• AAON Reports Earnings & Backlog For The First Quarter Of 2021

    Source: Nasdaq GlobeNewswire / 06 May 2021 06:00:03   America/Chicago

    TULSA, Okla., May 06, 2021 (GLOBE NEWSWIRE) -- AAON, INC. (NASDAQ-AAON), today announced its results for the first quarter of 2021.

    Financial Highlights:Three Months Ended 
     March 31,    		 %
     2021 2020 Change
     (in thousands, except share and per share data)
    Net sales$115,788  $137,483  (15.8)%
    Gross profit33,157  42,947  (22.8)%
    Gross profit %28.6% 31.2%  
    Selling, general and admin. expenses$14,696  $15,214  (3.4)%
    SG&A %12.7% 11.1%  
    Net income16,376  21,853  (25.1)%
    Net income %14.1% 15.9%  
    Effective Tax Rate11.4% 21.5%  
    Earnings per diluted share$0.30  $0.41  (26.8)%
    Diluted average shares53,814,644  52,871,419  1.8%
          
     March 31, December 31,%
     2021 2020 Change
     (in thousands)  
    Backlog$96,733  $74,417  30.0%
    Cash & cash equivalents & restricted cash97,772  82,288  18.8%
    Total current liabilities66,679  59,033  13.0%

    Net sales for the first quarter of 2021 decreased 15.8% to $115.8 million from $137.5 million in the first quarter of 2020. The year over year decline in net sales was partially attributable to fewer production days due to an extended holiday shutdown in early January and winter storm in February and is a reflection of our markets temporarily moderating at the end of 2020. Moreover, the prior year quarter was an all time record for the Company creating a tough relative comparison. The Company reported diluted EPS of $0.30, down 26.8% from $0.41 in the prior year period. The decline in EPS was largely due to the lower recognized revenue, partially offset by a lower effective tax rate. The lower tax rate compared to a year ago mainly related to a $1.8 million increase in excess tax benefits associated with stock awards.

    The Company finished the quarter with a backlog of $96.7 million, down from $119.6 million one year ago but up from $74.4 million at the end of 2020. The sequential improvement reflects the improved demand that we experienced throughout the first quarter. New bookings in the quarter increased 21% compared to the same period one year ago. Demand has continued to strengthen through April. As of May 1, 2021, backlog was approximately $104.5 million.

    Gary Fields, President and CEO, noted, "As we've mentioned in our prior releases, we were previously overwhelmed with customer orders and did not have the capacity to handle all these orders which lead to lengthy lead times in 2019. We spent most of that year adding several Salvagnini sheet metal fabrication machines and rearranging our production lines for more efficient production. In Longview, we started construction of our 224,000 square feet building which also housed additional Salvagninis and was completed in early 2021. As all this was happening, we had our lead times come down which resulted in a record breaking year in 2020. Although the pandemic caused new construction to slow down, our customers started to increase their replacement orders in early 2021 as demonstrated in the growth of our backlog."

    Gary Fields, President and CEO, said, “Considering our soft backlog entering the quarter combined with the challenges we faced related to the new construction market as well as the adverse weather at both of our facilities in February, we are pleased with our performance in the first quarter of the year. The year over year decline in revenue and earnings was unsurprising considering the all-time record quarter we realized in the first quarter of 2020. We believe the fact that our performance in the first quarter of 2021 was very similar to the fourth quarter of 2020 suggests our business has stabilized and has already begun to pick up after some moderation we experienced at the end of last year.”

    Mr. Fields added, “We are confident demand is improving. Our backlog at the beginning of May was up considerably from both the end 2020 and the end of the first quarter. Replacement demand is already improving as the economy recovers, and while the new construction market is still facing some challenges, we are beginning to see signs of stabilization. Inflation remains a challenge, but we are confident we will be able to maintain our margin through disciplined price management. In conclusion, as we look to the rest of the year, we continue to anticipate revenue and earnings will progressively improve throughout 2021.”

    As of March 31, 2021, the Company had no debt and unrestricted cash and cash equivalents of $97.0 million, which is up from $79.0 million at the end of 2020. Capital expenditures during the first three months of 2021 were $16.4 million, as compared to $21.9 million for the same period a year ago. Rebecca Thompson, CFO, stated, “We continue to anticipate our full-year 2021 capital expenditures will total approximately $70.7 million.”

    The Company will host a conference call today at 4:15 P.M. (Eastern Time) to discuss the first quarter 2021 results. To participate, call 1-888-241-0551 (code 7788949); or, for rebroadcast available through May 13, 2021, call 1-855-859-2056 (code 7788949).

    About AAON
    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, 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.

    Forward-Looking Statements
    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, including risks related to the impact of the error correction, that could cause actual results and developments to differ materially from the forward-looking statements.

    Contact Information
    Joseph Mondillo
    Director of Investor Relations
    Phone: (617) 877-6346
    Email: joseph.mondillo@aaon.com 

    AAON, Inc. and Subsidiaries
    Consolidated Statements of Income
    (Unaudited)
      Three Months Ended 
     March 31,
      2021 2020
     (in thousands, except share and per share data)
    Net sales $115,788  $137,483 
    Cost of sales 82,631  94,536 
    Gross profit 33,157  42,947 
    Selling, general and administrative expenses 14,696  15,214 
    (Gain) loss on disposal of assets —  (62)
    Income from operations 18,461  27,795 
    Interest income, net 3  61 
    Other income (expense), net 17  (27)
    Income before taxes 18,481  27,829 
    Income tax provision 2,105  5,976 
    Net income $16,376  $21,853 
    Earnings per share:    
    Basic $0.31  $0.42 
    Diluted $0.30  $0.41 
    Weighted average shares outstanding:    
    Basic 52,293,464  52,071,839 
    Diluted 53,814,644  52,871,419 


    AAON, Inc. and Subsidiaries
    Consolidated Balance Sheets
    (Unaudited)
     March 31, 2021 December 31, 2020
    Assets(in thousands, except share and per share data)
    Current assets:   
    Cash and cash equivalents$97,047  $79,025 
    Restricted cash725  3,263 
    Accounts receivable, net of allowance for credit losses of $493 and $506, respectively52,579  47,387 
    Income tax receivable7,353  4,587 
    Note receivable32  31 
    Inventories, net84,040  82,219 
    Prepaid expenses and other3,631  3,739 
    Total current assets245,407  220,251 
    Property, plant and equipment:   
    Land4,109  4,072 
    Buildings126,090  122,171 
    Machinery and equipment292,961  281,266 
    Furniture and fixtures19,971  18,956 
    Total property, plant and equipment443,131  426,465 
    Less:  Accumulated depreciation210,483  203,125 
    Property, plant and equipment, net232,648  223,340 
    Goodwill and intangible assets, net3,229  3,267 
    Right of use assets1,522  1,571 
    Note receivable578  579 
    Total assets$483,384  $449,008 
        
    Liabilities and Stockholders' Equity   
    Current liabilities:   
    Accounts payable$17,615  $12,447 
    Accrued liabilities49,064  46,586 
    Total current liabilities66,679  59,033 
    Deferred tax liabilities32,982  28,324 
    Other long-term liabilities4,312  4,423 
    New market tax credit obligation6,373  6,363 
    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, 52,423,579 and 52,224,767 issued and outstanding at March 31, 2021 and December 31, 2020, respectively210  209 
    Additional paid-in capital10,957  5,161 
    Retained earnings361,871  345,495 
    Total stockholders' equity373,038  350,865 
    Total liabilities and stockholders' equity$483,384  $449,008 


    AAON, Inc. and Subsidiaries
    Consolidated Statements of Cash Flows
    (Unaudited)
     Three Months Ended 
     March 31,
     2021 2020
    Operating Activities(in thousands)
    Net income$16,376  $21,853 
    Adjustments to reconcile net income to net cash provided by operating activities:   
    Depreciation and amortization7,398  6,002 
    Amortization of debt issuance cost10  10 
    (Recovery of) provision for credit losses on accounts receivable, net of adjustments(13) 294 
    Provision for excess and obsolete inventories(194) (274)
    Share-based compensation2,761  2,351 
    (Gain) loss on disposition of assets—  (62)
    Foreign currency transaction (gain) loss(8) 51 
    Interest income on note receivable(6) (6)
    Deferred income taxes4,658  (167)
    Changes in assets and liabilities:   
    Accounts receivable(5,179) (2,789)
    Income taxes(2,766) 772 
    Inventories(1,627) 1,020 
    Prepaid expenses and other108  (670)
    Accounts payable4,904  2,742 
    Deferred revenue2,358  229 
    Accrued liabilities58  6,241 
    Net cash provided by operating activities28,838  37,597 
    Investing Activities   
    Capital expenditures(16,404) (21,877)
    Proceeds from sale of property, plant and equipment—  61 
    Principal payments from note receivable14  12 
    Net cash used in investing activities(16,390) (21,804)
    Financing Activities   
    Stock options exercised9,438  4,497 
    Repurchase of stock(5,185) (11,565)
    Employee taxes paid by withholding shares(1,217) (953)
    Net cash provided by (used in) financing activities3,036  (8,021)
    Net increase in cash, cash equivalents and restricted cash15,484  7,772 
    Cash, cash equivalents and restricted cash, beginning of period82,288  44,373 
    Cash, cash equivalents and restricted cash, end of period$97,772  $52,145 

     


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