

Building and improvements			15 - 39 years
Manufacturing equipment by segment
Applied Technology			3 - 5 years
Engineered Films			5 - 12 years
Aerostar			3 - 5 years
Furniture, fixtures, office equipment, and other			3 - 7 years

The cost of maintenance and repairs is charged to expense in the period incurred, and renewals and betterments are capitalized. The cost and related accumulated depreciation of assets sold or disposed are removed from the accounts and the resulting gain or loss is reflected in ~~operations.~~the Consolidated Statements of Income and Comprehensive Income.

Leases

The Company adopted the new lease accounting standard, "Accounting Standards Codification Topic 842 Leases (ASC 842)" using the modified retrospective method for all agreements existing as of February 1, 2019. Results for fiscal year 2021 and 2020 are presented under ASC 842.

The Company recognizes a right-of-use asset and lease liability for all financing and operating leases with terms greater than twelve months. The lease liability is measured based on the present value of the lease payments not yet paid. The right-of-use asset is measured based on the initial measurement of the lease liability adjusted for any direct costs incurred upon commencement of the lease. The right-of-use assets are amortized on a straight-line basis over the lease term, and are tested for impairment in a manner consistent with the other long-lived assets held by the Company.

(Dollars in thousands, except per-share amounts)

Fair Value Measurements

Fair value is defined as an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The Company uses the established fair value hierarchy, which classifies or prioritizes the inputs used in measuring fair value. These classifications include:

Level 1 - Observable inputs such as quoted prices in active ~~markets;~~markets.

Level 2 - Inputs other than quoted prices in active markets that are either directly or indirectly ~~observable; and~~observable.

Level 3 - Unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions.

The Company's financial assets required to be measured at fair value on a recurring basis include cash and cash equivalents, short-term investments and ~~short-term investments.~~mutual funds. The Company determines the fair value of its cash equivalents, ~~and~~ short-term investments and mutual funds through quoted market prices. Mutual funds relate to the Company's deferred compensation plan further described within Note 8 "Employee Postretirement Benefits." The fair values of accounts receivable and accounts payable approximate their carrying values because of the short-term nature of these instruments.

The Company's goodwill and long-lived assets, including intangible assets subject to amortization, are measured at fair value on a non-recurring basis. These valuations are derived from valuation techniques in which one or more significant inputs are not observable. Fair value measurements associated with goodwill and long-lived assets are further described in Note 7 "Goodwill and Long-Lived Assets."

For all acquisitions, the Company is required to measure the fair value of the net identifiable tangible and intangible assets acquired. In addition, the Company determines the estimated fair value of contingent consideration as of the acquisition date, and subsequently at the end of each reporting period. These valuations are derived from valuation techniques in which one or more significant inputs are not observable. Fair value measurements associated with acquisitions, including acquisition-related contingent liabilities, are described in Note 6 ~~Acquisition of~~"Acquisitions and Investments in Businesses and Technologies."

Definite-Lived Intangible Assets

Intangible assets, primarily comprised of technologies acquired through ~~acquisition,~~acquisitions, are recorded at cost and ~~are~~ presented net of accumulated amortization. Amortization is computed using the method that best approximates the pattern of economic benefits which the asset provides. The Company has used both the straight-line method and the undiscounted cash flows method to appropriately allocate the cost of intangible assets to earnings in each reporting period.

The straight-line method allocates the cost of such intangible assets ratably over the asset’s life. Under the undiscounted cash flow method, the estimated cash flow attributable to each year of an intangible asset’s life is calculated as a percentage of the total of the cash flows over the asset’s life and that percentage is applied to the initial value of the asset to determine the annual amortization to be recorded.

Intangible assets also include patents, trademarks, and other product rights attained to protect the Company’s intellectual property. The estimated useful lives of the Company’s intangible assets range from 3 to 20 years.

Indefinite-lived Intangible Assets

The Company acquired in-process R&D (IPR&D) intangible assets in business combinations transacted during the fourth quarter of fiscal year 2020. These assets are accounted for as indefinite-lived intangible assets and will be amortized when the associated R&D project is completed or abandoned. Upon completion of each project, a determination of the useful life of the acquired intangible assets is made and amortization is recorded to expense over the useful life. Management expects the R&D projects related to the IPR&D intangible assets will be completed in fiscal 2022. These assets are classified as "Intangible assets, net" on the Consolidated Balance Sheets.

Indefinite-lived intangible assets are tested for impairment on an annual basis and between annual tests, whenever a triggering event indicates there may be an impairment. Management has determined that the IPR&D constitutes a single asset, with no separate identifiable cash flows. Prior to completing a quantitative assessment, the Company may perform a qualitative assessment over relevant events and circumstances to determine whether it is more likely than not that the fair value is less than the carrying value. If the assessment indicates that fair value may be less than its carrying value, then the fair values are estimated based on a discounted cash flow method analysis (quantitative analysis). If the fair value of the assets is less than the carrying value, an impairment loss is recognized for the amount that the carrying value exceeds fair value. When performing indefinite-lived intangible asset impairment testing, the fair values of assets are determined based on valuation techniques,

(Dollars in thousands, except per-share amounts)

using the best available information. Such valuations are derived from valuation models in which one or more significant inputs are not observable (Level 3 fair value measures).

Goodwill

The Company recognizes goodwill as the excess cost of an acquired business over the net amount assigned to assets acquired and liabilities assumed. Goodwill is allocated to the reporting units that are expected to benefit from the synergies of the business combination. Acquisition earn-out payments are accrued at fair value as of the purchase date and payments reduce the accrual without affecting goodwill. Any change in the fair value of the contingent consideration after the acquisition date is recognized in "Cost of sales" in the Consolidated Statements of Income and Comprehensive Income.

Goodwill is tested for impairment on an annual basis during the fourth quarter and between annual tests whenever a triggering event indicates there may be an impairment. Impairment tests of goodwill are performed at the reporting unit level. APrior to completing a quantitative assessment, the Company may perform a qualitative impairment assessment over relevant events and circumstances ~~may be assessed~~ to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If ~~events and circumstances indicate~~the assessment indicates the fair value of a reporting unit may be less than its carrying value, ~~then~~the Company will perform a quantitative assessment. In a quantitative assessment, the fair ~~values are estimated based on~~value of each reporting unit is determined using a discounted cash ~~flows~~flow analysis and ~~are~~market approach. The estimated fair value is compared with the corresponding carrying value of the reporting unit. If the fair value of the reporting unit is less than the carrying amount, a goodwill impairment loss is recognized for the amount that the carrying value of the reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to the reporting unit. Prior to adopting ASU 2017-04 "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" in fiscal 2018 first quarter, the Company recognized a goodwill impairment loss for the amount that the carrying value of the reporting unit exceeded the reporting unit's implied fair value of the goodwill. The impact of adopting this new guidance is further described below in the ~~Accounting Pronouncements - Accounting Standards Adopted.~~

~~(Dollars in thousands, except per-share amounts)~~

When performing goodwill impairment testing, the fair values of reporting units are determined based on valuation techniques, using the best available ~~information, primarily discounted cash flow projections.~~information. Such valuations are derived from valuation ~~techniques~~models in which one or more significant inputs are not observable (Level 3 fair value measures).

Long-Lived Assets

The Company periodically assesses the recoverability of long-lived tangible and intangible assets, including right-of-use assets. An impairment loss is recognized when the carrying amount of an asset group exceeds the estimated undiscounted cash flows used in determining the fair value of the asset group. The amount of the impairment loss to be recorded is the excess of the carrying value of the assets within the group over their fair value. When performing long-lived ~~assets~~asset impairment testing, the fair values of ~~assets~~an asset are determined based on valuation techniques using the best available information. Such valuations are derived from valuation techniques in which one or more significant inputs are not observable (Level 3 fair value measures).

Long-lived assets determined to be held for sale and classified as such in accordance with the applicable guidance are reported as long-term assets at the lower of the asset's carrying amount or fair value less the estimated cost to sell. Depreciation is not recorded once a long-lived asset has been classified as held for sale.

Acquisition-Related Contingent Consideration

Acquisition-related contingent consideration represents an obligation of the Company to transfer additional assets or equity interests if specified future events occur or conditions are met. This contingency is accounted for at fair value either as a liability or equity depending on the terms of the acquisition agreement. The Company determines the estimated fair value of contingent consideration as of the acquisition date, and subsequently at the end of each reporting period. In doing so, the Company makes significant estimates and assumptions regarding future events or conditions being achieved under the subject contingent agreement as well as the appropriate discount rate to apply. Such valuations are derived from valuation techniques in which one or more significant inputs are not observable (Level 3 fair value measures).

Litigation and Contingencies

~~We recognize legal~~Legal costs are recognized as an expense in the period incurred. The Company is involved as a ~~defendant~~party in lawsuits, claims, regulatory inquiries, or disputes arising in the normal course of business, some of which allege substantial monetary damages. ~~We accrue~~The Company accrues for any loss contingencies when losses become probable and are reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate than any other amount within the range, the minimum amount of the range is recorded as a liability. Amounts recovered by insurance, if any, are recognized when they are realized.

Revenue Recognition

~~The Company recognizes revenue when it is realized or realizable and has been earned.~~ Revenue is recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for transferring those goods or providing services. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

When determining whether the customer has obtained control of the goods or services, the Company considers any future

(Dollars in thousands, except per-share amounts)

performance obligations. Generally, there is ~~persuasive evidence~~no post-shipment obligation on products sold other than warranty obligations in the normal and ordinary course of ~~an arrangement,~~business. In the event significant post-shipment obligations were to exist, revenue recognition would be deferred until the Company had substantially accomplished what it must do to be entitled to the benefits represented by the revenue. Estimated returns, sales allowances, and warranty charges, if applicable, are recorded at the same time revenue is recorded.

Performance obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account for purposes of revenue recognition. A contract’s transaction price is ~~determinable, collectability~~allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is ~~reasonably assured,~~satisfied. For contracts involving large quantities, the Company accounts for each piece of equipment product separately, as each is a distinct performance obligation from which the customer derives benefit. For contracts with multiple performance obligations, standalone selling price is generally readily observable. The Company’s performance obligations are satisfied at a point in time or over time as work progresses. Revenue from goods and ~~shipment or delivery has occurred (depending~~services transferred to customers at a point in time accounts for a majority of the Company’s revenues. Revenue on these contracts is recognized when obligations under the terms of the ~~sale) or services have been rendered.~~ contract with our customer are satisfied; generally this occurs with the transfer of control upon shipment.

The Company ~~sells directly~~uses an input measure to determine progress towards completion for revenue generated from products and services transferred to customers ~~or distributors who incur the expense~~over time. Under this method, net sales and ~~commitment for any post-sale obligations beyond stated warranty terms. Estimated returns, sales allowances, or warranty charges~~gross profit are recognized as work is performed generally based on the relationship between the actual costs incurred and the total estimated costs at completion ("the cost-to-cost method") or based on efforts for measuring progress towards completion in situations in which this approach is more representative of the progress on the contract than the cost-to-cost method. Contract costs include labor, material, overhead and, when appropriate, general and administrative expenses. Changes to the original estimates may be required during the life of the contract, and such estimates are reviewed on a regular basis. Sales and gross profit are adjusted using the cumulative catch-up method for revisions in estimated total contract costs. For performance obligations related to service contracts, when estimates of total costs to be incurred on a performance obligation exceed total estimates of revenue to be earned, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined.

Sales returns

The right of return may exist explicitly or implicitly with our customers. The Company’s return policy allows for customer returns only upon ~~shipment of~~the Company's authorization. Goods returned must be a ~~product.~~

~~Certain contracts contain provisions for incentive payments that~~product the Company ~~may receive~~continues to market and must be in salable condition. When the right of return exists, we adjust the transaction price for the estimated effect of returns. We estimate the expected returns based on historical sales levels, the timing and magnitude of historical sales return levels as a percent of sales, type of product, type of customer and a projection of this experience into the future.

Shipping and handling costs

Amounts billed to customers for shipping and handling activities after the customer obtains control are treated as a promised service performance ~~criteria related to product design, development~~obligation and ~~production standards. Revenue related to~~recorded in net sales in the ~~incentive payments is recognized when ultimate realization~~accompanying Consolidated Statements of Income and Comprehensive Income. Shipping and handling costs incurred by the Company ~~is assured.~~for the delivery of goods to customers are considered a cost to fulfill the contract and are included in cost of sales in the accompanying Consolidated Statements of Income and Comprehensive Income.

Sales tax

Taxes that are collected by the Company from a customer, which are assessed by governmental authorities that are both imposed upon and concurrent with a specific revenue-producing transaction, are excluded from revenues.

Operating Expenses

The primary types of operating expenses are classified in the income statement as follows:

Cost of sales

Research and development (R&D) expenses

Selling, general, and administrative (SG&A)expenses

Direct material costs

Material acquisition and handling costs

Direct labor

Factory overhead including depreciation and amortization

Inventory obsolescence

Product warranties

Shipping and handling cost

Personnel costs

Professional service fees

Material and supplies

Facility allocation

Personnel costs

Professional service fees

Advertising

Promotions

Information technology equipment depreciation

~~Office supplies~~

ERP license fees
Facility allocation

~~Bad debt~~
Credit loss expense

~~The Company's~~

(Dollars in thousands, except per-share amounts)

Total engineering costs consist of R&D ~~expenditures consist primarily of~~and other engineering support related expenses. R&D costs are internal direct and indirect costs associated with development of technologies to support ~~its~~the Company's proprietary product lines in each of its divisions. These R&D costs are expensed as incurred.

~~(Dollars in thousands, except per-share amounts)~~

Engineering support related expenses may be allocated to overhead, and thus cost of sales, or R&D expenses based on the focus of the engineering effort.

General and administrative expenses included in SG&A are not allocated at the segment level. The Company's gross margin and segment operating income may not be comparable to industry peers due to variability in the classification of these expenses across the industries in which the Company operates.

Warranties

Accruals necessary for product warranties are estimated based on historical warranty costs in relation to sales and average time elapsed between purchases and ~~returns~~claims for each division. Additional accruals are made for any significant, discrete warranty issues.

Share-Based Compensation

The Company records compensation expense related to its share-based compensation plans using the fair value method. Under this method, the fair value of share-based compensation is determined as of the grant date and the related expense is recorded over the period in which the share-based compensation vests.

Income Taxes

Deferred income taxes reflect future tax effects of temporary differences between the tax and financial reporting basis of the Company's assets and liabilities measured using enacted tax laws and statutory tax rates applicable to the periods when the temporary differences will affect taxable income. When necessary, deferred tax assets are reduced by a valuation allowance to reflect realizable value. All deferred tax balances are reported as long-term on the Consolidated Balance Sheets. Accruals are maintained for uncertain tax positions.

Accounting Pronouncements

Accounting Standards Adopted

In the ~~fiscal 2018~~ first quarter of fiscal year 2021, the Company ~~early~~ adopted, ~~Accounting Standards Update (ASU) No. 2017-04 (issued by the~~ Financial Accounting Standards Board (FASB) ~~in January 2017)~~Accounting Standard Update (ASU) No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement" (ASU 2018-13), "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" (ASU 2017-04) on a prospective basis. This ASU removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Under the new guidance, a goodwill impairment will be measured as the amount by which a reporting unit’s carrying value exceeds its fair value. The amount of any impairment may not exceed the carrying amount of goodwill.when it became effective. The amendments ~~should~~in ASU 2018-13 remove, modify, and add required disclosures for companies related to recurring and nonrecurring fair value measurements under Topic 820. Certain amendments in this guidance are required to be applied ~~on a prospective basis. As discussed~~prospectively, and others are to be applied retrospectively. The amendments in ~~Note 7~~ ~~Goodwill, Long-lived Assets,~~ASU 2018-13 only related to financial statement disclosures and ~~Other Intangibles~~, management determined no triggering events had occurred for any of its three reporting units in fiscal 2018 and the Company's annual fourth quarter impairment testing did not result in a goodwill impairment loss being recorded; therefore, the early adoption of this guidance did not have ~~any~~a significant impact on the Company's consolidated financial statements or ~~the results of operations as of and for the twelve-month period ended January 31, 2018.~~its note disclosures.

In the ~~fiscal 2018~~ first quarter ~~when it became effective,~~of fiscal year 2021, the Company adopted FASB ASU ~~2016-09 (issued in March 2016), "Compensation~~2016-13, "Financial Instruments - ~~Stock Compensation~~Credit Losses (Topic ~~718)~~326): ~~Improvements to Employee Share-Based Payment Accounting"~~Measurement of Credit Losses on Financial Instruments" (ASU 2016-09). ASU 2016-09 amends the accounting for employee share-based payment transactions to require recognition of the tax effects resulting from the settlement of stock-based awards as discrete income tax expense or benefit in the income statement in the reporting period in which they occur. This guidance also requires that all tax-related cash flows resulting from share-based awards be disclosed as operating cash flows in the statement of cash flows and that cash paid to taxing authorities on the behalf of employees for withheld shares be classified as a financing activity in the statement of cash flows. Finally, this ASU allows companies to make an accounting policy election to either estimate the number of awards that are expected to vest, consistent with current GAAP, or account for forfeitures when they occur. The Company accounts for forfeitures as they occur. The Company is prospectively recognizing excess tax benefits or deficits on vesting or settlement of awards, when they occur, as a discrete income tax benefit or expense instead of as additional paid-in capital as required under previous guidance. This change to the Company's accounting policies resulted in recognition of income tax expense of $692, or $0.02 per diluted share, for the twelve-month period ended January 31, 2018. These tax-related cash flows are now classified within operating activities. The Company classifies tax payments made to taxing authorities on the employee's behalf for withheld shares as a financing activity on the statement of cash flows, as such the adoption of this guidance had no impact. Under the new guidance, excess tax benefits are no longer included in assumed proceeds under the treasury stock method of calculating earnings per share. The increase in incremental shares used in the weighted average diluted shares calculation was not material to the Company's diluted earnings per share calculation.

~~In the fiscal 2018 first quarter~~2016-13), when it became effective along with all subsequent amendments to Topic 326 issued by FASB. Current GAAP generally delays recognition of the ~~Company adopted~~full amount of credit losses until the ~~FASB ASU No. 2015-11 (issued in July 2015), "Inventory (Topic 330) Simplifying the Measurement~~loss is deemed probable of ~~Inventory" (ASU 2015-11) on a prospective basis.~~occurring. The amendments in ~~ASU 2015-11 clarify that~~this guidance eliminate the probable initial recognition threshold and, instead, reflect an entity’s current estimate of all expected credit losses. Previously, when credit losses were measured under GAAP, an entity ~~should measure inventory within~~generally only considered past events and current conditions in measuring the incurred loss. At adoption, the Company did not have any financial instruments in scope under ASU 2016-13 other than trade accounts receivables. In accordance with ASU 2016-13, the Company updated its current expected credit loss model for its trade accounts receivable and remeasured its allowance for credit losses as of ~~this update at the lower of cost~~February 1, 2020. The remeasurement impact was immaterial and ~~net realizable value. Net realizable value is the estimated selling price~~no cumulative accounting adjustment was recorded to retained earnings in the ~~ordinary course~~first quarter of ~~business, less reasonably predictable costs~~fiscal year 2021.

New Accounting Standards Not Yet Adopted

There are no significant ASUs issued and not yet adopted as of completion, disposal, and transportation. Substantial and unusual losses that result from subsequent measurement of inventory should be disclosed in the financial statements. Previously the Company reported its inventory at the lower of cost or market. Market was defined as replacement cost with a ceiling of net realizable value and a floor of net realizable value less a normal profit margin. The Company evaluates its inventory in all three reporting segments quarterly to determine if cost exceeds netJanuary 31, 2021.

(Dollars in thousands, except per-share amounts)

realizable value and records a write-down, if necessary. The adoption of this guidance did not have any impact on the consolidated financial statements or the results of operations as of and for the twelve-month period ended January 31, 2018.

~~New Accounting Standards Not Yet Adopted~~

In February 2018, the FASB issued ASU No. 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" (ASU 2018-02). The amendments in this guidance allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (TCJA). Consequently, the amendments eliminate the stranded tax effects resulting from the TCJA and will improve the usefulness of information reported. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this update is permitted, including adoption in any interim period for which financial statements have not yet been issued. The amendments in this update may be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized. The Company is evaluating the impact the adoption of this guidance will have on the stranded tax effects in accumulated other comprehensive income related to the Company's postretirement benefit plan.

In May 2017, the FASB issued ASU No. 2017-09, "Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting" (ASU 2017-09). The guidance amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under Topic 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards as equity instruments or as liability instruments are the same immediately before and after the modification to the award. The guidance is effective for annual periods, including interim periods, in fiscal years beginning after December 15, 2017. Early adoption is permitted and the amendments should be applied prospectively to an award modified on or after the adoption date. The Company currently has no plans to modify any of its outstanding awards. The Company does not expect the adoption of this guidance will have a significant impact on its consolidated financial statements, results of operations, and disclosures.

In March 2017, the FASB issued ASU No. 2017-07, "Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Postretirement Benefit Cost" (ASU 2017-07). The guidance clarifies where the cost components of the net benefit cost should be reported in the income statement and it allows only the service cost to be capitalized. Currently the Company reports all of the components of the net benefit cost in "Operating income" in the Consolidated Statement of Income and Comprehensive Income. The net benefit cost for participants that are active employees is reported in the same manner as each participant's compensation cost is classified in the Consolidated Statement of Income and Comprehensive Income. The net benefit cost attributable to retired (inactive) participants is reported in "Selling, general, and administrative expenses" in the Consolidated Statement of Income and Comprehensive Income. Under the new guidance only the service cost component of the net benefit cost will be classified the same as the participant's compensation cost. The other components of the net benefit cost are required to be reported separately as a non-operating income (expense). The guidance is effective for annual periods, including interim periods, in fiscal years beginning after December 15, 2017. Early adoption is permitted and the amendments should be applied retrospectively. The Company does not expect this guidance will have a significant impact on its consolidated financial statements, results of operations and disclosures since it primarily will only change how the net benefit cost is classified in the Company's Consolidated Statements of Income and Comprehensive Income.

In February 2017, the FASB issued ASU No. 2017-05, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets" (ASU 2017-05). Subtopic 610-20 was issued as part of the new revenue standard. It provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with non-customers. The new guidance defines “in substance nonfinancial assets,” unifies guidance related to partial sales of nonfinancial assets, eliminates rules specifically addressing sales of real estate, removes exceptions to the financial asset derecognition model, and clarifies the accounting for contributions of nonfinancial assets to joint ventures. The amendments are effective for annual periods beginning after December 15, 2017 with early adoption permitted. Transition can use either the full retrospective approach or the modified retrospective approach. The Company does not expect the adoption of this guidance will have a significant impact on its consolidated financial statements, results of operations, and associated disclosures.

In November 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740) Intra-Entity Transfers of Assets Other Than Inventory" (ASU 2016-16). Current GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. In addition, interpretations of this guidance have developed in practice over the years for transfers of certain intangible and tangible assets. This prohibition on recognition is an exception to the principle of comprehensive recognition of current and deferred income taxes in GAAP. The new guidance eliminates the exception for an intra-entity transfer of an asset other than inventory. The amendments in ASU 2016-16 are effective for fiscal years beginning

~~(Dollars in thousands, except per-share amounts)~~

after December 15, 2017, and interim periods within those fiscal years. The Company can early adopt ASU 2016-16, but earlier adoption must be in the first quarter of the fiscal year. The amendments in ASU 2016-16 will be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company does not expect the adoption of this guidance will have significant impact on its consolidated financial statements, results of operations, and associated disclosures.

In August 2016 the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments" (ASU 2016-15). The new guidance clarifies eight cash flow classification issues where current GAAP was either unclear or had no specific guidance. The new standard is effective for annual reporting periods beginning after December 15, 2017 and interim periods within those fiscal years. All entities may elect to early adopt ASU 2016-15 in any interim period. If an entity early adopts it must adopt all eight of the amendments in the same period and if early adopted in an interim period any adjustments should be reflected as of the beginning of the year. The amendments in ASU 2016-15 will be applied using the modified retrospective transition method for each period presented. The specific classification issues clarified in the guidance either are not applicable to the Company or are consistent with how the Company currently classifies them, therefore the Company does not expect the adoption of this guidance will have a significant impact on the classification of these specific items in its Consolidated Statements of Cash Flows.

In February 2016 the FASB issued ASU No. 2016-02, "Leases (Topic 842)" (ASU 2016-02). The primary difference between previous GAAP and ASU 2016-02 is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. The guidance requires a lessee to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. When measuring assets and liabilities arising from a lease, a lessee (and a lessor) should include payments to be made in optional periods only if the lessee is reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate the lease. Similarly, optional payments to purchase the underlying asset should be included in the measurement of lease assets and lease liabilities only if the lessee is reasonably certain to exercise that purchase option. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018. Lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. In addition, FASB has amended Topic 842 prior to it becoming effective. The effective date and transition requirements for these amendments to Topic 842 are the same as ASU 2016-02. The Company is in the initial stages of evaluating the impact the adoption of this guidance will have on its consolidated financial statements, results of operations, and disclosures which will include recognizing a lease liability and a right-of-use asset representing its right to use the underlying asset for the lease term.

~~In January of 2016, the FASB issued ASU No. 2016-01,~~ "~~Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.~~" The updated accounting guidance requires changes to the reporting model for financial instruments. The amendments in this guidance supersede the guidance to classify equity securities with readily determinable fair values into different categories (that is, trading or available-for sale) and require equity securities (including other ownership interests, such as partnerships, unincorporated joint ventures, and limited liability companies to be measured at fair value with changes in the fair value recognized through net income. An entity’s equity investments that are accounted for under the equity method of accounting or result in consolidation of an investee are not included within the scope of this update. The amendments also require separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or in the accompanying notes to the financial statements. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Since the securities held at the time of adoption that are in scope under this new guidance will be immaterial in amount, the Company does not expect the adoption of this guidance and the subsequent changes to Subtopic 825-10 in ASU 2018-03 "Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," will have a significant impact to the Company's financial statements, results of operations, and disclosures.

In May 2014 the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" (ASU 2014-09). ASU 2014-09 provides a comprehensive new recognition model that requires recognition of revenue when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to receive in exchange for those goods or services. This guidance supersedes the revenue recognition requirements in FASB ASC Topic 605, "Revenue

~~(Dollars in thousands, except per-share amounts)~~

Recognition," and most industry-specific guidance. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, companies will need to use more judgment and make more estimates than under the current guidance. It also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB approved a one-year deferral of the effective date (ASU 2015-14) and the standard is now effective for the Company for fiscal 2019 and interim periods therein. The guidance may be applied using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). In addition, FASB has amended Topic 606 prior to it becoming effective. The effective date and transition requirements for these amendments to Topic 606 are the same as ASU 2014-09. The Company has completed its assessment of the impact that the standard will have on revenue recognition. The Company has reviewed contracts for all material revenue streams across the Company's three divisions, held discussions with key stakeholders, and assessed potential impacts on the Company’s consolidated financial statements, results of operations, disclosures, and internal controls over financial reporting. The Company currently recognizes a significant majority of its revenue across all three divisions at a point-in-time with some exceptions that are recognized over time. These exceptions primarily relate to certain revenue streams within the Aerostar Division and installation sales within the Engineered Films Division. Management has determined that this will remain materially consistent upon adoption of the new standard, but has identified a few exceptions within the Aerostar Division and the Engineered Films Division for which revenue recognition will change from point-in-time to over time. As such, in these limited instances revenue may be recognized sooner than it had been in prior years under previously applicable accounting guidance. While these limited differences have been identified, due to the timing of activities under these revenue streams no adjustment to beginning retained earnings will be necessary upon adoption. Additionally, the Company will make additional disclosures related to the revenues arising from contracts with customers as required by the new standard. The Company will adopt this guidance in the first quarter of fiscal 2019 using the modified retrospective approach.

~~(Dollars in thousands, except per-share amounts)~~



~~NOTE 2~~	~~SELECTED BALANCE SHEET INFORMATION~~

NOTE 2 SELECTED BALANCE SHEET INFORMATION

Following are the components of selected balance sheet items:


	As of January 31,
	2021		2020
Accounts receivable, net:
Trade accounts	$	47,879	$	56,978
Unbilled receivables	2,734		6,954
Allowance for credit losses	(1,944)		(1,380)
	$	48,669	$	62,552
Inventories, net:
Finished goods	$	7,684	$	6,309
In process	759		3,287
Materials	44,260		44,303
	$	52,703	$	53,899
Other current assets:
Federal income tax receivable	1,440		1,370
Prepaid expenses and other	4,336		4,028
Insurance policy benefit	$	0	$	38
	$	5,776	$	5,436
Property, plant and equipment, net(a):
Land	$	3,117	$	3,117
Buildings and improvements	84,651		80,330
Machinery and equipment	169,252		158,354
Financing lease right-of-use assets	1,282		881
	258,302		242,682
Accumulated depreciation	(152,295)		(141,832)
	$	106,007	$	100,850
Other assets:
Equity investments	$	1,595	$	1,289
Operating lease right-of-use assets	6,850		4,275
Deferred income taxes	360		16
Other	2,211		1,507
	$	11,016	$	7,087
Accrued liabilities:
Salaries and related	$	4,881	$	4,188
Benefits	6,255		5,339
Insurance obligations	1,896		1,680
Warranties	2,068		2,019
Income taxes	238		293
Other taxes	2,386		1,734
Acquisition-related contingent consideration	2,000		763
Lease liability	2,482		2,530
Other	8,195		2,197
	$	30,401	$	20,743
Other liabilities:
Postretirement benefits	$	8,996	$	8,741
Acquisition-related contingent consideration	0		2,171
Lease liability	5,426		2,627
Deferred income taxes	2,091		7,080
Uncertain tax positions	2,692		2,606
Other	4,792		5,936
	$	23,997	$	29,161

As of January 31,

2018^(a)

2017^(a)
Accounts receivable, net:
Trade accounts $ 59,510
$ 43,834
Allowance for doubtful accounts (978 ) (691 )
$ 58,532
$ 43,143
Inventories:
Finished goods $ 8,054
$ 5,438
In process 961
2,288
Materials 46,336
34,610
$ 55,351
$ 42,336
Other current assets:
Insurance policy benefit $ 759
$ 802
Federal income tax receivable 1,397
604
Prepaid expenses and other 3,705
1,283
$ 5,861
$ 2,689
Property, plant and equipment, net:
Assets held for use and assets held for sale^(a):

Land $ 3,234
$ 3,054
Buildings and improvements 80,299
77,817
Machinery and equipment 149,847
142,471
Accumulated depreciation (127,523 ) (117,018 )
$ 105,857
$ 106,324

Property, plant and equipment subject to capital leases:
Machinery and equipment 488
—
Accumulated amortization for capitalized leases (65 ) —
423
—
$ 106,280
$ 106,324
Other assets:
Equity investments $ 1,955
$ 2,371
Deferred income taxes 19
18
Other 976
1,283
$ 2,950
$ 3,672
Accrued liabilities:
Salaries and related $ 9,409
$ 6,286
Benefits 4,225
3,960
Insurance obligations 1,992
2,400
Warranties 1,163
1,547
Income taxes 226
498
Other taxes 1,880
1,540
Acquisition-related contingent consideration 1,036
445
Other 2,015
1,379
$ 21,946
$ 18,055
Other liabilities:
Postretirement benefits $ 8,264
$ 8,054
Acquisition-related contingent consideration 2,010
1,397
Deferred income taxes 615
1,421
Uncertain tax positions 2,634
2,610
Other 272
214
$ 13,795
$ 13,696

^(a) Includes assets held for use and assets held for sale. The amount of assets ~~and liabilities~~ held for sale as of January 31, ~~2018 are separately disclosed in Note 3 - Assets Held For Sale in Item 8 of this Form 10-K. There were no assets or liabilities held for sale as of~~2021, and January 31, ~~2017.~~2020, were not material.

(Dollars in thousands, except per-share amounts)



NOTE 3			~~ASSETS HELD FOR SALE~~

~~Aerostar~~

The Company continually analyzes its product and service offerings to ensure we serve market segments with attractive near- and long-term growth prospects that are consistent with our core capabilities. Through this continued evaluation, the Company's Aerostar segment finalized a plan ("the Plan") to actively market the sale of its client private and radar product lines, each of which it has determined constitutes a business. During the second quarter of fiscal 2018 the Company determined that it was probable that these product lines would be sold within one year.

During the fourth quarter, Aerostar modified the plan and no longer marketed the sale of its radar product line. A buyer was identified and the sale of the client private business was completed subsequent to the end of fiscal 2018. As such, and as of January 31, 2018, the radar product line is not considered held for sale.

The Company has identified specific assets and liabilities that have been sold, including an allocation of goodwill based on the relative fair value of the business. The Company has determined that the final selling price will be in excess of the net book value. As such there is no impact to the Consolidated Statement of Income for the twelve-month period ended January 31, 2018.

~~Under the Plan, Aerostar will remain focused on serving the aerospace/defense market with its stratospheric balloon and radar product lines.~~

~~The amounts of assets and liabilities classified as held for sale were as follows:~~

As of January 31
2018
Assets held for sale
Property, plant and equipment, net 63
Goodwill 103
Amortizable intangible assets, net 329
Other assets 17
Total assets held for sale $ 512

Liabilities held for sale

Current liabilities $ 91
Total liabilities held for sale $ 91

~~There were no assets held for sale as of January 31, 2017.~~

~~(Dollars in thousands, except per-share amounts)~~



~~NOTE 4~~	ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Other comprehensive income (loss) refers to revenue, expenses, gains, and losses that under GAAP are recorded as an element of shareholders' equity but are excluded from net income. The changes in the components of accumulated other comprehensive income (loss) (AOCI) are shown below:


	Cumulative foreign currency translation adjustment		Postretirement benefits		Total
Balance at January 31, 2019	$	(2,238)	$	(1,318)	$	(3,556)
Other comprehensive (loss) before reclassifications	(994)		0		(994)

Amounts reclassified from accumulated other comprehensive (loss) after tax benefit of $251	0		(865)		(865)
Balance at January 31, 2020	(3,232)		(2,183)		(5,415)
Other comprehensive income before reclassifications	2,299		0		2,299
Amounts reclassified from accumulated other comprehensive (loss) after tax benefit of $65	0		(225)		(225)
Balance at January 31, 2021	$	(933)	$	(2,408)	$	(3,341)

Cumulative foreign currency translation adjustment Postretirement benefits Total
Balance at January 31, 2016 $ (2,477 ) $ (1,024 ) $ (3,501 )
Other comprehensive income (loss) before reclassifications 50
—
50
Amounts reclassified from accumulated other comprehensive (loss) after tax benefit of $129 —
(225 ) (225 )
Balance at January 31, 2017 (2,427 ) (1,249 ) (3,676 )
Other comprehensive income before reclassifications 1,234
—
1,234
Amounts reclassified from accumulated other comprehensive (loss) after tax benefit of $44 —
(131 ) (131 )
Balance at January 31, 2018 $ (1,193 ) $ (1,380 ) $ (2,573 )

Postretirement benefit cost components are reclassified in their entirety from ~~AOCI~~accumulated other comprehensive loss to net periodic benefit cost. ~~Net periodic benefit costs are~~Service cost is reported in net income as ~~“Cost~~"Cost of ~~sales”~~sales" or ~~“Selling,~~"Selling, general, and administrative ~~expenses”~~expenses" in a manner consistent with the classification of direct labor and personnel costs of the eligible employees. The components of the net periodic benefit cost, other than the service cost component, are classified as a non-operating expense in "Other income (expense), net" on the Consolidated Statements of Income and Comprehensive Income.



NOTE 54			SUPPLEMENTAL CASH FLOW INFORMATION

For the years ended January 31,
2018 2017 2016
Changes in operating assets and liabilities:
Accounts receivable $ (7,014 ) $ (5,361 ) $ 16,847
Inventories (11,062 ) 1,215
7,564
Prepaid expenses and other assets (2,445 ) 228
(111 )
Accounts payable 1,280
2,558
(5,059 )
Accrued and other liabilities 2,560
8,405
(9,353 )
$ (16,681 ) $ 7,045
$ 9,888

Supplemental disclosures of cash flow information:
Cash paid during the year for income taxes $ 19,854
$ 6,618
$ 6,558
Interest paid $ 186
$ 190
$ 129

Significant non-cash transactions:
  Capital expenditures included in accounts payable $ 418
$ 84
$ 161
  Assets acquired under capital leases $ 79
$ —
$ —
  Capital expenditures converted from inventory $ —
$ —
$ 1,036


	For the years ended January 31,
	2021		2020		2019
Changes in operating assets and liabilities:
Accounts receivable	$	12,045	$	(9,118)	$	3,938
Inventories	(1,151)		891		1,092
Prepaid expenses and other assets	(340)		2,092		(2,440)
Accounts payable	3,408		5,493		(4,517)
Accrued and other liabilities	4,297		(1,894)		3,480
	$	18,259	$	(2,536)	$	1,553

Supplemental disclosures of cash flow information:
Cash paid during the year for income taxes	$	4,771	$	4,377	$	8,225
Interest paid	281		267		227

Significant non-cash transactions:
Capital expenditures and other intangibles included in accounts payable and other liabilities	$	895	$	740	$	655
Redeemable noncontrolling interest in accrued liabilities	5,333		0		0
Redeemable noncontrolling interest in other liabilities	0		2,224		0
Assets acquired under capital leases	0		0		38
Right-of-use assets obtained in exchange for lease obligations:
Finance leases	$	677	$	435	$	0
Operating leases	5,555		1,924		0
Capital expenditures converted from inventories	2,930		0		0

(Dollars in thousands, except per-share amounts)


NOTE 5			REVENUE

Nature of goods and services

The Company is comprised of 3 unique operating divisions, classified into reportable business segments: Applied Technology, Engineered Films, and Aerostar. The following is a description of principal activities, separated by segment, from which the Company generates revenue. Service revenues and contract losses are not material and are not separately disclosed. Furthermore, the Company primarily acts as a principal in transactions and recognizes revenue on a gross basis for which it is entitled from its customers.

Applied Technology

Applied Technology designs, manufactures, sells, and services innovative precision agriculture products and information management tools, which are collectively referred to as precision agriculture equipment, that help farmers reduce costs, more precisely control inputs, and improve farm yields for the global agriculture market. Customers can purchase precision agriculture equipment individually or in large quantities. For purchases made in large quantities, the Company accounts for each piece of equipment separately, as each is a distinct performance obligation from which the customer derives benefit. The stand-alone selling prices are determined based on the prices at which the Company charges other customers for similar products in similar circumstances. Kits or bundles, which can consist of various pieces of equipment, are shipped together and therefore allocation of transaction price does not impact timing of revenue recognition. In the normal course of business the customer agrees to a fixed price and revenue is recognized when control has transferred to the customer.

Engineered Films

Engineered Films produces high-performance plastic films and sheeting for geomembrane, agricultural, construction, and industrial applications and also offers design-build and installation services of these plastic films and sheeting. Plastic film and sheeting can be purchased separately or together with installation services. The majority of transactions within Engineered Films are considered non-customized product-only sales. The Company accounts for each product separately, as each is a distinct performance obligation from which the customer derives benefit. The stand-alone selling prices are determined based on the prices at which the Company charges other customers for similar products in similar circumstances. In the normal course of business, the customer agrees to a fixed price and revenue is recognized when control has transferred to the customer.

The remaining transactions within Engineered Films are related to installation and/or customized product sales. Installation revenues are recognized over time using the cost incurred input method (i.e., costs incurred to date relative to total estimated costs at completion) because of continuous transfer of control to customers. For customized product-only sales, the Company recognizes revenue over time by applying an output method, such as units delivered, to measure progress.

Aerostar

Aerostar serves the aerospace and defense and commercial lighter-than-air markets. Aerostar's core products include high-altitude stratospheric platforms, technical services, and radar systems. These products can be integrated with additional third-party sensors to provide research, communications, and situational awareness capabilities to governmental and commercial customers. Aerostar pursues product and support services contracts with U.S. government agencies. Product sales to customers for which the division does not continuously transfer control are recognized based on a point-in-time. Contracts with customers which include elements of service, and are considered to be single performance obligations, are recognized over time. The stand-alone selling prices are determined based on the prices at which the Company charges other customers for similar products or services in similar circumstances. In the normal course of business the customer agrees to a fixed price. For revenues recognized at a point-in-time, the Company recognizes revenue when control has transferred to the customer. Certain lighter-than-air contracts are recognized over time using the cost incurred input method. The remaining transactions are recognized over time applying an output method, such as units delivered, to measure progress.

Disaggregation of Revenues

In the following table, revenue is disaggregated by major product category and geography as the Company believes these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The table also includes a reconciliation of the disaggregated revenue for all segments.

(Dollars in thousands, except per-share amounts)


	Revenue by Product Category
	For the year ended January 31, 2021
	ATD		EFD		AERO		ELIM(a)		Total
Lighter-than-Air
Domestic	$	—	$	—	$	36,966	$	—	$	36,966
International	—		—		68		—		68
Plastic Films & Sheeting
Domestic	—		135,842		—		(100)		135,742
International	—		12,079		—		0		12,079
Precision Agriculture Equipment
Domestic	113,640		—		—		(3)		113,637
International	33,558		—		—		0		33,558
Other
Domestic	—		—		16,300		—		16,300
International	—		—		9		—		9
Totals	$	147,198	$	147,921	$	53,343	$	(103)	$	348,359

	For the year ended January 31, 2020
	ATD		EFD		AERO		ELIM(a)		Total
Lighter-than-Air
Domestic	$	—	$	—	$	36,535	$	—	$	36,535
International	—		—		52		—		52
Plastic Films & Sheeting
Domestic	—		187,087		—		(90)		186,997
International	—		10,632		—		0		10,632
Precision Agriculture Equipment
Domestic	99,137		—		—		(2)		99,135
International	31,323		—		—		0		31,323
Other
Domestic	—		—		17,731		—		17,731
International	—		—		125		—		125
Totals	$	130,460	$	197,719	$	54,443	$	(92)	$	382,530

	For the year ended January 31, 2019
	ATD		EFD		AERO		ELIM(a)		Total
Lighter-than-Air
Domestic	$	—	$	—	$	37,866	$	—	$	37,866
International	—		—		932		—		932
Plastic Films & Sheeting
Domestic	—		208,882		—		(512)		208,370
International	—		17,692		—		0		17,692
Precision Agriculture Equipment
Domestic	100,051		—		—		(10)		100,041
International	29,698		—		—		0		29,698
Other
Domestic	—		—		12,062		—		12,062
International	—		—		7		—		7
Totals	$	129,749	$	226,574	$	50,867	$	(522)	$	406,668

(a) Intersegment sales for fiscal years 2021, 2020, and 2019 were primarily sales from Engineered Films to Aerostar.

(Dollars in thousands, except per-share amounts)

Contract Balances

Contract balances include contract assets and contract liabilities that are recorded when the Company enters into a contract with a customer. Contract assets primarily relate to the Company’s rights to consideration for work completed but not billed (unbilled receivables) at the reporting date, or retainage provisions on billings that have been issued. Contract assets are converted to receivables when the right to collect becomes unconditional. The Company's contract assets reported at January 31, 2021 and 2020 primarily relate to Engineered Films' geomembrane installation services and service contracts for Aerostar's lighter-than air products and radar processing systems. Contract assets are reported in "Accounts receivable, net" in the Consolidated Balance Sheets.

Contract liabilities consist of customer advances and deferred revenue. Contract liabilities primarily relate to consideration received from customers prior to transferring goods or services to the customer. Contract liabilities are reported in "Other current liabilities" in the Consolidated Balance Sheets.

The changes in contract assets and liabilities were as follows:


	January 31, 2021		January 31, 2020		$ Change		% Change
Contract assets	$	3,256	$	7,525	$	(4,269)	(56.7)	%

Contract liabilities	$	2,998	$	2,288	$	710	31.0	%

During the twelve months ended January 31, 2021, the Company’s contract assets decreased by $4,269 and contract liabilities increased by $710, primarily as a result of the contract terms which include timing of customer payments, timing of invoicing, and progress made on open contracts. The Company's contract assets at January 31, 2021, are primarily unbilled receivables that will be invoiced in first quarter of next year. The Company's contract liabilities at January 31, 2021, include customer advances that will substantially all convert to revenue recognized during the next fiscal year. Due to the short-term nature of the Company’s contracts, substantially all of the contract assets that existed as of January 31, 2020, were converted to accounts receivable. In addition the Company's contract liabilities that existed as of January 31, 2020, were recognized as revenue during fiscal 2021.

Remaining performance obligations

As of January 31, 2021, the Company has 0 remaining performance obligations related to customer contracts that had an original expected duration of one year or more.



NOTE 6			ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES AND TECHNOLOGIES

Fiscal year 2021 acquisitions.

~~Colorado Lining International, Inc.~~There were no material business acquisitions in the twelve-month period ended January 31, 2021.

Fiscal year 2020 acquisitions

On November 1, 2019, the Company acquired Smart Ag. Smart Agis a technology company located in Ames, Iowa, that develops autonomous farming solutions for agriculture. Smart Ag~~September~~currently offers aftermarket retrofit kits to automate farm equipment as well as a platform to connect, manage, and safely operate autonomous agricultural machinery.

On November 13, 2019, the Company acquired a majority ownership in DOT. Simultaneously with acquiring this majority ownership, the Company contributed cash to DOT in exchange for additional equity, making the majority ownership percentage in DOT 60% when the transaction closed. DOT, located in Regina, Saskatchewan, Canada, designs autonomous agriculture solutions and manufactures a unique U-shaped agriculture platform to semi-autonomously handle a large variety of agriculture implements. The acquisition provided noncontrolling interest shareholders various put options that, if exercised, obligated the Company to purchase their outstanding DOT shares. Due to the redemption features, the noncontrolling interest was classified as a redeemable noncontrolling interest in the Company’s Consolidated Balance Sheets as of January 31, 2020.

Both acquisitions aligned under the Company's Applied Technology Division and complement the division's suite of precision ag products and solutions. The aggregate purchase price was approximately $54,000, excluding the noncontrolling interest.

During the first quarter of fiscal 2021, certain minority interest shareholders in DOT exercised their put options, requiring the Company to redeem the remaining noncontrolling interest in DOT. The Company closed on the transaction to purchase the shares of the largest minority shareholder for $17,853 in the second quarter of fiscal 2021. The remaining redeemable amount,

(Dollars in thousands, except per-share amounts)

as well as the liability for the noncontrolling interest redeemed in the prior fiscal year, totaling approximately $5,333, is payable in November 2021 and is classified as "Accrued Liabilities" in the Consolidated Balance Sheets at January 31, 2021.

Including the noncontrolling interest, $56,022 of the purchase price was allocated to goodwill. Identifiable intangible assets acquired of $31,800 were primarily indefinite-lived intangible assets for in-process R&D. Amortization of these indefinite-lived intangible assets will start when the current in-process R&D project is complete and the product is commercialized, which is expected to occur in fiscal 2022. Amortization of the indefinite-lived intangibles will be on a straight-line basis over the remaining estimated useful lives of these assets. The Company expects the useful lives will range from seven to ten years.

The Company completed the valuation of intangible assets and pre-acquisition tax filings during the first and second quarters of fiscal 2021. The following adjustments were made to the purchase price allocation during fiscal 2021:


	Reported January 31, 2020		Measurement Period Adjustments		Adjusted Balance
Current assets	$	2,080	$	0	2,080
Goodwill	$	56,022	$	(440)	$	55,582
Intangible assets, net	31,800		(600)		31,200
Other long-term assets	1,770		0		1,770
Deferred income taxes	(4,158)		1,005		(3,153)
Accounts payable and other current liabilities	(1,462)		35		(1,427)
Long-term liabilities	(7,587)		0		(7,587)
Fair value of consideration transferred, including noncontrolling interest	78,465		0		78,465
Less: redeemable noncontrolling interest	24,315		(redeemed and acquired in fiscal year 2021)
Fair value of purchase price consideration transferred, excluding noncontrolling interest	$	54,150

The following pro forma consolidated condensed financial results of operations are presented as if the acquisitions described above had been completed at the beginning of fiscal 2019 (unaudited):


(Unaudited)
	For the years ended January 31,
	2020		2019
Net sales	$	383,418	$	406,886
Net income attributable to Raven Industries, Inc.	$	29,685	$	48,210

Earnings per common share
Basic	$	0.82	$	1.34
Diluted	$	0.82	$	1.32

These unaudited pro forma consolidated financial results have been prepared for comparative purposes only and include certain adjustments that were not material in nature. The pro forma information does not purport to be indicative of the results of operations that would have resulted had these business combinations occurred at the beginning of each period presented, or of future results of the consolidated entities. These acquisitions contributed 0 revenues and reduced fiscal 2020 net income attributable to Raven by $2,279.

Fiscal year 2019 acquisition

On January 1, ~~2017~~,2019, the Company completed the acquisition of substantially all of the assets ("~~the acquisition"~~AgSync Acquisition") of ~~Colorado Lining International,~~AgSync Inc. (AgSync), ~~a Colorado~~an Indiana corporation, headquartered in ~~Parker, CO (“CLI”). The~~Wakarusa, Indiana. This acquisition was aligned under the Company’s ~~Engineered Films Division.~~Applied Technology Division and enhanced its Slingshot platform by delivering a more seamless logistics solution for ag retailers, aerial applicators, custom applicators and enterprise farms. The ~~acquisition enhanced the Company’s geomembrane market position through extended~~

~~(Dollars in thousands, except per-share amounts)~~

service and product offerings with the addition of new design-build and installation service components, and advanced Engineered Films’ business model into a vertically-integrated, full-service solutions provider for the geomembrane market. The acquisitionAgSync Acquisition constitutes a business and as such was accounted for as a business ~~combination.~~combination; however, the business combination was not significant enough to warrant pro-forma financial information.

~~The acquisition included a working capital adjustment that was settled in January 2018. The final working capital adjustment was $566 which brought the purchase price to $14,938.~~ The purchase price ~~includes~~was approximately $9,700 which included potential earn-out payments with an estimated fair value of ~~$1,256 which are~~$2,052. The earn-out is contingent upon achieving certain ~~revenues and operational synergies.~~

revenue milestones. The ~~fair value~~purchase price of the business acquired was allocated to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price

(Dollars in thousands, except per-share amounts)

over the fair value of the identifiable assets acquired and liabilities assumed is reflected as ~~goodwill. Goodwill~~goodwill, which is fully tax deductible. The Company completed the valuation and the purchase price allocation during the first quarter of fiscal 2020. This resulted in an adjustment in the fiscal 2020 first quarter that increased the purchase price and the estimated fair value of the contingent earn-out payments by approximately $300. The goodwill and identifiable intangible assets recorded as part of the purchase price allocation ~~was $5,714, all of which is tax deductible. Identifiable intangible assets acquired as part of the acquisition~~at January 31, 2020, were ~~$610, including definite-lived intangibles, such as customer relationships~~$4,526 and ~~order backlog.~~$5,700, respectively.

Acquisition-related contingent consideration

The Company has a contingent liability related to the acquisition of AgSync in fiscal 2019. The Company also had contingent liabilities related to the ~~current~~acquisitions of Colorado Lining International, Inc. (CLI) in fiscal ~~year acquisition of CLI, as well as the prior acquisitions of~~2018; and Raven Europe B.V. (Raven Europe), formerly named SBG Innovatie BV and its affiliate, Navtronics BVBA (collectively, SBG), in ~~May 2014 and Vista Research, Inc. (Vista)~~fiscal 2015; both of which were settled in ~~January 2012.~~the current fiscal year. The fair value of such contingent consideration is estimated as of the acquisition date, and subsequently at the end of each reporting period, using forecasted cash flows. Projecting future cash flows requires the Company to make significant estimates and assumptions regarding future events, conditions or revenues being achieved under the subject contingent agreement as well as the appropriate discount rate. Such valuation techniques include one or more significant inputs that are not observable (Level 3 fair value measures).

Changes in the fair value of the liability for acquisition-related contingent consideration are as follows:


	For the years ended January 31,
	2021		2020
Beginning balance	$	2,934	$	4,172
Fair value of contingent consideration acquired	0		310
Change in fair value of the liability	(437)		412
Contingent consideration earn-out paid	(497)		(1,960)
Ending balance	$	2,000	$	2,934

Classification of liability in the Consolidated Balance Sheets
Accrued Liabilities	$	2,000	$	763
Other Liabilities, long-term	0		2,171
Ending balance	$	2,000	$	2,934

For the years ended January 31,
2018 2017
Beginning balance $ 1,741
$ 2,059
Fair value of contingent consideration acquired 1,256
—
Change in fair value of the liability 457
36
Contingent consideration earn-out paid (408 ) (354 )
Ending balance $ 3,046
$ 1,741

Classification of liability in the Consolidated balance sheet
Accrued Liabilities $ 1,036
$ 345
Other Liabilities, long-term 2,010
1,396
Balance at January 31, 2018 $ 3,046
$ 1,741


~~UNITED STATES~~☑
~~SECURITIES AND EXCHANGE COMMISSION~~
~~Washington, D.C. 20549~~
~~FORM 10-K~~
þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934


~~For the fiscal year ended January 31, 2018~~☐
o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934
~~For the transition period from to~~
~~Commission File Number: 001-07982~~
~~RAVEN INDUSTRIES, INC.~~
~~(Exact name of registrant as specified in its charter)~~



~~Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.~~	þ	~~Yes~~	o	No
~~Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.~~	o	~~Yes~~	þ	No
Indicate by check mark 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 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.	þ	~~Yes~~	o	No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).	þ	~~Yes~~	o	No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) 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.	þ


PART I
Item 1.		BUSINESS			3
Item 1A.		RISK FACTORS			9
Item 1B.		UNRESOLVED STAFF COMMENTS			15
Item 2.		PROPERTIES			15
Item 3.		LEGAL PROCEEDINGS			15
Item 4.		MINE SAFETY DISCLOSURES			15

PART III
~~Item 1.~~		~~BUSINESS~~	3
~~Item 1A.~~	~~RISK FACTORS~~	7
~~Item 1B.~~	~~UNRESOLVED STAFF COMMENTS~~	12
~~Item 2.~~	~~PROPERTIES~~	12
~~Item 3.~~	~~LEGAL PROCEEDINGS~~	13
~~Item 4.~~	~~MINE SAFETY DISCLOSURES~~	13

~~PART II~~
Item 5.	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES			1416
		~~Quarterly Information~~Company Stock Performance			1416
		~~Stock Performance~~Dividends			1517
~~Item 6.~~		~~SELECTED FINANCIAL DATA~~Issuer Purchases of Equity Securities			1617
		~~Five-year Financial Summary~~			16

Item 7.		MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			1718
		Executive Summary			1718
		Results of Operations - Segment Analysis			2320
		Liquidity and Capital Resources			2823
		Off-Balance Sheet Arrangements and Contractual Obligations			3126
		Critical Accounting Policies and Estimates			3227
		Accounting Pronouncements			3529
		Forward-Looking Statements			3529
Item 7A.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			3630
Item 8.		FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			3731
		Management's Report on Internal Control Over Financial Reporting			3832
		~~Report~~Reports of Independent Registered Public Accounting Firm - Deloitte & Touche LLP			3933
		~~Report of Independent Registered Public Accounting Firm - PricewaterhouseCoopers LLP~~Consolidated Balance Sheets			4036
		~~Consolidated Balance Sheets~~		41
	Consolidated Statements of Income and Comprehensive Income		4237
		Consolidated Statements of Shareholders' Equity			4338
		Consolidated Statements of Cash Flows			4439
		Notes to Consolidated Financial Statements			4540
Item 9.		CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE			7469
Item 9A.		CONTROLS AND PROCEDURES			7469
Item 9B.		OTHER INFORMATION			7570

PART III
Item 10.		DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE			7570
Item 11.		EXECUTIVE COMPENSATION			7570
Item 12.		SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS			7570
Item 13.		CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE			7570
Item 14.		PRINCIPAL ACCOUNTING FEES AND SERVICES			7570

PART IV
Item 15.		EXHIBITS, FINANCIAL STATEMENT SCHEDULE			7570
Item 16.		FORM 10-K SUMMARY			7572
~~INDEX TO EXHIBITS~~SIGNATURES					7673
~~SIGNATURES~~SCHEDULE II					7874
~~SCHEDULE II~~		79


PART I

~~PART I~~

ITEM 1.	BUSINESS


INFORMATION ABOUT OUR EXECUTIVE OFFICERS

Name, Age, and Position		Biographical Data
Daniel A. Rykhus, 56		Mr. Rykhus became the Company's President and Chief Executive Officer in 2010. He joined the Company in 1990 as Director of World Class Manufacturing, was General Manager of the Applied Technology Division from 1998 through 2009, and served as Executive Vice President from 2004 through 2010.
President and Chief Executive Officer

~~Business segment financial information is found on the following pages of this Form 10-K:~~
23 Steven E. Brazones, 47	~~Results~~	Mr. Brazones was named Division Vice President and General Manager of ~~Operations – Segment Analysis~~the Applied Technology Division in January 2021. Mr. Brazones joined the Company in December 2014 and served as its Vice President, Chief Financial Officer, and Treasurer. From 2002 to 2014, Mr. Brazones held a variety of positions with H.B. Fuller Company. Most recently, he served as H.B. Fuller's Americas Region Finance Director. Previously, he served as the Assistant Treasurer and the Director of Investor Relations. Prior to his tenure with H.B. Fuller, Mr. Brazones held various roles at Northwestern Growth.
72 Division Vice President and General Manager - Applied Technology Division and Vice President and Chief Financial Officer


Taimur Sharih, 47		Mr. Sharih was named Vice President and Chief Financial Officer effective March 1, 2021. Prior to joining the Company Mr. Sharih served as Senior Vice President and CFO of A&R Logistics, a chemical supply chain services company, from October 2019 to January 2021. Prior to that, Mr. Sharih spent two years as CFO for Acetyl Intermediates, a division of Celanese Corporation and 14 years at Praxair in various financial roles, including most recently, Vice President of Finance, U.S. Industrial Gases.
Vice President and Chief Financial Officer









Scott W. Wickersham, 47		Mr. Wickersham was named Division Vice President and General Manager of the Aerostar Division in January 2018. Effective February 1, 2021, Mr. Wickersham was named Division Vice President and General Manager of the Engineered Films Division. He joined the Company in 2010 as the Director of Product Development and Engineering Manager and has been the General Manager for the Aerostar Division since November 2015. Prior to joining the Company, Mr. Wickersham held a range of engineering and operational roles with various technology companies.
Division Vice President and General Manager - Aerostar Division


Lee A. Magnuson, 65		Mr. Magnuson joined the Company in June 2017, as Vice President and General Counsel and also became the Company's Secretary in August 2017. Prior to joining the Company, Mr. Magnuson was managing partner of Lindquist and Vennum Law Firm in the Sioux Falls, SD, office for five years, practicing in the areas of commercial transactions, mergers and acquisitions, corporate matters, real estate and regulatory matters.
Vice President, General Counsel, and Corporate Secretary


Nicole Freesemann, 38		Ms. Freesemann was named Vice President of Human Resources in January 2019. She started at Raven in 2008 and served in several human resources roles, including most recently as Director of Human Resources since January 2014. During her tenure at Raven, Ms. Freesemann developed and executed a new performance management strategy, implemented staffing strategies and programs to identify talent for all levels within the company, and led human resource efforts for acquisition due diligence and integrations.
Vice President of Human Resources



~~EXECUTIVE OFFICERS~~

~~Name, Age, and Position~~		~~Biographical Data~~
~~Daniel A. Rykhus, 53~~		Mr. Rykhus became the Company's President and Chief Executive Officer in 2010. He joined the Company in 1990 as Director of World Class Manufacturing, was General Manager of the Applied Technology Division from1998 through 2009, and served as Executive Vice President from 2004 through 2010.
~~President and Chief Executive Officer~~


~~Steven E. Brazones, 44~~		Mr. Brazones joined the Company in December 2014 as its Vice President, Chief Financial Officer, and Treasurer. From 2002 to 2014, Mr. Brazones held a variety of positions with H.B. Fuller Company. Most recently, he served as H.B. Fuller's Americas Region Finance Director. Previously, he served as the Assistant Treasurer and the Director of Investor Relations. Prior to his tenure with H.B. Fuller, Mr. Brazones held various roles at Northwestern Growth.
~~Vice President and Chief Financial Officer~~



~~Lee A. Magnuson, 62~~		Mr. Magnuson joined the Company in June 2017, as Vice President and General Counsel and also became the Company's Secretary in August 2017. Prior to joining the Company, Mr. Magnuson was managing partner of Lindquist and Vennum Law Firm's Sioux Falls, SD office for 5 years, practicing in the areas of commercial transactions, mergers and acquisitions, corporate matters, real estate and regulatory matters.
~~General Counsel and Vice President~~


~~Janet L. Matthiesen, 60~~		~~Ms. Matthiesen joined the Company in 2010 as Director of Administration and has been the Company's Vice President of Human Resources since 2012. Prior to joining Raven, Ms. Matthiesen~~ ~~was a Human Resource Manager at Science Applications International Corporation from 2002 to 2010.~~
~~Vice President of Human Resources~~


~~Brian E. Meyer, 55~~		Mr. Meyer was named Division Vice President and General Manager of the Applied Technology Division in May 2015. He joined the Company in 2010 as Chief Information Officer. Prior to joining the Company, Mr. Meyer was an information and technology executive in the health insurance industry and vice president of systems development in the property and casualty insurance industry.
~~Division Vice President and General Manager - Applied Technology Division~~


~~Anthony D. Schmidt, 46~~		Mr. Schmidt was named Division Vice President and General Manager of the Engineered Films Division in 2012. He joined the Company in 1995 in the Applied Technology Division performing various leadership roles within manufacturing and engineering. He transitioned to Engineered Films Division in 2011 as Manufacturing Manager.
~~Division Vice President and General Manager - Engineered Films Division~~


~~Scott W. Wickersham, 44~~		Mr. Wickersham was named Division Vice President and General Manager of the Aerostar Division in January 2018. He joined the Company in 2010 as the Director of Product Development and Engineering Manager and has been the General Manager for the Aerostar Division since November 2015. Prior to joining the Company, Mr. Wickersham held a range of engineering and operational roles with various technology companies.
~~Division Vice President and General Manager - Aerostar Division~~


	For the years ended January 31,												5-Year
Company / Index	2016		2017		2018		2019		2020		2021		CAGR(a)
Raven Industries, Inc.	$	100.00	$	171.29	$	267.80	$	260.42	$	224.09	$	233.32	18.5	%
Russell 2000 Index	100.00		133.53		156.47		150.96		164.86		214.61		16.5	%
S&P Small Cap 600 Index	100.00		134.34		156.59		154.64		164.80		202.99		15.2	%
(a) Compound annual growth rate (CAGR)



QUARTERLY INFORMATION (UNAUDITED)
(Dollars in thousands, except per-share amounts)
	Net Sales		Gross Profit		Operating Income (Loss)			Pre-tax Income (Loss)			Net Income (Loss) Attributable to Raven			Net Income (Loss) Per Share^(a)						Common Stock Market Price				Cash Dividends Per Share

														Basic			Diluted			High		Low
FISCAL 2018
First Quarter	$	93,535	$	31,956	$	18,219		$	17,989		$	12,348		$	0.34		$	0.34		$	31.60	$	23.75	$	0.13
Second Quarter	86,610		26,513		11,700			11,637			8,235			0.23			0.23			37.40		29.80		0.13
Third Quarter^(b)	101,349		33,333		17,829			17,795			11,998			0.33			0.33			35.80		26.70		0.13
Fourth Quarter^(b)(c)	95,823		29,763		11,422			11,565			8,441			0.24			0.23			40.85		32.06		0.13
Total Year	$	377,317	$	121,565	$	59,170		$	58,986		$	41,022		$	1.14		$	1.13		$	40.85	$	23.75	$	0.52

FISCAL 2017
First Quarter	$	68,360	$	20,117	$	8,050		$	7,953		$	5,517		$	0.15		$	0.15		$	16.86	$	12.88	$	0.13
Second Quarter	67,598		18,915		6,696			6,487			4,495			0.12			0.12			21.58		15.01		0.13
Third Quarter^(d)	72,522		19,839		7,389			7,116			5,741			0.16			0.16			25.47		20.21		0.13
Fourth Quarter	68,915		19,319		6,278			6,297			4,438			0.12			0.12			26.90		20.80		0.13
Total Year	$	277,395	$	78,190	$	28,413		$	27,853		$	20,191		$	0.56		$	0.56		$	26.90	$	12.88	$	0.52

FISCAL 2016
First Quarter	$	70,273	$	20,359	$	7,214		$	7,170		$	4,855		$	0.13		$	0.13		$	22.85	$	16.91	$	0.13
Second Quarter	67,518		17,858		6,429			6,163			4,191			0.11			0.11			22.36		18.52		0.13
Third Quarter^(e)	67,611		16,972		(9,823		)	(9,946		)	(6,188		)	(0.17		)	(0.17		)	19.53		15.77		0.13
Fourth Quarter	52,827		11,785		571			694			1,918			0.05			0.05			19.61		13.87		0.13
Total Year	$	258,229	$	66,974	$	4,391		$	4,081		$	4,776		$	0.13		$	0.13		$	22.85	$	13.87	$	0.52
^(a)Net income per share is computed discretely by quarter and may not add to the full year.
^(b)Fiscal year 2018 third and fourth quarters include net sales of $5.2 million and $7.9 million, respectively, related the acquisition of Colorado Lining International, Inc., as further described in Note 6 "Acquisitions of and Investments in Businesses and Technologies" of the Notes to the Consolidated Financial Statements.
^(c) The Tax Cuts and Jobs Act, effective January 1, 2018, lowered the Company's federal statutory rate by 1.2 percentage points and benefited net income approximately $0.7 million for the fiscal year, as further described in Note 10 "Income Taxes" of the Notes to the Consolidated Financial Statements.
^(d)The fiscal year 2017 third quarter includes inventory write-downs of $2,278 for Vista as a result of discontinuing sales activities for a specific radar product line within its business, as further described in Note 7 "Goodwill, Long-Lived Assets, and Other Charges " of the Notes to the Consolidated Financial Statements.
^(e)The fiscal year 2016 third quarter includes pre-contract cost write-offs of $2,933 (which is comprised of $2,075 of costs capitalized as of July 31, 2015 and additional costs of $858 capitalized during August and September 2015), a goodwill impairment loss of $11,497, a long-lived asset impairment loss of $3,813, and a reduction of $2,273 acquisition-related contingent liability for Vista. For further information regarding these impairments and other charges refer to Note 7 "Goodwill, Long-Lived Assets, and Other Charges" of the Notes to the Consolidated Financial Statements.



	Years Ended January 31,												5-Year
Company / Index	2013		2014		2015		2016		2017		2018		CAGR^(a)

Raven Industries, Inc.	$	100.00	$	141.12	$	82.29	$	59.29	$	101.55	$	158.77	9.7	%
S&P 1500 Industrial Machinery Index	100.00		125.99		130.62		119.14		170.46		223.32		17.4	%
Russell 2000 Index	100.00		127.03		132.63		119.47		159.53		186.94		13.3	%
S&P Small Cap 600 Index	100.00		128.44		136.34		129.95		174.58		203.49		15.3	%
^(a)compound annual growth rate (CAGR)



FIVE-YEAR FINANCIAL SUMMARY
	For the years ended January 31,

(In thousands, except employee counts and per-share amounts)	2018			2017			2016				2015			2014
OPERATIONS
Net sales^(a)	$	377,317		$	277,395		$	258,229			$	378,153		$	394,677
Gross profit^(b)	121,565			78,190			66,974				103,246			119,354
Operating income^(b)(c)	59,170			28,413			4,391				43,801			63,994
Income before income taxes^(b)(c)	58,986			27,853			4,081				43,501			63,623
Net income attributable to Raven Industries, Inc.^(d)	41,022			20,191			4,776				31,733			42,903
Net income % of sales	10.9		%	7.3		%	1.8		%		8.4		%	10.9		%
Net income % of average equity^(e)	15.3		%	7.7		%	1.7		%		11.4		%	18.2		%
FINANCIAL POSITION
Cash and cash equivalents	$	40,535		$	50,648		$	33,782			$	51,949		$	52,987
Property, plant and equipment	106,280			106,324			115,704				117,513			98,076
Total assets	326,803			301,509			298,688				362,873			301,819
Total debt (including capital lease obligations)	448			—			—				—			—
Raven Industries, Inc. shareholders' equity	276,064			259,426			264,155				305,153			251,362
Net working capital^(f)	100,777			77,012			77,870				100,183			97,184
Net working capital percentage^(g)	26.3		%	27.9		%	36.9		%		27.9		%	26.2		%
Long-term debt / total capitalization	0.2		%	—		%	—		%		—		%	—		%
CASH FLOWS PROVIDED BY (USED IN)
Operating activities	$	44,961		$	48,636		$	44,008			$	60,083		$	52,836
Investing activities	(25,675		)	(4,642		)	(11,074		)		(29,986		)	(31,615		)
Financing activities	(29,721		)	(27,151		)	(50,684		)		(30,665		)	(17,354		)
Change in cash and cash equivalents	(10,113		)	16,866			(18,167		)		(1,038		)	3,634
COMMON STOCK DATA
EPS — basic	$	1.14		$	0.56		$	0.13			$	0.86		$	1.18
EPS — diluted	1.13			0.56			0.13				0.86			1.17
Cash dividends per share	0.52			0.52			0.52				0.50			0.48
Stock price range during the year
High	$	40.85		$	26.90		$	22.85			$	40.06		$	42.99
Low	23.75			12.88			13.87				20.75			25.46
Close	38.55			25.05			15.01				21.44			37.45
OTHER DATA
Price / earnings ratio^(h)	34.1			44.7			115.5				24.9			32.0
Average number of employees	1,054			907			936			1,251	1,251			1,264
Sales per employee	$	358		$	306		$	276			$	302		$	312

^(a)Fiscal year 2018 includes $13.1 million in net sales related to the acquisition of Colorado Lining International, Inc., further described in Note 6 "Acquisitions of and Investments in Businesses and Technologies" of the Notes to the Consolidated Financial Statements.
^(b)The fiscal year ended January 31, 2017 includes inventory write-downs of $2,278 for Vista as a result of discontinuing sales activities for a specific radar product line within its business, as further described in Note 7 "Goodwill, Long-Lived Assets, and Other Charges " of the Notes to the Consolidated Financial Statements.
^(c) The fiscal year ended January 31, 2016 includes pre-contract cost write-offs of $2,933, a goodwill impairment loss of $11,497, and a long-lived asset impairment loss of $3,826, partially offset by a reduction of $2,273 of an acquisition-related contingent liability for Vista. For further information regarding these impairments and other charges refer to Note 7 "Goodwill, Long-Lived Assets, and Other Charges" of the Notes to the Consolidated Financial Statements.
^(d) The Tax Cuts and Jobs Act, effective January 1, 2018, lowered the Company's federal statutory rate by 1.2 percentage points and benefited net income approximately $0.7 million for the fiscal year, as further described in Note 10 "Income Taxes" of the Notes to the Consolidated Financial Statements.
^(e)Net income attributable to Raven Industries, Inc. divided by average equity. Average equity is the sum of Raven Industries, Inc. shareholders' equity for the beginning of the fiscal year plus Raven Industries, Inc. shareholders' equity for the end of the fiscal year divided by two.
^(f) Net working capital is defined as accounts receivable (net) plus inventories less accounts payable.
^(g) Net working capital percentage is defined as net working capital divided by fourth quarter net sales times four for each of the fiscal years, respectively.
^(h)Closing stock price on last business day of fiscal year divided by EPS — diluted.



ITEM 7.			MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



	For the year ended January 31,
(dollars in thousands)	2016
Applied Technology
Reported net sales	$	92,599
Less: Contract manufacturing sales	546
Applied Technology net sales, excluding contract manufacturing sales	$	92,053

Aerostar
Reported net sales	$	36,368
Less: Contract manufacturing sales	4,701
Aerostar net sales, excluding contract manufacturing sales	$	31,667

Consolidated Raven
Reported net sales	$	258,229
Less: Contract manufacturing sales	5,247
Consolidated net sales, excluding contract manufacturing sales	$	252,982


•	~~Market conditions.~~ Conditions in the agriculture market remain subdued; however, Applied Technology's marketplace strategy has capitalized on new product introductions in fiscal 2018. While OEM and aftermarket sales channel demand


•	~~Sales volume and selling prices.~~ reduction in sales volume.Sales in the OEM and aftermarket channels were up 32.4% and 6.3%, respectively, in fiscal 2018. Fiscal 2018 domestic sales were up 25.0% while international sales were up 1.5%. Higher sales volume, rather than an increase in selling price, was the main driver for these increases.


•	~~Gross margin.~~ Gross margin increased from 41.3% in fiscal 2017 to 43.9% in fiscal 2018. Higher sales volume and lower manufacturing costs increased operating leverage and drove the increase in gross margin. Due to the existing available capacity of the manufacturing facilities, the increase in sales volume did not require a commensurate increase in costs in fiscal 2018.


•	~~Operating expenses.~~ Fiscal 2018 operating expenses were 18.6% of net sales compared to 16.0% for the prior year. Throughout fiscal 2018, the division continued to invest in research and development activities to position itself for incremental new product sales and market share gains in future years.


•	~~Operating expenses.~~ Fiscal 2017 operating expenses were 16.0% of net sales compared to 16.9% for the prior year. Operating expenses increased less than revenues due primarily to continued cost control measures and resulted in a lower percentage of sales year-over-year.


•	~~Market conditions.~~ End-market conditions have improved in the geomembrane market in the second half of fiscal 2017 for Engineered Films. U.S. land-based rig counts have increased approximately 17.0% from January 2016 to January 2017. For fiscal 2017, sales into the geomembrane market increased 16.9% year-over-year.


•	~~Sales volume.~~ ~~The increase was principally driven by higher sales of stratospheric balloons and radar systems.~~


•	~~Gross margin.~~ For fiscal 2018, gross margin increased 11.0 percentage points compared to the prior fiscal year. The improved profitability was driven by higher sales volume, and the absence of inventory write-downs, which lowered prior year results by $2.3 million.


•	~~Operating expenses.~~ Operating expenses as a percentage of net sales decreased 3.7 percentage points compared to prior fiscal year. Fiscal 2018 operating expenses were $6.5 million, or 16.2% of net sales, compared to operating expenses of $6.8 million, or 19.9% of net sales in fiscal 2017.


•	~~Sales volume.~~ Fiscal 2017 net sales decreased $2.3 million from the prior year, a year-over-year decrease of 6.2%. The decline was principally driven by lower aerostat sales due to the timing of deliveries. This was partially offset by higher sales of stratospheric balloons for Project Loon and other customers newly established in fiscal 2017.



(dollars in thousands)		Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Credit facility^(a)		$	485	$	211	$	274	$	—	$	—
Capital lease obligations		528		237		259		32		—
Operating leases		6,655		2,012		3,705		938		—
Unconditional purchase obligations		33,874		33,874		—		—		—
Postretirement benefits^(b)		18,066		313		655		688		16,410
Acquisition-related contingent payments^(c)		3,835		1,278		2,518		39		—
Uncertain tax positions^(d)		2,634		—		—		—		—
		$	66,077	$	37,925	$	7,411	$	1,697	$	16,410
^(a)	Amounts reflect administrative and unborrowed capacity fees under the credit facility described below.
^(b)	Postretirement benefit amounts represent expected payments on the accumulated postretirement benefit obligation before it is discounted.
^(c)	Amounts reflect the expected future earn-out payments related to the acquisitions of CLI, SBG, and Vista. These amounts also reflect the Vista employee bonus pool payments which are separate from the acquisition earn-out payments. Actual payments on these obligations may vary from the expected amounts since the total payment amount due depends upon certain future conditions. See below for further detail on the specific obligations.
^(d)	See below for further details on specific obligations.


ITEM 8.		FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

~~ITEM 8.~~						~~FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA~~

Index to Financial Statements
						Page
					~~Page~~
Management's Report on Internal Control Over Financial Reporting			3832
~~Report~~Reports of Independent Registered Public Accounting Firm - Deloitte & Touche LLP						3933
~~Report of Independent Registered Public Accounting Firm - PricewaterhouseCoopers LLP~~Consolidated Financial Statements
		Consolidated Balance Sheets				4036
~~Consolidated Financial Statements~~
	~~Consolidated Balance Sheets~~	41
	Consolidated Statements of Income and Comprehensive Income		4237
		Consolidated Statements of Shareholders' Equity				4338
		Consolidated Statements of Cash Flows				4439
		Notes to Consolidated Financial Statements				4540
~~Quarterly Information (Unaudited) - included in Item 5~~				14



/s/ DANIEL A. RYKHUS						/s/ ~~STEVEN E. BRAZONES~~TAIMUR SHARIH
Daniel A. Rykhus						~~Steven E. Brazones~~Taimur Sharih
President and Chief Executive Officer						Vice President and Chief Financial Officer



RAVEN INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars and shares in thousands)


RAVEN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollars and shares in thousands, except per-share amounts)



	$1 Par Common Stock		Additional Paid-in Capital		Treasury Stock At Cost		Retained Earnings		Accumulated Other Comprehen-sive Income (Loss)		Raven Industries, Inc. Equity		Non-controlling Interest		Total Equity		Redeem-able Non-controlling Interest

Balance January 31, 2018	$	67,124	$	59,143	$	(100,402)	$	252,772	$	(2,573)	$	276,064	$	2	$	276,066	$	—
Net income	—		—		—		51,794		—		51,794		79		51,873		—
Other comprehensive (loss), net of income tax	—		—		—		—		(703)		(703)		—		(703)		—
Reclassification due to ASU 2018-02 adoption	—		0		—		280		(280)		0		—		0		—
Cash dividends ($0.52 per share)	—		203		—		(18,877)		—		(18,674)		—		(18,674)		—
Dividends of less than wholly-owned subsidiary paid to noncontrolling interest	0		0		—		—		—		0		(79)		(79)		—

Shares issued on stock options exercised, net of shares withheld for employee taxes	113		(2,750)		—		—		—		(2,637)		—		(2,637)		—
Shares issued on vesting of stock units, net of shares withheld for employee taxes	52		(892)		—		—		—		(840)		—		(840)		—

Share-based compensation	—		3,951		—		—		—		3,951		—		3,951		—
Balance January 31, 2019	67,289		59,655		(100,402)		285,969		(3,556)		308,955		2		308,957		0
Net income (loss)	—		—		—		35,196		—		35,196		(1)		35,195		(582)
Other comprehensive (loss), net of income tax	—		—		—		—		(1,859)		(1,859)		—		(1,859)		—
Business acquisition of less than wholly-owned subsidiary (See Note 6)	—		0		—		0		—		0		—		0		24,315
Redemption of noncontrolling interest	—		199		—		—		—		199		0		199		(2,431)
Cash dividends ($0.52 per share)	—		216		—		(18,865)		—		(18,649)		—		(18,649)		—
Dividends of less than wholly-owned subsidiary paid to noncontrolling interest	—		—		—		—		—		0		(1)		(1)		—
Shares issued on stock options exercised, net of of shares withheld for employee taxes	41		(1,069)		—		—		—		(1,028)		—		(1,028)		—
Shares issued on vesting of stock units, net of shares withheld for employee taxes	106		(2,464)		—		—		—		(2,358)		—		(2,358)
Shares repurchased	—		0		(10,781)		—		—		(10,781)		—		(10,781)		—
Share-based compensation	—		4,971		—		—		—		4,971		—		4,971		—
Balance January 31, 2020	67,436		61,508		(111,183)		302,300		(5,415)		314,646		0		314,646		21,302
Net income (loss)	—		—		—		18,876		—		18,876		0		18,876		(98)
Other comprehensive income, net of income tax	—		—		—		—		2,074		2,074		—		2,074		—

Redemption of noncontrolling interest	—		215		—		—		—		215		—		215		(21,204)
Cash dividends ($0.26 per share)	—		182		—		(9,500)		—		(9,318)		—		(9,318)		—

Director shares issued	9		(9)		—		—		—		0		—		0		—
Shares issued on stock options exercised, net of shares withheld for employee taxes	26		(431)		—		—		—		(405)		—		(405)		—
Shares issued on vesting of stock units, net of shares withheld for employee taxes	62		(861)		—		—		—		(799)		—		(799)		—

Share-based compensation	—		6,066		—		—		—		6,066		—		6,066		—
Balance January 31, 2021	$	67,533	$	66,670	$	(111,183)	$	311,676	$	(3,341)	$	331,355	$	0	$	331,355	$	0

The accompanying notes are an integral part of the consolidated financial statements.



RAVEN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF ~~INCOME AND COMPREHENSIVE INCOME~~CASH FLOWS
(Dollars in thousands)





	$1 Par Common Stock		Paid-in Capital			Treasury Stock				Retained Earnings			Accumulated Other Comprehen-sive Income (Loss)			Raven Industries, Inc. Equity			Non-controlling Interest			Total Equity
						Shares	Cost
Balance January 31, 2015	$	66,947	$	53,237		28,897	$	(53,362	)	$	244,180		$	(5,849	)	$	305,153		$	84		$	305,237
Net income	—		—			—	—			4,776			—			4,776			72			4,848
Other comprehensive income (loss), net of income tax	—		—			—	—			—			2,348			2,348			—			2,348
Cash dividends ($0.52 per share)	—		169			—	—			(19,513		)	—			(19,344		)	—			(19,344		)
Dividends of less than wholly-owned subsidiary paid to noncontrolling interest	—		—			—	—			—			—			—			(82		)	(82		)
Share issuance costs related to fiscal 2015 business combination	—		(15		)	—	—			—			—			(15		)	—			(15		)
Shares issued on stock options exercised, net of shares withheld for employee taxes	7		(54		)	—	—			—			—			(47		)	—			(47		)
Shares issued on vesting of stock units, net of shares withheld for employee taxes	52		(510		)	—	—			—			—			(458		)	—			(458		)
Shares repurchased	—		—			1,603	(29,338		)	—			—			(29,338		)	—			(29,338		)
Share-based compensation	—		2,311			—	—			—			—			2,311			—			2,311
Income tax impact related to share-based compensation	—		(1,231		)	—	—			—			—			(1,231		)	—			(1,231		)
Balance January 31, 2016	67,006		53,907			30,500	(82,700		)	229,443			(3,501		)	264,155			74			264,229
Net income	—		—			—	—			20,191			—			20,191			1			20,192
Other comprehensive income, net of income tax	—		—			—	—			—			(175		)	(175		)	—			(175		)
Cash dividends ($0.52 per share)	—		216			—	—			(18,985		)	—			(18,769		)	—			(18,769		)
Dividends of less than wholly-owned subsidiary paid to noncontrolling interest	—		—			—	—			—			—			—			(70		)	(70		)
Director shares issued	19		(19		)	—	—			—			—			—			—			—
Shares issued on vesting of stock units, net of shares withheld for employee taxes	35		(291		)	—	—			—			—			(256		)	—			(256		)
Shares repurchased	—		—			484	(7,702		)	—			—			(7,702		)	—			(7,702		)
Share-based compensation	—		3,071			—	—			—			—			3,071			—			3,071
Income tax impact related to share-based compensation	—		(1,089		)	—	—			—			—			(1,089		)	—			(1,089		)
Balance January 31, 2017	67,060		55,795			30,984	(90,402		)	230,649			(3,676		)	259,426			5			259,431
Net income	—		—			—	—			41,022			—			41,022			(3		)	41,019
Other comprehensive income, net of income tax	—		—			—	—			—			1,103			1,103			—			1,103
Cash dividends ($0.52 per share)	—		214			—	—			(18,899		)	—			(18,685		)	—			(18,685		)
Director shares issued	26		(26		)	—	—			—			—			—			—			—
Shares issued on stock options exercised, net of shares withheld for employee taxes	21		(311		)	—	—			—			—			(290		)	—			(290		)
Shares issued on vesting of stock units, net of shares withheld for employee taxes	17		(254		)	—	—			—			—			(237		)	—			(237		)
Shares repurchased	—		—			348	(10,000		)	—			—			(10,000		)	—			(10,000		)
Share-based compensation	—		3,725			—	—			—			—			3,725			—			3,725
Balance January 31, 2018	$	67,124	$	59,143		31,332	$	(100,402	)	$	252,772		$	(2,573	)	$	276,064		$	2		$	276,066
The accompanying notes are an integral part of the consolidated financial statements.



	As of January 31,
	2018^(a)			2017^(a)
Accounts receivable, net:
Trade accounts	$	59,510		$	43,834
Allowance for doubtful accounts	(978		)	(691		)
	$	58,532		$	43,143
Inventories:
Finished goods	$	8,054		$	5,438
In process	961			2,288
Materials	46,336			34,610
	$	55,351		$	42,336
Other current assets:
Insurance policy benefit	$	759		$	802
Federal income tax receivable	1,397			604
Prepaid expenses and other	3,705			1,283
	$	5,861		$	2,689
Property, plant and equipment, net:
Assets held for use and assets held for sale^(a):
Land	$	3,234		$	3,054
Buildings and improvements	80,299			77,817
Machinery and equipment	149,847			142,471
Accumulated depreciation	(127,523		)	(117,018		)
	$	105,857		$	106,324

Property, plant and equipment subject to capital leases:
Machinery and equipment	488			—
Accumulated amortization for capitalized leases	(65		)	—
	423			—
	$	106,280		$	106,324
Other assets:
Equity investments	$	1,955		$	2,371
Deferred income taxes	19			18
Other	976			1,283
	$	2,950		$	3,672
Accrued liabilities:
Salaries and related	$	9,409		$	6,286
Benefits	4,225			3,960
Insurance obligations	1,992			2,400
Warranties	1,163			1,547
Income taxes	226			498
Other taxes	1,880			1,540
Acquisition-related contingent consideration	1,036			445
Other	2,015			1,379
	$	21,946		$	18,055
Other liabilities:
Postretirement benefits	$	8,264		$	8,054
Acquisition-related contingent consideration	2,010			1,397
Deferred income taxes	615			1,421
Uncertain tax positions	2,634			2,610
Other	272			214
	$	13,795		$	13,696



	As of January 31
	2018
Assets held for sale
Property, plant and equipment, net	63
Goodwill	103
Amortizable intangible assets, net	329
Other assets	17
Total assets held for sale	$	512

Liabilities held for sale
Current liabilities	$	91
Total liabilities held for sale	$	91


	Applied Technology		Engineered Films		Aerostar		Total
Balance at January 31, 2019	$	17,076	$	33,232	$	634	$	50,942
Additions due to business combinations	55,989		0		0		55,989

Foreign currency translation adjustment	(422)		0		0		(422)
Balance at January 31, 2020	72,643		33,232		634		106,509
Measurement period adjustments	(440)		0		0		(440)

Foreign currency translation adjustment	1,608		0		0		1,608
Balance at January 31, 2021	$	73,811	$	33,232	$	634	$	107,677


	2022		2023		2024		2025		2026
Estimated amortization expense	$	2,498	$	2,389	$	1,907	$	1,878	$	1,582