Financial Data and Key Metrics Changes - Total net sales increased by 22.9% year over year to $322.1 million from $262.1 million in Q1 2024, driven by a 374.8% increase in Basics branded equipment sales [15][9] - Gross profit decreased by 6.4% to $86.4 million, with gross margin at 26.8% compared to 35.2% in Q1 2024 [17][18] - Diluted earnings per share was $0.35, down 23.9% from a year ago, while adjusted earnings were $0.37, down 20% [21][22] - Total backlog reached a record level of $1 billion, up 83.9% year over year and 18.4% quarter over quarter [12][29] Business Line Data and Key Metrics Changes - Sales of Basics branded equipment were up 374.8%, while Aon branded equipment sales declined by 19.1% [9][16] - Gross margin at the Basics segment increased by 350 basis points to 24%, while Aon Coil Products gross margin rose by 100 basis points to 34.6% [26] - Aon Oklahoma segment sales decreased by 23%, primarily due to weak bookings and supply chain issues related to new refrigerants [16][27] Market Data and Key Metrics Changes - Backlog of Aon branded equipment was $44 million, up 44.9% year over year and 23.4% quarter over quarter [29] - Backlog of Basics branded equipment was $623 million, up 122.7% year over year and 15.4% quarter over quarter [33] Company Strategy and Development Direction - The company focuses on three strategic pillars: leading in innovation, driving sustainable organic growth, and being a best-in-class operator [6][7] - The development of heat pumps and custom air solutions is expected to drive market share gains at profitable levels [8] - The company aims to increase production rates significantly in the second quarter, leveraging a strong backlog [12][30] Management's Comments on Operating Environment and Future Outlook - Management noted that while the macroeconomic environment remains uncertain, the sentiment across the sales channel is relatively upbeat [31] - The company anticipates production and profitability improvements in the second quarter, driven by a strong backlog and abating supply chain issues [31][34] - The full-year outlook remains unchanged, with expectations for mid to high teens sales growth and gross margins similar to 2024 [36] Other Important Information - The company plans to host an Investor Day on June 10 in New York City [37] - Capital expenditures for 2025 are anticipated to be approximately $220 million [24] Q&A Session Summary Question: What does K-12 public bid data indicate about industry pricing? - Management indicated that Aon's price premium has contracted, allowing for increased market share [44] Question: What is the current market share for national accounts? - National accounts are currently low in Aon's portfolio, but there is noticeable acceleration in activity and adoption of Aon's products [46][48] Question: How did the rooftop business perform in terms of orders? - Management noted that pushouts from the previous quarter have rebounded, and there is a traditional strengthening of orders [56][60] Question: What is the outlook for the Oklahoma business? - The full-year revenue guidance remains unchanged, with uncertainty primarily in Q4 due to macroeconomic factors [102][104] Question: How is the company positioned regarding tariffs? - Aon is better positioned than competitors due to vertical integration and reliance on US manufacturing, though some tariff impacts are expected [92][94]

Financial Performance - Net sales for Q1 2025 increased 22.9% to $322.1 million, up from $262.1 million in Q1 2024, driven by BASX and AAON Coil Products segments with growth of 138.9% and 287.8% respectively[3][6] - BASX-branded products net sales surged 374.8% year-over-year to $132.6 million, while AAON-branded products net sales declined 19.1% to $189.5 million[6] - Earnings per diluted share decreased 23.9% to $0.35 compared to $0.46 in Q1 2024[5][6] - Net income for Q1 2025 decreased to $29,292,000 from $39,016,000 in Q1 2024, representing a decline of approximately 25.0%[17] - Adjusted EBITDA for Q1 2025 was $56,698,000, down from $60,484,000 in Q1 2024, resulting in a decrease of about 6.0%[24] - Adjusted EBITDA margin for Q1 2025 was 17.6%, compared to 23.1% in Q1 2024, indicating a decline of approximately 5.5 percentage points[24] Backlog and Growth - Total backlog reached a record $1.0 billion, up 83.9% year-over-year, with AAON-branded backlog increasing 44.9% and BASX-branded backlog up 122.0%[3][7] - The COO expressed optimism about production volume increases and backlog conversion rates in the upcoming quarters despite macroeconomic uncertainties[7] Expenses and Profitability - Gross profit margin for Q1 2025 was 26.8%, down from 35.2% in Q1 2024, attributed to lower production volumes at the AAON Oklahoma segment[4][6] - SG&A expenses rose due to higher depreciation and technology-related consulting costs, impacting overall profitability[5][6] Cash and Assets - Cash and cash equivalents stood at $2.4 million with a revolving credit facility balance of $178.0 million as of March 31, 2025[7] - Total current assets increased to $571,744,000 as of March 31, 2025, up from $488,212,000 at the end of 2024, reflecting a growth of about 17.1%[15] - Total assets rose to $1,300,193,000 in Q1 2025, compared to $1,175,234,000 in Q4 2024, marking an increase of approximately 10.6%[15] - Cash, cash equivalents, and restricted cash at the end of Q1 2025 totaled $2,383,000, down from $28,367,000 at the end of Q1 2024, a decrease of about 91.6%[17] - Long-term debt increased to $236,417,000 in Q1 2025 from $138,891,000 in Q4 2024, reflecting a rise of approximately 70.3%[15] - The company reported a net cash used in operating activities of $9,214,000 for Q1 2025, a significant decrease from $92,370,000 provided in Q1 2024[17] - Accounts receivable increased to $164,977,000 in Q1 2025 from $147,434,000 in Q4 2024, representing a growth of about 11.9%[15] Capital Expenditures and Investments - The company plans to invest $220.0 million in 2025 for the new Memphis facility and improvements in existing operations[7] - The company incurred capital expenditures of $46,723,000 in Q1 2025, compared to $34,688,000 in Q1 2024, an increase of approximately 34.7%[17] Dividends - The company increased its dividend by 25.0% to $0.10 per share, reflecting confidence in future growth[7]

Financial Performance - Sales increased by 22.9% year-over-year to $322.1 million[8] - Gross profit margin was 26.8%, a decrease of 840 bps year-over-year but an increase of 75 bps quarter-over-quarter[8] - Adjusted EBITDA was $56.7 million[8] - Adjusted diluted EPS was $0.37, a decrease of 20.0% year-over-year[8] Segment Performance - BASX brand sales increased by 374.8% year-over-year, driven by data center equipment demand, reaching $132.6 million[12,28] - AAON brand sales decreased by 19.1% year-over-year to $189.5 million due to temporary supply chain issues[12,28] - AAON Oklahoma sales decreased by 23.0% year-over-year to $161.8 million, with gross profits down 51.6% to $38.0 million[28] - AAON Coil Products sales increased by 287.8% year-over-year to $94.0 million, with gross profits up 299.1% to $32.5 million[28] - BASX sales increased by 138.9% year-over-year to $66.2 million, with gross profits up 179.5% to $15.9 million[28] Backlog and Outlook - Total backlog increased by 83.9% year-over-year to $1.0269 billion[8,29] - AAON brand backlog increased by 44.9% year-over-year to $403.9 million[29] - BASX brand backlog increased by 122.7% year-over-year to $623.0 million[29] - The company reaffirmed its 2025 sales growth outlook in the mid- to high-teens and expects capital expenditures of approximately $220.0 million[31]

Financial Performance - For the three months ended March 31, 2025, total revenue was $322.1 million, compared to $262.1 million for the same period in 2024, representing a 22.9% increase[35]. - Consolidated gross profit for the three months ended March 31, 2025, was $86.364 million, compared to $92.242 million for the same period in 2024[131]. - The net income for the three months ended March 31, 2025, was $29,292,000, a decrease of 25.0% from $39,016,000 in the same period of 2024[101]. - Basic earnings per share for the three months ended March 31, 2025, was $0.36, down from $0.48 in the same period of 2024, representing a decline of 25.0%[101]. Revenue and Sales - AAON Oklahoma reported external sales of $161.838 million for the three months ended March 31, 2025, down from $210.140 million in 2024[131]. - AAON Coil Products experienced a significant increase in external sales, reaching $94.023 million in 2025 compared to $24.247 million in 2024[131]. - BASX's external sales increased to $66.193 million in 2025 from $27.712 million in 2024[131]. Costs and Expenses - Costs incurred on uncompleted contracts for the three months ended March 31, 2025, were $157.1 million, up from $106.4 million in 2024, indicating a 47.5% increase[45]. - The profit-sharing bonus plan paid out $3,297,000 for the three months ended March 31, 2025, compared to $4,600,000 in the same period of 2024, indicating a decrease of approximately 28.4%[97]. - The total pre-tax compensation cost related to unvested stock options not yet recognized as of March 31, 2025, is $17.0 million, expected to be recognized over approximately 2.4 years[82]. Assets and Liabilities - Contract assets increased to $188.7 million as of March 31, 2025, from $135.4 million as of December 31, 2024, reflecting increased production and demand for BASX branded products[44]. - Accounts receivable as of March 31, 2025, is $166,103,000, reflecting a net total of $164,977,000 after an allowance for credit losses of $1,126,000[52]. - Inventories as of March 31, 2025, total $204,101,000, with a net total of $198,852,000 after accounting for an allowance for excess and obsolete inventories of $5,249,000[53]. - Total accrued liabilities as of March 31, 2025, amount to $97,041,000, a decrease from $99,347,000 as of December 31, 2024[62]. Taxation - The income tax provision for the three months ended March 31, 2025, was $3.2 million, compared to $7.8 million for the same period in 2024, reflecting a decrease of approximately 59%[70]. - The effective tax rate for the three months ended March 31, 2025, was 9.8%, down from 16.6% in the same period of 2024[71]. - The company recorded an excess tax benefit of $7.2 million for the three months ended March 31, 2025, compared to $4.4 million in the same period of 2024[71]. Debt and Financing - The company has a total of $74,436,000 in term loans as of March 31, 2025, with $16,000,000 classified as short-term[65]. - The available borrowings under the revolving credit facility as of March 31, 2025, is $21,365,000, after accounting for outstanding borrowings of $177,981,000[64]. - The company has an outstanding debt balance of $252.6 million as of March 31, 2025, with a potential annual income decrease of approximately $2.5 million for each 1% increase in interest rates[196]. Employee Compensation - The Company awarded annual merit raises resulting in a 4.0% increase to wages in March 2025, following a 3.3% increase in March 2024[29]. - The total share-based compensation expense for the three months ended March 31, 2025, was $4,021,000, compared to $3,957,000 for the same period in 2024, reflecting an increase of approximately 1.6%[89]. - At March 31, 2025, unrecognized compensation cost related to unvested restricted stock awards was approximately $8.7 million, expected to be recognized over approximately 2.3 years[84]. Future Commitments and Risks - The Company has lease agreements with expiration dates ranging from April 2025 to November 2033, with a weighted average remaining term of 6.4 years[46]. - The company is exposed to commodity price volatility and manages this risk through cancellable and non-cancellable contracts with suppliers for periods of six to 18 months[195]. - Labor market tightening poses challenges for hiring employees necessary for continued growth[197]. - The timing of new product introductions and market acceptance is critical for future performance[197]. Goodwill and Intangible Assets - Goodwill as of March 31, 2025, is expected to be tax deductible in future periods, representing the excess of consideration paid over the fair value of acquired businesses[32]. - Total intangible assets net value as of March 31, 2025, is $78,721,000, with an amortization expense of $2,075,000 for the three months ended March 31, 2025[55][56]. - The company has estimated future amortization expense for finite-lived intangible assets totaling $49,523,000[57].

Core Viewpoint - AAON, Inc. reported strong first-quarter results for 2025, with significant year-over-year growth in net sales and backlog, driven primarily by BASX-branded products and improvements in operational efficiency despite some supply chain challenges [2][3][6]. Financial Performance - Net sales increased by 22.9% to $322.1 million compared to $262.1 million in Q1 2024, with BASX-branded products seeing a remarkable growth of 374.8% [2][5]. - Gross profit margin for the quarter was 26.8%, down from 35.2% in Q1 2024, attributed to lower production volumes at the AAON Oklahoma segment [3][5]. - Earnings per diluted share decreased by 23.9% to $0.35 from $0.46 in the same quarter last year [4][5]. Backlog and Orders - Total backlog reached a record $1.0 billion, up 83.9% year-over-year, with AAON-branded equipment backlog increasing by 44.9% [2][6]. - Bookings for BASX-branded equipment were strong, driven by demand for air-side and liquid cooling data center equipment [2][6]. Operational Insights - The company is experiencing improvements in production rates as supply chain issues related to the new R454B refrigerant components begin to resolve [2][6]. - Operational efficiencies are being enhanced at the Longview, Texas and Redmond, Oregon facilities, contributing positively to margins [2][3][6]. Cash and Investments - As of March 31, 2025, the company had cash and cash equivalents of $2.4 million and a revolving credit facility balance of $178.0 million [6]. - The company plans to invest $220.0 million in 2025 for the new Memphis plant and improvements in existing facilities [6]. Shareholder Returns - The company increased its dividend by 25.0% to $0.10 per quarter, reflecting confidence in future growth [6]. - During the quarter, the company repurchased 371,139 shares for $30.0 million at an average price of $80.81 per share [6].

Company Overview - AAON, Inc. is a leading producer of premium HVAC solutions, founded in 1988, and is headquartered in Tulsa, Oklahoma [3] - The company specializes in designing and manufacturing highly configurable and custom-made HVAC equipment for commercial, industrial, and data center environments [3] - AAON's products are marketed under the AAON and BASX brands, emphasizing efficiency, performance, and long-term value [3] Investor Day Event - AAON will host an Investor Day Event on June 10th, 2025, at NASDAQ MarketSite in New York, NY [1] - The event will feature a formal presentation by the CEO-designate, CFO, and other executive leadership team members, covering various topics relevant to the company and industry [1][2] - Key topics of discussion will include company and industry overview, disruptive market trends such as decarbonization and government regulations, growth strategies, data center market opportunities, capital deployment, and management's long-term outlook [2] Presentation Details - The formal presentation will take place from 9 am EDT to 12 pm EDT on June 10th [2] - Investors will have the opportunity to ask questions during the presentation, allowing for direct engagement with AAON's management team [2]

Company Overview - AAON, Inc. is a global leader in HVAC solutions for commercial, industrial, and data center indoor environments, founded in 1988 [3] - The company designs and manufactures highly configurable and custom-made equipment, enhancing efficiency, performance, and long-term value [3] - AAON's products are marketed under the AAON and BASX brands, with headquarters in Tulsa, Oklahoma, featuring an innovation center and testing lab [3] Upcoming Event - AAON will present at the Sidoti Spring 2025 Small-Cap Conference on March 20, 2025, at 11:30 AM (ET) [1] - Key executives participating in the presentation include CEO Gary Fields, CFO Rebecca Thompson, President and COO Matt Tobolski, and Director of Investor Relations Joseph Mondillo [1] - Presentation materials will be available on the AAON website [1]

Core Insights - AAON, Inc. has announced a 25% increase in its quarterly dividend and a new $30 million share repurchase program, aimed at enhancing shareholder value during a period of market uncertainty [1][2][5] - The company's actions reflect confidence in its financial position and prospects, which may positively influence investor sentiment and stock price [1][8] Dividend and Share Repurchase - The quarterly cash dividend has been raised from $0.08 to $0.10 per share, resulting in an annual dividend of $0.40, up from $0.32 [2][3] - AAON's current dividend yield stands at approximately 0.39%, with an annualized three-year dividend growth rate of 8.10% [2][3] - The dividend payout ratio is 15.92%, indicating sustainability and potential for future growth [4] - The new $30 million share repurchase program is part of a larger $100 million initiative, demonstrating a commitment to rewarding shareholders through buybacks [5][6] Financial Health and Growth Prospects - AAON reported a backlog of $867.1 million as of December 31, 2024, reflecting a 70% year-over-year increase, which provides a solid revenue pipeline [9] - The company is strategically positioned in the growing data center market, enhancing its revenue potential [10] - Recent investments in capacity expansion, including a new facility in Memphis, Tennessee, indicate proactive measures to meet anticipated demand [11] - AAON's financial metrics include a strong current ratio of 3.06 and a low debt-to-equity ratio of 0.07, showcasing liquidity and a conservative capital structure [12] Market Performance and Analyst Sentiment - AAON has a consensus rating of Buy from analysts, with an average price target of $115.50, suggesting a potential upside of approximately 41% from a recent stock price of around $80 [8][18] - Despite a recent stock price decline of over 33% year-to-date and a 52-week low of $69.52, the company’s fundamentals remain strong [14][15] - The recent quarterly earnings report showed an EPS of $0.30 and revenue of $297.7 million, both of which fell short of analyst expectations due to industry-specific challenges [15]

Company Overview - AAON, Inc. is a leader in HVAC solutions for commercial and industrial indoor environments, founded in 1988 [2] - The company focuses on designing and manufacturing highly configurable equipment to enhance efficiency, performance, and long-term value [2] - AAON is headquartered in Tulsa, Oklahoma, featuring a world-class innovation center and testing capabilities aimed at advancing sustainability [2] Dividend Announcement - The Board of Directors has declared a quarterly cash dividend of $0.10 per share, which represents a 25% increase from previous dividends [1] - The next cash dividend will be payable on March 28, 2025, to stockholders of record as of March 18, 2025 [1]

Core Points - AAON, Inc. has announced a $30 million share repurchase as part of a previously disclosed $100 million share repurchase program [1] - The repurchases will be conducted according to pre-arranged stock repurchase plans under Rule 10b-18 of the Securities Exchange Act of 1934 [1] - The timing, number, and value of shares repurchased will depend on market conditions, share price, trading volume, and other factors [1] Company Overview - AAON, Inc. was founded in 1988 and is a leader in HVAC solutions for commercial and industrial indoor environments [2] - The company focuses on designing and manufacturing highly configurable equipment to enhance efficiency, performance, and long-term value [2] - AAON is headquartered in Tulsa, Oklahoma, and has a world-class innovation center and testing capabilities aimed at advancing toward a cleaner and more sustainable future [2]