SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
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Date of Report
(Date of earliest event reported): September 24, 2003
A. O. Smith Corporation
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(Exact name of registrant as specified in its charter)
Delaware 1-475 39-0619790
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
P.O. Box 245008, Milwaukee, Wisconsin 53224-9508
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(Address of principal executive offices, including zip code)
(414) 359-4000
(Registrant's telephone number)
Item 7. Financial Statements and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Exhibits. The following exhibit is being filed herewith:
(99) News Release of A. O. Smith Corporation, dated September 24, 2003.
Item 9. Regulation FD Disclosures.
On September 24, 2003, A. O. Smith Corporation ("the Company") issued a news
release revising the Company's earnings outlook for 2003. A copy of the
Company's news release is attached as Exhibit 99 to this Current Report on Form
8-K (this "Current Report") and is incorporated by reference herein.
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: September 24, 2003 By: /s/ Kenneth W. Krueger
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Kenneth W. Krueger
Senior Vice President and
Chief Financial Officer
A. O. SMITH CORPORATION
Exhibit Index to Current Report on Form 8-K Dated September 24 , 2003
Exhibit
Number Description
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(99) News Release of A. O. Smith Corporation dated September 24, 2003.
A. O. SMITH CORPORATON
NEWS RELEASE For further information contact:
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MEDIA INQUIRES: ANALYST/INVESTOR INQUIRES: A. O. Smith Corporation
Edward J. O' Connor Craig Watson P.O. Box 245008
414-359-4100 414-359-4009 Milwaukee, WI 53224-9508
414-359-4000
NYSE: AOS
A. O. Smith lowers third quarter estimate to $.18 to $.20 per share, full year
earnings to $1.75 - $1.80; forecasts 2004 earnings of $2.40 - $2.60 per share
A. O. Smith Corporation (AOS-NYSE) today lowered its estimate of third
quarter earnings to $.18 to $.20 per share compared to its previous estimate of
$.42 to $.46 per share for the quarter. Full-year earnings are now projected to
range from $1.75 to $1.80 per share. Full-year earnings were previously
estimated to range from $2.10 to $2.25 per share. For 2004, the company expects
earnings of between $2.40 and $2.60 per share.
In July, the company noted that declines in commercial construction
activity and softness in the heating, ventilation and air conditioning (HVAC)
market would result in little sales growth during the year. It expected earnings
improvement in the second half to be driven by production repositioning in its
electric motor business and the launch of new flammable vapor resistant water
heaters.
In anticipation of the launch of the flammable vapor resistant product in
the third quarter, customers purchased significant quantities of residential gas
water heaters in the second quarter. The resulting sales reduction in the third
quarter, coupled with the disruption in manufacturing schedules caused by the
pre-buy activity and the launch of the new product, caused sales and profit
levels to be lower than anticipated. It is expected that performance in the
water heater business will be back on track in the fourth quarter.
In the electric motors business, previously announced efforts to reposition
U.S. production to lower cost Mexican facilities were largely completed,
although later than planned. Manufacturing costs were somewhat higher than
anticipated during the final
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a. o. smith estimates add l
stages of this transition, negatively impacting third quarter profitability. In
addition, inventory levels have grown in order to assure customer deliveries
during the shift in production facilities. Inventories are also higher due to
manufacturing schedules that anticipated higher sales levels. In order to reduce
these inventory levels, production levels will be reduced through the fourth
quarter. This will reduce fixed cost absorption and manufacturing margins during
the fourth quarter.
"While we are pleased in achieving a major milestone in our motors
repositioning strategy, we are disappointed in our margin performance and
inventory levels during the second half of this year. We are committed to
addressing both issues and establishing a strong base for improved operating
performance," Robert J. O'Toole, chairman and chief executive officer, said.
O'Toole further commented, "The year 2003 has been one of challenge and
accomplishment. In the motors business, we have transferred one-half of our
domestic manufacturing operation to lower cost facilities in Mexico and China.
In the water heater business, we have undergone the most significant product
line transformation in our history. While these transformations will be largely
behind us by year-end, we have suffered some delay in timing and higher costs
than anticipated due to the disruption. We expect to be on track with our
long-term strategic direction by year-end. Accordingly, we expect financial
performance in 2004 to be in line with our strategic plan, in a range of $2.40
to $2.60 per share."
A. O. Smith will broadcast a live conference call beginning at 10:00 a.m.
(Eastern Time) today. The call can be heard on the company's web site,
www.aosmith.com. An audio replay of the call will be available on the company's
web site after the live event.
Forward-looking statements
This release contains statements that we believe 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,"
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a. o. smith estimates add 2
"expect," "intend," "estimate," "anticipate," "believe," "continue," or words of
similar meaning. These 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. Factors that could cause such a
variance include the following: instability in the company's electric motor and
water products markets; inability to generate the synergistic cost savings from
the acquisition of State Industries; the inability to implement cost-reduction
programs; adverse changes in general economic conditions; significant increases
in raw material prices; competitive pressures on the company's businesses; and
the potential that assumptions on which the company based its expectations are
inaccurate or will prove to be incorrect.
Forward-looking statements included in this press 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 attributable to the company, or
persons acting on its behalf, are qualified in their entirety by these
cautionary statements.
A. O. Smith Corporation, with headquarters in Milwaukee, Wis., is one of
North America's largest manufacturers of electric motors, with a comprehensive
line of hermetic motors, fractional horsepower alternating current (AC) and
direct current (DC) motors, and integral horsepower motors, as well as one of
North America's largest manufacturers of residential and commercial water
heating equipment. A. O. Smith Corporation has facilities in the United States,
Mexico, Canada, England, Ireland, Hungary, the Netherlands, and China and
employs approximately 17,000 people.