AAON Reports Record Sales and Earnings

TULSA, OK--(Marketwired - Nov 7, 2013) - AAON, Inc. (NASDAQ: AAON), today announced its operating results for the third quarter and nine-month period ended September 30, 2013.

The quarter ended September 30, 2013 was the fourth consecutive quarter to produce the highest sales and earnings for any corresponding quarter in any year in the 25-year history of the company. Sales and earnings for the nine months ended September 30, 2013, were also all time records.

Revenues in the quarter were $89.7 million, up 16.8% from $76.8 million in 2012. Net income was $10.5 million, up 75.2% from $6.0 million in the same period a year ago. Net sales for the nine-month period ended September 30, 2013 were $247.8 million, up 10.1% compared to $225.1 million in 2012. Earnings for the nine months ended September 30, 2013 were $29.8 million, up 49.9% compared to $19.9 million in 2012.

Earnings per diluted share in the third quarter of 2013 were $0.28, up 75.0% from $0.16 for the same period a year ago, based upon 37.0 million shares outstanding for both periods. Earnings per diluted share were $0.80, up 48.1% from $0.54, in the nine months ended September 30, 2013, and September 30, 2012, respectively, based upon 37.0 million and 37.1 million diluted shares outstanding for the nine months ended September 30, 2013, and September 30, 2012, respectively. All per share earnings reflect the 3-for-2 stock split effective July 2, 2013.

Norman H. Asbjornson, President and CEO, stated, "The third quarter gains in sales and income from operations primarily reflect an increase in market share, as well as price increases and a decline in cost of materials; gross profit as a percent of sales increased from 22.3% to 29.7%, but SG&A expenses as a percent of sales also increased from 8.8% to 10.8%, the majority of which (SG&A) represents increases in 'profit sharing' and warranty expense."

Mr. Asbjornson continued, "The Company's backlog decreased from $55.3 million at September 30, 2012 to $49.9 million at September 30, 2013."

Mr. Asbjornson said, "While we are confident of having record sales and profits for 2013, we expect a decline in sales and fairly level profits in the fourth quarter of 2013 compared to an exceptionally strong fourth quarter last year."

At a meeting of the Board of Directors on November 6, 2013, the Board declared a regular semi-annual cash dividend of $0.10 per share, which will be paid to the holders of the outstanding Common Stock of the Company as of the close of business on December 2, 2013, the record date, payable December 23, 2013.

The Company will host a conference call today at 4:15 P.M. Eastern Time to discuss the third quarter results. To participate, call 1-866-544-4631; or, for rebroadcast, call 1-866-245-6755 (code 531989).

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  September 30,								Nine Months Ended  September 30,
			2013				2012				2013				2012
			(in thousands, except share and per share data)
Net sales			$	89,690			$	76,816			$	247,764			$	225,106
Cost of sales				63,074				59,667				178,160				173,336
Gross profit				26,616				17,149				69,604				51,770
Selling, general and administrative expenses				9,687				6,747				25,743				19,627
Gain on disposal of assets				--				4				52				17
Income from operations				16,929				10,406				43,913				32,160
Interest expense				(1	)			(16	)			(2	)			(43	)
Interest income				61				40				153				55
Other income (expense), net				15				53				252				50
Income before taxes				17,004				10,483				44,316				32,222
Income tax provision				6,482				4,476				14,535				12,351
Net income			$	10,522			$	6,007			$	29,781			$	19,871
Earnings per share:
	Basic*		$	0.29			$	0.16			$	0.81			$	0.54
	Diluted*		$	0.28			$	0.16			$	0.80			$	0.54
Cash dividends declared per common share*:			$	--			$	--			$	0.10			$	0.08
Weighted average shares outstanding:
	Basic*			36,742,262				36,803,235				36,752,657				36,837,686
	Diluted*			37,017,561				37,001,127				37,041,775				37,083,695

*Reflects three-for-two stock split effective July 2, 2013

AAON, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
				September 30, 2013			December 31, 2012
Assets				(in thousands, except share and per share data)
Current assets:
	Cash and cash equivalents			$	2,289		$	3,159
	Certificates of deposit				8,186			3,120
	Investments held to maturity at amortized cost				11,421			2,832
	Accounts receivable, net				46,129			43,866
	Income tax receivable				1,769			694
	Note receivable				29			28
	Inventories, net				33,383			32,614
	Prepaid expenses and other				619			740
	Deferred tax assets				5,296			4,493
Total current assets					109,121			91,546
Property, plant and equipment:
	Land				1,353			1,340
	Buildings				60,435			59,761
	Machinery and equipment				122,356			117,617
	Furniture and fixtures				9,539			8,906
		Total property, plant and equipment			193,683			187,624
		Less: Accumulated depreciation			105,975			96,929
	Property, plant and equipment, net				87,708			90,695
Certificates of deposit					4,483			2,120
Investments held to maturity at amortized cost					17,867			8,041
Note receivable					959			1,091
Total assets				$	220,138		$	193,493
Liabilities and Stockholders' Equity
Current liabilities:
	Revolving credit facility			$	--		$	--
	Accounts payable				12,795			13,047
	Dividends payable				--			--
	Accrued liabilities				30,314			26,578
Total current liabilities					43,109			39,625
Deferred revenue					358			--
Deferred tax liabilities					14,741			15,732
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued					--			--
Common stock, $.004 par value, 168,750,000 shares authorized, 36,709,890 and 36,776,624 issued and outstanding at September 30, 2013 and December 31, 2012, respectively*					147			147
Additional paid-in capital					--			--
Retained earnings					161,783			137,989
Total stockholders' equity					161,930			138,136
Total liabilities and stockholders' equity				$	220,138		$	193,493

*Reflects three-for-two stock split effective July 2, 2013

AAON, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
					Nine Months Ended  September 30,
					2013				2012
Operating Activities					(in thousands)
	Net income				$	29,781			$	19,871
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation				9,349				10,079
		Amortization of bond premiums				545				80
		Provision for losses on accounts receivable, net of adjustments				121				(7	)
		Provision for excess and obsolete inventories				468				--
		Share-based compensation				1,054				625
		Excess tax benefits from stock options exercised and restricted stock awards vested				(502	)			(267	)
		Gain on disposition of assets				(52	)			(17	)
		Foreign currency transaction gain (loss)				35				(40	)
		Interest income on note receivable				(31	)			--
		Deferred income taxes				(1,794	)			(987	)
		Write-off of note receivable				75				--
		Changes in assets and liabilities:
			Accounts receivable			(2,384	)			(8,227	)
			Income tax receivable			1,753				5,801
			Inventories			(1,237	)			(2,702	)
			Prepaid expenses and other			121				148
			Accounts payable			(227	)			2,681
			Deferred revenue			358				--
			Accrued liabilities			1,410				11,375
	Net cash provided by operating activities					38,843				38,413
Investing Activities
	Capital expenditures					(6,407	)			(12,582	)
	Proceeds from sale of property, plant and equipment					72				311
	Investment in certificates of deposits					(8,869	)			(4,280	)
	Maturities of certificates of deposits					1,440				1,060
	Purchases of investments held to maturity					(22,275	)			(5,624	)
	Maturities of investments					3,315				--
	Proceeds from called investment					--				270
	Principal payments from note receivable					52				20
	Net cash used in investing activities					(32,672	)			(20,825	)
Financing Activities
	Borrowings under revolving credit facility					8,325				34,847
	Payments under revolving credit facility					(8,325	)			(39,422	)
	Stock options exercised					986				1,053
	Excess tax benefits from stock options exercised and restricted stock awards vested					502				267
	Repurchase of stock					(4,817	)			(4,379	)
	Cash dividends paid to stockholders					(3,712	)			(2,950	)
	Net cash used in financing activities					(7,041	)			(10,584	)
Net (decrease) increase in cash and cash equivalents						(870	)			7,004
Cash and cash equivalents, beginning of period						3,159				13
Cash and cash equivalents, end of period					$	2,289			$	7,017