AAON, Inc. (NASDAQ-AAON) today announced its operating results for
the second quarter and six months ended June 30, 2019.
In the quarter ended June 30, 2019, net
sales were $119.4 million, up 9.0% from $109.6 million in 2018. Net
income was $13.0 million, an increase of 10.9% from $11.7 million
in the same period a year ago. Net sales for the six
months ended June 30, 2019 were $233.3 million,
increasing 11.8% from $209
million in 2018. Net income for the six months ended
June 30, 2019 was $23.9 million, up 49.6%
from $16.0 million in 2018.
Our backlog at June 30, 2019, increased
18.3% to $179.6 million, from $151.8 million at December 31, 2018,
and increased 15.0% from $156.6 million at June 30, 2018.
Earnings per diluted share for the second
quarter of 2019 were $0.25, an increase of 13.6% from $0.22 for the
same period in 2018, based upon 52.7 million and 52.7 million
shares outstanding at June 30, 2019 and 2018,
respectively. Earnings per diluted share for the six
months ended June 30, 2019 were $0.45, an increase
of 50.0% from $0.30 in 2018, based
upon 52.6 million and 52.8 million shares
outstanding at June 30, 2019 and 2018,
respectively.
Gross profit, benefiting from moderating raw
material costs and improved productivity, increased 30.2% to $56.0
million (24.0% of sales) for the six months ended June 30, 2019,
versus $43.0 million (20.6% of sales) for the same period a year
ago.
Norman H. Asbjornson, CEO, said, "In the fourth
quarter of 2018 we became aware of the need for additional sheet
metal fabrication equipment and ordered four additional systems at
that time. However, due to the substantial increase in business, we
pushed our existing equipment as hard as possible which caused
additional downtime on the equipment, thus limiting the amount of
additional growth we were able to attain. As the year has
progressed we experienced strengthening demand and thus recently
ordered another four machines, totaling eight machines on
order."
Selling, general and administrative
expenses increased 3.0% to $13.5
million (11.3% of sales) from $13.1
million (11.9% of sales) as compared to the second
quarter of 2018. For the six months ended June 30,
2019, selling, general and administrative expenses increased 5.1%
to $24.5 million (10.5% of sales) compared to $23.3 million (11.2%
of sales) for the same period a year ago.
Mr. Asbjornson continued, "Our financial
condition at June 30, 2019 remained strong with a current ratio of
2.9:1, including cash and investments totaling $17.7 million, and
we continue to operate debt free."
Gary Fields, President, stated, "Our recently
purchased Salvagnini sheet metal fabrication machines started to
arrive in early July and will continue to arrive throughout 2019,
with the final machine scheduled to arrive January of 2020. Each
Salvagnini system will be in full production within 45 days of
arrival. Furthermore, we have taken significant steps to
improve our sheet metal fabrication equipment maintenance and
production capabilities through the hiring of a former long-term
Salvagnini employee to implement and oversee strengthened
maintenance and replacement initiatives."
Mr. Fields concluded, "We believe the steps
taken to address our manufacturing capacity issues will allow us to
see improvements in our overall operations as the year
progresses."
The Company will host a conference call today at
4:15 P.M. Eastern Time to discuss the second quarter results. To
participate, call 1-888-241-0551 (code 3096466); or, for
rebroadcast, call 1-855-859-2056 (code 3096466).
About AAONAAON, 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, coils and controls. 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.
For more information, please visit www.AAON.com.
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.
Contact InformationJerry R.
LevinePhone: (561) 482-4046 or (914) 244-0292Fax: (914)
244-0295Email: jrladvisor@yahoo.com
AAON, Inc. and Subsidiaries |
Consolidated Statements of Income |
(Unaudited) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
(in thousands, except share and per share data) |
Net sales |
$ |
119,437 |
|
|
$ |
109,588 |
|
|
$ |
233,259 |
|
|
$ |
208,670 |
|
Cost of
sales |
89,262 |
|
|
82,003 |
|
|
177,291 |
|
|
165,695 |
|
Gross
profit |
30,175 |
|
|
27,585 |
|
|
55,968 |
|
|
42,975 |
|
Selling,
general and administrative expenses |
13,481 |
|
|
13,086 |
|
|
24,482 |
|
|
23,305 |
|
Loss (gain) on
disposal of assets |
6 |
|
|
(4 |
) |
|
290 |
|
|
(11 |
) |
Income from
operations |
16,688 |
|
|
14,503 |
|
|
31,196 |
|
|
19,681 |
|
Interest
income, net |
31 |
|
|
67 |
|
|
40 |
|
|
135 |
|
Other expense,
net |
17 |
|
|
12 |
|
|
(9 |
) |
|
6 |
|
Income before
taxes |
16,736 |
|
|
14,582 |
|
|
31,227 |
|
|
19,822 |
|
Income tax
provision |
3,775 |
|
|
2,891 |
|
|
7,364 |
|
|
3,871 |
|
Net
income |
$ |
12,961 |
|
|
$ |
11,691 |
|
|
$ |
23,863 |
|
|
$ |
15,951 |
|
Earnings per
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.25 |
|
|
$ |
0.22 |
|
|
$ |
0.46 |
|
|
$ |
0.30 |
|
Diluted |
$ |
0.25 |
|
|
$ |
0.22 |
|
|
$ |
0.45 |
|
|
$ |
0.30 |
|
Cash dividends
declared per common share: |
$ |
0.16 |
|
|
$ |
0.16 |
|
|
$ |
0.16 |
|
|
$ |
0.16 |
|
Weighted
average shares outstanding: |
|
|
|
|
|
|
|
Basic |
52,120,272 |
|
|
52,383,842 |
|
|
52,087,626 |
|
|
52,348,912 |
|
Diluted |
52,747,199 |
|
|
52,717,787 |
|
|
52,589,845 |
|
|
52,754,045 |
|
AAON, Inc. and Subsidiaries |
Consolidated Balance Sheets |
(Unaudited) |
|
June 30, 2019 |
|
December 31, 2018 |
Assets |
(in thousands, except share and per share data) |
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
13,683 |
|
|
$ |
1,994 |
|
Certificates of deposit |
4,000 |
|
|
— |
|
Accounts receivable, net |
68,933 |
|
|
54,078 |
|
Income tax receivable |
3,246 |
|
|
6,104 |
|
Note receivable |
28 |
|
|
27 |
|
Inventories, net |
77,044 |
|
|
77,612 |
|
Prepaid expenses and other |
1,696 |
|
|
1,046 |
|
Total current
assets |
168,630 |
|
|
140,861 |
|
Property,
plant and equipment: |
|
|
|
Land |
3,125 |
|
|
3,114 |
|
Buildings |
99,193 |
|
|
97,393 |
|
Machinery and equipment |
219,438 |
|
|
212,779 |
|
Furniture and fixtures |
17,107 |
|
|
16,597 |
|
Total property, plant and equipment |
338,863 |
|
|
329,883 |
|
Less: Accumulated depreciation |
171,232 |
|
|
166,880 |
|
Property,
plant and equipment, net |
167,631 |
|
|
163,003 |
|
Intangible
assets, net |
389 |
|
|
506 |
|
Goodwill |
3,229 |
|
|
3,229 |
|
Right of use
assets |
1,764 |
|
|
— |
|
Note
receivable |
608 |
|
|
598 |
|
Total
assets |
$ |
342,251 |
|
|
$ |
308,197 |
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
Current
liabilities: |
|
|
|
Revolving credit facility |
$ |
— |
|
|
$ |
— |
|
Accounts payable |
7,885 |
|
|
10,616 |
|
Dividends payable |
8,355 |
|
|
— |
|
Accrued liabilities |
42,713 |
|
|
37,455 |
|
Total current
liabilities |
58,953 |
|
|
48,071 |
|
Deferred tax
liabilities |
14,938 |
|
|
10,826 |
|
Other
long-term liabilities |
3,791 |
|
|
1,801 |
|
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,
52,118,180 and 51,991,242 issued and outstanding at June 30, 2019
and December 31, 2018, respectively |
209 |
|
|
208 |
|
Additional paid-in capital |
1,586 |
|
|
— |
|
Retained earnings |
262,774 |
|
|
247,291 |
|
Total
stockholders' equity |
264,569 |
|
|
247,499 |
|
Total
liabilities and stockholders' equity |
$ |
342,251 |
|
|
$ |
308,197 |
|
AAON, Inc. and Subsidiaries |
Consolidated Statements of Cash Flows |
(Unaudited) |
|
Six Months Ended June 30, |
|
2019 |
|
2018 |
Operating Activities |
(in thousands) |
Net income |
$ |
23,863 |
|
|
$ |
15,951 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
11,760 |
|
|
8,438 |
|
Amortization of bond premiums |
— |
|
|
8 |
|
Provision for losses on accounts receivable, net of
adjustments |
128 |
|
|
89 |
|
Provision for excess and obsolete inventories |
1,153 |
|
|
299 |
|
Share-based compensation |
5,073 |
|
|
3,699 |
|
Loss (gain) on disposition of assets |
290 |
|
|
(11 |
) |
Foreign currency transaction gain |
(13 |
) |
|
15 |
|
Interest income on note receivable |
(26 |
) |
|
14 |
|
Deferred income taxes |
4,112 |
|
|
438 |
|
Changes in assets and liabilities: |
|
|
|
Accounts receivable |
(14,983 |
) |
|
(2,087 |
) |
Income taxes |
2,858 |
|
|
(3,328 |
) |
Inventories |
(585 |
) |
|
1,400 |
|
Prepaid expenses and other |
(650 |
) |
|
(935 |
) |
Accounts payable |
(2,592 |
) |
|
12,974 |
|
Deferred revenue |
172 |
|
|
(931 |
) |
Accrued liabilities |
5,312 |
|
|
213 |
|
Net cash provided by operating activities |
35,872 |
|
|
36,246 |
|
Investing Activities |
|
|
|
Capital expenditures |
(16,784 |
) |
|
(25,925 |
) |
Cash paid in business combination |
— |
|
|
(6,377 |
) |
Proceeds from sale of property, plant and equipment |
59 |
|
|
11 |
|
Investment in certificates of deposits |
(6,000 |
) |
|
(7,200 |
) |
Maturities of certificates of deposits |
2,000 |
|
|
4,560 |
|
Purchases of investments held to maturity |
— |
|
|
(9,001 |
) |
Maturities of investments |
— |
|
|
11,620 |
|
Proceeds from called investments |
— |
|
|
495 |
|
Principal payments from note receivable |
28 |
|
|
16 |
|
Net cash used in investing activities |
(20,697 |
) |
|
(31,801 |
) |
Financing Activities |
|
|
|
Stock options exercised |
7,685 |
|
|
2,299 |
|
Repurchase of stock |
(10,191 |
) |
|
(11,539 |
) |
Employee taxes paid by withholding shares |
(980 |
) |
|
(808 |
) |
Net cash used in financing activities |
(3,486 |
) |
|
(10,048 |
) |
Net
increase (decrease) in cash and cash
equivalents |
11,689 |
|
|
(5,603 |
) |
Cash
and cash equivalents, beginning of period |
1,994 |
|
|
21,457 |
|
Cash
and cash equivalents, end of period |
$ |
13,683 |
|
|
$ |
15,854 |
|
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 and amortization, (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 June 30, |
|
Six Months Ended June 30, |
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
(in thousands) |
Net Income, a
GAAP measure |
$ |
12,961 |
|
|
$ |
11,691 |
|
|
$ |
23,863 |
|
|
$ |
15,951 |
|
Depreciation
and amortization |
5,846 |
|
|
4,309 |
|
|
11,760 |
|
|
8,438 |
|
Amortization
of bond premiums |
— |
|
|
3 |
|
|
— |
|
|
8 |
|
Share-based
compensation |
3,043 |
|
|
1,975 |
|
|
5,073 |
|
|
3,699 |
|
Interest
income |
(31 |
) |
|
(70 |
) |
|
(40 |
) |
|
(143 |
) |
Income tax
expense |
3,775 |
|
|
2,891 |
|
|
7,364 |
|
|
3,871 |
|
EBITDAX, a
non-GAAP measure |
$ |
25,594 |
|
|
$ |
20,799 |
|
|
$ |
48,020 |
|
|
$ |
31,824 |
|
AAON (NASDAQ:AAON)
Historical Stock Chart
From Aug 2024 to Sep 2024
AAON (NASDAQ:AAON)
Historical Stock Chart
From Sep 2023 to Sep 2024