Apr 23, 2018 • 09:30 am ET

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Lennox International First Quarter 2018 Earnings Conference Call. At the request of your host, all lines are in a listen-only mode. There will be a question-and-answer session at the end of the presentation. As a reminder, this call is being recorded.

I would now like to turn the conference over to Steve Harrison, Vice President of Investor Relations. Please go ahead.

Executive
Steve Harrison

Good morning. Thank you for joining us for this review of Lennox International's financial performance for the first quarter of 2018. I'm here today with Chairman and CEO, Todd Bluedorn; and CFO, Joe Reitmeier. Todd will review key points for the quarter and Joe will take you through the company's financial performance and outlook. To give everyone time to ask questions during the Q&A, please limit yourself to a couple of questions or follow-ups and re-queue for any additional questions.

In the earnings release we issued this morning, we have included the necessary reconciliation of the non-GAAP financial measures that will be discussed to GAAP measures. All comparisons mentioned today are against the prior-year period unless otherwise noted. You can find a direct link to the webcast of today's conference call on our website at www.lennoxinternational.com. The webcast also will be archived on that site for replay.

I would like to remind everyone that in the course of this call, to give you a better understanding of our operations, we will be making certain forward-looking statements. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from such statements. For information concerning these risks and uncertainties, see Lennox International's publicly available filings with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Now, let me turn the call over to Chairman and CEO, Todd Bluedorn.

Executive
Todd M. Bluedorn

Thanks, Steve. Good morning, everyone, and thanks for joining us. In first quarter of 2018 Lennox International posted strong revenue and profit growth. They set new first quarter highs for revenue, total segment margin and profit and adjusted EPS from continuing operations.

Revenue on a GAAP basis was a first quarter record $835 million, up 5% on an adjusted basis excluding non-core refrigeration businesses in Australia, Asia and South America that we are in the process of divesting as previously announced, revenue was up 6% to record $788 million. At constant currency revenue in both cases was up 4%.

On a GAAP basis operating income was $53 million in the first quarter including $13 million in pre-tax charges for the write-down of assets and divestiture of costs associated with Australia and Asia transaction.

GAAP EPS from continuing operations was $0.90 including $0.30 in charges for the write-down of assets and divestiture costs associated with Australia and Asia transaction.

On an adjusted basis total segment profit rose 12% to a first quarter record $69 million. Total segment margin expanded 50