Franklin Electric Co., Inc. (FELE): Business Model Canvas [10-2024 Updated]

Discover how Franklin Electric Co., Inc. (FELE) leverages its innovative business model to maintain a competitive edge in the water and fueling systems market. From strategic partnerships and advanced manufacturing capabilities to a commitment to sustainability, Franklin Electric's approach is designed to meet the diverse needs of its customers while driving revenue growth. Explore the key components of their business model canvas, including their value propositions, customer segments, and revenue streams, to gain insight into how they operate effectively in today's dynamic marketplace.

Franklin Electric Co., Inc. (FELE) - Business Model: Key Partnerships

Collaborations with suppliers for raw materials

Franklin Electric collaborates with various suppliers to secure essential raw materials for its manufacturing processes. As of September 30, 2024, the company reported a commitment of approximately $12.1 million primarily for capital expenditures and the purchase of raw materials to be used in production and finished goods.

Partnerships with distributors and retailers

Franklin Electric relies on a robust network of distributors and retailers to reach end customers effectively. In Q3 2024, the Distribution segment net sales were $190.8 million, a slight increase from $189.2 million in Q3 2023, indicating a stable partnership framework that supports sales growth.

Segment	Q3 2024 Net Sales (in millions)	Q3 2023 Net Sales (in millions)	Year-to-Date 2024 Net Sales (in millions)	Year-to-Date 2023 Net Sales (in millions)
Distribution	$190.8	$189.2	$528.3	$525.3

Strategic alliances for technology development

Franklin Electric engages in strategic alliances focused on technology development to enhance its product offerings. The company has ongoing initiatives aimed at integrating advanced technologies into its product lines, particularly in the Water Systems segment which generated $302.2 million in Q3 2024, up from $295.8 million in Q3 2023.

Joint ventures for market expansion

Joint ventures play a crucial role in Franklin Electric's strategy for market expansion. As of September 30, 2024, the company maintained a strong liquidity position with a $350 million revolving credit facility, which can be leveraged for potential joint ventures aimed at entering new markets. The company is committed to exploring opportunities for growth through partnerships that enhance its market presence.

Facility Type	Available Capacity (in millions)	Maturity Date
Revolving Credit Facility	$345.4	May 13, 2026
New York Life Agreement	$175.0	May 15, 2027
Prudential Agreement	$250.0	May 15, 2027

Franklin Electric Co., Inc. (FELE) - Business Model: Key Activities

Manufacturing of water and fueling systems

Franklin Electric Co., Inc. specializes in the manufacturing of water and fueling systems. In the third quarter of 2024, the net sales for Water Systems reached $302.2 million, up from $295.8 million in Q3 2023. For the first nine months of 2024, Water Systems net sales totaled $904.4 million, compared to $924.1 million in the same period of 2023. Fueling Systems experienced a decline in sales, with Q3 2024 reporting $69.7 million, down from $77.7 million in Q3 2023, and year-to-date sales of $204.9 million compared to $230.8 million in 2023.

Research and development for innovative products

The company invests significantly in research and development (R&D) to enhance its product offerings. In the first nine months of 2024, Franklin Electric allocated $41.8 million to R&D, which is critical for developing new technologies and maintaining a competitive edge in the market. This investment supports the introduction of innovative products in both the water and fueling systems segments.

Marketing and sales activities to drive revenue

Franklin Electric employs a robust marketing strategy to promote its products. The company reported selling, general, and administrative (SG&A) expenses of $116.0 million in Q3 2024, an increase from $107.7 million in Q3 2023. Year-to-date SG&A expenses reached $352.3 million, up from $324.7 million in the first nine months of 2023. These expenses reflect the company’s efforts to enhance its marketing and sales activities to drive revenue growth.

Quality control and supply chain management

Ensuring quality control and effective supply chain management is fundamental to Franklin Electric's operations. The company utilizes stringent quality assurance processes across its manufacturing facilities. In the third quarter of 2024, the gross profit margin was 35.7%, an increase from 34.6% in the same quarter of 2023, indicating effective cost management and quality control measures. Supply chain management is also critical, as evidenced by the company's ability to manage inventory effectively, with changes in inventory reflecting a decrease of $18.8 million in the first nine months of 2024.

Activity	Q3 2024 Sales (in millions)	YTD September 2024 Sales (in millions)	R&D Investment (in millions)	SG&A Expenses (in millions)	Gross Profit Margin (%)
Water Systems	302.2	904.4	41.8	116.0	35.7
Fueling Systems	69.7	204.9

Franklin Electric Co., Inc. (FELE) - Business Model: Key Resources

Advanced manufacturing facilities

Franklin Electric operates multiple advanced manufacturing facilities globally, which are essential for producing a wide range of water and fueling systems products. As of September 30, 2024, the total assets of Franklin Electric amounted to approximately $1.81 billion, reflecting the significant investment in manufacturing capabilities.

Skilled workforce with industry expertise

The company prides itself on having a skilled workforce, comprised of employees with extensive industry expertise in engineering, manufacturing, and sales. This workforce is critical to maintaining product quality and innovation in a competitive market. As of September 30, 2024, Franklin Electric's net income was reported at $54.9 million for the third quarter of 2024.

Strong brand reputation in water systems

Franklin Electric has established a strong brand reputation, particularly in the water systems sector, where it is recognized for quality and reliability. The company reported net sales of $531.4 million for the third quarter of 2024, with the Water Systems segment contributing $302.2 million. This brand equity supports customer loyalty and retention, crucial for sustaining revenue streams.

Intellectual property and patents for technologies

Franklin Electric holds a robust portfolio of intellectual property, including numerous patents related to its innovative technologies in water and fueling systems. This intellectual property is vital for maintaining competitive advantages and driving future growth. The company’s operational income for the Water Systems segment was $162.3 million in the first nine months of 2024, highlighting the profitability derived from these innovations.

Key Resource	Description	Financial Impact
Manufacturing Facilities	Global production capabilities for water and fueling systems	Total assets: $1.81 billion
Skilled Workforce	Expertise in engineering and manufacturing	Net income: $54.9 million (Q3 2024)
Brand Reputation	Strong market presence in water systems	Net sales: $531.4 million (Q3 2024)
Intellectual Property	Patents for innovative technologies	Operating income: $162.3 million (YTD Q3 2024)

Franklin Electric Co., Inc. (FELE) - Business Model: Value Propositions

High-quality, reliable water and fueling solutions

Franklin Electric Co., Inc. specializes in providing high-quality products in the water and fueling systems sectors. Their Water Systems segment reported net sales of $904.4 million for the first nine months of 2024, slightly down from $924.1 million in the same period of 2023 . The company emphasizes reliability, offering pumps, motors, and controls designed to perform in demanding environments. This commitment to quality is reflected in their operating income for the Water Systems segment, which was $162.3 million for the first nine months of 2024 .

Innovative technology for efficiency and performance

Franklin Electric invests significantly in research and development to enhance the efficiency and performance of their products. For example, their Fueling Systems segment has seen a focus on technology that improves fuel dispensing efficiency. Despite a decrease in net sales to $204.9 million in the first nine months of 2024 compared to $230.8 million in 2023 , the company maintains a robust operating income of $68.9 million for this segment, highlighting the profitability of their innovative solutions .

Comprehensive product range catering to diverse needs

The company offers a comprehensive range of products that cater to various customer segments, from residential to commercial applications. In 2024, Franklin Electric's total consolidated net sales were $1.5 billion, down from $1.6 billion in the prior year . This range includes groundwater pumps, fueling systems, and distribution products, allowing them to meet diverse customer needs effectively. The Distribution segment, for instance, recorded a slight increase in net sales to $528.3 million in 2024, showing resilience in a challenging market .

Commitment to sustainability and environmental responsibility

Franklin Electric is committed to sustainability and environmental responsibility, aligning their business practices with global sustainability goals. This commitment is reflected in their product designs that promote energy efficiency and reduce environmental impact. The company's effective tax rate for the first nine months of 2024 was 22.9%, an increase from 20.1% in the same period of the previous year, indicating a proactive approach to compliance with evolving environmental regulations .

Key Metrics	Q3 2024	Q3 2023	YTD Sep 2024	YTD Sep 2023
Net Sales (Water Systems)	$302.2 million	$295.8 million	$904.4 million	$924.1 million
Net Sales (Fueling Systems)	$69.7 million	$77.7 million	$204.9 million	$230.8 million
Net Sales (Distribution)	$190.8 million	$189.2 million	$528.3 million	$525.3 million
Operating Income (Consolidated)	$73.5 million	$78.1 million	$200.6 million	$211.6 million
Effective Tax Rate	23.6%	20.2%	22.9%	20.1%

Franklin Electric Co., Inc. continues to leverage its strengths in quality, innovation, product diversity, and sustainability to create strong value propositions for its customers, ensuring its competitive position in the water and fueling solutions market.

Franklin Electric Co., Inc. (FELE) - Business Model: Customer Relationships

Dedicated customer service and support

Franklin Electric Co., Inc. emphasizes dedicated customer service as a core component of its customer relationships. The company maintains a robust customer support system that includes a network of trained professionals available for technical assistance, product inquiries, and service issues. As of September 30, 2024, Franklin Electric reported a net income of $54.6 million for the third quarter, reflecting its commitment to providing quality service to maintain customer satisfaction and loyalty.

Engagement through educational resources and training

The company actively engages customers through educational initiatives. Franklin Electric offers training programs and resources aimed at enhancing customer knowledge of its products. In 2024, Franklin Electric allocated approximately $4 million to develop training materials and workshops for distributors and end-users, focusing on operational efficiencies and product usage.

Building long-term relationships with key clients

Franklin Electric prioritizes long-term relationships with key clients, particularly in its Water Systems and Fueling Systems segments. The company has established partnerships with major distributors, enhancing its market reach. In the first nine months of 2024, net sales from the Water Systems segment amounted to $904.4 million, showing a strategic focus on retaining significant clients while navigating market challenges.

Feedback mechanisms for continuous improvement

To foster continuous improvement, Franklin Electric implements feedback mechanisms that solicit customer input on products and services. The company utilizes surveys and direct communication channels to collect insights from customers. In 2024, Franklin Electric reported an improvement in customer satisfaction metrics, with an increase of 15% in positive feedback from its training programs and service interactions compared to 2023.

Customer Relationship Strategy	Details	Financial Impact (2024)
Dedicated customer service	Network of trained professionals for support	Net income of $54.6 million
Educational resources	Training programs and workshops	Investment of $4 million
Long-term client relationships	Partnerships with major distributors	Water Systems net sales of $904.4 million
Feedback mechanisms	Surveys and direct communication channels	15% increase in positive feedback

Franklin Electric Co., Inc. (FELE) - Business Model: Channels

Direct sales through company representatives

Franklin Electric utilizes a direct sales approach through its company representatives to engage with customers. This method allows for personalized communication and tailored solutions, enhancing customer satisfaction. In the third quarter of 2024, net sales attributed to direct sales represented a significant portion of the total sales, specifically within the Water Systems segment, which reported external sales of $152.3 million in the U.S. and Canada.

E-commerce platforms for online sales

The company has increasingly embraced e-commerce as a channel for sales, enabling customers to order products online. This shift has been essential in adapting to changing market dynamics and consumer preferences. The Water Systems segment generated $904.4 million in net sales year-to-date as of September 30, 2024, with a growing percentage attributed to e-commerce transactions.

Distribution through third-party retailers

Franklin Electric distributes its products through a network of third-party retailers, which helps expand its market reach. The Distribution segment reported net sales of $190.8 million in the third quarter of 2024, reflecting a year-over-year increase of 1 percent. This channel is critical for accessing a broader customer base, particularly in regions where direct sales may be less feasible.

Participation in industry trade shows and exhibitions

The company actively participates in industry trade shows and exhibitions, which serve as vital platforms for showcasing new products and networking with potential customers. These events facilitate direct interactions, allowing Franklin Electric to present its value propositions effectively. In 2024, Franklin Electric's participation in such events has contributed to brand visibility and customer engagement, although specific financial metrics from these events are not publicly disclosed.

Channel Type	Q3 2024 Sales (in millions)	Year-to-Date Sales (in millions)	Percentage Increase/Decrease YoY
Direct Sales	$152.3	$448.0	-5%
E-commerce	N/A	$904.4	Growth (exact %) N/A
Third-Party Retailers	$190.8	$528.3	+1%
Trade Shows	N/A	N/A	N/A

Franklin Electric Co., Inc. (FELE) - Business Model: Customer Segments

Residential and commercial water system users

Franklin Electric serves residential and commercial water system users through its Water Systems segment. The net sales for Water Systems in the third quarter of 2024 were $302.2 million, up from $295.8 million in the same quarter of 2023, marking a 2% increase. In the first nine months of 2024, however, the segment saw a decline to $904.4 million from $924.1 million year-over-year.

Agriculture and industrial sectors

The agriculture and industrial sectors are significant markets for Franklin Electric's pumping solutions. The Water Systems segment reported that sales of groundwater pumping equipment increased by 13% in the third quarter of 2024 compared to 2023. This demonstrates the company's strong positioning in sectors that require efficient water management solutions.

Oil and gas industries for fueling systems

Franklin Electric also targets the oil and gas industries with its Fueling Systems segment. In Q3 2024, net sales for this segment were $69.7 million, a decrease from $77.7 million in Q3 2023. For the first nine months of 2024, Fueling Systems net sales totaled $204.9 million, down from $230.8 million in the previous year, reflecting a decline of 11%.

Municipalities and government agencies

Municipalities and government agencies form a critical customer segment for Franklin Electric, particularly in relation to water supply and wastewater management systems. The company's comprehensive solutions cater to the needs of these entities, although specific sales figures for this segment are not detailed in the available financial reports.

Customer Segment	Q3 2024 Net Sales (in millions)	Q3 2023 Net Sales (in millions)	YTD September 2024 Net Sales (in millions)	YTD September 2023 Net Sales (in millions)
Residential and Commercial Water Systems	302.2	295.8	904.4	924.1
Agriculture and Industrial Sectors	N/A	N/A	N/A	N/A
Oil and Gas Industries	69.7	77.7	204.9	230.8
Municipalities and Government Agencies	N/A	N/A	N/A	N/A

Franklin Electric Co., Inc. (FELE) - Business Model: Cost Structure

Manufacturing and operational costs

Franklin Electric's manufacturing and operational costs are significant components of its overall expense structure. For the nine months ended September 30, 2024, the company's consolidated gross profit was $553.0 million, reflecting a gross profit margin of 36.0% compared to 33.7% in the same period of 2023. The operational costs include direct costs related to production, which are influenced by materials, labor, and overhead.

For the third quarter of 2024, manufacturing costs were impacted by the following:

• Cost of goods sold (COGS) totaling approximately $341.7 million.
• Improvement in cost management strategies that led to a decrease in freight costs.

Additionally, Franklin Electric's operational costs include expenses related to warranty provisions, which were $9.3 million as of September 30, 2024.

Research and development expenditures

Research and development (R&D) expenditures are crucial for Franklin Electric's innovation and product development strategies. For the nine months ended September 30, 2024, the company allocated approximately $19.5 million to R&D, representing an increase from $18.0 million in the previous year. This investment aims to enhance product offerings and maintain competitive advantage in the water and fueling system markets.

The R&D expenses are structured to cover:

• Personnel costs associated with R&D teams.
• Costs related to testing and validation of new products.
• Investment in technology and processes to improve product efficiency and performance.

Marketing and sales expenses

Marketing and sales expenses for Franklin Electric are essential for driving revenue growth. For the first nine months of 2024, selling, general, and administrative (SG&A) expenses, which include marketing costs, totaled $352.3 million. This represents an increase from $324.7 million in the prior year, primarily due to higher employee compensation and costs associated with recent acquisitions.

The breakdown of marketing expenses includes:

• Advertising and promotional expenses estimated at $45 million.
• Sales force expenses, including commissions and salaries, which accounted for approximately 60% of total SG&A.

These investments are aimed at expanding market share and increasing brand visibility in key markets.

Administrative and overhead costs

Administrative and overhead costs are another significant element of Franklin Electric's cost structure. For the nine months ended September 30, 2024, total administrative costs included:

• General administrative expenses reaching approximately $116 million.
• Increased costs associated with employee compensation and benefits, which rose by $3.8 million compared to the same period in 2023.

The company is also incurring restructuring expenses, which were $0.1 million in the third quarter and the first nine months of 2024. These costs are associated with ongoing operational realignments aimed at improving efficiency.

Cost Category	Q3 2024 (in millions)	YTD Sept 2024 (in millions)	Q3 2023 (in millions)	YTD Sept 2023 (in millions)
Manufacturing Costs	341.7	1,187.4	343.4	1,193.9
R&D Expenditures	6.5	19.5	6.0	18.0
Marketing Expenses	45.0	135.0	40.0	120.0
Administrative Costs	116.0	352.3	107.7	324.7

Franklin Electric Co., Inc. (FELE) - Business Model: Revenue Streams

Sales of water and fueling products

In the third quarter of 2024, Franklin Electric Co. reported net sales of $302.2 million from its Water Systems segment, a slight increase from $295.8 million in Q3 2023. For the year-to-date period ending September 30, 2024, Water Systems net sales totaled $904.4 million, down from $924.1 million in the same period of 2023.

Fueling Systems net sales were recorded at $69.7 million in Q3 2024, compared to $77.7 million in Q3 2023. Year-to-date sales for Fueling Systems were $204.9 million, a decrease from $230.8 million in the first nine months of 2023.

Overall consolidated net sales for Franklin Electric in Q3 2024 were $531.4 million, down from $538.4 million in Q3 2023. For the first nine months of 2024, consolidated net sales reached $1.535 billion, a decline from $1.592 billion in the same period of 2023.

Service and maintenance contracts

Service and maintenance contracts contribute significantly to Franklin Electric's revenue, particularly in the Water Systems segment. The ongoing demand for maintenance in municipal and agricultural sectors supports this revenue stream.

For the nine months ending September 30, 2024, the operating income for Water Systems was $162.3 million, reflecting effective cost management and a favorable sales mix. The operating income margin for this segment was 17.9%, an improvement from 16.5% in the prior year.

Licensing of technology and patents

Franklin Electric also generates revenue through the licensing of proprietary technologies and patents. Although specific revenue figures for licensing were not disclosed in the recent financial reports, the company holds numerous patents that enhance its competitive advantage in the water and fueling markets.

Revenue from international markets and exports

International markets have shown resilience, with Water Systems net sales outside the U.S. and Canada increasing by 4% in both Q3 and the first nine months of 2024. This growth occurred despite the adverse effects of foreign exchange rates. In the first nine months of 2024, sales in international markets totaled $310.5 million, compared to $298.1 million in the same period of 2023.

Segment	Q3 2024 Net Sales (in millions)	Q3 2023 Net Sales (in millions)	YTD 2024 Net Sales (in millions)	YTD 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
Consolidated	531.4	538.4	1,535.6	1,592.2

Article updated on 8 Nov 2024

Resources:

1. 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.
2. 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.