David Manthey

Jeffrey Hammond

Ryan Merkel

Brett Linzey

C. Stephen Tusa

Patrick Baumann

Thomas Moll

Damian Karas

Jeffrey Sprague

Nigel Coe

Chris Snyder

Christopher Dankert

Christopher Snyder

Samuel Snyder

Stephen Volkmann

Tommy Moll

- The HVAC market is experiencing significant headwinds, with Watsco reporting unit volumes **down 12% year-to-date** as of September, and revenue remaining **flattish**.  **[105016_2139306_1]**  A major factor in this decline is a **60% reduction** in new construction activity and a general decrease in consumer spending on home improvements.  **[105016_2139306_3]** 
- Watsco successfully sold off most of its accumulated 410A inventory, which started the year at approximately **$1 billion**, with only about **$100 million left**.  **[105016_2139306_6]**  The company is actively working to reduce overall inventory levels by year-end.  **[105016_2139306_5]** 
- Despite market challenges, Watsco's earnings were up slightly in Q2 and are anticipated to show a similar trend in Q3.  **[105016_2139306_1]**  The company's dividend policy is robust, driven by strong **cash flow** rather than EPS, and Watsco currently operates with **no debt**.  **[105016_2139306_8]** **[105016_2139306_9]**

Watsco Discusses HVAC Market Headwinds and Inventory Management

- Watsco reported a **12%** year-to-date decline in unit sales through July, a trend that remained consistent into September, with revenue dollars being flattish.  **[105016_2139384_1]**  This decline is largely attributed to reduced new construction activity and decreased consumer spending on home improvements.  **[105016_2139384_3]** 
- The company has significantly reduced its **410A** inventory, from approximately **$1 billion** at the start of the year to about **$100 million** remaining, with **90%** of the inventory reduction expected to be completed by year-end.  **[105016_2139384_5]** **[105016_2139384_6]** 
- Watsco's dividend policy is primarily driven by **cash flow** rather than EPS, supported by a **50-year** history of dividend payments, a **10-11%** compounded growth rate over the last **15 years**, and a **debt-free** balance sheet.  **[105016_2139384_8]** **[105016_2139384_9]**

Watsco Discusses Market Conditions and Inventory Management at Morgan Stanley Conference

- Watsco reported a **12%** year-to-date decline in units as of Q2, a trend that persisted through September, with revenue remaining "flattish".  **[105016_2139354_1]**  This unit decline is primarily driven by a **60%** impact from new construction and multifamily housing, alongside reduced consumer spending on homes.  **[105016_2139354_3]** 
- The company has largely sold off its initial **$1 billion** 410A inventory, with approximately **$100 million** remaining, and is actively working to reduce overall inventory levels by year-end.  **[105016_2139354_0]** **[105016_2139354_5]** **[105016_2139354_6]** 
- Watsco maintains strong pricing, with new product prices up around **12%**, and protected margins.  **[105016_2139354_3]**  The company has **no debt** and a **50-year** history of dividend payments, which are primarily cash flow-driven, allowing for potential increases even in a lower earnings environment.  **[105016_2139354_8]** **[105016_2139354_9]**

Watsco Discusses Market Dynamics, Inventory, and Financial Strategy at Laguna Conference

- Watsco built significant 410A inventory last fall, which has largely sold out, and also built safety stock this year due to extended lead times and uncertainty; the company aims to reduce inventory by the end of this year.  **[105016_2139335_0]** **[105016_2139335_1]** **[105016_2139335_2]** **[105016_2139335_5]** 
- Unit volumes were down **12%** year-to-date as of the second quarter call, with **60%** of the decline attributed to new construction and multifamily housing, and the remainder consumer-driven.  **[105016_2139335_1]** **[105016_2139335_3]** 
- Revenue dollars were flattish as of July and remained consistent through September, while earnings were up slightly in the second quarter with an opportunity for the third quarter.  **[105016_2139335_1]** 
- The price trend on new products is up around **12%** (introductory price plus increases) and is holding steady with higher margins.  **[105016_2139335_3]** 
- Watsco's dividend, paid for 50 years with a **10-11%** compounded rate over the last 15 years, is driven by **cash flow** rather than EPS and is supported by the company's debt-free balance sheet.  **[105016_2139335_8]** **[105016_2139335_9]**

Watsco Discusses Market Dynamics, Inventory, and Dividend Policy

WATSCO (WSO)