9/4 01:52 EST
加州的所有天然气加油站将很快迎来，美国加州空气资源局要求所有天然气加油站在09年4月1日之前对其地下储油罐进行更新换代，蒸汽回收系统就是专门采集在开采过程中容易泄漏到空气中的天然气，在此计划下，空气资源局要求每家加油站都必须安装站内诊断系统，以便在监测到有天然气泄露时发出警报。约有 12,000 家加油站要进行相关系统的安装，这令Franklin Electric(代號:FELE)大喜过望，因为Franklin Electric恰恰就是为此提供蒸汽回收系统的公司，以每家加油站18,000美元的价格向全美销售此种系统。
公司二季度的业务中约有20-30%的加油站是被强制安装此系统的，公司CEO R. Scott Trumbull表示，Franklin Electric为此提供90%以上的服务，“因此在同行中我们拥有极为强大的竞争力。”公司是全美唯一提供蒸汽回收系统的企业，除此以外，别无他家。 CEO认为公司面对目前尚未安装此系统的企业，极有把握将获得其中多数的业务。Franklin Electric的用于检测蒸汽泄露的ISD系统也获得了EVR计划的认证，公司将以9,000美元的价格进行出售。但是ISD系统的市场竞争力不及蒸汽回收系统。分析师预计这两个系统的视察过价值将达到3亿美元。
除此以外，Franklin Electric还运营着两大板块：水系统和燃料系统。水系统作为最大份额的板块，占到二季度销售额的78%，其系统产品包括潜水式抽水机和抽取地下水的发动机。多家天然气站也使用公司的燃料系统来抽取地下天然气，这种燃料系统也能够监测剩余燃料的水平，以及密闭性检查和蒸汽回收。
近年来公司业绩增长节节攀升。二季度每股收益同比大涨128%至0.66美元；销售额同比增长了32%至2.017亿美元；燃料系统销售额上升了37%，主要是受到中期挥手系统在加州和海外市场的利好业绩促动。水系统销售额上涨了31%，主要是受到全球农业板块强劲的销售促进。这些板块的利好弥补了美国房地产市场和西欧市场的疲软业绩。公司管理层表示：我们正在从困境中恢复过来——07年每股收益同比下滑44%的困境。“07年的房地产市场相当难堪。”但是公司及时转变了销售战略：开始直接向经销商出售水系统产品。同时在07年，公司还进行了两项收购交易。
但是这引起公司两大客户的不满：ITT(代號:ITT)和Pentair(代號:PNR)。三方对簿公堂，两家公司指责Franklin Electric不应该直接向经销商出售水系统产品。04年结案之后，Franklin Electric被限制将出售给ITT和Pentair的水系统产品直接出售给经销商，直到06年12月31日为止。
于是自07年开始，公司终于正式通过主要经销商出售水系统，这一政策转变开始为公司迎来了业绩大涨的利好局面。多家经销商开始抢购公司的发动机销售订单。 07年，公司发现来自ITT和Pentair的业务出现营收亏损，但是公司在经销商和收购公司方面却迎来了大涨的营收季报。公司依然在进行的抽水机业务使得公司的此项业务大有可观。今年一月份公司还收购了巴西的Industrias Schneider SA企业，这是巴西最大的一家房地产、农业和轻质商品市场的抽水机生产商。与此同时，公司还收购了南非的Pump Brands Ltd，以及加拿大的Monarch Industries。分析师表示：“我们亲眼目睹了一场由原装经销商战略向更加国际化和多元化水系统战略的转变。”
Thomson Reuters分析师预期08年每股收益将上涨68%至2.30美元，09年每股收益将上涨22% 。近期公司还开启了加州EVR转变，此举颇为紧急，分析师认为：“一旦公司在加州完成了此项转变，我们将迎来更加稳定的房地产市场。”
Investor's Business Daily
Profits Seen As California Requires Service Stations To Pony Up
Wednesday September 3, 5:52 pm ET
Marilyn Much Soon, gas stations throughout California will become a lot greener.
The California Air Resources Board's enhanced vapor recovery regulations require gas stations with underground storage tanks to upgrade their systems by April 1, 2009.
Vapor recovery systems collect gasoline vapors that would otherwise escape into the atmosphere during vehicle refueling, contributing to smog.
Under the EVR program, the board also requires stations to install in-station diagnostic systems. ISD systems monitor the performance of the vapor recovery systems and trigger an alarm when failures occur.
The ISD deadlines range from September 2009 for larger stations to September 2010 for smaller ones.
Close to 12,000 gas stations need to be retrofitted with new equipment to meet California's mandate.
Franklin Electric (NasdaqGS:FELE - News) is cashing in.
Franklin, based in Bluffton, Ind., is the top supplier of vapor recovery systems certified for the EVR program. It sells its system for about $18,000 per gas station.
Service Stations
At the end of the company's second quarter, 20% to 30% of the 11,800 filling stations affected by the mandate had bought vapor recovery systems, Chief Executive R. Scott Trumbull said on a July conference call.
And Franklin supplied more than 90% of them.
"They have a very strong competitive advantage over other players," said analyst Ned Borland of Next Generation Equity Research.
Franklin's vapor recovery system was the first certified by the state, giving it a running start.
Plus, only one other company, Vapor Systems Technologies, is an approved vapor recovery system supplier, watchers say.
Trumbull expects Franklin to grab the "vast majority" of the remaining vapor recovery installations, though its share is likely to decline from the current high level.
Franklin's ISD system for vapor monitoring is also certified for the EVR program. Franklin sells the system for about $9,000.
But Franklin is up against more competition with the ISD system than with the vapor recovery system, Borland says. And it was approved late in the game -- last December.
Borland pegs Franklin's total California market opportunity for the vapor recovery system and ISD system at about $300 million.
He expects Franklin to garner at least 50% of that total, some of which has already been realized.
Franklin runs two segments, Water Systems and Fueling Systems. Water Systems is the biggest, at 78% of second-quarter sales.
Its water system products are submersible pumps and motor assemblies that pump groundwater and wastewater for residential, agricultural and commercial purposes.
Gas stations use Franklin's fueling systems to pump gasoline up from ground levels so drivers can fill their tanks. Its fueling systems also monitor the level of fuel remaining and any issues that arise from pumping gas, such as leak detection and vapor recovery.
The company has recently enjoyed a nice growth spurt.
In the second quarter, earnings climbed 128% from a year earlier to 66 cents a share. Sales surged 32% to $201.7 million.
Fueling system sales leapt 37%, led by vapor recovery system sales in California and sales in overseas markets.
Water system sales rose 31%, driven by strong sales to the agricultural segment worldwide, higher pump sales in the U.S., and solid sales growth in developing regions. Growth in these sectors offset weak sales to the residential market in the U.S. and parts of Western Europe.
Executives weren't available for comment. The company is recovering from a tough stretch: In 2007, earnings slid 44% vs. 2006.
"The residential market was pretty bad in 2007," Borland said.
Franklin was also hurt by issues resulting from a shift in strategy that began in 2004.
Until that year, the company supplied its submersible motors and controls to original equipment makers (OEMs), mainly pump makers.
Then Franklin changed its sales policy. It began selling its water systems products directly to distributors in addition to its existing OEM customers.
Also in 2004, Franklin started building a lineup of its own pumps -- which use its motors -- through acquisitions.
The new sales approach raised the ire of its two biggest customers: ITT (NYSE:ITT - News), which makes pumps in addition to other products, and pump and pool equipment maker Pentair (NYSE:PNR - News).
In separate lawsuits, the two firms challenged Franklin's move to sell its motors directly to distributors.
In a 2004 settlement, Franklin was restricted from selling the small-horsepower motors it sells to ITT and Pentair directly to distributors until after Dec. 31, 2006.
In 2007, Franklin began selling its water system products mainly through the direct distributor route. The slowdown in Franklin's growth in 2007 had to do with OEMs' reaction to the change in policy.
Many began stockpiling the company's motors before the Jan. 1, 2007, deadline, Borland says.
Also in 2007, Franklin saw a drop in revenue from the loss of business from Pentair and ITT, according to analyst Paul Mammola of Sidoti & Co.
He says Franklin has pretty much supplemented the lost OEM revenue from Pentair and ITT with revenue it gets from distributors and from acquisitions of pump companies.
And it's gotten over its rough patch.
"It's pretty hard to ignore the results they've produced thus far in 2008," Mammola said.
Pump Business
Franklin continues to build up its pump business with buys. Most recently, in January it bought Brazil's Industrias Schneider SA for an undisclosed amount.
Schneider is the leading Brazilian producer of pumps for the residential, agricultural and light commercial markets, Franklin says.
Separately, in 2007, Franklin bought Pump Brands Ltd. of South Africa and the pump division of Canada's Monarch Industries.
"We're seeing a shift from the domestic OEM strategy to one that's more international and more diversified in terms of their water (system) strategy," said Mammola.
Analysts polled by Thomson Reuters see 2008 earnings rising 68% to $2.30 a share, then gaining 22% in 2009.
In the near term, Franklin has the California EVR conversion. Other states may adopt this stringent policy, Borland says.
"When it's done with the retrofitting in California, hopefully we'll have a more stable housing market and hopefully that will let them continue to grow earnings," he said.
At the same time, it's growing its international presence in groundwater pumps via acquisitions, he adds.
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