================================================================================
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
- --------------------------------------------------------------------------------
[X] Quarterly Report Pursuant To Section 13 or 15(d)
of the Securities Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
or
[ ] Transition Report Pursuant To Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Transition Period From
___ to ___
- --------------------------------------------------------------------------------
Commission file number 1-5581
I.R.S. Employer Identification Number 59-0778222
WATSCO, INC.
(a Florida Corporation)
2665 South Bayshore Drive, Suite 901
Coconut Grove, Florida 33133
Telephone: (305) 858-0828
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the last practicable date: 11,459,753 shares of the
Company's Common Stock ($.50 par value) and 2,103,235 shares of the Company's
Class B Common Stock ($.50 par value) were outstanding as of August 2, 1996.
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1 of 12
<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
WATSCO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
(IN THOUSANDS OF DOLLARS)
JUNE 30, DECEMBER 31,
1996 1995
-------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 22,189 $ 3,751
Accounts receivable, net 63,601 43,564
Inventories 87,326 59,724
Other current assets 4,866 5,340
----------- -----------
Total current assets 177,982 112,379
Property, plant and equipment, net 14,781 11,286
Intangible assets, net 22,285 16,995
Other assets 4,121 4,224
----------- -----------
$219,169 $144,884
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $ 2,580 $ 2,455
Short-term promissory notes 2,750 4,250
Borrowings under revolving credit agreements 55,961 40,185
Accounts payable 33,627 17,229
Accrued liabilities 9,314 7,091
---------- ----------
Total current liabilities 104,232 71,210
Long-term obligations:
Bank and other debt 2,994 3,143
Subordinated note - 2,500
---------- ----------
2,994 5,643
Deferred income taxes 978 978
Deferred credits 684 675
Minority interests - 10,622
Preferred stock of subsidiary 2,000 2,000
Shareholders' equity:
Common Stock, $.50 par value 5,729 3,601
Class B Common Stock, $.50 par value 1,052 1,111
Paid-in capital 67,202 19,479
Retained earnings 34,298 29,565
----------- -----------
Total shareholders' equity 108,281 53,756
----------- -----------
$219,169 $144,884
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
2 of 12
<PAGE>
<TABLE>
<CAPTION>
WATSCO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
RETAINED EARNINGS Quarter and Six Months Ended
JUNE 30, 1996 AND 1995 (IN THOUSANDS OF
DOLLARS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- -------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Net sales $110,669 $83,005 $181,344 $136,156
Royalty and service fees 7,828 8,057 14,942 15,227
----------- ---------- ----------- -----------
Total revenues 118,497 91,062 196,286 151,383
----------- ---------- ----------- -----------
Costs and expenses:
Cost of sales 86,249 64,773 140,920 104,876
Direct service expenses 6,029 6,145 11,512 11,628
Selling, general and administrative 18,474 14,275 32,840 26,372
----------- ---------- ----------- -----------
Total costs and expenses 110,752 85,193 185,272 142,876
----------- ---------- ----------- -----------
Operating income 7,745 5,869 11,014 8,507
Other income, net 283 32 352 95
Interest expense (1,089) (1,107) (2,134) (2,018)
----------- ---------- ----------- -----------
Income before income taxes and minority interests 6,939 4,794 9,232 6,584
Income taxes (2,683) (1,842) (3,554) (2,534)
Minority interests - (651) (116) (848)
----------- ---------- ----------- -----------
Net income 4,256 2,301 5,562 3,202
Retained earnings at beginning of period 30,524 23,834 29,565 23,232
Cash dividends (450) (273) (765) (540)
Dividends on preferred stock of subsidiary (32) (32) (64) (64)
----------- ---------- ----------- -----------
Retained earnings at end of period $ 34,298 $25,830 $ 34,298 $ 25,830
=========== ========== =========== ===========
Earnings per share:
Primary $.29 $.23 $.43 $.32
==== ==== ==== ====
Fully diluted $.29 $.22 $.42 $.31
==== ==== ==== ====
Weighted average shares and
equivalent shares used to calculate:
Primary earnings per share 14,420 9,805 12,769 9,717
====== ===== ====== =====
Fully diluted earnings per share 14,791 10,225 13,221 10,223
====== ====== ====== ======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3 of 12
<PAGE>
<TABLE>
<CAPTION>
WATSCO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(IN THOUSANDS OF DOLLARS)
(UNAUDITED)
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 5,562 $ 3,202
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization 1,870 1,316
Provision for losses on accounts receivable 509 495
Deferred income tax credit - (75)
Minority interests, net of dividends paid 116 30
Changes in operating assets and liabilities,
net of effects of acquisitions:
Accounts receivable (14,692) (9,824)
Inventories (19,612) (12,945)
Accounts payable and accrued liabilities 15,991 6,460
Other, net 273 (1,029)
--------- ---------
Net cash used in operating activities (9,983) (12,370)
--------- ---------
Cash flows from investing activities:
Capital expenditures, net (2,291) (1,898)
Net proceeds from marketable securities transactions 267 1,938
Business acquisitions, net of cash acquired (14,694) (8,175)
--------- ---------
Net cash used in investing activities (16,718) (8,135)
--------- ---------
Cash flows from financing activities:
Net borrowings under revolving credit agreements 15,776 23,537
Repayments of long-term obligations (4,015) (1,973)
Net proceeds from exercise of stock options 1,598 19
Net proceeds from issuance of Common Stock 32,609 -
Cash dividends (765) (540)
Other, net (64) (64)
--------- ---------
Net cash provided by financing activities 45,139 20,979
--------- ---------
Net increase in cash and cash equivalents 18,438 474
Cash and cash equivalents at beginning of period 3,751 1,744
--------- ---------
Cash and cash equivalents at end of period $ 22,189 $ 2,218
========= =========
Supplemental cash flow information:
Interest paid $2,074 $1,857
====== ======
Income taxes paid $2,874 $2,291
====== ======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4 of 12
<PAGE>
WATSCO, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
1. The condensed consolidated balance sheet as of December 31, 1995,
which has been derived from audited financial statements, and the unaudited
interim condensed consolidated financial statements, have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and note disclosures normally included in
the annual financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
those rules and regulations, although the Company believes the disclosures
made are adequate to make the information presented not misleading. In the
opinion of management, all adjustments necessary for a fair presentation
have been included in the condensed consolidated financial statements
herein.
2. The results of operations for the quarter and six month period ended June
30, 1996 are not necessarily indicative of the results for the year ending
December 31, 1996. The sale of the Company's products and services is
seasonal with revenues generally increasing during the months of May
through August.
3. At June 30, 1996 and December 31, 1995, inventories consisted of (in
thousands):
JUNE 30, DECEMBER 31,
1996 1995
---------- ------------
Raw materials $ 4,899 $ 3,637
Work in process 1,505 1,359
Finished goods 80,922 54,728
---------- ----------
$87,326 $59,724
========== ==========
4. On June 14, 1996, the Company effected a three-for-two stock split in the
form of a 50% stock dividend for both classes of the Company's common stock
for shareholders of record as of May 31, 1996. Shareholders' equity has
been restated to give retroactive recognition to the stock split for all
periods presented by reclassifying from retained earnings and
paid-in-capital to common stock the par value of the additional shares
arising from the split. All share and per share amounts have been restated
to reflect the stock split.
5. On June 24, 1996, Comfort Supply, Inc., the Company's Houston-based
distribution subsidiary, signed a letter of intent to acquire the common
stock of Serviceman Supplies, Inc., a $10 million wholesale distributor of
residential central air conditioners and related parts and supplies
headquartered in Arlington, Texas. The transaction is subject to the
execution of a definitive agreement and other conditions.
6. Certain amounts for 1995 have been reclassified to conform with the 1996
presentation.
5 of 12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table presents certain items of the Company's condensed
consolidated financial statements for the quarter and six months ended June 30,
1996 and 1995 expressed as a percentage of total revenues:
<TABLE>
<CAPTION>
QUARTER SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
----------------------- ----------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Total revenues 100.0% 100.0% 100.0% 100.0%
Cost of sales and direct service expenses (77.9) (77.9) (77.7) (77.0)
--------- --------- --------- ---------
Gross profit 22.1 22.1 22.3 23.0
Selling, general and administrative expenses (15.6) (15.7) (16.7) (17.4)
--------- --------- --------- ---------
Operating income 6.5 6.4 5.6 5.6
Other income, net 0.3 - 0.2 0.1
Interest expense (0.9) (1.2) (1.1) (1.3)
Income taxes (2.3) (2.0) (1.8) (1.7)
Minority interests - (.7) (.1) (.6)
--------- --------- --------- ---------
Net income 3.6% 2.5% 2.8% 2.1%
========= ========= ========= =========
</TABLE>
The above table and following narrative includes the results of operations of
wholesale distributors of air conditioners and/or related parts and supplies
acquired during 1996 and 1995 as follows: Airite, Inc., a Louisiana-based
distributor acquired in February 1995; H.B. Adams, Inc., a central Florida
distributor purchased in March 1995; Environmental Equipment & Supplies, Inc., a
North Little Rock, Arkansas-based distributor purchased in June 1995; Central
Air Conditioning Distributors, Inc., a Winston-Salem, North Carolina-based
distributor purchased in October 1995; and Three States Supply Company, Inc., a
Memphis, Tennessee-based distributor purchased in April 1996 (collectively, the
"acquisitions"). These acquisitions were accounted for under the purchase method
of accounting and, accordingly, the results of their operations have been
included in the consolidated results of the Company beginning on their
respective dates of acquisition.
QUARTER ENDED JUNE 30, 1996 VS. QUARTER ENDED JUNE 30, 1995
Revenues for the three months ended June 30, 1996 increased $27.4 million, or
30%, compared to the same period in 1995. In the climate control segment,
revenues increased $27.7 million, or 33%. Excluding the effect of acquisitions,
revenues for the climate control segment increased $8.1 million, or 10%. Such
increase was primarily driven by strong replacement sales activity and greater
penetration in several markets, most notably in Texas.
Gross profit for the three months ended June 30, 1996 increased $6.1 million,
or 30%, compared to the same period in 1995. Excluding the effect of
acquisitions, gross profit increased $1.1 million, or 6%, primarily as a result
of the aforementioned revenue increases. Gross profit margin in the second
quarter of 1996 was unchanged at 22.1% as compared to the same period in
1995. Excluding the effect of acquisitions, gross profit margin decreased to
21.5% in 1996 from 22.1% in 1995. This decrease was primarily due to certain
vendor price increases which the Company did not fully pass on to customers.
Selling, general and administrative expenses for the three months ended June
30, 1996 increased $4.2 million, or 29%, compared to the same period in 1995,
primarily due to selling and delivery costs related to
6 of 12
<PAGE>
increased sales volume. Excluding the effect of acquisitions, selling, general
and administrative expenses increased $1.0 million, or 7%, primarily due to
sales volume increases. Selling, general and administrative costs as a percent
of revenues decreased to 15.6% in 1996 from 15.7% in 1995 and, excluding the
effect of acquisitions, decreased to 15.5% in 1996 from 15.7% in 1995. These
margin decreases were primarily the result of a larger revenue base over which
to spread fixed costs.
Interest expense for the second quarter of 1996 decreased $18,000, or 2%,
compared to the same period in 1995 and, excluding the effect of acquisitions,
interest expense decreased $159,000, or 14%. These decreases were primarily due
to lower average interest rates on borrowings.
Minority interest expense for the second quarter of 1996 decreased $651,000
compared to the same period in 1995. This decrease was due to the Company's
acquisition of the minority interests in three of its distribution subsidiaries
in March 1996. Following the acquisition, all of the Company's subsidiaries
became wholly owned.
The effective tax rate for the three months ended June 30, 1996 was 38.7%
compared to 38.4% for the same period in 1995. The increase is primarily a
result of a proportionately larger share of taxable income generated in states
with higher tax rates during 1996 as compared to 1995.
SIX MONTHS ENDED JUNE 30, 1996 VS. SIX MONTHS ENDED JUNE 30, 1995
Revenues for the six months ended June 30, 1996 increased $44.9 million, or
30%, compared to the same period in 1995. In the climate control segment,
revenues increased $45.2 million, or 33%. Excluding the effect of acquisitions,
revenues for the climate control segment increased $16.0 million, or 12%. Such
increase was primarily due to strong replacement sales, increased homebuilding
activity, favorable weather patterns and greater market penetration.
Gross profit for the six months ended June 30, 1996 increased $9.0 million,
or 26%, compared to the same period in 1995. Excluding the effect of
acquisitions, gross profit increased $1.6 million, or 5%, primarily as a result
of the aforementioned revenue increases. Gross profit margin for the six month
period decreased to 22.3% in 1996 from 23.0% in 1995 and, excluding the effect
of acquisitions, decreased to 21.8% in 1996 from 23.0% in 1995. These margin
decreases were primarily due to certain vendor price increases which the Company
did not begin passing on to customers until late in the first quarter of 1996
and which were not fully passed on to customers in the second quarter.
Selling, general and administrative expenses for the six months ended June
30, 1996 increased $6.5 million, or 25%, compared to the same period in 1995,
primarily due to selling and delivery costs related to increased sales volume.
Excluding the effect of acquisitions, selling, general and administrative
expenses increased $1.4 million, or 5%, primarily due to sales volume increases.
Selling, general and administrative expenses as a percent of revenues decreased
to 16.7% in 1996 from 17.4% in 1995 and, excluding the effect of acquisitions,
also decreased to 16.7% in 1996 from 17.4% in 1995. These decreases were
primarily the result of a larger revenue base over which to spread fixed costs.
Interest expense for the six months ended June 30, 1996 increased $116,000,
or 6%, compared to the same period in 1995, due to borrowings used to finance
acquisitions and increased inventory levels required by sales growth. Excluding
the effect of acquisitions, interest expense decreased $279,000, or 14%,
primarily due to lower average interest rates on borrowings.
Minority interest expense for the six months ended June 30, 1996 decreased
$732,000 compared to the same period in 1995. This decrease was due to the
Company's acquisition of the minority interests in three of its distribution
subsidiaries in March 1996. Following the acquisition, all of the Company's
subsidiaries became wholly owned.
The effective tax rate for the six months ended June 30, 1996 was 38.5% which
was unchanged from the same period in 1995.
7 of 12
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company has adequate availability of capital from operations and
revolving credit facilities to fund current operations and anticipated growth,
including expansion in the Company's current and targeted market areas, through
1996. At June 30, 1996, the Company had aggregate borrowing commitments from
lenders under existing revolving credit agreements of $75 million, of which $19
million was unused and $15 million available. Certain of the subsidiaries'
revolving credit agreements contain provisions limiting the payment of dividends
to their shareholders. The Company does not anticipate that these limitations on
dividends will have a material effect on the Company's ability to meet its cash
obligations.
The Company has received a proposal from one of its lenders to syndicate a
master $125 million unsecured revolving credit facility. This facility, which is
expected to close during the third quarter, will replace the Company's existing
revolving credit facilities and provide the Company with additional
availability to fund future growth.
Working capital increased to $73.8 million at June 30, 1996 from $41.2
million at December 31, 1995. This increase is primarily due to the remaining
proceeds from a public offering in March 1996 that yielded net proceeds of $32.6
million from the sale of 2,355,000 shares of the Company's Common Stock. In
April 1996, the Company used approximately $14.0 million of the net proceeds to
fund the acquisition of Three States Supply Co., Inc., a Memphis,
Tennessee-based distributor of supplies used primarily in air conditioning and
heating systems, and $2.5 million to repay a 12% subordinated note. The Company
anticipates using such remainder of the net proceeds to fund other potential
acquisitions, to reduce debt and for general corporate purposes.
Cash and cash equivalents increased $18.4 million for the six month period
ended June 30, 1996. Principal sources of cash were net proceeds from the
issuance of Common Stock, increased borrowings under revolving credit agreements
and profitable operations. The principal uses of cash were to fund working
capital needs and acquire Three States Supply. Inventory purchases are
substantially funded by borrowings under revolving credit agreements. The
increase in inventory in 1996 was higher than 1995 primarily due to higher
levels of inventory carried by the distribution operations necessary to meet
increased demand caused by growth.
On June 24, 1996, Comfort Supply, Inc., the Company's Houston-based
distribution subsidiary, signed a letter of intent to acquire the common stock
of Serviceman Supplies, Inc., a $10 million wholesale distributor of residential
central air conditioners and related parts and supplies headquartered in
Arlington, Texas. The transaction is subject to execution of a definitive
agreement and other conditions.
The Company continually evaluates potential acquisitions and has held
discussions with a number of acquisition candidates; however, the Company has no
agreement with respect to any acquisition candidates other than Serviceman
Supplies, Inc. Should suitable acquisition opportunities or working capital
needs arise that would require additional financing, the Company believes that
its financial position and earnings history provide a solid base for obtaining
additional financing resources at competitive rates and terms.
8 of 12
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There have been no significant changes from the information reported
in the Annual Report on Form 10-K for the period ended December 31,
1995, filed on March 29, 1996.
Item 2. Changes in the Rights of the Company's Security Holders
None
Item 3. Defaults by the Company on its Senior Securities
None
Item 4. Results of Votes of Securities Holders
Share information included in the following has not been adjusted to
reflect the three-for-two stock split paid by the Company on June
14, 1996.
(a) The Company's 1996 Annual Meeting of Shareholders was held on
June 3, 1996.
(b) Proxies were solicited by the Company's management pursuant to
Regulation 14 under the Securities Exchange Act of 1934. There
was no solicitation in opposition to the management's nominees as
listed in the proxy statement. The following nominees were
elected as indicated in the proxy statement pursuant to the vote
of the shareholders: Mr. Albert H. Nahmad (chairman), Mr. D.A.
Coape-Arnold, Mr. Paul F. Manley. Other directors whose term of
office continued after the meeting are as follows: Mr. David B.
Fleeman, Mr. James S. Grien, Mr. Bob L. Moss, Mr. Roberto Motta,
Mr. Alan H. Potamkin and Mr. Gary L. Tapella.
(c) Three additional proposals were voted upon at the Annual Meeting
of Shareholders as follows:
(1) To ratify the action of the Board of Directors amending
the Company's 1991 Stock Option Plan to increase the aggregate
number of shares of Common Stock and Class B Common Stock
available for grant under the plan by 500,000 shares;
(2) To approve the Incentive Plan for the President and Chief
Executive Officer of the Company; and
(3) To ratify the reappointment of Arthur Andersen LLP as the
Company's independent certified public accountants for the
year ended December 31, 1996.
The combined vote of the Company's Common Stock and Class B
Common Stock was as follows:
PROPOSAL 1
----------
For 11,785,195
Against 2,156,637
Abstained 22,578
9 of 12
<PAGE>
Item 4. Results of Votes of Securities Holders (continued)
PROPOSAL 2
----------
For 15,801,576
Against 163,140
Abstained 12,842
PROPOSAL 3
----------
For 15,939,050
Against 33,588
Abstained 4,932
As of April 5, 1996, the record date for the Annual Meeting of
Shareholders, the total number of shares of the Company's Common
Stock, $.50 par value, and Class B Common Stock, $.50 par value,
outstanding was 7,549,231 and 1,440,878, respectively, representing
21,958,011 combined votes.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11. Computation of Earnings Per Share for the Quarter and Six
Months Ended June 30, 1996 and 1995.
27. Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K filed during the quarter.
April 17, 1996 - The following event was reported:
Item 2. The purchase of accounts receivable, inventory, fixed
assets, certain other operating assets and business and
the assumption of certain liabilities of Three States
Supply Co., Inc. for approximately $14 million.
Item 7. The following financial statements of Three States
Supply Co., Inc. were filed:
Report of Independent Certified Public Accountants.
Balance Sheet as of December 31, 1995.
Statements of Income and Retained Earnings for the
years ended December 31, 1995 and 1994.
Statements of Cash Flows for the years ended December
31, 1995 and 1994.
Notes to Financial Statements.
10 of 12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WATSCO, INC.
-----------------------------
(Registrant)
By: /S/ RONALD P. NEWMAN
-----------------------------
Ronald P. Newman
Vice President and Secretary
(Chief Financial Officer)
August 12, 1996
11 of 12
EXHIBIT 11
<TABLE>
<CAPTION>
WATSCO, INC.
COMPUTATION OF EARNINGS PER SHARE
QUARTER AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
QUARTER ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- -----------------
1996 1995(1) 1996 1995(1)
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $4,256 $2,301 $5,562 $3,202
Less subsidiary preferred stock dividend (32) (32) (64) (64)
------- ------- ------- -------
Income applicable to common stock
for primary earnings per share 4,224 2,269 5,498 3,138
Add interest expense, net of income tax effects,
attributable to convertible debentures 24 28 48 56
------- ------- ------- -------
Income applicable to common stock for
fully diluted earnings per share $4,248 $2,297 $5,546 $3,194
====== ====== ====== ======
Weighted average common shares outstanding 13,509 9,232 11,939 9,230
Additional shares assuming
exercise of stock options and warrants 911 573 830 487
------- ------- ------- -------
Shares used for primary earnings per share 14,420 9,805 12,769 9,717
Additional shares assuming:
Exercise of stock options and warrants 36 48 117 134
Conversion of 10% Convertible
Subordinated Debentures due 1996 335 372 335 372
------- ------- ------- -------
Shares used for fully diluted earnings per share 14,791 10,225 13,221 10,223
====== ====== ====== ======
Earnings per share:
Primary $.29 $.23 $.43 $.32
==== ==== ==== ====
Fully diluted $.29 $.22 $.42 $.31
==== ==== ==== ====
</TABLE>
(1) Weighted average common shares outstanding for the quarter and six months
ended June 30, 1995 have been restated to include the effect of a 3-for-2
stock split paid on June 14, 1996.
12 of 12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE WATSCO,
INC. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 22,189
<SECURITIES> 0
<RECEIVABLES> 66,450
<ALLOWANCES> 2,849
<INVENTORY> 87,326
<CURRENT-ASSETS> 177,982
<PP&E> 27,530
<DEPRECIATION> 12,749
<TOTAL-ASSETS> 219,169
<CURRENT-LIABILITIES> 104,232
<BONDS> 2,994
0
0
<COMMON> 6,781
<OTHER-SE> 101,500
<TOTAL-LIABILITY-AND-EQUITY> 219,169
<SALES> 181,344
<TOTAL-REVENUES> 196,286
<CGS> 140,920
<TOTAL-COSTS> 152,432
<OTHER-EXPENSES> 32,331
<LOSS-PROVISION> 509
<INTEREST-EXPENSE> 2,134
<INCOME-PRETAX> 9,232
<INCOME-TAX> 3,554
<INCOME-CONTINUING> 5,562
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,562
<EPS-PRIMARY> 0.43
<EPS-DILUTED> 0.42
</TABLE>
