Franklin Electric Co., Inc. (NASDAQ:FELE) Q4 2022 Results Conference Call February 14, 2023 9:00 AM ET

Company Participants

Jeff Taylor - Chief Financial Officer

Gregg Sengstack - Chairperson and Chief Executive Officer

Conference Call Participants

Mike Halloran - R.W. Baird

Matt Summerville - D.A. Davidson

Walter Liptak - Seaport Global

Operator

Good day. And welcome to the Franklin Electric Reports Fourth Quarter 2022 Sales and Earnings Conference Call. At this time, all participants are in a listen only mode. Please be advised that today’s conference is being recorded.

It is now my pleasure to introduce Chief Financial Officer, Jeff Taylor.

Jeff Taylor

Thank you, Andrew. And welcome, everyone, to Franklin Electric's fourth quarter and full year 2022 earnings conference call. On the call with me today is Gregg Sengstack, our Chairperson and Chief Executive Officer. On today's call, Gregg will review our fourth quarter and full year business highlights, fiscal 2023 guidance, progress to date on our long term strategy and our latest global secular trends. I will provide some additional detail on our financial performance. 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 the call are based on information currently available and except as required by law, the company assumes no obligation to update any forward-looking statements.

With that, I will now turn the call over to Gregg Sengstack.

Gregg Sengstack

Thank you, Jeff. We delivered a strong finish to 2022. All three reporting segments set fourth quarter sales records and both Water and Fueling systems set records for operating income over the same period. During the quarter, we delivered operating margin expansion in our Water and Fueling businesses, driven by customer demand, pricing sufficient to offset inflation and FX headwinds and a steady operational execution. We experienced solid end market demand throughout 2022, which continued through the fourth quarter, driving top line growth across each business. Our supply chain continued to recover with past due shipments down 50% from last summer's peak. At the same time, due to continued strong order flow, backlog increased to $260 million or up $10 million sequentially.