Miami, Florida-based HVAC/R equipment distributor Watsco achieved record sales in 2022, the company announced Feb. 16 when reporting its 2022 fourth-quarter and full-year financial results.
Watsco’s 4Q sales increased 5% year-over-year to a record $1.58 billion, according to a news release. Its gross profit was a record $434 million, up 5% year-over-year, while gross margin increased 10 basis points to a record 27.4%. Watsco also set 4Q records in earnings per share ($3.55, up 76% year-over-year), operating income ($137 million, up 11%), and operating cash flow ($213 million). Watsco’s impressive 4Q follows a 3Q that also set various records, including $2.04 billion sales, a 14% increase over 3Q 2021.
Watsco ranked as the No. 1 HVACR Distributor and No. 6 Industrial Distributor on MDM’s 2022 Top Distributors list.
Watsco also reported the following sales trends in its 4Q earnings:
- 2% increase in HVAC equipment (67% of sales), including 4% growth in the U.S.
- 6% increase in other HVAC products (29% of sales)
- 19% increase in commercial refrigeration products (4% of sales)
For the full year 2022, Watsco posted record sales of $7.27 billion, a 16% increase over 2021. Gross profit increased 22% to a record $2.03 billion while gross margin increased 130 basis points to a record 27.9%. The company also set full-year records in earnings per share ($15.41, up 43% year-over-year), operating income ($832 million, up 32%), operating margin (11.4%, up 140 basis points), and operating cash flow ($572 million, up 64%).
Watsco reported the following sales trends for the full year:
- 13% increase in HVAC equipment (68% of sales), including 14% growth in the U.S.
- 15% increase in other HVAC products (28% of sales)
- 24% increase in commercial refrigeration products (4% of sales)
“Watsco delivered another exceptional year of performance,” Watsco Chairman and CEO Albert Nahmad said in the release. “Our leaders and associates in the field have accomplished extraordinary things and we thank them for their commitment and remarkable efforts to serve customers under challenging circumstances. Our culture is one of continuous improvement, so we continue to encourage our leaders to innovate and build on this success, particularly given the meaningful growth opportunities that we believe remain ahead of us.
“We also finished the year with a strong balance sheet consistent with our core philosophy to remain conservative and risk averse, while maintaining the capacity and flexibility to invest in organic and inorganic growth opportunities at a low cost of capital. We continue to seek acquisitions to partner with successful entrepreneurs and we are encouraged by current conditions. We also look to use our strength to expand our product portfolio and build on key OEM and supplier relationships to provide new opportunities for organic growth within our existing network of 673 locations across North America.”