Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 23, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | AAON INC | ||
Entity Central Index Key | 824,142 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 52,433,208 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 | ||
Entity Public Float | $ 1,502.1 |
Consolidated Balance Sheets
Consolidated Balance Sheets $ in Thousands, CAD in Millions | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Current assets: | ||
Cash and cash equivalents | $ 21,457 | $ 24,153 |
Certificates of deposit | 2,880 | 5,512 |
Held-to-maturity Securities, Current | 6,077 | 14,083 |
Accounts receivable, net | 50,338 | 43,001 |
Income tax receivable | 1,643 | 6,239 |
Note receivable | 28 | 25 |
Inventories, net | 70,786 | 47,352 |
Prepaid expenses and other | 518 | 616 |
Total current assets | 153,727 | 140,981 |
Property, plant and equipment: | ||
Land | 2,233 | 2,233 |
Buildings | 92,075 | 78,806 |
Machinery and equipment | 184,316 | 158,216 |
Furniture and fixtures | 13,714 | 12,783 |
Total property, plant and equipment | 292,338 | 252,038 |
Less: Accumulated depreciation | 149,963 | 137,146 |
Property, plant and equipment, net | 142,375 | 114,892 |
Note receivable, long-term | 678 | 657 |
Total assets | 296,780 | 256,530 |
Current liabilities: | ||
Revolving credit facility | 0 | 0 |
Accounts payable | 10,967 | 7,102 |
Accrued liabilities | 39,098 | 31,940 |
Total current liabilities | 50,065 | 39,042 |
Deferred revenue | 1,512 | 1,498 |
Deferred tax liabilities | 7,977 | 9,531 |
Donations | 0 | 561 |
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, 52,422,801 and 52,651,448 issued and outstanding at December 31, 2017 and 2016, respectively | 210 | 211 |
Additional paid-in capital | 0 | 0 |
Retained earnings | 237,016 | 205,687 |
Total stockholders' equity | 237,226 | 205,898 |
Total liabilities and stockholders' equity | $ 296,780 | $ 256,530 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Stockholders' equity: | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.004 | $ 0.004 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 52,422,801 | 52,651,448 |
Common stock, shares outstanding | 52,422,801 | 52,651,448 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Net sales | $ 405,232 | $ 383,977 | $ 358,632 |
Cost of sales | 281,835 | 265,897 | 249,951 |
Gross profit | 123,397 | 118,080 | 108,681 |
Selling, general and administrative expenses | 49,249 | 38,506 | 37,438 |
(Gain) loss on disposal of assets | 45 | (20) | (59) |
Income from operations | 74,103 | 79,594 | 71,302 |
Interest income, net | 298 | 292 | 161 |
Other income (expense), net | 91 | 105 | (124) |
Income before taxes | 74,492 | 79,991 | 71,339 |
Income tax provision | 19,994 | 26,615 | 25,611 |
Net income | $ 54,498 | $ 53,376 | $ 45,728 |
Earnings per share: | |||
Basic (usd per share) | $ 1.04 | $ 1.01 | $ 0.85 |
Diluted (usd per share) | 1.03 | 1 | 0.84 |
Cash dividends declared per common share | $ 0.26 | $ 0.24 | $ 0.22 |
Weighted average shares outstanding: | |||
Basic | 52,572,496 | 52,924,398 | 54,045,841 |
Diluted | 53,078,734 | 53,449,754 | 54,481,484 |
Consolidated Statements of Inc5
Consolidated Statements of Income (Parenthetical) | Jul. 16, 2014 |
Income Statement [Abstract] | |
Stock split, conversion ratio | 1.5 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Paid-in Capital | Retained Earnings |
Balance (in shares) at Dec. 31, 2014 | 54,042 | |||
Balance at Dec. 31, 2014 | $ 174,059 | $ 216 | $ 0 | $ 173,843 |
Net income | 45,728 | 45,728 | ||
Stock options exercised and restricted stock awards granted, including tax benefits (in shares) | 546 | |||
Stock options exercised and restricted stock awards granted, including tax benefits | 5,240 | $ 2 | 5,238 | |
Share-based compensation | 2,891 | 2,891 | ||
Stock repurchased and retired (in shares) | (1,576) | |||
Stock repurchased and retired | (37,143) | $ (6) | (8,129) | (29,008) |
Dividends | (11,857) | (11,857) | ||
Balance (in shares) at Dec. 31, 2015 | 53,012 | |||
Balance at Dec. 31, 2015 | 178,918 | $ 212 | 0 | 178,706 |
Net income | 53,376 | 53,376 | ||
Stock options exercised and restricted stock awards granted, including tax benefits (in shares) | 375 | |||
Stock options exercised and restricted stock awards granted, including tax benefits | 2,063 | $ 2 | 2,061 | |
Share-based compensation | 4,357 | 4,357 | ||
Stock repurchased and retired (in shares) | (736) | |||
Stock repurchased and retired | (20,140) | $ (3) | (6,418) | (13,719) |
Dividends | (12,676) | (12,676) | ||
Balance (in shares) at Dec. 31, 2016 | 52,651 | |||
Balance at Dec. 31, 2016 | 205,898 | $ 211 | 0 | 205,687 |
Net income | 54,498 | 54,498 | ||
Stock options exercised and restricted stock awards granted, including tax benefits (in shares) | 293 | |||
Stock options exercised and restricted stock awards granted, including tax benefits | 2,259 | $ 1 | 2,258 | |
Share-based compensation | 6,458 | 6,458 | ||
Stock repurchased and retired (in shares) | (522) | |||
Stock repurchased and retired | (18,234) | $ (2) | (8,716) | (9,516) |
Dividends | (13,653) | (13,653) | ||
Balance (in shares) at Dec. 31, 2017 | 52,422 | |||
Balance at Dec. 31, 2017 | $ 237,226 | $ 210 | $ 0 | $ 237,016 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Activities | |||
Net income | $ 54,498 | $ 53,376 | $ 45,728 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 15,007 | 13,035 | 11,741 |
Amortization of bond premiums | 47 | 249 | 266 |
Allowance for Doubtful Accounts Receivable, Period Increase (Decrease) | 179 | (25) | (48) |
Provision for excess and obsolete inventories | 264 | 625 | 178 |
Share-based compensation | 6,458 | 4,357 | 2,891 |
Loss (gain) on disposition of assets | 45 | (20) | (59) |
Foreign currency transaction (gain) loss | (59) | (22) | 139 |
Interest income on note receivable | (25) | (28) | (30) |
Deferred income taxes | (1,554) | 825 | 1,172 |
Changes in assets and liabilities: | |||
Accounts receivable | (7,516) | 7,048 | (5,884) |
Income tax receivable | 4,596 | (1,537) | 312 |
Inventories | (23,698) | (9,478) | (1,059) |
Prepaid expenses and other | 98 | (83) | 76 |
Accounts payable | 3,043 | 654 | (5,109) |
Deferred revenue | 258 | 417 | 189 |
Accrued liabilities and donations | 6,353 | (5,470) | 4,852 |
Net cash provided by operating activities | 57,994 | 63,923 | 55,355 |
Investing Activities | |||
Capital expenditures | (41,713) | (26,604) | (20,967) |
Proceeds from sale of property, plant and equipment | 10 | 28 | 63 |
Investment in certificates of deposits | (5,280) | (4,112) | (6,680) |
Maturities of certificates of deposits | 7,912 | 10,560 | 6,098 |
Purchase of investments held to maturity | (13,241) | (10,384) | (14,183) |
Maturities of investments | 19,700 | 10,021 | 11,408 |
Proceeds from called investments | 1,500 | 3,514 | 1,013 |
Principal payments from note receivable | 60 | 52 | 54 |
Net cash used in investing activities | (31,052) | (16,925) | (23,194) |
Financing Activities | |||
Borrowings under revolving credit facility | 0 | 761 | 0 |
Payments under revolving credit facility | 0 | (761) | 0 |
Stock options exercised | 2,259 | 2,063 | 2,795 |
Repurchase of stock | (16,620) | (19,317) | (36,558) |
Employee taxes paid by withholding shares | (1,614) | (823) | (585) |
Cash dividends paid to stockholders | (13,663) | (12,676) | (11,857) |
Net cash used in financing activities | (29,638) | (30,753) | (46,205) |
Net increase (decrease) in cash and cash equivalents | (2,696) | 16,245 | (14,044) |
Cash and cash equivalents, beginning of year | 24,153 | 7,908 | 21,952 |
Cash and cash equivalents, end of year | $ 21,457 | $ 24,153 | $ 7,908 |
Business Description
Business Description | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description | Business Description AAON, Inc. is a Nevada corporation which was incorporated on August 18, 1987. Our operating subsidiaries include AAON, Inc., an Oklahoma corporation and AAON Coil Products, Inc., a Texas corporation (collectively, the "Company"). The Consolidated Financial Statements include our accounts and the accounts of our subsidiaries. We are 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 and coils. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. Cash and Cash Equivalents We consider all highly liquid temporary investments with original maturity dates of three months or less to be cash equivalents. Cash and cash equivalents consist of bank deposits and highly liquid, interest-bearing money market funds. The Company's cash and cash equivalents are held in a few financial institutions in amounts that exceed the insurance limits of the Federal Deposit Insurance Corporation. However, management believes that the Company's counterparty risks are minimal based on the reputation and history of the institutions selected. Investments Certificates of Deposit We held $2.9 million and $5.5 million in certificates of deposit at December 31, 2017 and December 31, 2016 , respectively. At December 31, 2017 , the certificates of deposit bear interest ranging from 0.95% to 1.10% per annum and have various maturities ranging from one to five months . Investments Held to Maturity At December 31, 2017 , our investments held to maturity were comprised of $6.1 million of corporate notes and bonds with various maturities ranging from one to four months . The investments have moderate risk with S&P ratings ranging from AA+ to BBB. We record the amortized cost basis and accrued interest of the corporate notes and bonds in the Consolidated Balance Sheets. We record the interest and amortization of bond premium to interest income in the Consolidated Statements of Income. The following summarizes the amortized cost and estimated fair value of our investments held to maturity at December 31, 2017 and December 31, 2016 : Amortized Cost Gross Unrealized Gain Gross Unrealized (Loss) Fair Value December 31, 2017: (in thousands) Current assets: Investments held to maturity $ 6,077 $ — $ (6 ) $ 6,071 Non current assets: Investments held to maturity — — — — Total $ 6,077 $ — $ (6 ) $ 6,071 December 31, 2016: Current assets: Investments held to maturity $ 14,083 $ — $ (12 ) $ 14,071 Non current assets: Investments held to maturity — — — — Total $ 14,083 $ — $ (12 ) $ 14,071 We evaluate these investments for other-than-temporary impairments on a quarterly basis. We do not believe there was an other-than-temporary impairment for our investments at December 31, 2017 or 2016 . Accounts and Note Receivable Accounts and note receivable are stated at amounts due from customers, net of an allowance for doubtful accounts. We generally do not require that our customers provide collateral. The Company determines its allowance for doubtful accounts by considering a number of factors, including the credit risk of specific customers, the customer’s ability to pay current obligations, historical trends, economic and market conditions and the age of the receivable. Accounts are considered past due when the balance has been outstanding for ninety days past negotiated credit terms. Past due accounts are generally written-off against the allowance for doubtful accounts only after all collection attempts have been exhausted. Concentration of Credit Risk Our customers are concentrated primarily in the domestic commercial and industrial new construction and replacement markets. To date, our sales have been primarily to the domestic market, with foreign sales accounting for approximately 4% , 4% and 4% of revenues for the years ended December 31, 2017 , 2016 and 2015 , respectively. One customer, Texas AirSystems, accounted for 10% or more of our sales during 2017 , 2016 or 2015. No customer accounted for 5% or more of our accounts receivable balance at December 31, 2017 or 2016 . Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, receivables, accounts payable and accrued liabilities approximate fair value because of the short-term maturity of the items. The carrying amount of the Company's revolving line of credit, and other payables, approximate their fair values either due to their short term nature, the variable rates associated with the debt or based on current rates offered to the Company for debt with similar characteristics. Inventories Inventories are valued at the lower of cost or market using the first-in, first-out (“FIFO”) method. Cost in inventory includes purchased parts and materials, direct labor and applied manufacturing overhead. We establish 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. Property, Plant and Equipment Property, plant and equipment, including significant improvements, are recorded at cost, net of accumulated depreciation. Repairs and maintenance and any gains or losses on disposition are included in operations. Depreciation is computed using the straight-line method over the following estimated useful lives: Buildings 3-40 years Machinery and equipment 3-15 years Furniture and fixtures 3-7 years Impairment of Long-Lived Assets We review long-lived assets for possible impairment when events or changes in circumstances indicate, in management’s judgment, that the carrying amount of an asset may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset or asset group to its estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the undiscounted cash flows are less than the carrying amount of the asset or asset group, an impairment loss is recognized for the amount by which the carrying amount of the asset or asset group exceeds its fair value. Research and Development The costs associated with research and development for the purpose of developing and improving new products are expensed as incurred. For the years ended December 31, 2017 , 2016 , and 2015 research and development costs amounted to approximately $13.0 million, $12.0 million , and $7.5 million , respectively. Advertising Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2017 , 2016 , and 2015 was approximately $1.7 million, $1.4 million , and $1.2 million , respectively. Shipping and Handling We incur shipping and handling costs in the distribution of products sold that are recorded in cost of sales. Shipping charges that are billed to the customer are recorded in revenues and as an expense in cost of sales. For the years ended December 31, 2017 , 2016 and 2015 shipping and handling fees amounted to approximately $11.4 million, $10.3 million , and $9.6 million , respectively. Income Taxes Income taxes are accounted for under the asset and liability method. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the book carrying amounts and the tax basis of assets and liabilities. Excess tax benefits and deficiencies are reported as an income tax benefit or expense on the statement of income and are treated as discrete items to the income tax provision in the reporting period in which they occur. We establish accruals for unrecognized tax positions when it is more likely than not that our tax return positions may not be fully sustained. The Company records a valuation allowance for deferred tax assets when, in the opinion of management, it is more likely than not that deferred tax assets will not be realized. Share-Based Compensation The Company recognizes expense for its share-based compensation based on the fair value of the awards that are granted. The Company’s share-based compensation plans provide for the granting of stock options and restricted stock. The fair values of stock options are estimated at the date of grant using the Black-Scholes-Merton option valuation model. The use of the Black-Scholes-Merton option valuation model requires the input of subjective assumptions. Measured compensation cost is recognized ratably over the vesting period of the related share-based compensation award. Forfeitures are accounted for as they occur. The fair value of restricted stock awards is determined based on the market value of the Company’s shares on the grant date and the compensation expense is recognized on a straight-line basis during the service period of the respective grant. Derivative Instruments In the course of normal operations, the Company occasionally enters into contracts such as forward priced physical contracts for the purchase of raw materials that qualify for and are designated as normal purchase or normal sale contracts. Such contracts are exempted from the fair value accounting requirements and are accounted for at the time product is purchased or sold under the related contract. The Company does not engage in speculative transactions, nor does the Company hold or issue financial instruments for trading purposes. Revenue Recognition We recognize revenues from sales of products when title and risk of ownership pass to the customer. Final sales prices are fixed and based on purchase orders. Sales allowances and customer incentives are treated as reductions to sales and are provided for based on historical experiences and current estimates. Sales of our products are moderately seasonal with the peak period being July - November of each year. In addition, the Company presents revenues net of sales tax and net of certain payments to our independent manufacturer representatives (“Representatives”). Representatives are national companies that are in the business of providing HVAC units and other related products and services to customers. The end user customer orders a bundled group of products and services from the Representative and expects the Representative to fulfill the order. Only after the specifications are agreed to by the Representative and the customer, and the decision is made to use an AAON HVAC unit, will we receive notice of the order. We establish the amount we must receive for our HVAC unit (“minimum sales price”), but do not control the total order price which is negotiated by the Representative with the end user customer. We are responsible for billings and collections resulting from all sales transactions, including those initiated by our Representatives. The Representatives submit the total order price to us for invoicing and collection. The total order price includes our minimum sales price and could contain an additional amount which may include both the Representatives’ fee and amounts due for additional products and services required by the customer. These additional products and services may include controls purchased from another manufacturer to operate the unit, start-up services, and curbs for supporting the unit (“Third Party Products”). All are associated with the purchase of a HVAC unit but may be provided by the Representative or another third party. The Company is under no obligation related to Third Party Products. The Representatives’ fee and Third Party Products amounts (“Due to Representatives”) are paid only after all amounts associated with the order are collected from the customer. The Due to Representatives amount is paid only after all amounts associated with the order are collected from the customer. The amount of payments to our representatives was $51.8 million, $55.0 million , and $55.4 million for each of the years ended December 31, 2017 , 2016 , and 2015 , respectively. The Company also sells extended warranties on parts for various lengths of time ranging from six months to 10 years. Revenue for these separately priced warranties is deferred and recognized on a straight-line basis over the separately priced warranty period. Insurance Reserves Under the Company’s insurance programs, coverage is obtained for significant liability limits as well as those risks required to be insured by law or contract. It is the policy of the Company to self-insure a portion of certain expected losses related primarily to workers’ compensation and medical liability. Provisions for losses expected under these programs are recorded based on the Company’s estimates of the aggregate liabilities for the claims incurred. Product Warranties A provision is made for the estimated cost of maintaining product warranties to customers at the time the product is sold based upon historical claims experience by product line. The Company records a liability and an expense for estimated future warranty claims based upon historical experience and management's estimate of the level of future claims. Changes in the estimated amounts recognized in prior years are recorded as an adjustment to the liability and expense in the current year. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP 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, actual results could differ from those estimates and could have a significant impact on our results of operations, financial position and cash flows. We reevaluate our estimates and assumptions as needed, but at a minimum on a quarterly basis. The most significant estimates include, but are not limited to, the allowance for doubtful accounts, inventory reserves, warranty accrual, workers compensation accrual, medical insurance accrual, share-based compensation and income taxes. Actual results could differ materially from those estimates. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Accounts Receivable | Accounts Receivable Accounts receivable and the related allowance for doubtful accounts are as follows: December 31, 2017 2016 (in thousands) Accounts receivable $ 50,457 $ 43,091 Less: Allowance for doubtful accounts (119 ) (90 ) Total, net $ 50,338 $ 43,001 Years Ending December 31, 2017 2016 2015 Allowance for doubtful accounts: (in thousands) Balance, beginning of period $ 90 $ 115 $ 171 Provisions for losses on accounts receivables, net of adjustments 179 (25 ) (48 ) Accounts receivable written off, net of recoveries (150 ) — (8 ) Balance, end of period $ 119 $ 90 $ 115 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The components of inventories and the related changes in the allowance for excess and obsolete inventories are as follows: December 31, 2017 2016 (in thousands) Raw materials $ 57,784 $ 43,438 Work in process 5,957 2,279 Finished goods 8,163 3,017 71,904 48,734 Less: Allowance for excess and obsolete inventories (1,118 ) (1,382 ) Total, net $ 70,786 $ 47,352 Years Ending December 31, 2017 2016 2015 Allowance for excess and obsolete inventories: (in thousands) Balance, beginning of period $ 1,382 $ 757 $ 714 Provisions for excess and obsolete inventories 102 625 178 Inventories written off (366 ) — (135 ) Balance, end of period $ 1,118 $ 1,382 $ 757 |
Note Receivable
Note Receivable | 12 Months Ended |
Dec. 31, 2017 | |
Note Receivable [Abstract] | |
Note Receivable | Note Receivable In connection with the closure of our Canadian facility on May 18, 2009, we sold land and a building in September 2010 and assumed a note receivable from the borrower secured by the property. The C $1.1 million , 15 year note has an interest rate of 4.0% and is payable to us monthly, and has a C $0.6 million balloon payment due in October 2025 . Interest payments are recognized in interest income. We evaluate the note for impairment on a quarterly basis. We determine the note receivable to be impaired if we are uncertain of its collectability based on the contractual terms. At December 31, 2017 and 2016 , there was no impairment. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Years Ending December 31, 2017 2016 2015 Supplemental disclosures: (in thousands) Interest paid $ — $ — $ — Income taxes paid, net 16,951 27,353 24,125 Non-cash investing and financing activities: Non-cash capital expenditures 832 270 83 |
Warranties
Warranties | 12 Months Ended |
Dec. 31, 2017 | |
Guarantees [Abstract] | |
Warranties | Warranties The Company has warranties with various terms from 18 months for parts to 25 years for certain heat exchangers. The Company has an obligation to replace parts or service its products if conditions under the warranty are met. A provision is made for estimated warranty costs 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 warranty accrual are as follows: Years Ending December 31, 2017 2016 2015 Warranty accrual: (in thousands) Balance, beginning of period $ 7,936 $ 8,469 $ 8,130 Payments made (8,686 ) (4,134 ) (3,978 ) Provisions 11,233 3,601 4,317 Balance, end of period $ 10,483 $ 7,936 $ 8,469 Warranty expense: $ 11,233 $ 3,601 $ 4,317 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities At December 31, accrued liabilities were comprised of the following: December 31, 2017 2016 (in thousands) Warranty $ 10,483 $ 7,936 Due to representatives 13,086 9,907 Payroll 4,456 4,129 Profit sharing 2,034 1,967 Workers' compensation 593 580 Medical self-insurance 725 872 Customer prepayments 2,838 2,256 Donations 588 600 Employee vacation time 2,688 2,367 Other 1,607 1,326 Total $ 39,098 $ 31,940 |
Revolving Credit Facility
Revolving Credit Facility | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Revolving Credit Facility | Revolving Credit Facility Our revolving credit facility provides for maximum borrowings of $30.0 million which is provided by BOKF, NA dba Bank of Oklahoma, formerly known as Bank of Oklahoma, N.A. ("Bank of Oklahoma"). Under the line of credit, there was one standby letter of credit totaling $0.8 million as of December 31, 2017 . Borrowings available under the revolving credit facility at December 31, 2017 , were $29.2 million . Interest on borrowings is payable monthly at LIBOR plus 2.5% . No fees are associated with the unused portion of the committed amount. As of December 31, 2017 and 2016 , we had no balance outstanding under our revolving credit facility. The revolving credit facility expires on July 27, 2018. At December 31, 2017 and 2016 , the weighted average interest rate was 3.5% and 3.0% , respectively. At December 31, 2017 , we were in compliance with our financial covenants. These covenants require that we meet certain parameters related to our tangible net worth and total liabilities to tangible net worth ratio. At December 31, 2017 our tangible net worth was $237.2 million , which meets the requirement of being at or above $125.0 million . Our total liabilities to tangible net worth ratio was 0.3 to 1.0, which meets the requirement of not being above 2 to 1. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision (benefit) for income taxes consists of the following: Years Ending December 31, 2017 2016 2015 (in thousands) Current $ 21,548 $ 25,790 $ 24,439 Deferred (1,554 ) 825 1,172 Total $ 19,994 $ 26,615 $ 25,611 The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate before the provision for income taxes. The reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows: Years Ending December 31, 2017 2016 2015 Federal statutory rate 35 % 35 % 35 % State income taxes, net of federal benefit 5 % 5 % 5 % Remeasurement of deferred taxes (6 )% — % — % Domestic manufacturing deduction (3 )% (3 )% (3 )% Excess tax benefits (3 )% (3 )% — % Other (1 )% (1 )% (1 )% 27 % 33 % 36 % The Tax Cuts and Jobs Act (the "Act") was enacted on December 22, 2017. Major changes under the Act include the following: • Reducing the corporate rate to 21 percent • Doubling bonus depreciation to 100 percent for five years • Further limitations on executive compensation deductions • Eliminating the domestic manufacturing deduction As a result of these changes, the Company adjusted its deferred tax assets and liabilities existing at the date of enactment using the newly enacted rates for the periods when they are expected to be realized. This remeasurement resulted in a benefit to income taxes of $4.4 million . The new bonus depreciation provisions resulted in the Company taking $3.2 million of bonus depreciation in the fourth quarter of 2017. The Company sometimes has executive compensation that exceeds the $1.0 million limitation. Typically the limit is exceeded due to the volume of stock activity performed by the executive during the year. The Company cannot predict the performance of its stock or when executives may choose to initiate stock activity. As such, the Company is unable to quantify any impact of this tax law change but any compensation that does exceed this limitation in the future will be a permanent difference and cause an increase to our income tax provision. The Company also has historically taken the domestic manufacturing deduction. The Company will no longer receive the benefit of this deduction which typically has lowered our effective tax rate by 3.0% to 4.0% . Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax purposes. The significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2017 2016 (in thousands) Deferred income tax assets (liabilities): Accounts receivable and inventory reserves $ 318 $ 587 Warranty accrual 2,698 3,165 Other accruals 1,395 1,715 Share-based compensation 1,432 1,784 Donations 152 463 Other, net 698 738 Total deferred income tax assets 6,693 8,452 Property & equipment (14,670 ) (17,983 ) Total deferred income tax liabilities $ (14,670 ) $ (17,983 ) Net deferred income tax liabilities $ (7,977 ) $ (9,531 ) We file income tax returns in the U.S., state and foreign income tax returns jurisdictions. We are subject to U.S. examinations for tax years 2013 to present, and to non-U.S. income tax examinations for the tax years of 2013 to present. In addition, we are subject to state and local income tax examinations for tax years 2013 to present. The Company continues to evaluate its need to file returns in various state jurisdictions. Any interest or penalties would be recognized as a component of income tax expense. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation On May 22, 2007, our stockholders adopted a Long-Term Incentive Plan ("LTIP") which provided an additional 3.3 million shares that could be granted in the form of stock options, stock appreciation rights, restricted stock awards, performance units and performance awards, in addition to the shares from the previous plan, the 1992 Plan. Since inception of the LTIP, non-qualified stock options and restricted stock awards have been granted with the same vesting schedule as the 1992 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. On May 24, 2016, our stockholders adopted the 2016 Long-Term Incentive Plan ("2016 Plan") which provides for approximately 3.8 million shares, comprised of 3.4 million new shares provided for under the 2016 Plan and approximately 0.4 million shares that were available for issuance under the previous LTIP, that are now authorized for issuance under the 2016 Plan, that can be granted in the form of stock options, stock appreciation rights, restricted stock awards, performance awards, dividend equivalent rights, and other awards. Under the 2016 Plan, the exercise price of shares granted may not be less than 100% of the fair market value at the date of the grant. The 2016 Plan is administered by the Compensation Committee of the Board of Directors or such other committee of the Board of Directors as is designated by the Board of Directors (the "Committee"). Membership on the Committee is limited to independent directors. The Committee may delegate certain duties to one or more officers of the Company as provided in the 2016 Plan. The Committee determines the persons to whom awards are to be made, determines the type, size and terms of awards, interprets the 2016 Plan, establishes and revises rules and regulations relating to the 2016 Plan and makes any other determinations that it believes necessary for the administration of the 2016 Plan. The total pre-tax compensation cost related to unvested stock options not yet recognized as of December 31, 2017 is $8.3 million and is expected to be recognized over a weighted-average period of 2.29 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 December 31, 2017 , 2016 and 2015 using a Black Scholes-Merton Model: 2017 2016 2015 Director and Officers: Expected dividend yield $ 0.26 $ 0.22 $ 0.18 Expected volatility 30.81 % 41.19 % 44.14 % Risk-free interest rate 1.90 % 2.00 % 1.97 % Expected life (in years) 5.00 7.68 8.00 Employees: Expected dividend yield $ 0.26 $ 0.25 $ 0.22 Expected volatility 30.67 % 34.50 % 42.71 % Risk-free interest rate 1.89 % 1.73 % 1.41 % Expected life (in years) 5.00 5.69 8.00 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 December 31, 2017 : Weighted Average Weighted Range of Number Remaining Average Exercise of Contractual Exercise Intrinsic Prices Shares Life Price Value (in thousands) $4.54 - 22.76 424,130 4.36 $ 12.41 $ 10,303 $23.57 - 32.85 107,456 8.31 30.10 709 $32.90 - 37.30 25,725 9.19 34.07 68 Total 557,311 5.35 $ 16.82 $ 11,080 The following is a summary of stock options vested and exercisable as of December 31, 2016 : Weighted Average Weighted Range of Number Remaining Average Exercise of Contractual Exercise Intrinsic Prices Shares Life Price Value (in thousands) $4.54 - 20.92 338,308 4.75 $ 8.03 $ 8,465 $20.96 - 26.50 71,928 8.56 22.50 759 Total 410,236 5.42 $ 10.57 $ 9,224 The following is a summary of stock options vested and exercisable as of December 31, 2015 : Weighted Average Weighted Range of Number Remaining Average Exercise of Contractual Exercise Intrinsic Prices Shares Life Price Value (in thousands) $4.31 - 8.65 421,237 4.89 $ 7.04 $ 6,814 $8.70 - 22.76 27,134 7.82 15.31 215 Total 448,371 5.07 $ 7.54 $ 7,029 A summary of option activity under the plans is as follows: Weighted Average Exercise Options Shares Price Outstanding at December 31, 2016 1,450,704 $ 21.33 Granted 410,960 34.46 Exercised (189,415 ) 11.93 Forfeited or Expired (105,140 ) 29.93 Outstanding at December 31, 2017 1,567,109 $ 25.27 Exercisable at December 31, 2017 557,311 $ 16.82 The total intrinsic value of options exercised during December 31, 2017 , 2016 and 2015 was $4.5 million , $4.9 million and $7.4 million , respectively. The cash received from options exercised during December 31, 2017 , 2016 and 2015 was $2.3 million , $2.1 million and $2.8 million , respectively. The impact of these cash receipts is included in financing activities in the accompanying Consolidated Statements of Cash Flows. Since 2007, as part of the LTIP and since May 2016 as part of the 2016 Plan, the Compensation Committee of the Board of Directors has authorized and issued restricted stock awards to directors and certain key employees. Restricted stock awards granted to directors vest one-third each year. All other restricted stock awards vest at a rate of 20% per year. 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 December 31, 2017 , unrecognized compensation cost related to unvested restricted stock awards was approximately $6.5 million which is expected to be recognized over a weighted average period of 1.85 years. A summary of the unvested restricted stock awards is as follows: Weighted Average Grant date Restricted stock Shares Fair Value Unvested at December 31, 2016 408,162 $ 20.47 Granted 124,126 33.97 Vested (170,434 ) 19.97 Forfeited (20,054 ) 22.09 Unvested at December 31, 2017 341,800 $ 25.52 A summary of share-based compensation is as follows for the years ending December 31, 2017 , 2016 and 2015 : 2017 2016 2015 Grant date fair value of awards during the period: (in thousands) Options $ 3,699 $ 6,102 $ 3,685 Restricted stock 4,217 3,147 2,985 Total $ 7,916 $ 9,249 $ 6,670 2017 2016 2015 Share-based compensation expense: (in thousands) Options $ 2,904 $ 1,681 $ 833 Restricted stock 3,554 2,676 2,058 Total $ 6,458 $ 4,357 $ 2,891 2017 2016 2015 Income tax benefit related to share-based compensation: (in thousands) Options $ 1,413 $ 1,610 $ 2,165 Restricted stock 1,051 458 280 Total $ 2,464 $ 2,068 $ 2,445 |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Employee Benefits Defined Contribution Plan - 401(k ) - We sponsor a defined contribution plan (the "Plan”). Eligible employees may make contributions in accordance with the Plan and IRS guidelines. In addition to the traditional 401(k), eligible employees are given the option of making an after-tax contribution to a Roth 401(k) or a combination of both. The Plan provides for automatic enrollment and for an automatic increase to the deferral percentage at January 1st of each year and each year thereafter. Eligible employees are automatically enrolled in the Plan at a 6% deferral rate and currently contributing employees deferral rates will be increased to 6% unless their current rate is above 6% or the employee elects to decline the automatic enrollment or increase. Effective October 1, 2013, the Plan was amended such that the Company contributed 3% of eligible payroll to the Plan for each employee and matched 100% up to 6% of employee contributions of eligible compensation. We contributed and continue to contribute in the form of cash and direct the investment to shares of AAON stock. Employees are 100% vested in salary deferral contributions and vest 20% per year at the end of years two through six of employment in employer matching contributions. The additional 3% Company contribution, a Safe-Harbor contribution, vested over two years. Effective January 1, 2016, the Plan was amended such that the Company matches 175% up to 6% of employee contributions of eligible compensation. The Company no longer contributes 3% of eligible payroll to the Plan for each employee. The Company ceased paying administrative expenses for the Plan at which time administrative expenses are paid for by Plan participants. Additionally, Plan participant forfeitures are used to reduce the cost of the Company contributions. For the years ended December 31, 2017 , 2016 and 2015 we made contributions of $6.1 million , $5.9 million and $9.0 million , respectively. Administrative expenses were approximately $0 , $40.0 thousand , and $0.1 million for the years ended 2017 , 2016 and 2015 , respectively. Profit Sharing Bonus Plan - We maintain a discretionary profit sharing bonus plan under which approximately 10% of pre-tax profit is paid to eligible employees on a quarterly basis in order to reward employee productivity. Eligible employees are regular full-time employees who are actively employed and working on the first and last days of the calendar quarter and who were employed full-time for at least three full months prior to the beginning of the calendar quarter. Profit sharing expense was $8.4 million , $9.0 million and $8.0 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Shareholders' Equity | Stockholders’ Equity Stock Repurchase - The Board has authorized three stock repurchase programs for the Company. The Company may purchase shares on the open market from time to time, up to a total of 5.7 million shares. The Board must authorize the timing and amount of these purchases. Effective May 24, 2016, the Board authorized up to $25.0 million in open market repurchases and on June 2, 2016, the Company executed a repurchase agreement in accordance with the rules and regulations of the SEC allowing the Company to repurchase an aggregate amount of $25.0 million or a total of approximately 2.0 million shares from the open market. The repurchase agreement expired on April 15, 2017. The Company also has a stock repurchase arrangement by which employee-participants in our 401(k) savings and investment plan are entitled to have shares in AAON, Inc. stock in their accounts sold to the Company. The maximum number of shares to be repurchased is contingent upon the number of shares sold by employee-participants. Lastly, the Company repurchases shares of AAON, Inc. stock from certain of its directors and employees for payment of statutory tax withholdings on stock transactions. A11 other repurchases from directors or employees are contingent upon Board approval. All repurchases are done at current market prices. Our repurchase activity is as follows: 2017 2016 2015 Program Shares Total $ $ per share Shares Total $ $ per share Shares Total $ $ per share Open market 8,676 $ 283,654 $ 32.69 165,598 $ 4,440,658 $ 26.82 1,037,590 $ 24,999,963 $ 24.09 401(k) 467,580 16,336,084 34.94 540,501 14,875,850 27.52 512,754 11,557,598 22.54 Directors and employees 45,878 1,614,425 35.19 30,072 823,446 27.38 25,746 585,413 22.74 Total 522,134 $ 18,234,163 $ 34.92 736,171 $ 20,139,954 $ 27.36 1,576,090 $ 37,142,974 $ 23.57 Inception to Date Program Shares Total $ $ per share Open market 3,843,495 $ 61,232,115 $ 15.93 401(k) 6,550,023 82,068,805 12.53 Directors and employees 1,919,510 17,278,033 9.00 Total 12,313,028 $ 160,578,953 $ 13.04 Dividends - At the discretion of the Board of Directors, we pay semi-annual cash dividends. Board approval is required to determine the date of declaration and amount for each semi-annual dividend payment. Our recent dividends are as follows: Declaration Date Record Date Payment Date Dividend per Share May 19, 2015 June 12, 2015 July 1, 2015 $0.11 October 29, 2015 December 2, 2015 December 23, 2015 $0.11 May 24, 2016 June 10, 2016 July 1, 2016 $0.11 November 9, 2016 December 2, 2016 December 23, 2016 $0.13 May 16, 2017 June 9, 2017 July 7, 2017 $0.13 November 7, 2017 November 30, 2017 December 21, 2017 $0.13 We paid cash dividends of $13.7 million , $12.7 million and $11.9 million in 2017 , 2016 and 2015 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are subject to various claims and legal actions that arise in the ordinary course of business. We closely monitor these claims and legal actions and frequently consult with our legal counsel to determine whether they may, when resolved, have a material adverse effect on our financial position, results of operations or cash flows and we accrue and/or disclose loss contingencies as appropriate. We have concluded that the likelihood is remote that the ultimate resolution of any pending litigation or claims will be material or have a material adverse effect on the Company's business, financial position, results of operations or cash flows. We are occasionally party to short-term, cancellable and occasionally non-cancellable, fixed price contracts with major suppliers for the purchase of raw material and component parts. We expect to receive delivery of raw materials for use in our manufacturing operations. These contracts are not accounted for as derivative instruments because they meet the normal purchase and normal sales exemption. |
New Accounting Pronouncements
New Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board ("FASB") in the form of accounting standards updates ("ASUs") to the FASB's Accounting Standards Codification. We consider the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial statements and notes thereto. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In August 2015, with the issuance of ASU 2015-14, the FASB amended the effective date for us to January 1, 2018. The following ASUs have been issued in 2016 along with ASU 2014-09 with the same effective dates and transition requirements: • ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which provides implementation guidance for Topic 606 on principal versus agent considerations. • ASU 2016-10, Identifying Performance Obligations and Licensing , which provides clarification for two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance. • ASU 2016-12, Revenue from Contracts with Customers , which further amends Topic 606. • ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers , which further amends Topic 606. The Company plans to adopt using the retrospective transition method. The Company believes the impact will not be material to the consolidated financial statements. The Company has reviewed all types of customer contracts and gone through the five step process outlined in ASU 2014-09 for each type of contract. The new five step process required by ASU 2014-09 provides results substantially consistent with our current revenue recognition policies. The Company has also evaluated the categories to use for the disaggregate revenue disclosures. The primary change upon adoption will be additional disclosures to show disaggregated revenue and further details around our revenue recognition process. Once we adopt ASU 2014-09, we do not anticipate that our internal control framework will materially change, but rather that existing internal controls will be modified and augmented, as necessary, to consider our new revenue recognition policy effective January 1, 2018. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , which will address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The ASU becomes effective in the annual reporting period beginning after December 31, 2017, including interim reporting periods. We do not expect ASU 2016-01 will have a material effect on our consolidated financial statements and notes thereto. In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting , which addresses changes to the terms or condition of a share-based payment award. The ASU becomes effective in the annual reporting period beginning after December 15, 2017, including interim reporting periods. We do not expect ASU 2017-09 will have a material effect on our consolidated financial statements and notes thereto. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
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. The following table sets forth the computation of basic and diluted earnings per share: 2017 2016 2015 Numerator: (in thousands, except share and per share data) Net income $ 54,498 $ 53,376 $ 45,728 Denominator: Basic weighted average shares 52,572,496 52,924,398 54,045,841 Effect of dilutive stock options and restricted stock 506,238 525,356 435,643 Diluted weighted average shares 53,078,734 53,449,754 54,481,484 Earnings per share: Basic $ 1.04 $ 1.01 $ 0.85 Dilutive $ 1.03 $ 1.00 $ 0.84 Anti-dilutive shares: Shares 785,825 469,603 146,548 |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties The Company purchases some supplies from an entity controlled by the Company's CEO. The Company sometimes makes sales to the CEO for parts. Additionally, the Company sells units to an entity owned by a member of the President's immediate family. This entity is also one of the Company's Representatives and as such, the Company makes payments to the entity for third party products. All related party transactions are made on standard Company terms. Following is a summary of transactions and balance with affiliates: Years Ending December 31, 2017 2016 2015 (in thousands) Sales to affiliates $ 1,579 $ 1,671 $ 1,532 Payments to affiliates 432 697 841 December 31, 2017 2016 (in thousands) Due from affiliates $ 9 $ 10 Due to affiliates — — |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 2, 2018, the Company granted 37,700 shares of restricted stock and 433,400 stock options to members of senior management. Additionally, on February 9, 2018, the Company granted 19,100 shares of restricted stock and 921,700 stock options to employees of the Company. |
Quarterly Results (Unaudited)
Quarterly Results (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results (Unaudited) | Quarterly Results (Unaudited) The following is a summary of the quarterly results of operations for the years ending December 31, 2017 and 2016 : Quarter First Second Third Fourth (in thousands, except per share data) 2017 Net sales $ 86,078 $ 101,326 $ 113,668 $ 104,160 Gross profit 24,986 31,678 35,658 31,075 Net income 10,217 13,794 14,717 15,770 Earnings per share: Basic $ 0.19 $ 0.26 $ 0.28 $ 0.30 Diluted $ 0.19 $ 0.26 $ 0.28 $ 0.30 2016 Net sales $ 85,422 $ 102,319 $ 104,568 $ 91,668 Gross profit 25,731 32,747 33,092 26,510 Net income 11,551 14,725 15,682 11,420 Earnings per share: Basic $ 0.22 $ 0.28 $ 0.30 $ 0.22 Diluted $ 0.22 $ 0.27 $ 0.29 $ 0.21 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid temporary investments with original maturity dates of three months or less to be cash equivalents. Cash and cash equivalents consist of bank deposits and highly liquid, interest-bearing money market funds. The Company's cash and cash equivalents are held in a few financial institutions in amounts that exceed the insurance limits of the Federal Deposit Insurance Corporation. However, management believes that the Company's counterparty risks are minimal based on the reputation and history of the institutions selected. |
Investments | Investments Certificates of Deposit We held $2.9 million and $5.5 million in certificates of deposit at December 31, 2017 and December 31, 2016 , respectively. At December 31, 2017 , the certificates of deposit bear interest ranging from 0.95% to 1.10% per annum and have various maturities ranging from one to five months . Investments Held to Maturity At December 31, 2017 , our investments held to maturity were comprised of $6.1 million of corporate notes and bonds with various maturities ranging from one to four months . The investments have moderate risk with S&P ratings ranging from AA+ to BBB. We record the amortized cost basis and accrued interest of the corporate notes and bonds in the Consolidated Balance Sheets. We record the interest and amortization of bond premium to interest income in the Consolidated Statements of Income. The following summarizes the amortized cost and estimated fair value of our investments held to maturity at December 31, 2017 and December 31, 2016 : Amortized Cost Gross Unrealized Gain Gross Unrealized (Loss) Fair Value December 31, 2017: (in thousands) Current assets: Investments held to maturity $ 6,077 $ — $ (6 ) $ 6,071 Non current assets: Investments held to maturity — — — — Total $ 6,077 $ — $ (6 ) $ 6,071 December 31, 2016: Current assets: Investments held to maturity $ 14,083 $ — $ (12 ) $ 14,071 Non current assets: Investments held to maturity — — — — Total $ 14,083 $ — $ (12 ) $ 14,071 We evaluate these investments for other-than-temporary impairments on a quarterly basis. We do not believe there was an other-than-temporary impairment for our investments at December 31, 2017 or 2016 . |
Accounts and Note Receivable | Accounts and Note Receivable Accounts and note receivable are stated at amounts due from customers, net of an allowance for doubtful accounts. We generally do not require that our customers provide collateral. The Company determines its allowance for doubtful accounts by considering a number of factors, including the credit risk of specific customers, the customer’s ability to pay current obligations, historical trends, economic and market conditions and the age of the receivable. Accounts are considered past due when the balance has been outstanding for ninety days past negotiated credit terms. Past due accounts are generally written-off against the allowance for doubtful accounts only after all collection attempts have been exhausted. |
Concentration of Credit Risk | Concentration of Credit Risk Our customers are concentrated primarily in the domestic commercial and industrial new construction and replacement markets. To date, our sales have been primarily to the domestic market, with foreign sales accounting for approximately 4% , 4% and 4% of revenues for the years ended December 31, 2017 , 2016 and 2015 , respectively. One customer, Texas AirSystems, accounted for 10% or more of our sales during 2017 , 2016 or 2015. No customer accounted for 5% or more of our accounts receivable balance at December 31, 2017 or 2016 . |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, receivables, accounts payable and accrued liabilities approximate fair value because of the short-term maturity of the items. The carrying amount of the Company's revolving line of credit, and other payables, approximate their fair values either due to their short term nature, the variable rates associated with the debt or based on current rates offered to the Company for debt with similar characteristics. |
Inventories | Inventories Inventories are valued at the lower of cost or market using the first-in, first-out (“FIFO”) method. Cost in inventory includes purchased parts and materials, direct labor and applied manufacturing overhead. We establish 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. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment, including significant improvements, are recorded at cost, net of accumulated depreciation. Repairs and maintenance and any gains or losses on disposition are included in operations. Depreciation is computed using the straight-line method over the following estimated useful lives: Buildings 3-40 years Machinery and equipment 3-15 years Furniture and fixtures 3-7 years |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We review long-lived assets for possible impairment when events or changes in circumstances indicate, in management’s judgment, that the carrying amount of an asset may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset or asset group to its estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the undiscounted cash flows are less than the carrying amount of the asset or asset group, an impairment loss is recognized for the amount by which the carrying amount of the asset or asset group exceeds its fair value. |
Research and Development | Research and Development The costs associated with research and development for the purpose of developing and improving new products are expensed as incurred. For the years ended December 31, 2017 , 2016 , and 2015 research and development costs amounted to approximately $13.0 million, $12.0 million , and $7.5 million , respectively. |
Advertising | Advertising Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2017 , 2016 , and 2015 was approximately $1.7 million, $1.4 million , and $1.2 million , respectively. |
Shipping and Handling | Shipping and Handling We incur shipping and handling costs in the distribution of products sold that are recorded in cost of sales. Shipping charges that are billed to the customer are recorded in revenues and as an expense in cost of sales. For the years ended December 31, 2017 , 2016 and 2015 shipping and handling fees amounted to approximately $11.4 million, $10.3 million , and $9.6 million , respectively. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the book carrying amounts and the tax basis of assets and liabilities. Excess tax benefits and deficiencies are reported as an income tax benefit or expense on the statement of income and are treated as discrete items to the income tax provision in the reporting period in which they occur. We establish accruals for unrecognized tax positions when it is more likely than not that our tax return positions may not be fully sustained. The Company records a valuation allowance for deferred tax assets when, in the opinion of management, it is more likely than not that deferred tax assets will not be realized. |
Share-Based Compensation | Share-Based Compensation The Company recognizes expense for its share-based compensation based on the fair value of the awards that are granted. The Company’s share-based compensation plans provide for the granting of stock options and restricted stock. The fair values of stock options are estimated at the date of grant using the Black-Scholes-Merton option valuation model. The use of the Black-Scholes-Merton option valuation model requires the input of subjective assumptions. Measured compensation cost is recognized ratably over the vesting period of the related share-based compensation award. Forfeitures are accounted for as they occur. The fair value of restricted stock awards is determined based on the market value of the Company’s shares on the grant date and the compensation expense is recognized on a straight-line basis during the service period of the respective grant. |
Financial Derivatives | Derivative Instruments In the course of normal operations, the Company occasionally enters into contracts such as forward priced physical contracts for the purchase of raw materials that qualify for and are designated as normal purchase or normal sale contracts. Such contracts are exempted from the fair value accounting requirements and are accounted for at the time product is purchased or sold under the related contract. The Company does not engage in speculative transactions, nor does the Company hold or issue financial instruments for trading purposes. |
Revenue Recognition | Revenue Recognition We recognize revenues from sales of products when title and risk of ownership pass to the customer. Final sales prices are fixed and based on purchase orders. Sales allowances and customer incentives are treated as reductions to sales and are provided for based on historical experiences and current estimates. Sales of our products are moderately seasonal with the peak period being July - November of each year. In addition, the Company presents revenues net of sales tax and net of certain payments to our independent manufacturer representatives (“Representatives”). Representatives are national companies that are in the business of providing HVAC units and other related products and services to customers. The end user customer orders a bundled group of products and services from the Representative and expects the Representative to fulfill the order. Only after the specifications are agreed to by the Representative and the customer, and the decision is made to use an AAON HVAC unit, will we receive notice of the order. We establish the amount we must receive for our HVAC unit (“minimum sales price”), but do not control the total order price which is negotiated by the Representative with the end user customer. We are responsible for billings and collections resulting from all sales transactions, including those initiated by our Representatives. The Representatives submit the total order price to us for invoicing and collection. The total order price includes our minimum sales price and could contain an additional amount which may include both the Representatives’ fee and amounts due for additional products and services required by the customer. These additional products and services may include controls purchased from another manufacturer to operate the unit, start-up services, and curbs for supporting the unit (“Third Party Products”). All are associated with the purchase of a HVAC unit but may be provided by the Representative or another third party. The Company is under no obligation related to Third Party Products. The Representatives’ fee and Third Party Products amounts (“Due to Representatives”) are paid only after all amounts associated with the order are collected from the customer. The Due to Representatives amount is paid only after all amounts associated with the order are collected from the customer. The amount of payments to our representatives was $51.8 million, $55.0 million , and $55.4 million for each of the years ended December 31, 2017 , 2016 , and 2015 , respectively. The Company also sells extended warranties on parts for various lengths of time ranging from six months to 10 years. Revenue for these separately priced warranties is deferred and recognized on a straight-line basis over the separately priced warranty period. |
Insurance Reserves | Insurance Reserves Under the Company’s insurance programs, coverage is obtained for significant liability limits as well as those risks required to be insured by law or contract. It is the policy of the Company to self-insure a portion of certain expected losses related primarily to workers’ compensation and medical liability. Provisions for losses expected under these programs are recorded based on the Company’s estimates of the aggregate liabilities for the claims incurred. |
Product Warranties | Product Warranties A provision is made for the estimated cost of maintaining product warranties to customers at the time the product is sold based upon historical claims experience by product line. The Company records a liability and an expense for estimated future warranty claims based upon historical experience and management's estimate of the level of future claims. Changes in the estimated amounts recognized in prior years are recorded as an adjustment to the liability and expense in the current year. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP 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, actual results could differ from those estimates and could have a significant impact on our results of operations, financial position and cash flows. We reevaluate our estimates and assumptions as needed, but at a minimum on a quarterly basis. The most significant estimates include, but are not limited to, the allowance for doubtful accounts, inventory reserves, warranty accrual, workers compensation accrual, medical insurance accrual, share-based compensation and income taxes. Actual results could differ materially from those estimates. |
New Accounting Pronouncements | Changes to U.S. GAAP are established by the Financial Accounting Standards Board ("FASB") in the form of accounting standards updates ("ASUs") to the FASB's Accounting Standards Codification. We consider the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial statements and notes thereto. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In August 2015, with the issuance of ASU 2015-14, the FASB amended the effective date for us to January 1, 2018. The following ASUs have been issued in 2016 along with ASU 2014-09 with the same effective dates and transition requirements: • ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which provides implementation guidance for Topic 606 on principal versus agent considerations. • ASU 2016-10, Identifying Performance Obligations and Licensing , which provides clarification for two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance. • ASU 2016-12, Revenue from Contracts with Customers , which further amends Topic 606. • ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers , which further amends Topic 606. The Company plans to adopt using the retrospective transition method. The Company believes the impact will not be material to the consolidated financial statements. The Company has reviewed all types of customer contracts and gone through the five step process outlined in ASU 2014-09 for each type of contract. The new five step process required by ASU 2014-09 provides results substantially consistent with our current revenue recognition policies. The Company has also evaluated the categories to use for the disaggregate revenue disclosures. The primary change upon adoption will be additional disclosures to show disaggregated revenue and further details around our revenue recognition process. Once we adopt ASU 2014-09, we do not anticipate that our internal control framework will materially change, but rather that existing internal controls will be modified and augmented, as necessary, to consider our new revenue recognition policy effective January 1, 2018. In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities , which will address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The ASU becomes effective in the annual reporting period beginning after December 31, 2017, including interim reporting periods. We do not expect ASU 2016-01 will have a material effect on our consolidated financial statements and notes thereto. In May 2017, the FASB issued ASU 2017-09, Scope of Modification Accounting , which addresses changes to the terms or condition of a share-based payment award. The ASU becomes effective in the annual reporting period beginning after December 15, 2017, including interim reporting periods. We do not expect ASU 2017-09 will have a material effect on our consolidated financial statements and notes thereto. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Amortized Cost and Estimated Fair Value of Investments Held to Maturity | The following summarizes the amortized cost and estimated fair value of our investments held to maturity at December 31, 2017 and December 31, 2016 : Amortized Cost Gross Unrealized Gain Gross Unrealized (Loss) Fair Value December 31, 2017: (in thousands) Current assets: Investments held to maturity $ 6,077 $ — $ (6 ) $ 6,071 Non current assets: Investments held to maturity — — — — Total $ 6,077 $ — $ (6 ) $ 6,071 December 31, 2016: Current assets: Investments held to maturity $ 14,083 $ — $ (12 ) $ 14,071 Non current assets: Investments held to maturity — — — — Total $ 14,083 $ — $ (12 ) $ 14,071 |
Estimated Useful Lives | Depreciation is computed using the straight-line method over the following estimated useful lives: Buildings 3-40 years Machinery and equipment 3-15 years Furniture and fixtures 3-7 years |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Accounts Receivable | December 31, 2017 2016 (in thousands) Accounts receivable $ 50,457 $ 43,091 Less: Allowance for doubtful accounts (119 ) (90 ) Total, net $ 50,338 $ 43,001 |
Accounts Receivable (Allowance) | Years Ending December 31, 2017 2016 2015 Allowance for doubtful accounts: (in thousands) Balance, beginning of period $ 90 $ 115 $ 171 Provisions for losses on accounts receivables, net of adjustments 179 (25 ) (48 ) Accounts receivable written off, net of recoveries (150 ) — (8 ) Balance, end of period $ 119 $ 90 $ 115 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | December 31, 2017 2016 (in thousands) Raw materials $ 57,784 $ 43,438 Work in process 5,957 2,279 Finished goods 8,163 3,017 71,904 48,734 Less: Allowance for excess and obsolete inventories (1,118 ) (1,382 ) Total, net $ 70,786 $ 47,352 |
Inventories (Allowance) | Years Ending December 31, 2017 2016 2015 Allowance for excess and obsolete inventories: (in thousands) Balance, beginning of period $ 1,382 $ 757 $ 714 Provisions for excess and obsolete inventories 102 625 178 Inventories written off (366 ) — (135 ) Balance, end of period $ 1,118 $ 1,382 $ 757 |
Supplemental Cash Flow Inform31
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Years Ending December 31, 2017 2016 2015 Supplemental disclosures: (in thousands) Interest paid $ — $ — $ — Income taxes paid, net 16,951 27,353 24,125 Non-cash investing and financing activities: Non-cash capital expenditures 832 270 83 |
Warranties (Tables)
Warranties (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Guarantees [Abstract] | |
Warranty | Changes in the warranty accrual are as follows: Years Ending December 31, 2017 2016 2015 Warranty accrual: (in thousands) Balance, beginning of period $ 7,936 $ 8,469 $ 8,130 Payments made (8,686 ) (4,134 ) (3,978 ) Provisions 11,233 3,601 4,317 Balance, end of period $ 10,483 $ 7,936 $ 8,469 Warranty expense: $ 11,233 $ 3,601 $ 4,317 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | At December 31, accrued liabilities were comprised of the following: December 31, 2017 2016 (in thousands) Warranty $ 10,483 $ 7,936 Due to representatives 13,086 9,907 Payroll 4,456 4,129 Profit sharing 2,034 1,967 Workers' compensation 593 580 Medical self-insurance 725 872 Customer prepayments 2,838 2,256 Donations 588 600 Employee vacation time 2,688 2,367 Other 1,607 1,326 Total $ 39,098 $ 31,940 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | The provision (benefit) for income taxes consists of the following: Years Ending December 31, 2017 2016 2015 (in thousands) Current $ 21,548 $ 25,790 $ 24,439 Deferred (1,554 ) 825 1,172 Total $ 19,994 $ 26,615 $ 25,611 |
Federal Statutory Income Tax Rate Reconciliation | The reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows: Years Ending December 31, 2017 2016 2015 Federal statutory rate 35 % 35 % 35 % State income taxes, net of federal benefit 5 % 5 % 5 % Remeasurement of deferred taxes (6 )% — % — % Domestic manufacturing deduction (3 )% (3 )% (3 )% Excess tax benefits (3 )% (3 )% — % Other (1 )% (1 )% (1 )% 27 % 33 % 36 % |
Deferred Tax Assets and Liabilities | The significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2017 2016 (in thousands) Deferred income tax assets (liabilities): Accounts receivable and inventory reserves $ 318 $ 587 Warranty accrual 2,698 3,165 Other accruals 1,395 1,715 Share-based compensation 1,432 1,784 Donations 152 463 Other, net 698 738 Total deferred income tax assets 6,693 8,452 Property & equipment (14,670 ) (17,983 ) Total deferred income tax liabilities $ (14,670 ) $ (17,983 ) Net deferred income tax liabilities $ (7,977 ) $ (9,531 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Option Assumptions | 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 December 31, 2017 , 2016 and 2015 using a Black Scholes-Merton Model: 2017 2016 2015 Director and Officers: Expected dividend yield $ 0.26 $ 0.22 $ 0.18 Expected volatility 30.81 % 41.19 % 44.14 % Risk-free interest rate 1.90 % 2.00 % 1.97 % Expected life (in years) 5.00 7.68 8.00 Employees: Expected dividend yield $ 0.26 $ 0.25 $ 0.22 Expected volatility 30.67 % 34.50 % 42.71 % Risk-free interest rate 1.89 % 1.73 % 1.41 % Expected life (in years) 5.00 5.69 8.00 |
Summary of Stock Options Outstanding | The following is a summary of stock options vested and exercisable as of December 31, 2017 : Weighted Average Weighted Range of Number Remaining Average Exercise of Contractual Exercise Intrinsic Prices Shares Life Price Value (in thousands) $4.54 - 22.76 424,130 4.36 $ 12.41 $ 10,303 $23.57 - 32.85 107,456 8.31 30.10 709 $32.90 - 37.30 25,725 9.19 34.07 68 Total 557,311 5.35 $ 16.82 $ 11,080 The following is a summary of stock options vested and exercisable as of December 31, 2016 : Weighted Average Weighted Range of Number Remaining Average Exercise of Contractual Exercise Intrinsic Prices Shares Life Price Value (in thousands) $4.54 - 20.92 338,308 4.75 $ 8.03 $ 8,465 $20.96 - 26.50 71,928 8.56 22.50 759 Total 410,236 5.42 $ 10.57 $ 9,224 The following is a summary of stock options vested and exercisable as of December 31, 2015 : Weighted Average Weighted Range of Number Remaining Average Exercise of Contractual Exercise Intrinsic Prices Shares Life Price Value (in thousands) $4.31 - 8.65 421,237 4.89 $ 7.04 $ 6,814 $8.70 - 22.76 27,134 7.82 15.31 215 Total 448,371 5.07 $ 7.54 $ 7,029 |
Summary of Stock Option Activity | A summary of option activity under the plans is as follows: Weighted Average Exercise Options Shares Price Outstanding at December 31, 2016 1,450,704 $ 21.33 Granted 410,960 34.46 Exercised (189,415 ) 11.93 Forfeited or Expired (105,140 ) 29.93 Outstanding at December 31, 2017 1,567,109 $ 25.27 Exercisable at December 31, 2017 557,311 $ 16.82 |
Summary of Unvested Restricted Stock Awards | A summary of the unvested restricted stock awards is as follows: Weighted Average Grant date Restricted stock Shares Fair Value Unvested at December 31, 2016 408,162 $ 20.47 Granted 124,126 33.97 Vested (170,434 ) 19.97 Forfeited (20,054 ) 22.09 Unvested at December 31, 2017 341,800 $ 25.52 |
Summary of Grant Date Fair Value of Awards During Period | 2017 2016 2015 Grant date fair value of awards during the period: (in thousands) Options $ 3,699 $ 6,102 $ 3,685 Restricted stock 4,217 3,147 2,985 Total $ 7,916 $ 9,249 $ 6,670 |
Summary of Share-Based Compensation Expense | 2017 2016 2015 Share-based compensation expense: (in thousands) Options $ 2,904 $ 1,681 $ 833 Restricted stock 3,554 2,676 2,058 Total $ 6,458 $ 4,357 $ 2,891 |
Summary of Income Tax Benefit Related to Share-Based Compensation | 2017 2016 2015 Income tax benefit related to share-based compensation: (in thousands) Options $ 1,413 $ 1,610 $ 2,165 Restricted stock 1,051 458 280 Total $ 2,464 $ 2,068 $ 2,445 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Share Repurchases | Our repurchase activity is as follows: 2017 2016 2015 Program Shares Total $ $ per share Shares Total $ $ per share Shares Total $ $ per share Open market 8,676 $ 283,654 $ 32.69 165,598 $ 4,440,658 $ 26.82 1,037,590 $ 24,999,963 $ 24.09 401(k) 467,580 16,336,084 34.94 540,501 14,875,850 27.52 512,754 11,557,598 22.54 Directors and employees 45,878 1,614,425 35.19 30,072 823,446 27.38 25,746 585,413 22.74 Total 522,134 $ 18,234,163 $ 34.92 736,171 $ 20,139,954 $ 27.36 1,576,090 $ 37,142,974 $ 23.57 Inception to Date Program Shares Total $ $ per share Open market 3,843,495 $ 61,232,115 $ 15.93 401(k) 6,550,023 82,068,805 12.53 Directors and employees 1,919,510 17,278,033 9.00 Total 12,313,028 $ 160,578,953 $ 13.04 |
Schedule of Dividends | Our recent dividends are as follows: Declaration Date Record Date Payment Date Dividend per Share May 19, 2015 June 12, 2015 July 1, 2015 $0.11 October 29, 2015 December 2, 2015 December 23, 2015 $0.11 May 24, 2016 June 10, 2016 July 1, 2016 $0.11 November 9, 2016 December 2, 2016 December 23, 2016 $0.13 May 16, 2017 June 9, 2017 July 7, 2017 $0.13 November 7, 2017 November 30, 2017 December 21, 2017 $0.13 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share Table | The following table sets forth the computation of basic and diluted earnings per share: 2017 2016 2015 Numerator: (in thousands, except share and per share data) Net income $ 54,498 $ 53,376 $ 45,728 Denominator: Basic weighted average shares 52,572,496 52,924,398 54,045,841 Effect of dilutive stock options and restricted stock 506,238 525,356 435,643 Diluted weighted average shares 53,078,734 53,449,754 54,481,484 Earnings per share: Basic $ 1.04 $ 1.01 $ 0.85 Dilutive $ 1.03 $ 1.00 $ 0.84 Anti-dilutive shares: Shares 785,825 469,603 146,548 |
Related Parties (Tables)
Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Following is a summary of transactions and balance with affiliates: Years Ending December 31, 2017 2016 2015 (in thousands) Sales to affiliates $ 1,579 $ 1,671 $ 1,532 Payments to affiliates 432 697 841 December 31, 2017 2016 (in thousands) Due from affiliates $ 9 $ 10 Due to affiliates — — |
Quarterly Results (Unaudited) (
Quarterly Results (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations | The following is a summary of the quarterly results of operations for the years ending December 31, 2017 and 2016 : Quarter First Second Third Fourth (in thousands, except per share data) 2017 Net sales $ 86,078 $ 101,326 $ 113,668 $ 104,160 Gross profit 24,986 31,678 35,658 31,075 Net income 10,217 13,794 14,717 15,770 Earnings per share: Basic $ 0.19 $ 0.26 $ 0.28 $ 0.30 Diluted $ 0.19 $ 0.26 $ 0.28 $ 0.30 2016 Net sales $ 85,422 $ 102,319 $ 104,568 $ 91,668 Gross profit 25,731 32,747 33,092 26,510 Net income 11,551 14,725 15,682 11,420 Earnings per share: Basic $ 0.22 $ 0.28 $ 0.30 $ 0.22 Diluted $ 0.22 $ 0.27 $ 0.29 $ 0.21 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)customer | Dec. 31, 2016USD ($)customer | Dec. 31, 2015USD ($)customer | |
Schedule of Accounting Policies [Line Items] | |||
Investments in certificates of deposit | $ 2,900 | $ 5,500 | |
Certificates of deposit interest rate, lower range | 0.95% | ||
Certificates of deposit interest rate, upper range | 1.10% | ||
Investments held to maturity | $ 6,077 | 14,083 | |
Research and development costs | 13,000 | 12,000 | $ 7,500 |
Advertising expense | 1,700 | 1,400 | 1,200 |
Shipping and handling fees | 11,400 | 10,300 | 9,600 |
Payments to representatives | $ 51,800 | $ 55,000 | $ 55,400 |
Extended product warranties, minimum length | 6 months | ||
Extended product warranties, maximum length | 10 years | ||
Foreign Sales Revenue, Net | |||
Schedule of Accounting Policies [Line Items] | |||
Concentration risk, percentage | 4.00% | 4.00% | 4.00% |
Sales Revenue, Net | |||
Schedule of Accounting Policies [Line Items] | |||
Number of major customers | customer | 1 | 1 | 1 |
Accounting for More Than 5% of Accounts Receivable | |||
Schedule of Accounting Policies [Line Items] | |||
Number of major customers | 0 | 0 | |
Concentration risk, percentage | 5.00% | 5.00% | |
Minimum | |||
Schedule of Accounting Policies [Line Items] | |||
Certificates of deposit maturity dates | 1 month | ||
Investments maturity date | 1 month | ||
Maximum | |||
Schedule of Accounting Policies [Line Items] | |||
Certificates of deposit maturity dates | 5 months | ||
Investments maturity date | 4 months |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Summary of Investments Held to Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Gain (Loss) on Investments [Line Items] | ||
Amortized Cost | $ 6,077 | $ 14,083 |
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized (Loss) | (6) | (12) |
Fair Value | 6,071 | 14,071 |
Held-to-maturity Securities, Noncurrent | 0 | 0 |
Current Assets | ||
Gain (Loss) on Investments [Line Items] | ||
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized (Loss) | (6) | (12) |
Fair Value | 6,071 | 14,071 |
Non Current Assets | ||
Gain (Loss) on Investments [Line Items] | ||
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized (Loss) | 0 | 0 |
Fair Value | $ 0 | $ 0 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 40 years |
Machinery and Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Machinery and Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 15 years |
Furniture and Fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Furniture and Fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 7 years |
Accounts Receivable (Balance) (
Accounts Receivable (Balance) (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Accounts receivable | $ 50,457 | $ 43,091 |
Less: Allowance for doubtful accounts | (119) | (90) |
Total, net | $ 50,338 | $ 43,001 |
Accounts Receivable (Allowance)
Accounts Receivable (Allowance) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for doubtful accounts: | |||
Balance, beginning of period | $ 90 | $ 115 | $ 171 |
Provisions for losses on accounts receivables, net of adjustments | 179 | (25) | (48) |
Accounts receivable written off, net of recoveries | (150) | 0 | (8) |
Balance, end of period | $ 119 | $ 90 | $ 115 |
Inventories - Components (Detai
Inventories - Components (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||||
Raw materials | $ 57,784 | $ 43,438 | ||
Work in process | 5,957 | 2,279 | ||
Finished goods | 8,163 | 3,017 | ||
Inventory, gross | 71,904 | 48,734 | ||
Less: Allowance for excess and obsolete inventories | (1,118) | (1,382) | $ (757) | $ (714) |
Total, net | $ 70,786 | $ 47,352 |
Inventories - Allowance (Detail
Inventories - Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for excess and obsolete inventories: | |||
Balance, beginning of period | $ 1,382 | $ 757 | $ 714 |
Provisions for excess and obsolete inventories | 102 | 625 | 178 |
Inventories written off | (366) | 0 | (135) |
Balance, end of period | $ 1,118 | $ 1,382 | $ 757 |
Note Receivable (Details)
Note Receivable (Details) $ in Thousands, CAD in Millions | Sep. 30, 2010CAD | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Note Receivable [Abstract] | |||
Note receivable | CAD 1.1 | $ 678 | $ 657 |
Term | 15 years | ||
Interest rate | 4.00% | ||
Balloon payment on note receivable | CAD 0.6 | ||
Balloon payment due date | October 2,025 |
Supplemental Cash Flow Inform48
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Supplemental disclosures: | |||
Interest paid | $ 0 | $ 0 | $ 0 |
Income taxes paid, net | 16,951 | 27,353 | 24,125 |
Non-cash investing and financing activities: | |||
Non-cash capital expenditures | $ 832 | $ 270 | $ 83 |
Warranties - Narrative (Details
Warranties - Narrative (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Guarantees [Abstract] | |
Product warranty accrual, minimum length | 18 months |
Product warranty accrual, maximum length | 25 years |
Warranties - Changes in Warrant
Warranties - Changes in Warrants (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Warranty accrual: | |||
Balance, beginning of period | $ 7,936 | $ 8,469 | $ 8,130 |
Payments made | (8,686) | (4,134) | (3,978) |
Provisions | 11,233 | 3,601 | 4,317 |
Balance, end of period | 10,483 | 7,936 | 8,469 |
Warranty expense | $ 11,233 | $ 3,601 | $ 4,317 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Warranty | $ 10,483 | $ 7,936 |
Due to representatives | 13,086 | 9,907 |
Payroll | 4,456 | 4,129 |
Profit sharing | 2,034 | 1,967 |
Workers' compensation | 593 | 580 |
Medical self-insurance | 725 | 872 |
Customer prepayments | 2,838 | 2,256 |
Donations | 588 | 600 |
Employee vacation time | 2,688 | 2,367 |
Other | 1,607 | 1,326 |
Total | $ 39,098 | $ 31,940 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) | 12 Months Ended | |
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Line of Credit Facility [Line Items] | ||
Actual net worth for compliance | $ 237,200,000 | |
Minimum net worth required for compliance | $ 125,000,000 | |
Ratio of total liability to net worth | 0.3 | |
Maximum ratio of total liability to net worth for compliance | 2 | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Credit facility maximum borrowings | $ 30,000,000 | |
Standby letter of credit | 800,000 | |
Borrowings available under the revolving credit facility | $ 29,200,000 | |
Frequency of periodic payments | monthly | |
Fees associated with unused portion of committed amount | $ 0 | |
Borrowings outstanding under revolving credit facility | $ 0 | $ 0 |
Weighted average interest rate | 3.50% | 3.00% |
Revolving Credit Facility | LIBOR | ||
Line of Credit Facility [Line Items] | ||
Stated percentage | 2.50% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) $ in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Income Tax Disclosure [Abstract] | ||
Doubling bonus depreciation for five years, percent | 100.00% | 100.00% |
Tax Cuts and Jobs Act of 2017, income tax benefit | $ 4.4 | |
Tax Cuts and Jobs Act of 2017, Change in tax rate, bonus depreciation | 3.2 | |
Executive compensation limitation | $ 1 | $ 1 |
Minimum | ||
Income Tax Contingency [Line Items] | ||
Deduction to effective income tax rate, percent | 3.00% | |
Maximum | ||
Income Tax Contingency [Line Items] | ||
Deduction to effective income tax rate, percent | 4.00% |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Current | $ 21,548 | $ 25,790 | $ 24,439 |
Deferred | (1,554) | 825 | 1,172 |
Total | $ 19,994 | $ 26,615 | $ 25,611 |
Income Taxes - Federal Statutor
Income Taxes - Federal Statutory Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal benefit | 5.00% | 5.00% | 5.00% |
Effective Income Tax Rate Reconciliation, Remeasurement of Deferred Taxes, Percent | (6.00%) | (0.00%) | (0.00%) |
Domestic manufacturing deduction | (3.00%) | (3.00%) | (3.00%) |
Excess tax benefits | (3.00%) | (3.00%) | 0.00% |
Other | (1.00%) | (1.00%) | (1.00%) |
Total | 27.00% | 33.00% | 36.00% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Net long-term deferred assets and (liabilities) relating to: | ||
Accounts receivable and inventory reserves | $ 318 | $ 587 |
Warranty accrual | 2,698 | 3,165 |
Other accruals | 1,395 | 1,715 |
Share-based compensation | 1,432 | 1,784 |
Donations | 152 | 463 |
Other, net | 698 | 738 |
Total deferred income tax assets | 6,693 | 8,452 |
Property & equipment | (14,670) | (17,983) |
Total deferred income tax liabilities | (14,670) | (17,983) |
Net deferred income tax liabilities | $ 7,977 | $ 9,531 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) $ in Thousands | May 24, 2016 | May 22, 2007 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock authorized to be issued under plan (in shares) | 3,800,000 | ||||
Unrecognized pre-tax compensation cost | $ 8,300 | ||||
Weighted average recognition period (in years) | 2 years 3 months 15 days | ||||
Total intrinsic value of options exercised during period | $ 4,500 | $ 4,900 | $ 7,400 | ||
Cash received from options exercised during period | 2,259 | $ 2,063 | $ 2,795 | ||
2007 Long-Term Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock authorized to be issued under plan (in shares) | 400,000 | 3,300,000 | |||
Exercise price of shares granted may not be less than fair market value (percentage) | 100.00% | ||||
2007 Long-Term Incentive Plan | Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized pre-tax compensation cost | $ 6,500 | ||||
Weighted average recognition period (in years) | 1 year 10 months 6 days | ||||
Annual vesting, percentage | 20.00% | ||||
2016 Long-Term Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock authorized to be issued under plan (in shares) | 3,400,000 | ||||
Exercise price of shares granted may not be less than fair market value (percentage) | 100.00% |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Assumptions (Details) - 2007 Long-Term Incentive Plan | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Director and Officers | |||
Expected dividend yield | 26.00% | 22.00% | 18.00% |
Expected volatility | 30.81% | 41.19% | 44.14% |
Risk-free interest rate | 1.90% | 2.00% | 1.97% |
Expected life (in years) | 5 years | 7 years 8 months 5 days | 8 years |
Employees | |||
Expected dividend yield | 26.00% | 25.00% | 22.00% |
Expected volatility | 30.67% | 34.50% | 42.71% |
Risk-free interest rate | 1.89% | 1.73% | 1.41% |
Expected life (in years) | 5 years | 5 years 8 months 9 days | 8 years |
Share-Based Compensation - Su59
Share-Based Compensation - Summary of Stock Options Outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of shares vested and exercisable | 557,311 | 410,236 | 448,371 |
Options vested and exercisable weighted average remaining contractual life | 5 years 4 months 6 days | 5 years 5 months 1 day | 5 years 26 days |
Options vested and exercisable weighted average exercise price | $ 16.82 | $ 10.57 | $ 7.54 |
Options vested and exercisable intrinsic value | $ 11,080 | $ 9,224 | $ 7,029 |
$4.54 - 22.76 | |||
Range of exercise prices, lower range | $ 4.54 | ||
Range of exercise prices, upper range | $ 22.76 | ||
Number of shares vested and exercisable | 424,130 | ||
Options vested and exercisable weighted average remaining contractual life | 4 years 4 months 10 days | ||
Options vested and exercisable weighted average exercise price | $ 12.41 | ||
Options vested and exercisable intrinsic value | $ 10,303 | ||
$23.57 - 32.85 | |||
Range of exercise prices, lower range | $ 23.57 | ||
Range of exercise prices, upper range | $ 32.85 | ||
Number of shares vested and exercisable | 107,456 | ||
Options vested and exercisable weighted average remaining contractual life | 8 years 3 months 22 days | ||
Options vested and exercisable weighted average exercise price | $ 30.10 | ||
Options vested and exercisable intrinsic value | $ 709 | ||
$32.90 - 37.30 | |||
Range of exercise prices, lower range | $ 32.90 | ||
Range of exercise prices, upper range | $ 37.30 | ||
Number of shares vested and exercisable | 25,725 | ||
Options vested and exercisable weighted average remaining contractual life | 9 years 2 months 9 days | ||
Options vested and exercisable weighted average exercise price | $ 34.07 | ||
Options vested and exercisable intrinsic value | $ 68 | ||
$4.54 - 20.92 | |||
Range of exercise prices, lower range | $ 4.54 | ||
Range of exercise prices, upper range | $ 20.92 | ||
Number of shares vested and exercisable | 338,308 | ||
Options vested and exercisable weighted average remaining contractual life | 4 years 9 months | ||
Options vested and exercisable weighted average exercise price | $ 8.03 | ||
Options vested and exercisable intrinsic value | $ 8,465 | ||
$20.96 - 26.50 | |||
Range of exercise prices, lower range | $ 20.96 | ||
Range of exercise prices, upper range | $ 26.50 | ||
Number of shares vested and exercisable | 71,928 | ||
Options vested and exercisable weighted average remaining contractual life | 8 years 6 months 22 days | ||
Options vested and exercisable weighted average exercise price | $ 22.50 | ||
Options vested and exercisable intrinsic value | $ 759 | ||
$4.31 - 8.65 | |||
Range of exercise prices, lower range | $ 4.31 | ||
Range of exercise prices, upper range | $ 8.65 | ||
Number of shares vested and exercisable | 421,237 | ||
Options vested and exercisable weighted average remaining contractual life | 4 years 10 months 21 days | ||
Options vested and exercisable weighted average exercise price | $ 7.04 | ||
Options vested and exercisable intrinsic value | $ 6,814 | ||
$8.70 - 22.76 | |||
Range of exercise prices, lower range | $ 8.70 | ||
Range of exercise prices, upper range | $ 22.76 | ||
Number of shares vested and exercisable | 27,134 | ||
Options vested and exercisable weighted average remaining contractual life | 7 years 9 months 26 days | ||
Options vested and exercisable weighted average exercise price | $ 15.31 | ||
Options vested and exercisable intrinsic value | $ 215 |
Share-Based Compensation - Su60
Share-Based Compensation - Summary of Stock Option Activity (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Shares | |
Outstanding, beginning of period (in shares) | shares | 1,450,704 |
Granted (in shares) | shares | 410,960 |
Exercised (in shares) | shares | (189,415) |
Forfeited or Expired (in shares) | shares | (105,140) |
Outstanding, end of period (in shares) | shares | 1,567,109 |
Exercisable, end of period (in shares) | shares | 557,311 |
Weighted Average Exercise Price | |
Outstanding, beginning of period (weighted average exercise price) | $ / shares | $ 21.33 |
Granted (weighted average exercise price) | $ / shares | 34.46 |
Exercised (weighted average exercise price) | $ / shares | 11.93 |
Forfeited or Expired (weighted average exercise price) | $ / shares | 29.93 |
Outstanding, end of period (weighted average exercise price) | $ / shares | 25.27 |
Exercisable, end of period (weighted average exercise price) | $ / shares | $ 16.82 |
Share-Based Compensation - Su61
Share-Based Compensation - Summary of Unvested Restricted Stock Awards (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Unvested, beginning of period (in shares) | shares | 408,162 |
Granted (in shares) | shares | 124,126 |
Vested (in shares) | shares | (170,434) |
Forfeited (in shares) | shares | (20,054) |
Unvested, end of period (in shares) | shares | 341,800 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Unvested, beginning of period (weighted average grant date fair value) | $ / shares | $ 20.47 |
Granted (weighted average grant date fair value) | $ / shares | 33.97 |
Vested (weighted average grant date fair value) | $ / shares | 19.97 |
Forfeited (weighted average grant date fair value) | $ / shares | 22.09 |
Unvested, end of period (weighted average grant date fair value) | $ / shares | $ 25.52 |
Share-Based Compensation - Su62
Share-Based Compensation - Summary of Grant Date Fair Value of Awards (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Options | $ 3,699 | $ 6,102 | $ 3,685 |
Restricted stock | 4,217 | 3,147 | 2,985 |
Total | $ 7,916 | $ 9,249 | $ 6,670 |
Share-Based Compensation - Su63
Share-Based Compensation - Summary of Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Options | $ 2,904 | $ 1,681 | $ 833 |
Restricted stock | 3,554 | 2,676 | 2,058 |
Total | $ 6,458 | $ 4,357 | $ 2,891 |
Share-Based Compensation - Su64
Share-Based Compensation - Summary of Income Tax Benefit Related to Share-Based Compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Options | $ 1,413 | $ 1,610 | $ 2,165 |
Restricted stock | 1,051 | 458 | 280 |
Total | $ 2,464 | $ 2,068 | $ 2,445 |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Definedcontributionemployeeautomaticcontributionpercentag | 6.00% | ||
Company 401K plan contribution (percentage) | 3.00% | ||
Employer matching contribution, percent of match | 100.00% | ||
Maximum annual contributions per employee, percent | 6.00% | ||
Employee salary deferral contributions percentage vested | 100.00% | ||
Employer contribution annual vesting percentage | 20.00% | ||
Employer matching contributions | $ 6,100 | $ 5,900 | $ 9,000 |
Administrative expenses | $ 0 | 0 | 100 |
Profits sharing, percent of pre-tax profit paid to eligible employees on quarterly basis | 10.00% | ||
Profit sharing expense | $ 8,400 | $ 9,000 | $ 8,000 |
Effective January 1, 2016 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Company 401K plan contribution (percentage) | 3.00% | ||
Employer matching contribution, percent of match | 175.00% | ||
Maximum annual contributions per employee, percent | 6.00% | ||
Over Two Years | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Company 401K plan contribution (percentage) | 3.00% |
Shareholders' Equity (Details)
Shareholders' Equity (Details) | Nov. 09, 2016$ / shares | May 24, 2016USD ($)$ / shares | Oct. 29, 2015$ / shares | May 19, 2015$ / sharesshares | Nov. 04, 2014$ / shares | Jul. 16, 2014 | May 02, 2014$ / shares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Jun. 02, 2016USD ($)shares |
Schedule of Shareholders' Equity [Line Items] | ||||||||||||||
Stock repurchased during period (in shares) | shares | 522,134 | 736,171 | 1,576,090 | 12,313,028 | ||||||||||
Aggregate price of shares repurchased since inception | $ | $ 18,234,163 | $ 20,139,954 | $ 37,142,974 | $ 160,578,953 | ||||||||||
Average price of shares repurchased since inception (per share) | $ / shares | $ 34.92 | $ 27.36 | $ 23.57 | $ 13.04 | ||||||||||
Dividends declared (per share) | $ / shares | $ 0.26 | $ 0.24 | $ 0.22 | |||||||||||
Stock split, conversion ratio | 1.5 | |||||||||||||
Cash dividends paid | $ | $ 13,700,000 | $ 12,700,000 | $ 11,900,000 | |||||||||||
Regular Semi-Annual Dividend | ||||||||||||||
Schedule of Shareholders' Equity [Line Items] | ||||||||||||||
Dividends declared (per share) | $ / shares | $ 0.13 | $ 0.13 | $ 0.13 | $ 0.11 | $ 0.11 | $ 0.11 | ||||||||
2010 Stock Repurchase Program [Member] | ||||||||||||||
Schedule of Shareholders' Equity [Line Items] | ||||||||||||||
Stock repurchase program amount authorized (in shares) | shares | 5,700,000 | 2,000,000 | ||||||||||||
Stock repurchase program amount authorized, value | $ | $ 25,000,000 | $ 25,000,000 | ||||||||||||
Stock repurchased during period (in shares) | shares | 8,676 | 165,598 | 1,037,590 | 3,843,495 | ||||||||||
Aggregate price of shares repurchased since inception | $ | $ 283,654 | $ 4,440,658 | $ 24,999,963 | $ 61,232,115 | ||||||||||
Average price of shares repurchased since inception (per share) | $ / shares | $ 32.69 | $ 26.82 | $ 24.09 | $ 15.93 | ||||||||||
2005 401(k) Stock Repurchase Program [Member] | ||||||||||||||
Schedule of Shareholders' Equity [Line Items] | ||||||||||||||
Stock repurchased during period (in shares) | shares | 467,580 | 540,501 | 512,754 | 6,550,023 | ||||||||||
Aggregate price of shares repurchased since inception | $ | $ 16,336,084 | $ 14,875,850 | $ 11,557,598 | $ 82,068,805 | ||||||||||
Average price of shares repurchased since inception (per share) | $ / shares | $ 34.94 | $ 27.52 | $ 22.54 | $ 12.53 | ||||||||||
2006 Director and Officer Repurchase Program [Member] | ||||||||||||||
Schedule of Shareholders' Equity [Line Items] | ||||||||||||||
Stock repurchased during period (in shares) | shares | 45,878 | 30,072 | 25,746 | 1,919,510 | ||||||||||
Aggregate price of shares repurchased since inception | $ | $ 1,614,425 | $ 823,446 | $ 585,413 | $ 17,278,033 | ||||||||||
Average price of shares repurchased since inception (per share) | $ / shares | $ 35.19 | $ 27.38 | $ 22.74 | $ 9 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 15,770 | $ 14,717 | $ 13,794 | $ 10,217 | $ 11,420 | $ 15,682 | $ 14,725 | $ 11,551 | $ 54,498 | $ 53,376 | $ 45,728 |
Basic weighted average shares | 52,572,496 | 52,924,398 | 54,045,841 | ||||||||
Effect of dilutive stock options and restricted stock | 506,238 | 525,356 | 435,643 | ||||||||
Diluted weighted average shares | 53,078,734 | 53,449,754 | 54,481,484 | ||||||||
Basic (usd per share) | $ 0.30 | $ 0.28 | $ 0.26 | $ 0.19 | $ 0.22 | $ 0.30 | $ 0.28 | $ 0.22 | $ 1.04 | $ 1.01 | $ 0.85 |
Diluted (usd per share) | $ 0.30 | $ 0.28 | $ 0.26 | $ 0.19 | $ 0.21 | $ 0.29 | $ 0.27 | $ 0.22 | $ 1.03 | $ 1 | $ 0.84 |
Anti-dilutive shares (in shares) | 785,825 | 469,603 | 146,548 |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |||
Sales to affiliates | $ 1,579 | $ 1,671 | $ 1,532 |
Payments to affiliates | 432 | 697 | $ 841 |
Due from affiliates | 9 | 10 | |
Due to affiliates | $ 0 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - shares | Feb. 09, 2018 | Jan. 02, 2018 | Dec. 31, 2017 |
Subsequent Event [Line Items] | |||
Granted (in shares) | 124,126 | ||
Granted (in shares) | 410,960 | ||
Subsequent Event | Restricted Stock | |||
Subsequent Event [Line Items] | |||
Granted (in shares) | 19,100 | 37,700 | |
Subsequent Event | Stock Option | Senior Management | |||
Subsequent Event [Line Items] | |||
Granted (in shares) | 433,400 | ||
Subsequent Event | Stock Option | Employees | |||
Subsequent Event [Line Items] | |||
Granted (in shares) | 921,700 |
Quarterly Results (Unaudited)70
Quarterly Results (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 104,160 | $ 113,668 | $ 101,326 | $ 86,078 | $ 91,668 | $ 104,568 | $ 102,319 | $ 85,422 | $ 405,232 | $ 383,977 | $ 358,632 |
Gross profit | 31,075 | 35,658 | 31,678 | 24,986 | 26,510 | 33,092 | 32,747 | 25,731 | 123,397 | 118,080 | 108,681 |
Net income | $ 15,770 | $ 14,717 | $ 13,794 | $ 10,217 | $ 11,420 | $ 15,682 | $ 14,725 | $ 11,551 | $ 54,498 | $ 53,376 | $ 45,728 |
Earnings per share: | |||||||||||
Basic (usd per share) | $ 0.30 | $ 0.28 | $ 0.26 | $ 0.19 | $ 0.22 | $ 0.30 | $ 0.28 | $ 0.22 | $ 1.04 | $ 1.01 | $ 0.85 |
Diluted (usd per share) | $ 0.30 | $ 0.28 | $ 0.26 | $ 0.19 | $ 0.21 | $ 0.29 | $ 0.27 | $ 0.22 | $ 1.03 | $ 1 | $ 0.84 |