AAON Reports Record Sales and Earnings for Fourth Quarter and Year 2015
TULSA, OK -- (Marketwired) -- 02/25/16 -- AAON, INC. (NASDAQ: 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: Jerry R. LevinePhone: (914) 244-0292Fax: (914) 244-0295 Email: [email protected]
Source: AAON