SIOUX FALLS, SD, Aug. 19 -- Raven Industries reported second-quarter net income climbed 15% to a record $3.6 million. For the quarter ended July 31, the company reported revenues were up 3% to $37.1 million.

For the first half, Raven reported net earnings up 23% to $9.1 million, and sales up 3% to $75.5 million.

"Our second quarter was budgeted to be our toughest, with earnings projected to be flat or slightly down," president and CEO Ronald Moquist said. "[T]hree of our four operations performed beautifully. We could have done even better except for the weak performance of our Electronic Systems Division." The ESD group provides EMS services.

ESD's sales were up, but less than 1%, to $11.7 million. Operating profit dropped 52% to $773,000. The division struggled with start-up problems with a new customer and continuing material supplier issues. As a result, shipments were delayed and inventory levels increased substantially, management noted. For the first half, sales of $20.8 million were down 4% and operating income of $1.5 million was 46% lower than last year.

Moquist said the full-year outlook continued to appear strong and that production problems will be ironed out in the third quarter. "We believe the positive trends set in the first half will continue to help drive sales and earnings growth through the second half of this year."

SAN JOSE and NORTHFIELD, MN, Aug. 16 -- The PCB division of Flextronics will acquire one the oldest and largest makers of flex circuits in North America in a stock-for-stock deal. The acquisition is expected to increase Flextronics' annual revenues by $80 million.

Multek, a wholly owned division of Flextronics, will acquire Sheldahl, a leading provider of flexible interconnect products and electronic materials. The deal is expected to close at the end of August.

Founded in 1955 and publicly traded until emerging from bankruptcy in 2002, Sheldahl employs 450 and has facilities in Northfield, the Philippines and Mexico. It is owned primarily by Ampersand Venture Capital, Molex Inc. and Morgenthaler Partners.

Multek manufactures rigid printed circuit boards.

In a statement, Sheldahl president and CEO Benoit Pouliquen said, "This acquisition will strengthen our position as an industry leader in flexible interconnect and materials technologies and provide access to Multek's key resources and geographies, such as China."

TORONTO, Aug. 12 -- EMS provider Adeptron Technologies reported revenues of C$9.6 million for its June quarter, up from C$6 million sequentially and C$3.6 million last year.

About C$3 million came from sales from its Ottawa operations, which Adeptron acquired last quarter.

Gross margin was C$1 million, up C$900,000 from the first quarter and C$300,000 last year.

F. Michael Marti, President and CEO of Adeptron, attributed the improvement to stronger pricing and improved currency exchange rates.

SG&A expenses were C$1.4 million, or 14% of sales, down from 22% of sales sequentially and 20% last year.

"Adeptron's revenues and gross margins are increasing at a more dramatic rate than SG&A," said Marti.

Adjusted net earnings were C$58,090, vs. adjusted net losses of C$509,128 last quarter and C$23,414 last year. The GAAP net loss was C$600,000 ($0.02 per share), compared to C$1.1 million last quarter and C$500,000 in Q2 2003.

"Although we expect that the incremental growth rate in revenues for the rest of the year will be less dramatic ... we anticipate that quarterly revenue run rate will continue to build from Q2 levels," Marti  said.

SAN FRANCISCO, Aug. 18 -- Cautious forecasts and rising inventories at blue-chip electronics OEMs are reinforcing analyst views that the tech cycle growth is slowing.

In its weekly EMS Edge newsletter, Deutsche Bank said, "Although anecdotes from Dell, Cisco and Hewlett-Packard were not entirely consistent, commentary regarding near-term demand was relatively cautious in aggregate."

Furthermore, recent news from major Asian ODMs has been concerning. "Venture, Hon Hai and Compal all reported softer near-term sales, suggesting production trends are decelerating," wrote Chris Whitmore, an analyst in DB's equity research group. Hon Hai and Compal both reported growth but results fell below earlier guidance. Venture's second-quarter sales dropped 2% sequentially.

Cisco also guided for lower sequential growth and HP said demand slowed in July. Plus, both HP and Cisco reported lower inventory turns and higher inventories during the quarter.

"We remain concerned that the combination of growing inventories across the supply chain and slowing end-market growth will pressure earnings growth" for EMS firms, DB said. The firm believes growth rates peaked in the second and third quarters, and "the recent inventory build will result in disappointing second half 2004 and 2005 build rates for the EMS industry."