-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GDoUyYUS5yOsQJMmotYStcnFHSwsCpMw+vSw6HaDmFGJrv7a/n4uRCKc+z7rTDd9 ZIn6OHaaelViFt0mMbjOCA== 0000038725-05-000076.txt : 20050715 0000038725-05-000076.hdr.sgml : 20050715 20050715165807 ACCESSION NUMBER: 0000038725-05-000076 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20050715 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050715 DATE AS OF CHANGE: 20050715 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRANKLIN ELECTRIC CO INC CENTRAL INDEX KEY: 0000038725 STANDARD INDUSTRIAL CLASSIFICATION: MOTORS & GENERATORS [3621] IRS NUMBER: 350827455 STATE OF INCORPORATION: IN FISCAL YEAR END: 0103 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-00362 FILM NUMBER: 05957776 BUSINESS ADDRESS: STREET 1: 400 E SPRING ST CITY: BLUFFTON STATE: IN ZIP: 46714 BUSINESS PHONE: 2608242900 MAIL ADDRESS: STREET 1: 400 E SPRING STREET CITY: BLUFFTON STATE: IN ZIP: 46714 8-K 1 r8k2q.txt SECOND QUARTER EARNINGS UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JULY 15, 2005 ------------- FRANKLIN ELECTRIC CO., INC. --------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) INDIANA 0-362 35-0827455 ------- ----- ---------- (STATE OR OTHER JURISDICTION OF (COMMISSION (I.R.S. EMPLOYER INCORPORATION) FILE NUMBER) IDENTIFICATION NO.) 400 EAST SPRING STREET BLUFFTON, INDIANA 46714 ------------------ ----- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (260) 824-2900 ------------- (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) NOT APPLICABLE -------------- (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425 [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 2 Item 2.02 Results of Operations and Financial Condition - ------------------------------------------------------- The following information is furnished pursuant to Item 2.02 "Results of Operations and Financial Condition." On July 15, 2005, Franklin Electric Co., Inc. issued a press release announcing its second-quarter 2005 earnings. A copy of the press release is attached hereto as Exhibit (99) and hereby incorporate by reference. Item 9.01 Financial Statements and Exhibits - ------------------------------------------- The following information is furnished pursuant to Item 9.01, "Financial Statements and Exhibits": (99) Press Release, dated July 15, 2005 issued by Franklin Electric Co., Inc. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FRANKLIN ELECTRIC CO., INC. --------------------------- (Registrant) Date July 15, 2005 By /s/ Gregg C. Sengstack --------------- ------------------------------- Gregg C. Sengstack, Senior Vice President, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer) 3 Exhibit Index - ------------- EXHIBIT NO. (99) Press release, dated July 15, 2005 issued by Franklin Electric Co., Inc. EXHIBIT 99 ADDITIONAL EXHIBITS Press Release - ------------- For Immediate Release For Further Information Refer to: Gregg C. Sengstack 260-824-2900 FRANKLIN ELECTRIC COMPANY REPORTS RECORD INCOME AND SALES FOR THE SECOND QUARTER OF 2005 BLUFFTON, INDIANA - JULY 15, 2005 -- Franklin Electric Co., Inc. (NASDAQ:FELE) reported record second quarter 2005 net income of $13.5 million, an increase of 25 percent from $10.9 million for the same period a year ago. Diluted earnings per share were $0.59 compared to $0.48 for the second quarter of 2004. Sales for 2005 were also a second quarter record $123.5 million, an increase of $17.4 million or about 16 percent from $106.1 million for the same period a year ago. Foreign exchange rates accounted for $1.1 million of the increase. Operating earnings in the second quarter of 2005 were a record $20.9 million, up $3.8 million or 22 percent compared to $17.1 million a year ago. The improvement in operating earnings was primarily driven by the record sales and was partially offset by the increased costs of certain commodities used in the manufacture of electric motors and costs incurred in connection with the company's distribution channel strategy change and the global manufacturing realignment program. R. Scott Trumbull, Chairman and Chief Executive Officer, stated, "We are pleased with our second quarter financial results as well as with the sales mix that we are achieving. During 2004, 40 percent of our sales were to two major pump OEMs, while this year these two customers accounted for about one quarter of our sales. As our distributor pump and motor sales continue to grow rapidly, we expect the major pump OEM customers will continue to represent a smaller portion of our overall sales mix. Also, as we continue the implementation of our Global Manufacturing Realignment Program, our production mix is improving. In the second quarter of this year about 22 percent of our global water systems manufacturing man- hours were in low cost countries (Mexico, Czech Republic, and China) versus about 13 percent in second quarter last year. This percentage will increase significantly during the balance of 2005 and 2006 as we continue to ramp up our motor and component manufacturing in these countries. Also, during the 4 second quarter this year we broke ground on a new pump manufacturing facility located adjacent to our motor plant in Linares, Mexico." Water system product sales worldwide were up about 21 percent compared to the second quarter of 2004. The growth was attributable to increasing unit sales of pumps and motors, as well as improved sales mix due to growing volume sold directly to distributors. During the quarter Franklin introduced 3 new pump brands-SCHAEFER(tm), AQUADUTY(tm), and J-CLASS(tm). The company is in the process of establishing nationwide distributor networks for each of these brands. Fueling system product sales worldwide during the second quarter, recovering from a soft first quarter, were comparable to the same period in the prior year. During the second quarter Franklin Fueling Systems introduced its new electronic tank gauging and monitoring product (TS-5 SERIES). The new product is being performance tested by major petroleum marketers worldwide. Franklin Electric is a global leader in the production and marketing of groundwater and fuel pumping systems and is a technical leader in submersible motors, drives, controls, and monitoring devices. ######## "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. Any forward looking statements contained herein involve risks and uncertainties, including but not limited to, general economic and currency conditions, various conditions specific to the Company's business and industry, market demand, competitive factors, changes in distribution channels, supply constraints, technology factors, litigation, government and regulatory actions, the Company's accounting policies, future trends, and other risks which are detailed in the Company's Securities and Exchange Commission filings. These risks and uncertainties may cause actual results to differ materially from those indicated by the forward-looking statements. 5 FRANKLIN ELECTRIC CO., INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) Second Quarter Ended First Half Ended -------------------- ---------------- July 2, July 3, July 2, July 3, 2005 2004 2005 2004 ---- ---- ---- ---- Net sales $123,537 $106,144 $205,971 $186,351 Cost of sales 82,117 71,632 139,072 128,219 -------- ------- -------- -------- Gross profit 41,420 34,512 66,899 58,132 Selling and administrative expenses 19,976 16,003 36,248 30,981 Restructuring expense 505 1,387 710 1,952 -------- ------- -------- -------- Operating income 20,939 17,122 29,941 25,199 Interest expense (183) (93) (355) (199) Other income 190 10 341 28 Foreign exchange gain/(loss) (43) (174) (32) (224) -------- ------- -------- -------- Income before income taxes 20,903 16,865 29,895 24,804 Income taxes 7,358 5,987 10,539 8,805 -------- ------- -------- -------- Net income $ 13,545 $10,878 $ 19,356 $ 15,999 ======== ======= ======== ======== Net income per share: Basic $ 0.61 $ 0.50 $ 0.88 $ 0.73 ======== ======= ======== ======== Diluted $ 0.59 $ 0.48 $ 0.84 $ 0.70 ======== ======= ======== ======== Weighted average shares and equivalent shares outstanding: Basic 22,040 21,952 22,090 21,928 ======== ======= ======== ======= Diluted 22,994 22,897 23,127 22,864 ======== ======= ======== ======= 6 FRANKLIN ELECTRIC CO., INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) July 2, Jan. 1, 2005 2005 ---- ---- ASSETS: Cash and equivalents $ 25,480 $ 50,604 Investments 15,525 - Receivables 47,249 39,312 Inventories 75,772 62,442 Other current assets 14,378 13,784 -------- -------- Total current assets 178,404 166,142 Property, plant and equipment, net 89,492 95,924 Goodwill and other assets 69,188 71,407 -------- -------- Total assets $337,084 $333,473 ======== ======== LIABILITIES AND SHAREOWNERS' EQUITY: Current maturities of long-term debt and short-term borrowings $ 1,269 $ 1,304 Accounts payable 17,603 16,594 Accrued liabilities 38,320 36,547 -------- -------- Total current liabilities 57,192 54,445 Long-term debt 13,271 13,752 Deferred income taxes 6,998 6,304 Employee benefit plan obligations 18,467 18,801 Other long-term liabilities 5,770 5,838 Shareowners' equity 235,386 234,333 -------- -------- Total liabilities and shareowners' equity $337,084 $333,473 ======== ======== 7 FRANKLIN ELECTRIC CO., INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) July 2, July 3, 2005 2004 ---- ---- Cash flows from operating activities: Net income $ 19,356 $ 15,999 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation and amortization 7,783 7,758 Deferred income taxes 694 - Loss on disposals of plant and equipment 51 7 Changes in assets and liabilities: Receivables (9,244) (8,163) Inventories (16,879) (12,904) Accounts payable and other accrued expenses 6,879 12,258 Employee benefit plans 451 (3,713) Other, net (234) 1,173 -------- -------- Net cash flows from operating activities 8,857 12,415 -------- -------- Cash flows from investing activities: Additions to plant and equipment (5,569) (10,110) Proceeds from sale of plant and equipment 1,048 - Additions to deferred assets (1,005) (5) Cash paid for securities (93,500) - Proceeds from sale of securities 77,975 - -------- -------- Net cash flows from investing activities (21,051) (10,115) -------- -------- Cash flows from financing activities: Repayment of long-term debt (142) (414) Proceeds from issuance of common stock 4,356 3,034 Purchases of common stock (12,318) (3,091) Reduction of loan to ESOP Trust 233 232 Dividends paid (3,970) (3,296) -------- -------- Net cash flows from financing activities (11,841) (3,535) -------- -------- Effect of exchange rate changes on cash (1,089) 121 -------- -------- Net change in cash and equivalents (25,124) (1,114) Cash and equivalents at beginning of period 50,604 29,962 -------- -------- Cash and equivalents at end of period $ 25,480 $ 28,848 ======== ======== -----END PRIVACY-ENHANCED MESSAGE-----