Itron issues comments on AMR market growth following analyst’s report

SPOKANE, Wash., June 24, 2002 — Itron Inc., a technology provider and source of knowledge to the global energy and water industries, recently issued the following information and comments about market growth and financial performance in the wake of an analyst’s report forecasting weakness in the market for automatic meter reading (AMR) technology.

“We see absolutely no slow down in the market for AMR technology — in fact, both our own numbers and industry-wide numbers show that demand for advanced metering technology — anyway you measure it — is accelerating,” said LeRoy Nosbaum, chairman and CEO of Itron.

“Our backlog is strong, we’re off to a great start for new bookings for 2002, and we expect to see continued solid growth in the AMR part of our business for the remainder of the year and beyond. That’s why we’ve reaffirmed our guidance for strong results in 2002, and we fully expect solid growth and strong financial performance to continue in 2003.”

Nosbaum said that in light of an analyst’s report issued Thursday questioning the growth of the AMR market, as well as the sustainability of Itron’s leadership role in that market, it’s vitally important to draw on more comprehensive and objective industry data to see what’s really going on in the AMR market.

According to the Scott Report on AMR Deployments in North America, a leading industry report, AMR unit shipments to utilities increased 40.2 percent from 2000 to 2001. That follows a 26.9 percent increase from 1999 to 2000, and a 12.7 percent increase from 1998 to 1999. Some 7.7 million AMR units were shipped in 2001 compared to 5.5 million units in 2000, according to the Scott Report. “That’s a trend,” Howard Scott, author of the Scott Report, said Thursday. “There’s no reason to believe anything is slowing down; it’s actually speeding up.”

That trend is supported by Chartwell, a leading market research firm serving the utility industry. In its “AMR Report 2001,” Chartwell forecasts growth in excess of 15 percent over the next five years.

“These industry numbers reinforce what we’re seeing at Itron,” said Nosbaum. “Our growth numbers tend to be every bit as strong, if not stronger, indicating that Itron’s position as the market leader remains solid.”

Among the Itron highlights:

* In 2001 Itron shipped more than 2.9 million AMR meter modules, up from 2.2 million in 2000 and 1.9 million in 1999. That growth momentum continues as Itron shipped more than 850,000 modules in the first quarter of 2002 alone;
* Itron added 192 new utility customers that use Itron AMR technology during 2001, bringing the total number of utilities that have deployed Itron AMR systems to 871 at the beginning of 2002;
* Initial deployments of Itron AMR technology increased nearly 50 percent from January 2001 to January 2002. By comparison, initial deployments grew 46 in 1998, 87 in 1999, 54 in 2000 and 190 in 2001;
* As of March 31, 2002, Itron’s total backlog stood at $202 million; with a twelve-month backlog of $112 million. In addition, bookings for the second quarter of 2002 are running ahead of the corresponding period in the first quarter of 2002.

“As these numbers demonstrate, demand for more advanced metering technology remains strong,” said Nosbaum. “The strength of our core AMR business, combined with growth in our new business opportunities outside of AMR such as workforce management, data management and systems integration, as well as transmission and distribution system line design and services, reaffirms our guidance for strong financial results this quarter and this year.”

About Itron

Itron is a technology provider and critical source of knowledge to the global energy and water industries. More than 2,000 utilities worldwide rely on Itron technology to deliver the knowledge they require to optimize the delivery and use of energy and water.

Itron clients use this knowledge to run their businesses more efficiently, reliably and profitably, to strengthen connectivity to their customers, and to meet the new business requirements of deregulated energy markets. Itron’s solution portfolio includes automatic meter reading systems to meet the requirements of all customer classes and service environments; web-enabled workforce management solutions; as well as transmission and distribution system design solutions and services.

Itron also provides advanced software solutions and consulting services for collection, analysis and application of load profile data, including enterprise-wide data access, data warehousing, load research, complex billing and settlement, and web-based data access and exchange.

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