0000897101-95-000345.txt : 19950914 0000897101-95-000345.hdr.sgml : 19950914 ACCESSION NUMBER: 0000897101-95-000345 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950731 FILED AS OF DATE: 19950908 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: RAVEN INDUSTRIES INC CENTRAL INDEX KEY: 0000082166 STANDARD INDUSTRIAL CLASSIFICATION: APPAREL & OTHER FINISHED PRODS OF FABRICS & SIMILAR MATERIAL [2300] IRS NUMBER: 460246171 STATE OF INCORPORATION: SD FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-03136 FILM NUMBER: 95571933 BUSINESS ADDRESS: STREET 1: 205 E 6TH ST STREET 2: PO BOX 5107 CITY: SIOUX FALLS STATE: SD ZIP: 57117 BUSINESS PHONE: 6053362750 MAIL ADDRESS: STREET 1: P O BOX 5107 CITY: SIOUX FALLS STATE: SD ZIP: 57117-5107 10-Q 1 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: July 31, 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 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 JULY 31, 1995 Common Stock 4,736,005 shares RAVEN INDUSTRIES, INC. AND SUBSIDIARIES INDEX PAGE NO. PART I-FINANCIAL INFORMATION Consolidated Balance Sheets-July 31, 1995; January 31, 1995 and July 31, 1994 3 Consolidated Statements of Income-Three months and six months Ended July 31, 1995 and 1994 4 Consolidated Statements of Cash Flows- Six Months Ended July 31, 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) 7/31/95 01/31/95 07/31/94 ASSETS Cash ................................... $ 1,519 $ 2,304 $ 502 Accounts receivable (less allowance for doubtful accounts of $383, $350 and $410) ....................... 12,521 17,592 16,074 Inventories: Materials ............................ 13,145 13,147 14,436 In process ........................... 5,882 4,709 5,664 Finished goods ....................... 7,348 4,247 6,693 Progress payments .................... 0 0 (4) Total inventories ................ 26,375 22,103 26,789 Prepaid expenses and other current assets ...................... 346 382 208 Deferred income taxes .................. 1,414 1,414 1,702 Total current assets ............. 42,175 43,795 45,275 Property, plant and equipment .......... 44,555 43,108 38,695 Less: accumulated depreciation ....... 25,996 24,538 23,921 Net property, plant & equipment .. 18,559 18,570 14,774 Other assets ........................... 3,400 3,271 2,343 TOTAL ASSETS ........................... $64,134 $65,636 $ 62,392 LIABILITIES AND STOCKHOLDERS' EQUITY Notes payable, bank .................... $ 0 $ 0 $ 4,000 Current portion of long-term debt ...... 846 907 666 Accounts payable ....................... 4,299 5,435 4,875 Accrued liabilities and customer advances .................... 7,471 8,736 8,332 Total current liabilities ........ 12,616 15,078 17,873 Long-term debt (less current portion) .. 3,484 4,179 1,778 Deferred income taxes .................. 853 853 870 Stockholders' equity Common stock, $1 par value, authorized shares: 100,000,000; issued: 5,051,908; 5,050,433 and 5,041,106 shares ................ 5,052 5,050 5,041 Paid in capital ...................... 416 420 363 Retained earnings .................... 44,047 42,390 38,801 Less treasury stock, at cost: 49,515 47,860 44,205 315,903 shares .................. 2,334 2,334 2,334 Total stockholders' equity ....... 47,181 45,526 41,871 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $64,134 $65,636 $ 62,392 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: FOR THE SIX MONTHS ENDED: 7/31/95 7/31/94 7/31/95 7/31/94 Net sales ................... $ 27,253 $ 26,919 $ 55,040 $ 54,735 Cost of goods sold .......... 22,458 21,875 44,469 44,331 Gross profit .............. 4,795 5,044 10,571 10,404 Operating expenses Selling ................... 1,615 1,587 3,436 3,352 Administrative ............ 1,505 1,520 3,056 3,069 Beta Raven charge ......... 0 1,800 0 1,800 3,120 4,907 6,492 8,221 Operating income ............ 1,675 137 4,079 2,183 Other income (expense) Interest .................. (104) (83) (211) (126) Miscellaneous ............. 161 128 244 259 Income before income taxes .. 1,732 182 4,112 2,316 Income taxes ................ 615 52 1,460 810 Net income .................. $ 1,117 $ 130 $ 2,652 $ 1,506 Average number of common and common-equivalent shares outstanding ............... 4,791,862 4,792,303 4,791,791 4,796,928 Net income per common and common-equivalent share ... $ 0.23 $ 0.03 $ 0.55 $ 0.31 Cash dividends paid per share $ 0.105 $ 0.090 $ 0.210 $ 0.180
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 SIX MONTHS ENDED: 7/31/95 7/31/94 Cash flows from operating activities: Net income ........................................... $ 2,652 $ 1,506 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization .................... 2,179 1,834 Provision for losses on accounts receivable ...... 51 60 Deferred income taxes ............................ 0 (300) Equity in earnings of affiliate, net of dividends. (103) (115) (Increase) decrease in accounts receivable ....... 5,020 406 (Increase) decrease in inventories ............... (4,272) (4,565) (Increase) decrease in other current assets ...... 36 217 Increase (decrease) in operating liabilities ..... (2,401) (2,402) Other ............................................ (34) 34 Net cash provided by (used in) operating activities .. 3,128 (3,325) Cash flows from investing activities: Capital expenditures ................................. (2,272) (3,289) Intangible asset expenditures and other .............. 112 (21) Net cash used in investing activities ................ (2,160) (3,310) Cash flows from financing activities: Issuance of short-term debt .......................... 3,500 4,000 Payment of short-term debt ........................... (3,500) 0 Issuance of long-term note ........................... 0 62 Long-term debt principal payments .................... (756) (636) Proceeds from exercise of stock options .............. 7 115 Dividends paid ....................................... (995) (850) Other ................................................ (9) 0 Net cash provided by (used in) financing activities ............................... (1,753) 2,691 Net increase (decrease) in cash and equivalents ...... (785) (3,944) Cash and cash equivalents at beginning of period ....... 2,304 4,446 Cash and cash equivalents at end of period ............. $ 1,519 $ 502 Cash paid during the period for: Interest ........................................... $ 214 $ 132 Income taxes ....................................... $ 2,105 $ 1,093
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 and six month periods ended July 31, 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: FOR THE SIX MONTHS ENDED: 7/31/95 7/31/94 7/31/95 7/31/94 Net income ................... $ 1,117 $ 130 $ 2,652 $ 1,506 Earnings per common share - Primary ................ $ 0.23 $ 0.03 $ 0.55 $ 0.31 Earnings per common share - Fully diluted (1) ...... $ 0.23 $ 0.03 $ 0.55 $ 0.31 Average number of common and common equivalent shares: Primary: Weighted average common shares outstanding ...... 4,735,082 4,726,553 4,734,826 4,720,670 Dilutive effect of exercise of certain stock options 56,780 65,750 56,965 76,258 Average common shares - Primary ............... 4,791,862 4,792,303 4,791,791 4,796,928 Fully diluted (1): Weighted average common shares outstanding ...... 4,735,082 4,726,553 4,734,826 4,720,670 Dilutive effect of exercise of certain stock options 56,780 65,750 56,965 76,258 Average common shares - Fully diluted ......... 4,791,862 4,792,303 4,791,791 4,796,928
(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 totaled $3.1 million over the first six months of the current fiscal year. During the comparable period of the prior fiscal year $3.3 million of cash was used. Aside from the improved net income, stronger cash flow was primarily caused by lower accounts receivable levels. Collection of past due accounts at the company's Beta Raven subsidiary and lower current year sales to Sewn Products segment customers with extended payment terms accounted for the lower accounts receivable levels. Inventories increased $4.3 million during the first-half of the current fiscal year due to the seasonal build up of Sewn Products segment inventories for shipment in the third and fourth quarters. The company had $1.5 million of cash and no short-term borrowings as of July 31, 1995. On July 31, 1994 the company had $4.0 million of seasonal borrowings. RESULTS OF OPERATIONS Second quarter sales of $27.3 million and six month sales of $55.0 million were up slightly from the comparable periods last year. Sales of commercial products were up $6.1 million during the first half of the current year when compared to the first half of the prior year. This increase was offset by lower defense shipments. Net income comparisons for the quarter and six month periods were impacted by a $1.8 million pre-tax charge taken at the company's Beta Raven subsidiary in the prior fiscal year. Net income increased from $130,000 or $.03 per share, for the quarter ended July 31, 1994 to $1.1 million or $.23 per share for the quarter ended July 31, 1995. For the six month period, earnings of $2.7 million, or $.55 per share, were up 76 percent compared to the comparable period last year. Electronics segment sales of $6.7 million in the second quarter were 10 percent higher than the second quarter last year. Flow control sales accounted for the increase. Second quarter operating income of $559,000 was up 37 percent in the Electronics segment compared to the prior year second quarter after adjustment for the Beta Raven charge. The improvement was a result of relatively higher sales of agricultural flow control products which carry stronger gross profit rates. Six month sales in the Electronics segment were $16.7 million; an increase of 9 percent over the first six months of the prior year. Operating income over the same period in this segment was $2.4 million; a 53 percent increase over the six months ended July 31, 1994 after adjustment for the Beta Raven charge. Plastics segment sales of $12.3 million in the second quarter were 8 percent higher than the second quarter of the prior year. Increased sales of industrial tanks, flexible films and pickup-truck toppers all contributed to the improvement. The profit impact of higher sales was offset by start up and training costs in the company's Arizona pickup-truck topper plant. These losses and the unfavorable impact of higher raw material costs caused second quarter operating income of $395,000 in the Plastics segment to be 51 percent lower than the second quarter of the prior year. Improved operating results are expected in upcoming quarters as raw material cost increases level off or begin to reverse and the Arizona pickup-topper plant becomes fully operational with a trained work force. Six month sales of $25.5 million in this segment were 14 percent over the first six months of the prior year. Operating income of $1.2 million was down 25 percent over the same period. Sewn Products segment sales were depressed by the exceptionally mild winter in much of the United States and the resulting inventory carryover by our major customers. Sales of $8.3 million were down 12 percent from the second quarter of the prior year. Shipments from this segment are expected to be depressed throughout the year. Quarterly operating income of $721,000 was essentially unchanged from the second quarter last year as the impact of lower sales was offset by improved production efficiencies and expense reductions. Six month sales of $12.8 million were down 25 percent from the first six months of the prior year. Defense sales from this segment were down $3.3 million. Operating income for the six month period was $549,000; down 37 percent from the comparable period of the prior year. Consolidated gross profits in the second quarter were down 5 percent from the year ago period due primarily to the unfavorable performance in the Plastics segment. Selling expenses were 5.9 percent of revenues in both the quarters ended July 31, 1995 and 1994. Administrative expenses were down slightly from the prior year due primarily to cost reductions at Beta Raven. Interest expense reflects higher long term debt, compared to the prior year and higher interest rates. The income tax rate of 35.5 percent used in the current year was slightly higher than the 35.0 percent used during the prior fiscal 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: The Company's annual meeting of stockholders was held on May 23, 1995. The following members were elected to the Company's Board of Directors to hold office for the ensuing year. Nominee In Favor Withheld Tony W. Bour 3,511,361 3,966 David A. Christensen 3,514,717 610 Mark E. Griffin 3,514,505 822 Conrad J. Hoigaard 3,514,317 1,010 Kevin T. Kirby 3,513,808 1,519 Edward J. Leahy 3,511,510 3,817 John C. Skoglund 3,514,632 695 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: SEPTEMBER 7, 1995 EX-27 2
5 1,000 6-MOS JAN-31-1996 JUL-31-1995 1,519 0 12,904 383 26,375 42,175 44,555 25,996 64,134 12,616 3,484 5,052 0 0 42,129 64,134 55,040 55,040 44,469 44,469 0 0 211 4,112 1,460 2,652 0 0 0 2,652 0.55 0.55