Lennox International, Inc.

Welcome to the Lenox 2026 Third 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, Chloe. Good morning, everyone, and thank you for joining us as we share our 2026 third quarter results. Joining me today is CEO Alok Maskara, CFO Michael Quenzer. 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 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. Thank you, Chelsey. Good morning, everyone, and thank you for joining us today. Let me start with our third quarter results on slide three. Third quarter revenue grew 10.2% to $1.6 billion last year.

while total segment profit declined approximately 2% to $323 million. Adjusted earnings per share declined 7% to $6.84. Double-digit revenue growth was driven by continued outperformance in building climate solutions, contributions from acquisition, and improving residential sales volumes. Profitability, however, fell short of our expectations. In response to the competitive environment, we adopted a more dynamic pricing approach to defend and stabilize our residential market share position. We are encouraged by the early results from these actions, but the trade-off was lower price realization at a time when tariffs and inflationary pressures continue to increase. Within Home Comfort Solutions, organic sales improved meaningfully from the second quarter and our share position began to stabilize. At the same time, underlying demand remains constrained by homeowner affordability, elevated mortgage rates, and broader consumer uncertainty. Building climate solutions delivered another quarter of double-digit growth with revenue of 24%. Margins remained healthy, although higher tariff and inflationary costs were not fully offset by pricing during the quarter. Given our third quarter performance and expectations for the remainder of the year, we are reducing our full year earnings outlook. Our focus now is not only delivering a strong finish to 2026, but also on retooling the business to target consistent growth and revenue, profit, and EPS in 2027. Now, please turn to slide four. We have launched a recovery plan focused on regaining share and restoring margins. While the near-term environment has changed, we remain confident in our long-term strategy. Our recovery plan is centered on four actions and we are moving with urgency on each of them. First, pricing. We are rewiring our pricing approach to be more dynamic in current competitive conditions. This means being more responsive and targeted The objective is to defend our existing position and recapture share where we have lost it while remaining disciplined about the economics of our business. Second, productivity. We are right-sizing the residential business for current market conditions and accelerating productivity across manufacturing, With the A2L conversion behind us, we are able to dedicate more resources to productivity, which is expected to play a larger role in restoring margins. Affordability has become increasingly important for homeowners, and entry-tier products have gained more relevance in the market. We are refreshing our entry-tier portfolio with new products including additional site discharge offerings. More accessible price points will also strengthen our product portfolio for new construction. We are pleased with the heat controller acquisition and early performance is in line with our expectations. Strategically, it has provided new insights and capabilities in the entry-tier market and broadened the portfolio available to us. We see additional opportunities across parts and accessories to broaden how we serve our contractors and distributors. Finally, promoters. As evidenced in our Net Promoter Score Insights, we have a strong base of promoters across our traditional residential and commercial contractors as well as our commercial national account. Within residential national accounts, particularly private, equity-backed contractor groups, and residential new construction, we see an opportunity to deepen relationships and create more promoters. To capture that opportunity, we are updating our value proposition and expanding our capabilities to better meet the evolving needs of these customers. We also continue to strengthen the relationships that has made us successful across our traditional contractors and commercial national accounts. These are actions within our control and execution is already underway. The near-term objective is to stabilize share and improve profitability. Over time, a stronger portfolio, a more advantageous cost structure, and deeper customer relationships position us to return to consistent growth and margin performance. With that, I'll turn it over to Michael to walk through the third quarter financial results in more detail.