Core Insights - Lennox's Elite Series EL297V Gas Furnace has received the prestigious GOOD DESIGN® Award, highlighting its innovative design and energy efficiency [2][3] - The furnace boasts a 97% AFUE rating, qualifying for ENERGY STAR® certification and the 25C Tax Credit, indicating its high efficiency [4] - The product features advanced technology such as a two-stage gas valve and a variable-speed blower motor, ensuring consistent performance and quiet operation [4][5] Company Overview - Lennox is a leader in energy-efficient climate-control solutions, focusing on sustainability and reducing carbon footprints for residential and commercial customers [6] - The company has a history of design excellence, with previous GOOD DESIGN® Awards for products like the SL25XPV Heat Pump and S40 Smart Thermostat [5]

Sales Performance - In 2024, net sales increased by 7% to $5,341 million compared to $4,982 million in 2023, driven by higher sales volumes and favorable pricing [145]. - The Home Comfort Solutions segment saw an 11% increase in net sales to $3,577.1 million, with segment profit rising by 25% to $759.7 million [155]. - The Building Climate Solutions segment experienced a 17% increase in net sales to $1,764.2 million, with segment profit increasing by 16% to $396.9 million [157]. - The company completed the sale of its European businesses in Q4 2023, which impacted sales by a 5% reduction in 2024 [145]. - Corporate and Other segment net sales decreased by $248 million in 2024, resulting in a total loss of $120.3 million, an increase of 28% compared to 2023 [159]. - Consolidated net sales increased by 6% in 2023 compared to 2022, driven by a favorable mix of 5% and favorable price of 5, partially offset by a 4% unfavorable sales volume [160]. - Home Comfort Solutions segment net sales increased by 1% in 2023, totaling $3,222.9 million, with a profit of $610.2 million, up 2% from 2022 [171]. - Building Climate Solutions segment net sales increased by 18% in 2023, reaching $1,511.4 million, with a profit of $340.8 million, a 109% increase compared to 2022 [173]. - The company reported net sales of $5,265.6 million for the year ended December 31, 2024, an increase from $4,626.8 million in 2023 [204]. Profitability - Gross profit margin improved by 210 basis points to 33.2% in 2024, up from 31.1% in 2023, primarily due to higher pricing and favorable mix [146]. - Operating income rose to $1,034.8 million in 2024, compared to $790.1 million in 2023, reflecting a significant increase in profitability [144]. - Net income for 2024 increased to $806.9 million, up from $590.1 million in 2023, resulting in diluted earnings per share of $22.54 [145]. - Gross profit for the year ended December 31, 2024, was $1,363.8 million, compared to $1,157.8 million in 2023 [204]. - Net income increased to $1,792.5 million in 2024 from $1,331.1 million in 2023 [204]. - Gross profit margins for 2023 increased by 390 basis points to 31.1% compared to 27.2% in 2022, with contributions from favorable pricing and lower commodity costs [160]. Cash Flow and Capital Management - Cash flow from operating activities was $946 million in 2024, an increase from $736 million in 2023, indicating improved operational efficiency [145]. - Net cash provided by operating activities increased by $210 million to $945.7 million in 2024, primarily due to a $217 million increase in net income [179]. - Capital expenditures were $164 million in 2024, down from $250 million in 2023, primarily related to manufacturing capacity expansion [180]. - The company expects capital expenditures of approximately $150 million in 2025 for general capital improvement projects [194]. - The company returned $160 million to shareholders through dividend payments in 2024 [145]. - Dividend payments increased to $160 million in 2024 from $153 million in 2023, with a 4.5% increase in quarterly dividends approved [192]. - The company repurchased $54 million in shares as part of its Share Repurchase Plans in 2024, compared to no repurchases in 2023 [181]. Debt and Financial Position - Total debt as of December 31, 2024, was $1,147.6 million, with $833.1 million classified as long-term debt [182]. - As of December 31, 2024, the company's debt-to-total-capital ratio decreased to 57% from 82% at December 31, 2023 [189]. - The company reported a decrease in net interest expense to $39 million in 2024 from $52 million in 2023, attributed to reduced borrowings [153]. - The company issued $500 million of senior unsecured notes in September 2023, maturing in September 2028, with a 5.50% interest rate [186]. - As of December 31, 2024, the company had cash and cash equivalents of $415 million, including $14 million held in foreign locations [191]. - The company maintained senior credit ratings of Baa2 with a positive outlook and BBB with a stable outlook from Moody's and S&P, respectively [190]. Accounting and Risk Management - The company has no off-balance sheet arrangements that may materially affect its financial condition [205]. - The company periodically reviews assumptions for product warranties and related contingencies, adjusting based on actual failure rates and cost experiences [220]. - Factors affecting actual failure rates include new product introductions, manufacturing changes, and supplier variations [220]. - The company may need to adjust liabilities and record expenses in future periods if actual costs differ from estimates [220]. - Recent accounting pronouncements may impact the company's financial statements and disclosures [221]. - Market risk disclosures are included under the "Market Risk" section in the financial statements [222]. Expenses - Selling, General and Administrative (SG&A) expenses rose by $78 million in 2023, increasing as a percentage of net sales from 13.3% to 14.2% [161].

Core Insights - Lennox and Samsung have formed a joint venture, Samsung Lennox HVAC North America, to deliver ductless heating and cooling solutions, launching the Lennox Powered by Samsung mini-split systems and Varix™ VRF lineup [1][6] Product Offerings - The Lennox Powered by Samsung mini-split systems provide energy-efficient, room-to-room comfort and smart control via the Samsung SmartThings app, featuring low global warming potential refrigerant [2][4] - The Varix™ VRF systems offer flexible, high-performance heating and cooling solutions for commercial spaces, enhancing efficiency and control across multiple zones [3][5] Market Positioning - The launch of these products aims to meet the growing demand for ductless HVAC systems, positioning Lennox service providers to deliver exceptional comfort and energy efficiency [6] - The joint venture plans to expand its product offerings in 2025 with new single-zone heat pump models and low GWP VRF products, providing more choices for Lennox Commercial and Residential HVAC customers [6] Company Background - Lennox is recognized as a leader in energy-efficient climate-control solutions, focusing on sustainability and innovation in heating, cooling, indoor air quality, and refrigeration systems [7] - Samsung Lennox HVAC North America was established in 2024, combining Samsung's innovative HVAC technology with Lennox's expertise as an OEM and direct distribution leader in North America [8]

Core Insights - Lennox International Inc. reported strong Q4 and full-year results, but the guidance provided has led to a nearly 9% drop in share price on the announcement day [1]. Financial Performance - The company achieved impressive results for Q4 and the full year, indicating robust operational performance [1]. Market Reaction - Despite the positive financial results, the market reacted negatively to the company's guidance, resulting in a significant decline in share price [1].

INTEGRITY | RESPECT | EXCELLENCE FOURTH QUARTER 2024 EARNINGS RELEASE JANUARY 29, 2025 FORWARD-LOOKING STATEMENTS & NON-GAAP FINANCIAL MEASURES The statements in this presentation that are not historical statements, including statements regarding the 2024 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 state ...

Core Insights - Lennox International (LII) reported a revenue of $1.35 billion for the quarter ended December 2024, marking a year-over-year increase of 16.5% and exceeding the Zacks Consensus Estimate by 8.71% [1] - The earnings per share (EPS) for the same period was $5.60, a significant increase from $3.63 a year ago, with an EPS surprise of 32.39% over the consensus estimate of $4.23 [1] Financial Performance - Net Sales for Building Climate Solutions reached $457.60 million, surpassing the average estimate of $424.09 million from 14 analysts [4] - Net Sales for Home Comfort Solutions amounted to $887.40 million, exceeding the estimated $806.19 million by analysts [4] - Segment Profit for Corporate and other was reported at -$43.70 million, which was below the average estimate of -$31.94 million [4] - Segment Profit for Building Climate Solutions was $98.80 million, slightly above the estimated $94.07 million [4] - Segment Profit for Home Comfort Solutions was $192.60 million, significantly higher than the average estimate of $140.06 million [4] Stock Performance - Shares of Lennox have returned +8.8% over the past month, outperforming the Zacks S&P 500 composite's +1.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Lennox achieved record revenue exceeding $5 billion for the first time, with adjusted segment profit surpassing $1 billion [5][6] - Adjusted earnings per share reached $5.60 for Q4 and $22.58 for the full year, with core revenue growing 22% in Q4 and 13% for the full year [6][7] - Adjusted segment margin expanded by 250 basis points in Q4 and 150 basis points for the full year, reaching 19.4% [6][15] Business Line Data and Key Metrics Changes - Home Comfort Solutions segment reported 25% revenue growth and 67% segment profit growth, with sales volume increasing by 21% [12][13] - Building Climate Solutions segment experienced 17% revenue growth, with organic sales volume increasing by 14% [14][15] Market Data and Key Metrics Changes - The company noted a significant impact from the pre-purchase of R-410A equipment, estimated to have positively affected revenue by $125 million [12][30] - The transition to low GWP refrigerants is expected to contribute to future revenue growth, with a projected 4% increase from new product introductions [18][19] Company Strategy and Development Direction - The company is transitioning from a recovery and investment phase to a growth acceleration phase, focusing on disciplined investments while prioritizing growth [21][24] - Strategic investments in digital customer experience and expanded product offerings are aimed at capitalizing on growing demand for energy-efficient solutions [22][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term growth, anticipating revenue targets of $5.4 billion to $6 billion by 2026, despite headwinds from the 2024 pre-buy [25][26] - The company is closely monitoring market uncertainties, including interest rates and consumer confidence, which could impact future performance [56][57] Other Important Information - The company reported a free cash flow conversion rate of 97%, with capital expenditures expected to exceed depreciation by approximately $65 million [17][19] - The integration of the AES acquisition is ahead of schedule, contributing positively to the company's strategic M&A pipeline [9][10] Q&A Session Summary Question: Comments on the pre-buy impact and its implications for Q1 - Management acknowledged a $125 million pre-buy impact, which will create a headwind for Q1 revenue [30][31] Question: Flat volume outlook for the Home Comfort Solutions segment - Management cited market uncertainties, including low existing home sales and high mortgage rates, as reasons for a conservative volume outlook [32][34] Question: Guidance on incremental margins and inflation assumptions - Management indicated that inflation is expected to increase costs by approximately 3%, while maintaining a cautious approach to revenue guidance [39][41] Question: Revenue outlook for the Building Climate Solutions segment - Management expressed confidence in the health of the markets served, with expectations for mid-single-digit volume growth [46][48] Question: Insights on the new commercial facility in Mexico - Management indicated that the new facility is expected to contribute to volume growth, particularly in the second half of the year [82][84] Question: Inflationary pressures and their impact on costs - Management noted higher inflation in SG&A costs, particularly in healthcare and wages, while remaining vigilant about potential tariff impacts [91][92] Question: New construction versus replacement demand within Home Comfort Solutions - Management expects new construction to remain flattish, driven primarily by interest rates [108][109] Question: Margin dynamics by segment - Management indicated that margins are expected to be flat overall, with BCS seeing potential expansion in the second half of the year [110][111]

Core Insights - Lennox International (LII) reported quarterly earnings of $5.60 per share, exceeding the Zacks Consensus Estimate of $4.23 per share, and up from $3.63 per share a year ago [1][2] - The company achieved a revenue of $1.35 billion for the quarter, surpassing the Zacks Consensus Estimate by 8.71%, compared to $1.15 billion in the same quarter last year [3] - The stock has gained approximately 8.8% since the beginning of the year, outperforming the S&P 500's gain of 3.2% [4] Earnings Performance - The earnings surprise for the recent quarter was 32.39%, and the company has surpassed consensus EPS estimates in all four quarters over the past year [2] - The current consensus EPS estimate for the upcoming quarter is $3.72, with expected revenues of $1.09 billion, and for the current fiscal year, the estimate is $23.19 on revenues of $5.54 billion [8] Industry Context - Lennox operates within the Zacks Building Products - Air Conditioner and Heating industry, which is currently ranked in the top 23% of over 250 Zacks industries [9] - The industry has shown a strong correlation between near-term stock movements and trends in earnings estimate revisions, indicating potential for future performance [6] Future Outlook - The estimate revisions trend for Lennox is currently mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [7] - The upcoming earnings report from Trane Technologies, a competitor in the same industry, is anticipated to provide further context for the market [10][11]

Exhibit 99.1 Lennox Reports Fourth Quarter and Full Year 2024 Results; Provides Full Year 2025 Guidance ____________________________________________________________________________ Q4 Highlights (All comparisons are year-over-year, unless otherwise noted) (Prior-year adjusted results and core revenue exclude European operations that were divested in the 4Q 2023) 2024 Full Year Highlights (All comparisons are year-over-year, unless otherwise noted) DALLAS, January 29, 2025 – Lennox (NYSE: LII), a leader in e ...

Q4 Highlights(All comparisons are year-over-year, unless otherwise noted)(Prior-year adjusted results and core revenue exclude European operations that were divested in the 4Q 2023) Revenue $1.3 billion – Core revenue up 22%, including 1% growth from acquisitions GAAP diluted EPS $5.52 – Adjusted diluted EPS up 54% to $5.60 Net cash from operations was $332 million – Free cash flow was $273 million, up 50% 2024 Full Year Highlights(All comparisons are year-over-year, unless otherwise noted) Revenue $5.3 ...