FRANKLIN ELECTRIC REPORTS RECORD THIRD QUARTER SALES AND EARNINGS
Bluffton, Indiana – November 2, 2011 - Franklin Electric Co., Inc. (NASDAQ:FELE) reported third quarter 2011 diluted earnings per share (EPS) of $0.80, a record for any third quarter in the Company’s history, and an increase of 54 percent compared to 2010 third quarter diluted EPS of $0.52. In the third quarter of 2011, the Company’s adjusted EPS were $0.82, a 55 percent increase over the adjusted EPS during the third quarter 2010 (see table below for a reconciliation of GAAP EPS to the adjusted EPS). Third quarter 2011 sales were $224.4 million, a record for any third quarter in the Company’s history and an increase of 19 percent compared to 2010 third quarter sales of $188.4 million.
Scott Trumbull, Franklin Chairman and Chief Executive, commented:
“Franklin people worldwide have again achieved outstanding quarterly financial results. Sales, operating income and net income were all records for any third quarter in the Company’s history, while at the same time we invested in our future by increasing research, development and engineering (RD&E) spending by 31 percent.
Our gross profit margin as a percent of sales increased by 130 basis points compared to the third quarter last year; and our operating income margin after non-GAAP adjustments improved by 240 basis points. As has been the case during the first half of 2011, the third quarter continued to be negatively impacted by rising raw material costs. However, largely as a result of the facilities restructuring and lean initiatives that we have been implementing over the past several years, we were able to more than offset these increases with labor productivity improvements, fixed cost control, and operating leverage.
Although we have seen some recent material cost declines in certain commodity markets, our overall raw material costs continue to rise. As a result we have planned sales price increases of 3 to 5 percent effective in the first quarter 2012 in markets that represent about 75 percent of our consolidated sales. We currently plan to implement sales price increases on most of the balance of our markets in the second quarter of next year.”
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