Raven Reports First-Quarter Sales Down 10%; EPS Declines 52% to 21 Cents From 44 Cents Year Ago
SIOUX FALLS, S.D., May 15 /PRNewswire/ -- Raven Industries, Inc. (Nasdaq: RAVN) announced today that, as expected, customer delivery schedules in its electronics and outerwear businesses and weakness in its plastic tank business hurt first-quarter results for the period ended April 30, 1998.
"We expect that this period will be the low point of the year, and order backlog and customer delivery schedules point to improving results for the second half of the fiscal year," commented David A. Christensen, president and chief executive officer.
First-quarter sales of $32.2 million were down 10 percent from last year's first quarter total of $35.7 million. Net income for the quarter dropped 52 percent from last year's comparable period to $1,024,000, while earnings per share of 21 cents declined the same percentage from the 44 cents a year ago.
Sales were off in all three business segments, with Electronics down 3 percent; Plastics, 8 percent; and Sewn Products, 31 percent. "While the quarter was greatly influenced by delivery schedules in our contract electronics and outerwear businesses (which are weighted toward second-half deliveries) some weakness in our agricultural electronics line as well as our industrial plastic tank business is also having an impact on sales and profitability," Christensen said.
Electronics Segment Segment sales declined 3 percent to $11.77 million from last year's $12.16 million. "Contract electronics deliveries were down nearly $1 million, which we expect to recover in our second half as our current order backlog remains well ahead of last year. Sales of flow controls to the agricultural market were also down $500,000 for the quarter due to very weak February sales. Early season sales (particularly the month of February) were hurt by wet weather conditions in the southeastern U.S., and by low wheat prices in the wheat-growing sections of the country. However, in March and April, sales began to pick up with significantly more favorable conditions in the corn- and soybean-growing areas of the Midwest," Christensen explained.
Prospects for the remainder of the year, Christensen added, "are improved and we expect sales for this product line to exceed last year's total. Sales of process controls were up $1 million for the quarter, and with higher second-half deliveries scheduled for contract electronics along with the expected improvement in agricultural business, we expect to show increased sales and profits for this segment compared to last year."
Plastics Segment Sales of $16.52 million declined 8 percent from last year's first-quarter total of $17.92 million. Sales of engineered films increased with profits improving as well. However, sales of plastic tanks to the industrial market remained weak with profits well below the relatively strong performance of the year-ago quarter. While operating results for the plastic tank business show improvement over the third and fourth quarters of last year, margins are still well below acceptable levels. "With strong performance from our engineered films group and continuing improvement in the plastic tank business, we expect this business segment to produce improved results for the second half and for the entire year," Christensen said.
Sewn Products Sales of $3.88 million were off 31 percent in comparison to the $5.59 million delivered in last year's first quarter. As a result of the lack of shipments in the quarter, an operating loss of $172,000 was incurred versus operating income of $306,000 in last year's first quarter. "First-quarter results do not provide an accurate picture of what we are expecting for the full year. Our current backlog is 22 percent above last year and first- quarter weakness was due entirely to scheduled deliveries for our major customers," CEO Christensen noted.
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.