AAON Reports Record Sales and Earnings

TULSA, OK--(Marketwire - Aug 8, 2012) - AAON, Inc. (NASDAQ: AAON), today announced its operating results for the second quarter and six-month period ended June 30, 2012.

Sales and earnings during the second quarter were record highs for any quarter in the Company's 24-year history.

Revenues in the quarter were $83.3 million, up 21% from $69.1 million in 2011. Net income was $9.3 million, up 142% from $3.8 million in the same period a year ago. Net sales for the first six months of 2012 were also a record for any six-month period, $148.3 million, up 15% compared to $129.0 million in 2011. Earnings for the six months ended June 30, 2012, were $13.9 million, up 85% compared to $7.5 million in 2011.

Earnings per diluted share in the second quarter of 2012 were $0.38, up 153% from $0.15 for the same period a year ago, based upon 24.7 million and 24.9 million diluted shares outstanding for the three months ended June 30, 2012, compared to June 30, 2011, respectively. Earnings per diluted share were $0.56, up 87% from $0.30, based upon 24.8 million and 24.9 million diluted shares outstanding for the six months ended June 30, 2012, compared to June 30, 2011, respectively.

Norman H. Asbjornson, President and CEO, stated, "The increases in revenues primarily reflect gains in market share, while the much greater increases in earnings for the second quarter and first half of 2012, were attributable to significantly improved productivity due to our new sheet metal fabrication equipment and revamped production lines, which resulted in improvements of gross margins from 17.0% to 25.3% in the second quarters of 2011 and 2012, respectively, and 18.1% to 23.3% for the six-month periods ended June 30, 2011 and 2012. Our backlog at June 30, 2012, was $62.2 million compared to $59.7 million at the same time a year ago."

Mr. Asbjornson said that, "We are pleased with the results of the first half of 2012, which were aided by extremely strong order input. However, there are a number of uncertainties, particularly as to the level of future order input, which make it difficult to forecast the business climate AAON will encounter during the second half of the year."

The Company will host a conference call today at 4:15 P.M. EDT to discuss the second quarter results. To participate, call 1-877-737-1669 (Code: VA34474).

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								Six Month Ended
			June 30,								June 30,
			2012				2011				2012				2011
Net sales			$	83,333			$	69,076			$	148,290			$	128,989
Cost of sales				62,230				57,339				113,669				105,614
Gross profit				21,103				11,737				34,621				23,375
Selling, general and administrative expenses				6,899				5,711				12,880				11,248
(Gain) loss on disposal of assets				10				(14	)			(13	)			(8	)
Income from operations				14,194				6,040				21,754				12,135
Interest expense				(11	)			(104	)			(27	)			(114	)
Interest income				2				31				15				65
Other income (expense), net				(51	)			(65	)			(3	)			(568	)
Income before income taxes				14,134				5,902				21,739				11,518
Income tax provision				4,837				2,063				7,875				4,029
Net income			$	9,297			$	3,839			$	13,864			$	7,489
Earnings per share
	Basic		$	0.38			$	0.16			$	0.56			$	0.30
	Diluted		$	0.38			$	0.15			$	0.56			$	0.30
Cash dividends declared per common share:			$	0.12			$	0.12			$	0.12			$	0.12
Weighted average shares outstanding:
	Basic			24,552				24,715				24,570				24,730
	Diluted			24,728				24,923				24,750				24,931

AAON, Inc., and Subsidiaries
Consolidated Balance Sheets
(Unaudited) (In thousands, except share and per share data)
				June 30, 2012			December 31, 2011
Assets
Current assets:
	Cash and cash equivalents			$	3,082		$	13
	Certificates of deposit				2,259			-
	Investments held to maturity at amortized cost				1,254			-
	Accounts receivable, net				52,087			34,137
	Income tax receivable				197			10,016
	Note receivable				27			27
	Inventories, net				39,142			34,948
	Prepaid expenses and other				814			723
	Deferred tax assets				4,330			4,523
Total current assets					103,192			84,387
Property, plant and equipment:
	Land				1,340			1,340
	Buildings				58,757			56,057
	Machinery and equipment				116,255			114,256
	Furniture and fixtures				8,318			7,784
		Total property, plant and equipment			184,670			179,437
		Less: Accumulated depreciation			91,472			85,935
	Property, plant and equipment, net				93,198			93,502
	Certificates of deposit				2,015			-
	Investments held to maturity at amortized cost				4,079			-
Note receivable, long-term					1,070			1,092
Total assets				$	203,554		$	178,981
Liabilities and Stockholders' Equity
Current liabilities:
	Revolving credit facility				7,259			4,575
	Accounts payable				16,978			14,118
	Dividends payable				2,950			-
	Accrued liabilities				27,656			19,994
Total current liabilities					54,843			38,687
Deferred tax liabilities					16,722			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, 24,543,861 and 24,618,324 issued and outstanding at June 30, 2012 and December 31, 2011, respectively					98			98
	Retained earnings				131,891			122,406
Total stockholders' equity					131,989			122,504
Total liabilities and stockholders' equity				$	203,554		$	178,981

AAON, Inc., and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited) (In thousands)
						Six Months Ended
						June 30,
						2012				2011
Operating Activities
	Net income					$	13,864			$	7,489
		Adjustments to reconcile net income to net cash provided by operating activities:
			Depreciation				6,747				5,449
			Amortization of bond premiums				20				137
			Provision for losses on accounts receivable, net of adjustments				(1	)			(106	)
			Share-based compensation				364				346
			Excess tax benefits from stock options exercised and restricted stock awards vested				(33	)			(77	)
			Gain on disposition of assets				(13	)			(8	)
			Foreign currency transaction (gain)losses				7				(59	)
			Deferred income taxes				(875	)			314
			Changes in assets and liabilities:
				Accounts receivable			(17,949	)			(2,687	)
				Income tax receivable			5,801				-
				Inventories			(4,194	)			(11,709	)
				Prepaid expenses and other			(91	)			234
				Accounts payable			4,215				10,957
				Accrued liabilities			11,714				(105	)
	Net cash provided by operating activities						19,576				10,175
Investing Activities
	Proceeds from sale of property, plant and equipment						306				49
	Investment in certificates of deposits						(4,274	)			-
	Maturities of certificates of deposits						-				1,263
	Purchases of investments held to maturity						(5,624	)			-
	Maturities of investments						-				7,055
	Proceeds from called investment						270				-
	Capital expenditures						(8,091	)			(24,907	)
	Principal payments from note receivable						15				14
	Net cash used in investing activities						(17,398	)			(16,526	)
Financing Activities
	Borrowings under revolving credit facility						27,108				36,231
	Payments under revolving credit facility						(24,424	)			(28,603	)
	Stock options exercised						69				132
	Excess tax benefits from stock options exercised and restricted stock awards vested						33				77
	Repurchases of stock						(1,895	)			(1,779	)
	Cash dividends paid to stockholders						-				(9	)
	Net cash provided by financing activities						891				6,049
Net increase (decrease) in cash and cash equivalents							3,069				(302	)
Cash and cash equivalents, beginning of year							13				2,393
Cash and cash equivalents, end of period						$	3,082			$	2,091