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, 1996
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 of (I.R.S. Employer Identification No.)
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, 1996
Common Stock 4,716,502 shares
RAVEN INDUSTRIES, INC. AND SUBSIDIARIES
INDEX
PAGE NO.
PART I-FINANCIAL INFORMATION
Consolidated Balance Sheets-April 30, 1996;
January 31, 1996 and April 30, 1995 3
Consolidated Statements of Income-Three months
ended April 30, 1996 and 1995 4
Consolidated Statements of Cash Flows-
Three months ended April 30, 1996 and 1995 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>
4/30/96 01/31/96 4/30/95
-------- -------- --------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents ...................... $ 1,789 $ 3,804 $ 1,593
Accounts receivable, less allowance for
doubtful accounts of $340, $340 and $387 ..... 18,556 16,002 15,511
Inventories:
Materials .................................... 14,494 13,317 14,379
In process ................................... 5,319 5,605 5,268
Finished goods ............................... 5,829 5,236 6,220
Progress payments ............................ (33) (261) 0
-------- -------- --------
Total inventories ........................ 25,609 23,897 25,867
Prepaid expenses and other current assets ...... 333 413 397
Deferred income taxes .......................... 1,579 1,579 1,414
-------- -------- --------
Total current assets ..................... 47,866 45,695 44,782
-------- -------- --------
Property, plant and equipment .................. 46,188 45,020 44,413
Less: accumulated depreciation ............... 27,934 26,951 25,469
-------- -------- --------
Net property, plant & equipment .......... 18,254 18,069 18,944
Other assets ................................... 3,752 3,789 3,225
-------- -------- --------
TOTAL ASSETS ................................... $ 69,872 $ 67,553 $ 66,951
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable, bank ............................ $ 0 $ 0 $ 1,500
Current portion of long-term debt .............. 813 813 846
Accounts payable ............................... 5,911 4,651 5,229
Accrued liabilities and customer advances ...... 9,189 9,307 8,413
-------- -------- --------
Total current liabilities ................ 15,913 14,771 15,988
Long-term debt, less current portion ........... 2,746 2,816 3,547
Deferred income taxes .......................... 815 815 853
Stockholders' equity
Common stock, $1 par value, authorized shares:
100,000,000; issued: 5,068,905; 5,068,379 and
5,051,673 shares ............................ 5,069 5,068 5,052
Paid in capital .............................. 540 536 418
Retained earnings ............................ 47,699 46,457 43,427
-------- -------- --------
53,308 52,061 48,897
Less treasury stock, at cost:
352,403; 352,403 and 315,903 shares ...... 2,910 2,910 2,334
-------- -------- --------
Total stockholders' equity ............... 50,398 49,151 46,563
-------- -------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..... $ 69,872 $ 67,553 $ 66,951
======== ======== ========
</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:
--------------------------
4/30/96 4/30/95
----------- -----------
Net sales ................... $ 30,875 $ 27,787
Cost of goods sold .......... 24,789 22,011
----------- -----------
Gross profit .............. 6,086 5,776
----------- -----------
Operating expenses
Selling ................... 1,754 1,821
Administrative ............ 1,506 1,551
----------- -----------
3,260 3,372
----------- -----------
Operating income ............ 2,826 2,404
----------- -----------
Other income (expense)
Interest .................. (69) (107)
Miscellaneous ............. 40 83
----------- -----------
Income before income taxes .. 2,797 2,380
Income taxes ................ 989 845
----------- -----------
Net income .................. $ 1,808 $ 1,535
=========== ===========
Average number of common and
common-equivalent shares
outstanding ............... 4,744,685 4,787,037
=========== ===========
Net income per common and
common-equivalent share ... $ 0.38 $ 0.32
=========== ===========
Cash dividends paid per share $ 0.120 $ 0.105
=========== ===========
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:
------------------
4/30/96 4/30/95
------- -------
Cash flows from operating activities:
Net income .......................................... $ 1,808 $ 1,535
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization ................... 1,182 1,080
Provision for losses on accounts receivable ..... 36 41
Equity in earnings of affiliate, net of dividends 0 (50)
(Increase) decrease in accounts receivable ...... (2,590) 2,040
(Increase) decrease in inventories .............. (1,712) (3,764)
(Increase) decrease in other current assets ..... 80 (15)
Increase (decrease) in operating liabilities .... 1,142 (529)
Other ........................................... (3) 92
------- -------
Net cash provided by (used in) operating activities . (57) 430
Cash flows from investing activities:
Capital expenditures ................................ (1,322) (1,510)
Intangible asset expenditures and other ............. (5) 60
------- -------
Net cash used in investing activities ............... (1,327) (1,450)
Cash flows from financing activities:
Issuance of short-term debt ......................... 0 3,000
Payment of short-term debt .......................... 0 (1,500)
Long-term debt principal payments ................... (70) (693)
Proceeds from exercise of stock options ............. 5 0
Dividends paid ...................................... (566) (498)
------- -------
Net cash provided by (used in)
financing activities .............................. (631) 309
------- -------
Net increase (decrease) in cash and equivalents ..... (2,015) (711)
Cash and cash equivalents at beginning of period ...... 3,804 2,304
------- -------
Cash and cash equivalents at end of period ............ $ 1,789 $ 1,593
======= =======
Cash paid during the period for:
Interest .......................................... $ 74 $ 120
Income taxes ...................................... $ 35 $ 362
The accompanying notes are an integral part of the financial statements.
RAVEN INDUSTRIES, INC. AND SUBSIDIARIES
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The accompanying unaudited 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, 1996
are not necessarily indicative of the results that may be expected for the year
ending January 31, 1997. For further information, refer to the consolidated
financial statements and notes thereto included in the Company's annual report
on Form 10-K for the year ended January 31, 1996.
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:
-----------------------
4/30/96 4/30/95
---------- ----------
Net income ........................................... $ 1,808 $ 1,535
Earnings per common share
- Primary ........................................ $ 0.38 $ 0.32
========== ==========
Earnings per common share
- Fully diluted (1) .............................. $ 0.38 $ 0.32
========== ==========
Average number of common and common equivalent shares:
Primary:
Weighted average common
shares outstanding .............................. 4,716,185 4,734,570
Dilutive effect of exercise
of certain stock options ........................ 28,500 52,467
---------- ----------
Average common shares
- Primary ....................................... 4,744,685 4,787,037
========== ==========
Fully diluted (1):
Weighted average common
shares outstanding .............................. 4,716,185 4,734,570
Dilutive effect of exercise
of certain stock options ........................ 28,500 55,098
---------- ----------
Average common shares
- Fully diluted ................................. 4,744,685 4,789,668
========== ==========
(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
The company had no short-term borrowings at April 30, 1996 compared to $1.5
million at April 30, 1995. Cash balances increased to $1.8 million from $1.6
million over the same period. Strong operating cash flow during the twelve
months ended April 30, 1996 accounted for much of the improvement in cash and
short-term borrowings. Cash used in operations during the first quarter ended
April 30, 1996 was $57,000 and compared to $430,000 cash provided in the first
quarter of the prior year. The company's seasonal growth in Sewn Products
inventories normally requires cash in the first quarter. In the first quarter of
the prior fiscal year collection of past due accounts receivable balances at the
company's Beta Raven subsidiary offset this growth. Accounts Receivable balances
were $18.6 million at April 30, 1996, and $15.5 million one year earlier; the
higher balance was due to the timing of sales during the quarter and increased
sales levels in the Electronics segment.
RESULTS OF OPERATIONS
First quarter sales and net income records were set in the quarter ended April
30, 1996. Sales of $30.9 million were up 11 percent compared to the first
quarter of the previous year. First quarter net income of $1.8 million was 18
percent higher than the comparable period last year. Earnings per share of $.38
was up 19 percent. Sales increased in every business segment and operating
income improved in the Plastics and Sewn Products segments.
Electronics segment sales of $12.0 million in the first quarter were up 19
percent over the first quarter of the prior year. Increases of over 50 percent
in contract electronics assembly and 13 percent in agricultural electronics for
precision farming were partially offset by lower revenues from bakery and
feedmill installations. Operating income for this segment in the first quarter
was $1.8 million; down 2 percent from the quarter ended April 30, 1995. Start-up
costs related to new commercial ventures offset the profit impact of higher
sales in this segment.
Plastics segment sales were $14.0 million in the quarter ended April 30, 1996; 6
percent higher than the first quarter of the prior year. Sales of plastic
sheeting, pickup-truck toppers and research balloons increased, while sales of
agricultural plastic tanks declined. The quarter ended April 30, 1995 included
approximately $150,000 of losses from the closing of the company's utility-truck
body subsidiary. Elimination of these losses combined with reduced pressure on
raw material costs helped to improve profitability. Operating income for this
segment was $973,000 for the quarter ended April 30, 1996; an increase of 25
percent. Operations at the company's pickup-truck topper plant in Arizona (which
became fully operational in the second quarter of the prior fiscal year)
improved when compared to the immediately preceding quarter ended January 31,
1996.
Sewn products segment sales of $4.9 million in the first quarter were at their
seasonal low point and were 9 percent higher than the first quarter of the prior
year. Production efficiencies combined with higher sales generated operating
income of $85,000; a $257,000 improvement over the first quarter of the prior
year.
Consolidated gross profits were 5 percent higher than the first quarter of the
prior year. The gross profit rate decline from 21 percent of sales to 20 percent
was due primarily to startup costs in the Electronics segment. Selling and
administrative expenses were down 3 percent from the prior first quarter due to
the impact of cost controls and closure of the utility-truck body subsidiary. As
a result of the higher sales and lower expenses, operating income of $2.8
million and net income of $1.8 million in the quarter ended April 30, 1996
increased by 18 percent compared to the first quarter of the prior year.
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. Thueld
Vice President, Finance, Secretary
and Treasurer (Principal Financial
and Accounting Officer)
DATE: JUNE 3, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> APR-30-1996
<CASH> 1,789
<SECURITIES> 0
<RECEIVABLES> 18,896
<ALLOWANCES> 340
<INVENTORY> 25,609
<CURRENT-ASSETS> 47,866
<PP&E> 46,188
<DEPRECIATION> 27,934
<TOTAL-ASSETS> 69,872
<CURRENT-LIABILITIES> 15,913
<BONDS> 2,746
0
0
<COMMON> 5,069
<OTHER-SE> 45,329
<TOTAL-LIABILITY-AND-EQUITY> 69,872
<SALES> 30,875
<TOTAL-REVENUES> 30,875
<CGS> 24,789
<TOTAL-COSTS> 24,789
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 69
<INCOME-PRETAX> 2,797
<INCOME-TAX> 989
<INCOME-CONTINUING> 1,808
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,808
<EPS-PRIMARY> 0.38
<EPS-DILUTED> 0.38
</TABLE>
