Exhibit 99.1

Watsco EPS Jumps 25% Setting New Records for Sales, Operating Profit,

Net Income and Operating Margins During Third Quarter

 

 

Strong Residential Demand and Gains in Operating Efficiency Drive

120 Basis-Point Operating Margin Expansion;

Nine-Month Operating Cash Flow Increases 89% to a Record $373 Million

MIAMI, FLORIDA – (GLOBENEWSWIRE), October 22, 2020 – Watsco, Inc. (NYSE: WSO) reported record operating results, setting new records for sales, operating income, net income and earnings per share (EPS) during the third quarter and nine-month periods ended September 30, 2020. The Company generated record operating cash flow of $373 million through September 30, 2020, an 89% increase over the same period in 2019.

Watsco’s entrepreneurial culture, which empowers leaders to think and act locally, has proven critically important in response to current business conditions. Technology investments designed to revolutionize Watsco’s customer experience have also proven critical during a challenging operating environment. Notably, adoption of mobile apps and customer-facing platforms, including e-commerce, has grown, enabling more customers to engage digitally. In addition, curbside / dockside technology has been implemented to facilitate contactless order fulfillment and help customers and employees operate safely and effectively. Taken as a whole, we believe Watsco’s technology offering is unique to the industry, solidifies existing customer relationships and creates new-customer opportunities to generate long-term growth and market share gains.

Third Quarter Performance Metrics

 

   

25% EPS increase to a record $2.76

 

   

25% operating income increase to a record $157 million

 

   

120 basis-point operating margin expansion to a record 10.2%

 

   

28% growth in net income attributable to Watsco to a record $106 million

 

   

10% sales growth to a record $1.54 billion (8% same-store increase, including 15% in U.S. markets)

 

   

12% gross profit increase to a record $374 million (30 basis-point increase in gross margin)

 

   

4% SG&A expense increase, including new locations

 

   

Flat same-store SG&A expenses (100 basis-point decrease as a percentage of sales)

Sales trends (excluding acquisitions):

 

   

10% growth in HVAC equipment (70% of sales), including 19% growth in U.S. residential products

 

   

2% increase in other HVAC products (27% of sales)

 

   

Flat sales in commercial refrigeration products (3% of sales)

Albert H. Nahmad, Watsco’s Chairman and CEO commented: “We are pleased to deliver another record quarter, especially during a complex business environment. Our core U.S. residential business has remained solid and continues to see above-average growth trends. We further strengthened our balance sheet, as evidenced by our record cash flow and debt reduction. Watsco is virtually debt-free and capable of investing in almost any-sized opportunity to grow our network and leadership position in the estimated $40 billion North American HVAC distribution industry. We express our gratitude to our more than 5,700 employees for their extraordinary efforts during this challenging period.”

Nine-Month Performance Metrics

 

   

5% EPS increase to a record $5.82

 

   

5% operating income increase to a record $331 million (operating margins consistent at 8.5%)

 

1


The following information was filed by Watsco Inc (WSO) on Thursday, October 22, 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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