- Adjusted EPS from continuing operations $0.72, and GAAP EPS from
continuing operations $0.59 - Generated record $118 million in free
cash flow, up 18% - Narrowing 2009 revenue guidance from down
17-19% to down approximately 19% - Narrowing 2009 adjusted EPS from
continuing operations guidance from $1.65-$1.80 to a range of
$1.65-$1.70; GAAP guidance from continuing operations now
$1.31-$1.36 DALLAS, Oct. 21 /PRNewswire-FirstCall/ -- Lennox
International Inc. (NYSE: LII) today reported financial results for
the third quarter of 2009. (Logo:
http://www.newscom.com/cgi-bin/prnh/20020304/DAM053LOGO) Revenue
for the third quarter was $750 million, 22% below the prior-year
quarter. Excluding the negative impact of foreign exchange, revenue
would have been down 20%. Diluted earnings per share from
continuing operations on an adjusted basis, a non-GAAP measure, was
$0.72, compared to $1.10 in the record third quarter a year ago.
Diluted earnings per share from continuing operations on a GAAP
basis was $0.59, compared to $0.96 in the year-ago quarter. "The
company's strong operational execution led to record free cash flow
generation of $118 million in the third quarter, up 18% from a year
ago, and gross margin improved 170 basis points," said Todd
Bluedorn, Chief Executive Officer. "The cost reduction actions we
have taken over the last year are providing significant benefit,
and additional restructuring activities are underway. As expected,
end market conditions continued to be difficult in the third
quarter, and commercial markets were down significantly. While
residential and refrigeration markets were also down from a year
ago, we saw the rate of decline slow in the third quarter. Looking
ahead, we remain focused on further lowering our cost structure and
executing on our strategic initiatives to drive increased earnings
leverage as markets recover." (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 third quarter was $750 million, 22% below
the prior-year quarter. Excluding the negative impact of foreign
exchange, revenue would have been down 20%. Lower volume across all
business segments impacted revenue. Price and mix were flat with
the year-ago quarter. Gross Profit: Gross profit for the third
quarter was $223 million, down 17% from $269 million in the
year-ago quarter. Gross margin was 29.8% compared to 28.1% in the
year-ago quarter, up 170 basis points. Gross margin benefited
primarily from lower component and commodity costs, as well as
savings from manufacturing rationalization. Income from Continuing
Operations: Adjusted income from continuing operations in the third
quarter was $41.1 million, or $0.72 diluted earnings per share,
compared to $62.7 million, or $1.10 diluted earnings per share in
the third quarter of 2008. Adjusted income from continuing
operations for the third quarter of 2009 excludes an $8.2 million
after-tax charge from restructuring activities and a $0.8 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 third quarter of 2009 was $33.7
million, or $0.59 diluted earnings per share, compared to $54.8
million, or $0.96 diluted earnings per share in the prior-year
quarter. New restructuring activity in the third quarter of 2009
includes a significant headcount reduction at the Europe HVAC
manufacturing facility in Mions, France, and the transfer of
Commercial rooftop production to the Longvic, France, facility. The
company expects total charges of approximately $9.7 million,
including $7.5 million taken in the third quarter. In addition, in
Residential, the company is relocating the headquarters and other
operations of its Hearth business in California to Tennessee. The
company expects total restructuring charges of approximately $4.3
million, including $1.2 million taken in the third quarter.
Annualized savings of approximately $6 million are expected upon
completion of both projects in the first half of 2010. In the third
quarter, the company had a loss from discontinued operations of
$2.7 million after-tax ($2.1 million impairment), or $0.05 diluted
earnings per share, as a result of plans to exit the business of
five unprofitable Service Experts centers. Free Cash Flow and Total
Debt: Net cash provided by operations in the third quarter was $131
million compared to $116 million in the prior-year quarter. The
company invested approximately $13 million in capital assets
resulting in free cash flow of $118 million for the quarter,
compared to $100 million in the year-ago quarter. Total debt at the
end of September 2009 was $201 million after the company paid down
$119 million in the quarter. Total cash, cash equivalents and
short-term investments were $102 million. BUSINESS SEGMENT
HIGHLIGHTS Residential Heating & Cooling Third quarter 2009
revenue from the Residential Heating & Cooling business segment
was $347 million, a decrease of 16% from $414 million in the
year-ago quarter. Excluding the negative effect of foreign
exchange, revenue would have been down 15%. Segment profit was $39
million and segment profit margin was 11.2%, compared to segment
profit of $55 million and segment profit margin of 13.4% a year
ago. Results were impacted by lower volume and mix, with offsets
from lower component and commodity costs, and SG&A salaried
headcount savings. Product pricing was flat. Commercial Heating
& Cooling Revenue in the Commercial Heating & Cooling
business segment was $154 million, down 39% from $251 million in
the year-ago quarter. Excluding the negative effect of foreign
exchange, revenue would have been down 36%. Total segment profit
was $17 million and segment profit margin was 11.1%, compared to
segment profit of $40 million and segment profit margin of 16.0% in
the year-ago quarter. Results were impacted by lower volume, with
offsets from favorable product mix, lower component and commodity
costs, and SG&A reductions. Product pricing was flat. Service
Experts Revenue in the Service Experts business segment was $137
million in the third quarter, down 11% from $154 million in the
year-ago quarter. Excluding the negative impact of foreign
exchange, revenue would have been down 9%. Segment profit was $8
million and segment profit margin was 5.7%, compared to segment
profit of $5 million and segment profit margin of 2.9% in the
year-ago quarter. Results were impacted by lower volume, with
offsets from SG&A savings, higher technician productivity, and
lower fuel costs. Refrigeration Revenue in the Refrigeration
business segment was $134 million in the third quarter, down 18%
from $163 million in the prior-year quarter. Excluding the negative
impact of foreign exchange, revenue would have been down 15%.
Segment profit was $17 million and segment profit margin was 12.6%,
compared to segment profit of $17 million and segment profit margin
of 10.3% in the third quarter a year ago. Results were impacted by
lower volume, with offsets from lower component and commodity
costs, lower SG&A expenses, and savings from manufacturing
rationalization. Pricing was favorable compared to the third
quarter a year ago. FULL-YEAR OUTLOOK The company is narrowing its
2009 guidance for revenue and adjusted EPS from continuing
operations. -- Narrowing 2009 revenue guidance from down 17-19% to
down approximately 19%, including a negative 2 point impact from
foreign exchange. -- Narrowing 2009 adjusted EPS from continuing
operations guidance from $1.65-$1.80 to a range of $1.65-$1.70. --
Updating 2009 GAAP EPS from continuing operations guidance from
$1.38-$1.53 to a range of $1.31-$1.36, reflecting the narrower
adjusted EPS guidance range and additional restructuring charges.
-- Reiterating corporate expense guidance of approximately $60
million for 2009. -- Lowering 2009 capital spending guidance from
approximately $75 million to $65 million. CONFERENCE CALL
INFORMATION A conference call to discuss the company's third
quarter results will be held this morning at 9:30 a.m. Central
time. To listen, please call the conference call line at
651-291-5254 at least 10 minutes prior to the scheduled start time
and use reservation number 117174. 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 time on October 21 through October 28,
2009, by dialing 800-475-6701 (U.S.) or 320-365-3844
(international) and using access code 117174. 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, 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 Quarters Nine
Months Ended Ended September 30, September 30, ------------
------------ 2009 2008 2009 2008 ---- ---- ---- ---- NET SALES
$749.5 $959.9 $2,114.0 $2,702.8 COST OF GOODS SOLD 526.4 690.6
1,525.7 1,967.7 ----- ----- ------- ------- Gross profit 223.1
269.3 588.3 735.1 OPERATING EXPENSES: Selling, general and
administrative expenses 158.4 168.6 477.8 535.0 (Gains) losses and
other expenses, net (2.1) 3.2 (2.3) (4.8) Restructuring charges
11.5 8.4 27.4 18.9 Impairment of equity method investment - - - 2.3
Income from equity method investments (2.4) (2.0) (5.6) (8.0) ----
---- ---- ---- Operational income from continuing operations 57.7
91.1 91.0 191.7 INTEREST EXPENSE, net 2.2 3.9 6.1 10.7 OTHER
EXPENSE, net 0.1 0.1 0.2 0.2 --- --- --- --- Income from continuing
operations before income taxes 55.4 87.1 84.7 180.8 PROVISION FOR
INCOME TAXES 21.7 32.3 32.8 68.9 ---- ---- ---- ---- Income from
continuing operations $33.7 $54.8 $51.9 $111.9 DISCONTINUED
OPERATIONS: Loss (income) from discontinued operations 2.9 (0.1)
10.2 (0.5) Income tax benefit (0.2) - (3.0) - ---- --- ---- ---
Loss (income) from discontinued operations 2.7 (0.1) 7.2 (0.5) ---
---- --- ---- Net income $31.0 $54.9 $44.7 $112.4 ===== ===== =====
====== EARNINGS PER SHARE - BASIC: Income from continuing
operations $0.60 $0.99 $0.94 $1.96 Loss from discontinued
operations (0.05) - (0.13) - ----- ---- ----- --- Net income $0.55
$0.99 $0.81 $1.96 ===== ===== ===== ===== EARNINGS PER SHARE -
DILUTED: Income from continuing operations $0.59 $0.96 $0.92 $1.89
(Loss) income from discontinued operations (0.05) - (0.13) 0.01
----- --- ----- ---- Net income $0.54 $0.96 $0.79 $1.90 ===== =====
===== ===== AVERAGE SHARES OUTSTANDING: Basic 55.8 55.3 55.5 57.2
Diluted 57.1 57.0 56.3 59.1 CASH DIVIDENDS DECLARED PER SHARE $0.14
$0.14 $0.42 $0.42 LENNOX INTERNATIONAL INC. AND SUBSIDIARIES
SEGMENT NET SALES AND PROFIT (Unaudited, in millions) For the For
the Quarters Nine Months Ended Ended September 30, September 30,
------------ ------------ 2009 2008 2009 2008 ---- ---- ---- ----
Net Sales Residential Heating & Cooling $347.1 $414.0 $972.7
$1,193.9 Commercial Heating & Cooling 154.4 251.4 448.6 646.1
Service Experts 137.3 154.0 389.0 449.9 Refrigeration 133.6 162.9
369.4 486.8 Eliminations (A) (22.9) (22.4) (65.7) (73.9) -----
----- ----- ----- $749.5 $959.9 $2,114.0 $2,702.8 ====== ======
======== ======== Segment Profit (Loss) (B) Residential Heating
& Cooling $39.0 $55.3 $73.5 $118.5 Commercial Heating &
Cooling 17.1 40.3 38.4 73.2 Service Experts 7.9 4.5 9.6 10.6
Refrigeration 16.8 16.7 32.9 48.9 Corporate and other (13.4) (16.3)
(42.0) (37.2) Eliminations (A) 0.2 1.6 (0.2) (0.4) --- --- ----
---- Subtotal that includes segment profit and eliminations 67.6
102.1 112.2 213.6 Reconciliation to income from continuing
operations before income taxes: (Gains) losses and other expenses,
net of gain on sale of fixed assets (1.6) 3.1 (1.7) (4.6)
Restructuring charges 11.5 8.4 27.4 18.9 Impairment of equity
method investment - - - 2.3 Interest expense, net 2.2 3.9 6.1 10.7
Other expense, net 0.1 0.1 0.2 0.2 Less: Realized (losses) gains on
settled derivative contracts (0.4) - (3.6) 1.0 Less: Foreign
currency exchange gains (losses) 0.4 (0.5) (0.9) 4.3 --- ---- ----
--- Income from continuing operations before income taxes $55.4
$87.1 $84.7 $180.8 ===== ===== ===== ====== (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 (Gains) Losses 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 September 30, December
31, 2009 2008 --------- -------- (unaudited) ASSETS CURRENT ASSETS:
Cash and cash equivalents $101.9 $122.1 Short-term investments -
33.4 Accounts and notes receivable, net 387.3 363.4 Inventories,
net 274.6 297.3 Deferred income taxes 9.5 24.2 Other assets 51.9
94.8 ---- ---- Total current assets 825.2 935.2 PROPERTY, PLANT AND
EQUIPMENT, net 329.9 329.4 GOODWILL 253.1 232.3 DEFERRED INCOME
TAXES 104.9 113.5 OTHER ASSETS, net 49.5 49.1 ---- ---- TOTAL
ASSETS $1,562.6 $1,659.5 ======== ======== LIABILITIES AND
STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Short-term debt $5.6 $6.1
Current maturities of long-term debt 35.6 0.6 Accounts payable
279.7 234.1 Accrued expenses 315.4 331.5 Income taxes payable - 3.7
--- --- Total current liabilities 636.3 576.0 LONG-TERM DEBT 159.9
413.7 POSTRETIREMENT BENEFITS, OTHER THAN PENSIONS 11.9 12.5
PENSIONS 101.7 107.7 OTHER LIABILITIES 75.3 91.0 ---- ---- Total
liabilities 985.1 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, 85,193,639
shares and 84,215,904 shares issued for 2009 and 2008, respectively
0.9 0.8 Additional paid-in capital 831.9 805.6 Retained earnings
560.1 538.8 Accumulated other comprehensive loss (24.5) (98.8)
Treasury stock, at cost, 29,223,965 shares and 29,109,058 shares
for 2009 and 2008, respectively (790.9) (787.8) ------ ------ Total
stockholders' equity 577.5 458.6 ----- ----- TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,562.6 $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 September 30, 2009
---------------------------------------- Net Change in Unrealized
Gains on Open Futures Contracts As and Other Restructuring As
Reported Items, Net Charges Adjusted --------- ----------
-------------- -------- NET SALES $749.5 $- $- $749.5 COST OF GOODS
SOLD 526.4 - - 526.4 ----- --- --- ----- Gross Profit 223.1 - -
223.1 OPERATING EXPENSES: Selling, general and administrative
expenses 158.4 - - 158.4 (Gains) losses and other expenses, net(1)
(2.1) 1.4 - (0.7) Restructuring charges 11.5 - (11.5) - Income from
equity method investments (2.4) - - (2.4) ---- --- --- ----
Operational income (loss) from continuing operations 57.7 (1.4)
11.5 67.8 INTEREST EXPENSE, net 2.2 - - 2.2 OTHER EXPENSE, net 0.1
- - 0.1 --- --- --- --- Income (loss) from continuing operations
before income taxes 55.4 (1.4) 11.5 65.5 PROVISION FOR (BENEFIT
FROM) INCOME TAXES 21.7 (0.6) 3.3 24.4 ---- ---- --- ---- Income
(loss) from continuing operations $33.7 $(0.8) $8.2 $41.1 =====
===== ==== ===== EARNINGS (LOSS) PER SHARE FROM CONTINUING
OPERATIONS - DILUTED $0.59 $(0.01) $0.14 $0.72 ===== ====== =====
===== 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
(gains) losses 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) (Gains) losses and other expenses,
net include the following: For the Quarter Ended September 30, 2009
---------------------------------------- Pre-tax Tax After-tax Loss
(Benefit) Loss (Gain) Provision (Gain) ------- --------- ---------
Realized losses on settled futures contracts $0.4 $(0.2) $0.2 Net
change in unrealized gains on open futures contracts (1.2) 0.5
(0.7) Foreign currency exchange gain (0.4) 0.1 (0.3) Discount fee
on accounts sold 0.1 - 0.1 Gain on disposal of fixed assets (0.5)
0.2 (0.3) Realized gain on marketable securities (0.3) 0.1 (0.2)
Other items, net (0.2) 0.1 (0.1) ---- --- ---- (Gains) losses and
other expenses, net $(2.1) $0.8 $(1.3) ===== ==== ===== For the
Quarter Ended September 30, 2008
---------------------------------------- Net Change in Unrealized
Losses on Open Futures Contracts As and Other Restructuring As
Reported Items, Net Charges Adjusted ----------- -----------
-------------- -------- NET SALES $959.9 $- $- $959.9 COST OF GOODS
SOLD 690.6 - - 690.6 ----- --- --- ----- Gross Profit 269.3 - -
269.3 OPERATING EXPENSES: Selling, general and administrative
expenses 168.6 - - 168.6 Losses (gains) and other expenses, net(2)
3.2 (2.7) - 0.5 Restructuring charges 8.4 - (8.4) - Impairment of
equity method investment - - - - Income from equity method
investments (2.0) - - (2.0) ---- --- --- ---- Operational income
from continuing operations 91.1 2.7 8.4 102.2 INTEREST EXPENSE, net
3.9 - - 3.9 OTHER EXPENSE, net 0.1 - - 0.1 --- --- --- --- Income
from continuing operations before income taxes 87.1 2.7 8.4 98.2
PROVISION FOR INCOME TAXES 32.3 1.0 2.2 35.5 ---- --- --- ----
Income from continuing operations $54.8 $1.7 $6.2 $62.7 ===== ====
==== ===== EARNINGS PER SHARE FROM CONTINUING OPERATIONS - DILUTED
$0.96 $0.03 $0.11 $1.10 ===== ===== ===== ===== (2) Losses (gains)
and other expenses, net include the following: For the Quarter
Ended September 30, 2008 ----------------------------------------
Tax Pre-tax (Benefit) After-tax Loss (Gain) Provision Loss (Gain)
---------- --------- ---------- Net change in unrealized losses on
open futures contracts $2.8 $(1.0) $1.8 Foreign currency exchange
loss 0.5 (0.3) 0.2 Other items, net (0.1) - (0.1) ---- --- ----
Losses (gains) and other expenses, net $3.2 $(1.3) $1.9 ==== =====
==== For the Year-to-Date Period Ended September 30, 2009
---------------------------------------------------- Net Change in
Unrealized Gains on Open Futures Contracts As and Other
Restructuring As Reported Items, Net Charges Adjusted ----------
----------- ------------- --------- NET SALES $2,114.0 $- $-
$2,114.0 COST OF GOODS SOLD 1,525.7 - - 1,525.7 ------- --- ---
------- Gross Profit 588.3 - - 588.3 OPERATING EXPENSES: Selling,
general and administrative expenses 477.8 - - 477.8 (Gains) losses
and other expenses, net(3) (2.3) 6.2 - 3.9 Restructuring charges
27.4 - (27.4) - Income from equity method investments (5.6) - -
(5.6) ---- --- --- ---- Operational income (loss) from continuing
operations 91.0 (6.2) 27.4 112.2 INTEREST EXPENSE, net 6.1 - - 6.1
OTHER EXPENSE, net 0.2 - - 0.2 --- --- --- --- Income (loss) from
continuing operations before income taxes 84.7 (6.2) 27.4 105.9
PROVISION FOR (BENEFIT FROM) INCOME TAXES 32.8 (2.3) 8.3 38.8 ----
---- --- ---- Income (loss) from continuing operations $51.9 $(3.9)
$19.1 $67.1 ===== ===== ===== ===== EARNINGS (LOSS) PER SHARE FROM
CONTINUING OPERATIONS - DILUTED $0.92 $(0.07) $0.34 $1.19 =====
====== ===== ===== (3) (Gains) losses and other expenses, net
include the following: For the Year-to-Date Period Ended September
30, 2009 --------------------------------- Pre-tax Tax (Benefit)
After-tax Loss (Gain) Provision Loss (Gain) ---------- ------------
---------- Realized losses on settled futures contracts $3.6 $(1.3)
$2.3 Net change in unrealized gains on open futures contracts (6.4)
2.3 (4.1) Foreign currency exchange loss 0.9 (0.5) 0.4 Discount fee
on accounts sold 0.3 (0.1) 0.2 Gain on disposal of fixed assets
(0.6) 0.2 (0.4) Realized gain on marketable securities (0.3) 0.1
(0.2) Other items, net 0.2 - 0.2 --- --- --- (Gains) losses and
other expenses, net $(2.3) $0.7 $(1.6) ===== ==== ===== For the
Year-to-Date Period Ended September 30, 2008
---------------------------------------------------- Net Change in
Unrealized Losses on Open Futures Contracts Impairment and of Other
Equity As Items, Restructuring Method As Reported Net Charges
Investment Adjusted -------- --- ------------ ---------- --------
NET SALES $2,702.8 $- $- $- $2,702.8 COST OF GOODS SOLD 1,967.7 - -
- 1,967.7 ------- --- --- --- ------- Gross Profit 735.1 - - -
735.1 OPERATING EXPENSES: Selling, general and administrative
expenses 535.0 - - - 535.0 (Gains) losses and other expenses,
net(4) (4.8) (0.7) - - (5.5) Restructuring charges 18.9 - (18.9) -
- Impairment of equity method investment 2.3 - - (2.3) - Income
from equity method investments (8.0) - - - (8.0) ---- --- --- ---
---- Operational income from continuing operations 191.7 0.7 18.9
2.3 213.6 INTEREST EXPENSE, net 10.7 - - - 10.7 OTHER EXPENSE, net
0.2 - - - 0.2 --- --- --- --- --- Income from continuing operations
before income taxes 180.8 0.7 18.9 2.3 202.7 PROVISION FOR INCOME
TAXES 68.9 0.2 5.9 - 75.0 ---- --- --- --- ---- Income from
continuing operations $111.9 $0.5 $13.0 $2.3 $127.7 ====== ====
===== ==== ====== EARNINGS PER SHARE FROM CONTINUING OPERATIONS -
DILUTED $1.89 $0.01 $0.22 $0.04 $2.16 ===== ===== ===== ===== =====
(4) (Gains) losses and other expenses, net include the following:
For the Year-to-Date Period Ended September 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 0.4 (0.1) 0.3
Foreign currency exchange gain (4.3) - (4.3) Gain on disposal of
fixed assets (0.2) 0.1 (0.1) Other items, net 0.3 (0.1) 0.2 ---
---- --- (Gains) losses and other expenses, net $(4.8) $0.3 $(4.5)
===== ==== ===== 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 - $1.70
Restructuring charges (0.41) Net change in unrealized gains on open
futures contracts and other items, net 0.07 ---- GAAP income per
share from continuing operations - diluted $1.31 - $1.36
=============== Free Cash Flow For the For the For the For the
Year-to-Date Year-to-Date Quarter Quarter Period Period Ended Ended
Ended Ended September 30, September 30, September 30, September 30,
2009 2008 2009 2008 ----------- ------------ ------------
------------ Net cash provided by operating activities $130.6
$116.2 $213.3 $139.8 Purchase of property, plant and equipment
(12.3) (15.8) (33.9) (38.3) ----- ----- ----- ----- Free cash flow
$118.3 $100.4 $179.4 $101.5 ====== ====== ====== ====== Operational
Working Capital September 30, September 30, 2009 2008 September 30,
Trailing September 30, Trailing 2009 12 Mo. Avg. 2008 12 Mo. Avg.
------------- ---------- ------------ ---------- Accounts and Notes
Receivable, Net $387.3 $542.7 Asset Securitization 30.0 - Allowance
for Doubtful Accounts 20.4 18.5 ---- ---- Accounts and Notes
Receivable, Gross 437.7 $422.0 561.2 $546.6 Inventories 274.6 351.3
Excess of Current Cost Over Last-in, First-out 72.5 73.8 ---- ----
Inventories as Adjusted 347.1 375.8 425.1 435.9 Accounts Payable
(279.7) (258.3) (347.0) (334.0) ------ ------ ------ ------
Operating Working Capital (a) 505.1 539.5 639.3 648.5 ===== =====
===== ===== Net Sales, Trailing Twelve Months (b) 2,852.3 2,852.3
3,572.7 3,572.7 ------- ------- ------- ------- Operational Working
Capital Ratio (a/b) 17.7% 18.9% 17.9% 18.2% ==== ==== ==== ====
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 September 30, 2009
------------ Earnings before interest and taxes ("EBIT") (a) $161.9
Depreciation and amortization expense ("DA") (b) 51.4 ---- EBITDA
(EBIT excluding DA) (a + b) $213.3 ====== Total debt at September
30, 2009 (c) $201.1 ====== Total debt to EBITDA ratio ((c / (a +
b)) 0.9 === Reconciliation of EBIT to income from continuing
operations before income taxes: EBIT per above (non-GAAP) $161.9
Losses and other expenses, net of gain on sale of fixed assets 5.8
Impairment of equity method investment 6.8 Restructuring charges
38.9 Other expenses, net 0.1 Interest expense, net 9.6 --- Subtotal
100.7 Less: Realized losses on settled futures contracts (5.5)
Less: Foreign currency exchange losses (2.0) ---- Income from
continuing operations before income taxes (GAAP) $108.2 ======
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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