FRANKLIN ELECTRIC CO INC has recently released its 10-Q report for the quarter ended June 30, 2026. Franklin Electric Co., Inc. designs, manufactures, and distributes water and fuel pumping systems across North America, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. Its operations are organized into Water Systems, Energy Systems, and Distribution, with products sold through wholesale and retail distributors, specialty distributors, industrial and petroleum equipment distributors, oil and utility companies, and original equipment manufacturers.
Management said two acquisitions closed during the quarter: Benson Pump Corporation in April and Wood Brothers Industries in May. Benson Pump, a groundwater distributor in Arkansas, was added to the Distribution segment, while Wood Brothers Industries, a water treatment wholesale supplier in Nebraska, was added to Water Systems. Together, the acquisitions contributed about $15.0 million of incremental net sales in the second quarter.
The company said tariff effects remain uncertain, citing duties on imports from Canada, Mexico, China, and other countries as a factor that could affect results. In the second quarter, Franklin Electric reported net sales of $622.9 million, up 6% from $587.4 million a year earlier, while six-month net sales rose 8% to $1.123 billion from $1.043 billion. The company attributed the gains to acquisitions, higher volume and price realization, and foreign currency translation.
Gross profit in the quarter rose to $230.6 million from $211.8 million, with gross margin improving to 37.0% from 36.1%. For the first six months, gross profit increased to $405.6 million from $375.7 million, while margin edged up to 36.1% from 36.0%. SG&A expense increased to $132.1 million from $123.5 million in the quarter and to $255.1 million from $243.2 million year to date, reflecting acquisition-related costs.
Water Systems posted second-quarter sales of $358.5 million, up 5% from $340.8 million, and six-month sales of $676.6 million, up 8% from $628.1 million. In the U.S. and Canada, second-quarter Water Systems sales rose 8%, led by groundwater pumping equipment up 12%, water treatment products up 14%, and other surface pumping equipment up 7%, while large dewatering equipment fell 10%. Outside the U.S. and Canada, Water Systems sales rose 1% in the quarter and 8% year to date.
Energy Systems sales increased to $80.2 million in the quarter from $77.5 million and to $151.9 million from $144.3 million for the first six months. The company said the increase came from higher volume and price realization, with U.S. and Canada sales up 1% in the quarter and 2% year to date, and sales outside the U.S. and Canada up 12% and 18%, respectively. Distribution sales climbed to $221.1 million from $200.0 million in the quarter and to $372.0 million from $341.9 million for the six months, helped by higher volume, price realization, and acquisitions.
Operating income rose to $93.6 million in the quarter from $88.1 million and to $141.7 million from $132.2 million for the six months. Water Systems operating income increased to $65.2 million from $61.8 million in the quarter, Energy Systems operating income fell to $27.9 million from $29.1 million, and Distribution operating income increased to $19.7 million from $16.1 million. The Energy Systems margin was pressured by a $4.5 million legal settlement recorded in the quarter.
Interest expense increased to $3.5 million from $2.8 million in the quarter and to $5.8 million from $4.6 million for the six months, reflecting higher average debt. Foreign exchange losses were $2.5 million in the quarter and $2.1 million year to date, compared with $4.5 million and $5.8 million in the prior-year periods, mainly tied to the Argentine peso and Turkish lira. Net income rose to $66.1 million in the quarter from $60.6 million and to $100.8 million from $91.9 million for the first six months. The market has reacted to these announcements by moving the company's shares -4.19% to a price of $105.11. For the full picture, make sure to review FRANKLIN ELECTRIC CO INC's 10-Q report.
