23% Increase In Earnings Per Share To 38 Cents

MIAMI, FLORIDA, July 20, 1999 -- Watsco, Inc. (NYSE : WSO) today reported its results of operations for the second quarter and six months ended June 30, 1999. Second Quarter Results Revenues for the quarter increased 22% to $331 million from $271 million in the prior year, including a 3% increase in same-store sales. Operating profit grew 27% to $21.1 million from $16.7 million last year. Operating margins on an overall and same-store basis expanded to 6.4% from 6.2% during the quarter.

Income from continuing operations grew 27% to $11.2 million from $8.8 million in 1998. Diluted earnings per share increased 23% to 38 cents from 31 cents in the same quarter a year ago, which is adjusted for a 3-for-2 stock split completed on August 14, 1998.

Six Month Results

For the six-month period ended June 30, 1999, revenues increased 30% to $578 million from $444 million in the prior year, including a 6% increase in same-store sales. Operating profit increased 32% to $28.1 million compared to $21.3 million last year. Operating margin increased to 4.9% from 4.8%, while same-store operating margin advanced to 5.0% from 4.8%.

Income from continuing operations grew 28% to $13.5 million from $10.6 million in 1998. Diluted earnings per share increased 21% to 46 cents from 38 cents compared to a year ago, which has also been adjusted for the 3-for-2 stock split effected August 14, 1998.

"Watsco's performance for the second quarter represents a continuation of the excellent results achieved during the first quarter," stated Albert H. Nahmad, Watsco's President and Chief Executive Officer. "This year's gains in same-store sales and operating profits, together with strong performance of newly acquired businesses, have all contributed to our record operating results this year. Our Company's prominence and significance in the HVAC/R industry continues to expand."

Watsco is the nation's largest distributor of air conditioning, heating and refrigeration equipment and related products 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 324 locations serving customers in 30 states with annual revenue over $1 billion. The Company is actively pursuing 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 the Company can be found in filings of the Company with the Securities & Exchange Commission. All forward-looking statements should be considered in light of these risks and uncertainties.