SIOUX FALLS, S.D., Oct. 28, 2019 (GLOBE NEWSWIRE) -- Raven Industries, Inc. (the Company; NASDAQ: RAVN) announced today details of its strategic plan, which include a significantly increased level of investment in targeted areas in order to drive greater earnings growth and long-term value. Over the next several years, the Company will advance two strategic platforms for growth: Raven Autonomy™ and Raven Composites™.

“The strength of our market positions and technology offerings has never been greater than it is today,” said Dan Rykhus, Chief Executive Officer and President of Raven Industries. “Now is the time to leverage our positions in these expanding markets in order to drive significant growth in company performance over the long-term — and we couldn’t be more excited for the opportunities in front of us.”

These two strategic growth platforms are a result of the development and growth in these key markets and directly align with the Company’s business model, which is to serve market segments with strong growth prospects. Autonomous agriculture technology is expected to develop rapidly over the next five years. Additionally, the composites market is expected to expand significantly as the need for these materials increases across several applications.

Raven Autonomy™ is a strategic growth platform which will propel its Applied Technology Division to become the industry leader in autonomous agricultural solutions. This strategic growth platform builds upon our existing machine control technology, while also innovating smart machine platforms/implements to achieve fully autonomous solutions across the farming enterprise.

Raven Composites™ is a strategic growth platform which will expand its Engineered Films Division to become an industry leader in the reinforced composites market. By leveraging our reinforced materials expertise, Engineered Films will innovate solutions that deliver thinner, lighter and stronger composites within the transportation, construction, automotive and packaging markets. These composites will be attractive alternatives to existing materials such as wood, metal and thicker plastics, as they will significantly reduce weight while improving appearance, strength, durability and lifecycle.

“To fully realize our growth potential, increased investment is needed across these areas, and we are in a great position to capitalize on these market opportunities,” added Rykhus. “We have been investing in R&D, production capabilities, strategic acquisitions, leadership development and a new enterprise resource planning software for quite some time — and now we are going to invest further. Together, these provide a solid foundation for executing this bolder strategy.”

Rykhus went on to say, “These strategic growth platforms are additive to our existing business model and enhance our core strengths — which include a proven history of innovating technology in precision agriculture and specialty sheeting.”

Raven Autonomy™
Raven has been committed to maximizing operational efficiencies through its core offering of application and machine control platforms. Raven’s evolution of autonomous solutions is an extension of that core. As availability of skilled labor decreases and compliance requirements get more complex, the need for more efficient utilization of resources is critical. Raven is best positioned to solve this great challenge.

Raven has market-leading guidance and steering technology. VSN™, the Company’s best-in-class visual guidance technology, and RS1™, its machine guidance and steering platform, are currently used around the world. However, autonomy in agriculture is not only about driving, it is about operating. Autonomy in agriculture is an extension of Raven’s Slingshot® communication and servicing platform, which has been used by ag retailers for more than a decade. Autonomy in agriculture also requires trusted implement performance and application control, like Raven’s Rate Control Module (RCM) and Hawkeye® Nozzle Control System, and boom control technology platforms, like AutoBoom® XRT and AccuBoom™, each of which lead the industry in operational performance. All of these elements are equally important components of a successful autonomy strategy, and Raven has been innovating these technologies for years. 

The Company’s plan to invest in Raven Autonomy™ includes increasing the research and development (R&D) investment in the automation of its existing product portfolio and building out the additional necessary technology through a combination of internal development, acquisitions and partnerships. Throughout all of this, the Company will focus on perception, path planning and machine controls for autonomous agriculture solutions.

“Raven has been investing in the necessary enabling components for autonomy in agriculture for 20 years,” continued Rykhus. “Along the way, others have had unsuccessful attempts at initiating autonomy in agriculture; however, neither the technology nor the market were ready. The necessary technology to enable autonomy in agriculture is ready, and the inflection point is here. We want to lead in the next revolution of production agriculture, and our legacy platforms, new technologies and strategic partnerships provide distinct advantages over the competition. Now we need to aggressively invest to bring our solutions to market — and to capture this tremendous opportunity. We believe we are in the lead position on the path to fully autonomous solutions for agriculture. Now more than ever, our strategic OEM partners need to deliver premier precision agriculture solutions in order to compete and win market share. Investing to expand our advantage is essential to remaining the trusted innovator in precision agriculture.”

Raven Composites™
For decades, Raven has innovated, produced and sold multi-layer reinforced laminated materials that displace heavier and thicker materials. The Company has been, and remains, committed to delivering thinner, lighter and stronger solutions that use less material, are easier to use and provide enhanced value to its customers. The Company is in a strong position to leverage its wide-width product expertise, high-quality lamination capabilities and reinforcement technology to solve these challenges.

Raven has the most unique film lines in North America and is capable of manufacturing very complex and specialized films, specifically for the composites market. This is a natural adjacency for the Company and helps maximize capacity utilization. Significantly increasing the Company’s composites portfolio will greatly expand its total addressable market of high-value product offerings, which will result in greater revenue growth with a strong margin profile.

For the past several years, Raven has strategically invested in high value, multi-layer films and reinforced flexible composites. A move to rigid composites, combined with the Company’s existing expertise and film materials, is a logical strategic adjacency for Engineered Films. The market demand exists, and the size of the opportunity is significant. This provides great opportunity to invest aggressively to capture a significant position in this expanding market and drive a step change in materials performance.

The Company’s plan to invest in Raven Composites™ includes increasing the investment in R&D and business development related to the rigid composites market and developing new technologies and capabilities through internal R&D, acquisitions and partnerships. To support Raven Composites™, the Company plans to establish a cadence of strategic investments of size every 12 months.

“Our track record of product performance and quality, exceptional service, unique combination of capabilities, vertical integration and ability to remain agile are unmatched,” stated Rykhus. “We have a core competency in running efficient manufacturing operations. We have a strong balance sheet and borrowing capacity. We have a history of successfully integrating strategic acquisitions, delivering innovative products and solving customer challenges through strong R&D. This combination has provided distinct advantages and puts us in a unique position to capitalize on the vast opportunity in this expanding adjacent market. We have a good opportunity to find acquisitions and grow quickly and significantly.”

Raven Business Model
“Our core business across each of our three divisions remains strong,” said Rykhus. “These strategic platforms fit within our business model and existing divisions. We are committed to serving a set of diversified markets, which includes our Aerostar division. Two years ago, we brought focus and strong investments to Aerostar’s stratospheric balloon and radar platforms. Today, we believe Aerostar is reaping solid returns from those investments by delivering strong financial results with significant opportunities for growth. We couldn’t be more pleased with how well the Division is positioned within today’s aerospace and defense market.

“We have a high return on invested capital, and the investments in Raven Autonomy™ and Raven Composites™ are incremental to our existing portfolio needs and will accelerate growth and drive higher value creation. We are excited because of our unique position to win in each of these markets.

“We are committed to this plan. Current end market conditions are more challenging than anticipated, but we believe in these investments and the strength of our core businesses. We remain steadfast in our decision regardless of what the short term looks like. We have confidence in our ability to execute and drive strong long-term results.”

Financial Expectations
“Raven is in the top decile of our peer group for margins and returns, but our growth rates have not met our long-term objective,” said Steven Brazones, Vice President and Chief Financial Officer. “Our primary financial goal is to generate annual earnings growth of 10%, over the long term. We believe this plan will get us there.

“In order to meet that objective, we believe we can significantly augment growth, with modest reductions in margins and return ratios, through this bolder investment strategy and drive higher value creation over the long-term.

“This strategy also provides balance. Executing on near-term opportunities for Raven Composites™ will help offset the investment being made for Raven Autonomy™ as it ramps over the next few years.

“Raven Industries’ financial performance has been very strong despite persistent end-market demand challenges. As we look to pursue a bolder growth strategy, we expect to make significant strategic investments in R&D, CAPEX, and M&A to build upon our core to drive faster growth in sales, operating profit and EPS over the next five years. Total investment over the next five years is expected to be a threefold increase over the previous five years, a clear step change to drive stronger growth. For the long-term, our financial objectives include 30-32% operating margins for Applied Technology and 18-20% operating margins for Engineered Films.

“This strategy enables us to carry out our purpose — to solve great challenges — on a larger scale. We have the utmost confidence in our people, purpose, vision, values, business model and strategic plan. We know we can execute on our strategy and in doing so will achieve greater value creation,” concluded Brazones.

Investor Day
Raven is hosting an Investor Day on Tuesday, November 5, 2019 in New York City. The event will feature presentations and a Q&A session with Dan Rykhus, President and Chief Executive Officer, and Steven Brazones, Vice President and Chief Financial Officer. The event will provide an overview of the Company’s strategic plan and more detail on Raven Autonomy™ and Raven Composites™.

The event will begin at 10:30 a.m. ET and conclude by 1:00 p.m. ET. The event is open to all institutional investors, but advanced registration is required to attend, as space is limited. Interested attendees should email irevent@ravenind.com with the individual’s name, location and affiliated institution. A live audio webcast and presentation materials will be available through the Investor Relations section of the Company’s website at http://investors.ravenind.com.

About Raven Industries, Inc.
Raven Industries (NASDAQ: RAVN) is dedicated to providing innovative, high-value products and solutions that solve great challenges throughout the world. Raven is a leader in precision agriculture, high-performance specialty films, and lighter-than-air technologies. Since 1956, Raven has designed, produced, and delivered exceptional solutions, earning the company a reputation for innovation, product quality, high performance, and unmatched service. For more information, visit http://ravenind.com.

Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the expectations, beliefs, intentions or strategies regarding the future. The Company intends that all forward-looking statements be subject to the safe harbor provisions of the Private Securities Litigation Reform Act.

Generally, forward-looking statements can be identified by words such as “may,” “will,” “plan,” “believe,” “expect,” “intend,” “anticipate,” “potential,” “should,” “estimate,” “predict,” “project,” “would,” and similar expressions, which are generally not historical in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future – including statements relating to our future operating or financial performance or events, our strategy, goals, plans and projections regarding our financial position, our liquidity and capital resources, and our product development – are forward-looking statements.

Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. Our Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain known risks, as described in the Company’s 10-K/A under Item 1A, and unknown risks and uncertainties that may cause actual results to differ materially from our Company’s historical experience and our present expectations or projections.

Contact Information
Bo Larsen, Director of Investor Relations
Margaret Carmody, Director of Corporate Communications
Raven Industries
+1 (605) 336-2750

Source: Raven Industries

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