Franklin Electric (FELE) 8-K Reports Record Income and Sales

Exhibit Index

EXHIBIT NO. (99) Press release, dated July 17, 2006 issued by Franklin Electric Co., Inc.

EXHIBIT 99

ADDITIONAL EXHIBITS

Press Release

For Immediate Release	For Further Information
	Refer to: Thomas J. Strupp
	260-824-2900

FRANKLIN ELECTRIC COMPANY

REPORTS RECORD INCOME AND SALES

FOR THE SECOND QUARTER OF 2006

Bluffton, Indiana - July 17, 2006 -- Franklin Electric Co., Inc. (NASDAQ:FELE) reported record second quarter 2006 net income of $16.4 million, an increase of 21 percent from $13.5 million for the same period a year ago. The Company reported record second quarter diluted earnings per share of $0.70, an increase of 19 percent compared to 2005 second quarter earnings per share of $0.59.

Second quarter sales were a record $162.7 million, an increase of $39.1 million or 32 percent for the same quarter of 2005.  Sales growth from acquisitions was approximately $26.2 million during the second quarter of which the acquisition of the Little Giant Pump Company was $25.4 million. The record sales were also driven by solid demand for Water Systems products largely from North American distributors. Western Hemisphere submersible motor sales, coming off unusually strong sales growth in the first quarter of 2006, were flat to prior year in the second quarter. However, Franklin continues to believe a portion of the Western Hemisphere submersible motor sales growth during the first half of 2006 may be attributable to submersible motor inventory increases by pump OEM’s (original equipment manufacturers) purchasing additional quantities as a hedge against future supply uncertainties resulting from Franklin’s distribution strategy change and other changes in the marketplace. Franklin’s Water Systems pump sales continued growing rapidly with unit volume increasing by over 75 percent in second quarter 2006 versus 2005. Franklin Fueling Systems product sales were also up about 40 percent from the prior year second quarter. Net sales for the European and African regions were down about 8 percent in the second quarter of 2006 compared to last year as business continues to reflect soft market conditions.

For second quarter 2006, operating earnings were $26.1 million, up $5.2 million or 25 percent compared to $20.9 million a year ago. The improvement in operating earnings was driven by the record sales level. Gross profit, although up in dollars, is down 50 basis points due primarily to raw material cost increases, led by copper, and other operating costs. Copper wire, a significant component used in the manufacture of electric motors, has experienced cost increases of more than 50 percent since the first quarter. The rise in copper and other raw materials has necessitated a market price increase action which has been announced to be effective in the third quarter. Selling and administrative expenses increased primarily due to the inclusion of Little Giant expenses since the April 21, 2006 closing of the transaction.

- 3 -

Scott Trumbull, Chairman and Chief Executive Officer, stated “We are pleased with the strong sales growth that our pump and control systems products achieved during the second quarter. Together, these products represented about 40 percent of total revenue for the second quarter of 2006 and grew by more than 25 percent versus their sales on a pro-forma basis adjusting for the Little Giant acquisition in the prior year. This strong growth of our pump and control systems products coupled with the ongoing manufacturing migration to low cost regions, enabled us to increase earnings in spite of flat submersible motor sales and the rapid escalation in raw material costs.

The Little Giant business integration activities are proceeding as planned. This acquisition will further solidify our position as a leading global supplier of water pumping equipment for residential and light commercial applications. Also, while the Company incurred $70 million of debt on April 21, 2006 to complete the Little Giant acquisition, we have generated sufficient cash flow to pay down $20 million of this amount as of the date of this press release.”

Franklin Electric is a global leader in the production and marketing of water and fuel pumping systems and is a technical leader in submersible motors, drives, controls, and monitoring devices.

########

“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, changes in distribution channels, supply constraints, technology factors, litigation, 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.

- 4 -

FRANKLIN ELECTRIC CO., INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
	Second Quarter Ended						First Half Ended
	July 1,			July 2,			July 1,			July 2,
	2006			2005			2006			2005
Net sales	$	162,669		$	123,537		$	273,649		$	205,971
Cost of sales		108,902			82,117			183,290			139,072
Gross profit		53,767			41,420			90,359			66,899
Selling and administrative expenses		27,626			19,976			49,241			36,248
Restructuring expense		-			505			-			710
Operating income		26,141			20,939			41,118			29,941
Interest expense		(1,076	)		(183	)		(1,269	)		(355	)
Other income		615			190			1,060			341
Foreign exchange gain / (loss)		(81	)		(43	)		(126	)		(32	)
Income before income taxes		25,599			20,903			40,783			29,895
Income taxes		9,157			7,358			14,642			10,539
Net income	$	16,442		$	13,545		$	26,141		$	19,356
Net income per share:
Basic	$	0.72		$	0.61		$	1.15		$	0.88
Diluted	$	0.70		$	0.59		$	1.13		$	0.84
Weighted average shares and equivalent
shares outstanding:
Basic		22,852			22,040			22,714			22,090
Diluted		23,373			22,994			23,239			23,127

- 5 -

FRANKLIN ELECTRIC CO., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)	July 1,		Dec. 31,
	2006		2005
ASSETS:
Cash and equivalents	$	32,931	$	52,136
Investments		-		35,988
Receivables		62,327		30,165
Inventories		107,012		70,381
Other current assets		17,305		14,350
Total current assets		219,575		203,020
Property, plant and equipment, net		108,289		95,732
Goodwill and other assets		163,469		81,010
Total assets	$	491,333	$	379,762
LIABILITIES AND SHAREOWNERS' EQUITY:
Current maturities of long-term
debt and short-term borrowings	$	11,300	$	1,303
Accounts payable		26,722		26,409
Accrued liabilities		45,033		36,310
Total current liabilities		83,055		64,022
Long-term debt		62,434		12,324
Deferred income taxes		4,464		4,296
Employee benefit plan obligations		26,475		25,830
Other long-term liabilities		5,344		5,728
Shareowners' equity		309,561		267,562
Total liabilities and shareowners' equity	$	491,333	$	379,762

- 6 -

FRANKLIN ELECTRIC CO., INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)	July 1,			July 2,
	2006			2005
Cash flows from operating activities:
Net income	$	26,141		$	19,356
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and amortization		8,452			7,783
Stock based compensation		1,549			-
Deferred income taxes		2,498			694
Loss/(gain) on disposals of plant and equipment		(69	)		51
Changes in assets and liabilities:
Receivables		(15,801	)		(9,244	)
Inventories		(7,484	)		(16,879	)
Accounts payable and other accrued expenses		(436	)		6,879
Excess tax from share-based payment arrangements		(5,399	)		-
Employee benefit plans		334			451
Other, net		(3,836	)		(234	)
Net cash flows from operating activities		5,949			8,857
Cash flows from investing activities:
Additions to plant and equipment		(8,749	)		(5,569	)
Proceeds from sale of plant and equipment		323			1,048
Additions to other assets		(293	)		(1,005	)
Purchases of securities		(63,500	)		(93,500	)
Proceeds from sale of securities		99,488			77,975
Cash paid for acquisitions, net of cash acquired		(122,713	)		-
Net cash flows from investing activities		(95,444	)		(21,051	)
Cash flows from financing activities:
Additions to long-term debt		70,000			-
Repayment of long-term debt		(10,144	)		(142	)
Proceeds from issuance of common stock		9,225			4,356
Excess tax from share-based payment arrangements		5,399			-
Purchases of common stock		(198	)		(12,318	)
Reduction of loan to ESOP Trust		232			233
Dividends paid		(4,780	)		(3,970	)
Net cash flows from financing activities		69,734			(11,841	)
Effect of exchange rate changes on cash		556			(1,089	)
Net change in cash and equivalents		(19,205	)		(25,124	)
Cash and equivalents at beginning of period		52,136			50,604
Cash and equivalents at end of period	$	32,931		$	25,480

- 7 -