First Quarter 2026 Highlights
- Consolidated net sales of
$500.4 million , an increase of 10% to the prior year - Net sales increased across all three segments: 11% in Water Systems, 7% in Energy Systems, and 6% in Distribution
- Operating income was
$48.1 million , an increase of 9% to the prior year, with operating margin of 9.6% - GAAP fully diluted earnings per share (EPS) was
$0.77 , an increase of 15 percent; Adjusted diluted EPS was$0.83 1, an increase of 24 percent
First quarter 2026 net sales were
1 – Adjusted diluted EPS is a non-GAAP measure. Please refer to our Note Regarding Non-GAAP Financial Measures below for further explanation as well as the final page of this release for a reconciliation of non-GAAP measures to the appropriate GAAP measure.
“Our teams delivered a strong start to 2026, with first quarter results in line with our expectations and reflecting solid execution across the business. Sales increased nearly 10 percent year-over-year, driven by higher volumes, effective pricing, and incremental contributions from acquisitions, while operating income and adjusted earnings grew meaningfully faster than revenue. We remain focused on driving profitable growth through our investment in innovation, focus on faster growing markets, disciplined pricing, and productivity initiatives, while continuing to enhance our global manufacturing footprint to better serve our customers,” commented
“While we continue to closely monitor the global macroeconomic and geopolitical environment, underlying demand and order activity remain healthy. As we move through the year, our focus remains on executing our strategy to deliver volume growth predictably and efficiently. With improving operating margins and a strong balance sheet, we are well positioned to support our customers and drive profitable growth while delivering long term value for our shareholders,” concluded
Segment Summaries
Water Systems net sales were
Distribution net sales were
Energy Systems net sales were
2 – Adjusted operating income is a non-GAAP measure. Please refer to our Note Regarding Non-GAAP Financial Measures below for further explanation as well as the final page of this release for a reconciliation of non-GAAP measures to the appropriate GAAP measure.
2026 Guidance
The Company is maintaining its guidance for full year 2026 net sales to be in the range of
Earnings Conference Call
A conference call to review earnings and other developments in the business will commence at
https://edge.media-server.com/mmc/p/h2get6o9
For those interested in participating in the question-and-answer portion of the call, please register for the call at the link below.
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A replay of the conference call will be available from
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, changes in tariffs or the impact of any such changes on the Company’s financial results, the Company’s accounting policies, future trends, epidemics and pandemics, and other risks which are detailed in the Company’s
Note Regarding Non-GAAP Financial Measures
The company reports its financial results in accordance with
About
Franklin Electric Contact:
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| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| (Unaudited) | ||||||||
| (In thousands, except per share amounts) | ||||||||
| First Quarter Ended | ||||||||
| Net sales | $ | 500,437 | $ | 455,247 | ||||
| Cost of sales | 325,468 | 291,344 | ||||||
| Gross profit | 174,969 | 163,903 | ||||||
| Selling, general, and administrative expenses | 123,012 | 119,643 | ||||||
| Restructuring expense | 3,872 | 159 | ||||||
| Operating income | 48,085 | 44,101 | ||||||
| Interest expense | (2,311 | ) | (1,799 | ) | ||||
| Other income (expense), net | (374 | ) | 843 | |||||
| Foreign exchange income (expense), net | 375 | (1,293 | ) | |||||
| Income before income taxes | 45,775 | 41,852 | ||||||
| Income tax expense | 11,080 | 10,478 | ||||||
| Net income | $ | 34,695 | $ | 31,374 | ||||
| Less: Net income attributable to noncontrolling interests | (365 | ) | (412 | ) | ||||
| Net income attributable to | $ | 34,330 | $ | 30,962 | ||||
| Earnings per share: | ||||||||
| Basic | $ | 0.77 | $ | 0.67 | ||||
| Diluted | $ | 0.77 | $ | 0.67 | ||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
| (Unaudited) | |||||
| (In thousands) | |||||
| ASSETS | |||||
| Cash and cash equivalents | $ | 80,400 | $ | 99,662 | |
| Receivables (net) | 297,859 | 247,511 | |||
| Inventories | 583,208 | 552,981 | |||
| Other current assets | 53,818 | 58,472 | |||
| Total current assets | 1,015,285 | 958,626 | |||
| Property, plant, and equipment, net | 252,074 | 252,164 | |||
| Lease right-of-use assets, net | 67,351 | 67,867 | |||
| 661,855 | 665,728 | ||||
| Total assets | $ | 1,996,565 | $ | 1,944,385 | |
| LIABILITIES AND EQUITY | |||||
| Accounts payable | $ | 174,095 | $ | 174,954 | |
| Accrued expenses and other current liabilities | 95,552 | 116,747 | |||
| Current lease liability | 20,319 | 20,518 | |||
| Current maturities of long-term debt and short-term borrowings | 89,779 | 31,827 | |||
| Total current liabilities | 379,745 | 344,046 | |||
| Long-term debt | 134,406 | 135,184 | |||
| Long-term lease liability | 46,018 | 46,481 | |||
| Deferred income taxes | 40,798 | 39,275 | |||
| Employee benefit plans | 22,507 | 22,833 | |||
| Other long-term liabilities | 28,513 | 29,541 | |||
| Redeemable noncontrolling interest | 1,908 | 1,657 | |||
| Total equity | 1,342,670 | 1,325,368 | |||
| Total liabilities and equity | $ | 1,996,565 | $ | 1,944,385 | |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (Unaudited) | |||||||
| Three Months Ended | |||||||
| (In thousands) | |||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 34,695 | $ | 31,374 | |||
| Adjustments to reconcile net income to net cash flows from operating activities: | |||||||
| Depreciation and amortization | 16,527 | 14,433 | |||||
| Non-cash lease expense | 5,574 | 5,241 | |||||
| Share-based compensation | 3,615 | 4,962 | |||||
| Other | (991 | ) | 1,080 | ||||
| Changes in assets and liabilities: | |||||||
| Receivables | (49,578 | ) | (29,376 | ) | |||
| Inventory | (28,896 | ) | (43,669 | ) | |||
| Accounts payable and accrued expenses | (18,250 | ) | (3,744 | ) | |||
| Operating leases | (5,723 | ) | (5,091 | ) | |||
| Other | 2,152 | 5,322 | |||||
| Net cash flows from operating activities | (40,875 | ) | (19,468 | ) | |||
| Cash flows from investing activities: | |||||||
| Additions to property, plant, and equipment | (9,479 | ) | (6,836 | ) | |||
| Proceeds from sale of property, plant, and equipment | 351 | 397 | |||||
| Acquisitions and investments | (430 | ) | (109,687 | ) | |||
| Other investing activities | 20 | 9 | |||||
| Net cash flows from investing activities | (9,538 | ) | (116,117 | ) | |||
| Cash flows from financing activities: | |||||||
| Net change in debt | 57,235 | 20,366 | |||||
| Proceeds from issuance of common stock | 2,700 | 1,438 | |||||
| Purchases of common stock | (13,186 | ) | (6,902 | ) | |||
| Dividends paid | (12,446 | ) | (13,160 | ) | |||
| Deferred payments for acquisitions | (1,696 | ) | (4,300 | ) | |||
| Net cash flows from financing activities | 32,607 | (2,558 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (1,456 | ) | 1,597 | ||||
| Net change in cash and cash equivalents | (19,262 | ) | (136,546 | ) | |||
| Cash and cash equivalents at beginning of period | 99,662 | 220,540 | |||||
| Cash and cash equivalents at end of period | $ | 80,400 | $ | 83,994 | |||
Key Performance Indicators: Net Sales Summary
| Latin | Total | ||||||||||||||||||||||||||
| (in millions) | & | America | East & | Pacific | Water | Energy | Distribution | Other/Elims | Consolidated | ||||||||||||||||||
| Q1 2025 | $ | 175.7 | $ | 39.5 | $ | 51.5 | $ | 20.6 | $ | 287.3 | $ | 66.8 | $ | 141.9 | ($ | 40.8 | ) | $ | 455.2 | ||||||||
| Q1 2026 | $ | 187.2 | $ | 49.9 | $ | 55.8 | $ | 25.1 | $ | 318.0 | $ | 71.8 | $ | 150.9 | ($ | 40.3 | ) | $ | 500.4 | ||||||||
| Change | $ | 11.5 | $ | 10.4 | $ | 4.3 | $ | 4.5 | $ | 30.7 | $ | 5.0 | $ | 9.0 | $ | 0.5 | $ | 45.2 | |||||||||
| % Change | 7 | % | 26 | % | 8 | % | 22 | % | 11 | % | 7 | % | 6 | % | 10 | % | |||||||||||
| Foreign currency translation, net * | $ | 1.0 | $ | 3.2 | $ | 4.2 | $ | 1.2 | $ | 9.6 | $ | 0.1 | $ | 0.0 | $ | 9.7 | |||||||||||
| % Change | 1 | % | 8 | % | 8 | % | 6 | % | 3 | % | 0 | % | 0 | % | 2 | % | |||||||||||
| Acquisitions | $ | 0.3 | $ | 6.2 | $ | 1.1 | $ | 0.9 | $ | 8.5 | $ | 0.0 | $ | 0.3 | $ | 8.8 | |||||||||||
| % Change | 0 | % | 16 | % | 2 | % | 4 | % | 3 | % | 0 | % | 0 | % | 2 | % | |||||||||||
| Volume/Price | $ | 10.2 | $ | 1.0 | ($ | 1.0 | ) | $ | 2.4 | $ | 12.6 | $ | 4.9 | $ | 8.7 | $ | 0.5 | $ | 26.7 | ||||||||
| % Change | 6 | % | 3 | % | -2 | % | 12 | % | 4 | % | 7 | % | 6 | % | 1 | % | 6 | % | |||||||||
| *The Company has presented local currency price increases used to offset currency devaluation in the highly inflationary economies of Agentina and | |||||||||||||||||||||||||||
Key Performance Indicators: Operating Income and Margin Summary
| Operating Income and Margins | ||||||||||||||||
| (in millions) | For the First Quarter 2026 | |||||||||||||||
| Water | Energy | Distribution | Other/Elims | Consolidated | ||||||||||||
| Operating Income / (Loss) | $ | 44.4 | $ | 24.2 | $ | 3.0 | $ | (23.5 | ) | $ | 48.1 | |||||
| % Operating Income To | 14.0 | % | 33.7 | % | 2.0 | % | 9.6 | % | ||||||||
| Operating Income and Margins | ||||||||||||||||
| (in millions) | For the First Quarter 2025 | |||||||||||||||
| Water | Energy | Distribution | Other/Elims | Consolidated | ||||||||||||
| Operating Income / (Loss) | $ | 43.4 | $ | 21.9 | $ | 2.1 | $ | (23.3 | ) | $ | 44.1 | |||||
| % Operating Income To | 15.1 | % | 32.8 | % | 1.5 | % | 9.7 | % | ||||||||
Reconciliation of Non-GAAP Financial Measure: Adjusted Diluted EPS
| For the First Quarter | ||||||||
| 2026 | 2025 | Change | ||||||
| Diluted Earnings per Share "EPS" (as reported - US GAAP) | $ | 0.77 | $ | 0.67 | 15 | % | ||
| Restructuring | $ | 0.06 | $ | - | ||||
| Adjusted Diluted EPS (non-GAAP) | $ | 0.83 | $ | 0.67 | 24 | % | ||
Reconciliation of Non-GAAP Financial Measure: Adjusted Operating Income
| (in millions) | For the First Quarter 2026 | |||||||||||
| Water | Energy | Distribution | Other/Elims | Consolidated | ||||||||
| GAAP Operating Income / (Loss) | $ | 44.4 | $ | 24.2 | $ | 3.0 | $ | (23.5 | ) | $ | 48.1 | |
| Restructuring, gross of tax | $ | 3.9 | $ | - | $ | - | $ | - | $ | 3.9 | ||
| Non-GAAP Adjusted Operating Income / (Loss) | $ | 48.3 | $ | 24.2 | $ | 3.0 | $ | (23.5 | ) | $ | 52.0 | |
| (in millions) | For the First Quarter 2025 | |||||||||||
| Water | Energy | Distribution | Other/Elims | Consolidated | ||||||||
| GAAP Operating Income / (Loss) | $ | 43.4 | $ | 21.9 | $ | 2.1 | $ | (23.3 | ) | $ | 44.1 | |
| Restructuring, gross of tax | $ | - | $ | - | $ | 0.2 | $ | - | $ | 0.2 | ||
| Non-GAAP Adjusted Operating Income / (Loss) | $ | 43.4 | $ | 21.9 | $ | 2.3 | $ | (23.3 | ) | $ | 44.3 | |
