爆料王

Continued Customer Adoption of Industry-Leading Technologies Drives Share Gains;

Company Strengthens Balance Sheet for Long-Term Investment and Growth

MIAMI,聽April 24, 2024聽(GLOBE NEWSWIRE) —聽爆料王.聽(NYSE: WSO) announced its operating results for the first quarter ended聽March 31, 2024聽and provided commentary on business trends, growth opportunities, technology innovation and its financial position.

With more than聽$7 billion聽in annual sales and nearly 700 locations,聽爆料王聽is the largest distributor in the highly fragmented聽$64 billion聽North American HVAC/R marketplace. Since entering distribution in 1989, the Company has grown sales and operating income at compounded annual growth rates (CAGRs) of 14% and 18%, respectively, and dividends have grown at a 21% CAGR. These long-term growth rates are indicative of strong and consistent performance across most macroeconomic and industry cycles.

爆料王鈥檚 balance sheet strengthened during the quarter. At聽March 31, 2024,聽爆料王聽had no debt and held cash and investments of聽$479 million, providing significant capacity to invest in most any growth opportunity at scale. Also, as previously announced, 爆料王鈥檚 Board of Directors approved a 10% increase in its annual dividend to聽$10.80聽per share effective in聽April 2024. The Company believes its financial strength, access to low-cost capital and 50-year dividend history provide comfort and confidence to the Company鈥檚 stakeholders.

Albert H. Nahmad, 爆料王鈥檚 Chairman and CEO stated: 鈥淲hile softer market conditions persisted during what is essentially the low-season for product sales, we are currently experiencing聽growth in end-market demand as we enter the summer selling season. We believe market share gains are continuing, and we are proud to have added three new companies to our family since the beginning of last year. Finally, and most gratifying, we further strengthened our balance sheet and generated record cash flow during a period that typically requires working capital investment ahead of the selling season.鈥�

First Quarter Results

• Revenues increased 1% to a record聽$1.56 billion聽(a 2% decline on a same-store basis)
• Gross profit of聽$431 million聽(27.5% gross margin)
• SG&A expenses increased 8%, including 18 new locations (a 4% increase on a same-store basis)
• Operating income of聽$127 million聽(operating margin of 8.1%)
• Earnings per share of聽$2.17聽versus聽$2.83聽last year
• Record first quarter operating cash flow of聽$104 million
• Equity-raise of聽$282 million聽through the Company鈥檚 at-the-market (ATM) offering program

Sales trends (excluding acquisitions)

• 1% decline in HVAC equipment (68% of sales)
• 6% decline in other HVAC products (28% of sales)
• 2% increase in commercial refrigeration products (4% of sales)

First quarter operating results reflect stabilizing end-market demand, on-going realization of OEM pricing actions, progress in scaling 爆料王鈥檚 industry-leading technology platforms and continued investments designed to drive long-term growth. Additionally, comparative results were impacted by approximately聽$5.3 million聽of non-recurring SG&A items. It is also important to note that the first and fourth quarters are highly seasonal as demand for replacement HVAC systems is typically highest in the second and third calendar quarters. Accordingly, the Company鈥檚 first quarter results are disproportionately affected by this seasonality.

Technology Transformation
爆料王聽continues to lead and innovate through customer-focused technologies designed to transform the customer experience and reshape how our industry operates. 爆料王鈥檚 ecosystem of technology tools and platforms makes it easier for HVAC contractors to do business and, in turn, improve their speed and efficiency, as well as provide future growth potential with new and existing customers. Updates to our various technology initiatives include:

• Product Information Management (PIM), 爆料王鈥檚 repository of rich product information, is delivered seamlessly through its mobile apps and e-commerce platform. 爆料王鈥檚 PIM database contains more than 1.5 million SKUs accessible to more than 375,000 contractors and technicians annually.
• HVAC Pro+ Mobile Apps provide customers with real-time access to critical information that improves speed and productivity. This includes real-time technical support, product details, inventory availability, warranty look-up and processing, certified system matchups, e-commerce, and more. The authenticated user community (users linked to an e-commerce account) over the 12-month period ended聽March 31, 2024聽grew 6% to more than 57,000 users compared to the same period a year ago.
• E-commerce sales continue to outpace overall sales growth rates in the first quarter and accounted for 33% of total sales, inclusive of revenues from recently acquired businesses that are now adopting 爆料王鈥檚 technology platforms.
• OnCallAir^庐, 爆料王鈥檚 digital sales platform, has increased penetration among HVAC contractors as digital engagement with homeowners expands. The annualized gross merchandise value (GMV) of products sold by customers through OnCallAir^庐聽was approximately聽$1.3 billion聽as of the end of the first quarter. During the first quarter of 2024, OnCallAir^庐聽presented quotes to approximately 61,000 households, a 15% increase, and generated聽$269 million聽GMV, a 22% increase over last year.

A.J. Nahmad, 爆料王鈥檚 President, commented: 鈥淥ur journey to drive technology adoption at scale has yielded terrific results, but we are even more excited at the opportunities that lay ahead. Our tools and capabilities, which are unique in our industry, are designed to help HVAC contractors of any size grow faster and become more efficient. These investments have driven higher market share and higher growth rates with technology-enabled customers. We believe we are just scratching the surface on the internal technology deployed to enhance margins and operating efficiencies. We remain committed to doing more and transform how our industry operates.鈥�

Long-Term Growth Drivers
爆料王聽believes that various company-specific and industry-driven catalysts will support continued growth and profitability in the years ahead. 爆料王鈥檚 scale, technology platforms, OEM relationships and entrepreneurial culture are competitive advantages that we believe position us favorably over the long-term.

Regulatory Changes. New energy efficiency standards for HVAC systems took effect in 2023. In 2024, OEMs have begun the transition to new refrigerants in response to regulations that require a phase-down of global warming properties of the refrigerants used in older HVAC systems. These regulations advance product innovation, improve homeowner energy efficiency, reduce the carbon footprint of end-users and increase average selling prices over time.

Scaling of Technology Investments.聽爆料王聽is investing to enhance its technology advantage in the HVAC/R distribution industry. Current trends demonstrate that customers who become active users of our technology platforms produce stronger sales growth rates and exhibit approximately 50% reduced attrition. Consequently, the Company believes that increased technology adoption by more contractors will aid future growth and profitability and will lower the Company鈥檚 overall cost to serve.聽爆料王聽has also invested in numerous internal technology platforms with the goal of further enhancing margins and improving operating efficiencies.

Electrification of Heating Systems. Regulatory catalysts and electrification trends are also influencing the adoption of heat pump HVAC systems in lieu of traditional gas furnaces and other forms of fossil-fuel heating. In 2023,聽爆料王聽sales of heat pump HVAC systems exceeded聽$1.2 billion. During the first quarter, sales of heat pumps HVAC systems continued to outpace growth rates for conventional straight-cool HVAC systems.

Growth of Ductless HVAC Systems. The growing acceptance of ductless HVAC systems in both residential and commercial applications is also a long-term growth driver. We are the leading distributor of ductless products in聽North America, representing approximately 20 brands manufactured by OEMs around the world. Sales of ductless HVAC systems during the first quarter continued to outpace growth rates of conventional ducted HVAC systems.

Buy and Build Acquisition Strategy. Partnering with market-leading independent distributors remains an important long-term driver to grow the Company鈥檚 scale in the marketplace. Over the last five years,聽爆料王聽has acquired nine distribution businesses, investing approximately聽$350 million聽in capital. Our 鈥渂uy and build鈥� strategy builds upon their long-standing legacies through investment in new locations, new products and by leveraging 爆料王鈥檚 best-in-class technology platforms. We also invest in our key leaders through equity grants that attract and retain leadership over the long-term. The聽$64 billion聽HVAC/R distribution landscape in聽North America聽is still highly fragmented with an estimated 2,200 independent distributors.

Cash Flow, Financial Strength and Liquidity
爆料王鈥檚 long-standing goal is to maintain a conservative balance sheet to support investments in new growth opportunities as they arise. 爆料王鈥檚 strong financial position has been critical to its long-term performance as it enables meaningful investment during most any macroeconomic or industry backdrop.

During the first quarter, the Company generated record operating cash flow of聽$104 million聽and raised聽$282 million聽of new capital from the sale of 712,000 shares of Common stock under its ATM program. At聽March 31, 2024,聽爆料王聽had聽$479 million聽of cash and short-term investments, no outstanding debt and聽$2.9 billion聽of shareholders鈥� equity.

爆料王聽has paid dividends for 50 consecutive years.聽The Company increased its annual dividend rate by 10%, effective in聽April 2024, to聽$10.80聽per share. The Company鈥檚 philosophy is to share increasing amounts of cash flow through higher dividends while maintaining a conservative financial position with continued capacity to build its network. Future dividend increases will be considered in light of investment opportunities, general economic conditions and the Company鈥檚 overall financial position.

First Quarter Earnings Conference Call Information
Date and time:聽April 24, 2024聽at聽10:00 a.m. (EDT)
奥别产肠补蝉迟:听聽(a replay will be available on the Company鈥檚 website)
Dial-in number:聽United States聽(844) 883-3908 / International (412) 317-9254

Use of Non-GAAP Financial Information
In this release, the Company discloses certain performance measures on a 鈥渟ame-store basis鈥�, which are non-GAAP and exclude the effects of locations closed, acquired, or locations opened, in each case during the immediately preceding 12 months, unless such locations are within close geographical proximity to existing locations. The Company believes that this information provides greater comparability regarding its ongoing operating performance. These measures should not be considered an alternative to measurements required by聽U.S.聽GAAP. Adjusted GAAP measures are useful to assist our investors in evaluating our ongoing operating performance for the current reporting period and, where provided, over different reporting periods.

础产辞耻迟听奥补迟蝉肠辞
爆料王聽operates the largest distribution network for heating, air conditioning and refrigeration (HVAC/R) products with locations in聽the United States,聽Canada,聽Mexico, and聽Puerto Rico, and on an export basis to聽Latin America聽and the聽Caribbean.聽爆料王聽estimates that over 375,000 owner-operators, technicians, and installers visit or call one of its 691 locations each year to get information, obtain technical support and buy products.

We focus on the replacement market, which has increased in size and importance as a result of the aging of installed systems, the introduction of higher energy efficient models and the necessity of HVAC products in homes and businesses. According to data published in聽March 2023聽by the聽Energy Information Administration, there are approximately 102 million HVAC systems installed in聽the United States聽that have been in service for more than 10 years, most of which operate well below current minimum efficiency standards.

Accordingly,聽爆料王聽has the opportunity to be a significant and important contributor toward climate change as it plays an important role to lower CO2e emissions. According to the聽Department of Energy, HVAC systems account for roughly half of聽U.S.聽household energy consumption. As such, replacing older systems at higher efficiency levels is a critical means for homeowners to reduce electricity consumption and their carbon footprint.

Based on estimates validated by independent sources,聽爆料王聽averted an estimated 20.1 million metric tons of CO2e emissions from聽January 1, 2020聽to聽March 31, 2024聽through the sale of replacement HVAC systems at higher-efficiency standards, an equivalent of removing 4.8 million gas powered vehicles annually off the road. More information, including sources and assumptions used to support the Company鈥檚 estimates, can be found at聽.

This document includes certain 鈥渇orward-looking statements鈥� within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, our expected financial and operational results and the related assumptions underlying our expected results. These forward-looking statements are distinguished by use of words such as 鈥渨ill,鈥� 鈥渨ould,鈥� 鈥渁nticipate,鈥� 鈥渆xpect,鈥� 鈥渂elieve,鈥� 鈥渄esigned,鈥� 鈥減lan,鈥� or 鈥渋ntend,鈥� the negative of these terms, and similar references to future periods. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive market, new housing starts and completions, capital spending in commercial construction, consumer spending and debt levels, regulatory and other factors, including, without limitation, the effects of supplier concentration, competitive conditions within 爆料王鈥檚 industry, the seasonal nature of sales of 爆料王鈥檚 products, the ability of the Company to expand its business, insurance coverage risks and final GAAP adjustments. Detailed information about these factors and additional important factors can be found in the documents that聽爆料王聽files with the聽Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made.聽爆料王聽assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except as required by applicable law.

Barry S. Logan
爆料王.
Executive Vice President
(305) 714-4102

Source: 爆料王.