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Mar 31, 2022
Aaon Q1 2022 Earnings Report
AAON's Q1 2022 earnings were reported, featuring record sales and backlog.
Key Takeaways
AAON reported a strong first quarter in 2022, with net sales increasing by 57.8% to $182.8 million. The company experienced organic volume growth and contributions from the acquisition of BasX Solutions. Despite revenue growth, gross profit contracted due to higher material costs and supply chain issues, but margins improved sequentially from Q4 2021. The company finished the quarter with a record backlog of $461.4 million.
Net sales increased 57.8% year-over-year to $182.8 million.
Diluted EPS increased 10.0% year-over-year to $0.33.
The company finished the quarter with a record backlog of $461.4 million, up 377.0% from the prior year.
Gross profit contracted 340 basis points to 25.2%, but improved 570 basis points sequentially from Q4 2021.
Aaon
Aaon
Aaon Revenue by Segment
Revenue by Segment
BASX Revenue
CapyFin.com Forward Guidance
AAON anticipates net sales, margin, and earnings to improve throughout 2022 and expects to return to target margins later this year. Long-term, the company is optimistic with its outlook, supported by product innovations, advanced manufacturing, and a strong sales channel. The acquisition of BasX Solutions is seen as integral to the company's long-term strategy, with revenue synergies expected to be greater than initially estimated.
Positive Outlook
- AAON anticipates net sales will improve throughout 2022.
- AAON anticipates margin will improve throughout 2022.
- AAON anticipates earnings will improve throughout 2022.
- AAON expects to return to target margins later this year.
- AAON is very optimistic with the Company’s outlook.
Challenges Ahead
- Gross margins were still below our target of 28%-32%.
- Supply chain issues have eased some, they remain a day-to-day issue.
- Gross profit was impacted primarily by higher material costs.
- Gross profit was impacted by supply chain issues that continue to adversely affect operational efficiencies.
- In Q2, we expect to close on the $22.0 million purchase of real estate related to the acquisition of BasX Solutions which will increase debt modestly in the second quarter.