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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
for the quarterly period ended MARCH 31, 2003
BADGER METER, INC.
4545 W. BROWN DEER ROAD
MILWAUKEE, WISCONSIN 53223
(414) 355-0400
A Wisconsin Corporation
IRS Employer Identification No. 39-0143280
Commission File No. 1-6706
The company has the following classes of securities registered pursuant
to Section 12(b) of the Act:
Name of each exchange
Title of class: on which registered:
Common Stock American Stock Exchange
Common Share Purchase Rights American Stock Exchange
The company does not have any securities registered pursuant to Section
12(g) of the Act.
The company 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, and
has been subject to such filing requirements for the past 90 days.
The company is an accelerated filer (as defined in Rule 12b-2 of the
Act).
As of April 11, 2003, there were 3,241,536 shares of Common Stock
outstanding with a par value of $1.00 per share.
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BADGER METER, INC.
INDEX
Page No.
--------
Part I. Financial Information:
Item 1 Financial Statements:
Consolidated Condensed Balance Sheets - -
March 31, 2003 and December 31, 2002 3
Consolidated Condensed Statements of Operations - -
Three Months Ended March 31, 2003 and 2002 4
Consolidated Condensed Statements of Cash Flows - -
Three Months Ended March 31, 2003 and 2002 5
Notes to Consolidated Condensed Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
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
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Part I - Financial Information
BADGER METER, INC.
Item 1 Financial Statements
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
Assets March 31, December 31,
2003 2002
-------------- --------------
(Unaudited)
Current assets:
Cash $ 1,158 $ 3,779
Receivables 22,942 22,139
Inventories:
Finished goods 7,224 7,569
Work in process 8,822 8,308
Raw materials 11,496 9,305
-------------- --------------
Total inventories 27,542 25,182
Prepaid expenses 1,408 1,219
Deferred income taxes 3,316 3,061
-------------- --------------
Total current assets 56,366 55,380
Property, plant and equipment, at cost 100,394 98,796
Less accumulated depreciation (56,898) (55,328)
-------------- --------------
Net property, plant and equipment 43,496 43,468
Intangible assets, at cost less accumulated amortization 1,096 1,112
Prepaid pension 17,274 17,454
Other assets 3,125 3,352
Goodwill 6,526 5,697
-------------- --------------
Total assets $ 127,883 $ 126,463
============== ==============
Liabilities and Shareholders' Equity
Current liabilities:
Short-term debt $ 26,411 $ 20,355
Current portion of long-term debt 3,405 5,979
Payables 11,387 11,040
Accrued compensation and employee benefits 4,274 6,017
Warranty and after-sale costs 3,603 3,597
Income and other taxes 1,297 1,567
-------------- --------------
Total current liabilities 50,377 48,555
Deferred income taxes 4,718 4,710
Accrued non-pension postretirement benefits 5,443 5,512
Other accrued employee benefits 6,371 6,545
Long-term debt 11,940 13,046
Commitments and contingencies
Shareholders' equity:
Common Stock 4,783 4,762
Capital in excess of par value 18,562 18,169
Reinvested earnings 54,650 54,776
Accumulated other comprehensive income (loss) 591 (61)
Less: Employee benefit stock (1,285) (1,535)
Treasury stock, at cost (28,267) (28,016)
-------------- --------------
Total shareholders' equity 49,034 48,095
-------------- --------------
Total liabilities and shareholders' equity $ 127,883 $ 126,463
============== ==============
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
March 31,
--------------------------------
2003 2002
-------------- --------------
Net sales $ 39,575 $ 37,454
Cost of sales 26,632 24,694
-------------- --------------
Gross margin 12,943 12,760
Selling, engineering and administration 11,274 9,944
-------------- --------------
Operating earnings 1,669 2,816
Interest expense 556 372
Other expense (income), net (43) (31)
-------------- --------------
Earnings before income taxes 1,156 2,475
Provision for income taxes 450 868
-------------- --------------
Net earnings $ 706 $ 1,607
============== ==============
Per share amounts:
Earnings per share:
Basic $ .22 $ .51
============== ==============
Diluted $ .21 $ .49
============== ==============
Dividends declared: $ .26 $ .25
============== ==============
Shares used in computation of:
Basic 3,204,840 3,154,686
Impact of dilutive stock options 121,592 131,765
-------------- --------------
Diluted 3,326,432 3,286,451
============== ==============
See accompanying notes to consolidated condensed financial statements.
-4-
BADGER METER, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Three Months Ended
March 31,
2003 2002
------------ ------------
Operating activities:
Net earnings $ 706 $ 1,607
Adjustments to reconcile net
earnings to net cash provided
by (used for) operations:
Depreciation 1,785 1,701
Amortization 16 14
Tax benefit on stock options 119 70
Noncurrent employee benefits 187 436
Deferred income taxes (247) 0
Changes in:
Receivables (803) (1,138)
Inventories (2,360) 409
Current liabilities other than debt (2,417) 3,176
Prepaid expenses and other (189) (294)
------------ ------------
Total adjustments (3,909) 4,374
------------ ------------
Net cash provided by (used for) operations (3,203) 5,981
------------ ------------
Investing activities:
Property, plant and equipment (1,813) (1,306)
Other - net 807 123
------------ ------------
Net cash used for investing activities (1,006) (1,183)
------------ ------------
Financing activities:
Net increase (decrease) in short-term debt 6,056 (1,743)
Repayments of long-term debt (3,680) (32)
Dividends (832) (790)
Stock options and ESSOP 295 410
Treasury stock purchases (375) (316)
Issuance of treasury stock 124 0
------------ ------------
Net cash provided by (used for)
financing activities 1,588 (2,471)
------------ ------------
Increase (decrease) in cash (2,621) 2,327
Cash - beginning of period 3,779 3,410
------------ ------------
Cash - end of period $ 1,158 $ 5,737
============ ============
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 March 31, 2003, the results of operations for the three-month periods
ended March 31, 2003 and 2002, and the cash flows for the three-month
periods ended March 31, 2003 and 2002. The results of operations for any
interim period are not necessarily indicative of the results to be expected
for the full year.
2. The consolidated condensed balance sheet at December 31, 2002, was derived
from amounts included in the Company's Annual Report to Shareholders on
Form 10-K for the year ended December 31, 2002. Refer to the footnotes in
that report 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.
WARRANTY AND AFTER-SALE COSTS The Company estimates and records provisions
for warranties and other after-sale costs in the period the sale is
reported. After-sale costs represent a variety of activities outside of the
written warranty policy, such as investigation of unanticipated problems
after the customer has installed the product, or analysis of water quality
issues. Changes in the Company's warranty and after-sale costs reserve for
the quarters ended March 31, 2003 and 2002 are as follows:
Balance at Additions Balance
beginning charged to Claims at
(In thousands) of year earnings paid March 31
- -------------------- -------------- -------------- -------------- --------------
2003 $ 3,597 $ 294 $ (288) $ 3,603
2002 $ 3,453 $ 296 $ (305) $ 3,444
==================== ============== ============== ============== ==============
STOCK OPTION PLANS The Company has five stock option plans which provide
for the issuance of options to key employees and directors of the Company.
Each plan authorizes the issuance of options to purchase up to an aggregate
of 200,000 shares of Common Stock, with vesting periods of up to ten years
and maximum option terms of ten years. As of March 31, 2003, options to
purchase 19,963 shares are available for grant.
As allowed by Financial Accounting Standards Board Statement No. 123,
"Accounting for Stock-Based Compensation" (SFAS 123), and Statement No.
148, "Accounting for Stock-based Compensation - Transition and Disclosure",
the Company has elected to continue to follow Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25), in
accounting for its stock option plans. Under APB 25, the Company does not
recognize compensation expense upon the issuance of its stock options
because the option terms are fixed and the exercise price equals the market
price of the underlying stock on the grant date.
-6-
The following table illustrates the effect on net income and earnings per
share if the Company had applied the fair value recognition provisions of
SFAS 123 to stock options.
Three months
Ended March 31,
----------------------------
(In thousands except per share amounts) 2003 2002
- ------------------------------------------------------ ------------ ------------
Net income, as reported $ 706 $ 1,607
Deduct: Total stock-based compensation
determined under fair value based method
for all awards since January 1, 1995,
net of related tax effects (84) (71)
------------ ------------
Pro forma net income $ 622 $ 1,536
Earnings per share:
Basic, as reported $ .22 $ .51
Basic, pro forma $ .19 $ .49
Diluted, as reported $ .21 $ .49
Diluted, pro forma $ .19 $ .47
============ ============
3. The Company acquired Data Industrial Corporation (DIC) and MecaPlus
Equipements SA (MPE) in May and June 2002, respectively. A description of
the acquisitions is included in the Company's Annual Report on Form 10-K
under Part II, Item 8 "Financial Statements and Supplementary Data." As of
March 31, 2003, the Company had not finalized the allocation of the
purchase price of either acquisition.
At March 31, 2003, goodwill increased $757,000 from the December 31, 2002
amount to reflect severances related to the termination of several MPE
employees in connection with management's initial assessment at the date of
acquisition. The amount of the severance cost was not estimable until the
first quarter of 2003. All amounts are anticipated to be paid by June 30,
2003. Additionally, goodwill increased $76,000 for the quarter due to
currency translation adjustments.
The following pro forma information combines historical results, as if DIC
and MPE had been owned by the Company for the three months ended March 31,
2002.
(In thousands except per share amounts)
- ---------------------------------------
Net sales $ 42,566
Net earnings $ 1,635
Diluted earnings
per share $ .50
============
The pro forma amounts include the results of the stand-alone operations of
DIC and MPE, plus the impact of purchase accounting entries, which include
amortization of the acquired intangibles, depreciation of the stepped up
basis of the fixed assets, and interest expense on debt incurred to finance
the purchases. The pro forma results are not necessarily indicative of what
would have occurred if the acquisitions had been completed as of the
beginning of 2002, nor are they necessarily indicative of future
consolidated results.
4. The Company guarantees the outstanding debt of the Badger Meter Employee
Savings and Stock Ownership Plan (ESSOP) that is recorded in long-term
debt, offset by a similar amount of unearned compensation that has been
recorded as a reduction of shareholders' equity. The loan amount is
collateralized by shares of the Company's Common Stock. A payment of
$250,000 in the first quarter of 2003 reduced the loan from $1,535,000 at
December 31, 2002 to $1,285,000 at March 31, 2003.
The Company also guarantees the present and future debt of the Badger Meter
Officers Voting Trust (BMOVT), from which officers obtained loans from a
bank in order to purchase shares of the Company's Common Stock. The
officers' loan amounts are collateralized by the Company's shares that were
purchased with the loans' proceeds. There have been no loans made to
officers by the BMOVT since July 2002 due to restrictions as a result of
new legislation. The amount that the Company guaranteed was $2,281,000 and
$2,380,000 at March 31, 2003 and December 31, 2002, respectively. The
current loan expires in April 2003 when it will likely be renewed. The fair
market value of this guarantee at March 31, 2003 and December 31, 2002
continued to be zero because the collateral value of the shares exceeded
the loan amount.
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5. Total comprehensive income was $1,358,000 and $1,607,000 for the
three-month periods ended March 31, 2003 and 2002, respectively. Total
comprehensive income is comprised of net income and other comprehensive
income, which includes foreign currency translation adjustments. Included
in the first quarter 2003 amount is $652,000 of other comprehensive income,
which included $477,000 relating to the effect of the Company's Czech
Republic subsidiary changing its functional currency from the U.S. dollar
to the euro, effective January 1, 2003.
6. In the normal course of business, the Company is named in legal
proceedings. There are currently no material legal proceedings pending with
respect to the Company, except as discussed below.
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. Provision has been made for all known
settlement costs.
The Company is also a defendant in five 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 issues 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.
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.
-8-
Item 2 Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Net sales for the three-months ended March 31, 2003, increased $2.1
million or 5.7% over the same period in 2002. The first quarter's results
included $5.4 million of net sales related to two acquisitions, Data Industrial
Corporation (DIC) and MecaPlus Equipements SA (MPE), which were acquired in the
second quarter of 2002. Without the acquisitions, net sales would have decreased
$3.3 million or 8.8% over the same period in 2002.
The principal reason for the decline in net sales without acquisitions
was due to lower sales of residential and commercial water meters offset
slightly by higher sales in industrial products. Residential and commercial
water meter net sales decreased $3.7 million over the same period in 2002. This
sales decline was the result of lower volumes of water meters (with and without
automation) offset somewhat by higher prices. The decline in volumes appears to
be due to the continuing soft economy, and geopolitical and terrorism concerns.
Many local governments struggled with reduced budgets, and the Company
experienced longer sales cycles for purchases by water utilities as they
evaluated the requirements and costs of increased security.
Net sales of industrial products, excluding sales from the
acquisitions, continued to be affected by the economic recession, increasing
only $400,000 in the first quarter over the prior year's first quarter. The
industrial net sales increase was the result of modestly higher revenues for
automotive fluid meters, small precision valves and electromagnetic meters
offset by decreases in other industrial products.
Gross margins for the first quarter of 2003 were 32.7% compared to
34.1% in the first quarter of 2002. The decrease was principally the result of
decreased water meter volumes which impacted overhead absorption, offset
somewhat by price increases to customers. The gross margins for the first
quarter were also affected by a manufacturing problem that resulted in an
after-tax expense of approximately $150,000 or $0.05 per diluted share. The
problem was discovered and resolved at the plant.
Selling, engineering and administration costs increased $1.3 million or
13.4% for the first quarter of 2003 compared to the same period in 2002. The
increase included the affect of the acquisitions discussed above ($1.7 million).
Without the effects of the acquisitions, these expenses would have declined
approximately $400,000, which was the net impact of lower incentives and
administrative costs offset by higher marketing and product development costs
and normal inflationary increases. Interest expense for the quarter was $184,000
higher than the same period in the prior year primarily due to the higher level
of debt.
As a result of the above, earnings for the first quarter of 2003 were
$706,000 compared to earnings in the first quarter of 2002 of $1,607,000. On a
diluted earnings per share basis, this equates to $0.21 per share for the first
quarter of 2003 compared to $0.49 for the same period in 2002.
Liquidity and Capital Resources
The main sources of liquidity for the Company are cash from operations
and borrowing capacity. In the first quarter of 2003, $3.4 million of cash was
used for operations, principally due to the increase in inventory balances and a
reduction in current liabilities other than debt, as incentive payments based
upon prior year results were paid in the first quarter of 2003. These uses of
cash exceeded the cash provided by earnings.
The change in accounts receivable balances from December 31, 2002 to
March 31, 2003 is a function of timing of actual cash receipts.
Inventories at March 31, 2003 increased nearly $2.4 million or 9.4%.
This increase in inventory was due to a build up of certain longer lead-time
materials for expected sales that did not materialize in the first quarter.
Capital expenditures for the first quarter of 2003 were $1.6 million, which is
nearly the same amount as the depreciation expense resulting in virtually no
change from the net amount shown at December 31, 2002.
Goodwill increased $829,000 due mainly to the Company continuing to
finalize the allocation of the purchase price of MPE, and the effects of foreign
currency translation adjustments.
-9-
Short-term debt and the current portion of long-term debt at March 31,
2003 increased to $29.8 million versus a balance at the end of 2002 of $26.3
million. This increase was caused by the need for cash for operations, capital
expenditures, repayments of long-term debt and dividends. The long-term debt
amounts declined as a result of regularly scheduled payments, plus a prepayment
to take advantage of lower short-term rates.
Accounts payable increased to $11.6 million from $11.0 million at
December 31, 2002 as a result of the timing of payments. Accrued compensation
and employee benefits decreased to $4.3 million from $6.0 million at December
31, 2002 due principally to the first quarter payments of various incentives
earned in 2002 as a result of the performance in that year. Income and other
taxes decreased to $1.3 million from nearly $1.6 million at December 31, 2002 as
a result of the timing of tax payments and lower taxable income.
Common stock and capital in excess of par value have increased slightly
since December 31, 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 $250,000 due to
the regular payment of the ESSOP debt and the related release of shares.
As of March 31, 2003, the Company had approximately $38.5 million of
short-term credit facilities with domestic and foreign banks of which $26.4
million was in use. Subsequent to the end of the quarter, the Company increased
its existing short-term credit facilities by $5 million. 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.
Other Matters
The Company is subject to contingencies relative to environmental laws
and regulations. Currently, the Company is in the process of resolving issues
relative to two landfill sites. Provision has been made for all known settlement
costs.
The Company is also a defendant in five 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 issues 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.
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 included in Part II Item 7 "Management's Discussion and Analysis of
Financial Condition and Results of Operations" under the heading "Market Risk"
in the Company's Annual Report on Form 10-K for the year ended December 31,
2002, and have not materially changed since that report was filed.
Item 4 Controls and Procedures
In accordance with Rule 13a-15(b) of the Securities Exchange Act of
1934 (the "Exchange Act"), within 90 days prior to the filing date of this
Quarterly Report on Form 10-Q, an evaluation was carried out under the
supervision and with the participation of the Company's management, including
the Company's President and Chief Executive Officer and the Company's Vice
President - Finance, Chief Financial Officer and Treasurer, of the effectiveness
of the design and operation of the Company's disclosure controls and procedures
(as defined in Rule 13a-14(c) under the Exchange Act). Based upon their
evaluation of these disclosure controls and procedures, the Company's President
and Chief Executive Officer and the Company's Vice President - Finance, Chief
Financial Officer and Treasurer concluded that the Company's disclosure controls
and procedures were effective as of the date of such evaluation to ensure that
material information relating to the Company, including its consolidated
subsidiaries, was made known to them by others within those entities,
particularly during the period in which this Quarterly Report on Form 10-Q was
being prepared.
-10-
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:
o the success or failure of new product offerings and
acquisitions
o the actions and financial condition of competitors and
alliance partners
o changes in competitive pricing and bids in the marketplace
o changes in domestic conditions, including housing starts
o changes in foreign economic conditions, including currency
fluctuations
o changes in laws and regulations
o 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.
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
(99.3) Code of Business Ethics for Financial Executives
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed for the three months ended
March 31, 2003.
-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: April 24, 2003 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 officer 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
-12-
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 officer 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 officer 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: April 24, 2003
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 officer 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
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;
-13-
5. The registrant's other certifying officer 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 officer 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: April 24, 2003
By /S/ Richard E. Johnson
-----------------------
Richard E. Johnson
Vice President - Finance, Treasurer and Chief
Financial Officer
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EXHIBIT INDEX
Page Number
(99.1) Written Statement of the Chief Executive Officer 16
(99.2) Written Statement of the Chief Financial Officer 17
(99.3) Code of Business Ethics for Financial Executives 18
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