Aaon Q4 2020 Earnings Report
Key Takeaways
AAON reported a decrease in net sales for the fourth quarter of 2020, totaling $116.7 million compared to $122.6 million in 2019. However, diluted EPS increased by 6.1% to $0.35. The company experienced record sales of $514.6 million for the twelve months ending December 31, 2020, an increase of 9.6% compared to the previous year.
Net sales for Q4 2020 decreased to $116.7 million from $122.6 million in 2019, primarily due to additional plant holiday closures.
Diluted EPS for Q4 2020 increased by 6.1% to $0.35, impacted by a $0.08 gain from insurance proceeds.
Backlog at the end of the quarter was $74.4 million, a decline related to productivity and lead time improvements.
New bookings in the fourth quarter increased 6% year-over-year.
Aaon
Aaon
Forward Guidance
The outlook for 2021 continues to present uncertainty, especially for the first half of the year. While demand will be soft to start the year, activity should be moderate in the first half and then accelerate in the second half.
Positive Outlook
- New bookings in the fourth quarter still grew year-over-year 6%.
- Demand so far in 2021 has been surprisingly solid.
- Positive signs in replacement business and certain end-markets like data centers, warehouses and healthcare.
- Well positioned to take advantage of customers' increased focus on indoor air quality to address COVID challenges.
- Ongoing progress in transition from entrepreneurial leadership to a collaborative team-based management approach, a strengthening sales channel, improved productivity and lead times, new capacity at Longview, Texas facility and a strong product development pipeline.
Challenges Ahead
- The outlook for 2021 continues to present uncertainty, especially for the first half of the year.
- Architectural billings and nonresidential construction starts in 2020 suggest new construction demand will be soft.
- New construction demand will be soft, particularly in end-markets significantly impacted by the COVID-19 pandemic such as the hospitality and office building markets.
- Demand slowed as we finished the year.
- Believe demand will be soft to start the year.