Lennox International Inc. (LII) has reported a 30.15 percent plunge in profit for the quarter ended Mar. 31, 2015. The company has earned $13.90 million, or $0.31 a share in the quarter, compared with $19.90 million, or $0.40 a share for the same period last year. On the other hand, adjusted net income from continuing operations the quarter stood at $16.80 million, or $0.37 a share compared with $20.80 million or $0.42 a share, a year ago. Revenue during the quarter went down marginally by 1.38 percent to $685.80 million from $695.40 million in the previous year period. Gross margin for the quarter contracted 41 basis points over the previous year period to 23.77 percent. Total expenses were 96.06 percent of quarterly revenues, up from 95.13 percent for the same period last year. That has resulted in a contraction of 94 basis points in operating margin to 3.94 percent.
Operating income for the quarter was $27 million, compared with $33.90 million in the previous year period.
"We continued to see strong momentum in our residential business in the first quarter, and our refrigeration business was as expected,” said chairman and chief executive officer Todd Bluedorn. “However, our commercial business saw the timing of specific national account equipment business shift beyond the first quarter into the second through fourth quarters of this year."
For financial year 2015, the company projects revenue to grow in the range of 4 percent to 8 percent and diluted earnings per share from continuing operations to be in the range of $5.14 to $5.54 GAAP basis and $5.20 to $5.60 on Non-GAAP basis.
Operating cash flow remains negative
Lennox International Inc. has spent $122.20 million cash to meet operating activities during the quarter as against cash outgo of $125 million in the last year period. The company has spent $18 million cash to meet investing activities during the quarter as against cash outgo of $17.30 million in the last year period.
Cash flow from financing activities was $144 million for the quarter, down 0.21 percent or $0.30 million, when compared with the last year period. It has made net debt repayment of $161.30 million. It has raised net of $0.60 million by selling common stocks.
Cash and cash equivalents stood at $36.70 million as on Mar. 31, 2015, down 5.90 percent or $2.30 million from $39 million on Mar. 31, 2014.
Working capital increases
Lennox International Inc. has recorded an increase in the working capital over the last year. It stood at $369.80 million as at Mar. 31, 2015, up 9.57 percent or $32.30 million from $337.50 million on Mar. 31, 2014. Current ratio was at 1.48 as on Mar. 31, 2015, up from 1.47 on Mar. 31, 2014.
Cash conversion cycle (CCC) has increased to 85 days for the quarter from 76 days for the last year period. Days sales outstanding went up to 57 days for the quarter compared with 55 days for the same period last year.
Days inventory outstanding has increased to 86 days for the quarter compared with 74 days for the previous year period. At the same time, days payable outstanding went up to 58 days for the quarter from 53 for the same period last year.
Debt increases substantially
Lennox International Inc. has witnessed an increase in total debt over the last one year. It stood at $1,085.80 million as on Mar. 31, 2015, up 92.45 percent or $521.60 million from $564.20 million on Mar. 31, 2014. Total debt was 57.77 percent of total assets as on Mar. 31, 2015, compared with 31.56 percent on Mar. 31, 2014. Debt to equity ratio was at 69.60 as on Mar. 31, 2015, down from 1.15 as on Mar. 31, 2014. Interest coverage ratio deteriorated to 4.74 for the quarter from 10.27 for the same period last year.
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