Raven Industries Reports Fourth-Quarter Results, Record Fiscal 2013 Year

Raven Industries Reports Fourth-Quarter Results, Record Fiscal 2013 Year

SIOUX FALLS, S.D., March 12, 2013 (GLOBE NEWSWIRE) -- Raven Industries, Inc.
(Nasdaq:RAVN) today reported record sales and earnings for its fiscal year
ended January 31, 2013.

Raven's fourth-quarter net income was $11.1 million, or $0.30 per diluted
share, consistent with the year-earlier net income record of $11.0 million, or
$0.30 per diluted share. Applied Technology operating earnings were up 40
percent, and were offset by lower results from the Aerostar and Engineered
Films Divisions. All earnings-per-share amounts have been adjusted to reflect
a two-for-one stock split effective July 25, 2012.

For the fourth quarter, sales were $89.6 million, versus $96.3 million in the
prior-year fourth quarter. The company's Applied Technology Division delivered
a top-line gain of 18 percent. This was offset by continued softness in
Aerostar and lower demand in Engineered Films, resulting in an overall
quarterly sales decline of 7 percent.

Fiscal 2013 Results

For the 12 months, sales reached $406.2 million, a 6-percent increase from
last year's $381.5 million. Net income grew 4 percent to $52.5 million, or
$1.44 per diluted share, from $50.6 million, or $1.39 per diluted share, in
fiscal 2012.

"Raven was able to generate record revenue and earnings for our 2013 fiscal
year – topping the records set in fiscal 2012 and 2011," said Daniel A.
Rykhus, Raven's president and chief executive officer. "Over that period the
strong agriculture and energy markets provided opportunities for us to realize
returns on the recent and aggressive investments made in our Applied
Technology and Engineered Films Divisions—both of which turned in strong
performances in fiscal 2013.

"Our targeted investments in new product development, capacity expansion and
new market penetration were essential to our annual growth in those respective
businesses and overall as a corporation. This performance was attained despite
Aerostar facing reduced demand from the U.S. federal agency customers we serve
and Engineered Films adjusting to more moderate energy market demand."

International Demand Fuels Applied Technology Gains

For the fourth quarter, sales in Applied Technology grew 18 percent to $38.4
million, versus $32.5 million last year. Operating income rose sharply by 40
percent to $12.3 million, from $8.8 million in the prior-year period. The
bottom-line gain stemmed from higher sales and was achieved amid sustained
investment in research, marketing and product development. Last year's
fourth-quarter operating income was reduced by start-up costs related to a new
manufacturing facility.

Annual revenues for Applied Technology increased 18 percent to $171.8 million
compared with $145.3 million for fiscal 2012. Operating income was up 20
percent, to $59.6 million, compared with $49.8 million for the same period
last year.

Said Rykhus, "Applied Technology continued to show strength in the fourth
quarter. As our largest division, Applied Technology comprised 42.9 percent of
total sales. During the quarter, demand built for precision agricultural
solutions—particularly Raven's advanced guided steering systems that increase
crop yields and reduce operating costs. International sales also were strong,
particularly in Brazil, Canada, South Africa and Ukraine. Domestically, OEM
demand rose as the company continued to enhance its product capabilities.

"Internationally, our success results from having the right products for the
right market. For example, there's a pressing need for Slingshot^® and our
steering systems in South Africa, while countries in Eastern Europe are
demanding our basic guidance and control products. Emerging agricultural
markets abroad are all at different life cycle stages and therefore, have
different needs—and Raven has the breadth of precision agricultural products
to meet those needs."

Recently, the company unveiled enhancements to its SmarTrax™ steering and
Slingshot product lines. With the introduction of SmarTrax MD, growers now
have a simple-to-install mechanical drive steering system that can seamlessly
transfer the ability to steer automatically across a fleet of vehicles.
Slingshot Online 2.0 offers users a more streamlined user experience to help
simplify the way customers manage and share their data.

Said Rykhus, "We're driving innovation in precision agriculture, always
keeping our focus on helping farmers feed our rapidly growing world
population. The SmarTrax and Slingshot enhancements were influenced by
customer feedback and are another example of our commitment to product
development."

Vista Research Profitable in Fiscal 2013, Moderating Aerostar Declines

Aerostar's sales in the fourth quarter were $23.2 million versus $29.7 million
in the previous year's fourth quarter, a 22-percent decrease. Operating income
declined to $2.8 million, from $5.3 million in fiscal 2012.

Annual revenues for Aerostar were $102.1 million compared with $107.8 million
for fiscal 2012. Operating income was $10.3 million, versus $18.3 million for
the same period last year.

Vista Research exceeded the company's expectations, delivering $4.8 million of
fourth-quarter revenues and a profitable first year. This helped moderate a
$4.8 million fourth-quarter decline in relatively high-margin aerostat sales,
as well as lower electronics manufacturing services revenues, which Raven had
anticipated.

Said Rykhus, "In the fourth quarter, and throughout fiscal 2013, Aerostar
faced continued uncertainty and sluggish demand, leading to lower sales and
operating income. Looking ahead, we are building a strong pipeline of
high-quality business development pursuits for fiscal 2014. This includes new
initiatives for the secure communications market and opportunities for
aerostat systems in defense, government agencies and commercial
applications—both domestically and overseas. We are also actively working on
new opportunities for high-altitude balloon technology.

"We continue to focus on a number of initiatives that will broaden our
customer base. We see significant future potential with Vista both here and
internationally as we work to sell into new markets and secure key contracts.
At the same time, we recognize we are operating in an uncertain governmental
spending environment. During the year, we will develop opportunities to add
stability and mitigate volatility in Aerostar, ultimately driving longer-term
growth with breakout potential—while continuing to manage the business
responsibly."

Engineered Films Delivers a Strong Year, Despite Fourth-Quarter Declines

For fiscal 2013, sales in Engineered Films rose 6 percent to $142.0 million.
Operating income increased 17 percent to $25.1 million.

For the fourth quarter, Engineered Films posted sales of $30.8 million,
compared to $36.0 million in the fiscal 2012 fourth quarter. Operating income
was $4.4 million, versus $6.5 million in the prior-year period.

Said Rykhus, "Though we faced economic headwinds in the fourth quarter, sales
in our Engineered Films division rose for the year, and we delivered
bottom-line growth. We saw strength in agricultural and geomembrane films,
while energy market demand softened, but held at solid levels.

"During the year, we completed a significant $11 million geomembrane reservoir
project in Ohio, and we launched several new projects utilizing our
geomembrane films. We also continued work on a research and development
collaboration with Arizona State University related to biofuels. This project
has led to several commercial opportunities that we are actively engaged in to
help grow biofuels on large scales."

On the product development front, Raven worked with its construction customers
to introduce VaporBlock^® G, an innovative, under-concrete-slab vapor barrier
produced with a layer of post-consumer recycled content. VaporBlock G is the
first vapor barrier on the market to exceed ASTM Class A and qualify for LEED
standards.

Said Rykhus, "For fiscal 2014, we expect continued growth for Engineered
Films, despite a challenging environment. We will likely not exceed the
exceptional first quarter fiscal 2013 sales and operating income levels, but
we expect a solid full-year performance.

"We continue to believe that geomembrane film sales will be a rising part of
our market mix due to the critical need to protect water and other
environmental resources. We also anticipate growth in agricultural films.
Operationally, we recently installed a reclaim production line designed to
capture and recycle excess polymer material from internal manufacturing
processes. The line should help reduce costs and is expected to reprocess up
to 15 million pounds of resin pellets annually.

"Pounds of film sold rose about 3 percent in fiscal 2013 and we have extrusion
capacity to further grow this business—which we intend to do through R&D
investments in new opportunities, enhancements to our existing products and
development of specialty films with value-added characteristics."

Diversification Produces Cash and Cash Flows

At January 31, 2013, cash and investment balances were $49.4 million, up from
$25.8 million a year ago. Twelve-month operating cash flows increased to $76.5
million from $43.8 million in the prior year. Increases in capital
expenditures were offset by cash flows from operations. In fiscal 2013, the
company paid $15.2 million in dividends to shareholders ($0.42 per share) and
made capital expenditures totaling $29.7 million. Accounts receivable
decreased to $56.3 million compared with $60.8 million at January 31, 2013.
Inventories were $46.2 million, down from $54.8 million one year earlier.
Average accounts receivable days outstanding and inventory turns were
relatively unchanged from the prior year.

R&D Credit Lowers Income Tax Expense

Fourth quarter fiscal 2013 net income benefited from the reinstatement of the
U.S. research and development income tax credit in January 2013.

Business Development Pipeline to Fuel Growth

Said Rykhus, "At Raven, we solve great challenges. It's this purpose that
keeps us grounded in markets and opportunities that have meaning, align with
our values and provide profitable growth. For the first quarter, we continue
to see positive trends in Applied Technology, though we face a challenging
year-over-year comparison. Aerostar will again be impacted by a lack of
aerostat orders. And within Engineered Films, we anticipate a challenging
environment and another tough year-over-year comparison. Therefore, we do not
expect to grow earnings in the first quarter of fiscal 2014.

"That said, one of the hallmarks of Raven's model is the ongoing investment in
our business development pipeline. Looking ahead to all of 2014, the quality
of our pipeline is very robust and encouraging. It is this strength that
ensures our competitiveness and gives us confidence in our outlook for
earnings growth for the full year."

In fiscal 2014, Raven will build and nurture its business development
pipeline. Management expects to see:

  *Earnings growth from new product developments for existing markets and key
    adjacent market expansions;
  *Potential acquisitions that support the company's overall product and
    growth strategy;
  *Capital expansions to address capacity and capabilities; and
  *Earnings growth from further international market penetration with product
    lines from all three divisions.

Concluded Rykhus, "We expect to return to historic earnings growth levels by
leveraging the investments we've made over the last few years—and will
continue to make—and through disciplined execution of the Raven business
model."

Conference Call Information

Raven will host a conference call today, Tuesday, March 12, 2013, at 9:00 a.m.
Central Time to discuss fourth-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 Tuesday, March 19, 2013. To access the replay,
dial 1-855-859-2056 and enter conference ID: 13693364. 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 the precision
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 January 31, Twelve Months Ended January 31,
                                   Fav                            Fav
                                      (Unfav)                          (Unfav)
               2013       2012       Change   2013        2012        Change
Net sales       $89,575  $96,326  (7) %    $406,175  $381,511  6 %
Cost of goods   62,676    68,454            278,502    265,319    
sold
Gross profit    26,899    27,872    (3) %    127,673    116,192    10 %
                                                                 
Research and
development     2,905     2,608             13,367     9,724      
expenses
Selling,
general and     8,513     8,705             36,614     30,827     
administrative
expenses
Operating       15,481    16,559    (7) %    77,692     75,641     3 %
income
                                                                 
Other income    158       150               (46)       57         
(expense), net
Income before   15,639    16,709    (6) %    77,646     75,698     3 %
income taxes
                                                                 
Income taxes    4,537     5,649             25,091     25,063     
Net income      11,102    11,060    -- %     52,555     50,635     4 %
                                                                 
Net income
attributable to
the             5         58                10         66         
noncontrolling
interest
                                                                 
Net income
attributable to
Raven           $11,097  $11,002  1 %      $52,545   $50,569   4 %
Industries,
Inc.
                                                                 
Net income per
common share:                                                     
(a)
-basic          $0.31      $0.30      3 %      $1.45       $1.40       4 %
-diluted        $0.30      $0.30      -- %     $1.44       $1.39       4 %
                                                                 
Weighted
average common                                                    
shares: (a)
-basic          36,381     36,268             36,345      36,234      
-diluted        36,513     36,520             36,533      36,453      
                                                                 
                                                                 
(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 January 31,  Twelve Months Ended January 31,
                                   Fav                            Fav
                                      (Unfav)                          (Unfav)
              2013        2012       Change   2013        2012        Change
Net sales (a)                                                     
Applied        $38,432   $32,545  18 %     $171,778  $145,261  18 %
Technology
Engineered     30,781     35,984    (14) %   141,976    133,481    6 %
Films
Aerostar       23,186     29,685    (22) %   102,051    107,811    (5) %
Intersegment   (2,824)     (1,888)            (9,630)     (5,042)     
eliminations
Total Company  $89,575   $96,326  (7) %    $406,175  $381,511  6 %
                                                                 
Operating                                                         
income (a)
Applied        $12,342   $8,800   40 %     $59,590   $49,750   20 %
Technology
Engineered     4,388      6,514     (33) %   25,115     21,501     17 %
Films
Aerostar       2,760      5,336     (48) %   10,341     18,308     (44) %
Intersegment   26          (194)             (61)        (188)      
eliminations
Total segment  $19,516   $20,456          $94,985   $89,371   
income
Corporate      (4,035)     (3,897)    (4) %    (17,293)    (13,730)    (26) %
expenses
Total Company  $15,481   $16,559  (7) %    $77,692   $75,641   3 %
                                                                 
(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 twelve months ended January 31, 2013 and 2012 reflect
this realignment.




RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars In thousands) (Unaudited)
                                              
                                              
                                    January 31 January 31
                                    2013       2012
ASSETS                                         
Cash and cash equivalents            $49,353  $25,842
Accounts receivable, net             56,303    60,759
Inventories                          46,189    54,756
Other current assets                 4,903     6,202
Total current assets                 156,748   147,559
                                              
Property, plant and equipment, net   81,238    61,894
Other assets, net                    35,224    36,250
                                    $273,210 $245,703
                                              
LIABILITIES AND SHAREHOLDERS' EQUITY           
Accounts payable                     $14,438  $16,162
Accrued and other liabilities        18,623    24,484
Total current liabilities            33,061    40,646
                                              
Other liabilities                    18,702    24,467
Shareholders' equity                 221,447   180,590
                                    $273,210 $245,703




RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED CASH FLOWS
(Dollars in thousands) (Unaudited)
                                             
                                             Twelve Months Ended January 31,
                                             2013             2012
Cash flows from operating activities:                         
Net income                                    $52,555        $50,635
Adjustments to reconcile net income to net                    
cash provided by operating activities:
Depreciation and amortization                 13,098          9,268
Other operating activities, net               10,803          (16,072)
Net cash provided by operating activities     76,456          43,831
                                                             
Cash flows from investing activities:                         
Capital expenditures                          (29,675)        (29,015)
Payments related to business acquisition, net --             (11,787)
of cash acquired
Other investing activities, net               (255)           489
Net cash used in investing activities         (29,930)        (40,313)
                                                             
Cash flows from financing activities:                         
Dividends paid                                (15,244)        (13,025)
Repayment of line of credit                   --             (2,869)
Payment of acquisition-related contingent     (8,367)         --
liabilities
Other financing activities, net               604             660
Net cash used in financing activities         (23,007)        (15,234)
                                                             
Effect of exchange rate changes on cash       (8)             (5)
                                                             
Net increase in cash and cash equivalents     23,511          (11,721)
Cash and cash equivalents at beginning of     25,842          37,563
period
Cash and cash equivalents at end of period    $49,353        $25,842

CONTACT: 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
         msullivan@padillaspeer.com
 
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