In line with its long-term growth strategy, Raven Industries, Inc. has decided to realign its business segments. It will deploy the assets and team members of the Electronic Systems segment to the Aerostar and Applied Technology segments for the purpose.
After the completion of the restructuring process, Raven will operate through three business segments (the Aerostar, Applies Technology and Engineered Films segments) instead of four.
Contract electronics manufacturing services will be transferred to the Aerostar segment while the Applied Technologies segment will carry on with the proprietary product lines initiatives. According to the company, customers of the Electronic System segment will be better served once the transition procedure gets over.
Raven has planned to incorporate nearly 75% of the sales of the Electronic System segment into the Aerostar segment. In the recently reported quarter, the Electronic Systems segment delivered net sales of $71.7 million in fiscal 2012, up 9% from the year ago sales of $65.9 million.
Net sales of the Aerostar segment increased 7% to $52.4 million in fiscal 2012 from $48.8 million in fiscal 2011. The Applied Technology segment reported net sales of $132.6 million in fiscal 2012, up 33% from $100.1 million in fiscal 2011.
Based in Sioux Falls, South Dakota, Raven Industries manufactures a variety of products for customers in the industrial, construction and military/aerospace markets. It faces competition from the likes of Honeywell International Inc. (HON - Analyst Report) and Textron Inc. (TXT - Analyst Report).
Currently, we have an Outperform recommendation on Raven, which carries a Zacks #2 Rank (short-term Buy rating).