Raven Industries Reports Record FY 1998 Sales and Net Earnings: Net Income Up 5% to $8.1 Million, or $1.65 Per Share, vs. $7.7 Million, or $1.61 Per Share; Sales Climb to $149.6 Million from FY97's $139.4 Million
SIOUX FALLS, S.D., March 19 /PRNewswire/ -- Raven Industries, Inc. (Nasdaq: RAVN) today, noting that its backlog was up by $9 million from the previous year-end and the current year outlook looks more positive, reported that both its sales and net earnings rose to record levels for the fiscal year 1998 ended January 31, 1998. The company nevertheless cautioned that its first quarter ending April 30, 1998, may not compare favorably with the year-earlier quarter due to continuing weakness in certain product lines in its plastics segment as well as a heavy concentration of second-half deliveries rather than first-half shipments scheduled for its contract electronics business.
Full-year sales rose 7 percent to $149.6 million over fiscal 1997's $139.4 million. Net income of $8.06 million was up 5 percent from the $7.7 million for the previous year. Earnings per share increased to $1.65 from $1.61.
Fourth-Quarter Results For its fourth quarter, the company reported nearly flat net sales, which grew only one percent to $38.6 million from $38.4 million in the comparable period a year earlier. Net income for the quarter, which included the $1.8 million pretax gain on sale of investment, climbed 24 percent to $2.7 million, or 55 cents per share fully diluted, from $2.17 million, or 45 cents per share fully diluted, a year ago.
Operating income for the fourth quarter was down 29 percent to $2.4 million compared to the year-ago fourth quarter's $3.3 million. For the full year, operating income declined 12 percent to $10.6 million from $12.0 million in the fourth quarter of the previous year.
Fully diluted shares outstanding at the end of the fourth quarter totaled 4,891,000 versus 4,775,000 a year earlier.
David A. Christensen, president and chief executive officer said, "Although Raven reached record sales and an all-time high net income and earnings per share for the fiscal year ended January 31, 1998, we do not feel pleased nor are we satisfied with these results."
Improved Order Backlog and Balance Sheet On the positive side, Christensen noted that, overall, the company's order backlog totaled $47.2 million at January 31, 1998, versus a backlog of $38.1 million at January 31, 1997. "In addition to an improved order backlog moving into the new year, our balance sheet is stronger than ever. Stockholders' equity totals more than $61.5 million with long-term debt at less than 2 percent of total capital," the CEO said.
Electronics Sales and Earnings Increase Electronics sales of $46 million were up 5 percent over last year's $43.9 million while operating income improved by 18 percent to $5.8 million from last year's $4.9 million. "While producing very satisfactory profits, our electronics segment fell short of our sales growth target," Christensen said. "We believe that the necessary elements for resuming sales growth are now in place. Both the contract electronics business and Beta Raven, our process controls subsidiary, showed substantial improvement in operating income due to improved efficiency. In contract electronic business, improvement came from gaining experience in non-military electronics. Our agricultural electronics business, one of our faster-growing product lines, saw sales level off this year, but we are targeting higher sales." Raven reported that new electronics products introduced during fiscal 1997 required additional engineering and fine-tuning in order to gain acceptance in the marketplace.
Plastics Segment Sales Up 15%; Operating Income Down While plastics segment sales rose 15 percent in fiscal 1998 to $68.3 million from last year's $59.2 million, operating income fell to $2 million from the prior year's $4.2 million. "Although the sales and profit interruption in our industrial plastic tank business in fiscal 1998 was severe, and had a major impact on the company's third- and fourth-quarter results, we believe that the longer-term effects of this fallback will be positive," Christensen said. A number of cost savings are now being implemented and the intense sales and marketing efforts of the past few months are beginning to bring new and significant business, he added.
Sewn Products Sales, Operating Income Off Sales in Raven's Sewn Products segment totaled $35.3 million, down 3 percent from the prior year's $36.4 million while operating income of $2.72 million compares to $2.87 million earned the previous year. Outerwear sales remained quite strong with a drop-off in sales of inflatables, which enjoyed strong demand and major projects in fiscal 1997. "Prospects for the coming fiscal year look strong for Raven's Outerwear Business, with a backlog of $16.4 million going into the year versus a backlog of $14.0 million a year earlier," CEO Christensen said.
Raven Industries is a diversified manufacturer that supplies plastics, electronics and special-apparel products to various markets.
This release contains discussions of items which may constitute forward- looking statements within the meaning of federal securities laws. Although Raven Industries believes that expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurances that its expectations will be achieved. Factors that could cause actual results to differ from expectations include general economic conditions, weather conditions which could affect certain of the company's primary markets such as the agricultural market or its market for outerwear, or changes in competition which could impact any of the company's product lines.