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North America and Rest of World.
−Removed: Both segments manufacture and market comprehensive lines of residential and commercial gas and electric water heaters, boilers, heat pump, tanks and water treatment products.
+Added: Both segments manufacture and market comprehensive lines of residential and commercial gas and electric water heaters, boilers, heat pumps, tanks and water treatment products.
Both segments primarily manufacture and market in their respective regions of the world.
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NORTH AMERICA
−Removed: Sales in our North America segment accounts for 74% of our total sales in 2022.
+Added: Sales in our North America segment accounted for approximately 75 percent of our total sales in 2023.
This segment serves residential and commercial end markets with a broad range of products including:
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Typical applications for our water heaters include residences, restaurants, hotels, office buildings, laundries, car washes, schools and small businesses.
−Removed: In 2022, we continued our integration activities of Giant Factories, Inc., (Giant) a Canada-based manufacturer of residential and commercial water heaters, which we acquired in late 2021.
Our residential and commercial boilers range in size from 45,000 British Thermal Units (BTUs) to 6.0 million BTUs.
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(Aquasana) in 2016 we entered the water treatment market.
−Removed: We expanded our product offerings with the acquisitions of Hague Quality Water International (Hague) in 2017, Water-Right, Inc.
−Removed: (Water-Right) in 2019, Master Water Conditioning Corporation (Master Water) in 2021 and Atlantic Filter Corporation (Atlantic Filter) in 2022.
−Removed: Our water treatment products range from point-of-entry water softeners, solutions for problem well water, and whole-home water filtration products to on-the-go filtration bottles and point-of-use carbon and reverse osmosis products.
+Added: We expanded our product offerings and geographic footprint with the acquisitions of Hague Quality Water International (Hague) in 2017, Water-Right, Inc.
+Added: (Water-Right) in 2019, Master Water Conditioning Corporation (Master Water) in 2021, Atlantic Filter Corporation (Atlantic Filter) in 2022 and Water Tec of Tucson, Inc (Water Tec) in 2023.
+Added: Our water treatment products range from point-of-entry water softeners, solutions for problem well water, whole-home water filtration products and point-of-use carbon and reverse osmosis products.
We also offer a comprehensive line of commercial water treatment and filtration products.
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We believe we are the largest manufacturer and marketer of water heaters in North America with a leading share in both the residential and commercial portions of the market.
+Added: We expanded our presence in North America with our acquisition of Giant Factories, Inc., (Giant) a Canada-based manufacturer of residential and commercial water heaters, which we acquired in late 2021.
In the commercial portions of the market for both water heating and space heating, we believe our comprehensive product lines and our high-efficiency products give us a competitive advantage.
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Our Aquasana branded products are primarily sold directly to consumers through e-commerce channels.
−Removed: Our water softener products and problem well water solutions, which include Hague, Water-Right, Master Water, and Atlantic Filter, are sold through water quality dealers.
+Added: Our water softener products and problem well water solutions, which include the Hague, Water-Right, Master Water, Atlantic Filter, and Water Tec brands are sold through water quality dealers and contractors.
Our water softener products are also sold through home center retail chains.
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Our condensing commercial water heaters and boilers continue to be an option for commercial customers looking for high-efficiency water and space heating with a short payback period through energy savings.
−Removed: We offer residential heat pump, condensing tank-type and tankless water heaters in North America, as well as other higher efficiency water heating solutions to round out our energy-efficient product offerings.
−Removed: In addition, during 2021 we launched a commercial heat pump water heater to align with greenhouse gas emission reduction trends across the U.S.
+Added: We offer residential heat pumps, condensing tank-type and tankless water heaters in North America, as well as other higher efficiency water heating solutions to round out our energy-efficient product offerings.
+Added: We recently launched our newly designed ADAPT condensing gas tankless water heater and VERITUS air source commercial heat pump water heater to align with greenhouse gas emission reduction trends across the U.S.
We sell our products in highly competitive markets.
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REST OF WORLD
−Removed: Sales in our Rest of World segment accounts for 26% of our total sales in 2022, a majority of which is in China.
+Added: Sales in our Rest of World segment accounted for approximately 25 percent of our total sales in 2023, a majority of which was in China.
We have operated in China for nearly 30 years.
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We believe we are one of the market leaders of water heaters and reverse osmosis water treatment products to the residential market in China in dollar terms.
−Removed: We also design and market range hoods and cooktops in China.
+Added: We also design and market kitchen products (range hoods, cooktops, steam ovens, and dishwashers) in China.
We sell our products in approximately 9,900 points of sale in China, of which approximately 4,600 are retail outlets in tier one through tier three cities and approximately 1,800 exclusively sell our products.
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Our primary competitors in India are Racold, Bajaj and Havells in the water heater market and Eureka Forbes, Kent and Hindustan Unilever in the water treatment market.
−Removed: We also sell water heaters in the European and Middle and Far Eastern markets and water treatment products in Hong Kong, and Vietnam, all of which combined comprised less than 13 percent of total Rest of World sales in 2022.
+Added: We also sell water heaters in the European and Middle and Far Eastern markets and water treatment products in Vietnam, all of which combined comprised less than 13 percent of total Rest of World sales in 2023.
RAW MATERIALS
−Removed: We use a wide range of raw materials in our manufacturing operations.
−Removed: These raw materials are generally available in adequate quantities, however, the COVID-19 pandemic and disruptions in the commercial transportation network have stressed the availability of certain raw materials.
−Removed: While supply chain and logistics challenges lingered in 2022, we saw improvement, particularly in the second half of the year.
−Removed: Our primary raw material input is steel which has experienced volatility in costs over the last several years.
−Removed: A portion of our customers have contractual pricing tied to a steel price index.
+Added: Raw materials for our manufacturing operations, primarily consisting of steel, are generally available in adequate quantities.
+Added: A portion of our customers are contractually obligated to accept price changes based on fluctuations in steel prices.
+Added: There has been volatility in steel costs over the last several years.
RESEARCH AND DEVELOPMENT
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We invest, own and use in our businesses various trademarks, trade names, patents, trade secrets and licenses.
−Removed: We monitor our intellectual property for infringement and in 2022 received a judgment of $11.5 million against a competitor related to one of our patents.
+Added: We monitor our intellectual property for infringements.
Although we believe our trademarks, trade names, patents, trade secrets, and licenses to constitute a valuable asset in the aggregate, we do not regard our business as being materially dependent on any single trademark, trade name, patent, trade secret, license or any group of related such rights.
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This third party managed survey measures employees’ level of engagement against external norms and provides us with actionable feedback that drives improvement priorities.
−Removed: Survey participation in 2022 was 97 percent, which we believe reflects our employees’ desire to share their perspectives and a commitment to continuous improvement.
+Added: Participation in our most recent survey in 2022 was 97 percent, which we believe reflects our employees’ desire to share their perspectives and a commitment to continuous improvement.
Survey results help shape action plans to further improve our culture and we will conduct the survey again in 2024.
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As reflected in our Guiding Principles, we strive to create a workplace where people from diverse backgrounds can thrive and achieve their fullest potential.
−Removed: Smith’s commitment to this objective starts at the top with its Board of Directors, which is 50% diverse.
+Added: Smith’s commitment to this objective starts at the top with its Board of Directors, which is 44 percent diverse.
Smith monitors the gender and racial composition of its workforce in the U.S.
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We provide all employees with a wide range of professional development experiences, both formal and informal, to help them achieve their full potential.
−Removed: All of of our salaried employees are given formal development plans.
+Added: All of our salaried employees are given formal development plans.
Some of the formal development programs that employees have access to include early-career leadership development programs, front-line leadership development programs, continuous improvement skill-building programs, core process technology councils and tuition reimbursement for degree programs or trade schools.
−Removed: In 2022, we partnered with a third party provider to deliver diversity and inclusive leadership training to enhance the capability of our workforce with a program that aligns with our Guiding Principles, Values, and overall leadership approach.
−Removed: In 2022, we provided this training to our senior leadership team globally and senior management in the U.S., and we intend to expand that training program in 2023.
+Added: To encourage additional career development, in 2023, all our salaried employees worldwide had at least one career conversation with their manager.
Globally, all office and professional employees also have formal performance reviews and development plans with a focus on learning by doing.
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In addition to traditional training, we use standardized signage and visual management throughout our facilities.
−Removed: Since 1954, we have awarded annually the Lloyd B.
+Added: Since 1954, we have annually awarded the Lloyd B.
Smith President's Safety Award, which acknowledges an A.
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Whether at the federal, state, or local level, these laws are intended to improve energy efficiency and product safety, and protect public health and the environment.
−Removed: In recent years, a limited number of states and local authorities have proposed or implemented bans on gas-fired products in new construction in an effort to address greenhouse gas emissions.
+Added: In recent years, a number of states and local authorities have proposed or implemented bans on gas-fired products in new construction in an effort to address greenhouse gas emissions.
Similar laws and regulations have been adopted by government authorities in other countries in which we manufacture, distribute, and sell our products.
−Removed: We offer a complete line of water and hydronic heating products, including electric-powered water heaters and boilers, and we believe that any reduction in fossil fuel-powered products would be counterbalanced by the demand for our non-fossil fuel powered products.
+Added: We offer a complete line of water and hydronic heating products, including electric-powered water heaters and boilers, and we believe that any reduction in fossil fuel-powered products would be counterbalanced by a corresponding increase in demand for our non-fossil fuel powered products.
We are confident that our continued emphasis on product design and innovation will keep us well positioned to deliver products demanded by customers, regardless of fuel source.
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The information contained on our website is not included as a part of, or incorporated by reference into, this Annual Report on Form 10-K.
−Removed: Other than an investor’s own internet access charges, we make available free of charge through our website our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports as soon as reasonably practical after we have electronically filed such material with, or furnished such material to, the Securities and Exchange Commission (SEC).
+Added: We make available free of charge through our website our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports as soon as reasonably practical after we have electronically filed such material with, or furnished such material to, the Securities and Exchange Commission (SEC).
All reports we file with the SEC are also available free of charge via EDGAR through the SEC’s website at www.sec.gov.
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Any waiver of or amendments to the Financial Code of Conduct or the A.
−Removed: Smith Guiding Principles also would be posted on this website;
+Added: Smith Guiding Principles would be posted on this website;
to date there have been none.
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We issued our third report, the 2022 Environmental, Social and Governance ("ESG") Report in December 2022, documenting our ESG activities over the past two years.
−Removed: This report details the positive impact of our highly efficient products, highlights our company’s commitment to employees and the communities in which we operate, and reports on our progress toward our greenhouse gas emissions reduction goal of 10% by 2025.
+Added: This report details the positive impact of our highly efficient products, highlights our company’s commitment to employees and the communities in which we operate, and reports on our progress toward our greenhouse gas emissions reduction goal of 10 percent by 2025.
We have made significant progress toward our ESG emission reduction goal and prevented almost 500,000 metric tons of carbon emissions in 2021 through the sale of our high efficiency water heaters and boilers.
Our scorecard reflecting our progress is available on our website.
+Added: Our scorecard also provides information on our employee diversity, product stewardship, and recordable incident rate, among other items.
We have also achieved WAVE water stewardship verification and achieved our fourth consecutive Energy Star Partner of the Year Award.
−Removed: Our ESG report is available on our website and not included as part of, or incorporated by reference into, this Annual Report on Form 10-K.
+Added: Our ESG report and ESG scorecard are available on our website and not included as part of, or incorporated by reference into, this Annual Report on Form 10-K.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.