Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 05, 2019 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Registrant Name | WATSCO INC | |
Entity Central Index Key | 0000105016 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity File Number | 1-5581 | |
Entity Small Business | false | |
Entity Incorporation, State or Country Code | FL | |
Entity Emerging Growth Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Address, State or Province | FL | |
Entity Tax Identification Number | 59-0778222 | |
Entity Address, Address Line One | 2665 South Bayshore Drive | |
Entity Address, City or Town | Miami | |
Entity Address, Postal Zip Code | 33133 | |
City Area Code | 305 | |
Local Phone Number | 714-4100 | |
Entity Address, Address Line Two | Suite 901 | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Trading Symbol | WSO | |
Security Exchange Name | NYSE | |
Title of 12(b) Security | Common stock, $0.50 par value | |
Entity Common Stock, Shares Outstanding | 32,613,520 | |
Common Class B [Member] | ||
Document Information [Line Items] | ||
Trading Symbol | WSOB | |
Security Exchange Name | NYSE | |
Title of 12(b) Security | Class B common stock, $0.50 par value | |
Entity Common Stock, Shares Outstanding | 5,446,199 |
Condensed Consolidated Unaudite
Condensed Consolidated Unaudited Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | $ 1,371,854 | $ 1,332,743 | $ 2,303,132 | $ 2,259,320 |
Cost of sales | 1,043,870 | 1,011,977 | 1,741,388 | 1,707,721 |
Gross profit | 327,984 | 320,766 | 561,744 | 551,599 |
Selling, general and administrative expenses | 196,549 | 186,577 | 376,621 | 365,111 |
Other income | 2,965 | 3,157 | 4,409 | 4,795 |
Operating income | 134,400 | 137,346 | 189,532 | 191,283 |
Interest expense, net | 1,212 | 763 | 1,988 | 1,328 |
Income before income taxes | 133,188 | 136,583 | 187,544 | 189,955 |
Income taxes | 25,278 | 28,319 | 35,830 | 39,314 |
Net income | 107,910 | 108,264 | 151,714 | 150,641 |
Less: net income attributable to non-controlling interest | 17,755 | 18,307 | 26,522 | 26,465 |
Net income attributable to Watsco, Inc. | $ 90,155 | $ 89,957 | $ 125,192 | $ 124,176 |
Earnings per share for Common and Class B common stock: | ||||
Basic | $ 2.40 | $ 2.41 | $ 3.34 | $ 3.33 |
Diluted | $ 2.40 | $ 2.40 | $ 3.34 | $ 3.32 |
Condensed Consolidated Unaudi_2
Condensed Consolidated Unaudited Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Net income | $ 107,910 | $ 108,264 | $ 151,714 | $ 150,641 |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation adjustment | 5,297 | (5,046) | 10,302 | (11,691) |
Unrealized (loss) gain on cash flow hedging instruments | (517) | 380 | (1,053) | 531 |
Reclassification of (gain) loss on cash flow hedging instruments into earnings | (128) | 105 | (402) | 858 |
Other comprehensive income (loss) | 4,652 | (4,561) | 8,847 | (10,302) |
Comprehensive income | 112,562 | 103,703 | 160,561 | 140,339 |
Less: comprehensive income attributable to non-controlling interest | 19,368 | 16,636 | 29,547 | 22,702 |
Comprehensive income attributable to Watsco, Inc. | $ 93,194 | $ 87,067 | $ 131,014 | $ 117,637 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 55,915 | $ 82,894 |
Accounts receivable, net | 655,418 | 501,908 |
Inventories | 967,394 | 837,129 |
Other current assets | 16,367 | 19,875 |
Total current assets | 1,695,094 | 1,441,806 |
Property and equipment, net | 95,586 | 91,046 |
Operating lease right-of-use assets | 190,530 | |
Goodwill | 398,575 | 391,998 |
Intangible assets, net | 155,120 | 147,851 |
Other assets | 97,529 | 88,332 |
Total assets | 2,632,434 | 2,161,033 |
Current liabilities: | ||
Current portion of long-term obligations | 60,784 | 246 |
Accounts payable | 356,062 | 200,229 |
Accrued expenses and other current liabilities | 163,672 | 157,091 |
Total current liabilities | 580,518 | 357,566 |
Long-term obligations: | ||
Borrowings under revolving credit agreement | 219,600 | 135,200 |
Operating lease liabilities, net of current portion | 129,636 | |
Other long-term obligations, net of current portion | 1,712 | 552 |
Total long-term obligations | 350,948 | 135,752 |
Deferred income taxes and other liabilities | 67,606 | 66,002 |
Watsco, Inc. shareholders' equity: | ||
Preferred stock, $0.50 par value | ||
Paid-in capital | 828,932 | 832,121 |
Accumulated other comprehensive loss, net of tax | (40,146) | (45,968) |
Retained earnings | 632,983 | 627,969 |
Treasury stock, at cost | (87,440) | (87,440) |
Total Watsco, Inc. shareholders' equity | 1,355,595 | 1,347,849 |
Non-controlling interest | 277,767 | 253,864 |
Total shareholders' equity | 1,633,362 | 1,601,713 |
Total liabilities and shareholders' equity | 2,632,434 | 2,161,033 |
Common Stock | ||
Watsco, Inc. shareholders' equity: | ||
Common stock, $0.50 par value | 18,531 | 18,476 |
Class B Common Stock | ||
Watsco, Inc. shareholders' equity: | ||
Common stock, $0.50 par value | $ 2,735 | $ 2,691 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Preferred stock, par value | $ 0.50 | $ 0.50 |
Common Stock | ||
Common stock, par value | 0.50 | 0.50 |
Class B Common Stock | ||
Common stock, par value | $ 0.50 | $ 0.50 |
Condensed Consolidated Unaudi_3
Condensed Consolidated Unaudited Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock, Class B Common Stock and Preferred Stock | Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Non-controlling Interest |
Beginning balance at Dec. 31, 2017 | $ 1,550,977 | $ 21,050 | $ 804,008 | $ (34,221) | $ 594,556 | $ (87,440) | $ 253,024 |
Beginning balance (in shares) at Dec. 31, 2017 | 37,228,715 | ||||||
Cumulative-effect adjustment at Dec. 31, 2017 | 301 | (301) | |||||
Net income | 42,377 | 34,219 | 8,158 | ||||
Other comprehensive income (loss) | (5,741) | (3,649) | (2,092) | ||||
Issuances of non-vested restricted shares of common stock | $ 46 | (46) | |||||
Issuances of non-vested restricted shares of common stock (in shares) | 91,609 | ||||||
Forfeitures of non-vested restricted shares of common stock | $ (2) | 2 | |||||
Forfeitures of non-vested restricted shares of common stock (in shares) | (3,000) | ||||||
Common stock contribution to 401(k) plan | 2,945 | $ 9 | 2,936 | ||||
Common stock contribution to 401(k) plan (in shares) | 17,318 | ||||||
Stock issuances from exercise of stock options and employee stock purchase plan | 4,341 | $ 19 | 4,322 | ||||
Stock issuances from exercise of stock options and employee stock purchase plan (in shares) | 37,130 | ||||||
Retirement of common stock | (914) | $ (3) | (911) | ||||
Retirement of common stock (in shares) | (5,041) | ||||||
Share-based compensation | 4,400 | 4,400 | |||||
Cash dividends declared and paid on Common and Class B common stock | (46,581) | (46,581) | |||||
Distributions to non-controlling interest | (2,178) | (2,178) | |||||
Ending balance at Mar. 31, 2018 | 1,549,626 | $ 21,119 | 814,711 | (37,569) | 581,893 | (87,440) | 256,912 |
Ending balance (in shares) at Mar. 31, 2018 | 37,366,731 | ||||||
Beginning balance at Dec. 31, 2017 | 1,550,977 | $ 21,050 | 804,008 | (34,221) | 594,556 | (87,440) | 253,024 |
Beginning balance (in shares) at Dec. 31, 2017 | 37,228,715 | ||||||
Cumulative-effect adjustment at Dec. 31, 2017 | 301 | (301) | |||||
Net income | 150,641 | ||||||
Other comprehensive income (loss) | (10,302) | ||||||
Ending balance at Jun. 30, 2018 | 1,601,994 | $ 21,120 | 817,559 | (40,459) | 617,666 | (87,440) | 273,548 |
Ending balance (in shares) at Jun. 30, 2018 | 37,367,632 | ||||||
Beginning balance at Mar. 31, 2018 | 1,549,626 | $ 21,119 | 814,711 | (37,569) | 581,893 | (87,440) | 256,912 |
Beginning balance (in shares) at Mar. 31, 2018 | 37,366,731 | ||||||
Net income | 108,264 | 89,957 | 18,307 | ||||
Other comprehensive income (loss) | (4,561) | (2,890) | (1,671) | ||||
Issuances of non-vested restricted shares of common stock | $ 4 | (4) | |||||
Issuances of non-vested restricted shares of common stock (in shares) | 8,500 | ||||||
Forfeitures of non-vested restricted shares of common stock | $ (2) | 2 | |||||
Forfeitures of non-vested restricted shares of common stock (in shares) | (5,000) | ||||||
Stock issuances from exercise of stock options and employee stock purchase plan | 1,601 | $ 6 | 1,595 | ||||
Stock issuances from exercise of stock options and employee stock purchase plan (in shares) | 11,935 | ||||||
Retirement of common stock | (2,499) | $ (7) | (2,492) | ||||
Retirement of common stock (in shares) | (14,534) | ||||||
Share-based compensation | 3,747 | 3,747 | |||||
Cash dividends declared and paid on Common and Class B common stock | (54,184) | (54,184) | |||||
Ending balance at Jun. 30, 2018 | 1,601,994 | $ 21,120 | 817,559 | (40,459) | 617,666 | (87,440) | 273,548 |
Ending balance (in shares) at Jun. 30, 2018 | 37,367,632 | ||||||
Beginning balance at Dec. 31, 2018 | 1,601,713 | $ 21,167 | 832,121 | (45,968) | 627,969 | (87,440) | 253,864 |
Beginning balance (in shares) at Dec. 31, 2018 | 37,461,643 | ||||||
Net income | 43,804 | 35,037 | 8,767 | ||||
Other comprehensive income (loss) | 4,195 | 2,783 | 1,412 | ||||
Issuances of non-vested restricted shares of common stock | $ 39 | (39) | |||||
Issuances of non-vested restricted shares of common stock (in shares) | 77,049 | ||||||
Forfeitures of non-vested restricted shares of common stock | $ (3) | 3 | |||||
Forfeitures of non-vested restricted shares of common stock (in shares) | (5,000) | ||||||
Common stock contribution to 401(k) plan | 4,274 | $ 15 | 4,259 | ||||
Common stock contribution to 401(k) plan (in shares) | 30,715 | ||||||
Stock issuances from exercise of stock options and employee stock purchase plan | 1,125 | $ 4 | 1,121 | ||||
Stock issuances from exercise of stock options and employee stock purchase plan (in shares) | 8,925 | ||||||
Retirement of common stock | (428) | $ (1) | (427) | ||||
Retirement of common stock (in shares) | (2,985) | ||||||
Share-based compensation | 4,537 | 4,537 | |||||
Cash dividends declared and paid on Common and Class B common stock | (59,965) | (59,965) | |||||
Ending balance at Mar. 31, 2019 | 1,599,255 | $ 21,221 | 841,575 | (43,185) | 603,041 | (87,440) | 264,043 |
Ending balance (in shares) at Mar. 31, 2019 | 37,570,347 | ||||||
Beginning balance at Dec. 31, 2018 | 1,601,713 | $ 21,167 | 832,121 | (45,968) | 627,969 | (87,440) | 253,864 |
Beginning balance (in shares) at Dec. 31, 2018 | 37,461,643 | ||||||
Net income | 151,714 | ||||||
Other comprehensive income (loss) | 8,847 | ||||||
Ending balance at Jun. 30, 2019 | 1,633,362 | $ 21,266 | 828,932 | (40,146) | 632,983 | (87,440) | 277,767 |
Ending balance (in shares) at Jun. 30, 2019 | 37,659,852 | ||||||
Beginning balance at Mar. 31, 2019 | 1,599,255 | $ 21,221 | 841,575 | (43,185) | 603,041 | (87,440) | 264,043 |
Beginning balance (in shares) at Mar. 31, 2019 | 37,570,347 | ||||||
Net income | 107,910 | 90,155 | 17,755 | ||||
Other comprehensive income (loss) | 4,652 | 3,039 | 1,613 | ||||
Issuances of non-vested restricted shares of common stock | $ 13 | (13) | |||||
Issuances of non-vested restricted shares of common stock (in shares) | 26,354 | ||||||
Stock issuances from exercise of stock options and employee stock purchase plan | 1,951 | $ 9 | 1,942 | ||||
Stock issuances from exercise of stock options and employee stock purchase plan (in shares) | 15,807 | ||||||
Retirement of common stock | (555) | $ (2) | (553) | ||||
Retirement of common stock (in shares) | (3,608) | ||||||
Share-based compensation | 4,324 | 4,324 | |||||
Cash dividends declared and paid on Common and Class B common stock | (60,213) | (60,213) | |||||
Common stock issued for Dunphey & Associates Supply Co., Inc. | 7,450 | $ 25 | 7,425 | ||||
Common stock issued for Dunphey & Associates Supply Co., Inc. (in shares) | 50,952 | ||||||
Investment in unconsolidated entity | 988 | 988 | |||||
Decrease in non-controlling interest in Carrier Enterprise II | (32,400) | (25,768) | (6,632) | ||||
Ending balance at Jun. 30, 2019 | $ 1,633,362 | $ 21,266 | $ 828,932 | $ (40,146) | $ 632,983 | $ (87,440) | $ 277,767 |
Ending balance (in shares) at Jun. 30, 2019 | 37,659,852 |
Condensed Consolidated Unaudi_4
Condensed Consolidated Unaudited Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | |
Cash dividends declared and paid, common stock | $ 1.60 | $ 1.60 | $ 1.45 | $ 1.25 |
Condensed Consolidated Unaudi_5
Condensed Consolidated Unaudited Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 151,714 | $ 150,641 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 11,656 | 11,027 |
Share-based compensation | 8,174 | 7,336 |
Deferred income tax provision | 1,156 | 1,569 |
Other income from investment in unconsolidated entity | (4,409) | (4,795) |
Other, net | 5,644 | 3,260 |
Changes in operating assets and liabilities, net of effects of acquisition: | ||
Accounts receivable | (146,441) | (183,105) |
Inventories | (117,591) | (113,831) |
Accounts payable and other liabilities | 161,685 | 107,908 |
Other, net | (3,141) | 734 |
Net cash provided by (used in) operating activities | 68,447 | (19,256) |
Cash flows from investing activities: | ||
Business acquisition, net of cash acquired | (16,761) | |
Capital expenditures | (9,197) | (8,824) |
Investment in unconsolidated entity | (4,940) | |
Proceeds from sale of property and equipment | 92 | 86 |
Net cash used in investing activities | (30,806) | (8,738) |
Cash flows from financing activities: | ||
Dividends on Common and Class B common stock | (120,178) | (100,765) |
Purchase of additional ownership from non-controlling interest | (32,400) | |
Repurchases of common stock to satisfy employee withholding tax obligations | (983) | (2,213) |
Net repayments of long-term obligations | (230) | (121) |
Distributions to non-controlling interest | (2,178) | |
Proceeds from short-term borrowings | 1,510 | |
Proceeds from non-controlling interest for investment in unconsolidated entity | 988 | |
Net proceeds from issuances of common stock | 3,076 | 4,741 |
Net proceeds under revolving credit agreement | 84,400 | 119,800 |
Net cash (used in) provided by financing activities | (65,327) | 20,774 |
Effect of foreign exchange rate changes on cash and cash equivalents | 707 | (1,276) |
Net decrease in cash and cash equivalents | (26,979) | (8,496) |
Cash and cash equivalents at beginning of period | 82,894 | 80,496 |
Cash and cash equivalents at end of period | 55,915 | $ 72,000 |
Supplemental cash flow information: | ||
Common stock issued for Dunphey & Associates Supply Co., Inc. | $ 7,450 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2019 | |
BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION Basis of Consolidation Watsco, Inc. (collectively with its subsidiaries, “Watsco,” “we,” “us,” or “our”) was incorporated in Florida in 1956 and is the largest distributor of air conditioning, heating and refrigeration equipment and related parts and supplies (“HVAC/R”) in the HVAC/R distribution industry in North America. The accompanying June 30, 2019 interim condensed consolidated unaudited 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 U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, but we believe the disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation have been included in the condensed consolidated unaudited financial statements included herein. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2018 Annual Report on Form 10-K. The condensed consolidated unaudited financial statements contained in this report include the accounts of Watsco, all of its wholly owned subsidiaries and the accounts of three joint ventures with Carrier Corporation (“Carrier”), in each of which Watsco maintains a controlling interest. All significant intercompany balances and transactions have been eliminated in consolidation. The results of operations for the quarter and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019. Sales of residential central air conditioners, heating equipment, and parts and supplies are seasonal. Furthermore, results of operations can be impacted favorably or unfavorably based on weather patterns, primarily during the Summer and Winter selling seasons. Demand related to the residential central air conditioning replacement market is typically highest in the second and third quarters, and demand for heating equipment is usually highest in the fourth quarter. Demand related to the new construction market is generally evenly distributed throughout the year, subject to weather and economic conditions, including their effect on the number of housing completions. Use of Estimates The preparation of condensed consolidated unaudited financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated unaudited financial statements and the reported amounts of revenues and expenses for the reporting period. Significant estimates include valuation reserves for accounts receivable, inventories and income taxes, reserves related to loss contingencies and the valuation of goodwill, indefinite lived intangible assets and long-lived intangible assets. While we believe that these estimates are reasonable, actual results could differ from such estimates. Recently Adopted Accounting Standards Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued guidance on accounting for leases, which requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases. In July 2018, the FASB issued updated guidance that provides an additional transition method of adoption that allows entities to initially apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings. The adoption of this standard and its related amendments (collectively, the “New Lease Standard”) on January 1, 2019 did not result in the recognition of a cumulative adjustment to opening retained earnings under the additional transition method, nor did it have a significant impact on our consolidated statements of income or cash flows. See Note 2. Recently Issued Accounting Standards Not Yet Adopted Intangibles—Goodwill and Other In January 2017, the FASB issued guidance to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under this updated standard, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity also should consider income tax effects from any tax-deductible |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2019 | |
LEASES | 2. LEASES Adoption of New Lease Standard We adopted the New Lease Standard on January 1, 2019 using the additional transition method described in Note 1 to these condensed consolidated unaudited financial statements. Results for reporting periods beginning on and after January 1, 2019 are presented under the New Lease Standard. Prior periods have not been restated. The New Lease Standard had a material impact on our consolidated balance sheet due to the recognition of right-of-use Practical Expedients We elected the package of practical expedients which did not require us to reassess (1) whether existing contracts contain embedded leases, (2) the lease classification of existing leases, and (3) whether initial direct costs for existing leases would qualify for capitalization under the New Lease Standard. We also elected the practical expedients related to short-term leases and separating lease components from non-lease components for all underlying asset classes. Operating and Finance Leases We have operating leases for real property, vehicles and equipment, and finance leases primarily for vehicles. Operating leases are included in operating lease right-of-use ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement dates of the respective leases in determining the present value of the applicable lease payments. Operating lease ROU assets also include any lease pre-payments 1-9 non-lease The components of operating lease expense were as follows: Quarter ended June 30, 2019 Six months ended Lease cost $ 17,984 $ 35,760 Short-term lease cost 2,433 4,609 Variable lease cost 109 315 Sublease income (32 ) (81 ) Total operating lease cost $ 20,494 $ 40,603 Supplemental balance sheet information related to operating leases were as follows: June 30, 2019 ROU assets $ 190,530 Current portion of long-term obligations $ 59,644 Operating lease liabilities 129,636 Total operating lease liabilities $ 189,280 Weighted Average Remaining Lease Term (in years) 3.7 Weighted Average Discount Rate 4.53 % Supplemental cash flow information related to operating leases were as follows: Six Months Ended June 30, 2019 Operating cash flows for the measurement of operating lease liabilities $ 35,544 Operating lease right-of-use $ 222,332 At June 30, 2019, maturities of operating lease liabilities over each of the next five years and thereafter were as follows: Remainder of 2019 $ 35,321 2020 60,667 2021 47,995 2022 33,232 2023 19,039 Thereafter 9,921 Total lease payments 206,175 Less imputed interest 16,895 Total lease liability $ 189,280 At June 30, 2019, we had additional operating leases, primarily for real property, that had not yet commenced. Such leases had estimated future minimum rental commitments of approximately $17,000. These operating leases are expected to commence in 2019 with lease terms of 5-11 Prior to the adoption of the New Lease Standard, rental commitments on an undiscounted basis were approximately $219,300 at December 31, 2018 under non-cancelable |
REVENUES
REVENUES | 6 Months Ended |
Jun. 30, 2019 | |
REVENUES | 3. REVENUES Disaggregation of Revenues The following table presents our revenues disaggregated by primary geographical regions and major product lines within our single reporting segment: Quarter Ended Six Months Ended 2019 2018 2019 2018 Primary Geographical Regions: United States $ 1,219,208 $ 1,181,461 $ 2,025,719 $ 1,990,962 Canada 77,751 79,119 137,007 131,479 Latin America and the Caribbean 74,895 72,163 140,406 136,879 $ 1,371,854 $ 1,332,743 $ 2,303,132 $ 2,259,320 Major Product Lines: HVAC equipment 69 % 68 % 68 % 67 % Other HVAC products 28 % 28 % 28 % 29 % Commercial refrigeration products 3 % 4 % 4 % 4 % 100 % 100 % 100 % 100 % |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2019 | |
EARNINGS PER SHARE | 4. EARNINGS PER SHARE The following table presents the calculation of basic and diluted earnings per share for our Common and Class B common stock: Quarter Ended Six Months Ended 2019 2018 2019 2018 Basic Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 90,155 $ 89,957 $ 125,192 $ 124,176 Less: distributed and undistributed earnings allocated to non-vested 7,512 7,379 10,355 10,147 Earnings allocated to Watsco, Inc. shareholders $ 82,643 $ 82,578 $ 114,837 $ 114,029 Weighted-average common shares outstanding - Basic 34,435,099 34,309,885 34,411,738 34,282,261 Basic earnings per share for Common and Class B common stock $ 2.40 $ 2.41 $ 3.34 $ 3.33 Allocation of earnings for Basic: Common stock $ 76,456 $ 76,321 $ 106,234 $ 105,383 Class B common stock 6,187 6,257 8,603 8,646 $ 82,643 $ 82,578 $ 114,837 $ 114,029 Diluted Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 90,155 $ 89,957 $ 125,192 $ 124,176 Less: distributed and undistributed earnings allocated to non-vested 7,511 7,374 10,354 10,144 Earnings allocated to Watsco, Inc. shareholders $ 82,644 $ 82,583 $ 114,838 $ 114,032 Weighted-average common shares outstanding - Basic 34,435,099 34,309,885 34,411,738 34,282,261 Effect of dilutive stock options 27,861 69,310 21,210 67,554 Weighted-average common shares outstanding - Diluted 34,462,960 34,379,195 34,432,948 34,349,815 Diluted earnings per share for Common and Class B common stock $ 2.40 $ 2.40 $ 3.34 $ 3.32 Anti-dilutive stock options not included above 174,457 40,797 213,270 24,044 Diluted earnings per share for our Common stock assumes the conversion of all of our Class B common stock into Common stock as of the beginning of the fiscal year; therefore, no allocation of earnings to Class B common stock is required. At June 30, 2019 and 2018, our outstanding Class B common stock was convertible into 2,577,858 |
OTHER COMPREHENSIVE INCOME (LOS
OTHER COMPREHENSIVE INCOME (LOSS) | 6 Months Ended |
Jun. 30, 2019 | |
OTHER COMPREHENSIVE INCOME (LOSS) | 5. OTHER COMPREHENSIVE INCOME (LOSS) Other comprehensive (loss) consists of the foreign currency translation adjustment associated with our Canadian operations’ use of the Canadian dollar as their functional currency and changes in the unrealized (losses) on cash flow hedging instruments. The tax effects allocated to each component of other comprehensive income (loss) were as follows: Quarter Ended Six Months Ended 2019 2018 2019 2018 Foreign currency translation adjustment $ 5,297 $ (5,046 ) $ 10,302 $ (11,691 ) Unrealized (loss) on cash flow hedging instruments (709 ) 520 (1,444 ) 727 Income tax (expense) 192 (140 ) 391 (196 ) Unrealized (loss) gain on cash flow hedging instruments, net of tax (517 ) 380 (1,053 ) 531 Reclassification of (gain) on cash flow hedging instruments into earnings (176 ) 144 (551 ) 1,175 Income tax expense (benefit) 48 (39 ) 149 (317 ) Reclassification of (gain) on cash flow hedging instruments into earnings, net of (128 ) 105 (402 ) 858 Other comprehensive (loss) $ 4,652 $ (4,561 ) $ 8,847 $ (10,302 ) The changes in each component of accumulated other comprehensive loss, net of tax, were as follows: Six Months Ended June 30, 2019 2018 Foreign currency translation adjustment: Beginning balance $ (46,604 ) $ (33,499 ) Current period other comprehensive (loss) 6,695 (7,373 ) Ending balance (39,909 ) (40,872 ) Cash flow hedging instruments: Beginning balance 636 (421 ) Current period other comprehensive (loss) income (631 ) 319 Reclassification adjustment (242 ) 515 Ending balance (237 ) 413 Equity securities: Beginning balance — (301 ) Cumulative-effect adjustment to retained earnings — 301 Ending balance — — Accumulated other comprehensive loss, net of tax $ (40,146 ) $ (40,459 ) |
PURCHASE OF OWNERSHIP INTEREST
PURCHASE OF OWNERSHIP INTEREST FROM JOINT VENTURE | 6 Months Ended |
Jun. 30, 2019 | |
PURCHASE OF OWNERSHIP INTEREST FROM JOINT VENTURE | 6. PURCHASE OF OWNERSHIP INTEREST FROM JOINT VENTURE Effective May 31, 2019, we purchased an additional 20% ownership interest in Homans Associates II LLC (“Homans”) from Carrier Enterprise Northeast, LLC (“Carrier Enterprise II”) for cash consideration of $32,400, which increased our ownership in Homans to 100%. Homans previously operated as a division of Carrier Enterprise II and subsequent to the purchase operates as a stand-alone subsidiary of the Company with 16 locations in the Northeastern U.S. |
INVESTMENT IN UNCONSOLIDATED EN
INVESTMENT IN UNCONSOLIDATED ENTITY | 6 Months Ended |
Jun. 30, 2019 | |
INVESTMENT IN UNCONSOLIDATED ENTITY | 7. INVESTMENT IN UNCONSOLIDATED ENTITY On June 21, 2017, our first joint venture with Carrier, Carrier Enterprise, LLC, which we refer to as Carrier Enterprise I, acquired a 34.9% ownership interest in Russell Sigler, Inc. (“RSI”), an HVAC distributor operating from 30 locations in the Western U.S. We have an 80% controlling interest in Carrier Enterprise I, and Carrier has a 20% non-controlling interest. Carrier Enterprise I acquired its ownership interest in RSI for cash consideration of $63,600, of which we contributed $50,880 and Carrier contributed $12,720. Effective June 29, 2018, Carrier Enterprise I acquired an additional 1.4% ownership interest in RSI, which increased Carrier Enterprise I’s ownership interest in RSI to 36.3% for cash consideration of $3,760 that was paid on July 5, 2018, of which we contributed $3,008 and Carrier contributed $752. Effective April 22, 2019, Carrier Enterprise I acquired an additional 1.8% ownership interest in RSI for cash consideration of $4,940, of which we contributed $3,952 and Carrier contributed $988. This acquisition increased Carrier Enterprise I’s ownership interest in RSI to 38.1%. Carrier Enterprise I is a party to a shareholders agreement (the “Shareholders Agreement”) with RSI and its shareholders. Pursuant to the Shareholders Agreement, RSI’s shareholders have the right to sell, and Carrier Enterprise I has the obligation to purchase, their respective shares of RSI for a purchase price determined based on either book value or a multiple of EBIT, the latter of which Carrier Enterprise I used to calculate the price paid for its investment in RSI. RSI’s shareholders may transfer their respective shares of RSI common stock only to members of the Sigler family or to Carrier Enterprise I, and, at any time from and after the date on which Carrier Enterprise I owns 85 |
ACQUISITION
ACQUISITION | 6 Months Ended |
Jun. 30, 2019 | |
ACQUISITION | 8. ACQUISITION On April 2, 2019, one of our wholly owned subsidiaries acquired certain assets and assumed certain liabilities of Dunphey & Associates Supply Co., Inc., a distributor of air conditioning and heating products operating from seven locations in New Jersey, New York and Connecticut. The purchase price was composed of cash consideration of $16,781 and the issuance of 50,952 shares of Common stock having a fair value of $7,450. The results of operations of this acquisition has been included in the consolidated financial statements from the date of acquisition. The pro forma effect of the acquisition was not deemed significant to the consolidated financial statements. |
DERIVATIVES
DERIVATIVES | 6 Months Ended |
Jun. 30, 2019 | |
DERIVATIVES | 9. DERIVATIVES We enter into foreign currency forward and option contracts to offset the earnings impact that foreign exchange rate fluctuations would otherwise have on certain monetary liabilities that are denominated in nonfunctional currencies. Cash Flow Hedging Instruments We enter into foreign currency forward contracts that are designated as cash flow hedges. The settlement of these derivatives results in reclassifications from accumulated other comprehensive loss to earnings for the period in which the settlement of these instruments occurs. The maximum period for which we hedge our cash flow using these instruments is 12 months. Accordingly, at June 30, 2019, all of our open foreign currency forward contracts had maturities of one year or less. The total notional value of our foreign currency exchange contracts designated as cash flow hedges at June 30, 2019 was $43,900, and such contracts have varying terms expiring through March 2020 The impact from foreign exchange derivative instruments designated as cash flow hedges was as follows: Quarter Ended Six Months Ended 2019 2018 2019 2018 (Loss) gain recorded in accumulated other comprehensive loss $ (709 ) $ 520 $ (1,444 ) $ 727 (Gain) loss reclassified from accumulated other comprehensive loss into earnings $ (176 ) $ 144 $ (551 ) $ 1,175 At June 30, 2019, we expected an estimated $545 pre-tax Derivatives Not Designated as Hedging Instruments We have also entered into foreign currency forward and option contracts that are either not designated as hedges or did not qualify for hedge accounting. These derivative instruments were effective economic hedges for all of the periods presented. The fair value gains and losses on these contracts are recognized in earnings as a component of selling, general and administrative expenses. The total notional value of our foreign currency exchange contracts not designated as hedging instruments at June 30, 2019 was $15,160, and such contracts have varying terms expiring through August 2019 We recognized (losses) gains of $(190) and $180 from foreign currency forward and option contracts not designated as hedging instruments in our condensed consolidated unaudited statements of income for the quarters ended June 30, 2019 and 2018, respectively. We recognized losses of $303 and $191 from foreign currency forward and option contracts not designated as hedging instruments in our condensed consolidated unaudited statements of income for the six months ended June 30, 2019 and 2018, respectively. The following table summarizes the fair value of derivative instruments, which consist solely of foreign exchange contracts, included in other current assets and accrued expenses and other current liabilities in our condensed consolidated unaudited balance sheets. See Note 10. Asset Derivatives Liability Derivatives June 30, 2019 December 31, 2018 June 30, 2019 December 31, 2018 Derivatives designated as hedging instruments $ 11 $ 1,262 $ 851 $ 3 Derivatives not designated as hedging — 58 164 11 Total derivative instruments $ 11 $ 1,320 $ 1,015 $ 14 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2019 | |
FAIR VALUE MEASUREMENTS | 10. FAIR VALUE MEASUREMENTS The following tables present our assets and liabilities carried at fair value that are measured on a recurring basis: Total Fair Value Measurements Balance Sheet Location Level 1 Level 2 Level 3 Assets: Derivative financial instruments Other current assets $ 11 $ — $ 11 $ — Equity securities Other assets $ 310 $ 310 $ — $ — Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 1,015 $ — $ 1,015 $ — Total Fair Value Measurements Balance Sheet Location Level 1 Level 2 Level 3 Assets: Derivative financial instruments Other current assets $ 1,320 $ — $ 1,320 $ — Equity securities Other assets $ 279 $ 279 $ — $ — Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 14 $ — $ 14 $ — The following is a description of the valuation techniques used for these assets and liabilities, as well as the level of input used to measure fair value: Equity securities Derivative financial instruments There were no transfers in or out of Level 1 and Level 2 during the six months ended June 30, 2019. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2019 | |
SHAREHOLDERS' EQUITY | 11. SHAREHOLDERS’ EQUITY Common Stock Dividends We paid cash dividends of $1.60, $1.45, $3.20, and $2.70 per share of both Common stock and Class B common stock during the quarters and six months ended June 30, 2019 and 2018, respectively. Non-Vested During the quarter and six months ended June 30, 2019, 3,608 shares of Common and Class B common stock with an aggregate fair market value of $555, and 6,593 shares of Common and Class B common stock with an aggregate fair market value of $983, respectively, were withheld as payment in lieu of cash to satisfy tax withholding obligations in connection with the vesting of non-vested 12,924 2,213 non-vested Exercise of Stock Options Cash received from Common stock issued as a result of stock options exercised during the quarters and six months ended June 30, 2019 and 2018, was $1,526, $1,369, $2,243, and $3,981, respectively. During the quarter ended June 30, 2018, 1,610 shares of Common stock with an aggregate fair market value of $286 were withheld as payment in lieu of cash for stock option exercises. These shares were retired upon delivery. During the six months ended June 30, 2018, 6,651 shares of Common stock with an aggregate fair market value of $1,200 were withheld as payment in lieu of cash for stock option exercises. These shares were retired upon delivery. Employee Stock Purchase Plan During the quarters ended June 30, 2019 and 2018, we received net proceeds of $423 and $414, respectively, for shares of Common stock issued under our employee stock purchase plan. During the six months ended June 30, 2019 and 2018, we received net proceeds of $833 and $760, respectively, for shares of Common stock issued under our employee stock purchase plan. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES Litigation, Claims and Assessments We are involved in litigation incidental to the operation of our business. We vigorously defend all matters in which we or our subsidiaries are named defendants and, for insurable losses, maintain significant levels of insurance to protect against adverse judgments, claims or assessments that may affect us. Although the adequacy of existing insurance coverage and the outcome of any legal proceedings cannot be predicted with certainty, based on the current information available, we do not believe the ultimate liability associated with any known claims or litigation will have a material adverse effect on our financial condition or results of operations. Self-Insurance Self-insurance reserves are maintained relative to company-wide casualty insurance and health benefit programs. The level of exposure from catastrophic events is limited by the purchase of stop-loss and aggregate liability reinsurance coverage. When estimating the self-insurance liabilities and related reserves, management considers a number of factors, which include historical claims experience, demographic factors, severity factors, and valuations provided by independent third-party actuaries. Management reviews its assumptions with its independent third-party actuaries to evaluate whether the self-insurance reserves are adequate. If actual claims or adverse development of loss reserves occur and exceed these estimates, additional reserves may be required. Reserves in the amounts of $3,383 and $2,311 at June 30, 2019 and December 31, 2018, respectively, were established related to such programs and are included in accrued expenses and other current liabilities in our condensed consolidated unaudited balance sheets. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2019 | |
RELATED PARTY TRANSACTIONS | 13. RELATED PARTY TRANSACTIONS Purchases from Carrier and its affiliates comprised 63% and 64% of all inventory purchases made during the quarters ended June 30, 2019 and 2018, respectively. Purchases from Carrier and its affiliates comprised 62% and 63% of all inventory purchases made during the six months ended June 30, 2019 and 2018, respectively. At June 30, 2019 and December 31, 2018, approximately $122,000 and $71,000, respectively, was payable to Carrier and its affiliates, net of receivables. Our joint ventures with Carrier also sell HVAC products to Carrier and its affiliates. Revenues in our condensed consolidated unaudited statements of income for the quarters and six months ended June 30, 2019 and 2018 included approximately $23,000, $21,000, $44,000, and $37,000, respectively, of sales to Carrier and its affiliates. We believe these transactions are conducted on terms equivalent to an arm’s-length A member of our Board of Directors is the Senior Chairman of Greenberg Traurig, P.A., which serves as our principal outside counsel for compliance and acquisition-related legal services. During the quarters and six months ended June 30, 2019 and June 30, 2018, we paid this firm $0, $14, $0 and $18 for services performed, respectively, and no amount was payable at June 30, 2019. A member of our Board of Directors is the Chairman and Chief Executive Officer of Moss & Associates LLC, which served as general contractor for the remodeling of our Miami headquarters that was completed in 2018. We paid Moss & Associates LLC $71 and $124 for construction services performed during the quarters and six months ended June 30, 2018, respectively. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Jun. 30, 2019 | |
SUBSEQUENT EVENT | 14. SUBSEQUENT EVENT On August 1, 2019, Carrier Enterprise I acquired substantially all of the assets and assumed certain of the liabilities of Peirce-Phelps, Inc. (“PPI”), an HVAC distributor operating from 19 locations in Pennsylvania, New Jersey, and Delaware, for $85,000 less certain average revolving indebtedness. Consideration for the net purchase price consisted of $10,000 in cash and 372,543 shares of Common stock having a fair value of $58,638. Carrier contributed cash of $ 17,000 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Basis of Consolidation | Basis of Consolidation Watsco, Inc. (collectively with its subsidiaries, “Watsco,” “we,” “us,” or “our”) was incorporated in Florida in 1956 and is the largest distributor of air conditioning, heating and refrigeration equipment and related parts and supplies (“HVAC/R”) in the HVAC/R distribution industry in North America. The accompanying June 30, 2019 interim condensed consolidated unaudited 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 U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, but we believe the disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation have been included in the condensed consolidated unaudited financial statements included herein. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2018 Annual Report on Form 10-K. The condensed consolidated unaudited financial statements contained in this report include the accounts of Watsco, all of its wholly owned subsidiaries and the accounts of three joint ventures with Carrier Corporation (“Carrier”), in each of which Watsco maintains a controlling interest. All significant intercompany balances and transactions have been eliminated in consolidation. The results of operations for the quarter and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019. Sales of residential central air conditioners, heating equipment, and parts and supplies are seasonal. Furthermore, results of operations can be impacted favorably or unfavorably based on weather patterns, primarily during the Summer and Winter selling seasons. Demand related to the residential central air conditioning replacement market is typically highest in the second and third quarters, and demand for heating equipment is usually highest in the fourth quarter. Demand related to the new construction market is generally evenly distributed throughout the year, subject to weather and economic conditions, including their effect on the number of housing completions. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated unaudited financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated unaudited financial statements and the reported amounts of revenues and expenses for the reporting period. Significant estimates include valuation reserves for accounts receivable, inventories and income taxes, reserves related to loss contingencies and the valuation of goodwill, indefinite lived intangible assets and long-lived intangible assets. While we believe that these estimates are reasonable, actual results could differ from such estimates. |
Recently Adopted Accounting Standards and Recently Issued Accounting Standards Not Yet Adopted | Recently Adopted Accounting Standards Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued guidance on accounting for leases, which requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases. In July 2018, the FASB issued updated guidance that provides an additional transition method of adoption that allows entities to initially apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings. The adoption of this standard and its related amendments (collectively, the “New Lease Standard”) on January 1, 2019 did not result in the recognition of a cumulative adjustment to opening retained earnings under the additional transition method, nor did it have a significant impact on our consolidated statements of income or cash flows. See Note 2. Recently Issued Accounting Standards Not Yet Adopted Intangibles—Goodwill and Other In January 2017, the FASB issued guidance to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under this updated standard, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity also should consider income tax effects from any tax-deductible |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Components Of Lease Expense | The components of operating lease expense were as follows: Quarter ended June 30, 2019 Six months ended Lease cost $ 17,984 $ 35,760 Short-term lease cost 2,433 4,609 Variable lease cost 109 315 Sublease income (32 ) (81 ) Total operating lease cost $ 20,494 $ 40,603 |
Summary Of Balance Sheet Information Related To Leases | Supplemental balance sheet information related to operating leases were as follows: June 30, 2019 ROU assets $ 190,530 Current portion of long-term obligations $ 59,644 Operating lease liabilities 129,636 Total operating lease liabilities $ 189,280 Weighted Average Remaining Lease Term (in years) 3.7 Weighted Average Discount Rate 4.53 % |
Summary Of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to operating leases were as follows: Six Months Ended June 30, 2019 Operating cash flows for the measurement of operating lease liabilities $ 35,544 Operating lease right-of-use $ 222,332 |
Maturities Of Operating Lease Liabilities | At June 30, 2019, maturities of operating lease liabilities over each of the next five years and thereafter were as follows: Remainder of 2019 $ 35,321 2020 60,667 2021 47,995 2022 33,232 2023 19,039 Thereafter 9,921 Total lease payments 206,175 Less imputed interest 16,895 Total lease liability $ 189,280 |
REVENUES (Tables)
REVENUES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Summary of Disaggregated Revenue | The following table presents our revenues disaggregated by primary geographical regions and major product lines within our single reporting segment: Quarter Ended Six Months Ended 2019 2018 2019 2018 Primary Geographical Regions: United States $ 1,219,208 $ 1,181,461 $ 2,025,719 $ 1,990,962 Canada 77,751 79,119 137,007 131,479 Latin America and the Caribbean 74,895 72,163 140,406 136,879 $ 1,371,854 $ 1,332,743 $ 2,303,132 $ 2,259,320 Major Product Lines: HVAC equipment 69 % 68 % 68 % 67 % Other HVAC products 28 % 28 % 28 % 29 % Commercial refrigeration products 3 % 4 % 4 % 4 % 100 % 100 % 100 % 100 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Schedule of Basic and Diluted Earnings Per Common Share | The following table presents the calculation of basic and diluted earnings per share for our Common and Class B common stock: Quarter Ended Six Months Ended 2019 2018 2019 2018 Basic Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 90,155 $ 89,957 $ 125,192 $ 124,176 Less: distributed and undistributed earnings allocated to non-vested 7,512 7,379 10,355 10,147 Earnings allocated to Watsco, Inc. shareholders $ 82,643 $ 82,578 $ 114,837 $ 114,029 Weighted-average common shares outstanding - Basic 34,435,099 34,309,885 34,411,738 34,282,261 Basic earnings per share for Common and Class B common stock $ 2.40 $ 2.41 $ 3.34 $ 3.33 Allocation of earnings for Basic: Common stock $ 76,456 $ 76,321 $ 106,234 $ 105,383 Class B common stock 6,187 6,257 8,603 8,646 $ 82,643 $ 82,578 $ 114,837 $ 114,029 Diluted Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 90,155 $ 89,957 $ 125,192 $ 124,176 Less: distributed and undistributed earnings allocated to non-vested 7,511 7,374 10,354 10,144 Earnings allocated to Watsco, Inc. shareholders $ 82,644 $ 82,583 $ 114,838 $ 114,032 Weighted-average common shares outstanding - Basic 34,435,099 34,309,885 34,411,738 34,282,261 Effect of dilutive stock options 27,861 69,310 21,210 67,554 Weighted-average common shares outstanding - Diluted 34,462,960 34,379,195 34,432,948 34,349,815 Diluted earnings per share for Common and Class B common stock $ 2.40 $ 2.40 $ 3.34 $ 3.32 Anti-dilutive stock options not included above 174,457 40,797 213,270 24,044 |
OTHER COMPREHENSIVE INCOME (L_2
OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Schedule of Tax Effects Allocated to Each Component of Other Comprehensive Income (Loss) | The tax effects allocated to each component of other comprehensive income (loss) were as follows: Quarter Ended Six Months Ended 2019 2018 2019 2018 Foreign currency translation adjustment $ 5,297 $ (5,046 ) $ 10,302 $ (11,691 ) Unrealized (loss) on cash flow hedging instruments (709 ) 520 (1,444 ) 727 Income tax (expense) 192 (140 ) 391 (196 ) Unrealized (loss) gain on cash flow hedging instruments, net of tax (517 ) 380 (1,053 ) 531 Reclassification of (gain) on cash flow hedging instruments into earnings (176 ) 144 (551 ) 1,175 Income tax expense (benefit) 48 (39 ) 149 (317 ) Reclassification of (gain) on cash flow hedging instruments into earnings, net of (128 ) 105 (402 ) 858 Other comprehensive (loss) $ 4,652 $ (4,561 ) $ 8,847 $ (10,302 ) |
Schedule of Accumulated Other Comprehensive Loss | The changes in each component of accumulated other comprehensive loss, net of tax, were as follows: Six Months Ended June 30, 2019 2018 Foreign currency translation adjustment: Beginning balance $ (46,604 ) $ (33,499 ) Current period other comprehensive (loss) 6,695 (7,373 ) Ending balance (39,909 ) (40,872 ) Cash flow hedging instruments: Beginning balance 636 (421 ) Current period other comprehensive (loss) income (631 ) 319 Reclassification adjustment (242 ) 515 Ending balance (237 ) 413 Equity securities: Beginning balance — (301 ) Cumulative-effect adjustment to retained earnings — 301 Ending balance — — Accumulated other comprehensive loss, net of tax $ (40,146 ) $ (40,459 ) |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Impact from Foreign Exchange Derivative Instruments Designated as Cash Flow Hedges | The impact from foreign exchange derivative instruments designated as cash flow hedges was as follows: Quarter Ended Six Months Ended 2019 2018 2019 2018 (Loss) gain recorded in accumulated other comprehensive loss $ (709 ) $ 520 $ (1,444 ) $ 727 (Gain) loss reclassified from accumulated other comprehensive loss into earnings $ (176 ) $ 144 $ (551 ) $ 1,175 |
Fair Value of Derivative Instruments and Location in the Balance Sheets | The following table summarizes the fair value of derivative instruments, which consist solely of foreign exchange contracts, included in other current assets and accrued expenses and other current liabilities in our condensed consolidated unaudited balance sheets. See Note 10. Asset Derivatives Liability Derivatives June 30, 2019 December 31, 2018 June 30, 2019 December 31, 2018 Derivatives designated as hedging instruments $ 11 $ 1,262 $ 851 $ 3 Derivatives not designated as hedging — 58 164 11 Total derivative instruments $ 11 $ 1,320 $ 1,015 $ 14 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables present our assets and liabilities carried at fair value that are measured on a recurring basis: Total Fair Value Measurements Balance Sheet Location Level 1 Level 2 Level 3 Assets: Derivative financial instruments Other current assets $ 11 $ — $ 11 $ — Equity securities Other assets $ 310 $ 310 $ — $ — Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 1,015 $ — $ 1,015 $ — Total Fair Value Measurements Balance Sheet Location Level 1 Level 2 Level 3 Assets: Derivative financial instruments Other current assets $ 1,320 $ — $ 1,320 $ — Equity securities Other assets $ 279 $ 279 $ — $ — Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 14 $ — $ 14 $ — |
Components of Operating Lease E
Components of Operating Lease Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Lease cost | $ 17,984 | $ 35,760 |
Short-term lease cost | 2,433 | 4,609 |
Variable lease cost | 109 | 315 |
Sublease income | (32) | (81) |
Total operating lease cost | $ 20,494 | $ 40,603 |
Summary Of Balance Sheet Inform
Summary Of Balance Sheet Information Related To Operating Leases (Detail) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases | |
ROU assets | $ 190,530 |
Current portion of long-term obligations | 59,644 |
Operating lease liabilities | 129,636 |
Total operating lease liabilities | $ 189,280 |
Weighted Average Remaining Lease Term (in years) | |
Operating leases | 3 years 8 months 12 days |
Weighted Average Discount Rate | |
Operating leases | 4.53% |
Summary Of Supplemental Cash Fl
Summary Of Supplemental Cash Flow Information Related to Leases (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 35,544 |
Operating leases | $ 222,332 |
Maturities Of Operating Lease L
Maturities Of Operating Lease Liabilities (Detail) $ in Thousands | Jun. 30, 2019USD ($) |
Maturities of Operating Lease Liabilities | |
Remainder of 2019 | $ 35,321 |
2020 | 60,667 |
2021 | 47,995 |
2022 | 33,232 |
2023 | 19,039 |
Thereafter | 9,921 |
Total lease payments | 206,175 |
Less imputed interest | 16,895 |
Total lease liability | $ 189,280 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Operating leases not yet commenced | $ 17,000 | |
Lessee, Operating Lease, Renewal Term | 5 years | |
Finance lease right of use assets | $ 2,759 | |
Finance lease liabilities | 2,852 | |
Total rental commitments | 206,175 | |
2020 | 60,667 | |
2021 | 47,995 | |
2022 | 33,232 | |
2023 | 19,039 | |
Thereafter | $ 9,921 | |
Non Cancelable Leases [Member] | ||
Total rental commitments | $ 219,300 | |
2019 | 70,400 | |
2020 | 55,100 | |
2021 | 41,300 | |
2022 | 28,500 | |
2023 | 15,700 | |
Thereafter | $ 8,300 | |
Maximum [Member] | ||
Operating leases not yet commenced term | 11 years | |
Operating Lease Remaining Lease Term | 9 years | |
Minimum [Member] | ||
Operating leases not yet commenced term | 5 years | |
Operating Lease Remaining Lease Term | 1 year |
Summary of Disaggregated Revenu
Summary of Disaggregated Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues from product lines, percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Revenues | $ 1,371,854 | $ 1,332,743 | $ 2,303,132 | $ 2,259,320 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,219,208 | 1,181,461 | 2,025,719 | 1,990,962 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 77,751 | 79,119 | 137,007 | 131,479 |
Latin America and Caribbean | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 74,895 | $ 72,163 | $ 140,406 | $ 136,879 |
HVAC Equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from product lines, percentage | 69.00% | 68.00% | 68.00% | 67.00% |
Other HVAC Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from product lines, percentage | 28.00% | 28.00% | 28.00% | 29.00% |
Commercial Refrigeration Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from product lines, percentage | 3.00% | 4.00% | 4.00% | 4.00% |
Schedule of Basic and Diluted E
Schedule of Basic and Diluted Earnings per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net income attributable to Watsco, Inc. shareholders | $ 90,155 | $ 89,957 | $ 125,192 | $ 124,176 |
Less: distributed and undistributed earnings allocated to non-vested restricted common stock - Basic | 7,512 | 7,379 | 10,355 | 10,147 |
Earnings allocated to Watsco, Inc. shareholders - Basic | $ 82,643 | $ 82,578 | $ 114,837 | $ 114,029 |
Weighted-average common shares outstanding - Basic | 34,435,099 | 34,309,885 | 34,411,738 | 34,282,261 |
Basic earnings per share for Common and Class B common stock | $ 2.40 | $ 2.41 | $ 3.34 | $ 3.33 |
Net income attributable to Watsco, Inc. shareholders | $ 90,155 | $ 89,957 | $ 125,192 | $ 124,176 |
Less: distributed and undistributed earnings allocated to non-vested restricted common stock - Diluted | 7,511 | 7,374 | 10,354 | 10,144 |
Earnings allocated to Watsco, Inc. shareholders - Diluted | $ 82,644 | $ 82,583 | $ 114,838 | $ 114,032 |
Weighted-average common shares outstanding - Basic | 34,435,099 | 34,309,885 | 34,411,738 | 34,282,261 |
Effect of dilutive stock options | 27,861 | 69,310 | 21,210 | 67,554 |
Weighted-average common shares outstanding - Diluted | 34,462,960 | 34,379,195 | 34,432,948 | 34,349,815 |
Diluted earnings per share for Common and Class B common stock | $ 2.40 | $ 2.40 | $ 3.34 | $ 3.32 |
Anti-dilutive stock options not included above | 174,457 | 40,797 | 213,270 | 24,044 |
Common Stock | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Earnings allocated to Watsco, Inc. shareholders - Basic | $ 76,456 | $ 76,321 | $ 106,234 | $ 105,383 |
Class B Common Stock | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Earnings allocated to Watsco, Inc. shareholders - Basic | $ 6,187 | $ 6,257 | $ 8,603 | $ 8,646 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | Jun. 30, 2019 | Jun. 30, 2018 |
Earnings Per Share [Line Items] | ||
Class B common stock conversion, number of shares | 2,577,858 | 2,599,496 |
Schedule of Tax Effects Allocat
Schedule of Tax Effects Allocated to Each Component of Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Components Of Other Comprehensive Income Loss [Line Items] | ||||||
Foreign currency translation adjustment | $ 5,297 | $ (5,046) | $ 10,302 | $ (11,691) | ||
Unrealized (loss) gain on cash flow hedging instruments | (709) | 520 | (1,444) | 727 | ||
Income tax benefit (expense) | 192 | (140) | 391 | (196) | ||
Unrealized (loss) gain on cash flow hedging instruments, net of tax | (517) | 380 | (1,053) | 531 | ||
Reclassification of (gain) loss on cash flow hedging instruments into earnings | (176) | 144 | (551) | 1,175 | ||
Income tax expense (benefit) | 48 | (39) | 149 | (317) | ||
Reclassification of (gain) loss on cash flow hedging instruments into earnings, net of tax | (128) | 105 | (402) | 858 | ||
Other comprehensive income (loss) | $ 4,652 | $ 4,195 | $ (4,561) | $ (5,741) | $ 8,847 | $ (10,302) |
Schedule of Accumulated Other C
Schedule of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | $ (45,968) | |
Ending balance | (40,146) | $ (40,459) |
Foreign Currency Translation Adjustment | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | (46,604) | (33,499) |
Current period other comprehensive income (loss) | 6,695 | (7,373) |
Ending balance | (39,909) | (40,872) |
Cash Flow Hedging Instruments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | 636 | (421) |
Current period other comprehensive income (loss) | (631) | 319 |
Reclassification adjustment | (242) | 515 |
Ending balance | $ (237) | 413 |
Equity Securities | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | (301) | |
Cumulative-effect adjustment to retained earnings | $ 301 |
Purchase of Ownership Interes_2
Purchase of Ownership Interest from Joint Venture - Additional Information (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($)Location | |
Business Acquisition [Line Items] | |
Cash consideration paid to obtain additional ownership | $ 32,400 |
Homans Associates II LLC [Member] | |
Business Acquisition [Line Items] | |
Additional ownership interest acquired | 20.00% |
Percentage of ownership interest | 100.00% |
Cash consideration paid to obtain additional ownership | $ 32,400 |
Number of locations in which the company operates | Location | 16 |
Investment in Unconsolidated _2
Investment in Unconsolidated Entity - Additional Information (Detail) $ in Thousands | Jul. 05, 2018USD ($) | Apr. 22, 2019USD ($) | Jun. 21, 2017USD ($)Locationboard-member | Jun. 30, 2019USD ($) | Dec. 31, 2018 | Jun. 29, 2018 |
Schedule of Equity Method Investments [Line Items] | ||||||
Investment in unconsolidated entity | $ 4,940 | |||||
Proceeds from non-controlling interest for investment in unconsolidated entity | $ 988 | |||||
Carrier Enterprise I | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage by parent | 80.00% | |||||
Ownership percentage, by non-controlling owners | 20.00% | |||||
Russell Sigler Inc | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest acquired | 38.10% | 34.90% | 36.30% | |||
Investment in unconsolidated entity | $ 3,760 | $ 4,940 | $ 63,600 | |||
Contribution to investment in unconsolidated entity by controlling interest | 3,008 | 3,952 | 50,880 | |||
Proceeds from non-controlling interest for investment in unconsolidated entity | $ 752 | $ 988 | $ 12,720 | |||
Ownership percentage needed for right to purchase up to 100% | 85.00% | |||||
Total number of board members | board-member | 6 | |||||
Number of board members that can be appointed based on ownership | board-member | 2 | |||||
Equity method investment, additional ownership interest acquired | 1.80% | 1.40% | ||||
Russell Sigler Inc | Western United States | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Number of locations | Location | 30 | |||||
Russell Sigler Inc | Carrier Enterprise I | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest acquired | 38.10% |
Acquisition - Additional Inform
Acquisition - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended |
Apr. 02, 2019 | Jun. 30, 2019 | |
Business Acquisition [Line Items] | ||
Business combination shares issued | $ 7,450 | |
Dunphey Associates Supply Co [Member] | ||
Business Acquisition [Line Items] | ||
Business combination cash transferred | $ 16,781 | |
Stock issued for acquisition | 50,952 | |
Business combination shares issued | $ 7,450 |
Impact from Foreign Exchange De
Impact from Foreign Exchange Derivative Instruments Designated as Cash Flow Hedges (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
(Loss) gain recorded in accumulated other comprehensive loss | $ (709) | $ 520 | $ (1,444) | $ 727 |
Foreign Currency Forward Contracts | Cash Flow Hedge | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
(Loss) gain recorded in accumulated other comprehensive loss | (709) | 520 | (1,444) | 727 |
(Gain) loss reclassified from accumulated other comprehensive loss into earnings | $ (176) | $ 144 | $ (551) | $ 1,175 |
Fair Value of Derivative Instru
Fair Value of Derivative Instruments and Location in the Balance Sheets (Detail) - Foreign Exchange Forward And Option Contracts [Member] - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Derivative instruments, assets derivatives | $ 11 | $ 1,320 |
Derivative instruments, liabilities derivatives | 1,015 | 14 |
Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative instruments, assets derivatives | 11 | 1,262 |
Derivative instruments, liabilities derivatives | 851 | 3 |
Not Designated as Hedging Instrument, Economic Hedge [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative instruments, assets derivatives | 58 | |
Derivative instruments, liabilities derivatives | $ 164 | $ 11 |
Derivatives - Additional Inform
Derivatives - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Foreign Currency Forward Contracts | Cash Flow Hedge | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Notional value of derivatives | $ 43,900,000 | $ 43,900,000 | ||
Contract maturity period | one year or less | |||
Contract expiring terms | 2020-03 | |||
Maximum length of time hedged in cash flow hedge | 12 months | |||
Pre-tax gain to be reclassified into earnings within the next 12 months | 545,000 | $ 545,000 | ||
Foreign Exchange Forward And Option Contracts [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member] | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Notional value of derivatives | 15,160,000 | $ 15,160,000 | ||
Contract expiring terms | 2019-08 | |||
(Loss) gain from foreign currency forward and option contracts not designated as hedging instruments | $ (190,000) | $ 180,000 | $ 303,000 | $ 191,000 |
Assets and Liabilities Carried
Assets and Liabilities Carried at Fair Value Measured on Recurring Basis (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Other Current Assets | ||
Assets: | ||
Derivative financial instruments | $ 11 | $ 1,320 |
Other assets | ||
Assets: | ||
Equity securities | 310 | 279 |
Accrued expenses and other current liabilities | ||
Liabilities: | ||
Derivative financial instruments | 1,015 | 14 |
Fair Value Measurements, Level 1 | Other assets | ||
Assets: | ||
Equity securities | 310 | 279 |
Fair Value Measurements, Level 2 | Other Current Assets | ||
Assets: | ||
Derivative financial instruments | 11 | 1,320 |
Fair Value Measurements, Level 2 | Accrued expenses and other current liabilities | ||
Liabilities: | ||
Derivative financial instruments | $ 1,015 | $ 14 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Stockholders Equity Note [Line Items] | ||||
Shares withheld as payment for tax withholdings related to share based compensation, market value | $ 983 | $ 2,213 | ||
Common and Class B Common Stock | Non-Vested Restricted Stock | ||||
Stockholders Equity Note [Line Items] | ||||
Shares withheld as payment for tax withholdings related to share based compensation, market value | $ 555 | $ 2,213 | $ 983 | $ 2,213 |
Shares withheld as payment for tax withholdings related to share based compensation, shares | 3,608 | 12,924 | 6,593 | 12,924 |
Common Stock | Stock Option | ||||
Stockholders Equity Note [Line Items] | ||||
Net proceeds from the sale of Common stock | $ 1,526 | $ 1,369 | $ 2,243 | $ 3,981 |
Shares withheld as payment for tax withholdings related to share based compensation, market value | $ 286 | $ 1,200 | ||
Shares withheld as payment for tax withholdings related to share based compensation, shares | 1,610 | 6,651 | ||
Common Stock | Employee Stock Purchase Plan [Member] | ||||
Stockholders Equity Note [Line Items] | ||||
Net proceeds from shares purchased under ESPP | $ 423 | $ 414 | $ 833 | $ 760 |
Common Stock | Class B Common Stock | ||||
Stockholders Equity Note [Line Items] | ||||
Cash dividends paid per share of Common and Class B common stock | $ 1.60 | $ 1.45 | $ 3.20 | $ 2.70 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Commitments and Contingencies Disclosure [Line Items] | ||
Self-insurance reserves | $ 3,383 | $ 2,311 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Moss & Associates LLC | Customary Payments for Remodeling of Corporate Headquarters | |||||
Related Party Transaction [Line Items] | |||||
Payment for related party transaction | $ 71 | $ 124 | |||
Greenberg Traurig, P.A. | Customary Fees for Legal Services | |||||
Related Party Transaction [Line Items] | |||||
Payment for related party transaction | $ 0 | 14 | $ 0 | 18 | |
Amount payable to related party | 0 | 0 | |||
Carrier and Its Affiliates | Supplier Concentration Risk | |||||
Related Party Transaction [Line Items] | |||||
Amount payable to Carrier and its affiliates, net of receivables | 122,000 | 122,000 | $ 71,000 | ||
Revenues from sales to Carrier and its affiliates | $ 23,000 | $ 21,000 | $ 44,000 | $ 37,000 | |
Carrier and Its Affiliates | Supplier Concentration Risk | Cost of Goods, Total | |||||
Related Party Transaction [Line Items] | |||||
Percentage of purchases from key suppliers | 63.00% | 64.00% | 62.00% | 63.00% |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) | Aug. 01, 2019USD ($)Locationshares | Jun. 30, 2019USD ($) |
Subsequent Event [Line Items] | ||
Proceeds from non-controlling interest for Business Acquisition | $ 988,000 | |
Fair value of equity shares issued or issuable | $ 7,450,000 | |
Subsequent Event | Carrier Enterprise I [Member] | ||
Subsequent Event [Line Items] | ||
Proceeds from non-controlling interest for Business Acquisition | $ 17,000 | |
Subsequent Event | Pierce Phelps PPI [Member] | ||
Subsequent Event [Line Items] | ||
Number of locations in which the company operates | Location | 19 | |
Number of shares issuable | shares | 372,543 | |
Fair value of equity shares issued or issuable | $ 58,638 | |
Cash consideration | 10,000 | |
Business combination recognized identifiable assets acquired and liabilities assumed net | $ 85,000 |