Watsco Inc (WSO) 2023 Q4 法說會逐字稿

Good morning, and welcome to the Watsco Fourth Quarter 2023 Earnings Call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Albert Nahmad, Chairman and CEO. Please go ahead.

早安，歡迎參加 Watsco 2023 年第四季財報電話會議。 （操作員說明）請注意此事件正在被記錄。我現在將會議交給董事長兼執行長艾伯特·納哈邁德 (Albert Nahmad)。請繼續。

Thank you, and good morning, everyone. Welcome to our Fourth Quarter Earnings Call. This is Al Nahmad, Chairman and CEO. With me is A.J. Nahmad, Watsco's President; and Paul Johnston, Barry Logan and Rick Gomez.

謝謝大家，大家早安。歡迎參加我們的第四季財報電話會議。我是董事長兼執行長阿爾‧納哈邁德 (Al Nahmad)。和我一起的是 A.J. Watsco 總裁 Nahmad；以及保羅·約翰斯頓、巴里·洛根和里克·戈麥斯。

Now before we start, our cautionary statement, as always, this conference call has forward-looking statements as defined by the SEC laws and regulations that are made pursuant to safe harbor provisions of these various laws. Ultimate results may differ materially from forward-looking statements. Now, Watsco delivered strong results in 2023 despite some market conditions which were somewhat inevitable after two extraordinary years in 2021 and 2022. Reflecting in the year's results, I am proud of the accomplishments we delivered.

現在，在我們開始之前，我們的警告聲明一如既往，本次電話會議包含 SEC 法律和法規所定義的前瞻性聲明，這些聲明是根據這些不同法律的安全港條款制定的。最終結果可能與前瞻性陳述有重大差異。現在，儘管在經歷了2021 年和2022 年這兩年非凡的年份之後，儘管市場條件有些不可避免，但Watsco 在2023 年仍取得了強勁的業績。反映在這一年的業績中，我為我們所取得的成就感到自豪。

We achieved market share gain in markets we serve. We further scaled Watsco's industry-leading technology platforms. We had a successful start driving down long-term productivity gains. I should say, we had a successful start driving long-term productivity gains. We expanded our network and product offerings by acquiring great businesses through our scale, and we fortified our balance sheet through inventory reduction and generated record fourth quarter of cash flow.

我們在我們服務的市場中實現了市場份額的成長。我們進一步擴展了 Watsco 業界領先的技術平台。我們在降低長期生產力成長方面取得了成功。我應該說，我們在推動長期生產力提高方面取得了成功。我們透過規模收購優秀企業來擴大我們的網路和產品供應，並透過減少庫存來強化我們的資產負債表，並創造了創紀錄的第四季度現金流。

And once again, shareholders will receive a meaningful dividend increase in 2024, which is in April 2024. This is Watsco's 50th consecutive year of paying dividends. 2023 was also a year of immense change in virtually all equipment products transition to new higher (inaudible) systems. In collaboration with our OEM partners, Watsco introduced new products and SKUs for over 25 brands of HVAC systems. Our teams executed well, and thanks to our scale and speed to market. We are confident that we gained share. We also trained thousands of customers on new products and our digital pilot library was updated with approximately 500,000 new SKUs. And this spring, we will begin the next regulatory transition to new A2L products with lower GWP refrigerants.

而股東將在2024年再次獲得有意義的股利增加，即2024年4月。這是Watsco連續第50年支付股利。 2023 年也是發生巨大變化的一年，幾乎所有設備產品都過渡到新的更高（聽不清楚）系統。 Watsco 與我們的 OEM 合作夥伴合作，推出了適用於超過 25 個品牌的 HVAC 系統的新產品和 SKU。我們的團隊執行得很好，這要歸功於我們的規模和上市速度。我們有信心贏得市場佔有率。我們還對數千名客戶進行了新產品培訓，並且我們的數位試點庫更新了約 50 萬個新 SKU。今年春天，我們將開始對採用較低 GWP 冷媒的新 A2L 產品進行下一次監管過渡。

These regulatory transitions are positive for our industry and are good for Watsco's business. They offer meaningful value to homeowners and businesses to upgrade systems that are more efficient and better for the environment. Watsco's residential unit volumes, although still down, stabilized during the second half of 2023. Commercial end markets remain strong across all markets. Our commercial business continued to grow at a healthy rate, and our backlog of products extends well into next year.

這些監管轉變對我們的產業有利，也有利於 Watsco 的業務。它們為房主和企業提供有意義的價值，以升級更有效率、更環保的系統。 Watsco 的住宅單元銷售量雖然仍然下降，但在 2023 年下半年趨於穩定。所有市場的商業終端市場仍然強勁。我們的商業業務繼續以健康的速度成長，我們的積壓產品將延續到明年。

Sales of ductless systems, an increasingly important component of our business grew double digits in the year, and offset declines in conventional [rental] business. SG&A as a percentage of sales on a same-store basis decreased for the year, indicating progress in driving more productivity across the company. We believe we are in early innings of a long-term opportunity to meaningfully improve productivity and overall efficiencies. We have challenged our leaders and provided them with tools and data to implement change and most importantly, we possess an entrepreneurial culture to execute change in a responsible way.

無管道系統是我們業務中日益重要的組成部分，其銷售額在這一年實現了兩位數成長，抵消了傳統[租賃]業務的下降。今年，SG&A 佔同店銷售額的百分比有所下降，顯示公司在提高生產力方面取得了進展。我們相信，我們正處於有意義地提高生產力和整體效率的長期機會的早期階段。我們向我們的領導者提出了挑戰，並為他們提供了實施變革的工具和數據，最重要的是，我們擁有以負責任的方式實施變革的創業文化。

Over the past year, we expanded our network through acquisitions with three terrific business joining the Watsco family collectively their annual sales are around $200 million. These businesses will retain their culture, leadership teams, a uniqueness in the market, consistent with our long-term practice of honoring and sustaining great legacies. Our industry remains highly fragmented, and we will continue to pursue other great companies to grow scale in our $60 billion North American market. We believe Watsco's technology advantage, market-leading scale and the strength of our balance sheet are all great reasons to join the Watsco family.

在過去的一年裡，我們透過收購加入 Watsco 家族的三家優秀企業來擴大我們的網絡，它們的年銷售額總計約為 2 億美元。這些企業將保留其文化、領導團隊和市場獨特性，這與我們尊重和維護偉大遺產的長期做法是一致的。我們的產業仍然高度分散，我們將繼續尋求其他偉大的公司來擴大我們 600 億美元的北美市場的規模。我們相信 Watsco 的技術優勢、市場領先的規模以及我們的資產負債表實力都是加入 Watsco 大家庭的重要理由。

Now before getting to Q&A, as always, I want to emphasize that our core focus remains on the long term. We believe our scale, the quality of our balance sheet and unique culture will continue to drive long-term growth and performance. We have an immense technology advantage, and we invested -- investing to grow that advantage. Watsco's broad array of products and brands is also a competitive advantage that allows us to serve contractors in any environment. And finally, our industry is fortunate to benefit from important regulatory and industry catalysts that should positively influence Watsco's performers in the years ahead. With that, let's go on to Q&A.

現在，在進行問答之前，一如既往，我想強調我們的核心重點仍然是長期的。我們相信，我們的規模、資產負債表的品質和獨特的文化將繼續推動長期成長和績效。我們擁有巨大的技術優勢，並且我們進行投資以擴大這種優勢。 Watsco 廣泛的產品和品牌也是一個競爭優勢，使我們能夠在任何環境下為承包商提供服務。最後，我們的行業很幸運能夠受益於重要的監管和行業催化劑，這些催化劑應該在未來幾年對 Watsco 的表現產生積極影響。接下來，讓我們繼續問答。

(Operator Instructions) The first question comes from Tommy Moll with Stephens Inc.

（操作員說明）第一個問題來自 Stephens Inc. 的 Tommy Moll。

I wanted to start on gross margins, no big surprise there. Your fourth quarter, your fourth quarter gross margin percentage was a little bit below the long-term aspirations that have been discussed recently. So it's a 2-part question really. One is just if you could unpack any of the factors there for us in the fourth quarter? And then if we think about the art of the possible going forward to start this year, is there a pathway near term, you can define that how you want, near term to recovering and moving back towards those longer-term aspirations in the high 20s or maybe 30?

我想從毛利率開始，這並不奇怪。你們的第四季度，你們的第四季毛利率略低於最近討論的長期目標。所以這確實是一個由兩個部分組成的問題。一是您能否在第四季為我們解析其中的任何因素？然後，如果我們考慮今年可能開始的藝術，近期是否有一條途徑，你可以定義你想要的方式，近期恢復並回到 20 多歲的長期願望或者也許30？

Very good question. As you know, I've stated earlier that eventually, our aspiration is 30%, and we have a ways to go. So I'm going to ask Barry Logan and Paul Johnston to deal with current events.

非常好的問題。如你所知，我之前說過，最終我們的目標是 30%，而且我們還有很長的路要走。所以我要請巴瑞·洛根和保羅·約翰斯頓處理時事。

We've said all year long with some of the moving pieces with gross profit and also said 2 years ago or so now, the aspiration -- short-term aspiration was 27%. And so if I just focus on the year for a second, Tommy, just some important things to be grounded in looking at the year's performance and then I'll address the quarter and the shorter-term perspective. But for the year, the [$27.4 million] is what was achieved. And it's -- obviously, it's better than it was 2 years ago, 3 years ago, historically, and a lot of the moving pieces that we've talked about to drive and sustain that higher margin, obviously, are in place as we look at the year's perspective.

我們已經說過全年一些具有毛利的活動部分，也說過兩年前左右現在，短期願望是 27%。因此，湯米，如果我只專注於這一年，我會專注於一些重要的事情，以審視今年的業績，然後我將討論季度和短期前景。但今年，[2,740 萬美元] 已經實現。顯然，從歷史上看，它比兩年前、三年前要好，而且我們談到的許多推動和維持更高利潤率的舉措顯然已經就位，正如我們所看到的那樣從今年的角度來看。

If we look at a 60 business day perspective, which is the fourth quarter, in the off season, some of those variables have a greater impact in the short term. So that would be my first bias I would try to talk about is we're talking about 60 business days in the off-season in the fourth quarter and some of the moving pieces are more acute because of benefits of a year ago, not so much what's happening short term. So if I unpack that a bit and not be quite as abstract about it, we have about $16 million of benefit in the prior year from pricing gains, from weighted average cost gains, from inflationary gains, however you want to define it, which is roughly 100 basis points in the year ago quarter.

如果我們從 60 個工作日的角度來看，即第四季度，處於淡季，其中一些變數在短期內會產生更大的影響。因此，這將是我要嘗試談論的第一個偏見，我們正在談論第四季度淡季的 60 個工作日，並且由於一年前的收益，一些變化更為嚴重，而不是這樣短期內發生的事情很多。因此，如果我稍微展開一下，而不是那麼抽象，我們在前一年從定價收益、加權平均成本收益、通貨膨脹收益中獲得了約 1600 萬美元的收益，無論你想如何定義它，即較去年同期下降約100 個基點。

Some of that is equipment, a greater proportion is not equipment as there was a lot of inflation going on in some of our non-equipment products a year ago like refrigerant, like copper tubing, like steel products and probably 40 other product lines where an year later, those benefits are not there. So that's 100 basis points. That's $16 million of consequence. And if I look forward to 12 months, instead of back 12 months, if I look forward 12 months, I don't expect there to be that kind of headwind in those products, let's say, a year from now. And it's just one of those things that as the numbers are larger in the fourth quarter, the acuteness is higher, $16 million would not be as material to a second or third quarter. It's more material to a fourth quarter.

其中一些是設備，更大比例不是設備，因為一年前我們的一些非設備產品發生了很大的通貨膨脹，例如冷媒、銅管、鋼鐵產品以及可能還有 40 條其他產品線，其中一年後，這些好處就不存在了。所以這是 100 個基點。這相當於 1600 萬美元的後果。如果我展望 12 個月，而不是回顧 12 個月，如果我展望 12 個月，我預計這些產品不會出現這種逆風，比如說一年後。這只是其中之一，隨著第四季的數字更大，尖銳性也更高，1,600 萬美元對於第二或第三季來說不會那麼重要。這對於第四季來說更為重要。

So that's probably the biggest impact in the quarter if you look at things on a year-over-year basis. There are some other moving pieces, which we've talked about. One is that equipment products in fact, have a lower gross margin than non-equipment products. So in the quarter, you see a mix difference between the growth rate of equipment, which was pretty flat. Non-equipment, which was down. So that's algebra that affects the margins in the quarter by 20, 30 basis points, I would say.

因此，如果您按年比較的話，這可能是本季最大的影響。我們已經討論過其他一些令人感動的事情。一是裝備類產品的毛利率實際上低於非裝備類產品。因此，在本季度，您會看到設備成長率之間的混合差異，相當平穩。非設備，即down。我想說，這是影響本季利潤率 20、30 個基點的代數。

And there are some other smaller things that aren't worth kind of going through. The bigger picture is this idea of inflationary gains that occurred a year ago. With less inflation, there's less inventory gains to come by. And if we look in the next 12 months, I would expect a much smoother water, much more -- less volatility in terms of this dynamic. I think we need to get beyond the first quarter to clearly see that if I look forward the next 12 months. But I would say a greater feeling of stability versus the volatility that you've been seeing this year. Paul, anything you would add to that?

還有一些其他較小的事情不值得經歷。更大的圖景是一年前發生的通膨收益的想法。隨著通貨膨脹的降低，庫存收益也會減少。如果我們展望未來 12 個月，我預期水流會更加平穩，波動性也會更小。我認為，如果我展望未來 12 個月，我們需要在第一季之後才能清楚地看到這一點。但我想說的是，與今年你所看到的波動相比，你有更大的穩定感。保羅，你還有什麼要補充的嗎？

Barry, you've really covered a lot of ground there, yes. Obviously, there's going to be some price changes that we're going to see in some of the commodities, especially refrigerant. We should start seeing some uptick in refrigerant pricing as we -- as we've got the 30% reduction in allocations coming into effect January 1. Too early in the season to have really seen those yet in the first quarter, but obviously, those are expected. Secondly, we're also seeing some recovery in steel. We're seeing some recovery in some of the other products that we sell. So price increases are still occurring in the non-equipment side of the business, and we expect those to stabilize and perhaps grow us a year as the demand picks up during the year.

巴里，你確實已經了解了很多內容，是的。顯然，我們將看到某些商品，特別是冷媒的價格發生一些變化。我們應該開始看到冷媒價格上漲，因為我們的分配減少 30% 將於 1 月 1 日生效。在第一季度真正看到這些情況還為時過早，但顯然，這些預計。其次，我們也看到鋼鐵有所復甦。我們看到我們銷售的其他一些產品有所復甦。因此，非設備業務方面的價格上漲仍在發生，我們預計隨著年內需求的回升，這些價格將穩定下來，並可能使我們成長一年。

Thank you both for those helpful answers. As a follow-up, I wanted to pivot to a volume conversation and knowing that you won't give guidance, I'll try to frame it in a way that provides for a constructive discussion. If we look at the trends for unitary HVAC systems in the year you just concluded, down, I think it was 8% in your material this morning that you provided, I think we would agree that's an abnormal type trend. And so I'm just curious, if you look to 2024, is there anything abnormal that you see anything worth calling out now? Or does it feel more like a normal kind of environment off that lower base from last year?

謝謝你們兩位的幫忙。作為後續行動，我想轉向大量對話，並且知道您不會提供指導，我將嘗試以提供建設性討論的方式來建構它。如果我們看看您剛剛總結的一年中單一 HVAC 系統的趨勢，我認為您今天早上提供的材料中有 8%，我認為我們會同意這是一種異常類型的趨勢。所以我很好奇，如果你展望 2024 年，有什麼異常現象值得你現在指出嗎？或者感覺更像是一種正常的環境，而不是去年較低的基數？

And it's a great question. By the way, some of the OEMs, particularly large ones -- now 30% unit volume drop in the fourth quarter. And we're pleased that we're doing a hell of a lot better than that. Paul, do you want to take a shot?

這是一個很好的問題。順便說一句，一些 OEM，尤其是大型 OEM，第四季度的銷量下降了 30%。我們很高興我們做得比這好得多。保羅，你想嘗試嗎？

Yes. The obvious elephant in the room is going to be the -- how fast the transition goes to the A2L product, which is being discussed in -- among the OEMs is a perhaps a 10% to 15% increase or a lift in price and each one of the OEMs obviously has a different implementation schedule. So it's not going to be a full year implementation that we're going to see on that. We're going to see some start coming in -- in the second quarter and beyond. So I think that's going to be one of the things that's going to drive an increase. Secondly, obviously, a reduction in mortgage rates always helps.

是的。房間裡顯而易見的大象將是——原始設備製造商中正在討論的向 A2L 產品過渡的速度可能是 10% 到 15% 的增長或價格的提升，並且每個其中一家原始設備製造商顯然有不同的實施時間表。因此，我們不會看到全年的實施。我們將在第二季及以後看到一些進展。所以我認為這將是推動成長的因素之一。其次，顯然，降低抵押貸款利率總是有幫助的。

People buying existing homes although they don't intend to replace the air conditioning system, that's really when they're at the prime period where they would do a replacement is within the first 90 to 180 days after acquiring an existing home. So I think there's some good news out there. We don't -- I can't forecast out exactly how that's going to overlay into the entire year. But I think there's some positive things that we're going to be seeing as the year goes on.

購買現房的人雖然不打算更換空調系統，但實際上他們正處於更換空調系統的黃金時期，即購買現房後的前 90 至 180 天內。所以我認為有一些好消息。我們不知道——我無法準確預測這將如何影響全年。但我認為隨著時間的推移，我們將會看到一些正面的事情。

Generally. Let me just say generally that if -- I've obviously -- industry weakness as an opportunity for us. There are highly leveraged distributors in the business, and there are distributors that don't have the -- perhaps the balance sheet to deal with tougher times. We see that as an opportunity to join -- have them join us with our culture. We provide capital, insisted they keep their culture in their organization and we provide tools that no one else has -- so I'm sort of well, I don't -- would not be very excited to have market industry data decline. If it happens, I'm also looking at opportunity to bring more wonderful companies to do partnership with us. Go ahead, Paul.

一般來說。讓我概括地說，如果——我顯然——行業疲軟對我們來說是一個機會。該行業中有一些槓桿率很高的分銷商，也有一些分銷商沒有資產負債表來應對困難時期。我們認為這是一個加入的機會——讓他們加入我們並融入我們的文化。我們提供資金，堅持讓他們在組織中保留自己的文化，我們提供其他人沒有的工具——所以我有點好，我沒有——不會因為市場行業數據下降而感到非常興奮。如果發生的話，我也在尋找機會讓更多優秀的公司與我們建立合作關係。繼續吧，保羅。

I was just going to add about the unit data. I listened to the question, and I asked myself the question about units. Do we feel better or worse? That would be my simple way of asking that question. And so the first half of 2023, units were down, I think, in the teams. And second half of the year, I think it's -- units are down 2% or 3%. So I think we feel better about units than worse. Of course, the crystal ball is -- needs to play out next selling season in April to September when our business multiplies in size. But I think generally speaking, things again seem more stable as opposed to being volatile.

我只是想添加有關單位數據的資訊。我聽了這個問題，然後問自己有關單位的問題。我們感覺更好還是更糟？這就是我提出這個問題的簡單方式。因此，我認為 2023 年上半年，團隊數量有所下降。今年下半年，我認為單位數量下降了 2% 或 3%。所以我認為我們對單位的感覺更好而不是更差。當然，水晶球需要在四月至九月的下一個銷售季節發揮作用，屆時我們的業務規模將成倍增加。但我認為總的來說，事情似乎再次變得更加穩定，而不是不穩定。

The next question comes from Ryan Merkel with William Blair.

下一個問題來自瑞安·默克爾和威廉·布萊爾。

My first question was on price and the outlook for '24. What do you think in price will contribute given what you've seen from the OEMs?

我的第一個問題是關於價格和 24 年的前景。鑑於您從原始設備製造商看到的情況，您認為價格會有何貢獻？

We have that information. Barry, Paul?

我們有這些資訊。巴里、保羅？

Yes, we've seen price increases announced already in the year on the existing equipment, and they range basically from 4% to 6%. So the equipment prices have already been announced. They're going to be further supplemented again by the introduction, as I indicated in the last question, with the A2L introduction. And so we're going to probably see some additional lift there.

是的，我們已經看到今年宣布的現有設備價格上漲，漲幅基本上在 4% 到 6% 之間。所以裝備價格已經公佈了。正如我在上一個問題中指出的那樣，它們將透過 A2L 介紹再次進一步補充。因此，我們可能會看到那裡有一些額外的提升。

A lot of speculation around how big of a lift that's going to be, so nobody has really disclosed anything on their anticipated price outside of that wide range that I think you all have heard, 10% to 15%. On the other products that we sell, we're also seeing, as I indicated, increased prices on pretty much all of the copper products and all of the metal products that we sell. And we experienced some softness on some of the insulation products last year. Those appear to be stabilized now and we should start seeing those products not have any sort of price degradation in 2024. How much all that is going to add up to? I think it's still a little bit of a question mark as far as being able to put a percentage against that against total sales, I think it will be clear in the second quarter as we start seeing what the rollout prices are going to look like for the A2L.

關於這將有多大的提升有很多猜測，所以沒有人真正透露任何超出我想你們都聽說過的廣泛範圍（10% 到 15%）之外的預期價格的信息。正如我所指出的，在我們銷售的其他產品上，我們也看到幾乎所有銅產品和所有金屬產品的價格上漲。去年我們的一些絕緣產品出現了一些柔軟的情況。這些現在似乎已經穩定下來，我們應該開始看到這些產品在 2024 年不會出現任何形式的價格下降。所有這些加起來會是多少？我認為就能夠根據總銷售額計算百分比而言，這仍然是一個問號，我認為當我們開始看到推出價格會是什麼樣子時，第二季度就會很清楚A2L。

Okay. Got it. And then I wanted to ask on SG&A. You've taken some actions there. Anything you can quantify for us in terms of how much is coming out in '24 or what your kind of aspiration is for SG&A growth in '24 either way?

好的。知道了。然後想問SG&A。你已經在那裡採取了一些行動。您可以為我們量化一下 24 年的表現嗎？或者您對 24 年 SG&A 成長的期望是什麼？

Mr. Logan?

洛根先生？

Well, first, again, there's 2 sides to that equation. And they're all -- it's all being driven again through the field, through our stores, through our regions, through our business unit leaders in terms of -- in their 2024 plans, reducing SG&A. And when I say reduced SG&A, it's not just cutting SG&A, it's finding out the opportunities for productivity after what had been also 2 years of wildness in terms of SG&A growth. Talk about the business performance of '21 and '22.

嗯，首先，這個等式有兩個面向。他們都在 2024 年計劃中透過現場、我們的商店、我們的地區、我們的業務部門領導再次推動這一切，減少 SG&A。當我說減少 SG&A 時，這不僅僅是削減 SG&A，而是在 SG&A 連續兩年瘋狂增長之後尋找提高生產力的機會。談談'21和'22的經營業績。

It was also a very unproductive period of adding SG&A to serve what was going on. So that's what we're looking to improve and to some extent, simply get back to a little bit more normalized conditions in terms of how the branches operate and so on. So this kind of single-digit declines that you're seeing, Ryan, is a composite of two things. In recent quarters, it's variable expenses coming down 10%, 15%. Fixed cost inflation moderating, but still there's inflation in fixed costs like rent, for example.

這也是一個非常低效率的時期，增加SG＆A來服務正在發生的事情。這就是我們尋求改進的地方，在某種程度上，只是在分支機構的運作方式等方面回到更規範化的條件。所以，瑞安，你所看到的這種個位數的下降是兩件事的綜合結果。最近幾個季度，變動費用下降了 10%、15%。固定成本通膨放緩，但租金等固定成本仍存在通膨。

So it's probably a slow grind of better improvement from what you've been seeing in the last few quarters? This is, again, not restructuring the corporation. This is improving the daily expenses, the daily productivity. But in that kind of better progress from what we've been seeing in the last few quarters is our expectation. I'll have to leave it at that.

所以，與過去幾季相比，這可能是一個緩慢的過程，取得了更好的進步？這又不是公司重組。這正在改善日常開支、日常生產力。但我們期望在過去幾季中看到更好的進展。我得先到此為止。

The next question comes from David Manthey with Baird. Mr. Manthey, your line is open. Please go ahead with your question.

下一個問題來自 David Manthey 和 Baird。曼西先生，您的電話已接通。請繼續你的問題。

Got it. Yes. Can you hear me now?

知道了。是的。你聽得到我嗎？

Yes. Please go ahead, sir.

是的。請繼續，先生。

So I'm going to stay on the gross margin topic, if I can here. Were there adjustments in the fourth quarter that hit gross margin disproportionately hard. Barry, you're kind of saying the year-over-year comparison looking back and then looking forward, are you implying that the gross margin a year from now, give or take, will be in the range that it was this year? Or was there something unusual in this fourth quarter that might affect that comparison?

因此，如果可以的話，我將繼續討論毛利率主題。第四季的調整是否對毛利率造成了不成比例的嚴重打擊？巴里，你是說回顧過去然後展望未來的同比比較，你是否暗示從現在起一年後的毛利率，無論多少，都會在今年的範圍內？或者第四季是否有什麼不尋常的事情可能會影響這種比較？

Yes, good question. Well, a year from now, again, we'll have a completely different blend of new products a year from now. I would expect that to be a margin opportunity a year from now. There are no adjustments or funk that hit this quarter that I would call out as being material or even important to talk about or even immaterial to talk about, really nothing that stands out.

是的，好問題。好吧，一年後，我們將再次推出完全不同的新產品組合。我預計這將是一年後的保證金機會。本季度沒有出現任何調整或恐慌，我認為這些調整或恐慌是重要的，甚至是值得談論的，甚至是無關緊要的，實際上沒有什麼突出的。

So yes, I think going back to the algebra of price and inflation and the seasonality and so on. Again, I would expect as we get into season, we have pricing actions in our pocket. We have new products being introduced. And I would say, a continuance of the technology that we've been using to improve margin. And as far as a year from now and next fourth quarter, again, I think there's an opportunity to improve margin, but nothing that penalized this quarter in a particular way that would be important.

所以，是的，我想回到價格、通貨膨脹和季節性等代數。再次，我預計當我們進入銷售季節時，我們會採取定價行動。我們正在推出新產品。我想說，這是我們用來提高利潤率的技術的延續。就一年後和下一個第四季而言，我再次認為有機會提高利潤率，但不會對本季造成任何特別重要的影響。

Okay. And yes, I appreciate you indulging us on all this quarterly conversation, which I don't think historically we would have done here. But Barry, you also said we need to get through the first quarter and you were kind of talking again about that year-to-year comparison. If you were down a couple of hundred basis points in the fourth quarter year-to-year because of all the items you mentioned, and then we look to the first quarter, that would put us in a range in the what, the 26.5%, 27% range. Just trying to understand the cadence, again, knowing there's a lot of moving parts there. Is there anything in the first quarter unusual that we should think about there relative to your comments, Barry?

好的。是的，我很感謝您讓我們參與所有這些季度對話，我認為歷史上我們不會在這裡這樣做。但巴里，你還說我們需要度過第一季度，你又談到了年度比較。如果由於您提到的所有項目，您在第四季度同比下降了幾百個基點，那麼我們展望第一季度，這將使我們處於 26.5% 的範圍內，27%範圍。只是想再次理解節奏，知道那裡有很多活動部件。巴里，第一季有什麼不尋常的事情值得我們考慮，與您的評論相關嗎？

Yes. I think the pricing actions of the OEMs are pushed out a little bit into the late first quarter, early second quarter, if I look at things comparatively to last year? So you can read into that comment in terms of modeling, you can consider the comment. So sequentially, I think, again, there are going to be certainly better margin in the first quarter versus a year ago, you have to consider my comment about the timing of some of the pricing actions that we're describing.

是的。如果我與去年相比，我認為原始設備製造商的定價行動會稍微推遲到第一季末、第二季初？因此，您可以從建模角度閱讀該評論，您可以考慮該評論。因此，我再次認為，與一年前相比，第一季的利潤率肯定會更高，您必須考慮我對我們所描述的一些定價行動的時間表的評論。

That's a good point, Barry, because instead of a January 1 price increase, most everybody went February 1, March 1. So it's a little bit of a lag to Barry's point.

巴里，這是一個很好的觀點，因為大多數人都在 2 月 1 日、3 月 1 日去，而不是 1 月 1 日漲價。所以這與巴里的觀點有點滯後。

A top 10 vendor that went April 1 instead of January 1. So some of this -- the benefit will push a little bit later into 2024 than simply January 1.

排名前 10 名的供應商於 4 月 1 日而不是 1 月 1 日進入。因此，其中一些福利將推遲到 2024 年，而不是 1 月 1 日。

The next question comes from Brett Linzey with Mizuho.

下一個問題來自 Mizuho 的 Brett Linzey。

Just want to come back to the inventory. So you took another $208 million out of the system. I believe that was a little bit ahead of your initial plan. But maybe you could just speak to your assessment of inventory levels as we begin to move into the selling season? Are there more actions that need to be taken, largely complete? How are you thinking about that?

只是想回到庫存。所以你又從系統中拿走了 2.08 億美元。我相信這比您最初的計劃提前了一點。但也許您可以在我們開始進入銷售季節時談談您對庫存水準的評估？是否還需要採取更多行動（基本上已完成）？你覺得怎麼樣？

Well, I'll give you a big picture of it is that we do want and we'll work on higher inventory turns. So I do expect to have our inventory produce more cash flow as it turns. And the science that we use is -- to do that, is being implemented. It's a very long process, longer than I expected. But eventually, what you'll see is lower investment in inventory and higher returns when compared to sales.

好吧，我將向您展示我們確實想要的整體情況，並且我們將致力於提高庫存週轉率。因此，我確實希望我們的庫存在周轉時能夠產生更多的現金流。為了做到這一點，我們所使用的科學正在實施。這是一個非常漫長的過程，比我預期的要長。但最終，您將看到與銷售相比，庫存投資更低，回報更高。

Yes. Absolutely. This is Paul. Historically, it's been a 4-plus turn industry. And obviously, during the pandemic and the supply chain disruption, everybody got lost in the mid- to low 3s. And so now as we strive to get back to the 4 turns, obviously, we're going to have a reduction in inventory. Right now, we're seeing better cooperation and better lead times coming out of our OEMs pretty much across the board. And as those lead times improve, obviously, that gives us a better position to not have to stock as much inventory. So that's one thing that's happening.

是的。絕對地。這是保羅。從歷史上看，這是一個 4+ 週轉的行業。顯然，在疫情和供應鏈中斷期間，每個人都在中低三點迷失了方向。因此，現在當我們努力恢復到 4 週時，顯然我們將減少庫存。目前，我們看到我們的 OEM 幾乎全面實現了更好的合作和更短的交貨時間。顯然，隨著交貨時間的縮短，我們將處於更好的位置，不必庫存那麼多庫存。這就是正在發生的一件事。

Secondly, Watsco has got an unusual position on inventory in each one of our operating units manages inventory. So there's not one big central headquarter directive that gets into the inventory. We manage it in much smaller blocks with each one of the operating units actually functioning against their vendors, what they need to have in stock and in inventory. Plus Watsco invested during -- before the pandemic. We invested heavily in the technology it takes to manage inventory, putting in new inventory management systems. It gets us daily management reviews so that we can identify what we have on hand, what we have on order, by region, by district, by branch. So a lot more visibility than you'd find in a normal distribution company.

其次，Watsco 在我們管理庫存的每個營運單位中都擁有不同尋常的庫存地位。因此，沒有一項重大的中央總部指令被納入庫存。我們以較小的區塊進行管理，每個營運單位實際上都針對其供應商、他們需要的庫存和庫存進行運作。另外，Watsco 在疫情爆發之前進行了投資。我們在庫存管理技術上投入了大量資金，建立了新的庫存管理系統。它讓我們進行日常管理審查，以便我們能夠按地區、地區、分支機構確定我們手頭上有什麼、訂單有什麼。因此，比普通分銷公司的知名度要高得多。

Yes. That's great. And then just shifting to the non-equipment versus equipment trends as well as in the second half being a little better than first half. I guess it doesn't suggest there's a meaningful retrenchment in the consumer on the replacement side. Is there anything in terms of high efficiency mix or credit metrics or things that you're watching internally that would suggest there's a step down here in '24 early in the year?

是的。那太棒了。然後轉向非設備與設備趨勢，下半年略好於上半年。我想這並不代表更換方面的消費者出現了有意義的縮減。在高效率組合或信用指標或您在內部觀察的事情方面是否有任何事情表明 24 年初會出現下降？

I'll take a stab on the equipment side. The -- as we indicated a year ago, and we went to the higher efficiency minimums that were regulated by the government, we expected there to be a compression around the entry-level product. And we went from around 65% of the minimum efficiency products up to around 85%. So we've definitely seen more product coming out. It's higher-efficient product than what we had before, but it has distorted the industry a little bit towards the minimum efficiency as opposed to high efficiency.

我會在設備方面進行嘗試。正如我們一年前所指出的，我們採用了政府監管的更高效率最低標準，我們預計入門級產品將會受到壓縮。我們將最低效率產品的效率從 65% 左右提高到 85% 左右。所以我們確實看到了更多產品的問世。它是比我們以前的產品更有效率的產品，但它稍微扭曲了產業的最低效率，而不是高效率。

And it's a good question on credit. It's not asked often enough, frankly. So we -- obviously, our accounts receivable represents contractor credit giving the average contractor about $10,000 a month and a credit line essentially. And so if you look at our cash flow statement, which is published in the press release, you'll see bad debt is actually down about 20% this year. So there's no obvious indication of change in the quality of the portfolio. It's roughly 10, 11 basis points of bad debt and again, compare that against any peer or any kind of other distribution model you can find, it's in a very favorable position. So credit is not something we're seeing as a risk. It's how we serve customers and again, so far, so good from an economic point of view.

這是一個關於信用的好問題。坦白說，這個問題問得還不夠頻繁。因此，顯然，我們的應收帳款代表了承包商的信用，為承包商提供了每月約 10,000 美元的信用額度，並且本質上是信用額度。因此，如果您查看我們在新聞稿中發布的現金流量表，您會發現今年壞帳實際上下降了約 20%。因此，沒有明顯跡象表明投資組合的品質發生了變化。壞帳大約是 10、11 個基點，與您能找到的任何同行或任何其他分配模型相比，它處於非常有利的位置。因此，我們並不將信貸視為風險。這就是我們為客戶服務的方式，到目前為止，從經濟角度來看，效果非常好。

Next question comes from Jeffrey Sprague with Vertical Research.

下一個問題來自垂直研究公司的 Jeffrey Sprague。

Just kind of back on price. Just wonder what, if anything, you make of the OEMs kind of going later and kind of not at the same time. Is there sort of a message here of kind of price fatigue in the market do you think? Is there some game theory or something we should be thinking about?

只是價格有所回升。只是想知道，如果有的話，您認為原始設備製造商是稍後進行的，而不是同時進行的。您認為市場上是否存在某種價格疲勞的訊息？是否有一些博弈論或我們應該思考的東西？

I don't think it's that diabolical. I think it's just a natural progression of how they intend to roll out their new product introduction on the A2L. And if you listen to each one of the OEMs on their public broadcast, you find that they each are putting out a different variety of products at different times during the year. And I think it has more to do with their engineering and their manufacturing plants and all that, that goes into rolling out the product.

我不認為這有那麼邪惡。我認為這只是他們打算在 A2L 上推出新產品的自然進展。如果您在每個原始設備製造商的公共廣播中收聽，您會發現他們每個人都在一年中的不同時間推出不同種類的產品。我認為這更多是與他們的工程和製造工廠以及推出產品所涉及的所有方面有關。

Yes, interesting. Makes sense. And then just kind of back to the replacement question I was asked kind of at least obliquely a couple of different ways. Al, in your opening, you kind of talked about the inevitability of -- after a year like 2023 here. If we do go back to just that kind of old school demographic replacement (inaudible) into the whole 15-year life and all that argument. We're echoing against 2009 right now, right? So that math could argue for another soft replacement year. I just wonder your thoughts on that and kind of what you're seeing in repair versus replace.

是的，有趣。說得通。然後回到替換問題，我至少以幾種不同的方式間接地被問到了。 Al，在你的開場白中，你談到了 2023 年這樣的一年之後的必然性。如果我們確實回到那種老派的人口更替（聽不清楚）的狀態，那就是整個 15 年的生活以及所有這些爭論。我們現在正在迴響2009年，對吧？因此，從數學角度來看，可以支持另一個軟替代年。我只是想知道您對此有何想法以及您在維修與更換中看到的情況。

Well, our guru and that is Paul Johnston.

好吧，我們的導師就是保羅約翰斯頓。

Oh my God. Start with the repair versus replace. It's -- is fourth quarter, first quarter, which is not the time when you're going to see a lot of repair going on out there. You don't have your air conditioners working, you have your heat pumps and your gas furnaces, which your gas furnaces are generally a lower repair item. So to date, we're not declaring that there's any trends that we've been able to identify and repair versus replace. Will it occur when the temperature goes up, we'll wait and see and find out. The other part of your question was what?

我的天啊。從修復開始，而不是更換。現在是第四季度、第一季度，這不是你會看到大量修復的時間。你的空調不工作，你有熱泵和燃氣爐，燃氣爐通常是較低的維修項目。因此，到目前為止，我們還沒有宣布我們能夠識別和修復而不是更換任何趨勢。氣溫升高後會不會出現這種情況，我們拭目以待。你問題的另一部分是什麼？

Just the underlying health of replacement demand based on kind of where the installed base is and sort of the age of the installed base.

只是根據安裝基礎的位置和安裝基礎的年齡來確定更換需求的基本健康狀況。

The age of the installed base is newer than it's probably ever been since I've been around, which is a long time. But obviously, the mix of the installed base is changing. Gas furnaces generally have a lifetime. You can make a gas furnace last 25, 30 years, whereas a straight cool unit, I think the industry has said, it's around 15, 16 years. Heat pumps are something that are growing as a percentage of the total business. And those generally don't have as long a lifetime. Remember, they're not just operating in the wintertime, they're operating in the summertime also.

自從我加入以來，安裝基礎的年齡可能比它更新，這已經是很長一段時間了。但顯然，安裝基礎的結構正在改變。煤氣發生爐一般都有使用壽命。你可以製造一個瓦斯爐持續 25、30 年，而一個直冷裝置，我想業界已經說過，大約可以使用 15、16 年。熱泵在總業務中所佔的比例正在不斷增長。而那些通常沒有那麼長的壽命。請記住，它們不僅在冬季運行，也在夏季運行。

So you've got more hours being packed on to that piece of equipment. What that's going to do to the overall mix of installed base out there right now. I think that's going to be one of the questions that we'll be able to look at probably in the next year or so. But replacement pull up, I figured that we probably had 2.5 million to 3 million units were pulled up troughing the pandemic. They were installed perhaps prematurely, perhaps not. Trying to get some data around that to see what the geography was of those replacements? Was it North or was it south? Where people were actually replacing equipment. So a lot of data coming in, a lot of data that needs to be analyzed to answer that question properly.

所以你有更多的時間花在這台設備上。這將對目前的整體安裝基礎產生什麼影響。我認為這將是我們在明年左右能夠研究的問題之一。但就更換而言，我估計在疫情期間我們可能有 250 萬到 300 萬台被更換。它們也許是過早安裝的，也許不是。試著取得一些相關數據來了解這些替代品的地理位置？是北方還是南方？人們實際上正在更換設備。因此，需要分析大量數據才能正確回答該問題。

Paul, I think you said something on there. This is A.J. In your 40 years in this industry, this is probably as dynamic period for the space as there's ever been between -- I mean all these questions are pointing to all the different ins and outs and change in paradigm between the supply chain changing and the OEMs going with different pricing at different times. The change of rates of pricing going on and inflation, the inventory and the change to the A2L products coming out. There's just so many different things going on in the industry today, which creates a lot of noise. But I have to say that I think Watsco is very well positioned.

保羅，我想你在那裡說了些什麼。這是 A.J.在您從事這個行業的 40 年裡，這可能是該領域有史以來最活躍的時期——我的意思是所有這些問題都指向供應鏈變化和 OEM 之間的所有不同的細節和範式的變化在不同的時間採用不同的定價。定價率和通貨膨脹率的變化、庫存以及即將推出的 A2L 產品的變化。如今這個行業發生了很多不同的事情，這造成了很多噪音。但我不得不說，我認為 Watsco 的定位非常好。

Our inventory has come down. The quality of our inventory has gone up as far as lower excess and slow and damaged inventory. Pricing, Barry, you covered a lot of it. What I think you left out was the key fundamental block there is that our transaction margin or as I think it's been written structural margin is going in the right direction for 2023. I think there's more momentum around that in 2024. I think we're doing a good job. Our leaders and our teams in the field are doing a good job managing expenses given all the craziness in the space and the balance sheet.

我們的庫存已經下降了。我們的庫存品質有所提高，過剩庫存、緩慢庫存和損壞庫存減少。定價，巴里，你已經涵蓋了很多內容。我認為您遺漏的是關鍵的基本區塊，即我們的交易利潤率或我認為結構性利潤率在2023 年將朝著正確的方向發展。我認為2024 年這方面會有更多動力。我認為我們正在做好工作。考慮到該領域和資產負債表的瘋狂狀況，我們的領導者和現場團隊在費用管理方面做得很好。

The balance sheet being without any debt well positioned for any opportunity that comes our way. So I guess my point is then in a crazy industry in a crazy time, I like where we sit and I like our performance, and I remain very optimistic about the year and the future.

資產負債表沒有任何債務，足以應付我們遇到的任何機會。所以我想我的觀點是，在一個瘋狂的行業和一個瘋狂的時代，我喜歡我們所處的位置，我喜歡我們的表現，我對今年和未來仍然非常樂觀。

Thank you for the perspective.

謝謝你的觀點。

And I think that's what I've said.

我想這就是我所說的。

The next question comes from Joe Ahlersmeyer with Deutsche Bank.

下一個問題來自德意志銀行的 Joe Ahlersmeyer。

I think right after your last call. There was a rule by the EPA interpreting the AIM Act. Just wondering if you have any thoughts on the impact of that rule as it relates to the dates around the transition?

我想就在你最後一次打電話之後。 EPA 制定了一項規則來解釋 AIM 法案。只是想知道您對該規則的影響是否有任何想法，因為它與過渡日期有關？

Yes. It doesn't change the dates of the transition. All it really did was change the sell-through process. Originally, the AIM Act out and indicated that you had to see selling any 410A product at the end of the year. The EPA came out with that with what you're talking about and has a 1-year sell-through now. The units have to be manufactured and produced in 2024. The debt date for building anymore is December 31 of this year, and then there's a 12-month sell-through.

是的。它不會改變過渡日期。它真正所做的只是改變了銷售流程。最初，AIM 法案的出台表明，任何 410A 產品都必須在年底銷售。 EPA 就您所談論的內容提出了這一點，並且現在有 1 年的銷售期限。這些單位必須在 2024 年製造和生產。不再建造的債務日期是今年 12 月 31 日，然後有 12 個月的銷售期。

Understood. And I think there was also some consternation around what constituted manufacturing and if that could actually apply to things that were charged in the field, wondered if you had any thoughts on that. And then over -- like bigger picture, though, does this actually change the time frame over which the OEMs are taking the actions that they're taking. Just any thoughts there?

明白了。我認為，對於製造業的組成以及製造業是否真的適用於現場充電的事物，也存在一些驚愕，想知道您對此是否有任何想法。然後，從更大的角度來看，這實際上會改變原始設備製造商採取行動的時間框架嗎？只是有什麼想法嗎？

No, it doesn't really change. The manufacturers have had to plan for this transition for the last several years. So it did not change the way that they're going to flow this through. They had to get their manufacturing processes in order. They had to change their plant, get their vendors lined up. There was no real change in direction based upon that ruling.

不，它並沒有真正改變。過去幾年，製造商不得不為這種轉變做好計劃。所以這並沒有改變他們處理此事的方式。他們必須讓製造流程井然有序。他們必須改變工廠，讓供應商排隊。根據該裁決，方向沒有發生真正的改變。

They still have to stop manufacturing all 410A units at the end of the year. I think what you were referring to had more to do with what was a component, was the outdoor unit a component and hence, it could be replaced. That question is still a little bit up in the year. There's still some fuzziness around that. So that's subsequent to the sell-through period, can you still install a 410 outdoor unit or indoor unit as a repair component? That has not been clarified yet.

他們仍然必須在今年年底停止生產所有 410A 裝置。我認為你所指的更多的是與組件有關，室外機是組件，因此可以更換。今年這個問題仍然有點突出。對此仍然存在一些模糊之處。那麼，在銷售期結束後，您還可以安裝 410 室外機或室內機作為維修組件嗎？這一點尚未明確。

Okay. Understood. And if I may, I don't think I heard earlier what your commercial HVAC sales were year-over-year relative to residential. And if you have any thoughts on where commercial can go in the year ahead?

好的。明白了。如果可以的話，我想我之前沒有聽說過你們的商業暖通空調銷售相對於住宅的同比銷售情況。您對未來一年的商業發展有何想法？

I did comment that commercial is very strong, and then we have backlog for at least a year. Can you add anything more to that, Barry or Paul?

我確實評論說商業化非常強勁，然後我們的訂單已經積壓了至少一年。巴里或保羅，你還能補充些什麼嗎？

I mean for the year, commercial was up in the teens. So I think that's been the trend all year long. The fourth quarter was near double digits and I'll leave it at that, residential down a little bit.

我的意思是，這一年，廣告的數量達到了十幾歲。所以我認為這是全年的趨勢。第四季接近兩位數，我就這樣吧，住宅業務略有下降。

And looking forward?

並期待嗎？

And I was going to say, and for the quarter, for the sake of the algebra, we had one less selling day in the quarter, so you can adjust for that if you choose to. Sorry, what was your question?

我想說的是，就本季而言，為了代數的緣故，我們在該季度的銷售日減少了一個，所以如果您選擇的話，您可以對此進行調整。抱歉，你問的問題是什麼？

Just the outlook for commercial?

只是商業前景？

Again, we don't measure backlog in the same proportions as the OEM to make large quantities of large commercial. But like we said, I think, in the release or in the commentary, the backlog is still strong. We haven't seen much variation in trend. And so not a reason to think that there will be.

再次強調，我們不會以與 OEM 相同的比例來衡量積壓訂單，以進行大量的大型商業化生產。但正如我們所說，我認為，在發布或評論中，積壓仍然很嚴重。我們沒有看到趨勢有太大變化。所以沒有理由認為會有。

Yes. And most of our commercial unitary products go at once. It's a replacement demand. So there is no backlog.

是的。我們的大多數商業單一產品都會立即消失。這是一種替代需求。所以沒有積壓。

Always remember to put it in perspective, commercial for us is about 15% of what we do. Between 15% and 20% of what we do.

永遠記得要正確看待，商業對我們來說大約占我們所做工作的 15%。我們所做工作的 15% 到 20% 之間。

The next question comes from Jeff Hammond with KeyBanc Capital Markets Inc.

下一個問題來自 KeyBanc Capital Markets Inc. 的 Jeff Hammond。

So I heard a bunch of different things on gross margin. I wanted to come back to that. It sounds like transaction margin moving in the right direction. You got these kind of headwinds that carry over maybe 1Q, 2Q. Just I mean maybe level set us on how you think about gross margins for 2024. Is that kind of 27% margin doable? Or do we kind of run a little bit below that given some of the moving pieces?

所以我聽到了很多關於毛利率的不同說法。我想回到這個主題。聽起來交易保證金正朝著正確的方向發展。這些不利因素可能會持續到第一季、第二季。我的意思是，也許讓我們了解您對 2024 年毛利率的看法。27% 的利潤率可行嗎？或者考慮到一些變化因素，我們的運行速度是否會低於該水平？

Barry and Paul, do you want to deal with that?

巴里和保羅，你們想解決這個問題嗎？

Yes. Yes, I'll handle it. Well, first, I want to go back to the transaction margin. A.J. mentioned that, and it's important to emphasize that I think, so for the year, which I really want to speak about the year. In the year, the headwind, in terms of all this noise about weighted average cost gains and inflation and so on. That headwind in 2023 was about 120 basis points. And that's what we expect that to diminish greatly, importantly as we get into 2024.

是的。是的，我會處理的。嗯，首先，我想回到交易保證金。 A.J.提到這一點，重要的是要強調這一點，我認為，對於這一年，我真的很想談論這一年。今年，逆風，關於加權平均成本收益和通貨膨脹等所有這些噪音。 2023 年的阻力約為 120 個基點。我們預計這種情況會大大減少，重要的是隨著我們進入 2024 年。

The margin gain, the selling margin gain in the year was 70 basis points. So the -- that transactional margin that we make by improving pricing, improving everything we do relative to price and margin did improve in 2023. So the question for 2024 is can that continue? Can that trend continue? And then some of these other [further] noise diminishes, I would say, has largely diminished.

利潤率成長，當年銷售利潤率成長了 70 個基點。因此，我們透過提高定價、改善我們所做的一切與價格和利潤相關的事情而獲得的交易利潤在 2023 年確實有所改善。所以 2024 年的問題是這種情況能持續下去嗎？這種趨勢能持續下去嗎？然後，我想說，其他一些[進一步]噪音已經大大減少。

So to answer your question, we're going to stick with 27% of the goal for next -- for 2024. And there's some good momentum in the selling margin and some of these other pricing action discussions we're having will have to play out as we think in the second, third quarter, especially for that to play out. But I think it's where we stand today.

因此，為了回答你的問題，我們將堅持 2024 年下一個目標的 27%。銷售利潤率有一些良好的勢頭，我們必須進行一些其他定價行動討論正如我們在第二、第三季度所想的那樣，尤其是在這一點上。但我認為這就是我們今天的立場。

Including the transition to the A2L products, that will be -- have to see how that plays out in the market as well.

包括向 A2L 產品的過渡，這也必須看看市場上的表現如何。

And just to clarify, the non-equipment down 6, did you have negative price in there where there were some actually real disinflation around whether it be refrigerant or copper steel?

澄清一下，非設備價格下降了 6，是否存在負價格，無論是冷媒還是銅鋼，都存在一些真正的通貨緊縮？

I don't -- yes, go ahead.

我不——是的，繼續吧。

Go ahead, Paul. You got it.

繼續吧，保羅。你說對了。

I don't think there was much of the way of a deflation that was really occurring there. Yes, we had a couple of product areas where we did see some price degradation, but it stabilized and came back. But I just think it was overall demand. And we just saw a slowdown in demand on those products.

我認為那裡並沒有真正發生通貨緊縮。是的，我們在幾個產品領域確實看到了一些價格下降，但它穩定下來並恢復了。但我認為這是總體需求。我們剛剛看到這些產品的需求放緩。

Okay. And then just last one. On the -- Barry, you talked about kind of being a merchant and you've got pricing kind of a little bit later but you're also kind of managing dry down inventory. So how should we think about kind of buying ahead of price increases to be a merchant versus managing inventories lower as you go into the selling season?

好的。然後就是最後一張。關於——巴里，你談到了作為一名商人，你稍後會得到定價，但你也在管理乾涸的庫存。那麼，作為商家，我們應該如何考慮在價格上漲之前購買，還是在進入銷售季節時控制庫存？

Yes. I mean is it more direct question whether we're buying Ford in some way and beating the price increase and so on. I'm not going to, again, publicly say what we do in terms of competing for -- but it's not a practice that we -- we entertain on scale. I think we look at it here and there. We look at it market by market. At no time do we look at Watsco as a scaled company and say, "Let's buy Ford." And it's not something that really is a responsible thing to do in that sense. So I think in markets we consider it and certain brands we consider it, but nothing on scale that would be remarkable, Jeff.

是的。我的意思是，這是一個更直接的問題，我們是否以某種方式購買福特並擊敗價格上漲等。我不會再公開談論我們在競爭方面所做的事情，但這不是我們規模化的做法。我想我們會到處看看。我們逐一市場地看待它。我們在任何時候都不會將 Watsco 視為一家規模化的公司並說：“讓我們購買福特吧。”從這個意義上來說，這並不是一件真正負責任的事。所以我認為在市場上我們會考慮它，在某些品牌上我們也會考慮它，但在規模上沒有什麼是值得注意的，傑夫。

Yes, I would say we are emerging, but we don't bet the ranch, and we take a risk-adjusted approach to where we invest.

是的，我想說我們正在崛起，但我們不會把賭注押在牧場上，我們對投資地點採取風險調整的方法。

Plus, Jeff, I think you've got the phase-in, phase-out of we're going to be phasing out of Ford, and phasing into the A2L product. So I think right now, we'll buy -- we'll buy a product that we need when we need it.

另外，Jeff，我認為您已經了解了我們將逐步淘汰福特並逐步採用 A2L 產品的情況。所以我認為現在我們會購買——我們會在需要時購買我們需要的產品。

Was there a follow-up, Mr. Hammond?

哈蒙德先生，有後續行動嗎？

No.

不。

(Operator Instructions) The next question comes from Steve Tusa with JPMorgan.

（操作員說明）下一個問題來自摩根大通的 Steve Tusa。

So just to get the math down on the kind of resi unit sell-through, it looks like if we kind of parse that between light commercial and resi, that was down roughly 10% for the year, the resi stuff, on units? It was down 8%, including up commercial?

因此，為了計算 Resi 單位的銷售量，看起來如果我們在輕型商業和 Resi 之間進行解析，那麼今年 Resi 的單位銷量下降了大約 10%？下跌了 8%，其中包括商業上漲？

Let's see. We don't really -- I mean, we don't include commercial in our unit volume discussion, Steve, (inaudible) residential.

讓我們來看看。我們實際上沒有——我的意思是，我們的單位體積討論中不包括商業，史蒂夫，（聽不清楚）住宅。

Okay. That's great. And I guess, just thinking about the gross margin, I mean, there's just such a wide gulf between what you did this quarter and what you did last first quarter. Can you just give us -- and you mentioned the price increases are coming a little bit later. Can you just give us any flavor for like where that 1Q might land in this whole construct? On gross margin?

好的。那太棒了。我想，只要考慮一下毛利率，我的意思是，你本季的表現與上一季的表現之間存在著巨大的差距。您能否告訴我們—您提到價格上漲將在稍後進行。您能否給我們一些關於 1Q 可能落在整個構造中的位置的資訊？毛利率？

I would say without constituting official guidance, I think I tried to say it earlier, which is something sequentially better than the fourth quarter, start looking at things more sequentially than year-over-year. It takes some of the year ago volatility out. So an improvement sequentially from what you saw this in quarter into the first quarter.

我想說的是，在不構成官方指導的情況下，我想我早些時候曾說過，這比第四季度的情況要好，開始比去年同期更連續地看待事情。它消除了一年前的一些波動。因此，從您在第一季看到的情況來看，情況有所改善。

Right. So not up year-over-year, but something better than the fourth quarter?

正確的。那麼同比沒有成長，但比第四季好？

That's correct.

這是正確的。

Yes. Okay. That's helpful. And I guess this whole discussion on pricing, are you assuming that the non-A2L products that you get price on those? I mean you're making it sound like the degree of price you get will depend on what kind of A2L product you sell. Are you assuming some lift on the non-A2L equipment? And then secondarily, if there is some pushback in the channel, are you kind of prepared to ask your OEMs to kind of help you guys maintain or gain share in this market with price?

是的。好的。這很有幫助。我想，關於定價的整個討論，您是否假設您獲得的非 A2L 產品的價格是這樣的？我的意思是，您的說法聽起來好像您獲得的價格取決於您銷售的 A2L 產品類型。您是否假設非 A2L 設備有一定提升？其次，如果通路中存在一些阻力，你是否準備好要求你的原始設備製造商以價格的方式幫助你們維持或獲得這個市場的份額？

Those are all great questions of what if. Obviously, we keep in constant contact with our OEMs, and we'll be -- we'll be ready to make any sort of a judgment that is required to be competitive in the marketplace. We're not going to lose our competitiveness. And our OEMs certainly are not of that vein either. So yes, we'll be working with them on that. One thing that makes the A2L introduction unusual, if you remember when we went from the 410A to the R-22, 410A was introduced 5 or 6 years before we transitioned over to -- transitioned out of the R-22. So you had a price basis that gradually was inserted over that 6-year period before we actually implemented the transition.

這些都是關於假設的重要問題。顯然，我們與我們的原始設備製造商保持持續聯繫，我們將準備好做出在市場上具有競爭力所需的任何判斷。我們不會失去競爭力。我們的原始設備製造商當然也不屬於這種類型。所以是的，我們將在這方面與他們合作。有一件事讓 A2L 的引入與眾不同，如果你還記得我們從 410A 轉向 R-22 的時候，410A 是在我們從 R-22 過渡到之前 5 或 6 年引入的。因此，在我們實際實施過渡之前的 6 年期間，您已經逐漸插入了一個價格基礎。

This time, we're not going to have that. So I think there's a lot of question marks around exactly how this price can be set. And will the price go up or will it be set too lower, will it be set too high? And so that's a what if that -- I guess I'm not smart enough to answer.

這一次，我們不會再有這樣的事了。所以我認為這個價格究竟要如何設定還有很多問號。價格會上漲還是定得太低、會定得太高？所以這就是一個假設──我想我不夠聰明，無法回答。

Yes. I think it's more of a when, not if because I think different customer segments will adopt the new products sooner and -- than others and the prices will shake out as all this transpires and it's not going to happen in Q1. We know that. And so really the summer that we'll see how it works out in the market.

是的。我認為這更多的是一個“何時”，而不是“是否”，因為我認為不同的客戶群會比其他客戶群更快地採用新產品，而且隨著這一切的發生，價格將會發生變化，而這不會在第一季發生。我們知道。到了夏天，我們就會看到它在市場上的表現。

But -- are you assuming capture on the older -- are you assuming price capture on the non-A2L? Or is most of the price lift from the A2Ls?

但是，您是否假設在較舊的設備上捕獲了價格，您是否假設在非 A2L 上捕獲了價格？或者說大部分的價格上漲都是 A2L 帶來？

We have not assumed the price that there's going to be captured on the 410. There's going to be some sort of spread that we're going to keep (inaudible). We've got the price increase so far for the 410, it's not anticipated that we're going to be able to price that up against the A2L. I don't think anybody is assuming that.

我們沒有假設 410 上將要捕獲的價格。我們將保留某種價差（聽不清楚）。到目前為止，我們已經對 410 進行了提價，預計我們無法將其定價與 A2L 相比。我認為沒有人這麼認為。

Against the A2L. I'm just saying like-for-like relative to where the price was in '23 for the non-A2L, like do you assume year-over-year capture if A2L wasn't happening, would you assume year-over-year capture on the 410A type product?

對抗A2L。我只是說相對於 23 年非 A2L 的價格而言，如果 A2L 沒有發生，你是否假設逐年捕獲，你會假設逐年捕獲嗎？捕獲410A型產品？

Certainly. With the price increases that we have, yes, of course.

當然。隨著我們的價格上漲，是的，當然。

Yes.

是的。

It was referred to as coming later this year.

據稱它將在今年稍後推出。

Yes, I want to be really clear about that. So Paul mentioned earlier, if we range it out across really -- we sell 6 OEMs products on the ducted side, probably another 6 on the ductless side. And the range of price consistently across the group is between 4% and 6% as we said earlier. Your question is, do you expect to yield any of that in 2024? And the answer is yes. To what extent, time will tell. But we certainly do not see outliers and if there's a competitive need in the market or a customer type or an application, OEMs will always be asked to participate and react to what's going on in the market. But on whole, on scale, we do expect price capture on 410A.

是的，我想澄清這一點。 Paul 之前提到過，如果我們真的進行範圍劃分的話，我們會在管道側銷售 6 種 OEM 產品，在無管道側可能還會銷售 6 種產品。正如我們之前所說，整個集團的價格範圍始終在 4% 到 6% 之間。您的問題是，您預計在 2024 年能實現這些目標嗎？答案是肯定的。到什麼程度，時間會告訴我們答案。但我們當然不會看到異常值，如果市場或客戶類型或應用程式有競爭需求，原始設備製造商將始終被要求參與並對市場上發生的事情做出反應。但總體而言，就規模而言，我們確實預期 410A 的價格會上漲。

And then sorry, I just got one more. The call usually ends early, so hopefully, I'm not taking up anybody's time here. But the 2.5 million to 3 million units you mentioned, what's kind of the math on that? And can you just explain that, what you meant by that, the 2.5 to 3 units that you're calculating is being installed at the peak?

然後抱歉，我又拿到一張了。通話通常會提前結束，所以希望我不會佔用任何人的時間。但是你提到的250萬到300萬個單位，具體又是怎樣的數學計算呢？您能否解釋一下，您計算的 2.5 到 3 個單元安裝在高峰期是什麼意思？

Well, if you look at -- the 2019 is your baseline at roughly 8.5 million units. And then we zoomed up to (inaudible) we stayed above $10 million in 2023, the industry shipments fell back down to 2019 a little bit ahead. So if you take a normal, let's say, 2% or 3% growth rate that the industry historically has had, put that against where we were in 2019 and take the delta.

好吧，如果你看一下——2019 年是你的基準，大約是 850 萬台。然後我們放大到（聽不清楚）我們在 2023 年保持在 1000 萬美元以上，行業出貨量回落到 2019 年，稍稍領先。因此，如果您採用該行業歷史上的正常成長率（假設為 2% 或 3%），請將其與 2019 年的成長率進行比較，然後採用增量。

Got it. Okay. Great. So that's the pull forward, you're saying like kind of the opposite end?

知道了。好的。偉大的。這就是向前的拉力，你是說有點相反？

Yes. That looked like a pull forward to me. Yes. Like I indicated to you, one, we've got to look at it geographically because you have longer lag spans, obviously, in Michigan than you do in Miami, Florida.

是的。這對我來說似乎是一種推動。是的。正如我向您指出的，第一，我們必須從地理角度來看待它，因為顯然，密西根州的滯後跨度比佛羅裡達州邁阿密的滯後跨度更長。

The next question comes from Damian Karas with UBS.

下一個問題來自瑞銀集團的達米安卡拉斯。

I have a follow-up question on inventory. I know you talked about normalizing back to kind of 4 to 5 turns over time. Just curious if you're anticipating though, later this year, maybe having to go in a restocking mode as the 454B equipment becomes available and then basically, you kind of get your last call on getting that 410A. And related to that, I'm just curious if there's any incremental cost that you might expect just as you're kind of managing the legacy versus the A2L inventory buckets? Or can you do that pretty efficiently?

我有一個關於庫存的後續問題。我知道您談到隨著時間的推移恢復到 4 到 5 回合的正常化。只是好奇，如果您預計，今年晚些時候，隨著 454B 設備上市，可能必須進入補貨模式，然後基本上，您會接到最後一次電話購買 410A。與此相關的是，我只是好奇，當您管理遺留庫存與 A2L 庫存桶時，是否會產生任何增量成本？或者你能非常有效地做到這一點嗎？

I think we -- each one of our operating units is developing plans for what we call phase in, phasing in the A2L products and phasing out the 410 products. We have -- and obviously, we have a safeguard that we mentioned earlier with the AIM Act where we can sell the 410A all the way through next year. But each one of our operating units is working on that plan so that we want to be able to hit our inventory targets. We want to be able to hit the demands of the marketplace and our contractors. And we want to be able to do it in a very logical format so that it's not disruptive to the business and it's not creating additional overhead for us.

我認為我們的每個營運部門都在製定我們所說的「逐步引入」計劃，即逐步引入 A2L 產品和逐步淘汰 410 產品。我們已經——顯然，我們有我們之前提到的《AIM 法案》的保障措施，我們可以在明年一直銷售 410A。但我們的每個營運部門都在製定該計劃，以便我們希望能夠達到我們的庫存目標。我們希望能夠滿足市場和承包商的需求。我們希望能夠以一種非常合乎邏輯的格式來完成它，這樣就不會破壞業務，也不會為我們帶來額外的開銷。

Okay. Got it. And then kind of a follow-up question to a comment you made, Barry, about you sell 6 OEM products on the ducted side, 6 on the ductless side I mean it does peer off. There's a lot of kind of newer players trying to make moves in the U.S. market, particularly in heat pumps and some of these alternative electric high-efficiency solutions. Would you guys foresee working with more equipment vendors over time? Or are you pretty kind of satisfied and set in your existing relationships and product breadth?

好的。知道了。然後是對您發表的評論的後續問題，巴里，關於您在管道側銷售 6 種 OEM 產品，在無管道側銷售 6 種產品，我的意思是它確實是相互排斥的。有許多新的參與者試圖在美國市場採取行動，特別是在熱泵和一些替代性電力高效解決方案方面。你們預計隨著時間的推移會與更多的設備供應商合作嗎？或者您對現有的關係和產品範圍相當滿意並已定型嗎？

Are you satisfied, Barry?

巴里，你滿意嗎？

It's like a -- I want to give like a half hour answer to that honestly. I mean I don't think we look at our portfolio of brands and say, do we have enough or too much. I don't think we can even consider that kind of notion. We look at the markets themselves. So where we've acquired great businesses, we've acquired a great Carrier distributor in Chicago 3 years ago.

這就像——我想誠實地給出半小時的答案。我的意思是，我不認為我們會審視我們的品牌組合併說，我們的品牌是否足夠或太多。我認為我們甚至不能考慮這種想法。我們關注市場本身。因此，我們在三年前收購了出色的企業，並在芝加哥收購了一家出色的開利經銷商。

We acquired a great [green] distributor in Louisiana a few years ago. The acquisition campaign is somewhat indifferent to brand. It's focused on who are the dominant players in markets and over time, building incredible franchises on top of the credible franchise that owners had built, so I would say that from that growth perspective, and if you ask me, can Watsco double in size, the answer is yes, and we would do it that way.

幾年前，我們在路易斯安那州收購了一家出色的[綠色]經銷商。收購活動對品牌有些冷漠。它的重點是誰是市場上的主導者，隨著時間的推移，在所有者建立的可信特許經營權之上建立令人難以置信的特許經營權，所以我想說，從增長的角度來看，如果你問我，Watsco 的規模能否翻倍，答案是肯定的，我們也會這樣做。

And oddly enough, ironically enough, the brands are relatively indifferent to that strategy because we're trying to grow share in markets and legacies and that's what we've done, right? I mean we were a $1 billion company 20 years ago. We're a $7 billion company now, and we know we can double the size of Watsco in that same kind of way of growing over the long term. Now if your question is very short term and kind of the puzzle pieces that we operate today, we're not going to be satisfied in less unless market share is well above average end markets.

奇怪的是，諷刺的是，品牌對這一策略相對漠不關心，因為我們正在努力增加市場份額和遺產，而這正是我們所做的，對嗎？我的意思是，20 年前我們是一家價值 10 億美元的公司。我們現在是一家價值 70 億美元的公司，我們知道我們可以透過同樣的長期成長方式將 Watsco 的規模擴大一倍。現在，如果您的問題是非常短期的，並且是我們今天運營的拼圖，那麼除非市場份額遠高於終端市場的平均水平，否則我們不會滿足於更少。

And we're going to find either build on relationships we have and add brands, with Carrier, I don't think people really appreciate it. But we sell 7, 8 different brands that Carrier makes and we don't have all of Carrier brands at all of our Carrier locations, and that's an opportunity that we talk about in terms of how to bring more density to those brands and those stores. And we've added -- there are niche products and manufacturers that operate in niches that we've added to our network. This ductless that we've added to our network. We have a private label that's grown over time. So very interesting question with a very long-tailed answer.

我們將發現，要么建立在我們現有的關係基礎上，要么增加品牌，與開利合作，我認為人們並不真正欣賞它。但我們銷售 Carrier 生產的 7、8 個不同品牌，而我們的所有 Carrier 門市並沒有擁有所有 Carrier 品牌，這是我們談論如何為這些品牌和商店帶來更高密度的機會。我們還補充說，我們已將一些利基產品和製造商在我們的網路中添加到利基市場中運作。我們已將這種無管道添加到我們的網路中。我們擁有一個隨著時間的推移而不斷發展的自有品牌。這是一個非常有趣的問題，答案也很長。

I'll say this is that we're never satisfied. That's part of our culture. We're very ambitious. We're always wanting to grow, always want to move up and to the right. It's an exciting time in the industry as heat pumps have gained traction and regulation, frankly, and the changing markets are creating product innovation for the first time I think in a long time, and it's exciting.

我想說的是，我們永遠不會滿足。這是我們文化的一部分。我們非常雄心勃勃。我們總是想成長，總是想向上、向右發展。坦白說，這是行業中一個激動人心的時刻，因為熱泵已經獲得了關注和監管，而且我認為很長一段時間以來，不斷變化的市場第一次創造了產品創新，這令人興奮。

And that innovation is not only coming from new entrants, but it's also coming from our OEM partners with products that they've brought to market or that they will bring to market. It's fun and exciting with the improvement and enhancements in the technology that's coming into the product and it will be fun to take in the market as well.

這種創新不僅來自新進者，還來自我們的 OEM 合作夥伴以及他們已經推向市場或將推向市場的產品。產品中技術的改進和增強既有趣又令人興奮，進入市場也很有趣。

Really appreciate the color. Best of luck, guys. And Barry, I'll make sure I follow up, so you can give you the full 30-minute response.

真的很欣賞這個顏色。祝你好運，夥計們。巴里，我會確保跟進，以便您可以在 30 分鐘內給出完整的答案。

This concludes our question-and-answer session. I would like to turn the conference back over to Albert Nahmad for any closing remarks.

我們的問答環節到此結束。我想將會議轉回阿爾伯特·納哈邁德（Albert Nahmad）發表閉幕詞。

Thanks for your interest in our company. We much appreciate it. And we believe that we have an enormous future ahead of us, and we hope you'll be with us along the way. Bye-bye.

感謝您對我們公司的興趣。我們非常感激。我們相信，我們擁有廣闊的未來，希望您與我們一路同行。再見。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。