AAON(AAON)2025-05-01 11:03Financial 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].