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

August 17, 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 6th 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))

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition.
	Item 9.01. Financial Statements and Exhibits.
SIGNATURE
EXHIBIT INDEX
Press Release

Item 2.02. Results of Operations and Financial Condition.

     Incorporated by reference is a press release issued by the Registrant on August 17, 2005 regarding earnings for the second 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 August 17, 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: August 17, 2005

2

EXHIBIT INDEX

Exhibit Number	Description
99	Raven Industries, Inc. press release dated August 17, 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
Vice President & 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
WEDNESDAY, AUGUST 17, 2005

RAVEN INDUSTRIES ANNOUNCES RECORD SALES,
NET INCOME FOR SECOND QUARTER

SIOUX FALLS, SD—August 17, 2005—Raven Industries, Inc. (RAVN: NasdaqNM) today announced that record sales and earnings in its second quarter ended July 31, 2005, were driven by strong results in its Engineered Films Division (EFD) and a continuing turnaround in its Electronic Systems Division (ESD). Sales for the quarter rose 22 percent to $45.3 million from $37.1 million a year earlier while net income rose 31 percent to $4.8 million, or 26 cents per share, from $3.6 million, or 20 cents per share, in the year-ago quarter.

For its first six months, Raven reported total sales of $96.0 million, an increase of 27 percent from the $75.5 million a year earlier. Net income for the company’s first half rose to $11.9 million, or 65 cents per share, from $9.1 million, or 49 cents per share.

Ronald M. Moquist, President and CEO, said results were “better than our expectations going into the quarter. We are pleased to see that both Engineered Films and Electronic Systems were able to sustain the progress shown early in the year.” Revenue growth is expected to be more challenging in the second-half of the year because of comparisons to a period when EFD shipped over $9 million of disaster film, he said. “We see opportunities to replace most of those shipments and grow the bottom line,” Moquist added, “and we continue to be optimistic about having another outstanding year. Excluding the impact of a $1.3 million pre-tax write off taken in the third quarter last year, the third quarter this year could be flat to slightly up, but our fourth quarter should be very strong.”

Raven Industries, Inc.
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Segment Performance
Raven reported that its Engineered Films Division (EFD) sales climbed 45 percent to $17.4 million in the second quarter from $12.0 million a year earlier while operating income for the division rose 31 percent to $4.2 million from $3.2 million. Gross profits declined from 31.2 percent of sales last year in the second quarter to 28.1 percent this year. Higher plastic resin costs were only partially offset by higher selling prices. The division continues to bring additional extrusion and lamination capacity online, pushing additional sales volume with slightly lower margins into the marketplace. For the first six months, EFD sales totaled $33.5 million, up 50 percent, while operating income was $8.3 million vs. $6.2 million in the year-ago six months.

Electronics Systems Division (ESD) second-quarter sales rose 30 percent to $15.3 million from $11.7 million. Operating income climbed from $773,000 to $2.9 million. In the prior year, ESD operations were hampered by start-up costs for a new customer. Improved production efficiencies and quality initiatives drove profit margins across all product lines. For the first six months, ESD sales totaled $28.6 million vs. $20.8 million in the first six months of the previous fiscal year while operating income was $5.0 million, up from $1.5 million in the prior year.

Deliveries and profits in the Flow Controls Division (FCD) reflected the division’s seasonal low point during the second quarter. Sales, including those from the company’s acquisition of the assets of Montgomery Industries, Inc., a privately held Canadian corporation purchased in February 2005, rose 19 percent to $8.6 million, of which some $900,000 derived from Montgomery’s boom height-control system, called Autoboom™. Operating income declined 20 percent to $1.4 million from $1.8 million. For the first six months of the fiscal year, total sales were $24.7 million vs. $20.4 million a year earlier while operating income was $7.3 million against $6.9 million in the first half of last year, when agricultural equipment sales reached record highs. The high level of investment in research and development and marketing during this past year has reduced current results but enhanced our prospects for the future.

As anticipated, Aerostar sales in the second quarter fell to $3.9 million from $6.1 million with the drop caused by lower deliveries of military cargo parachutes. Operating income totaled $420,000 vs. $1.3 million in the year-earlier quarter. Sales of high-altitude research balloons, however, rose in the quarter. In June, NASA launched a scientific helium balloon from northern Sweden. After crossing the Atlantic Ocean, the mission ended successfully in northern Canada. NASA’s new transatlantic capability is made possible exclusively by huge Aerostar balloons. This provides more frequent opportunities for long-duration studies in astronomy and high-energy physics. For the first six months of the year, total sales were $9.1 million vs. $11.8 million for the comparable period a year earlier while operating income totaled $1.4 million vs. $2.6 million.

Raven Industries, Inc.
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Raven Industries, Inc.
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Balance Sheet and Cash Flows
The company’s cash and investment balances totaled $9.7 million at the end of the quarter compared to $11.3 million one year earlier. The increase in net income, partially offset by higher working capital needs, increased operating cash flows to $10.6 million for the six months ended July 31, 2005, from $9.0 million for the year-earlier period. Cash used in investing activities increased to $6.8 million for the six months due to the acquisition of Montgomery Industries in February 2005 and other investments in productive capacity. Dividends in the prior fiscal year included a special $11.3 million dividend paid in May 2004. Regular quarterly per-share dividends are up 27 percent over last year’s levels.

Conference Call Information
Raven has scheduled a conference call today at 2:00 p.m. Central Daylight Time to discuss its fiscal second-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.

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.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except earnings per share) (Unaudited)

	Three Months Ended July 31									Six Months Ended July 31
							Fav (Unfav)									Fav (Unfav)
	2005			2004			Change			2005			2004			Change
Net sales	$	45,304		$	37,077			22	%	$	96,008		$	75,485			27	%
Cost of goods sold		34,422			28,318						69,965			55,048
Gross profit		10,882			8,759			24	%		26,043			20,437			27	%
Selling, general and administrative expenses		3,583			3,108						7,608			6,335
Operating income		7,299			5,651			29	%		18,435			14,102			31	%
Other income, net		(92	)		(26	)					(54	)		(50	)
Income before income taxes		7,391			5,677			30	%		18,489			14,152			31	%
Income taxes		2,617			2,035						6,558			5,095
Net income	$	4,774		$	3,642			31	%	$	11,931		$	9,057			32	%
Net income per common share:
-basic	$	0.26		$	0.20			30	%	$	0.66		$	0.50			32	%
-diluted	$	0.26		$	0.20			30	%	$	0.65		$	0.49			33	%
Weighted average common
shares outstanding:
-basic		18,059			18,096						18,046			18,086
-diluted		18,315			18,423						18,306			18,425

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

	Three Months Ended July 31									Six Months Ended July 31
							Fav (Unfav)									Fav (Unfav)
	2005			2004			Change			2005			2004			Change
Net Sales:
Flow Controls	$	8,626		$	7,233			19	%	$	24,715		$	20,430			21	%
Engineered Films		17,445			11,995			45	%		33,537			22,408			50	%
Electronic Systems		15,300			11,743			30	%		28,621			20,825			37	%
Aerostar		3,933			6,106			(36	)%		9,135			11,822			(23	)%
Total Company	$	45,304		$	37,077			22	%	$	96,008		$	75,485			27	%
Operating Income (Loss):
Flow Controls	$	1,434		$	1,784			(20	)%	$	7,303		$	6,895			6	%
Engineered Films		4,184			3,190			31	%		8,303			6,176			34	%
Electronic Systems		2,903			773			276	%		4,993			1,475			239	%
Aerostar		420			1,326			(68	)%		1,357			2,554			(47	)%
Total Segment Income		8,941			7,073						21,956			17,100
Corporate Expenses		(1,642	)		(1,422	)		(15	)%		(3,521	)		(2,998	)		(17	)%
Total Company	$	7,299		$	5,651			29	%	$	18,435		$	14,102			31	%

-more-

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

	July 31,		January 31,		July 31,
	2005		2005		2004
ASSETS
Cash, cash equivalents and short-term investments	$	9,678	$	9,619	$	11,327
Accounts receivable, net		22,152		25,370		16,821
Inventories		25,073		23,315		21,008
Prepaid expenses and other current assets		3,533		3,288		1,888
Total current assets		60,436		61,592		51,044
Property, plant and equipment, net		22,444		19,964		16,031
Other assets, net		9,695		6,953		7,608
	$	92,575	$	88,509	$	74,683
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of long-term debt	$	26	$	57	$	73
Accounts payable		6,265		10,322		4,762
Accrued and other liabilities		9,819		10,571		7,091
Total current liabilities		16,110		20,950		11,926
Long-term debt, less current portion		11		—		20
Other liabilities		1,391		1,477		1,344
Stockholders’ equity		75,063		66,082		61,393
	$	92,575	$	88,509	$	74,683

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

	Six Months Ended July 31
	2005			2004
Cash flows from operating activities
Net income	$	11,931		$	9,057
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,412			1,975
Deferred income taxes		(264	)		60
Other operating activities, net		(3,464	)		(2,084	)
Net cash provided by operating activities		10,615			9,008
Cash flows from investing activities
Capital expenditures		(4,548	)		(1,805	)
Acquisition of businesses		(2,748	)		(5	)
Other investing activities, net		504			(15	)
Net cash used in investing activities		(6,792	)		(1,825	)
Cash flows from financing activities
Dividends paid		(2,527	)		(13,314	)
Purchase of treasury stock		(689	)		(1,059	)
Long-term debt principal payments		(40	)		(36	)
Other financing activities, net		10			111
Net cash used in financing activities		(3,246	)		(14,298	)
Effect of exchange rate changes on cash		(18	)		—
Net increase (decrease) in cash and cash equivalents		559			(7,115	)
Cash and cash equivalents at beginning of period		6,619			14,442
Cash and cash equivalents at end of period		7,178			7,327
Short-term investments		2,500			4,000
Cash, cash equivalents and short-term investments	$	9,678		$	11,327

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