FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002
Commission file number: 33-183336-LA
AAON, INC.
----------
(Exact name of registrant as specified in its charter)
Nevada 87-0448736
------ ----------
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
2425 South Yukon, Tulsa, Oklahoma 74107
---------------------------------------
(Address of principal executive offices)
(Zip Code)
(918) 583-2266
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes |X| No
------------- ----------
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date. 13,223,904 shares of
$.004 par value Common Stock.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
On pages 5 through 11 of this report.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
AAON, Inc. engineers, manufactures and markets commercial rooftop
air-conditioning, heating and heat recovery equipment, chillers, air
conditioning coils, air handlers, and condensing units. AAON's primary products
are its RK, RL, RM and RN series units. Earlier this year, AAON introduced the
new, highly energy-efficient RM to replace the RK and an expanded air-handler
product. In the third quarter of 2002, a new, exclusive Modulating Hot Gas
Reheat feature was introduced for the rooftop product lines, condensing units
and air handlers. The new feature addresses humidity, mold and indoor air
quality problems that plague many environments due to excessive moisture.
AAON sells its products to property owners and contractors through a
network of manufacturers' representatives and its internal sales force. The
demand for AAON's products is influenced by national and regional economic and
demographic factors. The commercial and industrial new construction market is
subject to cyclical fluctuations in that it is generally tied to housing starts,
but has a lag factor of 6-18 months. Housing starts, in turn, are affected by
such factors as interest rates, the state of the economy, population growth and
the relative age of the population. When new construction is down, the Company
emphasizes the replacement market.
The principal components of cost of goods sold are labor, raw
materials, component costs, factory overhead, freight out and engineering
expense. The principal raw materials used in AAON's manufacturing processes are
steel, copper and aluminum. The major component costs include compressors,
electric motors and electronic controls.
Selling, general, and administrative costs include the Company's
internal sales force, warranty costs, profit sharing and administrative expense.
Warranty expense is estimated based on historical trends and other factors. The
Company's warranty period is generally one year from the date of first use or 15
months from date of shipment; however, compressors (if applicable) carry an
additional four-year warranty and gas-fired heat exchangers (if applicable) have
a 15-year warranty.
Set forth below is income statement information with respect to the
Company for the three-month and nine-month periods ended September 30, 2002, and
2001:
Three Months Ended Nine Months Ended
Sept. 30, 2002* Sept. 30, 2001* Sept. 30, 2002* Sept. 30, 2001*
*Unaudited (In thousands, except share and per share data)
Net Sales $ 41,702 $ 41,402 $117,873 $122,357
Cost of Sales 31,301 32,669 88,118 91,480
-------- -------- -------- --------
Gross profit 10,401 8,733 29,755 30,877
Selling, general and administrative
expenses 3,992 3,210 12,007 13,229
-------- -------- -------- --------
Income from operations 6,409 5,523 17,748 17,648
Income expense / (Interest income) (82) 115 (52) 723
Other income (80) (61) (237) (296)
-------- -------- -------- --------
Income before income taxes 6,571 5,469 18,037 17,221
Income tax provision 2,385 1,946 6,538 6,306
-------- -------- -------- --------
Net income $ 4,186 $ 3,523 $ 11,499 $ 10,915
======== ======== ======== ========
(1)
Results of Operations. In the third quarter of 2002, net sales
increased $300,000 (1%) from $41,402,000 to $41,702,000 compared to the same
period in 2001. Net sales during the nine-month period ended September 30, 2002
decreased by $4,484,000 (4%) from $122,357,000 to $117,873,000 compared to the
same period in 2001. The decrease in sales for the nine-month period ended
September 30, 2002, compared to the same period in 2001, resulted from a
slowdown in production caused by the heavy volume of new products being produced
in the second quarter, and from a slowdown in the construction market and
overall economic conditions. Sales to existing customers in the nine months
ending September 30, 2002 continued to account for 85% of the Company's
business, with the balance coming from new business.
Gross profit increased $1,668,000 (19%) from $8,733,000 to $10,401,000
for the three months ended September 30, 2002, and decreased $1,122,000 (4%)
from $30,877,000 to $29,755,000 for the nine months ended September 30, 2002,
compared to the same period in 2001. The increase in margins for the quarter
ended September 30, 2002 was due to increased production efficiencies and the
ability to maintain prices for basic commodities and raw materials due to
agreements with major suppliers. The decrease in margins for the nine months
ended September 30, 2002 was primarily attributable to start-up costs related to
the production of new products and lower plant utilization due to the decrease
in sales in the second quarter.
SG&A expenses increased by $782,000 (24%) from $3,210,000 to
$3,992,000 for the three months ended September 30, 2002, but decreased
$1,222,000 (9%) from $13,229,000 to $12,007,000 for the nine months ended
September 30, 2002, compared to the same period in 2001. The quarter increase
was primarily due to an increase in warranty expense related to new products
that began shipping late in the second quarter. The nine-month decrease was
attributable to a decrease in warranty expense and bad debt expense.
Interest income was $82,000 for the three months ended September 30,
2002 and $52,000 for the nine months ended September 30, 2002. The Company had
interest expense of $115,000 for the three months and $723,000 for the nine
months for the same periods in 2001. The Company had no debt and certificates of
deposit investments in 2002, versus debt in 2001.
Other income increased from $61,000 to $80,000 (31%) for the quarter
ended September 30, 2002 compared to the quarter ended September 30, 2001, and
decreased $59,000 from $296,000 to $237,000 (20%) for the nine months ended
September 30, 2002, primarily due to a decrease in rental income.
Financial Condition and Liquidity. The Company generated $14,647,000
and $14,560,000 cash from operating activities during the nine months ended
September 30, 2002 and September 30, 2001, respectively. The increase in cash
allowed the investment of $10 million in certificates of deposits. These funds
and subsequent cash flows will be retained for general working purposes, the
company stock buyback program and future business opportunities.
Accounts receivable increased $3,502,000 at September 30, 2002
compared to December 31, 2001, due to an increase in sales of $6,807,000 in the
third quarter of this year compared to the fourth quarter of 2001, and a slower
pay cycle by a few customers in the third quarter.
Inventories increased by $1,166,000 at September 30, 2002, compared to
December 31, 2001, due to the procurement of inventory levels needed to meet
projected production demands and the additional inventory needed for the
manufacturing of new products.
Prepaid expenses increased $775,000 at September 30, 2002, compared to
December 31, 2001, due to deposits made on equipment acquisitions.
(2)
Property, plant and equipment additions totaled $2,835,000 for the
nine months ended September 30, 2002, reflecting primarily additions to
machinery and equipment and building renovations. All capital expenditures and
building renovations in the first nine months of 2002 were financed out of cash
generated from operations.
Accounts payable and accrued liabilities increased by $5,000,000 at
September 30, 2002, compared to December 31, 2001, due primarily to an increase
in income taxes payable, warranty and timing of payments to vendors.
Management believes the Company's bank revolving credit facility (or
comparable financing), term loans, and projected cash flows from operations will
provide the necessary liquidity and capital resources to the Company for the
foreseeable future. The Company's belief that it will have the necessary
liquidity and capital resources is based upon its knowledge of the HVAC industry
and its place in that industry, its ability to limit the growth of its business
if necessary, and its relationship with its existing bank lender. For
information concerning the Company's long-term debt at September 30, 2002, see
Note 5 to the Financial Statements.
Critical Accounting Policies. The preparation of financial statements
in conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates. The Company re-evaluates its estimates and assumptions on
a monthly basis.
The following accounting policies may involve a higher degree of
estimation or assumption:
Allowance for Doubtful Accounts - The Company establishes an allowance
for doubtful accounts based upon factors surrounding the credit risk of specific
customers, historical trends, economic and market conditions, the age of the
receivable and other information.
Allowance for Excess and Obsolete Inventories - The Company
establishes an allowance for excess and obsolete inventories based on the change
in inventory due to product line changes, the feasibility of substituting parts
and the need for part supply sales and replacement parts.
Warranty - A provision is made for the estimated cost of warranty
obligation at the time the products are sold. Warranty expense is estimated
based on the Company's warranty period, historical trends, new products in the
field, any known identifiable warranty issues and other factors.
Forward-Looking Statements
This report includes "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Words such as
"expects," "anticipates," "intends," "believes," "seeks," "estimates," "will,"
and variations of such words and similar expressions are intended to identify
such forward-looking statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties, and assumptions, which are
difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecasted in such forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date on which they are
made. The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. Important factors that could cause actual results to differ
materially from those in the forward-looking statements include: (1) the timing
and extent of changes in material prices, (2) the effects of fluctuations in the
commercial/industrial new construction market, (3) the timing and extent of
changes in interest rates, as well as other competitive factors during the year,
and (4) general economic, market or business conditions.
(3)
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Foreign sales account for less than 2% of the Company's total sales
and the Company accepts payment for such sales only in U.S. dollars; hence, the
Company is not exposed to any foreign currency exchange rate risk.
Important raw materials purchased by the Company are steel, copper and
aluminum, which are subject to price fluctuations. The Company attempts to limit
the impact of price increases on these materials by negotiating with each of its
major suppliers on a term basis from six months to one year.
Item 4. Controls and Procedures.
As of September 30, 2002, an evaluation of the effectiveness of the
design and operation of the Company's disclosure controls and procedures was
performed under the supervision and with the participation of the Company's
management including the CEO and CFO. Based on that evaluation, the Company's
management, including the CEO and CFO, concluded that the Company's disclosure
controls and procedures were effective as of September 30, 2002. There have been
no significant changes in the Company's internal controls or in other factors
that could significantly affect internal controls subsequent to September 30,
2002.
Item 5. Other Events.
On October 17, 2002, the Company announced a stock buyback program to
repurchase up to 10% (1,325,000 shares) of its outstanding stock.
(4)
AAON, Inc.
Consolidated Balance Sheets
Sept. 30, 2002* December 31, 2001
(In thousands, except share and per share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,784 $ 1,123
Accounts receivable 26,894 23,392
Inventories 14,637 13,471
Prepaid expenses 995 220
Deferred income tax 4,067 4,067
---------- ----------
Total current assets
48,377 42,273
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PROPERTY, PLANT AND EQUIPMENT, at cost
Land 874 874
Buildings 18,206 16,893
Machinery and equipment 36,616 35,331
Furniture and fixtures 3,434 3,197
---------- ----------
Total property, plant & equipment 59,130 56,295
Less: accumulated depreciation 25,864 22,273
---------- ----------
Net property, plant & equipment 33,266 34,022
Certificates of deposit 10,000 -
Total Assets $91,643 $76,295
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 9,224 $ 8,005
Accrued liabilities 17,277 13,496
Current maturities of long-term debt - 884
---------- ----------
Total current liabilities 26,501 22,385
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DEFERRED TAX LIABILITY 2,884 2,884
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LONG-TERM DEBT - 985
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STOCKHOLDERS' EQUITY
Preferred Stock, $.001 par; 5,000,000 shares
authorized, no shares issued - -
Common Stock, $.004 par; 50,000,000 share
authorized, 13,223,904 and 12,999,310 issued and
outstanding at Sept. 30, 2002, and
December 31, 2001, respectively** 53 53
Additional paid-in capital 1,781 1,063
Retained earnings** 60,424 48,925
---------- ----------
Total stockholders' equity 62,258 50,041
Total Liabilities and Stockholders' Equity $91,643 $76,295
========== ==========
*Unaudited
**Reflects stock split effective June 4, 2002
(5)
AAON, Inc.
Consolidated Statements of Operations
Three Months Ended Nine Months Ended
Sept. 30, 2002* Sept. 30, 2001* Sept. 30, 2002* Sept. 30, 2001*
(In thousands, except share and per share data)
Net sales $ 41,702 $ 41,402 $ 117,873 $ 122,357
Cost of sales 31,301 32,669 88,118 91,480
---------------- ------------------ ----------------- ------------------
Gross profit 10,401 8,733 29,755 30,877
Selling, general and administrative expenses 3,992 3,210 12,007 13,229
---------------- ------------------ ----------------- ------------------
Income from operations 6,409 5,523 17,748 17,648
Interest expense (interest (82) 115 (52) 723
income)
Other income (80) (61) (237) (296)
---------------- ------------------ ----------------- ------------------
Income before income taxes 6,571 5,469 18,037 17,221
Income tax provision 2,385 1,946 6,538 6,306
---------------- ------------------ ----------------- ------------------
Net Income $ 4,186 $ 3,523 $ 11,499 $ 10,915
================ ================== ================= ==================
Earnings Per Share**
Basic $ 0.32 $ 0.27 $ 0.87 $ 0.84
================ ================== ================= ==================
Diluted $ 0.30 $ 0.26 $ 0.84 $ 0.80
Weighted Average Shares Outstanding**
Basic 13,220,792 13,072,703 13,165,747 12,990,378
================ ================== ================= ==================
Diluted 13,794,595 13,735,409 13,746,839 13,638,431
================ ================== ================= ==================
*Unaudited
**Reflects split effective June 4, 2002
(6)
AAON, Inc.
Consolidated Statements of Stockholders' Equity
Common Stock Paid in Retained
Shares Amount Capital Earnings Total
------ ------ ------- -------- -----
(In thousands)
Balance, December 31, 2001** 12,999 $ 53 $1,063 $48,925 $ 50,041
Exercise of Common Stock Options*
225 - 718 - 718
Net Income* - - - 11,499 11,499
----------- ------------ ------------ -------------- ------------
Balance, September 30, 2002*, ** 13,224 $ 53 $1,781 $60,424 $62,258
=========== ============ ============ ============== ============
*Unaudited
**Reflects stock split effective June 4, 2002
(7)
AAON, Inc.
Consolidated Statements of Cash Flows
Nine Months Ended Nine Months Ended
Sept. 30, 2002* Sept. 30, 2001*
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 11,499 $ 10,915
----------------- ------------------
Adjustments to reconcile net income to net cash
provided by operating activities-
Depreciation and Amortization 3,591 3,129
Change in assets and liabilities:
(increase) decrease in:
Accounts Receivable (3,502) 2,062
Inventories (1,166) 1,732
Prepaid Expenses (775) 20
Increase (decrease) in:
Accounts Payable 1,219 (5,134)
Accrued Liabilities 3,781 1,836
----------------- ------------------
Total Adjustments 3,148 3,645
----------------- ------------------
Net cash provided by Operating Activities 14,647 14,560
----------------- ------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures (2,835) (7,539)
Investments in Certificates of Deposit (10,000) -
----------------- ------------------
Net cash used in Investing Activities (12,835) (7,539)
----------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowing under Revolving Credit Agreement 23,613 48,993
Payments under Revolving Credit Agreement (24,058) (53,043)
Payments of long-term debt (1,424) (769)
Exercise of Stock Options 718 586
Repurchase of Common Stock - (2,777)
----------------- ------------------
Net cash used in Financing Activities (1,151) (7,010)
----------------- ------------------
NET CHANGE IN CASH 661 11
CASH, beginning of period 1,123 17
----------------- ------------------
CASH, end of period $ 1,784 $ 28
================= ==================
*Unaudited
(8)
AAON, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2002
1. BASIS OF PRESENTATION:
---------------------
The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission (SEC). Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or
omitted pursuant to such rules and regulations. The Company believes that the
disclosures made in these financial statements are adequate to make the
information presented not misleading when read in conjunction with the financial
statements and the notes thereto included in the Company's latest audited
financial statements which were included in the Form 10-K Report for the fiscal
year ended December 31, 2001, filed by AAON, Inc. with the SEC. Certain
reclassifications of prior year amounts have been made to conform to current
year presentations. These reclassifications had no impact on net income.
Management believes that no adjustments to the financial statements are
necessary.
2. CASH AND CASH EQUIVALENTS
-------------------------
Cash and cash equivalents of $1,784,000 consist of bank deposits and
highly liquid, interest-bearing money market funds with initial maturities of
three months or less.
3. INVENTORIES:
------------
Inventories at September 30, 2002 (unaudited), and December 31, 2001,
consist of the following:
September 30, 2002 December 31, 2001
------------------- ------------------
Raw Materials $ 11,404,000 $ 10,376,000
Work in Process 2,949,000 2,258,000
Finished Goods 1,484,000 1,687,000
------------------- ------------------
Total Inventory 15,837,000 14,321,000
Less Allowance for Excess
and Obsolete Inventory 1,200,000 850,000
------------------- ------------------
$ 14,637,000 $ 13,471,000
=================== ==================
4. LONG-TERM INVESTMENTS:
----------------------
Long-term investments consist of a $10 million certificate of deposit
bearing interest at 3.25% per annum with a maturity date of June 12, 2004. There
is a three-month interest penalty for early withdrawal.
(9)
5. LONG-TERM DEBT:
---------------
Long-term debt at September 30, 2002 (unaudited), and December 31,
2001, consists of the following:
Sept. 30, 2002 Dec. 31, 2001
-------------- -------------
$15,150,000 bank line of credit
with interest payable monthly
at LIBOR plus 1.60% (3.42%
at September 30, 2002) due July 31, 2002 -0- $ 446,000
Three notes payable bearing interest
at 7.47%, and 7.52%, collateralized by
machinery and equipment -0- 1,423,000
-------------- -------------
-0- 1,869,000
Less: Current Maturities -0- 884,000
-------------- -------------
-0- $ 985,000
============== =============
On July 30, 2002, the bank renewed the line of credit with a maturity
date of July 31, 2003.
6. STOCKHOLDER RIGHTS PLAN:
------------------------
On August 20, 2002, the Board of Directors amended the Company's
Stockholder Rights Plan. The plan creates a dividend of one right for each
outstanding share of the Company's common stock. The rights are traded with the
Company's common stock. Generally, the rights become exercisable after a public
announcement that a person has acquired, or tender offer is made for, 15% or
more of the common stock of the Company. If either of these events occur, each
right will entitle the holder (other than a holder owning more than 15% of the
outstanding stock) to buy the number of shares of the Company's common stock
having a market value two times the exercise price. The exercise price is $90.
The rights may be redeemed by the company for $0.001 per right until a person or
group has acquired 15% of the Company's common stock. The initial distribution
of the rights was made to stockholders of record as of March 1, 1999. The Final
Expiration Date of the Rights is August 20, 2012.
7. NEW ACCOUNTING PRONOUNCEMENTS:
------------------------------
In July 2001, the FASB issued Statement of Financial Accounting
Standards (SFAS) No. 141, "Business Combinations" (Statement 141), SFAS No. 142,
"Goodwill and Other Intangible Assets" (Statement 142), and SFAS No. 143,
"Accounting for Asset Retirement Obligations" (Statement 143). In October 2001,
the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal for
Long-Lived Assets" (Statement 144).
Statement 141 requires that the purchase method of accounting be used
for all business combinations initiated after June 30, 2001. The adoption of
Statement 141 had no material impact on the Company's results of operations or
financial condition.
Statement 142 requires that goodwill and intangible assets with
indefinite useful lives no longer be amortized, but instead be tested for
impairment at least annually in accordance with the provisions of Statement 142.
The Company was required to adopt the provisions of Statement 142 effective
January 1, 2002. The adoption of Statement 142 had no material impact on the
Company's results of operations or financial condition.
Statement 143 requires entities to record the fair value of a liability
for an asset retirement obligation in the period in which it is incurred and a
corresponding increase in the carrying amount of the long-lived asset. Statement
143 is effective for fiscal years beginning after June 15, 2002. The Company is
currently assessing the impact of Statement 143 on its financial condition and
results of operations.
(10)
Statement 144 supersedes, but retains the basic framework of SFAS 121
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," including provisions relating to asset impairment, and the
requirement to report discontinued operations separately and extends that
reporting to a component of an entity that either has been disposed of or is
classified as held for sale. The Company was required to adopt Statement 144
effective January 1, 2002. The adoption of Statement 144 had no material impact
on the Company's results of operations or financial condition.
8. FOOTNOTES INCORPORATED BY REFERENCE:
------------------------------------
Certain footnotes are applicable to the financial statements, but would
be substantially unchanged from those presented in the December 31, 2001, 10-K
filed with the SEC. Accordingly, reference should be made to this statement for
the following:
Note Description
======== ================================================================
1 Business and Summary of Significant Accounting Policies
4 Income Taxes
5 Benefit Plans
7 Contingencies
(11)
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits: 99.1 - Certification of CEO
99.2 - Certification of CFO
(b) Reports on Form 8-K: Registrant filed two reports on Form
8-K during the three-month period ended September 30, 2002,
one reporting an amendment of its Second Restated Revolving
Credit Loan Agreement on July 30, 2002, and the other
reporting amendments of its Rights Agreement on August
20, 2002, to increase the exercise price of a Right to $90
per share, extend the term of the Plan to August 20, 2012,
and reduce the percentage ownership that will trigger the
Rights Plan to 15%.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AAON, INC.
Dated: November 13, 2002 By: /s/ Norman H. Asbjornson
----------------------------
Norman H. Asbjornson
President
Dated: November 13, 2002 By: /s/ Kathy I. Sheffield
----------------------------
Kathy I. Sheffield
Treasurer
(12)
CERTIFICATION
I, Norman H. Asbjornson, President/CEO of AAON, INC. certify that:
1. I have reviewed this quarterly report on Form 10-Q of AAON, Inc.:
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared:
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Dated: November 13, 2002 /s/ Norman H. Asbjornson
-----------------------
Norman H. Asbjornson
President/CEO
(13)
CERTIFICATION
I, Kathy I. Sheffield, Treasurer/CFO of AAON, INC. certify that:
1. I have reviewed this quarterly report on Form 10-Q of AAON, Inc.:
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared:
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Dated: November 13, 2002 /s/ Kathy I. Sheffield
----------------------
Kathy I. Sheffield
Treasurer/CFO
(14)
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of AAON, Inc. (the "Company"), on
Form 10-Q for the Period ended September 30, 2002, as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Norman H.
Asbjornson, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the company.
/s/Norman H. Asbjornson
Chief Executive Officer
November 13, 2002
(15)
Exhibit 99.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of AAON, Inc. (the "Company"), on
Form 10-Q for the Period ended September 30, 2002, as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Kathy I.
Sheffield, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the company.
/s/ Kathy I. Sheffield
Kathy I. Sheffield
Chief Financial Officer
November 13, 2002
(16)