UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________________ to ____________________ Commission file number: 0-18953 AAON, INC. (Exact name of registrant as specified in its charter) Nevada 87-0448736 (Sta ...

AAON, Inc. (NASDAQ:AAON) Q2 2022 Earnings Conference Call August 8, 2022 5:15 PM ET Company Participants Joe Mondillo - Director, Investor Relations Rebecca Thompson - Chief Financial Officer & Treasurer Gary Fields - President & Chief Executive Officer Conference Call Participants Julio Romero - Sidoti & Company Brent Thielman - D.A. Davidson Jon Braatz - Kansas City Capital Operator Good day, and welcome to the AAON Inc. Second Quarter 2022 Earnings Conference Call. All participants will be in a listen-on ...

[PART I – FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents AAON, Inc.'s unaudited consolidated financial statements for Q2 2022, detailing balance sheets, income, equity, and cash flows, reflecting sales growth, decreased profitability, and significant cash usage Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :--- | :--- | :--- | | Total Current Assets | $327,412 | $218,080 | | Total Assets | $776,712 | $650,180 | | Total Current Liabilities | $136,169 | $86,768 | | Revolving credit facility, long-term | $106,249 | $40,000 | | Total Liabilities | $286,206 | $183,990 | | Total Stockholders' Equity | $490,506 | $466,170 | Consolidated Statement of Income Highlights (Unaudited) | Metric | Three Months Ended June 30, 2022 (in thousands) | Three Months Ended June 30, 2021 (in thousands) | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $208,814 | $143,876 | $391,585 | $259,664 | | Gross Profit | $47,376 | $42,107 | $93,440 | $75,264 | | Income from Operations | $20,453 | $25,212 | $43,463 | $43,673 | | Net Income | $15,946 | $20,615 | $34,005 | $36,991 | | Diluted EPS | $0.30 | $0.38 | $0.63 | $0.69 | Consolidated Statement of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(1,580) | $62,912 | | Net cash used in investing activities | $(49,437) | $(33,126) | | Net cash provided by financing activities | $65,740 | $45 | [Notes to the Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies, the BasX acquisition's impact, disaggregated revenue by segment, and challenges from inflation, supply chain, and debt - The company acquired BasX, LLC on December 10, 2021, and began including its results in the consolidated financial statements from December 11, 2021, with the acquisition costing **$100.0 million** in cash and up to **$80.0 million** in contingent stock consideration[13](index=13&type=chunk)[44](index=44&type=chunk) - The company is facing challenges from raw material price inflation (copper, steel), supply chain disruptions, and a tight labor market, which has led to multiple wage increases in 2021 and 2022[22](index=22&type=chunk)[23](index=23&type=chunk) Disaggregated Net Sales by Segment (Q2 2022 vs Q2 2021) | Segment | Q2 2022 Net Sales (in thousands) | Q2 2021 Net Sales (in thousands) | | :--- | :--- | :--- | | AAON Oklahoma | $157,481 | $126,266 | | AAON Coil Products | $26,754 | $17,610 | | BasX | $24,579 | $0 | | **Total** | **$208,814** | **$143,876** | - The revolving credit facility was amended on May 27, 2022, increasing the maximum borrowing capacity to **$200.0 million**, with the outstanding balance growing from **$40.0 million** at year-end 2021 to **$106.2 million** as of June 30, 2022[76](index=76&type=chunk) - As of June 30, 2022, **486,268 shares** related to the 2021 earn-out milestone for the BasX acquisition had been issued to the former owners[126](index=126&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses record backlog, 45.1% Q2 sales growth driven by BasX and price increases, but declining gross margins due to inflation, and liquidity strategy using cash and an expanded $200 million credit facility [Overview](index=30&type=section&id=MD%26A%20-%20Overview) AAON's business overview covers HVAC manufacturing, market factors, go-to-market strategy, raw material inflation, six price increases, and a record **$464.0 million** backlog - The company's backlog reached a record level of **$464.0 million** at June 30, 2022, a **236%** increase from **$138.1 million** at June 30, 2021, with organic backlog (excluding BasX) increasing **163.6%**[156](index=156&type=chunk) - Significant raw material price inflation continues, with the 12-month trailing average price for copper, galvanized steel, stainless steel, and aluminum increasing **33.1%**, **35.5%**, **69.2%**, and **8.1%**, respectively, as of June 30, 2022 compared to the prior year[153](index=153&type=chunk) - To offset inflationary pressures, the company implemented **three price increases in 2021** and **three additional price increases in 2022** (effective January 1, March 29, and June 1)[155](index=155&type=chunk) [Results of Operations](index=31&type=section&id=MD%26A%20-%20Results%20of%20Operations) Q2 2022 net sales grew **45.1%** to **$208.8 million**, but gross profit margin declined to **22.7%** due to rising costs, while SG&A expenses increased to **12.9%** of sales Segment Gross Profit Margin Comparison (Q2 2022 vs Q2 2021) | Segment | Q2 2022 Gross Profit Margin | Q2 2021 Gross Profit Margin | | :--- | :--- | :--- | | AAON Oklahoma | 20.2% | 30.3% | | AAON Coil Products | 31.7% | 22.1% | | BasX | 29.2% | N/A | - The decline in AAON Oklahoma's gross profit was due to working through lower-priced backlog while costs increased, whereas AAON Coil Products and BasX were able to reprice their backlogs more quickly, resulting in improved or healthy margins[163](index=163&type=chunk)[165](index=165&type=chunk) - For the six months ended June 30, 2022, total net sales increased **50.8%** to **$391.6 million**, while gross profit margin decreased to **23.9%** from **29.0%** in the prior-year period[169](index=169&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=MD%26A%20-%20Liquidity%20and%20Capital%20Resources) Liquidity is managed via operating cash flow and an expanded **$200.0 million** credit facility, with negative operating cash flow of **$1.6 million** in H1 2022 due to increased working capital and **$49.4 million** in investing activities - The company's revolving credit facility was increased to **$200.0 million**, with **$106.2 million** outstanding as of June 30, 2022[175](index=175&type=chunk) - Net cash used in operating activities was **$1.6 million** for H1 2022, compared to **$62.9 million** provided in H1 2021, primarily due to a **$53.7 million** increase in accounts receivable and a **$33.9 million** increase in inventories[189](index=189&type=chunk)[191](index=191&type=chunk) - Investing activities used **$49.4 million** in H1 2022, which included **$22.0 million** for the purchase of the BasX building and **$27.2 million** in other capital expenditures, with the capital expenditure program for 2022 estimated to be approximately **$73.3 million**[189](index=189&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) - Financing activities provided **$65.7 million** in H1 2022, mainly from **$94.9 million** in borrowings under the revolving credit facility, partially offset by **$5.9 million** in stock repurchases[189](index=189&type=chunk)[194](index=194&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company manages commodity price volatility, a key market risk, through fixed-price contracts with major suppliers, typically lasting six to 18 months - The company is exposed to volatility in commodity prices and uses fixed-price contracts with suppliers for periods of **six to 18 months** to manage this risk[201](index=201&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management, including CEO and CFO, concluded disclosure controls were effective, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2022[202](index=202&type=chunk) - No changes in internal control over financial reporting occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls[203](index=203&type=chunk) [PART II – OTHER INFORMATION](index=41&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings.) The company is involved in routine legal actions, with management concluding that pending litigation is unlikely to materially affect its business or financial position - The company states that the likelihood of any pending litigation having a material adverse effect on its business or financial condition is remote[205](index=205&type=chunk) [Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors.) This section refers to the 2021 Annual Report on Form 10-K for detailed risk factors, noting no material changes to previously disclosed risks - There have been no material changes to the risk factors included in the company's 2021 Annual Report on Form 10-K[206](index=206&type=chunk) [Unregistered Sales of Equity and Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20and%20Securities%20and%20Use%20of%20Proceeds.) This section details Q2 2022 stock repurchases of **52,455 shares** and the issuance of **486,268** unregistered shares for the BasX acquisition earn-out Issuer Purchases of Equity Securities (Q2 2022) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2022 | 16,124 | $52.39 | | May 2022 | 16,236 | $51.83 | | June 2022 | 20,095 | $54.69 | | **Total** | **52,455** | **$53.10** | - As of June 30, 2022, **486,268 shares** related to the BasX acquisition's 2021 earn-out milestone were issued to former owners in a private placement exempt from SEC registration under Rule 506(b)[210](index=210&type=chunk) [Exhibits](index=43&type=section&id=Item%206.%20Exhibits.) This section lists filed exhibits, including CEO and CFO certifications and interactive data files (iXBRL) for the financial statements - Filed exhibits include CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[212](index=212&type=chunk) - Interactive data files (iXBRL) for the consolidated financial statements and notes are included as Exhibit 101[212](index=212&type=chunk)

Financial Data and Key Metrics Changes - Net sales increased by 57.8% to $182.8 million from $115.8 million, driven by organic volume growth of approximately 21.3% and an acquisition contribution of 18.1% [7] - Gross profit rose by 38.9% to $46.1 million, with a gross margin of 25.2%, down from 28.6% in Q1 2021, impacted by higher material costs and wage increases [8][12] - Net income increased to $18.1 million or 9.9% of sales compared to $16.4 million or 14.1% of sales in Q1 2021, with diluted earnings per share rising by 10% to $0.33 [13] Business Line Data and Key Metrics Changes - Selling, general and administrative (SG&A) expenses increased by 56.9% to $23.1 million, but as a percentage of sales, it decreased to 9.7% from 12.7% in the previous year [11] - Capital expenditures for the quarter were $14 million, with expectations for total capital expenditures for the year to be approximately $100.4 million [14] Market Data and Key Metrics Changes - Backlog as of March 31 was $461.4 million, up from $260 million at the end of December and $96.7 million at the end of Q1 2021, representing a 305% organic increase year-over-year [19] - Orders in the quarter were up 150% organically year-over-year, indicating significant market share gains [20] Company Strategy and Development Direction - The company is focused on improving production capacity and operational efficiencies, with record production rates achieved in Q1 [15][21] - New product introductions, such as water source heat pumps, are contributing positively to market demand, alongside strong replacement demand and new construction trends [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the second quarter, anticipating improvements in sales, margins, and earnings throughout the year, particularly in the second half [28] - Supply chain issues are easing, and the company is confident in its ability to manage costs and improve margins sequentially [44][45] Other Important Information - The acquisition of BasX Solutions is progressing well, with strong backlog and order trends, and revenue synergies developing faster than expected [27][54] - The company is transitioning to in-house production of fan wheels to enhance supply chain control and reduce vulnerability [50][51] Q&A Session Summary Question: What are the drivers of organic order growth and which product lines are seeing a surge? - Management noted broad-based product family growth, with significant orders for modular data centers and a 17% year-over-year increase in headcount in the legacy business [29][31] Question: How will the backlog convert into revenue throughout the year? - Management indicated that while the growth rate from Q4 to Q1 is not sustainable, they expect a small double-digit increase in revenue production for Q2, supported by a strong backlog [33][34] Question: Is the company comfortable with the current backlog level? - Management expressed a desire to draw down the backlog for revenue recognition but emphasized that they are not concerned about order intake [37][39] Question: What factors will contribute to achieving target margins by the end of the year? - Management highlighted that stabilizing costs and effective backlog management will lead to sequential margin improvements throughout the year [42][44] Question: Will SG&A expenses see better leverage as sales increase? - Management anticipates some leverage on SG&A expenses as they focus on adding production workers rather than overhead personnel [46]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________________ to ____________________ Commission file number: 0-18953 AAON, INC. (Exact name of registrant as specified in its charter) Nevada 87-0448736 (State o ...

Financial Data and Key Metrics Changes - Net sales increased by 16.8% to $136.3 million in Q4 2021 from $116.7 million in Q4 2020, primarily due to price increases contributing approximately 10% [6] - Gross profit decreased by 21.7% to $26.5 million, with gross profit as a percentage of sales dropping to 19.5% from 29.1% in the prior year, mainly due to supply chain issues and rising material costs [7] - Adjusted net income decreased by 35.5% to $9.5 million or 7% of sales, compared to $14.8 million or 12.7% of sales in the previous year [8] - For the full year 2021, net sales were up 3.9% to $534.5 million from $514.6 million in 2020, with adjusted net income decreasing by 17.1% to $62.1 million [9][13] Business Line Data and Key Metrics Changes - Selling, general and administrative (SG&A) expenses increased by 44.4% to $21.1 million in Q4 2021, with a year-over-year increase of 14.4% when excluding acquisition-related fees [8] - For the full year, SG&A expenses increased by 13.4% to $68.6 million, with SG&A as a percentage of sales increasing to 12% from 11.8% in 2020 [11][12] Market Data and Key Metrics Changes - Total backlog increased by 250% year-over-year and 43% quarter-over-quarter, with organic backlog up 201% year-over-year [28] - Organic bookings in Q4 were up 67% year-over-year, indicating strong demand [29] Company Strategy and Development Direction - The company aims for double-digit organic revenue growth over the next several years, supported by a strong backlog and strategic focus on high-performance energy-efficient HVAC equipment [21][30] - The acquisition of BasX Solutions is expected to generate accelerated growth and attractive returns for shareholders [37] Management's Comments on Operating Environment and Future Outlook - The management highlighted that the industry faced significant challenges over the past year, including rapid inflation and supply chain issues, but expressed optimism about emerging stronger from these challenges [22][27] - Management expects gross margins to recover to 30% or more by the second half of 2022, driven by price increases and improved production rates [53][76] Other Important Information - Capital expenditures for 2022 are expected to be $100.4 million, nearly double the previous year, with a focus on growth-related investments [17][49] - The company reported a working capital balance of $131.3 million and total debt of $40 million as of December 31, 2021 [14] Q&A Session Summary Question: What improvements have been seen in the supply chain? - Management noted significant improvements in supply chain conditions since October, allowing for increased production rates [58][60] Question: Will the company be able to run off the remaining lower-priced backlog in Q1? - Management indicated that a significant portion of production in January was based on higher-priced backlog, with expectations for continued improvement in Q1 [62][64] Question: How are organic order trends expected to change? - Management expressed confidence in strong organic order trends, with trailing 12-month bookings continuing to grow [70] Question: What is the expected impact of the recent price increase? - A 7% price increase was announced, expected to positively impact margins moving forward [71] Question: How has headcount changed in recent months? - Headcount increased by 11% in Oklahoma and 17% in Texas compared to the previous year, indicating growth in workforce [72][75] Question: What are the expectations for gross margins in 2022? - Management expects gross margins to strengthen throughout the year, aiming for a target of 30% or more by year-end [76]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________________________ to _____________________________ Commission file number: 0-18953 AAON, INC. (Exact name of registrant as specified in its charter) Nevada 87-044 ...

AAON, Inc. (NASDAQ:AAON) Q3 2021 Earnings Conference Call November 4, 2021 5:30 PM ET Company Participants Gary Fields - Chief Executive Officer and President Rebecca Thompson - Chief Financial Officer Conference Call Participants Julio Romero - Sidoti & Company Brent Thielman - D. A. Davidson Operator Good afternoon, ladies and gentlemen. Welcome to AAON, Inc Third Quarter Sales and Earnings Call. [Operator Instructions] This call will last approximately 45 minutes to an hour. I would like to turn the meet ...

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