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8-K - 8-K - AAON, INC.aaon_8k110812.htm
Exhibit 99.1
 
NEWS
BULLETIN
   AAON, Inc.
       2425 South Yukon Ave.Tulsa, OK 74107-2728
• Ph: (918) 583-2266   •   Fax:  (918) 583-6094 •
•http://www.aaon.com•
     
 FOR IMMEDIATE RELEASE
November 8, 2012
 
For Further Information:
Jerry R. LevinePhone: (914) 244-0292 • Fax: (914) 244-0295
Email: jrladvisor@yahoo.com
        
AAON REPORTS HIGHER SALES AND EARNINGS
                 AND DECLARES DIVIDENDS

Tulsa, OK, November 8, 2012 – AAON, Inc. (NASDAQ-AAON), today announced its operating results for the third quarter and nine-month period ended September 30, 2012, and declares dividends.

In the quarter, net sales increased 4% to $76.8 million from $73.8 million in 2011, and net income increased 7% to $6.0 million from $5.6 million last year. Earnings per diluted share were $0.24, up 4% from $0.23 for the same  period a year ago, based upon 24.7 million and 24.8 million diluted shares outstanding for the three months ended September 30, 2012, compared to September 30, 2011, respectively.  Of note, the Company’s combined income tax rate in the third quarter of 2012 totaled 43% compared to a rate of 35% in 2011. Income taxes for the full year 2012 are expected to be approximately 37%.

Net sales for the first nine months of 2012 increased 11% to a record $225.1 million from $202.8 million in 2011, and net income increased 52% to $19.9 million from $13.1 million. Earnings per diluted share were $0.80, up 51% from $0.53, based upon 24.7 million and 24.9 million diluted shares outstanding for the nine months ended September 30, 2012 compared to September 30, 2011, respectively.

The Company realized a 241% increase in cash flow from operations during the first nine months of 2012, which enabled it to pay off its revolving credit loan of $4.6 million and to accumulate cash and investments totaling $15.5 million.

Norman H. Asbjornson, President and CEO, stated, “The increases in revenues primarily reflect gains in market share, while the increases in earnings for the third quarter and first nine months of 2012 were attributable to improved productivity, which resulted in increased gross margins from 19.3% to 22.3% in the third quarters of 2011 and 2012, respectively, and from 18.6% to 23.0% for the nine-month periods ended September 30, 2011 and 2012. Our backlog at September 30, 2012 was $55.3 million compared to $54.1 million at the same time a year ago.”

At a meeting of the Board of Directors on November 7, 2012, the Board declared a regular semi-annual cash dividend of $0.12 per share.  Mr. Asbjornson said, “In view of our strong financial position, the Board also declared a one-time special cash dividend of $0.12 per share.”  Both dividends will be paid to the holders of the outstanding Common Stock of the Company as of the close of business on December 3, 2012, the record date, payable December 24, 2012.

Mr. Asbjornson said that, “We are very pleased with the results of the first nine months of 2012, particularly in light of the difficult existing market conditions, and anticipate an above average fourth quarter.”

The Company will host a conference call today at 4:15 P.M. ET to discuss the third quarter results.
To participate, call 1-877-737-1669 (Code: VA32741).

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.

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AAON, Inc., and Subsidiaries
Consolidated Statements of Income
(Unaudited) (In thousands, except per share data)

   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2012
   
2011
   
2012
   
2011
 
       
Net sales
  $ 76,816     $ 73,829     $ 225,106     $ 202,818  
Cost of sales
    59,667       59,570       173,336       165,184  
Gross profit
    17,149       14,259       51,770       37,634  
Selling, general and administrative expenses
    6,747       5,451       19,627       16,699  
Gain on disposal of assets
    4       6       17       14  
Income from operations
    10,406       8,814       32,160       20,949  
Interest expense
    (16 )     (59 )     (43 )     (173 )
Interest income
    40       22       55       87  
Other income (expense), net
    53       (122 )     50       (690 )
Income before income taxes
    10,483       8,655       32,222       20,173  
Income tax provision
    4,476       3,029       12,351       7,058  
Net income
  $ 6,007     $ 5,626     $ 19,871     $ 13,115  
Earnings per share
                               
Basic
  $ 0.24     $ 0.23     $ 0.81     $ 0.53  
Diluted
  $ 0.24     $ 0.23     $ 0.80     $ 0.53  
Cash dividends declared per common share:
  $ 0.00     $ 0.00     $ 0.12     $ 0.12  
Weighted average shares outstanding:
                               
Basic
    24,535       24,667       24,558       24,708  
Diluted
    24,667       24,844       24,722       24,902  
 
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AAON, Inc., and Subsidiaries
Consolidated Balance Sheets
(Unaudited) (In thousands, except share and per share data)

   
September 30,
2012
   
December 31,
2011
 
Assets
           
Current assets:
           
Cash and cash equivalents
  $ 7,017     $ 13  
Certificates of deposit
    1,200       -  
Investments held to maturity at amortized cost
    2,077       -  
Accounts receivable, net
    42,371       34,137  
Income tax receivable
    2,313       10,016  
Note receivable
    28       27  
Inventories, net
    37,650       34,948  
Prepaid expenses and other
    575       723  
Deferred tax assets
    4,063       4,523  
Total current assets
    97,294       84,387  
Property, plant and equipment:
               
Land
    1,340       1,340  
Buildings
    59,615       56,057  
Machinery and equipment
    117,648       114,256  
Furniture and fixtures
    8,415       7,784  
Total property, plant and equipment
    187,018       179,437  
Less:  Accumulated depreciation
    94,384       85,935  
Property, plant and equipment, net
    92,634       93,502  
Certificates of deposit
    2,020       -  
Investments held to maturity at amortized cost
    3,195       -  
Note receivable, long-term
    1,111       1,092  
Total assets
  $ 196,254     $ 178,981  
Liabilities and Stockholders’ Equity
               
Current liabilities:
               
Revolving credit facility
    -       4,575  
Accounts payable
    13,720       14,118  
Accrued liabilities­
    29,200       19,994  
Total current liabilities
    42,920       38,687  
Deferred tax liabilities
    16,343       17,790  
Commitments and contingencies
               
Stockholders’ equity:
               
Preferred stock, $.001 par value, 11,250,000 shares authorized,
    no shares issued
    -       -  
Common stock, $.004 par value, 112,500,000 shares authorized,
    24,537,657 and 24,618,324 issued and outstanding at September
    30, 2012 and December 31, 2011, respectively
    98       98  
Additional paid-in capital
    249       -  
Retained earnings
    136,644       122,406  
Total stockholders’ equity
    136,991       122,504  
Total liabilities and stockholders’ equity
  $ 196,254     $ 178,981  
 
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AAON, Inc., and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited) (In thousands)

   
Nine Months Ended
 
   
September 30,
 
   
2012
   
2011
 
Operating Activities
           
Net income
  $ 19,871     $ 13,115  
                 
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation
    10,079       8,174  
Amortization of bond premiums
    80       155  
Provision for losses on accounts receivable, net of adjustments
    (7 )     (242 )
Share-based compensation
    625       509  
Excess tax benefits from stock options exercised and restricted stock awards vested
    (267 )     (176 )
Gain on disposition of assets
    (17 )     (14 )
Foreign currency transaction gain
    (40 )     -  
Deferred income taxes
    (987 )     (48 )
Changes in assets and liabilities:
               
Accounts receivable
    (8,227 )     61  
Income tax receivable
    5,801       -  
Inventories
    (2,702 )     (8,654 )
Prepaid expenses and other
    148       (194 )
Accounts payable
    2,681       (2,281 )
Accrued liabilities
    11,375       870  
Net cash provided by operating activities
    38,413       11,275  
                 
Investing Activities
               
Proceeds from sale of property, plant and equipment
    311       55  
Investment in certificates of deposits
    (4,280 )     -  
Maturities of certificates of deposits
    1,060       1,503  
Purchases of investments held to maturity
    (5,624 )     -  
Maturities of investments
    -       8,793  
Proceeds from called investment
    270       -  
Capital expenditures
    (12,582 )     (30,638 )
Principal payments from note receivable
    20       21  
Net cash used in investing activities
    (20,825 )     (20,266 )
                 
Financing Activities
               
Borrowings under revolving credit facility
    34,847       66,557  
Payments under revolving credit facility
    (39,422 )     (52,592 )
Stock options exercised
    1,053       373  
Excess tax benefits from stock options exercised and restricted stock awards vested
    267       176  
Repurchases of stock
    (4,379 )     (2,662 )
Cash dividends paid to stockholders
    (2,950 )     (2,976 )
Net cash (used) provided by financing activities
    (10,584 )     8,876  
Net increase (decrease) in cash and cash equivalents
    7,004       (115 )
Cash and cash equivalents, beginning of year
    13       2,393  
Cash and cash equivalents, end of period
  $ 7,017     $ 2,278  
 
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