 FORT WAYNE, Ind., July 28, 2020 GLOBE NEWSWIRE -- Franklin Electric Co., Inc. NASDAQ: FELE reported second quarter 2020 GAAP fully diluted earnings per share EPS of 0.52, versus a GAAP fully diluted EPS in the second quarter 2019 of 0.70. Second quarter 2020 sales were 308.3 million, compared to 2019 second quarter sales of 355.3 million. Second quarter EPS before the impact of restructuring expenses was 0.54 compared to 2019 second quarter EPS before restructuring of 0.70 see table below for a reconciliation of GAAP EPS to EPS before restructuring. Gregg Sengstack, Franklin Electrics Chairman and Chief Executive Officer, commented:Although our second quarter results were impacted negatively by the effects of the Global Pandemic, they exceeded our revised expectations. Our Water and Distribution businesses both turned in solid results given the environment we were operating in and demonstrate the less cyclical nature of both segments. Versus the 2019 second quarter, Distribution revenues grew by 6 percent and earnings grew by over 40 percent. Water Systems revenues were down in total by 13 percent, but earnings were only down 4 percent versus last year, in part due to cost reductions we have implemented. Excluding the U.S., South Africa and India, the Water Systems team posted 9 percent organic growth during the quarter. The Water and Distribution segments both demonstrated sequential improvements as we progressed through the second quarter. The Fueling Systems segment was negatively impacted by a reduction in the global demand for new filling stations. Our year to date free cash flow as a percent of net income was 106 percent compared to a negative 13 percent at the end of the second quarter 2019 and our liquidity and balance sheet positions remain very strong.Key Performance Indicators: For the Second Quarter Earnings Before and After Restructuring20202019Change in millions Net Income attributable to FE Co., Inc. Reported 24.7 32.7 -24 Allocated Earnings0.20.2 Earnings for EPS Calculations 24.5 32.5 -25 Restructuring before tax:0.9 0.2 Restructuring, net of tax:0.7 0.2 Earnings before Restructuring 25.2 32.7 -23 For the Second Quarter Earnings Per Share20202019Change Before and After Restructuring in millions except Earnings Per Share Average Fully Diluted Shares Outstanding 46.5 46.7 0 Fully Diluted Earnings Per Share EPS Reported 0.52 0.70 -26 Restructuring Per Share, net of tax0.02 - Fully Diluted EPS before Restructuring 0.54 0.70 -23 Net Sales United StatesLatinEurope, MiddleAsiaTotal in millions CanadaAmericaEast AfricaPacificWaterFuelingDistributionOtherElimsConsolidated Q2 2019117.9 29.4 39.0 18.7 205.0 78.0 87.1 14.8355.3 Q2 202099.0 24.2 35.5 19.7 178.4 56.0 92.1 18.2308.3 Change18.95.23.51.0 26.622.05.0 3.447.0 Change -16 -18 -9 5 -13 -28 6 -13 Foreign currency translation0.87.23.10.511.60.60.0 Change -1 -24 -8 -3 -6 -1 0 Acquisitions3.3 0.0 0.0 0.0 3.3 0.0 0.0 VolumePrice21.42.0 0.41.5 18.321.45.0 Change -18 7 -1 8 -9 -27 6 Operating Income and Margins in millionsFor the Second Quarter 2020 WaterFuelingDistributionOtherElimsConsolidated Operating Income Loss28.7 13.5 6.8 15.133.9 Operating Income To Net Sales 16.1 24.1 7.4 11.0 Restructuring0.9 - - - 0.9 Operating IncomeLoss before Restructuring29.6 13.5 6.8 15.134.8 Operating Income to Net Sales Before Restructuring 16.6 24.1 7.4 11.3 Operating Income and Margins in millionsFor the Second Quarter 2019 WaterFuelingDistributionOtherElimsConsolidated Operating Income Loss30.9 21.7 4.5 13.443.7 Operating Income To Net Sales 15.1 27.8 5.2 12.3 Restructuring- - 0.2 0.2 Operating IncomeLoss before Restructuring30.9 21.7 4.7 13.443.9 Operating Income to Net Sales Before Restructuring 15.1 27.8 5.4 12.4 Water SystemsWater Systems sales in the U.S. and Canada decreased by 16 percent overall compared to the second quarter 2019, primarily due to lower sales of dewatering equipment. Sales of dewatering equipment decreased by nearly 70 percent due to lower sales in rental channels and substantial uncertainty in oil production end markets. Sales of groundwater pumping equipment increased by 5 percent versus the second quarter 2019. Sales of surface pumping equipment decreased by 18 percent on lower sales of both wastewater and water transfer systems as customers in this channel began to feel the impact of the Global Pandemic and lowered their own inventory levels.Water Systems sales in markets outside the U.S. and Canada decreased by 9 percent overall. Foreign currency translation decreased sales by 12 percent. Outside the U.S. and Canada, Water Systems organic sales increased by 3 percent, primarily driven by higher sales in Latin America and Asia Pacific, as well as increased sales in both Europe and the Middle East, offset by lower sales in the Africa markets. Water Systems operating income was 28.7 million in the second quarter 2020, compared to 30.9 million in the second quarter 2019 primarily driven by lower revenues.Fueling SystemsFueling Systems sales in the U.S. and Canada decreased by 22 percent compared to the second quarter 2019. The decrease was in all product lines and due to declining demand for new filling stations. Outside the U.S. and Canada, Fueling Systems revenues declined by 35 percent, driven by lower sales in Asia Pacific, primarily China.Fueling Systems operating income was 13.5 million in the second quarter of 2020, compared to 21.7 million in the second quarter of 2019 driven almost entirely by lower revenues. DistributionDistribution sales were a record at 92.1 million in the second quarter 2020, versus second quarter 2019 sales of 87.1 million. The Distribution segment organic sales increased 6 percent compared to the second quarter of 2019. More favorable weather conditions versus the second quarter last year contributed to the revenue growth.The Distribution segment operating income was 6.8 million in the second quarter of 2020, compared to 4.5 million in the second quarter of 2019, primarily due to higher revenues. OverallThe Companys consolidated gross profit was 107.1 million for the second quarter of 2020, a decrease from the second quarter of 2019 gross profit of 119.7 million. The gross profit as a percentage of net sales was 34.7 percent in the second quarter of 2020 versus 33.7 percent in the second quarter of 2019 and improved primarily due to better price realization and product sales mix.Selling, general, and administrative SGA expenses were 72.3 million in the second quarter of 2020 compared to 75.8 million in the second quarter of 2019. SGA expenses were lower versus the prior year due to companywide efforts to lower spending in response to the impacts of the Global Pandemic and in part because of foreign currency translation.LiquidityThe Company ended the second quarter of 2020 with a cash balance of 43.1 million and generated 37.6 million of free cash flow from operations during the first six months of 2020, versus a negative free cash flow in the first six months of 2019 of 5.4 million and had total incremental borrowing capacity of 480 million at June 30, 2020. Free Cash Flow is Net Cash Flows from Operating Activities, less net additions to property, plant, and equipment.Effects of the Global PandemicThe top priority of the Company is the health and welfare of its employees and partners around the world. In response to the health risks posed by the Global Pandemic, the Company implemented and has been following the recommended hygiene and social distancing practices promulgated by the United States Centers for Disease Control and the World Health Organization.The Companys products and services are generally viewed as essential in most jurisdictions in which the Company operates. Effectively, all the Companys global manufacturing and distribution operations are operating.The primary impacts of the Global Pandemic on the Companys end markets continue to be a reduction of large dewatering equipment sales in the Water Systems segment; Water Systems customers de-stocking their inventory, particularly in the U.S. and Canada plumbing channel; and, the deferral or cancellation of the construction of new filling stations in the Fueling Systems segment. Additionally, the strengthening of the U.S. dollar versus most international currencies has resulted in lower translations of both Net Sales and earnings from many of the Companys businesses outside the U.S. The Companys financial results were also impacted negatively by government mandated closures and related customer behaviors.Commenting on the outlook for 2020 and the effects of the Global Pandemic, Mr. Sengstack said:Our Water Systems and Distribution businesses are building momentum heading into the back half of this year, despite the ongoing impacts and uncertainty from the Global Pandemic. Our Fueling business will take longer to recover from the steep declines we experienced in the second quarter, but we believe that the third and fourth quarters revenue declines versus 2019 results will be sequentially reduced. Assuming there are no new government mandated restrictions in our key end markets, we estimate our full year 2020 earnings per share before restructuring charges will be between 1.75 to 1. 