DALLAS, Feb. 8, 2016 /PRNewswire/ -- Lennox International
Inc. (NYSE: LII) today reported fourth quarter and full year 2015
results.
For the fourth quarter, revenue was $834
million, up 3% from the prior-year quarter. At constant
currency, revenue was up 7%. Total segment profit margin was a
fourth-quarter record 9.7%, up 30 basis points from the prior-year
quarter. Diluted earnings per share from continuing operations on
an adjusted basis was a fourth-quarter record $1.11, up 9% from $1.02 in the prior-year quarter. On a GAAP basis,
diluted earnings per share from continuing operations was
$0.25, compared to $1.00 in the prior-year quarter, including
previously announced non-cash impairment charges in the company's
Kysor/Warren refrigerated display case business.
For the full year, revenue was $3.5
billion, up 3%. At constant currency, revenue was up 7%.
Total segment profit margin was a record 10.9%, up 80 basis points
from the prior year. Diluted earnings per share from continuing
operations on an adjusted basis was a record $5.14 compared to $4.38 in the prior year. On a GAAP basis, diluted
earnings per share from continuing operations was $4.11 compared to $4.28 in the prior year.
"2015 was a year of strong growth for Lennox International, led
by our Residential business with revenue up 9% at constant currency
and segment profit up 18%," said Chairman and CEO Todd Bluedorn. "Our Residential and Commercial
businesses set new records for revenue, margin and profit for the
year. In Refrigeration, we saw strong growth and margin expansion
in the second half of the year, and momentum continues.
"In the fourth quarter, Residential volume and mix were
negatively impacted by record warm weather in the U.S. Residential
revenue was up 8% over the prior-year quarter at constant currency.
Residential profit was flat, and margin was down due to negative
Canadian foreign exchange, lower factory absorption than a year
ago, and unfavorable mix – driven by a lower mix of furnace
products and replacement business, and a higher mix of residential
national accounts and new construction. In our Commercial business,
we set new fourth-quarter records for revenue and profit.
Commercial revenue was up 7% at constant currency, and margin
expanded 70 basis points to 15.3%. In Refrigeration, revenue was up
3% at constant currency, and margin expanded 180 basis points to
8.8%.
"Looking ahead at 2016 overall, Lennox International is well
positioned for another year of strong growth and profitability. The
company reiterates its guidance for revenue growth of 4-8% at
constant currency and EPS from continuing operations of
$6.10-$6.60. With a strong balance
sheet and cash generation, the company will continue to invest in
the business to drive organic growth, raise the dividend with
earnings growth, and repurchase stock."
FOURTH QUARTER 2015 FINANCIAL HIGHLIGHTS
Revenue: Revenue for the fourth quarter was $834 million, up 3% from the prior-year quarter.
At constant currency, revenue was up 7%. Volume was up and
price/mix was flat from the fourth quarter a year ago.
Gross Profit: Gross profit in the fourth quarter was
$228 million, up 1% from $225 million in the prior-year quarter. Gross
margin was 27.3% compared to 27.7% in the fourth quarter a year
ago. Gross profit was positively impacted by higher volume and
lower material costs, with partial offsets from unfavorable
price/mix, negative foreign exchange, lower factory absorption, and
investments in distribution expansion.
Income from Continuing Operations: For the fourth
quarter, adjusted income from continuing operations was
$50 million, or $1.11 diluted earnings per share, compared to
$47 million, or $1.02 diluted earnings per share, in the
prior-year quarter. On a GAAP basis, fourth quarter income from
continuing operations was $11
million, or $0.25 diluted
earnings per share, compared to $46
million, or $1.00 diluted
earnings per share, in the prior-year quarter.
Adjusted income from continuing operations for the fourth
quarter of 2015 excludes net after-tax charges of $39.1 million, which are derived from
$32.6 million of impairment charges
related to the Kysor/Warren refrigerated display case business, a
$3.8 million one-time inventory
write-down, and $2.7 million of other
items, net.
FULL YEAR 2015 FINANCIAL HIGHLIGHTS
Revenue: For the full year, revenue was $3.5 billion, up 3%. At constant currency,
revenue was up 7%. Volume and price/mix were up from the prior
year.
Gross Profit: Gross profit for the full year was
$947 million, up 5% from $903 million in the prior year. Gross margin was
27.3%, up 50 basis points from 26.8% in the prior year. Gross
profit was positively impacted by higher volume, favorable price,
lower material costs, and higher productivity, with partial offsets
from negative foreign exchange, unfavorable mix, the repeal of the
carbon tax on refrigerant in Australia, lower factory absorption, and
investments in distribution expansion.
Income from Continuing Operations: Adjusted income from
continuing operations for 2015 was $234
million, or $5.14 diluted
earnings per share, compared to $213
million, or $4.38 diluted
earnings per share, in the prior year. On a GAAP basis, income from
continuing operations for 2015 was $187
million, or $4.11 diluted
earnings per share, compared to $208
million, or $4.28 diluted
earnings per share, in the prior year.
Adjusted income from continuing operations for 2015 excludes net
after-tax charges of $47.0 million,
which are derived from $32.6 million
of impairment charges related to the Kysor/Warren refrigerated
display case business, $4.0 million
in special legal contingency charges, $3.8
million for a one-time inventory write down, and
$6.6 million of other items, net.
Free Cash Flow and Total Debt: Cash from operations for
the fourth quarter was a record $224
million, compared to $161
million in the prior-year quarter. Capital expenditures were
$23 million in the fourth quarter,
compared to $28 million in the
prior-year quarter. Free cash flow was also a record at
approximately $202 million, compared
to approximately $134 million in the
prior-year quarter. For the full year, cash from operations was a
record $331 million, compared to
$185 million in the prior year.
Capital expenditures were $70 million
in 2015 compared to $87 million in
2014. Free cash flow was a record $261
million for the full year compared to $98 million in the prior year. The company paid
$59 million in dividends for the
year. Total debt at the end of 2015 was $744
million. Total cash and cash equivalents were $39 million ending the year.
BUSINESS SEGMENT FINANCIAL HIGHLIGHTS
Residential Heating and Cooling
- 4Q15 revenue of $431 million, up
7% from 4Q14; up 8% at constant currency
- 4Q15 segment profit a fourth-quarter record $57 million, relatively flat with 4Q14
- 4Q15 segment profit margin 13.2%, down 90 basis points from
4Q14
- 2015 revenue a record $1,867
million, up 8% from 2014; up 9% at constant currency
- 2015 segment profit a record $278
million, up 18% from 2014
- 2015 segment profit margin a record 14.9%, up 130 basis points
from 2014
Fourth quarter results were positively impacted by higher volume
and lower material costs, with offsets from foreign exchange,
unfavorable mix, strategic investments in distribution expansion,
and lower factory absorption than in the prior-year quarter, which
included an inventory prebuild to support a product efficiency
regulatory transition. Full year results were positively impacted
by higher volume, favorable price/mix, and lower material costs,
with partial offsets from negative foreign exchange, higher
SG&A, lower factory absorption, and strategic investments in
distribution expansion.
Commercial Heating and Cooling
- 4Q15 revenue a fourth-quarter record $227 million, up 2% from 4Q14; up 7% at constant
currency
- 4Q15 segment profit a fourth-quarter record $35 million, up 7% from 4Q14
- 4Q15 segment profit margin of 15.3%, up 70 basis points from
4Q14
- 2015 revenue a record $887
million, up 1% from 2014; up 6% at constant currency
- 2015 segment profit a record $130
million, up 5% from 2014
- 2015 segment profit margin a record 14.7%, up 60 basis points
from 2014
Fourth quarter results were positively impacted by higher volume
and lower material costs, with a partial offset from negative
foreign exchange. Full year results were positively impacted by
higher volume, favorable price, and lower material costs, with
partial offsets from negative foreign exchange, unfavorable mix,
higher SG&A, and strategic investments for growth in the VRF
equipment market in North America.
Refrigeration
- 4Q15 revenue of $176 million,
down 5% from 4Q14; up 3% at constant currency
- 4Q15 segment profit of $15
million, up 18% from 4Q14
- 4Q15 segment profit margin of 8.8%, up 180 basis points from
4Q14
- 2015 revenue of $713 million,
down 5% from 2014; up 3% at constant currency
- 2015 segment profit of $53
million, down 5% from 2014
- 2015 segment profit margin of 7.4%, flat with 2014
Fourth quarter results were positively impacted by lower
material costs and higher productivity, with partial offsets from
negative foreign exchange, unfavorable mix, and higher SG&A.
Full year results were positively impacted by higher volume,
favorable price, lower material costs, and higher productivity,
with offsets from negative foreign exchange, unfavorable mix,
higher SG&A, and the repeal of the carbon tax on refrigerant in
Australia.
2016 FULL-YEAR OUTLOOK
- Reiterating guidance for revenue growth of 4-8% at constant
currency; the company now expects a negative 1 point impact from
foreign exchange for revenue growth of 3-7% at actual currency
- Reiterating adjusted and GAAP EPS from continuing operations of
$6.10-$6.60
- Reiterating an effective tax rate of 34-35% on a full-year
basis
- Reiterating capital expenditures of approximately $95 million
- Reiterating plans for $200
million of stock repurchases
CONFERENCE CALL INFORMATION
A conference call to
discuss the company's fourth quarter and full year 2015 results
will be held this morning at 8:30 a.m.
Central time. To listen, call the conference call line at
612-332-0107 at least 10 minutes prior to the scheduled start time
and use reservation number 383549. The conference call will also be
webcast on Lennox International's web site at
www.lennoxinternational.com. A replay will be available from
11:00 a.m. Central time on
February 8 through February 22, 2016,
by dialing 800-475-6701 (U.S.) or 320-365-3844 (international) and
using access code 383549. The call also will be archived on the
company's web site.
About Lennox International
Lennox International Inc.
is a global leader in the heating, air conditioning, and
refrigeration markets. Lennox International stock is listed on the
New York Stock Exchange and traded under the symbol "LII".
The company's 2016 annual meeting of stockholders is to be
held on May 12, 2016, and the record
date for that meeting is March 18,
2016. Additional information on Lennox International is
available at www.lennoxinternational.com or by contacting
Steve Harrison, Vice President,
Investor Relations, at 972-497-6670.
Forward-Looking Statements
The statements in this news
release that are not historical statements, including statements
regarding the 2016 full-year outlook and expected financial results
for 2016, are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on information currently
available as well as management's assumptions and beliefs today.
These statements are subject to numerous risks and uncertainties
that could cause actual results to differ materially from the
results expressed or implied by the statements, and investors
should not place undue reliance on them. Risks and
uncertainties that could cause actual results to differ materially
from such statements 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, economic conditions in our
markets, regulatory changes, the impact of unfavorable weather, and
a decline in new construction activity and related demand for
products and services. 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
|
|
(Amounts in
millions, except per share data)
|
For the Three
Months Ended
December
31,
|
|
For the
Years Ended
December
31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net
sales
|
$
|
834.1
|
|
|
$
|
812.8
|
|
|
$
|
3,467.4
|
|
|
$
|
3,367.4
|
|
Cost of goods
sold
|
606.5
|
|
|
587.4
|
|
|
2,520.0
|
|
|
2,464.1
|
|
Gross
profit
|
227.6
|
|
|
225.4
|
|
|
947.4
|
|
|
903.3
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
150.6
|
|
|
148.2
|
|
|
580.5
|
|
|
573.7
|
|
Losses and other
expenses, net
|
6.8
|
|
|
3.3
|
|
|
21.7
|
|
|
6.8
|
|
Restructuring
charges
|
1.4
|
|
|
0.6
|
|
|
3.2
|
|
|
1.9
|
|
Goodwill
impairment
|
5.5
|
|
|
—
|
|
|
5.5
|
|
|
—
|
|
Asset
impairment
|
44.5
|
|
|
—
|
|
|
44.5
|
|
|
—
|
|
Income from equity
method investments
|
(1.6)
|
|
|
(1.8)
|
|
|
(13.4)
|
|
|
(13.8)
|
|
Operational income
from continuing operations
|
20.4
|
|
|
75.1
|
|
|
305.4
|
|
|
334.7
|
|
Interest expense,
net
|
5.8
|
|
|
6.2
|
|
|
23.6
|
|
|
17.2
|
|
Other expense
(income), net
|
(0.1)
|
|
|
(0.1)
|
|
|
(0.8)
|
|
|
(0.1)
|
|
Income from
continuing operations before income taxes
|
14.7
|
|
|
69.0
|
|
|
282.6
|
|
|
317.6
|
|
Provision for income
taxes
|
3.5
|
|
|
22.9
|
|
|
95.4
|
|
|
109.5
|
|
Income from
continuing operations
|
11.2
|
|
|
46.1
|
|
|
187.2
|
|
|
208.1
|
|
Discontinued
Operations:
|
|
|
|
|
|
|
|
Income (loss) from
discontinued operations before income taxes
|
—
|
|
|
(2.4)
|
|
|
(1.0)
|
|
|
(3.7)
|
|
Provision for
(benefit from) income taxes
|
—
|
|
|
(0.9)
|
|
|
(0.4)
|
|
|
(1.4)
|
|
Income (loss) from
discontinued operations
|
—
|
|
|
(1.5)
|
|
|
(0.6)
|
|
|
(2.3)
|
|
Net
income
|
$
|
11.2
|
|
|
$
|
44.6
|
|
|
$
|
186.6
|
|
|
$
|
205.8
|
|
|
|
|
|
|
|
|
|
Earnings per
share – Basic:
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
0.25
|
|
|
$
|
1.01
|
|
|
$
|
4.17
|
|
|
$
|
4.35
|
|
Income (loss) from
discontinued operations
|
—
|
|
|
(0.03)
|
|
|
(0.01)
|
|
|
(0.05)
|
|
Net income
|
$
|
0.25
|
|
|
$
|
0.98
|
|
|
$
|
4.16
|
|
|
$
|
4.30
|
|
Earnings per
share – Diluted:
|
|
|
|
|
|
|
|
Income from
continuing operations
|
$
|
0.25
|
|
|
$
|
1.00
|
|
|
$
|
4.11
|
|
|
$
|
4.28
|
|
Income (loss) from
discontinued operations
|
—
|
|
|
(0.04)
|
|
|
(0.02)
|
|
|
(0.05)
|
|
Net income
|
$
|
0.25
|
|
|
$
|
0.96
|
|
|
$
|
4.09
|
|
|
$
|
4.23
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Shares Outstanding - Basic
|
44.9
|
|
|
45.5
|
|
|
44.9
|
|
|
47.9
|
|
Weighted Average
Number of Shares Outstanding - Diluted
|
45.5
|
|
|
46.2
|
|
|
45.6
|
|
|
48.6
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per share
|
$
|
0.36
|
|
|
$
|
0.30
|
|
|
$
|
1.38
|
|
|
$
|
1.14
|
|
LENNOX
INTERNATIONAL INC. AND SUBSIDIARIES
|
Segment Net Sales
and Profit (Loss)
|
|
|
(Amounts in
millions)
|
For the Three
Months Ended
December
31,
|
|
For the Years
Ended
December
31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net
Sales
|
|
|
|
|
|
|
|
Residential
Heating & Cooling
|
$
|
431.2
|
|
|
$
|
404.0
|
|
|
$
|
1,866.9
|
|
|
$
|
1,736.5
|
|
Commercial
Heating & Cooling
|
226.9
|
|
|
222.9
|
|
|
887.2
|
|
|
878.5
|
|
Refrigeration
|
176.0
|
|
|
185.9
|
|
|
713.3
|
|
|
752.4
|
|
|
$
|
834.1
|
|
|
$
|
812.8
|
|
|
$
|
3,467.4
|
|
|
$
|
3,367.4
|
|
|
|
|
|
|
|
|
|
Segment Profit
(Loss) (1)
|
|
|
|
|
|
|
|
Residential
Heating & Cooling
|
$
|
57.1
|
|
|
$
|
57.0
|
|
|
$
|
278.4
|
|
|
$
|
235.8
|
|
Commercial
Heating & Cooling
|
34.8
|
|
|
32.6
|
|
|
130.4
|
|
|
124.0
|
|
Refrigeration
|
15.4
|
|
|
13.1
|
|
|
52.9
|
|
|
55.4
|
|
Corporate and
other
|
(26.5)
|
|
|
(26.4)
|
|
|
(84.1)
|
|
|
(74.3)
|
|
Subtotal that
includes segment profit and eliminations
|
80.8
|
|
|
76.3
|
|
|
377.6
|
|
|
340.9
|
|
Reconciliation to
income from continuing operations before income
taxes:
|
|
|
|
|
|
|
|
Special product
quality adjustments
|
(1.5)
|
|
|
(1.4)
|
|
|
(2.2)
|
|
|
(1.4)
|
|
Items in Losses and
other expenses, net that are excluded from segment
profit (loss) (1)
|
4.9
|
|
|
2.0
|
|
|
15.6
|
|
|
4.7
|
|
Restructuring
charges
|
1.4
|
|
|
0.6
|
|
|
3.2
|
|
|
1.9
|
|
Interest expense,
net
|
5.8
|
|
|
6.2
|
|
|
23.6
|
|
|
17.2
|
|
Goodwill
impairment
|
5.5
|
|
|
—
|
|
|
5.5
|
|
|
—
|
|
Asset
impairment
|
44.5
|
|
|
—
|
|
|
44.5
|
|
|
—
|
|
One time inventory
write down
|
5.6
|
|
|
—
|
|
|
5.6
|
|
|
1.0
|
|
Other expense
(income), net
|
(0.1)
|
|
|
(0.1)
|
|
|
(0.8)
|
|
|
(0.1)
|
|
Income from
continuing operations before income taxes
|
$
|
14.7
|
|
|
$
|
69.0
|
|
|
$
|
282.6
|
|
|
$
|
317.6
|
|
(1)
|
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:
|
|
•
|
Special product
quality adjustments;
|
|
•
|
The following items
in Losses and other expenses, net:
|
|
|
-
|
Net change in
unrealized gains and/or losses on unsettled futures
contracts,
|
|
|
-
|
Special legal
contingency charges,
|
|
|
-
|
Asbestos-related
litigation,
|
|
|
-
|
Environmental
liabilities, and
|
|
|
-
|
Other items,
net;
|
|
•
|
Restructuring
charges;
|
|
•
|
Goodwill, long-lived
asset, and equity method investment impairments;
|
|
•
|
Interest expense,
net;
|
|
•
|
One time inventory
write down; and
|
|
•
|
Other expense,
net.
|
LENNOX
INTERNATIONAL INC. AND SUBSIDIARIES
|
Consolidated
Balance Sheets
|
|
(Amounts in
millions, except shares and par values)
|
As of December
31,
2015
|
|
As of December
31,
2014
|
|
|
|
|
ASSETS
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
38.9
|
|
|
$
|
37.5
|
|
Accounts and notes
receivable, net of allowances of $6.3 and $7.9 in 2015 and 2014,
respectively
|
422.8
|
|
|
421.4
|
|
Inventories,
net
|
418.8
|
|
|
463.3
|
|
Other
assets
|
57.7
|
|
|
59.3
|
|
Total current
assets
|
938.2
|
|
|
981.5
|
|
Property, plant and
equipment, net
|
339.6
|
|
|
358.6
|
|
Goodwill
|
195.1
|
|
|
209.4
|
|
Deferred income
taxes
|
145.7
|
|
|
130.0
|
|
Other assets,
net
|
61.6
|
|
|
84.8
|
|
Total
assets
|
$
|
1,680.2
|
|
|
$
|
1,764.3
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
Short-term
debt
|
$
|
204.1
|
|
|
$
|
226.6
|
|
Current maturities of
long-term debt
|
31.2
|
|
|
24.0
|
|
Accounts
payable
|
320.1
|
|
|
324.3
|
|
Accrued
expenses
|
242.6
|
|
|
239.0
|
|
Income taxes
payable
|
26.0
|
|
|
13.4
|
|
Total current
liabilities
|
824.0
|
|
|
827.3
|
|
Long-term
debt
|
508.6
|
|
|
675.0
|
|
Post-retirement
benefits, other than pensions
|
4.1
|
|
|
4.5
|
|
Pensions
|
120.8
|
|
|
129.9
|
|
Other
liabilities
|
121.1
|
|
|
118.6
|
|
Total
liabilities
|
1,578.6
|
|
|
1,755.3
|
|
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, 87,170,197 shares
issued
|
0.9
|
|
|
0.9
|
|
Additional paid-in
capital
|
1,002.4
|
|
|
824.9
|
|
Retained
earnings
|
1,146.7
|
|
|
1,022.1
|
|
Accumulated other
comprehensive loss
|
(204.7)
|
|
|
(153.5)
|
|
Treasury stock, at
cost, 42,491,910 shares and 42,535,126 shares for 2015 and 2014,
respectively
|
(1,844.1)
|
|
|
(1,686.0)
|
|
Noncontrolling
interests
|
0.4
|
|
|
0.6
|
|
Total
stockholders' equity
|
101.6
|
|
|
9.0
|
|
Total liabilities
and stockholders' equity
|
$
|
1,680.2
|
|
|
$
|
1,764.3
|
|
LENNOX
INTERNATIONAL INC. AND SUBSIDIARIES
|
Consolidated
Statements of Cash Flow
|
|
(Amounts in
millions)
|
For the Years
Ended December 31,
|
|
2015
|
|
2014
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
186.6
|
|
|
$
|
205.8
|
|
Net loss from
discontinued operations
|
0.6
|
|
|
2.3
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Income from equity
method investments
|
(13.4)
|
|
|
(13.8)
|
|
Dividends from
affiliates
|
11.0
|
|
|
9.1
|
|
Restructuring
expenses, net of cash paid
|
—
|
|
|
0.2
|
|
Goodwill
impairment
|
5.5
|
|
|
—
|
|
Impairment of
assets
|
44.5
|
|
|
—
|
|
Provision for bad
debts
|
2.8
|
|
|
2.6
|
|
Unrealized losses on
derivative contracts
|
0.8
|
|
|
0.3
|
|
Stock-based
compensation expense
|
26.6
|
|
|
23.3
|
|
Depreciation and
amortization
|
62.8
|
|
|
60.8
|
|
Deferred income
taxes
|
(21.3)
|
|
|
6.1
|
|
Pension costs in
excess of (less than) contributions
|
6.7
|
|
|
(8.0)
|
|
Other items,
net
|
1.0
|
|
|
0.1
|
|
Changes in assets and
liabilities, net of effects of acquisitions and
divestitures:
|
|
|
|
Accounts and notes
receivable
|
(23.5)
|
|
|
(32.6)
|
|
Inventories
|
28.8
|
|
|
(96.7)
|
|
Other current
assets
|
(1.6)
|
|
|
(8.3)
|
|
Accounts
payable
|
(2.9)
|
|
|
46.1
|
|
Accrued
expenses
|
4.2
|
|
|
6.7
|
|
Income taxes payable
and receivable
|
10.9
|
|
|
(15.9)
|
|
Other, net
|
1.7
|
|
|
(1.0)
|
|
Net cash used in
discontinued operations
|
(0.6)
|
|
|
(2.3)
|
|
Net cash provided by
operating activities
|
331.2
|
|
|
184.8
|
|
Cash flows from
investing activities:
|
|
|
|
Proceeds from the
disposal of property, plant and equipment
|
0.1
|
|
|
1.1
|
|
Purchases of
property, plant and equipment
|
(69.9)
|
|
|
(88.4)
|
|
Net proceeds from
sale of businesses
|
—
|
|
|
—
|
|
Net cash used in
investing activities
|
(69.8)
|
|
|
(87.3)
|
|
Cash flows from
financing activities:
|
|
|
|
Short-term
borrowings, net
|
(1.7)
|
|
|
1.5
|
|
Asset securitization
borrowings
|
40.0
|
|
|
100.0
|
|
Asset securitization
payments
|
(60.0)
|
|
|
(40.0)
|
|
Term loan borrowings
from credit facility
|
—
|
|
|
300.0
|
|
Long-term debt
payments
|
(24.0)
|
|
|
(2.3)
|
|
Borrowings from
credit facility
|
1,671.0
|
|
|
2,073.5
|
|
Payments on credit
facility
|
(1,807.5)
|
|
|
(1,908.5)
|
|
Payments of deferred
financing costs
|
—
|
|
|
(2.2)
|
|
Additional investment
in subsidiary
|
—
|
|
|
—
|
|
Proceeds from
employee stock purchases
|
2.4
|
|
|
2.0
|
|
Repurchases of common
stock
|
—
|
|
|
(550.3)
|
|
Repurchases of common
stock to satisfy employee withholding tax obligations
|
(32.0)
|
|
|
(22.4)
|
|
Excess tax benefits
related to share-based payments
|
22.4
|
|
|
11.8
|
|
Cash dividends
paid
|
(59.3)
|
|
|
(52.6)
|
|
Net cash used in
financing activities
|
(248.7)
|
|
|
(89.5)
|
|
Increase (decrease)
in cash and cash equivalents
|
12.7
|
|
|
8.0
|
|
Effect of exchange
rates on cash and cash equivalents
|
(11.3)
|
|
|
(8.5)
|
|
Cash and cash
equivalents, beginning of year
|
37.5
|
|
|
38.0
|
|
Cash and cash
equivalents, end of year
|
$
|
38.9
|
|
|
$
|
37.5
|
|
Supplementary
disclosures of cash flow information:
|
|
|
|
Cash paid during the
year for:
|
|
|
|
Interest,
net
|
$
|
23.7
|
|
|
$
|
17.6
|
|
Income taxes (net of
refunds)
|
$
|
83.2
|
|
|
$
|
105.3
|
|
LENNOX
INTERNATIONAL INC. AND SUBSIDIARIES
|
Reconciliation to
U.S. GAAP (Generally Accepted Accounting Principles)
Measures
|
(Unaudited, in
millions, except per share and ratio data)
|
|
Use of Non-GAAP
Financial Measures
|
To supplement the
Company's consolidated financial statements and segment net sales
and profit presented in accordance with U.S. GAAP, additional
non-GAAP financial measures are provided and reconciled in the
following tables. In addition to these non-GAAP measures, the
Company also provides rates of revenue change at constant currency
on a consolidated and segment basis. The Company believes that
these non-GAAP financial measures, when considered together with
the GAAP financial measures, provide information that is useful to
investors in understanding period-over-period operating
results. The Company believes that these non-GAAP financial
measures enhance the ability of investors to analyze the Company's
business trends and operating performance.
|
|
Reconciliation of
Income from Continuing Operations, a GAAP measure, to Adjusted
Income from Continuing Operations, a Non-GAAP
measure
|
|
|
For the Three
Months
Ended
December 31,
|
|
For the
Years
Ended
December 31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Income from
continuing operations, a GAAP measure
|
$
|
11.2
|
|
|
$
|
46.1
|
|
|
$
|
187.2
|
|
|
$
|
208.1
|
|
Restructuring
charges, after tax
|
1.0
|
|
|
0.4
|
|
|
2.3
|
|
|
1.8
|
|
Asset impairment,
after tax
|
29.0
|
|
|
—
|
|
|
29.0
|
|
|
—
|
|
Goodwill impairment,
after tax
|
3.6
|
|
|
—
|
|
|
3.6
|
|
|
—
|
|
Special product
quality adjustments, after tax (b)
|
(0.9)
|
|
|
(0.8)
|
|
|
(1.3)
|
|
|
(0.9)
|
|
Special legal
contingency charges, after tax (a)
|
0.6
|
|
|
0.2
|
|
|
4.0
|
|
|
0.6
|
|
Asbestos-related
litigation, after tax (a)
|
1.3
|
|
|
—
|
|
|
1.9
|
|
|
0.6
|
|
Net change in
unrealized losses (gains) on unsettled future contracts, after
tax(a)
|
(0.2)
|
|
|
0.3
|
|
|
0.4
|
|
|
0.4
|
|
One time inventory
write down, after tax (b)
|
3.8
|
|
|
—
|
|
|
3.8
|
|
|
0.8
|
|
Environmental
liabilities, after tax (a)
|
0.3
|
|
|
0.7
|
|
|
1.0
|
|
|
1.2
|
|
Contractor tax
payments, after tax (a)
|
0.2
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
Other items, net,
after tax (a)
|
0.4
|
|
|
—
|
|
|
0.6
|
|
|
0.5
|
|
Adjusted income
from continuing operations, a non-GAAP measure
|
$
|
50.3
|
|
|
$
|
46.9
|
|
|
$
|
234.2
|
|
|
$
|
213.1
|
|
|
|
|
|
|
|
|
|
Income per share
from continuing operations - diluted, a GAAP measure
|
$
|
0.25
|
|
|
$
|
1.00
|
|
|
$
|
4.11
|
|
|
$
|
4.28
|
|
Restructuring
charges, after tax
|
0.02
|
|
|
0.01
|
|
|
0.05
|
|
|
0.03
|
|
Asset impairment,
after tax
|
0.64
|
|
|
—
|
|
|
0.64
|
|
|
—
|
|
Goodwill impairment,
after tax
|
0.08
|
|
|
—
|
|
|
0.08
|
|
|
—
|
|
Special product
quality adjustments, after tax (b)
|
(0.02)
|
|
|
(0.02)
|
|
|
(0.03)
|
|
|
(0.02)
|
|
Special legal
contingency charges, after tax (a)
|
0.01
|
|
|
—
|
|
|
0.09
|
|
|
0.01
|
|
Asbestos-related
litigation, after tax (a)
|
0.03
|
|
|
—
|
|
|
0.04
|
|
|
0.01
|
|
Net change in
unrealized losses (gains) on unsettled future contracts, after
tax(a)
|
—
|
|
|
0.01
|
|
|
0.01
|
|
|
0.01
|
|
One time inventory
write down, after tax (b)
|
0.08
|
|
|
—
|
|
|
0.08
|
|
|
0.02
|
|
Environmental
liabilities, after tax (a)
|
0.01
|
|
|
0.02
|
|
|
0.02
|
|
|
0.03
|
|
Contractor tax
payments, after tax (a)
|
—
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
Other items, net,
after tax (a)
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
0.01
|
|
Adjusted earnings
per share from continuing operations - diluted, a non-GAAP
measure
|
$
|
1.11
|
|
|
$
|
1.02
|
|
|
$
|
5.14
|
|
|
$
|
4.38
|
|
|
(a) Recorded in
Losses (gains) and other expenses, net in the Consolidated
Statements of Operations
|
(b) Recorded in
Cost of goods sold in the Consolidated Statements of
Operations
|
|
|
|
|
|
For the Three
Months
Ended December
31,
|
|
For the
Years
Ended December
31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Components of
Losses and other expenses, net (pre-tax):
|
|
|
|
|
|
|
|
Realized losses on
settled future contracts (a)
|
$
|
0.6
|
|
|
$
|
0.1
|
|
|
$
|
1.9
|
|
|
$
|
0.8
|
|
Foreign currency
exchange losses (a)
|
0.8
|
|
|
1.5
|
|
|
3.6
|
|
|
1.6
|
|
Gain on disposal of
fixed assets (a)
|
0.5
|
|
|
(0.3)
|
|
|
0.6
|
|
|
(0.3)
|
|
Net change in
unrealized losses (gains) on unsettled futures contracts
(b)
|
(0.2)
|
|
|
0.5
|
|
|
0.6
|
|
|
0.6
|
|
Special legal
contingency charges (b)
|
1.9
|
|
|
0.3
|
|
|
7.4
|
|
|
0.9
|
|
Asbestos-related
litigation (b)
|
2.0
|
|
|
—
|
|
|
3.0
|
|
|
0.9
|
|
Environmental
liabilities (b)
|
0.3
|
|
|
1.2
|
|
|
1.0
|
|
|
2.0
|
|
Contractor tax
payments (b)
|
0.2
|
|
|
—
|
|
|
2.6
|
|
|
—
|
|
Acquisition costs
(b)
|
0.7
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
Other items, net
(b)
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
Losses and other
expenses, net (pre-tax)
|
$
|
6.8
|
|
|
$
|
3.3
|
|
|
$
|
21.7
|
|
|
$
|
6.8
|
|
|
(a)
Included in segment profit (loss) and Adjusted income from
continuing operations
|
(b)
Excluded from segment profit (loss) and Adjusted income from
continuing operations
|
|
Reconciliation of
Estimated Adjusted Income per Share from Continuing Operations -
Diluted, a Non-GAAP measure, to Income per Share from Continuing
Operations - Diluted, a GAAP measure
|
|
|
|
|
|
|
|
|
For the
Year
Ended December
31,
2016
ESTIMATED
|
Adjusted
income per share from continuing operations - diluted, a Non-GAAP
measure
|
$6.10-$6.60
|
Restructuring and
other items
|
0.00
|
Income per
share from continuing operations - diluted, a GAAP
measure
|
$6.10-$6.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Cash Provided by Operating Activities, a GAAP measure, to Free
Cash Flow, a Non-GAAP measure (dollars in millions)
|
|
|
For the Three
Months Ended
December
31,
|
|
For the Years
Ended
December
31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net cash provided
by operating activities, a GAAP measure
|
$
|
224.3
|
|
|
$
|
161.3
|
|
|
$
|
331.2
|
|
|
$
|
184.8
|
|
Purchases of
property, plant and equipment
|
(22.9)
|
|
|
(28.5)
|
|
|
(69.9)
|
|
|
(88.4)
|
|
Proceeds from
the disposal of property, plant and equipment
|
0.1
|
|
|
0.9
|
|
|
0.1
|
|
|
1.1
|
|
Free cash
flow, a Non-GAAP measure
|
$
|
201.5
|
|
|
$
|
133.7
|
|
|
$
|
261.4
|
|
|
$
|
97.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of
Debt to EBITDA Ratio (dollars in millions):
|
|
|
|
|
|
|
Trailing
Twelve Months
to
December
31,
2015
|
Adjusted EBIT
(a)
|
|
|
|
|
|
|
$
|
377.6
|
|
Depreciation
and amortization expense (b)
|
|
|
|
|
|
|
62.8
|
|
EBITDA (a +
b)
|
|
|
|
|
|
|
$
|
440.4
|
|
Total debt at
December 31, 2015 (c)
|
|
|
|
|
|
|
$
|
743.9
|
|
Total Debt
to EBITDA ratio ((c / (a + b))
|
|
|
|
|
|
|
1.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EBIT, a Non-GAAP measure, to Income From Continuing
Operations Before Income Taxes, a GAAP measure (dollars in
millions)
|
|
|
|
|
|
|
|
|
Trailing
Twelve Months
to
December
31,
2015
|
Adjusted
EBIT per above, a Non-GAAP measure
|
$
|
377.6
|
|
Special product
quality adjustments
|
(2.2)
|
|
Items in Losses
and other expenses, net that are excluded from segment
profit
|
15.6
|
|
Restructuring
charges
|
3.2
|
|
Interest
expense, net
|
23.6
|
|
One time
inventory write down
|
5.6
|
|
Goodwill
impairment
|
5.5
|
|
Asset
impairment
|
44.5
|
|
Other expenses,
net
|
(0.8)
|
|
Income from
continuing operations before income taxes, a GAAP
measure
|
$
|
282.6
|
|
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SOURCE Lennox International Inc.