[] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Nevada | 87-0448736 |
(State or other jurisdiction | (IRS Employer |
of incorporation or organization) | Identification No.) |
2425 South Yukon, Tulsa, Oklahoma 74107 | |
(Address of principal executive offices) (Zip Code) |
Large accelerated filer | Accelerated filer |
Non-accelerated filer | Smaller reporting company |
AAON, Inc. and Subsidiaries | |||||||
Consolidated Balance Sheets | |||||||
(Unaudited) | |||||||
June 30, 2013 | December 31, 2012 | ||||||
Assets | (in thousands, except share and per share data) | ||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 19,415 | $ | 3,159 | |||
Certificates of deposit | 3,460 | 3,120 | |||||
Investments held to maturity at amortized cost | 7,353 | 2,832 | |||||
Accounts receivable, net | 50,108 | 43,866 | |||||
Income tax receivable | 410 | 694 | |||||
Note receivable | 29 | 28 | |||||
Inventories, net | 34,131 | 32,614 | |||||
Prepaid expenses and other | 900 | 740 | |||||
Deferred tax assets | 5,605 | 4,493 | |||||
Total current assets | 121,411 | 91,546 | |||||
Property, plant and equipment: | |||||||
Land | 1,340 | 1,340 | |||||
Buildings | 60,126 | 59,761 | |||||
Machinery and equipment | 118,253 | 117,617 | |||||
Furniture and fixtures | 9,322 | 8,906 | |||||
Total property, plant and equipment | 189,041 | 187,624 | |||||
Less: Accumulated depreciation | 102,963 | 96,929 | |||||
Property, plant and equipment, net | 86,078 | 90,695 | |||||
Certificates of deposit | 1,298 | 2,120 | |||||
Investments held to maturity at amortized cost | 11,475 | 8,041 | |||||
Note receivable | 952 | 1,091 | |||||
Total assets | $ | 221,214 | $ | 193,493 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Revolving credit facility | $ | — | $ | — | |||
Accounts payable | 13,858 | 13,047 | |||||
Dividends payable | 3,712 | — | |||||
Accrued liabilities | 36,045 | 26,578 | |||||
Total current liabilities | 53,615 | 39,625 | |||||
Deferred revenue | 201 | — | |||||
Deferred tax liabilities | 14,878 | 15,732 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Preferred stock, $.001 par value, 16,875,000 shares authorized, no shares issued* | — | — | |||||
Common stock, $.004 par value, 168,750,000 shares authorized, | 147 | 147 | |||||
36,754,988 and 36,776,624 issued and outstanding at June 30, 2013 | |||||||
and December 31, 2012, respectively* | |||||||
Additional paid-in capital | — | — | |||||
Retained earnings | 152,373 | 137,989 | |||||
Total stockholders' equity | 152,520 | 138,136 | |||||
Total liabilities and stockholders' equity | $ | 221,214 | $ | 193,493 |
AAON, Inc. and Subsidiaries | |||||||||||||||
Consolidated Statements of Income | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(in thousands, except share and per share data) | |||||||||||||||
Net sales | $ | 91,241 | $ | 83,333 | $ | 158,074 | $ | 148,290 | |||||||
Cost of sales | 63,565 | 62,230 | 115,086 | 113,669 | |||||||||||
Gross profit | 27,676 | 21,103 | 42,988 | 34,621 | |||||||||||
Selling, general and administrative expenses | 9,089 | 6,899 | 16,056 | 12,880 | |||||||||||
(Gain) loss on disposal of assets | (59 | ) | 10 | (52 | ) | (13 | ) | ||||||||
Income from operations | 18,646 | 14,194 | 26,984 | 21,754 | |||||||||||
Interest expense | — | (11 | ) | (1 | ) | (27 | ) | ||||||||
Interest income | 57 | 2 | 92 | 15 | |||||||||||
Other income (expense), net | 253 | (51 | ) | 237 | (3 | ) | |||||||||
Income before taxes | 18,956 | 14,134 | 27,312 | 21,739 | |||||||||||
Income tax provision | 6,837 | 4,837 | 8,053 | 7,875 | |||||||||||
Net income | $ | 12,119 | $ | 9,297 | $ | 19,259 | $ | 13,864 | |||||||
Earnings per share: | |||||||||||||||
Basic* | $ | 0.33 | $ | 0.25 | $ | 0.52 | $ | 0.38 | |||||||
Diluted* | $ | 0.33 | $ | 0.25 | $ | 0.52 | $ | 0.37 | |||||||
Cash dividends declared per common share*: | $ | 0.10 | $ | 0.08 | $ | 0.10 | $ | 0.08 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic* | 36,759,718 | 36,828,650 | 36,760,173 | 36,854,913 | |||||||||||
Diluted* | 37,150,262 | 37,091,528 | 37,056,201 | 37,124,982 |
AAON, Inc. and Subsidiaries | ||||||||||||||||||
Consolidated Statements of Stockholders' Equity | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Common Stock | Paid-in | Retained | ||||||||||||||||
Shares* | Amount* | Capital | Earnings* | Total | ||||||||||||||
(in thousands) | ||||||||||||||||||
Balances at December 31, 2012 | 36,777 | $ | 147 | $ | — | $ | 137,989 | $ | 138,136 | |||||||||
Net income | — | — | — | 19,259 | 19,259 | |||||||||||||
Stock options exercised and restricted | 139 | 1 | 1,151 | — | 1,152 | |||||||||||||
stock awards vested, including tax benefits | ||||||||||||||||||
Share-based compensation | — | — | 695 | — | 695 | |||||||||||||
Stock repurchased and retired | (161 | ) | (1 | ) | (1,846 | ) | (1,163 | ) | (3,010 | ) | ||||||||
Dividends** | — | — | — | (3,712 | ) | (3,712 | ) | |||||||||||
Balances at June 30, 2013 | 36,755 | $ | 147 | $ | — | $ | 152,373 | $ | 152,520 |
AAON, Inc. and Subsidiaries | |||||||
Consolidated Statements of Cash Flows | |||||||
(Unaudited) | |||||||
Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
Operating Activities | (in thousands) | ||||||
Net income | $ | 19,259 | $ | 13,864 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 6,268 | 6,747 | |||||
Amortization of bond premiums | 304 | 20 | |||||
Provision for losses on accounts receivable, net of adjustments | 102 | (1 | ) | ||||
Provision for excess and obsolete inventories | 201 | — | |||||
Share-based compensation | 695 | 364 | |||||
Excess tax benefits from stock options exercised and restricted stock awards vested | (385 | ) | (33 | ) | |||
Gain on disposition of assets | (52 | ) | (13 | ) | |||
Foreign currency transaction gain | 43 | 7 | |||||
Interest income on note receivable | (20 | ) | — | ||||
Deferred income taxes | (1,966 | ) | (875 | ) | |||
Write-off of note receivable | 75 | — | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (6,344 | ) | (17,949 | ) | |||
Income tax receivable | 3,942 | 5,801 | |||||
Inventories | (1,718 | ) | (4,194 | ) | |||
Prepaid expenses and other | (160 | ) | (91 | ) | |||
Accounts payable | 1,101 | 4,215 | |||||
Deferred revenue | 201 | — | |||||
Accrued liabilities | 6,194 | 11,714 | |||||
Net cash provided by operating activities | 27,740 | 19,576 | |||||
Investing Activities | |||||||
Capital expenditures | (1,949 | ) | (8,091 | ) | |||
Proceeds from sale of property, plant and equipment | 60 | 306 | |||||
Investment in certificates of deposits | (958 | ) | (4,274 | ) | |||
Maturities of certificates of deposits | 1,440 | — | |||||
Purchases of investments held to maturity | (9,969 | ) | (5,624 | ) | |||
Maturities of investments | 1,710 | — | |||||
Proceeds from called investment | — | 270 | |||||
Principal payments from note receivable | 40 | 15 | |||||
Net cash used in investing activities | (9,626 | ) | (17,398 | ) | |||
Financing Activities | |||||||
Borrowings under revolving credit facility | 2,321 | 27,108 | |||||
Payments under revolving credit facility | (2,321 | ) | (24,424 | ) | |||
Stock options exercised | 767 | 69 | |||||
Excess tax benefits from stock options exercised and restricted stock awards vested | 385 | 33 | |||||
Repurchase of stock | (3,010 | ) | (1,895 | ) | |||
Net cash (used in) provided by financing activities | (1,858 | ) | 891 | ||||
Net increase in cash and cash equivalents | 16,256 | 3,069 | |||||
Cash and cash equivalents, beginning of period | 3,159 | 13 | |||||
Cash and cash equivalents, end of period | $ | 19,415 | $ | 3,082 |
Amortized Cost | Gross Unrealized Gain | Gross Unrealized (Loss) | Fair Value | ||||||||||||
June 30, 2013: | (in thousands) | ||||||||||||||
Current assets: | |||||||||||||||
Investments held to maturity | $ | 7,353 | $ | 3 | $ | — | $ | 7,356 | |||||||
Non current assets: | |||||||||||||||
Investments held to maturity | 11,475 | — | (59 | ) | 11,416 | ||||||||||
Total | $ | 18,828 | $ | 3 | $ | (59 | ) | $ | 18,772 | ||||||
December 31, 2012: | |||||||||||||||
Current assets: | |||||||||||||||
Investments held to maturity | $ | 2,832 | $ | — | $ | (1 | ) | $ | 2,831 | ||||||
Non current assets: | |||||||||||||||
Investments held to maturity | 8,041 | — | (9 | ) | 8,032 | ||||||||||
Total | $ | 10,873 | $ | — | $ | (10 | ) | $ | 10,863 |
June 30, 2013 | December 31, 2012 | ||||||
(in thousands) | |||||||
Accounts receivable | $ | 50,262 | $ | 43,918 | |||
Less: Allowance for doubtful accounts | (154 | ) | (52 | ) | |||
Total, net | $ | 50,108 | $ | 43,866 |
Three months ended | Six months ended | ||||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | ||||||||||||
Allowance for doubtful accounts: | (in thousands) | ||||||||||||||
Balance, beginning of period | $ | 321 | $ | 261 | $ | 52 | $ | 268 | |||||||
Provisions for losses on accounts receivables | (167 | ) | (6 | ) | 102 | (1 | ) | ||||||||
Accounts receivable written off, net of recoveries | — | (13 | ) | — | (25 | ) | |||||||||
Balance, end of period | $ | 154 | $ | 242 | $ | 154 | $ | 242 |
June 30, 2013 | December 31, 2012 | ||||||
(in thousands) | |||||||
Raw materials | $ | 29,606 | $ | 28,155 | |||
Work in process | 2,477 | 2,757 | |||||
Finished goods | 2,585 | 2,065 | |||||
34,668 | 32,977 | ||||||
Less: Allowance for excess and obsolete inventories | (537 | ) | (363 | ) | |||
Total, net | $ | 34,131 | $ | 32,614 |
Three months ended | Six months ended | ||||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | ||||||||||||
Allowance for excess and obsolete inventories: | (in thousands) | ||||||||||||||
Balance, beginning of period | $ | 532 | $ | 300 | $ | 363 | $ | 300 | |||||||
Provisions for excess and obsolete inventories | 5 | — | 201 | — | |||||||||||
Inventories written off | — | — | (27 | ) | — | ||||||||||
Balance, end of period | $ | 537 | $ | 300 | $ | 537 | $ | 300 |
Three months ended | Six months ended | ||||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | ||||||||||||
Supplemental disclosures: | (in thousands) | ||||||||||||||
Interest paid | $ | — | $ | 2 | $ | — | $ | 26 | |||||||
Income taxes paid | 5,904 | 3,700 | 6,089 | 3,700 | |||||||||||
Non-cash investing and financing activities: | |||||||||||||||
Non-cash capital expenditures | 274 | (2,750 | ) | 290 | (1,356 | ) | |||||||||
Trade-in of equipment | — | — | — | 300 |
Three months ended | Six months ended | ||||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | ||||||||||||
Warranty accrual: | (in thousands) | ||||||||||||||
Balance, beginning of period | $ | 5,890 | $ | 6,086 | $ | 5,776 | $ | 6,093 | |||||||
Payments made | (1,184 | ) | (1,370 | ) | (1,917 | ) | (2,092 | ) | |||||||
Provisions | 2,060 | 1,859 | 2,907 | 2,574 | |||||||||||
Balance, end of period | $ | 6,766 | $ | 6,575 | $ | 6,766 | $ | 6,575 | |||||||
Warranty expense: | $ | 2,196 | $ | 1,859 | $ | 3,043 | $ | 2,574 |
June 30, 2013 | December 31, 2012 | ||||||
(in thousands) | |||||||
Warranty | $ | 6,766 | $ | 5,776 | |||
Due to representatives | 14,017 | 9,439 | |||||
Payroll | 3,755 | 3,852 | |||||
Workers' compensation | 609 | 928 | |||||
Medical self-insurance | 504 | 420 | |||||
Customer prepayments | 3,735 | 3,933 | |||||
Income tax payable | 3,273 | — | |||||
Employee benefits and other | 3,386 | 2,230 | |||||
Total | $ | 36,045 | $ | 26,578 |
Six months ended | |||||
June 30, 2013 | June 30, 2012 | ||||
Director and Officers: | |||||
Expected dividend yield | 1.19 | % | 1.23 | % | |
Expected volatility | 47.08 | % | 47.54 | % | |
Risk-free interest rate | 1.55 | % | 1.19 | % | |
Expected life (in years) | 7 | 7 | |||
Employees: | |||||
Expected dividend yield | 1.03 | % | 1.23 | % | |
Expected volatility | 45.66 | % | 46.00 | % | |
Risk-free interest rate | 1.23 | % | 1.19 | % | |
Expected life (in years) | 8 | 8 |
Range of Exercise Prices | Number of Shares | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | Intrinsic Value (in thousands) | |||||||||
$4.81-$6.47 | 77,400 | 2.51 | $ | 5.48 | $ | 1,282 | |||||||
$6.80-$8.65 | 220,650 | 4.86 | 7.18 | 3,281 | |||||||||
$9.13-$12.98 | 189,578 | 7.96 | 11.46 | 2,007 | |||||||||
Total | 487,628 | 5.70 | $ | 8.58 | $ | 6,570 |
Range of Exercise Prices | Number of Shares | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | Intrinsic Value (in thousands) | |||||||||
$4.30-$4.81 | 121,650 | 1.91 | $ | 4.61 | $ | 968 | |||||||
$5.02-$7.11 | 254,925 | 4.74 | 6.41 | 1,569 | |||||||||
$7.17-$9.19 | 193,350 | 4.76 | 8.05 | 872 | |||||||||
$10.34-$14.38 | 42,300 | 7.96 | 10.49 | 87 | |||||||||
Total | 612,225 | 4.41 | $ | 6.85 | $ | 3,496 |
Options | Shares | Weighted Average Exercise Price | ||||
Outstanding at December 31, 2012 | 1,115,513 | $ | 10.15 | |||
Granted | 37,500 | 16.16 | ||||
Exercised | (99,645 | ) | 7.54 | |||
Forfeited or Expired | (22,575 | ) | 11.31 | |||
Outstanding at June 30, 2013 | 1,030,793 | $ | 10.58 | |||
Exercisable at June 30, 2013 | 487,628 | $ | 8.58 |
Restricted stock | Shares | Weighted Average Grant Date Fair Value | ||||
Unvested at December 31, 2012 | 96,113 | $ | 12.11 | |||
Granted | 34,016 | 19.08 | ||||
Vested | (26,888 | ) | 11.79 | |||
Forfeited | (900 | ) | 8.50 | |||
Unvested at June 30, 2013 | 102,341 | $ | 14.54 |
Three months ended | Six months ended | ||||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | ||||||||||||
Grant date fair value of awards during the period: | (in thousands) | ||||||||||||||
Options | $ | 121 | $ | 2,437 | $ | 272 | $ | 2,437 | |||||||
Restricted stock | 524 | 296 | 649 | 296 | |||||||||||
Total | $ | 645 | $ | 2,733 | $ | 921 | $ | 2,733 |
Share-based compensation expense: | |||||||||||||||
Options | $ | 182 | $ | 115 | $ | 461 | $ | 209 | |||||||
Restricted stock | 121 | 79 | 234 | 155 | |||||||||||
Total | $ | 303 | $ | 194 | $ | 695 | $ | 364 |
Income tax benefit related to share-based compensation: | |||||||||||||||
Options | $ | 183 | $ | 5 | $ | 292 | $ | 18 | |||||||
Restricted stock | 93 | 15 | 93 | 15 | |||||||||||
Total | $ | 276 | $ | 20 | $ | 385 | $ | 33 |
Three months ended | Six months ended | ||||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | ||||||||||||
(in thousands, except share and per share data) | |||||||||||||||
Numerator: | |||||||||||||||
Net income | $ | 12,119 | $ | 9,297 | $ | 19,259 | $ | 13,864 | |||||||
Denominator: | |||||||||||||||
Basic weighted average shares* | 36,759,718 | 36,828,650 | 36,760,173 | 36,854,913 | |||||||||||
Effect of dilutive stock options and restricted stock* | 390,544 | 262,878 | 296,028 | 270,069 | |||||||||||
Diluted weighted average shares* | 37,150,262 | 37,091,528 | 37,056,201 | 37,124,982 | |||||||||||
Earnings per share: | |||||||||||||||
Basic* | $ | 0.33 | $ | 0.25 | $ | 0.52 | $ | 0.38 | |||||||
Diluted* | $ | 0.33 | $ | 0.25 | $ | 0.52 | $ | 0.37 | |||||||
Anti-dilutive shares: | |||||||||||||||
Shares* | 7,500 | 701,738 | 7,500 | 701,738 | |||||||||||
Weighted average exercise price* | $ | 21.45 | $ | 12.25 | $ | 21.45 | $ | 12.25 |
• | Net sales for the second quarter of 2013 increased by 9.5% to $91.2 million compared to $83.3 million for the same period in 2012. |
• | Income from operations increased by $4.5 million, or 31.4% to $18.6 million from the same quarter a year ago. |
• | We ended the quarter with a cash balance of $19.4 million and no debt on our balance sheet. Working capital was $67.8 million – an improvement of $15.9 million, or 30.6% from the fourth quarter of 2012. |
• | Cash provided by operations was $27.7 million compared to $19.6 million in the second quarter of 2012. Cash used in investing activities was $9.6 million, which is $7.8 million lower than the same period in 2012 primarily as a result of lower capital expenditures. |
• | Net income was up by 30.4% or $2.8 million to $12.1 million in the second quarter of 2013 compared with net income of $9.3 million for the same quarter in 2012. Basic and diluted earnings per share were both $0.33 in the second quarter of 2013 compared to $0.25 for both in 2012. |
Three months ended June 30, | ||||||||||||||||||||
Increase (Decrease) | Percent of sales | |||||||||||||||||||
2013 | 2012 | $ | % | 2013 | 2012 | |||||||||||||||
Net sales | $ | 91,241 | $ | 83,333 | $ | 7,908 | 9.5 | 100.0 | 100.0 | |||||||||||
Cost of sales | 63,565 | 62,230 | 1,335 | 2.1 | 69.7 | 74.7 | ||||||||||||||
Gross profit | 27,676 | 21,103 | 6,573 | 31.1 | 30.3 | 25.3 | ||||||||||||||
Selling, general and administrative expenses | 9,089 | 6,899 | 2,190 | 31.7 | 10.0 | 8.3 | ||||||||||||||
(Gain) loss on disposal of assets | (59 | ) | 10 | (69 | ) | (690.0 | ) | (0.1 | ) | — | ||||||||||
Income from operations | 18,646 | 14,194 | 4,452 | 31.4 | 20.4 | 17.0 | ||||||||||||||
Interest expense | — | (11 | ) | 11 | (100.0 | ) | — | — | ||||||||||||
Interest income | 57 | 2 | 55 | 2,750.0 | 0.1 | — | ||||||||||||||
Other income (expense), net | 253 | (51 | ) | 304 | (596.1 | ) | 0.3 | (0.1 | ) | |||||||||||
Income before taxes | 18,956 | 14,134 | 4,822 | 34.1 | 20.8 | 17.0 | ||||||||||||||
Income tax provision | 6,837 | 4,837 | 2,000 | 41.3 | 7.5 | 5.8 | ||||||||||||||
Net income | $ | 12,119 | $ | 9,297 | $ | 2,822 | 30.4 | 13.3 | 11.2 |
Six months ended June 30, | ||||||||||||||||||
Increase (Decrease) | Percent of sales | |||||||||||||||||
2013 | 2012 | $ | % | 2013 | 2012 | |||||||||||||
Net sales | $ | 158,074 | $ | 148,290 | $ | 9,784 | 6.6 | 100.0 | 100.0 | |||||||||
Cost of sales | 115,086 | 113,669 | 1,417 | 1.2 | 72.8 | 76.7 | ||||||||||||
Gross profit | 42,988 | 34,621 | 8,367 | 24.2 | 27.2 | 23.3 | ||||||||||||
Selling, general and administrative expenses | 16,056 | 12,880 | 3,176 | 24.7 | 10.2 | 8.7 | ||||||||||||
(Gain) loss on disposal of assets | (52 | ) | (13 | ) | (39 | ) | 300.0 | — | — | |||||||||
Income from operations | 26,984 | 21,754 | 5,230 | 24.0 | 17.1 | 14.7 | ||||||||||||
Interest expense | (1 | ) | (27 | ) | 26 | (96.3 | ) | — | — | |||||||||
Interest income | 92 | 15 | 77 | 513.3 | 0.1 | — | ||||||||||||
Other income (expense), net | 237 | (3 | ) | 240 | (8,000.0 | ) | 0.1 | — | ||||||||||
Income before taxes | 27,312 | 21,739 | 5,573 | 25.6 | 17.3 | 14.7 | ||||||||||||
Income tax provision | 8,053 | 7,875 | 178 | 2.3 | 5.1 | 5.3 | ||||||||||||
Net income | $ | 19,259 | $ | 13,864 | $ | 5,395 | 38.9 | 12.2 | 9.3 |
2013 | 2012 | ||||||
(in thousands) | |||||||
Net cash provided by operating activities | $ | 27,740 | $ | 19,576 | |||
Net cash used in investing activities | (9,626 | ) | (17,398 | ) | |||
Net cash (used in) provided by financing activities | (1,858 | ) | 891 |
• | Inventory levels resulted in a use of cash of $1.7 million for the six months ended June 30, 2013 compared to $4.2 million for the same period in 2012 primarily due to increased sales and backlog. |
• | Increased accounts receivable was a use of cash of $6.3 million during the first half of 2013 primarily as a result of increased sales. |
• | Income tax receivable increased cash by $3.9 million during the six months ended June 30, 2013, as the Company had overpayments which can be applied in the current period. |
• | Payables and accrued expenses increased cash by $7.3 million mainly as a result of increased payments due to our representatives, payroll and employee benefits. |
• | The Company hired a new Chief Accounting Officer with requisite technical and financial reporting skills to help address the identified matters. |
• | Management created a better model for analyzing inventory variances. |
• | Management improved the verification process relating to accuracy of reports and data used in critical calculations. |
• | Management designed a process and controls to ensure a more precise review is performed for manual journal entries relating to critical calculations and estimates. |
ISSUER PURCHASES OF EQUITY SECURITIES | |||||||||||||
Period | (a) Total Number of Shares (or Units) Purchased | (b) Average Price Paid Per Share (or Unit) | (c) Total Number of Shares (or Units) Purchased as part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may yet be Purchased under the Plans or Programs | |||||||||
April 2013 | 37,085 | $ | 18.33 | 37,085 | — | ||||||||
May 2013 | 10,690 | 20.76 | 10,690 | — | |||||||||
June 2013 | 45,624 | 21.79 | 45,624 | — | |||||||||
Total | 93,399 | $ | 20.30 | 93,399 | — |
Director | "For" | "Against" | "Abstain" | "Broker Non-Votes" | |
Paul K. Lackey, Jr. | 15,468,924 | 3,674,453 | 7,584 | — | |
A.H. McElroy II | 18,653,266 | 490,111 | 7,584 | — | |
(a) Exhibits | |||
(i) | Exhibit 31.1 | Section 302 Certification of CEO | |
(ii) | Exhibit 31.2 | Section 302 Certification of CFO | |
(iii) | Exhibit 32.1 | Section 1350 Certification of CEO | |
(iv) | Exhibit 32.2 | Section 1350 Certification of CFO |
AAON, INC. | ||
Dated: August 8, 2013 | By: | /s/ Norman H. Asbjornson |
Norman H. Asbjornson President/CEO | ||
Dated: August 8, 2013 | By: | /s/ Scott M. Asbjornson |
Scott M. Asbjornson Chief Financial Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of AAON, Inc. |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal controls over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 8, 2013 | |
/s/ Norman H. Asbjornson | ||
Norman H. Asbjornson | ||
Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of AAON, Inc. |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal controls over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 8, 2013 | |
/s/ Scott M. Asbjornson | ||
Scott M. Asbjornson | ||
Chief Financial Officer |
August 8, 2013 | |
/s/ Norman H. Asbjornson | |
Norman H. Asbjornson | |
Chief Executive Officer |
August 8, 2013 | |
/s/ Scott M. Asbjornson | |
Scott M. Asbjornson | |
Chief Financial Officer |
Share-Based Compensation
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation As discussed in Note 13, the Company had a three-for-two stock split effective July 2, 2013. All share information herein has been updated to reflect the effect of this stock split. We have historically maintained a stock option plan for key employees, directors and consultants (“the 1992 Plan”). The 1992 Plan provided for 9.9 million shares to be issued under the plan in the form of stock options. Under the terms of the plan, the exercise price of shares granted may not be less than 85% of the fair market value at the date of the grant. Options granted to directors prior to May 25, 2004, vest one year from the date of grant and are exercisable for nine years thereafter. Options granted to directors on or after May 25, 2004, vest one-third each year, commencing one year after the date of grant. All other options granted vest at a rate of 20% per year, commencing one year after date of grant, and are exercisable during years 2-10. On May 22, 2007, our stockholders adopted a Long-Term Incentive Plan (“LTIP”) which provides an additional 1,687,500 shares that can be granted in the form of stock options, stock appreciation rights, restricted stock awards, performance units and performance awards. Since inception of the plan, non-qualified stock options and restricted stock awards have been granted with the same vesting schedule as the previous plan. Under the LTIP, the exercise price of shares granted may not be less than 100% of the fair market value at the date of the grant. The total pre-tax compensation cost related to unvested stock options not yet recognized as of June 30, 2013 is $2.2 million and is expected to be recognized over a weighted-average period of 2.4 years. The following weighted average assumptions were used to determine the fair value of the stock options granted on the original grant date for expense recognition purposes for options granted during the six months ended June 30, 2013 and 2012 using a Black Scholes Model:
The expected term of the options is based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date. Volatility is based on historical volatility of our stock over time periods equal to the expected life at grant date. The following is a summary of stock options vested and exercisable as of June 30, 2013:
The following is a summary of stock options vested and exercisable as of June 30, 2012:
A summary of option activity under the plans is as follows:
The total intrinsic value of options exercised during the six months ended June 30, 2013 and 2012 was $1.1 million and $0.1 million, respectively. The cash received from options exercised during the six months ended June 30, 2013 and 2012 was $0.8 million and $0.1 million, respectively. The impact of these cash receipts is included in financing activities in the accompanying Consolidated Statements of Cash Flows. During 2007, the Compensation Committee of the Board of Directors authorized and issued restricted stock awards to directors and key employees. The restricted stock award program offers the opportunity to earn shares of AAON Common Stock over time, rather than options that give the right to purchase stock at a set price. Restricted stock awards granted to directors vest one-third each year. All other restricted stock awards vest at a rate of 20% per year. Restricted stock awards are grants that entitle the holder to shares of common stock subject to certain terms. The fair value of restricted stock awards is based on the fair market value of AAON common stock on the respective grant dates, reduced for the present value of dividends. These awards are recorded at their fair value on the date of grant and compensation cost is recorded using straight-line vesting over the service period. At June 30, 2013, unrecognized compensation cost related to unvested restricted stock awards was approximately $1.2 million, which is expected to be recognized over a weighted average period of 2.2 years. A summary of the unvested restricted stock awards is as follows:
A summary of share-based compensation is as follows:
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Consolidated Statements of Income (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||||||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Income Statement [Abstract] | ||||||||||
Net sales | $ 91,241 | $ 83,333 | $ 158,074 | $ 148,290 | ||||||
Cost of sales | 63,565 | 62,230 | 115,086 | 113,669 | ||||||
Gross profit | 27,676 | 21,103 | 42,988 | 34,621 | ||||||
Selling, general and administrative expenses | 9,089 | 6,899 | 16,056 | 12,880 | ||||||
Loss (gain) on disposal of assets | (59) | 10 | (52) | (13) | ||||||
Income from operations | 18,646 | 14,194 | 26,984 | 21,754 | ||||||
Interest expense | 0 | (11) | (1) | (27) | ||||||
Interest income | 57 | 2 | 92 | 15 | ||||||
Other income (expense), net | 253 | (51) | 237 | (3) | ||||||
Income before taxes | 18,956 | 14,134 | 27,312 | 21,739 | ||||||
Income tax provision | 6,837 | 4,837 | 8,053 | 7,875 | ||||||
Net income | $ 12,119 | $ 9,297 | $ 19,259 | $ 13,864 | ||||||
Earnings per share: | ||||||||||
Basic | $ 0.33 | [1] | $ 0.25 | [1] | $ 0.52 | [1] | $ 0.38 | [1] | ||
Diluted | $ 0.33 | [1] | $ 0.25 | [1] | $ 0.52 | [1] | $ 0.37 | [1] | ||
Cash dividends declared per common share | $ 0.10 | [1] | $ 0.08 | [1] | $ 0.10 | [1] | $ 0.08 | [1] | ||
Weighted average shares outstanding: | ||||||||||
Basic | 36,759,718 | [1] | 36,828,650 | [1] | 36,760,173 | [1] | 36,854,913 | [1] | ||
Diluted | 37,150,262 | [1] | 37,091,528 | [1] | 37,056,201 | [1] | 37,124,982 | [1] | ||
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Accounts Receivable
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable | Accounts Receivable Accounts receivable and the related allowance for doubtful accounts are as follows:
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Inventories (Tables)
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Jun. 30, 2013
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories |
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Inventories (Allowance) | The related changes in the allowance for excess and obsolete inventories account are as follows:
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Earnings Per Share
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Jun. 30, 2013
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Basic net income per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share assumes the conversion of all potentially dilutive securities and is calculated by dividing net income by the sum of the weighted average number of shares of common stock outstanding plus all potentially dilutive securities. Dilutive common shares consist primarily of stock options and restricted stock awards.
*Reflects three-for-two stock split effective July 2, 2013 |
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