-----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, DyWjJJXe62hSm7S+o8rQzY6lNnQP3biXdsHf91hwiDFq16sFOiiSgfguHb3DZ3It /iGUpvEo9YCBadypy/yW9A== 0000950137-05-007460.txt : 20050617 0000950137-05-007460.hdr.sgml : 20050616 20050617103150 ACCESSION NUMBER: 0000950137-05-007460 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041231 FILED AS OF DATE: 20050617 DATE AS OF CHANGE: 20050617 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: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06706 FILM NUMBER: 05901707 BUSINESS ADDRESS: STREET 1: 4545 WEST BROWN DEER ROAD CITY: MILWAUKEE STATE: WI ZIP: 53223 BUSINESS PHONE: 4143715702 MAIL ADDRESS: STREET 1: 4545 W BROWN DEER RD CITY: MILWAUKEE STATE: WI ZIP: 53223 FORMER COMPANY: FORMER CONFORMED NAME: BADGER METER MANUFACTURING CO DATE OF NAME CHANGE: 19710729 11-K 1 c95998e11vk.txt ANNUAL REPORT FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] ANNUAL REPORT PURSUANT TO SECTION 15-(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2004 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15-(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------------------- ----------------------- Commission file number 1-6706 A. Full title of the Plan and the address of the Plan, if different from that of the issuer named below: BADGER METER EMPLOYEE SAVINGS AND STOCK OWNERSHIP PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Badger Meter, Inc. 4545 W. Brown Deer Road Milwaukee, WI 53223 REQUIRED INFORMATION The Badger Meter Employee Savings and Stock Ownership Plan (the Plan) is subject to the requirements of the Employee Retirement Income Security Act of 1974 (ERISA). Attached hereto is a copy of the most recent financial statements and schedules of the Plan prepared in accordance with the financial reporting requirements of ERISA. 2 Badger Meter Employee Savings and Stock Ownership Plan Financial Statements and Additional Information December 31, 2004 and 2003 - -------------------------------------------------------------------------------- Table of Contents Report of Independent Registered Public Accounting Firm..........................4 Financial Statements Statements of Net Assets Available for Benefits...............................5 Statement of Changes in Net Assets Available for Benefits.....................6 Notes to Financial Statements.................................................7 Additional Information Schedule H Item 4i - Schedule of Assets Held for Investment Purposes.........19 Schedule H Item 4j - Schedule of Reportable Transactions.....................20
3 WIPFLi LLP Report of Independent Registered Public Accounting Firm Employee Benefit Plans Committee of the Board of Directors of Badger Meter, Inc. Badger Meter Employee Savings and Stock Ownership Plan Milwaukee, Wisconsin We have audited the accompanying statements of net assets available for benefits of Badger Meter Employee Savings and Stock Ownership Plan as of December 31, 2004 and 2003, and the related statement of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2004 and 2003, and the changes in its net assets available for benefits for the year ended December 31, 2004 in conformity with U.S. generally accepted accounting principles. Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information of assets held for investment purposes as of December 31, 2004 and reportable transactions for the year ended December 31, 2004 are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Wipfli LLP April 22, 2005 Milwaukee, Wisconsin 4 Badger Meter Employee Savings and Stock Ownership Plan Statements of Net Assets Available for Benefits December 31, 2004 and 2003 - --------------------------------------------------------------------------------
2004 2003 ----------- ----------- Cash $ 309,948 $ 174,674 Investments, at fair value 52,011,439 41,487,833 Receivables: Company contributions 154,386 223,952 Interest 4,773 5,400 ----------- ----------- Total receivables 159,159 229,352 ----------- ----------- Total assets 52,480,546 41,891,859 ----------- ----------- Liabilities: Notes payable 1,065,000 1,285,000 ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $51,415,546 $40,606,859 =========== ===========
See accompanying notes to financial statements. 5 Badger Meter Employee Savings and Stock Ownership Plan Statement of Changes in Net Assets Available for Benefits Year Ended December 31, 2004 - --------------------------------------------------------------------------------
2004 ----------- Additions: Investment income: Net appreciation in fair value of investments $ 9,484,656 Interest and dividends 982,974 ----------- Total investment income 10,467,630 ----------- Contributions: Company 154,386 Roll over 505,125 Participants 2,679,409 ----------- Total contributions 3,338,920 ----------- Total additions 13,806,550 ----------- Deductions: Benefits paid to participants 2,962,941 Interest expense 32,293 Loan fees 2,629 ----------- Total deductions 2,997,863 ----------- Net increase 10,808,687 ----------- Net assets available for benefits: Balance at beginning of year 40,606,859 ----------- Balance at end of year $51,415,546 ===========
See accompanying notes to financial statements. 6 Badger Meter Employee Savings and Stock Ownership Plan Notes to Financial Statements - -------------------------------------------------------------------------------- Note 1 Description of the Plan General The following description of Badger Meter Employee Savings and Stock Ownership Plan ("the Plan") is for general information purposes only. Participants should refer to the summary plan description for a more complete description of the Plan. The Plan is a defined-contribution plan adopted under Section 401(k) of the Internal Revenue Code (the "Code"). The Plan was established as of January 1, 1991, to consolidate the Badger Meter Savings Plan, the Badger Meter Payroll-Based Employee Stock Ownership Plan, and the Badger Meter Employee Stock Ownership Plan into a single plan. Substantially all domestic employees of Badger Meter, Inc. ("the Company") are eligible to participate in the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Contributions Participant contributions may be made up to a maximum of 20% of their compensation on a pretax basis, not to exceed the amount allowed by the Code. Company contributions are made at a rate of 25% of the participant contributions, with the Company contribution percentage applying to a maximum of 7% of the participant's compensation for the year. The Company may also contribute additional amounts over and above the required contribution at the discretion of the Company's Board of Directors. No such contributions were made in 2004. Participant contributions are directed into various investment options (currently totaling nine) at the participant's discretion. Company contributions are made in cash and are used by the Plan to repay principal and interest on the note payable (see Note 5). As principal and interest payments are made on the note payable, unallocated shares of Badger Meter, Inc. common stock, which serve as collateral for the note payable, are released to Plan participants and provide the Company matching contribution at current market values. Participant contributions may be temporarily invested in a money market common trust fund before being invested in the aforementioned investments. 7 Badger Meter Employee Savings and Stock Ownership Plan Notes to Financial Statements - -------------------------------------------------------------------------------- Note 1 Description of the Plan (Continued) Contributions (Continued) All contributions are excluded from the participant's current wages for federal income tax purposes. No federal income tax is paid for the pretax contributions and growth thereon until the participant withdraws them from the Plan. Participant Accounts Each participant's account is credited with the participant's contribution, the Company's matching contribution, an allocation of the Company's discretionary contribution, if any, and Plan earnings. The Company's discretionary contribution is allocated equally to all participants. Plan earnings are allocated based on the participant's account balances in relation to total participant account balances. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. Vesting Participants are fully vested in all amounts in their accounts. Payment of Benefits Upon retirement, death, disability, or termination of employment, the participant's account shall generally be distributed in a single lump sum at the participant's option. Final distributions will be made either in shares of Company common stock plus cash in lieu of fractional shares or entirely in cash. 8 Badger Meter Employee Savings and Stock Ownership Plan Notes to Financial Statements - -------------------------------------------------------------------------------- Note 1 Description of the Plan (Continued) Withdrawals A participant's contribution may not be withdrawn prior to retirement, death, disability, termination of employment, or termination of the Plan, except for financial hardship, a one-time distribution after age 59 1/2, or in the form of loans to participants. The Plan defines financial hardship as expenses related to college education, uninsured major medical expense, purchase of the participant's principal residence, or other financial need that cannot be met from other resources of the participant. All withdrawals are subject to approval by the Plan Administrator. Loans to Participants Participants are allowed to borrow from their separate account balance. The amount of a loan shall not be less than $1,000 or more than $50,000 and shall not exceed 50% of the participant's account balance. Loan maturities cannot exceed 60 months and are secured by the participants' vested interests in the Plan. Amounts loaned to a participant do not share in the allocations of Plan earnings (see Participant's Accounts above), but are credited with the interest earned on the loan balance payable by the participant charged at a reasonable rate as determined by the Plan Administrator. Note 2 Summary of Significant Accounting Policies Basis of Accounting The accompanying financial statements are prepared using the accrual basis of accounting in accordance with U.S. generally accepted accounting principles. 9 Badger Meter Employee Savings and Stock Ownership Plan Notes to Financial Statements - -------------------------------------------------------------------------------- Note 2 Summary of Significant Accounting Policies (Continued) Investment Valuation The investment in the guaranteed income group annuity insurance contract is valued at contract value as reported by Massachusetts Mutual Life Insurance Company ("Mass Mutual"). Contract value represents contributions made under the contract, plus interest at the contract rate, less funds used to pay benefits and the insurance company's administrative expenses. The Mass Mutual contract is a "fully benefit-responsive" investment contract, as defined in Statement of Position 94-4, "Reporting of Investment Contracts Held by Health and Welfare Benefit Plans and Defined Contribution Pension Plans." As such, this contract is stated at contract value as reported by the insurance company. Crediting interest rates are adjusted annually on January 1. The investments in mutual funds are valued at the redemption price established by the fund's trustee based upon the quoted prices of the underlying assets. Units of common trust funds are valued at quoted redemption price. The investment in Badger Meter, Inc. common stock, which is traded on the American Stock Exchange, is valued at the last reported sales price on the last business day of the Plan year. The money market fund is valued at fair value based on quoted market or redemption price on the last business day of the Plan year. Loans receivable from participants are reported at their unpaid principal balance, which approximates fair value. 10 Badger Meter Employee Savings and Stock Ownership Plan Notes to Financial Statements - -------------------------------------------------------------------------------- Note 2 Summary of Significant Accounting Policies (Continued) Use of Estimates in Preparation of Financial Statements The preparation of the accompanying financial statements in conformity with U.S. generally accepted accounting principles, requires the administrators to make estimates and assumptions that directly affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results may differ from these estimates. Expenses Expenses related to the administration of the Plan are paid by the Company. Investment expenses are payable by the Plan and reimbursed by the Company at its discretion. Payment of Benefits Benefits are recorded when paid. Risk and Uncertainties The Plan's investments are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investments and the level of uncertainty related to changes in the values of investments, it is at least reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the statements of net assets available for benefits and the statement of changes in net assets available for benefits. 11 Badger Meter Employee Savings and Stock Ownership Plan Notes to Financial Statements - -------------------------------------------------------------------------------- Note 3 Investments Guaranteed Income Group Annuity Contract No. IG 4178 This contract is an unallocated insurance contract with Mass Mutual, which is credited at least annually for interest earned. Interest rates for 2004 and 2003 were 4.4% and 5.0%, respectively. Mass Mutual determines the annual guaranteed interest rate each January 1. The average yields for 2004 and 2003 were 4.4% and 5.0%, respectively. Badger Meter, Inc. Common Stock The Plan's investment in Badger Meter, Inc. stock consists of 675,451 shares and 732,528 shares (adjusted for a two-for-one stock split in December 2004) as of December 31, 2004 and 2003, respectively. At December 31, 2004 and 2003, the fair value of the Plan's investment in Badger Meter, Inc. common stock, as determined by quoted market price, was $20,230,793 and 13,972,972, respectively. During 2004, the Plan's investments (including investments purchased, sold, as well as held during the year) appreciated in fair value as follows:
2004 ----------- Badger Meter, Inc. common stock $7,506,025 Common trust funds 874,558 Mutual funds 1,104,073 ----------- Net appreciation in fair value of investments $9,484,656 ==========
12 Badger Meter Employee Savings and Stock Ownership Plan Notes to Financial Statements - -------------------------------------------------------------------------------- Note 3 Investments (Continued) Investments that represent 5% or more of fair value of the Plan's net assets are as follows:
December 31, 2004 ----------- Badger Meter, Inc. common stock $20,230,793 M&I Growth Balanced Portfolio 3,722,937 M&I Diversified Stock Portfolio 5,029,529 Massachusetts Mutual Unallocated Insurance Contract 11,286,573 Heartland Value Plus Fund 4,877,378 ----------- Total $45,147,210 ===========
Note 4 Allocated and Unallocated Net Assets Available For Benefits Information about net assets available for benefits as of December 31, 2004 and 2003 and the significant components of changes in net assets available for benefits during 2004 related to allocated and unallocated net assets is as follows:
2004 2003 ------------ ------------ Cash (allocated) $ 218,447 $ 108,626 Cash (unallocated) 91,501 66,048 Investments, at fair value: Badger Meter, Inc. common stock (allocated) 17,127,596 11,589,093 Badger Meter, Inc. common stock (unallocated) 3,103,197 2,383,879 Investments (allocated) 31,780,646 27,514,861 Receivables: Company (unallocated) 154,386 223,952 Interest (allocated) 4,773 5,361 Interest (unallocated) 0 39 Note payable (unallocated) (1,065,000) (1,285,000) ------------ ------------ Total $ 51,415,546 $ 40,606,859 ============ ============
13 Badger Meter Employee Savings and Stock Ownership Plan Notes to Financial Statements - -------------------------------------------------------------------------------- NOTE 4 Allocated and Unallocated Net Assets Available For Benefits (Continued)
2004 -------------------------------------------------- Unallocated Allocated Total ----------- --------- ---------- Change in net assets: Net appreciation in fair value of investments $1,123,494 $8,361,162 $9,484,656 Interest and dividends 57,784 925,190 982,974 Contributions: Company 154,386 0 154,386 Roll over 0 505,125 505,125 Participants 0 2,679,409 2,679,409 Benefits paid to participants 0 (2,962,941) (2,962,941) Interest expense (32,293) 0 (32,293) Loan fees (76) (2,553) (2,629) Transfers (408,129) 408,129 0 ---------- ---------- ----------- Total $895,166 $9,913,521 $10,808,687 ========== ========== ===========
Effective January 1, 2003, all participants have the ability to direct the investments within their accounts. Accordingly, all allocated investments are fully participant directed. Note 5 Note Payable At December 31, 2004, the outstanding balance on the loan is $1,065,000. The terms of the loan allow variable payments of principal with the final principal and interest payment due April 30, 2008. Interest is payable at the prime interest rate (effective rate of 5.25% at December 31, 2004) or at the LIBOR rate plus 1.50% (effective rate of 3.70% at December 31, 2004). At December 31, 2004, the Plan has exercised its option to designate the outstanding balance as a LIBOR rate loan. The note payable is secured by the unallocated shares of Badger Meter, Inc. common stock held by the Plan (see summary below). In addition, the Company has guaranteed the note payable and is obligated to contribute sufficient cash to the Plan to enable it to repay the loan principal and interest in the event the Plan is unable to settle its obligation. 14 Badger Meter Employee Savings and Stock Ownership Plan Notes to Financial Statements - -------------------------------------------------------------------------------- Note 5 Note Payable (Continued) The pledged unallocated shares of Badger Meter, Inc. common stock are released as principal and interest payments are made on the note payable. The shares released, less any shares that are distributed as benefit payments, are considered available and are allocated to the participants' accounts just prior to each annual principal due date on the note payable. The note agreement contains certain restrictions and covenants, including a limitation on additional borrowings. The Company contributions are used to make principal and interest payments on the note payable. The Plan will release unallocated shares with a value in excess of the principal payments made due to appreciation of the Company's stock. As of December 31, 2003, $1,285,000 was due under a note payable with terms and conditions similar to the note payable described above. The note was refinanced during 2004. At December 31, 2004 and 2003, the breakdown between allocated and unallocated shares was as follows:
2004 --------------------------------------------------- Shares Available for Benefits Cost Fair Value --------------------------------------------------- Allocated 571,873 $4,974,934 $17,127,596 Unallocated 103,578 1,064,989 3,103,197 ------- ---------- ----------- Total 675,451 $6,039,923 $20,230,793 ======= ========== =========== Per share $29.95 ======
15 Badger Meter Employee Savings and Stock Ownership Plan Notes to Financial Statements - -------------------------------------------------------------------------------- Note 5 Note Payable (Continued)
2003 --------------------------------------------------- Shares Available for Benefits* Cost Fair Value --------------------------------------------------- Allocated 607,554 $4,462,679 $11,589,093 Unallocated 124,974 1,284,983 2,383,879 ------- ---------- ----------- Total 732,528 $5,747,662 $13,972,972 ======= ========== =========== Per share $19.08 ======
*Restated to reflect a 2 for 1 stock split during 2004. Note 6 Plan Termination Although it has not expressed any intent to do so, the Company has the right to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. Note 7 Income Tax Status The Plan has received a determination letter from the Internal Revenue Service dated August 3, 1995, stating that the Plan is qualified under Section 401(a) and 401(k) of the Code and, therefore, the related trust is exempt from taxation. Subsequent to the issuance of the determination letter, the Plan was amended. A new determination letter has been requested in 2002 but not yet received. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax-exempt. 16 Badger Meter Employee Savings and Stock Ownership Plan Notes to Financial Statements - -------------------------------------------------------------------------------- Note 8 Related Party Transactions During 2004 and 2003, the Plan received $386,189 and $398,904, respectively, in common stock dividends from the Company. Note 9 Voting Rights Each participant is entitled to exercise voting rights attributable to the shares allocated to his or her account. Unallocated shares are voted on by the Plan's administrative committee on behalf of the collective best interest of plan participants and beneficiaries. 17 Additional Information - -------------------------------------------------------------------------------- Badger Meter Employee Savings and Stock Ownership Plan Schedule H Item 4i - Schedule of Assets Held for Investment Purposes EIN: 39-0143280 Plan Number: 009 Year Ended December 31, 2004 - --------------------------------------------------------------------------------
Description of Current Identity of Issue Investment Cost Value - ------------------------------------------------------------------------------------------------------------------------- Badger Meter, Inc. Common Stock * 675,451 shares $6,039,923 $20,230,793 Massachusetts Mutual Life Insurance Company Insurance Contract ** 11,286,573 Heartland Value Plus Fund 181,653 shares ** 4,877,378 Marshall Government Income Fund * 148,141 shares ** 1,425,115 Marshall International Stock Fund * 98,334 shares ** 1,239,009 M&I Growth Balanced Portfolio * 152,838 shares ** 3,722,937 M&I Diversified Stock Portfolio * 176,867 shares ** 5,029,529 Fidelity Advisor Mid Cap Fund 55,608 shares ** 1,402,443 Managers Special Equity Fund 10,707 shares ** 968,026 Goldman Sachs Small Cap Value 5,154 shares ** 219,912 Davis N Y Venture Fund 20,363 shares ** 624,944 Participant loans Interest rates ranging $ 984,780 984,780 between 4.0% and 9.5% with various maturity dates Total Assets Held for Investment Purposes $52,011,439 ===========
* Party-in-interest. ** Cost information not required for participant-directed investments. See report of independent registered public accounting firm. 19 Badger Meter Employee Savings and Stock Ownership Plan Schedule H Item 4j - Schedule of Reportable Transactions EIN: 39-0143280 Plan Number: 009 Year Ended December 31, 2004 - --------------------------------------------------------------------------------
Current Value of Asset on Description of Cost of Transaction Net Gain Identity of Issue Asset Purchase Price Selling Price Asset Date or (Loss) - ------------------------------------------------------------------------------------------------------------------------------------ Category (iii) - Series of security transactions in excess of 5% of plan assets: Marshall & Ilsley Bank Cash $579,389 $0 $579,389 $579,389 $0 Marshall & Ilsley Bank Cash $0 $560,988 $560,988 $560,988 $0 Marshall & Ilsley Bank Badger Meter, Inc. $464,781 $0 $464,781 $464,781 $0 Common Stock Marshall & Ilsley Bank Badger Meter, Inc. $0 $1,683,020 $331,563 $1,351,457 $1,019,894 Common Stock ====================================================================================================================================
There were no category (i), (ii) or (iv) reportable transactions for the year ended December 31, 2004. See report of independent registered public accounting firm. 20 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the Plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. Badger Meter Employee Savings and Stock Ownership Plan Date: June 17, 2005 By: /s/ Richard A. Meeusen -------------------------------- Richard A. Meeusen Trustee By: /s/ Ronald H. Dix -------------------------------- Ronald H. Dix Trustee 21 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION 23 Consent of Wipfli LLP, Independent Registered Public Accounting Firm 22 EX-23 2 c95998exv23.txt CONSENT OF WIPFLI LLP EXHIBIT 23 CONSENT OF WIPFLI LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-62241) pertaining to the Badger Meter Employee Savings and Stock Ownership Plan (the Plan) of our report dated April 22, 2005, with respect to the financial statements and schedules of the Plan included in this Annual Report (Form 11-K) for the years ended December 31, 2004 and 2003. /s/ Wipfli LLP Milwaukee, Wisconsin June 17, 2005 23 -----END PRIVACY-ENHANCED MESSAGE-----