Raven's EMS Revenue Takes a Dip
SIOUX FALLS, SD -- Raven Industries' net income and revenues fell in the second quarter as the company begins to transition toward more of its own end-products and away from an outsourcing model.
For the second quarter ended July 31, net income was $8.3 million, down from $11.5 million a year ago. Overall sales were $93.4 million, down from $101.7 million in the prior-year second quarter. Sales were down slightly in Applied Technology, the company's EMS division.
"As expected, the economic headwinds and near-term challenges we faced in the fiscal first quarter, persisted in our second quarter," said Daniel A. Rykhus, president and chief executive officer. "Raven continues to become a more technology-focused company—centered on solving the specific great challenges of hunger, security, energy independence and natural resource preservation—transitioning from a company with a strong contract manufacturing orientation."
For the quarter, Applied Technology sales were $39.1 million, down from $40.1 million last year. Operating income was $11.9 million, compared to $12.9 million in the prior-year period. The decrease stemmed from lower sales amid continued investments in research, marketing and product development to secure future growth.
Said Rykhus, "Seasonally, the second quarter is the weakest from our Applied Technology division, so comparisons can be challenging, but we're pleased that demand appears to have stabilized and may be recovering. Also encouraging is that OEM demand stayed strong for certain precision agricultural solutions, specifically, Raven's advanced guided steering systems.
"Internationally, we continue to invest in growth for the long term. In particular, we've heightened our focus on growing the South American markets. We're doing so by working more closely with our strong OEM and aftermarket customers in those geographies."
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