Press Releases
<< BackApril 15, 1998 at 12:00 AM EDT
A.O. Smith First Quarter Earnings Per Share Increase 82% to $.62 Per Share
A.O. Smith First Quarter Earnings Per Share Increase 82% to $.62 Per Share
First quarter sales of $223 million were $27 million or approximately fourteen percent higher than sales of $196 million for the same period the prior year.
"Improved performance on the part of the Storage & Fluid Handling Technologies and Water Systems Technologies platforms contributed to the higher first quarter results," Robert J. O'Toole, chairman and chief executive officer, observed.
"The company also benefited from the addition of the UPPCO subfractional horsepower motor business and higher interest income."
First quarter sales of Electric Motor Technologies, A.O. Smith's largest platform, were nineteen percent higher than the first quarter of 1997, reflecting the impact of the UPPCO acquisition that A.O. Smith acquired on March 31, 1997. Excluding UPPCO, higher sales in both pump and international business units were offset by declines in the company's heating, ventilating, and air conditioning (HVAC) businesses. Because of pricing pressures, operating profits were essentially flat when compared with the first quarter of 1997.
Stronger sales of both residential and commercial water heaters enabled the Water Systems Technology platform to increase its sales five percent to nearly $75 million in the first quarter. Unit volumes for both residential and commercial water heaters rose approximately eight percent during the fourth quarter. Operating profits were modestly higher.
The Storage & Fluid Handling Technologies platform benefited in the first quarter from improved sales of liquid storage tanks, continued strong sales of dry storage and Slurrystore® tanks, as well as increased sales of fiberglass pipe to the service station and petroleum production markets. First quarter sales of $37 million were seventeen percent higher than sales of $31 million in the first quarter last year. First quarter operating profits were significantly higher than the same period in 1997 due to the higher volumes, improved operating efficiency, and the impact of cost-reduction activities during the second half of last year.
A.O. Smith Corporation is a diversified manufacturer with headquarters in Milwaukee, Wis. Its major product lines include fractional horsepower, hermetic, and subfractional horsepower electric motors; residential and commercial water heaters; municipal, industrial, and agricultural storage tanks; and fiberglass reinforced piping systems.
A.O. SMITH CORPORATION AND SUBSIDIARIES
(condensed consolidated financial statements --
$000 omitted except per share data)
Statement of Earnings
Three Months ended
Continuing March 31
Sales 1998 1997
Electric Motor Technologies $111,839 $93,927
Water Systems Technologies 74,554 70,972
Storage & Fluid Handling Technologies 36,562 31,349
Net Sales 222,955 196,248
Costs and Expenses
Cost of Products Sold 177,186 153,450
Selling, General and Administrative 27,900 27,393
Interest Expense 1,624 2,244
Interest Income (1,712) (58)
Other Expense 722 990
Tax Provision 6,038 4,391
Total Costs and Expenses 211,758 188,410
Earnings Before Equity in Loss of Joint Ventures 11,197 7,838
Equity in Loss of Joint Ventures (1,019) (717)
Earnings from Continuing Operations 10,178 7,121
Discontinued
Earnings from Operations (less related
income tax of $6,324) 0 12,790
Net Earnings $10,178 $19,911
Basic Earnings Per Share of Common Stock
Continuing Operations $.63 $.35
Discontinued Operations -- $.63
Net Earnings $.63 $.98
Average Common Shares Outstanding 16,061,964 20,363,777
Diluted Earnings Per Share of Common Stock
Continuing Operations $.62 $.34
Discontinued Operations -- $.62
Net Earnings $.62 $.96
Average Common Shares Outstanding 16,475,673 20,711,242
A.O. SMITH CORPORATION
Balance Sheet
March 31 December 31
1998 1997
ASSETS:
Cash and cash equivalents $110,287 $145,896
Receivables 144,163 126,232
Inventories 79,132 79,049
Deferred income taxes 10,937 11,849
Other current assets 4,511 2,702
Total Current Assets 349,030 365,728
Net property, plant and equipment 208,267 207,756
Investments in and advances to joint ventures 27,237 25,605
Goodwill 51,354 51,783
Other assets 67,559 65,644
Total Assets $703,447 $716,516
LIABILITIES AND STOCKHOLDERS' EQUITY:
Trade payables $63,718 $61,299
Accrued payroll and benefits 22,683 26,397
Product warranty 8,188 7,972
Income taxes 8,044 6,607
Long-term debt due within one year 5,598 5,590
Other current liabilities 21,850 20,017
Total Current Liabilities 130,081 127,882
Long-term debt 101,605 100,972
Other liabilities 56,285 59,515
Deferred income taxes 28,650 28,442
Stockholders' equity 386,826 399,705
Total Liabilities and Stockholders' Equity $703,447 $716,516
A.O. SMITH CORPORATION
STATEMENT OF CASH FLOWS
Three Months ended
March 31
1998 1997
Operating Activities
Continuing
Net earnings $10,178 $7,121
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation & amortization 6,919 6,126
Deferred income taxes 1,120 (1,235)
Equity in loss of joint ventures 1,019 717
Net change in current assets and liabilities (15,631) (22,927)
Net change in noncurrent assets and liabilities (6,423) 4,341
Other 266 130
Cash Used by Operating Activities (2,552) (5,727)
Investing Activities
Capital expenditures (6,942) (11,052)
Capitalized purchased software costs (308) (240)
Investment in joint ventures (2,652) (3,451)
Acquisition of business (net of cash acquired) 0 (60,443)
Cash Used by Investing Activities (9,902) (75,186)
Cash Used by Continuing Operations
before Financing Activities (12,454) (80,913)
Discontinued
Cash Used by Discontinued Operations
before Financing Activities (814) (112,285)
Financing Activities
Long-term debt incurred 641 241,940
Long-term debt retired -- (4,675)
Purchase of common stock held in treasury (20,231) (46,828)
Proceeds from common stock options exercised -- 2,432
Tax benefit from exercise of stock options -- 287
Dividends paid (2,751) (3,560)
Cash Provided/(Used) by Financing Activities (22,341) 189,596
Net decrease in cash and cash equivalents (35,609) (3,602)
Cash and cash equivalents - beginning of period 145,896 6,405
Cash and Cash Equivalents - End of Period $110,287 $2,803