AAON Reports Third Quarter Results
/EINPresswire.com/ -- TULSA, OK--(Marketwired - November 02, 2015) - AAON, Inc. (NASDAQ: AAON) today announced its operating results for the third quarter and nine months ended September 30, 2015.
In the quarter, net sales were $94.4 million, down 8.3% from $102.9 million in 2014. Net income was $13.3 million, up 6.5% from $12.4 million in the same period a year ago. Net sales for the nine-month period ended September 30, 2015 were $261.4 million, down 3.8% from $271.6 million in 2014. Net income for the nine-month period ended September 30, 2015 was $32.8 million, down 2.5% from $33.6 million in 2014.
Earnings per diluted share in the third quarter of 2015 were $0.24, up 9.1% from $0.22 for the same period the previous year, based upon 54.6 million and 55.5 million shares outstanding at September 30, 2015 and 2014, respectively. Earnings per diluted share for the nine-month period ended September 30, 2015 were $0.60, down 1.6% from $0.61 in 2014, based upon 54.6 million and 55.4 million shares outstanding at September 30, 2015 and 2014, respectively.
Norman H. Asbjornson, President and CEO, stated, "Despite the continuing unstable economic environment which negatively impacted our sales, we were able to maintain our gross profit margins, aided by improved productivity and level raw material costs. Our gross profit for the quarter was 32.0% of sales compared to 32.4% of sales a year ago, and for the nine month period ended September 30, 2015, stood at 30.3% versus 30.6% for the corresponding period in 2014."
Mr. Asbjornson further added, "Our SG&A expense as a percentage of sales declined from 13.4% to 10.7% for the quarter, and for the nine month period decreased from 11.8% to 10.6%. Total SG&A expense benefited from lower salaries and benefits along with the absence of non-recurring charitable contributions made in 2014."
Mr. Asbjornson continued, "Our financial condition at September 30, 2015 remained quite strong with a current ratio of 3.4:1 (including cash and short-term investments totaling $48.9 million), plus long term marketable investments of $13.2 million. We also remain debt free. Our backlog at September 30, 2015 increased 10.2% to $60.4 million, from $54.8 million for the same period a year ago."
Mr. Asbjornson concluded, "We have made important changes and additions to our product line which will be introduced in 2016. Furthermore, we have added new sales personnel who should contribute to next year's sales and earnings. While we expect results to remain relatively flat for the remainder of 2015, we look forward to resuming our growth in 2016 and beyond."
The Company will host a conference call today at 4:15 P.M. Eastern Time to discuss the third quarter results. To participate, call 1-888-241-0551 (code 62745780); or, for rebroadcast, call 1-855-859-2056 (code 62745780).
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, 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 Nine Months Ended
September 30, September 30,
2015 2014 2015 2014
------------ ------------ ------------ ------------
(in thousands, except share and per share data)
Net sales $ 94,360 $ 102,917 $ 261,403 $ 271,594
Cost of sales 64,175 69,567 182,303 188,522
------------ ------------ ------------ ------------
Gross profit 30,185 33,350 79,100 83,072
Selling, general and
administrative expenses 10,062 13,830 27,579 32,043
Gain on disposal of
assets (34) - (59) (24)
------------ ------------ ------------ ------------
Income from operations 20,157 19,520 51,580 51,053
Interest income 14 55 87 195
Other expense, net (58) (43) (106) (30)
------------ ------------ ------------ ------------
Income before taxes 20,113 19,532 51,561 51,218
Income tax provision 6,862 7,092 18,781 17,593
------------ ------------ ------------ ------------
Net income $ 13,251 $ 12,440 $ 32,780 $ 33,625
============ ============ ============ ============
Earnings per share:
Basic $ 0.24 $ 0.23 $ 0.61 $ 0.61
============ ============ ============ ============
Diluted $ 0.24 $ 0.22 $ 0.60 $ 0.61
============ ============ ============ ============
Cash dividends declared
per common share: $ - $ - $ 0.11 $ 0.09
============ ============ ============ ============
Weighted average shares
outstanding:
Basic 54,209,942 54,905,288 54,160,649 54,851,911
============ ============ ============ ============
Diluted 54,579,590 55,484,043 54,623,163 55,423,294
============ ============ ============ ============
AAON, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
September December
30, 2015 31, 2014
--------- ---------
(in thousands,
except share and
Assets per share data)
Current assets:
Cash and cash equivalents $ 29,863 $ 21,952
Certificates of deposit 10,800 6,098
Investments held to maturity at amortized cost 8,266 11,972
Accounts receivable, net 45,825 44,092
Income tax receivable 2,172 2,569
Note receivable 24 30
Inventories, net 41,052 37,618
Prepaid expenses and other 763 609
Deferred tax assets 6,155 6,143
--------- ---------
Total current assets 144,920 131,083
Property, plant and equipment:
Land 2,233 2,233
Buildings 67,580 64,938
Machinery and equipment 136,952 127,968
Furniture and fixtures 10,746 10,388
--------- ---------
Total property, plant and equipment 217,511 205,527
Less: Accumulated depreciation 121,215 113,605
--------- ---------
Property, plant and equipment, net 96,296 91,922
Certificates of deposit 2,120 5,280
Investments held to maturity at amortized cost 11,072 4,015
Note receivable 690 817
--------- ---------
Total assets $ 255,098 $ 233,117
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Revolving credit facility $ - $ -
Accounts payable 7,759 11,370
Accrued liabilities 34,482 31,343
--------- ---------
Total current liabilities 42,241 42,713
Deferred revenue 689 1,006
Deferred tax liabilities 12,689 13,677
Donations 1,108 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, 54,139,246 and 54,041,829 217 216
issued and outstanding at September 30, 2015 and
December 31, 2014, respectively
Additional paid-in capital - -
Retained earnings 198,154 173,843
--------- ---------
Total stockholders' equity 198,371 174,059
--------- ---------
Total liabilities and stockholders' equity $ 255,098 $ 233,117
========= =========
AAON, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
2015 2014
---------- ----------
Operating Activities (in thousands)
Net income $ 32,780 $ 33,625
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 8,587 8,660
Amortization of bond premiums 168 561
Provision for losses on accounts receivable, net
of adjustments (48) (59)
Provision for excess and obsolete inventories, net (111) 223
Share-based compensation 2,076 1,578
Excess tax benefits from stock options exercised
and restricted stock awards vested (2,217) (908)
Gain on disposition of assets (59) (24)
Foreign currency transaction loss 114 36
Interest income on note receivable (23) (30)
Deferred income taxes (1,000) (4,361)
Changes in assets and liabilities:
Accounts receivable (1,685) (15,663)
Income tax receivable 2,614 1,981
Inventories (3,323) (5,323)
Prepaid expenses and other (154) (486)
Accounts payable (3,801) 5,982
Deferred revenue 138 591
Accrued liabilities and donations 2,130 12,761
---------- ----------
Net cash provided by operating activities 36,186 39,144
---------- ----------
Investing Activities
Capital expenditures (12,775) (13,567)
Proceeds from sale of property, plant and equipment 63 30
Investment in certificates of deposits (6,200) (9,940)
Maturities of certificates of deposits 4,658 6,745
Purchases of investments held to maturity (14,183) (6,880)
Maturities of investments 9,907 8,891
Proceeds from called investments 757 2,525
Principal payments from note receivable 42 52
---------- ----------
Net cash used in investing activities (17,731) (12,144)
---------- ----------
Financing Activities
Stock options exercised 2,640 908
Excess tax benefits from stock options exercised and
restricted stock awards vested 2,217 908
Repurchase of stock (9,436) (17,309)
Cash dividends paid to stockholders (5,965) (4,773)
---------- ----------
Net cash used in financing activities (10,544) (20,266)
---------- ----------
Net increase in cash and cash equivalents 7,911 6,734
---------- ----------
Cash and cash equivalents, beginning of period 21,952 12,085
---------- ----------
Cash and cash equivalents, end of period $ 29,863 $ 18,819
========== ==========
Use of Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements presented in accordance with generally accepted accounting principles ("GAAP"), additional non-GAAP financial measures are provided and reconciled in the following tables. The Company believes that these non-GAAP financial measures, 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 these non-GAAP financial measures enhance 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 Nine Months Ended
September 30, September 30,
2015 2014 2015 2014
--------- --------- --------- ---------
(in thousands)
Net Income, a GAAP measure $ 13,251 $ 12,440 $ 32,780 $ 33,625
Depreciation 2,988 2,941 8,587 8,660
Amortization of bond premiums 62 172 168 561
Share-based compensation 795 594 2,076 1,578
Interest (income) (76) (227) (255) (756)
Income tax expense 6,862 7,092 18,781 17,593
--------- --------- --------- ---------
EBITDAX, a non-GAAP measure $ 23,882 $ 23,012 $ 62,137 $ 61,261
========= ========= ========= =========
Adjusted Net Income and Adjusted Earnings per Share
The Company defines Adjusted Net Income and the related per share amount as (1) net income, plus (2) non-recurring donations, less (3) the impact on profit sharing expense from the non-recurring donations and (4) the impact on income tax expense from the non-recurring donations. These measures provide additional information which may be used to better understand the Company's operations.
The following tables provide a reconciliation of net income and earnings per share-diluted (GAAP) to adjusted net income and adjusted earnings per share-diluted (non-GAAP) for the periods indicated:
Three Months Ended Nine Months Ended
September 30, September 30,
2015 2014 2015 2014
--------- --------- --------- ---------
(in thousands except per share data)
Net Income, a GAAP measure $ 13,251 $ 12,440 $ 32,780 $ 33,625
Non-recurring donations 390 2,845 195 3,845
Profit-sharing (39) (284) (20) (384)
Income tax expense (120) (929) (64) (1,187)
--------- --------- --------- ---------
Adjusted Net Income, a non-GAAP
measure $ 13,482 $ 14,072 $ 32,891 $ 35,899
========= ========= ========= =========
Earnings per share-diluted, a GAAP
measure $ 0.24 $ 0.22 $ 0.60 $ 0.61
Non-recurring donations 0.01 0.05 - 0.07
Profit-sharing - (0.01) - (0.01)
Income tax expense - (0.02) - (0.02)
--------- --------- --------- ---------
Adjusted earnings per share-diluted,
a non-GAAP measure $ 0.25 $ 0.24 $ 0.60 $ 0.65
========= ========= ========= =========
For Further Information:
Jerry R. Levine
Phone: (914) 244-0292
Fax: (914) 244-0295
Email: jrladvisor@yahoo.com
Legal Disclaimer:
EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.
