SIOUX FALLS, SD -- Raven Industries reported second-quarter sales of $56.6 million, down 18% year-over-year on seasonal weakness and the general economic conditions.

For the period ended July 31, net income fell 9% to $6.2 million. While the firm's electronics assembly operations performed well, the company warned delays in aircraft orders could slow its momentum.

Year-to-date, sales are down 16% to $121.8 million, and net income is down 13% to $15.4 million.

"Seasonally, the second quarter is our weakest," said chief executive Ronald M. Moquist in a statement. "Our return on sales actually improved over a year ago due to strong showings in both Electronic Systems and Aerostar, and cost-cutting measures in our other operations."

The firm's Electronic Systems division's sales were up 22% from last year to $17.9 million. Operating income was up 150% to $3 million. Year-to-date, sales were up 22% to $34.1 million compared with $28 million last year. Operating income was $5.5 million versus $1.9 million, up 190%.

Following facilities and equipment consolidations, the division is operating at 80 to 90% capacity, Moquist said.

"Electronic Systems stepped up its performance beginning in the third quarter last year and operated efficiently on a much better base than the first half a year ago," Moquist said. "We benefited from the right mix of products and cost controls. Deliveries of secure communications systems and avionics have been particularly strong. Avionics accounts for over 50% of the segment's sales. Airlines have delayed or otherwise pushed back orders to aircraft manufacturers in response to weak passenger traffic and shipping volumes; that could begin to affect our deliveries later in the year."

Last night, on a conference call with analysts, Moquist added, "Electronic Systems will start to see some order deferrals for avionic products in the fourth quarter, but quarter three should be strong."

 

 

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