AAON, Inc.

Good afternoon, ladies and gentlemen. Welcome to the AAON, Inc. for quarter sales and earnings call. There will be a question and answer period after the management's brief presentation. This call will last approximately 45 minutes to an hour. And I would then like to turn the meeting over to Mr. Garfields. Please go ahead, Mr. Fields.

Good afternoon. Welcome to our Q121 earnings announcements. I'd like to read a forward-looking disclaimer to begin with. To the extent any statement presented herein deals with information that is not historical, including the outlook for the remainder of the year, such statement is necessarily forward-looking and made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. As such, it is subject to the occurrence of many events outside Aon's control that could cause Aon's results to differ materially from those anticipated. Please see the risk factors contained in our most recent SEC filings, including the annual report on Form 10-K and the quarterly report on Form 10-Q. So joining me on the call today, Norm Asbjornson, our Executive Chairman, Rebecca Thompson, our newly promoted Chief Financial Officer. Rebecca is going to open by reviewing our financial performance. So Rebecca, the floor is yours.

Thank you, Gary. I'd like to begin by discussing the comparative results of the three months into March 31, 2021 versus March 31, 2020. Net sales declined 15.8% to $115.8 million from $137.5 million. The first quarter of 2020 benefited from a high backlog that allowed the company to run at full capacity and set all-time record highs for net sales in the first quarter. Thank you for joining us. compared to 31.2% in the first quarter of 2020. The production days we lost in the quarter resulted in unfavorable labor and overhead inefficiencies, including the company's ability to absorb certain fixed costs, which caused the decrease in our gross profit. Selling, general, and administrative expenses decreased 3.4% to $14.7 million from $15.2 million in 2020, As a percentage of sales, SG&A increased to 12.7% of total sales, and the quarter just ended from 11.1% in the first quarter of 2020. The increase in SG&A as a percent of sales was due to an increase in insurance premiums and salaries and benefits. Income from operations decreased 33.6% to $18.5 million, or 15.9% of sales from 27.8 million or 20.2% sales in 2020. Our effective tax rate decreased to 11.4% from 21.5%. The unusually low tax rate was mainly related to a 1.8 million increase in our excess tax benefits associated with stock awards. The company's estimated annual 2021 effective tax rate, excluding discrete events, is expected to be approximately 27%. Net income decreased to $16.4 million or 14.1% of sales compared to $21.9 million or 15.9% of sales in the first quarter of 2020. Diluted earnings per share decreased by 26.8% to 30 cents per share from 41 cents per share. Turning to the balance sheet, you'll see that we had a working capital balance of $178.7 million versus 161.2 million at December 31st, 2019. Our unrestricted cash totaled 97 million at March 31st, 2021. Our current ratio is approximately 3.7 to 1. Our capital expenditures were 16.4 million for the quarter. We expect capital expenditures for the year to be approximately 70.7 million. The company had stock repurchases of $5.2 million during the three months ended March 31st, 2021. Shareholders' equity per diluted share is $6.93 at March 31st, 2021 compared to $6.67 at December 31st, 2020. I'd now like to turn the call back over to our CEO and President, Gary Fields.