AAON REPORTS RECORD SALES & EARNINGS FOR THE THIRD QUARTER OF 2024
AAON reported record Q3 2024 net sales of $327.3 million, up 4.9% year-over-year. Growth was driven by BASX and AAON Coil Products segments, increasing 58.8% and 36.7% respectively, while AAON Oklahoma segment declined 7.1%. Gross profit margin decreased to 34.9% from 37.2% in Q3 2023. Earnings per diluted share were $0.63, flat compared to adjusted earnings in Q3 2023. Backlog stood at $647.7 million, up 32.0% year-over-year, primarily consisting of data center equipment orders for 2025 delivery. The company received additional orders worth $174.5 million in October for data center cooling solutions.
AAON ha registrato vendite nette record nel terzo trimestre del 2024 pari a 327,3 milioni di dollari, con un incremento del 4,9% rispetto all'anno precedente. La crescita è stata trainata dai segmenti BASX e AAON Coil Products, che sono aumentati rispettivamente del 58,8% e del 36,7%, mentre il segmento AAON Oklahoma ha registrato un calo del 7,1%. Il margine di profitto lordo è sceso al 34,9% rispetto al 37,2% del terzo trimestre del 2023. Gli utili per azione diluiti sono stati di 0,63 dollari, stabili rispetto agli utili rettificati del terzo trimestre del 2023. L'ordine accumulato ammontava a 647,7 milioni di dollari, con un aumento del 32,0% rispetto all'anno precedente, composto principalmente da ordini di attrezzature per centri dati per la consegna nel 2025. L'azienda ha ricevuto ulteriori ordini per un valore di 174,5 milioni di dollari in ottobre per soluzioni di raffreddamento per centri dati.
AAON reportó ventas netas récord en el tercer trimestre de 2024 por $327.3 millones, un incremento del 4.9% interanual. El crecimiento fue impulsado por los segmentos BASX y AAON Coil Products, que aumentaron un 58.8% y un 36.7% respectivamente, mientras que el segmento de AAON Oklahoma disminuyó un 7.1%. El margen de ganancia bruta bajó al 34.9% desde el 37.2% en el tercer trimestre de 2023. Las ganancias por acción diluida fueron de $0.63, estables en comparación con las ganancias ajustadas en el tercer trimestre de 2023. La cartera de pedidos se situó en $647.7 millones, un aumento del 32.0% interanual, compuesta principalmente por pedidos de equipos para centros de datos para entrega en 2025. La empresa recibió pedidos adicionales por $174.5 millones en octubre para soluciones de refrigeración de centros de datos.
AAON은 2024년 3분기 기록적인 순매출 3억 2,730만 달러를 보고했으며, 이는 전년 대비 4.9% 증가한 수치입니다. 성장은 BASX와 AAON Coil Products 부문에 의해 주도되었으며, 각각 58.8%와 36.7% 증가했습니다. 반면 AAON 오클라호마 부문은 7.1% 감소했습니다. 총 매출 총 이익률은 37.2%에서 34.9%로 감소했습니다. 희석 주당 순이익은 $0.63으로, 2023년 3분기 조정된 수익과 비교했을 때 변동이 없습니다. 백로그는 6억 4,770만 달러였으며, 전년 대비 32.0% 증가하여 주로 2025년 배송을 위한 데이터 센터 장비 주문으로 구성되었습니다. 회사는 10월에 데이터 센터 냉각 솔루션을 위한 1억 7,450만 달러 규모의 추가 주문을 받았습니다.
AAON a annoncé des ventes nettes record au troisième trimestre 2024 de 327,3 millions de dollars, en hausse de 4,9 % par rapport à l’année précédente. La croissance a été impulsée par les segments BASX et AAON Coil Products, qui ont augmenté de 58,8 % et 36,7 % respectivement, tandis que le segment d’AAON Oklahoma a diminué de 7,1 %. La marge bénéficiaire brute a diminué à 34,9 %, contre 37,2 % au troisième trimestre 2023. Le bénéfice par action diluée était de 0,63 dollar, stable par rapport aux bénéfices ajustés du troisième trimestre 2023. Le carnet de commandes s’élevait à 647,7 millions de dollars, en hausse de 32,0 % par rapport à l’année précédente, composé principalement de commandes d’équipements pour centres de données pour une livraison en 2025. L'entreprise a reçu des commandes supplémentaires d'une valeur de 174,5 millions de dollars en octobre pour des solutions de refroidissement pour centres de données.
AAON meldete für das dritte Quartal 2024 einen Rekordumsatz von 327,3 Millionen Dollar, was einem Anstieg von 4,9 % im Jahresvergleich entspricht. Das Wachstum wurde durch die Segmente BASX und AAON Coil Products vorangetrieben, die um 58,8 % bzw. 36,7 % zunahmen, während das Segment AAON Oklahoma um 7,1 % zurückging. Die Bruttogewinnmarge fiel auf 34,9 % von 37,2 % im dritten Quartal 2023. Der Gewinn pro verwässerter Aktie betrug 0,63 Dollar, gleichbleibend im Vergleich zu den bereinigten Erträgen im dritten Quartal 2023. Der Auftragsbestand belief sich auf 647,7 Millionen Dollar, was einem Anstieg von 32,0 % im Jahresvergleich entspricht, und bestand hauptsächlich aus Bestellungen für Datenzentrumsausrüstung zur Lieferung im Jahr 2025. Das Unternehmen erhielt im Oktober zusätzliche Bestellungen im Wert von 174,5 Millionen Dollar für Kühllösungen für Datenzentren.
- Record quarterly net sales of $327.3M (+4.9% YoY)
- Strong segment growth: BASX +58.8%, AAON Coil Products +36.7%
- Backlog increased 32.0% YoY to $647.7M
- New orders worth $174.5M received in October 2024
- Net income increased 9.5% to $52.6M
- Gross profit margin declined to 34.9% from 37.2% YoY
- AAON Oklahoma segment sales declined 7.1%
- Operating margin decreased to 20.0% from 20.7%
- Revolving credit facility balance of $55.7M
Insights
AAON delivered a solid Q3 2024 with record sales of
The data center market is emerging as a key growth driver for AAON, evidenced by the significant backlog composition and recent
Net sales for the third quarter of 2024 increased
Gross profit margin in the quarter was
SG&A expenses for the quarter ended September 30, 2024, continue to have elevated depreciation costs from the additional investments in technology we've made, offset by a decrease in professional fees due to the absence of the one-time
Financial Highlights: | Three Months Ended | % | Nine Months Ended September 30, | % | |||||||
2024 | 2023 | Change | 2024 | 2023 | Change | ||||||
(in thousands, except share and per share data) | (in thousands, except share and per share data) | ||||||||||
GAAP Measures | |||||||||||
Net sales | $ 327,252 | $ 311,970 | 4.9 % | $ 902,917 | $ 861,880 | 4.8 % | |||||
Gross profit | $ 114,158 | $ 116,109 | (1.7) % | $ 319,494 | $ 287,281 | 11.2 % | |||||
Gross profit margin | 34.9 % | 37.2 % | 35.4 % | 33.3 % | |||||||
Operating income | $ 65,520 | $ 64,664 | 1.3 % | $ 179,689 | $ 163,610 | 9.8 % | |||||
Operating margin | 20.0 % | 20.7 % | 19.9 % | 19.0 % | |||||||
Net income | $ 52,625 | $ 48,078 | 9.5 % | $ 143,869 | $ 130,574 | 10.2 % | |||||
Earnings per diluted share | $ 0.63 | $ 0.58 | 8.6 % | $ 1.72 | $ 1.57 | 9.6 % | |||||
Diluted average shares | 83,107,077 | 83,393,054 | (0.3) % | 83,579,989 | 83,275,208 | 0.4 % | |||||
Non-GAAP Measures | |||||||||||
Non-GAAP adjusted net income1 | $ 52,625 | $ 53,188 | (1.1) % | $ 143,869 | $ 136,082 | 5.7 % | |||||
Non-GAAP adjusted earnings per diluted share1 | $ 0.63 | $ 0.64 | (1.6) % | $ 1.72 | $ 1.63 | 5.5 % | |||||
Adjusted EBITDA1 | $ 82,863 | $ 83,710 | (1.0) % | $ 225,207 | $ 204,169 | 10.3 % | |||||
Adjusted EBITDA margin1 | 25.3 % | 26.8 % | 24.9 % | 23.7 % | |||||||
1 This is a non-GAAP measure. See "Use of Non-GAAP Financial Measures" below for reconciliation to GAAP measure. |
Backlog
September 30, 2024 | June 30, 2024 | September 30, 2023 | ||
(in thousands) | ||||
$ 647,694 | $ 650,005 | $ 490,591 |
At September 30, 2024, we had a backlog of
Gary Fields, CEO, stated, "The third quarter marked another quarter of strong results. Net sales for the quarter were a Company record, driven by robust growth at the BASX and AAON Coil Products segments. Demand at these two segments was largely spurred by the data center market as we continue to opportunistically leverage this high-growth market with our highly-engineered solutions-based product offerings. At the AAON Oklahoma segment, sales and profitability were in line with our expectations. Operationally, this segment continued to perform at a high level. The BASX segment still has some room for margin improvement, which we expect will occur over the next six months as disruptions related to the capacity expansion project, including outsourcing of parts manufacturing, dissipates and its shop reaches optimal efficiency. Overall, we were pleased with the third quarter results."
Mr. Fields continued, "Bookings in the third quarter performed well, partially fueled by an increase in demand of traditional packaged rooftop units configured with the soon-to-be outdated R-410A refrigerant. While we also began realizing a pick-up in rooftop units configured with the new R-454B refrigerant, we anticipate a softening in overall rooftop demand in the near-term mainly due to the slower economic backdrop. At the same time, demand for data center equipment remained strong, a trend we expect will continue."
Mr. Fields proceeded, "Subsequent to the end of the quarter, in October, we received approximately
Mr. Fields concluded, "At this point in time, AAON is positioned for growth to accelerate in a transformative way over the next 12 months. As such, it is a very exciting time at the Company. However, we are managing the Company in a way to achieve sustainable growth over a much longer period. As demand for higher quality HVAC equipment and solutions increases, AAON is becoming increasingly more competitive. Furthermore, the vast build-out of data center capacity in
As of September 30, 2024, the Company had cash, cash equivalents and restricted cash of
Conference Call
The Company will host a conference call and webcast today at 5:15 P.M. EDT to discuss the third quarter 2024 results and outlook. The conference call will be accessible via dial-in for those who wish to participate in Q&A as well as a listen-only webcast. The dial-in is accessible at 1-800-836-8184. To access the listen-only webcast, please register at https://app.webinar.net/3dOzZ17jPB6. On the next business day following the call, a replay of the call will be available on the Company's website at https://investors.aaon.com.
About AAON
Founded in 1988, AAON is a global 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
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
AAON, Inc. and Subsidiaries | |||||||
Consolidated Statements of Income | |||||||
(Unaudited) | |||||||
Three Months Ended | Nine Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(in thousands, except share and per share data) | |||||||
Net sales | $ 327,252 | $ 311,970 | $ 902,917 | $ 861,880 | |||
Cost of sales | 213,094 | 195,861 | 583,423 | 574,599 | |||
Gross profit | 114,158 | 116,109 | 319,494 | 287,281 | |||
Selling, general and administrative expenses | 48,637 | 51,470 | 139,820 | 123,684 | |||
Loss (gain) on disposal of assets | 1 | (25) | (15) | (13) | |||
Income from operations | 65,520 | 64,664 | 179,689 | 163,610 | |||
Interest expense, net | (1,091) | (1,266) | (1,697) | (3,959) | |||
Other income, net | 81 | 93 | 333 | 370 | |||
Income before taxes | 64,510 | 63,491 | 178,325 | 160,021 | |||
Income tax provision | 11,885 | 15,413 | 34,456 | 29,447 | |||
Net income | $ 52,625 | $ 48,078 | $ 143,869 | $ 130,574 | |||
Earnings per share: | |||||||
Basic | $ 0.65 | $ 0.59 | $ 1.77 | $ 1.61 | |||
Diluted | $ 0.63 | $ 0.58 | $ 1.72 | $ 1.57 | |||
Cash dividends declared per common share: | $ 0.08 | $ 0.08 | $ 0.24 | $ 0.24 | |||
Weighted average shares outstanding: | |||||||
Basic | 81,089,476 | 81,418,800 | 81,448,413 | 81,140,473 | |||
Diluted | 83,107,077 | 83,393,054 | 83,579,989 | 83,275,208 |
AAON, Inc. and Subsidiaries | |||
Consolidated Balance Sheets | |||
(Unaudited) | |||
September 30, 2024 | December 31, 2023 | ||
Assets | (in thousands, except share and per share data) | ||
Current assets: | |||
Cash and cash equivalents | $ 15 | $ 287 | |
Restricted cash | 6,650 | 8,736 | |
Accounts receivable, net | 143,806 | 138,108 | |
Income tax receivable | 1,125 | — | |
Inventories, net | 177,731 | 213,532 | |
Contract assets | 95,120 | 45,194 | |
Prepaid expenses and other | 3,389 | 3,097 | |
Total current assets | 427,836 | 408,954 | |
Property, plant and equipment, net | 427,652 | 369,947 | |
Intangible assets, net and goodwill | 158,838 | 149,945 | |
Right of use assets | 15,505 | 11,774 | |
Other long-term assets | 794 | 816 | |
Total assets | $ 1,030,625 | $ 941,436 | |
Liabilities and Stockholders' Equity | |||
Current liabilities: | |||
Accounts payable | $ 27,199 | $ 27,484 | |
Accrued liabilities | 96,243 | 85,508 | |
Contract liabilities | 16,391 | 13,757 | |
Total current liabilities | 139,833 | 126,749 | |
Revolving credit facility, long-term | 55,677 | 38,328 | |
Deferred tax liabilities | 1,658 | 12,134 | |
Other long-term liabilities | 20,527 | 16,807 | |
New market tax credit obligation | 16,074 | 12,194 | |
Commitments and contingencies | |||
Stockholders' equity: | |||
Preferred stock, | — | — | |
Common stock, | 325 | 326 | |
Additional paid-in capital | 59,398 | 122,063 | |
Retained earnings | 737,133 | 612,835 | |
Total stockholders' equity | 796,856 | 735,224 | |
Total liabilities and stockholders' equity | $ 1,030,625 | $ 941,436 |
AAON, Inc. and Subsidiaries | |||
Consolidated Statements of Cash Flows | |||
(Unaudited) | |||
Nine Months Ended | |||
2024 | 2023 | ||
Operating Activities | (in thousands) | ||
Net income | $ 143,869 | $ 130,574 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 45,185 | 33,439 | |
Amortization of debt issuance costs | 111 | 57 | |
Amortization of right of use assets | 133 | 166 | |
Provision for (recoveries of) credit losses on accounts receivable, net of adjustments | 815 | (92) | |
Provision for excess and obsolete inventories, net of write-offs | 1,848 | 2,979 | |
Share-based compensation | 12,814 | 12,102 | |
Gain on disposition of assets | (15) | (13) | |
Foreign currency transaction loss | 10 | — | |
Interest income on note receivable | (14) | (15) | |
Deferred income taxes | (4,112) | (3,917) | |
Changes in assets and liabilities: | |||
Accounts receivable | (6,513) | (32,040) | |
Income taxes | (2,295) | (12,472) | |
Inventories | 33,953 | (18,547) | |
Contract assets | (49,926) | (10,155) | |
Prepaid expenses and other long-term assets | (304) | (896) | |
Accounts payable | 1,733 | (15,631) | |
Contract liabilities | 2,634 | (1,848) | |
Extended warranties | 1,249 | 2,049 | |
Accrued liabilities and other long-term liabilities | 10,512 | 21,405 | |
Net cash provided by operating activities | 191,687 | 107,145 | |
Investing Activities | |||
Capital expenditures | (99,371) | (82,900) | |
Proceeds from sale of property, plant and equipment | 21 | 129 | |
Software development expenditures | (14,436) | — | |
Principal payments from note receivable | 38 | 39 | |
Net cash used in investing activities | (113,748) | (82,732) | |
Financing Activities | |||
Proceeds from financing obligation, net of issuance costs | 4,186 | 6,061 | |
Payment related to financing costs | (417) | (398) | |
Borrowings under revolving credit facility | 410,503 | 444,072 | |
Payments under revolving credit facility | (393,154) | (436,656) | |
Stock options exercised | 25,645 | 25,251 | |
Repurchase of stock | (100,034) | (25,009) | |
Employee taxes paid by withholding shares | (7,455) | (1,202) | |
Cash dividends paid to stockholders | (19,571) | (19,946) | |
Net cash used in financing activities | (80,297) | (7,827) | |
Net (decrease) increase in cash, cash equivalents and restricted cash | (2,358) | 16,586 | |
Cash, cash equivalents and restricted cash, beginning of period | 9,023 | 5,949 | |
Cash, cash equivalents and restricted cash, end of period | $ 6,665 | $ 22,535 |
Use of Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), additional non-GAAP financial measures are provided and reconciled in the following tables. The Company believes that these non-GAAP financial measures, when considered together with the GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results. The Company believes that this non-GAAP financial measure enhances the ability of investors to analyze the Company's business trends and operating performance as they are used by management to better understand operating performance. Since EBITDA and EBITDA margin are non-GAAP measures and are susceptible to varying calculations, EBITDA and EBITDA margin, as presented, may not be directly comparable with other similarly titled measures used by other companies.
Non-GAAP Adjusted Net Income
The Company defines non-GAAP adjusted net income as net income adjusted for any one-time events, such as litigation settlements, net of profit sharing and tax effect, in the periods presented.
The following table provides a reconciliation of net income (GAAP) to non-GAAP adjusted net income for the periods indicated:
Three Months Ended | Nine Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(in thousands) | |||||||
Net income, a GAAP measure | $ 52,625 | $ 48,078 | $ 143,869 | $ 130,574 | |||
Litigation settlement | — | 7,500 | — | 7,500 | |||
Profit sharing effect | — | (750) | — | (750) | |||
Tax effect | — | (1,640) | — | (1,242) | |||
Non-GAAP adjusted net income | $ 52,625 | $ 53,188 | $ 143,869 | $ 136,082 | |||
Non-GAAP adjusted earnings per diluted share | $ 0.63 | $ 0.64 | $ 1.72 | $ 1.63 |
EBITDA
EBITDA (as defined below) is presented herein and reconciled from the GAAP measure of net income because of its wide acceptance by the investment community as a financial indicator of a company's ability to internally fund operations. The Company defines EBITDA as net income, plus (1) depreciation and amortization, (2) interest expense (income), net and (3) income tax expense. EBITDA is not a measure of net income or cash flows as determined by GAAP. EBITDA margin is defined as EBITDA as a percentage of net sales.
The Company's EBITDA measure provides additional information which may be used to better understand the Company's operations. EBITDA is one of several metrics that the Company uses as a supplemental financial measurement in the evaluation of its business and should not be considered as an alternative to, or more meaningful than, net income, as an indicator of operating performance. Certain items excluded from EBITDA are significant components in understanding and assessing a company's financial performance. EBITDA, as used by the Company, may not be comparable to similarly titled measures reported by other companies. The Company believes that EBITDA is a widely followed measure of operating performance and is one of many metrics used by the Company's management team and by other users of the Company's consolidated financial statements.
Adjusted EBITDA is calculated as EBITDA adjusted by items in non-GAAP adjusted net income, above, except for taxes, as taxes are already excluded from EBITDA.
The following table provides a reconciliation of net income (GAAP) to EBITDA (non-GAAP) and Adjusted EBITDA (non-GAAP) for the periods indicated:
Three Months Ended | Nine Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(in thousands) | |||||||
Net income, a GAAP measure | $ 52,625 | $ 48,078 | $ 143,869 | $ 130,574 | |||
Depreciation and amortization | 17,262 | 12,203 | 45,185 | 33,439 | |||
Interest expense, net | 1,091 | 1,266 | 1,697 | 3,959 | |||
Income tax expense | 11,885 | 15,413 | 34,456 | 29,447 | |||
EBITDA, a non-GAAP measure | $ 82,863 | $ 76,960 | $ 225,207 | $ 197,419 | |||
Litigation settlement | — | 7,500 | — | 7,500 | |||
Profit sharing effect1 | — | (750) | — | (750) | |||
Adjusted EBITDA, a non-GAAP measure | $ 82,863 | $ 83,710 | $ 225,207 | $ 204,169 | |||
Adjusted EBITDA margin | 25.3 % | 26.8 % | 24.9 % | 23.7 % | |||
1Profit sharing effect of litigation settlement in the respective period. |
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SOURCE AAON
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