SIOUX FALLS, S.D., March 8 /PRNewswire-FirstCall/ -- Raven Industries,
Inc. (Nasdaq: RAVN) today reported record sales and earnings for its fiscal
year ended January 31, 2006, demonstrating, it said, "the strength of a
business model capable of driving high-margin sales and capital-efficient
growth." Net sales rose 22 percent to $204.5 million while net income for the
year climbed 36 percent to $24.3 million, or $1.32 per share fully diluted,
from $17.9 million, or 97 cents per share. In releasing results, Raven noted
that this is the fiftieth year it has been in business, recording a profit in
every year except the first one.
For the fourth quarter, total net sales were up 24 percent to
$54.4 million while net income jumped 50 percent to $5.5 million, or 30 cents
per share fully diluted vs. 20 cents in the year-earlier fourth quarter.
Segment Performance
Flow Controls Division (FCD) had a good year as it gained the benefit of
investments in new products and new markets. Sales for the fiscal year rose 17
percent to $47.5 million while operating income increased 29 percent to $13.6
million. The prior year's results included a $1.3 million write-down of an
acquisition. Absent this charge, operating income increased 15 percent. In the
fourth quarter, FCD sales, hampered by a weakening agricultural economy,
increased only four percent to $10.2 million while operating income rose 36
percent to $2.7 million. Explained President and CEO Ronald M. Moquist, "We
made some sizable investments in research and development projects in the
year-ago quarter as well as in our precision-ag marketing initiative."
Engineered Films Division (EFD) produced a 41 percent climb in sales to
$82.8 million for the full year while operating income rose 26 percent to
$19.9 million. Gross profit margins declined from 31% to 28% due to the
volatility of raw material costs. "Here we continue to invest in plant and
equipment, developing specialty multi-layer film products and branching out
into new domestic markets," Moquist noted. Raven announced it expected to
spend more than $13 million to expand EFD's product capabilities during the
current fiscal year. For the fourth quarter, sales were up 45 percent to
$26.1 million and operating income rose 38 percent to $6.0 million. Higher
oilfield pit-lining and construction sales accounted for most of the fourth-
quarter revenue increase; disaster film sales also saw double-digit percentage
growth.
Electronic Systems Division (ESD) sales for the year increased 19 percent
to $56.2 million while operating income nearly doubled, up 98 percent to
$8.9 million. Growth is being driven by increased demand from Fortune 500
companies that seek the manufacturing capabilities of a reliable source and
Raven's continued investment in advanced manufacturing technology. For the
final quarter of the year, sales rose 14 percent to $13.9 million while
operating income jumped 44 percent to $2.0 million.
Aerostar sales for the year declined 17 percent to $18.0 million while the
division's operating income declined 41 percent to $2.1 million. Sales in the
fourth quarter increased five percent to $4.2 million with an operating loss
of $29,000 for the final quarter of the year compared to a $97,000 operating
loss a year earlier. Management expected to finish the year on a stronger
note, but some of its business in the final quarter, particularly government-
uniform contracts in the start-up phase, carried low margins.
Balance Sheet
The company's cash and investment balances were $11.4 million at January
31, 2006, vs. $9.6 million at the end of the previous fiscal year. Operating
cash flows for the 12 months totaled $21.2 million compared to $18.9 million
for the previous 12-month period primarily as a result of higher earnings.
Cash used in investing activities increased from $7.6 million to $11.4 million
due primarily to investments in new capacity for Engineered Films and the
February 2005 acquisition of Montgomery Industries, developer of the
Autoboom(TM) automatic boom-height control system for agricultural sprayers.
Dividends in the prior fiscal year included a special $11.3 million dividend
paid in May 2004. Regular quarterly dividends in fiscal 2006 were up 27
percent over the previous fiscal year's levels.
Outlook
CEO Moquist commented on the company's prospects for the coming fiscal
year. "We are continuing to invest heavily in equipment for Engineered Films
and in product development and marketing for Flow Controls," he said. "These
divisions will be our growth drivers for the coming years despite what we see
as softening demand for agricultural equipment in the current year," he added.
The CEO indicated the company expects to beat the record performance of the
year just ended both in sales and earnings. "We will need to execute well, but
we think demand for films will continue to be strong and we have opportunities
in precision agriculture."
About Raven Industries, Inc.
Raven is an industrial manufacturer that provides electronics
manufacturing services, reinforced plastic sheeting and flow control devices
to various markets.
CONFERENCE CALL INFORMATION
Raven has scheduled a conference call today at 2:00 p.m. Central Time to
discuss its fourth quarter and fiscal 2006 performance and related trends in
its business. To access this call, log on to http://www.ravenind.com or
http://www.vcall.com 15 minutes before the call to download the necessary
software. Replays will be available through this website for 90 days.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this report are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, including statements regarding the expectations, beliefs, intentions
or strategies regarding the future. Without limiting the foregoing, the words
"anticipates, "believes," "expects," "intends," "may," "plans" and similar
expressions are intended to identify forward-looking statements. The Company
intends that all forward-looking statements be subject to the safe harbor
provisions of the Private Securities Litigation Reform Act. Although the
Company believes that the expectations reflected in such forward-looking
statements are based on reasonable assumptions, there is no assurance that
such assumptions are correct or that these expectations will be achieved.
Such assumptions involve important risks and uncertainties that could
significantly affect results in the future. These risks and uncertainties
include, but are not limited to, those relating to weather conditions, which
could affect certain of the Company's primary markets, such as agriculture and
construction, or changes in competition, raw material availability, technology
or relationships with the Company's largest customers, any of which could
adversely impact any of the Company's product lines. The foregoing list is not
exhaustive and the company disclaims any obligation to subsequently revise any
forward-looking statements to reflect events or circumstances after the date
of such statements.
On the Internet, information is available at http://www.ravenind.com , the
company's website.
SIC Codes: 3672, 3081, 3829
FINANCIAL TABLES FOLLOW ...
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except earnings per share)
Three Months Ended Twelve Months Ended
January 31 January 31
Fav Fav
(Unfav) (Unfav)
2006 2005 Change 2006 2005 Change
Net sales $54,385 $44,004 24% $204,528 $168,086 22%
Cost of goods sold 41,410 34,203 151,297 124,886
Gross profit 12,975 9,801 32% 53,231 43,200 23%
Selling, general and
administrative
expenses 4,694 4,140 15,947 14,056
Loss on disposition
of businesses and
assets - - - 1,282
Operating income 8,281 5,661 46% 37,284 27,862 34%
Other income, net (89) (27) (210) (93)
Income before income
taxes 8,370 5,688 47% 37,494 27,955 34%
Income taxes 2,908 2,048 13,232 10,064
Net income $5,462 $3,640 50% $24,262 $17,891 36%
Net income per common
share:
-basic $0.30 $0.20 50% $1.34 $0.99 35%
-diluted $0.30 $0.20 50% $1.32 $0.97 36%
Weighted average
common shares
outstanding:
-basic 18,072 18,015 18,055 18,066
-diluted 18,325 18,342 18,315 18,410
RAVEN INDUSTRIES, INC.
SALES AND OPERATING INCOME BY SEGMENT
(In thousands)
Three Months Ended Twelve Months Ended
January 31 January 31
Fav Fav
(Unfav) (Unfav)
2006 2005 Change 2006 2005 Change
Net Sales:
Flow Controls $10,247 $9,887 4% $47,506 $40,726 17%
Engineered Films 26,060 17,912 45% 82,794 58,657 41%
Electronic Systems 13,906 12,220 14% 56,219 47,049 19%
Aerostar 4,172 3,985 5% 18,009 21,654 (17)%
Total Company $54,385 $44,004 24% $204,528 $168,086 22%
Operating Income:
Flow Controls $2,652 $1,950 36% $13,586 $10,516 29%
Engineered Films 5,972 4,326 38% 19,907 15,739 26%
Electronic Systems 2,002 1,388 44% 8,916 4,492 98%
Aerostar (29) (97) 70% 2,133 3,609 (41)%
Total Segment
Income 10,597 7,567 44,542 34,356
Corporate Expenses (2,316) (1,906) (22)% (7,258) (6,494) (12)%
Total Company $8,281 $5,661 46% $37,284 $27,862 34%
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
January 31 January 31
2006 2005
ASSETS
Cash, cash equivalents and short-term
investments $11,409 $9,619
Accounts receivable, net 29,290 25,370
Inventories 27,819 23,315
Prepaid expenses and other current assets 2,827 3,288
Total current assets 71,345 61,592
Property, plant and equipment, net 25,602 19,964
Other assets, net 9,210 6,953
$106,157 $88,509
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $8,179 $10,322
Accrued and other liabilities 11,871 10,628
Total current liabilities 20,050 20,950
Other liabilities 1,718 1,477
Shareholders' equity 84,389 66,082
$106,157 $88,509
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED CASH FLOWS
(In thousands)
Twelve Months Ended January 31
2006 2005
Cash flows from operating activities
Net income $24,262 $17,891
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 5,151 3,841
Deferred income taxes (809) (31)
Loss on disposition of businesses and
assets 79 1,282
Other operating activities, net (7,494) (4,112)
Net cash provided by operating activities 21,189 18,871
Cash flows from investing activities
Capital expenditures (10,358) (7,541)
Acquisition of businesses (2,828) (414)
Other investing activities, net 1,751 324
Net cash used in investing activities (11,435) (7,631)
Cash flows from financing activities
Dividends paid (5,056) (15,298)
Purchase of treasury stock (1,689) (3,519)
Long-term debt principal payments (63) (72)
Other financing activities, net (138) (174)
Net cash used in financing activities (6,946) (19,063)
Effect of exchange rate changes on cash (18) -
Net increase (decrease) in cash and
cash equivalents 2,790 (7,823)
Cash and cash equivalents at
beginning of period 6,619 14,442
Cash and cash equivalents at end of period 9,409 6,619
Short-term investments 2,000 3,000
Cash, cash equivalents and short-term
investments $11,409 $9,619
SOURCE Raven Industries, Inc.
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Related links:
http://www.ravenind.com
CONTACT:
Tom Iacarella, Vice President & CFO of Raven
Industries, Inc., +1-605-336-2750; or Dennis Waite, General
Inquiries, +1-708-246-6265, or Leslie Loyet, Analyst Inquiries,
+1-312-640-6672, or Tim Grace, Media Inquiries, +1-312-640-6741,
all of Financial Relations Board
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