AAON Reports Second Quarter Results

TULSA, OK--(Marketwire - August 10, 2009) - AAON, INC. AAON today announced its operating results for the three and six months ended June 30, 2009.

In the quarter, net sales decreased 8% to $68.6 million from $74.8 million and net income decreased 9% to $7.1 million from $7.8 million from second quarter 2008. Earnings per diluted share were $0.41, down 5% from $0.43 for the same period a year ago, based upon 17.3 million and 18.1 million diluted shares outstanding for the three months ended June 30, 2009, compared to June 30, 2008, respectively. Net sales for the first six months of 2009 decreased 5% to $132.6 million from $140.2 million in 2008, and net income decreased 3% to $13.8 million from $14.2 million. Earnings per diluted share were $0.80, up 3% from $0.78, based upon 17.3 million and 18.3 million diluted shares outstanding for the six months ended June 30, 2009, compared to June 30, 2008, respectively.

Norman H. Asbjornson, President and CEO, stated that, "The decreases in sales and earnings were attributable primarily to current economic conditions; but our results were impressive when compared to overall industry performance, particularly recognizing that we experienced $680,000 ($0.02 per share) of nonrecurring expenses in the second quarter this year for costs involved in the closing of our Canadian operations."

Mr. Asbjornson said that, "We expect the downturn in the economy which we experienced to a greater extent in the second quarter will continue to impact our business for the foreseeable future; however, we have a strong liquidity position with cash on hand of $13.9 million at June 30, 2009, a record high quarter end amount. In view of the current economic environment, our goal is to maintain a healthy financial condition."

The Company will host a conference call today at 4:15 P.M. EDT to discuss the second quarter results. To participate call 1-877-737-1669.

AAON, INC. is a manufacturer of air-conditioning and heating equipment consisting of rooftop units, chillers, air-handling 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 Consolidated Statements of Income (Unaudited) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2009 2008 2009 2008 --------- --------- --------- --------- (in thousands, except per share data) Net sales $ 68,597 $ 74,781 $ 132,562 $ 140,237 Cost of sales 50,493 56,791 97,524 106,595 --------- --------- --------- --------- Gross profit 18,104 17,990 35,038 33,642 Selling, general and administrative expenses 6,793 6,129 13,328 12,031 --------- --------- --------- --------- Income from operations 11,311 11,861 21,710 21,611 Interest expense - (16) (9) (19) Interest income 7 6 7 27 Other income (expense), net (71) 117 174 247 --------- --------- --------- --------- Income before income taxes 11,247 11,968 21,882 21,866 Income tax provision 4,150 4,208 8,057 7,672 --------- --------- --------- --------- Net income $ 7,097 $ 7,760 $ 13,825 $ 14,194 ========= ========= ========= ========= Earnings per share: Basic $ 0.41 $ 0.43 $ 0.80 $ 0.79 ========= ========= ========= ========= Diluted $ 0.41 $ 0.43 $ 0.80 $ 0.78 ========= ========= ========= ========= Cash dividends declared per common share: $ 0.18 $ 0.16 $ 0.18 $ 0.16 ========= ========= ========= ========= Weighted average shares outstanding: Basic 17,170 17,740 17,179 17,894 ========= ========= ========= ========= Diluted 17,315 18,145 17,325 18,302 ========= ========= ========= ========= AAON, INC. and Subsidiaries Consolidated Balance Sheets (Unaudited) June 30, December 31, 2009 2008 -------------- -------------- (in thousands, except share and per share data) Assets Current assets: Cash and cash equivalents $ 13,920 $ 269 Accounts receivable, net 41,262 38,804 Inventories, net 31,357 36,382 Prepaid expenses and other 718 428 Deferred tax assets 4,996 4,235 -------------- -------------- Total current assets 92,253 80,118 Property, plant and equipment Land 2,197 2,153 Buildings 39,284 36,371 Machinery and equipment 90,084 87,219 Furniture and fixtures 7,195 7,076 -------------- -------------- Total property, plant and equipment 138,760 132,819 Less: Accumulated depreciation 76,885 72,269 -------------- -------------- Property, plant and equipment, net 61,875 60,550 Note receivable, long-term 75 75 -------------- -------------- Total assets $ 154,203 $ 140,743 ============== ============== Liabilities & Stockholders’ Equity Current liabilities: Revolving credit facility $ - $ 2,901 Current maturities of long-term debt 91 91 Accounts payable 15,617 14,715 Dividends payable 3,101 2,773 Accrued liabilities 24,638 19,038 -------------- -------------- Total current liabilities 43,447 39,518 Long-term liabilities 76 121 Deferred tax liabilities 4,093 4,582 Commitments and contingencies Stockholders’ equity: Preferred stock, $.001 par value, 7,500,000 shares authorized, no shares issued - - Common stock, $.004 par value, 75,000,000 shares authorized, 17,156,400 and 17,208,733 issued and outstanding at June 30, 2009 and December 31, 2008, respectively 71 71 Additional paid-in capital - 538 Accumulated other comprehensive income, net of tax 1,059 778 Retained earnings 105,457 95,135 -------------- -------------- Total stockholders’ equity 106,587 96,522 -------------- -------------- Total liabilities and stockholders’ equity $ 154,203 $ 140,743 ============== ============== AAON, INC. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) Six Months Six Months Ended Ended June 30, 2009 June 30, 2008 -------------- -------------- (in thousands) Operating Activities Net income $ 13,825 $ 14,194 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 4,564 4,838 Provision for losses on accounts receivable 634 13 Share-based compensation 419 413 Excess tax benefits from stock options exercised and restricted stock awards vested (180) (229) Gain on disposition of assets - (1) Deferred income taxes (1,103) (615) Changes in assets and liabilities: Accounts receivable (3,047) (10,832) Inventories, net 5,058 414 Prepaid expenses and other (290) (283) Accounts payable 808 3,393 Accrued liabilities 5,763 5,279 -------------- -------------- Net cash provided by operating activities 26,451 16,584 -------------- -------------- Investing Activities Proceeds from sale of property, plant and equipment - 1 Capital expenditures (5,803) (1,390) -------------- -------------- Net cash used in investing activities (5,803) (1,389) -------------- -------------- Financing Activities Borrowings under revolving credit facility 9,972 12,853 Payments under revolving credit facility (12,873) (8,766) Payments of long-term debt (45) (45) Stock options exercised 323 394 Excess tax benefits from stock options exercised and restricted stock awards vested 180 229 Repurchase of stock (1,862) (17,264) Cash dividends paid to stockholders (2,773) (2,943) -------------- -------------- Net cash used in financing activities (7,078) (15,542) -------------- -------------- Effect of exchange rate on cash 81 (27) -------------- -------------- Net increase (decrease) in cash and cash equivalents 13,651 (374) -------------- -------------- Cash and cash equivalents, beginning of year 269 879 -------------- -------------- Cash and cash equivalents, end of period $ 13,920 $ 505 ============== ==============