Franklin Electric Co., Inc. (NASDAQ:FELE) Q3 2023 Earnings Conference Call October 24, 2023 9:00 AM ET

Company Participants

Sandy Statzer - Vice President of Investor Relations

Gregg Sengstack - Chairperson and Chief Executive Officer

Jeff Taylor - Vice President and Chief Financial Officer

Conference Call Participants

Matt Summerville - D.A. Davidson

Operator

Good day, and welcome to the Franklin Electric Reports Third Quarter 2023 Sales and Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to Vice President of Investor Relations, Sandy Statzer. Please go ahead.

Sandy Statzer

Thank you, Abigail, and welcome everyone to Franklin Electric's third quarter 2023 earnings conference call.

With me today is Gregg Sengstack, our Chairperson and Chief Executive Officer; and Jeff Taylor, our Vice President and Chief Financial Officer. On today's call, Gregg will review our third quarter business highlights, then Jeff will provide an overview of 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 will 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 this 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.

Gregg Sengstack

Thank you, Sandy.

The third quarter, which is seasonally one of our strongest periods, was a solid quarter, but more challenging than we had anticipated with the results reflecting additional commodity price pressure in our distribution business and further destocking impacting demand during the quarter.

Our Fueling business was most impacted by destocking as well as by marketers delaying new station build projects. Conversely, with our product line breadth and geographic reach, our Water Systems business set third quarter records for sales and operating income, with continued strength in large dewatering systems more than offsetting product lines impacted by inventory rightsizing and destocking.