Fourth Quarter 2023 Highlights
- Consolidated net sales of
$473.0 million , a decrease of 3% to the prior year - Water Systems and Distribution net sales decreased by 1% each, while Fueling Systems net sales decreased 23%
- Operating income was
$50.8 million with operating margin of 10.7% - GAAP fully diluted earnings per share (EPS) was
$0.82
Full Year 2023 Highlights
- Full Year record net sales of
$2.1 billion , an increase of 1% over the prior year - Water Systems and Distribution both set new net sales records with increases of 4% and 1%, respectively, while Fueling Systems net sales decreased 11%
- Operating income for 2023 was a record at
$262.4 million with operating margin of 12.7% - GAAP fully diluted EPS was a record at
$4.11 , an increase of 4% over the prior year - Record cash flows from operating activities of
$315.7 million increased$214.0 million over the prior year
Fourth quarter 2023 net sales were
Full Year 2023 net sales were
“The Franklin Electric team delivered another solid quarter to end a record year overall for the Company with new full year records for net sales, operating income, earnings per share, and operating cash flows. Strong execution drove healthy margins for both the quarter and year, led by record full-year operating income in our Water Systems segment while commodity price headwinds in our Distribution business and destocking activity in Fueling continued to weigh on our results,” commented
“The breadth and durability of our global portfolio has proven resilient and positions us well entering 2024 where we expect demand to gain momentum as we move further into the year. I’m confident our healthy financial position and commitment to remain focused on meeting our customers’ growing requirements for water and energy solutions provides a solid foundation to enhance shareholder value”, concluded
Segment Summaries
Water Systems net sales were
Distribution net sales were
Fueling Systems net sales were
Cash Flow
Net cash flows from operating activities for 2023 were
2024 Guidance
The Company expects its full year 2024 sales to be in the range of
Earnings Conference Call
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A replay of the conference call will be available from
Forward Looking Statements
"Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein, including those relating to market conditions or the Company’s financial results, costs, expenses or expense reductions, profit margins, inventory levels, foreign currency translation rates, liquidity expectations, business goals and sales growth, involve risks and uncertainties, including but not limited to, risks and uncertainties with respect to general economic and currency conditions, various conditions specific to the Company’s business and industry, weather conditions, new housing starts, market demand, competitive factors, changes in distribution channels, supply constraints, effect of price increases, raw material costs, technology factors, integration of acquisitions, litigation, government and regulatory actions, the Company’s accounting policies, future trends, epidemics and pandemics, and other risks which are detailed in the Company’s
About
Franklin Electric Contact:
InvestorRelations@fele.com
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(Unaudited) | |||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
Fourth Quarter Ended | Fiscal Year End | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net sales | $ | 472,970 | $ | 489,431 | $ | 2,065,133 | $ | 2,043,711 | |||||||
Cost of sales | 312,961 | 323,213 | 1,368,125 | 1,352,276 | |||||||||||
Gross profit | 160,009 | 166,218 | 697,008 | 691,435 | |||||||||||
Selling, general, and administrative expenses | 108,825 | 109,724 | 433,476 | 432,076 | |||||||||||
Restructuring expense | 356 | 272 | 1,091 | 2,170 | |||||||||||
Operating income | 50,828 | 56,222 | 262,441 | 257,189 | |||||||||||
Interest expense | (1,481 | ) | (4,033 | ) | (11,790 | ) | (11,525 | ) | |||||||
Other income/(expense), net | 1,831 | (414 | ) | 3,696 | (3,201 | ) | |||||||||
Foreign exchange expense | (4,026 | ) | (2,946 | ) | (12,124 | ) | (7,236 | ) | |||||||
Income before income taxes | 47,152 | 48,829 | 242,223 | 235,227 | |||||||||||
Income tax expense | 8,322 | 8,872 | 47,489 | 46,416 | |||||||||||
Net income | $ | 38,830 | $ | 39,957 | $ | 194,734 | $ | 188,811 | |||||||
Less: Net income attributable to noncontrolling interests | (281 | ) | (378 | ) | (1,462 | ) | (1,479 | ) | |||||||
Net income attributable to | $ | 38,549 | $ | 39,579 | $ | 193,272 | $ | 187,332 | |||||||
Income per share: | |||||||||||||||
Basic | $ | 0.83 | $ | 0.85 | $ | 4.17 | $ | 4.02 | |||||||
Diluted | $ | 0.82 | $ | 0.84 | $ | 4.11 | $ | 3.97 | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(Unaudited) | |||||
(In thousands) | |||||
2023 | 2022 | ||||
ASSETS | |||||
Cash and equivalents | $ | 84,963 | $ | 45,790 | |
Receivables (net) | 222,418 | 230,404 | |||
Inventories | 508,696 | 544,980 | |||
Other current assets | 37,718 | 36,916 | |||
Total current assets | 853,795 | 858,090 | |||
Property, plant, and equipment, net | 229,739 | 215,154 | |||
Lease right-of-use assets, net | 57,014 | 48,948 | |||
587,574 | 572,009 | ||||
Total assets | $ | 1,728,122 | $ | 1,694,201 | |
LIABILITIES AND EQUITY | |||||
Accounts payable | $ | 152,419 | $ | 139,266 | |
Accrued expenses and other current liabilities | 104,949 | 123,788 | |||
Current lease liability | 17,316 | 15,959 | |||
Current maturities of long-term debt and | |||||
short-term borrowings | 12,355 | 126,756 | |||
Total current liabilities | 287,039 | 405,769 | |||
Long-term debt | 88,056 | 89,271 | |||
Long-term lease liability | 38,549 | 32,858 | |||
Income taxes payable non-current | 4,837 | 8,707 | |||
Deferred income taxes | 29,461 | 29,744 | |||
Employee benefit plans | 35,973 | 31,889 | |||
Other long-term liabilities | 33,914 | 25,209 | |||
Redeemable noncontrolling interest | 1,145 | 620 | |||
Total equity | 1,209,148 | 1,070,134 | |||
Total liabilities and equity | $ | 1,728,122 | $ | 1,694,201 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(Unaudited) | |||||||
(In thousands) | |||||||
2023 | 2022 | ||||||
Cash flows from operating activities: | |||||||
Net income | 194,734 | $ | 188,811 | ||||
Adjustments to reconcile net income to net cash flows from operating activities: | |||||||
Depreciation and amortization | 52,260 | 50,374 | |||||
Non-cash lease expense | 18,852 | 17,406 | |||||
Share-based compensation | 10,133 | 10,973 | |||||
Other | 10,259 | 7,291 | |||||
Changes in assets and liabilities: | |||||||
Receivables | 19,150 | (44,800 | ) | ||||
Inventory | 48,176 | (101,080 | ) | ||||
Accounts payable and accrued expenses | (23,085 | ) | (12,283 | ) | |||
Operating leases | (18,874 | ) | (17,406 | ) | |||
Income taxes- | (2,902 | ) | (355 | ) | |||
Other | 7,007 | 2,743 | |||||
Net cash flows from operating activities | 315,710 | 101,674 | |||||
Cash flows from investing activities: | |||||||
Additions to property, plant, and equipment | (41,415 | ) | (41,903 | ) | |||
Proceeds from sale of property, plant, and equipment | 1,494 | 6 | |||||
Acquisitions and investments | (34,831 | ) | (1,186 | ) | |||
Other investing activities | 463 | 9 | |||||
Net cash flows from investing activities | (74,289 | ) | (43,074 | ) | |||
Cash flows from financing activities: | |||||||
Net change in debt | (115,529 | ) | 28,936 | ||||
Proceeds from issuance of common stock | 9,193 | 3,859 | |||||
Purchases of common stock | (43,332 | ) | (40,490 | ) | |||
Dividends paid | (41,723 | ) | (36,991 | ) | |||
Deferred payments for acquisitions | (802 | ) | (3,786 | ) | |||
Net cash flows from financing activities | (192,193 | ) | (48,472 | ) | |||
Effect of exchange rate changes on cash | (10,055 | ) | (4,874 | ) | |||
Net change in cash and equivalents | 39,173 | 5,254 | |||||
Cash and equivalents at beginning of period | 45,790 | 40,536 | |||||
Cash and equivalents at end of period | $ | 84,963 | $ | 45,790 | |||
Key Performance Indicators: Net Sales Summary
Net Sales For the Fourth Quarter | ||||||||||||||||||
Latin | Total | |||||||||||||||||
(in millions) | & | America | East & | Pacific | Water | Fueling | Distribution | Other/Elims | Consolidated | |||||||||
Q4 2022 | ( | ) | ||||||||||||||||
Q4 2023 | ( | ) | ||||||||||||||||
Change | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||
% Change | -6 | % | 21 | % | -1 | % | 2 | % | -1 | % | -23 | % | -1 | % | -3 | % | ||
Foreign currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||
% Change | 0 | % | -18 | % | -13 | % | 0 | % | -5 | % | 0 | % | 0 | % | -3 | % | ||
Volume/Price | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
% Change | -6 | % | 39 | % | 12 | % | 2 | % | 4 | % | -23 | % | -1 | % | -23 | % | -1 | % |
Net Sales For the Full Year | ||||||||||||||||||
Latin | Total | |||||||||||||||||
(in millions) | & | America | East & | Pacific | Water | Fueling | Distribution | Other/Elims | Consolidated | |||||||||
FY 2022 | ( | ) | ||||||||||||||||
FY 2023 | ( | ) | ||||||||||||||||
Change | ( | ) | ( | ) | ||||||||||||||
% Change | 4 | % | 9 | % | 3 | % | -6 | % | 4 | % | -11 | % | 1 | % | 1 | % | ||
Foreign currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||
% Change | 0 | % | -14 | % | -12 | % | -4 | % | -5 | % | 0 | % | 0 | % | -3 | % | ||
Volume/Price | ( | ) | ( | ) | ||||||||||||||
% Change | 5 | % | 23 | % | 15 | % | -3 | % | 9 | % | -11 | % | 1 | % | -7 | % | 4 | % |
Key Performance Indicators: Operating Income and Margin Summary
Operating Income and Margins | ||||||||||
(in millions) | For the Fourth Quarter 2023 | |||||||||
Water | Fueling | Distribution | Other/Elims | Consolidated | ||||||
Operating Income / (Loss) | $ | 44.1 | $ | 19.4 | $ | 1.0 | $ | (13.7) | $ | 50.8 |
% Operating Income To | 15.8% | 29.5% | 0.7% | 10.7% | ||||||
Operating Income and Margins | ||||||||||
(in millions) | For the Fourth Quarter 2022 | |||||||||
Water | Fueling | Distribution | Other/Elims | Consolidated | ||||||
Operating Income / (Loss) | $ | 44.6 | $ | 24.3 | $ | 2.9 | $ | (15.6) | $ | 56.2 |
% Operating Income To | 15.9% | 28.4% | 1.9% | 11.5% | ||||||
Operating Income and Margins | ||||||||||
(in millions) | For the Full Year of 2023 | |||||||||
Water | Fueling | Distribution | Other/Elims | Consolidated | ||||||
Operating Income / (Loss) | $ | 196.6 | $ | 92.7 | $ | 34.3 | $ | (61.2) | $ | 262.4 |
% Operating Income To | 16.3% | 31.3% | 5.1% | 12.7% | ||||||
Operating Income and Margins | ||||||||||
(in millions) | For the Full Year of 2022 | |||||||||
Water | Fueling | Distribution | Other/Elims | Consolidated | ||||||
Operating Income / (Loss) | $ | 172.3 | $ | 96.8 | $ | 54.5 | $ | (66.4) | $ | 257.2 |
% Operating Income To | 14.9% | 29.0% | 8.2% | 12.6% | ||||||
Source:
2024 GlobeNewswire, Inc., source