Franklin Electric Co., Inc.

Good day and welcome to the Franklin Electric Reports third 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 11 on your telephone. You will then hear an automated message advising your hand has been raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce CFO, Jennifer Wolfenbarger.

Thank you, Andrew, and welcome everyone to Franklin Electric's third quarter 2025 earnings conference call. Joining me today is Joe Rosinski, our chief executive officer. On today's call, Joe will review our third 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, 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. Before we get into the details, I want to start with a few key takeaways from the quarter. Franklin Electric delivered another quarter of strong performance, in line with our expectations. The quarter was marked by growth across our end markets, discipline execution, solid integration of our acquisitions, and continued investment in our long-term growth priorities. Despite a dynamic operating environment, our teams delivered solid organic sales with both volume and price, margin expansion, and solid cash generation. These results demonstrate the strength of our strong channel partners, commitment to delivering the best service in the industry, and the diversified global portfolio that our customers trust. Q3 has shown our ability to manage through varying macro conditions and drive profitable growth. Our teams were able to overcome some challenging weather conditions, regional headwinds, slow existing home sales, and relatively few housing starts to ultimately deliver solid results. Our resilience is, in part, attributable to ongoing price and cost actions, which continue to prove effective. We also maintain strong cost discipline through the quarter, with SG&A improving as a percentage of sales, despite several one-time acquisition-related costs. As we navigate the near term, we remain focused on our strategic priorities, advancing several key initiatives this quarter, pushing on the pace of innovation, and completing several capacity expansion projects that position us well for the future. With a global footprint, strong balance sheet, and operational excellence, we are building enduring advantages that distinguish our business and support long-term value creation. Moving to slide four. I want to take a moment to thank our Global Franklin team for their commitment to our customers and to each other. My first year has brought change, and an agenda of growth and innovation and market conditions that make great results challenging. We have two new officers that started in the third quarter, and our team has done a great job of getting them up to speed and welcoming them to our Franklin family. Our culture is strong, and our team is getting stronger. My very humble and sincere thank you to our global Franklin electric team. Turning to our results on slide five. Consolidated sales for the quarter were $582 million, up over 9% year-over-year, with strong organic contribution. Importantly, pricing was positive as we continued to offset tariff impacts and manage impacts of inflation through disciplined pricing actions. Gross margins were up 20 basis points, and operating margins grew by 80 basis points, reflecting strong execution, cost control, and volume leverage. Looking at our business segments, water system sales increased 11 percent year-over-year, driven by price, volume, and acquisitions. Our ability to deliver both price and volume growth this quarter reinforces the strength of our competitive position and demonstrates that our pricing initiatives are holding up well in the market. Performance was solid across various regions, with strength in Europe, the U.S., and Canada. The U.S. and Canadian markets continue to perform well despite softer housing starts, underscoring our resiliency and ability to capture share even in a challenging environment. We're also encouraged by the results of several key product lines, with groundwater exhibiting momentum and water treatment continuing to gain share and grow organically throughout the year. In energy systems, sales were up nearly 15% year over year, reflecting strong growth in the US, Europe, and India. As we discussed last quarter, Q2 represents a seasonal peak for this business, and we expected a moderation in Q3 due to timing, product mix, and tariff impacts. Continued price realization efforts will take effect over the coming months, which should help offset the tariff pressure we saw in Q3 and preserve margins as we move into 2026. Order intake remains healthy, the backlog is up and we continue to see steady demand across the end markets. Our critical asset monitoring business continued to gain traction in the quarter due to deeper customer adoption and ongoing channel expansion. In distribution, sales were up 3.4% driven by both price and volume. This marks the strongest pricing performance we've seen in this business in more than two years and reflects the effectiveness of our self-help initiatives. Our channel inventory is down slightly year over year and healthy. This is mostly due to stronger performance in our supply chain and shortening of lead times through our value chain. From a macro standpoint, conditions remain variable and residential construction activity remains subdued, leading us to maintain our focus on discipline execution in this environment. We continue to perform well relative to the market, supported by strength in key product categories and solid channel relationships. Our wide portfolio and strong customer intimacy provide important earnings durability across evolving market conditions. With that, I'll turn the call back over to Jennifer to discuss the financial results in more detail.