Company Quick10K Filing
Watsco
Price167.89 EPS8
Shares35 P/E20
MCap5,841 P/FCF30
Net Debt269 EBIT352
TEV6,109 TEV/EBIT17
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-09-30 Filed 2020-11-05
10-Q 2020-06-30 Filed 2020-08-06
10-Q 2020-03-31 Filed 2020-05-07
10-K 2019-12-31 Filed 2020-02-28
10-Q 2019-09-30 Filed 2019-11-01
10-Q 2019-06-30 Filed 2019-08-08
10-Q 2019-03-31 Filed 2019-05-09
10-K 2018-12-31 Filed 2019-02-28
10-Q 2018-09-30 Filed 2018-11-08
10-Q 2018-06-30 Filed 2018-08-03
10-K 2017-12-31 Filed 2018-03-01
10-Q 2017-09-30 Filed 2017-11-07
10-Q 2017-06-30 Filed 2017-07-28
10-Q 2017-03-31 Filed 2017-05-05
10-K 2016-12-31 Filed 2017-02-21
10-Q 2016-09-30 Filed 2016-11-03
10-Q 2016-06-30 Filed 2016-08-09
10-Q 2016-03-31 Filed 2016-05-06
10-K 2015-12-31 Filed 2016-02-29
10-Q 2015-09-30 Filed 2015-11-05
10-Q 2015-06-30 Filed 2015-08-06
10-Q 2015-03-31 Filed 2015-05-07
10-K 2014-12-31 Filed 2015-02-24
10-Q 2014-09-30 Filed 2014-11-04
10-Q 2014-06-30 Filed 2014-08-01
10-Q 2014-03-31 Filed 2014-05-01
10-K 2013-12-31 Filed 2014-02-27
10-Q 2013-09-30 Filed 2013-11-01
10-Q 2013-06-30 Filed 2013-08-02
10-Q 2013-03-31 Filed 2013-04-30
10-K 2012-12-31 Filed 2013-02-28
10-Q 2012-09-30 Filed 2012-11-08
10-Q 2012-06-30 Filed 2012-08-09
10-Q 2012-03-31 Filed 2012-05-09
10-Q 2011-09-30 Filed 2011-11-08
10-Q 2011-06-30 Filed 2011-08-09
10-Q 2011-03-31 Filed 2011-05-10
10-K 2010-12-31 Filed 2011-03-01
10-Q 2010-09-30 Filed 2010-11-05
10-Q 2010-06-30 Filed 2010-08-06
10-Q 2010-03-31 Filed 2010-05-07
10-K 2009-12-31 Filed 2010-02-26
8-K 2020-10-22 Earnings, Regulation FD, Exhibits
8-K 2020-07-23 Earnings, Regulation FD, Exhibits
8-K 2020-07-23 Officers
8-K 2020-07-23 Officers
8-K 2020-06-01
8-K 2020-04-23
8-K 2020-04-10
8-K 2020-02-13
8-K 2019-10-17
8-K 2019-08-01
8-K 2019-07-18
8-K 2019-06-03
8-K 2019-04-23
8-K 2019-04-01
8-K 2019-02-14
8-K 2018-12-11
8-K 2018-12-05
8-K 2018-10-25
8-K 2018-07-25
8-K 2018-06-04
8-K 2018-04-24
8-K 2018-03-13
8-K 2018-02-05

WSO 10Q Quarterly Report

Part I. Financial Information
Item 1. Condensed Consolidated Unaudited Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 6. Exhibits
EX-31.1 d57066dex311.htm
EX-31.2 d57066dex312.htm
EX-31.3 d57066dex313.htm
EX-32.1 d57066dex321.htm

Watsco Earnings 2020-09-30

Balance SheetIncome StatementCash Flow
2.72.21.61.10.50.02012201420172020
Assets, Equity
1.41.10.80.60.30.02012201420172020
Rev, G Profit, Net Income
0.20.10.0-0.0-0.1-0.22012201420172020
Ops, Inv, Fin

10-Q
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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 September 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 901
Miami, Florida 33133
Telephone:
(305714-4100
 
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading
Symbol(s)
 
Name of each exchange
on which registered
Common stock, $0.50 par value
 
WSO
 
New York Stock Exchange
Class B common stock, $0.50 par value
 
WSOB
 
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
 
Large accelerated filer
 
  
Accelerated filer
 
       
Non-accelerated
filer
 
  
Smaller reporting company
 
       
 
 
 
  
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act).    Yes  ☐    No  
The registrant’s common stock outstanding as of November 2, 2020 comprised (i) 32,846,271 shares of Common stock, $0.50 par value per share, excluding 4,823,988 treasury shares and (ii) 5,635,926 shares of Class B common stock, $0.50 par value per share, excluding 48,263 treasury shares.
 
 
 

WATSCO, INC. AND SUBSIDIARIES
 
 
QUARTERLY REPORT ON FORM
10-Q
TABLE OF CONTENTS
 
 
  
Page No.
 
PART I. FINANCIAL INFORMATION
  
     
     
      Item 1.
 
  
     
     
 
 
  
 
3
 
     
 
 
  
 
4
 
     
 
 
  
 
5
 
     
 
 
  
 
6
 
     
 
 
  
 
8
 
     
 
 
  
 
9
 
     
      Item 2.
 
  
 
16
 
     
      Item 3.
 
  
 
24
 
     
      Item 4.
 
  
 
24
 
   
PART II. OTHER INFORMATION
  
     
     
      Item 1.
 
  
 
25
 
     
      Item 1A.
 
  
 
25
 
     
      Item 6.
 
  
 
26
 
   
  
 
27
 
   
EXHIBITS
  
     
 
2 of 27

PART I. FINANCIAL INFORMATION
 
ITEM 1.
CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
WATSCO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF INCOME
(In thousands, except per share data)
 
     Quarter Ended
September 30,
     Nine Months Ended
September 30,
 
     2020      2019      2020      2019  
Revenues
  
$
1,536,671
 
   $ 1,394,915     
$
3,900,212
 
   $ 3,698,047  
Cost of sales
  
 
1,162,908
 
     1,060,224     
 
2,959,635
 
     2,801,612  
  
 
 
    
 
 
    
 
 
    
 
 
 
Gross profit
  
 
373,763
 
     334,691     
 
940,577
 
     896,435  
Selling, general and administrative expenses
  
 
221,037
 
     212,902     
 
618,476
 
     589,523  
Other income
  
 
4,055
 
     3,530     
 
9,172
 
     7,939  
  
 
 
    
 
 
    
 
 
    
 
 
 
Operating income
  
 
156,781
 
     125,319     
 
331,273
 
     314,851  
Interest expense, net
  
 
108
 
     1,434     
 
1,181
 
     3,422  
  
 
 
    
 
 
    
 
 
    
 
 
 
Income before income taxes
  
 
156,673
 
     123,885     
 
330,092
 
     311,429  
Income taxes
  
 
30,467
 
     24,230     
 
63,397
 
     60,060  
  
 
 
    
 
 
    
 
 
    
 
 
 
Net income
  
 
126,206
 
     99,655     
 
266,695
 
     251,369  
Less: net income attributable to
non-controlling
interest
  
 
19,717
 
     16,175     
 
43,126
 
     42,697  
  
 
 
    
 
 
    
 
 
    
 
 
 
Net income attributable to Watsco, Inc.
  
$
106,489
 
   $ 83,480     
$
223,569
 
   $ 208,672  
  
 
 
    
 
 
    
 
 
    
 
 
 
Earnings per share for Common and Class B common stock:
           
Basic
  
$
2.77
 
   $ 2.20     
$
5.83
 
   $ 5.54  
  
 
 
    
 
 
    
 
 
    
 
 
 
Diluted
  
$
2.76
 
   $ 2.20     
$
5.82
 
   $ 5.54  
  
 
 
    
 
 
    
 
 
    
 
 
 
See accompanying notes to condensed consolidated unaudited financial statements.
 
3 of 27

WATSCO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
 
     Quarter Ended
September 30,
    Nine Months Ended
September 30,
 
     2020     2019     2020     2019  
Net income
  
$
126,206
 
  $ 99,655    
$
266,695
 
  $ 251,369  
Other comprehensive income (loss), net of tax
        
Foreign currency translation adjustment
  
 
5,514
 
    (3,038  
 
(6,592
)
 
    7,264  
Unrealized (loss) gain on cash flow hedging instruments
  
 
(416
)
 
    255    
 
948
 
    (798
Reclassification of gain on cash flow hedging
instruments into earnings
  
 
(509
    (140  
 
(691
    (542
  
 
 
   
 
 
   
 
 
   
 
 
 
Other comprehensive income (loss)
  
 
4,589
 
    (2,923  
 
(6,335
)
 
    5,924  
  
 
 
   
 
 
   
 
 
   
 
 
 
Comprehensive income
  
 
130,795
 
    96,732    
 
260,360
 
    257,293  
Less: comprehensive income attributable to
non-controlling
interest
  
 
21,283
 
    15,146    
 
40,986
 
    44,693  
  
 
 
   
 
 
   
 
 
   
 
 
 
Comprehensive income attributable to Watsco, Inc.
  
$
109,512
 
  $ 81,586    
$
219,374
 
  $ 212,600  
  
 
 
   
 
 
   
 
 
   
 
 
 
See accompanying notes to condensed consolidated unaudited financial statements.
 
4 of 27

WATSCO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
 
     September 30,
2020
    December 31,
2019
 
     (Unaudited)        
ASSETS
    
Current assets:
    
Cash and cash equivalents
  
$
92,600
 
  $ 74,454  
Accounts receivable, net
  
 
644,124
 
    533,810  
Inventories
  
 
884,653
 
    920,786  
Other current assets
  
 
22,742
 
    17,680  
  
 
 
   
 
 
 
Total current assets
  
 
1,644,119
 
    1,546,730  
Property and equipment, net
  
 
97,660
 
    98,523  
Operating lease
right-of-use
assets
  
 
218,884
 
    223,369  
Goodwill
  
 
409,783
 
    411,217  
Intangible assets, net
  
 
164,551
 
    172,004  
Investment in unconsolidated entity
  
 
103,355
 
    94,833  
Other assets
  
 
9,333
 
    9,485  
  
 
 
   
 
 
 
  
$
2,647,685
 
  $ 2,556,161  
  
 
 
   
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
    
Current liabilities:
    
Current portion of lease liabilities
  
$
71,174
 
  $ 69,421  
Accounts payable
  
 
352,694
 
    239,666  
Accrued expenses and other current liabilities
  
 
185,630
 
    152,630  
  
 
 
   
 
 
 
Total current liabilities
  
 
609,498
 
    461,717  
  
 
 
   
 
 
 
Long-term obligations:
    
Borrowings under revolving credit agreement
  
 
668
 
    155,700  
Operating lease liabilities, net of current portion
  
 
149,075
 
    154,271  
Finance lease liabilities, net of current portion
  
 
3,569
 
    2,009  
  
 
 
   
 
 
 
Total long-term obligations
  
 
153,312
 
    311,980  
  
 
 
   
 
 
 
Deferred income taxes and other liabilities
  
 
74,937
 
    67,697  
  
 
 
   
 
 
 
Commitments and contingencies
  
     
Watsco, Inc. shareholders’ equity:
    
Common stock, $0.50 par value
  
 
18,830
 
    18,768  
Class B common stock, $0.50 par value
  
 
2,830
 
    2,765  
Preferred stock, $0.50 par value
  
 
—  
 
    —    
Paid-in
capital
  
 
940,015
 
    907,877  
Accumulated other comprehensive loss, net of tax
  
 
(43,245
    (39,050
Retained earnings
  
 
658,622
 
    632,507  
Treasury stock, at cost
  
 
(87,440
    (87,440
  
 
 
   
 
 
 
Total Watsco, Inc. shareholders’ equity
  
 
1,489,612
 
    1,435,427  
Non-controlling
interest
  
 
320,326
 
    279,340  
  
 
 
   
 
 
 
Total shareholders’ equity
  
 
1,809,938
 
    1,714,767  
  
 
 
   
 
 
 
  
$
2,647,685
 
  $ 2,556,161  
  
 
 
   
 
 
 
See accompanying notes to condensed consolidated unaudited financial statements.
 
5 of 27

WATSCO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF SHAREHOLDERS’ EQUITY
 
(In thousands, except share and
per share data)
 
Common Stock,
Class B
Common Stock
and Preferred
Stock Shares
   
Common Stock,
Class B
Common Stock
and Preferred
Stock Amount
   
Paid-In

Capital
   
Accumulated
Other
Comprehensive
Loss
   
Retained
Earnings
   
Treasury
Stock
   
Non-controlling

Interest
   
Total
 
Balance at December 31
,
2019
  
 
38,194,056
 
 
$
21,533
 
 
$
907,877
 
 
$
(39,050
 
$
632,507
 
 
$
(87,440
 
$
279,340
 
 
$
1,714,767
 
Net income
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30,502
 
 
 
 
 
 
 
5,745
 
 
 
36,247
 
Other comprehensive (loss)
  
 
 
 
 
 
 
 
 
 
 
 
 
 
(12,739
 
 
 
 
 
 
 
 
 
 
(6,541
 
 
(19,280
Issuances of
non-vested
restricted shares of common stock
  
 
113,765
 
 
 
57
 
 
 
(57
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock contribution to 401
(k) plan
  
 
25,216
 
 
 
13
 
 
 
4,530
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,543
 
Stock issuances from exercise of stock options and employee stock purchase plan
  
 
18,674
 
 
 
9
 
 
 
2,532
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,541
 
Retirement of common stock
  
 
(4,828
 
 
(2
 
 
(789
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(791
Share-based compensation
  
 
 
 
 
 
 
 
 
 
6,097
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6,097
 
Cash dividends declared and paid on Common and Class B common stock, $1.60
per share
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(61,238
 
 
 
 
 
 
(61,238
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at March 31
,
2020
  
 
38,346,883
 
 
 
21,610
 
 
 
920,190
 
 
 
(51,789
 
 
601,771
 
 
 
(87,440
 
 
278,544
 
 
 
1,682,886
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
86,578
 
 
 
 
 
 
 
17,664
 
 
 
104,242
 
Other comprehensive income
  
 
 
 
 
 
 
 
 
 
 
 
 
 
5,521
 
 
 
 
 
 
 
 
 
 
 
2,835
 
 
 
8,356
 
Issuances of
non-vested
restricted shares of common stock
  
 
15,500
 
 
 
8
 
 
 
(8
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
Stock issuances from exercise of stock options and employee stock purchase plan
  
 
32,073
 
 
 
16
 
 
 
4,529
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,545
 
Retirement of common stock
  
 
(6,377
 
 
(4
 
 
(1,092
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1,096
Share-based compensation
  
 
 
 
 
 
 
 
 
 
5,226
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,226
 
Cash dividends declared and paid on Common and Class B common stock, $1.775
per share
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(68,077
 
 
 
 
 
 
(68,077
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at June 30
,
2020
  
 
38,388,079
 
 
 
21,630
 
 
 
928,845
 
 
 
(46,268
 
 
620,272
 
 
 
(87,440
 
 
299,043
 
 
 
1,736,082
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
106,489
 
 
 
 
 
 
 
19,717
 
 
 
126,206
 
Other comprehensive income
  
 
 
 
 
 
 
 
 
 
 
 
 
 
3,023
 
 
 
 
 
 
 
 
 
 
 
1,566
 
 
 
4,589
 
Issuances of
non-vested
restricted shares of common stock
  
 
20,000
 
 
 
10
 
 
 
(10
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
Forfeitures of
non-vested
restricted shares of common stock
  
 
(3,589
 
 
(2
 
 
2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
Stock issuances from exercise of stock options and employee stock purchase plan
  
 
55,473
 
 
 
28
 
 
 
8,438
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8,466
 
Retirement of common stock
  
 
(11,943
 
 
(6
 
 
(2,749
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2,755
Share-based compensation
  
 
 
 
 
 
 
 
 
 
5,489
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,489
 
Cash dividends declared and paid on Common and Class B common stock, $1.775
per share
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(68,139
 
 
 
 
 
 
(68,139
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at September 30
,
2020
  
 
38,448,020
 
 
$
21,660
 
 
$
940,015
 
 
$
(43,245
 
$
658,622
 
 
$
(87,440
 
$
320,326
 
 
$
1,809,938
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Continued on next page.
 
6 of 27

(In thousands, except share and
per share data)
 
Common Stock,
Class B
Common Stock
and Preferred
Stock Shares
   
Common Stock,
Class B
Common Stock
and Preferred
Stock Amount
   
Paid-In

Capital
   
Accumulated
Other
Comprehensive
Loss
   
Retained
Earnings
   
Treasury
Stock
   
Non-controlling

Interest
   
Total
 
Balance at December 31
,
2018
  
 
37,461,643
 
 
$
21,167
 
 
$
832,121
 
 
$
(45,968
 
$
627,969
 
 
$
(87,440
 
$
253,864
 
 
$
1,601,713
 
Net income
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
35,037
 
 
 
 
 
 
 
8,767
 
 
 
43,804
 
Other comprehensive income
  
 
 
 
 
 
 
 
 
 
 
 
 
 
2,783
 
 
 
 
 
 
 
 
 
 
 
1,412
 
 
 
4,195
 
Issuances of
non-vested
restricted shares of common stock