|By Marketwired .||
|May 5, 2014 07:00 AM EDT||
TULSA, OK -- (Marketwired) -- 05/05/14 -- AAON, Inc. (NASDAQ: AAON), today announced its operating results for the three months ended March 31, 2014. Sales in the first quarter were $76.4 million, up 14.3% from $66.8 million in 2013. Net income was $9.8 million, up 37.6% from $7.1 million in the same period a year ago. Earnings per diluted share in the first quarter of 2014 were $0.26, up 36.8% from $0.19 for the same period the previous year, based upon 37.1 million and 37.0 million shares outstanding at March 31, 2014 and 2013, respectively. All per share earnings and shares reflect the 3-for-2 stock split effective July 2, 2013.
Both sales and earnings in 2014 were all-time records for any first quarter in the history of AAON.
Further, it should be noted that income before taxes in 2014 was $14.3 million, up 71.0% from $8.3 million in the same period a year ago. The effective tax rates on these earnings were 31.3% and 14.6% in the first quarters of 2014 and 2013, respectively. Both such tax rates are abnormally low due to a change in method of accounting for state investment credits in 2014 and several retroactive Federal tax credits along with a change in estimated taxes in 2013. However, the differential in these tax rates greatly distorts the comparison of net income for the first quarters of 2014 and 2013. The current estimated 2014 effective tax rate is 34.0%.
Norman H. Asbjornson, President and CEO, stated, "The first quarter of 2014 gains in sales and income from operations primarily reflect increases in market share, volume and prices, in addition to a decline in cost of materials, with gross profit as a percent of sales increasing from 22.9% to 28.6%. SG&A expenses as a percent of sales decreased from 10.4% to 10.0%."
Mr. Asbjornson continued, "The Company's balance sheet at March 31, 2014, was very strong, showing a current ratio of 3.3:1 (including cash and short-term investments totaling $51.6 million) and we remained debt free. However, our backlog decreased from a record high of $71.7 million at March 31, 2013 (which included an influx of orders in advance of a scheduled price increase), to $51.7 million at March 31, 2014 (which was not affected by any additional price increase)."
Mr. Asbjornson then said, "Based on the first quarter results and other relevant factors, we expect 2014 to produce higher sales and earnings than 2013."
Mr. Asbjornson next reported that, "Taking into account the Company's sustained period of profitability and mounting liquidity position, the Board of Directors of AAON has approved a 30% increase in its semi-annual cash dividend from $0.10 per share to $0.13 per share, starting with the next dividend payable on July 1, 2014, to stockholders of record on June 12, 2014."
The Company will host a conference call today at 4:15 P.M. Eastern Time to discuss the first quarter results. To participate, call 1-866-544-4631; or, for rebroadcast, call 1-866-245-6755 (code 845795).
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.
AAON, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) Three Months Ended March 31, 2014 2013 ------------ ------------ (in thousands, except share and per share data) Net sales $ 76,367 $ 66,833 Cost of sales 54,521 51,521 ------------ ------------ Gross profit 21,846 15,312 Selling, general and administrative expenses 7,629 6,967 (Gain) loss on disposal of assets (24) 7 ------------ ------------ Income from operations 14,241 8,338 Interest income 69 34 Other expense, net (21) (16) ------------ ------------ Income before taxes 14,289 8,356 Income tax provision 4,467 1,216 ------------ ------------ Net income $ 9,822 $ 7,140 ============ ============ Earnings per share: Basic* $ 0.27 $ 0.19 ============ ============ Diluted* $ 0.26 $ 0.19 ============ ============ Cash dividends declared per common share*: $ -- $ -- ============ ============ Weighted average shares outstanding: Basic* 36,694,554 36,760,632 ============ ============ Diluted* 37,075,460 36,962,144 ============ ============ *Reflects three-for-two stock split effective July 2, 2013 AAON, Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited) March 31, December 31, 2014 2013 ------------- ------------- (in thousands, except share Assets and per share data) Current assets: Cash and cash equivalents $ 19,670 $ 12,085 Certificates of deposit 9,105 8,110 Investments held to maturity at amortized cost 22,808 16,040 Accounts receivable, net 45,704 39,063 Income tax receivable -- 1,073 Note receivable 29 29 Inventories, net 34,891 32,140 Prepaid expenses and other 701 304 Deferred tax assets 5,488 4,779 ------------- ------------- Total current assets 138,396 113,623 Property, plant and equipment: Land 2,233 1,417 Buildings 62,744 61,821 Machinery and equipment 120,942 119,439 Furniture and fixtures 9,934 9,748 ------------- ------------- Total property, plant and equipment 195,853 192,425 Less: Accumulated depreciation 107,678 105,142 ------------- ------------- Property, plant and equipment, net 88,175 87,283 Certificates of deposit 240 2,638 Investments held to maturity at amortized cost 1,027 10,981 Note receivable 881 919 ------------- ------------- Total assets $ 228,719 $ 215,444 ============= ============= Liabilities and Stockholders' Equity Current liabilities: Revolving credit facility $ -- $ -- Accounts payable 11,307 7,779 Accrued liabilities 30,643 28,550 ------------- ------------- Total current liabilities 41,950 36,329 Deferred revenue 735 585 Deferred tax liabilities 13,979 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, 50,000,000 shares authorized, 36,652,276 and 36,711,354 issued and outstanding at March 31, 2014 and December 31, 2013, respectively 147 147 Additional paid-in capital -- -- Retained earnings 171,908 163,959 ------------- ------------- Total stockholders' equity 172,055 164,106 ------------- ------------- Total liabilities and stockholders' equity $ 228,719 $ 215,444 ============= ============= AAON, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, 2014 2013 ------------ ------------ Operating Activities (in thousands) Net income $ 9,822 $ 7,140 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 2,808 3,191 Amortization of bond premiums 216 127 Provision for losses on accounts receivable, net of adjustments (130) 269 Provision for excess and obsolete inventories, net 4 169 Share-based compensation 412 392 Excess tax benefits from stock options exercised and restricted stock awards vested (356) (109) (Gain) loss on disposition of assets (24) 7 Foreign currency transaction gain 31 19 Interest income on note receivable (10) (10) Deferred income taxes (1,154) (1,205) Changes in assets and liabilities: Accounts receivable (6,511) 5,046 Income tax receivable 1,429 (172) Inventories (2,755) (1,541) Prepaid expenses and other (397) (99) Accounts payable 3,441 (1,838) Deferred revenue 204 -- Accrued liabilities 2,039 (2,895) ------------ ------------ Net cash provided by operating activities 9,069 8,491 ------------ ------------ Investing Activities Capital expenditures (3,616) (997) Proceeds from sale of property, plant and equipment 27 -- Investment in certificates of deposits -- (238) Maturities of certificates of deposits 1,403 720 Purchases of investments held to maturity -- (1,396) Maturities of investments 2,717 610 Proceeds from called investment 253 -- Principal payments from note receivable 17 20 ------------ ------------ Net cash provided by (used in) investing activities 801 (1,281) ------------ ------------ Financing Activities Borrowings under revolving credit facility -- 1,955 Payments under revolving credit facility -- (1,955) Stock options exercised 340 354 Excess tax benefits from stock options exercised and restricted stock awards vested 356 109 Repurchase of stock (2,981) (1,115) ------------ ------------ Net cash used in financing activities (2,285) (652) ------------ ------------ Net increase in cash and cash equivalents 7,585 6,558 ------------ ------------ Cash and cash equivalents, beginning of period 12,085 3,159 ------------ ------------ Cash and cash equivalents, end of period $ 19,670 $ 9,717 ============ ============
For Further Information:
Jerry R. Levine
Phone: (914) 244-0292
Fax: (914) 244-0295
Email: [email protected]
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