Slide 1: Q3 2024 Earnings Conference Call
Q3 2024 Earnings Conference Call November 7, 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: Q3 2024 Summary
Q3 2024 Summary Net Sales $327.3M +4.9% Y/Y Gross Margin 34.9% (230) bps Y/Y EBITDA $82.9M +7.7% Y/Y Diluted EPS $0.63 +8.6% Y/Y Backlog $647.7M 32.0% Y/Y AAON, Inc. 3
Slide 4: Robust Data Center Demand
Robust Data Center Demand • YTD, Data Center Orders Up ~90% • Tracking To Be Up Over 100% in 2024 • Awarded Liquid Cooling Data Center Orders In October Totaling ~$174.5M • Backlog Positioned To Drive Accelerated Revenue Growth In 2025 AAON, Inc. 4
Slide 5: Investing In Growth to Meet Data Center Demand
Investing In Growth to Meet Data Center Demand Redmond, Oregon Longview, Texas +16.7% +11.9% AAON, Inc. 5
Slide 6: AAON Oklahoma Segment
AAON Oklahoma Segment • Q3 sales down 7.1% y/y, up 1.4% q/q • Expect near-term slowdown in Q4 and early 2025 • Operating well considering 2024 challenges • Anticipate several tailwinds to result in acceleration of demand throughout 2025 • Pre-buy of R-410A equipment much less pronounced than industr
Slide 7: Q3 2024 Net Sales
Q3 2024 Net Sales (in millions) Q3 Highlights • Organic sales grew 4.9% • Sales growth was primarily spurred by the BASX and AAON Coil Products segment, which realized year-over-year sales growth of 58.8% and 36.7%, respectively +16.7% • Parts sales growth +16.4% +11.9% AAON, Inc. 7
Slide 8: Q3 2024 Gross Profit Margin
Q3 2024 Gross Profit Margin Q3 Highlights • Tough y/y comparison • Lower volumes at AAON Oklahoma • Temporary inefficiencies at BASX • Favorable product mix and increased +16.7% efficiencies at AAON Coil Products +11.9% • Moderating material cost inflation • Improved price/cost AAON, Inc. 8
Slide 9: Q3 2024 SG&A
Q3 2024 SG&A Q3 Highlights • As a percent of sales, SG&A decreased y/y 160 bps to +14.9% • The year-over-year decrease in SG&A as a percent of sales was primarily a result of a $7.5 million settlement in Q3 2023 not reoccurring this year • We continue to have increased depreciation from our addition
Slide 10: Q3 2024 Diluted EPS
Q3 2024 Diluted EPS Q3 Highlights • Year-over-year, EPS was up 8.6% • In the quarter, we realized a tax rate of 18.4% • The Company’s estimated annual effective tax rate, excluding discrete events, is expected to be approximately 24.9% AAON, Inc. 10
Slide 11: Q3 2024 Balance Sheet and Liquidity
Q3 2024 Balance Sheet and Liquidity Restricted Cash, Cash & Cash Equivalents Debt Q3 Highlights • Balance sheet remains strong • Debt leverage is 0.19x • Cash flow from operations in the first half of the year totaled $191.7 million, up from $107.1 million in the comparable period a year ago • Expec
Slide 12: Outlook
Outlook 2024 Outlook Assumptions November 7th August 1st Volume growth: Flat Flat Pricing contribution to sales growth: Mid-single digits Mid-single digits Gross margin: Year-over-year expansion Year-over-year expansion SG&A as a percent of sales: Up 50-100 basis points Up 50-100 basis points Capex:
Slide 13: AAON Third Quarter 2024 Appendix
AAON Third Quarter 2024 Appendix AAON, Inc. 13
Slide 14: Q3 2024 Non-GAAP Financial Measures
Q3 2024 Non-GAAP Financial Measures Three Months Ended September 30, 2024 2023 (in thousands) Net income, a GAAP measure $52,625 $48,078 Depreciation and amortization 17,262 12,203 Interest expense, net 1,091 1,266 Income tax expense 11,885 15,413 EBITDA, a non-GAAP measure $82,863 $76,960 Litigatio