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Stockholders' Equity | 6 Months Ended
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Jun. 30, 2023
Stockholders' Equity Note [Abstract] |
Stockholders' Equity | Stockholders’ Equity Stock Repurchases The Board has authorized one active stock repurchase program for the Company. The Company may purchase shares on the open market from time to time. The Board must authorize the timing and amount of these purchases and all repurchases are in accordance with the rules and regulations of the SEC allowing the Company to repurchase shares from the open market. Our open market repurchase programs are as follows:
Effective Date |  | Authorized Repurchase $ |  | Expiration Date
March 13, 2020 |  | $20 million |  | November 9, 2022
November 3, 2022 |  | $50 million |  | ** 1
1 Expiration Date is at Board's discretion. The Company is authorized to effectuate repurchases of the Company's common stock on terms and conditions approved in advance by the Board.
The Company repurchases shares of AAON, Inc. stock from employees for payment of statutory tax withholdings on stock transactions. All other repurchases from directors or employees are contingent upon Board approval. All repurchases are done at current market prices. Lastly, the Company also had a stock repurchase arrangement by which employee-participants in our 401(k) savings and investment plan were entitled to have shares in AAON, Inc. stock in their accounts sold to the Company. The 401(k) Plan was amended in June 2022 to discontinue this program. No additional shares have been purchased by the Company under this arrangement since June 2022. Our repurchase activity is as follows:
|  | Six Months Ended
|  | June 30, 2023 |  | June 30, 2022
|  | (in thousands, except share and per share data)
Program |  | Shares |  | Total $ |  | $ per share |  | Shares |  | Total $ |  | $ per share
Open market |  | — |  |  | $ | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | $ | — |
401(k) |  | — |  |  | — |  |  | — |  |  | 103,936 |  |  | 5,913 |  |  | 56.89 |
Employees |  | 13,083 |  |  | 1,162 |  |  | 88.82 |  |  | 16,183 |  |  | 953 |  |  | 58.89 |
Total |  | 13,083 |  |  | $ | 1,162 |  |  | $ | 88.82 |  |  | 120,119 |  |  | $ | 6,866 |  |  | $ | 57.16 |
Our repurchase activity since Company inception, including our current authorized stock repurchase programs, are as follows:
|  | Inception to |  | June 30, 2023
|  | (in thousands, except share and per share data)
Program |  | Shares |  | Total $ |  | $ per share
Open market |  | 4,327,367 |  |  | $ | 81,616 |  |  | $ | 18.86 |
401(k) |  | 8,308,368 |  |  | 171,789 |  |  | 20.68 |
Directors and employees |  | 2,058,038 |  |  | 24,522 |  |  | 11.92 |
Total |  | 14,693,773 |  |  | $ | 277,927 |  |  | $ | 18.91 |
Cash Dividends At the discretion of the Board, we pay cash dividends. Board approval is required to determine the date of declaration and amount for each cash dividend payment. Our recent cash dividends are as follows:
Declaration Date 1 | Record Date | Payment Date | Dividend per Share | Annualized Dividend per Share
May 18, 2022 | June 3, 2022 | July 1, 2022 | $0.19 | $0.38
November 8, 2022 | November 28, 2022 | December 16, 2022 | $0.24 | $0.48
March 1, 2023 | March 13, 2023 | March 31, 2023 | $0.12 | $0.48
May 18, 2023 | June 9, 2023 | June 30, 2023 | $0.12 | $0.48
1 Effective with the cash dividend declared on March 1, 2023 (paid on March 31, 2023), the Company moved from semi-annual cash dividends to quarterly cash dividends.
Stock Split On July 7, 2023, the Board of Directors declared a three-for-two stock split of the Company's common stock to be paid in the form of a stock dividend. Stockholders of record at the close of business on July 28, 2023 will receive one additional share for every two shares they hold as of that date on August 16, 2023 (ex-dividend date August 17, 2023). Pro Forma Results of Stock Split The retroactive effect of the stock split, which will occur in the third quarter of 2023, will result in an insignificant (less than $0.1 million) reclass between common stock and retained earnings within stockholders' equity on the consolidated balance sheet. The following table sets forth the pro forma computation of basic and diluted earnings per share for the three and six months ended June 30, 2023 and 2022:
| (unaudited)
| Three Months Ended |  | Six Months Ended
| June 30, 2023 |  | June 30, 2022 |  | June 30, 2023 |  | June 30, 2022
Numerator: | (in thousands, except share and per share data)
Net income | $ | 45,682 |  |  | $ | 15,946 |  |  | $ | 82,496 |  |  | $ | 34,005 |
Denominator: |  |  |  |  |  |  |
Basic weighted average shares | 81,439,691 |  |  | 79,642,930 |  |  | 81,263,523 |  |  | 79,488,659 |
Effect of dilutive shares related to stock based compensation 1 | 2,029,890 |  |  | 849,885 |  |  | 2,002,199 |  |  | 1,121,997 |
Effect of dilutive shares related to contingent consideration 2 | — |  |  | — |  |  | 212,776 |  |  | 306,269 |
Diluted weighted average shares | 83,469,581 |  |  | 80,492,815 |  |  | 83,478,498 |  |  | 80,916,925 |
Earnings per share: |  |  |  |  |  |  |
Basic | $ | 0.56 |  |  | $ | 0.20 |  |  | $ | 1.02 |  |  | $ | 0.43 |
Dilutive | $ | 0.55 |  |  | $ | 0.20 |  |  | $ | 0.99 |  |  | $ | 0.42 |
Anti-dilutive shares: |  |  |  |  |  |  |
Shares | 347,368 |  |  | 1,319,331 |  |  | 263,905 |  |  | 987,893 |
1 Dilutive shares related to stock options, restricted stock, PSUs and Key Employee Awards (Note 12)
2 Dilutive shares related to contingent shares issued to the former owners of BASX (Note 15)
The unaudited pro forma financial information was prepared in accordance with GAAP and is not necessarily indicative of the results of operations that would have occurred if the stock split had been effective before the date indicated above, nor is it indicative of the future operating results of the Company. Contingent Shares Issued in BASX Acquisition In December 2021, we closed on the acquisition of BASX. Under the MIPA Agreement, we committed to $78.0 million in the aggregate of contingent consideration to the former owners of BASX, which is payable in approximately 1.04 million shares of the Company's common stock, par value $0.004 per share. The shares do not accrue dividends. Under the MIPA Agreement, the potential future issuance of the shares is contingent upon BASX meeting certain post-closing earn-out milestones during each of the years ended 2021, 2022, and 2023. Based on the final allocation of the consideration paid, we estimated the fair value of contingent consideration related to these shares to be approximately $60.0 million, which is included in additional paid-in capital on the consolidated balance sheets. As of June 30, 2023, 0.39 million shares and 0.49 million shares related to the earn-out milestones for the years ended 2022 and 2021, respectively, have been issued to the former owners of BASX as private placements exempt from registration with the SEC under Rule 506(b), which are included in common stock on the consolidated statements of stockholders' equity.

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