AAON Inc. (AAON, Financial) filed Quarterly Report for the period ended 2010-09-30.
Aaon Inc. has a market cap of $412.86 million; its shares were traded at around $24.94 with a P/E ratio of 17.2 and P/S ratio of 1.68. The dividend yield of Aaon Inc. stocks is 1.44%. Aaon Inc. had an annual average earning growth of 10.7% over the past 10 years.AAON is in the portfolios of Chuck Royce of Royce& Associates.
Gross profit decreased $5.2 million or 29% to $12.5 million from $17.7 million for the three months ended and decreased $11.8 million or 22% to $41.0 million from $52.8 million for the nine months ended September 30, 2010 and 2009, respectively. As a percentage of sales, gross margins were 19.3% compared to 30.3% for the three months ended and 22.9% compared to 27.6% for the nine months ended September 30, 2010 and 2009, respectively. Our gross margin percentages decreased from the same periods in 2009 primarily due to higher raw material costs, increased labor and our inability in the current economic environment to implement price increases to our minimum sales prices for HVAC units.
SG&A expenses decreased $0.1 million or 2% to $5.2 million from $5.3 million for the three months ended and decreased $2.0 million or 11% to $16.6 million from $18.6 million for the nine months ended September 30, 2010 and 2009, respectively. The decrease for the nine months was primarily due to lower bad debt expense, a decrease in warranty expense, a decrease in sales related expenses and a decrease in profit sharing expense due to lower net income.
Other expense decreased $0.1 million to $0.1 million from $0.2 million for the three months ended and increased $0.2 million to $0.2 million for the nine months ended September 30, 2010 and 2009, respectively. The increase in other expense was primarily related to termination of the lease on our expansion facility.
We had a $4.0 million outstanding balance under the revolving credit facility at September 30, 2010. We did not have an outstanding balance under the revolving credit facility at December 31, 2009. Borrowings available under the revolving credit facility at September 30, 2010 were $10.3 million. At September 30, 2010, we were in compliance with our financial ratio covenants. The covenants are related to our tangible net worth, total liabilities to tangible net worth ratio and working capital. At September 30, 2010 our tangible net worth was $114.7 million which meets the requirement of being at or above $75.0 million. Our total liabilities to tangible net worth ratio was 1 to 2 which meets the requirement of not being above 2 to 1. Our working capital was $55.0 million which meets the requirement of being at or above $30.0 million. On July 30, 2010, we renewed the line of credit with a maturity date of July 30, 2011, with terms substantially the same as the previous agreement.
Cash flows used in investing activities were $26.0 million and $8.6 million for the nine months ended September 30, 2010 and 2009, respectively. The increase in cash flows used in investing activities in 2010 was related to investments of $1.9 million of current assets in certificates of deposit and $11.5 million ($10.9 million of current assets) in corporate notes and bonds. We did not invest in any certificates of deposit or other investments in 2009. Capital expenditures increased to $13.1 million from $8.6 million for the nine months ended September 30, 2010 and 2009. Management utilizes cash flows provided from operating activities to fund capital expenditures that are expected to increase growth and create efficiencies. We have budgeted capital expenditures of approximately $16.0 million to $17.0 million in 2010 to set up manufacturing lines for the Tulsa building addition which was completed in the fourth quarter of 2009. We expect our cash requirements to be provided by cash flows from operations.
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Aaon Inc. has a market cap of $412.86 million; its shares were traded at around $24.94 with a P/E ratio of 17.2 and P/S ratio of 1.68. The dividend yield of Aaon Inc. stocks is 1.44%. Aaon Inc. had an annual average earning growth of 10.7% over the past 10 years.AAON is in the portfolios of Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Net sales increased $6.4 million or 11% to $64.9 million from $58.5 million for the three months ended and decreased $12.4 million or 6% to $178.7 million from $191.1 million for the nine months ended September 30, 2010 and 2009, respectively. The increase in net sales for the three months was a result of gaining additional market share and the decrease in net sales for the nine months in 2010 compared to 2009 was a result of the decreased volume related to the economic environment. The economic environment has negatively impacted commercial construction markets with some projects delayed, postponed indefinitely or cancelled. The replacement market has also been affected by customers delaying equipment replacement as a cost saving strategy.Gross profit decreased $5.2 million or 29% to $12.5 million from $17.7 million for the three months ended and decreased $11.8 million or 22% to $41.0 million from $52.8 million for the nine months ended September 30, 2010 and 2009, respectively. As a percentage of sales, gross margins were 19.3% compared to 30.3% for the three months ended and 22.9% compared to 27.6% for the nine months ended September 30, 2010 and 2009, respectively. Our gross margin percentages decreased from the same periods in 2009 primarily due to higher raw material costs, increased labor and our inability in the current economic environment to implement price increases to our minimum sales prices for HVAC units.
SG&A expenses decreased $0.1 million or 2% to $5.2 million from $5.3 million for the three months ended and decreased $2.0 million or 11% to $16.6 million from $18.6 million for the nine months ended September 30, 2010 and 2009, respectively. The decrease for the nine months was primarily due to lower bad debt expense, a decrease in warranty expense, a decrease in sales related expenses and a decrease in profit sharing expense due to lower net income.
Other expense decreased $0.1 million to $0.1 million from $0.2 million for the three months ended and increased $0.2 million to $0.2 million for the nine months ended September 30, 2010 and 2009, respectively. The increase in other expense was primarily related to termination of the lease on our expansion facility.
We had a $4.0 million outstanding balance under the revolving credit facility at September 30, 2010. We did not have an outstanding balance under the revolving credit facility at December 31, 2009. Borrowings available under the revolving credit facility at September 30, 2010 were $10.3 million. At September 30, 2010, we were in compliance with our financial ratio covenants. The covenants are related to our tangible net worth, total liabilities to tangible net worth ratio and working capital. At September 30, 2010 our tangible net worth was $114.7 million which meets the requirement of being at or above $75.0 million. Our total liabilities to tangible net worth ratio was 1 to 2 which meets the requirement of not being above 2 to 1. Our working capital was $55.0 million which meets the requirement of being at or above $30.0 million. On July 30, 2010, we renewed the line of credit with a maturity date of July 30, 2011, with terms substantially the same as the previous agreement.
Cash flows used in investing activities were $26.0 million and $8.6 million for the nine months ended September 30, 2010 and 2009, respectively. The increase in cash flows used in investing activities in 2010 was related to investments of $1.9 million of current assets in certificates of deposit and $11.5 million ($10.9 million of current assets) in corporate notes and bonds. We did not invest in any certificates of deposit or other investments in 2009. Capital expenditures increased to $13.1 million from $8.6 million for the nine months ended September 30, 2010 and 2009. Management utilizes cash flows provided from operating activities to fund capital expenditures that are expected to increase growth and create efficiencies. We have budgeted capital expenditures of approximately $16.0 million to $17.0 million in 2010 to set up manufacturing lines for the Tulsa building addition which was completed in the fourth quarter of 2009. We expect our cash requirements to be provided by cash flows from operations.
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