ravn-20210430

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☑						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2021


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-07982

RAVEN INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

46-0246171

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

205 East 6th Street, P.O. Box 5107

Sioux Falls

57117-5107

(Address of principal executive offices)

(605) 336-2750

(Registrant’s telephone number including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $1 par value

RAVN

NASDAQ

Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þ Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes þ No

As of May 21, 2021, there were 35,917,637 shares of common stock, $1 par value, of Raven Industries, Inc. outstanding. There were no other classes of stock outstanding.

RAVEN INDUSTRIES, INC.

INDEX


			PAGE

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements:
Consolidated Balance Sheets (unaudited)			3
Consolidated Statements of Income and Comprehensive Income (unaudited)			4
Consolidated Statements of Shareholders' Equity (unaudited)			5
Consolidated Statements of Cash Flows (unaudited)			6
Notes to Consolidated Financial Statements (unaudited)			7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			17
Item 3. Quantitative and Qualitative Disclosures about Market Risks			25
Item 4. Controls and Procedures			25

PART II - OTHER INFORMATION

Item 1. Legal Proceedings			26
Item 1A. Risk Factors			26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			26
Item 3. Defaults Upon Senior Securities			26
Item 4. Mine Safety Disclosures			26
Item 5. Other Information			26
Item 6. Exhibits			27
Signatures			28

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RAVEN INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)


(dollars and shares in thousands, except per-share data)	April 30, 2021		January 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	17,764	$	32,938

Accounts receivable, net	68,064		48,669
Inventories, net	63,407		52,703
Other current assets	7,904		5,776
Total current assets	157,139		140,086

Property, plant and equipment, net	107,905		106,007
Goodwill	109,284		107,677
Intangible assets, net	46,074		44,585
Other assets	10,437		11,016
TOTAL ASSETS	$	430,839	$	409,371

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	22,535	$	18,639
Accrued liabilities	33,836		30,401
Other current liabilities	3,751		2,998
Total current liabilities	60,122		52,038

Long-term debt	2,895		1,981
Other liabilities	23,837		23,997
Total liabilities	86,854		78,016

Commitments and contingencies (see Note 11)

Shareholders' equity
Common stock, $1 par value, authorized shares 100,000; issued 67,583 and 67,533, respectively	67,583		67,533
Additional paid-in capital	67,266		66,670
Retained earnings	321,296		311,676
Accumulated other comprehensive loss	(977)		(3,341)
Treasury stock at cost, 31,665 and 31,665 shares, respectively	(111,183)		(111,183)
Total shareholders' equity	343,985		331,355


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	430,839	$	409,371

The accompanying notes are an integral part of the unaudited consolidated financial statements.

RAVEN INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(unaudited)


	Three Months Ended
(dollars in thousands, except per-share data)		April 30, 2021		April 30, 2020
Net sales		$	112,486	$	86,496
Cost of sales		72,500		58,029
Gross profit		39,986		28,467

Research and development expenses		11,462		10,505
Selling, general, and administrative expenses		16,951		14,023


Operating income		11,573		3,939

Other income (expense), net		30		(468)
Income before income taxes		11,603		3,471

Income tax expense (benefit)		1,983		(478)
Net income		9,620		3,949

Net loss attributable to redeemable noncontrolling interest		—		(98)

Net income attributable to Raven Industries, Inc.		$	9,620	$	4,047

Net income per common share:
─ Basic		$	0.27	$	0.11
─ Diluted		$	0.26	$	0.11



Comprehensive income:
Net income		$	9,620	$	3,949

Other comprehensive income (loss):
Foreign currency translation		2,344		(2,579)
Postretirement benefits, net of income tax (expense) benefit of $(5) and $1, respectively		20		(3)
Other comprehensive income (loss), net of tax		2,364		(2,582)

Comprehensive income		11,984		1,367

Comprehensive loss attributable to redeemable noncontrolling interest		—		(98)

Comprehensive income attributable to Raven Industries, Inc.		$	11,984	$	1,465

The accompanying notes are an integral part of the unaudited consolidated financial statements.

RAVEN INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(unaudited)


	Three Months Ended April 30, 2020
	$1 Par Common Stock		Additional Paid-in Capital		Treasury Stock at Cost		Retained Earnings		Accumulated Other Comprehen-sive Income (Loss)		Total Equity		Redeem-able Non-Controlling Interest
(dollars in thousands, except per-share amounts)
Balance January 31, 2020	$	67,436	$	61,508	$	(111,183)	$	302,300	$	(5,415)	$	314,646	$	21,302
Net income (loss)	—		—		—		4,047		—		4,047		(98)
Other comprehensive income (loss):
Cumulative foreign currency translation adjustment	—		—		—		—		(2,579)		(2,579)		—
Postretirement benefits reclassified from accumulated other comprehensive income (loss) after tax benefit of $1	—		—		—		—		(3)		(3)		—
Reclassification and redemption of noncontrolling interest (see Note 1)	—		215		—		—		—		215		(21,204)
Cash dividends ($0.13 per share)	—		90		—		(4,748)		—		(4,658)		—
Shares issued on stock options exercised, net of shares withheld for employee taxes	11		(124)		—		—		—		(113)		—
Shares issued on vesting of stock units, net of shares withheld for employee taxes	53		(680)		—		—		—		(627)		—
Share-based compensation	—		1,496		—		—		—		1,496		—
Balance April 30, 2020	$	67,500	$	62,505	$	(111,183)	$	301,599	$	(7,997)	$	312,424	$	—

	Three Months Ended April 30, 2021
	$1 Par Common Stock		Additional Paid-in Capital		Treasury Stock at Cost		Retained Earnings		Accumulated Other Comprehen-sive Income (Loss)		Total Equity		Redeem-able Non-Controlling Interest
(dollars in thousands, except per-share amounts)
Balance January 31, 2021	$	67,533	$	66,670	$	(111,183)	$	311,676	$	(3,341)	$	331,355	$	—
Net income	—		—		—		9,620		—		9,620		—
Other comprehensive income (loss):
Cumulative foreign currency translation adjustment	—		—		—		—		2,344		2,344		—
Postretirement benefits reclassified from accumulated other comprehensive income (loss) after tax expense of $(5)	—		—		—		—		20		20		—
Shares issued on stock options exercised, net of shares withheld for employee taxes	1		(42)		—		—		—		(41)		—
Shares issued on vesting of stock units, net of shares withheld for employee taxes	49		(1,096)		—		—		—		(1,047)		—

Share-based compensation	—		1,734		—		—		—		1,734		—
Balance April 30, 2021	$	67,583	$	67,266	$	(111,183)	$	321,296	$	(977)	$	343,985	$	—

The accompanying notes are an integral part of the unaudited consolidated financial statements.

RAVEN INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

Three Months Ended

(dollars in thousands)

April 30,
2021

April 30,
2020

OPERATING ACTIVITIES:

Net income

9,620

3,949

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

SEC Form 10-Q filed by Raven Industries, Inc.