Watsco Announces Completion Of Acquisition And 1999 Executive Appointments
Closing of Acquisition
Watsco announced that it has completed the acquisition of Heat, Inc., a wholesale distributor of heating and air conditioning products located in New England. Heat, Inc., together with Homans Associates, Inc., another New England-based HVAC distributor recently acquired by Watsco, establishes the Company as the largest wholesale distributor serving the New England market. The companies acquired had combined revenues of $61 million in 1998.
The purchase price, which was not disclosed, was paid in a combination of Watsco common stock and cash. The transaction is expected to be accretive to Watsco's annual earnings per share.
Executive Appointments
Albert H. Nahmad, Chairman and Chief Executive Officer, stated "Watsco's business has almost doubled in the last year and now exceeds $1 billion in revenues. Aggressive market-oriented strategies continue to produce cash flow from strong internal growth and, in combination with our our strong balance sheet, enables Watsco to further pursue acquisitions. Given the breadth and scope of our increasing size and future activities, it is necessary to evolve our management structure and add resources dedicated to the business development of Watsco's family of subsidiaries."
Accordingly, the Company announced today the appointment of three group vice presidents to its headquarters team. The group vice presidents have regional responsibility to develop market strategy and to assist in the execution of each subsidiary's growth plans. All three individuals have been promoted from within the Watsco organization.
Terrence Kelly, previously President of Baker Distributing Co., one of Watsco's largest and most profitable subsidiaries with 80 locations in seven southern states, is Group Vice President for Watsco companies operating throughout the Southeast.
Carole Poindexter, Baker's Executive Vice President and a 21-year industry veteran, will assume Mr. Kelly's duties as President of Baker.
Rick Young, previously President of Comfort Supply, Inc., one of Watsco's highest growth subsidiaries operating 31 branches throughout Texas and the mid-south, is Group Vice President for Watsco companies operating throughout the West, Southwest and New England. Thomas Bowden, Comfort Supply's Executive Vice President, will succeed Mr. Young as President of Comfort Supply.
Bill Hanesworth is Group Vice President for companies operating in the mid-west and mid-south United States. Mr. Hanesworth joined Watsco in July 1998 as Vice President - Business Development after running a highly successful HVAC distributor and a career in various management capacities with American Standard Companies Inc. (NYSE: ASD), a leading manufacturer of HVAC products.
In another development, Watsco announced that Manuel Perez de la Mesa, Vice President of Operations, has accepted the position of President and Chief Operating Officer with SCP Pool Corporation (NASDAQ: POOL), a distributor of pool equipment and related supplies. Mr. Nahmad said, "A chance to be chief operating officer of a public company does not come along that often and we wish Manny well. We appreciate his efforts and thank him for his contributions to Watsco."
Mr. Nahmad commented, "We are fortunate to have a wealth of talent within our organization to draw upon and fortify our headquarters staff as needed. Our focus on succession planning at our subsidiaries will also pay off and provide further opportunity and advancement potential for other key managers. Every acquisition Watsco makes further strengthens our organization."
Mr. Nahmad added, "Given the rapid growth that Watsco has achieved in the last several years, other resources have been added in the functional areas of information technology, human resources, logistics, working capital management, product procurement, risk management and treasury to improve and optimize our operations. These internal resources, when matched with the talent and historical success of our entrepreneurial managers in the individual markets, should prove to be a powerful combination for the continued expansion of operating margins and for our growth strategy."
Watsco is the nation's largest distributor of air conditioning, heating and refrigeration equipment and related products and is also the leading consolidator in the highly fragmented distribution segment of the HVAC/R industry. The Company's strategy is to expand its network of distribution locations across the country. The Company currently operates 323 locations serving customers in 29 states, primarily in the Sunbelt where air conditioning is a necessity, with annual revenues of over $1 billion. The Company is actively pursuing additional opportunities for further growth throughout the country.
This release contains forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additional information on factors that may affect the business and financial results of Watsco can be found in filings of Watsco with the Securities & Exchange Commission. All forward-looking statements should be considered in light of these risks and uncertainties.
