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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 23, 2024

FRANKLIN ELECTRIC CO., INC.
(Exact name of registrant as specified in its charter)
Indiana   0-362   35-0827455
(State of incorporation)   (Commission File Number)   (IRS employer identification no.)
9255 Coverdale Road
Fort Wayne, Indiana 46809
(Address of principal executive offices) (Zip code)

(260) 824-2900
(Registrant's telephone number, including area code)
 
Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $0.10 par value FELE NASDAQ Global Select Market
(Title of each class) (Trading symbol) (Name of each exchange on which registered)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02. Results of Operations and Financial Condition

On July 23, 2024, Franklin Electric Co., Inc. issued a press release announcing its earnings for the second quarter of 2024. A copy of the release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference. This Current Report on Form 8-K and the press release attached hereto are being furnished pursuant to Item 2.02 of Form 8-K.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits:
Exhibit Number Description
99.1
101 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
104 The cover page from this Current Report on Form 8-K, formatted as Inline XBRL



SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FRANKLIN ELECTRIC CO., INC.
(Registrant)
Date: July 23, 2024
 By /s/ Jeffery L. Taylor
Jeffery L. Taylor
Vice President, Chief Financial Officer
(Principal Financial and Accounting Officer)


EX-99.1 2 a20240723ex991earningsrele.htm EX-99.1 Document


Exhibit 99.1
NEWS RELEASE FOR IMMEDIATE DISTRIBUTION


FRANKLIN ELECTRIC REPORTS SECOND QUARTER 2024 RESULTS

Second Quarter 2024 Highlights
•Consolidated net sales of $543.3 million, a decrease of 5% to the prior year, with lower sales across all three segments
•Operating income was $79.1 million with operating margin of 14.6%
•GAAP fully diluted earnings per share (EPS) was $1.26

Fort Wayne, IN – July 23, 2024 – Franklin Electric Co., Inc. today announced its second quarter financial results for fiscal year 2024.

Second quarter 2024 net sales were $543.3 million, compared to second quarter 2023 net sales of $569.1 million. Second quarter 2024 operating income was $79.1 million, compared to second quarter 2023 operating income of $80.9 million. Second quarter 2024 EPS was $1.26, versus EPS in the second quarter 2023 of $1.27.

“The Franklin team achieved solid results in the second quarter, marking one of the strongest quarters from an earnings perspective in Franklin’s history. We continue to deliver margin expansion on sales below the record levels reached in the prior year period. While unfavorable weather continued to adversely impact sales, strong operational performance in the Water Systems and Fueling Systems segments helped offset this headwind,” commented Gregg Sengstack, Franklin Electric’s Executive Chairperson.

“Franklin Electric’s diverse product line, customer base, and geographic exposure continue to prove resilient despite macroeconomic, geopolitical, and weather-related pressures. These factors, along with our great people and strong working capital position, give us confidence as we look towards the back half of the year.”

“It has been an incredible journey working with the exceptional team here at Franklin Electric. I look forward to continuing to support our mission and our new CEO, Joe Ruzynski, in my position as Executive Chairperson.” concluded Mr. Sengstack.

Segment Summaries

Water Systems net sales were $315.6 million in the second quarter, a decrease of $6.1 million or 2 percent compared to the record second quarter sales of 2023. The sales decrease was driven by lower sales of large dewatering pumps, which had a record quarter last year, partially offset by sales increases in all other surfaces products, water treatment products and groundwater products. Water Systems operating income in the second quarter 2024 was $62.3 million, a new quarterly record for any quarter. Second quarter 2023 Water Systems operating income was $50.8 million.

Distribution net sales were $190.5 million, a decrease of $2.6 million or 1 percent compared to the second quarter 2023. Sales decreases were driven by the continued negative impact of wet weather across the U.S. that has delayed contractor installations, partially offset by sales from a recent acquisition. The Distribution segment operating income in the second quarter 2024 was $9.8 million. Second quarter 2023 Distribution operating income was $17.8 million.



Fueling Systems net sales were $73.1 million in the second quarter 2024, a decrease of $7.3 million or 9 percent compared to the second quarter 2023. Sales decreases were driven by lower volumes. Fueling Systems operating income in the second quarter 2024 was $26.0 million. Second quarter 2023 Fueling Systems operating income was $26.7 million.

2024 Guidance

The Company is maintaining its sales guidance for full year 2024 to be in the range of $2.10 billion to $2.17 billion and reducing its EPS guidance for full year 2024 to be in the range of $4.16 to $4.34 which incorporates the Company’s first half performance and its outlook for continued solid execution in the second half while maintaining strong margins similar to the first half.

Earnings Conference Call

A conference call to review earnings and other developments in the business will commence at 9:00 am ET. The second quarter 2024 earnings call will be available via a live webcast. The webcast will be available in a listen only mode by going to:

https://edge.media-server.com/mmc/p/f8j7t4wj

For those interested in participating in the question-and-answer portion of the call, please register for the call at the link below.

https://register.vevent.com/register/BI8d56cfdc94aa49358360ba12cb42e3e2

All registrants will receive dial-in information and a PIN allowing them to access the live call. It is recommended that you join 10 minutes prior to the event start (although you may register and dial in at any time during the call).

A replay of the conference call will be available from Tuesday, July 23, 2024, through 9:00 am ET on Tuesday, July 30, 2024, by visiting the listen-only webcast link above.

Forward Looking Statements

"Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein, including those relating to market conditions or the Company’s financial results, costs, expenses or expense reductions, profit margins, inventory levels, foreign currency translation rates, liquidity expectations, business goals and sales growth, involve risks and uncertainties, including but not limited to, risks and uncertainties with respect to general economic and currency conditions, various conditions specific to the Company’s business and industry, weather conditions, new housing starts, market demand, competitive factors, changes in distribution channels, supply constraints, effect of price increases, raw material costs, technology factors, integration of acquisitions, litigation, government and regulatory actions, the Company’s accounting policies, future trends, epidemics and pandemics, and other risks which are detailed in the Company’s Securities and Exchange Commission filings, included in Item 1A of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2023, Exhibit 99.1 attached thereto and in Item 1A of Part II of the Company’s Quarterly Reports on Form 10-Q. These risks and uncertainties may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements made herein are based on information currently available, and the Company assumes no obligation to update any forward-looking statements.





About Franklin Electric

Franklin Electric is a global leader in the production and marketing of systems and components for the movement of water and energy. Recognized as a technical leader in its products and services, Franklin Electric serves customers around the world in residential, commercial, agricultural, industrial, municipal, and fueling applications. Franklin Electric is proud to be named in Newsweek’s lists of America’s Most Responsible Companies and Most Trustworthy Companies for 2023 and America’s Climate Leaders 2023 by USA Today.

Franklin Electric Contact:

Jeffery L. Taylor
Franklin Electric Co., Inc.
InvestorRelations@fele.com


FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
Second Quarter Ended Six Months Ended
June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023
Net sales $ 543,258  $ 569,181  $ 1,004,158  $ 1,053,732 
Cost of sales 343,461  380,700  640,781  702,986 
Gross profit 199,797  188,481  363,377  350,746 
Selling, general, and administrative expenses 120,648  107,429  236,292  216,964 
Restructuring expense —  149  —  273 
Operating income 79,149  80,903  127,085  133,509 
Interest expense (1,976) (4,178) (3,424) (7,325)
Other income, net 184  1,179  890  1,588 
Foreign exchange expense (436) (3,571) (5,316) (5,615)
Income before income taxes 76,921  74,333  119,235  122,157 
Income tax expense 17,590  14,173  26,812  24,421 
Net income $ 59,331  $ 60,160  $ 92,423  $ 97,736 
Less: Net income attributable to noncontrolling interests (232) (560) (365) (811)
Net income attributable to Franklin Electric Co., Inc. $ 59,099  $ 59,600  $ 92,058  $ 96,925 
Earnings per share:
Basic $ 1.28  $ 1.29  $ 1.99  $ 2.09 
Diluted $ 1.26  $ 1.27  $ 1.97  $ 2.06 



FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
June 30, 2024 December 31, 2023
ASSETS
Cash and cash equivalents $ 58,104  $ 84,963 
Receivables (net) 299,185  222,418 
Inventories 525,435  508,696 
Other current assets 35,972  37,718 
Total current assets 918,696  853,795 
Property, plant, and equipment, net 224,196  229,739 
Lease right-of-use assets, net 63,270  57,014 
Goodwill and other assets 578,184  587,574 
Total assets $ 1,784,346  $ 1,728,122 
LIABILITIES AND EQUITY
Accounts payable $ 175,553  $ 152,419 
Accrued expenses and other current liabilities 109,888  104,949 
Current lease liability 18,274  17,316 
Current maturities of long-term debt and short-term borrowings 42,375  12,355 
Total current liabilities 346,090  287,039 
Long-term debt 87,242  88,056 
Long-term lease liability 43,638  38,549 
Income taxes payable non-current —  4,837 
Deferred income taxes 29,529  29,461 
Employee benefit plans 29,931  35,973 
Other long-term liabilities 21,886  33,914 
Redeemable noncontrolling interest 1,134  1,145 
Total equity 1,224,896  1,209,148 
Total liabilities and equity $ 1,784,346  $ 1,728,122 



FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
(In thousands)
June 30, 2024 June 30, 2023
Cash flows from operating activities:
Net income $ 92,423  $ 97,736 
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization 27,690  26,259 
Non-cash lease expense 10,105  8,523 
Share-based compensation 7,015  6,410 
Other 4,315  7,896 
Changes in assets and liabilities:
Receivables (82,828) (70,725)
Inventory (23,982) (24,125)
Accounts payable and accrued expenses 13,171  (3,880)
Operating leases (10,314) (8,706)
Income taxes-U.S. Tax Cuts and Jobs Act (3,870) (2,902)
Other 1,278  6,540 
Net cash flows from operating activities 35,003  43,026 
Cash flows from investing activities:
Additions to property, plant, and equipment (19,445) (20,241)
Proceeds from sale of property, plant, and equipment 418  — 
Acquisitions and investments (1,151) (6,641)
Other investing activities 21  2 
Net cash flows from investing activities (20,157) (26,880)
Cash flows from financing activities:
Net change in debt 29,183  32,171 
Proceeds from issuance of common stock 4,302  9,010 
Purchases of common stock (47,895) (25,541)
Dividends paid (23,980) (20,872)
Deferred payments for acquisitions (348) (186)
Net cash flows from financing activities (38,738) (5,418)
Effect of exchange rate changes on cash and cash equivalents (2,967) (3,291)
Net change in cash and cash equivalents (26,859) 7,437 
Cash and cash equivalents at beginning of period 84,963  45,790 
Cash and cash equivalents at end of period $ 58,104  $ 53,227 






Key Performance Indicators: Net Sales Summary

Net Sales
(in millions) United States & Canada Latin America Europe, Middle East & Africa Asia Pacific Total Water Fueling Distribution Other/Elims Consolidated
Q2 2023 $ 202.9  $ 42.0  $ 54.6  $ 22.2  $ 321.7  $ 80.4  $ 193.1  $ (26.1) $ 569.1 
Q2 2024 $ 193.6  $ 41.8  $ 56.0  $ 24.2  $ 315.6  $ 73.1  $ 190.5  $ (35.9) $ 543.3 
Change $ (9.3) $ (0.2) $ 1.4  $ 2.0  $ (6.1) $ (7.3) $ (2.6) $ (9.8) $ (25.8)
% Change (5) % —  % 3  % 9  % (2) % (9) % (1) % (5) %
Foreign currency translation, net* $ (0.3) $ (1.2) $ (2.6) $ (0.8) $ (4.9) $ (0.1) $ —  $ (5.0)
% Change —  % (3) % (5) % (4) % (2) % —  % —  % (1) %
Acquisitions $ 4.9  $ —  $ —  $ —  $ 4.9  $ —  $ 4.7  $ 9.6 
% Change 2  % —  % —  % —  % 2  % —  % 2  % 2  %
Volume/Price $ (13.8) $ 1.0  $ 3.9  $ 2.8  $ (6.1) $ (7.2) $ (7.3) $ (9.8) $ (30.4)
% Change (7) % 2  % 7  % 13  % (2) % (9) % (4) % 38  % (5) %

*The Company has presented local currency price increases used to offset currency devaluation in the Argentina and Turkey hyperinflationary economies within the foreign currency translation, net row above.

Key Performance Indicators: Operating Income and Margin Summary

Operating Income and Margins
(in millions)
For the Second Quarter 2024
Water Fueling Distribution Other/Elims Consolidated
Operating Income/(Loss) $ 62.3  $ 26.0  $ 9.8  $ (19.0) $ 79.1 
% Operating Income To Net Sales 19.7  % 35.6  % 5.1  % 14.6  %
Operating Income and Margins
(in millions)
For the Second Quarter 2023
Water Fueling Distribution Other/Elims Consolidated
Operating Income/(Loss) $ 50.8  $ 26.7  $ 17.8  $ (14.4) $ 80.9 
% Operating Income To Net Sales 15.8  % 33.2  % 9.2  % 14.2  %