Exhibit 99.1

Watsco Achieved Record Sales, Maintained Solid Balance Sheet and Progressed With its Innovative Technologies

 

 

MIAMI, FLORIDA – (GLOBENEWSWIRE), April 23, 2020 – Watsco, Inc. (NYSE: WSO) reported results for the quarter ended March 31, 2020 and provided commentary on its financial strength, culture of innovation and other important aspects of its business.

Financial Strength & Liquidity

Watsco has a solid balance sheet with little debt. At March 31, 2020, the Company had $51 million in cash, $156 million in borrowings drawn from its $560 million credit facility and $1.7 billion of shareholders’ equity. The Company believes this financial strength, its current highly-conservative leverage ratios, access to low-cost capital and its historical ability to generate cash flow provides comfort and confidence to customers, employees and OEM partners as well as affording Watsco the capacity to invest in almost any size opportunity.    

As an historical example, Watsco nearly doubled the size of its business during the 2009 recession through the creation of Carrier Enterprise, a strategic joint venture with Carrier Corporation, whereby Watsco acquired a controlling interest in Carrier’s $1.8 billion HVAC distribution business. Substantial follow-on investments were made to build a larger Carrier Enterprise, which has proven to be a successful and prosperous partnership for both Watsco and Carrier.

Diversity of Geographic Markets, Customers and Products

Watsco operates the industry’s largest and most diverse distribution network, which we believe offers long-term stability, risk mitigation and opportunities to create competitive scale:    

Geographic Markets. Watsco’s network consists of 603 locations in 38 states, Canada, Mexico and Puerto Rico and exports products to Latin America and the Caribbean. No single location accounts for more than 3% of total revenues and, on average, a location has approximately $8 million of sales with approximately seven employees operating from 20,000 square feet of warehouse space. This geographic diversity mitigates risk that a disruption in any one market can impact the whole. Multiple-location market coverage exists to provide the opportunity to meet our customer’s needs from several locations within a business region. The Company’s technology platforms are personalized and available to customers in all markets.

Customers. Watsco’s network processes and fulfills over 7 million sales orders annually to over 300,000 contractors and technicians, increasingly through the use of digital tools, including e-commerce and mobile apps. No single contractor customer represents more than 1% of revenue. Over 35 regional presidents, 603 location managers, 1,000 commissioned salespeople and 2,500 store personnel provide knowledge, support and service to local contractors. Products are generally purchased ‘when-needed,’ which is usually within minutes or hours of a contractor’s visit to a home or business. The Company estimates replacement and repair of HVAC systems accounts for approximately 80% of Watsco’s sales.

Products. Watsco offers a wide variety of air conditioning and heating equipment and related parts and supplies along with specialized refrigeration products sourced from more than 1,300 vendors, available in-store or on-line. The Company sources HVAC equipment (67% of first quarter sales) from 20 domestic and international OEMs and sells over 25 brand-names with a wide variety of price points, efficiencies and capacities to meet the needs of contractors, homeowners and businesses. To enable e-commerce and other digital solutions, Watsco has mastered the industry’s largest product information database with rich data for over 728,000 SKUs, offering customers product solutions nearly anywhere, anytime on any device.


The following information was filed by Watsco Inc (WSO) on Thursday, April 23, 2020 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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