AAON Reports Higher 2012 and Record Fourth Quarter Results

Marketwired

TULSA, OK--(Marketwire - Mar 14, 2013) - AAON, Inc. (NASDAQ: AAON) today announced its operating results for the year 2012. Sales increased 14% to a record $303.1 million from $266.2 million in 2011, while net income increased 96% to $27.4 million compared to $14.0 million in the previous year. Sales in the fourth quarter of 2012 increased 23% to a record $78.0 million from $63.4 million in 2011. Net income increased 770% to a record $7.6 million compared to $0.9 million in the same period a year ago.

Earnings per diluted share for year 2012 were $1.11 compared to $0.56 in 2011, based upon 24.7 million and 24.9 million diluted shares outstanding, respectively, while earnings for the fourth quarter of 2012 were $0.31 per diluted share compared to $0.04 per diluted share in 2011, based upon 24.6 million and 24.8 million diluted shares outstanding, respectively.

Norman H. Asbjornson, President and CEO, stated, "We are very proud of our operating results for year 2012 and for exceeding $300 million in sales for the first time. These results were achieved in spite of a continuing weak national economy. We addressed these problems through the development of new products; improvement of our sales force; addition of new facilities; rearrangement of production lines; and purchases of improved manufacturing machinery. Also extremely important has been the stability, training and dedication of our employees. These factors combined to provide greater productivity, improved efficiencies and a significant increase in our market share."

Mr. Asbjornson then pointed out that, "While gross profit in 2012 increased greatly to 23.3% from 17.4% in 2011, this difference is attributable to the above-mentioned factors and abnormal expenses incurred in 2011 as previously reported. However, we have begun to witness some inflationary pressure from rising raw material, components and labor costs. If this continues, our 2012 gross profit may not be sustainable throughout the 2013 calendar year."

Mr. Asbjornson next said, "It appears from information available to us that there will be a flat to modestly improving economy in our segments of the HVAC industry in 2013. Based upon this forecast and other factors, we anticipate AAON having another good year in 2013."

The Company will host a conference call today at 4:15 P.M. Eastern Time to discuss year 2012 and fourth quarter results. To participate, call 1-877-737-1669 (Code:VA 55540).

AAON, Inc. is a manufacturer of air-conditioning and heating equipment consisting of rooftop units, chillers, air-handling units, condensing units, heat recovery units, commercial self-contained units and coils. Its products serve the new construction and replacement markets. The Company has successfully gained market share through its "semi-custom" product lines, which offer the customer value, quality, function, serviceability and efficiency.

Certain statements in this news release may be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933. Statements regarding future prospects and developments are based upon current expectations and involve certain risks and uncertainties that could cause actual results and developments to differ materially from the forward-looking statements.

   
   
   
AAON, Inc. and Subsidiaries  
Unaudited Consolidated Statements of Income  
                         
    Three Months Ended     Year Ended  
    December 31     December 31  
    2012     2011     2012     2011  
                         
    (in thousands, except per share data)  
Net sales   $ 78,008     $ 63,402     $ 303,114     $ 266,220  
Cost of sales     59,279       54,755       232,615       219,939  
Gross profit     18,729       8,647       70,499       46,281  
Selling, general and administrative expenses     6,634       5,611       26,261       22,310  
Loss(gain) on disposal of assets     21       1,816       4       1,802  
Income from operations     12,074       1,220       44,234       22,169  
Interest expense     (1 )     (104 )     (44 )     (277 )
Interest income     31       11       86       98  
Other income(expense), net     (9 )     213       41       (477 )
Income before taxes     12,095       1,340       44,317       21,513  
Income tax provision     4,517       469       16,868       7,527  
Net income   $ 7,578     $ 871     $ 27,449     $ 13,986  
                                 
Earnings per share:                                
  Basic   $ 0.31     $ 0.04     $ 1.12     $ 0.57  
  Diluted   $ 0.31     $ 0.04     $ 1.11     $ 0.56  
Cash dividends declared per common share:   $ 0.24     $ 0.12     $ 0.36     $ 0.24  
Weighted average shares outstanding:                                
  Basic     24,525       24,635       24,550       24,690  
  Diluted     24,630       24,821       24,699       24,881  
                                   
                                   
                                   
AAON, Inc. and Subsidiaries
Unaudited Consolidated Balance Sheets
         
    December 31
    2012   2011
Assets   (in thousands, except share and per share data)
Current assets:            
  Cash and cash equivalents   $ 3,159   $ 13
  Certificates of deposit     3,120     -
  Investments held to maturity at amortized cost     2,832     -
  Accounts receivable, net     43,866     34,137
  Income tax receivable     694     10,016
  Notes receivable     28     27
  Inventories, net     32,614     34,948
  Prepaid expenses and other     740     723
  Deferred tax assets     4,493     4,523
Total current assets     91,546     84,387
Property, plant and equipment:            
  Land     1,340     1,340
  Buildings     59,761     56,057
  Machinery and equipment     117,617     114,256
  Furniture and fixtures     8,906     7,784
    Total property, plant and equipment     187,624     179,437
    Less: Accumulated depreciation     96,929     85,935
  Property, plant and equipment, net     90,695     93,502
Certificates of deposit     2,120     -
Investments held to maturity at amortized cost     8,041     -
Note receivable, long-term     1,091     1,092
Total assets   $ 193,493   $ 178,981
             
Liabilities and Stockholders' Equity            
Current liabilities:            
  Revolving credit facility   $ -   $ 4,575
  Accounts payable     13,047     14,118
  Accrued liabilities     26,578     19,994
Total current liabilities     39,625     38,687
Deferred tax liabilities     15,732     17,790
             
Commitments and contingencies            
             
Stockholders' equity:            
Preferred stock, $.001 par value, 11,250,000 shares authorized, no shares issued     -     -
Common stock, $.004 par value, 112,500,000 shares authorized, 24,517,749 and 24,618,324 issued and outstanding at December 31, 2012 and 2011, respectively     98     98
Additional paid-in capital     -     -
Retained earnings     138,038     122,406
Total stockholders' equity     138,136     122,504
Total liabilities and stockholders' equity   $ 193,493   $ 178,981
             
             
             
AAON, Inc. and Subsidiaries  
Unaudited Consolidated Statements of Cash Flows  
                   
    Years Ending December 31,  
    2012     2011     2010  
Operating Activities   (in thousands)  
  Net income   $ 27,449     $ 13,986     $ 21,894  
  Adjustments to reconcile net income to net cash provided by operating activities:                        
    Depreciation     13,407       11,397       9,886  
    Amortization of bond premiums     155       156       379  
    Provision for losses on accounts receivable, net of adjustments     (83 )     (289 )     (117 )
    Provision for excess and obsolete inventories     63       (50 )     -  
    Share-based compensation     1,294       680       791  
    Excess tax benefits from stock options exercised and restricted stock awards vested     (393 )     (211 )     (356 )
    (Gain)loss on disposition of assets     4       1,802       (73 )
    Unrealized gain on financial derivative asset     -       -       (14 )
    Foreign currency transaction gain     (27 )     (8 )     -  
    Interest income on note receivable     (42 )     -       -  
    Deferred income taxes     (2,028 )     10,122       (558 )
    Changes in assets and liabilities:                        
      Accounts receivable     (9,646 )     6,053       (6,403 )
      Income tax receivable     9,715       (10,016 )     -  
      Inventories     2,271       (1,296 )     (4,814 )
      Prepaid expenses and other     (17 )     (67 )     431  
      Financial derivative asset     -       -       2,214  
      Accounts payable     2,461       (2,751 )     6,522  
      Accrued liabilities     6,584       (3,024 )     2,370  
  Net cash provided by operating activities     51,167       26,484       32,152  
                         
Investing Activities                        
  Proceeds from sale of property, plant and equipment     11       482       136  
  Investment in certificates of deposits     (6,540 )     -       (2,745 )
  Maturities of certificates of deposits     1,300       1,503       1,242  
  Purchases of investments held to maturity     (11,654 )     -       (12,018 )
  Maturities of investments     -       9,364       2,119  
  Proceeds from assets held for sale     -       -       460  
  Proceeds from called investment     626       -       -  
  Capital expenditures     (14,147 )     (35,914 )     (17,470 )
  Principal payments from note receivable     69       27       -  
  Net cash used in investing activities     (30,335 )     (24,538 )     (28,276 )
                         
Financing Activities                        
  Borrowings under revolving credit facility     34,847       82,078       20,839  
  Payments under revolving credit facility     (39,422 )     (77,503 )     (20,839 )
  Payments of long-term debt     -       -       (76 )
  Stock options exercised     1,996       494       1,168  
  Excess tax benefits from stock options exercised and restricted stock awards vested     393       211       356  
  Repurchase of stock     (6,660 )     (3,671 )     (19,480 )
  Cash dividends paid to stockholders     (8,840 )     (5,935 )     (9,168 )
  Net cash used in financing activities     (17,686 )     (4,326 )     (27,200 )
                         
Effects of exchange rate on cash     -       -       78  
Net increase (decrease) in cash and cash equivalents     3,146       (2,380 )     (23,246 )
Cash and cash equivalents, beginning of year     13       2,393       25,639  
Cash and cash equivalents, end of year   $ 3,159     $ 13     $ 2,393  
                         
                         
                         
Contact:
For Further Information:
Jerry R. Levine
Phone: (914) 244-0292
Fax: (914) 244-0295
Email: jrladvisor@yahoo.com

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