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News

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."

Cranston, RI, Aug. 17 -- Aim Specialty Materials today announced the a new subsidiary which will produce solder spheres, preforms, epoxies, fluxes and pastes for semiconductor packaging materials.

The new division, AIM Semiconductor Packaging Materials, will also supply touch-up materials and thermal interface materials, the company said in a statement.

FRANKLIN, MA, Aug. 16 - Speedline Technologies Inc. has signed an agreement covering sales and marketing of its screen printers in Japan.

Tamura FA System Corp. will market Speedline's Accuflex and AP Excel stencil printers under the MPM/Tamura brand, and provide service and support to Japanese customers.

"As the market leader for reflow and wave soldering equipment in Japan, Tamura's highly skilled staff understands the challenges manufacturers face throughout the assembly production process," said Pierre de Villeméjane, president and CEO of Speedline, in a press statement.

Tamura will translate software and manuals into Japanese and develop additional features specific for its Japanese customers, Tamura said.

SAN JOSE, Aug. 11 -- Cisco Systems yesterday reported sales grew 26% vs. last year and 5% sequentially in the recently concluded July quarter but warned that sales in the current quarter may fall disappoint the Street.

The maker of telecom and networking gear forecast sales would be flat to up 2% sequentially, and year-on-year growth would slow to 16 to 18%.

For the just completed July quarter, router demand rose 12% sequentially and switches were up 3%. However, the company's ratio of inventories to cost-of-goods-sold (COGS) climbed sequentially, and turns dropped to 6.2, from 6.3.

In a research note published today, Deutsche Bank warned that climbing inventories among OEMs of communications equipment could shake the recovery of the EMS sector. "EMS production rates of communications gear has increased 15% since the Nov./Dec. quarter (normally flat to down 10%). We believe this is largely a result of building inventories at Cisco and other [communications] OEMs (Lucent, Ericsson, Motorola)."

Cisco buys about $4 billion worth of goods and services from North American top tier EMS vendors, according to DB, making it one of the largest EMS customers. Major suppliers to Cisco include Celestica (about 10% of revenue), Solectron (13%) and Jabil (about 15%).

"Cisco`s slowing sales growth and inventory build reinforces our view that the peak of the current tech cycle is near," DB analyst Chris Whitemore wrote.

Weymouth, UK - Aug. 4, 2004 - DEK (dek.com)'s latest machine for surface-mount pre-placement, the Europa, has a cycle time of less than seven seconds and total process Cpk 2.0 of ± 20mm.

According to the company, a newly designed chassis provides torsional and thermal stability and a single natural vibration frequency. A new scaleable control system increases the reliability of dramatically reduced wiring - 40% less than conventional printing systems.

Rich Heimsch, president of DEK International, notes that Europa's specification sheet describes the performance customers can expect during actual production. "Europa's Cpk 2.0 at ± 20mm is the figure for true paste on pad repeatability, measured after a full wet print cycle. Many specifications quote fiducial alignment capability only, but it is paste on pad repeatability that really matters to electronics assemblers."

The machine features an interactive user interface, with graphical indications for consumable replenishment, plus on-board help and error recovery. Its software links to DEK's Web-based support services and contains tutorials on setup, process optimization, and maintenance and applications issues.

TAIPEI, Aug. 11 -- Notebook PC maker Elitegroup Computer Systems will branch into EMS services following a recently completed internal reorganization.

The company is aiming for notebook contract orders from regional vendors and system integrators, DigiTimes reported, sourcing chairman Johnson Chiang.

ECS, one of Taiwan's largest ODM makers of motherboards, recently split into two units -- EMS and brand products.

While the company's history is in motherboard manufacturing, the EMS group will target a broader product range including motherboards, graphics cards, PC systems and notebooks, DigiTimes said.

ARLINGTON, VA, Aug. 9 - July bookings of electronics components slowed for the first time in nearly a year but are expected to pick up in the fall, said a trade group that tracks monthly orders.

Orders flattened in July, their first slowdown in 11 months, reported the Electronic Components, Assemblies & Materials Association, a trade group of component makers and assemblers.

"After almost a year of steady upward movement, the market seems to have taken a bit of a breather in July," said Bob Willis, ECA president, in a press statement. "We suspect that this will be temporary and that growth will resume by the end of this quarter through the close of the year."

Executives from manufacturers who met at ECA's spring conference said they expect growth well into 2005, ECA said.

The ECA is a sector of the Electronic Industries Alliance.

TAMPA, Aug. 4 -- Reptron Electronics reported second-quarter sales of $35.6 million, down about 10% from last year.

For the quarter ended June 30, Reptron recorded a pro-forma loss from continuing operations of $174,000, excluding reorganization expenses. This compares to a $711,000 loss a year ago. The net loss was $147,000, vs. $2 million last year.

Gross margins improved sequentially.

In February, Reptron emerged from Chapter 11 bankruptcy, having sold various assets of its components distribution and memory module divisions.

"Reptron Electronics continued on its road to recovery during the second quarter," said Paul Plante, president and CEO. "We continue to see signs of an improving economy through increasing customer demand."

TAMPA, FL, Aug. 9 -- Reptron Electronics has signed a multimillion dollar contract to build electronics assemblies for Clear-Com Communication Systems.

"This is an important business development for Reptron that increases our capacity to provide manufacturing services for the communications industry sector," said Bonnie Fena, president of Reptron Manufacturing Services.

Full production is expected to ramp by the end of 2004.

Under the deal, Reptron will build 150 different subassemblies and PCBs for wired and wireless intercommunications products. Much of the current phase involves converting from plated through-hole to to surface mount technology.