# FRANKLIN ELECTRIC CO INC (FELE) Informational only - not investment advice. CIK: 0000038725 SIC: 3621 Motors & Generators SIC breadcrumb: [Manufacturing](/division/D/) > [Electronic And Other Electrical Equipment And Components, Except Computer Equipment](/major-group/36/) > [SIC 3621 Motors & Generators](/industry/3621/) Latest 10-K filed: 2026-02-20 SEC page: https://www.sec.gov/edgar/browse/?CIK=38725 Filing source: https://www.sec.gov/Archives/edgar/data/38725/000003872526000009/fele-20251231.htm ## At a glance FY2025 · period end 2025-12-31 · filed 2026-02-20 · accession 0000038725-26-000009 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000038725.json | Metric | Value | FY | Provenance | | --- | ---: | ---: | --- | | Revenue | 2,131,250,000 USD | 2025 | verified | | Net income | 147,090,000 USD | 2025 | verified | | Assets | 1,944,385,000 USD | 2025 | verified | | Free cash flow | 193,541,000 USD | 2025 | computed | | Net margin | 6.90% | 2025 | computed | | Operating margin | 12.62% | 2025 | computed | | Revenue YoY | +5.44% | 2025 | computed | | ROE | 11.12% | 2025 | computed | Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity. No market price, no rating, no forecast on this site. Not investment advice. ### Peer percentile fingerprint | Ratio | FELE | Peer median | Percentile | N | | --- | ---: | ---: | ---: | ---: | | Net margin | 6.9% | 4.4% | 57 | 135 | | Operating margin | 12.6% | 4.4% | 70 | 128 | | Revenue growth | 5.4% | 10.2% | 37 | 142 | | FCF margin | 9.1% | 8.0% | 53 | 138 | | ROE | 11.1% | 5.4% | 61 | 136 | | ROA | 7.6% | 2.7% | 72 | 143 | | Liabilities / equity | 0.47 | 0.81 | 34 | 138 | | Current ratio | 2.79 | 2.59 | 59 | 144 | Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC major-group 36 Electronic And Other Electrical Equipment And Components, Except Computer Equipment, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking. ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 2131250000 | USD | 2025 | 2026-02-20 | | Net income | 147090000 | USD | 2025 | 2026-02-20 | | Assets | 1944385000 | USD | 2025 | 2026-02-20 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-20. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000038725.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 949,856,000 | 1,124,909,000 | 1,298,129,000 | 1,314,578,000 | 1,247,331,000 | 1,661,865,000 | 2,043,711,000 | 2,065,133,000 | 2,021,341,000 | 2,131,250,000 | | Net income | 78,745,000 | 78,180,000 | 105,877,000 | 95,483,000 | 100,460,000 | 153,860,000 | 187,332,000 | 193,272,000 | 180,309,000 | 147,090,000 | | Operating income | 112,070,000 | 107,228,000 | 131,994,000 | 127,133,000 | 130,511,000 | 189,193,000 | 257,189,000 | 262,441,000 | 243,645,000 | 268,978,000 | | Gross profit | 331,406,000 | 376,982,000 | 432,366,000 | 428,103,000 | 433,139,000 | 576,089,000 | 691,435,000 | 697,008,000 | 717,280,000 | 755,925,000 | | Diluted EPS | 1.65 | 1.65 | 2.23 | 2.03 | 2.14 | 3.25 | 3.97 | 4.11 | 3.86 | 3.22 | | Operating cash flow | 115,374,000 | 66,754,000 | 128,435,000 | 177,676,000 | 211,854,000 | 129,763,000 | 101,674,000 | 315,710,000 | 261,353,000 | 238,878,000 | | Capital expenditures | 39,136,000 | 33,484,000 | 22,432,000 | 21,855,000 | 22,856,000 | 30,116,000 | 41,903,000 | 41,415,000 | 41,682,000 | 45,337,000 | | Dividends paid | 19,137,000 | 20,289,000 | 22,612,000 | 27,671,000 | 29,675,000 | 33,398,000 | 36,991,000 | 41,723,000 | 46,876,000 | 49,999,000 | | Share buybacks | 7,422,000 | 3,621,000 | 34,188,000 | 10,741,000 | 19,553,000 | 25,949,000 | 40,490,000 | 43,332,000 | 61,041,000 | 165,623,000 | | Assets | 1,039,900,000 | 1,185,400,000 | 1,182,400,000 | 1,194,700,000 | 1,272,300,000 | 1,575,200,000 | 1,694,200,000 | 1,728,100,000 | 1,820,606,000 | 1,944,385,000 | | Stockholders' equity | 613,445,000 | 700,657,000 | 733,872,000 | 796,545,000 | 847,833,000 | 946,501,000 | 1,067,858,000 | 1,206,722,000 | 1,266,099,000 | 1,322,579,000 | | Cash and cash equivalents | 104,331,000 | 67,233,000 | 59,173,000 | 64,405,000 | 130,787,000 | 40,536,000 | 45,790,000 | 84,963,000 | 220,540,000 | 99,662,000 | | Free cash flow | 76,238,000 | 33,270,000 | 106,003,000 | 155,821,000 | 188,998,000 | 99,647,000 | 59,771,000 | 274,295,000 | 219,671,000 | 193,541,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | 8.29% | 6.95% | 8.16% | 7.26% | 8.05% | 9.26% | 9.17% | 9.36% | 8.92% | 6.90% | | Operating margin | 11.80% | 9.53% | 10.17% | 9.67% | 10.46% | 11.38% | 12.58% | 12.71% | 12.05% | 12.62% | | Return on equity | 12.84% | 11.16% | 14.43% | 11.99% | 11.85% | 16.26% | 17.54% | 16.02% | 14.24% | 11.12% | | Return on assets | 7.57% | 6.60% | 8.95% | 7.99% | 7.90% | 9.77% | 11.06% | 11.18% | 9.90% | 7.56% | | Liabilities / equity | 0.70 | 0.69 | 0.61 | 0.50 | 0.50 | 0.66 | 0.59 | 0.43 | 0.44 | 0.47 | | Current ratio | 3.07 | 2.40 | 2.27 | 3.05 | 3.04 | 1.83 | 2.11 | 2.97 | 2.22 | 2.79 | ## As-reported value updates 1 tracked difference above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period. Ledger: /company/FELE/revisions/ ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-29. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000038725.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | 1.26 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 1.24 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 0.79 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 569,181,000 | 59,600,000 | 1.27 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 538,431,000 | 57,798,000 | 1.23 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 472,970,000 | 38,549,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 460,900,000 | 32,959,000 | 0.70 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 543,258,000 | 59,099,000 | 1.26 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 531,438,000 | 54,596,000 | 1.17 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 485,745,000 | 33,655,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 455,247,000 | 30,962,000 | 0.67 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 587,434,000 | 60,140,000 | 1.31 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 581,714,000 | 16,738,000 | 0.37 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 506,855,000 | 39,250,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 500,437,000 | 34,330,000 | 0.77 | reported discrete quarter | ## Filed narrative (10-K & 10-Q) ## Business Verbatim Item 1 Business section from FELE's latest 10-K: [/company/FELE/business/](/company/FELE/business/). ## Risk Factors Verbatim Item 1A Risk Factors from FELE's latest 10-K: [/company/FELE/risk-factors/](/company/FELE/risk-factors/). ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/38725/000003872526000055/fele-20260630.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-07-29 Report date: 2026-06-30 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2025 for management’s discussion and analysis of its financial condition and results of operations. The following is management’s discussion and analysis of the Company's financial condition and results of operations for the second quarter and six months ended June 30, 2026 and 2025. In April of 2026, the Company acquired Benson Pump Corporation (“Benson Pump”). Benson Pump is a professional groundwater distributor in Arkansas and operates within the Distribution segment. In May of 2026, the Company acquired Wood Brothers Industries. Wood Brothers Industries is a water treatment wholesale supplier in Nebraska and operates as a subsidiary of Water Systems. Acquisitions contributed approximately $15.0 million of incremental net sales in the second quarter of 2026. Refer to Note 3 in Item 1 of this Quarterly Report on Form 10-Q for additional information on the Benson Pump and Wood Brothers Industries acquisitions. The impact that the imposition of tariffs and changes to global trade policies will have on the Company's consolidated results of operations is uncertain. The Company expects tariffs on goods imported into the U.S. from Canada, Mexico, and China, and other countries upon which tariffs may be imposed, to continue to be met with retaliatory tariffs from those countries which would impact the Company's consolidated results of operations. The extent and duration of tariffs and the resulting impact on macroeconomic conditions and on the Company's business are uncertain and may depend on various factors, including negotiations between the U.S. and affected countries, retaliation imposed by other countries, tariff exemptions, negative sentiment toward U.S. companies and products, and availability of lower cost inputs that may be sourced domestically. The Company will continue to evaluate the nature and extent of the impact to its business and consolidated results of operations. Second Quarter 2026 vs. 2025 OVERVIEW Net sales in the second quarter and first six months of 2026 increased 6 percent and 8 percent, respectively, as compared to the prior-year periods. The sales increases were due to the incremental sales impact from recent acquisitions, volume and price realization, and the favorable impact of foreign currency translation. The Company's consolidated gross profit was $230.6 million and $405.6 million, respectively, for the second quarter and first six months of 2026, increases of 9 percent and 8 percent, respectively, from the prior-year periods. Diluted earnings per share was $1.46 and $2.23, respectively, for the second quarter and first six months of 2026, increases of $0.15 and $0.26, respectively, from the prior-year periods. RESULTS OF OPERATIONS Net Sales Net sales in the second quarter and first six months of 2026 were $622.9 million and $1.1 billion, respectively, and increased 6 percent and 8 percent, respectively, as compared to the prior-year periods. The sales increase for the second quarter three months was primarily due to incremental sales impact from recent acquisitions of 3 percent, price and volume increases of 2 percent, and the positive impact of foreign exchange rates of 1 percent. The sales increase for the first six months was primarily due to higher sales volumes and price realization of 4 percent, positive impact of foreign exchange rates of 2 percent, and incremental sales impact from recent acquisitions of 2 percent. [[GREPCENT_TABLE]] [["","Net Sales"],["(In millions)","Q2 2026","","Q2 2025","","2026 v 2025"],["Water Systems","$","358.5","","","$","340.8","","","$","17.7"],["Energy Systems","80.2","","","77.5","","","2.7"],["Distribution","221.1","","","200.0","","","21.1"],["Eliminations/Other","(36.9)","","","(30.9)","","","(6.0)"],["Consolidated","$","622.9","","","$","587.4","","","$","35.5"]] [[/GREPCENT_TABLE]] 29 [[GREPCENT_TABLE]] [["","Net Sales"],["(In millions)","YTD June 30, 2026","","YTD June 30, 2025","","2026 v 2025"],["Water Systems","$","676.6","","","$","628.1","","","$","48.5"],["Energy Systems","151.9","","","144.3","","","7.6"],["Distribution","372.0","","","341.9","","","30.1"],["Eliminations/Other","(77.2)","","","(71.6)","","","(5.6)"],["Consolidated","$","1,123.3","","","$","1,042.7","","","$","80.6"]] [[/GREPCENT_TABLE]] Net Sales-Water Systems Water Systems net sales were $358.5 million in the second quarter of 2026, an increase of $17.7 million or 5 percent compared to the second quarter of 2025 net sales of $340.8 million. The sales increase for the second quarter was primarily due to price realization, the positive impact of foreign exchange rates, and the incremental sales impact from recent acquisitions. Water Systems net sales were $676.6 million for the first six months of 2026, an increase of $48.5 million or 8 percent compared to the first six months of 2025 net sales of $628.1 million. The sales increase for the first six months was primarily due to volume increases, price realization, the positive impact of foreign exchange rates, and the incremental sales impact from recent acquisitions. Water Systems net sales in the U.S. and Canada increased 8 percent in the second quarter and 7 percent in the first six months of 2026, as compared to the prior-year periods. In the second quarter of 2026, sales of groundwater pumping equipment increased 12 percent, sales of water treatment products increased 14 percent and sales of all other surface pumping equipment increased 7 percent. These sales increases were partially offset by lower sales of large dewatering equipment of 10 percent compared to 2025. In the first six months of 2026, sales of groundwater pumping equipment increased 8 percent, sales of water treatment products increased 10 percent and sales of all other surface pumping equipment increased 11 percent. These sales increases were partially offset by lower sales of large dewatering equipment of 10 percent compared to 2025. Water Systems net sales in markets outside the U.S. and Canada increased 1 percent in the second quarter and 8 percent in the first six months of 2026, as compared to the prior-year periods. The sales growth in the second quarter and the first six months of 2026 was due to incremental sales impact from recent acquisitions of 1 percent and 4 percent, respectively. Sales increased 5 percent in the second quarter and 6 percent in the first six months of 2026 due to the favorable impact from foreign exchange rates, as compared to prior-year periods. Excluding the impact of foreign currency translation and acquisitions, in both the second quarter and first six months of 2026, the sales growth in the Asia Pacific regions was more than offset by sales declines in the Latin America and European regions. Net Sales-Energy Systems Energy Systems net sales were $80.2 million in the second quarter of 2026, an increase of $2.7 million or 3 percent compared to the second quarter of 2025 net sales of $77.5 million. Energy Systems net sales were $151.9 million for the first six months of 2026, an increase of $7.6 million or 5 percent compared to the first six months of 2025 net sales of $144.3 million. The net sales increase was due to higher sales volumes and price realization. Energy Systems net sales in the U.S. and Canada increased 1 percent in the second quarter and 2 percent in the first six months of 2026, as compared to the prior-year periods. The increase was primarily in fuel management systems and pumping systems. Outside the U.S. and Canada, Energy Systems sales increased 12 percent in the second quarter and 18 percent in the first six months of 2026, as compared to the prior-year periods, due primarily to sales growth in the European and African regions. Net Sales-Distribution Distribution net sales were $221.1 million in the second quarter of 2026, an increase of $21.1 million or 11 percent compared to the second quarter of 2025 net sales of $200.0 million. Distribution net sales were $372.0 million for the first six months of 2026, an increase of $30.1 million or 9 percent compared to the first six months of 2025 net sales of $341.9 million. The net sales increase was due to higher sales volumes and price realization and the incremental sales impact from recent acquisitions. 30 Gross Profit and Expenses Ratios [[GREPCENT_TABLE]] [["","Three Months Ended June 30,"],["(In millions)","2026","","% of Net Sales","","2025","","% of Net Sales"],["Gross Profit","$","230.6","","","37.0","%","","$","211.8","","","36.1","%"],["Selling, General and Administrative Expense","132.1","","","21.2","%","","123.5","","","21.0","%"]] [[/GREPCENT_TABLE]] [[GREPCENT_TABLE]] [["","Six Months Ended June 30,"],["(In millions)","2026","","% of Net Sales","","2025","","% of Net Sales"],["Gross Profit","$","405.6","","","36.1","%","","$","375.7","","","36.0","%"],["Selling, General and Administrative Expense","255.1","","","22.7","%","","243.2","","","23.3","%"]] [[/GREPCENT_TABLE]] Gross Profit The gross profit margin ratio was 37.0 percent and 36.1 percent in the second quarter and first six months of 2026, respectively, and 36.1 percent and 36.0 percent in the second quarter and first six months of 2025, respectively. The gross profit margin was favorably impacted in the second quarter by tariff refunds while the first six months of 2026 was impacted by an unfavorable product and geographic sales mix shift. Selling, General, and Administrative ("SG&A") SG&A expenses were $132.1 million in the second quarter and $255.1 million in the first six months of 2026 compared to $123.5 million in the second quarter and $243.2 million in the first six months of 2025. SG&A expenses increased in the second quarter and first six months of 2026 from the incremental expense impact of recent acquisitions. The SG&A expenses ratio (SG&A as a percentage of net sales) was 21.2 percent and 22.7 percent in the second quarter and first six months of 2026, respectively, and 21.0 percent and 23.3 percent in the second quarter and first six months of 2025, respectively. Legal settlement loss There was a $4.5 million provision for legal settlement recorded in the Energy Systems segment during the second quarter of 2026. Refer to Item 1 Note 7 for more information. Restructuring Expenses There were $0.4 million and $4.3 million in restructuring expenses in the second quarter and first six months of 2026, compared to $0.2 million and $0.3 million restructuring expenses in the second quarter and first six months of 2025. Restructuring expenses were primarily from continued manufacturing realignment activities. Operating Income Operating income in the second quarter and first six months of 2026 was $93.6 million and $141.7 million, respectively, increases of 6 percent and 7 percent, respectively, as compared to the prior-year periods. [[GREPCENT_TABLE]] [["","","Operating income (loss)"],["(In millions)","","Q2 2026","","Q2 2025","","2026 v 2025"],["Water Systems","","$","65.2","","","$","61.8","","","$","3.4"],["Energy Systems","","27.9","","","29.1","","","(1.2)"],["Distribution","","19.7","","","16.1","","","3.6"],["Eliminations/Other","","(19.2)","","","(18.9)","","","(0.3)"],["Consolidated","","$","93.6","","","$","88.1","","","$","5.5"]] [[/GREPCENT_TABLE]] 31 [[GREPCENT_TABLE]] [["","","Operating income (loss)"],["(In millions)","","YTD June 30, 2026","","YTD June 30, 2025","","2026 v 2025"],["Water Systems","","$","109.7","","","$","105.3","","","$","4.4"],["Energy Systems","","52.0","","","51.0","","","1.0"],["Distribution","","22.7","","","18.2","","","4.5"],["Eliminations/Other","","(42.7)","","","(42.3)","","","(0.4)"],["Consolidated","","$","141.7","","","$","132.2","","","$","9.5"]] [[/GREPCENT_TABLE]] Operating Income-Water Systems Water Systems operating income in the second quarter and first six months o [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A (excerpt) Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/38725/000003872526000009/fele-20251231.htm Complete FY 2025 MD&A: /company/FELE/mda/fy2025/ Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high Filing date: 2026-02-20 Report date: 2025-12-31 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Discussion of the year-over-year comparison of changes in the Company's financial condition and results of operation as of and for the fiscal years ended December 31, 2024 and December 31, 2023 can be found in Part II, Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. In the first quarter of 2025, the Company acquired Barnes de Colombia S.A. ("Barnes"), a leading manufacturer and distributor of industrial and commercial pumps based in Colombia. Also in the first quarter of 2025, the Company acquired PumpEng Pty Ltd ("PumpEng"), an Australia-based company that specializes in the design, manufacture and service of submersible pumps for the mining sector. Acquisitions contributed $48.9 million in incremental net sales in 2025. Refer to Note 3 – Acquisitions in the Notes to Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for additional information on the Barnes and PumpEng acquisitions. In 2025, the Company completed the process of settling the Franklin Electric Co,, Inc. Pension Plan and a partial settlement of the Franklin Electric Co. Restoration plan resulting in a pre-tax pension settlement charge of $54.9 million related to actuarial losses previously recorded in Accumulated Other Comprehensive Loss. Refer to Note 10 in Item 8 of this Annual Report on Form 10-K for additional information on the pension settlement charge. 2025 vs. 2024 OVERVIEW Net sales in 2025 were $2.1 billion and increased 5 percent, as compared to the prior year. The sales increases were due to the incremental sales impact from recent acquisitions, price realization and higher volumes. The Company's consolidated gross profit was $755.9 million and $717.3 million, respectively, for 2025 and 2024, and increased 5 percent from the prior year. Diluted earnings per share was $3.22 for 2025, a decrease of $0.64 from the prior year. Diluted earnings per share for 2025 was negatively impacted by the pension settlement charge of $41.5 million net of tax benefit ($54.9 million gross of tax benefit) related to actuarial losses previously recorded in Accumulated Other Comprehensive Loss. Refer to Note 10 in Item 8 of this Annual Report on Form 10-K for additional information on the pension settlement charge. RESULTS OF OPERATIONS Net Sales Net sales in 2025 were $2.1 billion and increased 5 percent compared to the prior year. The sales growth in 2025 was due to incremental sales impact from recent acquisitions of approximately 3 percent, price realization, and favorable volumes. Sales were negatively impacted by changes in foreign exchange rates, principally due to the strengthening of the U.S. Dollar relative to the Argentine Peso, Turkish Lira and Brazilian Real. However, the Company increased prices in the local currency to offset the impact of currency devaluation in the Argentina and Turkey highly inflationary economies. As a result, the net negative impact of foreign currency exchange rates on net sales was less than 1 percent in 2025. [[GREPCENT_TABLE]] [["","Net Sales"],["(In millions)","2025","","2024","","2025 v 2024"],["Water Systems","$","1,256.4","","","$","1,184.0","","","$","72.4"],["Energy Systems","299.0","","","273.7","","","25.3"],["Distribution","700.7","","","685.5","","","15.2"],["Eliminations","(124.8)","","","(121.9)","","","(2.9)"],["Consolidated","$","2,131.3","","","$","2,021.3","","","$","110.0"]] [[/GREPCENT_TABLE]] Net Sales-Water Systems Water Systems net sales increased 6 percent in 2025, as compared to the prior year. The sales growth in 2025 was due to incremental sales impact from recent acquisitions of approximately 4 percent and price realization. Water Systems net sales in the U.S. and Canada increased 3 percent in 2025, as compared to the prior year. In 2025, sales of large dewatering equipment increased 7 percent, sales of water treatment products increased 6 percent, and sales of groundwater pumping equipment increased 1 percent, and sales of all other surface pumping equipment decreased 1 percent compared to 2024. 16 Water Systems net sales in markets outside the U.S. and Canada increased 10 percent in 2025, as compared to the prior year. The sales increase compared to prior year period was primarily due to the incremental sales impact from recent acquisitions. Net Sales-Energy Systems Energy Systems net sales increased 9 percent in 2025, as compared to the prior year. This sales increase was primarily due to price realization and favorable volumes. Energy Systems net sales in the U.S. and Canada increased 8 percent in 2025, as compared to the prior year. The increase was broad based across all major product lines, led by fuel pumping systems. Outside the U.S. and Canada, Energy Systems sales increased 13 percent in 2025, as compared to the prior year, due primarily to sales growth in the Asia Pacific region. Net Sales-Distribution Distribution net sales increased 2 percent in 2025, as compared to the prior year. The Distribution segment sales increased due to higher volumes and price realization. Gross Profit and Expense Ratios [[GREPCENT_TABLE]] [["","Twelve months ended Dec 31,"],["(In Millions)","2025","","% of Net Sales","","2024","","% of Net Sales"],["Gross Profit","$","755.9","","","35.5","%","","$","717.3","","","35.5","%"],["Selling, General and Administrative Expense","486.2","","","22.8","%","","470.1","","","23.3","%"]] [[/GREPCENT_TABLE]] Gross Profit The gross profit margin ratio was 35.5 percent in 2025 and 2024, respectively. Gross profit has remained consistent with prior year primarily due to pricing and volume increases offset by increased costs related to tariffs. Selling, General and Administrative (“SG&A”) SG&A expenses were $486.2 million in 2025 compared to $470.1 million in 2024. SG&A expenses increased in 2025 primarily due to the incremental expense impact from recent acquisitions and higher employee compensation costs. The SG&A expenses ratio was 22.8 percent and 23.3 percent in 2025 and 2024, respectively. Restructuring Expenses There were $0.7 million and $3.5 million in restructuring expenses in 2025 and 2024, respectively. Restructuring expenses were primarily from various manufacturing realignment activities. Operating Income Operating income in 2025 was $268.9 million and $243.6 million in 2024, an increase of 10 percent, as compared to the prior year. [[GREPCENT_TABLE]] [["","","Operating income (loss)"],["(In millions)","","2025","","2024","","2025 v 2024"],["Water Systems","","$","207.2","","","$","197.9","","","$","9.3"],["Energy Systems","","99.1","","","93.6","","","5.5"],["Distribution","","39.8","","","24.3","","","15.5"],["Corporate Expenses and Eliminations","","(77.2)","","","(72.2)","","","(5.0)"],["Consolidated","","$","268.9","","","$","243.6","","","$","25.3"]] [[/GREPCENT_TABLE]] Operating Income-Water Systems Water Systems operating income in 2025 was $207.2 million, an increase of $9.3 million as compared to the prior year. The increase in operating income was primarily due to higher sales. The 2025 operating income margin was 16.5 percent, a decrease of 20 basis points from 16.7 percent in 2024. The decrease in operating income margin was primarily due to incremental expenses associated with recent acquisitions and an unfavorable product and geographic sales mix shift. Operating Income-Energy Systems Energy Systems operating income in 2025 was $99.1 million, an increase of $5.5 million as compared to the prior year. The increase was primarily due to higher sales. The 2025 operating income margin was 33.1 percent, a decrease of 110 basis points 17 from 34.2 percent in 2024. Operating income margin decreased primarily due to higher tariff cost and an unfavorable geographic sales mix shift. Operating Income-Distribution Distribution operating income in 2025 was $39.8 million, an increase of $15.5 million as compared to the prior year. The 2025 operating income margin was 5.7 percent, an increase of 210 basis points from 3.5 percent in 2024. Operating income and operating income margins increased primarily due to higher sales and reduced SG&A expenses as a result of cost actions implemented in 2024 to improve the performance of the segment. Operating Income-Corporate Expenses and Eliminations 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 2025 compared to the prior year of 2024 was an unfavorable $2.0 million. 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 $3.0 million compared to the prior year, primarily due to higher employee compensation costs, including incremental expenses associated with the Company’s executive leadership transitions. Interest Expense Interest expense was $10.6 million and $6.3 million in 2025 and 2024, respectively. The increase in 2025 was primarily driven by higher average amount of outstanding debt. Other Income, net Other income, net was a net gain of $0.6 million and $1.3 million in 2025 and 2024, respectively. Pension settlement loss The loss in 2025 is primarily due to the Company’s settlement of its US Pension Plan and a partial settlement of the Franklin Electric Co. Restoration plan, which resulted in a pre-tax loss of $54.9 million related to actuarial losses previously recorded in Accumulated Other Comprehensive Loss. Refer to Note 10 in Item 8 of this Annual Report on Form 10-K for additional information on the pension settlement charge. Foreign Exchange Foreign currency-based transactions produced an expense of $9.3 million and an expense of $6.8 in 2025 and 2024, respectively. The results in 2025 and 2024 are primarily due to transaction losses associated with the Argentine Peso and Turkish Lira relative to the U.S. dollar. 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 2025 and 2024 were $46.0 million and $50.2 million, respectively. The effective tax rate for 2025 was about 24 percent before and after the impact of discrete events. The effective tax rate for 2024 was about 22 percent and included a favorable benefit from discrete events of 1 percent. The effective tax rate differs from the U.S. statutory rate of 21 percent primarily due to foreign earnings taxed at rates higher than the U.S. statutory rate, U.S. state taxes, Pillar Two Global Minimum Tax, and nondeductible officer’s compensation, which were partially offset by an object exemption of foreign business profits in the Netherlands, the recognition of the U.S. foreign-derived intangible income (FDII) provisions, certain incentives, and discrete events. Net Income Net income for 2025 was $148.7 million compared to 2024 net income of $181.6 million. Net income attributable to Franklin Electric Co., Inc. for 2025 was $147.1 million, or $3.22 per diluted share, compared to 2024 net income attributable to Franklin Electric Co., Inc. of $180.3 million, or $3.86 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 cap [Excerpt truncated for page length; the complete text is on the linked full-MD&A page.] Read the full FY 2025 MD&A: /company/FELE/mda/fy2025/ All MD&A years: /company/FELE/mda/ ## MD&A history Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page. - [FY 2024 MD&A](/company/FELE/mda/fy2024/): filed 2025-02-21; accession 0000038725-25-000026 (https://www.sec.gov/Archives/edgar/data/38725/000003872525000026/fele-20241231.htm) - [FY 2023 MD&A](/company/FELE/mda/fy2023/): filed 2024-02-23; accession 0000038725-24-000038 (https://www.sec.gov/Archives/edgar/data/38725/000003872524000038/fele-20231231.htm) - [FY 2022 MD&A](/company/FELE/mda/fy2022/): filed 2023-02-22; accession 0000038725-23-000035 (https://www.sec.gov/Archives/edgar/data/38725/000003872523000035/fele-20221231.htm) - [FY 2021 MD&A](/company/FELE/mda/fy2021/): filed 2022-02-25; accession 0000038725-22-000033 (https://www.sec.gov/Archives/edgar/data/38725/000003872522000033/fele-20211231.htm) ## Macro cross-references Indicators mapped to this company's SIC classification (industry 3621 Motors & Generators) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim. - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm Macro-to-micro threads including this sector: [Inflation (CPI / PCE / PPI)](/thread/inflation-cpi-pce-ppi/), [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Money & trade](/thread/money-trade/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/), [Industrial orders & inventories](/thread/industrial-orders/), [Trade & external](/thread/trade-external/). All macro indicators: /indicators/ ## For LLMs & downloads Markdown twin: /company/FELE.md · JSON record: /company/FELE.json · verified financials: /company/FELE/financials.json / /company/FELE/financials.csv · machine TOC for the whole site: /llms.txt