SOURCE: AAON

AAON

August 07, 2014 07:00 ET

AAON Reports Sales and Earnings

TULSA, OK--(Marketwired - Aug 7, 2014) - AAON, Inc. (NASDAQ: AAON) today announced its operating results for the second quarter and six months ended June 30, 2014. 

Net sales in the second quarter were a record $92.3 million, up 1.2% from $91.2 million in 2013. Net income was $11.4 million, down (6.2)% from $12.1 million in the same period a year ago. Net sales and net income for the six-month period ended June 30, 2014 were records for the first half of any year in the Company's history, with sales of $168.7 million, up 6.7% from $158.1 million in 2013, and income of $21.2 million, up 10.0% compared to $19.3 million in 2013.

Earnings per diluted share in the second quarter of 2014 were $0.20, down (9.1)% from $0.22 for the same period the previous year, based upon 55.6 million and 55.7 million shares outstanding at June 30, 2014 and 2013, respectively. Earnings per diluted share were $0.38, up 8.6% from $0.35, in the six months ended June 30, 2014 and 2013, respectively, based upon 55.6 million diluted shares outstanding for both periods. All per share earnings and shares reflect the three-for-two stock split effective July 16, 2014. 

Norman H. Asbjornson, President and CEO, stated, "The second quarter increase in sales primarily reflects price increases. Gross profit as a percent of sales remained steady at 30.2% compared to 30.3% a year ago. SG&A expense as a percent of sales increased 1.5% (from 10.0% to 11.5%), primarily due to a one-time donation of cash and equipment totaling $1.0 million made in the quarter toward rebuilding of the Tulsa Central Library."

Mr. Asbjornson continued, "The Company's balance sheet at June 30, 2014, was very strong, showing a current ratio of 2.9:1 (including cash and short-term investments totaling $45.6 million), plus long-term marketable investments of $11.7 million, and we remained debt-free. Additionally, our backlog increased from $66.2 million at June 30, 2013 to $67.1 million at June 30, 2014." 

Mr. Asbjornson then said, "Based on the first half year's results, our backlog and other relevant factors, we expect 2014 to surpass last year's record sales and earnings."

The Company will host a conference call today at 4:15 P.M. Eastern Time to discuss the second quarter results. To participate, call 1-866-222-0265; or, for rebroadcast, call 1-866-245-6755 (code 236665).

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
 June 30,
    Six Months Ended
 June 30,
 
    2014   2013     2014     2013  
    (in thousands, except share and per share data)              
Net sales   $ 92,310   $ 91,241     $ 168,677     $ 158,074  
Cost of sales     64,434     63,565       118,955       115,086  
Gross profit     27,876     27,676       49,722       42,988  
Selling, general and administrative expenses     10,584     9,089       18,213       16,056  
Gain on disposal of assets     --     (59 )     (24 )     (52 )
Income from operations     17,292     18,646       31,533       26,984  
Interest income     71     57       140       91  
Other income, net     34     253       13       237  
Income before taxes     17,397     18,956       31,686       27,312  
Income tax provision     6,034     6,837       10,501       8,053  
Net income   $ 11,363   $ 12,119     $ 21,185     $ 19,259  
Earnings per share:                              
  Basic*   $ 0.21   $ 0.22     $ 0.38     $ 0.35  
  Diluted*   $ 0.20   $ 0.22     $ 0.38     $ 0.35  
Cash dividends declared per common share*:   $ 0.09   $ 0.07     $ 0.09     $ 0.07  
Weighted average shares outstanding:                              
  Basic*     55,004,175     55,139,577       55,036,281       55,140,260  
  Diluted*     55,568,212     55,725,393       55,603,979       55,584,302  
*Reflects three-for-two stock split effective July 16, 2014
 
 
 
AAON, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
 
    June 30, 2014   December 31, 2013
Assets   (in thousands, except share and per share data)
Current assets:        
  Cash and cash equivalents   $ 16,484   $ 12,085
  Certificates of deposit     10,064     8,110
  Investments held to maturity at amortized cost     19,097     16,040
  Accounts receivable, net     52,895     39,063
  Income tax receivable     --     1,073
  Note receivable     29     29
  Inventories, net     36,608     32,140
  Prepaid expenses and other     829     304
  Deferred tax assets     5,895     4,779
Total current assets     141,901     113,623
Property, plant and equipment:            
  Land     2,233     1,417
  Buildings     63,164     61,821
  Machinery and equipment     121,909     119,439
  Furniture and fixtures     10,136     9,748
    Total property, plant and equipment     197,442     192,425
    Less: Accumulated depreciation     110,277     105,142
  Property, plant and equipment, net     87,165     87,283
Certificates of deposit     6,000     2,638
Investments held to maturity at amortized cost     5,682     10,981
Note receivable     904     919
Total assets   $ 241,652   $ 215,444
             
Liabilities and Stockholders' Equity            
Current liabilities:            
  Revolving credit facility   $ --   $ --
  Accounts payable     10,904     7,779
  Dividends payable     4,779     --
  Accrued liabilities     33,857     28,550
Total current liabilities     49,540     36,329
Deferred revenue     841     585
Deferred tax liabilities     13,579     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, 100,000,000 shares authorized, 55,049,445 and 55,067,031 issued and outstanding at June 30, 2014 and December 31, 2013, respectively*     220     221
Additional paid-in capital     --     --
Retained earnings     177,472     163,885
Total stockholders' equity     177,692     164,106
Total liabilities and stockholders' equity   $ 241,652   $ 215,444
*Reflects three-for-two stock split effective July 16, 2014
 
   
   
AAON, Inc. and Subsidiaries  
Consolidated Statements of Cash Flows  
(Unaudited)  
   
    Six Months Ended
 June 30,
 
    2014     2013  
Operating Activities   (in thousands)  
  Net income   $ 21,185     $ 19,259  
  Adjustments to reconcile net income to net cash provided by operating activities:                
    Depreciation     5,719       6,268  
    Amortization of bond premiums     389       304  
    Provision for losses on accounts receivable, net of adjustments     (8 )     102  
    Provision for excess and obsolete inventories, net     156       201  
    Share-based compensation     984       695  
    Excess tax benefits from stock options exercised and restricted stock awards vested     (680 )     (385 )
    Gain on disposition of assets     (24 )     (52 )
    Foreign currency transaction gain     --       43  
    Interest income on note receivable     (20 )     (20 )
    Deferred income taxes     (1,961 )     (1,966 )
    Write-off of note receivable     --       75  
    Changes in assets and liabilities:                
      Accounts receivable     (13,824 )     (6,344 )
      Income tax receivable     1,753       3,942  
      Inventories     (4,624 )     (1,718 )
      Prepaid expenses and other     (525 )     (160 )
      Accounts payable     3,422       1,101  
      Deferred revenue     378       201  
      Accrued liabilities     5,185       6,194  
  Net cash provided by operating activities     17,505       27,740  
Investing Activities                
  Capital expenditures     (5,903 )     (1,949 )
  Proceeds from sale of property, plant and equipment     29       60  
  Investment in certificates of deposits     (9,220 )     (958 )
  Maturities of certificates of deposits     3,904       1,440  
  Purchases of investments held to maturity     (5,955 )     (9,969 )
  Maturities of investments     6,539       1,710  
  Proceeds from called investment     1,269       --  
  Principal payments from note receivable     35       40  
  Net cash used in investing activities     (9,302 )     (9,626 )
Financing Activities                
  Borrowings under revolving credit facility     --       2,321  
  Payments under revolving credit facility     --       (2,321 )
  Stock options exercised     632       767  
  Excess tax benefits from stock options exercised and restricted stock awards vested     680       385  
  Repurchase of stock     (5,116 )     (3,010 )
  Net cash used in financing activities     (3,804 )     (1,858 )
Net increase in cash and cash equivalents     4,399       16,256  
Cash and cash equivalents, beginning of period     12,085       3,159  
Cash and cash equivalents, end of period   $ 16,484     $ 19,415  
                 

Contact Information

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