FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________---------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended OctoberApril 3, 1998
---------------1999
-------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission file number 0-362
FRANKLIN ELECTRIC CO., INC.
---------------------------
(Exact name of registrant as specified in its charter)
IndianaINDIANA 35-0827455
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 East Spring Street
Bluffton, IndianaEAST SPRING STREET
BLUFFTON, INDIANA 46714
----------------- -----
(Address of principal executive offices) (Zip Code)
(219) 824-2900
--------------
(Registrant's telephone number, including area code)
Not ApplicableNOT APPLICABLE
--------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
_____
--------- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
Class of Common Stock NovemberOUTSTANDING AT
CLASS OF COMMON STOCK MAY 11, 1998
-------------------- ----------------1999
--------------------- ------------
$.10 par value 5,590,7285,565,620 shares
2
FRANKLIN ELECTRIC CO., INC.
Index
Page
PART I. FINANCIAL INFORMATION Number
- --------------------------------- ------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
as of OctoberApril 3, 19981999 (Unaudited)
and January 3, 1998...........................2, 1999........................... 3
Condensed Consolidated Statements of
Income for the Third QuarterThree Months Ended
April 3, 1999 and Nine Months
ended October 3,April 4, 1998 (Unaudited) and
September 27, 1997 (Unaudited).................. 4
Condensed Consolidated Statements of
Cash Flows for the NineThree Months Ended
OctoberApril 3, 1999 and April 4, 1998 (Unaudited) and
September 27, 1997 (Unaudited).................. 5
Notes to Condensed Consolidated
Financial Statements (Unaudited).............. 6- 86-8
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations......................... 9-10
PART II. OTHER INFORMATION
- -----------------------------
Item 4. Submission of Matters to a Vote of
Security Holders............................ 11
Item 6. Exhibits and Reports on Form 8-K.............. 11
Signatures................................................ 1112
- -------------------
3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
- -----------------------------
FRANKLIN ELECTRIC CO., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands) OctoberApril 3, 1998 January 3,
(Unaudited) 1998
----------- ---------2,
1999 1999
- ---- ----
ASSETS
Current assets:
Cash and equivalents.................... $ 30,38330,218 $ 23,19117,034
Marketable securities................... 31,063 48,497- 27,921
Receivables, less allowances of
$898$1,100 and $1,349, respectively......... 8,416 16,978$1,107, respectively....... 16,730 16,037
Inventories (Note 2).................... 37,798 31,25944,806 35,330
Other current assets (including
deferred income taxes of $8,440
and $7,490, respectively)............. 9,784 8,575
-------- --------$8,774)...... 10,195 9,961
------- -------
Total current assets.................. 117,444 128,500101,949 106,283
Property, plant and equipment,
net (Note 3)............................ 35,162 32,35751,938 51,461
Deferred and other assets (including
deferred income taxes of $988$1,296
and $1,001,$1,362, respectively)............... 2,081 2,253
-------- --------9,552 9,846
------- -------
Total assets.............................. $154,687 $163,110$163,439 $167,590
======== ========
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities:
Current maturities of long-term
debt and short-term borrowings........ $ 3,7213,685 $ 1,1963,716
Accounts payable........................ 7,864 10,47210,049 13,556
Accrued expenses........................ 26,264 24,34621,776 24,539
Income taxes............................ 1,586 4,513
-------- --------3,449 2,594
------- -------
Total current liabilities............. 39,435 40,52738,959 44,405
Long-term debt............................ 19,095 19,16318,082 18,089
Employee benefit plan obligations......... 9,037 7,23710,983 10,167
Other long-term liabilities............... 3,260 3,3423,277 3,332
Shareowners' equity:
Common stock (Note 5)................... 558 585557 557
Additional capital...................... 12,647 10,29514,283 14,105
Retained earnings....................... 76,023 87,508
Stock subscriptions..................... (68) (625)83,258 81,872
Loan to ESOP Trust...................... (1,827) (2,059) (2,292)
Accumulated other comprehensive
loss (Note 7)......................... (3,241) (2,630)
-------- --------(4,133) (2,878)
------- -------
Total shareowners' equity............. 83,860 92,841
-------- --------92,138 91,597
------- -------
Total liabilities and shareowners' equity. $154,687 $163,110$163,439 $167,590
======== ========
See Notes to Condensed Consolidated Financial Statements.
4
FRANKLIN ELECTRIC CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
Third Qtr. Ended NineThree Months Ended
---------------- ------------------
Oct.April 3, Sept 27, Oct. 3, Sept. 27,April 4,
1999 1998
1997 1998 1997
---- ----- ---- ----
Net sales.............................. $75,230 $85,610 $199,151 $225,745sales................................. $58,014 $56,014
Costs and expenses:
Cost of sales........................ 53,627 62,021 141,945 165,964sales........................... 42,576 40,834
Selling and administrative expenses.. 10,658 13,858 31,582 36,826expenses..... 9,759 9,727
Interest expense..................... 366 325 1,001 994expense........................ 326 314
Other income, net.................... (778) (263) (2,542) (1,225)
------- ------- -------- --------
63,873 75,941 171,986 202,559net....................... (166) (875)
------ ------
52,495 50,000
Income before income taxes............. 11,357 9,669 27,165 23,186taxes................ 5,519 6,014
Income taxes........................... 4,350 3,546 10,503 8,599
------- ------- -------- ---------taxes.............................. 2,042 2,354
------ ------
Net income.............................income................................ $ 7,0073,477 $ 6,123 $ 16,662 $ 14,5873,660
======= ======= ======== ========
Per share data (Note 6):
Net incomeBasic earnings per common share..........share................ $ 1.22.63 $ 1.04 $ 2.87 $ 2.47.63
======= =======
======== ========
Net incomeDiluted earnings per common share,
assuming dilution..................share.............. $ 1.14.59 $ .96 $ 2.67 $ 2.29.58
======= ======= ======== ========
Dividends per common share...........share.............. $ .17 $ .15
$ .49 $ .42
======= ======= ======== ========
See Notes to Condensed Consolidated Financial Statements.
5
FRANKLIN ELECTRIC CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands) NineThree Months Ended
-----------------
Oct.------------------
April 3, Sept. 27,April 4,
1999 1998
1997- ---- ----
Cash flows from operating activities:
Net income................................ $16,662 $14,587$ 3,477 $ 3,660
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and amortization........... 4,818 5,7811,731 1,786
(Gain)/loss on disposals of plant
and equipment......................... (31) 285- (9)
Changes in assets and liabilities:
Receivables........................... 8,153 5,619(1,052) (1,505)
Inventories........................... (7,263) (5,051)(10,872) (9,383)
Other assets.......................... (1,144) (1,287)(117) (864)
Accounts payable and other accrued
expenses............................ (3,090) (5,812)(4,937) (3,946)
Employee benefit plan obligations..... 1,780 675(36) 602
Other long-term liabilities........... 18 (270)915 (5)
------- -------------
Net cash flows from
operating activities.............. 19,903 14,527(10,891) (9,664)
------- -------------
Cash flows from investing activities:
Additions to plant and equipment.......... (7,054) (4,894)(2,529) (1,679)
Proceeds from sale of plant and
equipment............................... 51 1,137
Purchase of marketable securities......... (24,761) (33,270)- 10
Proceeds from maturities of marketable
securities ............................. 42,195 34,327
------- -------27,921 16,766
------ ------
Net cash flows from
investing activities.................. 10,431 (2,700)
------- -------25,392 15,097
------ ------
Cash flows from financing activities:
Repayment of long-term debt............... (68) (78)- (7)
Borrowing on line of credit............... 2,657366 -
Repayment of line of credit............... (161) -(174) (174)
Proceeds from issuance of common stock.... 2,130 893401 1,484
Purchase of common stock.................. (25,324) (24,000)
Proceeds(1,043) (1,728)
Proceeds/(reduction) from stock
subscriptions.........subscriptions........................... (324) 352 100
Reduction of loan from ESOP Trust......... 232 233 232
Dividends paid............................ (2,861) (2,477)
------- -------(948) (881)
------ -----
Net cash flows from
financing activities.................. (23,042) (25,330)
------- -------(1,490) (721)
------ -----
Effect of exchange rate changes on cash..... (100) (1,167)
------- -------173 106
------ ------
Net change in cash and equivalents.......... 7,192 (14,670)13,184 4,818
Cash and equivalents at
beginning of period....................... 17,034 23,191
22,968
------- ------------- ------
Cash and equivalents at end of period....... $30,383 $ 8,298$30,218 $28,009
======= =======
See Notes to Condensed Consolidated Financial Statements.
6
FRANKLIN ELECTRIC CO., INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1: Condensed Consolidated Financial Statements
- ----------------------------------------------------
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the ninethree
months ended OctoberApril 3, 19981999 are not necessarily indicative of the results that
may be expected for the year ending
January 2, 1999.1, 2000. For further information, refer to the consolidated financial
statements and footnotes thereto included in Franklin Electric Co., Inc.'s
annual report on Form 10-K for the year ended January 3, 1998.2, 1999.
Note 2: Inventories
- --------------------
Inventories consist of the following:
(In thousands) OctoberApril 3, January 3,
1998 19982,
1999 1999
---- ----
Raw Materials........................ $12,771 $11,119$12,714 $12,080
Work in Process...................... 4,951 5,1575,718 5,281
Finished Goods....................... 30,283 24,91135,956 27,439
LIFO Reserve......................... (10,207) (9,928)
------- -------(9,582) (9,470)
------ ------
Total Inventory...................... $37,798 $31,259$44,806 $35,330
======= =======
Note 3: Property, Plant and Equipment
- --------------------------------------
Property, plant and equipment, at cost, consists of the following:
(In thousands) OctoberApril 3, January 3,
1998 19982,
1999 1999
---- ----
Land and Building.................... $20,420 $20,018Buildings................... $ 21,741 $ 21,889
Machinery and Equipment.............. 88,519 82,134105,703 104,317
------- -------
108,939 102,152127,444 126,206
Allowance for Depreciation........... 73,777 69,79575,506 74,745
------- -------
$35,162 $32,357
======= =======$ 51,938 $ 51,461
======== ========
7
Note 4: Tax Rates
- ------------------
The effective tax rate on income before income taxes in 19981999 and 19971998 varies
from the United States statutory rate of 35 percent principally due to the
effect of state and foreign income taxes.
7
Note 5: Shareowners' Equity
- ----------------------------
The Company had 5,581,2285,572,920 shares of common stock (25,000,000 shares
authorized, $.10 par value) outstanding as of OctoberApril 3, 1998.
As previously reported, during1999.
During the thirdfirst quarter of 1998,1999, pursuant to the stock repurchase program
authorized by the Company's Board of Directors, the Company repurchased a
total of 335,70716,500 shares for $21.6$1.0 million. This
completed the Board authorized program to repurchase 500,000 shares which was
approved by the Board on July 11, 1997. All repurchased shares were retired.
Note 6: Earnings Per Share
- ---------------------------
Following is the computation of basic and diluted earnings per share:
(In thousands, except Third Qtr.Three Months Ended
Nine Months Ended------------------
except per share amounts) ---------------- -----------------
Oct.April 3, Sept. 27, Oct. 3, Sept. 27,April 4,
1999 1998
1997 1998 1997
---- ----- ---- ----
Numerator:
Net Income..................... $7,007 $6,123 $16,662 $14,587Income.......................... $3,477 $3,660
====== ======
======= =======
Denominator:
Basic
-----
Weighted average common shares....................... 5,724 5,867 5,798 5,908shares..... 5,553 5,818
Diluted
-------
Effect of dilutive securities:
Employee and director incentive
stock options and awards................. 405 485 453 463
------ ------ ------- -------awards........ 362 491
----- -----
Adjusted weighted average common
shares................ 6,129 6,352 6,251 6,371shares.......................... 5,915 6,309
====== ====== ======= =======
Basic earnings per share.........share.............. $ 1.22.63 $ 1.04 $ 2.87 $ 2.47.63
====== ====== ======= =======
Diluted earnings per share.......share............ $ 1.14.59 $ .96 $ 2.67 $ 2.29.58
====== ====== ======= =======
8
Note 7: Other Comprehensive Income
- -----------------------------------
The Company adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income" in the first quarter of 1998. Comprehensive income for the third quarter and nine months ended October 3, 1998 and
September 27, 1997 areis as follows:
(In thousands) Third Qtr. Ended NineThree Months Ended
---------------- -----------------
Oct.------------------
April 3, Sept. 27, Oct. 3, Sept. 27,April 4,
1999 1998
1997 1998 1997
---- ----- ---- ----
Net income......................... $7,007 $6,123 $16,662 $14,587income.................................. $ 3,477 $ 3,660
Other comprehensive loss:
Foreign currency translation adjustments..................... (353) (768) (611) (1,717)adjustments.. (1,255) (411)
------ ------ ------- ------
Comprehensive income, net of tax... $6,654 $5,355 $16,051 $12,870
====== ======tax............ $ 2,222 $ 3,249
======= =======
Accumulated other comprehensive loss consists of the following:
(In thousands) Oct.April 3, January 3,
1998 19982,
1999 1999
- ---- ----
Cumulative translation adjustment........... $(3,005) $(2,394)$(3,469) $(2,214)
Minimum pension liability adjustment,
net of tax................................ (236) (236)
------- -------
$(3,241) $(2,630)(664) (664)
------ ------
$(4,133) $(2,878)
======= =======
Note 8: Accounting Pronouncements
- ----------------------------------
Disclosures about Pensions and Other Postretirement Benefits
- ------------------------------------------------------------
In February 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 132, "Employers' Disclosures about
Pensions and Other Postretirement Benefits" (SFAS No. 132). This statement
revises employers' disclosures about pension and other postretirement
benefits. It does not change the measurement or recognition of these plans.
SFAS No. 132 requires additional information on changes in the benefit
obligations and fair values of plan assets and eliminates certain disclosures
that are no longer considered useful. The Company will include the new
disclosures in the notes to its financial statements beginning with the 1998
fiscal year end financial reports.
Note 9: Subsequent Event
- ------------------------
On October 16, 1998, the Company's Board of Directors authorized the
repurchase of up to 500,000 shares of its common stock.
9
Item 2. Management's Discussion And Analysis Of Financial Condition And
- ------------------------------------------------------------------------
Results Of Operations
- ---------------------
Operations
- ----------
Net sales for the thirdfirst quarter of 19981999 were $75.2$58.0 million, a 12.13.6 percent
decreaseincrease from 1997 third1998 first quarter net sales of $85.6$56.0 million. Year to date
1998 netNet sales were $199.2 million, down 11.8 percent from year to date 1997
net sales of $225.7 million. Prior year amounts include the sales of Oil
Dynamics, Inc. (ODI). ODI was a previously wholly owned subsidiary that was
sold in October 1997. Third quarter net sales for the Company's ongoing
operations increased from the prior year due to increased submersible motor
sales in North America and Europe. Year to date net sales for the Company's
ongoing operations
increased due to higher volume in the submersible water systems motors and
changes in the mix of products sold offset in part by the
effects of the strengthening dollar.sold. Net income for the thirdfirst quarter of 19981999
was $7.0$3.5 million, or $1.14$.59 per diluted share, a 14.4 percent increase compared to net income of $6.1$3.7
million, or $.96$.58 per diluted share, for the same period in 1997. Year to
datea year ago. Since the
beginning of 1998 net income was $16.7 million, or $2.67 per diluted share, a 14.2
percent increase compared to year to date 1997 net incomethe Company has repurchased approximately 423,000 of $14.6 million,
or $2.29 per diluted share.its
outstanding common shares. Cost of sales as a percentpercentage of net sales for the
thirdfirst quarter of 19981999 was 71.373.4 percent a decrease from 72.4compared to 72.9 percent for the same
period in 1997. Cost
of sales as a percent of net sales for the year to date 1998 was 71.3
percent, a decrease from 73.5 percent for the same period in 1997. Prior
year cost of sales included ODI. The improvements are primarily a result of
selling ODI and productivity improvements.1998.
Selling and administrative expenses as a percent of net sales for the thirdfirst
quarter of 19981999 was 14.216.8 percent compared to 16.217.4 percent for the same period
in 1997. Selling1998. Interest expense was $0.3 million for both the first quarter of 1999
and administrative expenses as a percent of net sales for
the year to date 1998 was 15.9 percent compared to 16.3 percent for the year
to date 1997. The improvements are primarily a result of selling ODI.1998. Included in other income, net, for the thirdfirst quarter of 19981999 was
$.9$0.5 million of interest income and $.1 of foreign currency losses compared to $.5 million
of interest income and $.2 of foreign currency losses for the third quarter
of 1997. Included in other income, net for the year to date 1998 was $2.7
million of interest income and $.1$0.3 million of foreign currency losses
compared to $1.3losses.
Interest income was $1.0 million of interest income and $.8 million of foreign currency losses were $0.1 million
for the same period in 1997.1998. Interest income was attributable to amounts
invested principally in short-term US treasury and agency securities.
Capital Resources and Liquidity
- -------------------------------
Cash, cash equivalents and marketable securities decreased $10.2$14.7 million
during the first nine monthsquarter of 1998.1999. The decreaseprincipal use of cash for operating
activities was principally due to
the repurchasetypical seasonal increase in inventories. Working capital
increased $1.1 million during the first quarter of 394,851 shares1999 and the current ratio
was 2.6 and 3.5 at the end of the Company's common stock duringfirst quarter of 1999 and 1998,
at an aggregate purchase price of $25.3 million.
10respectively.
Year 2000 Readiness
- -------------------
Many computer systems in use today were designed and developed using two
digits, rather than four, to specify the year. As a result, such systems may
not correctly recognize the year 2000 which could cause computer applications
to fail or to create erroneous results. The Company recognizes this as a
potential risk and has implemented a plan to address the Year 2000 issue.
THE COMPANY'S STATE OF READINESS -- In 1995, the Company began a project of
implementing a new, company-wide information system. This project was
initiated to replace existing computer software and hardware and to improve
strategic command and control to substantially reduce the response time needed to meet
changing market conditions. The conversion to this new information system will be substantiallywas
completed by the end ofin 1998, which iswas on schedule with the original plan. The Company
has obtained verification from the developer that the new information system
is Year 2000 compliant.
10
The Company hasalso instituted an internally managed Year 2000 Plan to identify,
test and correct potential Year 2000 problems, including non-information
technology systems and impacts from outsideexternal parties including suppliers,
customers, and service providers. The Company's efforts have included obtaining
vendor certifications, direct inquiry with outside parties, and the
performance of internal testing on software products and controls.
THE COSTS TO ADDRESS THE COMPANY'S YEAR 2000 ISSUES -- The costs incurred by
the Company related to the Year 2000 issue were the time spent by employees to
address this issue and the costs of replacing certain non-Year 2000 compliant
equipment. The total costs to address the Company's Year 2000 costs haveissues were not been and are not
expected to be
material to the Company's financial position or results of operations.
THE RISKS OF THE COMPANY'S YEAR 2000 ISSUES -- The primary risk to the Company
with respect to the Year 2000 issue is the inability of external parties to
provide goods and services in a timely, accurate manner, resulting in
production delays and added costs while pursuing alternative sources. While
there can be no guarantee that the systems of other parties on which the
Company's operations rely will be Year 2000 compliant, the Company believes
that the performance of the Year 2000 plan and the development of contingency
plans will ensure that this risk will not have a material adverse impact to
the Company.
THE COMPANY'S CONTINGENCY PLANS -- The Company has completed contingency
plans.plans that address recovery of its critical information systems. Ongoing
updates to these plans will continue throughout 1999.1999, and will consider the
Company's ability to perform certain processes manually, repair or obtain
replacement systems, change suppliers and/or service providers, and work
around affected operations.
"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.
11
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
The 1999 Annual Meeting of Shareholders of the Company was held on April
16, 1999 for the following purposes: 1) To elect three directors for terms
expiring at the 2002 Annual Meeting of Shareholders; 2) To approve an
amendment to the Restated Certificate of Incorporation with respect to
Preferred Stock; and 3) To ratify the appointment of Deloitte & Touche LLP as
independent auditors for the 1999 fiscal year.
The results were:
1) Nominees for Director For Withhold Authority
--------------------- --- ------------------
John B. Lindsay 5,122,570 14,569
Juris Vikmanis 5,123,983 13,156
Howard B. Witt 5,123,677 13,462
For Against Abstain
--- ------- -------
2) Amendment to the Restated
Certificate of Incorporation
with respect to Preferred
Stock 3,822,129 673,989 55,648
3) Ratification of
Deloitte & Touche LLP 5,128,169 1,685 7,285
Total shares represented at the Annual Meeting in person or by proxy were
5,137,139 of a total of 5,577,620 shares outstanding. This represented 92.1
percent of Company common stock and constituted a quorum. Total broker non-
votes related to the amendment to the Restated Certificate of Incorporation
with respect to Preferred Stock were 585,373 shares.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits (Filed with this quarterly report)
3(i) Amended and Restated Articles of Incorporation of Franklin
Electric Co., Inc.
3(ii) Amended and Restated By-Laws of Franklin Electric Co., Inc.
(b) Reports on Form 8-K
ADuring the first quarter ended April 3, 1999, a Form 8-K was filed
by the Company dated September 9, 1998,January 6, 1999, to report the Company's repurchasepurchase of
79,300 sharescertain operating and intangible assets from the Marley Company,
a wholly-owned subsidiary of its common
stock. Another Form 8-K was filed by the Company dated
September 24, 1998, to report the Company's repurchase of 105,407
shares of its common stock.United Dominion Industries, Inc.
12
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this quarterly report to be signed on its behalf by
the undersigned thereunto duly authorized.
FRANKLIN ELECTRIC CO., INC.
---------------------------
Registrant
Date NovemberMay 11, 19981999 By /s/ William H. Lawson
-------------------------------------- ---------------------------
William H. Lawson, Chairman
and Chief Executive Officer
(Principal Executive Officer)
Date NovemberMay 11, 19981999 By /s/ Jess B. Ford
-----------------Gregg C. Sengstack
--------------------- ---------------------------
Jess B. Ford, SeniorGregg C. Sengstack, Vice
President and Chief Financial
Officer (Principal Financial
and Accounting Officer)
25