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 March 31, 2003
Commission file number: 33-183336-LA
AAON, INC.
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(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 by check mark whether the Registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act).
Yes |X| No
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As of March 31, 2003, Registrant had outstanding a total of 12,791,383
shares of its $.004 par value Common Stock.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
On pages 6 through 11 of this report.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The Company engineers, manufactures and markets commercial rooftop
air-conditioning, heating and heat recovery equipment, chillers,
air-conditioning coils, air handlers and condensing units. The Company's primary
products are its RK, RL, RM and RN Series units. The highly energy efficient RM
and RN units, which were introduced in 2002, are replacing the RK. AAON has also
introduced an expanded air handler product and a Modulating Hot Gas Reheat
feature 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. 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
warranty period is: for parts only, the earlier of one year from the date of
first use or 15 months from date of shipment; compressors (if applicable), an
additional four years; on gas-fired heat exchangers (if applicable), 15 years;
and on stainless steel heat exchangers (if applicable), 25-year warranty.
The plant and office facilities of AAON, Inc. consists of a 337,000
square foot building (322,000 sq. ft. of manufacturing/warehouse space and
15,000 sq. ft. of office space) located at 2425 S. Yukon Avenue, Tulsa, Oklahoma
(the "original facility"), and a 457,000 square foot manufacturing/warehouse
building and a 22,000 square foot office building (the "expansion facility")
that is located across the street from the original facility. The Company
utilizes 25% of the expansion space and the remaining 75% is leased to third
parties. The operations of AAON Coil Products are conducted in a plant/office
building at 203-207 Gum Springs Road in Longview, Texas, containing 226,000
square feet (219,000 sq. ft. of manufacturing/warehouse and 7,000 sq. ft. of
office space).
-1-
Set forth below is income statement information with respect to the
Company for the three-months ended March 31, 2003, and 2002:
AAON, Inc.
Consolidated Statements of Operations
Three Months Ended
March 31, 2003* March 31, 2002*
----------------- -----------------
(in thousands)
Net sales $ 32,856 $ 35,990
Cost of Sales 24,159 26,373
----------------- -----------------
Gross profit 8,697 9,617
Selling, general and administrative expenses 3,196 3,936
----------------- -----------------
Income from operations 5,501 5,681
Interest expense 6 28
Interest income (58) (25)
Other (income) expense (84) (63)
----------------- -----------------
Income before income taxes 5,637 5,741
Income tax provision 2,142 2,094
----------------- -----------------
Net Income $ 3,495 $ 3,647
================= =================
*Unaudited
Results of Operations. Net sales decreased $3,134,000 (8.7%) to
$32,856,000 from $35,990,000 for the three months ended March 31, 2003, compared
to the same period in 2002. The decrease in sales was due to a slowdown in the
construction market caused by a downturn in the economy and the continued
uncertainty about future economic conditions. Sales to existing customers in the
three months ended March 31, 2003 continued to account for 85% of the Company's
business, with the balance coming from new business.
Gross profit for the three months ended March 31, 2003 was 26.47%
compared to 26.72% for the same period in 2002. The decrease in margins was
primarily attributable to lower sales volume of higher margin orders and higher
sales volume of lower margin orders.
Selling, general and administrative expenses decreased by $740,000
(18.8%) to $3,196,000 from $3,936,000 for the three months ended March 31, 2003
compared to the same period in 2002. The decrease was primarily due to a
decrease in warranty expense related to improved product quality.
Interest expense decreased $22,000 for the three months ended March 31,
2003, compared to the same period in 2002, due to the retirement of all
long-term debt in 2002 and lower average borrowings under the revolving credit
facility.
Interest income increased $33,000 for the three months ended March 31,
2003, compared to the same period in 2002 due to investments in short-term money
markets and a certificate of deposit.
-2-
The Company's effective tax rate increased 1% to 38% from 37% in 2003
compared to 2002.
Financial Condition and Liquidity. Accounts receivable decreased $2.3
million at March 31, 2003, compared to December 31, 2002, due to improved
collection results and a decrease in sales.
Inventories increased $1.2 million at March 31, 2003, compared to
December 31, 2002, due to the procurement of additional inventory required for
the manufacturing of new products and to the rescheduling of some ship dates of
equipment by the customer that increased finished goods in the first quarter of
this year compared to 2002.
Property, plant and equipment increased $1.3 million at March 31, 2003,
compared to December 31, 2002, reflecting primarily additions to machinery and
equipment and building renovations. All capital expenditures and building
renovations were financed out of cash generated from operations.
Accrued liabilities increased $3.1 million at March 31, 2003, compared
to December 31, 2002, due primarily to timing of payments to vendors.
Management believes the Company's bank revolving credit facility (or
comparable financing) 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 revolving credit facility at March 31, 2003, see Note 6 to the
financial statements included in this report.
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. Because these estimates and
assumptions require significant judgment, future actual results could differ
from those estimates and could have a significant impact on the Company's
results of operations, financial position and cash flows. 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 in collections and write-offs, current customer
status, the age of the receivable, economic conditions and other information.
Aged receivables are reviewed on a monthly basis to determine if the reserve is
adequate.
Allowance for Excess and Obsolete Inventories - The Company establishes
an allowance for excess and obsolete inventories based on the change in
inventory requirements due to product line changes, the feasibility of using
obsolete parts for upgraded part substitutions, the required parts needed for
part supply sales and replacement parts.
-3-
Warranty - A provision is made for the estimated cost of warranty
obligation at the time the product is shipped and revenue is recognized. The
warranty period is: for parts only, the earlier of one year from the date of
first use or 15 months from date of shipment; compressors (if applicable), an
additional four years; on gas-fired heat exchangers (if applicable), 15 years;
and on stainless steel heat exchangers (if applicable), 25 years. Warranty
expense is estimated based on the Company's warranty period, historical warranty
trends and associated costs, and any known identifiable warranty issue. Due to
the absence of warranty history on new products, an additional provision may be
made for such products.
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," 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.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
While the Company is exposed to changes in interest rates, a
hypothetical 10% change in interest rates on its variable rate borrowings would
not have a material effect on the Company's earnings or cash flow.
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 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.
Evaluation of Disclosure Controls and Procedures
Within the 90-day period prior to the filing date of this Quarterly
Report on Form 10-Q, the Company's management, under the supervision and with
the participation of the Company's Chief Executive Officer and Chief Financial
Officer, evaluated the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on that evaluation, the
Company's Chief Executive Officer and Chief Financial Officer believe that:
-4-
o the Company's disclosure controls and procedures are designed to
ensure that information required to be disclosed by the Company in the
reports it files under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms; and
o the Company's disclosure controls and procedures operate such that
important information flows to appropriate collection and disclosure
points in a timely manner and are effective to ensure that such
information is accumulated and communicated to the Company's
management, and made known to the Company's Chief Executive Officer
and Chief Financial Officer, particularly during the period when this
Quarterly Report was prepared, as appropriate to allow timely
decisions regarding the required disclosure.
Changes in internal controls
There have been no significant changes in the Company's internal
controls or other factors that could significantly affect the Company's internal
controls subsequent to their evaluation, nor have there been any corrective
actions with regard to significant deficiencies or material weaknesses.
Item 5. Other Events.
On October 17, 2002, the Company announced a new stock buyback program
to repurchase up to 10% (1,325,000 shares) of its outstanding stock. Through
March 31, 2003, the Company had acquired 464,096 shares of its stock pursuant to
its most recent buyback program.
-5-
AAON, Inc.
Consolidated Balance Sheets
March 31, 2003* December 31, 2002
------------------- -------------------
(in thousands, except per share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 4,869 $ 5,071
Accounts receivable, net 20,053 22,306
Inventories 15,585 14,338
Prepaid expenses 579 599
Deferred income tax 4,168 4,168
------------------- -------------------
Total current assets 45,254 46,482
------------------- -------------------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land 874 874
Buildings 18,530 18,394
Machinery and equipment 40,751 39,580
Furniture and fixtures 3,532 3,497
------------------- -------------------
Total property, plant & equipment 63,687 62,345
Less: accumulated depreciation 28,352 27,114
------------------- -------------------
Net property, plant & equipment 35,335 35,231
CERTIFICATE OF DEPOSIT 10,000 10,000
------------------- -------------------
Total assets $ 90,589 $ 91,713
=================== ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving credit facility $ - $ 3,566
Accounts payable 8,292 8,418
Accrued liabilities 16,402 13,349
------------------- -------------------
Total current liabilities 24,694 25,333
------------------- -------------------
DEFERRED TAX LIABILITY 4,070 4,070
------------------- -------------------
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value, 5,000,000 shares
authorized, no shares issued - -
Common stock, $.004 par value, 50,000,000 shares
authorized; 12,791,383 and 13,030,916 issued
and outstanding at March 31, 2003 and
December 31, 2002, respectively 51 52
Additional paid-in capital - -
Retained earnings 61,774 62,258
------------------- -------------------
Total stockholders' equity 61,825 62,310
------------------- -------------------
Total liabilities and stockholders' equity $ 90,589 $ 91,713
=================== ===================
*Unaudited
-6-
AAON, Inc.
Consolidated Statements of Operations
Three Months Ended
March 31, 2003* March 31, 2002*
----------------- -----------------
(in thousands, except share and per share data)
Net sales $ 32,856 $ 35,990
Cost of sales 24,159 26,373
----------------- -----------------
Gross profit 8,697 9,617
Selling, general and administrative expenses 3,196 3,936
----------------- -----------------
Income from operations 5,501 5,681
Interest expense 6 28
Interest income (58) (25)
Other income (84) (63)
----------------- -----------------
Income before income taxes 5,637 5,741
Income tax provision 2,142 2,094
----------------- -----------------
Net Income $ 3,495 $ 3,647
================= =================
Earnings Per Share**
Basic $ 0.27 $ 0.27
================= =================
Diluted $ 0.26 $ 0.27
================= =================
Weighted Average Shares Outstanding**
Basic 12,880,299 13,094,634
================= =================
Diluted 13,415,455 13,689,822
================= =================
* Unaudited
** Reflects stock split effective June 4, 2002
-7-
AAON, Inc.
Consolidated Statements of Stockholders' Equity
Common Stock Paid in Retained
Shares Amount Capital Earnings Total
----------- ------------ ----------- ------------- --------------
(in thousands)
Balance, December 31, 2002 13,031 $ 52 $ - $ 62,258 $ 62,310
Exercise of Common Stock Options* 8 - 28 - 28
Repurchase of Common Stock* (248) (1) (28) (3,979) (4,008)
Net Income* - - - 3,495 3,495
----------- ------------ ----------- ------------- --------------
Balance, March 31, 2003* 12,791 $ 51 $ - $ 61,774 $ 61,825
=========== ============ =========== ============= ==============
*Unaudited
-8-
AAON, Inc.
Consolidated Statements of Cash Flows
Three Months Ended Three Months Ended
March 31, 2003* March 31, 2002*
-------------------- --------------------
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 3,495 $ 3,647
----------- -----------
Adjustments to reconcile net income to net cash
provided by operating activities-
Depreciation and amortization 1,238 1,203
Change in assets and liabilities:
(Increase) decrease in:
Accounts receivable 2,253 832
Inventories (1,247) (598)
Prepaid expenses 20 (211)
Increase (decrease) in:
Accounts payable (126) (1,000)
Accrued liabilities 3,053 3,137
----------- -----------
Total adjustments 5,191 3,363
----------- -----------
Net cash provided by operating activities 8,686 7,010
----------- -----------
CASH FLOWS USED IN INVESTING ACTIVITIES**
Capital expenditures (1,342) (322)
----------- -----------
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Borrowing under revolving credit facility
Payments under revolving credit facility 6,324 8,840
Payments of long-term debt (9,890) (6,582)
Exercise of stock options - (135)
Repurchase of common stock 28 719
(4,008) -
----------- -----------
Net cash provided by (used in) financing activities (7,546) 2,842
----------- -----------
NET CHANGE IN CASH (202) 9,530
CASH AND CASH EQUIVALENTS, beginning of period
5,071 1,123
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 4,869 $ 10,653
=========== ===========
*Unaudited
**See Note 4 concerning certificates of deposits
-9-
AAON, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 2003
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, 2002, 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. In the
opinion of management, the accompanying financial statements include all normal,
recurring adjustments required for a fair presentation of the results of the
periods presented. Operating results for the three months ended March 31, 2003,
are not necessarily indicative of the results that may be expected for the year
ending December 31, 2003.
STOCK COMPENSATION:
------------------
The Company accounts for its Stock Option Plan under the recognition and
measurement principles of APB Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations. No stock-based employee compensation
cost is reflected in net income, as all options granted under the plan had an
exercise price equal to the market value of the underlying common stock on the
date of grant. The effect on net income and earnings per share if the Company
had applied the fair value recognition provisions of SFAS No. 123, Accounting
for Stock-Based Compensation, to stock-based employee compensation is as
follows:
March 31, 2003 March 31, 2002
---------------- ----------------
(in thousands except per share data)
Net income as reported $3,495 $3,647
Deduct: Total stock-based employee
compensation expense determined under
fair value method for all awards, net of
related tax effects (131) (291)
================ ================
Pro forma net income 3,364 3,356
Earnings per share:
Basic, as reported $ 0.27 $ 0.27
================ ================
Basic, pro forma $ 0.26 $ 0.26
================ ================
Diluted, as reported $ 0.26 $ 0.27
================ ================
Diluted, pro forma $ 0.25 $ 0.25
================ ================
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2. CASH AND CASH EQUIVALENTS:
--------------------------
Cash and cash equivalents consist of bank deposits and highly liquid,
interest-bearing money market funds with initial maturities of three months or
less.
3. INVENTORIES:
------------
Inventories are valued at the lower of cost or market. Cost is determined by the
first-in, first-out (FIFO) method. The Company establishes an allowance for
excess and obsolete inventories based on product line changes, the feasibility
of substituting parts and the need for supply and replacement parts. At March
31, 2003 (unaudited), and December 31, 2002, inventory and the related allowance
for excess and obsolete inventories are as follows (in thousands):
March 31, 2003 December 31, 2002
------------------- -------------------
Raw materials $11,243 $11,508
Work in process 3,546 2,750
Finished goods 1,796 1,080
------------------- -------------------
$16,585 $15,338
Less: allowance for excess
and obsolete raw materials inventory 1,000 1,000
------------------- -------------------
$15,585 $14,338
=================== ===================
4. CERTIFICATE OF DEPOSITS:
------------------------
The $10 million certificate of deposit bears interest at 3.25% per annum and
matures on June 12, 2004. There is a three-month interest penalty for early
withdrawal.
5. WARRANTIES:
-----------
A provision is made for the estimated cost of warranty obligations at the time
the related products are sold based upon the warranty period, historical trends,
new products and any known identifiable warranty issues.
Changes in the Company's warranty liability during the three months ended March
31, 2003, and 2002, are as follows (in thousands):
March 31, 2003 March 31, 2002
------------------ ------------------
Balance, beginning of the period $ 7,200 $ 7,000
Warranties accrued during the period 487 1,277
Warranties settled during the period (378) (442)
------------------ ------------------
$ 7,309 $ 7,835
================== ==================
6. REVOLVING CREDIT FACILITY:
--------------------------
The $15,150,000 bank line of credit has interest payable monthly at LIBOR plus
1.60% (2.94% at March 31, 2003) with a maturity date of July 31, 2003. At March
31, 2003, the Company had no outstanding balance on the bank line of credit and
had $3,566,000 outstanding at December 31, 2002.
-11-
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits - None.
(b) Registrant did not file any reports on Form 8-K during the
three-month period ended March 31, 2003.
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: May 2, 2003 By: /s/ Norman H. Asbjornson
-------------------------------------------
Norman H. Asbjornson
President
Dated: May 2, 2003 By: /s/ Kathy I. Sheffield
-------------------------------------------
Kathy I. Sheffield
Treasurer
-12-
CERTIFICATION
I. I, Norman H. Asbjornson, 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 (or persons
performing the equivalent functions):
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: May 2, 2003 /s/ Norman H. Asbjornson
---------------------------
Norman H. Asbjornson
Chief Executive Officer
-13-
CERTIFICATION
II. I, Kathy I. Sheffield, 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 (or persons
performing the equivalent functions):
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: May 2, 2003 /s/ Kathy I. Sheffield
---------------------------
Kathy I. Sheffield
Chief Financial Officer
-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 quarter ended March 31, 2003, 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 result of operations of the
Company.
/s/ Norman H. Asbjornson
- ---------------------------
Norman H. Asbjornson
Chief Executive Officer
-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 quarter ended March 31, 2003, 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 result of operations of the
Company.
/s/ Kathy I. Sheffield
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Kathy I. Sheffield
Chief Financial Officer
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