Core Viewpoint - AAON, Inc. has launched Delta Class, an advanced Dedicated Outdoor Air System (DOAS) technology, emphasizing its commitment to innovation, efficiency, and sustainability in response to evolving industry regulations and increasing energy efficiency demands [1][2]. Group 1: Product Features and Innovations - Delta Class incorporates features such as variable capacity compressors, modulating reheat, 100% outdoor air dampers, and advanced energy recovery systems, designed to meet the complex needs of high-occupancy spaces [2][3]. - The compact and efficient design of Delta Class aims to reduce carbon footprint while providing high-quality air solutions for various environments, including schools, fitness centers, and restaurants [2][3]. Group 2: Company Background and Commitment - Founded in 1988, AAON has established itself as a leader in high-performance HVAC solutions, consistently delivering premium, high-efficiency equipment [1][4]. - The company has a strong culture focused on lifecycle cost and high efficiency, ensuring fresh and clean air across diverse building types since the introduction of DOAS technology [2][4]. - AAON's state-of-the-art testing laboratory, the Norman Asbjornson Innovation Center (NAIC), rigorously tests Delta Class units to ensure they meet high performance and reliability standards [3].

For those looking to find strong Construction stocks, it is prudent to search for companies in the group that are outperforming their peers. Is Aaon (AAON) one of those stocks right now? A quick glance at the company's year-to-date performance in comparison to the rest of the Construction sector should help us answer this question.Aaon is a member of our Construction group, which includes 91 different companies and currently sits at #2 in the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of o ...

Investment Thesis - AAON, Inc. is expected to see significant earnings growth, with a projected increase of 23.06% in 2025 and 24.19% in 2026 after a flat 2024 [3][4] - The company has a one-year price target of $99.00 and is rated as a Buy by analysts [3][20] Company Overview - Founded in 1987, AAON specializes in HVAC systems for commercial and industrial markets, generating 69% of its revenue from rooftop units and 97% domestically [4] - The company operates through three segments: AAON Oklahoma, AAON Coil Products, and BASX, with a significant customer, Texas AirSystems, accounting for 13.8% of sales in 2023 [4] - AAON reported a record backlog of $650 million at the end of Q2-2024, up from $526 million the previous year, indicating strong demand [4] Financial Performance - In Q2-2024, AAON's net sales increased by 10.4% to $313.6 million, with a gross margin of 36.1% and earnings per diluted share rising 12.7% to $0.62 [7] - The sales growth was primarily driven by the BASX segment, which saw a 58.3% increase in sales, mainly from data center equipment [7] - The company had total assets of $1.011 billion and total liabilities of $270.2 million, including $85.9 million in long-term debt [7] Competitive Landscape - AAON faces intense competition from larger companies such as Lennox International, Trane Technologies, and Carrier Global, but it competes on total value rather than price [5][6] - The company has maintained higher margins than industry medians, with a gross margin of 36.27% compared to 31.33% for the sector [6] Growth Prospects - AAON's revenue and earnings are expected to grow significantly in the coming years, with analysts projecting a return to growth in 2025 after a flat 2024 [10][11] - The company has invested approximately $43.7 million in R&D in 2023 to enhance its product offerings and maintain competitive advantages [4] Valuation - AAON's stock is considered overvalued based on current metrics, with a PEG ratio above fair value, indicating that growth may not justify high P/E ratios [16][17] - The average price target from Wall Street analysts is $99.00, suggesting an upside potential of 11.62% from the current trading price [19] Dividend Information - AAON has a forward dividend yield of 0.36% with an annual payout of $0.32, having paid dividends for 16 consecutive years [13]

For those looking to find strong Construction stocks, it is prudent to search for companies in the group that are outperforming their peers. Is Aaon (AAON) one of those stocks right now? 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 #3. The Zacks Sector Rank considers 16 different sector groups. The average Zacks Rank of the individual stocks within ...

AAON, Inc. (NASDAQ:AAON) Q2 2024 Results Conference Call August 1, 2024 5:15 PM ET Company Participants Joe Mondillo - Director of IR Gary Fields - President and CEO Rebecca Thompson - CFO and Treasurer Matt Tobolski - President and COO Conference Call Participants Chris Moore - CJS Securities Ryan Merkel - William Blair Brent Thielman - D.A. Davidson Timothy Wojs - Baird Jon Braatz - Kansas City Capital Operator Good afternoon, ladies and gentlemen, and welcome to the AAON, Inc. Second Quarter of 2024 Earn ...

Company Performance - Aaon reported quarterly earnings of $0.62 per share, exceeding the Zacks Consensus Estimate of $0.54 per share, and up from $0.55 per share a year ago, representing an earnings surprise of 14.81% [1] - The company achieved revenues of $313.57 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 9.88%, compared to $283.96 million in the same quarter last year [1] - Over the last four quarters, Aaon has surpassed consensus EPS estimates three times and topped consensus revenue estimates once [1] Stock Outlook - Aaon shares have increased approximately 19.9% since the beginning of the year, outperforming the S&P 500's gain of 15.8% [2] - The current consensus EPS estimate for the upcoming quarter is $0.62 on revenues of $330.69 million, and for the current fiscal year, it is $2.24 on revenues of $1.2 billion [4] Industry Context - The Building Products - Air Conditioner and Heating industry, to which Aaon belongs, is currently ranked in the top 3% of over 250 Zacks industries, indicating strong performance potential [5] - The AZEK Company, another player in the same industry, is expected to report quarterly earnings of $0.36 per share, reflecting a year-over-year increase of 20%, with revenues projected at $397.43 million, up 2.6% from the previous year [5][6]

Sales Performance - For the three months ended June 30, 2024, total net sales reached $313.566 million, a significant increase from $283.957 million for the same period in 2023, representing a growth of approximately 10.4%[25] - Rooftop units generated $203.642 million in sales for the three months ended June 30, 2024, compared to $196.065 million in the same period of 2023, reflecting a year-over-year increase of about 3.0%[25] - The company reported total net sales of $575.665 million for the six months ended June 30, 2024, up from $549.910 million for the same period in 2023, indicating a growth of approximately 4.7%[27] - The sales of condensing units for the three months ended June 30, 2024, were $15.433 million, compared to $11.390 million in the same period of 2023, marking an increase of approximately 35.5%[25] - The net sales for the three months ended June 30, 2024, were $313.6 million, compared to $284.0 million for the same period in 2023, representing a 10.0% increase[103] - Gross profit for the three months ended June 30, 2024, was $113.1 million, up from $94.0 million in the same period of 2023, reflecting a 20.3% increase[103] - The Company recorded external sales of $225.7 million for AAON Oklahoma in the three months ended June 30, 2024, compared to $218.2 million in the same period of 2023[103] Revenue Recognition and Accounting Practices - The company recognizes revenue over time for customized products, as they do not have an alternative use without significant costs, ensuring revenue is aligned with contract performance obligations[29] - The estimated cost of maintaining product warranties is recorded at the time of sale, based on historical claims experience, ensuring accurate financial forecasting and liability management[32] - The company capitalizes on software development costs for internal use, amortizing these costs over an estimated useful life of one to six years, reflecting a strategic investment in technology[19] - The company evaluates its intangible assets for impairment at least annually, ensuring that the carrying values reflect current market conditions and operational performance[20] Financial Position and Liabilities - Accounts receivable increased to $150.641 million as of June 30, 2024, from $138.431 million at the end of 2023, with a net allowance for credit losses of $1.492 million[39] - Total inventories decreased to $182.988 million as of June 30, 2024, from $213.532 million at the end of 2023, with raw materials at $181.403 million[43] - The net value of intangible assets increased to $75.560 million as of June 30, 2024, from $68.053 million at the end of 2023, driven by capitalized internal-use software growth[44] - Warranty accrual balance increased to $21.632 million as of June 30, 2024, compared to $16.900 million at the end of 2023, reflecting higher warranty expenses[49] - The company has operating leases with right-of-use assets valued at $16.086 million as of June 30, 2024, up from $11.774 million at the end of 2023[35] - Accrued liabilities totaled $85,499 thousand as of June 30, 2024, slightly down from $85,508 thousand on December 31, 2023[51] - Other long-term liabilities increased to $21,170 thousand as of June 30, 2024, compared to $16,807 thousand on December 31, 2023[52] - The company had $85.9 million outstanding under the revolving credit facility as of June 30, 2024, up from $38.3 million on December 31, 2023[53] - The leverage ratio was 0.3 to 1.0 as of June 30, 2024, well below the maximum requirement of 3 to 1[54] Taxation - The provision for income taxes for the three months ended June 30, 2024, was $14,779 thousand, compared to $7,678 thousand for the same period in 2023[56] - The effective tax rate for the three months ended June 30, 2024, was 22.1%, significantly higher than 14.4% for the same period in 2023[58] - Income taxes paid in Q2 2024 were $28.359 million, a decrease from $33.471 million in Q2 2023[47] - The company has investment tax credit carryforwards of approximately $1.1 million, with expirations estimated from 2039 to 2043[57] Stock and Compensation - The company declared a three-for-two stock split effective August 16, 2023, impacting all share and per share information[60] - The total pre-tax compensation cost related to unvested stock options not yet recognized is $12.8 million, expected to be recognized over approximately 2.1 years[64] - The total share-based compensation expense for the six months ended June 30, 2024, was $8.451 million, compared to $7.823 million for the same period in 2023[74] - The company matched 175% up to 6% of employee contributions to the defined contribution plan, with contributions of $10.076 million for the six months ended June 30, 2024[75] - The discretionary profit sharing bonus plan pays approximately 8.5% of pre-tax profit to eligible employees, with a previous rate of 10% before January 1, 2024[76] - For the three months ended June 30, 2024, the profit sharing bonus plan and employee incentive plan expense was $6,477,000, compared to $5,952,000 for the same period in 2023, reflecting an increase of 8.8%[77] Debt and Interest - Interest paid in Q2 2024 was $153,000, significantly lower than $1.506 million in Q2 2023[47] - The weighted average interest rate on borrowings outstanding on the revolving credit facility was 6.6% for the three months ended June 30, 2024, compared to 6.3% for the same period in 2023[53] - A one percentage point increase in interest rates applicable to the company's outstanding debt would decrease annual income before taxes by approximately $0.9 million[148] Other Financial Activities - The Company received a $23.0 million NMTC allocation for the 2023 Project and secured low interest financing with potential future debt forgiveness[95] - The Company provided approximately $16.7 million to the 2023 Investor as a loan receivable, with a term of 25 years at an interest rate of 1.0%[95] - The 2024 NMTC transaction resulted in a $15.5 million NMTC allocation, with the Company providing approximately $11.0 million to the 2024 Investor[96] - The Company executed a five-year purchase commitment for refrigerants, with estimated minimum future payments of $5.3 million for 2024[99] - The Company incurred approximately $0.4 million of debt issuance costs related to the NMTC transactions, amortized over the life of the transaction[95] - The Company settled a litigation case with Havtech for $7.5 million, which was finalized on October 26, 2023[98] - Long-lived assets increased to $429.3 million as of June 30, 2024, compared to $381.7 million as of December 31, 2023[105] - The company is exposed to commodity price volatility and manages this risk through cancellable and noncancellable contracts with major suppliers for periods of six to 18 months[147]

Exhibit 99.1 1 AAON REPORTS RECORD SALES, EARNINGS & BACKLOG FOR THE SECOND QUARTER OF 2024 TULSA, OK, August 1, 2024 - AAON, INC. (NASDAQ-AAON), a provider of premier, configurable HVAC solutions that bring long-term value to customers and owners, today announced its results for the second quarter of 2024. Net sales for the second quarter of 2024 increased 10.4% to a record $313.6 million from $284.0 million in the second quarter of 2023. The year-over-year increase was largely driven by the BASX segment, ...

TULSA, Okla., Aug. 1, 2024 /PRNewswire/ -- AAON, INC. (NASDAQ-AAON), a provider of premier, configurable HVAC solutions that bring long-term value to customers and owners, today announced its results for the second quarter of 2024.Net sales for the second quarter of 2024 increased 10.4% to a record $313.6 million from $284.0 million in the second quarter of 2023. The year-over-year increase was largely driven by the BASX segment, which recognized an increase in sales of 58.3%, a majority of which was spurre ...

Company Overview - Aaon (AAON) is expected to report quarterly earnings of $0.54 per share, reflecting a year-over-year decline of 1.8% [2] - Revenues are anticipated to be $285.38 million, which is a slight increase of 0.5% from the previous year [2] Earnings Estimates and Revisions - The consensus EPS estimate has been revised 1.64% higher in the last 30 days, indicating a positive reassessment by analysts [3] - Aaon has a positive Earnings ESP of +0.94%, suggesting that analysts are optimistic about the company's earnings prospects [6] Earnings Surprise Prediction - The Most Accurate Estimate for Aaon is higher than the Zacks Consensus Estimate, indicating a bullish sentiment among analysts [6] - Aaon holds a Zacks Rank of 2, which further supports the likelihood of beating the consensus EPS estimate [7] Historical Performance - In the last reported quarter, Aaon was expected to earn $0.53 per share but only achieved $0.46, resulting in a surprise of -13.21% [8] - Over the past four quarters, Aaon has beaten consensus EPS estimates three times, showcasing a generally strong performance [8] Industry Context - Watsco (WSO), a competitor in the air conditioning and heating industry, is expected to report earnings of $4.70 per share, marking a year-over-year increase of 6.3% [10] - Watsco's revenues are projected to be $2.13 billion, up 6.5% from the previous year, but it has a Zacks Rank of 4, indicating challenges in predicting an earnings beat [10]