LIIHIGH SIGNALFINANCIAL10-K

LII experienced a dramatic decline in cash position alongside substantial inventory buildup, suggesting significant working capital pressures or strategic repositioning.

The near-complete depletion of cash reserves from $415M to $34M represents a critical liquidity development that investors must monitor closely. Combined with the 63% inventory increase and higher debt levels, this suggests either aggressive growth investments, supply chain stockpiling, or potential working capital management challenges that could impact financial flexibility.

Comparing 2026-02-17 vs 2025-02-11View on EDGAR →
FINANCIAL ANALYSIS

LII's balance sheet shows a stark transformation with cash reserves falling dramatically while inventory holdings expanded substantially and debt increased by 37%. Operating cash flow declined meaningfully to $758M while capital expenditures were reduced, suggesting the company may be managing cash flow pressures. The overall picture indicates significant working capital allocation shifts that have fundamentally altered the company's liquidity profile, though stockholders' equity grew solidly alongside total assets.

FINANCIAL STATEMENT CHANGES
Cash & Equivalents
Balance Sheet
-91.8%
$415.1M→$34.2M

Cash declined 91.8% — significant cash burn or deployment; verify adequacy of remaining liquidity runway.

Inventory
Balance Sheet
+63.5%
$704.8M→$1.2B

Inventory surged 63.5% — growing significantly faster than typical sales pace; potential demand softening or supply chain overcorrection.

Total Debt
Balance Sheet
+37.3%
$833.1M→$1.1B

Debt increased 37.3% — substantial leverage increase; assess whether deployed for growth or covering losses.

Stockholders Equity
Balance Sheet
+36.8%
$850.2M→$1.2B

Equity base grew 36.8% — retained earnings accumulation or equity issuance strengthening the balance sheet.

Capital Expenditure
Cash Flow
-27.4%
$163.6M→$118.8M

Capex reduced 27.4% — investment cycle winding down or capital discipline; may improve near-term free cash flow.

Operating Cash Flow
Cash Flow
-19.9%
$945.7M→$757.6M

Operating cash flow softened — monitor whether temporary working capital timing or structural deterioration.

Total Assets
Balance Sheet
+17.6%
$3.5B→$4.1B

Asset base grew 17.6% — expansion through organic growth, acquisitions, or capital deployment.

Total Liabilities
Balance Sheet
+11.3%
$2.6B→$2.9B

Liabilities increased 11.3% — monitor debt-to-equity ratio and interest coverage.

R&D Expense
P&L
+10.5%
$93.6M→$103.4M

R&D investment increased 10.5% — signals commitment to future product development, though near-term margin impact.

LANGUAGE CHANGES
NEW — 2026-02-17
PRIOR — 2025-02-11
ADDED
As of February 3, 2026, there were 34,802,911 shares of the registrant s common stock outstanding.
Management's Discussion and Analysis of Financial Condition and Results of Operations 19 ITEM 7A.
Form 10-K Summary 89 SIGNATURES 90 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES 91 PART I Item 1.
Segment financial data for 2025, 2024 and 2023, including financial information about foreign and domestic operations, is included in Note 3 of the Notes to our Consolidated Financial Statements in Item 8.
National Account Services ( NAS ) provides installation, service and preventive maintenance for commercial HVAC national account customers in the U.S.
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REMOVED
As of February 4, 2025, there were 35,579,664 shares of the registrant s common stock outstanding.
Management's Discussion and Analysis of Financial Condition and Results of Operations 18 ITEM 7A.
Form 10-K Summary 83 SIGNATURES 84 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES 85 PART I Item 1.
The Corporate and Other segment previously held our European operations, which were successfully divested in the fourth quarter of 2023.
Corporate and Other was excluded from the table below as there were no sales in 2024.
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