Core Viewpoint - AAON, Inc. is set to announce its fourth quarter and full year 2024 financial results on February 27, 2025, during a scheduled conference call and webcast [1] Group 1: Financial Results Announcement - The quarterly conference call and webcast will take place at 9:00 a.m. EST on February 27, 2025 [1] - Financial results will be released earlier on the same day [1] Group 2: Participation Details - The conference call will be accessible via dial-in for Q&A participation at 1-800-836-8184 [2] - A listen-only webcast is available, requiring registration at the AAON website [2] - A replay of the call will be available on the Company's website the following business day [2] Group 3: Company Overview - AAON, founded in 1988, is a global leader in HVAC solutions for commercial and industrial indoor environments [3] - The Company focuses on designing and manufacturing highly configurable equipment to enhance efficiency, performance, and long-term value [3] - AAON is headquartered in Tulsa, Oklahoma, featuring an innovation center and testing lab for continuous advancement in the industry [3]

Company Overview - Aaon (AAON) shares increased by 5.6% to close at $116.60, following a period of 6.2% loss over the past four weeks, indicating a significant recovery in investor sentiment [1] - The company specializes in commercial and industrial HVAC solutions, benefiting from favorable demand trends for data center equipment and a focus on engineered solutions [2] Financial Performance - Aaon is expected to report quarterly earnings of $0.54 per share, reflecting a year-over-year decrease of 3.6%, while revenues are projected to be $326.4 million, an increase of 6.4% from the previous year [3] - The consensus EPS estimate for Aaon has remained unchanged over the last 30 days, suggesting stability in earnings expectations [4] Industry Context - Aaon operates within the Zacks Building Products - Air Conditioner and Heating industry, where another company, Watsco (WSO), reported a 0.5% increase in shares, closing at $484.31, with a 1.7% return over the past month [4] - Watsco's consensus EPS estimate has increased by 0.2% to $2.13, representing a year-over-year change of 3.4%, and it currently holds a Zacks Rank of 2 (Buy) [5]

Core Viewpoint - The Zacks Building Products - Air Conditioner & Heating industry is poised for growth due to the energy transition and increasing demand for renewable energy solutions, despite inflationary pressures [1] Industry Overview - The industry includes designers, manufacturers, and marketers of products for heating, ventilation, air conditioning, and refrigeration, covering a wide range of equipment and services [2] Trends Influencing the Industry - U.S. administration's pro-environmental initiatives are driving demand for clean energy systems, benefiting companies in the industry [3] - Continuous investments in technology and e-commerce are enhancing customer experience and expanding market reach [4] - Rising costs and regulatory pressures are challenges, but the demand for maintenance and repair services provides stable revenue [5] Industry Performance - The industry ranks 54 in the Zacks Industry Rank, placing it in the top 22% of over 250 Zacks industries, indicating positive near-term prospects [6][7] - Aggregate earnings estimates for the industry have increased, reflecting growing analyst confidence in earnings growth potential [8] Stock Market Performance - The industry has outperformed the broader Zacks Construction sector and the S&P 500, with a 57.4% gain over the past year compared to 24% and 28.5% respectively [10] Current Valuation - The industry is trading at a forward P/E ratio of 33.45X, significantly higher than the S&P 500's 22.69X and the sector's 18.17X [12] Company Highlights - **Comfort Systems USA, Inc. (FIX)**: Experienced a 127.7% stock gain over the past year, with a projected earnings growth of 20.8% for 2025 [15] - **AAON, Inc. (AAON)**: Stock gained 85.6% over the past year, with a strong focus on expanding production capacity and a projected earnings growth of 32.2% for 2025 [19] - **The AZEK Company Inc. (AZEK)**: Achieved a 41.9% stock gain over the past year, with expected earnings growth of 20.8% for fiscal 2025, driven by strong residential demand [22]

Group 1 - Global data centre demand is increasing significantly, benefiting various sectors beyond technology, including infrastructure, basic materials, and services [1] - The value chain extends down to mining operations that explore and produce raw materials essential for data centres [1] - The analysis emphasizes the complex relationships between value drivers, capital flows, and price action in financial markets [1] Group 2 - The research covers a wide range of investment securities, including futures and options markets, indicating a comprehensive approach to market analysis [1] - The company represents a diverse cross-section of financial market participants, including speculators, hedgers, and long-term traders [1]

Core Insights - AAON, Inc. is restructuring its executive leadership to enhance support for strategic growth and operational efficiency as new market opportunities arise [1][5] - The company is expanding its production capacity and geographic presence, highlighted by the establishment of a new facility in Memphis [2] - The leadership changes are aimed at better positioning AAON and its subsidiary BASX to capitalize on industry trends related to regulation and sustainability [2][5] Leadership Changes - Stephen Wakefield has been appointed as Executive Vice President & General Manager of the AAON products business unit, while Matt Shaub will serve in the same capacity for the BASX products business unit, both effective January 1, 2025 [2] - Wakefield has been with AAON since 1999 and has extensive experience in operations and engineering, which will support the company's focus on innovation and customer service [3] - Matt Shaub joined AAON in January 2024 and has a strong background in product management and leadership, enhancing the company's product strategies [4] Strategic Focus - The restructuring is part of a broader initiative to align leadership with long-term goals for AAON's product brands, ensuring a customer-focused approach and innovation [5] - Additional executive alignments will enhance global manufacturing efforts and support functions, with key roles assigned to leaders in manufacturing, sales, and marketing [5] - The company aims to maintain best practices in operations, supply chain, and quality to stay competitive in a rapidly evolving business landscape [5] Company Overview - AAON, founded in 1988, is a leader in HVAC solutions for commercial and industrial environments, known for its innovative and efficient equipment [6] - BASX, a subsidiary of AAON, specializes in high-efficiency data center cooling solutions and has a strong commitment to customer service and product quality [7][8]

Group 1 - AAON, Inc. will participate in the UBS Global Industrials & Transportation Conference on December 4, 2024, with key executives including CEO Gary Fields, President and COO Matt Tobolski, and CFO Rebecca Thompson [1] - The management team is scheduled for a 40-minute fireside chat and will also host in-person one-on-one meetings during the event [2] - AAON, founded in 1988, is a global leader in HVAC solutions, focusing on high-performance and energy-efficient products for commercial and industrial environments [3] Group 2 - The company emphasizes its innovative approach to designing and manufacturing highly configurable HVAC equipment, which enhances efficiency, performance, and long-term value for customers [3] - AAON is headquartered in Tulsa, Oklahoma, where it operates a world-class innovation center and testing lab to advance HVAC technology [3]

Core Insights - AAON, Inc. reaffirms its commitment to the U.S. Department of Energy's Better Buildings Commercial Building Heat Pump Technology Challenge, responding to new regulations with strong partnerships [1][4] - The collaboration with Copeland, Oklahoma State University, Montana State University, and the University of Maryland enhances AAON's capabilities in developing energy-efficient HVAC solutions [2][3] Group 1: Partnerships and Collaborations - Copeland has a 30-year relationship with AAON, providing advanced compressor technology and engineering support crucial for the DOE Challenge [2] - Oklahoma State University contributes research on low global warming potential refrigerants and heat pump system components [2] - Montana State University assists in prototype development, including fan blade design and performance testing [2] - The University of Maryland develops coil technology and software programs that aid in the creation of cold climate air-source heat pumps [3] Group 2: Company Positioning and Strategy - AAON expresses confidence in overcoming challenges through its research and development efforts, supported by its partnerships [4] - The company aims to exceed the objectives set by the DOE, focusing on technological advancements and energy efficiency [4] - Founded in 1988, AAON is recognized as a leader in HVAC solutions, emphasizing customizable equipment for enhanced efficiency and long-term value [4]

Core Viewpoint - AAON, Inc. is expanding its production capacity by acquiring a new 787,000 square foot facility in Memphis, Tennessee, to meet the growing demand from the data center market and create 828 skilled jobs over the next five years [1][3]. Group 1: Expansion Details - The new facility will manufacture various thermal management equipment for data centers under the BASX brand, including air-cooled systems, CRAHs, direct evaporative coolers, and CDUs [2]. - Limited production is expected to begin in early 2025, with full operations anticipated within approximately 12 months [2]. Group 2: Strategic Importance - The expansion is seen as a significant step for AAON to capitalize on the rapidly growing data center market and demonstrates the company's commitment to its customers [3]. - The facility will enhance geographic diversification of AAON's manufacturing footprint, mitigating operational risks and better serving data center clients [1][3]. Group 3: Economic Impact - The investment is expected to positively impact the Memphis community by creating new jobs and enhancing the local economy [3][4]. - Local officials express optimism about AAON's presence, highlighting Memphis as a competitive market for high-quality jobs and sustainable industry growth [4]. Group 4: Company Background - AAON, founded in 1988, is a leader in HVAC solutions for commercial and industrial environments, focusing on energy-efficient and high-performing equipment [5]. - BASX, a subsidiary of AAON, specializes in high-efficiency data center cooling solutions and has a strong commitment to customer service and product quality [6].

X @ α AADV AADV AAON Q3 2024 Earnings Conference Call November 7, 2024 AAON Inc. Forward-Looking Statements and Other References Certain statements and information set forth in this presentation contains "forward-looking statements" and "forward-looking information" within the meaning of the Private Securities Litigation Reform Act of 1995. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements which include management's assessment of future pla ...

Financial Data and Key Metrics Changes - Total revenue grew year-over-year by 4.9% to a record of $327.3 million, up from $312 million in Q3 2023 [29] - Diluted earnings per share increased by 8.6% to $0.63 [32] - Gross margin contracted by 230 basis points to 34.9% compared to 37.2% in Q3 2023 [30] - Adjusted EBITDA margin was 25.3%, marking the third strongest quarter in company history [7] Business Line Data and Key Metrics Changes - The BASX segment saw revenue growth of 58.8%, while the AAON Coil Products segment grew by 36.7%, primarily driven by the data center market [29] - The AAON Oklahoma segment experienced a year-over-year sales decline of 7.1% due to tough comparisons and disruptions from the refrigerant transition [29][24] Market Data and Key Metrics Changes - Bookings in the third quarter were up year-over-year in the mid-single digits, with year-to-date bookings up approximately 27% [8] - Total backlog finished at $647.7 million, up 32% from a year ago, with a significant portion consisting of data center equipment orders [9] Company Strategy and Development Direction - AAON is focusing on becoming a leading player in the data center cooling market, with strong demand for data center equipment expected to continue [10][14] - The company is undergoing significant transformation across departments to sustain long-term growth and efficiency [12] - Capacity expansion projects are underway in both the BASX segment in Oregon and the AAON Coil Products segment in Texas, with a new facility in Memphis planned to accommodate increased production [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the data center market's growth, driven by cloud computing and AI demand, while acknowledging challenges in the non-residential construction sector [17][12] - The company anticipates a near-term lull in demand for the Oklahoma segment due to the refrigerant transition and softening macro environment, but expects demand to accelerate in the following year [26][27] Other Important Information - The company has increased its capital expenditure guidance for 2024 to $215 million, up from $125 million, reflecting investments in capacity expansion [34] - Cash flow from operations improved significantly year-over-year, totaling $191.7 million [33] Q&A Session Summary Question: Expected revenue decline in the Oklahoma segment - Management indicated a potential slight softening in Q4 and Q1 due to backlog reduction but noted a strong pipeline for future growth [45][46] Question: Clarification on Q1 earnings expectations - Management clarified that they do not anticipate a year-over-year decline in Q1, but a modest quarter-over-quarter decline from Q4 [48] Question: Details on the $175 million order - The order is from an existing customer and represents a large-scale deployment of liquid cooling solutions across multiple facilities [49] Question: Transition to new refrigerants - All states have passed necessary legislation for the new refrigerants, with the mandatory cutover date approaching [51] Question: Margin profile of the liquid cooling order - The margin for the liquid cooling order is expected to align with historical BASX segment margins, with potential for expansion as production ramps up [68] Question: Contribution of the new Memphis facility - The new facility is expected to significantly impact revenue, effectively doubling the available square footage for data center products [70]