AAON, Inc.

Good morning, ladies and gentlemen. Welcome to Aon, Inc.'s second quarter sales and earnings call. There will be a questions and answer period after management's brief presentation. This call will last approximately 45 minutes to an hour. I will now turn the meeting over to Gary Fields, CEO and President. Please go ahead.

Good morning. Thank you for joining us. I'd like to begin by reading a forward-looking disclaimer. A reminder 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, the Securities Act of 1933, and the Securities and Exchange Act of 1934, each as amended. 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. Today joining me on the call, our Executive Chairman, Norman Asbjornson, and our Chief Financial Officer, Rebecca Thompson. Rebecca will open by reviewing our financial performance. Rebecca, please.

Thank you, Gary. I'd like to begin by discussing the comparative results of the three months ended June 30, 2021 versus June 30, 2020. Net sales increased 14.6% to $143.9 million from $125.6 million. The year-over-year increase was driven by robust replacement demand Broadly across our non-residential building market. Higher production rates were also a contributing factor as we did not experience COVID-related employee absences like we did in 2020. Also, the 4% price increase we implemented in early January was a driving factor. All of these items were partially offset by changes in the product mix to lower priced units. Our gross profit increased 10.4% to $42.1 million from $38.1 million. As a percentage of sales, gross profit was 29.3% in the quarter just ended compared to 30.4% in the second quarter of 2020. The slight decline in gross profit was mainly related to higher material costs. Selling, general, and administrative expenses increased 6% to $16.9 million from $15.9 million in 2020. As a percentage of sales, SG&A decreased to 11.7% of total sales in the quarter just ended from 12.7% in the second quarter of 2020. SG&A as a percent of sales decreased as we did not have the $1.25 million donation we made in 2020 to Winifred Public Schools. Income from operations increased 13.6% to $25.2 million or 17.5% of sales from $22.2 million or 17.7% of sales in 2020. Our effective tax rate was decreased to 18.3% from 20%. The lower tax rate was mainly related to lower corporate income tax rates in the state of Oklahoma that were signed into law during the quarter. This resulted in a one-time benefit of $0.8 million. The company's estimated annual 2021 effective tax rate, excluding discrete events, is expected to be approximately 25%. Net income increased to $20.6 million or 14.3% of sales compared to $17.8 million or 14.2% of sales in the first quarter of 2020. Diluted earnings per share increased by 11.8% to $0.38 per share from $0.34 per share in 2020. Turning to the balance sheet, you'll see that we had a working capital balance of $180.6 million versus $161.2 million at December 31, 2020. Unrestricted cash totaled $111.4 million at June 30, 2021, up from $79 million at the end of 2020. Our current ratio is approximately 3.3 to 1. Our capital expenditures were $33.2 million for the six months ended June 30, 2021. We expect capital expenditures for the year to be approximately $70 million. The company has stock repurchases of $10.3 million during the six months into June 30, 2021. Shareholders' equity per diluted share is $7.14 at June 30, 2021, compared to $6.67 at December 31, 2020. I'd now like to turn the call back over to our CEO and President, Gary Fields.