Franklin Electric Reports First Quarter 2019 Sales and Earnings
Fort Wayne, IN – April 23, 2019 - Franklin Electric Co., Inc. (NASDAQ: FELE) reported first quarter 2019 GAAP fully diluted earnings per share (EPS) of $0.19, versus a GAAP fully diluted EPS in the first quarter 2018 of $0.45. First quarter 2019 sales were $290.7 million, compared to 2018 first quarter sales of $295.6 million. First quarter EPS before the impact of restructuring expenses was $0.21 compared to 2018 first quarter EPS before restructuring of $0.45 (see table below for a reconciliation of GAAP EPS to EPS before restructuring). In the first quarter of 2018, the Company recognized discrete income tax benefits of about $5 million which lowered the first quarter 2018 effective tax rate and resulted in an eleven-cent increase in earnings per share.
Gregg Sengstack, Franklin Electric’s Chairman and Chief Executive Officer, commented:
“Our first quarter 2019 net sales results were meaningfully below our expectations and were the primary driver of our lower earnings in the quarter. The key factors that contributed to the lower than expected net sales included adverse winter weather conditions in North America that hurt all our operating segments, and weak international end markets primarily in Europe, the Middle East and Central America. Our operating income before restructuring expenses declined by about $9.5 million from the first quarter 2018 due in large part to the lower sales volume and adverse sales mix, resulting in lost leverage on our fixed cost base. Through our company wide focus on working capital reduction our operating cash flow improved by $24 million as compared to the first quarter of last year.
Despite the lower than expected demand in first quarter, we remain confident in the overall strength of the end markets in which we compete. Our Water Systems segment is positioned well to recover the declines in North America that resulted from adverse weather and we are encouraged by higher than expected net sales results in both Brazil and Asia Pacific during the first quarter. Although sales in our Pioneer branded dewatering equipment business and our Fueling Systems segment were also below expectations in the first quarter, we attribute this mostly to the timing of customer requested deliveries. As a result, we are reaffirming our 2019 earnings per share guidance of $2.37 to $2.47 per share.”
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