-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JxnpA5GzJ5pk2YSMLo39tlySsR3TFB4u2YCGMZEDW3XRbqxaSW/8n8YrHaeOiVnZ Q9Tvm24prV27yLaEDh6Sog== 0001157523-05-006532.txt : 20050726 0001157523-05-006532.hdr.sgml : 20050726 20050726160108 ACCESSION NUMBER: 0001157523-05-006532 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050726 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050726 DATE AS OF CHANGE: 20050726 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ITRON INC /WA/ CENTRAL INDEX KEY: 0000780571 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 911011792 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22418 FILM NUMBER: 05974272 BUSINESS ADDRESS: STREET 1: 2818 N SULLIVAN RD CITY: SPOKANE STATE: WA ZIP: 99216 BUSINESS PHONE: 5099249900 MAIL ADDRESS: STREET 1: 2818 NORTH SULLIVAN ROAD CITY: SPOKANE STATE: WA ZIP: 99216 FORMER COMPANY: FORMER CONFORMED NAME: ITRON INC DATE OF NAME CHANGE: 19920724 8-K 1 a4938733.txt ITRON, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 July 26, 2005 -------------------------------------- Date of Report (Date of Earliest Event Reported) ITRON, INC. ---------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Washington 000-22418 91-1011792 - --------------------------------- ----------------------- --------------------- (State or Other Jurisdiction (Commission File No.) (IRS Employer of Incorporation) Identification No.) 2818 N. Sullivan Road, Spokane, WA 99216 ------------------------------------------------------------------------------- (Address of Principal Executive Offices, Zip Code) (509) 924-9900 ------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) None ------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition. On July 26, 2005, Itron, Inc. issued a press release announcing the financial results for the three and six months ending June 30, 2005. A copy of this press release and accompanying financial statements are attached as Exhibit 99.1. Item 9.01 Financial Statements and Exhibits. (c) Exhibits. The following exhibits are filed as part of this report: Exhibit Number Description - -------------- ------------------------------------------------------------- 99.1 Press Release dated July 26, 2005. The information presented in this Current Report on Form 8-K may contain forward-looking statements and certain assumptions upon which such forward-looking statements are in part based. Numerous important factors, including those factors identified in Itron, Inc.'s Annual Report on Form 10-K and other of the Company's filings with the Securities and Exchange Commission, and the fact that the assumptions set forth in this Current Report on Form 8-K could prove incorrect, could cause actual results to differ materially from those contained in such forward-looking statements. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. ITRON, INC. Dated: July 26, 2005 By: /s/ STEVEN M. HELMBRECHT ------------------------ Steven M. Helmbrecht Sr. Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit Number Description - -------------- ------------------------------------------------------------- 99.1 Press release dated July 26, 2005. EX-99.1 2 a4938733ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Itron Reports Record Financial Results for Second Quarter 2005; New Quarterly-Highs Achieved for Revenues, Earnings and New Order Bookings SPOKANE, Wash.--(BUSINESS WIRE)--July 26, 2005--Itron, Inc. (Nasdaq:ITRI), today reported its financial results for the quarter ended June 30, 2005. Revenues were $135.1 million for the quarter, compared with second quarter revenues in 2004 of $79.6 million. Year-to-date revenues were $251.6 million compared with $145.2 million in 2004. The majority of the increases in 2005 resulted from the acquisition of Schlumberger's electricity metering business which was completed July 1, 2004. On a GAAP basis, net income was $9.3 million, or 38 cents per diluted share for the quarter, compared with $818,000, or 4 cents per diluted share in the second quarter of 2004. GAAP net income for the quarter included a $5.9 million tax benefit for additional research and development (R&D) tax credits for the years 1997 through 2004. Year-to-date, on a GAAP basis, net income was $10.1 million, or 43 cents per diluted share, compared with approximately break-even GAAP net income in the six months ended June 30, 2004. Pro forma net income was $10.4 million, or 42 cents per diluted share for the quarter, compared with $2.3 million, or 11 cents per diluted share in the second quarter of 2004. Year-to-date pro forma net income was $17.7 million, or 75 cents per diluted share, compared with $4.5 million, or 20 cents per diluted share in 2004. Pro forma net income excludes the amortization of intangible assets and debt placement fees, restructurings and the benefit of the prior year R&D tax credits. A schedule reconciling GAAP and pro forma net income is attached to this release. "Itron delivered very strong results again this quarter," said LeRoy Nosbaum, Chairman and CEO. "Record new order bookings are evidence of the increasing momentum we are seeing in the AMR and electricity metering markets. Utility customers are embracing our solutions as they look for ways to operate more efficiently, reduce costs, and provide better customer service. 2005 is shaping up to be a very good year for Itron." Additional segment revenue details for the quarter are as follows: -- Electricity Metering revenues, which include meters with embedded automatic meter reading (AMR) technology, were $60.6 million in the quarter and $114.7 million for the six months ended June 30, 2005. There were no Electricity Metering revenues in the 2004 comparable periods as the acquisition was completed July 1, 2004. We shipped more than 1.1 million electricity meters in the quarter, approximately 7% more than in the first quarter. Of those, approximately 38% were equipped with Itron AMR technology. -- Meter Data Collection (MDC) revenues were $62.2 million during the quarter compared with $67.2 million in the second quarter of 2004. Year-to-date, MDC revenues were $111.9 million compared with $121.9 million in 2004. The lower revenues during the quarter and year-to-date periods in 2005 are primarily due to lower average selling prices for electric AMR modules as shipments of total standalone AMR modules (electric, gas and water) were comparable. Shipments of standalone AMR modules were approximately 1.1 million in the second quarters of 2005 and 2004 and 1.9 million for the year-to-date periods in 2005 and 2004. New order bookings (which do not include maintenance revenues) were strong during the quarter. Details for new order bookings and quarter-end backlog are as follows: -- New order bookings during the quarter were $177 million, compared with $66 million in the second quarter of last year. New order bookings in the first six months of 2005 were $294 million, compared with $132 million in the first six months of 2004. -- Total backlog increased to $243 million at June 30, 2005. By comparison, total backlog was $190 million at March 31, 2005 and $153 million at June 30, 2004. -- Twelve-month backlog, which represents the estimated portion of backlog that will be earned over the next twelve months, was $151 million at June 30, 2005, compared with $116 million at March 31, 2005 and $76 million at June 30, 2004. -- Not included in the above bookings or backlog is a contract with Progress Energy, worth approximately $120 million over two years, that was signed in July 2005. Gross margins for the quarter and year-to-date periods in 2005 were 42% and 43%, respectively, compared with 46% in the second quarter and year-to-date periods in 2004. Lower MDC gross margins in 2005 are due primarily to lower average selling prices for standalone electric AMR modules. Electricity Metering gross margin was 41% during the quarter compared with 45% during the first quarter of 2005. The decrease from the previous quarter results from pass-through sales of third party equipment for a smart metering system in Ontario along with changes in the mix of meters sold. Sales and marketing, product development and general and administrative expenses were $36.7 million and $71.8 million in the quarter and year-to-date periods in 2005 compared with $29.5 million and $56.0 million in the comparable periods in 2004, with the increased spending primarily due to the Electricity Metering acquisition. Intangible asset amortization expenses also increased as a result of the acquisition and were $9.7 million and $19.4 million in the 2005 periods compared with $2.0 million and $4.1 million in the 2004 periods. Excluding intangible asset amortization expenses and restructurings, operating income was $20.0 million and $35.9 million, or 14.8% and 14.3% of revenues for the quarter and six months ended 2005, compared with $6.8 and $10.2 million, or 8.5% and 7.0% of revenues for the same periods in 2004. The improved operating leverage in 2005 reflects the lower level of spending required for Electricity Metering marketing and product development as well as operating efficiencies and cost savings from headcount reductions in 2004. During the quarter, we conducted a study of tax credits for research activities for the years 1997 through 2004 (prior periods) and for 2005. Second quarter 2005 GAAP results include an income tax benefit for prior period R&D tax credits of approximately $5.9 million. Additionally, we estimate that our R&D tax credit in 2005 will be approximately $1.2 million, which is reflected in our estimated annual GAAP tax rate of approximately 34%. R&D tax credits will be used to offset future federal tax liabilities. The income tax benefit of $4.8 million for the quarter ended June 30, 2005 reflects the $5.9 million prior period tax benefit, a provision for income taxes using the estimated full year GAAP rate of 34.0%, and other miscellaneous adjustments. Our estimated tax rate for pro forma purposes in 2005 is 38.3%. For comparative purposes, our full year tax rates in 2004 were 44.1% for GAAP and 39.8% for pro forma. We generated $12.9 million of cash from operations during the quarter compared to a use of cash of $6.8 million during the second quarter of last year. Cash flow decreased from $23.9 million in the prior quarter primarily due to the increase in accounts receivable during the quarter driven by higher revenues, and due to a semi-annual interest payment on our senior subordinated notes during the quarter of approximately $4.8 million. Cash flow from operations was $36.8 million for the six months ended June 30, 2005 compared with $7.2 million for the same period in 2004. In May 2005, we received approximately $60 million in net proceeds from the issuance of 1,725,000 shares of common stock. We made a total of $87.0 million in optional repayments on our term bank debt during the quarter, bringing the balance to $42.3 million at June 30, 2005, which means in the twelve months since the Electricity Metering acquisition, we have repaid $142.7 million of the $185 million term bank debt borrowed in connection with the acquisition. Itron also announced today the retirement of Rob Neilson as president and chief operating officer and as a member of the Company's Board of Directors, effective December 31, 2005. Mr. Neilson has been with Itron since 1983 and was named president and COO in 2000 and elected a director in 2002. Mr. Neilson's wife Randi, will retire as vice president of marketing effective December 31, 2005 as well. "As my trusted partner, Rob has worked closely with me in developing Itron's growth strategies and plans," commented LeRoy Nosbaum, chairman and CEO. "His focus on organizational excellence and efficiency improvements in running operations has been a big factor in Itron's improved financial performance. For two decades, Rob and Randi have been significant contributors to the success of Itron. Their influence has been strongly felt within the company from strategy development through operations and they are recognized thought leaders within the industry -- with customers, regulators and others. We will miss their contributions, but we understand and respect their decision to spend more time with their family and to pursue other areas of personal, public and community interest." Nosbaum added that the Company will not fill the position of president and COO. Instead, the Hardware and Software Solutions Group vice presidents will report directly to Nosbaum. "With the Company-wide reorganization in 2004 into hardware and software, we set the stage for two strong operations groups and we have been very pleased with the performance of both." The Company has already begun a search for a new vice president of marketing. Business Outlook: Our outlook for 2005 does not include any impact related to the expensing of stock options. We expect to implement FASB's Statement 123R, which requires the expensing of stock options and ESPP shares issued at a discount, in 2006. Expensing of stock options will decrease gross margin, increase operating expenses and influence our effective tax rate. For the full year 2005, we expect: -- Revenues to be between $535 and $545 million (previous guidance was $510 to $520 million). -- Pro forma diluted earnings per share between $1.65 and $1.70 (previous guidance was $1.50 to $1.55). Use of Non-GAAP Financial Information: To supplement our consolidated financial statements presented in accordance with GAAP, we use certain non-GAAP measures, including pro forma earnings and EPS and EBITDA. Pro forma earnings and EPS are adjusted from GAAP-based results to exclude certain costs and expenses that we believe are not indicative of our core operating results. Pro forma results are one of the primary indicators management uses for evaluating historical results and for planning and forecasting future periods. We believe pro forma results provide consistency in our financial reporting which enhances our investor's understanding of our current financial performance as well as our future prospects. Pro forma results along with EBITDA measures should be viewed in addition to, and not in lieu of, GAAP results. Earnings Conference Call: Itron will host a conference call to discuss the financial results contained in this release at 1:45 p.m. PDT on July 26, 2005. The call will be webcast in a listen only mode and can be accessed online at www.itron.com, "About Itron -- Investor Events." The live webcast will begin at 1:45 p.m. (PDT). The webcast replay will begin shortly after the conclusion of the live call and will be available for two weeks. A telephone replay of the call will also be available approximately one hour after the conclusion of the live call, for 48 hours, and is accessible by dialing 888-203-1112 (Domestic) or 719-457-0820 (International), entering passcode #4296398. Forward Looking Statements: This release contains forward-looking statements concerning Itron's operations, financial performance, sales, earnings and cash flow. These statements reflect our current plans and expectations and are based on information currently available. They rely on a number of assumptions and estimates, which could be inaccurate, and which are subject to risks and uncertainties that could cause our actual results to vary materially from those anticipated. Risks and uncertainties include the rate and timing of customer demand for the Company's products, rescheduling of current customer orders, changes in estimated liabilities for product warranties, changes in laws and regulations and other factors which are more fully described in our Annual Report on Form 10-K for the year ended December 31, 2004 and our Form 10-Q for the quarter ended March 31, 2005 on file with the Securities and Exchange Commission. Itron undertakes no obligation to update publicly or revise any forward-looking statements. About Itron: Itron is a leading technology provider and critical source of knowledge to the global energy and water industries. Nearly 3,000 utilities worldwide rely on Itron technology to deliver the knowledge they require to optimize the delivery and use of energy and water. Itron delivers value to its clients by providing industry-leading solutions for electricity metering, meter data collection, energy information management, demand side management and response, load forecasting, analysis and consulting services, transmission and distribution system design and optimization, Web-based workforce automation, commercial and industrial customer care and residential energy management. To know more, start here: www.itron.com. Statements of operations, reconciliations between GAAP and pro forma results, segment information, balance sheets and cash flows follow. ITRON, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, -------------------------------------- 2005 2004 2005 2004 -------- ------- -------- -------- Revenues Sales $122,811 $68,015 $227,013 $123,031 Service 12,312 11,627 24,580 22,213 -------- ------- -------- -------- Total revenues 135,123 79,642 251,593 145,244 Cost of revenues Sales 70,810 37,852 130,009 67,459 Service 7,574 5,532 13,847 11,655 -------- ------- -------- -------- Total cost of revenues 78,384 43,384 143,856 79,114 -------- ------- -------- -------- Gross profit 56,739 36,258 107,737 66,130 Operating expenses Sales and marketing 13,529 10,272 26,768 19,926 Product development 11,414 10,554 23,328 20,776 General and administrative 11,770 8,652 21,736 15,278 Amortization of intangible assets 9,715 2,027 19,431 4,054 Restructurings - 52 390 2,434 -------- ------- -------- -------- Total operating expenses 46,428 31,557 91,653 62,468 -------- ------- -------- -------- Operating income 10,311 4,701 16,084 3,662 Other income (expense) Interest income 94 111 98 128 Interest expense (6,385) (2,261) (10,952) (3,015) Other income (expense), net 454 (1,001) 555 (735) -------- ------- -------- -------- Total other income (expense) (5,837) (3,151) (10,299) (3,622) -------- ------- -------- -------- Income before income taxes 4,474 1,550 5,785 40 Income tax (provision) benefit 4,839 (732) 4,345 40 -------- ------- -------- -------- Net income $ 9,313 $ 818 $ 10,130 $ 80 -------- ------- -------- -------- Earnings per share Basic net income per share $ 0.41 $ 0.04 $ 0.46 $ 0.00 -------- ------- -------- -------- Diluted net income per share $ 0.38 $ 0.04 $ 0.43 $ 0.00 -------- ------- -------- -------- Weighted average number of shares outstanding Basic 22,811 20,845 22,135 20,750 Diluted 24,416 22,111 23,677 21,987 ITRON, INC. RECONCILIATIONS BETWEEN GAAP AND PRO FORMA (Unaudited, in thousands, except per share data) Three Months Six Months Ended June 30, Ended June 30, ----------------------------------- 2005 2004 2005 2004 ------- ------- -------- ------- PRO FORMA OPERATING INCOME GAAP basis operating income $10,311 $ 4,701 $ 16,084 $ 3,662 Adjustments to GAAP basis operating income before income taxes Amortization of intangible assets 9,715 2,027 19,431 4,054 Restructurings - 52 390 2,434 ------- ------- -------- ------- Total adjustments 9,715 2,079 19,821 6,488 ------- ------- -------- ------- Pro forma operating income $20,026 $ 6,780 $ 35,905 $10,150 ------- ------- -------- ------- PRO FORMA NET INCOME GAAP basis income before income taxes $ 4,474 $ 1,550 $ 5,785 $ 40 Adjustments to GAAP basis income before income taxes Amortization of intangible assets 9,715 2,027 19,431 4,054 Amortization of debt placement fees 2,302 207 2,978 398 Restructurings - 52 390 2,434 Non-cash stock compensation - - 73 - ------- ------- -------- ------- Total adjustments 12,017 2,286 22,872 6,886 Adjusted income before income taxes 16,491 3,836 28,657 6,926 Income tax provision (a) (6,135) (1,510) (10,967) (2,432) ------- ------- -------- ------- Pro forma net income $10,356 $ 2,326 $ 17,690 $ 4,494 ------- ------- -------- ------- PRO FORMA EARNINGS PER SHARE Basic Weighted average number of basic shares outstanding 22,811 20,845 22,135 20,750 Basic pro forma net income per share $ 0.45 $ 0.11 $ 0.80 $ 0.22 ------- ------- -------- ------- Diluted Weighted average number of basic shares outstanding 22,811 20,845 22,135 20,750 Employee stock option shares 1,605 1,266 1,542 1,237 ------- ------- -------- ------- Weighted average number of diluted shares outstanding 24,416 22,111 23,677 21,987 Diluted pro forma net income per share $ 0.42 $ 0.11 $ 0.75 $ 0.20 ------- ------- ------- ------- (a) The pro forma tax provision excludes the $5.9 million research and development tax credit reported for GAAP during the second quarter of 2005. ITRON, INC. RECONCILIATION BETWEEN GAAP NET INCOME AND EBITDA (Unaudited, in thousands) Three Months Six Months Ended June 30, Ended June 30, ---------------------------------- 2005 2004 2005 2004 -------- ------- -------- -------- GAAP basis net income $9,313 $818 $10,130 $80 Adjustments to GAAP basis net income Interest income (94) (111) (98) (128) Interest expense 6,385 2,261 10,952 3,015 Income tax provision (benefit) (4,839) 732 (4,345) (40) Depreciation and amortization 13,144 4,390 26,124 8,830 -------- ------- -------- -------- Total adjustments 14,596 7,272 32,633 11,677 EBITDA $23,909 $8,090 $42,763 $11,757 -------- ------- -------- -------- ITRON, INC. SEGMENT INFORMATION (Unaudited, in thousands) Three Months Ended Six Months Ended June 30, June 30, ------------------- ------------------- 2005 2004 2005 2004 -------- -------- -------- -------- Revenues Hardware Solutions Meter Data Collection $ 62,192 $ 67,170 $111,868 $121,916 Electricity Metering 60,622 - 114,728 - -------- -------- -------- -------- Total Hardware Solutions 122,814 67,170 226,596 121,916 Software Solutions 12,309 12,472 24,997 23,328 -------- -------- -------- -------- Total Company $135,123 $ 79,642 $251,593 $145,244 -------- -------- -------- -------- Gross profit Hardware Solutions Meter Data Collection $ 27,283 $ 31,309 $ 48,327 $ 58,086 Electricity Metering 24,710 - 48,987 - -------- -------- -------- -------- Total Hardware Solutions 51,993 31,309 97,314 58,086 Software Solutions 4,746 4,949 10,423 8,044 -------- -------- -------- -------- Total Company $ 56,739 $ 36,258 $107,737 $ 66,130 -------- -------- -------- -------- Operating income (loss) Hardware Solutions Meter Data Collection $ 21,912 $ 25,953 $ 37,940 $ 47,727 Electricity Metering 20,437 - 40,326 - Other unallocated costs (6,184) (4,056) (12,205) (7,405) -------- -------- -------- -------- Total Hardware Solutions 36,165 21,897 66,061 40,322 Software Solutions (2,917) (4,918) (5,569) (11,892) Corporate unallocated (22,937) (12,278) (44,408) (24,768) -------- -------- -------- -------- Total Company $ 10,311 $ 4,701 $ 16,084 $ 3,662 -------- -------- -------- -------- ITRON, INC. CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands) June 30, Dec. 31, 2005 2004 -------- -------- ASSETS Current assets Cash and cash equivalents $ 9,958 $ 11,624 Accounts receivable, net 85,921 90,097 Inventories 46,351 45,459 Deferred income taxes, net 10,912 22,733 Other 6,143 5,477 -------- -------- Total current assets 159,285 175,390 Property, plant and equipment, net 53,979 59,690 Intangible assets, net 142,704 162,137 Goodwill 115,512 117,471 Deferred income taxes, net 51,583 27,252 Other 12,998 15,211 -------- -------- Total assets $536,061 $557,151 -------- -------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses $ 39,556 $ 37,439 Wages and benefits payable 16,720 13,947 Current portion of debt 2,124 35,647 Current portion of warranty 6,148 7,243 Unearned revenue 19,122 22,991 -------- -------- Total current liabilities 83,670 117,267 Long-term debt 165,172 239,361 Project financing debt 2,805 3,227 Warranty 5,116 6,331 Other obligations 5,662 6,535 -------- -------- Total liabilities 262,425 372,721 Shareholders' equity Preferred stock - - Common stock 291,458 211,920 Accumulated other comprehensive income, net 492 954 Accumulated deficit (18,314) (28,444) -------- -------- Total shareholders' equity 273,636 184,430 -------- -------- Total liabilities and shareholders' equity $536,061 $557,151 -------- -------- ITRON, INC. CONSOLIDATED STATEMENTS OF CASH FLOW Six Months Ended June 30, ---------------------- 2005 2004 --------- --------- (in thousands) Operating activities Net income $ 10,130 $ 80 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 26,124 8,830 Employee stock plan income tax benefits 7,047 1,121 Amortization of prepaid debt fees 3,048 415 Impairment of investments - 775 Deferred income tax benefit (12,380) (1,393) Other, net 1,203 272 Changes in operating assets and liabilities, net of acquisitions: Accounts receivable 4,324 9,066 Inventories (892) (4,320) Long-term notes receivable, net (877) - Accounts payable and accrued expenses 2,179 (1,568) Wages and benefits payable 2,756 209 Unearned revenue (4,110) (847) Warranty (181) (5,712) Other long-term obligations (644) (208) Other, net (936) 462 --------- --------- Cash provided by operating activities 36,791 7,182 Investing activities Proceeds from the sale of property, plant and equipment 2,642 11 Acquisition of property, plant and equipment (5,276) (6,830) Pre-acquisition activities - (4,629) Payment of contingent purchase price for acquisition - (1,957) Other, net 276 348 --------- --------- Cash used by investing activities (2,358) (13,057) Financing activities New borrowings - 124,081 Transfer to escrow for senior subordinated notes - (128,310) Change in short-term borrowings, net - 11,000 Payments on debt (108,178) (8,696) Issuance of common stock 72,318 3,967 Prepaid debt fees (267) (174) Other, net 28 (6) --------- --------- Cash provided (used) by financing activities (36,099) 1,862 Decrease in cash and cash equivalents (1,666) (4,013) Cash and cash equivalents at beginning of period 11,624 6,240 --------- --------- Cash and cash equivalents at end of period $ 9,958 $ 2,227 --------- --------- CONTACT: Itron, Inc. Mima Scarpelli, 509-891-3565 mima.scarpelli@itron.com -----END PRIVACY-ENHANCED MESSAGE-----