AAON Reports Record Sales and Earnings

TULSA, OK--(Marketwired - May 9, 2013) - AAON, INC. (NASDAQ: AAON), today announced its operating results for the three months ended March 31, 2013, of $66.8 million in sales (up 3%), and $7.1 million of net income (up 56%), $0.29 per share, compared to $65.0 million in sales and $4.6 million in net income, $0.18 per share, a year ago. Per share earnings are on a diluted basis.

Both sales and earnings were records for the first quarter. However, net income for the first quarter of 2013 benefited by a $1.6 million reduction of the income tax provision, or $0.07 per share, largely due to an Oklahoma investment credit and change in Federal tax laws. The Company anticipates an effective tax rate of 34.5% for the balance of this year (vs. 14.6% in the first quarter of 2013 and 39.9% in 2012).

Norman H. Asbjornson, President and CEO, stated, "The first quarter increases in sales and income from operations primarily reflect price increases, although gross profit increased 2.1% (from 20.8% to 22.9%), while SG&A expenses also increased 1.2% (from 9.2% to 10.4%), a majority of which (SG&A) represents increased advertising expense and cash bonuses to employees which are not expected to occur during the rest of 2013."

Mr. Asbjornson pointed out that the Company's backlog increased from $58.9 million at March 31, 2012, to a record of $71.7 million at March 31, 2013, or by 22%.

Mr. Asbjornson said, "Based on the first quarter results and backlog, we expect 2013 to produce both higher sales and earnings than 2012."

The Company will host a conference call today at 4:15 P.M. EDT to discuss the first quarter results. To participate, call 1-877-737-1669 (Code: VA23770).

AAON, Inc. is a manufacturer of air-conditioning and heating equipment consisting of rooftop units, chillers, air-handling units, condensing units, heat recovery units, commercial 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
Consolidated Statements of Income
(Unaudited)
			Three Months Ended
			March 31, 2013				March 31, 2012
			(in thousands except per share amounts)
Net sales			$	66,833			$	64,957
Cost of sales				51,521				51,439
Gross profit				15,312				13,518
Selling, general and administrative expenses				6,967				5,981
Loss (gain) on disposal of assets				7				(23	)
Income from operations				8,338				7,560
Interest expense				(1	)			(16	)
Interest income				35				13
Other income (expense), net				(16	)			48
Income before income taxes				8,356				7,605
Income tax provision				1,216				3,038
Net income			$	7,140			$	4,567
Earnings per share:
	Basic		$	0.29			$	0.19
	Diluted		$	0.29			$	0.18
Cash dividends declared per common share			$	0.00			$	0.00
Weighted average shares outstanding:
	Basic			24,507				24,587
	Diluted			24,641				24,772

AAON, Inc., and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
				March 31, 2013			December 31, 2012
				(in thousands, except share and per share data)
Assets
Current assets:
	Cash and cash equivalents			$	9,717		$	3,159
	Certificates of deposit				2,400			3,120
	Investments held to maturity at amortized cost				4,736			2,832
	Accounts receivable, net				38,551			43,866
	Income tax receivable				975			694
	Note receivable				28			28
	Inventories, net				33,986			32,614
	Prepaid expenses and other				839			740
	Deferred tax assets				4,795			4,493
Total current assets					96,027			91,546
Property, plant and equipment:
	Land				1,340			1,340
	Buildings				59,878			59,761
	Machinery and equipment				118,005			117,617
	Furniture and fixtures				9,100			8,906
		Total property, plant and equipment			188,323			187,624
		Less: Accumulated depreciation			100,093			96,929
	Property, plant and equipment, net				88,230			90,695
Certificates of deposit					2,358			2,120
Investments held to maturity at amortized cost					6,796			8,041
Notes receivable					1,062			1,091
Total assets				$	194,473		$	193,493
Liabilities and Stockholders' Equity
Current liabilities:
	Revolving credit facility				-			-
	Accounts payable				10,945			13,047
	Accrued liabilities				23,683			26,578
Total current liabilities					34,628			39,625
Deferred tax liabilities					14,829			15,732
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value, 11,250,000 shares authorized, no shares issued					-			-
Common stock, $.004 par value, 112,500,000 shares authorized, 24,510,111 and 24,517,749 issued and outstanding at March 31, 2013 and December 31, 2012, respectively					98			98
	Retained earnings				144,918			138,038
Total stockholders' equity					145,016			138,136
Total liabilities and stockholders' equity				$	194,473		$	193,493

AAON, Inc., and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
					Three Months Ended
					March 31, 2013				March 31, 2012
					(in thousands)
Operating Activities
	Net income				$	7,140			$	4,567
	Adjustments to reconcile net income to net cash
	provided by operating activities:
		Depreciation				3,191				3,394
		Amortization of bond premiums				127				-
		Provision for losses on accounts receivable, net of adjustments				269				4
		Provision for excess and obsolete inventories				169				-
		Share-based compensation				392				169
		Excess tax benefits from stock options exercised
		and restricted stock awards vested				(109	)			(13	)
		(Gain) Loss on disposition of assets				7				(23	)
		Foreign currency (gain)loss				19				(23	)
		Interest income on note receivable				(10	)			-
		Deferred income taxes				(1,205	)			170
		Changes in assets and liabilities:
			Accounts receivable			5,046				(390	)
			Income tax receivable			(172	)			(237	)
			Inventories			(1,541	)			(1,807	)
			Prepaid expenses and other			(99	)			(82	)
			Accounts payable			(1,838	)			712
			Accrued liabilities			(2,895	)			5,130
	Net cash provided by operating activities					8,491				11,571
Investing Activities
	Proceeds from sale of property, plant and equipment					-				300
	Investment in certificates of deposit					(238	)			-
	Maturities of certificates of deposit					720				-
	Purchases of investments held to maturity					(1,396	)			-
	Maturities of investments					610				-
	Principal payments from note receivable					20				7
	Capital expenditures					(997	)			(2,959	)
	Net cash used in investing activities					(1,281	)			(2,652	)
Financing Activities
	Borrowings under revolving credit facility					1,955				13,111
	Payments under revolving credit facility					(1,955	)			(17,686	)
	Stock options exercised					354				55
	Excess tax benefits from stock options exercised and restricted stock awards vested					109				13
	Repurchases of stock					(1,115	)			(1,180	)
	Net cash used in financing activities					(652	)			(5,687	)
Net increase in cash and cash equivalents						6,558				3,232
Cash and cash equivalents, beginning of period						3,159				13
Cash and cash equivalents, end of period					$	9,717			$	3,245