8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 26, 2022

FRANKLIN ELECTRIC CO., INC.

(Exact name of registrant as specified in its charter)

Indiana	0-362	35-0827455
(State of incorporation)	(Commission File Number)	(IRS employer identification no.)

9255 Coverdale Road
Fort Wayne,	Indiana	46809
(Address of principal executive offices)		(Zip code)

(260) 824-2900

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $0.10 par value	FELE	NASDAQ	Global Select Market
(Title of each class)	(Trading symbol)	(Name of each exchange on which registered)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition

On April 26, 2022, Franklin Electric Co., Inc. issued a press release announcing its earnings for the first quarter of 2022. A copy of the release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference. This Current Report on Form 8-K and the press release attached hereto are being furnished pursuant to Item 2.02 of Form 8-K.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits:

Exhibit Number	Description
99.1	Press release - "Franklin Electric Reports Record First Quarter 2022 Results"
101	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
104	The cover page from this Current Report on Form 8-K, formatted as Inline XBRL

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FRANKLIN ELECTRIC CO., INC.

(Registrant)

Date: April 26, 2022	By	/s/ Jeffery L. Taylor
		Jeffery L. Taylor
		Vice President, Chief Financial Officer
		(Principal Financial and Accounting Officer)

EX-99.1

Exhibit 99.1

NEWS RELEASE FOR IMMEDIATE DISTRIBUTION

FRANKLIN ELECTRIC REPORTS RECORD FIRST QUARTER 2022 RESULTS

First Quarter 2022 Highlights

•Record sales of $451.5 million, compared to first quarter 2021 sales of $333.0 million, an increase of 36%

•Strong organic sales growth in all three Segments; Fueling Systems 29%, Water Systems 27%, and Distribution 26%

•Operating income was a record at $39.9 million, compared to first quarter operating income in 2021 of $33.8 million, an increase of 18%

•GAAP fully diluted earnings per share (EPS) was $0.63, a new record for any first quarter

Fort Wayne, IN – April 26, 2022 – Franklin Electric Co. Inc. today announced first quarter financial results for fiscal year 2022.

First quarter 2022 sales were $451.5 million, compared to first quarter 2021 sales of $333.0 million.First quarter 2022 operating income was $39.9 million, compared to first quarter operating income in 2021 of $33.8 million.

First quarter 2022 GAAP fully diluted earnings per share was $0.63, versus GAAP fully diluted EPS in the first quarter 2021 of $0.59.

“Overall, the first quarter was a strong start to the year as we delivered another record first quarter for revenue, operating income and earnings per share.We maintained our momentum with continued strong demand across all our businesses.Our Distribution business posted year-over-year sales growth of 41 percent while our Water Systems and Fueling Systems businesses delivered sales growth of 38 and 28 percent, respectively with all business units benefitting from strong price and volume performance to drive profitable growth,” commented Gregg Sengstack, Franklin Electric’s Chairperson and Chief Executive Officer.

“We achieved record top line results on strong year-over-year organic and acquisition growth, while supply chain and inflationary challenges persisted during the first quarter constraining our margins, and our open order balance increased during the first quarter which is indicative of the current demand environment. Our team remains focused on managing these impacts while meeting our customers' needs, and we will remain agile in response to the evolving landscape,” concluded Mr. Sengstack.

Segment Summaries

Water Systems sales, a new record for any first quarter, were $272.6 million in the first quarter 2022, an increase of $75.0 million or 38 percent versus the first quarter 2021. Water Systems sales, excluding acquisitions and the impact of foreign currency translation, were up about 27 percent compared to the first quarter 2021.Sales of groundwater pumping, surface pumping and dewatering equipment increased due to strong end market demand.Water Systems operating income in the first quarter was $33.2 million driven by higher sales.First quarter 2021 Water Systems operating income was $31.3 million.

Distribution sales, a new record for any first quarter, were $134.9 million in the first quarter 2022. The Distribution segment organic sales increased 26 percent compared to the first quarter of 2021.Revenue growth was driven by solid demand primarily in the U.S. groundwater market due to strong price realization in addition to growth from acquisition. The Distribution segment operating income was $9.4 million in the first quarter of 2022 compared to first quarter 2021 operating income of $2.0 million.

Fueling Systems sales, a new record for any first quarter, were $72.5 million in the first quarter 2022, an increase of $15.7 million or 28 percent versus the first quarter 2021. Fueling Systems sales in the U.S. and Canada increased by about 33 percent compared to the first quarter 2021.Outside the U.S. and Canada, Fueling Systems revenues increased by about 2 percent, as sales increases of 4 percent in the rest of the world outside of China were offset by lower sales in China. Fueling Systems operating income in the first quarter was $17.7 million, compared to $14.9 million in the first quarter of 2021.

2022 Guidance

The Company is maintaining its full year 2022 sales to be in the range of $1.90 billion to $2.05 billion and full year 2022 earnings per share before restructuring expenses to be in the range from $3.50 to $3.75.

Earnings Conference Call

A conference call to review earnings and other developments in the business will commence at 9:00 am ET. The first quarter 2022 earnings call will be available via a live webcast. The webcast will be available in a listen only mode by going to:

https://edge.media-server.com/mmc/p/wuadmxpg

If you intend to ask questions during the call, please dial in using 877.643.7158 for domestic calls and 914.495.8565 for international calls. The conference ID is: 5883286.

A replay of the conference call will be available Tuesday, April 26, 2022, at 12:00 noon ET through noon ET on Tuesday, May 3, 2022, by dialing 855.859.2056 for domestic calls and 404.537.3406 for international calls. The replay passcode is: 5883286.

Forward Looking Statements

"Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein, including those relating to market conditions or the Company’s financial results, costs, expenses or expense reductions, profit margins, inventory levels, foreign currency translation rates, liquidity expectations, business goals and sales growth, involve risks and uncertainties, including but not limited to, risks and uncertainties with respect to general economic and currency conditions, various conditions specific to the Company’s business and industry, weather conditions, new housing starts, market demand, competitive factors, changes in distribution channels, supply constraints, effect of price increases, raw material costs, technology factors, integration of acquisitions, litigation, government and regulatory actions, the Company’s accounting policies, future trends, epidemics and pandemics, and other risks which are detailed in the Company’s Securities and Exchange Commission filings, included in Item 1A of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2021, Exhibit 99.1 attached thereto and in Item 1A of Part II of the Company’s Quarterly Reports on Form 10-Q. These risks and uncertainties may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements made herein are based on information currently available, and the Company assumes no obligation to update any forward-looking statements.

About Franklin Electric

Franklin Electric is a global leader in the production and marketing of systems and components for the movement of water and fuel. Recognized as a technical leader in its products and services, Franklin Electric serves customers around the world in residential, commercial, agricultural, industrial, municipal, and fueling applications.

Franklin Electric Contact:

Jeffery L. Taylor

Franklin Electric Co., Inc.

260-824-2900

Email:jeffery.taylor@fele.com

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
	First Quarter Ended
	March 31, 2022		March 31, 2021
Net sales	$	451,470	$	333,046
Cost of sales	306,136		217,500
Gross profit	145,334		115,546
Selling, general, and administrative expenses	104,673		81,603
Restructuring expense	720		152
Operating income	39,941		33,791
Interest expense	(1,494)		(1,090)
Other income/(expense), net	(378)		(100)
Foreign exchange income/(expense)	(585)		(57)
Income before income taxes	37,484		32,544
Income tax (benefit)/ expense	7,365		4,381
Net income	$	30,119	$	28,163
Less: Net (income)/loss attributable to noncontrolling interests	(354)		(283)
Net income attributable to Franklin Electric Co., Inc.	$	29,765	$	27,880
Income per share:
Basic	$	0.64	$	0.60
Diluted	$	0.63	$	0.59

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
	March 31, 2022		December 31, 2021
ASSETS
Cash and equivalents	$	38,581	$	40,536
Receivables (net)	229,736		196,173
Inventories	527,867		449,975
Other current assets	37,401		37,963
Total current assets	833,585		724,647
Property, plant, and equipment, net	214,190		210,654
Right-of-use asset, net	46,458		48,379
Goodwill and other assets	588,956		591,485
Total assets	$	1,683,189	$	1,575,165
LIABILITIES AND EQUITY
Accounts payable	$	190,488	$	164,758
Accrued expenses and other current liabilities	91,066		117,955
Current lease liability	15,188		15,320
Current maturities of long-term debt and short-term borrowings	194,846		97,981
Total current liabilities	491,588		396,014
Long-term debt	89,933		90,535
Long-term lease liability	31,140		32,937
Income taxes payable non-current	11,610		11,610
Deferred income taxes	29,828		28,162
Employee benefit plans	39,926		40,696
Other long-term liabilities	24,999		26,568
Redeemable noncontrolling interest	106		(19)
Total equity	964,059		948,662
Total liabilities and equity	$	1,683,189	$	1,575,165

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Three Months Ended
(In thousands)
	March 31, 2022		March 31, 2021
Cash flows from operating activities:
Net income	$	30,119	$	28,163
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	12,078		9,574
Non-cash lease expense	4,181		3,068
Share-based compensation	3,985		4,190
Other	2,473		359
Changes in assets and liabilities:
Receivables	(34,119)		(24,196)
Inventory	(74,690)		(14,327)
Accounts payable and accrued expenses	(2,753)		(298)
Operating leases	(4,181)		(3,068)
Other	1,596		1,917
Net cash flows from operating activities	(61,311)		5,382
Cash flows from investing activities:
Additions to property, plant, and equipment	(9,456)		(6,744)
Proceeds from sale of property, plant, and equipment	—		—
Acquisitions and investments	553		70
Other investing activities	—		3
Net cash flows from investing activities	(8,903)		(6,671)
Cash flows from financing activities:
Net change in debt	96,851		(457)
Proceeds from issuance of common stock	343		5,083
Purchases of common stock	(19,319)		(4,849)
Dividends paid	(9,130)		(8,143)
Net cash flows from financing activities	68,745		(8,366)
Effect of exchange rate changes on cash	(486)		(2,801)
Net change in cash and equivalents	(1,955)		(12,456)
Cash and equivalents at beginning of period	40,536		130,787
Cash and equivalents at end of period	$	38,581	$	118,331

Key Performance Indicators: Earnings Per Share Calculations

Earnings Before and After Restructuring	For the First Quarter
(in millions)	2022		2021		Change
Net Income attributable to FE Co., Inc. Reported	$	29.8	$	27.9	7	%
Allocated Earnings	$	(0.1)	$	(0.2)
Earnings for EPS Calculations	$	29.7	$	27.7	7	%
Restructuring (before tax):	$	0.7	$	0.2
Restructuring, net of tax:	$	0.6	$	0.1
Earnings Before Restructuring	$	30.3	$	27.8	9	%
Earnings Per Share	For the First Quarter
Before and After Restructuring	2022		2021		Change
(in millions except Earnings Per Share)
Average Fully Diluted Shares Outstanding	47.1		46.9		—	%
Fully Diluted Earnings Per Share (“EPS”) Reported	$	0.63	$	0.59	7	%
Restructuring Per Share, net of tax	$	0.01	$	—
Fully Diluted EPS Before Restructuring	$	0.64	$	0.59	8	%

Key Performance Indicators:NetSales Summary

	Net Sales
(in millions)	United States & Canada			Latin America			Europe, Middle East & Africa			Asia Pacific			Total Water			Fueling			Distribution			Other/Elims		Consolidated
Q1 2021	$	101.3		$	31.7		$	44.4		$	20.2		$	197.6		$	56.8		$	95.7		$	(17.1)	$	333.0
Q1 2022	$	163.2		$	37.9		$	51.0		$	20.5		$	272.6		$	72.5		$	134.9		$	(28.5)	$	451.5
Change	$	61.9		$	6.2		$	6.6		$	0.3		$	75.0		$	15.7		$	39.2		$	(11.4)	$	118.5
% Change	61		%	20		%	15		%	1		%	38		%	28		%	41		%			36		%
Foreign currency translation	$	—		$	(0.2)		$	(11.6)		$	(0.6)		$	(12.4)		$	(0.7)		$	—
% Change	—		%	(1)		%	(26)		%	(3)		%	(6)		%	(1)		%	—		%
Acquisitions	$	32.1		$	—		$	—		$	1.8		$	33.9		$	—		$	14.3
Volume/Price	$	29.8		$	6.4		$	18.2		$	(0.9)		$	53.5		$	16.4		$	24.9
% Change	29		%	20		%	41		%	(4)		%	27		%	29		%	26		%

Key Performance Indicators: Operating Income and Margin Summary

Operating Income and Margins
(in millions)	For the First Quarter 2022
	Water			Fueling			Distribution			Other/Elims		Consolidated
Operating Income/(Loss)	$	33.2		$	17.7		$	9.4		$	(20.4)	$	39.9
% Operating Income To Net Sales	12.2		%	24.4		%	7.0		%			8.8		%
Restructuring	$	0.6		$	—		$	0.1		$	—	$	0.7
Operating Income/(Loss) Before Restructuring	$	33.8		$	17.7		$	9.5		$	(20.4)	$	40.6
% Operating Income to Net Sales Before Restructuring	12.4		%	24.4		%	7.0		%			9.0		%
Operating Income and Margins
(in millions)	For the First Quarter 2021
	Water			Fueling			Distribution			Other/Elims		Consolidated
Operating Income/(Loss)	$	31.3		$	14.9		$	2.0		$	(14.4)	$	33.8
% Operating Income To Net Sales	15.8		%	26.2		%	2.1		%			10.2		%
Restructuring	$	0.1		$	—		$	0.1		$	—	$	0.2
Operating Income/(Loss) Before Restructuring	$	31.4		$	14.9		$	2.1		$	(14.4)	$	34.0
% Operating Income to Net Sales Before Restructuring	15.9		%	26.2		%	2.2		%			10.2		%

XML

Cover	Apr. 26, 2022
Cover [Abstract]
Document Type	8-K
Document Period End Date	Apr. 26, 2022
Entity Registrant Name	FRANKLIN ELECTRIC CO., INC.
Entity Incorporation, State or Country Code	IN
Entity File Number	0-362
Entity Tax Identification Number	35-0827455
Entity Address, Address Line One	9255 Coverdale Road
Entity Address, City or Town	Fort Wayne,
Entity Address, State or Province	IN
Entity Address, Postal Zip Code	46809
City Area Code	260
Local Phone Number	824-2900
Entity Information, Former Legal or Registered Name	Not Applicable
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.10 par value
Trading Symbol	FELE
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0000038725
Amendment Flag	false