AAON Reports Record Sales and Earnings

Marketwired

TULSA, OK--(Marketwired - May 9, 2013) - AAON, INC. (NASDAQ: AAON), today announced its operating results for the three months ended March 31, 2013, of $66.8 million in sales (up 3%), and $7.1 million of net income (up 56%), $0.29 per share, compared to $65.0 million in sales and $4.6 million in net income, $0.18 per share, a year ago. Per share earnings are on a diluted basis.

Both sales and earnings were records for the first quarter. However, net income for the first quarter of 2013 benefited by a $1.6 million reduction of the income tax provision, or $0.07 per share, largely due to an Oklahoma investment credit and change in Federal tax laws. The Company anticipates an effective tax rate of 34.5% for the balance of this year (vs. 14.6% in the first quarter of 2013 and 39.9% in 2012).

Norman H. Asbjornson, President and CEO, stated, "The first quarter increases in sales and income from operations primarily reflect price increases, although gross profit increased 2.1% (from 20.8% to 22.9%), while SG&A expenses also increased 1.2% (from 9.2% to 10.4%), a majority of which (SG&A) represents increased advertising expense and cash bonuses to employees which are not expected to occur during the rest of 2013."

Mr. Asbjornson pointed out that the Company's backlog increased from $58.9 million at March 31, 2012, to a record of $71.7 million at March 31, 2013, or by 22%.

Mr. Asbjornson said, "Based on the first quarter results and backlog, we expect 2013 to produce both higher sales and earnings than 2012."

The Company will host a conference call today at 4:15 P.M. EDT to discuss the first quarter results. To participate, call 1-877-737-1669 (Code:VA23770).

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)  
   
    Three Months Ended  
    March 31, 2013     March 31, 2012  
    (in thousands except per share amounts)  
         
Net sales   $ 66,833     $ 64,957  
Cost of sales     51,521       51,439  
Gross profit     15,312       13,518  
                 
Selling, general and administrative expenses     6,967       5,981  
Loss (gain) on disposal of assets     7       (23 )
Income from operations     8,338       7,560  
                 
Interest expense     (1 )     (16 )
Interest income     35       13  
Other income (expense), net     (16 )     48  
Income before income taxes     8,356       7,605  
Income tax provision     1,216       3,038  
                 
Net income   $ 7,140     $ 4,567  
                 
Earnings per share:                
  Basic   $ 0.29     $ 0.19  
  Diluted   $ 0.29     $ 0.18  
                 
Cash dividends declared per common share   $ 0.00     $ 0.00  
                 
Weighted average shares outstanding:                
  Basic     24,507       24,587  
  Diluted     24,641       24,772  
                 
                 
                 
AAON, Inc., and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
 
    March 31,
2013
  December 31,
2012
    (in thousands, except share and per share data)
Assets            
Current assets:            
  Cash and cash equivalents   $ 9,717   $ 3,159
  Certificates of deposit     2,400     3,120
  Investments held to maturity at amortized cost     4,736     2,832
  Accounts receivable, net     38,551     43,866
  Income tax receivable     975     694
  Note receivable     28     28
  Inventories, net     33,986     32,614
  Prepaid expenses and other     839     740
  Deferred tax assets     4,795     4,493
Total current assets     96,027     91,546
Property, plant and equipment:            
  Land     1,340     1,340
  Buildings     59,878     59,761
  Machinery and equipment     118,005     117,617
  Furniture and fixtures     9,100     8,906
    Total property, plant and equipment     188,323     187,624
    Less: Accumulated depreciation     100,093     96,929
  Property, plant and equipment, net     88,230     90,695
Certificates of deposit     2,358     2,120
Investments held to maturity at amortized cost     6,796     8,041
Notes receivable     1,062     1,091
Total assets   $ 194,473   $ 193,493
Liabilities and Stockholders' Equity            
Current liabilities:            
  Revolving credit facility     -     -
  Accounts payable     10,945     13,047
  Accrued liabilities     23,683     26,578
Total current liabilities     34,628     39,625
Deferred tax liabilities     14,829     15,732
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, 24,510,111 and 24,517,749 issued and outstanding at March 31, 2013 and December 31, 2012, respectively     98     98
  Retained earnings     144,918     138,038
Total stockholders' equity     145,016     138,136
Total liabilities and stockholders' equity   $ 194,473   $ 193,493
             
             
             
AAON, Inc., and Subsidiaries  
Consolidated Statements of Cash Flows  
(Unaudited)  
   
    Three Months Ended  
    March 31, 2013     March 31, 2012  
    (in thousands)  
Operating Activities                
  Net income   $ 7,140     $ 4,567  
  Adjustments to reconcile net income to net cash                
  provided by operating activities:                
    Depreciation     3,191       3,394  
    Amortization of bond premiums     127       -  
    Provision for losses on accounts receivable, net of adjustments     269       4  
    Provision for excess and obsolete inventories     169       -  
    Share-based compensation     392       169  
    Excess tax benefits from stock options exercised                
    and restricted stock awards vested     (109 )     (13 )
    (Gain) Loss on disposition of assets     7       (23 )
    Foreign currency (gain)loss     19       (23 )
    Interest income on note receivable     (10 )     -  
    Deferred income taxes     (1,205 )     170  
    Changes in assets and liabilities:                
      Accounts receivable     5,046       (390 )
      Income tax receivable     (172 )     (237 )
      Inventories     (1,541 )     (1,807 )
      Prepaid expenses and other     (99 )     (82 )
      Accounts payable     (1,838 )     712  
      Accrued liabilities     (2,895 )     5,130  
  Net cash provided by operating activities     8,491       11,571  
                 
Investing Activities                
  Proceeds from sale of property, plant and equipment     -       300  
  Investment in certificates of deposit     (238 )     -  
  Maturities of certificates of deposit     720       -  
  Purchases of investments held to maturity     (1,396 )     -  
  Maturities of investments     610       -  
  Principal payments from note receivable     20       7  
  Capital expenditures     (997 )     (2,959 )
  Net cash used in investing activities     (1,281 )     (2,652 )
                 
Financing Activities                
  Borrowings under revolving credit facility     1,955       13,111  
  Payments under revolving credit facility     (1,955 )     (17,686 )
  Stock options exercised     354       55  
  Excess tax benefits from stock options exercised and restricted stock awards vested     109       13  
  Repurchases of stock     (1,115 )     (1,180 )
  Net cash used in financing activities     (652 )     (5,687 )
Net increase in cash and cash equivalents     6,558       3,232  
Cash and cash equivalents, beginning of period     3,159       13  
Cash and cash equivalents, end of period   $ 9,717     $ 3,245  
                 
                 
                 
Contact:
For Further Information:
Jerry R. Levine
Ph: (914) 244-0292
Fax: (914) 244-0295
jrladvisor@yahoo.com
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