Raven Industries, Inc. (the Company) (NASDAQ:
RAVN) today reported financial results for the second
quarter that ended July 31, 2019.
Noteworthy Items:
- Longer than expected OEM plant shutdowns and limited field
application activities by ag retailers significantly impacted
second quarter performance for Applied Technology and the
consolidated results;
- Applied Technology showcased its latest precision ag
innovations during the annual Raven Technology Summit events, which
included the division's new vision row steering technology,
VSN™;
- Applied Technology’s operations in Latin America continue to
benefit greatly from increased investment with sales in Brazil
doubling versus the second quarter of last year;
- Engineered Films returned to normal operating efficiency levels
during the second quarter of fiscal 2020, less than six months
after going live on its new enterprise resource planning (ERP)
platform;
- In partnership with Loon, Aerostar developed and manufactured a
stratospheric balloon that Loon flew for a record 223 days of
flight, surpassing the previous record of 198 days;
- Aerostar increased its sales of stratospheric balloons and
radar systems year-over-year as a result of the division's research
and development investments to advance the technical capabilities
of these core product lines;
- The Company repurchased 103 thousand shares during the second
quarter at an average price of $34.15 for a total of $3.5
million.
Second Quarter Results:Net sales for the second
quarter of fiscal 2020 were $98.1 million, down 4.5 percent versus
the second quarter of fiscal 2019. Each division experienced a
year-over-year decline, but the majority of the decrease in
consolidated net sales was driven by lower sales in Applied
Technology as unusually poor spring planting conditions in the U.S.
resulted in several key OEM plant shutdowns.
Operating income for the second quarter of fiscal 2020 was $10.6
million versus operating income of $16.6 million in the second
quarter of fiscal 2019, decreasing 36.4 percent year-over-year. The
year-over-year decline was primarily driven by negative operating
leverage as a result of lower sales volume. Operating income also
reflected increased investment in research and development
activities in both the Applied Technology and Aerostar divisions.
The Company has purposefully increased its investment in research
and development activities to drive future growth through new
product innovation and advancing current marketplace
technologies.
Net income for the second quarter of fiscal 2020 was $8.8
million, or $0.24 per diluted share, versus net income of $13.7
million, or $0.38 per diluted share, in last year's second quarter.
The Company's effective tax rate, excluding discrete items, was
consistent with the second quarter of last year at approximately 19
percent. The prior year's second quarter net income benefited from
approximately $0.5 million of favorable discrete tax items that did
not reoccur in the second quarter of fiscal 2020.
Ag Market Conditions:Applied Technology's ag
market conditions deteriorated significantly compared to the
division's expectations at the beginning of the second quarter.
Abnormally wet weather in the U.S. caused challenging field
conditions which negatively impacted planting and application
activities in the field and drove reductions in customer demand.
According to the U.S. Department of Agriculture (USDA), U.S.
farmers were unable to plant crops on more than 19 million acres in
2019. This is the highest number of prevent plant acres since the
USDA began reporting this statistic in 2007. Given these
challenges, several key OEMs responded with greater than expected
plant shutdowns in order to recalibrate production levels to align
with a lower forecast of new machine sales. This temporarily halted
sprayer unit production and reduced demand for precision ag
technology. As a result, Applied Technology's OEM and aftermarket
demand in the second quarter of fiscal 2020 experienced a
significant decline. Nevertheless, Applied Technology's competitive
position remains strong. The division is strongly positioned to
realize additional market share gains by leveraging its
market-leading technologies and increased investment in research
and development.
Balance Sheet and Cash Flow:At the end of the
second quarter of fiscal 2020, cash and cash equivalents totaled
$69.1 million, increasing $7.8 million from the prior quarter. The
sequential increase in cash was driven primarily by the collection
of accounts receivable, partially offset by increased inventory
spending.
During the second quarter of fiscal 2020, the Company
repurchased approximately 103,000 shares at an average price of
$34.15 per share for a total of $3.5 million. Year-to-date, the
Company has purchased $5.8 million of shares. The Company's
remaining repurchase authorization is approximately $22
million.
Net working capital as a percentage of annualized net sales
deteriorated, from 24.9 percent in the second quarter of last year
to 27.1 percent in this year’s second quarter.3 The increase in net
working capital was led by an increase in inventory within
Engineered Films and Applied Technology. Both divisions expected
higher sales demand in the second quarter and prepared inventory
levels to meet those expectations.
Applied Technology Division:Net sales for
Applied Technology in the second quarter of fiscal 2020 were $27.4
million, down 9.9 percent year-over-year. Geographically, domestic
sales declined 13.6 percent year-over-year, driven primarily by
lower market demand brought about by the challenging spring
planting conditions. On an international basis, sales increased 3.4
percent year-over-year. The division continued to achieve
significant growth and market share gains in Latin America as a
result of its investment into the region and strong OEM
relationships. The division's commitment to increase its Latin
America presence and introduce its market-leading technologies to
one of the world's largest ag economies is expected to be a strong
contributor to the division's future growth.
Division operating income in the second quarter of fiscal 2020
was $4.8 million, down $3.9 million or 44.8 percent versus the
second quarter of fiscal 2019. The year-over-year decrease was
driven primarily by lower sales volume and the resulting decline in
operating leverage. In addition, incremental investments in
selling and research and development activities to accelerate the
integration and growth of the recently acquired AgSync business
unfavorably impacted operating income in the second quarter.
Incremental investments are increasing the speed of product
integration and adoption into the marketplace. During the second
quarter, the division released its new Connected Workflow™ suite.
This offering integrates Applied Technology's AgSync™,
Slingshot® and Viper® 4+ hardware and software to allow
end-users to connect their home office to technology in the field
and then back again. This seamless connectivity is expected to
drive increased visibility by ag retailers into key performance
indicators such as work, idle, and transit times. Ag retailers
using the platform have experienced, on average, a 20 percent gain
in operational efficiency by simplifying planning and work order
generation, field application and invoice creation.
Engineered Films Division:Net sales for
Engineered Films in the second quarter of fiscal 2020 were $57.5
million, down $1.4 million or 2.3 percent year-over-year. The
division experienced end-market challenges during the second
quarter in the geomembrane market as well as lower than anticipated
customer demand in the industrial market. These challenges were
partially offset as the division caught up on the fulfillment of
sales orders that were delayed from the first quarter due to the
ERP platform transition.
Division operating income in the second quarter of fiscal 2020
was $10.2 million, down $0.7 million or 6.1 percent versus the
second quarter of fiscal 2019. Division operating income, as a
percentage of sales, decreased from 18.4 percent in the second
quarter of last year to 17.6 percent in this year's second quarter.
The decrease in operating income was primarily driven by higher
selling expenses. Operating inefficiencies experienced in the first
quarter of fiscal 2020 from the implementation of the Company's new
ERP platform were resolved in the second quarter. The division
expects to generate additional efficiency gains as it grows and
matures in its use of the new system.
Aerostar Division:Net sales for Aerostar during
the second quarter of fiscal 2020 were $13.2 million, down $0.3
million or 2.4 percent versus the second quarter of fiscal 2019.
The reported sales decline was driven by a decrease in aerostat
sales of $3.8 million; however, the division's core stratospheric
balloon and radar product platforms grew over 30 percent on a
combined basis. Aerostat sales vary significantly from year to
year, as customer demand is inherently inconsistent. The division's
aerostat product line is very competitive and can generate above
division average margins. The division will continue to supply
aerostats as demand requires and invest appropriately to do so.
Division operating income in the second quarter of fiscal 2020
was $2.9 million, down $0.9 million versus the second quarter of
fiscal 2019. The decrease was driven by reduced aerostat sales,
higher selling expenses and increased investment in research and
development. During the second quarter, the division launched 41
balloons, more than double the number launched in the second
quarter of fiscal 2019. The division continues to advance its
stratospheric balloon platform performance. During the second
quarter, Loon completed a 223 day flight of a balloon platform
designed and manufactured by Aerostar, setting a new duration
record.
Market Outlook:Applied Technology's ag market
conditions became increasingly challenging in the second quarter as
unusually wet conditions in the U.S. caused historic prevented
planting acres and a significant reduction in expected crop
production and yields. While the decline in expected crop
production has driven grain prices higher, the Company does not
anticipate any significant changes in end-market demand during the
second half of this fiscal year for precision agriculture
equipment.
The energy market in the second quarter experienced slower
demand compared to prior year's second quarter, as West Texas
Intermediate (WTI) oil prices and Permian Basin rig counts were
down 17 percent and 6 percent year-over-year, respectively. The
Company expects energy market related demand for Engineered Films
to follow Permian Basin rig counts in the second half of the
year.
There have been no significant changes in how the Company is
monitoring the global trade environment and tariff developments
from both a supplier and customer perspective. The Company believes
it has effectively managed its supply chain with minimal impact to
financial results. The Company will continue to monitor the global
trade environment and the related impact of its uncertainty on
certain grain prices and end-customer sentiment.
Raven Technology Summit Events:Applied
Technology hosted dealers, OEM partners and ag retailers at its
annual Raven Technology Summit events during the second quarter of
fiscal 2020. These customer-focused events are highly
attended, as they feature the division's latest technology and help
set the stage for the division's channel to outfit next year’s
fleet. During the events, the division released its latest
vision row steering technology, VSN™. VSN™ utilizes a camera
based vision solution to navigate machine paths (e.g., through row
crops). This new offering is able to operate in conjunction with,
or independent of, global positioning system (GPS)
guidance. Ag retailers are eager to adopt this new technology,
as it is expected to have an immediate impact on reducing operator
fatigue, increasing application speeds, and increasing return on
investment.
Other event highlights included product integration with
Slingshot® AgSync and the division's latest advancement in boom
leveling capabilities. Applied Technology unveiled its first
product integration with Slingshot® AgSync, which provides Operator
Pro functionality embedded into its Viper 4 field computer. This
full solution now offered to ag retailers can help them gain on
average 20 percent in operational efficiency. AutoBoom® XRT is the
division's latest in boom leveling technology. Boom height control
is a critical component to maximizing sprayer efficacy, and the
division showcased this product at its Technology Summit by
providing side-by-side comparisons, proving XRT as the superior
offering in the marketplace today.
Fiscal 2020 Outlook:"End-market conditions
impacting our Applied Technology division during the second quarter
were significantly more challenging than expected,” said Dan
Rykhus, President and CEO. “Because of this and other challenges
experienced in the first half of fiscal 2020, we have updated our
previous expectations of achieving year-over-year growth in both
sales and division profit for the full-year in each division. These
updates are outlined by division below.
“Applied Technology experienced challenging conditions in the
first half of fiscal 2020 that were far worse than we expected
three months ago. These market conditions resulted in a 10 percent
decline in sales during the second quarter. As we begin the second
half of the year, we expect OEM machine production rates to improve
relative to the first half of fiscal 2020, and market share gains
from new product growth, international expansion and continued
success with recently-acquired AgSync to help offset the
challenging U.S. end-market conditions. At this time, we expect the
division’s fiscal 2020 second half sales and division profit to
exceed the prior year’s second half results. Additionally, we
believe our strong OEM relationships and best-in-class technology
have positioned us for significant growth and success over the long
term.
"Engineered Films also had end-market challenges in the first
half of fiscal 2020 primarily due to weakness in the Industrial and
Geomembrane markets. In addition, the division experienced
difficult year-over-year comparisons due to prior year hurricane
recovery film sales. However, the division is well positioned to
capitalize on the investments it has made over the past two years,
and we expect year-over-year sales growth in the second half of
this year.
"Aerostar continues to achieve new milestones and lead the
industry with its stratospheric balloon capabilities. The division
showed strength in its core markets during the first half of the
year and invested more aggressively in research and development to
support long-term growth opportunities. We are excited about the
division's future as it continues to invest in both its product and
technical service offerings.
"While the Company experienced unexpected near-term challenges
in the second quarter, the fundamentals of the Company remain very
strong and we continue to improve our competitive positioning in
each of our operating divisions. We will continue to invest for the
long term through research and development to drive new product
innovation, capital equipment to improve and augment our unique
production capabilities, and the pursuit and closure of additional
strategic acquisitions.
“While we will not achieve the growth in sales and division
profit in every division this fiscal year as we previously
expected, we do expect a stronger second half sales performance for
each division, relative to the prior year.
"More importantly, I firmly believe we are much better
positioned today to face end-market challenges due to the
investment discipline we maintained during the previous end-market
challenges we experienced. Our disciplined approach to continual
investment is supported by the confidence we have in our ability to
improve our market-leading positions and drive long-term growth,"
concluded Rykhus.
Regulation G:The information presented in this
earnings release regarding consolidated sales, Engineered Films'
net sales excluding the impact of hurricane recovery film sales,
and 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.
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 July 31, |
|
Six Months Ended July 31, |
|
2019 |
|
2018 |
|
Fav (Un) Change |
|
2019 |
|
2018 |
|
Fav (Un) Change |
Net sales |
$ |
98,058 |
|
|
$ |
102,684 |
|
|
(4.5 |
)% |
|
$ |
196,236 |
|
|
$ |
213,813 |
|
|
(8.2 |
)% |
Cost of sales |
66,720 |
|
|
68,076 |
|
|
|
|
129,832 |
|
|
139,207 |
|
|
|
Gross profit |
31,338 |
|
|
34,608 |
|
|
(9.4 |
)% |
|
66,404 |
|
|
74,606 |
|
|
(11.0 |
)% |
Gross profit percentage |
32.0 |
% |
|
33.7 |
% |
|
|
|
33.8 |
% |
|
34.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
expenses |
7,067 |
|
|
6,151 |
|
|
|
|
14,338 |
|
|
11,436 |
|
|
|
Selling, general, and
administrative expenses |
13,701 |
|
|
11,828 |
|
|
|
|
26,375 |
|
|
25,010 |
|
|
|
Operating income |
10,570 |
|
|
16,629 |
|
|
(36.4 |
)% |
|
25,691 |
|
|
38,160 |
|
|
(32.7 |
)% |
Operating income percentage |
10.8 |
% |
|
16.2 |
% |
|
|
|
13.1 |
% |
|
17.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net |
383 |
|
|
(139 |
) |
|
|
|
314 |
|
|
5,540 |
|
|
|
Income before income taxes |
10,953 |
|
|
16,490 |
|
|
(33.6 |
)% |
|
26,005 |
|
|
43,700 |
|
|
(40.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
2,187 |
|
|
2,769 |
|
|
|
|
4,029 |
|
|
7,832 |
|
|
|
Net income |
8,766 |
|
|
13,721 |
|
|
(36.1 |
)% |
|
21,976 |
|
|
35,868 |
|
|
(38.7 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable
to noncontrolling interest |
— |
|
|
44 |
|
|
|
|
— |
|
|
56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Raven Industries, Inc. |
$ |
8,766 |
|
|
$ |
13,677 |
|
|
(35.9 |
)% |
|
$ |
21,976 |
|
|
$ |
35,812 |
|
|
(38.6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common
share: |
|
|
|
|
|
|
|
|
|
|
|
- Basic |
$ |
0.24 |
|
|
$ |
0.38 |
|
|
(36.8 |
)% |
|
$ |
0.61 |
|
|
$ |
1.00 |
|
|
(39.0 |
)% |
- Diluted |
$ |
0.24 |
|
|
$ |
0.38 |
|
|
(36.8 |
)% |
|
$ |
0.60 |
|
|
$ |
0.98 |
|
|
(38.8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares: |
|
|
|
|
|
|
|
|
|
|
|
- Basic |
36,062 |
|
|
35,995 |
|
|
|
|
36,065 |
|
|
35,955 |
|
|
|
- Diluted |
36,247 |
|
|
36,425 |
|
|
|
|
36,325 |
|
|
36,410 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RAVEN INDUSTRIES, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS(Dollars in thousands)
(Unaudited) |
|
|
July 31 |
|
January 31 |
|
July 31 |
|
2019 |
|
2019 |
|
2018 |
ASSETS |
|
|
|
|
|
Cash and cash equivalents |
$ |
69,131 |
|
|
$ |
65,787 |
|
|
$ |
65,439 |
|
Accounts receivable, net |
60,700 |
|
|
54,472 |
|
|
61,348 |
|
Inventories |
61,311 |
|
|
54,076 |
|
|
55,993 |
|
Other current assets |
8,727 |
|
|
8,736 |
|
|
5,372 |
|
Total current assets |
199,869 |
|
|
183,071 |
|
|
188,152 |
|
|
|
|
|
|
|
Property, plant and equipment, net |
104,654 |
|
|
106,615 |
|
|
106,716 |
|
Goodwill and amortizable intangibles, net |
66,200 |
|
|
67,235 |
|
|
58,210 |
|
Other assets |
5,789 |
|
|
3,324 |
|
|
2,837 |
|
TOTAL ASSETS |
$ |
376,512 |
|
|
$ |
360,245 |
|
|
$ |
355,915 |
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
Accounts payable |
$ |
15,722 |
|
|
$ |
8,272 |
|
|
$ |
14,882 |
|
Accrued and other liabilities |
22,996 |
|
|
24,781 |
|
|
22,608 |
|
Total current liabilities |
38,718 |
|
|
33,053 |
|
|
37,490 |
|
|
|
|
|
|
|
Other liabilities |
22,816 |
|
|
18,235 |
|
|
16,315 |
|
Shareholders' equity |
314,978 |
|
|
308,957 |
|
|
302,110 |
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
376,512 |
|
|
$ |
360,245 |
|
|
$ |
355,915 |
|
Net Working Capital and Net Working Capital
Percentage3 |
|
|
Accounts receivable, net |
$ |
60,700 |
|
|
$ |
54,472 |
|
|
$ |
61,348 |
|
Plus: Inventories |
61,311 |
|
|
54,076 |
|
|
55,993 |
|
Less: Accounts payable |
15,722 |
|
|
8,272 |
|
|
14,882 |
|
Net working capital3 |
$ |
106,289 |
|
|
$ |
100,276 |
|
|
$ |
102,459 |
|
|
|
|
|
|
|
Annualized net sales |
$ |
392,232 |
|
|
$ |
352,088 |
|
|
$ |
410,736 |
|
Net working capital
percentage3 |
27.1 |
% |
|
28.5 |
% |
|
24.9 |
% |
|
RAVEN INDUSTRIES, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(Dollars in
thousands) (Unaudited) |
|
|
Six Months Ended July 31, |
|
2019 |
|
2018 |
Cash flows from operating
activities: |
|
|
|
Net income |
$ |
21,976 |
|
|
$ |
35,868 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
8,122 |
|
|
7,401 |
|
Other operating activities, net |
(3,938 |
) |
|
(4,617 |
) |
Net cash provided by operating activities |
26,160 |
|
|
38,652 |
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
Capital expenditures |
(3,784 |
) |
|
(6,853 |
) |
Proceeds from sale or maturity of investments |
993 |
|
|
6,668 |
|
Purchases of investments |
(907 |
) |
|
(164 |
) |
Proceeds (disbursements) from sale of assets, settlement of
liabilities |
— |
|
|
832 |
|
Other investing activities, net |
20 |
|
|
(1,971 |
) |
Net cash used in investing activities |
(3,678 |
) |
|
(1,488 |
) |
|
|
|
|
Cash flows from financing
activities: |
|
|
|
Dividends paid |
(9,353 |
) |
|
(9,326 |
) |
Payments for common shares repurchased |
(5,781 |
) |
|
— |
|
Payment of acquisition-related contingent liabilities |
(717 |
) |
|
(499 |
) |
Other financing activities, net |
(3,241 |
) |
|
(2,032 |
) |
Net cash used in financing activities |
(19,092 |
) |
|
(11,857 |
) |
|
|
|
|
Effect of exchange rate
changes on cash |
(46 |
) |
|
(403 |
) |
|
|
|
|
Net increase in cash and cash
equivalents |
3,344 |
|
|
24,904 |
|
Cash and cash equivalents at
beginning of period |
65,787 |
|
|
40,535 |
|
Cash and cash equivalents at
end of period |
$ |
69,131 |
|
|
$ |
65,439 |
|
|
RAVEN INDUSTRIES, INC.SALES AND OPERATING
INCOME BY SEGMENT(Dollars in thousands)
(Unaudited) |
|
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
|
2019 |
|
2018 |
|
Fav (Un) Change |
|
2019 |
|
2018 |
|
Fav (Un) Change |
Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
Applied Technology |
|
$ |
27,371 |
|
|
$ |
30,362 |
|
|
(9.9 |
)% |
|
$ |
69,096 |
|
|
$ |
70,792 |
|
|
(2.4 |
)% |
Engineered Films |
|
57,516 |
|
|
58,875 |
|
|
(2.3 |
)% |
|
101,808 |
|
|
118,867 |
|
|
(14.4 |
)% |
Aerostar |
|
13,189 |
|
|
13,517 |
|
|
(2.4 |
)% |
|
25,379 |
|
|
24,418 |
|
|
3.9 |
% |
Intersegment eliminations |
|
(18 |
) |
|
(70 |
) |
|
|
|
(47 |
) |
|
(264 |
) |
|
|
Consolidated net sales |
|
$ |
98,058 |
|
|
$ |
102,684 |
|
|
(4.5 |
)% |
|
$ |
196,236 |
|
|
$ |
213,813 |
|
|
(8.2 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
|
|
|
|
|
|
|
|
|
|
Applied Technology |
|
$ |
4,849 |
|
|
$ |
8,788 |
|
|
(44.8 |
)% |
|
$ |
18,085 |
|
|
$ |
24,736 |
|
|
(26.9 |
)% |
Engineered Films |
|
10,150 |
|
|
10,806 |
|
|
(6.1 |
)% |
|
16,513 |
|
|
24,002 |
|
|
(31.2 |
)% |
Aerostar |
|
2,943 |
|
|
3,835 |
|
|
(23.3 |
)% |
|
4,939 |
|
|
6,640 |
|
|
(25.6 |
)% |
Intersegment eliminations |
|
1 |
|
|
19 |
|
|
|
|
2 |
|
|
4 |
|
|
|
Total segment income |
|
$ |
17,943 |
|
|
$ |
23,448 |
|
|
(23.5 |
)% |
|
$ |
39,539 |
|
|
$ |
55,382 |
|
|
(28.6 |
)% |
Corporate expenses |
|
(7,373 |
) |
|
(6,819 |
) |
|
(8.1 |
)% |
|
(13,848 |
) |
|
(17,222 |
) |
|
19.6 |
% |
Consolidated operating income |
|
$ |
10,570 |
|
|
$ |
16,629 |
|
|
(36.4 |
)% |
|
$ |
25,691 |
|
|
$ |
38,160 |
|
|
(32.7 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
percentages |
|
|
|
|
|
|
|
|
|
|
|
|
Applied Technology |
|
17.7 |
% |
|
28.9 |
% |
|
(1,120)bps |
|
26.2 |
% |
|
34.9 |
% |
|
(870)bps |
Engineered Films |
|
17.6 |
% |
|
18.4 |
% |
|
(80)bps |
|
16.2 |
% |
|
20.2 |
% |
|
(400)bps |
Aerostar |
|
22.3 |
% |
|
28.4 |
% |
|
(610)bps |
|
19.5 |
% |
|
27.2 |
% |
|
(770)bps |
Consolidated operating income |
|
10.8 |
% |
|
16.2 |
% |
|
(540)bps |
|
13.1 |
% |
|
17.8 |
% |
|
(470)bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
RAVEN INDUSTRIES, INC. |
EBITDA REGULATION G RECONCILIATION4 |
(Dollars in thousands) (Unaudited) |
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
|
|
|
|
Fav (Un) |
|
|
|
|
|
Fav (Un) |
Segments |
2019 |
|
2018 |
|
Change |
|
2019 |
|
2018 |
|
Change |
Applied
Technology |
|
|
|
|
|
|
|
|
|
|
|
Reported operating income |
$ |
4,849 |
|
|
$ |
8,788 |
|
|
(44.8 |
)% |
|
$ |
18,085 |
|
|
$ |
24,736 |
|
|
(26.9 |
)% |
Plus: Depreciation and
amortization |
971 |
|
|
750 |
|
|
29.5 |
% |
|
1,999 |
|
|
1,500 |
|
|
33.3 |
% |
ATD EBITDA |
$ |
5,820 |
|
|
$ |
9,538 |
|
|
(39.0 |
)% |
|
$ |
20,084 |
|
|
$ |
26,236 |
|
|
(23.4 |
)% |
ATD EBITDA % of Net Sales |
21.3 |
% |
|
31.4 |
% |
|
|
|
29.1 |
% |
|
37.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineered
Films |
|
|
|
|
|
|
|
|
|
|
|
Reported operating income |
$ |
10,150 |
|
|
$ |
10,806 |
|
|
(6.1 |
)% |
|
$ |
16,513 |
|
|
$ |
24,002 |
|
|
(31.2 |
)% |
Plus: Depreciation and
amortization |
2,427 |
|
|
2,327 |
|
|
4.3 |
% |
|
4,724 |
|
|
4,648 |
|
|
1.6 |
% |
EFD EBITDA |
$ |
12,577 |
|
|
$ |
13,133 |
|
|
(4.2 |
)% |
|
$ |
21,237 |
|
|
$ |
28,650 |
|
|
(25.9 |
)% |
EFD EBITDA % of Net Sales |
21.9 |
% |
|
22.3 |
% |
|
|
|
20.9 |
% |
|
24.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerostar |
|
|
|
|
|
|
|
|
|
|
|
Reported operating income |
$ |
2,943 |
|
|
$ |
3,835 |
|
|
(23.3 |
)% |
|
$ |
4,939 |
|
|
$ |
6,640 |
|
|
(25.6 |
)% |
Plus: Depreciation and
amortization |
219 |
|
|
218 |
|
|
0.5 |
% |
|
440 |
|
|
437 |
|
|
0.7 |
% |
Aerostar EBITDA |
$ |
3,162 |
|
|
$ |
4,053 |
|
|
(22.0 |
)% |
|
$ |
5,379 |
|
|
$ |
7,077 |
|
|
(24.0 |
)% |
Aerostar EBITDA % of Net
Sales |
24.0 |
% |
|
30.0 |
% |
|
|
|
21.2 |
% |
|
29.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
Net Income attributable to Raven
Industries |
$ |
8,766 |
|
|
$ |
13,677 |
|
|
(35.9 |
)% |
|
$ |
21,976 |
|
|
$ |
35,812 |
|
|
(38.6 |
)% |
Interest (income) expense,
net |
(204 |
) |
|
(22 |
) |
|
|
|
(434 |
) |
|
(59 |
) |
|
|
Income tax expense |
2,187 |
|
|
2,769 |
|
|
|
|
4,029 |
|
|
7,832 |
|
|
|
Plus: Depreciation and
amortization |
4,040 |
|
|
3,718 |
|
|
|
|
8,122 |
|
|
7,401 |
|
|
|
Consolidated EBITDA |
$ |
14,789 |
|
|
$ |
20,142 |
|
|
(26.6 |
)% |
|
$ |
33,693 |
|
|
$ |
50,986 |
|
|
(33.9 |
)% |
Consolidated EBITDA % of Net
Sales |
15.1 |
% |
|
19.6 |
% |
|
|
|
17.2 |
% |
|
23.8 |
% |
|
|
RAVEN INDUSTRIES, INC. |
NET SALES EXCLUDING HURRICANE RECOVERY FILM SALES
REGULATION G RECONCILIATION1 & 2 |
(Dollars in thousands) (Unaudited) |
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|
2019 |
|
2018 |
|
Fav (Un)Change |
|
2019 |
|
2018 |
|
Fav (Un)Change |
Engineered
Films |
|
|
|
|
|
|
|
|
|
|
|
Reported Net Sales |
$ |
57,516 |
|
|
$ |
58,875 |
|
|
(2.3 |
)% |
|
$ |
101,808 |
|
|
$ |
118,867 |
|
|
(14.4 |
)% |
Less: Hurricane Recovery Film
Sales |
806 |
|
|
— |
|
|
|
|
823 |
|
|
8,919 |
|
|
(90.8 |
)% |
Net Sales, Excluding Hurricane
Recovery Film Sales2 |
$ |
56,710 |
|
|
$ |
58,875 |
|
|
(3.7 |
)% |
|
$ |
100,985 |
|
|
$ |
109,948 |
|
|
(8.2 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Raven |
|
|
|
|
|
|
|
|
|
|
|
Reported Net Sales |
$ |
98,058 |
|
|
$ |
102,684 |
|
|
(4.5 |
)% |
|
$ |
196,236 |
|
|
$ |
213,813 |
|
|
(8.2 |
)% |
Less: Hurricane Recovery Film
Sales |
806 |
|
|
— |
|
|
|
|
823 |
|
|
8,919 |
|
|
(90.8 |
)% |
Net Sales, Excluding Hurricane
Recovery Film Sales1 |
$ |
97,252 |
|
|
$ |
102,684 |
|
|
(5.3 |
)% |
|
$ |
195,413 |
|
|
$ |
204,894 |
|
|
(4.6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
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 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.
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