Title of class: | Name of each exchange on which registered: | |
Common Stock | New York Stock Exchange | |
Common Share Purchase Rights | New York Stock Exchange |
Large accelerated filer | ý | Accelerated filer | ¨ | ||
Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | ||
Emerging growth company | o |
• | the continued shift in the Company’s business from lower cost, manually read meters toward more expensive, value-added automatic meter reading (AMR) systems, advanced metering infrastructure (AMI) systems and advanced metering analytics (AMA) systems that offer more comprehensive solutions to customers’ metering needs; |
• | the success or failure of newer Company products; |
• | changes in competitive pricing and bids in both the domestic and foreign marketplaces, and particularly in continued intense price competition on government bid contracts for lower cost, manually read meters; |
• | the actions (or lack thereof) of the Company’s competitors; |
• | changes in the Company’s relationships with its alliance partners, primarily its alliance partners that provide radio solutions, and particularly those that sell products that do or may compete with the Company’s products; |
• | changes in the general health of the United States and foreign economies, including to some extent such things as the length and severity of global economic downturns, international or civil conflicts that affect international trade, the ability of municipal water utility customers to authorize and finance purchases of the Company’s products, the Company’s ability to obtain financing, housing starts in the United States, and overall industrial activity; |
• | unusual weather, weather patterns or other natural phenomena, including related economic and other ancillary effects of any such events; |
• | economic policy changes, including but not limited to, trade policy and corporate taxation; |
• | the timing and impact of government funding programs that stimulate national and global economies, as well as the impact of government budget cuts or partial shutdowns of governmental operations; |
• | changes in the cost and/or availability of needed raw materials and parts, such as volatility in the cost of brass castings as a result of fluctuations in commodity prices, particularly for copper and scrap metal at the supplier level, foreign-sourced electronic components as a result of currency exchange fluctuations and/or lead times, and plastic resin as a result of changes in petroleum and natural gas prices; |
• | the Company’s ability to successfully integrate acquired businesses or products; |
• | changes in foreign economic conditions, particularly currency fluctuations in the United States dollar, the Euro and the Mexican peso; |
• | the inability to develop technologically advanced products; |
• | the failure of the Company’s products to operate as intended; |
• | the inability to protect the Company’s proprietary rights to its products; |
• | the Company’s expanded role as a prime contractor for providing complete technology systems to governmental entities, which brings with it added risks, including but not limited to, the Company’s responsibility for subcontractor performance, additional costs and expenses if the Company and its subcontractors fail to meet the timetable agreed to with the governmental entity, and the Company’s expanded warranty and performance obligations; |
• | disruptions and other damages to information technology and other networks and operations due to breaches in data security or any other cybersecurity attack; |
• | transportation delays or interruptions; |
• | violations or alleged violations of the U.S. Foreign Corrupt Practices Act (FCPA) or other anti-corruption laws and the Foreign Account Tax Compliance provisions of the Hiring Incentives to Restore Employment Act (referred to as FATCA); |
• | the loss of or disruption in certain single-source suppliers; and |
• | changes in laws and regulations, particularly laws dealing with the content or handling of materials used in the Company's products. |
Name | Position | Age at 2/28/2018 |
Richard A. Meeusen | Chairman, President and Chief Executive Officer | 63 |
Kenneth C. Bockhorst | Senior Vice President — Chief Operating Officer | 45 |
Richard E. Johnson | Senior Vice President — Finance, Chief Financial Officer and Treasurer | 63 |
Fred J. Begale | Vice President — Engineering | 53 |
William R. A. Bergum | Vice President — General Counsel and Secretary | 53 |
Gregory M. Gomez | Vice President — Business Development and Flow Instrumentation | 53 |
Horst E. Gras | Vice President — International Operations | 62 |
Trina L. Jashinsky | Vice President — Human Resources | 55 |
Raymond G. Serdynski | Vice President — Manufacturing | 61 |
Beverly L. P. Smiley | Vice President — Controller | 68 |
Kimberly K. Stoll | Vice President — Sales and Marketing | 51 |
Approximate area | |||||||
Location | Principal use | (square feet) | |||||
Scottsdale, Arizona, USA | Manufacturing | 32,000 | (1 | ) | |||
Los Gatos, California, USA | Software development | 3,600 | (2 | ) | |||
Centennial, Colorado, USA | Distribution | 12,000 | |||||
Tulsa, Oklahoma, USA | Manufacturing | 59,500 | |||||
Milwaukee, Wisconsin, USA | Manufacturing and offices | 324,200 | |||||
Racine, Wisconsin, USA | Manufacturing and offices | 134,300 | (3 | ) | |||
Brno, Czech Republic | Manufacturing | 27,800 | |||||
Neuffen, Germany | Manufacturing and offices | 24,700 | |||||
Nogales, Mexico | Manufacturing | 181,300 | |||||
Luleå, Sweden | Electronic development | 7,000 | (4 | ) | |||
Bern, Switzerland | Manufacturing | 1,100 | (5 | ) |
December 31 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | |
Badger Meter, Inc. | Return % | 16.66% | 10.49% | 0.03% | 27.71% | 30.94% | |
Cumulative $ | $100.00 | $116.66 | $128.91 | $128.95 | $164.68 | $215.63 | |
Russell 2000 Index | Return % | 38.82% | 4.89% | (4.41)% | 21.31% | 14.65% | |
Cumulative $ | $100.00 | $138.82 | $145.62 | $139.19 | $168.85 | $193.58 | |
Peer Group | Return % | 40.14% | 0.51% | (9.99)% | 37.54% | 16.97% | |
Cumulative $ | $100.00 | $140.14 | $140.87 | $126.79 | $174.39 | $203.98 |
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 | ||||
(In thousands) | |||||||
October 1, 2017 - October 31, 2017 | 13,971 | $43.22 | 111,922 | 288,078 | |||
November 1, 2017 - November 30, 2017 | — | — | 111,922 | 288,078 | |||
December 1, 2017 - December 31, 2017 | 2,698 | 47.80 | 114,620 | 285,380 | |||
Total as of December 31, 2017 | 16,669 | 114,620 | 285,380 |
Years ended December 31, | ||||||||||
(In thousands except per share data) | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 |
Operating results | ||||||||||
Net sales | $402,440 | 393,761 | 377,698 | 364,768 | 334,122 | 319,660 | 262,915 | 276,634 | 250,337 | 279,552 |
Research and development | $10,596 | 10,597 | 10,645 | 9,496 | 10,504 | 9,567 | 8,086 | 7,164 | 6,910 | 7,136 |
Earnings from continuing operations before income taxes | $55,622 | 49,844 | 41,152 | 44,912 | 38,009 | 43,471 | 27,349 | 44,438 | 42,333 | 39,555 |
Earnings from continuing operations | $34,571 | 32,295 | 25,938 | 29,678 | 24,617 | 28,032 | 19,161 | 28,662 | 26,780 | 25,084 |
Earnings from discontinued operations (1) | $ n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | 7,390 | n/a |
Net earnings | $34,571 | 32,295 | 25,938 | 29,678 | 24,617 | 28,032 | 19,161 | 28,662 | 34,170 | 25,084 |
Earnings from continuing operations to sales | 8.6% | 8.2% | 6.9% | 8.1% | 7.4% | 8.8% | 7.3% | 10.4% | 10.7% | 9.0% |
Per Common share (2) | ||||||||||
Basic earnings from continuing operations | $1.20 | 1.12 | 0.90 | 1.04 | 0.86 | 0.98 | 0.64 | 0.96 | 0.91 | 0.86 |
Basic earnings from discontinued operations (1) | $ n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | 0.25 | n/a |
Total basic earnings | $1.20 | 1.12 | 0.90 | 1.04 | 0.86 | 0.98 | 0.64 | 0.96 | 1.16 | 0.86 |
Diluted earnings from continuing operations | $1.19 | 1.11 | 0.90 | 1.03 | 0.85 | 0.98 | 0.64 | 0.96 | 0.90 | 0.85 |
Diluted earnings from discontinued operations (1) | $ n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | 0.25 | n/a |
Total diluted earnings | $1.19 | 1.11 | 0.90 | 1.03 | 0.85 | 0.98 | 0.64 | 0.96 | 1.14 | 0.85 |
Cash dividends declared: Common Stock | $0.49 | 0.43 | 0.39 | 0.37 | 0.35 | 0.33 | 0.30 | 0.26 | 0.23 | 0.20 |
Price range - high | $52.10 | 39.36 | 32.94 | 30.46 | 28.18 | 24.30 | 22.74 | 22.75 | 22.45 | 31.37 |
Price range - low | $34.40 | 26.40 | 25.82 | 23.24 | 20.94 | 14.65 | 13.43 | 16.29 | 11.25 | 8.79 |
Closing price | $47.80 | 36.95 | 29.30 | 29.68 | 27.25 | 23.71 | 14.72 | 22.11 | 19.91 | 14.51 |
Book value * | $9.53 | 8.80 | 8.00 | 7.41 | 6.82 | 5.98 | 5.93 | 5.60 | 4.82 | 3.75 |
Shares outstanding at year-end (2) | ||||||||||
Common Stock | 29,119 | 29,119 | 29,050 | 28,922 | 28,824 | 28,628 | 30,246 | 30,096 | 29,946 | 29,616 |
Financial position | ||||||||||
Working capital * | $65,514 | 75,174 | 44,784 | 34,030 | 29,122 | 27,294 | 78,782 | 64.658 | 60,419 | 35,740 |
Current ratio * | 1.7 to 1 | 2.0 to 1 | 1.4 to 1 | 1.3 to 1 | 1.3 to 1 | 1.3 to 1 | 4.5 to 1 | 3.0 to 1 | 3.3 to 1 | 1.7 to 1 |
Net cash provided by operations | $49,751 | 56,185 | 35,831 | 35,735 | 34,818 | 34,802 | 31,317 | 18,396 | 36,588 | 26,143 |
Capital expenditures | $15,069 | 10,596 | 19,766 | 12,332 | 14,311 | 8,202 | 5,336 | 9,238 | 7,750 | 13,237 |
Total assets | $391,727 | 349,699 | 355,480 | 341,158 | 316,058 | 290,453 | 218,910 | 215,864 | 191,016 | 195,358 |
Short-term and current portion of long-term debt | $44,550 | 37,950 | 71,360 | 75,927 | 70,045 | 66,730 | 1,790 | 12,878 | 8,003 | 19,670 |
Long-term debt | $ n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | 5,504 |
Shareholders' equity | $277,452 | 256,209 | 232,275 | 214,331 | 196,563 | 171,247 | 179.281 | 168.383 | 144,461 | 111,023 |
Debt as a percent of total debt and equity * | 13.8% | 12.9% | 23.5% | 26.2% | 26.3% | 28.0% | 1.0% | 7.1% | 5.2% | 18.5% |
Return on shareholders' equity * | 12.5% | 12.6% | 11.2% | 13.8% | 12.5% | 16.4% | 10.7% | 17.0% | 18.5% | 22.6% |
Price/earnings ratio * | 40.2 | 33.3 | 32.6 | 28.8 | 32.1 | 24.3 | 23.2 | 23.2 | 22.2 | 17.2 |
Payments due by period | |||||||||||||||||||
Total | Less than 1 year | 1-3 years | 3-5 years | Beyond | |||||||||||||||
(In thousands) | |||||||||||||||||||
Short-term debt | $ | 44,550 | $ | 44,550 | $ | — | $ | — | $ | — | |||||||||
Operating leases | 12,230 | 2,448 | 3,761 | 2,696 | 3,325 | ||||||||||||||
Total contractual obligations | $ | 56,780 | $ | 46,998 | $ | 3,761 | $ | 2,696 | $ | 3,325 |
December 31, | |||||||
2017 | 2016 | ||||||
Assets | (Dollars in thousands) | ||||||
Current assets: | |||||||
Cash | $ | 11,164 | $ | 7,338 | |||
Receivables | 58,210 | 59,818 | |||||
Inventories: | |||||||
Finished goods | 23,125 | 18,087 | |||||
Work in process | 22,035 | 17,157 | |||||
Raw materials | 40,012 | 42,457 | |||||
Total inventories | 85,172 | 77,701 | |||||
Prepaid expenses and other current assets | 4,077 | 6,155 | |||||
Total current assets | 158,623 | 151,012 | |||||
Property, plant and equipment, at cost: | |||||||
Land and improvements | 9,119 | 9,068 | |||||
Buildings and improvements | 67,604 | 65,230 | |||||
Machinery and equipment | 135,762 | 126,680 | |||||
212,485 | 200,978 | ||||||
Less accumulated depreciation | (118,884 | ) | (110,784 | ) | |||
Net property, plant and equipment | 93,601 | 90,194 | |||||
Intangible assets, at cost less accumulated amortization | 59,326 | 51,872 | |||||
Other assets | 9,897 | 6,607 | |||||
Deferred income taxes | 2,856 | 700 | |||||
Goodwill | 67,424 | 49,314 | |||||
Total assets | $ | 391,727 | $ | 349,699 | |||
Liabilities and Shareholders’ Equity | |||||||
Current liabilities: | |||||||
Short-term debt | $ | 44,550 | $ | 37,950 | |||
Payables and other current liabilities | 28,601 | 18,350 | |||||
Accrued compensation and employee benefits | 15,509 | 13,861 | |||||
Warranty and after-sale costs | 3,367 | 2,779 | |||||
Income and other taxes | 1,082 | 2,898 | |||||
Total current liabilities | 93,109 | 75,838 | |||||
Other long-term liabilities | 4,073 | 4,019 | |||||
Deferred income taxes | 3,434 | 1,901 | |||||
Accrued non-pension postretirement benefits | 5,703 | 5,753 | |||||
Other accrued employee benefits | 7,956 | 5,979 | |||||
Commitments and contingencies (Note 6) | |||||||
Shareholders’ equity: | |||||||
Common Stock, $1 par; authorized 40,000,000 shares; issued 37,164,698 shares in 2017 and 37,121,618 shares in 2016 | 37,165 | 37,122 | |||||
Capital in excess of par value | 32,182 | 28,022 | |||||
Reinvested earnings | 244,224 | 223,876 | |||||
Accumulated other comprehensive loss | (10,893 | ) | (11,635 | ) | |||
Less: Employee benefit stock | (460 | ) | (614 | ) | |||
Treasury stock, at cost; 8,046,166 shares in 2017 and 8,003,086 shares in 2016 | (24,766 | ) | (20,562 | ) | |||
Total shareholders’ equity | 277,452 | 256,209 | |||||
Total liabilities and shareholders’ equity | $ | 391,727 | $ | 349,699 |
Years ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(In thousands except per share amounts) | |||||||||||
Net sales | $ | 402,440 | $ | 393,761 | $ | 377,698 | |||||
Cost of sales | 246,694 | 243,185 | 241,922 | ||||||||
Gross margin | 155,746 | 150,576 | 135,776 | ||||||||
Selling, engineering and administration | 100,124 | 99,811 | 93,407 | ||||||||
Operating earnings | 55,622 | 50,765 | 42,369 | ||||||||
Interest expense, net | 789 | 921 | 1,217 | ||||||||
Earnings before income taxes | 54,833 | 49,844 | 41,152 | ||||||||
Provision for income taxes | 20,262 | 17,549 | 15,214 | ||||||||
Net earnings | $ | 34,571 | $ | 32,295 | $ | 25,938 | |||||
Earnings per share: | |||||||||||
Basic | $ | 1.20 | $ | 1.12 | $ | 0.90 | |||||
Diluted | $ | 1.19 | $ | 1.11 | $ | 0.90 | |||||
Shares used in computation of earnings per share: | |||||||||||
Basic | 28,927 | 28,887 | 28,759 | ||||||||
Impact of dilutive securities | 184 | 163 | 135 | ||||||||
Diluted | 29,111 | 29,050 | 28,894 |
Years ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(Dollars in thousands) | |||||||||||
Net earnings | $ | 34,571 | $ | 32,295 | $ | 25,938 | |||||
Other comprehensive income : | |||||||||||
Foreign currency translation adjustment | 1,844 | (328 | ) | (847 | ) | ||||||
Pension and postretirement benefits, net of tax | (1,102 | ) | 1,473 | (77 | ) | ||||||
Comprehensive income | $ | 35,313 | $ | 33,440 | $ | 25,014 |
Years ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
(Dollars in thousands) | |||||||||||
Operating activities: | |||||||||||
Net earnings | $ | 34,571 | $ | 32,295 | $ | 25,938 | |||||
Adjustments to reconcile net earnings to net cash provided by operations: | |||||||||||
Depreciation | 12,056 | 10,715 | 9,993 | ||||||||
Amortization | 12,342 | 11,727 | 10,606 | ||||||||
Deferred income taxes | (4,100 | ) | 710 | (3,023 | ) | ||||||
Contributions to pension plan | (825 | ) | (1,000 | ) | — | ||||||
Noncurrent employee benefits | 714 | 660 | 1,261 | ||||||||
Stock-based compensation expense | 1,725 | 1,537 | 1,541 | ||||||||
Changes in: | |||||||||||
Receivables | (967 | ) | (3,561 | ) | (5,511 | ) | |||||
Inventories | (6,167 | ) | 955 | (7,116 | ) | ||||||
Prepaid expenses and other current assets | (6,237 | ) | (961 | ) | (1,632 | ) | |||||
Liabilities other than debt | 6,639 | 3,108 | 3,774 | ||||||||
Total adjustments | 15,180 | 23,890 | 9,893 | ||||||||
Net cash provided by operations | 49,751 | 56,185 | 35,831 | ||||||||
Investing activities: | |||||||||||
Property, plant and equipment additions | (15,069 | ) | (10,596 | ) | (19,766 | ) | |||||
Acquisitions, net of cash acquired | (20,376 | ) | (1,800 | ) | (1,907 | ) | |||||
Net cash used for investing activities | (35,445 | ) | (12,396 | ) | (21,673 | ) | |||||
Financing activities: | |||||||||||
Net increase (decrease) in short-term debt | 6,376 | (33,096 | ) | (3,960 | ) | ||||||
Dividends paid | (14,215 | ) | (12,461 | ) | (11,261 | ) | |||||
Proceeds from exercise of stock options | 1,215 | 568 | 1,641 | ||||||||
Tax benefit on stock options | — | — | 141 | ||||||||
Purchase of common stock for treasury stock | (4,402 | ) | — | — | |||||||
Issuance of treasury stock | 600 | 518 | 470 | ||||||||
Net cash used for financing activities | (10,426 | ) | (44,471 | ) | (12,969 | ) | |||||
Effect of foreign exchange rates on cash | (54 | ) | (143 | ) | 318 | ||||||
Increase (decrease) in cash | 3,826 | (825 | ) | 1,507 | |||||||
Cash — beginning of year | 7,338 | 8,163 | 6,656 | ||||||||
Cash — end of year | $ | 11,164 | $ | 7,338 | $ | 8,163 | |||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid during the year for: | |||||||||||
Income taxes | $ | 17,912 | $ | 19,723 | $ | 18,167 | |||||
Interest | $ | 867 | $ | 952 | $ | 1,246 | |||||
Non cash transaction: | |||||||||||
Settlement of Carolina Meter & Supply payables prior to the acquisition | $ | 4,176 | $ | — | $ | — | |||||
Settlement of United Utilities payables prior to the acquisition | $ | — | $ | — | $ | 2,866 |
Years ended December 31, | |||||||||||||||||||||||||||
Common Stock at $1 par value* | Capital in excess of par value | Reinvested earnings | Accumulated other comprehensive income (loss) | Employee benefit stock | Treasury stock | Total | |||||||||||||||||||||
(In thousands except per share amounts) | |||||||||||||||||||||||||||
Balance, December 31, 2014 | $ | 41,046 | $ | 27,830 | $ | 189,365 | $ | (11,856 | ) | $ | (922 | ) | $ | (31,132 | ) | $ | 214,331 | ||||||||||
Net earnings | — | — | 25,938 | — | — | — | 25,938 | ||||||||||||||||||||
Pension and postretirement benefits (net of $(122) tax effect) | — | — | — | (77 | ) | — | — | (77 | ) | ||||||||||||||||||
Foreign currency translation | — | — | — | (847 | ) | — | — | (847 | ) | ||||||||||||||||||
Cash dividends of $0.39 per share | — | — | (11,259 | ) | — | — | — | (11,259 | ) | ||||||||||||||||||
Stock options exercised | 57 | 1,517 | — | — | — | 67 | 1,641 | ||||||||||||||||||||
Tax benefit on stock options and dividends | — | 141 | — | — | — | — | 141 | ||||||||||||||||||||
ESSOP transactions | — | 242 | — | — | 154 | — | 396 | ||||||||||||||||||||
Stock-based compensation | — | 1,541 | — | — | — | — | 1,541 | ||||||||||||||||||||
Issuance of treasury stock (70 shares) | — | 355 | — | — | — | 115 | 470 | ||||||||||||||||||||
Balance, December 31, 2015 | 41,103 | 31,626 | 204,044 | (12,780 | ) | (768 | ) | (30,950 | ) | 232,275 | |||||||||||||||||
Net earnings | — | — | 32,295 | — | — | — | 32,295 | ||||||||||||||||||||
Pension and postretirement benefits (net of $1,019 tax effect) | — | — | — | 1,473 | — | — | 1,473 | ||||||||||||||||||||
Foreign currency translation | — | — | — | (328 | ) | — | — | (328 | ) | ||||||||||||||||||
Cash dividends of $0.43 per share | — | — | (12,463 | ) | — | — | — | (12,463 | ) | ||||||||||||||||||
Stock options exercised | 19 | 528 | — | — | — | 22 | 569 | ||||||||||||||||||||
Tax benefit on stock options and dividends | — | (110 | ) | — | — | — | — | (110 | ) | ||||||||||||||||||
ESSOP transactions | — | 289 | — | — | 154 | — | 443 | ||||||||||||||||||||
Stock-based compensation | — | 1,537 | — | — | — | — | 1,537 | ||||||||||||||||||||
Retirement of treasury stock | (4,000 | ) | (6,260 | ) | — | — | — | 10,260 | — | ||||||||||||||||||
Issuance of treasury stock (41 shares) | — | 412 | — | — | — | 106 | 518 | ||||||||||||||||||||
Balance, December 31, 2016 | 37,122 | 28,022 | 223,876 | (11,635 | ) | (614 | ) | (20,562 | ) | 256,209 | |||||||||||||||||
Net earnings | — | — | 34,571 | — | — | — | 34,571 | ||||||||||||||||||||
Pension and postretirement benefits (net of $292 tax effect) | — | — | — | (1,102 | ) | — | — | (1,102 | ) | ||||||||||||||||||
Foreign currency translation | — | — | — | 1,844 | — | — | 1,844 | ||||||||||||||||||||
Cash dividends of $0.49 per share | — | — | (14,223 | ) | — | — | — | (14,223 | ) | ||||||||||||||||||
Stock options exercised | 43 | 1,798 | — | — | — | 30 | 1,871 | ||||||||||||||||||||
ESSOP transactions | — | 205 | — | — | 154 | — | 359 | ||||||||||||||||||||
Stock-based compensation | — | 1,725 | — | — | — | — | 1,725 | ||||||||||||||||||||
Purchase of common stock for treasury stock | — | — | — | — | — | (4,402 | ) | (4,402 | ) | ||||||||||||||||||
Issuance of treasury stock (61 shares) | — | 432 | — | — | — | 168 | 600 | ||||||||||||||||||||
Balance, December 31, 2017 | 37,165 | 32,182 | 244,224 | (10,893 | ) | (460 | ) | (24,766 | ) | 277,452 |
* | Each common share of stock equals $1 par value; therefore, the number of common shares is the same as the dollar value. |
Balance at beginning of year | Provision and reserve adjustments | Write-offs less recoveries | Balance at end of year | ||||||||||||
(In thousands) | |||||||||||||||
2017 | $ | 425 | $ | 285 | $ | (323 | ) | $ | 387 | ||||||
2016 | $ | 477 | $ | 2 | $ | (54 | ) | $ | 425 | ||||||
2015 | $ | 811 | $ | (152 | ) | $ | (182 | ) | $ | 477 |
Balance at beginning of year | Net additions charged to earnings | Disposals | Balance at end of year | ||||||||||||
(In thousands) | |||||||||||||||
2017 | $ | 3,639 | $ | 1,295 | $ | (1,053 | ) | $ | 3,881 | ||||||
2016 | $ | 3,836 | $ | 1,017 | $ | (1,214 | ) | $ | 3,639 | ||||||
2015 | $ | 3,314 | $ | 2,530 | $ | (2,008 | ) | $ | 3,836 |
December 31, 2017 | December 31, 2016 | ||||||||||||||
Gross carrying amount | Accumulated amortization | Gross carrying amount | Accumulated amortization | ||||||||||||
(In thousands) | |||||||||||||||
Technologies | $ | 47,647 | $ | 21,882 | $ | 47,657 | $ | 18,970 | |||||||
Intellectual property | 10,000 | 333 | — | — | |||||||||||
Non-compete agreements | 2,322 | 1,923 | 2,112 | 1,670 | |||||||||||
Licenses | 650 | 475 | 650 | 458 | |||||||||||
Customer lists | 8,023 | 2,011 | 4,923 | 1,698 | |||||||||||
Customer relationships | 21,620 | 9,649 | 20,790 | 7,416 | |||||||||||
Trade names | 9,595 | 4,258 | 9,475 | 3,523 | |||||||||||
Total intangibles | $ | 99,857 | $ | 40,531 | $ | 85,607 | $ | 33,735 |
Balance at beginning of year | Net additions charged to earnings | Adjustments to pre-existing warranties | Costs incurred | Balance at end of year | |||||||||||||||
(In thousands) | |||||||||||||||||||
2017 | $ | 2,779 | $ | 4,520 | $ | (439 | ) | $ | (3,493 | ) | $ | 3,367 | |||||||
2016 | $ | 3,133 | $ | 3,559 | $ | (554 | ) | $ | (3,359 | ) | $ | 2,779 | |||||||
2015 | $ | 1,739 | $ | 1,559 | $ | 1,278 | $ | (1,443 | ) | $ | 3,133 |
Pension and postretirement benefits | Foreign currency | Total | |||||||||
(In thousands) | |||||||||||
Balance at beginning of period | $ | (10,495 | ) | $ | (1,140 | ) | $ | (11,635 | ) | ||
Other comprehensive income before reclassifications | — | 1,844 | 1,844 | ||||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax of $0.3 million | (1,102 | ) | — | (1,102 | ) | ||||||
Net current period other comprehensive (loss) income, net | (1,102 | ) | 1,844 | 742 | |||||||
Accumulated other comprehensive (loss) income | $ | (11,597 | ) | $ | 704 | $ | (10,893 | ) |
Amount reclassified from accumulated other comprehensive loss | |||
(In thousands) | |||
Amortization of employee benefit plan items: | |||
Prior service cost (1) | $ | (25 | ) |
Settlement expense (1) | 641 | ||
Actuarial loss (1) | (2,010 | ) | |
Total before tax | (1,394 | ) | |
Income tax impact | 292 | ||
Amount reclassified out of accumulated other comprehensive loss | $ | (1,102 | ) |
(1) | These accumulated other comprehensive loss components are included in the computation of benefit plan costs in Note 7 “Employee Benefit Plans.” |
Pension and postretirement benefits | Foreign currency | Total | |||||||||
(In thousands) | |||||||||||
Balance at beginning of period | $ | (11,968 | ) | $ | (812 | ) | $ | (12,780 | ) | ||
Other comprehensive income before reclassifications | — | (328 | ) | (328 | ) | ||||||
Amounts reclassified from accumulated other comprehensive loss, net of tax of $(1.0) million | 1,473 | — | 1,473 | ||||||||
Net current period other comprehensive income (loss), net | 1,473 | (328 | ) | 1,145 | |||||||
Accumulated other comprehensive loss | $ | (10,495 | ) | $ | (1,140 | ) | $ | (11,635 | ) |
Amount reclassified from accumulated other comprehensive loss | |||
(In thousands) | |||
Amortization of employee benefit plan items: | |||
Prior service cost (1) | $ | (25 | ) |
Settlement expense (1) | 1,510 | ||
Actuarial loss (1) | 1,007 | ||
Total before tax | 2,492 | ||
Income tax impact | (1,019 | ) | |
Amount reclassified out of accumulated other comprehensive loss | $ | 1,473 |
(1) | These accumulated other comprehensive loss components are included in the computation of benefit plan costs in Note 7 “Employee Benefit Plans.” |
2017 | 2016 | ||||||
(In thousands) | |||||||
Notes payable to banks | $ | 8,300 | $ | 8,200 | |||
Commercial paper | 36,250 | 29,750 | |||||
Total short-term debt | $ | 44,550 | $ | 37,950 |
Number of shares | Weighted-average exercise price | |||||
Options outstanding - December 31, 2014 | 406,640 | $ | 20.90 | |||
Options granted | 49,510 | $ | 28.33 | |||
Options exercised | (86,538 | ) | $ | 18.98 | ||
Options forfeited | — | n/a | ||||
Options outstanding - December 31, 2015 | 369,612 | $ | 22.35 | |||
Options granted | 42,302 | $ | 33.98 | |||
Options exercised | (27,656 | ) | $ | 20.59 | ||
Options forfeited | — | n/a | ||||
Options outstanding - December 31, 2016 | 384,258 | $ | 23.75 | |||
Options granted | 55,223 | $ | 36.75 | |||
Options exercised | (53,198 | ) | $ | 22.83 | ||
Options forfeited | — | n/a | ||||
Options outstanding - December 31, 2017 | 386,283 | $ | 25.74 | |||
Price range $ 18.08 — $ 18.30 | ||||||
(weighted-average contractual life of 4.0 years) | 101,270 | $ | 18.15 | |||
Price range $ 19.21 — $ 27.18 | ||||||
(weighted-average contractual life of 4.3 years) | 140,322 | $ | 23.54 | |||
Price range $ 28.33 — $ 38.55 | ||||||
(weighted-average contractual life of 8.2 years) | 144,691 | $ | 33.18 | |||
Options outstanding - December 31, 2017 | 386,283 | |||||
Exercisable options — | ||||||
December 31, 2015 | 210,940 | $ | 20.48 | |||
December 31, 2016 | 242,522 | $ | 21.01 | |||
December 31, 2017 | 239,043 | $ | 21.59 |
2017 | 2016 | ||||
Per share fair value of options granted during the period | $14.38 | $13.58 | |||
Risk-free interest rate | 2.06 | % | 1.42 | % | |
Dividend yield | 1.22 | % | 1.16 | % | |
Volatility factor | 46.6 | % | 48.3 | % | |
Weighted-average expected life in years | 5.3 | 5.3 |
2017 | 2016 | ||||||
(In thousands) | |||||||
Exercised | $ | 814 | $ | 379 | |||
Outstanding | $ | 7,966 | $ | 4,288 | |||
Exercisable | $ | 5,921 | $ | 3,370 |
Shares | Fair value per share | |||||
Nonvested at December 31, 2014 | 136,912 | $ | 23.16 | |||
Granted | 38,386 | $ | 28.33 | |||
Vested | (52,150 | ) | $ | 18.08 | ||
Forfeited | (2,900 | ) | $ | 24.44 | ||
Nonvested at December 31, 2015 | 120,248 | $ | 26.99 | |||
Granted | 29,268 | $ | 33.98 | |||
Vested | (40,700 | ) | $ | 25.56 | ||
Forfeited | (3,500 | ) | $ | 29.18 | ||
Nonvested at December 31, 2016 | 105,316 | $ | 29.41 | |||
Granted | 50,519 | $ | 40.69 | |||
Vested | (40,762 | ) | $ | 27.18 | ||
Forfeited | (3,600 | ) | $ | 33.37 | ||
Nonvested at December 31, 2017 | 111,473 | $ | 35.21 |
Total leases | |||
(In thousands) | |||
2018 | $ | 2,448 | |
2019 | 1,979 | ||
2020 | 1,782 | ||
2021 | 1,570 | ||
2022 | 1,126 | ||
Thereafter | 3,325 | ||
Total lease obligations | $ | 12,230 |
Pension plans | Other postretirement benefits | ||||||
(In thousands) | |||||||
Prior service cost | $ | — | $ | (8 | ) | ||
Net actuarial loss | $ | 11,517 | $ | (428 | ) |
Pension plans | Other postretirement benefits | ||||||
(In thousands) | |||||||
Prior service credit | $ | — | $ | (10 | ) | ||
Net actuarial loss | $ | 277 | $ | (9 | ) |
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Service cost - benefits earned during the year | $ | 2 | $ | 3 | $ | 4 | |||||
Interest cost on projected benefit obligations | 1,228 | 1,711 | 1,769 | ||||||||
Expected return on plan assets | (1,596 | ) | (2,199 | ) | (2,151 | ) | |||||
Amortization of net loss | 525 | 575 | 656 | ||||||||
Settlement expense | 641 | 1,510 | 762 | ||||||||
Net periodic pension cost | $ | 800 | $ | 1,600 | $ | 1,040 |
2017 | 2016 | 2015 | ||||||
Discount rate | 3.90 | % | 4.14 | % | 3.81 | % | ||
Expected long-term return on plan assets | 4.00 | % | 5.25 | % | 5.00 | % | ||
Rate of compensation increase | n/a | n/a | n/a |
2017 | 2016 | ||||||
(In thousands) | |||||||
Change in benefit obligation: | |||||||
Benefit obligation at beginning of plan year | $ | 42,030 | $ | 45,471 | |||
Service cost | 2 | 3 | |||||
Interest cost | 1,228 | 1,711 | |||||
Actuarial loss | 2,940 | 537 | |||||
Benefits paid | (3,302 | ) | (5,692 | ) | |||
Projected benefit obligation at measurement date | $ | 42,898 | $ | 42,030 | |||
Change in plan assets: | |||||||
Fair value of plan assets at beginning of plan year | $ | 42,061 | $ | 43,603 | |||
Actual return on plan assets | 1,933 | 3,150 | |||||
Company contribution | 825 | 1,000 | |||||
Benefits paid | (3,302 | ) | (5,692 | ) | |||
Fair value of plan assets at measurement date | $ | 41,517 | $ | 42,061 | |||
Funded status of the plan: | |||||||
Benefit obligation in excess of plan assets | (1,381 | ) | — | ||||
Benefit plan assets in excess of benefit obligation | — | 31 | |||||
(Pension liability) prepaid pension asset | $ | (1,381 | ) | $ | 31 |
2017 | 2016 | ||||
Discount rate | 2.00 | % | 3.94 | % |
2017 | |||||||||||||||
Market value | Quoted prices in active markets for identical assets (Level 1) | Significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||
(In thousands) | |||||||||||||||
Fixed income funds (b) | $ | 40,776 | — | $ | 40,776 | — | |||||||||
Cash/cash equivalents (c) | 741 | 741 | — | — | |||||||||||
Total | $ | 41,517 | $ | 741 | $ | 40,776 | $ | — |
2016 | |||||||||||||||
Market value | Quoted prices in active markets for identical assets (Level 1) | Significant observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||
(In thousands) | |||||||||||||||
Equity securities (a) | $ | 4,045 | $ | — | $ | 4,045 | $ | — | |||||||
Fixed income funds (b) | 37,527 | — | 37,527 | — | |||||||||||
Cash/cash equivalents (c) | 489 | 489 | — | — | |||||||||||
Total | $ | 42,061 | $ | 489 | $ | 41,572 | $ | — |
(a) | The Equity funds in aggregate are well diversified by market capitalization, investment style and geography. The funds seek to provide investment results approximating the aggregate price and dividend performance of securities included in the S&P 500 Index, Russell 2000 Index and MSCI All Country World ex-US Index. |
(b) | The Fixed Income funds consist of bonds. In aggregate, the funds seek to provide investment results approximating the return of the Plan’s obligations. The funds consist of long credit bonds, intermediate credit bonds, short duration government credit bonds and bank loans. |
(c) | This category comprises the cash held to pay beneficiaries. The fair value of cash equals its book value. |
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Service cost, benefits attributed for service of active employees for the period | $ | 121 | $ | 137 | $ | 147 | |||||
Interest cost on the accumulated postretirement benefit obligation | 195 | 257 | 251 | ||||||||
Net gain | (49 | ) | — | — | |||||||
Amortization of prior service (credit) cost | (25 | ) | (25 | ) | 53 | ||||||
Net periodic postretirement benefit cost | $ | 242 | $ | 369 | $ | 451 |
2017 | 2016 | ||||||
(In thousands) | |||||||
Benefit obligation at beginning of year | $ | 6,131 | $ | 6,100 | |||
Service cost | 121 | 137 | |||||
Interest cost | 195 | 257 | |||||
Actuarial gain | (180 | ) | (249 | ) | |||
Plan participants' contributions | 564 | 604 | |||||
Benefits paid | (758 | ) | (718 | ) | |||
Benefit obligation and funded status at end of year | $ | 6,073 | $ | 6,131 |
2017 | 2016 | ||||||
(In thousands) | |||||||
Accrued compensation and employee benefits | $ | 370 | $ | 378 | |||
Accrued non-pension postretirement benefits | 5,703 | 5,753 | |||||
Amounts recognized at December 31 | $ | 6,073 | $ | 6,131 |
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Domestic | $ | 52,745 | $ | 47,407 | $ | 39,447 | |||||
Foreign | 2,088 | 2,437 | 1,705 | ||||||||
Total | $ | 54,833 | $ | 49,844 | $ | 41,152 |
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Current: | |||||||||||
Federal | $ | 20,553 | $ | 14,435 | $ | 15,324 | |||||
State | 2,933 | 1,275 | 2,227 | ||||||||
Foreign | 876 | 1,129 | 686 | ||||||||
Deferred: | |||||||||||
Federal | (3,051 | ) | 922 | (2,568 | ) | ||||||
State | (915 | ) | 151 | (353 | ) | ||||||
Foreign | (134 | ) | (363 | ) | (102 | ) | |||||
Total | $ | 20,262 | $ | 17,549 | $ | 15,214 |
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Provision at statutory rate | $ | 19,192 | $ | 17,445 | $ | 14,403 | |||||
State income taxes, net of federal tax benefit | 1,292 | 923 | 1,242 | ||||||||
Valuation allowance | 564 | — | — | ||||||||
Foreign - tax rate differential and other | 29 | (87 | ) | (13 | ) | ||||||
Domestic production activities deduction | (721 | ) | (560 | ) | (521 | ) | |||||
Federal and state credits | (542 | ) | — | — | |||||||
Other | 448 | (172 | ) | 103 | |||||||
Actual provision | $ | 20,262 | $ | 17,549 | $ | 15,214 |
2017 | 2016 | ||||||
(In thousands) | |||||||
Deferred tax assets: | |||||||
Reserve for receivables and inventories | $ | 2,405 | $ | 2,931 | |||
Accrued compensation | 861 | 1,131 | |||||
Payables | 886 | 1,107 | |||||
Non-pension postretirement benefits | 1,561 | 2,344 | |||||
Net operating loss and credit carryforwards | 364 | 968 | |||||
Accrued pension benefits | 1,071 | 413 | |||||
Accrued employee benefits | 3,219 | 4,103 | |||||
Deferred revenue | 1,504 | — | |||||
Other | 450 | 487 | |||||
Total gross deferred tax assets | 12,321 | 13,484 | |||||
Less: valuation allowance | (373 | ) | — | ||||
Total net deferred tax assets | 11,948 | 13,484 | |||||
Deferred tax liabilities: | |||||||
Depreciation | 3,778 | 5,126 | |||||
Amortization | 8,266 | 8,992 | |||||
Prepaids | 482 | 567 | |||||
Total deferred tax liabilities | 12,526 | 14,685 | |||||
Net deferred tax liabilities | $ | (578 | ) | $ | (1,201 | ) |
2017 | 2016 | ||||||
(In thousands) | |||||||
Balance at beginning of year | $ | 814 | $ | 533 | |||
Increases in unrecognized tax benefits as a result of positions taken during the prior period | 6 | 88 | |||||
Increases in unrecognized tax benefits as a result of positions taken during the current period | 230 | 247 | |||||
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations | (52 | ) | (54 | ) | |||
Balance at end of year | $ | 998 | $ | 814 |
2017 | 2016 | 2015 | |||||||||
(In thousands) | |||||||||||
Revenues: | |||||||||||
United States | $ | 355,768 | $ | 347,853 | $ | 322,535 | |||||
Foreign: | |||||||||||
Asia | 9,133 | 6,539 | 8,299 | ||||||||
Canada | 10,407 | 12,587 | 9,095 | ||||||||
Europe | 15,718 | 15,299 | 17,036 | ||||||||
Mexico | 3,601 | 3,460 | 8,889 | ||||||||
Middle East | 4,904 | 5,520 | 9,672 | ||||||||
Other | 2,909 | 2,503 | 2,172 | ||||||||
Total | $ | 402,440 | $ | 393,761 | $ | 377,698 |
2017 | 2016 | ||||||
(In thousands) | |||||||
Long-lived assets: | |||||||
United States | $ | 56,980 | $ | 53,454 | |||
Foreign: | |||||||
Europe | 15,806 | 15,694 | |||||
Mexico | 20,815 | 21,046 | |||||
Total | $ | 93,601 | $ | 90,194 | |||
2017 | 2016 | ||||||
(In thousands) | |||||||
Total assets: | |||||||
United States | $ | 300,688 | $ | 287,081 | |||
Foreign: | |||||||
Europe | 66,862 | 38,579 | |||||
Mexico | 24,177 | 24,039 | |||||
Total | $ | 391,727 | $ | 349,699 |
Quarter ended | |||||||||||||||
March 31 | June 30 | September 30 | December 31 | ||||||||||||
(In thousands except per share data) | |||||||||||||||
2017 | |||||||||||||||
Net sales | $ | 101,606 | $ | 104,176 | $ | 100,008 | $ | 96,650 | |||||||
Gross margin | $ | 38,650 | $ | 41,054 | $ | 37,039 | $ | 39,003 | |||||||
Net earnings | $ | 8,749 | $ | 10,614 | $ | 7,975 | $ | 7,233 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.30 | $ | 0.37 | $ | 0.28 | $ | 0.25 | |||||||
Diluted | $ | 0.30 | $ | 0.36 | $ | 0.27 | $ | 0.25 | |||||||
Dividends declared | $ | 0.115 | $ | 0.115 | $ | 0.130 | $ | 0.130 | |||||||
Stock price: | |||||||||||||||
High | $ | 39.85 | $ | 41.58 | $ | 49.45 | $ | 52.10 | |||||||
Low | $ | 34.40 | $ | 35.15 | $ | 39.10 | $ | 42.00 | |||||||
Quarter-end close | $ | 36.75 | $ | 39.85 | $ | 49.00 | $ | 47.80 | |||||||
2016 | |||||||||||||||
Net sales | $ | 100,570 | $ | 103,820 | $ | 96,273 | $ | 93,098 | |||||||
Gross margin | $ | 39,011 | $ | 39,396 | $ | 38,647 | $ | 33,522 | |||||||
Net earnings | $ | 7,990 | $ | 9,400 | $ | 8,792 | $ | 6,113 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.28 | $ | 0.33 | $ | 0.30 | $ | 0.21 | |||||||
Diluted | $ | 0.28 | $ | 0.32 | $ | 0.30 | $ | 0.21 | |||||||
Dividends declared | $ | 0.100 | $ | 0.100 | $ | 0.115 | $ | 0.115 | |||||||
Stock price: | |||||||||||||||
High | $ | 34.74 | $ | 39.36 | $ | 37.80 | $ | 39.15 | |||||||
Low | $ | 26.40 | $ | 31.72 | $ | 31.90 | $ | 29.30 | |||||||
Quarter-end close | $ | 33.26 | $ | 36.52 | $ | 33.51 | $ | 36.95 |
1. | Financial Statements. See the financial statements included in Part II, Item 8 “Financial Statements and Supplementary Data” in this 2017 Annual Report on Form 10-K, under the headings “Consolidated Balance Sheets,” “Consolidated Statements of Operations,” “Consolidated Statements of Comprehensive Income,” “Consolidated Statements of Cash Flows” and “Consolidated Statements of Shareholders' Equity.” |
2. | Financial Statement Schedules. Financial statement schedules are omitted because the information required in these schedules is included in the Notes to Consolidated Financial Statements. |
3. | Exhibits. The exhibits listed in the following Exhibit Index are filed as part of this 2017 Annual Report on Form 10-K that is incorporated herein by reference. |
EXHIBIT NO. | EXHIBIT DESCRIPTION | |
(3) | ||
(3.1) | ||
(4) | ||
(4.1) | ||
(4.2) | ||
(4.3) | ||
(4.4) | ||
(4.5) | ||
(10.0)* | ||
(10.3)* | ||
(10.4)* | ||
(10.5)* | ||
EXHIBIT NO. | EXHIBIT DESCRIPTION | |
(10.6)* | ||
(10.7)* | ||
(10.8)* | ||
(10.9)* | ||
(10.10)* | ||
(10.11)* | ||
(21) | ||
(23) | ||
(31.1) | ||
(31.2) | ||
(32) | ||
(99) | Definitive Proxy Statement for the Annual Meeting of Shareholders to be held April 27, 2018. To be filed with the Securities and Exchange Commission under Regulation 14A within 120 days after the end of the Registrant’s fiscal year. With the exception of the information incorporated by reference into Items 10, 11, 12, 13 and 14 of this Annual Report on Form 10-K, the definitive Proxy Statement is not deemed filed as part of this report. | |
(101) | The following materials from the Company's Annual Report on Form 10-K for the year ended December 31, 2017 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Shareholders' Equity, (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and (vii) document and entity information. |
* | A management contract or compensatory plan or arrangement. |
BADGER METER, INC. | ||
By: | /s/ Richard A. Meeusen | |
Richard A. Meeusen | ||
Chairman, President and Chief Executive Officer |
Name | Title | |
/s/ Richard A. Meeusen | Chairman, President and Chief Executive Officer and Director (Principal executive officer) | |
Richard A. Meeusen | ||
/s/ Richard E. Johnson | Senior Vice President — Finance, Chief Financial Officer and Treasurer (Principal financial officer) | |
Richard E. Johnson | ||
/s/ Beverly L. P. Smiley | Vice President — Controller (Principal accounting officer) | |
Beverly L. P. Smiley | ||
/s/ Todd A. Adams | Director | |
Todd A. Adams | ||
/s/ Thomas J. Fischer | Director | |
Thomas J. Fischer | ||
/s/ Gale E. Klappa | Director | |
Gale E. Klappa | ||
/s/ Gail A. Lione | Director | |
Gail A. Lione | ||
/s/ Andrew J. Policano | Director | |
Andrew J. Policano | ||
/s/ James F. Stern | Director | |
James F. Stern | ||
/s/ Glen E. Tellock | Director | |
Glen E. Tellock | ||
/s/ Todd J. Teske | Director | |
Todd J. Teske |
Name | Percentage of Ownership | State or country in which originated | |
Badger Meter de las Americas, SA de CV | 100% | Mexico | |
Badger Meter Canada, Inc. | 100% | Canada | |
Badger Meter Czech Republic, s.r.o. | 100% | Czech Republic | |
(a subsidiary of Badger Meter International, Inc.) | |||
Badger Meter Europe, GmbH | 100% | Federal Republic of Germany | |
Badger Meter International, Inc. | 100% | United States of America (Wisconsin) | |
(an international holding company of Badger Meter, Inc.) | |||
Badger Meter de Mexico, SA de CV | 100% | Mexico | |
Badger Meter Slovakia, s.r.o. | 100% | Slovakia | |
(a subsidiary of Badger Meter Europe, GmbH) | |||
Badger Meter Swiss, AG | 100% | Switzerland | |
(formerly Remag AG) (a subsidiary of Badger Meter International, Inc.) | |||
D-Flow Technology, AB * | 100% | Sweden |
(1) | Registration Statement (Form S-8 No. 33-62241) pertaining to the Badger Meter, Inc. Employee Savings and Stock Plan; |
(2) | Registration Statement (Form S-8 No. 333-107850) pertaining to the Badger Meter, Inc 2003 Stock Option Plan; |
(3) | Registration Statement (Form S-8 No. 333-173966) pertaining to the Badger Meter, Inc. 2011 Omnibus Incentive Plan; and |
(4) | Registration Statement (Form S-3 No. 333-202493) pertaining to the Badger Meter, Inc. Dividend Reinvestment and Stock Purchase Plan. |
/s/ Ernst & Young LLP | ||||
Milwaukee, Wisconsin | ||||
February 28, 2018 |
1. | I have reviewed this Annual Report on Form 10-K of Badger Meter, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: February 28, 2018 | By | /s/ Richard A. Meeusen | |
Richard A. Meeusen | |||
Chairman, President and Chief Executive Officer |
1. | I have reviewed this Annual Report on Form 10-K of Badger Meter, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: February 28, 2018 | By | /s/ Richard E. Johnson | |
Richard E. Johnson | |||
Senior Vice President - Finance, Chief Financial Officer and Treasurer |
Dated: February 28, 2018 | By | /s/ Richard A. Meeusen | |
Richard A. Meeusen | |||
Chairman, President and Chief Executive Officer | |||
By | /s/ Richard E. Johnson | ||
Richard E. Johnson | |||
Senior Vice President - Finance, Chief Financial Officer and Treasurer |
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Feb. 09, 2018 |
Jun. 30, 2017 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | BADGER METER INC | ||
Entity Central Index Key | 0000009092 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 29,111,654 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,007,047,037 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 37,164,698 | 37,121,618 |
Treasury stock, shares (in shares) | 804,166 | 8,003,086 |
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Statement [Abstract] | |||
Net sales | $ 402,440 | $ 393,761 | $ 377,698 |
Cost of sales | 246,694 | 243,185 | 241,922 |
Gross margin | 155,746 | 150,576 | 135,776 |
Selling, engineering and administration | 100,124 | 99,811 | 93,407 |
Operating earnings | 55,622 | 50,765 | 42,369 |
Interest expense, net | 789 | 921 | 1,217 |
Earnings before income taxes | 54,833 | 49,844 | 41,152 |
Provision for income taxes | 20,262 | 17,549 | 15,214 |
Net earnings | $ 34,571 | $ 32,295 | $ 25,938 |
Earnings per share: | |||
Basic (in dollars per share) | $ 1.20 | $ 1.12 | $ 0.90 |
Diluted (in dollars per share) | $ 1.19 | $ 1.11 | $ 0.90 |
Shares used in computation of earnings per share: | |||
Basic (in shares) | 28,927 | 28,887 | 28,759 |
Impact of dilutive securities (in shares) | 184 | 163 | 135 |
Diluted (in shares) | 29,111 | 29,050 | 28,894 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Statement of Comprehensive Income [Abstract] | |||
Net earnings | $ 34,571 | $ 32,295 | $ 25,938 |
Other comprehensive income : | |||
Foreign currency translation adjustment | 1,844 | (328) | (847) |
Pension and postretirement benefits, net of tax | (1,102) | 1,473 | (77) |
Comprehensive income | $ 35,313 | $ 33,440 | $ 25,014 |
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands |
Total |
Common Stock at $1 par value |
Capital in excess of par value |
Reinvested earnings |
Accumulated other comprehensive income (loss) |
Employee benefit stock |
Treasury stock |
|||
---|---|---|---|---|---|---|---|---|---|---|
Balance at beginning of period at Dec. 31, 2014 | $ 214,331 | $ 41,046 | [1] | $ 27,830 | $ 189,365 | $ (11,856) | $ (922) | $ (31,132) | ||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net earnings | 25,938 | 25,938 | ||||||||
Pension and postretirement benefits (net of tax effect) | (77) | (77) | ||||||||
Foreign currency translation | (847) | (847) | ||||||||
Cash dividends | (11,259) | (11,259) | ||||||||
Stock options exercised | 1,641 | 57 | [1] | 1,517 | 67 | |||||
Tax benefit on stock options and dividends | 141 | 141 | ||||||||
ESSOP transactions | 396 | 242 | 154 | |||||||
Stock-based compensation | 1,541 | 1,541 | ||||||||
Issuance of treasury stock | 470 | 355 | 115 | |||||||
Balance at end of period at Dec. 31, 2015 | 232,275 | 41,103 | [1] | 31,626 | 204,044 | (12,780) | (768) | (30,950) | ||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net earnings | 32,295 | 32,295 | ||||||||
Pension and postretirement benefits (net of tax effect) | 1,473 | 1,473 | ||||||||
Foreign currency translation | (328) | (328) | ||||||||
Cash dividends | (12,463) | (12,463) | ||||||||
Stock options exercised | 569 | 19 | [1] | 528 | 22 | |||||
Tax benefit on stock options and dividends | (110) | (110) | ||||||||
ESSOP transactions | 443 | 289 | 154 | |||||||
Stock-based compensation | 1,537 | 1,537 | ||||||||
Retirement of treasury stock | 0 | (4,000) | (6,260) | 10,260 | ||||||
Issuance of treasury stock | 518 | 412 | 106 | |||||||
Balance at end of period at Dec. 31, 2016 | 256,209 | 37,122 | [1] | 28,022 | 223,876 | (11,635) | (614) | (20,562) | ||
Increase (Decrease) in Stockholders' Equity | ||||||||||
Net earnings | 34,571 | 34,571 | ||||||||
Pension and postretirement benefits (net of tax effect) | (1,102) | (1,102) | ||||||||
Foreign currency translation | 1,844 | 1,844 | ||||||||
Cash dividends | (14,223) | (14,223) | ||||||||
Stock options exercised | 1,871 | 43 | [1] | 1,798 | 30 | |||||
ESSOP transactions | 359 | 205 | 154 | |||||||
Stock-based compensation | 1,725 | 1,725 | ||||||||
Purchase of common stock for treasury stock | (4,402) | (4,402) | ||||||||
Issuance of treasury stock | 600 | 432 | 168 | |||||||
Balance at end of period at Dec. 31, 2017 | $ 277,452 | $ 37,165 | [1] | $ 32,182 | $ 244,224 | $ (10,893) | $ (460) | $ (24,766) | ||
|
Consolidated Statements of Shareholders' Equity (Parenthetical) shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017
USD ($)
$ / shares
shares
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Dec. 31, 2016
USD ($)
$ / shares
shares
|
Dec. 31, 2015
USD ($)
$ / shares
shares
|
|
Statement of Stockholders' Equity [Abstract] | |||
Tax effect on employee benefit funded status adjustment | $ | $ 292 | $ (1,019) | $ (122) |
Cash dividends (in dollars per share) | $ 0.49 | $ 0.43 | $ 0.39 |
Issuance of treasury stock (in shares) | shares | 61 | 41 | 70 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Profile 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 85% 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 of the Company's meters are designed and manufactured to conform to standards promulgated by the American Water Works Association. The majority of water meters sold by the Company 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. Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. Receivables Receivables consist primarily of trade receivables. The Company does not require collateral or other security and evaluates the collectability of its receivables based on a number of factors. An allowance for doubtful accounts is recorded for significant past due receivable balances based on a review of the past due items and the customer's ability and likelihood to pay, as well as applying a historical write-off ratio to the remaining balances. Changes in the Company's allowance for doubtful accounts are as follows:
Inventories Inventories are valued at the lower of cost or market. Cost is determined using the first-in, first-out method. The Company estimates and records provisions for obsolete inventories. Changes to the Company's obsolete inventories reserve are as follows:
Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is provided over the estimated useful lives of the respective assets by the straight-line method. The estimated useful lives of assets are: for land improvements, 15 years; for buildings and improvements, 10 to 39 years; and for machinery and equipment, 3 to 20 years. Capitalized Software and Hardware Capitalized internal use software and hardware included in other assets in the Consolidated Balance Sheets were $6.0 million and $3.3 million at December 31, 2017 and 2016, respectively. These amounts are amortized on a straight-line basis over the estimated useful lives of the software and/or hardware, ranging from 1 to 5 years. Amortization expense recognized for the years ending December 31, 2017, 2016 and 2015 was $2.8 million, $3.1 million and $2.4 million, respectively. Long-Lived Assets Property, plant and equipment and identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets. No adjustments were recorded as a result of these reviews during 2017, 2016 and 2015. Intangible Assets Intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from 5 to 20 years. The Company does not have any intangible assets deemed to have indefinite lives. Amortization expense recognized for 2017 was $6.8 million compared to $6.1 million in 2016 and 2015. Amortization expense expected to be recognized is $7.2 million in 2018, $6.9 million in 2019, $6.7 million in 2020, $6.6 million in 2021, $5.6 million in 2022 and $26.4 million thereafter. The carrying value and accumulated amortization by major class of intangible assets are as follows:
Goodwill Goodwill is tested for impairment annually during the fourth fiscal quarter or more frequently if an event indicates that the goodwill might be impaired. Potential impairment is identified by comparing the fair value of a reporting unit with its carrying value. No adjustments were recorded to goodwill as a result of these reviews during 2017, 2016 and 2015. Goodwill was $67.4 million and $49.3 million at December 31, 2017 and 2016, respectively. The increases resulted from the asset purchase of Carolina Meter & Supply of Wilmington, North Carolina in 2017 and the acquisition of D-Flow Technology AB of Luleå, Sweden in 2017. These acquisitions are further described in Note 3 “Acquisitions.” Revenue Recognition Revenues are generally recognized upon shipment of product, which corresponds with the transfer of title. The costs of shipping are generally billed to the customer upon shipment and are included in cost of sales. A small portion of the Company's sales includes shipments of products combined with services, such as meters sold with installation. The product and installation components of these multiple deliverable arrangements are considered separate units of accounting. The value of these separate units of accounting is determined based on their relative fair values determined on a stand-alone basis. Revenue is generally recognized when the last element of the multiple deliverable is delivered, which corresponds with installation and acceptance by the customer. The Company also sells a small number of extended support service agreements on certain products for the period subsequent to the normal support service provided with the original product sale. Revenue is recognized over the service agreement period, which is generally one year. In 2014, the Company began offering software as a service with its BEACON AMA product and revenue for this service is recognized on a monthly basis as the service is performed. Warranty and After-Sale Costs The Company estimates and records provisions for warranties and other after-sale costs in the period in which the sale is recorded, based on a lag factor and historical warranty claim experience. After-sale costs represent a variety of activities outside of the written warranty policy, such as investigation of unanticipated problems after the customer has installed the product, or analysis of water quality issues. Changes in the Company's warranty and after-sale costs reserve are as follows:
Research and Development Research and development costs are charged to expense as incurred and amounted to $10.6 million in 2017, 2016 and 2015. Stock-Based Compensation Plans As of December 31, 2017, the Company has an Omnibus Incentive Plan under which 1,400,000 shares are reserved for restricted stock and stock option grants for employees as well as stock grants for directors as described in Note 5 “Stock Compensation.” The plan was originally approved in 2011 and replaced all prior stock-based plans except for shares and options previously issued under those plans. The Company recognizes the cost of stock-based awards in net earnings for all of its stock-based compensation plans on a straight-line basis over the service period of the awards. The Company estimates the fair value of its option awards using the Black-Scholes option-pricing formula, and records compensation expense for stock options ratably over the stock option grant's vesting period. The Company values restricted stock and stock grants for directors on the closing price of the Company's stock on the day the grant was awarded. Total stock compensation expense recognized by the Company was $1.8 million for 2017, $1.6 million for 2016 and $1.5 million for 2015. Healthcare The Company estimates and records provisions for healthcare claims incurred but not reported, based on medical cost trend analysis, reviews of subsequent payments made and estimates of unbilled amounts. Accumulated Other Comprehensive Loss Components of accumulated other comprehensive loss at December 31, 2017 are as follows:
Details of reclassifications out of accumulated other comprehensive loss during 2017 are as follows:
Components of accumulated other comprehensive loss at December 31, 2016 are as follows:
Details of reclassifications out of accumulated other comprehensive loss during 2016 are as follows:
Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Fair Value Measurements of Financial Instruments The carrying amounts of cash, receivables and payables in the financial statements approximate their fair values due to the short-term nature of these financial instruments. Short-term debt is comprised of notes payable drawn against the Company's lines of credit and commercial paper. Because of its short-term nature, the carrying amount of the short-term debt also approximates fair value. Included in other assets are insurance policies on various individuals who were associated with the Company. The carrying amounts of these insurance policies approximate their fair value. Subsequent Events The Company evaluates subsequent events at the date of the balance sheet as well as conditions that arise after the balance sheet date but before the financial statements are issued. The effects of conditions that existed at the balance sheet date are recognized in the financial statements. Events and conditions arising after the balance sheet date but before the financial statements are issued are evaluated to determine if disclosure is required to keep the financial statements from being misleading. To the extent such events and conditions exist, if any, disclosures are made regarding the nature of events and the estimated financial effects for those events and conditions. For purposes of preparing the accompanying consolidated financial statements and the notes to these financial statements, the Company evaluated subsequent events through the date the accompanying financial statements were issued. New Pronouncements In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-02 "Income Statement - Reporting Comprehensive Income (Topic 220)." Under existing U.S. generally accepted accounting principles, the effects of changes in tax rates and laws on deferred tax balances are recorded as a component of income tax expense in the period in which the law was enacted. When deferred tax balances related to items originally recorded in accumulated other comprehensive income are adjusted, certain tax effects become stranded in accumulated other comprehensive income. The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendments in this ASU also require certain disclosures about stranded tax effects. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption in any period is permitted. The Company’s provisional adjustments recorded in 2017 to account for the impact of the Tax Cuts and Jobs Act resulted in stranded tax effects. The Company is currently evaluating the timing and impact of adopting ASU 2018-02. In May 2017, the FASB issued ASU 2017-09 “Compensation - Stock Compensation (Topic 718),” which clarifies when a change to terms or conditions of a share-based payment award must be accounted for as a modification. The new guidance requires modification accounting if the vesting condition, fair value or the award classification is not the same both before and after a change to the terms and conditions of the award. The new guidance is effective on a prospective basis beginning on January 1, 2018 and early adoption is permitted. The Company does not expect the adoption of this standard to have an impact on its consolidated financial statements as it is not the Company’s practice to change the terms or conditions of share-based payment awards after they are granted. In March 2017, the FASB issued ASU 2017-07 “Compensation - Retirement Benefits (Topic 715),” which changes the presentation of defined benefit and post-retirement benefit plan expense on the income statement by requiring separation between operating and non-operating expense. Under the ASU, the service cost of net periodic benefit expense is an operating expense that will be reported with similar compensation costs. The non-operating components, which include all other components of net periodic benefit expense, are reported outside of operating income. The ASU also stipulates that only the service cost component of pension and postretirement benefit costs is eligible for capitalization. The ASU is effective for the Company beginning on January 1, 2018. Application is retrospective for the presentation of the components of these benefit costs and prospective for the capitalization of service costs. The Company's net periodic benefit cost components are disclosed in Note 3 "Employee Benefit Plans." In January 2017, the FASB issued ASU 2017-04 "Intangibles - Goodwill and Other (Topic 350)." The update requires a single-step quantitative test to measure potential impairment based on the excess of a reporting unit's carrying amount over its fair value. A qualitative assessment can still be completed first for an entity to determine if a quantitative impairment test is necessary. The ASU is effective for fiscal year 2021 and is to be adopted on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company anticipates that the adoption of this standard will have no impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 "Leases (Topic 842)," which requires lessees to record most leases on their balance sheets. Lessees initially recognize a lease liability (measured at the present value of the lease payments over the lease term) and a right-of-use ("ROU") asset (measured at the lease liability amount, adjusted for lease prepayments, lease incentives received and the lessee's initial direct costs). Lessees can make an accounting policy election not to recognize ROU assets and lease liabilities for leases with a lease term of 12 months or less as long as the leases do not include options to purchase the underlying assets that the lessee is reasonably certain to exercise. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The ASU is effective for the Company beginning on January 1, 2019 and early adoption is permitted. The standard requires the use of a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited. The Company is continuing to evaluate the impact that the adoption of this guidance will have on its financial condition, results of operations and the presentation of its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11 "Inventory (Topic 330)," which requires entities to measure inventories at the lower of cost or net realizable value ("NRV"). This simplifies the evaluation from the current method of lower of cost or market, where market is based on one of three measures (i.e. replacement cost, net realizable value, or net realizable value less a normal profit margin). The ASU does not apply to inventories measured under the last-in, first-out method or the retail inventory method, and defines NRV as the "estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation." The ASU was adopted on a prospective basis by the Company on January 1, 2017. The adoption of this ASU did not have an impact on the Company's financial condition or results of operations. In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers (Topic 606).” This ASU provides a single principles-based, five-step model to be applied to all contracts with customers. The five steps are to identify the contract(s) with the customer, to identify the performance obligations in the contract, to determine the transaction price, to allocate the transaction price to the performance obligations in the contract and to recognize revenue when each performance obligation is satisfied. Revenue will be recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. During 2016, the FASB issued additional ASU’s which enhanced the originally issued guidance. These ASU’s encompassed narrow scope improvements and practical expedients along with providing further clarification on the accounting for intellectual property licenses, principal versus agent considerations and identifying performance obligations. In 2017, the Company addressed all significant areas of impact for ASU 2014-09 and finalized the documentation of formal policies in anticipation of adopting the standard on January 1, 2018. The adoption of this ASU will not have a significant impact on the Company’s consolidated financial position, results of operations, equity or cash flows as of the adoption date beyond the additional required disclosure. The Company has identified a subset of contracts with customers where services are provided that are both uniquely beneficial and separately identifiable from product sales and thus are considered separate performance obligations under the new guidance. Each of these individual service activities has been documented in scenario development and processes have been established to recognize revenue for each unique performance obligation in accordance with the guidance, when effective. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). In 2018, the Company anticipates adopting the new revenue standard using the modified retrospective method by recognizing the cumulative effect of applying the new revenue standard as an adjustment of less than $0.5 million in the opening balance of retained earnings. The transition adjustment will primarily be related to the deferral of revenue for a subset of the Company's service contracts. In 2018, the Company will also include the disclosures required by ASU 2014-09 in all reporting periods. Comparative information will not be restated and will continue to be reported under the accounting standards in effect for the period presented. |
Common Stock |
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Dec. 31, 2017 | |
Equity [Abstract] | |
Common Stock | Common Stock Common Stock and Rights Agreement The Company has Common Stock and also Common Share Purchase Rights that trade with the Common Stock. The Common Share Purchase Rights were issued pursuant to the shareholder rights plan discussed below. On February 15, 2008, the Board of Directors of the Company adopted a shareholder rights plan and declared a dividend of one Common Share Purchase Right for each outstanding share of Common Stock of the Company payable to the shareholders of record on May 26, 2008. The plan was effective as of May 27, 2008. Each right entitles the registered holder to purchase from the Company one share of Common Stock at a price of $100.00 per share, subject to adjustment. Subject to certain conditions, the rights are redeemable by the Company and are exchangeable for shares of Common Stock at a favorable price. The rights have no voting power and unless the rights are redeemed, exchanged or terminated earlier, they will expire on May 26, 2018. The rights are an embedded feature of the Company’s Common Stock and not a free-standing instrument, and therefore, do not require separate accounting treatment. On August 12, 2016, the Company announced a 2-for-1 stock split in the form of a 100% stock dividend payable on September 15, 2016 to shareholders of record at the close of business on August 31, 2016. In this report, all per share amounts and number of shares have been restated to reflect the stock split for all periods presented except for the total authorized shares which was 40 million both before and after the stock split. Stock Options Stock options to purchase 55,223 shares of the Company's Stock in 2017, 91,330 shares in 2016 and 95,144 shares in 2015 were not included in the computation of dilutive securities because their inclusion would have been anti-dilutive. |
Acquisitions |
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Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions On November 1, 2017, the Company acquired certain assets of Utility Metering Services, Inc.'s business Carolina Meter & Supply ("Carolina Meter") of Wilmington, North Carolina, which was one of the Company's distributors serving North Carolina, South Carolina and Virginia. The total purchase consideration for the Carolina Meter assets was $6.2 million, which included $2.0 million in cash and settlement of $4.2 million of pre-existing Company receivables. The Company's preliminary allocation of the purchase price at December 31, 2017 included $0.6 million of receivables, $0.3 million of inventory, $3.3 million of intangibles and $2.0 million of goodwill. The intangible assets acquired are primarily customer relationships with an estimated average useful life of 12 years. The preliminary allocation of the purchase price to the assets acquired was based upon the estimated fair values at the date of acquisition. As of December 31, 2017, the Company had not completed its analysis for estimating the fair value of the assets acquired. The Carolina Meter acquisition was accounted for under the purchase method, and accordingly, the results of operations were included in the Company's financial statements from the date of acquisition. The acquisition did not have a material impact on the Company's consolidated financial statements or the notes thereto. On May 1, 2017, the Company acquired 100% of the outstanding common stock of D-Flow Technology AB ("D-Flow") of Luleå, Sweden. The D-Flow acquisition facilitates the continued advancement of the existing E-Series® ultrasonic product line while also adding a technology center for the Company. The purchase price was approximately $23.2 million in cash, plus a small working capital adjustment. The purchase price included $5.4 million in payments that are anticipated to be made in 2018 which are recorded in payables and other accrued liabilities on the Consolidated Balance Sheets at December 31, 2017. The Company's preliminary allocation of the purchase price included approximately $0.3 million of receivables, $0.6 million of inventory, $0.2 million of property, plant and equipment, $10.9 million of intangibles and $11.8 million of goodwill. The majority of the intangible assets acquired related to ultrasonic technology. The Company also assumed $0.6 million of liabilities as part of the acquisition. As of December 31, 2017, the Company had not completed its analysis for estimating the fair value of the assets and liabilities acquired. The D-Flow acquisition was accounted for under the purchase method, and accordingly, the results of operations were included in the Company's financial statements from the date of acquisition. The acquisition did not have a material impact on the Company's consolidated condensed financial statements or the notes thereto. On October 20, 2016, the Company acquired certain assets of Precision Flow Measurement, Inc., doing business as Nice Instrumentation, of Manalapan Township, New Jersey. The acquisition adds a new technology for the measurement of steam to the Company's HVAC line of products. The total purchase consideration for the Nice Instrumentation assets was $2.0 million, which included a $0.2 million payment after the first production run that occurred in January 2017. The Company's preliminary allocation of the purchase price at December 31, 2016 included approximately $15,000 of inventory and equipment, $0.7 million of intangibles and $1.3 million of goodwill. The intangible assets acquired are primarily customer technology with an estimated average useful life of 15 years. The preliminary allocation of the purchase price to the assets acquired was based upon the estimated fair values at the date of acquisition. In 2017, the Company completed its analysis for estimating the fair value of the assets acquired with no additional adjustments. The Nice Instrumentation acquisition was accounted for under the purchase method, and accordingly, the results of operations were included in the Company's financial statements from the date of acquisition. The acquisition did not have a material impact on the Company's consolidated financial statements or the notes thereto. On August 17, 2015, the Company acquired certain assets of United Utilities, Inc. of Smyrna, Tennessee, which was one of the Company's distributors serving Tennessee and Georgia. The total purchase consideration for the United Utilities assets was $3.3 million, which included $0.4 million in cash and settlement of $2.9 million of pre-existing Company receivables. The Company's preliminary allocation of the purchase price at December 31, 2015 included $0.8 million of receivables, $0.4 million of inventory, $0.1 million of property, plant and equipment, $1.7 million of intangibles and $0.3 million of goodwill. The intangible assets acquired are primarily customer relationships with an estimated average useful life of 12 years. The preliminary allocation of the purchase price to the assets acquired was based upon the estimated fair values at the date of acquisition. In 2016, the Company completed its analysis for estimating the fair value of the assets acquired with no additional adjustments. The United Utilities acquisition was accounted for under the purchase method, and accordingly, the results of operations were included in the Company's financial statements from the date of acquisition. The acquisition did not have a material impact on the Company's consolidated financial statements or the notes thereto. |
Short-term Debt and Credit Lines |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term Debt and Credit Lines | Short-term Debt and Credit Lines Short-term debt at December 31, 2017 and 2016 consisted of:
Included in notes payable to banks at December 31, 2017 was $4.8 million outstanding under a 4.0 million Euro-based revolving loan facility that does not expire, and which bore interest at 1.13%. Included in notes payable to banks at December 31, 2016 was $4.2 million outstanding under a 4.0 million Euro-based revolving loan facility that does not expire, and which bore interest at 1.13%. In September 2016, the Company amended its May 2012 credit agreement with its primary lender to a three-year $120.0 million line of credit that supports commercial paper (up to $70.0 million) and includes $5.0 million of a Euro line of credit. Borrowings of commercial paper bore interest at 2.10% in 2017 and 1.49% in 2016. Under the principal line of credit, the Company had $85.3 million of unused credit lines available out of the total of $88.8 million available short-term credit lines at December 31, 2017. While the facility is unsecured, there are a number of financial covenants with which the Company must comply, and the Company was in compliance as of December 31, 2017. |
Stock Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Compensation | Stock Compensation As of December 31, 2017, the Company has an Omnibus Incentive Plan under which 1,400,000 shares are reserved for restricted stock and stock options grants for employees, as well as stock grants for directors. The plan was originally approved in 2011 and replaced all prior stock-based plans except for shares and options previously issued under those plans. As of December 31, 2017 and 2016, there were 629,615 shares and 741,396 shares, respectively, of the Company’s Common Stock available for grant under the 2011 Omnibus Incentive Plan. The Company recognizes the cost of stock-based awards in net earnings for all of its stock-based compensation plans on a straight-line basis over the service period of the awards. The following sections describe the three types of grants in more detail. Stock Options The Company estimates the fair value of its option awards using the Black-Scholes option-pricing formula, and records compensation expense for stock options ratably over the stock option grant’s vesting period. Stock option compensation expense recognized by the Company for the year ended December 31, 2017 related to stock options was $0.7 million in 2017 compared to $0.5 million in both 2016 and 2015. The following table summarizes the transactions of the Company’s stock option plans for the three-year period ended December 31, 2017:
The following assumptions were used for valuing options granted in the years ended December 31:
The expected life is based on historical exercise behavior and the projected exercise of unexercised stock options. The risk-free interest rate is based on the U.S. Treasury yield curve in effect on the date of grant for the respective expected life of the option. The expected dividend yield is based on the expected annual dividends divided by the grant date market value of the Company’s Common Stock. The expected volatility is based on the historical volatility of the Company’s Common Stock. The following table summarizes the aggregate intrinsic value related to options exercised, outstanding and exercisable as of and for the years ended December 31:
As of December 31, 2017, the unrecognized compensation cost related to stock options was approximately $1.4 million, which will be recognized over a weighted average period of 1.9 years. Director Stock Grant Non-employee directors receive an annual award of $54,000 worth of shares of the Company’s Common Stock under the shareholder-approved 2011 Omnibus Incentive Plan. The Company values stock grants for directors on the closing price of the Company’s stock on the day the grant was awarded. The Company records compensation expense for this plan ratably over the annual service period beginning May 1. Director stock compensation expense recognized by the Company for the year ended December 31, 2017 was $0.5 million compared to $0.4 million in both 2016 and 2015. As of December 31, 2017, the unrecognized compensation cost related to the director stock award that is expected to be recognized over the remaining four months is estimated to be approximately $0.2 million. Restricted Stock The Company periodically issues nonvested shares of the Company's Common Stock to certain eligible employees, generally with a three-year cliff vesting period contingent on employment. The Company values restricted stock on the closing price of the Company's stock on the day the grant was awarded. The Company records compensation expense for this plan ratably over the vesting periods. Nonvested stock compensation expense recognized by the Company for the year ended December 31, 2017 was $1.1 million compared to $1.0 million in 2016 and $1.1 million in 2015. The fair value of nonvested shares is determined based on the market price of the shares on the grant date.
As of December 31, 2017, there was $1.9 million of unrecognized compensation cost related to nonvested restricted stock that is expected to be recognized over a weighted average period of 1.7 years. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Commitments The Company makes commitments in the normal course of business. The Company leases equipment and facilities under non-cancelable operating leases, some of which contain renewal options. Total future minimum lease payments consisted of the following at December 31, 2017:
Total rental expense charged to operations under all operating leases was $3.6 million, $3.3 million and $3.2 million in 2017, 2016 and 2015, respectively. Contingencies In the normal course of business, the Company is named in legal proceedings. There are currently no material legal proceedings pending with respect to the Company. The Company is subject to contingencies related to environmental laws and regulations. A future change in circumstances with respect to specific matters or with respect to sites formerly or currently owned or operated by the Company, off-site disposal locations used by the Company, and property owned by third parties that is near such sites, could result in future costs to the Company and such amounts could be material. Expenditures for compliance with environmental control provisions and regulations during 2017, 2016 and 2015 were not material. The Company relies on single suppliers for most brass castings and certain resin and electronic subassemblies in several of its product lines. The Company believes these items would be available from other sources, but that the loss of certain suppliers would result in a higher cost of materials, delivery delays, short-term increases in inventory and higher quality control costs in the short term. 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. The Company reevaluates its exposures on a periodic basis and makes adjustments to reserves as appropriate. |
Employee Benefit Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans The Company maintains a non-contributory defined benefit pension plan that covers substantially all U.S. employees who were employed at December 31, 2011. After that date, no further benefits are being accrued in this plan. For the frozen pension plan, benefits are based primarily on years of service and, for certain employees, levels of compensation. The Company also maintains supplemental non-qualified plans for certain officers and other key employees, and an Employee Savings and Stock Option Plan (“ESSOP”) for the majority of the U.S. employees. The Company also has a postretirement healthcare benefit plan that provides medical benefits for certain U.S. retirees and eligible dependents hired prior to November 1, 2004. Employees are eligible to receive postretirement healthcare benefits upon meeting certain age and service requirements. No employees hired after October 31, 2004 are eligible to receive these benefits. This plan requires employee contributions to offset benefit costs. As of December 31, 2017, the Company changed the approach utilized to estimate the service and interest cost components of net periodic benefit cost for our defined benefit pension and other postretirement benefit plans. Historically, the Company estimated the service and interest cost components using a single weighted average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. As of December 31, 2017, the Company utilized a spot rate approach for the estimation of service and interest cost for our plans by applying specific spot rates along the yield curve to the relevant projected cash flows, to provide a better estimate of future service and interest costs. This change does not affect the measurement of total benefit obligations. The change will be accounted for as a change in estimate that is inseparable from a change in accounting principle and, accordingly, will be accounted for prospectively starting in fiscal year 2018. Service and interest costs are expected to be $76,000 and $27,000 lower in 2018 for our defined benefit pension and other postretirement benefit plans, respectively, as a result of using the spot rate approach compared to the historical approach. Amounts included in accumulated other comprehensive loss, net of tax, at December 31, 2017 that have not yet been recognized in net periodic benefit cost are as follows:
Amounts included in accumulated other comprehensive loss, net of tax, at December 31, 2017 expected to be recognized in net periodic benefit cost during the fiscal year ending December 31, 2018 are as follows:
In 2017, the Company made the decision to terminate its pension plan and has applied for regulatory approvals to do so. Because the termination is contingent on receiving these regulatory approvals and the Company can still rescind its decision, no accounting recognition will be made for this transaction until the actual termination takes place. Qualified Pension Plan The Company maintains a non-contributory defined benefit pension plan (sometimes referred to as the “qualified pension plan”) for certain employees. On December 31, 2010, the Company froze the qualified pension plan for its non-union participants and formed a new defined contribution feature within the ESSOP plan in which each employee received a similar benefit. On December 31, 2011, the Company froze the qualified pension plan for its union participants and included them in the same defined contribution feature within the ESSOP. After December 31, 2011, employees receive no future benefits under the qualified pension benefit plan as benefits were frozen and the employees now receive a defined contribution in its place. Employees will continue to earn returns on their frozen balances. The following table sets forth the components of net periodic pension cost for the years ended December 31, 2017, 2016 and 2015 based on a December 31 measurement date:
Actuarial assumptions used in the determination of the net periodic pension cost are:
The Company's discount rate assumptions for the qualified pension plan are based on the average yield of a hypothetical high quality bond portfolio with maturities that approximately match the estimated cash flow needs of the plan. The assumptions for expected long-term rates of return on assets are based on historical experience and estimated future investment returns, taking into consideration anticipated asset allocations, investment strategies and the views of various investment professionals. The use of these assumptions can cause volatility if actual results differ from expected results. The following table provides a reconciliation of benefit obligations, plan assets and funded status based on a December 31 measurement date:
The actuarial assumption used in the determination of the benefit obligation of the above data is:
The fair value of the qualified pension plan assets was $41.5 million at December 31, 2017 and $42.1 million at December 31, 2016. The variation in the fair value of the assets between years was due to the change in the market value of the underlying investments and benefits paid. The Company intends to terminate the pension plan in 2018 subject to regulatory approval. Until regulatory approval is obtained, no accounting recognition will be made. However, given the Company's plan to terminate, the estimated benefit payments for lump sums expected to be paid out to participants and the amount expected to be paid for annuity contracts in anticipation of terminating the plan in 2018 totals $43.3 million. The underlying plan benefits provided to participants in future years is expected to be as follows: 2018 - $17.8 million, 2019 - $2.2 million, 2020 - $2.2 million, 2021 - $2.1 million, 2022 - $2.1 million and 2023 - 2027 - $9.0 million. A voluntary contribution of $0.8 million was made in September 2017 related to the 2016 plan year. As of the most recent actuarial measurement date, the Company is not required to make a minimum contribution for the 2018 calendar year. Historically, the Company employed a total return on investment approach whereby a mix of equities and fixed income investments were used to maximize the long-term return of plan assets for a prudent level of risk. Because of volatility in market returns and the plan’s current funding status, the decision was made in 2014 to move towards a liability driven investing strategy whereby the assets are primarily fixed income investments. The fixed income investments that were chosen under this strategy, while not precisely the same, are meant to parallel the investments selected in determining the discount rate used to calculate the Company’s pension liability. In November 2016, the Company further modified the investment policy to attain a portfolio that consists of intermediate and short-duration investment grade bonds along with a mid-duration long credit fund. The objective of this strategy is to maintain the funding status of the plan by eliminating equity exposure and minimizing interest rate risk. The remaining equity securities at year-end were diversified across various investment categories. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements and periodic asset/liability studies. Accounting Standards Update 2013-09 “Fair Value Measurement (Topic 820),” establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels: Level 1 inputs consist of unadjusted quoted prices in active markets for identical assets and have the highest priority. Level 2 inputs consist of inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for determining the fair value of assets or liabilities that reflect assumptions that market participants would use in pricing assets or liabilities. The plan uses appropriate valuation techniques based on the available inputs to measure the fair value of its investments. The fair value of the Company's qualified pension plan assets by category as of and for the years ended December 31 are as follows:
The pension plan has a separately determined accumulated benefit obligation that is the actuarial present value of benefits based upon service rendered and current and past compensation levels. Prior to December 31, 2012, this differed from the projected benefit obligation in that it included no assumption about future compensation levels. The accumulated benefit obligation was $42.9 million at December 31, 2017 and $42.0 million at December 31, 2016. Supplemental Non-qualified Unfunded Plans The Company also maintains supplemental non-qualified unfunded plans for certain officers and other key employees. Expense for these plans was $0.2 million for the year ended 2017, $0.3 million for the year ended 2016, and $0.2 million for the year ended 2015. The amount accrued was $2.1 million and $1.9 million as of December 31, 2017 and 2016, respectively. Amounts were determined based on similar assumptions as the qualified pension plan as of the December 31 measurement date for 2017 and 2016. Other Postretirement Benefits The Company has a postretirement plan that provides medical benefits for certain U.S. retirees and eligible dependents hired prior to November 1, 2004. The following table sets forth the components of net periodic postretirement benefit cost for the years ended December 31, 2017, 2016 and 2015:
The discount rate used to measure the net periodic postretirement benefit cost was 4.16% for 2017, 4.39% for 2016 and 4.01% for 2015. It is the Company's policy to fund healthcare benefits on a cash basis. Because the plan is unfunded, there are no plan assets. The following table provides a reconciliation of the projected benefit obligation at the Company's December 31 measurement date:
The amounts recognized in the Consolidated Balance Sheets at December 31 are:
The discount rate used to measure the accumulated postretirement benefit obligation was 3.65% for 2017 and 4.15% for 2016. The Company's discount rate assumptions for its postretirement benefit plan are based on the average yield of a hypothetical high quality bond portfolio with maturities that approximately match the estimated cash flow needs of the plan. Because the plan requires the Company to establish fixed Company contribution amounts for retiree healthcare benefits, future healthcare cost trends do not generally impact the Company's accruals or provisions. Estimated future benefit payments of postretirement benefits, assuming increased cost sharing, expected to be paid in each of the next five years beginning with 2018 are $0.4 million through 2022, with an aggregate of $2.1 million for the five years thereafter. These amounts can vary significantly from year to year because the cost sharing estimates can vary from actual expenses as the Company is self-insured. Badger Meter Employee Savings and Stock Ownership Plan In 2010, the Company restructured the outstanding debt of its ESSOP by loaning the ESSOP $0.5 million to repay a loan to a third party and loaning the ESSOP an additional $1.0 million to purchase additional shares of the Company’s Common Stock for future 401(k) savings plan matches under a program that will expire on December 31, 2020. Under this program, the Company agreed to pay the principal and interest on the new loan amount of $1.5 million. The receivable from the ESSOP and the related obligation were therefore netted to zero on the Company’s Consolidated Balance Sheets at December 31, 2017 and 2016. The terms of the loan call for equal payments of principal with the final payment due on December 31, 2020, and prepayments are allowed under the plan terms. At December 31, 2017, $0.5 million of the loan balance remained. The Company made principal payments of $154,000 in each of 2017, 2016 and 2015. The associated commitments released shares of Common Stock (19,417 shares in 2017 for the 2016 obligation, 11,583 shares in 2016 for the 2015 obligation, and 10,157 shares in 2015 for the 2014 obligation) for allocation to participants in the ESSOP. The ESSOP held unreleased shares of 81,827, 101,244 and 124,410 as of December 31, 2017, 2016 and 2015, respectively, with a fair value of $3.9 million, $3.7 million and $3.6 million as of December 31, 2017, 2016 and 2015, respectively. Unreleased shares are not considered outstanding for purposes of computing earnings per share. The ESSOP includes a voluntary 401(k) savings plan that allows certain employees to defer up to 20% of their income on a pretax basis subject to limits on maximum amounts. The Company matches 25% of each employee’s contribution, with the match percentage applying to a maximum of 7% of each employee's salary. The match is paid using the Company's Common Stock released through the ESSOP loan payments. For ESSOP shares purchased prior to 1993, compensation expense is recognized based on the original purchase price of the shares released and dividends on unreleased shares are charged to compensation expense. For shares purchased in or after 1993, expense is based on the market value of the shares on the date released and dividends on unreleased shares are charged to compensation expense. Compensation expense of $0.5 million was recognized for the match for 2017 compared to $0.4 million in both 2016 and 2015. On December 31, 2010, the Company froze the qualified pension plan for its non-union participants and formed a new defined contribution feature within the ESSOP plan in which each employee received a similar benefit. On December 31, 2011, the Company froze the qualified pension plan for its union participants and included them in the same defined contribution feature within the ESSOP. Compensation expense under the defined contribution feature totaled $2.8 million in both 2017 and 2016. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and recording the related deferred tax assets and liabilities. Details of earnings before income taxes are as follows:
The provision (benefit) for income taxes is as follows:
The provision for income tax from operations differs from the amount that would be provided by applying the statutory U.S. corporate income tax rate in each year due to the following items:
The components of deferred income taxes as of December 31 are as follows:
At December 31, 2017 and 2016, the Company had federal and state net operating loss carryforwards of $0.4 million and $1.6 million, respectively. The Company's U.S. federal and state net operating loss carryforwards expire between 2029 and 2033. At December 31, 2017 and 2016, the Company had federal general business credit carryforwards of $0.2 million. The Company’s U.S. federal tax credit carryforwards expire in 2033. The Company’s federal and state net operating loss and federal and state credit carryforwards are limited on an annual basis to $1.2 million under Internal Revenue Code Section 382 and Section 383. The federal net operating loss carryforwards must be fully utilized prior to the utilization of the federal credit carryforwards. During 2017, the Company recorded a valuation allowance of $0.6 million against a deferred tax asset related to an equity investment. As a result of the 2017 tax law change (discussed later in the footnote), the valuation allowance was adjusted to $0.4 million as of December 31, 2017. The Company considers the earnings in our non-U.S. subsidiaries to be indefinitely reinvested, and accordingly, recorded no deferred income taxes for potential withholding amounts in certain foreign countries. Changes in the Company's gross liability for unrecognized tax benefits, excluding interest and penalties, were as follows:
The Company does not expect a significant increase or decrease to the total amount of unrecognized tax benefits during the fiscal year ending December 31, 2018. To the extent these unrecognized tax benefits are ultimately recognized, they will impact the effective tax rate. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years prior to 2014, and, with few exceptions, state and local income tax examinations by tax authorities for years prior to 2013. The Company's policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. Accrued interest was less than $0.1 million at December 31, 2017 and 2016, respectively, and there were no penalties accrued in either year. On December 22, 2017, the President signed H.R.1, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (the “Tax Act”) (previously known as “The Tax Cuts and Jobs Act”). The Tax Act makes broad and complex changes to the U.S. tax code that affected 2017, including, but not limited to (i) reducing the future U.S. federal corporate tax rate from 35% to 21%; (ii) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; and (iii) bonus depreciation that will allow for full expensing of qualified property. The Tax Act also established new tax laws that will affect 2018, including, but not limited to (i) reduction of the U.S. federal corporate tax rate; (ii) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (iii) a new provision designed to tax global intangible low-taxed income (“GILTI”); (iv) the repeal of the domestic production activity deductions; (v) limitations on the deductibility of certain executive compensation; (vi) limitations on the use of foreign tax credits to reduce the U.S. income tax liability; and (vii) a new provision that allows a domestic corporation an immediate deduction for a portion of its foreign derived intangible income (“FDII”). The Securities and Exchange Commission staff issued Staff Accounting Bulletin (“SAB”) 118, which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASU 2016-16 "Income Taxes (Topic 740)". In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASU 2016-16 is complete. To the extent that a company’s accounting for a certain income tax effect of the Tax Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASU 2016-16 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. The Company's accounting for the certain elements of the Tax Act is incomplete. However, reasonable estimates of the effect were able to be made and, therefore, provisional estimates were recorded for these items. In connection with the initial analysis of the impact of the Tax Act, the Company recorded an immaterial discrete adjustment in the period ending December 31, 2017. This provisional estimate consisted of a net tax expense of $0.8 million for the one-time transition tax and a net tax benefit of $0.8 million related to the revaluation of deferred tax assets and liabilities, caused by the new lower corporate tax rate. To determine the transition tax, the Company determined the amount of post-1986 accumulated earnings and profits of the relevant subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings. While a reasonable estimate of the transition tax was able to be made, the Company continues to gather additional information to more precisely compute the final amount. Likewise, while a reasonable estimate on the impact of the reduction to the corporate tax rate was able to be made, it may be affected by other analysis related to the Tax Act, including, but not limited to, the state tax effect of adjustments made to federal temporary differences. |
Long-Term Debt |
12 Months Ended |
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Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt In 2010, the Company restructured the outstanding debt of its ESSOP by loaning the ESSOP $0.5 million to repay a loan to a third party and loaning the ESSOP an additional $1.0 million to purchase additional shares of the Company’s Common Stock for future 401(k) savings plan matches under a program that will expire on December 31, 2020. Under this program, the Company agreed to pay the principal and interest on the new loan amount of $1.5 million. The receivable from the ESSOP and the related obligation were therefore netted to zero on the Company’s Consolidated Balance Sheets at December 31, 2017 and 2016. The terms of the loan call for equal payments of principal with the final payment due on December 31, 2020, and prepayments are allowed under the plan terms. At December 31, 2017, $0.5 million of the loan balance remained. |
Industry Segment and Geographic Areas |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Industry Segment and Geographic Areas | Industry Segment and Geographic Areas The Company is an innovator, manufacturer and a marketer of products incorporating flow measurement, control and communication solutions, which comprise one reportable segment. The Company manages and evaluates its operations as one segment primarily due to similarities in the nature of the products, production processes, customers and methods of distribution. Information regarding revenues by geographic area is as follows:
Information regarding assets by geographic area is as follows:
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Unaudited: Quarterly Results of Operations, Common Stock Price and Dividends |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited: Quarterly Results of Operations, Common Stock Price and Dividends | Unaudited: Quarterly Results of Operations, Common Stock Price and Dividends
The Company's Common Stock is listed on the New York Stock Exchange under the symbol BMI. Earnings per share are computed independently for each quarter. As such, the annual per share amount may not equal the sum of the quarterly amounts due to rounding. The Company currently anticipates continuing to pay cash dividends. Shareholders of record as of December 31, 2017 and 2016 totaled 909 and 922, respectively. Voting trusts and street name shareholders are counted as single shareholders for this purpose. |
Summary of Significant Accounting Policies (Policies) |
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Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Consolidation | Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation. |
Receivables | Receivables Receivables consist primarily of trade receivables. The Company does not require collateral or other security and evaluates the collectability of its receivables based on a number of factors. An allowance for doubtful accounts is recorded for significant past due receivable balances based on a review of the past due items and the customer's ability and likelihood to pay, as well as applying a historical write-off ratio to the remaining balances. |
Inventories | Inventories Inventories are valued at the lower of cost or market. Cost is determined using the first-in, first-out method. The Company estimates and records provisions for obsolete inventories. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is provided over the estimated useful lives of the respective assets by the straight-line method. The estimated useful lives of assets are: for land improvements, 15 years; for buildings and improvements, 10 to 39 years; and for machinery and equipment, 3 to 20 years. |
Capitalized Software and Hardware | Capitalized Software and Hardware Capitalized internal use software and hardware included in other assets in the Consolidated Balance Sheets were $6.0 million and $3.3 million at December 31, 2017 and 2016, respectively. These amounts are amortized on a straight-line basis over the estimated useful lives of the software and/or hardware, ranging from 1 to 5 years. |
Long-Lived Assets | Long-Lived Assets Property, plant and equipment and identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of the expected undiscounted cash flows is less than the carrying value of the related asset or group of assets, a loss is recognized for the difference between the fair value and carrying value of the asset or group of assets. |
Intangible Assets | Intangible Assets Intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from 5 to 20 years. The Company does not have any intangible assets deemed to have indefinite lives. |
Goodwill | Goodwill Goodwill is tested for impairment annually during the fourth fiscal quarter or more frequently if an event indicates that the goodwill might be impaired. Potential impairment is identified by comparing the fair value of a reporting unit with its carrying value. |
Revenue Recognition | Revenue Recognition Revenues are generally recognized upon shipment of product, which corresponds with the transfer of title. The costs of shipping are generally billed to the customer upon shipment and are included in cost of sales. A small portion of the Company's sales includes shipments of products combined with services, such as meters sold with installation. The product and installation components of these multiple deliverable arrangements are considered separate units of accounting. The value of these separate units of accounting is determined based on their relative fair values determined on a stand-alone basis. Revenue is generally recognized when the last element of the multiple deliverable is delivered, which corresponds with installation and acceptance by the customer. The Company also sells a small number of extended support service agreements on certain products for the period subsequent to the normal support service provided with the original product sale. Revenue is recognized over the service agreement period, which is generally one year. In 2014, the Company began offering software as a service with its BEACON AMA product and revenue for this service is recognized on a monthly basis as the service is performed. |
Warranty and After-Sale Costs | Warranty and After-Sale Costs The Company estimates and records provisions for warranties and other after-sale costs in the period in which the sale is recorded, based on a lag factor and historical warranty claim experience. After-sale costs represent a variety of activities outside of the written warranty policy, such as investigation of unanticipated problems after the customer has installed the product, or analysis of water quality issues. |
Research and Development | Research and Development Research and development costs are charged to expense as incurred |
Stock-Based Compensation Plans | Stock-Based Compensation Plans As of December 31, 2017, the Company has an Omnibus Incentive Plan under which 1,400,000 shares are reserved for restricted stock and stock option grants for employees as well as stock grants for directors as described in Note 5 “Stock Compensation.” The plan was originally approved in 2011 and replaced all prior stock-based plans except for shares and options previously issued under those plans. The Company recognizes the cost of stock-based awards in net earnings for all of its stock-based compensation plans on a straight-line basis over the service period of the awards. The Company estimates the fair value of its option awards using the Black-Scholes option-pricing formula, and records compensation expense for stock options ratably over the stock option grant's vesting period. The Company values restricted stock and stock grants for directors on the closing price of the Company's stock on the day the grant was awarded. |
Healthcare | Healthcare The Company estimates and records provisions for healthcare claims incurred but not reported, based on medical cost trend analysis, reviews of subsequent payments made and estimates of unbilled amounts. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Fair Value Measurements of Financial Instruments | Fair Value Measurements of Financial Instruments The carrying amounts of cash, receivables and payables in the financial statements approximate their fair values due to the short-term nature of these financial instruments. Short-term debt is comprised of notes payable drawn against the Company's lines of credit and commercial paper. Because of its short-term nature, the carrying amount of the short-term debt also approximates fair value. Included in other assets are insurance policies on various individuals who were associated with the Company. The carrying amounts of these insurance policies approximate their fair value. |
Subsequent Events | Subsequent Events The Company evaluates subsequent events at the date of the balance sheet as well as conditions that arise after the balance sheet date but before the financial statements are issued. The effects of conditions that existed at the balance sheet date are recognized in the financial statements. Events and conditions arising after the balance sheet date but before the financial statements are issued are evaluated to determine if disclosure is required to keep the financial statements from being misleading. To the extent such events and conditions exist, if any, disclosures are made regarding the nature of events and the estimated financial effects for those events and conditions. For purposes of preparing the accompanying consolidated financial statements and the notes to these financial statements, the Company evaluated subsequent events through the date the accompanying financial statements were issued. |
New Pronouncements | New Pronouncements In February 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-02 "Income Statement - Reporting Comprehensive Income (Topic 220)." Under existing U.S. generally accepted accounting principles, the effects of changes in tax rates and laws on deferred tax balances are recorded as a component of income tax expense in the period in which the law was enacted. When deferred tax balances related to items originally recorded in accumulated other comprehensive income are adjusted, certain tax effects become stranded in accumulated other comprehensive income. The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendments in this ASU also require certain disclosures about stranded tax effects. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption in any period is permitted. The Company’s provisional adjustments recorded in 2017 to account for the impact of the Tax Cuts and Jobs Act resulted in stranded tax effects. The Company is currently evaluating the timing and impact of adopting ASU 2018-02. In May 2017, the FASB issued ASU 2017-09 “Compensation - Stock Compensation (Topic 718),” which clarifies when a change to terms or conditions of a share-based payment award must be accounted for as a modification. The new guidance requires modification accounting if the vesting condition, fair value or the award classification is not the same both before and after a change to the terms and conditions of the award. The new guidance is effective on a prospective basis beginning on January 1, 2018 and early adoption is permitted. The Company does not expect the adoption of this standard to have an impact on its consolidated financial statements as it is not the Company’s practice to change the terms or conditions of share-based payment awards after they are granted. In March 2017, the FASB issued ASU 2017-07 “Compensation - Retirement Benefits (Topic 715),” which changes the presentation of defined benefit and post-retirement benefit plan expense on the income statement by requiring separation between operating and non-operating expense. Under the ASU, the service cost of net periodic benefit expense is an operating expense that will be reported with similar compensation costs. The non-operating components, which include all other components of net periodic benefit expense, are reported outside of operating income. The ASU also stipulates that only the service cost component of pension and postretirement benefit costs is eligible for capitalization. The ASU is effective for the Company beginning on January 1, 2018. Application is retrospective for the presentation of the components of these benefit costs and prospective for the capitalization of service costs. The Company's net periodic benefit cost components are disclosed in Note 3 "Employee Benefit Plans." In January 2017, the FASB issued ASU 2017-04 "Intangibles - Goodwill and Other (Topic 350)." The update requires a single-step quantitative test to measure potential impairment based on the excess of a reporting unit's carrying amount over its fair value. A qualitative assessment can still be completed first for an entity to determine if a quantitative impairment test is necessary. The ASU is effective for fiscal year 2021 and is to be adopted on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company anticipates that the adoption of this standard will have no impact on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02 "Leases (Topic 842)," which requires lessees to record most leases on their balance sheets. Lessees initially recognize a lease liability (measured at the present value of the lease payments over the lease term) and a right-of-use ("ROU") asset (measured at the lease liability amount, adjusted for lease prepayments, lease incentives received and the lessee's initial direct costs). Lessees can make an accounting policy election not to recognize ROU assets and lease liabilities for leases with a lease term of 12 months or less as long as the leases do not include options to purchase the underlying assets that the lessee is reasonably certain to exercise. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The ASU is effective for the Company beginning on January 1, 2019 and early adoption is permitted. The standard requires the use of a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited. The Company is continuing to evaluate the impact that the adoption of this guidance will have on its financial condition, results of operations and the presentation of its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11 "Inventory (Topic 330)," which requires entities to measure inventories at the lower of cost or net realizable value ("NRV"). This simplifies the evaluation from the current method of lower of cost or market, where market is based on one of three measures (i.e. replacement cost, net realizable value, or net realizable value less a normal profit margin). The ASU does not apply to inventories measured under the last-in, first-out method or the retail inventory method, and defines NRV as the "estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation." The ASU was adopted on a prospective basis by the Company on January 1, 2017. The adoption of this ASU did not have an impact on the Company's financial condition or results of operations. In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers (Topic 606).” This ASU provides a single principles-based, five-step model to be applied to all contracts with customers. The five steps are to identify the contract(s) with the customer, to identify the performance obligations in the contract, to determine the transaction price, to allocate the transaction price to the performance obligations in the contract and to recognize revenue when each performance obligation is satisfied. Revenue will be recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. During 2016, the FASB issued additional ASU’s which enhanced the originally issued guidance. These ASU’s encompassed narrow scope improvements and practical expedients along with providing further clarification on the accounting for intellectual property licenses, principal versus agent considerations and identifying performance obligations. In 2017, the Company addressed all significant areas of impact for ASU 2014-09 and finalized the documentation of formal policies in anticipation of adopting the standard on January 1, 2018. The adoption of this ASU will not have a significant impact on the Company’s consolidated financial position, results of operations, equity or cash flows as of the adoption date beyond the additional required disclosure. The Company has identified a subset of contracts with customers where services are provided that are both uniquely beneficial and separately identifiable from product sales and thus are considered separate performance obligations under the new guidance. Each of these individual service activities has been documented in scenario development and processes have been established to recognize revenue for each unique performance obligation in accordance with the guidance, when effective. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). In 2018, the Company anticipates adopting the new revenue standard using the modified retrospective method by recognizing the cumulative effect of applying the new revenue standard as an adjustment of less than $0.5 million in the opening balance of retained earnings. The transition adjustment will primarily be related to the deferral of revenue for a subset of the Company's service contracts. In 2018, the Company will also include the disclosures required by ASU 2014-09 in all reporting periods. Comparative information will not be restated and will continue to be reported under the accounting standards in effect for the period presented. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Allowance for Doubtful Accounts | Changes in the Company's allowance for doubtful accounts are as follows:
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Schedule of Changes to Obsolete Inventories Reserve | Changes to the Company's obsolete inventories reserve are as follows:
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Schedule of Carrying Value and Accumulated Amortization of Intangible Assets | The carrying value and accumulated amortization by major class of intangible assets are as follows:
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Schedule of Changes in Warranty and After-Sale Costs Reserve | Changes in the Company's warranty and after-sale costs reserve are as follows:
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Schedule of Accumulated Other Comprehensive Loss | Components of accumulated other comprehensive loss at December 31, 2017 are as follows:
Details of reclassifications out of accumulated other comprehensive loss during 2017 are as follows:
Components of accumulated other comprehensive loss at December 31, 2016 are as follows:
Details of reclassifications out of accumulated other comprehensive loss during 2016 are as follows:
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Short-term Debt and Credit Lines (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Short-Term Debt | Short-term debt at December 31, 2017 and 2016 consisted of:
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Stock Compensation (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Transactions of Stock Option Plans | The following table summarizes the transactions of the Company’s stock option plans for the three-year period ended December 31, 2017:
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Assumptions Used for Valuing Options Granted | The following assumptions were used for valuing options granted in the years ended December 31:
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Summary of Aggregate Intrinsic Value Related to Options | The following table summarizes the aggregate intrinsic value related to options exercised, outstanding and exercisable as of and for the years ended December 31:
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Schedule of Fair Value of Nonvested Shares | The fair value of nonvested shares is determined based on the market price of the shares on the grant date.
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Commitments and Contingencies (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Lease Payments | Total future minimum lease payments consisted of the following at December 31, 2017:
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Employee Benefit Plans (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amounts Not Yet Recognized In Net Periodic Benefit Cost | Amounts included in accumulated other comprehensive loss, net of tax, at December 31, 2017 that have not yet been recognized in net periodic benefit cost are as follows:
|
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Schedule of Amounts Expected to be Recognized in Net Periodic Benefit Cost | Amounts included in accumulated other comprehensive loss, net of tax, at December 31, 2017 expected to be recognized in net periodic benefit cost during the fiscal year ending December 31, 2018 are as follows:
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Components of Net Periodic Pension/Postretirement Benefit Cost | The following table sets forth the components of net periodic postretirement benefit cost for the years ended December 31, 2017, 2016 and 2015:
The following table sets forth the components of net periodic pension cost for the years ended December 31, 2017, 2016 and 2015 based on a December 31 measurement date:
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Schedule of Actuarial Assumptions | Actuarial assumptions used in the determination of the net periodic pension cost are:
The actuarial assumption used in the determination of the benefit obligation of the above data is:
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Reconciliation of Benefit Obligations, Plan Assets and Funded Status | The following table provides a reconciliation of benefit obligations, plan assets and funded status based on a December 31 measurement date:
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Schedule of Fair Value of Qualified Pension Plan Assets | The fair value of the Company's qualified pension plan assets by category as of and for the years ended December 31 are as follows:
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Reconciliation of Projected Benefit Obligation | The following table provides a reconciliation of the projected benefit obligation at the Company's December 31 measurement date:
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Schedule of Amounts Recognized in Consolidated Balance Sheets | The amounts recognized in the Consolidated Balance Sheets at December 31 are:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Details of Earnings Before Income Taxes | Details of earnings before income taxes are as follows:
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Schedule of Provision (Benefit) for Income Taxes | The provision (benefit) for income taxes is as follows:
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Reconciliation of Provision for Income Taxes | The provision for income tax from operations differs from the amount that would be provided by applying the statutory U.S. corporate income tax rate in each year due to the following items:
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Components of Deferred Income Taxes | The components of deferred income taxes as of December 31 are as follows:
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Schedule of Changes in Gross Liability for Unrecognized Tax Benefits | Changes in the Company's gross liability for unrecognized tax benefits, excluding interest and penalties, were as follows:
|
Industry Segment and Geographic Areas (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Information Regarding Revenues and Assets by Geographic Area | Information regarding revenues by geographic area is as follows:
Information regarding assets by geographic area is as follows:
|
Unaudited: Quarterly Results of Operations, Common Stock Price and Dividends (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information |
|
Summary of Significant Accounting Policies - Profile (Narrative) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2017
product_line
| |
Accounting Policies [Abstract] | |
Number of product lines | 2 |
Percentage of products used in water applications (as a percent) | 85.00% |
Summary of Significant Accounting Policies - Schedule of Changes in Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Allowance for Doubtful Accounts Receivable | |||
Balance at beginning of year | $ 425 | $ 477 | $ 811 |
Provision and reserve adjustments | 285 | 2 | (152) |
Write-offs less recoveries | (323) | (54) | (182) |
Balance at end of year | $ 387 | $ 425 | $ 477 |
Summary of Significant Accounting Policies - Schedule of Changes to Obsolete Inventories Reserve (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Obsolete Inventory Reserve | |||
Balance at beginning of year | $ 3,639 | $ 3,836 | $ 3,314 |
Net additions charged to earnings | 1,295 | 1,017 | 2,530 |
Disposals | (1,053) | (1,214) | (2,008) |
Balance at end of year | $ 3,881 | $ 3,639 | $ 3,836 |
Summary of Significant Accounting Policies - Property, Plant and Equipment (Narrative) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Land Improvements | |
Property, Plant and Equipment | |
Estimated useful lives | 15 years |
Building and Improvements | Minimum | |
Property, Plant and Equipment | |
Estimated useful lives | 10 years |
Building and Improvements | Maximum | |
Property, Plant and Equipment | |
Estimated useful lives | 39 years |
Machinery and Equipment | Minimum | |
Property, Plant and Equipment | |
Estimated useful lives | 3 years |
Machinery and Equipment | Maximum | |
Property, Plant and Equipment | |
Estimated useful lives | 20 years |
Summary of Significant Accounting Policies - Capitalized Software and Hardware (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Property, Plant and Equipment | |||
Amortization expense | $ 2.8 | $ 3.1 | $ 2.4 |
Prepaid Expenses and Other Current Assets | |||
Property, Plant and Equipment | |||
Capitalized internal use software and hardware | $ 6.0 | $ 3.3 | |
Minimum | |||
Property, Plant and Equipment | |||
Amortization period | 1 year | ||
Maximum | |||
Property, Plant and Equipment | |||
Amortization period | 5 years |
Summary of Significant Accounting Policies - Intangible Assets (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Finite-Lived Intangible Assets | |||
Amortization expense recognized | $ 6.8 | $ 6.1 | $ 6.1 |
Amortization expense expected to be recognized, 2018 | 7.2 | ||
Amortization expense expected to be recognized, 2019 | 6.9 | ||
Amortization expense expected to be recognized, 2020 | 6.7 | ||
Amortization expense expected to be recognized, 2021 | 6.6 | ||
Amortization expense expected to be recognized, 2022 | 5.6 | ||
Amortization expense expected to be recognized, thereafter | $ 26.4 | ||
Minimum | |||
Finite-Lived Intangible Assets | |||
Estimated useful lives | 5 years | ||
Maximum | |||
Finite-Lived Intangible Assets | |||
Estimated useful lives | 20 years |
Summary of Significant Accounting Policies - Goodwill (Narrative) (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Accounting Policies [Abstract] | ||
Goodwill | $ 67,424 | $ 49,314 |
Summary of Significant Accounting Policies - Revenue Recognition (Narrative) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Service agreement period | 1 year |
Summary of Significant Accounting Policies - Schedule of Changes in Warranty and After-Sale Costs Reserve (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Warranty and After-Sale Costs | |||
Balance at beginning of year | $ 2,779 | $ 3,133 | $ 1,739 |
Net additions charged to earnings | 4,520 | 3,559 | 1,559 |
Adjustments to pre-existing warranties | (439) | (554) | 1,278 |
Costs incurred | (3,493) | (3,359) | (1,443) |
Balance at end of year | $ 3,367 | $ 2,779 | $ 3,133 |
Summary of Significant Accounting Policies - Research and Development (Narrative) (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
| |
Accounting Policies [Abstract] | |
Research and development costs | $ 10.6 |
Summary of Significant Accounting Policies - Stock-Based Compensation Plans (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock compensation expense recognized | $ 1.8 | $ 1.6 | $ 1.5 |
Omnibus Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares reserved for future issuance (in shares) | 1,400,000 |
Summary of Significant Accounting Policies - Schedule of Reclassifications Out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Amortization of employee benefit plan items: | ||
Income tax impact | $ 300 | $ (1,000) |
Amount reclassified out of accumulated other comprehensive loss | (1,102) | 1,473 |
Amount reclassified out of accumulated other comprehensive loss | ||
Amortization of employee benefit plan items: | ||
Total before tax | (1,394) | 2,492 |
Income tax impact | 292 | (1,019) |
Amount reclassified out of accumulated other comprehensive loss | (1,102) | 1,473 |
Prior service cost | ||
Amortization of employee benefit plan items: | ||
Total before tax | (25) | (25) |
Settlement expense | ||
Amortization of employee benefit plan items: | ||
Total before tax | 641 | 1,510 |
Actuarial loss | ||
Amortization of employee benefit plan items: | ||
Total before tax | $ (2,010) | $ 1,007 |
Summary of Significant Accounting Policies - New Accounting Pronouncements (Details) $ in Millions |
Dec. 31, 2017
USD ($)
|
---|---|
Accounting Standards Update 2014-09 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect of new revenue standard, adjustment to retained earnings, less than | $ 0.5 |
Common Stock (Details) |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Sep. 15, 2016 |
Aug. 12, 2016
shares
|
Feb. 15, 2008
$ / shares
shares
|
Dec. 31, 2017
shares
|
Dec. 31, 2016
shares
|
Dec. 31, 2015
shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock split, conversion ratio | 2 | |||||
Stock dividend payable (as a percent) | 100.00% | |||||
Total authorized shares before and after stock split (in shares) | 40,000,000 | 40,000,000 | 40,000,000 | |||
Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Antidilutive stock options excluded from computation of earnings per share (in shares) | 55,223 | 91,330 | 95,144 | |||
Employee benefit stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common share purchase right dividend (in shares) | 1 | |||||
Number of common shares each right is entitled to (in shares) | 1 | |||||
Common share purchase right exercise price (in dollars per share) | $ / shares | $ 100.00 |
Short-term Debt and Credit Lines - Schedule of Short-Term Debt (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Short-term Debt | ||
Total short-term debt | $ 44,550 | $ 37,950 |
Notes payable to banks | ||
Short-term Debt | ||
Total short-term debt | 8,300 | 8,200 |
Commercial paper | ||
Short-term Debt | ||
Total short-term debt | $ 36,250 | $ 29,750 |
Short-term Debt and Credit Lines - Narrative (Details) |
1 Months Ended | |||||
---|---|---|---|---|---|---|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2017
EUR (€)
|
Sep. 30, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2016
EUR (€)
|
|
Line of Credit Facility | ||||||
Maximum amount issuable | $ 70,000,000.0 | |||||
Unused credit lines available | $ 85,300,000 | |||||
Line of Credit | ||||||
Line of Credit Facility | ||||||
Maximum borrowing capacity | $ 120,000,000.0 | |||||
Interest rate (as a percent) | 2.10% | 2.10% | 1.49% | 1.49% | ||
Line of credit period | 3 years | |||||
Foreign Line of Credit | ||||||
Line of Credit Facility | ||||||
Maximum amount issuable | $ 5,000,000.0 | |||||
Revolving Credit Facility | Euro-Based Revolving Loan Facility | ||||||
Line of Credit Facility | ||||||
Revolving loan facility | $ 4,800,000 | $ 4,200,000 | ||||
Maximum borrowing capacity | € | € 4,000,000 | € 4,000,000 | ||||
Interest rate (as a percent) | 1.13% | 1.13% | 1.13% | 1.13% | ||
Revolving Credit Facility | Line of Credit | ||||||
Line of Credit Facility | ||||||
Maximum borrowing capacity | € | € 88,800,000.0 |
Stock Compensation - Additional Information (Narrative) (Details) - shares |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares available for grant (in shares) | 629,615 | 741,396 |
Omnibus Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares reserve for future issuance (in shares) | 1,400,000 |
Stock Compensation - Stock Options (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock compensation expense | $ 1.8 | $ 1.6 | $ 1.5 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock compensation expense | 0.7 | $ 0.5 | $ 0.5 |
Unrecognized compensation cost related to stock options | $ 1.4 | ||
Weighted average period | 1 year 10 months 18 days |
Stock Compensation - Assumptions Used for Valuing Options Granted (Details) - Stock Options - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Per share fair value of options granted during the period (in dollars per share) | $ 14.38 | $ 13.58 |
Risk-free interest rate | 2.06% | 1.42% |
Dividend yield (as a percentage) | 1.22% | 1.16% |
Volatility factor (as a percentage) | 46.60% | 48.30% |
Weighted-average expected life in years | 5 years 3 months 18 days | 5 years 3 months 18 days |
Stock Compensation - Summary of Aggregate Intrinsic Value Related to Options (Details) - Omnibus Incentive Plan - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercised | $ 814 | $ 379 |
Outstanding | 7,966 | 4,288 |
Exercisable | $ 5,921 | $ 3,370 |
Stock Compensation - Director Stock Grant (Narrative) (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock compensation expense recognized | $ 1,800,000 | $ 1,600,000 | $ 1,500,000 |
Omnibus Incentive Plan | Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Annual share award (in shares) | 54,000 | ||
Total stock compensation expense recognized | $ 500,000 | $ 400,000 | $ 400,000 |
Remaining recognition period | 4 months | ||
Unrecognized compensation cost | $ 200,000 |
Stock Compensation - Restricted Stock (Narrative) (Details) - Restricted Stock - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Nonvested stock compensation expense | $ 1.1 | $ 1.0 | $ 1.1 |
Unrecognized compensation cost related to restricted stock | $ 1.9 | ||
Weighted average period | 1 year 8 months 7 days |
Stock Compensation - Schedule of Fair Value of Nonvested Shares (Details) - Restricted Stock - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Shares | |||
Beginning Balance (in shares) | 105,316 | 120,248 | 136,912 |
Granted (in shares) | 50,519 | 29,268 | 38,386 |
Vested (in shares) | (40,762) | (40,700) | (52,150) |
Forfeited (in shares) | (3,600) | (3,500) | (2,900) |
Ending Balance (in shares) | 111,473 | 105,316 | 120,248 |
Fair value per share | |||
Beginning balance (in dollars per share) | $ 29.41 | $ 26.99 | $ 23.16 |
Granted (in dollars per share) | 40.69 | 33.98 | 28.33 |
Vested (in dollars per share) | 27.18 | 25.56 | 18.08 |
Forfeited (in dollars per share) | 33.37 | 29.18 | 24.44 |
Ending balance (in dollars per share) | $ 35.21 | $ 29.41 | $ 26.99 |
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2018 | $ 2,448 |
2019 | 1,979 |
2020 | 1,782 |
2021 | 1,570 |
2022 | 1,126 |
Thereafter | 3,325 |
Total lease obligations | $ 12,230 |
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Commitments and Contingencies Disclosure [Abstract] | |||
Total rental expense charged to operations | $ 3.6 | $ 3.3 | $ 3.2 |
Employee Benefit Plans - Accounting Estimate Change (Narrative) (Details) - Change in Accounting Method Accounted for as Change in Estimate - Scenario, Forecast |
12 Months Ended |
---|---|
Dec. 31, 2018
USD ($)
| |
Change in Accounting Estimate [Line Items] | |
Service cost | $ 76,000 |
Interest cost | $ 27,000 |
Employee Benefit Plans - Schedule of Amounts Not Yet Recognized In Net Periodic Benefit Cost (Details) $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Pension plans | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Prior service cost | $ 0 |
Net actuarial loss | 11,517 |
Other postretirement benefits | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Prior service cost | (8) |
Net actuarial loss | $ (428) |
Employee Benefit Plans - Schedule of Amounts Expected to be Recognized in Net Periodic Benefit Cost (Details) $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Pension plans | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Prior service credit | $ 0 |
Net actuarial loss | 277 |
Other postretirement benefits | |
Defined Benefit Plans and Other Postretirement Benefit Plans | |
Prior service credit | (10) |
Net actuarial loss | $ (9) |
Employee Benefit Plans - Components of Net Periodic Pension/Postretirement Benefit Cost (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Pension plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost - benefits earned during the year | $ 2 | $ 3 | $ 4 |
Interest cost on projected benefit obligations | 1,228 | 1,711 | 1,769 |
Expected return on plan assets | 1,596 | 2,199 | 2,151 |
Amortization of net loss | 525 | 575 | 656 |
Settlement expense | 641 | 1,510 | 762 |
Net periodic pension/postretirement benefit cost | 800 | 1,600 | 1,040 |
Other postretirement benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost - benefits earned during the year | 121 | 137 | 147 |
Interest cost on projected benefit obligations | 195 | 257 | 251 |
Net gain | (49) | 0 | 0 |
Amortization of prior service (credit) cost | (25) | (25) | 53 |
Net periodic pension/postretirement benefit cost | $ 242 | $ 369 | $ 451 |
Employee Benefit Plans - Schedule of Actuarial Assumptions (Details) - Pension plans |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans | |||
Net periodic pension cost, Discount rate (as a percent) | 3.90% | 4.14% | 3.81% |
Expected long-term return on plan assets (as a percent) | 4.00% | 5.25% | 5.00% |
Benefit obligation, Discount rate (as a percent) | 2.00% | 3.94% |
Employee Benefit Plans - Qualified Pension Plan (Narrative) (Details) - USD ($) $ in Thousands |
1 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Estimated future benefit payments 2018 | $ 17,800 | |||
Estimated future benefit payments 2019 | 2,200 | |||
Estimated future benefit payments 2020 | 2,200 | |||
Estimated future benefit payments 2021 | 2,100 | |||
Estimated future benefit payments 2022 | 2,100 | |||
Estimated future benefit payments, five years thereafter | 9,000 | |||
Pension plans | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||||
Fair value of qualified plan assets | 41,517 | $ 42,061 | $ 43,603 | |
Expected future benefit and annuity contracts payments | 43,300 | |||
Voluntary contribution | $ 800 | |||
Accumulated benefit obligation | $ 42,900 | $ 42,000 |
Employee Benefit Plans - Supplemental Non-qualified Unfunded Plans (Narrative) (Details) - Officers and Key Employees - Other postretirement benefits - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Compensation expense | $ 0.2 | $ 0.3 | $ 0.2 |
Amount accrued | $ 2.1 | $ 1.9 |
Employee Benefit Plans - Schedule of Amounts Recognized in Consolidated Balance Sheets (Details) - Other postretirement benefits - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Defined Benefit Plans and Other Postretirement Benefit Plans | ||
Amounts recognized at December 31 | $ 6,073 | $ 6,131 |
Accrued compensation and employee benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||
Amounts recognized at December 31 | 370 | 378 |
Accrued non-pension postretirement benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans | ||
Amounts recognized at December 31 | $ 5,703 | $ 5,753 |
Income Taxes - Details of Earnings Before Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
Domestic | $ 52,745 | $ 47,407 | $ 39,447 |
Foreign | 2,088 | 2,437 | 1,705 |
Earnings before income taxes | $ 54,833 | $ 49,844 | $ 41,152 |
Income Taxes - Schedule of Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Current: | |||
Federal | $ 20,553 | $ 14,435 | $ 15,324 |
State | 2,933 | 1,275 | 2,227 |
Foreign | 876 | 1,129 | 686 |
Deferred: | |||
Federal | (3,051) | 922 | (2,568) |
State | (915) | 151 | (353) |
Foreign | (134) | (363) | (102) |
Provision for income taxes | $ 20,262 | $ 17,549 | $ 15,214 |
Income Taxes - Reconciliation of Provision for Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
Provision at statutory rate | $ 19,192 | $ 17,445 | $ 14,403 |
State income taxes, net of federal tax benefit | 1,292 | 923 | 1,242 |
Valuation allowance | 564 | 0 | 0 |
Foreign - tax rate differential and other | 29 | (87) | (13) |
Domestic production activities deduction | (721) | (560) | (521) |
Federal and state credits | (542) | 0 | 0 |
Other | 448 | (172) | 103 |
Provision for income taxes | $ 20,262 | $ 17,549 | $ 15,214 |
Income Taxes - Components of Deferred Income Taxes (Details) - USD ($) |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Operating Loss Carryforwards [Line Items] | ||
Reserve for receivables and inventories | $ 2,405,000 | $ 2,931,000 |
Accrued compensation | 861,000 | 1,131,000 |
Payables | 886,000 | 1,107,000 |
Non-pension postretirement benefits | 1,561,000 | 2,344,000 |
Net operating loss and credit carryforwards | 364,000 | 968,000 |
Accrued pension benefits | 1,071,000 | 413,000 |
Accrued employee benefits | 3,219,000 | 4,103,000 |
Deferred revenue | 1,504,000 | 0 |
Other | 450,000 | 487,000 |
Total gross deferred tax assets | 12,321,000 | 13,484,000 |
Less: valuation allowance | (373,000) | 0 |
Total net deferred tax assets | 11,948,000 | 13,484,000 |
Depreciation | 3,778,000 | 5,126,000 |
Amortization | 8,266,000 | 8,992,000 |
Prepaids | 482,000 | 567,000 |
Total deferred tax liabilities | 12,526,000 | 14,685,000 |
Net deferred tax (liabilities) | $ (578,000) | |
Net deferred tax assets | $ (1,201,000) |
Income Taxes - Narrative (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Tax Credit Carryforward [Line Items] | ||
Federal general business credit carryforwards | $ 200,000 | $ 200,000 |
Limit on annual basis | 1,200,000 | |
Valuation allowance on equity investment | 600,000 | |
Valuation allowance | 373,000 | 0 |
Accrued interest (less than) | 100,000 | 100,000 |
Net expense for one-time transition tax | 800,000 | |
Net expense for revaluation of deferred tax assets and liabilities | 800,000 | |
General Business Tax Credit Carryforward | ||
Tax Credit Carryforward [Line Items] | ||
Federal and state net operating loss carryforwards | $ 400,000 | $ 1,600,000 |
Income Taxes - Schedule of Changes in Gross Liability for Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns | ||
Balance at beginning of year | $ 814 | $ 533 |
Increases in unrecognized tax benefits as a result of positions taken during the prior period | 6 | 88 |
Increases in unrecognized tax benefits as a result of positions taken during the current period | 230 | 247 |
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations | (52) | (54) |
Balance at end of year | $ 998 | $ 814 |
Long-Term Debt (Details) - USD ($) $ in Millions |
Dec. 31, 2017 |
Dec. 31, 2010 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable | ||
Loan balance | $ 0.5 | $ 1.5 |
Employee Stock Ownership Plan (ESOP), Plan | Loans Receivable | ||
Accounts, Notes, Loans and Financing Receivable | ||
Loan, restructured outstanding debt of ESSOP | 0.5 | |
Loan to purchase additional shares | 1.0 | |
Loan balance | $ 0.5 | $ 1.5 |
Industry Segment and Geographic Areas (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017
USD ($)
|
Sep. 30, 2017
USD ($)
|
Jun. 30, 2017
USD ($)
|
Mar. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
Sep. 30, 2016
USD ($)
|
Jun. 30, 2016
USD ($)
|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2017
USD ($)
segment
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Segment Reporting [Abstract] | |||||||||||
Number of segments | segment | 1 | ||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Revenues | $ 96,650 | $ 100,008 | $ 104,176 | $ 101,606 | $ 93,098 | $ 96,273 | $ 103,820 | $ 100,570 | $ 402,440 | $ 393,761 | $ 377,698 |
Long-lived assets | 93,601 | 90,194 | 93,601 | 90,194 | |||||||
Total assets | 391,727 | 349,699 | 391,727 | 349,699 | |||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Revenues | 355,768 | 347,853 | 322,535 | ||||||||
Long-lived assets | 56,980 | 53,454 | 56,980 | 53,454 | |||||||
Total assets | 300,688 | 287,081 | 300,688 | 287,081 | |||||||
Asia | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Revenues | 9,133 | 6,539 | 8,299 | ||||||||
Canada | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Revenues | 10,407 | 12,587 | 9,095 | ||||||||
Europe | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Revenues | 15,718 | 15,299 | 17,036 | ||||||||
Long-lived assets | 15,806 | 15,694 | 15,806 | 15,694 | |||||||
Total assets | 66,862 | 38,579 | 66,862 | 38,579 | |||||||
Mexico | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Revenues | 3,601 | 3,460 | 8,889 | ||||||||
Long-lived assets | 20,815 | 21,046 | 20,815 | 21,046 | |||||||
Total assets | $ 24,177 | $ 24,039 | 24,177 | 24,039 | |||||||
Middle East | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Revenues | 4,904 | 5,520 | 9,672 | ||||||||
Other | |||||||||||
Revenues from External Customers and Long-Lived Assets | |||||||||||
Revenues | $ 2,909 | $ 2,503 | $ 2,172 |
Unaudited: Quarterly Results of Operations, Common Stock Price and Dividends (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017
USD ($)
shareholder
$ / shares
|
Sep. 30, 2017
USD ($)
$ / shares
|
Jun. 30, 2017
USD ($)
$ / shares
|
Mar. 31, 2017
USD ($)
$ / shares
|
Dec. 31, 2016
USD ($)
shareholder
$ / shares
|
Sep. 30, 2016
USD ($)
$ / shares
|
Jun. 30, 2016
USD ($)
$ / shares
|
Mar. 31, 2016
USD ($)
$ / shares
|
Dec. 31, 2017
USD ($)
shareholder
$ / shares
|
Dec. 31, 2016
USD ($)
shareholder
$ / shares
|
Dec. 31, 2015
USD ($)
$ / shares
|
|
Net sales | $ | $ 96,650 | $ 100,008 | $ 104,176 | $ 101,606 | $ 93,098 | $ 96,273 | $ 103,820 | $ 100,570 | $ 402,440 | $ 393,761 | $ 377,698 |
Gross margin | $ | 39,003 | 37,039 | 41,054 | 38,650 | 33,522 | 38,647 | 39,396 | 39,011 | 155,746 | 150,576 | 135,776 |
Net earnings | $ | $ 7,233 | $ 7,975 | $ 10,614 | $ 8,749 | $ 6,113 | $ 8,792 | $ 9,400 | $ 7,990 | $ 34,571 | $ 32,295 | $ 25,938 |
Earnings per share: | |||||||||||
Basic (in dollars per share) | $ 0.25 | $ 0.28 | $ 0.37 | $ 0.30 | $ 0.21 | $ 0.30 | $ 0.33 | $ 0.28 | |||
Diluted (in dollars per share) | 0.25 | 0.27 | 0.36 | 0.30 | 0.21 | 0.30 | 0.32 | 0.28 | |||
Dividends declared (in dollars per share) | 0.13 | 0.13 | 0.115 | 0.115 | 0.115 | 0.115 | 0.1 | 0.100 | $ 0.49 | $ 0.43 | $ 0.39 |
Stock price (in dollars per share) | $ 47.80 | 49.00 | 39.85 | 36.75 | $ 36.95 | 33.51 | 36.52 | 33.26 | $ 47.80 | $ 36.95 | |
Number of shareholders | shareholder | 909 | 922 | 909 | 922 | |||||||
High | |||||||||||
Earnings per share: | |||||||||||
Stock price (in dollars per share) | $ 52.10 | 49.45 | 41.58 | 39.85 | $ 39.15 | 37.80 | 39.36 | 34.74 | $ 52.10 | $ 39.15 | |
Low | |||||||||||
Earnings per share: | |||||||||||
Stock price (in dollars per share) | $ 42.00 | $ 39.10 | $ 35.15 | $ 34.40 | $ 29.30 | $ 31.90 | $ 31.72 | $ 26.40 | $ 42.00 | $ 29.30 |
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