SIOUX FALLS, S.D., March 9 /PRNewswire-FirstCall/ -- Reporting strong
results in its Engineered Films and Flow Controls divisions, Raven Industries,
Inc. (Nasdaq: RAVN) today announced record sales and earnings for its fourth
quarter and full year ended January 31, 2005. Net income for the fourth
quarter climbed 41 percent to $3.6 million from $2.6 million, or 20 cents per
share, versus the year-earlier's 14 cents, adjusted for a 2-for-1 stock split
in October 2004. Total sales for the industrial manufacturer's fourth quarter
rose 31 percent to $44 million.
Demand for the Engineered Films Division's hurricane film continued during
the quarter. Fourth- quarter shipments of approximately $5 million were
higher than initially expected, and continued into February 2005. Full-year
shipments of hurricane film topped $9 million.
For the 12 months, Raven reported that net earnings increased 29 percent
to $17.9 million, or 97 cents per share, from $13.8 million, or 75 cents per
share, in the prior fiscal year. Total sales for fiscal 2005 were up 18
percent to $168 million.
President and CEO Ronald M. Moquist commented that "during the past year
we continued to build a solid platform for success -- one that further
strengthens our four core businesses and sets the stage for long-term
profitable growth. It's a model driven by new products, expanded markets and
advanced manufacturing equipment which adds new capabilities and capacity."
The company also projected double-digit earnings growth, based on continuing
agricultural demand for its precision agriculture products and carryover
demand for plastic sheeting, with another year of record sales and profits in
fiscal 2006.
Segment Performance
The Engineered Films Division (EFD) had an outstanding year, by far its
best ever. For the fourth quarter, sales increased 68 percent to $17.9
million; operating profit rose to $4.3 million, 70 percent higher than a year
ago. For the full year, sales were up 38 percent to $58.7 million from the
previous fiscal year while operating income rose 49 percent to $15.7 million
in fiscal 2005. Higher raw material costs were offset by selling price
increases, improved productivity and increased volume that optimized equipment
utilization. Raven continued to invest heavily in new extrusion equipment for
producing multi-layer specialty films because it believes opportunities for
high-margin growth will continue.
The Flow Controls Division (FCD) had another extraordinary performance.
For the fourth quarter, sales rose 63 percent to $9.9 million and operating
income of $2.0 million more than doubled. For the entire fiscal year ended
January 2005, sales climbed 16 percent to $40.7 million. Fiscal 2004 revenues
included $6 million of revenues from a special order for chemical-injection
systems. Full year operating income rose 27 percent to $10.5 million even
though it included a $1.3 million writedown of its Fluent Systems product
line. Internal and external factors contributed to this strong showing,
including a vigorous agricultural economy in the U.S. and new product
introductions.
"In this coming year, we plan to expand our international market presence
in Brazil and Argentina by opening a distribution warehouse and service
support center," Moquist said. "We believe our products are well suited to
the large-acreage farms and agricultural practices of these countries. Growth
prospects were also strengthened by our acquisition, in February 2005, of a
Canadian company that has developed an automatic boom height control system."
The Electronic Systems Division (ESD) fourth-quarter sales were relatively
flat at $12.2 million. Operating income declined 6 percent to $1.4 million.
The Division got off to a slow start in the first six months but performance
improved in the second half. ESD sales for fiscal 2005 climbed 6 percent to
$47.0 million. High startup costs with a major new client combined with lower
first-half sales to impact profits negatively. For the full year, ESD
operating profits declined 23 percent from the previous fiscal year, finishing
at $4.5 million. "The ESD business model of providing low-volume, high-mix
contract manufacturing services, coupled with strong customer service and
engineering support is still the most viable in this marketplace," Moquist
said.
Aerostar International reported fourth-quarter sales were down 16 percent
to $4.0 million while a $97,000 operating loss compared to an operating profit
of $582,000 one year earlier. The lower sales reflect a reduced shipping
schedule for army cargo parachutes. For all of fiscal 2005, sales rose 4
percent to $21.7 million while operating income climbed 17 percent to $3.6
million, with profits for the past fiscal year reflecting higher efficiencies
on its parachute contracts. Aerostar results now include the company's high-
altitude research balloon business, which was formerly part of the Engineered
Films Division. Moquist noted, "Government contracts don't come in on a
smooth, steady schedule. We have not yet received a follow-on contract for
parachutes, so sales will be reduced in the first half of this coming year."
Cash Flow and Balance Sheet
Cash and short-term investments reached $9.6 million at January 31, 2005,
despite a payout of $11.3 million in a special cash dividend on May 20, 2004.
Compared to January 31, 2004, inventory levels were up $6.6 million and
accounts receivable levels increased $6.9 million. The impact was partially
offset by higher accounts payable levels. The relatively high sales growth in
both EFD and FCD accounted for much of the fluctuation in working capital
levels; however, lower inventory turns in ESD were also a factor. Cash flows
from operating activities of $18.5 million were down from the $19.7 million
for the 12 months of the prior fiscal year.
Conference Call Information
Raven has scheduled a conference call today at 2:00 p.m. Central Time to
discuss its fiscal fourth quarter 2005 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.
About Raven Industries, Inc.
Raven is an industrial manufacturer that provides electronics
manufacturing services, reinforced plastic sheeting and flow control devices
to various markets.
Forward-Looking Statements
The Private Securities Litigation Reform Act provides a "safe harbor" for
forward-looking statements. Certain information included in this Press
Release and other materials filed or to be filed by the company with the
Securities and Exchange Commission (as well as information included in
statements made or to be made by the company) contains statements that are
forward-looking. Although the company believes that the expectations
reflected in such forward-looking statements are based on reasonable
assumptions, there is no assurance that such 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, 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.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except earnings per share)
Three Months Ended Twelve Months Ended
January 31 January 31
Fav Fav
(Unfav) (Unfav)
2005 2004 Change 2005 2004 Change
Net sales $44,004 $33,594 31 % $168,086 $142,727 18 %
Cost of goods sold 34,203 26,302 124,886 108,968
Gross profit 9,801 7,292 34 % 43,200 33,759 28 %
Selling, general, and
administrative
expenses 4,140 3,269 14,056 11,960
(Gain) loss on
disposition of
businesses and assets - (1) 1,282 173
Operating income 5,661 4,024 41 % 27,862 21,626 29 %
Other (income) expense (27) (34) (93) (90)
Income before income
taxes 5,688 4,058 40 % 27,955 21,716 29 %
Income taxes 2,048 1,470 10,064 7,880
Net income $3,640 $2,588 41 % $17,891 $13,836 29 %
Net income per common
share:
-basic $0.20 $0.14 43 % $0.99 $0.77 29 %
-diluted $0.20 $0.14 43 % $0.97 $0.75 29 %
Weighted average common
shares outstanding:
-basic 18,015 18,061 18,066 18,082
-diluted 18,342 18,457 18,410 18,490
RAVEN INDUSTRIES, INC.
SALES AND OPERATING INCOME BY SEGMENT (1)
(In thousands)
Three Months Ended Twelve Months Ended
January 31 January 31
Fav Fav
(Unfav) (Unfav)
2005 2004 Change 2005 2004 Change
Net Sales:
Flow Controls $9,887 $6,068 63 % $40,726 $35,059 16 %
Engineered Films 17,912 10,685 68 % 58,657 42,636 38 %
Electronic Systems 12,220 12,098 1 % 47,049 44,307 6 %
Aerostar 3,985 4,743 (16)% 21,654 20,725 4 %
Total Company $44,004 $33,594 31 % $168,086 $142,727 18 %
Operating Income (Loss):
Flow Controls $1,950 $966 102 % $10,516 $8,254 27 %
Engineered Films 4,326 2,544 70 % 15,739 10,563 49 %
Electronic Systems 1,388 1,472 (6)% 4,492 5,797 (23)%
Aerostar (97) 582 (117)% 3,609 3,092 17 %
Sold Businesses - - - (355)
Total Segment
Income 7,567 5,564 34,356 27,351
Corporate Expenses (1,906) (1,540) (24)% (6,494) (5,725) (13)%
Total Company $5,661 $4,024 41 % $27,862 $21,626 29 %
(1) The company's high-altitude research balloon operation, formerly in
the Engineered Films segment, is included with Aerostar results as a
result of a change in the company's organizational structure. Prior
year results have been reclassified to reflect this change.
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
January 31, January 31,
2005 2004
ASSETS
Cash, cash equivalents and short-term
investments $9,619 $18,442
Accounts receivable, net 25,370 18,454
Inventories 23,315 16,763
Prepaid expenses and other current
assets 3,288 2,051
Total current assets 61,592 55,710
Property, plant and equipment, net 19,964 15,950
Other assets, net 6,953 7,848
$88,509 $79,508
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $57 $72
Accounts payable 10,322 3,666
Accrued and other liabilities 10,571 8,157
Total current liabilities 20,950 11,895
Long-term debt, less current portion - 57
Other liabilities 1,477 1,085
Stockholders' equity 66,082 66,471
$88,509 $79,508
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(In thousands)
Twelve Months Ended January 31,
2005 2004
Cash flows from operating activities
Net income $17,891 $13,836
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 3,841 4,145
Deferred income taxes (31) 254
Loss on disposition of businesses and
assets 1,282 173
Other operating activities, net (4,521) 1,324
Net cash provided by operating activities 18,462 19,732
Cash flows from investing activities
Capital expenditures (7,541) (3,330)
Other investing activities, net 319 (1,022)
Net cash used in investing activities (7,222) (4,352)
Cash flows from financing activities
Dividends paid (15,298) (3,075)
Purchase of treasury stock (3,519) (3,068)
Long-term debt principal payments (72) (141)
Other financing activities, net (174) 129
Net cash used in financing activities (19,063) (6,155)
Net increase (decrease) in cash and
cash equivalents (7,823) 9,225
Cash and cash equivalents at
beginning of period 14,442 5,217
Cash and cash equivalents at end of
period 6,619 14,442
Short-term investments 3,000 4,000
Cash, cash equivalents and short-term
investments $9,619 $18,442
SOURCE Raven Industries, Inc.
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Related links:
http://www.ravenind.com
CONTACT:
Tom Iacarella, VP & 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, +1-312-640-6667,
all of Financial Relations Board
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