DALLAS, TX — Lennox International Inc. (LII) has reported third quarter 2002 results that show substantial growth in margins and profitability. GAAP (generally accepted accounting principles) income for the quarter increased more than 80% to $28 million from $15 million in the same period last year. GAAP earnings per diluted share were up 70% to $0.46 from $0.27 a year ago.

Reported operating income grew 28% to $53 million, while operating margins expanded to 6.4% from 5.0% last year. These improvements were realized despite a 1% decline in total revenues to $819 million from $825 million in third quarter 2001.

If the FAS 142 accounting rule eliminating amortization had been effective in 2001, operating income in third quarter 2001 would have been $5 million higher and EPS would have been $0.35. Also, third quarter 2002 earnings benefited from the favorable outcome of tax contingencies from prior years, reducing the provision for income taxes by $3 million and adding $0.05 per share to earnings.

"LII has achieved our third consecutive quarter of improvement from our previous year's results," said Bob Schjerven, chief executive officer. "While demand from our commercial customers for heating, cooling, and refrigeration equipment and services has been soft, favorable weather supported our residential businesses. Still, despite mixed demand, our profitability grew significantly, we generated $62 million in free cash, and the debt level on our balance sheet is at its lowest point since LII went public in 1999."

For more information, visit the company’s website at www.lennoxinternational.com.

Publication date: 10/28/2002