TULSA, Okla., Feb. 25, 2021 (GLOBE NEWSWIRE) -- AAON, INC. (NASDAQ-AAON), today announced its results for the fourth quarter of 2020.
| Financial Highlights: | Three Months Ended December 31, | % | Years Ending December 31, | % | |||||||||||||||||
| 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||
| (in thousands, except share and per share data) | (in thousands, except share and per share data) | ||||||||||||||||||||
| Net sales | $ | 116,700 | $ | 122,574 | (4.8 | )% | $ | 514,551 | $ | 469,333 | 9.6 | % | |||||||||
| Gross profit | 33,923 | 36,381 | (6.8 | )% | 155,849 | 119,425 | 30.5 | % | |||||||||||||
| Gross profit % | 29.1 | % | 29.7 | % | 30.3 | % | 25.4 | % | |||||||||||||
| Selling, general and admin. expenses | $ | 14,622 | $ | 13,114 | 11.5 | % | $ | 60,491 | $ | 52,077 | 16.2 | % | |||||||||
| SG&A % | 12.5 | % | 10.7 | % | 11.8 | % | 11.1 | % | |||||||||||||
| Net income* | 18,892 | 17,273 | 9.4 | % | 79,009 | 53,711 | 47.1 | % | |||||||||||||
| Net income % | 16.2 | % | 14.1 | % | 15.4 | % | 11.4 | % | |||||||||||||
| Effective Tax Rate | 26.6 | % | 25.6 | % | 22.5 | % | 19.9 | % | |||||||||||||
| Earnings per diluted share* | $ | 0.35 | $ | 0.33 | 6.1 | % | $ | 1.49 | $ | 1.02 | 46.1 | % | |||||||||
| Diluted average shares | 53,469,759 | 52,701,202 | 1.5 | % | 53,061,169 | 52,635,415 | 0.8 | % | |||||||||||||
| *Includes $4.1 million or $0.08 per share related to a gain from insurance proceeds | |||||||||||||||||||||
| December 31, | December 31, | % | |||||||||||||||||||
| 2020 | 2019 | Change | |||||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Backlog | $ | 74,417 | $ | 142,747 | (47.9 | )% | |||||||||||||||
| Cash & cash equivalents & restricted cash | 82,288 | 44,373 | 85.4 | % | |||||||||||||||||
| Total current liabilities | 59,033 | 56,028 | 5.4 | % | |||||||||||||||||
Net sales for the fourth quarter 2020 decreased to $116.7 million from $122.6 million in 2019 primarily as a result of this year's six additional days of planned plant holiday closure at the end of December 2020. The Company reported diluted EPS of $0.35, up 6.1% from $0.33 in the prior year period. The Company had a gain of $4.1 million, net of profit sharing and taxes, associated with insurance proceeds related to a damaged roof incurred by adverse weather earlier in the year, which impacted our diluted EPS by $0.08.
The Company finished the quarter with a backlog of $74.4 million. The decline in backlog was related to initiatives made to improve productivity and lead times to meet customer delivery expectations. New bookings in the quarter increased 6% compared to the same period one year ago. As of February 1, 2021, our backlog was approximately $103.8 million, compared to $129.2 million at February 1, 2020.
For the twelve months ending December 31, 2020, sales were a record $514.6 million, an increase of 9.6% compared with $469.3 million in 2019. Diluted earnings per share increased 46.1% to $1.49.
Gary Fields, President and CEO, said, "We are pleased to report all-time record sales and earnings in 2020 compared to any other year in our Company's history. I am especially proud we achieved these results in a year that presented many challenges to the Company and our end-markets. Achieving organic sales growth of nearly 10% while simultaneously improving our gross margins by 490 basis points to 30.3% is truly an achievement. At the same time, we continued to invest in growth as our capex spend for the year was up 82.4%, amounting to 13.2% of sales."
Mr. Fields continued, "Our fourth quarter results demonstrate demand slowed as we finished the year. The outlook for 2021 continues to present uncertainty, especially for the first half of the year. Architectural billings and nonresidential construction starts in 2020 suggest new construction demand will be soft, particularly in end-markets significantly impacted by the COVID-19 pandemic such as the hospitality and office building markets."
Mr. Fields added, "However, new bookings in the fourth quarter still grew year-over-year 6% and demand so far in 2021 has been surprisingly solid. Furthermore, we are starting to see positive signs in our replacement business and certain end-markets like data centers, warehouses and healthcare. We are also well positioned to take advantage of our customers' increased focus on indoor air quality to address COVID challenges, which we expect will drive incremental demand. Finally, ongoing progress in our transition from entrepreneurial leadership to a collaborative team-based management approach, a strengthening sales channel, improved productivity and lead times, new capacity at our Longview, Texas facility and a strong product development pipeline keeps us optimistic on the outlook of our business. While we believe demand will be soft to start the year, we think activity should be moderate in the first half and then accelerate in the second half."
The Company finished 2020 in a strong financial position as evidenced by a current ratio of 3.7:1 at December 31, 2020. We had no debt and unrestricted cash and cash equivalents of $79.0 million as of December 31, 2020. Our capital expenditures during the twelve months ended December 31, 2020 were $67.8 million, as compared to $37.2 million for the same period a year ago, and we 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 fourth quarter 2020 results. To participate, call 1-833-674-0554 (code 3448509); or, for rebroadcast available through March 5, 2021, call 1-855-859-2056 (code 3448509).
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.
Forward-Looking StatementsCertain 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 InformationJoseph MondilloDirector of Investor RelationsPhone: (617) 877-6346Email: [email protected]
| AAON, Inc. and Subsidiaries | |||||||||||||||
| Consolidated Statements of Income | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended December 31, | Years Ending December 31, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||
| Net sales | $ | 116,700 | $ | 122,574 | $ | 514,551 | $ | 469,333 | |||||||
| Cost of sales | 82,777 | 86,193 | 358,702 | 349,908 | |||||||||||
| Gross profit | 33,923 | 36,381 | 155,849 | 119,425 | |||||||||||
| Selling, general and administrative expenses | 14,622 | 13,114 | 60,491 | 52,077 | |||||||||||
| (Gain) loss on disposal of assets and insurance recoveries | (6,417 | ) | 41 | (6,478 | ) | 337 | |||||||||
| Income from operations | 25,718 | 23,226 | 101,836 | 67,011 | |||||||||||
| Interest income, net | (2 | ) | 17 | 88 | 66 | ||||||||||
| Other income (expense), net | 31 | (30 | ) | 51 | (46 | ) | |||||||||
| Income before taxes | 25,747 | 23,213 | 101,975 | 67,031 | |||||||||||
| Income tax provision | 6,855 | 5,940 | 22,966 | 13,320 | |||||||||||
| Net income | $ | 18,892 | $ | 17,273 | $ | 79,009 | $ | 53,711 | |||||||
| Earnings per share: | |||||||||||||||
| Basic | $ | 0.36 | $ | 0.33 | $ | 1.51 | $ | 1.03 | |||||||
| Diluted | $ | 0.35 | $ | 0.33 | $ | 1.49 | $ | 1.02 | |||||||
| Cash dividends declared per common share: | $ | 0.19 | $ | 0.16 | $ | 0.38 | $ | 0.32 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 52,240,829 | 52,094,125 | 52,168,679 | 52,079,865 | |||||||||||
| Diluted | 53,469,759 | 52,701,202 | 53,061,169 | 52,635,415 | |||||||||||
| AAON, Inc. and Subsidiaries | |||||||
| Consolidated Balance Sheets | |||||||
| (Unaudited) | |||||||
| December 31, 2020 | December 31, 2019 | ||||||
| Assets | (in thousands, except share and per share data) | ||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 79,025 | $ | 26,797 | |||
| Restricted cash | 3,263 | 17,576 | |||||
| Accounts receivable, net of allowance for credit losses of $506 and $353, respectively | 47,387 | 67,399 | |||||
| Income tax receivable | 4,587 | 772 | |||||
| Note receivable | 31 | 29 | |||||
| Inventories, net | 82,219 | 73,601 | |||||
| Prepaid expenses and other | 3,739 | 1,375 | |||||
| Total current assets | 220,251 | 187,549 | |||||
| Property, plant and equipment: | |||||||
| Land | 4,072 | 3,274 | |||||
| Buildings | 122,171 | 101,113 | |||||
| Machinery and equipment | 281,266 | 236,087 | |||||
| Furniture and fixtures | 18,956 | 16,862 | |||||
| Total property, plant and equipment | 426,465 | 357,336 | |||||
| Less: Accumulated depreciation | 203,125 | 179,242 | |||||
| Property, plant and equipment, net | 223,340 | 178,094 | |||||
| Intangible assets, net | 38 | 272 | |||||
| Goodwill | 3,229 | 3,229 | |||||
| Right of use assets | 1,571 | 1,683 | |||||
| Note receivable | 579 | 597 | |||||
| Total assets | $ | 449,008 | $ | 371,424 | |||
| Liabilities and Stockholders' Equity | |||||||
| Current liabilities: | |||||||
| Revolving credit facility | $ | — | $ | — | |||
| Accounts payable | 12,447 | 11,759 | |||||
| Accrued liabilities | 46,586 | 44,269 | |||||
| Total current liabilities | 59,033 | 56,028 | |||||
| Deferred tax liabilities | 28,324 | 15,297 | |||||
| Other long-term liabilities | 4,423 | 3,639 | |||||
| New market tax credit obligation | 6,363 | 6,320 | |||||
| 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, 52,224,767 and 52,078,515 issued and outstanding at December 31, 2020 and December 31, 2019, respectively | 209 | 208 | |||||
| Additional paid-in capital | 5,161 | 3,631 | |||||
| Retained earnings | 345,495 | 286,301 | |||||
| Total stockholders' equity | 350,865 | 290,140 | |||||
| Total liabilities and stockholders' equity | $ | 449,008 | $ | 371,424 | |||
| AAON, Inc. and Subsidiaries | |||||||
| Consolidated Statements of Cash Flows | |||||||
| (Unaudited) | |||||||
| Years Ending December 31, | |||||||
| 2020 | 2019 | ||||||
| Operating Activities | (in thousands) | ||||||
| Net income | $ | 79,009 | $ | 53,711 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 25,634 | 22,766 | |||||
| Amortization of debt issuance cost | 43 | 7 | |||||
| Provision for credit losses on accounts receivable, net of adjustments | 153 | 91 | |||||
| Provision for excess and obsolete inventories | 1,108 | 1,454 | |||||
| Share-based compensation | 11,342 | 11,799 | |||||
| (Gain) loss on disposition of assets | (6,478 | ) | 337 | ||||
| Foreign currency transaction (gain) loss | (12 | ) | (27 | ) | |||
| Interest income on note receivable | (24 | ) | (25 | ) | |||
| Deferred income taxes | 13,027 | 6,038 | |||||
| Changes in assets and liabilities: | |||||||
| Accounts receivable | 19,859 | (13,412 | ) | ||||
| Income taxes | (3,815 | ) | 5,129 | ||||
| Inventories | (9,726 | ) | 2,557 | ||||
| Prepaid expenses and other | (2,364 | ) | (329 | ) | |||
| Accounts payable | (2,155 | ) | 280 | ||||
| Deferred revenue | 1,010 | 425 | |||||
| Accrued liabilities | 2,203 | 7,124 | |||||
| Net cash provided by operating activities | 128,814 | 97,925 | |||||
| Investing Activities | |||||||
| Capital expenditures | (67,802 | ) | (37,166 | ) | |||
| Proceeds from sale of property, plant and equipment | 60 | 69 | |||||
| Insurance proceeds | 6,417 | — | |||||
| Investment in certificates of deposits | — | (6,000 | ) | ||||
| Maturities of certificates of deposits | — | 6,000 | |||||
| Principal payments from note receivable | 52 | 51 | |||||
| Net cash used in investing activities | (61,273 | ) | (37,046 | ) | |||
| Financing Activities | |||||||
| Proceeds from financing obligation, net of issuance costs | — | 6,614 | |||||
| Payment related to financing costs | — | (301 | ) | ||||
| Stock options exercised | 21,418 | 12,625 | |||||
| Repurchase of stock | (30,060 | ) | (19,586 | ) | |||
| Employee taxes paid by withholding shares | (1,169 | ) | (1,207 | ) | |||
| Dividends paid to stockholders | (19,815 | ) | (16,645 | ) | |||
| Net cash used in financing activities | (29,626 | ) | (18,500 | ) | |||
| Net increase in cash, cash equivalents and restricted cash | 37,915 | 42,379 | |||||
| Cash, cash equivalents and restricted cash, beginning of period | 44,373 | 1,994 | |||||
| Cash, cash equivalents and restricted cash, end of period | $ | 82,288 | $ | 44,373 | |||
