AAON Inc.

Announcement: AAON 8-K Special Filing

Performance Analysis:

AAON, INC. is a manufacturer, marketer, and seller of premium air conditioning and heating equipment. The company recorded approximately $183.6 million in sales in the first quarter of 2023, as compared to $153.8 million in the same period of the prior year, implying a year-over-year growth of 19.4%. This growth is primarily due to the increase in the average selling price of the company’s products, as well as higher volumes and favorable product mix. The better-than-expected economic conditions and rising demand for energy-efficient HVAC equipment also contributed to the positive sales growth. In addition, the company's bookings have remained strong in the first quarter of 2023, with an increase in the backlog of 9.5% since December 31, 2022.

The company's gross margin increased to 31.4% in the first quarter of 2023, from 30.3% during the same period in the prior year. This improvement is due to higher selling prices and improved production efficiencies, which reduce the cost of goods sold. The company incurred selling, general and administrative expenses (SG&A) of $23.7 million in the first quarter of 2023, compared to $22.3 million in the same period of the prior year. This increase is primarily due to higher commission expense, salaries, occupancy and advertising expenses. The net income attributable to AAON for the first quarter of 2023 was $23.3 million, as compared to $18.1 million in the same period of the prior year, indicating a year-over-year growth of 28.5%.

Forward-Looking Analysis:

AAON, INC. is well-positioned for long-term growth. The company's products are well-suited for energy-efficient and sustainable building designs that are in increasing demand. The overall growth in the construction industry, particularly in the non-residential sector, supports the long-term growth prospects of the company. The continued adoption of more stringent energy conservation codes and regulations is likely to drive demand for the company’s products as customers seek energy-efficient HVAC solutions.

The company's competitive position is strong, with a portfolio of innovative and efficient products. AAON, INC. fills a unique market niche by selling through a network of independent manufacturers’ representatives, which differentiates it from its larger rivals. The entrepreneurial aspect of the independent sales channel attracts the most talented salespeople and provides greater financial incentives. Furthermore, the independent sales channel sells different types of equipment from various manufacturers, allowing it to operate with more of a solutions-based mindset. The company also has a small internal sales force that supports the relationships between the company and sales channel partners.

In conclusion, AAON, INC. has delivered impressive financial results in the first quarter of 2023, with strong sales growth, improving margins, and increasing net income. Moreover, the company is well-positioned for long-term growth, given the overall growth in the construction industry, increasing demand for energy-efficient HVAC solutions, and its competitive differentiation. With the company’s innovative products and unique distribution strategy, it is well-positioned to capitalize on these trends and drive revenue growth and margin expansion in the future.

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Form 10-Q - Quarterly report [Sections 13 or 15(d)]

AAON Q1 2023 Sales Up 19%, Net Income Up 28%, Well-Positioned For Long-Term Growth

AAON, Inc. (NASDAQ-AAON), a leading provider of highly configurable HVAC solutions, has announced its impressive financial results for the first quarter of 2023. The company's net sales increased by 45% to $266.8 million in the first quarter of 2023 compared to the same quarter in 2022. The growth was mainly due to organic volume growth and product mix, which contributed approximately 23% to year-over-year growth. Additionally, the company's success in attracting and retaining employees led to increased production output, resulting in volume growth.

AAON also posted an improved gross profit margin of 29%, which was up 380 basis points compared to the same quarter in 2022. Price increases implemented over the last year, combined with moderating cost inflation, were key drivers of the gross profit margin expansion. The company's earnings per diluted share increased by 103% to $0.33 in the first quarter of 2023 compared to the same quarter in 2022, primarily due to robust volume growth and improved gross profit margin.

Furthermore, AAON's backlog continued to grow, and bookings remained strong, positioning the company extremely well through at least the third quarter. The company made investments in plant and equipment, and its total headcount was up 27% from a year ago and up 10% from the end of 2022.

AAON's balance sheet remains strong, even though the company had a capital expenditure of $28.9 million in the quarter and borrowed $12.7 million on its line of credit. Its leverage ratio was 0.47 at the end of the first quarter.

In conclusion, AAON posted excellent financial results and continues to grow despite facing parts shortages and other challenges. The company's investments in people, plant and equipment, and expanding production output and capacity have paid off. Given its current performance, AAON remains positive about its business and is expected to continue delivering value to its customers and investors.

Form 8-K - Current report - Item 2.02 Item 7.01 Item 9.01

$AAON reports impressive Q1 2023 financial results with net sales up 45% YoY, strong backlog and bookings, and improved gross profit margin.

Form 8-K - Current report - Item 5.03 Item 9.01

Form 8-K - Current report - Item 8.01 Item 9.01