SIOUX FALLS, S.D., March 12 /PRNewswire-FirstCall/ -- Raven Industries,
Inc. (Nasdaq: RAVN) today reported sales and earnings for its fourth
quarter and full year ended January 31, 2007.
For the fiscal year, Raven reported total sales of $217.5 million, an
increase of 6 percent from the $204.5 million a year earlier. Strong
performances from the Engineered Films and Electronic Systems divisions
were countered by weakness in the Flow Controls Division and Aerostar. Net
income for this period rose 5 percent to $25.4 million, or $1.39 cents per
share, from $24.3 million, or $1.32 cents per share.
For the fourth quarter, net sales decreased 6 percent to $51.2 million
from $54.4 million in the same quarter of the previous year. While the
Electronic Systems Division posted a solid improvement in revenues, this
was not enough to offset the lack of disaster film shipments in the
Engineered Films Division, which were very strong in the quarter ended
January 31, 2006. Operating income for the most recent quarter was up
slightly to $8.4 million versus $8.3 million for last year's fourth
quarter. Net income for the quarter rose 7 percent to $5.8 million, or
$0.32 per share, from $5.5 million, or $0.30 per share, in the prior-year
period.
Record Performance in a Challenging Year
Ronald M. Moquist, chief executive officer stated, "Despite the fact
that we faced some tough market situations, effective cost control balanced
with continued investment resulted in another record year for revenues and
earnings, and strong cash flows. We continued to support each of our
divisions with significant investments based on their long-term growth
potential, especially within our Flow Controls and Engineered Films
divisions. These investments will be key to our future, allowing Raven to
leverage its capabilities and produce revenue growth with very attractive
incremental margins."
Segment Performance
Engineered Films Division (EFD) sales for the full year increased 10
percent to $91.1 million versus $82.8 million over last year. Revenue
growth was generated by strong sales of pit liners for oil and gas
exploration, combined with relatively higher selling prices during the
first nine months of the year. Disaster film revenues were $9.9 million
versus $11.4 million in the previous year. Operating income increased 18
percent, reaching $23.4 million.
In the fourth quarter, sales fell 24 percent to $19.7 million, compared
with $26.1 million in the same period a year ago and operating income
decreased 28 percent to $4.3 million. The lack of sales growth during the
quarter resulted from no disaster film shipments this year in contrast to
$6.3 million of fourth-quarter shipments in the prior year.
Moquist noted, "As predicted, we did not ship any disaster film during
the fourth quarter, and that will again be the case in the first quarter of
this current year. At this point, we do not expect significant disaster
film orders in fiscal 2008. We have greatly expanded plant and equipment to
pursue additional markets for our specialty multi-layer film product
capabilities. As we begin fiscal year 2008, we expect pressure on our
operating leverage, due to the additional depreciation expense associated
with the 60 percent increase in extrusion capacity coming on board later in
the first quarter. Partially offsetting that is the anticipated ramp-up in
film volume over the course of the year. Obviously, the addition of
sizeable disaster film orders this year could greatly enhance our current
projections."
Flow Controls Division (FCD) results were hindered by the continued
weakness in agricultural equipment markets. Annual sales were down 4
percent to $45.5 million versus last year's $47.5 million. Operating income
decreased 26 percent to $10.1 million, reflecting continued investments in
new products and marketing support, along with the impact of higher sales
and relatively lower gross margins on guidance systems. The fourth quarter
sales were up slightly to $10.4 million from $10.2 million in the prior
year, while operating income fell 22 percent to $2.1 million.
Moquist added, "Flow Controls was unable to gain positive momentum, due
to the weak U.S. agriculture marketplace. We have recently seen significant
improvement and anticipate better market conditions as our new products and
sales initiatives help drive FCD sales and profits."
Electronic Systems Division (ESD) sales for fiscal 2007 were up 18
percent to $66.3 million from $56.2 million. Operating income increased 22
percent to $10.9 million, driven mainly by strong capacity utilization. For
the fourth quarter, sales of $17.0 million rose 22 percent and operating
income of $2.9 million grew 46 percent from one year earlier. Operating
margins reached record levels for the year. Prospects remain strong for
growth from existing customers.
"This division had an outstanding year in a tough industry. It
continues to benefit from our quality and efficiency enhancement programs,"
Moquist noted. "ESD has the capacity to continue to grow while delivering
solid cash returns on investment."
Aerostar sales for the year decreased 19 percent to $14.7 million from
$18.0 million in fiscal year 2006. Annual operating profit decreased to
$707,000 from $2.1 million a year ago. For the fourth quarter, sales of
$4.1 million were down 2 percent as this business segment reported an
operating profit of $638,000, compared with an operating loss of $29,000
for the same period a year earlier.
"Shipments under our $6.7 million parachute order didn't begin in the
fourth quarter as we originally anticipated," Moquist explained. "That
said, Aerostar has been given the go-ahead by the US Army to ramp up
production late in this first quarter. We expect to fill the order this
year. As is typical, profitability from this project will expand in
subsequent quarters following the start-up of operations. We also received
a new $6.5 million order for protective wear for the US Army. Our $18
million backlog at Aerostar is up about $13 million and we expect this
operation to make a major contribution to earnings growth in the coming
year."
Balance Sheet and Cash Flows
Cash and investment balances were $10.8 million for the year ended
January 31, 2007, versus $11.4 million one year earlier. Operating cash
flows for the year totaled $26.3 million compared with $21.2 million for
the prior- year period. Capital expenditures increased 60 percent in fiscal
2007 to $16.5 million, with the majority of the increase involving
increased extrusion capacity for the Engineered Films Division. Capital
spending for the current fiscal year is expected to decline to the $6
million range.
The company continued its commitment to returning cash to shareholders,
with per-share dividends expanding 29 percent, and total cash paid to
shareholders -- including dividends and share buybacks -- increasing from
$6.7 million to $10.7 million.
Outlook
"In spite of our earnings growing at a slower rate last year, we
believe Raven is executing a solid business plan capable of sustaining
average sales growth of 12 percent and earnings increases of 15 percent
over the long term. We expect the rate of profit growth in this new fiscal
year will demonstrate we are progressing toward those goals. A strong
turnaround from Aerostar and growth in our other operations should more
than offset an expected decline in earnings from Engineered Films. It
typically takes 2-3 years to fully utilize new capacity and EFD will see an
additional $1.6 million of depreciation in fiscal 2008 from new equipment.
Given that we sold $4.0 million of disaster films in the first quarter last
year we do not expect to see strong growth in the first quarter this year,"
Moquist concluded.
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 3:00 p.m. Eastern Time
to discuss its fourth quarter and fiscal year 2007 performance and related
trends in its business. The conference call will be accessible by telephone
and through the Internet. Interested individuals are invited to access the
call by dialing 800-819-9193. To participate on the webcast, log on to the
company's website at http://www.ravenind.com or http://www.vcall.com 15
minutes before the call to download the necessary software.
In addition, a taped rebroadcast will be available beginning one hour
following the completion of the call, and will continue through March 19.
To access the rebroadcast, dial 888-203-1112 and request reservation number
2987641. A replay of the call will also be available on the Internet at
http://www.ravenind.com 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 provides a "safe harbor" for forward-looking statements. Certain
information included in this presentation 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 management
believes that the expectations reflected in these forward-looking
statements are based on reasonable assumptions, there is no assurance that
the assumptions are correct or that these expectations will be achieved.
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 Raven'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 affect the company's product lines, as well as other
risks described in Raven's 10-K under Item 1A. This 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 the statements were made.
For more information on Raven Industries, please visit the company's website
at http://www.ravenind.com .
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)
2007 2006 Change 2007 2006 Change
Net sales $51,248 $54,385 (6)% $217,529 $204,528 6 %
Cost of goods sold 38,920 41,410 162,647 151,297
Gross profit 12,328 12,975 (5)% 54,882 53,231 3 %
Selling, general and
administrative
expenses 3,915 4,694 16,580 15,947
Operating income 8,413 8,281 2 % 38,302 37,284 3 %
Other income, net (157) (89) (533) (210)
Income before income
taxes 8,570 8,370 2 % 38,835 37,494 4 %
Income taxes 2,726 2,908 13,394 13,232
Net income $5,844 $5,462 7 % $25,441 $24,262 5 %
Net income per common
share:
-basic $0.32 $0.30 7 % $1.41 $1.34 5 %
-diluted $0.32 $0.30 7 % $1.39 $1.32 5 %
Weighted average common
shares outstanding:
-basic 18,057 18,072 18,086 18,055
-diluted 18,197 18,325 18,273 18,315
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)
2007 2006 Change 2007 2006 Change
Net Sales:
Engineered Films $19,743 $26,060 (24)% $91,082 $82,794 10 %
Flow Controls 10,416 10,247 2 % 45,515 47,506 (4)%
Electronic Systems 17,002 13,906 22 % 66,278 56,219 18 %
Aerostar 4,087 4,172 (2)% 14,654 18,009 (19)%
Total Company $51,248 $54,385 (6)% $217,529 $204,528 6 %
Operating Income
(loss):
Engineered Films $4,312 $5,972 (28)% $23,440 $19,907 18 %
Flow Controls 2,058 2,652 (22)% 10,111 13,586 (26)%
Electronic Systems 2,930 2,002 46 % 10,850 8,916 22 %
Aerostar 638 (29) 707 2,133 (67)%
Total Segment
Income 9,938 10,597 45,108 44,542
Corporate Expenses (1,525) (2,316) 34 % (6,806) (7,258) 6 %
Total Company $8,413 $8,281 2 % $38,302 $37,284 3 %
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
January 31 January 31
2007 2006
ASSETS
Cash, cash equivalents and short-term
investments $10,783 $11,409
Accounts receivable, net 31,336 29,290
Inventories 28,071 27,819
Prepaid expenses and other current assets 3,029 2,827
Total current assets 73,219 71,345
Property, plant and equipment, net 36,264 25,602
Other assets, net 10,281 9,210
$119,764 $106,157
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $6,093 $8,179
Accrued and other liabilities 10,371 11,871
Total current liabilities 16,464 20,050
Other liabilities 5,032 1,718
Shareholders' equity 98,268 84,389
$119,764 $106,157
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED CASH FLOWS
(In thousands)
Twelve Months Ended January 31
2007 2006
Cash flows from operating activities
Net income $25,441 $24,262
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 5,885 5,151
Deferred income taxes (293) (809)
Other operating activities, net (4,720) (7,415)
Net cash provided by operating activities 26,313 21,189
Cash flows from investing activities
Capital expenditures (16,522) (10,358)
Acquisition of business (203) (2,828)
Other investing activities, net (1,939) 1,751
Net cash used in investing activities (18,664) (11,435)
Cash flows from financing activities
Dividends paid (6,507) (5,056)
Purchase of treasury stock (4,201) (1,689)
Other financing activities, net 431 (201)
Net cash used in financing activities (10,277) (6,946)
Effect of exchange rate changes on cash 2 (18)
Net (decrease) increase in cash and
cash equivalents (2,626) 2,790
Cash and cash equivalents at
beginning of period 9,409 6,619
Cash and cash equivalents at end of
period 6,783 9,409
Short-term investments 4,000 2,000
Cash, cash equivalents and short-term
investments $10,783 $11,409
SOURCE Raven Industries, Inc.
 back to top
Related links:
http://www.ravenind.com
CONTACT:
Tom Iacarella, Vice President & CFO of Raven
Industries, +1-605-336-2750, or Analysts, Leslie Loyet,
+1-312-640-6672, or Media, Tim Grace, +1-312-640-6667, both of
Financial Relations Board
|
