Lennox ready to offer IPO to pay debt, buy dealerships
On April 6, the company filed with the Securities and Exchange Commission (SEC) to offer com- pany stock on the New York Stock Exchange. The company recorded $1.82 billion in sales last year.
Taking the company public has been expected for several years. Lennox chairman John Norris Jr. told his employees in 1995 that going to Wall Street was in the cards. The Lennox board approved the idea in principle.
At that time, Norris told The News that the action would be taken “in our own time and on our schedule.” He also said that the family shareholders would continue to keep strong control over the company’s future.
He denied that going public reflected any financial trouble, citing the company’s “very strong balance sheet.” One consideration for going public was in response to tax laws governing family ownership of businesses, he said, and to give Lennox investors more freedom in selling stock.
In recent years, the company has expanded its overseas trade, and has strengthened its Heatcraft unit, which manufactures a wide variety of heat transfer products to other equipment manufacturers. The News estimates that Lennox has about a 10% share of the residential-light commercial heating and air conditioning market.
Lennox joins other hvac manufacturers whose stock is publicly traded. Carrier is a unit of United Technologies, and Trane is a unit of American-Standard. York International Corp. and International Comfort Products are stand-alone companies that are publicly traded. Rheem Manufacturing, Nordyne, and Goodman Manufacturing are privately held.
In its SEC filing, Lennox provided a glimpse into its financial condition, which had traditionally been closely guarded.
The past three years of sales grew from $1.36 billion in 1996 to $1.44 billion in 1997 to $1.82 billion last year.
After a net profit of $54.7 million in 1996, Lennox lost $33.6 million in 1997, mainly due to a pretax charge of $140 million to pay the cost of a national retrofit program for its “Pulse” high-efficiency furnaces. Last year’s net profit was $52.5 million.
The company successfully defended itself in a $1 billion wrongful death lawsuit last year.
Lennox spokesman Bill Moltner stressed that the SEC filing merely permits a public offering but doesn’t guarantee that it will occur. If the IPO goes forward, Lennox will be traded under the symbol LII.
Moltner declined to say how many shares would be offered, only that the proceeds would be used in part to pay down debt, finance future expansion, and purchase more Lennox dealerships.