Franklin Electric Company, Inc., Q1 2009 Earnings Call Transcript

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2009-04-23 09:38:22.0

Tags: Call Transcript, Earnings, Seasonality, Q2, Sales Strategy, Sales Force Management, Telecom & Utilities, Sales, Seeking Alpha, Franklin Electric Co. Inc.

Question-and-Answer Session

Operator

Thank you (Operator Instructions) And we will take our first question from Michael Schneider from Robert W. Baird.

Michael Schneider - Robert W. Baird

Good morning guys.

Scott Trumbull

Good morning.

Michael Schneider - Robert W. Baird

May be we can start on Water and I am curious about the seasonality because it is clear the distribution channel was destocking aggressively. If you look at prior years guys I am just curious about the sequential move in Water that you expect. If you look back at prior years you basically showed $20 million to $22 million in greater sales Q2 over Q1 in Water. Obviously the economy is soft but you saw that in Q1. So should we expect based on some relief from destocking and maybe some delayed seasonality that boost is actually greater this year, despite the economy and may be you can just give us your thoughts on what unfolds here in Q2?

Scott Trumbull

Well there is no doubt that our sales in Q2 will be higher than they were in Q1. but whether they will be higher by more than they were in prior years or not, then increase will be greater I guess. I would have trouble giving that guidance at this point. There are no indications that we are going to, we could see that we are going to benefit from a significantly strengthening economy.

Year-on-year housing starts we believe will continue to be down perhaps not by down as much, because the comparisons get progressively easier as the year goes on. But nevertheless we will continue to be down. We do think that the inventory destocking and the trades has peaked and they will likely be some, perhaps even inventory built which could work to the point that you are making.

But I think our distributors are going to try to work as hard as they can to keep building inventory and try to rely on their vendors to make availability rapid availability for them.

Michael Schneider - Robert W. Baird

Is there the potential than that as you get into Q2 that you in effect experience all the seasonality in Q2 versus prior years and normal years where you would have experienced some in February, March and do you have indications in your April orders?

Scott Trumbull

We haven't seen it in our April orders at this point.

John Haines

 

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