Q4 2024 Lennox International Inc Earnings Call Transcript
Key Points
- Lennox International Inc (LII) achieved over $5 billion in revenue and over $1 billion in adjusted segment profit for the first time in 2024.
- The company reported a record adjusted earnings per share of $5.60 for the fourth quarter and $22.58 for the full year.
- LII's core revenue grew by 22% in the fourth quarter and 13% for the full year, with adjusted segment margin expanding by 250 basis points in Q4.
- The company successfully navigated the transition to low GWP refrigerants, which positively impacted revenue by $125 million.
- LII maintained a robust balance sheet with net debt to adjusted EBITDA at 0.6 times, down from 1.3 times in the prior year quarter.
- The prebuy of R-410A equipment is expected to create revenue headwinds in both Q1 and Q4 of 2025.
- Inflation is anticipated to increase costs by approximately 3%, impacting profit margins.
- The Building Climate Solutions segment experienced a decline in profit margin due to higher product costs related to new factory ramp-up activities.
- The company faces uncertainty in the market due to factors like interest rates, labor shortages, and potential tariffs.
- LII's Home Comfort Solutions segment is expected to have flat volume growth due to market uncertainties.
Please stand by your program is about to begin. If you need assistance during your conference today, please press star zero.
Welcome to the Lennox fourth-quarter and full year 2024 earnings conference call. (Operator Instructions) As a reminder, this call is being recorded.
I would now like to turn the conference over to Chelsey Pulcheon from the Lennox Investor Relations team. Chelsea, please go ahead.
Thank you, Angela. And good morning, everyone. Thank you for joining us today as we share our 2024 fourth-quarter and full year results. Joining me is CEO, Alok Maskara; and CFO, Michael Quenzer. Each will share their prepared remarks before we move to the Q&A session.
Turning to slide 2. A reminder that during today's call, we will be making certain forward-looking statements, which are subject to numerous risks and uncertainties as outlined on this page. We may also refer to certain non-GAAP financial measures that management considers relevant indicator of underlying business
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