10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________

FORM 10-Q

_________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number 0-362

FRANKLIN ELECTRIC CO., INC.

(Exact name of registrant as specified in its charter)

Indiana		35-0827455
(State or other jurisdiction of incorporation or organization)		(I.R.S. 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, former address and former fiscal year, if changed since last report)

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☒	Accelerated Filer	☐	Non-Accelerated Filer	☐	Smaller Reporting Company	☐
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

	Outstanding at
Class of Common Stock Par Value	July 26, 2023
$0.10	46,260,817 shares

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FRANKLIN ELECTRIC CO., INC.

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION	Number
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	4
	Condensed Consolidated Statements of Income for the Second Quarters and Six Months Ended June 30, 2023 and 2022 (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income/(Loss) for the Second Quarters and Six Months Ended June 30, 2023 and 2022 (Unaudited)	5
	Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022 (Unaudited)	8
	Notes to Condensed Consolidated Financial Statements (Unaudited)	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 6.	Exhibits	30
Signatures		31

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PART I - FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Second Quarter Ended				Six Months Ended
(In thousands, except per share amounts)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Net sales	$	569,181	$	551,138	$	1,053,732	$	1,002,608
Cost of sales	380,700		361,850		702,986		667,986
Gross profit	188,481		189,288		350,746		334,622
Selling, general, and administrative expenses	107,429		108,313		216,964		212,986
Restructuring (income)/expense	149		(7)		273		713
Operating income	80,903		80,982		133,509		120,923
Interest expense	(4,178)		(2,932)		(7,325)		(4,426)
Other income/(expense), net	1,179		(1,159)		1,588		(1,537)
Foreign exchange expense	(3,571)		(329)		(5,615)		(914)
Income before income taxes	74,333		76,562		122,157		114,046
Income tax expense	14,173		16,799		24,421		24,164
Net income	$	60,160	$	59,763	$	97,736	$	89,882
Less: Net income attributable to noncontrolling interests	(560)		(399)		(811)		(753)
Net income attributable to Franklin Electric Co., Inc.	$	59,600	$	59,364	$	96,925	$	89,129
Earnings per share:
Basic	$	1.29	$	1.27	$	2.09	$	1.91
Diluted	$	1.27	$	1.26	$	2.06	$	1.89

See Notes to Condensed Consolidated Financial Statements.

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FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

(Unaudited)

	Second Quarter Ended				Six Months Ended
(In thousands)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Net income	$	60,160	$	59,763	$	97,736	$	89,882
Other comprehensive income/(loss), before tax:
Foreign currency translation adjustments	4,495		(19,505)		10,989		(10,913)
Employee benefit plan activity	555		1,184		1,110		2,376
Other comprehensive income/(loss)	5,050		(18,321)		12,099		(8,537)
Income tax expense related to items of other comprehensive income/(loss)	(139)		(260)		(277)		(520)
Other comprehensive income/(loss), net of tax	4,911		(18,581)		11,822		(9,057)
Comprehensive income	65,071		41,182		109,558		80,825
Less: Comprehensive income attributable to noncontrolling interests	(573)		(312)		(847)		(628)
Comprehensive income attributable to Franklin Electric Co., Inc.	$	64,498	$	40,870	$	108,711	$	80,197

See Notes to Condensed Consolidated Financial Statements.

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FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share amounts)	June 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	53,227	$	45,790
Receivables, less allowances of $3,942 and $4,211, respectively	299,485		230,404
Inventories:
Raw material	194,336		196,876
Work-in-process	30,597		30,276
Finished goods	349,709		317,828
Total inventories	574,642		544,980
Other current assets	39,036		36,916
Total current assets	966,390		858,090
Property, plant, and equipment, at cost:
Land and buildings	165,670		159,253
Machinery and equipment	308,593		297,496
Furniture and fixtures	54,725		50,264
Other	56,334		50,249
Property, plant, and equipment, gross	585,322		557,262
Less: Allowance for depreciation	(360,858)		(342,108)
Property, plant, and equipment, net	224,464		215,154
Lease right-of-use assets, net	44,160		48,948
Deferred income taxes	7,140		6,778
Intangible assets, net	223,997		231,275
Goodwill	330,297		328,046
Other assets	6,633		5,910
Total assets	$	1,803,081	$	1,694,201

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	June 30, 2023		December 31, 2022
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	161,266	$	139,266
Accrued expenses and other current liabilities	95,079		120,555
Current lease liability	13,624		15,959
Income taxes	2,867		3,233
Current maturities of long-term debt and short-term borrowings	159,841		126,756
Total current liabilities	432,677		405,769
Long-term debt	88,680		89,271
Long-term lease liability	29,513		32,858
Income taxes payable non-current	4,837		8,707
Deferred income taxes	32,434		29,744
Employee benefit plans	32,628		31,889
Other long-term liabilities	31,910		25,209
Commitments and contingencies (see Note 15)
Redeemable noncontrolling interest	901		620
Shareholders' equity:
Common stock (65,000 shares authorized, $.10 par value) outstanding (46,257 and 46,193, respectively)	4,626		4,619
Additional capital	340,812		325,426
Retained earnings	1,020,883		969,261
Accumulated other comprehensive loss	(219,662)		(231,448)
Total shareholders' equity	1,146,659		1,067,858
Noncontrolling interest	2,842		2,276
Total equity	1,149,501		1,070,134
Total liabilities and equity	$	1,803,081	$	1,694,201

See Notes to Condensed Consolidated Financial Statements.

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FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended
(In thousands)	June 30, 2023		June 30, 2022
Cash flows from operating activities:
Net income	$	97,736	$	89,882
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	26,259		24,521
Non-cash lease expense	8,523		8,526
Share-based compensation	6,410		6,322
Deferred income taxes	1,924		2,004
Loss on disposals of plant and equipment	357		721
Foreign exchange expense	5,615		914
Changes in assets and liabilities, net of acquisitions:
Receivables	(70,725)		(93,063)
Inventory	(24,125)		(123,817)
Accounts payable and accrued expenses	(3,880)		29,969
Operating leases	(8,706)		(8,526)
Income taxes	(6,691)		(1,891)
Income taxes-U.S. Tax Cuts and Jobs Act	(2,902)		(355)
Employee benefit plans	831		826
Other, net	12,400		1,426
Net cash flows from operating activities	43,026		(62,541)
Cash flows from investing activities:
Additions to property, plant, and equipment	(20,241)		(20,084)
Proceeds from sale of property, plant, and equipment	—		6
Cash paid for acquisitions, net of cash acquired	(6,641)		(1,365)
Other, net	2		(8)
Net cash flows from investing activities	(26,880)		(21,451)
Cash flows from financing activities:
Proceeds from issuance of debt	294,650		341,810
Repayments of debt	(262,479)		(215,538)
Proceeds from issuance of common stock	9,010		1,916
Purchases of common stock	(25,541)		(30,644)
Dividends paid	(20,872)		(18,205)
Deferred payments for acquisitions	(186)		—
Net cash flows from financing activities	(5,418)		79,339
Effect of exchange rate changes on cash and cash equivalents	(3,291)		(2,658)
Net change in cash and cash equivalents	7,437		(7,311)
Cash and cash equivalents at beginning of period	45,790		40,536
Cash and cash equivalents at end of period	$	53,227	$	33,225

8

Non-cash items:
Additions to property, plant, and equipment, not yet paid	$	540	$	571
Right-of-Use Assets obtained in exchange for new operating lease liabilities	$	3,090	$	8,359
Payable to sellers of acquired entities	$	644	$	—
Non-cash investment to acquire property in lieu of cash payment for products provided	$	419	$	—

See Notes to Condensed Consolidated Financial Statements. 

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FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES

INDEX TO NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

		Page Number
Note 1.	Condensed Consolidated Financial Statements	11
Note 2.	Accounting Pronouncements	11
Note 3.	Acquisitions	11
Note 4.	Fair Value Measurements	11
Note 5.	Financial Instruments	12
Note 6.	Goodwill and Other Intangible Assets	13
Note 7.	Employee Benefit Plans	14
Note 8.	Accrued Expenses and Other Current Liabilities	14
Note 9.	Income Taxes	14
Note 10.	Debt	15
Note 11.	Earnings Per Share	15
Note 12.	Equity Roll Forward	17
Note 13.	Accumulated Other Comprehensive Income/(Loss)	19
Note 14.	Segment and Geographic Information	19
Note 15.	Commitments and Contingencies	21

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying condensed consolidated balance sheet as of December 31, 2022, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements as of June 30, 2023, and for the second quarters and six months ended June 30, 2023 and June 30, 2022 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 adjustments) considered necessary for a fair presentation of the financial position and the results of operations for the interim periods have been made. Operating results for the second quarter and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023. For further information, including a description of the critical accounting policies of Franklin Electric Co., Inc. (the "Company"), refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

2. ACCOUNTING PRONOUNCEMENTS

Adoption of New Accounting Standards

In October 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. ASU 2021-08 requires entities to recognize and measure contracts on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts. This will improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. ASU 2021-08 is effective for interim and annual periods beginning after December 15, 2022 with early adoption permitted. ASU 2021-08 should be applied on a prospective basis to business combinations that occur after the effective date. The Company adopted this ASU on January 1, 2023, and it did not have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. ASU 2022-04 creates the obligation for a company that uses a supplier finance program to purchase goods or services to disclose qualitative and quantitative information about its supplier finance program(s). This will allow financial statement users to better consider the effect of the program(s) on the entity's working capital, liquidity and cash flow over time. ASU 2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023 with early adoption permitted. ASU 2022-04 should be applied retrospectively to each period in which a balance sheet is presented except for the amendment on rollforward information, which should be applied prospectively. The Company adopted this ASU on January 1, 2023, and it did not have a material impact on the Company's consolidated financial position, results of operations, or cash flows as the Company has no current supplier finance programs.

3. ACQUISITIONS

2023

During the first quarter ended March 31, 2023, the Company acquired all of the assets of Phil-Good Products, Inc. ("Phil-Good"). Phil-Good is an injection molded plastics component manufacturer. In another separate transaction in the first quarter of 2023, the Company acquired 100 percent of the ownership interests of Hydropompe S.r.l. ("Hydropompe"). Hydropompe is a pump manufacturer with a focus in dewatering and sewage products. The combined, all-cash purchase price for both acquisitions in the first quarter of 2023 was $8.7 million after purchase price adjustments based on the level of working capital acquired. The fair value of the assets acquired and liabilities assumed for both acquisitions is preliminary as of June 30, 2023. In addition, the Company has not presented separate results of operations of the acquired companies since the closing of the acquisitions or combined pro forma financial information of the Company and the acquired interests since the beginning of 2022, as the results of operations for both acquisitions are immaterial.

Transaction costs were expensed as incurred under the guidance of FASB Accounting Standards Codification Topic 805, Business Combinations and were insignificant for all periods presented.

4. FAIR VALUE MEASUREMENTS

FASB ASC Topic 820, Fair Value Measurements and Disclosures, provides guidance for defining, measuring, and disclosing fair value within an established framework and hierarchy. Fair value is defined as the exchange price that would be received for

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an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standard established a fair value hierarchy which requires an entity to maximize the use of observable inputs and to minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value within the hierarchy are as follows:

Level 1 – Quoted prices for identical assets and liabilities in active markets;

Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

As of June 30, 2023 and December 31, 2022, the assets and liabilities measured at fair value on a recurring basis were as set forth in the table below:

(In millions)	June 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	11.7	$	11.7	$	—	$	—
Share swap transaction	0.9		0.9		—		—
Total assets	$	12.6	$	12.6	$	—	$	—
Liabilities:
Forward currency contracts	$	0.1	$	—	$	0.1	$	—
Total liabilities	$	0.1	$	—	$	0.1	$	—
	December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	7.9	$	7.9	$	—	$	—
Total assets	$	7.9	$	7.9	$	—	$	—
Liabilities:
Share swap transaction	$	0.1	$	0.1	$	—	$	—
Total liabilities	$	0.1	$	0.1	$	—	$	—

The Company’s Level 1 cash equivalents assets are generally comprised of foreign bank guaranteed certificates of deposit and short term deposits. The share swap transaction and forward currency contracts assets and liabilities are recorded within the "Receivables" and "Accounts Payable" lines of the condensed consolidated balance sheets and are further described in Note 5 - Financial Instruments.

Total debt, including current maturities, have carrying amounts of $248.5 million and $216.1 million and estimated fair values of $244.9 million and $213.2 million as of June 30, 2023 and December 31, 2022, respectively. 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 debt, the Company uses estimates based on rates currently available to the Company for debt with similar terms and remaining maturities. Accordingly, the fair value of debt is classified as Level 2 within the valuation hierarchy.

5. FINANCIAL INSTRUMENTS

The Company’s non-employee directors' deferred compensation stock program is subject to variable plan accounting and, accordingly, is adjusted for changes in the Company’s stock price at the end of each reporting period. The Company has entered into share swap transaction agreements (the "swap") to mitigate the Company’s exposure to the fluctuations in the Company's stock price. The swap has not been designated as a hedge for accounting purposes and is cancellable with 30 days' written

12

notice by either party. As of June 30, 2023 and December 31, 2022, respectively, the swap had a notional value based on 240,000 shares and 225,000 shares. For the second quarter and six months ended June 30, 2023, changes in the fair value of the swap resulted in a gain of $1.7 million and a gain of $4.7 million, respectively. For the second quarter and six months ended June 30, 2022, changes in the fair value of the swap resulted in a loss of $2.1 million and a loss of $4.6 million, respectively. Gains and losses resulting from the swap were largely offset by gains and losses on the fair value of the deferred compensation stock liability. All gains or losses and expenses related to the swap are recorded in the Company's condensed consolidated statements of income within the “Selling, general, and administrative expenses” line.

The Company is exposed to foreign currency exchange rate risk arising from transactions in the normal course of business including making sales and purchases of raw materials and finished goods in foreign denominated currencies with third party customers and suppliers as well as to wholly owned subsidiaries of the Company. To reduce its exposure to foreign currency exchange rate volatility, the Company enters into various forward currency contracts to offset these fluctuations. The Company uses forward currency contracts only in an attempt to limit underlying exposure from foreign currency exchange rate fluctuations and to minimize earnings volatility associated with foreign currency exchange rate fluctuations and has not elected to use hedge accounting. Decisions on whether to use such derivative instruments are primarily based on the amount of exposure to the currency involved and an assessment of the near-term market value for each currency. As of June 30, 2023 and December 31, 2022, respectively, the Company had a notional amount of $27.9 million and $10.3 million in forward currency contracts outstanding and the related fair value of those contracts was not material. For the second quarter and six months ended June 30, 2023, changes in the fair value of the forward currency contracts resulted in gains of $0.6 million and $1.6 million, respectively. For the second quarter and six months ended June 30, 2022, changes in the fair value of the forward currency contracts resulted in gains of $0.5 million and $0.3 million, respectively. These gains are recorded in the Company's condensed consolidated statements of income within the "Foreign exchange expense" line.

6. GOODWILL AND OTHER INTANGIBLE ASSETS

The carrying amounts of the Company’s intangible assets, excluding goodwill, are as follows:

(In millions)	June 30, 2023				December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Definite-lived intangibles:
Customer relationships	252.2		(108.8)		251.6		(101.5)
Patents	$	7.3	$	(7.3)	$	7.3	$	(7.3)
Technology	7.5		(7.4)		7.5		(7.4)
Trade names	41.7		(4.8)		$	41.8	(3.7)
Other	3.4		(2.8)		3.4		(2.7)
Total	$	312.1	$	(131.1)	$	311.6	$	(122.6)
Indefinite-lived intangibles:
Trade names	43.0		—		42.3		—
Total intangibles	$	355.1	$	(131.1)	$	353.9	$	(122.6)

Amortization expense related to intangible assets for the second quarters ended June 30, 2023 and June 30, 2022 was $4.3 million and $4.4 million, respectively, and for the six months ended June 30, 2023 and June 30, 2022 was $8.5 million and $8.7 million, respectively.

The change in the carrying amount of goodwill by reportable segment for the six months ended June 30, 2023 is as follows:

(In millions)
	Water Systems		Fueling Systems		Distribution		Consolidated
Balance as of December 31, 2022	$	211.9	$	70.3	$	45.8	$	328.0
Acquisitions	1.0		—		—		1.0
Foreign currency translation	1.1		0.2		—		1.3
Balance as of June 30, 2023	$	214.0	$	70.5	$	45.8	$	330.3

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7. EMPLOYEE BENEFIT PLANS

The following table sets forth the aggregated net periodic benefit cost for all pension plans for the second quarters and six months ended June 30, 2023 and June 30, 2022:

(In millions)	Pension Benefits
	Second Quarter Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Service cost	$	0.2	$	0.2	$	0.3	$	0.4
Interest cost	1.8		0.8		3.3		1.6
Expected return on assets	(1.8)		(1.5)		(3.6)		(3.0)
Amortization of:
Prior service cost	—		—		—		—
Actuarial loss	0.5		1.2		1.1		2.4
Settlement cost	—		—		—		—
Net periodic benefit cost	$	0.7	$	0.7	$	1.1	$	1.4

The following table sets forth the aggregated net periodic benefit cost for the other post-retirement benefit plan for the second quarters and six months ended June 30, 2023 and June 30, 2022:

(In millions)	Other Benefits
	Second Quarter Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Service cost	$	—	$	—	$	—	$	—
Interest cost	—		—		0.1		0.1
Expected return on assets	—		—		—		—
Amortization of:
Prior service cost	—		—		—		—
Actuarial loss	—		—		—		—
Settlement cost	—		—		—		—
Net periodic benefit cost	$	—	$	—	$	0.1	$	0.1

8. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of:

(In millions)	June 30, 2023	December 31, 2022
Salaries, wages, and commissions	40.3	57.9
Product warranty costs	10.7	11.2
Insurance	3.0	1.7
Employee benefits	8.9	13.5
Other	32.2	36.3
Total	95.1	120.6

9. INCOME TAXES

The Company’s effective tax rate for the six-month period ended June 30, 2023, was 20.0 percent as compared to 21.2 percent for the six-month period ended June 30, 2022. The effective tax rate differs from the U.S. statutory rate of 21 percent primarily due to the recognition of the U.S. foreign-derived intangible income (FDII) provisions, partially offset by state taxes, and certain discrete events including excess tax benefits from share-based compensation. For the second quarter of 2023, the effective tax rate was 19.1 percent compared to 21.9 percent for the second quarter of 2022.

The decrease in the effective tax rates for the second quarter and first six months of 2023 compared to the comparable periods in the prior year was a result of more favorable discrete events in 2023, primarily related to excess tax benefits from share-based compensation.

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10. DEBT

Debt consisted of the following:

(In millions)	June 30, 2023		December 31, 2022
New York Life Agreement	75.0		75.0
Credit Agreement	158.3		122.8
Tax increment financing debt	14.7		15.3
Foreign subsidiary debt	0.6		3.1
Other	—		—
Less: unamortized debt issuance costs	(0.1)		(0.1)
	$	248.5	$	216.1
Less: current maturities	(159.8)		(126.8)
Long-term debt	$	88.7	89.3

Credit Agreement

As of June 30, 2023, the Company had $158.3 million outstanding borrowings with a weighted-average interest rate of 5.9 percent, $3.6 million in letters of credit outstanding, and $188.1 million of available capacity under its credit agreement. As of December 31, 2022, the Company had $122.8 million outstanding borrowings with a weighted-average interest rate of 5.0 percent, $4.0 million in letters of credit outstanding, and $223.2 million of available capacity under its credit agreement.

The Company also has overdraft lines of credit for certain subsidiaries with various expiration dates. The aggregate maximum borrowing capacity of these overdraft lines of credits is $20.3 million. As of June 30, 2023, there were $0.1 million outstanding borrowings and $20.2 million of available capacity under these lines of credit. As of December 31, 2022, there were $22.0 million overdraft lines of credit with $2.7 million of outstanding borrowings and $19.3 million of available capacity under these lines of credit.

11. EARNINGS PER SHARE

The Company calculates basic and diluted earnings per common share using the two-class method. Under the two-class method, net earnings are allocated to each class of common stock and participating security as if all of the net earnings for the period had been distributed. The Company's participating securities consist of share-based payment awards that contain a non-forfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common shareholders.

Basic earnings per common share excludes dilution and is calculated by dividing net earnings allocable to common shares by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocated to common shares by the weighted-average number of common shares outstanding for the period, as adjusted for the potential dilutive effect of non-participating share-based awards.

15

The following table sets forth the computation of basic and diluted earnings per share:

	Second Quarter Ended				Six Months Ended
(In millions, except per share amounts)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Numerator:
Net income attributable to Franklin Electric Co., Inc.	$	59.6	$	59.4	$	96.9	$	89.1
Less: Earnings allocated to participating securities	0.2		0.2		0.3		0.4
Net income available to common shareholders	$	59.4	$	59.2	$	96.6	$	88.7
Denominator:
Basic weighted average common shares outstanding	46.2		46.3		46.2		46.4
Effect of dilutive securities:
Non-participating employee stock options, performance awards, and deferred shares to non-employee directors	0.7		0.6		0.7		0.7
Diluted weighted average common shares outstanding	46.9		46.9		46.9		47.1
Basic earnings per share	$	1.29	$	1.27	$	2.09	$	1.91
Diluted earnings per share	$	1.27	$	1.26	$	2.06	$	1.89

There were 0.1 million and 0.1 million stock options outstanding for the second quarters ended June 30, 2023 and June 30, 2022, and 0.1 million and 0.1 million stock options outstanding for the six months ended June 30, 2023 and June 30, 2022, respectively, that were excluded from the computation of diluted earnings per share, as their inclusion would be anti-dilutive.

16

12. EQUITY ROLL FORWARD

The schedules below set forth equity changes in the second quarters and six months ended June 30, 2023 and June 30, 2022:

(In thousands)	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
Balance as of March 31, 2023	$	4,614	$	332,263	$	980,114	$	(224,560)	$	2,537	$	1,094,968	$	633
Net income	—		—		59,600		—		292		59,892		268
Dividends on common stock ($0.225/share)	—		—		(10,432)		—		—		(10,432)		—
Common stock issued	15		6,057		—		—		—		6,072		—
Common stock repurchased	(9)		—		(8,399)		—		—		(8,408)		—
Share-based compensation	6		2,492		—		—		—		2,498		—
Currency translation adjustment	—		—		—		4,482		13		4,495		—
Pension and other post retirement plans, net of taxes	—		—		—		416		—		416		—
Balance as of June 30, 2023	$	4,626	$	340,812	$	1,020,883	$	(219,662)	$	2,842	$	1,149,501	$	901
(In thousands)	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
Balance as of March 31, 2022	$	4,635	$	314,935	$	861,156	$	(219,019)	$	2,352	$	964,059	$	106
Net income	—		—		59,364		—		229		59,593		170
Dividends on common stock ($0.195/share)	—		—		(9,076)		—		—		(9,076)		—
Common stock issued	3		1,570		—		—		—		1,573		—
Common stock repurchased	(15)		—		(11,309)		—		—		(11,324)		—
Share-based compensation	5		2,332		—		—		—		2,337		—
Currency translation adjustment	—		—		—		(19,418)		(95)		(19,513)		8
Pension and other post retirement plans, net of taxes	—		—		—		924		—		924		—
Balance as of June 30, 2022	$	4,628	$	318,837	$	900,135	$	(237,513)	$	2,486	$	988,573	$	284

17

(In thousands)	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
Balance as of December 31, 2022	$	4,619	$	325,426	$	969,261	$	(231,448)	$	2,276	$	1,070,134	$	620
Net Income	—		—		96,925		—		530		97,455		281
Dividends on common stock ($0.450/share)	—		—		(20,872)		—		—		(20,872)		—
Common stock issued	22		8,988		—		—		—		9,010		—
Common stock repurchased	(27)		—		(24,431)		—		—		(24,458)		—
Share-based compensation	12		6,398		—		—		—		6,410		—
Currency translation adjustment	—		—		—		10,953		36		10,989		—
Pension and other post retirement plans, net of taxes	—		—		—		833		—		833		—
Balance as of June 30, 2023	$	4,626	$	340,812	$	1,020,883	$	(219,662)	$	2,842	$	1,149,501	$	901
(In thousands)	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
Balance as of December 31, 2021	$	4,648	$	310,617	$	859,817	$	(228,581)	$	2,161	$	948,662	$	(19)
Net Income	—		—		89,129		—		464		89,593		289
Dividends on common stock ($0.390/share)	—		—		(18,205)		—		—		(18,205)		—
Common stock issued	4		1,912		—		—		—		1,916		—
Common stock repurchased	(38)		—		(30,606)		—		—		(30,644)		—
Share-based compensation	14		6,308		—		—		—		6,322		—
Currency translation adjustment	—		—		—		(10,788)		(139)		(10,927)		14
Pension and other post retirement plans, net of taxes	—		—		—		1,856		—		1,856		—
Balance as of June 30, 2022	$	4,628	$	318,837	$	900,135	$	(237,513)	$	2,486	$	988,573	$	284

18

13. ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

Changes in accumulated other comprehensive income/(loss) by component for the six months ended June 30, 2023 and June 30, 2022, are summarized below:

(In millions)	Foreign Currency Translation Adjustments		Pension and Post-Retirement Plan Benefit Adjustments (2)		Total
For the six months ended June 30, 2023:
Balance as of December 31, 2022	$	(191.3)	$	(40.1)	$	(231.4)
Other comprehensive income/(loss) before reclassifications	10.9		—		10.9
Amounts reclassified from accumulated other comprehensive income/(loss) (1)	—		0.8		0.8
Net other comprehensive income/(loss)	10.9		0.8		11.7
Balance as of June 30, 2023	$	(180.4)	$	(39.3)	$	(219.7)
For the six months ended June 30, 2022:
Balance as of December 31, 2021	$	(179.6)	$	(49.0)	$	(228.6)
Other comprehensive income/(loss) before reclassifications	(10.7)		—		(10.7)
Amounts reclassified from accumulated other comprehensive income/(loss) (1)	—		1.8		1.8
Net other comprehensive income/(loss)	(10.7)		1.8		(8.9)
Balance as of June 30, 2022	$	(190.3)	$	(47.2)	$	(237.5)

(1) This accumulated other comprehensive income/(loss) component is included in the computation of net periodic pension cost (refer to Note 7 for additional details) and is included in the "Other income/(expense), net" line of the Company's condensed consolidated statements of income.

(2) Net of tax expense of $0.3 million and $0.5 million for the six months ended June 30, 2023 and June 30, 2022, respectively.

Amounts related to noncontrolling interests were not material.

14. SEGMENT AND GEOGRAPHIC INFORMATION

The accounting policies of the operating segments are the same as those described in Note 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2022. Revenue is recognized based on the invoice price at the point in time when the customer obtains control of the product, which is typically upon shipment to the customer. The Water and Fueling segments include manufacturing operations and supply certain components and finished goods, both between segments and to the Distribution segment. The Company reports these product transfers between Water and Fueling as inventory transfers as a significant number of the Company's manufacturing facilities are shared across segments for scale and efficiency purposes. The Company reports intersegment transfers from Water to Distribution as intersegment revenue at market prices to properly reflect the commercial arrangement of vendor to customer that exists between the Water and Distribution segments.

Segment operating income is a key financial performance measure. Operating income by segment is based on net sales less identifiable operating expenses and allocations and includes profits recorded on sales to other segments of the Company. 

19

Financial information by reportable business segment is included in the following summary:

	Second Quarter Ended				Six Months Ended
(In millions)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
	Net sales
Water Systems
External sales
United States & Canada	$	176.8	$	158.4	$	336.2	$	293.1
Latin America	42.0		41.7		82.3		79.6
Europe, Middle East & Africa	54.6		49.7		105.0		100.7
Asia Pacific	22.2		24.2		41.0		44.7
Intersegment sales
United States & Canada	26.1		36.5		63.8		65.0
Total sales	321.7		310.5		628.3		583.1
Distribution
External sales
United States & Canada	193.1		191.1		336.1		326.0
Intersegment sales	—		—		—		—
Total sales	193.1		191.1		336.1		326.0
Fueling Systems
External sales
United States & Canada	60.4		64.2		114.4		116.0
All other	20.0		21.8		38.7		42.5
Intersegment sales	—		—		—		—
Total sales	80.4		86.0		153.1		158.5
Intersegment Eliminations/Other	(26.1)		(36.5)		(63.8)		(65.0)
Consolidated	$	569.1	$	551.1	$	1,053.7	$	1,002.6
	Second Quarter Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
	Operating income/(loss)
Water Systems	$	50.8	$	49.0	$	99.8	$	82.2
Distribution	17.8		23.3		22.5		32.7
Fueling Systems	26.7		26.1		47.5		43.8
Intersegment Eliminations/Other	(14.4)		(17.4)		(36.3)		(37.8)
Consolidated	$	80.9	$	81.0	$	133.5	$	120.9

	June 30, 2023		December 31, 2022
	Total assets
Water Systems	$	1,058.6	$	1,017.5
Distribution	412.4		360.4
Fueling Systems	276.6		269.1
Other	55.5		47.2
Consolidated	$	1,803.1	$	1,694.2

Other Assets are generally Corporate assets that are not allocated to the segments and are comprised primarily of cash and property, plant and equipment.

20

15. COMMITMENTS AND CONTINGENCIES

In 2011, the Company became aware of a review of alleged issues with certain underground piping connections installed in filling stations in France owned by the French Subsidiary of Exxon Mobile, Esso S.A.F. A French court ordered that a designated, subject-matter expert review 103 filling stations to determine what, if any, damages are present and the cause of those damages. The Company has participated in this investigation since 2011, along with several other third parties including equipment installers, engineering design firms who designed and provided specifications for the stations, and contract manufacturers of some of the installed equipment. In May 2022, the subject-matter expert issued its final report, which indicates that total damages incurred by Esso amounted to approximately 9.5 million Euro. It is the Company’s position that its products were not the cause of any alleged damage. The Company submitted its response to the expert's final report in February 2023. The Company cannot predict the ultimate outcome of this matter. Any exposure related to this matter is neither probable nor estimable at this time. If payments result from a resolution of this matter, depending on the amount, they could have a material effect on the Company’s financial position, results of operations, or cash flows.

The Company is defending other various claims and legal actions which have arisen in the ordinary course of business. In the opinion of management, based on current knowledge of the facts and after discussion with counsel, these claims and legal actions can be defended or resolved without a material effect on the Company’s financial position, results of operations, and net cash flows.

At June 30, 2023, the Company had $11.1 million of commitments primarily for capital expenditures and purchase of raw materials to be used in production.

The changes in the carrying amount of the warranty accrual, as recorded in the "Accrued expenses and other current liabilities" line of the Company's condensed consolidated balance sheet for the six months ended June 30, 2023, are as follows:

(In millions)
Balance as of December 31, 2022	$	11.2
Accruals related to product warranties	6.4
Reductions for payments made	(6.9)
Balance as of June 30, 2023	$	10.7

21

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Second Quarter 2023 vs. Second Quarter 2022

OVERVIEW

Net sales in the second quarter and first six months of 2023 increased 3 percent and 5 percent, respectively, from the prior-year periods. The sales increase was primarily due to price realization and volume, partially offset by the negative impact of foreign currency translation. The Company's consolidated gross profit was $188.5 million and $350.7 million, respectively, for the second quarter and first six months of 2023, a decrease of $0.8 million and an increase of $16.1 million, respectively, from the prior-year periods. Diluted earnings per share was $1.27 and $2.06, respectively, for the second quarter and first six months of 2023, increases of $0.01 and $0.17, respectively, from the prior-year periods.

RESULTS OF OPERATIONS

Net Sales

	Net Sales
(In millions)	Q2 2023		Q2 2022		2023 v 2022
Water Systems	$	321.7	$	310.5	$	11.2
Fueling Systems	80.4		86.0		(5.6)
Distribution	193.1		191.1		2.0
Eliminations/Other	(26.1)		(36.5)		10.4
Consolidated	$	569.1	$	551.1	$	18.0

	Net Sales
(In millions)	YTD June 30, 2023		YTD June 30, 2022		2023 v 2022
Water Systems	628.3		$	583.1	$	45.2
Fueling Systems	153.1		158.5		(5.4)
Distribution	336.1		326.0		10.1
Eliminations/Other	(63.8)		(65.0)		1.2
Consolidated	$	1,053.7	$	1,002.6	$	51.1

Net sales increased 3 percent in the second quarter and 5 percent in the first six months of 2023, as compared to the prior-year periods. Foreign currency unfavorably impacted net sales by 2 and 3 percentage points during the second quarter and first six months of 2023, respectively, compared to the prior-year periods, principally due to the strengthening of the U.S. Dollar relative to the Turkish Lira and Argentine Peso.

Net Sales-Water Systems

Water Systems net sales increased 4 percent in the second quarter and 8 percent in the first six months of 2023, as compared to the prior-year periods. This sales growth was primarily due to price and volume, which increased due to strong end market demand. Partially offsetting the increase, sales decreased 4 percent in the second quarter and 5 percent in the first six months of 2023 due to the negative impact from foreign exchange rates, as compared to prior-year periods. While net sales increased in 2023, Water Systems sales were negatively impacted by unfavorable weather conditions and customer inventories trending to more normalized levels.

Water Systems net sales in the U.S. and Canada increased 4 percent in the second quarter and 12 percent in the first six months of 2023, as compared to the prior-year periods. Sales decreased 1 percent in both the second quarter and first six months of 2023 due to the negative impact from foreign exchange rates, as compared to prior-year periods. In the second quarter of 2023, sales of large dewatering equipment increased 102 percent, sales of groundwater pumping equipment decreased 16 percent and sales of all other surface pumping equipment were flat compared to 2022. In the first half of 2023, sales of large dewatering equipment increased 120 percent, sales of groundwater pumping equipment decreased 5 percent and sales of all other surface pumping equipment increased 6 percent compared to 2022.

22

Water Systems net sales in markets outside the U.S. and Canada increased 3 percent in the second quarter and 1 percent in the first six months of 2023, as compared to the prior-year periods. Sales decreased 10 percent in the second quarter and 11 percent in the first six months of 2023 due to the negative impact from foreign exchange rates, as compared to prior-year periods. In both the second quarter and first half of 2023, outside the U.S. and Canada, excluding the impact of foreign currency translation, sales increases in EMEA and Latin America more than offset sales declines in the Asia Pacific markets.

Net Sales-Fueling Systems

Fueling Systems net sales decreased 7 percent in the second quarter and 3 percent in the first six months of 2023, as compared to the prior-year periods. This sales decline was primarily due to lower volumes. Sales decreased less than 1 percent in both the second quarter and first six months of 2023 due to the negative impact from foreign exchange rates, as compared to prior-year periods.

Fueling Systems net sales in the U.S. and Canada decreased 6 percent in the second quarter and 1 percent in the first six months of 2023, as compared to the prior-year periods. The decrease was primarily in dispensing and piping. Outside the U.S. and Canada, Fueling Systems sales decreased 8 percent in the second quarter and 9 percent in the first six months of 2023, as compared to the prior-year periods, due primarily to the divestiture of the above ground storage tank business in 2022 and lower sales in China.

Net Sales - Distribution

Distribution net sales increased 1 percent in the second quarter and 3 percent in the first six months of 2023, as compared to the prior-year periods. The Distribution segment sales growth was primarily due to price and volume. While net sales increased in 2023, Distribution sales were negatively impacted by unfavorable weather conditions, commodity pricing continuing to decline and customer inventories trending to more normalized levels.

Gross Profit and Expenses Ratios

	Three months ended June 30,
(In Millions)	2023		% of Net Sales		2022	% of Net Sales
Gross Profit	$	188.5	33.1	%	$189.3	34.3	%
Selling, General and Administrative Expense	107.4		18.9	%	108.3	19.7	%

	Six months ended June 30,
(In Millions)	2023		% of Net Sales		2022		% of Net Sales
Gross Profit	$	350.7	33.3	%	$	334.6	33.4	%
Selling, General and Administrative Expense	217.0		20.6	%	213.0		21.2	%

Gross Profit

The gross profit margin ratio was 33.1 percent and 33.3 percent in the second quarter and first six months of 2023, respectively, and 34.3 percent and 33.4 percent in the second quarter and first six months of 2022, respectively. The gross profit margin was negatively impacted in the second quarter and first six months of 2023 by wet weather across much of the United States and margin compression from unfavorable pricing of commodity-based products sold through the Distribution business.

Selling, General, and Administrative ("SG&A")

SG&A expenses were $107.4 million in the second quarter and $217.0 million in the first half of 2023 compared to $108.3 million in the second quarter and $213.0 million in the first half of 2022. SG&A expenses decreased in the second quarter of 2023 primarily due to lower advertising and marketing expenses. SG&A expenses increased in the first half of 2023 primarily due to higher compensation costs, partially offset by lower advertising and marketing expenses. The SG&A expenses ratio was 18.9 percent and 20.6 percent in the second quarter and first six months of 2023, respectively, and 19.7 percent and 21.2 percent in the second quarter and first six months of 2022, respectively.

Restructuring Expenses

Restructuring expenses were $0.1 million and $0.3 million in the second quarter and first six months of 2023, respectively, and nil and $0.7 million in the second quarter and first six months of 2022, respectively. Restructuring expenses were primarily from continued miscellaneous manufacturing realignment activities, branch closings and consolidations.

Operating Income

Operating income decreased less than 1 percent and increased 10 percent in the second quarter and first six months of 2023, as compared to the prior-year periods.

23

	Operating income (loss)
(In millions)	Q2 2023		Q2 2022		2023 v 2022
Water Systems	$	50.8	$	49.0	$	1.8
Fueling Systems	26.7		26.1		0.6
Distribution	17.8		23.3		(5.5)
Eliminations/Other	(14.4)		(17.4)		3.0
Consolidated	$	80.9	$	81.0	$	(0.1)

	Operating income (loss)
(In millions)	YTD June 30, 2023		YTD June 30, 2022		2023 v 2022
Water Systems	$	99.8	$	82.2	$	17.6
Fueling Systems	47.5		43.8		3.7
Distribution	22.5		32.7		(10.2)
Eliminations/Other	(36.3)		(37.8)		1.5
Consolidated	$	133.5	$	120.9	$	12.6

Operating Income-Water Systems

Water Systems operating income increased $1.8 million in the second quarter and $17.6 million in the first six months of 2023, as compared to the prior-year periods, primarily due to higher sales. The second quarter operating income margin was 15.8 percent, unchanged from the second quarter of 2022. The first six months of 2023 operating income margin was 15.9 percent, an increase of 180 basis points from 14.1 percent in the first six months of 2022. Operating income margin increased in the first half primarily due to price realization, cost management and operating leverage on higher sales.

Operating Income-Fueling Systems

Fueling Systems operating income increased $0.6 million in the second quarter and $3.7 million in the first six months of 2023, as compared to the prior-year periods, primarily due to a favorable product and geographic mix of net sales. The second quarter operating income margin was 33.2 percent, an increase of 290 basis points from 30.3 percent in the second quarter of 2022. The first six months of 2023 operating income margin was 31.0 percent, an increase of 340 basis points from 27.6 percent in the first six months of 2022. Operating income margin increased primarily due to price realization and a favorable product and geographic sales mix shift.

Operating Income-Distribution

Distribution operating income decreased $5.5 million in the second quarter and $10.2 million in the first six months of 2023, as compared to the prior-year periods. The second quarter operating income margin was 9.2 percent, a decrease of 300 basis points from 12.2 percent in the second quarter of 2022. The first six months of 2023 operating income margin was 6.7 percent, a decrease of 330 basis points from 10.0 percent in the first six months of 2022. Operating income and operating income margin decreased primarily due to wet weather across much of the United States, unfavorable pricing of commodity-based products sold through the business and inventory destocking.

Operating Income-Eliminations/Other

Operating income-Eliminations/Other is composed primarily of intersegment sales and profit eliminations and unallocated general and administrative expenses. The intersegment profit elimination impact in the second quarter and first six months of 2023 compared to the prior-year periods of 2022 was a favorable $4.0 million and $3.2 million, respectively. The intersegment elimination of operating income effectively defers the operating income on sales from Water Systems to Distribution in the consolidated financial results until such time as the transferred product is sold from the Distribution segment to its end third party customer. General and administrative expenses increased $1.0 million and $1.7 million, respectively, compared to the prior- year periods, in part due to higher compensation, software, professional fees and travel expenses.

Interest Expense

Interest expense was $4.2 million and $7.3 million in the second quarter and first six months of 2023, respectively, and $2.9 million and $4.4 million in the second quarter and first six months of 2022, respectively. The increases in the second quarter and first six months of 2023 were primarily driven by higher interest rates.

24

Other Income or Expense

Other (income) expense, net was a gain of $1.2 million and $1.6 million in the second quarter and first six months of 2023, respectively, and an expense of $1.2 million and $1.5 million in the second quarter and first six months of 2022, respectively.

Foreign Exchange

Foreign currency-based transactions produced an expense of $3.6 million and $5.6 million in the second quarter and first six months of 2023, respectively, and an expense of $0.3 million and $0.9 million in the second quarter and first six months of 2022, respectively. The expense in 2023 was primarily due to transaction losses associated with the Turkish Lira, Argentine and Mexican Peso relative to the U.S. dollar. The expense in 2022 was primarily due to transaction losses associated with the Argentine Peso and Turkish Lira. The Company reports the results of its subsidiaries in Argentina and Turkey using highly inflationary accounting, which requires that the functional currency of the entity be changed to the reporting currency of its parent.

Income Taxes

The provision for income taxes in the second quarter and first six months of 2023 was $14.2 million and $24.4 million, respectively, and $16.8 million and $24.2 million in the second quarter and first six months of 2022, respectively. The effective tax rate for the second quarter and first six months of 2023 was 19.1 percent and 20.0 percent, respectively, and 21.9 percent and 21.2 percent in the second quarter and first six months of 2022, respectively. The decrease in the effective tax rates for the second quarter and first six months of 2023 compared to the comparable periods in the prior year was a result of more favorable discrete events in 2023, primarily related to excess tax benefits from share-based compensation.

Net Income

Net income in the second quarter and first six months of 2023 was $60.2 million and $97.7 million, respectively, and $59.8 million and $89.9 million in the second quarter and first six months of 2022, respectively. Net income attributable to Franklin Electric Co., Inc. in the second quarter and first six months of 2023 was $59.6 million and $96.9 million, respectively, or $1.27 and $2.06 per diluted share. Net income attributable to Franklin Electric Co., Inc. in the second quarter and first six months of 2022 was $59.4 million and $89.1 million, respectively, or $1.26 and $1.89 per diluted share.

CAPITAL RESOURCES AND LIQUIDITY

Sources of Liquidity

The Company's primary sources of liquidity are cash on hand, cash flows from operations, revolving credit agreements, and long-term debt funds available. The Company believes its capital resources and liquidity position at June 30, 2023 is adequate to meet projected needs for the foreseeable future. The Company expects that ongoing requirements for operations, capital expenditures, pension obligations, dividends, share repurchases, and debt service will be adequately funded from cash on hand, operations, and existing credit agreements.

As of June 30, 2023, the Company had a $350.0 million revolving credit facility. The facility is scheduled to mature on May 13, 2026. As of June 30, 2023, the Company had $188.1 million borrowing capacity under its credit agreement as $3.6 million in letters of commercial and standby letters of credit were outstanding and undrawn and $158.3 million in revolver borrowings were drawn and outstanding, which were primarily used for funding working capital requirements.

In addition, the Company maintains an uncommitted and unsecured private shelf agreement with NYL Investors LLC, an affiliate of New York Life, and each of the undersigned holders of Notes (the "New York Life Agreement") with a remaining borrowing capacity of  $125.0 million as of June 30, 2023. The Company also has other long-term debt borrowings outstanding as of June 30, 2023. See Note 10 - Debt included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022, for additional information regarding these obligations and future maturities as well as Note 10 - Debt of this current quarterly report for changes to these agreements since December 31, 2022.

At June 30, 2023, the Company had $45.9 million of cash and cash equivalents held in foreign jurisdictions, which is intended to be used to fund foreign operations. There is currently no need or intent to repatriate the majority of these funds in order to meet domestic funding obligations or scheduled cash distributions.

Cash Flows

The following table summarizes significant sources and uses of cash and cash equivalents for the first six months of 2023 and 2022.

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(in millions)	2023		2022
Net cash flows from operating activities	$	43.0	$	(62.5)
Net cash flows from investing activities	(26.9)		(21.5)
Net cash flows from financing activities	(5.4)		79.3
Impact of exchange rates on cash and cash equivalents	(3.3)		(2.6)
Change in cash and cash equivalents	$	7.4	$	(7.3)

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Cash Flows from Operating Activities

2023 vs. 2022

Net cash provided by operating activities was $43.0 million for the six months ended June 30, 2023 compared to $62.5 million used by operating activities for the six months ended June 30, 2022. The change in operating cash flow was primarily due to decreased working capital requirements.

Cash Flows from Investing Activities

2023 vs. 2022

Net cash used in investing activities was $26.9 million for the six months ended June 30, 2023 compared to $21.5 million used in investing activities for the six months ended June 30, 2022. The increase in cash used in investing activities was attributable to increased acquisition activity in the first six months of 2023.

Cash Flows from Financing Activities

2023 vs. 2022

Net cash used by financing activities was $5.4 million for the six months ended June 30, 2023 compared to $79.3 million provided by financing activities for the six months ended June 30, 2022. The change in financing cash flow was primarily attributable to decreased borrowings under the Company's revolving credit facility.

FACTORS THAT MAY AFFECT FUTURE RESULTS

This quarterly report on Form 10-Q contains certain forward-looking information, such as statements about the Company’s financial goals, acquisition strategies, financial expectations including anticipated revenue or expense levels, business prospects, market positioning, product development, manufacturing re-alignment, capital expenditures, tax benefits and expenses, and the effect of contingencies or changes in accounting policies. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may increase,” “may fluctuate,” “plan,” “goal,” “target,” “strategy,” and similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could.” While the Company believes that the assumptions underlying such forward-looking statements are reasonable based on present conditions, forward-looking statements made by the Company involve risks and uncertainties and are not guarantees of future performance. Actual results may differ materially from those forward-looking statements as a result of various factors, including regional or general economic and currency conditions, various conditions specific to the Company’s business and industry, new housing starts, weather conditions, epidemics and pandemics, market demand, competitive factors, changes in distribution channels, supply constraints, effect of price increases, raw material costs and availability, technology factors, integration of acquisitions, litigation, government and regulatory actions, the Company’s accounting policies, and other risks, all as described in the Company's Securities and Exchange Commission filings, included in Part I, Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and in Exhibit 99.1 thereto. Any forward-looking statements included in this Form 10-Q are based upon information presently available. The Company does not assume any obligation to update any forward-looking information, except as required by law.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no significant changes in the Company's exposure to market risk during the second quarter ended June 30, 2023. For additional information, refer to Part II, Item 7A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report (the "Evaluation Date"), the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and the Company's Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rules 13a-15. Based upon that evaluation, the Company's Chief Executive Officer and the Company's Chief Financial Officer concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures were effective.

There have been no changes in the Company's internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15 under the Exchange Act during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect the Company's internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is defending various claims and legal actions which have arisen in the ordinary course of business. For a description of the Company's material legal proceedings, refer to Note 15 - Commitments and Contingencies, in the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, "Notes to Condensed Consolidated Financial Statements (Unaudited)," of this Quarterly Report on Form 10-Q, which is incorporated into this Item 1 by reference. In the opinion of management, based on current knowledge of the facts and after discussion with counsel, other claims and legal actions can be defended or resolved without a material effect on the Company’s financial position, results of operations, and net cash flows.

ITEM 1A. RISK FACTORS

There have been no material changes to the Company's risk factors as set forth in the annual report on Form 10-K for the fiscal year ended December 31, 2022. Additional risks and uncertainties, not presently known to the Company or currently deemed immaterial, could negatively impact the Company’s results of operations or financial condition in the future.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c) Issuer Repurchases of Equity Securities

In April 2007, the Company's Board of Directors approved a plan to increase the number of shares remaining for repurchase from 628,692 to 2,300,000 shares. There is no expiration date for this plan. On August 3, 2015, the Company's Board of Directors approved a plan to increase the number of shares remaining for repurchase by an additional 3,000,000 shares. The authorization was in addition to the 535,107 shares that remained available for repurchase as of July 31, 2015. In February 2023, the Company’s Board of Directors approved a plan to increase the number of shares remaining for repurchase by an additional 1,000,000 shares. The authorization was in addition to the 215,872 shares that remained available for repurchase as of February 16, 2023. The Company repurchased 9,480 shares for approximately $0.9 million under the plan during the second quarter of 2023. The maximum number of shares that may still be purchased under this plan as of June 30, 2023 is 1,116,392.

Period	Total Number of Shares Repurchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plan	Maximum Number of Shares that may yet to be Repurchased
April 1 - April 30	—	—	—	1,125,872
May 1 - May 31	8,941	90.88	8,941	1,116,931
June 1 - June 30	539	90.78	539	1,116,392
Total	9,480	90.88	9,480	1,116,392

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ITEM 6. EXHIBITS

Number Description

3.1	Amended and Restated Articles of Incorporation of Franklin Electric Co., Inc. (incorporated by reference to Exhibit 3.1 of the Company's Form 8-K filed on May 7, 2019)
3.2	Amended and Restated Bylaws of Franklin Electric Co., Inc., as amended January 27, 2020 (incorporated by reference to Exhibit 3.1 of the Company's Form 8-K filed on January 30, 2020)
10.1	Franklin Electric Co., Inc. Amended and Restated 2017 Stock Plan (incorporated by reference to Exhibit A to the Company's 2023 Proxy Statement for the Annual Meeting held on May 5, 2023)
10.2	Employment Security Agreement between the Company and Greg Levine (filed herewith)*
10.3	Form of Confidentiality and Non-Compete Agreement between the Company and Greg Levine (filed herewith)*
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	The following financial information from Franklin Electric Co., Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, formatted in Inline eXtensible Business Reporting Language (Inline XBRL): (i) Condensed Consolidated Statements of Income for the second quarter and six months ended June 30, 2023 and 2022 (ii) Condensed Consolidated Statements of Comprehensive Income/(Loss) for the second quarter and six months ended June 30, 2023 and 2022, (iii) Condensed Consolidated Balance Sheets as of June 30, 2023, and December 31, 2022, (iv) Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2023 and 2022, and (v) Notes to Condensed Consolidated Financial Statements (filed herewith)
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*Management Contract, Compensatory Plan or Arrangement

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SIGNATURES

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

		FRANKLIN ELECTRIC CO., INC.
		Registrant
Date: July 28, 2023	By	/s/ Gregg C. Sengstack
		Gregg C. Sengstack, Chairperson and Chief Executive Officer
		(Principal Executive Officer)
Date: July 28, 2023	By	/s/ Jeffery L. Taylor
		Jeffery L. Taylor, Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)

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EX-10.2

EXHIBIT 10.2

EMPLOYMENT SECURITY AGREEMENT

This Employment Security Agreement (“Agreement”), entered into as of the 5th day of July, 2023, by and between Franklin Electric Co., Inc., an Indiana corporation (“Franklin”), and Greg Levine (“Executive”).

WITNESSETH:

WHEREAS, Executive is currently employed by Franklin as the Vice President and President, Global Water Systems;

WHEREAS, Franklin desires to provide certain security to Executive in connection with Executive’s employment with Franklin; and

WHEREAS, Executive and Franklin desire to enter into this Agreement pertaining to the terms of the security Franklin is providing to Executive with respect to his employment.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

1.Definitions. For purposes of this Agreement:

a.“Affiliate” has the meaning set forth in Rule 12b-2 under the Securities Exchange Act of 1934.

b.“Base Salary” means Executive’s annual base salary at the rate in effect on the date of a Change in Control, or if greater, the rate in effect immediately prior to Executive’s termination of employment with Franklin.

c.“Change in Control” means the occurrence of any of the following events:

i.any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity (other than Franklin or a trustee or other fiduciary holding securities under an employee benefit plan of Franklin), or any syndicate or group deemed to be a person under Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is or becomes the "beneficial owner" (as defined in Rule 13d-3 of the General Rules and Regulations under the Exchange Act), directly or indirectly, of securities of Franklin representing 20% or more of the combined voting power of Franklin’s then outstanding securities entitled to vote generally in the election of directors;

ii.Franklin is party to a merger, consolidation, reorganization or other similar transaction with another corporation or other legal person unless, following such transaction, more than 50% of the combined voting power of the outstanding securities of the surviving, resulting or acquiring corporation or person or its parent entity entitled to vote generally in the election of directors (or persons performing similar functions) is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of Franklin’s outstanding securities entitled to vote generally in the election of directors immediately prior to such transaction, in substantially the same proportions as their ownership, immediately prior to such transaction, of Franklin’s outstanding securities entitled to vote generally in the election of directors;

iii.The stockholders of Franklin approve a plan of complete liquidation or dissolution of Franklin or Franklin sells all or substantially all of its business and/or assets to another corporation or other legal person unless, following such sale, more than 50% of the combined voting power of the outstanding securities of the acquiring corporation or person or its parent entity entitled to vote generally in the election of directors (or persons performing similar functions) is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of Franklin’s outstanding securities entitled to vote generally in the election of directors immediately prior to such sale, in substantially the same proportions as their ownership, immediately prior to such sale, of Franklin’s outstanding securities entitled to vote generally in the election of directors; or

iv.during any period of two consecutive years or less, individuals who at the beginning of such period constituted the Board of Directors of Franklin (and any new Directors, whose appointment or election by the Board of Directors or nomination for election by Franklin’s stockholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of the period or whose appointment, election or nomination for election was so approved) cease for any reason to constitute a majority of the Board of Directors.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur by virtue of any transaction in which Executive is a participant in a group effecting an acquisition of Franklin if Executive holds an equity interest in the entity acquiring Franklin at the time of such acquisition.

a.“Good Cause” means:

i.Executive’s intentional and material misappropriation of, or damage to, the property or business of Franklin;

ii.Executive’s conviction of a criminal violation involving fraud or dishonesty or of a felony that causes material harm or injury (whether financial or otherwise) to Franklin; or

iii.Executive’s willful and continuous failure to perform his obligations under the Agreement, provided that Franklin shall first give written notice to Executive describing such failure and, as long as it is capable of being cured and does not involve acts of material dishonesty directed against Franklin, Executive does not substantially cure or correct such failure within 30 days thereafter, or if such failure can not reasonably be cured within such period, cure is not commenced within such period and diligently pursued and fully cured within 60 days of Franklin’s original notice to Executive.

Notwithstanding anything herein to the contrary, in the event Franklin terminates the employment of Executive for Good Cause hereunder, Franklin shall give Executive at least 30 days prior written notice specifying in detail the reason or reasons for Executive’s termination.

a.“Good Reason” means:

i.a material reduction in Executive’s salary or retirement benefits or a material reduction in Executive’s compensation and benefits in the aggregate, excluding, in the case of incentive benefits that are based upon the performance of Executive or Franklin, reductions in benefits resulting from diminished performance by Executive or Franklin;

ii.any purchaser (or affiliate thereof) who purchases substantially all of the assets of Franklin shall decline to assume all of Franklin’s obligations under this Agreement; or

iii.the relocation of the Executive’s principal place of employment by more than 50 miles.

a.“Severance Period” means the period beginning on the date Executive’s employment with Franklin terminates under circumstances described in Section 2 and ending on the date 24 months thereafter.

b.“Target Bonus” means the amount that would be payable to Executive under the Executive Officer Annual Incentive Cash Bonus Program or any successor plan thereto for the year in which Executive’s employment with Franklin terminates, assuming attainment of the target performance goals at 100% level and employment of Executive at the end of such year (such amount to be determined regardless of whether Executive would otherwise be eligible for a bonus under the terms of any such plan or the extent to which the performance goals are actually met).

2.Termination of Employment. If within two years after a Change in Control, (a) Franklin terminates Executive’s employment for any reason other than Good Cause, or (b) Executive terminates his employment with Franklin for Good Reason, Franklin shall make the payments and provide the benefits described in Section 3 below.

3.Benefits Upon Termination of Employment. Upon termination of Executive’s employment with Franklin under circumstances described in Section 2 above:

a.Within 30 days following the date of such termination, Franklin shall pay Executive a lump sum cash payment equal to the sum of (i), (ii) and (iii) below:

i. unpaid Base Salary earned by Executive through the date of termination (which shall include payment for all accrued but unused vacation pay);

ii.two times Executive’s Base Salary; and

iii.an amount equal to the sum of (A) a prorata portion of Executive’s Target Bonus (based on the date on which such termination of employment occurs), and (B) two times Executive’s Target Bonus.

b.Franklin shall pay Executive a lump sum payment (calculated based on his age as of his termination of employment) within 30 days following his termination of employment of an amount equal to the increase in benefits under all tax-qualified and supplemental retirement plans maintained by Franklin in which Executive participates at termination of employment that results from crediting Executive with an additional 24 months of service for all purposes (including determining service and age for early retirement factors, if applicable) under such plans, and deeming Executive to be an employee of Franklin during the Severance Period. The amounts attributable to additional benefits under any such plan shall be based on Executive’s compensation level as of his termination of employment. The amounts attributable to additional benefits under any retirement plan that is a defined contribution plan shall include the additional Franklin contributions that would have been made or credited on Executive’s behalf had he authorized the same elective contributions he had elected for the year in which the termination of employment occurs, and shall include earnings that would have accrued under the applicable plan during the Severance Period (the earnings will be determined by multiplying the aggregate contributions to each such plan by the weighted average of the rate of return of the actual investment alternatives elected by Executive as of the beginning of the 12-month period ending on the employment termination date). Benefits accrued under such plans prior to Executive’s termination of employment shall be paid in accordance with the terms of such plans. Notwithstanding the foregoing, the payment under this Section 3(b) shall be offset by the lump sum value of the amounts of additional benefits paid or payable in accordance with the terms of such plans as a result of the occurrence of a Change in Control but not below zero.

c.If Executive holds any stock-based awards as of the date of his termination of employment, (i) all such awards that are stock options shall immediately become exercisable on such date and shall be exercisable for 12 months following such termination of employment, or if earlier, until the expiration of the term of the stock option; (ii) all restrictions on any awards of restricted stock or restricted stock units shall terminate or lapse; and (iii) all performance goals applicable to any performance-based awards shall be deemed satisfied at the target performance level, and in each case settlement of such awards shall be made to Executive within 30 days of Executive’s termination. To the extent any of the foregoing is not permissible under the terms of any plan pursuant to which the awards were granted, Franklin shall pay to Executive, in a lump sum within 30 days after termination of Executive’s employment, an amount as follows: (A) to the extent the acceleration of the exercise of such stock options is not permissible, an amount equal to the excess, if any, of the aggregate fair market value of the stock subject to such options, determined on the date of Executive’s termination of employment, over the aggregate exercise price of such stock options; (B) to the extent the termination or lapse of restrictions on restricted stock or restricted stock units is not permissible, an amount equal to the aggregate fair market value of the stock subject to the restrictions (determined without regard to such restrictions); and (C) to the extent performance awards are limited, an amount equal to the aggregate fair market value of the additional shares that were not awarded. Executive shall surrender all outstanding awards for which payment pursuant to the preceding sentence is made.

d.During the Severance Period, Executive and his spouse and eligible dependents shall continue to be covered by all employee benefit plans of Franklin providing health, prescription drug, dental, vision, disability and life insurance in which he or his spouse or eligible dependents were participating immediately prior to the date of his termination of employment, as if he continued to be an active employee of Franklin, and Franklin shall continue to pay the costs of such coverage under such plans on the same basis as is applicable to active employees covered thereunder; provided that, if participation in any one or more of such plans is not possible under the terms thereof, Franklin shall provide substantially identical benefits. The date of Executive’s termination of employment shall be considered a “qualifying event” as such term is defined in Title I, Part 6 of the Employee Retirement Income Security Act of 1974 (“COBRA”), and any continued coverage by Executive, his spouse or eligible dependents under Franklin’s group health plan after Executive’s termination of employment shall be considered COBRA coverage.

e.During the Severance Period, Executive will receive 12 months of executive outplacement services (not to exceed $50,000) with a professional outplacement firm selected by Franklin.

f.If at the time of Executive’s termination of employment for reasons other than death he is a “Key Employee” as determined in accordance with the procedures set forth in Treas. Reg. §1.409A-1(i), any amounts payable to Executive pursuant to this Agreement that are subject to Section 409A of the Internal Revenue Code shall not be paid or commence to be paid until six months following Executive’s termination of employment, or if earlier, Executive’s subsequent death, with the first payment to include the payments that otherwise would have been made during such period and including interest accruing thereon from the first day of the month following the date of such termination of employment until the date of payment, based on the applicable interest rate as defined in Section 417(e)(3) of the Internal Revenue Code. Each payment made pursuant to Section 3 shall be considered a separate payment for purposes of Section 409A.

4.Release of Claims.Payment by Franklin of the termination benefits provided in Section 3 hereof shall be conditioned on Executive’s execution, and nonrevocation, of a release of claims. Payment of such termination benefits shall be delayed until the expiration of the revocation period applicable to the executed release of claims, provided that if Executive does not execute the release of claims within 60 days of the date of termination of employment, the termination benefits

described in Section shall be forfeited and Executive shall be entitled to receive only the benefits to which he is otherwise entitled under applicable law.

5.Death. If Executive dies during the Severance Period, all amounts payable hereunder to Executive, to the extent not paid, shall be paid, within 30 days of the date of Executive’s death, to his surviving spouse or his designated beneficiary, or if none, then to his estate. Executive’s surviving spouse and eligible dependents shall continue to be covered under plans described in Section 3(d) during the remainder of the Severance Period. On the death of the surviving spouse and eligible dependents, no further coverage under such plans shall be provided (other than any coverage required pursuant to COBRA).

6.Excise Tax.

a.If in connection with the Change in Control or other event Executive would be or is subject to an excise tax under Section 4999 of the Internal Revenue Code (an “Excise Tax”) with respect to any cash, benefits or other property received, or any acceleration of vesting of any benefit or award (the “Change in Control Benefits”), Executive may elect to have the Change in Control Benefits otherwise payable under this Agreement reduced to the largest amount payable without resulting in the imposition of such Excise Tax. Within 15 days after the occurrence of the event that triggers the Excise Tax, a nationally recognized accounting firm selected by Franklin shall make a determination as to whether any Excise Tax would be reported with respect to the Change in Control Benefits and, if so, the amount of the Excise Tax, the total net after-tax amount of the Change in Control Benefits (after taking into account federal, state and local income and employment taxes and the Excise Tax) and the amount of reduction to the Change in Control Benefits necessary to avoid such Excise Tax. Any reduction to the Change in Control Benefits shall first be made from any cash benefits payable pursuant to this Agreement, if any, and thereafter, as determined by Executive, and Franklin shall provide Executive with such information as is necessary to make such determination. Franklin shall be responsible for all fees and expenses connected with the determinations by the accounting firm pursuant to this paragraph 6.

b.Executive agrees to notify Franklin in the event of any audit or other proceeding by the IRS or any taxing authority in which the IRS or other taxing authority asserts that any Excise Tax should be assessed against Executive and to cooperate with Franklin in contesting any such proposed assessment with respect to such Excise Tax (a “Proposed Assessment”). Executive agrees not to settle any Proposed Assessment without the consent of Franklin. If Franklin does not consent to allow Executive to settle the Proposed Assessment, within 30 days following such demand therefor, Franklin shall indemnify and hold harmless Executive with respect to any additional taxes, interest and/or penalties that Executive is required to pay by reason of the delay in finally resolving Executive’s tax liability (such indemnification to be made as soon as practicable, but in no event later than the end of the calendar year following the calendar year in which Executive makes such remittance).

7.Indemnification. Franklin shall indemnify, protect, defend and hold harmless Executive from and against all liabilities, costs and expenses (including but not limited to attorneys’ fees) incurred as a result of Executive’s employment with Franklin to the fullest extent permitted by the Indiana Business Corporation Law.

8.Litigation Expenses. Franklin shall reimburse Executive all out-of-pocket expenses, including attorneys’ fees, incurred by Executive in connection with any enforcement, claim or legal action or proceeding involving this Agreement, whether brought by Executive or by or on behalf of Franklin or by another party. Such reimbursement shall be made within 30 days of Executive’s submission of an invoice following resolution of the claim. Franklin shall pay prejudgment interest on any money judgment obtained by Executive, calculated at the published prime interest rate charged by Franklin’s principal banking connection from the date that payment(s) to him should have been made under this Agreement.

9.Post-Termination Payment Obligations. Subject to Section 4,Franklin's obligation to pay Executive the compensation and to make the other arrangements provided herein to be paid and made after termination of Executive's employment with Franklin shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right that Franklin may have against him or anyone else. All amounts so payable by Franklin shall be paid without notice or demand. Each and every such payment made by Franklin shall be final and Franklin will not seek to recover all or any part of such payment from Executive or from whomsoever may be entitled thereto, for any reason whatsoever.

10.Disclosure Of Confidential Information. Without the consent of Franklin, Executive shall not at any time divulge, furnish or make accessible to anyone (other than in the regular course of business of Franklin) any knowledge or information with respect to confidential or secret processes, inventions, formulae, machinery, plan, devices or materials of Franklin or with respect to any confidential or secret engineering development or research work of Franklin or with respect to any other confidential or secret aspect of the business of Franklin. Executive recognizes that irreparable injury will result to Franklin and its business and properties, in the event of any breach by Executive of any of the provisions of this Section 10. In the event of any breach of any of the commitments of Executive pursuant to this Section 10, Franklin shall be entitled, in

addition to any other remedies and damages available, to injunctive relief to restrain the violation of such commitments by Executive or by any person or persons acting for or with Executive in any capacity whatsoever.

11.Solicitation Of Employees. During Executive’s employment with Franklin and for a period of 18 months after termination of employment, Executive shall not (a) directly or indirectly, employ or retain or solicit for employment or arrange to have any other person, firm or other entity employ or retain or solicit for employment or otherwise participate in the employment or retention of any person who is an employee of Franklin or (b) encourage or solicit any such employee to leave the service of Franklin. Executive also acknowledges and agrees that he shall comply with the terms of the Confidentiality and Non-Compete Agreement in effect between him and Franklin. Executive and Franklin agree that of the amount paid to Executive pursuant to Section 3 of this Agreement, a portion equal to one times Executive’s Base Salary and one times the Target Bonus paid or payable to Executive pursuant to subparagraph 3(c) shall serve as adequate consideration for the restrictive covenants set forth in this Section 11.

12.Executive Assignment. No interest of Executive or his spouse or any other beneficiary under this Agreement, or any right to receive any payment or distribution hereunder, shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind, nor may such interest or right to receive a payment or distribution be taken, voluntarily or involuntarily, for the satisfaction of the obligations or debts of, or other claims against, Executive or his spouse or other beneficiary, by operation of law or otherwise, other than pursuant to the terms of a qualified domestic relations order to which Executive is a party.

13.Reimbursements or In-Kind Benefits. Reimbursements or in-kind benefits provided under this Agreement that are subject to Section 409A of the Internal Revenue Code of 1986, as amended, are subject to the following restrictions: (a) the amount of expenses eligible for reimbursements, or in-kind benefits provided, to Executive during a calendar year shall not affect the expenses eligible for reimbursement or the in-kind benefits provided in any other calendar year, and (b) reimbursement of an eligible expense shall be made as soon as practicable, but in no event later than the last day of the calendar year following the calendar year in which the expense was incurred.

14.Waiver, Modification. No provisions of this Agreement may be waived, modified or discharged unless such waiver, modification or discharge is agreed to in a writing signed by Executive and Franklin. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or at any prior or subsequent time.

15.Applicable Law. This Agreement shall be construed and interpreted pursuant to the laws of Indiana.

16.Entire Agreement. This Agreement contains the entire Agreement between Franklin and Executive and supersedes any and all previous agreements, written or oral, between the parties relating to severance benefits, including any previous employment agreement or employment security agreement between Executive and Franklin. No amendment or modification of the terms of this Agreement shall be binding upon the parties hereto unless reduced to writing and signed by Franklin and Executive.

17.Severability. If any provision of this Agreement or the application thereof is held invalid, such invalidity shall not affect other provisions or applications of this Agreement that can be given effect without the invalid provision or application and, to such end, the provisions of this Agreement are declared to be severable.

18.No Employment Contract. Nothing contained in this Agreement shall be construed to be an employment contract between Executive and Franklin. Executive is employed at will and Franklin may terminate his employment at any time, with or without cause.

19.Employment with an Affiliate. If Executive is employed by Franklin and an Affiliate, or solely by an Affiliate, on the date of termination of employment of Executive under circumstances described in Section 2, then (a) employment or termination of employment as used in this Agreement shall mean employment or termination of employment of Executive with Franklin and such Affiliate, or with such Affiliate, as applicable, and related references to Franklin shall also include Affiliate, as applicable, and (b) the obligations of Franklin hereunder shall be satisfied by Franklin and/or such Affiliate as Franklin, in its discretion, shall determine; provided that Franklin shall remain liable for such obligations to the extent not satisfied by such Affiliate.

20.Successors. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, representatives and successors. Any reference in this Agreement to Franklin shall be deemed a reference to any successor (whether direct or indirect, by purchase of stock or assets, merger or consolidation or otherwise) to all or substantially all of the business and/or assets of Franklin; provided that Executive’s employment by a successor shall not be deemed a termination of Executive’s employment with Franklin.

21.Withholding. Franklin may withhold from any payment that it is required to make under this Agreement amounts sufficient to satisfy applicable withholding requirements under any federal, state, or local law.

22.Headings. The headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of any provision of this Agreement.

23.Notice. Notices given pursuant to this Agreement shall be in writing and shall be deemed given when received or, if mailed, two days after mailing by United States registered or certified mail, return receipt requested, postage prepaid and addressed as herein provided. Notice to Franklin shall be addressed to Corporate Secretary, Franklin Electric Co., Inc. at 9255 Coverdale Road, Fort Wayne, Indiana 46809. Notices to Executive shall be addressed to Executive at his last permanent address as shown on Franklin's records. Notwithstanding the foregoing, if either party shall designate a different address by notice to the other party given in the foregoing manner, then notices to such party shall be addressed as designated until the designation is revoked by further notice given in such manner.

24.Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.

IN WITNESS WHEREOF, the parties have executed this Employment Security Agreement as of the day and year written above.

FRANKLIN ELECTRIC CO., INC.

/s/ Brian Cromwell

Brian Cromwell

VP, Human Resources

EXECUTIVE

/s/ Greg Levine

Greg Levine

EX-10.3

EXHIBIT 10.3

CONFIDENTIALITY AND NON-COMPETE AGREEMENT

In consideration of my employment or continued employment with Franklin Electric Co., Inc. (“Employer”), my access to Employer’s customer relationships and confidential information, and other good and valuable consideration, the receipt and sufficiency of which consideration are hereby acknowledged, I agree on this 5th day of July, in the year 2023 as follows:

CONFIDENTIALITY

1.

I acknowledge that Employer has certain non-public confidential information, including (a) technical information, such as drawings, specifications, design tolerances, manufacturing methods and processes, as well as research and development efforts, results and plans, and (b) client information, such as client contact information, contract terms, client listings, files, purchase history, needs and preferences; (c) financial information, such as sales plans and forecasts, sales and earnings figures, profitability information, and pricing; (d) corporate strategies, new product, marketing and other strategic plans; and (e) personnel files and information (“Confidential Information”). I understand that my employment with Employer places me in a position of trust and confidence, and in the course of my employment with Employer and because of the nature of my responsibilities, I have received and will receive access to Employer’s Confidential Information, which I recognize and agree is highly sensitive and valuable, and is the exclusive property of Employer.

2.

During my employment with Employer and thereafter, I will maintain all Confidential Information that comes into my possession as confidential and as the exclusive property of Employer, and such Confidential Information shall not be disclosed by me nor used by me in any way, except as required by my duties to, and for the benefit of, Employer. I will not remove any Confidential Information from Employer’s premises except as my duties shall require and as authorized by Employer.

3.

Upon any termination of my employment, I will immediately turn over all of the following to my supervisor, and I shall retain no copies thereof: all documents and files (whether paper, digital, electronic or otherwise) that were supplied to me by Employer, or that were received, obtained or created by me pursuant to my duties for Employer, including all drawings, designs, specifications, and manuals; keys and key cards; computer equipment and software; computer printouts and databases; and any other materials supplied to me by Employer or purchased with Employer’s funds, and all copies (whether copied onto paper, electronic, digital, tape, or other media) thereof.

4.

I acknowledge that I have been instructed not to bring to Employer’s premises or to use, and I agree not to bring or to use, whatever confidential information I might have regarding previous employers. I have been informed about the nature of my employment with Employer, and I warrant and represent that I can fulfill my job duties for Employer without using or disclosing whatever confidential information I might have relating to previous employers.

5.

A. Activity Covenant: For a period of eighteen (18) months after I cease to be employed by Employer for any reason other than termination due to a layoff or work force reduction, I will not directly or indirectly engage in, or assist any other person or entity to engage in, any Restricted Activity. “Restricted Activity” as used herein means: (i) the design, development, manufacture, assembly, or distribution of electrical submersible motors and electrical submersible motor controls, and water; pump filtration or treatment technologies that are designed, manufactured, sold, or are offered or intended for sale, within or to the Restricted Area in competition with those designed, developed, manufactured, assembled, distributed, marketed or sold by Employer and the(ii) solicitation, encouragement, or inducement (or assisting anyone else to solicit, encourage, or induce) any agent, vendor, supplier or independent contractor to terminate, reduce or curtail their business or relationship with Employer. “Restricted Area” means the United States and the European Union.

B. Customer-Based Restriction: For a period of eighteen (18) months after I cease for any reason other than termination due to a layoff or work force reduction, to be an employee of Employer, I will not, directly or indirectly, solicit (or assist in the solicitation of) orders for Competitive Products from, or provide any Competitive Product to, any Customer or Potential Customer of Employer. “Customer” means only those customers of Employer with whom Employer actually did business, and with whom I had contact or about whom I had access to confidential information, during the last year of my employment. “Potential Customer” shall mean any person or entity to which Employer provided a proposal or bid during the last year of my employment with which I had involvement or about which I had access to confidential information.

C. Non-Compete Covenant: For a period of eighteen (18) months after I cease to be employed by employer for any reason other than termination due to a layoff or work force reduction, I will not directly or indirectly, within the Restricted Area, become employed by, work for, or otherwise provide services to, any Competitor in any capacity that relates to the design, development, manufacture, assembly, distribution, marketing or sale of Competitive Products. “Competitive Products” means electrical submersible motors and electrical submersible motor controls and water pumping systems, water filtration or water treatment technologies. “Competitor” means any person or entity that designs, develops, manufactures, assembles, distributes, markets or sells Competitive Products or components in competition with Employer, including but not limited to Pentair, Xylem, Grundfos, Clack, Kinetico, AO Smith, Culligan, and Hitachi.

D. Non-Hire Agreement: For a period of eighteen (18) months after I cease for any reason to be an employee of Employer, I will not, directly or indirectly, (a) hire, interview for employment, offer employment to, or employ any Restricted Employee, or assist anyone else to do so, or (b) solicit, advise, encourage or induce (or assist in the solicitation, advising, encouragement or inducement of) any Restricted Employee to terminate his or her employment with Employer or

suggest that s/he do so. “Restricted Employee” means any person who was employed by Employer within the last three (3) months of my employment with Employer, and with whom I had contact or for whom I had direct or indirect supervisory responsibility during my employment with Employer.

OTHER AGREEMENTS

6.

In addition to any damages awarded by any court and all other remedies otherwise available at law or in equity, Employer shall be entitled to injunctions, both preliminary and final, enjoining and restraining any breach or threatened or intended breach of paragraphs 2, 3 and 4, and I hereby consent to the issuance thereof without Employer being required to post any bond. In the event that Employer shall successfully enforce any part of this Agreement through legal proceedings, I agree to pay to Employer all costs and attorneys’ fees reasonably incurred by it in that endeavor. In the event that I am found to have breached any covenant in this agreement, the time period provided for in that covenant shall be deemed tolled (i.e., it will not run) for so long as I am in violation of that covenant.

7.

I understand and agree that this Agreement is not a guarantee of continued employment for any period. My employment is at will. This means I am free to terminate my employment at any time, for any reason, and that Employer retains the same rights. I understand and agree that this Agreement is assignable by Employer and is enforceable by Employer’s successors and assigns.

8.

This Agreement shall be construed and applied under Indiana law. If any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid or unenforceable in any respect, this Agreement shall be construed as if such provision had never been contained herein, and the remainder of this Agreement shall be enforceable and binding upon the parties. If any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad (for example as to temporal scope), it shall be construed and limited so as to be compatible with the applicable law as it then shall appear.

FRANKLIN ELECTRIC CO., INC.

/s/ Brian Cromwell

Brian Cromwell

VP, Human Resources

EXECUTIVE

/s/ Greg Levine

Greg Levine

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gregg C. Sengstack, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Franklin Electric Co., Inc., for the second quarter ending June 30, 2023;

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 (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’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 the 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 the 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:	July 28, 2023
	/s/ Gregg C. Sengstack
	Gregg C. Sengstack
	Chairperson and Chief Executive Officer
	Franklin Electric Co., Inc.

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeffery L. Taylor, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Franklin Electric Co., Inc., for the second quarter ending June 30, 2023;

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 change in Franklin Electric Co., Inc.'s internal control over financial reporting that occurred during Franklin Electric Co., Inc.'s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) 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:	July 28, 2023
	/s/ Jeffery L. Taylor
	Jeffery L. Taylor
	Vice President and Chief Financial Officer
	Franklin Electric Co., Inc.

EX-32.1

EXHIBIT 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

    In connection with the Quarterly Report of Franklin Electric Co., Inc. (the “Company”) on Form 10-Q for the second quarter ending June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gregg C. Sengstack, Chairperson and Chief Executive Officer of the Company, certify to my knowledge, pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that:

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:	July 28, 2023
	/s/ Gregg C. Sengstack
	Gregg C. Sengstack
	Chairperson and Chief Executive Officer
	Franklin Electric Co., Inc.

EX-32.2

EXHIBIT 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

    In connection with the Quarterly Report of Franklin Electric Co., Inc. (the “Company”) on Form 10-Q for the second quarter ending June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffery L. Taylor, Vice President and Chief Financial Officer of the Company, certify to my knowledge, pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that:

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:	July 28, 2023
	/s/ Jeffery L. Taylor
	Jeffery L. Taylor
	Vice President and Chief Financial Officer
	Franklin Electric Co., Inc.

XML

COVER - $ / shares	6 Months Ended
	Jun. 30, 2023	Jul. 26, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	0-362
Entity Registrant Name	FRANKLIN ELECTRIC CO., INC.
Entity Incorporation, State or Country Code	IN
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
Title of 12(b) Security	Common Stock, $0.10 par value
Trading Symbol	FELE
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Listing, Par Value Per Share	$ 0.10
Entity Common Stock, Shares Outstanding		46,260,817
Entity Central Index Key	0000038725
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Net sales	$ 569,181	$ 551,138	$ 1,053,732	$ 1,002,608
Cost of sales	380,700	361,850	702,986	667,986
Gross profit	188,481	189,288	350,746	334,622
Selling, general, and administrative expenses	107,429	108,313	216,964	212,986
Restructuring (income)/expense	149	(7)	273	713
Operating income	80,903	80,982	133,509	120,923
Interest expense	(4,178)	(2,932)	(7,325)	(4,426)
Other income/(expense), net	1,179	(1,159)	1,588	(1,537)
Foreign exchange expense	(3,571)	(329)	(5,615)	(914)
Income before income taxes	74,333	76,562	122,157	114,046
Income tax expense	14,173	16,799	24,421	24,164
Net income	60,160	59,763	97,736	89,882
Less: Net income attributable to noncontrolling interests	(560)	(399)	(811)	(753)
Net income attributable to Franklin Electric Co., Inc.	$ 59,600	$ 59,364	$ 96,925	$ 89,129
Earnings per share:
Basic	$ 1.29	$ 1.27	$ 2.09	$ 1.91
Diluted	$ 1.27	$ 1.26	$ 2.06	$ 1.89

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 60,160	$ 59,763	$ 97,736	$ 89,882
Other comprehensive income/(loss), before tax:
Foreign currency translation adjustments	4,495	(19,505)	10,989	(10,913)
Employee benefit plan activity	555	1,184	1,110	2,376
Other comprehensive income/(loss)	5,050	(18,321)	12,099	(8,537)
Income tax expense related to items of other comprehensive income/(loss)	(139)	(260)	(277)	(520)
Other comprehensive income/(loss), net of tax	4,911	(18,581)	11,822	(9,057)
Comprehensive income	65,071	41,182	109,558	80,825
Less: Comprehensive income attributable to noncontrolling interests	(573)	(312)	(847)	(628)
Comprehensive income attributable to Franklin Electric Co., Inc.	$ 64,498	$ 40,870	$ 108,711	$ 80,197

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 53,227	$ 45,790
Receivables, less allowances of $3,942 and $4,211, respectively	299,485	230,404
Inventories:
Raw material	194,336	196,876
Work-in-process	30,597	30,276
Finished goods	349,709	317,828
Total inventories	574,642	544,980
Other current assets	39,036	36,916
Total current assets	966,390	858,090
Property, plant, and equipment, at cost:
Land and buildings	165,670	159,253
Machinery and equipment	308,593	297,496
Furniture and fixtures	54,725	50,264
Other	56,334	50,249
Property, plant, and equipment, gross	585,322	557,262
Less: Allowance for depreciation	(360,858)	(342,108)
Property, plant, and equipment, net	224,464	215,154
Lease right-of-use assets, net	44,160	48,948
Deferred income taxes	7,140	6,778
Intangible assets, net	223,997	231,275
Goodwill	330,297	328,046
Other assets	6,633	5,910
Total assets	1,803,081	1,694,201
Current liabilities:
Accounts payable	161,266	139,266
Accrued expenses and other current liabilities	95,079	120,555
Current lease liability	13,624	15,959
Income taxes	2,867	3,233
Current maturities of long-term debt and short-term borrowings	159,841	126,756
Total current liabilities	432,677	405,769
Long-term debt	88,680	89,271
Long-term lease liability	29,513	32,858
Income taxes payable non-current	4,837	8,707
Deferred income taxes	32,434	29,744
Employee benefit plans	32,628	31,889
Other long-term liabilities	31,910	25,209
Commitments and contingencies (see Note 15)
Redeemable noncontrolling interest	901	620
Shareholders' equity:
Common stock (65,000 shares authorized, $.10 par value) outstanding (46,257 and 46,193, respectively)	4,626	4,619
Additional capital	340,812	325,426
Retained earnings	1,020,883	969,261
Accumulated other comprehensive loss	(219,662)	(231,448)
Total shareholders' equity	1,146,659	1,067,858
Noncontrolling interest	2,842	2,276
Total equity	1,149,501	1,070,134
Total liabilities and equity	$ 1,803,081	$ 1,694,201

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Accounts Receivable, Allowance for Credit Loss, Current	$ 3,942	$ 4,211
Shareholders' equity:
Common shares, authorized (in shares)	65,000	65,000
Common shares, par value (in dollars per share)	$ 0.10	$ 0.10
Common shares, outstanding (in shares)	46,257	46,193

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net income	$ 97,736	$ 89,882
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	26,259	24,521
Non-cash lease expense	8,523	8,526
Share-based compensation	6,410	6,322
Deferred income taxes	1,924	2,004
Loss on disposals of plant and equipment	357	721
Foreign exchange expense	5,615	914
Changes in assets and liabilities, net of acquisitions:
Receivables	(70,725)	(93,063)
Inventory	(24,125)	(123,817)
Accounts payable and accrued expenses	(3,880)	29,969
Operating leases	(8,706)	(8,526)
Income taxes	(6,691)	(1,891)
Income taxes-U.S. Tax Cuts and Jobs Act	(2,902)	(355)
Employee benefit plans	831	826
Other, net	12,400	1,426
Net cash flows from operating activities	43,026	(62,541)
Cash flows from investing activities:
Additions to property, plant, and equipment	(20,241)	(20,084)
Proceeds from sale of property, plant, and equipment	0	6
Cash paid for acquisitions, net of cash acquired	(6,641)	(1,365)
Other, net	2	(8)
Net cash flows from investing activities	(26,880)	(21,451)
Cash flows from financing activities:
Proceeds from issuance of debt	294,650	341,810
Repayments of debt	(262,479)	(215,538)
Proceeds from issuance of common stock	9,010	1,916
Purchases of common stock	(25,541)	(30,644)
Dividends paid	(20,872)	(18,205)
Deferred Payments for Acquisitions	(186)	0
Net cash flows from financing activities	(5,418)	79,339
Effect of exchange rate changes on cash and cash equivalents	(3,291)	(2,658)
Net change in cash and cash equivalents	7,437	(7,311)
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Beginning Balance	45,790	40,536
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Ending Balance	53,227	33,225
Non-cash items:
Additions to property, plant, and equipment, not yet paid	540	571
Right-of-Use Assets obtained in exchange for new operating lease liabilities	3,090	8,359
Payable to sellers of acquired entities	644	0
Non-cash investment to acquire property in lieu of cash payment for products provided	$ 419	$ 0

XML

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	CONDENSED CONSOLIDATED FINANCIAL STATEMENTSThe accompanying condensed consolidated balance sheet as of December 31, 2022, which has been derived from audited financial statements, and the unaudited interim condensed consolidated financial statements as of June 30, 2023, and for the second quarters and six months ended June 30, 2023 and June 30, 2022 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 adjustments) considered necessary for a fair presentation of the financial position and the results of operations for the interim periods have been made. Operating results for the second quarter and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023. For further information, including a description of the critical accounting policies of Franklin Electric Co., Inc. (the "Company"), refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

XML

ACCOUNTING PRONOUNCEMENTS

6 Months Ended

Jun. 30, 2023

Accounting Changes and Error Corrections [Abstract]

ACCOUNTING PRONOUNCEMENTS

ACCOUNTING PRONOUNCEMENTS

Adoption of New Accounting Standards

In October 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. ASU 2021-08 requires entities to recognize and measure contracts on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts. This will improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. ASU 2021-08 is effective for interim and annual periods beginning after December 15, 2022 with early adoption permitted. ASU 2021-08 should be applied on a prospective basis to business combinations that occur after the effective date. The Company adopted this ASU on January 1, 2023, and it did not have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. ASU 2022-04 creates the obligation for a company that uses a supplier finance program to purchase goods or services to disclose qualitative and quantitative information about its supplier finance program(s). This will allow financial statement users to better consider the effect of the program(s) on the entity's working capital, liquidity and cash flow over time. ASU 2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023 with early adoption permitted. ASU 2022-04 should be applied retrospectively to each period in which a balance sheet is presented except for the amendment on rollforward information, which should be applied prospectively. The Company adopted this ASU on January 1, 2023, and it did not have a material impact on the Company's consolidated financial position, results of operations, or cash flows as the Company has no current supplier finance programs.

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ACQUISITIONS

6 Months Ended

Jun. 30, 2023

Business Combination and Asset Acquisition [Abstract]

ACQUISITIONS

ACQUISITIONS

2023

During the first quarter ended March 31, 2023, the Company acquired all of the assets of Phil-Good Products, Inc. ("Phil-Good"). Phil-Good is an injection molded plastics component manufacturer. In another separate transaction in the first quarter of 2023, the Company acquired 100 percent of the ownership interests of Hydropompe S.r.l. ("Hydropompe"). Hydropompe is a pump manufacturer with a focus in dewatering and sewage products. The combined, all-cash purchase price for both acquisitions in the first quarter of 2023 was $8.7 million after purchase price adjustments based on the level of working capital acquired. The fair value of the assets acquired and liabilities assumed for both acquisitions is preliminary as of June 30, 2023. In addition, the Company has not presented separate results of operations of the acquired companies since the closing of the acquisitions or combined pro forma financial information of the Company and the acquired interests since the beginning of 2022, as the results of operations for both acquisitions are immaterial.

Transaction costs were expensed as incurred under the guidance of FASB Accounting Standards Codification Topic 805, Business Combinations and were insignificant for all periods presented.

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTSFASB ASC Topic 820, Fair Value Measurements and Disclosures, provides guidance for defining, measuring, and disclosing fair value within an established framework and hierarchy. Fair value is defined as the exchange price that would be received for

an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standard established a fair value hierarchy which requires an entity to maximize the use of observable inputs and to minimize the use of unobservable inputs when measuring fair value. The three levels of inputs that may be used to measure fair value within the hierarchy are as follows:

Level 1 – Quoted prices for identical assets and liabilities in active markets;

Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

As of June 30, 2023 and December 31, 2022, the assets and liabilities measured at fair value on a recurring basis were as set forth in the table below:

(In millions)	June 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	11.7	$	11.7	$	—	$	—
Share swap transaction	0.9		0.9		—		—
Total assets	$	12.6	$	12.6	$	—	$	—
Liabilities:
Forward currency contracts	$	0.1	$	—	$	0.1	$	—
Total liabilities	$	0.1	$	—	$	0.1	$	—
	December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	7.9	$	7.9	$	—	$	—
Total assets	$	7.9	$	7.9	$	—	$	—
Liabilities:
Share swap transaction	$	0.1	$	0.1	$	—	$	—
Total liabilities	$	0.1	$	0.1	$	—	$	—

The Company’s Level 1 cash equivalents assets are generally comprised of foreign bank guaranteed certificates of deposit and short term deposits. The share swap transaction and forward currency contracts assets and liabilities are recorded within the "Receivables" and "Accounts Payable" lines of the condensed consolidated balance sheets and are further described in Note 5 - Financial Instruments.

Total debt, including current maturities, have carrying amounts of $248.5 million and $216.1 million and estimated fair values of $244.9 million and $213.2 million as of June 30, 2023 and December 31, 2022, respectively. 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 debt, the Company uses estimates based on rates currently available to the Company for debt with similar terms and remaining maturities. Accordingly, the fair value of debt is classified as Level 2 within the valuation hierarchy.

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FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTSThe Company’s non-employee directors' deferred compensation stock program is subject to variable plan accounting and, accordingly, is adjusted for changes in the Company’s stock price at the end of each reporting period. The Company has entered into share swap transaction agreements (the "swap") to mitigate the Company’s exposure to the fluctuations in the Company's stock price. The swap has not been designated as a hedge for accounting purposes and is cancellable with 30 days' written

notice by either party. As of June 30, 2023 and December 31, 2022, respectively, the swap had a notional value based on 240,000 shares and 225,000 shares. For the second quarter and six months ended June 30, 2023, changes in the fair value of the swap resulted in a gain of $1.7 million and a gain of $4.7 million, respectively. For the second quarter and six months ended June 30, 2022, changes in the fair value of the swap resulted in a loss of $2.1 million and a loss of $4.6 million, respectively. Gains and losses resulting from the swap were largely offset by gains and losses on the fair value of the deferred compensation stock liability. All gains or losses and expenses related to the swap are recorded in the Company's condensed consolidated statements of income within the “Selling, general, and administrative expenses” line.

The Company is exposed to foreign currency exchange rate risk arising from transactions in the normal course of business including making sales and purchases of raw materials and finished goods in foreign denominated currencies with third party customers and suppliers as well as to wholly owned subsidiaries of the Company. To reduce its exposure to foreign currency exchange rate volatility, the Company enters into various forward currency contracts to offset these fluctuations. The Company uses forward currency contracts only in an attempt to limit underlying exposure from foreign currency exchange rate fluctuations and to minimize earnings volatility associated with foreign currency exchange rate fluctuations and has not elected to use hedge accounting. Decisions on whether to use such derivative instruments are primarily based on the amount of exposure to the currency involved and an assessment of the near-term market value for each currency. As of June 30, 2023 and December 31, 2022, respectively, the Company had a notional amount of $27.9 million and $10.3 million in forward currency contracts outstanding and the related fair value of those contracts was not material. For the second quarter and six months ended June 30, 2023, changes in the fair value of the forward currency contracts resulted in gains of $0.6 million and $1.6 million, respectively. For the second quarter and six months ended June 30, 2022, changes in the fair value of the forward currency contracts resulted in gains of $0.5 million and $0.3 million, respectively. These gains are recorded in the Company's condensed consolidated statements of income within the "Foreign exchange expense" line.

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GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

The carrying amounts of the Company’s intangible assets, excluding goodwill, are as follows:

(In millions)	June 30, 2023				December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Definite-lived intangibles:
Customer relationships	252.2		(108.8)		251.6		(101.5)
Patents	$	7.3	$	(7.3)	$	7.3	$	(7.3)
Technology	7.5		(7.4)		7.5		(7.4)
Trade names	41.7		(4.8)		$	41.8	(3.7)
Other	3.4		(2.8)		3.4		(2.7)
Total	$	312.1	$	(131.1)	$	311.6	$	(122.6)
Indefinite-lived intangibles:
Trade names	43.0		—		42.3		—
Total intangibles	$	355.1	$	(131.1)	$	353.9	$	(122.6)

Amortization expense related to intangible assets for the second quarters ended June 30, 2023 and June 30, 2022 was $4.3 million and $4.4 million, respectively, and for the six months ended June 30, 2023 and June 30, 2022 was $8.5 million and $8.7 million, respectively.

The change in the carrying amount of goodwill by reportable segment for the six months ended June 30, 2023 is as follows:

(In millions)
	Water Systems		Fueling Systems		Distribution		Consolidated
Balance as of December 31, 2022	$	211.9	$	70.3	$	45.8	$	328.0
Acquisitions	1.0		—		—		1.0
Foreign currency translation	1.1		0.2		—		1.3
Balance as of June 30, 2023	$	214.0	$	70.5	$	45.8	$	330.3

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EMPLOYEE BENEFIT PLANS

6 Months Ended

Jun. 30, 2023

Retirement Benefits [Abstract]

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

The following table sets forth the aggregated net periodic benefit cost for all pension plans for the second quarters and six months ended June 30, 2023 and June 30, 2022:

(In millions)	Pension Benefits
	Second Quarter Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Service cost	$	0.2	$	0.2	$	0.3	$	0.4
Interest cost	1.8		0.8		3.3		1.6
Expected return on assets	(1.8)		(1.5)		(3.6)		(3.0)
Amortization of:
Prior service cost	—		—		—		—
Actuarial loss	0.5		1.2		1.1		2.4
Settlement cost	—		—		—		—
Net periodic benefit cost	$	0.7	$	0.7	$	1.1	$	1.4

The following table sets forth the aggregated net periodic benefit cost for the other post-retirement benefit plan for the second quarters and six months ended June 30, 2023 and June 30, 2022:

(In millions)	Other Benefits
	Second Quarter Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Service cost	$	—	$	—	$	—	$	—
Interest cost	—		—		0.1		0.1
Expected return on assets	—		—		—		—
Amortization of:
Prior service cost	—		—		—		—
Actuarial loss	—		—		—		—
Settlement cost	—		—		—		—
Net periodic benefit cost	$	—	$	—	$	0.1	$	0.1

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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of:

(In millions)	June 30, 2023	December 31, 2022
Salaries, wages, and commissions	40.3	57.9
Product warranty costs	10.7	11.2
Insurance	3.0	1.7
Employee benefits	8.9	13.5
Other	32.2	36.3
Total	95.1	120.6

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INCOME TAXES

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company’s effective tax rate for the six-month period ended June 30, 2023, was 20.0 percent as compared to 21.2 percent for the six-month period ended June 30, 2022. The effective tax rate differs from the U.S. statutory rate of 21 percent primarily due to the recognition of the U.S. foreign-derived intangible income (FDII) provisions, partially offset by state taxes, and certain discrete events including excess tax benefits from share-based compensation. For the second quarter of 2023, the effective tax rate was 19.1 percent compared to 21.9 percent for the second quarter of 2022.

The decrease in the effective tax rates for the second quarter and first six months of 2023 compared to the comparable periods in the prior year was a result of more favorable discrete events in 2023, primarily related to excess tax benefits from share-based compensation.

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DEBT

3 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

DEBT

DEBT

Debt consisted of the following:

(In millions)	June 30, 2023		December 31, 2022
New York Life Agreement	75.0		75.0
Credit Agreement	158.3		122.8
Tax increment financing debt	14.7		15.3
Foreign subsidiary debt	0.6		3.1
Other	—		—
Less: unamortized debt issuance costs	(0.1)		(0.1)
	$	248.5	$	216.1
Less: current maturities	(159.8)		(126.8)
Long-term debt	$	88.7	89.3

Credit Agreement

As of June 30, 2023, the Company had $158.3 million outstanding borrowings with a weighted-average interest rate of 5.9 percent, $3.6 million in letters of credit outstanding, and $188.1 million of available capacity under its credit agreement. As of December 31, 2022, the Company had $122.8 million outstanding borrowings with a weighted-average interest rate of 5.0 percent, $4.0 million in letters of credit outstanding, and $223.2 million of available capacity under its credit agreement.

The Company also has overdraft lines of credit for certain subsidiaries with various expiration dates. The aggregate maximum borrowing capacity of these overdraft lines of credits is $20.3 million. As of June 30, 2023, there were $0.1 million outstanding borrowings and $20.2 million of available capacity under these lines of credit. As of December 31, 2022, there were $22.0 million overdraft lines of credit with $2.7 million of outstanding borrowings and $19.3 million of available capacity under these lines of credit.

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EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

The Company calculates basic and diluted earnings per common share using the two-class method. Under the two-class method, net earnings are allocated to each class of common stock and participating security as if all of the net earnings for the period had been distributed. The Company's participating securities consist of share-based payment awards that contain a non-forfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common shareholders.

Basic earnings per common share excludes dilution and is calculated by dividing net earnings allocable to common shares by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocated to common shares by the weighted-average number of common shares outstanding for the period, as adjusted for the potential dilutive effect of non-participating share-based awards.

The following table sets forth the computation of basic and diluted earnings per share:

	Second Quarter Ended				Six Months Ended
(In millions, except per share amounts)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Numerator:
Net income attributable to Franklin Electric Co., Inc.	$	59.6	$	59.4	$	96.9	$	89.1
Less: Earnings allocated to participating securities	0.2		0.2		0.3		0.4
Net income available to common shareholders	$	59.4	$	59.2	$	96.6	$	88.7
Denominator:
Basic weighted average common shares outstanding	46.2		46.3		46.2		46.4
Effect of dilutive securities:
Non-participating employee stock options, performance awards, and deferred shares to non-employee directors	0.7		0.6		0.7		0.7
Diluted weighted average common shares outstanding	46.9		46.9		46.9		47.1
Basic earnings per share	$	1.29	$	1.27	$	2.09	$	1.91
Diluted earnings per share	$	1.27	$	1.26	$	2.06	$	1.89

There were 0.1 million and 0.1 million stock options outstanding for the second quarters ended June 30, 2023 and June 30, 2022, and 0.1 million and 0.1 million stock options outstanding for the six months ended June 30, 2023 and June 30, 2022, respectively, that were excluded from the computation of diluted earnings per share, as their inclusion would be anti-dilutive.

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EQUITY ROLL FORWARD

6 Months Ended

Jun. 30, 2023

Stockholders' Equity Note [Abstract]

EQUITY ROLL FORWARD

EQUITY ROLL FORWARD

The schedules below set forth equity changes in the second quarters and six months ended June 30, 2023 and June 30, 2022:

(In thousands)	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
Balance as of March 31, 2023	$	4,614	$	332,263	$	980,114	$	(224,560)	$	2,537	$	1,094,968	$	633
Net income	—		—		59,600		—		292		59,892		268
Dividends on common stock ($0.225/share)	—		—		(10,432)		—		—		(10,432)		—
Common stock issued	15		6,057		—		—		—		6,072		—
Common stock repurchased	(9)		—		(8,399)		—		—		(8,408)		—
Share-based compensation	6		2,492		—		—		—		2,498		—
Currency translation adjustment	—		—		—		4,482		13		4,495		—
Pension and other post retirement plans, net of taxes	—		—		—		416		—		416		—
Balance as of June 30, 2023	$	4,626	$	340,812	$	1,020,883	$	(219,662)	$	2,842	$	1,149,501	$	901
(In thousands)	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
Balance as of March 31, 2022	$	4,635	$	314,935	$	861,156	$	(219,019)	$	2,352	$	964,059	$	106
Net income	—		—		59,364		—		229		59,593		170
Dividends on common stock ($0.195/share)	—		—		(9,076)		—		—		(9,076)		—
Common stock issued	3		1,570		—		—		—		1,573		—
Common stock repurchased	(15)		—		(11,309)		—		—		(11,324)		—
Share-based compensation	5		2,332		—		—		—		2,337		—
Currency translation adjustment	—		—		—		(19,418)		(95)		(19,513)		8
Pension and other post retirement plans, net of taxes	—		—		—		924		—		924		—
Balance as of June 30, 2022	$	4,628	$	318,837	$	900,135	$	(237,513)	$	2,486	$	988,573	$	284

(In thousands)	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
Balance as of December 31, 2022	$	4,619	$	325,426	$	969,261	$	(231,448)	$	2,276	$	1,070,134	$	620
Net Income	—		—		96,925		—		530		97,455		281
Dividends on common stock ($0.450/share)	—		—		(20,872)		—		—		(20,872)		—
Common stock issued	22		8,988		—		—		—		9,010		—
Common stock repurchased	(27)		—		(24,431)		—		—		(24,458)		—
Share-based compensation	12		6,398		—		—		—		6,410		—
Currency translation adjustment	—		—		—		10,953		36		10,989		—
Pension and other post retirement plans, net of taxes	—		—		—		833		—		833		—
Balance as of June 30, 2023	$	4,626	$	340,812	$	1,020,883	$	(219,662)	$	2,842	$	1,149,501	$	901
(In thousands)	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
Balance as of December 31, 2021	$	4,648	$	310,617	$	859,817	$	(228,581)	$	2,161	$	948,662	$	(19)
Net Income	—		—		89,129		—		464		89,593		289
Dividends on common stock ($0.390/share)	—		—		(18,205)		—		—		(18,205)		—
Common stock issued	4		1,912		—		—		—		1,916		—
Common stock repurchased	(38)		—		(30,606)		—		—		(30,644)		—
Share-based compensation	14		6,308		—		—		—		6,322		—
Currency translation adjustment	—		—		—		(10,788)		(139)		(10,927)		14
Pension and other post retirement plans, net of taxes	—		—		—		1,856		—		1,856		—
Balance as of June 30, 2022	$	4,628	$	318,837	$	900,135	$	(237,513)	$	2,486	$	988,573	$	284

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ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

Changes in accumulated other comprehensive income/(loss) by component for the six months ended June 30, 2023 and June 30, 2022, are summarized below:

(In millions)	Foreign Currency Translation Adjustments		Pension and Post-Retirement Plan Benefit Adjustments (2)		Total
For the six months ended June 30, 2023:
Balance as of December 31, 2022	$	(191.3)	$	(40.1)	$	(231.4)
Other comprehensive income/(loss) before reclassifications	10.9		—		10.9
Amounts reclassified from accumulated other comprehensive income/(loss) (1)	—		0.8		0.8
Net other comprehensive income/(loss)	10.9		0.8		11.7
Balance as of June 30, 2023	$	(180.4)	$	(39.3)	$	(219.7)
For the six months ended June 30, 2022:
Balance as of December 31, 2021	$	(179.6)	$	(49.0)	$	(228.6)
Other comprehensive income/(loss) before reclassifications	(10.7)		—		(10.7)
Amounts reclassified from accumulated other comprehensive income/(loss) (1)	—		1.8		1.8
Net other comprehensive income/(loss)	(10.7)		1.8		(8.9)
Balance as of June 30, 2022	$	(190.3)	$	(47.2)	$	(237.5)

(1) This accumulated other comprehensive income/(loss) component is included in the computation of net periodic pension cost (refer to Note 7 for additional details) and is included in the "Other income/(expense), net" line of the Company's condensed consolidated statements of income.

(2) Net of tax expense of $0.3 million and $0.5 million for the six months ended June 30, 2023 and June 30, 2022, respectively.

Amounts related to noncontrolling interests were not material.

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SEGMENT AND GEOGRAPHIC INFORMATION

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

SEGMENT AND GEOGRAPHIC INFORMATION

SEGMENT AND GEOGRAPHIC INFORMATION

The accounting policies of the operating segments are the same as those described in Note 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2022. Revenue is recognized based on the invoice price at the point in time when the customer obtains control of the product, which is typically upon shipment to the customer. The Water and Fueling segments include manufacturing operations and supply certain components and finished goods, both between segments and to the Distribution segment. The Company reports these product transfers between Water and Fueling as inventory transfers as a significant number of the Company's manufacturing facilities are shared across segments for scale and efficiency purposes. The Company reports intersegment transfers from Water to Distribution as intersegment revenue at market prices to properly reflect the commercial arrangement of vendor to customer that exists between the Water and Distribution segments.

Segment operating income is a key financial performance measure. Operating income by segment is based on net sales less identifiable operating expenses and allocations and includes profits recorded on sales to other segments of the Company. 

Financial information by reportable business segment is included in the following summary:

	Second Quarter Ended				Six Months Ended
(In millions)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
	Net sales
Water Systems
External sales
United States & Canada	$	176.8	$	158.4	$	336.2	$	293.1
Latin America	42.0		41.7		82.3		79.6
Europe, Middle East & Africa	54.6		49.7		105.0		100.7
Asia Pacific	22.2		24.2		41.0		44.7
Intersegment sales
United States & Canada	26.1		36.5		63.8		65.0
Total sales	321.7		310.5		628.3		583.1
Distribution
External sales
United States & Canada	193.1		191.1		336.1		326.0
Intersegment sales	—		—		—		—
Total sales	193.1		191.1		336.1		326.0
Fueling Systems
External sales
United States & Canada	60.4		64.2		114.4		116.0
All other	20.0		21.8		38.7		42.5
Intersegment sales	—		—		—		—
Total sales	80.4		86.0		153.1		158.5
Intersegment Eliminations/Other	(26.1)		(36.5)		(63.8)		(65.0)
Consolidated	$	569.1	$	551.1	$	1,053.7	$	1,002.6
	Second Quarter Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
	Operating income/(loss)
Water Systems	$	50.8	$	49.0	$	99.8	$	82.2
Distribution	17.8		23.3		22.5		32.7
Fueling Systems	26.7		26.1		47.5		43.8
Intersegment Eliminations/Other	(14.4)		(17.4)		(36.3)		(37.8)
Consolidated	$	80.9	$	81.0	$	133.5	$	120.9

	June 30, 2023		December 31, 2022
	Total assets
Water Systems	$	1,058.6	$	1,017.5
Distribution	412.4		360.4
Fueling Systems	276.6		269.1
Other	55.5		47.2
Consolidated	$	1,803.1	$	1,694.2

Other Assets are generally Corporate assets that are not allocated to the segments and are comprised primarily of cash and property, plant and equipment.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

In 2011, the Company became aware of a review of alleged issues with certain underground piping connections installed in filling stations in France owned by the French Subsidiary of Exxon Mobile, Esso S.A.F. A French court ordered that a designated, subject-matter expert review 103 filling stations to determine what, if any, damages are present and the cause of those damages. The Company has participated in this investigation since 2011, along with several other third parties including equipment installers, engineering design firms who designed and provided specifications for the stations, and contract manufacturers of some of the installed equipment. In May 2022, the subject-matter expert issued its final report, which indicates that total damages incurred by Esso amounted to approximately 9.5 million Euro. It is the Company’s position that its products were not the cause of any alleged damage. The Company submitted its response to the expert's final report in February 2023. The Company cannot predict the ultimate outcome of this matter. Any exposure related to this matter is neither probable nor estimable at this time. If payments result from a resolution of this matter, depending on the amount, they could have a material effect on the Company’s financial position, results of operations, or cash flows.

The Company is defending other various claims and legal actions which have arisen in the ordinary course of business. In the opinion of management, based on current knowledge of the facts and after discussion with counsel, these claims and legal actions can be defended or resolved without a material effect on the Company’s financial position, results of operations, and net cash flows.

At June 30, 2023, the Company had $11.1 million of commitments primarily for capital expenditures and purchase of raw materials to be used in production.

The changes in the carrying amount of the warranty accrual, as recorded in the "Accrued expenses and other current liabilities" line of the Company's condensed consolidated balance sheet for the six months ended June 30, 2023, are as follows:

(In millions)
Balance as of December 31, 2022	$	11.2
Accruals related to product warranties	6.4
Reductions for payments made	(6.9)
Balance as of June 30, 2023	$	10.7

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ACCOUNTING PRONOUNCEMENTS (Policies)

6 Months Ended

Jun. 30, 2023

Accounting Changes and Error Corrections [Abstract]

Adoption of New Accounting Standards

Adoption of New Accounting Standards

In October 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. ASU 2021-08 requires entities to recognize and measure contracts on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers, as if it had originated the contracts. This will improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. ASU 2021-08 is effective for interim and annual periods beginning after December 15, 2022 with early adoption permitted. ASU 2021-08 should be applied on a prospective basis to business combinations that occur after the effective date. The Company adopted this ASU on January 1, 2023, and it did not have a material impact on the Company's consolidated financial position, results of operations, or cash flows.

In September 2022, the FASB issued ASU 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. ASU 2022-04 creates the obligation for a company that uses a supplier finance program to purchase goods or services to disclose qualitative and quantitative information about its supplier finance program(s). This will allow financial statement users to better consider the effect of the program(s) on the entity's working capital, liquidity and cash flow over time. ASU 2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023 with early adoption permitted. ASU 2022-04 should be applied retrospectively to each period in which a balance sheet is presented except for the amendment on rollforward information, which should be applied prospectively. The Company adopted this ASU on January 1, 2023, and it did not have a material impact on the Company's consolidated financial position, results of operations, or cash flows as the Company has no current supplier finance programs.

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets Measured on Recurring Basis

As of June 30, 2023 and December 31, 2022, the assets and liabilities measured at fair value on a recurring basis were as set forth in the table below:

(In millions)	June 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	11.7	$	11.7	$	—	$	—
Share swap transaction	0.9		0.9		—		—
Total assets	$	12.6	$	12.6	$	—	$	—
Liabilities:
Forward currency contracts	$	0.1	$	—	$	0.1	$	—
Total liabilities	$	0.1	$	—	$	0.1	$	—
	December 31, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	7.9	$	7.9	$	—	$	—
Total assets	$	7.9	$	7.9	$	—	$	—
Liabilities:
Share swap transaction	$	0.1	$	0.1	$	—	$	—
Total liabilities	$	0.1	$	0.1	$	—	$	—

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

The carrying amounts of the Company’s intangible assets, excluding goodwill, are as follows:

(In millions)	June 30, 2023				December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Definite-lived intangibles:
Customer relationships	252.2		(108.8)		251.6		(101.5)
Patents	$	7.3	$	(7.3)	$	7.3	$	(7.3)
Technology	7.5		(7.4)		7.5		(7.4)
Trade names	41.7		(4.8)		$	41.8	(3.7)
Other	3.4		(2.8)		3.4		(2.7)
Total	$	312.1	$	(131.1)	$	311.6	$	(122.6)
Indefinite-lived intangibles:
Trade names	43.0		—		42.3		—
Total intangibles	$	355.1	$	(131.1)	$	353.9	$	(122.6)

Schedule of Indefinite-Lived Intangible Assets

The carrying amounts of the Company’s intangible assets, excluding goodwill, are as follows:

(In millions)	June 30, 2023				December 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Definite-lived intangibles:
Customer relationships	252.2		(108.8)		251.6		(101.5)
Patents	$	7.3	$	(7.3)	$	7.3	$	(7.3)
Technology	7.5		(7.4)		7.5		(7.4)
Trade names	41.7		(4.8)		$	41.8	(3.7)
Other	3.4		(2.8)		3.4		(2.7)
Total	$	312.1	$	(131.1)	$	311.6	$	(122.6)
Indefinite-lived intangibles:
Trade names	43.0		—		42.3		—
Total intangibles	$	355.1	$	(131.1)	$	353.9	$	(122.6)

Schedule of Change in the Carrying Amount of Goodwill by Reporting Segment

The change in the carrying amount of goodwill by reportable segment for the six months ended June 30, 2023 is as follows:

(In millions)
	Water Systems		Fueling Systems		Distribution		Consolidated
Balance as of December 31, 2022	$	211.9	$	70.3	$	45.8	$	328.0
Acquisitions	1.0		—		—		1.0
Foreign currency translation	1.1		0.2		—		1.3
Balance as of June 30, 2023	$	214.0	$	70.5	$	45.8	$	330.3

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EMPLOYEE BENEFIT PLANS (Tables)

6 Months Ended

Jun. 30, 2023

Pension Plan

Defined Benefit Plans and Other Postretirement Benefit Plans

Schedule of Aggregated Net Periodic Benefit Cost and Other Benefit Cost

The following table sets forth the aggregated net periodic benefit cost for all pension plans for the second quarters and six months ended June 30, 2023 and June 30, 2022:

(In millions)	Pension Benefits
	Second Quarter Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Service cost	$	0.2	$	0.2	$	0.3	$	0.4
Interest cost	1.8		0.8		3.3		1.6
Expected return on assets	(1.8)		(1.5)		(3.6)		(3.0)
Amortization of:
Prior service cost	—		—		—		—
Actuarial loss	0.5		1.2		1.1		2.4
Settlement cost	—		—		—		—
Net periodic benefit cost	$	0.7	$	0.7	$	1.1	$	1.4

Other Benefits

Defined Benefit Plans and Other Postretirement Benefit Plans

Schedule of Aggregated Net Periodic Benefit Cost and Other Benefit Cost

The following table sets forth the aggregated net periodic benefit cost for the other post-retirement benefit plan for the second quarters and six months ended June 30, 2023 and June 30, 2022:

(In millions)	Other Benefits
	Second Quarter Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Service cost	$	—	$	—	$	—	$	—
Interest cost	—		—		0.1		0.1
Expected return on assets	—		—		—		—
Amortization of:
Prior service cost	—		—		—		—
Actuarial loss	—		—		—		—
Settlement cost	—		—		—		—
Net periodic benefit cost	$	—	$	—	$	0.1	$	0.1

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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued expenses and other current liabilities consist of:

(In millions)	June 30, 2023	December 31, 2022
Salaries, wages, and commissions	40.3	57.9
Product warranty costs	10.7	11.2
Insurance	3.0	1.7
Employee benefits	8.9	13.5
Other	32.2	36.3
Total	95.1	120.6

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DEBT (Tables)

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of Long-term Debt

Debt consisted of the following:

(In millions)	June 30, 2023		December 31, 2022
New York Life Agreement	75.0		75.0
Credit Agreement	158.3		122.8
Tax increment financing debt	14.7		15.3
Foreign subsidiary debt	0.6		3.1
Other	—		—
Less: unamortized debt issuance costs	(0.1)		(0.1)
	$	248.5	$	216.1
Less: current maturities	(159.8)		(126.8)
Long-term debt	$	88.7	89.3

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EARNINGS PER SHARE (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

	Second Quarter Ended				Six Months Ended
(In millions, except per share amounts)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Numerator:
Net income attributable to Franklin Electric Co., Inc.	$	59.6	$	59.4	$	96.9	$	89.1
Less: Earnings allocated to participating securities	0.2		0.2		0.3		0.4
Net income available to common shareholders	$	59.4	$	59.2	$	96.6	$	88.7
Denominator:
Basic weighted average common shares outstanding	46.2		46.3		46.2		46.4
Effect of dilutive securities:
Non-participating employee stock options, performance awards, and deferred shares to non-employee directors	0.7		0.6		0.7		0.7
Diluted weighted average common shares outstanding	46.9		46.9		46.9		47.1
Basic earnings per share	$	1.29	$	1.27	$	2.09	$	1.91
Diluted earnings per share	$	1.27	$	1.26	$	2.06	$	1.89

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EQUITY ROLL FORWARD (Tables)

6 Months Ended

Jun. 30, 2023

Stockholders' Equity Note [Abstract]

Schedule of Stockholders' Equity

The schedules below set forth equity changes in the second quarters and six months ended June 30, 2023 and June 30, 2022:

(In thousands)	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
Balance as of March 31, 2023	$	4,614	$	332,263	$	980,114	$	(224,560)	$	2,537	$	1,094,968	$	633
Net income	—		—		59,600		—		292		59,892		268
Dividends on common stock ($0.225/share)	—		—		(10,432)		—		—		(10,432)		—
Common stock issued	15		6,057		—		—		—		6,072		—
Common stock repurchased	(9)		—		(8,399)		—		—		(8,408)		—
Share-based compensation	6		2,492		—		—		—		2,498		—
Currency translation adjustment	—		—		—		4,482		13		4,495		—
Pension and other post retirement plans, net of taxes	—		—		—		416		—		416		—
Balance as of June 30, 2023	$	4,626	$	340,812	$	1,020,883	$	(219,662)	$	2,842	$	1,149,501	$	901
(In thousands)	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
Balance as of March 31, 2022	$	4,635	$	314,935	$	861,156	$	(219,019)	$	2,352	$	964,059	$	106
Net income	—		—		59,364		—		229		59,593		170
Dividends on common stock ($0.195/share)	—		—		(9,076)		—		—		(9,076)		—
Common stock issued	3		1,570		—		—		—		1,573		—
Common stock repurchased	(15)		—		(11,309)		—		—		(11,324)		—
Share-based compensation	5		2,332		—		—		—		2,337		—
Currency translation adjustment	—		—		—		(19,418)		(95)		(19,513)		8
Pension and other post retirement plans, net of taxes	—		—		—		924		—		924		—
Balance as of June 30, 2022	$	4,628	$	318,837	$	900,135	$	(237,513)	$	2,486	$	988,573	$	284

(In thousands)	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
Balance as of December 31, 2022	$	4,619	$	325,426	$	969,261	$	(231,448)	$	2,276	$	1,070,134	$	620
Net Income	—		—		96,925		—		530		97,455		281
Dividends on common stock ($0.450/share)	—		—		(20,872)		—		—		(20,872)		—
Common stock issued	22		8,988		—		—		—		9,010		—
Common stock repurchased	(27)		—		(24,431)		—		—		(24,458)		—
Share-based compensation	12		6,398		—		—		—		6,410		—
Currency translation adjustment	—		—		—		10,953		36		10,989		—
Pension and other post retirement plans, net of taxes	—		—		—		833		—		833		—
Balance as of June 30, 2023	$	4,626	$	340,812	$	1,020,883	$	(219,662)	$	2,842	$	1,149,501	$	901
(In thousands)	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)		Noncontrolling Interest		Total Equity		Redeemable Noncontrolling Interest
Balance as of December 31, 2021	$	4,648	$	310,617	$	859,817	$	(228,581)	$	2,161	$	948,662	$	(19)
Net Income	—		—		89,129		—		464		89,593		289
Dividends on common stock ($0.390/share)	—		—		(18,205)		—		—		(18,205)		—
Common stock issued	4		1,912		—		—		—		1,916		—
Common stock repurchased	(38)		—		(30,606)		—		—		(30,644)		—
Share-based compensation	14		6,308		—		—		—		6,322		—
Currency translation adjustment	—		—		—		(10,788)		(139)		(10,927)		14
Pension and other post retirement plans, net of taxes	—		—		—		1,856		—		1,856		—
Balance as of June 30, 2022	$	4,628	$	318,837	$	900,135	$	(237,513)	$	2,486	$	988,573	$	284

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ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS) (Tables)

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS)

Changes in accumulated other comprehensive income/(loss) by component for the six months ended June 30, 2023 and June 30, 2022, are summarized below:

(In millions)	Foreign Currency Translation Adjustments		Pension and Post-Retirement Plan Benefit Adjustments (2)		Total
For the six months ended June 30, 2023:
Balance as of December 31, 2022	$	(191.3)	$	(40.1)	$	(231.4)
Other comprehensive income/(loss) before reclassifications	10.9		—		10.9
Amounts reclassified from accumulated other comprehensive income/(loss) (1)	—		0.8		0.8
Net other comprehensive income/(loss)	10.9		0.8		11.7
Balance as of June 30, 2023	$	(180.4)	$	(39.3)	$	(219.7)
For the six months ended June 30, 2022:
Balance as of December 31, 2021	$	(179.6)	$	(49.0)	$	(228.6)
Other comprehensive income/(loss) before reclassifications	(10.7)		—		(10.7)
Amounts reclassified from accumulated other comprehensive income/(loss) (1)	—		1.8		1.8
Net other comprehensive income/(loss)	(10.7)		1.8		(8.9)
Balance as of June 30, 2022	$	(190.3)	$	(47.2)	$	(237.5)

(1) This accumulated other comprehensive income/(loss) component is included in the computation of net periodic pension cost (refer to Note 7 for additional details) and is included in the "Other income/(expense), net" line of the Company's condensed consolidated statements of income.

(2) Net of tax expense of $0.3 million and $0.5 million for the six months ended June 30, 2023 and June 30, 2022, respectively.

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SEGMENT AND GEOGRAPHIC INFORMATION (Tables)

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Schedule of Financial Information by Reportable Business Segment

Financial information by reportable business segment is included in the following summary:

	Second Quarter Ended				Six Months Ended
(In millions)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
	Net sales
Water Systems
External sales
United States & Canada	$	176.8	$	158.4	$	336.2	$	293.1
Latin America	42.0		41.7		82.3		79.6
Europe, Middle East & Africa	54.6		49.7		105.0		100.7
Asia Pacific	22.2		24.2		41.0		44.7
Intersegment sales
United States & Canada	26.1		36.5		63.8		65.0
Total sales	321.7		310.5		628.3		583.1
Distribution
External sales
United States & Canada	193.1		191.1		336.1		326.0
Intersegment sales	—		—		—		—
Total sales	193.1		191.1		336.1		326.0
Fueling Systems
External sales
United States & Canada	60.4		64.2		114.4		116.0
All other	20.0		21.8		38.7		42.5
Intersegment sales	—		—		—		—
Total sales	80.4		86.0		153.1		158.5
Intersegment Eliminations/Other	(26.1)		(36.5)		(63.8)		(65.0)
Consolidated	$	569.1	$	551.1	$	1,053.7	$	1,002.6
	Second Quarter Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
	Operating income/(loss)
Water Systems	$	50.8	$	49.0	$	99.8	$	82.2
Distribution	17.8		23.3		22.5		32.7
Fueling Systems	26.7		26.1		47.5		43.8
Intersegment Eliminations/Other	(14.4)		(17.4)		(36.3)		(37.8)
Consolidated	$	80.9	$	81.0	$	133.5	$	120.9

	June 30, 2023		December 31, 2022
	Total assets
Water Systems	$	1,058.6	$	1,017.5
Distribution	412.4		360.4
Fueling Systems	276.6		269.1
Other	55.5		47.2
Consolidated	$	1,803.1	$	1,694.2

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COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Changes in the Carrying Amount of the Warranty Accrual

The changes in the carrying amount of the warranty accrual, as recorded in the "Accrued expenses and other current liabilities" line of the Company's condensed consolidated balance sheet for the six months ended June 30, 2023, are as follows:

(In millions)
Balance as of December 31, 2022	$	11.2
Accruals related to product warranties	6.4
Reductions for payments made	(6.9)
Balance as of June 30, 2023	$	10.7

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ACQUISITIONS (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Jun. 30, 2023
Hydropompe Srl [Domain]
Business Acquisition
Business acquisition, percentage of voting interests acquired		100.00%
Series of Individually Immaterial Business Acquisitions
Business Acquisition
Total purchase price	$ 8.7

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FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Assets Measured on Recurring and Nonrecurring Basis
Total debt, carrying value	$ 248.5	$ 216.1
Recurring Basis
Fair Value, Assets Measured on Recurring and Nonrecurring Basis
Cash equivalents	11.7	7.9
Equity Securities, FV-NI	0.9
Foreign Currency Contracts, Liability, Fair Value Disclosure	0.1
Assets, Fair Value Disclosure	12.6	7.9
Trading Liabilities, Fair Value Disclosure		0.1
Financial Liabilities Fair Value Disclosure	0.1	0.1
Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets Measured on Recurring and Nonrecurring Basis
Cash equivalents	11.7	7.9
Equity Securities, FV-NI	0.9
Foreign Currency Contracts, Liability, Fair Value Disclosure	0.0
Assets, Fair Value Disclosure	12.6	7.9
Trading Liabilities, Fair Value Disclosure		0.1
Financial Liabilities Fair Value Disclosure	0.0	0.1
Recurring Basis | Significant Other Observable Inputs (Level 2)
Fair Value, Assets Measured on Recurring and Nonrecurring Basis
Cash equivalents	0.0	0.0
Equity Securities, FV-NI	0.0
Foreign Currency Contracts, Liability, Fair Value Disclosure	0.1
Assets, Fair Value Disclosure	0.0	0.0
Trading Liabilities, Fair Value Disclosure		0.0
Financial Liabilities Fair Value Disclosure	0.1	0.0
Recurring Basis | Significant Unobservable Inputs (Level 3)
Fair Value, Assets Measured on Recurring and Nonrecurring Basis
Cash equivalents	0.0	0.0
Equity Securities, FV-NI	0.0
Foreign Currency Contracts, Liability, Fair Value Disclosure	0.0
Assets, Fair Value Disclosure	0.0	0.0
Trading Liabilities, Fair Value Disclosure		0.0
Financial Liabilities Fair Value Disclosure	0.0	0.0
Carrying value
Fair Value, Assets Measured on Recurring and Nonrecurring Basis
Total debt, carrying value	248.5	216.1
Fair value | Significant Other Observable Inputs (Level 2)
Fair Value, Assets Measured on Recurring and Nonrecurring Basis
Total debt, fair value	$ 244.9	$ 213.2

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FINANCIAL INSTRUMENTS (Details) - Not Designated as Hedging Instrument $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($) shares	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) shares	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) shares
Share swap transaction agreement
Derivative
Derivative cancellable written notice term	30 days
Derivative notional amount (in shares) | shares	240,000		240,000		225,000
Share swap transaction agreement | Selling, general, and administrative expenses
Derivative
Gain on derivative	$ 1.7		$ 4.7
Loss on derivative		$ 2.1		$ 4.6
Foreign Exchange Forward
Derivative
Derivative, Notional Amount	27.9		27.9		$ 10.3
Foreign Exchange Forward | Foreign Currency Gain (Loss)
Derivative
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments	$ 0.6	$ 0.5	$ 1.6	$ 0.3

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GOODWILL AND OTHER INTANGIBLE ASSETS (Intangible Assets) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Intangible Assets
Gross carrying amount, amortized intangibles	$ 312.1		$ 312.1		$ 311.6
Gross carrying amount, total intangibles	355.1		355.1		353.9
Accumulated amortization	(131.1)		(131.1)		(122.6)
Amortization of Intangible Assets	4.3	$ 4.4	8.5	$ 8.7
Trade Names
Intangible Assets
Gross carrying amount, unamortized intangibles	43.0		43.0		42.3
Customer Relationships
Intangible Assets
Gross carrying amount, amortized intangibles	252.2		252.2		251.6
Accumulated amortization	(108.8)		(108.8)		(101.5)
Patents
Intangible Assets
Gross carrying amount, amortized intangibles	7.3		7.3		7.3
Accumulated amortization	(7.3)		(7.3)		(7.3)
Technology
Intangible Assets
Gross carrying amount, amortized intangibles	7.5		7.5		7.5
Accumulated amortization	(7.4)		(7.4)		(7.4)
Trade Names
Intangible Assets
Gross carrying amount, amortized intangibles	41.7		41.7		41.8
Accumulated amortization	(4.8)		(4.8)		(3.7)
Other
Intangible Assets
Gross carrying amount, amortized intangibles	3.4		3.4		3.4
Accumulated amortization	$ (2.8)		$ (2.8)		$ (2.7)

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GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND OTHER INTANGIBLE ASSETS (Goodwill) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Goodwill
Goodwill, beginning balance	$ 328,046
Acquisitions	1,000
Foreign currency translation	1,300
Goodwill, ending balance	330,297
Water Systems
Goodwill
Goodwill, beginning balance	211,900
Acquisitions	1,000
Foreign currency translation	1,100
Goodwill, ending balance	214,000
Fueling Systems
Goodwill
Goodwill, beginning balance	70,300
Acquisitions	0
Foreign currency translation	200
Goodwill, ending balance	70,500
Distribution
Goodwill
Goodwill, beginning balance	45,800
Acquisitions	0
Foreign currency translation	0
Goodwill, ending balance	$ 45,800

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EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Pension Plan
Net Periodic Benefit Cost
Service cost	$ 0.2	$ 0.2	$ 0.3	$ 0.4
Interest cost	1.8	0.8	3.3	1.6
Expected return on assets	(1.8)	(1.5)	(3.6)	(3.0)
Amortization of Prior Service Cost	0.0	0.0	0.0	0.0
Amortization of actuarial loss	0.5	1.2	1.1	2.4
Settlement cost	0.0	0.0	0.0	0.0
Net periodic benefit cost	0.7	0.7	1.1	1.4
Other Benefits
Net Periodic Benefit Cost
Service cost	0.0	0.0	0.0	0.0
Interest cost	0.0	0.0	0.1	0.1
Expected return on assets	0.0	0.0	0.0	0.0
Amortization of Prior Service Cost	0.0	0.0	0.0	0.0
Amortization of actuarial loss	0.0	0.0	0.0	0.0
Settlement cost	0.0	0.0	0.0	0.0
Net periodic benefit cost	$ 0.0	$ 0.0	$ 0.1	$ 0.1

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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Millions	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Salaries, wages, and commissions	$ 40.3	$ 57.9
Product warranty costs	10.7	11.2
Insurance	3.0	1.7
Employee benefits	8.9	13.5
Other	32.2	36.3
Accrued expenses and other current liabilities	$ 95.1	$ 120.6

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INCOME TAXES (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Effective tax rate	19.10%	21.90%	20.00%	21.20%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent			21.00%

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DEBT (Schedule of Debt) (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument
Less: unamortized debt issuance costs	$ (100)	$ (100)
Total debt and capital leases	248,500	216,100
Less: current maturities	(159,841)	(126,756)
Long-term debt	88,680	89,271
Tax increment financing debt
Debt Instrument
Long-term Debt, Gross	14,700	15,300
Foreign subsidiary debt
Debt Instrument
Long-term Debt, Gross	600	3,100
All Other
Debt Instrument
Long-term Debt, Gross	0	0
Credit Agreement
Debt Instrument
Long-term Debt, Gross	158,300	122,800
New York Life Investors LLC
Debt Instrument
Long-term Debt, Gross	$ 75,000	$ 75,000

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DEBT (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Bank Overdrafts
Line of Credit Facility
Total borrowing capacity of facility	$ 20.3	$ 22.0
Outstanding borrowings	0.1	2.7
Remaining borrowing capacity	20.2	19.3
Credit Agreement
Line of Credit Facility
Outstanding borrowings	$ 158.3	$ 122.8
Line of Credit Facility, Interest Rate During Period	5.90%	5.00%
Letters of credit outstanding	$ 3.6	$ 4.0
Remaining borrowing capacity	$ 188.1	$ 223.2

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EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Numerator:
Net income attributable to Franklin Electric Co., Inc.	$ 59,600	$ 59,364	$ 96,925	$ 89,129
Less: Earnings allocated to participating securities	200	200	300	400
Net income available to common shareholders	$ 59,400	$ 59,200	$ 96,600	$ 88,700
Basic
Basic weighted average common shares outstanding	46.2	46.3	46.2	46.4
Effect of dilutive securities:
Non-participating employee stock options, performance awards, and deferred shares to non-employee directors	0.7	0.6	0.7	0.7
Diluted weighted average common shares outstanding	46.9	46.9	46.9	47.1
Basic	$ 1.29	$ 1.27	$ 2.09	$ 1.91
Diluted	$ 1.27	$ 1.26	$ 2.06	$ 1.89
Anti-dilutive stock options (in shares)	0.1	0.1	0.1	0.1

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EQUITY ROLL FORWARD (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Common Stock, Dividends, Per Share, Cash Paid	$ 0.225	$ 0.195	$ 0.450	$ 0.390
Increase (Decrease) in Stockholders' Equity
Equity, beginning balance			$ 1,070,134
Net income	$ 60,160	$ 59,763	97,736	$ 89,882
Equity, ending balance	1,149,501		1,149,501
Temporary equity, beginning balance	633	106	620	(19)
Net income	268	170	281	289
Temporary Equity, Foreign Currency Translation Adjustments	0	8	0	14
Temporary equity, ending balance	901	284	901	284
Common Stock
Increase (Decrease) in Stockholders' Equity
Equity, beginning balance	4,614	4,635	4,619	4,648
Stock Issued During Period, Value, New Issues	15	3	22	4
Stock Repurchased and Retired During Period, Value	(9)	(15)	(27)	(38)
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	6	5	12	14
Equity, ending balance	4,626	4,628	4,626	4,628
Additional Paid in Capital
Increase (Decrease) in Stockholders' Equity
Equity, beginning balance	332,263	314,935	325,426	310,617
Stock Issued During Period, Value, New Issues	6,057	1,570	8,988	1,912
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	2,492	2,332	6,398	6,308
Equity, ending balance	340,812	318,837	340,812	318,837
Retained Earnings
Increase (Decrease) in Stockholders' Equity
Equity, beginning balance	980,114	861,156	969,261	859,817
Net income	59,600	59,364	96,925	89,129
Dividends, Common Stock, Cash	(10,432)	(9,076)	(20,872)	(18,205)
Stock Repurchased and Retired During Period, Value	(8,399)	(11,309)	(24,431)	(30,606)
Equity, ending balance	1,020,883	900,135	1,020,883	900,135
Accumulated Other Comprehensive Income/(Loss)
Increase (Decrease) in Stockholders' Equity
Equity, beginning balance	(224,560)	(219,019)	(231,448)	(228,581)
Currency translation adjustment	4,482	(19,418)	10,953	(10,788)
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax	416	924	833	1,856
Equity, ending balance	(219,662)	(237,513)	(219,662)	(237,513)
Noncontrolling Interest
Increase (Decrease) in Stockholders' Equity
Equity, beginning balance	2,537	2,352	2,276	2,161
Net income	292	229	530	464
Currency translation adjustment	13	(95)	36	(139)
Equity, ending balance	2,842	2,486	2,842	2,486
Total Equity
Increase (Decrease) in Stockholders' Equity
Equity, beginning balance	1,094,968	964,059	1,070,134	948,662
Net income	59,892	59,593	97,455	89,593
Dividends, Common Stock, Cash	(10,432)	(9,076)	(20,872)	(18,205)
Stock Issued During Period, Value, New Issues	6,072	1,573	9,010	1,916
Stock Repurchased and Retired During Period, Value	(8,408)	(11,324)	(24,458)	(30,644)
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture	2,498	2,337	6,410	6,322
Currency translation adjustment	4,495	(19,513)	10,989	(10,927)
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax	416	924	833	1,856
Equity, ending balance	$ 1,149,501	$ 988,573	$ 1,149,501	$ 988,573

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ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax
Equity, beginning balance			$ 1,070,134
Net other comprehensive income/(loss)	$ 4,911	$ (18,581)	11,822	$ (9,057)
Equity, ending balance	1,149,501		1,149,501
Income tax expense related to items of other comprehensive income/(loss)	139	260	277	520
Foreign Currency Translation Adjustments
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax
Equity, beginning balance			(191,300)	(179,600)
Other comprehensive income/(loss) before reclassifications			10,900	(10,700)
Amounts reclassified from accumulated other comprehensive income/(loss) (1)			0	0
Net other comprehensive income/(loss)			10,900	(10,700)
Equity, ending balance	(180,400)	(190,300)	(180,400)	(190,300)
Pension and Post-Retirement Plan Benefit Adjustments
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax
Equity, beginning balance			(40,100)	(49,000)
Other comprehensive income/(loss) before reclassifications			0	0
Amounts reclassified from accumulated other comprehensive income/(loss) (1)			800	1,800
Net other comprehensive income/(loss)			800	1,800
Equity, ending balance	(39,300)	(47,200)	(39,300)	(47,200)
AOCI Including Portion Attributable to Noncontrolling Interest
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax
Equity, beginning balance			(231,400)	(228,600)
Other comprehensive income/(loss) before reclassifications			10,900	(10,700)
Amounts reclassified from accumulated other comprehensive income/(loss) (1)			800	1,800
Net other comprehensive income/(loss)			11,700	(8,900)
Equity, ending balance	$ (219,700)	$ (237,500)	$ (219,700)	$ (237,500)

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SEGMENT AND GEOGRAPHIC INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Segment Reporting Information
Net sales	$ 569,181	$ 551,138	$ 1,053,732	$ 1,002,608
Operating income/(loss)	80,903	80,982	133,509	120,923
Total assets	1,803,081		1,803,081		$ 1,694,201
Corporate And Eliminations
Segment Reporting Information
Net sales	(26,100)	(36,500)	(63,800)	(65,000)
Operating income/(loss)	(14,400)	(17,400)	(36,300)	(37,800)
Total assets	55,500		55,500		47,200
Water Systems | Operating Segments
Segment Reporting Information
Net sales	321,700	310,500	628,300	583,100
Operating income/(loss)	50,800	49,000	99,800	82,200
Total assets	1,058,600		1,058,600		1,017,500
Water Systems | United States & Canada
Segment Reporting Information
Net sales	176,800	158,400	336,200	293,100
Water Systems | United States & Canada | Intersegment Sales
Segment Reporting Information
Net sales	26,100	36,500	63,800	65,000
Water Systems | Latin America
Segment Reporting Information
Net sales	42,000	41,700	82,300	79,600
Water Systems | EMEA
Segment Reporting Information
Net sales	54,600	49,700	105,000	100,700
Water Systems | Asia Pacific
Segment Reporting Information
Net sales	22,200	24,200	41,000	44,700
Distribution | Operating Segments
Segment Reporting Information
Net sales	193,100	191,100	336,100	326,000
Operating income/(loss)	17,800	23,300	22,500	32,700
Total assets	412,400		412,400		360,400
Distribution | United States & Canada
Segment Reporting Information
Net sales	193,100	191,100	336,100	326,000
Distribution | United States & Canada | Intersegment Sales
Segment Reporting Information
Net sales	0	0	0	0
Fueling Systems | Operating Segments
Segment Reporting Information
Net sales	80,400	86,000	153,100	158,500
Operating income/(loss)	26,700	26,100	47,500	43,800
Total assets	276,600		276,600		$ 269,100
Fueling Systems | Intersegment Sales
Segment Reporting Information
Net sales	0	0	0	0
Fueling Systems | United States & Canada
Segment Reporting Information
Net sales	60,400	64,200	114,400	116,000
Fueling Systems | All Other
Segment Reporting Information
Net sales	20,000	21,800	38,700	42,500
Consolidated
Segment Reporting Information
Net sales	$ 569,100	$ 551,100	$ 1,053,700	$ 1,002,600

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COMMITMENTS AND CONTINGENCIES (Details) - 6 months ended Jun. 30, 2023 € in Millions, $ in Millions	EUR (€)	USD ($)
Commitments
Purchase obligations		$ 11.1
Changes in the Carrying Amount of the Warranty Accrual
Beginning balance		11.2
Accruals related to product warranties		6.4
Reductions for payments made		(6.9)
Ending balance		$ 10.7
Esso S.A.F. | Pending Litigation | Damages from Product Defects
Loss Contingencies
Loss Contingency, Damages Sought, Value | €	€ 9.5