View:
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
February 14, 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, 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 February 14, 2006, Itron, Inc. issued a press release
announcing the financial results for the three and twelve months
ending December 31, 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 February 14, 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: February 14, 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 February 14, 2006.
EXHIBIT 99.1
Itron Announces Record Financial Results for Fourth Quarter and Full Year 2005
SPOKANE, Wash.--(BUSINESS WIRE)--Feb. 14, 2006--Itron, Inc.
(Nasdaq:ITRI):
-- Total revenues were $552.7 million in 2005 compared with
$399.2 million in 2004.
-- Full year GAAP net income was $33.1 million, or $1.33 per
diluted share, compared to a net loss of $5.3 million, or 25
cents per diluted share, in 2004. GAAP net income in 2005
includes $13.9 million, or 56 cents per diluted share, of tax
benefits.
-- Full year pro forma net income was $45.6 million, or $1.84 per
diluted share (excluding the tax benefits), compared to $20.4
million, or 93 cents per diluted share, in 2004.
Itron, Inc. (Nasdaq:ITRI) today reported financial results for its
fourth quarter and year ended December 31, 2005. Full year results
include twelve months of Electricity Metering operations in 2005,
compared with six months in 2004, as the acquisition of that business
closed on July 1, 2004.
Fourth quarter 2005 revenues were $160.0 million, 22% higher than
fourth quarter 2004 revenues of $131.4 million. For the full year,
revenues were $552.7 million in 2005, compared with $399.2 million in
2004, with growth in 2005 reflecting a full year of Electricity
Metering revenues as well as internal growth in all segments. Revenue
highlights by segment for the fourth quarters and full years in 2005
and 2004 include:
Hardware
-- Meter Data Collection (MDC) revenues were $79.5 million in the
quarter, compared with $59.8 million in the fourth quarter of
2004. Year-to-date, MDC revenues were $262.0 million compared
with $238.6 million in 2004.
-- For both the quarter and full year 2005, increased
shipments of gas AMR modules, increased handheld sales
outside of North America and increased contract
manufacturing services and royalties related to embedding
our AMR technology into other vendors' solid-state meters,
were partially offset by lower sales of third-party
hardware. Implementation revenues were also lower for the
full year 2005.
-- Electricity Metering revenues in the quarter were $66.4
million compared with $58.4 million in the fourth quarter of
2004. Electricity Metering revenues were $239.8 million for
the full year 2005. Electricity Metering revenues were $125.0
million in the last six months of 2005 compared to $112.6
million for the last six months of 2004. In 2004, revenues
included contract manufacturing services for a former
affiliate which we phased out by the end of 2004. Excluding
these manufacturing services, revenues were $55.5 million and
$105.5 million for the fourth quarter and last six months of
2004.
-- Revenues increased in the fourth quarter and last six
months of 2005, compared with the same periods in 2004,
primarily as a result of a large order from Progress
Energy for residential meters with AMR.
-- Unit shipments of Itron AMR technology increased 81% and 34%
in the fourth quarter and full year 2005, compared with the
same periods in 2004. Itron AMR technology includes standalone
AMR modules, Itron electricity meters with embedded AMR and
other vendors' electricity meters with Itron AMR. The
percentage increase in AMR unit shipments is greater than the
percentage increase in hardware revenues due to changes in the
mix and type of AMR product and declines in average selling
prices for AMR, primarily resulting from large volume
purchases. Additional unit shipment information is detailed in
the segment information schedule included with this release.
Software
-- Software revenues were $14.0 million in the quarter, compared
to $13.2 million in the fourth quarter of 2004. For the full
year, software revenues were $50.9 million in 2005, compared
with $48.0 million in 2004. Revenues in 2004 included
approximately $2.8 million of revenues for transmission line
design and joint use services, which we had exited as of
December 31, 2004. Software licenses were 25% of revenues in
2005, compared with 20% in 2004, reflecting increased sales of
meter data management and knowledge applications software
along with commercial and industrial meter data collection
software upgrades.
GAAP net income was $16.9 million, or 65 cents per diluted share,
for the quarter, compared with a loss of $7.0 million, or 33 cents per
diluted share, for the fourth quarter of 2004. GAAP net income for the
full year 2005 was $33.1 million, or $1.33 per diluted share, compared
with a loss of $5.3 million, or 25 cents per diluted share, in 2004.
GAAP net income in the fourth quarter of 2005 includes
approximately $8.0 million of tax benefits associated primarily with a
reorganization of legal entities that allowed us to recognize foreign
subsidiary deferred tax assets from prior years. Full year 2005 GAAP
net income also includes a tax benefit of $5.9 million for the
recognition of R&D tax credits related to prior year qualifying R&D
expenditures.
Pro forma net income in 2005 excludes expenses for amortization of
intangible assets and debt placement fees, restructurings and $13.9
million in tax credits and benefits related to prior years'
activities. Pro forma net income in 2004 excludes expenses for
amortization of intangible assets and debt placement fees,
restructurings and acquisition related in-process R&D.
Pro forma net income was $15.3 million, or 59 cents per diluted
share for the quarter, compared with $9.0 million, or 40 cents per
diluted share, in the fourth quarter of 2004. Year-to-date pro forma
net income was $45.6 million, or $1.84 per diluted share, compared
with $20.4 million, or 93 cents per diluted share in 2004. Our pro
forma tax rates in 2005 were 32.6% for the fourth quarter and 36.4%
for the full year, compared with 39.0% and 39.8% for the fourth
quarter and full year 2004. The lower tax rates in 2005 result
primarily from higher estimated tax credits for R&D activities in 2005
compared to 2004.
Gross margins were 41% for the quarter and 42% for the full year
2005, compared with 42% and 43% for the same periods in 2004.
-- MDC gross margin was 40% in the quarter compared to 44% in the
fourth quarter of last year. Full year MDC gross margin was
43% compared with 45% in 2004. The lower margins in 2005
result from lower average selling prices for standalone AMR
modules, offset by a higher mix of gas AMR modules and
handheld systems.
-- Electricity Metering gross margin was 39% during the quarter
compared with 40% during the fourth quarter of 2004. For the
full year 2005, Electricity Metering gross margin was 41%
compared to 40% in 2004. Gross margin changes from 2004 to
2005 are primarily related to changes in the mix of meters
sold and services provided.
-- Software Solutions gross margins were 47% for the quarter and
43% for the full year in 2005, compared with 42% and 37% for
the same periods in 2004. The higher margins in 2005 reflect a
higher mix of license and maintenance fees.
Pro forma operating income, which excludes intangible asset
amortization expenses and restructurings in both 2005 and 2004 and
in-process R&D in 2004, was $25.7 million, or 16.1% of revenues for
the quarter, compared with $19.0 million, or 14.5%, in the fourth
quarter of 2004, and was $85.5 million, or 15.5%, of revenues for the
full year 2005, compared with $45.5 million, or 11.4%, in 2004. The
improved operating margins in 2005 reflect higher sales of meters and
AMR, lower product development spending as a percentage of revenues
for Electricity Metering, as well as operating efficiency
improvements.
New order bookings during the quarter were $149 million, compared
with $128 million in the fourth quarter of 2004. New order bookings
for the full year 2005 were $655 million, surpassing the previous
record of $358 million in new orders in 2004 (2004 reflects six months
of Electricity Metering new order bookings compared with twelve months
in 2005).
Total backlog was $324 million at December 31, 2005, compared with
$179 million one year ago. Twelve-month backlog, which represents the
estimated portion of backlog that is expected to be earned over the
next twelve months, was $188 million at December 31, 2005, compared
with $97 million one year ago.
We generated $30.1 million of cash from operations during the
quarter compared with $25.5 million during the fourth quarter of 2004.
Cash flow from operations was $79.6 million for the full year 2005
compared with $53.1 million for 2004. Net capital expenditures
(Capex), were approximately $21.7 million for the fourth quarter of
2005, of which $19.8 million was for the purchase of a new
headquarters building, and $32.0 million for the full year. By
comparison, net Capex were $2.8 million in the fourth quarter and
$12.8 million for the full year in 2004.
EBITDA (earnings before interest, income taxes, depreciation and
amortization) more than doubled in 2005. EBITDA was $28.7 million and
$97.7 million for the fourth quarter and full year 2005 compared with
$12.7 million and $42.4 million for the same periods in 2004.
During the fourth quarter and full year 2005, we made $3 million
and $124 million in optional repayments on our term bank debt.
Approximately $60 million of repayments in 2005 came from proceeds
from the issuance of 1.7 million shares of common stock in May 2005.
So far in 2006, we have made $9.7 million in additional optional
repayments, resulting in our having repaid $170 million of the $185
million term bank debt borrowed in connection with the Electricity
Metering acquisition on July 1, 2004.
During the fourth quarter of 2005, we closed on the purchase of a
new headquarters facility for a total purchase price of approximately
$19.8 million, of which $5 million was paid in cash and the remaining
balance of $14.8 million was financed with a new real estate loan.
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.
We expect to implement FASB's Statement 123R -- Share Based
Payment on January 1, 2006, which requires the expensing of
share-based compensation, including stock options. We currently
estimate pre-tax stock option compensation expense in 2006 of
approximately $9 to $10 million. Estimating the value of stock option
awards at the grant date requires judgment, including estimating stock
price volatility, forfeiture rates and expected option life. Our
outlook for GAAP net income in 2006 includes that expense while our
outlook for pro forma net income excludes stock option compensation
expense.
For the full year 2006, we expect:
-- Revenues between $605 and $615 million.
-- GAAP net income between $26 and $28 million.
-- Pro forma net income between $54 and $56 million (excluding
pre-tax expenses of approximately $9 million for stock option
compensation expense and approximately $33 million for
amortization related to intangible assets and debt fees).
-- Our net income outlook is based on an estimated income tax
rate of 45% for GAAP and 38% for pro forma.
-- Pro forma EPS between $2.07 and $2.13 per diluted share, which
excludes approximately 21 cents per share of stock option
compensation expense, and is based on an estimated 26.2
million in diluted shares outstanding.
-- Adjusted EBITDA between $110 and $114 million (excluding $9
million of stock option compensation expense).
For the quarter ended March 31, 2006, we expect
-- Revenues between $145 and $150 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. Management believes the non-GAAP results 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 measures are provided to enhance
investors' overall understanding of our current financial performance
and our future prospects. These measures should be considered in
addition to results prepared in accordance with GAAP, but should not
be considered as a substitute for, or superior to, GAAP results.
Reconciliations between GAAP and non-GAAP results are included in the
financial tables that accompany 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. PST on February 14, 2006. The
call will be webcast in a listen only mode and can be accessed online
at www.itron.com, "Investors -- Investor Events." The live webcast
will begin at 1:45 p.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 #3754612.
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, our dependence on new product development and
intellectual property, future acquisitions, changes in estimates for
share-based compensation 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 Forms 10-Q for the quarters ended March 31,
2005, June 30, 2005, and September 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's award-winning technology to
provide the knowledge they require to optimize the delivery and use of
energy and water. Itron creates value for its clients by providing
industry-leading solutions for electricity metering; meter data
collection; energy information management; demand response; load
forecasting, analysis and consulting services; distribution system
design and optimization; web-based workforce automation; and
enterprise 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 Twelve Months Ended
December 31, December 31,
---------------------------------------
2005 2004 2005 2004
-------- -------- -------- --------
Revenues
Sales $147,574 $116,185 $503,270 $346,543
Service 12,378 15,261 49,420 52,651
-------- -------- -------- --------
Total revenues 159,952 131,446 552,690 399,194
Cost of revenues
Sales 88,257 67,138 291,445 198,131
Service 6,841 9,254 27,624 30,394
-------- -------- -------- --------
Total cost of revenues 95,098 76,392 319,069 228,525
-------- -------- -------- --------
Gross profit 64,854 55,054 233,621 170,669
Operating expenses
Sales and marketing 16,186 13,308 56,642 45,279
Product development 11,942 11,710 47,077 44,379
General and administrative 11,047 11,011 44,428 35,490
Amortization of intangible
assets 9,703 16,630 38,846 27,901
Restructurings - 3,253 390 7,258
In-process research and
development - 6,400 - 6,400
-------- -------- -------- --------
Total operating expenses 48,878 62,312 187,383 166,707
-------- -------- -------- --------
Operating income (loss) 15,976 (7,258) 46,238 3,962
Other income (expense)
Interest income 135 14 302 166
Interest expense (3,664) (4,983) (18,944) (13,145)
Other income (expense), net (88) 85 (68) (389)
-------- -------- -------- --------
Total other income
(expense) (3,617) (4,884) (18,710) (13,368)
-------- -------- -------- --------
Income (loss) before income
taxes 12,359 (12,142) 27,528 (9,406)
Income tax benefit 4,570 5,135 5,533 4,149
-------- -------- -------- --------
Net income (loss) $ 16,929 $ (7,007) $ 33,061 $ (5,257)
-------- -------- -------- --------
Earnings per share
Basic net income (loss) per
share $ 0.68 $ (0.33) $ 1.41 $ (0.25)
-------- -------- -------- --------
Diluted net income (loss)
per share $ 0.65 $ (0.33) $ 1.33 $ (0.25)
-------- -------- -------- --------
Weighted average number of
shares outstanding
Basic 24,823 21,204 23,394 20,922
Diluted 25,984 21,204 24,777 20,922
ITRON, INC.
RECONCILIATIONS BETWEEN GAAP AND PRO FORMA
(Unaudited, in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------------------------
2005 2004 2005 2004
------- -------- -------- --------
PRO FORMA OPERATING INCOME
GAAP operating income (loss) $15,976 $ (7,258) $ 46,238 $ 3,962
Adjustments to GAAP operating
income (loss) before income
taxes
Amortization of intangible
assets 9,703 16,630 38,846 27,901
Restructurings - 3,253 390 7,258
In-process research and
development - 6,400 - 6,400
------- -------- -------- --------
Total adjustments 9,703 26,283 39,236 41,559
------- -------- -------- --------
Pro forma operating income $25,679 $ 19,025 $ 85,474 $ 45,521
------- -------- -------- --------
PRO FORMA NET INCOME
GAAP income (loss) before
income taxes $12,359 $(12,142) $ 27,528 $ (9,406)
Adjustments to GAAP income
(loss) before income taxes
Amortization of intangible
assets 9,703 16,630 38,846 27,901
Amortization of debt
placement fees 665 633 4,888 1,745
Restructurings - 3,253 390 7,258
In-process research and
development - 6,400 - 6,400
------- -------- -------- --------
Total adjustments 10,368 26,916 44,124 43,304
Adjusted income before income
taxes 22,727 14,774 71,652 33,898
Income tax provision (1) (7,408) (5,760) (26,096) (13,481)
------- -------- -------- --------
Pro forma net income $15,319 $ 9,014 $ 45,556 $ 20,417
------- -------- -------- --------
PRO FORMA EARNINGS PER SHARE
Basic
Weighted average number of
basic shares outstanding 24,823 21,204 23,394 20,922
Basic pro forma net income per
share $ 0.62 $ 0.43 $ 1.95 $ 0.98
------- -------- -------- --------
Diluted
Weighted average number of
basic shares outstanding 24,823 21,204 23,394 20,922
Stock-based awards outstanding 1,161 1,073 1,383 1,134
------- -------- -------- --------
Weighted average number of
diluted shares outstanding 25,984 22,277 24,777 22,056
Diluted pro forma net income
per share $ 0.59 $ 0.40 $ 1.84 $ 0.93
------- -------- -------- --------
(1) The pro forma tax provision excludes $5.9 million of prior year
research and development tax credits included in GAAP results
during the second quarter of 2005 and $8.0 million in tax benefits
associated primarily with restructuring of certain foreign
operations included in GAAP results during the fourth quarter of
2005.
ITRON, INC.
SEGMENT INFORMATION
(Unaudited, in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------------------------
2005 2004 2005 2004
-------- -------- -------- --------
Revenues
Hardware Solutions
Meter Data Collection $ 79,493 $ 59,846 $261,999 $238,560
Electricity Metering 66,437 58,391 239,763 112,586
-------- -------- -------- --------
Total Hardware Solutions 145,930 118,237 501,762 351,146
Software Solutions 14,022 13,209 50,928 48,048
-------- -------- -------- --------
Total Company $159,952 $131,446 $552,690 $399,194
-------- -------- -------- --------
Gross profit
Hardware Solutions
Meter Data Collection $ 32,096 $ 26,133 $112,514 $108,348
Electricity Metering 26,163 23,334 99,386 44,517
-------- -------- -------- --------
Total Hardware Solutions 58,259 49,467 211,900 152,865
Software Solutions 6,595 5,587 21,721 17,804
-------- -------- -------- --------
Total Company $ 64,854 $ 55,054 $233,621 $170,669
-------- -------- -------- --------
Operating income (loss)
Hardware Solutions
Meter Data Collection $ 26,814 $ 21,152 $ 91,421 $ 87,757
Electricity Metering 21,514 12,834 82,018 30,156
Other unallocated costs (7,252) (5,529) (25,395) (18,225)
-------- -------- -------- --------
Total Hardware Solutions 41,076 28,457 148,044 99,688
Software Solutions (1,980) (2,731) (10,556) (19,742)
Corporate unallocated (23,120) (32,984) (91,250) (75,984)
-------- -------- -------- --------
Total Company $ 15,976 $ (7,258) $ 46,238 $ 3,962
-------- -------- -------- --------
Three Months Twelve Months
Ended Ended
December 31, December 31,
---------------------------
2005 2004 2005 2004
------ ------ ------ ------
Supplemental Information
Unit Shipments by Segment
Meter Data Collection
AMR standalone modules 1,225 875 4,300 3,700
(1)Licensed AMR (SEM meters) - - - 925
Licensed AMR (other vendors'
meters) 250 25 800 150
Electricity Metering
Total Meters 1,300 950 4,675 1,875 (3)
(1)With Itron AMR 875 400 2,250 700
With Other AMR 100 175 675 400
(2)Total Units Itron AMR 2,350 1,300 7,350 5,475
Growth in total Itron AMR
shipments 81% 34%
(1) Prior to the Electricity Metering acquisition on July 1, 2004,
revenues consisted of royalties from Schlumberger Electricity
Metering (SEM) and were reflected in Meter Data Collection segment
revenues. Subsequent to the acquisition, sales of meters with
Itron AMR are reflected in the Electricity Metering segment
revenues.
(2) Itron standalone AMR modules, Itron meters with Itron AMR, other
vendors' solid-state electricity meters with Itron AMR and
licensed AMR to SEM prior to the July 1, 2004 acquisition.
(3) In 2004, total meter sales represent sales from the July 1, 2004
acquisition date through December 31, 2004. From January 1, 2004,
through June 30, 2004, SEM shipped approximately 2.2 million
meters. Of the 2.2 million meters shipped in the first half of
2004, 925,000 were shipped with Itron AMR.
ITRON, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands) December 31, December 31,
2005 2004
----------- -----------
ASSETS
Current assets
Cash and cash equivalents $ 33,638 $ 11,624
Accounts receivable, net 104,428 90,097
Inventories 49,456 45,459
Deferred income taxes, net 23,194 22,733
Other 10,941 5,477
----------- -----------
Total current assets 221,657 175,390
Property, plant and equipment, net 77,623 59,690
Intangible assets, net 123,293 162,137
Goodwill 116,032 117,471
Deferred income taxes, net 48,955 27,252
Other 11,324 15,211
----------- -----------
Total assets $ 598,884 $ 557,151
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 46,215 $ 37,439
Wages and benefits payable 23,732 13,947
Current portion of debt 4,376 35,647
Current portion of warranty 8,497 7,243
Unearned revenue 22,758 22,991
----------- -----------
Total current liabilities 105,578 117,267
Long-term debt 160,186 239,361
Project financing debt 2,367 3,227
Warranty 6,779 6,331
Other obligations 6,440 6,535
----------- -----------
Total liabilities 281,350 372,721
Shareholders' equity
Preferred stock - -
Common stock 312,046 211,920
Accumulated other comprehensive income, net 871 954
Retained earnings (accumulated deficit) 4,617 (28,444)
----------- -----------
Total shareholders' equity 317,534 184,430
----------- -----------
Total liabilities and shareholders'
equity $ 598,884 $ 557,151
----------- -----------
ITRON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands) Year Ended December 31,
----------------------
2005 2004
--------- ---------
Operating activities
Net income (loss) $ 33,061 $ (5,257)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 51,572 38,785
Employee stock plans income tax benefits 15,146 2,594
Amortization of prepaid debt fees 5,031 1,832
Deferred income tax benefit (22,017) (6,590)
Impairments of investments, intangible
assets and other - 1,109
Acquired in-process research and development - 6,400
Other, net 2,531 659
Changes in operating assets and liabilities, net
of acquisitions:
Accounts receivable (14,183) 15,277
Inventories (3,997) (3,600)
Accounts payable and accrued expenses 4,432 3,232
Wages and benefits payable 9,768 (1,383)
Unearned revenue 156 10,952
Warranty 3,831 (8,456)
Other long-term obligations (511) (994)
Other, net (5,203) (1,505)
--------- ---------
Cash provided by operating activities 79,617 53,055
Investing activities
Proceeds from the sale of property, plant and
equipment 2,626 17
Acquisitions of property, plant and equipment (31,973) (12,788)
Business acquisitions, net of cash and cash
equivalents acquired - (253,050)
Payment of contingent purchase price for
acquisition - (1,957)
Other, net (1,224) 677
--------- ---------
Cash used in investing activities (30,571) (267,101)
Financing activities
Proceeds from borrowings 14,800 309,081
Change in short-term borrowings, net - (10,000)
Payments on debt (126,196) (74,234)
Issuance of common stock 84,727 8,338
Prepaid debt fees (391) (13,646)
Other, net 28 (109)
--------- ---------
Cash provided by (used in) financing
activities (27,032) 219,430
Increase in cash and cash equivalents 22,014 5,384
Cash and cash equivalents at beginning of period 11,624 6,240
--------- ---------
Cash and cash equivalents at end of period $ 33,638 $ 11,624
--------- ---------
ITRON, INC.
RECONCILIATIONS BETWEEN GAAP NET INCOME (LOSS) AND EBITDA
(Unaudited, in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ ------------------
2005 2004 2005 2004
-------- ------- ------- -------
GAAP net income (loss) $ 16,929 $(7,007) $33,061 $(5,257)
Adjustments to GAAP net income
(loss)
Interest income (135) (14) (302) (166)
Interest expense 3,664 4,983 18,944 13,145
Income tax benefit (4,570) (5,135) (5,533) (4,149)
Depreciation and amortization 12,787 19,859 51,572 38,785
-------- ------- ------- -------
Total adjustments 11,746 19,693 64,681 47,615
EBITDA $ 28,675 $12,686 $97,742 $42,358
-------- ------- ------- -------
In-process research and
development - 6,400 - 6,400
-------- ------- ------- -------
PRO FORMA EBITDA $ 28,675 $19,086 $97,742 $48,758
-------- ------- ------- -------
CONTACT: Itron, Inc.
Mima Scarpelli, 509-891-3565
mima.scarpelli@itron.com