U.S. Markets closed
  • S&P 500

    4,538.43
    -38.67 (-0.84%)
     
  • Dow 30

    34,580.08
    -59.71 (-0.17%)
     
  • Nasdaq

    15,085.47
    -295.85 (-1.92%)
     
  • Russell 2000

    2,159.31
    -47.02 (-2.13%)
     
  • Crude Oil

    66.22
    -0.28 (-0.42%)
     
  • Gold

    1,782.10
    +21.40 (+1.22%)
     
  • Silver

    22.45
    +0.17 (+0.76%)
     
  • EUR/USD

    1.1317
    +0.0012 (+0.1019%)
     
  • 10-Yr Bond

    1.3430
    -0.1050 (-7.25%)
     
  • Vix

    30.67
    +2.72 (+9.73%)
     
  • GBP/USD

    1.3235
    -0.0067 (-0.5029%)
     
  • USD/JPY

    112.8000
    -0.4090 (-0.3613%)
     
  • BTC-USD

    47,434.05
    -9,197.62 (-16.24%)
     
  • CMC Crypto 200

    1,367.14
    -74.62 (-5.18%)
     
  • FTSE 100

    7,122.32
    -6.89 (-0.10%)
     
  • Nikkei 225

    28,029.57
    +276.20 (+1.00%)
     

AAON Reports Record Sales and Earnings For 2020

  • Oops!
    Something went wrong.
    Please try again later.
·10 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

TULSA, Okla., Feb. 25, 2021 (GLOBE NEWSWIRE) -- AAON, INC. (NASDAQ-AAON), today announced its results for the fourth quarter of 2020.

Financial Highlights:

Three Months Ended
December 31,

%

Years Ending
December 31,

%

2020

2019

Change

2020

2019

Change

(in thousands, except share and per share data)

(in thousands, except share and per share data)

Net sales

$

116,700

$

122,574

(4.8

)%

$

514,551

$

469,333

9.6

%

Gross profit

33,923

36,381

(6.8

)%

155,849

119,425

30.5

%

Gross profit %

29.1

%

29.7

%

30.3

%

25.4

%

Selling, general and admin. expenses

$

14,622

$

13,114

11.5

%

$

60,491

$

52,077

16.2

%

SG&A %

12.5

%

10.7

%

11.8

%

11.1

%

Net income*

18,892

17,273

9.4

%

79,009

53,711

47.1

%

Net income %

16.2

%

14.1

%

15.4

%

11.4

%

Effective Tax Rate

26.6

%

25.6

%

22.5

%

19.9

%

Earnings per diluted share*

$

0.35

$

0.33

6.1

%

$

1.49

$

1.02

46.1

%

Diluted average shares

53,469,759

52,701,202

1.5

%

53,061,169

52,635,415

0.8

%

*Includes $4.1 million or $0.08 per share related to a gain from insurance proceeds

December 31,

December 31,

%

2020

2019

Change

(in thousands)

Backlog

$

74,417

$

142,747

(47.9

)%

Cash & cash equivalents & restricted cash

82,288

44,373

85.4

%

Total current liabilities

59,033

56,028

5.4

%

Net sales for the fourth quarter 2020 decreased to $116.7 million from $122.6 million in 2019 primarily as a result of this year's six additional days of planned plant holiday closure at the end of December 2020. The Company reported diluted EPS of $0.35, up 6.1% from $0.33 in the prior year period. The Company had a gain of $4.1 million, net of profit sharing and taxes, associated with insurance proceeds related to a damaged roof incurred by adverse weather earlier in the year, which impacted our diluted EPS by $0.08.

The Company finished the quarter with a backlog of $74.4 million. The decline in backlog was related to initiatives made to improve productivity and lead times to meet customer delivery expectations. New bookings in the quarter increased 6% compared to the same period one year ago. As of February 1, 2021, our backlog was approximately $103.8 million, compared to $129.2 million at February 1, 2020.

For the twelve months ending December 31, 2020, sales were a record $514.6 million, an increase of 9.6% compared with $469.3 million in 2019. Diluted earnings per share increased 46.1% to $1.49.

Gary Fields, President and CEO, said, "We are pleased to report all-time record sales and earnings in 2020 compared to any other year in our Company's history. I am especially proud we achieved these results in a year that presented many challenges to the Company and our end-markets. Achieving organic sales growth of nearly 10% while simultaneously improving our gross margins by 490 basis points to 30.3% is truly an achievement. At the same time, we continued to invest in growth as our capex spend for the year was up 82.4%, amounting to 13.2% of sales."

Mr. Fields continued, "Our fourth quarter results demonstrate demand slowed as we finished the year. The outlook for 2021 continues to present uncertainty, especially for the first half of the year. Architectural billings and nonresidential construction starts in 2020 suggest new construction demand will be soft, particularly in end-markets significantly impacted by the COVID-19 pandemic such as the hospitality and office building markets."

Mr. Fields added, "However, new bookings in the fourth quarter still grew year-over-year 6% and demand so far in 2021 has been surprisingly solid. Furthermore, we are starting to see positive signs in our replacement business and certain end-markets like data centers, warehouses and healthcare. We are also well positioned to take advantage of our customers' increased focus on indoor air quality to address COVID challenges, which we expect will drive incremental demand. Finally, ongoing progress in our transition from entrepreneurial leadership to a collaborative team-based management approach, a strengthening sales channel, improved productivity and lead times, new capacity at our Longview, Texas facility and a strong product development pipeline keeps us optimistic on the outlook of our business. While we believe demand will be soft to start the year, we think activity should be moderate in the first half and then accelerate in the second half."

The Company finished 2020 in a strong financial position as evidenced by a current ratio of 3.7:1 at December 31, 2020. We had no debt and unrestricted cash and cash equivalents of $79.0 million as of December 31, 2020. Our capital expenditures during the twelve months ended December 31, 2020 were $67.8 million, as compared to $37.2 million for the same period a year ago, and we anticipate our full-year 2021 capital expenditures will total approximately $70.7 million.

The Company will host a conference call today at 4:15 P.M. (Eastern Time) to discuss the fourth quarter 2020 results. To participate, call 1-833-674-0554 (code 3448509); or, for rebroadcast available through March 5, 2021, call 1-855-859-2056 (code 3448509).

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
Joseph Mondillo
Director of Investor Relations
Phone: (617) 877-6346
Email: joseph.mondillo@aaon.com

AAON, Inc. and Subsidiaries

Consolidated Statements of Income

(Unaudited)

Three Months Ended
December 31,

Years Ending
December 31,

2020

2019

2020

2019

(in thousands, except share and per share data)

Net sales

$

116,700

$

122,574

$

514,551

$

469,333

Cost of sales

82,777

86,193

358,702

349,908

Gross profit

33,923

36,381

155,849

119,425

Selling, general and administrative expenses

14,622

13,114

60,491

52,077

(Gain) loss on disposal of assets and insurance recoveries

(6,417

)

41

(6,478

)

337

Income from operations

25,718

23,226

101,836

67,011

Interest income, net

(2

)

17

88

66

Other income (expense), net

31

(30

)

51

(46

)

Income before taxes

25,747

23,213

101,975

67,031

Income tax provision

6,855

5,940

22,966

13,320

Net income

$

18,892

$

17,273

$

79,009

$

53,711

Earnings per share:

Basic

$

0.36

$

0.33

$

1.51

$

1.03

Diluted

$

0.35

$

0.33

$

1.49

$

1.02

Cash dividends declared per common share:

$

0.19

$

0.16

$

0.38

$

0.32

Weighted average shares outstanding:

Basic

52,240,829

52,094,125

52,168,679

52,079,865

Diluted

53,469,759

52,701,202

53,061,169

52,635,415


AAON, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

December 31, 2020

December 31, 2019

Assets

(in thousands, except share and per share data)

Current assets:

Cash and cash equivalents

$

79,025

$

26,797

Restricted cash

3,263

17,576

Accounts receivable, net of allowance for credit losses of $506 and $353, respectively

47,387

67,399

Income tax receivable

4,587

772

Note receivable

31

29

Inventories, net

82,219

73,601

Prepaid expenses and other

3,739

1,375

Total current assets

220,251

187,549

Property, plant and equipment:

Land

4,072

3,274

Buildings

122,171

101,113

Machinery and equipment

281,266

236,087

Furniture and fixtures

18,956

16,862

Total property, plant and equipment

426,465

357,336

Less: Accumulated depreciation

203,125

179,242

Property, plant and equipment, net

223,340

178,094

Intangible assets, net

38

272

Goodwill

3,229

3,229

Right of use assets

1,571

1,683

Note receivable

579

597

Total assets

$

449,008

$

371,424

Liabilities and Stockholders' Equity

Current liabilities:

Revolving credit facility

$

$

Accounts payable

12,447

11,759

Accrued liabilities

46,586

44,269

Total current liabilities

59,033

56,028

Deferred tax liabilities

28,324

15,297

Other long-term liabilities

4,423

3,639

New market tax credit obligation

6,363

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, 52,224,767 and 52,078,515 issued and outstanding at December 31, 2020 and December 31, 2019, respectively

209

208

Additional paid-in capital

5,161

3,631

Retained earnings

345,495

286,301

Total stockholders' equity

350,865

290,140

Total liabilities and stockholders' equity

$

449,008

$

371,424


AAON, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

Years Ending
December 31,

2020

2019

Operating Activities

(in thousands)

Net income

$

79,009

$

53,711

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

Depreciation and amortization

25,634

22,766

Amortization of debt issuance cost

43

7

Provision for credit losses on accounts receivable, net of adjustments

153

91

Provision for excess and obsolete inventories

1,108

1,454

Share-based compensation

11,342

11,799

(Gain) loss on disposition of assets

(6,478

)

337

Foreign currency transaction (gain) loss

(12

)

(27

)

Interest income on note receivable

(24

)

(25

)

Deferred income taxes

13,027

6,038

Changes in assets and liabilities:

Accounts receivable

19,859

(13,412

)

Income taxes

(3,815

)

5,129

Inventories

(9,726

)

2,557

Prepaid expenses and other

(2,364

)

(329

)

Accounts payable

(2,155

)

280

Deferred revenue

1,010

425

Accrued liabilities

2,203

7,124

Net cash provided by operating activities

128,814

97,925

Investing Activities

Capital expenditures

(67,802

)

(37,166

)

Proceeds from sale of property, plant and equipment

60

69

Insurance proceeds

6,417

Investment in certificates of deposits

(6,000

)

Maturities of certificates of deposits

6,000

Principal payments from note receivable

52

51

Net cash used in investing activities

(61,273

)

(37,046

)

Financing Activities

Proceeds from financing obligation, net of issuance costs

6,614

Payment related to financing costs

(301

)

Stock options exercised

21,418

12,625

Repurchase of stock

(30,060

)

(19,586

)

Employee taxes paid by withholding shares

(1,169

)

(1,207

)

Dividends paid to stockholders

(19,815

)

(16,645

)

Net cash used in financing activities

(29,626

)

(18,500

)

Net increase in cash, cash equivalents and restricted cash

37,915

42,379

Cash, cash equivalents and restricted cash, beginning of period

44,373

1,994

Cash, cash equivalents and restricted cash, end of period

$

82,288

$

44,373