AAON, INC. - FORM 8-K - EX-99.1 - EXHIBIT - March 13, 2014

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Exhibit 99.1                        
NEWS
BULLETIN
 
AAON, Inc.
 
2425 South Yukon Ave. Ÿ Tulsa, OK 74107-2728
 
Ÿ Ph: (918) 583-2266 Ÿ   Fax: (918) 583-6094 Ÿ
 
Ÿhttp://www.aaon.comŸ
 
 
 
 
 
FOR IMMEDIATE RELEASE
MARCH 13, 2014
 
For Further Information:
 
Jerry R. Levine Ÿ Phone: (914) 244-0292 Ÿ Fax: (914) 244-0295
 
Email: jrladvisor@yahoo.com

AAON REPORTS RECORD EARNINGS
FOR FOURTH QUARTER AND YEAR 2013

TULSA, OK, March 13, 2014 - AAON, INC. (NASDAQ-AAON), today announced its operating results for the fourth quarter and year 2013. Sales in the fourth quarter were $73.4 million, down 5.9% from $78.0 million in 2012. Net income was a record $7.8 million, up 2.6% from $7.6 million in the same period a year ago. Sales for the year 2013 were a record $321.1 million, up 5.9% compared to $303.1 million in 2012. Earnings for 2013 were also a record, $37.5 million, up 36.9% compared to $27.4 million in 2012.

Earnings for the fourth quarter of 2013 and 2012 were both $0.21 per diluted share, based upon 37.1 million and 36.9 million diluted shares outstanding, respectively. Earnings per diluted share for year 2013 were $1.01, up 36.5% from $0.74 in 2012, based upon 37.1 million and 37.0 million diluted shares outstanding, respectively. All per share earnings reflect the 3-for-2 stock split effective July 2, 2013.

Norman H. Asbjornson, President and CEO, stated, “The 2013 gains in sales and income from operations primarily reflect increases in market share, as well as price increases and a decline in cost of materials; gross profit as a percent of sales increased from 23.3% to 28.0%, but SG&A expenses as a percent of sales also increased from 8.7% to 10.6%, the majority of which (SG&A) represents increases in warranty expense and 'profit sharing'."

Mr. Asbjornson continued, "The Company’s backlog increased from $43.6 million at December 31, 2012 to $45.3 million at December 31, 2013. In addition, the Company's balance sheet at year end was strong. The current ratio was 3.1:1 (including cash and investments of $49.9 million). We remained debt free and our return on average stockholder equity was 24.8% in 2013."

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 2014. Based upon this forecast and other factors, we anticipate AAON having another good year in 2014."

The Company will host a conference call today at 4:15 P.M. EDT to discuss the fourth quarter and year 2013 results. To participate, call 1-866-544-4631; or, for rebroadcast, call 1-866-245-6755 (code 14576).

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.


1


AAON, Inc. and Subsidiaries
Unaudited Consolidated Statements of Income
 
Three Months Ended 
 December 31,
 
 
Years Ending
December 31,
 
 
2013
 
2012
 
 
2013
 
2012
 
 
(in thousands, except share and per share data)
 
Net sales
$
73,376

 
$
78,008

 
 
$
321,140

 
$
303,114

 
Cost of sales
53,188

 
59,279

 
 
231,348

 
232,615

 
Gross profit
20,188

 
18,729

 
 
89,792

 
70,499

 
Selling, general and administrative expenses
8,246

 
6,634

 
 
33,989

 
26,261

 
Gain (loss) on disposal of assets
30

 
21

 
 
(22
)
 
4

 
Income from operations
11,912

 
12,074

 
 
55,825

 
44,234

 
Interest income, net
70

 
30

 
 
221

 
42

 
Other (expense) income, net
(4
)
 
(9
)
 
 
248

 
41

 
Income before taxes
11,978

 
12,095

 
 
56,294

 
44,317

 
Income tax provision
4,212

 
4,517

 
 
18,747

 
16,868

 
Net income
$
7,766

 
$
7,578

 
 
$
37,547

 
$
27,449

 
Earnings per share:
 

 
 

 
 
 

 
 

 
Basic*
$
0.21

 
$
0.21

 
 
$
1.02

 
$
0.75

 
Diluted*
$
0.21

 
$
0.21

 
 
$
1.01

 
$
0.74

 
Cash dividends declared per common share*:
$
0.10

 
$
0.16

(1)
 
$
0.20

 
$
0.24

(1)
Weighted average shares outstanding:
 
 
 
 
 
 

 
 

 
Basic*
36,726,609

 
36,787,893

 
 
36,746,100

 
36,825,170

 
Diluted*
37,107,870

 
36,944,489

 
 
37,058,254

 
37,048,826

 
 *Reflects three-for-two stock split effective July 2, 2013
(1) Includes special dividend of $0.08 per common share paid on December 24, 2012.



2


AAON, Inc. and Subsidiaries
Unaudited Consolidated Balance Sheets
 
December 31,
 
2013
 
2012
Assets
(in thousands, except share and per share data)
Current assets:
 
 
 
Cash and cash equivalents
$
12,085

 
$
3,159

Certificates of deposit
8,110

 
3,120

Investments held to maturity at amortized cost
16,040

 
2,832

Accounts receivable, net
39,063

 
43,866

Income tax receivable
1,073

 
694

Note receivable
29

 
28

Inventories, net
32,140

 
32,614

Prepaid expenses and other
304

 
740

Deferred tax assets
4,779

 
4,493

Total current assets
113,623

 
91,546

Property, plant and equipment:
 

 
 

Land
1,417

 
1,340

Buildings
61,821

 
59,761

Machinery and equipment
119,439

 
117,617

Furniture and fixtures
9,748

 
8,906

Total property, plant and equipment
192,425

 
187,624

Less:  Accumulated depreciation
105,142

 
96,929

Property, plant and equipment, net
87,283

 
90,695

Certificates of deposit
2,638

 
2,120

Investments held to maturity at amortized cost
10,981

 
8,041

Notes receivable
919

 
1,091

Total assets
$
215,444

 
$
193,493

 
 
 
 
Liabilities and Stockholders' Equity
 

 
 

Current liabilities:
 

 
 

Revolving credit facility
$
—

 
$
—

Accounts payable
7,779

 
13,047

Accrued liabilities
28,550

 
26,578

Total current liabilities
36,329

 
39,625

Deferred revenue
585

 
—

Deferred tax liabilities
14,424

 
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, 50,000,000 shares authorized,
36,711,354 and 36,776,624 issued and outstanding at
December 31, 2013 and 2012, respectively*
147

 
147

Additional paid-in capital
 
 
 
Retained earnings
163,959

 
137,989

Total stockholders' equity
164,106

 
138,136

Total liabilities and stockholders' equity
$
215,444

 
$
193,493

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


3


AAON, Inc. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
 
Years Ending December 31,
 
2013
 
2012
 
2011
Operating Activities
(in thousands)
Net income
$
37,547

 
$
27,449

 
$
13,986

Adjustments to reconcile net income to net cash provided by operating activities:
 

 
 

 
 

Depreciation
12,312

 
13,407

 
11,397

Amortization of bond premiums
790

 
155

 
156

Provision for losses on accounts receivable, net of adjustments
141

 
(83
)
 
(289
)
Provision for excess and obsolete inventories
243

 
63

 
(50
)
Share-based compensation
1,763

 
1,294

 
680

Excess tax benefits from stock options exercised and restricted stock awards vested
(843
)
 
(393
)
 
(211
)
Gain on disposition of assets
(22
)
 
4

 
1,802

Foreign currency transaction gain
67

 
(27
)
 
(8
)
Interest income on note receivable
(40
)
 
(42
)
 
—

Deferred income taxes
(1,594
)
 
(2,028
)
 
10,122

Write-off of note receivable
75

 
—

 
—

Changes in assets and liabilities:
 

 
 

 
 
Accounts receivable
4,662

 
(9,646
)
 
6,053

Income tax receivable
464

 
9,715

 
(10,016
)
Inventories
231

 
2,271

 
(1,296
)
Prepaid expenses and other
436

 
(17
)
 
(67
)
Accounts payable
(5,197
)
 
2,461

 
(2,751
)
Deferred revenue
615

 
—

 
—

Accrued liabilities
1,942

 
6,584

 
(3,024
)
Net cash provided by operating activities
53,592

 
51,167

 
26,484

Investing Activities
 

 
 

 
 
Capital expenditures
(9,041
)
 
(14,147
)
 
(35,914
)
Proceeds from sale of property, plant and equipment
92

 
11

 
482

Investment in certificates of deposits
(9,108
)
 
(6,540
)
 
—

Maturities of certificates of deposits
3,600

 
1,300

 
1,503

Purchases of investments held to maturity
(22,275
)
 
(11,654
)
 
—

Maturities of investments
2,005

 
—

 
9,364

Proceeds from called investments
3,332

 
626

 
—

Principal payments from note receivable
69

 
69

 
27

Net cash used in investing activities
(31,326
)
 
(30,335
)
 
(24,538
)
Financing Activities
 

 
 

 
 
Borrowings under revolving credit facility
8,325

 
34,847

 
82,078

Payments under revolving credit facility
(8,325
)
 
(39,422
)
 
(77,503
)
Stock options exercised
1,467

 
1,996

 
494

Excess tax benefits from stock options exercised and restricted stock awards vested
843

 
393

 
211

Repurchase of stock
(8,222
)
 
(6,660
)
 
(3,671
)
Cash dividends paid to stockholders
(7,428
)
 
(8,840
)
 
(5,935
)
Net cash used in financing activities
(13,340
)
 
(17,686
)
 
(4,326
)
Net increase (decrease) in cash and cash equivalents
8,926

 
3,146

 
(2,380
)
Cash and cash equivalents, beginning of period
3,159

 
13

 
2,393

Cash and cash equivalents, end of period
$
12,085

 
$
3,159

 
$
13



4

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