AAON Reports Record Sales and Earnings

Marketwired

TULSA, OK--(Marketwire -08/08/12)- AAON, Inc. (AAON), today announced its operating results for the second quarter and six-month period ended June 30, 2012.

Sales and earnings during the second quarter were record highs for any quarter in the Company's 24-year history.

Revenues in the quarter were $83.3 million, up 21% from $69.1 million in 2011. Net income was $9.3 million, up 142% from $3.8 million in the same period a year ago. Net sales for the first six months of 2012 were also a record for any six-month period, $148.3 million, up 15% compared to $129.0 million in 2011. Earnings for the six months ended June 30, 2012, were $13.9 million, up 85% compared to $7.5 million in 2011.

Earnings per diluted share in the second quarter of 2012 were $0.38, up 153% from $0.15 for the same period a year ago, based upon 24.7 million and 24.9 million diluted shares outstanding for the three months ended June 30, 2012, compared to June 30, 2011, respectively. Earnings per diluted share were $0.56, up 87% from $0.30, based upon 24.8 million and 24.9 million diluted shares outstanding for the six months ended June 30, 2012, compared to June 30, 2011, respectively.

Norman H. Asbjornson, President and CEO, stated, "The increases in revenues primarily reflect gains in market share, while the much greater increases in earnings for the second quarter and first half of 2012, were attributable to significantly improved productivity due to our new sheet metal fabrication equipment and revamped production lines, which resulted in improvements of gross margins from 17.0% to 25.3% in the second quarters of 2011 and 2012, respectively, and 18.1% to 23.3% for the six-month periods ended June 30, 2011 and 2012. Our backlog at June 30, 2012, was $62.2 million compared to $59.7 million at the same time a year ago."

Mr. Asbjornson said that, "We are pleased with the results of the first half of 2012, which were aided by extremely strong order input. However, there are a number of uncertainties, particularly as to the level of future order input, which make it difficult to forecast the business climate AAON will encounter during the second half of the year."

The Company will host a conference call today at 4:15 P.M. EDT to discuss the second quarter results. To participate, call 1-877-737-1669 (Code:VA34474).

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 Six Month Ended
June 30, June 30,
-------------------- --------------------
2012 2011 2012 2011
--------- --------- --------- ---------

Net sales $ 83,333 $ 69,076 $ 148,290 $ 128,989
Cost of sales 62,230 57,339 113,669 105,614
--------- --------- --------- ---------
Gross profit 21,103 11,737 34,621 23,375
Selling, general and
administrative expenses 6,899 5,711 12,880 11,248
(Gain) loss on disposal of
assets 10 (14) (13) (8)
--------- --------- --------- ---------
Income from operations 14,194 6,040 21,754 12,135
Interest expense (11) (104) (27) (114)
Interest income 2 31 15 65
Other income (expense), net (51) (65) (3) (568)
--------- --------- --------- ---------
Income before income taxes 14,134 5,902 21,739 11,518
Income tax provision 4,837 2,063 7,875 4,029
--------- --------- --------- ---------
Net income $ 9,297 $ 3,839 $ 13,864 $ 7,489
========= ========= ========= =========
Earnings per share
Basic $ 0.38 $ 0.16 $ 0.56 $ 0.30
========= ========= ========= =========
Diluted $ 0.38 $ 0.15 $ 0.56 $ 0.30
========= ========= ========= =========
Cash dividends declared per
common share: $ 0.12 $ 0.12 $ 0.12 $ 0.12
========= ========= ========= =========
Weighted average shares
outstanding:
Basic 24,552 24,715 24,570 24,730
========= ========= ========= =========
Diluted 24,728 24,923 24,750 24,931
========= ========= ========= =========



AAON, Inc., and Subsidiaries
Consolidated Balance Sheets
(Unaudited) (In thousands, except share and per share data)

June 30, December 31,
2012 2011
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 3,082 $ 13
Certificates of deposit 2,259 -
Investments held to maturity at amortized cost 1,254 -
Accounts receivable, net 52,087 34,137
Income tax receivable 197 10,016
Note receivable 27 27
Inventories, net 39,142 34,948
Prepaid expenses and other 814 723
Deferred tax assets 4,330 4,523
------------ ------------
Total current assets 103,192 84,387
Property, plant and equipment:
Land 1,340 1,340
Buildings 58,757 56,057
Machinery and equipment 116,255 114,256
Furniture and fixtures 8,318 7,784
------------ ------------
Total property, plant and equipment 184,670 179,437
Less: Accumulated depreciation 91,472 85,935
------------ ------------
Property, plant and equipment, net 93,198 93,502
Certificates of deposit 2,015 -
Investments held to maturity at amortized cost 4,079 -
Note receivable, long-term 1,070 1,092
------------ ------------
Total assets $ 203,554 $ 178,981
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Revolving credit facility 7,259 4,575
Accounts payable 16,978 14,118
Dividends payable 2,950 -
Accrued liabilities 27,656 19,994
------------ ------------
Total current liabilities 54,843 38,687
Deferred tax liabilities 16,722 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, 24,543,861 and 24,618,324 issued and
outstanding at June 30, 2012 and December 31,
2011, respectively 98 98
Retained earnings 131,891 122,406
------------ ------------
Total stockholders' equity 131,989 122,504
------------ ------------
Total liabilities and stockholders' equity $ 203,554 $ 178,981
============ ============



AAON, Inc., and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited) (In thousands)

Six Months Ended
June 30,
------------------------
2012 2011
----------- -----------
Operating Activities
Net income $ 13,864 $ 7,489

Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 6,747 5,449
Amortization of bond premiums 20 137
Provision for losses on accounts receivable,
net of adjustments (1) (106)
Share-based compensation 364 346
Excess tax benefits from stock options
exercised and restricted stock awards
vested (33) (77)
Gain on disposition of assets (13) (8)
Foreign currency transaction (gain)losses 7 (59)
Deferred income taxes (875) 314
Changes in assets and liabilities:
Accounts receivable (17,949) (2,687)
Income tax receivable 5,801 -
Inventories (4,194) (11,709)
Prepaid expenses and other (91) 234
Accounts payable 4,215 10,957
Accrued liabilities 11,714 (105)
----------- -----------
Net cash provided by operating activities 19,576 10,175
----------- -----------

Investing Activities
Proceeds from sale of property, plant and
equipment 306 49
Investment in certificates of deposits (4,274) -
Maturities of certificates of deposits - 1,263
Purchases of investments held to maturity (5,624) -
Maturities of investments - 7,055
Proceeds from called investment 270 -
Capital expenditures (8,091) (24,907)
Principal payments from note receivable 15 14
----------- -----------
Net cash used in investing activities (17,398) (16,526)
----------- -----------

Financing Activities
Borrowings under revolving credit facility 27,108 36,231
Payments under revolving credit facility (24,424) (28,603)
Stock options exercised 69 132
Excess tax benefits from stock options exercised
and restricted stock awards vested 33 77
Repurchases of stock (1,895) (1,779)
Cash dividends paid to stockholders - (9)
----------- -----------
Net cash provided by financing activities 891 6,049
----------- -----------
Net increase (decrease) in cash and cash
equivalents 3,069 (302)
----------- -----------
Cash and cash equivalents, beginning of year 13 2,393
----------- -----------
Cash and cash equivalents, end of period $ 3,082 $ 2,091
=========== ===========

Contact:
For Further Information:
Jerry R. Levine
Phone: (914) 244-0292
Fax: (914) 244-0295
Email: jrladvisor@yahoo.com

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