UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)



þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended ~~April 30,~~July 31, 2012



o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from to

Commission File: 001-07982

RAVEN INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)



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

205 East 6th Street, P.O. Box 5107, Sioux Falls, SD 57117-5107

(Address of principal executive offices)

(605) 336-2750

(Registrant’s telephone number including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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 Web site, 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



Large Accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes þ No

As of ~~May 29,~~August 27, 2012 there were ~~18,136,822~~36,298,798 shares of common stock, $1 par value, of Raven Industries, Inc. outstanding. There were no other classes of stock outstanding.

RAVEN INDUSTRIES, INC.

INDEX



	PAGE

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements:
Consolidated Balance Sheets (unaudited)	3
Consolidated Statements of Income and Comprehensive Income (unaudited)	4
Consolidated Statements of Cash Flows (unaudited)	5
Notes to Consolidated Financial Statements (unaudited)	6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	1113
Item 3. Quantitative and Qualitative Disclosures about Market Risks	1719
Item 4. ~~Internal~~ Controls and Procedures	1720

PART II - OTHER INFORMATION

Item 1. Legal Proceedings	1821
Item 1A. Risk Factors	1821
Item 2. ~~Changes in~~Unregistered Sales of Equity Securities and Use of Proceeds	1821
Item 3. Defaults ~~upon~~Upon Senior Securities	1821
Item 4. Mine Safety Disclosures	1821
Item 5. Other Information	1821
Item 6. Exhibits ~~Filed~~	1821
Signatures	1922

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RAVEN INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS
(unaudited)


(in thousands, except per-share data)	April 30, 2012			January 31, 2012			April 30, 2011
(Dollars and shares in thousands, except per-share data)										July 31, 2012			January 31, 2012			July 31, 2011
ASSETS
Current assets
Cash and cash equivalents	$	43,536		$	25,842		$	42,125		$	44,113		$	25,842		$	46,978
Short-term investments	—			—			500
Accounts receivable, net of allowances of $170, $170, and $200, respectively	58,641			60,759			50,542
Accounts receivable, net										49,885			60,759			43,248
Inventories	54,664			54,756			45,538			50,389			54,756			50,249
Deferred income taxes	3,182			3,299			2,878			3,251			3,299			2,804
Other current assets	4,886			2,903			3,113			4,122			2,903			2,937
Total current assets	164,909			147,559			144,696			151,760			147,559			146,216

Property, plant and equipment, net	64,888			61,894			42,409			73,189			61,894			48,011
Goodwill	22,274			22,274			10,777			22,274			22,274			10,777
Amortizable intangible assets, net	9,220			9,412			1,700			8,971			9,412			1,816
Other assets, net	4,434			4,564			4,653			4,254			4,564			4,508
TOTAL ASSETS	$	265,725		$	245,703		$	204,235		$	260,448		$	245,703		$	211,328

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	17,134		$	16,162		$	17,447		$	10,835		$	16,162		$	16,825
Accrued liabilities	20,665			20,397			11,782			23,971			22,993			14,887
Taxes - accrued and withheld	11,300			2,596			6,713
Customer advances	1,200			1,491			1,320			1,111			1,491			2,258
Total current liabilities	50,299			40,646			37,262			35,917			40,646			33,970

Other liabilities	18,931			24,467			12,637			19,204			24,467			13,229

Commitments and contingencies

Shareholders' Equity
Common stock, $1 par value, authorized shares 100,000; issued 32,576; 32,566; and 32,528, respectively	32,576			32,566			32,528
Common stock, $1 par value, authorized shares 100,000; issued 65,196; 65,132; and 65,078, respectively										65,196			32,566			32,539
Paid in capital	10,240			9,607			7,540			3,934			9,607			8,088
Retained earnings	208,871			193,650			168,582			191,397			193,650			177,783
Accumulated other comprehensive loss	(1,901		)	(1,962		)	(952		)	(1,931		)	(1,962		)	(919		)
Less treasury stock at cost, 14,449 shares	(53,362		)	(53,362		)	(53,362		)
Treasury stock at cost, 28,897 shares										(53,362		)	(53,362		)	(53,362		)
Total Raven Industries, Inc. shareholders' equity	196,424			180,499			154,336			205,234			180,499			164,129
Noncontrolling interest	71			91			—			93			91			—
Total shareholders' equity	196,495			180,590			154,336			205,327			180,590			164,129
TOTAL LIABILITY AND SHAREHOLDERS' EQUITY	$	265,725		$	245,703		$	204,235
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY										$	260,448		$	245,703		$	211,328

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

RAVEN INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(unaudited)


	Three Months Ended						Three Months Ended						Six Months Ended
(in thousands, except per-share data)	April 30, 2012			April 30, 2011
(Dollars in thousands, except per-share data)							July 31, 2012			July 31, 2011			July 31, 2012			July 31, 2011
Net sales	$	117,915		$	101,541		$	101,674		$	90,344		$	219,589		$	191,885
Cost of sales	76,780			68,605			71,610			62,214			148,390			130,819
Gross profit	41,135			32,936			30,064			28,130			71,199			61,066

Research and development expenses	3,400			2,243			3,564			2,374			6,964			4,617
Selling, general and administrative expenses	9,303			7,160			9,093			7,082			18,396			14,242
Operating income	28,432			23,533			17,407			18,674			45,839			42,207

Other income (expense), net	(52		)	(13		)
Other (expense), net							(96		)	(76		)	(148		)	(89		)
Income before income taxes	28,380			23,520			17,311			18,598			45,691			42,118

Income taxes	9,357			7,804			5,743			6,137			15,100			13,941
Net income	19,023			15,716			11,568			12,461			30,591			28,177

Net (loss) attributable to the noncontrolling interest	(20		)	—
Net income attributable to the noncontrolling interest							22			—			2			—

Net income attributable to Raven Industries, Inc.	$	19,043		$	15,716		$	11,546		$	12,461		$	30,589		$	28,177

Net income per common share:
─ Basic	$	1.05		$	0.87		$	0.32		$	0.34		$	0.84		$	0.78
─ Diluted	$	1.04		$	0.86		$	0.32		$	0.34		$	0.84		$	0.77

Cash dividends paid per common share	$	0.21		$	0.18		$	0.105		$	0.09		$	0.21		$	0.18

Comprehensive income:
Net income	$	19,023		$	15,716		$	11,568		$	12,461		$	30,591		$	28,177

Other comprehensive income, net of tax:
Foreign currency translation	23			139			(68		)	21			(45		)	160
Postretirement benefits, net of income tax of $20 and $15, respectively	38			29
Postretirement benefits, net of income tax expense of $20, $7, $41 and $22, respectively							38			12			76			41
Other comprehensive income, net of tax	61			168			(30		)	33			31			201

Comprehensive income	19,084			15,884			11,538			12,494			30,622			28,378

Comprehensive (loss) attributable to noncontrolling interest	(20		)	—
Comprehensive income attributable to noncontrolling interest							22			—			2			—

Comprehensive income attributable to Raven Industries, Inc.	$	19,104		$	15,884		$	11,516		$	12,494		$	30,620		$	28,378

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

RAVEN INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Three Months Ended						Six Months Ended
(in thousands)	April 30, 2012			April 30, 2011
(Dollars in thousands)							July 31, 2012			July 31, 2011
OPERATING ACTIVITIES:
Net income	$	19,023		$	15,716		$	30,591		$	28,177
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,892			1,985			6,036			4,159
Gain on acquisition-related contingent liability settlement							(508		)	—
Change in fair value of acquisition-related contingent consideration	(253		)	31			508			(93		)
Earnings of equity investee	24			1			57			27
Deferred income taxes	(477		)	845			(590		)	1,352
Share-based compensation expense	525			392			1,570			984
Change in operating assets and liabilities:
Accounts receivable	2,105			(10,468		)	10,798			(3,192		)
Inventories	97			(1,833		)	4,368			(6,546		)
Prepaid expense and other assets	(1,793		)	(1,117		)	(990		)	(932		)
Operating liabilities	6,077			5,463			(7,407		)	2,427
Other operating activities, net	(8		)	(7		)	29			(100		)
Net cash provided by operating activities	28,212			11,008			44,462			26,263

INVESTING ACTIVITIES:
Capital expenditures	(4,900		)	(3,585		)	(16,870		)	(11,000		)
Payments related to business acquisitions, net of cash acquired	(1,867		)	(8		)
Sales of short-term investments	—			500			—			1,000
Other investing activities, net	(58		)	(264		)	22			(501		)
Net cash used in investing activities	(6,825		)	(3,357		)	(16,848		)	(10,501		)

FINANCING ACTIVITIES:
Dividends paid	(3,806		)	(3,254		)	(7,618		)	(6,509		)
Payments of acquisition-related contingent liability							(1,867		)	—
Other financing activities, net	103			100			163			62
Net cash used in financing activities	(3,703		)	(3,154		)	(9,322		)	(6,447		)

Effect of exchange rate changes on cash	10			65			(21		)	100

Net increase (decrease) in cash and cash equivalents	17,694			4,562
Net increase in cash and cash equivalents							18,271			9,415
Cash and cash equivalents at beginning of year	25,842			37,563			25,842			37,563
Cash and cash equivalents at end of year	$	43,536		$	42,125		$	44,113		$	46,978

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

RAVEN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(in thousands, except per-share amounts)

(1) BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

Raven Industries, Inc. (the Company or Raven) is an industrial manufacturer providing a variety of products to customers within the industrial, agricultural, energy, construction and military/aerospace markets, primarily in North America. The Company is comprised of unique operating units, or divisions, classified into three reportable segments: Applied Technology, Engineered Films and Aerostar.

The accompanying unaudited consolidated financial information, which includes the accounts of Raven and its wholly-owned or controlled subsidiaries, net of intercompany balances and transactions which have been eliminated, has been prepared by ~~Raven Industries, Inc. (the “company”)~~the Company in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (SEC). Accordingly, it does not include all of the information and notes required by ~~accounting principles generally accepted in the United States of America~~GAAP for complete financial statements. This financial information should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended January 31, 2012.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of this financial information have been included. Financial results for the interim three- and ~~three~~six-month ~~period~~periods ended ~~April 30,~~July 31, 2012 are not necessarily indicative of the results that may be expected for the year ending January 31, 2013. The January 31, 2012 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by ~~accounting principles generally accepted~~GAAP. Preparing financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These affect the ~~United States~~reported amounts of ~~America. This financial information should be read in conjunction with~~assets and liabilities as of the ~~consolidated~~date of the financial statements and ~~notes included in~~ the ~~company’s Annual Report on Form 10-K for~~reported amounts of revenues and expenses during the ~~year ended~~ ~~January 31, 2012~~.reporting period. Actual results could differ from those estimates.

~~Non-controlling~~Noncontrolling interests represent capital contributions, income and loss attributable to the owners of less than wholly-owned and consolidated entities. The ~~company~~Company owns a 75% interest in an entity consolidated under the Aerostar business segment. Given the ~~company's~~Company's majority ownership interest, the accounts of the business venture have been consolidated with the accounts of the ~~company,~~Company, and a noncontrolling interest has been recorded for the noncontrolling ~~investor's~~investor interests in the net assets and operations of the business venture. ~~The non-controlling interests share~~No capital contributions were made by the noncontrolling interest during the three and six-month periods ended July 31, 2012.

On May 23, 2012, the Board of Directors declared a two-for-one split of the ~~net loss~~Company's common stock to be effected in the form of a stock dividend. The record date for the stock dividend was July 10, 2012, with the shares distributed on July 25, 2012. Upon completion of the stock split, the Company's shares outstanding increased from approximately 32,598 shares to 65,196 shares. All share and per share amounts in this Quarterly Report on Form 10-Q reflect the stock split and have been retroactively adjusted for all periods presented.

For the six months ended July 31, 2012, the Company revised the amounts previously presented for cash used in investing activities and cash used in financing activities by $201,867 for ~~the three months ended April 30, 2012. The non-controlling interest made~~ no ~~capital contributions~~acquisition-related contingent liability payments during the three months ended April 30, 2012. This immaterial change increased cash used in financing activities and decreased cash used in investing activities by $1,867. The Company will revise the statement of cash flows for the three months ended April 30, 2012 for this item in future filings.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

There have been no material changes to the ~~company's~~Company's significant accounting policies as ~~compared to the significant accounting policies~~ described in the ~~company's~~Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2012. ~~Additionally,~~

The Company did, however, evaluate and update its revenue recognition policy to reflect characteristics of contracts entered into by its subsidiary, Vista Research, Inc. (Vista) acquired in January 2012. Raven recognizes revenue when it is realized or realizable and has been earned. Revenue is recognized when there ~~were no new accounting standards issued~~is persuasive evidence of an arrangement, the sales price is determinable, collectability is reasonably assured and shipment or ~~effective during the three months ended April 30, 2012 that had or are expected to have a material impact~~delivery has occurred (depending on the ~~company's consolidated results~~terms of the sale). The Company sells directly to customers or distributors who incur the expense and commitment for any post-sale obligations beyond stated warranty terms. Estimated returns, sales allowances or warranty charges are recognized upon shipment of a product. The Company has updated its policy to recognize revenue on certain long-term, service-related contracts under the percentage-of-completion method of accounting, whereby contract revenues are recognized on a pro-rata basis based upon the ratio of costs incurred compared

(IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)

to total estimated contract costs. Losses estimated to be incurred upon completion of contracts are charged to operations ~~financial condition, or cash flows.~~when they become known. This addition to our policy will better match revenues with the expenses on these contracts.

(3) NET INCOME PER SHARE

Basic net income per share is computed by dividing net income by the ~~weighted-average~~weighted average common shares and stock units outstanding. Diluted net income per share is computed by dividing net income by the ~~weighted-average~~weighted average common and common equivalent shares outstanding ~~(which~~which includes the shares issuable upon exercise of employee stock options ~~net~~(net of shares assumed purchased with the option proceeds), stock units and restricted stock units outstanding. Performance share awards are included in the diluted calculation based upon what would be issued if the end of the most recent reporting period was the end of the term of the award.

Certain outstanding options and restricted stock units were excluded from the diluted net income per-share calculations because their effect would have been anti-dilutive under the treasury stock method. For the three and six-month periods ended ~~April 30,~~July 31, 2012, 393 and ~~April 30,~~352 options and restricted stock units were excluded, respectively. For the three and six-month periods ended July 31, 2011, ~~169~~272 and ~~136~~272 ~~shares and units~~options were excluded, respectively.

~~Details~~The computation of ~~the computation are~~earnings per share is presented below:

~~(IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)~~


	Three Months Ended				Three Months Ended				Six Months Ended
	April 30, 2012		April 30, 2011		July 31, 2012		July 31, 2011		July 31, 2012		July 31, 2011
Numerator:
Net income attributable to Raven Industries, Inc.	$	19,043	$	15,716	$	11,546	$	12,461	$	30,589	$	28,177

Denominator:
Weighted average common shares outstanding	18,122		18,075		36,286		36,166		36,265		36,158
Weighted average stock units outstanding	25		27		57		58		53		56
Denominator for basic calculation	18,147		18,102		36,343		36,224		36,318		36,214

Weighted average common shares outstanding	18,122		18,075		36,286		36,166		36,265		36,158
Weighted average stock units outstanding	25		27		57		58		53		56
Dilutive impact of stock options and restricted units	114		110
Dilutive impact of stock options and restricted stock units					222		206		227		214
Denominator for diluted calculation	18,261		18,212		36,565		36,430		36,545		36,428

Net income per share - basic	$	1.05	$	0.87	$	0.32	$	0.34	$	0.84	$	0.78
Net income per share - diluted	$	1.04	$	0.86	$	0.32	$	0.34	$	0.84	$	0.77

(4) SELECTED BALANCE SHEET INFORMATION

Following are the components of selected ~~balance sheet items:~~items from the Consolidated Balance Sheets:

(IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)



							July 31, 2012			January 31, 2012			July 31, 2011
Accounts Receivable, net:
Trade accounts							$	50,055		$	60,929		$	43,510
Allowance for doubtful accounts							(170		)	(170		)	(262		)
	April 30, 2012		January 31, 2012		April 30, 2011		$	49,885		$	60,759		$	43,248
Inventories:
Finished goods	$	7,688	$	7,094	$	7,916	$	7,394		$	7,094		$	7,780
In process	6,847		6,105		5,986		4,979			6,105			7,687
Materials	40,129		41,557		31,636		38,016			41,557			34,782
							$	50,389		$	54,756		$	50,249
Property, plant and equipment, net:
Property, plant and equipment							$	145,433		$	128,948		$	111,518
Accumulated depreciation							(72,244		)	(67,054		)	(63,507		)
	$	54,664	$	54,756	$	45,538	$	73,189		$	61,894		$	48,011
Accrued liabilities:
Salaries and benefits	$	2,635	$	4,297	$	1,972	$	2,993		$	4,297		$	2,356
Vacation	4,584		4,387		3,504		4,155			4,387			3,484
401(k) contributions	555		966		228		611			966			271
Insurance obligations	2,887		2,789		3,134		3,003			2,789			3,085
Profit sharing	413		1,244		354		612			1,244			536
Warranties	1,792		1,699		1,631		1,949			1,699			1,642
Acquisition-related contingent consideration	6,658		3,266		266		7,028			3,266			271
Taxes - Accrued and withheld							1,999			2,596			2,244
Other	1,141		1,749		693		1,621			1,749			998
	$	20,665	$	20,397	$	11,782	$	23,971		$	22,993		$	14,887
Other liabilities:
Postretirement benefits	$	7,423	$	7,348	$	5,774	$	7,520		$	7,348		$	5,880
Acquisition-related contingent consideration	2,169		7,655		2,249		2,108			7,655			2,076
Deferred income taxes	3,944		4,518		102		3,919			4,518			517
Uncertain tax positions	5,395		4,946		4,512		5,657			4,946			4,756
	$	18,931	$	24,467	$	12,637	$	19,204		$	24,467		$	13,229

(5) ACQUISITIONS OF AND INVESTMENTS IN BUSINESSES AND TECHNOLOGIES

Pursuant to the Company's 2009 purchase of substantially all of the assets of Ranchview Inc. (Ranchview), a privately held Canadian corporation, Raven agreed to pay contingent consideration for future sales of Ranchview products up to a maximum of $4,000. During the first quarter of fiscal 2013, the ~~company~~Company paid $1,841 in cash to the previous Ranchview owner for an early buyout of the outstanding ~~acquisition related~~acquisition-related contingent ~~liability related to future Ranchview sales.~~liability. This resulted in a gain of $508 during the first quarter of fiscal ~~2012~~2013 which is included in Applied Technology operating income.

~~(IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)~~

(6) EMPLOYEE RETIREMENT BENEFITS

The Company provides postretirement medical and other benefits to senior executive officers and senior managers. There are no plan assets for the plans and any obligations are covered through operating cash and investments. The components of net periodic benefit cost for postretirement benefits are as follows:


	Three Months Ended				Three Months Ended				Six Months Ended
	April 30, 2012		April 30, 2011		July 31, 2012		July 31, 2011		July 31, 2012		July 31, 2011
Service cost	$	47	$	30	$	47	$	30	$	94	$	60
Interest cost	84		84		84		84		168		168
Amortization of actuarial losses	58		32		58		31		116		63
Net periodic benefit cost	$	189	$	146	$	189	$	145	$	378	$	291

(IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)

(7) WARRANTIES

Accruals necessary for product warranties are estimated based on historical warranty costs and average time elapsed between purchases and returns for each division. Additional accruals are made for any significant, discrete warranty issues. Changes in the warranty accrual were as follows:


	Three Months Ended						Three Months Ended						Six Months Ended
	April 30, 2012			April 30, 2011			July 31, 2012			July 31, 2011			July 31, 2012			July 31, 2011
Beginning balance	$	1,699		$	1,437		$	1,792		$	1,631		$	1,699		$	1,437
Accrual for warranties	820			807			778			781			1,598			1,588
Settlements made (in cash or in kind)	(727		)	(613		)	(621		)	(770		)	(1,348		)	(1,383		)
Ending balance	$	1,792		$	1,631		$	1,949		$	1,642		$	1,949		$	1,642

(8) FINANCING ARRANGEMENTS

Raven has an uncollateralized credit agreement providing a line of credit of $10,500 with a maturity date of ~~September 1,~~November 30, 2012, bearing interest at the prime rate with a minimum rate of ~~4.00%~~4%. Letters of credit totaling $~~$1,342~~992 have been issued under the line of credit, primarily to support self-insured workers' compensation bonding requirements. No borrowings were outstanding as of ~~April 30,~~July 31, 2012, January 31, 2012 ~~and~~or ~~April 30,~~July 31, 2011, and $~~9,158~~9,508 was available at ~~April 30,~~July 31, 2012.

(9) DIVIDENDS ~~AND STOCK SPLIT~~

Dividends paid during the ~~three~~six months ended ~~April 30,~~July 31, 2012 ~~was~~were $~~3,806~~7,618 or 21 cents per share. Dividends paid during the ~~three~~six months ended ~~April 30,~~July 31, 2011 ~~was~~were $~~3,254~~6,509 or 18 cents per share.

The ~~company~~Company announced on ~~May 23,~~August 28, 2012, that the ~~board~~Board of ~~directors~~Directors approved a quarterly cash dividend of 2110.50 cent ~~cents~~s per share, payable ~~July~~October 25, 2012 to shareholders of record on ~~July~~October 10, 2012.

~~On May 23, 2012, the Board of Directors declared a~~ ~~two~~-for-one split of the company's common stock to be effected in the form of a stock dividend. The record date for the stock dividend is July 10, 2012, with the shares distributed on July 25, 2012. Per share calculations and average shares outstanding for all reported periods will be retrospectively adjusted during the second quarter of fiscal 2013.

~~Pro forma basic and diluted earnings per share on a post stock split basis for the three months ended April 30, 2012 would both have been $0.52~~ ~~per share. Pro forma basic and diluted earnings per share on a post stock split basis for the three months ended April 30, 2011 would both have been $0.43~~ ~~per share.~~

(10) SHARE-BASED COMPENSATION

Under the Amended and Restated 2010 Stock ~~Options~~Incentive Plan effective March 23, 2012, administered by the Personnel and Compensation Committee of the Board of Directors, two types of awards were granted during the six months ended July 31, 2012.

Stock Option Awards

The ~~company~~Company granted 76151 non-qualified stock options during the three months ended April 30, 2012. Options are granted with

~~(IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)~~

exercise prices not less than market value of the Company's common stock at the date of grant. The stock options vest over a four-year period and expire after five- years. Options contain retirement and ~~change in control~~change-in-control provisions that may accelerate the vesting period. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. The ~~company~~Company uses historical data to estimate option exercise and employee termination within ~~the~~this valuation model.No ~~stock~~

The fair value of options ~~were~~ granted during the three months ended April 30, ~~2011.~~

~~The fair value of each option grant is~~2012 was estimated ~~on the date of grant~~ using ~~the Black-Scholes option pricing model, with~~ the following weighted average assumptions:


	Three Months Ended
	April 30, 2012
Risk-free interest rate	0.86		%	0.86		%
Expected dividend yield	1.33		%	1.33		%
Expected volatility factor	49.65		%	49.65		%
Expected option term (in years)	3.75			3.75

Weighted average grant date fair value	$	21.91		$	10.96

The Company did not grant any options during the three months ended July 31, 2012 or during the three and six months ended April 30, 2011 and July 31, 2011.

Restricted Stock ~~Units~~

Unit Awards

~~During~~The Company granted 21 time-vested and 51 performance-based restricted stock units to employees during the three months ended April 30, ~~2012, the company granted~~ 11 ~~time vested and~~ 25 ~~performance based restricted stock units to employees under the 2010 Stock Incentive Plan. Time vested~~2012. Time-vested restricted stock units will vest, if at the end of the three~~- year~~-year period, the employee ~~is still with~~remains employed

(IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)

by the ~~company.~~Company. The ~~performance based~~performance-based restricted stock units will vest if, at the end of the three-year performance period, the ~~company~~Company has achieved certain performance goals and the ~~individual~~employee remains employed by the ~~company.~~Company. The exact number of performance shares to be issued will vary from 0% to 150% of the target award, depending on the ~~company's~~Company's actual performance over the three-year period in comparison to the target award goal based on return on sales (ROS)~~. Return on sales~~, which is defined as net income divided by net sales. Dividends are cumulatively earned on ~~the~~both types of restricted stock units over the vesting period.

The fair value of a ~~time vested~~time-vested restricted stock unit is measured based upon the closing market price of the Company's common stock ~~as of~~on the date of grant. The grant date fair value of the time-vested restricted stock units ~~on the grant date~~ was $~~63.31~~31.66.

~~Fair~~The fair value ~~is determined for~~of the ~~performance share awards~~performance-based restricted stock units is based upon the closing market price of the Company's common stock ~~as of~~on the grant date ~~of grant~~ multiplied by the number of ~~shares~~restricted stock units granted, which is determined by an estimated ROS target over the ~~three year~~three-year performance period. The estimated ROS performance used to estimate the number of restricted stock units expected to vest is evaluated at least quarterly. The number of restricted stock units issued at the vesting date will be based on actual results. The fair value of the performance-based restricted stock units on the grant date was $~~63.31~~31.66. ~~The estimated performance of ROS used to estimate~~

No time-vested or performance-based restricted stock units were granted during the ~~number of shares expected to vest is evaluated at least quarterly.~~three months ended July 31, 2012 or the three and six months ended April 30, 2011 and July 31, 2011.

(11) SEGMENT REPORTING

The ~~company has four business segments: Applied Technology Division, Engineered Films Division, Aerostar Division, and Electronic Systems Division. The company's~~Company's reportable segments are defined by their common technologies, production processes and inventories. These segments reflect Raven's organization into three Raven divisions and the Aerostar subsidiary. Raven Canada, Raven GmbH, Raven Australia, and Raven Brazil are included in the Applied Technology Division. Vista and AIS are included in the Aerostar Division. Substantially all of the company's long-lived assets are located in the United States.

The ~~company~~Company measures the performance of its segments based on their operating income excluding administrative and general expenses. Other ~~income, interest~~ expense and income taxes are not allocated to individual operating segments, and assets not identifiable to an individual segment are included as corporate assets. Segment information is reported consistent with the ~~company's~~Company's management reporting structure.

~~Intersegment~~

The Company has three business segments: Applied Technology Division, Engineered Films Division and Aerostar Division. The Company realigned the assets and team members of its Electronic Systems Division and deployed them into the Company's Aerostar and Applied Technology Divisions effective June 1, 2012. The realigned divisions will better align the Company's corporate structure with its mission and long-term growth strategies. Electronic Systems net sales of electronic manufacturing assemblies were ~~primarily from Electronic Systems~~realigned to Aerostar and the remaining proprietary products, after adjustments to intersegment eliminations, to Applied Technology. The Company adjusted its segment information, retrospectively, for all periods presented to reflect this change in segment reporting. This unaudited, adjusted segment information was derived from audited financial statements as of and for the years ended January 31, 2012, 2011, and 2010 as well as the unaudited financial statements for the six months ended July 31, 2011.

Business segment net sales and operating income results are as follows:



	Three Months Ended						Six Months Ended
	July 31, 2012			July 31, 2011			July 31, 2012			July 31, 2011
Net sales
Applied Technology Division	$	40,071		$	35,433		$	93,812		$	77,453
Engineered Films Division	36,785			32,459			77,879			62,550
Aerostar Division	26,845			23,245			52,480			53,953
Intersegment eliminations (a)	(2,027		)	(793		)	(4,582		)	(2,071		)
Consolidated net sales	$	101,674		$	90,344		$	219,589		$	191,885

Operating income (loss)
Applied Technology Division	$	12,909		$	13,236		$	34,959		$	29,403
Engineered Films Division	6,819			5,284			15,998			9,413
Aerostar Division	2,309			3,373			3,751			9,774
Intersegment eliminations (a)	17			8			(62		)	—
Total reportable segment income	22,054			21,901			54,646			48,590
Administrative and general expenses	(4,647		)	(3,227		)	(8,807		)	(6,383		)
Consolidated operating income	$	17,407		$	18,674		$	45,839		$	42,207

(a) Intersegment sales were primarily from Aerostar to Applied Technology.

As a result of the change in the Company's organizational structure, the financial results of the Electronic Systems Division have

#910

(IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)

Three Months Ended
April 30,
2012 April 30,
2011
Net sales
Applied Technology $ 50,480
$ 39,125
Engineered Films 41,094
30,091
Aerostar 10,801
15,139
Electronic Systems 19,120
19,477
Intersegment eliminations (3,580 ) (2,291 )
Consolidated net sales $ 117,915
$ 101,541

Operating income (loss)
Applied Technology $ 20,910
$ 15,074
Engineered Films 9,179
4,129
Aerostar (1,161 ) 4,062
Electronic Systems 3,695
3,412
Intersegment eliminations (31 ) 12
Total reportable segment income 32,592
26,689
Administrative and general expenses (4,160 ) (3,156 )
Consolidated operating income $ 28,432
$ 23,533

~~Effective June 1, 2012,~~been included in the ~~company will realign the assets and team members of its Electronic Systems Division deploying them into the company's~~ Aerostar and Applied Technology ~~Divisions. This repositioning is expected to better align~~segment disclosures. The following tables show revised segment sales, operating income, assets, capital expenditures and depreciation and amortization for the ~~company's corporate structure with its mission and long-term growth strategies. Approximately~~ ~~75 percent~~ of Electronic Systems net sales will go to Aerostar and the remaining balance, after adjustments to intersegment eliminations, to Applied Technology. After the realignment, the company will continue with its core growth divisions: Applied Technology, Engineered Films and Aerostar. The company's internal reporting (chief operating decision maker reports) will be changed to reflect this realignment during the second quarter of fiscal ~~2013. During the quarter ending July~~years ended January 31, 2012, ~~the company will retrospectively adjust its segment information for all periods presented to reflect this change in segment reporting.~~

2011 and 2010:

#1011

(IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)



	For the years ended January 31
	2012						2011						2010
	Previously Reported			Revised			Previously Reported			Revised			Previously Reported			Revised
APPLIED TECHNOLOGY DIVISION
Sales	$	132,632		$	145,261		$	100,090		$	107,910		$	86,217		$	94,005
Operating income	45,358			49,750			31,135			33,197			25,722			27,538
Assets	69,977			73,872			52,669			55,740			51,029			54,007
Capital expenditures	11,408			11,971			1,769			1,947			941			1,092
Depreciation and amortization	2,351			2,571			2,238			2,483			1,677			1,863
ENGINEERED FILMS DIVISION
Sales	$	133,481		$	133,481		$	105,838		$	105,838		$	63,783		$	63,783
Operating income ^(b)	21,501			21,501			19,622			19,622			10,232			10,232
Assets	65,100			65,100			46,519			46,519			35,999			35,999
Capital expenditures	10,937			10,937			8,450			8,450			1,460			1,460
Depreciation and amortization	4,313			4,313			3,452			3,452			3,707			3,707
AEROSTAR DIVISION
Sales	$	52,351		$	107,811		$	48,787		$	104,384		$	27,244		$	81,617
Operating income	11,468			18,308			9,407			17,209			5,634			12,849
Assets	51,822			72,089			18,140			38,366			10,462			28,665
Capital expenditures	3,875			4,105			2,190			2,621			332			471
Depreciation and amortization	1,079			1,684			757			1,335			398			1,151
ELECTRONIC SYSTEMS DIVISION
Sales	$	71,744		$	—		$	65,852		$	—		$	63,525		$	—
Operating income	11,264			—			9,917			—			8,979			—
Assets	24,281			—			23,385			—			21,216			—
Capital expenditures	793			—			609			—			290			—
Depreciation and amortization	825			—			823			—			939			—
INTERSEGMENT ELIMINATIONS
Sales
Engineered Films Division	$	(193	)	$	(193	)	$	(307	)	$	(307	)	$	(210	)	$	(210	)
Aerostar Division	(1		)	(4,389		)	(32		)	(2,891		)	(1		)	(1,382		)
Electronic Systems Division	(8,503		)	—			(5,520		)	—			(2,776		)	—
Applied Technology Division	—			(460		)	—			(226		)	—			(31		)
Operating income	(220		)	(188		)	(94		)	(41		)	60			8
Assets	(405		)	(286		)	(186		)	(98		)	(92		)	(57		)
REPORTABLE SEGMENTS TOTAL
Sales	$	381,511		$	381,511		$	314,708		$	314,708		$	237,782		$	237,782
Operating income ^(b)	89,371			89,371			69,987			69,987			50,627			50,627
Assets	210,775			210,775			140,527			140,527			118,614			118,614
Capital expenditures	27,013			27,013			13,018			13,018			3,023			3,023
Depreciation and amortization	8,568			8,568			7,270			7,270			6,721			6,721
CORPORATE & OTHER ^(a)
Operating (loss) from administrative expenses	$	(13,730	)	$	(13,730	)	$	(9,784	)	$	(9,784	)	$	(7,407	)	$	(7,407	)
Assets	34,928			34,928			47,233			47,233			51,695			51,695
Capital expenditures	2,002			2,002			954			954			279			279
Depreciation and amortization	700			700			361			361			387			387
TOTAL COMPANY
Sales	$	381,511		$	381,511		$	314,708		$	314,708		$	237,782		$	237,782
Operating income ^(b)	75,641			75,641			60,203			60,203			43,220			43,220
Assets	245,703			245,703			187,760			187,760			170,309			170,309
Capital expenditures	29,015			29,015			13,972			13,972			3,302			3,302
Depreciation and amortization	9,268			9,268			7,631			7,631			7,108			7,108

(a) Assets are principally cash, investments, deferred taxes, and other receivables.

(b) The year ended January 31, 2011 includes a $451 pre-tax gain on disposition of assets.

#12

(IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)

(12) NEW ACCOUNTING STANDARDS

Accounting Standards Adopted

During the six months ended July there were no accounting pronouncements adopted or accounting pronouncements effective that are of significance, or potential significance, to the Company.

Pending Accounting Standards

In July 2012 the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2012-02, "Testing Indefinite-Lived Intangible Assets for Impairment" (ASU No. 2012-2). ASU No. 2012-2 is intended to reduce the cost and complexity of testing indefinite-lived intangible assets other than goodwill for impairment. It allows Raven to perform a "qualitative" assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the goodwill impairment test. The revised guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The Company does not expect the adoption of this guidance to have a material impact on the Company's consolidated financial statements.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL ~~CONDITIONAND~~CONDITION AND RESULTS OF OPERATIONS

~~This~~The following commentary on the operating results, liquidity, capital resources and financial condition for Raven Industries, Inc. (the Company or Raven) should be read in conjunction with the ~~company's consolidated financial statements for~~unaudited Consolidated Financial Statements in Item 1 of Part 1 of this Quarterly Report on Form 10-Q and the ~~three~~ ~~months ended~~ ~~April 30, 2012~~ ~~and~~ ~~April 30, 2011~~, as well as the company's consolidated financial statements and related notes thereto and management's discussion and analysis of financial condition and results of operations in the company's Form 10-KCompany's Annual Report on Form10-K for the year ended January 31, 2012. There have been no material changes to the Company's critical accounting policies discussed therein, however, the Company did evaluate and update its revenue recognition policy to include revenue recognition using the percentage-of completion method of accounting for certain long-term, service-related contracts entered into by one of the Company's subsidiaries.

EXECUTIVE SUMMARY

Raven ~~Industries, Inc.~~ is ~~an industrial manufacturer~~a diversified technology company providing a variety of products to customers within the industrial, agricultural, energy, construction and military/aerospace ~~markets, primarily in North America.~~markets. The ~~company~~Company is comprised of unique operating units, classified into ~~four~~three reportable segments: Applied Technology Division, Engineered Films Division and Aerostar ~~and Electronic Systems.~~Division. While each segment has distinct characteristics, the products and technologies are largely extensions of durable competitive advantages rooted in the original research balloon business.

Effective June 1, 2012, the Company realigned the assets and team members of its Electronic Systems Division and deployed them into the Company's Aerostar and Applied Technology Divisions. The realigned divisions will better align the Company's corporate structure with its mission and long-term growth strategies. Electronic Systems net sales of electronic manufacturing assemblies were realigned to Aerostar and the remaining proprietary products, after adjustments to intersegment eliminations, to Applied Technology. The Company retrospectively adjusted its segment information for all periods presented to reflect this change in segment reporting. This unaudited, adjusted segment information was derived from audited financial statements as of and for the years ended January 31, 2012, 2011, and 2010 as well as the unaudited financial statements for the six months ended July 31, 2011.

Management uses a number of metrics to assess the ~~company's~~Company's performance:

Consolidated net sales, gross margins, operating income, operating margins, net income and earnings per share

Cash flow from operations and shareholder returns

Return on sales, assets and equity

Segment net sales, gross profit, gross margins, operating income and operating margins

Vision and Strategy

~~The company's vision is to advance its leadership positions in niche markets through~~Raven envisions serving the ~~development of innovative solutions to address~~world with technology that helps grow more food, produce more energy, protect the ~~needs of customers~~environment and help ~~solve~~people live safely. These are great challenges inof today and of our near future which the ~~areas of hunger, safety, security and energy independence.~~

Company will help to solve.

The ~~company's~~Company's primary strategy to achieve this vision is the maintenance of a diversified portfolio of businesses that share a common purpose but serve different markets providing balance, opportunity and risk mitigation. Diversification has enabled the ~~company~~Company to consistently generate cash, achieve profitability and maintain financial strength by limiting the impact of market disruptions and facilitating growth in both strong and weak economic cycles. Additionally, the ~~company~~Company continues to achieve increased geographic, product and market diversification.

#13

The ~~company's~~Company's overall approach to creating value, which is employed across the ~~four~~three unique business segments, is summarized as follows:

~~Seek to expand~~Expand in ~~niche markets~~market segments that have strong prospects for growth and above-average profit margins.

~~Elevate customer~~Compete on quality, service, ~~by leveraging~~ innovation ~~speed~~ and ~~dedicated engineering support to solve the customer's problem.~~peak performance.

Reinvest cash generated from operations to fuel growth. Capital is allocated aggressively when the prospects are high for above-average risk-adjusted returns on capital. If the ~~company~~Company accumulates cash in excess of investment opportunities for above-average risk-adjusted returns, it will be returned to shareholders.

Make corporate responsibility a top priority.

Continue to increase the quarterly dividend ~~annually.~~on an annual basis.

#11

Results of Operations

Consolidated financial highlights for the second quarter and first ~~quarter~~six months of fiscal 2013 and fiscal 2012 include the following:


	Three Months Ended								Three Months Ended								Six Months Ended
(dollars in thousands, except per-share data)	April 30, 2012			April 30, 2011			% Change		July 31, 2012			July 31, 2011			% Change		July 31, 2012			July 31, 2011			% Change
Net sales	$	117,915		$	101,541		16	%	$	101,674		$	90,344		13	%	$	219,589		$	191,855		14	%
Gross profit	41,135			32,936			25	%	30,064			28,130			7	%	71,199			61,066			17	%
Gross margins^(a)	34.9		%	32.4		%			29.6		%	31.1		%			32.4		%	31.8		%
Operating income	$	28,432		$	23,533		21	%	$	17,407		$	18,674		(7	)%	$	45,839		$	42,207		9	%
Operating margins	24.1		%	23.2		%			17.1		%	20.7		%			20.9		%	22.0		%
Net income attributable to Raven Industries, Inc.	$	19,043		$	15,716		21	%	$	11,546		$	12,461		(7	)%	$	30,589		$	28,177		9	%
Diluted earnings per share	$	1.04		$	0.86				$	0.32		$	0.34				$	0.84		$	0.77

Operating cash flow	$	28,212		$	11,008												$	44,462		$	26,263
Cash dividends	$	3,806		$	3,254												$	7,618		$	6,509



^(a)	The ~~company's~~Company's gross and operating margins may not be comparable to industry peers due to the diversity of its operations and variability in the classification of expenses across industries in which the ~~company~~Company operates.

Net sales ~~and earnings trends the company experienced in the 2012 fiscal year~~ continued into build off the 2013 fiscal first quarter results, with net sales for the three months ended July 31, 2012 up ~~16%~~13% to ~~$117.9~~$101.7 million, from ~~$101.5~~$90.3 million in the prior-year comparative period. ~~First-quarter~~Double-digit revenue growth was reported in all divisions led by strength in Engineered Films and Applied Technology along with addition of Vista Research Inc. (Vista) revenues in Aerostar. Second quarter net income attributable to Raven ~~Industries, Inc. rose 21%~~declined 7% to ~~$19.0~~$11.5 million, or ~~$1.04~~$0.32 per diluted share, versus fiscal 2012 ~~first-quarter~~second-quarter net income of ~~$15.7~~$12.5 million, or ~~$0.86~~$0.34 per diluted share.Change in product mix and additional operating expenses due to investment in corporate services, sales and marketing and research and development were the main drivers for the decrease.

~~Growth~~For the six-month period, net sales increased 14% to $219.6 million, from $191.9 million one year earlier. First half net income of $30.6 million, or $0.84 per diluted share, was ~~driven by the~~up 9% from $28.2 million, or $0.77 per diluted share, in fiscal 2012. Engineered Films and Applied Technology Divisions ~~where~~reported double-digit net sales ~~gains were accompanied by even stronger increases in~~and operating ~~income.~~gains. Aerostar Division operating margins were negatively impacted by lack of tethered aerostat ~~and radar~~ sales. ~~Electronic Systems product mix had a favorable impact on the first quarter operating margins.~~

Applied Technology

~~Fiscal~~Net sales of $40.1 million in the second quarter of fiscal 2013 ~~first quarter~~were up $4.6 million (13%) year-over-year and operating income decreased $0.3 million, or 2%, to $12.9 million. For the six-month periods, net sales of ~~$50.5~~$93.8 million grew ~~$11.3~~$16.4 million ~~or 29%,~~(21%) and operating income of ~~$20.9~~$35.0 million increased ~~$5.9~~$5.6 million, or ~~39%, reflecting~~19%. The favorable year-over year revenue comparisons reflect strong sales ingrowth across majority of the division's product offerings, including field computers, application controls, ~~information management~~ and in particular, guided steering systems that enhance farm yields and reduce operating ~~costs.~~cost. International sales continue to be strong ~~for~~during the ~~first~~ three and six months ended July 31, 2012. Operating income was down during second quarter fiscal 2013 compared to prior year second quarter due to higher sales of ~~fiscal 2013.~~lower-margin products and higher investment in research, marketing and product development.

Engineered Films

~~Fiscal 2013 first~~For the second quarter, net sales of ~~$41.1~~$36.8 million grew $4.3 million (13%) as compared with the second quarter of last year. Second

#14

quarter operating income of $6.8 million increased ~~$11.0~~29% year-over-year. Fiscal 2013 first half net sales increased $15.3 million ~~or 37%,~~(25%) to $77.9 million and operating income of ~~$9.2~~$16.0 million ~~increased 122%~~was up significantly, increasing 70% from the prior year ~~first quarter. Continued strength~~period. For both periods, continued growth in the energy and agriculture markets and deliveries of geomembrane films for environmental protection drove ~~first quarter~~ net sales ~~growth.~~upward. Higher year-over-year profitability for both the quarter and six month periods related to margin expansion due to improved operating efficiencies and ~~lower material and overhead cost relative to sales.~~more aggressive pricing strategies.

Aerostar

~~Net~~Fiscal 2012 second quarter net sales ~~in the first quarter~~ were ~~down 29% to $10.8~~$26.8 million ~~from $15.1~~versus $23.2 million in the previous year's ~~first quarter. Aerostar reported an operating loss~~second quarter, a $3.6 million increase (15%). Operating income decreased by $1.1 million, or 32%, to $2.3 million from the previous year second quarter results. Fiscal 2013 year-to-date net sales of ~~$1.2~~$52.5 million ~~versus~~were down $1.5 million (3%) from $54.0 million and operating income of ~~$4.1~~$3.8 million ~~a year earlier. A difficult federal spending environment impacted aerostat orders during the three month period. Increased sales volume of~~was lower by $6.0 million, or 62%, from fiscal 2012 year-to-date comparative results. Higher T-11 Army parachutes and protective wear ~~could not~~and Vista sales offset the ~~negative impact~~difficult spending environment impacting aerostat orders for the six-month period. This change in product mix was the main driver of ~~no tethered aerostat shipments.~~the operating income fluctuation for both periods.

~~Electronic Systems~~

Fiscal 2013 first quarter net sales of $19.1 million were down slightly by $0.3 million, or 2%. Operating income of $3.7 million increased from $3.4 million, or 8%. Higher intercompany shipments to Applied Technology drove the gross margin increase.

#12

RESULTS OF OPERATIONS - SEGMENT ANALYSIS

Applied Technology

Applied Technology designs, manufactures, sells and services innovative precision agriculture products and information management tools that help growers reduce costs and improve farm yields around the world.


	Three Months Ended										Three Months Ended											Six Months Ended
(dollars in thousands)	April 30, 2012			April 30, 2011			$ Change		% Change		July 31, 2012			July 31, 2011			$ Change			% Change		July 31, 2012			July 31, 2011			$ Change		% Change
Net sales	$	50,480		$	39,125		$	11,355	29	%	$	40,071		$	35,433		$	4,638		13	%	$	93,812		$	77,453		$	16,359	21	%
Gross profit	26,042			18,931			7,111		38	%	17,926			17,213			713			4	%	45,249			37,321			7,928		21	%
Gross margins	51.6		%	48.4		%					44.7		%	48.6		%						48.2		%	48.2		%
Operating income	20,910			15,074			5,836		39	%	12,909			13,236			(327		)	(2	)%	34,959			29,403			5,556		19	%
Operating margins	41.4		%	38.5		%					32.2		%	37.4		%						37.3		%	38.0		%

The following factors were the primary drivers of the three and six-month year-over-year ~~quarterly growth~~changes in net sales and operating income:

Market conditions. Global market fundamentals were healthy as population and income growth in emerging economies have increased demand for food. Domestically, the market conditions are still strong, tempered by the ongoing drought conditions. These factors have resulted in higher crop prices and wider acceptance of precision agriculture as a sound investment for maximizing yields and controlling input costs.

Sales volume. The favorable ~~year-over-year~~net sales comparisons for the second quarter and year-to-date results reflect strong sales growth across the majority of the division's product offerings, including application controls, field computers, guidance and steering products and boom controls. The Company continues to cultivate and deepen relationships with key original equipment manufacturing (OEM) partners, which expands market share and extends Raven's technology to a broader range of customers.

International sales. ~~Year-to-date~~For the three-month period, international sales totaled ~~$13.8~~$11.9 million, increasing ~~26%~~23% from a year ~~ago.~~ago and represents 30% of segment revenue compared to 27% in the prior year three-month period. International sales of $25.8 million in the first six months of fiscal 2013 rose $5.0 million year-over-year and accounted for 27% of segment revenue for both six month periods. Products delivered to Canada, South America, Eastern Europe and South Africa ~~and Canada,~~ generated the majority of the international sales growth. ~~International sales accounted for 27% of total Applied Technology net sales in the first quarter compared to 28% at this time last year.~~

Gross margins. Gross margins of 44.7% declined for the ~~fiscal 2013 first quarter of 51.6% improved~~three months ended July 31, 2012 from ~~48.4% in fiscal 2012 first quarter~~48.6% for the three months ended July 31, 2011 due ~~primarily~~ to higher sales ~~and operating leverage on profitability. Historically,~~volume of lower-margin products. Year-over-year comparative gross margins for the ~~first quarter is~~six-month periods remained consistent at 48.2%. Higher sales volume drove the ~~seasonal high point~~increase in ~~the division.~~gross profit. Gross margins were also positively impacted infor the ~~first quarter~~six-month periods of fiscal 2013 ~~by one percentage point~~ due to the early buyout of the Ranchview acquisition related contingent ~~liability.~~liability (See Note 5 in Item 1, Part 1 of this Quarterly Report on Form 10-Q).

Operating expenses. ~~First~~Second quarter operating expenses ~~of 10.2%~~as a percentage of net sales ~~increased slightly~~was 12.5%, up from 11.2% in the prior ~~first quarter of 9.9%~~year's second quarter. Year-to-date operating expenses as a percentage of net sales was 11.0% compared to 10.2% for fiscal 2012. The increase in both periods was due to the division's ~~continued~~ investment in research and development (R&D) expenses. For the second quarter fiscal 2013, R&D cost as a percentage of net sales was 6.1% compared to 4.9% in the prior three-month period. R&D cost as compared to net sales in the first six months of fiscal 2013 was ~~4.4%~~5.0% compared to ~~3.8%~~4.2% in the first six months of the prior year.

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Engineered Films

Engineered Films produces rugged reinforced plastic sheeting for industrial, energy, construction, geomembrane and agricultural applications.


	Three Months Ended										Three Months Ended										Six Months Ended
(dollars in thousands)	April 30, 2012			April 30, 2011			$ Change		% Change		July 31, 2012			July 31, 2011			$ Change		% Change		July 31, 2012			July 31, 2011			$ Change		% Change
Net sales	$	41,094		$	30,091		$	11,003	37	%	$	36,785		$	32,459		$	4,326	13	%	$	77,879		$	62,550		$	15,329	25	%
Gross profit	10,528			5,239			5,289		101	%	8,242			6,211			2,031		33	%	18,771			11,451			7,320		64	%
Gross margins	25.6		%	17.4		%					22.4		%	19.1		%					24.1		%	18.3		%
Operating income	9,179			4,129			5,050		122	%	6,819			5,284			1,535		29	%	15,998			9,413			6,585		70	%
Operating margins	22.3		%	13.7		%					18.5		%	16.3		%					20.5		%	15.0		%

The following factors were the primary drivers of the ~~three month~~quarter and first half year-over-year ~~changes:~~growth:

Market conditions. Economic growth in emerging markets continued to support higher oil ~~and natural gas~~ prices, and in turn, increased related drilling activity and demand for pit liners in the energy market. The geomembrane market reported higher sales for the quarter and six-month periods as environmental and water conservation projects have increased demand for the division's containment liners.

Sales volume and selling prices. Sales growth for the second quarter and first ~~quarter~~half of fiscal 2013 was predominately driven by ~~the~~ increased demand for pit liners utilized in oil and gas exploration activity. Environmental and water conservation projects increased the demand for geomembrane containment liners and covers during the quarter. Selling prices were up roughly 11%

#13

~~reflecting higher input cost over the comparable first quarter in the prior year.~~demand. Sales volume, as measured by pounds shipped, was up ~~20%~~11% for ~~first~~second quarter inand 15% for the fiscal 2013 assix-month period due to stronger demand combined with additional extrusion capacity, which went into production in the fourth quarter of last fiscal year. Selling prices for the three and six months ended July 31, 2012 were up approximately 2-3% and 8-9%, respectively, compared to the prior-year periods.

Gross margin increase. For the ~~three-month period,~~three and six-month periods, margins improved ~~8.2%~~3.3 and 5.8 percentage points, respectively, from the prior comparative periods due to improved operating efficiencies, positive operating leverage and a more favorable price versus material spread. Material cost as a percentage of sales was ~~60%~~61% for the ~~three~~six months ended ~~April~~July 2012 compared with 66% for the same prior year period.

Operating expenses. ~~First~~Second quarter operating expenses ~~were 3.3%~~as a percentage of net sales was 3.9% compared to 2.9% in ~~fiscal 2013 versus 3.7% in fiscal 2012. Selling expense increases of $0.2 million (28%) and relatively flat~~the prior three month period. R&D expense ~~lagged~~increased $0.3 million and higher marketing and business development cost outpaced the ~~37%~~13% increase in net sales. Year-to-date operating expenses of $2.8 million were up $0.8 million, or 36%, over the prior year due to higher spending. As with the quarter, year-to-date operating expenses as a percentage of net sales was up to 3.6% compared to 3.3% in the prior six months.

Aerostar

Aerostar designs and sells tethered aerostats and radar systems for situational awareness. This division produces military parachutes, uniforms and protective wear, and other sewn and sealed ~~products.~~products as well as being a total-solutions provider of electronics manufacturing services, primarily to North American customers.


	Three Months Ended											Three Months Ended											Six Months Ended
(dollars in thousands)	April 30, 2012			April 30, 2011			$ Change			% Change		July 31, 2012			July 31, 2011			$ Change			% Change		July 31, 2012			July 31, 2011			$ Change			% Change
Net sales	$	10,801		$	15,139		$	(4,338	)	(29	)%	$	26,845		$	23,245		$	3,600		15	%	$	52,480		$	53,953		$	(1,473	)	(3	)%
Gross profit	370			5,000			(4,630		)	(93	)%	3,879			4,698			(819		)	(17	)%	7,241			12,294			(5,053		)	(41	)%
Gross margins	3.4		%	33.0		%						14.4		%	20.2		%						13.8		%	22.8		%
Operating income (loss)	(1,161		)	4,062			(5,223		)	(129	)%
Operating income												2,309			3,373			(1,064		)	(32	)%	3,751			9,774			(6,023		)	(62	)%
Operating margins	(10.7		)%	26.8		%						8.6		%	14.5		%						7.1		%	18.1		%

The following factors were the primary drivers of the year-over-year changes in net sales and operating ~~income:~~income for the three and six-month periods:

Sales ~~volumes and Volatility in aerostat deliveries.~~volumes. Net sales for the ~~first~~second quarter ~~decreased $4.3~~of $26.8 million, increased $3.6 million, or ~~29%~~15%, compared to $23.2 million in the prior year ~~primarily due to~~second quarter. Higher parachute and protective wear sales, additional research balloon sales, additional electronic manufacturing services sales and Vista net sales of $3.3 million were partially offset by a ~~$7.3 million~~ decrease

#16

of tethered aerostat ~~deliveries.~~deliveries ($3.3 million). For the six-month periods, net sales of $52.5 million were down from $54.0 million, or 3%, due to the decrease of aerostat deliveries ($10.5 million) partially offset by higher parachute and protective wear shipments and Vista net sales of $5.9 million. Aerostat sales can vary significantly from quarter-to-quarter as reflected in the ~~three-month~~three and six-months year-over-year comparison. The decrease in aerostat deliveries was partially offset by an increase in T-11 parachute and spare part shipments and additional protective wear sales ($1.1 million) and Vista net sales of $2.6 million.

comparisons.

Gross margin ~~changes.~~decline. ~~First quarter~~The change in product mix negatively impacted gross margins in both periods. Gross margins declined ~~from 33.0% one year ago to 3.4%.~~5.8 and 11.0 percentage points for the three and six-month periods. Last year's margins were favorably impacted by ~~higher margin~~higher-margin aerostat sales. Aerostat sales accounted for ~~approximately 48%~~roughly 16% and 20% of net sales in the ~~first quarter fiscal 2012~~prior year periods compared to ~~none~~approximately 1% in the ~~first quarter fiscal 2013. Parachute and protective wear gross margins percentage was consistent with the prior first quarter, however, Vista operating losses during first quarter~~comparable fiscal 2013 ~~negatively impacted gross margins.~~quarterly and year-to-date periods.

Operating expenses. ~~First~~Second quarter operating expenses of ~~$1.5~~$1.6 million, ~~increased to 14.2%~~or 5.8% of net sales, increased slightly from ~~6.2%~~5.7% of net sales in the ~~first~~second quarter of fiscal 2012. First half operating expenses of $3.5 million, or 6.7% of net sales, were up from 4.7% one year earlier. Current year operating expenses primarily reflect increased investment in research and development to support next generation aerostat and Vista radar technology. ~~Higher selling and business development expenses were directed towards expansion of the tethered aerostat and radar business.~~

~~Electronic Systems~~

~~Electronic Systems is a total-solutions provider of electronics manufacturing services, primarily to North American original equipment manufacturers.~~

Three Months Ended
(dollars in thousands) April 30,
2012 April 30,
2011 $ Change % Change
Net sales $ 19,120
$ 19,477
$ (357 ) (2 )%
Gross profit 4,226
3,754
472
13 %
Gross margins 22.1 % 19.3 %
Operating income 3,695
3,412
283
8 %
Operating margins 19.3 % 17.5 %

#14

~~The following factors were the primary drivers of the first quarter changes in net sales and operating income:~~

~~Sales volume.~~ First quarter net sales decreased 2% year-over-year, reflecting lower avionics volume. This was partially offset by additional sourcing of assemblies to the Applied Technology Division and increased sales of hand-held bed controls.

~~Gross margins.~~ ~~For the quarter, gross margins improved from 19.3% to 22.1% due to favorable product mix. This resulted from increased additional sourcing for Applied Technology.~~

~~Operating expenses.~~ ~~The increase in operating expense from first quarter fiscal 2013 to fiscal 2012 is due to higher selling expenses.~~

Corporate Expenses (administrative expenses; other ~~income~~ (expense), net; and income taxes)


	Three Months Ended						Three Months Ended						Six Months Ended
(dollars in thousands)	April 30, 2012			April 30, 2011			July 31, 2012			July 31, 2011			July 31, 2012			July 31, 2011
Administrative expenses	$	4,160		$	3,156		$	4,647		$	3,227		$	8,807		$	6,383
Administrative expenses as a % of sales	3.5		%	3.1		%	4.6		%	3.6		%	4.0		%	3.3		%
Other income (expense), net	$	(52	)	$	(13	)
Other (expense), net							$	(96	)	$	(76	)	$	(148	)	$	(89	)
Effective tax rate	33.0		%	33.2		%	33.2		%	33.0		%	33.0		%	33.1		%

Administrative expenses increased during the ~~first~~ three and six months from the prior year by ~~32%~~44.0% and 38.0%, respectively, due to continued investments in additional finance, human resources and information technology personnel to support current and future growth strategies through a strengthened corporate infrastructure.

“Other ~~income~~ (expense), ~~net”~~net consists mainly of activity related to the company's equity investment, ~~in SST,~~ interest income and foreign currency transaction ~~gain. The year-over-year variability for the year-to-date expense is primarily attributable to SST results.~~gain or losses.

OUTLOOK

Management anticipates continued positive trends in Engineered Films and Applied Technology while order variability will likely persist in Aerostar going forward. ~~For~~To mitigate that variability, the ~~company overall, management believes~~Company is looking to new customer initiatives that will expand the use of persistent surveillance technologies to border and other non-military applications. Given the Company's year-to-date performance and challenging near-term outlook, reaching the Company's long-term earnings growth rate target of 10-15% will be difficult in the current year, but not impossible. Management continues to believe that it can ~~meet its long-term~~reach this target ~~of 10-15% earnings growth.~~longer-term.

Applied Technology

Applied Technology expects to continue to build on its investments in international growth and integration of hardware and software solutions to improve agricultural efficiency. Raven's advanced guided steering systems enhance farm yields and reduce operating costs. Worldwide agriculture conditions are expected to remain healthy for this segment, with rising global demand for food, heightened environmental concerns and broadening recognition of Raven's suite of productivity tools as a cost-effective investment. The domestic agriculture market remains strong, tempered by the ongoing drought conditions. Although the drought has softened the market, the value proposition for the division's products can be more apparent in difficult conditions. These factors indicate that sales growth ~~could continue to be in excess of~~approaching 20% ~~in fiscal 2013.~~is still achievable for the full year. Profitability growth could be tempered by investments in new initiatives, both from a product development and geographic expansion perspective.

Engineered Films

Management ~~looks~~continues to look for sales growth for fiscal 2013 to be in the ~~high teens,~~mid-teens, driven by increased capacity and capabilities but with a smaller boost from selling prices as the year progresses. Overall demand has seen solid, sustainable growth in the agricultural market and ~~assuming steady resin prices. Demand continues~~geomembrane films which are expected to ~~have~~be a ~~positive outlook. Oil~~rising part of this division's market mix due to the critical need to protect water and ~~gas drilling activities drives demand for pit liners. New~~other environmental resources. Plant utilization rates continue to rise as new extrusion equipment put into service is ramping up ~~according to plan. This period for new equipment has typically taken 2-3 years, depending on market conditions. Management expects~~as planned. Through improved operating ~~income growth to continue to exceed anticipated sales growth due to improved scrap levels,~~efficiencies and a more aggressive pricing strategy, the ~~spread of selling prices over the cost of plastic resins~~division is achieving enhanced margins and ~~higher utilization of the new extrusion equipment, partially offset by higher depreciation and investment spending for research and product development.~~profitability.

Aerostar

~~While~~Even with the ~~addition of~~new Vista ~~surveillance technologies is expected to bring new innovations~~US government contract for ~~detecting and tracking small objects over the land, on the water and in the air, government funding for projects related to surveillance continues to be erratic. Sales~~$6 million, sales growth in fiscal 2013 does not appear likely.

Although Aerostar has breakout potential, it is also subject to significant variability due to federal spending. New opportunities in tethered

#17

aerostats to provide ~~cost effective~~cost-effective persistent surveillance for the military and border security are critical to Aerostar's success. Despite strong showings by Aerostar's protective wear, military parachute and high-altitude research balloon

#15

operations, Aerostar ~~may not be profitable until the third quarter of the year.~~will likely continue to show lower profits without additional aerostat or smart-sensing radar system orders. Management is pursuing opportunities to add new markets to add stability and mitigate volatility for its aerostat business as well as continuing to manage the short-term responsibly, carefully monitoring discretionary spending, staffing levels and ~~is closely monitoring spending levels compared to anticipated sales levels, while continuing~~R&D. At the same time, management continues to invest in the integration of ~~Vista Research~~Electronic Systems and ~~Electronic Systems~~Vista into Aerostar operations.

~~Electronic Systems~~

Effective June 1, 2012, Electronic Systems will be merged into Raven's Applied Technology and Aerostar Divisions. Approximately 75 percent of Electronic Systems sales will go to Aerostar. Management recognizes that the integration of these businesses will be challenging, both from a sales and an operational perspective. After the realignment, Raven Industries will continue with the company's core growth divisions: Applied Technology, Engineered Films and Aerostar. Electronic Systems fiscal 2013 sales, before the split into the separate divisions, are expected to be as much as 10 percent lower than in fiscal 2012 as the impact of lower avionics sales may not be fully offset by higher deliveries to other customers. There is also a risk that operating income could be impacted by integration costs in fiscal 2013.

LIQUIDITY AND CAPITAL RESOURCES

The ~~company's~~Company's balance sheet continues to reflect significant liquidity and a strong capital base. Management focuses on the current cash balance and operating cash flows in considering liquidity, as operating cash flows have historically been Raven's primary source of liquidity. Management expects that current cash, combined with the generation of positive operating cash flows, will be sufficient to fund the ~~company's~~Company's normal operating, investing and financing activities. Sufficient borrowing capacity also exists if necessary for a large acquisition or major business expansion.

Raven's cash needs are seasonal, with working capital demands strongest in the first quarter. As a result, the discussion of trends in operating cash flows focuses on the primary drivers of year-over-year variability in working capital.

Cash and cash equivalents ~~and short-term investments~~ totaled ~~$43.5~~$44.1 million at ~~April 30,~~July 31, 2012, ~~a $17.7~~an $18.3 million increase compared to $25.8 million at January 31, 2012. The comparable balance one year earlier ~~totaled $42.6~~was $47.0 million. Increases in capital expenditures and a $12.0 million payment to acquire Vista ~~Research, Inc.,~~ in the fourth quarter last year were offset by cash flows from operations.

Raven has an uncollateralized credit agreement that provides a $10.5 million line of credit, with ano outstanding balance ~~of zero~~ at ~~April 30,~~ ~~2012~~.July 31, 2012. The line of credit is reduced by outstanding letters of credit totaling $~~1.3~~$1.0 million as of ~~April 30,~~ ~~2012~~.July 31, 2012. The credit line, which matures on ~~September 1,~~November 30, 2012, is expected to be renewed during fiscal 2013.

Operating Activities

Operating cash flows result primarily from cash received from customers, which is offset by cash payments for inventories, services, employee compensation and income taxes. Management evaluates working capital levels through the computation of average days sales outstanding and inventory turnover. Average days sales outstanding is a measure of the ~~company's~~Company's efficiency in enforcing its credit policy. The inventory turnover ratio is a metric used to evaluate the effectiveness of inventory management, with further consideration given to balancing the disadvantages of excess inventory with the risk of delayed customer deliveries.

Cash provided by operating activities was $~~28.2~~44.5 million in the first ~~quarter~~half of fiscal 2013 compared with $~~11.0~~26.3 million in the first ~~quarter~~half of fiscal 2012. The increase in operating cash flows is the result of higher ~~company~~Company earnings, ~~depreciation expense, and~~ collection of accounts receivable ~~balances.~~balances and lower inventory growth.

Inventory and accounts receivable generated ~~$2.2~~$15.2 million of cash in the first ~~quarter~~half of fiscal 2013 versus ~~consumed $12.3~~consuming $9.7 million ~~of cash in the first quarter of fiscal 2012.~~one year ago. The ~~company's~~Company's inventory turnover rate declined from the prior year due to higher raw material inventory levels to support increased sales (trailing 12-month inventory turn of ~~5.2X~~5.3X in fiscal 2013 versus 5.7X in fiscal 2012). Cash collections continue to be efficient, with the trailing 12 month days sales outstanding of 4748 days at ~~April 30,~~July 31, 2012 and ~~49 days at April 30,~~July 31, 2011.

Investing Activities

Cash used in investing activities totaled ~~$6.8~~$16.8 million in the first ~~quarter~~half of fiscal 2013 versus $~~3.4~~10.5 million in the first ~~quarter~~half of fiscal 2012, reflecting a ~~$1.3~~$5.9 million increase in capital expenditures. Year-to-date capital spending consisted primarily of expenditures in Engineered Films manufacturing, Applied Technology research and ~~$1.9 million payment~~training centers and renovations to ~~settle an acquisition related contingent liability.~~the Company's headquarters.

Management anticipates ~~record~~fiscal 2013 capital spending ~~in fiscal 2013,~~ in the $35 million range. In addition, management will evaluate strategic acquisitions that result in expanded capabilities and solidify competitive advantages. As part of the ~~company's~~Company's investment in corporate infrastructure, Raven ~~will be~~is investing approximately $15-$20 million over a 3-5 year period to renovate its downtown Sioux Falls ~~facility~~corporate headquarters. ~~Expansion of Engineered Films capacity and Applied Technology's manufacturing and research and development facility are expected to continue.~~

#16

Financing Activities

Cash used in financing activities was $9.3 million for the six months ended July 31, 2012 versus $6.4 million in the prior year's first half. Dividends of ~~$3.8~~$7.6 million, or 2110.5 cents per share, were paid during the current ~~quarter~~year compared to ~~$3.3~~$6.5 million, or 189 cents per share, in the ~~year ago quarter. The 21 cents per share dividend represents~~prior year. During the ~~company's 26~~six months ended in fiscal 2013, the Company made a $1.9 million payment to

#^th18 ~~consecutive increase in the annual dividend (excluding special dividends). Raven has now paid a dividend in 39 consecutive years.~~

settle an acquisition-related contingent liability.

OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

There have been no material changes since the fiscal year ended January 31, 2012.

~~NEW~~ ACCOUNTING PRONOUNCEMENTS

~~There~~

Accounting Standards Adopted

During the six months ended July there were no ~~new~~ accounting ~~standards~~pronouncements adopted or accounting pronouncements effective that are of significance, or potential significance, to the Company.

Pending Accounting Standards

In July 2012 the Financial Accounting Standards Board (FASB) issued orAccounting Standards Update No. 2012-02, "Testing Indefinite-Lived Intangible Assets for Impairment" (ASU No. 2012-2). ASU No. 2012-2 is intended to reduce the cost and complexity of testing indefinite-lived intangible assets other than goodwill for impairment. It allows Raven to perform a "qualitative" assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the goodwill impairment test. The revised guidance is effective ~~during~~for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The Company does not expect the ~~three months ended April 30, 2012 that had or are expected~~adoption of this guidance to have a material impact on the ~~company's~~Company's consolidated financial statements.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this quarterly report on Form 10-Q are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the expectations, beliefs, intentions or strategies regarding the future. Without limiting the foregoing, the words “anticipates,” “believes,” “expects,” “intends,” “may,” “plans” and similar expressions are intended to identify forward-looking statements. The Company intends that all forward-looking statements be subject to the safe harbor provisions of the Private Securities Litigation Reform Act. Although management believes that the expectations reflected in forward-looking statements are based on reasonable assumptions, there is no assurance that these assumptions are correct or that these expectations will be achieved. Assumptions involve important risks and uncertainties that could significantly affect results in the future. These risks and uncertainties include, but are not limited to, those relating to weather conditions and commodity prices, which could affect sales and profitability in some of ~~operations, financial condition,~~the Company’s primary markets, such as agriculture, construction, and oil and gas well drilling; or ~~cash flows.~~changes in competition, raw material availability, technology or relationships with the Company’s largest customers—any of which could adversely affect any of the Company’s product lines—as well as other risks described in the Company’s 10-K under Item 1A. This list is not exhaustive, and the Company does not have an obligation to revise any forward-looking statements to reflect events or circumstances after the date these statements are made.



ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The exposure to market risks pertains mainly to changes in interest rates on cash and cash equivalents and short-term investments. The ~~company~~Company has no debt outstanding as of ~~April 30,~~July 31, 2012. The ~~company~~Company does not expect operating results or cash flows to be significantly affected by changes in interest rates. Additionally, the ~~company~~Company does not enter into derivatives or other financial instruments for trading or speculative purposes. However, the ~~company~~Company does utilize derivative financial instruments to manage the economic impact of fluctuation in foreign currency exchange rates on those transactions that are denominated in currency other than its functional currency, which is the U.S. dollar. The use of these financial instruments had no material effect on the ~~company's~~Company's financial condition, results of operations or cash flows.

The ~~company's~~Company's subsidiaries that operate outside the United States use their local currency as the functional currency. The functional currency is translated into U.S. dollars for balance sheet accounts using the period-end exchange rates, and average exchange rates for the statement of income. Adjustments resulting from financial statement translations are included as cumulative translation adjustments in accumulated other comprehensive income (loss) within shareholders' equity. Foreign currency transaction gains or losses are recognized in the period incurred and are included in "Other ~~income~~ (expense), net" in the Consolidated Statements of Income and Comprehensive Income. Foreign currency fluctuations had no material effect on the ~~company's~~Company's financial condition, results of operations or cash flows.

#19



ITEM 4.	CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains a system of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits to the Securities and Exchange Commission under the Securities and Exchange Act of 1934, as amended (the Exchange Act), including this report, is recorded, processed and summarized and reported on a timely basis to ensure that information required to be disclosed under the Exchange Act is accumulated and communicated to the Company's management on a timely basis to allow decisions regarding required disclosures.

As of ~~April 30,~~July 31, 2012, the end of the period covered by this report, management, including the Chief Executive Officer ~~(“CEO”)~~(CEO) and the Chief Financial Officer ~~(“CFO”)~~(CFO) evaluated the effectiveness of disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) as of such date. Based on that evaluation, the CEO and CFO have concluded that the ~~company’s~~Company’s disclosure controls and procedures were effective as of ~~April 30,~~July 31, 2012.

Changes in Internal Control over Financial Reporting

There were no changes in the ~~company’s~~Company’s internal control over financial reporting that occurred during the quarter ended ~~April 30,~~July 31, 2012 that have materially affected, or are reasonably likely to materially affect, the ~~company’s~~Company’s internal control over financial reporting.

~~FORWARD-LOOKING STATEMENTS~~

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

#1720

RAVEN INDUSTRIES, INC.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings:

The ~~company~~Company is involved as a defendant in lawsuits, claims or disputes arising in the normal course of business. The settlement of such claims cannot be determined at this time. Management believes that any liability resulting from these claims will be substantially mitigated by insurance coverage. Accordingly, management does not believe the ultimate outcome of these matters will be significant to its results of operations, financial position or cash flows.

Item 1A. Risk Factors: ~~No material change.~~Information on the Company's risk factors is set forth in Item 1A "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended January 31, 2012.

Item 2. ~~Changes in Securities:~~Unregistered Sales of Equity Securities and Use of Proceeds: None

Item 3. Defaults ~~upon~~Upon Senior Securities: None

Item 4. Mine Safety Disclosures: None

Item 5. Other Information: None

Item 6. ~~Exhibits Filed:~~Exhibits:



Exhibit Number			Description

~~3(b)~~			~~Amended and Restated Bylaws (incorporated by reference to Exhibit B of the definitive proxy statement filed April 12, 2012).~~

~~10(k)~~			~~Amended and Restated Raven Industries, Inc. 2010 Stock Incentive Plan adopted May 25, 2012 (incorporated by reference to Exhibit A of the definitive proxy statement filed April 12, 2012).~~

~~10(r)~~			~~Raven Industries Inc. Non-Qualified Stock Option agreement~~

~~10(s)~~			~~Raven Industries, Inc. Restricted Stock Unit agreement~~

31.1			Certification of ~~CEO~~Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley ~~Act.~~Act of 2002.

31.2			Certification of ~~CFO~~Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley ~~Act.~~Act of 2002.

32.1			Certification of ~~CEO~~Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley ~~Act.~~Act of 2002.

32.2			Certification of ~~CFO~~Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley ~~Act.~~Act of 2002.

101.INS			XBRL Instance Document

101.SCH			XBRL Taxonomy Extension Schema

101.CAL			XBRL Taxonomy Extension Calculation Linkbase

101.DEF			XBRL Taxonomy Extension Definition Linkbase

101.LAB			XBRL Taxonomy Extenstion Label Linkbase

101.PRE			XBRL Taxonomy Extension Presentation Linkbase

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SIGNATURES

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



	RAVEN INDUSTRIES, INC.

	/s/ Thomas Iacarella
	Thomas Iacarella
	Vice President and CFO, Secretary and Treasurer (Principal Financial and Accounting Officer)

Date: ~~June 4,~~August 31, 2012

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