FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2003 Commission file number: 33-183336-LA AAON, INC. ---------- (Exact name of registrant as specified in its charter) Nevada 87-0448736 - ---------------------------- ---------- (State or other jurisdiction (IRS Employer of incorporation) Identification No.) 2425 South Yukon, 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 |X| No ------------- ---------- Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes |X| No ------------- ---------- As of March 31, 2003, Registrant had outstanding a total of 12,791,383 shares of its $.004 par value Common Stock.
PART I - FINANCIAL INFORMATION Item 1. Financial Statements. On pages 6 through 11 of this report. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. The Company engineers, manufactures and markets commercial rooftop air-conditioning, heating and heat recovery equipment, chillers, air-conditioning coils, air handlers and condensing units. The Company's primary products are its RK, RL, RM and RN Series units. The highly energy efficient RM and RN units, which were introduced in 2002, are replacing the RK. AAON has also introduced an expanded air handler product and a Modulating Hot Gas Reheat feature for the rooftop product lines, condensing units and air handlers. The new feature addresses humidity, mold and indoor air quality problems that plague many environments due to excessive moisture. AAON sells its products to property owners and contractors through a network of manufacturers' representatives and its internal sales force. Demand for AAON's products is influenced by national and regional economic and demographic factors. The commercial and industrial new construction market is subject to cyclical fluctuations in that it is generally tied to housing starts, but has a lag factor of 6-18 months. Housing starts, in turn, are affected by such factors as interest rates, the state of the economy, population growth and the relative age of the population. When new construction is down, the Company emphasizes the replacement market. The principal components of cost of goods sold are labor, raw materials, component costs, factory overhead, freight out and engineering expense. The principal raw materials used in AAON's manufacturing processes are steel, copper and aluminum. The major component costs include compressors, electric motors and electronic controls. Selling, general and administrative costs include the Company's internal sales force, warranty costs, profit sharing and administrative expense. Warranty expense is estimated based on historical trends and other factors. The warranty period is: for parts only, the earlier of one year from the date of first use or 15 months from date of shipment; compressors (if applicable), an additional four years; on gas-fired heat exchangers (if applicable), 15 years; and on stainless steel heat exchangers (if applicable), 25-year warranty. The plant and office facilities of AAON, Inc. consists of a 337,000 square foot building (322,000 sq. ft. of manufacturing/warehouse space and 15,000 sq. ft. of office space) located at 2425 S. Yukon Avenue, Tulsa, Oklahoma (the "original facility"), and a 457,000 square foot manufacturing/warehouse building and a 22,000 square foot office building (the "expansion facility") that is located across the street from the original facility. The Company utilizes 25% of the expansion space and the remaining 75% is leased to third parties. The operations of AAON Coil Products are conducted in a plant/office building at 203-207 Gum Springs Road in Longview, Texas, containing 226,000 square feet (219,000 sq. ft. of manufacturing/warehouse and 7,000 sq. ft. of office space). -1-
Set forth below is income statement information with respect to the Company for the three-months ended March 31, 2003, and 2002: <TABLE> AAON, Inc. Consolidated Statements of Operations <CAPTION> Three Months Ended March 31, 2003* March 31, 2002* ----------------- ----------------- (in thousands) <S> <C> <C> Net sales $ 32,856 $ 35,990 Cost of Sales 24,159 26,373 ----------------- ----------------- Gross profit 8,697 9,617 Selling, general and administrative expenses 3,196 3,936 ----------------- ----------------- Income from operations 5,501 5,681 Interest expense 6 28 Interest income (58) (25) Other (income) expense (84) (63) ----------------- ----------------- Income before income taxes 5,637 5,741 Income tax provision 2,142 2,094 ----------------- ----------------- Net Income $ 3,495 $ 3,647 ================= ================= *Unaudited </TABLE> Results of Operations. Net sales decreased $3,134,000 (8.7%) to $32,856,000 from $35,990,000 for the three months ended March 31, 2003, compared to the same period in 2002. The decrease in sales was due to a slowdown in the construction market caused by a downturn in the economy and the continued uncertainty about future economic conditions. Sales to existing customers in the three months ended March 31, 2003 continued to account for 85% of the Company's business, with the balance coming from new business. Gross profit for the three months ended March 31, 2003 was 26.47% compared to 26.72% for the same period in 2002. The decrease in margins was primarily attributable to lower sales volume of higher margin orders and higher sales volume of lower margin orders. Selling, general and administrative expenses decreased by $740,000 (18.8%) to $3,196,000 from $3,936,000 for the three months ended March 31, 2003 compared to the same period in 2002. The decrease was primarily due to a decrease in warranty expense related to improved product quality. Interest expense decreased $22,000 for the three months ended March 31, 2003, compared to the same period in 2002, due to the retirement of all long-term debt in 2002 and lower average borrowings under the revolving credit facility. Interest income increased $33,000 for the three months ended March 31, 2003, compared to the same period in 2002 due to investments in short-term money markets and a certificate of deposit. -2-
The Company's effective tax rate increased 1% to 38% from 37% in 2003 compared to 2002. Financial Condition and Liquidity. Accounts receivable decreased $2.3 million at March 31, 2003, compared to December 31, 2002, due to improved collection results and a decrease in sales. Inventories increased $1.2 million at March 31, 2003, compared to December 31, 2002, due to the procurement of additional inventory required for the manufacturing of new products and to the rescheduling of some ship dates of equipment by the customer that increased finished goods in the first quarter of this year compared to 2002. Property, plant and equipment increased $1.3 million at March 31, 2003, compared to December 31, 2002, reflecting primarily additions to machinery and equipment and building renovations. All capital expenditures and building renovations were financed out of cash generated from operations. Accrued liabilities increased $3.1 million at March 31, 2003, compared to December 31, 2002, due primarily to timing of payments to vendors. Management believes the Company's bank revolving credit facility (or comparable financing) and projected cash flows from operations will provide the necessary liquidity and capital resources to the Company for the foreseeable future. The Company's belief that it will have the necessary liquidity and capital resources is based upon its knowledge of the HVAC industry and its place in that industry, its ability to limit the growth of its business if necessary, and its relationship with its existing bank lender. For information concerning the Company's revolving credit facility at March 31, 2003, see Note 6 to the financial statements included in this report. Critical Accounting Policies. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because these estimates and assumptions require significant judgment, future actual results could differ from those estimates and could have a significant impact on the Company's results of operations, financial position and cash flows. The Company re-evaluates its estimates and assumptions on a monthly basis. The following accounting policies may involve a higher degree of estimation or assumption: Allowance for Doubtful Accounts - The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends in collections and write-offs, current customer status, the age of the receivable, economic conditions and other information. Aged receivables are reviewed on a monthly basis to determine if the reserve is adequate. Allowance for Excess and Obsolete Inventories - The Company establishes an allowance for excess and obsolete inventories based on the change in inventory requirements due to product line changes, the feasibility of using obsolete parts for upgraded part substitutions, the required parts needed for part supply sales and replacement parts. -3-
Warranty - A provision is made for the estimated cost of warranty obligation at the time the product is shipped and revenue is recognized. The warranty period is: for parts only, the earlier of one year from the date of first use or 15 months from date of shipment; compressors (if applicable), an additional four years; on gas-fired heat exchangers (if applicable), 15 years; and on stainless steel heat exchangers (if applicable), 25 years. Warranty expense is estimated based on the Company's warranty period, historical warranty trends and associated costs, and any known identifiable warranty issue. Due to the absence of warranty history on new products, an additional provision may be made for such products. Forward-Looking Statements This report includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "anticipates," "intends," "believes," "seeks," "estimates," "will," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Important factors that could cause actual results to differ materially from those in the forward-looking statements include (1) the timing and extent of changes in material prices, (2) the effects of fluctuations in the commercial/industrial new construction market, (3) the timing and extent of changes in interest rates, as well as other competitive factors during the year, and (4) general economic, market or business conditions. Item 3. Quantitative and Qualitative Disclosures About Market Risk. While the Company is exposed to changes in interest rates, a hypothetical 10% change in interest rates on its variable rate borrowings would not have a material effect on the Company's earnings or cash flow. Foreign sales account for less than 2% of the Company's total sales and the Company accepts payment for such sales only in U.S. dollars; hence the Company is not exposed to foreign currency exchange rate risk. Important raw materials purchased by the Company are steel, copper and aluminum, which are subject to price fluctuations. The Company attempts to limit the impact of price increases on these materials by negotiating with each of its major suppliers on a term basis from six months to one year. Item 4. Controls and Procedures. Evaluation of Disclosure Controls and Procedures Within the 90-day period prior to the filing date of this Quarterly Report on Form 10-Q, the Company's management, under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Company's Chief Executive Officer and Chief Financial Officer believe that: -4-
o the Company's disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms; and o the Company's disclosure controls and procedures operate such that important information flows to appropriate collection and disclosure points in a timely manner and are effective to ensure that such information is accumulated and communicated to the Company's management, and made known to the Company's Chief Executive Officer and Chief Financial Officer, particularly during the period when this Quarterly Report was prepared, as appropriate to allow timely decisions regarding the required disclosure. Changes in internal controls There have been no significant changes in the Company's internal controls or other factors that could significantly affect the Company's internal controls subsequent to their evaluation, nor have there been any corrective actions with regard to significant deficiencies or material weaknesses. Item 5. Other Events. On October 17, 2002, the Company announced a new stock buyback program to repurchase up to 10% (1,325,000 shares) of its outstanding stock. Through March 31, 2003, the Company had acquired 464,096 shares of its stock pursuant to its most recent buyback program. -5-
<TABLE> AAON, Inc. Consolidated Balance Sheets <CAPTION> March 31, 2003* December 31, 2002 ------------------- ------------------- (in thousands, except per share data) <S> <C> <C> ASSETS CURRENT ASSETS: Cash and cash equivalents $ 4,869 $ 5,071 Accounts receivable, net 20,053 22,306 Inventories 15,585 14,338 Prepaid expenses 579 599 Deferred income tax 4,168 4,168 ------------------- ------------------- Total current assets 45,254 46,482 ------------------- ------------------- PROPERTY, PLANT AND EQUIPMENT, at cost: Land 874 874 Buildings 18,530 18,394 Machinery and equipment 40,751 39,580 Furniture and fixtures 3,532 3,497 ------------------- ------------------- Total property, plant & equipment 63,687 62,345 Less: accumulated depreciation 28,352 27,114 ------------------- ------------------- Net property, plant & equipment 35,335 35,231 CERTIFICATE OF DEPOSIT 10,000 10,000 ------------------- ------------------- Total assets $ 90,589 $ 91,713 =================== =================== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Revolving credit facility $ - $ 3,566 Accounts payable 8,292 8,418 Accrued liabilities 16,402 13,349 ------------------- ------------------- Total current liabilities 24,694 25,333 ------------------- ------------------- DEFERRED TAX LIABILITY 4,070 4,070 ------------------- ------------------- STOCKHOLDERS' EQUITY: Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued - - Common stock, $.004 par value, 50,000,000 shares authorized; 12,791,383 and 13,030,916 issued and outstanding at March 31, 2003 and December 31, 2002, respectively 51 52 Additional paid-in capital - - Retained earnings 61,774 62,258 ------------------- ------------------- Total stockholders' equity 61,825 62,310 ------------------- ------------------- Total liabilities and stockholders' equity $ 90,589 $ 91,713 =================== =================== *Unaudited </TABLE> -6-
<TABLE> AAON, Inc. Consolidated Statements of Operations <CAPTION> Three Months Ended March 31, 2003* March 31, 2002* ----------------- ----------------- (in thousands, except share and per share data) <S> <C> <C> Net sales $ 32,856 $ 35,990 Cost of sales 24,159 26,373 ----------------- ----------------- Gross profit 8,697 9,617 Selling, general and administrative expenses 3,196 3,936 ----------------- ----------------- Income from operations 5,501 5,681 Interest expense 6 28 Interest income (58) (25) Other income (84) (63) ----------------- ----------------- Income before income taxes 5,637 5,741 Income tax provision 2,142 2,094 ----------------- ----------------- Net Income $ 3,495 $ 3,647 ================= ================= Earnings Per Share** Basic $ 0.27 $ 0.27 ================= ================= Diluted $ 0.26 $ 0.27 ================= ================= Weighted Average Shares Outstanding** Basic 12,880,299 13,094,634 ================= ================= Diluted 13,415,455 13,689,822 ================= ================= * Unaudited ** Reflects stock split effective June 4, 2002 </TABLE> -7-
<TABLE> AAON, Inc. Consolidated Statements of Stockholders' Equity <CAPTION> Common Stock Paid in Retained Shares Amount Capital Earnings Total ----------- ------------ ----------- ------------- -------------- (in thousands) <S> <C> <C> <C> <C> <C> Balance, December 31, 2002 13,031 $ 52 $ - $ 62,258 $ 62,310 Exercise of Common Stock Options* 8 - 28 - 28 Repurchase of Common Stock* (248) (1) (28) (3,979) (4,008) Net Income* - - - 3,495 3,495 ----------- ------------ ----------- ------------- -------------- Balance, March 31, 2003* 12,791 $ 51 $ - $ 61,774 $ 61,825 =========== ============ =========== ============= ============== *Unaudited </TABLE> -8-
<TABLE> AAON, Inc. Consolidated Statements of Cash Flows <CAPTION> Three Months Ended Three Months Ended March 31, 2003* March 31, 2002* -------------------- -------------------- (in thousands) <S> <C> <C> CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 3,495 $ 3,647 ----------- ----------- Adjustments to reconcile net income to net cash provided by operating activities- Depreciation and amortization 1,238 1,203 Change in assets and liabilities: (Increase) decrease in: Accounts receivable 2,253 832 Inventories (1,247) (598) Prepaid expenses 20 (211) Increase (decrease) in: Accounts payable (126) (1,000) Accrued liabilities 3,053 3,137 ----------- ----------- Total adjustments 5,191 3,363 ----------- ----------- Net cash provided by operating activities 8,686 7,010 ----------- ----------- CASH FLOWS USED IN INVESTING ACTIVITIES** Capital expenditures (1,342) (322) ----------- ----------- CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES Borrowing under revolving credit facility Payments under revolving credit facility 6,324 8,840 Payments of long-term debt (9,890) (6,582) Exercise of stock options - (135) Repurchase of common stock 28 719 (4,008) - ----------- ----------- Net cash provided by (used in) financing activities (7,546) 2,842 ----------- ----------- NET CHANGE IN CASH (202) 9,530 CASH AND CASH EQUIVALENTS, beginning of period 5,071 1,123 ----------- ----------- CASH AND CASH EQUIVALENTS, end of period $ 4,869 $ 10,653 =========== =========== *Unaudited **See Note 4 concerning certificates of deposits </TABLE> -9-
AAON, INC. NOTES TO FINANCIAL STATEMENTS March 31, 2003 1. BASIS OF PRESENTATION: ---------------------- The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures made in these financial statements are adequate to make the information presented not misleading when read in conjunction with the financial statements and the notes thereto included in the Company's latest audited financial statements which were included in the Form 10-K Report for the fiscal year ended December 31, 2002, filed by AAON, Inc. with the SEC. Certain reclassifications of prior year amounts have been made to conform to current year presentations. These reclassifications had no impact on net income. In the opinion of management, the accompanying financial statements include all normal, recurring adjustments required for a fair presentation of the results of the periods presented. Operating results for the three months ended March 31, 2003, are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. STOCK COMPENSATION: ------------------ The Company accounts for its Stock Option Plan under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. No stock-based employee compensation cost is reflected in net income, as all options granted under the plan had an exercise price equal to the market value of the underlying common stock on the date of grant. The effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation is as follows: <TABLE> March 31, 2003 March 31, 2002 ---------------- ---------------- (in thousands except per share data) <CAPTION> <S> <C> <C> Net income as reported $3,495 $3,647 Deduct: Total stock-based employee compensation expense determined under fair value method for all awards, net of related tax effects (131) (291) ================ ================ Pro forma net income 3,364 3,356 Earnings per share: Basic, as reported $ 0.27 $ 0.27 ================ ================ Basic, pro forma $ 0.26 $ 0.26 ================ ================ Diluted, as reported $ 0.26 $ 0.27 ================ ================ Diluted, pro forma $ 0.25 $ 0.25 ================ ================ </TABLE> -10-
2. CASH AND CASH EQUIVALENTS: -------------------------- Cash and cash equivalents consist of bank deposits and highly liquid, interest-bearing money market funds with initial maturities of three months or less. 3. INVENTORIES: ------------ Inventories are valued at the lower of cost or market. Cost is determined by the first-in, first-out (FIFO) method. The Company establishes an allowance for excess and obsolete inventories based on product line changes, the feasibility of substituting parts and the need for supply and replacement parts. At March 31, 2003 (unaudited), and December 31, 2002, inventory and the related allowance for excess and obsolete inventories are as follows (in thousands): <TABLE> March 31, 2003 December 31, 2002 ------------------- ------------------- <CAPTION> <S> <C> <C> Raw materials $11,243 $11,508 Work in process 3,546 2,750 Finished goods 1,796 1,080 ------------------- ------------------- $16,585 $15,338 Less: allowance for excess and obsolete raw materials inventory 1,000 1,000 ------------------- ------------------- $15,585 $14,338 =================== =================== </TABLE> 4. CERTIFICATE OF DEPOSITS: ------------------------ The $10 million certificate of deposit bears interest at 3.25% per annum and matures on June 12, 2004. There is a three-month interest penalty for early withdrawal. 5. WARRANTIES: ----------- A provision is made for the estimated cost of warranty obligations at the time the related products are sold based upon the warranty period, historical trends, new products and any known identifiable warranty issues. Changes in the Company's warranty liability during the three months ended March 31, 2003, and 2002, are as follows (in thousands): <TABLE> March 31, 2003 March 31, 2002 ------------------ ------------------ <CAPTION> <S> <C> <C> Balance, beginning of the period $ 7,200 $ 7,000 Warranties accrued during the period 487 1,277 Warranties settled during the period (378) (442) ------------------ ------------------ $ 7,309 $ 7,835 ================== ================== </TABLE> 6. REVOLVING CREDIT FACILITY: -------------------------- The $15,150,000 bank line of credit has interest payable monthly at LIBOR plus 1.60% (2.94% at March 31, 2003) with a maturity date of July 31, 2003. At March 31, 2003, the Company had no outstanding balance on the bank line of credit and had $3,566,000 outstanding at December 31, 2002. -11-
PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits - None. (b) Registrant did not file any reports on Form 8-K during the three-month period ended March 31, 2003. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AAON, INC. Dated: May 2, 2003 By: /s/ Norman H. Asbjornson ------------------------------------------- Norman H. Asbjornson President Dated: May 2, 2003 By: /s/ Kathy I. Sheffield ------------------------------------------- Kathy I. Sheffield Treasurer -12-
CERTIFICATION I. I, Norman H. Asbjornson, certify that: 1. I have reviewed this quarterly report on Form 10-Q of AAON, Inc. 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly 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-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures 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 quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, 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 in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Dated: May 2, 2003 /s/ Norman H. Asbjornson --------------------------- Norman H. Asbjornson Chief Executive Officer -13-
CERTIFICATION II. I, Kathy I. Sheffield, certify that: 1. I have reviewed this quarterly report on Form 10-Q of AAON, Inc. 2. Based on my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly 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-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures 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 quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, 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 in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Dated: May 2, 2003 /s/ Kathy I. Sheffield --------------------------- Kathy I. Sheffield Chief Financial Officer -14-
Exhibit 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of AAON, Inc. (the "Company"), on Form 10-Q for the quarter ended March 31, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Norman H. Asbjornson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Norman H. Asbjornson - --------------------------- Norman H. Asbjornson Chief Executive Officer -15-
Exhibit 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of AAON, Inc. (the "Company"), on Form 10-Q for the quarter ended March 31, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Kathy I. Sheffield, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Kathy I. Sheffield - --------------------------- Kathy I. Sheffield Chief Financial Officer -16-