FRANKLIN ELECTRIC CO INCFELE

FRANKLIN ELECTRIC CO INC Revenue Disclosure

10-KFiled Feb 20, 20262 min read
Revenue Recognition--Revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The promise in a contract to transfer goods or services to a customer represents a performance obligation. The Company typically sells its products to customers by purchase order and does not have any additional performance obligations included in contracts to customers. Shipping and handling activities are considered to be fulfillment activities and are not considered to be a separate performance obligation. Therefore, the Company allocates the transaction price based on a single performance obligation. The Company typically ships products Free on Board (FOB) shipping point at which point control of the products passes to the customers. The Company considers the performance obligation satisfied and recognizes revenue at a point in time, the time of shipment. The Company applies a practical expedient to expense as incurred costs to obtain a contract with a customer when the amortization period would have been one year or less as well as applies the financing component practical expedient when the duration of the financing is one year or less.

The Company’s products may include routine assurance-type warranties which do not qualify as separate performance obligations. In the event that significant post-shipment obligations were to exist for the Company’s products, revenue recognition would be deferred until the performance obligations were satisfied.
The Company records net sales after discounts at the time of sale based on specific discount programs in effect, related historical data, and experience.
The following table disaggregates the Company's net sales from contracts with customers by segment:
Net Sales
(In millions)202520242023
Water Systems
External sales
United States & Canada$607.9 $586.6 $636.0 
Latin America204.7 170.9 174.2 
Europe, Middle East & Africa218.1 211.4 198.3 
Asia Pacific100.9 93.2 86.8 
Intersegment sales
United States & Canada124.8 121.9 108.4 
Total sales1,256.4 1,184.0 1,203.7 
Distribution
External sales
United States & Canada700.7 685.5 673.3 
Total sales700.7 685.5 673.3 
Energy Systems
External sales
United States & Canada229.0 212.4 220.9 
All other70.0 61.3 75.6 
Total sales299.0 273.7 296.5 
Intersegment Eliminations/Other(124.8)(121.9)(108.4)
Consolidated$2,131.3 $2,021.3 $2,065.1 

Historical Timeline

Fiscal YearFiled
2025Feb 20, 2026Showing above
2024Feb 21, 2025

About Revenue Disclosures

Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.

Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.

Other Available Disclosures

Income TaxesEarnings Per ShareFair ValuePP&EGoodwill & IntangiblesSegmentsDebtCommitmentsStock CompensationNew StandardsPay vs Performance