Aaon, Inc. · NASDAQ:AAON
Aaon — Investor Presentation (September 2020)
27 slides from Aaon's investor presentation, Sep 22, 2020
Slide 1: AAON, Inc. Investor Presentation Q2 2020
AAON, Inc. Investor Presentation Gary Fields Scott Asbjornson President & CEO Vice President & CFO Q2 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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
Slide 3: AAON
AAON AAON is a premium provider of commercial heating, ventilation and air conditioning (HVAC) products. Company Position Market Opportunities AAON provides designs of Energy efficiency and the highest quality and green features currently performance that lead the drive the market – AAON HVAC in
Slide 4: Manufacturing Locations
Manufacturing Locations Three Facilities: Tulsa, Oklahoma (Headquarters) 1.51M Sq. Ft. WSHP Manufacturing Began Production Oct 2016 Tulsa - Rooftop Units, Outdoor Mechanical Rooms, R&D Laboratory - 134,000 Sq. Ft Large Split Systems and Geothermal/Water-Source Began Operation in 2018 H
Slide 5: Product Families
Product Families ROOFTOP UNITS (2-240 tons) WATER-SOURCE HEAT PUMPS ('2 - 230 tons) PACKAGED OUTI bir aa ROOMS: tons) ee SERIES f > “Ym 3OILER ME Al ices PN SERIES BOLERMECHANCAL ——_LESERES Pee RLSERIES VERTICAL& a HORIZONTAL WsHP ‘SB SERIES ‘ Ma SERIES ‘SA SERIES FLUID COOLER UZSERIES INDOOR AIR HA
Slide 6: AAON Business Strategy
AAON Business Strategy Mass customization Uses flexible computer-aided manufacturing systems to produce custom outputs Combines the low unit costs of mass production processes with the flexibility of individual customization Collaborative effort AAON sales offices work with individual cust
Slide 7: AAON Market Strategy
AAON Market Strategy Focus upon underserved market niches Establish manufacturing methodologies to support market niche products Develop company culture focused upon customer satisfaction Reduce product delivery channel time and cost Continue with the goal of product and manufacturing tech
Slide 8: AAON Served Market Growth
AAON Served Market Growth Rooftops $ 4.1 B Chillers $ 0.9 B Air Handling Units $ 3.0 B Split Systems $ 7.4 B * Geothermal/WSHP $ 0.5 B ** 2019 Served Market - $ 15.9 B 1988 Served Market - $ 50 M Based on AHRI sales reporting * AHRI data includes both commercial and residential systems. Res
Slide 9: AAON Sales Mix by Business Segment
AAON Sales Mix by Business Segment Manufacturing 17% Other Religious New vs Replacement 5% 1% Lodging 50% New Construction 8% Educational 50% Replacement 23% Office Health Care 18% 10% Commercial 19% May not add to 100% due to rounding 9
Slide 10: Units Sold — Product Mix
Units Sold — Product Mix 2019 Percentage of Units 2018 Percentage of Units ® Rooftop Units lm Rooftop Units ™ Condensing Units ™ Condensing Units @ Air Handlers Air Handlers ™ Outdoor Mechanical ).72% i Outdoor Mechanical Rooms Rooms eWistel Source Heat tm Water-Source Heat Pumps Pumps Units sold fo
Slide 11: Product Mix – Units vs Dollars
Product Mix – Units vs Dollars 11
Slide 12: U.S. Construction - 2008 to 2019
U.S. Construction - 2008 to 2019 U.S. Census Bureau Value of Construction (Annual) - AAON Sales Segments - http://www.census.gov/construction/c30/c30index.html Annual Value of Construction (Millions $) Year Construction Type 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Lodging 35,806
Slide 13: U.S. Construction - 2008 to 2019 Percent Change
U.S. Construction - 2008 to 2019 U.S. Census Bureau Value of Construction (Annual) - AAON Sales Segments - http://www.census.gov/construction/c30/c30index.html Percent Change of 2008 Spending Year Construction Type 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Lodging 100% 71% 32% 25%
Slide 14: U.S. Construction – Months 2008 to 2020
U.S. Construction – 6 Months 2008 to 2020 U.S. Census Bureau Value of Construction - AAON Sales Segments - http://www.census.gov/construction/c30/c30index.html Value of Construction (Millions $) 6 Months Construction Type 6M 2008 6M 2011 6M 2018 6M 2019 6M 2020 Lodging 35,647 8,518 31,246 34,056 30,
Slide 15: U.S. Construction – Months, Percent Change
U.S. Construction – 6 Months 2008 to 2020 U.S. Census Bureau Value of Construction - AAON Sales Segments - http://www.census.gov/construction/c30/c30index.html Percent Change of 2008 Spending 6 Months Construction Type 6M 2008 6M 2011 6M 2018 6M 2019 6M 2020 Lodging 100% 24% 88% 96% 85% Office 100%
Slide 16: U.S. Construction - Since 2008
U.S. Construction - Since 2008 U.S. Census Bureau Value of Construction $480,000 $480.0 $469.3 $460,000 $460.0 $440,000 $440.0 $433.9 $420,000 $420.0 $405.2 ) $400,000 $400.0 $380,000 $380.0 $356.3 $384.0 $360,000 $360.0 $358.6 $340,000 $340.0 $321.1 $320,000 $320.0 $303.1 $300,000 $300.0 AAON Net S
Slide 17: Sales Performance – 2008 to 2019
Sales Performance – 2008 to 2019 Net Income (millions) Sales (millions) 500 100 450 90 469.3 400 356.3 433.9 80 405.2 350 384.0 70 358.6 300 321.1 60 250 303.1 50 Net Sales (millions) 279.7 200 245.3 244.6 266.2 40 150 53.8 53.7 30 44.9 53.0 100 36.7 43.1 42.3 20 28.6 27.7 27.5 50 21.9 14.0 10 0 0 N
Slide 18: Sales Performance – Months
Sales Performance – 6 Months 6M Net Income (millions) 6M Sales (millions) 6M 2016 6M 2017 6M 2018 6M 2019 6M 2020 300 100 90 250 263.1 80 200 233.3 70 208.7 60 187.7 150 187.4 50 Net Sales (millions) 40 100 30 50 39.7 20 24.8 23.0 22.1 14.9 10 0 0 6M 2016 6M 2017 6M 2018 6M 2019 6M 2020 Net Income (
Slide 19: Sales Dollars Per Capita – 2005 to 2019
Sales Dollars Per Capita – 2005 to 2019 U.S. Population (millions) Sales (millions) Sales $ per Capita 500 1.5 $1.428 $1.326 1.4 (millions) 450 $1.244 1.3 $1.185 Sales 400 $1.117 $1.116 1.2 and and 350 $1.015 1.1 $0.965 1 300 $0.854 $0.791 0.9 0.8 Population Population 250 $0.628 0.7 200 0.6 150 0.5
Slide 20: Company Backlog – 2008 to 2019
Company Backlog – 2008 to 2019 June 30, Order Backlog (millions) 2020 160.0 backlog of 140.0 $103.5M 120.0 100.0 June 30, 80.0 151.8 2019 57.1 81.2 60.0 48.8 142.7 backlog of 40.0 $179.6 M 44.0 45.3 49.1 20.0 45.2 38.4 43.6 32.2 - 20
Slide 21: Architecture Billings Index
Architecture Billings Index ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending. Any score above 50 indicates an increase in billings. ABI Numbers through July 2020 21
Slide 22: Financial Information
Financial Information 6 Months 2015 2016 2017 2018 2019 2020 CASH FLOW FROM OPERATIONS $55,355 $63,923 $57,994 $54,856 $97,925 $62,762 (in thousands) CAPITAL EXPENDITURES $20,967 $26,604 $41,713 $37,268 $37,166 $33,510 (in thousands) 1 1 2 DIVIDENDS (in thousands) $11,857 $12,676 $13,663 $16,728 $16
Slide 23: Ratio Analysis
Ratio Analysis 6 Months Profitability 2015 2016 2017 2018 2019 2020 Gross Profit % 30.2% 30.8% 30.5% 23.9% 25.4% 30.8% Return on Average Equity 25.2% 27.2% 24.1% 17.3% 19.9% 12.9% Return on Average Assets 19.6% 21.7% 19.5% 14.0% 15.8% 9.9% Pre-Tax Income on Sales 19.5% 20.7% 18.4% 12.8% 14.3% 19.0%
Slide 24: Financial Performance
Financial Performance Equity per Share $6.10 58,000 $6.0 $5.51 $4.74 $5.0 $5.43 $4.94 $4.0 Stock Price per Share/10 $3.51 $3.0 Weighted Average Shares Outstanding $2.0 52,668 52,635 $ Price Per Share $ Price Per 52,885 Shares Outstanding Shares $1.0 $1.02 $0.75 $0.80 Earnings per Share $0.0 51,000 2
Slide 25: Financial Performance - Year
Financial Performance - 31 Year Sales Stockholders’ Equity Net Income 25 As of December 31, 2019
Slide 26: Stock Performance – 25+ year
Stock Performance – 25+ year AAON, Inc. (NASDAQ:AAON) AAON Increase (39,637%) Comparison with - GSPC = S&P 500 (687%) - INXC = NASDAQ (1,542%) AAON Stock Performance Shown with Stock Splits and Dividends Stock Price 1991 = ~ 0.10 Stock Price September 9, 2020 = 55.90 Chart available from www.yahoo.c
Slide 27: AAON Defining Quality. Building Comfort.
AAON Defining Quality. Building Comfort. 27