AAON Reports Record Sales and Earnings

TULSA, OK--(Marketwired - Aug 8, 2013) - AAON, Inc. (NASDAQ: AAON), today announced its operating results for the second quarter and six month period ended June 30, 2013.

Sales and earnings during the second quarter were record highs for any quarter in the Company's history.

Management believes that the Company's percent of net income per dollar of sales (13%) in the second quarter was the highest for any quarter by any other public company, ever, in the HVAC industry.

Revenues in the quarter were $91.2 million, up 9% from $83.3 million in 2012. Net income was $12.1 million, up 30% from $9.3 million in the same period a year ago. Net sales for the six month period ended June 30, 2013, were also a record for the first half of any year, $158.1 million, up 7% compared to $148.3 million in 2012. Earnings for the six months ended June 30, 2013 were $19.3 million, up 39% compared to $13.9 million in 2012.

Earnings per diluted share in the second quarter of 2013 were $0.33, up 32% from $0.25 for the same period a year ago, based upon 37.2 million and 37.1 million diluted shares outstanding for the three months ended June 30, 2013, compared to June 30, 2012, respectively. Earnings per diluted share were $0.52, up 41% from $0.37, in the six months ended June 30, 2013, and June 30, 2012, respectively, based upon 37.1 million diluted shares outstanding for both periods. All per share earnings reflect the 3-for-2 stock split effective July 2, 2013.

Norman H. Asbjornson, President and CEO, stated, "The second quarter increases in sales and income from operations primarily reflect price increases and a decline in cost of materials; gross profit as a percent of sales increased 5% (from 25.3% to 30.3%), but SG&A expenses as a percent of sales also increased 1.7% (from 8.3% to 10.0%), the majority of which (SG&A) represents increases in "profit sharing" and warranty expense.

Mr. Asbjornson continued, "The Company's backlog increased from $62.2 million at June 30, 2012, to $66.2 million at June 30, 2013, but declined from the record of $71.7 at March 31, 2013."

Mr. Asbjornson said, "While we still anticipate record sales and profits for 2013, there has been a noticeable softening in our market which has lowered our expectations for the balance of the year as compared to the first half of the year."

The Company will host a conference call today at 4:15 P.M. EDT to discuss the second quarter results. To participate, call 1-866-544-4631; or, for rebroadcast, call 1-866-245-6755 (code 932908).

AAON, Inc. is a manufacturer of air-conditioning and heating equipment consisting of rooftop units, chillers, air-handling units, condensing units, heat recovery 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. 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  June 30,								Six Months Ended  June 30,
			2013				2012				2013				2012
			(in thousands, except share and per share data)
Net sales			$	91,241			$	83,333			$	158,074			$	148,290
Cost of sales				63,565				62,230				115,086				113,669
Gross profit				27,676				21,103				42,988				34,621
Selling, general and administrative expenses				9,089				6,899				16,056				12,880
(Gain) loss on disposal of assets				(59	)			10				(52	)			(13	)
Income from operations				18,646				14,194				26,984				21,754
Interest expense				-				(11	)			(1	)			(27	)
Interest income				57				2				92				15
Other income(expense), net				253				(51	)			237				(3	)
Income before taxes				18,956				14,134				27,312				21,739
Income tax provision				6,837				4,837				8,053				7,875
Net income			$	12,119			$	9,297			$	19,259			$	13,864
Earnings per share:
	Basic*		$	0.33			$	0.25			$	0.52			$	0.38
	Diluted*		$	0.33			$	0.25			$	0.52			$	0.37
Cash dividends declared per common share*:			$	0.10			$	0.08			$	0.10			$	0.08
Weighted average shares outstanding:
	Basic*			36,759,718				36,828,650				36,760,173				36,854,913
	Diluted*			37,150,262				37,091,528				37,056,201				37,124,982

*Reflects three-for-two stock split effective July 2, 2013

AAON, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
				June 30, 2013			December 31, 2012
Assets				(in thousands, except share and per share data)
Current assets:
Cash and cash equivalents				$	19,415		$	3,159
Certificates of deposit					3,460			3,120
Investments held to maturity at amortized cost					7,353			2,832
Accounts receivable, net					50,108			43,866
Income tax receivable					410			694
Note receivable					29			28
Inventories, net					34,131			32,614
Prepaid expenses and other					900			740
	Deferred tax assets				5,605			4,493
Total current assets					121,411			91,546
Property, plant and equipment:
	Land				1,340			1,340
	Buildings				60,126			59,761
	Machinery and equipment				118,253			117,617
	Furniture and fixtures				9,322			8,906
		Total property, plant and equipment			189,041			187,624
		Less: Accumulated depreciation			102,963			96,929
	Property, plant and equipment, net				86,078			90,695
Certificates of deposit					1,298			2,120
Investments held to maturity at amortized cost					11,475			8,041
Note receivable					952			1,091
Total assets				$	221,214		$	193,493
Liabilities and Stockholders' Equity
Current liabilities:
	Revolving credit facility			$	-		$	-
	Accounts payable				13,858			13,047
	Dividends payable				3,712			-
	Accrued liabilities				36,045			26,578
Total current liabilities					53,615			39,625
Deferred revenue					201			-
Deferred tax liabilities					14,878			15,732
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value, 16,875,000 shares authorized, no shares issued*					-			-
Common stock, $.004 par value, 168,750,000 shares authorized, 36,754,988 and 36,776,624 issued and outstanding at June 30, 2013 and December 31, 2012, respectively*					147			147
Additional paid-in capital					-			-
Retained earnings					152,373			137,989
Total stockholders' equity					152,520			138,136
Total liabilities and stockholders' equity				$	221,214		$	193,493

*Reflects three-for-two stock split effective July 2, 2013

AAON, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
					Six Months Ended  June 30,
					2013				2012
Operating Activities					(in thousands)
	Net income				$	19,259			$	13,864
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation				6,268				6,747
		Amortization of bond premiums				304				20
		Provision for losses on accounts receivable, net of adjustments				102				(1	)
		Provision for excess and obsolete inventories				201				-
		Share-based compensation				695				364
		Excess tax benefits from stock options exercised and restricted stock awards vested				(385	)			(33	)
		Gain on disposition of assets				(52	)			(13	)
		Foreign currency transaction gain				43				7
		Interest income on note receivable				(20	)			-
		Deferred income taxes				(1,966	)			(875	)
		Write-off of note receivable				75				-
		Changes in assets and liabilities:
			Accounts receivable			(6,344	)			(17,949	)
			Income tax receivable			3,942				5,801
			Inventories			(1,718	)			(4,194	)
			Prepaid expenses and other			(160	)			(91	)
			Accounts payable			1,101				4,215
			Deferred revenue			201				-
			Accrued liabilities			6,194				11,714
	Net cash provided by operating activities					27,740				19,576
Investing Activities
	Capital expenditures					(1,949	)			(8,091	)
	Proceeds from sale of property, plant and equipment					60				306
	Investment in certificates of deposits					(958	)			(4,274	)
	Maturities of certificates of deposits					1,440				-
	Purchases of investments held to maturity					(9,969	)			(5,624	)
	Maturities of investments					1,710				-
	Proceeds from called investment					-				270
	Principal payments from note receivable					40				15
	Net cash used in investing activities					(9,626	)			(17,398	)
Financing Activities
	Borrowings under revolving credit facility					2,321				27,108
	Payments under revolving credit facility					(2,321	)			(24,424	)
	Stock options exercised					767				69
	Excess tax benefits from stock options exercised and restricted stock awards vested					385				33
	Repurchase of stock					(3,010	)			(1,895	)
	Net cash (used in) provided by financing activities					(1,858	)			891
Net increase in cash and cash equivalents						16,256				3,069
Cash and cash equivalents, beginning of period						3,159				13
Cash and cash equivalents, end of period					$	19,415			$	3,082