AAON(AAON) - 2024 Q3 - Quarterly Report

Financial Performance - For the three months ended September 30, 2024, total net sales reached $327.252 million, a significant increase from$311.970 million in the same period of 2023, representing a growth of approximately 4.1%[26][27]. - The company reported a total of $902.917 million in net sales for the nine months ended September 30, 2024, up from$861.880 million in the same period of 2023, reflecting an increase of about 4.8%[29][31]. - Net income for the nine months ended September 30, 2024, was $143,869,000, compared to$130,574,000 for the same period in 2023, indicating an increase of approximately 10.2%[88]. - Basic earnings per share for the nine months ended September 30, 2024, was $1.77, up from$1.61 in 2023, reflecting a growth of about 9.9%[88]. - Gross profit for the quarter was $114,158,000, slightly down from$116,109,000 in the previous quarter, indicating a decrease of about 1.7%[106]. Revenue Recognition and Sales - The company recognized revenue over time for many products due to their highly customized nature, with no alternative use without significant costs[30]. - The company’s revenue recognition policy states that revenue is recognized when performance obligations are satisfied, typically at the time of shipment for manufactured equipment contracts[32]. - The revenue from Rooftop units for the nine months ended September 30, 2024, was $598.079 million, compared to$597.508 million for the same period in 2023, indicating a slight increase[29][31]. Assets and Liabilities - As of September 30, 2024, the total accounts receivable amounted to $144,944 thousand, an increase from$138,431 thousand as of December 31, 2023, with a net total of $143,806 thousand after accounting for an allowance for credit losses of$1,138 thousand[43]. - The total gross inventory as of September 30, 2024, was $185,739 thousand, down from$219,692 thousand as of December 31, 2023, resulting in a net inventory of $177,731 thousand after an allowance for excess and obsolete inventories of$8,008 thousand[46]. - The total property, plant, and equipment as of September 30, 2024, was $726,117 thousand, an increase from$653,432 thousand as of December 31, 2023, with accumulated depreciation of $298,465 thousand[47]. - The total net intangible assets as of September 30, 2024, were$76,946 thousand, up from $68,053 thousand as of December 31, 2023, with definite-lived intangible assets totaling$62,375 thousand[50]. - Total accrued liabilities rose to $96,243 thousand as of September 30, 2024, compared to$85,508 thousand at December 31, 2023, representing a 12.3% increase[58]. Expenses and Costs - The company reported a depreciation expense of $14,636 thousand for the three months ended September 30, 2024, compared to$11,301 thousand for the same period in 2023[48]. - The allowance for credit losses increased to $1,138 thousand as of September 30, 2024, from$323 thousand as of September 30, 2023, indicating a rise in expected credit losses[44]. - The profit sharing bonus plan expense for the three months ended September 30, 2024, was $6,242,000, compared to$6,954,000 for the same period in 2023, reflecting a decrease of approximately 10.2%[85]. - Medical premium payments for the three months ended September 30, 2024, increased to $5,314,000 from$4,455,000 in 2023, representing a rise of about 19.3%[87]. Taxation - The company paid $12,194 thousand in income taxes for the three months ended September 30, 2024, compared to$12,081 thousand for the same period in 2023[54]. - The income tax provision for the three months ended September 30, 2024, was $11,885 thousand, down from$15,413 thousand for the same period in 2023, a decrease of 22.0%[62]. - The effective tax rate for the three months ended September 30, 2024, was 18.4%, compared to 24.3% for the same period in 2023[63]. - The total provision for income taxes for the nine months ended September 30, 2024, was $34,456 thousand, compared to$29,447 thousand for the same period in 2023, an increase of 17.1%[62]. Financing and Debt - The company had $55.7 million outstanding under the revolving credit facility as of September 30, 2024, an increase from$38.3 million at December 31, 2023[60]. - The weighted average interest rate on borrowings under the revolving credit facility was 6.6% for the three months ended September 30, 2024, compared to 6.5% for the same period in 2023[60]. - Lease liability increased to $13,788 thousand as of September 30, 2024, from$10,201 thousand at December 31, 2023, a rise of 35.4%[59]. Stock and Shareholder Information - The company authorized a stock repurchase program totaling $150 million, with expiration dates ranging from February 27, 2024, to June 14, 2024[91]. - Cash dividends of$0.08 per share were declared for multiple dates in 2023 and 2024, maintaining an annualized dividend of $0.32 per share[93]. - The company completed a three-for-two stock split effective August 16, 2023, impacting all share and per share information[94]. - The total intrinsic value of options exercised during the nine months ended September 30, 2024, was$45.7 million, compared to $27.6 million for the same period in 2023, reflecting a 65.5$12.814 million, compared to $12.102 million for the same period in 2023, indicating a 5.9$14.646 million, up from $13.164 million in the same period of 2023, representing an 11.2$23.0 million NMTC allocation for both the 2019 and 2023 Projects to facilitate the expansion of its Longview, Texas manufacturing operations[97][98]. - The Company committed to $78.0 million in contingent consideration for the BASX acquisition, with shares issued contingent upon performance milestones[95]. - The Company entered into a definitive agreement to purchase a new 787,000 square foot facility in Memphis, Tennessee, for approximately$63.0 million to accommodate incremental demand from the data center market[102]. Segment Performance - The company has three reportable segments: AAON Oklahoma, AAON Coil Products, and BASX, with performance evaluated primarily on gross profit[105]. - The company reported external sales of $228,887,000 for AAON Oklahoma, down from$246,454,000 in the previous quarter, a decline of approximately 7.5%[106]. - AAON Coil Products experienced external sales growth from $25,769,000 to$35,232,000, representing an increase of about 36.5%[106]. - BASX external sales increased significantly from $39,747,000 to$63,133,000, showing a growth of approximately 58.8%[106].