Franklin Electric Co., Inc. · NASDAQ:FELE

Franklin Electric — Investor Presentation (September 2009)

24 slides from Franklin Electric's investor presentation, Sep 24, 2009

  1. Slide 1: Investor Discussions

    Investor Discussions September, 2009

  2. Slide 2: Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

    “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein, including those relating to market conditions or the Company's financial results, expense reductions, liquidity expectations, business goals and sales growth, involve

  3. Slide 3: Topics

    Topics Financials; Page – History 5 – 2Q and YTD Results 6 – Response to global recession 8 – Outlook 12 Strategy; – Water 15 – Fueling 18 3

  4. Slide 4: Corporate Overview

    Corporate Overview • Leading global manufacturer/supplier of complete water pumping and fueling systems – First water-lubricated, reliable submersible motor for water systems – First submersible motor for fueling systems • Founded in 1944 • NASDAQ: FELE (23mm shares outstanding) • YE 2008: Sales - $

  5. Slide 5: Financial History

    Financial History (a) 5 (a) Before the impact of one time restructuring charges.

  6. Slide 6: 2nd Quarter and YTD 2009 Financial Summary

    2nd Quarter and YTD 2009 Financial Summary 2nd Qtr. 2009 Change vs. 2008 Sales $165.3 M - 18% EPS $0.36 -45% (before Restructuring Expense) YTD June 2009 Change vs. 2008 Sales $315.1 M - 17% EPS $0.56 - 45% (before Restructuring Expense) 6

  7. Slide 7: Sales Bridge

    Sales Bridge 1H 2008 vs. 1H 2009 $377.7 mil ($22.3 mil) ($31.9 mil) $8.2 mil $315.1 mil Foreign ($16.6 mil) Exchange US/Canada International Water Fueling Water Sales ($) • Housing starts & customer inventory reductions • Partially offset by Franklin share growth 1st Half 1st Half 2008 2009 7

  8. Slide 8: Response to Global Recession

    Response to Global Recession 1. Cost reductions 2. Improving water margins 3. Generating cash 8

  9. Slide 9: Costs Reductions

    Costs Reductions 2009 Full Year Cost 1st Half of 2009 Cost Reduction vs. 20082 Reduction vs. 2008 Direct Labor & Material -$9 M to -$13 M -$4.2 M SG&A Spending1 -$7 M -$5.5 M Fixed Manufacturing Spending1 -$7 M -$2.9 M Total -$23 M to -$27 M -$12.6 M Ongoing SG&A and Fixed Manufacturing Cost Reducti

  10. Slide 10: Improve Water operating margins

    Improve Water operating margins (a) 18.0% 16.0% 14.0% 12.0% 10.0% 2008 8.0% 2009 6.0% 4.0% 2.0% 0.0% 1Q 2Q 3Q 4Q Water Systems margins should exceed 2008 in both 3Q and 4Q 10 (a) Before the impact of restructuring charges.

  11. Slide 11: Generating Cash

    Generating Cash Cash Generated From Operations – 1H Inventory Balances – June to June $40.0 $180.0 $39.0 $175.0 $178.6 $30.0 $170.0 $20.0 $165.0 $10.0 $160.0 $155.0 $0.0 $154.3 $150.0 ($10.0) $145.0 $(18.6) $140.0 ($20.0) 2008 2009 2008 2009 Capital Expenditures – 1H Revolver Debt Outstanding – June

  12. Slide 12: Outlook

    Outlook (a) Water • 3Q sales down but at a lower rate than in the 2Q • 4Q sales in line with 2008 • Margins should exceed 2008 in both 3Q and 4Q Fueling • Significant decline in sales and margins in the 3Q • 4Q sales and margins depend on California enforcement of January 1, 2010 deadline for vapor

  13. Slide 13: Strategic Focus

    Strategic Focus Residential, Agricultural & Commercial Water Systems Petroleum Equipment $5.2 B global market potential* $1.2 B global market potential* • Brand equity • Leadership position • Growing globally • Fragmented customer base • Fragmented supply base * Current Franklin management estimates

  14. Slide 14: Product/Market Sales Mix

    Product/Market Sales Mix 2008 Sales - $745.6 mil Fueling US Water Systems Systems 25% 33% International Water Systems 42% 14

  15. Slide 15: Water Systems

    Water Systems Product Line Extensions and Geographic Expansion 1950s 1980s 2005 2006 Today Franklin Submersible Sub Motors, Controls Sub Motors, Controls, Sub Motors, Controls, Drives, Ongoing Product Line Motor and Drives Drives and Clean water and Extension and Global Clean water Pumps Wastewater

  16. Slide 16: Water Systems Growth Initiative

    Water Systems Growth Initiative Product Line Extensions and Geographic Expansion Existing Products Product Line Extensions Existing Geographic Markets Existing Geographic Markets • Work with distributors who carry • Differentiated Products Franklin submersible motor • Constant Pressure Systems produ

  17. Slide 17: Water Systems: International Sales Growth

    Water Systems International Sales Growth 17

  18. Slide 18: Fueling Systems

    Fueling Systems Product Line Extensions and Geographic Expansion 1960s 1980s 1990s 2000s Today Franklin Explosion-Proof FEPetro Pumps FEPetro Pumps Adjacent Products Ongoing Product Line Submersible Motor and Drives Extension and Geographic Expansion Franklin $0.5 M $1 M $21 M $92 M $189 M Fueling (

  19. Slide 19: Fueling Systems Growth Initiative

    Fueling Systems Growth Initiative Product Line Extensions and Geographic Expansion Existing Products Product Line Extensions Existing Geographic Markets Existing Geographic Markets • Replacement Business • European Community Vapor • Pressure Systems for Europe Recovery Mandate (2018) • Entry Level T

  20. Slide 20: Appendix

    la Franklin Electric © © ve) . . t \ App endix «

  21. Slide 21: Earnings and Earnings Per Share Before and After Restructuring Expense

    Earnings and Earnings Per Share Before and After Restructuring Expense (in Million US $ except Earnings Per Share) For the Second Quarter 2008 2009 Change Net Income Attributable to FE Co., Inc. $15.3 $5.8 -62% Restructuring Expense (Before Tax) - $3.8 Average Fully Diluted Shares Outstanding 23.174

  22. Slide 22: EBITDA Reconciliation to Net Income (Unaudited)

    EBITDA Reconciliation to Net Income (Unaudited) (in Million US $) For LTM Ended 2nd Quarter 2008 2009 Net Income (as reported) $40.6 $30.4 Depreciation and Amortization $22.7 $24.5 Interest Expense, Net $10.1 $10.4 Provision for Income Taxes $21.5 $15.2 Estimated EBITDA for Acquisitions (a) $2.9 $2.

  23. Slide 23: Operating Income Before and After Restructuring Expense

    Operating Income Before and After Restructuring Expense (in Million US $ except Earnings Per Share) 2nd Quarter 2008 2009 Change Operating Income Attributable to FE Co., Inc. $26.4 $10.8 -59% Restructuring Expense (Before Tax) $3.8 Operating Income Before Restructuring Expense $26.4 $14.6 -45% 1st H

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Franklin Electric — Investor Presentation (September 2009) on 6ix