Badger Meter Expects Lower Second Quarter Earnings.

Business Editors

MILWAUKEE--(BUSINESS WIRE)--June 21, 2000

Badger Meter, Inc. (AMEX:BMI) today announced that it expects earnings for the second quarter of 2000 to be approximately 45 to 55% below earnings for the second quarter of 1999. Sales for the second quarter of 2000 are expected to be lower than in the second quarter of the prior year. For the second quarter of 1999, Badger Meter reported earnings of $2,384,000, or $0.73 per diluted share, and sales of $38,512,000.

The lower earnings are due to a one-time manufacturing problem and the continuation of several events from prior quarters that reduced profit margins for the period. "The majority of these items, including the manufacturing problem, were resolved during the second quarter. Therefore, we anticipate that our results for the second half of 2000 will be more consistent with those of the prior year," said James L. Forbes, chairman and chief executive officer of Badger Meter.

Forbes said the manufacturing problem was detected by the company and immediate action was taken to identify and replace those products that had already been delivered to customers. "We caught the problem early and, as a result, only a small number of products were actually installed at customer locations. However, the situation resulted in increased scrap levels and reduced margins for the quarter along with a loss of sales due to delayed deliveries while the problem was being corrected," said Forbes. "The manufacturing problem has been resolved and we do not anticipate any impact on future performance."

Other factors contributing to the lower second quarter results include the continuing impact of the financial difficulties of one of the company's connectivity partners, the effects of a freeze on certain radio frequency licenses by the Federal Communications Commission (FCC) and a fire at one of the company's principal suppliers. The supplier returned to full capacity production in May. Badger Meter received an after-tax payment of $900,000 during the second quarter as part of the company's business interruption insurance related to this event. Both the financial difficulties of the connectivity partner and the FCC issues have resulted in lost or delayed sales opportunities for the company, Forbes said.

Badger Meter is a leading marketer and manufacturer of products using flow measurement and control technology serving utility and industrial markets worldwide.

Certain statements in this news release may contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. The words "anticipate," "believe," "estimate," "expect," "think," "should," and "objective" or similar expressions are intended to identify forward-looking statements. The forward-looking statements are based on the company's current views and assumptions and involve risks and uncertainties that include, among other things: the success or failure of new product developments; the actions and financial condition of competitors and alliance partners; changes in the domestic economic conditions, including housing starts; changes in foreign economic conditions, including currency fluctuations; changes in laws and regulations; changes in customer demand; and fluctuations in the prices of and availability of purchased raw materials and parts. Some or all of these factors are beyond the company's control. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this press release and the company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Badger Meter, Inc. company news is available 24 hours a day, on-line at: http://www.badgermeter.com