Slide 1: Q4 2023 Earnings Conference Call
Q4 2023Earnings Conference Call February 28, 2024 AAON INC. 1
Slide 2: Forward-Looking Statements and Other References
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 fa
Slide 3: AAON Hits Milestone
AAON HITS MILESTONE
Slide 4: Q4 2023 Summary
Q4 2023 Summary Sales $306.6M Organic +20.4% Y/Y Gross Profit Margin 36.4% +560 bps Y/Y • -80 bps Q/Q EBITDA $77.0M +37.1%% Y/Y • 25.1% adjusted margin Diluted EPS $0.56 +19.1% Y/Y Backlog $510.0M -6.9% Y/Y • 4.0% Q/Q AAON INC. 4
Slide 5: The Coming of Age: Premium Equipment, Best Value
PREMIUM The Coming of Age EQUIPMENT The transformation for the from a niche player to a market force BEST VALUE
Slide 6: Leadership Realignment for operational efficiency and growth
Leadership Realignment for operational efficiency and growth
Slide 7: AAON Striving for Growth
AAON Striving for Growth Gaon» CAPITAL INVESTMENTS PARTS AND SERVICE PRODUCT DEVELOPMENT > Capital Investments + Capacity expansion + Operational productivity > Product Development * New refrigerant equipment * Alpha Class > Sales Channel » Alignment of channel partners » Customer experience > Lever
Slide 8: Q4 2023 Sales Bridge
Q4 2023 Sales Bridge Q4 Highlights Strongest fourth quarter in company history Organic sales growth +20.4% Organic unit volume growth +9.3% Volume growth reflected healthy backlog at +16.7% end of Q3, increased capacity, improved +11.9% productivity, and robust growth at the AAON Oklahoma and BASX s
Slide 9: Q4 2023 Gross Profit Margin
Q4 2023 Gross Profit Margin Q4 Highlights Positives Increased pricing Improved production output Improved efficiencies +16.7% +11.9% Better fixed cost absorption Negatives Inflationary pressure AAON INC. 9
Slide 10: Q4 2023 SG&A
Q4 2023 SG&A Q4 Highlights As a percent of sales, SG&A increased y/y 310 bps to 15.6% The increase in SG&A was due to higher warranty expense and profit sharing from our increased sales and earnings along with increases as a result of the investments we are making in back office technology. *SG&A ex
Slide 11: Q4 2023 Diluted EPS
Q4 2023 Diluted EPS Q4 Highlights Y/Y growth +19.1% In the same quarter a year ago, we had benefited from a lower than normal tax rate due to increases in our expected R&D tax credits and 179D deductions AAON INC. 11
Slide 12: Q4 2023 Balance Sheet and Liquidity
Q4 2023 Balance Sheet and Liquidity Restricted Cash, Cash & Cash Equivalents Debt Q4 Highlights Balance sheet remains strong Debt at the end of 2023 of $38.3 million was down year-over-year by 32.7 million Leverage ratio of 0.15, down from 0.46 at the end of 2022 Expect capex of approximately Workin
Slide 13: Backlog Remains Healthy
Backlog Remains Healthy +19.1% Q4 Highlights +26.7% Organic backlog -6.9% y/y, 4.0% q/q +22.0% Industry-best lead-times and on-time delivery rates Narrowing price premium of AAON equipment versus market AAON equipment offers most attractive value proposition Strengthening sales channel Robust demand
Slide 14: Outlook
Outlook Highlights • Healthy backlog entering 2024 • Bookings trends are steady • Strong pipeline of large project work at BASX and AAON Coil Products segments • Sentiment amongst sales channel remains positive • Early outlook for 2024 is positive, although expect slower growth compared to recent ye