lii-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________

FORM 10-Q

_________________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to ______

Commission file number 001-15149

_________________________________________________

LENNOX INTERNATIONAL INC.

Incorporated pursuant to the laws of the State of Delaware

_________________________________________________

Internal Revenue Service Employer Identification No. 42-0991521

2140 LAKE PARK BLVD., RICHARDSON, Texas, 75080

(972) 497-5000

_________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value per share	LII	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 22, 2026, the number of shares outstanding of the registrant’s common stock, par value $0.01 per share, was 34,799,968.

LENNOX INTERNATIONAL INC.

FORM 10-Q

For the three months ended March 31, 2026

INDEX


		Page
Part I	Financial Information
	Item 1. Financial Statements
	Consolidated Balance Sheets - March 31, 2026 (Unaudited) and December 31, 2025	1
	Consolidated Statements of Operations (Unaudited) - Three Months Ended March 31, 2026 and 2025	2
	Consolidated Statements of Comprehensive Income (Unaudited) - Three Months Ended March 31, 2026 and 2025	3
	Consolidated Statements of Stockholders' Equity (Unaudited) - Three Months Ended March 31, 2026 and 2025	4
	Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 31, 2026 and 2025	5
	Notes to Consolidated Financial Statements (Unaudited)	6
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	20
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	26
	Item 4. Controls and Procedures	26
Part II	Other Information
	Item 1. Legal Proceedings	27
	Item 1A. Risk Factors	27
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	27
	Item 5. Other Information	28
	Item 6. Exhibits	29

Part I - Financial Information

Item 1. Financial Statements

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


(Amounts in millions, except shares and par values)	As of March 31, 2026		As of December 31, 2025
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	48.2	$	34.2
Short-term investments	2.0		0.5
Accounts and notes receivable, net of allowances of $9.1 and $8.5 in 2026 and 2025, respectively	647.9		578.8
Inventories, net	1,209.7		1,152.6

Other current assets	124.3		137.7
Total current assets	2,032.1		1,903.8
Restricted cash equivalents	19.0		18.5
Property, plant and equipment, net of accumulated depreciation of $1,064.3 and $1,043.9 in 2026 and 2025, respectively	917.6		887.2
Right-of-use assets from operating leases	404.4		356.3
Goodwill	503.7		497.2
Intangible assets, net of accumulated amortization of $42.4 and $38.3 in 2026 and 2025, respectively	269.7		273.0
Deferred income taxes	12.6		12.9
Other assets, net	133.6		132.9
Total assets	$	4,292.7	$	4,081.8

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	464.6	$	438.0
Accrued expenses	301.5		374.2
Income taxes payable	63.4		46.4
Commercial paper	361.0		226.0
Current maturities of long-term debt	18.2		18.3
Current operating lease liabilities	83.8		88.9

Total current liabilities	1,292.5		1,191.8
Long-term debt	1,144.1		1,144.1
Long-term operating lease liabilities	347.8		293.4

Pensions	19.4		18.7
Other liabilities	275.0		270.7
Total liabilities	3,078.8		2,918.7
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 25,000,000 shares authorized, no shares issued or outstanding	—		—
Common stock, $0.01 par value, 200,000,000 shares authorized, 87,170,197 shares issued	0.9		0.9
Additional paid-in capital	1,249.7		1,243.0
Retained earnings	4,963.0		4,891.1
Accumulated other comprehensive loss	(48.0)		(48.5)
Treasury stock, at cost, 52,360,280 shares and 52,374,147 shares for 2026 and 2025, respectively	(4,951.7)		(4,923.4)
Total stockholders' equity	1,213.9		1,163.1
Total liabilities and stockholders' equity	$	4,292.7	$	4,081.8

The accompanying notes are an integral part of these consolidated financial statements.

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


(Amounts in millions, except per share data)	For the Three Months Ended March 31,

	2026		2025
Net sales	$	1,135.1	$	1,072.6
Cost of goods sold	783.8		731.7
Gross profit	351.3		340.9
Operating Expenses:
Selling, general and administrative expenses	185.2		171.3
Losses and other expenses, net	2.2		2.8







Loss (income) from equity method investments	0.4		(1.2)
Operating income	163.5		168.0
Pension settlements	0.5		0.1
Interest expense, net	15.2		6.2
Other expense, net	0.9		0.9
Net income before income taxes	146.9		160.8
Provision for income taxes	29.7		31.2
Net income	$	117.2	$	129.6




Earnings per share – Basic(1):	$	3.37	$	3.65



Earnings per share – Diluted(1):	$	3.35	$	3.63

Weighted Average Number of Shares Outstanding - Basic	34.8		35.5
Weighted Average Number of Shares Outstanding - Diluted	35.0		35.7

(1) Amounts may not recalculate due to rounding.

The accompanying notes are an integral part of these consolidated financial statements.

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


(Amounts in millions)	For the Three Months Ended March 31,
	2026		2025
Net income	$	117.2	$	129.6
Other comprehensive income (loss):
Foreign currency translation adjustments	(0.7)		4.2

Net change in pension and post-retirement liabilities	(1.0)		(0.2)
Reclassification of pension and post-retirement benefit losses into earnings	0.5		0.4
Pension settlements	0.5		0.1

Net change in fair value of cash flow hedges	12.8		10.7
Reclassification of cash flow hedge gains into earnings	(10.8)		(2.6)
Other comprehensive income before taxes	1.3		12.6
Tax (expense) benefit	(0.8)		0.5
Other comprehensive income, net of tax	0.5		13.1
Comprehensive income	$	117.7	$	142.7

The accompanying notes are an integral part of these consolidated financial statements.

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

For the three months ended March 31, 2026 and 2025

(Unaudited)

(In millions, except per share data)


	Common Stock Issued		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock at Cost			Total Stockholders' Equity
(For the three months ended March 31, 2026)									Shares	Amount
Balance as of December 31, 2025	$	0.9	$	1,243.0	$	4,891.1	$	(48.5)	52.4	$	(4,923.4)	$	1,163.1

Net income	—		—		117.2		—		—	—		117.2
Dividends, $1.30 per share	—		—		(45.3)		—		—	—		(45.3)
Foreign currency translation adjustments	—		—		—		(0.7)		—	—		(0.7)


Stock-based compensation expense	—		5.8		—		—		—	—		5.8
Purchase of common stock under Employee Stock Purchase Program	—		0.5		—		—		—	—		0.5
Change in cash flow hedges	—		—		—		1.2		—	—		1.2
Treasury shares reissued for common stock	—		0.4		—		—		(0.1)	2.2		2.6
Treasury stock purchases	—		—		—		—		0.1	(30.5)		(30.5)
Balance as of March 31, 2026	$	0.9	$	1,249.7	$	4,963.0	$	(48.0)	52.4	$	(4,951.7)	$	1,213.9


	Common Stock Issued		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock at Cost			Total Stockholders' Equity
(For the three months ended March 31, 2025)									Shares	Amount
Balance as of December 31, 2024	$	0.9	$	1,213.3	$	4,262.7	$	(93.7)	51.6	$	(4,421.1)	$	962.1

Net income	—		—		129.6		—		—	—		129.6
Dividends, $1.15 per share	—		—		(40.8)		—		—	—		(40.8)
Foreign currency translation adjustments	—		—		—		4.2		—	—		4.2
Pension and post-retirement liability changes	—		—		—		0.2		—	—		0.2

Stock-based compensation expense	—		6.3		—		—		—	—		6.3
Change in cash flow hedges	—		—		—		8.7		—	—		8.7
Treasury shares reissued for common stock	—		(0.6)		—		—		(0.1)	1.7		1.1

Treasury stock purchases	—		—		—		—		0.2	(97.7)		(97.7)

Balance as of March 31, 2025	$	0.9	$	1,219.0	$	4,351.5	$	(80.6)	51.7	$	(4,517.1)	$	973.7

The accompanying notes are an integral part of these consolidated financial statements.

LENNOX INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


(Amounts in millions)	For the Three Months Ended March 31,
	2026		2025
Cash flows from operating activities:
Net income	$	117.2	$	129.6

Adjustments to reconcile net income to net cash provided by (used in) operating activities:





Loss (income) from equity method investments	0.4		(1.2)



Provision for credit losses	2.1		1.3
Unrealized losses (gains), net on derivative contracts	2.1		(0.5)
Stock-based compensation expense	6.3		6.3

Depreciation and amortization	29.2		25.6
Deferred income taxes	3.3		(1.1)
Pension expense	1.0		1.1
Pension contributions	(0.3)		(0.3)

Changes in assets and liabilities, net of effects of acquisitions and divestitures:
Accounts and notes receivable	(73.6)		8.3
Inventories	(62.6)		(209.4)
Other current assets	13.7		(1.7)
Accounts payable	31.0		85.2
Accrued expenses	(74.3)		(105.1)
Income taxes payable and receivable, net	18.8		27.1
Leases, net	1.3		3.4
Other, net	0.5		(4.4)


Net cash provided by (used in) operating activities	16.1		(35.8)
Cash flows from investing activities:
Proceeds from the disposal of property, plant and equipment	0.7		0.5
Purchases of property, plant and equipment	(55.5)		(25.5)

Acquisitions, net of cash	(0.2)		—

(Purchases of) proceeds from investments and other	(1.6)		1.5

Net cash used in investing activities	(56.6)		(23.5)
Cash flows from financing activities:
Commercial paper borrowings	434.1		—
Commercial paper payments	(299.1)		—

Payments on debt arrangements	(5.3)		(5.0)







Proceeds from employee stock purchases	2.6		1.2
Repurchases of common stock	(19.5)		(85.2)
Repurchases of common stock to satisfy employee withholding tax obligations	(10.5)		(11.3)
Cash dividends paid	(45.2)		(40.9)
Net cash provided by (used in) financing activities	57.1		(141.2)
Increase (decrease) in cash, cash equivalents and restricted cash	16.6		(200.5)

Effect of exchange rates on cash, cash equivalents and restricted cash equivalents	(2.1)		2.6
Cash, cash equivalents and restricted cash, beginning of period	52.7		415.1
Cash, cash equivalents and restricted cash, end of period	$	67.2	$	217.2

Supplemental disclosures of cash flow information:
Interest paid	$	23.5	$	19.2
Income taxes paid (net of refunds)	$	7.0	$	5.1

The accompanying notes are an integral part of these consolidated financial statements.

LENNOX INTERNATIONAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. General:

References in this Quarterly Report on Form 10-Q to "we","our","us","LII" or the "Company" refer to Lennox International Inc. and its subsidiaries, unless the context requires otherwise.

Basis of Presentation

The accompanying unaudited Consolidated Balance Sheet as of March 31, 2026 and the accompanying unaudited Consolidated Statements of Operations, Comprehensive Income, Stockholders' Equity, and Cash Flows for the three months ended March 31, 2026 and 2025 should be read in conjunction with our audited consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2025.

The unaudited consolidated financial statements for all comparable prior periods presented have been retrospectively adjusted to reflect the prior-year change in method of accounting for certain inventories from last-in-first-out ("LIFO") to first-in, first-out ("FIFO").

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The accompanying consolidated financial statements contain all material adjustments, consisting principally of normal recurring adjustments, necessary for a fair presentation of our financial position, results of operations and cash flows. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to applicable rules and regulations, although we believe that the disclosures herein are adequate to make the information presented not misleading. The operating results for the interim periods are not necessarily indicative of the results that may be expected for a full year.

Our fiscal quarterly periods are comprised of approximately 13 weeks, but the number of days per quarter may vary year-over-year. Our quarterly reporting periods usually end on the Saturday closest to the last day of March, June, and September. Our fourth quarter and fiscal year ends on December 31, regardless of the day of the week on which December 31 falls. For convenience, the 13-week periods comprising each fiscal quarter are denoted by the last day of the respective calendar quarter.

Use of Estimates

The preparation of financial statements requires us to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, intangible assets and other long-lived assets, contingencies, guarantee obligations, indemnifications, and assumptions used in the calculation of income taxes, pension and post-retirement medical benefits, self-insurance and warranty reserves, and stock-based compensation, among others. These estimates and assumptions are based on our best estimates and judgment.

We evaluate these estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. We believe these estimates and assumptions to be reasonable under the circumstances and will adjust such estimates and assumptions when facts and circumstances dictate. Volatile equity, foreign currency and commodity markets combine to increase the uncertainty inherent in such estimates and assumptions. Future events and their effects cannot be determined with precision and actual results could differ significantly from these estimates. Changes in these estimates will be reflected in the financial statements in future periods.

2. Reportable Business Segments:

We operate in two reportable business segments of the heating, ventilation, air conditioning and refrigeration (“HVACR”) industry. Our segments are organized primarily by the nature of the products and services we provide. The following table describes each segment:

Segment

Product or Services

Markets Served

Geographic Areas

Home Comfort Solutions

Furnaces, air conditioners, heat pumps, packaged heating and cooling systems, indoor air quality equipment, comfort control products, replacement parts and supplies

Residential Replacement;
Residential Parts and Supplies;
Residential New Construction

United States
Canada

Building Climate Solutions

Commercial heating, air conditioning and refrigeration systems. Products include rooftop packaged units, variable refrigerant flow systems, heat pumps, air cooled condensing units, air handlers, unit coolers, and process chillers. Services include installation, energy monitoring, service and maintenance, and HVAC recycling.

Light Commercial;
Commercial Parts and Supplies;
Food Preservation

United States
Canada

We use segment profit or loss as the primary measure of profitability to evaluate operating performance and to allocate capital resources. We define segment profit or loss as a segment’s income or loss from continuing operations before interest and income taxes included in the accompanying Consolidated Statements of Operations, excluding certain items. The reconciliation in the table below details the items excluded.

Any intercompany sales and associated profit (and any other intercompany items) are eliminated from segment results. There were no significant intercompany eliminations for the periods presented.

The chief operating decision maker uses segment profit or loss from operations, excluding certain items, to allocate resources (including employees, financial, or capital resources) for each segment predominantly in the annual budget and forecasting process. The chief operating decision maker considers budget-to-actual variances in segment profit or loss on a monthly basis when evaluating segment performance and making decisions about allocating resources to the segments.

Our chief operating decision maker is Alok Maskara, Chief Executive Officer.

Key financial information for each segment is shown below (in millions):


	Home Comfort Solutions		Business Climate Solutions		Total
Three months ended March 31, 2026
Net sales(1)	$	650.0	$	485.1	$	1,135.1
Cost of goods sold	467.8		316.2		784.0
Selling, general and administrative	97.2		74.0		171.2
Other income(2)	(1.5)		(0.7)		(2.2)
Segment profit(3)	$	86.5	$	95.6	$	182.1

Three months ended March 31, 2025
Net sales(1)	$	721.4	$	351.2	$	1,072.6
Cost of goods sold	500.1		231.8		731.9
Selling, general and administrative	98.4		60.4		158.8
Other (income) expense(2)	(1.0)		0.2		(0.8)
Segment profit(3)	$	123.9	$	58.8	$	182.7

(1) On a consolidated basis, no revenue from transactions with a single customer were 10% or greater of our consolidated net sales for any of the periods presented.

(2) Other (income) expense is primarily comprised of income from equity method investments and (gains) losses and other expenses, net.

(3) We define segment profit (loss) as a segment's operating income (loss) included in the accompanying Consolidated Statements of Operations, excluding:

•Restructuring charges, and

•Loss (gain) on sale from previous dispositions.

The reconciliations of segment profit to Operating income and Net income before income taxes are presented below (in millions):


	For the Three Months Ended March 31,
	2026		2025
Total segment profit(1)	$	182.1	$	182.7
Reconciliation to Operating income:

Restructuring charges	—		—
Gain on sale from previous dispositions	—		—




Corporate and other expenses(2)	(18.6)		(14.7)
Operating income	163.5		168.0
Reconciliation to income before income taxes:
Pension settlements	0.5		0.1
Interest expense, net	15.2		6.2
Other expense, net	0.9		0.9
Net income before income taxes	$	146.9	$	160.8

(1) We define segment profit as a segment's operating income (loss) included in the accompanying Consolidated Statements of Operations, excluding:

•Restructuring charges, and

•Loss (gain) on sale from previous dispositions.

SEC Form 10-Q filed by Lennox International Inc.