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2025-04-29
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8-K
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2.02
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. Results of Operations and Financial Condition On April 29, 2025, A. O. Smith Corporation (“the Company”) issued a news release announcing the Company’s results for the quarter ended March 31, 2025. A copy of the Company’s news release is attached as Exhibit 99.1 to this Current Report on Form 8-K (this “Current Report”) and is incorporated by reference herein.
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AOS
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2025-04-29
| 91,142
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99.1
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99.1
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EX-99.1 2 a3312025exhibit991.htm EX-99.1 Document Exhibit 99.1 Media Relations: Curt Selby 414-359-4191 [email protected] Investor Relations: Helen Gurholt 414-359-4157 [email protected] FOR IMMEDIATE RELEASE April 29, 2025 A. O. Smith Reports First Quarter Sales of $964 million and Earnings Per Share (EPS) of $0.95 First Quarter 2025 Highlights (Comparisons are year-over-year (“YoY”), unless otherwise noted) • Sales of $964 million, a decrease of 2% primarily due to lower water heater volumes in North America and lower sales in China • North America sales decreased 2% against a difficult comparison. Sequential quarter-over-quarter improvement in segment sales was 9% • Net earnings were $136.6 million and diluted EPS decreased 5% to $0.95 • Rest of World operating margin improved 110 basis points on flat sales led by China operating margin expansion of 200 basis points • Repurchased $121 million of shares and reaffirmed expected full year repurchases of $400 million • 2025 Outlook maintained at: ◦ Consolidated sales to be flat to up 2% ◦ Diluted EPS with a range of $3.60 to $3.90 Milwaukee, Wis.— Global water technology company A. O. Smith Corporation (“the Company”) (NYSE: AOS) today announced its first quarter 2025 results. Key Financial Metrics First Quarter (in millions, except per share amounts) Q1 2025 Q1 2024 % Change YoY Net sales $963.9 $978.8 -2% Net earnings $136.6 $147.6 -7% Diluted earnings per share $0.95 $1.00 -5% “I am pleased with the positive momentum from the sequential quarter-over-quarter growth we delivered in our North America water heater volumes. As expected, those volumes were lower year-over-year as the industry returned to a more normal cadence and we focused on running our plants efficiently. North America boiler sales increased 10% as our high-efficiency products continued to perform well in the market,” noted Kevin J. Wheeler, chairman and chief executive officer. “In China, continued economic challenges and soft consumer demand led to a 4% year-over-year decrease in local currency sales. However, we achieved a 200-basis point expansion in China margin compared to last year due to continued cost-saving efforts and benefits from our 2024 restructuring actions. Additionally, the Pureit acquisition contributed $12 million to sales in the quarter and integration is on track.” Segment-level Performance North America First quarter sales of $748.7 million decreased 2% compared to a challenging prior year comparison as higher boiler sales were offset by lower water heater volumes. The first quarter of 2024 benefited from pre-buy-related volumes ahead of an announced price increase. Segment earnings were $185.2 million, and segment margin was 24.7% in the first quarter of 2025 compared to segment earnings of $198.7 million and segment margin of 25.9% in the first quarter of 2024. The lower year-over-year segment earnings and segment margin were primarily due to higher boiler sales, which were more than offset by lower water heater volumes, lower volume related absorption and continued strategic investments including tankless. Rest of World Rest of World sales of $226.7 million were essentially flat to last year. China sales decreased 4% in local currency in the first quarter primarily due to lower volumes of water treatment and gas water heater products. Pureit contributed $12 million to sales in the first quarter of 2025. Segment earnings were $19.7 million, and segment margin was 8.7% in the first quarter of 2025 compared to segment earnings of $17.2 million and segment margin of 7.6% in the same period last year. The higher segment earnings and segment margin in 2025 compared to last year were primarily driven by cost reduction actions, which more than offset lower volumes in China. Balance Sheet, Liquidity and Capital Allocation As of March 31, 2025, cash and marketable securities balances totaled $200.2 million and debt totaled $269.8 million, resulting in a leverage ratio of 12.7% as measured by total debt-to-total capitalization. Cash provided by operations was $38.7 million and free cash flow was $17.4 million in the first three months of 2025. Both decreased compared to 2024, primarily due to lower accounts receivable collections which resulted from lower prior quarter sales as well as lower current quarter earnings. As part of its commitment to return capital to shareholders, the Company repurchased 1.8 million shares at a cost of $120.6 million in the first three months of 2025. As of March 31, 2025, authority remained to repurchase approximately 5 million additional shares. The Company expects to spend approximately $400 million to repurchase shares in 2025. On April 7, 2025, the Company’s board of directors approved a $0.34 per share dividend for shareholders of record on April 30, payable on May 15. Outlook 2025 Outlook (in millions, except per share amounts) 2024 2025 Outlook Actual Low End High End Net sales $3,818 $3,800 $3,900 Diluted earnings per share $3.63 $3.60 $3.90 Adjusted earnings per share $3.73 1 $3.60 $3.90 1 Excludes restructuring and impairment expenses. See accompanying GAAP to Non-GAAP reconciliations “We maintain our full-year sales and EPS guidance. Given the uncertainty of the tariff environment, our guidance does not include our announced pricing, which we project will offset, along with other actions, the current announced tariffs. In addition to pricing, our other actions include footprint optimization, strategic sourcing actions and other cost containment initiatives. In North America, we expect water heater industry unit volumes to be flat year-over-year with less first half versus second half volatility compared to 2024, as we focus on plant operating efficiency and order management related to our announced price increases. In our Rest of World segment, we continue to expect a single-digit sales decline in China as consumer demand remains low,” stated Steve Shafer, president and chief operating officer. “Our stable replacement demand in water heaters and boilers, as well as our strong balance sheet and free cash flow continue to provide us the liquidity to focus on our capital allocation priorities and drive profitable growth.” The Company’s guidance excludes the potential impacts from future acquisitions. A. O. Smith will host a webcasted conference call at 10:00 a.m. (Eastern Daylight Time) today. The call can be heard live on the Company’s website. An audio replay of the call will be available on the Company’s website after the live event. To access the archived audio replay, go to the “Investors” page and select the First Quarter 2025 Earnings Call link. To provide improved transparency into the operating results of its business, the Company is providing non-GAAP measures. Free cash flow is defined as cash provided by operations less capital expenditures. Adjusted earnings, adjusted EPS, adjusted segment earnings and adjusted corporate expenses exclude the impact of restructuring and impairment charges. Reconciliations from GAAP measures to non-GAAP measures are provided in the financial information included in this news release. Forward-looking Statements This release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “continue,” “guidance,” “outlook” or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: negative impact to the Company’s businesses from international tariffs, including any new or increased tariffs that could also trigger retaliatory responses from other countries, as well as trade disputes and geopolitical differences, including the conflicts in Ukraine and the Middle East; further softening in U.S. residential and commercial water heater demand; negative impacts to the Company, particularly the demand for its products, resulting from global inflationary pressures or a potential recession in one or more of the markets in which the Company participates; the Company’s ability to continue to obtain commodities, components, parts and accessories on a timely basis through its supply chain and at expected costs; negative impacts to demand for the Company’s products, particularly commercial products, as a result of changes in commercial property usage that followed the COVID-19 pandemic; further weakening in North American residential or commercial construction or instability in the Company’s replacement markets; inability of the Company to implement or maintain pricing actions; inconsistent recovery of the Chinese economy or a further decline in the growth rate of consumer spending or housing sales in China; the availability, timing or effects of China stimulus programs; potential weakening in the high-efficiency gas boiler segment in the U.S.; substantial defaults in payment by, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; foreign currency fluctuations; the Company’s inability to successfully integrate or achieve its strategic objectives resulting from acquisitions; failure to realize the expected benefits of acquisitions or expected synergies; failure to realize the expected benefits, timing and extent of regulatory changes; competitive pressures on the Company’s businesses, including new technologies and new competitors; the impact of potential information technology or data security breaches; negative impact of changes in government regulations or regulatory requirements; the inability to respond to secular trends toward decarbonization and energy efficiency; and adverse developments in general economic, political and business conditions in key regions of the world. Additional factors are discussed in the Company’s filings with Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, quarterly reports on Form 10-Q and current reports on Form 8-K. Forward-looking statements included in this news release are made only as of the date of this release, and the Company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the Company, or persons acting on its behalf, are qualified entirely by these cautionary statements. About A. O. Smith A. O. Smith Corporation, with headquarters in Milwaukee, Wisconsin, is a global leader applying innovative technology and energy-efficient solutions to products manufactured and marketed worldwide. Listed on the New York Stock Exchange (NYSE: AOS), the Company is one of the world’s leading manufacturers of residential and commercial water heating equipment and boilers, as well as a manufacturer of water treatment products. For more information, visit www.aosmith.com . SOURCE: A. O. Smith Corporation ### A. O. SMITH CORPORATION Condensed Consolidated Statement of Earnings (dollars in millions, except share data) (unaudited) Three Months Ended March 31, 2025 2024 Net sales $ 963.9 $ 978.8 Cost of products sold 588.5 594.1 Gross profit 375.4 384.7 Selling, general and administrative expenses 192.6 192.2 Interest expense 2.9 1.0 Other income, net (1.2) (1.2) Earnings before provision for income taxes 181.1 192.7 Provision for income taxes 44.5 45.1 Net earnings $ 136.6 $ 147.6 Diluted earnings per share of common stock $ 0.95 $ 1.00 Average common shares outstanding (000’s omitted) 144,408 148,297 A. O. SMITH CORPORATION Condensed Consolidated Balance Sheet (dollars in millions) (Unaudited) March 31, 2025 December 31, 2024 ASSETS: Cash and cash equivalents $ 173.0 $ 239.6 Marketable securities 27.2 36.5 Receivables 641.5 541.4 Inventories 532.6 532.1 Other current assets 47.8 43.3 Total Current Assets 1,422.1 1,392.9 Net property, plant and equipment 634.4 628.7 Goodwill and other intangibles 1,081.0 1,082.8 Operating lease assets 34.6 32.8 Other assets 95.6 102.8 Total Assets $ 3,267.7 $ 3,240.0 LIABILITIES AND STOCKHOLDERS’ EQUITY: Trade payables $ 541.0 $ 588.7 Accrued payroll and benefits 62.7 78.5 Accrued liabilities 198.6 153.0 Product warranties 69.8 67.0 Debt due within one year 10.0 10.0 Total Current Liabilities 882.1 897.2 Long-term debt 259.8 183.2 Operating lease liabilities 25.2 23.5 Other liabilities 245.5 252.6 Stockholders’ equity 1,855.1 1,883.5 Total Liabilities and Stockholders’ Equity $ 3,267.7 $ 3,240.0 A. O. SMITH CORPORATION Condensed Consolidated Statement of Cash Flows (dollars in millions) (unaudited) Three Months Ended March 31, 2025 2024 Operating Activities Net earnings $ 136.6 $ 147.6 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation & amortization 20.7 19.6 Stock based compensation expense 6.1 8.3 Deferred income taxes (5.0) 2.9 Net changes in operating assets and liabilities: Current assets and liabilities (125.3) (73.7) Noncurrent assets and liabilities 5.6 1.9 Cash Provided by Operating Activities 38.7 106.6 Investing Activities Capital expenditures (21.3) (22.0) Acquisitions — (21.1) Investment in marketable securities (22.6) (48.1) Net proceeds from sale of marketable securities 33.1 20.0 Cash Used in Investing Activities (10.8) (71.2) Financing Activities Long-term debt incurred (repaid) 76.5 (6.8) Common stock repurchases (120.6) (74.5) Net (payments) proceeds from stock option activity (1.8) 8.0 Dividends paid (49.2) (47.3) Cash Used in Financing Activities (95.1) (120.6) Effect of exchange rate changes on cash and cash equivalents 0.6 (3.1) Net decrease in cash and cash equivalents (66.6) (88.3) Cash and cash equivalents - beginning of period 239.6 339.9 Cash and Cash Equivalents - End of Period $ 173.0 $ 251.6 A. O. SMITH CORPORATION Business Segments (dollars in millions) (unaudited) Three Months Ended March 31, 2025 2024 Net sales North America $ 748.7 $ 766.3 Rest of World 226.7 226.9 Inter-segment sales (11.5) (14.4) $ 963.9 $ 978.8 Earnings North America $ 185.2 $ 198.7 Rest of World 19.7 17.2 Inter-segment earnings elimination — (0.3) 204.9 215.6 Corporate expense (20.9) (21.9) Interest expense (2.9) (1.0) Earnings before income taxes 181.1 192.7 Provision for incomes taxes 44.5 45.1 Net earnings $ 136.6 $ 147.6 A. O. SMITH CORPORATION Free Cash Flow (dollars in millions) (unaudited) The following is a reconciliation of reported cash flow from operating activities to free cash flow (non-GAAP): Three Months Ended March 31, 2025 2024 Cash provided by operating activities (GAAP) $ 38.7 $ 106.6 Less: Capital expenditures (21.3) (22.0) Free cash flow (non-GAAP) $ 17.4 $ 84.6 A. O. SMITH CORPORATION 2025 EPS Guidance and 2024 Adjusted EPS (unaudited) The following is a reconciliation of diluted EPS to adjusted EPS (non-GAAP) (all items are net of tax): 2025 Guidance 2024 Diluted EPS (GAAP) $ 3.60-3.90 $ 3.63 Restructuring and impairment expense — 0.10 (1) Adjusted EPS (non-GAAP) $ 3.60-3.90 $ 3.73 (1) Includes pre-tax restructuring and impairment expenses of $11.3 million and $6.3 million, within the Rest of World segment and North America segment, respectively.
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AOS
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2025-04-29
| 91,142
|
8-K
|
9.01
|
Financial Statements and Exhibits The following exhibit is being filed herewith: (99 .1) News Release of A. O. Smith Corporation, dated A pril 2 9 , 202 5 104 Cover Page Interactive Data File (embedded with the Inline XBRL document) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. A. O. SMITH CORPORATION Date: April 29, 2025 By: /s/James F. Stern James F. Stern Executive Vice President, General Counsel and Secretary
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AOS
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2025-04-25
| 91,142
|
8-K
|
5.02
|
. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. On April 25, 2025, A. O. Smith Corporation (the “ Company ” ) announced that Kevin J. Wheeler will be transitioning from Chairman and Chief Executive Officer of the Company to Executive Chairman, effective July 1, 2025. As a result, Stephen M. Shafer, the Company ’ s President and Chief Operating Officer, has been elected Chief Executive Officer of the Company effective July 1, 2025, in addition to serving in his capacity as President. Mr. Shafer has also been elected to the Board of Directors effective July 1, 2025. Mr. Shafer will not serve on any committees of the Board. Mr. Shafer, age 50, was named President and Chief Operating Officer on March 18, 2024. Prior to becoming President and Chief Operating Officer, Mr. Shafer was president of the Automotive and Aerospace Solutions Division for 3M Company, a diversified global manufacturer, technology innovator and marketer of a wide variety of products and services, from August 2020. After joining 3M Company in 2010, he held several positions with increasing levels of responsibility in multiple 3M business units. From October 2016, he served as president of Greater China Area and managing director of 3M China. He returned to the U.S. in 2019 to serve as senior vice president and chief strategy officer with responsibility for leading strategy, business development, marketing and sales globally for 3M until August 2020. Previous to 3M, Mr. Shafer was a consultant at McKinsey & Company advising industrial businesses on strategy and operational improvement and held a number of operational roles at Ford Motor Company and NASA. A copy of the Company ’ s news release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
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AOS
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2025-04-25
| 91,142
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99.1
|
99.1
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EX-99.1 2 a04252025exhibit991.htm EX-99.1 Document Exhibit 99.1 Media Relations: Curt Selby 414-359-4191 [email protected] Investor Relations: Helen Gurholt 414-359-4157 [email protected] FOR IMMEDIATE RELEASE April 25, 2025 A. O. Smith Announces Kevin Wheeler to Become Executive Chairman, Stephen Shafer Named President and Chief Executive Officer Milwaukee, Wis. – The A. O. Smith Corporation (NYSE: AOS) Board of Directors today announced that Kevin Wheeler will transition from chairman and chief executive officer to executive chairman of the corporation, effective July 1, 2025. At that time, Stephen Shafer will be appointed to the Board of Directors and will assume the role of president and chief executive officer. As executive chairman, Wheeler will continue to lead the company’s Board of Directors and remain actively involved in strategic development, mergers and acquisitions, investor relations and executive talent development. Shafer becomes the 11th chief executive officer in the company’s 151-year history. He will have responsibility for the company’s global operations, as well as strategy development and implementation, profitability and shareholder return. Shafer joined A. O. Smith as president and chief operating officer in March 2024 to lead the company’s global business units, including operations, supply chain, corporate technology and information technology. “Steve’s broad business experience, coupled with his strategic business acumen, uniquely positions him to guide A. O. Smith as the company continues its journey as a global water technology leader,” said Wheeler. “For the past year, Steve has collaborated closely with me and other business leaders to understand our business and identify opportunities to drive enhanced performance and continued growth in both sales and profitability.” “A. O. Smith experienced significant progress and profitable growth under Kevin’s leadership,” said lead director Ron Brown. “During his tenure, the company acquired Giant Factories, a Canadian water heater manufacturer, as well as six water treatment companies, including one in India. As chairman, president and chief executive officer during the global COVID-19 pandemic, Kevin led the company through an unprecedented period, maintaining business continuity while prioritizing the health and safety of employees.” Wheeler joined A. O. Smith in 1994 as a regional sales manager for the former Water Products Company. Over the course of his 31-year career with A. O. Smith, he has held numerous senior leadership roles, including vice president – international, overseeing all European and Asian water heating operations; senior vice president and general manager of the U.S. retail water heater business; and senior vice president and president for the North America, India and Europe water heating businesses. Prior to becoming chairman and chief executive officer, Wheeler was chairman, president and chief executive officer from April 2020 to March 2024, and was president and chief executive officer from September 2018 to April 2020. He was named president and chief operating officer in June 2017 and elected to the A. O. Smith Board of Directors in July 2017. Before A. O. Smith, Shafer worked at 3M Company from 2010-2024 and held several positions with increasing levels of responsibility in multiple business units in the U.S. and China. His most recent role at 3M was president of the Automotive and Aerospace Solutions Division. Prior to 3M, he worked for McKinsey & Company and Ford Motor Company, holding various roles focusing on manufacturing, supply chain and operational improvement. He is a member of the Executive Advisory Board for WorkBoard Inc., a former board member of Shanghai American Chamber of Commerce and served as a Big Brother Big Sister mentor. “I am honored to have the opportunity to step into the role of chief executive officer and lead this great company and exceptional team,” said Shafer. “I look forward to continuing to build on the solid foundation at A. O. Smith and deliver outstanding value to our shareholders, employees and customers.” “The board is extremely pleased with how well Kevin and Steve have worked together to make this a smooth transition,” said Brown. “As a board, we look forward to continuing to support both of them in creating additional value for our shareholders.” Forward-looking Statements This release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “continue,” “guidance,” “outlook” or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: negative impact to the Company’s businesses from international tariffs, including any new or increased tariffs that could also trigger retaliatory responses from other countries, as well as, trade disputes and geopolitical differences, including the conflicts in Ukraine and the Middle East; further softening in U.S. residential and commercial water heater demand; negative impacts to the Company, particularly the demand for its products, resulting from global inflationary pressures or a potential recession in one or more of the markets in which the Company participates; the Company’s ability to continue to obtain commodities, components, parts and accessories on a timely basis through its supply chain and at expected costs; negative impacts to demand for the Company’s products, particularly commercial products, as a result of changes in commercial property usage that followed the COVID-19 pandemic; further weakening in North American residential or commercial construction or instability in the Company’s replacement markets; inability of the Company to implement or maintain pricing actions; inconsistent recovery of the Chinese economy or a further decline in the growth rate of consumer spending or housing sales in China; the availability, timing or effects of China stimulus programs; potential weakening in the high-efficiency gas boiler segment in the U.S.; substantial defaults in payment by, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; foreign currency fluctuations; the Company’s inability to successfully integrate or achieve its strategic objectives resulting from acquisitions; failure to realize the expected benefits of acquisitions or expected synergies; failure to realize the expected benefits, timing and extent of regulatory changes; competitive pressures on the Company’s businesses, including new technologies and new competitors; the impact of potential information technology or data security breaches; negative impact of changes in government regulations or regulatory requirements; the inability to respond to secular trends toward decarbonization and energy efficiency; and adverse developments in general economic, political and business conditions in key regions of the world. Additional factors are discussed in the Company’s filings with Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, quarterly reports on Form 10-Q and current reports on Form 8-K. Forward-looking statements included in this news release are made only as of the date of this release, and the Company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the Company, or persons acting on its behalf, are qualified entirely by these cautionary statements. About A. O. Smith A. O. Smith Corporation, with headquarters in Milwaukee, Wisconsin, is a global leader applying innovative technology and energy-efficient solutions to products manufactured and marketed worldwide. Listed on the New York Stock Exchange (NYSE: AOS), the company is one of the world’s leading manufacturers of residential and commercial water heating equipment and boilers, as well as a manufacturer of water treatment products. For more information, visit www.aosmith.com . SOURCE: A. O. Smith Corporation ###
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AOS
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2025-04-25
| 91,142
|
8-K
|
9.01
|
Financial Statements and Exhibits The following exhibit is being filed herewith: (99 .1) News Release of A. O. Smith Corporation, dated April 25 , 20 25 104 Cover Page Interactive Data File (embedded with the Inline XBRL document) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. A. O. SMITH CORPORATION Date: April 25, 2025 By: /s/James F. Stern James F. Stern Executive Vice President, General Counsel and Secretary
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AOS
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2025-04-14
| 91,142
|
8-K
|
5.07
|
. Submission of Matters to a Vote of Security Holders. A. O. Corporation (the “Company”) held its Annual Meeting of Stockholders on April 8, 2025, for the purposes of the election of the Company’s Board of Directors, to hold an advisory vote to approve the compensation of our named executive officers, to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2025, and to consider a stockholder proposal requesting a Board report on our hiring practices with respect to formerly incarcerated people. The voting results for the election of the Company’s Board of Directors were as follows: Class A Common Stock Directors For Authority Withheld Broker Non-Vote Ronald D. Brown 25,322,445 0 0 Victoria M. Holt 25,322,445 0 0 Dr. Ilham Kadri 25,322,445 0 0 Christopher L. Mapes 25,322,445 0 0 Mark D. Smith 25,322,445 0 0 Kevin J. Wheeler 25,322,445 0 0 Common Stock Directors For Authority Withheld Broker Non-Vote Todd W. Fister 62,787,496 36,544,464 6,827,418 Michael M. Larsen 39,339,132 59,992,829 6,827,418 Lois M. Martin 62,995,035 36,336,926 6,827,418 The advisory voting results for the approval of the compensation of our named executive officers were as follows: Total Votes For 33,247,046 Against 1,993,686 Abstain 14,909 Broker Non-Votes 682,742 The voting results for the ratification of the appointment of Ernst & Young LLP as the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2025, were as follows: Total Votes For 34,842,143 Against 1,077,076 Abstain 19,164 Broker Non-Votes 0 The voting results for a stockholder proposal requesting a Board report on our hiring practices with respect to formerly incarcerated people were as follows: Total Votes For 1,507,913 Against 33,336,216 Abstain 411,513 Broker Non-Votes 682,742 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. A. O. SMITH CORPORATION Date: April 14, 2025 By: /s/James F. Stern James F. Stern Executive Vice President, General Counsel and Secretary
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AOS
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2025-01-30
| 91,142
|
8-K
|
2.02
|
. Results of Operations and Financial Condition On January 30, 2025, A. O. Smith Corporation (“the Company”) issued a news release announcing the Company’s results for the year ended December 31, 2024. A copy of the Company’s news release is attached as Exhibit 99.1 to this Current Report on Form 8-K (this “Current Report”) and is incorporated by reference herein.
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AOS
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2025-01-30
| 91,142
|
8-K
|
9.01
|
Financial Statements and Exhibits The following exhibit is being filed herewith: (99 .1) News Release of A. O. Smith Corporation, dated January 30, 202 5 104 Cover Page Interactive Data File (embedded with the Inline XBRL document) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. A. O. SMITH CORPORATION Date: January 30, 2025 By: /s/James F. Stern James F. Stern Executive Vice President, General Counsel and Secretary
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AOS
|
2025-01-30
| 91,142
|
99.1
|
99.1
|
EX-99.1 2 a12312024exhibit991.htm EX-99.1 Document Exhibit 99.1 Media Relations: Curt Selby 414-359-4191 [email protected] Investor Relations: Helen Gurholt 414-359-4157 [email protected] FOR IMMEDIATE RELEASE January 30, 2025 A. O. Smith Reports 2024 Results and Introduces 2025 Guidance 2024 Highlights (Comparisons are year-over-year (“YoY”), unless otherwise noted) • Sales of $3.8 billion, a decrease of 1% primarily driven by lower sales in China • Net earnings of $533.6 million and diluted earnings per share (EPS) of $3.63, a 2% decrease, primarily due to lower sales as well as a $0.10 reduction to EPS for restructuring and impairment expenses to right size the businesses in China and North America water treatment • Adjusted earnings of $548.0 million resulted in adjusted EPS of $3.73, a decrease of 2% • Returned $496 million of capital to shareholders through dividend and share repurchases • Pureit acquisition, which closed in the fourth quarter, had a minimal impact on 2024 results Milwaukee, Wis.— Global water technology company A. O. Smith Corporation (“the Company”) (NYSE: AOS) today announced its full year and fourth quarter 2024 results. Key Financial Metrics Full Year (in millions, except per share amounts) 2024 2023 % Change YoY Net sales $3,818 $3,853 -1% Net earnings $533.6 $556.6 -4% Adjusted earnings $548.0 1 $574.8 2 -5% Diluted earnings per share $3.63 $3.69 -2% Adjusted earnings per share $3.73 1 $3.81 2 -2% 1 Excludes restructuring and impairment expenses. See accompanying GAAP to Non-GAAP reconciliations 2 Excludes restructuring and impairment expenses and pension settlement income. See accompanying GAAP to Non-GAAP reconciliations Fourth Quarter (in millions, except per share amounts) Q4 2024 Q4 2023 % Change YoY Net sales $912.4 $988.1 -8% Net earnings $109.7 $137.3 -20% Adjusted earnings $124.1 3 $144.4 4 -14% Diluted earnings per share $0.75 $0.92 -18% Adjusted earnings per share $0.85 3 $0.97 4 -12% 3 Excludes restructuring and impairment expenses. See accompanying GAAP to Non-GAAP reconciliations 4 Excludes restructuring and impairment expenses and pension settlement expense. See accompanying GAAP to Non-GAAP reconciliations “After three years of record sales, A. O. Smith’s 2024 sales declined due to a weak economy in China continuing to negatively impact consumer demand and soft North America water heater demand in the second half of the year. Boiler sales increased 8% in North America led by our high-efficiency commercial products,” noted Kevin J. Wheeler, chairman and chief executive officer. “Despite facing further weakening of the Chinese economy and inventory fluctuations in the North America water heater channel, I am proud of the actions our teams took to optimize our businesses while also continuing to make investments for the future. I am also pleased to welcome Pureit to the A. O. Smith family. We remain focused on taking care of our customers and offering innovative, market-leading water heating and water treatment products.” Full year and fourth quarter 2024 adjusted earnings exclude pre-tax restructuring and impairment expenses of $17.6 million. In China, severance expenses of $11.3 million were related to the right sizing of that business for current market conditions. In North America, $6.3 million of restructuring and impairment expenses were recognized in the water treatment business as part of a profitability improvement strategy that prioritizes improving the Company’s cost structure and emphasizes more profitable channels. Segment-level Performance North America Full Year 2024 2024 sales of $3.0 billion increased slightly compared to 2023 as water heater pricing benefits and higher boiler and water treatment sales were offset by lower water heater volumes. Segment earnings were $707.5 million and segment margin was 24.0% in 2024 compared to segment earnings of $726.7 million and segment margin of 24.9% in 2023. 2024 adjusted segment earnings and adjusted segment margin were $713.8 million and 24.2%, respectively. 2023 adjusted segment earnings were $726.0 million and adjusted segment margin was 24.8%. The lower segment earnings and segment margin in 2024 compared to 2023 were primarily driven by pricing benefits and higher boiler and water treatment sales that were more than offset by lower and more volatile water heater volumes and continued strategic investments. Fourth Quarter 2024 Fourth quarter sales of $689.8 million decreased 7% compared to fourth quarter sales in the prior year period as lower water heater volumes were partially offset by pricing benefits and higher boiler sales and water treatment sales. Segment earnings were $147.9 million, and segment margin was 21.4% in 2024 compared to segment earnings of $169.0 million and segment margin of 22.9% in 2023. Fourth quarter 2024 adjusted segment earnings were $154.2 million and adjusted segment margin was 22.4%, compared to adjusted segment earnings of $173.3 million and adjusted segment margin of 23.5% in 2023. The year-over-year decrease in segment earnings and segment margin was primarily due to lower water heater volumes partially offset by pricing benefits and lower material costs. Rest of World Full Year 2024 Rest of World sales of $918.6 million decreased 4% year-over-year, including an unfavorable currency translation impact of $13 million primarily related to sales in China. In local currency, third party segment sales decreased by approximately 4% year-over-year. The decrease in local currency sales in 2024 was primarily driven by lower volumes of water heater and water treatment products, partially offset by higher sales of kitchen products in China. Sales in India increased 13% in local currency in 2024 due to continued strong demand for water heater and water treatment products. Segment earnings were $64.5 million and segment margin was 7.0% in 2024 compared to segment earnings of $83.4 million and segment margin of 8.7% in the prior year. 2024 adjusted segment earnings and adjusted segment margin were $75.8 million and 8.3%, respectively, compared to adjusted segment earnings of $99.1 million and adjusted segment margin of 10.4% in 2023. The lower segment earnings and segment margin in 2024 compared to 2023 were primarily driven by lower sales in China, partially offset by lower material costs. Fourth Quarter 2024 Rest of World sales of $236.6 million decreased 9% year-over-year. The decrease in sales in the fourth quarter of 2024 was primarily driven by lower sales in China. Sales in India increased 11% in local currency. Segment earnings were $7.8 million, and segment margin was 3.3% in the fourth quarter of 2024, compared to segment earnings of $26.6 million and segment margin of 10.2% in the same period of 2023. Adjusted segment earnings were $19.1 million and adjusted segment margin was 8.1% in the fourth quarter of 2024. Adjusted segment earnings and adjusted segment margin were $29.8 million and 11.5%, respectively, in the fourth quarter of 2023. The lower segment earnings and segment margin compared to the prior year were primarily due to lower sales volumes in China. Balance Sheet, Liquidity and Capital Allocation As of December 31, 2024, cash and marketable securities balances totaled $276.1 million and debt totaled $193.2 million, resulting in a leverage ratio of 9.3% as measured by total debt-to-total capitalization. Cash provided by operations was $581.8 million and free cash flow was $473.8 million in 2024, a decrease compared to 2023, primarily driven by lower earnings and higher inventory balances that more than offset lower accounts receivable balances. As part of its commitment to return capital to shareholders, the Company repurchased 3.8 million shares at a cost of $305.8 million in 2024. As of December 31, 2024, authority remained to repurchase approximately 1.7 million additional shares. In January 2025, the Company’s board of directors increased the number of shares authorized for repurchase by an additional 5 million shares. The Company expects to increase its spending to repurchase shares in 2025 to approximately $400 million. On January 16, 2025, the Company’s board of directors approved a $0.34 per share dividend for shareholders of record on January 31, payable on February 18, marking 85 consecutive years of dividend payments. Outlook 2025 Outlook (in millions except per share amounts) 2024 2025 Outlook Actual Low End High End Net sales $3,818 $3,800 $3,900 Diluted earnings per share $3.63 $3.60 $3.90 Adjusted earnings per share $3.73 5 $3.60 $3.90 5 Excludes restructuring and impairment expenses. See accompanying GAAP to Non-GAAP reconciliations “Our outlook for 2025 projects our consolidated sales to be flat to up 2% compared to 2024. We expect our full-year EPS to be between $3.60 and $3.90, slightly higher than 2024 at the mid-point. In North America, we anticipate water heater industry unit volumes to be flat year-over-year with less first half versus second half volatility compared to 2024. In our Rest of World segment, we expect a single-digit sales decline in China as consumer demand remains low. We project continued double-digits sales growth in India,” stated Wheeler. “We believe our strong balance sheet and free cash flow continue to provide us the liquidity to focus on our capital allocation priorities of organic growth, acquisitions, dividends and share repurchases, which we believe will enable us to execute our strategy to invest and grow profitably.” The Company’s guidance excludes the potential impacts from future acquisitions. A. O. Smith will host a webcasted conference call at 10:00 a.m. (Eastern Daylight Time) today. The call can be heard live on the Company’s website. An audio replay of the call will be available on the Company’s website after the live event. To access the archived audio replay, go to the “Investors” page and select the Fourth Quarter 2024 Earnings Call link. To provide improved transparency into the operating results of its business, the Company is providing non-GAAP measures. Free cash flow is defined as cash provided by operations less capital expenditures. Adjusted earnings, adjusted EPS, adjusted segment earnings and adjusted corporate expenses exclude the impact of restructuring and impairment charges and pension settlement income and expenses. Reconciliations from GAAP measures to non-GAAP measures are provided in the financial information included in this news release. Forward-looking Statements This release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “continue,” “guidance,” “outlook” or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: further softening in U.S. residential and commercial water heater demand; negative impacts to the Company, particularly the demand for its products, resulting from global inflationary pressures or a potential recession in one or more of the markets in which the Company participates; the Company’s ability to continue to obtain commodities, components, parts and accessories on a timely basis through its supply chain and at expected costs; negative impacts to demand for the Company’s products, particularly commercial products, as a result of changes in commercial property usage that followed the COVID-19 pandemic; further weakening in North American residential or commercial construction or instability in the Company’s replacement markets; inability of the Company to implement or maintain pricing actions; inconsistent recovery of the Chinese economy or a further decline in the growth rate of consumer spending or housing sales in China; the availability, timing or effects of China stimulus programs; negative impact to the Company’s businesses from international tariffs, trade disputes and geopolitical differences, including the conflicts in Ukraine and the Middle East; potential weakening in the high-efficiency gas boiler segment in the U.S.; substantial defaults in payment by, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; foreign currency fluctuations; the Company’s inability to successfully integrate or achieve its strategic objectives resulting from acquisitions; failure to realize the expected benefits of acquisitions or expected synergies; failure to realize the expected benefits, timing and extent of regulatory changes; competitive pressures on the Company’s businesses, including new technologies and new competitors; the impact of potential information technology or data security breaches; negative impact of changes in government regulations or regulatory requirements; the inability to respond to secular trends toward decarbonization and energy efficiency; and adverse developments in general economic, political and business conditions in key regions of the world. Additional factors are discussed in the Company’s filings with Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, quarterly reports on Form 10-Q and current reports on Form 8-K. Forward-looking statements included in this news release are made only as of the date of this release, and the Company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the Company, or persons acting on its behalf, are qualified entirely by these cautionary statements. About A. O. Smith A. O. Smith Corporation, with headquarters in Milwaukee, Wisconsin, is a global leader applying innovative technology and energy-efficient solutions to products manufactured and marketed worldwide. Listed on the New York Stock Exchange (NYSE: AOS), the Company is one of the world’s leading manufacturers of residential and commercial water heating equipment and boilers, as well as a manufacturer of water treatment products. For more information, visit www.aosmith.com . SOURCE: A. O. Smith Corporation ### A. O. SMITH CORPORATION Statement of Earnings (condensed consolidated financial statements - dollars in millions, except share data) Three Months Ended December 31, Twelve Months Ended December 31, (unaudited) (unaudited) 2024 2023 2024 2023 Net sales $ 912.4 $ 988.1 $ 3,818.1 $ 3,852.8 Cost of products sold 574.3 618.3 2,362.0 2,368.0 Gross profit 338.1 369.8 1,456.1 1,484.8 Selling, general and administrative expenses 182.0 185.0 739.3 727.4 Restructuring and impairment expenses 17.6 3.2 17.6 18.8 Interest expense 2.4 1.1 6.7 12.0 Other (income) expense (9.0) 3.6 (8.5) (6.9) Earnings before provision for income taxes 145.1 176.9 701.0 733.5 Provision for income taxes 35.4 39.6 167.4 176.9 Net earnings $ 109.7 $ 137.3 $ 533.6 $ 556.6 Diluted earnings per share of common stock (1) $ 0.75 $ 0.92 $ 3.63 $ 3.69 Average common shares outstanding (000’s omitted) 145,758 149,436 147,084 151,016 (1) Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding. A. O. SMITH CORPORATION Balance Sheet (dollars in millions) (Unaudited) December 31, 2024 December 31, 2023 ASSETS: Cash and cash equivalents $ 239.6 $ 339.9 Marketable securities 36.5 23.5 Receivables 541.4 596.0 Inventories 532.1 497.4 Other current assets 43.3 43.5 Total Current Assets 1,392.9 1,500.3 Net property, plant and equipment 628.7 597.5 Goodwill and other intangibles 1,082.8 970.1 Operating lease assets 32.8 37.3 Other assets 102.8 108.7 Total Assets $ 3,240.0 $ 3,213.9 LIABILITIES AND STOCKHOLDERS’ EQUITY: Trade payables $ 588.7 $ 600.4 Accrued payroll and benefits 78.5 92.2 Accrued liabilities 153.0 177.4 Product warranties 67.0 65.3 Debt due within one year 10.0 10.0 Total Current Liabilities 897.2 945.3 Long-term debt 183.2 117.3 Pension liabilities 11.0 10.5 Operating lease liabilities 23.5 27.9 Other liabilities 241.6 268.5 Stockholders’ equity 1,883.5 1,844.4 Total Liabilities and Stockholders’ Equity $ 3,240.0 $ 3,213.9 A. O. SMITH CORPORATION Statement of Cash Flows (dollars in millions) Twelve Months Ended December 31, (unaudited) 2024 2023 Operating Activities Net earnings $ 533.6 $ 556.6 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation & amortization 78.8 78.3 Stock based compensation expense 14.9 11.5 Deferred income taxes (4.6) (3.8) Non-cash impairments 4.7 15.6 Pension settlement (income) expense — (0.9) Pension settlement non-cash taxes — 0.2 Net changes in operating assets and liabilities: Current assets and liabilities (22.6) 20.0 Noncurrent assets and liabilities (23.0) (7.2) Cash Provided by Operating Activities 581.8 670.3 Investing Activities Capital expenditures (108.0) (72.6) Acquisitions (145.9) (16.8) Investment in marketable securities (73.7) (63.1) Net proceeds from sale of marketable securities 60.5 128.4 Cash Used in Investing Activities (267.1) (24.1) Financing Activities Long-term debt incurred (repaid) 69.7 (218.1) Common stock repurchases (305.8) (306.5) Net proceeds from stock option activity 18.1 23.4 Dividends paid (190.4) (183.5) Cash Used In Financing Activities (408.4) (684.7) Effect of exchange rate changes on cash and cash equivalents (6.6) (12.8) Net decrease in cash and cash equivalents (100.3) (51.3) Cash and cash equivalents - beginning of period 339.9 391.2 Cash and Cash Equivalents - End of Period $ 239.6 $ 339.9 A. O. SMITH CORPORATION Business Segments (dollars in millions) Three Months Ended December 31, Twelve Months Ended December 31, (unaudited) (unaudited) 2024 2023 2024 2023 Net sales North America $ 689.8 $ 738.0 $ 2,950.1 $ 2,922.9 Rest of World 236.6 260.2 918.6 956.9 Inter-segment sales (14.0) (10.1) (50.6) (27.0) $ 912.4 $ 988.1 $ 3,818.1 $ 3,852.8 Earnings North America (1) $ 147.9 $ 169.0 $ 707.5 $ 726.7 Rest of World (2) 7.8 26.6 64.5 83.4 Inter-segment earnings elimination — (0.5) (0.4) (0.5) 155.7 195.1 771.6 809.6 Corporate expense (3) (8.2) (17.1) (63.9) (64.1) Interest expense (2.4) (1.1) (6.7) (12.0) Earnings before income taxes 145.1 176.9 701.0 733.5 Provision for income taxes 35.4 39.6 167.4 176.9 Net earnings $ 109.7 $ 137.3 $ 533.6 $ 556.6 Additional Information (1) North America includes restructuring and impairment expense of: 6.3 — 6.3 — includes pension settlement expense (income) of: $ — $ 4.3 $ — $ (0.7) (2) Rest of World includes restructuring and impairment expense of: 11.3 3.2 11.3 15.7 (3) Corporate expense includes pension settlement expense (income) of: — 0.8 — (0.2) includes impairment expense of: — — — 3.1 A. O. SMITH CORPORATION Adjusted Earnings and Adjusted Earnings Per Share (dollars in millions, except per share data) (unaudited) The following is a reconciliation of net earnings and diluted earnings per share to adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP): Three Months Ended December 31, Twelve Months Ended December 31, 2024 2023 2024 2023 Net Earnings (GAAP) $ 109.7 $ 137.3 $ 533.6 $ 556.6 Restructuring and impairment expenses, before tax 17.6 3.2 17.6 18.8 Pension settlement expense (income), before tax — 5.1 — (0.9) Tax effect on above items (3.2) (1.2) (3.2) 0.3 Adjusted Earnings (non-GAAP) $ 124.1 $ 144.4 $ 548.0 $ 574.8 Diluted Earnings Per Share (GAAP) (1) $ 0.75 $ 0.92 $ 3.63 $ 3.69 Restructuring and impairment expenses, per diluted share, before tax 0.12 0.02 0.12 0.12 Pension settlement expense (income) per diluted share, before tax — 0.04 — — Tax effect on above items per diluted share (0.02) (0.01) (0.02) — Adjusted Earnings Per Share (non-GAAP) (1) $ 0.85 $ 0.97 $ 3.73 $ 3.81 (1) Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding. A. O. SMITH CORPORATION Adjusted Segment Earnings (dollars in millions) (unaudited) The following is a reconciliation of reported earnings before provision for income taxes to total segment earnings (non-GAAP) and adjusted segment earnings (non-GAAP): Three Months Ended December 31, Twelve Months Ended December 31, 2024 2023 2024 2023 Earnings Before Provision for Income Taxes (GAAP) $ 145.1 $ 176.9 $ 701.0 $ 733.5 Add: Corporate expense (1) 8.2 17.1 63.9 64.1 Add: Interest expense 2.4 1.1 6.7 12.0 Total Segment Earnings (non-GAAP) $ 155.7 $ 195.1 $ 771.6 $ 809.6 North America (2) $ 147.9 $ 169.0 $ 707.5 $ 726.7 Rest of World (3) 7.8 26.6 64.5 83.4 Inter-segment earnings elimination — (0.5) (0.4) (0.5) Total Segment Earnings (non-GAAP) $ 155.7 $ 195.1 $ 771.6 $ 809.6 Additional Information (1) Corporate expense $ (8.2) $ (17.1) $ (63.9) $ (64.1) Pension settlement expense (income), before tax — 0.8 — (0.2) Impairment expense, before tax — — — 3.1 Adjusted Corporate expense (non-GAAP) $ (8.2) $ (16.3) $ (63.9) $ (61.2) (2) North America $ 147.9 $ 169.0 $ 707.5 $ 726.7 Restructuring and impairment expenses, before tax 6.3 — 6.3 — Pension settlement expense (income), before tax — 4.3 — (0.7) Adjusted North America (non-GAAP) $ 154.2 $ 173.3 $ 713.8 $ 726.0 (3) Rest of World $ 7.8 $ 26.6 $ 64.5 $ 83.4 Restructuring and impairment expenses, before tax 11.3 3.2 11.3 15.7 Adjusted Rest of World (non-GAAP) $ 19.1 $ 29.8 $ 75.8 $ 99.1 A. O. SMITH CORPORATION Free Cash Flow (dollars in millions) (unaudited) The following is a reconciliation of reported cash flow from operating activities to free cash flow (non-GAAP): Twelve Months Ended December 31, 2024 2023 Cash provided by operating activities (GAAP) $ 581.8 $ 670.3 Less: Capital expenditures (108.0) (72.6) Free cash flow (non-GAAP) $ 473.8 $ 597.7 A. O. SMITH CORPORATION 2025 EPS Guidance and 2024 Adjusted EPS (unaudited) The following is a reconciliation of diluted EPS to adjusted EPS (non-GAAP) (all items are net of tax): 2025 Guidance 2024 Diluted EPS (GAAP) $ 3.60 - 3.90 $ 3.63 Restructuring and impairment expenses — 0.10 (1) Adjusted EPS (non-GAAP) $ 3.60 - 3.90 $ 3.73 (1) Includes pre-tax restructuring and impairment expenses of $11.3 million and $6.3 million, within the Rest of World segment and North America segment, respectively.
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2024-11-04
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9.01
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Financial Statements and Exhibits The following exhibit is being filed herewith: (99 .1) News Release of A. O. Smith Corporation, dated November 1, 2024 104 Cover Page Interactive Data File (embedded with the Inline XBRL document) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. A. O. SMITH CORPORATION Date: November 1, 2024 By: /s/James F. Stern James F. Stern Executive Vice President, General Counsel and Secretary
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2024-11-04
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99.1
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99.1
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EX-99.1 2 a11042024exhibit991.htm EX-99.1 Document Exhibit 99.1 Media Relations: Curt Selby 414-359-4191 [email protected] Investor Relations: Helen Gurholt 414-359-4157 [email protected] FOR IMMEDIATE RELEASE November 1, 2024 A. O. Smith Acquires Pureit Milwaukee, Wis. — Global water technology company A. O. Smith Corporation (the “Company”) (NYSE: AOS) today announced it has completed its acquisition of Pureit, a Unilever PLC business at a purchase price of approximately $120 million, subject to customary adjustments. Pureit offers a broad range of residential water purification solutions, primarily in India. “Pureit complements our premium brands in the market and their strength in e-commerce will allow us to expand our presence in that channel,” said Kevin J. Wheeler, the Company’s chairman and chief executive officer. “This acquisition aligns with our strategy of adding scale and enhances our premium water treatment product portfolio and distribution footprint.” Pureit was first launched in 2004 in Chennai, India, to provide accessible and safe drinking water to the fast-growing populations of South Asia, and beyond. Today Pureit is a leading water purification business operating in India, Bangladesh, Sri Lanka, Vietnam and Mexico, among other markets, with a diversified product offering across devices, filters and spares. The agreement to acquire Pureit was announced earlier this year, and the acquisition will not have a material impact on earnings in the first year. Forward-looking Statements This release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “continue,” “guidance,” “outlook” or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: the possibility that the parties will fail to obtain necessary regulatory approvals or to satisfy any of the other conditions to the proposed transaction; potential negative effects relating to the announcement of the proposed transaction; failure to realize the expected benefits of the transaction or expected synergies; difficulties in predicting results of operations of an acquired business; negative impact to the Company’s businesses from international tariffs, trade disputes and geopolitical differences, including the conflicts in Ukraine, the Middle East and attacks on commercial shipping vessels in the Red Sea; foreign currency fluctuations; the Company’s inability to successfully integrate or achieve its strategic objectives resulting from acquisitions; competitive pressures on the Company’s businesses, including new technologies and new competitors; changes in government regulations or regulatory requirements; and adverse developments in general economic, political and business conditions in key regions of the world. Forward-looking statements included in this news release are made only as of the date of this release, and the Company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the Company, or persons acting on its behalf, are qualified entirely by these cautionary statements. About A. O. Smith Celebrating its 150th year of business, A. O. Smith Corporation, with headquarters in Milwaukee, Wisconsin, is a global leader applying innovative technology and energy-efficient solutions to products manufactured and marketed worldwide. Listed on the New York Stock Exchange (NYSE: AOS), the Company is one of the world’s leading manufacturers of residential and commercial water heating equipment and boilers, as well as water treatment products. For more information, visit www.aosmith.com . SOURCE: A. O. Smith Corporation ###
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2024-11-04
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8-K
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8.01
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. Other Events On November 1, 2024, A. O. Smith Corporation ("the Company") issued a news release announcing it had completed its acquisition of Pureit, a Unilever PLC business at a purchase price of approximately $120 million, subject to customary adjustments. Pureit offers a broad range of residential water purification solutions, primarily in India. A copy of the Company's news release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
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2024-10-22
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2.02
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. Results of Operations and Financial Condition On October 22, 2024, A. O. Smith Corporation (“the Company”) issued a news release announcing the Company’s results for the quarter ended September 30, 2024. A copy of the Company’s news release is attached as Exhibit 99.1 to this Current Report on Form 8-K (this “Current Report”) and is incorporated by reference herein.
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2024-10-22
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8-K
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9.01
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Financial Statements and Exhibits The following exhibit is being filed herewith: (99 .1) News Release of A. O. Smith Corporation, dated October 22, 2024 104 Cover Page Interactive Data File (embedded with the Inline XBRL document) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. A. O. SMITH CORPORATION Date: October 22, 2024 By: /s/James F. Stern James F. Stern Executive Vice President, General Counsel and Secretary
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2024-10-22
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99.1
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99.1
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EX-99.1 2 a9302024exhibit991.htm EX-99.1 Document Exhibit 99.1 Media Relations: Curt Selby 414-359-4191 [email protected] Investor Relations: Helen Gurholt 414-359-4157 [email protected] FOR IMMEDIATE RELEASE October 22, 2024 A. O. Smith Reports Third Quarter Performance Third Quarter 2024 Highlights (Comparisons are year-over-year (“YoY”), unless otherwise noted) • Sales of $903 million, a decrease of 4%, driven by lower sales in China and lower volumes of water heaters in North America • Net earnings of $120 million, a decrease of 11% • Diluted earnings per share (EPS) of $0.82, a decrease of 9% • Reaffirm revised 2024 EPS outlook of $3.70 to $3.85 • 6% increase to our dividend; we have increased our dividend for 32 consecutive years • Recently announced Pureit acquisition on track to close by the end of 2024 Milwaukee, Wis.— Global water technology company A. O. Smith Corporation (“the Company”) (NYSE: AOS) today announced its third quarter 2024 results. Key Financial Metrics Third Quarter (in millions, except per share amounts) Q3 2024 Q3 2023 % Change YoY Net sales $902.6 $937.5 -4% Net earnings $120.2 $135.4 -11% Diluted earnings per share $0.82 $0.90 -9% “As we announced in our October 11 press release, our China sales and North America water heater volumes were lower than we expected in the third quarter. Consumer demand headwinds in China and pre-buy and lead-time-driven order demand softness in North America persisted through the quarter and led to lower than expected sales and profitability,” noted Kevin J. Wheeler, chairman and chief executive officer. “While our China and North America water heater businesses were challenged in the quarter, I am pleased with the performance of other parts of our business, particularly the double-digit sales growth in commercial boilers and North America water treatment.” Third Quarter 2024 Segment-level Performance North America 2024 sales of $703.3 million declined 1% compared to 2023 as higher boiler and water treatment sales and pricing action benefits were more than offset by lower residential and commercial water heater volumes. Segment earnings were $162.5 million and segment margin was 23.1% in 2024 compared to segment earnings of $170.0 million and segment margin of 23.9% in 2023. The year-over-year decreases in segment earnings and segment margin were largely a result of lower water heater volumes more than offsetting higher volumes of boilers and water treatment products and pricing actions. Rest of World Sales of $210.3 million declined 10% compared with prior year sales of $233.4 million. Local currency third-party sales in China decreased 17% in 2024, as weak consumer demand resulted in lower volumes of our core water heater and water treatment products. Sales in India increased 12% year-over-year in local currency in 2024 as new products continued to drive growth. Segment earnings were $13.6 million and segment margin was 6.5% in 2024 compared to segment earnings of $23.2 million and segment margin of 9.9% in the prior year. The year-over-year declines in segment earnings and segment margin were primarily due to lower volumes that were partially offset by lower materials costs that resulted from cost savings projects in China. Balance Sheet, Liquidity and Capital Allocation As of September 30, 2024, cash and marketable securities balances totaled $255.6 million and debt totaled $119.7 million, resulting in a leverage ratio of 5.9% as measured by total debt-to-total capitalization. Cash provided by operations was $359.9 million and free cash flow was $282.5 million in the first nine months of 2024, which decreased year-over-year primarily as a result of higher inventories, higher incentive payments associated with record sales and profits earned in 2023, as well as lower trade receivable balances. As previously announced, the Company signed an agreement earlier this year to acquire Pureit from Unilever for $120 million, subject to customary adjustments. Our acquisition of Pureit is on track to close by the end of 2024. As part of its commitment to return capital to shareholders, the Company repurchased 2.9 million shares at a cost of $237.1 million in the first nine months of 2024. As of September 30, 2024, authority remained to repurchase approximately 2.7 million additional shares. The Company expects to spend approximately $300 million repurchasing shares in 2024. On Oct. 7, the Company’s board of directors approved a 6% increase in the dividend rate, resulting in a five-year compound annual dividend growth rate of 8%. Outlook 2024 Outlook (in millions, except per share amounts) 2023 2024 Outlook Actual Low End High End Net sales $3,853 $3,800 $3,900 Diluted earnings per share $3.69 $3.70 $3.85 Adjusted earnings per share $3.81 1 $3.70 $3.85 1 Excludes restructuring and impairment expenses. See accompanying GAAP to Non-GAAP reconciliations “Because we expect consumer demand to remain challenged in China through the end of the year and we are cautious about North America residential and commercial water heater end-market demand, we announced on October 11, and reaffirm today, that we lowered our sales outlook for 2024 to be approximately flat to last year. We also lowered our full year EPS outlook to a range of between $3.70 and $3.85, a year-over-year decline of 1% over 2023 adjusted EPS, at the midpoint,” stated Wheeler. “Our improved lead times are expected to continue through the remainder of the year, and we have adjusted our North America residential and commercial water heater facilities to improve production efficiencies at lower levels.” The Company’s guidance excludes the potential impacts from future acquisitions. A. O. Smith will host a webcasted conference call at 10:00 a.m. (Eastern Daylight Time) today. The call can be heard live on the Company’s website. An audio replay of the call will be available on the Company’s website after the live event. To access the archived audio replay, go to the “Investors” page and select the Third Quarter 2024 Earnings Call link. To provide improved transparency into the operating results of its business, the Company is providing non-GAAP measures. Free cash flow is defined as cash provided by operations less capital expenditures. Adjusted earnings, adjusted EPS, adjusted segment earnings and adjusted corporate expenses exclude the impact of pension settlement income and impairment expenses. Reconciliations from GAAP measures to non-GAAP measures are provided in the financial information included in this news release. Forward-looking Statements This release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “continue,” “guidance,” “outlook” or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: further softening in U.S. residential and commercial water heater demand; negative impacts to the Company, particularly the demand for its products, resulting from global inflationary pressures or a potential recession in one or more of the markets in which the Company participates; the Company’s ability to continue to obtain commodities, components, parts and accessories on a timely basis through its supply chain and at expected costs; negative impacts to demand for the Company’s products, particularly commercial products, as a result of changes in commercial property usage that followed the COVID-19 pandemic; further weakening in North American residential or commercial construction or instability in the Company’s replacement markets; inability of the Company to implement or maintain pricing actions; inconsistent recovery of the Chinese economy or a further decline in the growth rate of consumer spending or housing sales in China; the availability, timing or effects of China stimulus programs; negative impact to the Company’s businesses from international tariffs, trade disputes and geopolitical differences, including the conflicts in Ukraine, the Middle East and attacks on commercial shipping vessels in the Red Sea; potential further weakening in the high-efficiency gas boiler segment in the U.S.; substantial defaults in payment by, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; foreign currency fluctuations; the Company’s inability to successfully integrate or achieve its strategic objectives resulting from acquisitions; the possibility that the parties will fail to obtain necessary regulatory approvals or to satisfy any of the other conditions to the proposed acquisition; failure to realize the expected benefits of acquisitions or expected synergies; failure to realize the expected benefits, timing and extent, of regulatory changes; competitive pressures on the Company’s businesses, including new technologies and new competitors; the impact of potential information technology or data security breaches; negative impact of changes in government regulations or regulatory requirements; the inability to respond to secular trends toward decarbonization and energy efficiency; and adverse developments in general economic, political and business conditions in key regions of the world. Additional factors are discussed in the Company’s filings with Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, quarterly reports on Form 10-Q and current reports on Form 8-K. Forward-looking statements included in this news release are made only as of the date of this release, and the Company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the Company, or persons acting on its behalf, are qualified entirely by these cautionary statements. About A. O. Smith Celebrating its 150 th year of business, A. O. Smith Corporation, with headquarters in Milwaukee, Wisconsin, is a global leader applying innovative technology and energy-efficient solutions to products manufactured and marketed worldwide. Listed on the New York Stock Exchange (NYSE: AOS), the Company is one of the world’s leading manufacturers of residential and commercial water heating equipment and boilers, as well as water treatment products. For more information, visit www.aosmith.com . SOURCE: A. O. Smith Corporation ### A. O. SMITH CORPORATION Condensed Consolidated Statement of Earnings (dollars in millions, except share data) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net sales $ 902.6 $ 937.5 $ 2,905.7 $ 2,864.7 Cost of products sold 565.3 581.3 1,787.7 1,749.7 Gross profit 337.3 356.2 1,118.0 1,115.0 Selling, general and administrative expenses 176.6 174.9 557.3 542.4 Impairment expense — — — 15.6 Interest expense 1.5 2.4 4.3 10.9 Other expense (income), net 2.6 2.5 0.5 (10.5) Earnings before provision for income taxes 156.6 176.4 555.9 556.6 Provision for income taxes 36.5 41.0 132.0 137.3 Net earnings $ 120.1 $ 135.4 $ 423.9 $ 419.3 Diluted earnings per share of common stock (1) $ 0.82 $ 0.90 $ 2.87 $ 2.77 Average common shares outstanding (000’s omitted) 146,700 151,210 147,529 151,548 (1) Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding. A. O. SMITH CORPORATION Condensed Consolidated Balance Sheet (dollars in millions) (Unaudited) September 30, 2024 December 31, 2023 ASSETS: Cash and cash equivalents $ 219.3 $ 339.9 Marketable securities 36.3 23.5 Receivables 558.2 596.0 Inventories 554.9 497.4 Other current assets 43.8 43.5 Total Current Assets 1,412.5 1,500.3 Net property, plant and equipment 624.6 597.5 Goodwill and other intangibles 978.9 970.1 Operating lease assets 32.4 37.3 Other assets 105.8 108.7 Total Assets $ 3,154.2 $ 3,213.9 LIABILITIES AND STOCKHOLDERS’ EQUITY: Trade payables $ 555.9 $ 600.4 Accrued payroll and benefits 71.5 92.2 Accrued liabilities 144.1 177.4 Product warranties 62.7 65.3 Debt due within one year 10.0 10.0 Total Current Liabilities 844.2 945.3 Long-term debt 109.7 117.3 Operating lease liabilities 23.5 27.9 Other liabilities 260.1 279.0 Stockholders’ equity 1,916.7 1,844.4 Total Liabilities and Stockholders’ Equity $ 3,154.2 $ 3,213.9 A. O. SMITH CORPORATION Condensed Consolidated Statement of Cash Flows (dollars in millions) (unaudited) Nine Months Ended September 30, 2024 2023 Operating Activities Net earnings $ 423.9 $ 419.3 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation & amortization 59.5 57.5 Stock based compensation expense 12.7 10.1 Deferred income taxes (0.9) — Non-cash impairment — 15.6 Pension settlement income — (6.0) Pension settlement income non-cash taxes — 1.5 Net changes in operating assets and liabilities: Current assets and liabilities (121.3) (44.6) Noncurrent assets and liabilities (14.0) (14.4) Cash Provided by Operating Activities 359.9 439.0 Investing Activities Capital expenditures (77.4) (42.7) Acquisitions (21.3) (16.1) Investment in marketable securities (72.9) (63.1) Net proceeds from sale of marketable securities 60.5 91.1 Cash Used in Investing Activities (111.1) (30.8) Financing Activities Long-term debt repaid (6.9) (214.9) Common stock repurchases (237.1) (161.4) Net proceeds from stock option activity 17.2 11.3 Dividends paid (140.9) (135.7) Cash Used in Financing Activities (367.7) (500.7) Effect of exchange rate changes on cash and cash equivalents (1.7) (17.7) Net decrease in cash and cash equivalents (120.6) (110.2) Cash and cash equivalents - beginning of period 339.9 391.2 Cash and Cash Equivalents - End of Period $ 219.3 $ 281.0 A. O. SMITH CORPORATION Business Segments (dollars in millions) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net sales North America $ 703.3 $ 709.9 $ 2,260.3 $ 2,184.9 Rest of World 210.3 233.4 682.0 696.7 Inter-segment sales (11.0) (5.8) (36.6) (16.9) $ 902.6 $ 937.5 $ 2,905.7 $ 2,864.7 Earnings North America (1) $ 162.5 $ 170.0 $ 559.6 $ 557.7 Rest of World (2) 13.6 23.2 56.7 56.8 Inter-segment earnings elimination — — (0.4) — 176.1 193.2 615.9 614.5 Corporate expense (3) (18.0) (14.4) (55.7) (47.0) Interest expense (1.5) (2.4) (4.3) (10.9) Earnings before income taxes 156.6 176.4 555.9 556.6 Provision for incomes taxes 36.5 41.0 132.0 137.3 Net earnings $ 120.1 $ 135.4 $ 423.9 $ 419.3 Additional Information (1) Adjustments: North America includes pension settlement income of: $ — $ — $ — $ (5.0) (2) Adjustments: Rest of World includes impairment expense of: — — — 12.5 (3) Adjustments: Corporate expense includes pension settlement income of: — — — (1.0) includes impairment expense of: — — — 3.1 A. O. SMITH CORPORATION Adjusted Earnings and Adjusted Earnings Per Share (dollars in millions, except per share data) (unaudited) The following is a reconciliation of net earnings and diluted earnings per share to adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP): Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net Earnings (GAAP) $ 120.1 $ 135.4 $ 423.9 $ 419.3 Impairment expense, before tax — — — 15.6 Pension settlement income, before tax — — — (6.0) Tax effect on above items — — — 1.5 Adjusted Earnings (non-GAAP) $ 120.1 $ 135.4 $ 423.9 $ 430.4 Diluted Earnings Per Share (GAAP) (1) $ 0.82 $ 0.90 $ 2.87 $ 2.77 Impairment expense per diluted share, before tax — — — 0.10 Pension settlement income per diluted share, before tax — — — (0.04) Tax effect on above items per diluted share — — — 0.01 Adjusted Earnings Per Share (non-GAAP) (1) $ 0.82 $ 0.90 $ 2.87 $ 2.84 (1) Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding. A. O. SMITH CORPORATION Adjusted Segment Earnings (dollars in millions) (unaudited) The following is a reconciliation of reported earnings before provision for income taxes to total segment earnings (non-GAAP) and adjusted segment earnings (non-GAAP): Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Earnings Before Provision for Income Taxes (GAAP) $ 156.6 $ 176.4 $ 555.9 $ 556.6 Add: Corporate expense (1) 18.0 14.4 55.7 47.0 Add: Interest expense 1.5 2.4 4.3 10.9 Total Segment Earnings (non-GAAP) $ 176.1 $ 193.2 $ 615.9 $ 614.5 North America (2) $ 162.5 $ 170.0 $ 559.6 $ 557.7 Rest of World (3) 13.6 23.2 56.7 56.8 Inter-segment earnings elimination — — (0.4) — Total Segment Earnings (non-GAAP) $ 176.1 $ 193.2 $ 615.9 $ 614.5 Additional Information (1) Corporate expense $ (18.0) $ (14.4) $ (55.7) $ (47.0) Pension settlement income, before tax — — — (1.0) Impairment expense, before tax — — — 3.1 Adjusted Corporate expense (non-GAAP) $ (18.0) $ (14.4) $ (55.7) $ (44.9) (2) North America $ 162.5 $ 170.0 $ 559.6 $ 557.7 Pension settlement income, before tax — — — (5.0) Adjusted North America (non-GAAP) $ 162.5 $ 170.0 $ 559.6 $ 552.7 (3) Rest of World $ 13.6 $ 23.2 $ 56.7 $ 56.8 Impairment expense, before tax — — — 12.5 Adjusted Rest of World (non-GAAP) $ 13.6 $ 23.2 $ 56.7 $ 69.3 A. O. SMITH CORPORATION Free Cash Flow (dollars in millions) (unaudited) The following is a reconciliation of reported cash flow from operating activities to free cash flow (non-GAAP): Nine Months Ended September 30, 2024 2023 Cash provided by operating activities (GAAP) $ 359.9 $ 439.0 Less: Capital expenditures (77.4) (42.7) Free cash flow (non-GAAP) $ 282.5 $ 396.3 A. O. SMITH CORPORATION 2024 EPS Guidance and 2023 Adjusted EPS (unaudited) The following is a reconciliation of diluted EPS to adjusted EPS (non-GAAP) (all items are net of tax): 2024 Guidance 2023 Diluted EPS (GAAP) $ 3.70 - 3.85 $ 3.69 Restructuring and impairment expense — 0.12 (1) Adjusted EPS (non-GAAP) $ 3.70 - 3.85 $ 3.81 (1) Includes pre-tax restructuring and impairment expenses of $15.7 million and $3.1 million, within the Rest of World segment and Corporate expenses, respectively.
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. Results of Operations and Financial Condition On October 11, 2024, A. O. Smith Corporation (the “Company”) issued a news release providing preliminary results for the quarter ended September 30, 2024 and revised guidance for the full year ending December 31, 2024. A copy of the Company’s news release is attached as Exhibit 99.1 to this Current Report on Form 8-K. The information contained in this
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of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, or incorporated by reference into any filing under the Securities Act of 1933, as amended, of the Exchange Act.
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Financial Statements and Exhibits The following exhibit is being filed herewith: (99 .1) News Release of A. O. Smith Corporation, dated October 11, 2024 104 Cover Page Interactive Data File (embedded with the Inline XBRL document) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. A. O. SMITH CORPORATION Date: October 11, 2024 By: /s/James F. Stern James F. Stern Executive Vice President, General Counsel and Secretary
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EX-99.1 2 a10112024exhibit991.htm EX-99.1 Document Media Relations: Curt Selby 414-359-4100 [email protected] Investor Relations: Helen Gurholt 414-359-4157 [email protected] FOR IMMEDIATE RELEASE October 11, 2024 A. O. Smith Announces Preliminary Third Quarter Results and Provides Revised 2024 Full Year Guidance Summary (Comparisons are year-over-year (“YoY”), unless otherwise noted) • Preliminary third quarter sales of $903 million, a decrease of 4%, due to lower sales in China and North America water heating • Preliminary third quarter earnings per share (“EPS”) of $0.82, a decrease of 9% • Preliminary cash provided by operations of $360 million and preliminary free cash flow of $283 million in the first nine months of 2024 • Lowered full year EPS guidance to be between $3.70 and $3.85 compared to prior guidance of $3.95 to $4.10 Milwaukee, Wis.— Global water technology company A. O. Smith Corporation (“the Company”) (NYSE: AOS) today announced preliminary third quarter results and provided revised full year guidance. Key Financial Metrics Preliminary Third Quarter (in millions, except per share amounts) Preliminary Q3 2024 Q3 2023 % Change YoY Net sales $902.6 $937.5 -4% Diluted earnings per share $0.82 $0.90 -9% “As discussed on our second quarter earnings call, we saw increasing consumer demand headwinds in July which led us to be cautious about the back half of the year in China. Those headwinds were more challenging than we expected through the third quarter and, as a result, our constant currency sales to third parties declined 17% compared to last year. In North America, residential and commercial water heater orders were lower than expected in the third quarter and while we anticipated a quarter-over-quarter decline, order demand was weaker than expected in both the wholesale and retail channels. We believe our order demand was impacted by a larger than expected price increase-related pre-buy in the first half of the year and was also negatively influenced by our improved lead times. However, we entered the third quarter with solid residential water heater backlogs, which drove July shipments and partially offset the weak third quarter orders,” noted Kevin J. Wheeler, chairman and chief executive officer. “While disappointed in the volumes in the quarter and the associated negative impact on our operational efficiencies, I’m pleased with our strong and stable customer relationships, our improved lead times and the actions that our teams initiated in response to market conditions.” Third Quarter 2024 Segment Sales North America Preliminary third quarter sales of $703 million were slightly below 2023 sales of $710 million as pricing benefits and higher boiler and water treatment volumes in North America were offset by lower volumes of residential and commercial water heaters in North America. Rest of World Preliminary third quarter sales of $210 million declined 10% year-over-year. Local currency third party sales in China decreased 17% in 2024, primarily due to lower volumes of our core water heating and water treatment products. Sales in India increased 12% in local currency year-over-year driven by continued strong demand. Revised Outlook 2024 Outlook (in millions, except per share amounts) 2023 2024 Outlook Actual Low End High End Net sales $3,853 $3,800 $3,900 Diluted earnings per share $3.69 $3.70 $3.85 Adjusted earnings per share 1 $3.81 $3.70 $3.85 1 Excludes restructuring and impairment expenses. See accompanying GAAP to Non-GAAP reconciliations “We expect quarter-over-quarter improvement in North America water heater volumes in the fourth quarter; however, we project the softness in China will persist through the remainder of 2024. As a result, we have lowered our 2024 sales outlook to be approximately flat year-over-year. Additionally, we have lowered our full year 2024 EPS outlook to be between $3.70 and $3.85,” stated Wheeler. “As we have in the past, we are reviewing our operations in China and taking measures to optimize that business to align with the lower volumes. While we view recently announced China stimulus measures as positive, we believe it will take time before any impacts on consumer demand are seen. In North America, we expect improved volumes through the rest of the year. However, we remain cautious about residential and commercial water heater end market demand. We have adjusted our North America residential and commercial water heater facilities to improve efficiency at lower volumes and are able to scale up quickly as volumes increase to maintain our improved lead times.” On Oct. 7, the Company’s board of directors approved a 6% increase in the dividend rate, resulting in a five-year compound annual dividend growth rate of 8%. The Company has increased its dividend each year for more than 30 years. A. O. Smith will release final financial results for the third quarter on Oct. 22, 2024 and host a webcasted conference call at 10:00 a.m. (Eastern Daylight Time) to discuss those results and our guidance for the remainder of the year. The call can be heard live on the Company’s website, investor.aosmith.com. An audio replay of the call will be available on the Company’s website after the live event. To provide improved transparency into the operating results of its business, the Company is providing non-GAAP measures. Free cash flow is defined as cash provided by operations less capital expenditures. Adjusted EPS exclude the impact of pension settlement income and impairment expenses. Reconciliations from GAAP measures to non-GAAP measures are provided in the financial information included in this news release. Preliminary Results; Forward-looking Statements The preliminary financial results for the third quarter 2024 represent the most current information available to management and reflect estimates and assumptions. Our actual results may differ materially from these preliminary results due to the completion of our financial closing procedures, final adjustments and other developments that may arise between the date of this release and the time that financial results for the third quarter 2024 are finalized. These preliminary financial results should not be viewed as a substitute for full financial statements prepared in accordance with U.S. GAAP. This release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “continue,” “guidance,” “outlook” or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: further softening in U.S. residential water heater demand; negative impacts to the Company, particularly the demand for its products, resulting from global inflationary pressures or a potential recession in one or more of the markets in which the Company participates; the Company’s ability to continue to obtain commodities, components, parts and accessories on a timely basis through its supply chain and at expected costs; negative impacts to demand for the Company’s products, particularly commercial products, as a result of changes in commercial property usage that followed the COVID-19 pandemic; further weakening in North American. residential or commercial construction or instability in the Company’s replacement markets; inability of the Company to implement or maintain pricing actions; inconsistent recovery of the Chinese economy or a further decline in the growth rate of consumer spending or housing sales in China; the availability or timing of China stimulus programs; negative impact to the Company’s businesses from international tariffs, trade disputes and geopolitical differences, including the conflicts in Ukraine, the Middle East and attacks on commercial shipping vessels in the Red Sea; potential further weakening in the high-efficiency gas boiler segment in the U.S.; substantial defaults in payment by, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; foreign currency fluctuations; the Company’s inability to successfully integrate or achieve its strategic objectives resulting from acquisitions; the possibility that the parties will fail to obtain necessary regulatory approvals or to satisfy any of the other conditions to the proposed acquisition; failure to realize the expected benefits of acquisitions or expected synergies; competitive pressures on the Company’s businesses, including new technologies and new competitors; the impact of potential information technology or data security breaches; changes in government regulations or regulatory requirements; the inability to respond to secular trends toward decarbonization and energy efficiency; and adverse developments in general economic, political and business conditions in key regions of the world. Additional factors are discussed in the Company’s filings with Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, quarterly reports on Form 10-Q and current reports on Form 8-K. Forward-looking statements included in this news release are made only as of the date of this release, and the Company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the Company, or persons acting on its behalf, are qualified entirely by these cautionary statements. About A. O. Smith Celebrating its 150 th year of business, A. O. Smith Corporation, with headquarters in Milwaukee, Wisconsin, is a global leader applying innovative technology and energy-efficient solutions to products manufactured and marketed worldwide. Listed on the New York Stock Exchange (NYSE: AOS), the Company is one of the world’s leading manufacturers of residential and commercial water heating equipment and boilers, as well as water treatment products. For more information, visit www.aosmith.com. SOURCE: A. O. Smith Corporation ### A. O. SMITH CORPORATION 2024 EPS Guidance and 2023 Adjusted EPS (unaudited) The following is a reconciliation of diluted EPS to adjusted EPS (non-GAAP) (all items are net of tax): 2024 Guidance 2023 Diluted EPS (GAAP) $ 3.70 - 3.85 $ 3.69 Restructuring and impairment expense — 0.12 (1) Adjusted EPS (non-GAAP) $ 3.70 - 3.85 $ 3.81 (1) Includes pre-tax restructuring and impairment expenses of $15.7 million and $3.1 million, within the Rest of World segment and Corporate expenses, respectively. A. O. SMITH CORPORATION Free Cash Flow (dollars in millions) (unaudited) The following is a reconciliation of reported cash flow from operating activities to free cash flow (non-GAAP): Nine Months Ended September 30, 2024 Preliminary 2023 Cash provided by operating activities (GAAP) $ 359.9 $ 439.0 Less: Capital expenditures (77.4) (42.7) Free cash flow (non-GAAP) $ 282.5 $ 396.3
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EX-99.1 2 a6302024exhibit991.htm EX-99.1 Document Exhibit 99.1 Media Relations: Curt Selby 414-359-4191 [email protected] Investor Relations: Helen Gurholt 414-359-4157 [email protected] FOR IMMEDIATE RELEASE July 23, 2024 A. O. Smith Reports Record Sales in the Second Quarter Second Quarter 2024 Highlights (Comparisons are year-over-year (“YoY”), unless otherwise noted) • Record sales of $1 billion, an increase of 7%, driven by higher water heater volumes • Diluted earnings per share (EPS) of $1.06, a YoY increase of 2% and an increase of 5% compared to prior year adjusted EPS • Reaffirm 2024 sales outlook of an increase of 3% to 5% • Narrow EPS guidance to a range of between $3.95 and $4.10 • Recently announced Pureit acquisition expected to close by the end of 2024 Milwaukee, Wis.— Global water technology company A. O. Smith Corporation (“the Company”) (NYSE: AOS) today announced its second quarter 2024 results. Key Financial Metrics Second Quarter (in millions, except per share amounts) Q2 2024 Q2 2023 % Change YoY Net sales $1,024.3 $960.8 7% Net earnings $156.2 $157.0 -1% Adjusted earnings $156.2 $152.5 1 2% Diluted earnings per share $1.06 $1.04 2% Adjusted earnings per share $1.06 $1.01 1 5% 1 Excludes pension settlement income in 2023. See accompanying GAAP to Non-GAAP reconciliations for further details. “A. O. Smith achieved record sales in the second quarter on higher residential and commercial water heater volumes in North America, including sales of our recently launched gas -tankless products, which we began shipping in the quarter. Additionally, we are pleased to see our North American boiler business resume its growth trajectory,” noted Kevin J. Wheeler, chairman and chief executive officer. “I continue to be impressed by our global team’s commitment to execution and meeting our customers’ needs to generate record topline performance. I also look forward to welcoming the Pureit team to the A. O. Smith family before the end of the year.” Second Quarter 2024 Segment-level Performance North America 2024 sales of $790.7 million improved 9% over 2023, primarily driven by higher water heater and commercial boilers volumes. 2024 sales also benefited from pricing actions. Segment earnings were $198.4 million and segment margin was 25.1% in 2024 compared to segment earnings of $199.1 million and segment margin of 27.6% in 2023. The year-over-year decreases in segment earnings and segment margin were in line with expectations and were largely a result of higher material costs, primarily steel, and higher selling expenses to support our sales growth initiatives including the launch of gas-tankless products. 2023 adjusted segment earnings and adjusted segment margin were $194.1 million and 26.9%, respectively. Rest of World Sales of $244.8 million were essentially flat to prior year sales and included inter-segment sales related to our recently launched tankless water heaters which are manufactured in China for the North America market. Additionally, there was an unfavorable currency translation impact of approximately $7 million primarily related to sales in China. Local currency third party sales in China increased 2% in 2024, primarily driven by higher volumes of kitchen products and combi boilers, partially offset by lower sales of residential water treatment products in China. Sales in India increased 16% in local currency in 2024 driven by continued strong demand. Segment earnings were $25.9 million and segment margin was 10.6% in 2024 compared to segment earnings of $28.3 million and segment margin of 11.6% in the prior year. 2024 segment margin attributed to third party sales was 11.5%. The lower segment earnings and segment margin in 2024 compared to segment earnings and segment margin in 2023, were primarily driven by an unfavorable product mix and sales promotions in China. Balance Sheet, Liquidity and Capital Allocation As of June 30, 2024, cash and marketable securities balances totaled $233.3 million and debt totaled $140.4 million, resulting in a leverage ratio of 6.8% as measured by total debt-to-total capitalization. Cash provided by operations was $164.0 million and free cash flow was $119.1 million in the first half of 2024, which decreased year-over-year primarily as a result of higher inventory and accounts receivable balances, higher incentive payments associated with record sales and profits earned in 2023, which more than offset higher earnings and higher trade accounts payable balances. Consistent with its long-standing strategy to grow through acquisitions and further penetrate high potential markets, the Company signed an agreement earlier this month to acquire Pureit from Unilever for $120 million, subject to customary adjustments. Pureit, a leading water purification business in South Asia, offers a broad range of residential water purification solutions and has annual sales of approximately USD $60 million, primarily in India. The acquisition fits squarely in the Company’s core capabilities and doubles the Company’s market penetration in South Asia. As part of its commitment to return capital to shareholders, the Company repurchased 1.8 million shares at a cost of $153.2 million in the first half of 2024. As of June 30, 2024, authority remained to repurchase approximately 3.7 million additional shares. The Company expects to spend $300 million repurchasing shares in 2024. On July 8, 2024, the Company’s board of directors approved a $0.32 per share dividend for shareholders of record on July 31, payable on August 15. Outlook 2024 Outlook (in millions, except per share amounts) 2023 2024 Outlook Actual Low End High End Net sales $3,853 $3,970 $4,050 Diluted earnings per share $3.69 $3.95 $4.10 Adjusted earnings per share $3.81 2 $3.95 $4.10 2 Excludes restructuring and impairment expenses. See accompanying GAAP to Non-GAAP reconciliations “North American water heater industry shipments were resilient in the first half of the year buoyed by stable replacement demand and prebuy ahead of our March 1st price increase. We are pleased with our performance in China in the quarter; however we see continued economic headwinds and remain cautious about the second half of the year. As we consider these and other factors, we reaffirm our 2024 sales projection of an increase between 3% and 5% year-over-year and narrow our full-year EPS guidance of a range of between $3.95 and $4.10, a 6% year-over-year increase over adjusted EPS, at the mid-point,” stated Wheeler. The Company’s guidance excludes the potential impacts from future acquisitions. A. O. Smith will host a webcasted conference call at 10:00 a.m. (Eastern Daylight Time) today. The call can be heard live on the Company’s website. An audio replay of the call will be available on the Company’s website after the live event. To access the archived audio replay, go to the “Investors” page and select the Second Quarter 2024 Earnings Call link. To provide improved transparency into the operating results of its business, the Company is providing non-GAAP measures. Free cash flow is defined as cash provided by operations less capital expenditures. Adjusted earnings, adjusted EPS, adjusted segment earnings and adjusted corporate expenses exclude the impact of pension settlement income and impairment expenses. Reconciliations from GAAP measures to non-GAAP measures are provided in the financial information included in this news release. Forward-looking Statements This release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “continue,” “guidance,” “outlook” or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: softening in U.S. residential water heater demand; negative impacts to the Company, particularly the demand for its products, resulting from global inflationary pressures or a potential recession in one or more of the markets in which the Company participates; the Company’s ability to continue to obtain commodities, components, parts and accessories on a timely basis through its supply chain and at expected costs; negative impacts to demand for the Company’s products, particularly commercial products, as a result of changes in commercial property usage that followed the COVID-19 pandemic; further weakening in U.S. residential or commercial construction or instability in the Company’s replacement markets; inability of the Company to implement or maintain pricing actions; inconsistent recovery of the Chinese economy or a further decline in the growth rate of consumer spending or housing sales in China; negative impact to the Company’s businesses from international tariffs, trade disputes and geopolitical differences, including the conflicts in Ukraine, the Middle East and attacks on commercial shipping vessels in the Red Sea; potential further weakening in the high-efficiency gas boiler segment in the U.S.; substantial defaults in payment by, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; foreign currency fluctuations; the Company’s inability to successfully integrate or achieve its strategic objectives resulting from acquisitions; the possibility that the parties will fail to obtain necessary regulatory approvals or to satisfy any of the other conditions to the proposed acquisition; failure to realize the expected benefits of acquisitions or expected synergies; competitive pressures on the Company’s businesses, including new technologies and new competitors; the impact of potential information technology or data security breaches; changes in government regulations or regulatory requirements; the inability to respond to secular trends toward decarbonization and energy efficiency; and adverse developments in general economic, political and business conditions in key regions of the world. Additional factors are discussed in the Company’s filings with Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, quarterly reports on Form 10-Q and current reports on Form 8-K. Forward-looking statements included in this news release are made only as of the date of this release, and the Company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the Company, or persons acting on its behalf, are qualified entirely by these cautionary statements. About A. O. Smith Celebrating its 150th year of business, A. O. Smith Corporation, with headquarters in Milwaukee, Wisconsin, is a global leader applying innovative technology and energy-efficient solutions to products manufactured and marketed worldwide. Listed on the New York Stock Exchange (NYSE: AOS), the Company is one of the world’s leading manufacturers of residential and commercial water heating equipment and boilers, as well as water treatment products. For more information, visit www.aosmith.com . SOURCE: A. O. Smith Corporation ### A. O. SMITH CORPORATION Condensed Consolidated Statement of Earnings (dollars in millions, except share data) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net sales $ 1,024.3 $ 960.8 $ 2,003.1 $ 1,927.2 Cost of products sold 628.3 576.1 1,222.4 1,168.4 Gross profit 396.0 384.7 780.7 758.8 Selling, general and administrative expenses 188.5 180.3 380.7 367.5 Impairment expense — — — 15.6 Interest expense 1.8 4.5 2.8 8.5 Other income, net (0.9) (9.0) (2.1) (13.0) Earnings before provision for income taxes 206.6 208.9 399.3 380.2 Provision for income taxes 50.4 51.9 95.5 96.3 Net earnings $ 156.2 $ 157.0 $ 303.8 $ 283.9 Diluted earnings per share of common stock (1) $ 1.06 $ 1.04 $ 2.05 $ 1.87 Average common shares outstanding (000’s omitted) 147,600 151,541 147,949 151,719 (1) Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding. A. O. SMITH CORPORATION Condensed Consolidated Balance Sheet (dollars in millions) (Unaudited) June 30, 2024 December 31, 2023 ASSETS: Cash and cash equivalents $ 216.1 $ 339.9 Marketable securities 17.2 23.5 Receivables 649.9 596.0 Inventories 544.7 497.4 Other current assets 53.4 43.5 Total Current Assets 1,481.3 1,500.3 Net property, plant and equipment 603.2 597.5 Goodwill and other intangibles 980.2 970.1 Operating lease assets 33.6 37.3 Other assets 99.3 108.7 Total Assets $ 3,197.6 $ 3,213.9 LIABILITIES AND STOCKHOLDERS’ EQUITY: Trade payables $ 574.6 $ 600.4 Accrued payroll and benefits 70.4 92.2 Accrued liabilities 152.7 177.4 Product warranties 64.7 65.3 Debt due within one year 10.0 10.0 Total Current Liabilities 872.4 945.3 Long-term debt 130.4 117.3 Operating lease liabilities 24.7 27.9 Other liabilities 258.5 279.0 Stockholders’ equity 1,911.6 1,844.4 Total Liabilities and Stockholders’ Equity $ 3,197.6 $ 3,213.9 A. O. SMITH CORPORATION Condensed Consolidated Statement of Cash Flows (dollars in millions) (unaudited) Six Months Ended June 30, 2024 2023 Operating Activities Net earnings $ 303.8 $ 283.9 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation & amortization 39.2 38.1 Stock based compensation expense 10.4 8.6 Deferred income taxes (1.5) — Non-cash impairment — 15.6 Pension settlement income — (6.0) Pension settlement income non-cash taxes — 1.5 Net changes in operating assets and liabilities: Current assets and liabilities (173.2) (66.4) Noncurrent assets and liabilities (14.7) (15.1) Cash Provided by Operating Activities 164.0 260.2 Investing Activities Capital expenditures (44.9) (24.2) Acquisitions (21.3) — Investment in marketable securities (50.9) (14.7) Net proceeds from sale of marketable securities 57.0 72.7 Cash (Used in) Provided by Investing Activities (60.1) 33.8 Financing Activities Long-term debt incurred (repaid) 14.3 (139.3) Common stock repurchases (153.2) (69.6) Net proceeds from stock option activity 9.4 8.3 Dividends paid (94.2) (90.6) Cash Used in Financing Activities (223.7) (291.2) Effect of exchange rate changes on cash and cash equivalents (4.0) (15.1) Net decrease in cash and cash equivalents (123.8) (12.3) Cash and cash equivalents - beginning of period 339.9 391.2 Cash and Cash Equivalents - End of Period $ 216.1 $ 378.9 A. O. SMITH CORPORATION Business Segments (dollars in millions) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net sales North America $ 790.7 $ 722.3 $ 1,557.0 $ 1,475.0 Rest of World 244.8 244.2 471.7 463.3 Inter-segment sales (11.2) (5.7) (25.6) (11.1) $ 1,024.3 $ 960.8 $ 2,003.1 $ 1,927.2 Earnings North America (1) $ 198.4 $ 199.1 $ 397.1 $ 387.7 Rest of World (2) 25.9 28.3 43.1 33.6 Inter-segment earnings elimination (0.1) — (0.4) — 224.2 227.4 439.8 421.3 Corporate expense (3) (15.8) (14.0) (37.7) (32.6) Interest expense (1.8) (4.5) (2.8) (8.5) Earnings before income taxes 206.6 208.9 399.3 380.2 Provision for incomes taxes 50.4 51.9 95.5 96.3 Net earnings $ 156.2 $ 157.0 $ 303.8 $ 283.9 Additional Information (1) Adjustments: North America includes pension settlement income of: $ — $ (5.0) $ — $ (5.0) (2) Adjustments: Rest of World includes impairment expense of: — — — 12.5 (3) Adjustments: Corporate expense includes pension settlement income of: — (1.0) — (1.0) includes impairment expense of: — — — 3.1 A. O. SMITH CORPORATION Adjusted Earnings and Adjusted Earnings Per Share (dollars in millions, except per share data) (unaudited) The following is a reconciliation of net earnings and diluted earnings per share to adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net Earnings (GAAP) $ 156.2 $ 157.0 $ 303.8 $ 283.9 Impairment expense, before tax — — — 15.6 Pension settlement income, before tax — (6.0) — (6.0) Tax effect on above items — 1.5 — 1.5 Adjusted Earnings (non-GAAP) $ 156.2 $ 152.5 $ 303.8 $ 295.0 Diluted Earnings Per Share (GAAP) (1) $ 1.06 $ 1.04 $ 2.05 $ 1.87 Impairment expense per diluted share, before tax — — — 0.10 Pension settlement income per diluted share, before tax — (0.04) — (0.04) Tax effect on above items per diluted share — 0.01 — 0.01 Adjusted Earnings Per Share (non-GAAP) (1) $ 1.06 $ 1.01 $ 2.05 $ 1.94 (1) Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding. A. O. SMITH CORPORATION Adjusted Segment Earnings (dollars in millions) (unaudited) The following is a reconciliation of reported earnings before provision for income taxes to total segment earnings (non-GAAP) and adjusted segment earnings (non-GAAP): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Earnings Before Provision for Income Taxes (GAAP) $ 206.6 $ 208.9 $ 399.3 $ 380.2 Add: Corporate expense (1) 15.8 14.0 37.7 32.6 Add: Interest expense 1.8 4.5 2.8 8.5 Total Segment Earnings (non-GAAP) $ 224.2 $ 227.4 $ 439.8 $ 421.3 North America (2) $ 198.4 $ 199.1 $ 397.1 $ 387.7 Rest of World (3) 25.9 28.3 43.1 33.6 Inter-segment earnings elimination (0.1) — (0.4) — Total Segment Earnings (non-GAAP) $ 224.2 $ 227.4 $ 439.8 $ 421.3 Additional Information (1) Corporate expense $ (15.8) $ (14.0) $ (37.7) $ (32.6) Pension settlement income, before tax — (1.0) — (1.0) Impairment expense, before tax — — — 3.1 Adjusted Corporate expense (non-GAAP) $ (15.8) $ (15.0) $ (37.7) $ (30.5) (2) North America $ 198.4 $ 199.1 $ 397.1 $ 387.7 Pension settlement income, before tax — (5.0) — (5.0) Adjusted North America (non-GAAP) $ 198.4 $ 194.1 $ 397.1 $ 382.7 (3) Rest of World $ 25.9 $ 28.3 $ 43.1 $ 33.6 Impairment expense, before tax — — — 12.5 Adjusted Rest of World (non-GAAP) $ 25.9 $ 28.3 $ 43.1 $ 46.1 A. O. SMITH CORPORATION Free Cash Flow (dollars in millions) (unaudited) The following is a reconciliation of reported cash flow from operating activities to free cash flow (non-GAAP): Six Months Ended June 30, 2024 2023 Cash provided by operating activities (GAAP) $ 164.0 $ 260.2 Less: Capital expenditures (44.9) (24.2) Free cash flow (non-GAAP) $ 119.1 $ 236.0 A. O. SMITH CORPORATION 2024 Adjusted EPS Guidance and 2023 Adjusted EPS (unaudited) The following is a reconciliation of diluted EPS to adjusted EPS (non-GAAP) (all items are net of tax): 2024 Guidance 2023 Diluted EPS (GAAP) $ 3.95 - 4.10 $ 3.69 Restructuring and impairment expense — 0.12 (1) Adjusted EPS (non-GAAP) $ 3.95 - 4.10 $ 3.81 (1) Includes pre-tax restructuring and impairment expenses of $15.7 million and $3.1 million, within the Rest of World segment and Corporate expenses, respectively.
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2024-07-23
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2.02
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. Results of Operations and Financial Condition On July 23, 2024, A. O. Smith Corporation (“the Company”) issued a news release announcing the Company’s results for the quarter ended June 30, 2024. A copy of the Company’s news release is attached as Exhibit 99.1 to this Current Report on Form 8-K (this “Current Report”) and is incorporated by reference herein.
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2024-07-23
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9.01
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Financial Statements and Exhibits The following exhibit is being filed herewith: (99 .1) News Release of A. O. Smith Corporation, dated July 23, 2024 104 Cover Page Interactive Data File (embedded with the Inline XBRL document) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. A. O. SMITH CORPORATION Date: July 23, 2024 By: /s/James F. Stern James F. Stern Executive Vice President, General Counsel and Secretary
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2024-07-15
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8.01
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. Other Events On July 15, 2024, A. O. Smith Corporation ("the Company") issued a news release announcing the Company’s entry into an agreement to acquire Pureit from Unilever. The purchase price will be approximately USD $120 million in cash, subject to customary adjustments. Pureit offers a broad range of residential water purification solutions, primarily in India. A copy of the Company's news release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
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2024-07-15
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Financial Statements and Exhibits The following exhibit is being filed herewith: (99 .1) News Release of A. O. Smith Corporation, dated July 1 5 , 202 4 104 Cover Page Interactive Data File (embedded with the Inline XBRL document) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. A. O. SMITH CORPORATION Date: July 15, 2024 By: /s/James F. Stern James F. Stern Executive Vice President, General Counsel and Secretary
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2024-07-15
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99.1
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99.1
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EX-99.1 2 a07152024exhibit991.htm EX-99.1 Document Exhibit 99.1 Media Relations: Curt Selby 414-359-4191 [email protected] Investor Relations: Helen Gurholt 414-359-4157 [email protected] FOR IMMEDIATE RELEASE July 15, 2024 A. O. Smith to Acquire Pureit, a Leading Water Purification Business in South Asia Milwaukee, Wis. — Global water technology company A. O. Smith Corporation (the “Company”) (NYSE: AOS) announced today that it has signed an agreement to acquire Pureit from Unilever. Pureit offers a broad range of residential water purification solutions and has annual sales of approximately USD $60 million, primarily in India. The purchase price will be approximately USD $120 million in cash, subject to customary adjustments. The Company expects to complete the acquisition of Pureit by the end of 2024 and does not expect the acquisition to have a material impact on earnings in the first year. “We believe the addition of Pureit will strengthen our leadership position as a global supplier of premium water treatment products and double our market penetration in South Asia. The acquisition will also support our corporate strategy by enhancing our premium product portfolio and distribution capabilities,” said Kevin J. Wheeler, the Company’s chairman and chief executive officer. “Pureit’s culture of innovation, strong brand recognition and dedication to customer service will be an excellent addition to our premium brand positioning and broad product portfolio in the region. We look forward to welcoming the Pureit team to the A. O. Smith family.” Eduardo Campanella, president of Unilever Home Care, said, “This sale of Pureit marks another milestone on our journey to evolve our portfolio towards higher-growth spaces, in line with our Growth Action Plan. Pureit provides essential water purification solutions to millions of loyal consumers, and I am confident the brand will thrive further under the ownership of A. O. Smith.” A. O. Smith will release its second quarter 2024 financial results before the market opens on Tuesday, July 23, and host a webcasted conference call at 10 a.m. (Eastern Time). Additional details on the acquisition will be provided at that time. Forward-looking Statements This release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “continue,” “guidance,” “outlook” or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: the possibility that the parties will fail to obtain necessary regulatory approvals or to satisfy any of the other conditions to the proposed transaction; potential negative effects relating to the announcement of the proposed transaction; failure to realize the expected benefits of the transaction or expected synergies; difficulties in predicting results of operations of an acquired business; negative impact to the Company’s businesses from international tariffs, trade disputes and geopolitical differences, including the conflicts in Ukraine, the Middle East and attacks on commercial shipping vessels in the Red Sea; foreign currency fluctuations; the Company’s inability to successfully integrate or achieve its strategic objectives resulting from acquisitions; competitive pressures on the Company’s businesses, including new technologies and new competitors; changes in government regulations or regulatory requirements; and adverse developments in general economic, political and business conditions in key regions of the world. Forward-looking statements included in this news release are made only as of the date of this release, and the Company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the Company, or persons acting on its behalf, are qualified entirely by these cautionary statements. About A. O. Smith Celebrating its 150th year of business, A. O. Smith Corporation, with headquarters in Milwaukee, Wisconsin, is a global leader applying innovative technology and energy-efficient solutions to products manufactured and marketed worldwide. Listed on the New York Stock Exchange (NYSE: AOS), the Company is one of the world’s leading manufacturers of residential and commercial water heating equipment and boilers, as well as water treatment products. For more information, visit www.aosmith.com . SOURCE: A. O. Smith Corporation ###
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2024-05-09
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5.02
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. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. On May 9, 2024, A. O. Smith Corporation (the “Company”) announced that Mark Petrarca, Senior Vice President - Human Resources and Public Affairs, will retire effective August 1, 2024. Mr. Petrarca has 25 years of service with the Company.
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2024-05-09
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9.01
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Financial Statements and Exhibits The following exhibit is being filed herewith: 104 Cover Page Interactive Data File (em bedded with the Inline XBRL document) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. A. O. SMITH CORPORATION Date: May 9, 2024 By: /s/James F. Stern James F. Stern Executive Vice President, General Counsel and Secretary
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2024-04-25
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2.02
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. Results of Operations and Financial Condition On April 25, 2024, A. O. Smith Corporation (“the Company”) issued a news release announcing the Company’s results for the quarter ended March 31, 2024. A copy of the Company’s news release is attached as Exhibit 99.1 to this Current Report on Form 8-K (this “Current Report”) and is incorporated by reference herein.
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2024-04-25
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9.01
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Financial Statements and Exhibits The following exhibit is being filed herewith: (99 .1) News Release of A. O. Smith Corporation, dated April 25, 2024 104 Cover Page Interactive Data File (embedded with the Inline XBRL document) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. A. O. SMITH CORPORATION Date: April 25, 2024 By: /s/James F. Stern James F. Stern Executive Vice President, General Counsel and Secretary
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2024-04-25
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99.1
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99.1
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EX-99.1 2 a3312024exhibit991.htm EX-99.1 Document Exhibit 99.1 Media Relations: Mark Petrarca 414-359-4100 [email protected] Investor Relations: Helen Gurholt 414-359-4157 [email protected] FOR IMMEDIATE RELEASE April 25, 2024 A. O. Smith Reports Strong First Quarter Performance First Quarter 2024 Highlights (Comparisons are year-over-year (“YoY”), unless otherwise noted) • Sales of $979 million, an increase of 1% • Earnings per share (EPS) of $1.00, a YoY increase of 19% and an increase of 6% compared to prior year adjusted EPS • Strong operating cash flow of $107 million and free cash flow of $85 million • Reaffirm 2024 Outlook: ◦ Sales outlook of an increase of 3% to 5% ◦ EPS guidance with a range of between $3.90 and $4.15 Milwaukee, Wis.— Global water technology company A. O. Smith Corporation (“the Company”) (NYSE: AOS) today announced its first quarter 2024 results. Key Financial Metrics First Quarter (in millions, except per share amounts) Q1 2024 Q1 2023 % Change YoY Net sales $978.8 $966.4 1% Net earnings $147.6 $126.9 16% Adjusted earnings $147.6 $142.5 1 4% Diluted earnings per share $1.00 $0.84 19% Adjusted earnings per share $1.00 $0.94 1 6% 1 Excludes impairment expenses related to the company's sale of its business in Turkey in 2023. See accompanying GAAP to Non-GAAP reconciliations “A. O. Smith delivered a strong performance in the first quarter primarily driven by higher sales of our commercial high efficiency water heaters and lower steel costs in North America as we saw continued healthy water heater demand. We achieved sales growth of 6% in China, despite the ongoing macroeconomic challenges in that country, as our recently released kitchen products continue to be well received in the market,” noted Kevin J. Wheeler, chairman and chief executive officer. “I am pleased with our global team’s efforts in servicing our customers during the quarter.” First Quarter 2024 Segment-level Performance North America 2024 sales of $766.3 million improved 2% over 2023, primarily driven by higher volumes of commercial water heaters and a positive mix shift toward high efficiency water heaters including heat pumps. Segment earnings were $198.7 million and segment margin was 25.9% in 2024 compared to segment earnings of $188.6 million and segment margin of 25.1% in 2023. The year-over-year increases in segment earnings and segment margin were primarily due to the benefits of positive mix toward high efficiency products, higher commercial water heater volumes and lower steel costs that were partially offset by higher selling and advertising expenses to support sales growth. Rest of World Sales of $226.9 million increased 4% year-over-year, including inter-segment sales of approximately $8 million related to our recently launched tankless water heaters that are manufactured in China for the North America market, as well as an unfavorable currency translation impact of $9 million primarily related to sales in China. The increase in local currency third party sales of 6% in 2024 was primarily driven by higher volumes of kitchen products in China. Sales in India increased 16% in local currency in 2024 as demand remained strong across all product categories. Segment earnings were $17.2 million and segment margin was 7.6% in 2024 compared to segment earnings of $5.3 million and segment margin of 2.4% in the prior year. 2024 segment margin attributed to third party sales was 7.9%. 2023 adjusted segment earnings and adjusted segment margin, which exclude an impairment charge associated with the company’s sale of its business in Turkey, were $17.8 million and 8.1%, respectively. The lower segment earnings and segment margin in 2024 compared to adjusted segment earnings and adjusted segment margin in 2023, were primarily driven by promotions to support the launch of new products in China and product mix. Balance Sheet, Liquidity and Capital Allocation As of March 31, 2024, cash and marketable securities balances totaled $303.1 million and debt totaled $119.7 million, resulting in a leverage ratio of 6.0% as measured by total debt-to-total capitalization. Cash provided by operations was $106.6 million and free cash flow was $84.6 million in the first three months of 2024, which decreased year-over-year primarily as a result of higher incentive payments associated with record sales and profits earned in 2023 and higher inventory levels that more than offset higher earnings and lower accounts payable balances. As part of its commitment to return capital to shareholders, the Company repurchased 906,000 shares at a cost of $74.5 million in the first three months of 2024. As of March 31, 2024, authority remained to repurchase approximately 4.6 million additional shares. The Company expects to spend $300 million repurchasing shares in 2024. On April 9, 2024, the Company’s board of directors approved a $0.32 per share dividend for shareholders of record on April 30, payable on May 15. Outlook 2024 Outlook (in millions, except per share amounts) 2023 2024 Outlook Actual Low End High End Net sales $3,853 $3,970 $4,050 Diluted earnings per share $3.69 $3.90 $4.15 Adjusted earnings per share $3.81 2 $3.90 $4.15 2 Excludes restructuring and impairment expenses. See accompanying GAAP to Non-GAAP reconciliations “The water heater industry shipment levels in early 2024 were as we expected and included some pull forward of demand ahead of the March 1 price increases. We expect to continue to benefit from resilient replacement demand as well as an improved outlook for residential new home construction. We are pleased with the growth we achieved in the Rest of World segment in the quarter, particularly in China, where economic challenges persist. We expect the mid-teens growth in India to continue. Given these factors, we reaffirm our 2024 sales projection of an increase between 3% and 5% year-over-year and our full-year EPS guidance of a range of between $3.90 and $4.15, a 6% year-over-year increase at the mid-point,” stated Wheeler. The Company’s guidance excludes the potential impacts from future acquisitions. A. O. Smith will host a webcasted conference call at 10:00 a.m. (Eastern Daylight Time) today. The call can be heard live on the Company’s website. An audio replay of the call will be available on the Company’s website after the live event. To access the archived audio replay, go to the “Investors” page and select the First Quarter 2024 Earnings Call link. To provide improved transparency into the operating results of its business, the Company is providing non-GAAP measures. Free cash flow is defined as cash provided by operations less capital expenditures. Adjusted earnings, adjusted EPS, adjusted segment earnings and adjusted corporate expenses exclude the impact of impairment expenses. Reconciliations from GAAP measures to non-GAAP measures are provided in the financial information included in this news release. Forward-looking Statements This release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “continue,” “guidance,” “outlook” or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: softening in U.S. residential water heater demand; negative impacts to the Company, particularly the demand for its products, resulting from global inflationary pressures or a potential recession in one or more of the markets in which the Company participates; the Company’s ability to continue to obtain commodities, components, parts and accessories on a timely basis through its supply chain and at expected costs; negative impacts to demand for the Company’s products, particularly commercial products, as a result of changes in commercial property usage that followed the COVID-19 pandemic; further weakening in U.S. residential or commercial construction or instability in the Company’s replacement markets; inability of the Company to implement or maintain pricing actions; inconsistent recovery of the Chinese economy or a further decline in the growth rate of consumer spending or housing sales in China; negative impact to the Company’s businesses from international tariffs, trade disputes and geopolitical differences, including the conflicts in Ukraine, the Middle East and attacks on commercial shipping vessels in the Red Sea; potential further weakening in the high-efficiency gas boiler segment in the U.S.; substantial defaults in payment by, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; foreign currency fluctuations; the Company’s inability to successfully integrate or achieve its strategic objectives resulting from acquisitions; competitive pressures on the Company’s businesses, including new technologies and new competitors; the impact of potential information technology or data security breaches; changes in government regulations or regulatory requirements; the inability to respond to secular trends toward decarbonization and energy efficiency; and adverse developments in general economic, political and business conditions in key regions of the world. Forward-looking statements included in this news release are made only as of the date of this release, and the Company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the Company, or persons acting on its behalf, are qualified entirely by these cautionary statements. About A. O. Smith Celebrating its 150 th year of business, A. O. Smith Corporation, with headquarters in Milwaukee, Wisconsin, is a global leader applying innovative technology and energy-efficient solutions to products manufactured and marketed worldwide. Listed on the New York Stock Exchange (NYSE: AOS), the Company is one of the world’s leading manufacturers of residential and commercial water heating equipment and boilers, as well as water treatment products. For more information, visit www.aosmith.com . SOURCE: A. O. Smith Corporation ### A. O. SMITH CORPORATION Condensed Consolidated Statement of Earnings (dollars in millions, except share data) (unaudited) Three Months Ended March 31, 2024 2023 Net sales $ 978.8 $ 966.4 Cost of products sold 594.1 592.3 Gross profit 384.7 374.1 Selling, general and administrative expenses 192.2 187.2 Impairment expense — 15.6 Interest expense 1.0 4.0 Other income, net (1.2) (4.0) Earnings before provision for income taxes 192.7 171.3 Provision for income taxes 45.1 44.4 Net earnings $ 147.6 $ 126.9 Diluted earnings per share of common stock $ 1.00 $ 0.84 Average common shares outstanding (000’s omitted) 148,297 151,900 A. O. SMITH CORPORATION Condensed Consolidated Balance Sheet (dollars in millions) (Unaudited) March 31, 2024 December 31, 2023 ASSETS: Cash and cash equivalents $ 251.6 $ 339.9 Marketable securities 51.5 23.5 Receivables 584.6 596.0 Inventories 522.3 497.4 Other current assets 51.5 43.5 Total Current Assets 1,461.5 1,500.3 Net property, plant and equipment 599.0 597.5 Goodwill and other intangibles 985.0 970.1 Operating lease assets 35.7 37.3 Other assets 101.0 108.7 Total Assets $ 3,182.2 $ 3,213.9 LIABILITIES AND STOCKHOLDERS’ EQUITY: Trade payables $ 557.7 $ 600.4 Accrued payroll and benefits 54.3 92.2 Accrued liabilities 197.1 177.4 Product warranties 64.3 65.3 Debt due within one year 10.0 10.0 Total Current Liabilities 883.4 945.3 Long-term debt 109.7 117.3 Operating lease liabilities 26.4 27.9 Other liabilities 280.9 279.0 Stockholders’ equity 1,881.8 1,844.4 Total Liabilities and Stockholders’ Equity $ 3,182.2 $ 3,213.9 A. O. SMITH CORPORATION Condensed Consolidated Statement of Cash Flows (dollars in millions) (unaudited) Three Months Ended March 31, 2024 2023 Operating Activities Net earnings $ 147.6 $ 126.9 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation & amortization 19.6 19.2 Stock based compensation expense 8.3 7.0 Deferred income taxes 2.9 — Non-cash impairment — 15.6 Net changes in operating assets and liabilities: Current assets and liabilities (73.7) (50.6) Noncurrent assets and liabilities 1.9 1.8 Cash Provided by Operating Activities 106.6 119.9 Investing Activities Capital expenditures (22.0) (10.7) Acquisitions (21.1) — Investment in marketable securities (48.1) (14.7) Net proceeds from sale of marketable securities 20.0 15.6 Cash Used in Investing Activities (71.2) (9.8) Financing Activities Long-term debt repaid (6.8) (3.7) Common stock repurchases (74.5) (53.1) Net proceeds from stock option activity 8.0 4.7 Dividends paid (47.3) (45.4) Cash Used in Financing Activities (120.6) (97.5) Effect of exchange rate changes on cash and cash equivalents (3.1) 2.4 Net (decrease) increase in cash and cash equivalents (88.3) 15.0 Cash and cash equivalents - beginning of period 339.9 391.2 Cash and Cash Equivalents - End of Period $ 251.6 $ 406.2 A. O. SMITH CORPORATION Business Segments (dollars in millions) (unaudited) Three Months Ended March 31, 2024 2023 Net sales North America $ 766.3 $ 752.7 Rest of World 226.9 219.1 Inter-segment sales (14.4) (5.4) $ 978.8 $ 966.4 Earnings North America $ 198.7 $ 188.6 Rest of World (1) 17.2 5.3 Inter-segment earnings elimination (0.3) — 215.6 193.9 Corporate expense (2) (21.9) (18.6) Interest expense (1.0) (4.0) Earnings before income taxes 192.7 171.3 Provision for incomes taxes 45.1 44.4 Net earnings $ 147.6 $ 126.9 Additional Information (1) Adjustments: Rest of World includes impairment expense of: $ — $ 12.5 (2) Adjustments: Corporate expense includes impairment expense of: $ — $ 3.1 A. O. SMITH CORPORATION Adjusted Earnings and Adjusted Earnings Per Share (dollars in millions, except per share data) (unaudited) The following is a reconciliation of net earnings and diluted earnings per share to adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP): Three Months Ended March 31, 2024 2023 Net Earnings (GAAP) $ 147.6 $ 126.9 Impairment expense, before tax — 15.6 Tax effect on above items — — Adjusted Earnings (non-GAAP) $ 147.6 $ 142.5 Diluted Earnings Per Share (GAAP) $ 1.00 $ 0.84 Impairment expense per diluted share, before tax — 0.10 Tax effect on above items per diluted share — — Adjusted Earnings Per Share (non-GAAP) $ 1.00 $ 0.94 A. O. SMITH CORPORATION Adjusted Segment Earnings (dollars in millions) (unaudited) The following is a reconciliation of reported earnings before provision for income taxes to total segment earnings (non-GAAP) and adjusted segment earnings (non-GAAP): Three Months Ended March 31, 2024 2023 Earnings Before Provision for Income Taxes (GAAP) $ 192.7 $ 171.3 Add: Corporate expense (1) 21.9 18.6 Add: Interest expense 1.0 4.0 Total Segment Earnings (non-GAAP) $ 215.6 $ 193.9 North America $ 198.7 $ 188.6 Rest of World (2) 17.2 5.3 Inter-segment earnings elimination (0.3) — Total Segment Earnings (non-GAAP) $ 215.6 $ 193.9 Additional Information (1) Corporate expense $ (21.9) $ (18.6) Impairment expense, before tax — 3.1 Adjusted Corporate expense (non-GAAP) $ (21.9) $ (15.5) (2) Rest of World $ 17.2 $ 5.3 Impairment expense, before tax — 12.5 Adjusted Rest of World (non-GAAP) $ 17.2 $ 17.8 A. O. SMITH CORPORATION Free Cash Flow (dollars in millions) (unaudited) The following is a reconciliation of reported cash flow from operating activities to free cash flow (non-GAAP): Three Months Ended March 31, 2024 2023 Cash provided by operating activities (GAAP) $ 106.6 $ 119.9 Less: Capital expenditures (22.0) (10.7) Free cash flow (non-GAAP) $ 84.6 $ 109.2 A. O. SMITH CORPORATION 2024 Adjusted EPS Guidance and 2023 Adjusted EPS (unaudited) The following is a reconciliation of diluted EPS to adjusted EPS (non-GAAP) (all items are net of tax): 2024 Guidance 2023 Diluted EPS (GAAP) $ 3.90 - 4.15 $ 3.69 Restructuring and impairment expense — 0.12 (1) Adjusted EPS (non-GAAP) $ 3.90 - 4.15 $ 3.81 (1) Includes pre-tax restructuring and impairment expenses of $15.7 million and $3.1 million, within the Rest of World segment and Corporate expenses, respectively.
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AOS
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2024-04-15
| 91,142
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8-K
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5.07
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. Submission of Matters to a Vote of Security Holders. A. O. Corporation (the “Company”) held its Annual Meeting of Stockholders on April 9, 2024, for the purposes of the election of the Company’s Board of Directors, to hold an advisory vote to approve the compensation of our named executive officers, to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024, and to consider a stockholder proposal requesting a Board report on our hiring practices with respect to formerly incarcerated people. The voting results for the election of the Company’s Board of Directors were as follows: Class A Common Stock Directors For Authority Withheld Broker Non-Vote Ronald D. Brown 25,655,156 1,800 0 Todd W. Fister 25,656,956 0 0 Lois Martin 25,656,956 0 0 Ajita G. Rajendra 25,655,876 1,080 0 Mark D. Smith 25,655,156 1,800 0 Kevin J. Wheeler 25,656,956 0 0 Common Stock Directors For Authority Withheld Broker Non-Vote Victoria M. Holt 45,165,675 55,963,896 6,813,929 Dr. Ilham Kadri 33,524,783 67,604,788 6,813,929 Michael M. Larsen 94,662,598 6,466,973 6,813,929 Christopher L. Mapes 69,493,765 31,635,807 6,813,929 The advisory voting results for the approval of the compensation of our named executive officers were as follows: Total Votes For 34,550,676 Against 1,202,529 Abstain 16,709 Broker Non-Votes 681,393 The voting results for the ratification of the appointment of Ernst & Young LLP as the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2024, were as follows: Total Votes For 35,439,034 Against 1,002,466 Abstain 9,806 Broker Non-Votes 0 The voting results for a stockholder proposal requesting a Board report on our hiring practices with respect to formerly incarcerated people were as follows: Total Votes For 2,421,076 Against 33,258,311 Abstain 90,526 Broker Non-Votes 681,393 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. A. O. SMITH CORPORATION Date: April 15, 2024 By: /s/James F. Stern James F. Stern Executive Vice President, General Counsel and Secretary
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AOS
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2024-03-18
| 91,142
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8-K
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5.02
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. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. On March 18, 2024, A. O. Smith Corporation (“A. O. Smith”) announced that Stephen M. Shafer has been named President and Chief Operating Officer of the Company effective March 18, 2024. Mr. Shafer joins A. O. Smith from 3M Company, where he spent over 14 years in various roles, most recently as President of its Automotive and Aerospace Solutions Division. Kevin J. Wheeler, who has been serving as Chairman, President and Chief Executive Officer of the Company, will continue to serve with the title of Chairman and Chief Executive Officer.
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AOS
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2024-03-18
| 91,142
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8-K
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9.01
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Financial Statements and Exhibits The following exhibit is being filed herewith: (99 .1) News Release of A. O. Smith Corporation, dated March 18, 202 4 104 Cover Page Interactive Data File (embedded with the Inline XBRL document) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. A. O. SMITH CORPORATION Date: March 18, 2024 By: /s/James F. Stern James F. Stern Executive Vice President, General Counsel and Secretary
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AOS
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2024-03-18
| 91,142
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99.1
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99.1
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EX-99.1 2 a03182024exhibit991.htm EX-99.1 Document Exhibit 99.1 Media Relations: Mark Petrarca 414-359-4100 [email protected] Investor Relations: Helen Gurholt 414-359-4157 [email protected] FOR IMMEDIATE RELEASE March 18, 2024 A. O. Smith Appoints Stephen Shafer President and Chief Operating Officer Experienced global executive to lead operations Milwaukee, Wis.— Global water technology company A. O. Smith Corporation (“the Company”) (NYSE: AOS) announced today the appointment of Stephen Shafer as president and chief operating officer, effective March 18, 2024. In this role, Shafer will lead the company’s global business units, including operations, engineering and IT. “Steve will work with me and our team to drive enhanced performance and continued growth in sales and profitability,” said Kevin Wheeler, chairman and CEO. Shafer is an accomplished business leader with deep global experience in manufacturing and leading highly innovative businesses. He joined 3M Company in 2010 and has held several positions with increasing levels of responsibility in multiple 3M business units in both the U.S. and China. Most recently, he served as president of the Automotive and Aerospace Solutions Division for 3M Company. Prior to 3M, Steve worked for McKinsey & Company and Ford Motor Company holding various roles focusing on manufacturing, supply chain and operational improvement. “We are excited to welcome Steve to A. O. Smith, where his strategic business acumen and extensive experience in global operations will prove invaluable as we continue to create value for our customers, employees and shareholders,” said Wheeler. “Joining A. O. Smith is a great opportunity and I am looking forward to contributing to the continued growth and success of this iconic company. Working closely with the senior leaders in the organization to continue to improve operating performance, while maintaining a strong focus on innovation, safety and quality will be priorities for me,” said Shafer. Shafer earned his MBA from Harvard Business School and his Bachelor of Science degree in Industrial Engineering from Northwestern University. He resides in Minneapolis, MN and will be relocating to the Milwaukee area. About A. O. Smith Celebrating its 150 th year of business, A. O. Smith Corporation, headquartered in Milwaukee, Wis., is a global leader applying innovative technology and energy-efficient solutions to products manufactured and marketed worldwide. Listed on the New York Stock Exchange (NYSE: AOS), the Company is one of the world’s leading manufacturers of residential and commercial water heating equipment and boilers, as well as a manufacturer of water treatment products. For more information, visit www.aosmith.com . SOURCE: A. O. Smith Corporation ###
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AOS
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2024-01-30
| 91,142
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8-K
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2.02
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. Results of Operations and Financial Condition On January 30, 2024, A. O. Smith Corporation (“the Company”) issued a news release announcing the Company’s results for the year ended December 31, 2023. A copy of the Company’s news release is attached as Exhibit 99.1 to this Current Report on Form 8-K (this “Current Report”) and is incorporated by reference herein.
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AOS
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2024-01-30
| 91,142
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8-K
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9.01
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Financial Statements and Exhibits The following exhibit is being filed herewith: (99 .1) News Release of A. O. Smith Corporation, dated January 3 0 , 202 4 104 Cover Page Interactive Data File (embedded with the Inline XBRL document) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. A. O. SMITH CORPORATION Date: January 30, 2024 By: /s/James F. Stern James F. Stern Executive Vice President, General Counsel and Secretary
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AOS
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2024-01-30
| 91,142
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99.1
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99.1
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EX-99.1 2 a12312023exhibit991.htm EX-99.1 Document Exhibit 99.1 Media Relations: Mark Petrarca 414-359-4100 [email protected] Investor Relations: Helen Gurholt 414-359-4157 [email protected] FOR IMMEDIATE RELEASE January 30, 2024 A. O. Smith Reports Record Sales and Earnings in 2023 and Introduces 2024 Guidance 2023 Highlights (Comparisons are year-over-year (“YoY”), unless otherwise noted) • Record sales of $3.9 billion, an increase of 3% primarily driven by higher water heater volumes • Record net earnings of $556.6 million and record earnings per share (EPS) of $3.69 driven by higher volumes and improved operating margin in North America • Adjusted earnings of $574.8 million resulted in adjusted EPS of $3.81, an increase of 21% • Strong operating cash flow and free cash flow of $670 million and $598 million, respectively, and free cash flow conversion of 107% • 2024 Outlook: ◦ Sales increase of 3% to 5% ◦ EPS of between $3.90 and $4.15 Milwaukee, Wis.— Global water technology company A. O. Smith Corporation (“the Company”) (NYSE: AOS) today announced its full year and fourth quarter 2023 results. Key Financial Metrics Full Year (in millions, except per share amounts) 2023 2022 % Change YoY Net sales $3,853 $3,754 3% Net earnings $556.6 $235.7 136% Adjusted earnings $574.8 1 $488.7 2 18% Diluted earnings per share $3.69 $1.51 144% Adjusted earnings per share $3.81 1 $3.14 2 21% 1 Excludes restructuring and impairment expenses and pension settlement (income) expense. See accompanying GAAP to Non-GAAP reconciliations 2 Excludes pension settlement expense, legal judgment income, terminated acquisition-related expenses and non-operating pension expense. See accompanying GAAP to Non-GAAP reconciliations Fourth Quarter (in millions, except per share amounts) Q4 2023 Q4 2022 % Change YoY Net sales $988.1 $936.1 6% Net earnings (loss) $137.3 $(120.1) 214% Adjusted earnings $144.4 3 $131.6 4 10% Diluted earnings (loss) per share $0.92 $(0.78) 218% Adjusted earnings per share $0.97 3 $0.86 4 13% 3 Excludes restructuring and impairment expenses and pension settlement expense. See accompanying GAAP to Non-GAAP reconciliations 4 Excludes pension settlement expense and non-operating pension expense. See accompanying GAAP to Non-GAAP reconciliations “For a third consecutive year, A. O. Smith delivered record sales in 2023, led by resilient North America water heater demand. We achieved sales growth in China of 4% in local currency despite continued challenges in the Chinese economy,” noted Kevin J. Wheeler, chairman and chief executive officer. “I am pleased with our global team’s outstanding performance across all aspects of our business, as they continue to operate our facilities at a higher level of efficiency, take care of our customers, and launch new and exciting products that deliver value.” Segment-level Performance North America Full Year 2023 2023 sales of $2,922.9 million improved 4% over 2022, primarily driven by strong demand for water heater products, which was partially offset by lower boiler volumes and pricing. Segment earnings were $726.7 million and segment margin was 24.9% in 2023 compared to segment earnings of $266.0 million and segment margin of 9.4% in 2022. The significant year-over-year increases in segment earnings and segment margin were primarily due to a 2022 pre-tax non-cash pension settlement expense of $346.8 million. 2023 adjusted segment earnings were $726.0 million and adjusted segment margin was 24.8%. 2022 adjusted segment earnings and adjusted segment margin were $611.0 million and 21.7%, respectively. The higher adjusted segment earnings and adjusted segment margin in 2023 compared to 2022 were primarily driven by higher water heater volumes and lower material costs that were partially offset by higher selling, general and administrative expenses. Fourth Quarter 2023 Fourth quarter sales of $738.0 million increased 7% compared to fourth quarter sales in the prior year as higher water heater volumes were partially offset by lower boiler sales. Segment earnings were $169.0 million and segment margin was 22.9% in 2023 compared to segment losses of $187.5 million and segment margin of -27.1% in 2022. The significant year-over-year increases in segment earnings and segment margin were primarily due to a 2022 pre-tax non-cash pension settlement expense of $346.8 million. Fourth quarter 2023 adjusted segment earnings were $173.3 million and adjusted segment margin was 23.5%, compared to adjusted segment earnings of $161.2 million and adjusted segment margin of 23.3% in 2022. The year-over-year increase in adjusted segment earnings and adjusted segment margin was primarily due to higher water heater volumes. Rest of World Full Year 2023 Rest of World sales of $956.9 million decreased 1% year-over-year, including an unfavorable currency translation impact of $44 million primarily related to sales in China. In local currency, segment sales increased by approximately 4% year-over-year. The increase in local currency sales in 2023 was primarily driven by higher volumes in China, particularly of water treatment products and recently introduced kitchen products. Sales in India increased 15% in local currency in 2023 due to strong demand for water heater and water treatment products. Segment earnings were $83.4 million and segment margin was 8.7% in 2023 compared to segment earnings of $96.3 million and segment margin of 10.0% in the prior year. 2023 adjusted segment earnings and adjusted segment margin were $99.1 million and 10.4%, respectively. The higher adjusted segment earnings and adjusted segment margin in 2023 compared to 2022 were primarily driven by higher sales in China. Fourth Quarter 2023 Rest of World sales of $260.2 million increased 4% year-over-year, including an unfavorable currency translation impact of approximately $3 million related to sales in China. The increase in sales in the fourth quarter of 2023 was primarily driven by sales of recently introduced products in China. Sales in India increased 11% in local currency. Segment earnings were $26.6 million and segment margin was 10.2% in the fourth quarter of 2023, compared to segment earnings of $31.6 million and segment margin of 12.7% in the same period of 2022. Adjusted segment earnings and adjusted segment margin were $29.8 million and 11.5%, respectively, in the fourth quarter of 2023. The lower adjusted segment earnings and adjusted segment margin compared to the prior year were primarily due to promotions and advertising supporting the launch of new kitchen products in China. Balance Sheet, Liquidity and Capital Allocation As of December 31, 2023, cash and marketable securities balances totaled $363.4 million and debt totaled $127.3 million, resulting in a leverage ratio of 6.5% as measured by total debt-to-total capitalization. Cash provided by operations was $670.3 million and free cash flow was $597.7 million in 2023, representing year-over-year increases of 71% and 86%, respectively, primarily driven by higher earnings and lower working capital. As part of its commitment to return capital to shareholders, the Company repurchased 4.4 million shares at a cost of $306.5 million in 2023. As of December 31, 2023, authority remained to repurchase approximately 3.5 million additional shares. In January 2024, the Company’s board of directors increased the number of shares authorized for repurchase by an additional 2 million shares. The Company expects to spend $300 million repurchasing shares in 2024. On January 16, 2024, the Company’s board of directors approved a $0.32 per share dividend for shareholders of record on January 31, payable on February 15, marking 84 consecutive years of dividend payments. Outlook 2024 Outlook (in millions except per share amounts) 2023 2024 Outlook Actual Low End High End Net sales $3,853 $3,970 $4,050 Diluted earnings per share $3.69 $3.90 $4.15 Adjusted earnings per share $3.81 5 $3.90 $4.15 5 Excludes restructuring and impairment expenses. See accompanying GAAP to Non-GAAP reconciliations “2023 was a very successful year with record financial results and our 2024 outlook projects growth in both sales and earnings. In North America, we enter 2024 with optimism for continued end-market demand in water heating and a rebound in boiler and water treatment volumes after 2023 corrections in end-market inventories. In our Rest of the World segment, we see overall growth with stability in China as the economy continues to work through its challenges as well as continued mid-teens growth in India. Our outlook for 2024 projects our sales to increase between 3% and 5% year-over-year. We expect our full-year EPS to be between $3.90 and $4.15, a 6% year-over-year increase at the mid-point,” stated Wheeler. “We believe our strong balance sheet and free cash flow continue to provide us the liquidity to focus on our capital allocation priorities of organic growth, acquisitions, dividends and share repurchases, which we believe will enable us to execute our strategy to invest and grow profitably.” The Company’s guidance excludes the potential impacts from future acquisitions. A. O. Smith will host a webcasted conference call at 10:00 a.m. (Eastern Daylight Time) today. The call can be heard live on the Company’s website. An audio replay of the call will be available on the Company’s website after the live event. To access the archived audio replay, go to the “Investors” page and select the Fourth Quarter 2023 Earnings Call link. To provide improved transparency into the operating results of its business, the Company is providing non-GAAP measures. Free cash flow is defined as cash provided by operations less capital expenditures. Adjusted earnings, adjusted EPS, adjusted segment earnings and adjusted corporate expenses exclude the impact of impairment charges, pension settlement income and expenses, as well as legal judgment income, expenses associated with terminated acquisition costs and non-operating pension expenses. Reconciliations from GAAP measures to non-GAAP measures are provided in the financial information included in this news release. Forward-looking Statements This release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “continue,” “guidance,” “outlook” or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: softening in U.S. residential water heater demand; negative impacts to the Company, particularly the demand for its products, resulting from global inflationary pressures or a potential recession in one or more of the markets in which the Company participates; the Company’s ability to continue to obtain commodities, components, parts and accessories on a timely basis through its supply chain and at expected costs; negative impacts to demand for the Company’s products, particularly commercial products, as a result of changes in commercial property usage that followed the COVID-19 pandemic; further weakening in U.S. residential or commercial construction or instability in the Company’s replacement markets; inability of the Company to implement or maintain pricing actions; inconsistent recovery of the Chinese economy or a further decline in the growth rate of consumer spending or housing sales in China; negative impact to the Company’s businesses from international tariffs, trade disputes and geopolitical differences, including the conflicts in Ukraine, the Middle East and attacks on commercial shipping vessels in the Red Sea; potential further weakening in the high-efficiency gas boiler segment in the U.S.; substantial defaults in payment by, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; foreign currency fluctuations; the Company’s inability to successfully integrate or achieve its strategic objectives resulting from acquisitions; competitive pressures on the Company’s businesses, including new technologies and new competitors; the impact of potential information technology or data security breaches; changes in government regulations or regulatory requirements; the inability to respond to secular trends toward decarbonization and energy efficiency; and adverse developments in general economic, political and business conditions in key regions of the world. Forward-looking statements included in this news release are made only as of the date of this release, and the Company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the Company, or persons acting on its behalf, are qualified entirely by these cautionary statements. About A. O. Smith Celebrating its 150 th year of business, A. O. Smith Corporation, with headquarters in Milwaukee, Wis., is a global leader applying innovative technology and energy-efficient solutions to products manufactured and marketed worldwide. Listed on the New York Stock Exchange (NYSE: AOS), the Company is one of the world’s leading manufacturers of residential and commercial water heating equipment and boilers, as well as water treatment products. For more information, visit www.aosmith.com . SOURCE: A. O. Smith Corporation ### A. O. SMITH CORPORATION Statement of Earnings (Losses) (condensed consolidated financial statements - dollars in millions, except share data) Three Months Ended December 31, Twelve Months Ended December 31, (unaudited) (unaudited) 2023 2022 2023 2022 Net sales $ 988.1 $ 936.1 $ 3,852.8 $ 3,753.9 Cost of products sold 618.3 587.5 2,368.0 2,424.3 Gross profit 369.8 348.6 1,484.8 1,329.6 Selling, general and administrative expenses 185.0 168.9 727.4 670.9 Restructuring and impairment expenses 3.2 — 18.8 — Interest expense 1.1 3.4 12.0 9.4 Other expense (income) (1) 3.6 419.2 (6.9) 425.6 Earnings (losses) before provision for income taxes 176.9 (242.9) 733.5 223.7 Provision for (benefit from) income taxes (2) 39.6 (122.8) 176.9 (12.0) Net earnings (losses) $ 137.3 $ (120.1) $ 556.6 $ 235.7 Diluted earnings (losses) per share of common stock (3) $ 0.92 $ (0.78) $ 3.69 $ 1.51 Average common shares outstanding (000’s omitted) 149,436 153,158 151,016 155,779 (1) Other expense (income) includes pension settlement expense of $417.3 million in the three and twelve months ended December 31, 2022. (2) Provision for (benefit from) income taxes includes a benefit of ($167.7) million in the three and twelve months ended December 31, 2022, related to the pension settlement expense. (3) Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding. A. O. SMITH CORPORATION Balance Sheet (dollars in millions) (Unaudited) December 31, 2023 December 31, 2022 ASSETS: Cash and cash equivalents $ 339.9 $ 391.2 Marketable securities 23.5 90.6 Receivables 596.0 581.2 Inventories 497.4 516.4 Other current assets 43.5 54.3 Total Current Assets 1,500.3 1,633.7 Net property, plant and equipment 597.5 590.7 Goodwill and other intangibles 970.1 967.6 Operating lease assets 37.3 29.8 Other assets 108.7 110.5 Total Assets $ 3,213.9 $ 3,332.3 LIABILITIES AND STOCKHOLDERS’ EQUITY: Trade payables $ 600.4 $ 625.8 Accrued payroll and benefits 92.2 75.7 Accrued liabilities 177.4 159.1 Product warranties 65.3 63.6 Debt due within one year 10.0 10.0 Total Current Liabilities 945.3 934.2 Long-term debt 117.3 334.5 Pension liabilities 10.5 9.9 Operating lease liabilities 27.9 22.4 Other liabilities 268.5 283.6 Stockholders’ equity 1,844.4 1,747.7 Total Liabilities and Stockholders’ Equity $ 3,213.9 $ 3,332.3 A. O. SMITH CORPORATION Statement of Cash Flows (dollars in millions) Twelve Months Ended December 31, (unaudited) 2023 2022 Operating Activities Net earnings $ 556.6 $ 235.7 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation & amortization 78.3 76.9 Stock based compensation expense 11.5 11.1 Non-cash impairment 15.6 — Pension settlement (income) expense (0.9) 417.3 Pension settlement non-cash taxes 0.2 (167.7) Net changes in operating assets and liabilities: Current assets and liabilities 20.0 (194.1) Noncurrent assets and liabilities (11.0) 12.2 Cash Provided by Operating Activities 670.3 391.4 Investing Activities Capital expenditures (72.6) (70.3) Acquisitions (16.8) (8.0) Investment in marketable securities (63.1) (91.6) Net proceeds from sale of marketable securities 128.4 178.0 Cash (Used in) Provided by Investing Activities (24.1) 8.1 Financing Activities Long-term debt (repaid) incurred (218.1) 150.6 Common stock repurchases (306.5) (403.5) Net proceeds (payments) from stock option activity 23.4 (0.7) Dividends paid (183.5) (177.2) Cash Used In Financing Activities (684.7) (430.8) Effect of exchange rate changes on cash and cash equivalents (12.8) (20.8) Net decrease in cash and cash equivalents (51.3) (52.1) Cash and cash equivalents - beginning of period 391.2 443.3 Cash and Cash Equivalents - End of Period $ 339.9 $ 391.2 A. O. SMITH CORPORATION Business Segments (dollars in millions) Three Months Ended December 31, Twelve Months Ended December 31, (unaudited) (unaudited) 2023 2022 2023 2022 Net sales North America $ 738.0 $ 692.0 $ 2,922.9 $ 2,819.1 Rest of World 260.2 249.7 956.9 965.8 Inter-segment sales (10.1) (5.6) (27.0) (31.0) $ 988.1 $ 936.1 $ 3,852.8 $ 3,753.9 Earnings (losses) North America (1) $ 169.0 $ (187.5) $ 726.7 $ 266.0 Rest of World (2) 26.6 31.6 83.4 96.3 Inter-segment earnings elimination (0.5) (0.2) (0.5) (0.3) 195.1 (156.1) 809.6 362.0 Corporate expense (3) (17.1) (83.4) (64.1) (128.9) Interest expense (1.1) (3.4) (12.0) (9.4) Earnings (losses) before income taxes 176.9 (242.9) 733.5 223.7 Provision for (benefit from) income taxes (4) 39.6 (122.8) 176.9 (12.0) Net earnings (losses) $ 137.3 $ (120.1) $ 556.6 $ 235.7 Additional Information (1) North America includes pension settlement expense (income) of: $ 4.3 $ 346.8 $ (0.7) $ 346.8 includes pension expense of: — 1.9 — 9.7 includes legal judgment income of: — — — (11.5) (2) Rest of World includes restructuring and impairment expense of: 3.2 — 15.7 — (3) Corporate expense includes terminated acquisition-related expenses of: — — — 4.3 includes pension settlement expense (income) of: 0.8 70.5 (0.2) 70.5 includes impairment expense of: — — 3.1 — includes pension expense of: — 0.9 — 2.0 (4) Provision for (benefit from) income taxes includes a benefit of ($167.7) million in the three and twelve months ended December 31, 2022, related to the pension settlement expense. A. O. SMITH CORPORATION Adjusted Earnings and Adjusted Earnings Per Share (dollars in millions, except per share data) (unaudited) The following is a reconciliation of net earnings (loss) and diluted earnings (loss) per share to adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP): Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Net Earnings (Loss) (GAAP) $ 137.3 $ (120.1) $ 556.6 $ 235.7 Restructuring and impairment expenses, before tax 3.2 — 18.8 — Pension settlement expense (income), before tax 5.1 417.3 (0.9) 417.3 Pension expense, before tax — 2.8 — 11.7 Legal judgment income, before tax — — — (11.5) Terminated acquisition-related expenses, before tax — — — 4.3 Tax effect on above items (1.2) (168.4) 0.3 (168.8) Adjusted Earnings (non-GAAP) $ 144.4 $ 131.6 $ 574.8 $ 488.7 Diluted Earnings (Loss) Per Share (GAAP) (1) $ 0.92 $ (0.78) $ 3.69 $ 1.51 Restructuring and impairment expenses, per diluted share, before tax 0.02 — 0.12 — Pension settlement expense (income) per diluted share, before tax 0.04 2.72 — 2.68 Pension expense per diluted share, before tax — 0.02 — 0.08 Legal judgment income per diluted share, before tax — — — (0.07) Terminated acquisition-related expenses per diluted share, before tax — — — 0.03 Tax effect on above items per diluted share (0.01) (1.10) — (1.09) Adjusted Earnings Per Share (non-GAAP) (1) $ 0.97 $ 0.86 $ 3.81 $ 3.14 (1) Earnings (loss) per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding. A. O. SMITH CORPORATION Adjusted Segment Earnings (dollars in millions) (unaudited) The following is a reconciliation of reported earnings (loss) before provision for income taxes to total segment earnings (non-GAAP) and adjusted segment earnings (non-GAAP): Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Earnings (Loss) Before Provision for Income Taxes (GAAP) $ 176.9 $ (242.9) $ 733.5 $ 223.7 Add: Corporate expense (1) 17.1 83.4 64.1 128.9 Add: Interest expense 1.1 3.4 12.0 9.4 Total Segment Earnings (Loss) (non-GAAP) $ 195.1 $ (156.1) $ 809.6 $ 362.0 North America (2) $ 169.0 $ (187.5) $ 726.7 $ 266.0 Rest of World (3) 26.6 31.6 83.4 96.3 Inter-segment earnings elimination (0.5) (0.2) (0.5) (0.3) Total Segment Earnings (Loss) (non-GAAP) $ 195.1 $ (156.1) $ 809.6 $ 362.0 Additional Information (1) Corporate expense $ (17.1) $ (83.4) $ (64.1) $ (128.9) Pension settlement expense (income), before tax 0.8 70.5 (0.2) 70.5 Impairment expense, before tax — — 3.1 — Pension expense, before tax — 0.9 — 2.0 Terminated acquisition-related expenses, before tax — — — 4.3 Adjusted Corporate expense (non-GAAP) $ (16.3) $ (12.0) $ (61.2) $ (52.1) (2) North America $ 169.0 $ (187.5) $ 726.7 $ 266.0 Pension settlement expense (income), before tax 4.3 346.8 (0.7) 346.8 Pension expense, before tax — 1.9 — 9.7 Legal judgment income, before tax — — — (11.5) Adjusted North America (non-GAAP) $ 173.3 $ 161.2 $ 726.0 $ 611.0 (3) Rest of World $ 26.6 $ 31.6 $ 83.4 $ 96.3 Restructuring and impairment expenses, before tax 3.2 — 15.7 — Adjusted Rest of World (non-GAAP) $ 29.8 $ 31.6 $ 99.1 $ 96.3 A. O. SMITH CORPORATION Free Cash Flow (dollars in millions) (unaudited) The following is a reconciliation of reported cash flow from operating activities to free cash flow (non-GAAP): Twelve Months Ended December 31, 2023 2022 Cash provided by operating activities (GAAP) $ 670.3 $ 391.4 Less: Capital expenditures (72.6) (70.3) Free cash flow (non-GAAP) $ 597.7 $ 321.1 A. O. SMITH CORPORATION 2024 EPS Guidance and 2023 Adjusted EPS (unaudited) The following is a reconciliation of diluted EPS to adjusted EPS (non-GAAP) (all items are net of tax): 2024 Guidance 2023 Diluted EPS (GAAP) $ 3.90 - 4.15 $ 3.69 Restructuring and impairment expenses — 0.12 (1) Adjusted EPS (non-GAAP) $ 3.90 - 4.15 $ 3.81 (1) Includes pre-tax restructuring and impairment expenses of $15.7 million and $3.1 million, within the Rest of World segment and Corporate expenses, respectively.
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AOS
|
2024-01-05
| 91,142
|
8-K
|
5.02
|
. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. On January 2, 2024, David R. Warren, Senior Vice President of A. O. Smith Corporation (the “Company”), and President and General Manager of the Company’s North American Water Heating Business Unit, informed the Company that he will retire from the Company effective April 1, 2024. Mr. Warren has nearly 35 years of service with the Company in a variety of roles.
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AOS
|
2024-01-05
| 91,142
|
8-K
|
9.01
|
Financial Statements and Exhibits The following exhibit is being filed herewith: 104 Cover Page Interactive Data File (em bedded with the Inline XBRL document) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. A. O. SMITH CORPORATION Date: January 5, 2024 By: /s/James F. Stern James F. Stern Executive Vice President, General Counsel and Secretary
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AOS
|
2025-05-01
| 1,800
|
8-K
|
5.02
|
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangem ents of Certain Officers On April 25, 2025, Hubert L. Allen, Executive Vice President, General Counsel and Secretary, informed Abbott Laboratories that he plans to retire from the company after a period of transition. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ABBOTT LABORATORIES Date: May 1, 2025 By: /s/ Philip P. Boudreau Philip P. Boudreau Executive Vice President, Finance and Chief Financial Officer
|
ABT
|
2025-04-28
| 1,800
|
8-K
|
5.07
|
— Submission of Matters to a Vote of Security Holders. Abbott held its Annual Meeting of Shareholders on April 25, 2025. The following is a summary of the matters voted on at that meeting. (1) The shareholders elected Abbott’s entire Board of Directors. The persons elected to Abbott’s Board of Directors and the number of shares cast for, the number against, the number abstaining, and the number of broker non-votes, with respect to each of these persons, were as follows: Name Votes For Votes Against Abstain Broker Non-Votes Robert J. Alpern, M.D. 1,327,438,854 33,059,124 1,692,999 172,532,563 Claire Babineaux-Fontenot 1,353,692,234 6,825,428 1,673,315 172,532,563 Sally E. Blount, Ph.D. 1,336,357,728 23,419,311 2,413,938 172,532,563 Robert B. Ford 1,264,478,626 91,618,170 6,094,181 172,532,563 Paola Gonzalez 1,354,420,876 5,453,437 2,316,664 172,532,563 Michelle A. Kumbier 1,351,012,042 9,433,083 1,745,852 172,532,563 Darren W. McDew 1,350,972,305 8,767,072 2,451,601 172,532,563 Nancy McKinstry 1,116,607,201 243,925,809 1,657,967 172,532,563 Michael G. O’Grady 1,333,186,431 27,251,169 1,753,377 172,532,563 Michael F. Roman 1,344,216,165 16,199,533 1,775,279 172,532,563 Daniel J. Starks 1,305,438,905 55,076,532 1,675,540 172,532,563 John G. Stratton 1,187,966,267 172,531,567 1,693,143 172,532,563 (2) The shareholders ratified the appointment of Ernst & Young LLP as Abbott’s auditors. The number of shares cast in favor of the ratification of Ernst & Young LLP, the number against, the number abstaining, and the number of broker non-votes were as follows: For Against Abstain Broker Non-Votes 1,495,642,212 36,586,494 2,494,834 0 (3) The shareholders approved the compensation of Abbott’s named executive officers listed in the proxy statement for the Annual Meeting, with 89.90 percent of the votes cast voting “For” the proposal. The shareholder vote is advisory and non-binding. The number of shares cast in favor of approval, the number against, the number abstaining, and the number of broker non-votes were as follows: For Against Abstain Broker Non-Votes 1,224,503,868 130,699,445 6,987,664 172,532,563 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ABBOTT LABORATORIES Date: April 28, 2025 By: /s/ PHILIP P. BOUDREAU Philip P. Boudreau Executive Vice President, Finance and Chief Financial Officer
|
ABT
|
2025-04-16
| 1,800
|
8-K
|
2.02
|
Results of Operations and Financial Condition On April 16, 2025, Abbott Laboratories announced its results of operations for the first quarter 2025. Furnished as Exhibit 99.1, and incorporated herein by reference, is the news release issued by Abbott announcing those results. In that news release, Abbott uses various non-GAAP financial measures including, among others, net earnings excluding specified items. These non-GAAP financial measures adjust for factors that are unusual or unpredictable, such as expenses primarily associated with acquisitions, restructuring actions, fair value adjustments to the contingent consideration related to business acquisitions, impairment charges related to equity investments, certain regulatory costs, adjustments related to prior recognition of a significant non-cash deferred tax benefit, tax benefits associated with specified items, net tax expense as a result of the resolution of various tax positions related to prior years, and excess tax benefits associated with share-based compensation. These non-GAAP financial measures also exclude intangible amortization expense to provide greater visibility on the results of operations excluding these costs, similar to how Abbott’s management internally assesses performance. Abbott’s management believes the presentation of these non-GAAP financial measures provides useful information to investors regarding Abbott’s results of operations as these non-GAAP financial measures allow investors to better evaluate ongoing business performance. Abbott’s management also uses these non-GAAP financial measures internally to monitor performance of the businesses. Abbott, however, cautions investors to consider these non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.
|
ABT
|
2025-04-16
| 1,800
|
8-K
|
9.01
|
Financial Statements and Exhibits Exhibit No . Exhibit 99.1 Press Release dated April 16, 2025 (furnished pursuant to
|
ABT
|
2025-04-16
| 1,800
|
8-K
|
2.02
|
). 104 Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document). SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ABBOTT LABORATORIES Date: April 16, 2025 By: /s/ Philip P. Boudreau Philip P. Boudreau Executive Vice President, Finance and Chief Financial Officer
|
ABT
|
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