Lennox International(LII) - 2025 Q1 - Quarterly Report

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$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$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]