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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934


Date of Report (Date of earliest event reported): November 7, 2024

AAON, INC.
(Exact name of Registrant as Specified in Charter) 
Nevada0-1895387-0448736
(State or Other Jurisdiction(Commission File Number: )(IRS Employer Identification No.)
of Incorporation)
2425 South Yukon Ave.,Tulsa,Oklahoma74107
(Address of Principal Executive Offices)(Zip Code)
 
(Registrant's telephone number, including area code): (918) 583-2266

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockAAONNASDAQ



Item 2.02    Results of Operations and Financial Conditions.

On November 7, 2024, AAON, Inc. (the "Company") announced its financial and operating results and backlog for the third quarter ended September 30, 2024. A copy of the Company's press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The Company plans to host a teleconference at 5:15 P.M (Eastern Time) on November 7, 2024 to discuss these results. The accessible dial-in is 1-800-836-8184 for domestic callers. 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.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item shall not be deemed "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing.

Item 7.01    Regulation FD Disclosure.

On November 7, 2024, the Company issued the press release described above in Item 2.02 of this Current Report on Form 8-K. A copy of the press release is attached hereto as Exhibit 99.1.

All statements in the teleconference, other than historical financial information, may be deemed to be "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. Participants and 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.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item shall not be deemed "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing.

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits
Exhibit NumberDescription
Press release dated November 7, 2024 announcing financial and operating results and backlog.
104Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AAON, INC.
Date: November 7, 2024By:/s/ Luke A. Bomer
Luke A. Bomer, Secretary



Exhibit 99.1                        
aaona05.jpg


AAON REPORTS RECORD SALES & EARNINGS
FOR THE THIRD QUARTER OF 2024

TULSA, OK, November 7, 2024 - AAON, INC. (NASDAQ-AAON), a leader in high-performing, energy-efficient HVAC solutions that bring long-term value to customers and owners, today announced its results for the third quarter of 2024.

Net sales for the third quarter of 2024 increased 4.9% to a record $327.3 million from $312.0 million in the third quarter of 2023. The year-over-year increase was largely driven by the BASX and AAON Coil Products segments, which realized growth of 58.8% and 36.7%, respectively. Sales at the AAON Oklahoma segment declined year-over-year 7.1%.

Gross profit margin in the quarter was 34.9%, down from 37.2% in the comparable quarter in 2023. The contraction in gross margin was a result of lower volumes at the AAON Oklahoma segment and temporary inefficiencies at BASX, partially offset by strong results at the AAON Coil Products segment which benefited from a favorable product mix and an increase in volumes.

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 $7.5 million settlement that occurred in the same period of 2023. Earnings per diluted share for the three months ended September 30, 2024, were $0.63, approximately flat from the adjusted earnings per diluted share in the third quarter of 2023.


Financial Highlights:Three Months Ended 
 September 30,		%Nine Months Ended 
 September 30,		%
20242023Change20242023Change
(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 margin34.9 %37.2 %35.4 %33.3 %
Operating income$65,520 $64,664 1.3 %$179,689 $163,610 9.8 %
Operating margin20.0 %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 shares83,107,077 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.

1

Backlog

September 30, 2024June 30, 2024September 30, 2023
(in thousands)
$647,694$650,005$490,591

At September 30, 2024, we had a backlog of $647.7 million, approximately flat with the backlog at the end of the second quarter. Compared to a year ago, backlog was up 32.0% from $490.6 million, driven by the BASX and AAON Coil Products segments. At the end of the quarter, a majority of total backlog consisted of orders of data center equipment that will be produced and delivered in 2025.

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 $174.5 million of orders that we expect will mostly be produced and shipped in the first half of 2025. These orders are associated with a liquid cooling solution for one data center customer and will be produced at our Longview, Texas location. This year, we have spoken at length about a large pipeline of opportunity in the data center space. These orders represent a fraction of that pipeline. The expansion project at the Texas location is on schedule to be complete by the end of this year with production to commence in early 2025. In addition, we recently entered into a definitive agreement to purchase a new 787,000 square foot facility in Memphis, Tennessee, which will accommodate incremental demand from the data center market over the next several years, at the same time providing more geographic diversification across our manufacturing footprint.”

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 North America is a massive opportunity for the Company. With our superior innovation and engineering, highly productive operations and world class sales channel, along with an enhanced group of leadership and enterprise resources, AAON is well positioned to take advantage of these opportunities and achieve our long-term growth and sustainability goals.”

As of September 30, 2024, the Company had cash, cash equivalents and restricted cash of $6.7 million and a balance on its revolving credit facility of $55.7 million. Rebecca Thompson, CFO and Treasurer, commented, “During the quarter, we paid down $30.2 million on the revolving credit facility, reducing our leverage ratio to 0.19x. Capital expenditures in the quarter totaled $38.4 million, bringing our year-to-date investments to $113.7 million. Within the quarter we completed the expansion project at BASX, and we are on schedule to complete the expansion project at ACP by year-end. Looking ahead, with a strong balance sheet and many compelling growth opportunities, we will continue to reinvest our operating cash flows into additional production capacity, product innovation and infrastructure to help sustain long-term growth.”

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.

2

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 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

3

AAON, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
 2024202320242023
(in thousands, except share and per share data)
Net sales$327,252 $311,970 $902,917 $861,880 
Cost of sales213,094 195,861 583,423 574,599 
Gross profit114,158 116,109 319,494 287,281 
Selling, general and administrative expenses48,637 51,470 139,820 123,684 
Loss (gain) on disposal of assets1 (25)(15)(13)
Income from operations65,520 64,664 179,689 163,610 
Interest expense, net(1,091)(1,266)(1,697)(3,959)
Other income, net81 93 333 370 
Income before taxes64,510 63,491 178,325 160,021 
Income tax provision11,885 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:  
Basic81,089,476 81,418,800 81,448,413 81,140,473 
Diluted83,107,077 83,393,054 83,579,989 83,275,208 



4

AAON, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
 September 30, 2024December 31, 2023
Assets(in thousands, except share and per share data)
Current assets:  
Cash and cash equivalents$15 $287 
Restricted cash6,650 8,736 
Accounts receivable, net143,806 138,108 
Income tax receivable1,125 — 
Inventories, net177,731 213,532 
Contract assets95,120 45,194 
Prepaid expenses and other3,389 3,097 
Total current assets427,836 408,954 
Property, plant and equipment, net427,652 369,947 
Intangible assets, net and goodwill158,838 149,945 
Right of use assets15,505 11,774 
Other long-term assets794 816 
Total assets$1,030,625 $941,436 
Liabilities and Stockholders' Equity  
Current liabilities:  
Accounts payable$27,199 $27,484 
Accrued liabilities96,243 85,508 
Contract liabilities16,391 13,757 
Total current liabilities139,833 126,749 
Revolving credit facility, long-term55,677 38,328 
Deferred tax liabilities1,658 12,134 
Other long-term liabilities20,527 16,807 
New market tax credit obligation16,074 12,194 
Commitments and contingencies
Stockholders' equity:  
Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued— — 
Common stock, $.004 par value, 200,000,000 shares authorized, 81,246,902 and 81,508,381 issued and outstanding at September 30, 2024 and December 31, 2023, respectively
325 326 
Additional paid-in capital59,398 122,063 
Retained earnings737,133 612,835 
Total stockholders' equity796,856 735,224 
Total liabilities and stockholders' equity$1,030,625 $941,436 
5

AAON, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
 Nine Months Ended 
 September 30,
 20242023
Operating Activities(in thousands)
Net income
$143,869 $130,574 
Adjustments to reconcile net income to net cash provided by operating activities:
  
Depreciation and amortization45,185 33,439 
Amortization of debt issuance costs111 57 
Amortization of right of use assets133 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 compensation12,814 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)
Inventories33,953 (18,547)
Contract assets(49,926)(10,155)
Prepaid expenses and other long-term assets(304)(896)
Accounts payable1,733 (15,631)
Contract liabilities2,634 (1,848)
Extended warranties1,249 2,049 
Accrued liabilities and other long-term liabilities10,512 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 equipment21 129 
Software development expenditures(14,436)— 
Principal payments from note receivable38 39 
Net cash used in investing activities
(113,748)(82,732)
Financing Activities  
Proceeds from financing obligation, net of issuance costs4,186 6,061 
Payment related to financing costs(417)(398)
Borrowings under revolving credit facility410,503 444,072 
Payments under revolving credit facility(393,154)(436,656)
Stock options exercised25,645 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 period9,023 5,949 
Cash, cash equivalents and restricted cash, end of period$6,665 $22,535 



6

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 
 September 30,		Nine Months Ended 
 September 30,
2024202320242023
(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.

7

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 
 September 30,		Nine Months Ended 
 September 30,
2024202320242023
(in thousands)
Net income, a GAAP measure$52,625 $48,078 $143,869 $130,574 
Depreciation and amortization17,262 12,203 45,185 33,439 
Interest expense, net1,091 1,266 1,697 3,959 
Income tax expense11,885 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 margin25.3 %26.8 %24.9 %23.7 %
1Profit sharing effect of litigation settlement in the respective period.


8
v3.24.3
Cover Page
Nov. 07, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 07, 2024
Entity Registrant Name AAON, INC.
Entity Incorporation, State or Country Code NV
Entity File Number 0-18953
Entity Tax Identification Number 87-0448736
Entity Address, Address Line One 2425 South Yukon Ave.,
Entity Address, City or Town Tulsa,
Entity Address, State or Province OK
Entity Address, Postal Zip Code 74107
City Area Code 918
Local Phone Number 583-2266
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock
Trading Symbol AAON
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0000824142
Amendment Flag false
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