Lennox International, Inc.

Welcome to the Lenox third quarter 2023 earnings call. All lines are currently in listen only mode. And there will be a question and answer session at the end of the presentation. You may enter the queue to ask a question by pressing star and one on your telephone touchpad. To exit the queue, press star and two. As a reminder, this call is being recorded. I would now like to turn the conference over to Chelsea Polshun from the Lenox Investor Relations Team. Chelsea, please go ahead.

Thank you, Carrie. Good morning, everyone. We have had an exciting quarter, and we are looking forward to discussing the details with all of you this morning. With me today is CEO Alok Mascara, CFO Joe Reitmeyer, and VP of Finance Michael Quenzer. Alok will take you through some quarter highlights as well as some preliminary perspective on the year ahead. Joe will go into depth on the company's quarterly financial results as well as our revised guidance for fiscal 2023. At the end of the call, we will move to our Q&A session. Turning to slide two, a reminder that during today's call, we will be making certain forward-looking statements which are subject to numerous risks and uncertainties as outlined on this page. We may also refer to certain non-GAAP financial measures that management considers to be relevant indicators of underlying business performance. please refer to our SEC filings available on our Investor Relations website for additional details, including a reconciliation of all GAAP to non-GAAP measures. The earnings release, today's presentation, and the webcast archive link for today's call are available on our Investor Relations website at investor.linux.com. You can also find the press releases for our CFO transition and AES acquisition on the Investor Relations website. Now please turn to slide three as I turn the call over to our CEO, Alok Mascara.

Thank you, Chelsea. Good morning, everyone. I am proud to report that this has been another record quarter for Linux, with results that truly speak to our commitment towards delivering growth acceleration and resilient margin expansion. The record revenue, profit, and earnings that we are sharing today reflect the transformative impact of our self-help initiatives put in place last year. These results were made possible by the hard work of Lenox's 13,000 employees, as well as the unwavering loyalty of our dealers and customers. I deeply appreciate the tireless efforts of everyone who played a part in delivering these exceptional results. I also extend my appreciation to our dealers and customers for entrusting Lenox to provide top-tier innovative products and solutions. Now, let me transition into an overview of this quarter's highlights. Lenox's core revenue grew 10%, and our adjusted segment margin expanded 334 basis points to 19.3%, resulting in our adjusted earnings per share increasing 30% to $5.37. Our operating cash flow of 313 million was up 83% year over year. Additionally, earlier this morning, we announced Joe Reichmeyer's decision to retire and the appointment of Michael Quenzer as our new CFO. We are excited for both Joe and Michael as we complete this planned transition. Additionally, we also announced the strategic acquisition of Architectural Engineering Services, or AES, this morning. The acquisition is consistent with our bolt-on acquisition strategy and is a clear strategic fit that will accelerate growth, unlock operational synergies, and enhance our service offerings to create incremental shareholder value. Now, please turn to slide four for more details on our CFO transition. Announced earlier this morning, Joe Reitmeyer has decided to retire, and I'd like to express my sincere gratitude for his remarkable 18-year tenure at Lenox. Under his leadership, the company achieved many significant milestones, including 7x earnings per share growth and 12x increase in market cap. Beyond his financial stewardship, Joe has cultivated a talented, dynamic finance organization here at Lenox. With that strong foundation and robust succession plan, we expect a smooth transition as Michael Quinzer takes on the role of Chief Financial Officer effective January 1st, 2024. Michael joined Lenox in 2004 and has been a key contributor to Lenox's strong financial performance. He has a proven track record of driving operational excellence, developing talent, and creating shareholder value. Michael's experience as the segment CFO during the commercial turnaround, and most recently as VP Finance and Investor Relations, equips him with a solid foundation for his new role. I am very happy for Joe as he looks forward to his well-earned retirement, and I am excited to work with Michael in his new capacity. Please join me in congratulating both Joe and Michael. Now please turn to slide five for an overview of the AES acquisition. We are pleased to welcome AES customers and employees to the Lenox family. This strategic bolt-on acquisition is in line with our overall capital deployment strategy and provides clear benefits to our customers, employees, and shareholders. As you may know, Lenox's existing national account service team is focused on preventative maintenance and energy monitoring services. Our new acquisition is centered on turnkey installation, accessories, as well as refrigerant reclaim and recycling. The combined portfolio will allow us to serve our customers more holistically, ensuring that all their needs are met by Lenox. Additionally, It enhances our cross-selling opportunities as we can now offer a broader range of services and solutions to our client base. This will strengthen our relationship with our customers and positions us for a comprehensive lifecycle provider in this fragmented light commercial service industry. AEJS also provides new services to facilitate product lifecycle decommissioning including refrigerant reclamation and material recycling. For example, a commercial customer can purchase rooftop equipment from Lenox, utilize AES installation services, use us for maintenance and monitoring, and leverage our reclaim and recycling services at the end of equipment life. By offering these services, we not only align with the evolving environmental needs and regulations, but also create a new revenue stream for our business, ensuring that we remain at the forefront of sustainable innovations. Another compelling aspect of this acquisition is the vertical integration into parts and accessories, specifically in curb adapters. By manufacturing curb adapters in-house, we will be able to generate cost efficiencies increase profitability, and build a stronger competitive edge in the marketplace. Ultimately, this strategic bolt-on acquisition addresses several critical execution needs in our growth strategy. It adds installation capabilities to our industry-leading preventative maintenance services, provides new services such as refrigerant reclaim and material recycling, to support product lifecycle decommissioning, and increases the sales of parts and accessories. Now, let me hand the call over to Joe, who will take us through the details of our Q3 financial performance.