Raven Industries has reported financial results for the first quarter that ended April 30, 2021.
First Quarter Results
Consolidated net sales for the first quarter of fiscal 2022 were $112.5 million, up 30% vs. the first quarter of fiscal 2021. The year-over-year growth was driven by increased sales in Applied Technology and Engineered Films. In Applied Technology, the division reported record quarterly revenue, while overcoming supply chain constraints, as the demand for its industry-leading ag technology solutions was amplified by improved market conditions. In Engineered Films, the division’s end-markets continued to recover from the adverse impacts of the global pandemic, leading to year-over-year volume and revenue growth across all end-markets, led by construction and agriculture. Aerostar was impacted by the conclusion of Loon activity and a decrease in aerostat sales due to timing of contracts, leading to a year-over-year decline in revenue.
Consolidated operating income for the first quarter of fiscal 2022 was $11.6 million, vs. operating income of $3.9 million in the first quarter of fiscal 2021. Included in the results for the first quarter of fiscal 2022 was $4.6 million of investment in research and development and selling expenses to advance Raven Autonomy, compared to $3.8 million in the prior year. The strong profitability performance in this year's first quarter was driven by increased sales volume and corresponding positive operating leverage.
Net income for the first quarter of fiscal 2022 was $9.6 million, or $0.26 per diluted share, compared to $4 million, or $0.11 per diluted share, in last year's first quarter. The Company's strategic investment in Raven Autonomy reduced net income attributable to Raven by $3.6 million, or $0.10 per diluted share, in the first quarter of fiscal 2022 compared to $2.9 million, or $0.08 per diluted share, in the prior year.
Balance Sheet and Cash Flow
At the end of the first quarter of fiscal 2022, cash and cash equivalents totaled $17.8 million, decreasing $15 million versus the previous quarter. The sequential decrease in cash was driven by an increase in working capital needs as the Company fulfills substantial demand in Applied Technology and Engineered Films while navigating lengthening lead times in the global supply chain and rising input costs. Total liquidity at the end of the first quarter totaled $117.8 million.
Applied Technology Division
Net sales for Applied Technology in the first quarter of fiscal 2022 were $54.9 million, increasing $12.9 million or 30.6% vs. the first quarter of the prior year. The division's performance was the highest quarterly revenue ever. The year-over-year sales growth was driven by increased sales in the OEM and aftermarket channels, both domestically and internationally, with substantial growth in Europe. Demand and order activity for the division's ag technology products continues to accelerate as Applied Technology is capitalizing on the first robust ag market in several years. The division also finished the first quarter with a record backlog as it positions itself for strong revenue growth.
Division operating income in the first quarter of fiscal 2022 was $13.2 million, up $4.2 million or 47.5% vss. the first quarter of fiscal 2021. Included in the results was investment in research and development and selling expenses to advance Raven Autonomy of $4.6 million on a pre-tax basis, an increase of $0.8 million vs. the prior year. The underlying profitability of Applied Technology was very strong with year-over-year growth in operating income that was driven by increased sales volumes and associated operating leverage, partially offset by an increase in research and development and rising input costs related to global supply chain dynamics.
Update on Strategic Platforms for Growth
In Raven Autonomy, the Company made significant progress on executing on its strategy in the first quarter of the year. Since launching pre-orders for OMNiDRIVE (formerly known as AutoCart), Applied Technology has secured 36 orders of the advanced Driverless Ag Technology solution and is on track to achieve its limited release goal of 75 units in fiscal 2022. In addition, the Company expects to release an OMNiDRIVE system compatible with Case IH Magnum and New Holland tractors this fall, ahead of the targeted date. For OMNiPOWER (formerly known as Dot), the Company currently expects to sell out its current manufacturing capacity in the fiscal year. To meet future demand, Applied Technology is planning with a strategic partner to significantly expand production capacity for OMNiPOWER. The Company also purchased the intellectual property (IP) and patent portfolio of Jaybridge Robotics, an early mover in the development of autonomous ag technology. The Company's ownership of this IP, related to path-planning, obstacle detection and multi-machine control systems, accelerates the development of Raven's Driverless Ag Technology.
The momentum around Raven Autonomy continues to expand as the division hits key milestones and showcases the capabilities of its industry leading technology. Demand for autonomous ag solutions is strong and growing. The limited commercial releases of OMNiDRIVE and OMNiPOWER in fiscal 2022 will provide valuable customer engagement and insight as the Company executes on its strategy of advancing technology that improves agriculture practices globally.
In Raven Composites, Engineered Films continued to build out its composites production operations in the first quarter. The Company began installation of its composites equipment and expects to have operations running by the end of the second quarter. In addition, the division continues to build relationships with strategic customers as it executes on its strategy of supplying thinner, lighter and stronger materials through combining high-value films with rigid composites that provide superior value across multiple end-markets.
Fiscal 2022 Outlook
"We are off to a tremendous start in fiscal 2022, breaking our previous quarterly record for revenue in Applied Technology, while also making significant progress on our strategic platforms for growth," said Dan Rykhus, President and CEO. "The strong demand we continue to see in our businesses, particularly in Applied Technology and Engineered Films, provides us even greater confidence in our ability to exceed our previous annual revenue record in the current year.
"I am very proud of our team in Applied Technology as we overcame substantial supply chain constraints experienced across the world to generate record revenue for the quarter. The momentum and demand in the market continues to grow for our ag technology solutions. Order activity remained very strong in the first quarter and backlog is at an all-time high. In Raven Autonomy, we are right on track with our commercialization goals in the current year as we continue to set the foundation for a step-change in long-term growth for the division. The solutions we are developing are significant advancements in ag technology that will help solve labor shortages, provide greater efficiencies and enhance sustainability in agriculture across the world.
"Fiscal 2022 will be an exceptional year for our Company. We are experiencing high commodity prices in agriculture and a broad economic recovery in construction, industrial, energy and the other end-markets we serve. Our Company is well-positioned to drive record revenue and substantial earnings growth. While we expect global supply chain constraints to persist throughout the year, I am confident in our team's ability to continue to manage these challenges. While executing on the near-term opportunities, we will continue to invest in our strategic platforms that will drive substantial growth for our Company in the coming years," concluded Rykhus.