Lennox International, Inc.

Welcome to the Linux 2026 second quarter earnings call. All lines are in a 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 1 on your phone. To exit the queue, press star 2. As a reminder, this call is being recorded. I will now turn the call over to Chelsey Pulcheon from Linux Investor Relations. Chelsey, please go ahead.

Thank you, Madison. Good morning, everyone. Thank you for joining us as we share our 2026 second quarter results. Joining me today is CEO Alok Maskara and CFO Michael Quenzer. Each will share their prepared remarks before we move to the Q&A session. According 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. Thank you for joining us today. Please turn to slide 3 as I turn the call over to our CEO, Alok Maskara.

Thank you, Chelsey. Good morning, everyone, and thank you for joining us today. Please turn to slide 3. The second quarter demonstrated the strength of our direct-to-dealer business model, our dedicated talent, and productive actions taken to manage the current operating environment. I want to thank our employees for improving our customer experience through enhanced digital and distribution capabilities I also want to thank our customers and channel partners for navigating a dynamic market environment alongside us. Lenox delivered a solid second quarter. Revenue increased 3% to $1.5 billion, total segment profit increased 2% to $355 million, and adjusted earnings per share were flat at $7.72. Within Home Comfort Solutions, year-over-year quarterly performance improves sequentially, though the pace of end-market recovery remains muted. Elevated mortgage rates, inflationary pressures, and historically low consumer confidence are constraining underlying demand. Looking ahead, channel confidence is continuing to grow and consumer confidence is starting to rebound, which supports our positive long-term outlook for the market. Building Climate Solutions once again performed exceptionally well. We are seeing signs of progress across commercial end markets, momentum in emergency replacement, and strong execution in the field to gain share and grow margins. Taking together, the results from the two segments demonstrate the value of our portfolio and the balance it provides across market cycles. Our long-term demand outlook remains unchanged, even though the residential demand recovery has been slower than anticipated. As a result, we now expect the most meaningful recovery benefits to extend into 2027 rather than occur in the back half of this year. While we are reducing our earnings outlook, several key elements of our 2026 financial framework such as revenue and free cash conversion have not changed. Our balance sheet remains healthy and we remain on track with our inventory reduction plans. Their combined strength and the industry's long-term outlook provides us with the confidence to continue investing in the business, advancing strategic initiatives and strengthening our competitive position. Now, please turn to slide four. Let me spend a minute on our recently completed acquisition of the Comfort Air, Century and Coast Air brands. This acquisition is an excellent example of a disciplined bolt-on M&A approach. The acquisition expands our reach into small and mid-sized distributed channels and broadens our product offering, allowing us to further accelerate growth. It also sharpens our focus on customer experience by enabling one order, one invoice, and one shipment to our distribution and contractor partners for most HVACR equipment, accessories, and Parts. Finally, we see meaningful opportunities to drive margin improvement through product integration, logistics synergies, and streamline SG&A through the application of the Lenox Unified Management System and expect the business to be accretive to our EPS in 2027. This strategic bolt-on acquisition along with Zero9 and Subco acquisition completed in 2025 and the AES acquisition completed in 2023 reinforced our disciplined capital deployment strategy. Now, let's turn to slide five and discuss the current demand environment and how we are positioning the business for growth acceleration. The factors affecting residential demands today, including affordability pressures, weather variability, We continue to invest in innovative heat pumps, and our direct-to-delay model to make it easier for customers to work with Linux. Leveraging our successful acquisitions, we are expanding our parts, accessories and service offerings, thus creating additional touchpoints with customers. At the same time, we are leaning into initiatives that strengthen our long-term competitive position, including distribution network optimization and partnerships like Samsung and Ariston Rather than getting weighed down by short-term market fluctuations, we are executing our strategy and investing in the capabilities that matter most when demand returns. With that, I will turn it over to Michael to review our financials.