Watsco, Inc. (NYSE:WSO) is the largest distributor of heating, air conditioning, and refrigeration (HVAC/R) products with 507 locations in 36 states, Puerto Rico, Latin America and the Caribbean. Founded more than 50 years ago as a manufacturer of parts and components for HVAC/R equipment, Watsco entered the distribution segment in 1989 and has become the industry leader with sales of $2.0 billion in 2009. Watsco has 4,000 employees assisting over 50,000 contractors who, in turn, service, repair or replace HVAC/R systems.
Watsco meets contractor’s needs by supplying the products required for the four major industry segments:
- Air conditioners, furnaces and related parts (50%)
- Air movement products, including ductwork and insulation (25%)
- Controls, including thermostats and air treatment systems (15%)
- Refrigeration products (10%)
What Makes Watsco Different
The most critical factor contributing to Watsco’s successful track record of profitable growth has been its commitment to service and this commitment will become increasingly important in the future. Effective service at the distribution level contributes to the contractor customer’s productivity, profitability and long-term success. Watsco’s commitment to service is built on four core concepts:
- More Products at the Point-of-sale
- More Convenience from New Locations
- Internet eCommerce for Virtual Locations Open 24×7
- More Know-How to Build Our Customers’ Success
Formation and Acquisition of Carrier Enterprise
On July 1, 2009, we completed the formation of a joint venture with Carrier Corporation (“Carrier”) to distribute Carrier, Bryant and Payne products throughout the U.S. Sunbelt, Latin America and the Caribbean. In the formation of the joint venture, Carrier contributed 95 locations in the U.S. Sunbelt and Puerto Rico and the export division located in Miami, Florida and we contributed 15 locations that currently distribute Carrier, Bryant and Payne products. We purchased a 60% controlling interest in the joint venture with options to purchase up to an additional 20% interest from Carrier (10% beginning in July 2012 and an additional 10% in July 2014). Of our existing network, the newly formed joint venture, Carrier Enterprise, LLC (“Carrier Enterprise”), represents 110 locations in 20 states and Puerto Rico and serves over 19,000 air conditioning and heating contractors.