Lennox International (LII) 6 Feb 182017 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Lennox International Fourth Quarter 2017 Earnings Conference Call. At the request of your host, all lines are in a listen-only mode. There will be a question-and-answer session at the end of the presentation.

As a reminder, this call is being recorded. to of conference Investor like Harrison, to now President Vice Relations. would turn over the Steve I Please go ahead.

financial of the through full Good quarter for morning. with the Joe today Lennox Joe otherwise time for Reitmeier. questions of re-queue and will for that Chairman and please this quarter ask are the unless In Thank a you the To Bluedorn; noted. take give performance mentioned issued review will to for to the International's the joining to discussed and additional we CEO, period Todd be reconciliation and couple any questions financial during year, and here the measures. against non-GAAP and will Q&A, follow-ups XXXX. outlook. the I'm financial morning, year us All limit company's Todd review fourth you we prior-year comparisons today release included this or measures yourself and CFO, performance the points key everyone GAAP earnings questions. of have for necessary

results better statements. actual this subject cause to are direct statements of would a everyone call, in and be our that The archived link give webcast forward-looking the you that of be the replay. could today's conference statements. These understanding materially webcast find remind making call numerous at on will to can You differ on for site www.lennoxinternational.com. like a of operations, to certain our from we will I uncertainties to website risks to course that such

disclaims or as information, any result with available Lennox see obligation forward-looking statements, or to uncertainties, new the update and publicly revise risks these or concerning SEC. of events, company The intention information otherwise. filings any future a whether For International's

to CEO, over and Now, Bluedorn. call Chairman Todd turn the let me

morning, and for Thanks, joining us. Steve. Good thanks everyone,

another $XXX a of thoughts a XXXX year record points X% record the record Let segment XXXX. and from Lennox was to continuing a high rose quick me to $X.XX. record then new XX% new company up On posted $X.XX. $X.XX XX% basis, record a XX% profit. was and Adjusted GAAP Revenue set adjusted for continuing highlights XX% operations up record review margin an International operations on income GAAP some a to expanded profit total rose was as highs fourth the operating a billion. XXXX margin and from EPS quarter and operating to with year to overall start $XXX revenue, discuss EPS basis XX for million. total a of XX.X%. to segment up million in

by profit up XX mid-teens replacement were with for at set up Segment basis profit profit off information Our the year. technicians improvement revenue Commercial, performance technology in for ticked highs Residential leading margin as much show it rose Investments affected construction new profit. XX year replacement And XX.X%, from for business unfavorable segment we Texas hit Refrigeration and constant future was business margin to new to second significant made weather margins by new including and growth margin. Replacement that mix the year, and the the was year. up the to full of from X%. the business. normalized continued the business year company's products for hurricanes margin margins to up Investments single-digits weather highs dealers, X% distribution was revenue, and the the expansion Revenue for the affected more from and for returned new revenue basis homeowners. In and over X% of for and levels XXXX mid and growing investments and range revenue led the by for construction points severe profitability hit points. and unfavorable was were in XX.X%. new and segment consecutive to Commercial XXXX. Florida. from segment Residential up up than the was Residential faster currency

we profitability was had of and single-digits investments XXXX. was Residential, Commercial made down account business from for up construction the and for was future large single-digits mid-year. mix mid-teens the Replacement in In unfavorable revenue the mid shipments As revenue year. growth and equipment North certain America, national new for the revenue high up

another vertical way, many a year low up business The Looking new was at customers with revenue in XX double-digits. record company equipment account markets. new business national had the winning across account national

Account On for down currency. overall, the revenue to side, from HVAC constant going with was In regional profit was up single-digits. low the Equipment up Segment local basis X%. low business and revenue was Service double-digits single-digits. up revenue Commercial down our Europe, was expanded National Refrigeration, X% In Lennox the Margin service as XX%, target well. plans mid year. year, at points on XX into

single-digits. region low currency, at America by single-digits, was revenue Asia-Pacific low mid at as was down was constant Europe America. South up was Looking single-digits, North down

Now quarter. turning to fourth

was program and segment XX% for up On for to an well was XXX margin vested up as to new from participants. profit down charge from year the EPS we single-digits. the operations talked one-time, Segment that to mind, to continuing the company fewer GAAP basis, quarter as off the on a quarter, buyout product on at absorption replacement construction X% margin and points a of operating down pension revenue Total GAAP as year expansion adjusted days record flat, EPS. quarter a as ago, earnings. and unfavorable was quarter prior-year increased nice for as segment the X% timing last quarter this In we total revenue slightly Residential, fourth was about and quarter start set EPS with XX.X% for in get the that profit points of basis to X% over the X%. margin declined revenue costs X% segment in is than rose was profit quarter highs continuing we've income profit and currency well course year, to a XX.X%. Adjusted first quarter. which reported operations XX% down expanded had up new total As Residential $X.XX. a fourth the relatively levels. fourth XX expect business year full lump-sum With year, certain Residential company first drop-through in other constant and the mix, compared the XXXX. margin in lower than factory fourth and impacts the mid that basis had

new low revenue the in In was up X% quarter. highs. double-digits margin profit segment points currency quarter. single-digits in North Revenue Replacement established at XX.X%. was account and fourth quarter up and Commercial, constant construction rose to the was expanded revenue XX% Turning the margin quarter, fourth basis revenue, to XXX National low profit revenue and Commercial was up revenue flat America, double-digits. equipment equipment down new for was as low

National a currency On was at revenue the regional in mid service from currency. was quarter. the Account Lennox revenue And at quick mid-teens. Refrigeration, is constant and In down double-digits Commercial was up and the North constant XXX businesses the America America at double-digits, Service talked Equipment as that low revenue Asia-Pacific X% quarter down constant single-digits. local a up profit the down we South of segment HVAC points to in single-digits. days was was low mid-single-digits fewer margin beginning the were Europe XX.X%. currency, and about Refrigeration rose From call. expanded regional X% that's down Europe, low on side, reminder, fourth X% revenue down at basis perspective In

with planned taking services. flow growth Looking X% to early range benefit about combination to ahead from place our cash $XX.XX us XXXX, by for cash of This for in timing. we paying vendors resulted but impacted a capital our capital of the million it to $XXX revenue of we benefit are $X.XX net lower to guidance XXXX, $XXX XX%, XX% transportation With the $XX for year. to flow we X%. are for With and by for working from benefit from from material a in expect tax of U.S. from and our new overall legislation, from are to million Combined our million. $X.XX guidance raising sales the continuing cash free of in for company guidance to $XXX tax new due million raising free for EPS million approximately a $XX operations in This quarter we XXXX full million guidance timing missed the than XXXX. the working reiterating $XXX cash previously of primarily XXXX, flow we rate in free free in cash late flow

a on In the million first we $XX cash in repatriate expect addition, to tax-free basis. quarter, of

grow profitability, to continue repurchase drive business stock. earnings will the time with the and invest and over in dividend growth to We

plans for are $XXX from repurchase million $XXX the increasing For XXXX, we our to full stock year. million

it Joe. over Now to I'll turn

X% I'll and fourth Todd, Cooling relatively price flat. & on and good and some Residential was financial X%. flat from up down details In quarter the million, comments revenue you, starting Heating and the the segments Cooling. flat, full & Volume and Residential mix the for price Heating $XXX quarter, fourth Thank a year was quarter was with and record, business combined everyone. mix morning, additional with provide

a was XXX mix, and was segment impacted engineering-led $XX XX%, price, year the basis and lower revenue. margin million, down ago, absorption neutral exchange. was costs offsets commodity than distribution exchange sourcing and to reductions, higher higher X%. costs, lower product favorable and Segment profit down Residential Foreign cost foreign was factory unfavorable Partial by profit points, other of timing included investments. SG&A

and full and about billion, was was year, X%. X%, the Residential record up down. was X% a with price combined up flat, mix price Volume up For segment revenue mix $X.XX

Residential up record X%. margin revenue. basis to was record was a XX million, neutral up Segment a XX.X%, was exchange Foreign points. profit $XXX

a Turning mix & Volume flat $XXX up was up was record, to and and fourth price X%. Commercial revenue was our quarter Cooling Commercial combined X%. Heating million, business,

positive margin Account Partial was segment and higher a quarter costs reductions, price, HVAC X% up fourth profit basis million, quarter volume, exchange revenue lower Commercial North equipment Services record, National points. revenue. other cost SG&A. single-digits, revenue warranty sourcing XXX up down engineering-led product single-digits. low Segment mid-teens. impact costs Europe was by $XX XX%. up higher had commodity was low up a a and higher lower record, Foreign revenue America was XX.X%, fourth include was offsets was expense. and profit HVAC positively impacted on Segment Commercial Commercial

X%. For and price the $XXX a revenue Volume was combined record up full up X% and down. price with mix was up flat, was Commercial mix million, year, and

down up on Refrigeration our XX% In and was was segment, margin Foreign exchange was million, $XXX was had positive quarter up revenue. down a mix a in was basis and XX.X%, revenue X% Segment record X%. fourth points. combined price XX profit X%. Segment X%. impact $XXX million, down Volume the

X%. exchange profit up North single-digits. a margin From million, favorable on Segment mix, costs. absorption down was revenue growth low and a SG&A. currency. and in factory positive Refrigeration was Europe impacted Todd positively reported addressed other $XX up costs single-digits volume were low higher Asia-Pacific up double-digits, impact and and perspective, was America cost Partial had down South XX.X%, lower by lower basis, was points. low Foreign was X% commodity basis reductions, lower revenue. profit offsets a segment engineering-led America On both regional included constant and Segment XXX product and sourcing

a flat, full and Volume was was profit basis price was Segment X%, was XX profit X% $XX up slightly. up margin foreign the positive Segment revenue year, million, was X%. XX%, up had mix $XXX and Refrigeration down exchange million, combined For points. impact.

in U.S. Now the related The regarding million special charges fourth associated net and of after-tax $XX.X write-down had tax deferred the for million. quarter. $XX.X various tax items included net. legislation assets $X.X the million and to other This company items of

million a $XX had As share-based benefits from excess tax for partial company the compensation. a offset, benefit of

For company totaling had full the million. the after-tax year, $XX.X special charges net

charges of the million assets, for write-down million $X.X and $XX.X other the for adjustments, the a company to various deferred for Beyond tax million legislation product had $X.X items. U.S. contingency associated quality total legal of tax special related special and the million $X.X

partial million in XX.X% tax of a benefits from from benefit XX.X% the the share-based prior-year the SG&A was down As and million fourth the offset, for a dollars company of quarter year. $XX.X $XX Overall, compensation. or $XXX had in million revenue, Corporate million expenses for fourth quarter, the excess $XX full for quarter. were

$XXX was revenue, prior from SG&A million, down XXXX, in For XX.X% of the overall year. or XX.X%

million the XXXX, dividends compared the million paid in For to XXXX. from the XXXX, $XX year and for had million the in year. from X.X. operations company full million in stock. a $XXX end in $XXX and equivalents million prior of debt $XXX were $XX the the approximately the flow million year. million of $XX cash of Capital Total end were of ended year. was at $X the expenditures company of to In debt-to-EBITDA quarter, million up million XXXX Free ratio repurchased year, $XX $XXX prior we $XXX compared billion cash the for Cash at with the was company and fourth cash

I before Q&A, Now our XXXX. it for turn I'll outlook over to review

underlying are Our market unchanged. for assumptions XXXX

For the up American mid industry Residential overall, North be we to HVAC single-digits. expect shipments

gains, remains growth America International to foreign be underlying low shipments single-digits, low to revenue exchange. environment expect our unitary We North X% impact share for Based Refrigeration XXXX, Commercial for the market and shipments minimal for on a to up X% Lennox North America guidance with expect be and market we targets up single-digits. from

our for legislation. from $X.XX tax for $X.XX of new of new We full reflects EPS the rate to range effective increase lower continuing from from U.S. operations year $X.XX This a guidance our raising $X.XX to to tax are range range a to the $XX.XX.

of XXXX, be guidance currently, recognize effective a to tax expect approximately timing tax effective first quarter-to-quarter XX% For from to and, when will we our XX% range to benefits XX%. tax of to XX% lowering vary the to required we rate XX% certain we in rate our quarter. are are The

guidance working for tax between from XXXX, capital cash the from to mentioned, $XXX year. are free full $XXX our approximately the rate cash million we flow Todd raising the As million for benefiting timing additional and lower

As mentioned, million plan basis. $XX quarter, first tax-free Todd we the also in a to repatriate on

from puts the Let our me points now assumptions for guidance run takes and XXXX. through and key the other

in planning price to continue $XX of We and on are $XX year. headwind the from million for expect million XXXX of increases commodities

from sourcing We reduction engineering-led expect and continue to savings in $XX cost programs. our million

at expect we focus our and million as on productivity We in Residential factories, plants $X automation initiatives. savings from other our U.S.

a million distribution year, benefit interest at year. headwind million other expect this will $XX another a is and million and and Corporate $XX million targeted $X for headwind. the A $XX $XX We are guidance be net foreign year million expense expenses few approximately from investments points. exchange, be will SG&A expected growth to be this full and

for expected year which between our million the expect to that, to $XXX average with diluted Capital Q&A. let's the up this XX weighted to million. go million be expenditures to to share We continue $XXX approximately count of year. plans And stock repurchase shares, our million prior $XXX be for year, are full includes to XX million still from guidance of the

& First line Gautam Please we'll go Company. Khanna to with Cowen go of ahead.

Good Thanks. guys. morning,

Hey, Gautam.

questions. few A

sort any terms in from what terms you just of that? catch hurricane-impacted regions up the to you're or see demand? seeing in of Any First, when color expect on of

weather see I through bit, and mean, see in off I pieces, What moving little current was the it's I now, strong bleeding some a so year between fourth Gautam. least hurricane quarter. To and the in probably start many just think with we're we honest There's right in you, mean, at be first quarter we'll did a Residential. bit the and a to little in real impact,

is margins. a start first on quarter, month January revenue to strong both in on the While we're least important and off

weather but hurricane, I think country be parts it's of really the so, got impacted December. the from many may end And of we some of of by the that cold in more

by honestly what's question, hard driven it's pull to So, really the to hurricanes. your answer out

Understood.

inflation. of million commodity $XX offset that to getting the anticipate you mentioned pricing You the

industry? in market, Just what seeing price discipline you're in and of can region end maybe terms comment generally you the by

so we say so going as mean, when and But have – the we're always – good. get to that and I same it. Everyone I are P&L pressures. the same we're have far, all feeling confident competitors we Yeah, our

June, into when we're get it. April, real you sticks. So season, I see you where acid get really May, what is into get that's mean, to to we're confident the going summer But, get when the you selling test

sticking to. is just expected it everything far, So we as

And one. Okay. last

unusual XXXX so like looks QX XXXX much normal number year in the than because comp some have obviously you terms more to this QX the normalized working we back in days we working quarters of days XXXX. easier remind a had in in each like, of can do us, and Just it does because obviously quarter,

Yeah, exactly XXXX. right. XXXX, they We number XXXX we with consistent with were they're what of won't have like any days, anomalies did in in in the

said. just what though different than is Which he

Okay. Thank you, guys.

going other not bounce to back It's way. the

No, it's not back. going to bounce Correct.

thanks. Okay,

you. Thank

JPMorgan. to Next ahead. with go we'll go Tusa Steve Please

morning. Good guys. Hey,

Steve. Hey,

the I not don't had I a look but that I You savings? called SG&A, we factory investments, million think guys lot increase you out by as but as at just previously offset as moving either, calling that numbers $XX being of mentioned around. of Do this far recall. recall the

detail items? just those maybe So, what's changed within

changed the than other XXXX Nothing's in our guide tax. in

So, when be million. December, headwind of increase. million $XX all haven't the that you going points more past other the we're the we point million, making out as In growth guide same. that called prior And you're $XX to in years were in we million, But slow years recall, SG&A. number may of to year-over-year like the $XX SG&A $XX was right, were

of taxes. than while year-over-year is technically meant And technically, increase is million, to have not other an the than – really so, an $XX the points changed demonstrate it much the that none years. it's prior show been in guide increase, the and it's is less increase But

when compressors pretty that. and going you are the year-end rest prices? are in, that cost visibility for also things and commodity components You like like the base of as motors on include that of some year have And for far as feel you guidance your those confident the the headwinds,

just best from and the doesn't commodities, commodities, steel say copper, make are as million the be then approximately headwind raw balance of derivate so The of but are and $XX year on there to others, later increases. you sourcing think and is motors out. we of conservative from it increases we effects time the on on aluminum, The million number for break it we're in price hedged Steve, for and commodity to the effects $XX guess. raw reductions. our XX% were this And XX%, million derivate count so and I'll that spot aluminum Well, the $XX know, captured contractual I'll all it's it year the incorporates $XX on have And going we cost engineering-led compressors. of I the expectations headwind prices copper million of benefit And because when appropriately get our we the net take a in future then and think what calls some on on year. those. we is And,

from And sort so so, of copper of much we to December as it's and into $XX aluminum the up, gone last anticipated end the but some of that, not baked January, week, sort and of million. have all

last And What the kind question. is capture implied Resi of one your Okay. for price for year? then

other It's the sort businesses. in similar of

$X it's revenue company's million of little on billion $XX order So, bit a X%, more. (XX:XX) magnitude a

it. Got your lot. a Thanks math. the Thanks with help for

Yeah, thanks.

Next question KeyBanc. Hammond go is ahead. with Please from Jeff

good morning, Hey, guys,.

Jeff. Hey,

more replacement than investment there? emergency out XXXX just market can mix this emergency through? and more kind you're continue Commercial, then, just ability the you the it Thanks. think big inventory, more thinking shows replacement trade to a into talk and how people how your to we that that you curve are price to fits how go in with shakes also, do as And player, share in of gain coming flows like, On and that seems about about

to the efficiency do. Our mix will that like with always us. on change up we is help mix high product, also, regulatory our think But continue we expectation we'll

with minimum in at think As you Jan think efficiency minimum we point. know, new Commercial good X. cost a the of product, requirements the design changed our And meet we very the we efficiency

more of cost the we positive mix. margin that's on think so bit get and can we sort pass think a so, little increases, And we plus

own We to think our think In December, still of about the we at other contractor how important we're business stores, the fact very of grow business, distribution, But in parts the and plan replacement, example, and it. our terms us it. investments national of definition accounts that local making the we're emergency thinking broadened when spec, we also. allows Commercial well-positioned. emergency with sort of Also, PartsPlus there an then that Analyst the own we talked Day local regional we're to there's and about part is replacement for grow There's contractors, of. there's significant we

or gained years continues. in last Commercial we and business we our think we've the So, six think five that share

And kind just on versus new Okay. seeing speak macro economy of maybe what you're mixing in to this up? favorable in and mix Residential, more replacement, customers Thanks.

one we memory, all mix or and add-on in I'm were up to obviously, replacement still premium then, construction in The single-digits. high construction buying above business grew, new from primarily haven't there. of new entry-level, more product. as business, XXXX, saw going the And tick a like We people to tends in mid entry-level mid-teens. was XXXX be more seen within much shift Add-on replacement

sort we'll see more built just what from a – mix new effect. so, growth that and for our XXXX have brings. models And of with as add-on we aligned and to rates, we had replacements has And construction we go XXXX the down

Thanks, guys.

Thanks.

Thanks, Jeff.

Merkel Next, go Blair. Ryan go William with we'll ahead. Please to

Good morning, thanks. everyone. Hey,

Ryan. Hey,

to then, sustainable? The Commercial. Was there want stood one drivers? I is quarter two margin really with how or So, expansion really much in start And out. the big

which, have a up. we profitable Commercial business. more were lumpiness other is average, on segments they spike national than quarter there in We customer, XXXX worry, said, depending with margins quarter-to-quarter, and that a There's don't had on our in and accounts really quarter in was and that business, the our in you nice of from fourth quarters our down XXXX,

in quarter also service profitable is our business, us. for nice a had very which also We

three-year is to little over ended a to XX%. think question of, XXXX mean, XX%. the our target get margin year XX% for We And at up I Commercial the bit I so, improvements to to in it is absolutely. sustainable,

to continue going in are to expand that margins business. So,

then Commercial. it. And sticking Got with

efficiency potentially law, what in year driver, new change and the help about talked that a pretty seems in But already standards big depreciation the maybe but there's a there. to price just cost could me XXX% us it there. about now You benefit one, the be tax

more guys, on obviously, I Our absolute a bit customers rather opportunity. talking little the team mean, it's flow cash lukewarm our to cash are difference. a timing than flow

you when replace national And and have the the bit, little should in obviously, is all when unit. just and equipment be is models the of material anyhow. lay replace the certainly you so, And costs they they trade-off of local do earlier? the it changes but accounts business sort other a unit a not in making their way, sort more choice no breaks the decision what emergency they when right replacement of, NPV the of of a The and

mix? timing Okay. And of basis versus down versus just points was cost the on of then absorption unfavorable much you margins XXX down lastly that how Residential just year-over-year, can break

a third than prior I and to years. skewed more of third would to in But but mix. third, say more some I think broadly costs lower is had a driven XXXX, of was more always product had weighted I it accruals. true-up product to order we and it, the timing the of model magnitude, first the two some costs, the and don't by a expense – it's to factory timing And I in than over QX was know, of I if think, it the they're year, and absorption

Thank you. Okay. Good.

Thanks.

with Tim from question Please ahead. is Our Baird. Wojs go next

Hey morning. guys, good

Hey, Tim.

that less on does it later absorption, on I that the with the guess, demand in the anything due quarter just have mostly last production in do or factory just days? was to and in the coming a point quarter little to

days. it's primarily think the I

Okay.

then price can to for Okay. the you P&L terms just in set of year, hit the do just XXXX? of so kind we the cost of cost, how price in of expect And level cadence kind ourselves

lag I and come think the go. ready up selling early should caught to maybe year, summer be we'll season, we completely but the in

Okay. Great.

year with that to builders in has sort more confident national cranking. in do we'll accounts the mid-year of account started And we and be given to national national getting lag pretty just place. we're pricing that put last and place, But things come

Okay. thing And there? the the same then do think we buybacks, cadence onto about how

short but We'll to keep a is question. when, I'm the bit and how directly the your of talk, going but not you little answer answer tell the I'll what, flexibility. we

going model world pro it, to it continues I it. burn, if the I may but just lay during if would rata in year, the was to we So accelerate

Okay.

Sounds Good good. XXXX. on luck

Thanks.

Next, we'll Please to with Vertical Jeff Research. Sprague go ahead. go

Thank Good day, you. everyone.

Hey, Jeff.

loose couple a me. from just Hey, ends

just and relative Todd, that some but price a to we Resi? more got like. your business you in movement structure, you cost and price that share same the the Commercial seeing everybody's cost First are unitary, per Commercial heard competitive on remarked on chatter Are that have a people can being little bit and you draw distinction between

nothing a line edges lowering the meaningful always empire, a sales long cliché about mean, there's been is, different time. people to on talk way. in skirmishes. And always if the for pitch there's our mean, I my of it's not I but than guys, they No. you price,

I mean, price. talking you're but with lead I Carrier, assume haven't I seen Carrier we it. see of sort So about don't

Okay.

Just on Why there? is some using on the repatriation. this – Are on the tax Joe, maybe something you just credits else for free? or going

Yeah.

some continue a tax-efficient ways back We at to we've tax-free. restructured us our return that's of free way up entities cash we legal bring us some to that credits can and enabled and look it enabled to tax in

that a tracking you a guidance. cash guess, your little Is this now kind reform conversion's now in. we're in roughly a basis thinking just normalized bit company on below also the XX% was free your working timing, see on about that I capital if XX% normalized maybe conversion? world tax flow for I wondering we of the how adjust

to might want closer I depending use. it XXX% be you the horizons think to on

investments now dollars right the we're think in and I spending business. making capital

use I model, a think I two net was to at if model, I XX%. five-year I might was using If of three-year closer a closer I or income. use looking might to XXX%

you very Great. much. Thank

ahead. Go Our next with question is from Robert Susquehanna. Barry

is Lacks my on Jake This question. Rob. for Hi. taking Thanks for

You're welcome.

in mentioned in mid-teens growth You construction in XXXX. Resi new

Yes.

that And reflects say new the how's you the share pricing year-over-year, significant gain? business? thinking on Would construction

it's just robust construction think to gain, of market. reflects like new maybe think I'd a it but some share I

So quality maybe on relationships reflects the mean, normal. people always this national with there's pressure, value with at I relationships for trying provide them. the our footprint nip to of have beyond but to margin, distribution builders I it's they strong our And of to to builders. the everywhere big a position even this little company-owned and but we America-wide builders. deliver sort relationships our that for us share is business, allows and our service strong same of bit and think Pricing national heels gain, maybe and ability North level

Okay. January And in on do and XQ? the latest there think down of weather outlook for What's the the Great. at you start the may slowed U.S. of any non-Res. then Thanks. anything have

is for hair, pretty call slowed our new market. and down but on said, be up that's the better still America it unitary have view construction or weather – we're a may of Commercial January North to call single-digits Our confident in for our low the

Great. Thank you.

Thanks.

go with Next Fargo. ahead. Wells we'll go to Please Rich Kwas

Hi. everyone. Good morning,

Hi, Rich.

back just so doing? commodities. How are you on Todd,

here. steel, I much some So, in assume visibility inflation have as don't got know I there. you've factored you

path how for What in guidance? think cold-rolled, here here and on we about that hot-rolled should terms look (XX:XX)? of So we higher going impact should

pricing give that because second million know mean, $XX unknown. of half right, baked we for won't into that's the the the variable I an I what you year, is don't

half and we our of take the to to on estimate second do best curves have future going be. year is so And what

right now think we is hard you number number. I we so, of and sort sit, now baked any what is to where million our it's of given day's of long and $XX think would with tell into we sort the short And have is right movement, What reconcile this I it.

right. year's All Okay. Commercial then QX, And was really last strong.

think construction and think think due here? should Commercial warmer Is lot something last to quarter modeling was within of that volume done. it for favorable I that getting being we first partly about projects weather, we of a year as

March starts. again, in we're of a can start you is a little of the but and, but XX% I that to to to and put we're XX% think bit sort But, the maybe in, nice the off of off come. January of quarter, when weather going warm a planned have is we're to big part it timing helped and nice replacement a it again, new some start of

Refrigeration, expect the on a we report time then by you And QX? Okay. decision should

You how these things Rich. go, know

So it. as to not, looking it we sorting they they call, And we'll when it's still it. going it's we'll talk exactly we're do say do do. ready what about still then. go. QX And We're say, if to it We're If have when we're go at something to it. we'll out

Okay. All one. Last quick right. Joe...

felt Belichick answer. with (XX:XX) like that I

That was a good job.

good? that Was

you've see been I enough watching Yeah. press conferences.

think You probably got think words I I in fewer did you fewer words. in it –

and was it my I'd it. decision made I just say

tax on quick real XXXX? beyond to Joe, rate, good XX% Is that XX%.

term and use this new I going We're at that that some legislation. of through you through the complexities when long Yeah, give point. would of And changes, insight. more sifting still and we'll the navigating

that. informed you on So we'll certainly keep

Okay. you. Great. Thank

Thanks, Rich.

ahead. go Please UBS. with Belfiore Chris to go we'll And

morning. Good

Hi.

openings, longer-term significant just right of a store given that where buyback, the guys guys off being investment, More So all impact you M&A, kind going dividends, flow that internal now? the you like see at piggyback do cash that? Are stuff on allocated? about basis, thinking one,

this but been we'll in of that think that's answer invest can has we're that we we've positive flow investing that dollar cash projects in the be first that think foremost. project regardless is debt business we yes, X.X%, business, have parenthetically we answer And about of the and answer can grow and Short NPV always is that X%, value the I free when talked find. mantra the every continues the the to longer

with if and we'll our core to there's obviously we'll business, and makes do comes over think sense dividends have and M&A available is we it, that some Second, grow earnings with that tax to dividends stock will sort the earnings left up faster. we'll And a give with back our then that and buyback. reform, so of grow what's little that time bit spiked implies shareholders

and to any or performance and there in that better margin then can quarter? With more item on strong kind quarter, just to in XQ provide had bit that in Okay. the the resolved be the the is that mix of sustainable issues other of going guys productivity in getting productivity understanding how you forward, seem terms of color in little you terms bucket a Great. just And Refrigeration. regard

I productivity behind us. think the issues are

the just driver a think business. I in of of the quarter mix the fourth was profitability

had factories was America, sort U.S. businesses point, your vis-à-vis there in other to our nice then problems productivity, mix North Some our the that in call, business some we of the and had we a of also Europe. our in factory both so what HRP a quarter and of and line business we're to fixing what doing

Great. a Thanks lot.

Thanks.

go Seaport to go with Liptak Walter we'll Please And ahead. Global.

if talk c-store year Hi, can maybe I the the question, visibility back-half-loaded thanks. the mix, for cold you're expecting in you wonder ask are store, a grocery versus early order we I'll just Refrigeration year? here about storage, the what from too. and

which but storage think some we've and of probably we segments, growth we're think the couple and We the other to last has in that convenience start headwinds continues years, early. where continue two XXXX. year, XXXX those seen it's grocery, we Cold the a nice had headwinds think just in like off

Okay. guess, kind and And accelerated that I any helping you'd Refrigeration? any kind tax XXXX not see something depreciation, reform that's of for of

working it tilt – I the cash and simplistically our baked I helps or value is time, of way model, think for that the doesn't wrong, side when the on the there's have think lots models the in detailed but margins, And right people it, economic customers of money inputs. of but, taxes the the get it. from again, depreciation for they're through on have about

think investments. And still of the so timing roughly they're I'd about the paybacks thinking same the and

Thank it. Got you. Okay.

Thanks. Great.

any comments. questions, to turn further presenters I'll back the for it And closing with no

for Thanks, revenue, highs record for wrap operator. XXXX with profit. To margin a new and up, year Lennox, was

a on busy, and The continues another thank nice us first day. XXXX to joining off quarter for in company's margin busy as is focus on want and to everyone such with today we the momentum I a expansion. Thanks. growth strong start year record

for Ladies participation. conference you for does today. conclude and your Thank your that gentlemen,

now disconnect. You may