aaon-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________________ to ____________________

Commission file number: 0-18953

AAON, INC.

(Exact name of registrant as specified in its charter)

Nevada

87-0448736

(State or other jurisdiction

(IRS Employer

of incorporation or organization)

Identification No.)

2425 South Yukon Ave.,

Tulsa,

Oklahoma

74107

(Address of principal executive offices) (Zip Code)

(918) 583-2266

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of "large accelerated filer", "accelerated filer", "small reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	AAON	NASDAQ

As of May 3, 2021, registrant had outstanding a total of 52,435,167 shares of its $.004 par value Common Stock.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.


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 cash	725		3,263


Accounts receivable, net of allowance for credit losses of $493 and $506, respectively	52,579		47,387
Income tax receivable	7,353		4,587
Note receivable	32		31
Inventories, net	84,040		82,219
Prepaid expenses and other	3,631		3,739

Total current assets	245,407		220,251
Property, plant and equipment:
Land	4,109		4,072
Buildings	126,090		122,171
Machinery and equipment	292,961		281,266
Furniture and fixtures	19,971		18,956
Total property, plant and equipment	443,131		426,465
Less: Accumulated depreciation	210,483		203,125
Property, plant and equipment, net	232,648		223,340


Goodwill and intangible assets, net	3,229		3,267

Right of use assets	1,522		1,571
Note receivable	578		579
Total assets	$	483,384	$	449,008

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	17,615	$	12,447

Accrued liabilities	49,064		46,586
Total current liabilities	66,679		59,033
Deferred tax liabilities	32,982		28,324
Other long-term liabilities	4,312		4,423
New market tax credit obligation (a)	6,373		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, respectively	210		209
Additional paid-in capital	10,957		5,161
Retained earnings	361,871		345,495
Total stockholders' equity	373,038		350,865
Total liabilities and stockholders' equity	$	483,384	$	449,008
(a) Held by variable interest entities (Note 14)

The accompanying notes are an integral part of these consolidated financial statements.

- 1 -


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

The accompanying notes are an integral part of these consolidated financial statements.

- 2 -


AAON, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
(Unaudited)

	Three Months Ended March 31, 2021
	Common Stock			Paid-in		Retained
	Shares	Amount		Capital		Earnings		Total
	(in thousands)
Balances at December 31, 2020	52,225	$	209	$	5,161	$	345,495	$	350,865
Net income	—	—		—		16,376		16,376
Stock options exercised and restricted	286	2		9,436		—		9,438
stock awards granted
Share-based compensation	—	—		2,761		—		2,761
Stock repurchased and retired	(87)	(1)		(6,401)		—		(6,402)

Balances at March 31, 2021	52,424	$	210	$	10,957	$	361,871	$	373,038
















	Three Months Ended March 31, 2020
	Common Stock			Paid-in		Retained
	Shares	Amount		Capital		Earnings		Total
	(in thousands)
Balances at December 31, 2019	52,079	$	208	$	3,631	$	286,301	290,140
Net income	—	—		—		21,853		21,853
Stock options exercised and restricted	212	1		4,496		—		4,497
stock awards granted
Share-based compensation	—	—		2,351		—		2,351
Stock repurchased and retired	(247)	(1)		(10,478)		(2,039)		(12,518)

Balances at March 31, 2020	52,044	$	208	$	—	$	306,115	$	306,323

The accompanying notes are an integral part of these consolidated financial statements.

- 3 -


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 amortization	7,398		6,002
Amortization of debt issuance cost	10		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 compensation	2,761		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 taxes	4,658		(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 other	108		(670)
Accounts payable	4,904		2,742
Deferred revenue	2,358		229
Accrued liabilities	58		6,241
Net cash provided by operating activities	28,838		37,597
Investing Activities
Capital expenditures	(16,404)		(21,877)

Proceeds from sale of property, plant and equipment	—		61





Principal payments from note receivable	14		12
Net cash used in investing activities	(16,390)		(21,804)
Financing Activities


Stock options exercised	9,438		4,497
Repurchase of stock	(5,185)		(11,565)
Employee taxes paid by withholding shares	(1,217)		(

SEC Form 10-Q filed by AAON, Inc.