Watsco(WSO_B) - 2024 Q2 - Quarterly Report

Financial Performance - Revenues for the second quarter of 2024 were $2,139.3 million, an increase of 7$2,003.1 million in the second quarter of 2023[63] - Same-store sales for the second quarter of 2024 reached $2,079.1 million, reflecting a 4$2,001.1 million in the same period last year[63] - Gross profit for Q2 2024 was $579.8 million, an increase of$17.2 million or 3% compared to Q2 2023, with a gross margin decline of 100 basis points to 27.1% due to pricing and sales mix impacts[64] - Revenues for the first half of 2024 were $3,704.3 million, a 4$3,553.7 million in the first half of 2023, with same-store sales increasing by 1%[67] - Net income attributable to Watsco for Q2 2024 increased by $8.6 million or 5$319.0 million, up $14.8 million or 5$4.3 billion allocated for state-administered consumer rebate programs[57] - The company has invested in tools and technology to capture a richer sales mix over time, focusing on high-efficiency HVAC systems[55] Cash Flow and Capital Management - Cash flows provided by operating activities for the first half of 2024 were $161.4 million, a significant increase of$250.6 million compared to $(89.2) million in 2023[81] - Working capital increased to$2,089.2 million as of June 30, 2024, from $1,679.9 million at December 31, 2023, driven by higher inventory and accounts receivable[81] - The company had$224.9 million in cash and cash equivalents as of June 30, 2024, with $200.0 million in short-term cash investments[79] Shareholder Returns and Equity - Cash dividends paid were$5.15 per share for the six months ended June 30, 2024, compared to $4.90 per share for the same period in 2023[92] - The company implemented a Dividend Reinvestment Plan, allowing shareholders to reinvest dividends into Common stock[93] - Since the inception of the share repurchase program, 6,370,913 shares have been repurchased at a cost of$114.4 million, with 1,129,087 shares remaining authorized for repurchase[93] Investments and Acquisitions - The company acquired CSI for $6.0 million in cash and 1,904 shares valued at$0.8 million, with CSI having annual sales of approximately $13.0 million[90] - The acquisition of GWS was completed for a net purchase price of$4.0 million in cash and 280,215 shares valued at $101.6 million, with GWS having annual sales of approximately$180.0 million[90] - The company's investment in Carrier Enterprise I, which holds a 38.4% interest in RSI, has a valuation of approximately $457.0 million as of June 30, 2024[87] Financing Activities - The company executed a sales agreement under the 2021 ATM Program, issuing 712,000 shares for net proceeds of$281.8 million, with a total of $298.5 million sold under this program[85] - An amended sales agreement under the 2024 ATM Program allows for the issuance of up to$400.0 million of Common stock, fully available as of June 30, 2024[86] Tax and Regulatory - The effective income tax rate for the first half of 2024 was 23.5%, down from 24.1% in the same period of 2023, primarily due to higher share-based compensation deductions[75] - There have been no material changes to market risk disclosures since the last annual report[94] Interest and Other Income - Interest income, net for Q2 2024 increased by $8.3 million or 244$8.1 million, up from $7.2 million in Q2 2023, reflecting the company's share of net income from Russell Sigler, Inc.[65]