Watsco, Inc. (NYSE:WSO) Q4 2023 Earnings Conference Call February 13, 2024 10:00 AM ET

Company Participants

Albert Nahmad - Chairman and CEO

A.J. Nahmad - President

Barry Logan - EVP

Paul Johnston - EVP

Rick Gomez - VP

Conference Call Participants

Tommy Moll - Stephens

Ryan Merkel - William Blair

David Manthey - Baird

Brett Linzey - Mizuho

Jeffrey Sprague - Vertical Research

Joe Ahlersmeyer - Deutsche Bank

Jeff Hammond - KeyBanc Capital Markets

Steve Tusa - JPMorgan

Damian Karas - UBS

Operator

Good morning, and welcome to the Watsco Fourth Quarter 2023 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Albert Nahmad, Chairman and CEO. Please go ahead.

Albert Nahmad

Thank you, and good morning, everyone. Welcome to our fourth quarter earnings call. This is Al Nahmad, Chairman and CEO. With me is A.J. Nahmad, Watsco's President; and Paul Johnston, Barry Logan and Rick Gomez.

Now before we start, our cautionary statement, as always, this conference call has forward-looking statements as defined by the SEC laws and regulations that are made pursuant to safe harbor provisions of these various laws. Ultimate results may differ materially from forward-looking statements.

Now, Watsco delivered strong results in 2023 despite some market conditions which were somewhat inevitable after two extraordinary years in 2021 and 2022. While reflecting in the year's results, I am proud of the accomplishments we delivered. We achieved market share gain in markets we serve. We further scaled Watsco's industry-leading technology platforms. We had a successful start driving down long-term productivity gains. I should say, we had a successful start driving long-term productivity gains. We expanded our network and product offerings by acquiring great businesses through our scale, and we fortified our balance sheet through inventory reduction and generated record fourth quarter cash flow.

And once again, shareholders will receive a meaningful dividend increase in 2024, which is in April 2024. This is Watsco's 50th consecutive year of paying dividends. 2023 was also a year of immense change in virtually all equipment products transition to new [indiscernible] systems. In collaboration with our OEM partners, Watsco introduced new products and SKUs for over 25 brands of HVAC systems. Our teams executed well, and thanks to our scale and speed to market. We are confident that we gained share. We also trained thousands of customers on new products and our digital pilot library was updated with approximately 500,000 new SKUs.