AAON Reports Higher Sales and Earnings and Declares Dividends

Thu Nov 8, 2012 7:00am EST

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

  TULSA, OK, Nov 08 (Marketwire) -- 
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.

                        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 
                                 =========  =========  =========  ========= 

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

                                                 September 30,  December 31,
                                                      2012          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
                                                 ============= =============

                        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 
                                                       =========  ========= 


    


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

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