Earnings Highlights and Review: Raven Industries’ Quarterly Sales Surged 36.8%; EPS More than Doubled

Research Desk Line-up: China Yuchai Intl. Post Earnings Coverage

LONDON, UK / ACCESSWIRE / June 9, 2017 / Pro-Trader Daily publishes post-earnings coverage on Raven Industries, Inc. (NASDAQ: RAVN) following the Company’s posting of its first quarter fiscal 2018 financial results on May 22, 2017. The industrial products maker outperformed earnings expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at: http://protraderdaily.com/register/.

Get more of our free earnings reports coverage from other constituents of the Diversified Machinery industry. Pro-TD has currently selected China Yuchai International Limited (NYSE: CYD) for due-diligence and potential coverage as the Company announced on May 09, 2017, its unaudited consolidated financial results for Q1 2017 which ended on March 31, 2017. Register for a free membership today, and be among the early birds that get access to our report on China Yuchai International when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on RAVN; also brushing on CYD. With the links below you can directly download the report of your stock of interest free of charge at:

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Earnings Reviewed

For the three months ended April 30, 2017, Raven Industries’ net sales surged 36.8% to $93.5 million compared to $68.36 million in the year ago same period, with all of Company’s divisions achieving greater than 20% growth on a y-o-y basis.

For Q1 FY18, Raven Industries’ operating income was $18.2 million versus operating income of $8.1 million in Q1 FY17, increasing more than $10 million on a y-o-y basis. The Company’s operating margin increased 770 basis points y-o-y, from 11.8% of net sales to 19.5% of net sales. The significant improvement in profitability was driven by strong operating leverage on higher sales volume.

Raven Industries’ net income for Q1 FY18 was $12.3 million, or $0.34 per diluted share, compared to net income of $5.5 million, or $0.15 per diluted share, in Q1 FY18. The Company’s earnings figure smashed past Wall Street’s expectations of $0.24 per share.

Segment Results

During Q1 FY18, net sales for Raven industries’ Applied Technology division surged 28.7% to $40.5 million with sales growth for the division driven by new product sales, expanded OEM relationships, and higher sales of direct injection systems.

The segment’s operating income was $13.5 million for the reported quarter, up 54.8% on a y-o-y basis, driven primarily by higher sales volume and improved operating leverage. The division posted strong incremental margins on improved sales volume as operating margin grew from 27.6% in Q1 FY17 to 33.2% in Q1 FY18.

Raven Industries’ Engineered Films Division net sales were $43.6 million in Q1 FY18, up 49.7% y-o-y. The segment’s volume, measured in pounds sold, surged 46.2% versus the prior year. The increase in sales was driven by markedly higher sales into the Geomembrane market, with the Industrial and Construction markets also significantly contributing to growth versus the prior year.

For Q1 FY18, the segment’s operating income was $8.7 million, up $4.8 million, or 125%, on a y-o-y basis, driven principally by higher sales volume and strong operating leverage. The division’s operating margin advanced 670 basis points on a y-o-y basis from 13.3% to 20.0%, driven by improved capacity utilization and continued spending discipline.

During Q1 FY18, net sales for Raven Industries’ Aerostar division totaled $9.6 million, up $1.7 million, or 21.7%, on a y-o-y basis, driven by the commencement of a newly-awarded stratospheric balloon contract, increased sales to Google for Project Loon, and timing of research balloon deliveries. The segment’s operating income in the reported quarter was $1.4 million, versus an operating loss of $0.2 million in the year ago comparable period. The improved financial performance was attributed to cost reductions implemented over the prior year as well as higher sales to stratospheric balloon programs.

Balance Sheet and Cash Flow View

As of April 30, 2017, Raven Industries’ cash and cash equivalents totaled $50.5 million, essentially flat versus the prior quarter. The Company’s net working capital as a percentage of annualized net sales improved 530 basis points y-o-y from 28.7% in Q1 FY17 to 23.4% in the reported period, attributable to higher payables, as well as managing inventory and receivables efficiently with the substantial increase in sales versus the prior year.

Raven Industries’ cash flow from operations was $7.7 million in Q1 FY18 versus $11.1 million in the previous year’s first quarter. The Company’s Capital expenditures were $2.8 million in the reported quarter, up $2.0 million versus $0.8 million in the prior year’s corresponding quarter. For fiscal year 2018, Raven Industries is forecasting total capital expenditures to be approximately in the range of $10 million to $12 million.

Outlook

While the Company does not provide financial metrics forecast for the upcoming period, Dan Rykhus, President and CEO said in the press release:

“We are off to a strong start to the year. While we expect year-over-year comparisons to get progressively more challenging through the end of the year, we believe we are on track to deliver meaningful growth in revenues and operating profit in fiscal year 2018”.

Stock Performance

At the closing bell, on Thursday, June 08, 2017, Raven Industries’ stock climbed 3.22%, ending the trading session at $36.85. A total volume of 122.88 thousand shares have exchanged hands. The Company’s stock price skyrocketed 26.85% in the last three months, 47.11% in the past six months, and 81.89% in the previous twelve months. Moreover, the stock soared 46.23% since the start of the year. The stock is trading at a PE ratio of 49.66 and has a dividend yield of 1.41%. The stock currently has a market cap of $1.33 billion.

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