Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 02, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Registrant Name | WATSCO INC | |
Entity Central Index Key | 0000105016 | |
Entity File Number | 1-5581 | |
Entity Incorporation, State or Country Code | FL | |
Document Quarterly Report | true | |
Document Transition Report | false | |
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 | |
Entity Address, Address Line Two | Suite 901 | |
Entity Address, State or Province | FL | |
City Area Code | 305 | |
Local Phone Number | 714-4100 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
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 | 32,846,271 | |
Common Class B [Member] | ||
Document Information [Line Items] | ||
Trading Symbol | WSOB | |
Security Exchange Name | NYSE | |
Title of 12(b) Security | Class B common stock, $0.50 par value | |
Entity Common Stock, Shares Outstanding | 5,635,926 |
Condensed Consolidated Unaudite
Condensed Consolidated Unaudited Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues | $ 1,536,671 | $ 1,394,915 | $ 3,900,212 | $ 3,698,047 |
Cost of sales | 1,162,908 | 1,060,224 | 2,959,635 | 2,801,612 |
Gross profit | 373,763 | 334,691 | 940,577 | 896,435 |
Selling, general and administrative expenses | 221,037 | 212,902 | 618,476 | 589,523 |
Other income | 4,055 | 3,530 | 9,172 | 7,939 |
Operating income | 156,781 | 125,319 | 331,273 | 314,851 |
Interest expense, net | 108 | 1,434 | 1,181 | 3,422 |
Income before income taxes | 156,673 | 123,885 | 330,092 | 311,429 |
Income taxes | 30,467 | 24,230 | 63,397 | 60,060 |
Net income | 126,206 | 99,655 | 266,695 | 251,369 |
Less: net income attributable to non-controlling interest | 19,717 | 16,175 | 43,126 | 42,697 |
Net income attributable to Watsco, Inc. | $ 106,489 | $ 83,480 | $ 223,569 | $ 208,672 |
Earnings per share for Common and Class B common stock: | ||||
Basic | $ 2.77 | $ 2.20 | $ 5.83 | $ 5.54 |
Diluted | $ 2.76 | $ 2.20 | $ 5.82 | $ 5.54 |
Condensed Consolidated Unaudi_2
Condensed Consolidated Unaudited Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net income | $ 126,206 | $ 99,655 | $ 266,695 | $ 251,369 |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation adjustment | 5,514 | (3,038) | (6,592) | 7,264 |
Unrealized (loss) gain on cash flow hedging instruments | (416) | 255 | 948 | (798) |
Reclassification of gain on cash flow hedging instruments into earnings | (509) | (140) | (691) | (542) |
Other comprehensive income (loss) | 4,589 | (2,923) | (6,335) | 5,924 |
Comprehensive income | 130,795 | 96,732 | 260,360 | 257,293 |
Less: comprehensive income attributable to non-controlling interest | 21,283 | 15,146 | 40,986 | 44,693 |
Comprehensive income attributable to Watsco, Inc. | $ 109,512 | $ 81,586 | $ 219,374 | $ 212,600 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 92,600 | $ 74,454 |
Accounts receivable, net | 644,124 | 533,810 |
Inventories | 884,653 | 920,786 |
Other current assets | 22,742 | 17,680 |
Total current assets | 1,644,119 | 1,546,730 |
Property and equipment, net | 97,660 | 98,523 |
Operating lease right-of-use assets | 218,884 | 223,369 |
Goodwill | 409,783 | 411,217 |
Intangible assets, net | 164,551 | 172,004 |
Investment in unconsolidated entity | 103,355 | 94,833 |
Other assets | 9,333 | 9,485 |
Total assets | 2,647,685 | 2,556,161 |
Current liabilities: | ||
Current portion of lease liabilities | 71,174 | 69,421 |
Accounts payable | 352,694 | 239,666 |
Accrued expenses and other current liabilities | 185,630 | 152,630 |
Total current liabilities | 609,498 | 461,717 |
Long-term obligations: | ||
Borrowings under revolving credit agreement | 668 | 155,700 |
Operating lease liabilities, net of current portion | 149,075 | 154,271 |
Finance lease liabilities, net of current portion | 3,569 | 2,009 |
Total long-term obligations | 153,312 | 311,980 |
Deferred income taxes and other liabilities | 74,937 | 67,697 |
Commitments and contingencies | ||
Watsco, Inc. shareholders' equity: | ||
Preferred stock, $0.50 par value | ||
Paid-in capital | 940,015 | 907,877 |
Accumulated other comprehensive loss, net of tax | (43,245) | (39,050) |
Retained earnings | 658,622 | 632,507 |
Treasury stock, at cost | (87,440) | (87,440) |
Total Watsco, Inc. shareholders' equity | 1,489,612 | 1,435,427 |
Non-controlling interest | 320,326 | 279,340 |
Total shareholders' equity | 1,809,938 | 1,714,767 |
Total liabilities and shareholders' equity | 2,647,685 | 2,556,161 |
Common Stock | ||
Watsco, Inc. shareholders' equity: | ||
Common stock, $0.50 par value | 18,830 | 18,768 |
Class B Common Stock | ||
Watsco, Inc. shareholders' equity: | ||
Common stock, $0.50 par value | $ 2,830 | $ 2,765 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
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 | Peirce-Phelps, Inc. | Dunphey & Associates Supply Co., Inc. | Common Stock, Class B Common Stock and Preferred Stock | Common Stock, Class B Common Stock and Preferred StockPeirce-Phelps, Inc. | Common Stock, Class B Common Stock and Preferred StockDunphey & Associates Supply Co., Inc. | Paid-In Capital | Paid-In CapitalPeirce-Phelps, Inc. | Paid-In CapitalDunphey & Associates Supply Co., Inc. | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Non-controlling Interest |
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 | 251,369 | ||||||||||||
Other comprehensive income (loss) | 5,924 | ||||||||||||
Ending balance at Sep. 30, 2019 | 1,753,022 | $ 21,485 | 894,917 | (42,040) | 656,187 | (87,440) | 309,913 | ||||||
Ending balance (in shares) at Sep. 30, 2019 | 38,097,236 | ||||||||||||
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 | $ 7,450 | $ 25 | $ 7,425 | ||||||||||
Common stock issued (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 | ||||||||||||
Net income | 99,655 | 83,480 | 16,175 | ||||||||||
Other comprehensive income (loss) | (2,923) | (1,894) | (1,029) | ||||||||||
Issuances of non-vested restricted shares of common stock | $ 19 | (19) | |||||||||||
Issuances of non-vested restricted shares of common stock (in shares) | 37,834 | ||||||||||||
Forfeitures of non-vested restricted shares of common stock | $ (3) | 3 | |||||||||||
Forfeitures of non-vested restricted shares of common stock (in shares) | (5,337) | ||||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan | 4,529 | $ 19 | 4,510 | ||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan (in shares) | 36,374 | ||||||||||||
Retirement of common stock | (669) | $ (2) | (667) | ||||||||||
Retirement of common stock (in shares) | (4,030) | ||||||||||||
Share-based compensation | 3,706 | 3,706 | |||||||||||
Cash dividends declared and paid on Common and Class B common stock | (60,276) | (60,276) | |||||||||||
Common stock issued | $ 58,638 | $ 186 | $ 58,452 | ||||||||||
Common stock issued (in shares) | 372,543 | ||||||||||||
Investment in Peirce-Phelps, Inc. | 17,000 | 17,000 | |||||||||||
Ending balance at Sep. 30, 2019 | 1,753,022 | $ 21,485 | 894,917 | (42,040) | 656,187 | (87,440) | 309,913 | ||||||
Ending balance (in shares) at Sep. 30, 2019 | 38,097,236 | ||||||||||||
Beginning balance at Dec. 31, 2019 | 1,714,767 | $ 21,533 | 907,877 | (39,050) | 632,507 | (87,440) | 279,340 | ||||||
Beginning balance (in shares) at Dec. 31, 2019 | 38,194,056 | ||||||||||||
Net income | 36,247 | 30,502 | 5,745 | ||||||||||
Other comprehensive income (loss) | (19,280) | (12,739) | (6,541) | ||||||||||
Issuances of non-vested restricted shares of common stock | $ 57 | (57) | |||||||||||
Issuances of non-vested restricted shares of common stock (in shares) | 113,765 | ||||||||||||
Common stock contribution to 401(k) plan | 4,543 | $ 13 | 4,530 | ||||||||||
Common stock contribution to 401(k) plan (in shares) | 25,216 | ||||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan | 2,541 | $ 9 | 2,532 | ||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan (in shares) | 18,674 | ||||||||||||
Retirement of common stock | (791) | $ (2) | (789) | ||||||||||
Retirement of common stock (in shares) | (4,828) | ||||||||||||
Share-based compensation | 6,097 | 6,097 | |||||||||||
Cash dividends declared and paid on Common and Class B common stock | (61,238) | (61,238) | |||||||||||
Ending balance at Mar. 31, 2020 | 1,682,886 | $ 21,610 | 920,190 | (51,789) | 601,771 | (87,440) | 278,544 | ||||||
Ending balance (in shares) at Mar. 31, 2020 | 38,346,883 | ||||||||||||
Beginning balance at Dec. 31, 2019 | 1,714,767 | $ 21,533 | 907,877 | (39,050) | 632,507 | (87,440) | 279,340 | ||||||
Beginning balance (in shares) at Dec. 31, 2019 | 38,194,056 | ||||||||||||
Net income | 266,695 | ||||||||||||
Other comprehensive income (loss) | (6,335) | ||||||||||||
Ending balance at Sep. 30, 2020 | 1,809,938 | $ 21,660 | 940,015 | (43,245) | 658,622 | (87,440) | 320,326 | ||||||
Ending balance (in shares) at Sep. 30, 2020 | 38,448,020 | ||||||||||||
Beginning balance at Mar. 31, 2020 | 1,682,886 | $ 21,610 | 920,190 | (51,789) | 601,771 | (87,440) | 278,544 | ||||||
Beginning balance (in shares) at Mar. 31, 2020 | 38,346,883 | ||||||||||||
Net income | 104,242 | 86,578 | 17,664 | ||||||||||
Other comprehensive income (loss) | 8,356 | 5,521 | 2,835 | ||||||||||
Issuances of non-vested restricted shares of common stock | $ 8 | (8) | |||||||||||
Issuances of non-vested restricted shares of common stock (in shares) | 15,500 | ||||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan | 4,545 | $ 16 | 4,529 | ||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan (in shares) | 32,073 | ||||||||||||
Retirement of common stock | (1,096) | $ (4) | (1,092) | ||||||||||
Retirement of common stock (in shares) | (6,377) | ||||||||||||
Share-based compensation | 5,226 | 5,226 | |||||||||||
Cash dividends declared and paid on Common and Class B common stock | (68,077) | (68,077) | |||||||||||
Ending balance at Jun. 30, 2020 | 1,736,082 | $ 21,630 | 928,845 | (46,268) | 620,272 | (87,440) | 299,043 | ||||||
Ending balance (in shares) at Jun. 30, 2020 | 38,388,079 | ||||||||||||
Net income | 126,206 | 106,489 | 19,717 | ||||||||||
Other comprehensive income (loss) | 4,589 | 3,023 | 1,566 | ||||||||||
Issuances of non-vested restricted shares of common stock | $ 10 | (10) | |||||||||||
Issuances of non-vested restricted shares of common stock (in shares) | 20,000 | ||||||||||||
Forfeitures of non-vested restricted shares of common stock | $ (2) | 2 | |||||||||||
Forfeitures of non-vested restricted shares of common stock (in shares) | (3,589) | ||||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan | 8,466 | $ 28 | 8,438 | ||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan (in shares) | 55,473 | ||||||||||||
Retirement of common stock | (2,755) | $ (6) | (2,749) | ||||||||||
Retirement of common stock (in shares) | (11,943) | ||||||||||||
Share-based compensation | 5,489 | 5,489 | |||||||||||
Cash dividends declared and paid on Common and Class B common stock | (68,139) | (68,139) | |||||||||||
Ending balance at Sep. 30, 2020 | $ 1,809,938 | $ 21,660 | $ 940,015 | $ (43,245) | $ 658,622 | $ (87,440) | $ 320,326 | ||||||
Ending balance (in shares) at Sep. 30, 2020 | 38,448,020 |
Condensed Consolidated Unaudi_4
Condensed Consolidated Unaudited Statements of Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | |
Cash dividends declared and paid, common stock | $ 1.775 | $ 1.775 | $ 1.60 | $ 1.60 | $ 1.60 | $ 1.60 |
Condensed Consolidated Unaudi_5
Condensed Consolidated Unaudited Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 266,695 | $ 251,369 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 19,350 | 17,983 |
Share-based compensation | 15,802 | 11,992 |
Non-cash contribution to 401(k) plan | 4,543 | 4,274 |
Deferred income tax provision | 3,177 | 2,765 |
Other income from investment in unconsolidated entity | (9,172) | (7,939) |
Other, net | 1,776 | 1,260 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable | (113,017) | (102,813) |
Inventories | 34,448 | (74,448) |
Accounts payable and other liabilities | 158,094 | 99,627 |
Other, net | (8,918) | (6,539) |
Net cash provided by operating activities | 372,778 | 197,531 |
Cash flows from investing activities: | ||
Capital expenditures | (11,608) | (14,007) |
Business acquisitions, net of cash acquired | (47,343) | |
Investment in unconsolidated entity | (4,940) | |
Proceeds from sale of property and equipment | 61 | 1,295 |
Net cash used in investing activities | (11,547) | (64,995) |
Cash flows from financing activities: | ||
Dividends on Common and Class B common stock | (197,454) | (180,454) |
Net (repayments) proceeds under revolving credit agreement | (155,032) | 34,100 |
Repurchases of common stock to satisfy employee withholding tax obligations | (2,299) | (1,528) |
Net repayments of long-term obligations | (1,003) | (920) |
Payment of fees related to revolving credit agreement | (189) | |
Proceeds from non-controlling interest for investment in unconsolidated entity | 988 | |
Purchase of additional ownership from non-controlling interest | (32,400) | |
Proceeds from non-controlling interest for investment in Peirce-Phelps, Inc | 17,000 | |
Net proceeds from issuances of common stock | 13,207 | 7,480 |
Net cash used in financing activities | (342,770) | (155,734) |
Effect of foreign exchange rate changes on cash and cash equivalents | (315) | 454 |
Net increase (decrease) in cash and cash equivalents | 18,146 | (22,744) |
Cash and cash equivalents at beginning of period | 74,454 | 82,894 |
Cash and cash equivalents at end of period | $ 92,600 | 60,150 |
Peirce-Phelps, Inc. | ||
Supplemental cash flow information: | ||
Common stock issued | 58,638 | |
Dunphey & Associates Supply Co., Inc. | ||
Supplemental cash flow information: | ||
Common stock issued | $ 7,450 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2020 | |
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 September 30, 2020 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 2019 Annual Report on Form 10-K. On April 3, 2020, United Technologies Corporation completed the spin-off The results of operations for the quarter and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020. Sales of residential central air conditioners, heating equipment, and parts and supplies are seasonal. Furthermore, profitability can be impacted favorably or unfavorably based on weather patterns, particularly 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 sectors throughout most of the markets we serve tends to be fairly evenly distributed throughout the year and depends largely on housing completions and related weather and economic conditions. 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, net realizable value adjustments to inventories, valuation reserves for income taxes, reserves related to loss contingencies and the valuation of goodwill, indefinite-lived intangible assets and long-lived assets. While we believe that these estimates are reasonable, actual results could differ from such estimates. Impact of COVID-19 A novel strain of coronavirus, COVID-19, COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 Recently Adopted Accounting Standards Financial Instruments—Credit Losses In June 2016, the Financial Accounting Standards Board (“FASB”) issued guidance that modifies the impairment model to utilize an expected loss methodology in place of the incurred loss methodology for financial instruments, including trade receivables, contract assets, long-term receivables and off-balance 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 |
REVENUES
REVENUES | 9 Months Ended |
Sep. 30, 2020 | |
REVENUES | 2. 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 Nine Months Ended 2020 2019 2020 2019 Primary Geographical Regions: United States $ 1,391,340 $ 1,232,564 $ 3,517,533 $ 3,258,283 Canada 91,429 85,422 218,687 222,429 Latin America and the Caribbean 53,902 76,929 163,992 217,335 $ 1,536,671 $ 1,394,915 $ 3,900,212 $ 3,698,047 Major Product Lines: HVAC equipment 70 % 68 % 70 % 68 % Other HVAC products 27 % 29 % 27 % 28 % Commercial refrigeration products 3 % 3 % 3 % 4 % 100 % 100 % 100 % 100 % |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2020 | |
EARNINGS PER SHARE | 3. 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 Nine Months Ended 2020 2019 2020 2019 Basic Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 106,489 $ 83,480 $ 223,569 $ 208,672 Less: distributed and undistributed earnings allocated to non-vested 9,146 6,973 19,178 17,326 Earnings allocated to Watsco, Inc. shareholders $ 97,343 $ 76,507 $ 204,391 $ 191,346 Weighted-average common shares outstanding - Basic 35,099,871 34,755,627 35,046,156 34,544,425 Basic earnings per share for Common and Class B common stock $ 2.77 $ 2.20 $ 5.83 $ 5.54 Allocation of earnings for Basic: Common stock $ 90,197 $ 70,836 $ 189,364 $ 177,075 Class B common stock 7,146 5,671 15,027 14,271 $ 97,343 $ 76,507 $ 204,391 $ 191,346 Diluted Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 106,489 $ 83,480 $ 223,569 $ 208,672 Less: distributed and undistributed earnings allocated to non-vested 9,135 6,971 19,175 17,325 Earnings allocated to Watsco, Inc. shareholders $ 97,354 $ 76,509 $ 204,394 $ 191,347 Weighted-average common shares outstanding - Basic 35,099,871 34,755,627 35,046,156 34,544,425 Effect of dilutive stock options 137,151 33,328 62,887 25,294 Weighted-average common shares outstanding - Diluted 35,237,022 34,788,955 35,109,043 34,569,719 Diluted earnings per share for Common and Class B common stock $ 2.76 $ 2.20 $ 5.82 $ 5.54 Anti-dilutive stock options not included above 3,750 183,083 27,755 220,013 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 September 30, 2020 and 2019, our outstanding Class B common stock was convertible into 2,576,570 and 2,576,336 shares of our Common stock, respectively. |
OTHER COMPREHENSIVE INCOME (LOS
OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Sep. 30, 2020 | |
OTHER COMPREHENSIVE INCOME (LOSS) | 4. OTHER COMPREHENSIVE INCOME (LOSS) Other comprehensive income (loss) consists of the foreign changes in the unrealized (losses) gains on cash comprehensive income (loss) were as follows: Quarter Ended Nine Months Ended 2020 2019 2020 2019 Foreign currency translation adjustment $ 5,514 $ (3,038 ) $ (6,592 ) $ 7,264 Unrealized (loss) gain on cash flow hedging instruments (570 ) 351 1,297 (1,093 ) Income tax benefit (expense) 154 (96 ) (349 ) 295 Unrealized (loss) gain on cash flow hedging instruments, net of tax (416 ) 255 948 (798 ) Reclassification of gain on cash flow hedging instruments into earnings (697 ) (191 ) (946 ) (742 ) Income tax expense 188 51 255 200 Reclassification of gain on cash flow hedging instruments into earnings, net of tax (509 ) (140 ) (691 ) (542 ) Other comprehensive income (loss) $ 4,589 $ (2,923 ) $ (6,335 ) $ 5,924 The changes in each component of accumulated other comprehensive loss, net of tax, were as follows: Nine Months Ended September 30, 2020 2019 Foreign currency translation adjustment: Beginning balance $ (38,599 ) $ (46,604 ) Current period other comprehensive (loss) income (4,349 ) 4,732 Ending balance (42,948 ) (41,872 ) Cash flow hedging instruments: Beginning balance (451 ) 636 Current period other comprehensive income (loss) 568 (479 ) Reclassification adjustment (414 ) (325 ) Ending balance (297 ) (168 ) Accumulated other comprehensive loss, net of tax $ (43,245 ) $ (42,040 ) |
PURCHASE OF OWNERSHIP INTEREST
PURCHASE OF OWNERSHIP INTEREST FROM JOINT VENTURE | 9 Months Ended |
Sep. 30, 2020 | |
PURCHASE OF OWNERSHIP INTEREST FROM JOINT VENTURE | 5. 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 our second joint venture with Carrier, Carrier Enterprise Northeast, LLC, which we refer to as 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 wholly owned subsidiary of the Company with 17 locations in the Northeastern U.S. |
INVESTMENT IN UNCONSOLIDATED EN
INVESTMENT IN UNCONSOLIDATED ENTITY | 9 Months Ended |
Sep. 30, 2020 | |
INVESTMENT IN UNCONSOLIDATED ENTITY | 6. 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 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% or more of RSI’s outstanding common stock, it has the right, but not the obligation, to purchase from RSI’s shareholders the remaining outstanding shares of RSI common stock. Additionally, Carrier Enterprise I has the right to appoint two of RSI’s six board members. Given Carrier Enterprise I’s 38.1% equity interest in RSI and its right to appoint two out of RSI’s six board members, this investment in RSI is accounted for under the equity method |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2020 | |
ACQUISITIONS | 7. ACQUISITIONS N&S Supply of Fishkill, Inc. On November 26, 2019, one of our wholly owned subsidiaries acquired certain assets and assumed certain liabilities of N&S Supply of Fishkill, Inc., a distributor of air conditioning, heating and plumbing products operating from seven locations in New York and Connecticut. The purchase price was composed of cash consideration of $12,000, the issuance of 22,435 shares of Common stock having a fair value of $4,032 and the re such Peirce-Phelps, Inc. On August 1, 2019, Carrier Enterprise I acquired substantially all the HVAC 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, 372,543 shares of Common stock having a fair value of $58,344, net of a discount for lack of marketability, and the payment of certain average revolving indebtedness. Carrier contributed cash of $17,000 to Carrier Enterprise I in connection with the acquisition of PPI. The purchase price resulted in the recognition of $28,884 in goodwill and intangibles. The fair value of the identified intangible assets was $19,000 and consisted of $13,500 in trade names and distribution rights, and $5,500 in customer relationships to be amortized over an 18-year such The table below presents the allocation of the total consideration to tangible and intangible assets acquired and liabilities assumed from the acquisition of PPI based on the respective fair values as of August 1, 2019: Cash and cash equivalents $ 4,299 Accounts receivable 30,719 Inventories 45,491 Other current assets 135 Property and equipment 2,544 Operating lease right-of-use 19,072 Goodwill 9,884 Intangibles 19,000 Other assets 299 Accounts payable (11,079 ) Accrued expenses and other current liabilities (13,038 ) Operating lease liabilities, net of current portion (14,100 ) Total $ 93,226 Dunphey & Associates Supply Co., Inc. 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, for cash consideration of $16,758 and the issuance of 50,952 shares of Common stock having a fair value of $6,891, net of a discount for lack of marketability. The purchase price resulted in the recognition of $8,974 in goodwill and intangibles. The fair value of the identified intangible assets was $5,300 and consisted of $2,500 trade names and trademarks, and $2,800 in customer relationships to be amortized over a 15-year such The results of operations of these acquisitions have been included in the consolidated financial statements from their respective dates of acquisition. The pro forma effect of the acquisitions was not deemed significant to the consolidated financial statements. |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2020 | |
DEBT | 8. DEBT We maintain an unsecured, syndicated multicurrency revolving credit agreement, which we use to fund seasonal working capital needs and for other general corporate purposes, including acquisitions, dividends (if and as declared by our Board of Directors), capital expenditures, stock repurchases and issuances of letters of credit. On April 10, 2020, we increased the aggregate borrowing capacity of our revolving credit agreement from $500,000 to $560,000. The credit agreement matures on December 5, 2023. At September 30, 2020 and December 31, 2019, $668 and $155,700, respectively, were outstanding under the revolving credit agreement. The revolving credit agreement contains customary affirmative and negative covenants, including financial covenants with respect to consolidated leverage and interest coverage ratios, and other customary restrictions. We believe we were in compliance with all covenants at September 30, 2020. |
DERIVATIVES
DERIVATIVES | 9 Months Ended |
Sep. 30, 2020 | |
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 September 30, 2020, 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 September 30, 2020 was $11,000, and such contracts have varying terms expiring through January 2021. The impact from foreign exchange derivative instruments designated as cash flow hedges was as follows: Quarter Ended Nine Months Ended 2020 2019 2020 2019 (Loss) gain recorded in accumulated other comprehensive loss $ (570 ) $ 351 $ 1,297 $ (1,093 ) Gain reclassified from accumulated other comprehensive loss into earnings $ (697 ) $ (191 ) $ (946 ) $ (742 ) At September 30, 2020, we expected an estimated $682 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 September 30, 2020 was $4,600, and such contracts subsequently expired during October 2020. We recognized (losses) gains We recognized gains (losses) of 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 September 30, 2020 December 31, 2019 September 30, 2020 December 31, 2019 Derivatives designated as hedging instruments $ — $ — $ 394 $ 944 Derivatives not designated as hedging instruments 6 — — 63 Total derivative instruments $ 6 $ — $ 394 $ 1,007 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2020 | |
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 $ 6 $ — $ 6 $ — Equity securities Other assets $ 442 $ 442 $ — $ — Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 394 $ — $ 394 $ — Total Fair Value Measurements Balance Sheet Location Level 1 Level 2 Level 3 Assets: Equity securities Other assets $ 402 $ 402 $ — $ — Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 1,007 $ — $ 1,007 $ — 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 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
SHAREHOLDERS' EQUITY | 11. SHAREHOLDERS’ EQUITY Common Stock Dividends We paid cash dividends of $1.775, $1.60, $5.15, and $4.80 per share of both Common stock and Class B common stock during the quarters and nine months ended September 30, 2020 and 2019, respectively. Non-Vested During the quarter and nine months ended September 30, 2020, 5,361 shares of Common and Class B common stock with an aggregate fair market value of $1,265, and 11,693 shares of Common and Class B common stock with an aggregate fair market value of $2,299, respectively, were withheld as payment in lieu of cash to satisfy tax withholding obligations in connection with the vesting of non-vested non-vested Exercise of Stock Options Cash received from Common stock issued as a result of stock options exercised during the quarters and nine months ended September 30, 2020 and 2019, was $6,573, $3,986, $11,978, and $6,229, respectively. During the quarter and nine months ended September 30, 2020, 6,582 shares of Common stock with an aggregate fair market value of $1,490, and 11,455 shares of Common stock with an aggregate fair market value of $2,343, respectively, were withheld as payment in lieu of cash for stock option exercises. These shares were retired upon delivery. During both the quarter and nine months ended September 30, 2019, 799 shares of Common stock with an aggregate fair market value of $134 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 September 30, 2020 and 2019, we received net proceeds of $401 and $418, respectively, for shares of our Common stock purchased under our employee stock purchase plan. During the nine months ended September 30, 2020 and 2019, we received net proceeds of $1,229 and $1,251, respectively, for shares of our Common stock purchased under our employee stock purchase plan. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
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 $5,249 and $3,062 at September 30, 2020 and December 31, 2019, 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 | 9 Months Ended |
Sep. 30, 2020 | |
RELATED PARTY TRANSACTIONS | 13. RELATED PARTY TRANSACTIONS Purchases from Carrier and its affiliates comprised 65% and 60% of all inventory purchases made during the quarters ended September 30, 2020 and 2019, respectively. Purchases from Carrier and its affiliates comprised 62% and 61% of all inventory purchases made during the nine months ended September 30, 2020 and 2019, respectively. At September 30, 2020 and December 31, 2019, approximately $106,000 and $86,000, 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 nine months ended September 30, 2020 and 2019 included approximately $27,000, $24,000, $82,000, and $68,000, respectively, of sales to Carrier and its affiliates. We believe these transactions are conducted on arm’s-length terms 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 nine months ended September 30, 2020 and 2019, fees to this firm for services performed were $28, $175, $28, and $175, respectively, and $28 was payable at September 30, 2020. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
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 September 30, 2020 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 2019 Annual Report on Form 10-K. On April 3, 2020, United Technologies Corporation completed the spin-off The results of operations for the quarter and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020. Sales of residential central air conditioners, heating equipment, and parts and supplies are seasonal. Furthermore, profitability can be impacted favorably or unfavorably based on weather patterns, particularly 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 sectors throughout most of the markets we serve tends to be fairly evenly distributed throughout the year and depends largely on housing completions and related weather and economic conditions. |
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, net realizable value adjustments to inventories, valuation reserves for income taxes, reserves related to loss contingencies and the valuation of goodwill, indefinite-lived intangible assets and long-lived assets. While we believe that these estimates are reasonable, actual results could differ from such estimates. |
Impact of COVID-19 Pandemic | Impact of COVID-19 A novel strain of coronavirus, COVID-19, COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 COVID-19 |
Recently Adopted Accounting Standards and Recently Issued Accounting Standards Not Yet Adopted | Recently Adopted Accounting Standards Financial Instruments—Credit Losses In June 2016, the Financial Accounting Standards Board (“FASB”) issued guidance that modifies the impairment model to utilize an expected loss methodology in place of the incurred loss methodology for financial instruments, including trade receivables, contract assets, long-term receivables and off-balance 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 |
REVENUES (Tables)
REVENUES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 Nine Months Ended 2020 2019 2020 2019 Primary Geographical Regions: United States $ 1,391,340 $ 1,232,564 $ 3,517,533 $ 3,258,283 Canada 91,429 85,422 218,687 222,429 Latin America and the Caribbean 53,902 76,929 163,992 217,335 $ 1,536,671 $ 1,394,915 $ 3,900,212 $ 3,698,047 Major Product Lines: HVAC equipment 70 % 68 % 70 % 68 % Other HVAC products 27 % 29 % 27 % 28 % Commercial refrigeration products 3 % 3 % 3 % 4 % 100 % 100 % 100 % 100 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 Nine Months Ended 2020 2019 2020 2019 Basic Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 106,489 $ 83,480 $ 223,569 $ 208,672 Less: distributed and undistributed earnings allocated to non-vested 9,146 6,973 19,178 17,326 Earnings allocated to Watsco, Inc. shareholders $ 97,343 $ 76,507 $ 204,391 $ 191,346 Weighted-average common shares outstanding - Basic 35,099,871 34,755,627 35,046,156 34,544,425 Basic earnings per share for Common and Class B common stock $ 2.77 $ 2.20 $ 5.83 $ 5.54 Allocation of earnings for Basic: Common stock $ 90,197 $ 70,836 $ 189,364 $ 177,075 Class B common stock 7,146 5,671 15,027 14,271 $ 97,343 $ 76,507 $ 204,391 $ 191,346 Diluted Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 106,489 $ 83,480 $ 223,569 $ 208,672 Less: distributed and undistributed earnings allocated to non-vested 9,135 6,971 19,175 17,325 Earnings allocated to Watsco, Inc. shareholders $ 97,354 $ 76,509 $ 204,394 $ 191,347 Weighted-average common shares outstanding - Basic 35,099,871 34,755,627 35,046,156 34,544,425 Effect of dilutive stock options 137,151 33,328 62,887 25,294 Weighted-average common shares outstanding - Diluted 35,237,022 34,788,955 35,109,043 34,569,719 Diluted earnings per share for Common and Class B common stock $ 2.76 $ 2.20 $ 5.82 $ 5.54 Anti-dilutive stock options not included above 3,750 183,083 27,755 220,013 |
OTHER COMPREHENSIVE INCOME (L_2
OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 Nine Months Ended 2020 2019 2020 2019 Foreign currency translation adjustment $ 5,514 $ (3,038 ) $ (6,592 ) $ 7,264 Unrealized (loss) gain on cash flow hedging instruments (570 ) 351 1,297 (1,093 ) Income tax benefit (expense) 154 (96 ) (349 ) 295 Unrealized (loss) gain on cash flow hedging instruments, net of tax (416 ) 255 948 (798 ) Reclassification of gain on cash flow hedging instruments into earnings (697 ) (191 ) (946 ) (742 ) Income tax expense 188 51 255 200 Reclassification of gain on cash flow hedging instruments into earnings, net of tax (509 ) (140 ) (691 ) (542 ) Other comprehensive income (loss) $ 4,589 $ (2,923 ) $ (6,335 ) $ 5,924 |
Schedule of Accumulated Other Comprehensive Loss | The changes in each component of accumulated other comprehensive loss, net of tax, were as follows: Nine Months Ended September 30, 2020 2019 Foreign currency translation adjustment: Beginning balance $ (38,599 ) $ (46,604 ) Current period other comprehensive (loss) income (4,349 ) 4,732 Ending balance (42,948 ) (41,872 ) Cash flow hedging instruments: Beginning balance (451 ) 636 Current period other comprehensive income (loss) 568 (479 ) Reclassification adjustment (414 ) (325 ) Ending balance (297 ) (168 ) Accumulated other comprehensive loss, net of tax $ (43,245 ) $ (42,040 ) |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The table below presents the allocation of the total consideration to tangible and intangible assets acquired and liabilities assumed from the acquisition of PPI based on the respective fair values as of August 1, 2019: Cash and cash equivalents $ 4,299 Accounts receivable 30,719 Inventories 45,491 Other current assets 135 Property and equipment 2,544 Operating lease right-of-use 19,072 Goodwill 9,884 Intangibles 19,000 Other assets 299 Accounts payable (11,079 ) Accrued expenses and other current liabilities (13,038 ) Operating lease liabilities, net of current portion (14,100 ) Total $ 93,226 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 Nine Months Ended 2020 2019 2020 2019 (Loss) gain recorded in accumulated other comprehensive loss $ (570 ) $ 351 $ 1,297 $ (1,093 ) Gain reclassified from accumulated other comprehensive loss into earnings $ (697 ) $ (191 ) $ (946 ) $ (742 ) |
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 September 30, 2020 December 31, 2019 September 30, 2020 December 31, 2019 Derivatives designated as hedging instruments $ — $ — $ 394 $ 944 Derivatives not designated as hedging instruments 6 — — 63 Total derivative instruments $ 6 $ — $ 394 $ 1,007 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 $ 6 $ — $ 6 $ — Equity securities Other assets $ 442 $ 442 $ — $ — Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 394 $ — $ 394 $ — Total Fair Value Measurements Balance Sheet Location Level 1 Level 2 Level 3 Assets: Equity securities Other assets $ 402 $ 402 $ — $ — Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 1,007 $ — $ 1,007 $ — |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) | Sep. 30, 2020Entity |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of joint ventures | 3 |
Summary of Disaggregated Revenu
Summary of Disaggregated Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues from product lines, percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Revenues | $ 1,536,671 | $ 1,394,915 | $ 3,900,212 | $ 3,698,047 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,391,340 | 1,232,564 | 3,517,533 | 3,258,283 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 91,429 | 85,422 | 218,687 | 222,429 |
Latin America and Caribbean | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 53,902 | $ 76,929 | $ 163,992 | $ 217,335 |
HVAC Equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from product lines, percentage | 70.00% | 68.00% | 70.00% | 68.00% |
Other HVAC Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from product lines, percentage | 27.00% | 29.00% | 27.00% | 28.00% |
Commercial Refrigeration Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from product lines, percentage | 3.00% | 3.00% | 3.00% | 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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net income attributable to Watsco, Inc. shareholders | $ 106,489 | $ 83,480 | $ 223,569 | $ 208,672 |
Less: distributed and undistributed earnings allocated to non-vested restricted common stock | 9,146 | 6,973 | 19,178 | 17,326 |
Earnings allocated to Watsco, Inc. shareholders - Basic | $ 97,343 | $ 76,507 | $ 204,391 | $ 191,346 |
Weighted-average common shares outstanding - Basic | 35,099,871 | 34,755,627 | 35,046,156 | 34,544,425 |
Basic earnings per share for Common and Class B common stock | $ 2.77 | $ 2.20 | $ 5.83 | $ 5.54 |
Net income attributable to Watsco, Inc. shareholders | $ 106,489 | $ 83,480 | $ 223,569 | $ 208,672 |
Less: distributed and undistributed earnings allocated to non-vested restricted common stock - Diluted | 9,135 | 6,971 | 19,175 | 17,325 |
Earnings allocated to Watsco, Inc. shareholders - Diluted | $ 97,354 | $ 76,509 | $ 204,394 | $ 191,347 |
Weighted-average common shares outstanding - Basic | 35,099,871 | 34,755,627 | 35,046,156 | 34,544,425 |
Effect of dilutive stock options | 137,151 | 33,328 | 62,887 | 25,294 |
Weighted-average common shares outstanding - Diluted | 35,237,022 | 34,788,955 | 35,109,043 | 34,569,719 |
Diluted earnings per share for Common and Class B common stock | $ 2.76 | $ 2.20 | $ 5.82 | $ 5.54 |
Anti-dilutive stock options not included above | 3,750 | 183,083 | 27,755 | 220,013 |
Common Stock | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Earnings allocated to Watsco, Inc. shareholders - Basic | $ 90,197 | $ 70,836 | $ 189,364 | $ 177,075 |
Class B Common Stock | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Earnings allocated to Watsco, Inc. shareholders - Basic | $ 7,146 | $ 5,671 | $ 15,027 | $ 14,271 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | Sep. 30, 2020 | Sep. 30, 2019 |
Earnings Per Share [Line Items] | ||
Class B common stock conversion, number of shares | 2,576,570 | 2,576,336 |
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 | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Components Of Other Comprehensive Income Loss [Line Items] | ||||||||
Foreign currency translation adjustment | $ 5,514 | $ (3,038) | $ (6,592) | $ 7,264 | ||||
Unrealized (loss) gain on cash flow hedging instruments | (570) | 351 | 1,297 | (1,093) | ||||
Income tax benefit (expense) | 154 | (96) | (349) | 295 | ||||
Unrealized (loss) gain on cash flow hedging instruments, net of tax | (416) | 255 | 948 | (798) | ||||
Reclassification of gain on cash flow hedging instruments into earnings | (697) | (191) | (946) | (742) | ||||
Income tax expense | 188 | 51 | 255 | 200 | ||||
Reclassification of gain on cash flow hedging instruments into earnings, net of tax | (509) | (140) | (691) | (542) | ||||
Other comprehensive income (loss) | $ 4,589 | $ 8,356 | $ (19,280) | $ (2,923) | $ 4,652 | $ 4,195 | $ (6,335) | $ 5,924 |
Schedule of Accumulated Other C
Schedule of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | $ (39,050) | |
Ending balance | (43,245) | $ (42,040) |
Foreign Currency Translation Adjustment | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | (38,599) | (46,604) |
Current period other comprehensive income (loss) | (4,349) | 4,732 |
Ending balance | (42,948) | (41,872) |
Cash Flow Hedging Instruments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | (451) | 636 |
Current period other comprehensive income (loss) | 568 | (479) |
Reclassification adjustment | (414) | (325) |
Ending balance | $ (297) | $ (168) |
Purchase of Ownership Interes_2
Purchase of Ownership Interest from Joint Venture - Additional Information (Detail) - Homans Associates II LLC [Member] $ in Thousands | May 31, 2019USD ($)Location |
Business Acquisition [Line Items] | |
Additional ownership interest acquired in subsidiary | 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 | 17 |
Investment in Unconsolidated _2
Investment in Unconsolidated Entity - Additional Information (Detail) $ in Thousands | Apr. 22, 2019USD ($) | Jun. 29, 2018USD ($) | Jun. 21, 2017USD ($)Location | Sep. 30, 2020board-member | Sep. 30, 2019USD ($) |
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] | |||||
Total ownership interest | 38.10% | 36.30% | 34.90% | ||
Investment in unconsolidated entity | $ 4,940 | $ 3,760 | $ 63,600 | ||
Contribution to investment in unconsolidated entity by controlling interest | 3,952 | 3,008 | 50,880 | ||
Proceeds from non-controlling interest for investment in unconsolidated entity | $ 988 | $ 752 | $ 12,720 | ||
Number of board members that can be appointed based on ownership | board-member | 2 | ||||
Ownership percentage needed for right to purchase up to 100% | 85.00% | ||||
Total number of board members | board-member | 6 | ||||
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 |
Acquisitions - Schedule of Reco
Acquisitions - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Aug. 01, 2019 |
Business Acquisition [Line Items] | |||
Operating lease right-of-use assets | $ 218,884 | $ 223,369 | |
Peirce Phelps PPI [Member] | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 4,299 | ||
Accounts receivable | 30,719 | ||
Inventories | 45,491 | ||
Other current assets | 135 | ||
Property and equipment | 2,544 | ||
Operating lease right-of-use assets | 19,072 | ||
Goodwill | 9,884 | ||
Intangibles | 19,000 | ||
Other assets | 299 | ||
Accounts payable | (11,079) | ||
Accrued expenses and other current liabilities | (13,038) | ||
Operating lease liabilities, net of current portion | (14,100) | ||
Total | $ 93,226 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) $ in Thousands | Nov. 26, 2019USD ($)Locationshares | Aug. 01, 2019USD ($)Locationshares | Apr. 02, 2019USD ($)Locationshares | Sep. 30, 2019USD ($) |
Business Acquisition [Line Items] | ||||
Proceeds from non-controlling interest for Business Acquisition | $ 17,000 | |||
N&S Supply of Fishkill, Inc | ||||
Business Acquisition [Line Items] | ||||
Number of locations in which the company operates | Location | 7 | |||
Cash consideration | $ 12,000 | |||
Stock issued for acquisition | shares | 22,435 | |||
Fair value of equity shares issued | $ 4,032 | |||
Number of years goodwill is deductible for tax purposes | 15 years | |||
Goodwill Acquired | $ 2,644 | |||
Peirce Phelps PPI [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of locations in which the company operates | Location | 19 | |||
Business combination recognized identifiable assets acquired and liabilities assumed net | $ 85,000 | |||
Cash consideration | $ 10,000 | |||
Stock issued for acquisition | shares | 372,543 | |||
Fair value of equity shares issued | $ 58,344 | 58,638 | ||
Proceeds from non-controlling interest for Business Acquisition | 17,000 | |||
Goodwill and intangibles acquired | 28,884 | |||
Intangible assets acquired | $ 19,000 | |||
Number of years goodwill is deductible for tax purposes | 15 years | |||
Goodwill Acquired | $ 9,884 | |||
Peirce Phelps PPI [Member] | Customer Relationships [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | $ 5,500 | |||
Amortization period | 18 years | |||
Peirce Phelps PPI [Member] | Trade Names And Distribution Rights [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | $ 13,500 | |||
Dunphey Associates Supply Co [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of locations in which the company operates | Location | 7 | |||
Cash consideration | $ 16,758 | |||
Stock issued for acquisition | shares | 50,952 | |||
Fair value of equity shares issued | $ 6,891 | $ 7,450 | ||
Goodwill and intangibles acquired | 8,974 | |||
Intangible assets acquired | $ 5,300 | |||
Number of years goodwill is deductible for tax purposes | 15 years | |||
Dunphey Associates Supply Co [Member] | Customer Relationships [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | $ 2,800 | |||
Amortization period | 15 years | |||
Dunphey Associates Supply Co [Member] | Trade Names And Distribution Rights [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired | $ 2,500 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Apr. 10, 2020 | Dec. 31, 2019 | Dec. 05, 2018 |
Debt Instrument [Line Items] | ||||
Borrowings under revolving credit agreement | $ 668 | $ 155,700 | ||
Maximum capacity under revolving credit agreement | $ 560,000 | $ 500,000 |
Impact from Foreign Exchange De
Impact from Foreign Exchange Derivative Instruments Designated as Cash Flow Hedges (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
(Loss) gain recorded in accumulated other comprehensive loss | $ (570) | $ 351 | $ 1,297 | $ (1,093) |
Foreign Currency Forward Contracts | Cash Flow Hedge | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
(Loss) gain recorded in accumulated other comprehensive loss | (570) | 351 | 1,297 | (1,093) |
Gain reclassified from accumulated other comprehensive loss into earnings | $ (697) | $ (191) | $ (946) | $ (742) |
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 | Sep. 30, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Derivative instruments, assets derivatives | $ 6 | |
Derivative instruments, liabilities derivatives | 394 | $ 1,007 |
Derivatives Designated as Hedging Instruments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative instruments, liabilities derivatives | 394 | 944 |
Not Designated as Hedging Instrument, Economic Hedge [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative instruments, assets derivatives | $ 6 | |
Derivative instruments, liabilities derivatives | $ 63 |
Derivatives - Additional Inform
Derivatives - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Foreign Currency Forward Contracts | Cash Flow Hedge | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Notional value of derivatives | $ 11,000,000 | $ 11,000,000 | ||
Contract maturity period | one year or less | |||
Contract expiring terms | 2021-01 | |||
Maximum length of time hedged in cash flow hedge | 12 months | |||
Pre-tax gain to be reclassified into earnings within the next 12 months | 682,000 | $ 682,000 | ||
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 | 4,600,000 | $ 4,600,000 | ||
Contract expiring terms | 2020-10 | |||
(Loss) gain from foreign currency forward and option contracts not designated as hedging instruments | $ (454,000) | $ 128,000 | $ 57,000 | $ (175,000) |
Assets and Liabilities Carried
Assets and Liabilities Carried at Fair Value Measured on Recurring Basis (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Other Current Assets | ||
Assets: | ||
Derivative financial instruments | $ 6 | |
Other assets | ||
Assets: | ||
Equity securities | 442 | $ 402 |
Accrued expenses and other current liabilities | ||
Liabilities: | ||
Derivative financial instruments | 394 | 1,007 |
Fair Value Measurements, Level 1 | Other assets | ||
Assets: | ||
Equity securities | 442 | 402 |
Fair Value Measurements, Level 2 | Other Current Assets | ||
Assets: | ||
Derivative financial instruments | 6 | |
Fair Value Measurements, Level 2 | Accrued expenses and other current liabilities | ||
Liabilities: | ||
Derivative financial instruments | $ 394 | $ 1,007 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Stockholders Equity Note [Line Items] | ||||
Shares withheld as payment for tax withholdings related to share based compensation, market value | $ 2,299 | $ 1,528 | ||
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 | $ 1,265 | $ 535 | $ 2,299 | $ 1,518 |
Shares withheld as payment for tax withholdings related to share based compensation, shares | 5,361 | 3,231 | 11,693 | 9,824 |
Common Stock | Stock Option | ||||
Stockholders Equity Note [Line Items] | ||||
Net proceeds from the sale of Common stock | $ 6,573 | $ 3,986 | $ 11,978 | $ 6,229 |
Shares withheld as payment for tax withholdings related to share based compensation, market value | $ 1,490 | $ 134 | $ 2,343 | $ 134 |
Shares withheld as payment for tax withholdings related to share based compensation, shares | 6,582 | 799 | 11,455 | 799 |
Common Stock | Employee Stock Purchase Plan [Member] | ||||
Stockholders Equity Note [Line Items] | ||||
Net proceeds from shares purchased under ESPP | $ 401 | $ 418 | $ 1,229 | $ 1,251 |
Common Stock | Class B Common Stock | ||||
Stockholders Equity Note [Line Items] | ||||
Cash dividends paid per share of Common and Class B common stock | $ 1.775 | $ 1.60 | $ 5.15 | $ 4.80 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Line Items] | ||
Self-insurance reserves | $ 5,249 | $ 3,062 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Greenberg Traurig, P.A. | |||||
Related Party Transaction [Line Items] | |||||
Amount payable to related party | $ 28 | $ 28 | |||
Related Party Transaction | 28 | $ 175 | 28 | $ 175 | |
Carrier and Its Affiliates | Supplier Concentration Risk | |||||
Related Party Transaction [Line Items] | |||||
Amount payable to Carrier and its affiliates, net of receivables | 106,000 | 106,000 | $ 86,000 | ||
Revenues from sales to Carrier and its affiliates | $ 27,000 | $ 24,000 | $ 82,000 | $ 68,000 | |
Carrier and Its Affiliates | Supplier Concentration Risk | Cost of Goods, Total | |||||
Related Party Transaction [Line Items] | |||||
Percentage of purchases from key suppliers | 65.00% | 60.00% | 62.00% | 61.00% |