AAON Reports Higher Sales and Earnings

TULSA, OK--(Marketwire - May 8, 2012) - AAON, Inc. (NASDAQ: AAON) today announced its operating results for the three months ended March 31, 2012, of $65.0 million in sales (up 8%), and $4.6 million of net income (up 25%), $0.18 per share, compared to $59.9 million in sales and $3.7 million in net income, $0.15 per share, a year ago. Per share earnings are on a diluted basis.

Norman H. Asbjornson, President and CEO, stated, "The increase in revenues reflects a continuation of gains in market share, while the much greater increase in earnings was attributable to: improved productivity due to our new sheet metal fabrication equipment and revamped production lines, which resulted in an improvement of gross margins from 19.4% to 20.8%, despite continued material cost increases; aided by the absence of a special expense in 2012 comparable to the $500,000 insurance deductible paid in 2011; but reduced by $380,000 (or $0.02 per diluted share) due to the loss of expired federal income tax credits for research and development and our failure to qualify, during the period, for the domestic production activity tax credit."

Mr. Asbjornson said, "Significantly, our increased market penetration has produced a 22% rise in our backlog from $48.1 million at March 31, 2011, to $58.7 million at March 31, 2012. In spite of a generally anticipated modest growth in the Heating, Ventilating and Air Conditioning market, I believe AAON's development in the past few years of new products, improved manufacturing machinery and facilities has given AAON a more advantageous and optimistic view of our future."

Mr. Asbjornson added, "Based on the first quarter results and backlog, we expect 2012 to produce both higher sales and earnings than 2011."

The Company will host a conference call today at 4:15 P.M. EDT to discuss the first quarter results. To participate, call 1-877-737-1669 (Code: VA27085).

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
			March 31, 2012				March 31, 2011
			(in thousands except per share amounts)
Net sales			$	64,957			$	59,913
Cost of sales				51,439				48,275
Gross profit				13,518				11,638
Selling, general and administrative expenses				5,981				5,537
(Gain) loss on disposal of assets				(23	)			6
Income from operations				7,560				6,095
Interest expense				(16	)			(10	)
Interest income				13				34
Other income (expense), net				48				(503	)
Income before income taxes				7,605				5,616
Income tax provision				3,038				1,966
Net income			$	4,567			$	3,650
Earnings per share:
	Basic		$	0.19			$	0.15
	Diluted		$	0.18			$	0.15
Cash dividends declared per common share			$	0.00			$	0.00
Weighted average shares outstanding:
	Basic			24,587				24,744
	Diluted			24,772				24,939

AAON, Inc., and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
				March 31, 2012				December 31, 2011
				(in thousands, except share and per share data)
Assets
Current assets:
	Cash and cash equivalents			$	3,245			$	13
	Accounts receivable, net				34,523				34,137
	Income tax receivable				10,253				10,016
	Note receivable				27				27
	Inventories, net				36,755				34,948
	Prepaid expenses and other				805				723
	Deferred tax assets				3,865				4,523
Total current assets					89,473				84,387
Property, plant and equipment:
	Land				1,340				1,340
	Buildings				57,399				56,057
	Machinery and equipment				115,910				114,256
	Furniture and fixtures				8,057				7,784
		Total property, plant and equipment			182,706				179,437
		Less: Accumulated depreciation			88,522				85,935
	Property, plant and equipment, net				94,184				93,502
Note receivable, long-term					1,108				1,092
Total assets				$	184,765			$	178,981
Liabilities and Stockholders' Equity
Current liabilities:
	Revolving credit facility				-				4,575
	Accounts payable				16,224				14,118
	Accrued liabilities				25,111				19,994
Total current liabilities					41,335				38,687
Deferred tax liabilities					17,302				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,24,563,272 and 24,618,324 issued and outstanding at March 31, 2012 and December 31, 2011, respectively					98				98
	Retained earnings				126,030				122,406
Total stockholders' equity					126,128				122,504
Total liabilities and stockholders' equity				$	184,765			$	178,981

AAON, Inc., and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
					Three Months Ended
					March 31, 2012				March 31, 2011
					(in thousands)
Operating Activities
	Net income				$	4,567			$	3,650
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation				3,394				2,703
		Amortization of bond premiums				-				90
		Provision for losses on accounts receivable, net of adjustments				4				(10	)
		Share-based compensation				169				175
		Excess tax benefits from stock options exercised and restricted stock awards vested				(13	)			(10	)
		(Gain) Loss on disposition of assets				(23	)			6
		Effect of foreign currency (gain)loss				(23	)			(60	)
		Deferred income taxes				170				(175	)
		Changes in assets and liabilities:
			Accounts receivable			(390	)			1,329
			Income tax receivable			(237	)			-
			Inventories			(1,807	)			(5,557	)
			Prepaid expenses and other			(82	)			53
			Accounts payable			712				666
			Accrued liabilities			5,130				(1,445	)
	Net cash provided by operating activities					11,571				1,415
Investing Activities
	Proceeds from sale of property, plant and equipment					300				35
	Maturities of certificates of deposit					-				827
	Maturities of investments					-				4,181
	Proceeds from note receivable					7				7
	Capital expenditures					(2,959	)			(10,270	)
	Net cash used in investing activities					(2,652	)			(5,220	)
Financing Activities
	Borrowings under revolving credit facility					13,111				12,643
	Payments under revolving credit facility					(17,686	)			(5,004	)
	Stock options exercised					55				59
	Excess tax benefits from stock options exercised and restricted stock awards vested					13				10
	Repurchases of stock					(1,180	)			(743	)
	Net cash (used in) provided by financing activities					(5,687	)			6,965
Net increase in cash and cash equivalents						3,232				3,160
Cash and cash equivalents, beginning of year						13				2,393
Cash and cash equivalents, end of period					$	3,245			$	5,553