Badger Meter Reports Increased Sales and Earnings in Third Quarter
MILWAUKEE--Oct. 14, 2002--Badger Meter, Inc. (AMEX:BMI) today reported increased sales and earnings for the third quarter ended September 30, 2002.Net sales for the third quarter of 2002 were $45,952,000, a 29% increase from sales of $35,575,000 for the same period in the prior year. Sales increased $4,207,000 or 12 percent due to new acquisitions. Net earnings were $2,307,000 or $0.70 per diluted share for the third quarter of 2002, a 143% increase from earnings of $951,000 or $0.29 per diluted share for the third quarter of 2001.
For the first nine months of 2002, net sales were $126,992,000, a 21% increase from sales of $104,978,000 for the same period in 2001. Sales increased $6,707,000 or 6 percent due to new acquisitions. Net earnings increased 158% in the first nine months of 2002 to $6,234,000 or $1.89 per diluted share, compared to earnings of $2,414,000 or $0.73 per diluted share for the same period in the prior year.
"Our improved performance was driven by strong sales of residential and commercial water meters, including sales of meters for automatic meter reading (AMR) systems as part of our successful alliance with Itron, Inc. Sales of automotive fluid meters and electromagnetic flowmeters also increased in the third quarter," said Richard A. Meeusen, president and chief executive officer of Badger Meter.
Meeusen said the company continued to ship meters for large automatic meter reading projects in Houston and other cities during the quarter, as well as for projects in Latin America. "Our sales were up 17% in the third quarter, excluding the results of two recent acquisitions, indicating the strength of our core water meter business," he said.
He said sales of the company's valves, concrete meters and other industrial products decreased in the third quarter. "Sales of these industrial products continue to be affected by the downturn in the economy and the markets they serve," he said.
Meeusen attributed the significantly higher earnings to improved sales of higher-margin automated meter reading products, the positive impact of the higher sales on manufacturing capacity utilization and ongoing expense controls.
Meeusen noted that the company made an additional contribution of $9,400,000 to its pension plan in the third quarter to maintain funding for the plan at appropriate levels.
Badger Meter began shipping two new products at the end of the third quarter. The company's new Orion(R) series is a radio frequency drive-by system that eliminates the need for FCC licensing by the water utility. "With the Orion series and the radio frequency AMR products manufactured by Itron, Inc., we now have a comprehensive line of AMR products that meets a variety of customer requirements," said Meeusen.
The second new product is a fluid management system that was introduced in Europe at the end of September. The new system utilizes the company's automotive fluid meters in a complete system that manages oil, grease and transmission fluid inventories for customers including automotive service stations, garages and dealers.
"Both new products are off to a good start and we are pleased with the customer interest we have received in the initial introductory period," said Meeusen.
"We made excellent progress in the first nine months of 2002. We are especially pleased with the performance of our water utility product lines," he added.
Badger Meter is a leading marketer and manufacturer of flow measurement and control technology, developed both internally and with other companies, as well as the leader in providing digital connectivity to leading AMR technologies. Its products are used to measure and control the flow of liquids in a variety of applications.
Certain statements contained in the pages of this document, as well as other information provided from time to time by the company or its employees, may contain forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. The words "anticipate," "believe," "estimate," "expect," "think," "should" and "objective" or similar expressions are intended to identify forward looking statements. The forward looking statements are based on the company's current views and assumptions and involve risks and uncertainties that include, among other things:
- the success or failure of new product offerings
- the actions and financial condition of competitors and alliance partners
- changes in competitive pricing and bids in the marketplace
- changes in domestic conditions, including housing starts
- changes in foreign economic conditions, including currency fluctuations
- changes in laws and regulations
- changes in customer demand and fluctuations in the prices of and availability of purchased raw materials and parts.
Some or all of these factors are beyond the company's control. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward looking statements and are cautioned not to place undue reliance on such forward looking statements.
The forward looking statements made herein are made only as of the date of this document and the company undertakes no obligation to publicly update such forward looking statements to reflect subsequent events or circumstances.
Badger Meter company news is available 24 hours a day, on-line at: http://www.badgermeter.com.
BADGER METER, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (a)
Nine Months Ended September 30,
2002 2001
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Net sales $126,992,000 $104,978,000
Gross margin $43,245,000 $34,337,000
Earnings before income taxes $9,618,000 $3,767,000
Provision for income taxes $3,384,000 $1,353,000
Net earnings $6,234,000 $2,414,000
Earnings per share:
Basic $1.97 $0.76
Diluted $1.89 $0.73
Shares used in computation of:
Basic 3,158,474 3,167,350
Diluted 3,292,388 3,290,885
Three Months Ended September 30,
2002 2001
---- ----
Net sales $45,952,000 $35,575,000
Gross margin $15,667,000 $11,368,000
Earnings before income taxes $3,574,000 $1,523,000
Provision for income taxes $1,267,000 $572,000
Net earnings $2,307,000 $951,000
Earnings per share:
Basic $0.73 $0.30
Diluted $0.70 $0.29
Shares used in computation of:
Basic 3,163,872 3,159,880
Diluted 3,297,413 3,280,105
(a) Unaudited
BADGER METER, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
Assets September 30 December 31
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2002 2001
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(Unaudited)
Cash and cash equivalents $ 6,019,000 $ 3,410,000
Receivables 25,430,000 18,700,000
Inventories 25,207,000 21,487,000
Other current assets 3,730,000 3,355,000
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Total current assets 60,386,000 46,952,000
Net property, plant and equipment 43,436,000 41,124,000
Prepaid pension 17,457,000 8,965,000
Other long-term assets 4,610,000 3,788,000
Goodwill 5,112,000 546,000
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Total assets $ 131,001,000 $ 101,375,000
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Liabilities and Shareholders' Equity
Short-term debt and current portion
long-term debt $ 22,346,000 $ 8,264,000
Payables 15,404,000 8,887,000
Accrued compensation
and employee benefits 6,168,000 2,992,000
Other current liabilities 7,217,000 3,639,000
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Total current liabilities 51,135,000 23,782,000
Deferred income taxes 2,539,000 2,539,000
Long-term employee benefits 11,104,000 11,554,000
Long-term debt 18,890,000 20,498,000
Shareholders' equity 47,333,000 43,002,000
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Total liabilities
and shareholders' equity $ 131,001,000 $ 101,375,000
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