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What changed in FRANKLIN ELECTRIC CO INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of FRANKLIN ELECTRIC CO INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+123 added−125 removedSource: 10-K (2026-02-20) vs 10-K (2025-02-21)

Top changes in FRANKLIN ELECTRIC CO INC's 2025 10-K

123 paragraphs added · 125 removed · 101 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe Company’s principal competitors in the specialty water products industry are Grundfos Management A/S, Pentair, Inc. and Xylem, Inc. 2024 Water Systems research and development expenditures were primarily related to the following activities: • Development of new integrated pressure boosting systems for residential and commercial applications • Electronic variable frequency drives and controls for Pump and HVAC applications, including enhancements to include tethering and IOT capability for our drives and making our key platforms easier to utilize by our customers • Development of expanded offering of standard electric skid pump package designs including the "SmartPrime" variable frequency drive skid packages and updated stackable units for rental and municipal dewatering markets • Development of new HVAC condensate product offerings including new externally mounted mini-condensate pump • Greywater pumping equipment, including the expansion of our electrical submersible pump lines with addition of range, materials, and control packages for the global market • Submersible pumps for commercial, municipal, and agricultural applications including the development of global standardization of updated cast iron submersible turbine hydraulics, and upgrading the performance of line shaft turbine product offering • Water treatment products focused on component performance improvements Energy Systems Segment Energy Systems is a global leader in the production and marketing of fuel pumping systems, fuel containment systems and monitoring and control systems.
Biggest changeThe Company’s principal competitors in the specialty water products industry are Grundfos Management A/S, Pentair, Inc. and Xylem, Inc. 2025 Water Systems research and development expenditures were primarily related to the following activities: • Development of new integrated pressure boosting systems for residential and commercial applications • Electronic variable frequency drives and controls for pump applications, including enhancements to include remote communication and IOT capability for our drives and making our key platforms easier to utilize by our customers • Dewatering pumping equipment, including the expansion of our electrical submersible pump lines with addition of range, materials, and control packages for the global market • Vertical pumping systems for residential applications including integrated designs of pump, motor, and controls • Submersible pumps for commercial, municipal, and agricultural applications including the development of global standardization of updated cast iron and stainless steel submersible turbine hydraulics, and upgrading the performance of line shaft turbine product offering Energy Systems Segment Energy Systems is a global leader in the production and marketing of fuel pumping systems, fuel containment systems and monitoring and control systems.
The Company makes available free of charge on or through its website its annual 6 report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports, as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission.
The Company makes available free of charge on or through its website its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports, as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission.
The Water Systems segment generates approximately 25 to 30 percent of its revenue in developing markets, which often lack municipal water systems. As those countries install water systems and further develop with an expanding middle class or improving quality of living, the Company views those markets as an opportunity.
The Water Systems segment generates approximately 25 to 30 percent of its revenue in developing 4 markets, which often lack municipal water systems. As those countries install water systems and further develop with an expanding middle class or improving quality of living, the Company views those markets as an opportunity.
Additionally, the Company’s website includes the Company’s corporate governance guidelines, its Board committee charters, Lead Independent Director charter, and the Company’s code of business conduct and ethics. Information contained on the Company’s website is not part of this annual report on Form 10-K.
Additionally, the Company’s website includes the Company’s corporate governance guidelines, its Board committee charters, Lead Independent Director charter, and the Company’s code of business conduct and ethics. Information contained on the Company’s website is not part of this annual report on Form 10-K. 6
The Company is committed to providing safe work environments for its employees, prioritizing wellness, health and safety best practices and requiring ethical compliance with established policies. Further information regarding its human capital details and initiatives can be found in the 2024 Franklin Electric Sustainability Report available for download on the Company's website.
The Company is committed to providing safe work environments for its employees, prioritizing wellness, health and safety best practices and requiring ethical compliance with established policies. Further information regarding its human capital details and initiatives can be found in the 2025 Franklin Electric Sustainability Report available for download on the Company's website.
The Company believes that availability of fuel and energy is adequate to satisfy current and projected overall operations unless interrupted by government direction, allocation or other disruption. Major Customers No single customer accounted for over 10 percent of net sales in 2024, 2023, or 2022.
The Company believes that availability of fuel and energy is adequate to satisfy current and projected overall operations unless interrupted by government direction, allocation or other disruption. Major Customers No single customer accounted for over 10 percent of net sales in 2025, 2024, or 2023.
All backlog orders are expected to be filled in 2025. The Company’s sales in the first quarter are generally less than its sales in other quarters due to less water well drilling and overall product sales during the winter months in the Northern hemisphere.
All backlog orders are expected to be filled in 2026. The Company’s sales in the first quarter are generally less than its sales in other quarters due to less water well drilling and overall product sales during the winter months in the Northern hemisphere.
Water Systems contributed about 60 percent of the Company’s total revenue in 2024. Significant portions of segment revenue come from selling groundwater and surface pumps, motors, and 4 controls for residential and commercial buildings, as well as agricultural sales which are more seasonal and subject to commodity price changes.
Water Systems contributed about 60 percent of the Company’s total revenue in 2025. Significant portions of segment revenue come from selling groundwater and surface pumps, motors, and controls for residential and commercial buildings, as well as agricultural sales which are more seasonal and subject to commodity price changes.
The Company has not experienced any material costs in connection with environmental compliance, and does not believe that such compliance will have any material effect upon the financial position, results of operations, cash flows or competitive position of the Company. Human Capital Resources As of December 31, 2024, the Company had approximately 6,300 employees.
The Company has not experienced any material costs in connection with environmental compliance, and does not believe that such compliance will have any material effect upon the financial position, results of operations, cash flows or competitive position of the Company. Human Capital Resources As of December 31, 2025, the Company had approximately 6,500 employees.
With 2024 revenue of approximately $2.0 billion, the Company designs, manufactures and distributes water and fuel pumping systems, composed primarily of submersible motors, pumps, electronic controls, water treatment systems, and related parts and equipment. The Company’s water pumping systems move fresh and wastewater for the residential, agricultural and other industrial end markets.
With 2025 revenue of approximately $2.1 billion, the Company designs, manufactures and distributes water and fuel pumping systems, composed primarily of submersible motors, pumps, electronic controls, water treatment systems, and related parts and equipment. The Company’s water pumping systems move fresh and wastewater for the residential, agricultural and other industrial end markets.
No single customer accounted for over 10 percent of gross accounts receivable in 2024 and 2023.
No single customer accounted for over 10 percent of gross accounts receivable in 2025 and 2024.
("PumpEng"), a manufacturer of submersible pumps for the mining sector headquartered in Australia. Also in February 2025, the Company signed a definitive agreement to acquire Barnes de Colombia S.A. ("Barnes"), a leading manufacturer and distributor of industrial and commercial pumps based in Colombia. Water Systems products are sold in highly competitive markets.
In 2025, the Company acquired PumpEng Pty Ltd. ("PumpEng"), a manufacturer of submersible pumps for the mining sector headquartered in Australia and Barnes de Colombia S.A. ("Barnes"), a leading manufacturer and distributor of industrial and commercial pumps based in Colombia. Water Systems products are sold in highly competitive markets.
Backlog The dollar amount of backlog by segment was as follows: (In millions) February 5, 2025 February 7, 2024 Water Systems $ 98.4 $ 120.2 Energy Systems 21.5 16.9 Distribution 20.8 23.5 Consolidated $ 140.7 $ 160.6 The backlog is composed of written orders for products for which prices are typically established at the time the order is placed, primarily standard catalog items.
Backlog The dollar amount of backlog by segment was as follows: (In millions) February 4, 2026 February 5, 2025 Water Systems $ 99.0 $ 98.4 Energy Systems 21.0 21.5 Distribution 19.1 20.8 Consolidated $ 139.1 $ 140.7 The backlog is composed of written orders for products for which prices are typically established at the time the order is placed, primarily standard catalog items.
Raw Materials The principal raw materials used in the manufacture of the Company’s products are coil and bar steel, stainless steel, copper wire and aluminum ingot. Major components are electric motors, electrical components, motor protectors, forgings, gray iron castings, plastic resins and bearings. Most of these raw materials are available from multiple sources in the U.S. and world markets.
Major components are electric motors, electrical components, motor protectors, forgings, gray iron castings, plastic resins and bearings. Most of these raw materials are available from multiple sources in the U.S. and world markets.
Water Systems also manufactures electronic drives and controls for the motors which control functionality and provide protection from various hazards, such as electrical surges, over-heating and dry wells or dry tanks.
Water Systems also manufactures electronic drives and controls for the motors which control functionality and provide protection from various hazards, such as electrical surges, over-heating and dry wells or dry tanks. In 2023, the Company acquired substantially all of the assets of Action Manufacturing & Supply, Inc. expanding its portfolio in water treatment systems.
In 2023, the Distribution segment acquired substantially all of the assets of LCA Pump, LLC, which operated Water Works Pump, a professional groundwater distributor operating in the Midwest. 5 Information Regarding All Reportable Segments Research and Development The Company incurred research and development expenses as follows: (In millions) 2024 2023 2022 Research and development expenses $ 21.5 $ 17.7 $ 16.7 Expenses incurred were for activities related to the development of new products, improvement of existing products and manufacturing methods and other applied research and development.
Information Regarding All Reportable Segments Research and Development The Company incurred research and development expenses as follows: (In millions) 2025 2024 2023 Research and development expenses $ 20.0 $ 21.5 $ 17.7 Expenses incurred were for activities related to the development of new products, improvement of existing products and manufacturing methods and other applied research and development. 5 The Company owns a number of patents, trademarks, and licenses.
The Company owns a number of patents, trademarks, and licenses. In the aggregate, these patents are of material importance to the operation of the business; however, the Company believes that its operations are not dependent on any single patent or group of patents.
In the aggregate, these patents are of material importance to the operation of the business; however, the Company believes that its operations are not dependent on any single patent or group of patents. Raw Materials The principal raw materials used in the manufacture of the Company’s products are coil and bar steel, stainless steel, copper wire and aluminum ingot.
The Company’s principal competitors in the petroleum equipment industry are Vontier Corporation and Dover Corporation. 2024 Energy Systems research and development expenditures were primarily related to the following activities: • Developed new overfill protection valve for the Indian market with a more robust valve design • Developed Distribution Transformer Monitoring antenna, which allows for improved wireless monitoring transmission • Developed new fiberglass tank sump and cover to withstand increased weight and side compression • Developed Remote Integration Panel to allow remote control and power cycling of breakers at fueling stations • Developed Trip Signature Monitor for continuous monitoring of substation circuit breakers • Developed EV-Controls NexPhase 800 & 2000A, an upgraded electric vehicle charger switchgear Distribution Segment The Distribution segment is operated as a collection of wholly owned leading groundwater distributors known as the Headwater Companies.
The Company’s principal competitors in the petroleum equipment industry are Vontier Corporation and Dover Corporation. 2025 Energy Systems research and development expenditures were primarily related to the following activities: • Developed 220V & 380V Guardian variable frequency drives • Developed wireless sensor for humidity monitoring and underground tank desiccant system • Developed new fiberglass tank sump and cover to withstand increased weight and side compression • Developed Optimizer3 Trip Signature Monitor for continuous monitoring of substation circuit breakers • Developed EVO LLD (line leak detection) to detect and minimize leaks Distribution Segment The Distribution segment is operated as a collection of wholly owned leading groundwater distributors known as the Headwater Companies.
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In the three years ended December 31, 2024, the Company only completed one significant acquisition in the segment when it acquired substantially all of the assets of Action Manufacturing & Supply, Inc. in 2023 expanding its portfolio in water treatment systems. In February 2025, the Company acquired PumpEng Pty Ltd.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe Company has significant operations outside the United States, including Europe, South Africa, Brazil, Mexico, India, China, Turkey, Canada and Argentina. Further, the Company obtains raw materials and finished goods from foreign suppliers. Accordingly, the Company’s business is subject to political, economic, and other risks that are inherent in operating a multinational business.
Biggest changeRisks Related to the Business The Company is exposed to political, economic and other risks that arise from operating a multinational business. The Company has significant operations outside the United States, including Europe, South Africa, Brazil, Mexico, India, China, Turkey, Canada and Argentina. Further, the Company obtains raw materials and finished goods from foreign suppliers.
The Company experiences seasonal demand in a number of markets within the Water Systems segment. End-user demand in primary markets follows warm weather trends and is at seasonal highs from April to August in the Northern Hemisphere. Demand for residential 9 and agricultural water systems are also affected by weather-related disasters including heavy flooding and drought.
The Company experiences seasonal demand in a number of markets within the Water Systems segment. End-user demand in primary markets follows warm weather trends and is at seasonal highs from April to August in the Northern Hemisphere. Demand for residential and agricultural water systems are also affected by weather-related disasters including heavy flooding and drought.
Both domestic and international tax laws 7 are subject to change as a result of changes in fiscal policy, legislation, evolution of regulation and court rulings. The application of these tax laws and related regulations is subject to legal and factual interpretation, judgment, and uncertainty.
Both domestic and international tax laws are subject to change as a result of changes in fiscal policy, legislation, evolution of regulation and court rulings. The application of these tax laws and related regulations is subject to legal and factual interpretation, judgment, and uncertainty.
The recognition of an impairment of a significant portion of the Company’s goodwill or intangible assets could have a material adverse impact on the Company’s results of operations and financial condition. The Company’s business may be adversely affected by the seasonality of sales and weather conditions.
The recognition of an impairment of a significant portion of the Company’s goodwill or intangible assets could have a material adverse impact on the Company’s results of operations and financial condition. 9 The Company’s business may be adversely affected by the seasonality of sales and weather conditions.
These risks include, but are not limited to, the following: • Difficulty in enforcing agreements and collecting receivables through foreign legal systems • Trade protection measures and import or export licensing requirements • Inability to obtain raw materials and finished goods in a timely manner from foreign suppliers • Imposition of tariffs, exchange controls or other restrictions (including recent U.S. tariffs imposed or threatened to be imposed on China, Canada and Mexico and other countries and any retaliatory actions taken by such countries) • Difficulty in staffing and managing widespread operations and the application of foreign labor regulations • Compliance with foreign laws and regulations • Changes in general economic and political conditions in countries where the Company operates Additionally, the Company’s operations outside the United States could be negatively impacted by changes in treaties, agreements, policies, and laws implemented by the United States.
These risks include, but are not limited to, the following: • Difficulty in enforcing agreements and collecting receivables through foreign legal systems • Trade protection measures and import or export licensing requirements • Inability to obtain raw materials and finished goods in a timely manner from foreign suppliers • Imposition of exchange controls or other restrictions • Difficulty in staffing and managing widespread operations and the application of foreign labor regulations • Compliance with foreign laws and regulations • Changes in general economic and political conditions in countries where the Company operates Additionally, the Company’s operations outside the United States could be negatively impacted by changes in treaties, agreements, policies, and laws implemented by the United States.
The Company’s product lines have expanded significantly and certain products are subject to government regulations and standards for manufacture, assembly, and performance in addition to the warranties provided by the Company.
The Company’s products are subject to government regulations and standards for manufacture, assembly, and performance in addition to the warranties provided by the Company.
As a result, the Company started remeasuring the financial statements for the Company’s Turkish operations in accordance with the highly inflationary accounting rules in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 830 "Foreign Currency Matters" as of the beginning of the second quarter of 2022.
As a result, the Company remeasures the financial statements for the Company's Turkish and Argentinian operations in accordance with the highly inflationary accounting rules in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 830 "Foreign Currency Matters".
To the extent that these mitigating strategies are not successful, foreign currency rate fluctuations can have a material adverse impact on the Company’s international operations or on the business as a whole. In the second quarter of 2022, the Company concluded that Turkey represents a highly inflationary economy as its three-year cumulative inflation rate exceeded 100 percent.
To the extent that these mitigating strategies are not successful, foreign currency rate fluctuations can have a material adverse impact on the Company’s international operations or on the business as a whole. Turkey and Argentina represent highly inflationary economies as their three-year cumulative inflation rate exceeded 100 percent.
The Company’s acquisition strategy entails expense, integration risks, and other risks that could affect the Company’s earnings and financial condition. One of the Company’s continuing strategies is to increase revenues and expand market share through acquisitions that will provide complementary Water and Energy Systems products, add to the Company’s global reach, 8 or both.
One of the Company’s continuing strategies is to increase revenues and expand market share through acquisitions that will provide complementary Water and Energy Systems products, add to the Company’s global reach, or both.
Turkey and Argentina becoming highly inflationary economies has had an adverse effect on the Company’s consolidated results of operations and further inflation may have additional adverse effects on the Company's consolidated financial position, results of operations, or cash flows in future periods.
Turkey and Argentina being highly inflationary economies has had an adverse effect on the Company’s consolidated results of operations and further inflation may have additional adverse effects on the Company's consolidated financial position, results of operations, or cash flows in future periods. 8 The Company’s acquisition strategy entails expense, integration risks, and other risks that could affect the Company’s earnings and financial condition.
On December 15, 2022, the European Union (EU) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (OECD) Pillar Two Framework.
If the tax laws change in a manner that increases the Company’s tax obligation, it could have a material adverse impact on the Company’s results of operations and financial condition. 7 On December 15, 2022, the European Union (EU) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (OECD) Pillar Two Framework.
In 2024, Pillar Two did not have a material impact on the Company’s income tax liability, provision for income taxes, or effective tax rate, nor does the Company expect a material impact in the future. Risks Related to the Business The Company is exposed to political, economic and other risks that arise from operating a multinational business.
Pillar Two has not had a material impact on the Company’s income tax liability, provision for income taxes, or effective tax rate, nor does the Company expect a material impact in the future. Changes in foreign trade policies and other factors beyond our control may adversely impact our business and financial performance.
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If the tax laws change in a manner that increases the Company’s tax obligation, it could have a material adverse impact on the Company’s results of operations and financial condition.
Added
In January 2026, the OECD issued additional guidance, including a safe harbor framework for certain U.S. parented groups that is expected to largely reduce the impact of Pillar Two for the Company. Even with this safe harbor, the Company could still be subject to local minimum tax regimes in countries that have adopted these rules.
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The Company also remeasures its financial statements for its Argentina operations in accordance with the highly inflationary accounting rules.
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The U.S. government recently implemented significant trade policy and tariff actions, including but not limited to tariffs on imported steel and aluminum products, multiple tariffs on certain imports from China, tariffs on certain imports from Canada and Mexico, and baseline tariffs on most imports from most other countries.
Added
These actions have increased the cost of certain raw materials and components and created significant uncertainty and potential risks for our business. Certain countries have announced retaliatory tariffs in response to such actions.
Added
The U.S. government or other foreign governments may in the future propose and implement additional changes to international trade agreements, tariffs, taxes, and other government rules and regulations and, if initiated, retaliatory tariffs or other actions may be taken by certain governments.
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While the future financial impact of these actions and potential additional tariff actions and retaliatory actions by the U.S. or other countries remain unknown, the impacts could have a material adverse effect on our financial statements in any particular reporting period.
Added
Accordingly, the Company’s business is subject to political, economic, and other risks that are inherent in operating a multinational business.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company has established policies, processes, and controls that are designed to monitor, detect, investigate, respond to, and escalate management of cybersecurity threats and incidents.
Biggest changeThe Company’s data protection and privacy program is designed to adhere to and adapt to global privacy and data protection laws. 10 The Company has established policies, processes, and controls that are designed to monitor, detect, investigate, respond to, and escalate management of cybersecurity threats and incidents.
If the Company experiences a cybersecurity incident, the Company activates an incident response plan, which includes processes to enable it to triage, assess severity of, escalate, contain, 10 investigate, and remediate the incident, as well as to comply with applicable legal obligations and mitigate brand and reputational harm.
If the Company experiences a cybersecurity incident, the Company activates an incident response plan, which includes processes to enable it to triage, assess severity of, escalate, contain, investigate, and remediate the incident, as well as to comply with applicable legal obligations and mitigate brand and reputational harm.
A key area for the program is employee cybersecurity education. The Company’s employees play a key role in cybersecurity and participate in mandatory cybersecurity training, phishing attack simulations, educational events, and receive news bulletins. The Company’s data protection and privacy program is designed to adhere to and adapt to global privacy and data protection laws.
A key area for the program is employee cybersecurity education. The Company’s employees play a key role in cybersecurity and participate in mandatory cybersecurity training, phishing attack simulations, educational events, and receive news bulletins.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeBesides the owned corporate facility, the Company considers the following to be principal properties: Location / Segment Purpose Own/Lease Santa Catarina, Brazil / Water & Energy Manufacturing/Distribution/Sales Own Sao Paulo, Brazil / Water & Energy Manufacturing/Distribution/Sales Own Jiangsu Province, China / Water & Energy Manufacturing Own Brno, Czech Republic / Water Manufacturing Own Vicenza, Italy / Water Manufacturing Own Nuevo Leon, Mexico / Water & Energy Manufacturing Own Edenvale, South Africa / Water Manufacturing Own Izmir, Turkey / Water & Energy Manufacturing/Distribution/Sales/R&D Own Indiana, United States / Water Manufacturing/Distribution/Sales Lease Montana, United States / Distribution Distribution Own North Carolina, United States / Distribution Distribution Own Oklahoma, United States / Water Manufacturing Own Oregon, United States / Water Manufacturing/Distribution/Sales/R&D Lease Wisconsin, United States / Energy Manufacturing/Distribution/Sales/R&D Own The Company also owns and leases other smaller facilities which serve as manufacturing locations and distribution warehouses.
Biggest changeBesides the owned corporate facility, the Company considers the following to be principal properties: Location / Segment Purpose Own/Lease Santa Catarina, Brazil / Water & Energy Manufacturing/Distribution/Sales Own Sao Paulo, Brazil / Water & Energy Manufacturing/Distribution/Sales Own Jiangsu Province, China / Water & Energy Manufacturing Own Cundinamarca, Colombia / Water Manufacturing Own Brno, Czech Republic / Water Manufacturing Own Vicenza, Italy / Water Manufacturing Own Nuevo Leon, Mexico / Water & Energy Manufacturing Own Edenvale, South Africa / Water Manufacturing Own Izmir, Turkey / Water & Energy Manufacturing/Distribution/Sales/R&D Own Florida, United States / Water Manufacturing Lease Indiana, United States / Water Manufacturing/Distribution/Sales Lease Montana, United States / Distribution Distribution Own North Carolina, United States / Distribution Distribution Own Oklahoma, United States / Water Manufacturing Own Oregon, United States / Water Manufacturing/Distribution/Sales/R&D Lease Wisconsin, United States / Energy Manufacturing/Distribution/Sales/R&D Own The Company also owns and leases other smaller facilities which serve as manufacturing locations and distribution warehouses.
ITEM 2. PROPERTIES Franklin Electric serves customers worldwide with over 220 manufacturing and distribution facilities located in over 20 countries. The Global Headquarters is located in Fort Wayne, Indiana, United States and houses sales, marketing and administrative offices along with a state-of-the-art research and engineering facility.
ITEM 2. PROPERTIES Franklin Electric serves customers worldwide with over 240 manufacturing and distribution facilities located in over 20 countries. The Global Headquarters is located in Fort Wayne, Indiana, United States and houses sales, marketing and administrative offices along with a state-of-the-art research and engineering facility.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeSengstack 66 Chairperson of the Board 2015 - present Chief Executive Officer 2015 - 2024 Joseph A. Ruzynski 49 Chief Executive Officer 2024-present President of Enclosures, nVent Electric plc 2018-2024 Jeffery L.
Biggest changeRuzynski 50 Chief Executive Officer 2024-present President of Enclosures, nVent Electric plc 2018-2024 Jennifer A. Wolfenbarger 51 Vice President, Chief Financial Officer 2025 - present Vice President, Chief Financial Officer, Insulation, Owens Corning 2021 - 2025 Vice President, Group Chief Financial Officer Global Quality and Operations, Stryker 2018-2021 Brent L.
Grandon 49 Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary 2016 - present All executive officers are elected annually by the Board of Directors at the Board meeting held in conjunction with the annual meeting of shareholders.
Grandon 50 Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary 2016 - present All executive officers are elected annually by the Board of Directors at the Board meeting held in conjunction with the annual meeting of shareholders.
ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 12 INFORMATION ABOUT OUR EXECUTIVE OFFICERS Current executive officers of the Company, their ages, current position, and business experience during at least the past five years as of December 31, 2024, are as follows: Name Age Position Held Period Holding Position Gregg C.
ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 12 INFORMATION ABOUT OUR EXECUTIVE OFFICERS Current executive officers of the Company, their ages, current position, and business experience during at least the past five years as of December 31, 2025, are as follows: Name Age Position Held Period Holding Position Joseph A.
Levine 51 Vice President and President, Global Water 2023 - present President and CEO, Motion Control and Drives, Nidec Corporation 2020-2023 President, Motion Control, Nidec Corporation 2016-2020 Jay J. Walsh 55 Vice President and President, Energy Systems 2019 - present Jonathan M.
Davis 60 Vice President and President, Headwater Companies 2017 - present Greg M. Levine 52 Vice President and President, Global Water 2023 - present President and CEO, Motion Control and Drives, Nidec Corporation 2020-2023 Jay J. Walsh 56 Vice President and President, Energy Systems 2019 - present Jonathan M.
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Taylor 58 Vice President, Chief Financial Officer 2021 - present Chief Financial Officer, Blue Bird Corporation 2020 - 2021 Senior Vice President and Chief Financial Officer, Wabash National Corporation 2014 - 2020 Brent L.
Added
Spikes 54 Vice President, Global Manufacturing 2022 - present Vice President, Global Water Engineering 2020 - 2022 Daniela M. Williams 49 Vice President, Chief Human Resources Officer 2025 - present Global Vice President of People & Culture, Visteon Corporation 2022 - 2025 Senior Human Resources Director - Corporate Functions and Americas Region, Visteon Corporation 2018-2022 DeLancey W.
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Spikes 53 Vice President, Global Manufacturing 2022 - present Vice President, Global Water Engineering 2020 - 2022 Vice President, Manufacturing & Manufacturing Engineering 2019 - 2020 DeLancey W. Davis 59 Vice President and President, Headwater Companies 2017 - present Greg M.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock Performance Graph The following graph compares the Company’s cumulative total shareholder return (Common Stock price appreciation plus dividends, on a reinvested basis) over the last five fiscal years with the Guggenheim S&P Global Water Index and the Russell 2000 Index.
Biggest changePeriod Total Number of Shares Repurchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan Maximum Number of Shares that may be Repurchased October 1 - October 31 — $ — — 1,126,635 November 1 - November 30 — $ — — 1,126,635 December 1 - December 31 350,000 $ 97.93 350,000 776,635 Total 350,000 $ 97.93 350,000 776,635 14 Stock Performance Graph The following graph compares the Company’s cumulative total shareholder return (Common Stock price appreciation plus dividends, on a reinvested basis) over the last five fiscal years with the Invesco S&P Global Water Index and the Russell 2000 Index.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES The number of shareholders of record as of February 5, 2025 was 554. The Company’s stock is traded on the NASDAQ Global Select Market under the symbol FELE.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES The number of shareholders of record as of February 4, 2026 was 529. The Company’s stock is traded on the NASDAQ Global Select Market under the symbol FELE.
Dividends paid per common share as quoted by the NASDAQ Global Select Market for 2024 and 2023 were as follows: Dividends per Share 2024 2023 1st Quarter $ .250 $ .225 2nd Quarter $ .250 $ .225 3rd Quarter $ .250 $ .225 4th Quarter $ .250 $ .225 The Company has increased dividend payments on an annual basis for 32 consecutive years.
Dividends paid per common share as quoted by the NASDAQ Global Select Market for 2025 and 2024 were as follows: Dividends per Share 2025 2024 1st Quarter $ .265 $ .250 2nd Quarter $ .265 $ .250 3rd Quarter $ .265 $ .250 4th Quarter $ .265 $ .250 The Company has increased dividend payments on an annual basis for 33 consecutive years.
In October 2024, the Company’s Board of Directors approved a plan to increase the number of shares remaining for repurchase by an additional 1,000,000 shares. The Company did not repurchase any shares under this plan during the fourth quarter of 2024.
In October 2024, the Company’s Board of Directors approved a plan to increase the number of shares remaining for repurchase by an additional 1,000,000 shares. In June 2025, the Company's Board of Directors approved a plan to increase the number of shares remaining for repurchase by an additional 1,200,000 shares.
Hypothetical $100 invested on December 31, 2019 (fiscal year-end 2019) in Fra nklin Electric common stock (FELE), Guggenheim S&P Global Water Index, and Russell 2000 Index, assuming reinvestment of dividends: YE 2019 2020 2021 2022 2023 2024 FELE $ 100 $ 121 $ 165 $ 141 $ 151 $ 156 Guggenheim S&P Global Water 100 114 147 115 133 136 Russell 2000 100 118 135 107 125 140 14
Hypothetical $100 invested on December 31, 2020 (fiscal year-end 2020) in Fra nklin Electric common stock (FELE), Invesco S&P Global Water Index, and Russell 2000 Index, assuming reinvestment of dividends: YE 2020 2021 2022 2023 2024 2025 FELE $ 100 $ 137 $ 116 $ 125 $ 129 $ 128 Invesco S&P Global Water Index 100 130 101 117 122 145 Russell 2000 100 114 90 106 118 133 15
The maximum number of shares that may still be purchased under this plan as of December 31, 2024 is 1,367,593.
The authorization was in addition to the 1,126,635 shares that remained available for repurchase as of June 9, 2025. The Company repurchased 350,000 shares for approximately $34.3 million under this plan during the fourth quarter of 2025. The maximum number of shares that may still be purchased under this plan as of December 31, 2025 is 776,635.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe payment schedule for these contractual obligations is as follows: (In millions) More than Total 2025 2026-2027 2028-2029 5 years Debt $ 129.5 $ 117.8 $ 3.0 $ 2.9 $ 5.8 Debt interest 9.4 7.5 1.0 0.5 0.4 Operating leases 73.5 22.7 30.2 13.9 6.7 Purchase obligations 12.6 12.6 — — — Income Taxes-U.S.
Biggest changeThe payment schedule for these contractual obligations is as follows: (In millions) More than Total 2026 2027-2028 2029-2030 5 years Debt $ 167.1 $ 31.8 $ 3.0 $ 3.1 $ 129.2 Debt interest 49.5 8.5 14.4 13.8 12.8 Operating leases 77.6 24.4 31.0 13.5 8.7 Purchase obligations 8.5 8.5 — — — $ 302.7 $ 73.2 $ 48.4 $ 30.4 $ 150.7 Interest payments on debt obligations are calculated for future periods using interest rates in effect at the end of 2025.
These jurisdictions have different tax rates, and the Company determines the allocation of income to each of these jurisdictions based upon various estimates and assumptions. In the normal course of business, the Company will undergo tax audits by various tax jurisdictions.
These jurisdictions have different tax rates, and the Company determines the allocation of income to each 21 of these jurisdictions based upon various estimates and assumptions. In the normal course of business, the Company will undergo tax audits by various tax jurisdictions.
There were no material changes to estimates or methodologies used to develop those estimates in 2024. The Company’s critical accounting estimates are identified below: Inventory Valuation The Company uses certain estimates and judgments to value inventory. Inventory is recorded at the lower of cost or net realizable value. The Company reviews its inventories for excess or obsolete products or components.
There were no material changes to estimates or methodologies used to develop those estimates in 2025. The Company’s critical accounting estimates are identified below: Inventory Valuation The Company uses certain estimates and judgments to value inventory. Inventory is recorded at the lower of cost or net realizable value. The Company reviews its inventories for excess or obsolete products or components.
The Company is required to record an impairment if these assumptions and estimates change whereby the fair value of the reporting units or indefinite-lived intangible assets are below their associated carrying values. During the fourth quarter of 2024, the Company completed its annual impairment tests of goodwill and indefinite-lived trade names.
The Company is required to record an impairment if these assumptions and estimates change whereby the fair value of the reporting units or indefinite-lived intangible assets are below their associated carrying values. During the fourth quarter of 2025, the Company completed its annual impairment tests of goodwill and indefinite-lived trade names.
CAPITAL RESOURCES AND LIQUIDITY Sources of Liquidity The Company's primary sources of liquidity are cash on hand, cash flows from operations, revolving credit agreements, and long-term debt funds available. The Company believes its capital resources and liquidity position at December 31, 2024 is adequate to meet projected needs for the foreseeable future.
CAPITAL RESOURCES AND LIQUIDITY Sources of Liquidity The Company's primary sources of liquidity are cash on hand, cash flows from operations, revolving credit agreements, and long-term debt funds available. The Company believes its capital resources and liquidity position at December 31, 2025 is adequate to meet projected needs for the foreseeable future.
Related to the unrecognized tax benefits, the Company has also recorded a liability for potential penalties and interest of $0.1 million.
Related to the unrecognized tax benefits, the Company has also recorded a liability for potential penalties and interest of $1.1 million.
The Company also has unrecognized tax benefits, none of which are included in the table above. The unrecognized tax benefits of approximately $1.3 million have been recorded as liabilities and the Company is uncertain as to if or when such amounts may be settled.
The Company also has unrecognized tax benefits, none of which are included in the table above. The unrecognized tax benefits of approximately $3.0 million have been recorded as liabilities and the Company is uncertain as to if or when such amounts may be settled.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Discussion of the year-over-year comparison of changes in the Company's financial condition and results of operation as of and for the fiscal years ended December 31, 2023 and December 31, 2022 can be found in Part II, Item 7.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Discussion of the year-over-year comparison of changes in the Company's financial condition and results of operation as of and for the fiscal years ended December 31, 2024 and December 31, 2023 can be found in Part II, Item 7.
In addition, due to the timing of funding in future periods being uncertain and dependent on future movements in interest rates, investment returns, changes in laws and regulations and other variables, the table above excludes the non-current liability of $24.1 million for cash outflows related to the Company's pension plans.
In addition, due to the timing of funding in future periods being uncertain and dependent on future movements in interest rates, investment returns, changes in laws and regulations and other variables, the table above excludes the non-current liability of $17.0 million for cash outflows related to the Company's pension plans.
The Company expects that ongoing requirements for operations, capital expenditures, pension obligations, dividends, share repurchases, and debt service will be adequately funded from cash on hand, operations, and existing credit agreements. As of December 31, 2024, the Company had a $350.0 million revolving credit facility. The facility is scheduled to mature on May 13, 2026.
The Company expects that ongoing requirements for operations, 18 capital expenditures, pension obligations, dividends, share repurchases, and debt service will be adequately funded from cash on hand, operations, and existing credit agreements. As of December 31, 2025, the Company had a $350.0 million revolving credit facility. The facility is scheduled to mature on May 14, 2030.
Identifiable intangible assets are initially valued using a methodology commensurate with the intended use of the asset. The fair value of customer relationships is measured using the multi-period excess earnings method ("MPEEM").
The identifiable intangible assets acquired typically include customer relationships and trade names. Identifiable intangible assets are initially valued using a methodology commensurate with the intended use of the asset. The fair value of customer relationships is measured using the multi-period excess earnings method ("MPEEM").
The acquisition purchase price is allocated to the assets acquired and liabilities assumed based upon their respective fair values. The Company utilizes management estimates and may use an independent third-party valuation firm to assist in determining the fair values of assets acquired, including intangible assets, and liabilities assumed. The identifiable intangible assets acquired typically include customer relationships and trade names.
The acquisition purchase price is allocated to the assets acquired and liabilities assumed based upon their respective fair values. The Company utilizes management estimates and may use an independent third-party valuation firm to assist in determining the fair values of assets 20 acquired, including intangible assets, and liabilities assumed.
The income approach utilizes assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets. These cash flows consider factors regarding expected future operating income and historical trends, as well as the effects of demand and competition.
The income approach utilizes assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets. These cash flows consider factors regarding expected future operating income and historical trends, as well as the effects of demand and competition. The future cash flows are discounted using an applicable discount rate.
Cash Flows The following table summarizes significant sources and uses of cash and cash equivalents: (in millions) 2024 2023 Cash flows from operating activities $ 261.4 $ 315.7 Cash flows from investing activities $ (45.6) $ (74.3) Cash flows from financing activities $ (74.1) $ (192.2) Impact of exchange rates on cash and cash equivalents $ (6.1) $ (10.0) Change in cash and cash equivalents $ 135.6 $ 39.2 Cash Flows from Operating Activities 2024 vs 2023 Net cash provided by operating activities was $261.4 million for 2024 compared to $315.7 million for 2023.
Cash Flows The following table summarizes significant sources and uses of cash and cash equivalents: (in millions) 2025 2024 Cash flows from operating activities $ 238.9 $ 261.4 Cash flows from investing activities $ (157.1) $ (45.6) Cash flows from financing activities $ (197.3) $ (74.1) Impact of exchange rates on cash and cash equivalents $ (5.3) $ (6.1) Change in cash and cash equivalents $ (120.9) $ 135.6 Cash Flows from Operating Activities 2025 vs 2024 Net cash provided by operating activities was $238.9 million for 2025 compared to $261.4 million for 2024.
The effective tax rate differs from the U.S. statutory rate of 21 percent, primarily due to U.S. states taxes, foreign earnings taxed at rates higher than the U.S. statutory rate, and nondeductible officer’s compensation, partially offset by the recognition of the U.S. foreign-derived intangible income (FDII) provisions, certain incentives, and discrete events.
The effective tax rate differs from the U.S. statutory rate of 21 percent primarily due to foreign earnings taxed at rates higher than the U.S. statutory rate, U.S. state taxes, Pillar Two Global Minimum Tax, and nondeductible officer’s compensation, which were partially offset by an object exemption of foreign business profits in the Netherlands, the recognition of the U.S. foreign-derived intangible income (FDII) provisions, certain incentives, and discrete events.
As of December 31, 2024, the Company had $304.1 million borrowing capacity under the Credit Agreement as $4.5 million in letters of commercial and standby letters of credit were outstanding and undrawn and $41.4 million in revolver borrowings were drawn or outstanding.
As of December 31, 2025, the Company had $313.6 million borrowing capacity under the Credit Agreement as $6.4 million in letters of commercial and standby letters of credit were outstanding and undrawn and $30.0 million in revolver borrowings were drawn or outstanding.
The intersegment profit elimination impact in 2024 compared to 2023 was an unfavorable $2.7 million. T he intersegment elimination of operating income effectively defers the operating income on sales from Water Systems to Distribution in the consolidated financial results until such time as the transferred product is sold from the Distribution segment to its end third party customer.
The intersegment elimination of operating income effectively defers the operating income on sales from Water Systems to Distribution in the consolidated financial results until such time as the transferred product is sold from the Distribution segment to its end third party customer.
Net Income Net income for 2024 was $181.6 million compared to 2023 net income of $194.7 million. Net income attributable to Franklin Electric Co., Inc. for 2024 was $180.3 million, or $3.86 per diluted share, compared to 2023 net income attributable to Franklin Electric Co., Inc. of $193.3 million, or $4.11 per diluted share.
Net Income Net income for 2025 was $148.7 million compared to 2024 net income of $181.6 million. Net income attributable to Franklin Electric Co., Inc. for 2025 was $147.1 million, or $3.22 per diluted share, compared to 2024 net income attributable to Franklin Electric Co., Inc. of $180.3 million, or $3.86 per diluted share.
Cash Flows from Investing Activities 2024 vs. 2023 Net cash used in investing activities was $45.6 million in 2024 compared to $74.3 million in 2023. The change in investing cash flow was primarily attributable to decreased acquisition activity in 2024.
The change in investing cash flow was primarily attributable to increased acquisition activity in 2025. Cash Flows from Financing Activities 2025 vs. 2024 Net cash used by financing activities was $197.3 million in 2025 compared to $74.1 million in 2024.
Market conditions have caused the weighted-average discount rate to move from 4.90 percent last year to 5.48 20 percent this year for the domestic pension plans and from 4.88 percent last year to 5.47 percent this year for the postretirement health and life insurance plan.
The weighted-average discount rate was 5.48 percent last year compared to 4.07 percent this year for the domestic pension plans and from 5.47 percent last year to 5.04 percent this year for the postretirement health and life insurance plan.
Operating income (loss) (In millions) 2024 2023 2024 v 2023 Water Systems $ 197.9 $ 196.6 $ 1.3 Energy Systems 93.6 92.7 0.9 Distribution 24.3 34.3 (10.0) Corporate Expenses and Eliminations (72.2) (61.2) (11.0) Consolidated $ 243.6 $ 262.4 $ (18.8) Operating Income-Water Systems Water Systems operating income in 2024 was $197.9 million, an increase of $1.3 million as compared to the prior year.
Operating income (loss) (In millions) 2025 2024 2025 v 2024 Water Systems $ 207.2 $ 197.9 $ 9.3 Energy Systems 99.1 93.6 5.5 Distribution 39.8 24.3 15.5 Corporate Expenses and Eliminations (77.2) (72.2) (5.0) Consolidated $ 268.9 $ 243.6 $ 25.3 Operating Income-Water Systems Water Systems operating income in 2025 was $207.2 million, an increase of $9.3 million as compared to the prior year.
There is inherent uncertainty in forecasted future cash flows and therefore, actual results may differ and could result in subsequent impairment charges of acquired intangible assets and/or goodwill. 19 Indefinite-Lived Intangible Asset and Goodwill Impairment Evaluation According to FASB ASC Topic 350, Intangibles - Goodwill and Other , goodwill and other intangible assets with indefinite lives must be tested for impairment at least annually or more frequently as warranted by triggering events that indicate potential impairment.
Indefinite-Lived Intangible Asset and Goodwill Impairment Evaluation According to FASB ASC Topic 350, Intangibles - Goodwill and Other , goodwill and other intangible assets with indefinite lives must be tested for impairment at least annually or more frequently as warranted by triggering events that indicate potential impairment.
The change in financing cash flow was primarily due to net borrowings under the Company's credit facility in 2024 compared to net repayments in 2023, partially offset by lower proceeds from option exercises, increased share repurchase activity and higher dividends. AGGREGATE CONTRACTUAL OBLIGATIONS The majority of the Company’s contractual obligations to third parties relate to debt obligations.
The change in financing cash flow was primarily due to increased repurchases of Company stock, offset by higher net borrowings under the Company's credit facility in 2025 compared to 2024. 19 AGGREGATE CONTRACTUAL OBLIGATIONS The majority of the Company’s contractual obligations to third parties relate to debt obligations.
Certain of these projected interest payments may differ in the future based on interest rates or other factors or events.
Certain of these projected interest payments may differ in the future based on interest rates or other factors or events. The projected interest payments only pertain to obligations and agreements outstanding at December 31, 2025.
Gross Profit and Expense Ratios Fiscal Year (In Millions) 2024 % of Net Sales 2023 % of Net Sales Gross Profit $ 717.3 35.5 % $ 697.0 33.8 % Selling, General and Administrative Expense 470.1 23.3 % 433.5 21.0 % Gross Profit The gross profit margin ratio was 35.5 percent and 33.8 percent in 2024 and 2023, respectively.
Gross Profit and Expense Ratios Twelve months ended Dec 31, (In Millions) 2025 % of Net Sales 2024 % of Net Sales Gross Profit $ 755.9 35.5 % $ 717.3 35.5 % Selling, General and Administrative Expense 486.2 22.8 % 470.1 23.3 % Gross Profit The gross profit margin ratio was 35.5 percent in 2025 and 2024, respectively.
General and administrative expense s increased $8.3 million, co mpared to the prior year. The increase was primarily driven by to higher employee compensation costs, including incremental expenses associated with the Company’s CEO transition. Interest Expense Interest expense wa s $6.3 million in 2024 and $11.8 million in 2023, respectively.
General and administrative expenses increased $3.0 million compared to the prior year, primarily due to higher employee compensation costs, including incremental expenses associated with the Company’s executive leadership transitions. Interest Expense Interest expense was $10.6 million and $6.3 million in 2025 and 2024, respectively. The increase in 2025 was primarily driven by higher average amount of outstanding debt.
Net Sales (In millions) 2024 2023 2024 v 2023 Water Systems $ 1,184.0 $ 1,203.7 $ (19.7) Energy Systems 273.7 296.5 (22.8) Distribution 685.5 673.3 12.2 Eliminations (121.9) (108.4) (13.5) Consolidated $ 2,021.3 $ 2,065.1 $ (43.8) Net Sales-Water Systems Water Systems net sales decreased 2 percent in 2024, as compared to the prior year.
Net Sales (In millions) 2025 2024 2025 v 2024 Water Systems $ 1,256.4 $ 1,184.0 $ 72.4 Energy Systems 299.0 273.7 25.3 Distribution 700.7 685.5 15.2 Eliminations (124.8) (121.9) (2.9) Consolidated $ 2,131.3 $ 2,021.3 $ 110.0 Net Sales-Water Systems Water Systems net sales increased 6 percent in 2025, as compared to the prior year.
Dollar relative to the Argentine Peso, Turkish Lira and Brazilian Real. However, the Company increases prices in the local currency to offset the impact of currency devaluation in the Argentina and Turkey highly inflationary economies. As a result, the net negative impact of foreign currency exchange rates on net sales was 1 percent in 2024.
Sales were negatively impacted by changes in foreign exchange rates, principally due to the strengthening of the U.S. Dollar relative to the Argentine Peso, Turkish Lira and Brazilian Real. However, the Company increased prices in the local currency to offset the impact of currency devaluation in the Argentina and Turkey highly inflationary economies.
The projected interest payments only pertain to obligations and agreements outstanding at December 31, 2024. 18 The Company has pension and other post-retirement benefit obligations not included in the table above which will result in estimated future payments of approximately $7.3 million in 2025.
The Company has pension and other post-retirement benefit obligations not included in the table above which will result in estimated future payments of approximately $6.2 million in 2026.
The 2024 operating income margin was 16.7 percent, an increase of 40 basis points from 16.3 percent in 2023 . Operating income and operating margin increased in 2024 primarily due to price realization, cost management and a favorable product and geographic sales mix shift.
The increase in operating income was primarily due to higher sales. The 2025 operating income margin was 16.5 percent, a decrease of 20 basis points from 16.7 percent in 2024. The decrease in operating income margin was primarily due to incremental expenses associated with recent acquisitions and an unfavorable product and geographic sales mix shift.
Operating Income-Energy Systems Energy Systems operating income in 2024 was $93.6 million, an increase of $0.9 million as compared to the prior year. The 2024 operating income margin was 34. 2 percent, an increase of 290 basis points from 31.3 percent in 2023.
Operating Income-Energy Systems Energy Systems operating income in 2025 was $99.1 million, an increase of $5.5 million as compared to the prior year. The increase was primarily due to higher sales. The 2025 operating income margin was 33.1 percent, a decrease of 110 basis points 17 from 34.2 percent in 2024.
Income Taxes The provision for income taxes in 2024 and 2023 were $50.2 million and $47.5 million, respectively. The effective tax rate for 2024 was about 22 percent and included a favorable benefit from discrete events of 1 percent. The effective tax rate for 2023 was about 20 percent and included a favorable benefit from discrete events of 1 percent.
The effective tax rate for 2025 was about 24 percent before and after the impact of discrete events. The effective tax rate for 2024 was about 22 percent and included a favorable benefit from discrete events of 1 percent.
On May 15, 2024, the Company entered into Amendment No. 1 that increased the total available facility amount from lenders to $250.0 million from $200.0 million. As of December 31, 2024, the remaining borrowing capacity on the New York Life Agreement was $175.0 million.
On May 15, 2024, the Company entered into Amendment No. 1 that increased the total available facility amount from lenders to $250.0 million from $200.0 million. On September 26, 2025, the Company issued and sold $75.0 million of fixed rate senior notes due September 26, 2032.
There is currently no need to repatriate these funds in order to meet domestic funding obligations or scheduled cash distributions.
At December 31, 2025, the Company had $67.3 million of cash and cash equivalents held in foreign jurisdictions, which the Company intends to use to fund foreign operations. There is currently no need to repatriate these funds in order to meet domestic funding obligations or scheduled cash distributions.
The expense in 2024 and 2023 was primarily due to transaction losses associated with the Turkish Lira and A rgentine Peso relative to the U.S. dollar. The Company reports the results of its subsidiaries in Argentina and Turkey using highly inflationary accounting, which requires that the functional currency of the entity be changed to the reporting currency of its parent.
The Company reports the results of its subsidiaries in Argentina and Turkey using highly inflationary accounting, which requires that the functional currency of the entity be changed to the reporting currency of its parent. Income Taxes The provision for income taxes 2025 and 2024 were $46.0 million and $50.2 million, respectively.
"Management’s Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. 2024 vs. 2023 OVERVIEW Net sales in 2024 decreased 2 percent co mpared to the prior year.
"Management’s Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. In the first quarter of 2025, the Company acquired Barnes de Colombia S.A. ("Barnes"), a leading manufacturer and distributor of industrial and commercial pumps based in Colombia.
The Company also maintains an uncommitted and unsecured note purchase and private shelf agreement with PGIM, Inc. and its affiliates (the "Prudential Agreement"). On May 15, 2024, the Company entered into Amendment No. 1 that increased the total available facility amount from lenders to $250.0 million from $150.0 million.
On May 15, 2024, the Company entered into Amendment No. 1 that increased the total available facility amount from lenders to $250.0 million from $150.0 million. On September 26, 2025, the Company issued and sold $50.0 million of fixed rate senior notes due September 26, 2032.
Energy Systems net sales in the U.S. and Canada decreased 3 percent in 2024, as compared to the prior year. Outside the U.S. and Canada, Energy Systems sales decreased 18 percent in 2024, as compared to the prior year.
Outside the U.S. and Canada, Energy Systems sales increased 13 percent in 2025, as compared to the prior year, due primarily to sales growth in the Asia Pacific region. Net Sales-Distribution Distribution net sales increased 2 percent in 2025, as compared to the prior year. The Distribution segment sales increased due to higher volumes and price realization.
Water Systems net sales in markets outside the U.S. and Canad a increased 4 percent in 2024 , as compared to the prior year. Sales decreased 4 pe rcent in 2024 due to the negative impact from foreign exchange rates, as compared to prior year.
The sales growth in 2025 was due to incremental sales impact from recent acquisitions of approximately 4 percent and price realization. Water Systems net sales in the U.S. and Canada increased 3 percent in 2025, as compared to the prior year.
Operating income and operating margin increased primarily due to a favorable geographic mix of sales, price realization and cost management. Operating Income-Distribution Distribution operating income in 2024 was $24.3 million, a decrease of $10.0 million as compared to the prior-year period.
Operating income margin decreased primarily due to higher tariff cost and an unfavorable geographic sales mix shift. Operating Income-Distribution Distribution operating income in 2025 was $39.8 million, an increase of $15.5 million as compared to the prior year. The 2025 operating income margin was 5.7 percent, an increase of 210 basis points from 3.5 percent in 2024.
A change in the discount rate selected by the Company of 25 basis points would result in a change of about $0.1 million to employee benefit expense and a change of about $2.4 million of liability. The Company consults with actuaries and investment advisors in making its determination of the expected long-term rate of return on plan assets.
A change in the discount rate selected by the Company of 25 basis points would result in no material change to employee benefit expense and a change of about $0.2 million of liability. One of the Company's domestic defined benefit plans was settled and terminated in 2025. For additional information, see note 10 - Employee Benefit Plans.
In 2024, sales of large dewatering equipmen t decreased 41 percent, s ales of water treatment products increased 11 percent, sales of groundwater pumping equipme nt increased 4 percent an d sales of all other surface pumping equipment increased 5 percent compared to 2023.
In 2025, sales of large dewatering equipment increased 7 percent, sales of water treatment products increased 6 percent, and sales of groundwater pumping equipment increased 1 percent, and sales of all other surface pumping equipment decreased 1 percent compared to 2024. 16 Water Systems net sales in markets outside the U.S. and Canada increased 10 percent in 2025, as compared to the prior year.
The sales decrease in 2024 was primarily due to lower volumes and the negative impact of foreign currency translation, partially offset by the incremental sales impact from recent acquisitions. The Company's consolidated gross profit was $717.3 m illion for 2024, an increase of $20.3 million from the prior year.
The sales increases were due to the incremental sales impact from recent acquisitions, price realization and higher volumes. The Company's consolidated gross profit was $755.9 million and $717.3 million, respectively, for 2025 and 2024, and increased 5 percent from the prior year. Diluted earnings per share was $3.22 for 2025, a decrease of $0.64 from the prior year.
Operating income and operating income margin decreased in 2024 primarily due to the negative impact on sales from wet weather across much of the United States, decreases in pricing of commodity-based products sold through the business and increased SG&A costs. 16 Operating Income-Corporate Expenses and Eliminations Operating income-corporate expenses and eliminations is composed primarily of intersegment sales and profit eliminations and unallocated general and administrative expenses.
Operating income and operating income margins increased primarily due to higher sales and reduced SG&A expenses as a result of cost actions implemented in 2024 to improve the performance of the segment. Operating Income-Corporate Expenses and Eliminations Operating income-Eliminations/Other is composed primarily of intersegment sales and profit eliminations and unallocated general and administrative expenses.
The decreases were across all product lines. 15 Net Sales-Distribution Distribution net sale s increased 2 percent in 2024 , as compared to the prior year.
Energy Systems net sales in the U.S. and Canada increased 8 percent in 2025, as compared to the prior year. The increase was broad based across all major product lines, led by fuel pumping systems.
Cash Flows from Financing Activities 2024 vs. 2023 Net cash used by financing activities was $74.1 million in 2024 compared to $192.2 million in 2023.
The change in operating cash flow was primarily attributable to changes in working capital offset by an increase in cash earnings. Cash Flows from Investing Activities 2025 vs. 2024 Net cash used in investing activities was $157.1 million in 2025 compared to $45.6 million in 2024.
In 2024 excluding the impact of foreign currency translation, sales increased in all three major regions: EMEA, Latin America and Asia Pacific. Net Sales-Energy Systems Energy Systems net sale s decreased 8 percent in 2024 , as compared to the prior year. This sales decline was primarily due to lower volumes.
The sales increase compared to prior year period was primarily due to the incremental sales impact from recent acquisitions. Net Sales-Energy Systems Energy Systems net sales increased 9 percent in 2025, as compared to the prior year. This sales increase was primarily due to price realization and favorable volumes.
Operating Income Operating income decreased 7 per cent in 2024, as compared to the prior year.
Operating Income Operating income in 2025 was $268.9 million and $243.6 million in 2024, an increase of 10 percent, as compared to the prior year.
Factors to be considered include the following: adverse changes in operating results, decline in strategic business plans, significantly lower future cash flows, and sustainable declines in market data such as market capitalization. A 10 percent decrease in the estimated fair value of any of the indefinite-lived trade names would not have changed this determination.
The Company determined that the fair value of goodwill and all intangibles were substantially in excess of the respective carrying values. A 10 percent decrease in the estimated fair value of goodwill or any of the indefinite-lived trade names would not have changed this determination.
Removed
Diluted earnings per share was $3.86 for 2024, a decrease of $0.25 or 6 percent from the prior year. RESULTS OF OPERATIONS Net Sales Net sales in 2024 were $2.0 billion and decreased 2 percent co mpared to the prior year. Sales were negatively impacted by changes in foreign exchange rates, principally due to the strengthening of the U.S.
Added
Also in the first quarter of 2025, the Company acquired PumpEng Pty Ltd ("PumpEng"), an Australia-based company that specializes in the design, manufacture and service of submersible pumps for the mining sector. Acquisitions contributed $48.9 million in incremental net sales in 2025.
Removed
This sales decline was primarily due to lower volumes, which decreased due to weaker end market demand for large dewatering equipment. Additionally, net sales decreased 2 percent in 2024 due to the negative impact from foreign exchange rates, as compared to prior year while the incremental sales impact from recent acquisitions favorably impacted sales 1 percent in 2024.
Added
Refer to Note 3 – Acquisitions in the Notes to Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Annual Report on Form 10-K for additional information on the Barnes and PumpEng acquisitions. In 2025, the Company completed the process of settling the Franklin Electric Co,, Inc.
Removed
Water Systems net sales in the U.S. and Canada d ecreased 5 percent in 2024, as compared to the prior year.
Added
Pension Plan and a partial settlement of the Franklin Electric Co. Restoration plan resulting in a pre-tax pension settlement charge of $54.9 million related to actuarial losses previously recorded in Accumulated Other Comprehensive Loss.
Removed
The Distribution segment sales increase was primarily due to the incremental sales impact from a recent acquisition, which favorably impacted net sales by 3 percent, partially offset by the negative impact of commodity pricing declines and unfavorable weather.
Added
Refer to Note 10 in Item 8 of this Annual Report on Form 10-K for additional information on the pension settlement charge. 2025 vs. 2024 OVERVIEW Net sales in 2025 were $2.1 billion and increased 5 percent, as compared to the prior year.
Removed
The gross profit margin was favorably impacted in 2024 by cost management, including lower freight costs in Water Systems and Energy Systems, and a favorable product and geographic sales mix shift. Selling, General and Administrative (“SG&A”) SG&A expenses wer e $470.1 m illion in 2024 compared to $433.5 million in 2023.
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Diluted earnings per share for 2025 was negatively impacted by the pension settlement charge of $41.5 million net of tax benefit ($54.9 million gross of tax benefit) related to actuarial losses previously recorded in Accumulated Other Comprehensive Loss. Refer to Note 10 in Item 8 of this Annual Report on Form 10-K for additional information on the pension settlement charge.
Removed
SG&A expens es increased i n 2024 primarily due to higher employee compensation costs, including incremental expenses associated with the Company's CEO transition, and the incremental expense impact of recent acquisitions. The SG&A expenses ratio was 23.3 percent and 21.0 percent in 2024 and 2023, respectively.
Added
RESULTS OF OPERATIONS Net Sales Net sales in 2025 were $2.1 billion and increased 5 percent compared to the prior year. The sales growth in 2025 was due to incremental sales impact from recent acquisitions of approximately 3 percent, price realization, and favorable volumes.
Removed
Restructuring Expenses Restructuring expenses were $3.5 million and $1.1 million in 2024 and 2023, respectively. Restructuring actions in 2024 were primarily related to headcount reductions and facility closures to optimize the Company's cost structure. Restructuring expenses in 2023 were primarily from continued miscellaneous manufacturing realignment activities, branch closings and consolidations.
Added
As a result, the net negative impact of foreign currency exchange rates on net sales was less than 1 percent in 2025.
Removed
The 2024 operating income margin was 3. 5 percent, a decrease of 160 basis points from 5.1 percent in 2023.
Added
Gross profit has remained consistent with prior year primarily due to pricing and volume increases offset by increased costs related to tariffs. Selling, General and Administrative (“SG&A”) SG&A expenses were $486.2 million in 2025 compared to $470.1 million in 2024. SG&A expenses increased in 2025 primarily due to the incremental expense impact from recent acquisitions and higher employee compensation costs.
Removed
The decrease in 2024 was primarily driven by lower average borrowings in 2024. Other Income or Expense Other income (expense), net was a benefit of $1.3 million in 2024 and $3.7 million in 2023.
Added
The SG&A expenses ratio was 22.8 percent and 23.3 percent in 2025 and 2024, respectively. Restructuring Expenses There were $0.7 million and $3.5 million in restructuring expenses in 2025 and 2024, respectively. Restructuring expenses were primarily from various manufacturing realignment activities.
Removed
The benefit in 2024 was lower than 2023 due to lower interest income realized in Argentina as excess cash balances and interest rates have declined in 2024 compared to 2023. Foreign Exchange Foreign currency-based transactions produced an expense of $6.8 million in 2024 and $12.1 million in 2023, respectively.
Added
The intersegment profit elimination impact in 2025 compared to the prior year of 2024 was an unfavorable $2.0 million.
Removed
The maturity dates of both agreements were extended from July 30, 2024 to May 15, 2027. 17 At December 31, 2024, the Company had $47.1 million of cash and cash equivalents held in foreign jurisdictions, which the Company intends to use to fund foreign operations.
Added
Other Income, net Other income, net was a net gain of $0.6 million and $1.3 million in 2025 and 2024, respectively. Pension settlement loss The loss in 2025 is primarily due to the Company’s settlement of its US Pension Plan and a partial settlement of the Franklin Electric Co.
Removed
The change in operating cash flow was primarily attributable to changes in working capital and lower earnings. In 2023, the Company's cash flow benefited from actions it took to improve working capital including inventory reductions as its supply chain resiliency and lead times improved significantly compared to 2022.
Added
Restoration plan, which resulted in a pre-tax loss of $54.9 million related to actuarial losses previously recorded in Accumulated Other Comprehensive Loss. Refer to Note 10 in Item 8 of this Annual Report on Form 10-K for additional information on the pension settlement charge.
Removed
In February 2025, the Company acquired 100 percent of the ownership interests of PumpEng for a purchase price of AUD 24.0 million (approximately $15 million), subject to working capital and net debt closing adjustments.
Added
Foreign Exchange Foreign currency-based transactions produced an expense of $9.3 million and an expense of $6.8 in 2025 and 2024, respectively. The results in 2025 and 2024 are primarily due to transaction losses associated with the Argentine Peso and Turkish Lira relative to the U.S. dollar.
Removed
Also in February 2025, the Company signed a definitive agreement to acquire Barnes for an enterprise value of $110.0 million, subject to working capital and net debt closing adjustments. The acquisition is subject to customary closing conditions, including Colombian antitrust clearance, and is expected to close on or about March 1, 2025.
Added
As of December 31, 2025, the remaining borrowing capacity on the New York Life Agreement was $175.0 million. The Company also maintains an uncommitted and unsecured note purchase and private shelf agreement with PGIM, Inc. and its affiliates (the "Prudential Agreement").
Removed
Tax Cuts and Jobs Act transition tax $ 4.8 $ 4.8 $ — $ — $ — $ 229.8 $ 165.4 $ 34.2 $ 17.3 $ 12.9 Interest payments on debt obligations are calculated for future periods using interest rates in effect at the end of 2024.
Added
There is inherent uncertainty in forecasted future cash flows and therefore, actual results may differ and could result in subsequent impairment charges of acquired intangible assets and/or goodwill.
Removed
The Company determined it was not more likely than not that the fair values of its reporting units were lower than their carrying values. The Company also determined the fair value of all other indefinite-lived intangible assets were in excess of their respective carrying values. Significant judgment is required to determine if an indication of impairment has taken place.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Company also has exposure to changes in interest rates in the form of the fair value of outstanding fixed rate debt fluctuating in response to changing interest rates. 21 Commodity Price Exposures Portions of the Company’s business are exposed to volatility in the prices of certain commodities, such as copper, steel and aluminum, among others.
Biggest changeCommodity Price Exposures Portions of the Company’s business are exposed to volatility in the prices of certain commodities, such as copper, steel and aluminum, among others. The primary exposure to this volatility resides with the use of these materials in purchased component parts.
Exposure to foreign exchange rate risk is due to certain costs, revenue and borrowings being denominated in currencies other than one of the Company’s subsidiaries functional currency. Similarly, the Company is exposed to market risk as the result of changes in interest rates which may affect the cost of financing.
Exposure to foreign exchange rate risk is due to certain costs, revenue and borrowings being denominated in currencies other than one of the Company’s subsidiaries' functional currency. Similarly, the Company is exposed to market risk as the result of changes in interest rates which may affect the cost of financing.
Based on the 2024 use of commodities, the Company estimates that a hypothetical 10 percent adverse movement in prices for raw metal commodities would result in less than 1 percent decrease of gross margin as a percent of net sales. 22
Based on the 2025 use of commodities, the Company estimates that a hypothetical 10 percent adverse movement in prices for raw metal commodities would result in less than 1 percent decrease of gross margin as a percent of net sales. 23
Borrowings in EUR under the Credit Agreement may be made either at (i) a Euro Interbank Offer Rate (EURIBOR) Term Benchmark plus an applicable margin or (ii) an alternative base rate as defined in the Credit Agreement. The Company had $41.4 million borrowings at year-end 2024 under the Credit Agreement.
Borrowings in EUR under the Credit Agreement may be made either at (i) a Euro Interbank Offer Rate (EURIBOR) Term Benchmark plus an applicable margin or (ii) an alternative base rate as defined in the Credit Agreement. The Company had $30.0 million borrowings at year-end 2025 under the Credit Agreement.
The primary exposure to this volatility resides with the use of these materials in purchased component parts. The Company generally maintains long-term fixed price contracts on raw materials and component parts; however, the Company is prone to exposure as these contracts expire.
The Company generally maintains long-term fixed price contracts on raw materials and component parts; however, the Company is prone to exposure as these contracts expire.
Based on the 2024 mix of foreign currencies, the Company estimates that a hypothetical strengthening of the US Dollar by about 2 percent would have reduced the Company’s 2024 sales by less than 1 percent.
Based on the 2025 mix of foreign currencies, the Company estimates that a hypothetical strengthening of the US Dollar by about 2 percent would have reduced the Company’s 2025 sales by less than 1 percent. 22 Interest Rate Risk The results of operations are exposed to changes in interest rates primarily with respect to borrowings under the Company’s revolving credit agreement (the “Credit Agreement”).
The Company estimates that a hypothetical increase of 100 basis points in interest rates would have increased interest expense by $0.3 million during 2024.
The Company estimates that a hypothetical increase of 100 basis points in interest rates would have increased interest expense by $1.2 million during 2025. The Company also has exposure to changes in interest rates in the form of the fair value of outstanding fixed rate debt fluctuating in response to changing interest rates.
Removed
Interest Rate Risk The results of operations are exposed to changes in interest rates primarily with respect to borrowings under the Company’s revolving credit agreement (the “Credit Agreement”).

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