Watsco, Inc. (NYSE:WSO) (Paris:WSO) today reported results for the second quarter and for the six months ended June 30, 2013.
Second Quarter Results
Earnings per share increased 29% to a record $1.48 per diluted share and net income increased 31% to $51 million.
Operating income increased 22% to a record $105 million with operating margin expanding 90 basis-points to a record 9.4%. On a same-store basis, operating income increased 21% with a 100 basis-point improvement in operating margin to 9.5%.Revenues grew 11% to a record $1.12 billion. On a same-store basis, sales increased 8%, reflecting an 11% increase in air conditioning and heating (HVAC) equipment (65% of sales), a 4% increase in other HVAC products (31% of sales) and a 6% increase in commercial refrigeration products (4% of sales). Gross profit increased 12% to a record $267 million with a 20 basis-point improvement in gross profit margin to 23.8%. On a same-store basis, gross profit increased 9% and gross profit margin improved by 20 basis-points to 23.8%. Selling, general and administrative (SG&A) expenses increased 6% to $162 million and, as a percentage of sales, were a record low of 14.4%. Excluding new locations, SG&A increased 2% and was 14.3% as a percentage of sales. Albert Nahmad, Watsco’s President & CEO stated: “Our second quarter performance produced the highest sales and the greatest profits of any quarter in Watsco’s history. We delivered strong earnings growth and margin expansion from a combination of solid sales growth, better selling margins and operating efficiencies. We remain focused on our fundamentals – gaining share for our supplier partners, improving operating efficiency and having the products and people in place to best serve our customers.” First Half 2013 Results Earnings per share increased 33% to a record $1.87 per diluted share and net income increased 36% to a record $65 million.