SIOUX FALLS, S.D., Aug. 17 /PRNewswire-FirstCall/ -- Raven Industries,
Inc. (Nasdaq: RAVN) today announced that record sales and earnings in its
second quarter ended July 31, 2005, were driven by strong results in its
Engineered Films Division (EFD) and a continuing turnaround in its Electronic
Systems Division (ESD). Sales for the quarter rose 22 percent to
$45.3 million from $37.1 million a year earlier while net income rose
31 percent to $4.8 million, or 26 cents per share, from $3.6 million, or
20 cents per share, in the year-ago quarter.
For its first six months, Raven reported total sales of $96.0 million, an
increase of 27 percent from the $75.5 million a year earlier. Net income for
the company's first half rose to $11.9 million, or 65 cents per share, from
$9.1 million, or 49 cents per share.
Ronald M. Moquist, President and CEO, said results were "better than our
expectations going into the quarter. We are pleased to see that both
Engineered Films and Electronic Systems were able to sustain the progress
shown early in the year." Revenue growth is expected to be more challenging
in the second-half of the year because of comparisons to a period when EFD
shipped over $9 million of disaster film, he said. "We see opportunities to
replace most of those shipments and grow the bottom line," Moquist added, "and
we continue to be optimistic about having another outstanding year. Excluding
the impact of a $1.3 million pre-tax write off taken in the third quarter last
year, the third quarter this year could be flat to slightly up, but our fourth
quarter should be very strong."
Segment Performance
Raven reported that its Engineered Films Division (EFD) sales climbed
45 percent to $17.4 million in the second quarter from $12.0 million a year
earlier while operating income for the division rose 31 percent to
$4.2 million from $3.2 million. Gross profits declined from 31.2 percent of
sales last year in the second quarter to 28.1 percent this year. Higher
plastic resin costs were only partially offset by higher selling prices. The
division continues to bring additional extrusion and lamination capacity
online, pushing additional sales volume with slightly lower margins into the
marketplace. For the first six months, EFD sales totaled $33.5 million, up
50 percent, while operating income was $8.3 million vs. $6.2 million in the
year-ago six months.
Electronics Systems Division (ESD) second-quarter sales rose 30 percent to
$15.3 million from $11.7 million. Operating income climbed from $773,000 to
$2.9 million. In the prior year, ESD operations were hampered by start-up
costs for a new customer. Improved production efficiencies and quality
initiatives drove profit margins across all product lines. For the first six
months, ESD sales totaled $28.6 million vs. $20.8 million in the first six
months of the previous fiscal year while operating income was $5.0 million, up
from $1.5 million in the prior year.
Deliveries and profits in the Flow Controls Division (FCD) reflected the
division's seasonal low point during the second quarter. Sales, including
those from the company's acquisition of the assets of Montgomery Industries,
Inc., a privately held Canadian corporation purchased in February 2005, rose
19 percent to $8.6 million, of which some $900,000 derived from Montgomery's
boom height-control system, called Autoboom(TM). Operating income declined
20 percent to $1.4 million from $1.8 million. For the first six months of the
fiscal year, total sales were $24.7 million vs. $20.4 million a year earlier
while operating income was $7.3 million against $6.9 million in the first half
of last year, when agricultural equipment sales reached record highs. The
high level of investment in research and development and marketing during this
past year has reduced current results but enhanced our prospects for the
future.
As anticipated, Aerostar sales in the second quarter fell to $3.9 million
from $6.1 million with the drop caused by lower deliveries of military cargo
parachutes. Operating income totaled $420,000 vs. $1.3 million in the
year-earlier quarter. Sales of high-altitude research balloons, however, rose
in the quarter. In June, NASA launched a scientific helium balloon from
northern Sweden. After crossing the Atlantic Ocean, the mission ended
successfully in northern Canada. NASA's new transatlantic capability is made
possible exclusively by huge Aerostar balloons. This provides more frequent
opportunities for long-duration studies in astronomy and high-energy physics.
For the first six months of the year, total sales were $9.1 million vs.
$11.8 million for the comparable period a year earlier while operating income
totaled $1.4 million vs. $2.6 million.
Balance Sheet and Cash Flows
The company's cash and investment balances totaled $9.7 million at the end
of the quarter compared to $11.3 million one year earlier. The increase in
net income, partially offset by higher working capital needs, increased
operating cash flows to $10.6 million for the six months ended July 31, 2005,
from $9.0 million for the year-earlier period. Cash used in investing
activities increased to $6.8 million for the six months due to the acquisition
of Montgomery Industries in February 2005 and other investments in productive
capacity. Dividends in the prior fiscal year included a special $11.3 million
dividend paid in May 2004. Regular quarterly per-share dividends are up
27 percent over last year's levels.
Conference Call Information
Raven has scheduled a conference call today at 2:00 p.m. Central Daylight
Time to discuss its fiscal second-quarter 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
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, 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
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except earnings per share) (Unaudited)
Three Months Ended Six Months Ended
July 31 July 31
Fav Fav
(Unfav) (Unfav)
2005 2004 Change 2005 2004 Change
Net sales $45,304 $37,077 22 % $96,008 $75,485 27 %
Cost of goods sold 34,422 28,318 69,965 55,048
Gross profit 10,882 8,759 24 % 26,043 20,437 27 %
Selling, general and
administrative expenses 3,583 3,108 7,608 6,335
Operating income 7,299 5,651 29 % 18,435 14,102 31 %
Other income, net (92) (26) (54) (50)
Income before income
taxes 7,391 5,677 30 % 18,489 14,152 31 %
Income taxes 2,617 2,035 6,558 5,095
Net income $4,774 $3,642 31 % $11,931 $9,057 32 %
Net income per common
share:
-basic $0.26 $0.20 30 % $0.66 $0.50 32 %
-diluted $0.26 $0.20 30 % $0.65 $0.49 33 %
Weighted average common
shares outstanding:
-basic 18,059 18,096 18,046 18,086
-diluted 18,315 18,423 18,306 18,425
RAVEN INDUSTRIES, INC.
SALES AND OPERATING INCOME BY SEGMENT
(In thousands) (Unaudited)
Three Months Ended Six Months Ended
July 31 July 31
Fav Fav
(Unfav) (Unfav)
2005 2004 Change 2005 2004 Change
Net Sales:
Flow Controls $8,626 $7,233 19 % $24,715 $20,430 21 %
Engineered Films 17,445 11,995 45 % 33,537 22,408 50 %
Electronic Systems 15,300 11,743 30 % 28,621 20,825 37 %
Aerostar 3,933 6,106 (36)% 9,135 11,822 (23)%
Total Company $45,304 $37,077 22 % $96,008 $75,485 27 %
Operating Income (Loss):
Flow Controls $1,434 $1,784 (20)% $7,303 $6,895 6 %
Engineered Films 4,184 3,190 31 % 8,303 6,176 34 %
Electronic Systems 2,903 773 276 % 4,993 1,475 239 %
Aerostar 420 1,326 (68)% 1,357 2,554 (47)%
Total Segment Income 8,941 7,073 21,956 17,100
Corporate Expenses (1,642) (1,422) (15)% (3,521) (2,998) (17)%
Total Company $7,299 $5,651 29 % $18,435 $14,102 31 %
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands) (Unaudited)
July 31, January 31, July 31,
2005 2005 2004
ASSETS
Cash, cash equivalents and short-term
investments $9,678 $9,619 $11,327
Accounts receivable, net 22,152 25,370 16,821
Inventories 25,073 23,315 21,008
Prepaid expenses and other current
assets 3,533 3,288 1,888
Total current assets 60,436 61,592 51,044
Property, plant and equipment, net 22,444 19,964 16,031
Other assets, net 9,695 6,953 7,608
$92,575 $88,509 $74,683
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $26 $57 $73
Accounts payable 6,265 10,322 4,762
Accrued and other liabilities 9,819 10,571 7,091
Total current liabilities 16,110 20,950 11,926
Long-term debt, less current portion 11 - 20
Other liabilities 1,391 1,477 1,344
Stockholders' equity 75,063 66,082 61,393
$92,575 $88,509 $74,683
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED CASH FLOWS
(In thousands) (Unaudited)
Six Months Ended July 31
2005 2004
Cash flows from operating activities
Net income $11,931 $9,057
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 2,412 1,975
Deferred income taxes (264) 60
Other operating activities, net (3,464) (2,084)
Net cash provided by operating
activities 10,615 9,008
Cash flows from investing activities
Capital expenditures (4,548) (1,805)
Acquisition of businesses (2,748) (5)
Other investing activities, net 504 (15)
Net cash used in investing activities (6,792) (1,825)
Cash flows from financing activities
Dividends paid (2,527) (13,314)
Purchase of treasury stock (689) (1,059)
Long-term debt principal payments (40) (36)
Other financing activities, net 10 111
Net cash used in financing activities (3,246) (14,298)
Effect of exchange rate changes on
cash (18) -
Net increase (decrease) in cash and
cash equivalents 559 (7,115)
Cash and cash equivalents at
beginning of period 6,619 14,442
Cash and cash equivalents at end of
period 7,178 7,327
Short-term investments 2,500 4,000
Cash, cash equivalents and short-term
investments $9,678 $11,327
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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