Lennox Reports First And Second Quarter Financial Results
In the first quarter, revenue from continuing operations was $664 million. The company reported a first quarter net loss of $195 million, or $3.27 per share, reflecting a $208 million pre-tax, or $185 million after-tax, goodwill impairment charge related to Service Experts, and a $20 million pre-tax charge, or $16 million after-tax, related to the disposal of Service Experts' discontinued operations. First quarter income from continuing operations before goodwill impairment was $7 million, or $0.11 per share.
In the second quarter, LII reported revenue of $805 million and income from continuing operations of $36 million, or $0.58 per share. Discontinued operations negatively impacted earnings by $4 million pre-tax, or $2 million after-tax, resulting in second quarter earnings per share of $0.54.
LII continued to lower its debt, with total debt at the end of the second quarter $73 million lower than the year-ago level. Total debt as of March 31, 2004, was $365 million and was reduced to $317 million as of June 30, 2004.
"We had a solid start to 2004, with revenue accelerating in the first half of the year, our manufacturing facilities operating efficiently, and performance improving at our international operations," said Bob Schjerven, CEO. "As we look ahead, we expect North American commercial market demand and our offshore operating performance will continue to improve at a moderate pace for the rest of the year, but based on weather patterns already experienced in the third quarter, our expectations for the residential market are considerably more conservative.
"Balancing our strong first half performance with this somewhat mixed outlook for demand, the projected impact of higher material costs in the second half of the year, and higher corporate expenses, including Sarbanes-Oxley compliance costs, we expect a full-year loss per share on continuing operations of $1.53 to $1.63, including the goodwill impairment charge taken in the first quarter. Excluding this charge, we anticipate full-year earnings per share from continuing operations, will be at the lower end of the $1.38 to $1.48 range previously provided."
The company also expects continued strength in cash flow generation, with cash flow from continuing operations less capital expenditures exceeding $75 million.
Publication date: 08/30/2004