FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: April 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________________
Commission file number: 0-3136
RAVEN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
SOUTH DAKOTA 46-0246171
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
205 East 6th Street
P.O. Box 5107
Sioux Falls, SD 57117-5107
(Address of principal executive offices) (Zip code)
605-336-2750
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes __X__ No _____
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of April 30, 1995
Common Stock 4,735,770 shares
RAVEN INDUSTRIES, INC. AND SUBSIDIARIES
INDEX
PAGE NO.
PART I-FINANCIAL INFORMATION
Consolidated Balance Sheets-April 30, 1995;
January 31, 1995 and April 30, 1994 3
Consolidated Statements of Income-Three months
Ended April 30, 1995 and 1994 4
Consolidated Statements of Cash Flows-
Three Months Ended April 30, 1995 and 1994 5
Notes to Consolidated Financial Statements 6
Computation of Earnings Per Share 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-9
PART II-OTHER INFORMATION 10
PART I - FINANCIAL INFORMATION
RAVEN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
4/30/95 01/31/95 04/30/94
<S> <C> <C> <C>
ASSETS
Cash ....................................................... $ 1,593 $ 2,304 $ 1,176
Accounts receivable (less allowance for
doubtful accounts of $387, $350 and $318) ................. 15,511 17,592 16,869
Inventories:
Materials ................................................ 14,379 13,147 14,667
In process ............................................... 5,268 4,709 5,411
Finished goods ........................................... 6,220 4,247 6,161
Total inventories .................................... 25,867 22,103 26,239
Prepaid expenses and other current assets .................. 397 382 312
Deferred income taxes ...................................... 1,414 1,414 1,402
Total current assets ................................. 44,782 43,795 45,998
Property, plant and equipment .............................. 44,413 43,108 37,186
Less: accumulated depreciation ........................... 25,469 24,538 23,125
Net property, plant & equipment ...................... 18,944 18,570 14,061
Other assets ............................................... 3,225 3,271 2,346
TOTAL ASSETS ............................................... $66,951 $65,636 $62,405
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable, bank ........................................ $ 1,500 $ 0 $ 2,000
Current portion of long-term debt .......................... 846 907 667
Accounts payable ........................................... 5,229 5,435 6,760
Accrued liabilities and customer advances .................. 8,413 8,736 8,125
Total current liabilities ............................ 15,988 15,078 17,552
Long-term debt (less current portion) ...................... 3,547 4,179 1,824
Deferred income taxes ...................................... 853 853 870
Stockholders' equity
Common stock, $1 par value, authorized shares: 100,000,000
issued: 5,051,673; 5,050,433 and 5,040,056 shares ....... 5,052 5,050 5,040
Paid in capital .......................................... 418 420 357
Retained earnings ........................................ 43,427 42,390 39,096
Less treasury stock, at cost: 48,897 47,860 44,493
315,903 shares ...................................... 2,334 2,334 2,334
Total stockholders' equity ........................... 46,563 45,526 42,159
Total liabilities & stockholders' equity ................... $66,951 $65,636 $62,405
</TABLE>
The accompanying notes are an integral part of the financial statements.
PART I - FINANCIAL INFORMATION
RAVEN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in thousands except per-share data)
FOR THE THREE MONTHS ENDED:
4/30/95 4/30/94
Net sales............................ $27,787 $27,816
Cost of goods sold................... 22,011 22,456
Gross profit....................... 5,776 5,360
Operating expenses
Selling............................ 1,821 1,765
Administrative..................... 1,551 1,549
3,372 3,314
Operating income..................... 2,404 2,046
Other income (expense)
Interest........................... (107) (43)
Miscellaneous...................... 83 131
Income before income taxes........... 2,380 2,134
Income taxes......................... 845 758
Net income........................... $1,535 $1,376
Average number of common and
common-equivalent shares
outstanding........................ 4,787,037 4,801,552
Net income per common and
common-equivalent share............ $0.32 $0.29
Cash dividends paid per share........ $0.105 $0.090
The accompanying notes are an integral part of the financial statements.
PART I - FINANCIAL INFORMATION
RAVEN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
FOR THE THREE MONTHS ENDED:
4/30/95 4/30/94
Cash flows from operating activities:
Net income .......................................... $ 1,535 $ 1,376
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization ................... 1,080 919
Provision for losses on accounts receivable ..... 41 29
Equity in earnings of affiliate, net of dividends (50) (100)
(Increase) decrease in accounts receivable ...... 2,040 (358)
(Increase) decrease in inventories .............. (3,764) (4,015)
(Increase) decrease in other current assets ..... (15) 113
Increase (decrease) in operating liabilities .... (529) (723)
Other ........................................... 92 9
Net cash provided by (used in) operating activites .. 430 (2,750)
Cash flows from investing activities:
Capital expenditures ................................ (1,510) (1,646)
Intangible asset expenditures and other ............. 60 (29)
Net cash used in investing activities ............... (1,450) (1,675)
Cash flows from financing activities:
Issuance of short-term debt ......................... 3,000 2,000
Payment of short-term debt .......................... (1,500) 0
Issuance of long-term note .......................... 0 62
Long-term debt principal payments ................... (693) (590)
Proceeds from exercise of stock options ............. 0 108
Dividends paid ...................................... (498) (425)
Net cash provided by (used in)
financing activities .............................. 309 1,155
Net increase (decrease) in cash and equivalents ..... (711) (3,270)
Cash and cash equivalents at beginning of period ...... 2,304 4,446
Cash and cash equivalents at end of period ............ $ 1,593 $ 1,176
Cash paid during the period for:
Interest .......................................... $ 120 $ 67
Income taxes ...................................... $ 362 $ 128
The accompanying notes are an integral part of the financial statements.
RAVEN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for
the three month period ended April 30, 1995 are not necessarily indicative
of the results that may be expected for the year ending January 31, 1996.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for
the year ended January 31, 1995.
PART I - FINANCIAL INFORMATION
RAVEN INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATIONS OF EARNINGS PER COMMON SHARE
(Dollars in thousands except per-share data)
FOR THE THREE MONTHS ENDED:
4/30/95 4/30/94
Net income .................................... $ 1,535 $ 1,376
Earnings per common share
- Primary ................................. $ 0.32 $ 0.29
Earnings per common share
- Fully diluted (1) ....................... $ 0.32 $ 0.29
Average number of common and common
equivalent shares:
Primary:
Weighted average common
shares outstanding........................ 4,734,570 4,714,786
Dilutive effect of exercise
of certain stock options ................. 52,467 86,766
Average common shares
- Primary ................................ 4,787,037 4,801,552
Fully diluted (1):
Weighted average common
shares outstanding ....................... 4,734,570 4,714,786
Dilutive effect of exercise
of certain stock options ................. 55,098 86,766
Average common shares
- Fully diluted .......................... 4,789,668 4,801,552
(1) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although not required by footnote 2 to paragraph 14 of APB
Opinion No. 15 because it results in dilution of less than 3%.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
Net cash provided by operating activities was $430,000 during the quarter ended
April 30, 1995; an improvement of $3.2 million from the comparable period of the
prior year. The timing of collection of fourth quarter accounts receivable
balances accounted for much of the improvement. Compared to April 30, 1994, net
accounts receivable balances were $1.4 million lower. This reduction was due
primarily to an improvement in accounts receivable days sales outstanding at the
company's Beta Raven subsidiary of more than 30 days between April 30, 1994 and
1995. The seasonal increase in inventories during the quarter was $3.8 million,
compared to $4.0 million during the first quarter of the prior year. Short-term
borrowings required to finance inventory growth were $1.5 million at April 30,
1995 compared to $2.0 million at April 30,1994. As a result, cash balances
declined by $711,000 during the first quarter of fiscal 1996 compared to $3.3
million during the comparable period of the prior year.
RESULTS OF OPERATIONS
Sales of $27.8 million in the quarter ended April 30, 1995 remained flat when
compared to the first quarter of the previous year. Growth of commercial
business offset a $4.4 million decline in defense revenues. Record first quarter
net income of $1.5 million or $.32 per share was up 12 percent from the
comparable period last year. Improved operating income in the Electronics
segment accounted for the increase.
Electronics segment sales of $10.1 million in the first quarter were up 9
percent over the comparable quarter last year despite a $1.3 million decline in
defense sales. This segment experienced a 38 percent growth in agricultural flow
control sales along with growth in commercial contract electronics assembly.
First quarter operating income in this segment increased 50 percent compared to
the first quarter of the prior year and reached $1.8 million. The company's Beta
Raven subsidiary operated profitably in the first quarter of the current year
and at a loss during the quarter ended April 30, 1994.
Plastics segment sales of $13.2 million were 19 percent higher than the prior
year's first quarter. The higher sales were a result of increased productive
capacity added during fiscal 1995. Sales of engineered films, plastic tanks and
pickup truck toppers all increased. Higher operating income from the higher
sales was offset by approximately $150,000 of losses at the company's
utility-truck body subsidiary, which was closed during the quarter. Due to
immateriality of this subsidiary, losses were included in operating income.
Total operating income of $766,000 in the first quarter was essentially
unchanged from the first quarter of the prior year.
Sewn products segment revenues of $4.5 million were at their seasonal low point
in the first quarter. Last year's $7.5 million first quarter included $3.0
million of chemical warfare protection suit revenues, with no counterpart in
fiscal 1996. The relatively low sales generated a $172,000 loss at the operating
income line. The first quarter last year saw operating income of $146,000. A
reduced order intake level during the first quarter as a result of the mild
winter's impact on outerwear demand, indicates a year of decreased sales for
this segment.
Consolidated first quarter gross profits rose 8 percent despite flat sales
compared to the first quarter of the prior year. Increased sales of relatively
higher margin products in the Electronics segment and operating improvements at
Beta Raven accounted for improvement in the gross profit rate. First quarter
selling expenses increased by 3 percent and administrative expenses were flat
compared to the first quarter of the prior year. As a result of the increased
gross profit rate and relatively flat expenses, first quarter operating income
of $2.4 million was 17 percent higher than the comparable period last year.
Interest expense increased due to higher long-term borrowings incurred to
finance expansion during fiscal 1995 and higher first quarter interest rates.
Other income (expense) reflects lower earnings at the company's 50% percent
owned affiliate. The income tax rate of 35.5 percent used in the current year
was unchanged from the first quarter of the prior year and was slightly higher
than the 35.0 percent used for the full fiscal year ended January 31, 1995.
PART II-OTHER INFORMATION
Item 1. Legal Proceedings: None
Item 2. Changes in Securities: None
Item 3. Defaults upon Senior Securities: None
Item 4. Submission of Matters to a Vote of Security Holders: None
Item 5. Other Information: None
Item 6. (a) Exhibits Filed: Exh. 27-Financial Data schedule (for S.E.C. only).
(See Part 1, page 7 for earnings per share computation)
(b) Reports on Form 8-K: None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RAVEN INDUSTRIES, INC.
/s/ Arnold J. Thue
Arnold J. Thue
Vice President, Treasurer
and Principal Financial Officer
Date: June 1, 1995
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<ALLOWANCES> 387
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<PP&E> 44,413
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<BONDS> 3,547
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<SALES> 27,787
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<CGS> 22,011
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<INTEREST-EXPENSE> 107
<INCOME-PRETAX> 2,380
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<INCOME-CONTINUING> 1,535
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