8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

May 20, 2005
Date of Report (Date of Earliest Event Reported)

RAVEN INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Commission File: 0-3136

South Dakota	46-0246171
(State of incorporation)	(IRS Employer Identification No.)

205 East 6^th Street
P.O. Box 5107
Sioux Falls, SD 57117-5107
(Address of principal executive offices)

(605) 336-2750
(Registrant’s telephone number including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c)under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

      Incorporated by reference is a press release issued by the Registrant on May 19, 2005 regarding earnings for the first quarter of fiscal year 2006, attached as Exhibit 99. The information filed in this current report on Form 8-K is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 and Section 11 of the Securities Act of 1933 or otherwise subject to the liabilities of those sections. Furnishing this current report on Form 8-K does not constitute an admission by Raven Industries, Inc. as to the materiality of any information contained in this current report that is required to be disclosed solely by Item 2.02.

Item 9.01. Financial Statements and Exhibits.

(c)	Exhibits.
	Exhibit No.	Description
	99	Raven Industries, Inc. press release dated May 19, 2005.

SIGNATURE

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Raven Industries, Inc.
 

/s/ Thomas Iacarella  

Thomas Iacarella 

Vice President and Chief Financial Officer 

Date: May 20, 2005

2

EXHIBIT INDEX

Exhibit Number	Description
99	Raven Industries, Inc. press release dated May 19, 2005

3

EX-99

Exhibit 99

RE:	Raven Industries, Inc.
	P.O. Box 5107
	Sioux Falls, SD 57117-5107

FOR FURTHER INFORMATION:

AT THE COMPANY:	AT FINANCIAL RELATIONS BOARD:
Tom Iacarella	Dennis Waite	Leslie Loyet	Tim Grace
VP & CFO	General Inquiries	Analyst Inquiries	Media Inquiries
(605) 336-2750	(708) 246-6265	(312) 640-6672	(312) 640-6741

SIC Codes: 3672, 3081, 3829

FOR IMMEDIATE RELEASE
THURSDAY, MAY 19, 2005

RAVEN INDUSTRIES REPORTS
RECORD SALES AND EARNINGS IN FIRST QUARTER

SIOUX FALLS, SD—May 19, 2005—Raven Industries, Inc. (RAVN: NasdaqNM) reported today that net income for its fiscal first quarter ended April 30, 2005, climbed 32 percent to a record $7.2 million, or 39 cents per share, from the year-ago’s 29 cents, making it the best quarter in the 49-year history of Raven.

“Except in our Aerostar segment, where we anticipated some decline, both the topline and operating income of our other three core businesses were very strong in this first quarter,” noted Raven President and CEO Ronald M. Moquist. “Our first quarter was particularly bolstered by our Engineered Films Division.” This segment generated an increase of 55 percent in sales and 38 percent in operating income by focusing on selling out productive capacity. “Our Autoboom product line, acquired in February from Montgomery Industries, is performing well, benefiting our Flow Controls Division, and we are seeing a nice turnaround in Electronic Systems.” Overall, sales for the first quarter climbed 32 percent to $50.7 million.

Segment Performance

Engineered Films Division (EFD) operating income climbed 38 percent to $4.1 million from $3.0 million a year ago. This division increased sales 55 percent to $16.1 million from $10.4 million in the year-earlier period. Shipments included residual demand for disaster film, while the division also saw significant growth in demand for pit liners for oil exploration. Higher product pricing offset some of the increases in raw material costs, but gross margins still declined from 33.7 percent to 30.2 percent of sales.

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Raven’s Flow Controls Division (FCD) “is off to a good start for the year,” Moquist said, with first-quarter sales increasing 22 percent to $16.1 million from $13.2 million. Operating income was up 15 percent to $5.9 million from $5.1 million last year. Sales of the division’s newly acquired automatic boom height control system, called Autoboom, were strong, reaching more than $1 million. The executive noted, however, that the first quarter is the seasonal peak for the year for Flow Controls and that the acquisition may make that seasonality more pronounced. FCD saw steady ongoing demand for its ag products, including SmarTrax, its GPS-based automatic steering system. Operating profit margins reflect higher spending for the division’s continuing investment in its research, product development and Precision Agriculture marketing initiatives.

The Electronic Systems Division (ESD) enjoyed a “nice recovery” in sales, which were up 47 percent to $13.3 million from a depressed $9.1 million a year earlier. Operating profits climbed to $2.1 million from $702,000 in the year-ago period. CEO Moquist said that Raven delivered a lower percentage of startup products and had improved operating efficiencies and throughput in the latest quarter.

Aerostar “was in line with expectations,” with sales declining nine percent to $5.2 million from $5.7 million while operating income fell to $937,000 vs. the $1.2 million reported a year earlier. A much lower level of shipments of cargo parachutes was primarily the cause of lower revenues. There was, however, an increase in shipments of high-altitude research balloons during the first quarter. At this point, Aerostar no longer expects to receive follow-on parachute orders from the US Army for delivery in the current fiscal year. “The Army is not moving forward as quickly as we originally expected,” Moquist explained, “but we believe our bids will be competitive and orders under long-term contracts will be issued for fiscal 2007 delivery.”

Outlook

Moquist said that at this early date he sees upcoming second quarter results modestly ahead of year-earlier sales and earnings, with the increases reaching double-digit levels. He added, “We see opportunities to replace the high level of disaster film shipped in the third and fourth quarters last year and anticipate a solid second half and another record year for both profits and sales.”

Balance Sheet Strength

The company’s balance sheet remains strong, with over $4 million in cash and investments. Cash balances are down $15 million from one year earlier due primarily to the special dividend of $11.3 million paid in May 2004 and the February 2005 acquisition of Montgomery Industries. Seasonal short-term borrowings of $4.5 million were required during the quarter, but were repaid by April 30.

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First-quarter cash flow from operating activities declined from $2.5 million last year to $1.3 million due to higher working capital requirements. Cash used for investing activities and dividends were also significantly higher. “The first quarter dividend increased from 5.5 to 7 cents per share, a 27 percent increase,” Moquist noted.

Conference Call Information

Raven has scheduled a conference call today at 2:00 p.m. Central Time to discuss its fiscal first quarter 2006 performance and related trends in its business. To access this call, log on to www.ravenind.com or www.vcall.com 15 minutes before the call to download the necessary software. Replays will be available through this website for 90 days.

About Raven Industries, Inc.

Raven is an industrial manufacturer that provides electronics manufacturing services, reinforced plastic sheeting and flow control devices to various markets.

Forward-Looking Statements

The Private Securities Litigation Reform Act provides a “safe harbor” for forward-looking statements. Certain information included in this Press Release and other materials filed or to be filed by the company with the Securities and Exchange Commission (as well as information included in statements made or to be made by the company) contains statements that are forward-looking. Although the company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, there is no assurance that such expectations will be achieved. Such assumptions involve important risks and uncertainties that could significantly affect results in the future. These risks and uncertainties include, but are not limited to, those relating to weather conditions, which could affect certain of the company’s primary markets, such as agriculture and construction, or changes in competition, raw material availability, technology or relationships with the company’s largest customers, any of which could adversely impact any of the company’s product lines. The foregoing list is not exhaustive and the company disclaims any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements.

On the Internet, information is available at www.ravenind.com, the company’s
website.

FINANCIAL TABLES FOLLOW...

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RAVEN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except earnings per share) (Unaudited)

	Three Months Ended April 30
						Fav (Unfav)
	2005		2004			Change
Net sales	$	50,704	$	38,408			32	%
Cost of goods sold		35,543		26,730
Gross profit		15,161		11,678			30	%
Selling, general, and administrative expenses		4,025		3,227
Operating income		11,136		8,451			32	%
Other (income) expense, net		38		(24	)
Income before income taxes		11,098		8,475			31	%
Income taxes		3,941		3,060
Net income	$	7,157	$	5,415			32	%
Net income per common share:
-basic	$	0.40	$	0.30			33	%
-diluted	$	0.39	$	0.29			34	%
Weighted average common shares outstanding:
-basic		18,033		18,077
-diluted		18,292		18,428

RAVEN INDUSTRIES, INC.
SALES AND OPERATING INCOME BY SEGMENT
(In thousands) (Unaudited)

	Three Months Ended April 30
							Fav (Unfav)
	2005			2004			Change
Net Sales:
Flow Controls	$	16,089		$	13,197			22	%
Engineered Films		16,092			10,413			55	%
Electronic Systems		13,321			9,082			47	%
Aerostar		5,202			5,716			(9	)%
Total Company	$	50,704		$	38,408			32	%
Operating Income (Loss):
Flow Controls	$	5,869		$	5,111			15	%
Engineered Films		4,119			2,986			38	%
Electronic Systems		2,090			702			198	%
Aerostar		937			1,228			(24	)%
Total Segment Income		13,015			10,027
Corporate Expenses		(1,879	)		(1,576	)		(19	)%
Total Company	$	11,136		$	8,451			32	%

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RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands) (Unaudited)

	April 30,		January 31,		April 30,
	2005		2005		2004
ASSETS
Cash, cash equivalents and short-term investments	$	4,148	$	9,619	$	19,282
Accounts receivable, net		29,206		25,370		22,007
Inventories		23,209		23,315		18,538
Prepaid expenses and other current assets		4,003		3,288		2,463
Total current assets		60,566		61,592		62,290
Property, plant and equipment, net		21,442		19,964		15,712
Other assets, net		9,749		6,953		7,720
	$	91,757	$	88,509	$	85,722
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of long-term debt	$	39	$	57	$	72
Accounts payable		6,252		10,322		4,470
Dividends payable		—		—		11,327
Accrued and other liabilities		12,243		10,571		8,961
Total current liabilities		18,534		20,950		24,830
Long-term debt, less current portion		—		—		39
Other liabilities		1,435		1,477		1,218
Stockholders’ equity		71,788		66,082		59,635
	$	91,757	$	88,509	$	85,722

RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED CASH FLOWS
(In thousands) (Unaudited)

	Three Months Ended April 30,
	2005			2004
Cash flows from operating activities
Net income	$	7,157		$	5,415
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,139			1,026
Deferred income taxes		(111	)		5
Other operating activities, net		(6,922	)		(3,909	)
Net cash provided by operating activities		1,263			2,537
Cash flows from investing activities
Capital expenditures		(2,409	)		(662	)
Acquisition of businesses		(2,685	)		(5	)
Other investing activities, net		497			—
Net cash used in investing activities		(4,597	)		(667	)
Cash flows from financing activities
Dividends paid		(1,262	)		(993	)
Purchase of treasury stock		(361	)		(113	)
Long-term debt principal payments		(18	)		(18	)
Other financing activities, net		(10	)		94
Net cash used in financing activities		(1,651	)		(1,030	)
Effect of exchange rate changes on cash		14			—
Net increase (decrease) in cash and cash equivalents		(4,971	)		840
Cash and cash equivalents at beginning of period		6,619			14,442
Cash and cash equivalents at end of period		1,648			15,282
Short-term investments		2,500			4,000
Cash, cash equivalents and short-term investments	$	4,148		$	19,282