TULSA, OK--(Marketwired - November 02, 2015) - AAON, Inc. (
In the quarter, net sales were $94.4 million, down 8.3% from $102.9 million in 2014. Net income was $13.3 million, up 6.5% from $12.4 million in the same period a year ago. Net sales for the nine-month period ended September 30, 2015 were $261.4 million, down 3.8% from $271.6 million in 2014. Net income for the nine-month period ended September 30, 2015 was $32.8 million, down 2.5% from $33.6 million in 2014.
Earnings per diluted share in the third quarter of 2015 were $0.24, up 9.1% from $0.22 for the same period the previous year, based upon 54.6 million and 55.5 million shares outstanding at September 30, 2015 and 2014, respectively. Earnings per diluted share for the nine-month period ended September 30, 2015 were $0.60, down 1.6% from $0.61 in 2014, based upon 54.6 million and 55.4 million shares outstanding at September 30, 2015 and 2014, respectively.
Norman H. Asbjornson, President and CEO, stated, "Despite the continuing unstable economic environment which negatively impacted our sales, we were able to maintain our gross profit margins, aided by improved productivity and level raw material costs. Our gross profit for the quarter was 32.0% of sales compared to 32.4% of sales a year ago, and for the nine month period ended September 30, 2015, stood at 30.3% versus 30.6% for the corresponding period in 2014."
Mr. Asbjornson further added, "Our SG&A expense as a percentage of sales declined from 13.4% to 10.7% for the quarter, and for the nine month period decreased from 11.8% to 10.6%. Total SG&A expense benefited from lower salaries and benefits along with the absence of non-recurring charitable contributions made in 2014."
Mr. Asbjornson continued, "Our financial condition at September 30, 2015 remained quite strong with a current ratio of 3.4:1 (including cash and short-term investments totaling $48.9 million), plus long term marketable investments of $13.2 million. We also remain debt free. Our backlog at September 30, 2015 increased 10.2% to $60.4 million, from $54.8 million for the same period a year ago."
Mr. Asbjornson concluded, "We have made important changes and additions to our product line which will be introduced in 2016. Furthermore, we have added new sales personnel who should contribute to next year's sales and earnings. While we expect results to remain relatively flat for the remainder of 2015, we look forward to resuming our growth in 2016 and beyond."
The Company will host a conference call today at 4:15 P.M. Eastern Time to discuss the third quarter results. To participate, call 1-888-241-0551 (code 62745780); or, for rebroadcast, call 1-855-859-2056 (code 62745780).
AAON, Inc. is a manufacturer of air conditioning and heating equipment consisting of rooftop units, chillers, packaged outdoor mechanical rooms, air handling units, makeup air units, energy recovery units, condensing units, 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 September 30, |
Nine Months Ended September 30, |
||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||||
| Net sales | $ | 94,360 | $ | 102,917 | $ | 261,403 | $ | 271,594 | |||||||||
| Cost of sales | 64,175 | 69,567 | 182,303 | 188,522 | |||||||||||||
| Gross profit | 30,185 | 33,350 | 79,100 | 83,072 | |||||||||||||
| Selling, general and administrative expenses | 10,062 | 13,830 | 27,579 | 32,043 | |||||||||||||
| Gain on disposal of assets | (34 | ) | - | (59 | ) | (24 | ) | ||||||||||
| Income from operations | 20,157 | 19,520 | 51,580 | 51,053 | |||||||||||||
| Interest income | 14 | 55 | 87 | 195 | |||||||||||||
| Other expense, net | (58 | ) | (43 | ) | (106 | ) | (30 | ) | |||||||||
| Income before taxes | 20,113 | 19,532 | 51,561 | 51,218 | |||||||||||||
| Income tax provision | 6,862 | 7,092 | 18,781 | 17,593 | |||||||||||||
| Net income | $ | 13,251 | $ | 12,440 | $ | 32,780 | $ | 33,625 | |||||||||
| Earnings per share: | |||||||||||||||||
| Basic | $ | 0.24 | $ | 0.23 | $ | 0.61 | $ | 0.61 | |||||||||
| Diluted | $ | 0.24 | $ | 0.22 | $ | 0.60 | $ | 0.61 | |||||||||
| Cash dividends declared per common share: | $ | - | $ | - | $ | 0.11 | $ | 0.09 | |||||||||
| Weighted average shares outstanding: | |||||||||||||||||
| Basic | 54,209,942 | 54,905,288 | 54,160,649 | 54,851,911 | |||||||||||||
| Diluted | 54,579,590 | 55,484,043 | 54,623,163 | 55,423,294 | |||||||||||||
| AAON, Inc. and Subsidiaries | ||||||||
| Consolidated Balance Sheets | ||||||||
| (Unaudited) | ||||||||
| September 30, 2015 | December 31, 2014 | |||||||
| Assets | (in thousands, except share and per share data) | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 29,863 | $ | 21,952 | ||||
| Certificates of deposit | 10,800 | 6,098 | ||||||
| Investments held to maturity at amortized cost | 8,266 | 11,972 | ||||||
| Accounts receivable, net | 45,825 | 44,092 | ||||||
| Income tax receivable | 2,172 | 2,569 | ||||||
| Note receivable | 24 | 30 | ||||||
| Inventories, net | 41,052 | 37,618 | ||||||
| Prepaid expenses and other | 763 | 609 | ||||||
| Deferred tax assets | 6,155 | 6,143 | ||||||
| Total current assets | 144,920 | 131,083 | ||||||
| Property, plant and equipment: | ||||||||
| Land | 2,233 | 2,233 | ||||||
| Buildings | 67,580 | 64,938 | ||||||
| Machinery and equipment | 136,952 | 127,968 | ||||||
| Furniture and fixtures | 10,746 | 10,388 | ||||||
| Total property, plant and equipment | 217,511 | 205,527 | ||||||
| Less: Accumulated depreciation | 121,215 | 113,605 | ||||||
| Property, plant and equipment, net | 96,296 | 91,922 | ||||||
| Certificates of deposit | 2,120 | 5,280 | ||||||
| Investments held to maturity at amortized cost | 11,072 | 4,015 | ||||||
| Note receivable | 690 | 817 | ||||||
| Total assets | $ | 255,098 | $ | 233,117 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Revolving credit facility | $ | - | $ | - | ||||
| Accounts payable | 7,759 | 11,370 | ||||||
| Accrued liabilities | 34,482 | 31,343 | ||||||
| Total current liabilities | 42,241 | 42,713 | ||||||
| Deferred revenue | 689 | 1,006 | ||||||
| Deferred tax liabilities | 12,689 | 13,677 | ||||||
| Donations | 1,108 | 1,662 | ||||||
| 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, 54,139,246 and 54,041,829 | 217 | 216 | ||||||
| issued and outstanding at September 30, 2015 and December 31, 2014, respectively | ||||||||
| Additional paid-in capital | - | - | ||||||
| Retained earnings | 198,154 | 173,843 | ||||||
| Total stockholders' equity | 198,371 | 174,059 | ||||||
| Total liabilities and stockholders' equity | $ | 255,098 | $ | 233,117 | ||||
| AAON, Inc. and Subsidiaries | |||||||||||
| Consolidated Statements of Cash Flows | |||||||||||
| (Unaudited) | |||||||||||
| Nine Months Ended September 30, |
|||||||||||
| 2015 | 2014 | ||||||||||
| Operating Activities | (in thousands) | ||||||||||
| Net income | $ | 32,780 | $ | 33,625 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation | 8,587 | 8,660 | |||||||||
| Amortization of bond premiums | 168 | 561 | |||||||||
| Provision for losses on accounts receivable, net of adjustments | (48 | ) | (59 | ) | |||||||
| Provision for excess and obsolete inventories, net | (111 | ) | 223 | ||||||||
| Share-based compensation | 2,076 | 1,578 | |||||||||
| Excess tax benefits from stock options exercised and restricted stock awards vested | (2,217 | ) | (908 | ) | |||||||
| Gain on disposition of assets | (59 | ) | (24 | ) | |||||||
| Foreign currency transaction loss | 114 | 36 | |||||||||
| Interest income on note receivable | (23 | ) | (30 | ) | |||||||
| Deferred income taxes | (1,000 | ) | (4,361 | ) | |||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable | (1,685 | ) | (15,663 | ) | |||||||
| Income tax receivable | 2,614 | 1,981 | |||||||||
| Inventories | (3,323 | ) | (5,323 | ) | |||||||
| Prepaid expenses and other | (154 | ) | (486 | ) | |||||||
| Accounts payable | (3,801 | ) | 5,982 | ||||||||
| Deferred revenue | 138 | 591 | |||||||||
| Accrued liabilities and donations | 2,130 | 12,761 | |||||||||
| Net cash provided by operating activities | 36,186 | 39,144 | |||||||||
| Investing Activities | |||||||||||
| Capital expenditures | (12,775 | ) | (13,567 | ) | |||||||
| Proceeds from sale of property, plant and equipment | 63 | 30 | |||||||||
| Investment in certificates of deposits | (6,200 | ) | (9,940 | ) | |||||||
| Maturities of certificates of deposits | 4,658 | 6,745 | |||||||||
| Purchases of investments held to maturity | (14,183 | ) | (6,880 | ) | |||||||
| Maturities of investments | 9,907 | 8,891 | |||||||||
| Proceeds from called investments | 757 | 2,525 | |||||||||
| Principal payments from note receivable | 42 | 52 | |||||||||
| Net cash used in investing activities | (17,731 | ) | (12,144 | ) | |||||||
| Financing Activities | |||||||||||
| Stock options exercised | 2,640 | 908 | |||||||||
| Excess tax benefits from stock options exercised and restricted stock awards vested | 2,217 | 908 | |||||||||
| Repurchase of stock | (9,436 | ) | (17,309 | ) | |||||||
| Cash dividends paid to stockholders | (5,965 | ) | (4,773 | ) | |||||||
| Net cash used in financing activities | (10,544 | ) | (20,266 | ) | |||||||
| Net increase in cash and cash equivalents | 7,911 | 6,734 | |||||||||
| Cash and cash equivalents, beginning of period | 21,952 | 12,085 | |||||||||
| Cash and cash equivalents, end of period | $ | 29,863 | $ | 18,819 | |||||||
Use of Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), additional non-GAAP financial measures are provided and reconciled in the following tables. The Company believes that these non-GAAP financial measures, when considered together with the GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results. The Company believes that these non-GAAP financial measures enhance the ability of investors to analyze the Company's business trends and operating performance.
EBITDAX
EBITDAX (as defined below) is presented herein and reconciled from the GAAP measure of net income because of its wide acceptance by the investment community as a financial indicator of a company's ability to internally fund operations.
The Company defines EBITDAX as net income, plus (1) depreciation, (2) amortization of bond premiums, (3) share-based compensation, (4) interest (income) expense and (5) income tax expense. EBITDAX is not a measure of net income or cash flows as determined by GAAP.
The Company's EBITDAX measure provides additional information which may be used to better understand the Company's operations. EBITDAX is one of several metrics that the Company uses as a supplemental financial measurement in the evaluation of its business and should not be considered as an alternative to, or more meaningful than, net income, as an indicator of operating performance. Certain items excluded from EBITDAX are significant components in understanding and assessing a company's financial performance. EBITDAX, as used by the Company, may not be comparable to similarly titled measures reported by other companies. The Company believes that EBITDAX is a widely followed measure of operating performance and is one of many metrics used by the Company's management team and by other users of the Company's consolidated financial statements.
The following table provides a reconciliation of net income (GAAP) to EBITDAX (non-GAAP) for the periods indicated:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net Income, a GAAP measure | $ | 13,251 | $ | 12,440 | $ | 32,780 | $ | 33,625 | ||||||||
| Depreciation | 2,988 | 2,941 | 8,587 | 8,660 | ||||||||||||
| Amortization of bond premiums | 62 | 172 | 168 | 561 | ||||||||||||
| Share-based compensation | 795 | 594 | 2,076 | 1,578 | ||||||||||||
| Interest (income) | (76 | ) | (227 | ) | (255 | ) | (756 | ) | ||||||||
| Income tax expense | 6,862 | 7,092 | 18,781 | 17,593 | ||||||||||||
| EBITDAX, a non-GAAP measure | $ | 23,882 | $ | 23,012 | $ | 62,137 | $ | 61,261 | ||||||||
Adjusted Net Income and Adjusted Earnings per Share
The Company defines Adjusted Net Income and the related per share amount as (1) net income, plus (2) non-recurring donations, less (3) the impact on profit sharing expense from the non-recurring donations and (4) the impact on income tax expense from the non-recurring donations. These measures provide additional information which may be used to better understand the Company's operations.
The following tables provide a reconciliation of net income and earnings per share-diluted (GAAP) to adjusted net income and adjusted earnings per share-diluted (non-GAAP) for the periods indicated:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (in thousands except per share data) | ||||||||||||||||
| Net Income, a GAAP measure | $ | 13,251 | $ | 12,440 | $ | 32,780 | $ | 33,625 | ||||||||
| Non-recurring donations | 390 | 2,845 | 195 | 3,845 | ||||||||||||
| Profit-sharing | (39 | ) | (284 | ) | (20 | ) | (384 | ) | ||||||||
| Income tax expense | (120 | ) | (929 | ) | (64 | ) | (1,187 | ) | ||||||||
| Adjusted Net Income, a non-GAAP measure | $ | 13,482 | $ | 14,072 | $ | 32,891 | $ | 35,899 | ||||||||
| Earnings per share-diluted, a GAAP measure | $ | 0.24 | $ | 0.22 | $ | 0.60 | $ | 0.61 | ||||||||
| Non-recurring donations | 0.01 | 0.05 | - | 0.07 | ||||||||||||
| Profit-sharing | - | (0.01 | ) | - | (0.01 | ) | ||||||||||
| Income tax expense | - | (0.02 | ) | - | (0.02 | ) | ||||||||||
| Adjusted earnings per share-diluted, a non-GAAP measure | $ | 0.25 | $ | 0.24 | $ | 0.60 | $ | 0.65 | ||||||||
Contact Information:
For Further Information:
Jerry R. Levine
Phone: (914) 244-0292
Fax: (914) 244-0295
Email: jrladvisor@yahoo.com