SOURCE: AAON

AAON

May 05, 2016 07:00 ET

AAON Reports Record First Quarter Sales and Earnings

TULSA, OK--(Marketwired - May 05, 2016) - AAON, Inc. (NASDAQ: AAON) today announced its operating results for the first quarter ended March 31, 2016.

Net sales in the first quarter were $85.4 million, up 11.3% from $76.8 million in 2015. Net income was $10.8 million, up 28.7% from $8.4 million in the same period a year ago.

Earnings per diluted share in the first quarter of 2016 were $0.20, up 33.3% from $0.15 for the same period the previous year, based upon 53.4 million and 54.6 million shares outstanding at March 31, 2016 and 2015, respectively.

Both sales and earnings in 2016 were all-time records for any first quarter in the history of AAON.

Norman H. Asbjornson, President and CEO, stated, "The first quarter of 2016 gains in sales and income from operations primarily reflect increases in volume, in addition to a decline in the cost of materials, with gross profit as a percentage of sales increasing to 30.1% of sales as compared to 28.4% of sales a year ago. Our SG&A expense as a percentage of sales declined from 10.8% to 10.4% for the first quarter."

Mr. Asbjornson further added, "Our financial condition at March 31, 2016 remained quite strong with a current ratio of 3.4:1 (including cash and short-term investments totaling $43.2 million). We also remain debt free. Our backlog at March 31, 2016 increased 8.8% to $60.3 million, from $55.4 million for the same period a year ago."

Mr. Asbjornson continued, "The year is off to a strong start and we expect the rest of the year to remain firm. Work continues on our new Water Source Heat Pump line and while we are excited by the outlook for this product, significant sales from this product line will not be witnessed until mid-2017, with related profits making an impact in 2018."

The Company will host a conference call today at 4:15 P.M. Eastern Time to discuss the first quarter results. To participate, call 1-888-241-0551 (code 3226942); or, for rebroadcast, call 1-855-859-2056 (code 3226942).

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 heat pumps 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, as amended. 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
 March 31,
    2016   2015
    (in thousands, except share and per share data)
Net sales   $ 85,422     $ 76,768  
Cost of sales     59,691       54,970  
Gross profit     25,731       21,798  
Selling, general and administrative expenses     8,913       8,317  
(Gain) loss on disposal of assets     (8 )     5  
Income from operations     16,826       13,476  
Interest income     74       44  
Other income (expense), net     117       (75 )
Income before taxes     17,017       13,445  
Income tax provision     6,211       5,046  
Net income   $ 10,806     $ 8,399  
Earnings per share:            
  Basic   $ 0.20     $ 0.16  
  Diluted   $ 0.20     $ 0.15  
Cash dividends declared per common share:   $ -     $ -  
Weighted average shares outstanding:            
  Basic     53,061,058       54,083,897  
  Diluted     53,430,103       54,640,389  
                 
 
AAON, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
 
    March 31, 2016   December 31, 2015
Assets   (in thousands, except share and per share data)
Current assets:            
  Cash and cash equivalents   $ 17,248   $ 7,908
  Certificates of deposit     10,760     10,080
  Investments held to maturity at amortized cost     15,195     12,444
  Accounts receivable, net     42,001     50,024
  Income tax receivable     -     4,702
  Note receivable     25     23
  Inventories, net     42,479     38,499
  Prepaid expenses and other     2,483     533
 Total current assets     130,191     124,213
 Property, plant and equipment:            
  Land     2,233     2,233
  Buildings     70,655     68,806
  Machinery and equipment     148,645     143,100
  Furniture and fixtures     11,661     11,270
    Total property, plant and equipment     233,194     225,409
    Less: Accumulated depreciation     127,417     124,348
Property, plant and equipment, net     105,777     101,061
Certificates of deposit     -     1,880
Investments held to maturity at amortized cost     -     5,039
Note receivable     701     661
Total assets   $ 236,669   $ 232,854
             
Liabilities and Stockholders' Equity            
Current liabilities:            
  Revolving credit facility   $ -   $ -
  Accounts payable     3,604     6,178
  Accrued liabilities     34,435     37,235
Total current liabilities     38,039     43,413
Deferred revenue     1,154     698
Deferred tax liabilities     7,676     8,706
Donations     1,130     1,119
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, 53,059,669 and 53,012,363 issued and outstanding at March 31, 2016 and December 31, 2015, respectively     212     212
  Additional paid-in capital     -     -
  Retained earnings     188,458     178,706
Total stockholders' equity     188,670     178,918
Total liabilities and stockholders' equity   $ 236,669   $ 232,854
             
 
AAON, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
 
    Three Months Ended
 March 31,
    2016   2015
Operating Activities   (in thousands)
  Net income   $ 10,806     $ 8,399  
  Adjustments to reconcile net income to net cash provided by operating activities:            
    Depreciation     3,171       2,804  
    Amortization of bond premiums     83       61  
    Provision for losses on accounts receivable, net of adjustments     123       (59 )
    Provision for excess and obsolete inventories     137       41  
    Share-based compensation     948       438  
    Excess tax benefits from stock options exercised and restricted stock awards vested     (745 )     (1,098 )
    (Gain) loss on disposition of assets     (8 )     5  
    Foreign currency transaction (gain) loss     (48 )     70  
    Interest income on note receivable     (7 )     (8 )
    Deferred income taxes     (1,030 )     (443 )
    Changes in assets and liabilities:            
      Accounts receivable     7,900       4,286  
      Income taxes     6,734       1,286  
      Inventories     (4,117 )     (6,969 )
      Prepaid expenses and other     (1,950 )     (301 )
      Accounts payable     (3,129 )     (1,316 )
      Deferred revenue     110       64  
      Accrued liabilities and donations     (3,730 )     (2,925 )
  Net cash provided by operating activities     15,248       4,335  
 Investing Activities            
  Capital expenditures     (7,332 )     (3,587 )
  Proceeds from sale of property, plant and equipment     8       -  
  Maturities of certificates of deposits     1,200       2,638  
  Maturities of investments     1,700       8,445  
  Proceeds from called investments     505       504  
  Principal payments from note receivable     13       14  
  Net cash (used in) provided by investing activities     (3,906 )     8,014  
 Financing Activities            
  Stock options exercised     709       1,082  
  Excess tax benefits from stock options exercised and restricted stock awards vested     745       1,098  
  Repurchase of stock     (3,456 )     (2,955 )
  Net cash used in financing activities     (2,002 )     (775 )
Net increase in cash and cash equivalents     9,340       11,574  
Cash and cash equivalents, beginning of period     7,908       21,952  
Cash and cash equivalents, end of period   $ 17,248     $ 33,526  
                 

Use of Non-GAAP Financial Measures

To supplement the Company's consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), an additional non-GAAP financial measure is provided and reconciled in the following table. The Company believes that this non-GAAP financial measure, when considered together with the GAAP financial measures, provides information that is useful to investors in understanding period-over-period operating results. The Company believes that this non-GAAP financial measure enhances the ability of investors to analyze the Company's business trends and operating performance.

EBITDAX

EBITDAX (as defined below) is presented herein and reconciled from the GAAP measure of net income because of its wide acceptance by the investment community as a financial indicator of a company's ability to internally fund operations.

The Company defines EBITDAX as net income, plus (1) depreciation, (2) amortization of bond premiums, (3) share-based compensation, (4) interest (income) expense and (5) income tax expense. EBITDAX is not a measure of net income or cash flows as determined by GAAP.

The Company's EBITDAX measure provides additional information which may be used to better understand the Company's operations. EBITDAX is one of several metrics that the Company uses as a supplemental financial measurement in the evaluation of its business and should not be considered as an alternative to, or more meaningful than, net income, as an indicator of operating performance. Certain items excluded from EBITDAX are significant components in understanding and assessing a company's financial performance. EBITDAX, as used by the Company, may not be comparable to similarly titled measures reported by other companies. The Company believes that EBITDAX is a widely followed measure of operating performance and is one of many metrics used by the Company's management team and by other users of the Company's consolidated financial statements.

The following table provides a reconciliation of net income (GAAP) to EBITDAX (non-GAAP) for the periods indicated:

     
    Three Months Ended
March 31,
    2016   2015
    (in thousands)
Net Income, a GAAP measure   $ 10,806     $ 8,399  
Depreciation     3,171       2,804  
Amortization of bond premiums     83       61  
Share-based compensation     948       438  
Interest income     (157 )     (105 )
Income tax expense     6,211       5,046  
EBITDAX, a non-GAAP measure   $ 21,062     $ 16,643  
                 

Contact Information

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