Franklin Electric Co., Inc. (NASDAQ:FELE) Q4 2022 Earnings Call Transcript

Walter Liptak: And then maybe a last one for me. I think in the prepared remarks, you guys talked about how through productivity and other things, you’ve increased your operating leverage. I wonder if you could tell us what’s embedded in the 2023 guidance?

Jeff Taylor: Well, we net that out with our cost increases. So we’re looking to offset at a minimum a piece of the overall inflation that we see in our cost piece. I don’t have a specific number for you in terms of the impact there, but we’re always looking to drive productivity improvements. I would comment that you’ll notice on the statement of cash flows that for CapEx, we’ve invested in 2022, just north of $40 million, that’s an increase from approximately $30 million in the prior year. That’s really driving those productivity improvement projects as well as bringing capacity in house and helping to improve the resiliency of our supply chain. And so we’re focused on investing CapEx to drive that improvement annually year-over-year, and it’s intended to improve our margin but also offset inflationary pressures.

Operator: I’m showing no further questions. So with that, I’ll hand the call back over to CEO, Gregg Sengstack for any closing remarks.

Gregg Sengstack: Thank you, Andrew. And we thank you all for listening in this morning to our fourth quarter earnings conference call. We look forward to speaking to you after the first quarter with our first quarter results. Have a good week.

Operator: Thank you for participating. This concludes today’s program. You may now disconnect.