Financial Data and Key Metrics Changes - Watsco reported a record EPS growth of 25% to $2.76, with records set for sales, gross profit, operating profit, operating margins, and net income [5][14] - The company generated record operating cash flow of $373 million, with no debt at this time, indicating strong financial health and capacity for investment [14] Business Line Data and Key Metrics Changes - The U.S. residential HVAC equipment business grew by 19% during the quarter, driven by strong HVAC replacement sales [5][25] - E-commerce transactions increased by 19% this year, reaching nearly 1 million online orders, translating to an annual rate of approximately $1.5 billion [7] - The parts and supply side of the business experienced moderate growth in the mid-single digits, contributing positively to gross profit [22] Market Data and Key Metrics Changes - The international market has been more impacted than others, particularly in the commercial applied market, although profit from international operations increased despite lower sales [25] - The U.S. residential market is reported to be up 8% year-to-date, with no price increases, indicating a healthy replacement market [87] Company Strategy and Development Direction - Watsco is focused on increasing technology adoption among customers, with significant investments in platforms like OnCall Air and CreditForComfort to enhance digital connectivity and sales efficiency [6][9] - The company aims to capture more market share in a $40 billion industry where it currently holds a $5 billion share, indicating substantial growth potential [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about sustaining growth rates, attributing it to both industry growth and market share gains through technology [82][90] - The pandemic has shifted consumer behavior, leading to increased demand for HVAC services as homeowners spend more time at home [127] Other Important Information - The company has seen a 31% increase in weekly users of its mobile apps, indicating growing engagement with its technology [7] - Inventory management improvements have led to better inventory turns and quality, enhancing operational efficiency [30] Q&A Session Summary Question: What was the big driver in U.S. residential sales growth? - Management clarified that residential sales include equipment and that moderate growth in parts and supplies contributed to gross profit [18][22] Question: How do inventory levels look? - Management indicated that inventory levels have normalized, with improvements in inventory management technology aiding in efficiency [26][30] Question: How significant is indoor air quality (IAQ) for the company? - IAQ has become a critical product area, growing rapidly due to increased consumer interest during the pandemic [34][38] Question: What is the outlook for SG&A costs? - Management noted that fixed costs have been reduced, and variable costs will increase with sales growth, indicating a focus on maintaining efficiency [74][78] Question: How sustainable is the current growth rate? - Management acknowledged the difficulty in predicting sustainability but indicated that growth is being driven by both industry trends and market share gains [82][90]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended June 30, 2020 or ☐ Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From to Commission file number 1-5581 I.R.S. Employer Identification Number 59-0778222 WATSCO, INC. (a Florida Corporation) 2665 South Bayshore Drive, Suite ...

Watsco Inc (NYSE:WSO) Q2 2020 Earnings Conference Call July 23, 2020 10:00 AM ET Company Participants Albert Nahmad - CEO A.J. Nahmad - President Paul Johnston - EVP Barry Logan - EVP Conference Call Participants Josh Pokrzywinski - Morgan Stanley Stephen Volkmann - Jefferies David Manthey - Baird Jeff Hammond - KeyBanc Capital Markets Brett Linzey - Vertical Research Chris Dankert - Longbow Research Steve Tusa - JP Morgan Operator Good day, and welcome to the Watsco Incorporated Second Quarter 2020 Earning ...

or ☐ Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From to UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended March 31, 2020 Commission file number 1-5581 I.R.S. Employer Identification Number 59-0778222 WATSCO, INC. (a Florida Corporation) 2665 South Bayshore Drive, Suite 901 Miami, Florid ...

Watsco, Inc. (NYSE:WSO) Q1 2020 Earnings Conference Call April 23, 2020 10:00 AM ET Company Participants Albert Nahmad - Chairman & CEO Paul Johnston - EVP Barry Logan - EVP, Planning & Strategy and Secretary Aaron Nahmad - President & Director Conference Call Participants Joshua Pokrzywinski - Morgan Stanley Brett Linzey - Vertical Research Partners Stephen Volkmann - Jefferies Ryan Merkel - William Blair & Company David Manthey - Robert W. Baird & Co. Steve Tusa - JPMorgan Chase & Co. Jeffrey Hammond - Ke ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 (I.R.S. Employer Identification No.) 2665 South Bayshore Drive, Suite 901 Miami, FL 33133 (Address of principal executive offices, including zip code) (305) 714-4100 For the Fiscal Year Ended December 31, 2019 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transitio ...

Financial Data and Key Metrics Changes - Watsco achieved record sales, net income, and earnings per share, with cash flow reaching $336 million, representing 114% of net income [4] - The company announced an 11% increase in dividends to $7.10 per share, effective from April 2020 [4] Business Line Data and Key Metrics Changes - The company invested in technology platforms, with nearly 20,000 customers adopting these technologies, leading to higher sales growth rates among active users [5] - Operating efficiency improved in 2019, evidenced by same-store SG&A performance, which was up 1% [14][15] Market Data and Key Metrics Changes - The HVAC industry experienced flat growth in shipments for gas furnaces and residential splits in 2019, with better-than-average growth rates in Florida [27][30] - The Eastern markets, including Florida, performed well, while the middle part of the country showed weaker growth [32] Company Strategy and Development Direction - Watsco's long-term goal is to develop customer-focused technology platforms that transform business operations [7] - The company remains active in M&A, having added three new operating companies in 2019, and plans to continue pursuing growth through acquisitions [9][10] Management's Comments on Operating Environment and Future Outlook - Management noted that early trends in 2020 are not yet indicative of the full year's performance, with January and February showing similar conditions to Q4 2019 [17] - There is optimism regarding the recovery of gross margins, despite challenges with pricing from large OEMs [25] Other Important Information - The company has enriched its employee wellness program and increased 401(k) match and equity-based compensation to attract and retain talent [10][11] - Management emphasized the importance of maintaining a conservative balance sheet while pursuing M&A opportunities [40][41] Q&A Session Summary Question: Concerns about SG&A line and one-time items - Management clarified that same-store SG&A was up 1%, indicating moderate growth despite investments and M&A activities [14][15] Question: Early trends into 2020 - Management stated it is too early to determine trends, but January and early February have not shown significant changes [17] Question: Dividend increase and payout ratios - Management explained that record cash flow supports the dividend increase, with expectations for strong future cash flow [19] Question: Year-over-year decline in gross margin - Management attributed the decline to pricing issues with large OEMs and ongoing negotiations to address these challenges [21][23] Question: Industry shipments in Florida - Management noted that the industry had a flat year in 2019, but Florida showed better growth rates compared to other regions [27][30] Question: Growth in the quarter and regional performance - Management indicated that the Eastern part of the country performed well, while the middle part showed weaker growth [32] Question: Pricing dynamics and consumer behavior - Management discussed ongoing negotiations with OEMs for price increases and noted that consumer financing options are improving [46][68] Question: Same-store operating margins - Management indicated that same-store operating margins were about 10 basis points higher than the previous year [72] Question: M&A and plumbing expansion - Management expressed openness to expanding into dual product distribution if the opportunity arises [73] Question: Inventory management entering 2020 - Management confirmed a focus on ensuring the right products are available to meet customer demand while managing underperforming inventory [52][53]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION For the Transition Period From to For the Quarterly Period Ended September 30, 2019 Commission file number 1-5581 I.R.S. Employer Identification Number 59-0778222 WATSCO, INC. (a Florida Corporation) 2665 South Bayshore Drive, Suite 901 Miami, Florida 33133 Telephone: (305) 714-4100 or FORM 10-Q Washington, D.C. 20549 ☐ Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 ☒ Quarterly Report Pursuant to Sec ...

Financial Data and Key Metrics Changes - Watsco achieved record levels in sales, net income, and earnings per share for the quarter [6] - Cash flow for the nine months is also at a record level, with expectations to exceed net income for the full year [6][11] Business Line Data and Key Metrics Changes - Sales growth was primarily driven by strength in residential HVAC equipment, with consistent demand trends across Sunbelt markets [9] - The company reported a 6% growth in residential sales, while overall equipment sales grew by 4% [16][24] Market Data and Key Metrics Changes - The company noted consistent growth across its Sunbelt markets, with strength also observed in residential markets in Latin America [17] - The overall market for HVAC equipment is expected to remain stable, with a significant installed base that will require replacement over time [78] Company Strategy and Development Direction - Watsco is focused on acquiring great companies and providing them with resources to grow, including capital, technology, and equity incentives [7][10] - The company is investing heavily in technology to enhance customer service and drive long-term growth, viewing this as a journey rather than a short-term exercise [28][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term benefits of technology investments, despite short-term impacts on margins [28][56] - The company remains opportunistic in its approach, focusing on long-term growth rather than immediate margin expansion [55] Other Important Information - The financial position of Watsco remains strong, with a conservative debt-to-capitalization ratio of 9% [11] - The company has renewed its invitation for stakeholders to visit and learn more about its technology initiatives [12] Q&A Session Summary Question: Strength in residential sales and regional weaknesses - Management noted consistent growth across Sunbelt markets, with some strength in residential markets in the North and Latin America [17] Question: Gross margin pressure and expectations for Q4 - Management indicated that gross margin pressure was due to tough comparisons with last year's pricing and expected some irritation in Q4 [20] Question: Market share growth and tax spending impact - Management believes they gained market share in residential sales, with tax spending being a contributing factor [24] Question: Operating margins and technology investment - Management emphasized that technology investments are crucial for long-term growth, even if they impact short-term margins [26][28] Question: Inventory levels and industry observations - Inventory levels have increased due to price increases and regulatory changes, but management expects it to normalize [65] Question: Impact of hurricanes on activity - Management stated that hurricanes did not have a material impact on the quarter [85] Question: Gross margin impact from acquisitions - Acquisitions did not negatively impact gross margins, which were affected by last year's pricing dynamics [88]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended June 30, 2019 or ☐ Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From to Commission file number 1-5581 I.R.S. Employer Identification Number 59-0778222 WATSCO, INC. (a Florida Corporation) 2665 South Bayshore Drive, Suite ...