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 ~~October 31, 2008~~April 30, 2009


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		~~46-0246171~~
(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 Yeso 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

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

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

As of ~~November 25, 2008~~May 31, 2009 there were ~~18,008,206~~18,019,796 shares of common stock, $1 par value, of Raven Industries, Inc. outstanding. There were no other classes of stock outstanding.

PART I –— FINANCIAL INFORMATION
~~RAVEN INDUSTRIES, INC.~~

RAVEN INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS

(unaudited)


	October 31,			January 31,			October 31,			April 30,			January 31,			April 30,
(in thousands except share data)	2008			2008			2007			2009			2009			2008

ASSETS
Current Assets
Cash and cash equivalents	$	31,194		$	21,272		$	19,274		$	32,269		$	16,267		$	18,332
Short-term investments		—			1,500			4,000			—			—			3,300
Accounts receivable, net of allowances of $614, $293, and $360, respectively		44,307			36,538			35,119
Accounts receivable, net of allowances of $574, $613, and $342, respectively											36,290			40,278			50,015
Inventories:
Materials		28,192			27,923			24,268			24,652			26,657			29,250
In process		3,901			3,631			4,463			3,475			3,258			3,661
Finished goods		8,400			4,975			3,565			4,753			6,062			4,315

Total inventories		40,493			36,529			32,296			32,880			35,977			37,226
Deferred income taxes		2,510			2,075			1,982			2,616			2,542			2,274
Prepaid expenses and other current assets		2,967			2,955			2,002			3,377			3,009			3,616

Total current assets		121,471			100,869			94,673			107,432			98,073			114,763


Property, plant and equipment		84,848			80,313			79,639			86,966			86,324			80,807
Accumulated depreciation		(49,309	)		(44,570	)		(43,419	)		(51,579	)		(50,444	)		(46,194	)

Property, plant and equipment, net		35,539			35,743			36,220			35,387			35,880			34,613
Goodwill		7,328			6,902			6,840			7,612			7,450			7,057
Amortizable intangible assets, net		1,533			1,732			1,805			1,467			1,471			1,652
Other assets, net		2,044			2,615			2,665			1,528			1,541			2,440


TOTAL ASSETS	$	167,915		$	147,861		$	142,203		$	153,426		$	144,415		$	160,525


LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	11,365		$	8,374		$	8,174		$	8,718		$	9,433		$	11,691
Dividends payable		22,510			—			—
Accrued liabilities		14,178			12,804			10,437			10,999			13,281			11,047
Income taxes payable		797			—			1,035			4,772			—			5,647
Customer advances		576			930			1,116			524			608			340

Total current liabilities		49,426			22,108			20,762			25,013			23,322			28,725

Other liabilities		8,142			7,478			7,143			7,735			7,537			7,734

Total liabilities		57,568			29,586			27,905			32,748			30,859			36,459


Commitments and contingencies

Shareholders’ equity:
Common stock, $1 par value, authorized shares 100,000,000; issued shares 32,456,889, 32,408,096, and 32,393,257, respectively		32,457			32,408			32,393
Common stock, $1 par value, authorized shares 100,000,000; issued 32,460,934; 32,460,934; 32,413,717, respectively											32,461			32,461			32,414
Paid in capital		4,241			3,436			3,207			4,725			4,531			3,635
Retained earnings		128,735			132,219			128,193			137,967			131,080			140,747
Accumulated other comprehensive income (loss)		(1,724	)		(1,606	)		(1,623	)		(1,113	)		(1,154	)		(1,581	)

		163,709			166,457			162,170			174,040			166,918			175,215

Less treasury stock, at cost, 14,448,683, 14,287,583, and 14,277,583 shares, respectively		53,362			48,182			47,872
Less treasury stock, at cost, 14,448,683; 14,448,683; and 14,386,683 shares, respectively											53,362			53,362			51,149

Total shareholders’ equity		110,347			118,275			114,298			120,678			113,556			124,066


TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	167,915		$	147,861		$	142,203		$	153,426		$	144,415		$	160,525

RAVEN INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Nine Months Ended						Three Months Ended
	October 31,			October 31,			April 30,			April 30,
(in thousands)	2008			2007			2009			2008

OPERATING ACTIVITIES:
Net income	$	26,082		$	21,781		$	9,231		$	10,882
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		5,705			5,265			1,742			1,820
Provision for losses on accounts receivable, net of recoveries		590			95
Deferred income taxes		21			(703	)		(71	)		(63	)
Share-based compensation expense		737			708			192			192
Change in operating assets and liabilities:
Accounts receivable		(8,522	)		(3,797	)		4,026			(13,541	)
Inventories		(4,026	)		(4,174	)		3,526			(702	)
Prepaid expenses and other current assets		(417	)		(492	)		(977	)		(992	)
Operating liabilities		6,417			5,243			2,021			7,492
Other operating activities, net		(18	)		4			(22	)		35

Net cash provided by operating activities		26,569			23,930			19,668			5,123


INVESTING ACTIVITIES:
Capital expenditures		(5,639	)		(5,139	)		(1,105	)		(974	)
Purchase of short-term investments		(2,100	)		(2,200	)		—			(2,100	)
Sale of short-term investments		3,600			2,200			—			300
Other investing activities, net		(323	)		(315	)		(223	)		45

Net cash used in investing activities		(4,462	)		(5,454	)		(1,328	)		(2,729	)


FINANCING ACTIVITIES:
Dividends paid		(7,032	)		(5,972	)		(2,342	)		(2,353	)
Purchases of treasury stock		(5,180	)		(282	)		—			(2,966	)
Excess tax benefits on stock option exercises		126			352
Other financing activities, net		(33	)		(110	)		—			(13	)

Net cash used in financing activities		(12,119	)		(6,012	)		(2,342	)		(5,332	)


Effect of exchange rate changes on cash		(66	)		27			4			(2	)


Net increase in cash and cash equivalents		9,922			12,491
Net increase (decrease) in cash and cash equivalents								16,002			(2,940	)

Cash and cash equivalents:
Beginning of period		21,272			6,783			16,267			21,272

End of period	$	31,194		$	19,274		$	32,269		$	18,332

RAVEN INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(1) Basis of Presentation and Description of Business

The accompanying unaudited consolidated financial information has been prepared by Raven Industries, Inc. (the “company”) in accordance with accounting principles generally accepted in the United States of America 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 for complete financial statements. 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 nine-month periods~~three-month period ended ~~October 31, 2008~~April 30, 2009 are not necessarily indicative of the results that may be expected for the year ending January 31, ~~2009.~~2010. The January 31, ~~2008~~2009 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. This financial information should be read in conjunction with the consolidated financial statements and notes included in the company’s Annual Report on Form 10-K for the year ended January 31, ~~2008.~~2009.

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


Cost of Good Sold		Selling, General, and Administrative Expenses
Direct material costs		Personnel costs
Material acquisition and handling costs		Professional service fees
Direct labor		Advertising
Factory overhead including depreciation		Promotions
Inventory obsolescence		Information technology equipment depreciation
Product warranties Research and development		Office supplies

The company’s gross margins may not be comparable to industry peers due to variability in the classification of these expenses across the industries in which the company operates.

(2) Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted-average common shares and stock units outstanding. Diluted net income per share is computed by dividing net income by the weighted-average common and common equivalent shares outstanding (which includes the shares issuable upon exercise of employee stock options net of shares assumed purchased with the option proceeds) and stock units outstanding. Certain outstanding options were excluded from the diluted net income per-share calculations because their effect would have been anti-dilutive, as their exercise prices were greater than the average market price of the company’s common stock during those periods. For the three months ended April 30, 2009 and ~~nine month periods ended October 31,~~ 2008, ~~74,200~~382,975 and ~~74,467 shares~~226,950 options, respectively, were excluded ~~respectively. There were no shares excluded for~~from the ~~three month period ended October 31, 2007. For the nine month period ended October 31, 2007, 71,800 shares were excluded.~~diluted net income per-share calculation. Details of the ~~earnings per share~~ computation are presented below:

	��
		Three Months Ended				Nine Months Ended				Three Months Ended
		October 31,		October 31,		October 31,		October 31,		April 30,		April 30,
		2008		2007		2008		2007		2009		2008

Numerator:
Net income(in thousands)		$	8,385	$	7,398	$	26,082	$	21,781	$	9,231	$	10,882


Denominator:
Weighted average common shares outstanding			18,003,044		18,107,868		18,037,823		18,091,002		18,012,251		18,093,008
Weighted average stock units outstanding			14,557		9,828		12,919		8,154		15,140		9,893

Denominator for basic calculation			18,017,601		18,117,696		18,050,742		18,099,156		18,027,391		18,102,901


Weighted average common shares outstanding			18,003,044		18,107,868		18,037,823		18,091,002		18,012,251		18,093,008
Weighted average stock units outstanding			14,557		9,828		12,919		8,154		15,140		9,893
Dilutive impact of stock options			55,633		122,926		53,764		103,838		—		51,002

Denominator for diluted calculation			18,073,234		18,240,622		18,104,506		18,202,994		18,027,391		18,153,903


Net income per share – basic		$	0.47	$	0.41	$	1.44	$	1.20
Net income per share – diluted		$	0.46	$	0.41	$	1.44	$	1.20
Net income per share — basic										$	0.51	$	0.60
Net income per share — diluted										$	0.51	$	0.60

from Electronic Systems to ~~Flow Controls. All prior year measurements of segment sales and operating income are presented on a consistent basis for comparative purposes.~~Applied Technology. The results for these segments follow:

Three Months Ended Nine Months Ended
October 31, October 31, October 31, October 31,
(in thousands) 2008 2007 2008 2007

Net sales
Engineered Films $ 26,829 $ 21,803 $ 75,338 $ 65,127
Flow Controls 25,892 16,081 83,454 47,696
Electronic Systems 17,915 20,308 45,933 51,487
Aerostar 5,444 3,827 17,010 11,726
Intersegment eliminations (542 ) (177 ) (1,753 ) (438 )

Consolidated net sales $ 75,538 $ 61,842 $ 219,982 $ 175,598

Operating income (loss)
Engineered Films $ 3,718 $ 3,992 $ 11,097 $ 14,293
Flow Controls 8,022 4,889 28,628 14,598
Electronic Systems 1,804 3,528 3,683 8,421
Aerostar 912 299 2,436 817
Intersegment eliminations (8 ) 17 (11 ) (36 )

Total reportable segment income 14,448 12,725 45,833 38,093
General and administrative expenses (2,077 ) (1,785 ) (6,509 ) (5,772 )

Consolidated operating income $ 12,371 $ 10,940 $ 39,324 $ 32,321

~~Fiscal 2008 quarterly measurements of segment sales and operating income are presented below:~~


	Three Months Ended												Year Ended			Three Months Ended
	April 30,			July 31,			October 31,			January 31,			January 31,			April 30,			April 30,
(in thousands)	2007			2007			2007			2008			2008			2009			2008

Net sales
Applied Technology																$	29,434		$	34,846
Engineered Films	$	19,654		$	23,670		$	21,803		$	20,189		$	85,316			13,358			22,005
Flow Controls		19,835			11,780			16,081			16,595			64,291
Electronic Systems		14,472			16,707			20,308			16,500			67,987			16,153			13,279
Aerostar		4,180			3,719			3,827			5,564			17,290			6,565			6,019
Intersegment eliminations		(38	)		(223	)		(177	)		(489	)		(927	)		(288	)		(983	)

Consolidated net sales	$	58,103		$	55,653		$	61,842		$	58,359		$	233,957		$	65,222		$	75,166


Operating income (loss)
Operating income
Applied Technology																$	9,610		$	13,546
Engineered Films	$	5,018		$	5,283		$	3,992		$	3,446		$	17,739			2,715			3,864
Flow Controls		7,115			2,594			4,889			4,504			19,102
Electronic Systems		2,373			2,520			3,528			1,944			10,365			2,495			640
Aerostar		214			304			299			689			1,506			1,158			806
Intersegment eliminations		—			(53	)		17			(64	)		(100	)		28			(29	)

Total reportable segment income		14,720			10,648			12,725			10,519			48,612			16,006			18,827
General and administrative expenses		(1,882	)		(2,105	)		(1,785	)		(1,695	)		(7,467	)
Administrative and general expenses																	(1,893	)		(2,186	)

Consolidated operating income	$	12,838		$	8,543		$	10,940		$	8,824		$	41,145		$	14,113		$	16,641

must consider assumptions that market participants would use about renewal or extension. The adoption of FSP No. FAS 142-3 did not have a material impact on the company’s consolidated results of operations, financial condition or cash flows.

New pronouncements issued but not effective until after April 30, 2009, are not expected to have a material impact on the company’s consolidated results of operations, financial condition, or cash flows.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This commentary should be read in conjunction with the company’s consolidated financial statements for the three ~~and nine~~ months ended ~~October 31,~~April 30, 2009 and April 30, 2008, ~~and October 31, 2007,~~ 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-K for the year ended January 31, ~~2008.~~2009.

EXECUTIVE SUMMARY

~~Business Overview~~

Raven Industries, Inc. is an industrial manufacturer providing a variety of products to customers within the industrial, agricultural, construction and military/aerospace markets, primarily in North America. The company operates in four business segments: Applied Technology (formerly Flow Controls), Engineered Films, ~~Flow Controls,~~ Electronic Systems and Aerostar. Engineered Films produces rugged reinforced plastic sheeting for industrial, construction, geomembrane and agriculture applications. Flow Controls, including Raven Canada and Raven GmbH (Europe), provides electronic and Global Positioning System (GPS) products for

Significant financial items related to the ~~precision agriculture, marine navigation and other niche markets. Electronic Systems is a total-solutions provider~~first quarter of ~~electronics manufacturing services. Aerostar manufactures military parachutes, protective wear, custom-shaped inflatable products and high-altitude aerostats for government and commercial research.~~fiscal 2010 include:

	•		Diluted earnings per share of $0.51 decreased $0.09 (15%) from $0.60 per share in the first quarter of fiscal 2009.

	•		Net sales of $65.2 million decreased $9.9 million (13%) compared to $75.2 million in the first quarter of fiscal 2009. The recession and related economic uncertainty lowered Engineered Films and Applied Technology sales volumes. Electronic Systems and Aerostar sales were not directly impacted.

	•		Gross margins of 29.1% decreased slightly from 29.3% in the first quarter of fiscal 2009 stemming from a five point contraction in Applied Technology gross margins partially offset by increased Engineered Films and Electronic Systems margins.

	•		Net income decreased 15% to $9.2 million versus $10.9 million in the first quarter of fiscal 2009.

	•		The company generated first quarter operating cash flow of $19.7 million versus $5.1 million in the year ago quarter. The increase was driven by improved inventory management and accelerated collections of accounts receivable.

	•		The company paid dividends of $2.3 million during the first quarter of fiscal 2010.

Seasonality

The ~~Flow Controls~~Applied Technology segment is predominately focused on the agricultural market and quarterly financial results have typically been impacted by the inherent seasonality of this market. Historically, ~~Flow Controls~~Applied Technology’s first quarter results are the strongest and the second quarter the ~~weakest, however, sales programs were implemented in the second quarter of fiscal 2009 to alleviate manufacturing constraints and curb the impact of seasonality on quarterly financial results.~~weakest.

~~Snapshot~~Results of Operations (Q1 fiscal 2010 versus Q1 fiscal 2009)

~~Continued growth in the Flow Controls segment resulted in increased revenues~~Net sales decreased $9.9 million (13%) to $65.2 million from $75.2 million. The decrease was driven primarily by lower Applied Technology and ~~earnings for the three and nine months ended October 31, 2008. Financial highlights for the third quarter and first nine months of fiscal 2009 include the following:~~

Three Months Ended Nine Months Ended
October 31, October 31, % October 31, October 31, %
(in thousands except per share data) 2008 2007 Change 2008 2007 Change

Net sales $ 75,538 $ 61,842 22 % $ 219,982 $ 175,598 25 %
Operating income 12,371 10,940 13 % 39,324 32,321 22 %
Net income 8,385 7,398 13 % 26,082 21,781 20 %
Diluted earnings per share 0.46 0.41 12 % 1.44 1.20 20 %
Gross margins 23.8 % 24.7 % 25.4 % 26.2 %
Operating cash flow 26,569 23,930 11 %
Cash dividends 7,032 5,972 18 %
Common stock repurchases 5,180 282

~~Segment Results~~

Solid third quarter and year to date financial results have been fueled by the continued success of the Flow Controls segment and solid contribution of Aerostar. The 25% increase in net sales for the first three quarters of fiscal 2009 is the result of year-over-year sales growth in Engineered Films ~~(16%), Flow Controls (75%),~~sales partially offset by stronger Electronic Systems and Aerostar ~~(45%~~sales. Applied Technology sales decreased $5.4 million (16%)~~. In addition, the company reported strong year-over-year and quarter-over-quarter gains in operating income, net income, diluted earnings per share, and operating cash flow.~~

Flow Controls has benefited from healthy agricultural fundamentals, capitalizing on strong brand recognition, industry leading service, new products and greater acceptance of precision agriculture as a means of controlling input costs. These factors have contributed to growth in sales and operating margins. Engineered Films has benefited from increased oil and gas market drilling activities through increased sales of pit and pond lining films. Additionally, sales of geomembranes and agricultural films have increased year-over-year. However, operating margins have been negatively impacted by higher plastic resin costs driven by natural gas price volatility. Engineered Films’ ability to push higher raw material costs through selling prices has been constrained due to competitive pricing pressures driven by excess market capacity stemming from a weak construction market. Electronic Systems sales and operating income continues to be adversely impacted by a sluggish construction market which has negatively impacted sales of electronic bed controls. In addition, Electronic Systems faced difficult year-over-year comparables due to the loss of a customer through an acquisition and a profitable close-out order in the prior year’s third quarter. Aerostar posted gains in net sales and operating margins$29.4 million as a result of ~~execution under an Army protective wear contract~~a less robust agricultural market. Engineered Films sales decreased $8.6 million (39%) to $13.4 million versus $22.0 million due to decreased demand for pit liners and construction film reflecting depressed oil and gas drilling and construction activity. Additionally, downward pressure on Engineered Films selling prices contributed to the year-over-year revenue decline. Electronic Systems sales increased $2.9 million (22%) to $16.2 million from $13.3 million reflecting stronger sales of printed circuit board assemblies for the aviation industry and secure communication devices. Aerostar sales increased $546,000 (9%) to $6.6 million versus $6.0 million due to increased shipments of tethered aerostats and inflatable decoys.

Operating income decreased $2.5 million (15%) to $14.1 million from $16.6 million. Higher profits at Electronic Systems were offset by lower Applied Technology and Engineered Films results. Applied Technology operating income decreased $3.9 million (29%) to $9.6 million from $13.5 million due to lower sales volume and negative operating leverage stemming from the drop in revenue on a higher cost base versus a year ago. Engineered Films operating income decreased 30% to $2.7 million from $3.9 million reflecting the 39% drop in sales (roughly 27% volume and 12% price) partially offset by more favorable plastic resin costs, the primary component of plastic films. Electronic Systems operating income increased $1.9 million to $2.5 million from $640,000 in fiscal 2009 as a result of increased sales, ~~of research balloons. Shipments under the MC-6 U.S. Army parachutes contract were delayed in the third quarter, however the postponed~~positive operating leverage, and ~~regularly scheduled shipments have resumed in the fourth quarter.~~efficiency gains. Aerostar’s operating income increased to $1.2 million from $806,000 reflecting increased efficiencies and positive operating leverage gained though higher sales volume.

~~General and Administrative Expenses~~

General and administrative expenses increased 16% to $2.1 million, or 2.7% of net sales in the third quarter of 2009, compared to $1.8 million, or 2.9% of net sales in the third quarter of fiscal 2008. Administrative expenses increased 13% to $6.5 million, or 3.0% of net sales in the first three quarters of fiscal 2009, compared to $5.8 million, or 3.3% of net sales in the first three quarters of fiscal 2008. The comparative increases were due primarily to higher compensation costs and professional service fees.

~~Interest Income and Other, Net~~

Third quarter non-operating income of $177,000 decreased $137,000 (44%) as compared to the similar period last year. First nine month non-operating income of $471,000 decreased $344,000 (42%) as compared to the similar period last year. The decline is due to foreign exchange losses and decreased interest income. Interest income decreased as a result of a decrease in the average portfolio yield which was partially offset by higher average cash, cash equivalent, and short-term investment balances.

~~Income Taxes~~

The effective tax rate for the third quarter and first nine months of fiscal 2009 was 33.2% and 34.5%, respectively, versus an effective tax rate of 34.3% for the comparable periods of fiscal 2008. The decrease in the comparative third quarter rate is attributable to renewal of the U.S. research and development tax credit.

~~Special Dividend~~

~~On November 14, 2008 the company paid a special cash dividend of $1.25 per share or $22.5 million to shareholders of record on October 24, 2008.~~

~~Outlook~~

Management anticipates another record year of sales, earnings, and operating cash flows for the year ended January 31, 2009. Cash from operations and the company’s short-term line of credit are expected to be sufficient to fund day-to-day operations and the special dividend. Management believes that recent volatility and uncertainty in the global marketplace has lessened its ability to assess the company’s outlook.

Global farm conditions reflect increased demand for food driven by growth in developing countries. Commodity prices have fallen from their peak; however they remain strong by historical standards. Management expects Flow Controls to continue to grow as they capitalize on increased acceptance of precision agricultural equipment as an essential tool for maximizing yields in an environment of volatile input costs. Flow Controls is expected to post favorable year-over-year sales and profit comparables in the fourth quarter of fiscal 2009. Sequentially, growth is expected to moderate from the levels achieved in previous quarters.

Engineered Films long-term growth prospects depend on increased penetration of existing markets and the introduction of innovative products. The segment continues to capitalize on interest in new products such as FeedFresh™ sileage covers and VaporBlock Plus™ radon barriers. In the near term, the impact of lower energy prices is expected to decrease the demand for oil and pit lining films. The sharp decline in the price of natural gas has resulted in substantially lower plastic resin prices which may improve profit margins if selling prices can be maintained. Year-over-year fourth quarter sales are expected to decline.

Electronics Systems fourth quarter sales and profits are expected to be relatively flat compared to last year’s fourth quarter results. Year-over-year comparables continue to be adversely impacted by the loss of $7.0 million of annual sales through a customer acquisition and the adverse trend in hand-held bed control demand. Increased revenue from avionic electronics products is expected to substantially offset the aforementioned factors.

Aerostar is expected to post solid gains in fourth quarter sales and profits. Shipments under the two-year $20.7 million MC-6 Army parachute contract that were delayed in the third quarter have shipped in the fourth quarter along with the regularly scheduled shipments. In addition, Aerostar is expected to see increased shipments of protective wear and tethered aerostats.

RESULTS OF OPERATIONS — SEGMENT ANALYSIS(Q1 fiscal 2010 versus Q1 fiscal 2009)

~~Engineered Films~~Applied Technology

~~Third quarter fiscal 2009 net~~Applied Technology provides electronic and Global Positioning System (GPS) products designed to reduce operating costs and improve yields for the agriculture market.

Net sales of ~~$26.8 million increased $5.0 million (23%) and operating income of $3.7~~$29.4 million decreased ~~$274,000 (7%) as compared to the third quarter of fiscal 2008. Net sales for the first nine months of $75.3 million increased $10.2~~$5.4 million (16%) and operating income of ~~$11.1~~$9.6 million decreased ~~$3.2~~$3.9 million (29%).

Several factors contributed to the relative change:

	•		Worldwide agricultural conditions remained fairly strong as a result of good prices for corn, soybeans and other feed grains. However, grower and custom spray applicator purchasing decisions were deferred as a result of uncertainty regarding global economic conditions causing a decline in sales across substantially all of the segment’s product categories. The volume decrease was partially offset by a modest selling price increase.

	•		First quarter international sales of $5.8 million fell $900,000 (13%) year-over-year. Although foreign revenue decreased from last year it accounted for a larger share of Applied Technology sales, increasing from 19% of segment sales one year ago to 20%. While some markets experienced volatile conditions, revenues were enhanced by expanding sales efforts in regions not previously served. This caused the relative decline in international sales to be less than the drop in U.S. sales.

	•		New product sales declined. In the first three months of last year, the division’s Cruizer™ product was introduced. This simple and affordable guidance system targeted new entrants to the precision agricultural market and was well received in the marketplace.

	•		Gross margins of 38.5% contracted from 43.6% as result of negative operating leverage stemming from decreased sales volume.

	•		First quarter selling expense of $1.8 million was up from the prior year’s first quarter, increasing $121,000 (7%) due mainly to higher personnel cost. As a percentage of sales, selling expense increased to 6.0% versus 4.7% due to higher expense on lower sales volume.

Engineered Films

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

Net sales of $13.4 million decreased $8.6 million (39%) and operating income of $2.7 million decreased $1.2 million (30%).

The following factors contributed to the comparative change:

	•		Sales volume declined approximately 27% due to the freefall of business activity in the fourth quarter of fiscal 2009 as customers in the construction market adapted to a weakening economic outlook and the scarcity of credit. In addition, deliveries of pit liners to the energy exploration market declined from prior year levels. Drilling activity slowed due to lower oil prices and reductions in forecasted demand.

	•		Selling prices declined by roughly 12% year-over-year driven by competitive pricing pressure.

	��		Gross margins increased from 22.3% to 25.8% in the current quarter due to lower plastic resin costs. Opportune purchases of prime-grade plastic resins resulted in approximately $1.3 million of one-time material savings.

	•		First quarter selling expense of $725,000 decreased $260,000 from one year earlier reflecting a reduction in sales personnel and constrained discretionary spending due to the lower sales volume. As a result of the decrease in sales activity, selling expense as a percentage of sales increased to 5.4% versus 4.5%.

Electronic Systems

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

Net sales of $16.2 million increased $2.9 million (22%) ~~as compared to the same fiscal 2008 period.~~and operating income of $2.5 million rose $1.9 million (290%).

The ~~comparative rise in third quarter and year to date fiscal 2009 sales and decline in third quarter and year to date fiscal 2009 operating income are~~relative change is primarily the result of the following:

	•		~~Selling prices~~The sales improvement was substantially due to higher volume of aviation electronics shipments resulting from increased ~~modestly, however, the revenue increase is predominately the result of increased sales volume.~~customer demand.

	•		~~Strong sales~~First quarter hand-held bed control shipments were flat compared with the depressed levels of ~~pit and pond lining films~~one year ago due to ~~the oil and gas market, increased shipments~~steadying of ~~vapor retarders, and increased agriculture sales were partially offset by a decline in sales to the manufactured housing market.~~consumer spending on non-essential home-related products.

	•		Reduced operating margins continue to reflect the inability to fully pass on higher plastic resin costs because of competitive pricing pressures. Consequently, increases in production costs outpaced increases in selling prices. This trend is expected to reverse as plastic resin costs have fallen as a result of sharply lower natural gas prices.

	•		Gross margins ~~decreased~~expanded from ~~22.3% and 26.0%~~7.2% to 17.3% for the ~~third quarter and nine months of fiscal 2008 respectively to 17.0% and 18.5% for the third quarter and nine months of fiscal 2009, respectively.~~current quarter. The ~~decrease is~~improvement was attributable ~~to the aforementioned rise in material costs and increased price competition.~~

	•		Third quarter fiscal 2009 selling expenses of $833,000 decreased $44,000 (5%) quarter over quarter reflecting lower product development costs. Year to date 2009 selling expenses of $2.7 million are consistent with last year’s corresponding period.

~~Flow Controls~~

Flow Controls third quarter fiscal 2009 net sales of $25.9 million increased $9.8 million (61%) and third quarter fiscal 2009 operating income of $8.0 million increased $3.1 million (64%) as compared to the third quarter of fiscal 2008. For the nine months ended October 31, 2008, Flow Controls net sales of $83.5 million increased $35.8 million (75%) and operating income of $28.6 million increased $14.0 million (96%) as compared to the nine months ended October 31, 2007.

~~Several factors contributed to the third quarter and year to date fiscal 2009 comparative revenue and operating income increases, including the following:~~

	•		Commodity prices have fallen from their highs; however, agricultural market fundamentals remain strong and continue to influence growers’ capital investment decisions, increasing demand for Flow Controls precision agriculture equipment.

	•		International sales accounted for 12% and 18% of segment sales for the fiscal 2009 third quarter and first nine months, respectively, compared to 12% and 16% in the fiscal 2008 third quarter and first nine months, respectively. International sales of $14.9 million in the first three quarters of fiscal 2009 increased $7.1 million (91%) from the first three quarters of fiscal 2008. The increase is largely attributable to return on marketing investments in select global markets and healthy global farm fundamentals.

	•		~~All of the segment’s product categories (standard, precision, steering, and Autoboom~~^TM~~) reported double-digit sales growth for the quarter and nine months ended October 31, 2008, reflecting strong customer demand for new products such as the Cruizer~~^TM.~~, a simple and affordable guidance system targeted at new entrants to the precision agriculture market.~~

	•		Gross margins of 39.5% and 41.1% for the third quarter and first nine months of fiscal 2009, respectively, compared favorably to third quarter and first nine months fiscal 2008 gross margins of 38.2% and 38.7%, respectively. The increase is primarily due to positive operating leverage generated through increased ~~sales volume.~~

	•		Third quarter fiscal 2009 selling expense of $1.7 million increased $494,000 (40%) from the third quarter of fiscal 2008. Year to date fiscal 2009 selling expenses of $5.2 million increased $1.4 million (38%) from the first nine months of fiscal 2008. The increases reflect year-over-year increases in salaries, advertising,sales. Staff reductions, and ~~travel~~facility consolidations helped reduce costs ~~to support new products~~ and ~~international expansion.~~

~~Electronic Systems~~

Electronic Systems net sales of $17.9 million in the third quarter of fiscal 2009 decreased $2.4 million (12%) and operating income of $1.8 million in the third quarter of fiscal 2009 decreased $1.7 million (49%) as compared to the third quarter of fiscal 2008. Electronic Systems net sales of $45.9 million in the first nine months of fiscal 2009 decreased $5.6 million (11%) and operating income of $3.7 million in the first nine months of fiscal 2009 decreased $4.7 million (56%) as compared to the first nine months of fiscal 2008.

~~The comparative decline in fiscal 2009 sales and operating income is primarily the result of the following:~~

	•		Hand-held bed control shipments have been negatively impacted by lower consumer spending on non-essential home-related products, reflecting the influence of financial turmoil and a soft construction market.

	•		Electronic Systems continues to face difficult year-over-year comparables stemming from the loss of $7 million of annual sales through a customer acquisition and a profitable close-out order included in the prior year results.

	•		~~Increased sales of avionic electronics have partially offset the negative impact of the aforementioned factors.~~

	•		~~Margins have suffered as a result of a less favorable product mix compounded by the impact of negative operating leverage due to lower sales volume.~~improve efficiencies.

	•		Selling ~~expenses for the quarter~~expense was flat year-over-year and ~~nine-months ended October 31, 2008 were relatively flat compared~~as a percentage of sales fell from 2.3% to ~~the year ago periods.~~1.9%.

Aerostar

~~Aerostar’s fiscal 2009 third quarter~~Aerostar manufactures military parachutes, protective wear, custom shaped inflatable products, and high-altitude aerostats for government and commercial research.

Net sales of ~~$5.4~~$6.6 million increased $1.6 million (42%) and fiscal 2009 third quarter operating income of $912,000 increased $613,000 (205%) as compared to the third quarter of fiscal 2008. For the first nine months of fiscal 2009, Aerostar’s sales of $17.0 million increased $5.3 million (45%$546,000 (9%) and operating income of ~~$2.4~~$1.2 million increased ~~$1.6 million (198%~~$352,000 (44%) ~~as compared to the first nine months of fiscal 2008.~~.

The comparative ~~increase in fiscal 2009 sales and operating income~~change is primarily due to the following:

	•		~~Shipments~~Sales volume of ~~protective wear~~tethered aerostats and MC-6 parachutes have increased year-over-year. Deliveries under the $20.7 million MC-6 Army parachute contract began in October 2007 and regular deliveries under a protective wear contract of $6.5 million began in December 2007.inflatable decoys were up from one year earlier.

	•		~~MC-6~~Improved efficiencies on the parachute ~~shipments were delayed during the third quarter, however, have resumed~~and protective wear product lines resulted in ~~the fourth quarter.~~expanded gross margins to 20.6% from 16.9%.

	•		~~Gross margins~~Selling expense as a percentage of sales decreased to 3.0% from 3.5% due to relatively flat selling expense and increased to 20.9% and 18.2% for the third quarter and first nine months, respectively, from 12.3% and 11.8% in the third quarter and first nine months of fiscal 2008. Quarter-over-quarter gross margins have been bolstered by increased shipments of protective wear. Year-over-year gross margin improvement is the result of increased MC-6 Army parachute and protective wear shipments.sales.

Corporate Expenses (administrative expenses, interest income and other, net and income taxes)


	Three Months Ended
	April 30,			April 30,
Dollars in thousands	2009			2008

Administrative expenses	$	1,893		$	2,186
Administrative expenses as a % of sales		2.9	%		2.9	%
Interest income and other, net	$	1		$	118
Effective tax rate		34.6	%		35.1	%

First quarter administrative expenses of $1.9 million decreased 13% from $2.2 million reported a year ago. The decrease was due primarily to lower compensation expense.

“Interest income and other, net” consists mainly of interest income, bank fees and foreign currency transaction gain or loss. Interest income declined year-over-year due to lower interest rates.

The decrease in the effective tax rate is attributable to reinstatement of the U.S. research and development tax credit in October 2008.

OUTLOOK

Fiscal 2010 first quarter results were notably affected by the global economic recession and its impact on the company’s markets. This is expected to continue throughout the remainder of the current fiscal year, making comparisons to last year’s record results challenging. Management does not expect to beat last year’s record sales and earnings levels and anticipates second quarter results to be down from one year earlier.

Applied Technology

Second quarter sales are expected to continue to fall significantly short of last year’s levels. Current year revenue is forecast to be affected by the economic slowdown, in contrast to the strong market environment one year ago. Sequentially, second quarter revenue is expected to decrease due to seasonality. This segment entered into an agreement to distribute select products through John Deere dealers starting in August 2009. The benefit from this agreement is expected to be material to fiscal 2011 results but its impact on the current year cannot be determined. Staff cuts and spending constraints implemented late in the first quarter will decrease the cost base going forward but are not expected to offset the effect of the lower sales volume on profits for the full year.

Engineered Films

Management expects second quarter revenues to remain depressed and gross margins to decline. Included in the first quarter results were approximately $1.3 million of material savings due to opportune purchases of resin. This is not expected to be repeated in subsequent quarters. Year-over-year revenue comparisons are expected to remain significantly unfavorable over the course of the fiscal year as management does not anticipate a recovery from current economic conditions to occur until next fiscal year. The two

largest Engineered Films markets are energy (oil and gas drilling) and construction, both of which are dependent on a reversal of the current economic situation in order for sales to recover to prior year levels.

Electronic Systems

Electronic Systems second quarter revenue is targeted to increase sequentially and year-over-year due to increased demand for secure communication and aviation electronics. Gross margins in the first quarter benefited from a favorable product mix and are expected to decline during the year.

Aerostar

Management expects second quarter sales to be up slightly as compared with one year earlier as lower protective wear sales are expected to be offset by higher MC-6 parachute deliveries. Gross profit rates are expected to be lower than in the first quarter due to a less favorable product mix.

LIQUIDITY AND CAPITAL RESOURCES

~~Cash Position~~

~~Cash,~~The company’s liquidity and capital resources are strong despite the global economic recession. Management focuses on the current cash ~~equivalents,~~balance and ~~short-term investments totaled $31.2 million at October 31, 2008, an $8.4 million increase compared to~~operating cash flows in considering liquidity as operating cash ~~equivalents, and short-term investments at January 31, 2008~~flows have historically been the company’s primary source of $22.8 million. The comparable balances one year earlier totaled $23.3 million. On November 14, 2008, the company paid a special cash dividend of $1.25 per share or $22.5 million to shareholders of record on October 24, 2008.

~~The company~~liquidity. Management expects that current cash ~~and short-term investments,~~ combined with ~~continued~~the generation of positive operating cash flows ~~and the company’s short-term line of credit,~~ will be sufficient to fund ~~day-to-day operations.~~ the company’s operating, investing, and financing activities.

The company’s cash needs are seasonal, with working capital demands strongest in the first quarter. Consequently, the discussion of trends in operating cash flows focuses on the primary drivers of year-over-year variability in working capital.

Cash, cash equivalents, and short-term investments totaled $32.3 million at April 30, 2009, a $16.0 million increase compared to cash, cash equivalents, and short-term investments at January 31, 2009 of $16.3 million. The comparable balances one year earlier totaled $21.6 million. In November 2008, the company paid a special cash dividend of $22.5 million.

Operating Activities

Cash provided by operating activities was ~~$26.6~~$19.7 million in the first ~~nine months~~quarter of fiscal ~~2009~~2010 compared to ~~$23.9~~$5.1 million in the first ~~nine months~~quarter of fiscal ~~2008. The following items account for the majority of the relative year over year change:~~

	•		~~Net income for the first nine months of fiscal 2009 increased by $4.3 million compared to the same period of fiscal 2008.~~

	•		~~Non-cash charges to earnings and deferred income taxes increased by approximately $1.7 million year-over-year.~~

	•		Changes in operating assets and liabilities resulted in a $3.4 million net decrease in cash flow from operations as result of higher accounts receivable which was partially offset by the timing of payments to vendors.

~~Accounts Receivable~~

2009. The company’s ~~net accounts receivable balance was $44.3 million at October 31, 2008 compared to $35.1 million at October 31, 2007. Net accounts receivable levels are impacted~~operating cash flows result primarily from cash received from customers offset by ~~the relative contribution of segment sales to consolidated sales as each segment targets distinct markets~~cash payments for inventories, services, and ~~payment terms can vary by market type.~~employee compensation. The increase in ~~net accounts receivable is due primarily to the timing~~quarterly operating cash flows reflects improved working capital management. Specifically, receivables from agricultural customers were lower as a result of ~~sales, increased shipments of Flow Controls products, and seasonal~~accelerated payment terms ~~offered~~during the first quarter of fiscal 2010 and inventory declined due to ~~the agricultural market.~~

~~Inventory~~

~~The company’s net inventory was $40.5 million at October 31, 2008 compared to $32.3 million at October 31, 2007. The increase is the result of higher~~lower plastic resin costs ~~(Engineered Films), parachute shipment delays (Aerostar)~~ and ~~increased product~~lower expected demand ~~(Flow Controls). Management continues to focus on lowering the risk of obsolescence~~for Applied Technology and ~~improving cash flow while still ensuring competitive delivery performance.~~

~~Accounts Payable~~

The company’s accounts payable balance was $11.4 million at October 31, 2008 compared to $8.2 million at October 31, 2007. The increase is attributable to the increase in inventory, more favorable payment terms, and the timing and level of purchases.Engineered Films products.

Investing Activities

Cash used in investing activities totaled ~~$4.5~~$1.3 million in the first ~~nine months~~quarter of fiscal ~~2009,~~2010, a $1.4 million decrease compared to ~~$5.5~~the first quarter of fiscal 2009. The variance was caused primarily by decreased purchases of short-term investments. Net short-term investment purchases totaled $1.8 million one year ago versus none in the current quarter. Capital expenditures totaled $1.1 million during the current quarter compared to $1.0 million in the ~~first nine months of fiscal 2008.~~

~~Investing activities~~year ago quarter. Capital expenditures are expected to be in the $3 million range for the ~~nine-months ended October 31, 2009 included the following:~~

	•		~~Sales of short-term investments increased $1.4 million in the first nine months of fiscal 2009 as compared to the corresponding fiscal 2008 period.~~

	•		Capital expenditures increased $500,000 during the first nine months of fiscal 2009 compared to the first nine months of fiscal 2008. The company anticipates that its capital spending in fiscal 2009 will be in the $8 – 9 million range.

current fiscal year.

Financing Activities

Financing activities consumed cash of ~~$12.1~~$2.3 million for the ~~first nine~~three months ended ~~October 31, 2008 as~~April 30, 2009 compared to ~~$6.0~~$5.3 million used in last year’s comparable period. Cash used in financing activities is primarily for dividend payments and repurchases of common stock.

~~Financing activities for~~ The reduced spending was caused by suspension of the ~~nine-months ended October 3l, 2009 included~~share repurchase program in July 2008. Dividends of $2.3 million or 13 cents per share were paid during the ~~following:~~

instruments are used, (b) how derivative instruments and related hedged items are accounted for and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. ~~SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.~~ The ~~company does not anticipate that the~~ adoption of SFAS No. 161 ~~will~~did not have a material ~~effect~~impact on ~~its~~the company’s consolidated results of operations, financial condition or cash flows.

At the beginning of fiscal 2010 the company adopted FSP No. FAS 142-3,Determination of the Useful Life of Intangible Assets, which amends the list of factors an entity should consider in developing renewal or extension assumptions used in determining the useful life of recognized intangible assets under SFAS No. 142,Goodwill and Other Intangible Assets. The new guidance applies to (1) intangible assets that are acquired individually or with a group of other assets, and (2) intangible assets acquired in both business combinations and asset acquisitions. Under FSP No. FAS 142-3, entities estimating the useful life of a recognized intangible asset must consider their historical experience in renewing or extending similar arrangements or, in the absence of historical experience, must consider assumptions that market participants would use about renewal or extension. The adoption of FSP No. FAS 142-3 did not have a material impact on the company’s consolidated results of operations, financial condition or cash flows.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

The exposure to market risks pertains mainly to changes in interest rates on cash and cash equivalents and short-term investments. The company has no debt. The company does not expect operating results or cash flows to be significantly affected by changes in interest rates. Additionally, the company does not enter into derivatives or other financial instruments for trading or speculative purposes. However, the 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 financial condition, results of operations or cash flows.

The 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 interest income and other, net in the Consolidated Statements of Income. Foreign currency fluctuations had no material effect on the company’s financial condition, results of operations or cash flows.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of ~~October 31, 2008,~~April 30, 2009, the end of the period covered by this report, management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“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 disclosure controls and procedures were effective as of ~~October 31, 2008.~~April 30, 2009.

Changes in Internal Control over Financial Reporting

There were no changes in the company’s internal control over financial reporting that occurred during the quarter ended ~~October 31, 2008~~April 30, 2009 that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.

FORWARD-LOOKING STATEMENTS

~~This~~Certain statements contained in this quarterly report onForm 10-Q ~~contains~~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,~~“intends,” “may,” ~~“plans,”~~“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~~customers-any of which could adversely affect any of the company’s product lines, as well as other risks described in ~~Raven’s~~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.

1413

RAVEN INDUSTRIES, INC.

PART II –— OTHER INFORMATION

Item 1. Legal Proceedings:

The 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:

~~Fluctuations in commodity prices can increase our costs and decrease our sales.~~

Agricultural income levels are affected by agricultural commodity prices and input costs. As a result, changes in commodity prices that reduce agricultural income levels could have a negative effect on the ability of growers and their contractors to purchase the company’s precision agriculture products manufactured by its Flow Controls Division.

Exploration for oil and natural gas fluctuates with their price. Plastic sheeting manufactured and sold by our Engineered Films Division is sold as pit and pond liners to contain water used in the drilling process. Lower prices for oil and natural gas could reduce exploration activities and demand for our products. Plastic sheeting manufacture uses plastic resins which are subject to change in price as the cost natural gas changes. Accordingly, volatility in oil and natural gas prices may negatively affect our cost of goods sold or cause us to change prices, which could adversely affect our sales and profitability.

~~Other risk factors are included in the Company’s 10-K for the year ended January 31, 2008~~. No material change.

Item 2. Changes in Securities:

Under a resolution from the Board of Directors dated March 15, 2008, the company was authorized to repurchase up to $10 million of stock on the open market. No shares were repurchased during the ~~third~~first quarter ~~and approximately~~of fiscal 2010. Approximately $5.1 million of the repurchase authorization ~~remained open.~~remains open; however, the company temporarily suspended the share repurchase program in July 2008.

Item 3. Defaults upon Senior Securities: None

Item 4. Submission of Matters to a Vote of Security Holders: None

Item 5. Other Information: None

Item 6. Exhibits Filed:

	31.1		Certification of CEO Pursuant to Section 302 of Sarbanes-Oxley Act

	31.2		Certification of CFO Pursuant to Section 302 of Sarbanes-Oxley Act

	32.1		Certification of CEO Pursuant to Section 906 of Sarbanes-Oxley Act

	32.2		Certification of CFO Pursuant to Section 906 of Sarbanes-Oxley Act

SIGNATURES

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


	RAVEN INDUSTRIES, INC.
	/s/ Thomas Iacarella
	Thomas Iacarella
	Vice President and CFO, Secretary and Treasurer ~~(Principal~~ (Principal Financial and Accounting Officer)

Date: ~~December~~June 5, ~~2008~~2009

1514


	Three Months Ended						Nine Months Ended						Three Months Ended
	October 31,			October 31,			October 31,			October 31,			April 30,			April 30,
(in thousands)	2008			2007			2008			2007			2009			2008

Balance, beginning of period	$	1,018		$	493		$	684		$	397		$	1,004		$	684
Accrual for warranties		688			337			1,999			812			485			459
Settlements made (in cash or in kind)		(704	)		(349	)		(1,681	)		(728	)		(390	)		(350	)

Balance, end of period	$	1,002		$	481		$	1,002		$	481		$	1,099		$	793


		PAGE

PART I –— FINANCIAL INFORMATION

Item 1.	Financial Statements:
	Consolidated Balance Sheets (unaudited)		3
	Consolidated Statements of Income (unaudited)		4
	Consolidated Statements of Cash Flows (unaudited)		5
	Notes to Consolidated Financial Statements (unaudited)		~~6-8~~6-9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		9-13
Item 3.	Quantitative and Qualitative Disclosures about Market Risks		1413
Item 4.	Internal Controls and Procedures		1413

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings		15
Item 1A.	Risk Factors		15
Item 2.	Changes in Securities		15
Item 3.	Defaults upon Senior Securities		15
Item 4.	Submission of Matters to a Vote of Security Holders		15
Item 5.	Other Information		15
Item 6.	Exhibits Filed		15
Signatures			15
EX-31.1
EX-31.2
EX-32.1
EX-32.2

	•		~~$7.0 million of cash was used to pay dividends versus $6.0 million in the prior year as the quarterly per-share dividend increased to 13 cents per share from 11 cents one year ago.~~

	•		~~$5.2 million of cash was used to purchase 161,100 shares of the company’s stock under the share repurchase program compared to $282,000 to purchase 10,150 shares in the prior year.~~