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UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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FORM 10-K
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þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended January 31, 2019
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o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Commission File Number: 001-07982
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RAVEN INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
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þ
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Yes
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o
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No
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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
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o
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Yes
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þ
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No
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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.
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þ
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Yes
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o
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No
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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).
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þ
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Yes
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o
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No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
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þ
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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
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o
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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o
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Yes
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þ
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No
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The aggregate market value of the registrant's common stock held by non-affiliates at July 31, 2018 was approximately $1,379,477,313. The aggregate market value was computed by reference to the closing price as reported on the NASDAQ Global Select Market, $38.80, on July 31, 2018, which was as of the last business day of the registrant's most recently completed second fiscal quarter. The number of shares outstanding on March 19, 2019 was 36,960,588.
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DOCUMENTS INCORPORATED BY REFERENCE
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The definitive proxy statement relating to the registrant's Annual Meeting of Shareholders, to be held May 21, 2019 is incorporated by reference into Part III to the extent described therein.
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ITEM 1A.
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RISK FACTORS
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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PART II
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|
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ITEM 5.
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MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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Years Ended January 31,
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5-Year
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|||||||||||||||||||||||
Company / Index
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2014
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2015
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2016
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2017
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2018
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2019
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CAGR(a)
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Raven Industries, Inc.
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$
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100.00
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$
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58.31
|
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$
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42.01
|
|
|
$
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71.96
|
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$
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112.51
|
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$
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109.41
|
|
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1.8
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%
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Russell 2000 Index
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100.00
|
|
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104.41
|
|
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94.05
|
|
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125.58
|
|
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147.16
|
|
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141.97
|
|
|
7.3
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%
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||||||
S&P Small Cap 600 Index
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100.00
|
|
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106.15
|
|
|
101.18
|
|
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135.92
|
|
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158.43
|
|
|
156.46
|
|
|
9.4
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%
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||||||
(a) Compound annual growth rate (CAGR)
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|
|
|
|
|
|
|
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ITEM 6.
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SELECTED FINANCIAL DATA
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FIVE-YEAR FINANCIAL SUMMARY
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For the years ended January 31,
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(In thousands, except employee counts and per-share amounts)
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2019
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2018
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2017
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2016
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2015
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OPERATIONS
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Net sales(a)
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$
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406,668
|
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$
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377,317
|
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$
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277,395
|
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$
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258,229
|
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$
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378,153
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Gross profit(b)
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132,549
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121,565
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78,190
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66,974
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103,246
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|||||
Operating income(b)(c)
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55,133
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59,170
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28,413
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4,391
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43,801
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|||||
Income before income taxes(b)(d)
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61,570
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58,986
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27,853
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4,081
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|
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43,501
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|||||
Net income attributable to Raven Industries, Inc.(e)
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|
51,794
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41,022
|
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20,191
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4,776
|
|
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31,733
|
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|||||
Net income % of sales
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|
12.7
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%
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|
10.9
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%
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7.3
|
%
|
|
1.8
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%
|
|
8.4
|
%
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|||||
Net income % of average equity(f)
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|
17.7
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%
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15.3
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%
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|
7.7
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%
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1.7
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%
|
|
11.4
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%
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|||||
FINANCIAL POSITION
|
|
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||||||||||
Cash and cash equivalents
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$
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65,787
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|
$
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40,535
|
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$
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50,648
|
|
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$
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33,782
|
|
|
$
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51,949
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|
Property, plant and equipment
|
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106,615
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106,280
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|
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106,324
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115,704
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|
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117,513
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|||||
Total assets
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360,245
|
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326,803
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301,509
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298,688
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362,873
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|||||
Total debt (including capital lease obligations)
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284
|
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448
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—
|
|
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—
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|
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—
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|||||
Raven Industries, Inc. shareholders' equity
|
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308,955
|
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276,064
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259,426
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264,155
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305,153
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|||||
Net working capital(g)
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100,276
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100,777
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77,012
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77,870
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|
100,183
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|||||
Net working capital percentage(h)
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28.5
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%
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|
26.3
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%
|
|
27.9
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%
|
|
36.9
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%
|
|
27.9
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%
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|||||
Long-term debt / total capitalization
|
|
0.1
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%
|
|
0.2
|
%
|
|
—
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%
|
|
—
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%
|
|
—
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%
|
|||||
CASH FLOWS PROVIDED BY (USED IN)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
|
$
|
65,952
|
|
|
$
|
44,961
|
|
|
$
|
48,636
|
|
|
$
|
44,008
|
|
|
$
|
60,083
|
|
Investing activities
|
|
(16,444
|
)
|
|
(25,675
|
)
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|
(4,642
|
)
|
|
(11,074
|
)
|
|
(29,986
|
)
|
|||||
Financing activities
|
|
(23,755
|
)
|
|
(29,721
|
)
|
|
(27,151
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)
|
|
(50,684
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)
|
|
(30,665
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)
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|||||
Change in cash and cash equivalents
|
|
25,252
|
|
|
(10,113
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)
|
|
16,866
|
|
|
(18,167
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)
|
|
(1,038
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)
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|||||
COMMON STOCK DATA
|
|
|
|
|
|
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|
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||||||||||
EPS — basic
|
|
$
|
1.44
|
|
|
$
|
1.14
|
|
|
$
|
0.56
|
|
|
$
|
0.13
|
|
|
$
|
0.86
|
|
EPS — diluted
|
|
1.42
|
|
|
1.13
|
|
|
0.56
|
|
|
0.13
|
|
|
0.86
|
|
|||||
Cash dividends per share
|
|
0.52
|
|
|
0.52
|
|
|
0.52
|
|
|
0.52
|
|
|
0.50
|
|
|||||
Stock price range during the year
|
|
|
|
|
|
|
|
|
|
|
||||||||||
High
|
|
$
|
49.80
|
|
|
$
|
40.85
|
|
|
$
|
26.90
|
|
|
$
|
22.85
|
|
|
$
|
40.06
|
|
Low
|
|
31.45
|
|
|
23.75
|
|
|
12.88
|
|
|
13.87
|
|
|
20.75
|
|
|||||
Close
|
|
36.99
|
|
|
38.55
|
|
|
25.05
|
|
|
15.01
|
|
|
21.44
|
|
|||||
OTHER DATA
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Price / earnings ratio(i)
|
|
26.0
|
|
|
34.1
|
|
|
44.7
|
|
|
115.5
|
|
|
24.9
|
|
|||||
Average number of employees
|
|
1,219
|
|
|
1,054
|
|
|
907
|
|
|
936
|
|
|
1,251
|
|
|||||
Sales per employee
|
|
$
|
334
|
|
|
$
|
358
|
|
|
$
|
306
|
|
|
$
|
276
|
|
|
$
|
302
|
|
(a) The Company acquired Colorado Lining International, Inc. in September of fiscal year 2018. Refer to Note 6 "Acquisitions and Investments in Businesses and Technologies" of the Notes to the Consolidated Financial Statements for further details. Fiscal year 2019 and 2018 included $14,494 and $24,225, respectively of recovery film sales related to the hurricane recovery effort. In addition, the Company divested its client private business in the first quarter of fiscal 2019. Net sales related to this business in fiscal 2019 and 2018 were $283 and $5,592, respectively.
|
||||||||||
(b) Fiscal 2017 included inventory write-downs of $2,278 for Aerostar as a result of discontinuing sales activities for a specific radar product line within its business, as further described in Note 7 "Goodwill, Long-Lived Assets, and Other Charges" of the Notes to the Consolidated Financial Statements. Fiscal 2016, included pre-contract cost write-offs of $2,933, a goodwill impairment loss of $11,497, and a long-lived asset impairment loss of $3,826, partially offset by a reduction of $2,273 of an acquisition-related contingent liability for Aerostar.
|
||||||||||
(c) Fiscal 2019 operating income included a $4,503 expense related to the previously announced gift to South Dakota State University further described in Note 12 "Commitments and Contingencies" of the Notes to the Consolidated Financial Statements. Fiscal 2019 operating income included $4,033 of expenses related to Project Atlas. Project Atlas related expenses were approximately $900 in fiscal 2018.
|
||||||||||
(d) Fiscal 2019 included a gain of $5,785 from the divestiture of the Company's ownership interest in SST, further described in Note 1 "Summary of Significant Accounting Policies".
|
||||||||||
(e) The Tax Cuts and Jobs Act had a favorable impact to the Company. Refer to Note 10 "Income Taxes" of the Notes to the Consolidated Financial Statements for further details.
|
||||||||||
(f) Net income attributable to Raven Industries, Inc. divided by average equity. Average equity is the sum of Raven Industries, Inc. shareholders' equity for the beginning and ending of the fiscal year divided by two.
|
||||||||||
(g) Net working capital is defined as accounts receivable, (net) plus inventories less accounts payable.
|
||||||||||
(h) Net working capital percentage is defined as net working capital divided by fourth quarter net sales times four for each of the fiscal years, respectively.
|
||||||||||
(i) Closing stock price on last business day of fiscal year divided by EPS — diluted.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Executive Summary
|
•
|
Results of Operations - Segment Analysis
|
•
|
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.
|
•
|
Return on sales, average assets and average equity.
|
•
|
Segment net sales, gross profit, gross margin, operating margin and operating income. At the segment level, operating income does not include an allocation of general and administrative expenses.
|
•
|
Intentionally serve diverse market segments with strong short- and long-term growth prospects.
|
•
|
Diversified portfolio of businesses provide balance, opportunity and risk mitigation.
|
•
|
Invest in market-leading technologies and manufacturing capabilities.
|
•
|
Balance sheet strength and stability enables strategic investments and acquisitions to enhance shareholder returns.
|
•
|
Corporate responsibility is a top priority, it attracts great team members, customers and opportunities.
|
•
|
Continuous process improvements and value engineering.
|
•
|
Expense of $4.5 million related to a gift to South Dakota State University (SDSU), further described in Note 12
|
•
|
Project Atlas related expenses of $4.0 million, which is an increase of $3.1 million compared to $0.9 million in fiscal 2018 when the project began.
|
•
|
Higher investment in research and development activities within Applied Technology and Aerostar.
|
•
|
Lower operating leverage within Engineered Films due to significantly lower hurricane recovery film sales.
|
|
|
For the years ended January 31,
|
||||||||||||||||
(dollars in thousands)
|
|
2019
|
|
% change
|
|
2018
|
|
% change
|
|
2017
|
||||||||
Net sales
|
|
$
|
129,749
|
|
|
4.1
|
%
|
|
$
|
124,688
|
|
|
18.5
|
%
|
|
$
|
105,217
|
|
Gross profit
|
|
65,778
|
|
|
20.3
|
%
|
|
54,682
|
|
|
25.8
|
%
|
|
43,476
|
|
|||
Gross margin
|
|
50.7
|
%
|
|
|
|
43.9
|
%
|
|
|
|
41.3
|
%
|
|||||
Operating expense
|
|
$
|
26,734
|
|
|
15.4
|
%
|
|
$
|
23,166
|
|
|
37.6
|
%
|
|
$
|
16,833
|
|
Operating expense as % of sales
|
|
20.6
|
%
|
|
|
|
18.6
|
%
|
|
|
|
16.0
|
%
|
|||||
Long-lived asset impairment loss
|
|
$
|
—
|
|
|
|
|
$
|
259
|
|
|
|
|
$
|
—
|
|
||
Operating income(a)
|
|
39,044
|
|
|
24.9
|
%
|
|
31,257
|
|
|
17.3
|
%
|
|
26,643
|
|
|||
Operating margin
|
|
30.1
|
%
|
|
|
|
25.1
|
%
|
|
|
|
25.3
|
%
|
|||||
(a) At the segment level, operating income does not include an allocation of general and administrative expenses.
|
•
|
Market conditions. Corn surplus remains near an all-time high, and U.S. farm income has decreased over the last five years. Offsetting these general ag market challenges is the growing demand for machine replacements that have been deferred for several years. In order to drive growth in these challenging market conditions, the division continues to invest in the development and acquisition of market leading technologies. Applied Technology continually makes a significant investment in research and development to drive innovation and maintain a cadence of new product introductions to the market. Additionally, the division completed the acquisition of AgSync on January 1, 2019. Applied Technology will leverage this acquisition to enhance its Slingshot® platform by delivering a logistics solution for ag retailers, custom applicators and enterprise farms. This strategic expansion of the Slingshot® platform is an effort to provide further value to the end customer and grow the division's subscription-based service model.
|
•
|
Sales volume and selling prices. Geographically, domestic and international sales were up 5.0% and 0.9% year-over-year, respectively. Higher sales volume of both new and existing products, rather than an increase in selling price, was the primary driver of this increase.
|
•
|
International sales. Net sales outside the U.S. accounted for 22.9% of segment sales in fiscal 2019 compared to 23.6% in fiscal 2018. International sales of $29.7 million in fiscal 2019 increased $0.3 million, or 0.9%, compared to fiscal 2018. The year-over-year increases in Europe and Latin America were mostly offset by a decrease in Canada.
|
•
|
Gross margin. Gross margin increased from 43.9% in fiscal 2018 to 50.7% in fiscal 2019. The year-over-year increase in profitability was primarily driven by increased leverage on higher sales volume 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 operating expenses were 20.6% of net sales compared to 18.6% for the prior year. Operating expenses as a percentage of sales increased primarily due to higher investment in research and development activities and approximately $2 million in selling expenses related to the establishment of the division's Latin American headquarters in Brazil. The greenfield project to establish a direct presence in Latin America resulted in higher operating expenses while sales development activities increased. The division expects this investment to provide strong organic growth over the long-term. Partially offsetting this year-over-year increase in operating expenses were lower legal expenses, which included favorable legal recoveries.
|
•
|
Market conditions. Conditions in the agriculture market remained subdued; however, Applied Technology's marketplace
|
•
|
Sales volume and selling prices. Geographically, domestic and international sales were up 25.0% and 1.5% year-over-year, respectively. Higher sales volume and growth in new product sales, rather than an increase in selling price, were the primary drivers for these increases.
|
•
|
International sales. Net sales outside the U.S. accounted for 23.6% of segment sales in fiscal 2018 compared to 27.6% in fiscal 2017. International sales increased $0.4 million, or 1.5%, to $29.4 million in fiscal 2018 compared to fiscal 2017. Higher sales in Latin America and Europe, partially offset by a decrease in Canada, were the primary drivers of the increase. European revenue growth included strong growth at SBG Innovatie BV (SBG) in fiscal 2018.
|
•
|
Gross margin. Gross margin increased from 41.3% in fiscal 2017 to 43.9% in fiscal 2018. Higher sales volume and lower manufacturing costs increased operating leverage and drove the increase in gross margin. Due to the existing available capacity of the manufacturing facilities, the increase in sales volume did not require a commensurate increase in costs in fiscal 2018.
|
•
|
Operating expenses. Fiscal 2018 operating expenses were 18.6% of net sales compared to 16.0% for the prior year. Throughout fiscal 2018, the division continued to invest in research and development activities to position itself for incremental new product sales and market share gains in future years.
|
|
|
For the years ended January 31,
|
||||||||||||||||
(dollars in thousands)
|
|
2019
|
|
% change
|
|
2018
|
|
% change
|
|
2017
|
||||||||
Net sales
|
|
$
|
226,574
|
|
|
6.2
|
%
|
|
$
|
213,298
|
|
|
53.6
|
%
|
|
$
|
138,855
|
|
Gross profit
|
|
47,641
|
|
|
(15.3
|
)%
|
|
56,255
|
|
|
91.3
|
%
|
|
29,407
|
|
|||
Gross margin
|
|
21.0
|
%
|
|
|
|
26.4
|
%
|
|
|
|
21.2
|
%
|
|||||
Operating expenses
|
|
$
|
7,927
|
|
|
(11.2
|
)%
|
|
$
|
8,931
|
|
|
38.7
|
%
|
|
$
|
6,441
|
|
Operating expenses as % of sales
|
|
3.5
|
%
|
|
|
|
4.2
|
%
|
|
|
|
4.6
|
%
|
|||||
Operating income(a)
|
|
$
|
39,714
|
|
|
(16.1
|
)%
|
|
$
|
47,324
|
|
|
106.1
|
%
|
|
$
|
22,966
|
|
Operating margin
|
|
17.5
|
%
|
|
|
|
22.2
|
%
|
|
|
|
16.5
|
%
|
|||||
(a) At the segment level, operating income does not include an allocation of general and administrative expenses.
|
•
|
Market conditions. The division's end-market conditions improved throughout most of fiscal 2019, with the exception of significantly lower demand for hurricane recovery film compared to fiscal 2018. While oil prices dipped into the $50 per barrel range at the end of fiscal 2019, they averaged approximately $64 per barrel throughout fiscal 2019 which drove a 12.6% increase in Permian Basin rig counts from January 2018 to January 2019. Lastly, the division began the commissioning process for Line 15 at the end of fiscal 2019 and will start selling product in the first quarter of fiscal 2020. Line 15 is a new extrusion line designed to expand production capacity and capitalize on the growing end-market demand.
|
•
|
Sales volume and selling prices. As expected, the year-over-year comparison was impacted by a reduction in hurricane recovery film sales. Net sales of hurricane recovery film were $14.5 million and $24.2 million in fiscal 2019 and 2018, respectively. Additionally, the acquisition of CLI, which occurred in September of fiscal year 2018, contributed a total of $21.6 million in sales for the first seven months of fiscal 2019. For the first seven months of fiscal 2018 the division generated $4.1 million in sales to CLI as a customer. Excluding the impact from hurricane recovery film sales and the impact of CLI prior to the anniversary of the acquisition, net sales of the underlying business achieved growth year-over-year. In the underlying business, pounds sold did not change significantly but there was a modest increase in average selling price per pound.
|
•
|
Gross margin. Fiscal 2019 gross margin was 21.0%, 5.4 percentage points lower than the prior fiscal year. The decrease in gross margin percentage was led by lower plant utilization from the reduction in hurricane recovery film sales, a higher
|
•
|
Operating expenses. Fiscal 2019 operating expenses, as a percentage of net sales, decreased to 3.5%, from 4.2% in the prior year. The division reduced selling expenses while sales grew year-over-year.
|
•
|
Market conditions. Engineered Films produces high-performance plastic films and sheeting for geomembrane, agricultural, construction, and industrial applications. End-market conditions for Engineered Films exhibited significant year-over-year improvement throughout fiscal 2018. U.S. land-based rig counts have increased 34.6% from January 2017 to January 2018. Additionally, as discussed in more detail in Note 6 "Acquisitions of and Investments in Business and Technologies" of the Notes to the Consolidated Financial Statements, Engineered Films acquired the assets of CLI in September 2017. This acquisition enhanced the division's geomembrane market position through extended service and product offerings with the addition of new design-build and installation service components. The acquisition of CLI advanced Engineered Films’ business model into a vertically-integrated, full-service solutions provider for the geomembrane market. CLI contributed $13.1 million in net sales in fiscal 2018. Additionally, driven by the unusually devastating hurricane season, delivery of hurricane recovery film during fiscal 2018 resulted in sales of $24.2 million. It had been several years since the Company received a substantial increase in demand for hurricane recovery film, and sales of such film are generally less than $2.0 million on an annual basis.
|
•
|
Sales volume and selling prices. Primary drivers of the increase in net sales were the improved end-market conditions, the acquisition of CLI, and the delivery of hurricane recovery film, which added $2.3 million, $7.9 million and $15.8 million, in the fourth quarter of fiscal 2018, and $34.9 million, $13.1 million and $24.2 million, in the 2018 full fiscal year, respectively.
|
•
|
Gross margin. Fiscal 2018 gross margin was 26.4%, 5.2 percentage points higher than the prior fiscal year. During fiscal 2018 fourth quarter, the gross margin was 26.3% compared to 20.5% in the prior year fourth quarter. The increase for both periods was primarily the result of operational efficiency gains developed throughout the year and higher sales volume that improved capacity utilization and resulted in fixed cost leverage. Due to the existing available capacity of the facilities, the increase in sales volume did not require a commensurate increase in costs in fiscal 2018.
|
•
|
Operating expenses. Fiscal 2018 operating expenses, as a percentage of net sales, decreased to 4.2%, from 4.6% in the prior year. The year-over-year decrease in operating expenses was led by lower selling expenses.
|
|
|
For the years ended January 31,
|
||||||||||||||||
(dollars in thousands)
|
|
2019
|
|
% change
|
|
2018
|
|
% change
|
|
2017
|
||||||||
Net sales
|
|
$
|
50,867
|
|
|
27.4
|
%
|
|
$
|
39,915
|
|
|
17.0
|
%
|
|
$
|
34,113
|
|
Gross profit
|
|
19,165
|
|
|
80.7
|
%
|
|
10,608
|
|
|
99.4
|
%
|
|
5,319
|
|
|||
Gross margin
|
|
37.7
|
%
|
|
|
|
26.6
|
%
|
|
|
|
15.6
|
%
|
|||||
Operating expenses
|
|
$
|
10,986
|
|
|
69.4
|
%
|
|
$
|
6,486
|
|
|
(4.5
|
)%
|
|
$
|
6,792
|
|
Operating expenses as % of sales
|
|
21.6
|
%
|
|
|
|
16.2
|
%
|
|
|
|
19.9
|
%
|
|||||
Long-lived asset impairment loss
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
87
|
|
||
Operating income (loss)(a)
|
|
8,179
|
|
|
98.4
|
%
|
|
4,122
|
|
|
(364.2
|
)%
|
|
(1,560
|
)
|
|||
Operating margin
|
|
16.1
|
%
|
|
|
|
10.3
|
%
|
|
|
|
(4.6
|
)%
|
|||||
(a) At the segment level, operating income (loss) does not include an allocation of general and administrative expenses.
|
•
|
Market conditions. Aerostar's markets are subject to significant variability in demand due to government spending uncertainties and the timing of contract awards. During fiscal 2019, the division continued to develop its capabilities in the emerging stratospheric balloon market beyond those developed in collaboration with Google on Project Loon. The division also remained focused on radar products and services and during fiscal year 2019 the division was awarded a new five-year $36 million radar systems contract with the U.S. Naval Air Warfare Center Aircraft Division. Deliveries for this contract are expected to begin in fiscal 2020.
|
•
|
Sales volume. The increase in sales for the division was driven primarily by higher sales of lighter-than-air products and services. In the first quarter of fiscal 2019 the division divested its client private business. The client private business generated net sales of $0.3 million and $5.6 million in fiscal 2019 and 2018, respectively. Excluding net sales associated with the client private business, the division's net sales increased significantly year-over-year when compared to reported results.
|
•
|
Gross margin. For fiscal 2019, gross margin increased 11.1 percentage points compared to the prior fiscal year. The improved profitability was primarily due to increased leverage on higher sales volume, strong margins on aerostat contract deliveries and higher utilization of engineering support on service contracts. Given the contract-based nature of this division, gross margin for Aerostar can vary considerably based on the timing and magnitude of contracts.
|
•
|
Operating expenses. Operating expenses as a percentage of net sales increased 5.4 percentage points compared to the prior year. Fiscal 2019 operating expenses were $11.0 million, or 21.6% of net sales, compared to operating expenses of $6.5 million, or 16.2% of net sales in fiscal 2018. The increase in operating expenses as a percentage of net sales was primarily driven by higher investment in research and development activities as compared to the prior year.
|
•
|
Market conditions. Aerostar's markets are subject to significant variability due to government spending and the timing of contract awards. During fiscal 2018, Aerostar was pioneering new markets with leading-edge applications of its stratospheric balloons and was in active collaboration with Google on Project Loon. Project Loon is a program to provide high-speed wireless Internet accessibility and telecommunications to rural, remote, and under-served areas of the world. During fiscal 2018 Aerostar had several new contract wins further expanding the market for its stratospheric balloons.
|
•
|
Sales volume. The increase was principally driven by higher sales of stratospheric balloons and radar systems.
|
•
|
Gross margin. For fiscal 2018, gross margin increased 11.0 percentage points compared to the prior fiscal year. The improved profitability was driven by higher sales volume, and the absence of inventory write-downs, which lowered prior year results by $2.3 million.
|
•
|
Operating expenses. Operating expenses as a percentage of net sales decreased 3.7 percentage points compared to prior fiscal year. Fiscal 2018 operating expenses were $6.5 million, or 16.2% of net sales, compared to operating expenses of $6.8 million, or 19.9% of net sales in fiscal 2017.
|
|
|
For the years ended January 31,
|
||||||||||
(dollars in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Administrative expenses
|
|
$
|
31,769
|
|
|
$
|
23,553
|
|
|
$
|
19,624
|
|
Administrative expenses as a % of sales
|
|
7.8
|
%
|
|
6.2
|
%
|
|
7.1
|
%
|
|||
Other income (expense), net
|
|
$
|
6,437
|
|
|
$
|
(184
|
)
|
|
$
|
(560
|
)
|
Effective tax rate
|
|
15.7
|
%
|
|
30.5
|
%
|
|
27.5
|
%
|
|
|
As of January 31,
|
||||||||||
(dollars in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash and cash equivalents
|
|
$
|
65,787
|
|
|
$
|
40,535
|
|
|
$
|
50,648
|
|
|
|
For the years ended January 31,
|
||||||||||
(dollars in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash provided by operating activities
|
|
$
|
65,952
|
|
|
$
|
44,961
|
|
|
$
|
48,636
|
|
Cash used in investing activities
|
|
(16,444
|
)
|
|
(25,675
|
)
|
|
(4,642
|
)
|
|||
Cash used in financing activities
|
|
(23,755
|
)
|
|
(29,721
|
)
|
|
(27,151
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(501
|
)
|
|
322
|
|
|
23
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
25,252
|
|
|
$
|
(10,113
|
)
|
|
$
|
16,866
|
|
|
|
As of January 31,
|
||||||||||
(dollars in thousands)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Accounts receivable, net
|
|
$
|
54,472
|
|
|
$
|
58,532
|
|
|
$
|
43,143
|
|
Plus: Inventories
|
|
54,076
|
|
|
55,351
|
|
|
42,336
|
|
|||
Less: Accounts payable
|
|
8,272
|
|
|
13,106
|
|
|
8,467
|
|
|||
Net working capital(a)
|
|
$
|
100,276
|
|
|
$
|
100,777
|
|
|
$
|
77,012
|
|
|
|
|
|
|
|
|
||||||
Annualized net sales(b)
|
|
$
|
352,088
|
|
|
$
|
383,292
|
|
|
$
|
275,660
|
|
Net working capital percentage(c)
|
|
28.5
|
%
|
|
26.3
|
%
|
|
27.9
|
%
|
|||
(a) Net working capital is defined as accounts receivable, (net) plus inventories less accounts payable.
|
||||||||||||
(b) Annualized net sales is defined as fourth quarter net sales during the applicable fiscal year multiplied by four.
|
||||||||||||
(c) Net working capital percentage is defined as net working capital divided by annualized sales.
|
(dollars in thousands)
|
|
Total
|
|
Less than
1 year
|
|
2-3
years
|
|
4-5
years
|
|
More than
5 years
|
|||||||||||
Credit facility
|
|
$
|
275
|
|
|
$
|
212
|
|
|
$
|
63
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Capital lease obligations
|
|
330
|
|
|
182
|
|
|
146
|
|
|
2
|
|
|
—
|
|
||||||
Operating leases
|
|
5,376
|
|
|
2,213
|
|
|
2,666
|
|
|
497
|
|
|
—
|
|
||||||
Unconditional purchase obligations
|
|
31,373
|
|
|
31,373
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Postretirement benefits
|
|
17,980
|
|
|
330
|
|
|
690
|
|
|
706
|
|
|
16,254
|
|
||||||
Acquisition-related contingent payments
|
|
5,838
|
|
|
2,138
|
|
|
3,700
|
|
|
—
|
|
|
—
|
|
||||||
Contractual Gift Agreement
|
|
3,570
|
|
|
715
|
|
|
1,430
|
|
|
1,425
|
|
|
—
|
|
||||||
Uncertain tax positions
|
|
2,670
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
|
$
|
67,412
|
|
|
$
|
37,163
|
|
|
$
|
8,695
|
|
|
$
|
2,630
|
|
|
$
|
16,254
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
|
|
|
|
|
Index to Financial Statements
|
|
||
|
|
|
Page
|
Management's Report on Internal Control Over Financial Reporting
|
|
||
Report of Independent Registered Public Accounting Firm - Deloitte & Touche LLP
|
|
||
Report of Independent Registered Public Accounting Firm - PricewaterhouseCoopers LLP
|
|
||
Consolidated Financial Statements
|
|
|
|
|
Consolidated Balance Sheets
|
|
|
|
Consolidated Statements of Income and Comprehensive Income
|
|
|
|
Consolidated Statements of Shareholders' Equity
|
|
|
|
Consolidated Statements of Cash Flows
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
|
|
|
|
/s/ DANIEL A. RYKHUS
|
|
/s/ STEVEN E. BRAZONES
|
Daniel A. Rykhus
|
|
Steven E. Brazones
|
President and Chief Executive Officer
|
|
Vice President and Chief Financial Officer
|
RAVEN INDUSTRIES, INC.
|
CONSOLIDATED BALANCE SHEETS
|
(Dollars and shares in thousands, except per-share amounts)
|
|
As of January 31,
|
||||||
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
65,787
|
|
|
$
|
40,535
|
|
Accounts receivable, net
|
54,472
|
|
|
58,532
|
|
||
Inventories
|
54,076
|
|
|
55,351
|
|
||
Other current assets
|
8,736
|
|
|
5,861
|
|
||
Total current assets
|
183,071
|
|
|
160,279
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
106,615
|
|
|
106,280
|
|
||
Goodwill
|
50,942
|
|
|
46,710
|
|
||
Amortizable intangible assets, net
|
16,293
|
|
|
10,584
|
|
||
Other assets
|
3,324
|
|
|
2,950
|
|
||
TOTAL ASSETS
|
$
|
360,245
|
|
|
$
|
326,803
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
8,272
|
|
|
$
|
13,106
|
|
Accrued liabilities
|
23,478
|
|
|
21,946
|
|
||
Other current liabilities
|
1,303
|
|
|
1,890
|
|
||
Total current liabilities
|
33,053
|
|
|
36,942
|
|
||
|
|
|
|
||||
Other liabilities
|
18,235
|
|
|
13,795
|
|
||
|
|
|
|
||||
Commitments and contingencies (see Note 12)
|
|
|
|
|
|
||
|
|
|
|
||||
Raven Industries, Inc. shareholders' equity
|
|
|
|
||||
Common stock, $1 par value, authorized shares 100,000; issued 67,289 and 67,124, respectively
|
67,289
|
|
|
67,124
|
|
||
Paid-in capital
|
59,655
|
|
|
59,143
|
|
||
Retained earnings
|
285,969
|
|
|
252,772
|
|
||
Accumulated other comprehensive loss
|
(3,556
|
)
|
|
(2,573
|
)
|
||
Less treasury stock at cost, 31,332 and 31,332 shares, respectively
|
(100,402
|
)
|
|
(100,402
|
)
|
||
Total Raven Industries, Inc. shareholders' equity
|
308,955
|
|
|
276,064
|
|
||
Noncontrolling interest
|
2
|
|
|
2
|
|
||
Total shareholders' equity
|
308,957
|
|
|
276,066
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
360,245
|
|
|
$
|
326,803
|
|
|
|
|
|
||||
The accompanying notes are an integral part of the consolidated financial statements.
|
|
|
|
RAVEN INDUSTRIES, INC.
|
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|
(Dollars in thousands, except per-share amounts)
|
|
For the years ended January 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net sales
|
$
|
406,668
|
|
|
$
|
377,317
|
|
|
$
|
277,395
|
|
Cost of sales
|
274,119
|
|
|
255,752
|
|
|
199,205
|
|
|||
Gross profit
|
132,549
|
|
|
121,565
|
|
|
78,190
|
|
|||
|
|
|
|
|
|
||||||
Research and development expenses
|
26,174
|
|
|
16,936
|
|
|
16,312
|
|
|||
Selling, general and administrative expenses
|
51,242
|
|
|
45,200
|
|
|
33,378
|
|
|||
Long-lived asset impairment loss
|
—
|
|
|
259
|
|
|
87
|
|
|||
Operating income
|
55,133
|
|
|
59,170
|
|
|
28,413
|
|
|||
|
|
|
|
|
|
||||||
Other income (expense), net
|
6,437
|
|
|
(184
|
)
|
|
(560
|
)
|
|||
Income before income taxes
|
61,570
|
|
|
58,986
|
|
|
27,853
|
|
|||
|
|
|
|
|
|
||||||
Income tax expense
|
9,697
|
|
|
17,967
|
|
|
7,661
|
|
|||
Net income
|
51,873
|
|
|
41,019
|
|
|
20,192
|
|
|||
|
|
|
|
|
|
||||||
Net income (loss) attributable to the noncontrolling interest
|
79
|
|
|
(3
|
)
|
|
1
|
|
|||
|
|
|
|
|
|
||||||
Net income attributable to Raven Industries, Inc.
|
$
|
51,794
|
|
|
$
|
41,022
|
|
|
$
|
20,191
|
|
|
|
|
|
|
|
||||||
Net income per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
1.44
|
|
|
$
|
1.14
|
|
|
$
|
0.56
|
|
Diluted
|
$
|
1.42
|
|
|
$
|
1.13
|
|
|
$
|
0.56
|
|
|
|
|
|
|
|
||||||
Comprehensive income:
|
|
|
|
|
|
||||||
Net income
|
$
|
51,873
|
|
|
$
|
41,019
|
|
|
$
|
20,192
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency translation
|
(1,045)
|
|
|
1,234
|
|
|
50
|
|
|||
Postretirement benefits, net of income tax (expense) benefit of ($99), $44, and $129, respectively
|
342
|
|
|
(131
|
)
|
|
(225
|
)
|
|||
Other comprehensive income (loss), net of tax
|
(703
|
)
|
|
1,103
|
|
|
(175
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive income
|
51,170
|
|
|
42,122
|
|
|
20,017
|
|
|||
|
|
|
|
|
|
||||||
Comprehensive income (loss) attributable to noncontrolling interest
|
79
|
|
|
(3
|
)
|
|
1
|
|
|||
|
|
|
|
|
|
||||||
Comprehensive income attributable to Raven Industries, Inc.
|
$
|
51,091
|
|
|
$
|
42,125
|
|
|
$
|
20,016
|
|
|
|
|
|
|
|
||||||
The accompanying notes are an integral part of the consolidated financial statements.
|
|
|
RAVEN INDUSTRIES, INC.
|
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
|
(Dollars and shares in thousands, except per-share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
$1 Par Common Stock
|
Paid-in Capital
|
Treasury Stock
|
Retained Earnings
|
Accumulated Other Comprehen-sive Income (Loss)
|
Raven Industries, Inc. Equity
|
Non-controlling Interest
|
Total Equity
|
|||||||||||||||||||
|
Shares
|
|
Cost
|
||||||||||||||||||||||||
Balance January 31, 2016
|
$
|
67,006
|
|
$
|
53,907
|
|
30,500
|
|
|
$
|
(82,700
|
)
|
$
|
229,443
|
|
$
|
(3,501
|
)
|
$
|
264,155
|
|
$
|
74
|
|
$
|
264,229
|
|
Net income
|
—
|
|
—
|
|
—
|
|
|
—
|
|
20,191
|
|
—
|
|
20,191
|
|
1
|
|
20,192
|
|
||||||||
Other comprehensive (loss), net of income tax
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(175
|
)
|
(175
|
)
|
—
|
|
(175
|
)
|
||||||||
Cash dividends ($0.52 per share)
|
—
|
|
216
|
|
—
|
|
|
—
|
|
(18,985
|
)
|
—
|
|
(18,769
|
)
|
—
|
|
(18,769
|
)
|
||||||||
Dividends of less than wholly-owned subsidiary paid to noncontrolling interest
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(70
|
)
|
(70
|
)
|
||||||||
Director shares issued
|
19
|
|
(19
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Shares issued on vesting of stock units, net of shares withheld for employee taxes
|
35
|
|
(291
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
(256
|
)
|
—
|
|
(256
|
)
|
||||||||
Shares repurchased
|
—
|
|
—
|
|
484
|
|
|
(7,702
|
)
|
—
|
|
—
|
|
(7,702
|
)
|
—
|
|
(7,702
|
)
|
||||||||
Share-based compensation
|
—
|
|
3,071
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
3,071
|
|
—
|
|
3,071
|
|
||||||||
Income tax impact related to share-based compensation
|
—
|
|
(1,089
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
(1,089
|
)
|
—
|
|
(1,089
|
)
|
||||||||
Balance January 31, 2017
|
67,060
|
|
55,795
|
|
30,984
|
|
|
(90,402
|
)
|
230,649
|
|
(3,676
|
)
|
259,426
|
|
5
|
|
259,431
|
|
||||||||
Net income
|
—
|
|
—
|
|
—
|
|
|
—
|
|
41,022
|
|
—
|
|
41,022
|
|
(3
|
)
|
41,019
|
|
||||||||
Other comprehensive income, net of income tax
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
1,103
|
|
1,103
|
|
—
|
|
1,103
|
|
||||||||
Cash dividends ($0.52 per share)
|
—
|
|
214
|
|
—
|
|
|
—
|
|
(18,899
|
)
|
—
|
|
(18,685
|
)
|
—
|
|
(18,685
|
)
|
||||||||
Director shares issued
|
26
|
|
(26
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||
Shares issued on stock options exercised, net of shares withheld for employee taxes
|
21
|
|
(311
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
(290
|
)
|
—
|
|
(290
|
)
|
||||||||
Shares issued on vesting of stock units, net of shares withheld for employee taxes
|
17
|
|
(254
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
(237
|
)
|
—
|
|
(237
|
)
|
||||||||
Shares repurchased
|
—
|
|
—
|
|
348
|
|
|
(10,000
|
)
|
—
|
|
—
|
|
(10,000
|
)
|
—
|
|
(10,000
|
)
|
||||||||
Share-based compensation
|
—
|
|
3,725
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
3,725
|
|
—
|
|
3,725
|
|
||||||||
Balance January 31, 2018
|
67,124
|
|
59,143
|
|
31,332
|
|
|
(100,402
|
)
|
252,772
|
|
(2,573
|
)
|
276,064
|
|
2
|
|
276,066
|
|
||||||||
Net income
|
—
|
|
—
|
|
—
|
|
|
—
|
|
51,794
|
|
—
|
|
51,794
|
|
79
|
|
51,873
|
|
||||||||
Other comprehensive (loss), net of income tax
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(703
|
)
|
(703
|
)
|
—
|
|
(703
|
)
|
||||||||
Reclassification due to ASU 2018-02 adoption
|
—
|
|
—
|
|
—
|
|
|
—
|
|
280
|
|
(280
|
)
|
—
|
|
—
|
|
—
|
|
||||||||
Cash dividends ($0.52 per share)
|
—
|
|
203
|
|
—
|
|
|
—
|
|
(18,877
|
)
|
—
|
|
(18,674
|
)
|
—
|
|
(18,674
|
)
|
||||||||
Dividends of less than wholly-owned subsidiary paid to noncontrolling interest
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(79
|
)
|
(79
|
)
|
||||||||
Shares issued on stock options exercised, net of shares withheld for employee taxes
|
113
|
|
(2,750
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
(2,637
|
)
|
—
|
|
(2,637
|
)
|
||||||||
Shares issued on vesting of stock units, net of shares withheld for employee taxes
|
52
|
|
(892
|
)
|
—
|
|
|
—
|
|
—
|
|
—
|
|
(840
|
)
|
—
|
|
(840
|
)
|
||||||||
Share-based compensation
|
—
|
|
3,951
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
3,951
|
|
—
|
|
3,951
|
|
||||||||
Balance January 31, 2019
|
$
|
67,289
|
|
$
|
59,655
|
|
31,332
|
|
|
$
|
(100,402
|
)
|
$
|
285,969
|
|
$
|
(3,556
|
)
|
$
|
308,955
|
|
$
|
2
|
|
$
|
308,957
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
|
|
|
|
|
RAVEN INDUSTRIES, INC.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Dollars in thousands)
|
|
For the years ended January 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
51,873
|
|
|
$
|
41,019
|
|
|
$
|
20,192
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
13,296
|
|
|
12,743
|
|
|
13,169
|
|
|||
Amortization of intangible assets
|
1,827
|
|
|
2,059
|
|
|
2,267
|
|
|||
Long-lived asset impairment loss
|
—
|
|
|
259
|
|
|
87
|
|
|||
Change in fair value of acquisition-related contingent consideration
|
708
|
|
|
457
|
|
|
36
|
|
|||
Loss from equity investments
|
—
|
|
|
114
|
|
|
72
|
|
|||
Gain from sale of equity method investments
|
(5,785
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes
|
953
|
|
|
(787
|
)
|
|
307
|
|
|||
Share-based compensation expense
|
3,951
|
|
|
3,725
|
|
|
3,071
|
|
|||
Other operating activities, net
|
(2,424
|
)
|
|
2,053
|
|
|
2,390
|
|
|||
Change in operating assets and liabilities
|
1,553
|
|
|
(16,681
|
)
|
|
7,045
|
|
|||
Net cash provided by operating activities
|
65,952
|
|
|
44,961
|
|
|
48,636
|
|
|||
|
|
|
|
|
|
||||||
INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Capital expenditures
|
(14,127
|
)
|
|
(12,011
|
)
|
|
(4,796
|
)
|
|||
Payments related to business acquisitions
|
(7,671
|
)
|
|
(13,267
|
)
|
|
—
|
|
|||
Proceeds from sale or maturities of investments
|
7,334
|
|
|
250
|
|
|
250
|
|
|||
Purchases of investments
|
(745
|
)
|
|
(273
|
)
|
|
(750
|
)
|
|||
Proceeds (disbursements) from sale of assets, settlement of liabilities
|
832
|
|
|
(333
|
)
|
|
1,188
|
|
|||
Other investing activities, net
|
(2,067
|
)
|
|
(41
|
)
|
|
(534
|
)
|
|||
Net cash used in investing activities
|
(16,444
|
)
|
|
(25,675
|
)
|
|
(4,642
|
)
|
|||
|
|
|
|
|
|
||||||
FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Dividends paid
|
(18,753
|
)
|
|
(18,685
|
)
|
|
(18,839
|
)
|
|||
Payments for common shares repurchased
|
—
|
|
|
(10,000
|
)
|
|
(7,702
|
)
|
|||
Payment of acquisition-related contingent liabilities
|
(1,324
|
)
|
|
(408
|
)
|
|
(354
|
)
|
|||
Restricted stock units vested and issued
|
(840
|
)
|
|
(237
|
)
|
|
(256
|
)
|
|||
Employee stock option exercises net of tax benefit
|
(2,637
|
)
|
|
(290
|
)
|
|
—
|
|
|||
Other financing activities, net
|
(201
|
)
|
|
(101
|
)
|
|
—
|
|
|||
Net cash used in financing activities
|
(23,755
|
)
|
|
(29,721
|
)
|
|
(27,151
|
)
|
|||
Effect of exchange rate changes on cash
|
(501
|
)
|
|
322
|
|
|
23
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
25,252
|
|
|
(10,113
|
)
|
|
16,866
|
|
|||
Cash and cash equivalents at beginning of year
|
40,535
|
|
|
50,648
|
|
|
33,782
|
|
|||
Cash and cash equivalents at end of year
|
$
|
65,787
|
|
|
$
|
40,535
|
|
|
$
|
50,648
|
|
|
|
|
|
|
|
||||||
The accompanying notes are an integral part of the consolidated financial statements.
|
|
|
|
|
|
NOTE 1
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Building and improvements
|
15 - 39 years
|
Manufacturing equipment by segment
|
|
Applied Technology
|
3 - 5 years
|
Engineered Films
|
5 - 12 years
|
Aerostar
|
3 - 5 years
|
Furniture, fixtures, office equipment, and other
|
3 - 7 years
|
Cost of sales
|
|
Research and development (R&D) expenses
|
|
Selling, general, and administrative (SG&A)expenses
|
Direct material costs
Material acquisition and handling costs
Direct labor
Factory overhead including depreciation and amortization
Inventory obsolescence
Product warranties
Shipping and handling cost
|
|
Personnel costs
Professional service fees
Material and supplies
Facility allocation
|
|
Personnel costs
Professional service fees
Advertising
Promotions
Information technology equipment depreciation
Office supplies
Facility allocation
Bad debt expense
|
NOTE 2
|
SELECTED BALANCE SHEET INFORMATION
|
|
|
As of January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Accounts receivable, net:
|
|
|
|
|
||||
Trade accounts
|
|
$
|
53,820
|
|
|
$
|
57,063
|
|
Unbilled receivables
|
|
1,391
|
|
|
2,447
|
|
||
Allowance for doubtful accounts
|
|
(739
|
)
|
|
(978
|
)
|
||
|
|
$
|
54,472
|
|
|
$
|
58,532
|
|
Inventories:
|
|
|
|
|
||||
Finished goods
|
|
$
|
7,629
|
|
|
$
|
8,054
|
|
In process
|
|
1,103
|
|
|
961
|
|
||
Materials
|
|
45,344
|
|
|
46,336
|
|
||
|
|
$
|
54,076
|
|
|
$
|
55,351
|
|
Other current assets:
|
|
|
|
|
||||
Insurance policy benefit
|
|
$
|
336
|
|
|
$
|
759
|
|
Federal income tax receivable
|
|
1,045
|
|
|
1,397
|
|
||
Receivable from sale of investment
|
|
1,055
|
|
|
—
|
|
||
Prepaid expenses and other
|
|
6,300
|
|
|
3,705
|
|
||
|
|
$
|
8,736
|
|
|
$
|
5,861
|
|
Property, plant and equipment, net:
|
|
|
|
|
||||
Assets held for use and assets held for sale(a):
|
|
|
|
|
||||
Land
|
|
$
|
3,234
|
|
|
$
|
3,234
|
|
Buildings and improvements
|
|
81,381
|
|
|
80,299
|
|
||
Machinery and equipment
|
|
155,463
|
|
|
149,847
|
|
||
Accumulated depreciation
|
|
(133,724
|
)
|
|
(127,523
|
)
|
||
|
|
$
|
106,354
|
|
|
$
|
105,857
|
|
Property, plant and equipment subject to capital leases:
|
|
|
|
|
||||
Machinery and equipment
|
|
$
|
510
|
|
|
$
|
488
|
|
Accumulated amortization for capitalized leases
|
|
(249
|
)
|
|
(65
|
)
|
||
|
|
261
|
|
|
423
|
|
||
|
|
$
|
106,615
|
|
|
$
|
106,280
|
|
Other assets:
|
|
|
|
|
||||
Equity investments
|
|
$
|
345
|
|
|
$
|
1,955
|
|
Deferred income taxes
|
|
16
|
|
|
19
|
|
||
Other
|
|
2,963
|
|
|
976
|
|
||
|
|
$
|
3,324
|
|
|
$
|
2,950
|
|
Accrued liabilities:
|
|
|
|
|
||||
Salaries and related
|
|
$
|
8,244
|
|
|
$
|
9,409
|
|
Benefits
|
|
4,751
|
|
|
4,225
|
|
||
Insurance obligations
|
|
1,963
|
|
|
1,992
|
|
||
Warranties
|
|
890
|
|
|
1,163
|
|
||
Income taxes
|
|
328
|
|
|
226
|
|
||
Other taxes
|
|
2,434
|
|
|
1,880
|
|
||
Acquisition-related contingent consideration
|
|
1,796
|
|
|
1,036
|
|
||
Other
|
|
3,072
|
|
|
2,015
|
|
||
|
|
$
|
23,478
|
|
|
$
|
21,946
|
|
Other liabilities:
|
|
|
|
|
||||
Postretirement benefits
|
|
$
|
7,678
|
|
|
$
|
8,264
|
|
Acquisition-related contingent consideration
|
|
2,376
|
|
|
2,010
|
|
||
Deferred income taxes
|
|
1,659
|
|
|
615
|
|
||
Uncertain tax positions
|
|
2,670
|
|
|
2,634
|
|
||
Other
|
|
3,852
|
|
|
272
|
|
||
|
|
$
|
18,235
|
|
|
$
|
13,795
|
|
NOTE 3
|
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
|
|
Cumulative foreign currency translation adjustment
|
|
Postretirement benefits
|
|
Total
|
||||||
Balance at January 31, 2017
|
|
$
|
(2,427
|
)
|
|
$
|
(1,249
|
)
|
|
$
|
(3,676
|
)
|
Other comprehensive income before reclassifications
|
|
1,234
|
|
|
$
|
—
|
|
|
1,234
|
|
||
Amounts reclassified from accumulated other comprehensive income (loss) after tax benefit of $44
|
|
—
|
|
|
(131
|
)
|
|
(131
|
)
|
|||
Balance at January 31, 2018
|
|
$
|
(1,193
|
)
|
|
$
|
(1,380
|
)
|
|
$
|
(2,573
|
)
|
Other comprehensive (loss) before reclassifications
|
|
(1,045
|
)
|
|
—
|
|
|
(1,045
|
)
|
|||
Reclassification due to ASU 2018-02 adoption
|
|
—
|
|
|
(280
|
)
|
|
(280
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income (loss) after tax (expense) of ($99)
|
|
—
|
|
|
342
|
|
|
342
|
|
|||
Balance at January 31, 2019
|
|
$
|
(2,238
|
)
|
|
$
|
(1,318
|
)
|
|
$
|
(3,556
|
)
|
NOTE 4
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
|
For the years ended January 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
|
$
|
3,938
|
|
|
$
|
(7,014
|
)
|
|
$
|
(5,361
|
)
|
Inventories
|
|
1,092
|
|
|
(11,062
|
)
|
|
1,215
|
|
|||
Prepaid expenses and other assets
|
|
(2,440
|
)
|
|
(2,445
|
)
|
|
228
|
|
|||
Accounts payable
|
|
(4,517
|
)
|
|
1,280
|
|
|
2,558
|
|
|||
Accrued and other liabilities
|
|
3,480
|
|
|
2,560
|
|
|
8,405
|
|
|||
|
|
$
|
1,553
|
|
|
$
|
(16,681
|
)
|
|
$
|
7,045
|
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
||||||
Cash paid during the year for income taxes
|
|
$
|
8,225
|
|
|
$
|
19,854
|
|
|
$
|
6,618
|
|
Interest paid
|
|
$
|
227
|
|
|
$
|
186
|
|
|
$
|
190
|
|
|
|
|
|
|
|
|
||||||
Significant non-cash transactions:
|
|
|
|
|
|
|
||||||
Capital expenditures and other intangibles included in accounts payable
|
|
$
|
655
|
|
|
$
|
418
|
|
|
$
|
84
|
|
Assets acquired under capital leases
|
|
$
|
38
|
|
|
$
|
79
|
|
|
$
|
—
|
|
NOTE 5
|
REVENUE
|
|
|
Revenue by Product Category
|
||||||||||||||||||
|
|
Twelve months ended January 31, 2019
|
||||||||||||||||||
|
|
ATD
|
|
EFD
|
|
AERO
|
|
ELIM(a)
|
|
Total
|
||||||||||
Lighter-than-Air
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37,866
|
|
|
$
|
—
|
|
|
$
|
37,866
|
|
International
|
|
—
|
|
|
—
|
|
|
932
|
|
|
—
|
|
|
932
|
|
|||||
Plastic Films & Sheeting
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
|
—
|
|
|
208,882
|
|
|
—
|
|
|
(512
|
)
|
|
208,370
|
|
|||||
International
|
|
—
|
|
|
17,692
|
|
|
—
|
|
|
—
|
|
|
17,692
|
|
|||||
Precision Agriculture Equipment
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
|
100,051
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
100,041
|
|
|||||
International
|
|
29,698
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,698
|
|
|||||
Other
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
|
—
|
|
|
—
|
|
|
12,062
|
|
|
—
|
|
|
12,062
|
|
|||||
International
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||
Totals
|
|
$
|
129,749
|
|
|
$
|
226,574
|
|
|
$
|
50,867
|
|
|
$
|
(522
|
)
|
|
$
|
406,668
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Twelve months ended January 31, 2018
|
||||||||||||||||||
|
|
ATD
|
|
EFD
|
|
AERO
|
|
ELIM(a)
|
|
Total
|
||||||||||
Lighter-than-Air
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24,956
|
|
|
$
|
—
|
|
|
$
|
24,956
|
|
International
|
|
—
|
|
|
—
|
|
|
93
|
|
|
—
|
|
|
93
|
|
|||||
Plastic Films & Sheeting
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
|
—
|
|
|
201,330
|
|
|
—
|
|
|
(584
|
)
|
|
200,746
|
|
|||||
International
|
|
—
|
|
|
11,968
|
|
|
—
|
|
|
—
|
|
|
11,968
|
|
|||||
Precision Agriculture Equipment
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
|
95,249
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95,249
|
|
|||||
International
|
|
29,439
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,439
|
|
|||||
Other
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
|
—
|
|
|
—
|
|
|
14,810
|
|
|
—
|
|
|
14,810
|
|
|||||
International
|
|
—
|
|
|
—
|
|
|
56
|
|
|
—
|
|
|
56
|
|
|||||
Totals
|
|
$
|
124,688
|
|
|
$
|
213,298
|
|
|
$
|
39,915
|
|
|
$
|
(584
|
)
|
|
$
|
377,317
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Twelve months ended January 31, 2017
|
||||||||||||||||||
|
|
ATD
|
|
EFD
|
|
AERO
|
|
ELIM(a)
|
|
Total
|
||||||||||
Lighter-than-Air
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,117
|
|
|
$
|
—
|
|
|
$
|
17,117
|
|
International
|
|
—
|
|
|
—
|
|
|
357
|
|
|
—
|
|
|
357
|
|
|||||
Plastic Films & Sheeting
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
|
—
|
|
|
132,704
|
|
|
—
|
|
|
(789
|
)
|
|
131,915
|
|
|||||
International
|
|
—
|
|
|
6,151
|
|
|
—
|
|
|
—
|
|
|
6,151
|
|
|||||
Precision Agriculture Equipment
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
|
76,205
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
76,204
|
|
|||||
International
|
|
29,012
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,012
|
|
|||||
Other
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic
|
|
—
|
|
|
—
|
|
|
16,631
|
|
|
—
|
|
|
16,631
|
|
|||||
International
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|||||
Totals
|
|
$
|
105,217
|
|
|
$
|
138,855
|
|
|
$
|
34,113
|
|
|
$
|
(790
|
)
|
|
$
|
277,395
|
|
|
|
January 31,
2019 |
|
January 31,
2018 |
|
$
Change
|
|
% Change
|
|||||||
Contract assets
|
|
$
|
2,027
|
|
|
$
|
3,119
|
|
|
$
|
(1,092
|
)
|
|
(35.0
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Contract liabilities
|
|
$
|
1,303
|
|
|
$
|
1,890
|
|
|
$
|
(587
|
)
|
|
(31.1
|
)%
|
NOTE 6
|
ACQUISITIONS AND INVESTMENTS IN BUSINESSES AND TECHNOLOGIES
|
|
|
For the years ended January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Beginning balance
|
|
$
|
3,046
|
|
|
$
|
1,741
|
|
Fair value of contingent consideration acquired
|
|
1,742
|
|
|
1,256
|
|
||
Change in fair value of the liability
|
|
708
|
|
|
457
|
|
||
Contingent consideration earn-out paid
|
|
(1,324
|
)
|
|
(408
|
)
|
||
Ending balance
|
|
$
|
4,172
|
|
|
$
|
3,046
|
|
|
|
|
|
|
||||
Classification of liability in the Consolidated Balance Sheets
|
|
|
|
|
||||
Accrued Liabilities
|
|
$
|
1,796
|
|
|
$
|
1,036
|
|
Other Liabilities, long-term
|
|
2,376
|
|
|
2,010
|
|
||
Ending balance
|
|
$
|
4,172
|
|
|
$
|
3,046
|
|
NOTE 7
|
GOODWILL, LONG-LIVED ASSETS, AND OTHER CHARGES
|
|
|
Applied
Technology
|
|
Engineered
Films
|
|
Aerostar
|
|
Total
|
||||||||
Balance at January 31, 2017
|
|
$
|
12,342
|
|
|
$
|
27,518
|
|
|
$
|
789
|
|
|
$
|
40,649
|
|
Additions due to business combinations
|
|
—
|
|
|
5,714
|
|
|
—
|
|
|
5,714
|
|
||||
Divestiture of business
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
|
(52
|
)
|
||||
Foreign currency translation adjustment
|
|
399
|
|
|
—
|
|
|
—
|
|
|
399
|
|
||||
Balance at January 31, 2018
|
|
12,741
|
|
|
33,232
|
|
|
737
|
|
|
46,710
|
|
||||
Additions due to business combinations
|
|
4,559
|
|
|
—
|
|
|
—
|
|
|
4,559
|
|
||||
Divestiture of business
|
|
—
|
|
|
—
|
|
|
(103
|
)
|
|
(103
|
)
|
||||
Foreign currency translation adjustment
|
|
(224
|
)
|
|
—
|
|
|
—
|
|
|
(224
|
)
|
||||
Balance at January 31, 2019
|
|
$
|
17,076
|
|
|
$
|
33,232
|
|
|
$
|
634
|
|
|
$
|
50,942
|
|
|
|
As of January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Gross goodwill
|
|
$
|
62,439
|
|
|
$
|
58,207
|
|
Accumulated impairment loss
|
|
(11,497
|
)
|
|
(11,497
|
)
|
||
Net goodwill
|
|
$
|
50,942
|
|
|
$
|
46,710
|
|
|
|
For the years ended January 31,
|
||||||||||||||||||
|
|
2019
|
|
2018
|
||||||||||||||||
|
|
|
Accumulated
|
|
|
|
Accumulated
|
|
||||||||||||
|
|
Amount
|
amortization
|
Net
|
|
Amount
|
amortization
|
Net
|
||||||||||||
Existing technology
|
|
$
|
9,203
|
|
$
|
(7,216
|
)
|
$
|
1,987
|
|
|
$
|
7,290
|
|
$
|
(6,996
|
)
|
$
|
294
|
|
Customer relationships
|
|
15,791
|
|
(5,508
|
)
|
10,283
|
|
|
13,264
|
|
(4,834
|
)
|
8,430
|
|
||||||
Patents and other intangibles
|
|
5,908
|
|
(1,885
|
)
|
4,023
|
|
|
4,241
|
|
(2,381
|
)
|
1,860
|
|
||||||
Total
|
|
$
|
30,902
|
|
$
|
(14,609
|
)
|
$
|
16,293
|
|
|
$
|
24,795
|
|
$
|
(14,211
|
)
|
$
|
10,584
|
|
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
||||||||||
Estimated amortization expense
|
|
$
|
2,425
|
|
|
$
|
2,358
|
|
|
$
|
2,300
|
|
|
$
|
2,235
|
|
|
$
|
1,711
|
|
NOTE 8
|
EMPLOYEE POSTRETIREMENT BENEFITS
|
|
|
For the years ended January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Benefit obligation at beginning of year
|
|
$
|
8,571
|
|
|
$
|
8,416
|
|
Service cost
|
|
28
|
|
|
74
|
|
||
Interest cost
|
|
316
|
|
|
312
|
|
||
Actuarial (gain) loss and assumption changes
|
|
(473
|
)
|
|
112
|
|
||
Retiree benefits paid
|
|
(441
|
)
|
|
(343
|
)
|
||
Benefit obligation at end of year
|
|
$
|
8,001
|
|
|
$
|
8,571
|
|
|
|
For the years ended January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Amounts not yet recognized in net periodic benefit cost:
|
|
|
|
|
||||
Net actuarial loss
|
|
$
|
2,114
|
|
|
$
|
2,714
|
|
Prior service cost
|
|
(413
|
)
|
|
(572
|
)
|
||
Total pre-tax accumulated other comprehensive loss
|
|
$
|
1,701
|
|
|
$
|
2,142
|
|
|
|
|
|
|
||||
Pre-tax accumulated other comprehensive loss - beginning of year related to benefit obligation
|
|
$
|
2,142
|
|
|
$
|
1,967
|
|
Reclassification adjustments recognized in benefit cost:
|
|
|
|
|
||||
Recognized net (loss)
|
|
(128
|
)
|
|
(96
|
)
|
||
Amortization of prior service cost
|
|
160
|
|
|
159
|
|
||
Amounts recognized in AOCI during the year:
|
|
|
|
|
||||
Net actuarial (gain) loss
|
|
(473
|
)
|
|
112
|
|
||
Pre-tax accumulated other comprehensive loss - end of year related to benefit obligation
|
|
$
|
1,701
|
|
|
$
|
2,142
|
|
|
|
For the years ended January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Beginning liability balance
|
|
$
|
8,571
|
|
|
$
|
8,416
|
|
Net periodic benefit cost
|
|
312
|
|
|
323
|
|
||
Other comprehensive (gain) loss
|
|
(441
|
)
|
|
175
|
|
||
Total recognized in net periodic benefit cost and other comprehensive income
|
|
(129
|
)
|
|
498
|
|
||
Retiree benefits paid
|
|
(441
|
)
|
|
(343
|
)
|
||
Ending liability balance
|
|
$
|
8,001
|
|
|
$
|
8,571
|
|
|
|
|
|
|
||||
Current portion in accrued liabilities
|
|
$
|
323
|
|
|
$
|
307
|
|
Long-term portion in other liabilities
|
|
$
|
7,678
|
|
|
$
|
8,264
|
|
|
|
|
|
|
||||
Assumptions used to calculate benefit obligation:
|
|
|
|
|
||||
Discount rate
|
|
4.25
|
%
|
|
3.75
|
%
|
||
Rate of compensation increase
|
|
4.00
|
%
|
|
4.00
|
%
|
||
Health care cost trend rates:
|
|
|
|
|
||||
Health care cost trend rate assumed for next year
|
|
6.33
|
%
|
|
6.50
|
%
|
||
Ultimate health care cost trend rate
|
|
4.50
|
%
|
|
4.50
|
%
|
||
Year that the rate reaches the ultimate trend rate
|
|
2030
|
|
|
2030
|
|
||
Assumptions used to calculated the net periodic benefit cost:
|
|
|
|
|
||||
Discount rate
|
|
3.75
|
%
|
|
4.00
|
%
|
||
Rate of compensation increase
|
|
4.00
|
%
|
|
4.00
|
%
|
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025 - 2029
|
||||||||||||
Expected postretirement medical and other benefit payments
|
|
$
|
330
|
|
|
$
|
341
|
|
|
$
|
349
|
|
|
$
|
352
|
|
|
$
|
354
|
|
|
$
|
1,888
|
|
NOTE 9
|
WARRANTIES
|
|
|
For the years ended January 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Beginning balance
|
|
$
|
1,163
|
|
|
$
|
1,547
|
|
|
$
|
1,835
|
|
Change in provision
|
|
1,449
|
|
|
1,762
|
|
|
1,597
|
|
|||
Settlements made
|
|
(1,722
|
)
|
|
(2,146
|
)
|
|
(1,885
|
)
|
|||
Ending balance
|
|
$
|
890
|
|
|
$
|
1,163
|
|
|
$
|
1,547
|
|
NOTE 10
|
INCOME TAXES
|
|
|
For the years ended January 31,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Tax at U.S. federal statutory rate
|
|
21.0
|
%
|
|
33.8
|
%
|
|
35.0
|
%
|
Impact of the Tax Cuts and Jobs Act
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
State and local income taxes, net of U.S. federal tax benefit
|
|
1.7
|
|
|
1.6
|
|
|
0.7
|
|
Tax credit for research activities
|
|
(2.3
|
)
|
|
(1.8
|
)
|
|
(3.7
|
)
|
Tax benefit on qualified production activities
|
|
—
|
|
|
(3.0
|
)
|
|
(2.8
|
)
|
Tax benefit from foreign-derived intangible income
|
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
Tax benefit on insurance premiums
|
|
(0.8
|
)
|
|
(1.3
|
)
|
|
(1.5
|
)
|
Change in uncertain tax positions
|
|
—
|
|
|
0.1
|
|
|
(0.3
|
)
|
Foreign tax rate difference
|
|
0.1
|
|
|
—
|
|
|
(0.3
|
)
|
Impact of settlement of stock-based awards
|
|
(2.4
|
)
|
|
1.2
|
|
|
—
|
|
Other, net
|
|
(0.8
|
)
|
|
—
|
|
|
0.4
|
|
Effective Tax Rate
|
|
15.7
|
%
|
|
30.5
|
%
|
|
27.5
|
%
|
|
|
For the years ended January 31, 2019
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current expense (benefit):
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
6,910
|
|
|
$
|
17,057
|
|
|
$
|
6,375
|
|
State
|
|
1,099
|
|
|
1,549
|
|
|
591
|
|
|||
Foreign
|
|
735
|
|
|
148
|
|
|
388
|
|
|||
|
|
8,744
|
|
|
18,754
|
|
|
7,354
|
|
|||
Deferred expense (benefit):
|
|
|
|
|
|
|
||||||
Federal
|
|
1,018
|
|
|
(613
|
)
|
|
330
|
|
|||
State
|
|
73
|
|
|
(13
|
)
|
|
14
|
|
|||
Foreign
|
|
(138
|
)
|
|
(161
|
)
|
|
(37
|
)
|
|||
|
|
953
|
|
|
(787
|
)
|
|
307
|
|
|||
Income tax expense
|
|
$
|
9,697
|
|
|
$
|
17,967
|
|
|
$
|
7,661
|
|
|
|
As of January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Accounts receivable
|
|
$
|
147
|
|
|
$
|
184
|
|
Inventories
|
|
1,110
|
|
|
664
|
|
||
Accrued vacation
|
|
695
|
|
|
647
|
|
||
Insurance obligations
|
|
187
|
|
|
137
|
|
||
Warranty obligations
|
|
200
|
|
|
262
|
|
||
Postretirement benefits
|
|
1,800
|
|
|
1,929
|
|
||
Uncertain tax positions
|
|
487
|
|
|
491
|
|
||
Share-based compensation
|
|
1,834
|
|
|
1,761
|
|
||
Other accrued liabilities
|
|
913
|
|
|
54
|
|
||
|
|
7,373
|
|
|
6,129
|
|
||
|
|
|
|
|
||||
Deferred tax (liabilities):
|
|
|
|
|
||||
Depreciation and amortization
|
|
(8,498
|
)
|
|
(6,082
|
)
|
||
Other
|
|
(518
|
)
|
|
(643
|
)
|
||
|
|
(9,016
|
)
|
|
(6,725
|
)
|
||
Net deferred tax (liability)
|
|
$
|
(1,643
|
)
|
|
$
|
(596
|
)
|
|
|
For the years ended January 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Gross unrecognized tax benefits at beginning of year
|
|
$
|
2,216
|
|
|
$
|
2,110
|
|
|
$
|
2,327
|
|
Increases in tax positions related to the current year
|
|
415
|
|
|
426
|
|
|
279
|
|
|||
Decreases in tax positions related to prior years
|
|
—
|
|
|
—
|
|
|
(193
|
)
|
|||
Decreases as a result of lapses in applicable statutes of limitation
|
|
(403
|
)
|
|
(320
|
)
|
|
(303
|
)
|
|||
Gross unrecognized tax benefits at end of year
|
|
$
|
2,228
|
|
|
$
|
2,216
|
|
|
$
|
2,110
|
|
NOTE 11
|
FINANCING ARRANGEMENTS
|
|
|
As of January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Unamortized debt issuance costs(a)
|
|
$
|
132
|
|
|
$
|
242
|
|
|
|
As of January 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Letters of credit outstanding(a)
|
|
$
|
514
|
|
|
$
|
1,097
|
|
|
|
For the years ended January 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Amortization expense
|
|
$
|
200
|
|
|
$
|
65
|
|
|
$
|
—
|
|
Interest expense
|
|
39
|
|
|
13
|
|
|
—
|
|
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
||||||||||||
Minimum lease payments
|
|
$
|
2,213
|
|
|
$
|
1,939
|
|
|
$
|
728
|
|
|
$
|
356
|
|
|
$
|
140
|
|
|
$
|
—
|
|
NOTE 12
|
COMMITMENTS AND CONTINGENCIES
|
NOTE 13
|
SHARE-BASED COMPENSATION
|
|
|
For the years ended January 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Share-based compensation cost
|
|
$
|
3,951
|
|
|
$
|
3,725
|
|
|
$
|
3,071
|
|
Tax benefit
|
|
736
|
|
|
1,275
|
|
|
1,103
|
|
|
|
For the years ended January 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Risk-free interest rate
|
|
2.51
|
%
|
|
1.68
|
%
|
|
1.05
|
%
|
|||
Expected dividend yield
|
|
1.48
|
%
|
|
1.78
|
%
|
|
3.33
|
%
|
|||
Expected volatility factor
|
|
35.20
|
%
|
|
33.87
|
%
|
|
32.61
|
%
|
|||
Expected option term (in years)
|
|
4.25
|
|
|
4.25
|
|
|
4.00
|
|
|||
|
|
|
|
|
|
|
||||||
Weighted average grant date fair value
|
|
$
|
9.83
|
|
|
$
|
7.35
|
|
|
$
|
3.05
|
|
|
|
Number
of options |
|
Weighted average exercise price
|
|
Aggregate intrinsic value
|
|
Weighted
average remaining contractual term (years) |
|||||
Outstanding, January 31, 2018
|
|
702,950
|
|
|
$
|
22.34
|
|
|
|
|
|
||
Granted
|
|
55,810
|
|
|
35.05
|
|
|
|
|
|
|||
Exercised
|
|
(390,630
|
)
|
|
23.48
|
|
|
|
|
|
|||
Outstanding, January 31, 2019
|
|
368,130
|
|
|
$
|
23.06
|
|
|
$
|
5,130
|
|
|
2.41
|
|
|
|
|
|
|
|
|
|
|||||
Outstanding exercisable, January 31, 2019
|
|
70,545
|
|
|
$
|
23.08
|
|
|
$
|
981
|
|
|
1.71
|
|
|
|
|
|
|
|
|
|
|||||
Options vested, or expected to vest, January 31, 2019
|
|
368,130
|
|
|
$
|
23.06
|
|
|
$
|
5,130
|
|
|
2.41
|
|
|
Number
of restricted stock units |
|
Weighted
average grant date fair value per share |
|||
Outstanding, January 31, 2018
|
|
146,849
|
|
|
$
|
21.81
|
|
Granted
|
|
49,438
|
|
|
35.15
|
|
|
Vested
|
|
(26,510
|
)
|
|
19.34
|
|
|
Forfeited
|
|
(3,752
|
)
|
|
25.72
|
|
|
Outstanding, January 31, 2019
|
|
166,025
|
|
|
$
|
26.09
|
|
|
|
|
|
|
|||
Cumulative dividends, January 31, 2019
|
|
5,547
|
|
|
|
|
|
Number
of restricted stock units expected to vest |
|
Weighted
average grant date fair value per share |
|||
Outstanding, January 31, 2018
|
|
179,729
|
|
|
$
|
19.40
|
|
Granted
|
|
23,213
|
|
|
35.05
|
|
|
Vested
|
|
(44,091
|
)
|
|
20.10
|
|
|
Forfeited
|
|
(795
|
)
|
|
31.30
|
|
|
Performance-based adjustment
|
|
6,244
|
|
|
30.37
|
|
|
Outstanding, January 31, 2019
|
|
164,300
|
|
|
$
|
22.44
|
|
|
|
|
|
|
|||
Cumulative dividends, January 31, 2019
|
|
4,581
|
|
|
|
|
|
For the years ended January 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Weighted average grant date fair value: time-based RSUs
|
|
$
|
35.15
|
|
|
$
|
29.33
|
|
|
$
|
15.94
|
|
Weighted average grant date fair value: performance-based RSUs
|
|
$
|
35.05
|
|
|
$
|
29.20
|
|
|
$
|
15.61
|
|
|
|
Number
of stock units |
|
Weighted
average price |
|||
Outstanding, January 31, 2018
|
|
87,614
|
|
|
$
|
19.35
|
|
Granted
|
|
13,713
|
|
|
39.25
|
|
|
Deferred retainers
|
|
2,560
|
|
|
39.05
|
|
|
Dividends
|
|
1,338
|
|
|
38.99
|
|
|
Outstanding, January 31, 2019
|
|
105,225
|
|
|
$
|
22.67
|
|
NOTE 14
|
NET INCOME PER SHARE
|
|
|
For the years ended January 31,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
Anti-dilutive options and restricted stock units
|
|
54,631
|
|
|
344,774
|
|
|
884,099
|
|
|
|
For the years ended January 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator:
|
|
|
|
|
|
|
||||||
Net income attributable to Raven Industries, Inc.
|
|
$
|
51,794
|
|
|
$
|
41,022
|
|
|
$
|
20,191
|
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding
|
|
35,907,041
|
|
|
35,945,225
|
|
|
36,142,416
|
|
|||
Weighted average stock units outstanding
|
|
99,922
|
|
|
104,980
|
|
|
100,019
|
|
|||
Denominator for basic calculation
|
|
36,006,963
|
|
|
36,050,205
|
|
|
36,242,435
|
|
|||
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding
|
|
35,907,041
|
|
|
35,945,225
|
|
|
36,142,416
|
|
|||
Weighted average stock units outstanding
|
|
99,922
|
|
|
104,980
|
|
|
100,019
|
|
|||
Dilutive impact of stock options and RSUs
|
|
431,595
|
|
|
399,620
|
|
|
129,480
|
|
|||
Denominator for diluted calculation
|
|
36,438,558
|
|
|
36,449,825
|
|
|
36,371,915
|
|
|||
|
|
|
|
|
|
|
||||||
Net income per share - basic
|
|
$
|
1.44
|
|
|
$
|
1.14
|
|
|
$
|
0.56
|
|
Net income per share - diluted
|
|
$
|
1.42
|
|
|
$
|
1.13
|
|
|
$
|
0.56
|
|
NOTE 15
|
BUSINESS SEGMENTS AND MAJOR CUSTOMER INFORMATION
|
|
|
For the years ended January 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Canada
|
|
$
|
12,492
|
|
|
$
|
12,940
|
|
|
$
|
13,969
|
|
Europe
|
|
15,786
|
|
|
13,864
|
|
|
13,924
|
|
|||
Latin America
|
|
5,950
|
|
|
4,439
|
|
|
3,402
|
|
|||
Asia
|
|
7,240
|
|
|
4,074
|
|
|
1,535
|
|
|||
Other foreign sales
|
|
6,861
|
|
|
6,239
|
|
|
2,698
|
|
|||
Total foreign sales
|
|
48,329
|
|
|
41,556
|
|
|
35,528
|
|
|||
United States
|
|
358,339
|
|
|
335,761
|
|
|
241,867
|
|
|||
|
|
$
|
406,668
|
|
|
$
|
377,317
|
|
|
$
|
277,395
|
|
NOTE 16
|
QUARTERLY INFORMATION (UNAUDITED)
|
|
Net Sales
|
Gross Profit
|
Operating Income
|
Pre-tax Income
|
Net Income Attributable to Raven(d)
|
Net Income Per Share(a)
|
|
Cash Dividends Per Share
|
||||||||||||||||||
|
||||||||||||||||||||||||||
Basic
|
Diluted
|
|
||||||||||||||||||||||||
FISCAL 2019
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
First Quarter(b)(c)(e)(f)
|
$
|
111,129
|
|
$
|
39,998
|
|
$
|
21,531
|
|
$
|
27,210
|
|
$
|
22,135
|
|
$
|
0.62
|
|
$
|
0.61
|
|
|
$
|
0.13
|
|
|
Second Quarter(c)
|
102,684
|
|
34,608
|
|
16,629
|
|
16,490
|
|
13,677
|
|
0.38
|
|
0.38
|
|
|
0.13
|
|
|||||||||
Third Quarter(c)(e)
|
104,833
|
|
32,653
|
|
13,612
|
|
14,286
|
|
13,032
|
|
0.36
|
|
0.36
|
|
|
0.13
|
|
|||||||||
Fourth Quarter(e)
|
88,022
|
|
25,290
|
|
3,361
|
|
3,584
|
|
2,950
|
|
0.08
|
|
0.08
|
|
|
0.13
|
|
|||||||||
Total Year
|
$
|
406,668
|
|
$
|
132,549
|
|
$
|
55,133
|
|
$
|
61,570
|
|
$
|
51,794
|
|
$
|
1.44
|
|
$
|
1.42
|
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
FISCAL 2018
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
First Quarter(c)
|
$
|
93,535
|
|
$
|
31,956
|
|
$
|
18,219
|
|
$
|
17,989
|
|
$
|
12,348
|
|
$
|
0.34
|
|
$
|
0.34
|
|
|
$
|
0.13
|
|
|
Second Quarter(c)
|
86,610
|
|
26,513
|
|
11,700
|
|
11,637
|
|
8,235
|
|
0.23
|
|
0.23
|
|
|
0.13
|
|
|||||||||
Third Quarter(c)(e)
|
101,349
|
|
33,333
|
|
17,829
|
|
17,795
|
|
11,998
|
|
0.33
|
|
0.33
|
|
|
0.13
|
|
|||||||||
Fourth Quarter(e)
|
95,823
|
|
29,763
|
|
11,422
|
|
11,565
|
|
8,441
|
|
0.24
|
|
0.23
|
|
|
0.13
|
|
|||||||||
Total Year
|
$
|
377,317
|
|
$
|
121,565
|
|
$
|
59,170
|
|
$
|
58,986
|
|
$
|
41,022
|
|
$
|
1.14
|
|
$
|
1.13
|
|
|
$
|
0.52
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 17
|
SUBSEQUENT EVENTS
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
Exhibit
Number
|
|
Description
|
|
|
|
|
Asset Purchase Agreement by and among Colorado Lining International, Inc., John B. Heap, Patrick Elliott, and Raven Industries, Inc., dated as of August 22, 2017 (incorporated herein by reference to Exhibit 2.1 of the Company's Form 10-Q filed November 21, 2017.
|
|
|
|
|
|
Restated Articles of Incorporation of Raven Industries, Inc. and all amendments thereto dated as of December 12, 2018 and filed herewith as Exhibit 3.1.
|
|
|
|
|
|
Amended and Restated Bylaws of Raven Industries, Inc. (incorporated herein by reference to Exhibit B of the Company's definitive Proxy Statement filed April 12, 2012).
|
|
|
|
|
|
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). †
|
|
|
|
|
|
Amended and Restated 2010 Stock Incentive Plan adopted May 25, 2017 (incorporated herein by reference to Exhibit A of the Company’s definitive Proxy Statement filed April 19, 2017). †
|
|
|
|
|
|
Form of Non-Qualified Stock Option Agreement (incorporated herein by reference to Exhibit 10(r) of the Company's Form 10-Q filed June 4, 2012). †
|
|
|
|
|
|
Form of Restricted Stock Unit Agreement (incorporated herein by reference to Exhibit 10(s) of the Company's Form 10-Q filed June 4, 2012). †
|
|
|
|
|
|
Raven Industries, Inc. Non-Qualified Deferred Compensation Plan, effective as of January 1, 2018 (incorporated herein by reference to Exhibit 10.1 of the Company's Form 10-K filed March 23, 2018). †
|
|
|
|
|
|
Credit Agreement, dated April 15, 2015, by and among Raven Industries, Inc. and JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent, JPMorgan Chase Bank National Association, as Administrative Agent, and JP Morgan Securities LLC and Wells Fargo Securities, LLC as Joint Bookrunners and Joint Lead Arrangers (incorporated herein by reference to Exhibit 10.1 of the Company's Form 8-K filed April 16, 2015).
|
|
|
|
|
|
Guaranty, dated as of April 15, 2015, made by each of the Guarantors (Raven Industries, Inc., Aerostar International, Inc., Vista Research, Inc., and Integra Plastics, Inc.) in favor of JPMorgan Chase Bank, N.A. as Administrative Agent on behalf of the guaranteed parties (incorporated herein by reference to Exhibit 10.2 of the Company's Form 8-K filed April 16, 2015).
|
|
|
|
|
|
Amended and Restated Employment Agreement between Raven Industries, Inc. and Daniel A. Rykhus dated as of March 29, 2017 (incorporated herein by reference to Exhibit 10.1 of the Company's Form 10-K filed March 31, 2017). †
|
|
|
|
|
|
Amended and Restated Employment Agreement between Raven Industries, Inc. and Steven E. Brazones dated as of March 29, 2017 (incorporated herein by reference to Exhibit 10.2 of the Company's Form 10-K filed March 31, 2017). †
|
|
|
|
|
|
Form of Amended and Restated Change in Control Agreement between Raven Industries, Inc. and the following senior executive officers: Anthony D. Schmidt, Brian E. Meyer, and Janet L. Matthiesen dated as of March 28, 2016 (incorporated herein by reference to Exhibit 10.1 of the Company's Form 10-K filed March 29, 2016). †
|
|
|
|
|
|
Form of Amended Employment Agreement between Raven Industries, Inc. and the following senior executive officers: Brian E. Meyer and Janet L. Matthiesen dated August 25, 2015 (incorporated herein by reference to Exhibit 10.1 of the Company's Form 8-K filed August 31, 2015). †
|
|
|
|
|
Employment Agreement between Raven Industries, Inc. and Anthony D. Schmidt dated as of February 1, 2012 (incorporated herein by reference to Exhibit 10.1 of the Company's Form 8-K filed February 1, 2012). †
|
|
|
|
|
|
Form of Schedule A to Employment Agreement, revised effective January 1, 2016, between Raven Industries, Inc. and the following senior executive officers: Janet L. Matthiesen, Brian E. Meyer, and Anthony D. Schmidt (incorporated herein by reference to Exhibit 10.3 of the Company's Form 10-K filed March 31, 2017). †
|
|
|
|
|
|
Letter of PricewaterhouseCoopers LLP to the Securities and Exchange Commission, dated as of April 6, 2017, (incorporated herein by reference to Exhibit 16.1 of the Company's Form 8-K filed April 6, 2017).
|
|
|
|
|
|
Subsidiaries of the Registrant.
|
|
|
|
|
|
Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
|
|
|
|
|
|
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.
|
|
|
|
|
|
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
|
|
|
|
†
|
|
Management contract or compensatory plan or arrangement.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
SIGNATURES
|
|||
|
|
|
|
SIGNATURES
|
|
|
|
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|||
|
|
|
|
RAVEN INDUSTRIES, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
By: /s/ DANIEL A. RYKHUS
|
|
|
|
Daniel A. Rykhus
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
Date: March 22, 2019
|
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
|
||
|
|
|
/s/ DANIEL A. RYKHUS
|
|
/s/ THOMAS S. EVERIST
|
Daniel A. Rykhus
|
|
Thomas S. Everist
|
President and Chief Executive Officer
|
|
Director
|
(principal executive officer) and Director
|
|
|
|
|
|
|
|
|
/s/ STEVEN E. BRAZONES
|
|
/s/ JANET M. HOLLOWAY
|
Steven E. Brazones
|
|
Janet M. Holloway
|
Vice President and Chief Financial Officer
|
|
Director
|
(principal financial and accounting officer)
|
|
|
|
|
|
|
|
|
/s/ MARC E. LEBARON
|
|
/s/ KEVIN T. KIRBY
|
Marc E. LeBaron
|
|
Kevin T. Kirby
|
Chairman of the Board
|
|
Director
|
|
|
|
|
|
|
/s/ JASON M. ANDRINGA
|
|
/s/ LOIS M. MARTIN
|
Jason M. Andringa
|
|
Lois M. Martin
|
Director
|
|
Director
|
|
|
|
|
|
|
/s/ DAVID L. CHICOINE
|
|
/s/ RICHARD W. PAROD
|
David L. Chicoine
|
|
Richard W. Parod
|
Director
|
|
Director
|
|
|
|
|
|
|
|
|
Date: March 22, 2019
|
|
|
Additions
|
|
|
|||||||||||
Description
|
Balance at
Beginning
of Year
|
Charged to
Costs and
Expenses
|
Charged to
Other
Accounts
|
Deductions
From
Reserves (1)
|
Balance at
End of Year
|
||||||||||
Deducted in the balance sheet from the asset to which it applies:
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts:
|
|
|
|
|
|
||||||||||
Year ended January 31, 2019
|
$
|
978
|
|
$
|
37
|
|
$
|
—
|
|
$
|
276
|
|
$
|
739
|
|
Year ended January 31, 2018
|
691
|
|
357
|
|
—
|
|
70
|
|
978
|
|
|||||
Year ended January 31, 2017
|
1,034
|
|
380
|
|
—
|
|
723
|
|
691
|
|
(1)
|
Represents uncollectable accounts receivable written off during the year, net of recoveries.
|
RAVEN INDUSTRIES, INC.
|
||
SUBSIDIARIES OF THE REGISTRANT
|
||
|
|
|
NAME OF SUBSIDIARY
|
|
JURISDICTION
|
|
|
|
Aerostar Integrated Systems, LLC (a)
|
|
Delaware, USA
|
|
|
|
Aerostar International, Inc.
|
|
South Dakota, USA
|
|
|
|
Raven Industries Canada, Inc.
|
|
Nova Scotia, Canada
|
|
|
|
Raven International Holding Company B.V.
|
|
Amsterdam, Netherlands
|
|
|
|
Raven CLI Construction, Inc.
|
|
South Dakota, USA
|
|
|
|
SBG Innovatie BV
|
|
Middenmeer, Netherlands
|
|
|
|
Aerostar Technical Solutions, Inc.
|
|
California, USA
|
|
|
|
|
|
|
(a) 75% owned
|
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Raven Industries, Inc. (the Registrant);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
|
5.
|
The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of Registrant's board of directors (or others performing the equivalent function):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls over financial reporting.
|
Dated: March 22, 2019
|
/s/ DANIEL A. RYKHUS
|
|
Daniel A. Rykhus
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Raven Industries, Inc. (the Registrant);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and
|
5.
|
The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of Registrant's board of directors (or others performing the equivalent function):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls over financial reporting.
|
Dated: March 22, 2019
|
/s/ STEVEN E. BRAZONES
|
|
Steven E. Brazones
|
|
Vice President and Chief Financial Officer
|
•
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
•
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Raven Industries, Inc.
|
Dated: March 22, 2019
|
/s/ DANIEL A. RYKHUS
|
|
Daniel A. Rykhus
|
|
President and Chief Executive Officer
|
•
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
•
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Raven Industries, Inc.
|
Dated: March 22, 2019
|
/s/ STEVEN E. BRAZONES
|
|
Steven E. Brazones
|
|
Vice President and Chief Financial Officer
|
|
|