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]

Financial Data and Key Metrics Changes - Net sales decreased by 2.9% to $297.7 million from $306.6 million, primarily due to a 16.1% decline in the AAON Oklahoma segment, partially offset by a 129.9% growth in the AAON Coil Products segment [23][24] - Gross profit decreased by 30.5% to $77.6 million, with gross profit margin dropping to 26.1% from 36.4% in the previous year [24] - Diluted earnings per share fell by 46.4% to $0.30 from $0.56 [26] Business Line Data and Key Metrics Changes - The Basics brand saw a significant increase in net sales, up 35.1%, with data center equipment sales rising approximately 85% [15] - AAON branded equipment sales experienced a modest decline in the low single digits, but bookings were up in the mid-teens, and backlog increased by approximately 20% [17] - The AAON Coil Products segment reported a remarkable growth of 129.9% in sales, driven by the new Basics branded data center liquid cooling product [36] Market Data and Key Metrics Changes - The total backlog at the end of the year increased by 70% to $867.1 million, primarily due to strong bookings of data center equipment [18] - Bookings for the fourth quarter were up approximately 62%, indicating strong demand despite some challenges in the AAON Oklahoma segment [18] Company Strategy and Development Direction - The company aims to drive sustainable and robust organic growth, targeting over $1 billion in data center equipment sales within a few years [47][85] - The strategic focus includes being an industry leader in innovation and customization, with significant investments in new technologies and facilities to enhance production capacity [42][49] - The company is reorganizing to efficiently manage growth and maintain operational efficiencies while expanding manufacturing capabilities [50] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2024 was a challenging year due to regulatory impacts and a transition in refrigerants, but they expect a rebound in demand as the market stabilizes [53][54] - The outlook for 2025 anticipates sales growth in the mid to high teens, with expectations of improved margins as production ramps up [57][58] Other Important Information - Capital expenditures in the fourth quarter were $99.3 million, significantly up from the previous year, with a total of $213.2 million for 2024 [28] - The company is investing heavily in the new Memphis facility, which is expected to enhance production capabilities and efficiency [101] Q&A Session Summary Question: Outlook for Oklahoma sales in Q1 - Management indicated that flat sales are expected due to inventory of R410A affecting momentum, with a transition to R454B impacting the run rate [62][64] Question: Reasons for Basics sales decline - Management clarified that while Basics sales were down, the overall demand and backlog for Basics branded products remain strong, with capacity limitations affecting production [66][68] Question: Growth expectations for 2025 - Management explained that while strong growth is anticipated in the data center segment, softness in the Oklahoma segment is expected to offset some of that growth, leading to a cautious outlook [71][75] Question: Data center market outlook - Management reported that the data center market remains strong, with continued investments and a positive outlook despite some market noise [82] Question: Pricing strategy for R454B - Management stated that they are monitoring the market for pricing adjustments related to R454B, with a focus on strengthening bookings before implementing any increases [126][130]