Exhibit 99.1

Watsco Sets Records for Net Income, EPS and Delivers Strong Cash Flow

During Third Quarter

Sales Momentum Building Following Hurricane Disruptions

 

 

Record Nine-Month Sales, Earnings, EPS and Cash Flow

MIAMI, FLORIDA – (GLOBENEWSWIRE), October 25, 2017 – Watsco, Inc. (NYSE: WSO) reported record results for the quarter and for the nine-month period ended September 30, 2017.

In addition to record operating results, Watsco has generated record cash flow in 2017, representing a 26% increase over the same period last year. Over the last 12 months, operating cash flow was $316 million versus net income of $245 million reflecting progress from the use of new technologies designed to improve inventory turns and enhance overall business efficiency.

The results reflect disruptions from Hurricanes Harvey, Irma and Maria, which impacted certain of the Company’s largest markets during August and September. More than 300 locations experienced some impact with 190 location closures, including key markets in Florida, Texas, Georgia and Puerto Rico. Export activities to the Caribbean-basin and markets in Central Mexico following the Mexico City earthquake also experienced disruption and closure. Collectively, markets directly impacted by location closures represent 35% of sales. The estimated earnings per share impact was approximately 10 cents per share. Sales trends have strengthened in the early part of the fourth quarter as a result of the repair, restoration and replacement activities that are underway. Longer term, the Company believes the necessity of HVAC-related products in these Sunbelt markets coupled with the continued rebuilding and reinvestment activities present an opportunity for growth.

The results also reflect continued investment in a variety of technologies to revolutionize Watsco’s customer-experience, to create a data-driven culture, to empower more insightful decision-making and to enhance productivity and operational efficiency. The Company has also made additional investments in products and people to grow and develop market share for our supplier partners.

Third Quarter Results

Key performance metrics:

 

    2% increase in earnings per share to a record $1.82

 

    3% increase in net income to a record $65 million

 

    Flat SG&A expenses

 

    4% decrease in operating income to $114 million (9.3% operating margin)

 

    46% increase in operating cash flow to $152 million

Sales trends:

 

    1% decrease in sales to $1.23 billion (flat on a same-store basis)

 

    Flat sales for HVAC equipment (68% of sales), including 2% increase in residential products

 

    4% decrease in other HVAC products (27% of sales)

 

    4% decrease in commercial refrigeration products (5% of sales)

Albert H. Nahmad, Chairman and CEO said: “Watsco produced strong cash flow and a record quarter for net income and earnings per share despite the substantial disruptions and strong sales comparisons from a year ago. We believe we gained share in our markets during the quarter, reflecting the efforts of the Watsco team in collaboration with our vendor partners.”

Mr. Nahmad added: “We appreciate the efforts of our more than 1,800 employees that were impacted by the storms for their dedication and commitment in serving the 30,000-plus customers that operate in the impacted areas.”


The following information was filed by Watsco Inc (WSO) on Wednesday, October 25, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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