AAON Reports Record Sales and Earnings
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, | December 31, | |||||||
(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 | |||||||
