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 2020-06-30 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 2020-07-23 Officers
8-K 2020-07-23 Earnings, Regulation FD, Exhibits
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 d935713dex311.htm
EX-31.2 d935713dex312.htm
EX-31.3 d935713dex313.htm
EX-32.1 d935713dex321.htm

Watsco Earnings 2020-06-30

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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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 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 August 3, 2020 comprised (i) 32,822,626 shares of Common stock, $0.50 par value per share, excluding 4,823,988 treasury shares and (ii) 5,597,873 shares of Class B common stock, $0.50 par value per share, excluding 48,263 treasury shares.
 
 

Table of Contents
WATSCO, INC. AND SUBSIDIARIES
 
 
QUARTERLY REPORT ON FORM
10-Q
TABLE OF CONTENTS
 
 
  
Page No.
 
  
     
     
Item 1.
 
  
     
     
 
 
  
 
3
 
     
 
 
  
 
4
 
     
 
 
  
 
5
 
     
 
 
  
 
6
 
     
 
 
  
 
8
 
     
 
 
  
 
9
 
     
Item 2.
 
  
 
17
 
     
Item 3.
 
  
 
24
 
     
Item 4.
 
  
 
24
 
   
  
     
     
Item 1.
 
  
 
24
 
     
Item 1A.
 
  
 
25
 
     
Item 6.
 
  
 
26
 
   
  
 
27
 
   
EXHIBITS
  
     
 
2 of 27

Table of Contents
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
June 30,
   
Six Months Ended
June 30,
 
 
2020
   
2019
   
2020
   
2019
 
Revenues
 
$
1,355,385
 
  $
1,371,854
   
$
2,363,541
 
  $
2,303,132
 
Cost of sales
 
 
1,036,186
 
   
1,043,870
   
 
1,796,727
 
   
1,741,388
 
                                 
Gross profit
 
 
319,199
 
   
327,984
   
 
566,814
 
   
561,744
 
Selling, general and administrative expenses
 
 
194,053
 
   
196,549
   
 
397,439
 
   
376,621
 
Other income
 
 
4,103
 
   
2,965
   
 
5,117
 
   
4,409
 
                                 
Operating income
 
 
129,249
 
   
134,400
   
 
174,492
 
   
189,532
 
Interest expense, net
 
 
283
 
   
1,212
   
 
1,073
 
   
1,988
 
                                 
Income before income taxes
 
 
128,966
 
   
133,188
   
 
173,419
 
   
187,544
 
Income taxes
 
 
24,724
 
   
25,278
   
 
32,930
 
   
35,830
 
                                 
Net income
 
 
104,242
 
   
107,910
   
 
140,489
 
   
151,714
 
Less: net income attributable to
non-controlling
interest
 
 
17,664
 
   
17,755
   
 
23,409
 
   
26,522
 
                                 
Net income attributable to Watsco, Inc.
 
$
86,578
 
  $
90,155
   
$
117,080
 
  $
125,192
 
                                 
Earnings per share for Common and Class B common stock:
   
     
     
     
 
Basic
 
$
2.26
 
  $
2.40
   
$
3.03
 
  $
3.34
 
                                 
Diluted
 
$
2.26
 
  $
2.40
   
$
3.02
 
  $
3.34
 
                                 
See accompanying notes to condensed consolidated unaudited financial statements.
3 of 2
7

Table of Contents
WATSCO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED UNAUDITED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
 
Quarter Ended
June 30,
   
Six Months Ended
June 30,
 
 
2020
   
2019
   
2020
   
2019
 
Net income
 
$
104,242
 
  $
107,910
   
$
140,489
 
  $
151,714
 
Other comprehensive income (loss), net of tax
   
     
     
     
 
Foreign currency translation adjustment
 
 
9,823
 
   
5,297
   
 
(12,106
)
 
   
10,302
 
Unrealized (loss) gain on cash flow hedging instruments
 
 
(1,170
)
 
   
(517
)
 
 
 
1,364
     
(1,053
)
 
Reclassification of gain on cash flow hedging
instruments into earnings
 
 
(297
)
   
(128
)  
 
(182
)
   
(402
)
                                 
Other comprehensive income (loss)
 
 
8,356
 
   
4,652
   
 
(10,924
)
 
   
8,847
 
                                 
Comprehensive income
 
 
112,598
 
   
112,562
   
 
129,565
     
160,561
 
Less: comprehensive income attributable to
non-controlling
interest
 
 
20,499
 
   
19,368
   
 
19,703
     
29,547
 
                                 
Comprehensive income attributable to Watsco, Inc.
 
$
92,099
 
  $
93,194
   
$
109,862
    $
131,014
 
                                 
See accompanying notes to condensed consolidated unaudited financial statements.
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Table of Contents
WATSCO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
 
June 30,
2020
   
December 31,
2019
 
 
(Unaudited)
   
 
ASSETS
 
 
 
 
 
 
Current assets:
   
     
 
Cash and cash equivalents
 
$
79,573
 
  $
74,454
 
Accounts receivable, net
 
 
676,569
 
   
533,810
 
Inventories
 
 
854,368
 
   
920,786
 
Other current assets
 
 
20,959
 
   
17,680
 
                 
Total current assets
 
 
1,631,469
 
   
1,546,730
 
Property and equipment, net
 
 
97,143
 
   
98,523
 
Operating lease
right-of-use
assets
 
 
226,544
 
   
223,369
 
Goodwill
 
 
408,772
 
   
411,217
 
Intangible assets, net
 
 
163,638
 
   
172,004
 
Investment in unconsolidated entity
 
 
99,950
 
   
94,833
 
Other assets
 
 
9,211
 
   
9,485
 
                 
 
$
2,636,727
 
  $
2,556,161
 
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
Current liabilities:
   
     
 
Current portion of lease liabilities
 
$
69,823
 
  $
69,421
 
Accounts payable
 
 
377,445
 
   
239,666
 
Accrued expenses and other current liabilities
 
 
191,590
 
   
152,630
 
                 
Total current liabilities
 
 
638,858
 
   
461,717
 
                 
Long-term obligations:
   
     
 
Borrowings under revolving credit agreement
 
 
33,357
 
   
155,700
 
Operating lease liabilities, net of current portion
 
 
157,214
 
   
154,271
 
Finance lease liabilities, net of current portion
 
 
2,315
 
   
2,009
 
                 
Total long-term obligations
 
 
192,886
 
   
311,980
 
                 
Deferred income taxes and other liabilities
 
 
68,901
 
   
67,697
 
                 
Commitments and contingencies
   
   
Watsco, Inc. shareholders’ equity:
   
     
 
Common stock, $0.50 par value
 
 
18,804
 
   
18,768
 
Class B common stock, $0.50 par value
 
 
2,826
 
   
2,765
 
Preferred stock, $0.50 par value
 
 
—  
 
   
—  
 
Paid-in
capital
 
 
928,845
 
   
907,877
 
Accumulated other comprehensive loss, net of tax
 
 
(46,268
)
   
(39,050
)
Retained earnings
 
 
620,272
 
   
632,507
 
Treasury stock, at cost
 
 
(87,440
)
   
(87,440
)
 
                 
Total Watsco, Inc. shareholders’ equity
 
 
1,437,039
 
   
1,435,427
 
Non-controlling
interest
 
 
299,043
 
   
279,340
 
                 
Total shareholders’ equity
 
 
1,736,082
 
   
1,714,767
 
                 
 
$
2,636,727
 
  $
2,556,161
 
                 
See accompanying notes to condensed consolidated unaudited financial statements.
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Table of Contents
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
p
urchase
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
 
                                                                 
Continued on next page.
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Table of Contents
(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
 
 
77,049
 
 
 
39
 
 
 
(39
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—  
 
Forfeitures of
non-vested
 r
estricted
shares of common stock
 
 
(5,000
)
 
 
(3
)
 
 
3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—  
 
Common stock contribution to 401(k)
plan
 
 
30,715
 
 
 
15
 
 
 
4,259
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,274
 
Stock issuances from exercise of stock
options and employee stock
 
purchase
plan
 
 
8,925
 
 
 
4
 
 
 
1,121
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,125
 
Retirement of common stock
 
 
(2,985
)
 
 
(1
)
 
 
(427
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(428
)
Share-based compensation
 
 
 
 
 
 
 
 
4,537
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,537
 
Cash dividends declared and paid on
Common and Class B common
stock, $1.60
per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(59,965
)
 
 
 
 
 
 
 
 
 
 
 
(59,965
)
                                                                 
Balance at March 31, 2019
 
 
37,570,347
 
 
 
21,221
 
 
 
841,575
 
 
 
(43,185
)
 
 
603,041
 
 
 
(87,440
)
 
 
264,043
 
 
 
1,599,255
 
                                                                 
Net income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
90,155
 
 
 
 
 
 
17,755
 
 
 
107,910
 
Other comprehensive income
 
 
 
 
 
 
 
 
 
 
 
3,039
 
 
 
 
 
 
 
 
 
1,613
 
 
 
4,652
 
Issuances of
non-vested
restricted
shares of common stock
 
 
26,354
 
 
 
13
 
 
 
(13
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
—  
 
Stock issuances from exercise of stock
options and employee stock purchase
plan
 
 
15,807
 
 
 
9
 
 
 
1,942
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,951
 
Retirement of common stock
 
 
(3,608
)
 
 
(2
)
 
 
(553
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(555
)
Share-based compensation
 
 
 
 
 
 
 
 
4,324
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,324
 
Cash dividends declared and paid on
Common and Class B common
stock, $1.60
per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(60,213
)