FRANKLIN ELECTRIC REPORTS 2010 EARNINGS PER SHARE INCREASED 48 PERCENT FROM 2009
Bluffton, Indiana – February 28, 2011 - Franklin Electric Co., Inc. (NASDAQ:FELE) reported fourth quarter 2010 diluted earnings per share of $0.36, an increase of 9 percent compared to 2009 fourth quarter diluted earnings per share of $0.33. In the fourth quarter of 2010, the Company recognized charges for legal matters that resulted in a reduction to earnings per share of $0.03 per share. Diluted earnings per share for the fourth quarter of 2010 before restructuring and legal matters would have been $0.39, an increase of 15 percent compared to the prior year. Fourth quarter 2010 sales were $175.0 million, an increase of 21 percent compared to 2009 fourth quarter sales of $144.9 million.
For the full year 2010, diluted earnings per share were $1.66, an increase of 48 percent compared to 2009 diluted earnings per share of $1.12. Earnings per share before restructuring charges were $1.81, an increase of 40 percent versus the prior year. In 2010, the Company also recognized charges for legal matters that resulted in a reduction to earnings per share of $0.13. Diluted earnings per share for the full year of 2010 before restructuring and legal matters would have been $1.94, an increase of 50 percent compared to the prior year. Full year 2010 sales were $713.8 million, an increase of 14 percent compared to 2009 sales of $626.0 million
Scott Trumbull, Franklin Chairman and Chief Executive, commented:
“The fourth quarter was a solid ending to a very good year for Franklin Electric. During the quarter our consolidated sales grew organically by 15 percent; our gross profit margin improved by 90 basis points compared to the year ago quarter as we more than offset rising material costs with operating leverage on higher sales. We also announced pricing actions that should be effective in the second quarter of 2011. Our selling, general and administrative (“SG&A”) spending rate was unusually high during the fourth quarter as we incurred higher compensation related charges, concluded some long standing legal matters and included the addition of Petrotechnik. We are firmly committed to reducing SG&A costs as a percentage of sales during 2011.
During the full year 2010 we were particularly pleased with the progress we made on two of our key growth objectives which were:
1. To increase market share of the North American water pumping systems market; and
2. To grow Water and Fueling Systems sales in developing regions where the demand for our products is growing most rapidly.
In North America our two largest water pumping product lines are groundwater pumps and residential sump, sewage, effluent, and utility pumps. Based upon trade association data we believe that our North American shipments for these products grew at twice the rate of the industry as a whole. We estimate that Franklin Electric captured about 40 percent of the industry growth for these two key product categories in 2010. As a result our overall dollar sales in North America grew by 17 percent, and this growth was accomplished without a meaningful rebound in home building.
Our Water Systems sales in developing regions grew organically by 21 percent during 2010 and now represent about 40 percent of our total Water Systems sales. Our global Water team achieved over 20 percent organic growth in a number of geographic markets including Brazil, Africa, China, the Gulf region and the ASEAN countries.
Our Fueling Systems sales in developing regions grew by 41 percent during 2010, and now represent 26 percent of our total Fueling sales. The acquisition of Petrotechnik late in the third quarter of 2010 will add significantly to our distribution reach in Asia and Latin America and will provide a platform for cross selling in these markets as well as Europe in 2011 and beyond.”
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