Franklin Electric — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated net sales reached $633.6 million in Q3 2026, a 9% increase compared to $581.7 million in Q3 2025.
• Operating income was $86.5 million, a 2% increase from $85.1 million in Q3 2025, resulting in an operating margin of 13.7%.
• Adjusted operating income was $95.4 million.
• GAAP fully diluted earnings per share (EPS) were $1.35, a 265% increase from $0.37 in Q3 2025.
• Adjusted diluted EPS was $1.50, a 15% increase from $1.31 in Q3 2025.
• For the nine months ended September 30, 2026, net sales were $1.757 billion compared to $1.624 billion in the prior year period.
• Nine-month operating income was $228.2 million compared to $217.4 million in the prior year period.
• Nine-month diluted EPS was $3.58 compared to $2.35 in the prior year period.
• Net cash flows from operating activities for the nine months ended September 30, 2026, were $139.2 million, compared to $134.7 million in the prior year period.
• Net cash flows from investing activities were $(417.9) million, primarily driven by acquisitions and investments of $(385.2) million.
• Net cash flows from financing activities were $336.2 million, driven by a net debt change of $394.1 million.
• Cash and cash equivalents increased to $159.1 million as of September 30, 2026, from $99.7 million as of December 31, 2025.
• Total debt (current maturities and long-term) increased to $560.6 million as of September 30, 2026, from $167.0 million as of December 31, 2025.

Guidance and Future Outlook:

• The company raised full-year 2026 net sales guidance to a range of $2.23 billion to $2.30 billion.
• The company raised full-year 2026 Adjusted Diluted EPS guidance to a range of $4.62 to $4.82.
• Management noted encouraging order trends and strong customer engagement across many businesses.
• The company remains focused on disciplined pricing, productivity initiatives, and operational execution.

Business Segments and Product Lines:

• Water Systems: Net sales were $352.5 million, a 5% increase year-over-year, driven by acquisitions, favorable foreign exchange, and price realization. Operating income was $58.9 million, a 2% decrease, with adjusted operating income of $60.0 million.
• Energy Systems: Net sales were $91.7 million, a 15% increase year-over-year, driven by acquisitions, higher price realization, and volumes. Operating income was $23.7 million, a decrease from $25.4 million in the prior year; adjusted operating income was $31.5 million, a 24% increase.
• Distribution: Net sales were $226.1 million, a 15% increase year-over-year, driven by higher volumes, acquisitions, and price realization. Operating income was $20.6 million, a 26% increase from $16.3 million in the prior year.
• Recent acquisitions, including Cat Pumps, contributed to sales growth and are being integrated.

Market and Competitive Landscape:

• Sales growth was driven by favorable pricing, contributions from recent acquisitions, and healthy customer activity.
• The company serves customers worldwide in residential, commercial, agricultural, industrial, municipal, and fueling applications.
• The company noted margin pressure from higher material and freight costs.

Risks and Challenges:

• Margin pressure from higher material and freight costs.
• Forward-looking statements involve risks including general economic and currency conditions, weather conditions, new housing starts, market demand, competitive factors, supply constraints, raw material costs, integration of acquisitions, litigation, government and regulatory actions, and changes in tariffs.

Management Commentary and Tone:

• CEO Joe Ruzynski stated the team delivered strong revenue growth through favorable pricing, acquisitions, and healthy customer activity.
• Management expressed pleasure with the early contribution from Cat Pumps and confidence in executing the integration playbook.
• Management highlighted a diversified portfolio, strong balance sheet, and multiple growth opportunities as positioning the company for long-term value creation.

Other Key Points:

• The company paid dividends of $37.3 million for the nine months ended September 30, 2026.
• The company repurchased $24.9 million of common stock for the nine months ended September 30, 2026.
• Acquisitions and investments totaled $385.2 million for the nine months ended September 30, 2026.
• A conference call to review earnings was scheduled for 9:00 am ET on October 28, 2026, with a live webcast available.
• The company was recognized in Newsweek's lists of America's Most Responsible Companies 2025, Most Trustworthy Companies 2025, and Greenest Companies 2025.