Franklin electric reports first quarter 2018 sales and earnings nasdaq fele j gastroenterol hepatol impact factor

####

FORT WAYNE, Ind., May 01, 2018 (GLOBE NEWSWIRE) — Franklin Electric Co., Inc. (NASDAQ: FELE) reported first quarter 2018 GAAP fully diluted earnings per share (EPS) of $0.45, versus a GAAP fully diluted EPS in the first quarter 2017 of $0.33. First quarter 2018 sales were $295.6 million, compared to 2017 first quarter sales of $220.3 million. First quarter 2018 organic sales increased about 10 percent when excluding the impact of foreign currency translation.

“We had a strong start to 2018 from both a growth and earnings perspective. Our Water Systems business grew organically by 11 percent on strength in the U.S. and Canada markets and our Fueling Systems business grew organically by 9 percent on broad based strength internationally and in North America. In our Distribution segment, first quarter proforma revenue was down less than 3 percent compared to the first quarter of 2017 and ahead of our expectations. Our first quarter operating income grew by 23 percent and our earnings per share grew by 36 percent compared to the first quarter 2017.”

Water Systems sales in the U.S. and Canada increased by about 29 percent compared to the first quarter 2017. The impact of foreign currency translation increased sales by about 1 percent. Sales of Pioneer branded dewatering equipment more than doubled in the first quarter when compared to the prior year due to strength in North American oil and gas markets and continued diversification of product sales channels and geographies. Sales of groundwater pumping equipment increased by about 30 percent on stronger residential and agricultural system sales primarily to the Headwater companies, versus the first quarter 2017. Sales of other surface pumping equipment increased by about 10 percent primarily in wastewater products.

Water Systems sales in markets outside the U.S. and Canada increased by about 3 percent overall. The impact of foreign currency translation increased sales by about 5 percent. International Water Systems sales improved in Europe, the Middle East, and Africa, but were offset by lower sales in Brazil and Asia when compared to the first quarter 2017.

Fueling Systems sales in the U.S. and Canada increased by about 11 percent compared to the first quarter 2017. The increase was broad based and included numerous product categories including fuel management, pumping, piping and containment systems. Outside the U.S. and Canada, Fueling Systems revenues grew by about 16 percent, led by stronger sales in China and Europe, partially offset by lower sales in India.

Distribution sales were $56.2 million in the first quarter 2018. The Company estimates that compared to the 2017 first quarter, proforma revenue in the distribution segment declined by just under three percent. The Distribution segment recorded an operating loss of $0.8 million in the first quarter of 2018.

The Company’s consolidated gross profit was $99.0 million for the first quarter of 2018, an increase from the first quarter of 2017 gross profit of $75.8 million. The gross profit as a percent of net sales was 33.5 percent in the first quarter of 2018 versus 34.4 percent during the first quarter 2017. The gross profit increase was primarily due to higher sales. The decline in gross profit margin percentage is primarily due to product and geographic sales mix shifts, as realized sales price offset material cost inflation in the quarter.

Selling, general, and administrative (SG&A) expenses were $76.3 million in the first quarter of 2018 compared to $57.0 million in the first quarter of the prior year. The increase in SG&A expenses from acquired businesses was $17.7 million. Excluding the acquired entities, the Company’s SG&A expenses in the first quarter of 2018 were $58.6 million, an increase of about 3 percent from the first quarter 2017.

The Company recognized discrete income tax benefits related to certain deferred tax positions in the first quarter of about $5 million which lowered the first quarter effective tax rate to a 9 percent benefit. Consistent with our previous guidance, the Company believes the full year 2018 effective tax rate will be about 15 percent expense on pre-tax earnings.

“Given our strong start to the year in both the Water and Fueling Systems segments, and our better than expected sequential growth in Distribution, we are raising our revenue guidance for 2018. We now believe our organic revenue growth, which excludes the impact of foreign currency translation, will more likely be in the 6 to 8 percent range. This is an increase from the 4 to 5 percent range for Water and Distribution and from the 5 to 7 percent range for Fueling, provided in our previous guidance.

Based on these higher growth assumptions and resultant earnings, we are raising our full year 2018 estimate for earnings per share to a range of $2.27 to $2.37, an increase from the $2.16 to $2.28 provided in our previous guidance. The discrete tax benefits we realized in the first quarter were planned and included in our previous earnings guidance.”

A conference call to review earnings and other developments in the business will commence at 9:00 am EDT. The first quarter 2018 earnings call will be available via a live webcast. The webcast will be available in a listen only mode by going to:

A replay of the conference call will be available Tuesday, May 1, 2018 at 12:00 noon EDT through noon EDT on Tuesday, May 8, 2018, by dialing 855.859.2056 for domestic calls and 404.537.3406 for international calls. The replay passcode is: 6991834.

Franklin Electric is a global leader in the production and marketing of systems and components for the movement of water and fuel. Recognized as a technical leader in its products and services, Franklin Electric serves customers around the world in residential, commercial, agricultural, industrial, municipal, and fueling applications. FRANKLIN ELECTRIC CO., INC. AND CONSOLIDATED SUBSIDIARIES

"Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein, including those relating to market conditions or the Company’s financial results, costs, expenses or expense reductions, profit margins, inventory levels, foreign currency translation rates, liquidity expectations, business goals and sales growth, involve risks and uncertainties, including but not limited to, risks and uncertainties with respect to general economic and currency conditions, various conditions specific to the Company’s business and industry, weather conditions, new housing starts, market demand, competitive factors, changes in distribution channels, supply constraints, effect of price increases, raw material costs, technology factors, integration of acquisitions, litigation, government and regulatory actions, the Company’s accounting policies, future trends, and other risks which are detailed in the Company’s Securities and Exchange Commission filings, included in Item 1A of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2017, Exhibit 99.1 attached thereto and in Item 1A of Part II of the Company’s Quarterly Reports on Form 10-Q. These risks and uncertainties may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements made herein are based on information currently available, and the Company assumes no obligation to update any forward-looking statements.