FELEMEDIUM SIGNALFINANCIAL10-K

Franklin Electric completed the Barnes de Colombia acquisition while experiencing a notable decline in cash position alongside substantially higher interest expense.

The company has been actively executing its acquisition strategy, having completed the Barnes de Colombia deal that was previously announced, which explains both the cash decline and higher borrowing costs. The modest operating income growth despite higher interest expense suggests the underlying business remains healthy, though investors should monitor whether the acquisition integration proceeds smoothly.

Comparing 2026-02-20 vs 2025-02-21View on EDGAR →
FINANCIAL ANALYSIS

Franklin Electric's financial position reflects recent acquisition activity, with cash declining significantly to $99.7M while interest expense grew substantially to $10.6M, indicating increased borrowing to fund deals. Despite the higher financing costs, operating income grew modestly to $269.0M, though this was offset by the increased interest burden, resulting in net income declining to $147.1M. The company reduced current liabilities while building inventory, suggesting operational adjustments as it integrates new acquisitions.

FINANCIAL STATEMENT CHANGES
Interest Expense
P&L
+68.4%
$6.3M$10.6M

Interest expense surged 68.4% — significant debt increase or rising rates materially impacting earnings.

Cash & Equivalents
Balance Sheet
-54.8%
$220.5M$99.7M

Cash declined 54.8% — significant cash burn or deployment; verify adequacy of remaining liquidity runway.

Current Liabilities
Balance Sheet
-20.7%
$433.7M$344.0M

Current liabilities reduced — improved short-term financial position and working capital health.

Net Income
P&L
-18.4%
$180.3M$147.1M

Net income declined 18.4% — review whether driven by operations, interest costs, or non-recurring items.

Inventory
Balance Sheet
+14.3%
$483.9M$553.0M

Inventory built 14.3% — monitor whether demand supports this build or if write-downs may follow.

Operating Income
P&L
+10.4%
$243.6M$269.0M

Operating income improving — cost discipline or growing revenue base absorbing fixed costs.

LANGUAGE CHANGES
NEW — 2026-02-20
PRIOR — 2025-02-21
ADDED
Management's Discussion and Analysis of Financial Condition and Results of Operations 16 Item 7A.
In 2023, the Company acquired substantially all of the assets of Action Manufacturing Supply, Inc.
("PumpEng"), a manufacturer of submersible pumps for the mining sector headquartered in Australia and Barnes de Colombia S.A.
Major Customers No single customer accounted for over 10 percent of net sales in 2025, 2024, or 2023.
Backlog The dollar amount of backlog by segment was as follows: (In millions) February 4, 2026 February 5, 2025 Water Systems $ 99.0 $ 98.4 Energy Systems 21.0 21.5 Distribution 19.1 20.8 Consolidated $ 139.1 $ 140.7 The backlog is composed of written orders for products for which prices are typically established at the time the order is placed, primarily standard catalog items.
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REMOVED
Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Item 7A.
In the three years ended December 31, 2024, the Company only completed one significant acquisition in the segment when it acquired substantially all of the assets of Action Manufacturing Supply, Inc.
("PumpEng"), a manufacturer of submersible pumps for the mining sector headquartered in Australia.
Also in February 2025, the Company signed a definitive agreement to acquire Barnes de Colombia S.A.
In 2023, the Distribution segment acquired substantially all of the assets of LCA Pump, LLC, which operated Water Works Pump, a professional groundwater distributor operating in the Midwest.
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