Watsco(WSO_B) - 2024 Q2 - Quarterly Results

Financial Performance - Revenue increased 7% to a record $2.1 billion, with a 4$580 million, resulting in a gross margin of 27.1%[4] - Operating income reached $269 million, with an operating margin of 12.6$318.9 million, compared to $335.8 million for the same period in 2023, reflecting a decrease of approximately 5.2$250 million compared to last year, totaling $161 million in 2024[9] - Cash provided by operating activities for the six months ended June 30, 2024, was$161.4 million, a significant improvement compared to a cash used of $89.2 million in the same period of 2023[37] - The company had$425 million in cash and short-term investments with no borrowings under its $600 million credit facility[14] Sales and Market Growth - Sales of heat pump HVAC systems exceeded$1.2 billion, outpacing growth rates for conventional HVAC systems[12] - E-commerce sales grew 13% during the quarter, accounting for 36% of total sales[24] - The annualized gross merchandise value (GMV) of products sold through OnCallAir® was approximately $1.4 billion for the twelve-month period ended June 30, 2024[24] Acquisitions and Business Expansion - Watsco completed 69 acquisitions, generating approximately$1 billion in annual sales from the last eight acquired businesses[6] Expenses and Profitability - SG&A expenses increased by 5%, improving 30 basis points as a percentage of sales[22] Assets and Liabilities - Total current assets increased to $3.03 billion as of June 30, 2024, from$2.39 billion at the end of 2023, representing an increase of approximately 26.8%[38] - Accounts receivable, net, rose to $1.00 billion as of June 30, 2024, compared to$797.8 million at the end of 2023, indicating a growth of about 25.4%[38] - Inventories, net, increased to $1.57 billion as of June 30, 2024, from$1.35 billion at the end of 2023, reflecting a rise of approximately 16.7%[38] - Total liabilities increased to $1.35 billion as of June 30, 2024, compared to$1.11 billion at the end of 2023, marking an increase of about 21.4%[38] - Watsco's shareholders' equity grew to $2.61 billion as of June 30, 2024, from$2.23 billion at the end of 2023, representing an increase of approximately 15.5%[38] Market Focus and Sustainability - The company focuses on the replacement market, with approximately 102 million HVAC systems in the U.S. over 10 years old, most operating below current efficiency standards[33] - Watsco aims to contribute to climate change mitigation by promoting higher efficiency HVAC systems, which are critical for reducing energy consumption and carbon footprint[29] Dividends - Watsco has paid dividends for 50 consecutive years and increased its annual dividend rate by 10% to $10.80 per share effective April 2024[28]