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Raven Industries Reports Strong Performance for Second Quarter, First HalfSIOUX FALLS, S.D., Aug. 19 /PRNewswire-FirstCall/ -- Raven Industries, Inc. (Nasdaq: RAVN) today announced that continued growth in Flow Controls Division sales resulted in strong increases in revenues and earnings for the three and six months ended July 31, 2008. Strong Performance in Flow Controls, Aerostar Lift Second Quarter, First Half Results In the second quarter, sales of For the year-to-date, sales were up 27 percent to "While crop prices are down from the records we saw in the first quarter,
they remain at very high levels," said Engineered Films Reports Mixed Results Engineered Films Division's second quarter sales improved by 12 percent to
For the first half, revenues were "This has truly been a 'good news/bad news' period for Engineered Films," Moquist said. "We have seen continued strong demand from the oil and gas industry, especially for pit liners used in exploration drilling. We also are experiencing a good deal of interest in two of our new products: the VaporBlock Plus(TM) radon barrier, and FortressPro(TM) house wrap, which offers superior air and water protection. Builders choose these products because they wish to differentiate themselves by using higher quality materials. But the construction market continues to be a weak one. Add to this the increasing costs of resin and a higher level of depreciation from additional capacity in the last few years, and the result is a lower margin." Flow Controls Continues Record Pace Flow Controls Division sales grew 93 percent from a year ago, reaching
In the most recent six months, revenues expanded 82 percent, reaching
"We have developed the right product portfolio to capitalize on a strong market," Moquist explained. "While there is competition for each of our products, the breadth of products we offer makes us attractive to distributors because we can provide everything they need. While we didn't introduce any new products during the quarter, our entry-level GPS guidance system, the Cruizer(TM), continued to perform ahead of expectations, as did our entire sprayer line. We are optimizing capacity by outsourcing some manufacturing to our Electronic Systems Division and other vendors, and by offering additional sales promotions for early summer shipments, which is expected to moderate demands on our people and facilities during an anticipated busy fall season." Electronic Systems Sees Lower Performance Electronic Systems Division second quarter sales were For the year-to-date, sales were off 10 percent to "The same issues we faced for the last few quarters are still present," said Moquist. "Soft markets for new home construction and home improvements negatively affected our bed controls business. We also lost a significant account, when that company was acquired. Some of this business has been replaced with lower margin products for avionics, and by supplying circuit boards to Flow Controls. Electronic Systems has strong manufacturing processes and controls, resulting from our focus on Six Sigma. However, until we can increase profit margins, we are reducing our footprint here. That includes consolidating our twoSioux Falls manufacturing facilities into one -- which will be completed in September -- improving throughput and lowering inventories. For the near term, we are managing costs and expenses to maximize cash flow from this business." Aerostar Shows Significant Increases Aerostar's sales of First-half sales reached "Sales increased with higher shipments of MC-6 parachutes to the Army, which we did not have a year ago," Moquist commented. "Sales related to another contract for fuel-handler coveralls also are new this year. We are working to qualify for follow-on parachute orders targeted at other areas of the military." Balance Sheet, Cash Flows, Remain Strong Cash and investment balances on July 31, 2008, were Higher earnings helped lead to an 18 percent increase in operating cash
flows for the first half, at Record Performance Expected for Fiscal 2009 "We expect to leverage the solid market for Flow Controls products in several ways," Moquist said. "This includes introducing extensions of our existing product line and expanding international sales -- in part due to building a stronger international sales team. We are also increasing prices to optimize margins in an environment of rising material costs. Engineered Films should see solid top-line growth as demand from the energy market continues, and new products gain traction. However, margins remain challenged by high resin costs. The good news is that we appear to be maintaining our share in a tough market, and we've got plenty of upside growth potential when the market improves. "Because last year's third quarter was especially strong for Electronic Systems, we know its results will be much lower by comparison this year," he continued. "We are working hard to get profitability back to acceptable levels before initiating any programs to add new business. Aerostar will continue to do well for the balance of the year and is on pace to double its operating income over the last fiscal year. We expect to supplement sales from its military contracts with additional revenues related to tethered aerostats, and ultra long duration balloons for high-altitude research. "All of our businesses are in a good position to capitalize on market opportunities," Moquist explained. "Flow Controls and Aerostar should continue to improve, although their rate of growth will likely moderate. Engineered Films and Electronic Systems could start showing improvement by the end of the year. As a result, the third quarter should generate single-digit year-over-year net income growth, followed by a stronger fourth-quarter increase. That combination will lead to record sales and earnings for the year." About Raven Industries, Inc. Raven is an industrial manufacturer that provides electronic precision- agriculture products, reinforced plastic sheeting, electronics manufacturing services, and specialty aerostats and sewn products to niche markets. Conference Call Information Raven has scheduled a conference call today at 3:00 p.m. Eastern Time to discuss its second quarter performance and related trends in its business Interested investors are invited to listen to the call by visiting the company's Web site at http://www.ravenind.com or http://www.vcall.com 15 minutes before the call to download the necessary software. In addition, a taped rebroadcast will be available beginning one hour after the call ends, and will continue through August 26, 2008. To access the rebroadcast, dial 888-203-1112 or 719-457-0820, and enter this passcode: 6472525. A replay of the call will also be available at http://www.ravenind.com for 90 days. Forward-looking Statements This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the expectations, beliefs, intentions or strategies regarding the future. Without limiting the foregoing, the words, "anticipates," "believes," "expects," "intends," "may," "plans," and similar expressions are intended to identify forward-looking statements. The company intends that all forward- looking statements be subject to the safe harbor provisions of the Private Securities Litigation Reform Act. Although management believes that the expectations reflected in forward-looking statements are based on reasonable assumptions, there is no assurance these assumptions are correct or that these expectations will be achieved. 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 some 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 affect any of the company's product lines, as well as other risks described in Raven's 10-K under Item 1A. This list is not exhaustive, and the company does not have an obligation to revise any forward-looking statements to reflect events or circumstances after the date these statements are made.
For more information on Raven Industries, please visit
http://www.ravenind.com.
FINANCIAL TABLES FOLLOW ...
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)
2008 2007 Change 2008 2007 Change
Net sales $69,278 $55,653 24% $144,444 $113,756 27%
Cost of goods sold 53,492 42,246 106,643 82,975
Gross profit 15,786 13,407 18% 37,801 30,781 23%
Selling, general and
administrative expenses 5,474 4,864 10,848 9,400
Operating income 10,312 8,543 21% 26,953 21,381 26%
Other income, net (176) (314) (294) (501)
Income before income
taxes 10,488 8,857 18% 27,247 21,882 25%
Income taxes 3,673 3,014 9,550 7,499
Net income $6,815 $5,843 17% $17,697 $14,383 23%
Net income per common share:
-basic $0.38 $0.32 19% $0.98 $0.80 23%
-diluted $0.38 $0.32 19% $0.98 $0.79 24%
Weighted average common
shares outstanding:
-basic 18,033 18,103 18,068 18,090
-diluted 18,091 18,202 18,119 18,192
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)
2008 2007 Change 2008 2007 Change
Net Sales:
Engineered Films $26,504 $23,670 12% $48,509 $43,324 12%
Flow Controls 22,716 11,780 93% 57,562 31,615 82%
Electronic Systems 14,739 16,707 (12)% 28,018 31,179 (10)%
Aerostar 5,547 3,719 49% 11,566 7,899 46%
Intersegment
Eliminations (228) (223) (1,211) (261)
Total Company $69,278 $55,653 24% $144,444 $113,756 27%
Operating Income (Loss):
Engineered Films $3,515 $5,283 (33)% $7,379 $10,301 (28)%
Flow Controls 7,060 2,594 172% 20,606 9,709 112%
Electronic Systems 1,239 2,520 (51)% 1,879 4,893 (62)%
Aerostar 718 304 136% 1,524 518 194%
Intersegment
Eliminations 26 (53) (3) (53)
Total Segment Income 12,558 10,648 31,385 25,368
Corporate Expenses (2,246) (2,105) (7)% (4,432) (3,987) (11)%
Total Company $10,312 $8,543 21% $26,953 $21,381 26%
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands) (Unaudited)
July 31 January 31 July 31
2008 2008 2007
ASSETS
Cash, cash equivalents and short-term
investments $32,236 $22,772 $21,902
Accounts receivable, net 34,936 36,538 27,149
Inventories 42,552 36,529 32,202
Other current assets 5,670 5,030 4,115
Total current assets 115,394 100,869 85,368
Property, plant and equipment, net 35,358 35,743 36,758
Other assets, net 10,626 11,249 11,213
$161,378 $147,861 $133,339
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $12,915 $8,374 $7,889
Accrued and other liabilities 13,782 13,734 9,949
Total current liabilities 26,697 22,108 17,838
Other liabilities 7,916 7,478 6,967
Shareholders' equity 126,765 118,275 108,534
$161,378 $147,861 $133,339
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED CASH FLOWS
(In thousands) (Unaudited)
Six Months Ended July 31
2008 2007
Cash flows from operating activities
Net income $17,697 $14,383
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 3,748 3,295
Deferred income taxes 437 (456)
Other operating activities, net 1,009 2,120
Net cash provided by operating activities 22,891 19,342
Cash flows from investing activities
Capital expenditures (3,489) (3,881)
Other investing activities, net (735) (263)
Net cash used in investing activities (4,224) (4,144)
Cash flows from financing activities
Dividends paid (4,692) (3,980)
Purchase of treasury stock (5,180) (282)
Other financing activities, net 76 168
Net cash used in financing activities (9,796) (4,094)
Effect of exchange rate changes on cash (7) 15
Net increase in cash and cash equivalents 8,864 11,119
Cash and cash equivalents at beginning of
period 21,272 6,783
Cash and cash equivalents at end of period 30,136 17,902
Short-term investments 2,100 4,000
Cash, cash equivalents and short-term
investments $32,236 $21,902
SOURCE Raven Industries, Inc. Tags: ,AGR,CPR,CHM,ERN,ERP,CCA,SD-Raven-earnings _ _     Is your favorite bookmark site missing? Ask for it. |
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