Lennox Reports Third-Quarter Earnings Oct 23, 2002

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Lennox International Inc. reported third quarter results for 2002, showing substantial growth in margins and profitability. GAAP income for the quarter rose sharply to U.S. $28 million, an increase of more than 80 percent from $15 million in the year ago
period. GAAP earnings per diluted share were up 70 percent to $0.46 from $0.27 a year ago.

Reported operating income grew 28 percent to $53 million, while operating margins expanded to 6.4 percent from 5.0 percent last year. These improvements were realized despite a modest 1-percent 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.

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