The following is a summary of the Franklin Electric Co., Inc. (FELE) Q4 2023 Earnings Call Transcript:

Financial Performance:

• Franklin Electric reported Q4 sales were down $16 million, or 3%, primarily due to lower volume in its Fueling Systems and a negative impact from foreign exchange.

• The company delivered solid operating margins in water and fueling despite softer demand, supported by strong manufacturing margins due to ongoing cost controls.

• Operating cash flow improved by $214 million in 2023, resulting in a free cash flow conversion of 142% and net debt nearing zero.

• Franklin Electric initiated 2024 guidance for sales between $2.1 billion and $2.17 billion, and EPS between $4.22 and $4.40 per share.

• Operating income was $50.8 million, down by 10% from $56.2 million in Q4 2022.

• The company's diluted EPS was $0.82 for Q4 2023, down from $0.84 in Q4 2022.

Business Progress:

• The company expanded operating margins in its water and fueling segments, and set a full-year record for sales of critical asset monitoring products within its fueling business.

• Franklin Electric completed two small acquisitions in Q4 2023: Action Manufacturing & Supply Incorporated, and Water Works Pump.

• The company anticipates continued demand for groundwater pumps due to large replacement business and favorable activity across agricultural, industrial, and mining markets.

• Franklin Electric has been recognized as one of America's most responsible and trustworthy companies by Newsweek for two consecutive years, and as one of America's Climate Leaders for 2023 by USA Today.

• The company bought about 144,000 shares of its common stock in the open market for around $13 million during Q4 2023.

• On January 22, Franklin Electric announced an 11% increase in its cash dividend, marking the 32nd consecutive year of increase.

More details: Franklin Electric IR

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