AAON, INC.
For the period ended Sep 30, 2026. Filed Nov 9, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 9, 2026
AAON$62.87+9.9%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0000824142-26-000055
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-09.
0000824142-26-000088
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 116 previous paragraphs and 121 current paragraphs.
84 unchanged; 30 reworded; 7 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 16 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
On August 21, 2026, AAON, Inc., a Nevada corporation (the "Company") announced that it would operate under the trade name The Aaon Group. This new enterprise identity reflects the Company's evolution into a multi-brand organization with a clear distinction between the enterprise and the Company's operating brands, AAON and BASX.
Current report
The planned replacement and retrofit market continues to be an important source of demand for AAON-branded products and has historically been less sensitive to economic cycles than new construction. Sales in the replacement markets are sustained by an aging domestic equipment base, tightening environmental and efficiency regulations, and customers' growing preference for high-quality, premium efficiency, configurable equipment that lowers long-term operating cost. During periods of softer new construction activity, we are increasingly engaged in these opportunities as the market opportunity shifts.
Current report
Demand for our BASX-branded products is driven primarily by the data center market and, to a lesser extent, the advanced cleanroom market. Data center construction activity in the U.S. has continued to grow in 2026, and our customers' published capital spending plans indicate continued investment. The continued adoption of artificial intelligence and high-performance computing is increasing computing density and, in turn, the cooling requirements of data centers, which has supported strong demand for our liquid cooling and custom air-handling solutions. Because data center projects are large and planned well in advance, demand in this market has generally been driven more by customers' long-term capacity plans than by near-term economic conditions.
Current report
To meet this demand, we have made substantial investments to expand our manufacturing capacity and capabilities. Production volumes have increased as this capacity comes online, although the pace is dependent on customer project schedules. However, a significant portion of our data center sales comes from a limited number of customers, and the timing of their orders and deliveries can vary. As a result, changes in their capital spending plans or project schedules could cause our results to fluctuate from period to period.
Current report
Beginning in January 2025, the current United States (“U.S.”) Administration began enacting a series of tariffs affecting nearly all goods imported into the U.S. In February 2026, the U.S. Supreme Court held that tariffs imposed under the International Emergency Economic Powers Act were not authorized, and refunds of those duties are being processed by U.S. Customs and Border Protection. Tariffs imposed under other authorities, including Section 232 tariffs on steel, aluminum and copper, were not affected by the ruling and were expanded during 2026. Ongoing changes in trade policy can affect the cost and availability of materials, parts and components throughout our supply chain.
Current report
On October 27, 2026, following the completion of the applicable seven-year compliance period, the Company completed the unwind of its 2019 NMTC transaction. As a result of the unwind, the related NMTC financing structure was terminated. The Company is expected to have a noncash gain of approximately $7.0 million related to the unwind in the fourth quarter.
Current report
•the material weakness in the effectiveness of our internal controls over financials reporting identified in this Quarterly Report on Form 10-Q, and the impact of our ability to adequately remediate the material weakness in a timely manner;
Removed paragraphs (2)
Previous report
Our BASX brand is heavily dependent on the data center market. The growing maturity and adoption of Artificial Intelligence and high-performance compute is driving profound innovation across the data center market, resulting in increased demand for our products and solutions. Between 2022 and 2025, total put‑in‑place construction spending for data centers expanded by approximately 240.0%, and present indicators suggest continued strength with no meaningful signs of slowing in the foreseeable future. In response, we have made substantial capital investments to expand our capacity and ensure we are fully equipped to support this accelerating growth trajectory.
Previous report
We make strategic purchases of materials when we see opportunities or potential disruptions in our supply chain. We have experienced supply chain challenges related to specific manufacturing parts, which could be exacerbated by the trade conflict. We manage our supply chain challenges through strong vendor relationships as well as expanding our list of available vendors.
Reworded paragraphs (30)
Previous wording
Foreign sales were approximately $7.6 million and $18.8 million for the three and six months ended June 30, 2026, as compared to $7.5 million and $18.8 million for the three and six months ended June 30, 2025.
Current wording
Foreign sales were approximately $7.5 million and $26.3 million for the three and nine months ended September 30, 2026, as compared to $9.1 million and $27.9 million for the three and nine months ended September 30, 2025.
Previous wording
Our AAON brand can be affected by a number of economic factors, including the level of economic activity in the markets in which we operate. After the commercial and industrial new construction markets came to a standstill in 2020–2021, our core nonresidential end‑markets entered a period of robust growth, increasing by approximately 50.0% between 2022 and 2024. By late 2024, however, these markets began to contract, and the softening continued through 2025, though at a moderate rate. While leading indicators signal a stabilization in activity, we have not observed clear indications of a significant reacceleration. Furthermore, signals from general economic indicators are mixed regarding the health of the general economy. If the domestic economy were to slow or enter a recession, this could further impact our new construction markets and also weigh on the replacement market, potentially resulting in reduced sales volumes and profitability. Sales in the commercial and industrial new construction markets generally lag behind the housing market, which in turn is influenced by cyclical factors such as interest rates, inflation, consumer spending habits, employment rates, the state of the economy and other macroeconomic factors over which we have no control. Sales in the replacement markets are driven by various factors, including general economic growth, the Company's new product introductions, fluctuations in the average age of existing equipment in the market, government regulations and stimulus, change in market demand between more customized, higher performing HVAC equipment and lower priced standard equipment, as well as many other factors. When new construction is down, we emphasize the replacement market.
Current wording
Our AAON brand can be affected by a number of economic factors, including the level of economic activity in the markets in which we operate. Following strong growth from 2022-2024 our traditional nonresidential end markets entered a contraction that has continued into 2026. Leading indicators for new commercial and industrial building activity remain soft. Leading indicators for new commercial and industrial building activity remain soft, and although certain indicators suggest conditions may be stabilizing, we have not yet observed a sustained improvement in our markets. If the domestic economy were to slow this could further impact our new construction markets and also weigh on the replacement market, potentially resulting in reduced sales volumes and profitability. Sales in the commercial and industrial new construction markets generally lag behind the housing market, which in turn is influenced by factors such as interest rates, inflation, consumer spending habits, employment rates, the state of the economy and other macroeconomic factors over which we have no control.
Previous wording
We sell our products to property owners and contractors mainly through a network of independent manufacturers’ Representatives. This go-to-market strategy is unique compared to most of our larger competitors in that most control their sales channel. We value the independent sales channel as we think it is a more effective way of increasing market share. Although we concede full control of the sales process with this strategy, the entrepreneurial aspect of the independent sales channel attracts the most talent and provides greater financial incentives for its salespeople. Further, the independent sales channel sells different types of equipment from various manufacturers, allowing it to operate with more of a solutions-based mindset, as opposed to an internal sales department of a manufacturing company that is incentivized to only sell its equipment regardless if it is the best solution for the end customer. We also have a small internal sales force that supports the relationships between the Company and our sales channel partners. BASX sells highly customized products for unique applications for a more concentrated customer base and an internal sales force is more effective for such products.
Current wording
We sell our products to property owners and contractors mainly through a network of independent manufacturers’ Representatives. This go-to-market strategy is unique compared to most of our larger competitors in that most control their sales channel. We value the independent sales channel as we think it is a more effective way of increasing market share. Although we concede full control of the sales process with this strategy, the entrepreneurial aspect of the independent sales channel attracts the most talent and provides greater financial incentives for its salespeople. Further, the independent sales channel sells different types of equipment from various manufacturers, allowing it to operate with more of a solutions-based mindset, as opposed to an internal sales department of a manufacturing company that is incentivized to only sell its equipment regardless of if it is the best solution for the end customer. We also have a small internal sales force that supports the relationships between the Company and our sales channel partners. BASX sells highly customized products for unique applications for a more concentrated customer base, and an internal sales force is more effective for such products.
Previous wording
The price levels of our raw materials fluctuate due to various economic factors within the U.S. and global economy. At June 30, 2026, the price (year to date average) for copper and aluminum increased by approximately 8.2% and 20.3%, respectively, while stainless steel and galvanized steel decreased approximately 14.1% and 3.4%, respectively.
Current wording
The price levels of our raw materials fluctuate due to various economic factors within the U.S. and global economy. At September 30, 2026, the price (year to date average) for copper and aluminum increased by approximately 7.8% and 18.2%, respectively, while stainless steel and galvanized steel decreased approximately 10.8% and 1.7%, respectively.
Previous wording
Beginning in January 2025, the current United States (“U.S.”) Administration began enacting a series of tariffs affecting nearly all goods imported into the U.S. In retaliation, numerous foreign countries imposed reciprocal tariffs and restricted certain exports to the U.S. The continuous changes and uncertainty in tariff policy could impact our cost of materials, parts, or components imported into the U.S. and could impact the availability of supply from our vendors. We source raw materials domestically, but historically have seen those suppliers increase prices when tariffs are increased. Additionally, while we source most components domestically, our vendors may be impacted by tariffs if they use foreign parts and materials and often pass any additional costs as a result of tariffs through to us. Where appropriate, we attempt to mitigate these cost increases by implementing targeted price adjustments across select product lines. Although the realization of these surcharges may lag initial cost increases due to production lead times, we expect pricing actions to help offset tariff-related margin impacts over time, subject to market demand and competitive dynamics.
Current wording
While we source our raw materials and most components domestically, our domestic suppliers have historically increased prices when tariffs increase. In addition, many of our vendors rely on imported parts and materials and often attempt to pass tariff-related costs through to us. Where appropriate, we attempt to mitigate these cost increases through targeted price adjustments across select product lines. Although the realization of these pricing actions may lag cost increases due to production lead times, we expect them to help offset margin impacts over time, subject to market demand and competitive dynamics. We continue to make strategic purchases of materials when we identify favorable procurement opportunities or potential supply disruptions, and we work closely with our vendors to manage supply chain challenges as well as expanding our list of available vendors.
Previous wording
At June 30, 2026, our consolidated backlog is $1,970.8 million, an increase of 98.0%, or $975.5 million, as compared to June 30, 2025. Backlog is up from a year ago for both AAON-branded products and BASX-branded products with BASX-branded products increasing 185.4%, or $929.3 million, when compared to June 30, 2025. Most of these orders were associated with the BASX-branded data center liquid cooling solutions.
Current wording
At September 30, 2026, our consolidated backlog is $1,854.5 million, an increase of 40.5%, or $534.4 million, as compared to September 30, 2025. Backlog is up from a year ago for both AAON-branded products and BASX-branded products with BASX-branded products increasing 51.1%, or $458.3 million, when compared to September 30, 2025. Most of these orders were associated with the BASX-branded data center liquid cooling solutions.
Previous wording
•Net sales for the three months ended June 30, 2026 grew 101.2% to $627 million driven by the strong demand and growth of our BASX-branded products. BASX-branded products increased 216.2%, or $235.7 million when compared to the three months ended June 30, 2025. Net sales of AAON-branded products also increased 39.3%, to $79.7 million for the three months ended June 30, 2026. This growth is driven by the robust backlog and increased production throughput from our capacity investment and operational improvements.
Current wording
•Net sales for the three months ended September 30, 2026, grew 84.1% to $707 million driven by the strong demand and growth of our BASX-branded products. BASX-branded products increased 218.3%, or $272.4 million when compared to the three months ended September 30, 2025. Net sales of AAON-branded products also increased 19.6%, to $310 million for the three months ended September 30, 2026. This growth is driven by the robust backlog and increased production throughput from our capacity investment and operational improvements.
Previous wording
•As a percent of sales, SG&A has declined from 19.0% for the three months ended June 30, 2025 to 13.3% for the three months ended June 30, 2026, demonstrating strong operating leverage and disciplined cost management.
Current wording
•As a percent of sales, SG&A has declined from 16.5% for the three months ended September 30, 2025 to 12.5% for the three months ended September 30, 2026, demonstrating strong operating leverage and disciplined cost management.
Previous wording
•We have a strong balance sheet with a leverage ratio of 1.46 and available borrowings under our Revolver of $163.7 million.
Current wording
•We have a strong balance sheet with a leverage ratio of 1.0 and available borrowings under our Revolver of $212.6 million.
Previous wording
We report our financial results based on three reportable segments: AAON Oklahoma, AAON Coil Products, and BASX, which are further described in “Segments” (Note 21) within our notes to the consolidated financial statements. The Company’s chief operating decision maker (“CODM”), our CEO, allocates resources and assesses the performance of each operating segment using information about the operating segment's net sales and gross profit. The CODM does not evaluate operating segments using asset or liability information.
Current wording
We report our financial results based on three reportable segments: AAON Oklahoma, AAON Coil Products, and BASX, which are further described in “Segments” (Note 21) within our notes to the consolidated financial statements. The Company’s chief operating 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. The CODM does not evaluate operating segments using asset or liability information.
Previous wording
Total net sales increased $315.4 million, or 101.2%. AAON Oklahoma had net sales of $262.3 million, an increase of 41.7% compared to the same period in the prior year. This increase was driven by the strong backlog entering the quarter and a successful ramp up of production. Sales were up 150.9% at AAON Coil Products, primarily driven by growth in BASX-branded products of $85.6 million for a large liquid cooling data center. BASX net sales were up 220.7% to $218.0 million due to the continued demand for data center solutions and increasing production out of our Memphis facility.
Current wording
Total net sales increased $323.2 million, or 84.1%. AAON Oklahoma had net sales of $283.5 million, an increase of 18.7% compared to the same period in the prior year. This increase was driven by the strong backlog entering the quarter and a successful ramp up of production. Sales were up 174.2% at AAON Coil Products, primarily driven by growth in BASX-branded products of $119.0 million for a large order for liquid cooling products for data centers. BASX net sales were up 207.4% to $231.3 million due to the continued demand for data center solutions and increasing production out of our Memphis facility.
Previous wording
Gross profit margin decreased to 24.3% of sales from 26.6%. AAON Oklahoma’s decrease in gross profit margin is driven by the additional overhead from our Memphis plant. Memphis is part of AAON Oklahoma, building intercompany sales for the BASX segment at cost. As such, the sales and gross profit from orders completed in Memphis are reflected in the BASX segment, but the additional overhead cost of running the plant is reflected in the AAON Oklahoma segment. Memphis contributed $18.1 million and $3.0 million in cost of sales to the AAON Oklahoma segment for the three months ended June 30, 2026 and 2025, respectively. AAON Coil Products gross profit margin decreased to 16.0% from 17.5% as a result of higher material costs.
Current wording
Gross profit margin decreased to 26.7% of sales from 27.8%. AAON Oklahoma’s decrease in gross profit margin is driven by the additional overhead from our Memphis plant. Memphis is part of AAON Oklahoma, building intercompany sales for the BASX segment at cost. As such, the sales and gross profit from orders completed in Memphis are reflected in the BASX segment, but the additional overhead cost of running the plant is reflected in the AAON Oklahoma segment. Memphis contributed $20.7 million and $4.5 million in cost of sales to the AAON Oklahoma segment for the three months ended September 30, 2026 and 2025, respectively. AAON Coil Products gross profit margin increased to 25.8% from 11.0% as a result of higher sales volume of BASX-branded products that led to improved overhead absorption. BASX gross profit increased to 28.7% from 27.0% due to additional volume coming from our Memphis facility, partially offset by higher costs related to outsourcing of materials to support robust growth.
Previous wording
Selling, general and administrative expenses increased $24.5 million for the three months ended June 30, 2026, from the prior year period. Salaries and benefits have increased as we add additional headcount to help build out our organizational capacity for future growth along with additional bonuses and employee incentives due to better earnings. Warranty is up $7.4 million due to an increase in our historical claims. Profit sharing is up reflecting improved earnings versus the comparative quarter.
Current wording
Selling, general and administrative expenses increased $25.3 million for the three months ended September 30, 2026, from the prior year period. Salaries and benefits have increased as we added headcount to help build out our organizational capacity for future growth along with additional bonuses and employee incentives due to better earnings. Profit sharing has increased 5.9 million due to better earnings during the quarter. Depreciation and amortization have increased due to increased investments from our ERP implementation. Warranty is up $2.4 million due to an increase in our historical claims.
Previous wording
The Company’s estimated annual 2026 effective tax rate, excluding discrete events, is expected to be approximately 25.0%. Discrete events such as excess tax benefits related to stock compensation and various tax credits consistently provide a benefit, keeping our actual effective rate lower than the stated 25.0%.
Current wording
The Company’s estimated annual 2026 effective tax rate, excluding discrete events, is expected to be approximately 25.7%. Discrete events such as excess tax benefits related to stock compensation and various tax credits consistently provide a benefit, keeping our actual effective rate lower than the stated 25.7%. For the three months ended September 30, 2026, the Company saw minimal tax benefits related to our stock compensation due to our lower stock price. Additionally, the Company saw an increase in state related taxes due to non-conformity with provisions of the OBBA.
Previous wording
Segment Operating Results for the Six Months Ended June 30, 2026 and 2025
Current wording
Segment Operating Results for the Nine Months Ended September 30, 2026 and 2025
Previous wording
Total net sales increased $490.3 million, or 77.4% driven by growth across all segments. AAON Oklahoma saw significant improvement with an increase of$159.3 million in net sales driven by increased production out of the Tulsa facility and a stronger backlog heading into 2026. AAON-branded products were impacted in the first quarter of 2025 due to the change in refrigerant and then in the second quarter due to a lack of coils from AAON Coil Products. The $111.8 million increase in net sales for AAON Coil Products is due to sales of BASX-branded products for liquid cooling data center orders. Additionally, AAON Coil Products was impacted in 2025 by disruption caused by the transition to a new Enterprise Resource Planning (“ERP”) on April 1st. BASX net sales are up $219.2 million due to the production of BASX-branded products from our Memphis facility.
Current wording
Total net sales increased $824.2 million, or 81.0%, driven by growth across all segments. AAON Oklahoma saw significant improvement with an increase of $204.0 million in net sales driven by increased production out of the Tulsa facility and a stronger backlog heading into 2026. AAON-branded products were impacted in 2025 due to the change in refrigerant, a lack of coils from AAON Coil Products and the ability to hire additional personnel. The $223.8 million increase in net sales for AAON Coil Products is due to sales of BASX-branded products for liquid cooling data center orders. Additionally, AAON Coil Products was impacted in 2025 by disruption caused by the transition to a new Enterprise Resource Planning (“ERP”) on April 1st. BASX net sales are up $396.4 million due to the production of BASX-branded products from our Memphis facility.
Previous wording
Gross profit as a percentage of sales is down at 24.7% compared to 26.7% in the same period a year ago. AAON Oklahoma gross profit margin is down to 25.3% due to overhead costs from our ramping Memphis facility. The approximate overhead related to the Memphis plant is$28.0 million. and $5.3 million for the six months ended June 30, 2026 and 2025, respectively. BASX gross profit margin remained flat year-over-year with additional costs related to outsourcing which limited the benefits realized by the additional volume.
Current wording
Gross profit as a percentage of sales is down at 25.9% compared to 27.1% in the same period a year ago. AAON Oklahoma gross profit margin is down to 25.4% due to overhead costs from our ramping Memphis facility. The approximate overhead related to the Memphis plant is $48.3 million and $9.3 million for the nine months ended September 30, 2026 and 2025, respectively. AAON Coil Products gross profit margin declined slightly related to higher material costs. BASX gross profit margin increased to 30.6% from 26.4%due to increased volumes from improved operations out of Memphis.
Previous wording
Six-month average raw material cost per pound as of June 30:
Current wording
Nine-month average raw material cost per pound as of September 30:
Previous wording
Selling, general and administrative expenses as a percentage of sales are down year-over-year to 13.5% from 17.4% in 2025. The dollar increase of $41.1 million is primarily driven by higher salaries and benefits, including profit sharing and stock compensation. Profit sharing is up as a result of our higher earnings in the period. Salaries and benefits have increased due to increased headcount as well as due to additional employee bonuses and incentives. Warranty has increased due to increases in sales and higher historical claims.
Current wording
Selling, general and administrative expenses as a percentage of sales are down year-over-year to 13.2% from 17.1% in 2025. The dollar increase of $69.1 million is primarily driven by higher salaries and benefits, including profit sharing. Profit sharing is up as a result of our higher earnings in the period. Salaries and benefits have increased due to increased headcount as well as due to additional employee bonuses and incentives. Warranty has increased due to increases in sales and higher historical claims.
Previous wording
The Company’s estimated annual 2026 effective tax rate, excluding discrete events, is expected to be approximately 25.0%. Discrete events such as excess tax benefits related to stock compensation and various tax credits consistently provide a benefit, keeping our actual effective rate lower than the stated 25.0%.
Current wording
The Company’s estimated annual 2026 effective tax rate, excluding discrete events, is expected to be approximately 25.7%. Discrete events such as excess tax benefits related to stock compensation and various tax credits consistently provide a benefit, keeping our actual effective rate lower than the stated 25.7%.
Previous wording
Working Capital - Our unrestricted cash and cash equivalents increased $11.5 million from December 31, 2025 to June 30, 2026.
Current wording
Working Capital - Our unrestricted cash and cash equivalents remained stable as we apply available cash against our revolver. Restricted cash increased $2.4 million from December 31, 2025 to September 30, 2026 due to the net proceeds from the 2026 NMTC transaction. During the second quarter of 2026, we received net proceeds of $12.9 million from the 2026 NMTC transaction, which were restricted for use on our Memphis, Tennessee facility. During the third quarter of 2026, these funds were released to reimburse us for qualifying Memphis capital expenditures previously funded with borrowings under our Revolver, and we used the proceeds to reduce our Revolver balance.
Previous wording
As of June 30, 2026, and December 31, 2025, we had an outstanding balance under the Revolver of $435.0 million and $398.3 million, respectively. We had two standby letters of credit totaling $1.3 million and one standby letter of credit totaling $0.7 million as of June 30, 2026, and December 31, 2025, respectively. Borrowings available under the Revolver at June 30, 2026, were $163.7 million.
Current wording
As of September 30, 2026, and December 31, 2025, we had an outstanding balance under the Revolver of $386.7 million and $398.3 million, respectively. We also had one standby letter of credit totaling $0.7 million at each period end. Borrowings available under the Revolver at September 30, 2026, were $212.6 million.
Previous wording
Fees associated with the unused portion of the committed amount are included in interest expense on our consolidated statements of income for the three and six months ended June 30, 2026 and 2025.
Current wording
Fees associated with the unused portion of the committed amount are included in interest expense on our consolidated statements of income for the three and nine months ended September 30, 2026 and 2025.
Previous wording
At June 30, 2026, we were in compliance with our financial covenants, as defined by the Revolver. These covenants require that we meet certain parameters related to our leverage ratio. At June 30, 2026, our leverage ratio was 1.46 to 1.0, which meets the requirement of not being above 3 to 1.
Current wording
At September 30, 2026, we were in compliance with our financial covenants, as defined by the Revolver. These covenants require that we meet certain parameters related to our leverage ratio. At September 30, 2026, our leverage ratio was 1.0 to 1.0, which meets the requirement of not being above 3 to 1.
Previous wording
The following table reflects the major categories of cash flows for the six months ended June 30, 2026 and 2025. For additional details, see the consolidated financial statements.
Current wording
The following table reflects the major categories of cash flows for the nine months ended September 30, 2026 and 2025. For additional details, see the consolidated financial statements.
Previous wording
Current payment terms for some BASX-branded jobs primarily require the Company to fund the upfront working capital resulting in cash outflows related to our contract assets. Similarly, some BASX-branded jobs require down payments, resulting in cash inflows related to our contract liabilities. The Company experienced carrying working capital for extended periods of time during this period of growth and expansion at our Longview and Memphis plants.
Current wording
Current payment terms for some BASX-branded jobs primarily require the Company to fund the upfront working capital resulting in cash outflows related to our contract assets. Similarly, some BASX-branded jobs require down payments, resulting in cash inflows related to our contract liabilities. The Company experienced elevated working capital for extended periods of time during this period of growth and expansion at our Longview and Memphis plants.
Previous wording
Capital expenditures during the six months ended June 30, 2026, relate to the continued build out of our Memphis, Tennessee facility and maintenance of our Tulsa facility. We continue to make investments to purchase and develop software for internal use in anticipation of future Company growth.
Current wording
Capital expenditures during the nine months ended September 30, 2026, relate to the continued build out of our Memphis, Tennessee facility and maintenance of our Tulsa facility. We continue to make investments to purchase and develop software for internal use in anticipation of future Company growth.
Previous wording
In 2023, the Company executed a five-year purchase commitment for refrigerants. For the three months ended June 30, 2026 and 2025, the Company made payments of $4.7 million and $2.1 million on this contract, respectively. Estimated minimum future payments are $5.8 million, and $11.2 million for 2026 and 2027, respectively.
Current wording
In 2023, the Company executed a five-year purchase commitment for refrigerants. For the three months ended September 30, 2026 and 2025, the Company made payments of $2.0 million and $1.6 million on this contract, respectively. Estimated minimum future payments are $1.0 million, and $7.7 million for 2026 and 2027, respectively.
Previous wording
In 2025, the Company executed three one-year purchase commitments for raw materials. Estimated minimum future payments are $18.8 million for 2026. We had no other material contractual purchase obligations as of June 30, 2026.
Current wording
In 2025, the Company executed three one-year purchase commitments for raw materials. Estimated minimum future payments are $11.8 million for 2026. We had no other material contractual purchase obligations as of September 30, 2026.
Previous wording
There have been no material changes in the Company’s critical accounting policies during the six months ended June 30, 2026.
Current wording
There have been no material changes in the Company’s critical accounting policies during the nine months ended September 30, 2026.