The set temperature may be set too high. The temperature can be changed with dipswitches on the PCB or by the remote temperature controller, if one is installed.
The flow adjustment valve could be obstructed due to hard water scale or debris, causing lower than expected water flow. Verify water flow with a graduated container or with the remote temperature controller, if one is installed.
The output thermistor could be compromised. This component may be checked by entering the Diagnostics Mode on a remote controller, if one is installed. Turn power off to the unit and run cold water through it; check to see if the inlet and outlet temperatures read the same on the remote. For instructions on how to do this, refer to the Maintenance Sheet, packaged with every water heater and located behind the front panel of the unit.