[Earnings Announcement](index=1&type=section&id=Earnings%20Announcement) AAON reported record Q3 2024 sales and earnings, driven by data center demand, while strategically expanding capacity and maintaining a strong financial position [Third Quarter 2024 Performance Highlights](index=1&type=section&id=Third%20Quarter%202024%20Performance%20Highlights) AAON reported record Q3 2024 net sales of **$327.3 million**, up 4.9%, with gross margin at **34.9%** and backlog growing **32.0%** to **$647.7 million** Financial Highlights: Three Months Ended September 30 | Financial Highlights (GAAP Measures) | 2024 (in thousands, except share and per share data) | 2023 (in thousands, except share and per share data) | % Change | | :----------------------------------- | :--------------------------------------------------- | :--------------------------------------------------- | :------- | | Net sales | $327,252 | $311,970 | 4.9 % | | Gross profit | $114,158 | $116,109 | (1.7)% | | Gross profit margin | 34.9 % | 37.2 % | | | Operating income | $65,520 | $64,664 | 1.3 % | | Operating margin | 20.0 % | 20.7 % | | | Net income | $52,625 | $48,078 | 9.5 % | | Earnings per diluted share | $0.63 | $0.58 | 8.6 % | | **Non-GAAP Measures** | | | | | Non-GAAP adjusted net income | $52,625 | $53,188 | (1.1)% | | Non-GAAP adjusted earnings per diluted share | $0.63 | $0.64 | (1.6)% | | Adjusted EBITDA | $82,863 | $83,710 | (1.0)% | | Adjusted EBITDA margin | 25.3 % | 26.8 % | | - Net sales for Q3 2024 increased **4.9%** to a record **$327.3 million**, driven by BASX (**58.8%** growth) and AAON Coil Products (**36.7%** growth), while AAON Oklahoma segment sales declined **7.1%**[2](index=2&type=chunk) - Gross profit margin in Q3 2024 was **34.9%**, down from **37.2%** in Q3 2023, due to lower volumes at AAON Oklahoma and temporary inefficiencies at BASX, partially offset by strong results at AAON Coil Products[3](index=3&type=chunk) - Earnings per diluted share for Q3 2024 were **$0.63**, approximately flat from the adjusted earnings per diluted share in Q3 2023[4](index=4&type=chunk) Backlog (in thousands) | September 30, 2024 | June 30, 2024 | September 30, 2023 | | :----------------- | :------------ | :----------------- | | $647,694 | $650,005 | $490,591 | - Backlog at September 30, 2024, was **$647.7 million**, approximately flat with the previous quarter but up **32.0%** year-over-year, primarily driven by the BASX and AAON Coil Products segments and consisting mostly of data center equipment orders for 2025[6](index=6&type=chunk) [Management Commentary and Strategic Outlook](index=2&type=section&id=Management%20Commentary%20and%20Strategic%20Outlook) Management highlighted record sales driven by data center demand, with strategic expansions in Texas and Memphis, while maintaining a strong balance sheet and investing in future growth - CEO Gary Fields stated that net sales were a Company record, driven by robust growth at the BASX and AAON Coil Products segments, largely spurred by the data center market[7](index=7&type=chunk) - BASX segment is expected to see margin improvement over the next six months as disruptions from capacity expansion dissipate and its shop reaches optimal efficiency[7](index=7&type=chunk) - Anticipates a near-term softening in overall rooftop demand due to a slower economic backdrop, but demand for data center equipment is expected to remain strong[7](index=7&type=chunk) - Subsequent to the quarter, in October, AAON received approximately **$174.5 million** of orders for a liquid cooling solution for a data center customer, expected to be produced and shipped in the first half of 2025[7](index=7&type=chunk) - The expansion project at the Longview, Texas location is on schedule for completion by year-end 2024, with production commencing in early 2025[7](index=7&type=chunk) - AAON entered into a definitive agreement to purchase a new **787,000 square foot** facility in Memphis, Tennessee, to accommodate incremental data center market demand and diversify its manufacturing footprint[7](index=7&type=chunk) - CFO Rebecca Thompson noted cash, cash equivalents, and restricted cash of **$6.7 million** and a revolving credit facility balance of **$55.7 million** as of September 30, 2024[7](index=7&type=chunk) - The company paid down **$30.2 million** on the revolving credit facility during the quarter, reducing its leverage ratio to **0.19x**[7](index=7&type=chunk) - Capital expenditures totaled **$38.4 million** in Q3 2024, bringing year-to-date investments to **$113.7 million**, with expansion projects at BASX completed and ACP on schedule for year-end[7](index=7&type=chunk) [Detailed Financial Statements](index=4&type=section&id=Detailed%20Financial%20Statements) This section presents AAON's consolidated statements of income, balance sheets, and cash flows, detailing financial performance and position for the reported periods [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Consolidated statements of income show increased net sales and net income for both three and nine months ended September 30, 2024, despite a slight Q3 gross profit decrease Consolidated Statements of Income (Unaudited, in thousands, except share and per share data) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net sales | $327,252 | $311,970 | $902,917 | $861,880 | | Cost of sales | $213,094 | $195,861 | $583,423 | $574,599 | | Gross profit | $114,158 | $116,109 | $319,494 | $287,281 | | Selling, general and administrative expenses | $48,637 | $51,470 | $139,820 | $123,684 | | Income from operations | $65,520 | $64,664 | $179,689 | $163,610 | | Net income | $52,625 | $48,078 | $143,869 | $130,574 | | Earnings per share: Diluted | $0.63 | $0.58 | $1.72 | $1.57 | | Cash dividends declared per common share | $0.08 | $0.08 | $0.24 | $0.24 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) AAON's balance sheet as of September 30, 2024, shows increased total assets, driven by property, plant, and equipment and contract assets, alongside higher liabilities and stockholders' equity Consolidated Balance Sheets (Unaudited, in thousands, except share and per share data) | Metric | September 30, 2024 | December 31, 2023 | | :------------------------------------------ | :----------------- | :---------------- | | Cash and cash equivalents | $15 | $287 | | Restricted cash | $6,650 | $8,736 | | Accounts receivable, net | $143,806 | $138,108 | | Inventories, net | $177,731 | $213,532 | | Contract assets | $95,120 | $45,194 | | Total current assets | $427,836 | $408,954 | | Property, plant and equipment, net | $427,652 | $369,947 | | Total assets | $1,030,625 | $941,436 | | Accounts payable | $27,199 | $27,484 | | Accrued liabilities | $96,243 | $85,508 | | Contract liabilities | $16,391 | $13,757 | | Total current liabilities | $139,833 | $126,749 | | Revolving credit facility, long-term | $55,677 | $38,328 | | Total stockholders' equity | $796,856 | $735,224 | | Total liabilities and stockholders' equity | $1,030,625 | $941,436 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2024, AAON reported increased operating cash flow, higher capital and software expenditures, and a net cash outflow from financing activities Consolidated Statements of Cash Flows (Unaudited, in thousands) | Metric | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :---------------------------------------------------------- | :----------------------------- | :----------------------------- | | Net income | $143,869 | $130,574 | | Depreciation and amortization | $45,185 | $33,439 | | Net cash provided by operating activities | $191,687 | $107,145 | | Capital expenditures | $(99,371) | $(82,900) | | Software development expenditures | $(14,436) | — | | Net cash used in investing activities | $(113,748) | $(82,732) | | Borrowings under revolving credit facility | $410,503 | $444,072 | | Payments under revolving credit facility | $(393,154) | $(436,656) | | Repurchase of stock | $(100,034) | $(25,009) | | Cash dividends paid to stockholders | $(19,571) | $(19,946) | | Net cash used in financing activities | $(80,297) | $(7,827) | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(2,358) | $16,586 | | Cash, cash equivalents and restricted cash, end of period | $6,665 | $22,535 | [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations of non-GAAP financial measures, including adjusted net income and EBITDA, to their most directly comparable GAAP measures [Non-GAAP Adjusted Net Income Reconciliation](index=7&type=section&id=Non-GAAP%20Adjusted%20Net%20Income%20Reconciliation) AAON reconciles non-GAAP adjusted net income to GAAP net income, adjusting for one-time events like the **$7.5 million** litigation settlement in 2023 to provide clearer operational insights Non-GAAP Adjusted Net Income Reconciliation (in thousands) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income, a GAAP measure | $52,625 | $48,078 | $143,869 | $130,574 | | Litigation settlement | — | $7,500 | — | $7,500 | | Profit sharing effect | — | $(750) | — | $(750) | | Tax effect | — | $(1,640) | — | $(1,242) | | Non-GAAP adjusted net income | $52,625 | $53,188 | $143,869 | $136,082 | | Non-GAAP adjusted earnings per diluted share | $0.63 | $0.64 | $1.72 | $1.63 | - Non-GAAP adjusted net income is defined as net income adjusted for one-time events, such as litigation settlements, net of profit sharing and tax effect[20](index=20&type=chunk) [EBITDA and Adjusted EBITDA Reconciliation](index=7&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) AAON presents EBITDA and Adjusted EBITDA as non-GAAP measures, derived from net income and adjusted for items like depreciation, interest, taxes, and one-time events, to show operational performance EBITDA and Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income, a GAAP measure | $52,625 | $48,078 | $143,869 | $130,574 | | Depreciation and amortization | $17,262 | $12,203 | $45,185 | $33,439 | | Interest expense, net | $1,091 | $1,266 | $1,697 | $3,959 | | Income tax expense | $11,885 | $15,413 | $34,456 | $29,447 | | EBITDA, a non-GAAP measure | $82,863 | $76,960 | $225,207 | $197,419 | | Litigation settlement | — | $7,500 | — | $7,500 | | Profit sharing effect | — | $(750) | — | $(750) | | Adjusted EBITDA, a non-GAAP measure | $82,863 | $83,710 | $225,207 | $204,169 | | Adjusted EBITDA margin | 25.3 % | 26.8 % | 24.9 % | 23.7 % | - EBITDA is defined as net income, plus depreciation and amortization, interest expense (income), net, and income tax expense[21](index=21&type=chunk) - Adjusted EBITDA is calculated as EBITDA adjusted by items in non-GAAP adjusted net income, except for taxes, as taxes are already excluded from EBITDA[23](index=23&type=chunk) [Corporate Information](index=2&type=section&id=Corporate%20Information) This section provides an overview of AAON, its forward-looking statements, and investor relations contact details [About AAON](index=3&type=section&id=About%20AAON) AAON, founded in 1988 and headquartered in Tulsa, Oklahoma, is a global leader in designing and manufacturing energy-efficient HVAC solutions for commercial and industrial environments - AAON, founded in 1988, is a global leader in HVAC solutions for commercial and industrial indoor environments[10](index=10&type=chunk) - The company is headquartered in Tulsa, Oklahoma, and is known for designing and manufacturing highly configurable, energy-efficient equipment[10](index=10&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains cautionary forward-looking statements, subject to risks and uncertainties, where actual results may differ materially, and the company disclaims any obligation to update them - The press release includes forward-looking statements subject to risks, uncertainties, and assumptions, and actual outcomes may differ materially from forecasts[11](index=11&type=chunk) - AAON undertakes no obligation to update publicly any forward-looking statements[11](index=11&type=chunk) - Important factors that could cause results to differ include changes in raw material and component prices, fluctuations in the commercial/industrial new construction market, changes in interest rates, and general economic conditions[11](index=11&type=chunk) [Investor Relations](index=2&type=section&id=Investor%20Relations) AAON held a conference call and webcast on November 7, 2024, to discuss Q3 2024 results, with a replay available online, and Joseph Mondillo as the Director of Investor Relations - A conference call and webcast were held on November 7, 2024, at 5:15 P.M. EDT to discuss Q3 2024 results and outlook[8](index=8&type=chunk) - A replay of the call is available on the Company's website at https://investors.aaon.com[8](index=8&type=chunk) - Contact for Investor Relations: Joseph Mondillo, Director of Investor Relations, Phone: (617) 877-6346, Email: joseph.mondillo@aaon.com[12](index=12&type=chunk)

TULSA, Okla., Nov. 7, 2024 /PRNewswire/ -- AAON, INC. (NASDAQ: AAON), a leader in high-performing, energy-efficient HVAC solutions that bring long-term value to customers and owners, today announced its results for the third quarter of 2024. Net sales for the third quarter of 2024 increased 4.9% to a record $327.3 million from $312.0 million in the third quarter of 2023. The yearover-year increase was largely driven by the BASX and AAON Coil Products segments, which realized growth of 58.8% and 36.7%, respe ...

Core Insights - AAON, Inc. is participating in the Baird 2024 Global Industrials Conference on November 12-13, 2024, with CEO Gary Fields and President and COO Matt Tobolski presenting [1] - The management will conduct a 30-minute presentation and host one-on-one meetings with investors during the event [2] Company Overview - Founded in 1988, AAON is a global leader in HVAC solutions for commercial and industrial indoor environments [3] - The company focuses on designing and manufacturing highly configurable equipment, enhancing efficiency, performance, and long-term value for customers [3] - AAON is headquartered in Tulsa, Oklahoma, featuring a world-class innovation center and testing lab for continuous advancement in the industry [3]

By 2030, manufacturers will need to fill more than 4 million jobs More than half of those jobs could be left unfilled because of two issues: a skills gap and misperceptions about modern manufacturing (Research: Manufacturing Institute and Deloitte) At AAON's Tulsa, Oklahoma location, students and educators from area high schools, colleges, and career-tech schools toured our facilities to learn about the company's industry-leading products, manufacturing processes, safety, and sustainability efforts. The tou ...

Core Insights - AAON, Inc. has received orders totaling approximately $174.5 million from a data center customer for a custom-designed thermal management system [1][2] - The equipment will be manufactured under the BASX brand at the Longview, Texas facility, with production expected to commence in early 2025 [1][2] - The new facility in Texas is on schedule for completion by the end of 2024, and staffing and training have already begun [1][2] Company Overview - AAON, founded in 1988, is a leader in HVAC solutions for commercial and industrial environments, focusing on energy efficiency and long-term value [3] - The company is headquartered in Tulsa, Oklahoma, and has a world-class innovation center and testing lab [3] BASX Overview - BASX, a wholly owned subsidiary of AAON, specializes in high-efficiency data center cooling solutions and has been recognized for industry-changing innovations over the past 40 years [4] - The BASX manufacturing facility is located in Redmond, Oregon, and is committed to high-quality products and customer service [4]

Core Points - AAON, Inc. has scheduled its quarterly conference call for November 7, 2024, at 5:15 p.m. EST to discuss third quarter 2024 financial results [1] - The financial results will be released immediately after the market closes on the same day [1] - The conference call will be accessible via dial-in and a listen-only webcast [1] Company Overview - AAON, founded in 1988, is a global 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, featuring a world-class innovation center and testing lab [2]

Investors in AAON, Inc. (AAON) need to pay close attention to the stock based on moves in the options market lately. That is because the Oct 18, 2024 $45.00 Put had some of the highest implied volatility of all equity options today.What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean t ...

The Zacks Building Products - Air Conditioner & Heating industry is well-positioned to capitalize on key trends and opportunities, driven by the energy transition and the growing pro-environmental movement. As we move into 2024 and beyond, companies in this sector are experiencing increased demand for renewable energy solutions, unlocking significant growth potential. Despite facing inflationary challenges, major players like Comfort Systems USA, Inc. (FIX) and AAON, Inc. (AAON) are thriving by delivering c ...

For those looking to find strong Construction stocks, it is prudent to search for companies in the group that are outperforming their peers. Has Aaon (AAON) been one of those stocks this year? Let's take a closer look at the stock's year-to-date performance to find out.Aaon is a member of the Construction sector. This group includes 91 individual stocks and currently holds a Zacks Sector Rank of #2. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks R ...

Company Overview - AAON, Inc. has launched Delta Class, an advanced Dedicated Outdoor Air System (DOAS) technology to meet evolving industry regulations and energy efficiency demands [1] - The company has been a leader in DOAS technology since its founding in 1988, focusing on high-efficiency equipment and fresh air solutions [1] Product Features - Delta Class includes variable capacity compressors, modulating reheat, 100% outdoor air dampers, and advanced energy recovery systems [1] - The design of Delta Class is compact and efficient, aimed at reducing carbon footprint while catering to high-occupancy spaces such as schools, fitness centers, restaurants, and entertainment venues [1] - Each Delta Class unit undergoes rigorous testing at AAON's AMCA-accredited Norman Asbjornson Innovation Center to ensure high performance and reliability [1] Stock Performance - AAON's shares have increased by 21.5% over the past three months, outperforming the Zacks Building Products - Air Conditioner and Heating industry's growth of 5.7% [2] - The company's earnings per share (EPS) estimate has risen to $2.29 from $2.24 in the last 60 days, indicating a year-over-year growth of 4.1% [2] Market Position - AAON balances its focus between new construction and replacement applications, capitalizing on robust replacement demand in the non-residential building market [2]