Franklin Electric(US:FELE)2025-02-21 21:07Financial Performance - Net sales for 2024 were $2.0 billion, a decrease of 2% compared to 2023, primarily due to lower volumes and negative foreign currency translation impacts[87]. - Consolidated gross profit increased to $717.3 million in 2024, up $20.3 million from the prior year, resulting in a gross profit margin of 35.5%[86][95]. - Diluted earnings per share for 2024 were $3.86, a decrease of $0.25 or 6% from the prior year[86]. - Net income for 2024 was $181.6 million, down from $194.7 million in 2023, with net income attributable to Franklin Electric Co., Inc. at $180.3 million[108]. - Cash flows from operating activities were $261.4 million in 2024, a decrease from $315.7 million in 2023, primarily due to changes in working capital[114]. Sales Performance by Segment - Water Systems net sales decreased by 2% in 2024, with a significant 41% decline in sales of large dewatering equipment[89][90]. - Energy Systems net sales decreased by 8% in 2024, with a 3% decline in the U.S. and Canada and an 18% decline outside these regions[92]. - Distribution segment net sales increased by 2% in 2024, primarily due to a recent acquisition that contributed 3% to net sales[93]. Expenses and Obligations - SG&A expenses rose to $470.1 million in 2024, up from $433.5 million in 2023, with an SG&A ratio of 23.3%[96]. - The Company has total contractual obligations of $229.8 million, with $129.5 million in debt and $73.5 million in operating leases[118]. - Future pension and post-retirement benefit obligations are estimated at approximately $7.3 million for 2025, excluding a non-current liability of $24.1 million related to pension plans[119]. Tax and Interest - The Company recorded unrecognized tax benefits of approximately $1.3 million, with potential penalties and interest liabilities of $0.1 million[120]. - Interest payments on debt obligations are projected based on interest rates effective at the end of 2024, with potential future variations[118]. - A hypothetical 100 basis points increase in interest rates would have increased interest expense by $0.3 million during 2024[137]. Future Plans and Acquisitions - The company plans to acquire PumpEng for AUD 24.0 million (approximately $15 million) and has signed an agreement to acquire Barnes for an enterprise value of $110.0 million[116]. Risk Management - The Company mitigates foreign currency exchange rate risk through local production facilities and limited use of foreign currency denominated debt[136]. - The Company estimates that a 10% adverse movement in raw metal commodity prices would result in less than a 1% decrease in gross margin as a percentage of net sales[138]. - The weighted-average discount rate for domestic pension plans increased from 4.90% to 5.48% year-over-year, affecting liabilities[131]. - The expected long-term rate of return on plan assets decreased from 6.20% to 5.75% for 2025, impacting net periodic cost[133]. - The Company had $41.4 million in borrowings under its revolving credit agreement at year-end 2024[137].