AAON Reports Record Sales and Earnings

Marketwired

TULSA, OK--(Marketwired - Aug 8, 2013) - AAON, Inc. (NASDAQ: AAON), today announced its operating results for the second quarter and six month period ended June 30, 2013.

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

Management believes that the Company's percent of net income per dollar of sales (13%) in the second quarter was the highest for any quarter by any other public company, ever, in the HVAC industry.

Revenues in the quarter were $91.2 million, up 9% from $83.3 million in 2012. Net income was $12.1 million, up 30% from $9.3 million in the same period a year ago. Net sales for the six month period ended June 30, 2013, were also a record for the first half of any year, $158.1 million, up 7% compared to $148.3 million in 2012. Earnings for the six months ended June 30, 2013 were $19.3 million, up 39% compared to $13.9 million in 2012.

Earnings per diluted share in the second quarter of 2013 were $0.33, up 32% from $0.25 for the same period a year ago, based upon 37.2 million and 37.1 million diluted shares outstanding for the three months ended June 30, 2013, compared to June 30, 2012, respectively. Earnings per diluted share were $0.52, up 41% from $0.37, in the six months ended June 30, 2013, and June 30, 2012, respectively, based upon 37.1 million diluted shares outstanding for both periods. All per share earnings reflect the 3-for-2 stock split effective July 2, 2013.

Norman H. Asbjornson, President and CEO, stated, "The second quarter increases in sales and income from operations primarily reflect price increases and a decline in cost of materials; gross profit as a percent of sales increased 5% (from 25.3% to 30.3%), but SG&A expenses as a percent of sales also increased 1.7% (from 8.3% to 10.0%), the majority of which (SG&A) represents increases in "profit sharing" and warranty expense.

Mr. Asbjornson continued, "The Company's backlog increased from $62.2 million at June 30, 2012, to $66.2 million at June 30, 2013, but declined from the record of $71.7 at March 31, 2013."

Mr. Asbjornson said, "While we still anticipate record sales and profits for 2013, there has been a noticeable softening in our market which has lowered our expectations for the balance of the year as compared to the first 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 1-866-544-4631; or, for rebroadcast, call 1-866-245-6755 (code 932908).

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
 June 30,
  Six Months Ended
 June 30,
    2013   2012   2013   2012
    (in thousands, except share and per share data)
Net sales   $ 91,241     $ 83,333     $ 158,074     $ 148,290  
Cost of sales     63,565       62,230       115,086       113,669  
Gross profit     27,676       21,103       42,988       34,621  
Selling, general and administrative expenses     9,089       6,899       16,056       12,880  
(Gain) loss on disposal of assets     (59 )     10       (52 )     (13 )
Income from operations     18,646       14,194       26,984       21,754  
Interest expense     -       (11 )     (1 )     (27 )
Interest income     57       2       92       15  
Other income(expense), net     253       (51 )     237       (3 )
Income before taxes     18,956       14,134       27,312       21,739  
Income tax provision     6,837       4,837       8,053       7,875  
Net income   $ 12,119     $ 9,297     $ 19,259     $ 13,864  
Earnings per share:                        
  Basic*   $ 0.33     $ 0.25     $ 0.52     $ 0.38  
  Diluted*   $ 0.33     $ 0.25     $ 0.52     $ 0.37  
Cash dividends declared per common share*:   $ 0.10     $ 0.08     $ 0.10     $ 0.08  
Weighted average shares outstanding:                        
  Basic*     36,759,718       36,828,650       36,760,173       36,854,913  
  Diluted*     37,150,262       37,091,528       37,056,201       37,124,982  
                                 
 *Reflects three-for-two stock split effective July 2, 2013
 
 
 
 
AAON, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
    June 30, 2013   December 31, 2012
Assets   (in thousands, except share and per share data)
Current assets:        
Cash and cash equivalents   $ 19,415   $ 3,159
Certificates of deposit     3,460     3,120
Investments held to maturity at amortized cost     7,353     2,832
Accounts receivable, net     50,108     43,866
Income tax receivable     410     694
Note receivable     29     28
Inventories, net     34,131     32,614
Prepaid expenses and other     900     740
  Deferred tax assets     5,605     4,493
Total current assets     121,411     91,546
Property, plant and equipment:            
  Land     1,340     1,340
  Buildings     60,126     59,761
  Machinery and equipment     118,253     117,617
  Furniture and fixtures     9,322     8,906
    Total property, plant and equipment     189,041     187,624
    Less: Accumulated depreciation     102,963     96,929
  Property, plant and equipment, net     86,078     90,695
Certificates of deposit     1,298     2,120
Investments held to maturity at amortized cost     11,475     8,041
Note receivable     952     1,091
Total assets   $ 221,214   $ 193,493
             
Liabilities and Stockholders' Equity            
Current liabilities:            
  Revolving credit facility   $ -   $ -
  Accounts payable     13,858     13,047
  Dividends payable     3,712     -
  Accrued liabilities     36,045     26,578
Total current liabilities     53,615     39,625
Deferred revenue     201     -
Deferred tax liabilities     14,878     15,732
Commitments and contingencies            
Stockholders' equity:            
Preferred stock, $.001 par value, 16,875,000 shares authorized, no shares issued*     -     -
Common stock, $.004 par value, 168,750,000 shares authorized, 36,754,988 and 36,776,624 issued and outstanding at June 30, 2013 and December 31, 2012, respectively*     147     147
Additional paid-in capital     -     -
Retained earnings     152,373     137,989
Total stockholders' equity     152,520     138,136
Total liabilities and stockholders' equity   $ 221,214   $ 193,493
             
 *Reflects three-for-two stock split effective July 2, 2013
 
 
 
 
AAON, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
    Six Months Ended
 June 30,
    2013   2012
Operating Activities   (in thousands)
  Net income   $ 19,259     $ 13,864  
  Adjustments to reconcile net income to net cash provided by operating activities:            
    Depreciation     6,268       6,747  
    Amortization of bond premiums     304       20  
    Provision for losses on accounts receivable, net of adjustments     102       (1 )
    Provision for excess and obsolete inventories     201       -  
    Share-based compensation     695       364  
    Excess tax benefits from stock options exercised and restricted stock awards vested     (385 )     (33 )
    Gain on disposition of assets     (52 )     (13 )
    Foreign currency transaction gain     43       7  
    Interest income on note receivable     (20 )     -  
    Deferred income taxes     (1,966 )     (875 )
    Write-off of note receivable     75       -  
    Changes in assets and liabilities:            
      Accounts receivable     (6,344 )     (17,949 )
      Income tax receivable     3,942       5,801  
      Inventories     (1,718 )     (4,194 )
      Prepaid expenses and other     (160 )     (91 )
      Accounts payable     1,101       4,215  
      Deferred revenue     201       -  
      Accrued liabilities     6,194       11,714  
  Net cash provided by operating activities     27,740       19,576  
Investing Activities            
  Capital expenditures     (1,949 )     (8,091 )
  Proceeds from sale of property, plant and equipment     60       306  
  Investment in certificates of deposits     (958 )     (4,274 )
  Maturities of certificates of deposits     1,440       -  
  Purchases of investments held to maturity     (9,969 )     (5,624 )
  Maturities of investments     1,710       -  
  Proceeds from called investment     -       270  
  Principal payments from note receivable     40       15  
  Net cash used in investing activities     (9,626 )     (17,398 )
Financing Activities            
  Borrowings under revolving credit facility     2,321       27,108  
  Payments under revolving credit facility     (2,321 )     (24,424 )
  Stock options exercised     767       69  
  Excess tax benefits from stock options exercised and restricted stock awards vested     385       33  
  Repurchase of stock     (3,010 )     (1,895 )
  Net cash (used in) provided by financing activities     (1,858 )     891  
Net increase in cash and cash equivalents     16,256       3,069  
Cash and cash equivalents, beginning of period     3,159       13  
Cash and cash equivalents, end of period   $ 19,415     $ 3,082  
                 
                 
Contact:
For Further Information:
Jerry R. Levine
Phone: (914) 244-0292
Fax: (914) 244-0295
Email: jrladvisor@yahoo.com

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