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Previous: ASSOCIATES CORPORATION OF NORTH AMERICA, 424B2, 1995-05-08 |
Next: CALIFORNIA MICROWAVE INC, 424B3, 1995-05-08 |
<PAGE> 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, 1995
--------------
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.
<TABLE>
<CAPTION>
Class Outstanding at April 28, 1995
- - --------------------------- -----------------------------
<S> <C>
Common Stock, $1.00 par value 1,190,407
Class B Common Stock, $.10 par value 562,785
</TABLE>
<PAGE> 2
BADGER METER, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I. Financial Information:
Item 1 Financial Statements:
Consolidated Condensed Balance Sheets - -
March 31, 1995 and December 31, 1994 3
Consolidated Condensed Statements of Operations - -
Three Months Ended March 31, 1995 and 1994 4
Consolidated Condensed Statements of Cash Flows - -
Three Months Ended March 31, 1995 and 1994 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
</TABLE>
-2-
<PAGE> 3
Part I - Financial Information
BADGER METER, INC.
Item 1 Financial Statements
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
-------- -----------
Assets (Unaudited)
----------
<S> <C> <C>
Current assets:
Cash $ 297 $ 365
Receivables 17,309 14,432
Inventories:
Finished goods 2,623 3,101
Work in process 11,081 9,495
Raw materials 5,452 5,871
----------- ------------
Total inventories 19,156 18,467
Prepaid expenses 760 735
----------- ------------
Total current assets 37,522 33,999
Property, plant and equipment 53,857 52,939
Less accumulated depreciation (37,235) (36,322)
----------- ------------
16,622 16,617
Intangible assets 1,544 1,632
Pension asset 5,465 5,307
Deferred income taxes 1,345 1,327
Deferred charges and other assets 3,101 3,111
----------- ------------
Total assets $ 65,599 $ 61,993
========== ============
Liabilities and Shareholders' Equity
Current liabilities:
Short-term debt $ 12,488 $ 10,437
Payables 5,592 4,617
Accrued liabilities 3,589 4,209
Income taxes 638 168
----------- ------------
Total current liabilities 22,307 19,431
Accrued non-pension postretirement
benefits 8,334 8,334
Accrued employee benefits 3,836 3,678
Long-term debt 1,000 1,200
Shareholders' equity:
Common Stock 1,547 1,547
Less: Treasury stock (358) (358)
----------- ------------
1,189 1,189
Class B Common Stock 56 56
Capital in excess of par value 7,713 7,708
Reinvested earnings 22,713 22,164
Less: Employee benefit stock (1,161) (1,379)
Pension liability adjustment (388) (388)
----------- ------------
Total shareholders' equity 30,122 29,350
----------- ------------
Total liabilities and shareholders' equity $ 65,599 $ 61,993
=========== ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
-3-
<PAGE> 4
BADGER METER, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in Thousands Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
1995 1994
---- ----
<S> <C> <C>
Net sales $ 27,928 $ 20,942
Operating costs and expenses:
Cost of sales 18,191 12,858
Marketing and administrative 6,415 5,536
Research and engineering 1,584 1,436
----------- ------------
26,190 19,830
----------- ------------
Operating earnings 1,738 1,112
Interest expense 249 192
Other deductions 106 22
----------- ------------
Earnings before income taxes 1,383 898
Provision for income taxes 526 318
----------- ------------
Net earnings $ 857 $ 580
=========== ============
Per share amounts:
Net earnings $ .49 $ .34
=========== ============
Dividends declared - Common Stock $ .1815 $ .165
=========== ============
Dividends declared - Class B Common Stock $ .165 $ .15
=========== ============
Weighted average shares outstanding 1,751,492 1,703,656
=========== ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
-4-
<PAGE> 5
BADGER METER, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
1995 1994
---- ----
<S> <C> <C>
Operating activities:
Net earnings $ 857 $ 580
Adjustments to reconcile net
earnings to net cash provided
by (used for) operations:
Depreciation 913 878
Amortization 192 208
Noncurrent employee benefits 17 (189)
Deferred income taxes (18) (26)
Other 10 4
Changes in:
Receivables (2,877) (1,271)
Inventory (689) (1,043)
Current liabilities 831 412
Prepaid expenses (25) (67)
---------- ------------
Total adjustments (1646) (1,094)
---------- ------------
Net cash provided by (used for) operations (789) (514)
---------- ------------
Investing activities:
Property, plant and equipment (927) (1,035)
Other - net (100) (184)
---------- ------------
Net cash used for investing activities (1,027) (1,219)
---------- ------------
Financing activities:
Bank borrowings 2,051 1,206
Dividends (308) (273)
Exercised stock options 5 47
---------- ------------
Net cash provided by
financing activities 1,748 980
---------- ------------
Increase (decrease) in cash (68) (753)
Beginning of year 365 874
---------- ------------
End of period $ 297 $ 121
========== ============
Supplemental disclosures of cash flow information:
Cash paid (refunded) during the period for:
Income taxes $ (114) $ 171
========== ============
Interest $ 266 $ 234
========== ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
-5-
<PAGE> 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, 1995 and the results of
operations for the three-month periods ended March 31, 1995 and 1994 and
the cash flows for the three-month periods ended March 31, 1995 and 1994.
The results of operations for the three-month period ended March 31, 1995
are not necessarily indicative of the results to be expected for the full
year. The consolidated condensed balance sheet at December 31, 1994 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, 1994.
-6-
<PAGE> 7
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations
Financial Condition
Record sales in the first quarter of 1995 resulted in an increase of $2,877,000
in receivables from December 31, 1994. At the same time inventories increased
$689,000, primarily to support the sales growth. This use of working capital
was funded by short-term borrowings which rose $2,051,000 since the first of
the year. Earnings and an increase in payables provided the balance of working
capital.
As of March 31, 1995, the company had approximately $29,500,000 of credit lines
with domestic and foreign banks of which $12,488,000 was in use. This compares
to $13,788,000 in use at March 31, 1994. 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 1995 of $27,928,000 reflect a 33.4% increase
over sales of $20,942,000 for the same period in 1994. Both the Utility and
Industrial Divisions experienced increases. The order backlog at March 31,
1995 is $6,600,000 above the year ago value and is up $2,700,000 over the
December 31, 1994 level. Earnings for the quarter of $857,000 or $.49 per
share have increased 47.8% over 1994 earnings of $580,000 or $.34 per share.
The primary reason for the sales increase was a 41.1% improvement in unit
volume primarily in the Utility Division. Sales in the first quarter of 1995
included a portion of a meter contract for Mexico City in the amount of
$1,800,000. Sales for the Industrial Division were helped by strong sales of
valves and lubrication meters.
The gross profit margin declined from 38.6% in 1994 to 34.9% in 1995. This
change reflects the significant increase in Utility sales that have a lower
margin than Industrial sales and increased volumes of automated meter reading
systems that have a lower margin than the company's overall margin.
The increase in marketing and administration is primarily in the area of
incentives and commissions that vary relative to sales volume. Research and
engineering expenses were low in the first quarter of 1994. The 1995 value is
more in line with expected expenses.
The effective tax rate for the first quarter of 1995 was 38.0% compared to
35.4% for the year in 1994. The impact of reduced tax credits and the increase
in certain non-deductible expenses along with improved earnings are resulting
in a higher tax rate.
-7-
<PAGE> 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, 1995.
-8-
<PAGE> 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: May 8, 1995 By /S/ Deirdre C. Elliott
-----------------------
Deirdre C. Elliott
Vice President -
Corporate Counsel
and Secretary
By /S/ W. J. Shinners
-------------------
W. J. Shinners
Vice President - Controller
-9-
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page Number
<S> <C>
(11.0) Computation of fully diluted earnings per share 11
(27.0) Financial Data Schedule
</TABLE>
-10-
<PAGE> 1
Exhibit 11
BADGER METER, INC.
COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months ended March 31,
----------------------------
1995 1994
---- ----
<S> <C> <C>
PRIMARY
- - -------
Shares
- - ------
Average shares outstanding 1,751,492 1,703,656
Shares issuable upon exercise of stock options 28,264 41,677
---------- -----------
Total 1,779,756 1,745,333
========== ===========
Earnings
- - --------
Net earnings applicable to adjusted common shares $ 857 $ 580
========== ===========
Per share amounts
- - -----------------
Net earnings per share $ .48 $ .33
========== ===========
FULLY DILUTED
- - -------------
Shares
- - ------
Average shares outstanding 1,751,492 1,703,656
Shares issuable upon exercise of stock options 31,905 41,677
---------- -----------
Total 1,783,397 1,745,333
========== ===========
Earnings
- - --------
Earnings applicable to adjusted common shares $ 857 $ 580
========== ===========
Per share amounts
- - -----------------
Net earnings per share $ .48 $ .33
========== ===========
Percentage dilution (1) 1.8% 2.4%
</TABLE>
(1) In 1995 and 1994 earnings per share for financial statement purposes does
not include common stock equivalents since dilution is less than 3%.
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED BALANCE SHEET AND STATEMENT OF OPERATIONS OF THE MARCH
31, 1995 QUARTERLY REPORT FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH QUARTERLY REPORT FORM 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 297
<SECURITIES> 0
<RECEIVABLES> 17,309
<ALLOWANCES> 0
<INVENTORY> 19,156
<CURRENT-ASSETS> 37,522
<PP&E> 53,857
<DEPRECIATION> (37,235)
<TOTAL-ASSETS> 65,599
<CURRENT-LIABILITIES> 22,307
<BONDS> 0
<COMMON> 1,245
0
0
<OTHER-SE> 28,877
<TOTAL-LIABILITY-AND-EQUITY> 65,599
<SALES> 27,928
<TOTAL-REVENUES> 27,928
<CGS> 18,191
<TOTAL-COSTS> 26,190
<OTHER-EXPENSES> 106
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 249
<INCOME-PRETAX> 1,383
<INCOME-TAX> 526
<INCOME-CONTINUING> 857
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 857
<EPS-PRIMARY> .49
<EPS-DILUTED> .49
</TABLE>
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