Page 1

Watsco Generates Record Third Quarter Performance EPS Jumps 31 % to a Record $ 3.62 on Record Sales of $ 1.78 Billion October 20 , 2021 at 7:30 AM EDT Sales , Operating Profit , Operating Margin and Net Income all at Record Levels Investments in Customer - Focused Technologies Continue ; Branch Network Expanded and Employees Added to Support Growth ; Strong Balance Sheet Well - Positioned for Investment MIAMI , Oct. 20 , 2021 ( GLOBE NEWSWIRE ) Watsco , Inc. ( NYSE : WSO ) reported record third quarter and nine - month operating results for the periods ended September 30 , 2021 . Watsco's entrepreneurial culture , which empowers leaders to think and act locally , continues to drive record performance with nearly all operating metrics reaching record levels . The Company achieved new performance records for sales , gross profit , gross margin , operating income , operating margin , net income and earnings per share ( EPS ) for both periods . This performance includes stepped - up investments to grow customer adoption of Watsco's various technology platforms , which collectively revolutionize the customer experience , enhance operational efficiency and help contractors grow and better serve homeowners and businesses . The Company believes the pace of innovation and change is accelerating , and its customer focused solutions , scale and leadership position provide significant long - term value . As examples , sales growth rates of contractors that are active users far outpace growth rates among non - users , and annual attrition rates are meaningfully lower among active technology users as compared to traditional customers . Watsco has also made substantial incremental investments in its network during 2021. The Company completed three acquisitions so far this year , investing $ 114 million of capital in strong , market - leading businesses and has opened 20 new stores to drive future growth and support local customers . Looking ahead , Watsco believes it can meaningfully contribute to sustainability and greenhouse gas emissions reduction through the sale of new HVAC equipment that replaces older systems operating at lower efficiencies . Based on estimates validated by independent sources , since January 1 , 2020 through September 30 , 2021 , Watsco facilitated the reduction of an estimated 19.4 billion pounds of CO2e emissions from the sale of replacement residential air conditioners , heat pumps and furnaces . Albert H. Nahmad , Watsco's Chairman & CEO commented : " We believe that Watsco can play a role at scale in addressing climate change given that many of the estimated 110 million HVAC systems , installed in the U.S. , operate under older energy efficiency standards and historically use high - global warming potential refrigerants and natural gas . We are investing resources and leveraging our technology to increase awareness among contractors , business owners and consumers , and we will collaborate with our OEM partners to impact climate change . " Third Quarter Results Key Performance Metrics • 31 % increase in EPS to a record $ 3.62 • 16 % sales growth to a record $ 1.78 billion ( 8 % growth on a same - store basis ) • 32 % increase in operating income to a record $ 207 million ( 25 % increase on a same - store basis ) • 140 basis - point operating margin expansion to a record 11.6 % ( same - store operating margin of 11.8 % ) 29 % gross profit increase to a record $ 483 million ( 20 % increase on a same - store basis ) 280 basis - point gross margin increase to a record 27.1 % • 28 % increase in SG & A expenses ( 17 % increase on a same - store basis ) • 113 % increase in operating cash flow to a record $ 238 million Sales trends ( excluding acquisitions ) : • 7 % growth in HVAC equipment ( 69 % of sales ) • 12 % increase in other HVAC products ( 27 % of sales ) • 27 % increase in commercial refrigeration products ( 4 % of sales ) Nine - Month Period Results Key Performance Metrics • 50 % increase in EPS to a record $ 8.75 • 22 % sales growth to a record $ 4.77 billion ( 17 % growth on a same - store basis ) • 53 % increase in operating income to a record $ 505 million ( 46 % increase on a same - store basis ) • 210 basis - point operating margin expansion to a record 10.6 % ( same - store operating margin was 10.6 % ) • 33 % gross profit increase to a record $ 1.26 billion ( 27 % growth on a same - store basis ) • 220 basis - point gross margin increase to a record 26.3 % • 24 % increase in SG & A expenses ( 17 % increase on a same - store basis ) Sales trends ( excluding acquisitions ) :