Franklin Electric Co., Inc.

Hello and welcome to the Franklin Electric Reports second 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 Chief Financial Officer Jennifer Wolfenbarger.

Thank you, Andrew, and welcome everyone to Franklin Electric's second quarter 2025 earnings conference call. Joining me today is Joe Rosinski, our Chief Executive Officer, and for Q&A section, Russ Flieger, our Water Systems CFO. On today's call, Joe will review our second quarter business highlights, and 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'll 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, except 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 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. Joe?

Thank you, Jennifer, and good morning, everyone. Thank you for joining today's call. Let me start our call today by highlighting our team's strong results in the second quarter on slide three. It reflects our adaptability, commitment to our employees and customers, and strategic execution. As I finished my first year as CEO and have seen the great work that our Priceline team is doing to serve, innovate, and grow, I'm proud of the progress we've made and how we've responded to change in a challenging external environment. All three segments saw organic growth with a good mix of price and volume. Overall, we've set new high marks for revenue, income, and earnings per share. We delivered a sales record in our water and distribution segments and record operating income in our energy segment. Overall, end market demand is mixed globally and has remained relatively stable. We continue to see encouraging order trends as we exit the quarter, and our healthy backlog gives us confidence in our ability to sustain this momentum as we move forward. Weather conditions were largely neutral overall. Existing home sales and housing starts remain soft, but our ability to add new customers, deliver the best service in our industry, and bring new products to market have helped us find good paths to enable growth. Importantly, our pricing actions have been successful, helping us protect margins during the recent tariff-driven volatility in the market. Our strong top line results and operational execution helped offset some of our hyperinflationary regional markets and several one-time costs, mostly expenses related to recent acquisitions, which are integrating well. We also continue to execute our long-term strategy, focusing on faster-growing markets, capitalizing on our healthy balance sheet, driving efficiency in our global operation, and building processes and teams while continuing to deliver great service to our customers. While the global markets remain uncertain in the face of tariffs and commodity inflation, we've been disciplined in our plans and response and are poised to execute in the second half. Moving to page four, I'd like to take a moment to touch on the incredible team and culture we're building here at Franklin. Culture has been a strength of Franklin in our storied history, and we're excited to build on this strong foundation. One of our key tenants is being a great place to work and attracting the best talent. With that, I'm excited to welcome Jennifer Wolfenbarger as our new CFO. Jennifer joins us with extensive financial leadership experience in global operations, most recently serving as Chief Financial Officer for the insulation business at Owens Corning. She brings deep expertise in financial planning and analysis, accounting, operational finance, and strategic business partnerships. And she has led finance teams supporting complex global businesses. We're confident that her strong leadership and her global perspective will be a tremendous asset to Franklin Electric as we continue to execute our growth strategy. I would also like to extend my sincere thanks to Russ Lieger for stepping in as interim CFO over the past several months. Russ will return to his role as a water system segment CFO, where his leadership continues to drive meaningful impact. Additionally, I'm thrilled to welcome Daniella Williams as our new Chief Human Resources Officer. Daniela's deep expertise in HR technology, talent development, analytics, and global workforce strategy will be instrumental in ensuring that we're well positioned to support our employees and customers well into the future. Thank you to our global Franklin team and welcome to our new leaders. Turning to results on slide five. Overall, we delivered strong consolidated sales growth of 8% with growth across all segments. While gross margin was down slightly, consolidated operating margins reached 15%, driven by strong execution and improved SG&A in our energy and distribution segments. Despite the continued macro uncertainty related to tariffs and several one-time acquisition-related costs in the quarter, I'm impressed with our team's response and our ability to drive growth in this environment. Looking at our segment results in more detail, Water systems delivered a solid sales result of 8% year-over-year, benefiting from favorable pricing, volume, and recent acquisitions. Similar to last quarter, the groundwater market remained steady, where we captured strong price realization in the U.S. We've lacked the difficult comparable period in our U.S. fleet business, and the business exhibited strong growth in the second quarter. The segment did, however, see a drag on margins as a result of mix stemming from sales related to large dewatering products and the recent acquisition-related costs. Energy delivered 6% sales growth, driven by favorable volume and price as international markets and our grid business picked up steam. As we look toward the second half of the year, we're excited about upcoming projects in places like India and Saudi Arabia. The segment also had strong operating income and operating income margin, with margins improving by 200 basis points. While margins have expanded materially in recent quarters, we expect to remain comfortably around this range in the near term. We're optimistic about our grid and asset monitoring business as it's rebounded nicely and is benefiting from expanded channels and new customer acquisition. Distribution also delivered a strong quarter with record sales Despite some negative impacts of storms and another wet year, the segment recorded 5% growth driven largely by higher volumes. Operating margins improved by 300 basis points, supported by strong operational execution, an improved pricing environment, and the stabilization of commodity prices. This is an encouraging trend for this business. I'm now going to hand the call over to Jennifer to review our financials in more detail.