Record High Profits Jump 22%; Sales Up 15% to $36 Million
SIOUX FALLS, S.D., Nov. 19 /PRNewswire-FirstCall/ -- Raven Industries,
Inc. (Nasdaq: RAVN) today reported stronger than expected net earnings of a
record $3.9 million, or 42 cents a share, for its third quarter ended
October 31, 2003. Net earnings were up 22 percent from last year's record
level. Sales climbed 15 percent to $36.1 million from $31.4 million a year
earlier. The industrial manufacturer noted that sales were up in each one of
its operating units in the just concluded quarter.
Management said that the biggest driver of the quarter was its Flow
Controls Division, whose strength it attributed to "an early start in
agricultural orders" and a special order for GPS-based marine navigation
systems. "Flow Controls had an outstanding third quarter," the company
reported, "and it far exceeded our previous forecast."
For the nine-month period, total sales were 19 percent higher than the
year-earlier nine-month period, totaling $109.1 million while net income
climbed 25 percent to a record $11.2 million, or $1.22 per share, vs. $.96 per
share in the comparable period a year ago.
Ronald M. Moquist, President and CEO, commented: "Our productivity
improvements and growth initiatives are executing like never before, and
that's reflected in our third-quarter results." He added that management
"believes in its long-term ability to sustain sales, earnings and cash flow
momentum. However, we remain cautious in our planning for early next year.
This year's first-half included sales of special chemical injection systems to
a chemical company totaling $6 million. This company used these systems to
promote its insecticides. Its promotional activities, however, will not
require Flow Controls to provide additional systems during this spring's
planting season. In addition, profit pressures continue due to volatile raw
material prices in our Engineered Films Division. We are planning for another
strong performance next year, but the level of growth may moderate somewhat in
the first half.
"Looking to the future," Moquist added, "the combined impact of major
initiatives, including company-wide Six Sigma efforts, tighter cost controls,
and ongoing innovations for growth are driving results, and the long-term
outlook for Raven looks bright. All four of our operating groups are capable
of solid, sustainable growth."
Segment Performance
Raven's Flow Controls Division (FCD) reported third-quarter sales up
22 percent to $8.2 million while operating income jumped 50 percent to
$2.4 million, thanks to early agricultural orders. For the nine months, sales
were $29 million, a 28 percent increase, and operating income totaled
$7.3 million, 26 percent higher than the nine-month period a year earlier.
Engineered Films Division (EFD) sales for the latest quarter rose
19 percent to $12.7 million from the year earlier although operating income
fell by less than one percent to $3.0 million. Stronger sales of pit liners,
spurred in part by greater drilling activity in the U.S., were offset by
softer margins, which continue to be squeezed by higher raw material prices.
For the nine months, sales were $35 million, up 16 percent, and operating
income totaled $9.0 million, essentially unchanged from the nine-month period
a year ago.
Electronic Systems Division (ESD) sales for the third quarter were up
slightly, about one percent, to $10.5 million while operating income climbed
20 percent to $1.6 million due to continued operating improvements, with Six
Sigma and TQM initiatives bearing fruit. For the nine months, ESD sales were
$32.2 million, up 12 percent, and operating income totaled $4.3 million, up
59 percent from the comparable nine-month period a year earlier.
Aerostar reported third-quarter sales rose 30 percent to $4.7 million
while operating income jumped to $640,000 from $103,000 in the year-earlier
quarter due in large part to higher shipments of US Army cargo parachutes.
For the nine months, sales were up 39 percent to $12.9 million and operating
income of $1.6 million compared to an operating loss of $195,000 a year
earlier.
Balance Sheet
The company's balance sheet remained strong with cash and investment
balances exceeding $19 million at the end of the quarter. Strong earnings and
inventory management have contributed to higher operating cash flows, reaching
$17 million for the nine months ended October 31, 2003, compared to
$11.3 million for the year-earlier period. The company's current ratio
reached 4.5 to 1 at October 31, 2003, compared to 3.7 one year ago.
CONFERENCE CALL INFORMATION
Raven has scheduled a conference call today at 2:00 p.m. Central Time to
discuss its third quarter 2004 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 News 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 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 http://www.ravenind.com , the
company's website.
FINANCIAL TABLES FOLLOW ...
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)
2003 2002 Change 2003 2002 Change
Net sales $36,081 $31,423 15 % $109,133 $92,089 19 %
Cost of goods sold 26,862 24,091 82,666 70,611
Gross profit 9,219 7,332 26 % 26,467 21,478 23 %
Selling, general, and
administrative
expenses 3,023 2,535 (19)% 8,691 7,949 (9)%
Gain (loss) on sale
of businesses and
assets (75) 75 (174) 179
Operating income 6,121 4,872 26 % 17,602 13,708 28 %
Other income 5 67 56 120
Income before income
taxes 6,126 4,939 24 % 17,658 13,828 28 %
Income taxes 2,224 1,729 6,410 4,840
Net income $3,902 $3,210 22 % $11,248 $8,988 25 %
Net income per common
share:
-basic $0.43 $0.35 23 % $1.24 $0.98 27 %
-diluted $0.42 $0.34 24 % $1.22 $0.96 27 %
Weighted average common
shares outstanding:
-basic 9,023 9,136 (1)% 9,044 9,167 (1)%
-diluted 9,233 9,366 (1)% 9,246 9,402 (2)%
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)
2003 2002 Change 2003 2002 Change
Net Sales:
Flow Controls $8,186 $6,690 22 % $28,991 $22,629 28 %
Engineered Films 12,688 10,706 19 % 35,013 30,058 16 %
Electronic Systems 10,480 10,404 1 % 32,209 28,812 12 %
Aerostar 4,727 3,623 30 % 12,920 9,276 39 %
Sold Businesses - - - 1,314 (100)%
Total Company $36,081 $31,423 15 % $109,133 $92,089 19 %
Operating Income
(Loss):
Flow Controls $2,383 $1,589 50 % $7,288 $5,768 26 %
Engineered Films 2,963 2,982 (1)% 8,962 8,977 0 %
Electronic Systems 1,603 1,332 20 % 4,325 2,714 59 %
Aerostar 640 103 521 % 1,567 (195) 904 %
Sold Businesses (75) 75 (200)% (355) 204 (274)%
Corporate Expenses (1,393) (1,209) (15)% (4,185) (3,760) (11)%
Total Company $6,121 $4,872 26 % $17,602 $13,708 28 %
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands) (unaudited)
October 31, January 31, October 31,
2003 2003 2002
ASSETS
Cash, cash equivalents and short-term
investments $19,264 $9,217 $10,117
Accounts receivable, net 18,419 16,468 17,185
Inventories 16,963 21,366 18,351
Prepaid expenses and other current
assets 2,075 2,300 2,575
Total current assets 56,721 49,351 48,228
Property, plant and equipment, net 15,857 16,455 16,581
Other assets, net 6,884 7,010 7,574
$79,462 $72,816 $72,383
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $104 $119 $119
Accounts payable 4,647 5,291 4,429
Accrued and other liabilities 7,875 7,757 8,398
Total current liabilities 12,626 13,167 12,946
Long-term debt, less current portion 75 151 183
Other liabilities 1,442 1,262 1,636
Stockholders' equity 65,319 58,236 57,618
$79,462 $72,816 $72,383
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(In thousands) (unaudited)
Nine Months Ended October 31
2003 2002
Cash flows from operating activities
Net income $11,248 $8,988
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 3,232 2,995
Deferred income taxes 91 344
Other operating activities, net 2,392 (1,021)
Net cash provided by operating
activities 16,963 11,306
Cash flows from investing activities
Capital expenditures (2,454) (5,292)
Other investing activities, net (30) (3,111)
Net cash provided by (used in)
investing activities (2,484) (8,403)
Cash flows from financing activities
Dividends paid (2,262) (1,924)
Purchase of treasury stock (2,190) (2,295)
Long-term debt principal payments (91) (99)
Other financing activities, net 111 52
Net cash used in financing activities (4,432) (4,266)
Net increase (decrease) in cash and
cash equivalents 10,047 (1,363)
Cash and cash equivalents at
beginning of period 5,217 7,478
Cash and cash equivalents at end of
period 15,264 6,115
Short-term investments 4,000 4,002
Cash, cash equivalents and short-term
investments $19,264 $10,117
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 Cindy Martin, Media Inquiries,
+1-312-640-6741, all of The Financial Relations Board
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