Please be advised that today's conference call is being recorded. It is now my pleasure to introduce Chief Financial Officer, Jeff Taylor. Thank you, Andrew, and good morning, everyone. Welcome to Franklin Electric's first quarter 2024 earnings conference call. With me today is Gregg Sengstack, our Chairperson and Chief Executive Officer. On today's call, Gregg will review our first quarter business highlights, then I will provide additional details 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. With that, I will now turn the call over to Gregg Sengstack. Thank you, Jeff, and thank you all for joining us. Our first quarter results were slightly below our expectations, while the business generally performed as expected. The Franklin team executed well and managed costs during the quarter, despite much wetter weather than expected and continuing commodity price pressures. As we have previously communicated, the first quarter is seasonally our slowest quarter as it relates to demand. However, underlying activity in our core markets remains healthy. Compared to our record first quarter 2023, net sales were down $24 million, or 5%. We had an exceptional start in 2023, particularly for large dewatering equipment and Fueling Systems, which made for a tougher year-over-year comparison. Largest contributing factors were the decrease in large dewatering equipment sales in the U.S. to our fleet rental customers, which accounted for approximately 2/3 of the decrease, and lower sales in Fueling Systems as demand and order patterns have normalized. Even with more moderate demand, we delivered improved gross margin versus the prior year, driven by favorable mix and continued cost control. As expected, SG&A expenses were higher than prior year due to inflationary pressure, investments in recent water treatment and Distribution acquisitions, and the addition of new Distribution branch locations. Turning to our segments, Water Systems' first quarter sales and operating income declined 7% and 4%, respectively. As I previously mentioned, volumes were lower in large dewatering equipment, creating a difficult year-over-year comparison against the first quarter record sales in 2023. Additionally, demand in the U.S. for our groundwater pumping systems was impacted by continued unfavorable weather patterns. Operating margin improved to 16.4%, up 40 basis points versus the prior year, and 60 basis points versus the fourth quarter of 2023. This was driven by a favorable product mix and lower freight expenses. Fueling System sales and operating income decreased 15% and 10%, respectively, versus the prior year. We are encouraged to see that the destocking activity, which impacted the business in the back half of last year, has mostly diminished at this point in time. As with large dewatering equipment, Fueling Systems' record first quarter of fiscal 2023 created a difficult year-over-year comparison. That said, Fueling Systems' first quarter operating margin came in at 30.3%, an increase of 170 basis points compared to the prior year. Improved margin was a result of favorable product mix and operating expense management. Sales in the Distribution business increased 3% from the prior year, primarily due to the incremental sales impact from our 2023 acquisition. The business, similar to the Water Systems, was negatively impacted by unfavorable weather across many parts of the United States, delaying the start of contractor installations. Operating margin was 1.2%, a 210 basis point decline versus the prior year, due to lower margins on commodity-based products, as well as increased operating expenses from continued investment and growth via the recent acquisition of new branch locations announced in 2023. Considering the impact of these investments, we are encouraged to have achieved a 50 basis point sequential improvement in operating margins for Distribution for the fourth quarter of 2023 on seasonally lower sales. Our sales team maintains line of sight to our contractors, customers, project pipelines, and as a result, we are confident we will see improving performance in sales and margin as weather improves as we enter the groundwater growing season. Our continued focus on the management of working capital has resulted in more normalized inventory levels, with our March inventory balance at $532 million, close to $70 million lower than the same period in the prior year, although up from the end of the year in anticipation of normal seasonal demand. Consequently, our cash flow improved approximately $10 million in the first quarter of 2024 compared to the prior year. We remain committed to a balanced capital allocation strategy. We continue to make internal investments focused on bringing additional production in-house and enhancing the integrity of our supply chain. We are also actively monitoring the M&A environment, where we have seen an uptick in activity. We've invested approximately $500 million since 2017 to build out our Distribution business and our water treatment platform. We will continue to build these businesses through bolt-on acquisitions, while we are actively looking to grow in a couple of other areas. The first is manufacturers of larger pumping systems with a focus on commercial and industrial end markets globally. The second is to add to our critical asset monitoring capabilities in the grid business as the demand for electricity continues to grow. With effectively no net debt, we are well positioned to take advantage of opportunities as they present themselves. Finally, we remain committed to returning capital to our shareholders through regular dividends and opportunistic share repurchases. Looking ahead to the remainder of this year, we are mindful of the continued macroeconomic and geopolitical pressures we have to contend with. However, given the results in the first quarter and our current outlook, we are maintaining our full year 2024 sales guidance to be in the range of $2.1 billion-$2.17 billion in sales, and our EPS guidance remain between $4.22 and $4.40. Before turning the call back over to Jeff, I'd like to take a moment to recognize Franklin Electric and our employees for being named in Newsweek's 2024 list of America's Most Trustworthy Companies for the third consecutive year. I would also like to refer you to our recently published 2024 sustainability report, detailing the company's efforts to positively and responsibly impact our communities over the past year. The work that we do is essential to people's lives, advances global access to clean water, and improves the safety and availability of energy worldwide. I'm also proud of the culture this management team has stewarded, one that balances focus across efficiency, sustainability, and reliability with the well-being of our employees. I will now turn the call back over to Jeff. Jeff? Thanks, Gregg. Overall, our first quarter was largely in line with our expectations, as Gregg highlighted. While we started off the first quarter with sales down from our record levels last year, the Franklin team executed well with a focus on delivering for our customers and cost management, which resulted in an improvement in our gross profit margins. Our fully diluted earnings per share were $0.70 for the first quarter of 2024, versus $0.79 for the first quarter of 2023. First quarter 2024 consolidated sales were $460.9 million, a year-over-year decrease of 5%. The benefit to sales from our 2023 acquisitions were more than offset by lower volumes in Water Systems and Fueling Systems. Water Systems sales in the U.S. and Canada were down 12% compared to the first quarter of 2023 due to volume declines. Sales of large dewatering equipment decreased 50% compared to record quarterly sales in the prior year quarter, and sales of groundwater pumping equipment decreased 8%. These sales declines were partially offset by the incremental sales impact from our recent water treatment acquisition. Sales of all other surface pumping equipment were flat compared to the first quarter of 2023. Water Systems sales in markets outside the U.S. and Canada increased by 4% overall, as sales increased in all major markets: Latin America, EMEA, and Asia Pacific. Water Systems operating income was $47.1 million in the first quarter of 2024, down $1.9 million or 4% versus the first quarter of 2023. Operating income margin was 16.4%, a year-over-year increase of 40 basis points. The decrease in operating income was primarily due to lower sales. Operating income margin improved due to favorable product mix, mix shifts and lower freight expenses. Distribution's first quarter sales were $147 million versus the first quarter 2023 sales of $143 million, a 3% increase. The Distribution segment's operating income was $1.8 million for the first quarter, a year-over-year decrease of $2.9 million. Operating income margin was 1.2% of sales in the first quarter of 2024, versus 3.3% in the prior year. Income was negatively impacted by margin compression from continued lower pricing on commodity-based products and investments in new branch locations. Fueling System sales in the first quarter of 2024 were $62.1 million. Sales decreased $10.6 million, or 15%, compared to the prior year. Fueling System sales in the U.S. and Canada decreased 11% compared to the first quarter of 2023. The decrease was across all product lines as customer buying patterns have normalized after record first quarter sales in 2023. Outside the U.S. and Canada, Fueling System sales decreased 16%, due primarily to lower sales in Asia Pacific. Fueling Systems operating income was $18.8 million, compared to $20.8 million in the first quarter of 2023. The first quarter of 2024 operating income margin was 30.3%, compared to 28.6% of net sales in the prior year. Operating income margin increased primarily due to price realization, lower freight costs, and a favorable product sales mix shift. Franklin Electric's consolidated gross profit was $163.6 million for the first quarter of 2024, a 1% year-over-year increase. The gross profit as a percentage of net sales was 35.5% in the first quarter of 2024, up 200 basis points versus 33.5% in the prior year. The gross profit margin was favorably impacted in 2024 by product mix and lower freight costs in Water Systems and Fueling Systems, partially offset by margin compression from unfavorable pricing of commodity-based products from the Distribution business. Selling, General, and Administrative, or SG&A expenses, were $115.6 million in the first quarter of 2024, compared to $109.5 million in the first quarter of 2023. The increase in SG&A expenses were due to the incremental expense from recent acquisitions, new branch locations and Distribution, and higher compensation costs. Consolidated operating income was $47.9 million in the first quarter of 2024, down $4.7 million, or 9%, from $52.6 million in the first quarter of 2023. The decrease in operating income was primarily due to lower sales. First quarter 2024 operating income margin was 10.4% versus 10.9% of net sales in the first quarter of 2023. Below operating income, higher foreign exchange expense, primarily due to hyperinflation in Argentina and Turkey, was partially offset by lower interest expense, which equates to a decrease of approximately $0.02 in earnings per share. The effective tax rate was 22% for the quarter, compared to 21% in the prior year quarter. The company purchased approximately 78,000 shares of its common stock in the open market for about $7.4 million during the first quarter of 2024. At the end of the first quarter, the remaining share repurchase authorization is about 839,000 shares. Last week, the company announced a quarterly cash dividend of $0.25 that will be paid May 16th to shareholders of record as of May 2nd. This concludes our prepared remarks. We'll now turn the call over to Andrew for questions. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question comes from the line of Bryan Blair with Oppenheimer. Thank you. Good morning, everyone. Good morning, Bryan. Morning. I was hoping you could offer a little more color on how orders trended through the quarter and into Q2, and how your team views the relative puts and takes or upside/downside drivers versus the reiterated full year guidance at this point? Yeah, I mean, from how it trended during the quarter, I think it trended as pretty much as we would expect it with the normal seasonal profile. Typically, it's gonna start slow and then build as we move through the quarter, so lower in January, and then finishing stronger in March. I believe we saw that. Puts and takes there, you know, the one thing that I think impacted the business more than we had expected was the weather. We continued to see much wetter weather in the U.S., and that impacted us in certainly in the western part of the U.S. S o, that was a factor that was worse than we had forecast or expected. T hen the other is, you know, the commodity prices, particularly for pipe, continue to be under pressure. You know, that market has to stabilize at some point, Bryan. We've been waiting for that for a couple of quarters now. W e continue to see, you know, pricing pressures there, and that's, you know, more than four quarters in a row that we've seen those pricing pressures on commodities. W hen you look at it from a year-over-year impact, it, it does, you know, it does have an impact. Understood. I appreciate the color. If we could dig into Fueling Systems, you know, trends a bit. What was the growth in critical asset monitoring in the quarter? And At this point, how mix accretive is that build-out? Obviously, the, you know, segment margin, you know, came in, at least relative to our model, ahead of expectations, and, you know, the, you know, the optics are quite favorable there. Yeah, I would say that the Grid Solutions business performed pretty much in line with the way the fueling business did in terms of, it was down on a year-over-year basis. And so we, you know, we, while that business has been growing, you know, strong double digits, and we expect it to continue to grow strong double digits, I think it went through some of the same dynamics that we saw on the fueling side, where people had built up inventory, destocked, and now with supply availability, lead times, improved, people are waiting. They're not placing their orders as early as they did in prior, prior year. And so, we, you know, we saw a year-over-year decline in Grid Solutions. Okay, understood. O ne last one, if I may. Any color on the integration of Action Manufacturing and commentary on the M&A pipeline? You know, it seems optimistic. Any color you can offer on the opportunities over the near-term potential actionability, but whether in water treatment, Distribution, the typical focus areas for you, or you called out a couple of new potential areas for investment as well. Yeah, Bryan, the Action integration has gone on schedule. We actually have brought them onto our ERP system. We're actually doing that tomorrow. W e are good in both Distribution and in water treatment. We're able to get businesses onto our system very quickly and get them aligned with our business practices, layouts of their warehouses and their assembly locations, and so we improve flow. That Action is right on plan, actually a little bit ahead of plan on top line and bottom line. You know, we have the platforms we need to operate in both Distribution and water treatment, groundwater, Distribution and water treatment. But, as people decide to exit the business, we're. Available to be an acquirer in that business and will continue to do so. We are also being more intentional now that I think, you know, as the world's accepted higher interest rates, particularly United States, and valuations that I think, you know, the sellers and buyers are getting a better understanding of what valuations are in this new interest rate environment, we're just seeing higher deal flow in manufacturing assets. A t its core, you know, Franklin's a manufacturing company. Our Distribution decision was to forward integrate and a channel that, you know, we're a leader in the United States in groundwater. So, you know, at our core, we're a manufacturer. At our core, we're a global company, and so we're looking again at opportunities to acquire, you know, companies, pump companies, that, you know, have larger pumps, to augment what people recognize as us being a leader in residential and Ag. So we want to be intentional about that, and that's where we're seeing also greater deal flow and deal activity. A lso with adjacencies and being mindful that, you know, we've grown this company over time, through intentional expansion into adjacent markets, but thoughtfully doing that so that they're adjacent to make logical sense from the standpoint of either Distribution, common customers. S o we're looking at that as well. Definitely we've seen just more deal flow over the last several months, last couple quarters, than, say, maybe a year ago. Appreciate all the color. Thanks, guys. Thank you, Bryan. Thank you. One moment, please, for our next question. Our next question comes from the line of Walter Liptak with Seaport Research. Good morning. Hey, good morning, guys. Thanks. Good morning, Walt. Hey, so considering the slightly weaker than expected first quarter, and, you know, related to the wetter weather, you know, you maintained the guidance for the full year. Can you talk about, you know, your confidence levels, you know, what has to go right, second quarter and the back half to get to your guidance? Yeah, Walt, I mean, I would say, first of all, that, you know, we maintain our guidance. We feel confident with the guidance range that we have out there. One quarter under our belt, slightly below our expectations, but I would still say generally in line with our expectations. So from that perspective, you know, not a major change. I've already talked about a couple of the things that impacted us were, you know, a little bit winter weather and some of the commodities pricings. But, you know, we certainly expected that 2024 was really gonna start much like 2023 ended, and I think we, you know, signaled that when we talked that the business was gonna, you know, come into the year and then build as we move through the year. I think we still see that happening. You know, overall, you know, we, we don't predict the economy, we're not, we're not economists, but, you know, we've said no recession. I think we still don't see a recession coming. I do believe that, you know, we expect interest rates to stay higher for longer now. That'll have a little impact on our housing market. You know, in areas like water treatment will be a little more impacted, are a little more impacted by housing. But, but overall, I think our view there is, is pretty much intact for the, for the full year guidance. You know, there was a question last quarter about, you know, first half and second half. I think that, you know, I think we're still generally in line with how the business has performed over time in that regard. So, you know, we feel good about the guidance that we have out there through the end of the year. Okay. Okay, great. Thanks. And then, thinking about second quarter, are you... You know, you talked about how the destocking in fueling seems to be behind you. Are you seeing more sell-through now going into the construction season? Yeah, I would say we're, you know, we're right at the beginning of the groundwater drilling season, and so, I think we are seeing a pickup in activity. You know, but we're on the front end of it at this point in time, and so there's still a ways to go. As we said, first quarter was impacted by weather, you know, in some key areas, the West Coast, Texas, other parts of the U.S. We've started to see some improvement there, but it's hard to predict the weather. And so, you know, we'll just- I mean, we take what we get when we talk about the weather impact on the business overall. W e expect a normal seasonal pickup in the second quarter, so our business is pretty consistent from that regard. Okay. H ow about related to the fueling part of the business? Are you seeing better sell-through at the, you know, for, for fueling equipment, now that the destocking is over? Yeah, I think the conversations that we have with our customers in fueling are indicative that, you know, they expect to have a more normal year this year. And so, you know, I think we're also on the front end of that curve as well. W e're, you know, the indication at this point is that we'll see, you know, fueling pick up as we move through the middle part of the year. And, you know, like I said, those customer conversations are positive at this point, but reflective of, you know, really a more normal level, not an increase in stocking, not a destocking environment. And so, you know, that's where we are in fueling. Okay, great. Okay, thanks much. You're welcome. Thank you. Thank you. One moment, please, for our next question. Our next question comes from the line of Mike Halloran with Baird. Hey, good morning, everyone. Hey, Mike. J ust a couple here. One, when you think about the pricing dynamics in the marketplace, on the water side, anything of note? I know the commodity pricing was mentioned in the prepared remarks, just more thinking competitively. T hen similarly, any thoughts on the inventory levels? Mike, the last part of your question broke up. Could you please repeat that? Yeah. Similarly, any thoughts on the inventory levels on the water side of the channel? Jeff, can get a little more detail. I'd say that on pricing, it's more kind of pre-COVID, where you're seeing a little more promotional activity in groundwater. The Res channel, the residential pricing is again kind of flattish. As we comment on dewatering, and I remember at our conference, your conference back in November, we talked about the durability of Franklin's business across the globe and the fact that we're in multiple channels. The one that we still see the challenge is the cyclicality of that dewatering business with the pump rental companies. So, you know, that when you start seeing a slowdown, pricing action there get a little competitive. W e've been able to maintain margins, as you saw in our results. T hen outside the United States, we're getting price, interestingly enough, with respect to inflation. So yeah, we're getting a little price in EMEA. And, you know, in the hyperinflation markets of Turkey and Argentina, we price in dollars or price in euros, so that's, that they just are at spot pricing, so that kind of helps insulate us. W ith respect to inventory levels on channel, we look at, you know, at Headwaters' being kind of an indicator of the groundwater channel, and they're bringing inventory levels down compared to last year, which we commented on. Our overall inventory are down, I think, about $70 million. P art of that is Distribution because, you know, the supply chains are better and lead times are coming down. I think that all of the distributors in the channel are probably doing similar things. W e're probably still seeing, I don't know if you want to say, destocking, but certainly inventory is probably at appropriate levels. Jeff and I were talking before the call that, you know, one thing we all need to be mindful of is that as the world dries out here in the United States, and we had, and it's, you know, of 130 years, we actually had a wetter year, 120th this year than in the first half—first quarter of the year than 110th or whatever, last year at this time. One did not plan for that, but you can't plan for the weather, you can just respond to it. I think as the world dries out, the likelihood of, you know, seeing some, you know, good demand in Ag, as you know, we start seeing pumps getting turned on. I think the channel inventory, to answer your question specifically, I think it's in good shape. I don't think it's overly high. I don't think it's overly low. Jeff, you have additional color to add there? No, I think you hit it right on, Gregg. I mean, the business as a whole, water, fueling, and Distribution, we are getting positive pricing. As Gregg mentioned, in water, we're a little more favorable outside the U.S. But you know, generally, low single digits, more of a return to normal from what we saw several years ago, and less frequent price increases than when we were in the high inflation environment. Distribution is getting good price on what I would call the core products, pumps, motors, drives, and controls. The commodity piece continues to be negative price in the current environment. T hat's what we're seeing across the business. Great. Thanks for that. T hen secondly, just on the margins for the water side, good seasonal margins there. Obviously, you mentioned the prepared remarks, that mix was a benefit. How do you think about what the run rate looks like or, or how to think about modeling that for the rest of the year? Yeah, I think the, I mean, we got a favorable mix, particularly from the, the decline in large dewatering, which, you know, is, is at the low end of the Water Systems margin range. W ith that, being a, a lower percentage of the overall mix, you know, that'll be that'll be a favorable mix impact for us. We do expect large dewatering to continue to be down, year-over-year as we move through 2024. And, so, you know, I think, I think the best way to model it, Mike, is, is just, you know, assume the, the current mix that we have and, and, on a go-forward basis, and then, you know, we'll see as it happens. I will, I will mention, though, that, you know, large dewatering is going to be lumpy this year as we move through the year. Yeah. You know, that's, there's a lot of movement there in terms of quarter-to-quarter impact. Thank you. Appreciate it, gentlemen. [crosstalk] Thank you. One moment, please, for our next question. Our next question comes from the line of Matt Summerville with D.A. Davidson. Yeah, thanks. Morning. Hey, Matt. Can you maybe talk about kind of embedded in your guidance for the year, what sort of organic outlook you're assuming for water Distribution and fueling in 2024 relative to 2023? Just maybe a little bit more segment granularity there, and then I have a follow-up. Yeah, a little more organic outlook. I mean, I think on, you know, for the guidance overall, on a full year basis, we're kind of low to mid-single digits top line growth. In Water Systems, you know, I think we expect pretty normal organic growth for the business, excluding the impact from large dewatering, which we know is going to be down on a year-over-year basis. T hat'll, you know, be in that, you know, normal range that we talk about, in that 3%-5% range. Fueling, I think fueling will be slightly lower this year. You know, still net positive overall, but, you know, they've come off of a really strong year in 2023, and we're seeing a bit of a normalization in terms of demand in that market. So, still positive overall. And then Distribution. Distribution on an organic basis, I think, similar to what we see in Water Systems. And, you know, possibly some upside in Distribution, you know, as we come into season and the market picks up. Got it. T hen just a follow-up on kind of water and Distribution. If you look at U.S., Canada, how did your business perform in terms of residential versus Ag? And how are you thinking about, you know, organic outlooks there for 2024 relative to 2023? Yeah. Interesting, interesting question. In the first quarter on a year-over-year basis, residential was down slightly, I would say low single digits. T hat's, you know, that's reflective of, you know, our groundwater business, which was somewhat impacted by weather during the quarter. Ag was down a little more in the quarter. Ag was down mid-single digits for the quarter on a year-over-year basis, and I also believe, weather was a factor that impacted Ag overall. Then, Matt, you know, our other residential surface pump business was essentially flat. Right. Okay. Those product lines. With respect to dewatering, given I think that business is coming off of a record year in 2023, and it is going to be a top line headwind this year, how much of a decline do you expect in large dewatering pumps on a revenue basis in 2024 relative to 2023, as we kind of think about modeling that in with Jeff's comments on the overall organic outlook for water ex that business? Yeah, Matt, so there's a. Let me unpack that a little bit. There's a couple of pieces there. W hen we, when we talk about large dewatering, we have a, a large dewatering business that is global, and then we have a piece of it that is primarily U.S., Canada, which is selling to the fleet rental companies. And, and, so we are seeing, you know, the business to the fleet rental companies, primarily in the U.S., is where we saw the significant pullback on a year-over-year basis of about, you know, 50% in the first quarter. Our business globally for the first quarter was down 50% in the U.S. Canada, it was actually up 10% outside of the U.S., in Canada. T hat gets us to, you know, global year-over-year decline of about 40%. It's really the large fleet rental business in the U.S. and Canada where we're seeing the pressure in this year. You know, I think our business overall, we would expect it to be down in the mid-teens for the full year, coming off of, you know, a record year in 2023 globally of about $200 million of sales. Perfect. Thanks, Jeff. You're welcome. Thank you. I will now turn the call back over to CEO, Gregg Sengstack, for any closing remarks. We thank you for joining us this morning on our conference call, and we look forward to speaking to you, in July with our second quarter results. Have a good week. Ladies and gentlemen, thank you for participating. This does conclude today's program, and you may now disconnect.