Itron Shake-Up Proves To Be A Profitable Move

A reorganized and refocused Itron Inc. will turn a profit in 2000 after reporting losses in three of the past four years, President LeRoy Nosbaum told company shareholders Wednesday.

The $1.8 million in net income reported for the first quarter was a breakthrough after a series of difficult decisions last year, he said.

“1999 was a change year, a transitional year, for Itron,” said Nosbaum, who became chief executive officer in March after Michael Chesser left the company to take a similar post at GPU Energy in Pennsylvania.

Chesser joined Itron in May 1999. In September, he announced a restructuring at the Spokane maker of meter-reading equipment that resulted in closing three research and development facilities, consolidation of most manufacturing to Minnesota, the departure of several longtime executives and layoffs involving about 200 employees.

Chesser remains on Itron’s board of directors.

Nosbaum said Itron has been divided into business units with distinct responsibilities: electricity, natural gas, water, international, and energy information systems.

Expansion of Itron’s electricity metering business, long the company’s mainstay, has been slowed while utilities determine what kind of role they want to take in the evolving deregulated marketplace, he said.

Meantime, Nosbaum said, Itron is testing products to enable customers to use distribution systems more efficiently.

He said North Carolina-based Energy Information Services, a subsidiary, already performs some of those functions for high-voltage transmission systems and business and commercial customers.

“This is the business where we’re taking advantage of chaos in the industry,” he said.

Nosbaum said remote meter reading has barely tapped the potential of the natural gas and water markets. Itron has done large meter installations in Philadelphia and Houston and has a contract to do another in Denver, he said.

Nosbaum said Itron has drastically overhauled its international business to staunch losses. In the future, he said, Itron will stress using strategic partnerships to build sales.

That approach will also be applied domestically as Itron works to grow its place in a market for all energy measuring and control services that will total about $50 billion, he said.

Nosbaum said Itron-made equipment now touches $200 billion in energy transactions.

“That gives us a powerful base from which to spring,” he said.