Indiana | 35-0827455 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
400 East Spring Street | ||
Bluffton, Indiana | 46714 | |
(Address of principal executive offices) | (Zip Code) |
YESx | NOo |
YESx | NOo |
Large Accelerated Filerx | Accelerated Filero | Non-Accelerated Filero | Smaller Reporting Companyo |
YESo | NOx |
Outstanding at | ||
Class of Common Stock | October 1, 2011 | |
$.10 par value | 23,220,904 shares |
Page | |||
PART I. | FINANCIAL INFORMATION | Number | |
Item 1. | Financial Statements | ||
Condensed Consolidated Statements of Income for the Third Quarter and Nine Months Ended October 1, 2011 and October 2, 2010 | 4 | ||
Condensed Consolidated Balance Sheets as of October 1, 2011 and January 1, 2011 | 5 | ||
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended October 1, 2011 and October 2, 2010 | 7 | ||
Notes to Condensed Consolidated Financial Statements | 9 | ||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 23 | |
Item 4. | Controls and Procedures | 33 | |
PART II. | OTHER INFORMATION | ||
Item 1. | Legal Proceedings | 33 | |
Item 1A. | Risk Factors | 34 | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 34 | |
Item 4. | Reserved | ||
Item 6. | Exhibits | 34 | |
Signatures | 35 | ||
Exhibit Index | 36 | ||
Exhibits | 37 |
FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
Third Quarter Ended | Nine Months Ended | |||||||||||||||
October 1, 2011 | October 2, 2010 | October 1, 2011 | October 2, 2010 | |||||||||||||
As Adjusted | As Adjusted | |||||||||||||||
(Note 3) | (Note 3) | |||||||||||||||
Net sales | $ | 224,391 | $ | 188,409 | $ | 633,841 | $ | 538,820 | ||||||||
Cost of sales | 150,674 | 128,970 | 422,381 | 364,139 | ||||||||||||
Gross profit | 73,717 | 59,439 | 211,460 | 174,681 | ||||||||||||
Selling, general, and administrative expenses | 44,840 | 39,596 | 132,915 | 118,599 | ||||||||||||
Restructuring expense | 553 | 242 | 1,473 | 5,343 | ||||||||||||
Operating income | 28,324 | 19,601 | 77,072 | 50,739 | ||||||||||||
Interest expense | (2,917 | ) | (2,254 | ) | (7,529 | ) | (6,745 | ) | ||||||||
Other income/(expense) | 1,542 | 763 | 4,110 | (1,066 | ) | |||||||||||
Foreign exchange income/(expense) | (554 | ) | (510 | ) | (1,911 | ) | (200 | ) | ||||||||
Income before income taxes | 26,395 | 17,600 | 71,742 | 42,728 | ||||||||||||
Income taxes | 7,098 | 5,015 | 19,531 | 11,138 | ||||||||||||
Net income | $ | 19,297 | $ | 12,585 | $ | 52,211 | $ | 31,590 | ||||||||
Less: Net income attributable to noncontrolling interests | (77 | ) | (253 | ) | (657 | ) | (793 | ) | ||||||||
Net income attributable to Franklin Electric Co., Inc. | $ | 19,220 | $ | 12,332 | $ | 51,554 | $ | 30,797 | ||||||||
Income per share: | ||||||||||||||||
Basic | $ | 0.82 | $ | 0.53 | $ | 2.20 | $ | 1.33 | ||||||||
Diluted | $ | 0.80 | $ | 0.52 | $ | 2.16 | $ | 1.31 | ||||||||
Dividends per common share | $ | 0.14 | $ | 0.13 | $ | 0.40 | $ | 0.39 |
FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
October 1, 2011 | January 1, 2011 | |||||||
As Adjusted | ||||||||
(Note 3) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and equivalents | $ | 128,055 | $ | 140,070 | ||||
Receivables, less allowances of $2,866 and $2,340, respectively | 101,654 | 70,829 | ||||||
Inventories: | ||||||||
Raw material | 52,966 | 51,468 | ||||||
Work-in-process | 15,620 | 12,461 | ||||||
Finished goods | 85,501 | 76,303 | ||||||
154,087 | 140,232 | |||||||
Deferred income taxes | 14,349 | 13,182 | ||||||
Other current assets | 11,725 | 14,787 | ||||||
Total current assets | 409,870 | 379,100 | ||||||
Property, plant, and equipment, at cost: | ||||||||
Land and buildings | 88,090 | 84,724 | ||||||
Machinery and equipment | 189,928 | 181,291 | ||||||
Furniture and fixtures | 23,646 | 20,924 | ||||||
Other | 11,093 | 6,323 | ||||||
312,757 | 293,262 | |||||||
Less: Allowance for depreciation | (164,199 | ) | (150,186 | ) | ||||
148,558 | 143,076 | |||||||
Asset held for sale | 1,300 | 2,325 | ||||||
Intangible assets | 95,963 | 89,011 | ||||||
Goodwill | 170,594 | 165,193 | ||||||
Other assets | 18,387 | 9,854 | ||||||
Total assets | $ | 844,672 | $ | 788,559 |
October 1, 2011 | January 1, 2011 | |||||||
As Adjusted (Note 3) | ||||||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 49,853 | $ | 39,084 | ||||
Accrued expenses | 60,119 | 64,714 | ||||||
Income taxes | 7,499 | 4,268 | ||||||
Current maturities of long-term debt and short-term borrowings | 11,374 | 1,241 | ||||||
Total current liabilities | 128,845 | 109,307 | ||||||
Long-term debt | 154,199 | 151,245 | ||||||
Deferred income taxes | 24,153 | 17,887 | ||||||
Employee benefit plans | 50,484 | 65,967 | ||||||
Other long-term liabilities | 15,313 | 8,313 | ||||||
Commitments and contingencies | — | — | ||||||
Redeemable noncontrolling interest | 14,047 | 7,291 | ||||||
Shareowners' equity: | ||||||||
Common stock (65,000 shares authorized, $.10 par value) outstanding (23,221 and 23,257, respectively) | 2,322 | 2,326 | ||||||
Additional capital | 137,712 | 129,705 | ||||||
Retained earnings | 345,040 | 313,905 | ||||||
Accumulated other comprehensive loss | (30,247 | ) | (19,442 | ) | ||||
Total shareowners' equity | 454,827 | 426,494 | ||||||
Noncontrolling interest | 2,804 | 2,055 | ||||||
Total equity | 457,631 | 428,549 | ||||||
Total liabilities and equity | $ | 844,672 | $ | 788,559 |
FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
Nine Months Ended | ||||||||
(In thousands) | October 1, 2011 | October 2, 2010 | ||||||
As Adjusted | ||||||||
(Note 3) | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 52,211 | $ | 31,590 | ||||
Adjustments to reconcile net income to net cash flows from operating activities: | ||||||||
Depreciation and amortization | 19,277 | 18,638 | ||||||
Share-based compensation | 3,256 | 3,434 | ||||||
Deferred income taxes | 1,566 | 9,047 | ||||||
(Gain)/loss on disposals of plant and equipment | 1,481 | (1,096 | ) | |||||
Asset impairment | 200 | 2,459 | ||||||
Foreign exchange expense | 1,911 | — | ||||||
Excess tax from share-based payment arrangements | (930 | ) | (667 | ) | ||||
Changes in assets and liabilities: | ||||||||
Receivables | (23,400 | ) | (10,769 | ) | ||||
Inventory | (5,796 | ) | (2,953 | ) | ||||
Accounts payable and accrued expenses | 7,931 | 31,507 | ||||||
Income taxes | 7,436 | 1,539 | ||||||
Employee benefit plans | (12,951 | ) | (8,956 | ) | ||||
Other | 253 | (4,553 | ) | |||||
Net cash flows from operating activities | 52,445 | 69,220 | ||||||
Cash flows from investing activities: | ||||||||
Additions to property, plant, and equipment | (13,607 | ) | (11,326 | ) | ||||
Proceeds from sale of property, plant, and equipment | 324 | 1,591 | ||||||
Additions to other assets | — | (333 | ) | |||||
Cash paid for acquisitions, net of cash acquired | (25,143 | ) | (11,771 | ) | ||||
Additional consideration for prior acquisition | (6,623 | ) | — | |||||
Loan to customer | (3,171 | ) | — | |||||
Net cash flows from investing activities | (48,220 | ) | (21,839 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of debt | 5,080 | — | ||||||
Repayment of debt | (4,258 | ) | (712 | ) | ||||
Proceeds from issuance of common stock | 4,246 | 1,913 | ||||||
Excess tax from share-based payment arrangements | 930 | 667 | ||||||
Purchases of common stock | (10,629 | ) | (4,390 | ) | ||||
Dividends paid | (9,294 | ) | (9,311 | ) | ||||
Net cash flows from financing activities | (13,925 | ) | (11,833 | ) | ||||
Effect of exchange rate changes on cash | (2,315 | ) | (274 | ) | ||||
Net change in cash and equivalents | (12,015 | ) | 35,274 | |||||
Cash and equivalents at beginning of period | 140,070 | 86,875 | ||||||
Cash and equivalents at end of period | $ | 128,055 | $ | 122,149 | ||||
Cash paid for income taxes | $ | 7,450 | $ | (373 | ) | |||
Cash paid for interest | $ | 7,529 | $ | 6,754 | ||||
Non-cash items: | ||||||||
Payable to seller of acquired entities | $ | 5,587 | $ | 599 | ||||
Additions to property, plant, and equipment, not yet paid | $ | 1,339 | $ | 1,800 | ||||
Stock option exercises, forfeitures, or stock retirements | $ | — | $ | 599 |
Condensed Consolidated Statements of Income | Third Quarter Ended October 2, 2010 | |||||||||||
(In thousands, except per share amounts) | As Originally | Effect of | ||||||||||
Reported | As Adjusted | Change | ||||||||||
Cost of sales | $ | 129,138 | $ | 128,970 | $ | (168 | ) | |||||
Operating income | 19,433 | 19,601 | 168 | |||||||||
Income taxes | 4,960 | 5,015 | 55 | |||||||||
Net income | 12,472 | 12,585 | 113 | |||||||||
Net income attributable to Franklin Electric Co., Inc. | 12,219 | 12,332 | 113 | |||||||||
Income per share: | ||||||||||||
Basic | $ | 0.53 | $ | 0.53 | $ | — | ||||||
Diluted | $ | 0.52 | $ | 0.52 | $ | — | ||||||
Nine Months Ended October 2, 2010 | ||||||||||||
As Originally | Effect of | |||||||||||
Reported | As Adjusted | Change | ||||||||||
Cost of sales | $ | 364,643 | $ | 364,139 | $ | (504 | ) | |||||
Operating income | 50,235 | 50,739 | 504 | |||||||||
Income taxes | 10,973 | 11,138 | 165 | |||||||||
Net income | 31,251 | 31,590 | 339 | |||||||||
Net income attributable to Franklin Electric Co., Inc. | 30,458 | 30,797 | 339 | |||||||||
Income per share: | ||||||||||||
Basic | $ | 1.32 | $ | 1.33 | $ | 0.01 | ||||||
Diluted | $ | 1.30 | $ | 1.31 | $ | 0.01 | ||||||
Condensed Consolidated Balance Sheet | Year Ended January 1, 2011 | |||||||||||
(In thousands) | As Originally | Effect of | ||||||||||
Reported | As Adjusted | Change | ||||||||||
Inventories | $ | 126,007 | $ | 140,232 | $ | 14,225 | ||||||
Deferred income taxes | 18,762 | 13,182 | (5,580 | ) | ||||||||
Retained earnings | 305,260 | 313,905 | 8,645 | |||||||||
Condensed Consolidated Statement of Cash Flows | Nine Months Ended October 2, 2010 | |||||||||||
(In thousands) | As Originally | Effect of | ||||||||||
Reported | As Adjusted | Change | ||||||||||
Net income | $ | 31,251 | $ | 31,590 | $ | 339 | ||||||
Changes in assets and liabilities: | ||||||||||||
Inventory | (2,449 | ) | (2,953 | ) | (504 | ) | ||||||
Income taxes | 1,374 | 1,539 | 165 |
(In millions) | |||
Assets: | |||
Cash acquired | $ | 0.9 | |
Current assets | 26.4 | ||
Property, plant, and equipment | 11.5 | ||
Intangible assets | 15.3 | ||
Goodwill | 5.9 | ||
Other assets | 2.8 | ||
Total assets | 62.8 | ||
Contingent consideration | (5.5 | ) | |
Liabilities | (24.7 | ) | |
Total identifiable net assets | 32.6 | ||
Noncontrolling interest | (6.5 | ) | |
Total purchase price | $ | 26.1 |
(In millions) | October 1, 2011 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Cash equivalents | $ | 14.6 | $ | 14.6 | $ | — | $ | — | ||||||||
January 1, 2011 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Cash equivalents | $ | 20.0 | $ | 20.0 | $ | — | $ | — |
(In millions) | October 1, 2011 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Recognized Loss | |||||||||||||||
Asset held for sale | $ | 1.3 | $ | — | $ | — | $ | 1.3 | $ | 3.4 | ||||||||||
Impo contingent consideration | 4.9 | — | — | 4.9 | 0.3 | |||||||||||||||
$ | 6.2 | $ | — | $ | — | $ | 6.2 | $ | 3.7 | |||||||||||
January 1, 2011 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Recognized Loss | ||||||||||||||||
Asset held for sale | $ | 2.3 | $ | — | $ | — | $ | 2.3 | $ | 2.4 |
(In millions) | October 1, 2011 | January 1, 2011 | ||||||||||||||
Gross Carrying | Accumulated | Gross Carrying | Accumulated | |||||||||||||
Amount | Amortization | Amount | Amortization | |||||||||||||
Amortized intangibles: | ||||||||||||||||
Patents | $ | 7.9 | $ | (5.2 | ) | $ | 7.9 | $ | (4.8 | ) | ||||||
Supply agreements | 4.4 | (4.4 | ) | 4.4 | (3.9 | ) | ||||||||||
Technology | 7.5 | (2.6 | ) | 7.5 | (2.2 | ) | ||||||||||
Customer relationships | 79.8 | (16.3 | ) | 70.7 | (13.1 | ) | ||||||||||
Other | 1.2 | (1.1 | ) | 1.1 | (1.1 | ) | ||||||||||
Total | $ | 100.8 | $ | (29.6 | ) | $ | 91.6 | $ | (25.1 | ) | ||||||
Unamortized intangibles: | ||||||||||||||||
Trade names | 24.8 | — | 22.5 | — | ||||||||||||
Total intangibles | $ | 125.6 | $ | (29.6 | ) | $ | 114.1 | $ | (25.1 | ) |
(In millions) | 2011 | 2012 | 2013 | 2014 | 2015 | |||||||||||||||
$ | 5.6 | $ | 5.6 | $ | 5.4 | $ | 5.3 | $ | 5.3 |
(In millions) | Water Systems | Fueling Systems | Consolidated | |||||||||
Balance as of January 1, 2011 | $ | 107.0 | $ | 58.2 | $ | 165.2 | ||||||
Acquisitions | 5.9 | — | 5.9 | |||||||||
Adjustments to prior year acquisitions | — | 0.7 | 0.7 | |||||||||
Foreign currency translation | (1.3 | ) | 0.1 | (1.2 | ) | |||||||
Balance as of October 1, 2011 | $ | 111.6 | $ | 59.0 | $ | 170.6 |
(In millions) | Pension Benefits | |||||||||||||||
Third Quarter Ended | Nine Months Ended | |||||||||||||||
October 1, 2011 | October 2, 2010 | October 1, 2011 | October 2, 2010 | |||||||||||||
Service cost | $ | 0.7 | $ | 0.8 | $ | 2.6 | $ | 2.3 | ||||||||
Interest cost | 2.0 | 2.1 | 7.2 | 6.5 | ||||||||||||
Expected return on assets | (2.3 | ) | (2.2 | ) | (8.8 | ) | (7.4 | ) | ||||||||
Loss | 0.8 | 0.4 | 2.7 | 1.4 | ||||||||||||
Prior service cost | — | 0.1 | 0.1 | 0.2 | ||||||||||||
Settlement cost | — | — | — | 0.4 | ||||||||||||
Curtailment cost | — | — | — | 0.9 | ||||||||||||
Total net periodic benefit cost | $ | 1.2 | $ | 1.2 | $ | 3.8 | $ | 4.3 |
(In millions) | Other Benefits | |||||||||||||||
Third Quarter Ended | Nine Months Ended | |||||||||||||||
October 1, 2011 | October 2, 2010 | October 1, 2011 | October 2, 2010 | |||||||||||||
Interest cost | $ | 0.2 | $ | 0.2 | $ | 0.5 | $ | 0.6 | ||||||||
Loss | 0.1 | — | 0.1 | — | ||||||||||||
Prior service cost | 0.1 | — | 0.1 | — | ||||||||||||
Obligation | — | — | 0.1 | — | ||||||||||||
Curtailment cost | — | — | — | 0.2 | ||||||||||||
Total net periodic benefit cost | $ | 0.4 | $ | 0.2 | $ | 0.8 | $ | 0.8 |
(In millions) | October 1, 2011 | January 1, 2011 | ||||||
Prudential Agreement - 5.79 percent | $ | 150.0 | $ | 150.0 | ||||
Capital leases | 0.2 | 0.7 | ||||||
Foreign subsidiary debt | 15.4 | 1.8 | ||||||
165.6 | 152.5 | |||||||
Less current maturities | (11.4 | ) | (1.3 | ) | ||||
Long-term debt | $ | 154.2 | $ | 151.2 |
(In millions) | Total | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | More than 5 years | |||||||||||||||||||||
Debt | $ | 165.4 | $ | 11.2 | $ | 1.2 | $ | 1.0 | $ | 31.0 | $ | 31.0 | $ | 90.0 | ||||||||||||||
Capital leases | 0.2 | 0.2 | — | — | — | — | — | |||||||||||||||||||||
$ | 165.6 | $ | 11.4 | $ | 1.2 | $ | 1.0 | $ | 31.0 | $ | 31.0 | $ | 90.0 |
(In millions, except per share amounts) | Third Quarter Ended | Nine Months Ended | |||||||||||||
October 1, 2011 | October 2, 2010 | October 1, 2011 | October 2, 2010 | ||||||||||||
Numerator: | As Adjusted (Note 3) | As Adjusted (Note 3) | |||||||||||||
Net income attributable to Franklin Electric Co., Inc. | $ | 19.2 | $ | 12.3 | $ | 51.6 | $ | 30.8 | |||||||
Less: Undistributed earnings allocated to redeemable non- controlling interest | 0.2 | — | 0.5 | — | |||||||||||
$ | 19.0 | $ | 12.3 | $ | 51.1 | $ | 30.8 | ||||||||
Denominator: | |||||||||||||||
Basic | |||||||||||||||
Weighted average common shares | 23.2 | 23.2 | 23.2 | 23.2 | |||||||||||
Diluted | |||||||||||||||
Effect of dilutive securities: | |||||||||||||||
Employee and director incentive stock options and awards | 0.5 | 0.3 | 0.5 | 0.3 | |||||||||||
Adjusted weighted average common shares | 23.7 | 23.5 | 23.7 | 23.5 | |||||||||||
Basic earnings per share | $ | 0.82 | $ | 0.53 | $ | 2.20 | $ | 1.33 | |||||||
Diluted earnings per share | $ | 0.80 | $ | 0.52 | $ | 2.16 | $ | 1.31 | |||||||
Anti-dilutive stock options | 0.3 | 0.9 | 0.3 | 0.9 | |||||||||||
Anti-dilutive stock options price range – low | $ | 43.43 | $ | 28.82 | $ | 43.43 | $ | 28.82 | |||||||
Anti-dilutive stock options price range – high | $ | 48.87 | $ | 48.87 | $ | 48.87 | $ | 48.87 |
(In thousands) | ||||||||||||||||||||||||||||||||
Description | Common | Additional Paid in Capital | Retained Earnings | Minimum Pension Liability | Cumulative Translation Adjustment | Non-controlling Interest | Total Equity | Redeemable Non-controlling Interest | ||||||||||||||||||||||||
Balance as of January 1, 2011 | $ | 2,326 | $ | 129,705 | $ | 313,905 | $ | (38,485 | ) | $ | 19,043 | $ | 2,055 | $ | 428,549 | $ | 7,291 | |||||||||||||||
As Adjusted (Note 3) | ||||||||||||||||||||||||||||||||
Net income | 51,554 | 393 | 51,947 | 264 | ||||||||||||||||||||||||||||
Noncontrolling interest accretion | (521 | ) | (521 | ) | 521 | |||||||||||||||||||||||||||
Dividends on common stock | (9,294 | ) | (9,294 | ) | ||||||||||||||||||||||||||||
Common stock issued | 16 | 4,230 | 4,246 | |||||||||||||||||||||||||||||
Common stock repurchased or received for stock options exercised | (25 | ) | (10,604 | ) | (10,629 | ) | ||||||||||||||||||||||||||
Share-based compensation | 5 | 3,251 | 3,256 | |||||||||||||||||||||||||||||
Tax benefit of stock options exercised | 526 | 526 | ||||||||||||||||||||||||||||||
Impo acquisition | 6,521 | |||||||||||||||||||||||||||||||
Currency translation adjustment | (12,462 | ) | 356 | (12,106 | ) | (550 | ) | |||||||||||||||||||||||||
Pension liability, net of taxes | 1,657 | 1,657 | ||||||||||||||||||||||||||||||
Balance as of October 1, 2011 | $ | 2,322 | $ | 137,712 | $ | 345,040 | $ | (36,828 | ) | $ | 6,581 | $ | 2,804 | $ | 457,631 | $ | 14,047 |
(In millions) | Third Quarter Ended | Nine Months Ended | |||||||||||||
October 1, 2011 | October 2, 2010 | October 1, 2011 | October 2, 2010 | ||||||||||||
As Adjusted | As Adjusted | ||||||||||||||
(Note 3) | (Note 3) | ||||||||||||||
Net income | $ | 19.3 | $ | 12.6 | $ | 52.2 | $ | 31.6 | |||||||
Other comprehensive income, net of tax: | |||||||||||||||
Foreign currency translation adjustments | (26.8 | ) | 16.8 | (12.6 | ) | 0.2 | |||||||||
Pension liability adjustment | 0.5 | 0.5 | 1.6 | 1.5 | |||||||||||
Total other comprehensive income | $ | (7.0 | ) | $ | 29.9 | $ | 41.2 | $ | 33.3 | ||||||
Less: comprehensive income attributable to noncontrolling interest | 1.0 | (1.0 | ) | (0.4 | ) | (0.3 | ) | ||||||||
Comprehensive income attributable to Franklin Electric Co., Inc. | $ | (6.0 | ) | $ | 28.9 | $ | 40.8 | $ | 33.0 |
(In millions) | Third Quarter Ended | Nine Months Ended | ||||||||||||||
October 1, 2011 | October 2, 2010 | October 1, 2011 | October 2, 2010 | |||||||||||||
Net sales to external customers | ||||||||||||||||
Water Systems | $ | 179.4 | $ | 152.9 | $ | 510.1 | $ | 447.2 | ||||||||
Fueling Systems | 45.0 | 35.5 | 123.7 | 91.6 | ||||||||||||
Consolidated | $ | 224.4 | $ | 188.4 | $ | 633.8 | $ | 538.8 | ||||||||
Third Quarter Ended | Nine Months Ended | |||||||||||||||
October 1, 2011 | October 2, 2010 | October 1, 2011 | October 2, 2010 | |||||||||||||
As Adjusted (Note 3) | As Adjusted (Note 3) | |||||||||||||||
Operating income (loss) | ||||||||||||||||
Water Systems | $ | 29.0 | $ | 22.5 | $ | 86.7 | $ | 66.1 | ||||||||
Fueling Systems | 9.6 | 6.6 | 22.2 | 12.9 | ||||||||||||
Other | (10.3 | ) | (9.5 | ) | (31.8 | ) | (28.3 | ) | ||||||||
Consolidated | $ | 28.3 | $ | 19.6 | $ | 77.1 | $ | 50.7 | ||||||||
October 1, 2011 | January 1, 2011 | |||||||||||||||
As Adjusted (Note 3) | ||||||||||||||||
Total assets | ||||||||||||||||
Water Systems | $ | 551.3 | $ | 458.9 | ||||||||||||
Fueling Systems | 225.1 | 221.1 | ||||||||||||||
Other | 68.3 | 108.6 | ||||||||||||||
Consolidated | $ | 844.7 | $ | 788.6 |
(In millions) | |||
Balance as of January 1, 2011 | $ | 9.4 | |
Accruals related to product warranties | 5.6 | ||
Reductions for payments made | (5.7 | ) | |
Balance as of October 1, 2011 | $ | 9.3 |
Authorized Shares | |
Options | 1,600,000 |
Awards | 600,000 |
October 1, 2011 | October 2, 2010 | |||||
Risk-free interest rate | 0.05 - 4.84% | 1.61 - 3.20% | ||||
Dividend yield | 0.65 - 1.23% | 0.65 – 1.72% | ||||
Weighted-average dividend yield | 1.07 | % | 0.95 | % | ||
Volatility factor | 0.355 - 0.434 | 0.355 – 0.398 | ||||
Weighted-average volatility | 0.432 | 0.396 | ||||
Expected term | 1.5 years | 6.3 years | ||||
Forfeiture rate | 3.59 | % | 2.70 | % |
(Shares in thousands) | October 1, 2011 | October 2, 2010 | ||||||||||||
Stock Options | Shares | Weighted-Average Exercise Price | Shares | Weighted-Average Exercise Price | ||||||||||
Outstanding beginning of period | 1,817 | $ | 27.95 | 1,979 | $ | 26.80 | ||||||||
Granted | 113 | 43.43 | 157 | 29.03 | ||||||||||
Exercised | (160 | ) | 24.49 | (149 | ) | 17.28 | ||||||||
Forfeited | (14 | ) | 39.27 | (41 | ) | 36.05 | ||||||||
Outstanding end of period | 1,756 | $ | 29.17 | 1,946 | $ | 27.49 | ||||||||
Expected to vest after applying forfeiture rate | 1,736 | $ | 29.19 | 1,919 | $ | 27.57 | ||||||||
Vested and exercisable end of period | 1,207 | $ | 30.38 | 1,194 | $ | 30.09 |
Stock Options | Weighted-Average Remaining Contractual Term | Aggregate Intrinsic Value (000’s) | ||||
Outstanding end of period | 5.38 years | $ | 16,203 | |||
Expected to vest after applying forfeiture rate | 5.35 years | $ | 15,998 | |||
Vested and exercisable end of period | 4.24 years | $ | 10,022 |
(Shares in thousands) | October 1, 2011 | October 2, 2010 | ||||||||||||
Nonvested Stock Awards | Shares | Weighted-Average Grant Date Fair Value | Shares | Weighted-Average Grant Date Fair Value | ||||||||||
Nonvested at beginning of period | 128 | $ | 31.86 | 72 | $ | 40.12 | ||||||||
Awarded | 68 | 43.40 | 101 | 29.89 | ||||||||||
Vested | (3 | ) | 39.12 | (41 | ) | 41.31 | ||||||||
Forfeited | (20 | ) | 47.41 | — | 48.87 | |||||||||
Nonvested at end of period | 173 | $ | 34.44 | 132 | $ | 32.13 |
(In millions) | Third Quarter Ended | Nine Months Ended | |||||
October 1, 2011 | October 1, 2011 | ||||||
Severance and other employee assistance costs | $ | 0.3 | $ | 0.5 | |||
Equipment relocations | 0.1 | 0.1 | |||||
Asset write-off | 0.2 | 0.9 | |||||
Total | $ | 0.6 | $ | 1.5 |
(In millions) | Q3 2011 | Q3 2010 | 2011 v 2010 | |||||||||
Net Sales | ||||||||||||
Water Systems | $ | 179.4 | $ | 152.9 | $ | 26.5 | ||||||
Fueling Systems | 45.0 | 35.5 | 9.5 | |||||||||
Consolidated | $ | 224.4 | $ | 188.4 | $ | 36.0 |
(In millions) | Q3 2011 | Q3 2010 | 2011 v 2010 | |||||||||
As Adjusted (Note 3) | ||||||||||||
Operating income (loss) | ||||||||||||
Water Systems | $ | 29.0 | $ | 22.5 | $ | 6.5 | ||||||
Fueling Systems | 9.6 | 6.6 | 3.0 | |||||||||
Other | (10.3 | ) | (9.5 | ) | (0.8 | ) | ||||||
Consolidated | $ | 28.3 | $ | 19.6 | $ | 8.7 |
Operating Income and Margins | ||||||||||||||||
Before and After Non-GAAP Adjustments | ||||||||||||||||
(In millions) | For the Third Quarter 2011 | |||||||||||||||
Water | Fueling | Corporate | Consolidated | |||||||||||||
Reported Operating Income | $ | 29.0 | $ | 9.6 | $ | (10.3 | ) | $ | 28.3 | |||||||
% Operating Income (Margin) to Net Sales | 16.2 | % | 21.3 | % | 12.6 | % | ||||||||||
Non-GAAP Adjustments: | ||||||||||||||||
Restructuring | $ | 0.6 | $ | — | $ | — | $ | 0.6 | ||||||||
Operating Income after Non-GAAP Adjustments | $ | 29.6 | $ | 9.6 | $ | (10.3 | ) | $ | 28.9 | |||||||
% Operating Income (Margin) to Net Sales, after Non-GAAP Adjustments | 16.5 | % | 21.3 | % | 12.9 | % | ||||||||||
For the Third Quarter 2010 | ||||||||||||||||
Water | Fueling | Corporate | Consolidated | |||||||||||||
Reported Operating Income | $ | 22.5 | $ | 6.6 | $ | (9.5 | ) | $ | 19.6 | |||||||
% Operating Income (Margin) to Net Sales | 14.7 | % | 18.6 | % | 10.4 | % | ||||||||||
Non-GAAP Adjustments: | ||||||||||||||||
Restructuring | $ | 0.2 | $ | — | $ | — | $ | 0.2 | ||||||||
Operating Income after Non-GAAP Adjustments | $ | 22.7 | $ | 6.6 | $ | (9.5 | ) | $ | 19.8 | |||||||
% Operating Income (Margin) to Net Sales, after Non-GAAP Adjustments | 14.8 | % | 18.6 | % | 10.5 | % |
(In millions) | YTD 9 2011 | YTD 9 2010 | 2011 v 2010 | |||||||||
Net Sales | ||||||||||||
Water Systems | $ | 510.1 | $ | 447.2 | $ | 62.9 | ||||||
Fueling Systems | 123.7 | 91.6 | 32.1 | |||||||||
Consolidated | $ | 633.8 | $ | 538.8 | $ | 95.0 |
(In millions) | YTD 9 2011 | YTD 9 2010 | 2011 v 2010 | |||||||||
As Adjusted (Note 3) | ||||||||||||
Operating income (loss) | ||||||||||||
Water Systems | $ | 86.7 | $ | 66.1 | $ | 20.6 | ||||||
Fueling Systems | 22.2 | 12.9 | 9.3 | |||||||||
Other | (31.8 | ) | (28.3 | ) | (3.5 | ) | ||||||
Consolidated | $ | 77.1 | $ | 50.7 | $ | 26.4 |
Operating Income and Margins | ||||||||||||||||
Before and After Non-GAAP Adjustments | ||||||||||||||||
(In millions) | For the First Nine Months of 2011 | |||||||||||||||
Water | Fueling | Corporate | Consolidated | |||||||||||||
Reported Operating Income | $ | 86.7 | $ | 22.2 | $ | (31.8 | ) | $ | 77.1 | |||||||
% Operating Income (Margin) to Net Sales | 17.0 | % | 17.9 | % | 12.2 | % | ||||||||||
Non-GAAP Adjustments: | ||||||||||||||||
Restructuring | $ | 1.5 | $ | — | $ | — | $ | 1.5 | ||||||||
Legal matters | — | 0.7 | — | 0.7 | ||||||||||||
Gain on sale of land and building | — | — | — | — | ||||||||||||
Operating Income after Non-GAAP Adjustments | $ | 88.2 | $ | 22.9 | $ | (31.8 | ) | $ | 79.3 | |||||||
% Operating Income (Margin) to Net Sales, after Non-GAAP Adjustments | 17.3 | % | 18.5 | % | 12.5 | % | ||||||||||
For the First Nine Months of 2010 | ||||||||||||||||
Water | Fueling | Corporate | Consolidated | |||||||||||||
Reported Operating Income | $ | 66.1 | $ | 12.9 | $ | (28.3 | ) | $ | 50.7 | |||||||
% Operating Income (Margin) to Net Sales | 14.8 | % | 14.1 | % | 9.4 | % | ||||||||||
Non-GAAP Adjustments: | ||||||||||||||||
Restructuring | $ | 5.3 | $ | — | $ | — | $ | 5.3 | ||||||||
Legal matters | — | 3.8 | — | 3.8 | ||||||||||||
Gain on sale of land and building | (1.2 | ) | — | — | (1.2 | ) | ||||||||||
Operating Income after Non-GAAP Adjustments | $ | 70.2 | $ | 16.7 | $ | (28.3 | ) | $ | 58.6 | |||||||
% Operating Income (Margin) to Net Sales, after Non-GAAP Adjustments | 15.7 | % | 18.2 | % | 10.9 | % |
(c) | Issuer Repurchases of Equity Securities |
FRANKLIN ELECTRIC CO., INC. | |||
Registrant | |||
Date: November 8, 2011 | By | /s/ R. Scott Trumbull | |
R. Scott Trumbull, Chairman and Chief Executive Officer (Principal Executive Officer) | |||
Date: November 8, 2011 | By | /s/ John J. Haines | |
John J. Haines, Vice President and Chief Financial Officer and Secretary (Principal Financial and Accounting Officer) |
Number | Description | |
10.1 | $150,000,000 Credit Facility Commitment Letter, dated October 5, 2011, from JPMorgan Chase Bank, N.A. and J.P. Morgan Securities LLC (incorporated by reference to Exhibit 99.1 of the Company's Current Report on Form 8-K dated October 11, 2011) | |
31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
32.1 | Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
32.2 | Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
101.LAB | XBRL Taxonomy Extension Label Linkbase | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
1. | I have reviewed this quarterly report on Form 10-Q of Franklin Electric Co., Inc., for the third quarter ending October 1, 2011; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Franklin Electric Co., Inc. as of, and for, the periods presented in this report; |
4. | Franklin Electric Co., Inc.’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Franklin Electric Co., Inc. and we have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Franklin Electric Co., Inc., including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of Franklin Electric Co., Inc.’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any changes in Franklin Electric Co., Inc.’s internal control over financial reporting that occurred during Franklin Electric Co., Inc.’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Franklin Electric Co., Inc.’s internal control over financial reporting; and |
5. | Franklin Electric Co., Inc.’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Franklin Electric Co., Inc.’s auditors and the audit committee of Franklin Electric Co., Inc.’s board of directors: |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Franklin Electric Co., Inc.’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in Franklin Electric Co., Inc.’s internal control over financial reporting. |
Date: | November 8, 2011 | |
/s/ R. Scott Trumbull | ||
R. Scott Trumbull | ||
Chairman and Chief Executive Officer | ||
Franklin Electric Co., Inc. |
1. | I have reviewed this quarterly report on Form 10-Q of Franklin Electric Co., Inc.; for the third quarter ending October 1, 2011; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Franklin Electric Co., Inc. as of, and for, the periods presented in this report; |
4. | Franklin Electric Co., Inc.’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Franklin Electric Co., Inc., including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of Franklin Electric Co., Inc.’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in Franklin Electric Co., Inc.’s internal control over financial reporting that occurred during Franklin Electric Co., Inc.’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Franklin Electric Co., Inc.’s internal control over financial reporting; and |
5. | Franklin Electric Co., Inc.’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Franklin Electric Co., Inc.’s auditors and the audit committee of Franklin Electric Co., Inc.’s board of directors: |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Franklin Electric Co., Inc.’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 8, 2011 | |
/s/ John J. Haines | ||
John J. Haines | ||
Vice President and Chief Financial Officer and Secretary | ||
Franklin Electric Co., Inc. |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | November 8, 2011 | |
/s/ R. Scott Trumbull | ||
R. Scott Trumbull | ||
Chairman and Chief Executive Officer | ||
Franklin Electric Co., Inc. |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | November 8, 2011 | |
/s/ John J. Haines | ||
John J. Haines | ||
Vice President and Chief Financial Officer and Secretary | ||
Franklin Electric Co., Inc. |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Per Share data | Oct. 01, 2011 | Jan. 01, 2011 |
---|---|---|
Current assets: | ||
Allowance for doubtful accounts | $ 2,866 | $ 2,340 |
Shareowners' Equity: | ||
Common shares, authorized | 65,000 | 65,000 |
Common shares, par value | $ 0.10 | $ 0.10 |
Common shares, outstanding | 23,221 | 23,257 |
SEGMENT INFORMATION (Details) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 01, 2011 | Oct. 02, 2010 | Oct. 01, 2011 | Oct. 02, 2010 | Jan. 01, 2011 | |
Segment Reporting Information | |||||
Net sales to external customers | $ 224,391 | $ 188,409 | $ 633,841 | $ 538,820 | |
Operating income (Loss) | 28,324 | 19,601 | 77,072 | 50,739 | |
Total assets | 844,672 | 844,672 | 788,559 | ||
Water Systems | |||||
Segment Reporting Information | |||||
Net sales to external customers | 179,400 | 152,900 | 510,100 | 447,200 | |
Operating income (Loss) | 29,000 | 22,500 | 86,700 | 66,100 | |
Total assets | 551,300 | 551,300 | 458,900 | ||
Fueling Systems | |||||
Segment Reporting Information | |||||
Net sales to external customers | 45,000 | 35,500 | 123,700 | 91,600 | |
Operating income (Loss) | 9,600 | 6,600 | 22,200 | 12,900 | |
Total assets | 225,100 | 225,100 | 221,100 | ||
Other | |||||
Segment Reporting Information | |||||
Operating income (Loss) | (10,300) | (9,500) | (31,800) | (28,300) | |
Total assets | $ 68,300 | $ 68,300 | $ 108,600 |
SHARE-BASED COMPENSATION | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 01, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION On April 24, 2009, the Amended and Restated Franklin Electric Co., Inc. Stock Plan (the “Stock Plan”) was approved by the Company’s shareholders. Under the Stock Plan, employees and non-employee directors may be granted stock options or awards. The Stock Plan was amended and restated to, among other things, increase the number of shares available for issuance from 1,300,000 to 2,200,000 shares as follows:
The Company currently issues new shares from its common stock balance to satisfy option exercises under the Stock Plan and a similar prior plan and stock awards under the Stock Plan. Stock Option Grants The fair value of each option award for options granted or vesting is estimated on the date of grant using the Black-Scholes option valuation model with a single approach and amortized using a straight-line attribution method over the option’s vesting period. The assumptions used for the Black-Scholes model to determine the fair value of options granted during the nine months ended October 1, 2011 and October 2, 2010, are as follows:
A summary of the Company’s stock option plans activity and related information for the nine months ended October 1, 2011 and October 2, 2010, is as follows:
A summary of the weighted average remaining contractual term and aggregate intrinsic value for the nine months ended October 1, 2011 is as follows:
There were no options granted during the third quarter 2011. The total intrinsic value of options exercised during the third quarter October 1, 2011 and October 2, 2010 was $0.8 million and $0.1 million, respectively. There were no share-based liabilities paid during the third quarter 2011. As of October 1, 2011, there was $2.7 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Stock Plan in the form of stock options. That cost is expected to be recognized over a weighted-average period of 1.67 years. Stock Awards A summary of the Company’s stock award activity and related information for the nine months ended October 1, 2011 and October 2, 2010, is as follows:
There were no stock awards granted during the third quarter of 2011. As of October 1, 2011, there was $3.7 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Stock Plan in the form of stock awards. That cost is expected to be recognized over a weighted-average period of 2.48 years. |
DOCUMENT AND ENTITY INFORMATION (USD $) | 3 Months Ended | |
---|---|---|
Oct. 01, 2011 | Jul. 02, 2011 | |
Document Information | ||
Entity Registrant Name | FRANKLIN ELECTRIC CO INC | |
Entity Central Index Key | 0000038725 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Public Float | $ 1,085,986,258 | |
Entity Common Stock, Shares Outstanding | 23,220,904 | |
Document Fiscal Year Focus | 2011 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Oct. 01, 2011 |
ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES (Details) (USD $) In Millions | 9 Months Ended | |
---|---|---|
Oct. 01, 2011 | Jan. 01, 2011 | |
Income Tax Contingency | ||
Unrecognized Tax Benefits | $ 6.0 | $ 3.6 |
Unrecognized tax benefits related to prior year acquisistions | 3.3 | |
Unrecognized tax benefits that would impact effective tax rate if recognized | 2.4 | |
Reserve for interest and penalties | 0.4 | 0.4 |
Federal | ||
Income Tax Contingency | ||
Unrecognized tax benefits recorded for state and federal tax liabilities | 2.2 | |
State | ||
Income Tax Contingency | ||
Unrecognized tax benefits recorded for state and federal tax liabilities | 0.2 | |
Unrecognized tax benefits that would impact effective tax rate if recognized | $ 0.3 |
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 01, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Prior Period Adjustments to Condensed Consolidated Statements | As a result of the retrospective application of this change in accounting principle, certain financial statement line items in the Company’s condensed consolidated balance sheet as of January 1, 2011, its condensed consolidated statements of income for the three and nine months ended October 2, 2010, and condensed consolidated statement of cash flows for the nine months ended October 2, 2010 were adjusted as presented below:
|
INCOME TAXES (Details) | 9 Months Ended |
---|---|
Oct. 01, 2011 | |
Statutory Income Tax Rate [Line Items] | |
United States statutory rate | 35.00% |
"+ text.join( "
\n" ) +"
" + text[p] + "
\n"; } } }else{ formatted = '' + raw + '
'; } html = ''+ "\n"+''+ "\n"+''+ "\n"+' formatted: '+ ( this.Default == 'raw' ? 'as Filed' : 'with Text Wrapped' ) +''+ "\n"+' | '+ "\n"+'
'+ "\n"+' | '+ "\n"+' '+ "\n"+'
'+ "\n"+' | '+ "\n"+' '+ "\n"+'
OTHER ASSETS | 9 Months Ended |
---|---|
Oct. 01, 2011 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY INVESTMENTS | OTHER ASSETS The Company holds a 35 percent equity interest in Pioneer Pump, Inc., which is accounted for using the equity method and included in “Other assets” on the consolidated balance sheet. The carrying amount of the investment is adjusted for the Company’s proportionate share of earnings, losses, and dividends. The carrying value of the investment was $10.6 million as of October 1, 2011 and $8.8 million as of January 1, 2011. The Company’s proportionate share of Pioneer Pump, Inc. earnings, included in “Other income/(expense)” in the Company’s statements of income, was $0.8 million and $0.3 million for the third quarter ended October 1, 2011 and October 2, 2010, respectively, and $1.9 million and $0.7 million for the nine months ended October 1, 2011 and October 2, 2010, respectively. During the second quarter, the Company entered into a loan agreement with a parent of a customer. The current maturity is included in "Receivables" and the long term portion is included in "Other assets" on the consolidated balance sheet. The agreement provides for interest on the loan at a variable market interest rate with the customer to repay the loan plus interest in semi-annual installments throughout the seven year term. The Company has a long term relationship with the customer and considers the loan fully collectible. |
ACQUISITIONS (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 01, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price Allocation | The preliminary purchase price assigned to each major identifiable asset and liability was as follows:
|
OTHER ASSETS (Details) (USD $) In Millions, unless otherwise specified | 3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 01, 2011 | Oct. 02, 2010 | Oct. 01, 2011 | Oct. 02, 2010 | Jan. 01, 2011 | |
Schedule of Equity Method Investments | |||||
Percent equity interest | 35.00% | 35.00% | |||
Carrying value of the investment | $ 10.6 | $ 10.6 | $ 8.8 | ||
Proportionate share of earnings | $ 0.8 | $ 0.3 | $ 1.9 | $ 0.7 | |
Loans Receivable, Maturity Period | 7Y |
RESTRUCTURING (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 01, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of restructuring cost incurred, included in the Restructuring Expense | Costs incurred in the third quarter and nine months ended October 1, 2011 included in the “Restructuring expense” line of the income statement are as follows:
|
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
---|---|
Oct. 01, 2011 | |
Accounting Policies [Abstract] | |
Inventory Policy | Effective January 2, 2011, the Company elected to change its accounting method of valuing all of its inventories that used the last-in, first-out (“LIFO”) method to the first-in, first-out (“FIFO”) method. Inventories valued using the LIFO and FIFO methods represented approximately 11% and 85%, respectively, of total inventories as of January 1, 2011 with the remaining inventory recorded using the average cost method. The Company believes the change is preferable because it will (1) more closely reflect current acquisition cost and improve the matching of revenue and expense, (2) conform 96% of the Company’s method of inventory valuation to the FIFO method and (3) enhance comparability with industry peers. The Company applied this change in accounting principle retrospectively to all prior periods presented herein in accordance with FASB Accounting Standards Codification ("ASC") Topic 250, Accounting Changes and Error Corrections. As a result of the accounting change, retained earnings as of January 2, 2010 increased from $285.5 million to $294.1 million. As of January 2, 2011, the Company converted all LIFO inventory balances in its accounting systems to FIFO inventory which effectively eliminated its LIFO pools prospectively. |
DEBT | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 01, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT Debt consisted of the following:
During the second quarter, the Company acquired $13.7 million of debt with the acquisition of the 80 percent interest in Impo. In September 2011, Impo finalized a refinancing plan. As a result of this refinancing, Impo now has approximately $18.5 million of credit available. As of third quarter end, Impo had debt outstanding of approximately $13.9 million, comprised of $10.7 million of current maturities and $3.2 million of long term debt, with interest rates ranging from 3 percent to 13 percent and maturity dates ranging from 2011 to February 2018. The debt at quarter end was denominated in euro, U.S. dollar, and TL currencies and was included in the foreign subsidiary debt line of the above table. The total estimated fair value of debt was $180.9 million and $162.0 million at October 1, 2011 and January 1, 2011, respectively. The fair value assumed floating rate debt was valued at par. In the absence of quoted prices in active markets considerable judgment is required in developing estimates of fair value. Estimates are not necessarily indicative of the amounts the Company could realize in a current market transaction. In determining the fair value of its long term debt the Company uses estimates based on rates currently available to the Company for debt with similar terms and remaining maturities. The following debt payments are expected to be paid in accordance with the following schedule:
|
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 01, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES During the nine fiscal months ended October 1, 2011, the Company did not change any of its existing accounting policies with the exception of the following accounting principle, which was adopted and became effective with respect to the Company on January 2, 2011. Effective January 2, 2011, the Company elected to change its accounting method of valuing all of its inventories that used the last-in, first-out (“LIFO”) method to the first-in, first-out (“FIFO”) method. Inventories valued using the LIFO and FIFO methods represented approximately 11% and 85%, respectively, of total inventories as of January 1, 2011 with the remaining inventory recorded using the average cost method. The Company believes the change is preferable because it will (1) more closely reflect current acquisition cost and improve the matching of revenue and expense, (2) conform 96% of the Company’s method of inventory valuation to the FIFO method and (3) enhance comparability with industry peers. The Company applied this change in accounting principle retrospectively to all prior periods presented herein in accordance with FASB Accounting Standards Codification ("ASC") Topic 250, Accounting Changes and Error Corrections. As a result of the accounting change, retained earnings as of January 2, 2010 increased from $285.5 million to $294.1 million. As of January 2, 2011, the Company converted all LIFO inventory balances in its accounting systems to FIFO inventory which effectively eliminated its LIFO pools prospectively. As a result of the retrospective application of this change in accounting principle, certain financial statement line items in the Company’s condensed consolidated balance sheet as of January 1, 2011, its condensed consolidated statements of income for the three and nine months ended October 2, 2010, and condensed consolidated statement of cash flows for the nine months ended October 2, 2010 were adjusted as presented below:
As a result of the conversion described above it is necessary to estimate the effect of the change in accounting method on the current period. The estimated impact of this accounting change on the condensed consolidated statements of income as computed under LIFO for the three and nine months ended October 1, 2011 would be an increase in cost of sales of $0.4 million and $1.2 million, respectively; a decrease in operating income of $0.4 million and $1.2 million, respectively; a decrease in income taxes of $0.1 million and $0.3 million, respectively; a decrease in net income of $0.3 million and $0.9 million, respectively; a decrease in net income attributable to Franklin Electric Co., Inc. of $0.3 million and $0.9 million, respectively; and a decrease in both basic and diluted income per share of $0.01 and $0.03, respectively. The estimated impact of this change to the condensed consolidated balance sheet as computed under LIFO as of October 1, 2011, would be a decrease in inventories of $15.4 million, an increase in deferred income taxes of $5.9 million, and a decrease in retained earnings of $9.5 million. The estimated impact to the condensed consolidated statement of cash flows for the nine months ended October 1, 2011 would be a reduction of cash provided by net income of $0.9 million offset by a $1.2 million source of cash from the reduction in inventory and a $0.3 million use of cash from the reduction in income taxes. There would be no impact to net cash flows from operating activities in the nine months ended October 1, 2011. |
SEGMENT INFORMATION (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 01, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Information by Reportable Business Segment | Financial information by reportable business segment is included in the following summary:
|
EMPLOYEE BENEFIT PLANS | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 01, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Defined Benefit Plans – As of October 1, 2011, the Company maintained three domestic pension plans and three German pension plans (collectively, the "Plans"). The Company uses a December 31 measurement date for its Plans. The following table sets forth aggregated net periodic benefit cost and other benefit cost for the third quarter and nine months ended October 1, 2011 and October 2, 2010, respectively:
In the nine months ended October 1, 2011, the Company made contributions to the Plans of $15.9 million. The amount of contributions to be made to the Plans during calendar year 2011 was finalized September 15, 2011 based upon the Plans' year-end valuation at January 1, 2011 and the desired funding level to be achieved as of January 1, 2011. |
EQUITY ROLL FORWARD | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 01, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statement of Stockholders' Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY ROLL FORWARD | EQUITY ROLL FORWARD The schedule below sets forth equity changes in the nine months ended October 1, 2011:
|
INCOME TAXES | 9 Months Ended |
---|---|
Oct. 01, 2011 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective tax rate on income before income taxes in 2011 and 2010 varies from the United States statutory rate of 35 percent primarily due to the indefinite reinvestment of foreign earnings and reduced taxes on foreign and repatriated earnings after the restructuring of certain foreign entities. The Company has the ability to indefinitely reinvest these foreign earnings based on the earnings and cash projections of its other operations as well as cash on hand and available credit. |
EARNINGS PER SHARE (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 01, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Earnings Per Share | Following is the computation of basic and diluted earnings per share:
|
INTANGIBLE ASSETS AND GOODWILL | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 01, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL The carrying amounts of the Company’s intangible assets are as follows:
Amortization expense related to intangible assets for the third quarter ended October 1, 2011 and October 2, 2010 was $1.6 million and $1.3 million, respectively, and for the nine months ended October 1, 2011 and October 2, 2010, was $4.5 million and $3.8 million, respectively. Amortization expense is projected as follows:
The change in the carrying amount of goodwill by reporting segment for the nine months ended October 1, 2011, is as follows:
The 2006 purchase agreement for Healy Systems, Inc. provides for additional payments of 5 percent of certain Healy Systems, Inc. product sales through August 31, 2011. Adjustments to prior year acquisitions primarily include those contingency commitments to the former owners of Healy Systems, Inc. |
OTHER COMPREHENSIVE INCOME (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2011 | Oct. 02, 2010 | Oct. 01, 2011 | Oct. 02, 2010 | |
Net income | $ 19,297,000 | $ 12,585,000 | $ 52,211,000 | $ 31,590,000 |
Other comprehensive income, net of tax: | ||||
Foreign currency translation adjustments | (26,800,000) | 16,800,000 | (12,600,000) | 200,000 |
Pension liability adjustment | 500,000 | 500,000 | 1,600,000 | 1,500,000 |
Total other comprehensive income | (7,000,000) | 29,900,000 | 41,200,000 | 33,300,000 |
Less: comprehensive income attributable to noncontrolling interest | 1,000,000 | (1,000,000) | (400,000) | (300,000) |
Comprehensive income attributable to Franklin Electric Co., Inc. | $ (6,000,000) | $ 28,900,000 | $ 40,800,000 | $ 33,000,000 |
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | 9 Months Ended |
---|---|
Oct. 01, 2011 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The accompanying condensed consolidated balance sheet as of January 1, 2011, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements as of October 1, 2011 and for the third quarter and nine months ended October 1, 2011 and October 2, 2010, have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, all accounting entries and adjustments (including normal, recurring accruals) considered necessary for a fair presentation of the financial position and the results of operation for the interim period have been made. Operating results for the third quarter and nine months ended October 1, 2011 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2011. For further information, including a description of the Company’s critical accounting policies, refer to the consolidated financial statements and notes thereto included in Franklin Electric Co., Inc.'s Annual Report on Form 10-K for the year ended January 1, 2011. |
ACQUISITIONS | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 01, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS | ACQUISITIONS In an agreement dated May 2, 2011, between Franklin Electric BV (a wholly owned subsidiary of the Company) and Impo Motor Pompa Sanayi ve Ticaret A.S. ("Impo"), the Company acquired 80 percent of the outstanding shares of Impo, net of debt acquired plus working capital adjustments, for approximately 40.0 million Turkish lira ("TL"), $26.1 million at the then current exchange rate, subject to certain terms and conditions. Impo, located in Izmir, Turkey, is the leading supplier of groundwater pumping equipment in Turkey. The Impo acquisition, combined with the Company's current presence in the region, will provide the Company with the leading position in the rapidly growing market for groundwater pumping systems in Turkey and throughout the Middle East. It will also provide a low cost manufacturing base for supplying the entire region. The preliminary intangible assets of $15.3 million consist primarily of customer relationships, which will be amortized over 13 years, and trademarks. All of the goodwill was recorded as part of the Water Systems segment and is not expected to be deductible for tax purposes. The purchase agreement for Impo includes an earn-out provision payable to the sellers if certain performance criteria are achieved in any year from 2011 to 2013. Additional payments will not exceed TL 10.0 million. As of the acquisition date, the Company recorded contingent consideration of TL 8.5 million ($5.5 million) as determined by the income approach. The preliminary purchase price assigned to each major identifiable asset and liability was as follows:
Preliminary goodwill decreased by $1.4 million in the third quarter ended October 1, 2011, due to additional information provided for the provisional valuation. The fair value of the identifiable intangible assets and property, plant, and equipment are provisional amounts pending final valuations and purchase accounting adjustments. The Company utilized management estimates and consultation with an independent third-party valuation firm to assist in the valuation. Acquisition-related costs, primarily included in selling, general, and administrative expenses in the Company's statement of income, were $0.2 million for the nine months ended October 1, 2011. The results of operations of Impo were included in the Company's consolidated statements of income from its acquisition date through the third quarter ended October 1, 2011. The difference between actual sales for the Company and proforma annual sales including Impo as if it were acquired at the beginning of 2010 was not material as a component of the Company's consolidated sales for the nine months ending October 1, 2011 and October 2, 2010, respectively. |
DEBT (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 01, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Debt consisted of the following:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Payments | The following debt payments are expected to be paid in accordance with the following schedule:
|
KA&-&3MVF
MLJM@K%NN1%7JVBXMO89E*FZ]P*L-XM]SY#RFTU9T55>0C1581BC%K4563&0A-&TV-,R5&34H'K0+&,_-7+$-OE^`X%5
M@D-AW8[=\H6HBV1,I7K]ZILL;5KUM3L_:XN(B6JJQ%"I9#E4Q9JN5\795#9L
MM4%%LK87?AJJEBC0#:#B^]1QE`8^+\+GQ4S95-EK_?I^ZZ`6@`Q&[SJRR]]_
MZP2IO$)2+;5.'56K24E;+CO8B=O#"`Q]\\8?(3/+M'7X%RF($!`=+YN1JK)I
M%]/YG?FB>.P2"Z%=$HQM9!I4@6`N44),&=M5Q9ULHUJAVF6;D;9/TSQ*_"*Z
M[:A$AZ69J5N2@0VB5ZMDFTIV;9/B4EU^)]-*;71\%2)173$AZ>)+$$E6+ OG)65NW*\')7Y$MS8/-ME1)UP-Q
M=Q7H@1;8)[^.DZ*LR/_JJ*AH0?(Q("#93X7`)UJ,X+EH`@-\R:M.&9ZRH;##
M\H_2]=LKJFS)MNZK.E@;8:":FC"A;5,UG6[61%-J01I:]W//#@M^(M">2L-U
M$?/`,H!SAQF"M68$MJH$KBX$CN)IIO$J$=O`;IO1,639]KQ0U31=UEU?48P&
M'1^O@ _$
M:S%+>2B^G#*:Y\(YJ+"\<@7GXSG7MY9^_:.X,\P%.*%K1Q?>_[GM8U-2U=@0
M=]W1LN]Y6.T661K?:3;WO8K9=,KGV/G$T&CQ.AJYIH"57E9L-?D/^+V50INO
M#[9?7;\0KF^>)/)SS2O6$K*BE6U9@@S6/DE$AXWPTVIA&0`?T'2^=LPB44VN
M\;N%TUP)"\BSQ;6+S.5I\I,O"O'EF>3NP(M*A]E5E5JY;-Y39PQ_+-SAY2$!
M1N8DG+,ZH]A19K!7?RXIJI2GF+&NPUQ@2Y40JY>3.>>@X5P&4;W8LICN67J=
MY%G*AQ8NF$?[E>M2!?4YA&!I`YE9'E=%)?D>ND)X=>=U\8M-T8JX[2I):U5;
M%/0[7`!=5'>D_I%F-Z`EW^?%"B_"!M"JH&:17VDP KCFW:JD%4AQ!?=1KY``JLP-.11H8`
M)RZ?G@W'D:D-K.BR:[B&YCDP@?@UY]33/'7-5**K=`"8NU S25D))2G:E]4/2;,;Z3*$2Z^N\NQG
M,@U+-KD=4#G,8ZUSY8A`OY-2"J_#9,+!J1(&_#$46R#K?&Y_W;#%TK@>L Y;LB1!W)(
M1:A"SPUYK+/(JM5W/Z"H9X+,!-)8/TEX'I@AAB6*)/&9\CE78)) @5F044S:J&SJ950W7V;ILB1Q2C
MI1FJLD";0PR$0.7"-%42*%X^OUO=>8SR_NITFS1E<1Y7LBB=S&_P:U0F$J-`
MD7`HXG)2.4=3E8U3H5VU8D(UG#P&Y'`BB5,H[(/"OF>;W(G^P )91'#,RW7:@"=ZU>PBC.D(X'I
M5D,,RPDUHH9J8+JF@4-B.%YCJQTM",SM@^V; "WF.\C$?
MWHO$)10.MR1#E@V!,GF815=<,";CG,3BK#\7%3=U5:R9L)G@##2IHD:#5JOB
MUUNKRL&GN$-)7A-D1F[W5N0WI`E7F];A:L)>HMO@-%8'IPF>S.TFJF/:6!W3
M5EM(OGUO7_A0*"N&(@?;C%FV_D"0KX\,YUH%-B751LC`XI*T:&IY4RM&.N3Q
M.:AF)>7"%*LOO%0/UYH$,PM4M`CU:6$84QKMX?CI_Z-D]QB67#'1UMS@Y\R^>5EJ=&;0P4ETA-$!0.
M
"S/
M=TWJJ3*`J44TQ]!JQ;`72%0)G>
M<3M:;WXX2>0/=2-)BJYSC=)U7U8THGE4AZFK(LFTUZ@4^"#RPRGRDB*:9,4L
M7WBA&YV(.4F!9GG4("ZAOJ')GN:Z9BTERY1MQSSX<,>O;_OH9\F4%=(G=B-]
MS:;AYD"[=?LD2=G1)1-Q/:C$+^]ZBA/$UYOJ/>>@4]6#/-\YVQHD/`.E%6$P
M?GRPBJ0`X!8M4RZ9=)%-)MD-Q*3;FZ<\%]&/"L.Z(+;UC*7D"(&073PC26,P
M$?&]_9(TR\$JEP)_F5\S?W"U\R!BDTE]S?L#=%MK-PL]8/>)H.7]@:[_
\=1Z$3'/W^-?IR['W_?/3%2"D\6CK>19'-'<*T8B/56!'O$,-%'S
M1=OC?^;$1;+\$T;G1'/0TR*;@FI.#K0[.W&.M=OEZ,2C\[.^0+,QEB0$?;KY
MT_6/^-,OSH^DU,%KD5_"I4^NUE6].PZ+3^!N:LEK';K)VGY;UY_^@)$6]>DW
M=SIPTJ9#@S8:2QVW+@^[7X">"AA_#H'E`DPJA+-G,#$]P=IW;%WEFD.2'SJ5
M,JDMTMH,ZZ&O(51T"%7Y@0Z^@38;OU43ZQGP'MBA`G@_K4>Y7-5,"H153PTN
M=9ED\]K2:,+6-KVV>J=%OGBU/6]W;&K>06TD:99.\X8G/VK6:3
,:H
MU4OLL%4RJV0O4K*'_%RK9,-GXLU<+1H
M=[5D9LG,^AJ#^AI8C?1&J%5/JY[6U["^QE9]#61K8L;('_UWI=,C]QV_M8&M
M@3;/ENGA>;VUY$=,T$^?C$-Q5X/UG'*U6"3%E'XQB;_:/T1IQ`&[B`,
MP:G0-Z&AVT11JBR>L+&1LC5@5M7;5'[(.,WY&^]2?IW8K#8
JAQV'.(Z:!M5#W2*U-@4LU
MS7TY9_30YHR;HSCKAUG>_"2N6X9(\LWC,U#$'G5#P\2.BK'ONA136D^C1[A.
MSEN`"7X\RNC:CSLZJIU%-=W_<MDU35