Raven Industries Inc.'s (RAVN) first-quarter net income attributable to the company was $14.0 million, or $0.38 per share, down from year-earlier net income of $19.0 million, or $0.52 per share.
Each of the company's three divisions posted sales declines compared with a year ago, reflecting the current sluggish growth environment and tough year-over-year comparisons versus last year's record first quarter. Of note, Aerostar grew operating income during the quarter due to gross margin improvements and the integration of Vista Research. All earnings-per-share amounts reflect a two-for-one stock split effective July 25, 2012.
For the first quarter, sales were $103.7 million, versus $117.9 million in the prior-year first quarter. Modest softness in the company's Applied Technology Division, declining demand from U.S. agency customers in Aerostar and a moderated energy market in Engineered Films, resulted in the overall quarterly sales decline of 12.1 percent.
For the second quarter, Applied Technology performance will be driven by international market growth and a slowly improving U.S. aftermarket. Aerostar will continue to experience reduced demand from Raven's U.S. federal agency customers. Within Engineered Films, economic headwinds impacting certain market segments persist, but the company expects to begin moving forward in the quarter with new film capabilities.
Given these assumptions, delivering year-over-year sales and earnings growth in the second quarter of fiscal 2014 will be challenging, the company said.
"Looking ahead to rest of the fiscal year, we expect a stronger second half performance on a year over year comparative basis. We obviously can't control the macro environment, but the quality of our business development pipeline remains robust and encouraging; its impact on current year results is contingent on our ability to execute. We believe that reaching last year's earnings level will also be challenging, but is still possible. We will execute the Raven business model, exercise fiscal prudence and stay true to our purpose of solving great challenges. In doing so, we will optimize FY14 performance while ensuring the soundness of our business and preparing for future growth," said Daniel A. Rykhus, Raven's president and chief executive officer.
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