Good day, ladies and gentlemen, and welcome to the Raven Industries First Quarter 2014 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to introduce our host for today, Mr. Tom Iacarella, Chief Financial Officer. Sir, please go ahead.

Thank you, operator. Joining me on today's call is Dan Rykhus, Raven's President and Chief Executive Officer. Before we begin, we would like to remind participants that the information contained in this call is current only as of today, May 20, 2013. The company assumes no obligation to update any statements, including forward-looking statements. Statements that are not historical facts are forward-looking statements and subject to the Safe Harbor disclaimer in today's press release. With that, I would now like to introduce Dan for a strategic look at Raven's first quarter.

Thanks, Tom, and welcome everyone to our Fiscal 2014 First Quarter Conference Call. I'll start off with an overview of our performance, then talk about each of the divisions in more detail. And finally, speak to our expectations going forward. Tom will then provide you with a look at our financials, including a discussion of margins and the balance sheet. And after that, we'll open up the call for your questions. So let's begin with our performance. As we anticipated, we met economic headwinds and faced near-term challenges in the fiscal 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%. The macro situations in each of our divisions vary, but we're closely monitoring all the indicators such as oil prices, ag commodity prices, GDP, unemployment and distribution channel checks, while factoring in longer-term potential for each of our divisions. Importantly, we're aggressively working to leverage our targeted investments in new product development, capacity expansion and new market penetration. And looking ahead to the rest of fiscal 2014, the quality of our business development pipeline remains encouraging. Specifically, we see opportunities in new products that use our multi-layer film capabilities and lighter-than-air and radar system sales outside of U.S. government channels. Additionally, we have several new precision ag products that will launch in our second half and are expected to help drive growth in Applied Technology. Going forward, it's imperative that we execute and turn those opportunities into positive returns. As a company, Raven remains well-positioned for growth. We're financially strong with no debt and we have fantastic long-term prospects. When facing…

Thanks, Dan. Hopefully, all of you had a chance to review this morning's release. I will discuss our balance sheet changes and operating margins in more depth. And then as Dan said, we'll take questions. First, the balance sheet. We ended the quarter with $51.1 million of cash investments, that's up $7.6 million from last April. We have been able to increase our cash position despite investments in production and infrastructure capacity and research and development. We reported operating cash flows of $14.9 million compared to $28.2 million last year. The reduction reflected an unusually strong working capital influence in the prior year, and we believe that this quarter's cash flows represent a solid performance. From a working capital perspective, inventories were down $5.6 million from the previous April and inventory turns improved over this time last year. Accounts receivable were up slightly in the fiscal 2014 first quarter to less than $600,000. Our average DSO was up 3 days due to the shift in sales mix. Our current ratio is 4.53 versus 3.28 in fiscal 2013. We strengthened our balance sheet through strong operating cash flows over the past year. Working capital increased by almost $15 million from last April. We believe we have the capacity to fund the investments we are making in our operations, as well as dividend growth. Turning now to investments and capital spending. We continue our commitment to invest in Raven. Capital expenditures were more than $29 million for each of the past 2 years and were $8.1 million in the fiscal 2014 first quarter. Specific investments include expanding our Engineered Films, extrusion and conversion capacity from multi-layer agricultural films, our reclaim production line designed to capture and recycle excess polymer material from internal manufacturing processes, and beginning the last phase of our corporate…

[Operator Instructions] Our first question comes from the line of Marc Heilweil from Spectrum.

I wonder if you could talk a little bit about execution and sales calls during the quarter? Do you feel like there were some shortfalls in those 2 areas, Dan?

Sure. I wouldn't say in the quarter that we had sales call shortfalls. I think our execution challenges, Marc, are more related to larger business development initiatives and things that we start several quarters before. And you guys have heard me talk about the importance of our business development pipeline. And certainly, we have market conditions that weren't helpful this quarter, but really a part of our performance is due to execution that doesn't really meet our standards on some of our larger BD pursuits. And we're working -- I'm personally working with each of our division VPs to improve on that ratio. And I will remind you, we do -- we maintain a mix of BD pursuits, some are slam dunks in our markets -- core market space and others are less likely and others have a high risk and a high return profile. And we keep some of each of those in our BD pipeline. But we need to execute better on those BD pursuits that we believe have the most promise. And part of what we're doing to improve on that is to sharpen our focus and narrow the number of pursuits that we're actively engaging on. We think that'll help. We're not necessarily paring down the amount of resources available to us, but we're narrowing those pursuits so that we can focus more on those that we believe have the best prospects for this year and to set us up for long-term growth.

And my follow-up is with regard to the new ag introductions planned for the second half. Would you -- I know you don't want to discuss the specifics of them, but could you just give us some idea of whether these are just incremental or will they involve some products that are additive to your line?

Sure. I'll tell you what I can that's out there or going to be released shortly. We'll have a brand-new field computer that we believe will give us opportunities to grow that part of our business. I suppose you could say that's incremental and that it'll eventually replace an existing line but it will bring new functionality and a better user interface and lots of features and capabilities that we don't have today. So that's part of what we'll introduce. Another part of what we'll introduce is a variety of products into our steering product line and that'll include the ability to function on a broader, a continuing broader line of ag equipment in both the tractors, sprayers and combines, as well as some specific brand new steering solutions that we'll be introducing throughout the summer and fall. And there's a few more products but I'm not able to give you a lot more color on those right now.

[Operator Instructions] And I currently see no additional questions in the queue at this time.

All right. Thank you, operator. And thank you all again for taking the time to join us on the call today. The Raven team is aggressively working to leverage our targeted investments, as I just spoke about and new product development, capacity expansion and new market penetration. And looking ahead to the rest of the fiscal '14, the quality of our business development pipeline remains encouraging and we're intently focused on execution and turning those opportunities into positive returns. We look forward to updating you on our progress throughout the year, and thanks again for joining us.