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Watsco Achieves Record Sales, Operating Margins, Net Income And EPS During Second Quarter

Watsco, Inc. (NYSE:WSO)(PARIS:WSO)today reported record results for the second quarter and for the six months ended June 30, 2014.

Second Quarter Results

Key performance metrics:
  • Revenues increased 4% to a record $1.17 billion
  • Gross profit margin increased 10 basis-points
  • SG&A decreased 20 basis-points as a percentage of sales
  • Operating margins expanded 30 basis-points to a record 9.7%
  • Earnings per diluted share increased 8% to a record $1.60

Revenue trends:
  • HVAC equipment (66% of sales) increased 6%
  • U.S. residential equipment increased 8% with gains in market share
  • Double-digit growth in high-efficiency residential systems
  • Other HVAC products (30% of sales) increased 2%
  • Commercial refrigeration products (4% of sales) increased 5%
  • Domestic (88% of sales) increased 6% and international decreased 4%

Albert Nahmad, Watsco’s President & Chief Executive Officer stated: “Watsco delivered record performance and the highest operating margin for any quarter in our history driven by a combination of unit growth, a stronger sales mix of high-efficiency HVAC equipment, improved selling margins and operating efficiencies.”

Mr. Nahmad added: “These results also reflect investments in new locations, the addition of more than 200 employees and the development and launch of technologies to generate long-term growth and market share. New locations bring density and convenience to our customers. New employees, including more outside salespeople, counter-sales personnel, commercial HVAC experts and product line champions, intensify our sales and customer-service efforts. Our on-going investments in technology, both in talent and in capital spending, will provide innovative capabilities to sell products and serve our customers as well as provide greater insight into our business. We expect these investments to generate growth, develop share for our vendor partners and further distance ourselves from the competition.”

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