Lennox International Inc. (NYSE: LII) is an American company. Through its subsidiaries, it is a provider of climate control products for the heating, ventilation, air conditioning, and refrigeration markets around the world. The company was founded in 1895 by Dave Lennox and today is focused on four core businesses: Residential Heating and Cooling, Commercial Heating and Cooling, Service Experts, and Refrigeration. The company headquarters are in Richardson, Texas, near Dallas.
Lennox International Inc. (LII) is a global provider of climate control solutions. The Company designs, manufactures and markets a range of products for the heating, ventilation, air conditioning and refrigeration (HVACR) markets. Its products and services are sold through multiple distribution channels under brand names, including Lennox, Armstrong Air, Ducane, Bohn, Larkin, Advanced Distributor Products, Service Experts and others. LII operates in four business segments: Residential Heating and Cooling, Commercial Heating and Cooling, Service Experts, and Refrigeration. The Company’s products and services are sold through a combination of distributors, independent and Company owned dealer service centers, other installing contractors, wholesalers, manufacturers’ representatives and original equipment manufacturers (OEMs) and to national accounts. In January 2011, the Company completed a transaction with The Manitowoc Company, Inc., by which LII acquired substantially all the assets of its Kysor/Warren business. Kysor/Warren is a manufacturer of refrigerated systems and display cases for supermarkets throughout North America.
Residential Heating and Cooling
LII manufactures and markets a range of furnaces, air conditioners, heat pumps, packaged heating and cooling systems, accessories to improve indoor air quality, replacement parts and related products for both the residential replacement and new construction markets in North America. These products are available in a variety of designs and efficiency levels. The Lennox and Aire-Flo brands are sold directly to a network of approximately 7,000 installing dealers. The Armstrong Air, Ducane, AirEase, Concord, Magic-Pak and Advanced Distributor Products brands are sold through independent distributors.
The Company's Advanced Distributor Products operation builds evaporator coils and air handlers under the Advanced Distributor Products brand, as well as the Lennox, Armstrong Air, AirEase, Concord and Ducane brands. Its hearth products include factory-built gas, wood-burning and electric fireplaces; free standing wood-burning, pellet and gas stoves; wood-burning, pellet and gas fireplace inserts; gas logs, venting products and accessories. Many of its fireplaces are built with a blower or fan option and are efficient heat sources, as well as attractive amenities to the home. As of December 31, 2010, it marketed its hearth products under the Lennox, Superior, Country Collection and Security Chimneys brand names.
The Company competes with United Technologies Corp., Goodman Global, Inc., Ingersoll-Rand plc, Paloma Co., Ltd., Johnson Controls, Inc., Daiken, Nordyne, HNI Corporation and Monessen Hearth Company.
Commercial Heating and Cooling
In North America, LII manufactures and sells unitary heating and cooling equipment used in light commercial applications, such as low-rise office buildings, restaurants, retail centers, churches and schools. Its product offerings for these applications include rooftop units ranging from 2 to 50 tons of cooling capacity and split system/air handler combinations, which range from 1.5 to 20 tons of cooling capacity. These products are distributed primarily through commercial contractors and directly to national account customers.
In Europe, it manufactures and sells unitary products, which range from 2 to 70 tons of cooling capacity, and applied systems with up to 200 tons of cooling capacity. Its European products consist of small package units, rooftop units, chillers, air handlers and fan coils that serve medium-rise commercial buildings, shopping malls, other retail and entertainment buildings, institutional applications and other field-engineered applications. It manufactures heating and cooling products in several locations in Europe and markets these products through both direct and indirect distribution channels in Europe, Russia, Turkey and the Middle East.
LII competes with United Technologies Corp., Ingersoll-Rand plc, Johnson Controls, Inc., AAON, Inc., and Daikin Industries, Ltd.
Service Experts
Approximately 100 Company owned Service Experts dealer service centers provide installation, preventive maintenance, emergency repair and replacement of heating and cooling systems directly to residential and light commercial customers throughout the United States and Canada. In connection with these services, it sells a range of its manufactured equipment, parts and supplies, and third-party branded products. The Company also has a Lennox National Account Services business that focuses on providing service and preventive maintenance to commercial national account customers.
LII competes with Direct Energy, Sears and American Residential Services.
Refrigeration
LII manufactures and markets equipment for the global commercial refrigeration market under the Heatcraft Worldwide Refrigeration name. It sells these products to distributors, installing contractors, engineering design firms, original equipment manufacturers and end-users. The Company’s commercial refrigeration products for the North American market include condensing units, unit coolers, fluid coolers, air-cooled condensers, compressor racks and air handlers. These products are sold for refrigeration applications, primarily to preserve food and other perishables, and are used by supermarkets, convenience stores, restaurants, refrigerated warehouses and distribution centers. As part of the sale of commercial refrigeration products, it provides application engineering for consulting engineers, contractors and others. It also sells products for non-food and various industry applications, such as telecommunications, dehumidification and medical applications.
In international markets, LII manufactures and markets refrigeration products, including condensing units, unit coolers, air-cooled condensers, fluid coolers, compressor racks and process chillers. It has manufacturing locations in Germany, France, Australia, New Zealand, Brazil and China. It also owns a 50% interest in a joint venture in Mexico that produces unit coolers, air-cooled condensers, condensing units and compressor racks of the same design and quality as those manufactured by its United States business. This venture product line is complemented with imports from the United States, which are sold through the joint venture’s distribution network. It also owns an 8% interest in a manufacturer in Thailand that produces compressors for use in its products and for other HVACR customers as well.
The Company competes with United Technologies Corp., Ingersoll-Rand plc, Emerson Electric Co., GEA Group and Alfa Laval.
Perhaps the most important event of 1995 came in May when Lennox added a fourth main subsidiary, Lennox Global Ltd., to its organizational chart. Lennox Global was created to expand the manufacturing and sales operations of Lennox Industries, Armstrong, and Heatcraft in areas outside the United States and Canada. In addition to its manufacturing facility in the United Kingdom, Lennox International had established joint ventures in France and Mexico which market refrigeration products and had gained full control of an Australian concern. These operations were consolidated under the banner of Lennox Global, which aimed for additional overseas growth through the formation of more joint ventures. The first of these came in 1996 when Lennox joined with the Brancher group of France to form HCF-Lennox, which combined several of the two companies operations into an entity with $160 million in annual sales and the number one position in Europe for rooftop air conditioners in addition to leading positions in chillers, precision air conditioners, process cooling, and commercial refrigeration systems. Other joint ventures were soon formed in Spain, with Refac, and in the Latin American region, with Strong. In September 1998 Lennox spent $20.5 million to acquire a majority interest in Brazil-based McQuay do Brasil S.A., a specialist in commercial refrigeration and heat transfer products, which it marketed in Brazil and surrounding countries. The addition of Lennox Global increased Lennox International's sales outside the United States and Canada from $28.5 million in 1996 to $244.5 million in 1998. The 1998 figure represented 13.4 percent of the company's overall sales of $1.82 billion, and the company aimed to increase that to 50 percent by 2005.
In September 1998 Lennox began a new strategy of acquiring heating and air conditioning dealers in the United States and Canada in order to distribute Lennox products directly to consumers and thereby gain a portion of the revenues and margins available at the retail level. Lennox also hoped to take advantage of the growth opportunities available in what was a highly fragmented market, with more than 30,000 dealers in the U.S. retail sales and service market alone. By the end of 1999's first quarter, Lennox had spent about $55 million to acquire 37 dealers in Canada and was making plans for U.S. acquisitions.
Having entered the hearth products market in 1994, Lennox expanded upon that initiative in 1998 when it formed Hearth Products Inc. as a Tustin, California-based wholly owned subsidiary of Lennox Industries. Following the 1998 acquisitions of Marco Mfg., Inc. of Lynwood, California; Pyro Industries Inc. of Burlington, Washington; and Superior Fireplace Company of Fullerton, California, and the early 1999 purchase of Security Chimneys International, Ltd.--for a total of $120 million--Hearth Products was one of the largest makers of hearth products in the United States and Canada, offering a full line of products including gas and wood-burning fireplaces, fireplace inserts, free-standing stoves, and gas logs. Also in 1998 Lennox International and Lennox Industries agreed to settle a lawsuit brought by 11 former sales managers, who charged they had been fired or demoted, at the ages of 41 to 58 years old, as a result of a practice or pattern of age discrimination at Lennox. Although the company admitted no wrongdoing, it agreed to pay the plaintiffs a total of $6.2 million, undergo 42 months of Equal Employment Opportunity Commission monitoring, and change its personnel practices.
By early 1999, Lennox had built up about $115 million in debt as a result of its hearth products acquisitions, its international expansion, and its dealer acquisition program. To pay down some of this debt&mdash well as to fund further expansion--Lennox decided to resurrect the idea of an initial public offering. In early April 1999 the company announced that it intended to sell an unspecified stake in the company to the public through an IPO. Following the offering, the 110 descendants of D.W. Norris who owned the company's stock would still be in firm control of the company, but they would have an increased ability to sell their stock holdings. It appeared that Lennox International was going public at a time of exciting company initiatives and excellent prospects for 21st-century growth.
Principal Subsidiaries: Armstrong Air Conditioning Inc.; Heatcraft Inc.; Lennox Global Ltd.; Lennox Industries Inc.
OVERALL
Beta: 0.70
Market Cap (Mil.): $2,625.41
Shares Outstanding (Mil.): 53.33
Annual Dividend: 0.72
Yield (%): 1.46
FINANCIALS
LII.N Industry Sector
P/E (TTM): 24.59 12.90 17.36
EPS (TTM): 45.68 -- --
ROI: 9.94 5.56 3.41
ROE: 19.56 6.74 6.07
Statistics:
Private Company
Incorporated: 1904 as Lennox Furnace Company
Employees: 11,700
Sales: $1.82 billion (1998)
NAIC: 333415 Air Conditioning & Warm Air Heating Equipment & Commercial & Industrial Refrigeration Equipment Manufacturing; 333414 Heating Equipment Manufacturing, Except Warm Air Furnaces; 333994 Industrial Process Furnace & Oven Manufacturing; 336322 Other Motor Vehicle Electrical & Electronic Equipment Manufacturing; 42173 Warm Air Heating & Air Conditioning Equipment & Supplies Wholesalers
Name Age Since Current Position
Thompson, Richard 71 2006 Chairman of the Board
Bluedorn, Todd 48 2007 Chief Executive Officer, Director
Hau, Robert 45 2009 Chief Financial Officer, Executive Vice President
Bedapudi, Prakash 44 2008 Chief Technology Officer, Executive Vice President
Torres, John 52 2008 Chief Legal Officer, Executive Vice President, Secretary
Moon, David 49 2006 Executive Vice President, President and Chief Operating Officer - LII Worldwide Refrigeration
Bizios, Harry 60 2006 Executive Vice President, President and Chief Operating Officer - LII Commercial Heating & Cooling
Young, Douglas 48 2006 Executive Vice President, President and Chief Operating Officer - LII Residential Heating & Cooling
Sessa, Daniel 46 2007 Chief Human Resources Officer, Executive Vice President
Blatz, Michael 45 2010 Executive Vice President, President & Chief Operating Officer - Service Experts
Borzi, James 48 2010 Vice President - Operations
Rumbough, Roy 55 2009 Chief Accounting Officer, Vice President, Controller
Byrne, James 74 1990 Independent Director
Cooper, Janet 57 1999 Independent Director
Major, John 65 1993 Independent Director
Stinson, Terry 69 1998 Independent Director
Henry, Charles 69 2000 Independent Director
Norris, John 53 2001 Independent Director
Schmidt, Paul 66 2005 Independent Director
Storey, Jeffrey 45 2006 Independent Director
Swienton, Gregory 61 2010 Independent Director
Address:
2100 Lake Park Boulevard
Richardson, Texas 75080
U.S.A.
Lennox International Inc. (LII) is a global provider of climate control solutions. The Company designs, manufactures and markets a range of products for the heating, ventilation, air conditioning and refrigeration (HVACR) markets. Its products and services are sold through multiple distribution channels under brand names, including Lennox, Armstrong Air, Ducane, Bohn, Larkin, Advanced Distributor Products, Service Experts and others. LII operates in four business segments: Residential Heating and Cooling, Commercial Heating and Cooling, Service Experts, and Refrigeration. The Company’s products and services are sold through a combination of distributors, independent and Company owned dealer service centers, other installing contractors, wholesalers, manufacturers’ representatives and original equipment manufacturers (OEMs) and to national accounts. In January 2011, the Company completed a transaction with The Manitowoc Company, Inc., by which LII acquired substantially all the assets of its Kysor/Warren business. Kysor/Warren is a manufacturer of refrigerated systems and display cases for supermarkets throughout North America.
Residential Heating and Cooling
LII manufactures and markets a range of furnaces, air conditioners, heat pumps, packaged heating and cooling systems, accessories to improve indoor air quality, replacement parts and related products for both the residential replacement and new construction markets in North America. These products are available in a variety of designs and efficiency levels. The Lennox and Aire-Flo brands are sold directly to a network of approximately 7,000 installing dealers. The Armstrong Air, Ducane, AirEase, Concord, Magic-Pak and Advanced Distributor Products brands are sold through independent distributors.
The Company's Advanced Distributor Products operation builds evaporator coils and air handlers under the Advanced Distributor Products brand, as well as the Lennox, Armstrong Air, AirEase, Concord and Ducane brands. Its hearth products include factory-built gas, wood-burning and electric fireplaces; free standing wood-burning, pellet and gas stoves; wood-burning, pellet and gas fireplace inserts; gas logs, venting products and accessories. Many of its fireplaces are built with a blower or fan option and are efficient heat sources, as well as attractive amenities to the home. As of December 31, 2010, it marketed its hearth products under the Lennox, Superior, Country Collection and Security Chimneys brand names.
The Company competes with United Technologies Corp., Goodman Global, Inc., Ingersoll-Rand plc, Paloma Co., Ltd., Johnson Controls, Inc., Daiken, Nordyne, HNI Corporation and Monessen Hearth Company.
Commercial Heating and Cooling
In North America, LII manufactures and sells unitary heating and cooling equipment used in light commercial applications, such as low-rise office buildings, restaurants, retail centers, churches and schools. Its product offerings for these applications include rooftop units ranging from 2 to 50 tons of cooling capacity and split system/air handler combinations, which range from 1.5 to 20 tons of cooling capacity. These products are distributed primarily through commercial contractors and directly to national account customers.
In Europe, it manufactures and sells unitary products, which range from 2 to 70 tons of cooling capacity, and applied systems with up to 200 tons of cooling capacity. Its European products consist of small package units, rooftop units, chillers, air handlers and fan coils that serve medium-rise commercial buildings, shopping malls, other retail and entertainment buildings, institutional applications and other field-engineered applications. It manufactures heating and cooling products in several locations in Europe and markets these products through both direct and indirect distribution channels in Europe, Russia, Turkey and the Middle East.
LII competes with United Technologies Corp., Ingersoll-Rand plc, Johnson Controls, Inc., AAON, Inc., and Daikin Industries, Ltd.
Service Experts
Approximately 100 Company owned Service Experts dealer service centers provide installation, preventive maintenance, emergency repair and replacement of heating and cooling systems directly to residential and light commercial customers throughout the United States and Canada. In connection with these services, it sells a range of its manufactured equipment, parts and supplies, and third-party branded products. The Company also has a Lennox National Account Services business that focuses on providing service and preventive maintenance to commercial national account customers.
LII competes with Direct Energy, Sears and American Residential Services.
Refrigeration
LII manufactures and markets equipment for the global commercial refrigeration market under the Heatcraft Worldwide Refrigeration name. It sells these products to distributors, installing contractors, engineering design firms, original equipment manufacturers and end-users. The Company’s commercial refrigeration products for the North American market include condensing units, unit coolers, fluid coolers, air-cooled condensers, compressor racks and air handlers. These products are sold for refrigeration applications, primarily to preserve food and other perishables, and are used by supermarkets, convenience stores, restaurants, refrigerated warehouses and distribution centers. As part of the sale of commercial refrigeration products, it provides application engineering for consulting engineers, contractors and others. It also sells products for non-food and various industry applications, such as telecommunications, dehumidification and medical applications.
In international markets, LII manufactures and markets refrigeration products, including condensing units, unit coolers, air-cooled condensers, fluid coolers, compressor racks and process chillers. It has manufacturing locations in Germany, France, Australia, New Zealand, Brazil and China. It also owns a 50% interest in a joint venture in Mexico that produces unit coolers, air-cooled condensers, condensing units and compressor racks of the same design and quality as those manufactured by its United States business. This venture product line is complemented with imports from the United States, which are sold through the joint venture’s distribution network. It also owns an 8% interest in a manufacturer in Thailand that produces compressors for use in its products and for other HVACR customers as well.
The Company competes with United Technologies Corp., Ingersoll-Rand plc, Emerson Electric Co., GEA Group and Alfa Laval.
Perhaps the most important event of 1995 came in May when Lennox added a fourth main subsidiary, Lennox Global Ltd., to its organizational chart. Lennox Global was created to expand the manufacturing and sales operations of Lennox Industries, Armstrong, and Heatcraft in areas outside the United States and Canada. In addition to its manufacturing facility in the United Kingdom, Lennox International had established joint ventures in France and Mexico which market refrigeration products and had gained full control of an Australian concern. These operations were consolidated under the banner of Lennox Global, which aimed for additional overseas growth through the formation of more joint ventures. The first of these came in 1996 when Lennox joined with the Brancher group of France to form HCF-Lennox, which combined several of the two companies operations into an entity with $160 million in annual sales and the number one position in Europe for rooftop air conditioners in addition to leading positions in chillers, precision air conditioners, process cooling, and commercial refrigeration systems. Other joint ventures were soon formed in Spain, with Refac, and in the Latin American region, with Strong. In September 1998 Lennox spent $20.5 million to acquire a majority interest in Brazil-based McQuay do Brasil S.A., a specialist in commercial refrigeration and heat transfer products, which it marketed in Brazil and surrounding countries. The addition of Lennox Global increased Lennox International's sales outside the United States and Canada from $28.5 million in 1996 to $244.5 million in 1998. The 1998 figure represented 13.4 percent of the company's overall sales of $1.82 billion, and the company aimed to increase that to 50 percent by 2005.
In September 1998 Lennox began a new strategy of acquiring heating and air conditioning dealers in the United States and Canada in order to distribute Lennox products directly to consumers and thereby gain a portion of the revenues and margins available at the retail level. Lennox also hoped to take advantage of the growth opportunities available in what was a highly fragmented market, with more than 30,000 dealers in the U.S. retail sales and service market alone. By the end of 1999's first quarter, Lennox had spent about $55 million to acquire 37 dealers in Canada and was making plans for U.S. acquisitions.
Having entered the hearth products market in 1994, Lennox expanded upon that initiative in 1998 when it formed Hearth Products Inc. as a Tustin, California-based wholly owned subsidiary of Lennox Industries. Following the 1998 acquisitions of Marco Mfg., Inc. of Lynwood, California; Pyro Industries Inc. of Burlington, Washington; and Superior Fireplace Company of Fullerton, California, and the early 1999 purchase of Security Chimneys International, Ltd.--for a total of $120 million--Hearth Products was one of the largest makers of hearth products in the United States and Canada, offering a full line of products including gas and wood-burning fireplaces, fireplace inserts, free-standing stoves, and gas logs. Also in 1998 Lennox International and Lennox Industries agreed to settle a lawsuit brought by 11 former sales managers, who charged they had been fired or demoted, at the ages of 41 to 58 years old, as a result of a practice or pattern of age discrimination at Lennox. Although the company admitted no wrongdoing, it agreed to pay the plaintiffs a total of $6.2 million, undergo 42 months of Equal Employment Opportunity Commission monitoring, and change its personnel practices.
By early 1999, Lennox had built up about $115 million in debt as a result of its hearth products acquisitions, its international expansion, and its dealer acquisition program. To pay down some of this debt&mdash well as to fund further expansion--Lennox decided to resurrect the idea of an initial public offering. In early April 1999 the company announced that it intended to sell an unspecified stake in the company to the public through an IPO. Following the offering, the 110 descendants of D.W. Norris who owned the company's stock would still be in firm control of the company, but they would have an increased ability to sell their stock holdings. It appeared that Lennox International was going public at a time of exciting company initiatives and excellent prospects for 21st-century growth.
Principal Subsidiaries: Armstrong Air Conditioning Inc.; Heatcraft Inc.; Lennox Global Ltd.; Lennox Industries Inc.
OVERALL
Beta: 0.70
Market Cap (Mil.): $2,625.41
Shares Outstanding (Mil.): 53.33
Annual Dividend: 0.72
Yield (%): 1.46
FINANCIALS
LII.N Industry Sector
P/E (TTM): 24.59 12.90 17.36
EPS (TTM): 45.68 -- --
ROI: 9.94 5.56 3.41
ROE: 19.56 6.74 6.07
Statistics:
Private Company
Incorporated: 1904 as Lennox Furnace Company
Employees: 11,700
Sales: $1.82 billion (1998)
NAIC: 333415 Air Conditioning & Warm Air Heating Equipment & Commercial & Industrial Refrigeration Equipment Manufacturing; 333414 Heating Equipment Manufacturing, Except Warm Air Furnaces; 333994 Industrial Process Furnace & Oven Manufacturing; 336322 Other Motor Vehicle Electrical & Electronic Equipment Manufacturing; 42173 Warm Air Heating & Air Conditioning Equipment & Supplies Wholesalers
Name Age Since Current Position
Thompson, Richard 71 2006 Chairman of the Board
Bluedorn, Todd 48 2007 Chief Executive Officer, Director
Hau, Robert 45 2009 Chief Financial Officer, Executive Vice President
Bedapudi, Prakash 44 2008 Chief Technology Officer, Executive Vice President
Torres, John 52 2008 Chief Legal Officer, Executive Vice President, Secretary
Moon, David 49 2006 Executive Vice President, President and Chief Operating Officer - LII Worldwide Refrigeration
Bizios, Harry 60 2006 Executive Vice President, President and Chief Operating Officer - LII Commercial Heating & Cooling
Young, Douglas 48 2006 Executive Vice President, President and Chief Operating Officer - LII Residential Heating & Cooling
Sessa, Daniel 46 2007 Chief Human Resources Officer, Executive Vice President
Blatz, Michael 45 2010 Executive Vice President, President & Chief Operating Officer - Service Experts
Borzi, James 48 2010 Vice President - Operations
Rumbough, Roy 55 2009 Chief Accounting Officer, Vice President, Controller
Byrne, James 74 1990 Independent Director
Cooper, Janet 57 1999 Independent Director
Major, John 65 1993 Independent Director
Stinson, Terry 69 1998 Independent Director
Henry, Charles 69 2000 Independent Director
Norris, John 53 2001 Independent Director
Schmidt, Paul 66 2005 Independent Director
Storey, Jeffrey 45 2006 Independent Director
Swienton, Gregory 61 2010 Independent Director
Address:
2100 Lake Park Boulevard
Richardson, Texas 75080
U.S.A.