Milwaukee-based water technology company A.O. Smith Corp. today reported record sales of $1.94 billion for 2012, up 13.4 percent from $1.71 billion in 2011.
The Lochinvar business, acquired by the company in August of 2011, added $225.7 million to its sales in 2012 compared with $75.9 million in 2011, and sales of A. O. Smith branded products in China grew 20 percent to approximately $448 million for the year.
The company also reported earnings of $162.6 million, or $3.49 per share, from continuing operations for 2012, up 51.4 percent from $111.2 million in 2011.
In the fourth quarter of 2012, the company earned $43.2 million from continuing operations on sales of $524.3 million. Earnings from continuing operations for the same three-month period in 2011 were $31.5 million on sales of $475.8 million
“With a strong fourth quarter and solid performance for the full year, the A. O. Smith team did an excellent job again in 2012 driving the company to achieve record sales and net earnings,” said Ajita G. Rajendra, president and chief executive officer. “We are very pleased with Lochinvar’s performance, and our China business’ growth was more than two and one-half times that country’s GDP growth last year. Although our North American new construction business continued to be affected by the slow economic recovery, we were able to take advantage of our strength in the replacement portion of the water heater and boiler markets. With our strong North American replacement water heater business, growing Lochinvar boiler platform, and expanding global presence particularly in China, A. O. Smith is well positioned entering 2013. Business conditions are continuing to improve modestly in the U. S., and we remain optimistic the growth exhibited by the housing market last year will carry over into this year as well.
The company indicated it is considering additional acquisitions.
“Our pipeline of possible acquisition candidates remains active,” said Paul W. Jones, executive chairman. “We continue to pursue water heating and water related investments all over the world, but we will remain selective and only make acquisitions that we believe will increase shareholder value. With more than $400 million in cash and a meaningful amount of incremental borrowing capacity, we are confident we have the resources available to take advantage of global opportunities that add long-term value.”
