Franklin Electric Reports Third Quarter 2025 Results

Rhea-AI Summary

Franklin Electric (NASDAQ:FELE) reported Q3 2025 consolidated net sales of $581.7M, up 9% year-over-year, with segment gains of Water +11%, Energy +15% and Distribution +3%. Operating income rose to $85.1M (+16%) and operating margin was 14.6%. GAAP diluted EPS was $0.37 while adjusted diluted EPS was $1.30, up 11% from prior year.

The company recorded a $55.3M pre-tax pension settlement loss (about $41.7M after tax), which reduced GAAP EPS by approximately $0.93. Franklin maintained its full‑year 2025 sales guidance of $2.09B–$2.15B and EPS guidance of $4.00–$4.20 excluding the pension termination impact.

Positive

• Consolidated sales +9% to $581.7M in Q3 2025
• Operating income +16% to $85.1M; margin 14.6%
• Energy segment sales +15% year-over-year
• Adjusted diluted EPS $1.30, up 11% versus prior year
• Maintained full‑year 2025 guidance: $2.09B–$2.15B sales

Negative

• Pension settlement loss $55.3M pre-tax (~$41.7M after tax)
• GAAP diluted EPS fell to $0.37 from $1.17 in Q3 2024 (-68%)
• Cash and cash equivalents down to $102.9M from $220.5M at year‑end
• Nine‑month operating cash flow declined to $134.7M from $151.1M

Insights

Equity Analyst

Sales and operating profit rose, adjusted EPS grew, but a large pension settlement drove a GAAP EPS hit this quarter.

Consolidated net sales increased to $581.7 million, up 9%, with all segments contributing: Water Systems 11%, Energy Systems 15%, and Distribution 3%. Operating income rose to $85.1 million with a margin of 14.6%, reflecting higher volumes and realized pricing, and adjusted diluted EPS improved to $1.30, an 11% increase year‑over‑year.

Results include a $55.3 million pre‑tax pension settlement charge (about $41.7 million net of tax) that reduced GAAP diluted EPS to $0.37 versus $1.17 last year; the company reports the pension termination added approximately $0.93 of EPS impact. Management maintained full‑year sales and EPS guidance midpoint for fiscal 2025 excluding the pension termination.

Key dependencies and near‑term items to watch include realized benefits from recent acquisitions driving Water Systems growth, cash flow effects from the pension settlement and acquisitions (note inventories and receivables increases), and integration progress on the expanded manufacturing footprint; monitor quarterly operating cash flow and any guidance updates over the next quarter.

Third Quarter 2025 Highlights

• Consolidated net sales of $581.7 million, an increase of 9% to the prior year
• Net sales increased across all three segments; 11% in Water Systems, 15% in Energy Systems, and 3% in Distribution
• Operating income was $85.1 million, an increase of 16% to the prior year, with operating margin of 14.6%
• The company terminated its US Pension Plan for a pre-tax settlement charge of $55.3 million ($41.7 million net of tax) and an EPS impact of approximately $0.93 per share net of tax
• GAAP fully diluted earnings per share (EPS) was $0.37
  
  

FORT WAYNE, Ind., Oct. 28, 2025 (GLOBE NEWSWIRE) -- Franklin Electric Co., Inc. today announced its third quarter financial results for fiscal year 2025.

Third quarter 2025 net sales were $581.7 million compared to third quarter 2024 net sales of $531.4 million. Third quarter 2025 operating income was $85.1 million, compared to third quarter 2024 operating income of $73.5 million. Third quarter 2025 diluted EPS was $0.37, compared to third quarter 2024 EPS of $1.17. Third quarter 2025 adjusted diluted EPS was $1.30, up $0.13 or 11 percent, compared to third quarter 2024.  

“Our team’s consistent execution drove third quarter results in line with our expectations, reflecting solid growth across the business. Operating performance was supported by both higher volumes and effective pricing initiatives. In addition, we continue to make progress on our strategic initiatives, including the expansion of our global manufacturing footprint in several key markets, which positions us well to more efficiently serve our customers and capture new growth opportunities,” commented Joe Ruzynski, Franklin Electric’s CEO.

“While we continue to watch the macroeconomic environment closely, order activity remains healthy, giving us confidence in our outlook. As we close out the year, we remain focused on executing pricing discipline and cost control, while maintaining a balanced capital allocation approach to drive value for our shareholders,” concluded Mr. Ruzynski.

Segment Summaries

Water Systems net sales were $336.6 million in the third quarter, an increase of $34.4 million or 11 percent compared to the third quarter of 2024. Results were driven by the incremental sales impact of recent acquisitions, as well as organic volume and price realization. Water Systems operating income in the third quarter of 2025 was $60.2 million. Third quarter 2024 Water Systems operating income was $52.8 million.

Distribution net sales were $197.3 million, an increase of $6.5 million or 3 percent compared to the third quarter of 2024. Sales increases were driven by higher volumes and price realization. The Distribution segment operating income in the third quarter 2025 was $16.3 million. Third quarter 2024 Distribution operating income was $12.2 million.

Energy Systems net sales were $80.0 million in the third quarter 2025, an increase of $10.3 million or 15 percent compared to the third quarter 2024. Sales increases were driven by higher volumes and price realization. Energy Systems operating income in the third quarter of 2025 was $25.4 million. Third quarter 2024 Energy Systems operating income was $24.1 million.

Cash Flow

Net cash flows from operating activities through the nine months of 2025 were $134.7 million versus $151.1 million in the same period in 2024.

2025 Guidance

The Company is maintaining the midpoint of 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 $4.00 to $4.20 without the impact of the pension termination.

Earnings Conference Call

A conference call to review earnings and other developments in the business will commence at 9:00 am ET. The third 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/apav9spr

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/BIf59e8648a1fd4ca6975c13e36b5bb68a

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 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, October 28, 2025, through 9:00 am ET on Tuesday, November 4, 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.

Note Regarding Non-GAAP Financial Measures

The company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). Management believes that the non-GAAP financial measure Adjusted Diluted EPS provides additional meaningful information regarding the company’s performance and financial strength. Non-GAAP financial measures should be viewed in addition to and not as an alternative for the company’s reported results prepared in accordance with GAAP. In addition, not all companies use identical calculations for Adjusted Diluted EPS; therefore, Adjusted Diluted EPS included in this release may not be comparable to similarly titled measures of other companies.

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)
	Third Quarter Ended								Nine Months Ended
	September 30, 2025				September 30, 2024				September 30, 2025				September 30, 2024
Net sales	$	581,714			$	531,438			$	1,624,395			$	1,535,596
Cost of sales		373,010				341,775				1,039,962				982,556
Gross profit		208,704				189,663				584,433				553,040
Selling, general, and administrative expenses		123,474				115,998				366,638				352,290
Restructuring expense		112				139				435				139
Operating income		85,118				73,526				217,360				200,611
Interest expense		(3,496	)			(1,556	)			(8,100	)			(4,980	)
Other income (expense), net		(165	)			(181	)			514				709
Foreign exchange income (expense), net		(2,673	)			88				(8,514	)			(5,228	)
Pension settlement loss		(55,251	)			-				(55,251	)			-
Income before income taxes		23,533				71,877				146,009				191,112
Income tax expense		6,329				16,983				36,868				43,795
Net income	$	17,204			$	54,894			$	109,141			$	147,317
Less: Net income attributable to noncontrolling interests		(466	)			(298	)			(1,301	)			(663	)
Net income attributable to Franklin Electric Co., Inc.	$	16,738			$	54,596			$	107,840			$	146,654
Earnings per share:
Basic	$	0.37			$	1.19			$	2.38			$	3.18
Diluted	$	0.37			$	1.17			$	2.35			$	3.14

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
	September 30, 2025				December 31, 2024
ASSETS
Cash and cash equivalents	$	102,927			$	220,540
Receivables (net)		291,178				226,826
Inventories		569,180				483,875
Other current assets		53,470				32,950
Total current assets		1,016,755				964,191
Property, plant, and equipment, net		245,315				223,566
Lease right-of-use assets, net		66,891				62,637
Goodwill and other assets		668,415				570,212
Total assets	$	1,997,376			$	1,820,606
LIABILITIES AND EQUITY
Accounts payable	$	185,775			$	157,046
Accrued expenses and other current liabilities		126,164				139,989
Current lease liability		19,781				18,878
Current maturities of long-term debt and short-term borrowings		69,074				117,814
Total current liabilities		400,794				433,727
Long-term debt		135,230				11,622
Long-term lease liability		46,632				43,304
Deferred income taxes		32,425				10,193
Employee benefit plans		31,672				29,808
Other long-term liabilities		27,577				22,118
Redeemable noncontrolling interest		1,644				1,224
Total equity		1,321,402				1,268,610
Total liabilities and equity	$	1,997,376			$	1,820,606

FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Nine Months Ended
(In thousands)
	September 30, 2025				September 30, 2024
Cash flows from operating activities:
Net income	$	109,141			$	147,317
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization		46,258				41,825
Pension settlement loss, net of tax		41,693				-
Non-cash lease expense		16,279				15,223
Share-based compensation		10,341				10,127
Other		4,188				5,178
Changes in assets and liabilities:
Receivables		(34,660	)			(51,440	)
Inventory		(45,036	)			(18,760	)
Accounts payable and accrued expenses		873				17,218
Operating leases		(16,300	)			(15,700	)
Income taxes-U.S. Tax Cuts and Jobs Act		(4,837	)			(3,870	)
Other		6,747				3,968
Net cash flows from operating activities		134,687				151,086
Cash flows from investing activities:
Additions to property, plant, and equipment		(29,820	)			(28,897	)
Proceeds from sale of property, plant, and equipment		2,578				704
Acquisitions and investments		(109,948	)			(1,151	)
Other investing activities		73				37
Net cash flows from investing activities		(137,117	)			(29,307	)
Cash flows from financing activities:
Net change in debt		55,721				(12,477	)
Payment of debt issuance costs		(974	)			-
Proceeds from issuance of common stock		3,991				5,269
Purchases of common stock		(129,415	)			(56,989	)
Dividends paid		(37,184	)			(35,442	)
Deferred payments for acquisitions		(4,300	)			(348	)
Net cash flows from financing activities		(112,161	)			(99,987	)
Effect of exchange rate changes on cash and cash equivalents		(3,022	)			(482	)
Net change in cash and cash equivalents		(117,613	)			21,310
Cash and cash equivalents at beginning of period		220,540				84,963
Cash and cash equivalents at end of period	$	102,927			$	106,273

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
Q3 2024	$183.6		$43.5		$53.4		$21.7		$302.2		$69.7		$190.8		($31.3	)	$531.4
Q3 2025	$200.6		$55.4		$57.5		$23.1		$336.6		$80.0		$197.3		($32.2	)	$581.7
Change	$17.0		$11.9		$4.1		$1.4		$34.4		$10.3		$6.5		($0.9	)	$50.3
% Change	9	%	27	%	8	%	6	%	11	%	15	%	3	%			9	%
Foreign currency translation*	($0.1	)	$0.7		$0.7		($0.4	)	$0.9		$0.1		$0.0				$1.0
% Change	0	%	2	%	1	%	-2	%	0	%	0	%	0	%			0	%
Acquisitions	$0.9		$12.3		$0.0		$3.0		$16.2		$0.0		$0.0				$16.2
% Change	0	%	28	%	0	%	14	%	5	%	0	%	0	%			3	%
Volume/Price	$16.2		($1.1	)	$3.4		($1.2	)	$17.3		$10.2		$6.5		($0.9	)	$33.1
% Change	9	%	-3	%	6	%	-6	%	6	%	15	%	3	%	3	%	6	%
*The Company has presented local currency price increases used to offset currency devaluation in the Argentina and Turkey hyperinflationary 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 Third Quarter 2025
		Water			Energy			Distribution			Other/Elims			Consolidated
Operating Income / (Loss)		$	60.2		$	25.4		$	16.3		$	(16.8	)	$	85.1
% Operating Income To Net Sales			17.9	%		31.8	%		8.3	%					14.6	%
Operating Income and Margins
(in millions)		For the Third Quarter 2024
		Water			Energy			Distribution			Other/Elims			Consolidated
Operating Income / (Loss)		$	52.8		$	24.1		$	12.2		$	(15.6	)	$	73.5
% Operating Income To Net Sales			17.5	%		34.6	%		6.4	%					13.8	%

		For the Third Quarter							For the First nine months of
		2025		2024		Change			2025		2024		Change
Diluted Earnings per Share "EPS" (as reported - US GAAP)		$	0.37	$	1.17	-68	%		$	2.35	$	3.14	-25	%
Pension Settlement Loss		$	0.93	$	-				$	0.93	$	-
Adjusted Diluted EPS (non-GAAP)		$	1.30	$	1.17	11	%		$	3.28	$	3.14	4	%

FAQ

What were Franklin Electric (FELE) third quarter 2025 net sales and year-over-year change?

Franklin Electric reported Q3 2025 net sales of $581.7M, a 9% increase versus Q3 2024.

How did the pension termination affect Franklin Electric (FELE) Q3 2025 EPS?

The company recorded a $55.3M pre-tax pension settlement loss (about $41.7M after tax), which reduced GAAP EPS by approximately $0.93.

What was Franklin Electric (FELE) Q3 2025 operating income and margin?

Q3 2025 operating income was $85.1M with an operating margin of 14.6%.

Did Franklin Electric (FELE) change its full‑year 2025 guidance after Q3 results?

No; the company maintained full‑year 2025 sales guidance of $2.09B–$2.15B and EPS guidance of $4.00–$4.20 excluding the pension termination impact.

Which Franklin Electric (FELE) segments drove Q3 2025 revenue growth?

Revenue growth was broad‑based: Water +11%, Energy +15%, and Distribution +3% year‑over‑year.