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Lennox Reports Third Quarter Results and Raises Full Year Guidance

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Lennox (NYSE: LII) reported strong Q3 2024 results with revenue of $1.5 billion, up 15% in core revenue. The company achieved record operating income of $303 million and GAAP diluted EPS of $6.68, up 24%. Home Comfort Solutions segment revenue grew 15% to $1.0 billion, while Building Climate Solutions revenue increased 15% to $465 million. Net cash from operations reached $452 million, with free cash flow up 50% to $412 million. Based on strong performance, Lennox raised its full-year 2024 guidance, projecting 10% revenue growth and EPS of $20.75-$21.00.

Lennox (NYSE: LII) ha registrato risultati solidi per il terzo trimestre del 2024, con ricavi di 1,5 miliardi di dollari, in crescita del 15% nei ricavi core. L'azienda ha raggiunto un reddito operativo record di 303 milioni di dollari e un utile per azione diluito GAAP di 6,68 dollari, in aumento del 24%. I ricavi del segmento Soluzioni per il Comfort Domestico sono cresciuti del 15% fino a 1,0 miliardo di dollari, mentre i ricavi del segmento Soluzioni per il Clima degli Edifici sono aumentati del 15% fino a 465 milioni di dollari. Il flusso di cassa netto dalle operazioni ha raggiunto 452 milioni di dollari, con un flusso di cassa libero in aumento del 50%, pari a 412 milioni di dollari. Sulla base delle ottime performance, Lennox ha rivisto al rialzo le sue previsioni per l'intero anno 2024, prevedendo una crescita dei ricavi del 10% e un utile per azione tra 20,75 e 21,00 dollari.

Lennox (NYSE: LII) reportó resultados sólidos para el tercer trimestre de 2024, con ingresos de 1.5 mil millones de dólares, un aumento del 15% en los ingresos principales. La compañía logró un ingreso operativo récord de 303 millones de dólares y una ganancia por acción diluida GAAP de 6.68 dólares, aumentando un 24%. Los ingresos del segmento de Soluciones de Confort en el Hogar crecieron un 15% hasta alcanzar 1.0 mil millones de dólares, mientras que los ingresos del segmento de Soluciones Climáticas para Edificios aumentaron un 15% hasta 465 millones de dólares. El flujo de caja operativo neto alcanzó los 452 millones de dólares, con un flujo de caja libre que creció un 50% hasta 412 millones de dólares. Basándose en un desempeño sólido, Lennox elevó su pronóstico de ingresos para todo el año 2024, proyectando un crecimiento del 10% en ingresos y una ganancia por acción de entre 20.75 y 21.00 dólares.

레녹스 (NYSE: LII)는 2024년 3분기 실적을 발표하며 매출 15억 달러를 기록했습니다. 핵심 매출은 15% 증가했습니다. 회사는 3억 3백만 달러의 기록적인 운영 소득을 달성했으며, GAAP 희석 주당순이익은 6.68달러로 24% 증가했습니다. 홈 컴포트 솔루션 부문 매출은 15% 증가하여 10억 달러에 이르렀고, 빌딩 기후 솔루션 부문 매출도 15% 증가하여 4억 6천 5백만 달러를 기록했습니다. 운영에서의 순현금은 4억 5천 2백만 달러에 도달했으며, 자유 현금 흐름은 50% 증가해 4억 1천 2백만 달러에 이르렀습니다. 강력한 실적을 바탕으로, 레녹스는 2024년 연간 가이던스를 상향 조정하며 10% 매출 증가와 주당 순이익을 20.75달러에서 21.00달러로 예상했습니다.

Lennox (NYSE: LII) a annoncé des résultats solides pour le troisième trimestre 2024, avec un chiffre d'affaires de 1,5 milliard de dollars, en hausse de 15% des revenus de base. L'entreprise a atteint un revenu d'exploitation record de 303 millions de dollars et un BPA dilué GAAP de 6,68 dollars, en hausse de 24%. Les revenus du segment Solutions de Confort à Domicile ont augmenté de 15% pour atteindre 1,0 milliard de dollars, tandis que les revenus du segment Solutions Climatiques pour Bâtiments ont augmenté de 15% pour se chiffrer à 465 millions de dollars. Le flux de trésorerie net provenant des opérations a atteint 452 millions de dollars, avec un flux de trésorerie disponible en hausse de 50%, atteignant 412 millions de dollars. Sur la base de cette performance solide, Lennox a relevé ses prévisions pour l'année 2024, envisageant une croissance du chiffre d'affaires de 10% et un BPA de 20,75 à 21,00 dollars.

Lennox (NYSE: LII) hat starke Ergebnisse für das dritte Quartal 2024 gemeldet, mit einem Umsatz von 1,5 Milliarden US-Dollar, was einem Anstieg von 15% im Kerngeschäft entspricht. Das Unternehmen erzielte einen Rekordbetriebseinkommen von 303 Millionen US-Dollar und einen verwässerten EPS nach GAAP von 6,68 US-Dollar, was einem Anstieg von 24% entspricht. Der Umsatz des Segments Heimkomfortlösungen wuchs um 15% auf 1,0 Milliarden US-Dollar, während der Umsatz des Segments Gebäude-Klimalösungen um 15% auf 465 Millionen US-Dollar zunahm. Der Nettobetriebs-Cashflow erreichte 452 Millionen US-Dollar, bei einem freien Cashflow-Anstieg um 50% auf 412 Millionen US-Dollar. Aufgrund der starken Leistung hat Lennox die Jahresprognose für 2024 angehoben und rechnet mit einem Umsatzwachstum von 10% und einem EPS von 20,75 bis 21,00 US-Dollar.

Positive
  • Core revenue growth of 15% to $1.5 billion
  • Record operating income of $303 million, up 21%
  • EPS increased 24% to $6.68
  • Free cash flow up 50% to $412 million
  • Raised full-year guidance for revenue and EPS
  • Home Comfort Solutions segment profit up 25%
  • Successful integration of AES acquisition ahead of schedule
Negative
  • Building Climate Solutions segment margin decreased 120 basis points to 22.8%
  • Ongoing expenses related to new factory ramp-up and manufacturing inefficiencies
  • Corporate expenses increased by $2 million versus prior year

Insights

Lennox delivered an outstanding Q3 performance with several key achievements: core revenue up 15%, operating income at $303 million and EPS growth of 24% to $6.68. The company's transformation initiatives are yielding strong results, evidenced by margin expansion and robust free cash flow generation of $412 million.

Both major segments showed impressive 15% revenue growth. Home Comfort Solutions demonstrated strong margin expansion to 21.9%, while Building Climate Solutions maintained healthy profitability despite new factory investments. The raised full-year guidance, including $20.75-$21.00 EPS and $575-650 million free cash flow, reflects management's confidence in sustained momentum.

The strong performance is particularly noteworthy given industry challenges. Lennox capitalized on R-410A availability issues to gain market share, while successfully executing strategic initiatives including the Samsung joint venture and new Saltillo factory launch. The AES acquisition integration ahead of schedule demonstrates effective M&A execution.

The company's focus on low Global Warming Potential (GWP) products positions it well for future regulatory changes and growing environmental concerns. With robust pricing power, operational improvements and strategic investments bearing fruit, Lennox appears well-positioned for continued market leadership in climate control solutions.

Q3 Highlights
(All comparisons are year-over-year, unless otherwise noted)
(Prior-year adjusted results and core revenue exclude European operations that were divested in the 4Q 2023)

  • Revenue $1.5 billion – Core revenue up 15%, including 2% growth from acquisitions
  • GAAP Operating Income $303 million – Adjusted segment profit up 21% to $303 million
  • GAAP diluted EPS $6.68 – Adjusted diluted EPS up 24% to $6.68
  • Net cash from operations was $452 million – Free cash flow was $412 million, up 50%
  • Raising FY guidance to 10% revenue growth, EPS to $20.75-$21.00 and cash flow to $575 - $650 million

Highlights from recent press announcements:

Company announced CLO, John Torres, has elected to retire and is being succeeded by Monica Brown, effective January 1, 2025.

DALLAS, Oct. 23, 2024 /PRNewswire/ -- Lennox (NYSE: LII), a leader in energy-efficient climate-control solutions, today reported third quarter financial results with $1.5 billion of revenue, a record $303 million of operating income and $6.68 GAAP diluted earnings per share.

Core revenue grew 15% to $1.5 billion. Adjusted segment profit rose 21% to $303 million. Adjusted segment margin was up 90 basis points to a record 20.2%. Adjusted diluted earnings per share rose 24% to $6.68.

"The Lennox team is proud to deliver another exceptional quarter driven by the effective execution of our transformation plan," said Chief Executive Officer, Alok Maskara. "We also successfully operationalized the Samsung Lennox joint venture, started production at our new Saltillo commercial factory, and integrated AES ahead of schedule. Our low GWP transition plan and products are strengthening our competitive edge, and we are well-positioned to capture market share in the years ahead. This gives us confidence to raise our full year guidance once again."

"In addition to the impressive third quarter results, we announced this morning that Monica Brown will be appointed Chief Legal Officer of Lennox, effective January 1, 2025, given the planned retirement of John Torres, our current Chief Legal Officer, in February 2025. I want to thank John for his invaluable counsel and leadership at Lennox and congratulate Monica on her new role," Maskara continued.

The Home Comfort Solutions segment generated 15% revenue growth in the third quarter, driven by impressive sales volume and continued focus on pricing. Sales volume benefited from industry R-410A availability challenges and restocking of depleted industry inventories. The segment maintained steady margin expansion, effectively offsetting the impact of inflation and ongoing investments.

The Business Climate Solutions segment revenue grew 15% this quarter. The AES business continues to perform well, contributing 6% revenue growth to the segment.  The integration of the AES acquisition was successfully completed ahead of schedule. Segment profit margin continues to be impacted by ongoing investments to ramp up our new factory in Saltillo, Mexico.

THIRD QUARTER 2024 FINANCIAL HIGHLIGHTS
(All comparisons are year-over-year, unless otherwise noted)

Revenue: $1.5 billion was up 10% and up 15% for core operations, with organic revenue up 13% driven by favorable sales volume as well as price/mix benefits.

Operating Income: $303 million, up 62%, with operating profit margin of 20.2%, up 650 basis points.

Adjusted Segment Profit: $303 million, up 21%, and adjusted segment profit margin of 20.2%, up 90 basis points. Profit growth was driven by $47 million in organic and inorganic sales volume, and $43 million of price/mix benefits. This was partially offset by inflation and new factory expenses, SG&A, and distribution investments.

Net Income: $239 million, or $6.68 per share, compared to $130 million, or $3.65 per share, in the prior-year quarter.

Adjusted Net Income: $239 million, or $6.68 per share, compared to $192 million, or $5.37 per share, in the prior-year quarter.

Cash Flow: Operating cash flow was $452 million compared to $313 million in the prior-year quarter. Capital expenditures were $41 million compared to $40 million in the prior-year quarter. This quarter the company repurchased $13 million in shares.

Home Comfort Solutions: Business segment revenue was $1.0 billion, up 15%. Segment profit was $227 million, up 25%, and segment margin was 21.9%, up 170 basis points. Segment profit increased $45 million compared to the prior-year quarter. The increase was attributed to $35 million in sales volume and $33 million in price/mix benefits. This was partially offset by a $23 million impact from inflation and investments in distribution and selling. 

Building Climate Solutions: Business segment revenue was $465 million, up 15%. Organic revenue was $442 million, up 9%. Segment profit was $106 million, up $9 million or 9%, and segment margin decreased 120 basis points to 22.8%. This profit improvement was driven by a $12 million increase in organic and inorganic sales volume and $10 million in price/mix improvement. This was offset by $10 million of expense related to the new factory ramp-up and manufacturing inefficiencies at existing facilities, in addition to $3 million of inflationary wage impacts.

Corporate and Other: Corporate expenses were $29 million, an increase of $2 million versus the prior-year quarter adjusted amount.

FULL YEAR 2024 GUIDANCE
For full year 2024, we are increasing revenue guidance to approximately 10%, with 2% of benefit from the AES acquisition.

Earnings per share revised range is $20.75 to $21.00 versus the prior range of $19.50 to $20.25.

Free Cash Flow is estimated to be within the range of $575 million to $650 million compared to the prior range of $500 million to $600 million.

CONFERENCE CALL INFORMATION
A conference call to discuss the company's third quarter results and 2024 outlook will be held this morning at 8:30 a.m. Central Time. To participate in the earnings conference, please call 800-245-3047 (U.S.) or +1 203-518-9765 (international) at least 10 minutes prior to the scheduled start time and use conference ID LIIQ324. The conference call also will be webcast live on the company's investor relations web site at investor.lennox.com. A replay of the conference call will be available until October 30, 2024, by calling toll-free 800-925-9940 (U.S.) or +1 402-220-5394 (international). The call will also be archived on the company's investor relations website at investor.lennox.com.

ABOUT LENNOX
Lennox (NYSE: LII) is a leader in energy-efficient climate-control solutions. Dedicated to sustainability and creating comfortable and healthier environments for our residential and commercial customers while reducing their carbon footprint, we lead the field in innovation with our cooling, heating, indoor air quality, and refrigeration systems. Additional information on Lennox is available at Lennox.com or by contacting investor@lennox.com.

FORWARD-LOOKING STATEMENTS & NON-GAAP FINANCIAL MEASURES
The statements in this document that are not historical statements, including statements regarding the 2024 full-year outlook and expected consolidated and segment financial results, as well as financial targets for future years, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on information currently available as well as management's assumptions and beliefs today. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from the results expressed or implied by the statements, and investors should not place undue reliance on them. Risks and uncertainties that could cause actual results to differ materially from such statements include risks that the North American unitary HVAC and refrigeration markets perform worse than current assumptions. Additional risks include but are not limited to competition in the HVACR business; our ability to successfully develop and market new products or execute our business strategy; our ability to meet and anticipate customer demands; our ability to continue to license or enforce our intellectual property rights; our ability to attract, motivate, develop, and retain our employees, as well as labor relations problems; a decline in new construction activity and related demand for our products and services; the impact of weather on our business; the impact of higher raw material prices and significant supply interruptions; changes in environmental and climate-related legislation or government regulations or policies; changes in tax legislation; the impact of new or increased trade tariffs; warranty, intellectual property infringement, product liability and other claims; litigation risks; general economic conditions in the United States and abroad; extraordinary events beyond our control; foreign currency fluctuations and changes in local government regulation associated with our international operations; cyber attacks and other disruptions or misuse of information systems; our ability to successfully realize, complete and integrate acquisitions; and impairment of the value of our goodwill.

For information concerning these and other risks and uncertainties, see LII's publicly available filings with the Securities and Exchange Commission. LII disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

A reconciliation of non-GAAP financial measures appearing in this document to financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) are included in the Annex to this document.

This document includes forward-looking statements regarding core revenue, segment profit, adjusted segment profit, adjusted net income, adjusted diluted earnings per share, free cash flow, and Debt to EBITDA, which are non-GAAP financial measures. These non-GAAP financial measures are derived by excluding certain amounts from the corresponding financial measures determined in accordance with GAAP. The determination of the amounts excluded is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period and the high variability of certain amounts, such as unusual gains and losses, the ultimate outcome of pending litigation, fluctuations in foreign currency exchange rates, changes in environmental liabilities, the impact and timing of potential acquisitions and divestitures, future restructuring costs, and other structural changes or their probable significance. Core revenue, adjusted segment profit, and adjusted diluted earnings per share exclude net sales and profit/(loss) from our European portfolio, which was sold in 4Q 2023. We are unable to present a quantitative reconciliation of the aforementioned forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures because such information is not available, and management cannot reliably predict the necessary components of such GAAP measures without unreasonable effort or expense. The unavailable information could have a significant impact on LII's full year GAAP financial results.

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




Lennox International Inc. corporate logo. (PRNewsFoto/Lennox International Inc.) (PRNewsfoto/Lennox International Inc.)

 

 

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SOURCE Lennox International Inc.

FAQ

What was Lennox (LII) revenue in Q3 2024?

Lennox reported Q3 2024 revenue of $1.5 billion, representing a 15% increase in core revenue year-over-year.

How much did Lennox (LII) EPS grow in Q3 2024?

Lennox's adjusted diluted EPS grew 24% to $6.68 in Q3 2024 compared to $5.37 in the prior-year quarter.

What is Lennox's (LII) updated guidance for full-year 2024?

Lennox raised its 2024 guidance to 10% revenue growth, EPS of $20.75-$21.00, and free cash flow of $575-650 million.

How did Lennox's (LII) Home Comfort Solutions segment perform in Q3 2024?

The Home Comfort Solutions segment generated 15% revenue growth to $1.0 billion, with segment profit up 25% and margin improving 170 basis points to 21.9%.

Lennox International Inc.

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