SIOUX FALLS, S.D., Nov. 18 /PRNewswire-FirstCall/ -- Raven Industries,
Inc. (Nasdaq: RAVN) today announced record highs for both net income and sales
for its third quarter ended October 31, 2004, against very strong year-ago
results. Performance was substantially bolstered by $4 million in shipments
of reinforced plastic sheeting to hurricane-ravaged Florida and other parts of
the southeastern United States. Sales for the quarter climbed 35 percent to a
record $48.6 million while net earnings jumped 33 percent to a record $5.2
million, or 28 cents per share on a post-split basis, from $3.9 million, or 21
cents a share post-split.
Ronald M. Moquist, President and CEO, explained that the company's
Engineered Films Division was "the big driver" in the just-concluded quarter,
shipping approximately $4 million in reinforced plastic sheeting in the third
quarter to hurricane-damaged parts of the country. The profit gain from these
sales was substantially offset by write-downs of $1.3 million related to the
Flow Controls Division's Fluent Systems product line.
For the nine-month period, total sales were up 14 percent to $124 million
while net income rose 27 percent to $14.3 million, or 77 cents per share on a
post-split basis, vs. 61 cents post-split a year earlier. Raven split its
shares two-for-one on October 15, 2004.
Segment Performance
Raven's Flow Controls Division (FCD) reported third-quarter sales were up
27 percent to $10.4 million while operating income declined from $2.4 million
to $1.7 million due to a writeoff of $1.3 million against inventory and
intangibles from its December 2003 acquisition of Fluent Systems, LLC. "We
are disappointed with our performance on this acquisition and we misjudged the
position this product could occupy in the market," Moquist explained. "FCD's
underlying performance remains very strong, with our new SmarTrax GPS-based
tractor-steering system off to a great start." Nine-month sales rose
6 percent to $30.8 million while operating income, including the writeoff,
rose from $7.3 million to $8.6 million. Last year's nine-month sales included
a special order of $6 million for chemical-injection systems.
Engineered Films Division (EFD) sales for the latest quarter climbed
54 percent, to $18.3 million, from the year earlier, while operating income
rose 92 percent to $5.2 million, thanks in large part to $4 million in
reinforced plastic sheeting shipments to the southeastern U.S. For the nine
months, sales were $40.7 million, up 28 percent, and operating income totaled
$11.4 million, up 42 percent from the nine-month period a year ago. The
division continues to balance its production capacity with overall strong
demand, but material supply and production constraints could reduce fourth-
quarter gains.
Electronic Systems Division (ESD) sales for the third quarter climbed
34 percent to $14 million while operating income was up two percent to
$1.6 million. Commented CEO Moquist: "We saw steady improvement in operating
efficiencies and throughput during the third quarter but this division still
has room to improve profitability." For the nine months, sales were
$34.8 million, up eight percent, and operating income totaled $3.1 million,
down 28 percent from the nine months a year earlier.
Aerostar had a strong quarter, Moquist said, with operating income up
32 percent to $1.2 million and sales six percent higher to $5.8 million from
$5.5 million a year earlier. The sales gain was modest, management explained,
because Aerostar has not yet been awarded a third-year contract for Army cargo
parachutes. In May 2003, Raven won a $7.75 million government contract for
cargo parachutes and has been delivering on that order during the current
fiscal year. "Because we no longer expect to receive an add-on order this
year, we have already scaled back our Aerostar workforce, and renegotiated the
shipping schedule for the $2.5 million remaining under the existing contract,
out through October 2005. The first half of next year will likely see
Aerostar sales and profits drop," Moquist noted. Nine-month sales rose 11
percent to $17.7 million while operating income was up 48 percent to $3.7
million from the year earlier.
Balance Sheet
The company's cash and investment balances totaled $8.9 million at the end
of the quarter. Record high sales have increased working capital demands, with
operating cash flows of $10.8 million for the nine months ended October 31,
2004, compared to $17.0 million for the year-earlier period. The company's
current ratio was 3.64 to 1 at October 31, 2004, compared to 4.23 one year
earlier, reflecting the special $11.3 million dividend paid in May 2004.
Outlook
Noting that Raven has already surpassed the net earnings per share of its
last full fiscal year, CEO Moquist added that management expects a good fourth
quarter this year as well, with the extent of gains depending on completion of
the additional $4 million in reinforced plastic sheeting for hurricane-
recovery needs. The next fiscal year, the executive continued, "will pose
some challenges for growth, given the extraordinary performance in this fiscal
year, but we are planning for continued expansion of sales and profits."
CONFERENCE CALL INFORMATION
Raven has scheduled a conference call today at 2:00 p.m. Central Time to
discuss its fiscal third 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.
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.
SIC Codes: 3672, 3081, 3829
On the Internet, information is available at http://www.ravenind.com , the
company's website.
RAVEN INDUSTRIES, INC.
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)
2004 2003 Change 2004 2003 Change
Net sales $48,597 $36,081 35% $124,082 $109,133 14%
Cost of goods sold 35,635 26,862 90,683 82,666
Gross profit 12,962 9,219 41% 33,399 26,467 26%
Selling, general, and
administrative
expenses 3,581 3,023 9,916 8,691
Loss on disposition of
businesses and assets 1,282 75 1,282 174
Operating income 8,099 6,121 32% 22,201 17,602 26%
Other income (16) (5) (66) (56)
Income before income
taxes 8,115 6,126 32% 22,267 17,658 26%
Income taxes 2,921 2,224 8,016 6,410
Net income $5,194 $3,902 33% $14,251 $11,248 27%
Net income per common
share:
-basic $0.29 $0.22 32% $0.79 $0.62 27%
-diluted $0.28 $0.21 33% $0.77 $0.61 26%
Weighted average
common shares
outstanding:
-basic 18,077 18,046 0% 18,084 18,089 0%
-diluted 18,429 18,467 0% 18,432 18,492 0%
RAVEN INDUSTRIES, INC.
SALES AND OPERATING
INCOME BY SEGMENT (a)
(In thousands)(Unaudited)
Three Months Ended Nine Months Ended
October 31 October 31
Fav Fav
(Unfav) (Unfav)
2004 2003 Change 2004 2003 Change
Net Sales:
Flow Controls $10,409 $8,186 27% $30,839 $28,991 6%
Engineered Films 18,337 11,883 54% 40,745 31,951 28%
Electronic Systems 14,004 10,480 34% 34,829 32,209 8%
Aerostar 5,847 5,532 6% 17,669 15,982 11%
Total Company $48,597 $36,081 35% $124,082 $109,133 14%
Operating Income (Loss):
Flow Controls $1,671 $2,383 (30)% $8,566 $7,288 18%
Engineered Films 5,237 2,732 92% 11,413 8,019 42%
Electronic Systems 1,629 1,603 2% 3,104 4,325 (28)%
Aerostar 1,152 871 32% 3,706 2,510 48%
Sold Businesses - (75) - (355)
Total Segment Income 9,689 7,514 26,789 21,787
Corporate Expenses (1,590) (1,393) (14)% (4,588) (4,185) (10)%
Total Company $8,099 $6,121 32% $22,201 $17,602 26%
(a) 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(a)
(In thousands) (Unaudited)
October 31, January 31, October 31,
2004 2004 2003
ASSETS
Cash, cash equivalents and short-term
investments $8,903 $18,442 $19,264
Accounts receivable, net 24,293 18,454 18,419
Inventories 22,273 16,763 16,963
Prepaid expenses and other current
assets 2,841 2,945 3,103
Total current assets 58,310 56,604 57,749
Property, plant and equipment, net 17,458 15,950 15,857
Other assets, net 6,329 7,848 6,884
$82,097 $80,402 $80,490
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $70 $72 $104
Accounts payable 6,280 3,666 4,647
Accrued and other liabilities 9,654 9,051 8,903
Total current liabilities 16,004 12,789 13,654
Long-term debt, less current portion 5 57 75
Other liabilities 1,383 1,085 1,442
Stockholders' equity 64,705 66,471 65,319
$82,097 $80,402 $80,490
(a) Certain reclassifications have been made to the January 31, 2004
and October 31, 2003 consolidated balance sheets to conform to the
presentation as of October 31, 2004. Such reclassifications had no
effect on net income or cash flows as previously reported.
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED CASH FLOW
STATEMENTS
(In thousands)(Unaudited)
Nine Months Ended
October 31
2004 2003
Cash flows from operating activities
Net income $14,251 $11,248
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,846 3,232
Deferred income taxes 68 91
Loss on disposition of businesses and assets 1,282 174
Other operating activities, net (7,690) 2,218
Net cash provided by operating activities 10,757 16,963
Cash flows from investing activities
Capital expenditures (4,016) (2,454)
Other investing activities, net (5) (30)
Net cash used in investing activities (4,021) (2,484)
Cash flows from financing activities
Dividends paid (14,308) (2,262)
Purchase of treasury stock (2,020) (2,190)
Long-term debt principal payments (54) (91)
Other financing activities, net 107 111
Net cash used in financing activities (16,275) (4,432)
Net increase (decrease) in cash and cash equivalents (9,539) 10,047
Cash and cash equivalents at beginning of period 14,442 5,217
Cash and cash equivalents at end of period 4,903 15,264
Short-term investments 4,000 4,000
Cash, cash equivalents and short-term investments $8,903 $19,264
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 General Inquiries, Dennis Waite,
+1-708-246-6265, Analyst Inquiries, Leslie Loyet,
+1-312-640-6672, or Media Inquiries, Tim Grace, +1-312-640-6741,
all of Financial Relations Board
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