Investors interested in Manufacturing - Electronics stocks are likely familiar with Franklin Electric (FELE) and Schneider Electric SE (SBGSY) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphas ...

FORT WAYNE, Ind., Oct. 27, 2025 (GLOBE NEWSWIRE) -- Franklin Electric Co., Inc. (NASDAQ: FELE) announced today that its Board of Directors declared a quarterly cash dividend of $0.265 per share payable November 20, 2025, to shareholders of record on November 6, 2025. About Franklin ElectricFranklin 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 ...

Industry Overview - The Zacks Manufacturing - Electronics industry is positioned to benefit from stable demand in electronic services, advanced manufacturing technologies, and product innovation efforts, with a surge in e-commerce activities aiding growth [1] - The industry comprises companies manufacturing electronic products such as battery chargers, power transmission products, and water-treatment products, with a focus on customer support and after-market services [3] Current Challenges - A slowdown in the manufacturing sector and supply-chain issues are negatively impacting some industry participants, with the Manufacturing Purchasing Manager's Index at 49.1% indicating contraction [2][4] - Supply-chain disruptions, particularly regarding electrical and electronic components, remain a concern, as reflected in slower deliveries reported by the ISM [4] Market Trends - Despite manufacturing slowdowns, demand in key end markets remains stable, with electronics manufacturers benefiting from the adoption of advanced manufacturing technologies [5] - The industry is experiencing positive momentum in the medical and life sciences markets, driven by strong demand for products and solutions [5] Technological Advancements - Industry players are increasingly digitizing operations to gain insights into performance, demand cycles, and supply-chain issues, enhancing competitiveness through improved productivity and product quality [6] Industry Performance - The Zacks Manufacturing - Electronics industry holds a Zacks Industry Rank of 84, placing it in the top 35% of 243 Zacks industries, indicating bullish near-term prospects [7][8] - The industry's earnings estimates for 2025 have increased by 0.1% over the past year, reflecting analysts' confidence in earnings growth potential [9] Comparative Performance - Over the past year, the industry has outperformed the broader sector with an 8.9% growth compared to the sector's 1.6% rise, but underperformed the S&P 500, which increased by 17.5% [11] Valuation Metrics - The industry is currently trading at a forward 12-month Price-to-Earnings (P/E) ratio of 22.44X, slightly below the S&P 500's 23.39X but above the sector's 19.75X [14] Notable Companies - Franklin Electric is well-positioned due to strong demand in the Water Systems segment, with a 0.5% increase in earnings estimates for 2025 [18][19] - Powell Industries benefits from strength in the oil and gas markets, with shares rising 34.4% in the past year [22][23] - Emerson Electric is experiencing solid momentum in its Final Control business, with a slight increase in earnings estimates [25] - Eaton Corporation is benefiting from rising demand in AI-data centers and global reindustrialization trends, with an 8.1% increase in share price over the past year [28][29]

Core Thesis - Franklin Electric Co., Inc. is positioned as a compelling investment opportunity due to its critical role in water and fuel infrastructure, high-margin growth potential, and stable demand across its segments [1][4]. Company Overview - Franklin Electric, founded in 1944, initially produced portable generators and later shifted focus to water systems, creating the first commercially viable submersible motor in 1953, which significantly improved agricultural efficiency and global food security [2]. - The company's Water Systems segment remains central to its operations, reflecting a history of technological leadership and consistent demand, including specialized solutions for mining and construction [3]. Financial Performance - As of September 30th, Franklin Electric's shares were trading at $95.20, with trailing and forward P/E ratios of 24.64 and 20.16 respectively [1]. - The Energy Systems segment, while accounting for approximately 13% of revenue, contributes over 30% of operating income due to high operating margins exceeding 30% [4]. Market Position and Growth Opportunities - Franklin Electric provides essential infrastructure solutions that support agriculture, construction, and fueling systems, leading to durable demand and resilient cash flow [4]. - The company benefits from secular tailwinds in water management, energy infrastructure, and regulatory compliance, making it a stable, high-margin industrial operator with significant growth opportunities [4].

Core Points - Franklin Electric Co., Inc. will release its third quarter 2025 earnings on October 28, 2025, at 8:00 am ET, followed by a conference call at 9:00 am ET to discuss earnings and business developments [1] - The conference call will be accessible via a live webcast, and participants can register for the question-and-answer portion of the call [2] - A replay of the conference call will be available from October 28, 2025, through November 4, 2025 [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 named in Newsweek's lists of America's Most Responsible Companies 2024 and Greenest Companies 2025 [4]

Core Insights - Franklin Electric (FELE) currently presents a more attractive investment opportunity compared to ABB (ABBNY) for value investors based on various financial metrics and rankings [3][7]. Valuation Metrics - FELE has a forward P/E ratio of 22.65, while ABBNY has a higher forward P/E of 28.57 [5]. - The PEG ratio for FELE is 1.89, indicating a more favorable growth outlook compared to ABBNY's PEG ratio of 2.24 [5]. - FELE's P/B ratio stands at 3.29, significantly lower than ABBNY's P/B ratio of 8.96, suggesting that FELE is undervalued relative to its book value [6]. Zacks Rank and Value Grades - FELE holds a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while ABB has a Zacks Rank of 3 (Hold) [3]. - The Value grade for FELE is B, reflecting its stronger valuation metrics, whereas ABBNY has a Value grade of C [6]. Conclusion - Overall, the combination of stronger estimate revisions and more attractive valuation metrics positions FELE as the superior choice for value investors at this time [7].

Group 1 - The core focus of Crude Value Insights is on cash flow and companies that generate it, highlighting value and growth prospects in the oil and natural gas sector [1] - Subscribers benefit from a 50+ stock model account, which provides a comprehensive overview of investment opportunities [1] - The service includes in-depth cash flow analyses of exploration and production (E&P) firms, enhancing understanding of the sector's financial health [1] Group 2 - The platform offers a live chat discussion feature, fostering community engagement and real-time information exchange among subscribers [1] - A promotional two-week free trial is available for new users, encouraging exploration of the oil and gas investment service [2]

Core Insights - Franklin Electric reported consolidated sales of $587.4 million for Q2 2025, an 8% year-over-year increase, with growth across all segments [2][24] - The company achieved GAAP diluted earnings per share of $1.31, reflecting a 6¢ increase year-over-year, driven by a 6% improvement in Energy segment sales [3][24] - Operating income margin reached 15%, up 40 basis points year-over-year, attributed to SG&A efficiency despite higher acquisition costs [3][26] Sales Performance - Water Systems segment sales grew 8% year-over-year, with U.S. and Canada sales up 5% and global sales outside the U.S. and Canada up 12% [4][27] - Distribution segment sales were $200 million, a 5% increase, with operating income margin improving by 300 basis points to 8.1% [5][28] - Energy segment sales reached $77.5 million, up 6% year-over-year, with operating income margin improving to 37.5% [6][29] Financial Metrics - Gross profit margin for Q2 2025 was 36.1%, a decline of 70 basis points year-over-year, influenced by product mix and acquisition effects [3][25] - SG&A expenses increased to $123.5 million, primarily due to acquisition-related costs, but underlying SG&A decreased by $2.3 million year-over-year [6][25] - The effective tax rate for the quarter was 25%, up from 23% in the prior year, due to increased foreign earnings and higher tax rates [30] Strategic Initiatives - The company plans to accelerate capital spending for new facilities in Turkey and India, linked to supply chain and nearshoring initiatives [8][66] - A quarterly cash dividend of $0.265 per share was declared, payable on August 21, with a record date of August 7 [7][31] - Share repurchases totaled 1.4 million shares for $120 million in Q2 2025, including approximately 1.2 million shares from Shaper Trust for about $104 million [7][31] Market Outlook - The full-year sales outlook is reaffirmed at $2.09 billion to $2.15 billion, with GAAP EPS guidance maintained at $3.95 to $4.25 [8][31] - The company anticipates a non-cash pension impact of approximately $1 per share in Q3 2025, which is excluded from current EPS guidance [10][32] - Management expressed confidence in maintaining a book-to-bill ratio above one across all segments, indicating strong future demand [9][10]

PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Unaudited condensed consolidated financial statements for Q2 and six months ended June 30, 2025 and 2024, with detailed notes [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Unaudited condensed consolidated statements of income for Q2 and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Income (Unaudited) - Key Figures (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | 6 Months 2025 (in thousands) | 6 Months 2024 (in thousands) | | :----------------------------------- | :------ | :------ | :------------ | :------------ | | Net sales | $587,434 | $543,258 | $1,042,681 | $1,004,158 | | Gross profit | $211,826 | $199,797 | $375,729 | $363,377 | | Operating income | $88,141 | $79,149 | $132,242 | $127,085 | | Income before income taxes | $80,624 | $76,921 | $122,476 | $119,235 | | Net income | $60,563 | $59,331 | $91,937 | $92,423 | | Net income attributable to Franklin Electric Co., Inc. | $60,140 | $59,099 | $91,102 | $92,058 | | Basic EPS | $1.32 | $1.28 | $1.99 | $1.99 | | Diluted EPS | $1.31 | $1.26 | $1.97 | $1.97 | [Condensed Consolidated Statements of Comprehensive Income/(Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%2F(Loss)) Unaudited condensed consolidated statements of comprehensive income/(loss) for Q2 and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Comprehensive Income/(Loss) (Unaudited) - Key Figures (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | 6 Months 2025 (in thousands) | 6 Months 2024 (in thousands) | | :------------------------------------------------ | :------ | :------ | :------------ | :------------ | | Net income | $60,563 | $59,331 | $91,937 | $92,423 | | Other comprehensive income/(loss), net of tax | $26,364 | $(9,865) | $39,723 | $(16,647) | | Comprehensive income | $86,927 | $49,466 | $131,660 | $75,776 | | Comprehensive income attributable to Franklin Electric Co., Inc. | $86,278 | $49,249 | $130,698 | $75,467 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (Unaudited) - Key Figures (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------------- | :------------ | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $104,592 | $220,540 | | Total current assets | $1,036,440 | $964,191 | | Property, plant, and equipment, net | $241,232 | $223,566 | | Intangible assets, net | $257,490 | $212,973 | | Goodwill | $395,999 | $338,501 | | Total assets | $2,017,912 | $1,820,606 | | **LIABILITIES AND EQUITY** | | | | Total current liabilities | $604,117 | $433,727 | | Long-term debt | $14,511 | $11,622 | | Total equity | $1,265,062 | $1,268,610 | | Total liabilities and equity | $2,017,912 | $1,820,606 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows (Unaudited) - Key Figures (in thousands) for Six Months Ended June 30 | Metric | 2025 (in thousands) | 2024 (in thousands) | | :----------------------------------- | :----- | :----- | | Net cash flows from operating activities | $31,997 | $35,003 | | Net cash flows from investing activities | $(127,321) | $(20,157) | | Net cash flows from financing activities | $(22,112) | $(38,738) | | Net change in cash and cash equivalents | $(115,948) | $(26,859) | | Cash and cash equivalents at end of period | $104,592 | $58,104 | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Detailed notes to the unaudited condensed consolidated financial statements, explaining accounting policies and events [Note 1. Condensed Consolidated Financial Statements](index=12&type=section&id=Note%201.%20Condensed%20Consolidated%20Financial%20Statements) Unaudited interim financial statements prepared under GAAP are not indicative of full fiscal year results - Interim financial statements are unaudited and prepared under GAAP for interim financial information, with certain disclosures condensed or omitted[29](index=29&type=chunk) - Management confirms all necessary accounting entries and adjustments have been made for fair presentation[29](index=29&type=chunk) - Operating results for the second quarter and six months ended June 30, 2025, are not necessarily indicative of the full fiscal year 2025[29](index=29&type=chunk) [Note 2. Acquisitions](index=12&type=section&id=Note%202.%20Acquisitions) Details Q1 2025 acquisitions of Barnes de Colombia S.A. and PumpEng Pty Ltd, included in Water Systems segment - In March 2025, the Company acquired Barnes de Colombia S.A. for **$96.6 million** cash, net of cash acquired, a leading manufacturer and distributor of industrial and commercial pumps in Colombia[30](index=30&type=chunk) - In February 2025, the Company acquired PumpEng Pty Ltd (Australia) for approximately **$15.0 million**, specializing in submersible pumps for the mining sector[35](index=35&type=chunk) - Both acquisitions are included in the Water Systems segment, with preliminary valuations allocating significant amounts to goodwill and other intangible assets[33](index=33&type=chunk)[36](index=36&type=chunk) - Barnes contributed **$15.0 million** to net sales for the six months ended June 30, 2025, with an insignificant impact on net income[34](index=34&type=chunk) [Note 3. Goodwill and Other Intangible Assets](index=13&type=section&id=Note%203.%20Goodwill%20and%20Other%20Intangible%20Assets) Intangible assets totaled $257.5 million and goodwill increased to $396.0 million due to recent acquisitions Intangible Assets (excluding goodwill) (in millions) | Category | June 30, 2025 (Net, in millions) | December 31, 2024 (Net, in millions) | | :---------------------- | :------------------ | :-------------------- | | Amortizing intangibles | $214.8 | $171.4 | | Non-amortizing intangibles (Trade names) | $42.6 | $41.6 | | **Total intangibles** | **$257.4** | **$213.0** | *Note: Net amounts derived from Gross Carrying Amount less Accumulated Amortization* Amortization Expense (in millions) | Period | 2025 (in millions) | 2024 (in millions) | | :---------------------- | :----- | :----- | | Second Quarter Ended June 30 | $6.0 | $4.7 | | Six Months Ended June 30 | $11.1 | $9.5 | Change in Goodwill by Segment (in millions) for Six Months Ended June 30, 2025 | Segment | Balance Dec 31, 2024 (in millions) | Acquisitions (in millions) | Adjustments (in millions) | FX Translation (in millions) | Balance June 30, 2025 (in millions) | | :-------------- | :------------------- | :----------- | :---------- | :------------- | :-------------------- | | Water Systems | $217.6 | $52.7 | $0.1 | $4.4 | $274.8 | | Energy Systems | $70.3 | — | — | $0.3 | $70.6 | | Distribution | $50.6 | — | — | — | $50.6 | | **Consolidated** | **$338.5** | **$52.7** | **$0.1** | **$4.7** | **$396.0** | [Note 4. Accrued Expenses and Other Current Liabilities](index=14&type=section&id=Note%204.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued expenses and other current liabilities decreased to $100.7 million as of June 30, 2025 Accrued Expenses and Other Current Liabilities (in millions) | Category | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :-------------------------------- | :------------ | :---------------- | | Salaries, wages, and commissions | $43.3 | $49.0 | | Product warranty costs | $8.9 | $9.0 | | Insurance | $2.8 | $2.4 | | Employee benefits | $15.6 | $19.9 | | Other | $30.1 | $39.5 | | **Total** | **$100.7** | **$119.8** | [Note 5. Debt](index=14&type=section&id=Note%205.%20Debt) Total debt increased significantly to $284.7 million, with a new $525.0 million Credit Agreement Debt Composition (in millions) | Category | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :------------------------------------------ | :------------ | :---------------- | | New York Life Agreement | $75.0 | $75.0 | | Credit Agreement | $186.0 | $41.4 | | Tax increment financing debt | $12.2 | $12.8 | | Foreign subsidiary debt | $11.5 | $0.3 | | Less: unamortized debt issuance costs | — | $(0.1) | | **Total Debt** | **$284.7** | **$129.4** | | Less: current maturities | $(270.2) | $(117.8) | | **Long-term debt** | **$14.5** | **$11.6** | - On May 14, 2025, the Company entered into the Fifth Amended and Restated Credit Agreement, extending the maturity date to May 14, 2030, and increasing the potential aggregate commitments by **$175.0 million** to a total of **$525.0 million**[43](index=43&type=chunk) - As of June 30, 2025, the Company had **$186.0 million** outstanding borrowings under the Credit Agreement with a weighted-average interest rate of **4.3%**, and **$159.4 million** of available capacity[44](index=44&type=chunk) [Note 6. Commitments and Contingencies](index=16&type=section&id=Note%206.%20Commitments%20and%20Contingencies) Outlines legal proceedings, including a 9.5 million Euro claim in France, and stable product warranty accrual - The Company is involved in a legal proceeding in France concerning alleged issues with underground piping connections, with total damages estimated at approximately **9.5 million Euro**; the Company maintains its products were not the cause of damage[47](index=47&type=chunk) - Management believes other various claims and legal actions can be defended or resolved without a material effect on the Company's financial position, results of operations, and net cash flows[48](index=48&type=chunk) Warranty Accrual (in millions) for Six Months Ended June 30, 2025 | Metric | Amount (in millions) | | :-------------------------------- | :----- | | Balance as of December 31, 2024 | $9.0 | | Accruals related to product warranties | $5.4 | | Reductions for payments made | $(5.5) | | **Balance as of June 30, 2025** | **$8.9** | [Note 7. Equity Roll Forward](index=17&type=section&id=Note%207.%20Equity%20Roll%20Forward) Total equity decreased slightly to $1,265.1 million, impacted by net income, dividends, and share repurchases Equity Roll Forward (in thousands) for Six Months Ended June 30, 2025 | Metric | Common Stock (in thousands) | Additional Paid-in Capital (in thousands) | Retained Earnings (in thousands) | Accumulated Other Comprehensive Income/(Loss) (in thousands) | Noncontrolling Interest (in thousands) | Total Equity (in thousands) | | :----------------------------------- | :----------- | :------------------------- | :---------------- | :-------------------------------------------- | :---------------------- | :----------- | | Balance as of December 31, 2024 | $4,571 | $363,956 | $1,151,575 | $(254,003) | $2,511 | $1,268,610 | | Net Income | — | — | $91,102 | — | $600 | $91,702 | | Dividends on common stock | — | — | $(24,359) | — | — | $(24,359) | | Common stock issued | $14 | $11,513 | — | — | — | $11,527 | | Common stock repurchased | $(147) | — | $(129,911) | — | — | $(130,058) | | Share-based compensation | $10 | $7,959 | — | — | — | $7,969 | | Currency translation adjustment | — | — | — | $38,975 | $75 | $39,050 | | Pension and other post retirement plans, net of taxes | — | — | — | $621 | — | $621 | | **Balance as of June 30, 2025** | **$4,448** | **$383,428** | **$1,088,407** | **$(214,407)** | **$3,186** | **$1,265,062** | [Note 8. Accumulated Other Comprehensive Income/(Loss)](index=19&type=section&id=Note%208.%20Accumulated%20Other%20Comprehensive%20Income%2F(Loss)) Accumulated other comprehensive loss improved to $(214.4) million due to positive foreign currency translation Changes in Accumulated Other Comprehensive Income/(Loss) (in millions) for Six Months Ended June 30, 2025 | Component | Foreign Currency Translation Adjustments (in millions) | Pension and Post-Retirement Plan Benefit Adjustments (in millions) | Total (in millions) | | :------------------------------------------------ | :------------------------------------- | :--------------------------------------------------- | :---- | | Balance as of December 31, 2024 | $(215.0) | $(39.0) | $(254.0) | | Other comprehensive income/(loss) before reclassifications | $39.0 | — | $39.0 | | Amounts reclassified from accumulated other comprehensive income/(loss) | — | $0.6 | $0.6 | | **Net other comprehensive income/(loss)** | **$39.0** | **$0.6** | **$39.6** | | **Balance as of June 30, 2025** | **$(176.0)** | **$(38.4)** | **$(214.4)** | [Note 9. Employee Benefit Plans](index=19&type=section&id=Note%209.%20Employee%20Benefit%20Plans) Net periodic benefit cost for pension plans decreased, while other post-retirement benefit plan costs remained stable Aggregated Net Periodic Benefit Cost for Pension Plans (in millions) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | 6 Months 2025 (in millions) | 6 Months 2024 (in millions) | | :---------------------- | :------ | :------ | :------------ | :------------ | | Service cost | $0.1 | $0.2 | $0.1 | $0.3 | | Interest cost | $1.5 | $1.6 | $2.9 | $3.1 | | Expected return on assets | $(1.6) | $(1.9) | $(3.2) | $(3.8) | | Amortization of actuarial loss | $0.4 | $0.6 | $0.8 | $1.2 | | **Net periodic benefit cost** | **$0.4** | **$0.5** | **$0.6** | **$0.8** | Aggregated Net Periodic Benefit Cost for Other Post-Retirement Benefit Plan (in millions) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | 6 Months 2025 (in millions) | 6 Months 2024 (in millions) | | :---------------------- | :------ | :------ | :------------ | :------------ | | Interest cost | — | — | $0.1 | $0.1 | | **Net periodic benefit cost** | **—** | **—** | **$0.1** | **$0.1** | [Note 10. Income Taxes](index=20&type=section&id=Note%2010.%20Income%20Taxes) Effective tax rate increased to 24.9% due to foreign earnings mix, reduced FDII benefit, and discrete events Effective Tax Rate | Period | 2025 | 2024 | | :---------------------- | :----- | :----- | | Second Quarter Ended June 30 | 24.9% | 22.9% | | Six Months Ended June 30 | 24.9% | 22.5% | - The increase in the effective tax rate was primarily due to a less favorable mix of foreign earnings, a decreased benefit from the U.S. foreign-derived intangible income (FDII) provision, and less favorable discrete events related to share-based compensation[58](index=58&type=chunk) - The Company is evaluating the impact of the One Big Beautiful Bill Act (OBBB), signed in July 2025, which includes tax reform provisions such as elective R&D deduction, 100% bonus depreciation, and favorable rates on foreign-derived income, potentially affecting future effective tax rates and deferred tax assets[59](index=59&type=chunk) [Note 11. Earnings Per Share](index=20&type=section&id=Note%2011.%20Earnings%20Per%20Share) Diluted EPS increased to $1.31 in Q2 2025, remaining flat at $1.97 for the six months ended June 30, 2025 Earnings Per Share (in millions, except per share amounts) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | 6 Months 2025 (in millions) | 6 Months 2024 (in millions) | | :----------------------------------- | :------ | :------ | :------------ | :------------ | | Net income available to common shareholders | $59.9 | $58.9 | $90.8 | $91.8 | | Basic weighted average common shares outstanding | 45.4 | 46.0 | 45.6 | 46.0 | | Diluted weighted average common shares outstanding | 45.9 | 46.6 | 46.1 | 46.6 | | **Basic earnings per share** | **$1.32** | **$1.28** | **$1.99** | **$1.99** | | **Diluted earnings per share** | **$1.31** | **$1.26** | **$1.97** | **$1.97** | - The Company calculates basic and diluted earnings per common share using the two-class method, allocating net earnings to common stock and participating securities (share-based payment awards)[60](index=60&type=chunk) [Note 12. Financial Instruments](index=21&type=section&id=Note%2012.%20Financial%20Instruments) Explains the use of share swap transactions and forward currency contracts to mitigate market risks - The Company uses share swap transactions to mitigate exposure to fluctuations in its stock price related to non-employee directors' deferred compensation stock program[64](index=64&type=chunk) Impact of Share Swap Transaction (in millions) | Period | Q2 2025 Loss (in millions) | 6 Months 2025 Loss (in millions) | Q2 2024 Loss (in millions) | 6 Months 2024 Loss (in millions) | | :---------------------- | :----------- | :----------------- | :----------- | :----------------- | | Changes in fair value | $1.6 | $2.8 | $2.9 | $0.8 | - The Company enters into forward currency contracts to reduce exposure to foreign currency exchange rate volatility, not for hedge accounting[65](index=65&type=chunk) Impact of Forward Currency Contracts (in millions) | Period | Q2 2025 Gain (in millions) | 6 Months 2025 Gain (in millions) | Q2 2024 Loss (in millions) | 6 Months 2024 Loss (in millions) | | :---------------------- | :----------- | :----------------- | :----------- | :----------------- | | Changes in fair value | $6.8 | $11.2 | $0.9 | $0.3 | [Note 13. Fair Value Measurements](index=21&type=section&id=Note%2013.%20Fair%20Value%20Measurements) Details fair value measurements for assets and liabilities, including cash equivalents, share swaps, and debt - Fair value is defined as the exchange price for an asset or liability in an orderly transaction between market participants[66](index=66&type=chunk) - The fair value hierarchy categorizes inputs into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[67](index=67&type=chunk) Assets and Liabilities Measured at Fair Value (in millions) as of June 30, 2025 | Category | Total (in millions) | Level 1 (in millions) | Level 2 (in millions) | Level 3 (in millions) | | :---------------------- | :---- | :------ | :------ | :------ | | **Assets:** | | | | | | Cash equivalents | $9.6 | $9.6 | — | — | | Share swap transaction | $0.4 | $0.4 | — | — | | Forward currency contracts | $0.2 | — | $0.2 | — | | **Total assets** | **$10.2** | **$10.0** | **$0.2** | **—** | | **Liabilities:** | | | | | | Forward currency contracts | $0.4 | — | $0.4 | — | | **Total liabilities** | **$0.4** | **—** | **$0.4** | **—** | - Total debt had carrying amounts of **$284.7 million** and estimated fair values of **$283.7 million** as of June 30, 2025, classified as Level 2 due to estimates based on rates for similar debt[69](index=69&type=chunk) [Note 14. Segment and Geographic Information](index=23&type=section&id=Note%2014.%20Segment%20and%20Geographic%20Information) Net sales and operating income by Water Systems, Distribution, and Energy Systems segments for Q2 and six months - The Company's business consists of Water Systems, Distribution, and Energy Systems segments, with performance evaluated based on sales and operating income[70](index=70&type=chunk)[72](index=72&type=chunk) Consolidated Net Sales by Segment (in millions) | Segment | Q2 2025 (in millions) | Q2 2024 (in millions) | 6 Months 2025 (in millions) | 6 Months 2024 (in millions) | | :-------------- | :------ | :------ | :------------ | :------------ | | Water Systems | $309.9 | $279.7 | $556.5 | $531.5 | | Distribution | $200.0 | $190.5 | $341.9 | $337.5 | | Energy Systems | $77.5 | $73.1 | $144.3 | $135.2 | | **Total Consolidated Sales** | **$587.4** | **$543.3** | **$1,042.7** | **$1,004.2** | Segment Operating Income (in millions) | Segment | Q2 2025 (in millions) | Q2 2024 (in millions) | 6 Months 2025 (in millions) | 6 Months 2024 (in millions) | | :-------------- | :------ | :------ | :------------ | :------------ | | Water Systems | $61.8 | $62.3 | $105.3 | $109.5 | | Distribution | $16.1 | $9.8 | $18.2 | $11.7 | | Energy Systems | $29.1 | $26.0 | $51.0 | $44.7 | | **Consolidated Operating Income** | **$88.1** | **$79.1** | **$132.2** | **$127.1** | - Water Systems operating income and margin decreased due to incremental acquisition expenses and an unfavorable product and geographic sales mix shift[103](index=103&type=chunk) - Energy Systems operating income and margin increased due to higher sales, price realization, cost management, and a favorable product sales mix shift[104](index=104&type=chunk) - Distribution operating income and margin increased due to higher sales and reduced SG&A expenses from cost actions implemented in 2024[105](index=105&type=chunk) [Note 15. Subsequent Event](index=29&type=section&id=Note%2015.%20Subsequent%20Event) Details the July 2025 Pension Plan termination, involving lump sum payments and a $60 million non-cash settlement charge - In July 2025, the Company began terminating the Franklin Electric Co., Inc. Pension Plan, making **$59.9 million** in lump sum payments and transferring **$30 million** in obligations to an insurance company[81](index=81&type=chunk) - Management estimates a one-time non-cash pre-tax pension settlement charge of approximately **$60 million** in Q3 2025 due to actuarial losses[81](index=81&type=chunk) - The plan's over-funded status means no cash or asset contributions from the Company, with remaining surplus assets expected to fund 401(k) plan employer contributions[81](index=81&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion and analysis of financial performance for Q2 and six months ended June 30, 2025 [Overview](index=30&type=section&id=Overview) Highlights increased net sales and gross profit, with diluted EPS up in Q2 but flat for six months - Net sales increased **8%** in Q2 2025 and **4%** in the first six months of 2025 compared to prior-year periods, driven by higher volumes, price realization, and recent acquisitions, partially offset by negative foreign currency translation[86](index=86&type=chunk) - Consolidated gross profit increased **6%** in Q2 2025 and **3%** in the first six months of 2025[86](index=86&type=chunk) - Diluted EPS increased by **$0.05** to **$1.31** in Q2 2025 and remained unchanged at **$1.97** for the first six months of 2025[86](index=86&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Analyzes key financial performance metrics including net sales, gross profit, operating expenses, and net income [Net Sales](index=30&type=section&id=Net%20Sales) Consolidated net sales grew 8% in Q2 and 4% for six months, driven by acquisitions, volumes, and price realization Consolidated Net Sales (in millions) | Period | 2025 (in millions) | 2024 (in millions) | Change (2025 vs 2024, in millions) | | :---------------------- | :----- | :----- | :-------------------- | | Second Quarter | $587.4 | $543.3 | $44.1 (8% increase) | | Six Months | $1,042.7 | $1,004.2 | $38.5 (4% increase) | - Sales were negatively impacted by foreign exchange rates (less than **1%** in Q2, **1%** in six months), partly due to the strengthening of the U.S. Dollar against the Argentine Peso and Turkish Lira, though price increases in local currency offset some devaluation[87](index=87&type=chunk) - Water Systems net sales increased **8%** in Q2 and **4%** in the first six months, driven by acquisitions (**5%** and **3%** incremental sales impact, respectively), favorable volumes, and price realization[90](index=90&type=chunk) - Energy Systems net sales increased **6%** in Q2 and **7%** in the first six months, primarily due to price realization and favorable volumes[93](index=93&type=chunk) - Distribution net sales increased **5%** in Q2 and **1%** in the first six months, due to favorable volumes partly offset by commodity pricing declines[95](index=95&type=chunk) [Gross Profit and Expenses Ratios](index=31&type=section&id=Gross%20Profit%20and%20Expenses%20Ratios) Gross profit margin decreased slightly to 36.1% in Q2 and 36.0% for six months due to unfavorable sales mix Gross Profit and Gross Profit Margin | Period | Gross Profit (in millions) | Gross Profit Margin | | :---------------------- | :----------------------- | :------------------ | | Q2 2025 | $211.8 | 36.1% | | Q2 2024 | $199.8 | 36.8% | | 6 Months 2025 | $375.7 | 36.0% | | 6 Months 2024 | $363.4 | 36.2% | - The gross profit margin was unfavorably impacted by an unfavorable product and geographic sales mix shift in Water Systems[98](index=98&type=chunk) [Selling, General, and Administrative ("SG&A")](index=32&type=section&id=Selling%2C%20General%2C%20and%20Administrative%20(%22SG%26A%22)) SG&A expenses increased due to compensation and acquisitions, but the expense ratio improved to 21.0% in Q2 Selling, General, and Administrative Expenses (SG&A) | Period | SG&A (in millions) | SG&A % of Net Sales | | :---------------------- | :----------------- | :------------------ | | Q2 2025 | $123.5 | 21.0% | | Q2 2024 | $120.6 | 22.2% | | 6 Months 2025 | $243.2 | 23.3% | | 6 Months 2024 | $236.3 | 23.5% | - SG&A expenses increased due to higher employee compensation costs (including executive leadership transitions) and incremental expenses from recent acquisitions[99](index=99&type=chunk) [Restructuring Expenses](index=32&type=section&id=Restructuring%20Expenses) Incurred $0.2 million in Q2 2025 and $0.3 million for six months in restructuring expenses for manufacturing realignment Restructuring Expenses (in millions) | Period | 2025 (in millions) | 2024 (in millions) | | :---------------------- | :----- | :----- | | Second Quarter | $0.2 | — | | Six Months | $0.3 | — | - Restructuring expenses were primarily from continued miscellaneous manufacturing realignment activities[100](index=100&type=chunk) [Operating Income](index=32&type=section&id=Operating%20Income) Consolidated operating income increased 11% in Q2 and 4% for six months, driven by Energy Systems and Distribution Consolidated Operating Income (in millions) | Period | 2025 (in millions) | 2024 (in millions) | Change (2025 vs 2024, in millions) | | :---------------------- | :----- | :----- | :-------------------- | | Second Quarter | $88.1 | $79.1 | $9.0 (11% increase) | | Six Months | $132.2 | $127.1 | $5.1 (4% increase) | - Water Systems operating income decreased by **$0.5 million** in Q2 and **$4.2 million** for the six months, with margins declining due to acquisition expenses and unfavorable sales mix[103](index=103&type=chunk) - Energy Systems operating income increased by **$3.1 million** in Q2 and **$6.2 million** for the six months, with margins improving due to higher sales, price realization, cost management, and favorable product mix[104](index=104&type=chunk) - Distribution operating income increased by **$6.3 million** in Q2 and **$6.5 million** for the six months, with margins improving due to higher sales and reduced SG&A expenses[105](index=105&type=chunk) [Interest Expense](index=34&type=section&id=Interest%20Expense) Interest expense increased to $2.8 million in Q2 and $4.6 million for six months due to higher outstanding debt Interest Expense (in millions) | Period | 2025 (in millions) | 2024 (in millions) | | :---------------------- | :----- | :----- | | Second Quarter | $2.8 | $2.0 | | Six Months | $4.6 | $3.4 | - The increase in interest expense was primarily driven by a higher average amount of outstanding debt[107](index=107&type=chunk) [Other Income, Net](index=34&type=section&id=Other%20Income%2C%20Net) Reports a net loss of $(0.2) million in Q2 2025 and a net gain of $0.7 million for the six months Other Income (Expense), Net (in millions) | Period | 2025 (in millions) | 2024 (in millions) | | :---------------------- | :----- | :----- | | Second Quarter | $(0.2) | $0.2 | | Six Months | $0.7 | $0.9 | [Foreign Exchange](index=34&type=section&id=Foreign%20Exchange) Foreign exchange expense increased to $4.5 million in Q2 and $5.8 million for six months due to Argentine Peso and Turkish Lira Foreign Exchange Expense, Net (in millions) | Period | 2025 (in millions) | 2024 (in millions) | | :---------------------- | :----- | :----- | | Second Quarter | $4.5 | $0.4 | | Six Months | $5.8 | $5.3 | - The expenses are primarily due to transaction losses associated with the Argentine Peso and Turkish Lira relative to the U.S. dollar, as the Company reports results from subsidiaries in these hyperinflationary economies using highly inflationary accounting[109](index=109&type=chunk) [Income Taxes](index=34&type=section&id=Income%20Taxes) Income tax expense increased, with the effective tax rate rising to 24.9% due to foreign earnings mix and reduced FDII benefit Income Tax Expense (in millions) | Period | 2025 (in millions) | 2024 (in millions) | | :---------------------- | :----- | :----- | | Second Quarter | $20.1 | $17.6 | | Six Months | $30.5 | $26.8 | Effective Tax Rate | Period | 2025 | 2024 | | :---------------------- | :----- | :----- | | Second Quarter | 24.9% | 22.9% | | Six Months | 24.9% | 22.5% | - The increase in the effective tax rate was due to a mix of foreign earnings taxed at different rates than the U.S. statutory rate, a decreased benefit from the U.S. foreign-derived intangible income (FDII) provision, and less favorable discrete events[110](index=110&type=chunk) [Net Income](index=34&type=section&id=Net%20Income) Net income attributable to Franklin Electric increased to $60.1 million in Q2 2025, but slightly decreased for six months Net Income Attributable to Franklin Electric Co., Inc. (in millions, except per share amounts) | Period | Net Income (in millions) | Diluted EPS | | :---------------------- | :--------- | :---------- | | Q2 2025 | $60.1 | $1.31 | | Q2 2024 | $59.1 | $1.26 | | 6 Months 2025 | $91.1 | $1.97 | | 6 Months 2024 | $92.1 | $1.97 | [Capital Resources and Liquidity](index=36&type=section&id=Capital%20Resources%20and%20Liquidity) Discusses the Company's liquidity sources, including cash, operating cash flows, and credit facilities, and their sufficiency for future needs [Sources of Liquidity](index=36&type=section&id=Sources%20of%20Liquidity) Liquidity supported by cash, operating cash flows, a $350.0 million revolving credit facility, and $175.0 million NYL borrowing capacity - Primary liquidity sources are cash on hand, cash flows from operations, revolving credit agreements, and long-term debt funds[112](index=112&type=chunk) - As of June 30, 2025, the Company had a **$350.0 million** revolving credit facility maturing May 14, 2030, with **$159.4 million** available capacity[113](index=113&type=chunk) - A private shelf agreement with NYL Investors LLC has a remaining borrowing capacity of **$175.0 million** as of June 30, 2025, maturing May 15, 2027[114](index=114&type=chunk) - The Company held **$97.6 million** of cash and cash equivalents in foreign jurisdictions, intended for foreign operations, with no current intent to repatriate the majority for domestic funding[116](index=116&type=chunk) [Cash Flows](index=36&type=section&id=Cash%20Flows) Operating cash flow decreased, investing cash flow increased due to acquisitions, and financing cash flow decreased due to higher net debt borrowings Summary of Cash Flows (in millions) for Six Months Ended June 30 | Metric | 2025 (in millions) | 2024 (in millions) | | :------------------------------------------ | :----- | :----- | | Net cash flows from operating activities | $32.0 | $35.0 | | Net cash flows from investing activities | $(127.3) | $(20.2) | | Net cash flows from financing activities | $(22.1) | $(38.7) | | Impact of exchange rates on cash and cash equivalents | $1.5 | $(3.0) | | **Change in cash and cash equivalents** | **$(115.9)** | **$(26.9)** | - The change in operating cash flow was primarily attributable to changes in working capital[119](index=119&type=chunk) - The change in investing cash flow was primarily attributable to the Barnes and PumpEng acquisitions in the first six months of 2025[120](index=120&type=chunk) - The change in financing cash flow was primarily due to higher net borrowings under the Company's credit facility in 2025 compared to 2024, partially offset by increased repurchases of Company stock[121](index=121&type=chunk) [Factors That May Affect Future Results](index=38&type=section&id=Factors%20That%20May%20Affect%20Future%20Results) Outlines forward-looking statements and potential risks from economic conditions, market demand, competition, supply, and regulatory actions - Forward-looking statements involve risks and uncertainties, and actual results may differ materially due to factors such as economic and currency conditions, market demand, competitive factors, supply constraints, raw material costs, and integration of acquisitions[122](index=122&type=chunk) - Government and regulatory actions, including changes in tariffs and their impact on financial results, are significant risk factors[122](index=122&type=chunk) - The Company does not assume any obligation to update any forward-looking information, except as required by law[122](index=122&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No significant changes in the Company's exposure to market risk during Q2 ended June 30, 2025 - No significant changes in the Company's exposure to market risk during the second quarter ended June 30, 2025[124](index=124&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The Company's disclosure controls and procedures were effective as of June 30, 2025, based on evaluation by management, including the CEO and CFO[125](index=125&type=chunk) - No material changes in the Company's internal control over financial reporting were identified during the last fiscal quarter[126](index=126&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The Company is defending various legal claims, including a material proceeding in France, not expected to materially affect financials - The Company is defending various claims and legal actions, including a material legal proceeding in France (refer to Note 6)[129](index=129&type=chunk) - Management believes other claims and legal actions can be defended or resolved without a material effect on the Company's financial position, results of operations, and net cash flows[129](index=129&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors, except for increased risks related to foreign trade policies and tariffs - No material changes to risk factors, other than those related to changes in foreign trade policies and tariffs[130](index=130&type=chunk) - Significant trade policy and tariff actions by the U.S. government have increased raw material and component costs and created uncertainty, potentially having a material adverse effect on financial statements[131](index=131&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Board approved additional share repurchases, with 1,384,849 shares repurchased in Q2 2025 for $120.3 million - In June 2025, the Board of Directors approved an additional **1,200,000** shares for repurchase, bringing the total available for repurchase to **1,126,635** shares as of June 30, 2025[132](index=132&type=chunk) Issuer Repurchases of Equity Securities (Q2 2025) | Period | Total Number of Shares Repurchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan | Maximum Number of Shares that may yet to be Repurchased | | :---------------- | :------------------------------- | :--------------------------- | :---------------------------------------------------------- | :---------------------------------------------------- | | April 1 - April 30 | 143,891 | $87.93 | 143,891 | 1,167,593 | | May 1 - May 31 | 40,958 | $86.34 | 40,958 | 1,126,635 | | June 1 - June 30 | 1,200,000 | $86.78 | 1,200,000 | 1,126,635 | | **Total** | **1,384,849** | **$86.89** | **1,384,849** | **1,126,635** | [Item 5. Other Information](index=40&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers during Q2 2025 - None of the Company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the fiscal quarter ended June 30, 2025[134](index=134&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with Form 10-Q, including corporate governance documents, employment agreements, and financial information - Exhibits include corporate governance documents (Articles of Incorporation, Bylaws), employment-related agreements (Promotion Letter, Retirement Agreements, Employment Security Agreements, Confidentiality and Non-Compete Agreements), and the Fifth Amended and Restated Credit Agreement[135](index=135&type=chunk) - Also included are a Share Repurchase Agreement, CEO and CFO certifications under Sarbanes-Oxley Act, and financial information in Inline XBRL format[135](index=135&type=chunk) [Signatures](index=43&type=section&id=Signatures) Report duly signed by Joseph A. Ruzynski, CEO, and Jennifer A. Wolfenbarger, CFO, on July 31, 2025 - The report is signed by Joseph A. Ruzynski, Chief Executive Officer, and Jennifer A. Wolfenbarger, Vice President and Chief Financial Officer, on July 31, 2025[138](index=138&type=chunk)

分组1 - Franklin Electric reported quarterly earnings of $1.31 per share, exceeding the Zacks Consensus Estimate of $1.28 per share, and showing an increase from $1.26 per share a year ago, resulting in an earnings surprise of +2.34% [1] - The company achieved revenues of $587.43 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.60%, compared to $543.26 million in the same quarter last 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 underperformed the market, losing about 4.2% since the beginning of the year, while the S&P 500 has gained 8.6% [3] - The current consensus EPS estimate for the coming quarter is $1.29 on revenues of $564.5 million, and for the current fiscal year, it is $4.11 on revenues of $2.1 billion [7] - The Manufacturing - Electronics industry, to which Franklin Electric belongs, is currently ranked in the top 17% of over 250 Zacks industries, indicating a favorable outlook [8]