Thank you, Kevin, and welcome, everybody, to Franklin Electric's Fourth Quarter 2011 Earnings Conference Call. With me today are Scott Trumbull, our Chairman and CEO; and John Haines, our CFO.

On today's call, Scott will review our fourth quarter and annual business results, and John will review our fourth quarter and annual financial results. When John is through, we will have some time for questions and answers.

Before we begin, let me remind you that any forward-looking statements contained herein, including those relating to market conditions or the company's financial results, costs, expenses, expense reductions, profit margins, inventory levels, foreign currency translation rates, liquidity expectations, business goals and sales growth involve risks and uncertainties. These risks and uncertainties include, but are not limited to, general economic and currency conditions, various conditions specific to the company's business and industry, new housing starts, weather conditions, market demand, competitive factors, changes in distribution channels, supply constraints, effect of price increases, raw material costs, technology factors, integration of acquisitions, litigation, government and regulatory action, the company's accounting policies and future trends and other risks, which are detailed in the company's SEC filings and are included in Item 1A of Part 1 of the company's annual report on Form 10-K for the fiscal year ending January 1, 2011.

Exhibit 99.1 attached there, too and in Item 1A of Part 2 of the company's quarterly reports on Form 10-Q.

These risks and uncertainties may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements made herein are based on information currently available, and except as required by law, the company assumes no obligation to update any forward-looking statements.

I will now turn the call over to our Chairman and CEO, Scott.

Thank you, Patrick, and good morning. The fourth quarter provided a solid ending to an outstanding year for Franklin Electric.

During the quarter our earnings per share increased by 47% and by 35% after adjusting prior year's EPS for some unusual items.

Our fueling team led the way in terms of earnings improvement during the fourth quarter. Fueling sales represented about 23% of our total company sales and increased by 11%.

And adjusted fueling operating income grew by 80%.

Our fueling team has done a masterful job integrating the PetroTechnik acquisition. When we acquired PetroTechnik, their operating income margin was about 1/2 the margin level in our existing fueling business.

As a result, when we consolidated PetroTechnik, our overall fueling operating income margin fell from its traditional level of about 19% to about 14%. Since then our margins have steadily recovered as the fueling team has achieved their synergy targets.

During the fourth quarter 2011, adjusted fueling margins were 21%, about 800 basis points higher than the prior year and better than our typical pre-acquisition level. In addition, sales of our fuel pumping systems and fuel management system product lines were particularly strong during the quarter.

During the fourth quarter, our water system sales increased by 6%, and our operating income grew by 4.5%. Our fourth quarter Water Systems business was characterized by strong results in the Americas, which more than offset weaker results in Europe, the Middle East and North Africa.

During the fourth quarter, our Water Systems sales in North and South America represented about 50% of our consolidated sales and grew organically by 9%.

Throughout 2011, our year-over-year sales of pumping systems for irrigation and industrial applications grew by about 25% in North and South America. And they continue to increasing at this pace in the fourth quarter.

We believe that our irrigation and industrial sales growth can be attributed to a combination of favorable weather conditions in North America, strong crop prices and market share gains.

In the fourth quarter, we also achieved double-digit sales growth for residential and light commercial groundwater and wastewater pumping systems in the Americas. Primarily, due to strong replacement demand for these products in the U.S.

and Canada.

Product margins in the Americas grew in spite of significant increases in raw material costs experienced throughout 2011. As our sales have continued to grow, our Americas Water Systems management team has done a good job of achieving operating leverage on these sales by driving down their converting cost from the factory floor and holding the line on fixed spending increases.

Our water sales in EMENA, which is Europe, the Middle East and North Africa, represented about 14% of our consolidated sales and increased by 13% during the quarter. However, our EMENA sales declined by 6% when you remove the impact of the Impo acquisition and foreign exchange fluctuations.

first, we experienced more rapid raw material inflation in our European factories than in our North American plants. This is partially explained as raw material inflation in North America was offset by hedging certain raw materials with forward purchase strategies that we have only recently been able to implement with our suppliers in Europe.

In addition, we have favorable fixed price contracts with raw material suppliers in Europe, which expired midyear. And when these contracts expired, several of our European suppliers implemented catch-up price increases.

As a result, our fourth quarter raw material costs as a percentage of sales in Europe increased by 410 basis points compared to the fourth quarter 2010.

Second, our sales growth in EMENA was curtailed by weak economic conditions in Europe and political turmoil in portions of the Middle East and North Africa. So we were unable to generate operating leverage on revenue to offset the lower contribution margin caused by the higher raw material costs.

We are increasing prices in EMENA during the first quarter. We believe this price action combined with easier year-over-year raw material cost comparisons should enable us to close the margin gap in EMENA during the second quarter of this year.

Overall, 2011 was an outstanding year of accomplishment for Franklin people worldwide. Financially, we achieved record sales and earnings.

Our consolidated sales increased by 15%, our adjusted EPS increased by 42%, our year-over-year margins improved each quarter. We continue to invest in our future by increasing our RD&E spending by 23% during the year.

Our balance sheet remains strong, and we were able to increase our dividend payment for the 18th consecutive year.

While these financial achievements are satisfying, we were particularly pleased to have made significant progress on several of our key strategic goals during 2011. We continue to increase our sales base in high-growth developing regions.

Our developing regions sales growth -- sales grew by 18% in 2011 and now represents 36% of our consolidated sales. During the year, we completed the Impo acquisition, which gives us the leading position in the large and growing Turkish market and a low-cost base for growing throughout the region.

We furthered our quest to continue improving our quality and cost position as we consolidated more of our production into our world class Linares, Mexico production complex, and we laid the groundwork for the construction of a new manufacturing facility in Brazil.

We continued to gain share in the North American water systems pump market. We've only been in the North American groundwater pump market for 6 years, and we've already achieved the leading position.

But we still have great headroom for growth as we convert more and more contractors to installing the Franklin brand as we expand our product line.

a system to dewater oil and gas wells and a solar-powered water well system. We plan to launch these products commercially later this year.

While 2011 was a great year, it is behind us, and we are fully engaged to pursuing the opportunities and challenges that are confronting us in 2012. As we looked to the first quarter, we're expecting our global water system sales to increase by 6% to 8%, despite our assumption that foreign exchange effects will reduce our global water sales by 2% to 4%.

We believe that our first quarter water systems sales growth will be led by increases in the U.S. and Canada and the Asia-Pacific regions.

We're currently implementing price increases across most of our global water systems product line. And while these increases will not be fully effective until the beginning of the second quarter, we are anticipating that water operating income will increase by 11% to 14% compared to the first quarter of 2011.

The first quarter is seasonally the slowest for our global fueling business, and sales levels are difficult to predict because they depend upon whether our distributors start stocking up for the summer construction season in March or during the second quarter. At this point, we believe our first quarter fueling sales will grow by 3% to 6%, and we believe that fueling operating income will grow at a similar pace.

We expect foreign exchange translation impacts will reduce fueling sales and operating income growth by about 2%. We're also increasing prices across most of our global fueling product lines during the first quarter.

Overall, we're expecting our consolidated earnings per share to increase by 10% to 13% compared to the first quarter 2011.

Now, I'll turn the call over to John Haines, our CFO, who'll provide some additional information regarding our financial performance.

Thank you, Scott, and good morning. Our fully diluted earnings per share were $0.50 for the fourth quarter 2011, an increase of 47% compared to the 2010 fourth quarter fully diluted earnings per share of $0.34.

As we note in the tables in the earnings release, there were non-GAAP adjustments in the fourth quarter of 2011 and 2010 that impacted operating income, or EPS, that were not operational in nature. We believe presenting these matters in this way gives our investors a more accurate picture of the actual performance, operational performance of the company.

In the fourth quarter of 2011, there were no non-GAAP adjustments impacting EPS, therefore the EPS of $0.50 is the same as the fully diluted EPS. In the fourth quarter of 2010, non-GAAP adjustments impacted EPS by $0.03 and our adjusted EPS after these non-GAAP adjustments was $0.37 versus the reported $0.34.

For the full year 2011, fully diluted EPS was $2.65, an increase of 61% versus the fully diluted EPS of $1.65 in 2010. After adjusting EPS for non-GAAP items in both years, the 2011 adjusted EPS was $2.70, an increase of 42% versus the adjusted 2010 EPS of $1.90.

Fourth quarter 2011 sales were $187.2 million, an increase of 7% compared to the 2010 fourth quarter sales of $175 million. Full year 2011 sales were $821.1 million and were $107.3 million or 15% higher than full year 2010 sales.

2011 full year organic growth was 9%. Foreign currency translations increased 2011 sales by $18.8 million or about 3%.

Water systems sales were $143.9 million in the fourth quarter 2011, an increase of 6% versus the fourth quarter 2010, the Impo acquisition completed in the second quarter of 2011 contributed $4.9 million or about 4% to sales. Excluding acquisitions, water systems sales grew by 2%.

Foreign currency translation rate changes decreased sales by $3.2 million or about 2% compared to sales in the fourth quarter of 2010.

The U.S. dollar strengthened against many international currencies in the quarter, including the Euro, Brazilian Real and South African Rand.

As Scott indicated, sales growth in the fourth quarter was led by the U.S. and Canada, where demand for industrial and irrigation pumping systems remained robust and in Asia Pacific, which experienced strong broad-based growth in Australia, Japan, Taiwan and South Korea.

Water systems operating income after non-GAAP adjustments was $18.6 million in the fourth quarter 2011, an increase of 4.5% versus the fourth quarter 2010. The fourth quarter operating income margin after non-GAAP adjustments was 12.9% and decreased by 20 basis points compared to 13.1% in the fourth quarter of 2010.

This decrease was primarily the result of higher raw material cost.

Fueling system sales were $43.3 million in the fourth quarter 2011. It increased $4.4 million or about 11% from the fourth quarter 2010.

All of the Fueling Systems sales in the quarter were organic with the most significant sales increases occurring in the United States, Latin America and China. Sales of fuel management and pipe and containment systems increased by over 20% in the fourth quarter.

Fueling Systems operating income after non-GAAP adjustments was $9.2 million in the fourth quarter of 2011 compared to $5.1 million after non-GAAP adjustments in the fourth quarter of 2010, an increase of 80%. The fourth quarter operating income margin after non-GAAP adjustments was 21.2% and increased by 810 basis points, compared to the 13.1% of net sales in the fourth quarter 2010.

Operating income improvements in Fueling Systems were driven -- were primarily driven by higher sales volume, favorable mix and lower selling, general and administrative expenses. The company's consolidated gross profit was $60.9 million in the fourth quarter of 2011, an increase of $5.3 million or about 10% from the fourth quarter of 2010 and a record for any fourth quarter in the company's history.

The gross profit, as a percent of net sales, increased to 32.5% for the fourth quarter of 2011 from 31.7% for the fourth quarter of 2010. Gross profit margin improvement was due to leveraging fixed costs on higher sales offsetting higher material cost.

SG&A expenses were $44.4 million in the fourth quarter of 2011 compared to the $42.3 million from the fourth quarter of 2010, an increase of $2.1 million or about 5%. In the fourth quarter of 2011, increases in SG&A attributable to acquisitions were $1 million.

Additional increases in SG&A costs during the fourth quarter of 2011 resulted from increased cost from marketing and selling-related expenses and increased information technology-related expenditures for acquisition integrations.

The effective tax rate for 2011 was about 27%, which the company believes is also reasonable estimate for 2012. The projected tax rate is lower than the 2010 tax rate before discrete events of about 30% and a statutory rate of 35%, primarily due to the indefinite reinvestment of forward earnings and reduced taxes on forward and repatriated earnings after the restructuring of certain foreign entities.

The company has the ability to indefinitely reinvest these foreign earnings based on the earnings and cash projections of its other operations' current cash on hand and available credit.

At the end of 2011, the company's cash balance was $153.3 million, which was $13.3 million higher than the end of 2010. The company generated about $100 million in net cash flows from operating activities in 2011 versus about $95 million in 2010.

Major uses of cash during 2011 included acquisitions and additional consideration for prior acquisitions of $40 million, additions to property, plant and equipment of $21.8 million, stock repurchases of $13.9 million and dividends of $12.9 million.

During the fourth quarter of 2011, the company substantially completed the purchase of the remaining 25% of the outstanding shares of Vertical S.p.A, an Italian pump and component manufacturer for $7.1 million. The company had previously purchased 75% of the company in the first quarter 2009.

1 and an interest coverage ratio equal to or greater than 3:1. The company had no outstanding balance on its revolving debt agreements at the end of 2011 or 2010.

This concludes our prepared remarks, and we'd now like to open the call up for questions.

Just a couple of questions here. With regards to Impo, it looked like, unless I'm mistaken that, that business contributed roughly $10 million in sales to your Q3, roughly $5 million in Q4.

Why would that business have experienced that kind of sequential decline? And is that normal?

Should we think about that going forward?

Matt, I think the Q3 number is high. Impo's Q4, it's a North American Water Systems business, so they do have some seasonality.

But their sales in the fourth quarter were -- the fourth quarter sales for Impo consistent with the seasonal pattern of the third quarter.

Yes, it's mainly seasonality, Matt. The third quarter sales were significantly higher, about $9.8 million.

Their fourth quarter sales were right around $5 million. And as Scott's saying, it's entirely due to seasonal nature of their business.

Okay, and then can we walk through your raw material versus pricing dynamics again in Europe? I want to make sure I'm clear.

It sounds like right now, you have about a 4 percentage point kind of gap you need to close and how around the timing and which that actually gets shut. And are these contracts you have with your suppliers here, and if so, when did those get renegotiated?

Can you just kind of walk through what happened there in more detail?

Okay. In the raw material costs as a percentage of sales in the fourth quarter in EMENA was higher by 410 basis points than it was in the prior year.

A significant part of that had to do -- or a part of it had to do with the timing of the run-off of fixed price contracts that we had with suppliers. And when those fixed price contracts ended, then our -- several of the suppliers brought their prices back up to the market level.

So we had a fairly, kind of fairly significant run-up in prices. And those prices then take 4 months or so to finally start showing up -- 4, 5 months in some instances to start going through cost of goods sold.

And so the kind of peak impact of the higher cost materials year-on-year, we think is kind of flowing through in the fourth quarter and early in the first quarter of this year. And that the comparisons, as we look at what happened to raw material costs as a percentage of sales, as we go into the second quarter, the raw material costs as a percentage of sales in EMENA was higher in the second quarter than it was in the fourth quarter and in the first quarter, and that therefore, the comparison it looks like it's going to get easier.

And we're getting 3% to 4% price increases across much of our European business. That will start kicking in, in the second quarter.

The price increases are being implemented during the first quarter of this year. So we think the combination of the fact that prior year raw material cost, as a percentage of sales, are higher in the second quarter than they were in these last 120 days or so.

And the fact that we'll have the benefit of a price increase, that will largely close this 410 basis point gap that we have in the fourth quarter of this year.

Got it. And then with regards to your Southern Hemisphere business, which is currently...

Just a little more color on it. Our business is influenced so heavily by operating leverage with contribution margins in the roughly mid-40s.

If our volume is solid, then our operating income margin, with that formula that I described, higher raw material costs plus price, plus volume will have higher margins. I think that the key variable will be what happens to the volume in the EMENA region.

Got it. With regards to your Southern Hemisphere business, can you compare, kind of, what you're seeing this season, if you will, versus last season?

And how your comps there look?

We think Latin America is, exclusive of foreign currency effects, going to grow at a double-digit pace again this year. Our business in Brazil looks solid, our business in elsewhere, and the southern cone looks very solid.

We think that our distributors are optimistic with another good year in Mexico. So we think Latin America looks like it's in pretty good shape from a demand perspective and the issue will be what happens to the currencies.

In the fourth quarter, our sales in Brazil were impacted by about 8% due to foreign currency translation effects due to the stronger dollar relative to the Real.

And then what about Southern Africa, Australia, some of the other markets?

Australia looks very strong. It's coming out of a period where, while we benefited from both Australia and Southern Africa in both of those markets, while we benefited by -- from weather conditions in especially the U.S.

and Canada, dry weather leading to unusually heavy industrial and irrigation sales force . Our sales in Australia and Southern Africa have been negatively impacted during most of the season this year by relatively wet weather conditions.

It -- recently, that started to change, so we're optimistic that we're going to have -- the weather is going to be our friend instead of our enemy in those markets this year. And we're optimistic that we're going to have a pretty solid sales performance, especially in Australia.

Last question, Scott. On, what would your assessment be of channel inventories in North America.

Was there any sort of stock-up or prebuy ahead of this price increases, and then your level of confidence in Franklin's ability against increasingly tough comps to grow the Ag piece of the business this year?

Well, the Ag business -- our Ag business last year was up 25% in the U.S. and Canada.

That business grew for 3 reasons: one is that the weather conditions were favorable and when weather is dry, then people are running their systems harder and there's a larger replacement demand. The second was more macroeconomic factors that impacted the farm economy.

The demand for food and the higher prices of grains, typically, resulted in farmers being willing to invest more heavily. Now, the weather we don't know.

And then the third is we gained share. There's no question in our mind that we gained share last year.

And I think that there are distributors, who are right there with the farmers in their local communities, are optimistic that there will continue to be pretty strong investment in order to improve yields, in order to get more crops out this year. And that we believe that the shared gains we got last year are going to stay with us.

And so at least 2 of the 3 were fairly confident that we'll continue to see strong demand, will benefit from strong demand on those fronts. And the issue of the weather is pretty difficult to predict that.

But I think that, Mike, we're going to see another strong, industrial -- or excuse me, Matt, we're going to see another strong agricultural and industrial year for us. We're certainly not predicting another 25% growth, but we think it should be pretty solid.

And we've seen -- we've continued to see pretty good growth in our residential business and our wastewater business. The U.S./Canada market is pretty solid right now.

Not just in I&I, but in the residential and light commercial water and wastewater product lines, as well.

And then, Scott, your assessment of channel inventories, please?

Mike, I don't -- we're getting no indication from our distributors that they are stocking up. At the end of the year -- most all of our distributors last year had a really good year.

And at the end of the year, they did not have to stretch in order to hit sales targets. And so they didn't, and if anything, they deferred purchases because each year, we kind of ratchet up the targets.

And so they didn't want to add to their sales at the end of the year. So there was no real, from our distributor base, no real inventory build or incentive for inventory build at the end of the year.

And we're not seeing that they're building inventories at this stage other than the normal seasonal pattern. They normally build either in March or April for the upcoming construction season just to prepare for the season.

So other than the normal inventory build that we see every year, we're not -- we don't think that channel is overloaded at all.

So, if you look at the water margins, it sounds like all the pressure was really because of the European, North Africa region. A little color on the North America margin, it sounds like those are progressing pretty well.

Are you still seeing any sort of mix impact that you think is maybe a little bit above norm? It didn't sound like from your Ag outlook commentary there.

And then just any more color on how you think those margins in North America look now and progression from here? Qualitatively, that is.

Okay. The North American business has grown nicely this year.

And again -- and we've done our -- the management team there because we've been consolidating facilities, we moved Oklahoma City into Linares over the course of the year. And as we have consolidated down to a smaller and smaller manufacturing number of facilities in North America, we are able to take out of good bit of fixed costs.

So our -- even though we increased our RD&E spending and some of our sales spending, our overall fixed cost base in our North American operations was relatively flat last year. And so when we get sales growth, a lot of that incremental contribution margin goes straight to the bottom line.

And that, I would say, that dynamic, more than mix, has accounted for the margin improvement that we've seen in our U.S./Canada Water Systems business over the last year. Having said that, a portion of it is also because the Irrigation and Industrial business tends to be modestly more profitable than our Residential and Light Commercial business.

And so our most rapidly growing end use was also one of our higher profitability end uses. But I think the primary driver of margin improvement has been operating leverage, and we believe that we're going to be successful at holding the line on fixed cost increases well below the rate of increase of sales in North America, and that we'll continue to see operating leverage generated, margin improvements in that business.

That then makes sense. And then on the North America market, in general, talk about the AG side already.

Maybe you could give a little thought on what's underpinning your 2012 expectations on that side? If you're starting to see something beyond the replacement demand side, a little color would be great.

Okay, you're talking about on the residential side.

Residential, light, commercial.

Okay, we're benefiting by a modest uptick in new housing starts. I mean we're coming off the bottom and some of our products that are really new home construction-related products are starting to pick up a little bit.

But I think 80% of our demand on the residential, light, commercial side or more is still replacement demand for residential or light commercial water well systems or residential-like sub-sewage and effluent pumping systems. So I would say replacement continues to be the vast majority of our shipments on that side of the business.

And you expect that to change, not drastically obviously because replacements' always going to be the bulk of mindshare, which you guys are pushing through. But are you expecting that to shift a little bit more in 2012?

How healthy of a backdrop are you looking at for residential?

We really aren't expecting at the shift very much in 2012.

Okay, that makes sense. And then as far as the new product introductions go, could you talk a little bit more about the prepackaged system solutions you're putting in the marketplace?

Specific end markets geographies that you're pushing through, and then what makes it unique relative to what the marketplace is selling right now?

Okay, we have 2 systems that we're introducing, both are in beta test and will be until the third quarter. These pumping systems, particularly that involve water and water well, we don't like to introduce them until we've done very extensive life testing of these systems.

And so the 2 systems that we're excited about right now are number 1, a system for dewatering oil and gas wells. The technology for extracting oil and gas, not always, but frequently involves removing groundwater from the well site, relieving pressure in the formation and allowing gas to flow to the surface or removing water that contains oil mixed with it from the ground, putting it in some storage system and letting the gas and oil separate, the oil is stripped off and the gas is reinjected or the water is reinjected.

And so we -- there are literally hundreds of thousands of wells that are really operating to extract natural gas and oil that are really, just really deepwater wells. And up to now, our company has not focused on operating at those depths.

So our systems are really designed for extracting water for irrigation or personal consumption or industrial uses and typically go down to no more than 500 to 1,000 feet, where the depths for -- that we need to go to for the oil and gas market is frequently 1,000 meters or more. So what we have -- what we found is that the systems that are being used at those depths are very expensive and are subject to replacement frequently on a 1 to 2-year cycle.

And we were convinced that we could develop a system for extracting water at those depths that would have the same kind of reliability that we have in our traditional systems. It's certainly more reliable than what is out there now in terms of – mean time between failure and would also be available at a much lower cost.

And so, we have developed a system that uses the progressive cavity pump technologies that we employ in Africa, which are a progressive cavity pump can handle great, great pressure. In other words, great depth at relatively low flow rates.

So we've combined successfully a progressive cavity pump with a beefed-up Franklin motor, and this is the system that we're -- and Franklin drive and control technology. And we believe that this system will be very attractive to many oil and gas companies because we believe that with the results of our testing and the evidence that we'll be able to present, we'll be able to demonstrate that these are robust systems that are going to be available at a very competitive cost.

So we're excited about that prospect of building a meaningful market in the oil patch with this product line. We have about -- we have a number of these systems installed in North America and in Africa now.

We will have them in the next 60 days in beta test in Australia as well. Well, there is a very large investment plan on the part of a number of large oil and gas companies for the extraction of coalbed methane using this technology.

So we're happy with the way the beta tests are working out, and we think we really got something. In addition, on the solar side, there are a lot of places in the world where water is required, but electricity is not available.

And a lot of it is in agricultural or ranch settings. Some of it's at mining sites, and some are just rural villages.

And these water systems with no electricity are being run on diesel generators. And they work, but you got to keep going out to these very remote locations to replace -- to refill the generators.

And that adds cost, and it frequently results in running out of water. And on the other hand, if there was a reliable and very robust solar pumping system, it can solve that problem.

And with -- combined with a monitoring system, they could just monitor the water level in whatever storage facility they're working from and make sure the system is still running. And so the main advantage -- there are these types of systems out there now.

The main advantage is that the system we've designed is got Franklin durability built in. The environmental conditions in these places is very difficult, and the system that we've designed is -- the differentiating factor will be its robustness that it can be installed.

It can withstand the most difficult environmental conditions and keep operating effectively. And we've compared ourselves to the other systems that are out there, we feel that, that's a -- that will be a major consideration in the minds of our customers.

Again, this product is in field trials in Africa and in Australia. And we've been happy with the results, and we would expect in late in the third quarter to introduce that commercially as well.

Well, Kevin, thank you and thank everybody else. Appreciate your time today.

Ladies and gentlemen, this does concludes today's presentation. You may now disconnect, and have a wonderful day.