Franklin Electric Co., Inc. today announced its second quarter
financial results for fiscal year 2024.
Second quarter 2024 net sales were $543.3
million, compared to second quarter 2023 net sales of $569.1
million. Second quarter 2024 operating income was $79.1 million,
compared to second quarter 2023 operating income of $80.9 million.
Second quarter 2024 EPS was $1.26, versus EPS in the second quarter
2023 of $1.27.
“The Franklin team achieved solid results in the
second quarter, marking one of the strongest quarters from an
earnings perspective in Franklin’s history. We continue to deliver
margin expansion on sales below the record levels reached in the
prior year period. While unfavorable weather continued to adversely
impact sales, strong operational performance in the Water Systems
and Fueling Systems segments helped offset this headwind,”
commented Gregg Sengstack, Franklin Electric’s Executive
Chairperson.
“Franklin Electric’s diverse product line,
customer base, and geographic exposure continue to prove resilient
despite macroeconomic, geopolitical, and weather-related pressures.
These factors, along with our great people and strong working
capital position, give us confidence as we look towards the back
half of the year.”
“It has been an incredible journey working with
the exceptional team here at Franklin Electric. I look forward to
continuing to support our mission and our new CEO, Joe Ruzynski, in
my position as Executive Chairperson.” concluded Mr. Sengstack.
Segment Summaries
Water Systems net sales were
$315.6 million in the second quarter, a decrease of $6.1 million or
2 percent compared to the record second quarter sales of 2023. The
sales decrease was driven by lower sales of large dewatering pumps,
which had a record quarter last year, partially offset by sales
increases in all other surfaces products, water treatment products
and groundwater products. Water Systems operating income in the
second quarter 2024 was $62.3 million, a new quarterly record for
any quarter. Second quarter 2023 Water Systems operating income was
$50.8 million.
Distribution net sales were
$190.5 million, a decrease of $2.6 million or 1 percent compared to
the second quarter 2023. Sales decreases were driven by the
continued negative impact of wet weather across the U.S. that has
delayed contractor installations, partially offset by sales from a
recent acquisition. The Distribution segment operating income in
the second quarter 2024 was $9.8 million. Second quarter 2023
Distribution operating income was $17.8 million.
Fueling Systems net sales were
$73.1 million in the second quarter 2024, a decrease of $7.3
million or 9 percent compared to the second quarter 2023. Sales
decreases were driven by lower volumes. Fueling Systems operating
income in the second quarter 2024 was $26.0 million. Second quarter
2023 Fueling Systems operating income was $26.7 million.
2024 Guidance
The Company is maintaining its sales guidance
for full year 2024 to be in the range of $2.10 billion to $2.17
billion and reducing its EPS guidance for full year 2024 to be in
the range of $4.16 to $4.34 which incorporates the Company’s first
half performance and its outlook for continued solid execution in
the second half while maintaining strong margins similar to the
first half.
Earnings Conference Call
A conference call to review earnings and other
developments in the business will commence at 9:00 am ET. The
second quarter 2024 earnings call will be available via a live
webcast. The webcast will be available in a listen only mode by
going to:
https://edge.media-server.com/mmc/p/f8j7t4wj
For those interested in participating in the
question-and-answer portion of the call, please register for the
call at the link below.
https://register.vevent.com/register/BI8d56cfdc94aa49358360ba12cb42e3e2
All registrants will receive dial-in information
and a PIN allowing them to access the live call. It is recommended
that you join 10 minutes prior to the event start (although you may
register and dial in at any time during the call).
A replay of the conference call will be
available from Tuesday, July 23, 2024, through 9:00 am ET on
Tuesday, July 30, 2024, by visiting the listen-only webcast link
above.
Forward Looking Statements
"Safe Harbor” Statement under the Private
Securities Litigation Reform Act of 1995. Any forward-looking
statements contained herein, including those relating to market
conditions or the Company’s financial results, costs, expenses or
expense reductions, profit margins, inventory levels, foreign
currency translation rates, liquidity expectations, business goals
and sales growth, involve risks and uncertainties, including but
not limited to, risks and uncertainties with respect to general
economic and currency conditions, various conditions specific to
the Company’s business and industry, weather conditions, new
housing starts, market demand, competitive factors, changes in
distribution channels, supply constraints, effect of price
increases, raw material costs, technology factors,
integration of acquisitions, litigation, government and regulatory
actions, the Company’s accounting policies, future trends,
epidemics and pandemics, and other risks which are detailed in the
Company’s Securities and Exchange Commission filings, included in
Item 1A of Part I of the Company’s Annual Report on Form 10-K for
the fiscal year ending December 31, 2023, Exhibit 99.1 attached
thereto and in Item 1A of Part II of the Company’s Quarterly
Reports on Form 10-Q. These risks and uncertainties may cause
actual results to differ materially from those indicated by the
forward-looking statements. All forward-looking statements made
herein are based on information currently available, and the
Company assumes no obligation to update any forward-looking
statements.
About Franklin Electric
Franklin Electric is a global leader in the
production and marketing of systems and components for the movement
of water and energy. Recognized as a technical leader in its
products and services, Franklin Electric serves customers around
the world in residential, commercial, agricultural, industrial,
municipal, and fueling applications. Franklin Electric is proud to
be named in Newsweek’s lists of America’s Most Responsible
Companies and Most Trustworthy Companies for 2023 and America’s
Climate Leaders 2023 by USA Today.
| FRANKLIN ELECTRIC
CO., INC. AND CONSOLIDATED SUBSIDIARIES |
| CONDENSED
CONSOLIDATED STATEMENTS OF INCOME |
| (Unaudited) |
|
|
|
|
|
|
|
|
|
| (In
thousands, except per share amounts) |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
Second Quarter Ended |
|
Six Months Ended |
| |
June 30, 2024 |
|
June 30, 2023 |
|
June 30, 2024 |
|
June 30, 2023 |
| |
|
|
|
|
|
|
|
|
Net sales |
$ |
543,258 |
|
|
$ |
569,181 |
|
|
$ |
1,004,158 |
|
|
$ |
1,053,732 |
|
| |
|
|
|
|
|
|
|
| Cost of
sales |
|
343,461 |
|
|
|
380,700 |
|
|
|
640,781 |
|
|
|
702,986 |
|
| |
|
|
|
|
|
|
|
| Gross
profit |
|
199,797 |
|
|
|
188,481 |
|
|
|
363,377 |
|
|
|
350,746 |
|
| |
|
|
|
|
|
|
|
| Selling,
general, and administrative expenses |
|
120,648 |
|
|
|
107,429 |
|
|
|
236,292 |
|
|
|
216,964 |
|
| |
|
|
|
|
|
|
|
|
Restructuring expense |
|
— |
|
|
|
149 |
|
|
|
— |
|
|
|
273 |
|
| |
|
|
|
|
|
|
|
| Operating
income |
|
79,149 |
|
|
|
80,903 |
|
|
|
127,085 |
|
|
|
133,509 |
|
| |
|
|
|
|
|
|
|
| Interest
expense |
|
(1,976 |
) |
|
|
(4,178 |
) |
|
|
(3,424 |
) |
|
|
(7,325 |
) |
| Other
income, net |
|
184 |
|
|
|
1,179 |
|
|
|
890 |
|
|
|
1,588 |
|
| Foreign
exchange expense |
|
(436 |
) |
|
|
(3,571 |
) |
|
|
(5,316 |
) |
|
|
(5,615 |
) |
| |
|
|
|
|
|
|
|
| Income
before income taxes |
|
76,921 |
|
|
|
74,333 |
|
|
|
119,235 |
|
|
|
122,157 |
|
| |
|
|
|
|
|
|
|
| Income tax
expense |
|
17,590 |
|
|
|
14,173 |
|
|
|
26,812 |
|
|
|
24,421 |
|
| |
|
|
|
|
|
|
|
| Net
income |
$ |
59,331 |
|
|
$ |
60,160 |
|
|
$ |
92,423 |
|
|
$ |
97,736 |
|
| |
|
|
|
|
|
|
|
| Less: Net
income attributable to noncontrolling interests |
|
(232 |
) |
|
|
(560 |
) |
|
|
(365 |
) |
|
|
(811 |
) |
| |
|
|
|
|
|
|
|
| Net income
attributable to Franklin Electric Co., Inc. |
$ |
59,099 |
|
|
$ |
59,600 |
|
|
$ |
92,058 |
|
|
$ |
96,925 |
|
| |
|
|
|
|
|
|
|
| Earnings per
share: |
|
|
|
|
|
|
|
|
Basic |
$ |
1.28 |
|
|
$ |
1.29 |
|
|
$ |
1.99 |
|
|
$ |
2.09 |
|
|
Diluted |
$ |
1.26 |
|
|
$ |
1.27 |
|
|
$ |
1.97 |
|
|
$ |
2.06 |
|
| FRANKLIN ELECTRIC
CO., INC. AND CONSOLIDATED SUBSIDIARIES |
| CONDENSED
CONSOLIDATED BALANCE SHEETS |
| (Unaudited) |
| |
|
|
|
| (In
thousands) |
|
|
|
| |
|
|
|
| |
June 30, 2024 |
|
December 31, 2023 |
| ASSETS |
|
|
|
| |
|
|
|
|
Cash and cash equivalents |
$ |
58,104 |
|
|
$ |
84,963 |
|
| Receivables
(net) |
|
299,185 |
|
|
|
222,418 |
|
|
Inventories |
|
525,435 |
|
|
|
508,696 |
|
| Other
current assets |
|
35,972 |
|
|
|
37,718 |
|
|
Total current assets |
|
918,696 |
|
|
|
853,795 |
|
| |
|
|
|
| Property,
plant, and equipment, net |
|
224,196 |
|
|
|
229,739 |
|
| Lease
right-of-use assets, net |
|
63,270 |
|
|
|
57,014 |
|
| Goodwill and
other assets |
|
578,184 |
|
|
|
587,574 |
|
|
Total assets |
$ |
1,784,346 |
|
|
$ |
1,728,122 |
|
| |
|
|
|
| |
|
|
|
| LIABILITIES
AND EQUITY |
|
|
|
| |
|
|
|
| Accounts
payable |
$ |
175,553 |
|
|
$ |
152,419 |
|
| Accrued
expenses and other current liabilities |
|
109,888 |
|
|
|
104,949 |
|
| Current
lease liability |
|
18,274 |
|
|
|
17,316 |
|
| Current
maturities of long-term debt and short-term borrowings |
|
42,375 |
|
|
|
12,355 |
|
|
Total current liabilities |
|
346,090 |
|
|
|
287,039 |
|
| |
|
|
|
| Long-term
debt |
|
87,242 |
|
|
|
88,056 |
|
| Long-term
lease liability |
|
43,638 |
|
|
|
38,549 |
|
| Income taxes
payable non-current |
|
- |
|
|
|
4,837 |
|
| Deferred
income taxes |
|
29,529 |
|
|
|
29,461 |
|
| Employee
benefit plans |
|
29,931 |
|
|
|
35,973 |
|
| Other
long-term liabilities |
|
21,886 |
|
|
|
33,914 |
|
|
|
| Redeemable
noncontrolling interest |
|
1,134 |
|
|
|
1,145 |
|
| |
|
|
|
| Total
equity |
|
1,224,896 |
|
|
|
1,209,148 |
|
|
Total liabilities and equity |
$ |
1,784,346 |
|
|
$ |
1,728,122 |
|
| FRANKLIN ELECTRIC
CO., INC. AND CONSOLIDATED SUBSIDIARIES |
| CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (Unaudited) |
| |
Six Months Ended |
| (In
thousands) |
|
|
|
| |
June 30, 2024 |
|
June 30, 2023 |
| Cash flows
from operating activities: |
|
|
|
|
Net income |
$ |
92,423 |
|
|
$ |
97,736 |
|
|
Adjustments to reconcile net income to net cash flows from
operating activities: |
|
|
|
|
Depreciation and amortization |
|
27,690 |
|
|
|
26,259 |
|
|
Non-cash lease expense |
|
10,105 |
|
|
|
8,523 |
|
|
Share-based compensation |
|
7,015 |
|
|
|
6,410 |
|
|
Other |
|
4,315 |
|
|
|
7,896 |
|
|
Changes in assets and liabilities: |
|
|
|
|
Receivables |
|
(82,828 |
) |
|
|
(70,725 |
) |
|
Inventory |
|
(23,982 |
) |
|
|
(24,125 |
) |
|
Accounts payable and accrued expenses |
|
13,171 |
|
|
|
(3,880 |
) |
|
Operating leases |
|
(10,314 |
) |
|
|
(8,706 |
) |
|
Income taxes-U.S. Tax Cuts and Jobs Act |
|
(3,870 |
) |
|
|
(2,902 |
) |
|
Other |
|
1,278 |
|
|
|
6,540 |
|
| |
|
|
|
| Net cash
flows from operating activities |
|
35,003 |
|
|
|
43,026 |
|
| |
|
|
|
| Cash flows
from investing activities: |
|
|
|
|
Additions to property, plant, and equipment |
|
(19,445 |
) |
|
|
(20,241 |
) |
|
Proceeds from sale of property, plant, and equipment |
|
418 |
|
|
|
- |
|
|
Acquisitions and investments |
|
(1,151 |
) |
|
|
(6,641 |
) |
|
Other investing activities |
|
21 |
|
|
|
2 |
|
|
|
|
|
|
| Net cash
flows from investing activities |
|
(20,157 |
) |
|
|
(26,880 |
) |
| |
|
|
|
| Cash flows
from financing activities: |
|
|
|
|
Net change in debt |
|
29,183 |
|
|
|
32,171 |
|
|
Proceeds from issuance of common stock |
|
4,302 |
|
|
|
9,010 |
|
|
Purchases of common stock |
|
(47,895 |
) |
|
|
(25,541 |
) |
|
Dividends paid |
|
(23,980 |
) |
|
|
(20,872 |
) |
|
Deferred payments for acquisitions |
|
(348 |
) |
|
|
(186 |
) |
|
|
|
|
|
| Net cash
flows from financing activities |
|
(38,738 |
) |
|
|
(5,418 |
) |
| |
|
|
|
| Effect of
exchange rate changes on cash and cash equivalents |
|
(2,967 |
) |
|
|
(3,291 |
) |
| Net change
in cash and cash equivalents |
|
(26,859 |
) |
|
|
7,437 |
|
| Cash and
cash equivalents at beginning of period |
|
84,963 |
|
|
|
45,790 |
|
| Cash and
cash equivalents at end of period |
$ |
58,104 |
|
|
$ |
53,227 |
|
Key Performance Indicators: Net Sales
Summary
| |
|
|
|
|
|
|
|
|
|
| |
Net
Sales |
| |
United States |
Latin |
Europe, Middle |
Asia |
Total |
|
|
|
|
| (in
millions) |
& Canada |
America |
East &
Africa |
Pacific |
Water |
Fueling |
Distribution |
Other/Elims |
Consolidated |
| |
|
|
|
|
|
|
|
|
|
| Q2 2023 |
$202.9 |
|
$42.0 |
|
$54.6 |
|
$22.2 |
|
$321.7 |
|
$80.4 |
|
$193.1 |
|
($26.1 |
) |
$569.1 |
|
| Q2 2024 |
$193.6 |
|
$41.8 |
|
$56.0 |
|
$24.2 |
|
$315.6 |
|
$73.1 |
|
$190.5 |
|
($35.9 |
) |
$543.3 |
|
| Change |
($9.3 |
) |
($0.2 |
) |
$1.4 |
|
$2.0 |
|
($6.1 |
) |
($7.3 |
) |
($2.6 |
) |
($9.8 |
) |
($25.8 |
) |
| %
Change |
|
-5 |
% |
|
0 |
% |
|
3 |
% |
|
9 |
% |
|
-2 |
% |
|
-9 |
% |
|
-1 |
% |
|
|
-5 |
% |
| |
|
|
|
|
|
|
|
|
|
| Foreign
currency translation, net* |
($0.3 |
) |
($1.2 |
) |
($2.6 |
) |
($0.8 |
) |
($4.9 |
) |
($0.1 |
) |
$0.0 |
|
|
($5.0 |
) |
| %
Change |
|
0 |
% |
|
-3 |
% |
|
-5 |
% |
|
-4 |
% |
|
-2 |
% |
|
0 |
% |
|
0 |
% |
|
|
-1 |
% |
| |
|
|
|
|
|
|
|
|
|
|
Acquisitions |
$4.9 |
|
$0.0 |
|
$0.0 |
|
$0.0 |
|
$4.9 |
|
$0.0 |
|
$4.7 |
|
|
$9.6 |
|
| %
Change |
|
2 |
% |
|
0 |
% |
|
0 |
% |
|
0 |
% |
|
2 |
% |
|
0 |
% |
|
2 |
% |
|
|
2 |
% |
| |
|
|
|
|
|
|
|
|
|
|
Volume/Price |
($13.8 |
) |
$1.0 |
|
$3.9 |
|
$2.8 |
|
($6.1 |
) |
($7.2 |
) |
($7.3 |
) |
($9.8 |
) |
($30.4 |
) |
|
% Change |
|
-7 |
% |
|
2 |
% |
|
7 |
% |
|
13 |
% |
|
-2 |
% |
|
-9 |
% |
|
-4 |
% |
|
38 |
% |
|
-5 |
% |
| |
|
|
|
|
|
|
|
|
|
| *The Company has
presented local currency price increases used to offset currency
devaluation in the Argentina and Turkey hyperinflationary economies
within the foreign currency translation, net row above. |
Key Performance Indicators: Operating
Income and Margin Summary
| |
|
|
|
|
|
|
Operating Income and Margins |
|
|
|
|
|
| (in
millions) |
For the
Second Quarter 2024 |
| |
Water |
Fueling |
Distribution |
Other/Elims |
Consolidated |
|
Operating Income / (Loss) |
$ |
62.3 |
|
$ |
26.0 |
|
$ |
9.8 |
|
$ |
(19.0 |
) |
$ |
79.1 |
|
| % Operating
Income To Net Sales |
|
19.7 |
% |
|
35.6 |
% |
|
5.1 |
% |
|
|
14.6 |
% |
| |
|
|
|
|
|
| |
|
|
|
|
|
|
Operating Income and Margins |
|
|
|
|
|
| (in
millions) |
For the
Second Quarter 2023 |
| |
Water |
Fueling |
Distribution |
Other/Elims |
Consolidated |
| Operating
Income / (Loss) |
$ |
50.8 |
|
$ |
26.7 |
|
$ |
17.8 |
|
$ |
(14.4 |
) |
$ |
80.9 |
|
| % Operating
Income To Net Sales |
|
15.8 |
% |
|
33.2 |
% |
|
9.2 |
% |
|
|
14.2 |
% |
| |
|
|
|
|
|
Franklin Electric Contact:
Jeffery L. Taylor
Franklin Electric Co., Inc.
InvestorRelations@fele.com
Grafico Azioni Franklin Electric (NASDAQ:FELE)
Storico
Da Gen 2025 a Feb 2025
Grafico Azioni Franklin Electric (NASDAQ:FELE)
Storico
Da Feb 2024 a Feb 2025
