Core Insights - AAON, Inc. is restructuring its executive leadership to enhance support for strategic growth and operational efficiency as new market opportunities arise [1][5] - The company is expanding its production capacity and geographic presence, highlighted by the establishment of a new facility in Memphis [2] - The leadership changes are aimed at better positioning AAON and its subsidiary BASX to capitalize on industry trends related to regulation and sustainability [2][5] Leadership Changes - Stephen Wakefield has been appointed as Executive Vice President & General Manager of the AAON products business unit, while Matt Shaub will serve in the same capacity for the BASX products business unit, both effective January 1, 2025 [2] - Wakefield has been with AAON since 1999 and has extensive experience in operations and engineering, which will support the company's focus on innovation and customer service [3] - Matt Shaub joined AAON in January 2024 and has a strong background in product management and leadership, enhancing the company's product strategies [4] Strategic Focus - The restructuring is part of a broader initiative to align leadership with long-term goals for AAON's product brands, ensuring a customer-focused approach and innovation [5] - Additional executive alignments will enhance global manufacturing efforts and support functions, with key roles assigned to leaders in manufacturing, sales, and marketing [5] - The company aims to maintain best practices in operations, supply chain, and quality to stay competitive in a rapidly evolving business landscape [5] Company Overview - AAON, founded in 1988, is a leader in HVAC solutions for commercial and industrial environments, known for its innovative and efficient equipment [6] - BASX, a subsidiary of AAON, specializes in high-efficiency data center cooling solutions and has a strong commitment to customer service and product quality [7][8]

Group 1 - AAON, Inc. will participate in the UBS Global Industrials & Transportation Conference on December 4, 2024, with key executives including CEO Gary Fields, President and COO Matt Tobolski, and CFO Rebecca Thompson [1] - The management team is scheduled for a 40-minute fireside chat and will also host in-person one-on-one meetings during the event [2] - AAON, founded in 1988, is a global leader in HVAC solutions, focusing on high-performance and energy-efficient products for commercial and industrial environments [3] Group 2 - The company emphasizes its innovative approach to designing and manufacturing highly configurable HVAC equipment, which enhances efficiency, performance, and long-term value for customers [3] - AAON is headquartered in Tulsa, Oklahoma, where it operates a world-class innovation center and testing lab to advance HVAC technology [3]

Core Insights - AAON, Inc. reaffirms its commitment to the U.S. Department of Energy's Better Buildings Commercial Building Heat Pump Technology Challenge, responding to new regulations with strong partnerships [1][4] - The collaboration with Copeland, Oklahoma State University, Montana State University, and the University of Maryland enhances AAON's capabilities in developing energy-efficient HVAC solutions [2][3] Group 1: Partnerships and Collaborations - Copeland has a 30-year relationship with AAON, providing advanced compressor technology and engineering support crucial for the DOE Challenge [2] - Oklahoma State University contributes research on low global warming potential refrigerants and heat pump system components [2] - Montana State University assists in prototype development, including fan blade design and performance testing [2] - The University of Maryland develops coil technology and software programs that aid in the creation of cold climate air-source heat pumps [3] Group 2: Company Positioning and Strategy - AAON expresses confidence in overcoming challenges through its research and development efforts, supported by its partnerships [4] - The company aims to exceed the objectives set by the DOE, focusing on technological advancements and energy efficiency [4] - Founded in 1988, AAON is recognized as a leader in HVAC solutions, emphasizing customizable equipment for enhanced efficiency and long-term value [4]

Core Viewpoint - AAON, Inc. is expanding its production capacity by acquiring a new 787,000 square foot facility in Memphis, Tennessee, to meet the growing demand from the data center market and create 828 skilled jobs over the next five years [1][3]. Group 1: Expansion Details - The new facility will manufacture various thermal management equipment for data centers under the BASX brand, including air-cooled systems, CRAHs, direct evaporative coolers, and CDUs [2]. - Limited production is expected to begin in early 2025, with full operations anticipated within approximately 12 months [2]. Group 2: Strategic Importance - The expansion is seen as a significant step for AAON to capitalize on the rapidly growing data center market and demonstrates the company's commitment to its customers [3]. - The facility will enhance geographic diversification of AAON's manufacturing footprint, mitigating operational risks and better serving data center clients [1][3]. Group 3: Economic Impact - The investment is expected to positively impact the Memphis community by creating new jobs and enhancing the local economy [3][4]. - Local officials express optimism about AAON's presence, highlighting Memphis as a competitive market for high-quality jobs and sustainable industry growth [4]. Group 4: Company Background - AAON, founded in 1988, is a leader in HVAC solutions for commercial and industrial environments, focusing on energy-efficient and high-performing equipment [5]. - BASX, a subsidiary of AAON, specializes in high-efficiency data center cooling solutions and has a strong commitment to customer service and product quality [6].

X @ α AADV AADV AAON Q3 2024 Earnings Conference Call November 7, 2024 AAON Inc. Forward-Looking Statements and Other References Certain statements and information set forth in this presentation contains "forward-looking statements" and "forward-looking information" within the meaning of the Private Securities Litigation Reform Act of 1995. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements which include management's assessment of future pla ...

Financial Data and Key Metrics Changes - Total revenue grew year-over-year by 4.9% to a record of $327.3 million, up from $312 million in Q3 2023 [29] - Diluted earnings per share increased by 8.6% to $0.63 [32] - Gross margin contracted by 230 basis points to 34.9% compared to 37.2% in Q3 2023 [30] - Adjusted EBITDA margin was 25.3%, marking the third strongest quarter in company history [7] Business Line Data and Key Metrics Changes - The BASX segment saw revenue growth of 58.8%, while the AAON Coil Products segment grew by 36.7%, primarily driven by the data center market [29] - The AAON Oklahoma segment experienced a year-over-year sales decline of 7.1% due to tough comparisons and disruptions from the refrigerant transition [29][24] Market Data and Key Metrics Changes - Bookings in the third quarter were up year-over-year in the mid-single digits, with year-to-date bookings up approximately 27% [8] - Total backlog finished at $647.7 million, up 32% from a year ago, with a significant portion consisting of data center equipment orders [9] Company Strategy and Development Direction - AAON is focusing on becoming a leading player in the data center cooling market, with strong demand for data center equipment expected to continue [10][14] - The company is undergoing significant transformation across departments to sustain long-term growth and efficiency [12] - Capacity expansion projects are underway in both the BASX segment in Oregon and the AAON Coil Products segment in Texas, with a new facility in Memphis planned to accommodate increased production [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the data center market's growth, driven by cloud computing and AI demand, while acknowledging challenges in the non-residential construction sector [17][12] - The company anticipates a near-term lull in demand for the Oklahoma segment due to the refrigerant transition and softening macro environment, but expects demand to accelerate in the following year [26][27] Other Important Information - The company has increased its capital expenditure guidance for 2024 to $215 million, up from $125 million, reflecting investments in capacity expansion [34] - Cash flow from operations improved significantly year-over-year, totaling $191.7 million [33] Q&A Session Summary Question: Expected revenue decline in the Oklahoma segment - Management indicated a potential slight softening in Q4 and Q1 due to backlog reduction but noted a strong pipeline for future growth [45][46] Question: Clarification on Q1 earnings expectations - Management clarified that they do not anticipate a year-over-year decline in Q1, but a modest quarter-over-quarter decline from Q4 [48] Question: Details on the $175 million order - The order is from an existing customer and represents a large-scale deployment of liquid cooling solutions across multiple facilities [49] Question: Transition to new refrigerants - All states have passed necessary legislation for the new refrigerants, with the mandatory cutover date approaching [51] Question: Margin profile of the liquid cooling order - The margin for the liquid cooling order is expected to align with historical BASX segment margins, with potential for expansion as production ramps up [68] Question: Contribution of the new Memphis facility - The new facility is expected to significantly impact revenue, effectively doubling the available square footage for data center products [70]

Company Performance - Aaon reported quarterly earnings of $0.63 per share, exceeding the Zacks Consensus Estimate of $0.58 per share, but slightly down from $0.64 per share a year ago, representing an earnings surprise of 8.62% [1] - The company achieved revenues of $327.25 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 3.12% and up from $311.97 million year-over-year [2] - Over the last four quarters, Aaon has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Aaon shares have increased approximately 62.8% since the beginning of the year, significantly outperforming the S&P 500's gain of 24.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.62 on revenues of $329.4 million, and for the current fiscal year, it is $2.28 on revenues of $1.22 billion [7] Industry Outlook - The Building Products - Air Conditioner and Heating industry, to which Aaon belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Aaon's stock performance [5]

Financial Performance - For the three months ended September 30, 2024, total net sales reached $327.252 million, a significant increase from $311.970 million in the same period of 2023, representing a growth of approximately 4.1%[26][27]. - The company reported a total of $902.917 million in net sales for the nine months ended September 30, 2024, up from $861.880 million in the same period of 2023, reflecting an increase of about 4.8%[29][31]. - Net income for the nine months ended September 30, 2024, was $143,869,000, compared to $130,574,000 for the same period in 2023, indicating an increase of approximately 10.2%[88]. - Basic earnings per share for the nine months ended September 30, 2024, was $1.77, up from $1.61 in 2023, reflecting a growth of about 9.9%[88]. - Gross profit for the quarter was $114,158,000, slightly down from $116,109,000 in the previous quarter, indicating a decrease of about 1.7%[106]. Revenue Recognition and Sales - The company recognized revenue over time for many products due to their highly customized nature, with no alternative use without significant costs[30]. - The company’s revenue recognition policy states that revenue is recognized when performance obligations are satisfied, typically at the time of shipment for manufactured equipment contracts[32]. - The revenue from Rooftop units for the nine months ended September 30, 2024, was $598.079 million, compared to $597.508 million for the same period in 2023, indicating a slight increase[29][31]. Assets and Liabilities - As of September 30, 2024, the total accounts receivable amounted to $144,944 thousand, an increase from $138,431 thousand as of December 31, 2023, with a net total of $143,806 thousand after accounting for an allowance for credit losses of $1,138 thousand[43]. - The total gross inventory as of September 30, 2024, was $185,739 thousand, down from $219,692 thousand as of December 31, 2023, resulting in a net inventory of $177,731 thousand after an allowance for excess and obsolete inventories of $8,008 thousand[46]. - The total property, plant, and equipment as of September 30, 2024, was $726,117 thousand, an increase from $653,432 thousand as of December 31, 2023, with accumulated depreciation of $298,465 thousand[47]. - The total net intangible assets as of September 30, 2024, were $76,946 thousand, up from $68,053 thousand as of December 31, 2023, with definite-lived intangible assets totaling $62,375 thousand[50]. - Total accrued liabilities rose to $96,243 thousand as of September 30, 2024, compared to $85,508 thousand at December 31, 2023, representing a 12.3% increase[58]. Expenses and Costs - The company reported a depreciation expense of $14,636 thousand for the three months ended September 30, 2024, compared to $11,301 thousand for the same period in 2023[48]. - The allowance for credit losses increased to $1,138 thousand as of September 30, 2024, from $323 thousand as of September 30, 2023, indicating a rise in expected credit losses[44]. - The profit sharing bonus plan expense for the three months ended September 30, 2024, was $6,242,000, compared to $6,954,000 for the same period in 2023, reflecting a decrease of approximately 10.2%[85]. - Medical premium payments for the three months ended September 30, 2024, increased to $5,314,000 from $4,455,000 in 2023, representing a rise of about 19.3%[87]. Taxation - The company paid $12,194 thousand in income taxes for the three months ended September 30, 2024, compared to $12,081 thousand for the same period in 2023[54]. - The income tax provision for the three months ended September 30, 2024, was $11,885 thousand, down from $15,413 thousand for the same period in 2023, a decrease of 22.0%[62]. - The effective tax rate for the three months ended September 30, 2024, was 18.4%, compared to 24.3% for the same period in 2023[63]. - The total provision for income taxes for the nine months ended September 30, 2024, was $34,456 thousand, compared to $29,447 thousand for the same period in 2023, an increase of 17.1%[62]. Financing and Debt - The company had $55.7 million outstanding under the revolving credit facility as of September 30, 2024, an increase from $38.3 million at December 31, 2023[60]. - The weighted average interest rate on borrowings under the revolving credit facility was 6.6% for the three months ended September 30, 2024, compared to 6.5% for the same period in 2023[60]. - Lease liability increased to $13,788 thousand as of September 30, 2024, from $10,201 thousand at December 31, 2023, a rise of 35.4%[59]. Stock and Shareholder Information - The company authorized a stock repurchase program totaling $150 million, with expiration dates ranging from February 27, 2024, to June 14, 2024[91]. - Cash dividends of $0.08 per share were declared for multiple dates in 2023 and 2024, maintaining an annualized dividend of $0.32 per share[93]. - The company completed a three-for-two stock split effective August 16, 2023, impacting all share and per share information[94]. - The total intrinsic value of options exercised during the nine months ended September 30, 2024, was $45.7 million, compared to $27.6 million for the same period in 2023, reflecting a 65.5% increase[70]. Employee Compensation and Benefits - The total share-based compensation expense for the nine months ended September 30, 2024, was $12.814 million, compared to $12.102 million for the same period in 2023, indicating a 5.9% increase[80]. - Contributions made to the defined contribution plan for the nine months ended September 30, 2024, were $14.646 million, up from $13.164 million in the same period of 2023, representing an 11.2% increase[83]. - The company self-insures for employee health insurance and matches 175% of contributions to health savings accounts, with BASX employees joining the plan on January 1, 2024[86]. Investments and Acquisitions - The Company received a $23.0 million NMTC allocation for both the 2019 and 2023 Projects to facilitate the expansion of its Longview, Texas manufacturing operations[97][98]. - The Company committed to $78.0 million in contingent consideration for the BASX acquisition, with shares issued contingent upon performance milestones[95]. - The Company entered into a definitive agreement to purchase a new 787,000 square foot facility in Memphis, Tennessee, for approximately $63.0 million to accommodate incremental demand from the data center market[102]. Segment Performance - The company has three reportable segments: AAON Oklahoma, AAON Coil Products, and BASX, with performance evaluated primarily on gross profit[105]. - The company reported external sales of $228,887,000 for AAON Oklahoma, down from $246,454,000 in the previous quarter, a decline of approximately 7.5%[106]. - AAON Coil Products experienced external sales growth from $25,769,000 to $35,232,000, representing an increase of about 36.5%[106]. - BASX external sales increased significantly from $39,747,000 to $63,133,000, showing a growth of approximately 58.8%[106].

Exhibit 99.1 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 ...

TULSA, Okla., Nov. 7, 2024 /PRNewswire/ -- 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 yearover-year increase was largely driven by the BASX and AAON Coil Products segments, which realized growth of 58.8% and 36.7%, respe ...