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AAON Reports Record Sales and Earnings For the First Quarter of 2020

TULSA, Okla., May 07, 2020 (GLOBE NEWSWIRE) -- AAON, INC. (NASDAQ-AAON), today announced its results for the first quarter of 2020.

Financial Highlights:

Three Months Ended March 31,

%

2020

2019

Change

(in thousands, except share and per share data)

Net sales

$

137,483

$

113,822

20.8

%

Gross profit

42,947

25,430

68.9

%

Gross profit %

31.2

%

22.3

%

Selling, general and administrative expenses

$

15,214

$

13,677

11.2

%

Net income

21,853

8,757

149.5

%

Net income %

15.9

%

7.7

%

Earnings per diluted share

$

0.41

$

0.17

141.2

%

Diluted average shares

52,871,419

52,369,660

1.0

%

March 31,

December 31,

%

2020

2019

Change

(in thousands)

Backlog

$

119,642

$

142,747

(16.2

)%

Cash & cash equivalents & Restricted cash

52,145

44,373

17.5

%

Gary Fields, President, said "We have been extremely fortunate during these trying times. As discussed in the fourth quarter, we were able to increase our manufacturing capacity with the addition of several Salvagnini sheet metal fabrication machines which put us in a beneficial position heading into the first quarter. As a result, we have been able to reduce lead times and our Tulsa plant has nearly 100% on time deliveries as of the end of the quarter. All these factors gave us the ability to swiftly respond to the needs of the public as an essential business. Our team worked around-the-clock to produce and deliver multiple orders for temporary hospitals in the New York area."

Mr. Fields continued, "The increased sales volume has helped absorb our fixed overhead costs and improve our gross profit. Our selling, general and administrative expenses have increased due to the profit sharing and other incentives we pay our employees as a result of our record earnings. To date, we have seen minimal business disruption from COVID-19. While the future may hold some amount of uncertainty, we continue to work hard to keep our work environment safe so we can meet the needs of our customers and protect the health and well-being of our employees."

The decreased backlog as of March 31, 2020 compared to year-end 2019 resulted from both accelerated shipments during the first quarter and a planned reduction in the backlog to facilitate more acceptable lead-times on deliveries. While business continues to remain firm, evidenced by our 92% of expected order intake in the first quarter of 2020, we are closely monitoring and adapting to COVID-19 related variables.

Norman H. Asbjornson, CEO, added "Our financial condition remains strong as evidenced by our current ratio of 3.1:1 at March 31, 2020. Furthermore, we have unrestricted cash and cash equivalents of $35.7 million as of March 31, 2020, to ensure that our future investment in the Company remains fiscally sound."

The Company will host a conference call today at 4:15 P.M. (Eastern Time) to discuss the first quarter 2020 results. To participate, call 1-888-241-0551 (code 5395749); or, for rebroadcast available through May 13, 2020, call 1-855-859-2056 (code 5395749).

About AAON
AAON, Inc. is engaged in the engineering, manufacturing, marketing and sale of air conditioning and heating equipment consisting of standard, semi-custom and custom rooftop units, chillers, packaged outdoor mechanical rooms, air handling units, makeup air units, energy recovery units, condensing units, geothermal/water-source heat pumps, coils and controls. Since the founding of AAON in 1988, AAON has maintained a commitment to design, develop, manufacture and deliver heating and cooling products to perform beyond all expectations and demonstrate the value of AAON to our customers. For more information, please visit www.AAON.com.

Forward-Looking Statements
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, including risks related to the impact of the error correction, that could cause actual results and developments to differ materially from the forward-looking statements.

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

AAON, Inc. and Subsidiaries

Consolidated Statements of Income

(Unaudited)

Three Months Ended
March 31,

2020

2019

(in thousands, except share and per share data)

Net sales

$

137,483

$

113,822

Cost of sales

94,536

88,392

Gross profit

42,947

25,430

Selling, general and administrative expenses

15,214

13,677

(Gain) loss on disposal of assets

(62

)

284

Income from operations

27,795

11,469

Interest income, net

61

9

Other (expense) income, net

(27

)

(26

)

Income before taxes

27,829

11,452

Income tax provision

5,976

2,695

Net income

$

21,853

$

8,757

Earnings per share:

Basic

$

0.42

$

0.17

Diluted

$

0.41

$

0.17

Weighted average shares outstanding:

Basic

52,071,839

51,992,150

Diluted

52,871,419

52,369,660


AAON, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

March 31, 2020

December 31, 2019

Assets

(in thousands, except share and per share data)

Current assets:

Cash and cash equivalents

$

35,677

$

26,797

Restricted cash

16,468

17,576

Accounts receivable, net

69,894

67,399

Income tax receivable

772

Note receivable

27

29

Inventories, net

72,855

73,601

Prepaid expenses and other

2,045

1,375

Total current assets

196,966

187,549

Property, plant and equipment:

Land

3,298

3,274

Buildings

104,707

101,113

Machinery and equipment

252,544

236,087

Furniture and fixtures

17,116

16,862

Total property, plant and equipment

377,665

357,336

Less: Accumulated depreciation

184,636

179,242

Property, plant and equipment, net

193,029

178,094

Intangible assets, net

213

272

Goodwill

3,229

3,229

Right of use assets

1,641

1,683

Note receivable

542

597

Total assets

$

395,620

$

371,424

Liabilities and Stockholders' Equity

Current liabilities:

Revolving credit facility

$

$

Accounts payable

13,501

11,759

Accrued liabilities

50,684

44,269

Total current liabilities

64,185

56,028

Deferred tax liabilities

15,130

15,297

Other long-term liabilities

3,652

3,639

New market tax credit obligation

6,330

6,320

Commitments and contingencies

Stockholders' equity:

Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued

Common stock, $.004 par value, 100,000,000 shares authorized, 52,044,110 and 52,078,515 issued and outstanding at March 31, 2020 and December 31, 2019, respectively

208

208

Additional paid-in capital

3,631

Retained earnings

306,115

286,301

Total stockholders' equity

306,323

290,140

Total liabilities and stockholders' equity

$

395,620

$

371,424


AAON, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

Three Months Ended
March 31,

2020

2019

Operating Activities

(in thousands)

Net income

$

21,853

$

8,757

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

6,002

5,914

Amortization of debt issuance cost

10

Provision for losses on accounts receivable, net of adjustments

294

115

Provision for excess and obsolete inventories

(274

)

357

Share-based compensation

2,351

5,407

(Gain) loss on disposition of assets

(62

)

284

Foreign currency transaction loss (gain)

51

(16

)

Interest income on note receivable

(6

)

(6

)

Deferred income taxes

(167

)

909

Changes in assets and liabilities:

Accounts receivable

(2,789

)

(4,725

)

Income taxes

772

1,432

Inventories

1,020

2,678

Prepaid expenses and other

(670

)

(561

)

Accounts payable

2,742

(5,730

)

Deferred revenue

229

25

Accrued liabilities

6,241

73

Net cash provided by operating activities

37,597

14,913

Investing Activities

Capital expenditures

(21,877

)

(8,772

)

Proceeds from sale of property, plant and equipment

61

52

Principal payments from note receivable

12

17

Net cash used in investing activities

(21,804

)

(8,703

)

Financing Activities

Stock options exercised

4,497

4,010

Repurchase of stock

(11,565

)

(4,483

)

Employee taxes paid by withholding shares

(953

)

(588

)

Net cash used in financing activities

(8,021

)

(1,061

)

Net increase in cash, cash equivalents and restricted cash

7,772

5,149

Cash, cash equivalents and restricted cash, beginning of period

44,373

1,994

Cash, cash equivalents and restricted cash, end of period

$

52,145

$

7,143