AAON Announces Share Repurchase Program Updates

Rhea-AI Summary

AAON (NASDAQ: AAON) has completed two share repurchase programs as of June 17, 2024. The first program, effective February 27, 2024, repurchased 671,230 shares for $50 million at an average price of $74.49 per share, finishing on June 4, 2024. The second program, effective June 4, 2024, repurchased 682,334 shares for $50 million at an average price of $73.28 per share, completing on June 14, 2024. CEO Gary Fields expressed confidence in AAON's long-term growth and highlighted the company's commitment to delivering shareholder value. The repurchases were funded by cash reserves and available credit without hindering strategic investments or the company's strong balance sheet.

Positive

• AAON completed two share repurchase programs totaling $100 million.
• The average repurchase prices were $74.49 and $73.28 per share, reflecting efficient use of funds.
• Reducing the number of shares outstanding may increase earnings per share (EPS) and return on equity (ROE).
• Funding the repurchase programs through cash reserves and available credit preserved the company's financial stability.
• The repurchase programs did not affect AAON's ability to invest in strategic growth opportunities.

Negative

• No mention of immediate benefits or revenue increases from the repurchase programs.
• Potential risks of reduced liquidity by using cash reserves and credit for share repurchases.
• No data provided on the impact of repurchases on future stock price performance.

Insights

Financial Analyst

AAON's announcement of completing its second share repurchase program indicates a notable strategy to enhance shareholder value. Share repurchases can be seen as a vote of confidence by the management in the company's future prospects. By buying back shares, AAON reduces the number of shares outstanding, which can increase earnings per share (EPS) and potentially boost the stock price.

The repurchase was funded without compromising the company's financial health, showcasing effective balance sheet management. This prudent use of cash reserves and credit facilities is vital for maintaining liquidity and flexibility for future investments. Investors should consider this action as a positive signal regarding the company's financial health and strategic focus.

Market Research Analyst

From a market perspective, share repurchases often indicate that the company believes its shares are undervalued. AAON repurchased shares at an average price of $74.49 and $73.28, which could suggest that the management sees intrinsic value higher than these repurchase prices. This action might positively influence investor sentiment and market perception, potentially leading to a more favorable valuation in the near term.

However, it's essential for investors to monitor how this move affects AAON's overall market performance and long-term growth strategy. Share buybacks, while beneficial in the short term, should not detract from investing in innovation and growth opportunities which are critical for sustaining long-term competitiveness.

TULSA, Okla., June 17, 2024 /PRNewswire/ -- AAON, Inc. (NASDAQ:  AAON) ("AAON" or the "Company"), provided an update to the previously disclosed share repurchase programs authorized by our Board of Directors.  As of June 17, 2024, our repurchase activity under the programs is as follows:

Effective Date		Shares Repurchased		Authorized and Repurchased $		Average Price Per Share $		Completion Date
February 27, 2024		671,230		$50.0 million1		$74.49		June 4, 2024
June 4, 2024		682,334		$50.0 million2		$73.28		June 14, 2024
1  Repurchases made in accordance with  Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.
2  Repurchases made in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

"We are pleased to announce the completion of our second share repurchase program," said Gary Fields, CEO.  "This initiative reflects our confidence in the long-term growth prospects of AAON and our ongoing commitment to delivering value to our shareholders.  By reducing the number of shares outstanding, we believe we have positioned the Company for increased earnings per share and an enhanced return on equity."

The share repurchase program was financed through a combination of the Company's cash reserves and available credit facility, without compromising our ability to invest in strategic growth opportunities and maintain a strong balance sheet.

About AAON
Founded in 1988, AAON is a world leader in HVAC solutions for commercial and industrial indoor environments. The Company's industry-leading approach to designing and manufacturing highly configurable equipment to meet exact needs creates a premier ownership experience with greater efficiency, performance and long-term value. AAON is headquartered in Tulsa, Oklahoma, where its world-class innovation center and testing lab allows AAON engineers to continuously push boundaries and advance the industry. For more information, please visit www.AAON.com.

Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects", "anticipates", "intends", "plans", "believes", "seeks", "estimates", "should", "will", and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligations to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Important factors that could cause results to differ materially from those in the forward-looking statements include (1) the timing and extent of changes in raw material and component prices, (2) the effects of fluctuations in the commercial/industrial new construction market, (3) the timing and extent of changes in interest rates, as well as other competitive factors during the year, and (4) general economic, market or business conditions.

Contact Information
Joseph Mondillo
Director of Investor Relations
Phone (617) 877-6346
Email: joseph.mondillo@aaon.com

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SOURCE AAON

FAQ

What is the significance of AAON's share repurchase programs announced on June 17, 2024?

AAON's share repurchase programs demonstrate the company's confidence in its long-term growth and aim to enhance shareholder value by reducing the number of shares outstanding, potentially increasing EPS and ROE.

How many shares did AAON repurchase in its latest programs?

AAON repurchased a total of 1,353,564 shares across two programs, with 671,230 shares repurchased in the first program and 682,334 shares in the second.

What was the average price per share for AAON's repurchase programs?

The average price per share for the first repurchase program was $74.49, and for the second program, it was $73.28.

How did AAON finance its share repurchase programs?

AAON financed its share repurchase programs through a combination of the company's cash reserves and available credit facility.

What dates mark the completion of AAON's share repurchase programs?

The first share repurchase program was completed on June 4, 2024, and the second program was completed on June 14, 2024.