Watsco, Inc. (NYSE:WSO)(Paris: WSO) today reported results for the full year and fourth quarter ended December 31, 2012. Record results were achieved for revenues, net income, earnings per share (adjusted for one-time items) and cash flow.
Full Year Results
Earnings per share for 2012, on an adjusted basis, increased 11% to $3.03 per diluted share ($2.70 on a GAAP basis) compared to $2.74 per diluted share for 2011, and net income increased 14% to a record $103 million. Operating income increased 13% to a record $225 million with an operating margin of 6.5%. Same-store operating profit increased 1% to $201 million with an operating margin of 6.6%.
Revenues increased 15% to a record $3.43 billion and increased 4% on same-store basis, reflecting a 5% increase in sales of HVAC equipment (63% of sales), a 2% decline in sales of other HVAC products (33% of sales) and a 21% increase in sales of commercial refrigeration products (4% of sales).Gross profit increased 12% to a record $814 million with gross margin declining 80 basis-points to 23.7%. On a same-store basis, gross profit was flat and gross margin decreased 90 basis-points to 23.6%. Selling, general & administrative (SG&A) expenses increased 11% to $589 million and as a percentage of sales declined 60 basis-points to a record low of 17.2%. SG&A excluding new locations decreased 1% to $523 million and, as a percentage of sales, declined 80 basis-points to a record low of 17.0%. Albert Nahmad, Watsco’s Chairman and Chief Executive Officer stated: “2012 was an excellent year for Watsco. We continued our expansion into international markets, which now account for 16% of sales and we believe represent an important source of growth for Watsco in the future. Domestically, we generated sales growth and gained market share in both residential and commercial HVAC equipment markets and began to see a lift in sales of HVAC supplies as residential new construction is emerging in our markets. We expect 2013 to be another record year.”