‘Times are good’ at Itron

LeRoy Nosbaum had to smile during Itron Inc.’s annual meeting Tuesday. The company’s financial numbers were golden, having hit record levels and its stock price has soared.

“When times are good, these meetings are pretty easy to hold,” Nosbaum said after the hour-long meeting at the company’s headquarters in Spokane Valley.

After launching a PowerPoint slide showing last year’s sales and market gains, he turned and smiled to about 75 people in the room and said, “If I was smart, I’d just sit down now.”

Total 2005 revenue was $553 million, up 34 percent from $400 million the previous year. Earnings per share in 2005 rose to $1.84 from 93 cents, a 98 percent one-year leap.

Operating cash flow in 2005 was $79.6 million, up from $53 million the prior year. That money helped the company wipe out variable-interest debt, plus allowed Itron to spend about $15million to relocate to a larger building in Liberty Lake later this year, said Nosbaum.

“It’s been an incredible year,” he said, “and a good start to 2006.” Company officials have issued statements predicting total sales in the $610 million to $620 million range this year.

Itron’s share price the past year has zoomed from around $36 to $70.99 Tuesday. Market capitalization reached $1.7 billion this month, from $510 million in late 2004.

“One point seven billion dollars. Sounds kind of nice, doesn’t it?” Nosbaum asked the room.

Industry analysts say the strong showing is due to Itron’s successful acquisition of the electricity metering division of Schlumberger Limited. That purchase in 2004, analysts agree, has played a key role in Itron becoming the dominant provider of meter equipment and software to the water, gas and electric utility industries.

But Nosbaum said Itron can’t rely on its North American sales to maintain its momentum.

Even though the company has more opportunities in the U.S. market, Itron’s big push will be on boosting sales overseas, he said.

As utilities in Asia, Africa, the Middle East, Europe and South America focus on efficiencies, the company’s options multiply exponentially in terms of market reach and revenue, said Nosbaum.

“It’s also a bit of a beachhead strategy,” he continued. Competitors have the same idea and are already working hard to increase their market share with overseas customers.

“Basically,” he said, “it’s the right time for us to move. If we wait too long, it won’t be as easy later.”