爆料王

Entrepreneurial Culture, Debt-Free Balance Sheet, Leading Technologies and Upcoming Regulatory Change Support Long-Term Investment and Growth

MIAMI,聽Oct. 23, 2024聽(GLOBE NEWSWIRE) —聽爆料王.聽(NYSE: WSO) announced its results for the third quarter and nine-month period ended聽September 30, 2024聽and provided commentary on business trends, growth opportunities, technology innovation and its financial strength.

爆料王聽is the largest distributor in the highly fragmented聽$64 billion聽North American HVAC/R market, with nearly 700 locations across the聽U.S.,聽Canada and聽Latin America.聽爆料王聽estimates that it provides services on a local basis to over 375,000 owner-operators, technicians and installers annually. 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. The Company believes 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Since 1989, 爆料王聽has acquired 69 companies, while preserving their unique culture and legacies. Since聽August 2019, 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, technology advantage, strong financial position and other unique factors provide an attractive home for great businesses, as well as for the OEMs and other suppliers throughout our industry.

爆料王聽has also developed industry-leading technologies to enhance the customer experience, gain operating efficiencies and drive growth. Today, approximately 61,000 contractor businesses and technicians engage with聽爆料王聽digitally, complemented by modern, state-of-the-art technologies at each of our nearly 700 locations. Since the launch of its technology ecosystem,聽爆料王聽has generated higher sales growth rates among digital customers, added new customers and reduced customer attrition. The Company believes this technology advantage will continue to provide unique opportunities for long-term growth.

Highlights Related to 2024 Performance
爆料王鈥檚 unit sales of residential HVAC equipment stabilized during the 2024 selling season (i.e. growth rates for 2024鈥檚 second and third quarter on a combined basis) complemented by solid growth in sales of commercial HVAC systems. Business trends in聽October 2024聽have strengthened, reflecting meaningful unit growth and an overall mid-single digit growth rate in sales.

2024 results also reflect ongoing efforts to regain sales and market share related to one of the Company鈥檚 primary OEMs after product and supply chain disruptions impacted customer relationships in 2023.聽爆料王聽and its OEM partner have made co-investments that are yielding positive results to both regain lost customers and attract new customers. The Company estimates these investments have been dilutive to gross margins by approximately 30 basis-points for the nine-month period ended聽September 30, 2024.聽爆料王聽is actively collaborating and investing alongside the OEM to reestablish market share and drive long-term growth.

爆料王聽has further strengthened its financial position in 2024 and is well-positioned to invest in growth. Operating cash flow increased 50% to a record聽$394 million聽for the nine-months ended聽September 30, 2024. At聽September 30, 2024, the Company had聽$550 million聽in cash and short-term investments, no borrowings under its聽$600 million聽revolving credit facility and聽$400 million聽of equity capacity under its ATM program.

Third Quarter Results

• Sales increased 2% to a record聽$2.16 billion聽(flat on a same-store basis)
• Gross profit of聽$566 million聽with gross margin of 26.2%
• SG&A expenses increased 2% (flat on a same-store basis)
• Operating income decreased 2% to聽$250 million聽(11.6% operating margin)
• Net income attributable to聽爆料王聽of聽$171 million, flat versus last year
• Earnings per share declined 3% to聽$4.22

Sales trends (excludes acquisitions)

• 1% increase in HVAC equipment (71% of sales)
• 2% decline in other HVAC products (25% of sales)
• 4% decline in commercial refrigeration products (4% of sales)

Albert H. Nahmad, Chairman and CEO commented: 鈥淒uring the third quarter,聽爆料王聽achieved record sales and net income, produced strong cash flow and made further strides to improve operating efficiency across its network. We believe the market environment for HVAC products stabilized this year, and we look forward to helping our customers navigate next year鈥檚 regulatory transition toward the new A2L systems. This regulatory change will ultimately impact approximately 60% of our sales and offers our contractor customers the opportunity to upgrade older HVAC systems with new products that are both more energy-efficient and environmentally-friendly.鈥�

Nine-Month Results

• Sales increased 3% to a record聽$5.9 billion聽(1% increase on a same-store basis)
• Gross profit of聽$1.58 billion, flat versus the last year (gross margin of 26.9%)
• SG&A expenses increased 5% to聽$955 million聽(2% increase on a same-store basis)
• Operating income decreased 6% to聽$646 million聽(11.0% operating margin)
• EPS of聽$10.92聽compared to聽$11.60聽in the same period last year
• Operating cash flow improved 50% to a record聽$394 million聽versus the same period last year

Sales trends (excludes acquisitions)

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

Mr. Nahmad聽added: 鈥淥verall, we believe that our 2024 performance reflects market share gains and represents solid performance relative to trends in the market and the economy. We see the potential for further improving productivity and are gratified that our focus on the balance sheet has produced record cash flow. Our teams continue to lead and innovate, and I am optimistic that our industry-leading scale, entrepreneurial culture, technology advantage and strong balance sheet position us to capture growth and share.鈥�

Culture of Innovation
爆料王聽remains committed to scaling the industry鈥檚 most robust, user-friendly technology platforms for HVAC/R contractors, which make it easier for customers to interact with the Company and, as a further step, modernize how contractors engage with consumers and businesses. Active technology users continue to grow sales at faster rates than non-users and, overall, we experience 57% less attrition among users of our technology platforms. The Company believes that scaling its technology platform through increased adoption by customers will lead to higher organic growth rates, lower attrition and lower costs to serve.

Specific technology-related updates 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 provides contractors digital access to more than 900,000 SKUs.
• 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September 30, 2024聽expanded 14% to approximately 61,000 users.
• E-commerce sales continue to outpace overall sales growth rates, growing 5% during the nine-month period ended聽September 30, 2024聽and accounting for 35% 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 12-month period ended聽September 30, 2024. From聽January 1 to September 30, 2024, OnCallAir庐 presented quotes to approximately 258,000 households, a 17% increase, and generated聽$1.2 billion聽GMV, a 22% increase, versus the same period last year.

A.J. Nahmad, 爆料王鈥檚 President, added: 鈥淥ur contractor customers are the backbone of our business, and we are committed to empowering them with the best technology platforms available. Our ongoing investments in advanced digital tools and innovative solutions are designed to streamline their operations, enhance efficiency, and drive their success. We are proud to support our customers and their ambitions with the technology resources they need to thrive in a competitive landscape, and we expect to invest more over time to provide a distinct, long-term competitive advantage.鈥�

Dividend Policy
爆料王鈥檚 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. 爆料王鈥檚 annual dividend rate was increased 10% to聽$10.80聽per share effective in聽April 2024. Future dividend increases are considered in light of investment opportunities, general economic conditions and the Company鈥檚 overall financial position.

Third Quarter Earnings Conference Call Information
Date and time:聽October 23, 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 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 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is the largest distributor of 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 21.8 million metric tons of CO2e emissions from聽January 1, 2020聽to聽September 30, 2024聽through the sale of replacement HVAC systems at higher-efficiency standards, an equivalent of eliminating 5.2 million gas powered vehicles off the road annually. 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.

聽Barry S. Logan聽
Executive Vice President
(305) 714-4102
别-尘补颈濒:听blogan@watsco.com

Source: 爆料王.