Watsco 3Q15 Earnings Call Notes

Watsco (WSO) Albert H. Nahmad on Q3 2015 Results

HVAC distributor Watsco champions its tech savvy

“Here are some examples of what we’re doing in technology. We have launched mobile apps in e-commerce to enable customers to buy from us 24 hours a day every day, using the industry’s largest source of digitized product information, which is presently over 300,000 SKUs. We have instituted data-driven culture by developing business intelligence and data analytics capabilities to provide insight and support for greater decision making by our 700 profit-and-loss managers. We are implementing software and other tools to optimize our supply chain to improve service levels with less investment. In the long run, we are targeting a material reduction in infrastructure costs, which will provide the opportunity to increase operating margins as our business grows.”

89 Million installed HVAC units that we have to replace

“We still believe that our position in the marketplace is the after-market. We like the fact that there are 89 million units out there installed, ducted systems that we will eventually have to replace. And we love the consistency and the stability of that, as distinct from new construction, which goes up and down.”

The digital age is here

“This is the most-exciting part of my career here; the idea that the digital age is here and that we have the size and the scope to invest more money than anybody else that we compete with…this is a very exciting time. This will separate us more and more from everybody else. And thank God, we have the size and ability to invest increasing amounts of money. But we will change Watsco.”

We’re trying to revolutionize what we do in tech

“we’re trying to revolutionize what we do in technology and some of this is going to be opportunities as they come up. We’re very much into the software world. We go to conferences. We have people visit us. And when we see a good idea, we pursue it.”

Taken a slow approach to tech

“our approach to technology has been don’t rush into a software or a tool or some idea; be very slow about it. And that’s – probably the first couple of years of this technology effort, we weren’t really spending a lot. We were really studying it. So, yes, I think it is scaling up, because we’ve done that. We’ve taken a lot of time to see what it was that we could do. Some of the software we design it and code ourselves, some we buy. So, it’s been very slow at the beginning.”