AAON (AAON) Q4 2020 earnings summary

Executive summary

• Record FY2020 net sales of $514.6M, up 9.6% YoY, and net income of $79.0M, up 47.1%, despite COVID-related market disruption.

• Essential manufacturing operations continued through the pandemic; more than 5,000 tons of HVAC equipment shipped to critical infrastructure projects.

Financial highlights

• Revenue rose 9.6% to $514.6M; gross profit reached $155.8M, and gross margin improved to 30.3% from 25.4%.

• Operating income increased to $101.8M from $67.0M; net income rose to $79.0M from $53.7M.

• Diluted EPS was $1.49, up 46% YoY; reported results included a $6.4M pretax insurance gain, contributing $0.08 to diluted EPS after profit sharing and taxes.

• Operating cash flow was $128.8M; cash and cash equivalents were $79.0M at year-end, with no revolving-credit balance outstanding.

Outlook and guidance

• Growth is expected to moderate in 2021, particularly in H1, as nonresidential construction lags the economic recovery; recovery is anticipated in H2, with growth accelerating in 2022.

• 2021 capital expenditures are estimated at $70.7M; investments will support growth and manufacturing capacity.

• The redesigned next-generation water-source heat pumps are expected to launch by mid-2021, with a return to growth and share gains anticipated.