Exhibit 99.1
Badger Meter Reports Record Quarter Sales
MILWAUKEE--(BUSINESS WIRE)--July 20, 2006--Badger Meter, Inc.
(AMEX:BMI) today reported record sales for the second quarter ended
June 30, 2006.
Second Quarter Highlights
-- Net sales were a record $62,405,000 for the second quarter of
2006, an 8.7% increase from sales of $57,432,000 for the
second quarter of 2005.
-- Net earnings were $4,049,000 for the second quarter of 2006, a
2.6% decrease from earnings of $4,159,000 for the same period
in 2005, due principally to higher metal costs.
-- Diluted earnings per share were $0.28 for the second quarter
of 2006, a 6.7% decrease from earnings of $0.30 per share for
the comparable prior period.
-- Per share amounts have been restated to reflect a 2-for-1
stock split on June 15, 2006 in the form of a 100% stock
dividend.
Six Months Highlights
-- Net sales were $123,441,000 for the first six months of 2006,
a 10.3% increase from sales of $111,864,000 for the same
period in 2005.
-- Net earnings were $8,280,000 for the first half of 2006, a
7.3% increase from earnings of $7,715,000 for the first half
of 2005.
-- Diluted earnings per share were $0.58 for the first six months
of 2006, a 5.5% increase from earnings of $0.55 per share for
the same period in 2005.
"Our sales continued to build momentum in the second quarter. The
improvement was driven by double-digit increases in sales of our
Orion(R) proprietary mobile radio frequency automatic meter reading
(AMR) system and commercial products for the utility market. Overall,
sales of products for the residential utility market were up for the
quarter, while sales of industrial products were basically flat," said
Richard A. Meeusen, chairman, president and chief executive officer of
Badger Meter.
"While we are pleased with our top-line performance, our bottom
line results did not meet our expectations. The profit margin declined
two percentage points in the second quarter due to the significant
increase in the price of copper, a primary material used in our water
meters. We recently announced price increases that will be implemented
in the third quarter to partially offset the higher cost of copper. In
addition, the performance of our operation in Nancy, France, was again
a disappointment. We are continuing to explore our options for this
business," said Meeusen.
Meeusen noted that the company's new facility in Nogales, Mexico
is nearing completion. "We will transition production from our current
Rio Rico, Arizona facility to this location over the next few months
and expect to be in full production by year end. The new facility is
expected to improve manufacturing efficiency and reduce costs," said
Meeusen.
"We remain optimistic about continued growth in sales for the
second half of the year. Customer acceptance for our Orion product is
very strong, as evidenced by the recent installation of our
1,000,000th unit, just over three years after the product was first
introduced to the market. On the earnings side, we continue to be
concerned about the impact of copper costs on margins, although we do
expect to see some relief from the price increases," added Meeusen.
About Badger Meter
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(R) 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;
-- changes in the Company's relationships with its alliance
partners, primarily its alliance partners that provide AMR
connectivity solutions, and particularly those that sell
products that do or may compete with the Company's products;
-- changes in 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, including recent increases in the cost of
brass housings as a result of increases in the commodity
prices for copper and zinc at the supplier level and resin as
a result of increases in petroleum and natural gas prices;
-- the ability to improve operating results for foreign markets
that have experienced historical losses;
-- changes in foreign economic conditions, particularly 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)
Six Months Ended June 30,
2006 2005
---- ----
Net sales $123,441,000 $111,864,000
Gross margin $41,707,000 $39,439,000
Earnings before income taxes $14,577,000 $13,210,000
Provision for income taxes $6,297,000 $5,495,000
Net earnings $8,280,000 $7,715,000
Earnings per share(1):
Basic $0.60 $0.57
Diluted $0.58 $0.55
Shares used in computation of(1):
Basic 13,709,700 13,426,628
Diluted 14,254,306 13,926,544
Three Months Ended June 30,
2006 2005
---- ----
Net sales $62,405,000 $57,432,000
Gross margin $20,595,000 $20,084,000
Earnings before income taxes $7,283,000 $7,182,000
Provision for income taxes $3,234,000 $3,023,000
Net earnings $4,049,000 $4,159,000
Earnings per share(1):
Basic $0.29 $0.31
Diluted $0.28 $0.30
Shares used in computation of(1):
Basic 13,866,729 13,449,654
Diluted 14,381,426 13,996,664
(1)Per share amounts and number of shares have been restated to
reflect the 2-for-1 stock split paid on June 15, 2006.
BADGER METER, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
Assets June 30 December 31
------ 2006 2005
---- ----
(Unaudited)
Cash $3,509,000 $4,403,000
Receivables 38,255,000 30,450,000
Inventories 36,270,000 31,970,000
Other current assets 6,464,000 5,741,000
------------- -------------
Total current assets 84,498,000 72,564,000
Net property, plant and equipment 46,510,000 43,870,000
Prepaid pension 16,822,000 17,726,000
Other long-term assets 5,173,000 5,127,000
Goodwill 6,871,000 6,580,000
------------- -------------
Total assets $159,874,000 $145,867,000
============= =============
Liabilities and Shareholders' Equity
------------------------------------
Short-term debt and current portion
long-term debt $25,577,000 $16,278,000
Payables 14,872,000 11,484,000
Accrued compensation and employee
benefits 5,659,000 6,436,000
Other liabilities 5,919,000 5,388,000
------------- -------------
Total current liabilities 52,027,000 39,586,000
Deferred income taxes 6,597,000 6,584,000
Long-term employee benefits and other 10,901,000 10,921,000
Long-term debt 6,966,000 15,360,000
Shareholders' equity 83,383,000 73,416,000
------------- -------------
Total liabilities and
shareholders' equity $159,874,000 $145,867,000
============= =============
CONTACT: Badger Meter, Inc.
Joan C. Zimmer, 414-371-5702