SOURCE: AAON

AAON

November 08, 2011 07:00 ET

AAON Reports Higher Third Quarter Sales and Earnings

TULSA, OK--(Marketwire - Nov 8, 2011) - AAON, Inc. (NASDAQ: AAON) today announced its operating results for the third quarter and nine-month period ended September 30, 2011.

In the quarter, net sales increased 14% to $73.8 million from $64.9 million, and net income increased 9% to $5.6 million from $5.2 million in the third quarter of 2010. Earnings per diluted share were $0.23, up 10% from $0.21 for the same period a year ago, based upon 24.8 million and 25.0 million diluted shares outstanding for the three months ended September 30, 2011, compared to September 30, 2010, respectively. Net sales for the first nine months of 2011 increased 13% to $202.8 million from $178.7 million in 2010, and net income decreased 19% to $13.1 million from $16.1 million. Earnings per diluted share were $0.53, down 16% from $0.63, based upon 24.9 million and 25.5 million diluted shares outstanding for the nine months ended September 30, 2011, compared to September 30, 2010, respectively.

Norman H. Asbjornson, President and CEO, stated, "We are very proud to have increased net sales in the third quarter and for the year to date, in a severely contracted and very difficult market, by greatly increasing our market share; however, understandably this market, caused by poor economic conditions, has put substantial pressure on our margins, exacerbated by cost increases led by commodity prices."

Mr. Asbjornson then said, "We are also pleased to have achieved higher earnings in the third quarter, primarily by greatly reducing the negative impact of various manufacturing/facilities problems previously reported, aided by a price increase, despite an effective federal income tax rate increase from 29% to a normalized 35% due to lesser federal tax credits."

Mr. Asbjornson added that, "We have increased our investment in equipment and facilities in 2011 by 257% over the average of the preceding three years and continue to introduce new products, all of which have positioned AAON to benefit from future opportunities. Significantly, our increased market penetration has produced a 15% rise in our backlog from $47.2 million at September 30, 2010, to $54.1 million at September 30, 2011."

The Company will host a conference call today at 4:15 P.M. ET to discuss the third quarter results. To participate, call 877-737-1669 (Pass Code: VA46804).

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 30, 2011 September 30, 2010 September 30, 2011 September 30, 2010
(in thousands, except per share data)
Net sales $ 73,829 $ 64,886 $ 202,818 $ 178,726
Cost of sales 59,570 52,389 165,184 137,729
Gross profit 14,259 12,497 37,634 40,997
Selling, general and
administrative expenses 5,445 5,166 16,685 16,592
Income from operations 8,814 7,331 20,949 24,405
Interest expense (59 ) (4 ) (173 ) (4 )
Investment interest income 11 44 54 162
Note receivable interest income 11 - 33 -
Other income (expense), net (122 ) (64 ) (690 ) (186 )
Income before income taxes 8,655 7,307 20,173 24,377
Income tax provision 3,029 2,134 7,058 8,265
Net income $ 5,626 $ 5,173 $ 13,115 $ 16,112
Earnings per share:
Basic* $ 0.23 $ 0.21 $ 0.53 $ 0.64
Diluted* $ 0.23 $ 0.21 $ 0.53 $ 0.63
Cash dividends declared per common share*: $ 0.12 $ 0.12 $ 0.12 $ 0.12
Weighted average shares outstanding:
Basic* 24,667 24,833 24,708 25,337
Diluted* 24,844 24,971 24,902 25,471

*Reflects three-for-two stock split effective June 13, 2011.

AAON, Inc., and Subsidiaries
Consolidated Balance Sheets
(unaudited)
September 30, 2011 December 31, 2010
Assets (in thousands except share and per share data)
Current assets:
Cash and cash equivalents $ 2,278 $ 2,393
Certificates of deposit - 1,503
Investments held to maturity at amortized cost 572 9,520
Accounts receivable, net 40,082 39,901
Note receivable 26 26
Inventories, net 42,256 33,602
Prepaid expenses and other 850 656
Deferred tax assets 4,735 4,147
Total current assets 90,799 91,748
Property, plant and equipment:
Land 1,340 1,328
Buildings 53,846 45,482
Machinery and equipment 121,256 100,559
Furniture and fixtures 7,456 6,356
Total property, plant and equipment 183,898 153,725
Less: Accumulated depreciation 93,533 86,307
Property, plant and equipment, net 90,365 67,418
Note receivable, long-term 1,090 1,111
Total assets $ 182,254 $ 160,277
Liabilities and Stockholders' Equity
Current liabilities:
Revolving credit facility $ 13,965 $ -
Accounts payable 11,260 13,017
Accrued liabilities 23,923 23,229
Total current liabilities 49,148 36,246
Deferred tax liabilities 7,832 7,292
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, 24,653,493 and 24,758,480 issued and outstanding at September 30, 2011 and December 31, 2010, respectively*
99


99
Retained earnings 125,175 116,640
Total stockholders' equity 125,274 116,739
Total liabilities and stockholders' equity $ 182,254 $ 160,277

* Reflects three-for-two stock split effective June 13, 2011.

AAON, Inc., and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited)
Nine Months
Ended
September 30, 2011
Nine Months
Ended
September 30, 2010
(in thousands)
Operating Activities
Net income $ 13,115 $ 16,112
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 8,174 7,330
Amortization of bond premiums 155 -
Provision for losses on accounts receivable, net of adjustments (242 ) (36 )
Share-based compensation 509 609
Excess tax benefits from stock options exercised and restricted stock awards vested (176 ) (331 )
Gain on disposition of assets (14 ) (105 )
Deferred income taxes (48 ) (705 )
Changes in assets and liabilities:
Accounts receivable 61 (3,522 )
Inventories (8,654 ) (5,862 )
Prepaid expenses and other (194 ) 542
Financial derivative assets - 1,743
Accounts payable (2,281 ) 4,149
Accrued liabilities 870 3,748
Net cash provided by operating activities 11,275 23,672
Investing Activities
Proceeds from sale of property, plant and equipment 55 105
Investment in certificates of deposit - (2,744 )
Maturities of certificates of deposit 1,503 799
Investments held to maturity - (13,692 )
Maturities of investments 8,793 2,149
Capital expenditures (30,638 ) (13,050 )
Deposits on sale of asset held for sale - 453
Proceeds from note receivable 21 -
Net cash used in investing activities (20,266 ) (25,980 )
Financing Activities
Borrowings under revolving credit facility 66,557 6,682
Payments under revolving credit facility (52,592 ) (2,691 )
Payments of long-term debt - (68 )
Stock options exercised 373 1,054
Excess tax benefits from stock options exercised and restricted stock awards vested 176 331
Repurchases of stock (2,662 ) (18,377 )
Cash dividends paid to stockholders (2,976 )* (6,192 )
Net cash provided by (used) in financing activities 8,876 (19,261 )
Effect of exchange rate on cash - 79
Net decrease in cash and cash equivalents (115 ) (21,490 )
Cash and cash equivalents, beginning of year 2,393 25,639
Cash and cash equivalents, end of period $ 2,278 $ 4,149

*Includes cash payment in lieu of fractional shares resulting from three-for-two stock split effective June 13, 2011.

AAON, Inc., and Subsidiaries
Consolidated Statements of Cash Flows (continued)
(unaudited)
Nine Months
Ended
September 30, 2011
Nine Months
Ended
September 30, 2010
(in thousands)
Non Cash Investing Activities
Capital expenditures accrued in accounts payable $ 524 -

Contact Information

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