Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
☒ |
Accelerated filer |
☐ | ||||
Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging growth company |
Page No. |
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Item 1. |
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3 |
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4 |
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5 |
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6 |
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8 |
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9 |
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Item 2. |
17 |
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Item 3. |
24 |
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Item 4. |
24 |
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Item 1. |
24 |
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Item 1A. |
24 |
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Item 6. |
25 |
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26 |
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EXHIBITS |
ITEM 1. |
CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS |
Quarter Ended September 30, |
Nine Months Ended September 30, |
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2019 |
2018 |
2019 |
2018 |
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Revenues |
$ |
|
$ | |
$ |
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$ | |
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Cost of sales |
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Gross profit |
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Selling, general and administrative expenses |
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Other income |
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Operating income |
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Interest expense, net |
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Income before income taxes |
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|
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Income taxes |
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|
|
|
||||||||||||
Net income |
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|
|
|
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Less: net income attributable to non-controlling interest |
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|
|
|
||||||||||||
Net income attributable to Watsco, Inc. |
$ |
|
$ | |
$ |
|
$ | |
||||||||
Earnings per share for Common and Class B common stock: |
||||||||||||||||
Basic |
$ |
|
$ | |
$ |
|
$ | |
||||||||
Diluted |
$ |
|
$ | |
$ |
|
$ | |
||||||||
Quarter Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Net income |
$ |
|
$ | |
$ |
|
$ | |
||||||||
Other comprehensive (loss) income, net of tax |
||||||||||||||||
Foreign currency translation adjustment |
( |
) | |
|
( |
) | ||||||||||
Unrealized gain (loss) on cash flow hedging instruments |
|
|
( |
) | |
|||||||||||
Reclassification of gain on cash flow hedging instruments into earnings |
( |
) |
( |
) | ( |
) |
( |
) | ||||||||
Other comprehensive (loss) income |
( |
) | |
|
( |
) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
|
|
||||||||||||
Less: comprehensive income attributable to non-controlling interest |
|
|
|
|
||||||||||||
Comprehensive income attributable to Watsco, Inc. |
$ |
|
$ | |
$ |
|
$ | |
||||||||
September 30, 2019 |
December 31, 2018 |
|||||||
(Unaudited) |
||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
|
$ | |
||||
Accounts receivable, net |
|
|
||||||
Inventories |
|
|
||||||
Other current assets |
|
|
||||||
Total current assets |
|
|
||||||
Property and equipment, net |
|
|
||||||
Operating lease right-of-use assets |
|
— |
||||||
Goodwill |
|
|
||||||
Intangible assets, net |
|
|
||||||
Other assets |
|
|
||||||
$ |
|
$ | |
|||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Current portion of other long-term obligations |
$ |
|
$ | |
||||
Accounts payable |
|
|
||||||
Accrued expenses and other current liabilities |
|
|
||||||
Total current liabilities |
|
|
||||||
Long-term obligations: |
||||||||
Borrowings under revolving credit agreement |
|
|
||||||
Operating lease liabilities, net of current portion |
|
— |
||||||
Other long-term obligations, net of current portion |
|
|
||||||
Total long-term obligations |
|
|
||||||
Deferred income taxes and other liabilities |
|
|
||||||
Commitments and contingencies |
||||||||
Watsco, Inc. shareholders’ equity: |
||||||||
Common stock, $ |
|
|
||||||
Class B common stock, $ |
|
|
||||||
Preferred stock, $ |
|
|
||||||
Paid-in capital |
|
|
||||||
Accumulated other comprehensive loss, net of tax |
( |
) |
( |
) | ||||
Retained earnings |
|
|
||||||
Treasury stock, at cost |
( |
) |
( |
) | ||||
Total Watsco, Inc. shareholders’ equity |
|
|
||||||
Non-controlling interest |
|
|
||||||
Total 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, 2018 |
$ |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||||||
Net income |
||||||||||||||||||||||||||||||||
Other comprehensive income |
||||||||||||||||||||||||||||||||
Issuances of non-vested restricted shares ofcommon stock |
( |
) | — |
|||||||||||||||||||||||||||||
Forfeitures of non-vested restricted shares ofcommon stock |
( |
) | ( |
) | — |
|||||||||||||||||||||||||||
Common stock contribution to 401(k) plan |
||||||||||||||||||||||||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan |
||||||||||||||||||||||||||||||||
Retirement of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Share-based compensation |
||||||||||||||||||||||||||||||||
Cash dividends declared and paid on Common and Class B common stock, $ |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Balance at March 31, 2019 |
$ |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||||||
Net income |
||||||||||||||||||||||||||||||||
Other comprehensive incom e |
||||||||||||||||||||||||||||||||
Issuances of non-vested restricted shares ofcommon stock |
( |
) | — |
|||||||||||||||||||||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan |
||||||||||||||||||||||||||||||||
Retirement of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Share-based compensation |
||||||||||||||||||||||||||||||||
Cash dividends declared and paid on Common and Class B common stock, $ |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Common stock issued for Dunphey & Associates Supply Co., Inc. |
||||||||||||||||||||||||||||||||
Investment in unconsolidated entity |
||||||||||||||||||||||||||||||||
Decrease in non-controlling interest in CarrierEnterprise II |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Balance at June 30, 2019 |
$ |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||||||
Net income |
||||||||||||||||||||||||||||||||
Other comprehensive (loss) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Issuances of non-vested restricted shares of common stock |
( |
) | — |
|||||||||||||||||||||||||||||
Forfeitures of non-vested restricted shares of common stock |
( |
) |
( |
) |
— |
|||||||||||||||||||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan |
||||||||||||||||||||||||||||||||
Retirement of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Share-based compensation |
||||||||||||||||||||||||||||||||
Cash dividends declared and paid on Common and Class B common stock, $ |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Common stock issued for Peirce-Phelps, Inc. |
||||||||||||||||||||||||||||||||
Investment in Peirce-Phelps, Inc. |
||||||||||||||||||||||||||||||||
Balance at September 30, 2019 |
$ |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||||||
(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, 2017 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
( |
) |
$ |
|
$ |
|
|||||||||||||||
Cumulative-effect adjustment |
|
( |
) | — |
||||||||||||||||||||||||||||
Net income |
|
|
|
|||||||||||||||||||||||||||||
Other comprehensive loss |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Issuances of non-vested restricted shares ofcommon stock |
|
|
( |
) | — |
|||||||||||||||||||||||||||
Forfeitures of non-vested restricted shares ofcommon stock |
( |
) | ( |
) | |
— |
||||||||||||||||||||||||||
Common stock contribution to 401(k) plan |
|
|
|
|
||||||||||||||||||||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan |
|
|
|
|
||||||||||||||||||||||||||||
Retirement of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Share-based compensation |
|
|
||||||||||||||||||||||||||||||
Cash dividends declared and paid on Common and Class B common stock, $ |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Distributions to non-controlling interest |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Balance at March 31, 2018 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
( |
) |
$ |
|
$ |
|
|||||||||||||||
Net income |
|
|
|
|||||||||||||||||||||||||||||
Other comprehensive loss |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Issuances of non-vested restricted shares ofcommon stock |
|
|
( |
) | — |
|||||||||||||||||||||||||||
Forfeitures of non-vested restricted shares ofcommon stock |
( |
) | ( |
) | |
— |
||||||||||||||||||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan |
|
|
|
|
||||||||||||||||||||||||||||
Retirement of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Share-based compensation |
|
|
||||||||||||||||||||||||||||||
Cash dividends declared and paid on Common and Class B common stock, $ |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Balance at June 30, 2018 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
( |
) |
$ |
|
$ |
|
|||||||||||||||
Net income |
|
|
|
|||||||||||||||||||||||||||||
Other comprehensive income |
|
|
|
|||||||||||||||||||||||||||||
Issuances of non-vested restricted shares ofcommon stock |
|
|
( |
) | — |
|||||||||||||||||||||||||||
Forfeitures of non-vested restricted shares ofcommon stock |
( |
) | ( |
) | |
— |
||||||||||||||||||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan |
|
|
|
|
||||||||||||||||||||||||||||
Retirement of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Share-based compensation |
|
|
||||||||||||||||||||||||||||||
Cash dividends declared and paid on Common and Class B common stock, $ |
( |
) | ( |
) | ||||||||||||||||||||||||||||
Common stock issued for Alert Labs , Inc. |
|
|
|
|
||||||||||||||||||||||||||||
Investment in unconsolidated entity |
|
|
||||||||||||||||||||||||||||||
Balance at September 30, 2018 |
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
$ |
( |
) |
$ |
|
$ |
|
|||||||||||||||
Nine Months Ended September 30, |
||||||||
2019 |
2018 |
|||||||
Cash flows from operating activities: |
||||||||
Net income |
$ |
$ | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
||||||||
Share-based compensation |
||||||||
Non-cash contribution to 401(k) plan |
||||||||
Deferred income tax provision |
||||||||
Other income from investment in unconsolidated |
( |
) |
( |
) | ||||
Other, net |
||||||||
Changes in operating assets and liabilities, net of effects of acquisitions: |
||||||||
Accounts receivable |
( |
) |
( |
) | ||||
Inventories |
( |
) |
( |
) | ||||
Accounts payable and other liabilities |
( |
) | ||||||
Other, net |
( |
) |
( |
) | ||||
Net cash provided by operating activities |
||||||||
Cash flows from investing activities: |
||||||||
Business acquisitions, net of cash acquired |
( |
) |
( |
) | ||||
Capital expenditures |
( |
) |
( |
) | ||||
Investment in unconsolidated entity |
( |
) |
( |
) | ||||
Proceeds from sale of property and equipment |
||||||||
Net cash used in investing activities |
( |
) |
( |
) | ||||
Cash flows from financing activities: |
||||||||
Dividends on Common and Class B common stock |
( |
) |
( |
) | ||||
Purchase of additional ownership from non-controlling interest |
( |
) |
— |
|||||
Repurchases of common stock to satisfy employee withholding tax obligations |
( |
) |
( |
) | ||||
Net repayments of other long-term obligations |
( |
) |
( |
) | ||||
Distributions to non-controlling interest |
— |
( |
) | |||||
Proceeds from non-controlling interest for investment in unconsolidated entity |
||||||||
Net proceeds from issuances of common stock |
||||||||
Proceeds from non-controlling interest for investment in Peirce-Phelps, Inc. |
— |
|||||||
Net proceeds under revolving credit agreement |
||||||||
Net cash used in financing activities |
( |
) |
( |
) | ||||
Effect of foreign exchange rate changes on cash and cash equivalents |
( |
) | ||||||
Net decrease in cash and cash equivalents |
( |
) |
( |
) | ||||
Cash and cash equivalents at beginning of period |
||||||||
Cash and cash equivalents at end of period |
$ |
$ | ||||||
Supplemental cash flow information: |
||||||||
Common stock issued for Peirce-Phelps, Inc. |
$ |
— |
||||||
Common stock issued for Dunphey & Associates Supply Co., Inc. |
$ |
— |
||||||
Common stock issued for Alert Labs, Inc. |
— |
$ |
1. |
BASIS OF PRESENTATION |
2. |
LEASES |
Quarter ended September 30, 2019 |
Nine months ended September 30, 2019 |
|||||||
Lease cost |
$ |
|
$ |
|
||||
Short-term lease cost |
|
|
||||||
Variable lease cost |
|
|
||||||
Sublease income |
( |
) |
( |
) | ||||
Total operating lease cost |
$ |
|
$ |
|
||||
September 30, |
2019 |
|||
ROU assets |
$ |
|||
Current portion of long-term obligations |
$ |
|||
Operating lease liabilities |
||||
Total operating lease liabilities |
$ |
|||
Weighted Average Remaining Lease Term (in years) |
||||
Weighted Average Discount Rate |
% |
Nine Months Ended September 30, |
2019 |
|||
Operating cash flows for the measurement of operating lease liabilities |
$ |
|||
Operating lease right-of-use assets obtained in exchange for operating lease obligations |
$ |
Remainder of 2019 |
$ | |||
2020 |
||||
2021 |
||||
2022 |
||||
2023 |
||||
Thereafter |
||||
Total lease payments |
||||
Less imputed interest |
||||
Total lease liability |
$ |
|||
3. |
REVENUES |
Quarter Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Primary Geographical Regions: |
||||||||||||||||
United States |
$ |
$ | $ |
$ | ||||||||||||
Canada |
||||||||||||||||
Latin America and the Caribbean |
||||||||||||||||
$ |
$ | $ |
$ | |||||||||||||
Major Product Lines: |
||||||||||||||||
HVAC equipment |
% |
% | % |
% | ||||||||||||
Other HVAC products |
% |
% | % |
% | ||||||||||||
Commercial refrigeration products |
% |
% | % |
% | ||||||||||||
% |
% | % |
% | |||||||||||||
4. |
EARNINGS PER SHARE |
Quarter Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Basic Earnings per Share: |
||||||||||||||||
Net income attributable to Watsco, Inc. shareholders |
$ |
$ | $ |
$ | ||||||||||||
Less: distributed and undistributed earnings allocated to non-vested restricted common stock |
||||||||||||||||
Earnings allocated to Watsco, Inc. shareholders |
$ |
$ | $ |
$ | ||||||||||||
Weighted-average common shares outstanding - Basic |
||||||||||||||||
Basic earnings per share for Common and Class B common stock |
$ |
$ | $ |
$ | ||||||||||||
Allocation of earnings for Basic: |
||||||||||||||||
Common stock |
$ |
$ | $ |
$ | ||||||||||||
Class B common stock |
||||||||||||||||
$ |
$ | $ |
$ | |||||||||||||
Diluted Earnings per Share: |
||||||||||||||||
Net income attributable to Watsco, Inc. shareholders |
$ |
$ | $ |
$ | ||||||||||||
Less: distributed and undistributed earnings allocated to non-vested restricted common stock |
||||||||||||||||
Earnings allocated to Watsco, Inc. shareholders |
$ |
$ | $ |
$ | ||||||||||||
Weighted-average common shares outstanding - Basic |
||||||||||||||||
Effect of dilutive stock options |
||||||||||||||||
Weighted-average common shares outstanding - Diluted |
||||||||||||||||
Diluted earnings per share for Common and Class B common stock |
$ |
$ | $ |
$ | ||||||||||||
Anti-dilutive stock options not included above |
5. |
OTHER COMPREHENSIVE (LOSS) INCOME |
Quarter Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Foreign currency translation adjustment |
$ |
( |
) |
$ | $ |
$ |
( |
) | ||||||||
Unrealized gain (loss) on cash flow hedging instruments |
( |
) | ||||||||||||||
Income tax (expense) benefit |
( |
) |
( |
) | ( |
) | ||||||||||
Unrealized gain (loss) on cash flow hedging instruments, net of tax |
( |
) | ||||||||||||||
Reclassification of gain on cash flow hedging instruments into earnings |
( |
) |
( |
) | ( |
) |
( |
) | ||||||||
Income tax expense |
||||||||||||||||
Reclassification of gain on cash flow hedging instruments into earnings, net of tax |
( |
) |
( |
) | ( |
) |
( |
) | ||||||||
Other comprehensive (loss) income |
$ |
( |
) |
$ | $ |
$ | ( |
) | ||||||||
Nine Months Ended September 30, |
2019 |
2018 |
||||||
Foreign currency translation adjustment: |
||||||||
Beginning balance |
$ |
( |
) |
$ | ( |
) | ||
Current period other comprehensive income (loss) |
( |
) | ||||||
Ending balance |
( |
) |
( |
) | ||||
Cash flow hedging instruments: |
||||||||
Beginning balance |
( |
) | ||||||
Current period other comprehensive (loss) income |
( |
) | ||||||
Reclassification adjustment |
( |
) |
( |
) | ||||
Ending balance |
( |
) | ||||||
Equity securities: |
||||||||
Beginning balance |
— |
( |
) | |||||
Cumulative-effect adjustment to retained earnings |
— |
|||||||
Ending balance |
— |
— |
||||||
Accumulated other comprehensive loss, net of tax |
$ |
( |
) |
$ | ( |
) | ||
6. |
PURCHASE OF OWNERSHIP INTEREST FROM JOINT VENTURE |
7. |
INVESTMENT IN UNCONSOLIDATED ENTITY |
8 . |
ACQUISITION S |
9 . |
DERIVATIVES |
Quarter Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Gain (loss) recorded in accumulated other comprehensive loss |
$ |
$ | $ |
( |
) | $ | ||||||||||
Gain reclassified from accumulated other comprehensive loss into earnings |
$ |
( |
) |
$ |
( |
) | $ |
( |
) |
$ | ( |
) |
Asset Derivatives |
Liability Derivatives |
|||||||||||||||
September 30, |
December 31, |
September 30, |
December 31, |
|||||||||||||
Derivatives designated as hedging instruments |
$ |
|
$ | |
$ |
|
$ | |
||||||||
Derivatives not designated as hedging instruments |
— |
|
|
|
||||||||||||
Total derivative instruments |
$ |
|
$ | |
$ |
|
$ | |
10 . |
FAIR VALUE MEASUREMENTS |
Total |
Fair Value Measurements at September 30, 2019 Using |
|||||||||||||||||
Balance Sheet Location |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||||
Assets: |
||||||||||||||||||
Derivative financial instruments |
Other current assets |
$ |
|
$ |
— |
$ |
|
$ |
— |
|||||||||
Equity securities |
Other assets |
$ |
|
$ |
|
$ |
— |
$ |
— |
|||||||||
Liabilities: |
||||||||||||||||||
Derivative financial instruments |
Accrued expenses and other current liabilities |
$ |
|
$ |
— |
$ |
|
$ |
— |
|||||||||
Total |
Fair Value Measurements at December 31, 2018 Using |
|||||||||||||||||
Balance Sheet Location |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||||
Assets: |
||||||||||||||||||
Derivative financial instruments |
Other current assets |
$ | |
$ | — |
$ | |
$ | — |
|||||||||
Equity securities |
Other assets |
$ | |
$ | |
$ | — |
$ | — |
|||||||||
Liabilities: |
||||||||||||||||||
Derivative financial instruments |
Accrued expenses and other current liabilities |
$ | |
$ | — |
$ | |
$ | — |
11. |
SHAREHOLDERS’ EQUITY |
1 2 . |
COMMITMENTS AND CONTINGENCIES |
1 3 . |
RELATED PARTY TRANSACTIONS |
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• |
general economic conditions, both in the United States and in the international markets we serve; |
• |
competitive factors within the HVAC/R industry; |
• |
effects of supplier concentration; |
• |
fluctuations in certain commodity costs; |
• |
consumer spending; |
• |
consumer debt levels; |
• |
new housing starts and completions; |
• |
capital spending in the commercial construction market; |
• |
access to liquidity needed for operations; |
• |
seasonal nature of product sales; |
• |
weather patterns and conditions; |
• |
insurance coverage risks; |
• |
federal, state, and local regulations impacting our industry and products; |
• |
prevailing interest rates; |
• |
foreign currency exchange rate fluctuations; |
• |
international political risk; |
• |
cybersecurity risk; and |
• |
the continued viability of our business strategy. |
Quarter Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Revenues |
100.0 |
% |
100.0 |
% | 100.0 |
% |
100.0 |
% | ||||||||
Cost of sales |
76.0 |
75.4 |
75.8 |
75.5 |
||||||||||||
Gross profit |
24.0 |
24.6 |
24.2 |
24.5 |
||||||||||||
Selling, general and administrative expenses |
15.3 |
15.5 |
15.9 |
15.9 |
||||||||||||
Other income |
0.3 |
0.3 |
0.2 |
0.2 |
||||||||||||
Operating income |
9.0 |
9.4 |
8.5 |
8.8 |
||||||||||||
Interest expense, net |
0.1 |
0.1 |
0.1 |
0.1 |
||||||||||||
Income before income taxes |
8.9 |
9.4 |
8.4 |
8.8 |
||||||||||||
Income taxes |
1.7 |
1.9 |
1.6 |
1.8 |
||||||||||||
Net income |
7.1 |
7.5 |
6.8 |
7.0 |
||||||||||||
Less: net income attributable to non-controlling interest |
1.2 |
1.4 |
1.2 |
1.2 |
||||||||||||
Net income attributable to Watsco, Inc. |
6.0 |
% |
6.1 |
% | 5.6 |
% |
5.7 |
% | ||||||||
Number of Locations |
||||
September 30, 2018 |
568 |
|||
Opened |
2 |
|||
Acquired |
3 |
|||
Closed |
(2 |
) | ||
December 31, 2018 |
571 |
|||
Opened |
14 |
|||
Acquired |
26 |
|||
Closed |
(8 |
) | ||
September 30, 2019 |
603 |
|||
• | cash needed to fund our business (primarily working capital requirements); |
• | borrowing capacity under our revolving credit facility; |
• | the ability to attract long-term capital with satisfactory terms; |
• | acquisitions, including joint ventures and investments in unconsolidated entities; |
• | dividend payments; |
• | capital expenditures; and |
• | the timing and extent of common stock repurchases. |
2019 |
2018 |
Change |
||||||||||
Cash flows provided by operating activities |
$ |
197.5 |
$ | 70.1 |
$ | 127.4 |
||||||
Cash flows used in investing activities |
$ |
(65.0 |
) |
$ | (22.3 |
) | $ | (42.7 |
) | |||
Cash flows used in financing activities |
$ |
(155.7 |
) |
$ | (59.8 |
) | $ | (95.9 |
) |
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. |
CONTROLS AND PROCEDURES |
ITEM 1. |
LEGAL PROCEEDINGS |
ITEM 1A. |
RISK FACTORS |
ITEM 6. |
EXHIBITS |
31.1 # |
||||
31.2 # |
||||
31.3 # |
||||
32.1 + |
||||
101.INS # |
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||
101.SCH # |
Inline XBRL Taxonomy Extension Schema Document. | |||
101.CAL # |
Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||
101.DEF # |
Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||
101.LAB # |
Inline XBRL Taxonomy Extension Label Linkbase Document. | |||
101.PRE # |
Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||
104 |
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, formatted in Inline XBRL. |
# | filed herewith. |
+ | furnished herewith. |
WATSCO, INC. | ||||||
(Registrant) | ||||||
Date: November 1, 2019 |
By: |
/s/ Ana M. Menendez | ||||
Ana M. Menendez | ||||||
Chief Financial Officer (on behalf of the Registrant and as Principal Financial Officer) |