Core Insights - Franklin Electric Co., Inc. has appointed Daniela Williams as the new Chief Human Resources Officer (CHRO), who brings extensive experience in driving growth for global organizations [1][2][3] Company Overview - Franklin Electric is a global leader in the production and marketing of systems and components for the movement of water and energy, serving various sectors including residential, commercial, agricultural, industrial, municipal, and fueling applications [4] - The company has received multiple recognitions, including being listed in Newsweek's America's Most Responsible Companies 2024 and USA Today's America's Climate Leaders 2024 [4] Leadership and Strategy - In her role, Williams will set the strategic direction for talent acquisition and management, overseeing employee relations, compensation, benefits, development, and compliance [2] - Williams has a strong background in HR technology, talent development, and global workforce strategy, which will be critical for Franklin Electric's future growth initiatives [3] - Williams previously led HR functions and global talent acquisition at Visteon Corporation, where she also initiated a Women's Leadership Program [3][4] Commitment to Growth - Williams emphasized her focus on supporting decisions that contribute to growth, profitability, and long-term success, aligning with Franklin Electric's dedication to fostering talent [4]

Company Announcement - Franklin Electric Co., Inc. has appointed Jennifer Wolfenbarger as Chief Financial Officer (CFO) and Chief Accounting Officer, aiming to shape the company's financial future and oversee fiscal accountability [1][3] Executive Background - Wolfenbarger has held divisional CFO roles at notable manufacturing companies such as Caterpillar, Stryker, and Owens Corning, where she managed strategic planning and financial reporting for a $4 billion global insulation business [2][3] Leadership Perspective - CEO Joe Ruzynski praised Wolfenbarger's exceptional experience and value-driven approach, highlighting her potential to enhance continuous improvement within the company [3] Community Engagement - Throughout her career, Wolfenbarger has contributed to her community by serving as Treasurer on not-for-profit boards and mentoring at Indiana University's Kelley School of Business [3] Company Overview - Franklin Electric is a global leader in producing and marketing systems and components for water and energy movement, serving various sectors including residential, commercial, and industrial applications [4] Recognition - The company has received accolades such as being listed in Newsweek's America's Most Responsible Companies 2024 and Best Places to Work in Indiana 2024, reflecting its commitment to corporate responsibility and employee satisfaction [4]

Core Points - Franklin Electric Co., Inc. has successfully completed a stock purchase transaction involving 1,200,000 shares at a price of $86.78 per share, reflecting the volume-weighted average price over the preceding five trading days [1] - The transaction was made to provide liquidity for the estate of Patricia Schaefer, who recently passed away, and demonstrates the company's confidence in its financial health and future prospects [2] - The Board of Directors has approved an increase in the company's share repurchase authorization by 1,200,000 shares, allowing for a total of 1,126,635 shares to be repurchased post-transaction [2] Company Overview - Franklin Electric is a global leader in the production and marketing of systems and components for the movement of water and energy, serving various sectors including residential, commercial, agricultural, industrial, municipal, and fueling applications [3] - The company has received recognition in multiple categories, including Newsweek's lists of America's Most Responsible Companies 2024 and Greenest Companies 2025, as well as being named one of the Best Places to Work in Indiana 2024 [3]

FORT WAYNE, Ind., May 08, 2025 (GLOBE NEWSWIRE) -- The Board of Directors of Franklin Electric Co., Inc. (NASDAQ: FELE) has elected Jennifer L. Sherman, President and Chief Executive Officer of Federal Signal Corporation, as Chairperson effective as of May 2, 2025 for a term expiring at the 2026 Annual Meeting of Shareholders. Ms. Sherman has been a Director of the Company since 2015. Joe Ruzynski, the Company’s Chief Executive Officer, commented: “I want to congratulate Jennifer on her election as Chairper ...

Part I [Financial Information](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion for Q1 2025 [Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents Franklin Electric's unaudited Q1 2025 consolidated financial statements and explanatory notes [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q1 2025 net sales declined to $455.2 million, with operating income at $44.1 million and diluted EPS at $0.67 | Financial Metric | Q1 2025 (In thousands) | Q1 2024 (In thousands) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $455,247 | $460,900 | -1.2% | | Gross Profit | $163,903 | $163,580 | +0.2% | | Operating Income | $44,101 | $47,936 | -8.0% | | Net Income Attributable to Franklin Electric | $30,962 | $32,959 | -6.1% | | Diluted EPS | $0.67 | $0.70 | -4.3% | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets reached $1.93 billion by March 31, 2025, with liabilities at $628.6 million and equity at $1.30 billion | Balance Sheet Item | March 31, 2025 (In thousands) | December 31, 2024 (In thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $83,994 | $220,540 | | Total inventories | $560,338 | $483,875 | | Goodwill | $391,526 | $338,501 | | Total assets | $1,928,872 | $1,820,606 | | **Liabilities & Equity** | | | | Total current liabilities | $484,029 | $433,727 | | Total liabilities | $628,600 | $550,772 | | Total equity | $1,299,922 | $1,268,610 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 net cash used in operations was $19.5 million, and in investing $116.1 million, leading to a $136.5 million cash decrease | Cash Flow Activity (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash flows from operating activities | $(19,468) | $(1,362) | | Net cash flows from investing activities | $(116,117) | $(10,216) | | Net cash flows from financing activities | $(2,558) | $(6,343) | | Net change in cash and cash equivalents | $(136,546) | $(19,649) | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail Q1 2025 acquisitions, goodwill, segment performance, debt structure, legal contingencies, and fair value measurements - In Q1 2025, the company completed two acquisitions: Barnes de Colombia S.A. for **$96.6 million** and PumpEng Pty Ltd for approximately **$15.0 million**. These acquisitions are part of the Water Systems segment[31](index=31&type=chunk)[36](index=36&type=chunk) - Goodwill increased by **$53.0 million** in Q1 2025, primarily due to **$50.7 million** from new acquisitions in the Water Systems segment[41](index=41&type=chunk) - The company is involved in a long-standing legal review in France concerning alleged issues with underground piping connections, with potential damages estimated at approximately **9.5 million Euro**. The company disputes that its products caused any damage[46](index=46&type=chunk)[48](index=48&type=chunk) Segment Performance (Q1 2025, In millions) | Segment Performance (Q1 2025, In millions) | Water Systems | Distribution | Energy Systems | | :--- | :--- | :--- | :--- | | External Sales | $246.5 | $141.9 | $66.8 | | Segment Operating Income | $43.4 | $2.1 | $21.9 | [Management's Discussion and Analysis (MD&A)](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial results, including sales, operating income, segment performance, liquidity, and cash flow [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Q1 2025 net sales decreased 1% to $455.2 million, with gross profit margin improving but operating income declining 8% - Overall net sales decreased by **1%** in Q1 2025 compared to Q1 2024, primarily due to lower volumes and a **2%** negative impact from foreign currency translation. This was partially offset by price realization and **$5.7 million** in sales from recent acquisitions[82](index=82&type=chunk)[83](index=83&type=chunk) Net Sales by Segment (In millions) | Net Sales by Segment (In millions) | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Water Systems | $287.3 | $286.6 | +0.2% | | Energy Systems | $66.8 | $62.1 | +7.6% | | Distribution | $141.9 | $147.0 | -3.5% | | **Consolidated** | **$455.2** | **$460.9** | **-1.2%** | - Gross profit margin increased to **36.0%** in Q1 2025 from **35.5%** in Q1 2024, driven by a favorable sales mix in Energy Systems and improved performance in Distribution[92](index=92&type=chunk)[93](index=93&type=chunk) - SG&A expenses rose to **$119.6 million** from **$115.6 million**, primarily due to higher employee compensation, executive leadership transition costs, and expenses from recent acquisitions[94](index=94&type=chunk) [Segment Performance Analysis](index=27&type=section&id=Segment%20Performance%20Analysis) Q1 2025 saw flat Water Systems sales, Energy Systems operating income growth, and a slight increase in Distribution operating income - **Water Systems:** Operating income decreased by **$3.7 million** to **$43.4 million**, with the margin declining **130 basis points** to **15.1%**, primarily due to incremental expenses from recent acquisitions[97](index=97&type=chunk) - **Energy Systems:** Operating income increased by **$3.1 million** to **$21.9 million**, and the margin expanded by **250 basis points** to **32.8%**, driven by higher sales, price realization, and a favorable geographic mix[98](index=98&type=chunk) - **Distribution:** Operating income rose by **$0.3 million** to **$2.1 million**, with the margin improving by **30 basis points** to **1.5%**, attributed to reduced SG&A expenses from cost actions implemented in 2024[99](index=99&type=chunk) [Capital Resources and Liquidity](index=31&type=section&id=Capital%20Resources%20and%20Liquidity) The company's liquidity, supported by $281.6 million in credit, saw increased cash usage in operations and investing for Q1 2025 - As of March 31, 2025, the company had **$281.6 million** of available capacity under its **$350.0 million** revolving credit facility[109](index=109&type=chunk) - Cash used in operating activities increased to **$19.5 million** in Q1 2025 from **$1.4 million** in Q1 2024, primarily due to working capital changes and lower earnings[115](index=115&type=chunk) - Cash used in investing activities surged to **$116.1 million** in Q1 2025 from **$10.2 million** in Q1 2024, driven by the Barnes and PumpEng acquisitions[116](index=116&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No significant changes in market risk exposure occurred during Q1 2025, as detailed in the 2024 Form 10-K - There were no significant changes in the Company's market risk exposure during Q1 2025[121](index=121&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed effective disclosure controls and procedures as of March 31, 2025, with no material internal control changes - The CEO and Interim CFO concluded that the company's disclosure controls and procedures were effective as of the end of the quarter[122](index=122&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[123](index=123&type=chunk) Part II [Other Information](index=37&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, updated risk factors, and details on the company's equity repurchase program [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is defending various legal claims, including a material proceeding in France detailed in Note 6 - The company is defending various legal actions that have arisen in the ordinary course of business. A material proceeding is described in Note 6, related to a dispute in France[126](index=126&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors from the 2024 Form 10-K, except for an updated risk regarding foreign trade policy impacts - The company highlights the risk that changes in foreign trade policies, such as tariffs on steel, aluminum, and imports from China, Canada, and Mexico, could adversely impact its business and financial performance[128](index=128&type=chunk) [Issuer Repurchases of Equity Securities](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2025, the company repurchased 56,109 shares for $5.4 million, with 1,311,484 shares remaining for repurchase Repurchase Period (2025) | Repurchase Period (2025) | Total Shares Repurchased | Average Price Paid per Share | | :--- | :--- | :--- | | January | — | $— | | February | — | $— | | March | 56,109 | $96.70 | | **Total Q1** | **56,109** | **$96.70** | - As of March 31, 2025, the maximum number of shares that may still be purchased under the company's repurchase plan is **1,311,484**[129](index=129&type=chunk)[130](index=130&type=chunk)

Financial Data and Key Metrics Changes - Consolidated sales for Q1 2025 were $455.2 million, a year-over-year decrease of 1% [14] - Fully diluted earnings per share were $0.67 for Q1 2025, down from $0.70 in Q1 2024 [14] - Gross profit was $163.9 million, slightly up from $163.6 million in the prior year, with a gross margin of 36%, an improvement of 50 basis points [15] - Operating income was $44.1 million, down 8% from $47.9 million in the prior year, with an operating margin of 9.7% [15][16] Business Line Data and Key Metrics Changes - Water Systems segment sales in the U.S. and Canada were up 2%, with groundwater pumping equipment sales increasing by 6% and water treatment products by 7% [17] - Distribution segment sales decreased by 3% to $141.9 million, primarily due to lower volumes and commodity price declines [19] - Energy Systems segment sales increased by 8% to $66.8 million, with operating income rising to $21.9 million and an operating margin of 32.8% [20][21] Market Data and Key Metrics Changes - Water Systems sales outside the U.S. and Canada decreased by 2%, impacted by a 5% decline due to foreign currency translation [18] - The Energy Systems segment recorded growth across key product lines, supported by robust demand in the U.S. energy sector [11] Company Strategy and Development Direction - The company is focused on faster-growing markets, operational efficiency, and integrating recent acquisitions to enhance customer service [6][7] - Strategic acquisitions in Q1 2025 included PumpEng and Barnsley, aimed at expanding product offerings and market reach [28] - The company is committed to innovation and new product development, with a focus on high-growth verticals [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying business fundamentals despite challenges from tariffs and one-time costs [7][10] - The company is adjusting the lower end of its EPS guidance by $0.10, while maintaining full-year sales expectations [24] - Management noted that the business is largely in region for region, which historically tends to be resilient even during economic softness [29] Other Important Information - The effective tax rate for the quarter was 25%, up from 22% in the prior year, impacting EPS by approximately $0.03 [22] - The company ended Q1 2025 with a cash balance of $84 million and used $19.5 million in net cash flows from operating activities [23] Q&A Session Summary Question: Insights on the energy segment margins - Management indicated that while margins are strong, they do not expect the same growth as in previous quarters but anticipate maintaining strong margins due to smarter solutions and effective cost management [34] Question: Order trends in the water segment - Management believes the order growth is organic and not significantly influenced by tariff pull-forward, with selective inventory positioning to mitigate potential tariff impacts [35][36] Question: M&A priorities in the distribution segment - Management remains open to M&A opportunities in the distribution space but is currently focused on operational efficiencies and serving the market [39][40] Question: Tariff exposure and groundwater business performance - Management stated that the overall percentage of COGS from China is under 10%, and groundwater sales in North America showed strong growth, with residential sales up 11% and agricultural sales up 3% [48][51] Question: Organic book to bill ratio in water - The organic book to bill ratio was above one for the quarter, with backlog up mid to high single digits [57]

Franklin Electric (FELE) came out with quarterly earnings of $0.67 per share, missing the Zacks Consensus Estimate of $0.73 per share. This compares to earnings of $0.70 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -8.22%. A quarter ago, it was expected that this water and fuel pumping systems company would post earnings of $0.69 per share when it actually produced earnings of $0.72, delivering a surprise of 4.35%.Over the ...

Financial Data and Key Metrics Changes - Consolidated sales for Q1 2025 were $455.2 million, a year-over-year decrease of 1% [15] - Fully diluted earnings per share were $0.67 for Q1 2025, down from $0.70 in Q1 2024 [15] - Gross profit was $163.9 million, slightly up from $163.6 million in the prior year, with a gross margin of 36%, an improvement of 50 basis points [17] - Operating income was $44.1 million, down 8% from $47.9 million in the prior year, with an operating income margin of 9.7% [17][10] Business Line Data and Key Metrics Changes - Water Systems segment sales in the U.S. and Canada were up 2%, with groundwater pumping equipment sales increasing by 6% and water treatment products by 7% [18] - Distribution segment sales decreased by 3% to $141.9 million, primarily due to lower volumes and commodity price declines [20] - Energy Systems segment sales increased by 8% to $66.8 million, with operating income rising to $21.9 million and an operating income margin of 32.8% [22][23] Market Data and Key Metrics Changes - Water Systems sales outside the U.S. and Canada decreased by 2%, impacted by a 5% decline due to foreign currency translation [19] - The Energy Systems segment recorded growth across key product lines, supported by robust demand in the U.S. energy sector [12] Company Strategy and Development Direction - The company is focused on faster-growing markets, operational efficiency, and integrating recent acquisitions to enhance customer value [6][7] - Strategic acquisitions in Q1 2025 included PumpEng and Barnsley, aimed at expanding product offerings and market reach [28] - The company is committed to innovation and new product development, with plans to launch impactful products in the coming years [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying business fundamentals despite challenges from tariffs and one-time costs [8][10] - The company is adjusting the lower end of its EPS guidance by $0.10, while maintaining full-year sales expectations [25] - Management remains optimistic about the competitive position and is actively managing inventory and pricing strategies to mitigate tariff impacts [29][30] Other Important Information - The effective tax rate for the quarter was 25%, up from 22% in the prior year, influenced by higher foreign earnings taxed at higher rates [23] - The company ended Q1 2025 with a cash balance of $84 million and utilized $19.5 million in net cash flows from operating activities [24] Q&A Session Summary Question: Insights on the energy segment margins - Management does not expect the same growth as in previous quarters but anticipates maintaining strong margins due to smarter solutions and effective cost management [34] Question: Order growth in the water segment and inventory positioning - Management believes the order growth is organic and not significantly influenced by tariff pull-forward, with selective inventory positioning to mitigate risks [35][36] Question: M&A priorities in the distribution segment - Management remains open to M&A opportunities in the distribution space but is currently focused on operational efficiencies and market service [38][39] Question: Tariff exposure and groundwater business performance - The company has limited exposure to tariffs from China, under 10% of COGS, and reported strong growth in the residential groundwater business [46][60] Question: Guidance clarification and revenue expectations - Management indicated that pricing increases will offset some organic demand declines, maintaining revenue guidance while monitoring market conditions [70]

Financial Performance - First quarter 2025 net sales were $455.2 million, a decrease of 1% compared to $460.9 million in the first quarter 2024[2]. - Operating income for the first quarter 2025 was $44.1 million, down from $47.9 million in the same period last year, resulting in an operating margin of 9.7%[2][8]. - Earnings per share (EPS) for the first quarter 2025 was $0.67, compared to $0.70 in the first quarter 2024[2][8]. - The company reported a net income of $31.374 million for the first quarter 2025, compared to $33.092 million in the first quarter 2024[18]. - Q1 2025 consolidated net sales reached $455.2 million, a decrease of 1% compared to Q1 2024's $460.9 million[23]. - Operating income for Q1 2025 was $44.1 million, with an operating margin of 9.7%, compared to $47.9 million and 10.4% in Q1 2024[24][25]. Segment Performance - Water Systems net sales were $287.3 million, an increase of less than 1% year-over-year, while Distribution net sales decreased by 3% to $141.9 million[5][6]. - Energy Systems net sales increased by 8% to $66.8 million, with operating income rising to $21.9 million from $18.8 million in the prior year[7][8]. - Water segment operating income was $2.1 million in Q1 2025, representing 15.1% of net sales, down from 16.4% in Q1 2024[24][25]. - Energy segment operating income increased to $43.4 million in Q1 2025, with a margin of 32.8%, compared to 30.3% in Q1 2024[24][25]. - Distribution segment reported an operating loss of $21.9 million in Q1 2025, while the previous year showed a loss of $19.8 million[24][25]. Acquisitions and Guidance - The company completed two acquisitions during the quarter, aiming to enhance margin profiles and align with its value creation framework[4]. - Full year 2025 sales guidance is maintained at $2.09 billion to $2.15 billion, with EPS guidance adjusted to a range of $3.95 to $4.25[10]. - Acquisitions contributed $5.7 million to net sales in Q1 2025, reflecting a 1% increase from the previous year[23]. Cash Flow and Financial Position - Net cash flows used in operating activities for the first quarter were $19.5 million, compared to $1.4 million in the same period in 2024[9]. - Cash and cash equivalents at the end of the period were $83.994 million, down from $220.540 million at the beginning of the period[22]. Market Challenges and Future Outlook - Foreign currency translation negatively impacted consolidated net sales by $7.3 million, a 2% decrease[23]. - Volume and price changes contributed positively to net sales by $2.1 million in Q1 2025, with a 1% increase[23]. - The company anticipates continued challenges in the distribution segment, with ongoing strategies to mitigate losses[24]. - Future outlook includes potential market expansion and new product development initiatives to drive growth[24].

Core Insights - Franklin Electric Co., Inc. reported first quarter 2025 net sales of $455.2 million, a decrease of 1% compared to $460.9 million in the first quarter of 2024 [10] - The company's operating income for the first quarter 2025 was $44.1 million, down from $47.9 million in the same period last year [10] - Earnings per share (EPS) for the first quarter 2025 was $0.67, compared to $0.70 in the first quarter 2024 [10] Financial Performance - First quarter 2025 net sales were $455.2 million, a decrease of $5.7 million or 1% from the prior year [10][22] - Operating income was $44.1 million, with an operating margin of 9.7% [10][24] - Net income attributable to Franklin Electric was $30.962 million, down from $32.959 million in the first quarter 2024 [17] Segment Performance - Water Systems net sales were $287.3 million, an increase of $0.7 million or less than 1% compared to the first quarter of 2024 [4] - Distribution segment net sales decreased by $5.1 million or 3% to $141.9 million due to lower volumes and negative pricing [5] - Energy Systems net sales increased by $4.7 million or 8% to $66.8 million, driven by higher volumes and price realization [6] Cash Flow and Guidance - Net cash flows used in operating activities for the first quarter of 2025 were $19.5 million, compared to $1.4 million in the same period in 2024 [7] - The company maintains its full-year 2025 sales guidance in the range of $2.09 billion to $2.15 billion and has adjusted its EPS guidance to a range of $3.95 to $4.25 [8] Strategic Initiatives - The company completed two acquisitions during the quarter, aligning with its value creation framework [3] - CEO Joe Ruzynski highlighted the positive order trends and robust backlog entering the second quarter, despite challenges in the Distribution business due to unfavorable weather [2]