AAON Reports Higher Sales and Earnings and Declares Dividends

TULSA, OK--(Marketwire - Nov 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.

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, 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

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