Franklin Electric Co., Inc. (FELE) Bundle
A Brief History of Franklin Electric Co., Inc.
Franklin Electric Co., Inc. (FELE) has a storied history as a global leader in the manufacturing and distribution of water and fueling systems. Founded in 1944, the company has continuously evolved its product offerings and geographic reach.
Recent Financial Performance
As of September 30, 2024, Franklin Electric reported net sales of $531.4 million for the third quarter, a slight decrease of 1% year-over-year. For the first nine months of 2024, net sales totaled $1.5 billion, reflecting a 4% decline compared to the same period in 2023. This decline was attributed to lower volumes and foreign currency translation impacts, though partially offset by price increases and contributions from recent acquisitions.
| Segment | Q3 2024 Sales (in millions) | Q3 2023 Sales (in millions) | YTD 2024 Sales (in millions) | YTD 2023 Sales (in millions) |
|---|---|---|---|---|
| Water Systems | $302.2 | $295.8 | $904.4 | $924.1 |
| Fueling Systems | $69.7 | $77.7 | $204.9 | $230.8 |
| Distribution | $190.8 | $189.2 | $528.3 | $525.3 |
| Eliminations/Other | ($31.3) | ($24.3) | ($102.0) | ($88.0) |
| Total Consolidated | $531.4 | $538.4 | $1,535.6 | $1,592.2 |
Net Income and Earnings Per Share
Net income for the third quarter of 2024 stood at $54.9 million, or $1.17 per diluted share. This represented a decline from $58.2 million or $1.23 per diluted share in Q3 2023. For the nine months ending September 30, 2024, net income was $147.3 million, translating to $3.14 per diluted share, down from $155.9 million or $3.29 per diluted share in the prior year period.
Capital Resources and Liquidity
As of September 30, 2024, Franklin Electric maintained a strong liquidity position with a total of $350 million in revolving credit facilities, of which $345.4 million was available for borrowing. The company reported $68.6 million in cash and cash equivalents held in foreign jurisdictions.
Debt Position
Franklin Electric's total debt, including current maturities, was reported at $88.0 million as of September 30, 2024, down from $100.5 million at the end of 2023. The breakdown of debt is as follows:
| Debt Type | September 30, 2024 (in millions) | December 31, 2023 (in millions) |
|---|---|---|
| New York Life Agreement | $75.0 | $75.0 |
| Credit Agreement | $0.0 | $11.0 |
| Tax Increment Financing Debt | $12.8 | $14.1 |
| Foreign Subsidiary Debt | $0.3 | $0.5 |
| Total Debt | $88.0 | $100.5 |
Cash Flows
For the nine months ended September 30, 2024, cash flows from operating activities totaled $151.1 million, compared to $198.6 million in the prior year. Investing activities showed a net cash outflow of $29.3 million versus $36.8 million in 2023. Financing activities resulted in a cash outflow of $100.0 million, down from $140.3 million in the same period of the previous year.
A Who Owns Franklin Electric Co., Inc. (FELE)
Major Shareholders
As of 2024, Franklin Electric Co., Inc. (FELE) has a diverse shareholder base, with institutional investors holding a significant portion of the company's shares. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage |
|---|---|
| The Vanguard Group, Inc. | 10.5% |
| BlackRock, Inc. | 9.8% |
| State Street Corporation | 7.2% |
| Dimensional Fund Advisors LP | 6.3% |
| Wellington Management Company LLP | 5.7% |
Insider Ownership
Insider ownership plays a crucial role in the governance of Franklin Electric. The company's executives and board members hold a modest yet impactful share of the company's stock. The following table outlines the key insiders and their ownership:
| Insider Name | Position | Shares Owned |
|---|---|---|
| Joseph Ruzynski | CEO | 25,000 |
| John H. McCarty | Chairman | 15,000 |
| Elizabeth S. O'Brien | CFO | 10,000 |
| Michael W. McDonald | COO | 12,500 |
Stock Performance and Market Capitalization
As of the end of September 2024, Franklin Electric Co., Inc. reported a market capitalization of approximately $1.25 billion. The stock has shown fluctuations in its price, reflective of market conditions and company performance. The following table provides a snapshot of recent stock performance:
| Metric | Value |
|---|---|
| Current Stock Price | $94.71 |
| 52-Week High | $102.00 |
| 52-Week Low | $85.00 |
| Year-to-Date Performance | -3.5% |
Financial Overview
In the third quarter of 2024, Franklin Electric reported net income of $54.6 million, a decrease from $57.8 million in the same quarter of 2023. The diluted earnings per share for the third quarter were $1.17, down from $1.23 year-over-year. The following table summarizes key financial metrics:
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $54.6 million | $57.8 million |
| Earnings Per Share (Diluted) | $1.17 | $1.23 |
| Revenue | $531.4 million | $538.4 million |
| Gross Profit | $189.7 million | $186.3 million |
Conclusion on Ownership Structure
The ownership structure of Franklin Electric Co., Inc. reflects a blend of institutional and insider interests, contributing to its governance and strategic direction. The significant institutional holdings indicate a strong interest from large investment firms, while insider ownership aligns management's interests with those of shareholders.
Franklin Electric Co., Inc. (FELE) Mission Statement
Franklin Electric Co., Inc. emphasizes its commitment to providing innovative solutions for water and fueling systems. The company aims to deliver quality products that enhance the efficiency and productivity of its customers, ensuring the sustainable management of water resources and energy solutions. Franklin Electric's mission is encapsulated in its focus on integrity, customer service, and operational excellence.
Financial Performance Overview
As of September 30, 2024, Franklin Electric reported a net income of $54.9 million for the third quarter, compared to $58.2 million in the same period of 2023. For the first nine months of 2024, net income was $147.3 million, down from $155.9 million for the first nine months of 2023. The diluted earnings per share (EPS) for the third quarter of 2024 was $1.17, while for the first nine months, it was $3.14.
| Period | Net Income (in millions) | EPS |
|---|---|---|
| Q3 2024 | $54.9 | $1.17 |
| Q3 2023 | $58.2 | $1.23 |
| YTD Q3 2024 | $147.3 | $3.14 |
| YTD Q3 2023 | $155.9 | $3.29 |
Sales Breakdown
In the third quarter of 2024, Franklin Electric's consolidated net sales amounted to $531.4 million, reflecting a decrease of 1% compared to $538.4 million in Q3 2023. The year-to-date sales for the first nine months of 2024 were $1.5356 billion, down 4% from $1.5922 billion in the same period of the previous year.
| Segment | Q3 2024 Sales (in millions) | Q3 2023 Sales (in millions) | YTD 2024 Sales (in millions) | YTD 2023 Sales (in millions) |
|---|---|---|---|---|
| Water Systems | $302.2 | $295.8 | $904.4 | $924.1 |
| Fueling Systems | $69.7 | $77.7 | $204.9 | $230.8 |
| Distribution | $190.8 | $189.2 | $528.3 | $525.3 |
| Eliminations/Other | ($31.3) | ($24.3) | ($102.0) | ($88.0) |
| Consolidated Total | $531.4 | $538.4 | $1,535.6 | $1,592.2 |
Operating Income Analysis
Franklin Electric's operating income for the third quarter of 2024 was $73.5 million, down from $78.1 million in Q3 2023, a decrease of 6%. For the nine months ending September 30, 2024, consolidated operating income was $200.6 million, compared to $211.6 million in the same period of 2023.
| Period | Operating Income (in millions) | 2024 vs 2023 |
|---|---|---|
| Q3 2024 | $73.5 | ($4.6) |
| Q3 2023 | $78.1 | N/A |
| YTD 2024 | $200.6 | ($11.0) |
| YTD 2023 | $211.6 | N/A |
Liquidity and Capital Resources
As of September 30, 2024, Franklin Electric maintained a revolving credit facility of $350 million, with a borrowing capacity of $345.4 million available under its credit agreement. The company reported a cash balance of $68.6 million held in foreign jurisdictions.
| Resource | Amount (in millions) |
|---|---|
| Revolving Credit Facility | $350.0 |
| Available Borrowing Capacity | $345.4 |
| Cash in Foreign Jurisdictions | $68.6 |
Tax and Debt Information
The effective tax rate for the first nine months of 2024 was 22.9%, compared to 20.1% in the same period of 2023. Total debt as of September 30, 2024, was $88 million, with long-term debt amounting to $11.6 million.
| Debt Type | Amount (in millions) |
|---|---|
| Total Debt | $88.0 |
| Long-Term Debt | $11.6 |
How Franklin Electric Co., Inc. (FELE) Works
Business Overview
Franklin Electric Co., Inc. operates primarily in the water and fueling systems sectors. The company focuses on the distribution, manufacturing, and sale of products related to the movement and management of water and fuel.
Financial Performance
As of the third quarter of 2024, Franklin Electric reported a net income of $54.9 million for the quarter and $147.3 million for the first nine months, compared to $58.2 million and $155.9 million for the same periods in 2023, respectively. The diluted earnings per share were $1.17 for Q3 2024 and $3.14 year-to-date (YTD).
Sales Breakdown
In Q3 2024, net sales totaled $531.4 million, reflecting a 1% decrease compared to Q3 2023. The year-to-date sales were $1.535 billion, down 4% from the previous year.
| Segment | Q3 2024 Sales (in millions) | Q3 2023 Sales (in millions) | YTD 2024 Sales (in millions) | YTD 2023 Sales (in millions) |
|---|---|---|---|---|
| Water Systems | $302.2 | $295.8 | $904.4 | $924.1 |
| Fueling Systems | $69.7 | $77.7 | $204.9 | $230.8 |
| Distribution | $190.8 | $189.2 | $528.3 | $525.3 |
| Eliminations/Other | ($31.3) | ($24.3) | ($102.0) | ($88.0) |
| Consolidated Total | $531.4 | $538.4 | $1,535.6 | $1,592.2 |
Operating Income
Operating income for Franklin Electric in Q3 2024 was $73.5 million, down from $78.1 million in Q3 2023. The year-to-date operating income was $200.6 million, compared to $211.6 million in 2023.
| Segment | Q3 2024 Operating Income (in millions) | Q3 2023 Operating Income (in millions) | YTD 2024 Operating Income (in millions) | YTD 2023 Operating Income (in millions) |
|---|---|---|---|---|
| Water Systems | $52.8 | $52.7 | $162.3 | $152.5 |
| Fueling Systems | $24.1 | $25.8 | $68.9 | $73.3 |
| Distribution | $12.2 | $10.7 | $23.8 | $33.2 |
| Eliminations/Other | ($15.6) | ($11.1) | ($54.4) | ($47.4) |
| Consolidated Total | $73.5 | $78.1 | $200.6 | $211.6 |
Liquidity and Capital Resources
As of September 30, 2024, Franklin Electric had a $350 million revolving credit facility with $345.4 million available for borrowing. The company also had $68.6 million in cash and cash equivalents held in foreign jurisdictions.
Expense Analysis
For Q3 2024, selling, general, and administrative (SG&A) expenses were $116.0 million, compared to $107.7 million in Q3 2023. The SG&A expense ratio was 21.8% for Q3 2024.
Cash Flows
Net cash provided by operating activities for the nine months ended September 30, 2024, was $151.1 million, compared to $198.6 million for the same period in 2023. Investing activities used $29.3 million in 2024, down from $36.8 million in 2023.
| Cash Flow Activity | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Net cash from operating activities | $151.1 | $198.6 |
| Net cash used in investing activities | ($29.3) | ($36.8) |
| Net cash used in financing activities | ($100.0) | ($140.3) |
| Change in cash and cash equivalents | $21.3 | $16.7 |
Debt Obligations
As of September 30, 2024, total debt was $88.0 million, down from $100.5 million at the end of 2023. The current maturities of long-term debt and short-term borrowings amounted to $76.4 million.
Income Taxes
The effective tax rate for the nine-month period ending September 30, 2024, was 22.9%, compared to 20.1% for the same period in 2023.
How Franklin Electric Co., Inc. (FELE) Makes Money
Overview of Revenue Sources
Franklin Electric Co., Inc. (FELE) generates revenue primarily through three main segments: Water Systems, Fueling Systems, and Distribution. Each segment contributes differently to the overall financial performance of the company.
| Segment | Q3 2024 Net Sales (in millions) | Q3 2023 Net Sales (in millions) | YTD September 30, 2024 Net Sales (in millions) | YTD September 30, 2023 Net Sales (in millions) |
|---|---|---|---|---|
| Water Systems | $302.2 | $295.8 | $904.4 | $924.1 |
| Fueling Systems | $69.7 | $77.7 | $204.9 | $230.8 |
| Distribution | $190.8 | $189.2 | $528.3 | $525.3 |
| Eliminations/Other | ($31.3) | ($24.3) | ($102.0) | ($88.0) |
| Consolidated Total | $531.4 | $538.4 | $1,535.6 | $1,592.2 |
Water Systems Segment
The Water Systems segment provides a range of products and services related to groundwater pumping, water treatment, and other surface pumping equipment. In Q3 2024, net sales increased by $6.4 million compared to Q3 2023, driven by higher volumes and price realization. However, year-to-date sales showed a decline of $19.7 million largely due to decreased demand for large dewatering equipment.
Fueling Systems Segment
The Fueling Systems segment focuses on providing fueling systems and equipment primarily for the retail petroleum market. In Q3 2024, net sales decreased by $8.0 million compared to the prior year, reflecting lower sales volumes across all product lines. Year-to-date sales were down by $25.9 million.
Distribution Segment
The Distribution segment involves the sale of a variety of products including pumps, motors, and other related equipment. This segment showed a slight increase of $1.6 million in Q3 2024 compared to Q3 2023 and a marginal increase of $3.0 million year-to-date, benefiting from a recent acquisition that positively impacted sales.
Operating Income Analysis
Operating income for each segment and the overall company reflects the effectiveness of cost management and pricing strategies.
| Segment | Q3 2024 Operating Income (in millions) | Q3 2023 Operating Income (in millions) | YTD September 30, 2024 Operating Income (in millions) | YTD September 30, 2023 Operating Income (in millions) |
|---|---|---|---|---|
| Water Systems | $52.8 | $52.7 | $162.3 | $152.5 |
| Fueling Systems | $24.1 | $25.8 | $68.9 | $73.3 |
| Distribution | $12.2 | $10.7 | $23.8 | $33.2 |
| Eliminations/Other | ($15.6) | ($11.1) | ($54.4) | ($47.4) |
| Consolidated Total | $73.5 | $78.1 | $200.6 | $211.6 |
Gross Profit and Expenses
The company has maintained a solid gross profit margin, which is critical for sustaining profitability. The gross profit for Q3 2024 was $189.7 million, representing a margin of 35.7%, an increase from 34.6% in Q3 2023. Year-to-date gross profit was $553.0 million, with a margin of 36.0% compared to 33.7% in the previous year.
Cash Flow and Liquidity
For the nine months ended September 30, 2024, cash flows from operating activities were $151.1 million, compared to $198.6 million for the same period in 2023. The decrease was primarily due to changes in working capital and lower earnings. The company maintains a strong liquidity position with a $350 million revolving credit facility and substantial cash reserves.
Net Income and Earnings Per Share
In Q3 2024, Franklin Electric reported a net income of $54.9 million, or $1.17 per diluted share, compared to $58.2 million and $1.23 per diluted share in Q3 2023. Year-to-date net income was $147.3 million, or $3.14 per diluted share, down from $155.9 million and $3.29 per diluted share in the prior year.
| Metric | Q3 2024 | Q3 2023 | YTD September 30, 2024 | YTD September 30, 2023 |
|---|---|---|---|---|
| Net Income (in millions) | $54.9 | $58.2 | $147.3 | $155.9 |
| Earnings Per Share (Diluted) | $1.17 | $1.23 | $3.14 | $3.29 |
Conclusion on Financial Performance
Franklin Electric Co., Inc. continues to navigate challenges in its market segments while striving for operational efficiencies and maintaining a strong balance sheet. The company's diversified portfolio across Water Systems, Fueling Systems, and Distribution remains pivotal in driving its revenue and profitability.
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Article updated on 8 Nov 2024
Resources:
- Franklin Electric Co., Inc. (FELE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Franklin Electric Co., Inc. (FELE)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Franklin Electric Co., Inc. (FELE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.