Raven Industries Reports Fourth Quarter Fiscal 2021 Results
Raven Industries (NASDAQ:RAVN) reported Q4 fiscal 2021 net sales of $80.1 million, down 6.6% year-over-year. Applied Technology saw a 6% sales increase to $34.9 million, fueled by OEM demand. However, Engineered Films and Aerostar faced declines of 13% and 20%, respectively, due to pandemic impacts. Net income dropped to $0.3 million, or $0.01 per share, as strategic investments in Raven Autonomy™ reduced earnings. The company ended the quarter with $32.9 million in cash. Fiscal 2022 outlook remains optimistic due to anticipated growth in Applied Technology and improving market conditions.
- Applied Technology net sales increased 6% year-over-year to $34.9 million.
- Company invested $16.8 million in Raven Autonomy™ for future growth.
- Strong cash flow from operations of $55 million and total liquidity of $132.9 million.
- Positive outlook for fiscal 2022 driven by improving agriculture market and anticipated new product launches.
- Consolidated net sales for fiscal 2021 fell 8.9% compared to fiscal 2020.
- Net income for Q4 decreased significantly from $3.3 million to $0.3 million.
- Engineered Films and Aerostar revenues declined significantly due to pandemic challenges.
Raven Industries, Inc. (the Company; NASDAQ:RAVN) today reported financial results for the fourth quarter that ended January 31, 2021.
Fourth Quarter Fiscal 2021 Noteworthy Items:
- Net sales in Applied Technology increased 6 percent versus the prior year on a reported basis;
-
Company invested
$4.4 million , or$0.09 per share after-tax, primarily in research and development activities, to advance Raven Autonomy™; - Both Applied Technology and Engineered Films generated strong customer order activity as the divisions' industry-leading technology and improving market conditions have led to rising demand;
- Aerostar continued its development and demonstration of the mission performance of its Thunderhead Balloon Systems while achieving a flight duration record of 94 days;
- Net sales in Aerostar declined 20 percent versus the prior year driven by timing of government contracts creating fluctuations in the quarterly results for the division;
- Engineered Films' net sales declined 13 percent versus the prior year as the division's end-markets continued to face economic challenges resulting from the global pandemic;
- Applied Technology began accepting pre-orders for its first commercially-available Driverless Ag Technology, AutoCart®, and established a new Raven Canada headquarters, further advancing Raven Autonomy™;
- Alphabet announced that Loon would be wound down as a company, completing a successful multi-year project in which Aerostar substantially advanced the technology, flight durations and capabilities of stratospheric balloon systems.
Fiscal 2021 Noteworthy Items:
- In response to the pandemic, the Company focused on team member safety and four priorities: uphold the Raven Way, emphasize cash flow, protect the core business and aggressively invest in Raven Autonomy™;
- Net sales in Applied Technology increased 13 percent versus the prior year, driven by growth in the OEM channel, through leveraging its industry-leading technology portfolio;
-
Company invested
$16.8 million , or$0.36 per share after-tax, in research and development and selling activities to advance Raven Autonomy™ for future growth; - Applied Technology released enhancements for its VSN® Visual Guidance System which continued to advance the technology further along the autonomous ag technology continuum;
-
Company generated
$55 million of net cash flow from operating activities, led by the improvement in working capital; - Engineered Films' end-markets faced significant economic challenges resulting from the global pandemic, leading to a 25 percent decline in revenue compared to the prior year;
-
Engineered Films completed the delivery of a
$4.8 million contract award from the Federal Emergency Management Agency (FEMA) to supply film-based medical supplies to aid in the pandemic response; - Aerostar released HiPointer 100, a coherent radar system that increases persistent surveillance capabilities and enhances total situational awareness from a diverse set of manned and unmanned platforms;
- Company acquired full voting control of DOT Technology Corp. (DOT®), enabling an acceleration in the development of the Dot® platform;
- Company reallocated capital to boldly invest in its strategic platforms for growth, indefinitely suspending its quarterly cash dividend;
- Company announced executive leadership changes to accelerate execution of its growth strategy and to further position itself for long-term success.
Fourth Quarter Results:
Consolidated net sales for the fourth quarter of fiscal 2021 were
Net income for the fourth quarter of fiscal 2021 was
Balance Sheet and Cash Flow:
At the end of the fourth quarter of fiscal 2021, cash and cash equivalents totaled
Applied Technology Division:
Net sales for Applied Technology in the fourth quarter of fiscal 2021 were
Division operating income in the fourth quarter of fiscal 2021 was
Engineered Films Division:
Net sales for Engineered Films in the fourth quarter of fiscal 2021 were
Division operating income in the fourth quarter of fiscal 2021 was
Aerostar Division:
Net sales for Aerostar in the fourth quarter of fiscal 2021 were
The division generated an operating loss of
Update on Strategic Platforms for Growth:
In the fourth quarter, the Company hit key milestones for Raven Autonomy™ by launching pre-orders for AutoCart®, and establishing a new Raven Canada headquarters. AutoCart® is the first commercially available Driverless Ag Technology and represents the initial use case for the Company's versatile autonomous technology stack. This technology showcases the Company's leadership position in the industry and will be available to the market for use in the calendar 2021 harvest season. For the Dot® Power Platform, the Company conducted extensive field validation and testing activities, meeting critical milestones for performance, covered acres and run-time. Key findings and progress related to the powertrain and spraying and spreading applications support the Company's planned commercial release of Dot®, for select applications, in fiscal year 2022.
The milestones achieved in fiscal year 2021 for Raven Autonomy™ are significant steps as the Company further evolves its technology along the autonomous agriculture continuum and sets the foundation for commercialization of both AutoCart® and Dot® in fiscal 2022. In conjunction with the commercialization of these products, the Company intends to complete a rebrand of its Raven Autonomy™ product lines. Looking forward, the Company is focused on executing its strategy of providing incremental solutions leveraging its technology stack while also pursuing intermediate and long-term opportunities through autonomous ag platforms and technology. These advances will improve the future of ag equipment to address market demands of greater efficiency, climate changes and capital requirements.
In Raven Composites™, Engineered Films continues to advance its technology and capabilities as it pushes toward delivering solutions that combine industry-leading, high-value films on rigid composites. In the fourth quarter, the Company continued to expand its composites operations and completed the installation of its research and development equipment in Waynesboro, Virginia. Additionally, the Company is actively pursuing acquisition opportunities to supplement its Raven Composites™ platform for growth.
Aerostar continues to boldly invest in developing the capabilities to advance the technology of its Thunderhead Balloon Systems. In the fourth quarter, Thunderhead set another record by achieving 94 days in flight for a single balloon, with much of the flight navigating autonomously. The opportunities within the Department of Defense and other government agencies are substantial, and as the undisputed technology leader, Aerostar is well-positioned to capitalize on the opportunities that lie ahead.
Supplemental Raven Autonomy™ Financial Information:
The financial impact of Raven Autonomy™ for fiscal years 2021 and 2020 was as follows:
Financial Impact of Raven Autonomy™ |
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Increase (Decrease) |
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(dollars in millions, except per
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Three Months Ended
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Twelve Months Ended
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Three Months Ended
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Net sales |
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$ |
— |
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$ |
0.9 |
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$ |
— |
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Gross profit |
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(0.2 |
) |
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(0.4 |
) |
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— |
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Applied Technology Operating income |
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(4.4 |
) |
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(16.6 |
) |
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(2.8 |
) |
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Consolidated Operating income |
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(4.4 |
) |
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(16.8 |
) |
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(3.2 |
) |
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Consolidated EBITDA3 |
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(3.9 |
) |
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(15.6 |
) |
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(2.6 |
) |
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Net income attributable to Raven Industries, Inc. |
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(3.4 |
) |
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(12.9 |
) |
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(2.3 |
) |
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Net income per common share - Diluted |
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$ |
(0.09 |
) |
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$ |
(0.36 |
) |
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$ |
(0.06 |
) |
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Fiscal 2021 Results:
Consolidated net sales for fiscal 2021 were
Consolidated operating income for fiscal 2021 was
Net income attributable to Raven for fiscal 2021 was
In fiscal 2021, net income attributable to Raven included the following significant items:
-
The investment in Raven Autonomy™ of
$16.8 million ($12.9 million after-tax, or$0.36 per diluted share); -
Project Atlas (ERP investment) related expenses of
$2.1 million ($1.7 million after-tax, or$0.05 per diluted share).
In fiscal 2020, net income attributable to Raven included the following significant items:
-
The investment in Raven Autonomy™ of
$3.2 million ($2.3 million after-tax, or$0.06 per diluted share); -
Project Atlas related expenses of
$2.7 million ($2.1 million after-tax, or$0.06 per diluted share); -
Gain on the sale of an Applied Technology facility in Austin, Texas of
$1.9 million ($1.5 million after-tax, or$0.04 per diluted share).
Fiscal 2022 Outlook:
"In fiscal 2021, we made key advances across our company and through our strategic platforms for growth," said Dan Rykhus, President and CEO. "In response to the pandemic, we identified four priorities for the year that included upholding the Raven Way, emphasizing cash flow from operations, protecting the core business and aggressively investing in Raven Autonomy™. Looking back on the year, I am proud of our team's ability to achieve these goals while managing our business through adverse economic conditions, supply chain constraints and changing our production processes to ensure the health and well-being of our team members. As we enter a new year, I have confidence that the lessons we have learned from these challenges will help our team drive growth in fiscal 2022 and beyond.
"In fiscal 2022, Applied Technology is expected to drive growth in revenue as the division leverages its industry-leading product portfolio and customer relationships. Order activity strengthened in the fourth quarter of fiscal 2021 and is building momentum through the first quarter of fiscal 2022. In addition, we are seeing strength in the agriculture industry as increasing commodity prices have created optimism in the ag market for the first time in nearly a decade. In Raven Autonomy™, we expect to deliver AutoCart® systems in advance of the fall harvest and commercialize the Dot® Power Platform. We will continue to aggressively invest in Raven Autonomy™ as we build the foundation for a step-change in long-term growth.
"In Engineered Films, we have experienced improving conditions over the past few months. Overall, we expect to achieve market share gains and for end-market conditions to continue to improve as the year progresses, driving meaningful year-over-year revenue growth. In fiscal 2022, we are also focused on completing an acquisition to supplement the strategy within Engineered Films of delivering high-value films and composites.
"In Aerostar, I am very proud of all we have achieved over the last eight years as Alphabet's design partner for Loon. The relationship helped deliver connectivity to rural areas of the world, but it also advanced Raven's stratospheric platform technological capabilities. Looking forward, we remain focused on bringing our stratospheric balloon platform to U.S. government agencies, providing a proprietary solution for a variety of applications. We have achieved key milestones in recent months, and momentum surrounding our technology continues to grow. In fiscal 2022, the division expects to continue to develop the capabilities of its stratospheric and radar technology while executing on government contracts.
"Fiscal 2022 will be an exciting year for our company as we build out each of our strategic platforms for growth while leveraging the strength of our underlying businesses. Substantial order activity and improving market fundamentals provide confidence in our ability to drive strong year-over-year growth in Applied Technology and Engineered Films. As we execute on these opportunities, we will remain focused on aggressively investing to advance Raven Autonomy™, Raven Composites™ and Raven Thunderhead while making significant progress on our multi-year plan to drive a step-change in our long-term growth," concluded Rykhus.
Regulation G:
The information presented in this earnings release regarding consolidated and segment earnings before interest, taxes, depreciation, and amortization (EBITDA), do not conform to generally accepted accounting principles (GAAP) and should not be construed as an alternative to the reported results determined in accordance with GAAP. Additionally, management has included this non-GAAP information to assist in understanding the operating performance of the Company and its operating segments as well as the comparability of results. The non-GAAP information provided may not be consistent with the methodologies used by other companies. All non-GAAP information is reconciled with reported GAAP results in the tables below.
About Raven Industries, Inc.:
Raven Industries (NASDAQ: RAVN) provides innovative, high-value products and systems that solve great challenges throughout the world. Raven is a leader in precision agriculture, high-performance specialty films, and aerospace and defense solutions, and the company's groundbreaking work in autonomous systems is unlocking new possibilities in areas like farming, national defense, and scientific research. Since 1956, Rav
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