SIOUX FALLS, S.D., Nov. 17 /PRNewswire-FirstCall/ -- Raven Industries,
Inc. (Nasdaq: RAVN) today reported sales up 11 percent to a record
$54.1 million over the year-ago period and net income 32 percent higher at a
record $6.9 million, or 37 cents per share vs. 28 cents last year. Excluding
the impact of an $820,000 after-tax write-off of an acquisition in the prior
year, net income grew 14 percent.
Engineered Films and Flow Controls were the major drivers in the third
quarter ended October 31, 2005, noted Raven CEO and President Ronald M.
Moquist. "Demand for Raven films was up across our standard product line,"
Moquist said, "including agricultural films, pit liners for oil exploration,
and the construction markets. Strong initial seasonal orders from OEMs
spurred results in our Flow Controls Division."
On a year-to-date basis, total company sales of $150.1 million were up
21 percent from last year and net income of $18.8 million was 32 percent
higher than one year earlier. At $1.03 per share, the nine-month net income
exceeded the 97-cent full-year January 31, 2005, record.
Segment Performance
Engineered Films Division (EFD) experienced a 27 percent climb in sales to
$23.2 million. Pit lining and construction markets remained strong and sales
also benefited from higher selling prices. Disaster film shipments in the
just concluded quarter totaled $3 million versus $4 million shipped in the
year-ago quarter. October 2005 backlog for disaster films totaled $4 million.
Operating income, restricted by the impact of higher resin prices, and higher
scrap levels as new equipment came on-line, rose eight percent to $5.6 million
for the third quarter. For the first nine months of the fiscal year, sales
increased 39 percent to $56.7 million while operating income was 22 percent
higher than the first nine months of last year at $13.9 million.
Flow Controls Division (FCD) sales rose 21 percent to $12.5 million for
the third quarter while operating income increased to $3.6 million from
$1.7 million a year earlier, which included a $1.3 million write-off of
inventory and intangibles related to its Fluent Systems acquisition. The
higher sales level reflects accelerated orders from original equipment
manufacturers. Sales of the division's new sprayer boom-height control
product, called Autoboom(TM), arising from the acquisition of the assets of
Montgomery Industries in February 2005, were approximately $400,000 in the
quarter. For the nine months, sales were up 21 percent to $37.3 million with
operating income reaching $10.9 million. Last year's nine-month operating
income, including the Fluent write-off, was $8.6 million.
Electronic Systems Division (ESD) sales were relatively flat in the third
quarter, down two percent to $13.7 million. The division, however, maintained
the strong efficiency gains it had made in the first half of the year, posting
operating income of $1.9 million, up 18 percent from the level of the
year-earlier period. Moquist said that customers requested early delivery of
product in the second quarter, which reduced third quarter shipments. For the
first nine months of the year, sales totaled $42.3 million, up 21 percent from
the same period last year while operating income more than doubled, reaching
$6.9 million.
Aerostar sales for the third quarter were down 20 percent to $4.7 million
while operating income declined 30 percent to $805,000. Raven management said
it expected to receive a bid package for parachutes from the US government in
the near future. Moquist said that, even if the bids are successful and new
orders arrive, management doesn't expect any impact on shipments through the
first half of next year. For the first nine months, Aerostar sales totaled
$13.8 million, down 22 percent from the year-earlier period. Operating income
had declined $1.5 million, or 42 percent to $2.2 million.
Balance Sheet
The company's cash and investment balances were $12.2 million at the end
of the quarter versus $8.9 million one year earlier. Operating cash flows for
the nine months totaled $15.7 million versus $10.8 million for the comparable
period last year as a result of higher net income. Cash used in investing
activities increased from $4.0 million to $7.7 million due primarily to the
acquisition of Montgomery Industries in February 2005 and additional
investments in manufacturing equipment. Dividends in the prior fiscal year
included a special $11.3 million dividend paid in May 2004. Regular quarterly
dividends are up 27 percent over last year's levels.
Outlook
Moquist discussed prospects for the fourth quarter along with challenges
and opportunities for the coming year. "The fourth quarter outlook remains
very strong as we look at ongoing demand for Engineered Films products and
expect improved gross margins over last year's fourth quarter, when Aerostar
incurred an operating loss. We recognize that with this year's exceptionally
strong growth in sales and profits we have created a challenge for next year,
but we are planning to grow both sales and earnings."
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 fiscal third-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
FINANCIAL TABLES FOLLOW ...
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except earnings per share) (Unaudited)
Three Months Ended Nine Months Ended
October 31 October 31
Fav Fav
(Unfav) (Unfav)
2005 2004 Change 2005 2004 Change
Net sales $54,135 $48,597 11 % $150,143 $124,082 21 %
Cost of goods sold 39,922 35,635 109,887 90,683
Gross profit 14,213 12,962 10 % 40,256 33,399 21 %
Selling, general and
administrative
expenses 3,645 3,581 11,253 9,916
Loss on disposition
of businesses and
assets - 1,282 - 1,282
Operating income 10,568 8,099 30 % 29,003 22,201 31 %
Other income, net (67) (16) (121) (66)
Income before income
taxes 10,635 8,115 31 % 29,124 22,267 31 %
Income taxes 3,766 2,921 10,324 8,016
Net income $6,869 $5,194 32 % $18,800 $14,251 32 %
Net income per common
share:
-basic $0.38 $0.29 31 % $1.04 $0.79 32 %
-diluted $0.37 $0.28 32 % $1.03 $0.77 34 %
Weighted average
common shares
outstanding:
-basic 18,059 18,077 18,050 18,084
-diluted 18,326 18,429 18,312 18,432
RAVEN INDUSTRIES, INC.
SALES AND OPERATING INCOME BY SEGMENT
(In thousands) (Unaudited)
Three Months Ended Nine Months Ended
October 31 October 31
Fav Fav
(Unfav) (Unfav)
2005 2004 Change 2005 2004 Change
Net Sales:
Flow Controls $12,544 $10,409 21 % $37,259 $30,839 21 %
Engineered Films 23,197 18,337 27 % 56,734 40,745 39 %
Electronic Systems 13,692 14,004 (2)% 42,313 34,829 21 %
Aerostar 4,702 5,847 (20)% 13,837 17,669 (22)%
Total Company $54,135 $48,597 11 % $150,143 $124,082 21 %
Operating Income:
Flow Controls $3,631 $1,671 117 % $10,934 $8,566 28 %
Engineered Films 5,632 5,237 8 % 13,935 11,413 22 %
Electronic Systems 1,921 1,629 18 % 6,914 3,104 123 %
Aerostar 805 1,152 (30)% 2,162 3,706 (42)%
Total Segment
Income 11,989 9,689 33,945 26,789
Corporate Expenses (1,421) (1,590) 11 % (4,942) (4,588) (8)%
Total Company $10,568 $8,099 30 % $29,003 $22,201 31 %
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands) (Unaudited)
October 31 January 31 October 31
2005 2005 2004
ASSETS
Cash, cash equivalents and short-term
investments $12,215 $9,619 $8,903
Accounts receivable, net 29,435 25,370 24,293
Inventories 25,458 23,315 22,273
Prepaid expenses and other current
assets 3,209 3,288 2,841
Total current assets 70,317 61,592 58,310
Property, plant and equipment, net 22,112 19,964 17,458
Other assets, net 9,746 6,953 6,329
$102,175 $88,509 $82,097
LIABILITIES AND SHAREHOLDERS' EQUITY
Current portion of long-term debt $11 $57 $70
Accounts payable 8,623 10,322 6,280
Accrued and other liabilities 11,635 10,571 9,654
Total current liabilities 20,269 20,950 16,004
Long-term debt, less current portion 12 - 5
Other liabilities 1,461 1,477 1,383
Shareholders' equity 80,433 66,082 64,705
$102,175 $88,509 $82,097
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED CASH FLOWS
(In thousands) (Unaudited)
Nine Months Ended October 31
2005 2004
Cash flows from operating activities
Net income $18,800 $14,251
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 3,634 2,846
Deferred income taxes (455) 68
Loss on disposition of businesses and
assets - 1,282
Other operating activities, net (6,287) (7,690)
Net cash provided by operating
activities 15,692 10,757
Cash flows from investing activities
Capital expenditures (5,409) (4,016)
Acquisition of businesses (2,803) -
Other investing activities, net 506 (5)
Net cash used in investing activities (7,706) (4,021)
Cash flows from financing activities
Dividends paid (3,791) (14,308)
Purchase of treasury stock (1,038) (2,019)
Long-term debt principal payments (55) (54)
Other financing activities, net - 106
Net cash used in financing activities (4,884) (16,275)
Effect of exchange rate changes on
cash (6) -
Net increase (decrease) in cash and
cash equivalents 3,096 (9,539)
Cash and cash equivalents at
beginning of period 6,619 14,442
Cash and cash equivalents at end of
period 9,715 4,903
Short-term investments 2,500 4,000
Cash, cash equivalents and short-term
investments $12,215 $8,903
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, +1-312-640-6741,
all of Financial Relations Board
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