Release Details

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)

(Amounts in millions, except per share data)

For the Three Months Ended 
September 30,

For the Nine Months Ended 
September 30,

2024

2023

2024

2023

Net sales

$        1,498.1

$        1,366.3

$        3,996.3

$        3,827.1

Cost of goods sold

1,009.7

937.8

2,679.7

2,634.1

Gross profit

488.4

428.5

1,316.6

1,193.0

Operating Expenses:

Selling, general and administrative expenses

184.4

178.9

523.6

527.6

Losses and other expenses, net

3.1

3.5

10.5

5.2

Restructuring charges

—

0.3

—

0.2

Gain on sale from previous dispositions

—

—

(1.6)

—

Impairment on assets held for sale

—

63.2

—

63.2

Income from equity method investments

(2.4)

(4.2)

(6.1)

(8.0)

Operating income

303.3

186.8

790.2

604.8

Pension settlements

0.1

0.3

0.4

0.4

Interest expense, net

8.9

11.2

33.2

40.4

Other expense (income), net

0.4

0.1

1.5

(0.1)

Income before income taxes

293.9

175.2

755.1

564.1

Provision for income taxes

54.9

44.8

145.9

118.5

Net income

$            239.0

$            130.4

$            609.2

$            445.6

Earnings per share – Basic:

$              6.71

$              3.67

$            17.11

$            12.55

Earnings per share – Diluted:

$              6.68

$              3.65

$            17.02

$            12.51

Weighted Average Number of Shares Outstanding - Basic

35.6

35.5

35.6

35.5

Weighted Average Number of Shares Outstanding - Diluted

35.8

35.7

35.8

35.6

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

Segment Net Sales and Profit (Loss)

(Unaudited)

(Amounts in millions)

For the Three Months 
Ended September 30,

For the Nine Months 
Ended September 30,

2024

2023

2024

2023

Net Sales

Home Comfort Solutions

$    1,032.8

$       896.3

$    2,689.7

$    2,513.6

Building Climate Solutions

465.3

405.5

1,306.6

1,121.5

Corporate and other ⁽¹⁾

—

64.5

—

192.0

Total segment sales

$    1,498.1

$    1,366.3

$    3,996.3

$    3,827.1

Segment Profit (Loss) ⁽²⁾

Home Comfort Solutions

$       226.5

$       181.4

$       567.1

$       495.2

Building Climate Solutions

105.9

97.3

298.1

250.3

Corporate and other

(29.1)

(23.4)

(76.6)

(65.2)

Total segment profit

303.3

255.3

788.6

680.3

Reconciliation to Operating income:

Gain on sale from previous dispositions

—

—

$           (1.6)

—

Impairment of net assets held for sale

—

63.2

—

63.2

Items in Losses and other expenses, net which are excluded from 
segment profit (loss) ⁽²⁾

—

5.0

—

12.1

Restructuring charges

—

0.3

—

0.2

Operating income

$       303.3

$       186.8

$       790.2

$       604.8

⁽¹⁾

The Corporate and Other segment included our European portfolio. In the fourth quarter of 2023 we completed the divestiture of our European operations.

⁽²⁾

We define segment profit (loss) as a segment's operating income (loss) included in the accompanying Consolidated Statements of Operations, excluding:

•       The following items in Losses and other expenses, net:

     ◦       Net change in unrealized losses (gains) on unsettled futures contracts,

     ◦       Environmental liabilities and special litigation charges, and;

     ◦       Other items, net

•       Restructuring charges,

•       Impairment on assets held for sale, and;

•       Gain on sale of previous dispositions

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Amounts in millions, except shares and par values)

As of September 30, 2024

As of December 31, 2023

ASSETS

(Unaudited)

Current Assets:

Cash and cash equivalents

$                                 243.1

$                                  60.7

Short-term investments

12.6

8.4

Accounts and notes receivable, net of allowances of $16.2 and $14.4 in 
2024 and 2023, respectively

816.5

594.6

Inventories, net

689.2

699.1

Other assets

69.6

70.7

Total current assets

1,831.0

1,433.5

Property, plant and equipment, net of accumulated depreciation of 
$952.6 and $910.8 in 2024 and 2023, respectively

754.8

720.4

Right-of-use assets from operating leases

270.5

213.6

Goodwill

219.9

222.1

Deferred income taxes

71.2

51.8

Other assets, net

165.8

156.9

Total assets

$                              3,313.2

$                             2,798.3

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Accounts payable

$                                 477.5

$                                374.7

Accrued expenses

444.7

416.1

Income taxes payable

13.3

4.2

Commercial paper

—

150.0

Current maturities of long-term debt

312.7

12.1

Current operating lease liabilities

67.8

57.5

Total current liabilities

1,316.0

1,014.6

Long-term debt

827.6

1,143.1

Long-term operating lease liabilities

214.9

164.6

Pensions

16.3

22.5

Other liabilities

184.4

168.2

Total liabilities

2,559.2

2,513.0

Commitments and contingencies

Stockholders' equity:

Preferred stock, $0.01 par value, 25,000,000 shares authorized, no 
shares issued or outstanding

—

—

Common stock, $0.01 par value, 200,000,000 shares authorized, 
87,170,197 shares issued

0.9

0.9

Additional paid-in capital

1,204.9

1,184.6

Retained earnings

3,994.0

3,506.2

Accumulated other comprehensive loss

(70.7)

(56.9)

Treasury stock, at cost, 51,537,964 shares and 51,588,103 shares for 
2024 and 2023, respectively

(4,375.1)

(4,349.5)

Total stockholders' equity

754.0

285.3

Total liabilities and stockholders' equity

$                              3,313.2

$                             2,798.3

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

(Amounts in millions)

For the Nine Months Ended September 30,

2024

2023

Cash flows from operating activities:

Net income

$                       609.2

445.6

Adjustments to reconcile net income to net cash provided by operating activities:

Gain on sale from previous dispositions

(1.6)

—

Income from equity method investments

(6.1)

(8.0)

Dividends from affiliates

2.5

—

Impairment on assets held for sale

—

63.2

Provision for credit losses

4.6

4.7

Unrealized (gains) losses, net on derivative contracts

(6.7)

5.6

Stock-based compensation expense

20.1

23.5

Depreciation and amortization

69.6

62.0

Deferred income taxes

(21.5)

(24.9)

Pension expense

3.5

2.4

Pension contributions

(9.1)

(2.8)

Other items, net

—

(1.4)

Changes in assets and liabilities, net of effects of acquisitions and divestitures:

Accounts and notes receivable

(229.1)

(142.5)

Inventories

9.1

(44.9)

Accounts payable

104.6

(10.9)

Accrued expenses

31.3

69.4

Income taxes payable and receivable, net

20.4

(6.7)

Leases, net

3.8

3.4

Other, net

8.7

(7.8)

Net cash provided by operating activities

613.3

429.9

Cash flows from investing activities:

Proceeds from the disposal of property, plant and equipment

1.9

1.6

Purchases of property, plant and equipment

(103.4)

(125.0)

Net proceeds from previous disposition

4.1

—

Acquisitions, net of cash

1.8

—

Purchases of investments

(12.5)

(1.1)

Net cash used in investing activities

(108.1)

(124.5)

Cash flows from financing activities:

Commercial paper borrowings

424.1

—

Commercial paper payments

(574.1)

—

Borrowings from debt arrangements

156.7

1,737.5

Payments on debt arrangements

(190.2)

(2,290.1)

Issuance of senior unsecured notes

—

500.0

Payments of deferred financing costs

—

(5.4)

Proceeds from employee stock purchases

3.3

2.9

Repurchases of common stock

(12.9)

—

Repurchases of common stock to satisfy employee withholding tax obligations

(15.0)

(7.1)

Cash dividends paid

(119.3)

(153.4)

Net cash used in financing activities

(327.4)

(215.6)

Increase in cash and cash equivalents

177.8

89.8

Cash balances classified as assets held for sale

—

(7.6)

Effect of exchange rates on cash and cash equivalents

4.6

(2.8)

Cash and cash equivalents, beginning of period

60.7

52.6

Cash and cash equivalents, end of period

$                       243.1

$                     132.0

Supplemental disclosures of cash flow information:

Interest paid

$                         44.7

$                       42.0

Income taxes paid (net of refunds)

$                       145.5

$                     151.3

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

Reconciliation to U.S. GAAP (Generally Accepted Accounting Principles) Measures

(Unaudited, in millions, except per share and ratio data)

Use of Non-GAAP Financial Measures

To supplement the Company's consolidated financial statements and segment net sales and profit (loss) presented in accordance with U.S. GAAP, additional non-GAAP financial measures are provided and reconciled in the following tables. The Company believes that these non-GAAP financial measures, when considered together with the GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results and enhance the ability of investors to analyze the Company's business trends and operating performance.

Reconciliation of Net income, a GAAP measure, to Adjusted net income, a Non-GAAP measure

For the Three Months Ended 
September 30,

For the Nine Months Ended 
September 30,

2024

2023

2024

2023

Amount 
after tax

Per 
Diluted 
Share

Amount 
after tax

Per 
Diluted 
Share

Amount 
after tax

Per 
Diluted 
Share

Amount 
after tax

Per 
Diluted 
Share

Net income, a GAAP measure

$  239.0

$  6.68

$   130.4

$    3.65

$  609.2

$ 17.02

$ 445.6

$  12.51

Restructuring charges

—

—

0.3

0.01

—

—

0.2

0.01

Gain on sale from previous dispositions

—

—

—

—

(1.6)

(0.04)

—

—

Pension settlements

—

—

0.2

0.01

—

—

0.3

0.01

Items in Losses and other expenses, net which are 
excluded from segment profit (loss) (a)

—

—

4.3

0.11

—

—

9.6

0.26

Excess tax benefit from share-based compensation (b)

—

—

(2.3)

(0.06)

—

—

(2.4)

(0.07)

Other tax items, net (b)

—

—

—

—

—

0.4

0.01

Impairment on assets held for sale (c)

—

—

62.0

1.74

—

—

62.0

1.74

Non-core business results (d)

—

—

(3.3)

(0.09)

—

—

(4.8)

(0.13)

Adjusted net income, a non-GAAP measure

$   239.0

$   6.68

$    191.6

$     5.37

$  607.6

$ 16.98

$  510.9

$          14.34

(a) Recorded in Losses and other expenses, net in the Consolidated Statements of Operations

(b) Recorded in Provision for income taxes in the Consolidated Statements of Operations

(c) Impairment on assets held for sale relate to the divestiture of our European operations that was completed in the fourth quarter of 2023.

(d) Non-core business results represent activity related to our business operations in Europe not included elsewhere in the reconciliations.

Reconciliation of Net Cash Provided by Operating Activities, a GAAP measure, to Free Cash Flow, a Non-GAAP measure

For the Three Months 
Ended September 30,

For the Nine Months 
Ended September 30,

2024

2023

2024

2023

Net cash provided by operating activities

$        452.1

$        313.2

$        613.3

$        429.9

Purchases of property, plant and equipment

(41.2)

(39.7)

(103.4)

(125.0)

Proceeds from the disposal of property, plant and equipment

0.8

0.1

1.9

1.6

Free cash flow, a Non-GAAP measure

$        411.7

$        273.6

$        511.8

$        306.5

Reconciliation of Net sales, a GAAP measure to Core net sales, a Non-GAAP measure

For the Three Months Ended September 30,

Corporate and Other

Consolidated

2023

2023

Net sales, a GAAP measure

$                                     64.5

$                                1,366.3

Net sales from non-core businesses (a)

(64.5)

(64.5)

Core net sales, a Non-GAAP measure

$                                        —

$                                1,301.8

(a) Non-Core businesses represent our business operations in Europe, which were sold in the fourth quarter of 2023.

Reconciliation of Net sales, a GAAP measure to Core net sales, a Non-GAAP measure

For the Nine Months Ended September 30,

Corporate and Other

Consolidated

2023

2023

Net sales, a GAAP measure

$                                   192.0

$                                3,827.1

Net sales from non-core businesses (a)

(192.0)

(192.0)

Core net sales, a Non-GAAP measure

$                                        —

$                                3,635.1

(a) Non-Core businesses represent our business operations in Europe

Reconciliation of Segment profit (loss), a Non-GAAP measure to Adjusted Segment profit (loss), a Non-GAAP measure

For the Three Months Ended September 30,

Corporate and Other

Consolidated

2023

2023

Segment profit (loss), a Non-GAAP measure

$                                   (23.4)

$                                   255.3

Profit from non-core businesses (a)

3.9

3.9

Adjusted Segment profit (loss), a Non-GAAP measure

$                                   (27.3)

$                                   251.4

(a) Non-Core businesses represent our business operations in Europe, which were sold in the fourth quarter of 2023.

Reconciliation of Segment profit, a Non-GAAP measure to Adjusted Segment profit, a Non-GAAP measure

For the Nine Months Ended September 30,

Corporate and Other

Consolidated

2023

2023

Segment profit (loss), a Non-GAAP measure

$                                   (65.2)

$                                   680.3

Profit from non-core businesses (a)

6.1

6.1

Adjusted Segment profit (loss), a Non-GAAP measure

$                                   (71.3)

$                                   674.2

(a) Non-Core businesses represent our business operations in Europe