Back to GetFilings.com
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 September 30, 2002
------------------
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.
Class Outstanding at October 11, 2002
- ----------------------------- -------------------------------
Common Stock, $1.00 par value 3,199,507
BADGER METER, INC.
INDEX
Page No.
--------
Part I. Financial Information:
Item 1 Financial Statements:
Consolidated Condensed Balance Sheets - -
September 30, 2002 and December 31, 2001 3
Consolidated Condensed Statements of Operations - -
Three and Nine Months Ended September 30, 2002 and 2001 4
Consolidated Condensed Statements of Cash Flows - -
Nine Months Ended September 30, 2002 and 2001 5
Notes to Consolidated Condensed Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3 Quantitative and Qualitative Disclosures about Market Risk 10
Item 4 Controls and Procedures 10
Part II. Other Information:
Item 6(a) Exhibits 11
Item 6(b) Reports on Form 8-K 11
Exhibit Index 15
-2-
Part I - Financial Information
BADGER METER, INC.
Item 1 Financial Statements
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
Assets September 30, December 31,
2002 2001
---- ----
(Unaudited)
Current assets:
Cash and cash equivalents $ 6,019 $ 3,410
Receivables 25,430 18,700
Inventories:
Finished goods 9,477 5,260
Work in process 6,196 8,190
Raw materials 9,534 8,037
----------- -----------
Total inventories 25,207 21,487
Prepaid expenses 1,245 767
Deferred income tax 2,485 2,588
----------- -----------
Total current assets 60,386 46,952
Property, plant and equipment, at cost 97,361 91,443
Less accumulated depreciation (53,925) (50,319)
----------- -----------
Net property, plant and equipment 43,436 41,124
Intangible assets, at cost less accumulated amortization 1,122 227
Prepaid pension 17,457 8,965
Other assets 3,488 3,561
Goodwill 5,112 546
----------- -----------
Total assets $ 131,001 $ 101,375
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Short-term debt $ 17,291 $ 5,129
Current portion of long-term debt 5,055 3,135
Payables 15,404 8,887
Accrued compensation and employee benefits 6,168 2,992
Other accrued liabilities 3,640 3,453
Income and other taxes 3,577 186
----------- -----------
Total current liabilities 51,135 23,782
Deferred income tax 2,539 2,539
Accrued non-pension postretirement benefits 5,609 6,093
Other accrued employee benefits 5,495 5,461
Long-term debt 18,890 20,498
Shareholders' equity:
Common Stock 4,735 4,677
Capital in excess of par value 17,336 16,168
Reinvested earnings 54,567 50,736
Less: Employee benefit stock (1,535) (1,900)
Treasury stock, at cost (27,770) (26,679)
----------- -----------
Total shareholders' equity 47,333 43,002
----------- -----------
Total liabilities and shareholders' equity $ 131,001 $ 101,375
=========== ===========
See accompanying notes to consolidated condensed financial statements.
-3-
BADGER METER, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in Thousands Except Share and Per Share Amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------ ------------
2002 2001 2002 2001
---- ---- ---- ----
Net sales $ 45,952 $ 35,575 $ 126,992 $ 104,978
Cost of sales 30,285 24,207 83,747 70,641
----------- ----------- ----------- -----------
Gross margin 15,667 11,368 43,245 34,337
Selling, engineering and
administration 11,071 9,310 31,853 29,406
----------- ----------- ----------- -----------
Operating earnings 4,596 2,058 11,392 4,931
Interest expense 647 332 1,487 1,182
Other expense (income), net 375 203 287 (18)
----------- ----------- ----------- ------------
Earnings before income taxes 3,574 1,523 9,618 3,767
Provision for income taxes 1,267 572 3,384 1,353
----------- ----------- ----------- -----------
Net earnings $ 2,307 $ 951 $ 6,234 $ 2,414
=========== =========== =========== ===========
Per share amounts: *
Earnings per share:
Basic $ .73 $ .30 $ 1.97 $ .76
=========== =========== =========== ===========
Diluted $ .70 $ .29 $ 1.89 $ .73
=========== =========== =========== ===========
Dividends declared: $ .26 $ .25 $ .76 $ .75
=========== =========== =========== ===========
Shares used in computation of:
Basic 3,163,872 3,159,880 3,158,474 3,167,350
Impact of dilutive stock
options 133,541 120,225 133,914 123,535
----------- ----------- ----------- -----------
Diluted 3,297,413 3,280,105 3,292,388 3,290,885
=========== =========== =========== ===========
*Earnings per share is computed independently for each of the quarters
presented. Therefore, the sum of the quarterly earnings per share does not
necessarily equal the total for the year.
See accompanying notes to consolidated condensed financial statements.
-4-
BADGER METER, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Nine Months Ended
September 30,
-------------
2002 2001
---- ----
Operating activities:
Net earnings $ 6,234 $ 2,414
Adjustments to reconcile net
earnings to net cash provided
by (used for) operations:
Depreciation 5,602 4,906
Amortization 68 292
Tax benefit on stock options 133 297
Noncurrent employee benefits 816 977
Changes in:
Receivables (1,903) (2,545)
Inventory (286) (2,378)
Current liabilities other than short-term debt 8,888 5,911
Prepaid expenses and other (9,676) (661)
----------- -----------
Total adjustments 3,642 6,799
----------- -----------
Net cash provided by (used for) operations 9,876 9,213
----------- -----------
Investing activities:
Property, plant and equipment (3,602) (3,543)
Acquisitions, net of cash acquired (8,468) 0
Other - net (221) (24)
----------- -----------
Net cash provided by (used for) investing activities (12,291) (3,567)
----------- -----------
Financing activities:
Net increase (decrease) in short-term debt 12,162 3,968
Issuance of long-term debt 0 1,700
Repayments of long-term debt (4,737) (9,225)
Dividends (2,403) (2,371)
Stock options and ESSOP 1,093 497
Treasury stock transactions (1,091) (1,950)
----------- -----------
Net cash provided by (used for)
financing activities 5,024 (7,381)
----------- -----------
Increase (decrease) in cash 2,609 (1,735)
Beginning of year 3,410 4,237
----------- -----------
End of period $ 6,019 $ 2,502
=========== ===========
See accompanying notes to consolidated condensed financial statements.
-5-
BADGER METER, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited consolidated
condensed financial statements of Badger Meter, Inc. (the "Company")
contain all adjustments (consisting only of normal recurring accruals)
necessary to present fairly the consolidated condensed financial position
at September 30, 2002 and the results of operations for the three and
nine-month periods ended September 30, 2002 and 2001 and the cash flows for
the nine-month periods ended September 30, 2002 and 2001. The results of
operations for any interim period are not necessarily indicative of the
results to be expected for the full year. Certain reclassifications have
been made to the 2001 data to conform to the 2002 presentation.
2. The consolidated condensed balance sheet at December 31, 2001, 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, 2001. Refer to the footnotes in those reports
for a description of the accounting policies, which have been continued
without change, and additional details of the Company's financial
condition. The details in those notes have not changed except as discussed
below and as a result of normal adjustments in the interim.
3. In January 2002, the Company borrowed $20 million of long-term, unsecured
debt from a local bank. The purpose of the loan was to replace short-term
borrowings. As a result of obtaining the loan, $20 million of commercial
paper was reclassified to long-term debt for financial statement
presentation at December 31, 2001. The debt bears interest at 6.73% and is
due in quarterly installments through January 2007.
4. Other expense (income), net includes foreign currency gains and losses,
which are recognized as incurred. The Company's functional currency for its
significant foreign subsidiaries is the U.S. dollar.
5. On May 1, 2002, the Company acquired 100% of the outstanding common stock
of Data Industrial Corporation (DIC) of Mattapoisett, Massachusetts, for
$5.2 million net of cash acquired. This amount included direct acquisition
costs. DIC manufactures and markets a line of insertion flow meters that
are sold to commercial and industrial markets.
The Company has not finalized the allocation of the purchase price as of
September 30, 2002. An estimation of this allocation was prepared and is
included as part of these financial statements. The purchase price has been
allocated to the following significant components: $722,000 to receivables,
$992,000 to inventory, $1,038,000 to property, plant and equipment,
$250,000 to intangibles, $2,662,000 to goodwill, and $492,000 to accounts
payable.
On June 1, 2002, the Company acquired 100% of the outstanding common stock
of MecaPlus Equipements SA (MPE) of Nancy, France, for $3.3 million net of
cash acquired. This amount included direct acquisition costs. MPE purchases
lubrication meters, oil tanks, hoses, reels and other equipment for
assembly into lubrication systems for use in measuring and dispensing
automotive fluids such as oil, grease and transmission fluid. The
acquisition of MPE brings the Company closer to its European automotive
customers by offering a full line of lubrication systems in addition to the
current metering products.
The Company has not finalized the allocation of the purchase price of MPE
as of September 30, 2002. An estimation of this allocation was prepared and
is included as part of these financial statements. The purchase price has
been allocated to the following significant components: $4,106,000 to
receivables, $2,442,000 to inventory, $3,274,000 to property, plant and
equipment, $368,000 to intangibles, $1,896,000 to goodwill, $3,320,000 to
accounts payable, and $5,048,000 of assumed debt.
The acquisitions of DIC and MPE were accounted for under the purchase
method and the results of both have been included in the Company's
consolidated results from the date of acquisition. Both
-6-
acquisitions were funded through a combination of internally generated
funds and commercial paper. These acquisitions are part of the Company's
strategy to broaden its line of meters for commercial and niche industrial
markets.
The following preliminary, unaudited proforma information combines
historical results, as if DIC and MPE had been owned by the Company for the
periods presented.
Thousands, except per share amounts
--------------------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
------------ ------------
2002 2001 2002 2001
---- ---- ---- ----
Net sales $ 45,952 $ 40,091 $ 135,228 $ 120,602
Net earnings $ 2,307 $ 979 $ 6,250 $ 2,680
Diluted earnings
per share $ .70 $ .30 $ 1.90 $ .81
The proforma results include amortization of the intangibles and
depreciation of the fixed assets mentioned above and interest expense on
debt incurred to finance the purchases. The proforma results are not
necessarily indicative of what would have occurred if the acquisitions had
been completed as of the beginning of each fiscal period presented, nor are
they necessarily indicative of future consolidated results.
6. In the ordinary course of business, the Company enters into various
material purchase agreements with its vendors, some of which contain
minimum purchase quantity commitments extending beyond one year. Future
purchase commitments are not expected to exceed normal usage requirements.
7. In the quarter ending September 30, 2002, the Financial Accounting
Standards Board (FASB) issued two new Statements of Financial Accounting
Standards: No. 145 "Rescission of FASB Statements No. 4, 44 and 64,
Amendment of Statement 13, and Technical Corrections" and No. 146
"Accounting for Costs Associated with Exit or Disposal Activities". The
Company does not believe either of these recently issued Statements will
have a material effect on the Company's financial position or results of
operations, either from a cash flow perspective or on the financial
statements as a whole.
-7-
Item 2 Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
In the second quarter of 2002, the Company completed two acquisitions, Data
Industrial Corporation (DIC) and Meca Plus Equipements (MPE). These acquisitions
were accounted for under the purchase accounting method, and as a result, some
of the variances shown since December 31, 2001, were attributable to the assets
acquired and liabilities assumed in the acquisitions. The acquisitions are
further discussed in footnote 5 of the Notes to Consolidated Financial
Statements in this Form 10-Q.
Net sales for the third quarter of 2002 of $45,952,000 reflected a $10.4 million
or 29.2% increase compared to the third quarter of 2001. Net sales for the first
nine months of 2002 were $126,992,000 compared to $104,978,000 for the same
period in 2001, a $22.0 million or 21.0% increase. The increases are the net
result of the acquisitions, increases in residential and commercial water meters
and decreases in certain industrial products, all further discussed below.
The 2002 amounts include $4.3 million and $6.7 million of sales for the third
quarter and year-to-date results, respectively, related to the acquired
companies. Without the acquisitions, sales would have increased $6.1 million or
17.2% and $15.3 million or 14.6% for the quarter and year-to date amounts over
comparable periods in 2001. In addition, the nine-month results for 2001 include
approximately $1.4 million of sales from product lines that were discontinued in
2001.
Residential and commercial water meter sales increased $5.7 million and $18.1
million for the third quarter and year-to-date results, respectively, over the
same periods in 2001. For the third quarter, this increase was driven by
increased sales of plastic meters and meters with automated meter reading
technology, offset somewhat by lower volumes of local read meters. On a
year-to-date basis, the increases are driven by increased volumes in local read
and automated meter reading technologies, the latter of which carries a higher
price.
Sales of automotive fluid meters, small precision valves and other industrial
products, excluding sales from the acquisitions, continued to be affected by the
economic recession, increasing only $400,000 for the third quarter and
decreasing $2.8 million year-to-date, over the same periods in 2001. For the
third quarter, this increase was due to improved sales of automotive fluid
meters and electro-magnetic meters, offset primarily by research control valves
and other industrial products. On a year-to-date basis, sales of all the
industrial products declined, except electro-magnetic meters. Many of these
products are sold to customers in the construction, manufacturing, and oil and
gas industries, whose markets remain sluggish.
Gross margins improved for the third quarter of 2002 to 34.1% compared with
32.0% for the third quarter of 2001. For the first nine months of 2002, margins
were 34.1% versus 32.7% for the first nine months of last year. Increases for
both periods were principally the result of increased water meter volumes and
modest price increases to customers. The volume increases improved margins
through better absorption of manufacturing costs. Margins also improved due to
the increased sales of meters with automated meter reading technology which
carry higher margins. The increases in margins were offset somewhat by the net
decline in industrial sales.
Selling, engineering and administration costs increased 18.9% for the third
quarter ended September 30, 2002, and 8.3% for the nine months ended September
30, 2002, compared to the same periods in 2001. The increases for both periods
were due principally to the effects of the acquisitions discussed above ($1.5
million and $2.6 million for the third quarter and year-to-date, respectively)
and additional accrued benefits, principally accrued employee incentives
($491,000 and $1,373,000 for third quarter and year-to-date, respectively) as a
result of improved financial results in 2002. Efforts begun in 2001 to reduce
costs have somewhat offset inflation, wage increases and incentive accruals.
Interest expense increased for the third quarter and year-to-date by $315,000
and $305,000, respectively, over the same periods in 2001 due primarily to the
effects of additional debt incurred to finance the acquisitions, offset somewhat
by lower interest rates and less overall pre-acquisition debt. Note that the
$9.4 million of pension funding referenced above did not occur until late in the
third quarter and therefore did not have a material effect on interest expense.
As a result of the above, earnings for the third quarter of 2002 were $2,307,000
compared with the third quarter 2001 earnings of $951,000. On a diluted earnings
per share basis, this equates to $0.70 per
-8-
share for the third quarter of 2002 compared to $0.29 for the same period in
2001. Earnings for the nine-month period ended September 30, 2002, were
$6,234,000, compared to $2,414,000 for the same period in 2001. On a diluted
earnings per share basis, earnings were $1.89 for the first nine months of 2002
compared to $0.73 for the same period in 2001.
Liquidity and Capital Resources
The main sources of liquidity for the Company are cash from operations and
borrowing capacity. Cash at September 30, 2002 increased $2.6 million. This is
due primarily to the timing of accounts payable payments and customer cash
receipts.
Receivables at September 30, 2002, increased $6.7 million, of which
approximately $4.82 million was associated with receivables from the acquired
companies. The remainder of the increase was due to the increased sales in 2002
compared to 2001.
Nearly all of the increase associated with the inventory balances was due to the
acquisitions. Without the acquisitions, inventory levels were very comparable to
those as of December 31, 2001.
Prepaid expenses have increased since December 31, 2001, due to the timing of
the annual insurance payments. Property, plant and equipment and accumulated
depreciation have both increased since December 31, 2001, due principally to
assets acquired in the acquisitions referenced above, as well as normal impacts
of capital expenditures and depreciation expense. The increase in intangible
assets was due principally to patents acquired in the acquisitions.
Prepaid pension increased nearly $8.5 million since December 31, 2001. This is
the net result of $9.4 million in additional funding provided by the Company in
the third quarter offset by annual pension expense recorded year to date. The
company made a decision to fully fund the plan. Pension rules recognize pension
costs differently than generally accepted accounting principles, which results
in a significant increase in prepaid pension.
Goodwill increased nearly $4.6 million since December 31, 2002. This was related
directly to the acquisitions of the above-referenced companies. As mentioned in
footnote 5, the Company has not finalized the allocation of the purchase price
of either acquisition as of September 30, 2002. Revisions to the purchase price
allocations are not expected to be material.
Short-term debt increased to $17,291,000 at September 30, 2002 from $5,129,000
at December 31, 2001. The principal reasons for the increase are the
acquisitions in 2002 and the funding of the pension plan, both of which are
discussed above. The current portion of long-term debt increased $1.9 million
since year-end due to the debt assumed in the acquisitions.
Accounts payable increased $6.5 million since December 31, 2001, due to the
timing of purchases and payment processing. In addition, $3.8 million represents
accounts payable from the acquisitions. Compensation and employee benefits
increased $3.2 million, of which $527,000 was associated with the acquisitions.
The remainder was due to the accrual of anticipated employee incentives and
other items. Income and other taxes increased nearly $3.4 million since year-end
due to the timing of estimated tax payments.
Common stock and capital in excess of par value both increased at September 30,
2002, due to new shares issued in connection with stock options exercised and
ESSOP purchases. Treasury stock increased due to shares repurchased during the
period. Employee benefit stock decreased $365,000 due to the regular repayment
of the ESSOP debt and the related release of shares.
As of September 30, 2002, the Company had approximately $36.2 million of
short-term credit facilities with domestic and foreign banks of which $17.3
million was in use. The Company believes that the present lines of credit are
adequate to meet operating requirements and future capital needs. The Company
also believes it would have no difficulty securing additional term debt.
-9-
Other Matters
The Company is subject to contingencies relative to environmental laws and
regulations. Currently, the Company is in the process of resolving an issue
relative to a landfill site. The Company is also a defendant in three
multi-party asbestos suits as a result of its membership in certain trade
organizations. The cases are pending in state court in Mississippi. The Company
does not believe the ultimate resolution of these claims will have a material
adverse effect on the Company's financial position or results of operations,
either from a cash flow perspective or on the financial statements as a whole.
Provision has been made for all known settlement costs. No other risks or
uncertainties were identified that could have a material impact on operations
and no long-lived assets have become permanently impaired in value.
Item 3 Quantitative and Qualitative Disclosures about Market Risk
The Company's quantitative and qualitative disclosures about market risk are
incorporated by reference from Item 7A of the Company's Annual Report on Form
10-K for the year ended December 31, 2001, and have not materially changed since
that report was filed.
Item 4 Controls and Procedures
Within the 90 days prior to the date of this report, the company carried out an
evaluation, under the supervision and with the participation of the company's
management, including the company's President and Chief Executive Officer and
the Vice President -- Finance, Treasurer and Chief Financial Officer, of the
effectiveness of the design and operation of the company's disclosure controls
and procedures pursuant to Exchange Act Rules 13a-14. Based upon that
evaluation, the President and Chief Executive Officer and the Vice President --
Finance, Treasurer and Chief Financial Officer concluded that the company's
disclosure controls and procedures are effective in timely alerting them to
material information relating to the company (including its consolidated
subsidiaries) required to be included in the company's periodic SEC filings.
Forward Looking Statements
Certain statements contained in this document, as well as other information
provided from time to time by 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. The forward looking statements are based on the Company's current
views and assumptions and involve risks and uncertainties that include, among
other things:
- the success or failure of new product offerings
- the actions and financial condition of competitors and alliance
partners
- changes in competitive pricing and bids in the marketplace
- changes in domestic conditions, including housing starts
- changes in foreign economic conditions, including currency fluctuations
- changes in laws and regulations
- changes in customer demand and fluctuations in the prices of and
availability of purchased raw materials and parts.
Some or all of these factors are beyond the Company's control. 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 herein are made only as of the date of this document and the
Company undertakes no obligation to publicly update such forward looking
statements to reflect subsequent events or circumstances.
-10-
Part II - Other Information
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits:
(99.1) Written Statement of the Chief Executive Officer
(99.2) Written Statement of the Chief Financial Officer
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed for the three months ended
September 30, 2002.
-11-
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: October 23, 2002 By /S/ Richard A. Meeusen
-----------------------
Richard A. Meeusen
President and Chief Executive Officer
By /S/ Richard E. Johnson
-----------------------
Richard E. Johnson
Vice President - Finance, Treasurer
and Chief Financial Officer
By /S/ Beverly L.P. Smiley
------------------------
Beverly L.P. Smiley
Vice President - Corporate Controller
CERTIFICATION
I, Richard A. Meeusen, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Badger Meter, Inc.
(the registrant);
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
-12-
b. evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: October 23, 2002
By /S/ Richard A. Meeusen
-----------------------
Richard A. Meeusen
President and Chief Executive Officer
CERTIFICATION
I, Richard E. Johnson, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Badger Meter, Inc.
(the registrant);
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
-13-
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: October 23, 2002
By /S/ Richard E. Johnson
-----------------------
Richard E. Johnson
Vice President - Finance, Treasurer
and Chief Executive Officer
-14-
EXHIBIT INDEX
Page Number
(99.1) Written Statement of the Chief Executive Officer 16
(99.2) Written Statement of the Chief Financial Officer 17
-15-