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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
June 30, 2006
---------------------------
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 File No.) (IRS Employer
of Incorporation) Identification No.)
2818 N. Sullivan Road, Spokane Valley, 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 July 26, 2006, Itron, Inc. issued a press release announcing
the financial results for the three and six months ending June 30,
2006. 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 July 26, 2006.
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: July 26, 2006 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 July 26, 2006.
EXHIBIT 99.1
Itron Announces Record Second Quarter Results
SPOKANE, Wash.--(BUSINESS WIRE)--July 26, 2006--Itron, Inc.
(NASDAQ:ITRI), today reported financial results for its second quarter
ended June 30, 2006. Highlights of the results include:
-- Record quarter and year-to-date revenues of $163.8 million and
$319.4 million;
-- Automated Meter Reading (AMR) unit shipments in 2006 up 40%
for the quarter and 58% year-to-date over 2005;
-- GAAP diluted EPS of 39 cents and 66 cents for the quarter and
year-to-date in 2006 vs. 38 cents and 43 cents for the same
periods in 2005;
-- Pro forma diluted EPS of 62 cents for the quarter and $1.20
year-to-date, an increase of 48% and 60% over the same periods
in 2005;
-- Cash flow from operations of $56.8 million for the first six
months of 2006, up from $36.6 million last year;
-- New order bookings of $313 million year-to-date in 2006, up 6%
over 2005.
"We are excited about our results for both the quarter and six
month periods," said LeRoy Nosbaum, Chairman and CEO. "Our operating
groups' results are strong and once again we have achieved a record
level of revenue and earnings, giving us confidence that our 2006
expectations are on track and that we are executing well on our
business plans for the year. The economic drivers for Itron solutions
remain strong and we are pleased with the level of industry-wide
activity."
Revenues for the second quarter of 2006 were $163.8 million, 21%
higher than second quarter 2005 revenues of $135.1 million. Revenues
for the six months ended June 30, 2006 were $319.4 million, which
reflects a 27% increase over revenues of $251.6 million in the first
six months of 2005. The increased revenues in 2006 were primarily due
to higher shipments of Itron AMR technology.
-- We shipped more than 2.3 million meters and modules with Itron
AMR technology during the quarter compared with 1.7 million in
the second quarter of 2005, a 40% increase. For the six month
period ended June 30, 2006 we shipped over 4.7 million meters
and modules with Itron AMR technology compared to 3.0 million
during the same period last year, which reflects a 58%
increase year over year.
-- Meter Data Collection (MDC) segment revenues of $60.1 million
in the quarter were down slightly from $62.2 million in the
second quarter of 2005. Year-to-date 2006 MDC revenues of
$121.9 million were 9% higher than the $111.9 million
year-to-date in 2005. Lower volumes of stand alone electric
AMR modules were offset by increased shipments of gas AMR
modules in 2006. Sales of stand alone electric AMR modules
have decreased in 2006 as customers are purchasing new Itron
electricity meters with embedded AMR technology. Revenues for
this embedded AMR technology are reflected in Electricity
Metering revenue.
-- Electricity Metering segment revenues were a record $88.5
million in the quarter compared with $60.6 million in the
second quarter of 2005. For the six months ended June 30,
Electricity Metering revenues were $168.8 million in 2006
compared with $114.7 million in 2005. The 46% and 47%
respective increases in revenues were primarily driven by
shipments of electricity meters with embedded AMR to Progress
Energy. The Progress Energy contract, which calls for delivery
of 2.7 million electricity meters with embedded AMR over
approximately 15 months, was signed in the third quarter of
2005.
-- Software revenues were $15.2 million during the second quarter
or 24% higher than $12.3 million in the comparable quarter of
2005. For the six months ended June 30, 2006, Software
revenues of $28.7 million were 15% higher than 2005 revenues
of $25.0 million. Software revenues have increased in 2006
primarily due to increased software license sales for a broad
mix of products.
New order bookings for the quarter and year-to-date periods in
2006 were $107 million and $313 million, compared with $177 million
and $294 million in 2005. Twelve month backlog, which represents the
portion of backlog that will be earned over the next twelve months,
was $225 million at June 30, 2006, compared with $151 million one year
ago. Total backlog was $351 million at June 30, 2006, down 9% from the
record backlog of $387 million at March 31, 2006, but up 44% from $243
million one year ago.
Total company gross margins were 42% for the second quarter of
2006 and 2005 and 43% for the year-to-date periods in 2006 and 2005.
Fluctuations in Hardware Solutions Operating Group gross margins in
2006, compared with 2005, were primarily due to changes in the mix of
product sold and manufacturing volumes. Software Solutions gross
margins increased in 2006, compared with 2005, due to a higher mix of
software licenses.
Pro forma operating income, which excludes intangible asset
amortization expenses in both 2006 and 2005, restructuring charges in
2005 and SFAS 123(R) stock option compensation expense in 2006, was
$27.1 million and $55.2 million, or 16.5% and 17.3% respectively of
revenues for the three and six months ended June 30, 2006. Pro forma
operating income in the second quarter and first six months of 2005
was $20.0 million and $35.9 million respectively, or 14.8% and 14.3%
of revenues. The improved operating margin in 2006 reflects lower
operating expenses as a percentage of revenues in almost all operating
expense areas.
GAAP net income was $10.2 million, or 39 cents per diluted share,
for the current quarter, compared with net income of $9.3 million, or
38 cents per diluted share, for the second quarter of 2005. For the
six months ended June 30, 2006, GAAP net income was $17.3 million, or
66 cents per diluted share, compared with $10.1 million, or 43 cents
per diluted share for the same period in 2005. GAAP net income in the
three and six month periods in 2005 included a $5.9 million tax
benefit for additional research and development (R&D) credits for the
years 1997 through 2004.
On January 1, 2006, the Company adopted Statement of Financial
Accounting Standard No. 123(R), Share-Based Payment (SFAS 123 (R)),
which requires the expensing of share-based compensation. Total
stock-based compensation in the quarter and year to date periods was
$2.1 million and $4.1 million respectively, of which $1.8 million and
$3.6 million was due to the adoption of SFAS 123(R) for our stock
options.
Pro forma net income was $16.4 million, or 62 cents per diluted
share, for the current quarter and $31.5 million, or $1.20 per diluted
share, for the six months ended June 30, 2006, compared with $10.4
million, or 42 cents per diluted share, in the second quarter of 2005
and $17.6 million or 75 cents per diluted share for the six months
ended June 30, 2005. Pro forma net income excludes intangible asset
and debt fee amortization expenses in 2005 and 2006, restructuring
charges and the benefit of R&D tax credits in 2005 and SFAS 123(R)
stock option compensation expenses in 2006.
During the first six months of 2006 we prepaid in full our
variable-rate term loan and a variable-rate real estate term loan,
which had balances at December 31, 2005 of $24.7 million and $14.8
million, respectively. Additionally we prepaid in full $3.2 million in
project financing debt. Interest expense for the three and six months
ended June 30, 2006 decreased $3.8 million and $2.6 million compared
with the same periods in 2005 due to the lower debt levels in 2006.
We generated $56.8 million of cash from operations during the
first six months of 2006 compared with $36.6 million in 2005. Capital
expenditures were $14.4 million in the first six months of 2006
compared with $5.3 million in the first six months of 2005. The
increase this year is primarily related to an enterprise software
upgrade and capital improvements associated with our new headquarters
building.
EBITDA (earnings before interest, income taxes, depreciation and
amortization) was $28.8 million in the current quarter and $58.3
million in the first six months of 2006, compared with $23.9 million
and $42.8 million in the comparable periods of 2005. Adjusted EBITDA,
which excludes the effect of non-cash stock option compensation
expense in 2006, was $30.6 million for the three months and $61.9
million for the six months ended June 30, 2006.
Forward Looking Statements:
This release contains forward-looking statements concerning our
expectations about our 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, our dependence on new
product development and intellectual property, future acquisitions,
changes in estimates for stock based compensation and other factors
which are more fully described in our Annual Report on Form 10-K for
the year ended December 31, 2005 on file with the Securities and
Exchange Commission. Itron undertakes no obligation to update publicly
or revise any forward-looking statements, including our business
outlook.
Business Outlook:
The outlook information provided below and elsewhere in this
release is based on information available today and Itron assumes no
obligation to update it. Our future performance involves risks and
uncertainties.
For the full year 2006, we expect:
-- Revenues between $625 and $635 million.
-- GAAP net income between $31 and $33 million.
-- Pro forma net income between $59 and $61 million, excluding
approximately $9 million of pre-tax stock option compensation
expenses and approximately $34 million of pre-tax intangible
asset and debt fee amortization expenses.
-- Pro forma EPS between $2.25 and $2.30 per diluted share, which
is based on an estimated 26.4 million in diluted shares.
-- Adjusted EBITDA, which excludes $9 million of stock option
compensation expenses, between $118 and $120 million.
Use of Non-GAAP Financial Information:
To supplement our consolidated financial statements presented in
accordance with GAAP, we use certain non-GAAP financial measures,
including pro forma operating income, pro forma net income and EPS,
and EBITDA and Adjusted EBITDA. Management believes these non-GAAP
financial measures provide useful information to both management and
investors by excluding certain expenses, gains and losses that may not
be indicative of our core results and provides for consistency in our
financial reporting. We provide these non-GAAP financial measures
because we believe they provide greater transparency with respect to
supplemental information used by management in its financial and
operational decision making. Specifically, these non-GAAP financial
measures are provided to enhance investors' overall understanding of
our current financial performance and our future anticipated
performance. Non-GAAP performance measures should be considered in
addition to, and not as a substitute for, results prepared in
accordance with GAAP. Finally, our non-GAAP financial measures may be
different from those reported by other companies. Reconciliations
between GAAP and non-GAAP financial measures are included in this
press release.
Earnings Conference Call:
Itron will host a conference call to discuss the financial results
contained in this release at 1:45 p.m. (PDT) on July 26, 2006. 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 1:45 p.m. (PDT). 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 #3682406.
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
non-GAAP 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 Six Months Ended
June 30, June 30,
------------------- -------------------
2006 2005 2006 2005
-------- -------- -------- --------
Revenues
Sales $151,977 $122,811 $294,911 $227,013
Service 11,833 12,312 24,452 24,580
-------- -------- -------- --------
Total revenues 163,810 135,123 319,363 251,593
Cost of revenues
Sales 88,118 70,810 169,960 130,009
Service 6,660 7,574 13,597 13,847
-------- -------- -------- --------
Total cost of revenues 94,778 78,384 183,557 143,856
-------- -------- -------- --------
Gross profit 69,032 56,739 135,806 107,737
Operating expenses
Sales and marketing 16,321 13,529 31,802 26,768
Product development 14,920 11,414 27,790 23,328
General and administrative 12,519 11,770 24,641 21,736
Amortization of intangible
assets 7,612 9,715 14,925 19,431
Restructurings - - - 390
-------- -------- -------- --------
Total operating expenses 51,372 46,428 99,158 91,653
-------- -------- -------- --------
Operating income 17,660 10,311 36,648 16,084
Other income (expense)
Interest income 360 94 722 98
Interest expense (2,585) (6,385) (8,331) (10,952)
Other income (expense), net (241) 454 (689) 555
-------- -------- -------- --------
Total other income
(expense) (2,466) (5,837) (8,298) (10,299)
-------- -------- -------- --------
Income before income taxes 15,194 4,474 28,350 5,785
Income tax (provision) benefit (4,990) 4,839 (11,077) 4,345
-------- -------- -------- --------
Net income $ 10,204 $ 9,313 $ 17,273 $ 10,130
-------- -------- -------- --------
Earnings per share
Basic net income per share $ 0.40 $ 0.41 $ 0.68 $ 0.46
-------- -------- -------- --------
Diluted net income per
share $ 0.39 $ 0.38 $ 0.66 $ 0.43
-------- -------- -------- --------
Weighted average number of
shares outstanding
Basic 25,415 22,811 25,237 22,135
Diluted 26,360 24,416 26,216 23,677
ITRON, INC.
RECONCILIATIONS BETWEEN GAAP AND PRO FORMA
(Unaudited, in thousands, except per share data)
Three Months Ended June 30, 2006
-------------------------------------
Reported Pro Forma Pro Forma
Entries
----------- ------------- -----------
Revenues $ 163,810 $ - $ 163,810
Cost of revenues 94,778 (275)(a) 94,503
---------- -------- ----------
Gross profit 69,032 275 69,307
Operating expenses 51,372 (1,538)(a) 42,222
(7,612)(b)
Operating income 17,660 9,425 27,085
Other income (expense) (2,466) 301 (d) (2,165)
---------- -------- ----------
Income before income taxes 15,194 9,726 24,920
Income tax (provision) benefit (4,990) (3,552)(e) (8,542)
---------- -------- ----------
Net income $ 10,204 $ 6,174 $ 16,378
---------- -------- ----------
Earnings per share
Basic net income per share $ 0.40 $ 0.64
---------- -----------
Diluted net income per share $ 0.39 $ 0.62
---------- -----------
Weighted average number of
shares outstanding
Basic 25,415 25,415
Diluted 26,360 26,360
Three Months Ended June 30, 2005
------------------------------------
Reported Pro Forma Pro Forma
Entries
------------------------------------
Revenues $ 135,123 $ - $ 135,123
Cost of revenues 78,384 - 78,384
--------- ---------- ----------
Gross profit 56,739 - 56,739
Operating expenses 46,428 (9,715)(b) 36,713
Operating income 10,311 9,715 20,026
Other income (expense) (5,837) 2,302 (d) (3,535)
--------- ---------- ----------
Income before income taxes 4,474 12,017 16,491
Income tax (provision) benefit 4,839 (10,975)(e) (6,136)
--------- ---------- ----------
Net income $ 9,313 $ 1,042 $ 10,355
--------- ---------- ----------
Earnings per share
Basic net income per share $ 0.41 $ 0.45
-------- ----------
Diluted net income per share $ 0.38 $ 0.42
-------- ----------
Weighted average number of
shares outstanding
Basic 22,811 22,811
Diluted 24,416 24,416
Six Months Ended June 30, 2006
-------------------------------------
Reported Pro Forma Pro Forma
Entries
-------------------------------------
Revenues $ 319,363 $ - $ 319,363
Cost of revenues 183,557 (526)(a) 183,031
----------- --------- ----------
Gross profit 135,806 526 136,332
Operating expenses 99,158 (3,101)(a) 81,132
(14,925)(b)
Operating income 36,648 18,552 55,200
Other income (expense) (8,298) 3,036 (d) (5,262)
----------- --------- ----------
Income before income taxes 28,350 21,588 49,938
Income tax (provision) benefit (11,077) (7,400)(e) (18,477)
----------- --------- ----------
Net income $ 17,273 $ 14,188 $ 31,461
----------- --------- ----------
Earnings per share
Basic net income per share $ 0.68 $ 1.25
---------- ----------
Diluted net income per share $ 0.66 $ 1.20
---------- ----------
Weighted average number of
shares outstanding
Basic 25,237 25,237
Diluted 26,216 26,216
Six Months Ended June 30, 2005
-------------------------------------
Reported Pro Forma Pro Forma
Entries
-------------------------------------
Revenues $ 251,593 $ - $ 251,593
Cost of revenues 143,856 - 143,856
----------- ---------- ----------
Gross profit 107,737 - 107,737
Operating expenses 91,653 (19,431)(b) 71,832
(390)(c)
Operating income 16,084 19,821 35,905
Other income (expense) (10,299) 2,978 (d) (7,321)
----------- ---------- ----------
Income before income taxes 5,785 22,799 28,584
Income tax (provision) benefit 4,345 (15,284)(e) (10,939)
----------- ---------- ----------
Net income $ 10,130 $ 7,515 $ 17,645
----------- ---------- ----------
Earnings per share
Basic net income per share $ 0.46 $ 0.80
---------- ----------
Diluted net income per share $ 0.43 $ 0.75
---------- ----------
Weighted average number of
shares outstanding
Basic 22,135 22,135
Diluted 23,677 23,677
Pro Forma Adjustments
- -----------------------------------------------------
(a) Non-cash stock option compensation expense.
(b) Amortization of intangible assets.
(c) Restructurings.
(d) Debt fee amortization.
(e) Income taxes associated with pro forma entries.
ITRON, INC.
SEGMENT INFORMATION
(Unaudited, in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2006 2005 2006 2005
-------- -------- -------- --------
Revenues
Hardware Solutions
Meter Data Collection $ 60,110 $ 62,192 $121,861 $111,868
Electricity Metering 88,467 60,622 168,845 114,728
-------- -------- -------- --------
Total Hardware Solutions 148,577 122,814 290,706 226,596
Software Solutions 15,233 12,309 28,657 24,997
-------- -------- -------- --------
Total Company $163,810 $135,123 $319,363 $251,593
-------- -------- -------- --------
Gross profit
Hardware Solutions
Meter Data Collection $ 25,464 $ 27,288 $ 54,167 $ 48,332
Electricity Metering 37,017 24,710 68,926 48,987
-------- -------- -------- --------
Total Hardware Solutions 62,481 51,998 123,093 97,319
Software Solutions 6,551 4,741 12,713 10,418
-------- -------- -------- --------
Total Company $ 69,032 $ 56,739 $135,806 $107,737
-------- -------- -------- --------
Operating income (loss)
Hardware Solutions
Meter Data Collection $ 19,658 $ 21,917 $ 42,791 $ 37,945
Electricity Metering 33,199 20,437 61,774 40,326
Other unallocated costs (9,706) (6,184) (18,433) (12,205)
-------- -------- -------- --------
Total Hardware Solutions 43,151 36,170 86,132 66,066
Software Solutions (3,335) (2,922) (5,824) (5,574)
Corporate unallocated (22,156) (22,937) (43,660) (44,408)
-------- -------- -------- --------
Total Company $ 17,660 $ 10,311 $ 36,648 $ 16,084
-------- -------- -------- --------
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2006 2005 2006 2005
-------- -------- -------- --------
Supplemental Information (Units in thousands)
Unit Shipments by Segment
Meter Data Collection
AMR standalone modules 1,000 1,125 2,075 1,900
Licensed AMR (other
vendors' meters) 50 125 175 300
Electricity Metering
Total meters 1,850 1,125 3,575 2,200
With Itron AMR 1,300 425 2,500 800
With other AMR 225 225 375 425
(1)Total units with Itron AMR 2,350 1,675 4,750 3,000
Growth in total Itron AMR
shipments 40% 58%
(1)Includes Itron AMR standalone modules, Itron meters with Itron
AMR and other vendors' electronic electricity meters with Itron AMR.
ITRON, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands) June 30, December 31,
2006 2005
---------- ----------
ASSETS
Current assets
Cash and cash equivalents $ 46,587 $ 33,638
Accounts receivable, net 89,046 104,428
Inventories 59,979 49,456
Deferred income taxes, net 20,627 23,194
Other 23,598 10,941
---------- ----------
Total current assets 239,837 221,657
Property, plant and equipment, net 75,475 77,623
Intangible assets, net 118,161 123,293
Goodwill 119,504 116,032
Deferred income taxes, net 52,330 48,955
Other 8,664 11,324
---------- ----------
Total assets $ 613,971 $ 598,884
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 49,418 $ 46,215
Wages and benefits payable 20,058 23,732
Current portion of debt - 4,376
Current portion of warranty 7,927 8,497
Unearned revenue 26,376 22,758
---------- ----------
Total current liabilities 103,779 105,578
Long-term debt 124,274 160,186
Project financing debt - 2,367
Warranty 9,027 6,779
Contingent purchase price 5,882 -
Other obligations 7,927 6,440
---------- ----------
Total liabilities 250,889 281,350
Shareholders' equity
Preferred stock - -
Common stock 339,640 312,046
Accumulated other comprehensive income, net 1,552 871
Retained earnings 21,890 4,617
---------- ----------
Total shareholders' equity 363,082 317,534
---------- ----------
Total liabilities and shareholders'
equity $ 613,971 $ 598,884
---------- ----------
ITRON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands) Six Months Ended
June 30,
--------------------
2006 2005
-------- ---------
Operating activities
Net income $ 17,273 $ 10,130
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 22,291 26,124
Employee stock plans income tax benefits 11,686 7,047
Excess tax benefits from stock-based
compensation (8,371) -
Stock-based compensation 4,096 220
Amortization of prepaid debt fees 3,155 3,048
Deferred income taxes, net (953) (12,380)
Other, net 435 828
Changes in operating assets and liabilities, net
of acquisitions:
Accounts receivable 18,038 4,324
Inventories (9,575) (892)
Accounts payable and accrued expenses 1,142 2,179
Wages and benefits payable (3,623) 2,696
Unearned revenue 4,230 (4,110)
Warranty 1,678 (181)
Other long-term obligations (181) (644)
Other, net (4,550) (1,800)
-------- ---------
Net cash provided by operating activities 56,771 36,589
Investing activities
Acquisition of property, plant and equipment (14,420) (5,276)
Proceeds from the sale of property, plant and
equipment 109 2,642
Proceeds from the sale of an investment in
affiliate 1,000 -
Business acquisitions, net of cash and cash
equivalents acquired (7,778) -
Other, net 335 478
-------- ---------
Net cash used in investing activities (20,754) (2,156)
Financing activities
Payments on debt (42,703) (108,178)
Issuance of common stock 11,326 72,318
Excess tax benefits from stock-based
compensation 8,371 -
Prepaid debt fees (62) (267)
Other, net - 28
-------- ---------
Net cash used in financing activities (23,068) (36,099)
Increase (decrease) in cash and cash equivalents 12,949 (1,666)
Cash and cash equivalents at beginning of period 33,638 11,624
-------- ---------
Cash and cash equivalents at end of period $ 46,587 $ 9,958
-------- ---------
Non-cash transactions:
Fixed assets purchased but not yet paid $ 3,103 $ -
ITRON, INC.
RECONCILIATIONS BETWEEN GAAP NET INCOME, EBITDA AND ADJUSTED EBITDA
(Unaudited, in thousands)
Three Months Six Months Ended
Ended June 30, June 30,
----------------- -----------------
2006 2005 2006 2005
------- ------- ------- -------
GAAP net income $10,204 $ 9,313 $17,273 $10,130
Adjustments to GAAP net income
Interest income (360) (94) (722) (98)
Interest expense 2,585 6,385 8,331 10,952
Income tax provision (benefit) 4,990 (4,839) 11,077 (4,345)
Depreciation and amortization 11,353 13,144 22,291 26,124
------- ------- ------- -------
Total adjustments 18,568 14,596 40,977 32,633
EBITDA $28,772 $23,909 $58,250 $42,763
------- ------- ------- -------
Non-cash stock option compensation
expense 1,813 - 3,627 -
-------- ------- -------- -------
ADJUSTED EBITDA $30,585 $23,909 $61,877 $42,763
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CONTACT: Itron, Inc.
Deloris Duquette, 509-891-3523
deloris.duquette@itron.com