Franklin Electric Reports Third Quarter 2024 Results
Third Quarter 2024 Highlights
Consolidated net sales of $531.4 million, a decrease of 1% to the prior year
Water Systems and Distribution net sales increased 2% and 1%, respectively, while Fueling Systems net sales decreased 10%
Operating income was $73.5 million with operating margin of 13.8%
GAAP fully diluted earnings per share (EPS) was $1.17
FORT WAYNE, Ind., Oct. 29, 2024 (GLOBE NEWSWIRE) -- Franklin Electric Co., Inc. today announced its third quarter financial results for fiscal year 2024.
Third quarter 2024 net sales were $531.4 million, compared to third quarter 2023 net sales of $538.4 million. Third quarter 2024 operating income was $73.5 million, compared to third quarter 2023 operating income of $78.1 million. Third quarter 2024 EPS was $1.17, versus EPS in the third quarter 2023 of $1.23.
"Our third quarter results were softer than expected due to continued macro pressure from lower home sales and starts, along with weather being wetter than normal. However, the demand environment remains healthy across our key end markets, which has normalized following record levels of sales in recent years. Margins remained stable due to our disciplined cost management, and we are actively pursuing opportunities to further reduce expenses across the enterprise," commented Joe Ruzynski, Franklin Electric's CEO.
"As we close out the year, we expect tempered order activity in-line with seasonal patterns. That said, having spent time with our incredible global team members over the past few months, I am energized by the potential of Franklin Electric. With our wide range of capabilities, strategic footprint, and flexible balance sheet, we have the ability to drive differentiated growth and accelerate productivity for years to come," concluded Mr. Ruzynski.
Segment Summaries
Water Systems net sales were $302.2 million, a new third quarter record, an increase of $6.4 million or 2 percent compared to the third quarter 2023. The sales increase was driven by higher sales of groundwater products, all other surface products and water treatment products. The sales increase was partially offset by lower sales of large dewatering pumps, which had a record quarter last year. Water Systems operating income in the third quarter 2024 was $52.8 million, a new third quarter record. Third quarter 2023 Water Systems operating income was $52.7 million.
Distribution net sales were $190.8 million, an increase of $1.6 million or 1 percent compared to the third quarter 2023. Sales increases were driven by sales from a recent acquisition. The Distribution segment operating income in the third quarter 2024 was $12.2 million. Third quarter 2023 Distribution operating income was $10.7 million.
Fueling Systems net sales were $69.7 million in the third quarter 2024, a decrease of $8.0 million or 10 percent compared to the third quarter 2023. Sales decreases were driven by lower volumes. Fueling Systems operating income in the third quarter 2024 was $24.1 million. Third quarter 2023 Fueling Systems operating income was $25.8 million.
2024 Guidance
The Company is lowering its sales guidance for full year 2024 to be approximately $2.00 billion and reducing its EPS guidance for full year 2024 to be in the range of $3.75 to $3.85 which incorporates the Company's first nine months performance and its outlook for the fourth quarter.
Earnings Conference Call
A conference call to review earnings and other developments in the business will commence at 9:00 am ET. The third 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/cp5pmtx9
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/BIa5e3e952cc2d47c28144fef8683c97e0
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, October 29, 2024, through 9:00 am ET on Tuesday, November 5, 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 Contact:
Jeffery L. TaylorFranklin Electric Co.,
FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
Third Quarter Ended
Nine Months Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
Net sales
$
531,438
$
538,431
$
1,535,596
$
1,592,163
Cost of sales
341,775
352,178
982,556
1,055,164
Gross profit
189,663
186,253
553,040
536,999
Selling, general, and administrative expenses
115,998
107,687
352,290
324,651
Restructuring expense
139
462
139
735
Operating income
73,526
78,104
200,611
211,613
Interest expense
(1,556
)
(2,984
)
(4,980
)
(10,309
)
Other (expense) income, net
(181
)
277
709
1,865
Foreign exchange income (expense), net
88
(2,483
)
(5,228
)
(8,098
)
Income before income taxes
71,877
72,914
191,112
195,071
Income tax expense
16,983
14,746
43,795
39,167
Net income
$
54,894
$
58,168
$
147,317
$
155,904
Less: Net income attributable to noncontrolling interests
(298
)
(370
)
(663
)
(1,181
)
Net income attributable to Franklin Electric Co., Inc.
$
54,596
$
57,798
$
146,654
$
154,723
Earnings per share:
