QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) | |
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(Address of principal executive office) |
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(Zip Code) |
Title of Each Class |
Trading Symbol |
Name of Each Exchange on Which Registered | ||
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☒ |
Accelerated Filer |
☐ | |||
Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging growth company |
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Page |
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Part I. |
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3 |
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3 |
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4 |
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5 |
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6 |
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7- 23 |
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Item 2. |
24- 30 |
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Item 3. |
31 |
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Item 4. |
31 |
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Part II. |
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Item 1. |
32 |
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Item 2. |
32 |
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Item 6. |
32 |
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33 |
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34 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
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2019 |
2018 |
2019 |
2018 |
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Net sales |
$ | |
$ | |
$ | |
$ | |
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Cost of products sold |
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Gross profit |
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Selling, general and administrative expenses |
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Restructuring and impairment expenses |
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Interest expense |
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Other income |
( |
) | ( |
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Earnings before provision for income taxes |
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Provision for income taxes |
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Net Earnings |
$ | |
$ | |
$ | |
$ | |
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Net Earnings Per Share of Common Stock |
$ | |
$ | |
$ | |
$ | |
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Diluted Net Earnings Per Share of Common Stock |
$ | |
$ | |
$ | |
$ | |
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Dividends Per Share of Common Stock |
$ | |
$ | |
$ | |
$ | |
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2019 |
2018 |
2019 |
2018 |
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Net earnings |
$ | |
$ | |
$ | |
$ | |
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Other comprehensive (loss) earnings |
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Foreign currency translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Unrealized net (losses) gains on cash flow derivative instruments, less related income tax benefit (provision) of $ |
( |
) | |
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Adjustment to pension liability, less related income tax benefit (provision) of $ |
( |
) | |
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Comprehensive Earnings |
$ | |
$ | |
$ | |
$ | |
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(unaudited) September 30, 2019 |
December 31, 2018 |
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Assets |
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Current Assets |
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Cash and cash equivalents |
$ | |
$ | |
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Marketable securities |
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Receivables |
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Inventories |
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Other current assets |
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Total Current Assets |
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Property, plant and equipment |
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Less accumulated depreciation |
( |
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Net property, plant and equipment |
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Goodwill |
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Other intangibles |
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Operating lease assets |
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— |
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Other assets |
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Total Assets |
$ | |
$ | |
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Liabilities |
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Current Liabilities |
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Trade payables |
$ | |
$ | |
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Accrued payroll and benefits |
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Accrued liabilities |
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Product warranties |
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Debt due within one year |
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— |
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Total Current Liabilities |
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Long-term debt |
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Pension liabilities |
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Long-term operating lease liabilities |
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— |
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Other liabilities |
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Total Liabilities |
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Stockholders’ Equity |
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Class A Common Stock, $ |
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Common Stock, $ |
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Capital in excess of par value |
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Retained earnings |
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Accumulated other comprehensive loss |
( |
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Treasury stock at cost |
( |
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Total Stockholders’ Equity |
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Total Liabilities and Stockholders’ Equity |
$ | |
$ | |
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Nine Months Ended September 30, |
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2019 |
2018 |
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Operating Activities |
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Net earnings |
$ | |
$ | |
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Adjustments to reconcile net earnings to cash provided by (used in) operating activities: |
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Depreciation and amortization |
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Stock based compensation expense |
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Net changes in operating assets and liabilities: |
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Current assets and liabilities |
( |
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Noncurrent assets and liabilities |
( |
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Cash Provided by Operating Activities |
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Investing Activities |
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Capital expenditures |
( |
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Acquisition |
( |
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Investments in marketable securities |
( |
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Net proceeds from sale of marketable securities |
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Cash (Used in) Provided by Investing Activities |
( |
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Financing Activities |
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Long-term debt incurred (repaid) |
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( |
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Common stock repurchases |
( |
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Payment of contingent consideration |
( |
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Net (payments) proceeds from stock option activity |
( |
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Dividends paid |
( |
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Cash Used In Financing Activities |
( |
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Net decrease in cash and cash equivalents |
( |
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Cash and cash equivalents - beginning of period |
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Cash and Cash Equivalents - End of Period |
$ | |
$ | |
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2019 |
2018 |
2019 |
2018 |
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Class A Common Stock |
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Balance at the beginning of period |
$ | |
$ | |
$ | |
$ | |
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Conversion of Class A Common Stock |
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Balance at end of period |
$ | |
$ | |
$ | |
$ | |
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Common Stock |
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Balance at the beginning of period |
$ | |
$ | |
$ | |
$ | |
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Conversion of Class A Common Stock |
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Balance at end of period |
$ | |
$ | |
$ | |
$ | |
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Capital in Excess of Par Value |
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Balance at the beginning of period |
$ | |
$ | |
$ | |
$ | |
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Conversion of Class A Common Stock |
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Issuance of share units |
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( |
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Vesting of share units |
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— |
( |
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Stock based compensation expense |
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Exercises of stock options |
( |
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Stock incentives |
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Balance at end of period |
$ | |
$ | |
$ | |
$ | |
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Retained Earnings |
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Balance at the beginning of period |
$ | |
$ | |
$ | |
$ | |
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Net earnings |
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Cash dividends on stock |
( |
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Balance at end of period |
$ | |
$ | |
$ | |
$ | |
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Accumulated Other Comprehensive Loss (see Note 17) |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Treasury Stock |
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Balance at the beginning of period |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Exercise of stock options |
( |
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( |
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Stock incentives and directors’ compensation |
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— |
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Shares repurchased |
( |
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) | ( |
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Vesting of share units |
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Balance at end of period |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Total Stockholders’ Equity |
$ | |
$ | |
$ | |
$ | |
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1. |
Basis of Presentation |
2. |
Revenue Recognition |
(dollars in millions) |
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2019 |
2018 |
2019 |
2018 |
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North America |
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Water heaters and related parts |
$ | |
$ | |
$ | |
$ | |
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Boilers and related parts |
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Water treatment products (1) |
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Total North America |
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Rest of World |
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China |
$ | |
$ | |
$ | |
$ | |
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All other Rest of World |
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Total Rest of World |
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Inter-segment sales |
( |
) | ( |
) | ( |
) | ( |
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Total Net Sales |
$ | |
$ | |
$ | |
$ | |
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(1) |
Includes the results of Water-Right, Inc. from April 8, 2019, the date of acquisition |
3. |
Acquisitions |
April 8, 2019 (dollars in millions) |
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Current assets, net of cash acquired |
$ | |
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Property, plant and equipment |
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Intangible assets |
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Goodwill |
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Total assets acquired |
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Current liabilities |
( |
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Total liabilities assumed |
( |
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Net assets acquired |
$ | |
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4. |
Leases |
(dollars in millions) |
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September 30, 2019 |
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Liabilities |
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Short term: Accrued liabilities |
$ | |
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Long term: Operating lease liabilities |
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Total operating lease liabilities |
$ | |
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Less: Rent incentives and deferrals |
( |
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Assets |
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Operating lease assets |
$ | |
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Lease Term and Discount Rate |
September 30, 2019 |
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Weighted-average remaining lease term |
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Weighted-average discount rate |
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% |
(dollars in millions) |
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Three months ended |
Nine months ended |
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Lease Expense |
Classification |
September 30, 2019 |
September 30, 2019 |
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Operating lease expense (1) |
Cost of products sold |
$ |
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$ |
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Selling, general and administrative expenses |
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(1) |
Includes short-term lease expense of $ |
(dollars in millions) |
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September 30, 2019 |
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2019 |
$ | |
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2020 |
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2021 |
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2022 |
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2023 |
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After 2023 |
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Total lease payments |
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Less: imputed interest |
( |
) | ||
Present value of operating lease liabilities |
$ | |
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5. |
Restructuring and Impairment Expenses |
(dollars in millions) |
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Severance Costs |
Lease Exit Costs |
Total |
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Balance at January 1, 2019 |
$ | $ | $ | |||||||||
Cash payments |
( |
) | ( |
) | ||||||||
Balance at March 31, 2019 |
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Cash payments |
( |
) | ( |
) | ||||||||
Balance at June 30, 2019 |
$ | $ | $ | |||||||||
Cash payments |
( |
) | ( |
) | ||||||||
Balance at September 30, 2019 |
$ | $ | $ | |||||||||
6. |
Inventories |
(dollars in millions) |
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September 30, 2019 |
December 31, 2018 |
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Finished products |
$ | $ | ||||||
Work in process |
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Raw materials |
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Inventories, at FIFO cost |
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LIFO reserve |
( |
) | ( |
) | ||||
Net inventory |
$ | $ | ||||||
7. |
Product Warranties |
Three September 30, |
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(dollars in millions) |
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2019 |
2018 |
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Balance at July 1, |
$ | $ | ||||||
Expense |
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Claims settled |
( |
) | ( |
) | ||||
Balance at September 30, |
$ | $ | ||||||
Nine September 30, |
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(dollars in millions) |
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2019 |
2018 |
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Balance at January 1, |
$ | $ | ||||||
Expense |
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Claims settled |
( |
) | ( |
) | ||||
Balance at September 30, |
$ | $ | ||||||
8. |
Long-Term Debt |
9. |
Earnings per Share of Common Stock |
Three Months Ended September 30, |
Nine Months Ended September 30, |
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2019 |
2018 |
2019 |
2018 |
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Denominator for basic earnings per share - weighted average shares |
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Effect of dilutive stock options and share units |
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Denominator for diluted earnings per share |
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10. |
Stock Based Compensation |
Weighted- PerAvg. Share Exercise Price |
Number of Options |
Average Remaining Contractual Life |
Aggregate Intrinsic Value (dollars in millions) |
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Outstanding at January 1, 2019 |
$ | |||||||||||||||
Granted |
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Exercised |
( |
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Forfeited |
( |
) | ||||||||||||||
Outstanding at September 30, 2019 |
$ | |||||||||||||||
Exercisable at September 30, 2019 |
$ |
Nine Months Ended |
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2019 |
2018 |
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Expected life (years) |
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Risk-free interest rate |
% | % | ||||||
Dividend yield |
% | % | ||||||
Expected volatility |
% | % |
10. |
Stock Based Compensation (continued) |
Number of Units |
Weighted-Average Grant Date Value |
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Issued and unvested at January 1, 2019 |
$ | |||||||
Granted |
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Vested |
( |
) | ||||||
Forfeited |
( |
) | ||||||
Issued and unvested at September 30, 2019 |
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11. |
Pensions |
Three Months Ended September 30, |
Nine Months Ended September 30, |
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2019 |
2018 |
2019 |
2018 |
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Service cost |
$ | |
$ | |
$ | |
$ | |
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Interest cost |
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Expected return on plan assets |
( |
) | ( |
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Amortization of unrecognized loss |
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Amortization of prior service cost |
( |
) | ( |
) | ( |
) | ( |
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Defined benefit plan income |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
12. |
Segment Results |
(dollars in millions) |
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2019 |
2018 |
2019 |
2018 |
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Net sales |
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North America |
$ | |
$ | |
$ | |
$ | |
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Rest of World |
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Inter-segment |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
$ | |
$ | |
$ | |
$ | |
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Segment earnings |
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North America (1) |
$ | |
$ | |
$ | |
$ | |
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Rest of World |
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Inter-segment |
— |
— |
( |
) | — |
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Corporate expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Earnings before income taxes |
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Provision for income taxes |
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Net earnings |
$ | |
$ | |
$ | |
$ | |
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(1) includes restructuring and impairment expenses of: |
$ | |
$ | |
$ | |
$ | |
13. |
Fair Value Measurements |
(dollars in millions) |
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Fair Value Measurement Using |
September 30, 2019 |
December 31, 2018 |
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Quoted prices in active markets for identical assets (Level 1) |
$ | |
$ | |
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Significant other observable inputs (Level 2) |
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14. |
Derivative Instruments |
14. |
Derivative Instruments (continued) |
(dollars in millions) |
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September 30, 2019 |
December 31, 2018 |
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Buy |
Sell |
Buy |
Sell |
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British pound |
$ | — |
$ | $ | — |
$ | ||||||||||
Canadian dollar |
— |
— |
— |
|||||||||||||
Euro |
— |
— |
||||||||||||||
Mexican peso |
— |
— |
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Total |
$ | $ | $ | $ | ||||||||||||
14. |
Derivative Instruments (continued) |
(dollars in millions) |
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Balance |
September 30, 2019 |
December 31, 2018 |
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Foreign currency contracts |
Other |
$ | $ | |||||||||
Other non-current assets |
— |
|||||||||||
Accrued liabilities |
( |
) | ( |
) | ||||||||
Commodities contracts |
Accrued liabilities |
— |
( |
) | ||||||||
Total derivatives designated as hedging instruments |
$ | $ | ||||||||||
Derivatives in ASC 815 cash flow hedging relationships |
Amount of gain (loss) recognized in other comprehensive on derivative |
Location of gain (loss) reclassified from accumulated other comprehensive loss into |
Amount of gain (loss) reclassified from accumulated other comprehensive into earnings |
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2019 |
2018 |
2019 |
2018 |
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Foreign currency contracts |
$ | ( |
) | $ | Cost of products sold |
$ | ( |
) | $ | — |
||||||||||
Commodities contracts |
— |
— |
Cost of products sold |
( |
) | — |
||||||||||||||
$ | ( |
) | $ | $ | ( |
) | $ | — |
||||||||||||
Derivatives in ASC 815 cash flow hedging relationships |
Amount of gain (loss) recognized in other comprehensive on derivative |
Location of gain (loss) reclassified from accumulated other comprehensive loss into earnings |
Amount of gain (loss) reclassified from accumulated other comprehensive loss into earnings |
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2019 |
2018 |
2019 |
2018 |
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Foreign currency contracts |
$ | ( |
) | $ | Cost of products sold |
$ | ( |
) | $ | |||||||||||
Commodities contracts |
( |
) | — |
Cost of products sold |
( |
) | ||||||||||||||
$ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||
15. |
Income Taxes |
16. |
Commitments and Contingencies |
17. |
Changes in Accumulated Other Comprehensive Loss by Component |
(dollars in millions) |
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Three September 30, |
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2019 |
2018 |
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Cumulative foreign currency translation |
||||||||
Balance at beginning of period |
$ | ( |
) | $ | ( |
) | ||
Other comprehensive (loss) income before reclassifications |
( |
) | ( |
) | ||||
Balance at end of period |
( |
) | ( |
) | ||||
Unrealized net gain on cash flow derivatives |
||||||||
Balance at beginning of period |
( |
) | ( |
) | ||||
Other comprehensive (loss) gain before reclassifications |
( |
) | |
|||||
Realized losses (gains) on derivatives reclassified to cost of products sold (net of income tax (benefit) provision of ($ |
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— |
||||||
Balance at end of period |
( |
) | |
|||||
Pension liability |
||||||||
Balance at beginning of period |
( |
) | ( |
) | ||||
Other comprehensive (loss) gain before reclassifications |
( |
) | |
|||||
Amounts reclassified from accumulated other comprehensive loss: (1) |
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Balance at end of period |
( |
) | ( |
) | ||||
Accumulated other comprehensive loss, end of period |
$ | ( |
) | $ | ( |
) | ||
(1) Amortization of pension items: |
||||||||
Actuarial losses |
$ | |
(2) |
$ | |
(2) | ||
Prior year service cost |
( |
) (2) |
( |
) (2) | ||||
|
|
|||||||
Income tax benefit |
( |
) | ( |
) | ||||
Reclassification net of income tax benefit |
$ | |
$ | |
||||
(2) |
These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 11 - Pensions for additional details |
17. |
Changes in Accumulated Other Comprehensive Loss by Component (continued) |
(dollars in millions) |
||||||||
Nine September 30, |
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2019 |
2018 |
|||||||
Cumulative foreign currency translation |
||||||||
Balance at beginning of period |
$ | ( |
) | $ | ( |
) | ||
Other comprehensive income (loss) before reclassifications |
( |
) | ( |
) | ||||
Balance at end of period |
( |
) | ( |
) | ||||
Unrealized net gain on cash flow derivatives |
||||||||
Balance at beginning of period |
( |
) | ( |
) | ||||
Other comprehensive (loss) gain before reclassifications |
( |
) | |
|||||
Realized losses (gains) on derivatives reclassified to cost of products sold (net of income tax (benefit) provision of ($ |
|
( |
) | |||||
Balance at end of period |
( |
) | |
|||||
Pension liability |
||||||||
Balance at beginning of period |
( |
) | ( |
) | ||||
Other comprehensive (loss) gain before reclassifications |
( |
) | |
|||||
Amounts reclassified from accumulated other comprehensive loss: (1) |
|
|
||||||
Balance at end of period |
( |
) | ( |
) | ||||
Accumulated other comprehensive loss, end of period |
$ | ( |
) | $ | ( |
) | ||
(1) Amortization of pension items: |
||||||||
Actuarial losses |
$ | |
(2) |
$ | |
(2) | ||
Prior year service cost |
$ |
( |
) (2) |
( |
) (2) | |||
|
|
|||||||
Income tax benefit |
( |
) | ( |
) | ||||
Reclassification net of income tax benefit |
$ | |
$ | |
||||
(2) |
These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. See Note 11 - Pensions for additional details |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Net Earnings (GAAP) |
$ | 87.3 |
$ | 104.6 |
$ | 278.7 |
$ | 317.9 |
||||||||
Restructuring and impairment expenses, before tax |
— |
— |
— |
6.7 |
||||||||||||
Tax effect of restructuring and impairment expenses |
— |
— |
— |
(1.7 |
) | |||||||||||
Adjusted Earnings |
$ | 87.3 |
$ | 104.6 |
$ | 278.7 |
$ | 322.9 |
||||||||
Diluted EPS (GAAP) |
$ | 0.53 |
$ | 0.61 |
$ | 1.66 |
$ | 1.84 |
||||||||
Restructuring and impairment expenses per diluted share |
— |
— |
— |
0.04 |
||||||||||||
Tax effect of restructuring and impairment expenses per diluted share |
— |
— |
— |
(0.01 |
) | |||||||||||
Adjusted EPS |
$ | 0.53 |
$ | 0.61 |
$ | 1.66 |
$ | 1.87 |
||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2019 |
2018 (2) |
2019 |
2018 |
|||||||||||||
Segment Earnings (GAAP) |
||||||||||||||||
North America |
$ | 121.6 |
$ | 105.6 |
$ | 360.5 |
$ | 336.5 |
||||||||
Rest of World |
4.1 |
39.1 |
38.8 |
109.8 |
||||||||||||
Inter-segment earnings elimination |
— |
— |
(0.1 |
) | — |
|||||||||||
Total Segment Earnings (GAAP) |
$ | 125.7 |
$ | 144.7 |
$ | 399.2 |
$ | 446.3 |
||||||||
Adjustments |
||||||||||||||||
North America (1) |
$ | — |
$ | — |
$ | — |
$ | 6.7 |
||||||||
Rest of World |
— |
— |
— |
— |
||||||||||||
Inter-segment earnings elimination |
— |
— |
— |
— |
||||||||||||
Total Adjustments |
$ | — |
$ | — |
$ | — |
$ | 6.7 |
||||||||
Adjusted Segment Earnings |
||||||||||||||||
North America |
$ | 121.6 |
$ | 105.6 |
$ | 360.5 |
$ | 343.2 |
||||||||
Rest of World |
4.1 |
39.1 |
38.8 |
109.8 |
||||||||||||
Inter-segment earnings elimination |
— |
— |
(0.1 |
) | — |
|||||||||||
Total Adjusted Segment Earnings |
$ | 125.7 |
$ | 144.7 |
$ | 399.2 |
$ | 453.0 |
||||||||
(1) |
The Company recognized $6.7 million of restructuring and impairment expenses in connection with the move of manufacturing operations from its Renton, Washington facility to other U.S. facilities. For additional information, see Note 5 of the notes to the financial statements. |
(2) |
On October 29, 2019, the Company filed a Form 8-K with the Securities and Exchange Commission, with a news release attached as Exhibit 99.1, announcing its results for the quarter ended September 30, 2019 which included the table above. The Company later identified that balances presented in the table for the Three Months Ended September 30, 2018 incorrectly presented the results for Three Months Ended June 30, 2018. The presentation above has been adjusted to reflect the correct amounts and therefore does not agree to the news release. |
2019 Guidance |
2018 |
|||||||
Diluted EPS (GAAP) |
$ | 2.25 - 2.28 |
$ | 2.58 |
||||
Restructuring and impairment expenses per diluted share, net of tax |
— |
0.03 |
||||||
Adjusted EPS |
$ | 2.25 - 2.28 |
$ | 2.61 |
||||
ISSUER PURCHASES OF EQUITY SECURITIES |
||||||||||||||||
Period |
Total Number of Shares Purchased |
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
Maximum Number of Shares that may yet be Purchased Under the Plans or Programs |
||||||||||||
July 1 – July 31, 2019 |
1,166,600 |
$ | 45.16 |
1,166,600 |
5,114,653 |
|||||||||||
August 1 – August 31, 2019 |
489,500 |
45.25 |
489,500 |
4,625,153 |
||||||||||||
September 1 – September 30, 2019 |
471,438 |
47.73 |
471,438 |
4,153,715 |
Exhibit Number |
Description | |||
31.1 |
||||
31.2 |
||||
32.1 |
||||
32.2 |
||||
101 |
The following materials from A. O. Smith Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 are filed herewith, formatted in XBRL (Extensive Business Reporting Language): (i) the Condensed Consolidated Statement of Earnings for the three and nine months ended September 30, 2019 and 2018, (ii) the Condensed Consolidated Statement of Comprehensive Earnings for the three and nine months ended September 30, 2019 and 2018, (iii) the Condensed Consolidated Balance Sheets as of September 30, 2019, and December 31, 2018 (iv) the Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2019 and 2018 (v) the Condensed Consolidated Statement of Stockholders’ Equity for the three and nine months ended September 30, 2019 and 2018 (vi) the Notes to Condensed Consolidated Financial Statements. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. | |||
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
A. O. SMITH CORPORATION | ||||||
November 6, 2019 |
/s/ Helen E. Gurholt | |||||
Helen E. Gurholt | ||||||
Vice President and Controller | ||||||
/s/ Charles T. Lauber | ||||||
Charles T. Lauber | ||||||
Executive Vice President and Chief Financial Officer |
Exhibit 31.1
CERTIFICATION
I, Kevin J. Wheeler, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of A. O. Smith Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants Board of Directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
November 6, 2019 |
/s/ Kevin J. Wheeler |
Kevin J. Wheeler |
President and Chief Executive Officer |
Exhibit 31.2
CERTIFICATION
I, Charles T. Lauber, certify that;
1. | I have reviewed this quarterly report on Form 10-Q of A. O. Smith Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants Board of Directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
November 6, 2019 |
/s/ Charles T. Lauber |
Charles T. Lauber |
Executive Vice President and Chief Financial Officer |
Exhibit 32.1
Written Statement of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, the undersigned certifies that to the best of my knowledge:
(1) | the Quarterly Report on Form 10-Q of A. O. Smith Corporation for the quarter ended September 30, 2019 (the Report) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of A. O. Smith Corporation. |
November 6, 2019 |
/s/ Kevin J. Wheeler |
Kevin J. Wheeler |
President and Chief Executive Officer |
Exhibit 32.2
Written Statement of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, the undersigned certifies that to the best of my knowledge:
(1) | the Quarterly Report on Form 10-Q of A. O. Smith Corporation for the quarter ended September 30, 2019 (the Report) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of A. O. Smith Corporation. |
November 6, 2019 |
/s/ Charles T. Lauber |
Charles T. Lauber |
Executive Vice President and Chief Financial Officer |