Q2 2024 Aaon Inc Earnings Call Transcript
Key Points
- AAON Inc (AAON) reported record sales, earnings, and backlog for the second quarter of 2024.
- The basics segment saw a significant increase in net sales, up 58.3% year-over-year and 103.7% compared to the first quarter.
- Sales of data center equipment produced at both Oregon and Texas facilities were up 142.4% year-over-year.
- Gross profit increased by 20.3% to $113.1 million, with gross profit margins improving to 36.1% from 33.1% in the second quarter of 2023.
- The company has a strong balance sheet with a current ratio of 3.0 and a leverage ratio of 0.3 times, providing financial flexibility for growth opportunities.
- Near-term visibility is limited, with week-to-week orders being volatile, making production planning more difficult.
- The reconfiguration of the production layout within the Redmond, Oregon facility continued to disrupt operations into Q2.
- Selling, general, and administrative expenses increased by 16.9%, primarily due to investments in technology, professional and legal fees, increased travel, and consulting expenses.
- The transition to new refrigerant regulations has created disruptions and increased volatility in bookings.
- The macro environment has become more challenging, with softening construction activity and interest rate concerns impacting the rooftop business segment.
Good afternoon, ladies and gentlemen, and welcome to the Aon Inc. second quarter of 2024 earnings conference call. At this time, all lines are in listen only mode following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August first, 2024.
I would now like to turn the conference over to Joe Mondillo, Director of Investor Relations. Please go ahead.
Thank you, operator, and good afternoon, everyone. The press release announcing our second quarter financial results was issued after market close today and can be found on our corporate website AON. dot com. The call today is accompanied with a presentation that you can also find on our website as well as on the listen only webcast.
Joining me on today's call is Gary Fields, CEO, Matt too, bulky, President and COO, and Rebecca Thompson, CFO and Treasurer.
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