SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) APRIL 15, 2004
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FRANKLIN ELECTRIC CO., INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
INDIANA 0-362 35-0827455
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(STATE OR OTHER JURISDICTION OF (COMMISSION (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) FILE NUMBER) IDENTIFICATION NO.)
400 EAST SPRING STREET
BLUFFTON, INDIANA 46714
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(260) 824-2900
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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Item 7. Financial Statements, Pro Forma Financial Information and
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Exhibits
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The following exhibit is furnished pursuant to Item 12: (99) Press
Release, dated April 15, 2004 issued by Franklin Electric Co., Inc.
Item 12. Disclosure of Results of Operations and Financial Condition
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The following information is furnished pursuant to Item 12,
"Disclosure of Results of Operations and Financial Condition."
On April 15, 2004, Franklin Electric Co., Inc. issued a press release
announcing its first-quarter 2004 earnings. A copy of the press
release is attached hereto as Exhibit (99) and hereby incorporated by
reference.
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
FRANKLIN ELECTRIC CO., INC.
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(Registrant)
Date April 15, 2004 By /s/ Gregg C. Sengstack
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Gregg C. Sengstack, Senior Vice
President, Chief Financial
Officer and Secretary (Principal
Financial and Accounting Officer)
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Exhibit Index
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EXHIBIT NO. (99) Press release, dated April 15, 2004 issued by
Franklin Electric Co., Inc.
EXHIBIT 99
ADDITIONAL EXHIBITS
Press Release
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For Immediate Release For Further Information
Refer to: Gregg C. Sengstack
260-824-2900
FRANKLIN ELECTRIC COMPANY
REPORTS RECORD INCOME AND SALES
FOR THE FIRST QUARTER OF 2004
BLUFFTON, INDIANA - APRIL 15, 2004 -- Franklin Electric Co., Inc.
(NASDAQ:FELE) reported record first quarter 2004 net income of $5.1
million, an increase of 27 percent from $4.0 million for the same
period a year ago. Diluted earnings per share were a first quarter
record $0.45, a 25 percent increase from $0.36 for the first quarter
of 2003.
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 a consolidation of 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. These one-time expenses primarily include:
severance, relocation, training and the move of equipment. These
expenses will be identified quarterly during the implementation period
and are reflected as "Restructuring Expenses" in our income statement.
Included in the above record results for the first quarter of 2004 are
restructuring expenses of $0.6 million pre-tax ($0.4 million after
tax).
Sales for 2004 were a first quarter record $80.2 million, an increase
of $10.4 million or 15 percent from $69.8 million for the same period
a year ago. Foreign currencies, particularly the euro, strengthened
relative to the U.S. dollar since the first quarter of 2003. The
impact of this change in exchange rates was $3.8 million increase in
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the Company's reported first quarter 2004 sales from its operations
outside of North America compared to the same period in 2003.
Operating earnings in the first quarter of 2004 were a record $8.1
million, up $2.3 million or 39 percent compared to $5.8 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.
R. Scott Trumbull, Chairman and Chief Executive Officer, stated, "We
are pleased with the broad based strengthening of our operations.
Sales increased in essentially all of our end use and geographic
markets. Our manufacturing realignment program is on schedule and on
budget; and, our new product initiatives are proceeding as
anticipated."
Sales of submersible motors in the North America market were up about
12 percent compared to the first quarter of 2003. Sales increased in
both residential and agricultural end markets. Unit sales of the
SubDrive(tm) family of electronic drive systems for water wells increased
282% from the same period for 2003 as the product line has been
extended and demand continues to grow. The construction of the second
phase of our new 150,000 sq. ft. Linares, Mexico motor manufacturing
plant is complete and equipment is being put in place for the
scheduled eighteen month ramp up of production to begin in the middle
of this year.
Submersible motor sales outside North America were up about 5 percent
(when comparing both quarters at the current year exchange rate).
Sales were up in all significant end markets: Europa (Europe, the
Middle East and North Africa), South Africa and Asia/Pacific.
Expansion of our 80,000 sq. ft. manufacturing plant in Brno, Czech
Republic, continued on schedule during the first quarter of 2004.
Fueling system product sales increased significantly compared to the
first quarter of 2003 driven, in particular, by demand for submersible
turbine pump and motor systems. Incon electronic monitoring sales
contributed as well, up 84% compared to the same quarter last year.
Our new 90,000 sq. ft. manufacturing and distribution facility in
Madison, Wisconsin is under roof and the planned move of EBW, Advanced
Polymer Technologies and FE Petro, to be completed in the next six
months, is on schedule.
First quarter sales of industrial motor products increased modestly.
During the quarter, the Company invested in sales training and
promotion related to its new HydroDuty(tm) (patents pending) product
line. These products have been well received and are currently being
tested by many major food processors across the country. The Company
will expand the HydroDuty(tm) product line offering this year.
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Franklin Electric, a technical leader in electric motors, drives and
controls, is the world's largest manufacturer of submersible water and
fueling systems motors, a manufacturer of underground fueling systems
hardware and flexible piping systems and a leader in engineered
industrial motor products.
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"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995. Any forward looking statements contained herein involve
risks and uncertainties, including but not limited to, general economic
and currency conditions, various conditions specific to the Company's
business and industry, market demand, competitive factors, supply
constraints, technology factors, government and regulatory actions, the
Company's accounting policies, future trends, and other risks which are
detailed in the Company's Securities and Exchange Commission filings.
These risks and uncertainties may cause actual results to differ
materially from those indicated by the forward-looking statements.
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FRANKLIN ELECTRIC CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
First Quarter Ended
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April 3, March 29,
2004 2003
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Net sales $80,207 $69,778
Cost of sales 56,587 50,103
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Gross profit 23,620 19,675
Selling and administrative expenses 14,978 13,877
Restructuring expense 565 -
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Operating income 8,077 5,798
Interest expense (106) (337)
Other income 18 286
Foreign exchange gain / (loss) (50) 451
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Income before income taxes 7,939 6,198
Income taxes 2,818 2,170
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Net income $ 5,121 $ 4,028
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Net income per share:
Basic $ 0.47 $ 0.37
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Diluted $ 0.45 $ 0.36
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Weighted average shares and equivalent
shares outstanding:
Basic 10,952 10,764
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Diluted 11,415 11,230
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FRANKLIN ELECTRIC CO., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands) April 3, Jan. 3,
2004 2004
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ASSETS:
Cash and equivalents $ 12,665 $ 29,962
Receivables 33,023 29,194
Inventories 66,985 54,653
Other current assets 14,401 14,232
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Total current assets 127,074 128,041
Property, plant and equipment, net 83,225 83,916
Goodwill and other assets 72,349 70,014
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Total assets $282,648 $281,971
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LIABILITIES AND SHAREOWNERS' EQUITY:
Current maturities of long-term
debt and short-term borrowings $ 1,377 $ 1,392
Accounts payable 15,640 15,958
Accrued liabilities 27,976 28,051
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Total current liabilities 44,993 45,401
Long-term debt 14,538 14,960
Deferred income taxes 4,354 4,354
Employee benefit plan obligations 18,038 18,697
Other long-term liabilities 5,619 5,621
Shareowners' equity 195,106 192,938
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Total liabilities and shareowners' equity $282,648 $281,971
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FRANKLIN ELECTRIC CO., INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) April 3, March 29,
2004 2003
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Cash flows from operating activities:
Net income $ 5,121 $ 4,028
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and amortization 3,878 3,329
Loss on disposals of plant and equipment 7 363
Changes in assets and liabilities:
Receivables (3,988) 1,023
Inventories (12,987) (13,620)
Accounts payable and other
accrued expenses 1,089 (3,962)
Employee benefit plans (4,264) (3,666)
Other, net (146) 16
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Net cash flows from operating activities (11,290) (12,489)
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Cash flows from investing activities:
Additions to plant and equipment (3,956) (1,988)
Proceeds from sale of plant and equipment - 214
Additions to deferred assets (1) (250)
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Net cash flows from investing activities (3,957) (2,024)
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Cash flows from financing activities:
Borrowing on long-term debt - 5,466
Repayment of long-term debt (347) (109)
Borrowing on line of credit and
short-term borrowings - 3,000
Repayment of line of credit and
short-term borrowings - (6)
Proceeds from issuance of common stock 2,187 377
Purchases of common stock (2,208) (8,394)
Reduction of loan to ESOP Trust 232 233
Dividends paid (1,538) (1,396)
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Net cash flows from financing activities (1,674) (829)
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Effect of exchange rate changes on cash (376) 361
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Net change in cash and equivalents (17,297) (14,981)
Cash and equivalents at beginning of period 29,962 20,133
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Cash and equivalents at end of period $ 12,665 $ 5,152
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