Q3 2024 Franklin Electric Co Inc Earnings Call Transcript
Key Points
- Franklin Electric Co Inc (FELE) achieved strong operating margin performance of 13.8% in the third quarter, led by improvements in the Fueling Systems and Distribution segments.
- The Water Systems segment set a new third quarter record for operating income, driven by price realization, cost management, and a favorable product and geographic sales mix shift.
- The company has a strong balance sheet with a cash balance of $106.3 million and no borrowings under its revolving credit agreement, providing flexibility for future investments.
- Franklin Electric Co Inc (FELE) continues to see positive order patterns across most of its businesses, giving confidence as they head into 2025.
- The company is recognized externally for its commitment to service and culture, receiving awards from Newsweek, USA Today, and the Indiana Chamber of Commerce.
- Consolidated third quarter sales declined by 1% year-over-year, primarily due to lower volumes in the international Fueling business and large dewatering equipment sales.
- Higher SG&A expenses, including costs associated with the CEO transition and recent acquisitions, negatively impacted the company's bottom line.
- The Fueling Systems segment experienced a 10% decline in sales compared to the prior year, with lower volumes across most major product lines.
- Franklin Electric Co Inc (FELE) lowered its full-year sales guidance to approximately $2 billion and reduced its EPS guidance due to lower than anticipated sales and normalized demand expectations.
- The company is facing ongoing commodity pressures, particularly in the Distribution segment, with declining prices for plastic pipe due to supply dynamics.
Hello and welcome to the Franklin Electric reports third quarter, 2024 sales and earnings conference call. (Operator instructions) Please be advised that today's conference is being recorded.
It is now my pleasure to introduce Chief Financial Officer, Jeff Taylor.
Thank you, Andrew, and welcome, everyone, to Franklin Electric's Third Quarter 2024 Earnings Conference Call. With me today is Joe Ruzynski, our Chief Executive Officer.
On today's call, Joe will review our third quarter business highlights, then I will provide additional details on our financial performance, and Joe will make some final comments. 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 and uncertainties, many of which could cause actual results to differ materially from
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