Raven Industries Inc.
) reported first quarter results ended April 30, 2012, delivering
earnings of $1.04 per share, increasing 21% from the 86 cents
earned in the year-ago quarter. Results reflected strong
performance in Applied Technology and Engineered Films segments.
Earnings per share comfortably surpassed the Zacks Consensus
Estimate of 89 cents per share.
Sales increased 16% year over year to $117.9 million, beating
the Zacks Consensus Estimate of $112 million. The outperformance
was attributable to the double-digit sales growth in Applied
Technology and Engineered Films segments.
Cost of sales increased 12% year over year to $77 million in the
reported quarter. Selling, general and administrative expenses
increased 30% year over year to $9.3 million. Operating income
increased 21% year over year to $28.4 million in the quarter.
Applied Technology: Sales surged 29% year over year to $50.5
million in the reported quarter in this segment. Operating income
also soared 39% to $20.9 million from $15.1 million. The
performance was attributable to the strength in domestic
agricultural market. International sales also saw a strong growth
during the quarter.
Engineered Films: The segment reported record sales of $41
million, increasing 37% year over year. Operating income saw a
whopping 122% increase year-over-year to a record $9.2 million. The
solid performance was driven by strength in the energy and
agricultural markets, and deliveries of geomembrane films for
environmental protection, that increased demand in the first
quarter. Margins benefited from an attractive cost/price spread for
raw materials, improved operating efficiencies and plant
utilization, reduced scrap and favorable product mix.
Aerostar: Sales decreased 29% year over year to $10.8 million in
the quarter. The segment reported an operating loss of $1.16
million compared to an operating income of $4.06 million in the
prior year quarter. A difficult federal spending environment was
responsible for the decrease in sales and operating
Electronic Systems: Sales dipped 2% year over year to $19.1
million in the quarter. Operating income however increased 8% to
Raven Industries ended the quarter with cash and cash
equivalents, including short-term investments of $43.5 million, up
from the $25.8 million at the end of January 31, 2012 and $42.6
million as of April 30, 2011. Cash flow from operating activities
during the quarter improved to $28.2 million from $11.0 million in
the year ago quarter.
Raven will benefit from the current strength in the agriculture
market. However, quarter-to-quarter variability for aerostat orders
will remain leading to significant fluctuations in the Aerostar
Division. The company continues with its strategy of investing
significantly in the research and development, thereby, helping to
maintain the strong financial results.
In addition, Raven has ample scope to fund future growth and
increase dividends with the support from debt-free balance sheet
and solid cash flow. The quantitative Zacks #3 Rank (short-term
Hold rating) for the company indicates no clear directional
pressure on stock over the near term.
South Dakota-based Raven Industries Inc. is an industrial
manufacturer providing a variety of products for the agricultural,
industrial, construction and military/aerospace markets. The
company operates through four business segments: Engineered Films,
Electronic Systems, Applied Technology and Aerostar. Graco Inc. (
) and Spartech Corp. (
) are the peers of Raven.
GRACO INC (GGG): Free Stock Analysis Report
RAVEN INDS INC (RAVN): Free Stock Analysis
SPARTECH CORP (SEH): Free Stock Analysis Report
To read this article on Zacks.com click here.