Lennox International, Inc. (NYSE:LII) Q3 2019 Earnings Conference Call - Final Transcript

Oct 21, 2019 • 09:30 am ET


Lennox International, Inc. (NYSE:LII) Q3 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by. Welcome to the Lennox International Third Quarter 2019 Earnings Call. [Operator Instructions] There will be a question-and-answer session at the end of the presentation. [Operator Instructions]

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

Steve L. Harrison

Good morning. Thank you for joining us for this review of Lennox International's financial performance for the Third Quarter of 2019. 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. You can find a direct link to the webcast of today's conference call on our website at www.lennoxinternational.com. The webcast will be archived on the 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 risk 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.

Before I turn the call over to Todd, I would like to announce the date of our Annual Investment Community Meeting, the event will be held the morning of Wednesday, December 18, in New York City. Please mark your calendars, invitations in more details will follow. The meeting will also be webcast.

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

Todd M. Bluedorn

Thanks, Steve. Good morning, and thank you for joining us. Let me start with an overview on the third quarter. Our view on the rest of the year and provide some thoughts on 2020. For the Company overall in the third quarter, GAAP and adjusted revenue was $1.03 billion. GAAP revenue was up slightly, including 7% of headwind from the tornado and divestitures; 2% from the tornado and 5% from divestitures. Excluding the impact from divestitures, adjusted revenue was up 6%, including a 2% of negative impact from the tornado and set a new third quarter high. Foreign exchange was neutral to both GAAP and adjusted revenue.

GAAP operating income was $157 million, up 8%. GAAP EPS from continuing operations rose 11% to a third quarter record $2.94. On an adjusted basis, total segment profit was up 15% to a third quarter record $175 million and segment