Raven Industries Reports Fiscal 2013 Third-Quarter Results Applied Technology and Aerostar Drive 4 Percent Year-Over-Year Sales Gain SIOUX FALLS, S.D., Nov. 20, 2012 (GLOBE NEWSWIRE) -- Raven Industries, Inc. (Nasdaq:RAVN) today reported sales and earnings for its fiscal 2013 third quarter ended October 31, 2012. For the third quarter, sales increased 4 percent to $97.0 million, from $93.3 million in the prior-year third quarter. Revenue growth resulted from strength in the Applied Technology Division along with the addition of Vista Research revenues in the Aerostar Division. Engineered Films sales declined slightly from record levels in the year-ago third quarter. Raven's third-quarter net income was $10.9 million, or $0.30 per diluted share, down 5 percent from year-earlier net income of $11.4 million, or $0.31 per diluted share. All earnings-per-share amounts have been adjusted to reflect a two-for-one stock split effective July 25, 2012. For the nine months, sales reached $316.6 million, an 11-percent increase from last year's $285.2 million. Net income grew 5 percent to $41.5 million, or $1.13 per diluted share, from $39.6 million, or $1.09 per diluted share, in fiscal 2012. "There were encouraging developments within all of our divisions during the third quarter," said Daniel A. Rykhus, president and chief executive officer. "Applied Technology sales benefited from our consistent investment in new products and international expansion. Within Aerostar, Vista Research revenues helped to moderate aerostat volatility. Engineered Films saw improved demand for construction films—and that helped offset a decline in energy sales. Our performance company-wide led to a 4 percent top-line gain." Guidance Products Drive Applied Technology to Record Levels Sales in Applied Technology grew 12 percent to $39.5 million, versus $35.3 million last year. Operating income rose 6 percent, to $12.3 million, from $11.5 million. The bottom-line gain stemmed from relatively higher sales and was achieved despite ongoing investment in research, marketing and product development. Both the sales and operating income results were third-quarter records. Said Rykhus, "We continue to see rising demand for our precision agricultural solutions—particularly Raven's advanced guided steering systems that enhance farm yields and reduce operating costs. Emerging and established markets benefit from the precision and resulting cost savings we bring via technology, as well as the ability to maximize yields, which is significant in challenging conditions, including drought. "International sales remained strong in the third fiscal quarter, particularly in Brazil, Canada and South Africa. Domestically, we saw strong OEM demand as we enhance our product capabilities. The drought in the US has created some uncertainty in the marketplace, but overall, any sluggishness has been substantially offset by higher commodity prices and strong farm income." During the third quarter, Raven introduced its Envizio Pro XL™ field computer. Based on the company's popular Envizio Pro and Envizio Pro II field computers, the new device features a 10.4" color touchscreen display. The Envizio Pro XL utilizes the same operating system as its predecessors, but the larger touchscreen enhances the user experience with products like Raven's OmniRow advanced planter control system, or OmniSeed advanced air-seeder control system. Noted Rykhus, "The Envizio Pro XL is just one example of our commitment to product development. Our new product initiatives are done in concert with our OEM and aftermarket channel partners—and this is part of what drives continued success in Applied Technology." Vista Research Fuels Aerostar Gains Aerostar's sales in the third quarter were $26.4 million versus $24.2 million in the previous year's third quarter, a 9 percent gain. As previously disclosed, Raven realigned its Electronic Systems Division in the second quarter. Approximately 75 percent of Electronic Systems' sales went to Aerostar in the fiscal third quarter and the balance to Applied Technology. All sales and operating income amounts reflect the realignment. Most of Aerostar's gain came from the addition of revenues from Vista Research, which was acquired in January 2012. Sales of high-altitude research balloons also increased. Aerostat sales of $1.4 million declined $700,000; electronics manufacturing services revenues were also lower. However, operating income rose 20 percent to $3.8 million from $3.2 million a year earlier. Said Rykhus, "Despite a lack of aerostat sales in the third quarter, we were able to deliver year-over-year growth. This affirms our strategy of acquiring highly engineered products and businesses that occupy a unique market position—and Vista Research does just that. A leading provider of surveillance systems that enhance the effectiveness of radars using sophisticated signal processing algorithms, Vista's smart sensing radar systems, or SSRS, are employed in a host of advanced detection and tracking applications, including wide-area surveillance for border patrol and the military." Commented Rykhus, "We continue to develop opportunities to add stability and mitigate volatility in our Aerostar business, and ultimately drive longer-term growth with breakout potential. That said, we continue to manage the business responsibly, carefully controlling discretionary spending, staffing levels and R&D." Recently, the company confirmed that the high-altitude research balloons used by Austrian Felix Baumgartner in his record-setting Red Bull Stratos mission, were manufactured by Raven's Aerostar Division. Engineered Films Keeps Gross Profit Percentage Despite Lower Demand For the third quarter, Engineered Films posted sales of $33.3 million, compared to $34.9 million in the fiscal 2012 third quarter, a 5 percent reduction from last year's record level. Operating income declined 15 percent to $4.7 million, from $5.6 million in the prior-year period. Said Rykhus, "We continue to see solid performance from Engineered Films. While energy and agricultural sales declined during the quarter, deliveries of construction films were higher. Moreover, we continue to believe that geomembrane films will be a rising part of our market mix for this division, due to the critical need to protect water and other environmental resources. "Within Engineered Films we maintained our gross profit percentage—even with lower sales—through improved operating efficiencies. While the pounds of film sold is up about 10 percent for the nine months, we do have extrusion capacity to further grow this business—which we intend to do through R&D investments in new growth opportunities as well as enhancements to our existing product line," Rykhus noted. Attractive Cash Position Despite Increased Investments At October 31, 2012, cash and investment balances were $48.1 million, up from $44.2 million a year ago. Increases in capital expenditures and the $12 million payment to acquire Vista Research, Inc., in the fourth quarter last year were offset by cash flows from operations. The company paid $3.8 million in dividends to shareholders ($0.105 per share) during the quarter. Accounts receivable increased to $55.5 million compared with $50.7 million at October 31, 2011. Inventories were $50.0 million, up from $49.9 million one year earlier. Average accounts receivable days outstanding increased year-over-year while inventory turns declined slightly. Nine-month operating cash flows increased to $58.0 million from $37.7 million in the prior year. Building for the Future Said Rykhus, "For the fourth quarter, we continue to see positive trends in Applied Technology. For the near-term, Aerostar continues to be impacted by a lack of aerostat orders. Within Engineered Films, we anticipate a challenging environment and tough year-over-year comparison. Given the company's year-to-date performance and a difficult fourth-quarter outlook, reaching our long-term earnings growth target of 10-15 percent is unlikely in the current year. However, we are pleased that we continue to expect a record year for sales and earnings, while managing the business to achieve our target longer term." Concluded Rykhus, "Helping customers solve great challenges—hunger, safety, environmental protection and energy independence—remains the driving force behind everything that we do. We're continuing to invest in the company, expanding both our base of fixed assets and portfolio of product lines. Raven's diversified business model enables us to weather near-term challenges, while continuing to grow and build for the future." Conference Call Information Raven will host a conference call today, Tuesday, November 20, 2012, at 9:00 a.m. Central Time to discuss third-quarter performance. Analysts and investors are invited to join the conference call by dialing: 1-866-393-0676. Alternatively, the live call can be accessed through the Investor Relations section of the company's website at http://investors.ravenind.com/. Please log on to the website at least 15 minutes early to register on the Events & Presentations page, and download and install any necessary audio software. A replay of the conference call will be available two hours after the call ends through 11:59 p.m. CT on Friday, November 30, 2012. To access the replay, dial 1-855-859-2056 and enter conference ID: 60394664. A replay also will remain available on the company's website for 90 days following the call. About Raven Industries, Inc. Since 1956, Raven Industries has designed and manufactured high-quality, high-value technical products.Raven is publicly traded on NASDAQ (RAVN) and has earned an international reputation for innovation, product quality, high performance and unmatched service.With strengths in engineering, manufacturing, and technological innovation, Raven serves theprecision agriculture, high performance specialty films, aerospace, and electronic manufacturing services markets.Visit www.RavenInd.com for more information. 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 and commodity prices, which could affect sales and profitability in some of the company's primary markets, such as agriculture, construction and oil and gas drilling; 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 the company'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. RAVEN INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars and shares in thousands, except earnings per share) (Unaudited) Three Months Ended October 31, Nine Months Ended October 31, Fav Fav (Unfav) (Unfav) 2012 2011 Change 2012 2011 Change Net sales $97,011 $93,300 4 % $316,600 $285,185 11 % Cost of goods 67,436 66,046 215,826 196,865 sold Gross profit 29,575 27,254 9 % 100,774 88,320 14 % Research and development 3,498 2,499 10,462 7,116 expenses Selling, general and 9,705 7,880 28,101 22,122 administrative expenses Operating income 16,372 16,875 (3)% 62,211 59,082 5 % Other (expense), (56) (4) (204) (93) net Income before 16,316 16,871 (3)% 62,007 58,989 5 % income taxes Income taxes 5,454 5,473 20,554 19,414 Net income 10,862 11,398 (5)% 41,453 39,575 5 % Net income attributable to 3 8 5 8 noncontrolling interest Net income attributable to $10,859 $11,390 (5)% $41,448 $39,567 5 % Raven Industries, Inc. Net income per common share: (a) -basic $0.30 $0.31 (3)% $1.14 $1.09 5 % -diluted $0.30 $0.31 (3)% $1.13 $1.09 4 % Weighted average common shares: (a) -basic 36,363 36,242 36,333 36,224 -diluted 36,530 36,438 36,540 36,430 (a) All weighted average shares and earnings per share amounts have been adjusted to reflect the two-for-one stock split effective July 25, 2012. RAVEN INDUSTRIES, INC. SALES AND OPERATING INCOME BY SEGMENT (Dollars in thousands) (Unaudited) Three Months Ended October 31, Nine Months Ended October 31, Fav Fav (Unfav) (Unfav) 2012 2011 Change 2012 2011 Change Net sales (a) Applied $39,534 $35,263 12 % $133,346 $112,716 18 % Technology Engineered Films 33,316 34,947 (5)% 111,195 97,497 14 % Aerostar 26,385 24,173 9 % 78,865 78,126 1 % Intersegment (2,224) (1,083) (6,806) (3,154) eliminations Total Company $97,011 $93,300 4 % $316,600 $285,185 11 % Operating income (a) Applied $12,289 $11,547 6 % $47,248 $40,950 15 % Technology Engineered Films 4,729 5,574 (15)% 20,727 14,987 38 % Aerostar 3,830 3,198 20 % 7,581 12,972 (42)% Intersegment (25) 6 (87) 6 eliminations Total segment $20,823 $20,325 $75,469 $68,915 income Corporate (4,451) (3,450) (29)% (13,258) (9,833) (35)% expenses Total Company $16,372 $16,875 (3)% $62,211 $59,082 5 % (a) Effective June 1, 2012 the Company realigned the assets and team members of its Electronic Systems Division and deployed them into the Company's Aerostar and Applied Technology Divisions.The segment information presented for the three months and nine months ended October 31, 2012 and 2011 reflect this realignment. RAVEN INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars In thousands) (Unaudited) October 31 January 31 October 31 2012 2012 2011 ASSETS Cash and cash equivalents $48,087 $25,842 $44,223 Accounts receivable, net 55,462 60,759 50,661 Inventories 50,024 54,756 49,856 Other current assets 6,054 6,202 4,581 Total current assets 159,627 147,559 149,321 Property, plant and equipment, net 77,392 61,894 56,906 Other assets, net 35,156 36,250 16,910 $272,175 $245,703 $223,137 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $13,262 $16,162 $17,568 Accrued and other liabilities 26,154 24,484 19,130 Total current liabilities 39,416 40,646 36,698 Other liabilities 19,178 24,467 13,582 Shareholders' equity 213,581 180,590 172,857 $272,175 $245,703 $223,137 RAVEN INDUSTRIES, INC. CONDENSED CONSOLIDATED CASH FLOWS (Dollars in thousands) (Unaudited) Nine Months Ended October 31, 2012 2011 Cash flows from operating activities: Net income $41,453 $39,575 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 9,595 6,481 Other operating activities, net 6,998 (8,327) Net cash provided by operating activities 58,046 37,729 Cash flows from investing activities: Capital expenditures (22,840) (22,070) Other investing activities, net (125) 405 Net cash used in investing activities (22,965) (21,665) Cash flows from financing activities: Dividends paid (11,430) (9,766) Other financing activities, net (1,396) 356 Net cash used in financing activities (12,826) (9,410) Effect of exchange rate changes on cash (10) 6 Net increase in cash and cash equivalents 22,245 6,660 Cash and cash equivalents at beginning of period 25,842 37,563 Cash and cash equivalents at end of period $48,087 $44,223 CONTACT: Contact Information At the Company: Tom Iacarella, Vice President and CFO 605-336-2750 Thomas.Iacarella@ravenind.com At Padilla Speer Beardsley: Matt Sullivan 612-455-1700 email@example.com
Raven Industries Reports Fiscal 2013 Third-Quarter Results
Press spacebar to pause and continue. Press esc to stop.