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Watsco Reports Strong Second Quarter Results and Record Cash Flow
Steady Recovery in Market Conditions Leads to Record June Results;
Technology Adoption Accelerates and Provides Competitive Advantage;
Balance Sheet Well-Positioned for Investments in Growth and Expansion
MIAMI, FLORIDA (GLOBENEWSWIRE), July 23, 2020 Watsco, Inc. (NYSE: WSO) reported second quarter results and provided an update regarding its technology initiatives designed to transform its customer-experience.
Technology Innovation Transforming Customer Experience
Watsco continues to lead and innovate through the introduction of new customer-focused technology designed to transform its customer experience and reshape how our industry operates. In light of the challenges posed by the COVID-19 pandemic, Watscos innovations have become ever more critical in the daily life of an HVAC/R contractor. As a result, the Company believes it is uniquely positioned to separate itself from its competition with many of these innovations setting the standard for serving HVAC/R contractors.
New innovations added in 2020 include:
Dockside/curbside pickup to facilitate contactless order fulfillment
Digital customer outreach and training and rapid customer onboarding process for e-commerce
Aggressive promotion of OnCall Air®, a proprietary digital sales platform that enables contractors to remotely generate proposals for homeowners
Expanded consumer financing through CreditForComfort®
Customer use of Watscos innovative mobile apps expanded with average weekly users growing 34% compared to a year ago to over 22,000. E-commerce sales continued to grow at a faster pace than overall growth. The current annual run-rate for e-commerce sales is approximately $1.5 billion and, as a percentage of sales was 33% at June 30, 2020 versus 29% at December 31, 2019.
OnCall Air®, Watscos digital sales platform for HVAC/R contractors, and CreditForComfort®, its companion financing platform, have also gained traction. During the second quarter, OnCall Air® presented quotes to more than 36,000 households and generated $107 million in gross merchandise value for our customers, a 66% increase over last year. CreditForComfort® processed nearly 2,000 retail financing transactions, a 170% increase over last year.
These capabilities provide for a differentiated customer experience that make it possible for HVAC/R contractors to engage digitally with Watsco at every stage in their daily routine. Taken as a whole, Watscos technology offering is unique to the industry and enabled our entrepreneurial leaders to serve customers effectively and with minimal disruption in the current COVID-19 operating environment.
AJ Nahmad, Watscos President, commented: We are encouraged by the accelerated adoption of our technology and the new innovations recently launched. More customers are using our tools as the backbone of their business, allowing them to operate safely and more efficiently as well as providing modern-day tools to interact with homeowners and other end-users. We are energized and committed to doing more to help our customers grow and thrive in this environment.
Financial Strength & Liquidity
Watsco further strengthened its strong balance sheet during the second quarter, generating the highest level of cash flow for any quarter in its history. At June 30, 2020, the Company had $80 million in cash, $33 million in borrowings drawn from its $560 million credit facility and $1.7 billion of shareholders equity. Over the 12 months ended June 30, 2020, Watsco produced $529 million of operating cash flow versus net income of $285 million, repaid
The following information was filed by Watsco Inc (WSO) on Thursday, July 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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