Badger Meter Inc's Business Segments

Badger Meter is an innovator in flow measurement, control and communication solutions, serving water utilities, municipalities, and commercial and industrial customers worldwide. The Company’s products measure water, oil, chemicals and other fluids, and are known for accuracy, long-lasting durability and for providing and communicating valuable and timely measurement data. The Company’s product lines fall into two categories: sales of water meters and related technologies to municipal water utilities (municipal water) and sales of meters to various industries for water and other fluids (flow instrumentation). The Company estimates that over 75% of its products are used in water applications when both categories are grouped together.

Municipal water, the largest category by sales volume, includes mechanical and ultrasonic (electronic) water meters and related technologies and services used by municipal water utilities as the basis for generating water and wastewater revenues. The key market for the Company’s municipal water meter products is North America, primarily the United States, because most meters are designed and manufactured to conform to standards promulgated by the American Water Works Association. The majority of water meters sold continues to be mechanical in nature. In recent years, the Company has made inroads in selling ultrasonic water meters. The development of smaller diameter ultrasonic water meters combined with advanced radio technology now provides the Company with the opportunity to sell into other geographical markets, for example Europe, the Middle East and South America. In the municipal water category, sales of water meters and related technologies and services are also commonly referred to as residential or commercial water meter sales, the latter referring to larger sizes of water meters.

Flow instrumentation includes meters and valves sold worldwide to measure and control materials flowing through a pipe or pipeline including water, air, steam, oil, and other liquids and gases. These products are used in a variety of applications, primarily into the following industries: water/wastewater; heating, ventilating and air conditioning (HVAC); oil and gas; chemical and petrochemical; test and measurement; automotive aftermarket; and the concrete construction process. Furthermore, the Company’s flow instrumentation technologies are sold to original equipment manufacturers as the primary flow measurement device within a product or system.

Residential and commercial water meters 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. Meters equipped with radio technology (endpoints) receive flow measurement data from 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 billing systems. These remotely read, or mobile, systems are either automatic meter reading (AMR) systems, where a vehicle equipped for meter reading purposes, including a radio receiver, computer and reading software, collects the data from utilities’ meters; or fixed network advanced metering infrastructure (AMI) systems, where data is gathered utilizing a network of permanent data collectors or gateway receivers that are always active or listening for the radio transmission from the utilities’ meters. AMI systems eliminate the need for utility personnel to drive through service territories to collect meter reading data. These systems provide the utilities with more frequent and diverse data at specified intervals from their meters.

The ORION® family of radio endpoints provides water utilities with a range of industry-leading options for meter reading. These include ORION Mobile (for mobile meter reading), ORION Fixed Network (for traditional fixed network applications), and ORION Cellular (for infrastructure-free meter reading). ORION Mobile makes the migration to fixed network easier for utilities that prefer to start with mobile reading and later adopt fixed network communications, allowing utilities to choose a solution for their current needs and be positioned for their future operational changes.

Critical to the water metering ecosystem is information and analytics. The Company’s BEACON® AMA Managed Solution is the latest in metering technology. BEACON AMA combines the BEACON analytical software suite with proven ORION technologies using two-way fixed and cellular networks in a managed solution, improving utilities’ visibility of their water consumption and eliminating the need for costly utility managed infrastructure.

The BEACON AMA secure, cloud-hosted software suite includes a customizable dashboard, the ability to establish alerts for specific conditions, and consumer engagement tools that allow end water customers 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.

The Company’s net sales and corresponding net earnings depend on unit volume and product mix, with the Company generally earning higher margins on meters equipped with radio technology. The Company’s proprietary radio products generally result in higher margins than the remarketed, non-proprietary technology products. The Company also sells registers and endpoints separately to customers who wish to upgrade their existing meters in the field.

The proprietary ORION endpoint technology has been licensed to other technology providers on a non-exclusive basis, including those providing radio products that communicate over power lines, broadband networks and proprietary radio frequency networks, allowing ORION a distinct advantage in the radio solutions market. In addition, the ORION universal gateway receiver transmits data over a variety of public wireless networks, which allows for strategic deployments, such as monitoring large commercial users.

Water meter replacement and the adoption and deployment of new technology comprise the majority of water meter product sales, including radio products. To a much lesser extent, housing starts also contribute to the new product sales base. Over the last decade, there has been a growing trend in the conversion from manually read water meters to radio technology. This conversion rate is accelerating and contributes to an increased water meter and radio solutions base of business. The Company estimates that less than 53% of water meters installed in the United States have been converted to a radio solutions technology. The Company’s strategy is to fulfill customers’ metering expectations and requirements with its proprietary meter reading systems or other systems available through its alliance partners in the marketplace.

Flow instrumentation products serve flow measurement and control applications across a broad industrial spectrum, occasionally leveraging the same technologies used in the municipal water category. Specialized communication protocols that control the entire flow measurement process and mandatory certifications drive these markets. The Company’s specific flow measurement and control applications and technologies serve the flow measurement market through both customized and standard flow instrumentation solutions.

Industries today 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. This system-wide scrutiny has heightened the focus on flow instrumentation in industrial process, manufacturing, commercial fluid, building automation, and precision engineering applications where flow measurement and control are critical.

Badger Meter Inc. is a leading manufacturer of flow measurement and control products and services, primarily focusing on water metering solutions, as well as metering products for various industrial applications. The companys offerings are crucial for water utilities and industrial organizations, helping them to manage resources efficiently, ensure accurate billing, and enhance customer service.

Segments

1. Water Utilities:
- This segment focuses on providing reliable water metering solutions for municipalities and water service providers. The company offers a range of meters and monitoring systems that enable utilities to measure water consumption accurately, manage distribution networks, and detect leaks.

2. Industrial:
- The industrial segment serves diverse markets, including food and beverage, chemical, pharmaceutical, and oil and gas. Badger Meter provides flow measurement products designed to handle various applications and ensure efficiency in processes that require precise flow management.

3. Automotive:
- In addition to water and industrial applications, Badger Meter serves the automotive sector by providing specialized metering products for fuel systems, enhancing engine performance and efficiency.

Products and Services

1. Flow Meters:
- Badger Meter offers a wide array of flow meters, including mechanical and electronic types, which are designed for various applications. Their products include:
- Positive Displacement Meters: These provide high accuracy for residential and commercial applications.
- Electromagnetic Meters: Ideal for water and wastewater applications, offering robust performance in challenging environments.
- Ultrasonic Meters: Best suited for large volume applications, offering non-invasive measurement technologies.

2. Monitoring and Data Management Solutions:
- The company provides software solutions for data collection, analysis, and reporting. Their remote monitoring capabilities allow utilities to gather real-time insights into water usage patterns, enabling smarter resource management and enhancing operational efficiency.

3. Smart Water Solutions:
- Emphasizing the move toward smart infrastructure, Badger Meter develops advanced technologies including:
- AMR (Automated Meter Reading): Solutions that enable utilities to automate the collection of meter readings, enhancing accuracy and reducing labor costs.
- AMI (Advanced Metering Infrastructure): Comprehensive systems that facilitate two-way communication between meters and data systems, enabling enhanced demand management and reporting.

4. Testing and Calibration Services:
- Badger Meter provides calibration and testing services to ensure the accuracy and reliability of flow measurement devices, supporting clients in compliance with regulations and standards.

5. Custom Solutions:
- The company is adept at creating tailored solutions that meet the specific needs of clients across various industries, ensuring maximum efficiency and performance in fluid management.

International Operations

Badger Meter has a global presence, operating in several international markets. The company utilizes a combination of direct sales and partnerships with local distributors to reach customers in different regions. International operations involve adapting products and services to meet local regulatory requirements and customer preferences, ensuring compliance, and fulfilling market demands effectively.

Global Market Focus

With a commitment to innovation, Badger Meter explores emerging markets and regions where there is an increasing need for water management solutions. The company is engaged in expanding its footprint in both developed and developing countries, targeting markets where water scarcity and infrastructure development are pressing issues. This includes efforts to streamline operations for utilities and optimize resource management in agricultural applications.

Conclusion

Badger Meter Inc. is well-positioned in the flow measurement and control industry, leveraging advanced technology and customer-focused solutions. The combination of innovative products tailored to diverse segments and robust international operations underscores the companys commitment to excellence in resource management, particularly in water utility applications. This positioning not only enhances the efficiency and effectiveness of utilities and industries but also supports sustainable practices in an era of increasing environmental consciousness.