Raven Industries Inc. (NASDAQ:RAVN) Q3 2018 Earnings Conference Call Transcript

Nov 21, 2017 • 10:00 am ET


Raven Industries Inc. (NASDAQ:RAVN) Q3 2018 Earnings Conference Call Transcript


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Good day, ladies and gentlemen, and welcome to the Raven Industries Incorporated Third Quarter 2017 Earnings Conference Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As reminder, this conference is being recorded.

I would now like to introduce your host for today's conference Bo Larsen, IR Manager for Raven Industries. You may began.

Bo Larsen

Good morning, and welcome to the Raven Industries fiscal third quarter 2017 investor conference call. Today's call is being webcast live and will also be archived on the company's website for future listening. On the call today will be Dan Rykhus, Raven's President and CEO; and Steven Brazones, Raven's VP and CFO.

(Forward-Looking Cautionary Statements).

In addition, during today's conference call, the company will be discussing certain non-GAAP financial measures, specifically adjusted operating income, adjusted net income and adjusted earnings per share. All of the non-GAAP measures discussed today should not be construed as an alternative to the reported results determined in accordance with GAAP.

Management believes that the discussion of these measures is useful to investors because it assist in understanding the underlying operating performance of the company and its operating segments. The non-GAAP information discussed today may not be consistent with the methodologies used by other companies. All non-GAAP information is reconciled with reported GAAP results in the company's earnings release and will be included in the company's third quarter Form 10-Q.

I would now like to turn the call over to Dan Rykhus, Raven's President and CEO.

Dan Rykhus

Thank you, Bo, and welcome, everyone. We are pleased to be with you today to discuss our strong third quarter results and the sustained improvements in both our Applied Technology and Engineered Films division. But before we review this with you, I'd like to address our reevaluation of our internal control framework and the controlled deficiencies we identified.

During the third quarter, we undertook a review of several specific controls within our framework and the overall framework. As the company has grown through acquisition and experience significant changes over the past two years, the complexity of the business has grown. This necessitates a stronger awareness of risk and additional controls commensurate with these new risks that are calibrated for the changing dynamics the business has experienced and may experience in the future.

As a result to the reassessment of our internal control framework, we've brought in experienced external consultants including another large international and reputable accounting firm and we are adding additional resources to our team. The organization is aligned to re-mediate the material weaknesses identified and to enhance our internal control framework. Re-mediation efforts begin in the third quarter fiscal year 2017, continue in earnest today and will be diligently executed until they are completed.

We are committed to strong internal control. We've always focused on maintaining high standards for ourselves and conducting business in a manner that exhibits these standards. And as you know, our corporate