SIOUX FALLS, SD -- Raven Industries reported fourth-quarter sales rose 3% to $59.9 million but net income fell 22% to $4.7 million from a year ago.

For the year ended Jan. 31, sales grew 20% to $279.9 million, and net income rose 11% to $30.8 million. It was the company' fifth-consecutive record for annual revenues and profits.

The firm's Electronic Systems division reported fourth-quarter sales fell 3% to $16.1 million. Operating income rose 15% to $2.2 million, reflecting facility consolidations and cost reductions. For the year, sales fell 9% to $62 million, while operating income dropped 43% to $5.9 million.

The assembly group primarily supplies PCBs for avionics and secure communication devices for government agencies. Avionics, its largest business, at more than 50% of sales, grew 33% in 2008. On a conference call with analysts, chief executive Ronald M. Moquist said, "We believe this business has the potential to grow further, unless Boeing and Airbus, our two major customers, unless their aircraft product schedules are pushed out or canceled in the coming year. Sales of secure communication devices should hold up well in the recession, because of increased government spending."

The firm also makes industrial films, flow controls, and high-tech clothing for military and aerospace applications.

In a press release, Moquist said 2009 will be "the most challenging year in our history. For the near term, growing the business at previous target rates is no longer a priority." He said Raven would seek to shed "everything that is non-core (from assets to product lines) [and] defend our core assets (such as businesses that have performed well in the past but will struggle in a recession)." Moquist did not disclose which assets are considered non-core, but said the four main business units would not be divested or closed.

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