AAON, INC. - FORM 8-K - EX-99.1 - AAON Q2 2014 PRESS RELEASE - August 7, 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 Further Information:
FOR IMMEDIATE RELEASE
August 7, 2014
 
Jerry R. Levine Ÿ Phone: (914) 244-0292 Ÿ Fax: (914) 244-0295
 
Email: jrladvisor@yahoo.com

AAON REPORTS SALES AND EARNINGS

TULSA, OK, August 7, 2014 - AAON, Inc. (NASDAQ-AAON), today announced its operating results for the second quarter and six months ended June 30, 2014.

Net sales in the second quarter were a record $92.3 million, up 1.2% from $91.2 million in 2013. Net income was $11.4 million, down (6.2)% from $12.1 million in the same period a year ago. Net sales and net income for the six-month period ended June 30, 2014 were records for the first half of any year in the Company's history, with sales of $168.7 million, up 6.7% from $158.1 million in 2013, and income of $21.2 million, up 10.0% compared to $19.3 million in 2013.

Earnings per diluted share in the second quarter of 2014 were $0.20, down (9.1)% from $0.22 for the same period the previous year, based upon 55.6 million and 55.7 million shares outstanding at June 30, 2014 and 2013, respectively. Earnings per diluted share were $0.38, up 8.6% from $0.35, in the six months ended June 30, 2014 and 2013, respectively, based upon 55.6 million diluted shares outstanding for both periods. All per share earnings and shares reflect the three-for-two stock split effective July 16, 2014.

Norman H. Asbjornson, President and CEO, stated, “The second quarter increase in sales primarily reflects price increases. Gross profit as a percent of sales remained steady at 30.2% compared to 30.3% a year ago. SG&A expense as a percent of sales increased 1.5% (from 10.0% to 11.5%), primarily due to a one-time donation of cash and equipment totaling $1.0 million made in the quarter toward rebuilding of the Tulsa Central Library.”

Mr. Asbjornson continued, “The Company's balance sheet at June 30, 2014, was very strong, showing a current ratio of 2.9:1 (including cash and short-term investments totaling $45.6 million), plus long-term marketable investments of $11.7 million, and we remained debt-free. Additionally, our backlog increased from $66.2 million at June 30, 2013 to $67.1 million at June 30, 2014."

Mr. Asbjornson then said, "Based on the first half year's results, our backlog and other relevant factors, we expect 2014 to surpass last year's record sales and earnings."

The Company will host a conference call today at 4:15 P.M. Eastern Time to discuss the second quarter results. To participate, call 1-866-222-0265; or, for rebroadcast, call 1-866-245-6755 (code 236665).

AAON, Inc. is a manufacturer of air conditioning and heating equipment consisting of rooftop units, chillers, outdoor mechanical rooms, air handling units, makeup air units, energy recovery units, condensing 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, as amended. 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
 
 
 
 
Consolidated Statements of Income
 
 
 
 
(Unaudited)
 
 
 
 
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2014
 
2013
 
2014
 
2013
 
(in thousands, except share and per share data)
 
 
 
 
Net sales
$
92,310

 
$
91,241

 
$
168,677

 
$
158,074

Cost of sales
64,434

 
63,565

 
118,955

 
115,086

Gross profit
27,876

 
27,676

 
49,722

 
42,988

Selling, general and administrative expenses
10,584

 
9,089

 
18,213

 
16,056

Gain on disposal of assets
—

 
(59
)
 
(24
)
 
(52
)
Income from operations
17,292

 
18,646

 
31,533

 
26,984

Interest income
71

 
57

 
140

 
91

Other income, net
34

 
253

 
13

 
237

Income before taxes
17,397

 
18,956

 
31,686

 
27,312

Income tax provision
6,034

 
6,837

 
10,501

 
8,053

Net income
$
11,363

 
$
12,119

 
$
21,185

 
$
19,259

Earnings per share:
 

 
 

 
 
 
 
Basic*
$
0.21

 
$
0.22

 
$
0.38

 
$
0.35

Diluted*
$
0.20

 
$
0.22

 
$
0.38

 
$
0.35

Cash dividends declared per common share*:
$
0.09

 
$
0.07

 
$
0.09

 
$
0.07

Weighted average shares outstanding:
 

 
 

 
 
 
 
Basic*
55,004,175

 
55,139,577

 
55,036,281

 
55,140,260

Diluted*
55,568,212

 
55,725,393

 
55,603,979

 
55,584,302

 *Reflects three-for-two stock split effective July 16, 2014



2


AAON, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
 
June 30, 2014
 
December 31, 2013
Assets
(in thousands, except share and per share data)
Current assets:
 
 
 
Cash and cash equivalents
$
16,484

 
$
12,085

Certificates of deposit
10,064

 
8,110

Investments held to maturity at amortized cost
19,097

 
16,040

Accounts receivable, net
52,895

 
39,063

Income tax receivable
—

 
1,073

Note receivable
29

 
29

Inventories, net
36,608

 
32,140

Prepaid expenses and other
829

 
304

Deferred tax assets
5,895

 
4,779

Total current assets
141,901

 
113,623

Property, plant and equipment:
 

 
 

Land
2,233

 
1,417

Buildings
63,164

 
61,821

Machinery and equipment
121,909

 
119,439

Furniture and fixtures
10,136

 
9,748

Total property, plant and equipment
197,442

 
192,425

Less:  Accumulated depreciation
110,277

 
105,142

Property, plant and equipment, net
87,165

 
87,283

Certificates of deposit
6,000

 
2,638

Investments held to maturity at amortized cost
5,682

 
10,981

Note receivable
904

 
919

Total assets
$
241,652

 
$
215,444

 
 
 
 
Liabilities and Stockholders' Equity
 

 
 

Current liabilities:
 

 
 

Revolving credit facility
$
—

 
$
—

Accounts payable
10,904

 
7,779

Dividends payable
4,779

 
—

Accrued liabilities
33,857

 
28,550

Total current liabilities
49,540

 
36,329

Deferred revenue
841

 
585

Deferred tax liabilities
13,579

 
14,424

Commitments and contingencies


 


Stockholders' equity:
 

 
 

Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued
—

 
—

Common stock, $.004 par value, 100,000,000 shares authorized,
220

 
221

55,049,445 and 55,067,031 issued and outstanding at June 30, 2014
 

 
 

and December 31, 2013, respectively*
 

 
 

Additional paid-in capital
—

 
—

Retained earnings
177,472

 
163,885

Total stockholders' equity
177,692

 
164,106

Total liabilities and stockholders' equity
$
241,652

 
$
215,444

*Reflects three-for-two stock split effective July 16, 2014

3


AAON, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
 
Six Months Ended 
 June 30,
 
2014
 
2013
Operating Activities
(in thousands)
Net income
$
21,185

 
$
19,259

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

 
 

Depreciation
5,719

 
6,268

Amortization of bond premiums
389

 
304

Provision for losses on accounts receivable, net of adjustments
(8
)
 
102

Provision for excess and obsolete inventories, net
156

 
201

Share-based compensation
984

 
695

Excess tax benefits from stock options exercised and restricted stock awards vested
(680
)
 
(385
)
Gain on disposition of assets
(24
)
 
(52
)
Foreign currency transaction gain
—

 
43

Interest income on note receivable
(20
)
 
(20
)
Deferred income taxes
(1,961
)
 
(1,966
)
Write-off of note receivable
—

 
75

Changes in assets and liabilities:
 

 
 

Accounts receivable
(13,824
)
 
(6,344
)
Income tax receivable
1,753

 
3,942

Inventories
(4,624
)
 
(1,718
)
Prepaid expenses and other
(525
)
 
(160
)
Accounts payable
3,422

 
1,101

Deferred revenue
378

 
201

Accrued liabilities
5,185

 
6,194

Net cash provided by operating activities
17,505

 
27,740

Investing Activities
 

 
 

Capital expenditures
(5,903
)
 
(1,949
)
Proceeds from sale of property, plant and equipment
29

 
60

Investment in certificates of deposits
(9,220
)
 
(958
)
Maturities of certificates of deposits
3,904

 
1,440

Purchases of investments held to maturity
(5,955
)
 
(9,969
)
Maturities of investments
6,539

 
1,710

Proceeds from called investment
1,269

 
—

Principal payments from note receivable
35

 
40

Net cash used in investing activities
(9,302
)
 
(9,626
)
Financing Activities
 

 
 

Borrowings under revolving credit facility
—

 
2,321

Payments under revolving credit facility
—

 
(2,321
)
Stock options exercised
632

 
767

Excess tax benefits from stock options exercised and restricted stock awards vested
680

 
385

Repurchase of stock
(5,116
)
 
(3,010
)
Net cash used in financing activities
(3,804
)
 
(1,858
)
Net increase in cash and cash equivalents
4,399

 
16,256

Cash and cash equivalents, beginning of period
12,085

 
3,159

Cash and cash equivalents, end of period
$
16,484

 
$
19,415



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