TULSA, OK--(Marketwire - Aug 4, 2011) - AAON, Inc. (
In the quarter, net sales increased 7% to $69.1 million from $64.5 million, while net income decreased 34% to $3.8 million from $5.8 million in the second quarter of 2010. Earnings per diluted share were $0.15, down 35% from $0.23 for the same period a year ago, based upon 24.9 million and 25.5 million diluted shares outstanding for the three months ended June 30, 2011, compared to June 30, 2010, respectively. Net sales for the first six months of 2011 increased 13% to $129.0 million from $113.8 million in 2010, and net income decreased 31% to $7.5 million from $10.9 million. Earnings per diluted share were $0.30, down 30% from $0.43, based upon 24.9 million and 25.7 million diluted shares outstanding for the six months ended June 30, 2011, compared to June 30, 2010, respectively.
Norman H. Asbjornson, President and CEO, stated, "The increases in sales resulted primarily from a significant increase in sales to the replacement market (up to 70% of total sales vs. less than 60% in 2010), largely due to the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 signed into law on December 17, 2010, which allows 100% depreciation for qualified capitalized expenditures put in service in calendar year 2011."
Mr. Asbjornson said, "The decreases in earnings were attributable to a number of factors, including primarily: (1) excess manufacturing expense items purchased in advance to avoid price increases; (2) higher costs of raw material and component parts; (3) lower productivity of workers and equipment caused by adverse temperature conditions resulting from previously reported storm damage to the roof of the Tulsa facility; and (4) manufacturing problems related to production facilities rearrangement."
Mr. Asbjornson concluded by saying, "With most of these higher, abnormal costs and elective expenses behind us or abating, and taking into account our record backlog of $59.7 million at mid-year (up 35% from June 30, 2010), plus the fact that our recent price increases will fully impact sales in the third quarter and beyond, we anticipate continued increases in sales and improved profitability for the balance of 2011."
The Company will host a conference call today at 4:15 P.M. ET to discuss the second quarter results. To participate, call 1-877-737-1669.
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) | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| June 30, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | ||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||
| Net sales | $ | 69,076 | $ | 64,531 | $ | 128,989 | $ | 113,840 | |||||||||
| Cost of sales | 57,339 | 49,025 | 105,614 | 85,340 | |||||||||||||
| Gross profit | 11,737 | 15,506 | 23,375 | 28,500 | |||||||||||||
| Selling, general and administrative expenses | 5,697 |
6,598 |
11,240 |
11,426 | |||||||||||||
| Income from operations | 6,040 | 8,908 | 12,135 | 17,074 | |||||||||||||
| Interest expense | (104 | ) | - | (114 | ) | - | |||||||||||
| Investment interest income | 20 | 112 | 43 | 118 | |||||||||||||
| Note receivable interest income | 11 | - | 22 | - | |||||||||||||
| Other income (expense), net | (65 | ) | (62 | ) | (568 | ) | (122 | ) | |||||||||
| Income before income taxes | 5,902 | 8,958 | 11,518 | 17,070 | |||||||||||||
| Income tax provision | 2,063 | 3,137 | 4,029 | 6,131 | |||||||||||||
| Net income | $ | 3,839 | $ | 5,821 | $ | 7,489 | $ | 10,939 | |||||||||
| Earnings per share: | |||||||||||||||||
| Basic* | $ | 0.16 | $ | 0.23 | $ | 0.30 | $ | 0.43 | |||||||||
| Diluted* | $ | 0.15 | $ | 0.23 | $ | 0.30 | $ | 0.43 | |||||||||
| Cash dividends declared per common share:* | $ | 0.12 | $ | 0.12 | $ | 0.12 | $ | 0.12 | |||||||||
| Weighted average shares outstanding: | |||||||||||||||||
| Basic* | 24,715 | 25,411 | 24,730 | 25,594 | |||||||||||||
| Diluted* | 24,923 | 25,546 | 24,931 | 25,725 | |||||||||||||
| *Reflects three-for-two stock split effective June 13, 2011. |
| AAON, Inc., and Subsidiaries | ||||||||
| Consolidated Balance Sheets | ||||||||
| (unaudited) | ||||||||
| June 30, 2011 | December 31, 2010 | |||||||
| Assets | (in thousands except share and per share data) | |||||||
Current assets: |
||||||||
| Cash and cash equivalents | $ | 2,091 | $ | 2,393 | ||||
| Certificates of deposit | 240 | 1,503 | ||||||
| Investments held to maturity at amortized cost | 2,328 | 9,520 | ||||||
| Accounts receivable, net | 42,694 | 39,901 | ||||||
| Note receivable | 26 | 26 | ||||||
| Inventories, net | 45,311 | 33,602 | ||||||
| Prepaid expenses and other | 422 | 656 | ||||||
| Deferred tax assets | 4,610 | 4,147 | ||||||
| Total current assets | 97,722 | 91,748 | ||||||
| Property, plant and equipment: | ||||||||
| Land | 1,340 | 1,328 | ||||||
| Buildings | 50,584 | 45,482 | ||||||
| Machinery and equipment | 119,491 | 100,559 | ||||||
| Furniture and fixtures | 7,101 | 6,356 | ||||||
| Total property, plant and equipment | 178,516 | 153,725 | ||||||
| Less: Accumulated depreciation | 91,034 | 86,307 | ||||||
| Property, plant and equipment, net | 87,482 | 67,418 | ||||||
| Note receivable, long-term | 1,156 | 1,111 | ||||||
| Total assets | $ | 186,360 | $ | 160,277 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Revolving credit facility | $ | 7,628 | $ | - | ||||
| Accounts payable | 24,621 | 13,017 | ||||||
| Dividends payable | 2,966 | - | ||||||
| Accrued liabilities | 23,047 | 23,229 | ||||||
| Total current liabilities | 58,262 | 36,246 | ||||||
| Deferred tax liabilities | 8,069 | 7,292 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity: | ||||||||
| Preferred stock, $.001 par value, 7,500,000 shares authorized, no shares issued | - | - | ||||||
| Common stock, $.004 par value, 75,000,000 shares authorized, 24,670,026 and 24,758,480 issued and outstanding at June 30, 2011 and December 31, 2010, respectively* | 99 | 99 |
||||||
| Retained earnings | 119,930 | 116,640 | ||||||
| Total stockholders' equity | 120,029 | 116,739 | ||||||
| Total liabilities and stockholders' equity | $ | 186,360 | $ | 160,277 | ||||
| * Reflects three-for-two stock split effective June 13, 2011. | ||||||||
| AAON, Inc., and Subsidiaries | |||||||||||
| Consolidated Statements of Cash Flows | |||||||||||
| (unaudited) | |||||||||||
| Six Months Ended June 30, 2011 |
Six Months Ended June 30, 2010 |
||||||||||
| (in thousands) | |||||||||||
| Operating Activities | |||||||||||
| Net income | $ | 7,489 | $ | 10,939 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation | 5,449 | 4,812 | |||||||||
| Amortization of bond premiums | 137 | - | |||||||||
| Provision for losses on accounts receivable, net of adjustments | (106 | ) | (164 | ) | |||||||
| Share-based compensation | 346 | 421 | |||||||||
| Excess tax benefits from stock options exercised and restricted stock awards vested | (77 | ) | (342 | ) | |||||||
| Gain on disposition of assets | (8 | ) | - | ||||||||
| Other, effect of foreign currency gain | (59 | ) | - | ||||||||
| Deferred income taxes | 314 | (1,284 | ) | ||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable | (2,687 | ) | (2,914 | ) | |||||||
| Inventories | (11,709 | ) | (5,454 | ) | |||||||
| Prepaid expenses and other | 234 | 426 | |||||||||
| Financial derivative assets | - | 1,211 | |||||||||
| Accounts payable | 10,957 | 7,821 | |||||||||
| Accrued liabilities | (105 | ) | 6,936 | ||||||||
| Net cash provided by operating activities | 10,175 | 22,408 | |||||||||
| Investing Activities | |||||||||||
| Proceeds from sale of property, plant and equipment | 49 | - | |||||||||
| Investment in certificates of deposit | - | (2,744 | ) | ||||||||
| Maturities of certificates of deposit | 1,263 | 719 | |||||||||
| Investments held to maturity | - | (13,692 | ) | ||||||||
| Maturities of investments | 7,055 | 600 | |||||||||
| Capital expenditures | (24,907 | ) | (6,472 | ) | |||||||
| Proceeds from note receivable | 14 | - | |||||||||
| Net cash used in investing activities | (16,526 | ) | (21,589 | ) | |||||||
| Financing Activities | |||||||||||
| Borrowings under revolving credit facility | 36,231 | - | |||||||||
| Payments under revolving credit facility | (28,603 | ) | - | ||||||||
| Payments of long-term debt | - | (46 | ) | ||||||||
| Stock options exercised | 132 | 976 | |||||||||
| Excess tax benefits from stock options exercised and restricted stock awards vested | 77 | 342 | |||||||||
| Repurchases of stock | (1,779 | ) | (17,439 | ) | |||||||
| Cash dividends paid to stockholders* | (9 | ) | (6,192 | ) | |||||||
| Net cash provided by (used) in financing activities | 6,049 | (22,359 | ) | ||||||||
| Effect of exchange rate on cash | - | 2 | |||||||||
| Net decrease in cash and cash equivalents | (302 | ) | (21,538 | ) | |||||||
| Cash and cash equivalents, beginning of year | 2,393 | 25,639 | |||||||||
| Cash and cash equivalents, end of period | $ | 2,091 | $ | 4,101 | |||||||
| *Cash payment in lieu of fractional shares resulting from three-for-two stock split effective June 13, 2011. |
| AAON, Inc., and Subsidiaries | |||||||
| Consolidated Statements of Cash Flows | |||||||
| (unaudited) | |||||||
| Six Months Ended June 30, 2011 |
Six Months Ended June 30, 2010 |
||||||
| (in thousands) | |||||||
| Non Cash Investing Activities | |||||||
| Capital expenditures accrued in accounts payable | $ | 647 | $ | - | |||
Contact Information:
For Further Information:
Jerry R. Levine
Phone: (914) 244-0292
Fax: (914) 244-0295
Email: jrladvisor@yahoo.com