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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 Watscos customer-experience and help customers grow their businesses. Most notably, the digitization of Watscos marketplace via e-commerce and iOS/Android-enabled apps, supported by the industrys 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|
|||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, Watscos 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 Companys first quarter financial results are disproportionately affected by this seasonality.
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, Watscos 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.
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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