings certain risks that could have a material adverse effect on our business.
We are not currently aware of any emerging standards, technologies or 11 new products that could render our existing products obsolete in the near term. Our radios operate on networks which are changing as part of the natural evolution of technology.
We are not currently aware of any emerging standards, technologies or new products that could render our existing products obsolete in the near term. Our radios operate on networks which are changing as part of the natural evolution of technology.
If we are not able to respond to and manage the impact of such events effectively, we could experience a material adverse effect on our business, results of operations and overall financial performance. Economic conditions could cause a material adverse impact on our sales and operating results.
If we are not able to respond to and manage the impact of such events effectively, we could experience a material adverse effect on our business, results of operations and overall financial performance. Economic conditions could cause a material adverse impact on our sales and results of operations.
ITEM 1A. R ISK FACTORS Shareholders, potential investors and other readers are urged to consider the significant business risks described below in addition to the other information set forth or incorporated by reference in this 2023 Annual Report on Form 10-K, including the “Special Note Regarding Forward Looking Statements” at the front of this 2023 Annual Report on Form 10-K.
ITEM 1A. R ISK FACTORS Shareholders, potential investors and other readers are urged to consider the significant business risks described below in addition to the other information set forth or incorporated by reference in this 2024 Annual Report on Form 10-K, including the “Special Note Regarding Forward Looking Statements” at the front of this 2024 Annual Report on Form 10-K.
We are subject to a variety of laws in various countries and markets, such as those regulating lead or other material content in certain of our products, the handling, recycling and disposal of certain electronic and other materials, the use and/or licensing of radio 14 frequencies necessary for radio products, data privacy and protection, as well as customs and trade practices.
We are subject to a variety of laws in various countries and markets, such as those regulating lead or other material content in certain of our products, the handling, recycling and disposal of certain electronic and other materials, the use and/or licensing of radio frequencies necessary for radio products, cybersecurity, data privacy and protection, as well as customs and trade practices.
In recent years, there has been an increased focus from stakeholders on ESG matters, including GHG emissions and climate-related risks, renewable energy, water stewardship, waste management, diversity, equity and inclusion, responsible sourcing and supply chain, human rights and social responsibility. Given our commitment to certain ESG principles, we actively manage these issues and have established certain goals, commitments and targets.
In recent years, there has been an increased focus from stakeholders on sustainability matters, including GHG emissions and climate-related risks, renewable energy, water stewardship, waste management, diversity and inclusion, responsible sourcing and supply chain, human rights and social responsibility. Given our commitment to certain sustainability principles, we actively manage these issues and have established certain goals, commitments and targets.
The unpredictable nature of weather conditions and climate change therefore may result in volatility for certain portions of our business, as well as the operations of certain of our customers and suppliers. Failure to meet ESG expectations or standards, or to achieve our ESG goals, could adversely affect our business, results of operations and overall financial performance.
The unpredictable 14 nature of weather conditions and climate change therefore may result in volatility for certain portions of our business, as well as the operations of certain of our customers and suppliers. Failure to meet sustainability expectations or standards, or to achieve our sustainability goals, could adversely affect our business, results of operations and overall financial performance.
Therefore, a downturn in general economic conditions, as well as in the municipal water market, rising interest rates, delays in the timing or amounts of possible annual federal funding, government budget cuts or partial shutdowns of governmental operations, or the availability of funds to municipalities could result in a reduction in demand for our products and services and could have a material adverse effect on our business, results of operations and overall financial performance. 13 Geopolitical crisis, including terrorism or pandemics, could adversely affect our business.
Therefore, a downturn in general economic conditions, as well as in the municipal water market, rising interest rates, delays in the timing or amounts of possible annual federal funding, government budget cuts or partial shutdowns of governmental operations, or the availability of funds to municipalities could result in a reduction in demand for our products and services and could have a material adverse effect on our business, results of operations and overall financial performance.
Further, supply chain disruptions and challenges may be caused by a number of factors affecting our suppliers, including, but not limited to, capacity constraints, port congestion, labor disputes or unrest, labor shortages and costs, economic downturns, availability of credit, a high interest rate environment, impaired financial condition, sanctions/tariffs, energy inflation/availability and geopolitical risks (such as the current conflict between Russia and Ukraine and in the Middle East).
Further, supply chain disruptions and challenges may be caused by a number of factors affecting our suppliers, including, but not limited to, capacity constraints, port congestion, labor disputes or unrest, labor shortages and costs, economic downturns, availability of credit, a high interest rate environment, impaired financial condition, tariffs or other trade barriers, energy inflation/availability and geopolitical risks.
Our policies mandate strict compliance with such laws and we devote resources to ensure compliance. However, we operate in some parts of the world that have experienced governmental corruption, and, in certain circumstances, local customs and practice might not be consistent with the requirements of anti-corruption laws.
However, we operate in some parts of the world that have experienced governmental corruption, and, in certain circumstances, local customs and practice might not be consistent with the requirements of anti-corruption laws.
A successful claim brought against us with respect to a defective product in excess of available insurance coverage, if any, or a requirement to participate in a major product recall, could have a material adverse effect on our business, results of operations or financial condition.
A successful claim brought against us with respect to a defective product in excess of available insurance coverage, if any, or a requirement to participate in a major product recall, could have a material adverse effect on our business, results of operations or financial condition. 11 If our software products do not operate as intended, our business could be materially and adversely affected.
Certain new technologies present new and significant cybersecurity safety risks that must be analyzed and addressed before implementation. If we fail to assess and identify cybersecurity risks associated with acquisitions and new initiatives, we may become increasingly vulnerable to such risks. Failure to successfully identify, complete and integrate acquired businesses or products could adversely affect our operations.
Certain new technologies present new and significant cybersecurity safety risks that must be analyzed and addressed before implementation. If we fail to assess and identify cybersecurity risks associated with acquisitions and new initiatives, we may become increasingly vulnerable to such risks.
We can neither predict these new risk factors with certainty nor assess the precise impact, if any, on our business, or the extent to which any factor, or combination of factors, may adversely impact our results of operations.
We can neither predict these new risk factors with certainty nor assess the precise impact, if any, on our business, or the extent to which any factor, or combination of factors, may adversely impact our financial condition or results of operations. PRODUCTS, TECHNOLOGY AND SERVICES The inability to develop technologically advanced products and solutions could harm our future success.
Such litigation and misappropriation of our proprietary information could hinder our ability to market and sell products and services and our results of operations, financial position and cash flows could be materially and adversely affected. 12 BUSINESS CONDITIONS The inability to obtain adequate supplies of raw materials and component parts at reasonable prices could decrease our profit margins and negatively impact timely delivery to customers and could have a material adverse effect on our business, results of operations and financial condition.
BUSINESS CONDITIONS The inability to obtain adequate supplies of raw materials and component parts at reasonable prices could decrease our profit margins and negatively impact timely delivery to customers and could have a material adverse effect on our business, results of operations and financial condition.
If we complete any such acquisitions, they may require integration into our existing business with respect to administrative, financial, legal, sales, marketing, manufacturing and other functions to realize these anticipated benefits.
There can be no assurance that we will identify or complete transactions with suitable acquisition candidates in the future. If we complete any such acquisitions, they may require integration into our existing business with respect to administrative, financial, legal, sales, marketing, manufacturing and other functions to realize these anticipated benefits.
If our software products do not operate as intended, our business could be materially and adversely affected. We sell software products, including cloud-based solutions, that may contain unexpected design defects or may encounter unexpected complications when used with other technologies utilized by the customer.
We sell software products, including cloud-based solutions, that may contain unexpected design defects or may encounter unexpected complications when used with other technologies utilized by the customer.
For our flow instrumentation products, the competitive environment is affected by the general economic health of various industrial sectors particularly in the United States and Europe.
For our flow instrumentation products, the competitive environment is affected by the general economic health of various industrial sectors particularly in the United States and Europe. GOVERNMENT REGULATION Violations or alleged violations of laws that impose requirements for the conduct of the Company’s overseas operations, including the U.S.
As part of our business strategy, we continue to evaluate and may pursue selected business or product acquisition opportunities that we believe may provide us with certain operating and financial benefits. There can be no assurance that we will identify or complete transactions with suitable acquisition candidates in the future.
Failure to successfully identify, complete and integrate acquired businesses or products could adversely affect our operations. 15 As part of our business strategy, we continue to evaluate and may pursue selected business or product acquisition opportunities that we believe may provide us with certain operating and financial benefits.
Removed
While there is much uncertainty, we do analyze the risks we face, perform a probability assessment of their impacts and attempt to soften their potential impact when and if possible. PRODUCTS, TECHNOLOGY AND SERVICES The inability to develop technologically advanced products and solutions could harm our future success.
Added
Such litigation and misappropriation of our proprietary information could hinder our ability to market and sell products and services and our results of operations, financial position and cash flows could be materially and adversely affected.
Removed
GOVERNMENT REGULATION Violations or alleged violations of laws that impose requirements for the conduct of the Company’s overseas operations, including the Foreign Corrupt Practices Act (FCPA) or other anti-corruption laws, trade sanctions and sanctioned parties restrictions could adversely affect our business.
Added
The imposition of significant tariffs or other trade barriers by the United States, or other foreign nations, may harm our sales, costs and results of operations. Our operations rely on favorable trade relations between the U.S. and those foreign countries in which we and our customers and our suppliers have operations.
Added
Our ability to successfully operate our business is increasingly affected by international trade barriers, including governmental policies on tariffs, taxes, import or export licensing requirements and trade sanctions. If significant tariffs or other restrictions are placed on imports by the United States, and related retaliatory measures are taken by impacted countries, our sales and results of operations may be harmed.
Added
Further, increased tariffs on imports into the United States, including those from China, Mexico, Canada and Europe could harm our sales and results of operations.
Added
These tariffs are likely to increase the cost of raw materials essential to our manufacturing processes, particularly within our manufacturing facilities in Mexico and Europe, which could have an adverse impact on our results of operations. Geopolitical crisis, including terrorism or pandemics, could adversely affect our business.
Added
Such anti-corruption laws generally prohibit companies from making improper payments to foreign officials, require companies to keep accurate books and records, and maintain appropriate internal controls. Our policies mandate strict compliance with such laws and we devote resources to ensure compliance.
Added
The development and adoption of artificial intelligence technologies intensifies these risks and may give rise to new tools for unauthorized parties to target our systems.
Added
We use artificial intelligence occasionally in our business and in our products, and challenges with properly managing its use could result in reputational harm, competitive disadvantages, and adverse impacts to our results of operations, while also exposing us to potential legal or regulatory actions that could harm our business.
Added
We may incorporate artificial intelligence technologies into our products, services and operations. We may also leverage artificial intelligence, including generative artificial intelligence and machine learning, in our product development, operations and software programming to drive innovation and enhance efficiency.
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We face risks of competitive disadvantage if our competitors more effectively use artificial intelligence to drive internal efficiencies or create new or enhanced products or services that we are unable to compete against.
Added
The development and deployment of artificial intelligence technologies carries inherent risks, and there can be no assurance that the usage of artificial intelligence will enhance our products or services or yield the anticipated improvements in innovation or efficiency. In addition, there is potential for the misuse of artificial intelligence and machine learning-technology by our personnel while carrying out their responsibilities.
Added
The rapid evolution of artificial intelligence, including the regulation of artificial intelligence by government or other regulatory agencies, will require significant resources to develop, test and maintain our platforms, offerings, services, and features. This investment will be essential to ensure that we implement artificial intelligence ethically while minimizing any unintended harmful impacts.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+2 added−1 removed14 unchanged
Biggest changeThird Party Risk Management : The Company maintains a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers and other external users of the Company’s systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third party systems.
Biggest changeIn addition to this response planning framework, among other mitigating actions the Company maintains an insurance policy for cybersecurity liability that provides not only coverage for breaches, but also loss prevention services and claims advisors. 16 Third Party Risk Management : The Company maintains a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers and other external users of the Company’s systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third party systems.
The Board receives annual cybersecurity updates from senior management, and the Audit and Compliance Committee provides a deeper level of oversight through an annual review to management’s approach to cybersecurity risk with the Director – Information Systems.
The Board receives annual cybersecurity updates from senior management, and the Audit and Compliance Committee provides a deeper level of oversight through an annual review of management’s approach to cybersecurity risk with the Director – Information Systems.
Technical Safeguards : The Company deploys technical safeguards that are designed to protect the Company’s information systems from cybersecurity threats, such as machine learning intelligence platforms with an array of technologies, extensive encryption, firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated 16 and improved through vulnerability assessments and cybersecurity threat intelligence.
Technical Safeguards : The Company deploys technical safeguards that are designed to protect the Company’s information systems from cybersecurity threats, such as machine learning intelligence platforms with an array of technologies, extensive encryption, firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence.
“Risk Factors” of this 2023 Annual Report on Form 10-K for further information about the Company's overall ERM process. Risk Management and Strategy Cybersecurity is a critical component of the Company’s ERM program.
“Risk Factors” of this 2024 Annual Report on Form 10-K for further information about the Company's overall ERM process. Risk Management and Strategy Cybersecurity is a critical component of the Company’s ERM program.
IT Management and General Counsel are explicitly informed by the internal security team and Managed Security Service Provider (MSSP) of incidents and periodically updated on the investigation progress and impact of the incident. Management also receives explicit monthly summaries on all incidents. Major incidents are reported to company management and summarized at an annual management review meeting.
The SVP-CFO, VP-Controller and VP-General Counsel are explicitly informed by the Director of Information Systems, internal security team and Managed Security Service Provider (MSSP) of incidents and periodically updated on the investigation progress and impact of the incident. Management also receives explicit monthly summaries on all incidents. Material incidents are summarized at an annual management review meeting.
The Director – Information Systems, in coordination with management, works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with the Company’s incident response plans. Management is actively involved in the incident response and risk management process (mitigation, transference, and acceptance).
The Director – Information Systems, as head of cybersecurity and in coordination with management, works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with the Company’s incident response plans.
Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected the Company, including its business strategy, results of operations or financial condition. Additional information on cybersecurity risks we face is discussed in Part I, Item 1A “Risk Factors” under the heading “General,” which should be read in conjunction with the foregoing information.
Additional information on cybersecurity risks we face is discussed in Part I, Item 1A “Risk Factors” under the heading “General,” which should be read in conjunction with the foregoing information.
Internal IT Management has the following certifications: Certified Information Systems Security Professional (CISSP), Certified Information Systems Auditor (CISA), GIAC/SANS Certified Forensic Examiner, Magnet Certified Forensic Examiner, BBA Information Technology Emphasis Security, and CompTIA Security+. While the Company has experienced, and expects to continue to experience, cyber threats, no material security breaches of third-party information have occurred.
Internal IS Management has the following certifications: Certified Information Systems Security Professional (CISSP), Certified Information Systems Auditor (CISA), GIAC/SANS Certified Forensic Examiner, Cloud Forensics and Incident Responder (GCFR), Certified Advanced Smartphone Forensics (GASF), Certified Cloud Security Professional (CCSP), Magnet Certified Forensic Examiner, BBA Information Technology Emphasis Security, and CompTIA Security+.
Removed
In addition to this response planning framework, among other mitigating actions the Company maintains an insurance policy for cybersecurity liability that provides not only coverage for breaches, but also loss prevention services and claims advisors.
Added
Management is actively involved in the incident response and risk management process (mitigation, transference, and acceptance). Additionally, Company management meets monthly as part of the cybersecurity steering committee to direct proper activities to mitigate any risks identified.
Added
While the Company has experienced, and expects to continue to experience, cyber threats, no material security breaches of third-party information have occurred. Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected the Company, including its business strategy, results of operations or financial condition .

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. P ROPERTIES The Company has sales, development, distribution and manufacturing facilities and customer service offices as noted in Part I, Item 1 of this 2023 Annual Report on Form 10-K under the heading “Foreign Operations and Export Sales.” The principal facilities 17 utilized by the Company at December 31, 2023 are listed below.
Biggest changeITEM 2. P ROPERTIES The Company has sales, development, distribution and manufacturing facilities and customer service offices as noted in Part I, Item 1 of this 2024 Annual Report on Form 10-K under the heading “Foreign Operations and Export Sales.” The principal facilities utilized by the Company at December 31, 2024 are listed below.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeInformation about the Company's compliance with environmental regulations is included in Part I, Item 1 of this 2023 Annual Report on Form 10-K under the heading “Environmental Protection.” ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. 18 PAR T II
Biggest changeInformation about the Company's compliance with environmental regulations is included in Part I, Item 1 of this 2024 Annual Report on Form 10-K under the heading “Environmental Protection.” ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. 18 PAR T II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+0 added−0 removed2 unchanged
Biggest changeReturn % 33.45% 46.39% 14.12% 3.21% 42.56% Cumulative $ $ 100.00 $ 133.45 $ 195.35 $ 222.95 $ 230.10 $ 328.04 Russell 2000 Index Return % 25.52% 19.96% 14.82% -20.44% 16.93% Cumulative $ $ 100.00 $ 125.52 $ 150.58 $ 172.90 $ 137.56 $ 160.85 Peer Group Return % 39.76% 12.49% 21.01% -19.26% 33.38% Cumulative $ $ 100.00 $ 139.76 $ 157.21 $ 190.25 $ 153.61 $ 204.89 19 The peer group consists of Badger Meter, Inc.
Biggest changeReturn % 46.39% 14.12% 3.21% 42.56% 38.26% Cumulative $ $ 100.00 $ 146.39 $ 167.07 $ 172.43 $ 245.82 $ 339.87 Russell 2000 Index Return % 19.96% 14.82% -20.44% 16.93% 11.54% Cumulative $ $ 100.00 $ 119.96 $ 137.74 $ 109.59 $ 128.14 $ 142.93 New Peer Group Return % 11.08% 22.73% -22.26% 31.75% 22.83% Cumulative $ $ 100.00 $ 111.08 $ 136.33 $ 105.99 $ 139.64 $ 171.52 Old Peer Group Return % 10.24% 21.62% -21.21% 32.36% 19.82% Cumulative $ $ 100.00 $ 110.24 $ 134.07 $ 105.64 $ 139.82 $ 167.53 19 The peer group consists of Badger Meter, Inc.
The following graph compares on a cumulative basis the yearly percentage change since January 1, 2019 in (a) the total shareholder return on the Company’s Common Stock with (b) the total return on the Russell 2000® Index, and (c) the total return of the peer group made up of 17 companies, including the Company, in similar industries, employment markets and with similar market capitalization.
The following graph compares on a cumulative basis the yearly percentage change since January 1, 2020 in (a) the total shareholder return on the Company’s Common Stock with (b) the total return on the Russell 2000® Index, and (c) the total return of the peer group made up of 17 companies, including the Company, in similar industries, employment markets and with similar market capitalization.
The Russell 2000® Index is a trademark of the Frank Russell Company, and is used herein for comparative purposes in accordance with Securities and Exchange Commission regulations. The graph assumes $100 invested on December 31, 2018. It further assumes the reinvestment of dividends.
The Russell 2000® Index is a trademark of the Frank Russell Company, and is used herein for comparative purposes in accordance with Securities and Exchange Commission regulations. The graph assumes $100 invested on December 31, 2019. It further assumes the reinvestment of dividends.
Total number of shares purchased Average price paid per share Total number of shares purchased as part of a publicly announced program Maximum number of shares that may yet be purchased under the program October 1, 2023 - October 31, 2023 - $ - - 200,000 November 1, 2023 - November 30, 2023 - $ - - 200,000 December 1, 2023 - December 31, 2023 - $ - - 200,000 Total as of December 31, 2023 - - 200,000 20 ITEM 6.
Total number of shares purchased Average price paid per share Total number of shares purchased as part of a publicly announced program Maximum number of shares that may yet be purchased under the program October 1, 2024 - October 31, 2024 - $ - - 200,000 November 1, 2024 - November 30, 2024 - $ - - 200,000 December 1, 2024 - December 31, 2024 - $ - - 200,000 Total as of December 31, 2024 - - 200,000 20 ITEM 6.
The following table provides information about the Company's purchases under this repurchase program during the quarter ended December 31, 2023 of equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act.
The following table provides information about the Company's purchases under this repurchase program during the quarter ended December 31, 2024 of equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act.
The returns of each component company in the peer groups have been weighted based on such company's relative market capitalization. December 31 2018 2019 2020 2021 2022 2023 Badger Meter, Inc.
The returns of each component company in the peer groups have been weighted based on such company's relative market capitalization. December 31 2018 2020 2021 2022 2023 2024 Badger Meter, Inc.
(BMI), Brady Corporation (BRC), CIRCOR International, Inc. (CIR), CTS Corporation (CTS), Enerpac Tool Group Corp. (EPAC), ESCO Technologies Inc. (ESE), The Gorman-Rupp Company (GRC), Helios Technologies, Inc. (HLIO), Itron, Inc. (ITRI), Kadant Inc. (KAI), Lindsay Corporation (LNN), Mueller Water Products, Inc. (MWA), Douglas Dynamics, Inc. (PLOW), Strattec Security Corporation (STRT), Standex International Corporation (SXI), Watts Water Technologies, Inc.
(BMI), Brady Corporation (BRC), CTS Corporation (CTS), Enerpac Tool Group Corp. (EPAC), ESCO Technologies Inc. (ESE), The Gorman-Rupp Company (GRC), Helios Technologies, Inc. (HLIO), Itron, Inc. (ITRI), Kadant Inc. (KAI), Lindsay Corporation (LNN), Mirion Technologies, Inc. (MIR), Mueller Water Products, Inc. (MWA), Douglas Dynamics, Inc. (PLOW), Strattec Security Corporation (STRT), Standex International Corporation (SXI), Watts Water Technologies, Inc.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED ST OCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s Common Stock is traded on the New York Stock Exchange (NYSE Trading Symbol: BMI). At January 31, 2024, there were approximately 560 holders of the Company’s Common Stock.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED ST OCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s Common Stock is traded on the New York Stock Exchange (NYSE Trading Symbol: BMI). At January 31, 2025, there were approximately 558 holders of the Company’s Common Stock.
(WTS) and Zurn Water Solutions Corporation (ZWS). In February 2023, the Board authorized the repurchase of up to 200,000 shares of the Company’s Common Stock through February 2026.
(WTS) and Zurn Water Solutions Corporation (ZWS). The Company removed CIRCOR International (CIR) from the peer group due to acquisition and deregistration and subsequently added Mirion Technologies, Inc. (MIR) as a replacement to the peer group. In February 2023, the Board authorized the repurchase of up to 200,000 shares of the Company’s Common Stock through February 2026.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

49 edited+5 added−3 removed27 unchanged
Biggest changeOperating cash flow was more than adequate to fund acquisitions ($17.1 million, net of cash acquired), capital expenditures of $12.0 million and dividends of $29.1 million in 2023. Cash provided by operations in 2022 was $82.5 million compared to $87.5 million in 2021. The decrease from 2021 was driven primarily by increased operating earnings offset by increased working capital requirements.
Biggest changeCash provided by operations in 2023 was $110.1 million compared to $82.5 million in 2022. The increase from 2022 was driven primarily by increased operating earnings and working capital management. Operating cash flow was more than adequate to fund acquisitions ($17.1 million, net of cash acquired), capital expenditures of $12.0 million and dividends of $29.1 million in 2023.
The Company also assumed $1.9 million of payables, $2.0 million of deferred income taxes and $0.4 million of other current and long-term liabilities as part of the acquisition. 21 As of December 31, 2023, the Company had completed its analysis for estimating the fair value of the assets acquired with no additional adjustments.
The Company also assumed $1.9 million of payables, $2.0 million of deferred income taxes and $0.4 million of other current and long-term liabilities as part of the acquisition. As of December 31, 2023, the Company had completed its analysis for estimating the fair value of the assets acquired with no additional adjustments.
In addition, changes in governmental laws and regulations, particularly laws dealing with the content or handling of materials, customs or trade practices, may impact the results of operations. These factors are largely beyond the Company's control and depend on the economic condition and regulatory environment of the geographic region of the Company's operations.
In addition, changes in governmental laws and regulations, particularly laws dealing with the content or handling of materials, customs, tariffs or trade practices, may impact the results of operations. These factors are largely beyond the Company's control and depend on the economic condition and regulatory environment of the geographic region of the Company's operations.
The increase in utility water sales reflected strong growth across the Company's broad smart water solutions and the continued robust adoption of cellular AMI solutions, specifically ORION Cellular endpoints and BEACON SaaS revenues, as well as increased E-Series Ultrasonic meter volumes.
The increase in utility water sales reflected strong growth across the Company's broad suite of smart water solutions and the continued robust adoption of cellular AMI solutions, specifically ORION Cellular endpoints and BEACON SaaS revenues, as well as increased E-Series Ultrasonic meter volumes.
Some customers measure fluids to identify leaks and/or misappropriation for cost control or add measurement points to help automate manufacturing. Other customers employ measurement to comply with government mandates and laws including those associated with process and discharge water quality monitoring.
Some customers measure fluids to identify leaks and/or misappropriation for cost control or add measurement points to automate manufacturing. Other customers employ measurement to comply with government mandates and laws including those associated with process and discharge water quality monitoring.
As a leading provider of water quality and pressure management monitoring solutions, we are able to meet these needs and enhance the scope of actionable data for customers to help measure, conserve and protect water.
As a leading provider of water quality and pressure management monitoring solutions, we are able to meet these needs and enhance the scope of actionable data for customers to measure, conserve and protect water.
With strong relationships with telecommunication providers such as AT&T and Verizon (among others), we stay abreast of emerging cellular technology changes to provide the premier infrastructure-free AMI solution.
Our strong relationships with telecommunication providers such as AT&T and Verizon (among others), we stay abreast of emerging cellular technology changes to provide the premier infrastructure-free AMI solution.
These estimates are based on our best judgment about current and future conditions, but actual results could differ from those estimates. Refer to Note 1 "Basis of Presentation and Accounting Policies" in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 2023 Annual Report on Form 10-K for information regarding our significant accounting policies.
These estimates are based on our best judgment about current and future conditions, but actual results could differ from those estimates. Refer to Note 1 "Basis of Presentation and Accounting Policies" in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 2024 Annual Report on Form 10-K for information regarding our significant accounting policies.
The Company typically does not hold or issue derivative instruments and has a policy specifically prohibiting the use of such instruments for trading purposes. 25
The Company typically does not hold or issue derivative instruments and has a policy specifically prohibiting the use of such instruments for trading purposes.
See the “Special Note Regarding Forward Looking Statements” at the front of this Annual Report on Form 10-K and Part I, Item 1A “Risk Factors” in this Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of risks and uncertainties that could impact the Company's financial performance and results of operations.
See the “Special Note Regarding Forward Looking Statements” at the front of this Annual Report on Form 10-K and Part I, Item 1A “Risk Factors” in this Annual Report on Form 10-K for the year ended December 31, 2024 for a discussion of risks and uncertainties that could impact the Company's financial performance and results of operations.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Long Term Business Trends Across the globe significant infrastructure investments needs, aging workforce, increasing regulations and a focus on climate-change and sustainability are driving companies and utilities to better manage critical resources like water.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Long Term Business Trends Significant infrastructure investment needs, aging workforce, increasing regulations and a focus on climate-change and sustainability are driving companies and utilities to better manage critical resources like water across the globe.
CONTRACTUAL OBLIGATIONS The Company's significant contractual obligations as of December 31, 2023 are discussed in Note 12 “Leases” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 2023 Annual Report on Form 10-K. There are no material undisclosed guarantees.
CONTRACTUAL OBLIGATIONS The Company's significant contractual obligations as of December 31, 2024 are discussed in Note 12 “Leases” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 2024 Annual Report on Form 10-K. There are no material undisclosed guarantees.
As of December 31, 2023 the Company had no additional material purchase obligations other than those created in the ordinary course of business related to inventory and property, plant and equipment, which generally have terms of less than 90 days.
As of December 31, 2024 the Company had no additional material purchase obligations other than those created in the ordinary course of business related to inventory and property, plant and equipment, which generally have terms of less than 90 days.
Multiple factors can have an impact on future cash flows of a reporting unit, as such, it is possible that our estimates in evaluating impairment could differ from future results. 24 We completed our impairment analysis for goodwill and intangible assets in the fourth quarter for the year ended December 31, 2023.
Multiple factors can have an impact on future cash flows of a reporting unit, as such, it is possible that our estimates in evaluating impairment could differ from future results. We completed our impairment analysis for goodwill and intangible assets in the fourth quarter for the year ended December 31, 2024.
Specifically, AMI technology enables water utilities to capture readings from each meter at more frequent and variable intervals. There are more than 50,000 water utilities in the United States and the Company estimates that approximately one-third of their respective connections have converted to an AMI radio solution.
Specifically, AMI technology enables water utilities to capture readings from each meter at more frequent and variable intervals. There are more than 50,000 water utilities in the United States and the Company estimates that approximately 40% of their respective connections have converted to an AMI radio solution.
The Company believes that its operating cash flows, available borrowing capacity, and its ability to raise capital provide adequate resources to fund ongoing operating requirements, future capital expenditures and the development of new products. The Company had $154.4 million of unused credit lines available at December 31, 2023.
The Company believes that its operating cash flows, available borrowing capacity, and its ability to raise capital provide adequate resources to fund ongoing operating requirements, future capital expenditures and the development of new products. The Company had $154.1 million of unused credit lines available at December 31, 2024.
Together, our tailorable smart water solutions provide actionable information through data analytics derived from an interconnected and interoperable network of sensors and devices that help people and organizations efficiently use and conserve water. Badger Meter is well positioned to benefit from the adoption of smart water solutions.
Our BlueEdge tailorable smart water solutions provide actionable information through data analytics derived from an interconnected and interoperable network of sensors and devices that enable people and organizations to efficiently use and conserve water. Badger Meter is well positioned to benefit from the adoption of smart water solutions.
The Company establishes valuation allowances against certain deferred tax assets that are not likely to be realized. The Company recorded valuation allowances of $2.7 million as of December 31, 2023 and 2022. The valuation allowance relates primarily to foreign net operating loss carryforwards. Goodwill and Intangible Assets Goodwill and intangible assets arise through business acquisitions.
The Company establishes valuation allowances against certain deferred tax assets that are not likely to be realized. The Company recorded valuation allowances of $3.3 million and $2.7 24 million as of December 31, 2024 and 2023, respectively. The valuation allowance relates primarily to foreign net operating loss carryforwards. Goodwill and Intangible Assets Goodwill and intangible assets arise through business acquisitions.
Expenditures for compliance with environmental control provisions and regulations during 2023, 2022 and 2021 were not material.
Expenditures for compliance with environmental control provisions and regulations during 2024, 2023 and 2022 were not material.
While our warranty costs have historically been within calculated estimates, it is possible that future warranty costs could differ significantly from those estimates. At December 31, 2023 and 2022, our reserve for product warranties was $11.1 million and $9.6 million, respectively.
While our warranty costs have historically been within calculated estimates, it is possible that future warranty costs could differ significantly from those estimates. At December 31, 2024 and 2023, our reserve for product warranties was $16.7 million and $11.1 million, respectively.
The gross margin improvement was due to higher volumes and favorable sales mix. Selling, engineering and administration (“SEA”) expenses were $158.4 million or 22.5% of sales compared to $132.7 million or 23.5% of sales in the prior year.
The gross margin improvement was due to higher volumes and favorable product and customer sales mix. Selling, engineering and administration (“SEA”) expenses were $171.2 million or 20.7% of sales in 2024 compared to $158.4 million or 22.5% of sales in the prior year.
Sales of products into the global flow instrumentation end markets were $100.5 million, 7.2% higher than the prior year’s $93.8 million due to steady order demand across the water-focused end markets, offset by modest decline in de-emphasized general industrial markets. Net sales in 2022 increased $60.4 million, or 11.9%, to $565.6 million from $505.2 million in 2021.
Sales of products into the global flow instrumentation end markets were $100.5 million, 7.2% higher than the prior year’s $93.8 million due to steady order demand across the water-focused end markets, offset by modest decline in de-emphasized general industrial markets.
This acquisition is further described in Note 3 “Acquisitions” in the Notes to Consolidated Financial Statements. RESULTS OF OPERATIONS Net Sales Net sales in 2023 increased $138.0 million, or 24.4%, to $703.6 million from $565.6 million in 2022. Sales into the utility water market were $603.1 million, an increase of 27.8% over the prior year’s $471.8 million.
This acquisition is further described in Note 3 “Acquisitions” in the Notes to Consolidated Financial Statements. RESULTS OF OPERATIONS Net Sales Net sales in 2024 increased $123.0 million, or 17.5%, to $826.6 million from $703.6 million in 2023. Sales into the utility water market were $725.5 million, an increase of 20.3% over the prior year’s $603.1 million.
Receivables at December 31, 2023 were $83.5 million compared to $76.7 million at the end of 2022, an increase of $6.9 million due to increased sales, partially offset by improved days sales outstanding. The Company believes its receivables balance is fully collectible. Inventories at December 31, 2023 were $153.7 million compared to $119.9 million at the end of 2022.
Receivables at December 31, 2024 were $84.3 million compared to $83.5 million at the end of 2023, an increase of $0.8 million due to increased sales, offset by improved days sales outstanding. The Company believes its receivables balance is fully collectible. Inventories at December 31, 2024 were $143.4 million compared to $153.7 million at the end of 2023.
Operating Earnings Operating earnings in 2023 were $118.0 million, or 16.8% of sales, compared to $87.3 million, or 15.4% of sales, in 2022. Gross margin dollars increased $56.5 million due to higher net sales, with gross margin as a percent of sales increasing from 38.9% in 2022 to 39.3% in 2023.
Operating Earnings Operating earnings in 2024 were $157.9 million, or 19.1% of sales, compared to $118.0 million, or 16.8% of sales, in 2023. Gross margin dollars increased $52.7 million due to higher net sales, with gross margin as a percent of sales increasing from 39.3% in 2023 to 39.8% in 2024.
The increase in SEA expenses year-over-year was due to higher personnel costs, including headcount, salaries and incentive compensation, as well as the acquisition of Syrinix and the associated intangible asset amortization. Operating earnings in 2022 were $87.3 million, or 15.4% of sales, compared to $78.7 million, or 15.6% of sales, in 2021.
The increase in SEA expenses year-over-year was due to higher personnel costs, including headcount, salaries and incentive compensation, as well as professional fees associated with acquisition-related activities. Operating earnings in 2023 were $118.0 million, or 16.8% of sales, compared to $87.3 million, or 15.4% of sales, in 2022.
On a diluted basis, earnings per share were $2.26 in 2022 compared to $2.08 in 2021. 22 LIQUIDITY AND CAPITAL RESOURCES The main sources of liquidity for the Company are cash from operations and borrowing capacity.
For 2023, the increase in operating earnings resulted in net earnings of $92.6 million compared to $66.5 million in 2022. On a diluted basis, earnings per share were $3.14 in 2023 compared to $2.26 in 2022. LIQUIDITY AND CAPITAL RESOURCES The main sources of liquidity for the Company are cash from operations and borrowing capacity.
The facility includes several features that enhance the Company’s financial flexibility including an increase feature, acquisition holiday and favorable financial covenants. The Company was in compliance with all covenants as of December 31, 2023.
The credit agreement includes a $150.0 million multi-currency line of credit that supports commercial paper (up to $100.0 million). The facility includes several features that enhance the Company’s financial flexibility including an increase feature, acquisition holiday and favorable financial covenants. The Company was in compliance with all covenants as of December 31, 2024.
Strategic mergers and acquisitions are another avenue for profitable sales growth. Acquisitions Effective January 1, 2023, the Company acquired 100% of the outstanding stock of Syrinix Ltd. ("Syrinix"), headquartered in the United Kingdom, a provider of high-frequency pressure monitoring and leak detection solutions. The total purchase consideration for Syrinix, net of cash acquired, was $17.1 million.
("Syrinix"), headquartered in the United Kingdom, a provider of high-frequency pressure monitoring and leak detection solutions. The total purchase consideration for Syrinix, net of cash acquired, was $17.1 million.
On a diluted basis, earnings per share were $3.14 in 2023 compared to $2.26 in 2022. For 2022, the increase in operating earnings resulted in net earnings of $66.5 million compared to $60.9 million in 2021.
Earnings and Diluted Earnings per Share For 2024, the increase in operating earnings resulted in net earnings of $124.9 million compared to $92.6 million in 2023. On a diluted basis, earnings per share were $4.23 in 2024 compared to $3.14 in 2023.
The following table shows the components of our PWC: December 31, 2023 December 31, 2022 $ PWC% $ PWC% (In thousands) Receivables $ 83,507 11.9% $ 76,651 13.5% Inventories 153,674 21.8% 119,856 21.2% Payables (81,807 ) -11.6% (71,440 ) -12.6% Primary Working Capital $ 155,374 22.1% $ 125,067 22.1% Overall, PWC increased $30.3 million compared to the previous year-end.
The following table shows the components of our PWC: December 31, 2024 December 31, 2023 $ PWC% $ PWC% (In thousands) Receivables $ 84,325 10.2% $ 83,507 11.9% Inventories 143,408 17.3% 153,674 21.8% Payables (55,659 ) -6.7% (81,807 ) -11.6% Primary Working Capital $ 172,074 20.8% $ 155,374 22.1% Overall, PWC increased $16.7 million compared to the previous year-end.
Raw materials used in the manufacture of the Company's products include purchased castings made of metal or alloys (such as brass, which uses copper as its main component, aluminum, stainless steel and cast iron), plastic resins, glass, microprocessors and other electronic subassemblies, and components. The Company does not hold significant amounts of precious metals.
The Company attempts to mitigate these risks by working closely with key suppliers, purchasing minimal amounts from alternative suppliers and by purchasing business interruption insurance where appropriate. 25 Raw materials used in the manufacture of the Company's products include purchased castings made of metal or alloys (such as brass, which uses copper as its main component, aluminum, stainless steel and cast iron), plastic resins, glass, microprocessors and other electronic subassemblies, and components.
Income Taxes There were no significant variations in the provision for income taxes as a percentage of earnings before income taxes which was 24.1%, 24.2% and 22.6% for 2023, 2022 and 2021, respectively. Earnings and Diluted Earnings per Share For 2023, the increase in operating earnings resulted in net earnings of $92.6 million compared to $66.5 million in 2022.
The increase in interest income in 2024, 2023 and 2022 was due to increased cash balances. 22 Income Taxes There were no significant variations in the provision for income taxes as a percentage of earnings before income taxes which was 25.0%, 24.1% and 24.2% for 2024, 2023 and 2022, respectively.
The Company also has long-term obligations related to its postretirement plans which are discussed in detail in Note 7 “Employee Benefit Plans” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 2023 Annual Report on Form 10-K. 23 Postretirement medical claims are paid by the Company as they are submitted, and they are anticipated to be $0.3 million in 2024 based on actuarial estimates; however, these amounts can vary significantly from year to year because the Company is self-insured.
The Company also has long-term obligations related to its postretirement plans which are discussed in detail in Note 7 “Employee Benefit Plans” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this 2024 Annual Report on Form 10-K.
Cash Provided by Operations Cash provided by operations in 2023 was $110.1 million compared to $82.5 million in 2022. The increase from 2022 was driven primarily by increased operating earnings and working capital management.
Cash Provided by Operations Cash provided by operations in 2024 was $155.0 million compared to $110.1 million in 2023. The increase from 2023 was driven primarily by increased operating earnings and working capital management. Operating cash flow was more than adequate to fund acquisitions of $3.0 million, capital expenditures of $12.8 million and dividends of $35.8 million in 2024.
For instance, the Company has made inroads into select regional markets outside the US such as the Middle East, UK and others with its tailorable smart water solutions portfolio. The Company is periodically asked to oversee and supervise field installation of its products and provide training and other services for certain customers.
For instance, the Company has made inroads into select regional markets outside the US such as the Middle East, UK and others with our BlueEdge offering. The Company sometimes oversees and supervises field installation of its products and provide training and other services for certain customers. Strategic mergers and acquisitions are another avenue for profitable sales growth.
Capital expenditures for fiscal 2024 are expected to be in the $14.0-18.0 million range, but could vary depending on timing of projects, growth opportunities and the amount of assets purchased. The Company had no short-term borrowings as of the end of 2023 or 2022. At the end of 2023, the Company was in a net cash position of $191.8 million.
Capital expenditures were $12.8 million, $12.0 million and $5.9 million in fiscal 2024, 2023 and 2022, respectively. Capital expenditures for fiscal 2025 are expected to be in the $15.0-19.0 million range, but could vary depending on timing of projects, growth opportunities and the amount of assets purchased.
The price and availability of raw materials is influenced by economic and industry conditions, including supply and demand factors that are difficult to anticipate and cannot be controlled by the Company. Commodity risk is managed by keeping abreast of economic conditions and locking in purchase prices for quantities that correspond to the Company's forecasted usage.
The Company does not hold significant amounts of precious metals. The price and availability of raw materials is influenced by economic and industry conditions, including supply and demand factors that are difficult to anticipate and cannot be controlled by the Company.
Accrued interest was approximately $0.1 million at both December 31, 2023 and 2022 and there were no penalties accrued in either year.
Interest is accrued on all unrecognized tax benefits and recorded as interest expense and penalties are recorded as operating expenses in the Consolidated Statements of Operations. Accrued interest was approximately $0.1 million at both December 31, 2024 and 2023 and there were no penalties accrued in either year.
SEA expenses were $132.7 million or 23.5% of sales compared to $126.8 million or 25.1% of sales in the prior year. The increase in SEA expenses year-over-year was due to higher personnel and incentive compensation costs, R&D investments, and travel.
Selling, engineering and administration (“SEA”) expenses were $158.4 million or 22.5% of sales compared to $132.7 million or 23.5% of sales in the prior year. The increase in SEA expenses year-over-year was due to higher personnel costs, including headcount, salaries and incentive compensation, as well as the acquisition of Syrinix and the associated intangible asset amortization.
Excluding the unfavorable impact of the strong US dollar between years, sales increased 13.2%. Sales into the utility water market were $471.8 million, an increase of 13.6% over the prior year’s $415.2 million.
Sales into the utility water market were $603.1 million, an increase of 27.8% over the prior year’s $471.8 million.
The Company annually reviews all uncertain tax positions, which represent tax positions taken that are subject to varied interpretations of applicable tax law. Interest is accrued on all unrecognized tax benefits and recorded as interest expense and penalties are recorded as operating expenses in the Consolidated Statements of Operations.
The Company annually reviews all uncertain tax positions, which represent tax positions taken that are subject to varied interpretations of applicable tax law. The gross accrued liability for unrecognized tax benefits was $1.2 million and $1.4 million, as of December 31, 2024 and 2023, respectively.
The Company's foreign currency risk relates to the sales of products to foreign customers and purchases of material from foreign vendors.
Commodity risk is managed by keeping abreast of economic conditions and locking in purchase prices for quantities that correspond to the Company's forecasted usage. The Company's foreign currency risk relates to the sales of products to foreign customers and purchases of material from foreign vendors.
The utility water sales growth reflected strong market demand and the continued adoption of cellular AMI solutions, specifically ORION Cellular endpoints and BEACON SaaS revenue, as well as increased meter volumes including E-Series Ultrasonic meters.
The increase in utility water sales reflected strong growth across the Company's broad suite of smart water solutions, led by cellular AMI adoption, including mechanical and ultrasonic meters, ORION Cellular endpoints, and BEACON SaaS revenues.
Interest Income, Net Net interest income was $4.0 million in 2023, $0.6 million in 2022 and less than $0.1 million in 2021. The increase in interest income in 2023 and 2022 was due to increased cash balances and increased interest rates. Changes in net interest income in 2021 was immaterial.
Interest Income, Net Net interest income was $8.6 million in 2024, $4.0 million in 2023 and $0.6 million in 2022.
The Company’s financial condition remains strong. On July 8, 2021, the Company entered into a new credit agreement, with a maturity date of July 8, 2026. The credit agreement includes a $150.0 million multi-currency line of credit that supports commercial paper (up to $100.0 million).
The Company had no short-term borrowings as of the end of 2024 or 2023. At the end of 2024, the Company was in a net cash position of $295.3 million. 23 The Company’s financial condition remains strong. On July 8, 2021, the Company entered into a new credit agreement, with a maturity date of July 8, 2026.
Gross margin dollars increased $14.5 million due to higher net sales, with gross margin as a percent of sales decreasing from 40.7% in 2021 to 38.9% in 2022. The year-over-year increase in inflationary cost pressures, coupled with production volatility caused by intermittent component delays, tempered gross margin percent in the current year.
Gross margin dollars increased $56.5 million due to higher net sales, with gross margin as a percent of sales increasing from 38.9% in 2022 to 39.3% in 2023. The gross margin improvement was due to higher volumes and favorable sales mix.
We define this metric as the sum of receivables and inventories less payables, divided by annual net sales.
We define this metric as the sum of receivables and inventories less payables, divided by the last 12 months net sales. As of December 31, 2024, the Company classified the short term portion of deferred revenue as other current liabilities on the Consolidated Balance Sheet, whereas previously short term deferred revenue was included in payables.
Inventory increased $33.8 million, due to component cost inflation, higher safety stock levels and increased sales activity. Payables at December 31, 2023 were $81.8 million compared to $71.4 million at the end of 2022. The increase was due to increased inventory balances and the timing of payments relative to year end.
Inventory decreased $10.2 million, due to effective inventory management. Payables at December 31, 2024 were $55.7 million compared to $81.8 million at the end of 2023. The decrease was due to the short term deferred revenue being classified in other current liabilities, lower inventory balance and the timing of payments relative to year end.
Removed
Sales of products into the global flow instrumentation end markets were $93.8 million, 4.3% greater than the prior year’s $89.9 million due strong order demand and modestly improving supply chain dynamics year-over-year. Excluding the unfavorable impact of the strong US dollar between years, flow instrumentation sales increased 7.1%.
Added
Acquisitions Effective January 30, 2025, the Company acquired 100% of the outstanding stock of Hadronex, Inc, a Delaware Corporation d/b/a SmartCover® Systems ("SmartCover"), headquartered in Escondido California. SmartCover is a provider of sewer line and lift station monitoring solutions.
Removed
Operating cash flow was more than adequate to fund capital expenditures of $5.9 million and dividends of $24.9 million. Capital expenditures were $12.0 million, $5.9 million and $6.7 million in fiscal 2023, 2022 and 2021, respectively.
Added
The purchase consideration, net of cash acquired, was approximately $185 million in cash. 21 Effective January 1, 2024, the Company acquired select remote water monitoring hardware and software, inclusive of the Telog® product line and Unity Remote Monitoring software as a service (the "Telog/Unity Assets"). The total purchase consideration for the Telog/Unity Assets was $3.0 million in cash.
Removed
The Company attempts to mitigate these risks by working closely with key suppliers, purchasing minimal amounts from alternative suppliers and by purchasing business interruption insurance where appropriate.
Added
As of December 31, 2024, the Company had completed its analysis for estimating the fair value of the assets acquired with no additional adjustments. This acquisition is further described in Note 3 “Acquisitions” in the Notes to Consolidated Financial Statements. Effective January 1, 2023, the Company acquired 100% of the outstanding stock of Syrinix Ltd.
Added
Sales of products into the global flow instrumentation end markets were $101.1 million, 0.6% higher than the prior year’s $100.5 million due to modest growth across the water-focused end markets, offset by slight declines in de-emphasized general industrial markets. Net sales in 2023 increased $138.0 million, or 24.4%, to $703.6 million from $565.6 million in 2022.
Added
Postretirement medical claims are paid by the Company as they are submitted, and they are anticipated to be $0.3 million in 2025 based on actuarial estimates; however, these amounts can vary significantly from year to year because the Company is self-insured.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK Information required by this Item is set forth in Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Market Risks” in this 2023 Annual Report on Form 10-K.
Biggest changeITEM 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK Information required by this Item is set forth in Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Market Risks” in this 2024 Annual Report on Form 10-K.

Other BMI 10-K year-over-year comparisons