SIOUX FALLS, S.D., Aug. 21 /PRNewswire-FirstCall/ -- Noting a very strong
performance in its Flow Controls Division, Raven Industries, Inc.
(Nasdaq: RAVN) today announced results for its second quarter and first half
ended July 31, 2003. Net income for the second quarter rose to $3.2 million,
or a record 34 cents per share, from $2.3 million, or 25 cents per share, for
the three months last year. Raven reported that total sales for its second
quarter increased 22 percent to $36.1 million.
For the first half of its fiscal year, Raven reported that net earnings
increased 27 percent to $7.3 million, a record 79 cents per share, from
$5.8 million, or 61 cents per share, in the first six months of the previous
fiscal year. Total sales for the first half were up 20 percent to
$73.1 million.
Unusually strong sales in the company's Flow Controls Division, which
typically reaches its seasonal low point in the second quarter, generated
sharply higher operating income to help push overall quarterly results to a
record level, Raven President and CEO Ronald M. Moquist said. The company's
Electronic Systems Division and Aerostar subsidiary also posted higher sales
and profits.
Expectations for the Second Half and Year
CEO Moquist said that second-quarter and first-half results demonstrate
the success of management's efforts to focus on its higher margin core
businesses. "We had a solid second quarter and an outstanding first six
months," Moquist said. "Going forward, our third-quarter results could be
relatively flat when compared to last year's third quarter, but the fourth
quarter should be strong. I feel good about what we accomplished in the first
half of the year. We're on track, on target, and on our way to another record
year."
Segment Performance
Flow Controls Division (FCD) second-quarter sales jumped to $9.0 million
compared to $4.2 million in the second quarter of the prior year, and
operating income totaled $1.3 million compared to an operating loss of
$26,000 one year earlier. Six-month sales of $20.8 million were up 31 percent
from the prior year and operating income of $4.9 million was 17 percent
higher.
As noted in the first-quarter results, deliveries under a special order
for chemical injection systems were delayed from the first quarter to the
second. These sales totaled $3.9 million in the second quarter and
$6.0 million for the six months, versus last year's six-month sales of
$2.6 million all delivered in the first quarter. "FCD delivered a lot of
product in the first half this year. We need to replace those special orders
by leveraging our marketing muscle and new product introductions to drive
further growth in this division," CEO Moquist emphasized.
Engineered Films Division (EFD) sales for the second quarter "were good in
view of challenging market conditions," Moquist said. Sales were relatively
flat at $11.2 million for the second quarter; operating income was down
17 percent at $3.0 million. Last year the division took advantage of
comparatively low polyethylene resin prices in the second quarter to boost
margins. This year resin prices stayed high and as a result, operating
margins flattened out. For the six months, sales climbed 15 percent to
$22.3 million and operating income was essentially unchanged at $6.0 million.
"We brought on new equipment which doubled our extrusion capacity in January
2003, providing opportunities for new product introductions and higher sales
volume," Moquist noted.
Electronic Systems Division (ESD) second-quarter sales rose 7 percent to
$11.7 million while operating income climbed 38 percent to $1.6 million. ESD
sales for the six months were up 18 percent, reaching $21.7 million, as major
new customers came onstream. Six Sigma initiatives continue to deliver
further production efficiencies and greater profitability, management said,
with operating income for the first half up $1.3 million to $2.7 million.
Aerostar has undergone a major reorganization in the past year and has
returned to profitability, thanks in significant part to shipments of military
cargo parachutes. Sales rose 30 percent to $4.2 million for the quarter while
operating income reached $463,000 (excluding a $152,000 gain on the sale of a
plant). First-half sales totaled $8.2 million vs. $5.7 million a year earlier
while operating income totaled $927,000 against a loss of $298,000 in the
first six months of the last fiscal year.
Cash Flow and Balance Sheet
Cash and short-term investments reached $19.9 million at July 31, 2003,
compared to $12.5 million one year earlier. Inventory levels were down
$1.7 million and accounts receivable levels were roughly flat despite higher
revenues. Six-month cash flows from operating activities reached
$14.7 million versus $8.9 million for the first six months of the prior year.
On August 19, Raven announced a 12.5 percent increase in its quarterly
dividend rate, to nine cents per share, effective with the October 15, 2003
payment. This comes only six months since its last dividend increase.
Moquist added that the recent inclusion of Raven's common stock in the
well-known Russell(R) 3000 index of U.S. equities reflects the company's
growth and the sizable increase in market capitalization over the past
12 months.
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act provides a "safe harbor" for
forward-looking statements. Certain information included in 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
upon 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 general
economic conditions, weather conditions, which could affect certain of the
company's primary markets, such as agriculture and construction, or changes in
competition, technology or the company's customer base, any of which could
adversely impact any of the company's product lines.
On the Internet, information is available at FRB's website,
http://www.frbwebershandwick.com , or the company's website, http://www.ravenind.com .
RAVEN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except earnings per share)
Three Months Ended July 31 Six Months Ended July 31
2003 2002 Change 2003 2002 Change
(unaudited)(unaudited) (unaudited)(unaudited)
Net sales $36,110 $29,692 22 % $73,052 $60,666 20 %
Cost of goods sold 28,299 23,696 19 % 55,804 46,520 20 %
Gross profit 7,811 5,996 30 % 17,248 14,146 22 %
Selling, general,
and administrative
expenses 2,766 2,568 8 % 5,668 5,414 5 %
Gain (loss) on sale
of businesses and
assets (108) 104 (99) 104
Operating income 4,937 3,532 40 % 11,481 8,836 30 %
Other income 39 37 51 53
Income before
income taxes 4,976 3,569 39 % 11,532 8,889 30 %
Income taxes 1,813 1,249 45 % 4,186 3,111 35 %
Net income $ 3,163 $ 2,320 36 % $ 7,346 $ 5,778 27 %
Net income per
common share:
-basic $0.35 $0.25 40 % $0.81 $0.63 29 %
-diluted $0.34 $0.25 36 % $0.79 $0.61 30 %
Weighted average
common shares
outstanding:
-basic 9,037 9,178 (2)% 9,055 9,183 (1)%
-diluted 9,233 9,408 (2)% 9,246 9,417 (2)%
RAVEN INDUSTRIES, INC.
SALES AND OPERATING INCOME BY SEGMENT
(In thousands)
Three Months Ended July 31 Six Months Ended July 31
2003 2002 Change 2003 2002 Change
(unaudited)(unaudited) (unaudited)(unaudited)
Net Sales:
Flow Controls $ 9,044 $ 4,167 117 % $20,805 $15,939 31 %
Engineered Films 11,186 11,130 1 % 22,325 19,352 15 %
Electronic Systems 11,676 10,920 7 % 21,729 18,408 18 %
Aerostar 4,204 3,222 30 % 8,193 5,653 45 %
Sold Businesses --- 253 (100)% --- 1,314 (100)%
Total Company $36,110 $29,692 22 % $73,052 $60,666 20 %
Operating Income
(Loss):
Flow Controls $ 1,286 $ (26) --- $ 4,905 $ 4,179 17 %
Engineered Films 3,000 3,596 (17)% 5,999 5,995 0 %
Electronic Systems 1,625 1,174 38 % 2,722 1,382 97 %
Aerostar 615 (107) 675 % 927 (298) 411 %
Sold Businesses (260) 59 (541)% (280) 129 (317)%
Corporate Expenses (1,329) (1,164) (14)% (2,792) (2,551) (9)%
Total Company $ 4,937 $ 3,532 40 % $11,481 $ 8,836 30 %
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
July 31, January 31, July 31,
2003 2003 2002
(unaudited) (audited) (unaudited)
ASSETS
Cash, cash equivalents and short-term
investments $ 19,902 $ 9,217 $ 12,495
Accounts receivable, net 13,752 16,468 13,310
Inventories 15,734 21,366 17,468
Prepaid expenses and other current
assets 2,289 2,300 2,632
Total current assets 51,677 49,351 45,905
Property, plant and equipment, net 15,405 16,455 14,900
Other assets, net 6,955 7,010 8,110
$ 74,037 $ 72,816 $ 68,915
LIABILITIES AND STOCKHOLDERS' EQUITY
Note payable $ --- $ --- $ 575
Current portion of long-term debt 112 119 116
Accounts payable 2,420 5,291 3,011
Accrued and other liabilities 7,398 7,757 7,166
Total current liabilities 9,930 13,167 10,868
Long-term debt, less current portion 98 151 213
Other liabilities 1,440 1,262 1,631
Stockholders' equity 62,569 58,236 56,203
$ 74,037 $ 72,816 $ 68,915
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(In thousands)
Six Months Ended July 31
2003 2002
(unaudited) (unaudited)
Cash flows from operating activities
Net income $ 7,346 $ 5,778
Adjustments to reconcile net income
to net cash
provided by operating activities:
Depreciation and amortization 2,167 1,883
Deferred income taxes 117 199
Other operating activities, net 5,090 1,001
Net cash provided by operating
activities 14,720 8,861
Cash flows from investing activities
Capital expenditures (908) (2,601)
Other investing activities, net 17 585
Net cash provided by (used in)
investing activities (891) (2,016)
Cash flows from financing activities
Dividends paid (1,450) (1,286)
Purchase of treasury stock (1,693) (1,093)
Short-term debt issuance --- 575
Long-term debt principal payments (60) (78)
Other financing activities, net 59 54
Net cash used in financing activities (3,144) (1,828)
Net increase (decrease) in cash and
cash equivalents 10,685 5,017
Cash and cash equivalents at
beginning of period 5,217 7,478
Cash and cash equivalents at end of
period 15,902 12,495
Short-term investments 4,000 ---
Cash, cash equivalents and short-term
investments $ 19,902 $ 12,495
SOURCE Raven Industries, Inc.
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Related links:
http://www.ravenind.com
http://www.frbwebershandwick.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 Cindy Martin, Media Inquiries,
+1-312-640-6741, all of FRB Weber Shandwick, for Raven
Industries, Inc.
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