Franklin Electric Co., Inc.

First Quarter 2025 Sales and Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand has been raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Interim Chief Financial Officer, Russ Flieger.

Thank you, Andrew. And welcome, everyone, to Franklin Electric's first quarter 2025 earnings conference call. Joining me today is Joe Rosinski, our Chief Executive Officer. On today's call, Joe will review our first quarter business highlights, then I will provide additional details on our financial performance, and Joe will make some additional comments related to our key growth and value drivers, along with our outlook. We will then take questions. Before we begin, let me remind you that as we conduct this call, we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to various risks and uncertainties, many of which could cause actual results to differ materially from such forward-looking statements. A discussion of these factors may be found in the company's annual report on Form 10-K and today's earnings release. All forward-looking statements made during this call are based on information currently available and, as required by law, the company assumes no obligation to update any forward-looking statements. Earlier today, we published a slide deck to accompany our prepared remarks. The slides, titled Q1 2025 Earnings Presentation, can be found in the investor relations section of our corporate website at www.franklin-electric.com. With that, I will now turn the call over to Joe.

All right. Good morning, everyone, and thank you for joining today's call. Before we begin, I'd like to take a moment to welcome Russ Flieger, who recently took on the role of interim chief financial officer and will report our financials today. Russ has been with Franklin Electric since 2023, serving as CFO of our water system segment, and brings more than 20 years of financial leadership experience into the company. We thank Russ for his commitment and stepping into this role, and I look forward to continuing our partnership. With that, I would like to begin my thoughts on the first quarter on slide three. Our underlying business performed in line with expectations. While we worked through some weather-related challenges earlier in the quarter in our distribution business, The positive order trend from last year carried into the first quarter, supporting a robust backlog in Q1 and giving us confidence as we look ahead. As we execute our strategy, we're focused on faster growing markets, making great use of our healthy balance sheet, driving efficiency in our operations, and building processes and teams to continue to deliver great service to our customers. We're pleased with our two acquisitions completed in the first quarter, bringing two great businesses and strong products into our portfolio. We expect integration to be well executed for these businesses to deliver great value to our customers. I'll touch on these topics later in the presentation. Our energy system segment delivered strong results, which helped offset the slower start in our distribution business, demonstrating the strength of our diversified global portfolio. Several one-time costs were a drag on first quarter results, namely expenses related to an executive transition and recent acquisitions. However, Our core business fundamentals remain strong, and I'm pleased with the response from our global teams to the uncertainty surrounding the tariff environment. Moving to page four on the slide deck, I'd like to take a moment to thank our global Franklin Electric team. Our commitment to serving customers, bringing great products to market, and leading in a difficult environment has shown great momentum. These past few months have been challenging as we navigate tariffs, acquisitions, accelerating our strategy, Well, my first few quarters have brought some change to our structure and focus. The response, dedication, leadership, and support from our global team has been amazing. We will continue to build on our great history and reputation as we grow in 2025. Turning to results on slide five, consolidated sales were down slightly as growth in our water systems and energy systems segment were offset by a decline in our distribution segment. Gross margin was up slightly for the quarter at 36%, showing an underlying operating strength, even as we navigated two acquisitions, some FX headwind, and a slower market. Operating margins for the quarter were 10%, down slightly year over year, as we absorbed one-time SG&A costs tied to an executive transition and acquisition-related expenses. Excluding these items, which totaled about $0.07 of EPS, SG&A costs were favorable as compared to the prior year as we realized the benefit of our restructuring actions from previous quarters. Considering the challenging macroeconomic environment and one-time costs, we're pleased with our performance and view this quarter as a productive start to the year. Before I turn the call over to Russ to discuss the financials in detail, I'd like to give an overview of our segment performance where we've seen some momentum. The water system segments segment delivered flat sales for the first quarter, in line with our expectations, as unfavorable volumes were offset by strong pricing actions. Additionally, negative impact from foreign currency translation was mostly offset by incremental sales from our recent acquisitions. We also lapped what we anticipated to be the final quarter of a difficult comparable period. As a reminder, we capitalized on the pent-up demand of our U.S. fleet business for large dewatering products during the prior year period. and water treatment, we continue to see strength, despite a weaker housing environment. And the U.S. groundwater market remains healthy. Outside the U.S., performance was solid, despite some currency-related headwinds in South America and Turkey. Energy systems delivered another strong quarter, with sales up 8%, reflecting both positive market dynamics and solid execution by the team, as both pricing and volumes were favorable. We recorded growth across key product lines supported by robust demand in the U.S. energy sector. While our critical asset monitoring business had a slightly slower start to the year, we feel good about this activity in this space and expect to ramp up in the coming quarters. Energy Systems continues to demonstrate our ability to execute and drive productivity and deliver great new solutions. The segment operating margins increased by 250 basis points in the quarter. Our distribution business faced some short-term weather-related disruption, particularly in the US Midwest, where road restrictions due to frost impacted field installations for several weeks. However, we're encouraged by the team's ability to hold margin despite these challenges and softer sales. The fundamentals of this business remain solid, and the market has improved throughout the quarter. We're committed to delivering premier customer service, driving margin efficiencies through our recent cost actions and process improvements, along with maintaining pricing discipline. Taken together, the performances across our segments highlight the resilience and diversity of our portfolio and our adaptability to changing conditions while we continue to invest in long-term growth. Now I'm going to hand the call over to Russ to review our financials in more detail. Thanks, Joe.