AAON Reports Higher 2012 and Record Fourth Quarter Results

TULSA, OK--(Marketwire - Mar 14, 2013) - AAON, Inc. (NASDAQ: AAON) today announced its operating results for the year 2012. Sales increased 14% to a record $303.1 million from $266.2 million in 2011, while net income increased 96% to $27.4 million compared to $14.0 million in the previous year. Sales in the fourth quarter of 2012 increased 23% to a record $78.0 million from $63.4 million in 2011. Net income increased 770% to a record $7.6 million compared to $0.9 million in the same period a year ago.

Earnings per diluted share for year 2012 were $1.11 compared to $0.56 in 2011, based upon 24.7 million and 24.9 million diluted shares outstanding, respectively, while earnings for the fourth quarter of 2012 were $0.31 per diluted share compared to $0.04 per diluted share in 2011, based upon 24.6 million and 24.8 million diluted shares outstanding, respectively.

Norman H. Asbjornson, President and CEO, stated, "We are very proud of our operating results for year 2012 and for exceeding $300 million in sales for the first time. These results were achieved in spite of a continuing weak national economy. We addressed these problems through the development of new products; improvement of our sales force; addition of new facilities; rearrangement of production lines; and purchases of improved manufacturing machinery. Also extremely important has been the stability, training and dedication of our employees. These factors combined to provide greater productivity, improved efficiencies and a significant increase in our market share."

Mr. Asbjornson then pointed out that, "While gross profit in 2012 increased greatly to 23.3% from 17.4% in 2011, this difference is attributable to the above-mentioned factors and abnormal expenses incurred in 2011 as previously reported. However, we have begun to witness some inflationary pressure from rising raw material, components and labor costs. If this continues, our 2012 gross profit may not be sustainable throughout the 2013 calendar year."

Mr. Asbjornson next said, "It appears from information available to us that there will be a flat to modestly improving economy in our segments of the HVAC industry in 2013. Based upon this forecast and other factors, we anticipate AAON having another good year in 2013."

The Company will host a conference call today at 4:15 P.M. Eastern Time to discuss year 2012 and fourth quarter results. To participate, call 1-877-737-1669 (Code: VA 55540).

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
Unaudited Consolidated Statements of Income
			Three Months Ended								Year Ended
			December 31								December 31
			2012				2011				2012				2011
			(in thousands, except per share data)
Net sales			$	78,008			$	63,402			$	303,114			$	266,220
Cost of sales				59,279				54,755				232,615				219,939
Gross profit				18,729				8,647				70,499				46,281
Selling, general and administrative expenses				6,634				5,611				26,261				22,310
Loss(gain) on disposal of assets				21				1,816				4				1,802
Income from operations				12,074				1,220				44,234				22,169
Interest expense				(1	)			(104	)			(44	)			(277	)
Interest income				31				11				86				98
Other income(expense), net				(9	)			213				41				(477	)
Income before taxes				12,095				1,340				44,317				21,513
Income tax provision				4,517				469				16,868				7,527
Net income			$	7,578			$	871			$	27,449			$	13,986
Earnings per share:
	Basic		$	0.31			$	0.04			$	1.12			$	0.57
	Diluted		$	0.31			$	0.04			$	1.11			$	0.56
Cash dividends declared per common share:			$	0.24			$	0.12			$	0.36			$	0.24
Weighted average shares outstanding:
	Basic			24,525				24,635				24,550				24,690
	Diluted			24,630				24,821				24,699				24,881

AAON, Inc. and Subsidiaries
Unaudited Consolidated Balance Sheets
				December 31
				2012			2011
Assets				(in thousands, except share and per share data)
Current assets:
	Cash and cash equivalents			$	3,159		$	13
	Certificates of deposit				3,120			-
	Investments held to maturity at amortized cost				2,832			-
	Accounts receivable, net				43,866			34,137
	Income tax receivable				694			10,016
	Notes receivable				28			27
	Inventories, net				32,614			34,948
	Prepaid expenses and other				740			723
	Deferred tax assets				4,493			4,523
Total current assets					91,546			84,387
Property, plant and equipment:
	Land				1,340			1,340
	Buildings				59,761			56,057
	Machinery and equipment				117,617			114,256
	Furniture and fixtures				8,906			7,784
		Total property, plant and equipment			187,624			179,437
		Less: Accumulated depreciation			96,929			85,935
	Property, plant and equipment, net				90,695			93,502
Certificates of deposit					2,120			-
Investments held to maturity at amortized cost					8,041			-
Note receivable, long-term					1,091			1,092
Total assets				$	193,493		$	178,981
Liabilities and Stockholders' Equity
Current liabilities:
	Revolving credit facility			$	-		$	4,575
	Accounts payable				13,047			14,118
	Accrued liabilities				26,578			19,994
Total current liabilities					39,625			38,687
Deferred tax liabilities					15,732			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, 24,517,749 and 24,618,324 issued and outstanding at December 31, 2012 and 2011, respectively					98			98
Additional paid-in capital					-			-
Retained earnings					138,038			122,406
Total stockholders' equity					138,136			122,504
Total liabilities and stockholders' equity				$	193,493		$	178,981

AAON, Inc. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
					Years Ending December 31,
					2012				2011				2010
Operating Activities					(in thousands)
	Net income				$	27,449			$	13,986			$	21,894
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation				13,407				11,397				9,886
		Amortization of bond premiums				155				156				379
		Provision for losses on accounts receivable, net of adjustments				(83	)			(289	)			(117	)
		Provision for excess and obsolete inventories				63				(50	)			-
		Share-based compensation				1,294				680				791
		Excess tax benefits from stock options exercised and restricted stock awards vested				(393	)			(211	)			(356	)
		(Gain)loss on disposition of assets				4				1,802				(73	)
		Unrealized gain on financial derivative asset				-				-				(14	)
		Foreign currency transaction gain				(27	)			(8	)			-
		Interest income on note receivable				(42	)			-				-
		Deferred income taxes				(2,028	)			10,122				(558	)
		Changes in assets and liabilities:
			Accounts receivable			(9,646	)			6,053				(6,403	)
			Income tax receivable			9,715				(10,016	)			-
			Inventories			2,271				(1,296	)			(4,814	)
			Prepaid expenses and other			(17	)			(67	)			431
			Financial derivative asset			-				-				2,214
			Accounts payable			2,461				(2,751	)			6,522
			Accrued liabilities			6,584				(3,024	)			2,370
	Net cash provided by operating activities					51,167				26,484				32,152
Investing Activities
	Proceeds from sale of property, plant and equipment					11				482				136
	Investment in certificates of deposits					(6,540	)			-				(2,745	)
	Maturities of certificates of deposits					1,300				1,503				1,242
	Purchases of investments held to maturity					(11,654	)			-				(12,018	)
	Maturities of investments					-				9,364				2,119
	Proceeds from assets held for sale					-				-				460
	Proceeds from called investment					626				-				-
	Capital expenditures					(14,147	)			(35,914	)			(17,470	)
	Principal payments from note receivable					69				27				-
	Net cash used in investing activities					(30,335	)			(24,538	)			(28,276	)
Financing Activities
	Borrowings under revolving credit facility					34,847				82,078				20,839
	Payments under revolving credit facility					(39,422	)			(77,503	)			(20,839	)
	Payments of long-term debt					-				-				(76	)
	Stock options exercised					1,996				494				1,168
	Excess tax benefits from stock options exercised and restricted stock awards vested					393				211				356
	Repurchase of stock					(6,660	)			(3,671	)			(19,480	)
	Cash dividends paid to stockholders					(8,840	)			(5,935	)			(9,168	)
	Net cash used in financing activities					(17,686	)			(4,326	)			(27,200	)
Effects of exchange rate on cash						-				-				78
Net increase (decrease) in cash and cash equivalents						3,146				(2,380	)			(23,246	)
Cash and cash equivalents, beginning of year						13				2,393				25,639
Cash and cash equivalents, end of year					$	3,159			$	13			$	2,393