Raven Industries reported consolidated net sales of $85.2 million, down 13.1% during the second quarter of its fiscal year ended July 31, 2020. Growth in Applied Technology and Aerostar was more than offset by a decline in Engineered Films. Applied Technology generated significant year-over-year growth despite reduced OEM demand.
Net sales for Applied Technology in the second quarter of fiscal 2021 were $35.5 million, increasing $8.1 million, or 29.7% vs. the second quarter of the prior year. Division operating income in the second quarter of fiscal 2021 was $6.5 million, up $1.7 million or 34.3% vs. the second quarter of fiscal 2020. The increase in division profit was driven by increased sales volume and the associated positive operating leverage, partially offset by the division's $4 million investment in Raven Autonomy during this year's second quarter.
Following its quarterly earnings release, Raven announced its Board had suspended quarterly cash dividend Indefinitely.
By suspending the dividend, the company said it will retain nearly $20 million in capital on an annual basis. It intends to reallocate this capital to supplement and accelerate investments in Raven Autonomy and Raven Composites. Raven said it believes the opportunity for significant long term growth from these investments is substantial and this would be the most appropriate use of capital to drive long term growth in shareholder value.
“We are fully committed to investing in the future of our company and now is the time to accelerate investment into Raven Autonomy and Raven Composites, said Dan Rykhus, president and CEO. “This decision speaks greatly to the tremendous opportunities in front of us and is being taken from a position of strength, with utmost confidence in our future.”