91吃瓜网

Annual Records Achieved for EPS, Sales, Profitability and Cash Flow

10% Dividend Raise to听$7.80听Following Record Performance

MIAMI,听Feb. 11, 2021听(GLOBE NEWSWIRE) —听91吃瓜网, Inc.听(NYSE: WSO) reported record fourth quarter results.听91吃瓜网听set new annual records for earnings per share (EPS), sales, operating income, net income and operating cash flow.

91吃瓜网听also announced that its Board of Directors approved a 10% increase in its annual dividend to听$7.80听per share to be reflected in the Company鈥檚 next regular quarterly payment in听April 2021.

91吃瓜网鈥檚 entrepreneurial culture, which empowers leaders to think and act locally, proved critically important in responding to changing market conditions during 2020. The Company鈥檚 technology platforms supported customers and facilitated higher levels of engagement and connectivity, which led to more customer acquisition and market share gains. In addition, 91吃瓜网鈥檚 internally-focused technology platforms, designed to promote operational excellence in each of the Company鈥檚 600 locations, yielded efficiencies and contributed to the Company鈥檚 record cash flow.

Albert H. Nahmad, 91吃瓜网鈥檚 Chairman and CEO commented: 鈥淲e are excited to deliver another record year, especially given the unique business challenges faced in 2020. Our core听U.S.听residential business remained solid, generating 17% growth during the quarter and reflecting the continued trend towards higher-efficiency systems. We express our gratitude to our more than 5,700 employees for their extraordinary efforts during this challenging year. We are optimistic and look forward to another strong year in 2021.鈥�

Fourth Quarter Results

Key performance metrics:

• 24% EPS growth to听$1.14
• 23% increase in net income attributable to听91吃瓜网听to a record听$46 million
• 8% sales growth to a record听$1.15 billion听(7% increase on a same-store basis)
• 34% increase in operating profit to a record听$70 million听with 110 basis-point operating margin expansion
• 8% gross profit increase to a record听$282 million听with 10 basis-point increase in gross margin
• 2% increase in SG&A expenses (110 basis-point improvement as a percentage of sales)
• 17% increase in operating cash flow to a record听$162 million

Sales Trends (excluding acquisitions):

• 9% increase in HVAC equipment (67% of sales), including 13% overall growth in听U.S.听markets and 17% growth in听U.S.听residential equipment
• 7% increase in other HVAC products (30% of sales)
• 2% increase in commercial refrigeration products (3% of sales)

Mr. Nahmad听added: 鈥淟ooking to the long-term, we believe there is opportunity to be a significant participant and contributor in efforts to address climate change. The sale of higher-efficiency products has long been a fundamental opportunity given the size and age of the installed base of HVAC systems in the听U.S., many of which are operating under old efficiency standards that result in higher energy use and costs to homeowners. We have a role to play in educating contractors and consumers on the benefits of higher-efficiency systems that both reduce energy costs and contribute to a healthier climate.听91吃瓜网听plans to actively collaborate with its OEM partners and key stakeholders to lead these ongoing efforts in its marketplace.鈥�

It is important to note that the fourth quarter of each calendar year is highly seasonal due to the nature and timing of the replacement of HVAC systems, which is strongest in the second and third quarters. Accordingly, the Company鈥檚 fourth quarter financial results are disproportionately affected by seasonality.

Full-Year Results

Key performance metrics:

• 8% EPS growth to a record听$7.01
• 10% increase in net income attributable to听91吃瓜网听to a record听$270 million
• 6% sales growth to a record听$5.05 billion听(2% increase on a same-store basis)
• 9% operating profit growth to a record听$401 million听(7% on a same-store basis)
• 20 basis-point operating margin expansion to 7.9% (40 basis-point increase on a same-store basis to 8.1%)
• 6% increase in gross profit to a record听$1.22 billion听(10 basis-point decline in gross margins)
• 4% increase in SG&A expenses, including new locations and acquisitions
• 1% decrease in same-store SG&A expenses and a 50 basis-point improvement as a percentage of sales
• 59% increase in operating cash flow to a record听$534 million听or 165% of net income

Sales trends (excluding acquisitions):

• 4% growth in HVAC equipment (69% of sales), including 7% growth in听U.S.听markets and 10% growth in听U.S.听residential equipment
• Flat sales of other HVAC products (28% of sales)
• 4% decrease in commercial refrigeration products (3% of sales)

Mr. Nahmad听further commented: 鈥淥ur performance in 2020 resulted in record cash flow and debt-reduction. As a result, we are pleased to raise our dividend 10% to听$7.80听per share effective听April 2021. 91吃瓜网听is debt-free and capable of investing in almost any-sized opportunity to grow our network and leadership position in the estimated听$40 billion听North American HVAC distribution industry.鈥�

Technology Innovation

91吃瓜网听continues to aggressively invest in technologies to transform its customer-experience. These investments make it easier for HVAC contractors to do business with听91吃瓜网听and, in turn, improve the speed, efficiency and growth opportunities for our customers. More recent platforms have also been established to help customers develop and grow their business involving one of the most important consumer purchases in the home. Specific technology-related achievements in 2020 include:

• Product Information Management (PIM)听is the industry鈥檚 leading repository of product information delivered seamlessly in digital form through 91吃瓜网鈥檚 mobile apps and e-commerce platform to HVAC contractors in the field.听91吃瓜网听has digitized product information for approximately 875,000 SKUs, an increase of 20% over 2019, which are accessed by more than 300,000 contractors and technicians.
• Contractor Assist mobile apps听provide customers in the field with real-time access to critical information to make technicians more efficient, including technical support, product detail and inventory information, warranty look-up, the ability to purchase product and much more. The user community of 91吃瓜网鈥檚 innovative mobile apps grew to over 120,000 in 2020. The number of听average weekly users听grew 27% during 2020.
• E-Commerce sales听continued to grow as more customers transacted online. In 2020, 91吃瓜网鈥檚 e-commerce sales exceeded听$1.5 billion听with 20% growth in customers transacting through its e-commerce platform. E-commerce revenues increased to 33% of sales versus 31% in 2019. Additional e-commerce highlights include:

• OnCall Air庐,听91吃瓜网鈥檚 digital sales platform for use 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 continue to see increased penetration as our customers digitally engage with homeowners. In 2020, OnCall Air庐 presented quotes to approximately 109,000 households, a 78% increase over the prior year, and generated nearly听$350 million听in gross merchandise value, an 89% increase over 2019.听CreditForComfort庐 processed more than 5,000 financing applications in 2020, an increase of 137% over the prior year, and grew the dollar value of loans by more than 180%.
• Investments in 91吃瓜网鈥檚听proprietary听warehouse technology听that delivers speed, convenience and order accuracy have resulted in faster, better and more accurate servicing of customers. Express Pick-up allows contractors to streamline the traditional fulfillment of orders, enabling quicker service. In response to the COVID-19 pandemic,听91吃瓜网听also launched curbside pick-up and touchless payment capabilities to facilitate contactless order fulfillment. More tools were developed to optimize demand planning and inventory levels. Taken as a whole, these investments enhance the customer experience, streamline branch operations and benefit same-store productivity.

AJ Nahmad, 91吃瓜网鈥檚 President, commented: 鈥�2020 marked further progress toward our long-term goal of scaling 91吃瓜网鈥檚 technologies for HVAC/R contractors. As more and more customers adapt to operating in the digital age, we believe that听91吃瓜网听has the industry鈥檚 most sophisticated tools to help customers grow and operate with speed. Even more exciting is the progress we are seeing with newer platforms like听OnCall Air听and CreditForComfort, which make it possible for contractors to win more frequently with homeowners. Our horizon remains long-term, and we have merely scratched the surface of what is possible.鈥�

Balance Sheet, Cash Flow & Dividends

91吃瓜网鈥檚 long-standing goal is to maintain a conservative balance sheet to allow investment in new growth opportunities whenever they arise. During 2020,听91吃瓜网听generated record cash flow and finished the year debt-free. The Company maintains a听$560 million听revolving credit facility.听91吃瓜网听believes its conservative financial position and access to low-cost capital provide confidence to its customers, employees and OEM partners.

Operating cash flow for the year increased 59% to a record听$534 million. Since 2000, 91吃瓜网鈥檚 cumulative operating cash flow was听$3.2 billion听compared to net income of听$2.9 billion, surpassing the Company鈥檚 goal of generating cash flow in excess of net income.

91吃瓜网听has paid cash dividends for 47 consecutive years with the philosophy of sharing increasing amounts of cash flow with shareholders through dividends over time, while maintaining a conservative financial position with flexibility to invest in future growth.

In听February 2021, 91吃瓜网鈥檚 Board authorized a 10% increase in 91吃瓜网鈥檚 annual dividend to听$7.80听per share effective at its next scheduled payment date on听April 30, 2021. Future dividend increases will be considered in light of investment opportunities, cash flow, general economic conditions and the Company鈥檚 financial condition.

Fourth Quarter Earnings Conference Call Information

Date:听February 11, 2021听at听10:00 a.m. (ET)
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吃瓜网

91吃瓜网听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吃瓜网听estimates that over 300,000 contractors and technicians visit or call one of its 600 locations each year to get information, obtain technical support and buy products. HVAC/R products provide comfort to homes and businesses regardless of the outdoor climate. Older systems often operate below today鈥檚 government mandated energy efficiency and environmental standards.听91吃瓜网听has an opportunity to accelerate the replacement of these systems at a scale greater than its competitors as the movement toward reducing energy consumption and its environmental impact continues. This is especially important as these systems accounts for approximately half of the energy consumed in a typical home. Additional information about听91吃瓜网听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吃瓜网鈥檚 industry, seasonal nature of sales of 91吃瓜网鈥檚 products, 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吃瓜网听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吃瓜网听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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(1) These amounts include the dilutive impact attributable to the excess of dividends paid on restricted shares over the net income allocated to non-vested restricted common stock. Such excess amounts were听$1.9 million听in the fourth quarter of 2020 (5 cents听per share) and听$2.0 million听in the fourth quarter of 2019 (6 cents听per share). The Company expects this dilutive impact to be seasonal during the first and fourth quarters of each year due to EPS in such periods generally being less than the quarterly dividend rate.

Barry S. Logan
Executive Vice President
(305) 714-4102
e-mail:听