DALLAS, July 20, 2020 /PRNewswire/ -- Lennox
International Inc. (NYSE: LII) today reported financial results for
the second quarter of 2020. All comparisons are to the prior-year
period. The company's insurance references relate to the
July 2018 tornado damage at a
Residential manufacturing facility in Iowa. Adjusted revenue and profit exclude
non-core Refrigeration businesses divested in prior periods.
For the second quarter of 2020, Lennox International reported
revenue of $941 million, down 14%.
GAAP operating income was $136
million compared to $214
million in the prior-year quarter. GAAP earnings per share
from continuing operations was $2.62
compared to $2.81 in the prior-year
quarter. The second quarter of 2019 included an insurance benefit
of $26 million and a pension
settlement charge of $61 million.
Total adjusted segment profit was $153
million in the second quarter compared to $202 million in the prior-year quarter that
included $18 million of insurance
benefit. Total adjusted segment margin was 16.3% compared to 18.4%
in the prior-year quarter. Adjusted earnings per share from
continuing operations was $2.97
compared to $3.74 in the prior-year
quarter.
"The COVID-19 pandemic significantly impacted all our businesses
in the second quarter, but our Residential business improved each
month through the quarter and was up 7% year-over-year in June as
the economy continued to re-open and weather heated up," said
Todd Bluedorn, Chairman and CEO.
"With hot weather continuing month-to-date in July, we are seeing
strong Residential growth on excellent operational execution by the
team to capitalize on market opportunities.
"In total for the second quarter, Residential revenue was down
6%. Segment profit was $127 million,
down 17% as reported. From an operational perspective excluding
$18 million of insurance benefit in
the prior-year quarter, segment profit was down 6%. Segment margin
was 19.7%, down 260 basis points as reported. On an operational
basis, segment margin was up 10 basis points.
"As expected, our commercial-facing businesses were more heavily
impacted from the pandemic. In our Commercial business segment,
revenue was down 28%, driven primarily by national account
customers pushing out orders as previously discussed. Regional and
local business was also down significantly in the quarter.
Commercial segment profit was down 34%, and segment margin
contracted 170 basis points to 18.9%. In the Refrigeration segment,
adjusted revenue was down broadly across our businesses in
North America and Europe, declining 26% at constant currency.
Segment profit was down 53%, and segment margin contracted 460
basis points to 8.2%.
"We continue to face highly uncertain market conditions in the
second half of the year, and the company's stock repurchase program
currently remains on hold. Lennox International maintains a strong
balance sheet and continues to expect a strong year of cash
generation, targeting approximately $340
million of free cash flow. The company has executed well on
its $115 million of in-year SG&A
savings for 2020 and managed decremental total adjusted segment
profit margin of 20% on an operational basis in the second quarter.
We are raising our financial guidance for 2020 and now expect
adjusted revenue to be down 10-15% and adjusted EPS from continuing
operations of $7.90-$8.70. Lennox has a focused and seasoned team
with experience managing through economic downturns while
continuing to invest and advance the company's position to
capitalize on share gains and market opportunities."
FINANCIAL HIGHLIGHTS
Revenue: Revenue was $941
million in the second quarter, down 14%. Foreign exchange
was neutral to revenue. Volume was down, and price and mix were
favorable to revenue.
Gross Profit: Gross profit was $276 million on a GAAP basis and $275 million on an adjusted basis, both compared
to $332 million in the prior-year
quarter. GAAP gross margin was 29.3% and adjusted gross margin was
29.2%, compared to 30.2% in the prior-year quarter. Gross profit
was impacted by lower volume due to the COVID-19 pandemic, lower
factory absorption, higher warranty expense, and unfavorable
mix.
Income from Continuing Operations: On a GAAP basis,
income from continuing operations for the second quarter was
$100.6 million, or $2.62 per share, compared to $111.0 million, or $2.81 per share, in the prior-year quarter.
Adjusted income from continuing operations in the second quarter
was $114.0 million, or $2.97 per share, compared to $147.6 million, or $3.74 per share, in the prior-year quarter.
Adjusted income from continuing operations for the second quarter
of 2020 excludes net after-tax charges of $13.4 million, consisting of: $7.9 million for restructuring activities,
$2.6 million for personal protective
equipment and facility deep cleaning expenses incurred due to the
COVID-19 pandemic, and a net $2.9
million in charges for various other items.
Cash from Operations, Free Cash Flow and Total
Debt: Net cash from operations in the second quarter was
$105 million, compared to
$30 million in the prior-year
quarter. Capital expenditures were $19
million in the second quarter, compared to $16 million in the prior-year quarter that also
had approximately $6 million in
proceeds from insurance and property disposals. Free cash flow was
approximately $87 million compared to
$20 million in the second quarter a
year ago. Total debt at the end of the second quarter was
$1.39 billion. Total cash, cash
equivalents and short-term investments were $49 million at the end of June. In the second
quarter, the company paid approximately $30
million in dividends.
BUSINESS SEGMENT HIGHLIGHTS
Residential Heating & Cooling
Revenue in the
Residential Heating & Cooling business segment was $645 million, down 6%. Foreign exchange was
neutral. Segment profit was $127
million, compared to $153
million in the prior-year quarter that included $18 million of insurance benefit. Segment margin
was 19.7%. In the prior-year quarter, segment margin was 22.3% as
reported or 19.6% excluding the $18
million insurance benefit. Residential results were
negatively impacted by the year-over-year difference in insurance
benefit, higher warranty expense, and the COVID-19 pandemic that
led to lower volume and factory inefficiencies. Partial offsets
included favorable price and mix, lower material, freight and
distribution costs, and lower SG&A expense.
Commercial Heating & Cooling
Revenue in the
Commercial Heating & Cooling business segment was $188 million, down 28%. Foreign exchange was
neutral. Segment margin was 18.9% compared to 20.6% in the
prior-year quarter. Segment profit was $36
million compared to $54
million in the prior-year quarter. Commercial results were
negatively impacted by unfavorable mix, higher warranty expense,
and the COVID-19 pandemic that led to lower volume. Partial
offsets included lower material, freight and distribution costs,
and lower SG&A expense.
Refrigeration
Adjusted revenue in the Refrigeration
business segment was $108 million,
down 27%. Foreign exchange had a negative 1% impact on revenue.
Adjusted segment profit was $9
million compared to $19
million in the prior-year quarter. Segment margin was 8.2%
compared to 12.8% in the prior-year quarter. Refrigeration results
were negatively impacted by higher warranty expense and the
COVID-19 pandemic that led to lower volume and factory
inefficiencies. Partial offsets included lower material, freight
and distribution costs, lower SG&A expense, and favorable
foreign exchange.
FULL-YEAR GUIDANCE
The company is updating its 2020
guidance and raising estimates for revenue and EPS from continuing
operations.
- Raising guidance for adjusted revenue to be down 10-15% from
the prior year compared to previous guidance to be down
11-17%.
- Raising guidance for GAAP EPS from continuing operations to
$7.31-$8.11 from previous guidance of $7.07-$8.07.
- Raising guidance for adjusted EPS from continuing operations to
$7.90-$8.70 from previous guidance of $7.50-$8.50.
- Corporate expense is still expected to be approximately
$75 million.
- The effective tax rate is still expected to be 21-22% on an
adjusted basis for the full year.
- Capital expenditures are still targeted to be $120 million.
- Guidance for free cash flow remains approximately $340 million.
- The company's remaining 2020 stock repurchase program of
$300 million currently remains on
hold; the company repurchased $100
million of stock in the first quarter.
- The company's quarterly dividend plans remain unchanged at
$0.77 per share, or more than
$115 million in total for the
year.
CONFERENCE CALL INFORMATION
A conference call to
discuss the company's second-quarter results and outlook will be
held this morning at 8:30 a.m. Central
time. To listen, call the conference call line at
844-721-7239 (U.S.) or 409-207-6953 (international) at least 10
minutes prior to the scheduled start time and use participant code
5188986. The conference call also will be webcast on Lennox
International's web site at www.lennoxinternational.com. A replay
will be available from approximately 11:00
a.m. Central time on July 20 through
August 3, 2020 by dialing 866-207-1041 (U.S.) or
402-970-0847 (international) and using access code 2654797. The
call also will be archived on the company's website.
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".
Additional information 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 2020 full-year outlook, expected
consolidated and segment financial results for 2020, 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 risks associated
with the economic impact of the COVID-19 pandemic on the company
and its employees, customers and suppliers; risks that the
decline in the North American unitary HVAC and refrigeration
markets will be greater than current assumptions. Additional
statements include, but are not limited to: the impact of higher
raw material prices, the impact of new or increased trade tariffs,
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, except as
required by law.
LENNOX
INTERNATIONAL INC. AND SUBSIDIARIES
|
Consolidated
Statements of Operations
|
(Unaudited)
|
|
(Amounts in
millions, except per share data)
|
For the Three
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net
sales
|
$
|
941.3
|
|
|
$
|
1,099.1
|
|
|
$
|
1,665.1
|
|
|
$
|
1,889.4
|
|
Cost of goods
sold
|
665.6
|
|
|
767.0
|
|
|
1,223.7
|
|
|
1,355.8
|
|
Gross
profit
|
275.7
|
|
|
332.1
|
|
|
441.4
|
|
|
533.6
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
129.5
|
|
|
152.4
|
|
|
260.8
|
|
|
298.2
|
|
Losses (gains) and
other expenses, net
|
3.6
|
|
|
2.1
|
|
|
2.3
|
|
|
3.2
|
|
Restructuring
charges
|
10.0
|
|
|
(0.1)
|
|
|
10.5
|
|
|
0.4
|
|
Loss on sale of
business
|
—
|
|
|
0.4
|
|
|
—
|
|
|
8.8
|
|
Insurance proceeds for
lost profits
|
—
|
|
|
(26.0)
|
|
|
—
|
|
|
(65.5)
|
|
Loss (gain) from
natural disaster, net of insurance recoveries
|
1.0
|
|
|
(5.9)
|
|
|
2.7
|
|
|
(12.8)
|
|
Income from equity
method investments
|
(4.4)
|
|
|
(4.6)
|
|
|
(7.2)
|
|
|
(7.2)
|
|
Operating
income
|
136.0
|
|
|
213.8
|
|
|
172.3
|
|
|
308.5
|
|
Pension
settlement
|
—
|
|
|
60.6
|
|
|
—
|
|
|
60.6
|
|
Interest expense,
net
|
6.9
|
|
|
13.1
|
|
|
15.6
|
|
|
23.9
|
|
Other expense
(income), net
|
1.1
|
|
|
0.3
|
|
|
2.2
|
|
|
1.2
|
|
Income from continuing
operations before income taxes
|
128.0
|
|
|
139.8
|
|
|
154.5
|
|
|
222.8
|
|
Provision for income
taxes
|
27.4
|
|
|
28.8
|
|
|
41.4
|
|
|
42.4
|
|
Income from
continuing operations
|
100.6
|
|
|
111.0
|
|
|
113.1
|
|
|
180.4
|
|
Discontinued
Operations:
|
|
|
|
|
|
|
|
Loss from discontinued
operations before income taxes
|
(0.8)
|
|
|
(0.3)
|
|
|
(0.8)
|
|
|
(0.4)
|
|
Income tax
benefit
|
(0.2)
|
|
|
—
|
|
|
(0.6)
|
|
|
—
|
|
Loss from discontinued
operations
|
(0.6)
|
|
|
(0.3)
|
|
|
(0.2)
|
|
|
(0.4)
|
|
Net
income
|
$
|
100.0
|
|
|
$
|
110.7
|
|
|
$
|
112.9
|
|
|
$
|
180.0
|
|
|
|
|
|
|
|
|
|
Earnings per
share – Basic:
|
|
|
|
|
|
|
|
Income from continuing
operations
|
$
|
2.63
|
|
|
$
|
2.84
|
|
|
$
|
2.95
|
|
|
$
|
4.58
|
|
Loss from discontinued
operations
|
(0.01)
|
|
|
(0.01)
|
|
|
—
|
|
|
(0.01)
|
|
Net income
|
$
|
2.62
|
|
|
$
|
2.83
|
|
|
$
|
2.95
|
|
|
$
|
4.57
|
|
Earnings per
share – Diluted:
|
|
|
|
|
|
|
|
Income from continuing
operations
|
$
|
2.62
|
|
|
$
|
2.81
|
|
|
$
|
2.93
|
|
|
$
|
4.53
|
|
Loss from discontinued
operations
|
(0.02)
|
|
|
(0.01)
|
|
|
—
|
|
|
(0.01)
|
|
Net income
|
$
|
2.60
|
|
|
$
|
2.80
|
|
|
$
|
2.93
|
|
|
$
|
4.52
|
|
|
|
|
|
|
|
|
|
Weighted Average
Number of Shares Outstanding - Basic
|
38.2
|
|
|
39.1
|
|
|
38.3
|
|
|
39.4
|
|
Weighted Average
Number of Shares Outstanding - Diluted
|
38.4
|
|
|
39.5
|
|
|
38.6
|
|
|
39.8
|
|
LENNOX
INTERNATIONAL INC. AND SUBSIDIARIES
|
Adjusted Segment
Net Sales and Profit (Loss)
|
(Unaudited)
|
|
(Amounts in
millions)
|
For the Three
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Adjusted Net
Sales
|
|
|
|
|
|
|
|
Residential
Heating & Cooling
|
$
|
644.8
|
|
|
$
|
689.1
|
|
|
$
|
1,086.9
|
|
|
$
|
1,154.6
|
|
Commercial
Heating & Cooling
|
188.3
|
|
|
261.3
|
|
|
366.7
|
|
|
434.7
|
|
Refrigeration
(1)
|
108.2
|
|
|
148.7
|
|
|
$
|
211.5
|
|
|
265.8
|
|
|
$
|
941.3
|
|
|
$
|
1,099.1
|
|
|
$
|
1,665.1
|
|
|
$
|
1,855.1
|
|
Adjusted Segment
Profit (Loss) (2)
|
|
|
|
|
|
|
|
Residential
Heating & Cooling
|
$
|
127.3
|
|
|
$
|
153.4
|
|
|
$
|
159.8
|
|
|
$
|
240.1
|
|
Commercial
Heating & Cooling
|
35.6
|
|
|
53.9
|
|
|
54.3
|
|
|
68.9
|
|
Refrigeration
(1)
|
8.9
|
|
|
19.1
|
|
|
9.6
|
|
|
28.5
|
|
Corporate and
other
|
(18.8)
|
|
|
(24.1)
|
|
|
(33.1)
|
|
|
(36.2)
|
|
Total adjusted segment
profit
|
153.0
|
|
|
202.3
|
|
|
190.6
|
|
|
301.3
|
|
Reconciliation to
Operating Income:
|
|
|
|
|
|
|
|
Special product
quality adjustments
|
(1.0)
|
|
|
(0.5)
|
|
|
(1.0)
|
|
|
(0.5)
|
|
Loss on sale of
business
|
—
|
|
|
0.4
|
|
|
—
|
|
|
8.8
|
|
Partial advance of
insurance recoveries related to lost profits
|
—
|
|
|
(8.0)
|
|
|
—
|
|
|
(8.0)
|
|
Loss (gain) from
natural disaster, net of insurance recoveries
|
1.0
|
|
|
(5.9)
|
|
|
2.7
|
|
|
(12.8)
|
|
Items in losses
(gains) and other expenses, net that are excluded from segment
profit (loss) (2)
|
7.0
|
|
|
2.6
|
|
|
6.1
|
|
|
3.9
|
|
Restructuring
charges
|
10.0
|
|
|
(0.1)
|
|
|
10.5
|
|
|
0.4
|
|
Operating loss from
non-core business (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
Operating
income
|
$
|
136.0
|
|
|
$
|
213.8
|
|
|
$
|
172.3
|
|
|
$
|
308.5
|
|
|
|
(1)
|
Excludes the non-core
business results related to Kysor Warren, which was sold in March
2019.
|
(2)
|
We define segment
profit (loss) as a segment's operating income included in the
accompanying Consolidated Statements of Operations,
excluding:
|
|
• The following items
in Losses (gains) and other expenses, net:
|
|
|
º Net change in
unrealized losses (gains) on unsettled futures
contracts,
|
|
|
º Special legal
contingency charges,
|
|
|
º Asbestos-related litigation,
|
|
|
º Environmental
liabilities,
|
|
|
º Charges
incurred related to COVID-19 pandemic,
|
|
|
º Other items,
net
|
|
• Loss on sale of
business,
|
|
• Special product
quality adjustments,
|
|
• Partial advance of
insurance recoveries related to lost profits,
|
|
• Loss (gain) from
natural disaster, net of insurance recoveries,
|
|
• Operating loss
(income) from non-core businesses; and
|
|
• Restructuring
charges.
|
LENNOX
INTERNATIONAL INC. AND SUBSIDIARIES
|
Consolidated
Balance Sheets
|
|
|
|
(Amounts in
millions, except shares and par values)
|
As of June 30,
2020
|
|
As of December
31,
2019
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
44.8
|
|
|
$
|
37.3
|
|
Short-term
investments
|
3.8
|
|
|
2.9
|
|
Accounts and notes
receivable, net of allowances of $7.2 and $6.1 in 2020 and 2019,
respectively
|
624.2
|
|
|
477.8
|
|
Inventories,
net
|
499.7
|
|
|
544.1
|
|
Other
assets
|
54.4
|
|
|
58.8
|
|
Total current
assets
|
1,226.9
|
|
|
1,120.9
|
|
Property, plant and
equipment, net of accumulated depreciation of $848.5 and $824.3 in
2020 and 2019, respectively
|
441.2
|
|
|
445.4
|
|
Right-of-use assets
from operating leases
|
177.1
|
|
|
181.6
|
|
Goodwill
|
186.5
|
|
|
186.5
|
|
Deferred income
taxes
|
15.5
|
|
|
21.5
|
|
Other assets,
net
|
77.1
|
|
|
79.0
|
|
Total
assets
|
$
|
2,124.3
|
|
|
$
|
2,034.9
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
|
|
|
Current
Liabilities:
|
|
|
|
Current maturities of
long-term debt
|
343.6
|
|
|
321.9
|
|
Current operating
lease liabilities
|
52.0
|
|
|
52.7
|
|
Accounts
payable
|
295.0
|
|
|
372.4
|
|
Accrued
expenses
|
251.0
|
|
|
255.7
|
|
Income taxes
payable
|
4.6
|
|
|
—
|
|
Total current
liabilities
|
946.2
|
|
|
1,002.7
|
|
Long-term
debt
|
1,047.2
|
|
|
849.3
|
|
Long-term operating
lease liabilities
|
127.9
|
|
|
131.0
|
|
Pensions
|
91.8
|
|
|
87.4
|
|
Other
liabilities
|
140.1
|
|
|
134.7
|
|
Total
liabilities
|
2,353.2
|
|
|
2,205.1
|
|
Commitments and
contingencies
|
|
|
|
Stockholders'
deficit:
|
|
|
|
Preferred stock, $0.01
par value, 25,000,000 shares authorized, no shares issued or
outstanding
|
—
|
|
|
—
|
|
Common stock, $0.01
par value, 200,000,000 shares authorized, 87,170,197 shares
issued
|
0.9
|
|
|
0.9
|
|
Additional paid-in
capital
|
1,102.4
|
|
|
1,093.5
|
|
Retained
earnings
|
2,201.5
|
|
|
2,148.7
|
|
Accumulated other
comprehensive loss
|
(121.7)
|
|
|
(103.8)
|
|
Treasury stock, at
cost, 48,919,279 shares and 48,575,901 shares for 2020 and 2019,
respectively
|
(3,412.0)
|
|
|
(3,309.5)
|
|
Total
stockholders' deficit
|
(228.9)
|
|
|
(170.2)
|
|
Total liabilities
and stockholders' deficit
|
$
|
2,124.3
|
|
|
$
|
2,034.9
|
|
LENNOX
INTERNATIONAL INC. AND SUBSIDIARIES
|
Consolidated
Statements of Cash Flows
|
(Unaudited)
|
|
(Amounts in
millions)
|
For the Six Months
Ended
June 30,
|
|
2020
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
112.9
|
|
|
$
|
180.0
|
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
|
Loss on sale of
business
|
—
|
|
|
8.8
|
|
Insurance recoveries
received for property damage incurred from natural
disaster
|
—
|
|
|
(12.8)
|
|
Income from equity
method investments
|
(7.2)
|
|
|
(7.2)
|
|
Dividends from
affiliates
|
2.5
|
|
|
2.0
|
|
Restructuring charges,
net of cash paid
|
5.9
|
|
|
(0.2)
|
|
Provision for bad
debts
|
3.1
|
|
|
2.2
|
|
Unrealized losses
(gains), net on derivative contracts
|
1.1
|
|
|
(0.2)
|
|
Stock-based
compensation expense
|
10.4
|
|
|
11.4
|
|
Depreciation and
amortization
|
37.9
|
|
|
34.9
|
|
Deferred income
taxes
|
6.6
|
|
|
15.7
|
|
Pension
expense
|
4.9
|
|
|
64.2
|
|
Pension
contributions
|
(1.2)
|
|
|
(1.0)
|
|
Other items,
net
|
0.7
|
|
|
(0.1)
|
|
Changes in assets and
liabilities, net of effects of divestitures:
|
|
|
|
Accounts and notes
receivable
|
(151.5)
|
|
|
(270.0)
|
|
Inventories
|
43.1
|
|
|
(149.9)
|
|
Other current
assets
|
(1.1)
|
|
|
10.2
|
|
Accounts
payable
|
(66.2)
|
|
|
52.6
|
|
Accrued
expenses
|
(11.9)
|
|
|
(21.0)
|
|
Income taxes payable /
receivable
|
10.2
|
|
|
(11.5)
|
|
Other, net
|
6.3
|
|
|
(19.1)
|
|
Net cash provided
by (used in) operating activities
|
6.5
|
|
|
(111.0)
|
|
Cash flows from
investing activities:
|
|
|
|
Proceeds from the
disposal of property, plant and equipment
|
0.3
|
|
|
0.8
|
|
Purchases of property,
plant and equipment
|
(43.5)
|
|
|
(53.5)
|
|
Net proceeds from sale
of business
|
—
|
|
|
43.6
|
|
Purchases of
short-term investments
|
(1.1)
|
|
|
(1.8)
|
|
Insurance recoveries
received for property damage incurred from natural
disaster
|
—
|
|
|
12.8
|
|
Net cash (used in)
provided by investing activities
|
(44.3)
|
|
|
1.9
|
|
Cash flows from
financing activities:
|
|
|
|
Short-term debt
payments
|
(1.9)
|
|
|
(2.1)
|
|
Short-term debt
proceeds
|
1.9
|
|
|
2.1
|
|
Asset securitization
borrowings
|
91.0
|
|
|
65.5
|
|
Asset securitization
payments
|
(70.0)
|
|
|
(43.5)
|
|
Long-term debt
payments
|
(2.6)
|
|
|
(33.3)
|
|
Long-term debt
borrowings
|
—
|
|
|
—
|
|
Borrowings from credit
facility
|
1,060.5
|
|
|
1,459.5
|
|
Payments on credit
facility
|
(863.5)
|
|
|
(1,037.5)
|
|
Proceeds from employee
stock purchases
|
1.6
|
|
|
1.6
|
|
Repurchases of common
stock
|
(100.0)
|
|
|
(250.0)
|
|
Repurchases of common
stock to satisfy employee withholding tax obligations
|
(5.6)
|
|
|
(14.5)
|
|
Cash dividends
paid
|
(59.1)
|
|
|
(50.8)
|
|
Net cash provided
by financing activities
|
52.3
|
|
|
97.0
|
|
Increase (decrease)
in cash and cash equivalents
|
14.5
|
|
|
(12.1)
|
|
Effect of exchange
rates on cash and cash equivalents
|
(7.0)
|
|
|
2.2
|
|
Cash and cash
equivalents, beginning of period
|
37.3
|
|
|
46.3
|
|
Cash and cash
equivalents, end of period
|
$
|
44.8
|
|
|
$
|
36.4
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
Interest
paid
|
$
|
16.9
|
|
|
$
|
23.5
|
|
Income taxes paid (net
of refunds)
|
$
|
22.8
|
|
|
$
|
54.2
|
|
Insurance recoveries
received
|
$
|
—
|
|
|
$
|
128.0
|
|
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 if different than the
reported measures. 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. During the first quarter of 2019, the
Company completed the sale of its Kysor Warren business. The
results from operations for this business have been shown in the
tables below as "Non-core business results".
|
|
Reconciliation of
Income from Continuing Operations, a GAAP measure, to Adjusted
Income from Continuing Operations, a Non-GAAP
measure
|
|
|
For the Three
Months Ended June 30,
|
|
(Unaudited)
|
|
2020
|
|
2019
|
|
Pre-Tax
|
Tax Impact
(e)
|
After
Tax
|
|
Pre-Tax
|
Tax Impact
(e)
|
After
Tax
|
Income from
continuing operations, a GAAP measure
|
$
|
128.0
|
|
$
|
(27.4)
|
|
$
|
100.6
|
|
|
$
|
139.8
|
|
$
|
(28.8)
|
|
$
|
111.0
|
|
Restructuring
charges
|
10.0
|
|
(2.1)
|
|
7.9
|
|
|
(0.1)
|
|
—
|
|
(0.1)
|
|
Pension
settlement
|
—
|
|
—
|
|
—
|
|
|
60.6
|
|
(15.1)
|
|
45.5
|
|
Special product
quality adjustments (b)
|
(1.0)
|
|
0.2
|
|
(0.8)
|
|
|
(0.5)
|
|
0.1
|
|
(0.4)
|
|
Special legal
contingency charges (a)
|
0.7
|
|
(0.1)
|
|
0.6
|
|
|
(0.1)
|
|
—
|
|
(0.1)
|
|
Asbestos-related
litigation (a)
|
1.2
|
|
(0.3)
|
|
0.9
|
|
|
0.4
|
|
(0.1)
|
|
0.3
|
|
Net change in
unrealized losses on unsettled futures contracts (a)
|
0.8
|
|
(0.1)
|
|
0.7
|
|
|
0.1
|
|
—
|
|
0.1
|
|
Environmental
liabilities (a)
|
1.1
|
|
(0.2)
|
|
0.9
|
|
|
1.3
|
|
(0.3)
|
|
1.0
|
|
Excess tax benefits
from share-based compensation (c)
|
—
|
|
(0.1)
|
|
(0.1)
|
|
|
—
|
|
(1.0)
|
|
(1.0)
|
|
Other tax items, net
(c)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
0.6
|
|
0.6
|
|
Loss on sale of
business
|
—
|
|
—
|
|
—
|
|
|
0.4
|
|
(0.1)
|
|
0.3
|
|
Charges incurred
related to COVID-19 pandemic (a)
|
3.4
|
|
(0.8)
|
|
2.6
|
|
|
—
|
|
—
|
|
—
|
|
Partial advance of
insurance recoveries related to lost profits (f)
|
—
|
|
—
|
|
—
|
|
|
(8.0)
|
|
2.3
|
|
(5.7)
|
|
Loss (gain) from
natural disaster, net of insurance recoveries
|
1.0
|
|
(0.2)
|
|
0.8
|
|
|
(5.9)
|
|
1.2
|
|
(4.7)
|
|
Other items, net
(a)
|
(0.2)
|
|
0.1
|
|
(0.1)
|
|
|
0.9
|
|
(0.1)
|
|
0.8
|
|
Adjusted income
from continuing operations, a non-GAAP measure
|
$
|
145.0
|
|
$
|
(31.0)
|
|
$
|
114.0
|
|
|
$
|
188.9
|
|
$
|
(41.3)
|
|
$
|
147.6
|
|
|
|
|
|
|
|
|
|
Earnings per share
from continuing operations - diluted, a GAAP measure
|
|
|
$
|
2.62
|
|
|
|
|
$
|
2.81
|
|
Restructuring
charges
|
|
|
0.21
|
|
|
|
|
—
|
|
Pension
settlement
|
|
|
—
|
|
|
|
|
1.14
|
|
Special product
quality adjustments (b)
|
|
|
(0.02)
|
|
|
|
|
(0.01)
|
|
Special legal
contingency charges (a)
|
|
|
0.01
|
|
|
|
|
—
|
|
Asbestos-related
litigation (a)
|
|
|
0.02
|
|
|
|
|
0.01
|
|
Net change in
unrealized losses on unsettled futures contracts (a)
|
|
|
0.02
|
|
|
|
|
—
|
|
Environmental
liabilities (a)
|
|
|
0.02
|
|
|
|
|
0.03
|
|
Excess tax benefits
from share-based compensation (c)
|
|
|
—
|
|
|
|
|
(0.03)
|
|
Other tax items, net
(c)
|
|
|
—
|
|
|
|
|
0.02
|
|
Loss on sale of
business
|
|
|
—
|
|
|
|
|
0.01
|
|
Charges incurred
related to COVID-19 pandemic (a)
|
|
|
0.07
|
|
|
|
|
—
|
|
Partial advance of
insurance recoveries related to lost profits (f)
|
|
|
—
|
|
|
|
|
(0.14)
|
|
Loss (gain) from
natural disaster, net of insurance recoveries
|
|
|
0.02
|
|
|
|
|
(0.13)
|
|
Other items, net
(a)
|
|
|
—
|
|
|
|
|
0.02
|
|
Change in share counts
from share-based compensation (d)
|
|
|
—
|
|
|
|
|
0.01
|
|
Adjusted earnings
per share from continuing operations - diluted, a non-GAAP
measure
|
|
|
$
|
2.97
|
|
|
|
|
$
|
3.74
|
|
|
(a) Recorded in
(Gains) losses and other expenses, net in the Consolidated
Statements of Operations
|
(b) Recorded in Cost
of goods sold in the Consolidated Statements of
Operations
|
|
|
(c) Recorded in
Provision for income taxes in the Consolidated Statements of
Operations
|
|
(d) The impact of
excess tax benefits from the change in share-based compensation
also impacts the Company's diluted share counts. The
reconciliation of average outstanding diluted shares on a GAAP and
non-GAAP basis is included in this amount..
|
(e) Tax impact based
on the applicable tax rate relevant to the location and nature of
the adjustment.
|
(f) Recorded in
Insurance proceeds for lost profits in the Consolidated Statement
of Operations.
|
|
|
|
For the Six Months
Ended June 30,
|
|
(Unaudited)
|
|
2020
|
|
2019
|
|
Pre-Tax
|
Tax
Impact
(e)
|
After
Tax
|
|
Pre-Tax
|
Tax
Impact
(e)
|
After
Tax
|
Income from
continuing operations, a GAAP measure
|
$
|
154.5
|
|
$
|
(41.4)
|
|
$
|
113.1
|
|
|
$
|
222.8
|
|
$
|
(42.4)
|
|
$
|
180.4
|
|
Restructuring
charges
|
10.5
|
|
(2.2)
|
|
8.3
|
|
|
0.4
|
|
(0.1)
|
|
0.3
|
|
Pension
settlement
|
—
|
|
—
|
|
—
|
|
|
60.6
|
|
(15.1)
|
|
45.5
|
|
Special product
quality adjustments (b)
|
(1.0)
|
|
0.2
|
|
(0.8)
|
|
|
(0.5)
|
|
0.1
|
|
(0.4)
|
|
Special legal
contingency charges (a)
|
0.7
|
|
(0.1)
|
|
0.6
|
|
|
0.2
|
|
(0.1)
|
|
0.1
|
|
Asbestos-related
litigation (a)
|
(0.5)
|
|
0.1
|
|
(0.4)
|
|
|
1.8
|
|
(0.4)
|
|
1.4
|
|
Net change in
unrealized losses (gains) on unsettled futures contracts
(a)
|
1.4
|
|
(0.3)
|
|
1.1
|
|
|
(0.3)
|
|
0.1
|
|
(0.2)
|
|
Environmental
liabilities (a)
|
1.3
|
|
(0.3)
|
|
1.0
|
|
|
1.3
|
|
(0.3)
|
|
1.0
|
|
Excess tax benefits
from share-based compensation (c)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(5.3)
|
|
(5.3)
|
|
Other tax items, net
(c)
|
—
|
|
8.1
|
|
8.1
|
|
|
—
|
|
0.6
|
|
0.6
|
|
Loss on sale of
business
|
—
|
|
—
|
|
—
|
|
|
8.8
|
|
(3.5)
|
|
5.3
|
|
Charges incurred
related to COVID-19 pandemic (a)
|
3.4
|
|
(0.8)
|
|
2.6
|
|
|
—
|
|
—
|
|
—
|
|
Partial advance of
insurance recoveries related to lost profits (f)
|
—
|
|
—
|
|
—
|
|
|
(8.0)
|
|
2.3
|
|
(5.7)
|
|
Loss (gain) from
natural disaster, net of insurance recoveries
|
2.7
|
|
(0.6)
|
|
2.1
|
|
|
(12.8)
|
|
2.9
|
|
(9.9)
|
|
Other items, net
(a)
|
(0.2)
|
|
0.1
|
|
(0.1)
|
|
|
0.9
|
|
(0.2)
|
|
0.7
|
|
Non-core business
results (g)
|
—
|
|
—
|
|
—
|
|
|
1.3
|
|
(0.3)
|
|
1.0
|
|
Adjusted income
from continuing operations, a non-GAAP measure
|
$
|
172.8
|
|
$
|
(37.2)
|
|
$
|
135.6
|
|
|
$
|
276.5
|
|
$
|
(61.7)
|
|
$
|
214.8
|
|
|
|
|
|
|
|
|
|
Earnings per share
from continuing operations - diluted, a GAAP measure
|
|
|
$
|
2.93
|
|
|
|
|
$
|
4.53
|
|
Restructuring
charges
|
|
|
0.21
|
|
|
|
|
0.01
|
|
Pension
settlement
|
|
|
—
|
|
|
|
|
1.14
|
|
Special product
quality adjustments (b)
|
|
|
(0.02)
|
|
|
|
|
(0.01)
|
|
Special legal
contingency charges (a)
|
|
|
0.02
|
|
|
|
|
—
|
|
Asbestos-related
litigation (a)
|
|
|
(0.01)
|
|
|
|
|
0.04
|
|
Net change in
unrealized losses (gains) on unsettled futures contracts
(a)
|
|
|
0.03
|
|
|
|
|
(0.01)
|
|
Environmental
liabilities (a)
|
|
|
0.03
|
|
|
|
|
0.03
|
|
Excess tax benefits
from share-based compensation (c)
|
|
|
—
|
|
|
|
|
(0.13)
|
|
Other tax items, net
(c)
|
|
|
0.21
|
|
|
|
|
0.02
|
|
Loss on sale of
business
|
|
|
—
|
|
|
|
|
0.13
|
|
Charges incurred
related to COVID-19 pandemic (a)
|
|
|
0.07
|
|
|
|
|
—
|
|
Partial advance of
insurance recoveries related to lost profits (f)
|
|
|
—
|
|
|
|
|
(0.14)
|
|
Loss (gain) from
natural disaster, net of insurance recoveries
|
|
|
0.05
|
|
|
|
|
(0.26)
|
|
Other items, net
(a)
|
|
|
—
|
|
|
|
|
0.02
|
|
Non-core business
results (g)
|
|
|
—
|
|
|
|
|
0.03
|
|
Change in share counts
from share-based compensation (d)
|
|
|
—
|
|
|
|
|
0.01
|
|
Adjusted earnings
per share from continuing operations - diluted, a non-GAAP
measure
|
|
|
$
|
3.52
|
|
|
|
|
$
|
5.41
|
|
|
(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
|
|
|
(c) Recorded in
Provision for income taxes in the Consolidated Statements of
Operations
|
|
(d) The impact of
excess tax benefits from the change in share-based compensation
also impacts the Company's diluted share counts. The
reconciliation of average outstanding diluted shares on a GAAP and
non-GAAP basis is included in this document.
|
(e) Tax impact based
on the applicable tax rate relevant to the location and nature of
the adjustment.
|
(f) Recorded in
Insurance proceeds for lost profits in the Consolidated Statement
of Operations.
|
(g) Non-core business
results represent Kysor Warren business, not included elsewhere in
the reconciliation.
|
|
For the Three
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Components of
Losses (gains) and other expenses, net
(pre-tax):
|
|
|
|
|
|
|
|
Realized losses on
settled future contracts (a)
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
Foreign currency
exchange gains (a)
|
(2.1)
|
|
|
(0.2)
|
|
|
(2.6)
|
|
|
(0.7)
|
|
Gain on disposal of
fixed assets (a)
|
(0.2)
|
|
|
(0.4)
|
|
|
(0.1)
|
|
|
(0.2)
|
|
Other operating
income (a)
|
(1.2)
|
|
|
—
|
|
|
(1.3)
|
|
|
—
|
|
Net change in
unrealized losses (gains) on unsettled futures contracts
(b)
|
0.8
|
|
|
0.1
|
|
|
1.4
|
|
|
(0.3)
|
|
Special legal
contingency charges (b)
|
0.7
|
|
|
(0.1)
|
|
|
0.7
|
|
|
0.2
|
|
Asbestos-related
litigation (b)
|
1.2
|
|
|
0.4
|
|
|
(0.5)
|
|
|
1.8
|
|
Environmental
liabilities (b)
|
1.1
|
|
|
1.3
|
|
|
1.3
|
|
|
1.3
|
|
Charges incurred
related to COVID-19 pandemic (b)
|
3.4
|
|
|
—
|
|
|
3.4
|
|
|
—
|
|
Other items, net
(b)
|
(0.2)
|
|
|
0.9
|
|
|
(0.2)
|
|
|
0.9
|
|
Losses (gains) and
other expenses, net (pre-tax)
|
$
|
3.6
|
|
|
$
|
2.1
|
|
|
$
|
2.3
|
|
|
$
|
3.2
|
|
|
(a) Included in both
segment profit (loss) and Adjusted income from continuing
operations
|
(b) Excluded from
both segment profit (loss) and Adjusted income from continuing
operations
|
Reconciliation of
Earnings per Share from Continuing Operations - Diluted, a GAAP
measure, to Estimated
Adjusted Earnings per Share from Continuing Operations - Diluted, a
Non-GAAP measure
|
|
|
|
|
|
|
For the Year
Ended
December 31, 2020
ESTIMATED
|
Earnings per share
from continuing operations - diluted, a GAAP measure
|
|
$7.31 -
$8.11
|
Other non-core EBIT
charges and other non-core tax items, net, incurred in 1Q 2020 and
2Q 2020
|
|
(0.59)
|
Adjusted
Earnings per share from continuing operations - diluted, a Non-GAAP
measure
|
|
$7.90 -
$8.70
|
Reconciliation of
Average Shares Outstanding - Diluted, a GAAP measure, to Adjusted
Average Shares Outstanding - Diluted, a Non-GAAP measure (shares in
millions):
|
|
|
For the Three
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Average shares
outstanding - diluted, a GAAP measure
|
38.4
|
|
|
$
|
39.5
|
|
|
38.6
|
|
|
$
|
39.8
|
|
Impact on diluted
shares from excess tax benefits from share-based
compensation
|
—
|
|
|
(0.1)
|
|
|
(0.1)
|
|
|
(0.1)
|
|
Adjusted average
shares outstanding - diluted, a Non-GAAP measure
|
38.4
|
|
|
39.4
|
|
|
38.5
|
|
|
39.7
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Sales, a GAAP measure, to Adjusted Net Sales, a Non-GAAP
measure (dollars in millions)
|
|
|
Refrigeration
Segment
|
|
Consolidated
|
|
For the Three
Months
Ended June 30,
|
|
For the Three
Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net sales, a GAAP
measure
|
$
|
108.2
|
|
|
$
|
148.7
|
|
|
$
|
941.3
|
|
|
$
|
1,099.1
|
|
Net sales from
non-core business
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjusted net
sales, a Non-GAAP measure
|
$
|
108.2
|
|
|
$
|
148.7
|
|
|
$
|
941.3
|
|
|
$
|
1,099.1
|
|
|
|
|
|
|
|
|
Refrigeration
Segment
|
|
Consolidated
|
|
For the Six
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net sales, a GAAP
measure
|
$
|
211.5
|
|
|
$
|
300.1
|
|
|
$
|
1,665.1
|
|
|
$
|
1,889.4
|
|
Net sales from
non-core business (a)
|
—
|
|
|
34.3
|
|
|
—
|
|
|
34.3
|
|
Adjusted net
sales, a Non-GAAP measure
|
$
|
211.5
|
|
|
$
|
265.8
|
|
|
$
|
1,665.1
|
|
|
$
|
1,855.1
|
|
(a) Non-Core
businesses represent the Kysor Warren business.
|
|
|
|
|
|
Reconciliation of
Gross Profit, a GAAP measure, to Adjusted Gross Profit, a Non-GAAP
measure (dollars in millions)
|
|
|
Refrigeration
Segment
|
|
Consolidated
|
|
For the Three
Months
Ended June 30,
|
|
For the Three
Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Gross profit, a
GAAP measure
|
$
|
32.2
|
|
|
$
|
45.7
|
|
|
$
|
275.7
|
|
|
$
|
332.1
|
|
Non-GAAP adjustments
to gross profit
|
—
|
|
|
—
|
|
|
1.0
|
|
|
0.5
|
|
Adjusted Gross
profit, a Non-GAAP measure
|
$
|
32.2
|
|
|
$
|
45.7
|
|
|
$
|
274.7
|
|
|
$
|
331.6
|
|
|
|
|
|
|
|
|
Refrigeration
Segment
|
|
Consolidated
|
|
For the Six
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Gross profit, a
GAAP measure
|
$
|
59.6
|
|
|
$
|
88.3
|
|
|
$
|
441.4
|
|
|
$
|
533.6
|
|
Non-GAAP adjustments
to gross profit
|
—
|
|
|
—
|
|
|
1.0
|
|
|
0.5
|
|
Gross profit from
non-core business (a)
|
—
|
|
|
3.6
|
|
|
—
|
|
|
3.6
|
|
Adjusted Gross
profit, a Non-GAAP measure
|
$
|
59.6
|
|
|
$
|
84.7
|
|
|
$
|
440.4
|
|
|
$
|
529.5
|
|
(a) Non-Core
businesses represent the Kysor Warren business.
|
|
|
|
|
|
Reconciliation
of Segment Profit, a GAAP measure, to Adjusted
Segment profit, a Non-GAAP measure (dollars in
millions)
|
|
|
Refrigeration
Segment
|
|
Consolidated
|
|
For the Three
Months
Ended June 30,
|
|
For the Three
Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Segment
profit, a Non-GAAP measure
|
$
|
8.9
|
|
|
$
|
19.1
|
|
|
$
|
153.0
|
|
|
$
|
202.3
|
|
(Loss) profit from
non-core business
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjusted
Segment profit, a Non-GAAP measure
|
$
|
8.9
|
|
|
$
|
19.1
|
|
|
$
|
153.0
|
|
|
$
|
202.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refrigeration
Segment
|
|
Consolidated
|
|
For the Six
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Segment
profit, a Non-GAAP measure
|
$
|
9.6
|
|
|
$
|
27.5
|
|
|
$
|
190.6
|
|
|
$
|
300.3
|
|
(Loss) profit from
non-core business (a)
|
—
|
|
|
(1.0)
|
|
|
—
|
|
|
(1.0)
|
|
Adjusted
Segment profit, a Non-GAAP measure
|
$
|
9.6
|
|
|
$
|
28.5
|
|
|
$
|
190.6
|
|
|
$
|
301.3
|
|
(a) Non-Core
businesses represent the Kysor Warren business.
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Selling, general and administrative expenses, a GAAP measure, to
Adjusted Selling, general and administrative expenses, a Non-GAAP
measure (dollars in millions)
|
|
|
Refrigeration
Segment
|
|
Consolidated
|
|
For the Three
Months
Ended June 30,
|
|
For the Three
Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Selling, general
and administrative expenses, a GAAP measure
|
$
|
25.3
|
|
|
$
|
29.5
|
|
|
$
|
129.5
|
|
|
$
|
152.4
|
|
Selling, general and
administrative expenses from non-core business
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adjusted Selling,
general and administrative expenses, a Non-GAAP
measure
|
$
|
25.3
|
|
|
$
|
29.5
|
|
|
$
|
129.5
|
|
|
$
|
152.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refrigeration
Segment
|
|
Consolidated
|
|
For the Six
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Selling, general
and administrative expenses, a GAAP measure
|
$
|
53.6
|
|
|
$
|
65.9
|
|
|
$
|
260.8
|
|
|
$
|
298.2
|
|
Selling, general and
administrative expenses from non-core business (a)
|
—
|
|
|
4.6
|
|
|
—
|
|
|
4.6
|
|
Adjusted Selling,
general and administrative expenses, a Non-GAAP
measure
|
$
|
53.6
|
|
|
$
|
61.3
|
|
|
$
|
260.8
|
|
|
$
|
293.6
|
|
(a) Non-Core
businesses represent the Kysor Warren business.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Cash Provided by (Used in) Operating Activities, a GAAP
measure, to Free Cash Flow, a Non-GAAP measure (dollars in
millions)
|
|
|
For the Three
Months
Ended June 30,
|
|
For the Six
Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Net cash provided
by (used in) operating activities, a GAAP measure
|
$
|
105.3
|
|
|
$
|
30.0
|
|
|
$
|
6.5
|
|
|
$
|
(111.0)
|
|
Purchases of property,
plant and equipment
|
(18.8)
|
|
|
(16.3)
|
|
|
(43.5)
|
|
|
(53.5)
|
|
Proceeds from the
disposal of property, plant and equipment
|
0.2
|
|
|
0.5
|
|
|
0.3
|
|
|
0.8
|
|
Insurance recoveries
received for property damage incurred from natural
disaster
|
—
|
|
|
5.9
|
|
|
—
|
|
|
12.8
|
|
Free cash flow, a
Non-GAAP measure
|
86.7
|
|
|
20.1
|
|
|
(36.7)
|
|
|
(150.9)
|
|
|
|
|
|
|
|
|
|
Calculation of
Debt to EBITDA Ratio (dollars in millions):
|
|
|
|
|
|
|
|
Trailing
Twelve
Months to
June 30,
2020
|
|
Adjusted EBIT
(a)
|
|
|
|
|
|
|
$
|
499.2
|
|
Depreciation and
amortization expense (b)
|
|
|
|
|
|
|
73.1
|
|
EBITDA (a +
b)
|
|
|
|
|
|
|
$
|
572.3
|
|
Total debt at
June 30, 2020 (c)
|
|
|
|
|
|
|
$
|
1,390.8
|
|
Total Debt to
EBITDA ratio ((c / (a + b))
|
|
|
|
|
|
|
2.4
|
|
|
|
|
|
|
|
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
June 30,
2020
|
|
Income from
continuing operations before income taxes, a GAAP
measure
|
$
|
439.6
|
|
Items in (Gains)
losses and other expenses, net that are excluded from segment
profit
|
13.6
|
|
Special product
quality adjustments
|
(1.2)
|
|
Restructuring
charges
|
20.4
|
|
Interest expense,
net
|
39.2
|
|
Pension
settlements
|
99.2
|
|
Loss on sale of
business
|
1.7
|
|
Insurance recoveries
received for property damage incurred from natural
disaster
|
(56.1)
|
|
Other expense
(income), net
|
(57.2)
|
|
Adjusted EBIT per
above, a Non-GAAP measure
|
$
|
499.2
|
|
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SOURCE Lennox International Inc.