-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ToQUFrBF6WqWSivz/EzunzGPBN9tt/LbunccRBTtgmA7ue2Q52ndy2j7LdOr2jog vV666qZ6029Qxgef1To5OQ== 0000897101-96-000160.txt : 19960418 0000897101-96-000160.hdr.sgml : 19960418 ACCESSION NUMBER: 0000897101-96-000160 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19960131 FILED AS OF DATE: 19960417 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: RAVEN INDUSTRIES INC CENTRAL INDEX KEY: 0000082166 STANDARD INDUSTRIAL CLASSIFICATION: APPAREL & OTHER FINISHED PRODS OF FABRICS & SIMILAR MATERIAL [2300] IRS NUMBER: 460246171 STATE OF INCORPORATION: SD FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-03136 FILM NUMBER: 96547832 BUSINESS ADDRESS: STREET 1: 205 E 6TH ST STREET 2: PO BOX 5107 CITY: SIOUX FALLS STATE: SD ZIP: 57117 BUSINESS PHONE: 6053362750 MAIL ADDRESS: STREET 1: P O BOX 5107 CITY: SIOUX FALLS STATE: SD ZIP: 57117-5107 10-K 1 FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended January 31, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to __________________ Commission file number 0-3136 RAVEN INDUSTRIES, INC. (Exact name of registrant as specified in its charter) South Dakota 46-0246171 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 205 E. 6th Street, Sioux Falls, South Dakota 57117 (Address of principal offices)(Zip Code) Registrant's telephone number, including area code (605) 336-2750 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered Common stock, $1 par value NASDAQ National Market System Securities registered pursuant to Section 12(g) of the Act: None Indicate by checkmark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months, and (2) has been subject to such filing requirements for the past ninety days. Yes _X_ No ___ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of voting stock held by nonaffiliates of the Registrant, based on the closing price of $16.375 per share as reported on the NASDAQ National Market System on April 15, 1996 was $68,726,399. Shares of common stock outstanding at April 15, 1996: 4,716,076. DOCUMENTS INCORPORATED BY REFERENCE The following table shows, except as otherwise noted, the location of information, required in this Form 10-K, in the registrant's Annual Report to Shareholders for the year ended January 31, 1996 and Proxy Statement for registrant's 1996 annual meeting, a definitive copy of which is to be filed on April 17, 1996. All such information set forth under the heading "Reference" herein below is incorporated herein by reference. A copy of the registrant's Annual Report to Shareholders for the year ended January 31, 1996 is included in this report. PART I. ITEM IN FORM 10-K REFERENCE Item 1. Business Business, pages 4-7, this document and Business Segments, page 12, Annual Report to Share holders Item 2. Properties Properties, pages 8-9, this document Item 3. Pending Legal Pending Legal Proceedings, Proceedings page 9, this document Item 4. Submission of Matters Submission of Matters to a to a Vote of Vote of Security Security Holders Holders, page 9, this document PART II. Item 5. Market for the Regis- Quarterly Summary, page 21, trant's Common Eleven-year Financial Equity and Related Summary, pages 14-15, Stockholder Matters and inside back cover, Annual Report to Shareholders Item 6. Selected Financial Data Eleven-Year Financial Summary, pages 14-15, Annual Report to Shareholders Item 7. Management's Discussion Financial Review and and Analysis of Analysis, pages 16-20, Financial Condition Annual Report to Share and Results of holders Operations Item 8. Financial Statements and Annual Report to Share- Supplementary Data holders, pages 22-31 Item 9. Changes in and Disagree- Changes in and Disagree- ments with Account- ments with Accountants ants on Accounting on Accounting and and Financial Financial Disclosure, Disclosure page 10, this document PART III. ITEM IN FORM 10-K REFERENCE Item 10. Directors of the Regis- Election of Directors and trant Executive Compensation, Proxy Statement Executive Officers of Executive Officers of the Registrant Registrant, page 10, this document and other matters, Proxy Statement Item 11. Executive Compensation Executive Compensation, Proxy Statement Item 12. Voting Securities and Ownership of Common Stock, Principal Holders Proxy Statement Thereof Item 13. Certain Relationships Election of Directors, and Related Proxy Statement Transactions PART IV. Item 14. Exhibits, Financial Exhibits, Financial Statement Schedule Statement Schedule and Reports on Form and Reports on Form 8-K. 8-K, pages 10-12, this document. RAVEN INDUSTRIES, INC. FORM 10-K year ended January 31, 1996 Item 1. Business General Raven Industries, Inc. was incorporated in February 1956 under the laws of the State of South Dakota and began operations later that same year. The following terms - the company, Raven or the registrant - are intended to apply to Raven Industries, Inc. and its consolidated subsidiaries listed in Exhibit 21 to this report. Raven is headquartered in Sioux Falls, South Dakota, employing approximately 1,400 persons in seven states. The company began operations as a manufacturer of high altitude research balloons. It has diversified over the years to supply specialized products for a number of markets, including industrial, recreation, agriculture, automotive and defense. Many of these product lines are an extension of technology and production methods developed in the original balloon business. The automotive product lines were added via acquisition in fiscal 1987. The company has three business segments: Electronics, Plastics and Sewn Products. Product lines have been grouped in these segments based on common technologies, production methods and raw materials. However, the product markets identified above may be served by more than one business segment. Page 12 in the company's Annual Report to Shareholders, incorporated herein by reference, provides financial information concerning the three business segments. Business Segments Electronics - Historically, this segment has provided a wide variety of assemblies and controls to the U.S. Department of Defense and other defense contractors. The company is expanding this segment's capabilities in contract electronics assembly for commercial customers to offset a continuing decline in defense contracts. Assemblies manufactured by the Electronics segment include communication, computer and other products where high quality is critical. Flow control devices, used primarily for precision farming applications, are designed and produced within this business segment. These devices are also used for roadside and turf spraying. Management believes that acquisition of new technologies for height and depth control will expand the company's capabilities to support precision farming in future years. The segment also builds and installs automated control systems for use in feedmills and bakery plants. Defense and other contract electronics assembly sales are made in response to competitive bid requests by defense agencies or other contractors. The level and nature of competition varies with the type of product, but the company frequently competes with a number of assembly manufacturers on any given bid request. Flow control devices are mainly sold directly by home office personnel to original equipment manufacturers (OEMs) and distributors. Company sales representatives sell automated systems directly to feedmills and bakeries. Considerable competition exists for feedmill business while the bakery systems business is relatively new, with no established market. Plastics - Segment products include heavy-duty sheeting for a number of markets; fiberglass and polyethylene tanks for industrial and agricultural use; high altitude balloons for public and commercial research and pickup-truck toppers sold in the small truck aftermarket. Plastic sheeting is used as a protective covering in construction, industrial and oilfield operations and agriculture. The company sells plastic sheeting to distributors in each of the various markets it serves. There are several suppliers of sheeting in the U.S., competing on both price and product availability. The company believes it is one of the largest sheeting converters. The company extrudes all of the films used for producing high altitude balloons and a significant portion of the film converted for other commercial uses. Storage tanks are sold both by home office personnel and manufacturer's representatives, to OEMs and through distributors. Competition comes not only from many other plastic tank manufacturers, but also from manufacturers using other materials (aluminum and steel). The company makes a number of custom fiberglass products, but polyethylene tanks tend to be commodity products and subject to intense price competition. Research balloons are sold directly to public agencies (usually funded by NASA) or commercial users. Demand is small but stable. Raven is the largest balloon supplier for high-altitude research in the United States. Pickup-truck toppers are sold throughout the U.S. through a dealer network. The overall market for toppers, which declined in the late 1980's and early 1990's as alternatives to pickups with toppers, primarily minivans and sport utility vehicles increased in popularity, has recovered due to strong sales of pickup trucks. The number of topper manufacturers has fallen but is still substantial. Sewn Products - This segment produces and sells outerwear for a wide variety of recreational activities, including skiing, hunting and fishing. The U.S. Department of Defense has also been a major customer of this segment, purchasing decelerator devices and clothing, such as extreme-cold weather uniforms and chemical protective suits. Military sales in this segment declined significantly in fiscal 1995 and 1996 as the Company shifted its production capacity to commercial products. The segment also manufactures sport balloons principally for recreational use. Another major product is large inflatable devices, which enjoy a number of uses, such as parade floats and advertising media. Recreational outerwear is sold both to retailers through an independent sales representative network, and by home office personnel to catalog retailers. There are numerous outerwear manufacturers in the U.S. and abroad and considerable competition exists. The company competes successfully in the medium-to-higher priced range of the market where specialty fabrics such as GoreTex (R) are involved, emphasizing quality, service and manufacturing expertise. The segment sells balloons through a dealer network. Raven is the originator of modern hot-air ballooning and continues to be a leader in design and technical expertise. The company believes it has approximately 40 percent of the U.S. hot-air balloon market, although others are able to compete with lower-cost products. Inflatables are sold direct to corporate customers and are subject to varying levels of competition, generally, the more customized the product, the greater the company's market share. Major Customer Information No customer accounted for more than 10 percent of consolidated sales in fiscal 1996. However, the company sells sewn products to several large customers. In fiscal 1996, the top five customers in the Sewn Products segment accounted for more than 60 percent of sales in that segment. Although the loss of these accounts would adversely affect profitability, the company believes that, over the long term, addition of new customers and sales growth from existing customers would replace any lost sales. Seasonality/Working Capital Requirements Some seasonality in demand exists for the company's outerwear products, many of which are built in spring/summer for summer/fall delivery. The majority of these sales carry net 30 day terms, although some winter-dated terms are available. Sales to the agricultural market (flow controls, plastic tanks) also experience some seasonality, building in the fall for winter/spring delivery. Some plastics and flow controls sales offer extended dating terms as well. The resulting fluctuations in inventory and accounts receivable balances may require and have required seasonal short-term financing. Raw Materials The company obtains a wide variety of materials from numerous vendors. Principal materials include numerous electronic components for the Electronics segment; various plastic resins for the Plastics segment; and fabric for the Sewn Products segment. The company has not experienced any significant shortages or other problems in purchasing raw materials to date, and alternative sources of supply are generally available. However, it is impossible to predict future material shortages and their impact on Raven. Patents The company owns a number of patents. However, Raven does not believe that its business as a whole is materially dependent on any one patent or related group of patents. It believes the successful manufacture and sale of its products generally depend more upon its technical expertise and manufacturing skills. Research and Development The industry segments noted above conduct ongoing research and development efforts. The majority of the company's research and development expenditures are directed towards new products in the Electronics and Plastics segments. Total company research and development costs are disclosed in Note 1 to the consolidated financial statements located on page 25 of the Annual Report to Shareholders, incorporated herein by reference. Environmental Matters Raven believes that it is in compliance in all material respects with applicable federal, state and local environmental laws and regulations. Expenditures relating to compliance for operating facilities incurred in the past and anticipated in the future have not materially affected capital expenditures, earnings or competitive position. Backlog As of February 1, 1996, the company's backlog of firm orders totaled $32.5 million. Comparable backlog amounts as of February 1, 1995 and 1994 were $29.7 million and $36.4 million, respectively. Item 2. Properties
Location General Character Ownership 205 E. 6th Street 150,000 square feet, 6 stories, corporate offices In Fee Sioux Falls, South Dakota and manufacturing facility for electronics and sewn products 12 acres of land with buildings, (1) 59,120 square feet, building for research In Fee located at Airbase, Sioux Falls, and hot-air balloon manufacturing South Dakota (2) 73,400 square feet, building for manufac- In Fee ture and storage of plastic tank products (3) 10,080 square feet, machine shop In Fee 10 acres of land with buildings, (1) 31,392 square feet, building for plastic In Fee located at Airbase, Sioux Falls, tank manufacturing plus offices South Dakota (2) 52,500 square feet, building for extrusion In Fee and manufacturing of plastic sheeting (3) 20,450 square feet, building for inflatable In Fee manufacturing 200 E. 6th Street 29,000 square feet, offices and sewing facility In Fee* Sioux Falls, South Dakota 196 E. 6th Street 68,000 square feet, sewn products warehouse In Fee Sioux Falls, South Dakota building 100 E. 6th Street 6,200 square feet, training/meeting center In Fee Sioux Falls, South Dakota Dunnell, Minnesota 83,800 square feet, three buildings, for pickup In Fee topper offices, manufacturing plant and truck maintenance shop Eloy, Arizona 51,600 square feet, pickup truck topper In Fee manufacturing plant St. Louis, Missouri 21,000 square feet, electronic control systems In Fee** sales and manufacturing plant Albertville, Alabama 39,000 square feet, plastic tank manufacturing In Fee plant Gordo, Alabama 21,000 square feet, feed and bakery mixing Leased, and weighing device manufacturing Short- term Springfield, Ohio 22,500 square feet, reinforced plastic sheeting Leased, sales and manufacturing plant Short- term 5 acres of land located at Construction site for 30,000 square feet reinforced In Fee Springfield, Ohio plastic sheeting manufacturing plant to be completed in 1997. Washington Court House, Ohio 22,000 square feet, plastic tank manufacturing plant In Fee* plus 3,150 square feet sheltered outside storage 6.95 acres of land located at Undeveloped land adjacent to other Company In Fee Airbase, Sioux Falls, South Dakota property Beresford, South Dakota 20,000 square feet, sewing plant Leased, Short- term Huron, South Dakota 24,100 square feet, sewing plant In Fee* Parkston, South Dakota 14,000 square feet, sewing plant In Fee Salem, South Dakota 15,000 square feet, sewing plant In Fee DeSmet, South Dakota 15,000 square feet, sewing plant In Fee Madison, South Dakota 20,000 square feet, sewing plant In Fee*
*Subject to repayment of mortgage **Subject to repayment of Industrial Revenue Bonds The company believes that its properties are in good condition and are adequate for the present needs of its business. Item 3. Pending Legal Proceedings There are no pending legal proceedings wherein the claim for damages exceeds 10% of the registrant's current assets. Item 4. Submission of Matters to a Vote of Security Holders There was no matter submitted during the fourth quarter to a vote of security holders. Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure None Item 10. Executive Officers of the Registrant Name Age Position Period Served David A. Christensen 61 President and Chief April 1971 to present Executive Officer Gary L. Conradi 56 Vice President, January 1980 to present Corporate Services Ronald M. Moquist 50 Executive Vice January 1979 to present President Arnold J. Thue 57 Vice President, January 1980 to present Finance,Secretary and Treasurer Each of the above named individuals serves at the pleasure of the Board of Directors. Each serves on a year-to-year basis. Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K (a) Consolidated Financial Statements and Schedule 1. Incorporated by reference from the attached 1996 Annual Report to Shareholders: Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Report of Independent Accountants 2. Included in Part II: Report of Independent Accountants on Financial Statement Schedule Schedule II - Valuation and Qualifying Accounts The following schedules are omitted for the reason that they are not applicable or are not required: I, III and IV. (b) Reports on Form 8-K There were no reports filed on Form 8-K during the fourth quarter ended January 31, 1996. (c) Exhibits filed Exhibit Number Description 3(a) Articles of Incorporation of Raven Industries, Inc. and all amendments thereto.* 3(b) By-Laws of Raven Industries, Inc.* 3(c) Extract of Shareholders Resolution adopted on April 7, 1962 with respect to the by-laws of Raven Industries, Inc.* 4(a) Rights Agreement dated as of March 16, 1989 between Raven Industries, Inc. and Norwest Bank Minnesota, National Association (incorporated by reference to Exhibit 1 to the Company's Report on Form 8-K dated March 16, 1989). 10(a) Change in Control Agreement between Raven Industries, Inc. and David A. Christensen dated as of March 17, 1989.* 10(b) Change in Control Agreement between Raven Industries, Inc. and Gary L. Conradi dated as of March 17, 1989.* 10(c) Change in Control Agreement between Raven Industries, Inc. and Ronald M. Moquist dated as of March 17, 1989.* 10(d) Change in Control Agreement between Raven Industries, Inc. and Arnold J. Thue dated as of March 17, 1989.* 10(f) The Raven Industries, Inc. Health and Survivor Benefit Plan.* 10(g) The Raven Industries, Inc. Post-Retirement Health and Survivor Benefit Plan.* 10(h) Deferred Compensation Plan between Raven Industries, Inc. and David A. Christensen dated as of June 1, 1986.* 10(i) Trust Agreement between Raven Industries, Inc. and Norwest Bank South Dakota, N.A. dated April 26, 1989.* 10(n) Form of Incentive Stock Option Agreements.* 10(o) Form of Nonqualified Stock Option Agreements.* 10(p) Form of Amendment Agreement relating to outstanding Incentive Stock Options.* 10(q) Raven Industries, Inc. 1990 Stock Option Plan adopted January 30, 1990 (incorporated by reference to Exhibit A to the Company's definitive Proxy Statement filed April 25, 1990). 11 Detailed Computation of Earnings per Share. 13 1996 Annual Report to Shareholders (only those portions specifically incorporated herein by reference shall be deemed filed with the Commission). 21 Subsidiaries of the Registrant. 23 Consent of Independent Accountants. 27 Financial Data Schedule (for S.E.C. only). * Incorporated by reference to corresponding Exhibit Number of the Company's Form 10-K for the year ended January 31, 1989. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. RAVEN INDUSTRIES, INC. (Registrant) April 17, 1996 By: /S/ David A. Christensen Date David A. Christensen President (Principal Executive Officer and Director) Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. April 17, 1996 By: /S/ David A. Christensen Date David A. Christensen President (Principal Executive Officer and Director) April 17, 1996 /S/ Arnold J. Thue Date Arnold J. Thue Vice President, Finance, Secretary and Treasurer (Principal Financial and Accounting Officer) Directors: April 17, 1996 /S/ Conrad J. Hoigaard Date Conrad J. Hoigaard April 17, 1996 /S/ John C. Skoglund Date John C. Skoglund April 17, 1996 /S/ Mark E. Griffin Date Mark E. Griffin April 17, 1996 /S/ Kevin T. Kirby Date Kevin T. Kirby April 17, 1996 /S/ Anthony W. Bour Date Anthony W. Bour REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE To the Board of Directors and Stockholders of Raven Industries, Inc.: Our report on the consolidated financial statements of Raven Industries, Inc. and Subsidiaries has been incorporated by reference in this Form 10-K from page 32 of the 1996 Annual Report to Shareholders of Raven Industries, Inc. In connection with our audits of such financial statements, we have also audited the related financial statement schedule listed in Item 14.(a)2. on page 10 of this Form 10-K. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information required to be included therein. COOPERS & LYBRAND L.L.P. Minneapolis, Minnesota March 7, 1996 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS for the years ended January 31, 1996, 1995 and 1994 (Dollars in thousands)
Column A Column B Column C Column D Column E -------- ---------- ------------------------ ----------- -------- Additions ------------------------ Balance at Charged to Charged to Deductions Beginning Costs and Other From Balance at Description of Year Expenses Accounts Reserves(1) End of Year Deducted in the balance sheet from the asset to which it applies: Allowance for doubtful accounts: Year ended January 31, 1996 $350 $ 68 None $ 78 $340 ==== ==== ==== ==== Year ended January 31, 1995 $350 $135 None $135 $350 ==== ==== ==== ==== Year ended January 31, 1994 $335 $180 None $165 $350 ==== ==== ==== ====
Note: (1) Represents uncollectible accounts receivable written off during the year, net of recoveries. EX-11 2 EXHIBIT 11 DETAILED COMPUTATION OF EARNINGS PER SHARE (Dollars in thousands, except per share data)
Year Ended January 31 ------------------------------------ PER SHARE DATA 1996 1995 1994 ---------- ---------- ---------- Net income $ 6,197 $ 6,088 $ 6,954 ========== ========== ========== Net income per common and common equivalent shares: Primary $ 1.30 $ 1.27 $ 1.45 ========== ========== ========== Fully diluted (1) $ 1.29 $ 1.27 $ 1.45 ========== ========== ========== AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES Primary: Weighted average number of common shares outstanding 4,735,223 4,726,026 4,683,812 Common equivalent shares: Dilutive stock options, using Treasury Stock Method 46,962 65,057 111,983 ---------- ---------- ---------- 4,782,185 4,791,083 4,795,795 ========== ========== ========== Fully diluted (1): Weighted average number of common shares outstanding 4,735,223 4,726,026 4,683,812 Common equivalent shares: Dilutive stock options, using Treasury Stock Method 51,227 65,057 111,983 ---------- ---------- ---------- 4,786,450 4,791,083 4,795,795 ========== ========== ==========
(1) This calculation is submitted in accordance with Regulation S-K item 601(b)(11) although not required by footnote 2 to paragraph 14 of APB Opinion No. 15 because it results in dilution of less than 3%. EX-13 3 BUSINESS SEGMENTS
(Dollars in thousands) Years ended January 31 1996 1995 1994 1993 1992 1991 - ------------------------------------------------------------------------------------------------------- ELECTRONICS Sales ..................... $ 32,962 $ 31,959 $ 35,771 $ 34,538 $ 35,243 $ 26,420 Operating income .......... 4,600 2,753(a) 4,529 5,146 5,963 3,006 Identifiable assets ....... 19,204 16,912 18,838 19,082 15,622 12,832 Capital expenditures ...... 807 552 985 953 823 714 Depreciation & amortization 1,077 872 804 712 639 470 PLASTICS Sales ..................... $ 55,281 $ 48,971 $ 40,386 $ 36,070 $ 31,568 $ 32,998 Operating income .......... 3,267 3,470 2,815 2,625 2,406 2,045 Identifiable assets ....... 26,092 25,817 16,796 13,769 12,874 13,977 Capital expenditures ...... 2,973 6,387 3,587 1,305 1,194 926 Depreciation & amortization 2,414 1,845 1,263 1,245 1,302 1,417 SEWN PRODUCTS Sales ..................... $ 32,201 $ 40,790 $ 45,311 $ 40,606 $ 33,798 $ 26,084 Operating income (loss) ... 1,694 2,913 3,096 1,375 (231) 2,260 Identifiable assets ....... 13,934 16,384 16,510 17,760 12,879 13,819 Capital expenditures ...... 396 765 1,141 888 1,620 1,419 Depreciation & amortization 719 832 803 683 570 355 CORPORATE & OTHER Identifiable assets ....... $ 8,323 $ 6,523 $ 8,453 $ 4,202 $ 5,153 $ 3,475 Capital expenditures ...... 10 49 71 13 235 118 Depreciation & amortization 32 33 27 23 26 27 TOTAL COMPANY Sales ..................... $ 120,444 $ 121,720 $ 121,468 $ 111,214 $ 100,609 $ 85,502 Operating income .......... 9,561 9,136(a) 10,440 9,146 8,138 7,311 Identifiable assets ....... 67,553 65,636 60,597 54,813 46,528 44,103 Capital expenditures ...... 4,186 7,753 5,784 3,159 3,872 3,177 Depreciation & amortization 4,242 3,582 2,897 2,663 2,537 2,269
(a) Includes the $1.8 million Beta Raven charge (See Note 4). PRODUCT LINES BY BUSINESS SEGMENT [GRAPHIC] AN ELECTRONICS GRAPHIC * Contract electronics assembly * Flow controls-precision farming * Feedmill and bakery automation * Military radio assemblies [GRAPHIC] A PLASTICS GRAPHIC * Sheeting * Storage/sprayer tanks * Research balloons * Pickup-truck toppers [GRAPHIC] A SEWN PRODUCTS GRAPHIC * Performance outerwear * Sport balloons * Inflatables 12 ELEVEN-YEAR FINANCIAL SUMMARY
(Dollars in thousands, except per share data) Years ended January 31 1996 1995 1994 1993 1992 - ----------------------------------------------------------------------------------------------------------------- OPERATIONS FOR YEAR Net sales ................................. $ 120,444 $ 121,720 $ 121,468 $ 111,214 $ 100,609 Gross profit .............................. 22,660 23,968 23,574 21,048 19,109 Operating income .......................... 9,561 9,136(a) 10,440 9,146 8,138 Pretax income ............................. 9,566 9,372 10,638 9,182 8,067 Net income ................................ 6,197 6,088 6,954 6,030 5,306 Net income % of sales ..................... 5.1% 5.0% 5.7% 5.4% 5.3% Net income % of beginning equity .......... 13.6% 14.8% 19.6% 19.7% 20.2% Cash dividends ............................ 2,130 1,843 1,545 1,316 1,165 FINANCIAL POSITION Current assets ............................ $ 45,695 $ 43,795 $ 45,037 $ 42,476 $ 34,798 Current liabilities ....................... 14,771 15,078 16,088 15,253 11,284 Working capital ........................... 30,924 28,717 28,949 27,223 23,514 Current ratio ............................. 3.09 2.90 2.80 2.78 3.08 Net plant and equipment ................... 18,069 18,570 13,371 10,457 9,947 Total assets .............................. 67,553 65,636 60,597 54,813 46,528 Long-term debt ............................ 2,816 4,179 2,539 3,224 3,676 Shareholders' equity ...................... 49,151 45,526 41,100 35,530 30,601 Long-term debt/total capitalization ....... 5.4% 8.4% 5.8% 8.3% 10.7% Inventory turnover (CGS/year-end inventory) 4.1 4.4 4.4 3.8 4.2 CASH FLOWS PROVIDED BY (USED IN) Operating activities ...................... $ 9,687 $ 7,452 $ 11,257 $ 3,475 $ 7,489 Investing activities ...................... (4,158) (10,000) (5,908) (3,107) (3,886) Financing activities ...................... (4,029) 406 (2,042) (1,659) (2,518) Increase (decrease) in cash ............... 1,500 (2,142) 3,307 (1,291) 1,085 COMMON STOCK DATA Net income per share ...................... $ 1.30 $ 1.27 $ 1.45 $ 1.27 $ 1.13 Cash dividends per share .................. 0.45 0.39 0.33 0.28 0.25 Book value per share ...................... 10.28 9.62 8.76 7.60 6.63 Stock price range during year High ................................... 20.75 24.50 23.50 21.50 15.83 Low .................................... 15.50 18.00 18.00 13.83 8.00 Shares outstanding, average (in thousands) 4,782 4,791 4,796 4,763 4,713 Shares outstanding, year-end (in thousands) 4,716 4,735 4,694 4,676 4,629 Number of shareholders, year-end .......... 3,190 3,031 3,173 3,147 2,775 OTHER DATA Average number of employees ............... 1,368 1,414 1,435 1,316 1,252 Sales per employee ........................ $ 88 $ 86 $ 85 $ 85 $ 80 Backlog ................................... $ 32,539 $ 29,661 $ 36,403 $ 49,033 $ 48,200 (WIDE TABLE CONTINUED) Years ended January 31 1991 1990 1989 1988 1987 1986 - ------------------------------------------------------------------------------------------------------------------------------ OPERATIONS FOR YEAR Net sales ................................. $ 85,502 $ 90,973 $ 77,563 $ 64,305 $ 52,303 $ 41,899 Gross profit .............................. 17,685 18,177 14,857 14,292 12,303 9,538 Operating income .......................... 7,311 7,461 5,127 4,983 4,250 2,518 Pretax income ............................. 7,071 6,831 4,578 4,390 3,919 2,412 Net income ................................ 4,605 4,235 2,930 2,656 2,122 1,611 Net income % of sales ..................... 5.4% 4.7% 3.8% 4.1% 4.1% 3.8% Net income % of beginning equity .......... 20.2% 19.7% 15.3% 15.5% 13.5% 11.0% Cash dividends ............................ 1,014 849 732 680 659 653 FINANCIAL POSITION Current assets ............................ $ 33,900 $ 30,570 $ 24,976 $ 21,795 $ 18,416 $ 17,932 Current liabilities ....................... 12,147 11,247 9,633 8,799 6,621 5,177 Working capital ........................... 21,753 19,323 15,342 12,997 11,795 12,755 Current ratio ............................. 2.79 2.72 2.59 2.48 2.78 3.46 Net plant and equipment ................... 8,368 7,163 8,702 9,672 7,855 5,047 Total assets .............................. 44,103 39,547 35,892 33,920 28,847 23,899 Long-term debt ............................ 4,679 4,966 4,115 5,254 4,485 2,742 Shareholders' equity ...................... 26,236 22,802 21,448 19,170 17,155 15,659 Long-term debt/total capitalization ....... 15.1% 17.5% 15.7% 20.9% 20.2% 14.6% Inventory turnover (CGS/year-end inventory) 3.4 4.1 4.6 4.1 3.5 4.5 CASH FLOWS PROVIDED BY (USED IN) Operating activities ...................... $ 5,583 $ 2,404 $ 3,908 $ 4,108 $ 2,046 $ 2,721 Investing activities ...................... (3,113) (1,308) (1,331) (3,598) (4,545) (1,733) Financing activities ...................... (2,071) (1,875) (1,869) 274 (1,084) (542) Increase (decrease) in cash ............... 399 (779) 708 784 (3,583) 446 COMMON STOCK DATA Net income per share ...................... $ 0.98 $ 0.87 $ 0.61 $ 0.55 $ 0.45 $ 0.34 Cash dividends per share .................. 0.22 0.18 0.15 0.14 0.14 0.14 Book value per share ...................... 5.77 5.01 4.48 4.03 3.63 3.34 Stock price range during year High ................................... 9.75 10.00 5.75 7.09 5.59 4.87 Low .................................... 6.42 5.33 4.37 4.21 3.59 3.33 Shares outstanding, average (in thousands) 4,704 4,839 4,826 4,811 4,754 4,737 Shares outstanding, year-end (in thousands) 4,559 4,554 4,785 4,758 4,734 4,686 Number of shareholders, year-end .......... 2,526 1,898 1,925 2,000 1,869 1,859 OTHER DATA Average number of employees ............... 1,141 1,234 1,138 1,019 864 796 Sales per employee ........................ $ 75 $ 74 $ 68 $ 63 $ 61 $ 53 Backlog ................................... $ 53,587 $ 42,078 $ 33,436 $ 21,424 $ 19,808 $ 19,051
All per share, shares outstanding and market price data reflect the October 1992 three-for-two and the July 1989 two-for-one stock splits. All other figures are as reported. (a) Includes the $1.8 million Beta Raven charge (See Note 4). 14 AND 15 FINANCIAL REVIEW AND ANALYSIS RESULTS OF OPERATIONS: MARGIN ANALYSIS (In thousands, except per share data)
FISCAL 1996 Fiscal 1995 Fiscal 1994 % % % % % % AMOUNT SALES CHANGE Amount Sales Change Amount Sales Change - -------------------------------------------------------------------------------------------------------------------------- Net sales .................. $120,444 100.0 -1.0 $121,720 100.0 + 0.2 $121,468 100.0 + 9.2 Gross profit ............... 22,660 18.8 -5.5 23,968 19.7 + 1.7 23,574 19.4 +12.0 Beta Raven charge .......... 1,800 1.5 Other operating expenses ... 13,099 10.9 +0.5 13,032 10.7 - 0.8 13,134 10.8 +10.4 Operating income ........... 9,561 7.9 +4.7 9,136 7.5 -12.5 10,440 8.6 +14.1 Income before income taxes . 9,566 7.9 +2.1 9,372 7.7 -11.9 10,638 8.8 +15.9 Income taxes ............... 3,369 2.8 +2.6 3,284 2.7 -10.9 3,684 3.0 +16.9 Net income ................. 6,197 5.1 +1.8 6,088 5.0 -12.5 6,954 5.7 +15.3 Net income per share ....... 1.30 +2.4 1.27 -12.4 1.45 +14.2 Average shares outstanding . 4,782 -0.2 4,791 -0.1 4,796 + 0.7 Effective income tax rate .. 35.2% +0.6 35.0% +1.2% 34.6% + 0.9
LONG-TERM PERFORMANCE Three factors dominated the company's financial performance in fiscal 1996: the warm winter of 1994-1995 depressed outerwear sales, startup costs at a new pickup-truck topper plant were higher than planned, and the loss of defense orders in the Electronics segment was more rapid than expected. Sales have been flat over the past three years. Growth in commercial business was offset by the drop in defense sales to the U.S. government. Commercial sales were $96.7 million in fiscal 1994 and grew to $116.4 million in fiscal 1996. Although the company continues to bid on defense contracts, this activity is no longer critical to the success of the company. Defense revenues were only $4.1 million in fiscal 1996, down from $24.8 million in fiscal 1994. Net earnings of $6.2 million or $1.30 per share, although below management expectations, were the second highest in company history. The company returned nearly 14% on shareholders equity, and 5% on sales; increased the book value of the company by 7%; paid a record per share dividend and invested for future growth. Fiscal years 1996 1995 1994 1993 1992 1991 - -------------------------------------------------------------------- Net income as % of Sales ............ 5.1% 5.0% 5.7% 5.4% 5.3% 5.4% Average assets ... 9.3% 9.6% 12.1% 11.9% 11.7% 11.0% Beginning equity . 13.6% 14.8% 19.6% 19.7% 20.2% 20.2% 16 SEGMENT ANALYSIS The following table summarizes sales and gross profits in the company's three business segments for each of the past three fiscal years: SALES (Dollars in thousands) 1996 1995 1994 AMOUNT % CHANGE Amount % Change Amount % Change - ------------------------------------------------------------------------- Electronics . $ 32,962 + 3.1 $ 31,959 - 10.7 $ 35,771 + 3.6 Plastics .... 55,281 +12.9 48,971 + 21.3 40,386 + 12.0 Sewn Products 32,201 -21.1 40,790 - 10.0 45,311 + 11.6 -------- -------- -------- Total ....... $120,444 - 1.0 $121,720 + 0.2 $121,468 + 9.2 GROSS PROFITS (Dollars in thousands) 1996 1995 1994 AMOUNT % SALES Amount % Sales Amount % Sales - ---------------------------------------------------------------------------- Electronics . $ 7,841 23.8 $ 7,581 23.7 $ 7,767 21.7 Plastics .... 9,450 17.1 9,227 18.8 8,164 20.2 Sewn Products 5,369 16.7 7,160 17.6 7,643 16.9 -------- -------- -------- Total ....... $22,660 18.8 $23,968 19.7 $23,574 19.4 ELECTRONICS SEGMENT FISCAL 1996 VERSUS FISCAL 1995 Sales of flow control devices for precision farming increased by more than 30% in fiscal 1996 and totaled nearly $13.5 million. Defense electronics sales dropped from $10.6 million in fiscal 1995 to $3.9 million in fiscal 1996 as a result of lower levels of procurement by the U.S. government. Higher deliveries under commercial contracts partially offset the reduction of defense contract activity. Beta Raven sales of process control systems were at approximately the same level as in fiscal 1995. The gross profit increase reflected higher sales of commercial products. Additionally, improved efficiencies at Beta Raven raised their gross profit rate. These improvements were partially offset by the impact of idle capacity that resulted from the drop in defense business. FISCAL 1995 VERSUS FISCAL 1994 Defense electronics sales decreased from $13.6 million in fiscal 1994 to $10.6 million in fiscal 1995. Sales of bakery process control systems produced by the company's Beta Raven subsidiary also declined. Agricultural flow control devices experienced a 24% sales increase as new products were well received in the market. An improved overall gross profit rate in the Electronics Segment partially offset the profit impact of lower sales in fiscal 1995. Agricultural electronics carried higher margins than the government business replaced. Profitability also improved on defense shipments in fiscal 1995. During fiscal 1995, it became apparent that the approach taken by the company's Beta Raven subsidiary to automate bakeries was more technologically complex than originally estimated. Raven management assumed more direct control of this subsidiary, replacing top management. The number of Beta Raven employees was reduced by 65. Products with high technological risk were de-emphasized or abandoned. The company incurred a $1.2 million write-down of development costs and inventories and accrued $.6 million related to cost overruns on bakery installations and employee severance costs. PROSPECTS Order backlog for Electronics segment products at January 31, 1996 was up more than $4 million from the prior year. The acquisition, in late fiscal 1996, of additional product offerings for precision farming, if properly integrated into the existing product line, is expected to increase revenues in fiscal 1997. Growth projections for the total company depend on more than 40% sales growth in this segment. Timely delivery of quality products under commercial contracts during the first half of the year is crucial to obtaining additional orders and progressing toward a successful year for the company. Meeting the demands of new technologies and customers is expected to decrease the gross profit rate from fiscal 1996 levels in this segment. [GRAPH] ELECTRONICS SEGMENT (DOLLARS IN MILLIONS) GROSS YEAR SALES PROFITS '94 35.771 7.767 '95 31.959 7.581 '96 32.962 7.841 PLASTICS SEGMENT FISCAL 1996 VERSUS FISCAL 1995 Sales of engineered films increased 20% in fiscal 1996 and totaled $23.7 million. Process improvements and expansion of production capacity allowed the company to meet demand for new products and to supply films needed in response to hurricane damage in the United States. Sales of plastic tanks increased 20% as demand for agricultural tanks was strong. Pickup-truck topper sales also increased, but by less than management expectations. The gross profit impact of these higher sales was substantially offset by losses incurred during the start up of a new pickup-truck topper plant. During fiscal 1996, the company sold the utility-truck body business and related assets. This sale had no material impact on the financial statements. [GRAPH] PLASTICS SEGMENT (DOLLARS IN MILLIONS) GROSS YEAR SALES PROFITS '94 40.386 8.164 '95 48.971 9.227 '96 55.281 9.450 FISCAL 1995 VERSUS FISCAL 1994 Investments in new capacity for engineered films and pickup-truck toppers resulted in significant growth in both product lines during fiscal 1995. Engineered film and research balloon sales were up 29%, and totaled $19.8 million. Pickup-truck topper sales increased 24% and reached $13.5 million. Sales of industrial plastic tanks increased slightly and agricultural tanks increased 11%. Start up costs associated with new facilities had a negative impact on gross profit rates in fiscal 1995. Additionally, the company did not completely pass on increases in raw material costs to plastic tank customers. PROSPECTS Sales are expected to grow between 10-15% in this segment during fiscal 1997. This growth is contingent on improving the productive capacity of our new pickup-truck topper facility in Arizona, and film lamination equipment. Growth will also require stronger marketing of large plastic tanks. Gross profit rates are expected to increase from the depressed levels of fiscal 1996, as operating results from the pickup-truck topper manufacturing plant improve. SEWN PRODUCTS SEGMENT FISCAL 1996 VERSUS FISCAL 1995 The impact of the unusually warm winter of 1994-1995 was to create lower demand for outerwear and higher than normal retail inventory levels. As a result, fiscal 1996 sales in the sewn products segment were much lower than the prior year. Sales to catalog merchandisers were down almost $5 million in fiscal 1996 compared to fiscal 1995. Skiwear sales were also lower than the prior year. Chemical warfare protection suit production ended in fiscal 1995, but did contribute $3.3 million to fiscal 1995 sales. Sales of nonmilitary cold weather uniforms increased over last year. The lower sales negatively impacted the level of gross profits, and higher levels of low-margin and close-out sales reduced the gross profit rate. FISCAL 1995 VERSUS FISCAL 1994 The decline in sales was due primarily to the end of the company's contract to produce chemical warfare protection suits. Shipments under this contract were $3.3 million in fiscal 1995 and $9.4 million in fiscal 1994. The company's chemical suit production facility was converted to commercial production during the second quarter of fiscal 1995. Demand for hot air balloons and inflatable displays declined at the company's Aerostar subsidiary. Skiwear sales were also lower than the prior year due partially to warmer winter weather in the United States. These declines were partially offset by a $3.5 million increase in sales to catalog merchandisers. Gross profit rates in this segment benefited from the reduced level of chemical suit shipments. These suits carried lower margins than commercial products. Unfavorable production variances and the costs to convert to commercial production mitigated this favorable impact. [GRAPH] SEWN PRODUCTS SEGMENT (DOLLARS IN MILLIONS) GROSS YEAR SALES PROFITS '94 45.311 7.643 '95 40.790 7.160 '96 32.201 5.369 18 PROSPECTS Sales are expected to stay relatively flat in this segment. Penetration of the nonmilitary uniform market for outerwear continues to be an objective for fiscal 1997. Gross profits are expected to recover as the result of cost control measures and improved production efficiencies. EXPENSES, INCOME TAXES AND OTHER FISCAL 1996 VERSUS FISCAL 1995 Selling and administrative costs were essentially unchanged, both as a percent of sales and in spending levels. Marketing support for precision farming equipment increased selling expenses, along with higher levels of commissionable sales. Interest expense increased as a result of financing capital expenditures made in late fiscal 1995. The effective income tax rate was 35.2% in fiscal 1996 and 35.0% in fiscal 1995. FISCAL 1995 VERSUS FISCAL 1994 Operating expenses were 10.7% of sales in fiscal 1995, compared to 10.8% in fiscal 1994. Selling expenses increased by 1.8% and administrative expense declined by 3.7%. The lower expense level was due to cost reductions, including lower management incentives. Interest expense was essentially unchanged as lower borrowing levels in the first half of the year were offset by higher borrowings to finance fixed asset additions and acquisitions in the last half of fiscal 1995. The effective income tax rate was 35.0% in fiscal 1995 compared to 34.6% in fiscal 1994. The higher rate was the result of increased state income taxes and reduced tax deductibility of expenses under new federal tax legislation. PROSPECTS Operating expenses are expected to increase by more than 10%, but should be reduced as a percentage of sales in fiscal 1997. Interest costs are projected to rise along with increased working capital requirements in the coming year. The company's effective income tax rate is expected to rise to the 35.5% range. ANALYSIS OF FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES The following table summarizes cash provided by (used in) the company's business activities for the past three fiscal years: (Dollars in thousands) 1996 1995 1994 - --------------------------------------------------------------- Operating activities ...... $ 9,687 $ 7,452 $ 11,257 Investing activities ...... (4,158) (10,000) (5,908) Financing activities ...... (4,029) 406 (2,042) Increase (decrease) in cash $ 1,500 $ (2,142) $ 3,307 OPERATING ACTIVITIES The company's cash flow from operations totaled $28.4 million over the past three years, compared to net income of $19.2 million over the same period. Accounts receivable decreased by $1.5 million in fiscal 1996, due primarily to higher shipment levels in January 1995 than in January 1996 and collection of past-due accounts at the company's Beta Raven subsidiary. Inventory increased $1.8 million, primarily to support Electronics segment shipments in the first half of the coming fiscal year. Working capital requirements are projected to grow along with revenues in fiscal 1997. INVESTING ACTIVITIES Capital expenditures totaled $4.2 million in fiscal 1996, a decrease of $3.6 million from the prior year and at approximately the same level as depreciation and amortization. Expenditures were to complete the new pickup-truck topper manufacturing facility and to support other new capacity in the Plastics and Electronics segments. The company acquired certain product rights to depth control technology for its precision farming business for approximately $500,000. Cash proceeds from disposal of utility-truck body assets were approximately $500,000. In fiscal 1997, capital expenditures are expected to approximate depreciation. 19 FINANCING ACTIVITIES AND CREDIT LINES The company increased its dividend, on a per share basis, for the ninth consecutive year. Cash balances increased and long-term debt declined by $1.5 million each. Maximum borrowings under the company's line of credit were $1.5 million during fiscal 1996, compared to $5.0 million in fiscal 1995. Average daily borrowings were $260,000 in fiscal 1996 and $2.2 million in the prior year. Management believes the $6.0 million line of credit will be adequate to meet its working capital needs during fiscal 1997. CAPITAL STRUCTURE AND LONG-TERM FINANCING Long-term debt decreased by $1.5 million in fiscal 1996 and the company's long-term debt to total capitalization ratio was 5.4% at January 31, 1996, compared to 8.4% one year earlier. Refer to Note 8 to the consolidated financial statements for types and sources of long-term debt. Using a prime rate of 8.5%, the weighted average interest rate of the company's debt was 7.7% at January 31, 1996. No new long-term borrowing is planned for fiscal 1997. The company's solid financial condition and capacity to assume additional financing, if needed, provide the company a strategic advantage over many of its competitors. In the opinion of management, the company is well-positioned to take on new business opportunities with emphasis on those that build on the company's strengths of customer service and quality manufacturing. PERFORMANCE: RAVEN VS. PEER GROUP & S&P 500 5-YEAR RETURN ON $100 INVESTMENT [LINE CHART] COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN As of S&P Div. Jan. 31: Raven S&P 500 Manufacturers - --------------------------------------------------- 1996 $ 257.55 $213.15 $ 231.70 1995 245.01 153.83 158.15 1994 256.31 152.99 158.20 1993 248.94 135.61 127.98 1992 182.75 122.65 119.11 1991 100.00 100.00 100.00 Source: S&P Compustat Base year=100 THE GRAPH ASSUMES $100 INVESTED ON JANUARY 31, 1991 IN THE COMPANY'S COMMON STOCK AND EACH OF THE INDICES. 20 WEEKLY STOCK PRICE AND VOLUME -- FISCAL 1996 [LINE AND BAR CHART] WEEKLY STOCK PRICE AND VOLUME -- FISCAL 1996 DATE PRICE VOLUME [LINE CHART] [BAR CHART] 1995 FEB 2/24 19 1/4 21100.0 2/17 17 3/4 21200.0 2/10 18 1/2 27500.0 2/ 3 17 1/4 22200.0 MAR 3/31 20 1/2 5400.00 3/24 20 15300.0 3/17 19 23500.0 3/10 18 49800.0 3/ 3 19 1/2 17800.0 APR 4/28 20 1/2 5900.00 4/21 19 1/4 12100.0 4/14 19 3700.00 4/ 7 19 2800.00 MAY 5/26 19 7/8 50400.0 5/19 19 7/8 23000.0 5/12 19 7/8 77500.0 5/ 5 19 1/2 5500.00 JUN 6/30 19 3/4 45700.0 6/23 19 1/2 110400 6/16 19 3/4 7100.00 6/ 9 20 1/2 76400.0 6/ 2 20 1/2 32500.0 JUL 7/28 20 1/2 43700.0 7/21 20 1/2 23300.0 7/14 19 1/2 15000.0 7/ 7 20 13100.0 AUG 8/25 17 3/4 29300.0 8/18 20 11900.0 8/11 19 3/4 22100.0 8/ 4 19 1/2 14600.0 SEP 9/29 18 15400.0 9/22 18 9600.00 9/15 18 22000.0 9/ 8 19 7200.00 9/ 1 19 20500.0 OCT 10/27 17 7/8 48000.0 10/20 17 7/8 25000.0 10/13 19 1/4 84500.0 10/ 6 19 1/4 14100.0 NOV 11/24 16 1/2 73700.0 11/17 16 3/4 11400.0 11/10 18 1/2 1000.00 11/ 3 18 47300.0 DEC 12/29 18 1/4 8200.00 12/22 17 15800.0 12/15 17 33000.0 12/ 8 16 1/2 91700.0 12/ 1 16 1/4 64300.0 1996 JAN 1/26 18 1/2 1/19 17 3/4 10500.0 1/12 18 19800.0 1/ 5 18 1/4 9000.00 QUARTERLY SUMMARY (UNAUDITED) DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Common stock Net Gross Operating Pretax Net Net income market price Dividends sales profit income income income per share High Low per share - ------------------------------------------------------------------------------------------------------------------- FISCAL 1996 FIRST QUARTER $ 27,787 $ 5,776 $ 2,404 $ 2,380 $ 1,535 $ 0.32 $ 20.50 $ 17.25 $ 0.105 SECOND QUARTER 27,253 4,795 1,675 1,732 1,117 0.23 20.75 19.50 0.105 THIRD QUARTER 35,560 6,400 3,115 3,057 1,972 0.41 20.50 17.50 0.120 FOURTH QUARTER 29,844 5,689 2,367 2,397 1,573 0.34 19.25 15.50 0.120 -------- -------- -------- -------- -------- --------- ------- TOTAL YEAR $120,444 $ 22,660 $ 9,561 $ 9,566 $ 6,197 $ 1.30 $ 20.75 $ 15.50 $ 0.450 ======== ======== ======== ======== ======== ========= ======= FISCAL 1995 First quarter $ 27,816 $ 5,360 $ 2,046 $ 2,134 $ 1,376 $ 0.29 $ 24.50 $ 19.75 $ 0.090 Second quarter 26,919 5,044 137(a) 182 130 0.03 22.50 18.50 0.090 Third quarter 35,890 7,200 3,880 3,877 2,519 0.53 20.00 18.00 0.105 Fourth quarter 31,095 6,364 3,073 3,179 2,063 0.42 20.00 18.25 0.105 -------- -------- -------- -------- -------- --------- ------- Total year $121,720 $ 23,968 $ 9,136 $ 9,372 $ 6,088 $ 1.27 $ 24.50 $ 18.00 $ 0.390 ======== ======== ======== ======== ======== ========= ======= FISCAL 1994 First quarter $ 25,278 $ 5,241 $ 2,206 $ 2,185 $ 1,420 $ 0.30 $ 20.63 $ 18.25 $ 0.075 Second quarter 30,529 5,877 2,697 2,747 1,786 0.37 23.50 18.00 0.075 Third quarter 34,758 6,657 3,277 3,351 2,178 0.45 22.25 19.00 0.090 Fourth quarter 30,903 5,799 2,260 2,355 1,570 0.33 22.75 19.25 0.090 -------- -------- -------- -------- -------- --------- ------- Total year $121,468 $ 23,574 $ 10,440 $ 10,638 $ 6,954 $ 1.45 $ 23.50 $ 18.00 $ 0.330 ======== ======== ======== ======== ======== ========= =======
(a) Includes the $1.8 million Beta Raven charge (See Note 4). 21 CONSOLIDATED BALANCE SHEETS
(Dollars in thousands) January 31 1996 1995 1994 - ------------------------------------------------------------------------------------ ASSETS Current assets Cash and cash equivalents ......................... $ 3,804 $ 2,304 $ 4,446 Accounts receivable ............................... 16,002 17,592 16,540 Inventories ....................................... 23,897 22,103 22,224 Prepaid expenses and other current assets ......... 413 382 425 Deferred income taxes ............................. 1,579 1,414 1,402 ------- ------- ------- Total current assets ............................ 45,695 43,795 45,037 Property, plant and equipment ........................ 18,069 18,570 13,371 Other assets ......................................... 3,789 3,271 2,189 ------- ------- ------- Total assets .................................... $67,553 $65,636 $60,597 ======= ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion of long-term debt ................. $ 813 $ 907 $ 479 Accounts payable .................................. 4,651 5,435 5,902 Accrued liabilities ............................... 8,309 8,191 8,564 Customer advances ................................. 998 545 1,143 ------- ------- ------- Total current liabilities ....................... 14,771 15,078 16,088 Long-term debt, less current portion ................. 2,816 4,179 2,539 Deferred income taxes ................................ 815 853 870 Stockholders' equity ................................. 49,151 45,526 41,100 ------- ------- ------- Common shares outstanding-- 1996: 4,715,976; 1995: 4,734,530; 1994: 4,694,191 Total liabilities and stockholders' equity ...... $67,553 $65,636 $60,597 ======= ======= =======
The accompanying notes are an integral part of the financial statements. 22 CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data) For the years ended January 31 1996 1995 1994 - --------------------------------------------------------------------------------------------------- Net sales ............................................. $ 120,444 $ 121,720 $ 121,468 Cost of goods sold .................................... 97,784 97,752 97,894 ----------- ----------- ----------- Gross profit ....................................... 22,660 23,968 23,574 ----------- ----------- ----------- Operating expenses Selling ............................................ 7,223 7,075 6,950 Administrative ..................................... 5,876 5,957 6,184 Beta Raven charge .................................. 1,800 ----------- ----------- ----------- 13,099 14,832 13,134 ----------- ----------- ----------- Operating income ................................. 9,561 9,136 10,440 ----------- ----------- ----------- Other income (expense) Interest ........................................... (375) (323) (327) Equity in earnings of affiliate .................... 225 300 350 Miscellaneous ...................................... 155 259 175 ----------- ----------- ----------- 5 236 198 ----------- ----------- ----------- Income before income taxes ....................... 9,566 9,372 10,638 Income taxes Currently payable .................................. 3,572 3,313 4,103 Deferred ........................................... (203) (29) (419) ----------- ----------- ----------- 3,369 3,284 3,684 ----------- ----------- ----------- Net income ....................................... $ 6,197 $ 6,088 $ 6,954 =========== =========== =========== Net income per common and common-equivalent share ..... $ 1.30 $ 1.27 $ 1.45 =========== =========== =========== Average common and common-equivalent shares outstanding 4,782,185 4,791,083 4,795,795 =========== =========== ===========
The accompanying notes are an integral part of the financial statements. 23 CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands) For the years ended January 31 1996 1995 1994 - ----------------------------------------------------------------------------------------------------------- Cash flows from operating activities: Net income .......................................................... $ 6,197 $ 6,088 $ 6,954 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization .................................. 4,242 3,582 2,897 Provision for losses on accounts receivable .................... 86 135 180 Deferred income taxes .......................................... (203) (29) (419) Equity in earnings of affiliate, net of dividends .............. (105) (180) (254) Change in operating assets and liabilities, net of effects from acquisition of businesses ...................... (525) (2,110) 1,857 Other .......................................................... (5) (34) 42 -------- -------- -------- Net cash provided by operating activities ........................... 9,687 7,452 11,257 Cash flows from investing activities: Capital expenditures ................................................ (4,186) (7,753) (5,784) Acquisition of businesses ........................................... (510) (2,372) Other ............................................................... 538 125 (124) -------- -------- -------- Net cash used in investing activities ............................... (4,158) (10,000) (5,908) Cash flows from financing activities: Issuance of short-term debt ......................................... 4,500 7,500 5,500 Payment of short-term debt .......................................... (4,500) (7,500) (5,500) Long-term debt principal payments ................................... (1,457) (804) (2,498) Proceeds from issuance of long-term debt ............................ 2,872 1,840 Net proceeds from exercise of stock options ......................... 134 181 161 Dividends paid ...................................................... (2,130) (1,843) (1,545) Purchase of treasury stock .......................................... (576) -------- -------- -------- Net cash provided by (used in) financing activities ................. (4,029) 406 (2,042) -------- -------- -------- Net increase (decrease) in cash and equivalents ........................ 1,500 (2,142) 3,307 Cash and cash equivalents at beginning of year ......................... 2,304 4,446 1,139 -------- -------- -------- Cash and cash equivalents at end of year ............................... $ 3,804 $ 2,304 $ 4,446 ======== ======== ========
The accompanying notes are an integral part of the financial statements. 24 NOTES TO FINANCIAL STATEMENTS NOTE 1 * SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the accounts of Raven Industries, Inc. ("Raven") and its wholly owned subsidiaries (the "company"), Aerostar International, Inc. ("Aerostar"); Beta Raven Inc. ("Beta"); and Glasstite, Inc. ("Glasstite"). All material intercompany balances and transactions have been eliminated in consolidation. USE OF ESTIMATES: The preparation of the company's financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. CASH AND CASH EQUIVALENTS: The company considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. Cash and cash equivalent balances are principally concentrated in a money market mutual fund with Norwest Funds, an affiliate of Norwest Bank Minnesota, N.A. INVENTORY VALUATION: Inventories are stated at the lower of cost or market with cost determined on the first-in, first-out basis. PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment is stated at cost and is depreciated over the estimated useful life of the asset using accelerated methods. The estimated useful lives used for computing depreciation are as follows: Buildings and improvements .. 7 to 39 years Machinery and equipment ..... 3 to 7 years Maintenance and repairs are charged to expense in the year incurred and renewals and betterments are capitalized. The cost and related accumulated depreciation of assets sold or disposed of are removed from the accounts and the resulting gain or loss is reflected in income. INTANGIBLE ASSETS: Intangible assets are primarily comprised of goodwill and patents which are recorded at cost net of accumulated amortization. Amortization is computed on a straight-line basis over estimated useful lives ranging from 5 to 20 years. INVESTMENT IN AFFILIATE: Raven has a 50 percent equity interest in a corporation engaged in the manufacture of injection-molded plastic products. Raven accounts for the investment using the equity method. INSURANCE OBLIGATIONS: The company employs large deductible insurance policies covering workers compensation, employee health care and general liability costs. Costs are accrued up to the limits of these policies based on claims filed and estimates for claims incurred but not reported. CONTINGENCIES: The company may from time to time be involved as a defendant in lawsuits, claims or disputes in the normal course of business. An estimated loss is charged to income when it is probable that an asset has been impaired or a liability incurred and the amount of the loss can be reasonably estimated. Management believes that there are no current claims or disputes which would result in liability having a material adverse effect on the fiancial position of the company. RESEARCH AND DEVELOPMENT: Research and development expenditures of $619,000 in 1996, $955,000 in 1995, and $781,000 in 1994 were charged to cost of goods sold in the year incurred. INCOME TAXES: Deferred income taxes reflect temporary differences between assets and liabilities reported on the company's balance sheet and their tax basis. These differences are measured using enacted tax laws and statutory tax rates applicable to the periods when the temporary differences will impact taxable income. Income tax expense is the tax payable for the period and the change during the period in deferred income taxes. NET INCOME PER SHARE: Earnings per share are computed by dividing net income by the weighted average number of common and common-equivalent shares outstanding. Common shares outstanding represent common shares issued less shares purchased and held in treasury. Common-equivalent shares represent shares issuable upon the assumed exercise of dilutive employee stock options less treasury shares assumed purchased with the option proceeds. 25 NOTE 2 * SELECTED BALANCE SHEET INFORMATION Following are the components of selected balance sheet items: (Dollars in thousands) January 31 1996 1995 1994 - ---------------------------------------------------------------------------- ACCOUNTS RECEIVABLE: Trade accounts ....................... $ 16,342 $ 17,942 $ 16,890 Allowance for doubtful accounts ...... (340) (350) (350) -------- -------- -------- Total ............................ $ 16,002 $ 17,592 $ 16,540 ======== ======== ======== INVENTORIES: Finished goods ....................... $ 5,236 $ 4,247 $ 4,102 In process ........................... 5,605 4,709 5,815 Materials ............................ 13,317 13,147 12,803 -------- -------- -------- 24,158 22,103 22,720 Progress payments .................... (261) (496) -------- -------- -------- Total ............................ $ 23,897 $ 22,103 $ 22,224 ======== ======== ======== PROPERTY, PLANT, AND EQUIPMENT: Land ................................. $ 1,185 $ 1,129 $ 1,038 Building and improvements ............ 13,285 13,253 10,664 Machinery and equipment .............. 30,550 28,726 24,077 -------- -------- -------- 45,020 43,108 35,779 Accumulated depreciation ............... (26,951) (24,538) (22,408) -------- -------- -------- Total ............................ $ 18,069 $ 18,570 $13,371 ======== ======== ======= OTHER ASSETS: Investment in affiliate .............. $ 1,796 $ 1,691 $ 1,511 Intangible assets, net of amortization 1,746 1,474 567 Miscellaneous ........................ 247 106 111 -------- -------- -------- Total ............................ $ 3,789 $ 3,271 $ 2,189 ======== ======== ======== ACCRUED LIABILITIES: Profit sharing ....................... $ 1,324 $ 1,557 $ 1,933 Vacations ............................ 1,622 1,573 1,502 Salaries and wages ................... 2,427 2,121 2,167 Insurance obligations ................ 1,502 1,405 1,558 Other ................................ 1,434 1,535 1,404 -------- -------- -------- Total ............................ $ 8,309 $ 8,191 $ 8,564 ======== ======== ======== 26 NOTE 3 * SUPPLEMENTAL CASH FLOW INFORMATION (Dollars in thousands) For the years ended January 31 1996 1995 1994 - ----------------------------------------------------------------------------- CHANGES IN OPERATING ASSETS AND LIABILITIES: Accounts receivable ........................ $ 1,504 $(1,187) $ (549) Inventories ................................ (1,785) 497 1,652 Prepaid expenses and other current assets .. (31) 42 (54) Accounts payable ........................... (784) (467) (1,253) Accrued liabilities ........................ 118 (397) 1,755 Customer advances .......................... 453 (598) 306 ------- ------- ------- $ (525) $(2,110) $ 1,857 ======= ======= ======= CASH PAID DURING THE YEAR FOR: Interest ................................... $ 395 $ 318 $ 292 Income taxes ............................... 3,761 2,733 4,146 NOTE 4 * BETA RAVEN CHARGE During the quarter ended July 31, 1994, the Company recorded a charge of $1.8 million related to its Beta Raven Inc. subsidiary. The charge related principally to a reorganization of the subsidiary's bakery equipment installation business and to provide for direct management of the subsidiary's operations by Raven's corporate officers and management. Products with high technological risk were de-emphasized or abandoned. The charge consisted primarily of a $1.2 million write-down of development costs and inventories and the accrual of $.6 million related to cost overruns on bakery installations and employee severance costs. NOTE 5 * ACQUISITIONS During fiscal 1996 and fiscal 1995, the company acquired certain assets of several different companies for $510,000 and $2.4 million, respectively. The aquisitions were accounted for as purchases. The cost in excess of net tangible assets acquired resulted in goodwill of $1.4 million. The consolidated financial statements include the results of operations of these businesses subsequent to the acquisition dates. Pro forma information related to the acquisitions has not been presented due to immateriality. NOTE 6 * BUSINESS SEGMENTS AND MAJOR CUSTOMER INFORMATION The company operates in three reportable business segments consisting of Electronics, Plastics and Sewn Products. Segment information can be found of page 12, along with a description of product lines included in each segment. Sewn Products segment sales to a catalog merchandiser were $14.5 million in fiscal 1995. Direct sales on prime contracts with United States Government agencies were $18.2 million in fiscal 1994, principally from the Electronics and Sewn Products business segments. No other customer accounted for more than 10% of consolidated sales in any fiscal year presented. 27 NOTE 7 * QUARTERLY DATA (UNAUDITED) Quarterly net sales, gross profit, net income and net income per share data are presented on page 21. NOTE 8 * FINANCING ARRANGEMENTS Long-term debt consisted of the following:
(Dollars in thousands) January 31 1996 1995 1994 - ----------------------------------------------------------------------------------------- Norwest bank notes payable in installments through 1999 with interest at the prime rate ...................... $ 2,680 $ 3,540 $ 1,300 Contracts, notes and mortgages payable in installments through 2003 with interest from 3.0% to 9.0% ......... 740 1,293 1,421 Industrial revenue bonds payable in installments through 2001 with interest at 83% of the prime rate .......... 209 253 297 ------- ------- ------- Total long-term debt ............................. 3,629 5,086 3,018 Current portion .................................. (813) (907) (479) ------- ------- ------- $ 2,816 $ 4,179 $ 2,539 ======= ======= =======
Certain long-term debt is collateralized by land, buildings and equipment having an aggregate depreciated cost at January 31, 1996 of $1.9 million. Norwest Bank South Dakota, N.A. (Norwest) provides the company's unsecured notes and unsecured line of credit. Two members of the company's board of directors are also on the board of directors of Norwest. The aggregate amounts of long-term debt maturing during the years subsequent to January 31, 1996 are as follows: Year ending January 31: (Dollars in thousands) - ---------------------------------------------------------- 1997 ........................................ $ 813 1998 ........................................ 1,170 1999 ........................................ 1,524 2000 ........................................ 54 2001 ........................................ 44 Thereafter .................................. 24 ------- Total ................................. $ 3,629 ======= The company had a $6.0 million unsecured line of credit available as of January 31, 1996; no borrowings were outstanding as of that date. Borrowings on the line bear interest at rates approximating the prime rate. The prime rates at January 31, 1996, 1995, and 1994 were 8.5%, 8.5%, and 6.0%, respectively. The weighted average interest rates under short-term credit lines in fiscal 1996, 1995, and 1994 were 8.9%, 7.6%, and 6.0%, respectively. 28 NOTE 9 * STOCKHOLDERS' EQUITY Following is an analysis of changes in stockholders' equity: (Dollars in thousands, except per share data)
$1 par Treasury common Paid-in stock, Retained stock capital at cost earnings Total - ---------------------------------------------------------------------------------------- Balance, January 31, 1993 ........ $ 4,992 $ 136 $(2,334) $32,736 $35,530 Net income ....................... 6,954 6,954 Cash dividend ($.33 per share) ... (1,545) (1,545) Purchase and retirement of stock . (5) (94) (99) Employees' stock options exercised 23 237 260 ---------------------------------------------------- Balance, January 31, 1994 ........ 5,010 279 (2,334) 38,145 41,100 Net income ....................... 6,088 6,088 Cash dividend ($.39 per share) ... (1,843) (1,843) Purchase and retirement of stock . (35) (730) (765) Employees' stock options exercised 75 871 946 ---------------------------------------------------- Balance, January 31, 1995 ........ 5,050 420 (2,334) 42,390 45,526 Net income ....................... 6,197 6,197 Cash dividend ($.45 per share) ... (2,130) (2,130) Purchase of treasury stock ....... (576) (576) Purchase and retirement of stock . (9) (172) (181) Employees' stock options exercised 27 288 315 ---------------------------------------------------- BALANCE, JANUARY 31, 1996 ........ $ 5,068 $ 536 $(2,910) $46,457 $49,151 ====================================================
The company is authorized to issue up to 100,000,000 shares of its $1 par value common stock. Other information on common shares: At January 31 1996 1995 1994 - ---------------------------------------------------- Issued ......... 5,068,379 5,050,433 5,010,094 Outstanding .... 4,715,976 4,734,530 4,694,191 Held in treasury 352,403 315,903 315,903 RIGHTS PLAN: The company has a Share Purchase Rights Plan designed to protect the interests of its stockholders by preventing a potential acquiror from gaining control of the company without offering a fair price to all stockholders. Under the Plan, each stockholder has one Right for each share of the company's common stock owned. Each Right entitles the stockholder to purchase from the company one share of the company's common stock for a specified price. The Rights are not exercisable or transferable apart from the common stock until ten days after a person or group has acquired 20 percent or more, or makes a tender offer for 30 percent or more, of the company's outstanding common stock. The Rights expire in March 1999 and are redeemable by the company at $.01 per Right prior to the date upon which they become exercisable, and in certain limited circumstances following such date. 29 NOTE 10 * STOCK OPTIONS Officers and key employees of the company have been granted options to purchase stock under the 1990 Stock Option Plan. Options are granted at prices not less than market value at date of grant. The plan, administered by the Board of Directors, allows for a cash bonus when options are exercised and may grant either incentive stock options or non-qualified options with terms not to exceed ten years. Option transactions are summarized as follows: Available Options Options Price for grant outstanding exercisable per share - ------------------------------------------------------------------------------ Balance, January 31, 1993 .. 119,900 235,600 90,113 $ 5.42-13.87 Granted .................. (58,200) 58,200 20.00 Becoming exercisable ..... 57,311 6.83-13.87 Exercised ................ (22,180) (22,180) 5.42-11.83 Forfeited ................ (1,540) 6.83-13.87 ---------------------------------------------- Balance, January 31, 1994 .. 61,700 270,080 125,244 6.83-20.00 Reserved by plan amendment 300,000 Granted .................. (59,400) 59,400 18.25 Becoming exercisable ..... 54,979 6.83-20.00 Exercised ................ (74,812) (74,812) 6.83-13.87 Forfeited ................ (7,087) 6.83-20.00 ---------------------------------------------- Balance, January 31, 1995 .. 302,300 247,581 105,411 6.83-20.00 Granted .................. (60,000) 60,000 17.87 Becoming exercisable ..... 56,207 11.83-20.00 Exercised ................ (27,289) (27,289) 6.83-13.87 ---------------------------------------------- BALANCE, JANUARY 31, 1996 .. 242,300 280,292 134,329 $11.83-20.00 ============================================== In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123, a new standard of accounting and reporting for stock-based compensation plans. The company is not required to adopt the new standard until fiscal 1997. The company expects to continue to measure compensation cost for its stock option plans using the intrinsic value based method of accounting it has historically used and, therefore, the new standard will have no effect on the company's operating results. The company's financial statement disclosures will be expanded in fiscal 1997, as required, to include pro forma disclosures as if the fair value based method of accounting had been followed. NOTE 11 * EMPLOYEE RETIREMENT PLAN The company has a profit sharing plan covering substantially all employees. Contributions to the plan, not to exceed 15% of total eligible compensation, are made separately by Raven and each subsidiary, at the discretion of each entity's Board of Directors. The company's contribution to the plan was $1,324,000, $1,557,000, and $1,933,000 for the years ended January 31, 1996, 1995 and 1994, respectively. 30 NOTE 12 * INCOME TAXES Significant components of the company's deferred tax assets and liabilities are as follows: (Dollars in thousands) January 31 1996 1995 1994 - ------------------------------------------------------------ DEFERRED TAX ASSETS: Allowance for doubtful accounts $ 119 $ 122 $ 122 Inventory valuation methods ... 107 99 80 Accrued vacations ............. 429 416 398 Insurance obligations ......... 491 441 508 Other accrued liabilities ..... 433 336 294 ------------------------ Total ..................... 1,579 1,414 1,402 ------------------------ DEFERRED TAX LIABILITIES: Carrying value of investment .. 622 588 525 Depreciation methods .......... 83 90 113 Safe-harbor leases ............ 110 175 232 ------------------------ Total ..................... 815 853 870 ------------------------ Net deferred tax asset .......... $ 764 $ 561 $ 532 ======================== The company's effective tax rate was 35.2%, 35.0%, and 34.6% in 1996, 1995, and 1994, respectively. The tax rate varies from the statutory rate of 35% due primarily to the effect of state income taxes and non-deductible expenses offset by the impact of graduated income tax rates. 31 REPORT OF INDEPENDENT ACCOUNTANTS TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF RAVEN INDUSTRIES, INC.: We have audited the accompanying consolidated balance sheets of Raven Industries, Inc. and subsidiaries as of January 31, 1996, 1995, and 1994, and the related consolidated statements of income and cash flows for each of the three years in the period ended January 31, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Raven Industries, Inc. and subsidiaries as of January 31, 1996, 1995, and 1994 and the consolidated results of their operations and their cash flows for each of the three years in the period ended January 31, 1996, in conformity with generally accepted accounting principles. /s/ Coopers & Lybrand L.L.P. Minneapolis, Minnesota March 7, 1996 32 RAVEN INDUSTRIES DIRECTORS CONRAD J. HOIGAARD(2)(3) Chairman of the Board Raven Industries, Inc. Chairman of the Board Hoigaard's Inc. Minneapolis, MN DAVID A. CHRISTENSEN(3) President & Chief Executive Officer Raven Industries, Inc. Sioux Falls, SD ANTHONY W. BOUR(1) President Starmark, Inc. Sioux Falls, SD MARK E. GRIFFIN(2) President & Chief Executive Officer Lewis Drugs, Inc. Sioux Falls, SD KEVIN T. KIRBY(1) President Kirby Investment Corp. Sioux Falls, SD JOHN C. SKOGLUND(2)(3) Chairman Skoglund Communications Duluth, MN Chairman Minnesota Vikings Minneapolis, MN (1) Audit Committee (2) Compensation Committee (3) Executive Committee STOCK TRANSFER AGENT AND REGISTRAR Norwest Bank Minnesota, N.A. 161 N. Concord Exchange P. O. Box 738 S. St. Paul, MN 55075-0738 Norwest Trust Company New York, NY OFFICERS DAVID A. CHRISTENSEN President & Chief Executive Officer Service--33 years GARY L. CONRADI Vice President Corporate Services Service--29 years RONALD M. MOQUIST Executive Vice President Service--20 years ARNOLD J. THUE Vice President, Finance Secretary & Treasurer Service--28 years FORM 10-K Upon written request, Raven Industries, Inc.'s Form 10-K for the fiscal year ended January 31, 1996, which has been filed with the Securities and Exchange Commission, is available free of charge. DIRECT INQUIRIES TO: Raven Industries, Inc. Attention: Vice President, Finance Box 5107 Sioux Falls, SD 57117-5107 INDEPENDENT ACCOUNTANTS Coopers & Lybrand L.L.P. Minneapolis, MN STOCK QUOTATIONS Nasdaq Ticker Symbol--RAVN ANNUAL MEETING May 22, 1996 9:00 a.m. Ramkota Inn Hwy. 38 & I-29 Sioux Falls, SD Raven Industries, Inc. is an Equal Employment Opportunity Employer with an approved affirmative action plan. Report designed by Graphic Concepts, Unlimited, Okemos, MI EX-21 4 EXHIBIT 21 SUBSIDIARIES OF THE REGISTRANT Name of Subsidiary State of Incorporation ------------------ ---------------------- Aerostar International, Inc. South Dakota Astoria Industries, Inc. South Dakota Beta Raven Inc. Missouri Glasstite, Inc. Minnesota EX-23 5 EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the Registration Statement on Form S-8 of Raven Industries, Inc. (Registration No. 33-38614) of our report dated March 7, 1996, on our audits of the consolidated financial statements of Raven Industries, Inc. as of January 31, 1996, 1995 and 1994, and for each of the three years in the period ended January 31, 1996 included on page 32 of the Annual Report to Shareholders and our report on the related financial statement schedule included in this Annual Report on Form 10-K. COOPERS & LYBRAND L.L.P. Minneapolis, Minnesota April 17, 1996 EX-27 6
5 1,000 YEAR JAN-31-1996 JAN-31-1996 3,804 0 16,342 340 23,897 45,695 45,020 26,951 67,553 14,771 2,816 0 0 5,068 44,083 67,553 120,444 120,444 97,784 97,784 0 0 375 9,566 3,369 6,197 0 0 0 6,197 1.30 1.30
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