Company: AOS
Filing Date: 2025-02-11
Form Type: 10-K
Source: 0000091142-25-000036
Chunk: 46

Company: SMITH A O CORP
Filing Date: 2025-02-11
Form: 10-K
Item: Item 7
Chunk 46
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202420232022Net sales$3,818.1 $3,852.8 $3,753.9 Cost of products sold2,362.0 2,368.0 2,424.3 Gross profit1,456.1 1,484.8 1,329.6 Gross profit margin %38.1 %38.5 %35.4 %Selling, general and administrative expenses739.3 727.4 670.9 Restructuring and impairment expenses17.6 18.8 — Interest expense6.7 12.0 9.4 Other (income) expense-net(8.5)(6.9)425.6 Earnings before provision for income taxes701.0 733.5 223.7 Provision for (benefit from) income taxes167.4 176.9 (12.0)Net Earnings$533.6 $556.6 $235.7 

Our sales in 2024 were $3,818.1 million, a decrease of $34.7 million compared to 2023 sales of $3,852.8 million. Our decrease in net sales was primarily driven by lower water heater volumes in North America, lower sales in China, and unfavorable currency translation of approximately $18 million due to the depreciation of foreign currencies compared to the U.S. dollar, which more than offset our higher boiler sales and pricing actions. Our 2024 and 2023 acquisitions of water treatment companies in North America added approximately $18 million of incremental net sales in 2024. 

Our 2024 gross profit margin of 38.1 percent decreased compared to 38.5 percent in 2023.  The lower gross profit margin in 2024 compared to 2023 was primarily due to higher production costs and operational inefficiencies associated with volume volatility, which outpaced our pricing actions.  

Selling, general, and administrative (SG&A) expenses were $739.3 million in 2024, or $11.9 million higher than in 2023. The increase in SG&A expenses in 2024 compared to the prior year was primarily due to higher employee costs from increased wages and higher selling and advertising expenses to support our strategic initiatives. 

We recognized $17.6 million of restructuring and impairment expenses during the year ended December 31, 2024. Of these expenses,