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Raven Industries, Inc. (NASDAQ:RAVN)

F2Q09 Earnings Call

August 19, 2008 3:00 pm ET

Executives

Leslie Loyet - Financial Relations Board for Raven Industries

Ronald M. Moquist - President, Chief Executive Officer, Director

Daniel A. Rykhus - Executive Vice President, General Manager - Flow Controls Division, Director

Thomas Iacarella - Chief Financial Officer, Vice President, Treasurer, Secretary

Analysts

Jeff Evanson - Dougherty & Company LLC

Michael Cos - Piper Jaffray

[John Rankin - Bronco Management]

Operator

Welcome to the Raven Industries second quarter 2009 earnings conference call. (Operator Instructions) Now at this time it’s my pleasure to turn the conference over to Leslie Loyet of the Financial Relations Board.

Leslie Loyet

I’d like to thank everyone for joining us today. Earlier in the day we sent out a press release outlining the results for second quarter of fiscal 2009. If anyone has not received the release, please either call Hon Hoy of Financial Relations Board at 312-640-6688 and she will send you a copy or feel free to visit Raven’s website at www.ravenind.com to retrieve a copy.

Joining us today from management of Raven Industries we have Ron Moquist, President and Chief Executive Officer, Tom Iacarella, Vice President and Chief Financial Officer, and Dan Rykhus, Executive Vice President and Flow Controls Division Manager. Management will provide an overview of the quarter and then we’ll open up the call to your questions.

Before we begin we’d like to remind participants that the information contained in this call is current only as of the date of this call August 19, 2008 and the company assumes no obligation to update any statements including forward-looking statements made during this call. Statements made by the company that are not historical facts are forward-looking statements that are subject to the Safe Harbor disclaimer in today’s press release.

At this point I’d like to turn the call over to Ron.

Ronald M. Moquist

Hello again everybody and thanks for joining us today as we highlight our second quarter results and hopefully give you some insight as to our prospects for the second half of the year and beyond.

As I’m sure you’ve already read in our second quarter report we came in pretty much as projected with sales up 24% and earnings up 17%. I said during our first quarter conference call three months ago that we wouldn’t see 27% growth as we did in the first quarter but that the second quarter would be solid. I think 17% hits that target of being a solid quarter. 17% growth is for us never boring but when the numbers come in pretty much as planned it seems like we’re more or less repeating what we said the previous quarter.

And that doesn’t mean we can’t do better in some of our operations especially in engineered films and electronic systems because we can. It’s just that there weren’t any major surprises and of course we always like that. The second quarter is almost always our smallest quarter of the year as you know in terms of sales and earnings dollars but it was still a record second quarter and that’s our 30th consecutive quarter of year-over-year record growth starting with the first quarter of 2001.

Our flow control division which sells precision solutions for agriculture again led the way in the second quarter. Sales were up 93%. Operating income went from $2.6 million to $7.1 million. So for the first half of the year the income has more than doubled going from $9.7 million to $20.6 million which is really more than we did all of last year in flow control, so they just had a tremendous first half of the year.

The trends in agriculture that have been in place for at least the past year and a half continue and we believe will continue for at least through the next year and probably beyond that. Agriculture has been historically a cyclical business and I don’t think that’s really changed. I’m skeptical if people think that it has, but the trends we’re seeing today are different from past cycles. We’ve got high commodity prices and of course they’ve been moderating in recent weeks as some positive crop reports are coming in but still at very high levels. We’ve got high input costs including fuel, fertilizers, seed and chemicals. We’ve got growing worldwide demand especially in Asia. More corn is going into ethanol. We’ve got solid farm income.

A relatively new factor we are seeing is the credit squeeze on locally owned grain elevators. The volume of grain being moved hasn’t changed much but the value is so much greater that credit lines with the banks are getting extended. That shouldn’t affect us but it could disrupt the flow of grain through some smaller elevators in the Midwest.

After the great first quarter we had in flow controls, it was pretty clear to us that this was going to be a big year for us and that it would be difficult to keep up with demand. We know that our second quarter is the weakest. A big first quarter followed by a much smaller second quarter and then ramping back up in the third and fourth quarters may reflect the reality of the market place but it doesn’t reflect the reality of manufacturing that you don’t tell a well-trained workforce to work long hours in the first quarter and then accept cutbacks in the second quarter only to start back up in the third and fourth quarters. In a city like Sioux Falls where unemployment has been at 3% or less for 10 years, that’s a strategy that just won’t work.

So we encouraged our customers to place orders and take shipments in the second quarter by giving them promotional incentives. That increased sales and accounts receivable in the second quarter but it also smoothed out production and proof quality and employee turnover. And given the high demand for Raven precision products, it shouldn’t hurt sales in the second half of the year. In fact I believe it allows us to keep up with demand and to optimize total factory output for the full year. So what we’ve done is we’ve taken a factory that might have been constrained had we not produced at the levels we did in the second quarter and again we worked to optimize it because we just know the second half is going to be another big half year for us.

All of our Ag precision solution products are doing well in this environment. It’s not just one product like GTS steering that’s doing it for us. And as we look down the road and map our future, our goal long term and this is where we’re headed is to provide a complete offering of products and services to growers to minimize input costs, maximize yield and profitability, and to do it in a way that provides good stewardship of the land, the water and the air. And there are four parts to that goal for us which all provide future growth opportunities.

First is to collect and distribute data critical to successful farming such as weather reports, soil conditions, possible infestation threats, government regulations, whatever. Second is to provide recommendations and prescriptions for planting, spraying, harvesting, soil management, disease management, risk management, hedging, all based on the data collected. Third is to supply advanced hardware and software tools to execute the recommendations and prescriptions, and that’s primarily what we do now. Fourth is to create a database which logs what the outside elements were, what action was taken, and what the results were. Moisture, temperature, humidity, soil types, seed population, chemical usage, yields, infestations, crop prices, input costs, all would be part of the data log. And over time these logs will provide enhanced insight and predictability as to what factors and actions optimize yield and profitability.

We’re really just in the beginning stages of bringing data driven automation to the farm, so I bring these goals up because I think it gives you a sense of where we’re headed and also gives you a sense that where we’re at right now again isn’t scratching the surface of where we think this thing is going to take us. I’ve been around the Ag market now for 30 years and understand how quickly things can change but what we’re experiencing today in terms of ethanol, large emerging countries such as China and India changing their diets, weather and infestation related crop failures, the high price of fuel and fertilizer, these are all factors changing farm economics. So are the boom and bust cycles a thing of the past in Ag? As I said before, probably not but the outlook for the next several years is strong and the worldwide drive for more automation and productivity is not going to stop.

Our engineered films division had a down second quarter compared to last year but I think given the circumstances, a decent quarter. Sales were up 12% but operating income was off 33% reflecting the high cost of plastic resin and our inability to pass along all of those cost increases. Raw material now make up 67% of the cost of sales at the end of July versus just 61% a year ago and that along with the softness in our construction market is hurting our margins. When raw materials turn around as I think they will in the next year and the construction market improves, we’ll be in good position to regain profit margins. Already we’re seeing natural gas production is coming on line mainly from the Middle East, Canada and Russia and that could help since most polyethylene we use is made from natural gas. But short term we’re fighting to hold profit margin and that’ll probably continue through the end of the year.

Just since the beginning of the year we’ve absorbed at least $0.10 per pound increase in raw material prices and at a usage of over 5 million pounds per month that currently equals a cost increase to us of $500,000 per month. We’ve passed along some of those costs but it’s impossible to do that on a dollar for dollar basis. The good news is we process more pounds of resin in this year’s second quarter than in last year so demand is holding up for our products but we’re in a tough margin squeeze right now.

Our multi-layer extrusion capability and new products are starting to kick in and create growth while at the same time providing us with better profit margin opportunities. And one example of that is our vapor barrier product which goes under the concrete foundation of buildings to protect against water vapor migration into the structure. This has been a strong performer for us over the years but it had been copied by a number of competitors. To combat sales and margin erosion we developed a product called Vapor Block Plus which is a seven layer film which not only blocks water vapor but also protects against radon and methane permeation. This product gives us a market edge because there is no known competitor. Seven layer extruders of the type we own are rare in the industrial sector of plastic extrusion. You see them more often with companies who do food packaging like the Bemis Corporation that was formerly headquartered in Minneapolis. I believe now they’re headquartered in Wisconsin.

Another product example is our silage covers which prevent moisture from spoiling the pile. Again this is a product which is fairly easy to duplicate and has attracted more competition as the construction market has softened. We now offer a silage cover with an oxygen barrier to more effectively minimize spoilage and we have a unique product again with greater pricing flexibility.

So far this year we haven’t received any disaster film orders but that’s still a possibility. This is hurricane season so we should know during the next 60 days if an order will be coming. Engineered films is doing all it can to optimize a difficult environment but when resin prices come down and construction comes back we have a lot of upside sales and profit potential. We’re struggling now but I really feel like the future looks good for engineered films.

Electronic systems had another difficult quarter with sales down 12% and operating income off 62%. This has been a tough six months for this division as we predicted it would be but it will show some minor improvement in the second half of the year as operational improvements and cost savings start kicking in. The loss of a key account, the drop in sales of handheld bed controls which is one of our largest product lines, and an unfavorable product mix have all contributed to the downturn in sales and profits this year. It’s really not a situation that’s easily turned around quickly but it will get done. We’re working on it and we’re making progress and I assure you we’re going to get this thing turned around.

Given the market conditions and operational issues we feel the best course of action is to de-emphasize top line growth and focus solely on operational excellence. We’ll do that by first tightening up on assets employed including such things as consolidating production facilities, eliminating duplicate equipment, reducing inventories, and right sizing the organization. Second, by working with only a small group of high quality customers where we become important to them as an extension of their company in operations we feel we can become much more efficient and improve margins. Third, by redoubling our efforts to improve quality, reduce costs and increase speed we’ll enhance margins. Fourth, we’ll continue to build on our small but growing base of proprietary products.

We probably never will achieve a 10% after-tax return on sales in electronic systems but we can achieve a 15% return on invested capital. If we do that, they play an important role in the diversity and profitability of Raven. Electronics systems has great expertise and advanced electronics manufacturing. That’s the technology we need to maintain and enhance at Raven.

Over time and it’s happening already I think at least off shore cheap labor outsourcing’s going to prove to be too costly and too risky for some US companies. As that business starts coming back to the United States we’re in a good position to capture the more profitable pieces where they need an electronics manufacturing services company that can provide high quality production of low volume, high mix products. And there aren’t a lot of us left in the US so we’re pretty well situated there. So electronics systems is struggling now but there is much we can do to improve performance and make them a solid contributor on a more consistent basis in the years to come.

Our Aerostar subsidiary again had the type of second quarter we were projecting. Sales were up 49%. Operating income went from $304,000 to $718,000. Aerostar is still a small part of our corporate totals but it’s growing and it has potential. Army parachute shipments ran into some problems with changes directed by the Army in the second quarter. Otherwise we would have made an additional $200,000 in operating income. Those issues are behind us now and the sales volume and profitability of parachutes will improve during the third quarter. Sales and profits for our military protective wear product line were also up nicely for the quarter but they didn’t have the same impact on second quarter results as their ramp up in parachute shipments did.

And then our high altitude research balloon and aerostat group had what I would call a mixed second quarter. Our prototype high altitude air ship called High Sentinel flew in June but was only partially successful. A new high altitude air ship will be built in cooperation with Southwest Research out of San Antonio incorporating design modifications learned from the first flight and should be ready to fly early next year. And by the way we are getting paid for this development. I didn’t want you to think that this was R&D that was on our nickel. No new tethered aerostat sales were made in the second quarter but prospects remain strong for this product line. So all in all it was a good second quarter with no major surprises.

Flow controls gave us the strong performance we needed, a little better than we expected three months ago. Engineered films and electronics systems came in a little lighter thane expected. And Aerostar was where we thought they’d be.

Our balance sheet is strong as always with no debt, $32 million in cash compared to $22 million a year ago, and that’s in spite of buying back $5.2 million in Raven stock so far this year, paying out $4.7 million in dividends, and increasing receivables and inventory by $18 million.

We’re still seriously exploring acquisitions but don’t have anything to report at this time. We don’t need an acquisition to grow but the right one especially in flow controls could give us a boost. And as always we’ll remain disciplined in the way we look at acquisitions. They must be strategic and they must have a high probability of returning at least 15% on invested capital.

We’ve got a Board meeting next week and we’ll be discussing what we want to do with our cash. Acquisitions and a special dividend are two of the options on the table but not the only ones we’ll be looking at.

Looking ahead, the third quarter will show single digit earnings growth. That’s on a year-over-year basis. Electronics systems had an unusually strong third quarter last year which skews the comparison with this year. If we could repeat electronics systems’ third quarter performance this year, which of course we’re not going to, our growth would be in the 20%+ range. So you can see how electronics systems has really skewed the way we’re looking at the third quarter.

And then the fourth quarter will again be a strong quarter for us. So we look for a very good year exceeding our stated goals of growing sales 12% and earnings 15% per year on average. We didn’t achieve those goals the past two years. This year we will. The trends we saw in the first half of the year will continue into the second half. Electronics systems should do better in the second half. And engineered films still has the most uncertainty. Our forecast model for engineered films by the way does not include any relief on resin prices or any orders for hurricane disaster film. If those things happen, that would be additive to the projections that I gave.

And with that I think I’ll open it up to questions.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from Jeff Evanson - Dougherty & Company LLC.

Jeff Evanson - Dougherty & Company LLC

Obviously flow controls just an outstanding performance there. I guess I’d like to get a sense for how much you felt promotions positively impacted the quarter. Some might suggest those may have put inventory into the channel. If you could discuss your thoughts about channel inventory, that’d be great.

Daniel A. Rykhus

We did address some capacity concerns in the second quarter by encouraging our resellers to bring in some inventory and we were satisfied with the level of participation that our resellers gave us in those programs. But you’ve got to remember that over the last few years the amount of actual inventory consumption in the summer has been going up dramatically. And one of the reasons for that is anhydrous ammonia system usage in the summer months. So if we had to say you’ve got to look at the amount of sales that came in to the second quarter versus what you think was going to be consumed anyway, I’d say there’s the potential for around a couple million dollars of additional sales in the second quarter that we may not have seen in the second quarter without a promotional program.

Jeff Evanson - Dougherty & Company LLC

But you are seeing general demand going up anyhow?

Daniel A. Rykhus

Oh yes. And Jeff what was really more critical than moving sales into the second quarter wasn’t really the point. It was how do we optimize our factory because we’ve got demand that’s more or less at the ragged edge of our capacity right now and boy it’s hard to turn down orders. So what we’re trying to do is figure out how we can optimize the factory capacity, and that was one way of doing it to do as much as we could in the second quarter and just keep everybody working hard and keep producing as much as we could.

Jeff Evanson - Dougherty & Company LLC

Sure. I understand. It’s a load balancing issue. I guess one thing that maybe puzzled me then, and maybe I’m comparing apples to oranges, is I did see that your intercompany sales elimination was actually down 75% sequentially while your flow control sales were down only 35% sequentially. Does that tie into this equation or am I mixing metrics here?

Thomas Iacarella

First of all there are some other intercompany sales in last year’s numbers between I think particularly films and Aerostar, some things that they supply over there. So looking at it quarter by quarter is not a direct correlation. Also there were some credits that I think were issued on an intercompany basis as well between the two organizations in the quarter.

Jeff Evanson - Dougherty & Company LLC

So it’s more complicated than how I’m looking at it?

Thomas Iacarella

Yes. There are a lot of things going in that number, and I would say the biggest factor though is related to the fact that there are other divisional transfers going on there besides the transfers between ESD and flow controls.

Daniel A. Rykhus

That’s a category that we just plugged in there. I noticed Jeff in the last I think two quarters eliminations because electronics systems is producing more and more for flow controls and engineered films is producing films for Aerostar, so it was becoming a problem as to how we present the data. So we came up with that elimination.

Jeff Evanson - Dougherty & Company LLC

Ron, I like your data driven optimization road map. When do you think we’ll see some new products related to more of the data side of the business that you’ve laid out?

Daniel A. Rykhus

Ron did nicely lay out our vision for the product line as it matures going forward. You’re going to start to see some existing products be introduced or upgrades be introduced this fall - October or November timeframe - and product lines such as the Invisio Pro and the Viper Pro will start to have more robust functionality in the way of wireless data transmission, some additional features and applications that we’ll be able to run on the Invisio Pro as well as the Viper Pro, so you’ll start to get a sense of it as early as this fall. But really the vision that Ron cast is really a multi-year starting this fall and going forward for the next three to four years. We’ll fill out the product line around that vision.

Jeff Evanson - Dougherty & Company LLC

Could flow controls be a $150 million business in the next year or two? And is manufacturing capacity your biggest constraint there?

Daniel A. Rykhus

You can do the numbers Jeff to sort of forecast where we’ll end this year. I’m not going to give you specific guidance on that but we do see strong continuing demand for existing product lines. I don’t think that the percentage level of demand that it’s been at for the last couple quarters will carry on for the next 18 to 24 months but it’s going to certainly be stronger demand than what we’ve seen historically in the past in this division. So if you get that far, then you look at what can we do on top of that. So can it be a $150 million division? I think it can. I think it can in the two to three year timeframe. The reason I believe that is the fundamentals are there. We’re laying the groundwork with our international expansion initiative. The product line expansions that we have in mind would support that level of sales and so we feel pretty bullish on the opportunities for flow controls.

Now the second part of your question was capacity. The capacity issue we’ve been addressing starting last fall. And from a production standpoint we’ve added about 50% additional floor space allocated throughout the corporation at flow controls over the last three or four months and we’ve added additional production employees at probably about the same rate. Now we’re continuing to make investments in flow controls ability and capacity to produce products in our shipping, in our cable manufacturing, and various other manufacturing areas but we’re also employing a more aggressive outsourcing strategy on certain product lines where we feel like we can control quality and costs and free up some of our existing capacity by going off site.

That’s just the production part of the equation. There’s a lot more to it in our business. We’re also expanding capacity in our service department and our regional service capacity. We’re obviously investing in R&D. And in addition to that we’re partnering with other companies in our industry where they bring expertise that isn’t where our expertise lies. So I feel confident that we’re doing all the right things to make our business $150 million business at some point in the next three years.

Jeff Evanson - Dougherty & Company LLC

Could you talk about how much international sales you did in flow controls, how much that grew, and how much sales were not age related and how much that grew in the quarter?

Daniel A. Rykhus

We can give you some year to date numbers. I think our press release indicates that our international sales in flow controls have exceeded 20% of our total sales for flow controls for the year to date. Our sales have increased over 100% on the international shipments. So they’ve exceeded our divisional growth rate and that’s part of our plan. So that’s positive news. Our non-age business has actually declined for the past year. So we’re evaluating what our options are there. We have made some transitions internally with some of those product lines that we’ve talked about in the past and we’re continuing to look at the opportunities in the non-age portion of flow controls.

Jeff Evanson - Dougherty & Company LLC

And one question on engineered films. What’s your capacity utilization and I guess the second part is, how many pounds of resin did you process this quarter?

Ronald M. Moquist

I’m going to say that we processed probably 15 million to 17 million pounds, somewhere in that range. We’re probably at 85% capacity. We’ve got a ways to go but again we have to start thinking about capacity planning now. We can’t think about it when we run out of capacity so we’re already looking at the future and deciding what we need because if we were to decide to expand it would be probably a year to a year and a half before we would bring it on stream. So those things are being looked at right now but I think for the near future we’re in pretty good shape and our capacity is in pretty good shape.

Operator

Our next question is from Michael Cox - Piper Jaffray.

Michael Cox - Piper Jaffray

On the film side of the business in the 12% growth, could you possibly provide us a breakdown between volume growth versus pricing or average selling price increases?

Ronald M. Moquist

Yes. I alluded to that a little bit by saying that pounds processed was up so I wanted to indicate that it wasn’t just pricing. I’m going to estimate -

Thomas Iacarella

Ron, it was less than half of the overall growth.

Ronald M. Moquist

That’s exactly what I was going to say. Pricing is slightly less than half of the total.

Michael Cox - Piper Jaffray

On the electronics systems consolidation effort, will there be costs associated with this facility closure that will hit here in the current quarter? And then following up on that, what do you view as the longer term margin profile of this business? You said 10% is likely not the right number but what could that look like down the road?

Ronald M. Moquist

The space that we’re freeing up is being taken over by flow controls which is kind of nice because they needed the space and electronics needed to consolidate so that worked out very nicely. If there are any production workers or engineers that are available, I’m not sure there are at this point, again flow controls would gladly take those folks because they’re out hiring very aggressively at this point.

The question about margins, as you know electronics systems and electronics manufacturing services in general have never been a high margin business if you look at the big competitors out there, Flextronics and Sanmina and folks like that, their margins are very skimpy. We’ve been able to generate a higher margin business because of the business model that we have which is low volume, high mix with high levels of engineering and customer support. Even so that’s a business that I think if you optimize you might be able to get into the 5% to 10% after-tax range, probably on the lower end of that.

Again if I didn’t believe strongly that the manufacturing expertise and the technology that they bring with them and the importance that is to flow controls and the rest of the company, if I didn’t believe that was important I might look at it a little differently. But that technology is critical to our future and that’s something that I don’t want to give up plus I think they can be successful and I think they’ve got a business model that allows them to be successful. But do they have the potential to generate margins at the same level of our other three operations? Probably not. But they still have the ability to get a good return on investment and that’s something we look at very closely. And I still feel comfortable that they’ll exceed their cost of capital.

Michael Cox - Piper Jaffray

On the margin side in the films segment, you mentioned in your prepared remarks seeing a recovery there in your fiscal 2010. What type of assumptions are imbedded in that from a margin recovery standpoint?

Ronald M. Moquist

Well there will be several pieces to that. One will be some new products that we’ll be selling that differentiate us from the products that our competition is out there price cutting on. The second is an assumption that not this year but next year we will start seeing a flattening if not a decrease in resin prices. We do believe we can raise prices over time. It’s just not possible to do it on a dollar for dollar basis. As raw materials increase we’re just not capable of passing that on immediately, but we continue to probe the market and continue to go for price increases where we can. And then if construction and I’m not convinced that construction is coming back next year so I’m not relying heavily on that, but anything extra we got out of construction would be a bonus to us. Anything we got out of disaster film would be a bonus to us. But mainly price increases, some resin price decreases, and then the new products that we have coming out and that we do have out and are just starting to get traction in the market place.

Michael Cox - Piper Jaffray

On the flow controls, the significant strength in the international markets and may be a question for Dan, but are there specific international markets or regions that are performing better than others or how are you tackling some of these markets now?

Daniel A. Rykhus

Our areas of emphasis outside the US are Canada, South America and primarily there it’s Argentina and Brazil, Europe and also Australia. In each of those markets we started to really emphasize our sales promotion and service infrastructure a couple of years ago. And we’ve been at it for a long time in each of those markets but we really made a commitment to ramping up our sales and service functions for those areas and they’re all responding nicely. South America is up over 100%. Europe is up substantially more than that. Australia has quadrupled and going strong. So we’ve got different models in some of these regions. In Canada we have our own Raven office up there with Raven employees that set up dealers to support that area and develop OEM relationships. In South America we currently rely on master distributors and have a few direct OEM relationships. In Europe again we have our own Raven Europe office with their own personnel there developing dealers and OEM new customers for us. And then in Australia we’re just in the process right now, we have been in the past dealing direct with the OEM and a variety of dealers down there and we’re going to complement that effort by having a local function in Australia. And we’re starting that process right now. It’ll be functional by the start of the calendar year.

Michael Cox - Piper Jaffray

My last question is just on the competitive environment in the flow controls segment. Any changes there in terms of new product entrants from your competitors or pricing dynamic they’re considering? The strong growth that you and others are putting up in this space, is it attracting more competition or more pricing?

Daniel A. Rykhus

On the pricing side we’re not seeing anything detrimental right now. We’re just not seeing any erosion there. All of us are experiencing cost increases so we’re actually seeing some price increases on certain product lines and we went ahead and had an aggressive price increase installed August 1 this year. As far as competition goes Trimble, Deere, and others to a lesser extent continue to be our primary competitors and you can see their results as well as ours. They’re doing well. Do I think the fundamentals in agriculture are sort of changing like Ron alluded to attracting more competition in the future? Sure. I think that’s something that we are concerned about and we’re aware of and our challenge is to continue to develop products that are a step ahead and to leverage the experience that we’ve had in the Ag market for all these years.

Operator

Our next question comes from [John Rankin - Bronco Management].

[John Rankin - Bronco Management]

The price per share on your share buy-back purchases?

Ronald M. Moquist

Are you looking for an average for the $5.2 million that we spent?

[John Rankin - Bronco Management]

Yes, average.

Thomas Iacarella

$32.15 is what it averages out to.

Operator

And there are no further questions.

Ronald M. Moquist

Thank you all for joining us today. It was a challenging first six months but we came out of it in great shape. I like our prospects for the second half of the year. Flow controls is carrying the ball right now but all of our operations have the capability to improve and grow. And we continue to generate a lot of cash and that gives us flexibility in what we can do and how we grow the business. We’ll talk to you again in November after the elections.

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Source: Raven Industries, Inc. F2Q09 (Qtr End 07/31/08) Earnings Call Transcript
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