91看片网

Strong Sales Growth, Higher Margins, Operating Efficiencies and

Recent Acquisitions Drive Record Performance

Customer-Adoption of Technologies Grows as Business Evolution Continues

MIAMI,听July 22, 2021听(GLOBE NEWSWIRE) —听91看片网, Inc.听(NYSE: WSO) reported record second quarter and first-half operating results for the periods ended听June 30, 2021, establishing new records for sales, operating income, operating margin, net income and earnings per share (EPS) for both periods.

91看片网鈥檚 entrepreneurial culture, which empowers leaders to think and act locally, continues to drive record performance with nearly all operating metrics reaching record levels. The Company鈥檚 industry-leading, customer-focused technologies have helped facilitate this record performance as contractors grow and expand their capacity to meet the needs of unprecedented demand for HVAC/R products. Notably, adoption of 91看片网鈥檚 mobile apps, e-commerce platform, and other customer-facing platforms has grown meaningfully, enabling more customers to engage with us digitally. In addition, curbside/dockside technology, which allows for rapid and contactless order fulfillment, has broadened and continues to benefit our customers in terms of faster service. Taken as a whole, 91看片网鈥檚 technology offering is unique to the industry, has solidified existing customer relationships and created new customer acquisition opportunities to generate long-term growth and market share gains.

Complementing its record organic growth,听91看片网听invested in future growth and expanded its network during the second quarter with the acquisition of two market-leading businesses,听Temperature Equipment Corporation听(TEC) and听Acme Refrigeration of Baton Rouge听(Acme). The acquired businesses had annualized sales of approximately听$350 million听in 2020 and currently serve more than 14,000 customers from 50 locations. Consistent with 91看片网鈥檚 culture, these companies are being led by their legacy management teams and are expected to provide new sources of growth as more capital is deployed to support their growth plans. Despite these investments, the Company鈥檚 debt-to-total capitalization ratio remained low at 6% as of听June 30, 2021, consistent with the Company鈥檚 core philosophy to maintain a conservative, risk-averse financial position while possessing a strong balance sheet that can invest in most any opportunity at a low cost of capital.听91看片网听has acquired 65 businesses since 1989 and remains active in pursuing additional opportunities to invest in what remains a fragmented听$50 billion听North American HVAC/R distribution industry.

Second Quarter Results

Key Performance Metrics

• 64% increase in EPS to a record听$3.71
• 36% sales growth to a record听$1.85 billion听(29% growth on a same-store basis)
• 68% increase in operating income to a record听$217 million听(59% increase on a same-store basis)
• 220 basis-point operating margin expansion to a record 11.7% (same-store operating margin of 11.8%)
• 50% gross profit increase to a record听$478 million听(40% increase on a same-store basis)
• 220 basis-point gross margin increase to 25.8%
• 37% increase in SG&A expenses (28% increase on a same-store basis)

Sales trends (excluding acquisitions):

• 29% growth in HVAC equipment (71% of sales), including 28% growth in residential products and 32% growth in commercial products
• 25% increase in other HVAC products (26% of sales)
• 45% increase in commercial refrigeration products (3% of sales)

Albert H. Nahmad, 91看片网鈥檚 Chairman & CEO stated: 鈥�91看片网 delivered a blowout quarter with solid earnings growth and margin expansion from a combination of strong sales across all markets, a richer sales mix of high-efficiency systems, better selling margins, operating efficiencies and contributions from recently completed acquisitions. Our results also reflect continued investments in products, technology and people to drive sales and innovation throughout our business. Our teams remain focused on providing an exceptional customer experience as evidenced by the continued growth in customer adoption of our industry-leading technologies.鈥�

The Company believes that the products it sells, most notably new HVAC equipment to replace older residential systems that inherently operate at lower efficiencies, can play a key role in advancing CO2 reduction.听91看片网听can therefore be an important contributor to address climate change. Based on estimates and models validated by two independent sources, there was an estimated CO2 reduction of 1.8 billion pounds resulting from 91看片网鈥檚 sale of residential HVAC replacement systems over the 12 month period ended听June 30, 2021.

Mr. Nahmad听added: 鈥淲e believe that听91看片网听can play a key role in addressing climate change at a large scale given that most of the estimated 110 million HVAC systems installed in the听U.S.听operate under old efficiency standards. We are investing capital and leveraging our technology to increase awareness among contractors and consumers and will collaborate with our OEM partners to impact change over the long-term.鈥�

First-Half 2021 Results

Key Performance Metrics

• 70% increase in EPS to a record听$5.13
• 26% sales growth to a record听$2.99 billion听(22% growth on a same-store basis)
• 71% increase in operating income to a record听$299 million听(64% increase on a same-store basis)
• 260 basis-point operating margin expansion to a record 10.0% (same-store operating margin of 10.0%)
• 36% gross profit increase to a record听$773 million听(31% growth on a same-store basis)
• 190 basis-point gross margin increase to a record 25.9%
• 22% increase in SG&A expenses (17% increase on a same-store basis)
• 60 basis-point improvement in SG&A as a percentage of sales

Sales trends (excluding acquisitions):

• 23% growth in HVAC equipment (69% of sales), including 24% growth in residential products and 16% growth in commercial products
• 19% increase in other HVAC products (27% of sales)
• 28% increase in commercial refrigeration products (4% of sales)

Technology Innovation

91看片网听continues to aggressively invest in technologies to transform its customer experience. Specific technology-related trends for the second quarter of 2021 include:

• Product Information Management (PIM)听is 91看片网鈥檚 industry-leading repository of product information delivered seamlessly through 91看片网鈥檚 mobile apps and e-commerce platform.听91看片网鈥檚听PIM includes approximately 900,000 SKUs accessed by more than 350,000 contractors and technicians on an annual basis.
• Contractor Assist mobile apps听provide customers real-time field access to critical information, including technical support, product detail and inventory information, warranty look-up, the ability to purchase product through links to e-commerce and more. The authenticated user community (users that are using the mobile app while linked to an e-commerce account) grew 12% compared to last year to more than 25,000 users.
• E-Commerce sales听annual run-rate currently exceeds听$1.7 billion听and grew 28% during the second quarter over last year. The number of e-commerce transactions grew 22% to more than 400,000 during the quarter.

• OnCall Air庐,听91看片网鈥檚 digital sales platform used by HVAC/R contractors and听颁谤别诲颈迟贵辞谤颁辞尘蹿辞谤迟庐,听its companion consumer financing platform, both increased penetration as more customers digitally engaged with homeowners. During the second quarter of 2021,听OnCall Air庐 presented quotes to approximately 58,000 households, an 84% increase over last year, and generated听$208听million听in gross merchandise value, a 97% increase over 2020.听The number of customers using听CreditForComfort庐 grew 17% and processed approximately 1,800 financing applications during the quarter with 13% growth in total loan-value versus the same period in 2020.
• Proprietary听warehouse technology听investments have enabled faster, better and more reliable customer service. Express Pick-up allows contractors to streamline the traditional fulfillment of orders providing quicker service, allowing contractors to complete their work more efficiently. 91看片网听also launched curbside pick-up and touchless payment capabilities last year to facilitate contactless order fulfillment. More tools have also been developed to optimize demand planning and inventory levels. Taken as a whole, these investments are designed to enhance the customer experience, streamline branch operations and benefit same-store productivity.

Cash Flow & Dividends

91看片网鈥檚 operating cash flow for the first half of 2021 was听$82 million听versus听$261 million听for the same period in 2020, reflecting the growth in working capital driven by higher sales growth. The Company has targeted operating cash flow to exceed net income in 2021. Since 2000, operating cash flow was approximately听$3.3 billion听versus net income of听$3.2 billion, surpassing the Company鈥檚 goal.

91看片网听has paid cash dividends to shareholders for 47 consecutive years. The Company鈥檚 philosophy is to share increasing amounts of cash flow through higher dividends while maintaining a conservative financial position with continued capacity to build its distribution network. Effective听April 2021,听91看片网听increased its annual dividend rate by 10% to听$7.80听per share.

Acquisitions

On听April 9, 2021,听91看片网听completed the acquisition of听TEC. Founded in听Chicago听in 1935, TEC serves approximately 10,000 HVAC customers from 32 locations in听Illinois,听Indiana,听Kansas,听Michigan, Minnesota,听Missouri听and听Wisconsin. TEC annual sales were听$291 million听in 2020. TEC constitutes a joint venture transaction with Carrier Global Corporation (Carrier).听91看片网听owns 80% of TEC and Carrier 20%.

On听May 7, 2021,听91看片网听completed the acquisition of Acme. Founded in 1945, Acme serves approximately 4,000 HVAC customers from 18 locations in听Louisiana听and听Mississippi. Acme generated听$60 million听in sales in 2020.

These acquisitions are the latest examples of 91看片网鈥檚 strategy to invest in growth opportunities and expand its industry-leading position. Since entering HVAC/R distribution in 1989, 91看片网鈥檚 revenues have increased from听$64 million听to an annual, pro-forma run-rate approaching听$6 billion听following its unique 鈥渂uy and build鈥� philosophy.

Second Quarter Earnings Conference Call Information

Date:听July 22, 2021
Time:听10:00 a.m. (EDT)
Webcast:听
Dial-in number:听United States听(844) 883-3908 / International (412) 317-9254

A replay of the conference call will be available on the Company’s website.

Use of Non-GAAP Financial Information

In this release, the Company discloses non-GAAP measures on a 鈥渟ame-store basis鈥�, which exclude the effects of locations closed, acquired, or locations opened, in each case during the immediately preceding 12 months, unless such locations are within close geographical proximity to existing locations. The Company believes that this information provides greater comparability regarding its ongoing operating performance. These measures should not be considered an alternative to measurements required by听U.S.听GAAP.

About听91看片网

91看片网听is the largest distribution network for heating, air conditioning and refrigeration (HVAC/R) products with locations in听the United States,听Canada,听Mexico听and听Puerto Rico, and on an export basis to听Latin America听and the听Caribbean. 91看片网听estimates that over 350,000 contractors and technicians visit or call one of its 655 locations each year to get information, obtain technical support and buy products.

The Company believes there is long-term opportunity to be a significant participant and contributor in efforts to address climate change. HVAC/R products provide comfort to homes and businesses regardless of the outdoor climate. Older systems often operate below current government-mandated energy efficiency and environmental standards, resulting in higher energy use and costs to homeowners.听Sales of higher-efficiency replacement systems have long been a fundamental opportunity in听91看片网鈥檚 marketplace. 91看片网听plans to actively collaborate with its OEM partners and key stakeholders to lead these ongoing efforts in its marketplace. Additional information about听91看片网听may be found at听.

This document includes certain 鈥渇orward-looking statements鈥� within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may address, among other things, our expected financial and operational results and the related assumptions underlying our expected results. These forward-looking statements are distinguished by use of words such as 鈥渨ill,鈥� 鈥渨ould,鈥� 鈥渁nticipate,鈥� 鈥渆xpect,鈥� 鈥渂elieve,鈥� 鈥渄esigned,鈥� 鈥減lan,鈥� or 鈥渋ntend,鈥� the negative of these terms, and similar references to future periods. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive market, new housing starts and completions, capital spending in commercial construction, consumer spending and debt levels, regulatory and other factors, including, without limitation, the effects of supplier concentration, competitive conditions within 91看片网鈥檚 industry, the seasonality of product sales, the ability of the Company to expand its business, insurance coverage risks and final GAAP adjustments. Detailed information about these factors and additional important factors can be found in the documents that听91看片网听files with the听Securities and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements speak only as of the date the statements were made.听91看片网听assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except as required by applicable law.

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