EX-99.1 2 a4997561ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Badger Meter Reports Record Third Quarter Sales and Earnings MILWAUKEE--(BUSINESS WIRE)--Oct. 18, 2005--Badger Meter, Inc. (AMEX:BMI) today reported record third quarter sales and earnings for the period ended September 30, 2005. Net sales were a third quarter record $54,194,000, a 1.6% increase from sales of $53,340,000 for the third quarter of 2004. Net earnings increased 12.5% to a third quarter record $3,811,000 or $0.54 per diluted share, compared to net earnings of $3,389,000 or $0.50 per diluted share for the same period in the prior year. For the first nine months of 2005, net sales were $166,058,000, a 6.1% increase from sales of $156,492,000 for the first three quarters of 2004. Net earnings were $11,526,000 or $1.65 per diluted share for the first nine months of 2005, a 30.7% increase from earnings of $8,816,000 or $1.30 per diluted share for the comparable prior period. "Revenues showed a small increase over our very strong 2004 third quarter. In the utility market, our proprietary Orion(R) mobile radio frequency automatic meter reading system continued to be well received. Products contributing to increased industrial sales included Research Control(R) valves, Data Industrial(R) impeller flow meters, Magnetoflow(R) meters and dispensing systems for the concrete market," said Richard A. Meeusen, chairman, president and CEO of Badger Meter. Meeusen said the gross margin increased slightly in the third quarter over the same period in 2004, reflecting increased sales of higher-margin products. "We are continuing to invest in developing new products and enhancing existing products, with an ongoing focus on the long-term growth potential of automatic meter reading," he added. "We are pleased with our earnings for the first three quarters of 2005, which in fact have exceeded the total for all of 2004. The fourth quarter, however, is traditionally a slower period for us," said Meeusen. Meeusen noted that during the first three quarters of 2005, the company held 100th Anniversary celebrations at each of its facilities around the world. "Our century of expertise in flow measurement gives us a strong foundation to build on in the years ahead," 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 this news release, as well as other information provided from time to time by Badger Meter, Inc. (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. All such forward looking statements are based on the Company's then current views and assumptions and involve risks and uncertainties that include, among other things: -- the continued shift in the Company's business from lower cost, local-read meters toward more expensive, value-added automatic meter reading (AMR) systems; -- the success or failure of newer Company products, including the Orion(R) radio frequency mobile AMR system, the absolute digital encoder (ADE(TM)) and the Galaxy(TM) fixed network AMR system; -- changes in competitive pricing and bids in both the domestic and foreign marketplaces, and particularly in continued intense price competition on government bid contracts for lower cost, local read meters; -- the actions (or lack thereof) of the Company's competitors; -- the Company's relationships with its alliance partners, particularly its alliance partners that provide AMR connectivity solutions; -- the general health of the United States and foreign economies, including housing starts in the United States and overall industrial activity; -- increases in the cost and/or availability of needed raw materials and parts; -- changes in foreign economic conditions, including currency fluctuations between the United States dollar and the euro; and -- changes in laws and regulations, particularly laws dealing with the use of lead (which can be used in the manufacture of certain meters incorporating brass housings) and Federal Communications Commission rules affecting the use and/or licensing of radio frequencies necessary for AMR products. All of these factors are beyond the Company's control to varying degrees. 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 in this document are made only as of the date of this document and the Company assumes no obligation, and disclaims any obligation, to update any 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 (Unaudited) Nine Months Ended September 30, 2005 2004 ---- ---- Net sales $166,058,000 $ 156,492,000 Gross margin $57,628,000 $51,510,000 Earnings before income taxes $19,306,000 $14,943,000 Provision for income taxes $7,780,000 $6,127,000 Net earnings $11,526,000 $8,816,000 Earnings per share: Basic $1.71 $1.34 Diluted $1.65 $1.30 Shares used in computation of: Basic 6,729,402 6,580,054 Diluted 7,004,214 6,777,887 Three Months Ended September 30, 2005 2004 ---- ---- Net sales $54,194,000 $53,340,000 Gross margin $18,567,000 $17,903,000 Earnings before income taxes $6,096,000 $6,060,000 Provision for income taxes $2,285,000 $2,671,000 Net earnings $3,811,000 $3,389,000 Earnings per share: Basic $0.56 $0.51 Diluted $0.54 $0.50 Shares used in computation of: Basic 6,776,572 6,613,266 Diluted 7,112,759 6,857,278 BADGER METER, INC. CONSOLIDATED CONDENSED BALANCE SHEETS Assets September 30 December 31 ------ 2005 2004 ---- ---- (Unaudited) Cash $3,079,000 $2,834,000 Receivables 33,974,000 26,879,000 Inventories 32,956,000 35,646,000 Other current assets 6,447,000 6,023,000 ------------- ------------ Total current assets 76,456,000 71,382,000 Net property, plant and equipment 41,842,000 42,016,000 Prepaid pension 18,117,000 17,290,000 Other long-term assets 5,209,000 5,169,000 Goodwill 6,638,000 7,104,000 ------------- ------------ Total assets $148,262,000 $142,961,000 ============= ============ Liabilities and Shareholders' Equity ------------------------------------ Short-term debt and current portion long-term debt $16,540,000 $22,887,000 Payables 14,316,000 11,395,000 Accrued compensation and employee benefits 6,053,000 6,166,000 Other liabilities 6,138,000 4,799,000 ------------- ------------ Total current liabilities 43,047,000 45,247,000 Deferred income taxes 7,409,000 7,437,000 Long-term employee benefits 10,731,000 11,392,000 Long-term debt 15,937,000 14,819,000 Shareholders' equity 71,138,000 64,066,000 ------------- ------------ Total liabilities and shareholders' equity $148,262,000 $142,961,000 ============= ============ CONTACT: Badger Meter, Inc. Joan C. Zimmer, 414-371-5702