SOURCE: AAON

AAON

November 02, 2009 07:00 ET

AAON Reports Third Quarter Results

TULSA, OK--(Marketwire - November 2, 2009) - AAON, INC. (NASDAQ: AAON) today announced its operating results for the three and nine months ended September 30, 2009.

In the quarter, net sales decreased 26% to $58.5 million from $79.3 million and net income decreased 8% to $7.7 million from $8.4 million from third quarter 2008. Earnings per diluted share were $0.45, down 4% from $0.47 for the same period a year ago, based upon 17.3 million and 17.5 million diluted shares outstanding for the three months ended September 30, 2009, compared to September 30, 2008, respectively. Net sales for the first nine months of 2009 decreased 13% to $191.1 million from $219.5 million in 2008, and net income decreased 4% to $21.6 million from $22.5 million. Earnings per diluted share were $1.25 in 2009 and 2008, based upon 17.3 million and 18.0 million diluted shares outstanding for the nine months ended September 30, 2009, compared to September 30, 2008, respectively.

Norman H. Asbjornson, President and CEO, stated that, "The decrease in sales was attributable primarily to current economic conditions. The much lower decrease in net income (8% Net Income vs. 26% Sales) reflects a $1,005,400 reduction in cost of sales resulting from our hedging of copper, as well as outstanding operating performance due to production and labor efficiencies, lower material costs and reduced manufacturing related expenses." The $1,005,400 is a benefit to Net Income of $633,400 or $0.04 earnings per diluted share.

Mr. Asbjornson said that, "We expect the downturn in the economy which we experienced to an even greater extent in the third quarter will continue to impact our business for the foreseeable future; however, we have a strong liquidity position with cash on hand of $17.9 million at September 30, 2009, a record high quarter end amount. In view of the current economic environment, our goal remains to keep a healthy financial condition."

The Company will host a conference call today at 4:15 P.M. EST to discuss the third quarter results. To participate, call 1-877-737-1669.

AAON, Inc. is a manufacturer of air-conditioning and heating equipment consisting of rooftop units, chillers, air-handling 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     Nine Months Ended
                                September  September  September  September
                                   30,        30,        30,        30,
                                  2009       2008       2009       2008
                                ---------  ---------  ---------  ---------
                                  (in thousands, except per share data)

Net sales                       $  58,492  $  79,279  $ 191,054  $ 219,516

Cost of sales                      40,764     59,261    138,288    165,856
                                ---------  ---------  ---------  ---------

      Gross profit                 17,728     20,018     52,766     53,660

Selling, general and
 administrative expenses            5,313      7,294     18,641     19,325
                                ---------  ---------  ---------  ---------

     Income from operations        12,415     12,724     34,125     34,335

Interest expense                        -        (39)        (9)       (58)

Interest income                        64          -         71         27

Other income (expense), net          (173)       169          1        416
                                ---------  ---------  ---------  ---------

Income before income taxes         12,306     12,854     34,188     34,720

Income tax provision                4,565      4,499     12,622     12,171
                                ---------  ---------  ---------  ---------

     Net income                 $   7,741  $   8,355  $  21,566  $  22,549
                                =========  =========  =========  =========

Earnings per share:
   Basic                        $    0.45  $    0.49  $    1.26  $    1.28
                                =========  =========  =========  =========
   Diluted                      $    0.45  $    0.47  $    1.25  $    1.25
                                =========  =========  =========  =========

Cash dividends declared
 per common share:              $    0.00  $    0.00  $    0.18  $    0.16
                                =========  =========  =========  =========

Weighted average shares
 outstanding:
   Basic                           17,175     17,264     17,178     17,683
                                =========  =========  =========  =========
   Diluted                         17,304     17,484     17,318     18,028
                                =========  =========  =========  =========


                       AAON, Inc., and Subsidiaries
                        Consolidated Balance Sheets
                                (Unaudited)

                                                 September 30, December 31,
                                                     2009         2008
                                                 ------------  ------------
                                                   (in thousands, except
                                                  share and per share data)
Assets
Current assets:
   Cash and cash equivalents                     $     17,894  $        269
   Accounts receivable, net                            35,728        38,804
   Inventories, net                                    31,268        36,382
   Prepaid expenses and other                             960           428
   Derivative assets                                      806             -
   Assets held for sale, net                            1,473             -
   Deferred tax assets                                  4,638         4,235
                                                 ------------  ------------
Total current assets                                   92,767        80,118

Property, plant and equipment
   Land                                                 1,328         2,153
   Buildings                                           41,171        36,371
   Machinery and equipment                             90,331        87,219
   Furniture and fixtures                               7,407         7,076
                                                 ------------  ------------
      Total property, plant and equipment             140,237       132,819
      Less:  Accumulated depreciation                  79,008        72,269
                                                 ------------  ------------
Property, plant and equipment, net                     61,229        60,550

Derivative assets                                         199             -
Note receivable, long-term                                 75            75

                                                 ------------  ------------
Total assets                                     $    154,270  $    140,743
                                                 ============  ============

Liabilities & Stockholders' Equity
Current liabilities:
   Revolving credit facility                     $          -  $      2,901
   Current maturities of long-term debt                    91            91
   Accounts payable                                    12,217        14,715
   Dividends payable                                        -         2,773
   Accrued liabilities                                 23,242        19,038
                                                 ------------  ------------
Total current liabilities                              35,550        39,518

Other long-term debt                                        8           121
Deferred tax liabilities                                3,839         4,582
Commitments and contingencies                               -             -

Stockholder's Equity
   Preferred stock, $.001 par value, 7,500,000
    shares authorized, no shares issued                     -             -
   Common stock, $.004 par value, 75,000,000
    shares issued authorized, 17,178,944 and
    17,208,733 issued and outstanding at
    September 30, 2009 and December 31, 2008,
    respectively                                           71            71
   Additional paid-in capital                             329           538
   Accumulated other comprehensive income, net
    of tax                                              1,321           778
   Retained earnings                                  113,152        95,135
                                                 ------------  ------------
Total stockholders' equity                            114,873        96,522
                                                 ------------  ------------
Total liabilities and stockholders' equity       $    154,270  $    140,743
                                                 ============  ============


                       AAON, Inc., and Subsidiaries
                  Consolidated Statements of Cash Flows
                                (Unaudited)

                                                          Nine      Nine
                                                         Months    Months
                                                          Ended     Ended
                                                        September September
                                                           30,       30,
                                                          2009      2008
                                                        --------  --------
                                                          (in thousands)
Operating Activities
   Net income                                           $ 21,566  $ 22,549

   Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation                                         6,682     7,151
      Provision for losses on accounts receivable            603       568
      Provision for excess and obsolete inventories          414         -
      Share-based compensation                               631       603
      Excess tax benefits from stock options exercised
       and restricted stock awards vested                   (389)   (1,262)
      Gain on disposition of assets                            4       (11)
      Unrealized gain on derivative assets                (1,005)        -
      Deferred income taxes                                 (819)     (832)
      Changes in assets and liabilities:
         Accounts receivable                               2,551    (9,904)
         Inventories                                       4,742    (2,340)
         Prepaid expenses and other                         (532)      (75)
         Accounts payable                                 (2,695)    6,687
         Accrued liabilities                               4,576     6,951
                                                        --------  --------
   Net cash provided by operating activities              36,329    30,085
                                                        --------  --------

Investing Activities
   Proceeds from sale of property, plant, and equipment        -         1
   Capital expenditures                                   (8,644)   (5,475)
                                                        --------  --------
   Net cash used in investing activities                  (8,644)   (5,474)
                                                        --------  --------

Financing Activities
   Borrowings under revolving credit facility              9,972    30,090
   Payments under revolving credit facility              (12,873)  (27,650)
   Payments of long-term debt                               (113)      (68)
   Stock options exercised                                   871     1,105
   Excess tax benefits from stock options exercised
    and restricted stock awards vested                       389     1,262
   Repurchases of stock                                   (2,548)  (24,082)
   Cash dividends paid to stockholders                    (5,874)   (5,791)
                                                        --------  --------
   Net cash used in financing activities                 (10,176)  (25,134)
                                                        --------  --------
Effect of exchange rate on cash                              116       (26)
                                                        --------  --------
Net increase (decrease) in cash and cash equivalents      17,625      (549)
                                                        --------  --------
Cash and cash equivalents, beginning of year                 269       879
                                                        --------  --------
Cash and cash equivalents, end of period                $ 17,894  $    330
                                                        ========  ========

Contact Information

  • For Further Information:
    Jerry R. Levine
    Phone: (914) 244-0292
    Fax: (914) 244-0295