AAON Coil Products sales grew 86.4%, driven by a large liquid cooling project, but AAON branded products declined due to ERP disruptions.
AAON Oklahoma segment sales declined 18% with a 970 basis point gross margin contraction, impacted by supply chain disruptions and ERP-related coil shortages.
BasX segment sales grew 20.4% with a slight gross margin contraction of 60 basis points, reflecting operational improvements.
Cash and equivalents totaled $1.3 million with debt at $317.3 million and a leverage ratio of 1.4; capital expenditures increased 18.7% to $89.6 million year-to-date.
Gross margin contracted by 950 basis points to 26.6%, primarily due to lower production volumes and inefficiencies related to the ERP implementation.
Net sales declined 0.6% year-over-year to $311.6 million, driven by a 20.9% decline in AAON branded sales nearly offset by a 90% increase in BasX branded sales.
Non-GAAP adjusted EBITDA was 14.9%, down 1,120 basis points, and non-GAAP adjusted EPS was $0.22, down 64.5% year-over-year.
Record Sales, EBITDA, and EPS Achieved in Fiscal 2025
Applied Industrial Technologies achieved new records for sales, EBITDA, and EPS in fiscal 2025, demonstrating strong operational resilience.
Full year EPS growth of 4% exceeded initial guidance, highlighting effective management despite a muted demand environment.
Gross margins expanded nearly 50 basis points, surpassing 30% for the first time in the company's history, indicating margin improvement.
The company generated over $465 million of free cash flow, a 34% increase, enabling significant capital deployment including acquisitions and share buybacks.
The strategic acquisition of Hydradyne, its largest in 6 years, contributed over 400 basis points of inorganic growth and was a key driver of the record performance.
Cash and cash equivalents stood at $2.2 million with $22.5 million in restricted cash as of June 30, 2025.
Cost of sales increased to $13.1 million in Q2 2025 from $7.3 million in Q2 2024, driven by higher sales volume and increased inventory reserves.
Interim funding of approximately $25 million from Motiv's controlling investor provided liquidity and debt repayment capability.
Net loss for the first half of 2025 improved to $35.4 million from $55.5 million in 2024, with operational net loss improving from $44.2 million to $27.3 million.
Q2 2025 sales net of returns and allowances were $5.7 million, a $4.8 million increase year-over-year.
Q2 2025 truck shipments reached a record 32 units, up from 1 in Q2 2024, driven by strong demand for the W56 step vans.
R&D expenses declined to $1.2 million in Q2 2025 from $2 million in Q2 2024 due to lower headcount and completion of key programs.
SG&A expenses decreased by $6.3 million year-over-year to $5.8 million in Q2 2025, reflecting lower employee compensation and other cost reductions.
Dafinchi