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, Jan. 30,
2024 /PRNewswire/ -- Global water technology company
A. O. Smith Corporation ("the Company") (NYSE: AOS) today announced
its full year and fourth quarter 2023 results.
A. O. Smith Reports Record Sales and
Earnings in 2023
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. For the full release, click here.
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 click
here. 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 150th
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.
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.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/a-o-smith-reports-record-sales-and-earnings-in-2023-and-introduces-2024-guidance-302047335.html
SOURCE A. O. Smith Corporation