Aaon Q2 2023 Earnings Report
Key Takeaways
AAON reported record sales and earnings for the second quarter of 2023. Net sales increased by 36.0% to $284.0 million, driven by organic volume growth and pricing. Earnings per diluted share increased by 173.3% to $0.82.
Net sales increased 36.0% to a record $284.0 million compared to the second quarter of 2022.
Earnings per diluted share increased 173.3% to $0.82 compared to the second quarter of 2022.
Gross profit margin increased to 33.1%, up 1,040 basis points from the comparable quarter in 2022.
Backlog finished at $526.2 million, up 13.4% from a year ago.
Aaon
Aaon
Forward Guidance
The sales channel has never been stronger and new marketing efforts will help continue to strengthen market penetration. In the third quarter of this year, we anticipate the sales and marketing roll out of our industry-leading class of air-source heat pumps, appropriately referred to as ALPHA Class.
Positive Outlook
- AAON has been very successful in hiring and retaining employees.
- We've added the additional employees needed to increase our run rate.
- We anticipate continued margin improvement created from a fully trained, more experienced workforce.
- We anticipate continued margin improvement created from better overhead absorption from additional production volume.
- The sales channel has never been stronger and our new marketing efforts will help continue to strengthen market penetration.
Challenges Ahead
- There are pockets of softness amongst some of our end-markets.
- Backlog size and lead times are still higher than we would like them to be.
- Capital expenditures in the quarter were $31.7 million due to our continuous investment at all locations.
- SG&A expenses increased 90 basis points to 13.8%.
- We recognized a one-time income tax benefit of $3.1 million from the change in our valuation allowance during the current quarter that contributed to the increase to net income for the period.