Segments

12 Months Ended

Dec. 31, 2024

Segment Reporting [Abstract]

Segments

Segments

The Company has determined that it has three reportable segments for financial reporting purposes.

AAON Oklahoma: AAON Oklahoma engineers, manufactures and sells semi-custom and custom HVAC systems, designs and manufactures controls solutions, and sells aftermarket parts to customers through retail part stores and online. AAON Oklahoma includes the operations of our Tulsa, Oklahoma, Memphis, Tennessee and Parkville, Missouri manufacturing facilities, two retail locations, and the Norman Asbjornson Innovation Center (“NAIC”) research and development laboratory accredited by the Air Movement and Control Association International, Inc. (“AMCA”).

With the NAIC, a world-class research and development (“R&D”) laboratory in Tulsa, Oklahoma, our products are continuously tested under a variety of extreme environmental conditions to ensure they deliver the ultimate performance, efficiency, and value.

Also located in Tulsa, Oklahoma, our cutting-edge Exploration Center showcases the engineering, design attributes, and premium build quality of our equipment side-by-side the market alternatives.

AAON Coil Products: AAON Coil Products engineers and manufactures a selection of our semi-custom, and custom HVAC systems as well as a variety of heating and cooling coils to be used in HVAC systems, mostly for the benefit of AAON Oklahoma, AAON Coil Products, and BASX. AAON Coil Products consists of operations at our Longview, Texas manufacturing facilities. BASX branded products are also manufactured in Longview.

BASX: BASX engineers, manufactures, and sells an array of custom, high-performance cooling solutions for the rapidly growing hyperscale data center market, ventilation solutions for cleanroom environments in the bio-pharmaceutical, semiconductor, medical and agriculture markets, and highly custom, air handlers and modular solutions for a vast array of markets. BASX consists of operations at our Redmond, Oregon manufacturing facilities.

The Company’s chief decision maker (“CODM”), our CEO, allocates resources and assesses the performance of each operating segment using information about the operating segment’s net sales, cost of sales, and gross profit directly attributable to our segments. The CODM does not evaluate operating segments using asset or liability information.

Due to the integrated nature of our Company as well as the increasing production of both AAON and BASX branded products across different segments, other costs and expenses, such as selling, general and administrative including corporate expense, are evaluated and resources allocated at a consolidated level.

The following table summarizes certain financial data related to our segments and significant segment expenses and other segment items regularly reviewed by our CODM. Transactions between segments are recorded based on prices negotiated between the segments. The cost of sales and gross profit amounts shown below are presented after elimination entries.

	Years Ended December 31,
	2024		2023		2022
	(in thousands)
AAON Oklahoma
External sales	$	858,711	$	897,919	$	663,845
Inter-segment sales	6,336		4,324		3,251
Eliminations	(6,336)		(4,324)		(3,251)
Net sales	858,711		897,919		663,845
Cost of sales1	556,305		577,852		490,862
Gross profit	302,406		320,067		172,983
AAON Coil Products
External sales	$	143,871	$	112,320	$	107,290
Inter-segment sales	38,373		38,831		30,932
Eliminations	(38,373)		(38,831)		(30,932)
Net sales	143,871		112,320		107,290
Cost of sales1	98,106		82,996		73,979
Gross profit	45,765		29,324		33,311
BASX
External sales	$	198,053	$	158,279	$	117,653
Inter-segment sales	666		1,480		79
Eliminations	(666)		(1,480)		(79)
Net sales	198,053		158,279		117,653
Cost of sales1	149,115		108,650		86,375
Gross profit	48,938		49,629		31,278
Consolidated gross profit	$	397,109	$	399,020	$	237,572
1 Presented after intercompany eliminations.
The reconciliation between consolidated gross profit to consolidated income from operations is as follows:
Consolidated gross profit	$	397,109	$	399,020	$	237,572
Less: Selling, general and administrative expenses	188,014		171,539		110,823
Add: Gain on disposal of assets	(23)		(13)		(12)
Consolidated income from operations	$	209,118	$	227,494	$	126,761

The following table presents long-lived assets by reportable segment, which includes property and equipment, net and operating lease assets:

	December 31,
	2024		2023
	(in thousands)
Long-lived assets
AAON Oklahoma	$	321,597	$	248,556
AAON Coil Products	122,515		83,169
BASX	81,680		49,996
Total long-lived assets	$	525,792	$	381,721

The following table presents intangible assets and goodwill, net, by reportable segment:

	December 31,
	2024		2023
	(in thousands)
Intangible assets and goodwill
AAON Oklahoma	$	22,966	$	10,282
AAON Coil Products	—		—
BASX	137,186		139,663
Total intangible assets and goodwill	$	160,152	$	149,945