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Franklin Electric Co Inc. — FELE Q4 2025 Earnings Release Deckv3 (company IR deck)
Franklin Electric Co Inc. (FELE) · 21 slides · Filed Oct 28, 2026
Every slide of this earnings presentation, with the text as published. Open the original deck ↗ · All FELE deck slides
Slide 1 — Q4/FY 2025
Q4/FY 2025 Earnings Presentation February 17, 2026
Slide 2 — Q4 and 2025 Key messages
Q4 and 2025 Key messages • Strong Q4 & FY results in all three segments • Sales growth across end markets. Good pricing discipline and execution. • Disciplined strategy execution led to solid growth in softer markets. • Healthy Q4 order trends and backlog. A positive 2026 outlook. • Another year of strong cash conversion. A healthy balance sheet to invest for growth. • Value Acceleration Office launched. • Well-positioned in the face of tariffs and global uncertainty. 2
Slide 3 — RESIDENTIAL | AGRICULTURAL | COMMERCIAL | INDUSTRIAL | ENERGY
RESIDENTIAL | AGRICULTURAL | COMMERCIAL | INDUSTRIAL | ENERGY OUR VALUE CREATION FRAMEWORK (2027) OUR BUSINESS SEGMENTS GROWTH ACCELERATION RESILIENT MARGINS INVESTMENTS & CAPITAL TALENT CENTRIC Strong revenue with all segments growing Strategy focused on faster growing markets and regions Innovation as a key focus with over 35 new products contributing a projected ~$160M in new revenue by year three Enhancing and expanding our channel in our most important markets Key margin improvement efforts in Distribution and Water treatment showing progress (+210bps and +410bps) Value Acceleration Office kicked off with key cross functional activities to drive YoY productivity Improved strategic pricing focus, offset tariffs Consolidation of key business systems Key acquisitions (Barnes and Pump Eng) to support faster growing markets and geographies Corporate development upgraded as a strategic capability focuses on targeted M&A Returned capital to our shareholders with buybacks Key executive adds and internal talent promotions to strengthen our team Ongoing effort to enhance our cultural alignment focused on collaboration and growth Safety focus showing our employee commitment 56% 31% 13% OUR VALUE CREATION FRAMEWORK Water Systems Distribution Energy Systems 60% 11% 29% $2.131B REVENUE $269.0M OPERATING INCOME 2025 63% 3
Slide 4 — FY 2025 Adjusted EPS Performance ¹
$4.14 $3.92 Adjusted FY 2025 EPS Adjusted FY 2024 EPS FY 2025 Adjusted EPS Performance ¹ $3.22 $0.91 $0.01 FY 2025 Reported EPS Pension Settlement Loss Restructuring expenses 4 1 Non-GAAP financial metrics referenced in this slide include Adjusted EPS, net debt/cash, free cash flow, and net debt to EBITDA. A reconciliation to comparable U.S. GAAP measures can be found herein. • FY EPS Performance: −Sales of $2,131M, up 5% YoY −Gross Margin of 35.9%, flat −Operating income of $268.9M, up 10% YoY, with operating margin of 12.6% −Interest Expense up $4.3M or 68% YOY −Tax Rate 23.6%, up 190bps YOY −Adjusted EPS of $4.14, up 6% YoY −Solid performance despite macroeconomic challenges −Higher sales in Water Systems, from the benefit of acquisitions and favorable pricing −Higher Sales in Energy Systems due to higher volumes −Higher sales in the Distribution segment due to higher volumes +6%
Slide 5 — Q4 2025 Performance
Q4 2025 Performance 5 $43M $7M ($2M) $3M $52M Q4 2024 Gross Profit SG&A Restructuring Q4 2025 SALES OPERATING INCOME Sales of $506.9M increased 4% YoY • Favorable pricing in all three Segments • Higher volumes in Energy and Distribution Segments • Acquisitions added 3% of growth Operating Income of $51.6M increased 20% YoY • Gross profit up on higher sales • Higher SG&A expenses primarily due to acquisition- related costs $486M $1M $15M $5M $507M Q4 2024 Volume/Price Acquisitions FX, net Q4 2025 8.9% 10.2% 3% 0% 1% (4%) 17% 7% 4% YoY 20% YoY
Slide 6 — FY 2025 Performance
FY 2025 Performance 6 $244M $39M ($16M) $3M $269M FY 2024 Gross Profit SG&A Restructuring FY 2025 SALES OPERATING INCOME Sales of $2,131.3M increased 5% YoY • Favorable pricing in all three Segments • Higher volumes in Energy and Distribution Segments • Acquisitions added 3% of growth Operating Income of $268.9M increased 10% YoY • Gross profit up on higher sales • Higher SG&A expenses primarily due to acquisition- related costs $2,021M $60M $52M ($3M) $2,131M FY 2024 Volume/Price Acquisitions FX, net FY 2025 12.1% 12.6% 3% 3% (0%) (7%) 16% 1% 5% YoY 10% YoY
Slide 7 — Q4 2025 Segment Details
Q4 2025 Segment Details WATER SYSTEMS ENERGY SYSTEMS DISTRIBUTION Sales Op. Income Op. Margin Comments $291.6M (up 4%) $41.8M (up 17%) 14.3% (up 160 bps) • Record revenue with growth of 4% • Gross margin up • SG&A up due to acquisition-related expenses & intangible amortization $74.7M (up 9%) $22.6M (down 9%) 30.3% (down 560 bps) • Sales growth in Q4 due to favorable pricing and volumes • Operating margin decreased due to tariff cost not being offset with price $161.6M (up 3%) $5.3M (up 960%) 3.3% (up 300 bps) • Record revenue with growth of 3% • Cost structure actions implemented in 2024 driving improvement in operating performance 7
Slide 8 — Water Systems FY 2025 Performance
Water Systems FY 2025 Performance 8 $198M $24M ($17M) $2M $207M FY 2024 Gross Profit SG&A Restructuring FY 2025 SALES OPERATING INCOME Sales of $1,256.4M increased 6% YoY • Favorable pricing • Acquisitions added 4% of growth • Softer HVAC Market in Q4 • Above market growth in Water Treatment & Dewatering Operating Income of $207.2M increased 5% YoY • Gross profit up on higher volume and pricing and productivity offset inflation. • Higher SG&A expenses primarily due to acquisition- related costs $1,184M $23M $52M ($3M) $1,256M FY 2024 Volume/Price Acquisitions FX, net FY 2025 16.7% 16.5% 4% 2% (0%) (8%) 12% 1% 6% YoY 5% YoY
Slide 9 — Energy FY 2025 Performance
Energy FY 2025 Performance 9 $94M $6M ($1M) $0M $99M FY 2024 Gross Profit SG&A Restructuring FY 2025 SALES OPERATING INCOME Sales of $299.0M increased 9% YoY • Favorable pricing and Higher volumes • Good adoption of new products as we exited the year • International growth gained strong momentum Operating Income of $99.1M increased 6% YoY • Gross profit up on higher sales and strong operational efficiency • Slightly higher SG&A expenses as we invest for new products and markets $274M $25M $0M $0M $299M FY 2024 Volume/Price Acquisitions FX, net FY 2025 34.2% 33.1% 0% 9% (0%) (1%) 7% 0% 9% YoY 6% YoY
Slide 10 — Distribution FY 2025 Performance
Distribution FY 2025 Performance 10 $24M $10M $5M $0M $40M FY 2024 Gross Profit SG&A Restructuring FY 2025 SALES OPERATING INCOME Sales of $700.7M increased 2% YoY • A good mix of price and volume • Relatively stable market with a favorable outlook • Good expansion of customers in wastewater and water treatment Operating Income of $39.9M increased 64% YoY • Gross profit up on dynamic pricing and operational efficiencies • Lower SG&A expenses as we streamline our business $686M $15M $0M $0M $701M FY 2024 Volume/Price Acquisitions FX, net FY 2025 3.5% 5.7% 0% 2% (0%) 21% 42% 1% 2% YoY 64% YoY
Slide 11 — Balance Sheet and Cash Flow¹
11 Balance Sheet and Cash Flow¹ 1 Non-GAAP financial metrics referenced in this slide include net debt/cash, free cash flow, and net debt to EBITDA. A reconciliation to comparable U.S. GAAP measures can be found herein. $100M Cash Balance $67M Net Debt 0.3x Net Debt to EBITDA 0.35M Shares repurchased in Q4 $98M $89M $221M $196M Q4 2024 Q4 2025 FY 2024 FY 2025 $151M $135M $261M $239M Q4 2024 Q4 2025 FY 2024 FY 2025 Cash Flow From Operations Free Cash Flow
Slide 12 — 2026 Outlook
2026 Outlook 12 • Top line growth despite ongoing soft macroeconomic environment (housing market, interest rates) • Solid underlying demand in core markets, healthy demand trend, solid backlog • Expanding margins • Tariff management and mitigation protecting margins • Maintaining strong balance sheet and deploying capital with best ROIC mindset • Remain confident in our long-term strategy HIGHLIGHTS SALES $2.17 to $2.24 Billion (up LSD to MSD) Adjusted EPS $4.40 to $4.60 (up MSD to LDD) LSD = low-single digits, MSD = mid-single digits, HSD = high-single digits, LDD = low-double digits
Slide 13 — Attractive Investment Opportunity
Attractive Investment Opportunity • Great businesses in attractive markets • Leading innovation and service to drive above market growth • Resilient margins with key transformation driving sustainable Expansion • Strong balance sheet with disciplined capital deployment • Strong culture and team focused on our employees, our customers with collaboration, innovation, and velocity End-Market ~15% $2.1B Revenue ~44% Residential ~14% Energy Muni. & Util. Commercial & Industrial ~15% ~12% Agri. 4 Application ~13% Other* ~11% $2.1B Revenue ~46% Groundwater ~8% Dewatering Water- Treat. Fueling & Grid ~14% ~8% Waste- water
Slide 14 — Closing Thoughts
Closing Thoughts 14 • Strong 2025, all businesses performing well despite challenging markets • Value Acceleration Office will bring productivity and efficiency • Solid backlog and book to bill • Another year of growth and margin expansion in ‘26, we expect a strong year • Mitigation strategies in place to continue to offset tariff impacts • Continued confidence in our long-term strategy • We are an attractive portfolio with great opportunities to grow
Slide 15 — Non-GAAP Reconciliations
15 Non-GAAP Reconciliations
Slide 16 — Non-GAAP Reconciliations
Non-GAAP Reconciliations To supplement Franklin Electric’s consolidated financial statements presented on a U.S. GAAP basis, the company discloses certain non-GAAP financial measures. These non-GAAP financial measures are not in accordance with generally accepted accounting principles in the United States. Non-GAAP financial measures may enhance an understanding of the company’s operations and may facilitate an analysis of those operations, particularly in evaluating performance from one period to another. Management believes that non-GAAP financial measures, when used in conjunction with the results presented in accordance with U.S. GAAP and the company’s reconciliations to corresponding U.S. GAAP financial measures (which are included in the tables accompanying this presentation), may enhance an investor’s overall understanding of the company’s past financial performance and prospects for the future. Accordingly, management uses these non-GAAP measures internally in financial planning and to monitor business performance. This information should be considered in addition to, and not as substitutes for, information prepared in accordance with U.S. GAAP. Franklin Electric strongly encourages investors to review its consolidated financial statements and publicly- filed reports in their entirety and cautions investors that the non-GAAP measures used by the company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Non-GAAP financial measures used in this presentation include net debt/cash, net debt to EBITDA and free cash flow and conversion. 16
Slide 17 — Reconciliation of Adjusted EPS Non-GAAP Financial Measure
Reconciliation of Adjusted EPS Non-GAAP Financial Measure 17 2025 2024 Change 2025 2024 Change Diluted Earnings per Share "EPS" 0.87 $ 0.72 $ 21% 3.22 $ 3.86 $ -17% Pension Settlement (0.01) $ - $ 0.91 $ - $ Restructuring 0.01 $ 0.06 $ 0.01 $ 0.06 $ Adjusted Diluted EPS (non-GAAP) 0.87 $ 0.78 $ 12% 4.14 $ 3.92 $ 6% For the Fourth Quarter For the Full Year of
Slide 18 — Reconciliation of Non-GAAP Financial Measure
Reconciliation of Non-GAAP Financial Measure Total Debt to Net Debt (Cash) and Net Debt to EBITDA $ in Millions 18 As of December 31, 2025 Total debt 167 $ Less: cash and cash equivalents (100) $ Net (cash) debt 67 $ Twelve months ended December 31, 2025 Year ended December 31, 2024 Net income 149 $ 182 $ Depreciation and amortization 63 $ 56 $ Income tax expense 46 $ 50 $ Interest expense 11 $ 6 $ EBITDA 268 $ 294 $ Net debt to EBITDA as of December 31, 2025 0.3
Slide 19 — Reconciliation of Non-GAAP Financial Measure
Reconciliation of Non-GAAP Financial Measure Operating Cash Flow to Free Cash Flow $ in Millions 19 Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD Cash flows from operating activities (19.5) $ 51.5 $ 102.7 $ 84.7 $ 238.9 $ (1.4) $ 36.4 $ 116.1 $ 110.3 $ 261.4 $ Cash flows from investing activities (116.1) $ (11.2) $ (9.8) $ (136.1) $ (157.1) $ (10.2) $ (10.0) $ (9.1) $ (16.3) $ (45.6) $ Cash flows from financing activities (2.6) $ (19.5) $ (90.1) $ (87.7) $ (197.3) $ (6.3) $ (32.4) $ (61.3) $ 25.9 $ (74.1) $ - $ - $ Cash flows from operating activities (19.5) $ 51.5 $ 102.7 $ 84.7 $ 238.9 $ (1.4) $ 36.4 $ 116.1 $ 110.3 $ 261.4 $ Capital expenditures (6.8) $ (11.6) $ (11.4) $ (22.3) $ (45.3) $ (9.2) $ (10.2) $ (9.5) $ (12.8) $ (41.7) $ Proceeds from sale of property, plant and equipment 0.4 $ 0.3 $ 1.9 $ 0.7 $ 2.9 $ 0.1 $ 0.3 $ 0.3 $ 0.5 $ 1.2 $ Free cash flow (25.9) $ 40.2 $ 93.2 $ 63.1 $ 196.5 $ (10.5) $ 26.5 $ 106.9 $ 98.0 $ 220.9 $ 2025 2024
Slide 20 — Reconciliation of Non-GAAP Financial Measure
Reconciliation of Non-GAAP Financial Measure Cash Conversion $ in Millions 20 2025 2024 Net Cash Flows from Operating Activities 238.9 $ 261.4 $ Net Income 148.7 $ 181.6 $ Pension Settlement, net of tax 41.5 $ - $ Restructuring, net of tax 0.5 $ 2.6 $ Net Income for Cash Conversion (non-GAAP) 190.7 $ 184.2 $ Cash Conversion (non-GAAP)* 125% 142% *defined as Net Cash from Operating Activities/Net Income for Cash Conversion (non-GAAP) For the Full Year of
Slide 21 — Thank You!
Thank You! Jennifer Wolfenbarger CFO Dean Cantrell, Director IR [email protected] 260-827-5520 21