AAON Reports Higher Sales and Earnings and Declares Dividends

Marketwired

TULSA, OK--(Marketwire - Nov 8, 2012) - AAON, Inc. (NASDAQ: AAON) today announced its operating results for the third quarter and nine-month period ended September 30, 2012, and declares dividends.

In the quarter, net sales increased 4% to $76.8 million from $73.8 million in 2011, and net income increased 7% to $6.0 million from $5.6 million last year. Earnings per diluted share were $0.24, up 4% from $0.23 for the same period a year ago, based upon 24.7 million and 24.8 million diluted shares outstanding for the three months ended September 30, 2012, compared to September 30, 2011, respectively. Of note, the Company's combined income tax rate in the third quarter of 2012 totaled 43% compared to a rate of 35% in 2011. Income taxes for the full year 2012 are expected to be approximately 37%.

Net sales for the first nine months of 2012 increased 11% to a record $225.1 million from $202.8 million in 2011, and net income increased 52% to $19.9 million from $13.1 million. Earnings per diluted share were $0.80, up 51% from $0.53, based upon 24.7 million and 24.9 million diluted shares outstanding for the nine months ended September 30, 2012 compared to September 30, 2011, respectively.

The Company realized a 241% increase in cash flow from operations during the first nine months of 2012, which enabled it to pay off its revolving credit loan of $4.6 million and to accumulate cash and investments totaling $15.5 million.

Norman H. Asbjornson, President and CEO, stated, "The increases in revenues primarily reflect gains in market share, while the increases in earnings for the third quarter and first nine months of 2012 were attributable to improved productivity, which resulted in increased gross margins from 19.3% to 22.3% in the third quarters of 2011 and 2012, respectively, and from 18.6% to 23.0% for the nine-month periods ended September 30, 2011 and 2012. Our backlog at September 30, 2012 was $55.3 million compared to $54.1 million at the same time a year ago."

At a meeting of the Board of Directors on November 7, 2012, the Board declared a regular semi-annual cash dividend of $0.12 per share. Mr. Asbjornson said, "In view of our strong financial position, the Board also declared a one-time special cash dividend of $0.12 per share." Both dividends will be paid to the holders of the outstanding Common Stock of the Company as of the close of business on December 3, 2012, the record date, payable December 24, 2012.

Mr. Asbjornson said that, "We are very pleased with the results of the first nine months of 2012, particularly in light of the difficult existing market conditions, and anticipate an above average fourth quarter."

The Company will host a conference call today at 4:15 P.M. ET to discuss the third quarter results.
To participate, call 1-877-737-1669 (Code:VA32741).

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  
Consolidated Statements of Income  
(Unaudited) (In thousands, except per share data)  
   
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2012     2011     2012     2011  
       
Net sales   $ 76,816     $ 73,829     $ 225,106     $ 202,818  
Cost of sales     59,667       59,570       173,336       165,184  
Gross profit     17,149       14,259       51,770       37,634  
Selling, general and administrative expenses     6,747       5,451       19,627       16,699  
Gain on disposal of assets     4       6       17       14  
Income from operations     10,406       8,814       32,160       20,949  
Interest expense     (16 )     (59 )     (43 )     (173 )
Interest income     40       22       55       87  
Other income (expense), net     53       (122 )     50       (690 )
Income before income taxes     10,483       8,655       32,222       20,173  
Income tax provision     4,476       3,029       12,351       7,058  
Net income   $ 6,007     $ 5,626     $ 19,871     $ 13,115  
Earnings per share                                
  Basic   $ 0.24     $ 0.23     $ 0.81     $ 0.53  
  Diluted   $ 0.24     $ 0.23     $ 0.80     $ 0.53  
Cash dividends declared per common share:   $ 0.00     $ 0.00     $ 0.12     $ 0.12  
Weighted average shares outstanding:                                
  Basic     24,535       24,667       24,558       24,708  
  Diluted     24,667       24,844       24,722       24,902  
                                 
                                 
 
AAON, Inc., and Subsidiaries
Consolidated Balance Sheets
(Unaudited) (In thousands, except share and per share data)
 
    September 30, 2012   December 31,
2011
Assets            
Current assets:            
  Cash and cash equivalents   $ 7,017   $ 13
  Certificates of deposit     1,200     -
  Investments held to maturity at amortized cost     2,077     -
  Accounts receivable, net     42,371     34,137
  Income tax receivable     2,313     10,016
  Note receivable     28     27
  Inventories, net     37,650     34,948
  Prepaid expenses and other     575     723
  Deferred tax assets     4,063     4,523
Total current assets     97,294     84,387
Property, plant and equipment:            
  Land     1,340     1,340
  Buildings     59,615     56,057
  Machinery and equipment     117,648     114,256
  Furniture and fixtures     8,415     7,784
  Total property, plant and equipment     187,018     179,437
  Less: Accumulated depreciation     94,384     85,935
  Property, plant and equipment, net     92,634     93,502
  Certificates of deposit     2,020     -
  Investments held to maturity at amortized cost     3,195     -
Note receivable, long-term     1,111     1,092
Total assets   $ 196,254   $ 178,981
Liabilities and Stockholders' Equity            
Current liabilities:            
  Revolving credit facility     -     4,575
  Accounts payable     13,720     14,118
  Accrued liabilities     29,200     19,994
Total current liabilities     42,920     38,687
Deferred tax liabilities     16,343     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, 24,537,657 and 24,618,324 issued and outstanding at September 30, 2012 and December 31, 2011, respectively     98     98
Additional paid-in capital     249     -
Retained earnings     136,644     122,406
Total stockholders' equity     136,991     122,504
Total liabilities and stockholders' equity   $ 196,254   $ 178,981
             
             
   
AAON, Inc., and Subsidiaries  
Consolidated Statements of Cash Flows  
(Unaudited) (In thousands)  
   
    Nine Months Ended  
    September 30,  
    2012     2011  
Operating Activities                
  Net income   $ 19,871     $ 13,115  
                 
    Adjustments to reconcile net income to net cash provided by operating activities:                
      Depreciation     10,079       8,174  
      Amortization of bond premiums     80       155  
      Provision for losses on accounts receivable, net of adjustments     (7 )     (242 )
      Share-based compensation     625       509  
      Excess tax benefits from stock options exercised and restricted stock awards vested     (267 )     (176 )
      Gain on disposition of assets     (17 )     (14 )
      Foreign currency transaction gain     (40 )     -  
      Deferred income taxes     (987 )     (48 )
      Changes in assets and liabilities:                
        Accounts receivable     (8,227 )     61  
        Income tax receivable     5,801       -  
        Inventories     (2,702 )     (8,654 )
        Prepaid expenses and other     148       (194 )
        Accounts payable     2,681       (2,281 )
        Accrued liabilities     11,375       870  
    Net cash provided by operating activities     38,413       11,275  
                 
Investing Activities                
    Proceeds from sale of property, plant and equipment     311       55  
    Investment in certificates of deposits     (4,280 )     -  
    Maturities of certificates of deposits     1,060       1,503  
    Purchases of investments held to maturity     (5,624 )     -  
    Maturities of investments     -       8,793  
    Proceeds from called investment     270       -  
    Capital expenditures     (12,582 )     (30,638 )
    Principal payments from note receivable     20       21  
    Net cash used in investing activities     (20,825 )     (20,266 )
                 
Financing Activities                
    Borrowings under revolving credit facility     34,847       66,557  
    Payments under revolving credit facility     (39,422 )     (52,592 )
    Stock options exercised     1,053       373  
    Excess tax benefits from stock options exercised and restricted stock awards vested     267       176  
    Repurchases of stock     (4,379 )     (2,662 )
    Cash dividends paid to stockholders     (2,950 )     (2,976 )
    Net cash (used) provided by financing activities     (10,584 )     8,876  
Net increase (decrease) in cash and cash equivalents     7,004       (115 )
Cash and cash equivalents, beginning of year     13       2,393  
Cash and cash equivalents, end of period   $ 7,017     $ 2,278  
                 
                 
Contact:
For Further Information:
Jerry R. Levine
Phone: (914) 244-0292
Fax: (914) 244-0295
Email: jrladvisor@yahoo.com

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