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TheStreet Open House

Raven Industries Reports Fiscal 2013 Second-Quarter Results

Conference Call Information

Raven will host a conference call today, Tuesday, August 21, 2012, at 9:00 a.m. Central Time to discuss second-quarter performance. Analysts and investors are invited to join the conference call by dialing: 1-866-393-0676. Alternatively, the live call can be accessed through the Investor Relations section of the company's website at http://investors.ravenind.com/ . Please log on to the website at least 15 minutes early to register on the Events & Presentations page, and download and install any necessary audio software.

A replay of the conference call will be available two hours after the call ends through 11:59 p.m. CT on Tuesday, August 28, 2012. To access the replay, dial 1-855-859-2056 and enter conference ID: 78751693. A replay also will remain available on the company's website for 90 days following the call.

About Raven Industries, Inc.

Since 1956, Raven Industries has designed and manufactured high-quality, high-value technical products. Raven is publicly traded on NASDAQ (RAVN) and has earned an international reputation for innovation, product quality, high performance and unmatched service. With strengths in engineering, manufacturing, and technological innovation, Raven serves the precision agriculture, high performance specialty films, aerospace, and electronic manufacturing services markets. Visit www.RavenInd.com for more information.

Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the expectations, beliefs, intentions or strategies regarding the future. Without limiting the foregoing, the words "anticipates," "believes," "expects," "intends," "may," "plans," and similar expressions are intended to identify forward-looking statements. The company intends that all forward-looking statements be subject to the safe harbor provisions of the Private Securities Litigation Reform Act. Although management believes that the expectations reflected in forward-looking statements are based on reasonable assumptions, there is no assurance these assumptions are correct or that these expectations will be achieved. 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 and commodity prices, which could affect sales and profitability in some of the company's primary markets, such as agriculture, construction and oil and gas drilling; or changes in competition, raw material availability, technology or relationships with the company's largest customers—any of which could adversely affect any of the company's product lines—as well as other risks described in the company's 10-K under Item 1A. This list is not exhaustive, and the company does not have an obligation to revise any forward-looking statements to reflect events or circumstances after the date these statements are made.

RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars and shares in thousands, except earnings per share) (Unaudited)
             
             
  Three Months Ended July 31, Six Months Ended July 31,
      Fav (Unfav)     Fav (Unfav)
  2012 2011 Change 2012 2011 Change
Net sales  $ 101,674  $ 90,344 13 %  $ 219,589  $ 191,885 14 %
Cost of goods sold  71,610  62,214    148,390  130,819  
Gross profit  30,064  28,130 7 %  71,199  61,066 17 %
             
Research and development expenses  3,564  2,374    6,964  4,617  
Selling, general and administrative expenses  9,093  7,082    18,396  14,242  
Operating income  17,407  18,674 (7)%  45,839  42,207 9 %
             
Other (expense), net  (96)  (76)    (148)  (89)  
Income before income taxes  17,311  18,598 (7)%  45,691  42,118 8 %
             
Income taxes  5,743  6,137    15,100  13,941  
Net income  11,568  12,461 (7)%  30,591  28,177 9 %
             
Net income attributable to noncontrolling interest  22  --    2  --  
             
Net income attributable to Raven Industries, Inc.  $ 11,546  $ 12,461 (7)%  $ 30,589  $ 28,177 9 %
             
Net income per common share: (a)            
 -basic $0.32 $0.34 (6)% $0.84 $0.78 8 %
 -diluted $0.32 $0.34 (6)% $0.84 $0.77 9 %
             
Weighted average common shares: (a)            
 -basic 36,343 36,224   36,318 36,214  
 -diluted 36,565 36,430   36,545 36,428  
             
             
(a) All weighted average shares and earnings per share amounts have been adjusted to reflect the two-for-one stock split effective July 25, 2012.
             
RAVEN INDUSTRIES, INC.
SALES AND OPERATING INCOME BY SEGMENT
(Dollars in thousands) (Unaudited) 
             
             
  Three Months Ended July 31, Six Months Ended July 31,
      Fav (Unfav)     Fav (Unfav)
  2012 2011 Change 2012 2011 Change
Net sales (a)            
Applied Technology  $ 40,071  $ 35,433 13 %  $ 93,812  $ 77,453 21 %
Engineered Films  36,785  32,459 13 %  77,879  62,550 25 %
Aerostar  26,845  23,245 15 %  52,480  53,953 (3)%
Intersegment eliminations (2,027) (793)   (4,582) (2,071)  
Total company  $ 101,674  $ 90,344 13 %  $ 219,589  $ 191,885 14 %
             
Operating income (loss) (a)            
Applied Technology  $ 12,909  $ 13,236 (2)%  $ 34,959  $ 29,403 19 %
Engineered Films  6,819  5,284 29 %  15,998  9,413 70 %
Aerostar  2,309  3,373 (32)%  3,751  9,774 (62)%
Intersegment eliminations 17  8   (62)  --   
Total segment income  $ 22,054  $ 21,901    $ 54,646  $ 48,590  
Corporate expenses (4,647) (3,227) (44)% (8,807) (6,383) (38)%
Total company  $ 17,407  $ 18,674 (7)%  $ 45,839  $ 42,207 9 %
             
             
(a) Effective June 1, 2012 the Company realigned the assets and team members of its Electronic Systems Division and deployed them into the Company's Aerostar and Applied Technology Divisions. The segment information presented for the three months and six months ended July 31, 2012 and 2011 reflect this realignment.
             
RAVEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars In thousands) (Unaudited)
       
       
  July 31 January 31 July 31
  2012 2012 2011
ASSETS      
Cash and cash equivalents  $ 44,113  $ 25,842  $ 46,978
Accounts receivable, net  49,885  60,759  43,248
Inventories  50,389  54,756  50,249
Other current assets  7,373  6,202  5,741
Total current assets  151,760  147,559  146,216
       
Property, plant and equipment, net  73,189  61,894  48,011
Other assets, net  35,499  36,250  17,101
   $ 260,448  $ 245,703  $ 211,328
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
Accounts payable  $ 10,835  $ 16,162  $ 16,825
Accrued and other liabilities  25,082  24,484  17,145
Total current liabilities  35,917  40,646  33,970
       
Other liabilities  19,204  24,467  13,229
Shareholders' equity  205,327  180,590  164,129
   $ 260,448  $ 245,703  $ 211,328
       
       
RAVEN INDUSTRIES, INC.  
CONDENSED CONSOLIDATED CASH FLOWS  
(Dollars in thousands) (Unaudited)  
       
       
  Six Months Ended July 31,  
  2012 2011  
Cash flows from operating activities:      
Net income  $ 30,591  $ 28,177  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization  6,036  4,159  
Other operating activities, net  7,835  (6,073)  
Net cash provided by operating activities  44,462  26,263  
       
Cash flows from investing activities:      
Capital expenditures  (16,870)  (11,000)  
Other investing activities, net  22  499  
Net cash used in investing activities  (16,848)  (10,501)  
       
Cash flows from financing activities:      
Dividends paid  (7,618)  (6,509)  
Other financing activities, net  (1,704)  62  
Net cash used in financing activities  (9,322)  (6,447)  
       
Effect of exchange rate changes on cash  (21)  100  
       
Net increase in cash and cash equivalents  18,271  9,415  
Cash and cash equivalents at beginning of period  25,842  37,563  
Cash and cash equivalents at end of period  $ 44,113  $ 46,978  
       
CONTACT: At the Company:
         Tom Iacarella, Vice President and CFO
         605-336-2750
         Thomas.Iacarella@ravenind.com
         
         At Padilla Speer Beardsley:
         Matt Sullivan
         612-455-1700
         msullivan@padillaspeer.com

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