Watsco, Inc.
2665 South Bayshore Drive, Suite 901
Miami, Florida 33133
April 29, 2019
VIA EDGAR
United States Securities and Exchange Commission
Division of Corporate Finance
Office of Manufacturing and Construction
100 F Street, N.E.
Washington, D.C. 20549-7010
Attention: Mindy Hooker
Anne McConnell
RE: | Watsco, Inc. |
Form 8-K Filed on February 14, 2019
Form 10-K for the Fiscal Year Ended December 31, 2018
Filed February 28, 2019
File No. 1-05581
Dear Ms. Hooker and Ms. McConnell,
On behalf of Watsco, Inc., a Florida corporation (the Company), the following response is to the comment letter, dated April 17, 2019 (the Comment Letter), received by the Company from the staff (the Staff) of the Securities and Exchange Commission (the SEC) concerning the Companys Form 10-K for the year ended December 31, 2018 and Form 8-K filed with the SEC on February 14, 2019.
For ease of reference, we have reproduced the text of the Staffs comments in bold italicized face, followed by the Companys responses. In the responses below, references to we, our, and us refer to the Company.
Form 8-K Filed on February 14, 2019
Exhibit 99.1, Page 2
1. | We note you present bullets related to the growth of EPS and net income under full year 2018 results and fourth quarter results that quantify changes relative to the comparative periods; however, it appears to us these quantified changes actually relate to comparisons of GAAP measures in the current periods and non-GAAP measures in the comparative periods, as indicated in the related footnotes. It appears to us these bullets are not accurate and do not |
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appear to comply with our response to Question 102.10 of the C&DIs related to Non-GAAP Financial Measures. To the extent applicable, please revise future filings to ensure your disclosures are accurate and comply with our response to Question 102.10 or explain why you believe the current presentation is appropriate. |
Companys Response:
We acknowledge the Staffs comment and respectfully advise the Staff that non-GAAP measures in future filings will be presented with the most directly comparable GAAP measure, which will be given equal or greater prominence to ensure our disclosures comply with the Staffs response to Question 102.10 of the C&DIs related to Non-GAAP Financial Measures.
Form 10-K for the Fiscal Year Ended December 31, 2018
Exhibit 13 Managements Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations, Page 5
2. | We note you disclosed that the increase in same-store revenues from 2017 to 2018 was primarily due to realization of price increases, demand for the replacement of residential and commercial HVAC equipment and a higher mix of high-efficiency air conditioning and heating systems, which sell at higher unit prices. We also note you disclosed in your 2018 annual earnings release that sales growth in 2018 reflects HVAC equipment unit growth, price increases and a richer mix of high-efficiency systems as well as margin expansion in several markets offset by a profit decline in Florida-based locations on slower sales growth and a profit decline in Latin America on lower sales. To the extent applicable, please revise future filings to: |
| Quantify the impacts of changes in price, changes in volume, and changes in sales mix on revenues during each period presented; and |
| Quantify and discuss the reasons for differences in changes in regional sales within the United States, to the extent material and necessary to fully understand changes in revenues during each period presented. |
Companys Response:
We acknowledge the Staffs comment and respectfully advise the Staff that, to the extent applicable, in our future filings we will quantify the impacts of changes in price, volume, and sales mix on revenues during each period presented and quantify and discuss the reasons for differences in changes in regional sales within the United States, in each case to the to the extent material and necessary to fully understand changes in revenues during each period presented.
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If you or any other member of the Staff should have any further comments or questions regarding this response, please do not hesitate to contact the undersigned at (305) 714-4115.
Sincerely,
Watsco, Inc.
By: | /s/ Ana M. Menendez | |
Ana M. Menendez Chief Financial Officer |
cc: Drew M. Altman, Esq., Greenberg Traurig, P.A.
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