Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 12, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | BADGER METER INC | |
Entity Central Index Key | 9,092 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 29,113,582 |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 12,125 | $ 11,164 |
Receivables | 65,303 | 58,210 |
Inventories: | ||
Finished goods | 25,199 | 23,125 |
Work in process | 19,643 | 22,035 |
Raw materials | 40,814 | 40,012 |
Total inventories | 85,656 | 85,172 |
Prepaid expenses and other current assets | 5,070 | 4,077 |
Total current assets | 168,154 | 158,623 |
Property, plant and equipment, at cost | 215,513 | 212,485 |
Less accumulated depreciation | (122,838) | (118,884) |
Net property, plant and equipment | 92,675 | 93,601 |
Intangible assets, at cost less accumulated amortization | 59,113 | 59,326 |
Other assets | 9,240 | 9,897 |
Deferred income taxes | 816 | 2,856 |
Goodwill | 71,109 | 67,424 |
Total assets | 401,107 | 391,727 |
Current liabilities: | ||
Short-term debt | 42,430 | 44,550 |
Payables and other current liabilities | 28,092 | 28,601 |
Accrued compensation and employee benefits | 9,632 | 15,509 |
Warranty and after-sale costs | 4,110 | 3,367 |
Income and other taxes | 1,363 | 1,082 |
Total current liabilities | 85,627 | 93,109 |
Other long-term liabilities | 13,657 | 4,073 |
Deferred income taxes | 1,294 | 3,434 |
Accrued non-pension postretirement benefits | 5,718 | 5,703 |
Other accrued employee benefits | 6,341 | 7,956 |
Commitments and contingencies (Note 6) | ||
Shareholders’ equity: | ||
Common stock | 37,177 | 37,165 |
Capital in excess of par value | 33,681 | 32,182 |
Reinvested earnings | 250,242 | 244,224 |
Accumulated other comprehensive loss | (5,508) | (10,893) |
Less: Employee benefit stock | (461) | (460) |
Treasury stock, at cost | (26,661) | (24,766) |
Total shareholders’ equity | 288,470 | 277,452 |
Total liabilities and shareholders’ equity | $ 401,107 | $ 391,727 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 113,648 | $ 104,176 | $ 218,689 | $ 205,782 |
Cost of sales | 72,144 | 63,122 | 140,437 | 126,078 |
Gross margin | 41,504 | 41,054 | 78,252 | 79,704 |
Selling, engineering and administration | 25,153 | 24,214 | 51,927 | 49,299 |
Operating earnings | 16,351 | 16,840 | 26,325 | 30,405 |
Interest expense, net | 409 | 147 | 699 | 325 |
Other pension and postretirement costs | 8,031 | 249 | 8,012 | 345 |
Earnings before income taxes | 7,911 | 16,444 | 17,614 | 29,735 |
Provision for income taxes | 1,757 | 5,830 | 3,914 | 10,372 |
Net earnings | $ 6,154 | $ 10,614 | $ 13,700 | $ 19,363 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 0.21 | $ 0.37 | $ 0.47 | $ 0.67 |
Diluted (in dollars per share) | 0.21 | 0.36 | 0.47 | 0.67 |
Dividends declared per common share (in dollars per share) | $ 0.130 | $ 0.115 | $ 0.260 | $ 0.23 |
Shares used in computation of earnings per share: | ||||
Basic (in shares) | 28,963,373 | 28,938,451 | 28,965,735 | 28,938,851 |
Impact of dilutive securities (in shares) | 170,070 | 159,369 | 193,665 | 170,824 |
Diluted (in shares) | 29,133,443 | 29,097,820 | 29,159,400 | 29,109,675 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 6,154 | $ 10,614 | $ 13,700 | $ 19,363 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | (808) | 1,049 | (387) | 1,340 |
Pension and postretirement benefits, net of tax | 5,711 | 71 | 5,772 | 154 |
Comprehensive income | $ 11,057 | $ 11,734 | $ 19,085 | $ 20,857 |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating activities: | ||
Net earnings | $ 13,700 | $ 19,363 |
Adjustments to reconcile net earnings to net cash provided by operations: | ||
Depreciation | 5,894 | 5,997 |
Amortization | 6,543 | 5,994 |
Deferred income taxes | 59 | (53) |
Noncurrent employee benefits | 84 | 541 |
Pension termination settlement charge | 8,168 | 0 |
Contribution to pension plan | (1,600) | 0 |
Stock-based compensation expense | 944 | 779 |
Changes in: | ||
Receivables | (6,765) | (3,754) |
Inventories | 167 | 4,759 |
Prepaid expenses and other assets | (3,101) | (3,734) |
Liabilities other than debt | 1,106 | 7,453 |
Total adjustments | 11,499 | 17,982 |
Net cash provided by operations | 25,199 | 37,345 |
Investing activities: | ||
Property, plant and equipment expenditures | (5,242) | (6,762) |
Acquisitions, net of cash acquired and future payments | (8,048) | (18,376) |
Net cash used for investing activities | (13,290) | (25,138) |
Financing activities: | ||
Net (decrease) increase in short-term debt | (2,000) | 2,161 |
Dividends paid | (7,542) | (6,673) |
Proceeds from exercise of stock options | 231 | 1,014 |
Repurchase of treasury stock | (1,989) | (3,288) |
Issuance of treasury stock | 431 | 533 |
Net cash used for financing activities | (10,869) | (6,253) |
Effect of foreign exchange rates on cash | (79) | 558 |
Increase in cash | 961 | 6,512 |
Cash – beginning of period | 11,164 | 7,338 |
Cash – end of period | $ 12,125 | $ 13,850 |
Additional Financial Informatio
Additional Financial Information Disclosures | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Additional Financial Information Disclosures | Additional Financial Information Disclosures The consolidated condensed balance sheet at December 31, 2017 was derived from amounts included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . Refer to the footnotes to the financial statements included in that report for a description of the Company’s accounting policies and for additional details of the Company’s financial condition. The details in those notes have not changed except as discussed below and as a result of normal adjustments in the interim. 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: Three months ended Six months ended June 30, June 30, (In thousands) 2018 2017 2018 2017 Balance at beginning of period $ 3,702 $ 2,548 $ 3,367 $ 2,779 Net additions charged to earnings 1,274 1,231 2,315 1,983 Adjustments to pre-existing warranties (48 ) 440 (101 ) 46 Costs incurred (818 ) (1,155 ) (1,471 ) (1,744 ) Balance at end of period $ 4,110 $ 3,064 $ 4,110 $ 3,064 Rights Agreement The shareholder rights plan that was in effect since February 15, 2008 expired on May 26, 2018 and the Board of Directors decided not to renew the plan. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation In the opinion of management, the accompanying unaudited consolidated condensed financial statements of Badger Meter, Inc. (the “Company” or “Badger Meter”) contain all adjustments (consisting only of normal recurring accruals except as otherwise discussed) necessary to present fairly the Company’s consolidated condensed financial position at June 30, 2018 , results of operations for the three- and six-month periods ended June 30, 2018 and 2017 , comprehensive income for the three- and six-month periods ended June 30, 2018 and 2017 , and cash flows for the six-month periods ended June 30, 2018 and 2017 . The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year. The preparation of financial statements in conformity with United States 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. |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2018 | |
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 plans, levels of compensation. The Company has taken steps towards terminating the pension plan and expects the termination to be finalized in the third quarter of 2018. The ultimate settlement obligation will depend upon the nature and timing of participant settlements at prevailing market conditions. During the three months ended June 30, 2018, in connection with the Company's ongoing activities to terminate the plan, lump-sum distributions to participants of the Plan exceeded the service and interest components of net periodic pension cost. As a result, the company recorded a pre-tax settlement charge of $8.2 million during the second quarter of 2018 due for the most part to the initial transfer of pension funds to individuals who elected to rollover their accounts or transfer them to their plan. 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 additionally 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. The following table sets forth the components of net periodic benefit (income) cost for the three months ended June 30, 2018 and 2017 based on December 31, 2017 and 2016 actuarial measurement dates, respectively: Defined pension plan benefits Other postretirement benefits (In thousands) 2018 2017 2018 2017 Service cost (income) – benefits earned during the year $ 41 $ (11 ) $ 28 $ 28 Interest cost on projected benefit obligations 222 469 47 66 Expected return on plan assets (591 ) (396 ) — — Amortization of prior service cost — — — (7 ) Amortization of net loss (benefit) 201 141 (15 ) (24 ) Settlement expense 8,168 — — — Net periodic benefit cost $ 8,041 $ 203 $ 60 $ 63 The following table sets forth the components of net periodic benefit cost for the six months ended June 30, 2018 and 2017 based on December 31, 2017 and 2016 actuarial measurement dates, respectively: Defined pension plan benefits Other postretirement benefits (In thousands) 2018 2017 2018 2017 Service cost – benefits earned during the year $ 70 $ 13 $ 62 $ 63 Interest cost on projected benefit obligations 317 787 95 117 Expected return on plan assets (835 ) (798 ) — — Amortization of prior service cost — — (7 ) (13 ) Amortization of net loss (benefit) 289 276 (15 ) (24 ) Settlement expense 8,168 — — — Net periodic benefit cost $ 8,009 $ 278 $ 135 $ 143 The Company disclosed in its financial statements for the year ended December 31, 2017 that it was not required to make a minimum contribution to the defined benefit pension plan for the 2018 calendar year. The Company made a $1.6 million payment in June 2018 related to the 2017 plan year. The Company believes that no additional contributions will be required during 2018 as it will be terminated prior to the end of 2018. The Company also disclosed in its financial statements for the year ended December 31, 2017 that it estimated it would pay $0.4 million in other postretirement benefits in 2018 based on actuarial estimates. As of June 30, 2018 , $142,000 of such benefits have been paid. The Company continues to believe that its estimated payments for the full year are reasonable. However, such estimates contain inherent uncertainties because cash payments can vary significantly depending on the timing of postretirement medical claims and the collection of the retirees’ portion of certain costs. Note that the amount of benefits paid in calendar year 2018 will not impact the expense for postretirement benefits for 2018 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Components of and changes in accumulated other comprehensive loss at June 30, 2018 are as follows: (In thousands) Unrecognized pension and postretirement benefits Foreign currency Total Balance at beginning of period $ (11,597 ) $ 704 $ (10,893 ) Other comprehensive loss before reclassifications — (387 ) (387 ) Amounts reclassified from accumulated other comprehensive loss, net of tax of $(1.9 million) 5,772 — 5,772 Net current period other comprehensive income (loss), net of tax 5,772 (387 ) 5,385 Accumulated other comprehensive (loss) income $ (5,825 ) $ 317 $ (5,508 ) Details of reclassifications out of accumulated other comprehensive loss during the six months ended June 30, 2018 are as follows: (In thousands) Amount reclassified from accumulated other comprehensive loss Amortization of pension and postretirement benefits items: Prior service benefit (1) $ (756 ) Settlement expense (1) 8,168 Amortization of actuarial loss (1) 274 Total before tax 7,686 Income tax benefit (1,914 ) Amount reclassified out of accumulated other comprehensive loss $ 5,772 (1) These accumulated other comprehensive loss components are included in the computation of net periodic benefit (income) cost in Note 3 “Employee Benefit Plans.” Components of and changes in accumulated other comprehensive loss at June 30, 2017 are as follows: (In thousands) Unrecognized pension and postretirement benefits Foreign currency Total Balance at beginning of period $ (10,495 ) $ (1,140 ) $ (11,635 ) Other comprehensive income before reclassifications — 1,340 1,340 Amounts reclassified from accumulated other comprehensive loss, net of tax of $(0.1) million 154 — 154 Net current period other comprehensive income, net of tax 154 1,340 1,494 Accumulated other comprehensive (loss) income $ (10,341 ) $ 200 $ (10,141 ) Details of reclassifications out of accumulated other comprehensive loss during the six months ended June 30, 2017 are as follows: (In thousands) Amount reclassified from accumulated other comprehensive loss Amortization of pension and postretirement benefits items: Prior service benefit (1) $ (13 ) Amortization of actuarial loss (1) 252 Total before tax 239 Income tax benefit (85 ) Amount reclassified out of accumulated other comprehensive loss $ 154 (1) These accumulated other comprehensive loss components are included in the computation of net periodic benefit (income) cost in Note 3 “Employee Benefit Plans.” |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions On April 2, 2018 , the Company acquired 100% of the outstanding stock of Innovative Metering Solutions, Inc. ("IMS") of Odessa, Florida, which was one of the Company's distributors serving Florida. The total purchase consideration was approximately $12.0 million , which included $7.7 million in cash, a $0.3 million working capital adjustment, a balance sheet holdback of $0.7 million and settlement of $3.3 million of pre-existing Company receivables. The working capital adjustment was settled in the second quarter of 2018 and the balance sheet holdback has been included as a payable on the Company's consolidated balance sheet. The Company's preliminary allocation of the purchase price at June 30, 2018 included $3.8 million of receivables, $0.8 million of inventories, $0.1 million of machinery and equipment, $3.6 million of intangibles and $3.7 million of goodwill. The intangible assets acquired are customer relationships with an estimated average useful life of 10 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 June 30, 2018, the Company had not completed its analysis for estimating the fair value of the assets acquired. The IMS 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 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 inventories, $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 June 30, 2018, 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 $5.0 million in payments that are anticipated to be made in 2018 which are recorded in payables and other current liabilities on the Consolidated Balance Sheets at June 30, 2018. The Company's preliminary allocation of the purchase price included approximately $0.3 million in receivables, $0.6 million of inventories, $0.2 million in property, plant and equipment, $10.9 million of intangibles and $16.1 million of goodwill. The majority of the intangible assets acquired related to ultrasonic technology. The Company also assumed $4.9 million of liabilities as part of the acquisition. As of March 31, 2018, the Company completed its analysis for estimating the fair value of the assets acquired and liabilities assumed with no additional adjustments. 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. |
Contingencies, Litigation and C
Contingencies, Litigation and Commitments | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies, Litigation and Commitments | Contingencies, Litigation and Commitments 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 and the first half of 2018 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. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes as a percentage of earnings before income taxes for the second quarter of 2018 was 22.2% compared to 35.5% in the second quarter of 2017 . The provision for income taxes as a percentage of earnings before income taxes for the first half of 2018 was 22.2% compared to 34.9% for the first half of 2017. Interim provisions are tied to an estimate of the overall annual rate which can vary due to state taxes and the relationship of foreign and domestic earnings. These items cause variations between periods. The decrease between years was due almost entirely to the lower Federal tax rate, which declined from 35% in 2017 to 21% in 2018 as a result of U.S. tax reform that was enacted in December 2017. For the six-months ended June 30, 2018 and 2017, the Company recognized discrete tax benefits related to a pension plan payment (2018 only) and the excess tax benefits from stock-based compensation of $0.5 million and $0.2 million , respectively. In December 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. For the three- and six-month periods months ended June 30, 2018, the Company did not update the provisional amount of transition tax recorded as of December 31, 2017, as there was no new information that would materially impact the Company’s consolidated financial statements. The Company will continue to monitor any new guidance and update its transition tax calculation in a later quarter if necessary. Additional work is still needed for a more detailed analysis of the Company's deferred tax assets and liabilities and its historical foreign earnings, as well as potential correlative adjustments. Any subsequent adjustment to these amounts will be recorded to current tax expense in the quarter that the analysis is completed. The Company is subject to numerous other provisions of the Act that are effective for tax years starting after December 31, 2017. These provisions include the Global Intangible Low-Taxed Income inclusion, the deduction for Foreign-Derived Intangible Income, the business interest expense deduction limitation under Section 163(j), the executive compensation provision under Section 162(m), and the reduced deduction for certain meals and entertainment related expenses. The Company will continue to refine its computation related to these provisions as additional guidance becomes available. The net impact of these provisions is not expected to have a material impact on the Company’s consolidated financial statements. |
Fair Value Measurements of Fina
Fair Value Measurements of Financial Instruments | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements of Financial Instruments | Fair Value Measurements of Financial Instruments The Company applies the accounting standards for fair value measurements and disclosures for its financial assets and financial liabilities. 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 | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
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 condensed financial statements and the notes to these financial statements, the Company evaluated subsequent events through the date that the accompanying financial statements were issued, and has determined that no material subsequent events exist through the date of this filing. |
New Pronouncements
New Pronouncements | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
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 was adopted on a prospective basis on January 1, 2018. The adoption of this standard did not have an impact on the Company's consolidated financial statements. 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 (benefits) costs is eligible for capitalization. The ASU was adopted by the Company on January 1, 2018. Application was done retrospectively for the presentation of the components of these (benefits) costs. In the Consolidated Statements of Operations, the Company previously recorded service and other (benefits) costs in operating cost and expense accounts along with compensation costs. The adoption of the standard resulted in reclassification of those (benefits) costs to the other pension and postretirement (benefits) costs line in the Consolidated Statements of Operations. Adoption of the standard increased operating earnings for 2018 by $8.0 million in both the three- and six-month periods ending June 30, 2018. Those amounts are established in other pension and postretirement (benefits) costs. In the three- and six-month periods ending June 30, 2017 operating earnings were increased by $0.2 million and $0.3 million , respectively. A corresponding amount was reclassified to other pension and postretirement (benefits) costs. The specific net periodic benefit 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. 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 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 plans to adopt the ASU beginning on the effective date of January 1, 2019. The Company expects that upon adoption the consolidated balance sheet will increase for the recognition of right of use assets and lease liabilities for operating leases. The Company is currently reviewing all of the available practical expedients for transition and is evaluating 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 May 2014, the FASB issued ASU 2014-09 "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 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 clarifications. Effective January 1, 2018, the Company adopted ASU 2014-09 using the modified retrospective method, which resulted in an immaterial impact. For a complete discussion of the adoption of ASU 2014-09, see Note 11 "Revenue Recognition." |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Adoption of ASU 2014-09 "Revenue from Contracts with Customers (Topic 606)" On January 1, 2018, the Company adopted ASU 2014-09 using the modified retrospective method applied to those contracts that were not completed or substantially complete as of January 1, 2018. Results for the reporting period beginning after January 1, 2018 are presented under Topic 606, while prior period amounts have not been adjusted and continue to be reported in accordance with the Company's historic accounting under Topic 605. The Company recorded a net reduction to opening retained earnings of $0.1 million as of January 1, 2018 as a result of the cumulative impact of adopting Topic 606. The impact to revenues as a result of applying Topic 606 for the three- and six-month periods ended June 30, 2018 was a decrease of $35,000 and $76,000 , respectively. Contracts with Customers Revenue for sales of products and services is derived from contracts with customers. The products and services promised in contracts include the sale of municipal and flow instrumentation products, such as flow meters and radios, software access and other ancillary services. Contracts with each customer generally state the terms of the sale, including the description, quantity and price of each product or service. Payment terms are stated in the contract. Since the customer typically agrees to a stated rate and price in the contract that does not vary over the life of the contract, the majority of the Company's contracts do not contain variable consideration. The Company establishes a provision for estimated warranty and returns as well as certain after sale costs as discussed in Note 2 "Additional Financial Information Disclosures." Disaggregation of Revenue In accordance with Topic 606, the Company disaggregates revenue from contracts with customers into geographical regions and by the timing of when goods and services are transferred. The Company determined that disaggregating revenue into these categories meets the disclosure objective in Topic 606 which is to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by regional economic factors. Information regarding revenues disaggregated by geographic area is as follows (in millions): Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Revenues: United States $ 97,910 $ 189,063 Foreign: Asia 3,161 4,861 Canada 3,529 6,789 Europe 5,101 10,148 Mexico 483 1,106 Middle East 3,204 5,356 Other 260 1,366 Total $ 113,648 $ 218,689 Information regarding revenues disaggregated by the timing of when goods and services are transferred is as follows (in millions) : Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Revenue recognized over time $ 3,061 5,748 Revenue recognized at a point in time 110,587 212,941 Total $ 113,648 $ 218,689 Contract Balances The Company performs its obligations under a contract with a customer by transferring products and/or services in exchange for consideration from the customer. The Company typically invoices its customers as soon as control of an asset is transferred and a receivable for the Company is established. The Company, however, recognizes a contract liability when a customer prepays for goods and/or services and the Company has not transferred control of the goods and/or services. The opening and closing balances of the Company's contract liabilites and receivables are as follows: June 30, 2018 December 31, 2017 Receivables $ 65,303 $ 58,210 Contract liabilities $ 13,460 $ 9,670 The balance of contract assets was immaterial as the Company did not have a significant amount of uninvoiced receivables in the three- and six-month periods ended June 30, 2018 and December 31, 2017. The amount of revenue recognized in the three- and six-month periods ending June 30, 2018 that was included in the opening contract liability balance was $0.3 million and $0.6 million , respectively. The difference between the opening and closing balances of the Company's contract liabilities was the result of a timing difference between the Company's performance and the customers' prepayments. The increased receivables balance was due to higher sales in the first half of 2018 compared to the fourth quarter of 2017. Generally, receivables balances are lower at year-end than at other times of the year. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of measurement in Topic 606. At contract inception, the Company assesses the products and services promised in its contracts with customers. The Company then identifies performance obligations to transfer distinct products or services to the customer. In order to identify performance obligations, the Company considers all of the products or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. The Company's performance obligations are satisfied at a point in time or over time as work progresses. Revenue from products and services transferred to customers at a single point in time accounted for 97.3% and 97.4% of net sales for the three- and six-month periods ended June 30, 2018, respectively. The majority of the Company's revenue recognized at a point in time is for the sale of municipal and flow instrumentation products. Revenue from these contracts is recognized when the customer is able to direct the use of and obtain substantially all of the benefits from the product which generally coincides with title transfer during the shipping process. Revenue from services transferred to customers over time accounted for 2.7% and 2.6% of sales of net sales for the three- and six-month periods ended June 30, 2018, respectively. The majority of the Company's revenue that is recognized over time relates to the BEACON AMA software as a service. As of June 30, 2018, the Company had entered into contracts where there were unsatisfied performance obligations. For contracts recorded as long-term liabilities, $10.8 million was the aggregate amount of the transaction price allocated to performance obligations that were unsatisfied or partially unsatisfied as of the end of the reporting period. The Company estimates that revenue recognized from satisfying those performance obligations will be approximately $1.2 million for the remainder of 2018, $2.5 million in each year from 2019 through 2021 and $2.1 million in 2022. Significant Judgments The Company records revenue for BEACON AMA services over time as the customer benefits from the data that is provided through the Company's software. Control of an asset is therefore transferred to the customer over time, and the Company will recognize revenue for Beacon AMA services as service units are used by the customer. Revenue is recorded for various ancillary services, such as project management and training, over time as the customer benefits from the services provided. The majority of this revenue will be recognized equally throughout the contract period as the customer receives benefits from the Company's promise to provide such services. If the service is not provided evenly over the contract period, revenue will be recognized by the associated input/output method that best measures the progress towards contract completion. The Company also has contracts that include both the sale and installation of flow meters as performance obligations. In those cases, the Company records revenue for installed flow meters at the point in time when the flow meters have been accepted by the customer. The customer cannot control the use of and obtain substantially all of the benefits from the equipment until the customer has accepted the installed product. Therefore, for both the flow meter and the related installation, the Company has concluded that control is transferred to the customer upon customer acceptance of the installed flow meters. In addition, the Company has a variety of ancillary revenue streams which are minor. The types and composition of the Company's revenue streams did not materially change during the three- and six-month periods ended June 30, 2018 from year end 2017. Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. Variable consideration in contracts for the three- and six-month periods ended June 30, 2018 was insignificant . Transaction Price Allocation The transaction price for a contract is allocated to each distinct performance obligation and recognized as revenue when, or as, each performance obligation is satisfied. For contracts with multiple performance obligations, the Company allocates the contract's transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in a contract. The primary method used to estimate standalone selling price is the observable price when the good or service is sold separately in similar circumstances and to similar customers. If standalone selling price is not directly observable, it is estimated using either a market adjustment or cost plus margin approach. Contract Costs The recording of assets recognized from the costs to obtain and fulfill customer contracts primarily relate to the deferral of sales commissions on the Company's BEACON AMA software arrangements. The Company's costs incurred to obtain or fulfill a contract with a customer are amortized over the period of benefit of the related revenue. The Company expenses any costs incurred immediately when the amortization period would be one year or less. These costs are recorded within selling, engineering and administration expenses. Practical Expedients For the three- and six-month periods ended June 30, 2018, the Company elected the following practical expedients: In accordance with Subtopic 340-40 "Other Assets and Deferred Costs - Contracts with Customers," the Company elected to expense the incremental costs of obtaining a contract when the amortization period for such contracts would have been one year or less. The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less and contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. The Company has made an accounting policy election to exclude all taxes by governmental authorities from the measurement of the transaction price. |
New Pronouncements - (Policies)
New Pronouncements - (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
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 was adopted on a prospective basis on January 1, 2018. The adoption of this standard did not have an impact on the Company's consolidated financial statements. 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 (benefits) costs is eligible for capitalization. The ASU was adopted by the Company on January 1, 2018. Application was done retrospectively for the presentation of the components of these (benefits) costs. In the Consolidated Statements of Operations, the Company previously recorded service and other (benefits) costs in operating cost and expense accounts along with compensation costs. The adoption of the standard resulted in reclassification of those (benefits) costs to the other pension and postretirement (benefits) costs line in the Consolidated Statements of Operations. Adoption of the standard increased operating earnings for 2018 by $8.0 million in both the three- and six-month periods ending June 30, 2018. Those amounts are established in other pension and postretirement (benefits) costs. In the three- and six-month periods ending June 30, 2017 operating earnings were increased by $0.2 million and $0.3 million , respectively. A corresponding amount was reclassified to other pension and postretirement (benefits) costs. The specific net periodic benefit 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. 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 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 plans to adopt the ASU beginning on the effective date of January 1, 2019. The Company expects that upon adoption the consolidated balance sheet will increase for the recognition of right of use assets and lease liabilities for operating leases. The Company is currently reviewing all of the available practical expedients for transition and is evaluating 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 May 2014, the FASB issued ASU 2014-09 "Revenue from Contracts with Customers (Topic 606)." ASU 2014-09 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 clarifications. Effective January 1, 2018, the Company adopted ASU 2014-09 using the modified retrospective method, which resulted in an immaterial impact. For a complete discussion of the adoption of ASU 2014-09, see Note 11 "Revenue Recognition." |
Additional Financial Informat18
Additional Financial Information Disclosures (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Changes in Warranty and After-Sale Costs Reserve | Changes in the Company’s warranty and after-sale costs reserve are as follows: Three months ended Six months ended June 30, June 30, (In thousands) 2018 2017 2018 2017 Balance at beginning of period $ 3,702 $ 2,548 $ 3,367 $ 2,779 Net additions charged to earnings 1,274 1,231 2,315 1,983 Adjustments to pre-existing warranties (48 ) 440 (101 ) 46 Costs incurred (818 ) (1,155 ) (1,471 ) (1,744 ) Balance at end of period $ 4,110 $ 3,064 $ 4,110 $ 3,064 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The following table sets forth the components of net periodic benefit (income) cost for the three months ended June 30, 2018 and 2017 based on December 31, 2017 and 2016 actuarial measurement dates, respectively: Defined pension plan benefits Other postretirement benefits (In thousands) 2018 2017 2018 2017 Service cost (income) – benefits earned during the year $ 41 $ (11 ) $ 28 $ 28 Interest cost on projected benefit obligations 222 469 47 66 Expected return on plan assets (591 ) (396 ) — — Amortization of prior service cost — — — (7 ) Amortization of net loss (benefit) 201 141 (15 ) (24 ) Settlement expense 8,168 — — — Net periodic benefit cost $ 8,041 $ 203 $ 60 $ 63 The following table sets forth the components of net periodic benefit cost for the six months ended June 30, 2018 and 2017 based on December 31, 2017 and 2016 actuarial measurement dates, respectively: Defined pension plan benefits Other postretirement benefits (In thousands) 2018 2017 2018 2017 Service cost – benefits earned during the year $ 70 $ 13 $ 62 $ 63 Interest cost on projected benefit obligations 317 787 95 117 Expected return on plan assets (835 ) (798 ) — — Amortization of prior service cost — — (7 ) (13 ) Amortization of net loss (benefit) 289 276 (15 ) (24 ) Settlement expense 8,168 — — — Net periodic benefit cost $ 8,009 $ 278 $ 135 $ 143 |
Accumulated Other Comprehensi20
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Components of and Changes in Accumulated Other Comprehensive Loss | Components of and changes in accumulated other comprehensive loss at June 30, 2018 are as follows: (In thousands) Unrecognized pension and postretirement benefits Foreign currency Total Balance at beginning of period $ (11,597 ) $ 704 $ (10,893 ) Other comprehensive loss before reclassifications — (387 ) (387 ) Amounts reclassified from accumulated other comprehensive loss, net of tax of $(1.9 million) 5,772 — 5,772 Net current period other comprehensive income (loss), net of tax 5,772 (387 ) 5,385 Accumulated other comprehensive (loss) income $ (5,825 ) $ 317 $ (5,508 ) Components of and changes in accumulated other comprehensive loss at June 30, 2017 are as follows: (In thousands) Unrecognized pension and postretirement benefits Foreign currency Total Balance at beginning of period $ (10,495 ) $ (1,140 ) $ (11,635 ) Other comprehensive income before reclassifications — 1,340 1,340 Amounts reclassified from accumulated other comprehensive loss, net of tax of $(0.1) million 154 — 154 Net current period other comprehensive income, net of tax 154 1,340 1,494 Accumulated other comprehensive (loss) income $ (10,341 ) $ 200 $ (10,141 ) |
Reclassifications Out of Accumulated Other Comprehensive Loss | Details of reclassifications out of accumulated other comprehensive loss during the six months ended June 30, 2017 are as follows: (In thousands) Amount reclassified from accumulated other comprehensive loss Amortization of pension and postretirement benefits items: Prior service benefit (1) $ (13 ) Amortization of actuarial loss (1) 252 Total before tax 239 Income tax benefit (85 ) Amount reclassified out of accumulated other comprehensive loss $ 154 (1) These accumulated other comprehensive loss components are included in the computation of net periodic benefit (income) cost in Note 3 “Employee Benefit Plans.” Details of reclassifications out of accumulated other comprehensive loss during the six months ended June 30, 2018 are as follows: (In thousands) Amount reclassified from accumulated other comprehensive loss Amortization of pension and postretirement benefits items: Prior service benefit (1) $ (756 ) Settlement expense (1) 8,168 Amortization of actuarial loss (1) 274 Total before tax 7,686 Income tax benefit (1,914 ) Amount reclassified out of accumulated other comprehensive loss $ 5,772 (1) These accumulated other comprehensive loss components are included in the computation of net periodic benefit (income) cost in Note 3 “Employee Benefit Plans.” |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Information regarding revenues disaggregated by geographic area is as follows (in millions): Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Revenues: United States $ 97,910 $ 189,063 Foreign: Asia 3,161 4,861 Canada 3,529 6,789 Europe 5,101 10,148 Mexico 483 1,106 Middle East 3,204 5,356 Other 260 1,366 Total $ 113,648 $ 218,689 Information regarding revenues disaggregated by the timing of when goods and services are transferred is as follows (in millions) : Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Revenue recognized over time $ 3,061 5,748 Revenue recognized at a point in time 110,587 212,941 Total $ 113,648 $ 218,689 |
Contract with Customer, Liability and Receivables | The opening and closing balances of the Company's contract liabilites and receivables are as follows: June 30, 2018 December 31, 2017 Receivables $ 65,303 $ 58,210 Contract liabilities $ 13,460 $ 9,670 |
Additional Financial Informat22
Additional Financial Information Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Changes in warranty and after-sale costs reserve | ||||
Balance at beginning of period | $ 3,702 | $ 2,548 | $ 3,367 | $ 2,779 |
Net additions charged to earnings | 1,274 | 1,231 | 2,315 | 1,983 |
Adjustments to pre-existing warranties | (48) | 440 | (101) | 46 |
Costs incurred | (818) | (1,155) | (1,471) | (1,744) |
Balance at end of period | $ 4,110 | $ 3,064 | $ 4,110 | $ 3,064 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Defined pension plan benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost (income) – benefits earned during the year | $ 41 | $ (11) | $ 70 | $ 13 |
Interest cost on projected benefit obligations | 222 | 469 | 317 | 787 |
Expected return on plan assets | (591) | (396) | (835) | (798) |
Amortization of prior service cost | 0 | 0 | 0 | 0 |
Amortization of net loss (benefit) | 201 | 141 | 289 | 276 |
Settlement expense | 8,168 | 0 | 8,168 | 0 |
Net periodic benefit cost | 8,041 | 203 | 8,009 | 278 |
Other postretirement benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost (income) – benefits earned during the year | 28 | 28 | 62 | 63 |
Interest cost on projected benefit obligations | 47 | 66 | 95 | 117 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service cost | 0 | (7) | (7) | (13) |
Amortization of net loss (benefit) | (15) | (24) | (15) | (24) |
Settlement expense | 0 | 0 | 0 | 0 |
Net periodic benefit cost | $ 60 | $ 63 | $ 135 | $ 143 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Defined pension plan benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Settlement expense | $ (8,168) | $ 0 | $ (8,168) | $ 0 | |
Benefits paid | 1,600 | ||||
Other postretirement benefits | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Settlement expense | $ 0 | $ 0 | 0 | $ 0 | |
Benefits paid | $ 142 | ||||
Estimated other postretirement benefits to be paid in 2017 | $ 400 |
Accumulated Other Comprehensi25
Accumulated Other Comprehensive Loss - Components of and Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Accumulated Other Comprehensive Income | ||
Balance at beginning of period | $ (10,893) | $ (11,635) |
Other comprehensive loss before reclassifications | (387) | 1,340 |
Amounts reclassified from accumulated other comprehensive loss, net of tax of $(1.9 million) | 5,772 | 154 |
Amounts reclassified from accumulated other comprehensive loss, tax | (1,900) | (100) |
Net current period other comprehensive income (loss), net of tax | 5,385 | 1,494 |
Accumulated other comprehensive (loss) income | (5,508) | (10,141) |
Unrecognized pension and postretirement benefits | ||
Accumulated Other Comprehensive Income | ||
Balance at beginning of period | (11,597) | (10,495) |
Other comprehensive loss before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss, net of tax of $(1.9 million) | 5,772 | 154 |
Net current period other comprehensive income (loss), net of tax | 5,772 | 154 |
Accumulated other comprehensive (loss) income | (5,825) | (10,341) |
Foreign currency | ||
Accumulated Other Comprehensive Income | ||
Balance at beginning of period | 704 | (1,140) |
Other comprehensive loss before reclassifications | (387) | 1,340 |
Amounts reclassified from accumulated other comprehensive loss, net of tax of $(1.9 million) | 0 | 0 |
Net current period other comprehensive income (loss), net of tax | (387) | 1,340 |
Accumulated other comprehensive (loss) income | $ 317 | $ 200 |
Accumulated Other Comprehensi26
Accumulated Other Comprehensive Loss - Reclassifications Out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Amortization of pension and postretirement benefits items: | ||
Prior service benefit/cost | $ (756) | $ (13) |
Settlement expense | 8,168 | |
Amortization of actuarial loss | 274 | 252 |
Total before tax | 7,686 | 239 |
Income tax benefit | (1,914) | (85) |
Amount reclassified out of accumulated other comprehensive loss | $ 5,772 | $ 154 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | Apr. 02, 2018 | Nov. 01, 2017 | May 01, 2017 | Jun. 30, 2018 | Dec. 31, 2017 |
Business Acquisition | |||||
Goodwill | $ 71,109 | $ 67,424 | |||
Innovative Metering Solutions, Inc. | |||||
Business Acquisition | |||||
Outstanding common stock acquired (as a percent) | 100.00% | ||||
Total purchase consideration | $ 12,000 | ||||
Cash payment | 7,700 | ||||
Working capital adjustment | 300 | ||||
Balance sheet holdback | $ 700 | ||||
Receivables | 3,800 | ||||
Inventory | 800 | ||||
Machinery and equipment | 100 | ||||
Intangibles | 3,600 | ||||
Goodwill | 3,700 | ||||
Pre-existing receivables acquired | $ 3,300 | ||||
Innovative Metering Solutions, Inc. | Customer Relationships | |||||
Business Acquisition | |||||
Estimated average useful life | 10 years | ||||
Carolina Meter | |||||
Business Acquisition | |||||
Total purchase consideration | $ 6,200 | ||||
Cash payment | 2,000 | ||||
Receivables | 600 | ||||
Inventory | 300 | ||||
Intangibles | 3,300 | ||||
Goodwill | $ 2,000 | ||||
Pre-existing receivables acquired | $ 4,200 | ||||
Carolina Meter | Customer Relationships | |||||
Business Acquisition | |||||
Estimated average useful life | 12 years | ||||
D-Flow | |||||
Business Acquisition | |||||
Outstanding common stock acquired (as a percent) | 100.00% | ||||
Cash payment | $ 23,200 | ||||
Receivables | 300 | ||||
Inventory | 600 | ||||
Machinery and equipment | 200 | ||||
Intangibles | 10,900 | ||||
Goodwill | 16,100 | ||||
Payments anticipated to be made within eighteen months of the purchase date | 5,000 | ||||
Liabilities assumed as part of the acquisition | $ 4,900 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes (as a percent) | 22.20% | 35.50% | 22.20% | 34.90% |
Excess tax benefits from stock-based compensation | $ 0.5 | $ 0.2 |
New Pronouncements - Narrative
New Pronouncements - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating earnings | $ 16,351 | $ 16,840 | $ 26,325 | $ 30,405 |
Accounting Standards Update 2017-07 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating earnings | (8,000) | 200 | (8,000) | 300 |
Other pension benefits (costs) | $ 8,000 | $ 200 | $ 8,000 | $ 300 |
Revenue Recognition - Other Nar
Revenue Recognition - Other Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Contract with customer, liability, revenue recognized | $ 300 | $ 600 | |
Accounting Standards Update 2014-09 | Retained Earnings | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of new accounting principle | $ 100 | ||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Revenues | $ 35 | $ 76 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 113,648 | $ 218,689 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 97,910 | 189,063 |
Asia | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 3,161 | 4,861 |
Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 3,529 | 6,789 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 5,101 | 10,148 |
Mexico | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 483 | 1,106 |
Middle East | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 3,204 | 5,356 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 260 | 1,366 |
Revenue recognized over time | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 3,061 | 5,748 |
Revenue recognized at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 110,587 | $ 212,941 |
Revenue Recognition - Contract
Revenue Recognition - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Revenue from Contract with Customer [Abstract] | ||
Receivables | $ 65,303 | $ 58,210 |
Contract liabilities | $ 13,460 | $ 9,670 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligations (Details) - Consolidated Sales - Product Concentration Risk | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Revenue recognized at a point in time | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation, percentage | 97.30% | 97.40% |
Revenue recognized over time | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation, percentage | 2.70% | 2.60% |
Revenue Recognition - Unsatisfi
Revenue Recognition - Unsatisfied Performance Obligations (Details) $ in Millions | Jun. 30, 2018USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2018-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of performance obligation satisfaction, period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2018-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 1.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 2.1 |
Expected timing of performance obligation satisfaction, period | 4 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: (nil) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 10.8 |