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AAON Inc.$33.36($.09)(.27%)

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 AAON Reports Record Sales and Earnings for Fourth Quarter and Year2015
   Thursday, February 25, 2016 7:01:08 AM ET

AAON, INC. (AAON ) today announced its operating results for the fourth quarter and year 2015. Sales in the fourth quarter were a record $97.2 million, up 14.8% from $84.7 million in 2014. Net income was also a record $12.9 million, up 22.9% from $10.5 million in the same period a year ago. Sales for the year 2015 reached a record level, $358.6 million, up 0.6% compared to $356.3 million in 2014. Earnings for 2015 were also a record, $45.7 million, up 3.6% compared to $44.2 million in 2014.

Earnings for the fourth quarter of 2015 and 2014 were $0.24 and $0.19 per diluted share, up 26.3%, based upon 54.0 million and 54.8 million diluted shares outstanding, respectively. Earnings per diluted share for the years 2015 and 2014 were $0.84 and $0.80, up 5.0%, based upon 54.5 million and 55.4 million diluted shares outstanding, respectively.

Norman H. Asbjornson, President and CEO, stated, "We had a slow start to 2015, but with the changes made during the year, including adding more Regional Sales Managers and eliminating under-performing Sales Representative firms, we witnessed a firm rebound and growth in the final quarter of the year."

Mr. Asbjornson further added, "Our gross profit percentage remains strong at 30.3% for the year 2015 compared to 30.4% in 2014. Our SG&A expense as a percent of sales decreased from 11.4% in 2014 to 10.4% in 2015. This decrease is due to the absence of non-recurring charitable donations made in 2014 and decreases in our warranty expense."

Mr. Asbjornson continued, "The Company’s backlog increased from $48.8 million at December 31, 2014 to $57.1 million at December 31, 2015. In addition, the Company’s balance sheet at year end was strong. The current ratio was 2.9:1 (including cash and investments of $37.4 million). It should be noted that the Company purchased slightly more than 1.0 million shares of AAON stock under its resumed open market buyback program for approximately $25.0 million during the fourth quarter. We continued to remain debt-free and our return on average stockholder equity was 25.9% in 2015 compared to 26.1% in 2014."

Mr. Asbjornson concluded, "While 2015 results were relatively similar with 2014, we expect the changes in our sales force in 2015 and the expansion of our product lines in 2016 will allow the Company to continue its growth mode and post record results in sales and earnings."

The Company will host a conference call today at 4:15 P.M. (Eastern Time) to discuss the fourth quarter and year 2015 results. To participate, call 1-888-241-0551 (code 49944392); or, for rebroadcast, call 1-855-859-2056 (code 49943292).

AAON, Inc. is a manufacturer of air conditioning and heating equipment consisting of rooftop units, chillers, packaged outdoor mechanical rooms, air handling units, makeup air units, energy recovery units, condensing units, geothermal heat pumps, 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.



                        AAON, Inc. and Subsidiaries
                Unaudited Consolidated Statements of Income

                             Three Months Ended           Years Ending
                                December 31,             December 31,
                             2015         2014         2015         2014
                         ------------ ------------ ------------ ------------
                           (in thousands, except share and per share data)
Net sales                $    97,229  $    84,728  $   358,632  $   356,322
Cost of sales                 67,648       59,537      249,951      248,059
                         ------------ ------------ ------------ ------------
Gross profit                  29,581       25,191      108,681      108,263
Selling, general and
 administrative expenses       9,859        8,519       37,438       40,562
Gain on disposal of
 assets                            -         (281)         (59)        (305)
                         ------------ ------------ ------------ ------------
Income from operations        19,722       16,953       71,302       68,006
Interest income, net              74           81          161          276
Other expense, net               (18)          (6)        (124)         (36)
                         ------------ ------------ ------------ ------------
Income before taxes           19,778       17,028       71,339       68,246
Income tax provision           6,830        6,495       25,611       24,088
                         ------------ ------------ ------------ ------------
Net income               $    12,948  $    10,533  $    45,728  $    44,158
                         ============ ============ ============ ============
Earnings per share:
  Basic                  $      0.24  $      0.19  $      0.85  $      0.81
                         ============ ============ ============ ============
  Diluted                $      0.24  $      0.19  $      0.84  $      0.80
                         ============ ============ ============ ============
Cash dividends declared
 per common share:       $      0.11  $      0.09  $      0.22  $      0.18
                         ============ ============ ============ ============
Weighted average shares
 outstanding:
  Basic                   53,680,995   54,291,317   54,045,841   54,809,319
                         ============ ============ ============ ============
  Diluted                 54,036,021   54,815,954   54,481,484   55,369,016
                         ============ ============ ============ ============





                        AAON, Inc. and Subsidiaries
                   Unaudited Consolidated Balance Sheets

                                                          December 31,
                                                        2015        2014
                                                     ----------- -----------
                                                      (in thousands, except
                                                       share and per share
Assets                                                        data)
Current assets:
  Cash and cash equivalents                          $     7,908 $    21,952
  Certificates of deposit                                 10,080       6,098
  Investments held to maturity at amortized cost          12,444      11,972
  Accounts receivable, net                                50,024      44,092
  Income tax receivable                                    4,702       2,569
  Note receivable                                             23          30
  Inventories, net                                        38,499      37,618
  Prepaid expenses and other                                 533         609
                                                     ----------- -----------
Total current assets                                     124,213     124,940
Property, plant and equipment:
  Land                                                     2,233       2,233
  Buildings                                               68,806      64,938
  Machinery and equipment                                143,100     127,968
  Furniture and fixtures                                  11,270      10,388
                                                     ----------- -----------
    Total property, plant and equipment                  225,409     205,527
    Less: Accumulated depreciation                       124,348     113,605
                                                     ----------- -----------
  Property, plant and equipment, net                     101,061      91,922
Certificates of deposit                                    1,880       5,280
Investments held to maturity at amortized cost             5,039       4,015
Note receivable                                              661         817
                                                     ----------- -----------
Total assets                                         $   232,854 $   226,974
                                                     =========== ===========

Liabilities and Stockholders’ Equity
Current liabilities:
  Revolving credit facility                          $         - $         -
  Accounts payable                                         6,178      11,370
  Accrued liabilities                                     37,235      31,343
                                                     ----------- -----------
Total current liabilities                                 43,413      42,713
Deferred revenue                                             698       1,006
Deferred tax liabilities                                   8,706       7,534
Donations                                                  1,119       1,662
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, 53,012,363 and 54,041,829 issued and
   outstanding at December 31, 2015 and 2014,
   respectively                                              212         216
  Additional paid-in capital                                   -           -
  Retained earnings                                      178,706     173,843
                                                     ----------- -----------
Total stockholders’ equity                               178,918     174,059
                                                     ----------- -----------
Total liabilities and stockholders’ equity           $   232,854 $   226,974
                                                     =========== ===========





                        AAON, Inc. and Subsidiaries
              Unaudited Consolidated Statements of Cash Flows

                                            Years Ending December 31,
                                          2015         2014         2013
                                      ------------ ------------ ------------
Operating Activities                              (in thousands)
  Net income                          $    45,728  $    44,158  $    37,547
  Adjustments to reconcile net income
   to net cash provided by operating
   activities:
    Depreciation                           11,741       11,553       12,312
    Amortization of bond premiums             266          688          790
    Provision for losses on accounts
     receivable, net of adjustments           (48)         (22)         141
    Provision for excess and obsolete
     inventories                              178          135          243
    Share-based compensation                2,891        2,178        1,763
    Excess tax benefits from stock
     options exercised and restricted
     stock awards vested                   (2,445)      (1,239)        (843)
    Gain on disposition of assets             (59)        (305)         (22)
    Foreign currency transaction loss         139           74           67
    Interest income on note
     receivable                               (30)         (36)         (40)
    Deferred income taxes                   1,172       (2,111)      (1,594)
    Write-off of note receivable                -            -           75
    Changes in assets and
     liabilities:
      Accounts receivable                  (5,884)      (5,007)       4,662
      Income tax receivable                   312         (257)         464
      Inventories                          (1,059)      (5,613)         231
      Prepaid expenses and other               76         (305)         436
      Accounts payable                     (5,109)       3,512       (5,197)
      Deferred revenue                        189          782          615
      Accrued liabilities                   4,852        4,094        1,942
                                      ------------ ------------ ------------
  Net cash provided by operating
   activities                              52,910       52,279       53,592
                                      ------------ ------------ ------------
Investing Activities
  Capital expenditures                    (20,967)     (16,127)      (9,041)
  Proceeds from sale of property,
   plant and equipment                         63          319           92
  Investment in certificates of
   deposits                                (6,680)      (9,940)      (9,108)
  Maturities of certificates of
   deposits                                 6,098        9,310        3,600
  Purchases of investments held to
   maturity                               (14,183)      (6,880)     (22,275)
  Maturities of investments                11,408       14,197        2,005
  Proceeds from called investments          1,013        3,029        3,332
  Principal payments from note
   receivable                                  54           63           69
                                      ------------ ------------ ------------
  Net cash used in investing
   activities                             (23,194)      (6,029)     (31,326)
                                      ------------ ------------ ------------
Financing Activities
  Borrowings under revolving credit
   facility                                     -            -        8,325
  Payments under revolving credit
   facility                                     -            -       (8,325)
  Stock options exercised                   2,795        1,318        1,467
  Excess tax benefits from stock
   options exercised and restricted
   stock awards vested                      2,445        1,239          843
  Repurchase of stock                     (37,143)     (29,284)      (8,222)
  Cash dividends paid to stockholders     (11,857)      (9,656)      (7,428)
                                      ------------ ------------ ------------
  Net cash used in financing
   activities                             (43,760)     (36,383)     (13,340)
                                      ------------ ------------ ------------
Net (decrease) increase in cash and
 cash equivalents                         (14,044)       9,867        8,926
                                      ------------ ------------ ------------
Cash and cash equivalents, beginning
 of period                                 21,952       12,085        3,159
                                      ------------ ------------ ------------
Cash and cash equivalents, end of
 period                               $     7,908  $    21,952  $    12,085
                                      ============ ============ ============



Use of Non-GAAP Financial Measure

To supplement the Company’s consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), an additional non-GAAP financial measure is provided and reconciled in the following table. The Company believes that this non-GAAP financial measure, when considered together with the GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results. The Company believes that this non-GAAP financial measure enhances the ability of investors to analyze the Company’s business trends and operating performance.

EBITDAX

EBITDAX (as defined below) is presented herein and reconciled from the GAAP measure of net income because of its wide acceptance by the investment community as a financial indicator of a company’s ability to internally fund operations.

The Company defines EBITDAX as net income, plus (1) depreciation, (2) amortization of bond premiums, (3) share-based compensation, (4) interest (income) expense and (5) income tax expense. EBITDAX is not a measure of net income or cash flows as determined by GAAP.

The Company’s EBITDAX measure provides additional information which may be used to better understand the Company’s operations. EBITDAX is one of several metrics that the Company uses as a supplemental financial measurement in the evaluation of its business and should not be considered as an alternative to, or more meaningful than, net income, as an indicator of operating performance. Certain items excluded from EBITDAX are significant components in understanding and assessing a company’s financial performance. EBITDAX, as used by the Company, may not be comparable to similarly titled measures reported by other companies. The Company believes that EBITDAX is a widely followed measure of operating performance and is one of many metrics used by the Company’s management team, and by other users of the Company’s consolidated financial statements.

The following table provides a reconciliation of net income (GAAP) to EBITDAX (non-GAAP) for the periods indicated:



                                Three Months Ended         Years Ending
                                   December 31,           December 31,
                                2015        2014        2015        2014
                             ----------- ----------- ----------- -----------
                                             (in thousands)
Net Income, a GAAP measure   $   12,948  $   10,533  $   45,728  $   44,158
Depreciation                      3,154       2,893      11,741      11,553
Amortization of bond
 premiums                            98         127         266         688
Share-based compensation            815         600       2,891       2,178
Interest (income) expense          (172)       (208)       (427)       (964)
Income tax expense                6,830       6,495      25,611      24,088
                             ----------- ----------- ----------- -----------
EBITDAX, a non-GAAP measure  $   23,673  $   20,440  $   85,810  $   81,701
                             =========== =========== =========== ===========




For Further Information:

<strong>Jerry R. Levine</strong>
Phone: (914) 244-0292
Fax: (914) 244-0295

Email: jrladvisor@yahoo.com 



SOURCE: AAON

mailto:jrladvisor@yahoo.com


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