- Earnings call transcript Q3 2022

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Operator

Good day and thank you for standing by. Welcome to the Franklin Electric Reports Third Quarter 2022 Sales and Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation there will be a question and answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. to Taylor, conference Chief like speaker to now Jeff today, Financial would hand over the your I Officer. Please go ahead.

Jeff Taylor

have Thank finished, everyone I our details. to review our earnings morning will CEO. On and discuss third Chairperson quarter we questions. Gregg Sengstack, Good we time me When XXXX will call, Gregg With conference to you, quarter financial call. business and third is our third will quarter today’s Franklin take are Catherine. Electric’s today welcome highlights and

begin, let on differ of release. no this are of statements Act we could this that, which over Chairperson and from within based making me as Before now Reform as be update annual remind will results XX-K available These and many statements. forward-looking such meaning we call, forward-looking subject of cause actual you to assumes law, conduct in found A the the required materially during be Litigation statements. discussion forward-looking any call made XXXX. to Form I turn statements except and that by earnings to Private report the today’s various CEO, call Securities Sengstack. information we Gregg to may these risks will of the uncertainties, forward-looking currently statements factors company Company’s the obligation our on in With are All and

Gregg Sengstack

us. for all Thank you joining you and Jeff, thank

our net able third and any for have basis who strong offerings. healthy current performance. in execution demand demand continued for consolidated history sales team. and time with our achieve momentum double-digit On experiencing third the Water in commitment reflects environment. top-line through results Fueling all Our forward solid highest shipments well company’s a continue without as strength been about as these due and was We of operating growth. and by would quarter second demand dedication to financial We into on the presented the in our quarter remains employees for the backlog the this all new global made $XX continued normal past businesses products, the end-markets to quarter. not to reflecting quarterly at performance progress achieved records the global our obstacles seasonality. quarter approximately This End-market System Further, million, and our due the remains manage down three continued the million distribution $XXX from a elevated

although similar levels about still the previous is from quarter, experience backlog some improvements our Operationally in to elevated the we Our quarter pandemic. third before chain. did was four-folds the supply

continue to due remain cash times and cost the conversion been We year levels, drive throughout flow to inventory focused and reducing issues, and longer higher supply levels. have cash inflation, higher lead which free on

of of chain albeit delivered quarter Despite performance was third expansion supply we expect of as inflationary end We disciplined the notably gradually points across of resiliency operational revenue year to operating which margin control, team in SG&A, basis and lower through In this our into XXXX. XXXX. than businesses. through headwinds, improve, quarter, three a each expense XXX exhibited our percent the the

of geographies. Turning operating organic and revenue and sales overall record growth Systems to Water strong with income operating in all of third our growth segments, income delivered growth XX% led quarter XX% by

and strong segment Canada, growth water The end-market Water pumping for pumping, translation, demand and In the organic U.S. third for currency treatment. also in equipment of the Canada, is Outside by strong all in XX% increased of of growth was with surface water the ground XX% XX%. increased all organic organic XX.X% equipment delivered of Systems quarter. margin surface operating foreign and Systems Excluding growth by XX%. a groundwater U.S. sales regions by Sales pumping was and growth XX% Water pumping about world. led about

to in combined to replacement by supported these and dry due to United going strong continue demand the crop commodity of stability other steady drive will States within high-level prices with weather We forward. the business and believe segment globe. the demand the factors, We our Systems Water regions our see business of the continue

and beginning year. quarter the solid Our delivered and also the record of groundwater These the results The driven acquisition quarter sales market, U.S. for by delivered income, the price U.S. distribution Lake business well growing segment its third of operating margin X.X%. operating as previously demand an mentioned any in history, as in record at respectively. realization Equipment of were XX% XX%

deliver to role continues segment's company. our team major distribution growth underscoring results a as the strong Our driver for

shown potential Our winter cannot vapor higher overall continues U.S. revenue the Strong and Fueling was of food, in operating a energy recession with The income an U.S. by monitoring inflation, sales Europe. new and operating outside business recent energy history expansion of chains supply and investing segment delivered headlines have record recovery, income growth U.S major a environmental locations of quarter demand the globally conflicts and and XX.X%. operating delivered be its strong same growth XX%. any in material Systems XX%. and XX%, margin marketers increased need tough mining pandemic growth Organic Sales of Canada, Fueling for interest in in At in over quarters as the the Systems growth weak the sales by remain the third in many EMEA for and agriculture, as the up fragility about the greater geopolitical were last infrastructure. Outside the U.S. highlighting the about to experienced in time, XXXX. fueled rates, and ignore XX%, China. India Canada. we've a several same. compared focus the revenues and management well Canada, One tailwinds quarter the the the to offsetting on and sales U.S. in and Again, of and of Canada

systems. demand catalysts global will add a developing these fuel to with believe move in and a footprint we system strong provider As the to and products our current water significant regions, for

we share dividends. further remains investments returning Our continue and to as capital will unchanged the and make our allocation grow as repurchases business, to shareholders well to cash strategy through

are strength our U.S. especially in we offering. opportunities U.S. investment outside the dollar, continued strategically on product the With expand to focused

Turning and our foreign more performance from now to losses headwinds quarter in the higher-than-anticipated exchange translation in the to third earnings offset than stronger-than-forecasted our outlook, the quarter.

in reflecting in As to Jeff. share, we guidance. now our to $X.X our back I'll per midpoint guidance to per from XXXX XXXX of a our range the increase call result, in over $X.XX are restructuring full billion and $X.XX, full with guidance $X.XX $X year to updated our earnings an net in guidance and sales our year revising between earnings previous share $X.XX be turn be the excluding billion

Jeff Taylor

operating record Thanks, was segments. Overall, the Gregg. a company revenue, We it quarter established quarter for company third new operating income per consolidated and performance our records for and share. third earnings

were quarter the earnings XXXX for versus $X.XX XXXX. diluted quarter share for $X.XX fully per the of third third Our

Canada, Sales increased Outside about about Water XX%, surface Sales the U.S. consolidated third quarter U.S. quarter. to businesses by of Third about decreased in XX% $XXX.X sales million, the acquired XXXX XX% and while U.S. overall. Canada strong sales due grew The XX%, $XX.X $XX.X due the about XX% Sales quarter X% were $XX.X quarter XXXX revenue to of million, XX%. an by sales increase the currency organically equipment of groundwater Africa East or to quarter organic pumping sales, of XXXX currency in compared in Europe, about of million revenue million, the record the quarter or from from by the U.S. foreign due Water price sales quarter to Systems of by XXXX Systems XXXX sales acquisition-related the the markets X% by the were third and XX%. organic increase Water sales Canada in contributed led third Canada Middle a Systems increased in $XXX increased all translation. the third markets. XXXX XX%, compared about end-market by Systems to due foreign sales decreased Sales by third was demand. higher increased and and growth sales XXXX up sales pumping since third acquisition-related to were volume. quarter equipment million in Water of in third translation. outside all $X.X In about and and million, and

quarter the million. in to about realization the an Fueling income sales foreign in due XXXX and were to X.X% the sales cost about third XXX income $XX by XXXX segment lines. lower product Distribution in organic due third quarter in points, and quarter was $XX.X basis due and record quarter increase in by sales the increased record up China. quarter Latin operating Systems was the million million revenue was $XX.X Additionally, the sales resulted increased third all from categories. businesses was Fueling compared America was sales the demand sales the of quarter third product strong and quarter $XX.X a segment to up the EMEA, million, or million third and Asia of at in quarter Revenue in robust demand increase sales. $XX.X margin fixed in had Systems XX% price quarter were and offsetting the quarter, higher of sales, a margin the growth third of third India $X.X in compared quarter of Sales Fueling Distribution and acquired million, cost company Operating Pacific The third growth. the XXXX. translations. increase operating increased from third strong the sales quarter, from new based Operating at million quarter primarily operating quarter primarily to in the $XX.X Outside the broad third sales by XXXX. income achieved revenue were from management. quarter and quarter U.S. income compared any Canada XX% $XXX.X operating XXXX. U.S. in or in on $XXX.X sales Distribution XXXX third third XXXX. growth regions to income of operating leverage since currency higher higher million third The XXXX with of driven margin revenues of for million XX.X% third was XXXX realization The versus was XXXX. versus compared XX%, the the decreased of The sales Canada, XXXX XXXX sales. of XXXX, $X.X because to of record million. record for versus the X% and quarter million. markets. In Systems Systems in the most Water Systems income Fueling XX.X%, to third across the Operating third improved income price a $XX.X of XX% higher about income to distribution, compared quarter

operating income due quarter income the gross the XX.X% The margin percentage an higher third third compared $XXX.X of quarter margin sales quarter of versus a sales the XX.X%, as management. to basis on to percentage year. gross XXX from sales. was prior XX.X% of on was was of in due In profit profit higher quarter third income the costs quarter in improved XX.X% XXXX The of down in of basis to The XXXX sales. The the Operating XXXX. was primarily of was the profit margin in price profit to operating XXXX gross for $XXX.X third XXXX, was of third increase the leverage of million. net cost gross primarily profit realization quarter higher dollar a million points. gross company's increase due third consolidated and The fixed sales, from XXXX, increase net

causing expenses inflationary are $XXX.X While $X.X were in variances XXXX. the quarter of cost increases, offsetting inbound third of supply about realized Selling, were more compared disruptions $XXX.X in pricing quarter and the to unfavorable from and XXXX, actions administrative freight. million. SG&A expenses million higher are businesses general than acquired third million absorption

acquisitions, expenses were Excluding lower SG&A by million. $X.X

of quarter As to million XXXX prior foreign XXX unfavorable Consolidated $XX are an revenues. headwind million year up income XX% higher the or third from points over of in lower basis estimated sales the an quarter. quarter sales translational million. The $XX.X operating percent costs increase total due of of operating XXXX, $X.X in SG&A in despite primarily income million the $XX.X a third exchange was was

of to before XXth will quarter XXXX was was of spending. XX% as third the quarter XX.X% of discrete of rate income our the increase quarter prepared events higher was to is record discrete about to about for quarter net about quarter a leverage $X.XXX XXXX are XXXX XXXX remarks. Xrd. full The and and volumes announced third tax essentially or cost on million The below both tax earnings flat margin SG&A cash third and The be unfavorable sales third impact of higher in the in the of third XXXX. about year XX%, full before XX%, operating foreign tax of the effective projected XXXX. share. jurisdiction for percentage and versus about per events sales $X.X of a of a In operating XXXX, to of quarterly pre-tax related effects we was November XX.X% compared earnings the paid This rate due margin controls adjustments. in primarily of of and shareholders operating foreign primarily incurred interest expense. rate November income unfavorable exchange $X.XX be year of tax dividend settlement Yesterday, concludes expense XX%, The indirect These that the to of transactional on to the it company

We to Catherine questions. will call turn the now for Question-And-Answer over Session

Operator

Thank Instructions] first you. Liptak question [Operator Seaport Global. comes with from Our Walter

Your open. line is

Walter Liptak

morning, guys. Great good Hey, quarter.

Gregg Sengstack

Walt. you, Thank

Walter Liptak

distribution the that Hi. and profitability I business about first there. through wanted ask to the came

of does future mix or call just the margins? sustainable should kind what volume something profitability us think leverage. as we that didn't I about about of tell could wonder, how be You future out this

Gregg Sengstack

mix So I’d depends because parse the operating is as say business, generally, as second, hard a that the volume get it our we quarters commodity little to I third that are a distribution distribution going non-commodity. scale best bit may recall bit products through Walter the from really out the leverage, distribution has. quarters most this, you types commodity-based it quarter-to-quarter are versus, the operating this generally call, how on of now much or with has what little But has profile

year opposed we X% So profitability the feeling to will range over X% more and able fourth first and as recognizing confident to third. of the the than we the systemically lower kind whole are higher quarter original are be that that maintain to second

Walter Liptak

about residential? or are business how of your Okay. guess sold are business, And the you feeling any that of part parts I that into

Gregg Sengstack

Sure.

So, U.S. business and the view XX% gives to now, we of us organically. it the products of to saw end-market a a closer last a which distribution were right bit the overall space, distribution as business compared portion quarter, our that going non-commodity little the in see groundwater the about is in as year we through up

of more because demand country, So that high seeing are to of a been know some we demand the relatively are number as still strong as is for movement replacement areas in that see because and to that end-market continuing and you've dry it's of such a been following settings. some well you factor rural us it's as population years, also we

you market all So, are led business year. of and share increase distribution these over to having potential have of a kind gains of level that last the

also other our who good had buy then quarter. results we product in well that distributors, our seeing and the we're distributors So, independent

Walter Liptak

for on then just the are fueling. just there, sort one And for on more have thanks could who your just wonder competitors ongoing projects, some of how you you the that. results are comment there. if environment. of How – Yeah, sort some Great. funnel great do feeling of you another aboveground Okay. I seen volatility about

Gregg Sengstack

environment the in good we're right us. Sure, strength seeing now for

aboveground As equipment we and in dispensing you out, are dispensers pointed not or equipment.

of to some bit. we out So, some the completion be of programs are XXXX that of a reduced little volatility upgrade indications had some are of getting that we just in build the going But had card that haven't readers. they've the because the

at looking systems fuel acceptance rollout our We are, the life. management and getting as continued the – end of our of – traction time, there becoming reaching good are and some some at systems of same competitor

feel XXXX. we the out we are middle a reduction a seeing some in deployment of of in So, about capital that, marketers good by indications potential of couple but

Walter Liptak

Okay. Got it. Thank you.

Operator

Thank One moment. you.

question a from with have Halloran Baird. We Michael

is open. line Your

Unidentified Analyst

Pat everybody. Mike. morning, for is on This good is Hey,

Gregg Sengstack

Good morning.

Unidentified Analyst

a quickly, weaker. you geographic bit you can you Sticking China discuss know Fueling? maybe called you maybe little maybe being variances regional Can about the can out in I with the talk Fueling variants? –

Gregg Sengstack

Sure.

underground a because the are may double and up up, the Chinese was that anticipated the stations. wall you had essentially recall on that environment China – focus in several of gas piping, So, cleaning were there piping the roll of upgrade recovery we further in they that to systems cleaning year government's in-station diagnostics vapor up going monitor

leg there has opacity not yet may around occurred may when that occur. so and waiting and China's to happen second we So some or that that activities see are is not and still

so of So is recovery, so retrofitting are recovery the back past vapors more India they to the are the that depots vapor called a they once we've contain runrate doing fuel we've we'll more the back a bottom steady million the they since sub-$XX in more transport keep which China, that kind been them X called and than seeing loading initially of surge had this can fuel of transport loop tanker system. the closed what's the Opposite that India. trucks, can in to deliberate big and in vapors decline dump a Stage to we in like station the seeing revenue. they're which is gas trucks they and vapor and is about

can Stage automobile. to to have you X get before about surge related recovery, vapor is You the really Stage X need which

stations that because a equipment. India we respect BP and stations Reliance over couple portion the growth a because is to in of of between hundreds of So of of joint gas also couple strong putting up gas and in of and that venture are years which seeing thousand a next Jio-BP,

tends little United But, oil be by the outside either more see countries America, to large are sales – kind actually, the major state-owned a or tend some So expecting kind markets major Asia, are India. quarter-to-quarter in flattish we United Latin saw markets outside and EMEA globe, companies. that Fueling in rest – to companies in of across typically lumpy we States, growing, sales the good our see outside to of on initiatives depending of growth we or oil of States oil

will you question if answer. a can So, that, additional view I discrete think I you gives have

Unidentified Analyst

you. helpful. No for, that was I that the color looking was exactly Thank was

you gears called low you I can and you can the low are switch groundwater. results between surface maybe we talk maybe believe in surface variances demand both you two? in about out pumping XXs variance But the bit, little if products. groundwater Now a the great pumping, between Obviously, teens talk and seeing some about, of maybe for

Gregg Sengstack

Sure.

been it's been by more all So has infrastructure stated the of about really with our for groundwater our United it's but so if pumping, groundwater business large last really, both pumps watering security. couple earlier doing for reasons dryness, of absurd particularly kind been energy the energy, strong in over States and moves, particularly years, recently we business, the think our service well, demographic and crops, you

with saw situation we the go the we pump watering a counts tremendous industrial, falloff are focus the different globe, to in the for that again, granted across rig very but on , the large are the talking energy a – for low. XXXX, this growing to other energy They use think, counts a today. that and Rig back are but minute, – of as sector so You or very just demand security. channels, in United bogey about and we I States you rig counts and and particularly

our to again and some large security we maybe outsized I part pumps energy and well being we just see space accelerated strong our development, invested as we've seeing this demand demand So historical recognition. somewhat in demand channels the think as as capital to in watering growing compared in are been continue as for other some general brand

business. Dewatering outsized therefore in driving what So has our that's Surface really Pumping been the our growth

Unidentified Analyst

heard you and you I correctly. of you some I to color sure see perfect know say Talked Thank declining I in I was believe I combination last this that you. a said is also remarks, but make but catch-up. That opening heard from sequentially, clarifying about question seasonality, backlog one the starting me. it want to

that make to heard sure Just I right. wanted

Gregg Sengstack

We …

Unidentified Analyst

up. I typing am

Gregg Sengstack

past in we like there it fundamentally is We'd recover selling backlog but others, – saw meaningful dues many saw in a material seasonality love of the our improvement Yeah. we which X.X stock, to – of to that we've the there lot reflected is last years reduction mean, over I on be the that. struggling or been recognize out dues, past Plus I is and be are is a exposure how going that in is of destocking is big every U.S. the course, United and we But going on part seeing to is States that have of the seasonality. there global dues, on but It's catch-up our the business, what we have but focus to there normal to also past a a impact and company exposure. – we

are naturally business, We as Hemisphere-centric we some quarter. for fourth - and in go see we're slowdown into Northern a the so

Unidentified Analyst

for. I’ll exactly Thank Great. you was I looking it what on. pass that’s

Gregg Sengstack

Thank you

Operator

Thank you.

a have Summerville from Davidson. with D.A. question Matt We

Your open. line is

Matt Summerville

questions. Couple Thanks.

First, three versus performance, when when the of how you by look three volume look price organic across that the businesses? the and much businesses driven was you

Jeff Taylor

past third good that will biggest be to quarter volume of the XX% quarters is Yeah, be the would it’s to north we I - That's in it's be. organic what in say, is we've certainly pretty going the close of are it seen Matt, piece to Matt, similar to in of continued morning. seeing. growth price or

when cite exchange piece translational impact, exclude growth those foreign impact so other The organic we FX numbers. the from we the when

Matt Summerville

that end be realized point, think should about realization over, coming maybe How realization a forward? fully resin at off actions little bit copper, and taken steel, certain price you have the So with commodities, rolling benefit going even this fully all thinking captured when peak. we the aluminum, we about of from into price certainly price

Jeff Taylor

XXX% say, pricing pricing product the we have the have, areas. out to see To obviously our price question over, place, yeah, cost not inflationary we not increases there we've we've say some so fully that we're certain some seen at aggregate backlog seeing commodities your Yes, incrementally, have do first that we XXX% when and still put with in we your commodities, is the that's that's question still in seen realized but potentially would fully been of then pressures. I - the at we in look I on would turn still is

so, oil And they do down, so and see while products, copper high. resins, high, be are is that and is may and still Labor transportation gas-based costs we oil still plastics gas where were. still above

the inflation inflationary are it those be we to So of incrementally level, net some is, still that are costs. and at may slowing is while we pressures recover inflationary seeing still pricing

Matt Summerville

the here, look you material about kind would that If assume, that much trying as product Headwater And stuff, you I'm temporary would I how how of is passthroughs you become imagine mentioned, sense a if surcharges right business, distribution roll material at a am what look you because that thinking you that some indices to again, get of of headwind I referenced sell you to much Headwater on of the element that may categorized through guess I off. would the way? may non-commodity, the raw have do commodity of or I of when for because when versus the some there product non-commodity. at sell commodity-related the I

Gregg Sengstack

environment, lift upon get passing that businesses I are margin suppliers. their public follow are about been Certainly, we Matt, by you announcement because they inflationary it's some pricing the information, Yes, through think are that almost way. they that immediately distribution right thinking

margin the get inventory they so on have And of revaluing or the getting hand. they advantage more on

another served like to think a pulp-related able access further call is inventories of they've of on So I'll heavier And done carry I'll or purchases a Franklin. that the this type you is business. commodity your I that question bifurcate I'm third what products, it's be a about which things degree from Headwater to actually on loud saying like cable, that's our here in products XX% that case, because that, out capital just been about pipe, thinking well. of this wire, third it, haven't maybe their when split are

to so the case, part And forward. spot - that that in actually, and they so kind of it's in spot going tend that of a price that business

that out, these us. think I able figure been they've well, acquired operators we also So to all with are

So through cycles. cycles multiple the gone they've business

from doing if hold So, they to been pretty the to this sell, quarter-to-quarter much commodity number the buy not margin for years, they've a on are decades. because from of able pieces

So, a yes, the going I inflationary to of hundreds basis generally businesses you'll see in it's think I gross less changes. it on Headwater some excluding environment. call think don't or pressure maybe But distribution a major deflationary of profit points be

Matt Summerville

And then, dollars compression OI mix on distribution. in just more revenue, just that lastly, on The related? one higher quarter-on-quarter slightly is

Gregg Sengstack

compression you there point on businesses. this – we guess continue we has to a as a again, I of point Yeah, new of and pricing are you bit – and just are mix bringing seeing stabilized from a of view,

increases that also we We to have be getting need some and OpEx streamlined. of OpEx of mindful

across but So, the on we great going generally couple had factors there, little of OpEx leverage business.

at of little stabilization new again, I now to So, a more a think price level. your it's it's point, a bit

Matt Summerville

guys. Thanks it. Got

Gregg Sengstack

Thank you, Matt.

Operator

Connors Coast we have And a North from you. Thank Ryan with question Research.

Your line open. is

Ryan Connors

call. Thanks my Good Great. taking morning. for

Gregg Sengstack

Ryan. Hi,

Ryan Connors

So, like on there the It out congratulations bucking numbers. you does trend rocky great season bit. more seem a earnings little really are of the a

maybe, the is So, not noise that confidence talked are like that there did seems a the those there political you investments from the is their invest, in space some previous are back and energy a the But the of and mentioned regulatory in you backdrop but wanted in in back and XXXX. and is and they XXXX still Gregg people that like to economic there for really feeling a rig of target It reasons to lot stepping those incentives happening? they coming lot up are on investments like of accounts. not resources us are get periods about really

– there or that metrics really what are there So, can you driver? extent any a cite to is specific

Gregg Sengstack

falloff pumps large help point our at, To to they in the Pioneer one seem and data – you dewatering broadly appreciate Ryan. pretty based in when our I do more to remember, point and well now, raising looked that To sale just count. are your I XXXX in because a we correlate saw explain back question It's business we in the rig products. we the and of

brand greater have recognition. We

we getting the so to was rental again the So I'd more the back reason and based channel, off low the because of the lift is the has we're XXXX, for we point forward. it is, getting really But but falloff are business rig through it broader in much coming is a coming going lift base. the stability count are now

as around so, the for in got in I or here capital the be years space. having been to that's a increase restocking factor rental of to contributory - that, asset few figure investment the And a –

Ryan Connors

Yeah.

Okay. – is And about really one to I water a wanted dive little now of much impacts there scarcity that take you. situation was, a I right the want and your other into to of how on kind then, so get talk detailed more

major part severe people – kind do guys industrial, scarcity just is can residential, crisis. a in those and and there is groundwater to access when it's water Is think, water are that help that demand I regions people know access whether a for, here. we of you what really of a Ag, a in I here having that's lot that you of we driver

Gregg Sengstack

as factors. tables water reach certainly Water water have fallen. gets scarcity - Ryan, water is a one, that as to couple of

to deeper, costs larger products the crops system to going lost want quality You potentially fails, and systems, quality to people to a to going bigger for because place are up and the are turn pay go use buy and so want stock system if good, to it it's and not you're lot pumping time systems. going to need live pumping

us. good for generally that's So .

on The scarcity, other thing that's going you running agree be to again, are that higher with water energy going to you're you longer, costs. have systems input –

are looking more people So be going efficient for systems. to

into going more and type as most again, less distribution, generally systems generally of used and some us. of efficiently is and efficiency Also is And two-thirds then that systems are that's systems long getting modified materials out that's we've to pumping irrigation water cycle it construction away point of to again, in they means use agriculture have for not in typically of for So water efficient us. systems. sophisticated higher from efficient flood and good and which the used more environment, good very distribution is run get

there certainly several benefits one that kind - factors are scarcity Franklin we believe but So, of for is driving be are products and of shareholders, our long-term them.

Ryan Connors

Headwaters? everything picture last don't And is products. a inventory, was "pump seem bucking so another as then cycle a be can But well that's is Okay. your could for you that's destocking a different you to about the - of – next manufacturing as about then been and the that not this this the in on across, somewhere. area of side has quarters, sorts It do where there talk shelf issue. on know was much I one industrial you now talk all both big just and in seem big on you sell impact sort like how and out box" me be trend impacting few that you doesn't

Gregg Sengstack

a of destocking. had around lot we clearly, news so Yeah,

this lead supplier. stable in which to are have supply Headwater we time aggressively distribution inventories into mentioned, little times of is groundwater – would little because seeing they the much their reducing years I Headwater again, and is more view Electric, more a become year – we of as with we like of including U.S. Franklin a a As kind the maybe base have another their their past largest bit

- that's the the side gray – we and on see that, of in to customers we from surface business residential the on So water pumps. our hear larger I expect some

sensitivity offset levels. all that's by with to up been We we've fact some keep stocking the to struggling demand there are But that is demonstrated. that there we seeing that

our is year. we a that U.S. groundwater been So United that visibility next next is delivery not good, demand don't we saying the country have but exactly lower going so, into U.S. is the the which still I here But, improving year. outside I orders main thoughts, visibility the in in or inventory business. it’s it’s in – like like are to actually of given the like marketplace going because your a States are system inventory that we may [Indiscernible] for most with would year. of can't not been and the But for have into makes what likely the But of is more point, earlier long move softening had be it good, lot segment that is a And like in this level is and year, an this of space. may short amount visibility. excess that position know – I the challenge the with

Ryan Connors

Yes.

this for Thanks morning. Great. Okay. time your

Gregg Sengstack

Ryan. Sure, you. Thank

Operator

the Thank I showing Mr. questions call you. like other turn for remarks. I'd Sengstack End the Gregg am of And Q&A to back closing to queue. in no

Gregg Sengstack

and in fourth to results look good Have Thank . week. joining start next our the a you speaking you this forward us year. quarter for of to morning about

Operator

for concludes This Thank participating. call. today's conference you

day. now may You great have disconnect. Everyone, a

Franklin Electric (FELE) 25 Oct 222022 Q3 Earnings call transcript