Franklin Electric Co., Inc. (NASDAQ:FELE) Q4 2023 Earnings Conference Call February 13, 2024 9:00 AM ET
Company Participants
Sandy Statzer - VP of IR
Gregg Sengstack - Chairperson and CEO
Jeff Taylor - CFO
Conference Call Participants
Matt Summerville - D.A. Davidson
Bryan Blair - Oppenheimer
Ryan Connors - Northcoast Research Partners
Walter Liptak - Seaport Research
Operator
Hello, and welcome to the Franklin Electric Reports Fourth Quarter 2023 and Full Year 2023 Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.
It is now my pleasure to introduce Vice President of Finance and Investor Relations, Sandy Statzer.
Sandy Statzer
Thank you, Andrew, and welcome, everyone, to Franklin Electric's fourth quarter and full year 2023 earnings call.
With me today is Gregg Sengstack, our Chairperson and Chief Executive Officer; and Jeff Taylor, our Chief Financial Officer. On today's call, Gregg will review our fourth quarter and full year 2023 business results, along with guidance for 2024. Jeff will provide 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 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.
In addition, on today's call, non-GAAP financial measures will be used to help investors understand Franklin Electric's ongoing business performance. A reconciliation of the non-GAAP financial measures being discussed today to the comparable GAAP financial measures is included in the Company investor presentation, which is available on our website.
With that, I will now turn the call over to Gregg.
Gregg Sengstack
Thank you, Sandy, and thank you all for joining us.
We delivered a solid quarter and finished 2023. From Q3 to Q4, sequentially, we experienced more of the same market conditions with wetter weather and customer destocking continuing in the U.S. and to a lesser degree, Europe, and we experienced continued commodity pricing pressure in our Distribution business.
Overall, reported sales were down $16 million or 3%, mainly driven by lower volume in Fueling Systems and a $13 million negative impact from foreign exchange, partially offset by favorable pricing. Even with soft demand, we delivered solid operating margins in water and fueling for the quarter. Our manufacturing margins remained healthy throughout 2023, driven by continued cost controls.