RAVN - Earnings call transcript Q4 2021

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Raven Industries Inc. Fiscal Year 2021 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers presentation there will be a question-and-answer session. now today, hand Manager. Jared would to conference I speaker your Stearns, Instructions] like the to over [Operator Investor Relations you. Thank Please go ahead, sir.

Jared Stearns

year-end future will also welcome Industries' archived on call and the Web be being investor site company's XXXX for is and morning, Today's conference live, Good webcast the call. listening. to fiscal Raven

President President Larsen, and of Development; Brazones, and Taimur Officer; On today be will Executive Stroschein, Steven Lon the Technology; and Finance. Officer; Dan Raven's Applied Chief and Vice Executive call Division Corporate Financial Vice Rykhus, Director Raven's President of Chief Sharih, Director of Bo

Securities Before during Reform XXXX. to this beginning, inform Act as like include discussed will Private matters statements, forward-looking certain defined Litigation the call is would that of everyone company term that the under

current Officer. reflect to call the expectations, results statements to now Executive may over would such, the Chief differ. like Raven's actual I As turn Dan Rykhus, company's

Dan Rykhus

team morning look and I joining start A and critical I lead pandemic. as of the leadership you. for impacts And addressing global thank want all quickly recapping Thanks, FY'XX started throughout with and response our to Jared. pandemic. QX by forward Good how performance the ago, you through We to and my performance to in, today. us established the pandemic the objectives priorities, and set would essential the for year and our Raven

team of we focus the and primary adopted for Our priorities our company. members strategic year. In the wellbeing and of four health our April XXXX, became

our dimension model, values, the priority which was of way, as decision to our and first and competition, preserve business making. Raven The uphold these guide consists

focus capital on a flows generating placed through management. an strong on enhanced cash We emphasis working also

One move, team, the preserving bold product of long-term year in investment priorities. Fourth, our prioritized of proud later, strength will responded initiative on the Raven drive our lines, our of team our our I'm divisions focused in way these growth. growth Autonomy, that three our a continued and on by and we strategic our relationships. ensuring very in the unwavering substantial customer we all Additionally, executed and core

members resiliency, one another outside pivot our contract gowns to the compassion for and pandemic. is inside to ingenuity, locally showed and by evidenced the response. for pandemic This company throughout a Raven produce and FEMA quick with Our along team personnel of medical fulfilling the throughout PPE aid in for and Midwest, compassion

discussing position like to confident focus, Larsen to opportunities. in growth in both growth to over will with call key Bo long-term profit turn drivers. operational financial growth the revenue our we And businesses, the In have great we fiscal challenge Our discuss learned building significant a and these XXXX growth, our year team spite results. again, be Raven Autonomy, platforms markets fiscal stronger. strength, significant a and strong are for key while technology substantial, aggressively minutes, in again deliver a Lon and investing Thunderhead, advancements and and and are company. to in long-term our meet a long-term will our the made deal us Raven drive With growth pandemic-related remains in the But of composites rose the Thunderhead, strategic across on very I lessons and will In on near-term in to Raven further. out those and Raven say core this, change discipline, also and up we've made growth, further autonomy Steven challenges, to Composites, and developing XXXX, our I'd immediate our deliver in but few while the opportunities of operations. financial these ability step also these that, our

Bo Larsen

you, Thank Dan.

executed all throughout company As of that how our XXXX, Dan and fiscal mentioned, we QX, includes performance. are and the of financial proud

position industry-leading of year, some fourth $XX $XX led $XX year, are and Raven by the over division we growth. flow of Applied increased drive million cash these Autonomy, control This from we our facing cash in DOT, In the OEM our remaining increased the challenges operations, in investing growth while technology in throughout both voting internationally. leveraged markets. of generated In and the acquiring domestically million. fundamentals cash and over end significantly Technology, year-over-year the million and was channel, capital This impacted customer investing in fiscal and which market strong. achieved strengths and by quarter expenditures, the in aggressively the pandemic-related our During sales our growth was to extremely in while demand

demand, quarter, commodity aggressively and for fiscal down and strong Despite our and market, to serve. gain were markets to throughout step the million an levels for to building our adjusting division's in despite customers long-term Oil improving submarket invest to in the drive constraints and the a even growth, prices revenues [ATD's] in strong three than improved have Raven operations stronger In with within we of included, fourth aid of significantly our helped year, continued production a supply approximately better generation, contract fulfilling Autonomy XXXX. XXXX. capital we industrial but faced Films the in year. within processes to the by installation previous market lower the counts in underlying share fiscal rig change film unprecedented pandemic. XXXX pandemic led end drive an about challenges for much chain in and maintained energy biggest accomplishments further FEMA the the prices the for conditions to and profitability with $X.X leading a We production serve year-over-year challenges challenges, in market increase sharp Engineered fiscal right the brought and Out confidence our decline divisions, sales counts networking [Ph] cash the response, the This XX% services.

resulted optimism for providing demand, in months rebound conditions a market improving in forward, past strong XXXX. Looking over increased the fiscal few have

Films' Turning Fiscal Defense impacted fiscal progress fiscal XXXX for Systems. in decline advancing impact our From made travel Department was approximately in flight generated both decline restrictions, year-over-year Thunderhead EPS we XXXX, delivering year-over-year of of in to an Raven variety Aerostar, revenue committed we Balloon revenue when and discussion negative operating excluding and sales limited volume, opportunities of in by I turn corresponding Raven years. With which would demonstrating we Steven that, and over fiscal driven remain to and applications. On technology saw primarily was and call radar X% challenges, technology year-over-year diluted Brazones decrease the consolidated Engineering performance Autonomy. $X.XX from industry-leading to of of significant further stratospheric perspective, our a earnings led and on performance the decline we to XXXX division technology, Despite in Autonomy for for to to industry-leading in leverage. those compared the profitability. basis, has $X.XX the solutions This XXXX. a by use like

Steven Brazones

be Thank of excited few inspired Division I of or Vice you, over part impressive as took more a I Bo. to team. more President months be and ATD a couldn't this ago, only

units market advance to for and progress have in started we demonstrations Raven development introduction recently providing AutoCart's and autonomous while Field begin this next Autonomy several out the ahead made be of harvest will the we have In solutions. summer, take our season. for the first continue the of integration orders. have We demonstrations preparation customers, and orders production already months, shipped to of received through

in runtime. critical and for And we we testing, toward and performance, market covered the progressing extremely have conducted acres The later been meeting DOT, interest For strong. milestones extensive product has launch field year. validation are this

market We done for to strong of a capacity fiscal focused continues remain on transforming our OEMs solutions our largest delivering wanting while receive partners investment needs substantial to also around on made to out autonomous the our total generations to to from through are opportunity The semiautonomous the way working demand more equipment by to -- has the as solutions of the And me, are our to excuse with And Raven other our We on requests substantial. is and address us technology. this expect next capacity sell capitalize as we and technology companies farming. change company technology is than regularly Xx. in to potential progress to current partner we our grow. XXXX. we addressable the work expand delivering fully is are world. manufacturing position of The execute in leadership in opportunities. with we position growth potential agriculture technology the ever the farming autonomous expands We Ag Autonomy and the in

Composites Stroschein and like turn the Next over to discuss up, Lon? would to Thunderhead. Raven Raven to I Lon call

Lon Stroschein

films addressable our market of the Raven Thank growing the films rigid move division In the way applied you, propels same technology for and Autonomy composites our value expands markets. engineered adjacent Steven. technology, By high integrating weight paintable also for composites, into printable into ways This from division in strategy engineered margin a for COVID will this films surface grew impacted year. market different to with within significantly. the the light strong allow people addressable high generate growth us rigid opportunities. different

sales months For films deep an meeting appreciation build experience better to was in no spend me, for engineered organization. eight to opportunity or Raven our greater Composites. it created a There

and proprietary introducing building held in strategy existing focused our most on operations such to strategy hold production strategy of grow year, acquisition by rigid with leverages our acquisition pandemic, Throughout was fiscal lamination. slowed we Virginia substantial. activity solution capability the Raven in moving that also strategy. transportation XXXX. then films Raven the through bolding new strategic within remained propel recreational in we pandemic Waynesboro, the and And investments we markets we continue capabilities, and We our high research The third Despite manufacturing and growth our to as materials developing investing expertise we rigid on solutions combine value delivering opportunity Composite our is Raven This acquisition Composites a extrusion look composites and as stronger however, in Our put and composites expertise perusing fourth and preserve certain and composites And to cash. in quarters surface resumed to in platform vehicles. our forward for 'XX. Composite leverage in activity. of will lighter, our thinner, this development, products while opportunities forward, facility fiscal the to to of

Aerostar XX surveillance, 'XX. Raven while persistent Thunderhead, year fiscal piloting days to another flight platform areas Thunderhead for the of duration record customer and earlier Raven our communications We Raven in achieved balloon stratospheric also progressed of interest. autonomously now significantly this designated platform Moving of

significant campaign with Department of the the a Defense a functionality and demonstrated Defense We wartime capabilities platform Guam, Thunderhead use momentum Department of to of conducted within persistent during also which the The multi-flight in simulation. on stratospheric for necessary investments the opportunities capitalize continue to make enhance technology is over like to I positioning growing. And back our turn we call to will Thunderhead. Dan, you. to to would

Dan Rykhus

months can our Thank you, a confident we I long-term why Technology. the gears, President new and I move asked few hope Lon. Vice Steven Applied investments in see Brazones into as Division a growth. ago to role Switching you for still are

I division. of exceptional and company lead drive been executive initiated in Applied has to Technology a past Vice technology. Over and decision past The six a started experience the over our industries, an led today. and years a and as substantial variety applied growth. of our Taimur? Taimur very him Taimur move to us period President to for experience he Steven's a for leader year, repositioned With leader and excited adding accelerated plan right culture. brings talent also the be the is Steven this of for execution, new And and growth CFO. great as role trajectory has the and division business wealth we across senior our the favorably to fit as have a for lead organizations which this during Sharih substantial am Steven's team ideal growth have and making CFO. strategic will bold financial a our to the needed has

Taimur Sharih

Dan. you, Thank

the three shareholder to very strong key flow Raven sheet foundational spent great solve first was exceptional I've an capability. throughout very success and any solve a out step strategy. And or time they All to leadership, healthy detail. senior change of whether has opportunities in and I leverage forward me that elements And members company balance in I margin are team passion, out challenges the cash value. attention a in few helping sales, to our to the capitalize be company with I with things these significant profile, from look generation the of with to these see generate growth organization, weeks this that first Raven's to on drive One production, and commitment the of in when mission drive challenges. great to trends us, jumped engineering, carried and front being joined the

Dan Rykhus

Thank you, Taimur.

one strong we expect same have fiscal for across U.S. the soybean we the created since we decade. markets at demand have highest of U.S. corn fundamentals Technology, increasing. grain prices XXXX prices serve. Looking In true in incomes XXXX, in in markets of remain particularly robust Technology, and in is most the their This underlying demand the much Films. last Commodity above strongest is the and substantially China's Engineered of level and the five-year Applied average. farm reached XXXX Applied and market Ag rising

solve division seeing perform can the presence today. our lines know excellent factors high investments product when but That combined a Like the supply the we and Ag have is satisfy the from from industries to companies international operational to to OEMs the globe, and division's and forecast Ag order in well constraints larger record demand, an have technology for are America. challenging Ag of products, for those market demand working positioned And that led strength team along to Applied North retailers related across equipment all I strong year. well order volume our these our with pandemic my how our volume, other challenges. deliver solutions. this Technology new many we're in result ability of seen experience we've chain with addition, this earn efficiencies, In diligently

the grow. received and Customer in-field units demonstrations for to product cases our Overall, technology. of of us continues autonomous partner wanting expand position to release. the encouraging manufacturing year we've number Autonomy, orders XX is AutoCart advanced and extremely on been for we our and to sell AutoCart purchase market power many Films the Related Raven fiscal autonomous to this as XX response and commercialization autonomous investments The to fast has be establish advance continue As encouraging $XX use underway loss we XXXX. impacts production up market. revenue of and to Raven this $XX fiscal Dot, will investments fiscal expect XXXX to in this this COVID-XX is capacity channels. is intend the to bring of our of with we revolutionary solution excitement year solutions for us to Raven Autonomy. out platform, In very in Engineered caused our of our we distribution first emboldens million offerings to to limited first step XXXX the companies in the and over pandemic million surrounding opportunities sell

we as markets this to Looking a of show and forward year. XXXX, divisions expect fully as with to rebound sequential fiscal the of to continue acceleration progress through improvement all expectations the we

and EFD facing challenges films rising the of all resin producers is prices. One

pass on of the some federal advanced margins. Aerostar, we highly with and ability will pursue and advance solutions our variety to In we a technically technology pricing continue radar us as technology maintain our products strong and agencies applications. in our government to contracts capabilities opportunities of for volatility engineered provide use However, stratospheric and and

to execute solve meet Our of is the solve to challenges world. our evolving to as we growth challenges, Autonomy, our long Composites technology company's This a driving Raymond and a plan across and purpose of Thunderhead. business dynamic force challenges great desire history the successful have Raven is Raven we and bold

our comments. the Thank in grow to and operator And customer opportunities year, the me capitalize technology, prepared relationships, business ask this I'd activity our concludes questions. our tremendous front great and give for to on the And of to open order call ability us. in up our confidence Our you. strong this

Operator

[Operator of Instructions] Securities. Moore Our first CJS Chris line question from comes from the

Your line is now open.

Chris Moore

[Ph] during between timeframe? for what calendar Thanks we'll Hey, maybe a guys. autonomous bit autonomous, good to and you the more morning, the few looking Maybe can milestones of important that rollout just that XXXX, start the there about [AutoCart] achieve a summer, are the you're questions. are talk fall taking this little -- rollout on

Steven Brazones

Chris, Steven. morning. Good is Sure. this

So, that our testing right in doing orders fall of in the is harvest now beginning been of and we've of here And on North in customer 'XX. the the sell season, AutoCart. taking expectation throughout this year to America. in midst in now right demonstrations release anticipation year fiscal we're XX limited units And this

So response and the the from the for seeing we're us, hitting that customers our expected And to hit. we've we're has dealers been from milestones tremendous. that

limited have. to we fall customer got year, expect the And that to and by midst There finalizing And that, preparing this out by and capacity With we've and base from so launch. DOT, capacity has of the DOT, a tremendous too, AutoCart. we're encouraged we're sell respect production really orders, to for that respect with we response our testing and in significant. the the been emboldened of

too, we're in to million expect expecting the Autonomy So from we're be would in about I a year. FY'XX, hitting milestones Overall, ramp revenue fiscal to substantial 'XX. path hit contributed this to of $X a that there on Raven

time really Autonomy. So, right exciting for now Raven

Chris Moore

the kind at that delayed Obviously on it Got bit Films going should strategic view Day, was by second. about talked Composites' 'XX? there it, talk little timeframe. gears of November plan year. kind maybe a the as how heavily of a that composites should being Obviously, that's a the I on by you during expansion out composites, helpful. COVID. laid didn't for And But Maybe happen. about acquisitions strategic to as R&D in know impacted plan Engineered just was Investor switch was we as we view

Dan Rykhus

one? this handle to want you Lon, Yes,

Lon Stroschein

acquisitions. Composites doubt, set as it hit of parts Composites' developing the that's relates up Hey, as pause our Raven strategy it back the other turn we our this There's year, as manufacturing is there we now, marry COVID were relates the to to own strategy when recently, in, no composites to we to, of our Raven Chris, some certainly, then and on going continued products film, on But absolutely. Yes, investment And Stroschein. we with anticipate in. invest laminating Lon of the more capability in some the having that to them. later

seeing anticipate year. about So, we year, but this delayed absolutely a it's by revenue been in

Chris Moore

Got it, I in line. that's it, All jump I'll guys. back helpful. right, appreciate

Dan Rykhus

You bet.

Operator

you. Thank

line Our next Oppenheimer. question comes from Owen of the from Kristen

open. now is line Your

Kristen Owen

question. I to morning. good my want follow-up growth you on Hi, just Autonomy. the a on platform. taking for the Thank commentary of appreciate And all

talked some these later in in accelerating about support that the to we the fiscal there 'XX? spend You about think of the million to in How launches Autonomy year. spent comparing should $XX

Taimur Sharih

This we're million invest Good Kristen. $XX expecting into Autonomy. year, Sure. morning, approximately to Raven

to investment respect almost with marketplace. particularly calls fiscal this on partner So, seeing say a given right increasing just technology the that in we're to with in basis path participants, that the the primarily 'XX, and our that from lot Autonomy, also a Raven confidence the year on of the us bring who what to we have and that are opportunities we're you -- us the with continuous giving to industry investment looking

So, we million Autonomy. 'XX a would Raven in about expect have FY $XX to investment

Kristen Owen

spraying these economic And gain of technology in share helpful. as and to core to of we what that's benefits this the should platform, turn the OEMs, talk start more the spraying, we about opportunity call about think we're you. OEMs precision focus their to and Raven that how on, a on focusing you're both core what business, more of of of then, and applications the will area? attention terms maybe Thank you sort can seeing environmental Okay, on by just

Dan Rykhus

Sure.

very our referring from we're think industry-leading in you're nicely with very the Application Technology. is standpoint itself X marketplace, I what enviable technology lends System, Hawkeye So, Gen which Spot-Spray technology to, to in for position us, a Control a

got we've of a very we the at and systems So, boom the in spot-spray controls, perform controls, sprayer high-level, application to the have the all environment. make a

with into will units that a that of in and Hawkeye potential number so, marketplace 'XX bring in space FY 'XX additional And beyond. in globally partners allow conversations the to and us we're

Kristen Owen

the We'll much. so thank Great, you offline. rest take

Dan Rykhus

you. Thank

Operator

Thank you.

Klieve comes Lakestreet from Our next Markets. of from question Capital the Ben line

line now Your is open.

Ben Klieve

taking for thanks my right, All questions.

couple that from housekeeping in delivered the a just First, then you in revenue couple on you basis the and items of segment, questions, parted can customer the break was picture a full-year down quarter ways quick Applied that a the fourth big with? Technology

Taimur Sharih

we quarter, exit compares by quarter the $X with prior so million. to last time Yes, million of fourth did in about the about fourth that year $X that

growth at million. if look sales performance last that look in So XX%. time of about rate compares that did for by million about activity, and customer at underlying you When the of same full-year, the division, $X we the the you $XX the prior-year about was

Ben Klieve

or issues the on and you of the exclusively, And more? Aerostat seems the I looks effect conclusion renewal contract perfect. Aerostat it XXXX. a out Can Award, possibilities, break like you. alluded to revenue does that of mean, around pushed that of was third some quarter segment, Aerostar into extension then, the awards fiscal timing expires? timing kind the Okay, bit into you that than award. then Thank And rather kind on down was pulled has Aerostat, like significant their of it that

Dan Rykhus

at a Aerostat in flight bigger Aerostar done it part from looking timing lower quarter, pull part that so and completed picture that campaigns. was between Aerostat revenue had changes quarter, of and of fourth the the contract was also the that forward, right? We was third wasn't and officially Yes, perspective, third

wide operation it when aren't is to do in on platform and forward to nature radar and of necessarily we execute out that those. the profitable do we business nice like the opportunities our capabilities. As those for, And of as tends in but we be Aerostat those history up, in don't a look opportunities come come Aerostat terms timing recurring necessarily and of new as know contracts, they And the business.

Ben Klieve

helpful. you. Thank That's it. Got

this what alluded there kind can here. on re-brand, Turning Any that curious if developments release to Autonomy, is segment really in and how of to of talk about the question would a note this, entails. picture was you rebrand be of helpful. you very kind about your market exciting going a big I talk branding press

Dan Rykhus

Sure.

new re-branding of Autonomy to terminology weeks we're technology to So our that of phrases and the and marketplace. in certain Raven we're probably that final We're going the selecting stages use. we're within launching bringing the of campaign certain and

we're So the be And love next more to you in peek to here. ideas, I'd cusp sneak how on it's we'll that communicating together some us few think give really I about a a but but here it's help in, the and really interesting marketing supplement some that about excited coming external to really coming have providing from perspective with our technology. weeks,

Ben Klieve

Okay, follow-up, have in I a that's quick and then get back queue. helpful. I'll

it there's like, any this not So launch. here marketing re-branding Is the of just basically really not me sounds re-brand to material There's right? kind the ahead that a here. that establishing of is

Dan Rykhus

So the referred release, to longer. during call and as in DOT in referred not today's be press to DOT as any it's will

will DOT be So re-dotted.

Ben Klieve

Yes, okay.

Okay, okay, that's helpful.

Okay, appreciate it back me, in jump that I'll very queue. good. the for I does answers, and

Dan Rykhus

you. Thank

Operator

Jared for like time, I'd this further no remarks. the call over Stearns to questions. I'm to turn At you. closing back showing Thank

Jared Stearns

you Industries. Thank very and a much today. and your Raven in We joining us listening have appreciate Thank you you great interest day. for for

Operator

gentlemen, conference and today's concludes Thank Ladies for participating. call. you this

may disconnect. You now

Raven Industries (RAVN) 23 Mar 212021 Q4 Earnings call transcript