爆料王

Continued Customer Adoption of Industry-Leading Technologies Helps Drive Share Gains;
Debt-Free Balance Sheet Supports Long-Term Investment聽and Growth

MIAMI,聽July 30, 2024聽(GLOBE NEWSWIRE) —聽爆料王.聽(NYSE: WSO) announced its operating results for the second quarter and six-month period ended聽June 30, 2024. Commentary was also provided on business trends, growth opportunities, technology innovation and its financial position.

爆料王聽is the largest distributor in the highly fragmented聽$64 billion聽North American HVAC/R marketplace, with more than聽$7 billion聽in annual sales and nearly 700 locations in the聽U.S.,聽Canada, and聽Latin America.聽爆料王聽estimates that over 375,000 owner-operators, technicians and installers visit, call or digitally engage with one of its locations each year to get information, obtain technical support and buy products.

Since entering distribution in 1989, 爆料王鈥檚 operating profits have grown at a compounded annual growth rate (CAGR) of 18% 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.

A cornerstone of 爆料王鈥檚 growth strategy is the acquisition of long-standing, family-owned businesses.聽爆料王聽has completed 69 acquisitions, achieving industry-leading scale and preserving many wonderful business legacies into future generations. Over the last five years,聽爆料王聽has acquired eight businesses that today generate approximately聽$1 billion聽in annual sales. We believe our proven entrepreneurial culture, track record, strategic relationships and strong financial position provide an attractive home for great businesses, and we are actively seeking additional opportunities to expand our network.

爆料王聽has also developed industry-leading technologies to enhance the customer experience, gain operating efficiencies and drive growth. Today, approximately 60,000 contractors and technicians engage with聽爆料王聽digitally, which is complimented by modern, state-of-the-art technologies in each of our locations to better serve customers. We have achieved stronger sales growth rates among our digitally engaged customers, increased penetration with new customers and lowered overall customer attrition. Follow-on investments are being made to enhance current technologies and to grow customer adoption. The Company believes these technologies will continue to be an important catalyst for long-term growth and performance.

Second Quarter Results

• Revenue increased 7% to a record聽$2.1 billion聽(4% increase on a same-store basis)
• Gross profit increased 3% to聽$580 million聽(27.1% gross margin)
• SG&A increased 5% (2% increase on a same-store basis) and improved 30 basis-points as a percentage of sales
• Operating income of聽$269 million聽(operating margin of 12.6%)
• Earnings per share of聽$4.49聽versus聽$4.42聽last year
• Operating cash flow improved by聽$100 million聽compared to last year ($58 million聽of cash flow in 2024 versus a聽$42 million聽cash use in 2023)

Sales trends (excluding acquisitions)

• 8% increase in HVAC equipment (71% of sales)
• 1% decline in other HVAC products (25% of sales)
• 1% increase in commercial refrigeration products (4% of sales)

Albert H. Nahmad, 爆料王鈥檚 Chairman and CEO noted: 鈥淲e are pleased with our second quarter results, which reflect record sales, strong cash flow and a strengthened balance sheet, which is particularly gratifying during our peak selling season. In addition, we made strides toward producing greater operating efficiencies across our network, as evidenced by our SG&A performance. We now look ahead to the next important regulatory transition and the introduction of new products by our OEM partners later this year.鈥�

Second quarter sales reflect healthier residential end-markets, reflecting 6% growth in ducted residential units and a 3% increase in average selling price. In addition, sales of commercial products grew 8% during the quarter on top of the 18% growth achieved during the comparable period last year.

First-Half Results

• Revenue increased 4% to a record聽$3.7 billion聽(1% increase on a same-store basis)
• Gross profit of聽$1.0 billion聽(27.3% gross margin)
• SG&A increase of 6% (3% increase on a same-store basis)
• Operating income of聽$395 million聽(operating margin of 10.7%)
• Earnings per share of聽$6.69聽versus聽$7.25聽last year
• Operating cash flow improved by聽$250 million聽compared to last year ($161 million聽of cash flow in 2024 versus an聽$89 million聽cash use in 2023)

Sales trends (excluding acquisitions)

• 4% increase in HVAC equipment (70% of sales)
• 3% decline in other HVAC products (26% of sales)
• 2% increase in commercial refrigeration products (4% of sales)

Mr. Nahmad聽further commented: 鈥淕iven our strong balance sheet and solid cash flow,聽爆料王聽is well-positioned to invest in future growth opportunities to expand our business. We look forward to investing in market share opportunities as the upcoming regulatory change and product transitions unfold. We are also prepared to partner with other great family businesses in our industry. Our scale, technology and entrepreneurial culture gives us confidence in the growth outlook.鈥�

Technology Transformation
爆料王聽has developed the industry鈥檚 leading digital ecosystem of technologies that transform the customer experience and reshape how our industry operates. Through platforms like HVAC Pro+ and OnCallAir庐,聽爆料王聽has enabled above-market growth for its customers and, in turn, has made it easier for contractors to do business thereby improving their speed, efficiency and profitability. 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 contractors real-time access to critical information that improves speed to market and enhances efficiency for the customer. This includes real-time technical support, product specifications, inventory availability, warranty look-up and processing, system matchups, e-commerce, and much more. The community of authenticated users (those linked to an e-commerce account) over the 12-month period ended聽June 30, 2024聽expanded 12% to approximately 60,000 users.
• E-commerce sales continue to outpace overall sales growth rates, growing 13% during the quarter and accounting for 36% of total sales (inclusive of revenues from recently acquired businesses), and in some regions, exceed 60% of total sales.
• 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 was approximately聽$1.4 billion聽for the twelve-month period ended聽June 30, 2024. During the first-half of 2024, OnCallAir庐 presented quotes to approximately 160,000 households, an 18% increase, and generated聽$743 million聽GMV, a 27% increase, versus the comparable period last year.

A.J. Nahmad, 爆料王鈥檚 President, commented: 鈥淲e continue to make good progress towards our goal of scaling 爆料王鈥檚 customer-focused technologies to more and more contractors. Our e-commerce sales grew at nearly double the rate of overall sales, indicating more progress in scaling our industry-leading tools and platforms. We are also engaging with more contractors and technicians than ever before through our mobile platforms, which should generate more operating efficiencies over time. I am encouraged by our progress and we have produced great results, but I feel the bulk of the benefit from our technology investments remains ahead of us.鈥�

Long-Term Growth Drivers
In addition to the Company鈥檚 unique technology investments that are expected to drive future growth,聽爆料王聽believes that various industry-driven catalysts will support continued growth and profitability in the years ahead. These industry catalysts 鈥� coupled with 爆料王鈥檚 scale, technology platforms, OEM relationships and entrepreneurial culture 鈥� are competitive advantages that we believe position us favorably over the long-term.

Regulatory Changes. New energy efficiency standards and a new generation of refrigerants translate to more product innovation, improved homeowner energy efficiency, reduced carbon footprint of end-users, and increased average selling prices over time.

Technology Investments.聽爆料王聽is investing to enhance its technology advantage in the HVAC/R distribution industry. Customers who become active users of our technology platforms produce higher growth rates and exhibit approximately 50% less 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 its customers.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. For the twelve-month period ended聽June 30, 2024, sales of heat pump HVAC systems exceeded聽$1.2 billion聽and 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 around the world. Long-term growth in sales of ductless HVAC systems continue to outpace growth rates of conventional ducted HVAC systems.

Buy and Build Acquisition Strategy.聽爆料王聽has been the partner of choice for 69 market-leading independent distributors, and these acquisitions are an important long-term driver of the Company鈥檚 growth and scale. 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 technology platforms. 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 strong balance sheet and liquidity are key components of the Company鈥檚 ability to drive growth across any industry or macroeconomic cycle. As of聽June 30, 2024,聽爆料王聽had聽$425 million聽of cash and short-term investments and no borrowings under its unsecured聽$600 million聽credit facility, providing significant access to capital to invest in new growth opportunities. In聽March 2024, the Company raised聽$282 million聽of new capital from the sale of 712,000 shares of Common stock under its ATM program. We have executed a supplemental ATM program in聽May 2024聽providing equity sales capacity of聽$400 million.

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.

Second Quarter Earnings Conference Call Information
Date and time:聽July 30, 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
This release discloses certain performance measures on a 鈥渟ame-store basis鈥�, which are non-GAAP and excludes 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 this information provides greater comparability regarding its ongoing operating performance. These measures should not be considered an alternative to measurements presented in accordance with聽U.S.聽GAAP.

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.

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 20.9 million metric tons of CO2e emissions from聽January 1, 2020聽to聽June 30, 2024聽through the sale of replacement HVAC systems at higher-efficiency standards, an equivalent of removing 5.0 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
Executive Vice President
(305) 714-4102
别-尘补颈濒:听blogan@watsco.com

Source: 爆料王.