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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, 2004
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 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
Exchange Act).
As of April 15, 2004, there were 3,300,538 shares of Common Stock
outstanding with a par value of $1.00 per share.
BADGER METER, INC.
QUARTERLY REPORT ON FORM 10-Q FOR PERIOD ENDED MARCH 31, 2004
INDEX
Page No.
--------
Part I. Financial Information:
Item 1 Financial Statements:
Consolidated Condensed Balance Sheets - -
March 31, 2004 and December 31, 2003 4
Consolidated Condensed Statements of Operations - -
Three Months Ended March 31, 2004 and 2003 5
Consolidated Condensed Statements of Cash Flows - -
Three Months Ended March 31, 2004 and 2003 6
Notes to Consolidated Condensed Financial Statements 7
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Item 3 Quantitative and Qualitative Disclosures about Market Risk 12
Item 4 Controls and Procedures 12
Part II. Other Information:
Item 6(a) Exhibits 12
Item 6(b) Reports on Form 8-K 12
Exhibit Index 14
2
Special Note Regarding Forward Looking Statements
Certain statements contained in this Form 10-Q, 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 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 towards more expensive, value-added automatic
meter reading (AMR) systems;
- the success or failure of new Company products, including the Orion
radio frequency drive-by AMR meter, the advanced digital encoder
(ADE) and the proposed Galaxy fixed base AMR system;
- changes in competitive pricing and bids in the marketplace, and
particularly continued intense price competition on government bid
contracts for lower cost, local read meters;
- the actions (or lack thereof) of the Company's competitors;
- the Company's relationships with its alliance partners, particularly
its alliance partners that provide AMR connectivity solutions;
- the general health of the United States economy, particularly
including housing starts and the overall industrial activity;
- changes in foreign economic conditions, including currency
fluctuations such as the recent increase in the euro versus the
United States dollar;
- 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; and
- 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.
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 in this document 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.
3
Part I - Financial Information
Item 1 Financial Statements
BADGER METER, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
March 31, December 31,
2004 2003
---- ----
(Unaudited)
Assets
Current assets:
Cash $ 775 $ 2,089
Receivables 28,390 26,304
Inventories:
Finished goods 11,779 8,010
Work in process 9,942 8,494
Raw materials 9,521 13,150
--------- ---------
Total inventories 31,242 29,654
Prepaid expenses 1,707 1,193
Deferred income taxes 3,730 3,758
--------- ---------
Total current assets 65,844 62,998
Property, plant and equipment, at cost 105,230 104,081
Less accumulated depreciation (62,991) (61,243)
--------- ---------
Net property, plant and equipment 42,239 42,838
Intangible assets, at cost less
accumulated amortization 1,288 1,336
Prepaid pension 16,000 16,236
Other assets 3,349 3,354
Goodwill 6,996 7,089
--------- ---------
Total assets $ 135,716 $ 133,851
========= =========
Liabilities and Shareholders' Equity
Current liabilities:
Short-term debt $ 9,260 $ 3,543
Current portion of long-term debt 5,694 5,645
Payables 13,143 14,895
Accrued compensation and employee benefits 5,305 6,619
Warranty and after-sale costs 3,769 3,767
Income and other taxes 2,166 2,583
--------- ---------
Total current liabilities 39,337 37,052
Deferred income taxes 5,718 5,699
Accrued non-pension postretirement benefits 5,165 5,069
Other accrued employee benefits 6,095 6,410
Long-term debt 22,482 24,450
Commitments and contingencies
Shareholders' equity:
Common Stock 4,863 4,846
Capital in excess of par value 20,520 20,079
Reinvested earnings 60,493 58,928
Accumulated other comprehensive income 1,166 1,280
Less: Employee benefit stock (1,065) (1,285)
Treasury stock, at cost (29,058) (28,677)
--------- ---------
Total shareholders' equity 56,919 55,171
--------- ---------
Total liabilities and shareholders' equity $ 135,716 $ 133,851
========= =========
See accompanying notes to consolidated condensed financial statements.
4
BADGER METER, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in Thousands Except Share and Per Share Amounts)
(Unaudited)
Three Months Ended
March 31,
2004 2003
---- ----
Net sales $ 49,602 $ 39,575
Cost of sales 32,941 26,632
---------- -----------
Gross margin 16,661 12,943
Selling, engineering and
administration 12,063 11,274
---------- -----------
Operating earnings 4,598 1,669
Interest expense 428 556
Other expense (income), net 127 (43)
---------- -----------
Earnings before income taxes 4,043 1,156
Provision for income taxes 1,593 450
---------- -----------
Net earnings $ 2,450 $ 706
========== ===========
Per share amounts:
Earnings per share:
Basic $ .75 $ .22
Diluted $ .73 $ .21
Dividends declared: $ .27 $ .26
Shares used in computation of:
Basic 3,274,693 3,204,840
Impact of dilutive stock
options 86,992 121,592
---------- -----------
Diluted 3,361,685 3,326,432
========== ===========
See accompanying notes to consolidated condensed financial statements.
5
BADGER METER, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Three Months Ended
March 31,
---------
2004 2003
---- ----
Operating activities:
Net earnings $ 2,450 $ 706
Adjustments to reconcile net
earnings to net cash provided
by (used for) operations:
Depreciation 1,780 1,785
Amortization 37 16
Tax benefit on stock options 56 119
Deferred income taxes 47 (247)
Noncurrent employee benefits 237 187
Changes in:
Receivables (1,966) (803)
Inventories (1,699) (2,360)
Current liabilities other than debt (3,333) (2,417)
Prepaid expenses (514) (189)
------- -------
Total adjustments (5,355) (3,909)
------- -------
Net cash used for operations (2,905) (3,203)
------- -------
Investing activities:
Property, plant and equipment (1,373) (1,813)
Other - net 5 807
------- -------
Net cash used for investing activities (1,368) (1,006)
------- -------
Financing activities:
Net increase in short-term debt 5,717 6,056
Repayments of long-term debt (1,894) (3,680)
Dividends paid (885) (832)
Stock options 326 295
Treasury stock purchases (458) (375)
Issuance of treasury stock 153 124
------- -------
Net cash provided by
financing activities 2,959 1,588
------- -------
Decrease in cash (1,314) (2,621)
Cash - beginning of period 2,089 3,779
------- -------
Cash - end of period $ 775 $ 1,158
======= =======
See accompanying notes to consolidated condensed financial statements.
6
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, 2004, the results of operations for the three-month periods
ended March 31, 2004 and 2003, and the cash flows for the three-month
periods ended March 31, 2004 and 2003. The results of operations for any
interim period are not necessarily indicative of the results to be
expected for the full year.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United Sates requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from those estimates.
2. The consolidated condensed balance sheet at December 31, 2003 was derived
from amounts included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2003. 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 three-month periods ended March 31, 2004
and 2003 are as follows:
Balance at Additions Balance
beginning charged to Costs at
(In thousands) of year earnings incurred March 31
-------------- ------- -------- -------- --------
2004 $3,767 $207 $(205) $3,769
2003 $3,597 $294 $(288) $3,603
Stock Option Plans: The Company has six 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, 2004,
options to purchase 148,002 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 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.
7
The following table illustrates the effect on net earnings and earnings
per share if the Company had applied the fair value recognition provisions
of SFAS 123 to stock-based employee compensation. These pro forma
calculations only include the effects of options granted since January 1,
1995. As such, the impacts are not necessarily indicative of the effects
on net earnings of future years.
Three Months
Ended March 31,
---------------
(In thousands except per share amounts) 2004 2003
- --------------------------------------- ---- ----
Net earnings, as reported $ 2,450 $ 706
Deduct: Total stock-based compensation
determined under fair value based method
for all awards since January 1, 1995,
net of related tax effects (103) (84)
--------- ---------
Pro forma net earnings $ 2,347 $ 622
========= =========
Earnings per share:
Basic, as reported $ .75 $ .22
Basic, pro forma $ .72 $ .19
Diluted, as reported $ .73 $ .21
Diluted, pro forma $ .70 $ .19
3. During 2003, the Company established a reserve of $757,000 related to
severance costs for the termination of several employees at its
subsidiary, MecaPlus Equipements SA, which was acquired in 2002. The
corresponding offset was to goodwill. At March 31, 2004, $271,000 related
to the severances remains reserved.
4. The Company maintains a non-contributory defined benefit pension plan for
its employees. The following table sets forth the components of net
periodic pension cost for the three months ended March 31, 2004 and 2003
based on a September 30 measurement date:
Postretirement
Pension Benefits Other Benefits
---------------- --------------
(In thousands) 2004 2003 2004 2003
-------------- ---- ---- ---- ----
Service cost $ 407 $ 394 $ 32 $ 26
Interest cost 627 658 120 125
Expected return on plan assets (927) (991) -- --
Amortization of prior service cost (34) (34) (43) (43)
Amortization of net loss 164 102 39 30
----- ----- ----- -----
Net periodic pension cost $ 237 $ 129 $ 148 $ 138
===== ===== ===== =====
The Company previously disclosed in its financial statements for the year
ended December 31, 2003 that it did not expect to contribute funds to its
pension plan in 2004. The Company continues to believe that it will not be
required to make a contribution.
The Company also disclosed in its financial statements for the year ended
December 31, 2003 that it estimated it would pay $1,276,000 in other
postretirement benefits in 2004. As of March 31, 2004, $119,000 of such
benefits were paid, which was lower than anticipated due to the timing of
payments. The Company continues to believe that its estimated payments for
the full year are reasonable. Note that the amount of benefits paid in
calendar year 2004 will not impact the expense for postretirement benefits
for the current year.
In January 2004, the FASB issued Financial Staff Position No. FAS 106-1,
"Accounting and Disclosure Requirements Related to the Medicare
Prescription Drug, Improvement and Modernization Act of 2003" (the Act),
to address the impact of the Act enacted in December 2003. The Act
provides a prescription drug benefit for Medicare eligible employees
starting in 2006. The impact, if any, of the Act on the Company is not yet
known.
5. The Company guarantees the debt of the Badger Meter Officers' Voting Trust
(BMOVT), from which the trust obtained loans from a bank on behalf of the
officers of the Company 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. The amount of
such debt that the Company guaranteed was $1,707,000 and $1,754,000 at
March
8
31, 2004 and December 31, 2003, respectively. The current loan matures in
April 2004, at which time it is expected to be renewed. The fair market
value of this guarantee at March 31, 2004 continues to be insignificant
because the collateral value of the shares exceeds the loan amount.
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
$220,000 in the first quarter of 2004 reduced the loan from $1,285,000 at
December 31, 2003 to $1,065,000 at March 31, 2004.
6. Total comprehensive income is comprised of net income and other
comprehensive income, which includes foreign currency translation
adjustments. Total comprehensive income was $2,336,000 and $1,297,000 for
the three months ended March 31, 2004 and 2003, respectively. Included in
other comprehensive income was $(114,000) of loss and $591,000 of income
as of March 31, 2004 and 2003, respectively, related to foreign currency
translation adjustments.
7. 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. The more significant legal proceedings are
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, which are not material.
The Company is also a defendant in several multi-party asbestos suits
generally as a result of its membership in certain trade organizations.
The cases are pending in state courts in Mississippi, Texas and Illinois.
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 has evaluated its worldwide operations to determine if any
risks and uncertainties exist that could severely impact its operations in
the near term. The Company does not believe that there are any significant
risks. However, the Company does rely on single suppliers for certain
castings and components in several of its product lines. Although
alternate sources of supply exist for these items, loss of certain
suppliers could temporarily disrupt operations in the short term. The
Company attempts to mitigate these risks by working closely with key
suppliers, purchasing minimal amounts from alternative suppliers and by
purchasing business interruption insurance where appropriate.
The Company reevaluates its exposures on a periodic basis and makes
adjustments to reserves as appropriate.
9
Item 2 Management's Discussion and Analysis of Financial Condition and Results
of Operations
Business Description and Overview
Badger Meter is a leading marketer and manufacturer of products using flow
measurement and control technologies developed both internally and with other
technology companies. Its products are used to measure and control the flow of
liquids in a variety of applications. The Company's product lines fall into two
general categories, utility and industrial. Two product lines, residential and
commercial water meters (with various meter reading technology systems), are
generally sold to water utilities. Industrial sales comprise the remainder of
the sales and include automotive fluid meters and systems, small precision
valves, electromagnetic meters, impeller flow meters and industrial process
meters (all with related accessories and instrumentation).
Residential and commercial water meters and related systems provide the
majority of the Company's sales. Sales are classified as local (or manual) read
meters or automatic meter reading (AMR) products. Local read meters consist of a
water meter and a register. If the device is automatic, the register digitally
encodes the mechanical reading and has a radio frequency transmitter
communicating to a computerized system that collects the data, which in turn is
sent to specific utility computerized programs. Net sales and the corresponding
net earnings depend on unit volume and mix of products, with generally higher
margins on AMR products. There is a base level of annual business driven by
replacement units, and to a lesser extent, housing starts. It is the Company's
belief that conversion from local read meters to AMR products can accelerate
replacements of meters and result in growth. Badger Meter's strategy is to solve
customers' metering needs with its proprietary meter reading systems or other
systems available through alliances within the marketplace.
The industrial products generally serve niche markets and have in the past
utilized technology derived from utility products to serve industrial uses. As
these markets evolve, these products are becoming more specialized to meet
industrial flow measurement and communication protocol requirements. Serving
these markets allows the Company to expand its technologies into other areas of
flow measurement and control, as well as utilizing existing capacity and
spreading fixed costs over a larger sales base.
Results of Operations - Three Months Ended March 31
Net sales for the three-month period ended March 31, 2004 increased $10.0
million, or 25.3%, over the same period in 2003. Residential and commercial
water meter sales represented 71.2% of sales in the first quarter of 2004
compared to 67.7% in the first quarter of 2003. These sales increased $8.5
million to $35.3 million compared to $26.8 million in the same period in 2003.
While local (or manual) read water meter sales volumes were relatively the same
as the first quarter 2003, the first quarter of 2004 saw significant increases
in the number of units utilizing automatic meter reading technologies, which
carry a higher price and contributed to the increase in net sales for the
quarter. It should be noted that the first quarter of 2003 was negatively
influenced by the soft economy and geopolitical concerns. As a result, the
company experienced longer sales cycles during the first quarter of 2003 as
water utilities, the Company's principal customers, evaluated the requirements
and costs of increased security.
Industrial sales are affected by economic conditions, domestically and
internationally, in each of the markets served by the various product lines. In
total, the industrial products represented 28.8% of total sales for the first
three months of 2004 compared to 32.3% for the same period in 2003. The change
was due to water meter sales increasing to more normal levels. Industrial sales
increased $1.5 million to $14.3 million in the first quarter of 2004 compared to
$12.8 million in the first quarter of 2003, due primarily to changes in
exchange rates which favorably affected sales (approximately $1.1 million).
Gross margins for the first quarter of 2004 were 33.6% compared to 32.7%
in the first quarter 2003. The increase was due to the higher mix of AMR
products which carry higher margins as well as improved capacity absorption due
to the increased volumes. These increases were somewhat offset by higher brass
costs and the effects of the stronger euro on certain foreign-sourced
components.
Selling, engineering and administration costs increased $0.8 million, or
7%, for the first quarter of 2004 compared to the same period in 2003 due to
higher incentive costs, increased health care costs and other inflationary
increases partially offset by continuing cost control efforts. Interest expense
for the first quarter of 2004 was $128,000 lower than the same period in the
prior year primarily due to lower debt balances offset by higher interest rates
as a result of the Company converting lower interest rate short-term debt to
higher interest rate long-term debt in late December 2003. Other expense
(income), net, increased $170,000, due primarily to foreign exchange losses
associated with purchases denominated in euros.
10
As a result of the above, net earnings for the first quarter of 2004 were
$2,450,000 compared to net earnings in the first quarter of 2003 of $706,000. On
a diluted earnings per share basis, this equated to $0.73 per share for the
first quarter of 2004 compared to $0.21 for the same period in 2003.
Liquidity and Capital Resources
The main sources of liquidity for the Company typically are cash from
operations and borrowing capacity. For the first three months of 2004, $2.9
million of cash was used for operations, primarily as the net result of
increases in receivable and inventory balances associated with increased
business and decreases in current liabilities, offset by net earnings adjusted
for depreciation and amortization.
The change in the receivables balance from $26.3 million at December 31,
2003 to $28.4 million at March 31, 2004 was primarily due to increased sales and
the timing of certain customer payments.
Inventories at March 31, 2004 increased nearly $1.6 million, or 5.4%.
This increase was primarily due to a build up of certain longer lead-time
electronic materials and stock for new product offerings as well as the
production of certain goods in the first quarter that are expected to be shipped
early in the second quarter of 2004.
Capital expenditures of $1.4 million were less than depreciation expense
of $1.8 million for the first three months of 2004 resulting in a net decrease
in net property, plant and equipment balances from December 31, 2003.
Prepaid pension declined from $16.2 million at December 31, 2003 to $16.0
million at March 31, 2004 due to pension expense. Goodwill decreased due to the
effects of foreign currency translation adjustments.
Short-term debt and the current portion of long-term debt at March 31,
2004 increased to a combined $15.0 million versus a balance at the end of 2003
of $9.2 million. This increase was primarily due to cash required for increased
receivables and inventory balances, capital expenditures, repayments of
long-term debt and dividends. The long-term debt amounts declined as a result of
regularly scheduled payments.
Payables decreased to $13.1 million at March 31, 2004 from $14.9 million
at December 31, 2003 primarily as a result of the timing of payments. Income and
other taxes decreased to $2.2 million from nearly $2.6 million at December 31,
2003 as a result of the timing of tax payments.
Common stock and capital in excess of par value have increased from
December 31, 2003 due to new shares issued in connection with the exercise of
stock options and purchases by the Employee Savings and Stock Ownership Plan
(ESSOP). Treasury stock increased due to shares repurchased during the period.
Employee benefit stock decreased $220,000 due to shares released as a result of
a payment made on the ESSOP loan during the first quarter of 2004.
Badger Meter's financial condition remains strong. The Company believes
that its operating cash flows, available borrowing capacity including
$26,519,000 of unused credit lines, and its ability to raise additional capital
provide adequate resources to fund ongoing operating requirements, future
capital requirements and the development of new products.
Other Matters
There are currently no material legal proceedings pending with respect to
the Company. The more significant legal proceedings are 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, which are not material.
The Company is also a defendant in several multi-party asbestos suits
generally as a result of its membership in certain trade organizations. The
cases are pending in state courts in Mississippi, Texas and Illinois. 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.
11
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,
2003, 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"), as of the end of the first quarter 2004, 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 Senior 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 the rules promulgated 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 Senior 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.
There was no change in the Company's internal control over financial
reporting that occurred during the first quarter 2004 that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.
Part II - Other Information
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit No. Description
- ----------- -----------
31.1 Certification by the Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification by the Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32 Certification of Periodic Financial Report by the Chief Executive
Officer and Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K:
A current report was furnished on April 20, 2004 under Item 7 and 12 of
Form 8-K to disclose the full contents of the Company's press release that
reported the results of the three-month period ended March 31, 2004.
12
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 22, 2004 By /s/ Richard A. Meeusen
---------------------------------------
Richard A. Meeusen
President and Chief Executive Officer
By /s/ Richard E. Johnson
---------------------------------------
Richard E. Johnson
Senior Vice President -
Finance, Chief Financial
Officer and Treasurer
By /s/ Beverly L.P. Smiley
---------------------------------------
Beverly L.P. Smiley
Vice President - Controller
13
BADGER METER, INC.
QUARTERLY REPORT ON FORM 10-Q FOR PERIOD ENDED MARCH 31, 2004
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
31.1 Certification by the Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification by the Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
32 Certification of Periodic Financial Report by the Chief Executive
Officer and Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
14