Franklin Electric Competitors, Revenue and Employees - Research Paper Example

 Franklin Electric Competitors, Revenue and Employees Company Name, key locations, and state of incorporation Franklin Electric Company., Inc is one of the top companies that specialize in producing water systems and are leading manufacturers of their products globally. The company’s main location is in Bluffton Indiana, which is also where they are incorporated. Principle Officers and stockholders: The Chairman and CEO of the company is R. Scott Trumbull. The Vice President and the company’s secretary is John J. Haines. The company has currently 2 SVP’s that direct different regions. Peter- Christian Maske III is the SVP of Europe while Robert J. Stone leads the Western Hemisphere water system. Other directors include Jerome D. Brady and Dave T. Brown. Brief overview: Franklin Electric Company is an old company that specializes in making electric motors, drivers, controls, and water fueling systems. The company distributes its products and services worldwide. The company has emerged as a leading manufacturer of electric motors used for pumps and other applications such as center pivot irrigation systems. Two companies that buy various Franklin Electric products are Pentair and ITT. The company’s is well-known since it offers its products in every continent. In addition, it’s a public traded company, and currently its stock price is up 0.9% according to nasdaq.com. Mission Statement We the people of Franklin Electric SA (Pty) Ltd are committed to sustaining profitable growth to the mutual benefit of stakeholders by continuously striving to: Impress and support our customers with superior products and services. Ensure that all our products and services are available on time all the time. Maintain open, frank and constructive relations with shareholders (internal and external) and achieve world class standards in all our business activities. Innovate and develop better products, services and technologies. Establish FESA globally as a prominent player in selected markets as a best value supplier. To encourage all employees to take ownership of their jobs through personal empowerment and inspired leadership. To diversify and integrate our employees in a fair and equitable manner. To cultivate a work environment and culture to enable our employees to achieve their full potential. Key products & services and important brand names, copyrights and patents  Without a doubt, the company has several key products such as water pump system, which is the best in the market as of now. In addition, it also offers services to install and troubleshoot if needed for their products. Currently, the company has copyrights and patents on its water fueling system designs and water drivers. Markets served (local, regional, national, and global)  Franklin Electric is a company that operates worldwide in regions such as: Asia, New Zealand, Australia, Brazil, Europe, Latin America, and South Africa. In addition, it operates domestically in United States, which generates half of the sales of the company. Market and competitive trends (key competitors)  The company’s key competitors include Danaher, ITT Corporation, and Pentair. The competition although is stiff, has not came up with any new products as it focuses on water heaters and electric heaters. Most of the competition does not branch to fueling systems as Franklin Electric does. Franklin Electric continues to have advantage due to its broad product line and its persistence to acquisitions. Thus, the competition is in disadvantage at this point. Important capabilities and competencies of the company  The company is very capable of producing high quality products and beating the competition. The problem lies on the unexpected demand of the market, which is very hard to predict. The company continues to grow globally while cutting down its administrative costs, which makes it somewhat attractive for angel investors. Interesting and informative ‘recent events’ regarding the company, its market or its employees  The company just recently hired a new vice president, who is also the secretary known as Peter Maske. In addition, the company has been keeping costs low to meet the break-even point. Furthermore, the quarterly report had just been released along with new training modules for employees. Company stock symbol(s) and exchange(s) on which company’s stock is traded. What is the stock price trend?  The company’s stock symbol is FELE and is publicly traded in NASDAQ and Dow Jones. The stock price trend is fairly stable as the stock price has been in the positive range for the majority of the month. Latest available dates of annual report, 10K and 10Q filings?  The latest available dates of 10Q were quite recent, November 8th while the annual report will be released at January 2, 2010 along with the 10K report. Is the company profitable – and what is the profit trend?  The company is profitable as it has acquired and merged with an Italian company called Vertical Inc. The profit trend however continues to be in a downward slope as of this week. However, recent trends show that much of the stock price was in the positives for the month. What are the company’s EPS and dividends paid per share? How much of the earnings are reinvested in the company?  The company’s EPS is currently $0.53 and around 10% was reinvested in the company’s research and development. What is the company’s cash flow – and where are they getting and using cash? Are the operations generating cash? Is the company investing for its future and growth?  Franklin generated cash flow from operations of $112.6 million in 2009, a 153% increase over the prior year. Much of the cash was generated by reducing the inventory by 21%. The operations are generating cash as much the products are. The company does not plan to invest a lot since the main goal is to cut down on costs by cutting 9% of the salaries overall along with reducing costs to meet break-even point. What is the company’s debt and equity structure? Are they highly leveraged? What is their debt/equity ratio?  Debt and equity structure of the company is around 6%, which is faily decent. Yes, the company is highly leveraged. The company’s net debt-to-equity ratio declined to 17% from 40% at year end 2008. Is the company liquid, can it comfortably pay its current liabilities? What are their current and quick ratios?  The company is trying to protect its liquidity, its not in a great position as the chairman insists, "It is clear that given weak and uncertain market conditions, our emphasis in 2009 is on protecting our liquidity and reducing our costs. Our most important opportunity for liquidity improvement is increasing inventory turns. Their quick ratio is 1.08, currently which is around the median in the industry as of now. Is the company managing its asset turnover (A/R & inventory) well? What is the turnover and trends? Comparisons?  Well, the company did reduce its inventory down to 21%, which is fairly decent. The inventory turnover ratio is 3.26 and asset turnover ratio is 0.87. in essence, the company is striving to keep the inventory costs down and soon will. Does the company have any significant intangible assets? What are they and where did they come from?  Yes the company does have intangible assets, 90,300 worth of it. They came from cash receivables, and mainly from inventories. Does the company provide business segment data? If so, is any one segment significantly more or less profitable than the others?  No the company does not provide specific segment data. Most of the revenue is generated from water pump systems, and the acquisitions made. What is the basis for the company’s accounting? Is it GAAP? If not, what is it? Have there been any changes in the way that GAAP is applied?  The company surprisingly does not follow GAAP, it just follows the FASB. No, specific changes in the way that GAAP is applied. Are there any major items identified in the footnotes that are NOT included in the financial statements? What are they?  Who is the company’s auditor? What was their audit opinion? Were there any exceptional audit items noted?  Deloitte and Touché is the auditing company. The auditor’s opinion is that the net assets are available for benefits for the year end. No, exceptional audit items were noted by the auditor. Based on the above, would your team view an investment in this company’s stock as ‘conservative’ or ‘risky’ ? Has the stock price fluctuated significantly – or is it fairly stable?  I think an investment in this company’s stock as pretty “conservative” since the stock prices have been fairly well. The annual reports indicate a strong surge in sales compared to competition, which is beneficial for investors. The company’s decision to cut salaries also indicates that the company is focus on reducing costs and enhancing profits. Would your team invest in this company? Why or why not? After carefully analyzing, our team will invest in this company because it continues to have significant dominance in its market. In addition, it is located globally, which enhances and preserves its reputation. Market data Current Information Last Close 19-Nov-2010 $38.41 Price/ Sales Ratio 1.32 52-Week High $38.49 Price/ Book Ratio 2.15 52-Week Low $24.93 Price/ Earnings Ratio 23.58 60-Month Beta 0.9 Price/ Cash Flow Ratio 9.62 Market Cap (mil.) $891.5 Return on Assets 5.1% Shares Outstanding (mil.) 23.2 Return on Equity 9.5% Dividend Rate 0.52 Current Ratio 3.75 Dividend Yield 1.35% Long-Term Debt/Equity 0.39 # of Institutional Holders 148 % Owned by Institutions 72.2% Latest Short Interest Ratio 5.05 Latest Net Insider Transactions -- Growth Rates 12 Month 36 Month 60 Month Revenue Growth (16.0%) 3.9% 9.1% EPS Growth (41.1%) (22.8%) (7.5%) Dividend Growth 1.0% 5.2% 10.0% PROFITABILITY Gross Profit Margin 30.01% chart Operating Margin 7.67% chart EBITDA Margin 11.73% chart Profit Margin 4.15% chart MANAGEMENT EFFECTIVENESS Return on Assets 3.62% chart Return on Equity 6.69% chart Return on Invested Capital 6.53% chart FINANCIAL STRENGTH Quick Ratio 1.04 chart Current Ratio 3.75 chart Debt/Equity 0.83 chart Debt/Assets 0.45 chart GROWTH RATES Earnings per Share Growth -41.15% chart Sales Growth -16.05% chart Dividend Growth 4.58% chart OPERATING EFFICIENCY Inventory Turnover Ratio 3.26 chart Asset Turnover Ratio 0.87 chart Receivables Turnover -- DIVIDEND Payout Ratio 0.46 chart MLA “Franklin Electric.” (2010). Retrieved November 15, 2010. “Franklin Electric Acquires Italian Company Vertical.” (2010). Retrieved November 16, 2010. “Franklin Electric Company.” (2010). Retrieved November 15, 2010 Hoover's Online. Franklin Electric Inc: Products and Operations. Retrieved November 16, 2007 from Hoover's Online. Read More