AAON Reports Third Quarter Results


TULSA, OK--(Marketwire - November 8, 2010) - AAON, Inc. (NASDAQ: AAON), today announced its operating results for the third quarter and nine-month period ended September 30, 2010.

In the quarter, net sales increased 11% to $64.9 million from $58.5 million, while net income decreased 32% to $5.2 million from $7.7 million in the third quarter of 2009. Earnings per diluted share were $0.31, down 31% from $0.45 for the same period a year ago, based upon 16.6 million and 17.3 million diluted shares outstanding for the three months ended September 30, 2010, compared to September 30, 2009, respectively. Net sales for the first nine months of 2010 decreased 6% to $178.7 million from $191.1 million in 2009, and net income decreased 25% to $16.1 million from $21.6 million. Earnings per diluted share were $0.95, down 24% from $1.25, based upon 17.0 million and 17.3 million diluted shares outstanding for the nine months ended September 30, 2010, compared to September 30, 2009, respectively. The third quarter net income a year ago benefited from a $1.0 million reduction in cost of sales resulting from AAON's hedging of copper, which increased net income by $600,000 or $0.04 per share.

Norman H. Asbjornson, President and CEO, stated, "We are very proud to have increased net sales in the third quarter, in a severely contracted and very difficult market, by greatly increasing our market share; however, understandably this market, caused by the present poor economic conditions, has put substantial pressure on our margins, exacerbated by cost increases led by commodity prices."

Mr. Asbjornson added that, "We continue to significantly invest in our equipment and facilities and introduce new products which are enabling AAON to position itself to benefit from any upturn in the industry. Significantly, our increased market penetration has produced a 47% rise in our backlog from $38.8 million at September 30, 2009, to $56.9 million at September 30, 2010."

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 (Pass code VA27868).

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             Nine Months Ended
                September 30,  September 30,  September 30,  September 30,
                    2010           2009           2010           2009
                -------------  -------------  -------------  -------------
                          (in thousands, except per share data)

Net sales       $      64,886  $      58,492  $     178,726  $     191,054

Cost of sales          52,389         40,764        137,729        138,288
                -------------  -------------  -------------  -------------

      Gross
       profit          12,497         17,728         40,997         52,766

Selling, general
 and
 administrative
 expenses               5,166          5,313         16,592         18,641
                -------------  -------------  -------------  -------------

    Income
     from
     operations         7,331         12,415         24,405         34,125

Interest
 expense                   (4)             -             (4)            (9)

Interest income            44             64            162             71

Other income
 (expense), net           (64)          (173)          (186)             1
                -------------  -------------  -------------  -------------

Income before
 income taxes           7,307         12,306         24,377         34,188

Income tax
 provision              2,134          4,565          8,265         12,622
                -------------  -------------  -------------  -------------

    Net income  $       5,173  $       7,741  $      16,112  $      21,566
                =============  =============  =============  =============

Earnings per
 share:
  Basic         $        0.31  $        0.45  $        0.95  $        1.26
                =============  =============  =============  =============
  Diluted       $        0.31  $        0.45  $        0.95  $        1.25
                =============  =============  =============  =============

Cash dividends
 declared
 per common
 share:         $        0.00  $        0.00  $        0.18  $        0.18
                =============  =============  =============  =============

Weighted
 average shares
 outstanding:
  Basic                16,555         17,175         16,892         17,178
                =============  =============  =============  =============
  Diluted              16,647         17,304         16,981         17,318
                =============  =============  =============  =============










                       AAON, Inc., and Subsidiaries
                  Consolidated Balance Sheets (unaudited)

                                      September 30, 2010 December 31, 2009
                                      ------------------ ------------------
                                      (in thousands, except share and per
                                                  share data)
Assets
Current assets:
     Cash and cash equivalents        $            4,149 $           25,639
     Certificates of deposit                       1,945                  -
     Investments held to maturity at
      amortized cost                              10,939                  -
     Accounts receivable, net                     36,939             33,381
     Note receivable, current                         26                  -
     Inventories, net                             34,650             28,788
     Prepaid expenses and other                      545              1,087
     Financial derivative asset                      457              2,200
     Assets held for sale, net                         -              1,522
     Deferred tax assets                           4,625              3,623
                                      ------------------ ------------------
Total current assets                              94,275             96,240

Property, plant and equipment
     Land                                          1,328              1,328
     Buildings                                    44,326             41,697
     Machinery and equipment                      98,188             90,213
     Furniture and fixtures                        6,096              7,225
                                      ------------------ ------------------
        Total property, plant and
         equipment                               149,938            140,463
        Less:  Accumulated
         depreciation                             84,322             80,567
                                      ------------------ ------------------
Property, plant and equipment, net                65,616             59,896

Note receivable, long-term                         1,118                 75
Investments held to maturity at
 amortized cost                                      604                  -
                                      ------------------ ------------------
Total assets                          $          161,613 $          156,211
                                      ================== ==================

Liabilities & Stockholders' Equity
Current liabilities:
     Revolving credit facility        $            3,991 $                -
     Current maturities of long-term
      debt                                             8                 76
     Accounts payable                             13,442              8,524
     Dividends payable                                 -              3,100
     Accrued liabilities                          21,834             19,186
                                      ------------------ ------------------
Total current liabilities                         39,275             30,886

Long-term debt, less current
 maturities                                            -                  -
Deferred tax liabilities                           7,623              7,326
Commitments and contingencies

Stockholder's Equity
     Preferred stock, $.001 par
      value, 7,500,000 shares
      authorized, no shares issued                     -                  -
     Common stock, $.004 par value,
      75,000,000 shares issued
      authorized, 16,539,254 and
      17,214,979 issued and
      outstanding at September
      30, 2010 and December 31,
      2009, respectively                              69                 71
     Additional paid-in capital                        -                644
     Accumulated other comprehensive
      income, net of tax                               -              1,077
     Retained earnings                           114,646            116,207
                                      ------------------ ------------------
Total stockholders' equity                       114,715            117,999
                                      ------------------ ------------------
Total liabilities and stockholders'
 equity                               $          161,613 $          156,211
                                      ================== ==================










                       AAON, Inc., and Subsidiaries
                  Consolidated Statements of Cash Flows
                                (unaudited)

                                       Nine Months         Nine Months
                                          Ended               Ended
                                    September 30, 2010  September 30, 2009
                                    ------------------  ------------------
                                                (in thousands)
Operating Activities
  Net income                        $           16,112  $           21,566

  Adjustments to reconcile net
   income to net cash provided by
   operating activities:
    Depreciation                                 7,330               6,682
    Provision for losses on
     accounts receivable, net of
     adjustment                                    (36)                603
    Share-based compensation                       609                 631
    Excess tax benefits from stock
     options exercised and
     restricted stock awards vested               (331)               (389)
    (Gain) loss on disposition of
     assets                                       (105)                  4
    Unrealized gain on financial
     derivative asset                                -              (1,005)
    Deferred income taxes                         (705)               (819)
    Changes in assets and
     liabilities:
      Accounts receivable                       (3,522)              2,551
      Inventories                               (5,862)              5,156
      Prepaid expenses and other                   542                (532)
      Financial derivative asset                 1,743                   -
      Accounts payable                           4,918              (2,695)
      Accrued liabilities                        2,979               4,576
                                    ------------------  ------------------
  Net cash provided by operating
   activities                                   23,672              36,329
                                    ------------------  ------------------

Investing Activities
  Proceeds from sale of property,
   plant and equipment                             105                   -
  Investment in certificates of
   deposit                                      (1,945)                  -
  Investments held to maturity at
   amortized cost                              (11,543)                  -
  Deposits on sale of assets held
   for sale                                        453
  Capital expenditures                         (13,050)             (8,644)
                                    ------------------  ------------------
  Net cash used in investing
   activities                                  (25,980)             (8,644)
                                    ------------------  ------------------

Financing Activities
  Borrowings under revolving credit
   facility                                      6,682               9,972
  Payments under revolving credit
   facility                                     (2,691)            (12,873)
  Payments of long-term debt                       (68)               (113)
  Stock options exercised                        1,054                 871
  Excess tax benefits from stock
   options exercised and
   restricted stock awards vested                  331                 389
  Repurchase of stock                          (18,377)             (2,548)
  Cash dividends paid to
   stockholders                                 (6,192)             (5,874)
                                    ------------------  ------------------
  Net cash used in financing
   activities                                  (19,261)            (10,176)
                                    ------------------  ------------------
Effect of exchange rate on cash                     79                 116
                                    ------------------  ------------------
Net increase (decrease) in cash and
 cash equivalents                              (21,490)             17,625
                                    ------------------  ------------------
Cash and cash equivalents,
 beginning of year                              25,639                 269
                                    ------------------  ------------------
Cash and cash equivalents, end of
 period                             $            4,149  $           17,894
                                    ==================  ==================

Contact Information: For Further Information: Jerry R. Levine Phone: (914) 244-0292 Fax: (914) 244-0295 Email: jrladvisor@yahoo.com