Franklin Electric Co., Inc. (NASDAQ:FELE) is one of the 11 Best Water Management Stocks to Buy. On February 17, 2026, Franklin Electric Co., Inc. (NASDAQ:FELE) announced fourth-quarter 2025 net sales of $506.9 million, up from $485.7 million in the prior-year quarter. The operating income was $51.6 million, up from $43.0 million the previous year. The firm reported diluted earnings per share of $0.87, jumping from $0.72 in the fourth quarter of 2024. Franklin Electric Co., Inc. (NASDAQ:FELE) reported ne ...

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Group 1 - The Harbor Small Cap Value Fund (HASCX) returned 2.28% in Q4 2025, underperforming the Russell 2000 Value® Index, which returned 3.26% [3]

Financial Performance - Net sales for 2025 were $2.1 billion, representing a 5% increase compared to 2024, driven by acquisitions, price realization, and higher volumes[85] - Gross profit for 2025 was $755.9 million, maintaining a gross profit margin of 35.5% consistent with 2024[94] - Diluted earnings per share for 2025 was $3.22, a decrease of $0.64 from the prior year, impacted by a pension settlement charge of $41.5 million net of tax[85] - Operating income increased by 10% to $268.9 million in 2025, with significant contributions from the Distribution segment, which saw a $15.5 million increase[98] - The Company reported a net income of $148.7 million for 2025, compared to $181.6 million in 2024, reflecting the impact of the pension settlement[110] Cash Flow and Investments - Cash flows from operating activities were $238.9 million in 2025, down from $261.4 million in 2024, primarily due to changes in working capital[117] - Cash used in investing activities was $157.1 million in 2025, significantly higher than $45.6 million in 2024, mainly due to increased acquisition activity[118] - Net cash used by financing activities increased to $197.3 million in 2025 from $74.1 million in 2024, primarily due to increased stock repurchases[119] Expenses and Obligations - SG&A expenses increased to $486.2 million in 2025, with a ratio of 22.8% of net sales, down from 23.3% in 2024[96] - The Company has total contractual obligations of $302.7 million, with $167.1 million related to debt obligations due in 2026[120] - Estimated future pension and post-retirement benefit payments are approximately $6.2 million in 2026, excluding a non-current liability of $17.0 million for pension plans[121] Market Risks and Currency - The Company experienced a foreign currency transaction expense of $9.3 million in 2025, primarily due to losses associated with the Argentine Peso and Turkish Lira[108] - The Company actively monitors market risks associated with foreign currency exchange rates, interest rates, and commodity prices[138] - A hypothetical strengthening of the US Dollar by about 2% would have reduced 2025 sales by less than 1%[139] - A 10% adverse movement in prices for raw metal commodities would result in less than a 1% decrease in gross margin as a percentage of net sales[141] Pension and Tax Liabilities - Unrecognized tax benefits amount to approximately $3.0 million, with an additional liability for potential penalties and interest of $1.1 million[122] - The weighted-average discount rate for domestic pension plans decreased from 5.48% to 4.07% year-over-year, impacting liabilities[135] - A hypothetical 100 basis points increase in interest rates would have increased interest expense by $1.2 million during 2025, with $30.0 million in borrowings under the Credit Agreement[140] Acquisitions and Goodwill - The Company acquired Barnes de Colombia S.A. and PumpEng Pty Ltd in Q1 2025, contributing $48.9 million in incremental net sales[83] - The Company completed its annual impairment tests of goodwill and indefinite-lived trade names, determining that fair values were substantially in excess of carrying values[131]

Chief Financial Officer Jennifer Wolfenbarger reported full-year 2025 fully diluted EPS of $3.22, down from $3.86 in 2024. She said the result was negatively impacted by a $41.5 million pension settlement charge net of tax benefit, or $0.91 per share, and $0.01 of restructuring charges. On an adjusted basis, diluted EPS was $4.14 in 2025 versus $3.92 in 2024, an increase of 6%.Beyond the reported figures, management emphasized initiatives aimed at accelerating growth and improving margins. Ruzynski said the ...

分组1 - Franklin Electric reported quarterly earnings of $0.87 per share, missing the Zacks Consensus Estimate of $0.89 per share, but showing an increase from $0.72 per share a year ago, resulting in an earnings surprise of -2.61% [1] - The company posted revenues of $506.86 million for the quarter ended December 2025, which was below the Zacks Consensus Estimate by 1.49%, and an increase from $485.74 million year-over-year [2] - Over the last four quarters, Franklin Electric has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] 分组2 - The stock has increased approximately 14% since the beginning of the year, while the S&P 500 has declined by 0.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.86 on revenues of $486.5 million, and for the current fiscal year, it is $4.71 on revenues of $2.23 billion [7] - The Manufacturing - Electronics industry, to which Franklin Electric belongs, is currently ranked in the top 32% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Franklin Electric (NasdaqGS:FELE) Q4 2025 Earnings call February 17, 2026 09:00 AM ET Company ParticipantsDean Cantrell - Director of Investor RelationsJennifer Wolfenbarger - CFOJoe Ruzynski - CEOConference Call ParticipantsBryan Blair - Managing Director and Research AnalystMatt Summerville - Managing Director and Senior Research AnalystMike Halloran - Senior Research AnalystRyan Connors - Managing Director and Research AnalystWalter Liptak - Industrial AnalystOperatorHello, and welcome to the Franklin El ...

Financial Data and Key Metrics Changes - Full year 2025 sales increased by 5.4% to $2.1 billion, with segment operating income up 10% to $269 million [5][17][18] - Fourth quarter 2025 sales were $506.9 million, a year-over-year increase of 4.4%, with operating income rising 20% to $51.6 million [12][13][15][16] - Adjusted diluted earnings per share for 2025 was $4.14, a 6% increase from $3.92 in 2024, while GAAP diluted EPS was $3.22, down from $3.86 due to a pension settlement charge [12][17] Business Line Data and Key Metrics Changes - Global Water Systems sales increased by 6% for the full year 2025, driven by strong pricing and acquisitions, while operating income was up 5.2% [22][23] - Energy Systems sales rose by 9% to $299 million for the full year, with operating income increasing by 6% to $99 million [24] - Distribution segment sales increased by 2% to $700.7 million, with operating income up 64% to $39.8 million, reflecting margin enhancement initiatives [25] Market Data and Key Metrics Changes - Water Systems in the U.S. and Canada saw a 4% decline in Q4 due to softer HVAC markets, while international sales increased by 15% [19] - Energy Systems sales outside the U.S. and Canada increased by 19%, indicating strong international demand [20] - Distribution segment's operating income margin improved by 300 basis points to 3.3% in Q4, driven by higher volumes and price realization [21] Company Strategy and Development Direction - The company aims to position itself as an innovation and growth leader, with over 35 new products expected to generate $160 million in revenue by year three [8] - Focus on enhancing margins through a value acceleration office, utilizing AI and process engineering to streamline operations and manage costs [10][31] - The company is committed to strategic acquisitions to fill portfolio gaps and enhance market reach, with a healthy M&A pipeline anticipated for 2026 [60][61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a turbulent global market, with a healthy order book and backlog as they move into 2026 [5][6] - The outlook for 2026 includes expected sales growth of 3% to 4% across segments, with adjusted EPS guidance of $4.40 to $4.60 [27][28] - Management noted that the company is well-positioned to capitalize on urbanization and increasing demand for high-quality water and energy solutions [29][30] Other Important Information - The company completed approximately $120 million in acquisitions and $160 million in share buybacks in 2025, maintaining a strong balance sheet [6][26] - A quarterly cash dividend of $0.28 was announced, marking the 34th consecutive year of dividend increases [26] Q&A Session Summary Question: Organic outlook across segments for revenue guidance - Management indicated a 3%-5% growth outlook for the water business, with a mix of volume and price increases expected [36] Question: Specifics on water business end markets and geographic demand - Management noted stabilization in HVAC markets and expected growth in the U.S. and Europe, with no pronounced weaknesses anticipated [40][41] Question: Impact of HVAC on water segment performance - Management clarified that HVAC weakness was isolated to Q4 and expected normalization in early 2026 [45] Question: Energy segment margin challenges - Management acknowledged tariff impacts and indicated expectations for margin recovery in 2026 [50] Question: Integration progress of recent acquisitions - Management reported smooth integration of PumpEng and Barnes, with positive growth synergies anticipated for 2026 [58][59] Question: Value acceleration office and its impact - Management highlighted the office's focus on process reengineering and growth, with expected benefits in productivity and efficiency [64][66]

Financial Data and Key Metrics Changes - Full year 2025 consolidated sales increased by 5.4% to $2.1 billion, driven by favorable pricing, organic volume growth, and recent acquisitions [16][5] - Full year 2025 consolidated operating income rose by 10% to $269 million, with an operating income margin of 12.6%, up 50 basis points from the prior year [17][15] - Fourth quarter 2025 consolidated sales were $506.9 million, a year-over-year increase of 4.4%, with operating income up 20% to $51.6 million [13][15] Business Line Data and Key Metrics Changes - Global Water Systems sales increased by 6% for the full year 2025, with U.S. and Canada sales up 3% and international sales up 10% [21][22] - Energy Systems sales for the full year 2025 rose by 9% to $299 million, with operating income increasing by 6% to $99 million [23] - Distribution segment sales increased by 2% to $700.7 million, with operating income up 64% to $39.8 million, reflecting margin enhancement initiatives [24][25] Market Data and Key Metrics Changes - Water Systems in the U.S. and Canada experienced a 4% decline in Q4 2025 due to softer HVAC markets, while international sales increased by 15% [18] - Energy Systems sales outside the U.S. and Canada increased by 19%, indicating strong international demand [19] - Distribution segment sales growth was primarily driven by higher volumes and price realization [20] Company Strategy and Development Direction - The company aims to position itself as an innovation and growth leader, with over 35 new products expected to generate $160 million in revenue by year three [7] - Focus on enhancing margins through the launch of a value acceleration office, utilizing AI and process engineering to streamline operations [10][31] - The company is committed to pursuing M&A opportunities to enhance its market position and expand its portfolio [31][63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a turbulent global market, with a healthy order book and backlog as they move into 2026 [5][6] - The outlook for 2026 includes expected sales in the range of $2.17 billion to $2.24 billion, with adjusted EPS projected between $4.40 and $4.60 [27][28] - Management noted that the company does not anticipate pronounced weakness in any markets, with expectations for stable growth across regions [41] Other Important Information - The company completed approximately $120 million in acquisitions and $160 million in share buybacks during 2025, maintaining a strong balance sheet [6][25] - A quarterly cash dividend of $0.28 was announced, marking the 34th consecutive year of dividend increases [26] Q&A Session Summary Question: What is the organic outlook across the three segments for the revenue guide? - Management indicated a growth rate of 3%-5% for the water business, with a mix of volume and price contributing to this growth [37] Question: Can you provide insights on the HVAC headwind in Q4? - Management noted that the HVAC weakness was isolated to the end of Q4 and is expected to normalize [47] Question: What is the outlook for large dewatering? - Management expects healthy orders in the dewatering business, despite a slight deceleration in Q4 due to capital spending patterns [49] Question: How is the integration of Barnes and PumpEng progressing? - Integration is ahead of track, with positive growth synergies expected in 2026 [59] Question: What are the opportunities for margin improvement across product lines? - Management highlighted opportunities in the core submersible business and improvements in logistics and customer service efficiency [76][78]

Q4/FY 2025 Earnings Presentation February 17, 2026 2 • Strong Q4 & FY results in all three segments • Sales growth across end markets. Good pricing discipline and execution. • Disciplined strategy execution led to solid growth in softer markets. • Healthy Q4 order trends and backlog. A positive 2026 outlook. • Another year of strong cash conversion. A healthy balance sheet to invest for growth. • Value Acceleration Office launched. • Well-positioned in the face of tariffs and global uncertainty. OUR VALUE C ...