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."