Q2 2024 Franklin Electric Co Inc Earnings Call Transcript
Key Points
- Franklin Electric Co Inc (FELE) achieved near-record high earnings despite macroeconomic challenges and adverse weather conditions.
- The company demonstrated resilience with strong execution by global teams, driving margin expansion on lower sales.
- Water Systems segment saw a 23% increase in operating income, setting an all-time quarterly record for the segment.
- Fueling Systems operating margin reached an all-time quarterly record of 35.6%, representing an increase of 240 basis points compared to the prior year.
- Consolidated gross profit was a record $199.8 million for the second quarter of 2024, a 6% year-over-year increase.
- Consolidated sales were down 5% year-over-year, reflecting ongoing challenges such as project delays and adverse weather.
- Sales of large dewatering equipment in the US decreased significantly, impacting overall sales in the Water Systems segment.
- Distribution segment's operating margin declined to 5.1%, a 410 basis point decrease versus the prior year due to higher overhead costs.
- Fueling Systems sales and operating income decreased by 9% and 3%, respectively, compared to the prior year.
- The effective tax rate increased to 23% for the quarter compared to 19% in the prior year quarter, impacting net income.
Hello, and welcome to the Franklin Electric Reports Second Quarter 2024 sales and earnings conference call. (Operator instructions) Please be advised that today's conference is being recorded and it is now my pleasure to introduce the Chief Financial Officer, Jeff Taylor.
Thank you, Andrew, and welcome, everyone, to Franklin Electric's second quarter 2024 earnings conference call. With me today are Joe Ruzynski, our Chief Executive Officer; and Gregg Sengstack, our Executive Chairperson.
On today's call, Gregg will review our second quarter business highlights. I will provide additional details on our financial performance and then Joe will share some initial thoughts on his first few weeks with Franklin. We will then take questions.
Before we begin, let me remind you that as we conduct this call, we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to various risks
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