Franklin Electric Co., Inc.
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ITEM 1. BUSINESS
Description of the Business
Franklin Electric Co., Inc. (“Franklin Electric” or the “Company”) is an Indiana corporation founded in 1944 and incorporated in 1946. Named after America’s pioneer electrical engineer, Benjamin Franklin, Franklin Electric manufactured the first water-lubricated submersible motor for water systems and the first submersible motor for fueling systems. With 2025 revenue of approximately $2.1 billion, the Company designs, manufactures and distributes water and fuel pumping systems, composed primarily of submersible motors, pumps, electronic controls, water treatment systems, and related parts and equipment.
The Company’s water pumping systems move fresh and wastewater for the residential, agricultural and other industrial end markets. The Company also sells various groundwater equipment products to well installation contractors, including water pumping systems, through its and third-party distribution branches located in the U.S. With a growing global footprint, the Company has also evolved into a top supplier of submersible fueling systems at gas stations, making pumps, pipes, electronic controls and monitoring devices.
The Company’s products are sold worldwide by its employee sales force and independent manufacturing representatives. The Company offers normal and customary trade terms to its customers, no significant part of which is of an extended nature. Special inventory requirements are not necessary, and customer merchandise return rights do not extend beyond normal warranty provisions.
Franklin Electric’s Key Factors for Success
While maintaining a culture of safety and lean principles, Franklin Electric strives to deliver quality, availability, service, innovation, and cost in every encounter the Company has with stakeholders, including direct or indirect customers, employees, shareholders, and suppliers. These key factors for success are a roadmap for the Company's growth as a global provider of water and energy systems, through geographic expansion and product line extensions, leveraging its global platform and competency in system design, all while consistently offering the best value to its customer.
Markets and Applications
The Company’s business consists of three reportable segments based on the principal end market served: Water Systems, Energy Systems, and Distribution. The Company changed the name of the Fueling Systems segment to Energy Systems to reflect its diverse portfolio and growth strategy, as well as to better reflect the markets and customers served by the segment. The Company does not allocate corporate expenses or intersegment eliminations to a reportable segment. Segment and geographic information appears in Note 15 - Segment and Geographic Information to the consolidated financial statements.
The market for the Company’s products is highly competitive and includes diversified accounts by size and type. The Company’s Water Systems and Energy Systems products and related equipment are sold to specialty distributors and some original equipment manufacturers (“OEMs”), as well as industrial and petroleum equipment distributors and major oil and utility companies. The Company’s Distribution segment sells products primarily to water well contractors.
Water Systems Segment
Water Systems is a global leader in the production and marketing of water pumping systems and is a technical leader in submersible motors, pumps, drives, electronic controls, water treatment systems, and monitoring devices. The Water Systems segment designs, manufactures and sells motors, pumps, drives, electronic controls, monitoring devices, and related parts and equipment primarily for use in groundwater, water transfer and wastewater.
Water Systems motors, pumps and controls are used principally for pumping clean water and wastewater in a variety of residential, agricultural, municipal and industrial applications. Water Systems also manufactures electronic drives and controls for the motors which control functionality and provide protection from various hazards, such as electrical surges, over-heating and dry wells or dry tanks. In 2023, the Company acquired substantially all of the assets of Action Manufacturing & Supply, Inc. expanding its portfolio in water treatment systems. In 2025, the Company acquired PumpEng Pty Ltd. ("PumpEng"), a manufacturer of submersible pumps for the mining sector headquartered in Australia and Barnes de Colombia S.A. ("Barnes"), a leading manufacturer and distributor of industrial and commercial pumps based in Colombia.
Water Systems products are sold in highly competitive markets. Water Systems contributed about 60 percent of the Company’s total revenue in 2025. Significant portions of segment revenue come from selling groundwater and surface pumps, motors, and controls for residential and commercial buildings, as well as agricultural sales which are more seasonal and subject to commodity price changes. The Water Systems segment generates approximately 25 to 30 percent of its revenue in developing
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markets, which often lack municipal water systems. As those countries install water systems and further develop with an expanding middle class or improving quality of living, the Company views those markets as an opportunity. The Company has had 6 to 9 percent compounded annual sales growth in developing regions in recent years. Water Systems competes in each of its targeted markets based on product design, quality, performance, availability and price. The Company’s principal competitors in the specialty water products industry are Grundfos Management A/S, Pentair, Inc. and Xylem, Inc.
2025 Water Systems research and development expenditures were primarily related to the following activities:
•Development of new integrated pressure boosting systems for residential and commercial applications
•Electronic variable frequency drives and controls for pump applications, including enhancements to include remote communication and IOT capability for our drives and making our key platforms easier to utilize by our customers
•Dewatering pumping equipment, including the expansion of our electrical submersible pump lines with addition of range, materials, and control packages for the global market
•Vertical pumping systems for residential applications including integrated designs of pump, motor, and controls
•Submersible pumps for commercial, municipal, and agricultural applications including the development of global standardization of updated cast iron and stainless steel submersible turbine hydraulics, and upgrading the performance of line shaft turbine product offering
Energy Systems Segment
Energy Systems is a global leader in the production and marketing of fuel pumping systems, fuel containment systems and monitoring and control systems. The Energy Systems segment designs, manufactures and sells pumps, motors, pipe, sumps, fittings, vapor recovery components, electronic controls, monitoring devices and related parts and equipment primarily for use in energy system applications.
Energy Systems offers a complete array of components between the tank and the dispenser, including submersible pumps, motors, station hardware, piping, sumps, vapor recovery, corrosion control systems and electronic controls and monitoring. The Energy Systems segment growth has been sustained by a commitment to protecting human health and the environment while delivering the lowest total cost of ownership. Energy Systems takes steps to ensure its products are installed and maintained properly through robust global certification tools for their third-party contractors. The segment serves other energy markets such as power reliability systems and includes intelligent electronic devices that are designed for online monitoring for the power utility, hydroelectric, rail, and telecommunication and data center infrastructure.
Energy Systems products are sold in highly competitive markets. The Company believes there is growth opportunity in developing markets. Energy Systems competes in each of its targeted markets based on product design, quality, performance, availability and price. The Company’s principal competitors in the petroleum equipment industry are Vontier Corporation and Dover Corporation.
2025 Energy Systems research and development expenditures were primarily related to the following activities:
•Developed 220V & 380V Guardian variable frequency drives
•Developed wireless sensor for humidity monitoring and underground tank desiccant system
•Developed new fiberglass tank sump and cover to withstand increased weight and side compression
•Developed Optimizer3 Trip Signature Monitor for continuous monitoring of substation circuit breakers
•Developed EVO LLD (line leak detection) to detect and minimize leaks
Distribution Segment
The Distribution segment is operated as a collection of wholly owned leading groundwater distributors known as the Headwater Companies. Headwater Companies deliver quality products and leading brands to the industry, providing contractors with the products and services they demand to meet their application challenges. The Distribution segment operates within the U.S. professional groundwater market.
Information Regarding All Reportable Segments
Research and Development
The Company incurred research and development expenses as follows:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||
| Research and development expenses | $ | 20.0 | $ | 21.5 | $ | 17.7 | |||||||||
Expenses incurred were for activities related to the development of new products, improvement of existing products and manufacturing methods and other applied research and development.
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The Company owns a number of patents, trademarks, and licenses. In the aggregate, these patents are of material importance to the operation of the business; however, the Company believes that its operations are not dependent on any single patent or group of patents.
Raw Materials
The principal raw materials used in the manufacture of the Company’s products are coil and bar steel, stainless steel, copper wire and aluminum ingot. Major components are electric motors, electrical components, motor protectors, forgings, gray iron castings, plastic resins and bearings. Most of these raw materials are available from multiple sources in the U.S. and world markets. Generally, the Company believes that adequate alternative sources are available for the majority of its key raw material and purchased component needs; however, the Company is dependent on a single or limited number of suppliers for certain materials or components. The Company believes that availability of fuel and energy is adequate to satisfy current and projected overall operations unless interrupted by government direction, allocation or other disruption.
Major Customers
No single customer accounted for over 10 percent of net sales in 2025, 2024, or 2023. No single customer accounted for over 10 percent of gross accounts receivable in 2025 and 2024.
Backlog
The dollar amount of backlog by segment was as follows:
| (In millions) | February 4, 2026 | February 5, 2025 | ||||||||
| Water Systems | $ | 99.0 | $ | 98.4 | ||||||
| Energy Systems | 21.0 | 21.5 | ||||||||
| Distribution | 19.1 | 20.8 | ||||||||
| Consolidated | $ | 139.1 | $ | |||||||
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2025 for management’s discussion and analysis of its financial condition and results of operations. The following is management’s discussion and analysis of the Company's financial condition and results of operations for the second quarter and six months ended June 30, 2026 and 2025.
In April of 2026, the Company acquired Benson Pump Corporation (“Benson Pump”). Benson Pump is a professional groundwater distributor in Arkansas and operates within the Distribution segment. In May of 2026, the Company acquired Wood Brothers Industries. Wood Brothers Industries is a water treatment wholesale supplier in Nebraska and operates as a subsidiary of Water Systems. Acquisitions contributed approximately $15.0 million of incremental net sales in the second quarter of 2026. Refer to Note 3 in Item 1 of this Quarterly Report on Form 10-Q for additional information on the Benson Pump and Wood Brothers Industries acquisitions.
The impact that the imposition of tariffs and changes to global trade policies will have on the Company's consolidated results of operations is uncertain. The Company expects tariffs on goods imported into the U.S. from Canada, Mexico, and China, and other countries upon which tariffs may be imposed, to continue to be met with retaliatory tariffs from those countries which would impact the Company's consolidated results of operations. The extent and duration of tariffs and the resulting impact on macroeconomic conditions and on the Company's business are uncertain and may depend on various factors, including negotiations between the U.S. and affected countries, retaliation imposed by other countries, tariff exemptions, negative sentiment toward U.S. companies and products, and availability of lower cost inputs that may be sourced domestically. The Company will continue to evaluate the nature and extent of the impact to its business and consolidated results of operations.
Second Quarter 2026 vs. 2025
OVERVIEW
Net sales in the second quarter and first six months of 2026 increased 6 percent and 8 percent, respectively, as compared to the prior-year periods. The sales increases were due to the incremental sales impact from recent acquisitions, volume and price realization, and the favorable impact of foreign currency translation. The Company's consolidated gross profit was $230.6 million and $405.6 million, respectively, for the second quarter and first six months of 2026, increases of 9 percent and 8 percent, respectively, from the prior-year periods. Diluted earnings per share was $1.46 and $2.23, respectively, for the second quarter and first six months of 2026, increases of $0.15 and $0.26, respectively, from the prior-year periods.
RESULTS OF OPERATIONS
Net Sales
Net sales in the second quarter and first six months of 2026 were $622.9 million and $1.1 billion, respectively, and increased 6 percent and 8 percent, respectively, as compared to the prior-year periods. The sales increase for the second quarter three months was primarily due to incremental sales impact from recent acquisitions of 3 percent, price and volume increases of 2 percent, and the positive impact of foreign exchange rates of 1 percent. The sales increase for the first six months was primarily due to higher sales volumes and price realization of 4 percent, positive impact of foreign exchange rates of 2 percent, and incremental sales impact from recent acquisitions of 2 percent.
| Net Sales | |||||||||||||||||
| (In millions) | Q2 2026 | Q2 2025 | 2026 v 2025 | ||||||||||||||
| Water Systems | $ | 358.5 | $ | 340.8 | $ | 17.7 | |||||||||||
| Energy Systems | 80.2 | 77.5 | 2.7 | ||||||||||||||
| Distribution | 221.1 | 200.0 | 21.1 | ||||||||||||||
| Eliminations/Other | (36.9) | (30.9) | (6.0) | ||||||||||||||
| Consolidated | $ | 622.9 | $ | 587.4 | $ | 35.5 | |||||||||||
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| Net Sales | |||||||||||||||||
| (In millions) | YTD June 30, 2026 | YTD June 30, 2025 | 2026 v 2025 | ||||||||||||||
| Water Systems | $ | 676.6 | $ | 628.1 | $ | 48.5 | |||||||||||
| Energy Systems | 151.9 | 144.3 | 7.6 | ||||||||||||||
| Distribution | 372.0 | 341.9 | 30.1 | ||||||||||||||
| Eliminations/Other | (77.2) | (71.6) | (5.6) | ||||||||||||||
| Consolidated | $ | 1,123.3 | $ | 1,042.7 | $ | 80.6 | |||||||||||
Net Sales-Water Systems
Water Systems net sales were $358.5 million in the second quarter of 2026, an increase of $17.7 million or 5 percent compared to the second quarter of 2025 net sales of $340.8 million. The sales increase for the second quarter was primarily due to price realization, the positive impact of foreign exchange rates, and the incremental sales impact from recent acquisitions. Water Systems net sales were $676.6 million for the first six months of 2026, an increase of $48.5 million or 8 percent compared to the first six months of 2025 net sales of $628.1 million. The sales increase for the first six months was primarily due to volume increases, price realization, the positive impact of foreign exchange rates, and the incremental sales impact from recent acquisitions.
Water Systems net sales in the U.S. and Canada increased 8 percent in the second quarter and 7 percent in the first six months of 2026, as compared to the prior-year periods. In the second quarter of 2026, sales of groundwater pumping equipment increased 12 percent, sales of water treatment products increased 14 percent and sales of all other surface pumping equipment increased 7 percent. These sales increases were partially offset by lower sales of large dewatering equipment of 10 percent compared to 2025. In the first six months of 2026, sales of groundwater pumping equipment increased 8 percent, sales of water treatment products increased 10 percent and sales of all other surface pumping equipment increased 11 percent. These sales increases were partially offset by lower sales of large dewatering equipment of 10 percent compared to 2025. Water Systems net sales in markets outside the U.S. and Canada increased 1 percent in the second quarter and 8 percent in the first six months of 2026, as compared to the prior-year periods. The sales growth in the second quarter and the first six months of 2026 was due to incremental sales impact from recent acquisitions of 1 percent and 4 percent, respectively. Sales increased 5 percent in the second quarter and 6 percent in the first six months of 2026 due to the favorable impact from foreign exchange rates, as compared to prior-year periods. Excluding the impact of foreign currency translation and acquisitions, in both the second quarter and first six months of 2026, the sales growth in the Asia Pacific regions was more than offset by sales declines in the Latin America and European regions.
Net Sales-Energy Systems
Energy Systems net sales were $80.2 million in the second quarter of 2026, an increase of $2.7 million or 3 percent compared to the second quarter of 2025 net sales of $77.5 million. Energy Systems net sales were $151.9 million for the first six months of 2026, an increase of $7.6 million or 5 percent compared to the first six months of 2025 net sales of $144.3 million. The net sales increase was due to higher sales volumes and price realization.
Energy Systems net sales in the U.S. and Canada increased 1 percent in the second quarter and 2 percent in the first six months of 2026, as compared to the prior-year periods. The increase was primarily in fuel management systems and pumping systems. Outside the U.S. and Canada, Energy Systems sales increased 12 percent in the second quarter and 18 percent in the first six months of 2026, as compared to the prior-year periods, due primarily to sales growth in the European and African regions.
Net Sales-Distribution
Distribution net sales were $221.1 million in the second quarter of 2026, an increase of $21.1 million or 11 percent compared to the second quarter of 2025 net sales of $200.0 million. Distribution net sales were $372.0 million for the first six months of 2026, an increase of $30.1 million or 9 percent compared to the first six months of 2025 net sales of $341.9 million. The net sales increase was due to higher sales volumes and price realization and the incremental sales impact from recent acquisitions.
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Gross Profit and Expenses Ratios
| Three Months Ended June 30, | |||||||||||||||||||||||
| (In millions) | 2026 | % of Net Sales | 2025 | % of Net Sales | |||||||||||||||||||
| Gross Profit | $ | 230.6 | 37.0 | % | $ | 211.8 | 36.1 | % | |||||||||||||||
| Selling, General and Administrative Expense | 132.1 | 21.2 | % | 123.5 | 21.0 | % | |||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||||||
| (In millions) | 2026 | % of Net Sales | 2025 | % of Net Sales | |||||||||||||||||||
| Gross Profit | $ | 405.6 | 36.1 | % | $ | 375.7 | 36.0 | % | |||||||||||||||
| Selling, General and Administrative Expense | 255.1 | 22.7 | % | 243.2 | 23.3 | % | |||||||||||||||||
Gross Profit
The gross profit margin ratio was 37.0 percent and 36.1 percent in the second quarter and first six months of 2026, respectively, and 36.1 percent and 36.0 percent in the second quarter and first six months of 2025, respectively. The gross profit margin was favorably impacted in the second quarter by tariff refunds while the first six months of 2026 was impacted by an unfavorable product and geographic sales mix shift.
Selling, General, and Administrative ("SG&A")
SG&A expenses were $132.1 million in the second quarter and $255.1 million in the first six months of 2026 compared to $123.5 million in the second quarter and $243.2 million in the first six months of 2025. SG&A expenses increased in the second quarter and first six months of 2026 from the incremental expense impact of recent acquisitions. The SG&A expenses ratio (SG&A as a percentage of net sales) was 21.2 percent and 22.7 percent in the second quarter and first six months of 2026, respectively, and 21.0 percent and 23.3 percent in the second quarter and first six months of 2025, respectively.
Legal settlement loss
There was a $4.5 million provision for legal settlement recorded in the Energy Systems segment during the second quarter of 2026. Refer to Item 1 Note 7 for more information.
Restructuring Expenses
There were $0.4 million and $4.3 million in restructuring expenses in the second quarter and first six months of 2026, compared to $0.2 million and $0.3 million restructuring expenses in the second quarter and first six months of 2025. Restructuring expenses were primarily from continued manufacturing realignment activities.
Operating Income
Operating income in the second quarter and first six months of 2026 was $93.6 million and $141.7 million, respectively, increases of 6 percent and 7 percent, respectively, as compared to the prior-year periods.
| Operating income (loss) | |||||||||||||||||||
| (In millions) | Q2 2026 | Q2 2025 | 2026 v 2025 | ||||||||||||||||
| Water Systems | $ | 65.2 | $ | 61.8 | $ | 3.4 | |||||||||||||
| Energy Systems | 27.9 | 29.1 | (1.2) | ||||||||||||||||
| Distribution | 19.7 | 16.1 | 3.6 | ||||||||||||||||
| Eliminations/Other | (19.2) | (18.9) | (0.3) | ||||||||||||||||
| Consolidated | $ | 93.6 | $ | 88.1 | $ | 5.5 | |||||||||||||
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| Operating income (loss) | |||||||||||||||||||
| (In millions) | YTD June 30, 2026 | YTD June 30, 2025 | 2026 v 2025 | ||||||||||||||||
| Water Systems | $ | 109.7 | $ | 105.3 | $ | 4.4 | |||||||||||||
| Energy Systems | 52.0 | 51.0 | 1.0 | ||||||||||||||||
| Distribution | 22.7 | 18.2 | 4.5 | ||||||||||||||||
| Eliminations/Other | (42.7) | (42.3) | (0.4) | ||||||||||||||||
| Consolidated | $ | 141.7 | $ | 132.2 | $ | 9.5 | |||||||||||||
Operating Income-Water Systems
Water Systems operating income in the second quarter and first six months of 2026 was $65.2 million and $109.7 million, respectively, increases of $3.4 million and $4.4 million, respectively, as compared to the prior-year periods. The second quarter operating income margin was 18.2 percent, an increase of 10 basis points from 18.1 percent in the second quarter of 2025. The first six months of 2026 operating income margin was 16.2 percent, a decrease of 60 basis points from 16.8 percent in the first six months of 2025. The increase in operating income in the second quarter was primarily due to higher sales and tariff refunds. The decrease in margin for the first six months was primarily due to an unfavorable product and geographic sales mix shift.
Operating Income-Energy Systems
Energy Systems operating income in the second quarter and first six months of 2026 was $27.9 million and $52.0 million, respectively, a decrease of $1.2 million and an increase of $1.0 million, respectively, as compared to the prior-year periods. The second quarter operating income margin was 34.8 percent, a decrease of 270 basis points from 37.5 percent in the second quarter of 2025. The first six months of 2026 operating income margin was 34.2 percent, a decrease of 110 basis points from 35.3 percent in the first six months of 2025. The decrease in margin was primarily due to $4.5 million legal settlement recorded in the second quarter of 2026.
Operating Income-Distribution
Distribution operating income in the second quarter and first six months of 2026 was $19.7 million and $22.7 million, respectively, increases of $3.6 million and $4.5 million, respectively, as compared to the prior-year periods. The second quarter operating income margin was 8.9 percent, an increase of 80 basis points from 8.1 percent in the second quarter of 2025. The first six months of 2026 operating income margin was 6.1 percent, an increase of 80 basis points from 5.3 percent in the first six months of 2025. Operating income and operating income margins increased primarily due to higher sales and cost structure actions implemented in 2025.
Operating Income-Eliminations/Other
Operating income-Eliminations/Other in the second quarter and first six months of 2026 was $19.2 million and $42.7 million, respectively, increases of $0.3 million and $0.4 million, respectively, as compared to the prior-year periods. Operating income-Eliminations/Other is composed primarily of intersegment sales and profit eliminations and unallocated general and administrative expenses. The intersegment profit elimination impact in the second quarter and first six months of 2026 compared to the prior-year periods of 2025 was an unfavorable $1.2 million and $1.3 million, respectively. The intersegment elimination of operating income effectively defers the operating income on sales from Water Systems to Distribution in the consolidated financial results until such time as the transferred product is sold from the Distribution segment to its end third party customer. General and administrative expenses decreased $0.9 million and $0.8 million, respectively, compared to the previous year’s periods.
Interest Expense
Interest expense was $3.5 million and $5.8 million in the second quarter and first six months of 2026, respectively, and $2.8 million and $4.6 million in the second quarter and first six months of 2025, respectively. The increases in the second quarter and first six months of 2026 were primarily driven by higher average amount of outstanding debt.
Other income/(expense), net
Other income / (expense), net was a net gain of $1.3 million and a net gain of $1.0 million in the second quarter and first six months of 2026, respectively, and a net loss of $(0.2) million and a net gain of $0.7 million in the second quarter and first six months of 2025, respectively.
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Foreign Exchange income (expense), net
Foreign currency-based transactions produced an expense of $2.5 million and $2.1 million in the second quarter and first six months of 2026, respectively, and an expense of $4.5 million and $5.8 million in the second quarter and first six months of 2025, respectively. The results in the second quarters and first six months of 2026 and 2025 are primarily due to transaction losses associated with the Argentine Peso and Turkish Lira relative to the U.S. dollar. The Company reports the results of its subsidiaries in Argentina and Turkey using highly inflationary accounting, which requires that the functional currency of the entity be changed to the reporting currency of its parent.
Income Taxes
The provision for income taxes in the second quarter and first six months of 2026 was $22.8 million and $33.9 million, respectively, and $20.1 million and $30.5 million in the second quarter and first six months of 2025, respectively. The effective tax rate for the second quarter and first six months of 2026 was 25.7 percent and 25.2 percent respectively, and 24.9 percent for both the second quarter and the first six months of 2025. The increase in the effective tax rate was primarily due to increased unfavorable discrete events in 2026.
Net Income
Net income in the second quarter and first six months of 2026 was $66.1 million and $100.8 million, respectively, and $60.6 million and $91.9 million in the second quarter and first six months of 2025, respectively. Net income attributable to Franklin Electric Co., Inc. in the second quarter and first six months of 2026 was $65.7 million and $100.1 million, respectively, or $1.46 and $2.23 per diluted share. Net income attributable to Franklin Electric Co., Inc. in the second quarter and first six months of 2025 was $60.1 million and $91.1 million, respectively, or $1.31 and $1.97 per diluted share.
CAPITAL RESOURCES AND LIQUIDITY
Sources of Liquidity
The Company's primary sources of liquidity are cash on hand, cash flows from operations, revolving credit agreements, and long-term debt funds available. The Company believes its capital resources and liquidity position at June 30, 2026 is adequate to meet projected needs for the foreseeable future. The Company expects that ongoing requirements for operations, capital expenditures, pension obligations, dividends, share repurchases, and debt service will be adequately funded from cash on hand, operations, and existing credit agreements.
As of June 30, 2026, the Company had a $350.0 million revolving credit facility. The facility is scheduled to mature on May 14, 2030. As of June 30, 2026, the Company had $236.6 million borrowing capacity under its credit agreement as $6.4 million of commercial and standby letters of credit were outstanding and undrawn and $107.0 million revolver borrowings were drawn or outstanding.
The Company maintains the Fourth Amended and Restated Note Purchase and Private Shelf Agreement (the "Prudential Agreement") with PGIM, Inc. and its affiliates, with a remaining borrowing capacity of $200.0 million as of June 30, 2026. The maturity date of the agreement is May 15, 2027.
In addition, the Company maintains an uncommitted and unsecured private shelf agreement with NYL Investors LLC, an affiliate of New York Life, and each of the undersigned holders of Notes (the "New York Life Agreement") with a remaining borrowing capacity on the New York Life Agreement of $175.0 million as of June 30, 2026. The maturity date of the agreement is May 15, 2027.
The Company also has other long-term debt borrowings outstanding as of June 30, 2026. See Note 6 - Debt included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, for additional information regarding these obligations and future maturities as well as Note 6 - Debt of this current quarterly report for changes to these agreements since December 31, 2025.
The Company has a firm, non‑cancellable purchase commitment with a vendor for copper with an aggregate remaining obligation of approximately $3.4 million, expected to be fulfilled within the next year.
At June 30, 2026, the Company had $76.7 million of cash and cash equivalents held in foreign jurisdictions, which is intended to be used to fund foreign operations. There is currently no need or intent to repatriate the majority of these funds in order to meet domestic funding obligations or scheduled cash distributions.
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Cash Flows
The following table summarizes significant sources and uses of cash and cash equivalents for the first six months of 2026 and 2025.
| (In millions) | 2026 | 2025 | ||||||||||
| Net cash flows from operating activities | $ | 58.7 | $ | 32.0 | ||||||||
| Net cash flows from investing activities | (90.9) | (127.3) | ||||||||||
| Net cash flows from financing activities | 36.1 | (22.1) | ||||||||||
| Impact of exchange rates on cash and cash equivalents | (6.3) | 1.5 | ||||||||||
| Change in cash and cash equivalents | $ | (2.4) | $ | (115.9) | ||||||||
Cash Flows from Operating Activities
2026 vs. 2025
Net cash provided by operating activities was $58.7 million for the six months ended June 30, 2026 compared to $32.0 million provided by operating activities for the six months ended June 30, 2025. The change in operating cash flow was primarily attributable to an increase in net income and changes in working capital.
Cash Flows from Investing Activities
2026 vs. 2025
Net cash used in investing activities was $90.9 million for the six months ended June 30, 2026 compared to $127.3 million used in investing activities for the six months ended June 30, 2025. The change in investing cash flow was primarily attributable to decreased acquisition activity in the first six months of 2026 compared to the prior year.
Cash Flows from Financing Activities
2026 vs. 2025
Net cash provided by financing activities was $36.1 million for the six months ended June 30, 2026 compared to $22.1 million used in financing activities for the six months ended June 30, 2025. The change in financing cash flow was primarily due to decreased repurchases of Common Stock in 2026 compared to 2025.
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FACTORS THAT MAY AFFECT FUTURE RESULTS
This quarterly report on Form 10-Q contains certain forward-looking information, such as statements about the Company’s financial goals, acquisition strategies, financial expectations including anticipated revenue or expense levels, business prospects, market positioning, product development, manufacturing realignment, capital expenditures, tax benefits and expenses, and the effect of contingencies or changes in accounting policies. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may increase,” “may fluctuate,” “plan,” “goal,” “target,” “strategy,” and similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could.” While the Company believes that the assumptions underlying such forward-looking statements are reasonable based on present conditions, forward-looking statements made by the Company involve risks and uncertainties and are not guarantees of future performance. Actual results may differ materially from those forward-looking statements as a result of various factors, including regional or general economic and currency conditions, various conditions specific to the Company’s business and industry, new housing starts, weather conditions, epidemics and pandemics, market demand, competitive factors, changes in distribution channels, supply constraints, effect of price increases, raw material costs and availability, technology factors, integration of acquisitions, litigation, government and regulatory actions, changes in tariffs or the impact of any such changes on the Company's financial results, the Company’s accounting policies, and other risks, all as described in the Company's Securities and Exchange Commission filings, included in Part I, Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and in Exhibit 99.1 thereto. Any forward-looking statements included in this Form 10-Q are based upon information presently available. The Company does not assume any obligation to update any forward-looking information, except as required by law.
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Next expected filings
- ~2026-10-29 10-Q expected by 2026-11-08 (in 36 days)
- ~2027-02-19 10-K expected by 2027-02-25 (in 149 days)
- ~2027-04-28 10-Q expected by 2027-05-08 (in 217 days)
- ~2027-07-28 10-Q expected by 2027-08-07 (in 308 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-09-08 8-K Material Agreement Entered; Completion of Acquisition/Disposition; Unregistered Equity Sale; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-07-29 10-Q Quarterly Report
- 2026-07-28 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-29 10-Q Quarterly Report
- 2026-04-28 8-K Earnings Release; Financial Statements and Exhibits
- 2026-02-20 10-K Annual Report
- 2026-02-17 8-K Earnings Release; Financial Statements and Exhibits
- 2025-10-30 10-Q Quarterly Report
- 2025-10-28 8-K Earnings Release; Financial Statements and Exhibits
- 2025-10-02 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2025-07-31 10-Q Quarterly Report
- 2025-07-29 8-K Earnings Release; Financial Statements and Exhibits
- 2025-07-28 8-K Material Agreement Entered; Other Events; Financial Statements and Exhibits
- 2025-07-11 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-06-13 8-K Material Agreement Entered; Other Events; Financial Statements and Exhibits