Raven Industries Reports Higher 2nd-Qtr Revenues, Up 6% to $36.2 Million; Net Income Declines 6% to $1.5 Million; EPS 31 Cents vs. 33 Cents Year Ago
SIOUX FALLS, S.D., Aug. 17 /PRNewswire/ -- Diversified manufacturer Raven Industries, Inc. (Nasdaq: RAVN) today announced higher net sales of $36.2 million, up 6 percent from the year-earlier period. Net income, however, declined 6 percent to $1.5 million, or 31 cents per share, for its second quarter ended July 31, 1998, from $1.6 million, or 33 cents per share, in the year-ago period.
Noting that its current backlog is up $2 million from the fiscal year-end and $6 million higher than the level at the end of the company's quarter ended July 31, 1997, the second half of the year continues to look "quite positive," commented President and CEO David A. Christensen. The executive said the most recent quarter's performance "was below our longer-term goals for the company, but we do see the beginning of a trend toward substantially improved results for the second half." Christensen added that "We will continue to improve the profitability of our plastic tank operations, and we expect to see strength in our Electronics segment as well as our Engineered Films division."
Electronics Segment In the company's Electronics segment, sales in the second quarter climbed 27 percent over a year earlier and offset the shortfall of the first quarter. For the first half of the year, sales totaled $23.2 million, 10 percent higher over the first six months of the previous year. Contract electronics deliveries picked up substantially from the first quarter and "this division is better aligned in terms of productive capacity and its order base," Christensen said. Electronics contract sales rose more than $1 million from the comparable period a year earlier.
"Sales at our Beta Raven subsidiary were up from a year ago, and sales of flow-control devices outside the traditional agricultural market offset the impact of a weakening farm economy in the U.S. We continue to believe the Electronics business segment will deliver strong sales and profits for the full year ending January 31, 1999," the CEO said.
Plastics Segment Sales of $16.8 million were 1 percent higher than last year's second quarter as improved results in engineered films were partially offset by continuing weakness in the company's plastic tank business. For the first six months of the fiscal year, segment sales of $33.3 million were down 4 percent from the previous year. "We were pleased to report improved sales and operating results in our Engineered Films division and record deliveries from our Glasstite pickup-truck topper business," Christensen stated.
Operating income, as expected, continued to be held in check by weakness in industrial tank sales. Plastic tank sales of $4.0 million were down 21 percent from the previous year's second quarter. "Results for the second half of the year should strengthen, with improvements in both sales and profitability," Christensen noted.
Sewn Products Segment Sales for the company's Sewn Products segment were $7.9 million, 6 percent lower than last year with demand for sportswear delayed. Segment sales totaled $11.8 million in the first half of the year, down 16 percent from year-earlier results. "The impact of lower sales and a higher percentage of relatively lower-margin product shipments cut into profitability," Christensen said, adding: "The first half of the fiscal year is the seasonal low for Sewn Products, and we expect to see improved performance for the remainder of the year."
Raven Industries is a diversified manufacturer that supplies plastics, electronics and special-apparel products to various markets.
This release contains discussions of items which may constitute forward-looking statements within the meaning of federal securities laws. Although Raven Industries believes that expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurances that its expectations will be achieved. Factors that could cause actual results to differ from expectations include general economic conditions, weather conditions which could affect certain of the company's primary markets such as the agricultural market or its market for outerwear, or changes in competition which could affect any of the company's product lines.