Franklin Electric Reports Record Income
Franklin Electric reported record diluted earnings per share of $1.65 for fiscal 2004, an increase of 9 percent compared to 2003 earnings per share of $1.52, and net income was a record $38.1 million, an increase of 10 percent compared to last year’s $34.5 million.
The Company reported diluted earnings per share for the fourth quarter were $0.47, a 2 percent increase from $0.46 for the fourth quarter of 2003. Fourth quarter 2004 net income was a record $11.0 million, an increase of 4 percent from $10.6 million for the same period a year ago.
Sales for fiscal year 2004 were a record $404.3 million, an increase of $44.8 million or 12 percent compared to 2003 sales of $359.5 million. The increase in sales was primarily due to higher volumes, translation effect of exchange rates and improved price realization. Sales volume increases were realized across all markets served for fiscal 2004. The most significant volume increases were in residential water well submersible motors. Volume increases were not only within the North American markets but global in nature. The impact of strengthening foreign currencies on fiscal year 2004 was an increase of $10.2 million in the Company’s reported sales. The impact of this change in exchange rates was a $2.6 million increase in the Company’s reported fourth quarter 2004 sales. Fourth quarter sales were a record $107.6 million, an increase of $11.4 million for the same quarter of 2003. Fourth quarter volume trends were consistent with annual trends, and were primarily driven by the residential submersible motor. Sales for fiscal year 2004 and the fourth quarter of 2004 related to the acquisition of the assets of JBD, Inc. (the former Jacuzzi Brand) pump company were $5.7 million or 2% of prior year sales.
In the third quarter of 2003, the Company announced its global manufacturing realignment program. A program that – when substantially complete by the third quarter of 2005 – will result in moving a significant amount of production to lower cost regions of the world as well as consolidating certain manufacturing operations. As previously disclosed, the Company projected it will incur approximately $10 million of pre-tax restructuring expenses as this program is implemented between the first quarter of 2004 and the fourth quarter of 2005. Included in the above results for the fiscal year of 2004 are restructuring expenses of $5.5 million pre-tax ($3.6 million after tax). For the fourth quarter of 2004 restructuring expenses were $1.9 million ($1.2 million after tax). We have completed the consolidation of FE Petro, EBW and APT operations into our new state-of-the-art manufacturing and distribution facility in Madison, Wisconsin. The consolidation of the operations of our Motta di Livenza, Italy factory into our existing Wittlich, Germany and expanding Brno, Czech Republic factories has been completed. The ramp up of our new Linares, Mexico motor manufacturing plant continues on schedule and on budget.
For the fiscal year 2004, operating earnings were $59.8 million, up $8.1 million or 16 percent compared to $51.6 million a year ago. The improvement in operating earnings was primarily driven by the record sales and was partially offset by the restructuring expenses discussed above and increased costs of certain commodities used in the manufacture of electric motors. Operating earnings for the fourth quarter of 2004 were $17.1 million, an increase of 8 percent compared to $15.9 million a year ago.
R. Scott Trumbull, Chairman and Chief Executive Officer, stated, “The people of Franklin Electric again achieved record financial results while making progress on long term initiatives that will strengthen our competitive position going forward. Our global manufacturing realignment program continues on budget and on schedule; our business continues to grow in international markets; and we have enhanced our growth potential by expanding our customer base to include water systems distributors and expanding our product offerings to include pumps.”
About Franklin Electric
Franklin Electric Co., Inc. (NASDAQ:FELE) is a global leader in the production and marketing of groundwater and fuel pumping systems and is a technical leader in submersible motors, drives, controls, and monitoring devices.
Source: Franklin Electric Co., Inc.