(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||||||||
| (d) | Exhibits. | ||||
EXHIBIT NUMBER | DESCRIPTION | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 104 | Inline XBRL for the cover page of this Current Report on Form 8-K. | |||||||
| * | The information contained in Item 2.02, Item 7.01, and Exhibits 99.1 and 99.2 of this report is being “furnished” with the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that section. Furthermore, such information shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, unless specifically identified as being incorporated therein by reference. | ||||
| Date: October 23, 2024 | ||||||||
| By: | /s/ Michael P. Quenzer | |||||||
| Name: | Michael P. Quenzer | |||||||
| Title: | Executive Vice President and Chief Financial Officer | |||||||
| (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 | |||||||||||||||
| (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 | |||||||
| (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 | |||||||||||