Inventories

9 Months Ended

Sep. 30, 2025

Inventories are valued at the lower of cost or net realizable value. Cost is determined by the first-in, first-out (“FIFO”) method. We establish an allowance for excess and obsolete inventories based on product line changes, the feasibility of substituting parts and the need for supply and replacement parts.

The components of inventories and related changes in the allowance for excess and obsolete inventories account are as follows:


	September 30, 2025		December 31, 2024
	(in thousands)
Raw materials	$	255,744	$	192,136
Work in process	13		20
Finished goods	971		456
Total, gross	256,728		192,612
Less: Allowance for excess and obsolete inventories	6,217		5,192
Total, net	$	250,511	$	187,420


	Three Months Ended				Nine Months Ended
	September 30, 2025		September 30, 2024		September 30, 2025		September 30, 2024
Allowance for excess and obsolete inventories:	(in thousands)
Balance, beginning of period	$	5,480	$	6,801	$	5,192	$	6,160
Provision for excess and obsolete inventories	785		2,075		1,417		4,003
Inventories written off	(48)		(868)		(392)		(2,155)
Balance, end of period	$	6,217	$	8,008	$	6,217	$	8,008

AAON, INC. 10-Q