Raven Industries, Inc. (the Company) (NASDAQ:
RAVN) today reported financial results for the fourth
quarter and fiscal year that ended January 31, 2019.
Fourth Quarter Fiscal 2019 Noteworthy
Items:
- Applied Technology closed on the acquisition of AgSync, Inc.
(AgSync), further strengthening Applied Technology's Slingshot®
platform and the division's subscription-based service model;
- Engineered Films began the commissioning process for Line 15
which will provide additional capacity to capture opportunities
within the industrial and geomembrane markets;
- Consolidated net sales decreased 8 percent year-over-year in
the fourth quarter, but increased 5 percent year-over-year when
excluding the impact of abnormally high hurricane recovery film
sales;1
- Engineered Films' net sales decreased 11 percent year-over-year
on a reported basis in the fourth quarter, but increased 14 percent
year-over-year when excluding the impact of hurricane recovery film
sales;2
- Subsequent to the end of fiscal year 2019, Engineered Films had
a successful go-live on the Company's new enterprise resource
planning (ERP) platform.
Fiscal 2019 Noteworthy Items:
- Aerostar was awarded a new five-year $36
million radar systems contract, positioning this strategic
product line for strong future growth;
- Aerostar doubled division profit to $8.2 million and expanded
division profit margin by 580 basis points over the prior
year;
- Applied Technology expanded division profit margin 500 basis
points and achieved a division profit margin of over 30 percent for
the full year;
- Applied Technology launched its new Latin American headquarters
in Brazil, aggressively pursuing organic growth opportunities
in this key region;
- Engineered Films completed the integration of Colorado Lining
International, Inc. (CLI) and achieved the Company's
expectations during its first full year of operations;
- Aerostar achieved significant performance milestones in the
advancement of its stratospheric balloon platform;
- Aerostar divested its client private business in alignment with
its strategy to focus on its core business;
- The Company recognized a $5.8 million non-operating
gain on the sale of its ownership interest in Site-Specific
Technology Development Group, Inc. (SST);
- The Company committed to support South Dakota State
University with a $5 million gift for the expansion of its
precision agriculture program and the establishment of its Raven
Precision Agriculture Center;
- The Company announced the appointment of Janet
Holloway and Lois Martin to its Board of Directors;
- The Company invested a combined $24 million in research and
development to drive new product growth and competitiveness within
Applied Technology and Aerostar.
Fourth Quarter Results: Net sales
for the fourth quarter of fiscal 2019 were $88.0 million, down 8.1
percent versus the fourth quarter of fiscal 2018. Hurricane
recovery film sales were $15.8 million in the fourth quarter of
last year compared to $4.1 million in the fourth quarter of this
year. Excluding sales of hurricane recovery film, consolidated net
sales in the fourth quarter increased $3.9 million or nearly 5
percent year-over-year.1
Operating income for the fourth quarter of fiscal 2019 was $3.4
million versus operating income of $11.4 million in the fourth
quarter of fiscal 2018, declining 70.6 percent year-over-year. A
reduction in operating leverage as a result of the significant
decline in hurricane recovery film sales, lower Aerostar
profitability due to timing of contracts, and higher spending on
Project Atlas primarily drove the year-over-year decrease in
consolidated operating income.
Net income for the fourth quarter of fiscal 2019 was $3.0
million, or $0.08 per diluted share, versus net income of $8.4
million, or $0.23 per diluted share, in last year's fourth quarter.
The Company anticipated a decline in net income due to the
significant reduction in hurricane recovery film sales in the
fourth quarter. Included in this year's fourth quarter results on a
pre-tax basis were expenses related to Project Atlas, totaling $1.2
million ($1.0 million after-tax, or $0.03 per diluted share). In
the fourth quarter of last year, Project Atlas related expenses
were approximately $0.6 million ($0.4 million after-tax, or $0.01
per diluted share). Aerostar recently began its implementation of
Project Atlas and is expected to go live by the end of fiscal 2020.
Project Atlas related expenses in fiscal 2020 are expected to be
in-line with those incurred in fiscal 2019.
Fiscal Year 2019 Results:Net sales for fiscal
2019 were $406.7 million, up 7.8 percent versus fiscal 2018.
This is a new record sales year for the Company, surpassing the
previous record from fiscal 2013. The current mix of sales versus
fiscal 2013 is more strategic as evidenced by contract
manufacturing sales consisting of less than 2 percent of total
sales in fiscal 2019, down from 16 percent in fiscal 2013.
Hurricane recovery film sales were $24.2 million in fiscal 2018
compared to $14.5 million in fiscal 2019. Excluding sales of
hurricane recovery film, consolidated net sales in fiscal 2019
increased $39.1 million, or 11.1 percent year-over-year.1 All
divisions achieved year-over-year growth during the fiscal year,
led by a 27.4 percent increase in Aerostar. Excluding the sales of
hurricane recovery film, Engineered Films increased sales more than
12 percent year-over-year.2
Operating income for fiscal 2019 was $55.1 million, down
6.8 percent, versus $59.2 million in fiscal 2018. The
current year operating income was reduced by an expense of $4.5
million related to a gift to South Dakota State University and an
increase in Project Atlas related expenses of $3.1 million.
Excluding these items, operating income increased significantly
more than reported results year-over-year. Additionally, investment
in research and development activities within Applied Technology
and Aerostar increased, and operating leverage within Engineered
Films decreased due to significantly lower hurricane recovery film
sales, both of which contributed to the year-over-year decline.
These factors were partially offset by lower legal expenses and
favorable legal recoveries in fiscal 2019.
Net income for fiscal 2019 was $51.9 million, or $1.42
per diluted share, versus net income of $41.0 million,
or $1.13 per diluted share, in fiscal 2018. Included in fiscal
2019 results on a pre-tax basis was a non-operating gain on the
sale of the Company's ownership interest in SST of $5.8 million
($4.6 million after-tax, or $0.13 per diluted share); an expense
associated with the previously announced gift to South Dakota State
University of $4.5 million ($3.6 million after-tax, or $0.10 per
diluted share); and Project Atlas related expenses of $4.0 million
($3.2 million after-tax, or $0.09 per diluted share). In fiscal
2018, Project Atlas related expenses were $0.9 million ($0.6
million after-tax, or $0.02 per diluted share). Additionally, the
10.1 percentage point reduction in the Company's effective tax
rate, excluding discrete items, resulted in a tax benefit relative
to the prior year of $6.2 million, or $0.17 per diluted share.
Balance Sheet and Cash Flow:At the end of the
fourth quarter of fiscal 2019, cash and cash equivalents totaled
$65.8 million, decreasing $2.9 million versus the prior quarter.
The acquisition of AgSync during the fourth quarter principally
drove the decrease in cash versus the third quarter.
Net working capital as a percentage of annualized net sales
deteriorated, from 26.3 percent in the fourth quarter of last year
to 28.5 percent in this year’s fourth quarter.3 This year-over-year
change is heavily influenced by hurricane recovery film demand and
the related impacts to inventory, accounts receivable, and net
sales.
While not an asset on the balance sheet, talent is an important
asset to the Company. The Company diligently works to attract,
develop, retain and select talent while creating a Raven culture
where talent thrives. Leadership development is leveraging that
talent to build a bench of business leaders, and promotions from
within the Company are an indicator of success. In fiscal 2019,
approximately two-thirds of open leadership positions were filled
by internal candidates, including the recent promotion of Nicole
Freesemann to Vice President of Human Resources.
Return on Sales, Assets and Equity:During
fiscal 2019, the Company invested heavily across the enterprise.
These investments included research and development activities, new
manufacturing capacity, Project Atlas, and the acquisition of
AgSync. The Company also continued to refine its focus on core
operations by divesting two non-strategic assets during the year,
Aerostar's client private business and SST. These actions were
driven by the Company's focus on long-term value creation and to
drive improved financial returns through sales and earnings growth.
The following provides a summary of the Company's return on sales,
return on assets and return on equity over the last 10 fiscal
years:
|
FY19 |
10 Year Average |
High |
Low |
Return on Sales
(4) |
12.7 |
% |
10.1 |
% |
13.3%
- FY12 |
1.8% -
FY16 |
Return on Assets
(5) |
15.1 |
% |
15.1 |
% |
23.3%
- FY12 |
1.4% -
FY16 |
Return on
Equity (6) |
17.7 |
% |
19.1 |
% |
31.4% - FY12 |
1.7% - FY16 |
Applied Technology Division:Net sales for
Applied Technology in the fourth quarter of fiscal 2019 were $29.2
million, down 4.1 percent year-over-year. Geographically, domestic
and international sales were each down approximately 4 percent
year-over-year. These decreases were primarily driven by a slower
spraying season for ag retailers, which reduced demand.
The AgSync acquisition was completed on January 1, 2019. AgSync,
headquartered in Wakarusa, Indiana, develops software solutions for
ag retailers and aerial applicators to overcome challenges related
to managing large fleets, multiple locations, limited personnel and
disconnected software systems in their operations. Applied
Technology expects to leverage this acquisition to enhance its
Slingshot® platform by delivering a more seamless logistics
solution for ag retailers, custom applicators and enterprise farms.
This strategic expansion of the Slingshot® platform is an effort to
provide further value to the end customer and grow the division's
subscription-based service model.
Division operating income in the fourth quarter of fiscal 2019
was $6.6 million, up $0.8 million or 13.1 percent versus the fourth
quarter of fiscal 2018. Division operating margin increased 340
basis points year-over-year, from 19.1 percent to 22.5 percent. The
division continues to achieve strong profitability while continuing
to invest in research and development activities to drive new
product innovation. Division operating income in the fourth quarter
of fiscal 2018 included expenses related to the resolution of two
legal matters.
Engineered Films Division:Net sales for
Engineered Films in the fourth quarter of fiscal 2019 were $49.5
million, down $6.1 million or 11.0 percent year-over-year. The
decrease in net sales was expected and driven by a significant
year-over-year decline in hurricane recovery film sales. In the
fourth quarter of fiscal 2018, hurricane recovery film sales were
$15.8 million. Sales of hurricane recovery film in the fourth
quarter of this year were $4.1 million, down $11.7 million
year-over-year. Excluding the impact of sales from hurricane
recovery film, the division's net sales increased 14.1 percent and
volume, measured in pounds sold, increased approximately 9 percent
year-over-year.2
In the first quarter of fiscal 2020, the division expects to
realize another substantial decline in hurricane recovery film
sales versus the prior year comparative period. In the first
quarter of fiscal 2019, the division realized $8.9 million in sales
of hurricane recovery film due to unusually high event-driven
demand, which is not expected to repeat in the first quarter of
fiscal 2020. The first quarter of fiscal 2019 was the only quarter
in fiscal year 2019 with significant hurricane recovery film sales,
and additional significant declines are not expected to reoccur as
the division progresses through fiscal 2020. Market position
remains strong across all end-markets served by Engineered Films,
and the division recently began the commissioning process for Line
15, which will expand capacity in order to capitalize on new
opportunities within the industrial and geomembrane markets.
Division operating income in the fourth quarter of fiscal 2019
was $6.5 million, down $5.5 million or 45.8 percent versus the
fourth quarter of fiscal 2018. Division operating income, as a
percentage of sales, decreased from 21.5 percent in the fourth
quarter of last year to 13.1 percent in this year's fourth quarter.
The year-over-year decrease was driven primarily by lower sales
volume, including the significant reduction in hurricane recovery
film sales, and the corresponding negative operating leverage.
Aerostar Division:Net sales for Aerostar during
the fourth quarter of fiscal 2019 were $9.4 million, down $0.4
million or 4.3 percent versus the fourth quarter of fiscal 2018.
This decrease was driven by the decline in sales associated with
the divestiture of the division's client private business in the
first quarter of fiscal 2019. The divested client private business
generated net sales of $1.2 million in the fourth quarter of fiscal
2018. Excluding the client private business, sales increased
year-over-year.
The timing of stratospheric balloon contracts and increased
research and development activities drove a $2.3 million decrease
in profitability in the fourth quarter. Aerostar is a
contract-based business, and the timing of contracts will vary.
Aerostar maintains research and development activities throughout
the year, and when contracts are completed, the division may endure
a temporary decrease in profit until the next contract begins.
Because of this variability, it is helpful to also view Aerostar's
performance over a longer period of time, such as a
trailing-twelve-month period.
Market Outlook:For Applied Technology, the
Company does not expect a significant ag market rebound in the next
twelve to eighteen months. Corn surplus remains near an all-time
high, and U.S. farm income has decreased over each of the past five
years. Offsetting these general ag market challenges is the growing
demand for machine replacements that have been deferred for several
years, international growth initiatives, which will help diversify
exposure of end market conditions, and the growing need and desire
for technology adoption across the agricultural industry.
With the recent variability in oil prices, Engineered Films is
monitoring the energy market but is not seeing significant signs of
weakness. At this time, the Company believes that if oil prices
remain in the $50 to $60 dollar per barrel range, there will not be
a significant impact to energy film demand. If oil prices go below
or above that range, energy film demand could be impacted.
Currently, energy film sales represent approximately 20 percent of
the division’s net sales, which is significantly lower than just a
few years ago. Diversification has strengthened the division; this
has been achieved through investment in additional manufacturing
capacity, to capitalize on growth opportunities across its end
markets, and the acquisition of CLI, which provides fabrication and
installation services focused in the geomembrane market. Capital
equipment investments over the past three years in Engineered Films
have been allocated to new production lines designed to produce
higher-margin specialty films for sale into our industrial
market.
Fiscal 2019 Recap and Fiscal 2020 Outlook:"We
are very pleased with how all three divisions executed according to
their long-term strategic plan in fiscal 2019," said Dan Rykhus,
President and CEO. “The Company achieved strong financial results,
including record sales in fiscal 2019, while investing for
long-term growth. Each division accomplished this in ways that are
unique to their specific market position and strategy.
"Despite operating in the fifth year of a lackluster ag market,
Applied Technology continued its growth in sales and achieved a
significant year-over-year increase in operating profit. Leveraging
previous investments in research and development, the division
realized significant sales growth on RS1™, its new market-leading
steering platform. The acquisition of AgSync provides a proven
logistics solution uniquely designed for the ag retail market. It
helps strengthen the division's Slingshot® platform and focuses on
serving ag retailers, which are Applied Technology's core
customers. We believe the division is well-positioned to execute on
its long-term strategy during fiscal 2020, leveraging this
acquisition and the continual investment in research and
development to provide a consistent cadence of new product
innovation delivered to the market. Additionally, Applied
Technology is diligently entering year two of driving international
growth through its Latin American headquarters in Brazil.
"Engineered Films achieved a strong financial performance in
fiscal 2019 despite the significant decline in hurricane recovery
film sales. The division recently began the commissioning process
for Line 15 and is looking forward to the additional capacity it
brings to serve the increasing demand in the industrial and
geomembrane markets. Immediately after the fiscal year ended,
Engineered Films went live with Project Atlas and became
operational in this new system. Looking towards fiscal 2020, we
believe the division is positioned to execute and capitalize on the
opportunities within each of the markets it serves.
"With a more narrowed focus on Aerostar's stratospheric balloon
platform and radar systems, the division increased net sales by
double digits and nearly doubled operating income year-over-year.
The division is focused on winning new contracts in order to build
on the tremendous performance achieved in fiscal 2019. As we have
seen in the past couple of years, Aerostar is a contract-based
business, and the timing of contracts can cause short-term
volatility in financial performance. However, the Company is very
pleased with the results and performance of Aerostar over the past
two years, and we are excited about the long-term trajectory of the
division.
"Our investments in technology development and manufacturing
capacity along with our strong balance sheet and access to
additional funding for strategic acquisitions has positioned Raven
Industries for long-term success. We look forward to fiscal 2020,
and our goal remains to generate annual earnings growth of 10
percent over the long-term."
Regulation G:The information presented in this
earnings release regarding consolidated and Engineered Films' net
sales excluding the impact of hurricane recovery film sales, as
well as the information regarding consolidated and segment earnings
before interest, taxes, depreciation, and amortization (EBITDA) do
not conform to generally accepted accounting principles (GAAP) and
should not be construed as an alternative to the reported results
determined in accordance with GAAP. Additionally, management has
included this non-GAAP information to assist in understanding the
operating performance of the Company and its operating segments as
well as the comparability of results. The non-GAAP information
provided may not be consistent with the methodologies used by other
companies. All non-GAAP information is reconciled with reported
GAAP results in the tables below.
Conference Call Information:The Company will
host an investor conference call to discuss fourth quarter fiscal
2019 results tomorrow, Thursday, March 21, 2019, at 9:00 a.m.
Central Time (10:00 a.m. Eastern Time). The conference call audio
will be available to all interested parties via a simultaneous
webcast that can be accessed through the Investor Relations section
of the Company’s website at http://investors.ravenind.com.
Analysts and investors are invited to join the conference call by
dialing: +1 (866) 393-0676. The event is scheduled to last one
hour. For those unable to listen live, an audio replay of the event
will be archived on the Company's website.
About Raven Industries, Inc.:Raven Industries
(NASDAQ: RAVN) is dedicated to providing innovative, high-value
products and solutions that solve great challenges throughout the
world. Raven is a leader in precision agriculture, high-performance
specialty films, and lighter-than-air technologies. Since 1956,
Raven has designed, produced, and delivered exceptional solutions,
earning the company a reputation for innovation, product quality,
high performance, and unmatched service. For more information,
visit http://ravenind.com.
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. The Company intends that all
forward-looking statements be subject to the safe harbor provisions
of the Private Securities Litigation Reform Act.
Generally, forward-looking statements can be identified by words
such as "may," "will," "plan," "believe," "expect," "intend,"
"anticipate," "potential," "should," "estimate," "predict,"
"project," "would," and similar expressions, which are generally
not historical in nature. However, the absence of these words or
similar expressions does not mean that a statement is not
forward-looking. All statements that address operating performance,
events or developments that we expect or anticipate will occur in
the future - including statements relating to our future operating
or financial performance or events, our strategy, goals, plans and
projections regarding our financial position, our liquidity and
capital resources, and our product development - are
forward-looking statements.
Management believes that these forward-looking statements are
reasonable as and when made. However, caution should be taken not
to place undue reliance on any such forward-looking statements,
because such statements speak only as of the date when made. Our
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law. In addition,
forward-looking statements are subject to certain known risks, as
described in the Company’s 10K under Item 1A, and unknown risks and
uncertainties that may cause actual results to differ materially
fromour Company’s historical experience and our present
expectations or projections.
Contact
Information: |
|
Bo Larsen |
|
Investor Relations
Director |
|
Raven Industries,
Inc. |
|
+1(605)-336-2750 |
|
Source: Raven Industries, Inc.
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, |
|
2019 |
|
2018 |
|
Fav (Un) Change |
|
2019 |
|
2018 |
|
Fav (Un) Change |
Net sales |
$ |
88,022 |
|
|
$ |
95,823 |
|
|
(8.1 |
)% |
|
$ |
406,668 |
|
|
$ |
377,317 |
|
|
7.8 |
% |
Cost of sales |
62,732 |
|
|
66,060 |
|
|
|
|
|
274,119 |
|
|
255,752 |
|
|
|
|
Gross
profit |
25,290 |
|
|
29,763 |
|
|
(15.0 |
)% |
|
132,549 |
|
|
121,565 |
|
|
9.0 |
% |
Gross
profit percentage |
28.7 |
% |
|
31.1 |
% |
|
|
|
|
32.6 |
% |
|
32.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development expenses |
8,260 |
|
|
4,617 |
|
|
|
|
|
26,174 |
|
|
16,936 |
|
|
|
|
Selling, general, and
administrative expenses |
13,669 |
|
|
13,724 |
|
|
|
|
|
51,242 |
|
|
45,200 |
|
|
|
|
Long-lived asset
impairment loss |
— |
|
|
— |
|
|
|
|
|
— |
|
|
259 |
|
|
|
|
Operating
income |
3,361 |
|
|
11,422 |
|
|
(70.6 |
)% |
|
55,133 |
|
|
59,170 |
|
|
(6.8 |
)% |
Operating
income percentage |
3.8 |
% |
|
11.9 |
% |
|
|
|
|
13.6 |
% |
|
15.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net |
223 |
|
|
143 |
|
|
|
|
|
6,437 |
|
|
(184 |
) |
|
|
|
Income
before income taxes |
3,584 |
|
|
11,565 |
|
|
(69.0 |
)% |
|
61,570 |
|
|
58,986 |
|
|
4.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
635 |
|
|
3,125 |
|
|
|
|
|
9,697 |
|
|
17,967 |
|
|
|
|
Net
income |
2,949 |
|
|
8,440 |
|
|
(65.1 |
)% |
|
51,873 |
|
|
41,019 |
|
|
26.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to noncontrolling interest |
(1 |
) |
|
(1 |
) |
|
|
|
|
79 |
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income attributable to Raven Industries, Inc. |
$ |
2,950 |
|
|
$ |
8,441 |
|
|
(65.1 |
)% |
|
$ |
51,794 |
|
|
$ |
41,022 |
|
|
26.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Basic |
$ |
0.08 |
|
|
$ |
0.24 |
|
|
(66.7 |
)% |
|
$ |
1.44 |
|
|
$ |
1.14 |
|
|
26.3 |
% |
-
Diluted |
$ |
0.08 |
|
|
$ |
0.23 |
|
|
(65.2 |
)% |
|
$ |
1.42 |
|
|
$ |
1.13 |
|
|
25.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares: |
|
|
|
|
|
|
|
|
|
|
|
-
Basic |
36,061 |
|
|
35,877 |
|
|
|
|
36,007 |
|
|
36,050 |
|
|
|
-
Diluted |
36,433 |
|
|
36,334 |
|
|
|
|
36,439 |
|
|
36,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RAVEN INDUSTRIES,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(Dollars in thousands)
(Unaudited)
|
January 31 |
|
January 31 |
|
2019 |
|
2018 |
ASSETS |
|
|
|
Cash and cash
equivalents |
$ |
65,787 |
|
|
$ |
40,535 |
|
Accounts
receivable, net |
54,472 |
|
|
58,532 |
|
Inventories |
54,076 |
|
|
55,351 |
|
Other
current assets |
8,736 |
|
|
5,861 |
|
Total
current assets |
183,071 |
|
|
160,279 |
|
|
|
|
|
Property,
plant and equipment, net |
106,615 |
|
|
106,280 |
|
Goodwill
and amortizable intangibles, net |
67,235 |
|
|
57,294 |
|
Other
assets |
3,324 |
|
|
2,950 |
|
TOTAL ASSETS |
$ |
360,245 |
|
|
$ |
326,803 |
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
Accounts
payable |
$ |
8,272 |
|
|
$ |
13,106 |
|
Accrued
and other liabilities |
24,781 |
|
|
23,836 |
|
Total
current liabilities |
33,053 |
|
|
36,942 |
|
|
|
|
|
Other
liabilities |
18,235 |
|
|
13,795 |
|
Shareholders' equity |
308,957 |
|
|
276,066 |
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
360,245 |
|
|
$ |
326,803 |
|
|
|
|
|
|
|
|
|
Net Working
Capital and Net Working Capital Percentage3 |
|
|
|
|
|
|
|
Accounts receivable, net |
$ |
54,472 |
|
|
$ |
58,532 |
|
Plus: Inventories |
54,076 |
|
|
55,351 |
|
Less: Accounts
payable |
8,272 |
|
|
13,106 |
|
Net working
capital3 |
$ |
100,276 |
|
|
$ |
100,777 |
|
|
|
|
|
|
|
|
|
Annualized net
sales |
$ |
352,088 |
|
|
$ |
383,292 |
|
Net working capital
percentage3 |
28.5 |
% |
|
26.3 |
% |
RAVEN INDUSTRIES,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(Dollars in thousands)
(Unaudited)
|
Twelve Months Ended January 31, |
|
2019 |
|
2018 |
Cash flows from
operating activities: |
|
|
|
Net
income |
$ |
51,873 |
|
|
$ |
41,019 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
15,123 |
|
|
14,802 |
|
Long-lived asset impairment loss |
— |
|
|
259 |
|
Other
operating activities, net |
(1,044 |
) |
|
(11,119 |
) |
Net cash
provided by operating activities |
65,952 |
|
|
44,961 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Capital
expenditures |
(14,127 |
) |
|
(12,011 |
) |
Payments
related to business acquisitions |
(7,671 |
) |
|
(13,267 |
) |
Proceeds
from sale or maturity of investments |
7,334 |
|
|
250 |
|
Purchases
of investments |
(745 |
) |
|
(273 |
) |
Proceeds
(disbursements) from sale of assets, settlement of liabilities |
832 |
|
|
(333 |
) |
Other
investing activities, net |
(2,067 |
) |
|
(41 |
) |
Net cash
used in investing activities |
(16,444 |
) |
|
(25,675 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Dividends
paid |
(18,753 |
) |
|
(18,685 |
) |
Payments
for common shares repurchased |
— |
|
|
(10,000 |
) |
Payment
of acquisition-related contingent liabilities |
(1,324 |
) |
|
(408 |
) |
Other
financing activities, net |
(3,678 |
) |
|
(628 |
) |
Net cash
used in financing activities |
(23,755 |
) |
|
(29,721 |
) |
|
|
|
|
Effect of exchange rate
changes on cash |
(501 |
) |
|
322 |
|
|
|
|
|
Net increase (decrease)
in cash and cash equivalents |
25,252 |
|
|
(10,113 |
) |
Cash and cash
equivalents at beginning of period |
40,535 |
|
|
50,648 |
|
Cash and cash
equivalents at end of period |
$ |
65,787 |
|
|
$ |
40,535 |
|
|
|
|
|
|
|
|
|
RAVEN INDUSTRIES,
INC.SALES AND OPERATING INCOME BY
SEGMENT(Dollars in thousands)
(Unaudited)
|
|
Three Months Ended January 31, |
|
Twelve Months Ended January 31, |
|
|
2019 |
|
2018 |
|
Fav (Un) Change |
|
2019 |
|
2018 |
|
Fav (Un) Change |
Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
Applied
Technology |
|
$ |
29,217 |
|
|
$ |
30,455 |
|
|
(4.1 |
)% |
|
$ |
129,749 |
|
|
$ |
124,688 |
|
|
4.1 |
% |
Engineered Films |
|
49,468 |
|
|
55,607 |
|
|
(11.0 |
)% |
|
226,574 |
|
|
213,298 |
|
|
6.2 |
% |
Aerostar |
|
9,418 |
|
|
9,837 |
|
|
(4.3 |
)% |
|
50,867 |
|
|
39,915 |
|
|
27.4 |
% |
Intersegment eliminations |
|
(81 |
) |
|
(76 |
) |
|
|
|
|
(522 |
) |
|
(584 |
) |
|
|
|
Consolidated net sales |
|
$ |
88,022 |
|
|
$ |
95,823 |
|
|
(8.1 |
)% |
|
$ |
406,668 |
|
|
$ |
377,317 |
|
|
7.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Applied
Technology |
|
$ |
6,571 |
|
|
$ |
5,810 |
|
|
13.1 |
% |
|
$ |
39,044 |
|
|
$ |
31,257 |
|
|
24.9 |
% |
Engineered Films |
|
6,473 |
|
|
11,938 |
|
|
(45.8 |
)% |
|
39,714 |
|
|
47,324 |
|
|
(16.1 |
)% |
Aerostar |
|
(2,300 |
) |
|
(43 |
) |
|
NMF8 |
|
|
8,179 |
|
|
4,122 |
|
|
98.4 |
% |
Intersegment eliminations |
|
(2 |
) |
|
23 |
|
|
|
|
|
(35 |
) |
|
20 |
|
|
|
|
Total
segment income |
|
$ |
10,742 |
|
|
$ |
17,728 |
|
|
(39.4 |
)% |
|
$ |
86,902 |
|
|
$ |
82,723 |
|
|
5.1 |
% |
Corporate
expenses |
|
(7,381 |
) |
|
(6,306 |
) |
|
(17.0 |
)% |
|
(31,769 |
) |
|
(23,553 |
) |
|
(34.9 |
)% |
Consolidated operating income |
|
$ |
3,361 |
|
|
$ |
11,422 |
|
|
(70.6 |
)% |
|
$ |
55,133 |
|
|
$ |
59,170 |
|
|
(6.8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
percentages |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Applied
Technology |
|
22.5 |
% |
|
19.1 |
% |
|
340bps |
|
|
30.1 |
% |
|
25.1 |
% |
|
500bps |
|
Engineered Films |
|
13.1 |
% |
|
21.5 |
% |
|
(840)bps |
|
|
17.5 |
% |
|
22.2 |
% |
|
(470)bps |
|
Aerostar |
|
(24.4 |
)% |
|
(0.4 |
)% |
|
(2400)bps |
|
|
16.1 |
% |
|
10.3 |
% |
|
580bps |
|
Consolidated operating income |
|
3.8 |
% |
|
11.9 |
% |
|
(810)bps |
|
|
13.6 |
% |
|
15.7 |
% |
|
(210)bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RAVEN INDUSTRIES, INC. |
EBITDA REGULATION G RECONCILIATION7 |
(Dollars in thousands) (Unaudited) |
|
Three Months Ended January 31, |
|
Twelve Months Ended January 31, |
|
|
|
|
|
Fav (Un) |
|
|
|
|
|
Fav (Un) |
Segments |
2019 |
|
2018 |
|
Change |
|
2019 |
|
2018 |
|
Change |
Applied
Technology |
|
|
|
|
|
|
|
|
|
|
|
Reported operating
income |
$ |
6,571 |
|
|
$ |
5,810 |
|
|
13.1 |
% |
|
$ |
39,044 |
|
|
$ |
31,257 |
|
|
24.9 |
% |
Plus: Depreciation and
amortization |
1,015 |
|
|
841 |
|
|
20.7 |
% |
|
3,433 |
|
|
3,365 |
|
|
2.0 |
% |
ATD EBITDA |
$ |
7,586 |
|
|
$ |
6,651 |
|
|
14.1 |
% |
|
$ |
42,477 |
|
|
$ |
34,622 |
|
|
22.7 |
% |
ATD EBITDA % of Net
Sales |
26.0 |
% |
|
21.8 |
% |
|
|
|
|
32.7 |
% |
|
27.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered
Films |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported operating
income |
$ |
6,473 |
|
|
$ |
11,938 |
|
|
(45.8 |
)% |
|
$ |
39,714 |
|
|
$ |
47,324 |
|
|
(16.1 |
)% |
Plus: Depreciation and
amortization |
2,222 |
|
|
2,337 |
|
|
(4.9 |
)% |
|
9,149 |
|
|
8,761 |
|
|
4.4 |
% |
EFD EBITDA |
$ |
8,695 |
|
|
$ |
14,275 |
|
|
(39.1 |
)% |
|
$ |
48,863 |
|
|
$ |
56,085 |
|
|
(12.9 |
)% |
EFD EBITDA % of Net
Sales |
17.6 |
% |
|
25.7 |
% |
|
|
|
|
21.6 |
% |
|
26.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerostar |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported operating
income |
$ |
(2,300 |
) |
|
$ |
(43 |
) |
|
NMF8 |
|
|
$ |
8,179 |
|
|
$ |
4,122 |
|
|
98.4 |
% |
Plus: Depreciation and
amortization |
229 |
|
|
274 |
|
|
(16.4 |
)% |
|
891 |
|
|
1,386 |
|
|
(35.7 |
)% |
Aerostar EBITDA |
$ |
(2,071 |
) |
|
$ |
231 |
|
|
(996.5 |
)% |
|
$ |
9,070 |
|
|
$ |
5,508 |
|
|
64.7 |
% |
Aerostar EBITDA % of
Net Sales |
(22.0 |
)% |
|
2.3 |
% |
|
|
|
|
17.8 |
% |
|
13.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income attributable
to Raven Industries |
$ |
2,950 |
|
|
$ |
8,441 |
|
|
(65.1 |
)% |
|
$ |
51,794 |
|
|
$ |
41,022 |
|
|
26.3 |
% |
Interest (income)
expense, net |
(182 |
) |
|
49 |
|
|
|
|
|
(372 |
) |
|
188 |
|
|
|
|
Income tax expense |
635 |
|
|
3,125 |
|
|
|
|
|
9,697 |
|
|
17,967 |
|
|
|
|
Plus: Depreciation and
amortization |
3,850 |
|
|
3,817 |
|
|
|
|
|
15,123 |
|
|
14,802 |
|
|
|
|
Consolidated
EBITDA |
$ |
7,253 |
|
|
$ |
15,432 |
|
|
(53.0 |
)% |
|
$ |
76,242 |
|
|
$ |
73,979 |
|
|
3.1 |
% |
Consolidated EBITDA %
of Net Sales |
8.2 |
% |
|
16.1 |
% |
|
|
|
|
18.7 |
% |
|
19.6 |
% |
|
|
|
RAVEN INDUSTRIES, INC. |
NET SALES EXCLUDING HURRICANE RECOVERY FILM SALES
REGULATION G RECONCILIATION1 & 2 |
(Dollars in thousands) (Unaudited) |
|
Three Months Ended January 31, |
|
Twelve Months Ended January 31, |
|
2019 |
|
2018 |
|
Fav (Un)Change |
|
2019 |
|
2018 |
|
Fav (Un)Change |
Engineered
Films |
|
|
|
|
|
|
|
|
|
|
|
Reported Net Sales |
$ |
49,468 |
|
|
$ |
55,607 |
|
|
(11.0 |
)% |
|
$ |
226,574 |
|
|
$ |
213,298 |
|
|
6.2 |
% |
Less: Hurricane
Recovery Film Sales |
4,065 |
|
|
15,801 |
|
|
(74.3 |
)% |
|
14,494 |
|
|
24,225 |
|
|
(40.2 |
)% |
Net
Sales, Excluding Hurricane Recovery Film Sales2 |
$ |
45,403 |
|
|
$ |
39,806 |
|
|
14.1 |
% |
|
$ |
212,080 |
|
|
$ |
189,073 |
|
|
12.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Raven |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported Net Sales |
$ |
88,022 |
|
|
$ |
95,823 |
|
|
(8.1 |
)% |
|
$ |
406,668 |
|
|
$ |
377,317 |
|
|
7.8 |
% |
Less: Hurricane
Recovery Film Sales |
4,065 |
|
|
15,801 |
|
|
(74.3 |
)% |
|
14,494 |
|
|
24,225 |
|
|
(40.2 |
)% |
Net Sales, Excluding
Hurricane Recovery Film Sales1 |
$ |
83,957 |
|
|
$ |
80,022 |
|
|
4.9 |
% |
|
$ |
392,174 |
|
|
$ |
353,092 |
|
|
11.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
____________________________
1 Consolidated net sales excluding the impact of hurricane
recovery film sales is a non-GAAP financial measure defined as
consolidated net sales less hurricane recovery film sales.
2 Engineered Films' net sales excluding the impact of hurricane
recovery film sales is a non-GAAP financial measure defined as
Engineered Films' net sales less hurricane recovery film sales.
3 Net working capital is defined as accounts receivable, (net)
plus inventories less accounts payable. Net working capital
percentage is defined as net working capital divided by four times
quarterly sales for each respective period.
4 Return on sales is the aggregate net income attributable to
Raven for the previous twelve months divided by the net sales for
that same period.
5 Return on assets is the aggregate net income attributable to
Raven for the previous twelve months divided by the average of the
beginning and ending total assets for that same period.
6 Return on equity is the aggregate net income attributable to
Raven for the previous twelve months divided by the average of the
beginning and ending shareholders' equity for that same period.
7 EBITDA is a non-GAAP financial measure defined on a
consolidated basis as net income attributable to Raven Industries,
Inc., plus income taxes, plus depreciation and amortization
expense, plus interest (income) expense, (net). On a segment basis,
it is defined as operating income plus depreciation expense and
amortization expense. EBITDA margin is defined as EBITDA divided by
net sales.
8 Measure is not meaningful (NMF).
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