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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Raven Industries Inc | NASDAQ:RAVN | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 58.08 | 57.96 | 57.86 | 0 | 01:00:00 |
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þ
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|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended October 31, 2018
|
o
|
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from to
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South Dakota
(State or other jurisdiction of incorporation or organization)
|
|
46-0246171
(I.R.S. Employer Identification No.)
|
Large accelerated filer
þ
|
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
o
|
Emerging growth company
o
|
|
|
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PAGE
|
|
|
|
|
|
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Item 2. Unregistered Sales of Equity Securities
and Use of Proceeds
|
|
Item 4.
Mine Safety Disclosures
|
|
(dollars and shares in thousands, except per-share data)
|
October 31,
2018 |
|
January 31,
2018 |
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
68,693
|
|
|
$
|
40,535
|
|
Accounts receivable, net
|
66,166
|
|
|
58,532
|
|
||
Inventories
|
53,229
|
|
|
55,351
|
|
||
Other current assets
|
6,474
|
|
|
5,861
|
|
||
Total current assets
|
194,562
|
|
|
160,279
|
|
||
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|
|
|
||||
Property, plant and equipment, net
|
106,499
|
|
|
106,280
|
|
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Goodwill
|
46,349
|
|
|
46,710
|
|
||
Amortizable intangible assets, net
|
11,407
|
|
|
10,584
|
|
||
Other assets
|
2,909
|
|
|
2,950
|
|
||
TOTAL ASSETS
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$
|
361,726
|
|
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$
|
326,803
|
|
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||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
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$
|
12,149
|
|
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$
|
13,106
|
|
Accrued liabilities
|
21,432
|
|
|
21,946
|
|
||
Other current liabilities
|
1,545
|
|
|
1,890
|
|
||
Total current liabilities
|
35,126
|
|
|
36,942
|
|
||
|
|
|
|
||||
Other liabilities
|
17,091
|
|
|
13,795
|
|
||
|
|
|
|
||||
Commitments and contingencies (see Note 11)
|
—
|
|
|
—
|
|
||
|
|
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|
||||
Shareholders' equity
|
|
|
|
||||
Common stock, $1 par value, authorized shares 100,000; issued 67,285 and 67,124, respectively
|
67,285
|
|
|
67,124
|
|
||
Paid-in capital
|
58,832
|
|
|
59,143
|
|
||
Retained earnings
|
287,745
|
|
|
252,772
|
|
||
Accumulated other comprehensive income (loss)
|
(4,033
|
)
|
|
(2,573
|
)
|
||
Treasury stock at cost, 31,332 and 31,332 shares, respectively
|
(100,402
|
)
|
|
(100,402
|
)
|
||
Total Raven Industries, Inc. shareholders' equity
|
309,427
|
|
|
276,064
|
|
||
Noncontrolling interest
|
82
|
|
|
2
|
|
||
Total equity
|
309,509
|
|
|
276,066
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
361,726
|
|
|
$
|
326,803
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(dollars in thousands, except per-share data)
|
October 31,
2018 |
|
October 31,
2017 |
|
October 31,
2018 |
|
October 31,
2017 |
||||||||
Net sales
|
$
|
104,833
|
|
|
$
|
101,349
|
|
|
$
|
318,646
|
|
|
$
|
281,494
|
|
Cost of sales
|
72,180
|
|
|
68,016
|
|
|
211,387
|
|
|
189,692
|
|
||||
Gross profit
|
32,653
|
|
|
33,333
|
|
|
107,259
|
|
|
91,802
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Research and development expenses
|
6,478
|
|
|
4,083
|
|
|
17,914
|
|
|
12,319
|
|
||||
Selling, general, and administrative expenses
|
12,563
|
|
|
11,421
|
|
|
37,573
|
|
|
31,476
|
|
||||
Long-lived asset impairment loss
|
—
|
|
|
—
|
|
|
—
|
|
|
259
|
|
||||
Operating income
|
13,612
|
|
|
17,829
|
|
|
51,772
|
|
|
47,748
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income (expense), net
|
674
|
|
|
(34
|
)
|
|
6,214
|
|
|
(327
|
)
|
||||
Income before income taxes
|
14,286
|
|
|
17,795
|
|
|
57,986
|
|
|
47,421
|
|
||||
|
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|
|
|
|
|
|
||||||||
Income tax expense
|
1,230
|
|
|
5,798
|
|
|
9,062
|
|
|
14,842
|
|
||||
Net income
|
13,056
|
|
|
11,997
|
|
|
48,924
|
|
|
32,579
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to the noncontrolling interest
|
24
|
|
|
(1
|
)
|
|
80
|
|
|
(2
|
)
|
||||
|
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|
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|
|
|
|
||||||||
Net income attributable to Raven Industries, Inc.
|
$
|
13,032
|
|
|
$
|
11,998
|
|
|
$
|
48,844
|
|
|
$
|
32,581
|
|
|
|
|
|
|
|
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|
||||||||
Net income per common share:
|
|
|
|
|
|
|
|
||||||||
─ Basic
|
$
|
0.36
|
|
|
$
|
0.33
|
|
|
$
|
1.36
|
|
|
$
|
0.90
|
|
─ Diluted
|
$
|
0.36
|
|
|
$
|
0.33
|
|
|
$
|
1.34
|
|
|
$
|
0.89
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
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|
|
|
|
||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
13,056
|
|
|
$
|
11,997
|
|
|
$
|
48,924
|
|
|
$
|
32,579
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation
|
(325
|
)
|
|
(185
|
)
|
|
(1,162
|
)
|
|
637
|
|
||||
Postretirement benefits, net of income tax benefit of $2, $4, $6 and $11 respectively
|
(6
|
)
|
|
(6
|
)
|
|
(18
|
)
|
|
(19
|
)
|
||||
Other comprehensive income (loss), net of tax
|
(331
|
)
|
|
(191
|
)
|
|
(1,180
|
)
|
|
618
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income
|
12,725
|
|
|
11,806
|
|
|
47,744
|
|
|
33,197
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income (loss) attributable to noncontrolling interest
|
24
|
|
|
(1
|
)
|
|
80
|
|
|
(2
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income attributable to Raven Industries, Inc.
|
$
|
12,701
|
|
|
$
|
11,807
|
|
|
$
|
47,664
|
|
|
$
|
33,199
|
|
|
$1 Par Common Stock
|
Paid-in Capital
|
Treasury Stock
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
Raven Industries, Inc. Equity
|
Non- controlling Interest
|
Total Equity
|
|||||||||||||||||
(dollars in thousands, except per-share amounts)
|
Shares
|
Cost
|
||||||||||||||||||||||||
Balance January 31, 2017
|
$
|
67,060
|
|
$
|
55,795
|
|
30,984
|
|
$
|
(90,402
|
)
|
$
|
230,649
|
|
$
|
(3,676
|
)
|
$
|
259,426
|
|
$
|
5
|
|
$
|
259,431
|
|
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
32,581
|
|
—
|
|
32,581
|
|
(2
|
)
|
32,579
|
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Cumulative foreign currency translation adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
637
|
|
637
|
|
—
|
|
637
|
|
||||||||
Postretirement benefits reclassified from accumulated other comprehensive income (loss) after tax benefit of $11
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(19
|
)
|
(19
|
)
|
—
|
|
(19
|
)
|
||||||||
Cash dividends ($0.39 per share)
|
—
|
|
164
|
|
—
|
|
—
|
|
(14,196
|
)
|
—
|
|
(14,032
|
)
|
—
|
|
(14,032
|
)
|
||||||||
Shares issued on stock options exercised, net of shares withheld for employee taxes
|
13
|
|
(170
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(157
|
)
|
—
|
|
(157
|
)
|
||||||||
Shares issued on vesting of stock units, net of shares withheld for employee taxes
|
11
|
|
(162
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(151
|
)
|
—
|
|
(151
|
)
|
||||||||
Director shares issued
|
4
|
|
(4
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Shares repurchased
|
—
|
|
—
|
|
348
|
|
(10,000
|
)
|
—
|
|
—
|
|
(10,000
|
)
|
—
|
|
(10,000
|
)
|
||||||||
Share-based compensation
|
—
|
|
2,861
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,861
|
|
—
|
|
2,861
|
|
||||||||
Balance October 31, 2017
|
$
|
67,088
|
|
$
|
58,484
|
|
31,332
|
|
$
|
(100,402
|
)
|
$
|
249,034
|
|
$
|
(3,058
|
)
|
$
|
271,146
|
|
$
|
3
|
|
$
|
271,149
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance January 31, 2018
|
$
|
67,124
|
|
$
|
59,143
|
|
31,332
|
|
$
|
(100,402
|
)
|
$
|
252,772
|
|
$
|
(2,573
|
)
|
$
|
276,064
|
|
$
|
2
|
|
$
|
276,066
|
|
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
48,844
|
|
—
|
|
48,844
|
|
80
|
|
48,924
|
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Cumulative foreign currency translation adjustment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,162
|
)
|
(1,162
|
)
|
—
|
|
(1,162
|
)
|
||||||||
Postretirement benefits reclassified from accumulated other comprehensive income (loss) after tax benefit of $6
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(18
|
)
|
(18
|
)
|
—
|
|
(18
|
)
|
||||||||
Reclassification due to ASU 2018-02 adoption
|
—
|
|
—
|
|
—
|
|
—
|
|
280
|
|
(280
|
)
|
—
|
|
—
|
|
—
|
|
||||||||
Cash dividends ($0.39 per share)
|
—
|
|
151
|
|
—
|
|
—
|
|
(14,151
|
)
|
—
|
|
(14,000
|
)
|
—
|
|
(14,000
|
)
|
||||||||
Shares issued on stock options exercised, net of shares withheld for employee taxes
|
113
|
|
(2,748
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,635
|
)
|
—
|
|
(2,635
|
)
|
||||||||
Shares issued on vesting of stock units, net of shares withheld for employee taxes
|
48
|
|
(822
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(774
|
)
|
—
|
|
(774
|
)
|
||||||||
Share-based compensation
|
—
|
|
3,108
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,108
|
|
—
|
|
3,108
|
|
||||||||
Balance October 31, 2018
|
$
|
67,285
|
|
$
|
58,832
|
|
31,332
|
|
$
|
(100,402
|
)
|
$
|
287,745
|
|
$
|
(4,033
|
)
|
$
|
309,427
|
|
$
|
82
|
|
$
|
309,509
|
|
|
Nine Months Ended
|
||||||
(dollars in thousands)
|
October 31,
2018 |
|
October 31,
2017 |
||||
OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
48,924
|
|
|
$
|
32,579
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
11,273
|
|
|
10,985
|
|
||
Change in fair value of acquisition-related contingent consideration
|
585
|
|
|
198
|
|
||
Long-lived asset impairment loss
|
—
|
|
|
259
|
|
||
Loss from equity investment
|
—
|
|
|
247
|
|
||
Gain from sale of equity method investment
|
(5,785
|
)
|
|
—
|
|
||
Deferred income taxes
|
869
|
|
|
(1,035
|
)
|
||
Share-based compensation expense
|
3,108
|
|
|
2,861
|
|
||
Other operating activities, net
|
(2,327
|
)
|
|
868
|
|
||
Change in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(11,456
|
)
|
|
(8,160
|
)
|
||
Inventories
|
1,932
|
|
|
(9,213
|
)
|
||
Other assets
|
428
|
|
|
(897
|
)
|
||
Operating liabilities
|
4,757
|
|
|
2,142
|
|
||
Net cash provided by operating activities
|
52,308
|
|
|
30,834
|
|
||
|
|
|
|
||||
INVESTING ACTIVITIES:
|
|
|
|
||||
Capital expenditures
|
(10,421
|
)
|
|
(7,003
|
)
|
||
Payments related to business acquisitions
|
—
|
|
|
(12,700
|
)
|
||
Proceeds from sale or maturity of investments
|
7,334
|
|
|
250
|
|
||
Purchases of investments
|
(502
|
)
|
|
(255
|
)
|
||
Proceeds (disbursements) from sale of assets, settlement of liabilities
|
832
|
|
|
(333
|
)
|
||
Other investing activities
|
(2,042
|
)
|
|
(36
|
)
|
||
Net cash used in investing activities
|
(4,799
|
)
|
|
(20,077
|
)
|
||
|
|
|
|
||||
FINANCING ACTIVITIES:
|
|
|
|
||||
Dividends paid
|
(14,000
|
)
|
|
(14,032
|
)
|
||
Payments for common shares repurchased
|
—
|
|
|
(10,000
|
)
|
||
Payments of acquisition-related contingent liability
|
(1,220
|
)
|
|
(364
|
)
|
||
Restricted stock units vested and issued
|
(774
|
)
|
|
(151
|
)
|
||
Employee stock option exercises
|
(2,635
|
)
|
|
(157
|
)
|
||
Other financing activities
|
(151
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(18,780
|
)
|
|
(24,704
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
(571
|
)
|
|
172
|
|
||
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
28,158
|
|
|
(13,775
|
)
|
||
Cash and cash equivalents at beginning of year
|
40,535
|
|
|
50,648
|
|
||
Cash and cash equivalents at end of period
|
$
|
68,693
|
|
|
$
|
36,873
|
|
|
|
October 31, 2018
|
|
January 31, 2018
|
||||
Accounts receivable, net:
|
|
|
|
|
||||
Trade accounts
|
|
$
|
64,942
|
|
|
$
|
57,063
|
|
Unbilled receivables
|
|
1,967
|
|
|
2,447
|
|
||
Allowance for doubtful accounts
|
|
(743
|
)
|
|
(978
|
)
|
||
|
|
$
|
66,166
|
|
|
$
|
58,532
|
|
Inventories:
|
|
|
|
|
||||
Finished goods
|
|
7,191
|
|
|
8,054
|
|
||
In process
|
|
1,040
|
|
|
961
|
|
||
Materials
|
|
44,998
|
|
|
46,336
|
|
||
|
|
$
|
53,229
|
|
|
$
|
55,351
|
|
Other current assets:
|
|
|
|
|
||||
Insurance policy benefit
|
|
574
|
|
|
759
|
|
||
Income tax receivable
|
|
1,370
|
|
|
1,397
|
|
||
Receivable from sale of investment
|
|
1,055
|
|
|
—
|
|
||
Prepaid expenses and other
|
|
3,475
|
|
|
3,705
|
|
||
|
|
$
|
6,474
|
|
|
$
|
5,861
|
|
Property, plant and equipment, net:
|
|
|
|
|
||||
Land
|
|
$
|
3,234
|
|
|
$
|
3,234
|
|
Buildings and improvements
|
|
81,191
|
|
|
80,299
|
|
||
Machinery and equipment
|
|
157,570
|
|
|
149,847
|
|
||
Accumulated depreciation
|
|
(135,804
|
)
|
|
(127,523
|
)
|
||
|
|
106,191
|
|
|
105,857
|
|
||
Property, plant and equipment subject to capital leases:
|
|
|
|
|
||||
Machinery and equipment
|
|
510
|
|
|
488
|
|
||
Accumulated amortization for capitalized leases
|
|
(202
|
)
|
|
(65
|
)
|
||
|
|
$
|
106,499
|
|
|
$
|
106,280
|
|
Other assets:
|
|
|
|
|
||||
Equity investments
|
|
$
|
249
|
|
|
$
|
1,955
|
|
Deferred income taxes
|
|
19
|
|
|
19
|
|
||
Other
|
|
2,641
|
|
|
976
|
|
||
|
|
$
|
2,909
|
|
|
$
|
2,950
|
|
Accrued liabilities:
|
|
|
|
|
||||
Salaries and related
|
|
$
|
6,543
|
|
|
$
|
9,409
|
|
Benefits
|
|
4,314
|
|
|
4,225
|
|
||
Insurance obligations
|
|
2,626
|
|
|
1,992
|
|
||
Warranties
|
|
851
|
|
|
1,163
|
|
||
Income taxes
|
|
549
|
|
|
226
|
|
||
Other taxes
|
|
1,568
|
|
|
1,880
|
|
||
Acquisition-related contingent consideration
|
|
1,764
|
|
|
1,036
|
|
||
Other
|
|
3,217
|
|
|
2,015
|
|
||
|
|
$
|
21,432
|
|
|
$
|
21,946
|
|
Other liabilities:
|
|
|
|
|
||||
Postretirement benefits
|
|
$
|
8,246
|
|
|
$
|
8,264
|
|
Acquisition-related contingent consideration
|
|
647
|
|
|
2,010
|
|
||
Deferred income taxes
|
|
1,472
|
|
|
615
|
|
||
Uncertain tax positions
|
|
2,637
|
|
|
2,634
|
|
||
Other
|
|
4,089
|
|
|
272
|
|
||
|
|
$
|
17,091
|
|
|
$
|
13,795
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|||||
|
October 31,
2018 |
|
October 31,
2017 |
|
October 31,
2018 |
|
October 31,
2017 |
|
Anti-dilutive options and restricted stock units
|
—
|
|
|
338,244
|
|
50,699
|
|
385,157
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
October 31,
2018 |
|
October 31,
2017 |
|
October 31,
2018 |
|
October 31,
2017 |
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Raven Industries, Inc.
|
$
|
13,032
|
|
|
$
|
11,998
|
|
|
$
|
48,844
|
|
|
$
|
32,581
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
35,952,688
|
|
|
35,829,880
|
|
|
35,890,638
|
|
|
36,002,024
|
|
||||
Weighted average fully vested stock units outstanding
|
104,649
|
|
|
109,558
|
|
|
98,235
|
|
|
105,830
|
|
||||
Denominator for basic calculation
|
36,057,337
|
|
|
35,939,438
|
|
|
35,988,873
|
|
|
36,107,854
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding
|
35,952,688
|
|
|
35,829,880
|
|
|
35,890,638
|
|
|
36,002,024
|
|
||||
Weighted average fully vested stock units outstanding
|
104,649
|
|
|
109,558
|
|
|
98,235
|
|
|
105,830
|
|
||||
Dilutive impact of stock options and restricted stock units
|
414,542
|
|
|
380,997
|
|
|
450,429
|
|
|
369,339
|
|
||||
Denominator for diluted calculation
|
36,471,879
|
|
|
36,320,435
|
|
|
36,439,302
|
|
|
36,477,193
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per share ─ basic
|
$
|
0.36
|
|
|
$
|
0.33
|
|
|
$
|
1.36
|
|
|
$
|
0.90
|
|
Net income per share ─ diluted
|
$
|
0.36
|
|
|
$
|
0.33
|
|
|
$
|
1.34
|
|
|
$
|
0.89
|
|
|
Revenue by Product Category
|
||||||||||||||||||||||||||||||
|
Three Months Ended October 31, 2018
|
|
Three Months Ended October 31, 2017
|
||||||||||||||||||||||||||||
|
ATD
|
EFD
|
AERO
|
ELIM
(a)
|
Total
|
|
ATD
|
EFD
|
AERO
|
ELIM
(a)
|
Total
|
||||||||||||||||||||
Lighter-than-Air
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Domestic
|
$
|
—
|
|
$
|
—
|
|
$
|
14,152
|
|
$
|
—
|
|
$
|
14,152
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
7,443
|
|
$
|
—
|
|
$
|
7,443
|
|
International
|
—
|
|
—
|
|
298
|
|
—
|
|
298
|
|
|
—
|
|
—
|
|
33
|
|
—
|
|
33
|
|
||||||||||
Plastic Films & Sheeting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Domestic
|
—
|
|
52,841
|
|
—
|
|
(177
|
)
|
52,664
|
|
|
—
|
|
62,421
|
|
—
|
|
(181
|
)
|
62,240
|
|
||||||||||
International
|
—
|
|
5,398
|
|
—
|
|
—
|
|
5,398
|
|
|
—
|
|
2,687
|
|
—
|
|
—
|
|
2,687
|
|
||||||||||
Precision Agriculture Equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Domestic
|
23,764
|
|
—
|
|
—
|
|
—
|
|
23,764
|
|
|
20,079
|
|
—
|
|
—
|
|
—
|
|
20,079
|
|
||||||||||
International
|
5,976
|
|
—
|
|
—
|
|
—
|
|
5,976
|
|
|
5,240
|
|
—
|
|
—
|
|
—
|
|
5,240
|
|
||||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Domestic
|
—
|
|
—
|
|
2,578
|
|
—
|
|
2,578
|
|
|
—
|
|
—
|
|
3,615
|
|
—
|
|
3,615
|
|
||||||||||
International
|
—
|
|
—
|
|
3
|
|
—
|
|
3
|
|
|
—
|
|
—
|
|
12
|
|
—
|
|
12
|
|
||||||||||
Totals
|
$
|
29,740
|
|
$
|
58,239
|
|
$
|
17,031
|
|
$
|
(177
|
)
|
$
|
104,833
|
|
|
$
|
25,319
|
|
$
|
65,108
|
|
$
|
11,103
|
|
$
|
(181
|
)
|
$
|
101,349
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Nine Months Ended October 31, 2018
|
|
Nine Months Ended October 31, 2017
|
||||||||||||||||||||||||||||
|
ATD
|
EFD
|
AERO
|
ELIM
(a)
|
Total
|
|
ATD
|
EFD
|
AERO
|
ELIM
(a)
|
Total
|
||||||||||||||||||||
Lighter-than-Air
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Domestic
|
$
|
—
|
|
$
|
—
|
|
$
|
31,899
|
|
$
|
—
|
|
$
|
31,899
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
19,109
|
|
$
|
—
|
|
$
|
19,109
|
|
International
|
—
|
|
—
|
|
834
|
|
—
|
|
834
|
|
|
—
|
|
—
|
|
87
|
|
—
|
|
87
|
|
||||||||||
Plastic Films & Sheeting
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Domestic
|
—
|
|
163,059
|
|
—
|
|
(441
|
)
|
162,618
|
|
|
—
|
|
148,775
|
|
—
|
|
(508
|
)
|
148,267
|
|
||||||||||
International
|
—
|
|
14,047
|
|
—
|
|
—
|
|
14,047
|
|
|
—
|
|
8,916
|
|
—
|
|
—
|
|
8,916
|
|
||||||||||
Precision Agriculture Equipment
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Domestic
|
76,881
|
|
—
|
|
—
|
|
—
|
|
76,881
|
|
|
71,079
|
|
—
|
|
—
|
|
—
|
|
71,079
|
|
||||||||||
International
|
23,651
|
|
—
|
|
—
|
|
—
|
|
23,651
|
|
|
23,154
|
|
—
|
|
—
|
|
—
|
|
23,154
|
|
||||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Domestic
|
—
|
|
—
|
|
8,698
|
|
—
|
|
8,698
|
|
|
—
|
|
—
|
|
10,828
|
|
—
|
|
10,828
|
|
||||||||||
International
|
—
|
|
—
|
|
18
|
|
—
|
|
18
|
|
|
—
|
|
—
|
|
54
|
|
—
|
|
54
|
|
||||||||||
Totals
|
$
|
100,532
|
|
$
|
177,106
|
|
$
|
41,449
|
|
$
|
(441
|
)
|
$
|
318,646
|
|
|
$
|
94,233
|
|
$
|
157,691
|
|
$
|
30,078
|
|
$
|
(508
|
)
|
$
|
281,494
|
|
|
October 31,
2018 |
|
January 31,
2018 |
|
$ Change
|
% Change
|
|||||||
Contract assets
(a)
|
$
|
2,616
|
|
|
$
|
3,119
|
|
|
$
|
(503
|
)
|
(16.1
|
)%
|
|
|
|
|
|
|
|
|||||||
Contract liabilities
(b)
|
$
|
1,545
|
|
|
$
|
1,890
|
|
|
$
|
(345
|
)
|
(18.3
|
)%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
October 31,
2018 |
|
October 31,
2017 |
|
October 31,
2018 |
|
October 31,
2017 |
||||||||
Beginning balance
|
$
|
2,950
|
|
|
$
|
1,567
|
|
|
$
|
3,046
|
|
|
$
|
1,741
|
|
Fair value of contingent consideration acquired
|
—
|
|
|
1,256
|
|
|
—
|
|
|
1,256
|
|
||||
Change in fair value of the liability
|
182
|
|
|
52
|
|
|
585
|
|
|
198
|
|
||||
Contingent consideration earn-out paid
|
(721
|
)
|
|
(44
|
)
|
|
(1,220
|
)
|
|
(364
|
)
|
||||
Ending balance
|
$
|
2,411
|
|
|
$
|
2,831
|
|
|
$
|
2,411
|
|
|
$
|
2,831
|
|
|
|
|
|
|
|
|
|
||||||||
Classification of liability in the Consolidated balance sheet
|
|
|
|
|
|
|
|
||||||||
Accrued liabilities
|
$
|
1,764
|
|
|
$
|
815
|
|
|
$
|
1,764
|
|
|
$
|
815
|
|
Other liabilities, long-term
|
647
|
|
|
2,016
|
|
|
647
|
|
|
2,016
|
|
||||
Balance at October 31
|
$
|
2,411
|
|
|
$
|
2,831
|
|
|
$
|
2,411
|
|
|
$
|
2,831
|
|
|
|
Applied
Technology
|
|
Engineered
Films
|
|
Aerostar
|
|
Total
|
||||||||
Balance at January 31, 2018
|
|
$
|
12,741
|
|
|
$
|
33,232
|
|
|
$
|
737
|
|
|
$
|
46,710
|
|
Divestiture of business
|
|
—
|
|
|
—
|
|
|
(103
|
)
|
|
(103
|
)
|
||||
Foreign currency translation adjustment
|
|
(258
|
)
|
|
—
|
|
|
—
|
|
|
(258
|
)
|
||||
Balance at October 31, 2018
|
|
$
|
12,483
|
|
|
$
|
33,232
|
|
|
$
|
634
|
|
|
$
|
46,349
|
|
|
October 31, 2018
|
|
January 31, 2018
|
||||||||||||||||
|
|
Accumulated
|
|
|
|
Accumulated
|
|
||||||||||||
|
Amount
|
amortization
|
Net
|
|
Amount
|
amortization
|
Net
|
||||||||||||
Existing technology
|
$
|
7,190
|
|
$
|
(7,109
|
)
|
$
|
81
|
|
|
$
|
7,290
|
|
$
|
(6,996
|
)
|
$
|
294
|
|
Customer relationships
|
12,483
|
|
(5,234
|
)
|
7,249
|
|
|
13,264
|
|
(4,834
|
)
|
8,430
|
|
||||||
Patents and other intangibles
|
5,837
|
|
(1,760
|
)
|
4,077
|
|
|
4,241
|
|
(2,381
|
)
|
1,860
|
|
||||||
Total
|
$
|
25,510
|
|
$
|
(14,103
|
)
|
$
|
11,407
|
|
|
$
|
24,795
|
|
$
|
(14,211
|
)
|
$
|
10,584
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
October 31,
2018 |
|
October 31,
2017 |
|
October 31,
2018 |
|
October 31,
2017 |
||||||||
Service cost
|
$
|
7
|
|
|
$
|
21
|
|
|
$
|
21
|
|
|
$
|
64
|
|
Interest cost
|
79
|
|
|
83
|
|
|
237
|
|
|
247
|
|
||||
Amortization of actuarial losses
|
32
|
|
|
30
|
|
|
96
|
|
|
90
|
|
||||
Amortization of unrecognized gains in prior service cost
|
(40
|
)
|
|
(40
|
)
|
|
(120
|
)
|
|
(120
|
)
|
||||
Net periodic benefit cost
|
$
|
78
|
|
|
$
|
94
|
|
|
$
|
234
|
|
|
$
|
281
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
October 31,
2018 |
|
October 31,
2017 |
|
October 31,
2018 |
|
October 31,
2017 |
||||||||
Beginning balance
|
$
|
1,137
|
|
|
$
|
2,265
|
|
|
$
|
1,163
|
|
|
$
|
1,547
|
|
Change in provision
|
521
|
|
|
(274
|
)
|
|
1,007
|
|
|
1,504
|
|
||||
Settlements made
|
(807
|
)
|
|
(774
|
)
|
|
(1,319
|
)
|
|
(1,834
|
)
|
||||
Ending balance
|
$
|
851
|
|
|
$
|
1,217
|
|
|
$
|
851
|
|
|
$
|
1,217
|
|
|
October 31, 2018
|
|
January 31, 2018
|
||||
Unamortized debt issuance costs
(a)
|
$
|
160
|
|
|
$
|
242
|
|
|
October 31, 2018
|
|
January 31, 2018
|
||||
Letters of credit outstanding
(a)
|
$
|
514
|
|
|
$
|
1,097
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
October 31,
2018 |
|
October 31,
2017 |
|
October 31,
2018 |
|
October 31,
2017 |
||||
Effective tax rate
|
8.6
|
%
|
|
32.6
|
%
|
|
15.6
|
%
|
|
31.3
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
October 31,
2018 |
|
October 31,
2017 |
|
October 31,
2018 |
|
October 31,
2017 |
||||||||
Total discrete tax benefit (expense), net
|
$
|
1,440
|
|
|
$
|
(9
|
)
|
|
$
|
2,129
|
|
|
$
|
(521
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
October 31,
2018 |
|
October 31,
2017 |
|
October 31,
2018 |
|
October 31,
2017 |
||||||||
Dividends paid
(a)
|
$
|
4,674
|
|
|
$
|
4,648
|
|
|
$
|
14,000
|
|
|
$
|
14,032
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends paid per share (in cents per share)
(a)
|
13.0
|
|
|
13.0
|
|
|
39.0
|
|
|
39.0
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
October 31, 2018
|
|
October 31, 2017
|
|
October 31, 2018
|
|
October 31, 2017
|
||||||||
Cost of sales
|
$
|
99
|
|
|
$
|
62
|
|
|
$
|
282
|
|
|
$
|
175
|
|
Research and development expenses
|
32
|
|
|
14
|
|
|
99
|
|
|
82
|
|
||||
Selling, general, and administrative expenses
|
696
|
|
|
853
|
|
|
2,727
|
|
|
2,604
|
|
||||
Total stock-based compensation expense
|
$
|
827
|
|
|
$
|
929
|
|
|
$
|
3,108
|
|
|
$
|
2,861
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
October 31,
2018 |
|
October 31,
2017 |
|
October 31,
2018 |
|
October 31,
2017 |
||||||||
Net sales
|
|
|
|
|
|
|
|
||||||||
Applied Technology
|
$
|
29,740
|
|
|
$
|
25,319
|
|
|
$
|
100,532
|
|
|
$
|
94,233
|
|
Engineered Films
(a)(b)
|
58,239
|
|
|
65,108
|
|
|
177,106
|
|
|
157,691
|
|
||||
Aerostar
|
17,031
|
|
|
11,103
|
|
|
41,449
|
|
|
30,078
|
|
||||
Intersegment eliminations
(c)
|
(177
|
)
|
|
(181
|
)
|
|
(441
|
)
|
|
(508
|
)
|
||||
Consolidated net sales
|
$
|
104,833
|
|
|
$
|
101,349
|
|
|
$
|
318,646
|
|
|
$
|
281,494
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income
(d)
|
|
|
|
|
|
|
|
||||||||
Applied Technology
|
$
|
7,737
|
|
|
$
|
5,357
|
|
|
$
|
32,473
|
|
|
$
|
25,447
|
|
Engineered Films
|
9,239
|
|
|
17,115
|
|
|
33,241
|
|
|
35,386
|
|
||||
Aerostar
|
3,839
|
|
|
1,359
|
|
|
10,479
|
|
|
4,165
|
|
||||
Intersegment eliminations
|
(37
|
)
|
|
(12
|
)
|
|
(33
|
)
|
|
(3
|
)
|
||||
Total reportable segment income
|
20,778
|
|
|
23,819
|
|
|
76,160
|
|
|
64,995
|
|
||||
General and administrative expenses
(d)
|
(7,166
|
)
|
|
(5,990
|
)
|
|
(24,388
|
)
|
|
(17,247
|
)
|
||||
Consolidated operating income
|
$
|
13,612
|
|
|
$
|
17,829
|
|
|
$
|
51,772
|
|
|
$
|
47,748
|
|
•
|
Executive Summary
|
•
|
Results of Operations - Segment Analysis
|
•
|
Outlook
|
•
|
Liquidity and Capital Resources
|
•
|
Off-Balance Sheet Arrangements and Contractual Obligations
|
•
|
Critical Accounting Policies and Estimates
|
•
|
Accounting Pronouncements
|
•
|
Consolidated net sales, gross margin, operating income, operating margin, net income, and diluted earnings per share
|
•
|
Cash flow from operations and shareholder returns
|
•
|
Segment net sales, gross profit, gross margin, operating income, and operating margin. At the segment level, operating income does not include an allocation of general and administrative expenses.
|
•
|
Intentionally serve a set of diversified market segments with attractive near- and long-term growth prospects;
|
•
|
Consistently manage a pipeline of growth initiatives within our market segments;
|
•
|
Aggressively compete on quality, service, innovation, and peak performance;
|
•
|
Hold ourselves accountable for continuous improvement;
|
•
|
Value our balance sheet as a source of strength and stability with which to pursue strategic acquisitions; and
|
•
|
Make corporate responsibility a top priority.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||
(dollars in thousands)
|
|
October 31,
2018 |
|
October 31,
2017 |
|
$ Change
|
|
% Change
|
|
October 31,
2018 |
|
October 31,
2017 |
|
$ Change
|
|
% Change
|
||||||||||||||
Net sales
|
|
$
|
29,740
|
|
|
$
|
25,319
|
|
|
$
|
4,421
|
|
|
17.5
|
%
|
|
$
|
100,532
|
|
|
$
|
94,233
|
|
|
$
|
6,299
|
|
|
6.7
|
%
|
Gross profit
|
|
14,639
|
|
|
10,790
|
|
|
3,849
|
|
|
35.7
|
%
|
|
51,640
|
|
|
41,554
|
|
|
10,086
|
|
|
24.3
|
%
|
||||||
Gross margin
|
|
49.2
|
%
|
|
42.6
|
%
|
|
|
|
|
|
51.4
|
%
|
|
44.1
|
%
|
|
|
|
|
||||||||||
Operating expenses
|
|
$
|
6,902
|
|
|
$
|
5,433
|
|
|
$
|
1,469
|
|
|
27.0
|
%
|
|
$
|
19,167
|
|
|
$
|
15,848
|
|
|
$
|
3,319
|
|
|
20.9
|
%
|
Operating expenses as % of sales
|
|
23.2
|
%
|
|
21.5
|
%
|
|
|
|
|
|
19.1
|
%
|
|
16.8
|
%
|
|
|
|
|
||||||||||
Long-lived asset impairment loss
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
$
|
—
|
|
|
$
|
259
|
|
|
|
|
|
|
|
||||
Operating income
(a)
|
|
$
|
7,737
|
|
|
$
|
5,357
|
|
|
$
|
2,380
|
|
|
44.4
|
%
|
|
$
|
32,473
|
|
|
$
|
25,447
|
|
|
$
|
7,026
|
|
|
27.6
|
%
|
Operating margin
|
|
26.0
|
%
|
|
21.2
|
%
|
|
|
|
|
|
32.3
|
%
|
|
27.0
|
%
|
|
|
|
|
||||||||||
(a)
At the segment level, operating income does not include an allocation of general and administrative expenses.
|
•
|
Market conditions.
The Ag market dynamics have generally been consistent with Company expectations and the Company does not expect significant changes in the next twelve to eighteen months. However, the division continues to focus on driving growth regardless of market conditions through innovation and new product introductions as well as continuing to expand OEM relationships both domestically and internationally. The Company does not generally model comparative market share position for its divisions, but the Company believes Applied Technology has maintained or increased its market share in fiscal 2019.
|
•
|
Sales volume.
Third quarter fiscal 2019 net sales increased
$4.4 million
or
17.5%
, to
$29.7 million
compared to
$25.3 million
in the prior year. Year-to-date sales increased
6.7%
to
$100.5 million
compared to
$94.2 million
in the prior year. The year-over-year growth in sales for both the three- and nine-month periods was led by strong growth from new products and market share gains in several core product platforms.
|
•
|
International sales.
For the third quarter of fiscal 2019, international sales totaled
$6.0 million
, up
14.0%
from
$5.2 million
in the prior year comparative period. International sales represented
20.1%
of segment revenue compared to
20.7%
of segment revenue in the prior year comparative period. Year-to-date, international sales totaled
$23.7 million
, an increase of
$0.5 million
from a year ago. Year-to-date international sales represented
23.5%
of segment sales compared to
24.6%
in the prior year comparative period. The year-over-year international sales growth for both the three- and nine-month periods was led by strong growth from new products and market share gains in several core product platforms. By geographic region, the increase was led by Latin America and Europe.
|
•
|
Gross margin.
Gross margin increased to
49.2%
for the third quarter of fiscal 2019, up from
42.6%
in the prior year comparative period. For the nine-month period ended October 31, 2018 gross margin increased to
51.4%
from
44.1%
in the fiscal 2018 comparative period. The year-over-year increase in profitability for both the three- and nine-month periods was primarily driven by increased leverage on higher sales volume, value engineering and sourcing efforts which reduced materials costs, and a reduction of manufacturing related engineering support. Engineering support related expenses may be allocated to overhead, and thus cost of sales, or research and development expenses based on the focus of the engineering effort.
|
•
|
Operating expenses.
Fiscal 2019 third quarter operating expense as a percentage of net sales was
23.2%
, up from
21.5%
in the prior year comparative period. Year-to-date operating expense as a percentage of net sales were up from
16.8%
to
19.1%
. The increase for both the three- and nine-month periods were primarily driven by higher investment in research and development activities and the start-up related costs to establish the division's Latin American headquarters in Brazil. Although the increased geographic presence in Latin America results in higher operating expenses, the division expects the investment to provide future growth and return from the region. Division operating margin for the three- and nine-month periods increased
480
and
530
basis points, respectively. These increases were primarily driven by increased leverage on higher sales volume, value engineering and sourcing efforts which reduced materials costs and to a lesser extent, lower legal expenses.
|
•
|
Long-lived asset impairment loss
. As described in Note 7
Goodwill, Long-lived Assets, and Other Intangibles
of the Notes to the Consolidated Financial Statements included in Item 1 of this Form 10-Q, during the first quarter of fiscal 2018 the Company determined that the intangible asset related to the investment in AgEagle was fully impaired due to the decrease in expected future cash flows. No impairments were recognized in the three- or nine-month periods ended October 31, 2018 or the three-month period ended October 31, 2017.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||
(dollars in thousands)
|
|
October 31,
2018 |
|
October 31,
2017 |
|
$ Change
|
|
% Change
|
|
October 31,
2018 |
|
October 31,
2017 |
|
$ Change
|
|
% Change
|
||||||||||||||
Net sales
|
|
$
|
58,239
|
|
|
$
|
65,108
|
|
|
$
|
(6,869
|
)
|
|
(10.6
|
)%
|
|
$
|
177,106
|
|
|
$
|
157,691
|
|
|
$
|
19,415
|
|
|
12.3
|
%
|
Gross profit
|
|
11,361
|
|
|
19,358
|
|
|
(7,997
|
)
|
|
(41.3
|
)%
|
|
39,303
|
|
|
41,631
|
|
|
(2,328
|
)
|
|
(5.6
|
)%
|
||||||
Gross margin
|
|
19.5
|
%
|
|
29.7
|
%
|
|
|
|
|
|
22.2
|
%
|
|
26.4
|
%
|
|
|
|
|
||||||||||
Operating expenses
|
|
$
|
2,122
|
|
|
$
|
2,243
|
|
|
$
|
(121
|
)
|
|
(5.4
|
)%
|
|
$
|
6,062
|
|
|
$
|
6,245
|
|
|
$
|
(183
|
)
|
|
(2.9
|
)%
|
Operating expenses as % of sales
|
|
3.6
|
%
|
|
3.4
|
%
|
|
|
|
|
|
3.4
|
%
|
|
4.0
|
%
|
|
|
|
|
||||||||||
Operating income
(a)
|
|
$
|
9,239
|
|
|
$
|
17,115
|
|
|
$
|
(7,876
|
)
|
|
(46.0
|
)%
|
|
$
|
33,241
|
|
|
$
|
35,386
|
|
|
$
|
(2,145
|
)
|
|
(6.1
|
)%
|
Operating margin
|
|
15.9
|
%
|
|
26.3
|
%
|
|
|
|
|
|
18.8
|
%
|
|
22.4
|
%
|
|
|
|
|
||||||||||
(a)
At the segment level, operating income does not include an allocation of general and administrative expenses.
|
•
|
Market conditions.
The division continues to experience strong demand in the industrial market and Line 15, the division's new product line, will provide additional capacity to capture these opportunities starting in the fourth quarter of this fiscal year. The U.S. energy market remains strong but the significant market rebound has leveled off and growth in rig counts has correspondingly slowed. Specifically, the year-over-year growth in U.S. land-based rig counts was approximately 18 percent while the sequential quarter-over-quarter growth in U.S. land-based rig counts was approximately 2 percent. Additionally, oil prices have decreased recently to the $50 dollar-level, which if sustained may keep growth in the energy market more subdued. In the third quarter of fiscal 2018 hurricane recovery film sales were $8.4 million. Demand for hurricane recovery film is event driven and the prior year had abnormally high event-driven demand due to several significant hurricanes. Sales of hurricane recovery film in the third quarter of this year were $1.5 million, down $6.9 million year-over-year. In the fourth quarter of this fiscal year, the division expects to realize another substantial decline in hurricane recovery film sales as compared to the prior year. In the fourth quarter of last year, the division realized $15.8 million in sales of hurricane recovery film. The Company does not generally model comparative market share position for its divisions, but the Company believes Engineered Films has maintained or increased market share in its core business.
|
•
|
Sales volume and selling prices
. Third quarter net sales were
$58.2 million
, a decrease of
$6.9 million
, or
10.6%
, compared to fiscal 2018 third quarter net sales of
$65.1 million
. Volume, measured in pounds sold, decreased approximately 15
|
•
|
Gross margin.
For the three- and nine-month periods ended October 31, 2018, gross margin was
19.5%
and
22.2%
, respectively. The gross margin for the three- and nine-month periods ended October 31, 2017 was
29.7%
and
26.4%
, respectively. The year-over-year decrease in gross margin for three-month period was primarily driven by the impact of lower hurricane recovery film sales and the negative operating leverage associated with lower sales volume. The division also experienced cost overruns on a large geomembrane installation project and remaining estimated costs to complete have been revised. These adjustments lowered profits by nearly $2 million in the third quarter of fiscal 2019. This installation project will be completed in the fourth quarter of this year and the Company expects this project to be break-even. The year-over-year decrease in gross margin for the nine-month period was driven by lower plant utilization. The previously mentioned installation project cost overruns also impacted the nine-month period.
|
•
|
Operating expenses.
Third quarter operating expenses were down
5.4%
compared to the prior year third quarter. As a percentage of net sales, operating expenses were
3.6%
in the current year three-month period as compared to
3.4%
in the prior year comparative period. The decrease in sales for the three-month period caused the current year operating expenses to be higher as a percentage of sales. Year-to-date operating expenses were down
2.9%
compared to the prior year comparative period. As a percentage of net sales, operating expenses were
3.4%
in the current nine-month period as compared to
4.0%
in the prior year comparative period. Consistent expense discipline led to the year-over-year decline in operating expenses for both the three- and nine-month periods ending October 31, 2018 and 2017.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||
(dollars in thousands)
|
|
October 31,
2018 |
|
October 31,
2017 |
|
$ Change
|
|
% Change
|
|
October 31,
2018 |
|
October 31,
2017 |
|
$ Change
|
|
% Change
|
||||||||||||||
Net sales
|
|
$
|
17,031
|
|
|
$
|
11,103
|
|
|
$
|
5,928
|
|
|
53.4
|
%
|
|
$
|
41,449
|
|
|
$
|
30,078
|
|
|
$
|
11,371
|
|
|
37.8
|
%
|
Gross profit
|
|
6,690
|
|
|
3,197
|
|
|
3,493
|
|
|
109.3
|
%
|
|
16,349
|
|
|
8,620
|
|
|
7,729
|
|
|
89.7
|
%
|
||||||
Gross margin
|
|
39.3
|
%
|
|
28.8
|
%
|
|
|
|
|
|
39.4
|
%
|
|
28.7
|
%
|
|
|
|
|
||||||||||
Operating expenses
|
|
$
|
2,851
|
|
|
$
|
1,838
|
|
|
$
|
1,013
|
|
|
55.1
|
%
|
|
$
|
5,870
|
|
|
$
|
4,455
|
|
|
$
|
1,415
|
|
|
31.8
|
%
|
Operating expenses as % of sales
|
|
16.7
|
%
|
|
16.6
|
%
|
|
|
|
|
|
14.2
|
%
|
|
14.8
|
%
|
|
|
|
|
||||||||||
Operating income
(a)
|
|
$
|
3,839
|
|
|
$
|
1,359
|
|
|
$
|
2,480
|
|
|
182.5
|
%
|
|
$
|
10,479
|
|
|
$
|
4,165
|
|
|
$
|
6,314
|
|
|
151.6
|
%
|
Operating margin
|
|
22.5
|
%
|
|
12.2
|
%
|
|
|
|
|
|
25.3
|
%
|
|
13.8
|
%
|
|
|
|
|
||||||||||
(a)
At the segment level, operating income does not include an allocation of general and administrative expenses.
|
•
|
Market conditions.
Aerostar’s business consists of proprietary products and services to the aerospace, defense, and commercial markets. It is particularly challenging to measure market share information across the product and service offerings and the Company does not generally model comparative market share position for any of its divisions. However, the Company believes that the sales growth in the three- and nine-month periods was driven by market share gains and overall growth in the markets served.
|
•
|
S
ales volume.
Net sales increased
53.4%
from
$11.1 million
for the three-month period ended October 31, 2017 to
$17.0 million
for the three-month period ended October 31, 2018. Year-to-date sales were
$41.4 million
, up
$11.4 million
year-over-year, or
37.8%
. The increase in net sales for both the three- and nine-month periods was primarily driven by improved stratospheric balloon sales and aerostat contract deliveries. Stratospheric balloon sales increased significantly as the
|
•
|
Gross margin.
For the three-month period, gross margin increased from
28.8%
to
39.3%
. Gross margin increased from
28.7%
to
39.4%
in the nine-month period. The increase in profitability for both the three- and nine-month periods was primarily due to increased leverage on higher sales volume and higher utilization of engineering support on service contracts.
|
•
|
Operating expenses.
Third quarter fiscal 2019 operating expense was
$2.9 million
, or
16.7%
of net sales, an increase from
16.6%
of net sales in the third quarter of fiscal 2018. The increase in operating expenses for the third quarter was primarily driven by higher internal research and development spending as compared to the prior year comparative period. Year-to-date operating expense as a percentage of net sales was
14.2%
, down from
14.8%
in the prior year. Expense discipline constrained costs while sales grew substantially.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(dollars in thousands)
|
|
October 31,
2018 |
|
October 31,
2017 |
|
October 31,
2018 |
|
October 31,
2017 |
||||||||
Administrative expenses
|
|
$
|
7,166
|
|
|
$
|
5,990
|
|
|
$
|
24,388
|
|
|
$
|
17,247
|
|
Administrative expenses as a % of sales
|
|
6.8
|
%
|
|
5.9
|
%
|
|
7.7
|
%
|
|
6.1
|
%
|
||||
Other income (expense), net
|
|
$
|
674
|
|
|
$
|
(34
|
)
|
|
$
|
6,214
|
|
|
$
|
(327
|
)
|
Effective tax rate
|
|
8.6
|
%
|
|
32.6
|
%
|
|
15.6
|
%
|
|
31.3
|
%
|
(dollars in thousands)
|
|
October 31,
2018 |
|
January 31,
2018 |
|
October 31,
2017 |
||||||
Cash and cash equivalents
|
|
$
|
68,693
|
|
|
$
|
40,535
|
|
|
$
|
36,873
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(dollars in thousands)
|
|
October 31, 2018
|
|
October 31, 2017
|
|
October 31, 2018
|
|
October 31, 2017
|
||||||||
Cash provided by operating activities
|
|
$
|
13,656
|
|
|
$
|
10,973
|
|
|
$
|
52,308
|
|
|
$
|
30,834
|
|
Cash used in investing activities
|
|
(3,311
|
)
|
|
(14,488
|
)
|
|
(4,799
|
)
|
|
(20,077
|
)
|
||||
Cash used in financing activities
|
|
(6,923
|
)
|
|
(14,701
|
)
|
|
(18,780
|
)
|
|
(24,704
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
|
(168
|
)
|
|
(108
|
)
|
|
(571
|
)
|
|
172
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
3,254
|
|
|
$
|
(18,324
|
)
|
|
$
|
28,158
|
|
|
$
|
(13,775
|
)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
Exhibit
Number
|
|
Description
|
|
|
|
|
Amended and Restated Deferred Stock Compensation Plan for Directors of Raven Industries, Inc., effective July 11, 2018 (incorporated herein by reference to Exhibit 10.1 of the Company's Form 8-K filed July 12, 2018).
|
|
|
|
|
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
101.INS
|
|
Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
RAVEN INDUSTRIES, INC.
|
|
||
|
|
|
||
|
/s/ Steven E. Brazones
|
|
||
|
Steven E. Brazones
|
|
||
|
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
1 Year Raven Industries Chart |
1 Month Raven Industries Chart |
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