Financials are down... but they are diversified and should withstand the long haul. Drop to severe in PPS IMO for these results... may recover.
Check the 10-Q:
"Itron North America: Revenues decreased $11.5 million, or 7%, in the third quarter of 2007, and $31.1 million, or 6%, in the nine months ended September 30, 2007, compared with the same periods in 2006. Shipments of electricity meters decreased 27% and 33% for the three and nine months ended September 30, 2007, compared with the same periods in 2006, respectively. During the third quarter and first nine months of 2006, we shipped over 200,000 and 1.9 million meters under the Progress Energy contract, respectively. This accelerated delivery schedule, which was substantially complete at the end of 2006, increased our historical electricity meter production levels, resulting in increased revenues and higher overhead absorption. Due to the timing of gas and water AMR system contracts, shipments of AMR modules decreased 15% for the three months ended September 30, 2007, while shipments remained relatively constant for the nine months ended September 30, 2007, compared with the same periods last year, respectively. Gross margin decreased one percentage point for both the three and nine months ended September 30, 2007, compared with the same periods in 2006, as a result of product mix and lower overhead absorption.
No single customer represented more than 10% of Itron North America operating segment revenues for the three and nine months ended September 30, 2007. One customer, Progress Energy, accounted for 11% and 18% of the Itron North America operating segment revenues for the three and nine months ended September 30, 2006, respectively.
Itron North America operating expenses as a percentage of revenues were 28% and 30% for the three and nine months ended September 30, 2007, compared with 28% and 27% for the same periods in 2006, respectively. Research and development costs have increased as a percentage of revenue from 9% in 2006 to approximately 11% in 2007 as a result of the development of our AMI technologies.
Actaris: Actaris was acquired on April 18, 2007. Revenues were $280.8 million for the three months ended September 30, 2007 and $530.5 million from the date of acquisition to September 30, 2007 with 40%, 32% and 28% from electricity, gas and water meter products and services, respectively. Gross margin was 30% for the third quarter of 2007 and 27% from the date of acquisition to September 30, 2007. Business combination accounting rules require the valuation of inventory on hand at the acquisition date to equal the sales price, less costs to complete and a reasonable profit allowance for selling effort. Accordingly, the historical cost of inventory acquired was increased by $16.0 million, which lowered gross margins by three percentage points from the date of acquisition to September 30, 2007. The acquired inventory was sold prior to June 30, 2007, resulting in no gross margin impact in the third quarter.
No single customer represented more than 10% of the Actaris operating segment revenues for the three months ended September 30, 2007 or from the period April 18, 2007 to September 30, 2007.
Operating expenses for Actaris were $64.0 million for the three months ended September 30, 2007 and $157.0 million for the period from acquisition to September 30, 2007 of which $269,000 and $35.8 million represented in-process research and development (IPR&D) related to the acquisition for each of the respective periods. Operating expenses as a percentage of revenues were 23% for the three months ended September 30, 2007, and 30% from the date of acquisition to September 30, 2007. We anticipate that operating expenses for Actaris will be lower as a percentage of revenue, compared with Itron North America, as a result of more meter product sales versus meter system sales, partially offset by higher amortization expense of intangible assets.
Corporate unallocated: Operating expenses not directly associated with an operating segment are classified as "Corporate unallocated." These expenses, as a percentage of total Company revenues, were 2% for the three and nine months ended September 30, 2007, compared with 4% in each of the same periods of 2006."
