Q3 Results Summary
(All comparisons are
year-over-year, unless otherwise noted)
- Revenue up 10% to $1.37 billion;
core revenue excluding European Operations up 10% to $1.30 billion
- GAAP diluted EPS down 9% to $3.65, impacted by impairment related to European
divestiture; adjusted diluted EPS up 30% to $5.37
- Operating cash flow up 83% to $313
million
- Raising 2023 outlook with core revenue up ~5% and an adjusted
EPS range of $17.25 to $17.75
Highlights from recent press announcements:
- Company announced the acquisition of AES to expand Lennox
commercial HVAC services
- Company announced CFO Joseph
Reitmeier has elected to retire and is being succeeded by
Michael Quenzer, effective
January 1, 2024
DALLAS, Oct. 26, 2023 /PRNewswire/ --
Lennox (NYSE: LII), a leader in energy-efficient
climate-control solutions, today reported record third quarter
revenue of $1.37 billion. Operating
income was $187 million for the third
quarter, including a $63M non-cash
impairment related to the planned European divestiture. Operating
margin was 13.7% and GAAP diluted earnings per share was
$3.65.
Core revenue, excluding European Operations, grew 10% to
$1.30 billion. Adjusted segment
profit rose 33% to $251 million.
Adjusted segment margin was 19.3%, up 334 basis points. Adjusted
earnings per share rose 30% to $5.37.
"The record results Lennox achieved this quarter are a testament
to our consistent leadership performance, the dedication and
teamwork of our employees, and the focus on our transformational
self-help initiatives," said Chief Executive Officer, Alok Maskara. "With continued momentum and solid
execution on driving top line growth and expanding margins, we are
confidently raising our 2023 full year earnings estimate and
increasing our revenue and free cash flow guidance."
"In addition to the impressive third quarter results, we have
announced the planned transition of our Chief Financial Officer at
the beginning of next year and portfolio updates including our
strategic bolt-on acquisition of AES," Maskara continued.
In the third quarter, our Residential segment maintained a
positive mix with increased sales of higher-efficiency products,
which, along with effective pricing, led to a 7% sales growth and
an 18% rise in operating profits. Although unit sales volumes
for the segment declined by 2%, our direct-to-contractor sales
volume increased by 5%, reflecting healthy end markets and ongoing
market share gains. Unit sales volumes through independent
distribution channels declined mid-teens, primarily due to
continued industry destocking, which decelerated during the
quarter.
The Commercial segment continues to achieve remarkable profit
growth through pricing and higher efficiency product mix. Increased
factory productivity has offset inflation and we have made
significant progress on our new factory construction which will
support growth and productivity.
THIRD QUARTER 2023 FINANCIAL HIGHLIGHTS
(All
comparisons are year-over-year, unless otherwise noted)
Revenue: $1.37 billion; Core revenue, which excludes
our European operations, was $1.30
billion, up 10%. Revenue growth was driven by price
and favorable mix and partially offset by lower sales volumes.
Operating Income: $187 million with operating profit
margin of 13.7%.
Adjusted Segment Profit: $251 million, up 33%, and adjusted
segment profit margin of 19.3%, up 334 basis points. Adjusted
segment profit increased $62 million
as $97 million of price and mix
benefits were partially offset by lower sales volumes and
inflationary impacts on SG&A and distribution costs.
Net Income: $130.4 million, or $3.65 per share, compared to $141.9 million, or $3.99 per share, in the prior year quarter.
Adjusted Net Income: $191.6
million, or $5.37 per share,
compared to $146.8 million, or
$4.13 per share, in the prior year
quarter.
Cash: Operating cash flow was $313
million compared to $171
million in the prior-year quarter. Capital expenditures were
$40 million compared to $20 million in the prior year quarter with the
increase driven by the new Commercial factory investment in
Saltillo, Mexico. Total debt at
the end of the third quarter was approximately $1.5 billion. Total cash, cash equivalents and
short-term investments were $142
million at the end of the quarter.
Residential: Business segment revenue was
$896 million, 7% greater than the
prior year. Segment profit was $181
million, up 18%, and segment margin was 20.2%, up 183 basis
points. Versus prior year, profit increased $28 million. The increase was driven by
$51 million in pricing and mix
benefits, partially offset by $4
million lower volume, along with headwinds of $19 million primarily from incentive compensation
and inflationary wage and distribution impacts.
Commercial: Business segment revenue was
$406 million, up 15%. Segment profit
was $97 million, up 86%, and segment
margin expanded 912 basis points to 24.0%. Segment profit
increased $45 million compared to
prior year, driven by $47 million of
price and mix benefits and $1 million
generated by higher sales volumes. Minor inflationary impacts on
materials and production costs partially offset these gains.
Corporate and Other: Revenue in the European
Refrigeration operations was $64.5
million, up 13%. European operations had $3.9 million in profit compared to a $0.4 million loss in the prior year
quarter. Corporate expenses were $27
million, or up $11 million
compared to the prior year quarter as a result of higher incentive
compensation and wage inflation.
Loss on Divestiture: Lennox recently announced the
exclusive agreements for its European businesses. In the third
quarter a non-cash impairment of $63
million was recorded. Both transactions are expected to
close in the fourth quarter.
FULL-YEAR 2023 GUIDANCE
For the full year of 2023, we
now expect core revenue to be up approximately 5% (previous: up 2%
to up 4%) and we expect adjusted earnings per share of $17.25 to $17.75
(previous: $15.50 to $16.00).
Based on exceptional year-to-date performance and end market
outlook, we are updating our free cash flow outlook to include
operating cash flow of $600 million
to $650 million and capital
expenditures of approximately $250
million.
"As we close out this year, I am confident in our ability to
achieve our 2023 targets and remain excited about the opportunities
ahead. I want to extend a heartfelt thank you to Joe Reitmeier for his dedication over the years
and congratulate Michael Quenzer on
his new role as CFO. Lennox also warmly welcomes the AES team and
is excited to integrate their expertise to deliver additional value
to our customers," Maskara concluded.
CONFERENCE CALL INFORMATION
A conference call to
discuss the company's third quarter results and 2023 full year
outlook will be held this morning at 8:30
a.m. Central Time. To participate in the earnings
conference, please call 800-274-8461 (U.S.) or +1 203-518-9765
(international) at least 10 minutes prior to the scheduled start
time and use conference ID LIIQ323. The conference call also will
be webcast live on the company's investor relations web site at
www.investor.lennox.com. A replay of the conference call will be
available until November 9, 2023, by
calling toll-free 800-938-2113 (U.S.) or +1 402-220-1118
(international). The call will also be archived on the company's
investor relations website.
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 www.investor.lennox.com or by
contacting investor@lennoxintl.com.
FORWARD-LOOKING STATEMENTS & NON-GAAP FINANCIAL
MEASURES
The statements in this document that are not
historical statements, including statements regarding the 2023
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 the impact of higher raw material prices, availability and
timely delivery of raw materials and other components, competition
in the HVACR business, ability to meet customer demand, the impact
of new or increased trade tariffs, LII's ability to successfully
execute its business strategy including implementing price
increases for its products and services, economic conditions in our
markets, regulatory changes, the impact of unfavorable weather, and
a decline in new construction activity and related demand for
products and services. 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, adjusted earnings per share, and free cash flow 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 earnings per share
exclude net sales from our European portfolio, which we plan to
divest. 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,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales
|
$
1,366.3
|
|
$
1,244.9
|
|
$
3,827.1
|
|
$
3,624.6
|
Cost of goods
sold
|
937.8
|
|
910.7
|
|
2,634.1
|
|
2,625.1
|
Gross
profit
|
428.5
|
|
334.2
|
|
1,193.0
|
|
999.5
|
Operating Expenses:
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
178.9
|
|
147.3
|
|
527.6
|
|
472.2
|
Losses (gains) and
other expenses, net
|
3.5
|
|
3.3
|
|
5.2
|
|
5.4
|
Restructuring
charges
|
0.3
|
|
0.2
|
|
0.2
|
|
1.2
|
Impairment on assets
held for sale
|
63.2
|
|
—
|
|
63.2
|
|
—
|
Income from equity
method investments
|
(4.2)
|
|
(2.4)
|
|
(8.0)
|
|
(3.9)
|
Operating income
|
186.8
|
|
185.8
|
|
604.8
|
|
524.6
|
Pension
settlements
|
0.3
|
|
—
|
|
0.4
|
|
0.3
|
Interest expense,
net
|
11.2
|
|
10.5
|
|
40.4
|
|
26.1
|
Other expense (income),
net
|
0.1
|
|
0.7
|
|
(0.1)
|
|
1.9
|
Net income before
income taxes
|
175.2
|
|
174.6
|
|
564.1
|
|
496.3
|
Provision for income
taxes
|
44.8
|
|
32.7
|
|
118.5
|
|
93.6
|
Net income
|
$
130.4
|
|
$
141.9
|
|
$
445.6
|
|
$
402.7
|
|
|
|
|
|
|
|
|
Earnings per share – Basic:
|
$
3.67
|
|
$
4.00
|
|
$
12.55
|
|
$
11.25
|
|
|
|
|
|
|
|
|
Earnings per share –
Diluted:
|
$
3.65
|
|
$
3.99
|
|
$
12.51
|
|
$
11.22
|
|
|
|
|
|
|
|
|
Weighted Average Number of Shares Outstanding -
Basic
|
35.5
|
|
35.4
|
|
35.5
|
|
35.8
|
Weighted Average Number of Shares Outstanding -
Diluted
|
35.7
|
|
35.5
|
|
35.6
|
|
35.9
|
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,
|
|
|
|
2023
|
|
2022(2)
|
|
2023
|
|
2022(2)
|
Net Sales
|
|
|
|
|
|
|
|
Residential
|
$
896.3
|
|
$
835.3
|
|
$
2,513.6
|
|
$
2,494.9
|
Commercial
(2)
|
405.5
|
|
352.3
|
|
1,121.5
|
|
959.2
|
Corporate and other
(2)
|
64.5
|
|
57.3
|
|
192.0
|
|
170.5
|
|
$
1,366.3
|
|
$
1,244.9
|
|
$
3,827.1
|
|
$
3,624.6
|
Segment Profit (Loss)
(1)
|
|
|
|
|
|
|
|
Residential
|
$
181.4
|
|
$
153.8
|
|
$
495.2
|
|
$
477.7
|
Commercial
(2)
|
97.3
|
|
52.4
|
|
250.3
|
|
117.4
|
Corporate and
other (2)
|
(23.4)
|
|
(16.9)
|
|
(65.2)
|
|
(61.4)
|
Total segment
profit
|
255.3
|
|
189.3
|
|
680.3
|
|
533.7
|
Reconciliation to Operating
income:
|
|
|
|
|
|
|
|
Impairment on assets
held for sale
|
63.2
|
|
—
|
|
63.2
|
|
—
|
Items in Losses (gains)
and other expenses, net which are excluded from
segment profit (loss) (1)
|
5.0
|
|
$
3.3
|
|
12.1
|
|
7.9
|
Restructuring
charges
|
0.3
|
|
0.2
|
|
0.2
|
|
1.2
|
Operating income
|
$
186.8
|
|
$
185.8
|
|
$
604.8
|
|
$
524.6
|
|
(1)
|
We define segment
profit (loss) as a segment's operating income included in the
accompanying Consolidated Statements of Operations,
excluding:
|
- The following items
in Losses (gains) and other expenses, net:
- Net change in
unrealized (gains) losses on unsettled futures
contracts,
- Environmental
liabilities and special litigation charges, and;
- Other items,
net
- Restructuring
charges, and;
- Impairment on
assets held for sale
|
(2)
|
Previously, we operated
in three reportable business segments. In November 2022, we
announced the decision to explore strategic alternatives for our
European portfolio and that we would continue to invest in our
Heatcraft Worldwide Refrigeration business, all of which were
previously in our Refrigeration segment. On January 1, 2023,
we adjusted our segment presentation to better align with how the
segments are managed and evaluated after the change in
portfolio. Heatcraft Worldwide Refrigeration is now part of
the Commercial segment while the European portfolio is presented
with Corporate and Other until disposition. Amounts presented in
this table have been recast to reflect the revised segment
presentation.
|
|
LENNOX INTERNATIONAL INC. AND
SUBSIDIARIES
Consolidated Balance
Sheets
(Unaudited)
|
|
|
|
(Amounts in millions, except shares and par
values)
|
As of September 30, 2023
|
|
As of December 31, 2022
|
ASSETS
|
(Unaudited)
|
|
|
Current Assets:
|
|
|
|
Cash and cash
equivalents
|
$
132.0
|
|
$
52.6
|
Short-term
investments
|
9.6
|
|
8.5
|
Accounts and notes
receivable, net of allowances of $15.3 and $15.5 in
2023 and 2022, respectively
|
694.8
|
|
608.5
|
Inventories,
net
|
747.9
|
|
753.0
|
Assets held for
sale
|
92.8
|
|
—
|
Other
assets
|
65.3
|
|
73.9
|
Total current
assets
|
1,742.4
|
|
1,496.5
|
Property, plant and
equipment, net of accumulated depreciation of $897.5
and $920.8 in 2023 and 2022, respectively
|
602.1
|
|
548.9
|
Right-of-use assets
from operating leases
|
214.1
|
|
219.9
|
Goodwill
|
181.7
|
|
186.3
|
Deferred income
taxes
|
50.1
|
|
27.5
|
Other assets,
net
|
99.7
|
|
88.5
|
Total assets
|
$
2,890.1
|
|
$
2,567.6
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
|
|
|
|
Current Liabilities:
|
|
|
|
Current maturities of
long-term debt
|
$
361.6
|
|
$
710.6
|
Current operating
lease liabilities
|
60.2
|
|
63.3
|
Accounts
payable
|
345.8
|
|
427.3
|
Accrued
expenses
|
408.7
|
|
376.9
|
Liabilities held for
sale
|
69.7
|
|
—
|
Income taxes
payable
|
9.0
|
|
17.6
|
Total current
liabilities
|
1,255.0
|
|
1,595.7
|
Long-term
debt
|
1,121.6
|
|
814.2
|
Long-term operating
lease liabilities
|
162.5
|
|
161.8
|
Pensions
|
33.9
|
|
40.1
|
Other
liabilities
|
157.6
|
|
158.9
|
Total liabilities
|
2,730.6
|
|
2,770.7
|
Commitments and
contingencies
|
|
|
|
Stockholders' equity
(deficit):
|
|
|
|
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
|
1,178.9
|
|
1,155.2
|
Retained
earnings
|
3,400.3
|
|
3,070.6
|
Accumulated other
comprehensive loss
|
(77.0)
|
|
(90.6)
|
Treasury stock, at
cost, 51,633,264 shares and 51,700,260 shares for
2023 and 2022, respectively
|
(4,343.6)
|
|
(4,339.2)
|
Total stockholders' equity
(deficit)
|
159.5
|
|
(203.1)
|
Total liabilities and stockholders' equity
(deficit)
|
$
2,890.1
|
|
$
2,567.6
|
LENNOX INTERNATIONAL INC. AND
SUBSIDIARIES
Consolidated
Statements of Cash Flows
(Unaudited)
|
|
(Amounts in millions)
|
For the Nine Months
Ended September 30,
|
|
2023
|
|
2022
|
Cash flows from operating
activities:
|
|
|
|
Net income
|
$
445.6
|
|
$
402.7
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Income from equity
method investments
|
(8.0)
|
|
(3.9)
|
Impairment on assets
held for sale
|
63.2
|
|
—
|
Dividends from
affiliates
|
—
|
|
1.2
|
Restructuring charges,
net of cash paid
|
—
|
|
0.7
|
Provision for credit
losses
|
4.7
|
|
4.3
|
Unrealized losses, net
on derivative contracts
|
5.6
|
|
0.8
|
Stock-based
compensation expense
|
23.5
|
|
16.4
|
Depreciation and
amortization
|
62.0
|
|
56.2
|
Deferred income
taxes
|
(24.9)
|
|
(16.6)
|
Pension
expense
|
2.4
|
|
5.1
|
Pension
contributions
|
(2.8)
|
|
(0.7)
|
Other items,
net
|
(1.4)
|
|
(1.4)
|
Changes in assets and
liabilities:
|
|
|
|
Accounts and notes
receivable
|
(142.5)
|
|
(214.9)
|
Inventories
|
(44.9)
|
|
(245.7)
|
Other current
assets
|
(0.5)
|
|
(5.1)
|
Accounts
payable
|
(10.9)
|
|
78.7
|
Accrued
expenses
|
69.4
|
|
36.0
|
Income taxes payable
and receivable, net
|
(6.7)
|
|
35.5
|
Leases,
net
|
3.4
|
|
0.8
|
Other, net
|
(7.3)
|
|
20.0
|
Net cash provided by operating
activities
|
429.9
|
|
170.1
|
Cash flows from investing
activities:
|
|
|
|
Proceeds from the
disposal of property, plant and equipment
|
1.6
|
|
1.2
|
Purchases of property,
plant and equipment
|
(125.0)
|
|
(67.0)
|
Purchases of
short-term investments
|
(1.1)
|
|
(2.4)
|
Net cash used in investing
activities
|
(124.5)
|
|
(68.2)
|
Cash flows from financing
activities:
|
|
|
|
Asset securitization
borrowings
|
190.0
|
|
382.0
|
Asset securitization
payments
|
(540.0)
|
|
(232.0)
|
Long-term debt
payments
|
(10.6)
|
|
(9.8)
|
Issuance of senior
unsecured notes
|
500.0
|
|
|
Borrowings from credit
facility
|
1,547.5
|
|
1,967.5
|
Payments on credit
facility
|
(1,739.5)
|
|
(1,752.0)
|
Payments of deferred
financing costs
|
(5.4)
|
|
—
|
Proceeds from employee
stock purchases
|
2.9
|
|
2.7
|
Repurchases of common
stock
|
—
|
|
(300.0)
|
Repurchases of common
stock to satisfy employee withholding tax obligations
|
(7.1)
|
|
(5.5)
|
Cash dividends
paid
|
(153.4)
|
|
(142.0)
|
Net cash used in financing
activities
|
(215.6)
|
|
(89.1)
|
Increase in cash and
cash equivalents
|
89.8
|
|
12.8
|
Cash balances
classified as assets held for sale
|
(7.6)
|
|
—
|
Effect of exchange
rates on cash and cash equivalents
|
(2.8)
|
|
(3.1)
|
Cash and cash
equivalents, beginning of period
|
52.6
|
|
31.0
|
Cash and cash equivalents, end of
period
|
$
132.0
|
|
$
40.7
|
|
|
|
|
Supplemental disclosures of cash flow
information:
|
|
|
|
Interest
paid
|
$
42.0
|
|
$
23.2
|
Income taxes paid (net
of refunds)
|
$
151.3
|
|
$
75.4
|
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. In addition to these non-GAAP
measures, the Company also provides rates of revenue change at
constant currency on a consolidated and segment basis if different
than the reported measures. 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.
In November 2022, we
announced the decision to explore strategic alternatives for our
European portfolio. The results from operations for these
businesses have been shown in the tables below as "Non-Core
business results." The prior period results have been updated to
provide period-over-period comparability.
|
|
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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
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
|
$ 130.4
|
$
3.65
|
|
$ 141.9
|
$
3.99
|
|
$ 445.6
|
$ 12.51
|
|
$ 402.7
|
$ 11.22
|
Restructuring
charges
|
0.3
|
0.01
|
|
0.2
|
—
|
|
0.2
|
0.01
|
|
1.0
|
0.03
|
Pension
settlements
|
0.2
|
0.01
|
|
—
|
—
|
|
0.3
|
0.01
|
|
0.2
|
0.01
|
Items in Losses
(gains) and other expenses, net
which are excluded from segment profit (loss) (a)
|
4.3
|
0.11
|
|
3.0
|
0.09
|
|
9.6
|
0.26
|
|
6.7
|
0.18
|
Excess tax benefit
from share-based
compensation (b)
|
(2.3)
|
(0.06)
|
|
(0.2)
|
—
|
|
(2.4)
|
(0.07)
|
|
0.3
|
0.01
|
Other tax items, net
(b)
|
—
|
—
|
|
0.7
|
0.02
|
|
0.4
|
0.01
|
|
(0.8)
|
(0.02)
|
Impairment on assets
held for sale
|
62.0
|
1.74
|
|
—
|
—
|
|
62.0
|
1.74
|
|
—
|
—
|
Non-core business
results (c)
|
(3.3)
|
(0.09)
|
|
1.2
|
0.03
|
|
(4.8)
|
(0.13)
|
|
6.2
|
0.17
|
Adjusted net income, a non-GAAP
measure
|
$
191.6
|
$
5.37
|
|
$ 146.8
|
$
4.13
|
|
$
510.9
|
$
14.34
|
|
$ 416.3
|
$
11.60
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Recorded in Losses
(gains) and other expenses, net in the Consolidated Statements of
Operations
|
|
|
|
|
|
|
|
(b) Recorded in
Provision for income taxes in the Consolidated Statements of
Operations
|
(c) Non-core business
results represent activity related to our business operations in
Europe not included elsewhere in the reconciliations
|
Net Cash Provided by Operating Activities, a GAAP
measure, to Free Cash Flow, a Non-GAAP measure (dollars in
millions)
|
|
|
For the Three Months
Ended September 30,
|
|
For the Nine Months
Ended September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net cash provided by operating
activities
|
$
313.2
|
|
$
170.9
|
|
$
429.9
|
|
$
170.1
|
Purchases of property,
plant and equipment
|
(39.7)
|
|
(20.3)
|
|
(125.0)
|
|
(67.0)
|
Proceeds from the
disposal of property, plant and equipment
|
0.1
|
|
0.7
|
|
1.6
|
|
1.2
|
Free cash flow, a Non-GAAP
measure
|
$
273.6
|
|
$
151.3
|
|
$
306.5
|
|
$
104.3
|
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
|
|
2022
|
|
2023
|
|
2022
|
Net sales, a GAAP
measure
|
$
64.5
|
|
$
57.3
|
|
$
1,366.3
|
|
$
1,244.9
|
Net sales from non-core
businesses (a)
|
(64.5)
|
|
(57.3)
|
|
(64.5)
|
|
(57.3)
|
Core net sales, a
Non-GAAP measure
|
$
—
|
|
$
—
|
|
$
1,301.8
|
|
$
1,187.6
|
|
|
|
|
|
|
|
|
(a) Non-Core businesses
represent our business operations in Europe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended September
30,
|
|
Corporate and other
|
|
Consolidated
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net sales, a GAAP
measure
|
$
192.0
|
|
$
170.5
|
|
$
3,827.1
|
|
$
3,624.6
|
Net sales from non-core
businesses (a)
|
(192.0)
|
|
(170.5)
|
|
(192.0)
|
|
(170.5)
|
Core net sales, a
Non-GAAP measure
|
$
—
|
|
$
—
|
|
$
3,635.1
|
|
$
3,454.1
|
|
|
|
|
|
|
|
|
(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
|
|
2022
|
|
2023
|
|
2022
|
Segment profit (loss),
a Non-GAAP measure
|
$
(23.4)
|
|
$
(16.9)
|
|
$
255.3
|
|
$
189.3
|
Profit (loss) from
non-core businesses (a)
|
3.9
|
|
(0.4)
|
|
3.9
|
|
(0.4)
|
Adjusted Segment profit
(loss), a Non-GAAP measure
|
$
(27.3)
|
|
$
(16.5)
|
|
$
251.4
|
|
$
189.7
|
|
|
|
|
|
|
|
|
(a) Non-Core businesses
represent our business operations in Europe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended September
30,
|
|
Corporate and other
|
|
Consolidated
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Segment profit (loss),
a Non-GAAP measure
|
$
(65.2)
|
|
$
(61.4)
|
|
$
680.3
|
|
$
533.7
|
Profit (loss) from
non-core businesses (a)
|
6.1
|
|
(4.4)
|
|
6.1
|
|
(4.4)
|
Adjusted Segment profit
(loss), a Non-GAAP measure
|
$
(71.3)
|
|
$
(57.0)
|
|
$
674.2
|
|
$
538.1
|
|
|
|
|
|
|
|
|
(a) Non-Core businesses
represent our business operations in Europe
|
|
|
|
|
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SOURCE Lennox International Inc.