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A. O. Smith Corp Plans To Transfer Residential Water Heater Production To Other North American Facilities; Sees FY 2013 Charge Guidance; Raises FY 2013 EPS Guidance


Tuesday, 23 Apr 2013 07:00am EDT 

A. O. Smith Corp announced that on March 28, 2013, Board of Directors approved a plan to transfer residential water heater production from Fergus, Ontario, plant to other North American facilities. The Company expects that the majority of production will be consolidated by July 1. As a result of the capacity rationalization, the Company incurred a pre-tax restructuring charge of $12.7 million in the first quarter related to employee severance costs and impairment of long-lived assets. Additional restructuring charges are expected to total approximately $5 million for the remainder of fiscal 2013. Excluding restructuring costs, operating savings related to the plant rationalization will offset operating inefficiencies in 2013. The Company expects pre-tax annual savings of approximately $10 million in 2014. As a result of these positive factors, it is increasing guidance for fiscal 2013. The Company believes will achieve fiscal 2013 GAAP earnings of between $3.00 and $3.16 per share and, it now believes will achieve adjusted earnings of between $3.40 and $3.56 per share, neither of which includes the potential impact from future acquisitions. The adjusted earnings per share projection excludes the gain from the settlement with a former supplier, the restructuring charges related to the plant rationalization in Canada and non-operating pension costs. According to I/B/E/S Estimates, analysts are expecting the Company to report EPS of $3.43 for fiscal 2013. 

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