The following is a summary of the AAON, Inc. (AAON) Q1 2024 Earnings Call Transcript:

Financial Performance:

• AAON's Q1 sales decreased by 1.4% to $262.1 million due to lower volumes in the Coil products and Basic segments.

• The company experienced a 6.9% YoY increase in backlogs reflecting supply chain issues.

• The gross profit experienced a significant jump of 19.6% to $92.2 million mainly driven by pricing and moderating material cost inflation.

• Selling, general, and administrative expenses increased by 37.5% to $45.3 million due to lower volumes, compensation increments, and legal fees.

• The diluted earnings per share were $0.46, showing a marginal increase from the previous year's quarter.

Business Progress:

• AAON reported strong bookings and an increased backlog compared to a year ago.

• The launch of a new refrigerant portfolio set the company up well for industry low GWP refrigerant requirements.

• The launch of fully electric heat pump powered rooftop units reflects the company's technological advancements.

• Investments are being made towards the data center market expecting it to increase its contribution to total revenues from 10% to 20%.

• Two major capacity projects are underway aiming to expand the manufacturing square footage, expected to be completed by the year-end.

• A growth of 10% in parts sales for the quarter is also reported, driven by parts demand and supply chain stabilization.

• AAON is actively working on developing custom solutions and exploring growth in the liquid cooling market with acquired orders and opportunities.

More details: AAON Inc IR

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