- Adjusted EPS from continuing operations $0.67, and GAAP EPS from
continuing operations $0.63 - Generated $55 million in free cash
flow, up 26% - Narrowing 2009 revenue guidance from down 15-19% to
down 17-19% - Narrowing 2009 guidance for adjusted EPS from
continuing operations from $1.65-$2.05 to $1.65-$1.80; GAAP
guidance from continuing operations now $1.38-$1.53 DALLAS, July 22
/PRNewswire-FirstCall/ -- Lennox International Inc. (NYSE: LII)
today reported financial results for the second quarter of 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020304/DAM053LOGO)
Revenue for the second quarter was $791 million, 21% below the
prior-year quarter. Excluding the negative impact of foreign
exchange, revenue would have been down 17%. Diluted earnings per
share from continuing operations on an adjusted basis, a non-GAAP
measure, was $0.67, compared to $1.02 in the record second quarter
a year ago. Diluted earnings per share from continuing operations
on a GAAP basis was $0.63, compared to $0.89 in the year-ago
quarter. "End market conditions remained difficult in the second
quarter, but strong operational execution enabled Lennox to
generate $55 million of free cash flow in the quarter, up 26% from
last year," said Todd Bluedorn, Chief Executive Officer. "While the
residential market continued to decline from a year ago, we saw the
rate of decline slow in the second quarter. In the commercial and
refrigeration markets, however, we saw the rate of decline increase
in the quarter. Looking ahead at the full year, we are narrowing
our revenue and adjusted EPS guidance to the low end of our
previous range. We continue to execute on our cost reduction
programs and strategic initiatives as offsets to the challenging
end markets we expect through 2009." (Note: See attached schedules
for financial details, reconciliations of non-GAAP financial
measures, and a description of adjusting items.) FINANCIAL
HIGHLIGHTS Revenue: Revenue for the second quarter was $791
million, 21% below the prior-year quarter. Excluding the negative
impact of foreign exchange, revenue would have been down 17%. Lower
volume across all business segments impacted revenue, with offsets
from improved price and mix over the year-ago quarter. Gross
Profit: Gross profit for the second quarter was $229 million, down
18% from $278 million in the year-ago quarter. Gross margin was
29.0% compared to 27.8% in the year-ago quarter, up 120 basis
points. Second quarter 2009 gross margin includes a net positive
warranty adjustment of $10 million compared to a positive
adjustment of $4 million in the prior-year quarter. Gross margin
also benefited from improvements in product price, mix, and
manufacturing rationalization. Income from Continuing Operations:
Adjusted income from continuing operations in the second quarter
was $38.0 million, or $0.67 diluted earnings per share, compared to
adjusted income of $59.4 million, or $1.02 diluted earnings per
share in the second quarter of 2008. Adjusted income from
continuing operations for the second quarter of 2009 excludes a
$3.4 million after-tax charge from previously announced
restructuring activities and a $1.3 million after-tax gain from the
net change in unrealized gains on open futures contracts and other
items, net. On a GAAP basis, income from continuing operations for
the second quarter of 2009 was $35.9 million, or $0.63 diluted
earnings per share, compared to income of $51.4 million, or $0.89
diluted earnings per share in the prior-year quarter. In
discontinued operations, the company took an after-tax charge of
$4.2 million, or $0.07 per share, related to a legal judgment
involving a Service Experts service center that had been sold in
2004. Free Cash Flow and Total Debt: Net cash provided by
operations in the second quarter was $66 million compared to $56
million in the prior-year quarter. The company invested
approximately $11 million in capital assets resulting in free cash
flow of $55 million for the quarter, compared to $44 million in the
year-ago quarter. Total debt at the end of June 2009 was $320
million after the company paid down $85 million in the quarter.
Total cash, cash equivalents and short-term investments were $99
million. BUSINESS SEGMENT HIGHLIGHTS Residential Heating &
Cooling Second quarter 2009 revenue from the Residential Heating
& Cooling business segment was $379 million, a decrease of 16%
from $451 million in the year-ago quarter. Excluding the negative
effect of foreign exchange, revenue would have been down 14%.
Segment profit was $39 million and segment profit margin was 10.4%,
compared to segment profit of $50 million and segment profit margin
of 11.1% a year ago. Results were impacted by lower volume, with
offsets from favorable product pricing and mix, warranty
adjustments, and overall cost reductions. Commercial Heating &
Cooling Revenue in the Commercial Heating & Cooling business
segment was $163 million, down 29% from $229 million in the
year-ago quarter. Excluding the negative effect of foreign
exchange, revenue would have been down 24%. Total segment profit
was $19 million and segment profit margin was 11.9%, compared to
segment profit of $27 million and segment profit margin of 11.6% in
the year-ago quarter. Results were impacted by lower volume, with
offsets from favorable product pricing and mix, warranty
adjustments, and overall cost reductions. Service Experts Revenue
in the Service Experts business segment was $154 million in the
second quarter, down 14% from $180 million in the year-ago quarter.
Excluding the negative impact of foreign exchange, revenue would
have been down 12%. Segment profit was $9 million and segment
profit margin was 5.7%, compared to segment profit of $14 million
and segment profit margin of 8.0% in the year-ago quarter. Results
were impacted by lower volume, with offsets from overall cost
reduction initiatives, lower fuel costs, and a favorable business
mix compared to a year ago. Refrigeration Revenue in the
Refrigeration business segment was $122 million in the second
quarter, down 28% from $169 million in the prior-year quarter.
Excluding the negative impact of foreign exchange, revenue would
have been down 19%. Segment profit was $10 million and segment
profit margin was 7.9%, compared to segment profit of $17 million
and segment profit margin of 10.3% in the second quarter a year
ago. Results were impacted by lower volume, with offsets from
overall cost reductions and favorable pricing versus a year ago.
FULL-YEAR OUTLOOK The company is narrowing its revenue and adjusted
EPS from continuing operations guidance for 2009 to the low end of
its previous guidance ranges. -- The revenue guidance range for
2009 is narrowed from down 15-19% to down 17-19%, including a
negative 3 point impact from foreign exchange. -- Adjusted EPS from
continuing operations guidance for 2009 is narrowed to $1.65-$1.80,
the low end of the previous range of $1.65-$2.05. -- GAAP EPS from
continuing operations guidance for 2009 is now a range of
$1.38-$1.53 versus the previous target of $1.38-$1.78, reflecting
the narrower adjusted EPS guidance range. -- Corporate expense
guidance remains approximately $60 million for 2009. -- Capital
spending guidance remains approximately $75 million for 2009.
CONFERENCE CALL INFORMATION A conference call to discuss the
company's second quarter results will be held this morning at 9:30
a.m. (Central). To listen, please call the conference call line at
612-332-0637 at least 10 minutes prior to the scheduled start time
and use reservation number 103908. This conference call will also
be webcast on Lennox International's web site at
http://www.lennoxinternational.com/. A replay will be available
from 12:00 p.m. (Central) on July 22 through July 29 by dialing
800-475-6701 (US) or 320-365-3844 (International) and using access
code 103908. This call will also be archived on the company's web
site. Through its subsidiaries, Lennox International Inc. is a
global leader in the heating, air conditioning, and refrigeration
markets. Lennox International stock is traded on the New York Stock
Exchange under the symbol "LII." Additional information is
available at: http://www.lennoxinternational.com/ or by contacting
Steve Harrison, Vice President, Investor Relations, at
972-497-6670. The statements in this news release that are not
historical statements, including statements regarding expected
financial results for 2009, are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements are subject to numerous risks and
uncertainties, many of which are beyond LII's control, which could
cause actual results to differ materially from the results
expressed or implied by the statements. These risks and
uncertainties include, but are not limited to: the impact of higher
raw material prices, LII's ability to implement price increases for
its products and services, and the impact of unfavorable weather,
and a decline in new construction activity in the demand for
products and services that could cause actual results to differ
materially from such statements. 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. LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in millions,
except per share data) For the For the Year-to- Quarters Date
Period Ended June 30, Ended June 30, --------------
---------------- 2009 2008 2009 2008 ---- ---- ---- ---- NET SALES
$790.5 $999.6 $1,375.9 $1,764.1 COST OF GOODS SOLD 561.6 721.5
1,008.2 1,292.3 ----- ----- ------- ------- Gross profit 228.9
278.1 367.7 471.8 OPERATING EXPENSES: Selling, general and
administrative expenses 165.8 187.2 322.8 371.1 Losses (gains) and
other expenses, net 0.7 (4.6) (0.1) (7.9) Restructuring charges 4.7
7.7 15.9 10.5 Impairment of equity method investment - 2.3 - 2.3
Income from equity method investments (1.8) (2.9) (3.2) (6.0) ----
---- ---- ---- Operational income from continuing operations 59.5
88.4 32.3 101.8 INTEREST EXPENSE, net 1.9 3.8 3.6 6.5 OTHER
EXPENSE, net 0.1 0.1 0.1 0.1 --- --- --- --- Income from continuing
operations before income taxes 57.5 84.5 28.6 95.2 PROVISION FOR
INCOME TAXES 21.6 33.1 10.9 37.0 ---- ---- ---- ---- Income from
continuing operations $35.9 $51.4 $17.7 $58.2 DISCONTINUED
OPERATIONS: Loss from discontinued operations 6.8 0.3 6.6 1.1
Income tax benefit (2.6) (0.1) (2.5) (0.4) ---- ---- ---- ---- Loss
from discontinued operations 4.2 0.2 4.1 0.7 --- --- --- --- Net
income $31.7 $51.2 $13.6 $57.5 ===== ===== ===== ===== EARNINGS PER
SHARE - BASIC: Income from continuing operations $0.65 $0.92 $0.32
$1.00 Loss from discontinued operations (0.08) (0.01) (0.07) (0.01)
----- ----- ----- ----- Net income $0.57 $0.91 $0.25 $0.99 =====
===== ===== ===== EARNINGS PER SHARE - DILUTED: Income from
continuing operations $0.63 $0.89 $0.32 $0.97 Loss from
discontinued operations (0.07) (0.01) (0.08) (0.02) ----- -----
----- ----- Net income $0.56 $0.88 $0.24 $0.95 ===== ===== =====
===== AVERAGE SHARES OUTSTANDING: Basic 55.4 56.2 55.3 58.2 Diluted
56.6 58.0 55.9 60.2 CASH DIVIDENDS DECLARED PER SHARE $0.14 $0.14
$0.28 $0.28 LENNOX INTERNATIONAL INC. AND SUBSIDIARIES SEGMENT NET
SALES AND PROFIT (Unaudited, in millions) For the For the Year-to-
Quarters Date Period Ended Ended June 30, June 30, --------------
------------------ 2009 2008 2009 2008 ---- ---- ---- ---- Net
Sales Residential Heating & Cooling $379.3 $450.7 $625.6 $779.9
Commercial Heating & Cooling 162.7 229.5 294.2 394.7 Service
Experts 153.7 179.6 262.9 317.1 Refrigeration 122.1 169.1 235.8
323.8 Eliminations (A) (27.3) (29.3) (42.6) (51.4) ----- -----
----- ----- $790.5 $999.6 $1,375.9 $1,764.1 ====== ====== ========
======== Segment Profit (Loss) (B) Residential Heating &
Cooling $39.3 $50.0 $34.5 $63.2 Commercial Heating & Cooling
19.3 26.7 21.3 32.9 Service Experts 8.7 14.3 0.7 7.4 Refrigeration
9.6 17.5 16.1 32.2 Corporate and other (14.7) (8.7) (28.6) (20.9)
Eliminations (A) - (0.5) (0.4) (2.1) --- ---- ---- ---- Subtotal
that includes segment profit and eliminations 62.2 99.3 43.6 112.7
Reconciliation to income from continuing operations before income
taxes: Losses (gains) and other expenses, net of gain on sale of
fixed assets 0.8 (4.4) - (7.8) Restructuring charges 4.7 7.7 15.9
10.5 Impairment of equity method investment - 2.3 - 2.3 Interest
expense, net 1.9 3.8 3.6 6.5 Other expense, net 0.1 0.1 0.1 0.1
Less: Realized (losses) gains on settled derivative contracts (1.3)
0.6 (3.3) 1.1 Less: Foreign currency exchange (losses) gains (1.5)
4.7 (1.3) 4.8 ---- --- ---- --- Income from continuing operations
before income taxes $57.5 $84.5 $28.6 $95.2 ===== ===== ===== =====
(A) Eliminations consist of intercompany sales between business
segments, such as products sold to Service Experts by the
Residential Heating & Cooling segment. (B) The Company defines
segment profit and loss as a segment's income or loss from
continuing operations before income taxes included in the
accompanying Consolidated Statements of Operations: Excluding: -
Gains and/or losses and other expenses, net except for gains and/or
losses on the sale of fixed assets. - Restructuring charges. -
Goodwill and equity method investment impairments. - Interest
expense, net. - Other expense, net. Less amounts included in Losses
(Gains) and Other Expenses, net: - Realized gains and/or losses on
settled derivative contracts. - Foreign currency exchange gains
and/or losses. LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (In millions, except share and per
share data) As of As of June 30, December 31, 2009 2008 ---------
-------- (unaudited) ASSETS CURRENT ASSETS: Cash and cash
equivalents $65.4 $122.1 Short-term investments 33.5 33.4 Accounts
and notes receivable, net 431.4 369.6 Inventories, net 268.5 298.3
Deferred income taxes 27.3 24.2 Other assets 47.7 87.4 ---- ----
Total current assets 873.8 935.0 PROPERTY, PLANT AND EQUIPMENT, net
328.8 329.5 GOODWILL 243.5 232.3 DEFERRED INCOME TAXES 102.4 113.5
OTHER ASSETS, net 51.5 49.2 ---- ---- TOTAL ASSETS $1,600.0
$1,659.5 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES: Short-term debt $7.5 $6.1 Current maturities
of long-term debt 35.3 0.6 Accounts payable 268.2 234.5 Accrued
expenses 308.0 331.1 Income taxes payable - 3.7 --- --- Total
current liabilities 619.0 576.0 LONG-TERM DEBT 276.9 413.7
POSTRETIREMENT BENEFITS, OTHER THAN PENSIONS 12.1 12.5 PENSIONS
111.5 107.7 OTHER LIABILITIES 73.7 91.0 ---- ---- Total liabilities
1,093.2 1,200.9 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 25,000,000 shares authorized, no
shares issued or outstanding - - Common stock, $.01 par value,
200,000,000 shares authorized, 84,705,778 shares and 84,215,904
shares issued for 2009 and 2008, respectively 0.8 0.8 Additional
paid-in capital 813.1 805.6 Retained earnings 536.9 538.8
Accumulated other comprehensive loss (53.5) (98.8) Treasury stock,
at cost, 29,213,699 shares and 29,109,058 shares for 2009 and 2008,
respectively (790.5) (787.8) ------ ------ Total stockholders'
equity 506.8 458.6 ----- ----- TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $1,600.0 $1,659.5 ======== ======== LENNOX INTERNATIONAL
INC. AND SUBSIDIARIES Reconciliation to U.S. GAAP (Generally
Accepted Accounting Principles) Measures (Unaudited, in millions,
except per share and ratio data) Reconciliation of Income From
Continuing Operations to Adjusted Income From Continuing Operations
For the Quarter Ended June 30, 2009
----------------------------------- Net Change in Unrealized Gains
on Open Futures Contracts As and Other Restructuring Reported
Items, Net Charges As Adjusted ---------- --------------
-------------- ---------- NET SALES $790.5 $- $- $790.5 COST OF
GOODS SOLD 561.6 - - 561.6 ----- --- --- ----- Gross Profit 228.9 -
- 228.9 OPERATING EXPENSES: Selling, general and administrative
expenses 165.8 - - 165.8 Losses (gains) and other expenses, net(1)
0.7 2.1 - 2.8 Restructuring charges 4.7 - (4.7) - Income from
equity method investments (1.8) - - (1.8) ---- --- --- ----
Operational income (loss) from continuing operations 59.5 (2.1) 4.7
62.1 INTEREST EXPENSE, net 1.9 - - 1.9 OTHER EXPENSE, net 0.1 - -
0.1 --- --- --- --- Income (loss) from continuing operations before
income taxes 57.5 (2.1) 4.7 60.1 PROVISION FOR (BENEFIT FROM)
INCOME TAXES 21.6 (0.8) 1.3 22.1 ---- ---- --- ---- Income (loss)
from continuing operations $35.9 $(1.3) $3.4 $38.0 ===== ===== ====
===== EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS -
DILUTED $0.63 $(0.02) $0.06 $0.67 ===== ====== ===== ===== Note:
Management uses adjusted income from continuing operations, which
is not defined by U.S. GAAP, to measure the Company's operating
performance and to analyze period-over-period changes in operating
income with and without the effects of certain losses (gains) and
other expenses, net, impairment of equity method investment and
restructuring charges. Management believes that excluding these
effects is helpful in assessing the overall performance of the
Company. (1) Losses (gains) and other expenses, net include the
following: For the Quarter Ended June 30, 2009
------------------------------------- Pre-tax Tax (Benefit)
After-tax Loss (Gain) Provision Loss (Gain) -------------
----------- ------------- Realized losses on settled futures
contracts $1.3 $(0.5) $0.8 Net change in unrealized gains on open
futures contracts (2.5) 0.8 (1.7) Foreign currency exchange loss
1.5 (0.7) 0.8 Discount fee on accounts sold 0.1 - 0.1 Gain on
disposal of fixed assets (0.1) - (0.1) Other items, net 0.4 - 0.4
--- --- --- Losses (gains) and other expenses, net $0.7 $(0.4) $0.3
==== ===== ==== For the Quarter Ended June 30, 2008
----------------------------------- Net Change in Unrealized Losses
on Open Futures Contracts Impairment and Other of Equity As Items,
Restructuring Method As Reported Net Charges Investment Adjusted
---------- ------ ----------- ---------- ---------- NET SALES
$999.6 $- $- $- $999.6 COST OF GOODS SOLD 721.5 - - - 721.5 -----
--- --- --- ----- Gross Profit 278.1 - - - 278.1 OPERATING
EXPENSES: Selling, general and administrative expenses 187.2 - - -
187.2 (Gains) losses and other expenses, net(2) (4.6) (0.9) - -
(5.5) Restructuring charges 7.7 - (7.7) - - Impairment of equity
method investment 2.3 - - (2.3) - Income from equity method
investments (2.9) - - - (2.9) ---- --- --- --- ---- Operational
income from continuing operations 88.4 0.9 7.7 2.3 99.3 INTEREST
EXPENSE, net 3.8 - - - 3.8 OTHER EXPENSE, net 0.1 - - - 0.1 --- ---
--- --- --- Income from continuing operations before income taxes
84.5 0.9 7.7 2.3 95.4 PROVISION FOR INCOME TAXES 33.1 0.3 2.6 -
36.0 ---- --- --- --- ---- Income from continuing operations $51.4
$0.6 $5.1 $2.3 $59.4 ===== ==== ==== ==== ===== EARNINGS PER SHARE
FROM CONTINUING OPERATIONS - DILUTED $0.89 $0.01 $0.08 $0.04 $1.02
===== ===== ===== ===== ===== (2) (Gains) losses and other
expenses, net include the following: For the Quarter Ended June 30,
2008 ----------------------------------- Tax Pre-tax Provision
After-tax (Gain) Loss (Benefit) (Gain) Loss -------------
----------- ------------- Realized gains on settled futures
contracts $(0.6) $0.2 $(0.4) Net change in unrealized losses on
open futures contracts 0.4 (0.2) 0.2 Foreign currency exchange gain
(4.7) 0.3 (4.4) Gain on disposal of fixed assets (0.2) 0.1 (0.1)
Other items, net 0.5 (0.1) 0.4 --- ---- --- (Gains) losses and
other expenses, net $(4.6) $0.3 $(4.3) ===== ==== ===== For the
Year-to-Date Period Ended June 30, 2009
------------------------------------------------- Net Change in
Unrealized Gains on Open Futures Contracts and Other As Items,
Restructuring As Reported Net Charges Adjusted -------- ---------
------------ -------- NET SALES $1,375.9 $- $- $1,375.9 COST OF
GOODS SOLD 1,008.2 - - 1,008.2 ------- --- --- ------- Gross Profit
367.7 - - 367.7 OPERATING EXPENSES: Selling, general and
administrative expenses 322.8 - - 322.8 (Gains) losses and other
expenses, net(3) (0.1) 4.8 - 4.7 Restructuring charges 15.9 -
(15.9) - Income from equity method investments (3.2) - - (3.2) ----
--- --- ---- Operational income (loss) from continuing operations
32.3 (4.8) 15.9 43.4 INTEREST EXPENSE, net 3.6 - - 3.6 OTHER
EXPENSE, net 0.1 - - 0.1 --- --- --- --- Income (loss) from
continuing operations before income taxes 28.6 (4.8) 15.9 39.7
PROVISION FOR (BENEFIT FROM) INCOME TAXES 10.9 (1.7) 5.0 14.2 ----
---- --- ---- Income (loss) from continuing operations $17.7 $(3.1)
$10.9 $25.5 ===== ===== ===== ===== EARNINGS (LOSS) PER SHARE FROM
CONTINUING OPERATIONS - DILUTED $0.32 $(0.05) $0.19 $0.46 =====
====== ===== ===== (3) (Gains) losses and other expenses, net
include the following: For the Year-to-Date Period Ended June 30,
2009 --------------- Pre-tax Tax (Benefit) After-tax Loss (Gain)
Provision Loss (Gain) ------------- ----------- -------------
Realized losses on settled futures contracts $3.3 $(1.2) $2.1 Net
change in unrealized gains on open futures contracts (5.2) 1.8
(3.4) Foreign currency exchange loss 1.3 (0.6) 0.7 Discount fee on
accounts sold 0.2 (0.1) 0.1 Gain on disposal of fixed assets (0.1)
- (0.1) Other items, net 0.4 (0.1) 0.3 --- ---- --- (Gains) losses
and other expenses, net $(0.1) $(0.2) $(0.3) ===== ===== ===== For
the Year-to-Date Period Ended June 30, 2008
----------------------------------------------- Net Change in
Unrealized Gains on Open Futures Contracts Impairment and Other of
Equity As Items, Restructuring Method As Reported Net Charges
Investment Adjusted -------- ------- --------- -----------
--------- NET SALES $1,764.1 $- $- $- $1,764.1 COST OF GOODS SOLD
1,292.3 - - - 1,292.3 ------- --- --- --- ------- Gross Profit
471.8 - - - 471.8 OPERATING EXPENSES: Selling, general and
administrative expenses 371.1 - - - 371.1 (Gains) losses and other
expenses, net(4) (7.9) 1.9 - - (6.0) Restructuring charges 10.5 -
(10.5) - - Impairment of equity method investment 2.3 - - (2.3) -
Income from equity method investments (6.0) - - - (6.0) ---- ---
--- --- ---- Operational income (loss) from continuing operations
101.8 (1.9) 10.5 2.3 112.7 INTEREST EXPENSE, net 6.5 - - - 6.5
OTHER EXPENSE, net 0.1 - - - 0.1 --- --- --- --- --- Income (loss)
from continuing operations before income taxes 95.2 (1.9) 10.5 2.3
106.1 PROVISION FOR (BENEFIT FROM) INCOME TAXES 37.0 (0.7) 3.7 -
40.0 ---- ---- --- --- ---- Income (loss) from continuing
operations $58.2 $(1.2) $6.8 $2.3 $66.1 ===== ===== ==== ==== =====
EARNINGS (LOSS) PER SHARE FROM CONTINUING OPERATIONS - DILUTED
$0.97 $(0.02) $0.11 $0.04 $1.10 ===== ====== ===== ===== ===== (4)
(Gains) losses and other expenses, net include the following: For
the Year-to-Date Period Ended June 30, 2008
---------------------------------- Tax Pre-tax Provision After-tax
(Gain) Loss (Benefit) (Gain) Loss ------------- -----------
------------- Realized gains on settled futures contracts $(1.0)
$0.4 $(0.6) Net change in unrealized gains on open futures
contracts (2.3) 0.8 (1.5) Foreign currency exchange gain (4.8) 0.3
(4.5) Gain on disposal of fixed assets (0.2) 0.1 (0.1) Other items,
net 0.4 (0.1) 0.3 --- ---- --- (Gains) losses and other expenses,
net $(7.9) $1.5 $(6.4) ===== ==== ===== Reconciliation of Estimated
Adjusted to GAAP Income per Share from Continuing Operations -
Diluted For the Year Ended December 31, 2009 ESTIMATED -----------
Adjusted income per share from continuing operations - diluted
$1.65 - $1.80 Restructuring charges (0.33) Net change in unrealized
gains on open futures contracts and other items, net 0.06 ---- GAAP
income per share from continuing operations - diluted $1.38 - $1.53
============= Free Cash Flow For the For the For the For the
Quarter Quarter Year-to-Date Year-to-Date Ended Ended Period Ended
Period Ended June 30, June 30, June 30, June 30, 2009 2008 2009
2008 ---- ---- ---- ---- Net cash provided by operating activities
$66.4 $56.2 $82.7 $23.6 Purchase of property, plant and equipment
(11.7) (12.7) (21.6) (22.5) ----- ----- ----- ----- Free cash flow
$54.7 $43.5 $61.1 $1.1 ===== ===== ===== ==== Operational Working
Capital June 30, June 30, 2009 2008 June 30, Trailing June 30,
Trailing 2009 12 Mo. Avg. 2008 12 Mo. Avg. ---- ------------- ----
------------- Accounts and Notes Receivable, Net $431.4 $604.2
Asset Securitization 30.0 - Allowance for Doubtful Accounts 20.9
20.0 ---- ---- Accounts and Notes Receivable, Gross 482.3 $463.1
624.2 $570.9 Inventories 268.5 367.4 Excess of Current Cost Over
Last-in, First-out 75.4 73.0 ---- ---- Inventories as Adjusted
343.9 399.6 440.4 439.7 Accounts Payable (268.2) (283.4) (376.9)
(334.2) ------ ------ ------ ------ Operating Working Capital (a)
558.0 579.3 687.7 676.4 ===== ===== ===== ===== Net Sales, Trailing
Twelve Months (b) 3,093.2 3,093.2 3,673.2 3,673.2 ------- -------
------- ------- Operational Working Capital Ratio (a /b) 18.0%
18.7% 18.7% 18.4% ==== ==== ==== ==== Note: Management uses free
cash flow and operational working capital, which are not defined by
U.S. GAAP, to measure the Company's operating performance. Free
cash flow and operational working capital are also two of several
measures used to determine incentive compensation for certain
employees Debt to Earnings Before Interest, Taxes, Depreciation and
Amortization Expense ("EBITDA") Ratio Trailing Twelve Months to
June 30, 2009 ---- Earnings before interest and taxes ("EBIT") (a)
$195.8 Depreciation and amortization expense ("DA") (b) 53.2 ----
EBITDA (EBIT excluding DA) (a + b) $249.0 ====== Total debt at June
30, 2009 (c) $319.7 ====== Total debt to EBITDA ratio ((c / (a + b)
1.3 === Reconciliation of EBIT to income from continuing operations
before income taxes: EBIT per above (non-GAAP) $195.8 Losses and
other expenses, net of gain on sale of fixed assets 10.8 Impairment
of equity method investment 6.8 Restructuring charges 35.8 Other
expenses, net 0.1 Interest expense, net 10.8 ---- Subtotal 131.5
Less: Realized losses on settled futures contracts (5.3) Less:
Foreign currency exchange losses (2.9) ---- Income from continuing
operations before income taxes (GAAP) $139.7 ======
http://www.newscom.com/cgi-bin/prnh/20020304/DAM053LOGO
http://photoarchive.ap.org/ DATASOURCE: Lennox International Inc.
CONTACT: Steve Harrison, Vice President, Investor Relations of
Lennox International Inc., +1-972-497-6670 Web Site:
http://www.lennoxinternational.com/
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