- Email: [email protected]
Franklin Electric Co Inc, USA
May 2007
Pump Industry Analyst
Franklin Electric Co Inc, USA Profile Franklin Electric Co Inc defines itself as a process control company that is focused on expanding sales in two global distribution channels - water systems and petroleum equipment. The company specialises in water and fuel pumping systems, submersible motors, drives, controls and monitoring devices. Franklin Electric’s products are present in approximately one of every two water wells and filling stations worldwide. With 3200 employees worldwide, Franklin Electric has 15 manufacturing/distributing facilities located in the US, Germany, the Czech Republic, Italy, Mexico, Australia, South Africa, China and Japan.
COMMENT Franklin Electric’s strategic objective is to increase revenue per installation by offering an expanded line of pumping system components that complement Franklin submersible motors. While the company’s core strategy is focused on expanding within groundwater pumping systems, Franklin also sees a major opportunity in adjacent water puming applications, reflected in last year’s acquisition of Little Giant Pump Co. ■
Key Figures (US$ million) Franklin Electric Co Inc
Year 2006
2005
2004
2003
2002
Net Sales Of Which: Water Systems Fueling Systems
557.9
403.4
370.1
325.5
319.0
459 99
334 69
– –
– –
– –
Cost of Sales
366.4
260.6
243.9
–
–
Gross Profit
191.6
142.8
126.2
106.7
99.7
–
1.9
5.5
–
–
89.1
70.1
60.2
–
–
Restructure Expense Operating Income Income from Continuing Operations
56.8
45.8
38.4
34.6
31.3
Net Income
57.0
46.0
38.1
34.5
32.2
Capital Expenditures
23.2
17.8
21.1
15.3
15.6
Working Capital
123.8
139.0
111.7
82.6
62.8
Total Assets
526.9
379.8
333.5
282.0
258.6
Contact Details Chairman & CEO: Address:
R Scott Trumbull 400 E Spring St Bluffton IN 46714 USA
Tel: +1 260 824 2900 Fax: +1 260 824 2909 Web: www.franklin-electric.com
Recent Events • Effective 1 January 2007, Franklin Electric introduced a new general sales policy for the Water Systems Industry in North America, selling all of its products only on a direct basis to wholesale water systems distributors. • During 2006, Franklin Electric expanded its manufacturing facilities in Linares, Mexico and Suzhou, China. The company also started a pump manufacturing operation at its Wilburton, Oklahoma facility to produce large sub-turbine and centrifugal pumps. • In December 2006, Franklin Electric sold its Engineered Motor Products Division (EMPD) located in Bluffton, Indiana to US equity firm CapitalWorks LLC. • In April 2006, Franklin Electric completed the acquisition of Little Giant Pump Co from Tecumseh Products Co (see Pump Industry Analyst, March 2006).
5
COMPANY PROFILE
Analysis Fiscal 2006 net sales from continuing operations were a record US$557.9 million, a 38% increase on 2005’s US$403.4 million. Incremental sales related to acquisitions were about US$86 million. The majority of the sales growth from acquisitions came from the Little Giant Pump Co. 2006 sales growth also benefited from selling price realisation gains and organic growth in Water Systems motor and pump unit shipments. Water Systems product sales worldwide were up about 37%, with gains in all major product categories including submersible motors, pumps and drives and controls.
Pump Industry Analyst
Franklin Electric Co Inc, USA Profile Franklin Electric Co Inc defines itself as a process control company that is focused on expanding sales in two global distribution channels - water systems and petroleum equipment. The company specialises in water and fuel pumping systems, submersible motors, drives, controls and monitoring devices. Franklin Electric’s products are present in approximately one of every two water wells and filling stations worldwide. With 3200 employees worldwide, Franklin Electric has 15 manufacturing/distributing facilities located in the US, Germany, the Czech Republic, Italy, Mexico, Australia, South Africa, China and Japan.
COMMENT Franklin Electric’s strategic objective is to increase revenue per installation by offering an expanded line of pumping system components that complement Franklin submersible motors. While the company’s core strategy is focused on expanding within groundwater pumping systems, Franklin also sees a major opportunity in adjacent water puming applications, reflected in last year’s acquisition of Little Giant Pump Co. ■
Key Figures (US$ million) Franklin Electric Co Inc
Year 2006
2005
2004
2003
2002
Net Sales Of Which: Water Systems Fueling Systems
557.9
403.4
370.1
325.5
319.0
459 99
334 69
– –
– –
– –
Cost of Sales
366.4
260.6
243.9
–
–
Gross Profit
191.6
142.8
126.2
106.7
99.7
–
1.9
5.5
–
–
89.1
70.1
60.2
–
–
Restructure Expense Operating Income Income from Continuing Operations
56.8
45.8
38.4
34.6
31.3
Net Income
57.0
46.0
38.1
34.5
32.2
Capital Expenditures
23.2
17.8
21.1
15.3
15.6
Working Capital
123.8
139.0
111.7
82.6
62.8
Total Assets
526.9
379.8
333.5
282.0
258.6
Contact Details Chairman & CEO: Address:
R Scott Trumbull 400 E Spring St Bluffton IN 46714 USA
Tel: +1 260 824 2900 Fax: +1 260 824 2909 Web: www.franklin-electric.com
Recent Events • Effective 1 January 2007, Franklin Electric introduced a new general sales policy for the Water Systems Industry in North America, selling all of its products only on a direct basis to wholesale water systems distributors. • During 2006, Franklin Electric expanded its manufacturing facilities in Linares, Mexico and Suzhou, China. The company also started a pump manufacturing operation at its Wilburton, Oklahoma facility to produce large sub-turbine and centrifugal pumps. • In December 2006, Franklin Electric sold its Engineered Motor Products Division (EMPD) located in Bluffton, Indiana to US equity firm CapitalWorks LLC. • In April 2006, Franklin Electric completed the acquisition of Little Giant Pump Co from Tecumseh Products Co (see Pump Industry Analyst, March 2006).
5
COMPANY PROFILE
Analysis Fiscal 2006 net sales from continuing operations were a record US$557.9 million, a 38% increase on 2005’s US$403.4 million. Incremental sales related to acquisitions were about US$86 million. The majority of the sales growth from acquisitions came from the Little Giant Pump Co. 2006 sales growth also benefited from selling price realisation gains and organic growth in Water Systems motor and pump unit shipments. Water Systems product sales worldwide were up about 37%, with gains in all major product categories including submersible motors, pumps and drives and controls.