Lennox International Inc. (NYSE: LII) today reported record revenue and profit results for the third quarter of 2017.

Q3 FINANCIAL HIGHLIGHTS

  • Revenue: UP 4% to a third-quarter record $1.052 billion. Foreign exchange was a 1 percentage point benefit to revenue growth. Volume and price were up. Mix was unfavorable in the quarter.
  • Gross Profit: UP 1% positively impacted by higher volume, favorable price, sourcing and engineering-led cost reductions, and foreign exchange, with offsets from higher commodity and other product costs, unfavorable mix, and investments in distribution expansion.
  • GAAP operating income: DOWN 1% to $155 million, down 1%
  • GAAP Earnings per Share from Continuing Operations: UP 5% to a third-quarter record $2.45.
  • Adjusted EPS from Continuing Operations: UP 9% to $2.53
  • Gross Margin: DOWN 90 basis points to 29.8%.
  • Income from Continuing Operations: UP 2.26% to $104.0 million, or $2.45 per share.
  • Adjusted Income from Continuing Operations: UP 4.9% to $106.9 million, or $2.53 per share which excludes net after-tax charges of $2.9 million: $1.3 million of special legal contingency charges, $1.1 million of restructuring charges, $1.0 million for asbestos-related litigation, a total of $1.0 million for other items, and a benefit of $1.5 million for excess tax benefits from share-based compensation.
  • Free Cash Flow and Total Debt:

    • Net cash from operations: UP 16.4% to $177 million
    • Capital expenditures: DOWN 5.6% to $17 million
    • Free cash flow: UP 19.4% to $160 million
    • Total debt was $1.124 billion.
    • Total cash and cash equivalents were $61 million

    • Dividend Payout & Stock Repurchases

    In the third quarter, the company paid approximately:

  • $22 million in dividends (YTD of $58 million) and
  • $75 million (YTD of $250 million) for stock repurchases.

    • 2017 Guidance Update

  • Updating 2017 revenue growth guidance from 4-7% with neutral foreign exchange to 5-7% with a 0.5% benefit from foreign exchange.
  • Updating 2017 GAAP EPS from continuing operations guidance from $7.73-$8.13 to $7.67-$7.97.
  • Updating 2017 adjusted EPS from continuing operations guidance from $7.75-$8.15 to $7.75-$8.05
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