Franklin Electric (FELE) 8-K/A Financial Statements and Exhibits

EXHIBIT 99.4

FRANKLIN ELECTRIC CO., INC. 

Little Giant Pump Company

UNAUDITED PRO FORMACOMBINED CONDENSED FINANCIAL STATEMENTS

The following unaudited pro forma statements give effect to the acquisition of Little Giant Pump Company (the “Company”), a wholly-owned subsidiary of Tecumseh Products Company (the “Parent”), by Franklin Electric Co., Inc. on April 21, 2006 using the purchase method of accounting, after giving effect to the pro forma adjustments described in the accompanying notes. The unaudited pro forma combined condensed consolidated financial statements and related notes thereto should be read in conjunction with the audited and unaudited historical consolidated financial statements and notes of Franklin Electric Co., Inc. and Little Giant, as previously filed on Franklin Electric’s Annual Report on Form 10-K for the year ended December 31, 2005 and Franklin Electric’s Current Report on Form 8-K/A, respectively.

The unaudited pro forma combined condensed statements of operations for the year ended December 31, 2005 and March 31, 2006 give effect to the acquisition of Little Giant Pump Company as if it had occurred on January 1, 2005.  The unaudited pro forma combined condensed balance sheet as of March 31, 2006 is as if the acquisition occurred on March 31, 2006.  

The unaudited pro forma adjustments described in the accompanying notes are based upon preliminary estimates and assumptions that the management of Franklin Electric Co., Inc. believes are reasonable. The pro forma adjustments are based on the information and assumptions available at the time of the acquisition. The purchase price has been allocated on a preliminary basis, with the excess cost allocated to goodwill. These allocations are subject to change and will be complete pending a final fair value analysis of assets acquired and liabilities assumed. These unaudited pro forma combined condensed financial statements are prepared for informational purposes only and are not necessarily indicative of actual results or financial position that would have been achieved had the acquisition of Little Giant been consummated on the dates indicated and are not necessarily indicative of future operating results or financial position of the consolidated companies. The unaudited pro forma combined condensed financial statements do not give effect to any cost savings or incremental costs that may result from the integration of Franklin Electric Co., Inc. and Little Giant Pump Company.

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FRANKLIN ELECTRIC CO., INC.

Little Giant Pump Company

Unaudited Pro Forma Combined Condensed Balance Sheet

For The First Quarter Ended 2006

(In thousands)  (	Franklin Electric April 1, 2006			Little Giant March 31, 2006		Pro-Forma					Pro-Forma Combined
	(Historical)			(Historical)		Adjustments					Condensed
Assets
Current assets:
Cash and cash equivalents	$	69,378		$	217	$	(53,062	)	(2a	)	$	16,533
Receivables		42,446			16,910							59,356
Net inter-company receivable		-			11,128		(11,128	)	(2b	)		-
Inventories		80,929			30,515							111,444
Deferred income taxes					4,928		(4,928	)	(2e	)		-
Other current assets		14,900			285							15,185
Total current assets		207,653			63,983		(69,118	)				202,518
Property, plant and equipment, net		95,861			9,625							105,486
Deferred and other assets		22,497										22,497
Goodwill and other long-lived assets		58,393			5,104		76,359		(2d	)		139,856
Total assets	$	384,404		$	78,712	$	7,241				$	470,357
Liabilities and shareholders’ equity
Current liabilities:
Current maturities of long-term debt and short-term borrowings	$	1,309		$	-						$	1,309
Accounts Payable		20,508			9,531							30,039
Accrued liabilities		28,601			5,985							34,586
Employee benefit plan obligations					17,034		(17,034	)	(2c	)		-
Income taxes		3,433			437							3,870
Total current liabilities		53,851			32,987		(17,034	)				69,804
Long-term debt		12,350			-		70,000		(2a	)		82,350
Deferred income taxes		4,369			353		(353	)	(2e	)		4,369
Employee benefit plan obligations		25,899										25,899
Other long-term liabilities		5,630										5,630
Shareholders’ equity:
Common shares		2,265			1		(1	)	(2b	)		2,265
Additional capital		80,030			8,753		(8,753	)	(2b	)		80,030
Retained earnings		197,625			36,618		(36,618	)	(2b	)		197,625
Loan to ESOP trust		(200	)		-							(200	)
Accumulated other comprehensive loss		2,585			-							2,585
Total shareholders’ equity		282,305			45,372		(45,372	)				282,305
Total liabilities and shareholders’ equity	$	384,404		$	78,712	$	7,241				$	470,357

See notes to pro forma combined condensed financial statements

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FRANKLIN ELECTRIC CO., INC.

Little Giant Pump Company

Unaudited Pro Forma Combined Condensed Statement of Income

For The Year Ended December 31, 2005

	Franklin Electric			Little Giant					Pro-Forma					Pro-Forma Combined
(In thousands, except per share data)		(Historical	)		(Historical	)				Adjustments					Condensed
Net sales	$	439,559		$	106,325									$	545,884
Cost of sales		291,745			75,834										367,579
Gross profit		147,814			30,491										178,305
Selling and administrative expenses		75,448			22,170										97,618
Restructuring expense		1,920			-										1,920
Operating income		70,446			8,321										78,767
Interest expense		(766	)		-					(6,113	)	(3a	)		(6,879	)
Other income/(expense), net		1,200			(50	)	))	)							1,150
Foreign exchange income		213													213
Income before income taxes		71,093			8,271					(6,113	)				73,251
Income taxes		25,084			3,159					(2,398	)	(3b	)		25,845
Net income	$	46,009		$	5,112				$	(3,715	)			$	47,406
Per share data:
Basic earnings per share	$	2.07												$	2.14
Diluted earnings per share	$	1.98												$	2.04
Dividends per common share	$	0.38												$	0 .38

See notes to pro forma combined condensed financial statements

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FRANKLIN ELECTRIC CO., INC.

Little Giant Pump Company

Unaudited Pro Forma Combined Condensed Statement of Income

For The First Quarter Ended 2006

	Franklin Electric April 1, 2006			Little Giant March 31, 2006		Pro-Forma					Pro-Forma Combined
(In thousands, except per share data)	(Historical)			(Historical)		Adjustments					Condensed
				2
Net sales	$	110,980		$	26,819						$	137,799
Cost of sales		74,388			19,283							93,671
Gross profit		36,592			7,536							44,128
1h
Selling and administrative expenses		21,615			6,610							28,225
Operating income		14,977			926							15,903
Interest expense		(193	)		-		(1,406	)	(3a	)		(1,599	)
Other income, net		445			319							764
Foreign exchange loss		(45	)									(45	)
Income before income taxes		15,184			1,245		(1,406	)				15,023
Income taxes		5,485			436		(494	)	(3b	)		5,427
Net Income	$	9,699		$	809	$	(912	)			$	9,596
Per share data:
Basic earnings per share	$	0.43									$	0.42
Diluted earnings per share	$	0.42									$	0.42
Dividends per common share	$	0.10									$	0.10

See notes to pro forma combined condensed financial statements

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FRANKLIN ELECTRIC CO., INC.

NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS

1.     Basis of Pro Forma Presentation

On April 21, 2006, Franklin Electric Co., Inc. completed the acquisition of Little Giant Pump Company, formerly a wholly-owned subsidiary of Tecumseh Products Company.  The unaudited pro forma combined condensed statements of operations for the year ended December 31, 2005 and March 31, 2006 give effect to the acquisition of Little Giant Pump Company as if it had occurred on January 1, 2005. The unaudited pro forma combined condensed balance sheet as of March 31, 2006 is as if the acquisition occurred on March 31, 2006.  The unaudited pro forma information is based on the historical consolidated financial statements of Franklin Electric and Little Giant Pump Company, as described in the pro forma financial statements, under the purchase method of accounting and accordingly, the respective assets acquired and liabilities assumed have been recorded at their fair market value and consolidated into the net assets of Franklin Electric.

A summary of the preliminary purchase price allocation for the acquisition, as if the purchase occurred on March 31, 2006, is as follows:

(In thousands)
Purchase Price:
Initial purchase price paid	$	120,801
Transaction costs paid and accrued		2,044
Total estimated purchase consideration	$	122,845
Preliminary allocation of purchase price:
Net working capital excluding cash	$	31,757
Property and equipment		9,625
Goodwill and other long-lived assets		81,463
Purchase price	$	122,845

Based upon the preliminary purchase price allocation, the total purchase price exceeded the net assets acquired and liabilities assumed when adjusted to fair market value and resulted in goodwill in the pro forma combined condensed financial information of approximately $81,500. These allocations are subject to change, pending post-closing adjustments, and will be considered complete upon a final fair value analysis of assets acquired and liabilities assumed. Thereafter, the adjusted purchase price will be assigned to identifiable tangible and intangible assets. Identifiable tangible assets will be depreciated over their determined useful life. In accordance with SFAS No. 142 “Goodwill and Other Intangible Assets”, the identifiable intangible assets will be amortized over their useful life, based on a pattern of economic benefit or consumption.

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2.     Unaudited Pro Forma Combined Condensed Balance Sheet

The following adjustments were applied to the Pro Forma Balance Sheet:

	(In thousands)	First Quarter Ended 2006
(a)	Increase cash for amount borrowed under long-term debt of $70,000 less $122,845 in Little Giant purchase consideration and the Company’s cash balance of $217. Record additional Company long-term debt.	($53,062) $70,000
(b)	Eliminate historic Little Giant Pump Company Shareholder’s Equity, and net inter-company receivables.	($1) ($8,753) ($36,618) ($11,128)
(c)	Eliminate the allocated Little Giant Pump Company post retiree medical benefits, which were administered by the Parent company. With the subsequent acquisition of Little Giant Pump Company by Franklin Electric Co., Inc (see Note 6) the liability recognized by the Parent company will no longer be allocated to the Company.	($17,034)
(d)	Adjust to record Little Giant Pump Company goodwill for excess of purchase price over the preliminary fair values of the assets acquired less the liabilities assumed in accordance with SFAS No. 142 “Goodwill and other Intangible Assets”. Eliminate the existing Company goodwill.	$81,463 ($5,104)
(e)	Eliminate deferred income taxes	($4,928) ($353)

3.     Unaudited Pro Forma Combined Condensed Statement of Income

The following adjustments were applied to the Pro Forma Statement of Income:

	(In thousands)	Year Ended December 31, 2005	First Quarter Ended 2006
(a)	Adjust Franklin Electric interest expense to reflect additional Franklin Electric long-term debt associated with the acquisition of Little Giant Pump Company. The offset to this expense is recorded as accrued liabilities in the balance sheet. The average interest rate applied is 5.3 %.	($6,113)	($1,406)
(b)	Adjust pro forma income taxes at the effective income tax rate of Franklin Electric for the tax effect of net changes in the results of operations.  The offset to this expense is recorded as income taxes in the balance sheet.	($2,398)	($494)

4.   If interest rates for the portion of the Company’s long-term debt based on variable rates were to change 1/8 percent for the year ended December 31, 2005 and for the first quarter ended 2006, interest expense would have changed $144 and $33, respectively.

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