Exhibit 99.1

Watsco Sets New Records for Sales, Operating Income, Net Income

and EPS During First Quarter

 

 

25% EPS Growth and 20 Basis-Point Operating Margin Expansion

Adoption of Customer-Focused Technologies Grows as Business Transformation Continues

MIAMI, FLORIDA – (GLOBENEWSWIRE), April 24, 2018 – Watsco, Inc. (NYSE: WSO) reported record results for the quarter ended March 31, 2018.

The record results reflect continued investment in technologies designed to revolutionize Watsco’s customer-experience and help customers grow their businesses. Most notably, the digitization of Watsco’s marketplace via e-commerce and iOS/Android-enabled apps, supported by the industry’s most complete database of product information, made further progress. Ecommerce sales run-rate is approaching 30% of revenues.

Key performance metrics:

 

    25% earnings per share growth to a record 89 cents

 

    31% increase in net income to $34 million

 

    11% operating income increase to a record $54 million

 

    20 basis-point expansion in operating margins to 5.8%

 

    6% sales growth to a record $927 million (7% increase in U.S. markets)

 

    6% increase in gross profit to a record $231 million (20 basis-point lower gross margin)

 

    20 basis-point decline in SG&A as a percentage of sales to 19.3%

 

    $191 million debt reduction versus a year ago

Sales trends:

 

    8% growth in HVAC equipment (66% of sales)

 

    5% growth for other HVAC products (29% of sales)

 

    Flat sales for commercial refrigeration products (5% of sales)

Albert H. Nahmad, Watsco’s Chairman and CEO stated: “Watsco delivered another record quarter with strong growth rates for residential and commercial HVAC systems from increasing unit demand and an improved mix of high-efficiency systems. The results also reflect investments in 140 new customer-facing employees positioned to drive long-term growth, enhance customer service and build market share. Although it is early, we are optimistic that 2018 will be a record year for our company.”

It is important to note that the first quarter of each calendar year is highly seasonal due to the nature and timing of the replacement market for air conditioning systems, which is strongest in the second and third quarters. Accordingly, the Company’s first quarter financial results are disproportionately affected by this seasonality.

Technology Strategy

Watsco has launched a variety of technologies and process enhancements to transform how HVAC contractor customers are served in the marketplace. Watsco believes that speed, productivity and efficiency will be ever more critical as the digital era progresses and is investing to ensure an unparalleled customer-experience among HVAC wholesale distributors. Since 2012, Watsco’s technology team has grown from approximately 60 employees to 180 employees and the present annual run-rate for technology-related spending is approximately $24 million.

 

1


The following information was filed by Watsco Inc (WSO) on Tuesday, April 24, 2018 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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