Name:  Lennox International, Inc.

        Address: 2140 Lake Park Blvd.       

City: Richardson, TX 75080  

CEO:  Todd Bluedorn

Product: Heating and Cooling

Phone: 972-497-5000   Year Founded: 1895

      Lennox International Inc. announced plans to open a new manufacturing operation in Saltillo, Coah. under the name LII United Products. The manufacturing lines responsible for Lennox-brand Merit series air conditioners and heat pumps, as well as air handlers, will be shifted to Saltillo. The Merit series is currently manufactured in Marshalltown, Iowa; while the CB26 air handler is currently manufactured in Grenada, Miss.

      The three-year project was expected to break ground in the second half of 2007, with initial production starting in the second quarter 2008 and ramping up to full production by early 2010. The Saltillo operation is anticipated to be 300,000 square feet and employ more than 500 at full production. The projected capital commitment is approximately $45 million over three years and is expected to lead to cost reductions of more than $13 million by 2009, increasing to more than $20 million per annum by 2010.

      “There is fierce competition for the growing business in the Sunbelt region,” said Todd Bluedorn, LII chief executive officer. “Our Merit series offering is our primary Lennox-brand product line serving the Sunbelt market, and we must produce quality products at the lowest costs to compete in that market and grow our business. The Saltillo location offers significant manufacturing and logistics cost advantages to help us expand our capacity and flexibility to meet long-term demand and carry out our Sunbelt growth strategies.”

      The company’s current plans are for its remaining Lennox-branded products, including all furnaces, its mid-tier Elite series cooling products, and its premium line of Dave Lennox Signature Collection products, to continue to be manufactured at its Marshalltown facility. “LII began in Marshalltown, and still has deep roots there,” Bluedorn said. “The Marshalltown workforce is a high-quality workforce and will continue to be involved in the production of our more complex product lines.

      “The markets in which we compete demand the highest quality products and the most effective distribution, at the lowest possible cost. Moving forward, one of our top priorities will be to continually review all of our manufacturing and sourcing needs, finding opportunities to lower our costs and more effectively serve our customers.”

      Lennox was founded in Marshalltown, Iowa in 1895 when Dave Lennox, a machine shop owner and inventor, successfully developed and patented a riveted-steel, coal-fired furnace. In 1904, a group of local investors headed by D.W. Norris bought the furnace business and named it the Lennox Furnace Company.

      Today, Lennox International is a leading global provider of climate control solutions. It designs, manufactures and markets a broad range of products for the heating, air conditioning and refrigeration markets employing more than 16,000 people worldwide with operations on five continents.

      Lennox International is a leading provider of climate control solutions for heating, air conditioning and refrigeration markets around the world. Lennox International operates in four key businesses:

      •Residential heating and cooling.

      •Commercial heating and cooling.

      •Service experts.

      •Refrigeration.

Residential heating and cooling

      Lennox International offers a range of home heating and cooling equipment for both the residential replacement and new construction markets in the United States and Canada. Its product lines include air conditioners, furnaces, heat pumps, hearth products, and indoor air quality equipment that improve indoor comfort.

Commercial heating and cooling

      Lennox International provides indoor comfort solutions for retail establishments, low-rise office buildings, schools, restaurants, and other light commercial applications in North America and Europe. Products include packaged rooftops, split systems, commercial controls, indoor air quality equipment, and related equipment.

Service experts

      Lennox International is the company consumers trust for their heating, cooling, and indoor air quality needs. It operates dealer service centers in the United States and Canada that sell, install, maintain and service heating and cooling equipment for residential and light commercial applications in metropolitan.

Refrigeration

      Lennox International is a leading provider of commercial refrigeration systems in markets around the world. Its products are used for cold storage applications, primarily to preserve food and other perishables, in supermarkets, convenience stores, restaurants, warehouses, and distribution centers.

      Meanwhile, Lennox International Inc. recently reported solid financial results for the second quarter of 2007.

      Revenue for the second quarter was $1,042 million, up 3 percent year over year. Reported diluted earnings per share on an adjusted basis, a non-GAAP measure, were $0.87 versus $0.77 in the year ago quarter. Diluted earnings per share on a GAAP basis were $0.85 compared to $0.91 in the year ago quarter.

      “We had a solid quarter, with adjusted diluted earnings per share up 13 percent over last year,” said Bluedorn. “Three of our four businesses had both strong top and bottom line growth, exceeding our expectations. Through a continued focus on cost discipline, our residential business performed well operationally despite being adversely impacted by the weak housing market and cooler weather.

      “We expect continued good performance in the back half of the year from our Commercial, Refrigeration, and Service Experts businesses, but we expect softness in the residential market to last longer than we anticipated. As a result, we are taking appropriate actions to adjust our full year GAAP guidance downward from $2.50 - $2.60, to $2.40 to $2.50, or growth of 6 percent to 11 percent when compared with 2006 GAAP earnings of $2.26.”

      Gross profit for the second quarter 2007 was $289 million compared to $270 million in the year ago quarter, year over year growth of 7 percent. For the second quarter of 2007, adjusted net income was $62 million, or $0.87 diluted earnings per share, compared to $58 million, or $0.77 diluted earnings per share in the second quarter of 2006. On a GAAP basis, second quarter of 2007 net income was $60 million, or $0.85 diluted earnings per share, compared to $68 million, or $0.91 diluted earnings per share in the year ago quarter.