AAON (AAON) Q4 2022 earnings summary

Executive summary

• FY22 delivered record sales, earnings and backlog; equipment shipments rose ~30% YoY while industry volumes fell 1% on average.

• Favorable demand, shorter lead times, pricing actions and products ahead of new efficiency standards supported a push from niche toward mainstream market participation.

Financial highlights

• FY22 net sales rose 66.3% to $888.8M; growth included $100.0M from price increases, $149.8M from organic volume, mix and other, and 19.5% inorganic growth from BASX.

• Gross profit was $237.6M and gross margin 26.7%, up 90 bps YoY; operating income was $126.8M and net income $100.4M.

• Diluted EPS was $1.86 vs. $1.09 in FY21; income before taxes was $124.5M vs. $69.2M.

• Operating cash flow was $61.3M; cash, cash equivalents and restricted cash ended FY22 at $5.9M.

Outlook and guidance

• FY23 outlook calls for another year of record sales and earnings, supported by record backlog, improved backlog margin profile, rising production rates and positive early-year orders.

• FY23 capex budget is $135.0M, up 150% YoY, to expand current manufacturing capacity and support long-term facility growth.

• Backlog at Feb. 1, 2023 was $547.3M vs. $347.6M a year earlier; firm orders are targeted for fulfillment within ~25 weeks, but remain subject to customer cancellation.