0000824142-16-000222.txt : 20161103 0000824142-16-000222.hdr.sgml : 20161103 20161103093028 ACCESSION NUMBER: 0000824142-16-000222 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20161103 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20161103 DATE AS OF CHANGE: 20161103 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AAON INC CENTRAL INDEX KEY: 0000824142 STANDARD INDUSTRIAL CLASSIFICATION: AIR COND & WARM AIR HEATING EQUIP & COMM & INDL REFRIG EQUIP [3585] IRS NUMBER: 870448736 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-18953 FILM NUMBER: 161970385 BUSINESS ADDRESS: STREET 1: 2425 SOUTH YUKON CITY: TULSA STATE: OK ZIP: 74107 BUSINESS PHONE: 9185832266 MAIL ADDRESS: STREET 1: 2425 SOUTH YUKON CITY: TULSA STATE: OK ZIP: 74107 FORMER COMPANY: FORMER CONFORMED NAME: DIAMOND HEAD RESOURCES INC DATE OF NAME CHANGE: 19900808 8-K 1 aaonq32016pressrelease.htm 8-K Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934


Date of Report (Date of earliest event reported): November 3, 2016

AAON, INC.
(Exact name of Registrant as Specified in Charter) 
Nevada
0-18953
87-0448736
(State or Other Jurisdiction
(Commission File Number: )
(IRS Employer Identification No.)
of Incorporation)
 
 
 
 
 
2425 South Yukon, Tulsa, Oklahoma 
 
74107
(Address of Principal Executive Offices)
 
(Zip Code)
 
(Registrant's telephone number, including area code): (918) 583-2266

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.02    Results of Operations and Financial Conditions.

On November 3, 2016, AAON, Inc. (the "Company") announced its financial and operating results and backlog for the third quarter ended September 30, 2016. A copy of the Company's press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The Company plans to host a teleconference at 4:15 P.M (Eastern Time) on November 3, 2016 to discuss these results. To access the call, please dial 1-844-255-9472 (code 2436766). A replay of the call will be available through November 10, 2016 at 1-855-859-2056 (code 2436766).

In accordance with General Instruction B.2 of Form 8-K, the information in this Item shall not be deemed "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing.

Item 7.01    Regulation FD Disclosure.

On November 3, 2016, the Company issued the press release described above in Item 2.02 of this Current Report on Form 8-K. A copy of the press release is attached hereto as Exhibit 99.1.

All statements in the teleconference, other than historical financial information, may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item shall not be deemed "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing.

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits
Exhibit Number
 
Description
 
 
 
 
 
99.1
 
Press release dated November 3, 2016 announcing financial and operating results and backlog.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
AAON, INC.
 
 
 
 
Date:
November 3, 2016
By:
/s/ Luke A. Bomer
 
 
 
Luke A. Bomer, Secretary



 EX-99.1 2 aaonq32016pressreleaseexhi.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1                        
NEWS
BULLETIN
 
AAON, Inc.
 
2425 South Yukon Ave. Ÿ Tulsa, OK 74107-2728
 
Ÿ Ph: (918) 583-2266 Ÿ   Fax: (918) 583-6094 Ÿ
 
Ÿhttp://www.aaon.comŸ
 
 
 
For Further Information:
FOR IMMEDIATE RELEASE
November 3, 2016
 
Jerry R. Levine Ÿ Phone: (914) 244-0292 Ÿ Fax: (914) 244-0295
 
Email: jrladvisor@yahoo.com

AAON REPORTS RECORD THIRD QUARTER SALES AND EARNINGS

TULSA, OK, November 3, 2016 - AAON, Inc. (NASDAQ-AAON) today announced its operating results for the third quarter and nine months ended September 30, 2016.

In the quarter, net sales were $104.6 million, up 10.8% from $94.4 million in 2015. Net income was $15.7 million, up 18.3% from $13.3 million in the same period a year ago. Net sales for the nine months ended September 30, 2016 were $292.3 million, up 11.8% from $261.4 million in 2015. Net income for the nine months ended September 30, 2016 was $42.0 million, up 28.0% from $32.8 million in 2015. Both sales and earnings in 2016 were all-time records for any third quarter in the history of AAON.

Earnings per diluted share in the third quarter of 2016 were $0.29, up 20.8% from $0.24 for the same period the previous year, based upon 53.4 million and 54.6 million diluted shares outstanding at September 30, 2016 and 2015, respectively. Earnings per diluted share for the nine months ended September 30, 2016 were $0.78, up 30.0% from $0.60 in 2015, based upon 53.5 million and 54.6 million diluted shares outstanding at September 30, 2016 and 2015, respectively.

The Company early adopted ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which requires that excess tax benefits and deficiencies are reported as an income tax benefit or expense on the statement of income rather than as a component of additional paid-in capital in the statement of equity. For the three and nine months ended September 30, 2016, the Company recognized $0.6 million and $1.8 million, respectively, of excess tax benefits in the Statement of Income. The three months ended September 30, 2016 also had a benefit of $0.5 million related to a return to tax provision adjustment.

Norman H. Asbjornson, President and CEO, stated, “Our volume continues to increase allowing us to gain efficiencies and cost savings in our manufacturing process and keep our gross profit stable. Our increased focus on quality is helping to keep our warranty costs low and reduce our SG&A expense as a percent of sales to approximately 9.9% and 10.2% , respectively, for the three and nine months ended September 30, 2016."

Mr. Asbjornson further added, “Our financial condition at September 30, 2016 remained quite strong with a current ratio of 3.3:1 (including cash and short-term investments totaling $41.3 million). We continue to remain debt free. Our backlog at September 30, 2016 increased 3% to $62.2 million, from $60.4 million for the same period a year ago.”

Mr. Asbjornson continued, “We've had a slower than expected start to our new Water-Source Heat Pump line this quarter due to manufacturing start-up, but have initiated production on our first orders and are moving this forward quickly. We expect steel prices will start to modestly impact us in the fourth quarter but we believe that our cost savings efforts elsewhere will allow us to maintain our gross profit level. We look forward to another year of record sales and earnings."

The Company will host a conference call today at 4:15 P.M. Eastern Time to discuss the third quarter results. To participate, call 1-844-255-9472 (code 2436766); or, for rebroadcast, call 1-855-859-2056 (code 2436766).


1


AAON, Inc. is engaged in the engineering, manufacturing, marketing and sale of air conditioning and heating equipment consisting of standard, semi-custom and custom rooftop units, chillers, packaged outdoor mechanical rooms, air handling units, makeup air units, energy recovery units, condensing units, geothermal/water-source heat pumps and coils. Since the founding of AAON in 1988, AAON has maintained a commitment to design, develop, manufacture and deliver heating and cooling products to perform beyond all expectations and demonstrate the value of AAON to our customers.

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.

2


AAON, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
 
Three Months Ended 
 September 30,
 
Nine Months Ended 
 September 30,
 
2016
 
2015
 
2016
 
2015
 
(in thousands, except share and per share data)
Net sales
$
104,568

 
$
94,360

 
$
292,309

 
$
261,403

Cost of sales
71,476

 
64,175

 
200,739

 
182,303

Gross profit
33,092

 
30,185

 
91,570

 
79,100

Selling, general and administrative expenses
10,400

 
10,062

 
29,874

 
27,579

Gain on disposal of assets
—

 
(34
)
 
(20
)
 
(59
)
Income from operations
22,692

 
20,157

 
61,716

 
51,580

Interest income
82

 
14

 
223

 
87

Other (expense) income, net
(12
)
 
(58
)
 
115

 
(106
)
Income before taxes
22,762

 
20,113

 
62,054

 
51,561

Income tax provision
7,080

 
6,862

 
20,098

 
18,781

Net income
$
15,682

 
$
13,251

 
$
41,956

 
$
32,780

Earnings per share:
 

 
 

 
 
 
 
Basic
$
0.30

 
$
0.24

 
$
0.79

 
$
0.61

Diluted
$
0.29

 
$
0.24

 
$
0.78

 
$
0.60

Cash dividends declared per common share:
$
—

 
$
—

 
$
0.11

 
$
0.11

Weighted average shares outstanding:
 

 
 

 
 
 
 
Basic
52,891,879

 
54,209,942

 
52,942,571

 
54,160,649

Diluted
53,394,331

 
54,579,590

 
53,467,023

 
54,623,163





3


AAON, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
 
September 30, 2016
 
December 31, 2015
Assets
(in thousands, except share and per share data)
Current assets:
 
 
 
Cash and cash equivalents
$
14,562

 
$
7,908

Certificates of deposit
6,232

 
10,080

Investments held to maturity at amortized cost
20,518

 
12,444

Accounts receivable, net
53,334

 
50,024

Income tax receivable
2,472

 
4,702

Note receivable
25

 
23

Inventories, net
43,401

 
38,499

Prepaid expenses and other
820

 
533

Total current assets
141,364

 
124,213

Property, plant and equipment:
 

 
 

Land
2,233

 
2,233

Buildings
77,185

 
68,806

Machinery and equipment
156,932

 
143,100

Furniture and fixtures
12,543

 
11,270

Total property, plant and equipment
248,893

 
225,409

Less:  Accumulated depreciation
133,659

 
124,348

Property, plant and equipment, net
115,234

 
101,061

Certificates of deposit
—

 
1,880

Investments held to maturity at amortized cost
—

 
5,039

Note receivable
679

 
661

Total assets
$
257,277

 
$
232,854

 
 
 
 
Liabilities and Stockholders' Equity
 

 
 

Current liabilities:
 

 
 

Revolving credit facility
$
—

 
$
—

Accounts payable
7,228

 
6,178

Dividends payable
—

 
—

Accrued liabilities
36,110

 
37,235

Total current liabilities
43,338

 
43,413

Deferred revenue
1,423

 
698

Deferred tax liabilities
7,187

 
8,706

Donations
553

 
1,119

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, 52,783,642 and 53,012,363 issued and outstanding at September 30, 2016 and December 31, 2015, respectively
211

 
212

Additional paid-in capital
—

 
—

Retained earnings
204,565

 
178,706

Total stockholders' equity
204,776

 
178,918

Total liabilities and stockholders' equity
$
257,277

 
$
232,854



4


AAON, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
 
Nine Months Ended 
 September 30,
 
2016
 
2015
Operating Activities
(in thousands)
Net income
$
41,956

 
$
32,780

Adjustments to reconcile net income to net cash provided by operating activities:
 

 
 

Depreciation
9,547

 
8,587

Amortization of bond premiums
216

 
168

Provision for losses on accounts receivable, net of adjustments
30

 
(48
)
Provision for excess and obsolete inventories
420

 
(111
)
Share-based compensation
3,172

 
2,076

Gain on disposition of assets
(20
)
 
(59
)
Foreign currency transaction (gain) loss
(38
)
 
114

Interest income on note receivable
(21
)
 
(23
)
Deferred income taxes
(1,519
)
 
(1,000
)
Changes in assets and liabilities:
 

 
 

Accounts receivable
(3,340
)
 
(1,685
)
Income taxes
2,230

 
2,614

Inventories
(5,322
)
 
(3,323
)
Prepaid expenses and other
(287
)
 
(154
)
Accounts payable
949

 
(3,801
)
Deferred revenue
334

 
138

Accrued liabilities and donations
(1,300
)
 
2,130

Net cash provided by operating activities
47,007

 
38,403

Investing Activities
 

 
 

Capital expenditures
(23,627
)
 
(12,775
)
Proceeds from sale of property, plant and equipment
28

 
63

Investment in certificates of deposits
(4,112
)
 
(6,200
)
Maturities of certificates of deposits
9,840

 
4,658

Purchases of investments held to maturity
(10,384
)
 
(14,183
)
Maturities of investments
5,622

 
9,907

Proceeds from called investments
1,511

 
757

Principal payments from note receivable
39

 
42

Net cash used in investing activities
(21,083
)
 
(17,731
)
Financing Activities
 

 
 

Borrowings under revolving credit facility
761

 
—

Payments under revolving credit facility
(761
)
 
—

Stock options exercised
1,681

 
2,640

Repurchase of stock
(14,572
)
 
(9,074
)
Employee taxes paid by withholding shares

(559
)
 
(362
)
Cash dividends paid to stockholders
(5,820
)

(5,965
)
Net cash used in financing activities
(19,270
)
 
(12,761
)
Net increase in cash and cash equivalents
6,654

 
7,911

Cash and cash equivalents, beginning of period
7,908

 
21,952

Cash and cash equivalents, end of period
$
14,562

 
$
29,863



5


Use of Non-GAAP Financial Measures
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, provides 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 
September 30,
 
Nine Months Ended September 30,
 
 
 
2016
 
2015
 
2016
 
2015
 
(in thousands)
Net Income, a GAAP measure
$
15,682

 
$
13,251

 
$
41,956

 
$
32,780

Depreciation
3,201

 
2,988

 
9,547

 
8,587

Amortization of bond premiums
65

 
62

 
216

 
168

Share-based compensation
1,129

 
795

 
3,172

 
2,076

Interest income
(147
)
 
(76
)
 
(439
)
 
(255
)
Income tax expense
7,080

 
6,862

 
20,098

 
18,781

EBITDAX, a non-GAAP measure
$
27,010

 
$
23,882

 
$
74,550

 
$
62,137






6