WSO - Earnings call transcript Q3 2024

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Operator

Good day, and welcome to the Watsco Third Quarter 2024 Earnings Conference Call. [Operator Instructions]

Also, please be aware that today's call is being recorded. I would now like to turn the call over to Albert Nahmad, CEO of Watsco. Please go ahead, sir.

Albert Nahmad

morning. Good third our earnings quarter to call. Welcome is this Albert Nahmad, CEO. and Chairman And with is And A.J. me Johnston; Paul President; Logan; Nahmad, Barry and Rick Gomez.

our for as from statements. sales laws various laws. Before has the safe harbor made forward-looking start usual results the of This the net statement. and we these conference pursuant forward-looking to statements record regulations may defined Watsco and SEC Ultimate quarter. produced provisions by income that are cautionary call differ materially

and driven stability are a said of fourth unit signs quarter October by to shown have October up markets We off the good driven and sales meaningful is Our sales growth. digits again. it up by unit with mid-single start growth. mid-single digits meaningful

data We also believe we have industry shipment and gained on share trends. based

flow generated year, remains investments also balance sheet to cash pristine in growth. have our record in and condition enable this We

equipment primary with new the of communicated to and fairly customers. large press with As our regaining needed in of one us. we are mode to OEMs, business make a and recovery coinvesting to in We're our investments release, supplier them accelerating

on. Moving

We produce HVAC -- Greater of e-commerce and to in most of the continue continues continue [indiscernible] our growing use a platforms nonusers. sales market helped grow X.X contractors. share our achieve by gains. contractors users adoption now platforms technology has to number make faster and active innovative investments for industry's Annualized than billion,

of contractors. and expand Thus XX% XX,XXX platform, sales approximately contractors billion increase to far, XX% close Air last digital and OnCall contractor a growth XXXX, presented year. Watsco's is households, $X.X over continue sales which That's [indiscernible], increase in for generate our On our a customers. for generated to

change leveraging optimize mandated for been of business. also good our has technology new regulatory good in beginning the are federally launch XXXX. our for and to Historically, our industry We AQL systems the platforms

trend average penetration are to electrification mandates increased of ductless heat than both ability alternative systems growth has heating higher of the term they energy The driven efficiency or systems, catalyst efficient to effect, systems. fossil at also providing sales went with energy prices businesses which business for XXXX, assistance. higher older upgrade system. as fuel conventional In into of the contractors and sold conventional unit provide HDA has the homeowners been systems The growing pump

transition opportunity. And the us, the now look though X is forward we upon and

our to Turning sheet. balance

have we position, cash investment no and to supports make. choose strong We debt support, that most of to a our

turns. this record have we we our are still with year, flow inventory produced Although cash not satisfied

[indiscernible]. continuously improve with our OEM and We to are working our methodology improving community our inventory

We have is also SG&A modest to geographical But a made progress great in there as the more evidenced improving operating network in summary, we year-over-year. operate efficiency markets. in In across industry and do. change attractive our by

leaders. innovative empowers We culture local a platforms HVAC have contractors. proven technology the entrepreneurial most industry's We for that possess

have our We capital our And finally, industry. balance high-growth sheet fragmented in scale investments highly to and leading product access [indiscernible] market. future diversity, in in and particularly

in if Miami us. more, visit always, an see and have interest you As learning please

it. With about let's to an we that, Q&A. you will transforming enjoy go are We now and telling industry, on

Operator

will take which this with Manthey At our Instructions] David [Operator Baird. question, we from come time, will first

David Manthey

from unwinding in hurricanes, to Helen the have Tampa. which the us I question about hard you pretty you positives particularly might potential and Helen, is negatives Milton? hit First ask and/or about here talk Could see

Albert Nahmad

of one you what you can least get us Do that, tell Paul? you at if you to think? to see take Let's want do

Paul Johnston

also another are that the Helene, with rush and somebody down then didn't initial up. then days can else Milton. can days them it now. severely pick couple back branch of a yes, It came shut couple to as repair had started, and is we had But door us quickly. going shut for storm. impact October. out in down And at really get the our obviously, we we're an we everything Sure, seeing I for other least of as normal through components Most . Milton of for so

get lot done. more a it the our However, didn't into damage North -- dramatically. Carolina, but up we've slowed Georgia you And really down, that when sales area, was us impact it severe

Barry S. Logan

an just disrupt growing for the market. hurricanes whole said impact Florida is the I've And the local to not for in Yes, reverse material years markets necessarily that for true not and in being if Watsco those scale. markets national add and many typically good it's business years to for that, XX up may and have there's opportunity, on

I it -- materiality year over needs be that's nonequipment. of equipment this next industry, obviously. But and play think to or the billion billion, when most I've follows of $XX portion year, of insurance $XX sometime that The is a about and things, characterized that talk it they obvious least investment out time. always $XX that at question and these thought that our is billion, how

David Manthey

Okay.

So your ripped but -- biggest particular, -- the coast. and in Florida Helen, though clearly market, even whole is up

and snapback what view you're saying? it's October storm growth as from saying in the just activities, You're shouldn't mid-single-digit immaterial, we fairly a temporary

Barry S. Logan

quarter No. -- Helene for the of in or part October. to week the It's relative that last not. either of nothing Absolutely to is first a and material disruption the benefit

Paul Johnston

next, -- insurance days. is As XX within in going XX kick the Barry to say, indicated, let's insurance when to the

thing don't sold really with. [indiscernible] equipment motor compressors, Watsco. sold. of type we to the What we see see to the that start So is

David Manthey

-- your in you with then just I feel . medium And about good but one came term, the you a that light. OEMS, a margin, Yes. you still little Great. know XX%. bit had gross major discussed for that of reason on your here

Unknown Executive

much yes. the ambition than and In short term the I'll jump higher answer in. is that. The is

achieve I we'd think day, we've one about talked publicly like to XX%.

much high are investing we're have a engines we and up our So [indiscernible] have focus revved very there and expectations. and

Barry S. Logan

consistent overall quarter. think analysis, magic words there's this pretty the and and are was in I mix Yes, Dave, the obviously, price price

product far for mix. this Mix and that's There's the are mix, a quarter. So really item. so word end the year term, market really, mix. And broad mix, there's discussion is there's a mix, brand there's not variations mix this customer geographic is there's where

So a in what spent XX% to [indiscernible] quarter, if us, weight you bit if just a those essentially this you short-term in I bit if conversations. minutes products I on front little consider an really look with said margin will are of factors, it's the the reprice weight transition opportunity next I of months. but those what and market to basically XX be explaining little forward, over to of think And new I go XX

a all we're where this call, stage is this tremendous to of So you, very our critical OEMs who with listen to making investments. along

overall going mix to is critical the and going Inventory features pricing, mix next months over next completely the over cycle XX benefits be to to and is months drive XX year marketing, margin. --

now to this and I I'll where in tried volumes terms release, and of like longer-term convey of on that? will think and year-to-date, positive one the ask and units. we unit overall are positive I at press the messages the season a growth positive and question rates overall it's volumes that things is, selling And stability in unit to convey the average. for kind conventional and is somebody or of are quarter, we extent are our looked positive they in

I in optimism some opportunity where that's well front we in of if have we're us, So to try the doing. consider what stability as as

Operator

Tommy will next come Moll our question Stephens. And with from

Thomas Moll

I X-part to you of wanted you the question it's press OEM some X this start in release your co-investment the here. of a described -- alongside on And morning partners.

prompted it calibrate the and out this did change you call part as about detail. this anything look this of where And forward, fade? discussion First to enhanced is there how is expectations on sort something Did with quarter substantial do our last item? can that then progress ultimately morning you you since

Albert Nahmad

Terrific question. to wants A.J. Barry, answer, [indiscernible]. who Paul,

Barry S. Logan

Yes.

of it's you reconcile $XXX if first But in talked reestablishing -- about to an disclosures. at of idea the I year like insight kind are well. market that back critically we just recovering collaborative important say markets And ago, think and that these share, third look share. we our and revenue get changed California, A internally. the Texas, in huge at year And because growing go million the revenue a the range and We go to spirit, discussions it's later, mean of quarter whatever needed disruptions you'll are to how of event. an we time point. felt anything where look I I isolated Carolinas market wouldn't at business, the into markets. year-to-date. add these are volume, $XXX I'll have as it was million, as growing Florida,

figure growth better. when where our this in there's, we scorecard rates is a co-investment. We you. OEM give to overall much the in year-to-date. has product is and that And we And try the particular if growth not detail partner and to the going about too mix in for a this press unit products. I'm there product, that is talk than there there's it the this on of more discussion to again, term those outpaced price with Business work release And the just And group collaboration, out. intentionally for sure, pricing, competitive answering use

at words, that offense buying to cost and other street thought experience us, play scorecard we've this and a of the In time. chose with but to more we just back is we But the incentives get that from was done. put reconcile and and shared with other kind is customers the shared to somebody it opportunity, a OEM. new important that's go And the what not on giving ahead that our year-to-date, same

believe lingering your it's Now and new as some with the products more that would chance question, as kind economics in new economics of of those a impact, I part we to lingering of OEMs. kind recalibrate looking dissipates, for the And working so again, set today will is of the all quarter. our those come to far complete all fourth [indiscernible] next in, on needless say forward. there's a And truly of impact, when second year which are products

Aaron Nahmad

Yes. -- partner. that is long I'll relationship. partner truly just a time long-time here stress a a our OEM They're

partnership them, such been. collaboration I it's think nice and will now a successful be It have with a wonderful has a partner. absolutely to

Thomas Moll

dollars the improve ask about seeing? prebuy XXXA quarter, I were the at of inventory inventory dynamics right. to we're we talked turns that which [indiscernible], may some any up and you second this also typical, is seeing. what's All is prebuy versus that there just to but And and be view note about hoping inventory a the wanted point?

Paul Johnston

is of OEMs of manufacture to able the XXX and prebuy has a to each the come that the end the for on in completed to at least be XXX inventory up be year. program the it fill with have one as Yes, they the by

could going they time, ready first move inventory if tapering And down. quickly At for asked least should our of at the so inventory. XXXA some we that to that's that so the down. same We're selling the be bringing into can the them in [indiscernible] be have inventory taper the quarter,

don't So see a I inventory. our the fluctuation with much in next of quarter

Rick Gomez

add -- their that that, products Yes. are when to and just call Tommy, to I received. we those have last OEMs had get would most starting

proportion think then next probably greater sell-through of forward picks And so really two, around diminishes it or as percentage quarter middle as of in we sometime cadence look quarter balance or looks you and our seasonal probably normal as next a the Paul's and to over this through XXXA sheet inventory [indiscernible] And shipments the go sales ATL I up just transition. the becomes seasonality next of as different its well. a point two about year,

Operator

our Blair. Ryan come question with from Merkel And William will next

Ryan Merkel

start. on ask October to to wanted Just

growth. up is you You said growth Can pricing mid-single-digit of was assumption pricing maybe is X%, clarify what kind because meaningful unit running and X%. just my the improvement still

do the So back if bridge popping digits volumes positive? how are we mid-single

Barry S. Logan

that. I'll cover

about you careful. say of can side is set be which to business other it, this a it. what growth. data. meaningful let's spin see let's unit comment just we So on said, it's than specifics as way much the because critical and it is in we've to I'll going to analytical like to talk I'm not But give October, for

were So both were products, ducted which which for units double the products, that quarter, up X%. digits. actually overall declined And X% includes ductless up and

been Carriers international. investments It's there's and it's very paying year-to-date doing a brands other are and our -- [indiscernible] both sell an just and in ductless XX-month Gree off that well, where have So trend. trend we and well. in brands very Ductless probably domestic

investment, there's story units well that's that bit So of a inside a of number, with our our business Ductless doing products.

And alluding in all group to nothing X% products. do the in down what X% product and we're that to volumes for prices is this it. a in the in mix, has with customer But maybe stick down brand price earlier more product of ducted selling at I curious bit market quarter. I -- average terms were is If That's is price and of mix, that interested risk again, I'm conducted or was mix. where to and deducted what look deflation there's little weight of if call, in price a mix

are year year-to-date, the units up -- for X%. For

year. pricing unitary pricing X%. up And OEMs the kind X%. sense of earlier up is like pricing to is because in And makes [indiscernible] the that's launched me

going all of about honestly, price. price change. same in all where here, from contributed the equation. look that's quite has not margins our And a year else's the know it. of We of anything to thing And I'm I of kind color. that's And said kind anybody they've know this the think they the and kind glad to really to look absence gross about we way any welcome is

Ryan Merkel

supplies that's then down, you Well, And mix then. that's XX%. parts yes, sounds also That margins. gross bridge explains and and so the like for were It Okay. co-investment. then but didn't helpful. a back -- there's quarter, back to you this it occurring XQ Can element quantify we just to

back So XX% the what pieces? we get to just can are or

Rick Gomez

on Barry's to versus our heard and over all transactional any layer earlier, margin and that important I gross you mix where and me at But the relatively pricing of a have technology And say is . form invoice to our deployed price contribution year I with, are no answer the A.J. start distributor been in has field been is think bias a to consistent haven't margin is an is a most it's that's point this upward testament let think our we testament the leaders constant transactional think, yes. try That I our before to the margin. there's get there's doing that that some talked in which time. most to of you and about to basic margin, margin, work margin, been the is of subject. which can year that last

-- difference nonequipment and margin always about. between to basic then do and those we So transactional your growth so it's of some we've extent. rates with talked what on It's constant if firstly margin X that is And year. elements bridge weigh a in last will consistent overall equipment mix that

environment Secondly, been been residential does equipment, dollars rates rate, to it that influence profit we like a difference account it within because low have overall mix. is growth We in mid-single-digit higher. that your but in between and commercial has commercial. higher type for and growth has single, weigh and that Residential

to in construction on right? to a little time you the tends it channel new particularly been for the tend has outpacing and residential at bit residential where a last two, true Thirdly, replacement, the has in that end It's quarter, the new and seasonal year things little done, been builder of replacement. more third market add-on that you have or have a lot weigh and period construction a gets a bit, than

housing You data you look at can to that. the completion tell

in progressive, in and more growth or sophisticated. And that then And faster to rates. is is customer larger, base, if simply do that the just tech-enabled his smaller in what see growing is of mix, segment differences this element which her data less than hardest that you customer But untangle lastly some our you we your is ways. see is counterpart more one customer

or year-to-date the profile and margin mix help X about So not different. that but that of elements a paragraph it, to those contextualize write looks X explain a are whole

started, where the last in transactional product that go with to back is which same all of I customer, same this is is point key I year. that margin, consistent very

Operator

Our Jeff next KeyBanc from question Hammond Markets. come will Capital with

Jeffrey Hammond

to transition? you OEM of new Just to there's their pricing kind as of as kind of kind just relative just hiccups [indiscernible] talk And with major of are this partners, what on you the product XX% seeing address your introductions, readiness, so you kind no XX%.

Paul Johnston

is part can to, of Yes, OEMs and is that that, talk among cover ready. of all I everybody we that that the

OEM in the [indiscernible]. consistently been and matter actually in When As one It's and has X% a we've is pricing quarter, low around been to comes started selling taken fact, XX%. of in their the fourth launch equipment digit, the started the double it range. double-digit pricing, to

to because total Some to have also situation And for going sold the adjusted we're quarter pricing that's system the It's XXX second wait a consumer a outdoor technically, until to that that each the it's but an able for the going not both. OEMs just to little do in line you bit situation offered, suppose be when now be to now unusual buy price is have new product past it's as going to where replace an find to out going indoor of be unusual the higher the they that exactly settles. to product opposed the are could that a the we've to install unit to and unit. to probably you're outdoor

be us not price units at some that more over going just idea it's single that all to at point, times. price. the So And [indiscernible]. to the firmly unit It's installed all for a it replaced also that's raising only large. it's the there not system once of various becomes the wonderful be are XXX But replacements well, that opportunity, and be the the for ATL we're have systems out to but right million spread to seems now, less out selling going also increase,

Jeffrey Hammond

us touch the like M&A follow-on versus matched environment. the this and effect quick just what as standard? you multiplier on that. just maybe It seems in gotten And that a PE in remind just on has the then general. the you're crowded more just just seeing then space And Okay. do you Can

Rick Gomez

here. it look, outside mean is to it. say -- this cadence from of longer that right no industry. more a about Jeff, that there's on do. always more the late. way think years. think predict would to subdued space still I in from and last focused to with a the different little And tackle bit I I you equity I things. X a M&A that There's is see very to can or don't bigger has it's -- as very it the And And fragmented M&A I is picture piece of was industry. X prevalent M&A the One of we're term, there's that's partnering what And lot a entrepreneurs. consolidating all relates an the private

We M&A culture -- element right help spirit that [indiscernible] of important. the transform very to want our business. cultural and will very, growth who We equity embrace is entrepreneurials their

then And So it's oftentimes one financial more today, forward so thing that a our and very incremental much cultural discussion. second the that platform discussions of would I the M&A same. I leads are hope technology is, a point than to going to essentially discussion, our opportunity

prospects. and years invested We've better different in capital. to understood years scale. more market has in been is access constant always had the What's last great understood, an had to now not if long-term been more always We've different equity today out over discussions it's things well leading always well with been platform and this in technology We've what the and XX I distribution. that have since We've think had we've had vendor always we've is Those culture. relationships. for X

that. help my some is So job to I of -- lead

company grow, out of of our with a lot the point I absolutely. $X.X want to dependent and speak we're more whole on And we it to in so disposal profitably internal I as some to can now, we at to not But and that a M&A levers future. have grow billion it, also will pride,

Aaron Nahmad

this is Rick, A.J.

they're ways cultural to your our your are multi and it businesses and a true, umbrella I capital discussions the family it all our leadership These and are and financial that business customers happy. to business. do of team resources be sorry, multifamily because part last and really people were these call if resources. you business. multi- has really leaders which cases, where helping fit years family good in families think branding they're we're many those what family. business, families than legacy joined those XX helping growing use it is And the if you but that be and being of -- be grow multigenerational have that runs for those the environment. about in you customers our And still forever, They're said retain the you about and thriving our, discussions both recruit often of your grow that's your They're faster back are X, all doing going the you it's sustainable businesses, can guys long-term [indiscernible] our equity technologies, you multigenerational all over motivated, team, are your saying, on these so and great for will. what would with and and . And about growth

And So fit. it fit, has seem be which we're they a to it's to be is what runs, home for. going a it is -- when

Operator

come [Operator from will Our next Instructions] Patrick Baumann with question JPMorgan.

Patrick Baumann

warmer year. actually this than for It's is it time up here of usually Yes.

something said to Barry back to Just quickly on units. maybe go wanted

Was not that [indiscernible] is that right? much, I that, year-to-date X%. a Just I is that you up said comment? think could. you assume total if maybe Or clarify unit up ducted

Barry S. Logan

Yes, clarify should I that.

suggest [indiscernible] is up double So is ducted overall, X%, is flat up would which digits. year-to-date in and

Patrick Baumann

helpful. That's

Barry S. Logan

at And look release. refined this really looking just performance in selling at our seasonal press even of we to our I so joint be season, more the like mentioned business. If I'm

join Let's third second, together, quarter.

no push analysis. pull to So aspect the there's and

were conducted combined quarter overall, up and season, up units So for the X%. X% second third

that's talk frame of So stability, we mind. about the when

Patrick Baumann

inventory? think that -- been you is end of your channel it -- to stable view the guys -- currently through Is And are you talked -- earlier, restocking Helpful. Okay. you inventory in about the then be have the of terms expect you I year.

Paul Johnston

pick channel November, and [indiscernible] December the in up XXX is they'll equipment, January. right which now Yes, up picking

a And the fourth first will sales. that pull It's of not quarter will, sales if kind restocking. second shipments so you forward, quarter, yes, into quarter first quarter it's its turn in

Aaron Nahmad

Right. XXX first Yes, barns, quarter. our that are as [indiscernible] is sold will not being industry barns Fortuna sell part, unit. the our them for we'll the products I what think sell unit, And we'll through, large we into with bringing a the can't so into replenish some has bringing included through replenish the of [indiscernible] --

Patrick Baumann

margin like in margin in Helpful. guess, And you hurt then for year-end? that fourth lift, there's improved the one a -- to on side. collaboration that third are Normally, you the somewhat factors I on back this quarter OEM gross holds mix, assume the I the investment seasonality that which, quarter, think, that from typically the because is Or reasonable like there in year?

Paul Johnston

see into volumes. we and mix to the lift colder higher -- should them have margins it's some heat higher we the start seeing obviously get which think more season. with I We more as furnaces, pumps,

would yes. going what So be is knowing -- say, quarter, weather I the in without . to fourth the

Operator

our question Wolfe with next Nigel Coe And Research. will come from

Nigel Coe

I is a to meant think this [indiscernible]. to cold according winter be

that's a it of help know then want you've sort be already -- bit should I it's taken. don't guys. to of lot grounds. you [indiscernible] So ground we've if to I a true, retread little

factor is of that price the a the there more mix Is about higher OEM tier discounting margin on, bit Just there earlier seems was especially of year, a gross talked at and at going [indiscernible]. the all support. like on you lapping levels? -- from and gross Is the in of some this margin, it some

Barry S. Logan

we The the if has listened the any I Rick's you important comments as no. a to transactional look answer margin material at think which change most composite, is it. to was metric,

saying what risk at not really exactly but -- product want, level been any I'm there's of it think, deflation, we a is not don't to means say, let's group. it's relative I So neutral factor

think Paul, only this and a it. but in So systems, sales into systems our has really came XX-plus you if the of into a not really you the the year, tier mix think, [indiscernible] XX, sometime process will, XX, the And subtle in have I more this, again, inventory it's been good higher late last existence and insight factor, year. I

think now. that efficiency in mandates some have of last kind happened [indiscernible]. of Paul, movement part business And energy broad I much layer more a condensed the of the into our maybe base you year

Paul Johnston

that greater standard Yes. time change It a SEER. the happens with efficiency SEER there's percentage standards a basically and federal in from industry XX they through is efficiency. a of towards efficiency roughly this energy the where with XX increased every government, And change, compression the moves we've to gone last

so as as that, high-efficiency the the compression where when did size a we definitely saw meaningful And they shrunk far equipment a in marketplace.

Nigel Coe

Okay. And That's ones couple a of then quick here. just helpful.

through this contractor, end And this? customers cetera. guys, do you're Just this obviously, XX,XX, of close you these XX before. are very the transition. AXL those the ready transitions been compare support, lot to ready on the transition, obviously, When et XX to you've think of a for the SEER, for they many you SEER, you [indiscernible] Are [indiscernible] -- do

Paul Johnston

They at is consumer probably coming be to the going think understand this. I don't for not what's them. ready really

a indicated out, change an earlier, a is like. of just system As be to a the think, sticker shock, change outdoor I going [indiscernible] the look going and for some they going of be to pricing to that's it's not see bit what consumers we once

the going on It's the the The XX% inside. transition. only is be also to just going in change system. I So entire The it's increase. go think more the price real pretty through units easily they're themselves, than to the contractors

to off. it's going the the if to then detects sort have leak, going home. that's a You're to going turn it that And any of there a detect refrigerant is into detector leak the in blower a motor

-- So and of component the indoor that have the That's the air. with still still same that, change. be old not basically. but we've the the it well a component is going different all to XXA in had [indiscernible] it's XXA, refrigerant as refrigerants, XXXA in going base the as it's XXX both it's itself is so the to did, going to refrigerant biggest contaminate Outside

Nigel Coe

Okay.

Okay. But it like sounds [indiscernible].

Aaron Nahmad

them and add our perspective, Yes, them job helping selling a big that space. with a to we technology in business why getting a et ready with think and from And and I that unparalleled there is cetera. a technical scale et from help it's need do what technology perspective products I'll to perspective business product out just with at think support they a figure And contractors And the customers them Watsco that get choose is sets support company. us do or and cetera, a apart. I backlog and reason then

Nigel Coe

Okay.

a may. just quick on that. in you I selling more said know Obviously, about the a extra know up if with I'm October. hurricanes got details great one, the bit little you've mid-singles. no But in got impact surprised I then Southeast. some news and Florida day And I Okay. I And October

some the there? base So some offsetting from is benefit [indiscernible] there off impact October my of hurricane from

Barry S. Logan

impact. it's had days Again, quarter, we down track and X Milton and last terms quarter. And X we Nigel, the to cents had this or we of dollars days hurricane something of or in for X the like X

material of Milton, had any pickup, and that been So relative again, by in I an think offset it's event. if terms, we not disruption with

markets, will -- these destruction markets, will using has and dollars I purposely that in what flow in flow. word flows. Nothing that's think those business that opportunity opportunity is insurance there's that immediate I'm there be gone the with once the is obvious once because penny a but destruction,

Aaron Nahmad

an important just quickly, point. report to want just also I

path helping that destruction that ability. speaking. accounted and we very much care relatively who these team members, to lot and for. have everybody We we're best [indiscernible] could in to is say homes out very and were help the happy our our a storms safe that came who had of And problems or those -- the of everybody their in are of about very thankful, are on we We employees with,

Operator

And our will Steve next Tusa question with from come JPMorgan.

C. Stephen Tusa

there kind at a product to have the question. little bit the call Just got on into to that's all a you stage? vest playing AXL a across industry? more visibility others, OEMs Do follow-up for this suppliers, closer the pricing just of complete not little your Is Pat's but than anybody I late the here.

Paul Johnston

pricing. pricing. that There's really now manufacturer's released or only every into visibility have we right X have Yes, not their fully X

sly the trying that think most price. -- their pricing most is for I timing little ask. probably that that off. think we going question to it's [indiscernible] of pricing hold how a part, is we've just the in. entire bit they're about the the [indiscernible] I this to they got be That's the release not But just or transition. throughout

C. Stephen Tusa

then and OEMs And think I where it? push are like, you at is cost similar a the here's I bit think as kind list just looking -- -- a how the mean, increase it negotiations like at do of of most like of pitching -- are as the Or new inevitable price let of looking -- versus are it them and customers are most price how they to hey, our which begin?

Paul Johnston

them of are they components most X the think I adding adding system new this very price we're to because about for itself. serious costs, are

the it's the will be XX%, due think probably [indiscernible] So hold around closer I XX%. to to XX% the to that range -- X% to I think going but I pricing think that,

C. Stephen Tusa

Yes.

discount what is bit So X% to a to previously had of they of the said. kind XX% a

Paul Johnston

I think right have little a but bit, out now. wait much. We'll find to that and [indiscernible] opinion not see and

Barry S. Logan

I market, we price perspective. to is our from let's maybe variations, want different Steve, those or OEM again, end But our that selling maybe X -- prices on there's we're intended you, price OEM depending the the remind I the variations $XX customer that closer the more $XX of market. end depending million, us, obviously, from customer, buy milllion on ironically, and and on that our on an question X,XXX market, perspective, an from is that price the SKU you're to reselling buy, asking mean, if say,

is analysis. over form an district or X so the when to technology art and this more us So helping And than years. raising margin allude X do and that, that's we last

years is where have ago. we technology much another or you to X transition this played the than has management, Snowflake gifted that's So capability has thing. had role that chance same if And in accomplish will, a X we its more

a to our market cost. condition, And need we our react we have to if OEMs react then to

is X So years. can in but benefited it's is X that fluidity last or hard why tell to the you predict, us why I this

C. Stephen Tusa

than on that point model take XX% more guess your stick the it and or a like to like into And whatever that. it's complicated Right. I is like spreadsheet a lot

Paul Johnston

all than as [indiscernible] to that to as as pricing. we it's that. [indiscernible] have A as not probably I was more it simple complicated the the price. and variable but wish simple you -- the lot because that market different segments

C. Stephen Tusa

one One last for it. Got you.

pretty had the on has a Just XQ. good commercial side, light everybody

bit in light of signs the slower peers there weakening it's back year a One the quarter. of on said in next the Any commercial? little of fourth fundamentals your for

Paul Johnston

of in strong. has pricing. demand, as still demand of we I the think improved, are double digit. think some reduction the availability commercial some we But as fairly as And remained the product up the far saw I some the

Operator

And I'd any like to Nahmad closing to question-and-answer for remarks. conference over this back concludes session. the our turn Albert

Albert Nahmad

it's quarter's hope you, and performance. good and be communicate you Once to numbers of here always again, next to will we for all the

you you thank So we to for And winter, us for why said as it's don't yourself. company. our your see earlier, come Miami Bye-bye. in down and interest

Operator

now The presentation. today's for concluded. you conference attending has Thank

may lines. You your now disconnect

Watsco (WSO) 23 Oct 242024 Q3 Earnings call transcript