Watsco(WSO_B) - 2024 Q3 - Quarterly Report

Financial Performance - Revenues for Q3 2024 were $2,160.0 million, a 2$2,126.8 million in Q3 2023, with $37.5 million attributed to new acquisitions[73] - Same-store sales for Q3 2024 were$2,119.8 million, a slight decrease of $4.5 million compared to$2,124.3 million in Q3 2023[73] - Revenues for the nine months ended September 30, 2024, were $5,864.4 million, an increase of$183.8 million or 3% from $5,680.6 million in 2023[79] - Same-store sales for the nine months ended September 30, 2024, increased by$36.3 million or 1% compared to the same period in 2023[79] Profitability Metrics - Gross profit margin for Q3 2024 was 26.2%, a decrease from 26.7% in Q3 2023, while operating income margin fell to 11.6% from 12.1%[69] - Net income attributable to Watsco, Inc. for Q3 2024 was 7.9%, down from 8.0% in Q3 2023[69] - Gross profit for the quarter ended September 30, 2024, was $566.2 million, a slight decrease of$0.7 million or 0% compared to $566.9 million in the same period of 2023[75] - Gross profit for the nine months ended September 30, 2024, was$1,576.6 million, a decrease of $1.1 million or 0$1,577.7 million in 2023[81] Cost and Expenses - Cost of sales for Q3 2024 was 73.8%, slightly higher than 73.3% in Q3 2023, indicating increased costs relative to revenues[69] - Selling, general and administrative expenses increased by 2% to $326.4 million for the third quarter of 2024, compared to$319.8 million in 2023[76] - Selling, general and administrative expenses for the nine months ended September 30, 2024, increased by $44.0 million or 5$955.0 million compared to $911.0 million in 2023[82] Operational Metrics - The company operates 689 locations as of September 30, 2024, down from 691 locations a year earlier, with 7 new openings and 10 closures during the year[72] - Working capital increased to$2,199.8 million as of September 30, 2024, from $1,679.9 million at December 31, 2023, due to higher inventory and accounts receivable[92] - As of September 30, 2024, there was no outstanding balance under the revolving credit agreement, compared to$15.4 million outstanding as of December 31, 2023[98] Acquisitions and Investments - The company acquired CSI, a distributor of HVAC products, for a total consideration of $6.0 million in cash, 1,904 shares of Common stock valued at$0.8 million, and $0.6 million for repayment of indebtedness[108] - The acquisition of GWS, a plumbing and HVAC distributor, involved a net purchase price of$4.0 million in cash and 280,215 shares of Common stock valued at $101.6 million[109] Shareholder Returns - Cash dividends paid were$7.85 per share for the nine months ended September 30, 2024, compared to $7.35 per share for the same period in 2023[113] - The company has a remaining authorization to repurchase 1,129,087 shares under its share repurchase program, with a total of 6,370,913 shares repurchased at a cost of$114.4 million since inception[116] Market and Regulatory Environment - The U.S. Inflation Reduction Act of 2022 is expected to increase demand for higher-efficiency products, with $4.3 billion allocated for state-administered consumer rebate programs[64] - The company experienced minimal impact from Hurricane Helene in September 2024 and is currently assessing the effects of Hurricane Milton[65] Future Plans and Financial Instruments - The company executed an amended sales agreement for the 2024 ATM Program, allowing for the issuance of up to$400.0 million of Common stock, with the full amount available for sale as of September 30, 2024[101] - The company plans to file a replacement automatically effective shelf registration statement on Form S-3 immediately following the filing of the Quarterly Report on Form 10-Q[101]