Franklin Electric Co., Inc. Q1 FY2026 earnings call

· First quarter was strong for all segments with healthy organic growth. · Launch of Value Acceleration Office off to great start. · New products like VersaBoost launched. · Margin expansion efforts on track with Value Acceleration Office. · Expanding capital deployment with new factories in Turkey, India, etc. · Continued share buybacks and dividend expansion. · Employees are bedrock for growth

Global Water Systems: Sales up 11% vs Q1 2025. Operating income $44.4 million, up $1 million. Margin 14%, down 110 bps y-o-y. Adjusted operating income $48.3 million, up $4.9 million, margin 15.2%, up 10 bps. Distribution: Sales $150.9 million, up 6% y-o-y. Operating income $3 million, up $900k. Margin 2% of sales, improved 50 bps. Energy Systems: Sales $71.8 million, up 7% y-o-y. Operating income $24.2 million, up $2.3 million. Margin 33.7%, improved 90 bps

· Holds full-year sales expectations at $2.17 billion to $2.24 billion. · Holds full-year adjusted diluted EPS at $4.40 to $4.60 range. · Reflects uncertainty in global markets, does not include clawback of tariff-related expenditures

· Uncertainty in global macroeconomic and geopolitical outlook. · EMEA sales negatively impacted by Middle East conflict. · Uncertainty regarding tariff-related expenditures

Q: How to think about revenue progression and nuances by end markets?

A: Q2 outlook robust, underlying business healthy but some unknowns like ag prices, freight impact.

Q: Thoughts on margin progression?

A: Energy had strong Q1, Q2 comp challenged but underlying strong; distribution working on upstream leverage; water working on restructuring and post-acquisition synergies.

Q: Volume and price contribution in Q1 and full-year?

A: Q1 volume under 30% and price over 30% balanced, expect balanced throughout year.

Q: New product intros time frame and contribution?

A: 2026 - 2028 reference, new products accretive.

Q: Dewatering softness?

A: U.S. and Canada timing impact on fleet, global dewatering growth expected.

Q: Energy margin long term and strategy?

A: Confident in mid-30s margin, energy business a template, other segments to expand margin.

Q: AI in distribution pricing?

A: Dynamic pricing, not embedded with AI yet but working on smarter dynamic pricing.

Q: Data center products run rate and growth?

A: Sub-$50 million business now, first production line up, expect volume growth.

Q: Impact of updated Section 232 tariffs?

A: Fairly neutral impact, largely in-region manufacturing helps