Core Viewpoint - Lennox International (NYSE: LII) is well-positioned to navigate the current market environment, benefiting from strong replacement demand in its Home Comfort Solutions (HCS) and Building Climate Solutions (BCS) segments [1] Group 1: Company Performance - The company is expected to benefit from positive price/mix as it implements pricing increases in response to market conditions [1] Group 2: Investment Strategy - The focus is on GARP (Growth at Reasonable Price) opportunities within the industrial, consumer, and technology sectors [1]

Financial Data and Key Metrics Changes - Revenue for the quarter grew by 2% with a segment margin of 14.5%, a decrease of 140 basis points [7][10] - Adjusted earnings per share were $3.37, with full-year adjusted EPS guidance narrowed to a range of $22.25 to $23.50 [8][10] - Operating cash usage was $36 million, typical for the seasonality of the business [7] Business Line Data and Key Metrics Changes - Home Comfort Solutions (HCS) segment saw a 7% increase in sales, driven by a positive mix with approximately 50% of equipment sales being the new R-454B product [20] - Building Climate Solutions (BCS) segment experienced a 6% decline in revenue, with sales volumes down 9% due to expected destocking and delays in customer orders [22][23] Market Data and Key Metrics Changes - Current order rates in both HCS and BCS segments remain healthy, with replacement demand providing a solid foundation [8][16] - Monthly order rates in BCS improved sequentially as destocking ended during the quarter [16] Company Strategy and Development Direction - The company is focused on navigating the current global trade landscape and is positioned to deliver differentiated growth despite uncertainties [11][12] - Investments in supply chain and manufacturing capacity are ongoing, with a focus on dual sourcing key components [14] - The company aims to enhance customer experience through digital initiatives and improve distribution efficiency [25][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to macroeconomic factors affecting both segments, including consumer confidence and mortgage interest rates [15][31] - The company is prepared for potential macroeconomic slowdowns and has implemented pricing adjustments to offset tariff impacts [28][46] Other Important Information - The company is actively pursuing long-term tariff mitigation strategies, including production shifts and leveraging US-based components [12][13] - The transition to new low GWP products is progressing as expected, with inventory levels of R-410A nearly depleted [20] Q&A Session Summary Question: Discussion on commercial order delays - Management acknowledged a slow start due to destocking and transitioning to new products, but order rates have improved sequentially [41][42] Question: Outlook on residential and commercial volume changes - Management indicated that the adjustments were made to prepare for potential slowdowns, although no current slowdown has been observed [44][46] Question: Details on pricing increases - Two price increases were implemented, one to offset tariff impacts and another for volume declines, both in the mid-single-digit range [51][54] Question: Impact of inflation guidance increase - The inflation guidance was raised from 3% to 9%, with a significant portion attributed to costs from China and tariffs on metals [74][76] Question: Building Climate Solutions margins outlook - Management expects short-term inefficiencies to continue but anticipates sequential margin improvements as the year progresses [90][96] Question: Consumer elasticity in repair versus replace decisions - Management believes the risk of homeowner price elasticity on replacement remains low, as the products are considered nondiscretionary [145][148]

Financial Performance - Net sales for the first quarter of 2025 increased by 2% to $1,072.6 million compared to $1,047.1 million in the same period in 2024[91] - Operating income decreased by $11 million to $156 million in the first quarter of 2025, primarily due to higher material costs and lower sales volumes[95] - Gross profit margins decreased by 190 basis points to 30.6% in the first quarter of 2025, impacted by higher product costs and freight costs[93] - Home Comfort Solutions segment net sales increased by 7% to $721.4 million, with segment profit rising by $4.7 million to $116.8 million[100] - Building Climate Solutions segment net sales decreased by 6% to $351.2 million, with segment profit declining by 32% to $53.5 million[103] Cash Flow and Capital Expenditures - Net cash used in operating activities increased to $35.8 million in the first quarter of 2025 from $22.8 million in the same period in 2024[107] - Capital expenditures were $26 million for the first quarter of 2025, down from $30 million in the same period in 2024[108] Debt and Financing - Total debt as of March 31, 2025, was $1,149.4 million, comprising current and long-term debt[110] - The company established a commercial paper program on October 25, 2023, allowing for the issuance of up to $500.0 million in short-term, unsecured notes[111] - As of March 31, 2025, the company had an existing $1.1 billion unsecured revolving credit facility, with $1,098.3 million available for future borrowings[112] - In September 2023, the company issued $500.0 million of senior unsecured notes maturing in September 2028, with an interest rate of 5.50%[113] - The company's debt-to-total-capital ratio remained unchanged at 57% as of March 31, 2025, compared to December 31, 2024[116] - The company had no outstanding borrowings under its commercial paper program as of March 31, 2025[111] - The credit agreement includes a subfacility for swingline loans up to $65.0 million[112] - The company believes it is in compliance with all covenant requirements as of March 31, 2025[115] Tax and Shareholder Returns - The effective tax rate for the first quarter of 2025 was 18.9%, a decrease from 19.4% in the same period in 2024[99] - The company returned $41 million to shareholders through dividend payments in the first quarter of 2025[95] Liquidity and Financial Condition - As of March 31, 2025, the company had cash and cash equivalents of $217.2 million, sufficient to fund operations and obligations, including the maturity of $300.0 million senior unsecured notes on August 1, 2025[118] - The company has no off-balance sheet arrangements that may materially affect its financial condition or results of operations[119] - The company's senior credit ratings were Baa2 with a positive outlook from Moody's and BBB with a stable outlook from S&P as of March 31, 2025[117]

Financial Performance - Revenue increased by 2% year-over-year to $1.1 billion[8] - Segment profit decreased by 7% year-over-year to $156 million[8] - Adjusted earnings per share (EPS) decreased by 3% year-over-year to $3.37[8] - Operating cash flow was negative $36 million, a decrease of $13 million year-over-year[8] Segment Results - Home Comfort Solutions revenue increased by 7% to $721 million, while segment profit increased to $117 million[21, 22] - Building Climate Solutions revenue decreased by 6% to $351 million, and segment profit decreased to $54 million[26, 27] Financial Position - Net debt to adjusted EBITDA ratio decreased to 0.8x[8] - Free cash flow conversion is above 90%[32] - Net Debt was $926.5 million[47] Guidance - The company anticipates approximately 2% revenue growth[39] - The company expects approximately $35 million in interest expenses[39] - The company expects approximately 20% tax rate[39] - The company expects adjusted EPS to be in the range of $22.25 to $23.50[8, 41]

Core Insights - Lennox International (LII) reported revenue of $1.07 billion for the quarter ended March 2025, reflecting a 2.4% increase year-over-year and exceeding the Zacks Consensus Estimate of $1.03 billion by 4.19% [1] - The company's EPS was $3.37, down from $3.47 in the same quarter last year, but above the consensus estimate of $3.25, resulting in a surprise of 3.69% [1] Financial Performance - Net Sales for Building Climate Solutions were $351.20 million, below the average estimate of $381.90 million from 14 analysts [4] - Net Sales for Home Comfort Solutions reached $721.40 million, surpassing the average estimate of $636.12 million based on 14 analysts [4] - Segment Profit for Home Comfort Solutions was $116.80 million, exceeding the average estimate of $99.09 million from 14 analysts [4] - Segment Profit for Corporate and other was -$14.70 million, better than the average estimate of -$26.11 million from 14 analysts [4] - Segment Profit for Building Climate Solutions was $53.50 million, below the average estimate of $77.66 million from 14 analysts [4] Market Performance - Shares of Lennox have returned -4.9% over the past month, compared to a -6.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Company Performance - Lennox International (LII) reported quarterly earnings of $3.37 per share, exceeding the Zacks Consensus Estimate of $3.25 per share, but down from $3.47 per share a year ago [1] - The earnings surprise for this quarter was 3.69%, following a previous quarter where the company reported earnings of $5.60 per share against an expectation of $4.23, resulting in a surprise of 32.39% [2] - The company achieved revenues of $1.07 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 4.19% and showing an increase from $1.05 billion year-over-year [3] Market Outlook - Lennox shares have declined approximately 8.3% since the beginning of the year, while the S&P 500 has seen a decline of 10.1% [4] - The current consensus EPS estimate for the upcoming quarter is $7.07 on revenues of $1.49 billion, and for the current fiscal year, it is $22.82 on revenues of $5.42 billion [8] Industry Context - The Building Products - Air Conditioner and Heating industry, to which Lennox belongs, is currently ranked in the bottom 34% of over 250 Zacks industries, indicating potential challenges ahead [9] - Another company in the same industry, Trane Technologies, is expected to report quarterly earnings of $2.19 per share, reflecting a year-over-year increase of 12.9% [10]

Exhibit 99.1 Lennox Reports First Quarter Results Q1 Highlights (All comparisons are year-over-year, unless otherwise noted) DALLAS, April 23, 2025 – Lennox (NYSE: LII), a leader in energy-efficient climate-control solutions, today reported first quarter financial results with $1.1 billion of revenue, $156 million of operating income and $3.37 GAAP diluted earnings per share. Revenue grew 2% to $1.1 billion. Segment profit decreased 7% to $156 million. Segment margin was down 140 basis points to 14.5%. Adju ...

Core Insights - Lennox reported a revenue of $1.1 billion for Q1 2025, reflecting a 2% year-over-year growth, while operating income decreased by 7% to $156 million [1][2][5] - The company emphasized the resilience of its replacement-driven business model and its North American-focused strategy amidst current market uncertainties [3][4] Financial Performance - Revenue increased by 2% to $1.1 billion, driven by favorable pricing and product mix [2][5] - Operating income was $156 million, down 7%, with a segment margin of 14.5%, a decrease of 140 basis points [6][7] - Net income for the quarter was $120 million, or $3.37 per share, compared to $124 million, or $3.47 per share, in the prior-year quarter [8][9] Segment Analysis - Home Comfort Solutions segment revenue grew by 7% to $721 million, with segment profit increasing by 4% to $117 million, despite a slight margin decline [10] - Building Climate Solutions segment revenue decreased by 6% to $351 million, with segment profit down 32% to $54 million, impacted by sales volume and cost inefficiencies [11] Guidance and Outlook - For the full year 2025, adjusted earnings per share is expected to be in the range of $22.25 to $23.50, with revenue anticipated to increase by approximately 2% [13][16] - The company aims to leverage pricing gains to offset tariff impacts and maintain profit margins despite potential volume declines [13][16] Cash Flow and Capital Expenditures - Operating cash flow used was $36 million, compared to $23 million in the prior-year quarter, with net capital expenditures of $25 million [9][14] - The company repurchased $85 million in shares during the quarter [9]

The essential investments will expand customer service and training capabilities and enhance distribution infrastructure. DALLAS, April 17, 2025 /PRNewswire/ -- Lennox (NYSE: LII), a leader in the HVAC industry, is making significant investments in its distribution network and customer service and training capabilities in the Dallas—Fort Worth area. This initiative includes expanding training facilities and distribution infrastructure, reinforcing its commitment to customers and growth acceleration. Len ...

Lennox International (LII) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended March 2025. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on April ...