SOURCE: AAON

March 12, 2008 07:00 ET

AAON Reports Record Sales and Earnings

TULSA, OK--(Marketwire - March 12, 2008) - AAON, Inc. (NASDAQ: AAON) today announced its operating results for the year 2007. Sales increased 13% to $262.5 million from $231.5 million in 2006, and net income increased 36% to $23.2 million compared to $17.1 million in the previous year. Both sales and net income were all-time record highs.

Norman H. Asbjornson, President and CEO, stated that, "The increase in sales was attributable to an increase in volume of products sold as a result of an improvement of the commercial and industrial construction industry, an increased demand for the Company's new and redesigned products, and price increases during 2007. The increase in earnings resulted from both higher volume and price increases, which provided an improvement in gross margins."

Sales in the fourth quarter of 2007 increased to $62.1 million, up 14% from $54.6 million in 2006, and net income for the fourth quarter increased to $4.6 million, compared to $4.5 million in 2006. Sales and net income were the highest for any fourth quarter in the Company's history.

Earnings per diluted share for 2007 were $1.22 compared to $0.90 in 2006. Earnings for the fourth quarters of 2007 and 2006 were $0.24 per diluted share.

Mr. Asbjornson said, "While we expect record sales and earnings in the first quarter of 2008, due to uncertain market conditions it is too early to predict outcomes for the balance of this year."

AAON, Inc. is a manufacturer of air-conditioning and heating equipment consisting of rooftop units, chillers, air-handling units, condensing 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.

The Company will host a conference call today at 4:15 P.M. ET to discuss year 2007 and the fourth quarter results. To participate, call 1-877-852-6579.

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



                           Three Months Ended       Twelve Months Ended
                        December 31, December 31, December 31, December 31,
                            2007         2006         2007         2006
                        -----------  -----------  -----------  -----------
                          (in thousands, except share and per share data)

Net sales               $    62,147  $    54,550  $   262,517  $   231,460

Cost of sales                49,738       44,754      205,148      187,570
                        -----------  -----------  -----------  -----------

   Gross profit              12,409        9,796       57,369       43,890

Selling, general and
 administrative expenses      5,194        2,678       21,703       18,059
                        -----------  -----------  -----------  -----------

   Income from operations     7,215        7,118       35,666       25,831

Interest expense                  -          (23)         (10)         (81)

Interest income                   1            -            8           24

Other income (expense),
 net                           (245)           3         (321)         424
                        -----------  -----------  -----------  -----------

Income before income
 taxes                        6,971        7,098       35,343       26,198

Income tax provision          2,391        2,560       12,187        9,065
                        -----------  -----------  -----------  -----------

   Net income           $     4,580  $     4,538  $    23,156  $    17,133
                        ===========  ===========  ===========  ===========

Earnings per share:
   Basic*               $      0.25  $      0.25  $      1.24  $      0.93
                        ===========  ===========  ===========  ===========
   Diluted*             $      0.24  $      0.24  $      1.22  $      0.90
                        ===========  ===========  ===========  ===========

Weighted average shares
 outstanding:
   Basic*                18,518,216   18,456,437   18,628,029   18,456,108
                        ===========  ===========  ===========  ===========
   Diluted*              18,767,701   18,929,086   18,927,044   18,967,594
                        ===========  ===========  ===========  ===========

* Reflects three-for-two stock split effective August 21, 2007.






                       AAON, Inc., and Subsidiaries
                        Consolidated Balance Sheets



                                                December 31,  December 31,
                                                    2007          2006
                                                ------------- -------------
                                                (in thousands, except share
                                                    and per share data)
Assets
Current assets:
   Cash and cash equivalents                    $         879 $         288
   Accounts receivable, net                            38,813        36,748
   Inventories, net                                    31,849        29,502
   Prepaid expenses and other                             442           267
   Deferred tax asset                                   4,312         3,954
                                                ------------- -------------
Total current assets                                   76,295        70,759
                                                ------------- -------------
Property, plant and equipment
   Land                                                 2,354         2,196
   Buildings                                           32,211        31,272
   Machinery and equipment                             82,872        74,053
   Furniture and fixtures                               6,912         5,883
                                                ------------- -------------
      Total property, plant and equipment             124,349       113,404
      Less:  Accumulated depreciation                  63,579        54,182
                                                ------------- -------------
Property, plant and equipment, net                     60,770        59,222
Note receivable, long-term                                 75            75
                                                ------------- -------------
Total assets                                    $     137,140 $     130,056
                                                ============= =============

Liabilities & Stockholders' Equity
Current liabilities:
   Current maturities of long-term debt         $          91 $          59
   Accounts payable                                    15,059        15,821
   Dividends payable                                    2,943         2,465
   Accrued liabilities                                 19,414        16,058
                                                ------------- -------------
Total current liabilities                              37,507        34,403

Other long-term liabilities                               239             -
Deferred tax liability                                  3,974         4,061

Commitments and contingencies

Stockholders’ equity:
   Preferred stock, $.001 par value, 7,500,000
    shares authorized, no shares issued*
   Common stock, $.004 par value, 75,000,000
    shares authorized, 18,054,246 and
    18,508,248 issued and outstanding at
    December 31, 2007 and 2006, respectively*              73            74
   Additional paid-in capital                               -           185
   Accumulated other comprehensive income               1,942           667
   Retained earnings                                   93,405        90,666
                                                ------------- -------------
Total stockholders' equity                             95,420        91,592
                                                ------------- -------------
Total liabilities and stockholders' equity      $     137,140 $     130,056
                                                ============= =============

* Reflects three-for-two stock split effective August 21, 2007.





                       AAON, Inc., and Subsidiaries
                  Consolidated Statements of Cash Flows



                                                   Twelve        Twelve
                                                Months Ended  Months Ended
                                                December 31,  December 31,
                                                    2007          2006
                                                ------------  ------------
                                                      (in thousands)
OPERATING ACTIVITIES
  Net income                                    $     23,156  $     17,133
   Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation                                     9,665         9,146
      Provision for losses on accounts
       receivable                                        203           (59)
       Share-based compensation                          582           500
      Excess tax benefits from stock options
       exercised                                      (2,998)       (1,852)
      Gain on disposition of assets                     (108)            -
      Deferred income taxes                             (124)         (510)
      Changes in assets and liabilities:
        Accounts receivable                           (1,760)       (4,197)
        Inventories, net                              (2,095)       (5,790)
        Prepaid expenses and other                      (172)          776
        Accounts payable                              (1,370)        4,178
        Accrued liabilities                            6,268           103
                                                ------------  ------------
  Net cash provided by operating activities           31,247        19,428


INVESTING ACTIVITIES
  Proceeds from sale of property, plant and
   equipment                                             123             -
  Proceeds from matured certificate of deposit             -         3,000
  Investment in certificate of deposit                     -        (2,000)
  Capital expenditures                               (10,874)      (17,781)
                                                ------------  ------------
  Net cash used in investing activities              (10,751)      (16,781)


FINANCING ACTIVITIES
  Borrowings under revolving credit facility          12,142        53,706
  Payments under revolving credit facility           (12,142)      (53,706)
  Borrowings (payments) of long-term debt                271          (108)
  Stock options exercised                              2,426         1,256
  Excess tax benefits from stock options
   exercised                                           2,998         1,852
  Repurchase of stock                                (20,773)       (3,855)
  Cash dividends paid to stockholders                 (4,958)       (2,478)
                                                ------------  ------------
  Net cash used in financing activities              (20,036)       (3,333)
                                                ------------  ------------
Effect of exchange rate on cash                          131           137
                                                ------------  ------------
Net increase (decrease) in cash and cash
 equivalents                                             591          (549)
                                                ------------  ------------
Cash and cash equivalents, beginning of year             288           837
                                                ------------  ------------
Cash and cash equivalents, end of year          $        879  $        288
                                                ============  ============

Contact Information

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