Watsco(WSO)2024-11-01 20:40Revenue and Sales Performance - Revenues for Q3 2024 increased by $33.2 million (2%) compared to Q3 2023, reaching $2,160.0 million[73] - Same-store sales for Q3 2024 were $2,119.8 million, a slight decrease of $4.5 million (0%) compared to Q3 2023[73] - Revenues for the nine months ended September 30, 2024 increased by $183.8 million (3%) to $5,864.4 million, driven by new locations[79] HVAC Equipment Sales - HVAC equipment sales accounted for 71% of total sales in Q3 2024, up 1% from 70% in Q3 2023[74] - Commercial HVAC equipment sales increased by 6% in Q3 2024, with a 12% increase in international markets[74] - Residential unitary compressor-bearing systems sales decreased by 2% in Q3 2024, with a 1% decrease in average selling price and unit volume[74] - HVAC equipment sales increased by 3% in 2024, with residential products up 2% and commercial HVAC equipment up 6%[80] Profitability and Margins - Net income attributable to Watsco, Inc. for Q3 2024 was 7.9% of revenues, slightly down from 8.0% in Q3 2023[69] - Gross profit for Q3 2024 was $566.2 million, a slight decrease of $0.7 million (0%) compared to Q3 2023[75] - Gross margin declined by 50 basis-points to 26.2% in Q3 2024, primarily due to pricing and sales mix for HVAC equipment[76] - Net income attributable to Watsco, Inc. for the nine months ended September 30, 2024 decreased by $14.3 million (3%) compared to the same period in 2023[86] - Gross profit margin for the nine months ended September 30, 2024 declined by 90 basis-points to 26.9%, impacted by pricing and sales mix[81] Expenses and Costs - Selling, general and administrative expenses increased by 2% to $326.4 million in Q3 2024, driven by higher revenues[76] - Selling, general and administrative expenses for the nine months ended September 30, 2024 increased by $44.0 million (5%) to $955.0 million, primarily due to increased revenues and newly acquired locations[82] Environmental Impact and Government Programs - The company averted an estimated 21.8 million metric tons of CO2e emissions from January 1, 2020, to September 30, 2024, through the sale of higher-efficiency HVAC systems[63] - The U.S. Inflation Reduction Act of 2022 allocated $4.3 billion for state-administered consumer rebate programs, including HVAC systems[64] Operational Disruptions - Hurricane Helene and Hurricane Milton caused disruptions in Q3 2024, but the impact on operations was not significant[65] Financial Activities and Investments - Interest income, net for the nine months ended September 30, 2024 increased by $20.1 million (339%) due to higher interest earned on cash and short-term investments[84] - Cash flows provided by operating activities for the nine months ended September 30, 2024 increased by $130.9 million to $394.2 million, primarily due to the timing of vendor payments[93] - No outstanding balance under the revolving credit agreement at September 30, 2024, compared to $15.4 million outstanding at December 31, 2023[98] - Issued and sold 712,000 shares of Common stock under the 2021 ATM Program for net proceeds of $281.8 million during Q1 2024[100] - Executed the 2024 ATM Program enabling issuance of up to $400.0 million of Common stock, with $400.0 million available for sale at September 30, 2024[101] - Obligated under non-cancelable purchase orders for goods aggregating approximately $460.0 million at September 30, 2024, with $250.0 million attributable to Carrier and its affiliates[103] - Carrier Enterprise I, with an 80% controlling interest, holds a 38.4% ownership in RSI, valued at approximately $477.0 million at September 30, 2024[105] - Acquired CSI for $6.0 million in cash, $0.8 million in Common stock, and $0.6 million for repayment of indebtedness, net of cash acquired of $1.4 million[108] - Acquired GWS for $4.0 million in cash and $101.6 million in Common stock, net of cash acquired of $3.1 million[109] Dividends and Share Repurchases - Paid cash dividends of $7.85 and $7.35 per share on Common and Class B common stock during the nine months ended September 30, 2024 and 2023, respectively[113] - Issued 13,394 and 13,398 shares of common stock under the Dividend Reinvestment Plan during the quarter and nine months ended September 30, 2024, respectively[115] - 6,370,913 shares of Common and Class B common stock repurchased at a cost of $114.4 million since the inception of the share repurchase program, with 1,129,087 shares remaining authorized for repurchase at September 30, 2024[116] Company Operations and Locations - The company operated from 689 locations as of September 30, 2024, a decrease from 691 locations in September 2023[72]