Revenues increased 9% to a record $3.74 billion. Same-store sales increased 7% reflecting a 9% increase in HVAC equipment (63% of sales), a 3% increase in other HVAC products (32% of sales) and a 3% increase in commercial refrigeration products (5% of sales).
Gross profit increased 10% to a record $899 million with gross margin increasing 30 basis-points. Same-store gross profit increased 8% and gross margin increased 30 basis-points. SG&A expenses increased 7% to $628 million and as a percentage of sales declined 40 basis-points to a record low of 16.8%. SG&A excluding new locations increased 3% to $607 million and, as a percentage of sales, declined 60 basis-points.
Mr. Nahmad added, “2013 was another great year, which we believe highlights the stability and consistency of our company. Our team did a super job of managing the business and took advantage of opportunities in the markets to drive the business and optimize performance. Watsco’s scale, access to capital, commitment to innovation and long-standing vendor relationships are all at the disposal of our most important asset - the local branches that serve our contractor customers.”
2013 results include 35 new locations from a joint venture formed in April 2012 with Carrier Corporation in Canada, of which Watsco owns 60% and Carrier owns 40%. 2013 results also reflect a 10% greater ownership interest effective July 2, 2012 in Carrier Enterprise LLC, a U.S. joint venture formed with Carrier in 2009.Cash Flow Operating cash flow for the full year 2013 was $150 million (approximately $4.66 per diluted share) and was $99 million for the fourth quarter. Since 2000, Watsco’s operating cash flow was approximately $1.2 billion compared to net income of approximately $1.1 billion, surpassing the Company’s stated goal of generating cash flow greater than net income. Mr. Nahmad added, “2013 was another strong year for cash flow, which we expect to continue in 2014. Our philosophy of sharing increased cash flow through higher dividends while maintaining a conservative financial position with continued capacity to build our network remain cornerstones of our company.”