AAON Reports Record Sales and Earnings

Wed Aug 8, 2012 7:00am EDT

* Reuters is not responsible for the content in this press release.

  TULSA, OK, Aug 08 (Marketwire) -- 
AAON, Inc. (NASDAQ: AAON), today announced its operating results for the
second quarter and six-month period ended June 30, 2012.

    Sales and earnings during the second quarter were record highs for any
quarter in the Company's 24-year history.

    Revenues in the quarter were $83.3 million, up 21% from $69.1 million in
2011. Net income was $9.3 million, up 142% from $3.8 million in the same
period a year ago. Net sales for the first six months of 2012 were also a
record for any six-month period, $148.3 million, up 15% compared to
$129.0 million in 2011. Earnings for the six months ended June 30, 2012,
were $13.9 million, up 85% compared to $7.5 million in 2011.

    Earnings per diluted share in the second quarter of 2012 were $0.38, up
153% from $0.15 for the same period a year ago, based upon 24.7 million
and 24.9 million diluted shares outstanding for the three months ended
June 30, 2012, compared to June 30, 2011, respectively. Earnings per
diluted share were $0.56, up 87% from $0.30, based upon 24.8 million and
24.9 million diluted shares outstanding for the six months ended June 30,
2012, compared to June 30, 2011, respectively.

    Norman H. Asbjornson, President and CEO, stated, "The increases in
revenues primarily reflect gains in market share, while the much greater
increases in earnings for the second quarter and first half of 2012, were
attributable to significantly improved productivity due to our new sheet
metal fabrication equipment and revamped production lines, which resulted
in improvements of gross margins from 17.0% to 25.3% in the second
quarters of 2011 and 2012, respectively, and 18.1% to 23.3% for the
six-month periods ended June 30, 2011 and 2012. Our backlog at June 30,
2012, was $62.2 million compared to $59.7 million at the same time a year
ago."

    Mr. Asbjornson said that, "We are pleased with the results of the first
half of 2012, which were aided by extremely strong order input. However,
there are a number of uncertainties, particularly as to the level of
future order input, which make it difficult to forecast the business
climate AAON will encounter during the second 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 1-877-737-1669 (Code:
VA34474).

    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) (In thousands, except per share data)

                                  Three Months Ended      Six Month Ended
                                       June 30,              June 30,
                                 --------------------  -------------------- 
                                    2012       2011       2012       2011
                                 ---------  ---------  ---------  --------- 

Net sales                        $  83,333  $  69,076  $ 148,290  $ 128,989 
Cost of sales                       62,230     57,339    113,669    105,614 
                                 ---------  ---------  ---------  --------- 
Gross profit                        21,103     11,737     34,621     23,375 
Selling, general and
 administrative expenses             6,899      5,711     12,880     11,248 
(Gain) loss on disposal of
 assets                                 10        (14)       (13)        (8)
                                 ---------  ---------  ---------  --------- 
Income from operations              14,194      6,040     21,754     12,135 
Interest expense                       (11)      (104)       (27)      (114)
Interest income                          2         31         15         65 
Other income (expense), net            (51)       (65)        (3)      (568)
                                 ---------  ---------  ---------  --------- 
Income before income taxes          14,134      5,902     21,739     11,518 
Income tax provision                 4,837      2,063      7,875      4,029 
                                 ---------  ---------  ---------  --------- 
Net income                       $   9,297  $   3,839  $  13,864  $   7,489 
                                 =========  =========  =========  ========= 
Earnings per share
  Basic                          $    0.38  $    0.16  $    0.56  $    0.30 
                                 =========  =========  =========  ========= 
  Diluted                        $    0.38  $    0.15  $    0.56  $    0.30 
                                 =========  =========  =========  ========= 
Cash dividends declared per
 common share:                   $    0.12  $    0.12  $    0.12  $    0.12 
                                 =========  =========  =========  ========= 
Weighted average shares
 outstanding:
  Basic                             24,552     24,715     24,570     24,730 
                                 =========  =========  =========  ========= 
  Diluted                           24,728     24,923     24,750     24,931 
                                 =========  =========  =========  ========= 

                        AAON, Inc., and Subsidiaries
                        Consolidated Balance Sheets
         (Unaudited) (In thousands, except share and per share data)

                                                     June 30,   December 31,
                                                       2012         2011
                                                   ------------ ------------
Assets
Current assets:
  Cash and cash equivalents                        $      3,082 $         13
  Certificates of deposit                                 2,259            -
  Investments held to maturity at amortized cost          1,254            -
  Accounts receivable, net                               52,087       34,137
  Income tax receivable                                     197       10,016
  Note receivable                                            27           27
  Inventories, net                                       39,142       34,948
  Prepaid expenses and other                                814          723
  Deferred tax assets                                     4,330        4,523
                                                   ------------ ------------
Total current assets                                    103,192       84,387
Property, plant and equipment:
  Land                                                    1,340        1,340
  Buildings                                              58,757       56,057
  Machinery and equipment                               116,255      114,256
  Furniture and fixtures                                  8,318        7,784
                                                   ------------ ------------
    Total property, plant and equipment                 184,670      179,437
    Less: Accumulated depreciation                       91,472       85,935
                                                   ------------ ------------
  Property, plant and equipment, net                     93,198       93,502
  Certificates of deposit                                 2,015            -
  Investments held to maturity at amortized cost          4,079            -
Note receivable, long-term                                1,070        1,092
                                                   ------------ ------------
Total assets                                       $    203,554 $    178,981
                                                   ============ ============
Liabilities and Stockholders' Equity
Current liabilities:
  Revolving credit facility                               7,259        4,575
  Accounts payable                                       16,978       14,118
  Dividends payable                                       2,950            -
  Accrued liabilities                                    27,656       19,994
                                                   ------------ ------------
Total current liabilities                                54,843       38,687
Deferred tax liabilities                                 16,722       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, 24,543,861 and 24,618,324 issued and
 outstanding at June 30, 2012 and December 31,
 2011, respectively                                          98           98
  Retained earnings                                     131,891      122,406
                                                   ------------ ------------
Total stockholders' equity                              131,989      122,504
                                                   ------------ ------------
Total liabilities and stockholders' equity         $    203,554 $    178,981
                                                   ============ ============

                        AAON, Inc., and Subsidiaries
                    Consolidated Statements of Cash Flows
                         (Unaudited) (In thousands)

                                                       Six Months Ended
                                                           June 30,
                                                   ------------------------ 
                                                       2012         2011
                                                   -----------  ----------- 
Operating Activities
  Net income                                       $    13,864  $     7,489 

    Adjustments to reconcile net income to net
     cash provided by operating activities:
      Depreciation                                       6,747        5,449 
      Amortization of bond premiums                         20          137 
      Provision for losses on accounts receivable,
       net of adjustments                                   (1)        (106)
      Share-based compensation                             364          346 
      Excess tax benefits from stock options
       exercised and restricted stock awards
       vested                                              (33)         (77)
      Gain on disposition of assets                        (13)          (8)
      Foreign currency transaction (gain)losses              7          (59)
      Deferred income taxes                               (875)         314 
      Changes in assets and liabilities:
        Accounts receivable                            (17,949)      (2,687)
        Income tax receivable                            5,801            - 
        Inventories                                     (4,194)     (11,709)
        Prepaid expenses and other                         (91)         234 
        Accounts payable                                 4,215       10,957 
        Accrued liabilities                             11,714         (105)
                                                   -----------  ----------- 
  Net cash provided by operating activities             19,576       10,175 
                                                   -----------  ----------- 

Investing Activities
  Proceeds from sale of property, plant and
   equipment                                               306           49 
  Investment in certificates of deposits                (4,274)           - 
  Maturities of certificates of deposits                     -        1,263 
  Purchases of investments held to maturity             (5,624)           - 
  Maturities of investments                                  -        7,055 
  Proceeds from called investment                          270            - 
  Capital expenditures                                  (8,091)     (24,907)
  Principal payments from note receivable                   15           14 
                                                   -----------  ----------- 
  Net cash used in investing activities                (17,398)     (16,526)
                                                   -----------  ----------- 

Financing Activities
  Borrowings under revolving credit facility            27,108       36,231 
  Payments under revolving credit facility             (24,424)     (28,603)
  Stock options exercised                                   69          132 
  Excess tax benefits from stock options exercised
   and restricted stock awards vested                       33           77 
  Repurchases of stock                                  (1,895)      (1,779)
  Cash dividends paid to stockholders                        -           (9)
                                                   -----------  ----------- 
  Net cash provided by financing activities                891        6,049 
                                                   -----------  ----------- 
Net increase (decrease) in cash and cash
 equivalents                                             3,069         (302)
                                                   -----------  ----------- 
Cash and cash equivalents, beginning of year                13        2,393 
                                                   -----------  ----------- 
Cash and cash equivalents, end of period           $     3,082  $     2,091 
                                                   ===========  =========== 


    


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

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