FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

(Mark One)

		(Mark One)
		[X]		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended: October 31, 2001

OR

				For the quarterly period ended: April 30, 2002
				OR
		[]		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from ____________________________________

For the transition period from _____________________________________________________     

Commission file number: 0-3136

RAVEN INDUSTRIES, INC.

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

605-336-2750

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.

Yes [X]           X          No           [  ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

RAVEN INDUSTRIES, INC. AND SUBSIDIARIES

INDEX

PART I — FINANCIAL INFORMATION

RAVEN INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
(Dollars in thousands, except per share data)

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

Page 3

PART I — FINANCIAL INFORMATION

RAVEN INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
(Dollars in thousands, except per share data)

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

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PART I — FINANCIAL INFORMATION

RAVEN INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(Dollars in thousands)

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

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PART I — FINANCIAL INFORMATION

RAVEN INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1.		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 representation have been included. Financial results for the interim three and nine-month periodsthree-month period are not necessarily indicative of the results that may be expected for the year ending January 31. The January 31, 20012002 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, 2001.2002.
2.		Certain reclassifications have been made to the October 31, 2000 and January 31, 2001 consolidated balance sheets and the October 31, 2000 statement of income to conform to the October 31, 2001 presentation. These reclassifications had no impact on previously reported total assets, total liabilities, stockholders’ equity or operating income.
3.		Options to purchase approximately 340,000168,000 shares of the Company’s common stock were excluded from the diluted earnings per share calculations for the three and nine-month periodsthree-month period ended October 31, 2000April 30, 2001 because their exercise prices were greater than the average market price of the company’s common stock during that period. Details of the earnings per share computation are presented below:

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PART I — FINANCIAL INFORMATION

RAVEN INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

4.3.

The company’s reportable segments are defined by their common technologies, production processes and raw materials. These segments are consistent with the company’s management reporting structure. The company measures the performance of its segments based on their operating income exclusive of administrative and general expenses. The results of these segments are shown on the following table:

4.		InThe company incurred approximately $340,000 of inventory write-downs and other costs of goods sold in the quarter ended July 31,April 30, 2001 related to the Electronics Manufacturing Services (EMS) operationrepositioning of its Beta Raven Industrial Controls Division, including the closing of its Alabama plant. This charge was combined withincluded in the Electronic Systems Division.Businesses sold and for sale segment.
5.		Effective February 1, 2002, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets”. This change combinesstandard establishes new guidance on accounting for goodwill and intangible assets after a business combination is completed (i.e., post acquisition accounting). The standard discontinues the common EMS operationsamortization of goodwill and indefinite lived intangible assets, requiring instead the periodic testing of these assets for impairment. Goodwill, net of accumulated amortization, was $5.9 million as of January 31, 2002 and was recorded in “Goodwill and other assets, net” (long-term) on the accompanying balance sheet. The effect of adopting the new standard will reduce goodwill amortization expense by $81,000 annually. The Company plans to complete its transitional impairment testing during the second quarter of fiscal 2003. Management does not expect any material changes to the carrying value of goodwill as a result of the company andadoption of SFAS No. 142. The Company is designed to improve operating results from sharing management, marketing and production techniques. Revised segment history for assets, capital expenditures and depreciation and amortization have not yet been computed as it is not yet practicable to do so. The following table restates segment sales and operating incomein the process of finalizing the policy for the Electronic Systems Divisionperiodic testing for impairment of goodwill and Beta Raven for the prior six fiscal years:indefinite lived intangible assets.

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PART I — FINANCIAL INFORMATION

RAVEN INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

5.		On August 28, 2000, the company sold substantially all of the assets of its Plastic Tank division to Norwesco, Inc. recording a pretax gain of $3.1 million in the quarter ended October 31, 2000. The sale did not include the company’s plant in Tacoma, Washington. The Tacoma plant ceased production operations in October 2001. The Tacoma plant assets, primarily inventory and manufacturing equipment, are included in the October 31, 2001, October 31, 2000, and January 31, 2001 balance sheets at their estimated net realizable value.
		Effective February 1, 2002, the Company also adopted SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”. This standard expands upon the fundamental provisions of SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of”. It also broadens the presentation of discontinued operations to include disposals of assets below the segment level. The gain on sale of businesses and assets of $399,000 during the nine months ended October 31, 2001 consists primarily of the sale in May 2001 of a Sportswear Division distribution warehouse used by the Aerostar segment.
6.		The company incurred approximately $351,000 of inventory write-downs and other costs of goods soldCompany is in the nine-months ended October 31, 2001 related toprocess of finalizing the repositioningpolicy for the periodic testing for impairment of its Beta Raven subsidiary, including the closing of its Alabama plant.
7.		During the quarter ended July 31, 2001, the company repaid the remaining $2.0 million of its long-term debt originally due in equal installments in June 2002 and June 2003.
		In June 2001, the company entered a new agreement with Wells Fargo Bank South Dakota, N.A. (Wells Fargo) to decrease the short-term credit line to $5.0 million. The terms of this credit line are similar to the $7.0 million line with Wells Fargo that expired on June 30, 2001. On October 31, 2001, the company had no borrowings outstanding under this line of credit.
		During the quarter ended July 31, 2001, Aerostar International, Inc. (a subsidiary of Raven Industries, Inc.) entered into a new agreement with Wells Fargo for a short-term credit line of $2.0 million that expires in June 2002. The terms of this credit line contain certain restrictive covenants that among other things require Aerostar to maintain a minimum net worth and minimum cash flow coverage. This credit line will be used to finance seasonal accounts receivable and inventories. On October 31, 2001, Aerostar International had borrowings oflong-lived assets.

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PART I — FINANCIAL INFORMATION

RAVEN INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

		$400,000 outstanding under this line of credit and the interest rate on these borrowings was 5.50%.
8.		On May 23, 2001, the Board of Directors declared a three-for-two stock split of the company’s common stock, to be effected in the form of a stock dividend. The record date for the stock dividend was June 25, 2001, with the shares distributed on July 13, 2001. Earnings-per-share calculations and average shares outstanding for all reported periods reflect the stock split.
9.		The Financial Accounting Standard Board approved its proposed Statements of Financial Accounting Standards No. 141 (FAS 141), Business Combinations,No. 142 (FAS 142), Goodwill and Other Intangible Assets, No. 143 (FAS 143), Accounting for Asset Retirement Obligations, and No. 144 (FAS 144), Accounting for the Impairment or Disposal of Long-Lived Assets.
		FAS 141 supercedes Accounting Principles Board Opinion No. 16 (APB 16), Business Combinations. The most significant changes made by FAS 141 are: (1) requiring that the purchase method of accounting be used for all business combinations initiated after June 30, 2001, and (2) establishing specific criteria for the recognition of intangible assets separately from goodwill.
		FAS 142 supercedes APB 17, Intangible Assets. FAS 142 primarily addresses the accounting for goodwill and intangible assets subsequent to their acquisition (i.e., the post-acquisition accounting). The provisions of FAS 142 will be effective for fiscal years beginning after December 15, 2001. The most significant changes made by FAS 142 are (1) goodwill and indefinite lived intangible assets will no longer be amortized, (2) goodwill will be tested for impairment at least annually at the reporting level, (3) intangible assets deemed to have an indefinite life will be tested for impairment at least annually, and (4) the amortization period of intangible assets with finite lives will no longer be limited to forty years.
		FAS 143 establishes accounting standards for recognition and measurement of a liability for an asset retirement obligation and the associated asset retirement cost.
		FAS 144 establishes accounting and reporting standards for the impairment or disposal of long-lived assets to be disposed of by sale, whether previously held and used or newly acquired.
		The company is in the process of analyzing the impacts of these new standards on its results of operations and financial condition.
10.		Effective December 5, 2001 the company acquired the assets of two companies, Starlink, Incorporated (Starlink) and System Integrators, Inc. (System Integrators).
		Starlink was acquired for approximately $8 million cash. In addition, the company assumed approximately $800,000 of liabilities. Starlink is a developer and manufacturer of Global Positioning Satellite (GPS) technology located in Austin, Texas and will be integrated into the company’s Flow Controls Division. Sales for the year ended December 31, 2000 were $4.7 million.
		System Integrators, an electronic manufacturing services (EMS) provider, was acquired for approximately $1.4 million cash and the assumption of approximately $600,000 of debt. In addition, the company assumed approximately $500,000 of other liabilities. Operations of System Integrators will be combined into the company’s Electronic Systems Division’s Missouri location. System Integrators sales were approximately $4.0 million for the year ended December 31, 2000.

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PART I — FINANCIAL INFORMATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FINANCIAL CONDITION

The company’s cash and cash equivalents balance was $16.8of $10.2 million at October 31,April 30, 2002 was $4.3 million less than at April 30, 2001. On December 5, 2001, compared with $11.9 million one year earlier.the company acquired the operating assets and certain liabilities of Starlink, Incorporated and System Integrators, Inc. for cash of $8.7 million. Accounts receivable of $14.5$14.9 million decreased $4.8$2.3 million from October 31, 2000April 30, 2001 due primarily to the closing of the company’s plastic tank facility in Tacoma, WA in November 2001 and lower sales activity at Aerostar and the ceasing of production during October 2001 at the company’s Tacoma plant.Aerostar. Inventory levels increased by $997,000 from April 30, 2001 to April 30, 2002 as a result of $18.6 million decreased $1.8 million from October 31, 2000 due primarily to lower sales levels in Aerostar’s specialty apparel products.the acquisitions. At October 31, 2001,April 30, 2002, the company retained a $5.0 million line of credit and it’sits Aerostar subsidiary retained an unused balance of $1.6 million on itsa $2.0 million seasonal line of credit. During the quarter ended July 31, 2001, the company repaid substantially allNo borrowings on either line were outstanding as of its long-term debt originally due in June 2002 and June 2003.April 30, 2002. The company’s capital resources continue to be sufficient to fund all its activities, including financing the acquisitions noted in note 10 to the consolidated financial statements.activities.

RESULTS OF OPERATIONS

Reported salesSales of $28.8$31.0 million for the quarter ended October 31, 2001April 30, 2002 were flat when compared to $35.2 million in the thirdfirst quarter of last year. SalesDecreases in sales from the Plastic Tank division (contained in the “Businesses sold and for sale” segment) forsale businesses, the three and nine month periods ended October 31, 2001 were $214,000 and $3.3 million, respectively, compared to the prior year’s three and nine month sales of $2.4 and $14.0 million, respectively. The reported sales decreases for the quarter ended October 31, 2001 were primarily due to the Plastic Tank divisionEngineered Films segment and the Aerostar segment. These decreasessegment were partially offset by ana 49 percent sales increase recorded in the Flow Controls segment. Reported year-to-date sales of $87.9Selling, general and administrative expenses for the current year’s first quarter were $2.8 million as compared to sales of $100.6$2.9 million reported in the same period of fiscal 2001. The decrease in sales from sold businesses of $10.7 million and the decrease in sales volume at Aerostar were offset by increases in the Flow Controls and Engineered Films segments. Reported operatingprevious year’s first quarter. Operating income of $3.8$5.3 million for the thirdfirst quarter and $10.1 million for the nine months ended October 31, 2001 were $186,000 and $2.1was $2.0 million above the three and nine months ended October 31, 2000, respectively.April 30, 2001. The impact of lowerflat sales was offset by strong profit margins in the Engineered Films and Flow Controls segments. Selling, general and administrative expenses for the current year’s third quarter were $2.7 million compared to $3.3 million in the previous third quarter. The decrease is primarily due to staff reductions and lower bad debt expense. The company reported a $3.1 million pretax gain on the sale of its Plastic Tank division during last year’s third quarter. The improvement in non-operatingNet income for the first quarter wasincreased by 57 percent to $3.5 million from one year earlier, resulting in record earnings of 73 cents per diluted share.

Flow Controls sales of $11.8 million for the result of afirst quarter were $3.9 million higher net cash positionthan in the same period last year. Strong demand for new products and the associated lower interest expense and higher interest earned. Theimpact of the company’s Starlink acquisition accounted for the sales increase. First quarter operating income tax rate in the prior year reflects the write-offwas $4.2 million, an increase of $1.8 million of non-deductible goodwill. Earnings per share, on a diluted basis,from the previous year’s first quarter. Increased sales volume, product mix and favorable plant utilization were all contributing factors to the higher operating income level for the threeFlow Controls segment.

Engineered Films sales of $8.2 million were down 12 percent in the first quarter due to a decrease in sales of pit liners for oil exploration, reduced sales of construction enclosure films due to mild winter weather conditions and nine month periods ended October 31, 2001 were $.53 and $1.43 per share, respectively,a depressed manufactured housing market. Despite the lower sales volume, quarterly operating income increased slightly to $2.4 million as compared to $.34 and $.85 for the same periods one year earlier. Total average weighted diluted shares outstanding$2.3 million recorded for the quarter ended October 31,April 30, 2001 were 4.7due to favorable material pricing and product mix.

Electronic Systems first quarter sales increased slightly to $7.5 million compared to 4.9from $7.4 million in the previoussame period last year. First quarter operating income increased to $208,000, a 48 percent improvement over the prior year. Improved operating income results for the three-month period reflect the segment’s Six-Sigma initiatives and related cycle-time reductions.

Aerostar first quarter sales of $2.4 million were $1.1 million below last year’s third quarter. Forfirst quarter, a decrease of 31 percent. A soft hot-air balloon market and continued pressure from offshore apparel manufacturers negatively affected the nine months ended October 31, 2001first quarter sales level. Compared to the prior year, hot-air balloon and October 31, 2000, average weighted diluted shares outstanding were 4.7 millionspecialty apparel sales decreased 40 percent and 5.3 million,35 percent, respectively. The lower shares outstandingsales level resulted in an operating loss of $191,000 for the quarter.

First quarter sales for businesses sold and for sale totaled $1.1 million, all of which were primarilyfrom the company’s Beta Raven Industrial Controls Division. For the first quarter ended April 30, 2001, Beta Raven Industrial Controls Division recorded $813,000 of sales. Plastic Tank Division sales were $2.0 million in the prior year’s first quarter. This operation was closed in November 2001. The Beta Raven Industrial Controls Division incurred a $340,000 repositioning charge in the

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PART I — FINANCIAL INFORMATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

quarter ended April 30, 2001. As a result, first quarter operating income of $70,000 was favorable to the company’s treasury share repurchases.$310,000 operating loss recorded in the previous first quarter.

The results for the quarterthree-months ended April 30, 2002 and nine-months ended October 31,April 30, 2001 and October 31, 2000 include nonrecurring items that the company does not believe are relevant to future operations or cash flows. Therefore, the company has segregated its ongoing operations in the tables below. October 31,Ongoing operations exclude the operations of and gains from the sale of the Plastic Tank Division which was partially sold in August 2000 ongoing operation data has been restated to reflect the changeand closed in segment reporting made in the fourth quarter of fiscal 2001. The discussion of operating results following the tables is focused on the results of ongoing operations exclusive of these items.

Ongoing operation results excludeNovember 2001, as well as the results of the Industrial Controls Division of Beta Raven which is held for sale. Ongoing results also exclude the nonrecurring gains and losses related to repositioning the company’s Plastic Tank division. The gain on sale of businesses and assets of $399,000 (relating primarily to the sale of Aerostar’s distribution warehouse) and other nonrecurring restructuring costs of $333,000 (relating primarily

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PART I — FINANCIAL INFORMATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

to Beta Raven’s first-quarter charge for the closing of it’s Alabama plant) were alsoacquisition-related charges. The items excluded from ongoing operation results. In the prior year, ongoing operation results excluded a $3.1 million gain on the sale of the company’s Plastic Tank division. The ongoing operation results for the three and nine month periods ended October 31, 2000 also exclude nonrecurring charges of $2.2 millioncause this presentation to reposition the customer basenot be in its electronics businesses and record severance costs for personnel in two sewing plants which closedconformity with accounting principles generally accepted in the fourth quarterUnited States of fiscal 2001.America.

The following table presents ongoing operation information for the three-month period ended April 30, 2002 and nine-month periods ended October 31, 2001 and October 31, 2000:April 30, 2001:

In the quarter ended July 31, 2001, the Electronics Manufacturing Services (EMS) operation of Beta Raven was combined with the Electronic Systems Division. Segment sales and operating income in the following tables have been restated to reflect this change.

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PART I — FINANCIAL INFORMATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Following is a table of ongoing operation results by segment:

ONGOING OPERATIONS
SALES AND OPERATING INCOME BY SEGMENT

SalesTotal sales for businesses sold and for sale in the quarters ended April 2002 and April 2001 were $1.1 million and $2.8 million, respectively. Operating income that has been excluded from the ongoing operations were $28.6 milliontotaled $70,000 for the current quarter. For the quarter ended October 31,April 30, 2001, a decrease of $4.3 million$310,000 loss has been excluded.

OUTLOOK

Management budgeted earnings in the second quarter to be down slightly from the previousprior year’s second quarter results. The Starlink acquisition is expected to seasonally enhance earnings in the company’s first and fourth quarters and dampen earnings in the second and third quarter sales.quarters. The decrease in sales was primarily due to the downsizingsecond quarter of the company’s Aerostar segment. Current fiscal year-to-date ongoing operation sales were $84.6 million versus $86.5 millionprior year also included a $345,000 gain on an asset sale which will not recur this year. Net income for the first six months of the year is expected to be well ahead of the same period in the previous fiscal year. Sales increases in the Flow Controls and Engineered Films segments were offset by a decrease in the Aerostar segment. Operating income from ongoing operations for the third quarter was $3.8 million compared to $2.5 million in the previous third quarter. Ongoing operating income for the nine months ended October 31, 2001 was $9.7 million, an increase of $3.5 million from the previous year. The increases in operating income for both the quarter and nine-month periods were primarily due to the impact of sales increases in the Flow Controls segment and strong margin performance in the Engineered Films segment. Ongoing operating income for both the quarter and year-to-date was favorably impacted by lower administrative and general expenses.

Electronic Systems third quarter sales decreased to $6.7 million from $7.7 million in the same period last year. Year-to-date sales were $23.0 million, up slightly from the previous year’s $22.7 million. Third quarter sales were negatively impacted by customer design delays on major new contracts. Third quarter operating income increased to $508,000 from an $163,000 loss the prior year. Operating incomeFull year earnings per share are expected to hit a record high, exceeding the all-time high of $1.86 the company achieved last year.

NEW ACCOUNTING STANDARDS

Effective February 1, 2002, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets”. This standard establishes new guidance on accounting for goodwill and intangible assets after a business combination is completed (i.e., post acquisition accounting). The standard discontinues the nine months ended Octoberamortization of goodwill and indefinite lived intangible assets, requiring instead the periodic testing of these assets for impairment. Goodwill, net of accumulated amortization, was $5.9 million as of January 31, 20012002 and was $1.4 million compared to $142,000recorded in “Goodwill and other assets, net” (long-term) on the previous year. As a resultaccompanying balance sheet. The effect of this segment’s repositioning efforts inadopting the prior year, operating income for the three and nine month periods reflected improved production efficiencies and better material management.new standard will reduce goodwill amortization

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PART I — FINANCIAL INFORMATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Flow Controls salesexpense by $81,000 annually. Management does not expect any material changes to the carrying value of $5.1 million for the third quarter were $1.0 million higher than in the same period last year. Nine-month sales of $15.9 million were up 28% from $12.4 million in the first nine months of fiscal 2001. Strong demand for new products accounted for the sales increase. Third quarter operating income was $1.4 million, an increase of $614,000 from the previous year’s third quarter. The increased sales volume and improved production efficiencies favorably affected operating income in the third quarter and the nine months. Operating income of $4.0 million in the first nine months was 37% above the $2.9 million for the first nine months of fiscal 2001.

Engineered Films sales of $10.6 million were down 5% in the third quarter due to mild weather conditions, which affected construction film sales. Nine-month sales of $30.8 million were $786,000 ahead of the same period in the previous yeargoodwill as a result of increased demand for pit linersthe adoption of SFAS No. 142. The Company is in the process of finalizing the policy for the oil exploration marketperiodic testing for impairment of goodwill and foreign research balloons. Quarterly operating income increased to $2.8 million compared to $2.6 million recordedindefinite lived intangible assets.

Effective February 1, 2002, the Company also adopted SFAS No. 144, “Accounting for the quarter ended October 31, 2000. Favorable material pricing offsetImpairment or Disposal of Long-Lived Assets”. This standard expands upon the negative profit impactfundamental provisions of lower sales. Operating incomeSFAS No. 121, “Accounting for the first nine monthsImpairment of fiscal 2002Long-Lived Assets and for Long-Lived Assets to be Disposed Of”. It also broadens the presentation of $8.0 million was 17% overdiscontinued operations to include disposals of assets below the $6.8 millionsegment level. The Company is in the same period last year. Year-to-date operating income has been impacted by favorable material pricing, increased manufacturing efficiencies, and higher-margin product mix.

Aerostar third quarter salesprocess of $5.2 million were $4.0 million below last year’s third quarter. Salesfinalizing the policy for the first nine monthsperiodic testing for impairment of $12.8 million were $6.2 million below the same period the previous year. The lower sales volume in the current fiscal year reflects the closing of two sewing plants in November 2000. Operating income of $326,000 in the third quarter was below the prior year’s third quarter income of $909,000. Operating income in the first nine months was $967,000 and was 27% below the $1.3 million of income in the first nine months of fiscal 2001 due to lower sales levels. The backlog for sewn products at October 31, 2001 remains significantly lower than one year earlier.

Beta Raven sales in the third quarter of $928,000 were above the $744,000 recorded in the previous year’s third quarter. Nine-month sales of $2.2 million were 12% below the first nine months of last fiscal year. Third quarter operating income of $56,000 was favorable to the $123,000 operating loss the previous third quarter. Operating losses for the nine months were $365,000 and compared unfavorably to the $174,000 loss in the first nine months of fiscal 2001. The continued weakness in the American poultry industry adversely affected sales and profit margins.long-lived assets.

OUTLOOK

The company believes earnings for the third quarter and first nine months reflect the continued repositioning of the company away from lower-margin businesses. Management expects ongoing earnings in the fourth quarter to meet or exceed earnings recorded in the previous year’s fourth quarter by maintaining improved margins.

NEW ACCOUNTING STANDARDS

New accounting standards are discussed in footnote 9 to the consolidated financial statements.

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PART I — FINANCIAL INFORMATION

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

Certain sections of this report contain statements which may constitute forward-looking statements within the meaning of federal securities laws. Although Raven Industries, Inc. believes that expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurances that its expectations will be achieved. Factors that could cause actual results to differ from expectations include general economic conditions, weather conditions which could affect certain of the company’s primary markets such as agriculture or construction, or changes in competition or the company’s customer base which could impact any of the company’s product lines.

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PART II — OTHERII-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 2. Changes in Securities: None

Item 3. Defaults upon Senior Securities: None

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

     The company’s annual meeting of stockholders was held on May 22, 2002. The following members were elected to the company’s Board of Directors to hold office for the ensuing year.

Item 5. Other Information: None

Item 6. (a) Exhibits Filed: None

(b)

Reports on Form 8-K: An 8-K was filed December 13, 2001, concerning the December 5, 2001 acquisitions of Starlink, Incorporated and System Integrators, Inc.

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.