07/24/2024 | Press release | Distributed by Public on 07/24/2024 04:49
(Amounts in millions, except per share data) | For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | |||||
Net sales | $ | 1,451.1 | $ | 1,411.4 | $ | 2,498.2 | $ | 2,460.7 |
Cost of goods sold | 962.9 | 953.6 | 1,670.0 | 1,696.2 | ||||
Gross profit | 488.2 | 457.8 | 828.2 | 764.5 | ||||
Operating Expenses: | ||||||||
Selling, general and administrative expenses | 168.5 | 181.3 | 339.2 | 348.8 | ||||
Losses and other expenses, net | 3.7 | 0.8 | 7.4 | 1.1 | ||||
Gain on sale from previous dispositions
|
(1.6) | - | (1.6) | - | ||||
Income from equity method investments | (2.5) | (3.1) | (3.7) | (3.8) | ||||
Operating income | 320.1 | 278.8 | 486.9 | 418.4 | ||||
Pension settlements | 0.3 | 0.1 | 0.3 | 0.3 | ||||
Interest expense, net | 12.5 | 15.0 | 24.3 | 29.2 | ||||
Other expense, net | 0.3 | - | 1.1 | - | ||||
Income before income taxes | 307.0 | 263.7 | 461.2 | 388.9 | ||||
Provision for income taxes | 61.1 | 46.5 | 91.0 | 73.7 | ||||
Net income | $ | 245.9 | $ | 217.2 | $ | 370.2 | $ | 315.2 |
Earnings per share - Basic: | $ | 6.91 | $ | 6.12 | $ | 10.40 | $ | 8.88 |
Earnings per share - Diluted: | $ | 6.87 | $ | 6.10 | $ | 10.34 | $ | 8.85 |
Weighted Average Number of Shares Outstanding - Basic | 35.6 | 35.5 | 35.6 | 35.5 | ||||
Weighted Average Number of Shares Outstanding - Diluted | 35.8 | 35.6 | 35.8 | 35.6 |
LENNOX INTERNATIONAL INC. AND SUBSIDIARIES |
Segment Net Sales and Profit (Loss) |
(Unaudited)
|
(Amounts in millions) |
For the Three Months Ended June 30,
|
For the Six Months Ended June 30, | ||||||
2024 |
2023
|
2024 |
2023
|
|||||
Net Sales | ||||||||
Home Comfort Solutions | $ | 982.3 | $ | 936.2 | $ | 1,656.9 | $ | 1,617.2 |
Building Climate Solutions | 468.8 | 407.5 | 841.3 | 716.1 | ||||
Corporate and other (1)
|
- | 67.7 | - | 127.4 | ||||
$ | 1,451.1 | $ | 1,411.4 | $ | 2,498.2 | $ | 2,460.7 | |
Segment Profit (Loss) (2)
|
||||||||
Home Comfort Solutions | $ | 228.5 | $ | 202.6 | $ | 340.6 | $ | 313.7 |
Building Climate Solutions | 114.0 | 103.0 | 192.2 | 153.0 | ||||
Corporate and other | (24.0) | (22.5) | (47.5) | (41.9) | ||||
Total segment profit | 318.5 | 283.1 | 485.3 | 424.8 | ||||
Reconciliation to Operating income: | ||||||||
Gain on sale from previous dispositions | (1.6) | - | (1.6) | - | ||||
Items in Losses and other expenses, net which are excluded from segment profit (loss) (2)
|
- | 4.3 | 6.4 | |||||
Operating income | $ | 320.1 | $ | 278.8 | $ | 486.9 | $ | 418.4 |
(Amounts in millions, except shares and par values) | As of June 30, 2024 | As of December 31, 2023 | ||
ASSETS |
(Unaudited)
|
|||
Current Assets: | ||||
Cash and cash equivalents | $ | 47.6 | $ | 60.7 |
Short-term investments | 10.2 | 8.4 | ||
Accounts and notes receivable, net of allowances of $16.1 and $14.4 in 2024 and 2023, respectively
|
858.6 | 594.6 | ||
Inventories, net | 776.3 | 699.1 | ||
Other assets | 72.6 | 70.7 | ||
Total current assets | 1,765.3 | 1,433.5 | ||
Property, plant and equipment, net of accumulated depreciation of $936.5 and $910.8 in 2024 and 2023, respectively
|
740.8 | 720.4 | ||
Right-of-use assets from operating leases | 271.6 | 213.6 | ||
Goodwill | 219.9 | 222.1 | ||
Deferred income taxes | 63.0 | 51.8 | ||
Other assets, net | 161.3 | 156.9 | ||
Total assets | $ | 3,221.9 | $ | 2,798.3 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current Liabilities: | ||||
Accounts payable | $ | 450.8 | $ | 374.7 |
Accrued expenses | 393.0 | 416.1 | ||
Income taxes payable | 33.1 | 4.2 | ||
Commercial paper | 147.0 | 150.0 | ||
Current maturities of long-term debt | 14.0 | 12.1 | ||
Current operating lease liabilities |
66.6 | 57.5 | ||
Total current liabilities | 1,104.5 | 1,014.6 | ||
Long-term debt | 1,126.8 | 1,143.1 | ||
Long-term operating lease liabilities | 215.2 | 164.6 | ||
Pensions | 18.1 | 22.5 | ||
Other liabilities | 179.9 | 168.2 | ||
Total liabilities | 2,644.5 | 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 | 1,197.9 | 1,184.6 | ||
Retained earnings | 3,796.0 | 3,506.2 | ||
Accumulated other comprehensive loss | (60.8) | (56.9) | ||
Treasury stock, at cost,51,538,343shares and 51,588,103 shares for 2024 and 2023, respectively
|
(4,356.6) | (4,349.5) | ||
Total stockholders' equity | 577.4 | 285.3 | ||
Total liabilities and stockholders' equity | $ | 3,221.9 | $ | 2,798.3 |
(Amounts in millions) | For the Six Months Ended June 30, | |||
2024 | 2023 | |||
Cash flows from operating activities: | ||||
Net income | $ | 370.2 | $ | 315.2 |
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 | (3.7) | (3.8) | ||
Provision for credit losses | 3.4 | 3.8 | ||
Unrealized losses, net on derivative contracts | 0.5 | 3.9 | ||
Stock-based compensation expense | 13.3 | 13.8 | ||
Depreciation and amortization | 49.2 | 40.5 | ||
Deferred income taxes | (13.4) | (18.9) | ||
Pension expense | 2.0 | 1.4 | ||
Pension contributions | (5.1) | (2.0) | ||
Other items, net | (0.1) | (1.2) | ||
Changes in assets and liabilities, net of effects of acquisitions and divestitures: | ||||
Accounts and notes receivable | (270.8) | (236.5) | ||
Inventories | (78.9) | (100.4) | ||
Other current assets | (2.5) | 8.7 | ||
Accounts payable | 76.2 | 45.4 | ||
Accrued expenses | (22.1) | 45.6 | ||
Income taxes payable and receivable, net | 40.1 | 4.1 | ||
Leases, net | 1.8 | 3.3 | ||
Other, net | 2.7 | (6.2) | ||
Net cash provided by operating activities | 161.2 | 116.7 | ||
Cash flows from investing activities: | ||||
Proceeds from the disposal of property, plant and equipment | 1.1 | 1.5 | ||
Purchases of property, plant and equipment | (62.2) | (85.3) | ||
Net proceeds from previous disposition | 4.1 | - | ||
Acquisitions, net of cash | 1.8 | - | ||
(Purchases of) proceeds from short-term investments | (2.0) | 1.5 | ||
Net cash used in investing activities | (57.2) | (82.3) | ||
Cash flows from financing activities: | ||||
Commercial paper borrowings | 374.0 | - | ||
Commercial paper payments | (377.0) | - | ||
Asset securitization borrowings | - | 140.0 | ||
Asset securitization payments | - | (90.0) | ||
Long-term debt payments | (9.9) | (7.3) | ||
Borrowings from credit facility | 156.7 | 1,182.0 | ||
Payments on credit facility | (176.7) | (1,182.0) | ||
Proceeds from employee stock purchases | 2.0 | 1.9 | ||
Repurchases of common stock to satisfy employee withholding tax obligations | (9.1) | (3.2) | ||
Cash dividends paid | (78.3) | (75.2) | ||
Net cash used in financing activities | (118.3) | (33.8) | ||
(Decrease) increase in cash and cash equivalents | (14.3) | 0.6 | ||
Effect of exchange rates on cash and cash equivalents | 1.2 | (1.8) | ||
Cash and cash equivalents, beginning of period | 60.7 | 52.6 | ||
Cash and cash equivalents, end of period | $ | 47.6 | $ | 51.4 |
Supplemental disclosures of cash flow information: | ||||
Interest paid | $ | 25.6 | $ | 27.1 |
Income taxes paid (net of refunds) | $ | 60.2 | $ | 88.4 |
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. |
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Reconciliation of Net income, a GAAP measure, to Adjusted net income, a Non-GAAP measure | ||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 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 | $ | 245.9 | $ | 6.87 | $ | 217.2 | $ | 6.10 | $ | 370.2 | $ | 10.34 | $ | 315.2 | $ | 8.85 |
Gain on sale from previous dispositions | (1.6) | (0.04) | - | - | (1.6) | (0.04) | - | - | ||||||||
Pension settlements | - | - | 0.1 | - | - | - | 0.3 | 0.01 | ||||||||
Items in Losses and other expenses, net which are excluded from segment profit (loss) (a) | - | - | 2.9 | 0.09 | - | - | 3.5 | 0.10 | ||||||||
Excess tax benefit from share-based compensation (b) | - | - | (0.1) | - | - | - | (0.1) | - | ||||||||
Other tax items, net (b) | 0.1 | - | - | - | 0.4 | 0.01 | ||||||||||
Non-core business results (c) | - | - | (1.4) | (0.04) | - | - | - | - | ||||||||
Adjusted net income, a non-GAAP measure | $ | 244.3 | $ | 6.83 | $ | 218.8 | $ | 6.15 | $ | 368.6 | $ | 10.30 | $ | 319.3 | $ | 8.97 |
(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) 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 June 30, | For the Six Months Ended June 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
Net cash provided by operating activities | $ | 184.0 | $ | 195.5 | $ | 161.2 | $ | 116.7 |
Purchases of property, plant and equipment | (32.7) | (49.9) | (62.2) | (85.3) | ||||
Proceeds from the disposal of property, plant and equipment | 0.6 | 1.2 | 1.1 | 1.5 | ||||
Free cash flow, a Non-GAAP measure | $ | 151.9 | $ | 146.8 | $ | 100.1 | $ | 32.9 |
Reconciliation of Net sales, a GAAP measure to Core net sales, a Non-GAAP measure | ||||
For the Three Months Ended June 30, | ||||
Corporate and Other | Consolidated | |||
2023 | 2023 | |||
Net sales, a GAAP measure | $ | 67.7 | $ | 1,411.4 |
Net sales from non-core businesses (a) |
(67.7) | (67.7) | ||
Core net sales, a Non-GAAP measure | $ | - | $ | 1,343.7 |
(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 Six Months Ended June 30, | ||||
Corporate and Other | Consolidated | |||
2023 | 2023 | |||
Net sales, a GAAP measure | $ | 127.4 | $ | 2,460.7 |
Net sales from non-core businesses (a) | (127.4) | (127.4) | ||
Core net sales, a Non-GAAP measure | $ | - | $ | 2,333.3 |
(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 June 30, | ||||
Corporate and Other | Consolidated | |||
2023 | 2023 | |||
Segment profit (loss), a Non-GAAP measure | $ | (22.5) | $ | 283.1 |
Profit from non-core businesses (a) | 2.4 | 2.4 | ||
Adjusted Segment profit (loss), a Non-GAAP measure | $ | (24.9) | $ | 280.7 |
(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 Six Months Ended June 30, | ||||
Corporate and Other | Consolidated | |||
2023 | 2023 | |||
Segment profit (loss), a Non-GAAP measure | $ | (41.9) | $ | 424.8 |
Profit (loss) from non-core businesses (a) | 2.1 | 2.1 | ||
Adjusted Segment profit (loss), a Non-GAAP measure | $ | (44.0) | $ | 422.7 |
(a) Non-Core businesses represent our business operations in Europe |