SIOUX FALLS, S.D., Nov. 28, 2018 (GLOBE NEWSWIRE) — Raven Industries (NASDAQ: RAVN) reported an increase of 3.4% in consolidated net sales during third quarter of its 2019 fiscal year ended Oct. 31, 2018.
Net sales in the third quarter for Raven’s Applied Technology division, which includes its precision farming business, were $29.7 million, up 17.5% year-over-year. Geographically, domestic and international sales were up 18.4% and 14% year-over-year, respectively. This increase, both domestically and internationally, was led by strong growth from new products and market share gains in several core product platforms.
New product sales growth was led by RS1, the division's new steering platform. RS1 combines autosteer, global positioning capabilities, and Raven's Slingshot services into one unit for agricultural equipment navigation and remote connectivity for proactive service and logistics.
According to Raven management, this innovation was developed by leveraging technology obtained in the fiscal year 2015 acquisition of SBG Innovative BV, and is superior relative to competitive technologies in the marketplace today. The new equipment has positioned the division to gain market share in both the sprayer and tractor market. “Applied Technology has traditionally had very little market share in the tractor steering market, while holding a very strong position in the smaller ag sprayer steering market. The success of RS1 boosted revenues of this core product family by approximately 50% over the prior year,” the company said.
Additionally, the division continues to invest in building out its Latin American presence and is making good progress in positioning this geographic region for strong growth in fiscal year 2020. Company efforts to expand this business is aimed at expanding relationships with local OEMs and large enterprise farms.
Division operating income in the third quarter of fiscal 2019 was $7.7 million, up $2.4 million or 44.4% vs. the third quarter of fiscal 2018. Division operating margin increased 480 basis points year-over-year, from 21.2% to 26%. Incremental margins were strong for Applied
Technology, driven primarily by leverage on higher sales volume and to a lesser extent, lower legal expenses vs. the third quarter of the prior year.