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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
October 28, 2005
--------------------------
Date of Report (Date of Earliest Event Reported)
ITRON, INC.
--------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Washington 000-22418 91-1011792
- ---------------------------- --------------- -------------------
(State or Other Jurisdiction (Commission IRS Employer
of Incorporation) File No.) Identification No.)
2818 N. Sullivan Road, Spokane, WA 99216
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices, Zip Code)
(509) 924-9900
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
None
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On October 28, 2005, Itron, Inc. issued a press release announcing
the financial results for the three and nine months ending
September 30, 2005. A copy of this press release and accompanying
financial statements are attached as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
The following exhibit is filed as part of this report:
Exhibit
Number Description
- -------------- -------------------------------------------------------------
99.1 Press Release dated October 28, 2005.
The information presented in this Current Report on Form 8-K may contain
forward-looking statements and certain assumptions upon which such
forward-looking statements are in part based. Numerous important factors,
including those factors identified in Itron, Inc.'s Annual Report on Form 10-K
and other of the Company's filings with the Securities and Exchange Commission,
and the fact that the assumptions set forth in this Current Report on Form 8-K
could prove incorrect, could cause actual results to differ materially from
those contained in such forward-looking statements.
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, hereunto duly authorized.
ITRON, INC.
Dated: October 28, 2005 By: /s/ STEVEN M. HELMBRECHT
------------------------
Steven M. Helmbrecht
Sr. Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit
Number Description
- -------------- -------------------------------------------------------------
99.1 Press release dated October 28, 2005.
Exhibit 99.1
Itron Reports Third Quarter 2005 Financial
Results; Third Quarter Revenues Increase 15%; Third Quarter GAAP Net
Income $6.0 Million verses $1.7 Million Last Year
SPOKANE, Wash.--(BUSINESS WIRE)--Oct. 28, 2005--
Third Quarter Pro Forma Net Income Increases 78% to $12.6 Million;
Record New Order Bookings of $212 Million
Itron, Inc. (Nasdaq:ITRI) today reported its financial results for
the quarter and year-to-date periods ended September 30, 2005. Third
quarter results for both 2005 and 2004 include our Electricity
Metering business acquired July 1, 2004. Year-to-date results in 2005
include nine months of Electricity Metering operations compared with
three months in 2004.
Third quarter revenues were $141.1 million, 15% higher than third
quarter 2004 revenues of $122.5 million. Year-to-date, revenues were
$392.7 million in 2005 compared with $267.7 million in 2004. Revenue
highlights by segment for the quarter and year-to-date periods are as
follows:
Meter Data Collection (MDC)
-- MDC revenues were $70.6 million in the quarter, an increase of
$13.8 million, or 24%, compared with the third quarter of
2004, due to increased shipments of gas AMR modules, increased
handheld sales outside of North America and increased contract
manufacturing services related to embedding our AMR technology
into other electricity meter vendors' solid-state meters.
Offsetting those increases were lower implementation revenues
and sales of third-party hardware.
-- Year-to-date, MDC revenues were $182.5 million compared with
$178.7 million in 2004. Unit shipments of standalone AMR
modules increased 8.5% year-to-date in 2005 compared with the
same period in 2004, while related revenues for the same
periods increased by approximately 4% due to lower average
selling prices for standalone AMR modules, in particular
electric. On a year-to-date basis in 2005, increased handheld
sales and contract manufacturing services were partially
offset by lower implementation revenues and sales of
third-party hardware.
-- Standalone AMR module shipments were approximately 1.2 million
and 3.1 million during the quarter and year-to-date periods in
2005, compared with approximately 900,000 and 2.8 million for
the same periods in 2004. In the third quarter and
year-to-date periods in 2005, we produced approximately
250,000 and 550,000 Itron AMR products for other vendors'
solid-state electricity meters compared with approximately
50,000 and 125,000 in the same periods in 2004.
Electricity Metering
-- Electricity Metering revenues in the quarter were $58.6
million compared with $54.2 million in 2004. Residential meter
sales increased approximately $9.2 million in 2005 compared
with 2004, offset by slightly lower commercial and industrial
meter sales in the 2005 quarter. Also offsetting the increase
in residential meter sales was the phasing out during the last
half of 2004 of contract manufacturing services for a former
affiliate, which were approximately $4.2 million in the third
quarter of 2004. Year-to-date in 2005, Electricity Metering
revenues were $173.3 million.
-- We shipped approximately 1.2 million electricity meters in the
quarter compared with approximately 850,000 in the third
quarter of 2004. The growth in unit shipments of 39% is
approximately twice the revenue growth due to the higher mix
of residential meters as well as lower average selling prices
in 2005. Year-to-date in 2005, electricity meter shipments
were approximately 3.4 million.
-- Approximately 48% of meters shipped during the quarter, and
40% for the year-to-date period in 2005, were equipped with
Itron AMR technology compared with 32% in the third quarter of
2004. In addition, 13% of shipments in the third quarter and
17% in the first nine months of 2005 were equipped with other
vendors' AMR technology compared with 25% in the third quarter
of 2004.
Software
-- Software revenues increased $400,000 in the quarter and $2.1
million year-to-date in 2005, compared with the same periods
in 2004, due to higher licenses and maintenance offset by
lower professional services revenues.
GAAP net income was $6.0 million, or 23 cents per diluted share
for the quarter, compared with $1.7 million, or 8 cents per diluted
share in the third quarter of 2004. GAAP net income in the first nine
months of 2005 was $16.1 million, or 66 cents per diluted share,
compared with $1.8 million, or 8 cents per diluted share, in 2004.
Year-to-date GAAP net income in 2005 includes a $5.9 million tax
benefit for additional R&D tax credits for the years 1997 through
2004, which was recognized in the second quarter of 2005.
Pro forma net income was $12.6 million, or 49 cents per diluted
share for the quarter, compared with $7.1 million, or 32 cents per
diluted share in the third quarter of 2004. Year-to-date pro forma net
income was $30.3 million, or $1.24 per diluted share, compared with
$11.4 million, or 52 cents per diluted share in 2004. Pro forma net
income excludes the amortization of intangible assets and debt
placement fees, restructurings and the benefit of the prior year R&D
tax credits. "By virtually every financial measure, Itron is having a
remarkable year," commented LeRoy Nosbaum, chairman and CEO. "Our
record revenue performance is the result of upward momentum across
many fronts. Higher volumes and operating efficiencies are resulting
in even stronger earnings growth. We are quite pleased with how this
year is progressing and look forward to similar progress in 2006."
Gross margins were 43% for the quarter and first nine months of
2005, compared with 40% and 43% in the same periods in 2004.
-- MDC gross margin improved to 45% in the quarter, compared with
42% in the third quarter of 2004 due primarily to the higher
mix of gas AMR and higher handheld systems revenues.
Year-to-date MDC gross margin was 44% compared with 46% in
2004, due to lower average selling prices for standalone AMR
modules, in particular electric, and lower implementation
margins offset by the higher mix of gas AMR.
-- Electricity Metering gross margin was 41% during the quarter
compared with 39% during the third quarter of 2004. Gross
margin in the third quarter of 2004 was lower than normal due
to a $2.2 million purchase accounting adjustment to write-up
acquired finished goods inventory to the expected net sales
price, and due to approximately $4.2 million of contract
manufacturing services during the quarter to a former
affiliate, which were very low margin. For the first
nine-months of 2005, Electricity Metering gross margin was
42%. The impact of lower average selling prices for
residential meters in 2005 has been partially offset by lower
manufacturing costs.
-- Software Solutions gross margins were 39% for the quarter and
41% year-to-date in 2005, compared with 36% and 35% for the
same 2004 periods. The higher margins in 2005 reflect the
higher mix of license and maintenance fees.
Intangible asset amortization expenses have increased in 2005 as a
result of the Electricity Metering acquisition on July 1, 2004, and
were $9.7 million and $29.1 million in the quarter and year-to-date
periods in 2005, compared with $7.2 million and $11.3 million for the
same 2004 periods.
Excluding intangible asset amortization expenses and
restructurings, operating income was $23.9 million, or 16.9% of
revenues for the quarter, compared with $16.3 million, or 13.3% in the
third quarter of 2004, and $59.8 million, or 15.2% of revenues
year-to-date in 2005, compared with $26.5 million, or 9.9%
year-to-date in 2004. The improved operating margin in 2005 reflects
the lower level of spending required for Electricity Metering
marketing and product development, as well as operating efficiencies
and cost savings from headcount reductions in 2004 and higher volumes
of meters and AMR products in 2005.
We had another record quarter for new order bookings and backlog.
Details for new order bookings and quarter-end backlog (neither of
which includes maintenance revenues) are as follows:
New order bookings during the quarter were $212 million, compared
with $98 million in the third quarter of last year. New order bookings
in the first nine months of 2005 were $506 million, compared with $230
million in the first nine months of 2004. Significant orders during
the quarter included:
-- An order from Progress Energy for approximately 2.7 million
solid-state electricity meters with AMR, worth approximately
$120 million;
-- An order for approximately 500,000 gas AMR modules to be
delivered over five years; and
-- An agreement to provide the U.S. Department of the Navy with
enterprise energy management software and services.
Total backlog increased to $325 million at September 30, 2005. By
comparison, total backlog was $243 million at June 30, 2005, and $177
million at September 30, 2004. Twelve-month backlog, which represents
the estimated portion of backlog that will be earned over the next
twelve months, was $198 million at September 30, 2005, compared with
$151 million at June 30, 2005 and $104 million at September 30, 2004.
We generated $13.0 million of cash from operations during the
quarter compared with $20.4 million during the third quarter of last
year. We used cash during the quarter to begin building inventories
for the Progress Energy order signed in July and expect to continue to
build inventories for that order in the fourth quarter of this year as
the installation rate increases throughout that quarter. Accounts
receivable also increased during the quarter driven by higher
revenues. Cash flow from operations was $49.6 million for the nine
months ended September 30, 2005, compared with $27.5 million for the
same period in 2004.
Net capital expenditures were approximately $5.0 million and $10.3
million for the quarter and year-to-date periods in 2005, compared
with approximately $3.2 million and $10.0 million for the same periods
in 2004.
We made $14.0 million in optional repayments on our term bank debt
during the quarter, bringing the outstanding term-loan balance to
$28.0 million at September 30, 2005. We made another $3.0 million in
optional repayments subsequent to quarter-end, resulting in our having
repaid $160.0 million of the $185 million term bank debt borrowed on
July 1, 2004, in connection with the Electricity Metering acquisition.
On October 27, 2005, we signed an agreement with the owners of
Telect, Inc., a privately-held telecommunications company, to purchase
their 200,000 square foot headquarters building for approximately $20
million, which we expect to partially finance with a loan. Our
existing 141,000 square foot headquarters facility will be listed for
sale. Closing is expected to occur by December 31, 2005. We expect to
take possession of the building in April 2006 and to begin moving
operations in the third quarter of 2006.
Itron's headquarters operations include marketing, research and
development, customer service, information technology and financial
and corporate functions. Itron has experienced strong growth over the
last few years, partially as a result of acquisitions. Total staffing
in Spokane has increased by approximately 25% over the last four
years. Itron's existing Spokane facility was built more than twenty
years ago and was initially designed for manufacturing operations.
Manufacturing operations previously performed in Spokane have since
been moved to our Waseca, Minnesota, location or outsourced.
"Our existing facility requires significant investment in order to
adapt to our current use of the building, accommodate our existing
employee base and provide for future growth and expansion," said LeRoy
Nosbaum, chairman and CEO. "Purchasing this building is a much better
option than spending money to renovate our existing facility. We are
very fortunate to have found a close-by facility in Liberty Lake that
is in excellent condition and that meets our current and future space
requirements."
Business Outlook:
Our outlook for 2005 and 2006 does not include any impact related
to the expensing of stock options. We expect to implement FASB's
Statement 123R, which requires the expensing of stock options and ESPP
shares issued at a discount, in 2006. While we have not yet completed
our analysis of the effects of the adoption of 123R, the expensing of
stock options will decrease gross margin, increase operating expenses
and influence our effective tax rate and could materially impact GAAP
net income.
For the full year 2005, we expect:
-- Revenues to be between $535 and $540 million (previous
guidance was $535 to $545 million).
-- Pro forma diluted earnings per share between $1.70 and $1.75
(previous guidance was $1.65 to $1.70).
While still preliminary, the Company issued an early outlook for
2006, based primarily on the strength of new order bookings so far in
2005. For the full year 2006, we expect revenue growth of
approximately 10% over 2005, with pro forma earnings growth of almost
twice that.
Use of Non-GAAP Financial Information:
To supplement our consolidated financial statements presented in
accordance with GAAP, we use certain non-GAAP measures, including pro
forma earnings and EPS and EBITDA. Pro forma earnings and EPS are
adjusted from GAAP-based results to exclude certain expenses or gains
that we believe are not indicative of our core operating results. Pro
forma results are one of the primary indicators management uses for
evaluating historical results and for planning and forecasting future
periods. We believe pro forma results provide consistency in our
financial reporting which enhances our investor's understanding of our
current financial performance as well as our future prospects. Pro
forma results along with EBITDA measures should be viewed in addition
to, and not in lieu of, GAAP results.
Earnings Conference Call:
Itron will host a conference call to discuss the financial results
contained in this release at 6:00 a.m. PST on October 28, 2005. The
call will be webcast in a listen-only mode and can be accessed online
at www.itron.com, "About Itron -- Investor Events." The live webcast
will begin at 6:00 a.m. (PST). The webcast replay will begin shortly
after the conclusion of the live call and will be available for two
weeks. A telephone replay of the call will also be available
approximately one hour after the conclusion of the live call, for 48
hours, and is accessible by dialing 888-203-1112 (Domestic) or
719-457-0820 (International), entering passcode #5349308.
Forward-Looking Statements:
This release contains forward-looking statements concerning
Itron's operations, financial performance, sales, earnings and cash
flow. These statements reflect our current plans and expectations and
are based on information currently available. They rely on a number of
assumptions and estimates, which could be inaccurate, and which are
subject to risks and uncertainties that could cause our actual results
to vary materially from those anticipated. Risks and uncertainties
include the rate and timing of customer demand for the Company's
products, rescheduling of current customer orders, changes in
estimated liabilities for product warranties, changes in laws and
regulations and other factors which are more fully described in our
Annual Report on Form 10-K for the year ended December 31, 2004, and
our Form 10-Qs for the quarters ended March 31, 2005, and June 30,
2005, on file with the Securities and Exchange Commission. Itron
undertakes no obligation to update publicly or revise any
forward-looking statements.
About Itron:
Itron is a leading technology provider and critical source of
knowledge to the global energy and water industries. Nearly 3,000
utilities worldwide rely on Itron technology to deliver the knowledge
they require to optimize the delivery and use of energy and water.
Itron delivers value to its clients by providing industry-leading
solutions for electricity metering, meter data collection, energy
information management, demand side management and response, load
forecasting, analysis and consulting services, transmission and
distribution system design and optimization, Web-based workforce
automation, commercial and industrial customer care and residential
energy management. To know more, start here: www.itron.com.
Statements of operations, reconciliations between GAAP and pro
forma results, segment information, balance sheets and cash flows
follow.
ITRON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ---------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Revenues
Sales $ 128,683 $ 107,327 $ 355,696 $ 230,358
Service 12,462 15,177 37,042 37,390
---------- ---------- ---------- ----------
Total revenues 141,145 122,504 392,738 267,748
Cost of revenues
Sales 73,179 63,534 203,188 130,993
Service 6,936 9,485 20,783 21,140
---------- ---------- ---------- ----------
Total cost of revenues 80,115 73,019 223,971 152,133
---------- ---------- ---------- ----------
Gross profit 61,030 49,485 168,767 115,615
Operating expenses
Sales and marketing 13,688 12,045 40,456 31,971
Product development 11,807 11,893 35,135 32,669
General and
administrative 11,645 9,201 33,381 24,479
Amortization of
intangible assets 9,712 7,217 29,143 11,271
Restructurings -- 1,571 390 4,005
---------- ---------- ---------- ----------
Total operating expenses 46,852 41,927 138,505 104,395
---------- ---------- ---------- ----------
Operating income 14,178 7,558 30,262 11,220
Other income (expense)
Interest income 69 24 167 152
Interest expense (4,328) (5,147) (15,280) (8,162)
Other income (expense),
net (535) 261 20 (474)
---------- ---------- ---------- ----------
Total other income
(expense) (4,794) (4,862) (15,093) (8,484)
---------- ---------- ---------- ----------
Income before income taxes 9,384 2,696 15,169 2,736
Income tax (provision)
benefit (3,382) (1,026) 963 (986)
---------- ---------- ---------- ----------
Net income $ 6,002 $ 1,670 $ 16,132 $ 1,750
========== ========== ========== ==========
Earnings per share
Basic net income per
share $ 0.25 $ 0.08 $ 0.70 $ 0.08
========== ========== ========== ==========
Diluted net income per
share $ 0.23 $ 0.08 $ 0.66 $ 0.08
========== ========== ========== ==========
Weighted average number of
shares outstanding
Basic 24,441 20,978 22,912 20,827
Diluted 25,919 22,050 24,471 22,005
ITRON, INC.
RECONCILIATIONS BETWEEN GAAP AND PRO FORMA
(Unaudited, in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- --------------------
2005 2004 2005 2004
--------- --------- ---------- ---------
PRO FORMA OPERATING INCOME
GAAP basis operating income $ 14,178 $ 7,558 $ 30,262 $ 11,220
Adjustments to GAAP basis
operating income before
income taxes
Amortization of intangible
assets 9,712 7,217 29,143 11,271
Restructurings -- 1,571 390 4,005
--------- --------- ---------- ---------
Total adjustments 9,712 8,788 29,533 15,276
-------- -------- --------- --------
Pro forma operating income $ 23,890 $ 16,346 $ 59,795 $ 26,496
========= ========= ========== =========
PRO FORMA NET INCOME
GAAP basis income before
income taxes $ 9,384 $ 2,696 $ 15,169 $ 2,736
Adjustments to GAAP basis
income before income taxes
Amortization of intangible
assets 9,712 7,217 29,143 11,271
Amortization of debt
placement fees 1,245 714 4,223 1,112
Restructurings -- 1,571 390 4,005
Non-cash stock compensation -- -- 73 --
--------- --------- ---------- ---------
Total adjustments 10,957 9,502 33,829 16,388
Adjusted income before income
taxes 20,341 12,198 48,998 19,124
Income tax provision(a) (7,721) (5,099) (18,688) (7,688)
--------- --------- ---------- ---------
Pro forma net income $ 12,620 $ 7,099 $ 30,310 $ 11,436
========= ========= ========== =========
PRO FORMA EARNINGS PER SHARE
Basic
Weighted average number of
basic shares outstanding 24,441 20,978 22,912 20,827
Basic pro forma net income
per share $ 0.52 $ 0.34 $ 1.32 $ 0.55
========= ========= ========== =========
Diluted
Weighted average number of
basic shares outstanding 24,441 20,978 22,912 20,827
Employee stock option shares 1,478 1,072 1,559 1,178
--------- --------- ---------- ---------
Weighted average number of
diluted shares outstanding 25,919 22,050 24,471 22,005
Diluted pro forma net income
per share $ 0.49 $ 0.32 $ 1.24 $ 0.52
========= ========= ========== =========
(a) The pro forma tax provision excludes the $5.9 million research and
development tax credit reported for GAAP during the second quarter
of 2005.
ITRON, INC.
RECONCILIATIONS BETWEEN GAAP NET INCOME AND EBITDA
(Unaudited, in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
GAAP basis net income $ 6,002 $ 1,670 $ 16,132 $ 1,750
Adjustments to GAAP basis net
income
Interest income (69) (24) (167) (152)
Interest expense 4,328 5,147 15,280 8,162
Income tax provision
(benefit) 3,382 1,026 (963) 986
Depreciation and amortization 12,661 10,430 38,785 19,260
--------- --------- --------- ---------
Total adjustments 20,302 16,579 52,935 28,256
EBITDA $ 26,304 $ 18,249 $ 69,067 $ 30,006
========= ========= ========= =========
ITRON, INC.
SEGMENT INFORMATION
(Unaudited, in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- ---------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Revenues
Hardware Solutions
Meter Data
Collection $ 70,638 $ 56,798 $ 182,506 $ 178,714
Electricity Metering 58,598 54,195 173,326 54,195
---------- ---------- ---------- ----------
Total Hardware
Solutions 129,236 110,993 355,832 232,909
Software Solutions 11,909 11,511 36,906 34,839
---------- ---------- ---------- ----------
Total Company $ 141,145 $ 122,504 $ 392,738 $ 267,748
========== ========== ========== ==========
Gross profit
Hardware Solutions
Meter Data
Collection $ 32,091 $ 24,129 $ 80,418 $ 82,215
Electricity Metering 24,236 21,183 73,223 21,183
---------- ---------- ---------- ----------
Total Hardware
Solutions 56,327 45,312 153,641 103,398
Software Solutions 4,703 4,173 15,126 12,217
---------- ---------- ---------- ----------
Total Company $ 61,030 $ 49,485 $ 168,767 $ 115,615
========== ========== ========== ==========
Operating income (loss)
Hardware Solutions
Meter Data
Collection $ 26,667 $ 18,878 $ 64,607 $ 66,605
Electricity Metering 20,178 17,322 60,504 17,322
Other unallocated
costs (5,938) (5,291) (18,143) (12,696)
---------- ---------- ---------- ----------
Total Hardware
Solutions 40,907 30,909 106,968 71,231
Software Solutions (3,007) (5,119) (8,576) (17,011)
Corporate unallocated (23,722) (18,232) (68,130) (43,000)
---------- ---------- ---------- ----------
Total Company $ 14,178 $ 7,558 $ 30,262 $ 11,220
========== ========== ========== ==========
ITRON, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands) September 30, December 31,
2005 2004
------------ ------------
ASSETS
Current assets
Cash and cash equivalents $ 11,896 $ 11,624
Accounts receivable, net 94,983 90,097
Inventories 50,658 45,459
Deferred income taxes, net 8,018 22,733
Other 9,530 5,477
------------ ------------
Total current assets 175,085 175,390
Property, plant and equipment, net 55,411 59,690
Intangible assets, net 132,996 162,137
Goodwill 116,079 117,471
Deferred income taxes, net 58,426 27,252
Other 11,963 15,211
------------ ------------
Total assets $ 549,960 $ 557,151
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 38,000 $ 37,439
Wages and benefits payable 21,569 13,947
Current portion of debt 2,139 35,647
Current portion of warranty 5,323 7,243
Unearned revenue 20,256 22,991
------------ ------------
Total current liabilities 87,287 117,267
Long-term debt 150,871 239,361
Project financing debt 2,588 3,227
Warranty 5,928 6,331
Other obligations 5,706 6,535
------------ ------------
Total liabilities 252,380 372,721
Shareholders' equity
Preferred stock -- --
Common stock 308,841 211,920
Accumulated other comprehensive income, net 1,051 954
Accumulated deficit (12,312) (28,444)
------------ ------------
Total shareholders' equity 297,580 184,430
------------ ------------
Total liabilities and shareholders'
equity $ 549,960 $ 557,151
============ ============
ITRON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands) Nine Months Ended
September 30,
-----------------------
2005 2004
----------- -----------
Operating activities
Net income $ 16,132 $ 1,750
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 38,785 19,260
Employee stock plan income tax
benefits 14,399 1,366
Amortization of prepaid debt fees 4,330 1,165
Realized currency translation gains (391) (279)
Deferred income tax benefit (16,313) (1,278)
Other, net 2,178 1,560
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable (4,738) 25,711
Inventories (5,199) (9,013)
Accounts payable and accrued expenses 360 (860)
Wages and benefits payable 7,605 437
Unearned revenue (3,085) (1,130)
Warranty (194) (9,211)
Other long-term obligations (436) (808)
Other, net (3,879) (1,126)
----------- -----------
Cash provided by operating
activities 49,554 27,544
Investing activities
Proceeds from the sale of property, plant
and equipment 2,627 12
Acquisition of property, plant and
equipment (10,264) (10,001)
Acquisitions, net of cash and cash
equivalents -- (251,829)
Payment of contingent purchase price for
acquisition -- (1,957)
Other, net (847) 525
----------- -----------
Cash used by investing activities (8,484) (263,250)
Financing activities
New borrowings -- 309,081
Change in short-term borrowings, net -- (10,000)
Payments on debt (122,704) (49,591)
Issuance of common stock 82,269 4,776
Prepaid debt fees (391) (13,470)
Other, net 28 (6)
----------- -----------
Cash provided (used) by financing
activities (40,798) 240,790
Increase in cash and cash equivalents 272 5,084
Cash and cash equivalents at beginning of
period 11,624 6,240
----------- -----------
Cash and cash equivalents at end of period $ 11,896 $ 11,324
=========== ===========
CONTACT: Itron, Inc., Spokane
Mima Scarpelli, 509-891-3565
mima.scarpelli@itron.com