MILWAUKEE, Wis., Feb. 3, 2003 -- Badger Meter Inc. Monday reported increased sales and earnings for the fourth quarter and year ended December 31, 2002.
Net sales were $167,317,000 for 2002, a 21% increase from sales of $138,537,000 for 2001. Net earnings increased 116% to $7,271,000 or $2.20 per diluted share for 2002, from earnings of $3,364,000 or $1.03 per diluted share in the prior year. Two acquisitions completed in 2002 contributed $11,047,000, or 7% of sales, and had a modest negative impact on earnings.
For the fourth quarter of 2002, net sales increased 20% to $40,325,000, from sales of $33,559,000 for the same period in 2001. Net earnings were $1,037,000 or $0.31 per diluted share for the fourth quarter of 2002, a 9% increase from earnings of $950,000 or $0.29 per diluted share for the comparable prior period. The 2002 acquisitions contributed $4,339,000 or 11% of fourth quarter sales. The fourth quarter results are consistent with prior fourth quarters, which is typically a seasonally slower period for the company.
"This was a year of significant improvement for Badger Meter. Sales increased substantially and we returned to higher levels of profitability," said Richard A. Meeusen, president and chief executive officer of Badger Meter.
"We saw a broad-based recovery on the utility side of our business in 2002, with increased sales from utilities of all sizes and in all geographic regions throughout the United States. The reorganization of our sales force in the beginning of 2002 also helped to generate higher sales of utility products. The industrial portion of our business was sluggish throughout the year, reflecting the challenging economic environment for our industrial customers," said Meeusen.
The strong utility sales reflected higher sales of both residential and commercial water meters. Sales of products for automatic meter reading (AMR) systems continued to increase as a result of the company's alliance with Itron, Inc. and higher sales of other AMR products. The company recently began shipping its new Orion® radio frequency AMR system. Sales of commercial water meters increased substantially, reflecting investments in research and engineering over the past three years to upgrade the product line. International sales also increased due to the acquisition of a French automotive fluid management systems distributor and shipments of residential water meters as part of a large project in Latin America.
Meeusen said the increase in earnings reflected the increased sales of higher margin automatic meter reading products as well as ongoing cost controls. "The 11% increase in operating expenses for 2002 is due almost entirely to the impact of the two acquisitions completed during the year. We made good progress in integrating the two acquisitions in the last half of 2002 and are taking steps to improve their performance. We believe both acquisitions provide solid growth opportunities for Badger Meter over the long term," he said.
"In addition to the improved financial performance, we moved forward with each of our major growth strategies in 2002. We strengthened both our utility and industrial product lines through new product development and acquisitions. We expanded our relationship with a major alliance partner and increased international sales. And we continued to improve efficiency and reduce operating costs while maintaining our traditional high quality," said Meeusen.
"We believe we are well positioned for continued improvement in 2003. We began 2003 with a backlog of $21.2 million, compared to $18.1 million at the beginning of 2002. We expect to introduce several new products during the year. We are financially strong and have the manufacturing capacity to support our growth. Most important, we have excellent people who are dedicated to their company's success," added Meeusen.
Badger Meter is a 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.
