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

(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

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

Commission file number: 0-3136

RAVEN INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

SOUTH DAKOTA	46-0246171
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

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

(Address of principal executive offices) (Zip code)

605-336-2750

Registrant’s telephone number, including area code

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]           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.

Class	Outstanding as of December 6, 2001
Common Stock	4,635,467 shares

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
	CONSOLIDATED BALANCE SHEET
	CONSOLIDATED STATEMENT OF INCOME
	CONSOLIDATED STATEMENT OF CASH FLOWS
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PART II — OTHER INFORMATION

RAVEN INDUSTRIES, INC. AND SUBSIDIARIES

INDEX

	PAGE NO.
PART I-FINANCIAL INFORMATION
Consolidated Balance Sheet as of October 31, 2001, January 31, 2001 and October 31, 2000		3
Consolidated Statement of Income for the three and nine month periods ended October 31, 2001 and 2000		4
Consolidated Statement of Cash Flows for the nine month periods ended October 31, 2001 and 2000		5
Notes to Consolidated Financial Statements		6-9
Management’s Discussion and Analysis of Financial Condition and Results of Operations		10-14
PART II-OTHER INFORMATION		15

PART I — FINANCIAL INFORMATION

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

					Oct 31, 2001			Jan 31, 2001			Oct 31, 2000
					(unaudited)						(unaudited)
ASSETS
Cash and cash equivalents					$	16,773		$	10,673		$	11,926
Accounts receivable, less allowance for doubtful accounts of $400, $400 and $552 as of 10/31/01, 01/31/01 and 10/31/00, respectively						14,491			19,274			19,271
Inventories:
	Materials					11,941			12,317			13,604
	In process					2,208			2,497			3,345
	Finished goods					4,489			4,170			3,472
				Total inventories		18,638			18,984			20,421
Deferred income taxes						2,162			2,516			2,909
Prepaid expenses and other current assets						492			371			216
				Total current assets		52,556			51,818			54,743
Property, plant and equipment						40,937			37,878			38,743
Accumulated depreciation						(27,834	)		(26,231	)		(27,102	)
				Property, plant and equipment, net		13,103			11,647			11,641
Other assets, net						1,838			2,191			1,951
Total assets					$	67,497		$	65,656		$	68,335
LIABILITIES AND STOCKHOLDERS’ EQUITY
Notes payable, bank					$	400		$	—		$	—
Current portion of long-term debt						13			1,012			1,012
Accounts payable						4,461			3,490			4,089
Income taxes payable						352			68			2,308
Accrued liabilities and customer advances						9,224			9,365			9,110
				Total current liabilities		14,450			13,935			16,519
Long-term debt, less current portion						—			2,013			2,013
Other liabilities, primarily compensation and benefits						1,851			1,719			1,801
Stockholders’ equity:
	Common stock, $1 par value, authorized shares: 100,000,000; issued: 7,862,150; 5,223,239 and 5,220,614 shares as of 10/31/01, 01/31/01 and 10/31/00, respectively					7,862			5,223			5,221
	Paid in capital					1,076			3,459			3,420
	Retained earnings					73,239			68,248			66,930
						82,177			76,930			75,571
	Less treasury stock, at cost:
			3,233,219; 2,063,807 and 1,980,957 shares as of 10/31/01, 01/31/01 and 10/31/00, respectively			30,981			28,941			27,569
		Total stockholders’ equity				51,196			47,989			48,002
Total liabilities and stockholders’ equity					$	67,497		$	65,656		$	68,335

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)

			FOR THE THREE						FOR THE NINE
			MONTHS ENDED						MONTHS ENDED
			Oct 31, 2001			Oct 31, 2000			Oct 31, 2001			Oct 31, 2000
Net sales			$	28,780		$	35,209		$	87,909		$	100,556
Cost of goods sold				22,389			31,474			69,980			85,590
	Gross profit			6,391			3,735			17,929			14,966
Selling, general and administrative expenses				2,683			3,295			8,252			10,076
Gain on sale of businesses and assets				(54	)		(3,136	)		(399	)		(3,136	)
	Operating income			3,762			3,576			10,076			8,026
Interest expense				(17	)		(83	)		(86	)		(204	)
Other income, net				134			99			461			223
	Income before income taxes			3,879			3,592			10,451			8,045
Income taxes				1,369			1,929			3,689			3,532
	Net income		$	2,510		$	1,663		$	6,762		$	4,513
Net income per common share:
		Basic	$	0.54		$	0.34		$	1.45		$	0.85
		Diluted	$	0.53		$	0.34		$	1.43		$	0.85
Cash dividends paid per share			$	0.13		$	0.12		$	0.38		$	0.35

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

Page 4

PART I — FINANCIAL INFORMATION

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

			FOR THE NINE
			MONTHS ENDED
			Oct 31, 2001			Oct 31, 2000
Cash flows from operating activities:
	Net income		$	6,762		$	4,513
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization		2,291			3,011
		Provision for losses on accounts receivable, net of recoveries		(51	)		475
		Gain on sale of businesses and assets		(399	)		(3,136	)
		Deferred income taxes		323			(1,108	)
		Change in accounts receivable		4,819			239
		Change in inventories		309			2,477
		Change in prepaid expenses and other assets		288			349
		Change in operating liabilities		1,233			1,696
		Other, net		17			34
	Net cash provided by operating activities			15,592			8,550
Cash flows from investing activities:
	Capital expenditures			(3,796	)		(2,412	)
	Proceeds from the sale of businesses and assets			663			12,318
	Other, net			(101	)		37
	Net cash provided by (used in) investing activities			(3,234	)		9,943
Cash flows from financing activities:
	Issuance of short-term debt			1,470			3,500
	Payment of short-term debt			(1,070	)		(3,500	)
	Long-term debt principal payments			(3,012	)		(1,043	)
	Proceeds from exercise of stock options			168			45
	Dividends paid			(1,771	)		(1,819	)
	Purchase of treasury stock			(2,040	)		(9,457	)
	Other, net			(3	)		—
	Net cash provided by (used in) financing activities			(6,258	)		(12,274	)
	Net increase (decrease) in cash and equivalents			6,100			6,219
Cash and cash equivalents at beginning of period				10,673			5,707
Cash and cash equivalents at end of period			$	16,773		$	11,926

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

Page 5

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 periods are not necessarily indicative of the results that may be expected for the year ending January 31. The January 31, 2001 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.
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 340,000 shares of the Company’s common stock were excluded from the diluted earnings per share calculations for the three and nine-month periods ended October 31, 2000 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:

	FOR THE THREE				FOR THE NINE
	MONTHS ENDED:				MONTHS ENDED:
(In thousands, except per share data)	10/31/01		10/31/00		10/31/01		10/31/00
Net income	$	2,510	$	1,663	$	6,762	$	4,513
Weighted average common shares outstanding		4,627		4,943		4,666		5,293
Dilutive impact of stock options		90		4		71		1
Weighted average common and common equivalent shares outstanding		4,717		4,947		4,737		5,294
Net income per share:
Basic	$	0.54	$	0.34	$	1.45	$	0.85
Diluted	$	0.53	$	0.34	$	1.43	$	0.85

Page 6

PART I — FINANCIAL INFORMATION

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

4. 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:

(Dollars in thousands)		FOR THE THREE						FOR THE NINE
		MONTHS ENDED:						MONTHS ENDED:
		10/31/01			10/31/00			10/31/01			10/31/00
NET SALES:
Electronic Systems		$	6,737		$	7,650		$	22,982		$	22,665
Flow Controls			5,099			4,077			15,851			12,364
Engineered Films			10,562			11,128			30,779			29,993
Aerostar			5,240			9,225			12,807			18,992
Beta Raven			928			744			2,216			2,527
Businesses sold and for sale			214			2,385			3,274			14,015
Total company		$	28,780		$	35,209		$	87,909		$	100,556
OPERATING INCOME (LOSS):
Electronic Systems		$	508		$	(1,985	)	$	1,415		$	(1,680	)
Flow Controls			1,423			571			4,016			2,700
Engineered Films			2,822			2,642			7,956			6,817
Aerostar			330			853			1,381			1,264
Beta Raven			56			(207	)		(716	)		(258	)
Businesses sold and for sale			(42	)		3,245			278			4,015
	Sub-total		5,097			5,119			14,330			12,858
Administrative and general expenses			(1,335	)		(1,543	)		(4,254	)		(4,832	)
Total company		$	3,762		$	3,576		$	10,076		$	8,026

In the quarter ended July 31, 2001, the Electronics Manufacturing Services (EMS) operation of Beta Raven was combined with the Electronic Systems Division. This change combines the common EMS operations of the company and 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 income for the Electronic Systems Division and Beta Raven for the prior six fiscal years:

Page 7

PART I — FINANCIAL INFORMATION

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

	Electronic Systems
(Dollars in thousands)	Division							Beta Raven, Inc.
	As Reported				Revised			As Reported			Revised
SALES:
FY 2001		$	26,354		$	32,039			$	8,951	$	3,266
FY 2000			24,077			30,176				11,333		5,234
FY 1999			18,817			24,958				12,200		6,059
FY 1998			19,014			23,968				10,081		5,127
FY 1997			18,018			22,133				9,154		5,039
FY 1996			9,022			14,301				10,473		5,194
OPERATING INCOME (LOSS):
FY 2001		$	(1,070	)	$	(542	)		$	117	$	(411	)
FY 2000			728			1,632				1,644		740
FY 1999			1,582			2,322				1,910		1,170
FY 1998			2,730			3,319				1,383		794
FY 1997			1,733			1,971				987		749
FY 1996			1,336			2,088				1,351		599

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.
	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 sold in the nine-months ended October 31, 2001 related to the repositioning 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 of

Page 8

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.

Page 9

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 $16.8 million at October 31, 2001 compared with $11.9 million one year earlier. Accounts receivable of $14.5 million decreased $4.8 million from October 31, 2000 due primarily to lower sales activity at Aerostar and the ceasing of production during October 2001 at the company’s Tacoma plant. Inventory levels of $18.6 million decreased $1.8 million from October 31, 2000 due primarily to lower sales levels in Aerostar’s specialty apparel products. At October 31, 2001, the company retained a $5.0 million line of credit and it’s Aerostar subsidiary retained an unused balance of $1.6 million on its $2.0 million seasonal line of credit. During the quarter ended July 31, 2001, the company repaid substantially all of its long-term debt originally due in June 2002 and June 2003. 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.

RESULTS OF OPERATIONS

Reported sales of $28.8 million for the quarter ended October 31, 2001 compared to $35.2 million in the third quarter of last year. Sales from the Plastic Tank division (contained in the “Businesses sold and for sale” segment) for 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 division and the Aerostar segment. These decreases were partially offset by an increase in the Flow Controls segment. Reported year-to-date sales of $87.9 million compared to sales of $100.6 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 operating income of $3.8 million for the third quarter and $10.1 million for the nine months ended October 31, 2001 were $186,000 and $2.1 million above the three and nine months ended October 31, 2000, respectively. The impact of lower 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-operating income for the quarter was the result of a higher net cash position and the associated lower interest expense and higher interest earned. The company’s income tax rate in the prior year reflects the write-off of $1.8 million of non-deductible goodwill. Earnings per share, on a diluted basis, for the three and nine month periods ended October 31, 2001 were $.53 and $1.43 per share, respectively, compared to $.34 and $.85 for the same periods one year earlier. Total average weighted diluted shares outstanding for the quarter ended October 31, 2001 were 4.7 million compared to 4.9 million in the previous year’s third quarter. For the nine months ended October 31, 2001 and October 31, 2000, average weighted diluted shares outstanding were 4.7 million and 5.3 million, respectively. The lower shares outstanding were primarily a result of the company’s treasury share repurchases.

The results for the quarter and nine-months ended October 31, 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, 2000 ongoing operation data has been restated to reflect the change 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 exclude the results of 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

Page 10

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 also 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 million to reposition the customer base in its electronics businesses and record severance costs for personnel in two sewing plants which closed in the fourth quarter of fiscal 2001.

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

(Dollars in thousands)	THREE MONTHS ENDED 10/31/2001									THREE MONTHS ENDED 10/31/2000
	As Reported			Adjust- ments			Ongoing Business			As Reported			Adjust- ments			Ongoing Business
Net sales	$	28,780		$	214		$	28,566		$	35,209		$	2,385		$	32,824
Gross profit		6,391			(65	)		6,456			3,735			(1,814	)		5,549
Operating expenses		2,683			27			2,656			3,295			277			3,018
Gain on sale of businesses and assets		54			54			—			3,136			3,136			—
Operating income		3,762			(38	)		3,800			3,576			1,045			2,531
Other (income) expense		(117	)		—			(117	)		(16	)		—			(16	)
Net income before taxes		3,879			(38	)		3,917			3,592			1,045			2,547
Income taxes		1,369			(13	)		1,382			1,929			1,020			909
Net income	$	2,510		$	(25	)	$	2,535		$	1,663		$	25		$	1,638

	NINE MONTHS ENDED 10/31/2001								NINE MONTHS ENDED 10/31/2000
	As Reported			Adjust- ments		Ongoing Business			As Reported			Adjust- ments			Ongoing Business
Net sales	$	87,909		$	3,274	$	84,635		$	100,556		$	14,015		$	86,541
Gross profit		17,929			60		17,869			14,966			(165	)		15,131
Operating expenses		8,252			100		8,152			10,076			1,156			8,920
Gain on sale of businesses and assets		399			399		—			3,136			3,136			—
Operating income		10,076			359		9,717			8,026			1,815			6,211
Other (income) expense		(375	)		—		(375	)		(19	)		(3	)		(16	)
Net income before taxes		10,451			359		10,092			8,045			1,818			6,227
Income taxes		3,689			127		3,562			3,532			1,309			2,223
Net income	$	6,762		$	232	$	6,530		$	4,513		$	509		$	4,004

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.

Page 11

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

	THREE MONTHS ENDED									NINE MONTHS ENDED
(dollars in thousands)	OCTOBER 31									OCTOBER 31
	2001			2000			Percent Change			2001			2000			Percent Change
NET SALES:
Electronic Systems	$	6,737		$	7,650			-12	%	$	22,982		$	22,665			1	%
Flow Controls		5,099			4,077			25	%		15,851			12,364			28	%
Engineered Films		10,562			11,128			-5	%		30,779			29,993			3	%
Aerostar		5,240			9,225			-43	%		12,807			18,992			-33	%
Beta Raven		928			744			25	%		2,216			2,527			-12	%
Total company	$	28,566		$	32,824			-13	%	$	84,635		$	86,541			-2	%
OPERATING INCOME (LOSS):
Electronic Systems	$	508		$	(163	)		412	%	$	1,397		$	142			884	%
Flow Controls		1,423			809			76	%		4,016			2,938			37	%
Engineered Films		2,822			2,642			7	%		7,956			6,817			17	%
Aerostar		326			909			-64	%		967			1,320			-27	%
Beta Raven		56			(123	)		146	%		(365	)		(174	)		-110	%
Administrative and general expenses		(1,335	)		(1,543	)		13	%		(4,254	)		(4,832	)		12	%
Total company	$	3,800		$	2,531			50	%	$	9,717		$	6,211			56	%

Sales from ongoing operations were $28.6 million for the quarter ended October 31, 2001, a decrease of $4.3 million from the previous third quarter sales. The decrease in sales was primarily due to the downsizing of the company’s Aerostar segment. Current fiscal year-to-date ongoing operation sales were $84.6 million versus $86.5 million for 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 income for the nine months ended October 31, 2001 was $1.4 million compared to $142,000 the previous year. As a result of this segment’s repositioning efforts in the prior year, operating income for the three and nine month periods reflected improved production efficiencies and better material management.

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PART I — FINANCIAL INFORMATION

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

Flow Controls sales 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 year as a result of increased demand for pit liners for the oil exploration market and foreign research balloons. Quarterly operating income increased to $2.8 million compared to $2.6 million recorded for the quarter ended October 31, 2000. Favorable material pricing offset the negative profit impact of lower sales. Operating income for the first nine months of fiscal 2002 of $8.0 million was 17% over the $6.8 million 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 sales of $5.2 million were $4.0 million below last year’s third quarter. Sales for the first nine months 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.

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.

Page 13

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.

Page 14

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 2. Changes in Securities: None

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. (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.

RAVEN INDUSTRIES, INC

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

Date: December 13, 2001