AAON News AAON Reports Record Sales and Earnings

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Message #18
From: NewsBot
Date: March 14, 2007 04:00:00 AM

AAON News AAON Reports Record Sales and Earnings

TULSA, Okla.--(BUSINESS WIRE)--AAON, Inc. (Nasdaq:AAON) today announced its operating results for the year 2006. Sales increased 25% to $231.5 million from $185.2 million in 2005, and net income increased 49% to $17.1 million compared to $11.5 million in the previous year. Both sales and net income were all-time record highs.

Norman H. Asbjornson, President and CEO, stated that, “The increase in sales was attributable to an increase in volume of products sold as a result of an improvement of the commercial and industrial construction industry, an increased demand for the Company’s new and redesigned products, and price increases during 2006. The increase in earnings resulted from both higher volume and price increases, which provided an improvement in gross margins.”

Sales in the fourth quarter of 2006 increased to $54.6 million, up 12%, from $48.9 million in 2005, and net income for the quarter increased to $4.5 million, up 96%, compared to $2.3 million in 2005. Sales and net income were the highest for any fourth quarter in the Company’s history.

Earnings per share for 2006 were $1.35 compared to $0.90 in 2005. Earnings for the fourth quarter of 2006 were $0.35 per share compared to $0.18 per share in the previous year. Per share earnings are on a diluted basis.

Mr. Asbjornson said, “We expect the momentum generated in 2006 to continue in 2007, resulting in even higher sales and earnings.”

AAON, Inc. is a manufacturer of air-conditioning and heating equipment consisting of rooftop units, chillers, air-handling units, condensing 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. Consolidated Statements of Operations

	Three Months Ended		Twelve Months Ended
	Dec. 31, 2006	Dec. 31, 2005	Dec. 31, 2006	Dec. 31, 2005
	(In thousands, except share and per share data)

Net sales	$ 54,550	$ 48,885	$ 231,460	$ 185,195

Cost of sales	44,754	40,659	187,570	149,904

Gross profit	9,796	8,226	43,890	35,291

Selling, general and administrative expenses	2,678	4,514	18,059	17,477

Income from operations	7,118	3,712	25,831	17,814

Interest expense	(23)	(4)	(81)	(16)

Interest income	-	23	24	67

Other (expense) income	3	136	424	467

Income before income taxes	7,098	3,867	26,198	18,332

Income tax provision	2,560	1,582	9,065	6,870

Net income	$ 4,538	$ 2,285	$ 17,133	$ 11,462

Earnings Per Share:
Basic	$0.37	$0.19	$1.39	$0.93
Diluted	$0.35	$0.18	$1.35	$0.90

Weighted Average Shares Outstanding:
Basic	12,304,291	12,282,363	12,304,072	12,339,998
Diluted	12,649,733	12,679,300	12,652,403	12,749,844

AAON, Inc. Consolidated Balance Sheets

	December 31, 2006	December 31, 2005
	(In thousands, except share and per share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$ 288	$ 837
Certificate of deposit	-	1,000
Accounts receivable, net	36,748	32,487
Inventories, net	29,502	23,708
Prepaid expenses	267	1,041
Deferred income tax	3,954	3,877
Total current assets	70,759	62,950
PROPERTY, PLANT AND EQUIPMENT
Land	2,196	2,193
Buildings	31,272	28,953
Machinery and equipment	74,053	58,983
Furniture and fixtures	5,883	5,514
Total property, plant & equipment	113,404	95,643
Less: accumulated depreciation	54,182	45,062
Net property, plant & equipment	59,222	50,581
NOTES RECEIVABLE, long term	75	75
Total assets	$ 130,056	$ 113,606
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Current portion of long-term debt	59	108
Accounts payable	15,821	11,643
Dividends payable	2,465	-
Accrued liabilities	16,058	17,827
Total current liabilities	34,403	29,578
LONG-TERM DEBT, less current maturities	-	59
DEFERRED TAX LIABILITY	4,061	4,474
STOCKHOLDERS’ EQUITY
Preferred Stock, $.001 par, 5,000,000 shares authorized, no shares issued	-	-
Common Stock, $.004 par, 50,000,000 shares authorized, and 12,338,832 and 12,233,558 issued and outstanding at December 31, 2006, and December 31, 2005, respectively	49	49
Additional paid-in capital	210	-
Accumulated other comprehensive loss	667	513
Retained earnings	90,666	78,933
Total stockholders’ equity	91,592	79,495
Total liabilities and stockholders’ equity	$ 130,056	$ 113,606

AAON, Inc. Consolidated Statements of Cash Flows

	Twelve Months Ended Dec. 31, 2006	Twelve Months Ended Dec. 31, 2005
	(in thousands)
Operating Activities
Net income	$ 17,133	$ 11,462
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	9,146	8,503
Provision for losses on accounts receivable	(61)	68
Share-based compensation	500	-
Excess tax benefits from stock options exercised	(1,852)	-
(Gain)/Loss on disposition of assets	-	130
Deferred income taxes	(510)	(1,696)
Changes in assets and liabilities:
Accounts receivable	(4,195)	(5,366)
Inventories	(5,790)	(2,840)
Prepaid expenses and other	776	(563)
Accounts payable	4,178	(1,269)
Accrued liabilities	103	3,537
Net cash provided by operating activities	19,428	11,966

Investing Activities
Proceeds from sale of property, plant and equipment	-	30
Proceeds from matured certificate of deposit	3,000	3,000
Investment in certificate of deposit	(2,000)	(1,000)
Notes receivable, long-term	-	(75)
Capital expenditures	(17,781)	(10,144)
Net cash used in investing activities	(16,781)	(8,189)

Financing Activities
Borrowings under revolving credit facility	53,706	21,143
Payments under revolving credit facility	(53,706)	(21,143)
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