AAON Reports 2010 Results and Record Fourth Quarter Sales

TULSA, OK--(Marketwire - March 10, 2011) - AAON, Inc. (NASDAQ: AAON) today announced its operating results for the year 2010. Sales decreased to $244.6 million from $245.3 million in 2009, and net income decreased 21% to $21.9 million compared to $27.7 million in the previous year. Year 2009 earnings benefited by a $2.2 million reduction in cost of sales, of which $1.2 million occurred in the fourth quarter, resulting from hedging of copper ($1.4 million and $0.8 million net of tax, respectively).

Sales in the fourth quarter of 2010 reached a record level of $65.8 million, up 21% from $54.2 million in 2009, primarily reflecting the favorable reception of AAON's new products. Nevertheless, net income fell 6% to $5.8 million from $6.2 million for a number of reasons including the poor economic conditions which caused substantial pressure on our margins, exacerbated by cost increases led by commodity prices, plus the aforementioned absence of gains from hedging in 2010, although benefiting from a lower effective tax rate.

Norman H. Asbjornson, President and CEO, stated that, "We were pleased that sales in 2010 were substantially level with sales in 2009, despite a 14.1% decline in non-residential construction spending. The 2010 reduction in net income was caused by substantially the same reasons mentioned above, plus one-time costs associated with relocation and the addition of production facilities."

Earnings for the fourth quarter of 2010 were $0.35 per diluted share compared to $0.36 per diluted share in 2009, based upon 16.6 million and 17.3 million diluted shares outstanding, respectively, while earnings per diluted share for year 2010 were $1.30 compared to $1.60 in 2009, based upon 16.9 million and 17.3 million diluted shares outstanding, respectively.

Mr. Asbjornson said, "We anticipate modestly improving industry economic conditions and a better year in 2011. An indicator is that AAON's backlog at yearend 2010 was $38.4 million, up 19% from $32.2 million a year ago."

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.

The Company will host a conference call today at 4:15 P.M. EST to discuss year 2010 and the fourth quarter results. To participate, call 1-877-737-1669 (Pass code VA 87132).

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
				Three Months Ended							Twelve Months Ended
				December 31,				December 31,			December 31,				December 31,
				2010				2009			2010				2009
				(in thousands, except per share data)
Net sales				$	65,826			$	54,228		$	244,552			$	245,282
Cost of sales					51,635				39,449			189,364				177,737
		Gross profit			14,191				14,779			55,188				67,545
Selling, general and administrative expenses					5,881				5,150			22,473				23,791
		Income from operations			8,310				9,629			32,715				43,754
Interest expense					(41	)			-			(45	)			(9	)
Interest income					96				-			258				71
Other income (expense), net					(49	)			75			(235	)			76
Income before income taxes					8,316				9,704			32,693				43,892
Income tax provision					2,534				3,549			10,799				16,171
		Net income		$	5,782			$	6,155		$	21,894			$	27,721
Earnings per share:
	Basic			$	0.35			$	0.36		$	1.30			$	1.61
	Diluted			$	0.35			$	0.36		$	1.30			$	1.60
Cash dividends declared per common share:				$	0.18			$	0.18		$	0.36			$	0.36
Weighted average shares outstanding:
	Basic				16,523				17,213			16,799				17,187
	Diluted				16,633				17,281			16,893				17,309

AAON, Inc., and Subsidiaries
Consolidated Balance Sheets
				December 31, 2010			December 31, 2009
				(in thousands, except share and per share data)
Assets
Current assets:
	Cash and cash equivalents			$	2,393		$	25,639
	Certificates of deposit				1,503			-
	Investments held to maturity at amortized cost				9,520			-
	Accounts receivable, net				39,901			33,381
	Note receivable, current				26			-
	Inventories, net				33,602			28,788
	Prepaid expenses and other				656			1,087
	Financial derivative asset				-			2,200
	Assets held for sale, net				-			1,522
	Deferred tax assets				4,147			3,623
Total current assets					91,748			96,240
Property, plant and equipment
	Land				1,328			1,328
	Buildings				45,482			41,697
	Machinery and equipment				100,559			90,213
	Furniture and fixtures				6,356			7,225
		Total property, plant and equipment			153,725			140,463
		Less: Accumulated depreciation			86,307			80,567
Property, plant and equipment, net					67,418			59,896
Note receivable, long-term					1,111			75
Total assets				$	160,277		$	156,211
Liabilities & Stockholders' Equity
Current liabilities:
	Current maturities of long-term debt				-			76
	Accounts payable				15,046			8,524
	Dividends payable				-			3,100
	Accrued liabilities				21,200			19,186
Total current liabilities					36,246			30,886
Deferred tax liabilities					7,292			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 authorized, 16,505,653 and 17,214,979 issued and outstanding at December 31, 2010 and 2009, respectively				68			71
	Additional paid-in capital				-			644
	Accumulated other comprehensive income, net of tax				-			1,077
	Retained earnings				116,671			116,207
Total stockholders' equity					116,739			117,999
Total liabilities and stockholders' equity				$	160,277		$	156,211

AAON, Inc., and Subsidiaries
Consolidated Statements of Cash Flows
					Twelve Months				Twelve Months
					Ended				Ended
					December 31, 2010				December 31, 2009
					(in thousands)
Operating Activities
	Net income				$	21,894			$	27,721
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation				9,886				9,061
		Amortization of bond premiums				379				-
		Provision for losses on accounts receivable, net of adjustments				(117	)			10
		Provision for excess and obsolete inventories				-				410
		Share-based compensation				791				848
		Excess tax benefits from stock options exercised and restricted stock awards vested				(356	)			(703	)
		Gain on disposition of assets				(73	)			(59	)
		Unrealized gain on financial derivative assets				(14	)			(2,200	)
		Deferred income taxes				(558	)			3,531
		Changes in assets and liabilities:
			Accounts receivable			(6,403	)			5,495
			Inventories			(4,814	)			7,243
			Prepaid expenses and other			431				(660	)
			Financial derivative asset			2,214				-
			Accounts payable			6,522				(6,334	)
			Accrued liabilities			2,370				842
	Net cash provided by operating activities					32,152				45,205
Investing Activities
	Proceeds from sale of property, plant, and equipment					136				135
	Investment in certificates of deposit					(2,745	)			-
	Maturities of certificates of deposit					1,242				-
	Investments held to maturity					(12,018	)			-
	Maturities of investments					2,119				-
	Proceeds from assets held for sale					460				-
	Capital expenditures					(17,470	)			(9,774	)
	Net cash used in investing activities					(28,276	)			(9,639	)
Financing Activities
	Borrowings under revolving credit facility					20,839				9,972
	Payments under revolving credit facility					(20,839	)			(12,873	)
	Payments of long-term debt					(76	)			(136	)
	Stock options exercised					1,168				1,236
	Excess tax benefits from stock options exercised and restricted stock awards vested					356				703
	Repurchase of stock					(19,480	)			(3,129	)
	Cash dividends paid to stockholders					(9,168	)			(5,874	)
	Net cash used in financing activities					(27,200	)			(10,101	)
Effect of exchange rate on cash						78				(95	)
Net increase (decrease) in cash and cash equivalents						(23,246	)			25,370
Cash and cash equivalents, beginning of year						25,639				269
Cash and cash equivalents, end of year					$	2,393			$	25,639

Contact Information:

For Further Information:
Jerry R. Levine
Phone: (914) 244-0292
Fax: (914) 244-0295