Press Releases
<< BackOctober 18, 1999 at 12:00 AM EDT
A. O. Smith Third Quarter Earnings Increase 13 Percent to $.52 Per Share
A. O. Smith Third Quarter Earnings Increase 13 Percent to $.52 Per Share
Net earnings for the quarter ended September 30 were $12.4 million, compared with 1998 third quarter net earnings of $11.0 million. Third quarter sales reached $318 million, more than 30 percent higher than 1998 third-quarter sales of $243 million.
"Demand in our principal motor markets remained strong throughout the quarter, sustained by a healthy domestic economy," Robert J. O'Toole, chairman and chief executive officer, observed.
"Electrical Products' results also reflected the first two months' contribution from the MagneTek motors acquisition completed in early August," O'Toole continued.
A. O. Smith's sales for the first nine months of 1999 were $838 million, $145 million higher than the $693 million sales reported for the first nine months of last year. Nine months earnings of $37.7 million or $1.59 per share were higher than the $33.8 million or $1.39 per share earned during the same period last year.
The Electric Motor Technologies platform, A. O. Smith's largest operating unit, benefited from higher demand in the heating, ventilating, and air conditioning (HVAC) market, increased export motor volume, and expanded sales in the garage door opener market segment. Third quarter sales increased 56 percent to $212 million, compared with 1998 third quarter sales of $135 million. The MagneTek electric motor operations, acquired on August 2, contributed $66 million to third quarter revenues. Operating profits increased significantly due to the higher volumes.
Water Systems Technologies' third quarter sales of $76 million were approximately $4 million higher than the same period in 1998. The company benefited from increased sales in China, which helped to offset relatively flat third-quarter domestic demand for commercial and residential water heaters. Third quarter profits were lower than the 1998 third quarter, as a result of the sluggish demand in domestic markets, and costs associated with the expansion of the Chinese water heater business.
The Storage & Fluid Handling Technologies platform reported sales of $31 million, a decrease of approximately 15 percent compared with the third quarter of 1998. Demand for storage tanks and fiberglass pipe continues to be adversely affected by weak capital spending in the industrial markets served by the platform. Operating profits were lower in the quarter, due to the lower volumes.
A. O. Smith Corporation is a diversified manufacturer with headquarters in Milwaukee, Wis. Its major product lines include fractional horsepower, hermetic, and integral horsepower electric motors; commercial and residential water heaters; municipal, industrial, and agricultural storage tanks; and fiberglass piping systems.
A. O. SMITH CORPORATION AND SUBSIDIARIES (condensed consolidated financial statements - $000 omitted except per share data)
Statement of Earnings
Three Months ended Nine Months ended September 30 September 30
Sales 1999 1998 1999 1998 Electric Motor Technologies $211,609 $135,309 $516,148 $360,913 Water Systems Technologies 75,797 71,685 236,536 220,534 Storage & Fluid Handling Technologies 30,901 36,260 85,729 111,442 Net Sales 318,307 243,254 838,413 692,889
Costs and Expenses Cost of Products Sold 258,445 196,232 674,292 552,245 Selling, General and Administrative 35,578 26,324 92,544 80,605 Interest Expense 4,380 1,974 8,879 5,191 Interest Income (512) (258) (1,066) (3,279) Other Expense 2,073 927 5,612 2,341 Tax Provision 5,977 6,356 20,469 19,587 Total Costs and Expenses 305,941 231,555 800,730 656,690
Earnings Before Equity in Loss of Joint Ventures 12,366 11,699 37,683 36,199 Equity in Loss of Joint Ventures -- (725) -- (2,418) Net Earnings $12,366 $10,974 $37,683 $33,781
Net Earnings Per Share of Common Stock (Diluted) $.52 $.46 $1.59 $1.39
Average Common Shares Outstanding (000's omitted) 23,845 23,958 23,771 24,316
A. O. SMITH CORPORATION Balance Sheet
September 30 December 31 1999 1998 ASSETS: Cash and cash equivalents $10,079 $37,666 Receivables 226,120 133,764 Inventories 162,225 99,984 Deferred income taxes 10,310 11,376 Other current assets 8,084 4,599
Total Current Assets 416,818 287,389
Net property, plant and equipment 331,533 248,770 Goodwill and other intangibles 253,384 149,282 Other assets 95,146 81,991
Total Assets $1,096,881 $767,432
LIABILITIES AND STOCKHOLDERS' EQUITY:
Trade payables $102,443 $57,429 Accrued payroll and benefits 39,254 31,385 Product warranty 12,792 7,892 Income taxes 5,207 6,786 Long-term debt due within one year 4,629 4,629 Other current liabilities 39,524 24,036
Total Current Liabilities 203,849 132,157
Long-term debt 344,354 131,203 Other liabilities 69,803 60,636 Deferred income taxes 50,377 42,343 Stockholders' equity 428,498 401,093
Total Liabilities and Stockholders' Equity $1,096,881 $767,432
A. O. SMITH CORPORATION STATEMENT OF CASH FLOWS
Nine Months ended September 30 1999 1998 Operating Activities Continuing Net earnings $37,683 $33,781
Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation & amortization 30,014 22,552 Equity in loss of joint ventures -- 2,418 Net change in current assets and liabilities (5,682) (6,963) Net change in noncurrent assets and liabilities (11,250) 2,751 Other (255) (99) Cash Provided by Operating Activities 50,510 54,440
Investing Activities Capital expenditures (26,595) (20,116) Capitalized purchased software costs (1,187) (1,308) Investment in joint ventures -- (8,066) Acquisition of business (251,892) (126,456) Cash Used by Investing Activities (279,674) (155,946)
Cash Used by Continuing Operations before Financing Activities (229,164) (101,506)
Discontinued Cash Used by Discontinued Operations before Financing Activities (1,761) (2,095)
Financing Activities Long-term debt incurred 217,780 30,590 Long-term debt retired (4,629) (5,590) Purchase of common stock held in treasury (2,745) (33,244) Other stock transactions 1,296 397 Dividends paid (8,364) (8,257) Cash Provided / (Used) by Financing Activities 203,338 (16,104)
Net decrease in cash and cash equivalents (27,587) (119,705) Cash and cash equivalents - beginning of period 37,666 145,896
Cash and Cash Equivalents - End of Period $10,079 $26,191