Lennox International

Lennox International Inc., through its four main subsidiaries--Lennox Industries Inc., Heatcraft Inc., Armstrong Air Conditioning Inc., and Lennox Global Ltd.&mdash′oduces and markets a broad range of residential and commercial heating, air conditioning, and refrigeration equipment and components. Prior to a proposed initial public offering that the company announced in April 1999, Lennox International was owned almost entirely by members of the Norris family, which has controlled the company since 1904; John W. Norris, Jr., is chairman of the board and chief executive officer. About 110 descendants of founder D.W. Norris own shares of Lennox. Lennox got its start in Marshalltown, Iowa, in the last years of the 19th century. Two inventors, Ernest Bryant and Ezra Smith, patented a design for a riveted-steel sheet metal coal furnace, a significant improvement over the cast iron furnaces of that time. Bryant and Smith hired Dave Lennox, who operated a machine shop in Marshalltown, to build the equipment necessary to manufacture their furnace. Bryant and Smith did not have adequate financial backing for the project, however, and when they could not pay Lennox for his work, Lennox took over the furnace patents, altered the design, and set out to market the furnace himself. Shortly thereafter, Lennox decided to sell the furnace business. It was purchased in 1904 by D.W. Norris, editor and publisher of the local newspaper. He incorporated the operation as Lennox Furnace Company, and proceeded to sell 600 furnaces in the company's first year. The Lennox method of distribution, selling, and delivering products directly to authorized dealers was established in the company's first years of operation. Company president Norris established a direct link to dealers using newspaper advertising, his area of expertise. The superiority of the Lennox sheet metal furnace over the cast iron models commonly in use quickly became apparent. Cast iron furnaces were prone to warping after years of continual heating and cooling. This often caused the shell to crack, and smoke and coal gas could leak into a living space. The Lennox model solved this problem, since no warping occurred. By 1923, the company had expanded enough to open a warehouse in Syracuse, New York. Two years later, a factory was built in that city. In 1927 Lennox acquired the Armstrong Furnace plant in London, Ohio. The Armstrong facility, which produced steel coal furnaces, was moved to Columbus, Ohio, the following year. As the demand for Lennox equipment increased, new facilities were added. In 1940 a new and larger factory was built in Columbus. This plant was also a center for sales, distribution, and product service support for parts of the country that the Marshalltown and Syracuse facilities could not support. By the onset of World War II, Lennox held an important place in the heating industry. During the war the company's production included not only heating equipment for military use, but also parts for aircraft and bombs. A precision machine shop in Lima, Ohio, was purchased for that purpose in 1942. Demand for Lennox products soared when the war was over. By the end of the 1940s, several new divisions were added, including a factory in Fort Worth, Texas, and sales centers in Atlanta, Los Angeles, and Salt Lake City. In 1949 D.W. Norris died, and John W. Norris, Sr., became president of Lennox. Lennox continued to expand quickly in both its product line and geographical scope in the 1950s. In 1952 Lennox began manufacturing air conditioning systems. Its first model was a three-ton water-cooled air conditioner, produced at the newly expanded Fort Worth plant. Within the next couple of years, compressors and air conditioning systems for industrial and commercial use went into production as well. Lennox went international in 1952, with the creation of Lennox Industries (Canada) Ltd. In 1955 the Lennox Furnace Co. changed its name to Lennox Industries Inc. in order to better