Badger Meter Reports Fourth Quarter and Year-End Results.

Business Editors

MILWAUKEE--(BUSINESS WIRE)--Jan. 31, 2002

Badger Meter, Inc. (AMEX: BMI) today reported results for the fourth quarter and year ended December 31, 2001.

Net sales for 2001 were $138,537,000, down 5.4% from sales of $146,389,000 in 2000. Net earnings for 2001 were $3,364,000, a 51.5% decrease from earnings of $6,941,000 for the prior year. Diluted earnings per share were $1.03 in 2001, a 48.5% decrease from earnings of $2.00 per share in 2000.

For the fourth quarter of 2001, net sales were $33,559,000, a 1.7% decrease from sales of $34,129,000 in the fourth quarter of 2000. Net earnings were $950,000 for the fourth quarter of 2001, down 13.8% from earnings of $1,102,000 for the same period in the prior year. Diluted earnings per share were $0.29 for the fourth quarter of 2001, a 9.4% decrease from earnings of $0.32 per share for the comparable prior period.

"This was a challenging year for Badger Meter, as we experienced pricing pressures and decreased volumes across the business as a result of the general economic slowdown and continuing delays in the sales cycle for automatic meter reading systems. In addition, sales for 2000 included approximately $5,600,000 of revenues from product lines that were divested in 2001. This accounts for more than half of the decrease in sales for the year," said James L. Forbes, chairman and chief executive officer of Badger Meter.

"Although our results were not what we would have liked to report, Badger Meter came through this difficult year as a solid company with a strong balance sheet and excellent growth potential," said Forbes. "The company remained profitable in all four quarters. We generated strong cash flow of $8,600,000 for the year. We reduced expenses by $5,000,000 during 2001, without major employee layoffs. And we maintained the annual dividend rate of $1.00 per share."

"During 2001, we took a number of steps to position the company for improved performance as the economy recovers," said Richard A. Meeusen, president of Badger Meter. "We invested in a new facility in the Czech Republic to meet the increasing demand for our Magnetoflow(R) meter line in the U.S. and Europe. We reorganized our sales force into a major customer, regional and distributor structure in response to changes in the market including the ongoing consolidation in the industry. And we significantly reduced expenses by maintaining strict cost controls, streamlining certain functions and realizing savings from the divestiture of non-core product lines."

"We are encouraged by a number of positive developments in our business. We received several large orders in 2001 from utilities in major cities including Houston, Denver, Long Island, NY and Monterrey, Mexico. We continue to invest in product development and expect to introduce several new utility and industrial products in 2002. We have the resources and sufficient manufacturing capacity to support our future growth," said Meeusen. "We believe we have the elements in place to achieve increased sales and earnings in 2002."

Badger Meter is a leading marketer and manufacturer of flow measurement and control technology, developed both internally and with other technology companies, as well as the leader in providing digital connectivity to leading AMR technologies. Its products are used to measure and control the flow of liquids in a variety of applications.

    Certain statements contained in the pages of this document, as
well as other information provided from time to time by the company or
its employees, may contain forward looking statements that involve
risks and uncertainties that could cause actual results to differ
materially from those in the forward looking statements. The words
"anticipate," "believe," "estimate," "expect," "think," "should" and
"objective" or similar expressions are intended to identify forward
looking statements. The forward looking statements are based on the
company's current views and assumptions and involve risks and
uncertainties that include, among other things:

    -   the success or failure of new product offerings
    -   the actions and financial condition of competitors and
        alliance partners
    -   changes in competitive pricing and bids in the marketplace
    -   changes in domestic 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 document and the company
undertakes no obligation to publicly update such forward looking
statements to reflect subsequent events or circumstances.

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


                          BADGER METER, INC.
                 CONSOLIDATED STATEMENT OF OPERATIONS


                   Twelve Months Ended December 31,

                                            2001               2000
                                            ----               ----
Net sales                               $138,537,000      $146,389,000
Gross margin                             $44,495,000       $53,014,000
Earnings before income taxes              $5,010,000       $10,727,000
Provision for income taxes                $1,646,000        $3,786,000
Net earnings                              $3,364,000        $6,941,000
Earnings per share:
     Basic                                     $1.06             $2.10
     Diluted                                   $1.03             $2.00
Shares used in computation of:
     Basic                                 3,163,096         3,308,150
     Diluted                               3,274,844         3,470,308


                    Three Months Ended December 31,

                                            2001               2000
                                            ----               ----
Net sales                                $33,559,000       $34,129,000
Gross margin                             $10,158,000       $12,252,000
Earnings before income taxes              $1,243,000        $1,411,000
Provision for income taxes                  $293,000          $309,000
Net earnings                                $950,000        $1,102,000
Earnings per share:
     Basic                                     $0.30             $0.34
     Diluted                                   $0.29             $0.32
Shares used in computation of:
     Basic                                 3,150,475         3,275,748
     Diluted                               3,229,058         3,420,538