-----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, Wy3tnoBK9tSleup4CbYZKkvS9PZ+9C1ji0zgIQTHN0V2WY6vViGEsskFdP4Dwrpb 13/89HvccI8CsKU2XaFMtg== 0000950124-96-001841.txt : 19960430 0000950124-96-001841.hdr.sgml : 19960430 ACCESSION NUMBER: 0000950124-96-001841 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960429 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: BADGER METER INC CENTRAL INDEX KEY: 0000009092 STANDARD INDUSTRIAL CLASSIFICATION: TOTALIZING FLUID METERS & COUNTING DEVICES [3824] IRS NUMBER: 390143280 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06706 FILM NUMBER: 96552364 BUSINESS ADDRESS: STREET 1: 4545 WEST BROWN DEER ROAD STREET 2: C/O CORPORATE SECRETARY CITY: MILWAUKEE STATE: WI ZIP: 53223-0099 BUSINESS PHONE: 4143550400 FORMER COMPANY: FORMER CONFORMED NAME: BADGER METER MANUFACTURING CO DATE OF NAME CHANGE: 19710729 10-Q 1 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------------- ---------------- Commission File Number 1-6706 BADGER METER, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Wisconsin 39-0143280 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4545 West Brown Deer Road, Milwaukee, Wisconsin 53223 - -------------------------------------------------- --------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (414) 355-0400 ------------------- None ------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ---- ---- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class Outstanding at April 26, 1996 - ------------------------------------ ----------------------------- Common Stock, $1.00 par value 1,199,607 Class B Common Stock, $.10 par value 562,785
2 BADGER METER, INC. INDEX Page No. -------- Part I. Financial Information: Item 1 Financial Statements: Consolidated Condensed Balance Sheets - - March 31, 1996 and December 31, 1995 3 Consolidated Condensed Statements of Operations - - Three Months Ended March 31, 1996 and 1995 4 Consolidated Condensed Statements of Cash Flows - - Three Months Ended March 31, 1996 and 1995 5 Notes to Consolidated Condensed Financial Statements 6 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Part II. Other Information Item 6(a) Exhibits 8 Item 6(b) Reports on Form 8-K 8 Exhibit Index 10 -2- 3 Part I - Financial Information BADGER METER, INC. Item 1 Financial Statements CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in Thousands)
March 31, December 31, 1996 1995 --------- ----------- Assets (Unaudited) ------ Current assets: Cash $ 376 $ 1,177 Receivables 14,801 13,661 Inventories: Finished goods 4,340 3,403 Work in process 7,697 6,750 Raw materials and purchased parts 5,242 5,681 -------- -------- Total inventories 17,279 15,834 Prepaid expenses 736 745 -------- -------- Total current assets 33,192 31,417 Property, plant and equipment 55,836 55,101 Less accumulated depreciation (38,655) (37,714) -------- -------- 17,181 17,387 Intangible assets, at cost less accumulated amortization 1,132 1,217 Pension asset 5,907 5,821 Deferred income taxes 1,624 1,536 Deferred charges and other assets 3,055 3,149 -------- -------- Total assets $ 62,091 $ 60,527 ======== ======== Liabilities and Shareholders' Equity Current liabilities: Short-term debt $ 5,304 $ 5,515 Payables 5,804 4,922 Accrued liabilities 4,108 4,577 Income taxes 760 226 ------- ------- Total current liabilities 15,976 15,240 Accrued non-pension postretirement benefits 8,349 8,396 Other accrued employee benefits 3,926 3,728 Long-term debt 1,000 1,000 Shareholders' equity: Common Stock 1,558 1,552 Less: Treasury stock (358) (358) ------- ------- 1,200 1,194 Class B Common Stock 56 56 Capital in excess of par value 7,941 7,832 Reinvested earnings 25,097 24,552 Less: Employee benefit stock (1,085) (1,102) Pension liability adjustment (369) (369) ------- ------- Total shareholders' equity 32,840 32,163 ------- ------- Total liabilities and shareholders' equity $ 62,091 $ 60,527 ======= =======
See accompanying notes to consolidated condensed financial statements. -3- 4 BADGER METER, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Dollars in Thousands Except Per Share Amounts) (Unaudited)
Three Months Ended March 31, 1996 1995 --------- --------- Net sales $ 26,635 $ 27,928 Operating costs and expenses: Cost of sales 16,714 18,191 Marketing and administrative 6,799 6,415 Research and engineering 1,559 1,584 --------- --------- 25,072 26,190 --------- --------- Operating earnings 1,563 1,738 Interest expense 118 249 Other deductions 54 106 --------- --------- Earnings before income taxes 1,391 1,383 Provision for income taxes 503 526 --------- --------- Net earnings $ 888 $ 857 ========= ========= Per share amounts: Net earnings * $ .49 $ .49 ========= ========= Dividends declared - Common Stock $ .20 $ .1815 ========= ========= Dividends declared - Class B Common Stock $ .182 $ .165 ========= ========= Weighted average shares outstanding 1,760,784 1,751,492 ========= =========
* 1996 earnings per share include the effect of dilutive stock options. See accompanying notes to consolidated condensed financial statements. -4- 5 BADGER METER, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW (Dollars in Thousands) (Unaudited)
Three Months Ended March 31, 1996 1995 ------- ------- Operating activities: Net earnings $ 888 $ 857 Adjustments to reconcile net earnings to net cash provided by (used for) operations: Depreciation 964 913 Amortization 208 192 Noncurrent employee benefits 82 17 Deferred income taxes (88) (18) Other 14 10 Changes in: Receivables (1,140) (2,877) Inventory (1,445) (689) Current liabilities other than short-term debt 927 831 Prepaid expenses 9 (25) ------- ------- Total adjustments (469) (1,646) ------- ------- Net cash provided by (used for) operations 419 (789) ------- ------- Investing activities: Property, plant and equipment (775) (927) Other - net (6) (100) ------- ------- Net cash used for investing activities (781) (1,027) ------- ------- Financing activities: Bank borrowings (211) 2,051 Dividends (343) (308) Exercised stock options 115 5 ------- ------- Net cash provided by (used for) financing activities (439) 1,748 ------- ------- Increase (decrease) in cash (801) (68) Beginning of year 1,177 365 ------- ------- End of period $ 376 $ 297 ======= ======= Supplemental disclosures of cash flow information: Cash paid (refunded) during the period for: Income taxes $ 57 $ (114) ======= ======= Interest $ 106 $ 266 ======= =======
See accompanying notes to consolidated condensed financial statements. -5- 6 BADGER METER, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 1. In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the consolidated condensed financial position at March 31, 1996 and the related results of operations for the three-month periods ended March 31, 1996 and 1995 and cash flows for the three-month periods ended March 31, 1996 and 1995. The results of operations for the three-month period ended March 31, 1996 are not necessarily indicative of the results to be expected for the full year. The consolidated condensed balance sheet at December 31, 1995 was derived from amounts included in the Annual Report to Shareholders which was incorporated by reference in the Company's annual report on Form 10-K for the year ended December 31, 1995. 2. In October, 1995, the Financial Accounting Standards Board issued Financial Accounting Standard No. 123 "Accounting for Stock-Based Compensation" (FAS 123), effective for fiscal years beginning after December 15, 1995. As allowed by FAS 123, the company intends to use prior standards (APB 25) for determining annual compensation charges and will disclose the impact of fair value. -6- 7 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations --------------------------------------------------------------- Financial Condition Receivables increased 8.3%, or $1,140,000, from the seasonally low December 31, 1995 balance. The increase was considered normal. Inventories increased 9.1%, or $1,445,000, primarily to support future sales needs. These working capital requirements were partially funded by an increase of $882,000 in accounts payable (primarily related to inventory purchases) and an $801,000 reduction in cash balances during the quarter. Earnings for the quarter provided the balance of the working capital and funded a $211,000 decrease in short-term debt. As of March 31, 1996, the company had approximately $27,100,000 of credit lines with domestic and foreign banks of which $5,304,000 was in use. This compares to $12,488,000 in use at March 31, 1995 and $5,515,000 at December 31, 1995. The company believes that the present lines of credit are adequate to meet operating requirements. Results of Operations Net sales for the first quarter of 1996 of $26,635,000 reflect a 4.6% decrease over sales of $27,928,000 for the same period in 1995. The decrease was primarily related to lower unit volume of domestic water meter sales. Increases in higher value meter reading technology products, lubrication meters, natural gas instrumentation and primary flow products helped offset the meter decline. A supplier problem and the harsh winter in the eastern half of the country had an unfavorable effect on sales. The gross profit margin improved from 34.9% in 1995 to 37.2% in 1996. This increase was due primarily to higher margins earned on meter reading technology products, as well as an increased percentage of higher margin industrial products in the total sales for the first quarter of 1996 as compared to the first quarter of 1995. The increase in marketing and administrative costs was impacted by the development of an international group and the provision for a new long-term compensation plan. Research and engineering expenses were comparable between the quarters. Interest expense decreased $131,000 between periods due to lower interest rates and lower debt balances outstanding. Other deductions decreased $49,000 due primarily to favorable foreign exchange transactions. The effective tax rate for the first quarter of 1996 was 36.2% compared to 38.0% for the first quarter of 1995 and 37.1% for the entire year in 1995. The rate decrease is primarily due to the impact of tax credits in 1996. Earnings for the quarter of $888,000 have increased 3.6% over 1995 earnings of $857,000. However, the earnings per share have remained constant at $.49 for both periods due to the impact of dilutive options in 1996. No risks or uncertainties were identified that could have a material impact on operations and no long-lived assets have become permanently impaired in value. -7- 8 Part II - Other Information Item 6 Exhibits and Reports on Form 8-K (a) Exhibits: (11.0) Computation of fully diluted earnings per share (27.0) Financial Data Schedule (b) Reports on Form 8-K: There were no reports on Form 8-K filed for the three months ended March 31, 1996. -8- 9 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 thereunto duly authorized. BADGER METER, INC. Dated: April 26, 1996 By /S/ Richard A. Meeusen ---------------------------------------- Richard A. Meeusen Vice President - Finance and Treasurer Chief Financial Officer By /S/ William J. Shinners ---------------------------------------- William J. Shinners Vice President - Controller -9- 10 EXHIBIT INDEX Page Number (11.0) Computation of fully diluted earnings per share 11 (27.0) Financial Data Schedule -10- EX-11 2 COMPUTATION OF EARNINGS PER SHARE 1 Exhibit 11 BADGER METER, INC. COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE (Dollars in thousands except per share amounts)
Three Months Ended March 31, 1996 1995 -------------- -------------- (1) (2) PRIMARY Shares Average shares outstanding 1,760,784 1,751,492 Shares issuable upon exercise of stock options 51,281 28,264 --------- --------- Total 1,812,065 1,779,756 ========= ========= Earnings Net earnings applicable to adjusted Common shares $ 888 $ 857 ========= ========= Per share amounts Net earnings per share $ .49 $ .48 ========= ========= FULLY DILUTED Shares Average shares outstanding 1,760,784 1,751,492 Shares issuable upon exercise of stock options 51,897 31,905 --------- --------- Total 1,812,681 1,783,397 ========= ========= Earnings Earnings applicable to adjusted Common shares $ 888 $ 857 ========= ========= Per share amounts Net earnings per share $ .49 $ .48 ========= ========= Percentage dilution 2.9% 1.8%
(1) In 1996, earnings per share for financial statement purposes includes Common stock equivalents since dilution is approximately 3%. (2) In 1995, earnings per share for financial statement purposes does not include Common stock equivalents since dilution is less than 3%. -11- EX-27 3 FDS
5 This schedule contains summary financial information from the Company's Quarterly Report on Form 10Q and is qualified in its entirety by reference to such 10Q. 1000 3-MOS DEC-31-1996 MAR-31-1996 376 0 14,801 0 17,279 33,192 55,836 (38,655) 62,091 15,976 0 0 0 1,256 31,584 62,091 26,635 26,635 16,714 25,072 54 0 118 1,391 503 888 0 0 0 888 .49 .49
-----END PRIVACY-ENHANCED MESSAGE-----