Raven reports strong third quarter

Sioux Falls-based Raven Industries has set sales and earnings records for the most recent 12-month period, including a strong third quarter.

Net income in the quarter that ended Oct. 31, 2018, was $13 million, or 36 cents per share, compared with $12 million, or 33 cents per share for the same time last year.

Net sales increased 3 percent year-over-year, and 11 percent when abnormally high hurricane recovery film sales were factored out.

“Overall, the company’s third quarter performance was strong,” said Dan Rykhus, president and CEO. “Aerostar and Applied Technology drove substantial growth in sales and profitability. These gains were partially offset by a temporary step back in performance for Engineered Films.”

The applied technology division reported 18 percent year-over-year sales growth driven by new products and market share gains, which Rykhus credited to innovation and service.

“Superior technology offerings and platform expansion have positioned Applied Technology well and resulted in market share gains,” he said. “The division remains focused on its key growth initiatives, including its organic growth investment in Brazil and continued new product development. At the same time, the division continues to evaluate a number of potential acquisition targets to supplement its organic growth strategy. The division is consistently improving and driving results towards our long-term expectations.”

Aerostar sales increased more than 50 percent and the division was awarded a new five-year $36 million radar systems contract during the third quarter, positioning this strategic product line for strong future growth.

“Aerostar had another outstanding quarter with strong growth in stratospheric balloon sales,” Rykhus said. “The new $36 million radar contract award also demonstrates why radar systems remain a strategic core product line for the division. The division’s financial performance and contract wins over the past year are a direct result of the focus that the division has achieved.”

The engineered films division profit margin declined from 26 percent to 16 percent year-over-year as a result of significantly lower hurricane recovery film sales and cost overruns on a large installation project.

“Engineered Films continues to invest for the future. The division is nearing the completion of Line 15 to expand capacity to capitalize on new opportunities within the industrial and geomembrane markets and is diligently preparing for its Project Atlas go-live to provide for more advanced planning and operations management,” Rykhus said.

“The absence of significant hurricane recovery film sales was expected, and it adversely impacted the year-over-year comparisons for this quarter. The division’s third quarter installation project cost overruns were disappointing; however, the underlying fundamentals for the division remain strong, we are optimistic for the future, and the division’s long-term division profit margin expectation remains 18 to 20 percent.”

In its earnings report, Raven said it’s monitoring the global trade environment and tariff developments from both a supplier and customer perspective but believes the dynamics are manageable and such developments will not have a material impact to financial performance.

“We have made tremendous progress in a number of strategic areas, while continuing to invest for long-term growth. Our business model and strategic plans are strong and give us confidence in our future,” Rykhus said.

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Raven reports strong third quarter

Sioux Falls-based Raven Industries has set sales and earnings records for the most recent 12-month period, including a strong third quarter.

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