SOURCE: AAON

AAON

May 05, 2014 07:00 ET

AAON Reports Record Sales and Earnings and 30% Increase in Dividends

TULSA, OK--(Marketwired - May 5, 2014) - AAON, Inc. (NASDAQ: AAON), today announced its operating results for the three months ended March 31, 2014. Sales in the first quarter were $76.4 million, up 14.3% from $66.8 million in 2013. Net income was $9.8 million, up 37.6% from $7.1 million in the same period a year ago. Earnings per diluted share in the first quarter of 2014 were $0.26, up 36.8% from $0.19 for the same period the previous year, based upon 37.1 million and 37.0 million shares outstanding at March 31, 2014 and 2013, respectively. All per share earnings and shares reflect the 3-for-2 stock split effective July 2, 2013.

Both sales and earnings in 2014 were all-time records for any first quarter in the history of AAON.

Further, it should be noted that income before taxes in 2014 was $14.3 million, up 71.0% from $8.3 million in the same period a year ago. The effective tax rates on these earnings were 31.3% and 14.6% in the first quarters of 2014 and 2013, respectively. Both such tax rates are abnormally low due to a change in method of accounting for state investment credits in 2014 and several retroactive Federal tax credits along with a change in estimated taxes in 2013. However, the differential in these tax rates greatly distorts the comparison of net income for the first quarters of 2014 and 2013. The current estimated 2014 effective tax rate is 34.0%.

Norman H. Asbjornson, President and CEO, stated, "The first quarter of 2014 gains in sales and income from operations primarily reflect increases in market share, volume and prices, in addition to a decline in cost of materials, with gross profit as a percent of sales increasing from 22.9% to 28.6%. SG&A expenses as a percent of sales decreased from 10.4% to 10.0%."

Mr. Asbjornson continued, "The Company's balance sheet at March 31, 2014, was very strong, showing a current ratio of 3.3:1 (including cash and short-term investments totaling $51.6 million) and we remained debt free. However, our backlog decreased from a record high of $71.7 million at March 31, 2013 (which included an influx of orders in advance of a scheduled price increase), to $51.7 million at March 31, 2014 (which was not affected by any additional price increase)." 

Mr. Asbjornson then said, "Based on the first quarter results and other relevant factors, we expect 2014 to produce higher sales and earnings than 2013."

Mr. Asbjornson next reported that, "Taking into account the Company's sustained period of profitability and mounting liquidity position, the Board of Directors of AAON has approved a 30% increase in its semi-annual cash dividend from $0.10 per share to $0.13 per share, starting with the next dividend payable on July 1, 2014, to stockholders of record on June 12, 2014."

The Company will host a conference call today at 4:15 P.M. Eastern Time to discuss the first quarter results. To participate, call 1-866-544-4631; or, for rebroadcast, call 1-866-245-6755 (code 845795).

AAON, Inc. is a manufacturer of air conditioning and heating equipment consisting of rooftop units, chillers, outdoor mechanical rooms, air handling units, makeup air units, energy recovery units, condensing units, commercial self-contained 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, 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,
 
    2014     2013  
    (in thousands, except share and per share data)  
Net sales   $ 76,367     $ 66,833  
Cost of sales     54,521       51,521  
Gross profit     21,846       15,312  
Selling, general and administrative expenses     7,629       6,967  
(Gain) loss on disposal of assets     (24 )     7  
Income from operations     14,241       8,338  
Interest income     69       34  
Other expense, net     (21 )     (16 )
Income before taxes     14,289       8,356  
Income tax provision     4,467       1,216  
Net income   $ 9,822     $ 7,140  
Earnings per share:                
  Basic*   $ 0.27     $ 0.19  
  Diluted*   $ 0.26     $ 0.19  
Cash dividends declared per common share*:   $ --     $ --  
Weighted average shares outstanding:                
  Basic*     36,694,554       36,760,632  
  Diluted*     37,075,460       36,962,144  
                 
*Reflects three-for-two stock split effective July 2, 2013
 
 
 
AAON, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
 
    March 31,
2014
  December 31,
2013
Assets   (in thousands, except share and per share data)
Current assets:            
  Cash and cash equivalents   $ 19,670   $ 12,085
  Certificates of deposit     9,105     8,110
  Investments held to maturity at amortized cost     22,808     16,040
  Accounts receivable, net     45,704     39,063
  Income tax receivable     --     1,073
  Note receivable     29     29
  Inventories, net     34,891     32,140
  Prepaid expenses and other     701     304
  Deferred tax assets     5,488     4,779
Total current assets     138,396     113,623
Property, plant and equipment:            
  Land     2,233     1,417
  Buildings     62,744     61,821
  Machinery and equipment     120,942     119,439
  Furniture and fixtures     9,934     9,748
    Total property, plant and equipment     195,853     192,425
    Less: Accumulated depreciation     107,678     105,142
  Property, plant and equipment, net     88,175     87,283
Certificates of deposit     240     2,638
Investments held to maturity at amortized cost     1,027     10,981
Note receivable     881     919
Total assets   $ 228,719   $ 215,444
             
Liabilities and Stockholders' Equity            
Current liabilities:            
  Revolving credit facility   $ --   $ --
  Accounts payable     11,307     7,779
  Accrued liabilities     30,643     28,550
Total current liabilities     41,950     36,329
Deferred revenue     735     585
Deferred tax liabilities     13,979     14,424
Commitments and contingencies            
Stockholders' equity:            
Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued     --     --
Common stock, $.004 par value, 50,000,000 shares authorized, 36,652,276 and 36,711,354 issued and outstanding at March 31, 2014 and December 31, 2013, respectively     147     147
Additional paid-in capital     --     --
Retained earnings     171,908     163,959
Total stockholders' equity     172,055     164,106
Total liabilities and stockholders' equity   $ 228,719   $ 215,444
             
             
   
AAON, Inc. and Subsidiaries  
Consolidated Statements of Cash Flows  
(Unaudited)  
   
    Three Months Ended
 March 31,
 
    2014     2013  
Operating Activities   (in thousands)  
Net income   $ 9,822     $ 7,140  
Adjustments to reconcile net income to net cash provided by operating activities:                
  Depreciation     2,808       3,191  
  Amortization of bond premiums     216       127  
  Provision for losses on accounts receivable, net of adjustments     (130 )     269  
  Provision for excess and obsolete inventories, net     4       169  
  Share-based compensation     412       392  
  Excess tax benefits from stock options exercised and restricted stock awards vested     (356 )     (109 )
  (Gain) loss on disposition of assets     (24 )     7  
  Foreign currency transaction gain     31       19  
  Interest income on note receivable     (10 )     (10 )
  Deferred income taxes     (1,154 )     (1,205 )
  Changes in assets and liabilities:                
    Accounts receivable     (6,511 )     5,046  
    Income tax receivable     1,429       (172 )
    Inventories     (2,755 )     (1,541 )
    Prepaid expenses and other     (397 )     (99 )
    Accounts payable     3,441       (1,838 )
    Deferred revenue     204       --  
    Accrued liabilities     2,039       (2,895 )
Net cash provided by operating activities     9,069       8,491  
Investing Activities                
  Capital expenditures     (3,616 )     (997 )
  Proceeds from sale of property, plant and equipment     27       --  
  Investment in certificates of deposits     --       (238 )
  Maturities of certificates of deposits     1,403       720  
  Purchases of investments held to maturity     --       (1,396 )
  Maturities of investments     2,717       610  
  Proceeds from called investment     253       --  
  Principal payments from note receivable     17       20  
  Net cash provided by (used in) investing activities     801       (1,281 )
Financing Activities                
  Borrowings under revolving credit facility     --       1,955  
  Payments under revolving credit facility     --       (1,955 )
  Stock options exercised     340       354  
  Excess tax benefits from stock options exercised and restricted stock awards vested     356       109  
  Repurchase of stock     (2,981 )     (1,115 )
  Net cash used in financing activities     (2,285 )     (652 )
Net increase in cash and cash equivalents     7,585       6,558  
Cash and cash equivalents, beginning of period     12,085       3,159  
Cash and cash equivalents, end of period   $ 19,670     $ 9,717  
                 
                 

Contact Information

  • For Further Information:

    Jerry R. Levine

    Phone: (914) 244-0292
    Fax: (914) 244-0295
    Email: jrladvisor@yahoo.com