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As filed with the Securities and Exchange Commission on October 11, 2000
Registration No. 333-81555
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
Post-effective Amendment No. 1
to
Form S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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Lennox International Inc.
(Exact name of Registrant as specified in its charter)
Delaware 3585 42-0991521
(State or other jurisdiction of (Primary Industrial Standard (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
2140 Lake Park Blvd.
Richardson, Texas 75080
(972) 497-5000
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
- - --------------------------------------------------------------------------------
Carl E. Edwards, Jr.
Executive Vice President,
General Counsel and Secretary
Lennox International Inc.
2140 Lake Park Blvd.
Richardson, Texas 75080
(972) 497-5000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
- - --------------------------------------------------------------------------------
Copy to:
Andrew M. Baker
Baker Botts L.L.P.
2001 Ross Avenue
Dallas, Texas 75201
(214) 953-6500
- - --------------------------------------------------------------------------------
Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.
If the securities being registered on this form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box: [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ] _____
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering: [ ]
- - --------------------------------------------------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
EXPLANATORY NOTE
All of the shares of common stock, par value $.01 per share ("Common Stock"), of
the Registrant included in this Post Effective Amendment No. 1 were previously
included in and registered under this registration statement. On July 27, 2000,
the board of directors of the Registrant declared a dividend of one right
("Right") for each outstanding share of Common Stock to stockholders of record
at the close of business on August 7, 2000. Each Right entitles the registered
holder to purchase from the Registrant a unit consisting of one one-hundredth of
a share of Series A Junior Participating Preferred Stock of the Registrant.
Initially, the Rights will be attached to all certificates representing
outstanding shares of Common Stock, and no separate certificates for the Rights
will be distributed. Accordingly, the Registrant hereby registers the Rights
under this registration statement. No additional fee is payable in respect of
the Rights.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to completion, dated October 11, 2000
PROSPECTUS
6,015,000 Shares
[LENNOX INTERNATIONAL INC. LOGO]
COMMON STOCK
------------
We may offer and issue up to 6,015,000 shares of our common stock
covered by this prospectus from time to time in business combination
transactions involving our acquisition, directly or indirectly, of businesses or
other operating assets. We expect that we will determine the terms of these
acquisitions by direct negotiations with the owners or controlling persons of
the businesses or assets to be acquired and the shares of our common stock
issued will be valued at prices reasonably related to market prices prevailing
either at the time an acquisition agreement is executed or at or about the time
of delivery of the shares.
------------
Our common stock is traded on the New York Stock Exchange under the
trading symbol "LII." On October 10, 2000, the last reported sales price of our
common stock on the New York Stock Exchange was $8.50 per share.
------------
Investing in our common stock involves risks. See "Risk Factors" beginning
on page 3.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
------------
The date of this prospectus is _______, 2000.
TABLE OF CONTENTS
Page
LENNOX.....................................................................2
RISK FACTORS...............................................................3
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS..........................7
SELECTED FINANCIAL DATA....................................................8
PLAN OF DISTRIBUTION.......................................................9
LEGAL MATTERS..............................................................9
EXPERTS....................................................................9
WHERE YOU CAN FIND MORE INFORMATION........................................9
THIS PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION ABOUT
LENNOX THAT IS NOT INCLUDED IN OR DELIVERED WITH THIS DOCUMENT. THIS INFORMATION
IS AVAILABLE TO YOU WITHOUT CHARGE UPON EITHER WRITTEN OR ORAL REQUEST. YOU CAN
OBTAIN THIS INFORMATION BY REQUESTING IT IN WRITING OR BY TELEPHONE FROM LENNOX
AT THE FOLLOWING ADDRESS AND TELEPHONE NUMBER:
LENNOX INTERNATIONAL INC.
2140 LAKE PARK BLVD.
RICHARDSON, TEXAS 75080
ATTENTION: INVESTOR RELATIONS
(972) 497-5000
FOR ADDITIONAL SOURCES OF THE DOCUMENTS INCORPORATED BY REFERENCE AND OTHER
INFORMATION ABOUT LENNOX, YOU SHOULD READ "WHERE YOU CAN FIND MORE INFORMATION"
ON PAGE 9.
1
LENNOX
We are a leading global provider of climate control solutions. We
design, manufacture and market a broad range of products for the heating,
ventilation, air conditioning and refrigeration markets, which is sometimes
referred to as "HVACR." Our products are sold under well-established brand names
including "Lennox", "Armstrong Air", "Ducane", "Bohn", "Larkin", "Heatcraft",
"Advanced Distributor Products" and others. We are also one of the largest
manufacturers in North America of heat transfer products, such as evaporator
coils and condenser coils. We have leveraged our expertise in heat transfer
technology, which is critical to the efficient operation of any heating or
cooling system, to become an industry leader known for our product innovation
and the quality and reliability of our products. We are also a leader in the
growing market for hearth products, which includes pre-fabricated fireplaces and
related products.
Historically, we have sold our "Lennox" brand of residential heating
and air conditioning products directly to a network of installing dealers, which
as of the date of this prospectus numbers approximately 6,500, making us the
largest wholesale distributor of these products in North America. In September
1998, we initiated a program to acquire dealers in metropolitan areas in the
United States and Canada so that we can provide heating and air conditioning
products and services directly to consumers. As of September 30, 2000, we had
acquired approximately 220 dealers in the United States and Canada, including
the dealers acquired through the acquisition of Service Experts, Inc. in January
2000.
Shown below are our five business segments, the key products and brand
names within each segment and 1999 net sales by segment.
SEGMENT PRODUCTS/SERVICES BRAND NAMES 1999 NET SALES
------- ----------------- ----------- --------------
(in millions)
North American Furnaces, heat pumps, air Lennox, Armstrong Air, $1,143.5
residential conditioners, packaged heating Air-Ease, Concord, Magic-Pak,
and cooling systems and Ducane, Advanced Distributor
related products; pre-fabricated Products, Superior, Marco,
fireplaces, free standing Whitfield and Security Chimneys
stoves, fireplace inserts and
accessories
North American retail Sales, installation and Service Experts, various 218.1
service of home comfort individual dealership names
equipment
Commercial air Unitary air conditioning and Lennox, Alcair and Janka 452.8
conditioning applied systems
Commercial Chillers, condensing units, Bohn, Friga-Bohn, Larkin, 327.3
refrigeration unit coolers, fluid coolers, Climate Control, Chandler
air cooled condensers and air Refrigeration, Kirby, Muller
handlers and Lovelock
Heat transfer Heat transfer coils, other Heatcraft, Friga-Bohn, Kirby 220.0
heat transfer products, and and Muller
equipment and tooling to
manufacture coils
Total $2,361.7
========
In 1999, we expanded our hearth products line through the acquisition
of Security Chimneys International, Ltd. In May 1999, we acquired Livernois
Engineering Holding Company and related patents. Livernois produces heat
transfer manufacturing equipment for the HVACR and automotive industries. We
acquired James N. Kirby Pty. Ltd., an Australian company that participates in
the commercial refrigeration and heat transfer markets in Australia, in June
1999. In October 1999, we acquired substantially all of the assets of the air
conditioning and heating division of The Ducane Company, Inc. based in South
Carolina. This acquisition gives us additional capacity to manufacture heating
and air conditioning products. In January 2000, we completed the acquisition of
Service Experts, Inc. in exchange for approximately 12.2 million shares of our
common stock and the assumption of $162.7 million of debt. Service Experts
provides residential heating, ventilation and air conditioning services and
replacement equipment through approximately 120 dealers in approximately 36
states.
We are located at 2140 Lake Park Blvd.,Richardson, Texas 75080 and our
telephone number is (972) 497-5000.
2
RISK FACTORS
You should carefully consider the risks described below before making
an investment decision.
RISK FACTORS RELATING TO OUR BUSINESS
Our business is subject to the following risks, which include risks
relating to the industry in which we operate.
WE MAY INCUR MATERIAL COSTS AS A RESULT OF WARRANTY AND PRODUCT
LIABILITY CLAIMS WHICH WOULD NEGATIVELY IMPACT OUR PROFITABILITY
The development, manufacture, sale and use of our products involve a
risk of warranty and product liability claims. In addition, as we increase our
efforts to acquire installing heating and air conditioning dealers in the U.S.
and Canada, we incur the risk of liability claims for the installation and
service of heating and air conditioning products. We maintain product liability
insurance. Our product liability insurance policies have limits, however, that
if exceeded, may result in material costs that would have an adverse effect on
our future profitability. In addition, warranty claims are not covered by our
product liability insurance and there may be types of product liability claims
that are also not covered by our product liability insurance.
WE MAY NOT BE ABLE TO REALIZE OUR BUSINESS STRATEGY OF SUCCESSFULLY
COMPLETING OR OPERATING STRATEGIC ACQUISITIONS
We intend to grow in part through the acquisition of heating and air
conditioning dealers and other complementary businesses both in the U.S. and
internationally. This strategy will involve reviewing and potentially
reorganizing the operations, corporate infrastructure and systems and financial
controls of acquired businesses. The success of our acquisition strategy may be
limited because of unforeseen expenses, difficulties, complications and delays
encountered in connection with the expansion of our operations through
acquisitions. We may not be able to acquire or manage profitably additional
businesses or to integrate successfully any acquired businesses into our
business without substantial costs, delays or other operational or financial
difficulties. In addition, we may be required to incur additional debt or issue
equity to pay for future acquisitions.
THE CONSOLIDATION OF DISTRIBUTORS AND DEALERS COULD FORCE US TO LOWER
OUR PRICES OR HURT OUR BRAND NAMES WHICH WOULD RESULT IN LOWER SALES
There is a continuing effort underway in the U.S. by several companies
to purchase independent distributors and dealers and consolidate them into large
enterprises. These large enterprises may be able to exert pressure on us or our
competitors to reduce prices. Additionally, these enterprises tend to emphasize
their company name, rather than the brand of the manufacturer, in their
promotional activities, which could lead to dilution of the importance and value
of our brand names. Future price reductions and the brand dilution caused by the
consolidation among HVACR distributors and dealers could have an adverse effect
on our future sales and profitability.
OUR DEALER ACQUISITION PROGRAM COULD LEAD TO LOSS OF SALES FROM
INDEPENDENT DEALERS AND DEALERS OWNED BY CONSOLIDATORS
In connection with our program of acquiring heating and air
conditioning dealers in the U.S. and Canada, we face the risk that dealers owned
by consolidators and independent dealers may discontinue using our heating and
air conditioning products because we are and increasingly will be in competition
with them. We sold approximately $64 million of heating and air conditioning
products to consolidators in 1999, excluding Service Experts, representing 2.7%
of our net sales.
3
COOLER THAN NORMAL SUMMERS AND WARMER THAN NORMAL WINTERS MAY DEPRESS
OUR SALES
Demand for our products and for our services is strongly affected by
the weather. Hotter than normal summers generate strong demand for our
replacement air conditioning and refrigeration products and colder than normal
winters have the same effect on our heating products. Conversely, cooler than
normal summers and warmer than normal winters depress our sales. Because a high
percentage of our overhead and operating expenses is relatively fixed throughout
the year, operating earnings and net earnings tend to be lower in quarters with
lower sales.
WE MAY NOT BE ABLE TO COMPETE FAVORABLY IN THE HIGHLY COMPETITIVE
HVACR BUSINESS
Competition in our various markets could cause us to reduce our prices
or lose market share, or could negatively affect our cash flow, which could have
an adverse effect on our future financial results. Substantially all of the
markets in which we participate are highly competitive. The most significant
competitive factors we face are product reliability, product performance,service
and price, with the relative importance of these factors varying among our
product lines. In addition, in our distribution channel in which we will sell
our products directly to consumers, we face competition from independent dealers
and dealers owned by consolidators and utility companies, some of whom may
be able to provide their products or services at lower prices than we can.
WE MAY BE ADVERSELY AFFECTED BY PROBLEMS IN THE AVAILABILITY OF OR
INCREASES IN THE PRICES OF COMPONENTS AND RAW MATERIALS
Increases in the prices of raw materials or components or problems in
their availability could depress our sales or increase the costs of our
products. We are dependent upon components purchased from third parties as
well as raw materials such as copper, aluminum and steel.We enter into contracts
each year for the supply of key components at fixed prices. However, if a key
supplier is unable or unwilling to meet our supply requirements, we could
experience supply interruptions or cost increases, either of which could have an
adverse effect on our gross profit. In addition, we regularly pre-purchase a
portion of our raw materials at a fixed price each year to hedge against price
fluctuations, but a large increase in raw materials prices could significantly
increase the cost of our products.
THE PROFITABILITY OF OUR INTERNATIONAL OPERATIONS COULD BE ADVERSELY
AFFECTED BY ECONOMIC TURMOIL, WAR OR CIVIL UNREST
Our international operations are subject to various economic,political
and other risks that are generally not present in our North American operations.
International risks include:
- instability of foreign economies and governments;
- price and currency exchange controls;
- unfavorable changes in monetary and tax policies and other
regulatory changes;
- fluctuations in the relative value of currencies;
- expropriation and nationalization of our foreign assets; and
- war and civil unrest.
We sell products in over 70 countries and have business units located
in Europe, Asia Pacific, Latin America and Mexico. Sales of our products outside
of the U.S. represented approximately 26.7% of our 1999 net sales. We anticipate
that, over time, international sales will continue to grow as a percentage of
our total sales.
OUR OPERATIONS ARE SUBJECT TO INHERENT RISKS THAT COULD RESULT IN LOSS
OF LIFE OR SEVERE DAMAGE TO OUR PROPERTIES AND THE SUSPENSION OF
OPERATIONS
Our operations are subject to hazards and risks inherent in operating
large manufacturing facilities, including fires, natural disasters and
explosions, all of which can result in loss of life or severe damage to our
4
properties and the suspension of operations. We maintain business interruption
and other types of property insurance as protection against operating hazards.
The occurrence of a significant event not fully covered by insurance could have
an adverse effect on our profitability.
SINCE A SIGNIFICANT PERCENTAGE OF OUR WORKFORCE IS UNIONIZED, WE FACE
RISKS OF WORK STOPPAGES AND OTHER LABOR RELATIONS PROBLEMS
We are subject to a risk of work stoppage and other labor relations
matters because a significant percentage of our workforce is unionized. As of
September 30, 2000, approximately 17% of our workforce was unionized. Within the
U.S., we have eight manufacturing facilities and five distribution centers,
along with our North American Parts Center in Des Moines, Iowa, with collective
bargaining agreements ranging from three to eight years in length. Outside of
the U.S., we have 13 significant facilities that are represented by unions. As
we expand our operations, we are subject to increased unionization of our
workforce. The results of future negotiations with these unions, including the
effects of any production interruptions or labor stoppages,could have an adverse
effect on our future financial results.
SKILLED LABOR SHORTAGES COULD ADVERSELY AFFECT OUR BUSINESS
The service and replacement business operated by our dealers requires
an adequate supply of skilled labor to provide timely, high quality service.
In addition, high turnover in skilled positions may adversely affect operating
costs of the service and replacement business. Accordingly, our ability to
increase productivity and net earnings in that business segment depends on our
ability to employ the skilled laborers necessary to meet our service
requirements. We cannot assure you that we will be able to maintain the skilled
labor force necessary to operate the service and replacement business
efficiently or that our labor expenses will not increase because of a shortage
of skilled workers.
EXPOSURE TO ENVIRONMENTAL LIABILITIES COULD ADVERSELY AFFECT OUR
RESULTS OF OPERATIONS
Our future profitability could be adversely affected by current or
future environmental laws. We are subject to extensive and changing federal,
state and local laws and regulations designed to protect the environment in the
U.S. and in other parts of the world. These laws and regulations could impose
liability for remediation costs or result in civil or criminal penalties in
cases of non-compliance. Compliance with environmental laws increases our costs
of doing business. Because these laws are subject to frequent change, we are
unable to predict the future costs resulting from environmental compliance.
The U.S. and other countries have established programs for limiting
the production, importation and use of certain ozone depleting chemicals,
including refrigerants used by us in most of our air conditioning and
refrigeration products. Some categories of these refrigerants have been banned
completely and others are currently scheduled to be phased out in the U.S. by
the year 2030. The U.S. is under pressure from the international environmental
community to accelerate the current 2030 deadline. In Europe, this phaseout may
occur even sooner. The industry's failure to find suitable replacement
refrigerants for substances that have been or will be banned or the acceleration
of any phase out schedules for these substances by governments could have an
adverse effect on our future financial results.
THE NORRIS FAMILY WILL BE ABLE TO EXERCISE SIGNIFICANT CONTROL OVER
OUR COMPANY
The ability of the Norris family to exercise significant control
over Lennox may discourage, delay or prevent a takeover attempt that a
stockholder might consider in his or her best interest and that might result
in a stockholder receiving a premium for his or her common stock. As of
September 30, 2000, approximately 110 descendants of or persons otherwise
related to D. W. Norris, one of our original owners, collectively control
over 50% of the outstanding shares of our common stock. Accordingly, if the
Norris family were to act together, it would have the ability to:
- control the vote of most matters submitted to our
stockholders, including any merger, consolidation or sale of
all or substantially all of our assets;
5
- elect all of the members of our board of directors;
- prevent or cause a change in control of our company; and
- decide whether to issue additional common stock or other
securities or declare dividends.
RISK FACTORS RELATING TO SECURITIES MARKETS
There are risks relating to the securities markets that you should
consider in connection with your investment in and ownership of our stock.
ANTI-TAKEOVER PROVISIONS IN OUR GOVERNING DOCUMENTS AND DELAWARE LAW
COULD PREVENT OR DELAY A CHANGE IN CONTROL OF OUR COMPANY
Our governing documents contain provisions that make it more difficult
to implement corporate actions that may have the effect of delaying, deterring
or preventing a change in control. A stockholder might consider a change in
control in his or her best interest because he or she might receive a premium
for his or her common stock. Examples of these provisions include:
- a vote of more than 80% of the outstanding voting stock is
required for stockholders to amend specified provisions of the
governing documents;
- our board of directors is divided into three classes, each
serving three-year terms;
- members of our board of directors may be removed only for cause
and only upon the affirmative vote of at least 80% of the
outstanding voting stock; and
- a vote of more than 80% of the outstanding voting stock is
required to approve specified transactions between us and any
person or group that owns at least 10% of our voting stock.
Our board of directors has the ability, without stockholder action,
to issue shares of preferred stock that could, depending on their terms, delay,
discourage or prevent a change in control of Lennox. In addition, we have
entered into a stockholder rights agreement pursuant to which one right is
attached to each share of our common stock which will initially trade together
as one share. The rights would cause substantial dilution to a person or group
that attempts to acquire us on terms not approved in advance by our board of
directors. The Delaware General Corporation Law, under which we are
incorporated, contains provisions that impose restrictions on business
combinations such as mergers between us and a holder of 15% or more of our
voting stock.
THE PRICE OF OUR COMMON STOCK MAY FLUCTUATE SIGNIFICANTLY AND YOU
COULD LOSE ALL OR PART OF YOUR INVESTMENT AS A RESULT
The price of our common stock may be affected by a number of factors,
including:
- actual or anticipated fluctuations in our operating results;
- changes in expectations as to our future financial performance or
changes in financial estimates of securities analysts;
- announcements of new products or technological innovations; and
- the operating and stock price performance of other comparable
companies.
In addition, the stock market in general has experienced extreme
volatility that often has been unrelated to the operating performance of
particular companies. These broad market and industry fluctuations may adversely
affect the trading price of our common stock, regardless of our actual
operating performance.
6
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus constitute forward-looking
statements. These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential" or "continue" or the negative
of such terms or other comparable terminology. These statements are only
predictions. Actual events or results may differ materially. In evaluating these
statements, you should specifically consider various factors, including the
risks outlined under "Risk Factors." These factors may cause our actual results
to differ materially from any forward-looking statement.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance, or achievements. Moreover, neither we nor any other
person assumes responsibility for the accuracy and completeness of these
statements. We are under no duty to update any of the forward-looking statements
after the date of this prospectus to conform these statements to actual results.
7
SELECTED FINANCIAL DATA
The following selected financial data for each of the years in the
five-year period ended December 31, 1999 have been derived from our financial
statements which have been audited by Arthur Andersen LLP. The summary financial
and other data for each of the six months ended June 30, 1999 and 2000 are
derived from our unaudited financial statements which, in our opinion, have been
prepared on the same basis as the audited financial statements and include all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of such information. Our fiscal quarters are each comprised of 13
weeks. For convenience, the 26-week periods ended July 2, 1999 and July 1, 2000
are referred to as the six months ended June 30, 1999 and 2000, respectively.
Six Months Ended
Year Ended December 31, June 30,
------------------------------------------------------------------------ --------------------------
1995 1996 1997 1998 1999 1999 2000
---- ---- ---- ---- ---- ---- ----
(in thousands, except per share data)
Statement of Operations Data:
Net sales .................. $ 1,306,999 $ 1,364,546 $ 1,444,442 $ 1,821,836 $ 2,361,667 $ 1,080,900 $ 1,610,524
Cost of goods sold ......... 946,881 961,696 1,005,913 1,245,623 1,617,332 743,000 1,083,429
--------- --------- --------- --------- --------- --------- ---------
Gross profit ............ 360,118 402,850 438,529 576,213 744,335 337,900 527,095
Selling, general and
administrative expenses . 288,493 302,262 333,768 469,610 588,388 271,202 433,888
Product inspection charge(1) -- -- 140,000 -- -- -- --
-- --------- --------- --------- --------- --------- --------- ---------
Income (loss) from
operations ............ 71,625 100,588 (35,239) 106,603 155,947 66,698 93,207
Interest expense, net ...... 20,615 13,417 8,515 16,184 33,096 15,100 27,992
Other ...................... (622) (943) 1,955 1,602 (287) (781) 746
Minority interest .......... -- -- (666) (869) (100) (620) (515)
--------- --------- --------- --------- --------- --------- ---------
Income (loss) before
income taxes .......... 51,632 88,114 (45,043) 89,686 123,238 52,999 64,984
Provision (benefit) for
income taxes ............ 17,480 33,388 (11,493) 37,161 50,084 22,798 26,967
--------- --------- --------- --------- -------- ---------- --------
Net income (loss) ....... $ 34,152 $ 54,726 $ (33,550) $ 52,525 $ 73,154 $ 30,201 $ 38,017
Earnings (loss) per share: =========== =========== =========== =========== =========== =========== ===========
Basic ................... $ 1.04 $ 1.62 $ (0.99) $ 1.50 $ 1.85 $ 0.84 $ 0.68
Diluted ................. 1.04 1.59 (0.99) 1.47 1.81 0.82 0.68
Weighted average shares
outstanding:
Basic ................... 32,899 33,693 33,924 34,914 39,615 35,805 55,948
Diluted ................. 32,964 34,386 33,924 35,739 40,519 36,696 56,289
Dividends per share ........ $ 0.22 $ 0.26 $ 0.28 $ 0.32 $ 0.35 $ 0.17 $ 0.19
December 31, June 30,
--------------------------------------------------------------- --------------------------
1995 1996 1997 1998 1999 1999 2000
---- ---- ---- ---- ---- ---- ----
(in thousands)
Balance Sheet Data:
Cash and cash equivalents.... $ 73,811 $ 151,877 $ 147,802 $ 28,389 $ 29,174 $ 34,381 $ 47,323
Working capital.............. 307,502 325,956 335,891 263,289 424,602 239,612 441,622
Total assets................. 768,517 820,653 970,892 1,152,952 1,683,673 1,504,437 2,123,068
Total debt................... 219,346 184,756 198,530 317,441 577,049 576,278 738,821
Stockholders' equity......... 315,313 361,464 325,478 376,440 597,896 422,381 758,883
- - ----------
[FN]
(1) Represents a pre-tax charge taken in the fourth quarter of 1997
for estimated costs of an inspection program for our Pulse furnaces
installed from 1982 to 1990 in the U.S. and Canada. We initiated the
inspection program because we received anecdotal reports of
accelerated corrosion of a component of these products under extreme
operating conditions.
8
PLAN OF DISTRIBUTION
This prospectus covers the offer and sale of up to 6,015,000 shares of
our common stock which we may offerfrom time to time in connection with future
direct and indirect acquisitions of other businesses, properties or securities
in business combination transactions. As of September 30, 2000, approximately
1.36 million shares of our common stock have been sold pursuant to this
prospectus. In addition to the shares of common stock offered by this
prospectus, we may offer other consideration, including stock options, cash,
notes or other evidences of debt, assumption of liabilities and/or a combination
of these types of consideration. In addition, we may lease property from, and
enter into management agreements and consulting and noncompetition agreements
with, the former owners and key executive personnel of the businesses to be
acquired.
We expect that we will determine the terms on which we may issue the
shares of common stock covered by this prospectus by direct negotiations with
the owners or controlling persons of the business or assets to be acquired and
that the shares of common stock issued will be valued at prices reasonably
related to market prices prevailing either at the time an acquisition agreement
is executed or at or about the time of delivery of those shares.
Pursuant to Rule 145 under the Securities Act of 1933, the
volume limitations and some other requirements of Rule 144 will apply to resales
of the shares of common stock covered by this prospectus by affiliates
of the businesses we acquire for a period of one year from the date of
their acquisition or such shorter period as the Securities and Exchange
Commission may prescribe. Otherwise, these securities will be freely tradeable
after their issuance by persons not affiliated with us unless we contractually
restrict their sale.
In an effort to maintain an orderly market in the common stock or for
other reasons, we may negotiate agreements with persons receiving common stock
covered by this prospectus that will limit the number of shares that such
persons may sell for specified periods. These agreements may be more restrictive
than restrictions on sales made pursuant to the exemption from registration
requirements of the Securities Act of 1933, including the requirements under
Rule 144 or Rule 145, and the persons party to these agreements may not
otherwise be subject to the Securities Act requirements.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered by
this prospectus will be passed upon for us by Baker Botts L.L.P., Dallas, Texas.
EXPERTS
Our financial statements and schedules incorporated by reference in
this prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy any document we file at the SEC's public reference rooms at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.20549, and at the SEC's
Regional Offices at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511, and at 7 World Trade Center, Suite 1300, New York,
New York 10048. Our SEC filings are also available to the public over the
Internet at the SEC's web site at http://www.sec.gov. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by
9
reference is an important part of this prospectus, and information that we file
later with the SEC will automatically update and supersede this information.
We incorporate by reference:
- Our Annual Report on Form 10-K for the year ended December 31,
1999;
- Our Quarterly Reports on Form 10-Q for the quarters ended March
31, 2000 and June 30, 2000;
- Our Current Reports on Form 8-K dated January 21, 2000, February
28, 2000 and July 27, 2000;
- The description of our common stock contained in our Registration
Statement on Form 8-A dated July 12, 1999; and
- The description of our preferred stock purchase rights contained
in our Registration Statement on Form 8-A dated July 27, 2000.
We also incorporate by reference any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until the termination of the offering of our common stock.
You may request a copy of these filings at no cost, by writing
or telephoning us at the following address and telephone number:
Lennox International Inc.
2140 Lake Park Blvd.
Richardson, Texas 75080
Attention: Investor Relations
(972) 497-5000
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted.
10
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
All capitalized terms used and not defined in Part II of this
Registration Statement shall have the meanings assigned to them in the
prospectus which forms a part of this Registration Statement.
ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
DELAWARE GENERAL CORPORATION LAW
Section 145(a) of the Delaware General Corporation Law (the "DGCL")
provides that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that the person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding if the person
acted in good faith and in a manner the person reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the person's
conduct was unlawful.
Section 145(b) of the DGCL provides that a corporation may indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that the
person is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by the person in connection with the defense or settlement
of such action or suit if the person acted in good faith and in a manner the
person reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Delaware Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Delaware Court of Chancery or
such other court shall deem proper.
Section 145(c) of the DGCL provides that to the extent that a present
or former director or officer of a corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to in Section
145(a) and (b), or in defense of any claim, issue or matter therein, such person
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
Section 145(d) of the DGCL provides that any indemnification under
Section 145(a) and (b) (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the present or former director, officer, employee or agent is
proper in the circumstances because he has met the applicable standard of
conduct set forth in Section 145(a) and (b). Such determination shall be made,
with respect to a person who is a director or officer at the time of such
determination, (1) by a majority vote of the directors who were not parties to
such action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion, or (4)
by the stockholders.
Section 145(e) of the DGCL provides that expenses (including
attorneys' fees) incurred by an officer or director in defending any civil,
criminal, administrative or investigative action, suit or proceeding may be paid
by the corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that such
person is not entitled to be indemnified by the corporation as authorized in
Section 145. Such expenses (including attorneys'
II-1
fees) incurred by former directors and officers or other employees and agents
may be so paid upon such terms and conditions, if any, as the corporation deems
appropriate.
Section 145(f) of the DGCL provides that the indemnification and
advancement of expenses provided by, or granted pursuant to, Section 145 shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in such person's official capacity and as to action in another
capacity while holding such office.
Section 145(g) of the DGCL provides that a corporation shall have the
power to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such person's status as such, whether or
not the corporation would have the power to indemnify such person against such
liability under Section 145.
Section 102(b)(7) of the DGCL provides that the liability of a
director may not be limited or eliminated for the breach of such director's duty
of loyalty to the corporation or its stockholders, for such director's
intentional acts or omissions not in good faith, for such director's concurrence
in or vote for an unlawful payment of a dividend or unlawful stock purchase or
redemption or for any improper personal benefit derived by the director from any
transaction.
RESTATED CERTIFICATE OF INCORPORATION
Article Eighth of Lennox's restated certificate of incorporation
provides that a director of Lennox shall not be liable to Lennox or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except to the extent such exemption from liability or limitation thereof is not
permitted under the DGCL as the same exists or may hereafter be amended. Any
repeal or modification of Article Eighth shall not adversely affect any right or
protection of a director of Lennox existing thereunder with respect to any act
or omission occurring prior to such repeal or modification.
BYLAWS
Article VI of Lennox's bylaws provides that each person who at any time
shall serve or shall have served as a director or officer of Lennox, or any
person who, while a director or officer of Lennox, is or was serving at the
request of Lennox as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise, shall be entitled to (a)
indemnification and (b) the advancement of expenses incurred by such person from
Lennox as, and to the fullest extent, permitted by Section 145 of the DGCL or
any successor statutory provision, as from time to time amended. Lennox may
indemnify any other person, to the same extent and subject to the same
limitations specified in the immediately preceding sentence, by reason of the
fact that such other person is or was an employee or agent of Lennox or another
corporation, partnership, joint venture, trust or other enterprise.
The indemnification and advancement of expenses provided by, or granted
pursuant to, Article VI shall not be deemed exclusive of any other rights to
which any person seeking indemnification or advancement of expenses may be
entitled under any bylaw of Lennox, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office. All rights to indemnification under Article VI shall be deemed to be
provided by a contract between Lennox and the director, officer, employee or
agent who served in such capacity at any time while the bylaws of Lennox and
other relevant provisions of the DGCL and other applicable law, if any, are in
effect. Any repeal or modification thereof shall not affect any rights or
obligations then existing. Without limiting the provisions of Article VI, Lennox
is authorized from time to time, without further action by the stockholders of
Lennox, to enter into agreements with any director or officer of Lennox
providing such rights of indemnification as Lennox may deem appropriate, up to
the maximum extent permitted by law. Any agreement entered into by Lennox with a
director may be authorized by the other directors, and such authorization shall
not be invalid on the basis that similar agreements may have been or may
thereafter be entered into with other directors.
II-2
Lennox may purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee or agent of Lennox, or is or was serving
at the request of Lennox as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against such person and incurred by such person in any such
capacity, or arising out of such person's status as such, whether or not Lennox
would have the power to indemnify such person against such liability under the
applicable provisions of Article VI or the DGCL.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
Exhibit
Number Description
3.1 -- Restated Certificate of Incorporation of Lennox (incorporated by
reference to Exhibit 3.1 to Lennox's Registration Statement on
Form S-1 (Registration No. 333-75725)).
3.2 -- Amended and Restated Bylaws of Lennox (incorporated by reference
to Exhibit 3.2 to Lennox's Registration Statement on Form S-1
(Registration No. 333-75725)).
4.1 -- Specimen Stock Certificate for the Common Stock, par value $.01
per share, of Lennox (incorporated by reference to Exhibit 4.1 to
Lennox's Registration Statement on Form S-1 (Registration No.
333-75725)).
4.2 -- Rights Agreement, dated as of July 27, 2000, between Lennox and
ChaseMellon Shareholder Services, L.L.C., as Rights Agent, which
includes as Exhibit A the form of Certificate of Designation of
Series A Junior Participating Preferred Stock setting forth the
terms of the Preferred Stock, as Exhibit B the form of Rights
Certificate and as Exhibit C the Summary of Rights to Purchase
Preferred Stock (incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K dated July 27, 2000 (File
No. 001-15149)).
5.1* -- Opinion of Baker Botts L.L.P. regarding legality of securities
being registered.
23.1 -- Consent of Arthur Andersen LLP
23.2 -- Consent of Baker Botts L.L.P. (included in the opinion filed as
Exhibit 5.1 to this Registration Statement).
24.1* -- Powers of Attorney (included in the signature pages of the
Registration Statement).
- - ----------
[FN]
* Previously filed.
(b) Financial Statement Schedule
All schedules are omitted as the required information is
inapplicable or the information is presented in the consolidated
financial statements of Lennox International Inc. and subsidiaries or
related notes incorporated herein by reference.
ITEM 22. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act") may be permitted to directors,
officers and controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant also undertakes:
II-3
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information setforth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered)and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) under the Securities
Act if,in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8 and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the registrants' annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus
will contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.
(6) That every prospectus (i) that is filed pursuant to the paragraph
immediately preceding, or (ii) that purports to meet the requirements of section
10(a)(3) of the Securities Act and is used in connection with an offering of
securities subject to Rule 415 under the Securities Act, will be filed as part
of an amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(7) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form,
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in
II-4
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
(8) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not subject of and included in the registration statement when it became
effective.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Post-effective Amendment No. 1 to this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Richardson, State of Texas, on October 11,
2000.
LENNOX INTERNATIONAL INC.
By: /s/ JOHN W. NORRIS, JR.
-------------------------------------
John W. Norris, Jr.
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-effective Amendment No. 1 to this Registration Statement has been signed by
the following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ JOHN W. NORRIS, JR. Chairman of the Board and October 11, 2000
- - ----------------------- Chief Executive Officer
John W. Norris, Jr. (Principal Executive
Officer)
/s/ CLYDE W. WYANT Executive Vice President, October 11, 2000
- - ----------------------- Chief Financial Officer
Clyde W. Wyant (Principal Financial Officer)
/s/ JOHN J. HUBBUCH Vice President, Controller and October 11, 2000
- - ----------------------- Chief Accounting Officer
John J. Hubbuch (Principal Accounting
Officer)
* Director October 11, 2000
- - -----------------------
Linda G. Alvarado
* Director October 11, 2000
- - -----------------------
David H. Anderson
* Director October 11, 2000
- - -----------------------
Richard W. Booth
Director
- - -----------------------
Thomas W. Booth
* Director October 11, 2000
- - -----------------------
David V. Brown
* Director October 11, 2000
- - -----------------------
James J. Byrne
- - ----------------------- Director
Janet K. Cooper
II-6
- - ----------------------- Director
Charles L. Henry
- - ----------------------- Director
John E. Major
* Director October 11, 2000
- - -----------------------
Donald E. Miller
Director
- - -----------------------
William G. Roth
* Director October 11, 2000
- - -----------------------
Terry D. Stinson
* Director October 11, 2000
- - -----------------------
Richard L. Thompson
*By: /s/ JOHN W. NORRIS, JR.
- - -----------------
John W. Norris, Jr.
Attorney-in-Fact for such persons pursuant to the powers of attorney
dated June 25, 1999 filed as an exhibit to the Registration Statement
II-7
EXHIBIT INDEX
Exhibit
Number Description
3.1 -- Restated Certificate of Incorporation of Lennox (incorporated by
reference to Exhibit 3.1 to Lennox's Registration Statement on
Form S-1 (Registration No. 333-75725)).
3.2 -- Amended and Restated Bylaws of Lennox (incorporated by reference
to Exhibit 3.2 to Lennox's Registration Statement on Form S-1
(Registration No. 333-75725)).
4.1 -- Specimen Stock Certificate for the Common Stock, par value $.01
per share, of Lennox (incorporated by reference to Exhibit 4.1 to
Lennox's Registration Statement on Form S-1 (Registration No.
333-75725)).
4.2 -- Rights Agreement, dated as of July 27, 2000, between Lennox and
ChaseMellon Shareholder Services, L.L.C., as Rights Agent, which
includes as Exhibit A the form of Certificate of Designation of
Series A Junior Participating Preferred Stock setting forth the
terms of the Preferred Stock, as Exhibit B the form of Rights
Certificate and as Exhibit C the Summary of Rights to Purchase
Preferred Stock (incorporated by reference to Exhibit 4.1 to the
Company's Current Report on Form 8-K dated July 27, 2000 (File
No. 001-15149)).
5.1*-- Opinion of Baker Botts L.L.P. regarding legality of securities
being registered.
23.1 -- Consent of Arthur Andersen LLP
23.2 -- Consent of Baker Botts L.L.P. (included in the opinion filed as
Exhibit 5.1 to this Registration Statement).
24.1*-- Powers of Attorney (included in the signature pages of the
Registration Statement).
- - ----------
[FN]
* Previously filed.
1 EXHIBIT 23.1 CONSENT OF ARTHUR ANDERSON LLP CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our reports dated February 18, 2000 included in Lennox International Inc.'s Form 10-K for the year ended December 31, 1999 and to all references to our Firm included in this registration statement. Arthur Andersen LLP Dallas, Texas October 10, 2000