Franklin Electric Reports Second Quarter 2025 Results

Rhea-AI Summary

Franklin Electric (NASDAQ:FELE) reported strong Q2 2025 results with net sales of $587.4 million, up 8% year-over-year. The company achieved growth across all segments, with Water Systems up 8%, Energy Systems up 6%, and Distribution up 5%. Operating income increased 11% to $88.1 million, with a 15.0% operating margin.

Key financial metrics include EPS of $1.31, compared to $1.26 in Q2 2024. The company maintained its full-year 2025 guidance with sales expected between $2.09-$2.15 billion and EPS of $3.95-$4.25. A planned US Pension Plan termination in Q3 is expected to have a non-cash EPS impact of approximately $1.00 per share, not included in current guidance.

Positive

• Net sales increased 8% to $587.4 million across all segments
• Operating income grew 11% to $88.1 million with improved margins
• Record sales achieved in Water and Distribution segments
• Record operating income and margin performance in Energy segment
• Healthy backlog and positive order trends reported

Negative

• Operating cash flow declined to $32.0 million from $35.0 million year-over-year
• Foreign exchange expense increased significantly to $4.5 million from $436,000
• Water Systems operating income decreased slightly to $61.8 million from $62.3 million
• Upcoming pension plan termination will result in $1.00 per share non-cash impact

Insights

Financial Analyst

Franklin Electric delivered solid Q2 2025 with 8% revenue growth and 11% operating income growth across all segments.

Franklin Electric reported strong Q2 2025 financial results with consolidated net sales of $587.4 million, representing an 8% increase year-over-year. The company demonstrated growth across all three business segments, with Water Systems up 8%, Energy Systems up 6%, and Distribution up 5%.

Operating income reached $88.1 million, increasing 11% compared to the prior year, with operating margin expanding to 15.0% from 14.6%. This margin improvement reflects successful implementation of pricing and productivity initiatives. Diluted EPS came in at $1.31, up from $1.26 in Q2 2024.

Looking at segment performance, Water Systems delivered $340.8 million in sales, benefiting from both acquisitions and organic growth through volume and pricing, though operating income slightly decreased to $61.8 million from $62.3 million. The Distribution segment showed impressive profit improvement, with operating income jumping to $16.1 million from $9.8 million on sales of $200.0 million. Energy Systems achieved the highest operating margin at 37.5%, generating $29.1 million in operating income on $77.5 million in sales.

The company's balance sheet shows $104.6 million in cash and cash equivalents, down from $220.5 million at year-end 2024, partly due to $109.7 million spent on acquisitions and $129.3 million on share repurchases. Operating cash flow for the first half of 2025 was $32.0 million, slightly down from $35.0 million in the same period of 2024.

Management maintained its full-year 2025 guidance, projecting sales between $2.09 billion and $2.15 billion, and EPS between $3.95 and $4.25. The company did note that a planned U.S. Pension Plan termination in Q3 will have a non-cash EPS impact of approximately $1.00 per share, which is not included in the current guidance.

The results demonstrate Franklin Electric's operational strength and ability to grow despite market uncertainties. The company's capital allocation strategy includes both acquisitions for growth and returning capital to shareholders through dividends and share repurchases.

Second Quarter 2025 Highlights

• Consolidated net sales of $587.4 million, an increase of 8% to the prior year
• Net sales increased across all three segments; 8% in Water Systems, 6% in Energy Systems, and 5% in Distribution
• Operating income was $88.1 million, an increase of 11% to the prior year, with operating margin of 15.0%
• GAAP fully diluted earnings per share (EPS) was $1.31

FORT WAYNE, Ind., July 29, 2025 (GLOBE NEWSWIRE) -- Franklin Electric Co., Inc. today announced its second quarter financial results for fiscal year 2025.

Second quarter 2025 net sales were $587.4 million compared to second quarter 2024 net sales of $543.3 million. Second quarter 2025 operating income was $88.1 million, compared to second quarter 2024 operating income of $79.1 million. Second quarter 2025 EPS was $1.31, compared to second quarter 2024 EPS of $1.26.

“We delivered strong results during the second quarter, marked by solid execution and continued momentum across our portfolio. Our teams performed exceptionally well, driving record sales in both our Water and Distribution segments, along with record operating income and margin performance in our Energy segment. We also achieved meaningful year-over-year improvement in total company operating margins, reflecting the effectiveness of our pricing and productivity initiatives. We further demonstrated our commitment to disciplined capital allocation by returning capital to shareholders during the quarter through our dividend and share repurchases,” commented Joe Ruzynski, Franklin Electric’s CEO.

“In spite of some market uncertainty, we are entering the second half of the year with a healthy backlog and continued positive order trends, which reinforce our confidence in sustained performance in the remainder of 2025. Our strong channel positioning and operational discipline enable us to adapt quickly to changing market dynamics. We are well positioned to capitalize on end market demand and deliver long-term value for our shareholders,” concluded Mr. Ruzynski.

Segment Summaries

Water Systems net sales were $340.8 million in the second quarter, an increase of $25.2 million or 8 percent compared to the second quarter of 2024. Results were driven by the incremental sales impact of recent acquisitions, as well as volume and price realization. These sales increases were partially offset by the negative impact of foreign currency translation. Water Systems operating income in the second quarter of 2025 was $61.8 million. Second quarter 2024 Water Systems operating income was $62.3 million.

Distribution net sales were $200.0 million, an increase of $9.5 million or 5 percent compared to the second quarter of 2024. Sales increases were driven by higher volumes. The Distribution segment operating income in the second quarter 2025 was $16.1 million. Second quarter 2024 Distribution operating income was $9.8 million.

Energy Systems net sales were $77.5 million in the second quarter 2025, an increase of $4.4 million or 6 percent compared to the second quarter 2024. Sales increases were driven by higher volumes and price realization. Energy Systems operating income in the second quarter of 2025 was $29.1 million. Second quarter 2024 Energy Systems operating income was $26.0 million.

Cash Flow

Net cash flows from operating activities through the first six months of 2025 were $32.0 million versus $35.0 million in the same period in 2024.

2025 Guidance

The Company is maintaining its guidance for full year 2025 sales to be in the range of $2.09 billion to $2.15 billion and full year 2025 EPS to be in the range of $3.95 to $4.25. During the third quarter the company expects to terminate its US Pension Plan which will have a non-cash EPS impact of approximately $1.00 per share. This impact is not included in the current guidance.

Earnings Conference Call

A conference call to review earnings and other developments in the business will commence at 9:00 am ET. The second quarter 2025 earnings call will be available via a live webcast. The webcast will be available in a listen only mode by going to:

https://edge.media-server.com/mmc/p/eo2jvajq

For those interested in participating in the question-and-answer portion of the call, please register for the call at the link below.

https://register-conf.media-server.com/register/BI1fbffb8f4cf04503b3b3612e494f18a2

All registrants will receive dial-in information and a PIN allowing them to access the live call. It is recommended that you join 10 minutes prior to the event’s start (although you may register and dial in at any time during the call).

A replay of the conference call will be available from Tuesday, July 29, 2025, through 9:00 am ET on Tuesday, August 5, 2025, by visiting the listen-only webcast link above.

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, changes in tariffs or the impact of any such changes on the Company’s financial results, the Company’s accounting policies, future trends, epidemics and pandemics, and other risks which are detailed in the Company’s Securities and Exchange Commission filings, included in Item 1A of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2024, Exhibit 99.1 attached thereto and in Item 1A of Part II of the Company’s Quarterly Reports on Form 10-Q. These risks and uncertainties may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements made herein are based on information currently available, and the Company assumes no obligation to update any forward-looking statements.

About Franklin Electric

Franklin Electric is a global leader in the production and marketing of systems and components for the movement of water and energy. Recognized as a technical leader in its products and services, Franklin Electric serves customers around the world in residential, commercial, agricultural, industrial, municipal, and fueling applications. Franklin Electric is proud to be named in Newsweek’s lists of America’s Most Responsible Companies and Most Trustworthy Companies for 2024 and America’s Climate Leaders 2024 by USA Today.

Franklin Electric Contact:
Jennifer Wolfenbarger
Franklin Electric Co., Inc.
InvestorRelations@fele.com

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
	Second Quarter Ended								Six Months Ended
	June 30, 2025				June 30, 2024				June 30, 2025				June 30, 2024
Net sales	$	587,434			$	543,258			$	1,042,681			$	1,004,158
Cost of sales		375,608				343,461				666,952				640,781
Gross profit		211,826				199,797				375,729				363,377
Selling, general, and administrative expenses		123,521				120,648				243,164				236,292
Restructuring expense		164				—				323				—
Operating income		88,141				79,149				132,242				127,085
Interest expense		(2,805	)			(1,976	)			(4,604	)			(3,424	)
Other income (expense), net		(164	)			184				679				890
Foreign exchange expense, net		(4,548	)			(436	)			(5,841	)			(5,316	)
Income before income taxes		80,624				76,921				122,476				119,235
Income tax expense		20,061				17,590				30,539				26,812
Net income	$	60,563			$	59,331			$	91,937			$	92,423
Less: Net income attributable to noncontrolling interests		(423	)			(232	)			(835	)			(365	)
Net income attributable to Franklin Electric Co., Inc.	$	60,140			$	59,099			$	91,102			$	92,058
Earnings per share:
Basic	$	1.32			$	1.28			$	1.99			$	1.99
Diluted	$	1.31			$	1.26			$	1.97			$	1.97

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
	June 30, 2025				December 31, 2024
ASSETS
Cash and cash equivalents	$	104,592			$	220,540
Receivables (net)		315,250				226,826
Inventories		573,597				483,875
Other current assets		43,001				32,950
Total current assets		1,036,440				964,191
Property, plant, and equipment, net		241,232				223,566
Lease right-of-use assets, net		61,940				62,637
Goodwill and other assets		678,300				570,212
Total assets	$	2,017,912			$	1,820,606
LIABILITIES AND EQUITY
Accounts payable	$	206,878			$	157,046
Accrued expenses and other current liabilities		107,610				139,989
Current lease liability		19,445				18,878
Current maturities of long-term debt and short-term borrowings		270,184				117,814
Total current liabilities		604,117				433,727
Long-term debt		14,511				11,622
Long-term lease liability		42,197				43,304
Deferred income taxes		32,989				10,193
Employee benefit plans		31,524				29,808
Other long-term liabilities		26,001				22,118
Redeemable noncontrolling interest		1,511				1,224
Total equity		1,265,062				1,268,610
Total liabilities and equity	$	2,017,912			$	1,820,606

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Six Months Ended
(In thousands)
	June 30, 2025				June 30, 2024
Cash flows from operating activities:
Net income	$	91,937			$	92,423
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization		30,203				27,690
Non-cash lease expense		10,674				10,105
Share-based compensation		7,969				7,015
Other		4,509				4,315
Changes in assets and liabilities:
Receivables		(61,458	)			(82,828	)
Inventory		(49,215	)			(23,982	)
Accounts payable and accrued expenses		11,514				13,171
Operating leases		(10,513	)			(10,314	)
Income taxes-U.S. Tax Cuts and Jobs Act		(4,837	)			(3,870	)
Other		1,214				1,278
Net cash flows from operating activities		31,997				35,003
Cash flows from investing activities:
Additions to property, plant, and equipment		(18,415	)			(19,445	)
Proceeds from sale of property, plant, and equipment		727				418
Acquisitions and investments		(109,687	)			(1,151	)
Other investing activities		54				21
Net cash flows from investing activities		(127,321	)			(20,157	)
Cash flows from financing activities:
Net change in debt		134,850				29,183
Payment of debt issuance costs		(974	)			-
Proceeds from issuance of common stock		2,954				4,302
Purchases of common stock		(129,321	)			(47,895	)
Dividends paid		(25,321	)			(23,980	)
Deferred payments for acquisitions		(4,300	)			(348	)
Net cash flows from financing activities		(22,112	)			(38,738	)
Effect of exchange rate changes on cash and cash equivalents		1,488				(2,967	)
Net change in cash and cash equivalents		(115,948	)			(26,859	)
Cash and cash equivalents at beginning of period		220,540				84,963
Cash and cash equivalents at end of period	$	104,592			$	58,104

Key Performance Indicators: Net Sales Summary

	Net Sales
	United States			Latin			Europe, Middle			Asia			Total
(in millions)	& Canada			America			East & Africa			Pacific			Water			Energy			Distribution			Other/Elims			Consolidated
Q2 2024	$193.6			$41.8			$56.0			$24.2			$315.6			$73.1			$190.5			($35.9		)	$543.3
Q2 2025	$203.8			$52.8			$55.7			$28.5			$340.8			$77.5			$200.0			($30.9		)	$587.4
Change	$10.2			$11.0			($0.3		)	$4.3			$25.2			$4.4			$9.5			$5.0			$44.1
% Change		5	%		26	%		-1	%		18	%		8	%		6	%		5	%					8	%
Foreign currency translation, net *	($0.2		)	($2.1		)	$1.2			($0.3		)	($1.4		)	$0.0			$0.0						($1.4		)
% Change		0	%		-5	%		2	%		-1	%		0	%		0	%		0	%					0	%
Acquisitions	$1.4			$11.5			$0.0			$2.4			$15.3			$0.0			$0.0						$15.3
% Change		1	%		28	%		0	%		10	%		5	%		0	%		0	%					3	%
Volume/Price	$9.0			$1.6			($1.5		)	$2.2			$11.3			$4.4			$9.5			$5.0			$30.2
% Change		5	%		4	%		-3	%		9	%		4	%		6	%		5	%		-14	%		6	%

*The Company has presented local currency price increases used to offset currency devaluation in the Argentina and Turkey highly inflationary economies within the foreign currency translation, net row above.

Key Performance Indicators: Operating Income and Margin Summary

Operating Income and Margins
(in millions)	For the Second Quarter 2025
	Water			Energy			Distribution			Other/Elims			Consolidated
Operating Income / (Loss)	$	61.8		$	29.1		$	16.1		$	(18.9	)	$	88.1
% Operating Income To Net Sales		18.1	%		37.5	%		8.1	%					15.0	%
Operating Income and Margins
(in millions)	For the Second Quarter 2024
	Water			Energy			Distribution			Other/Elims			Consolidated
Operating Income / (Loss)	$	62.3		$	26.0		$	9.8		$	(19.0	)	$	79.1
% Operating Income To Net Sales		19.7	%		35.6	%		5.1	%					14.6	%

FAQ

What were Franklin Electric's (FELE) Q2 2025 earnings results?

Franklin Electric reported Q2 2025 earnings per share of $1.31, up from $1.26 in Q2 2024, with net sales increasing 8% to $587.4 million.

What is FELE's revenue guidance for full year 2025?

Franklin Electric maintains its full-year 2025 revenue guidance of $2.09-$2.15 billion with EPS guidance of $3.95-$4.25.

How did Franklin Electric's different segments perform in Q2 2025?

Water Systems sales grew 8% to $340.8 million, Distribution increased 5% to $200.0 million, and Energy Systems rose 6% to $77.5 million.

What impact will the pension plan termination have on FELE's earnings?

The planned US Pension Plan termination in Q3 2025 is expected to have a non-cash EPS impact of approximately $1.00 per share, which is not included in current guidance.

How much cash does Franklin Electric have as of Q2 2025?

Franklin Electric reported cash and cash equivalents of $104.6 million as of June 30, 2025, down from $220.5 million at the end of 2024.