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Risks
1. Risk of Overdependence on Construction Industry: The construction industry is heavily cyclical, meaning the company is exposed to cyclical ups and downs in revenues and cash flows.
2. Concentration Risk: AAON is heavily dependent on a few key suppliers, which means it is vulnerable to financial or operational difficulties experienced by these suppliers.
3. Price Pressures: AAON faces stiff competition from its peers, which can lead to price pressures that threaten its margins.
4. Weather Risk: AAON’s products are significantly impacted by extreme weather conditions such as hurricanes and tornadoes, which can disrupt business operations or increase insurance costs.
5. Foreign Exchange Risk: With product sales in international markets, AAON faces foreign exchange risk, related to changes in currency exchange rates.
6. Regulatory Risk: Changes in environmental, occupational health and safety regulations, and products standards can impact AAON’s ability to continue to operate profitably.