Franklin Electric Co., Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, revealing a decline in net sales and net income compared to the same periods in 2023. Net sales for Q3 2024 were $531.4 million, a decrease of 1% from $538.4 million in Q3 2023. For the nine months, net sales totaled $1.5 billion, down 4% from $1.592 billion in the prior year.
Despite the drop in sales, the company experienced an increase in gross profit, which rose to $189.7 million in Q3 2024 from $186.3 million in Q3 2023, and for the nine months, gross profit increased to $553.0 million from $537.0 million. This resulted in improved gross profit margins, with Q3 2024 margins at 35.7% compared to 34.6% in Q3 2023, and nine-month margins at 36.0%, up from 33.7%.
Operating income for Q3 2024 decreased by 6% to $73.5 million, down from $78.1 million in Q3 2023. For the nine months, operating income fell 5% to $200.6 million from $211.6 million. The decline in operating income was attributed to increased selling, general, and administrative (SG&A) expenses, which rose to $116.0 million in Q3 2024 from $107.7 million in Q3 2023, and to $352.3 million for the nine months, up from $324.7 million.
Net income for Q3 2024 was $54.9 million, down from $58.2 million in Q3 2023, while net income for the nine months decreased to $147.3 million from $155.9 million. The effective tax rate increased to 23.6% for Q3 2024 and 22.9% for the nine months, compared to 20.2% and 20.1% in the respective prior-year periods, primarily due to less favorable discrete events and changes in foreign earnings taxation.
Strategically, Franklin Electric made several acquisitions in late 2023 and early 2024, including assets from Aqua Systems and Action Manufacturing for a total of $36 million. The company also amended its credit agreements, increasing available facilities to $250 million, with no outstanding borrowings as of September 30, 2024.
Cash and cash equivalents increased to $106.3 million from $85.0 million at the end of 2023, while total assets rose to $1.807 billion from $1.728 billion. The company repurchased 91,973 shares for approximately $8.7 million during Q3 2024, with an additional share repurchase plan approved in October 2024.
About FRANKLIN ELECTRIC CO INC
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