Lennox International, Inc.

Please stand by. Your program is about to begin. If you need audio assistance during today's program, please press star zero. Welcome to the Linux second quarter earnings conference call. All lines are currently in listen-only mode, and there will be a question-answer session at the end of the presentation. You may enter the queue to ask a question by pressing star and one on your phone. To exit the queue, press star and two. As a reminder, this call is being recorded. I would now like to turn the call over to Chelsea Polshun, from Lenox Investor Relations. Chelsea, please go ahead.

Thank you, Margo. Good morning, everyone, and thank you for joining us as we share our 2025 second quarter results. Joining me today is CEO Alok Miskara and CFO Michael Quencer. Each will share their prepared remarks before we move into the 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 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 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. Now please turn to slide three as I turn the call over to our CEO, Alok Miskara.

Thank you, Chelsea. Good morning, everyone. Let me begin today's call by highlighting the impressive results we achieved in Q2. Results that reflect our team's strategic focus and resilience. In the face of a challenging external environment, both segments delivered revenue growth and margin expansion. This performance was fueled by our continued emphasis on cost discipline, elevating the customer experience, and enhancing our go-to-market differentiation. As we build on this momentum, I want to express my sincere gratitude to our employees for their dedication and to our loyal customers for their continued trust and partnership. Let us turn to slide three for an overview of our second quarter financials. Revenue this quarter grew 3%. Our segment margin was a record 23.6%, an increase of 170 basis points. Operating cash flow was $87 million. Adjusted earnings per share in the second quarter was $7.82. Our team is performing well despite ongoing challenges, including softness in new construction demand, industry refrigerant canister shortages, customer uncertainty, and inflationary pressures. In HCS, profitability remains strong as we transition into selling primarily our R454B products. Destocking in Q2 was largely in line with expectations, though we anticipate some spillover into Q3 as industry lead times continue to normalize. While residential new construction remains subdued, the HCS segment continues to perform well given the broader market conditions. In BCS, factory productivity has improved, helping to mitigate inflationary pressures. Emergency replacement winds have partially offset end markets that have been weaker than we anticipated. In addition, growth from our full lifecycle strategy has delivered year-over-year revenue growth and margin expansion. We are raising our full-year outlook to reflect our consistent execution in a challenging environment and continued progress on our growth initiatives. We now expect adjusted earnings per share in the range of $23.25 to $24.25, and revenue growth of approximately 3%. Now, let us move to slide four for a brief look at how we're expanding our portfolio and the value we bring to our customers through joint ventures with leading global partners. As we continue to execute our transformation plan, we are taking a deliberate approach to building long-term value through strategic partnerships that strengthen our heat pump portfolio and enhance customer experience. Our joint ventures with Samsung and Ariston are clear examples of this strategy in action. These partnerships allow us to offer a broader range of products that our customers are already installing. making it easier for them to do more business with us. With 75% of our dealers already selling mini splits and 50% offering water heaters, these additions are a natural fit that will provide one-stop shopping convenience to all our customers. These joint ventures position us well for future growth. Samsung brings advanced technology, SmartThings integration, and strong brand recognition that will enhance our portfolio in both HCS and BCS through ductless mini-splits and VRF products. Aristan contributes deep expertise in global heat pump water heating, and our North American joint venture strengthens the position of both companies during the ongoing convergence of HVAC and water heating trades. These partnerships align with the growth acceleration phase of our transformation strategy and establish the foundation for the expansion phase. We expect Samsung to begin contributing meaningfully to growth in 2026, followed by Ariston in 2027. Now, let me hand over the call to Michael, who will take us through the details of the Q2 financial results.