Revenue Growth - Revenues for Q2 2022 increased by $284.1 million, or 15%, compared to Q2 2021, with HVAC equipment sales (70% of total sales) rising by 19%[86] - On a same-store basis, revenues increased by $263.8 million, or 14%, reflecting a 13% increase in HVAC equipment sales, including a 15% increase in residential HVAC equipment sales in U.S. markets[86] - Revenues for the first half of 2022 increased by $671.6 million, or 22%, with HVAC equipment sales (69% of sales) rising by 24%[94] Profitability - Net income attributable to Watsco, Inc. for the six months ended June 30, 2022, was 8.4%, up from 6.7% in the same period of 2021[82] - Gross profit margin for Q2 2022 was 27.9%, compared to 25.8% in Q2 2021, indicating improved profitability[82] - Gross profit for Q2 2022 increased by $117.6 million, or 25%, with a gross profit margin improvement of 210 basis points to 27.9% compared to Q2 2021[88] - Net income attributable to Watsco, Inc. for Q2 2022 increased by $48.5 million, or 34%, driven by higher revenues and expanded profit margins[93] - Gross profit for the first half of 2022 increased by $273.1 million, or 35%, with a gross profit margin improvement of 270 basis points to 28.6% compared to the first half of 2021[95] - Net income attributable to Watsco, Inc. for the first half of 2022 increased by $106.7 million, or 54%, compared to the same period in 2021[100] Expenses - Selling, general and administrative expenses as a percentage of revenues increased to 16.4% for the six months ended June 30, 2022, from 16.2% in the same period of 2021[82] - Selling, general and administrative expenses for Q2 2022 rose by $48.1 million, or 18%, with expenses as a percentage of revenues increasing to 14.8% from 14.4% in Q2 2021[89] Locations and Operations - The company operated 673 locations as of June 30, 2022, an increase from 655 locations a year earlier, with 16 new locations opened and 6 acquired[85] Environmental Impact - The company averted an estimated 12.9 million metric tons of CO2e emissions from January 1, 2020, to June 30, 2022, through the sale of higher-efficiency HVAC systems[75] Financial Position - Working capital increased to $1,562.6 million as of June 30, 2022, from $1,234.7 million at December 31, 2021, primarily due to higher inventory levels[105] - Cash flows provided by operating activities decreased by $8.8 million to $73.1 million for the first half of 2022 compared to $81.9 million in 2021[106] - As of June 30, 2022, the company had $129.0 million in cash and cash equivalents, with $99.3 million held by foreign subsidiaries[102] Acquisitions - On August 20, 2021, a subsidiary acquired MIS for a total consideration of $4.2 million, including $3.2 million in cash and $1.0 million in common stock[117] - On May 7, 2021, the acquisition of ACME was completed for $22.9 million, consisting of $18.1 million in cash and $2.6 million in common stock[118] - The HVAC distribution business of Temperature Equipment Corporation was acquired for $106.7 million, with the company contributing $84.2 million in cash[119] - The company is actively evaluating potential acquisitions and believes its financial position allows for obtaining additional debt financing or raising capital through equity securities[120] Shareholder Returns - Cash dividends paid per share increased from $3.725 in 2021 to $4.15 in 2022, with a quarterly dividend of $2.20 declared on July 1, 2022[121] - Since the inception of the share repurchase program, 6,370,913 shares have been repurchased at a total cost of $114.4 million, with 1,129,087 shares remaining authorized for repurchase[123]
Watsco(WSO_B) - 2022 Q2 - Quarterly Report