Lennox International, Inc.

Thank you, Madison. Good morning, everyone, and thank you for joining us as we share our 2025 fourth quarter and full year results. Joining me today is CEO Alok Miskara and CFO Michael Quinzer. Each will share their prepared remarks before we move to 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 consider 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. Please note that the results being presented today reflect the FIFO accounting method adopted by the company as of Q4 2025. The rationale and the financial impact of this change are summarized on slide 15 through 18 in the appendix. 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 as I turn the call over to our CEO, Alok Miskara.

Thank you, Chelsea. Good morning, everyone.

I am pleased with how our team executed throughout 2025, especially given the level of disruption the industry faced. It was a year marked by regulatory changes, software demand, and broad market headwinds, yet the team remained resilient and delivered solid results. Most notably, we achieved full year margins above 20% for the first time in our history. This meaningful milestone reflects the structural improvements we have made in our production capacity and operational efficiency. I'm grateful for the continued support of our dealers, distributors, and contractors, whose partnership played an important role in helping us navigate such a difficult year. Their loyalty, along with our team's commitment to excellence, continues to create value for our shareholders. Let's turn to slide three for an overview of our fourth quarter and full year financials. Revenue was down 11% in the quarter due to weak residential and commercial end markets. The impact was further amplified by deeper channel destocking and soft residential new construction activity. Our segment margin was 17.7% in the quarter, driven by volume declines and expected absorption headwinds. Operating cash flow was $406 million. Adjusted earnings per share for the quarter was $4.45. Full-year revenue was down 3%, driven by volume headwinds from destocking and softer end markets. However, the team still delivered a record 20.4% segment margin despite tariff impacts and other inflationary pressures. Operating cash flow was $758 million, down from last year due to temporarily inflated inventory levels. Overall, 2025 was a complex and challenging year, and I'm proud of the team delivering $23.16 in adjusted earnings per share. This is 2% higher versus last year's comparable $22.70. Now, let's turn to slide four, for an overview of end market conditions. 2025 was an eventful year for the North American HVAC industry and Lenox. We safely and timely converted our product portfolio to meet the low GWP requirement. However, the industry volume for residential products declined significantly, primarily impacted by channel destocking. The situation was further complicated with low dealer and consumer confidence and the lack of housing recovery. On the commercial side, we successfully ramped our emergency replacement growth initiative in several metro regions while the light commercial HVAC industry declined for 17 consecutive months by December 2025. We are cautiously optimistic that the industry backdrop is going to shift favorably in 2026 as one-step channel destocking is nearly complete, and two-step channel destocking is anticipated to be complete in the second quarter of this year. In addition, unique challenges from 2025, such as canister shortages, have been addressed, and we expect housing to improve given lower mortgage interest rates. Our internal growth initiatives, such as parts and services growth, commercial emergency replacement coverage, and ductless product penetration are also expected to accelerate our growth here. Now, let us turn to slide five to review our investments that support our strategy of delivering differentiated performance. Our confidence in the outlook is reinforced by the strategic investments made over the past several years. Since 2022, we have deployed and incremental $300 million to broaden our capabilities, streamline our operations, and strengthen our competitive position. These investments are now embedded in how we run the business and are reflected in our financial statement. At the same time, the benefits they unlock are only beginning to materialize and will continue to build as we move forward. We focus first on elevating front-end excellence to create a more efficient and responsive operating model. As part of this effort, we have expanded and reorganized our sales team to ensure alignment around pricing and improve coordination across the organization. This approach gives our team clearer priorities and strengthens the connection between how we engage with customers and how we generate profitable growth. We also expanded our portfolio through joint ventures that increase our share of wallet and allow us to offer more comprehensive solutions to customers. In addition, our AI-enabled tools and upgraded e-commerce platform are making it easier to do business with Linux by improving our dealers' code, order, and receive support. Operationally, we have made meaningful progress Our expanded distribution facilities enable a hub and spoke network designed to improve speed, reliability, and fill rates. We enhance this with new IT systems for warehouse and transport management that reinforce network productivity and efficiency. On the manufacturing side, we doubled the square footage dedicated to our commercial operations completed a major product redesign to meet regulatory requirements, and continue to advance our heat pump portfolio for long-term electrification trends. Looking ahead, we will continue to invest strategically to support future growth. In 2026, we will add new customer training and engagement centers and build our digital tech stack to enhance customer experience. We will also invest in automation across our existing labs build new test chambers to in-source certification, and expand our engineering capabilities through new R&D centers. We anticipate these investments will carry attractive returns, expedite innovation, and improve customer support. In summary, Lenox is positioned to respond with agility as demand recovers while continuing to accelerate growth and improve margins well into the future. With that, I will turn it over to Michael to review our 2025 financial results and 2026 guidance.