Back to GetFilings.com
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended January 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to __________________
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 (I.R.S. Employer
incorporation or organization) Identification No.)
205 E. 6th Street, Sioux Falls, South Dakota 57117
(Address of principal offices)(Zip Code)
Registrant's telephone number, including area code (605) 336-2750
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common stock, $1 par value NASDAQ National Market System
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by checkmark 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 twelve months, and (2) has been subject to such filing
requirements for the past ninety days.
Yes _X_ No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of voting stock held by nonaffiliates of the
Registrant, based on the closing price of $16.375 per share as reported on the
NASDAQ National Market System on April 15, 1996 was $68,726,399.
Shares of common stock outstanding at April 15, 1996: 4,716,076.
DOCUMENTS INCORPORATED BY REFERENCE
The following table shows, except as otherwise noted, the location of
information, required in this Form 10-K, in the registrant's Annual Report to
Shareholders for the year ended January 31, 1996 and Proxy Statement for
registrant's 1996 annual meeting, a definitive copy of which is to be filed on
April 17, 1996. All such information set forth under the heading "Reference"
herein below is incorporated herein by reference. A copy of the registrant's
Annual Report to Shareholders for the year ended January 31, 1996 is included in
this report.
PART I. ITEM IN FORM 10-K REFERENCE
Item 1. Business Business, pages 4-7, this
document and Business
Segments, page 12,
Annual Report to Share
holders
Item 2. Properties Properties, pages 8-9, this
document
Item 3. Pending Legal Pending Legal Proceedings,
Proceedings page 9, this document
Item 4. Submission of Matters Submission of Matters to a
to a Vote of Vote of Security
Security Holders Holders, page 9, this
document
PART II.
Item 5. Market for the Regis- Quarterly Summary, page 21,
trant's Common Eleven-year Financial
Equity and Related Summary, pages 14-15,
Stockholder Matters and inside back cover,
Annual Report to
Shareholders
Item 6. Selected Financial Data Eleven-Year Financial
Summary, pages 14-15,
Annual Report to
Shareholders
Item 7. Management's Discussion Financial Review and
and Analysis of Analysis, pages 16-20,
Financial Condition Annual Report to Share
and Results of holders
Operations
Item 8. Financial Statements and Annual Report to Share-
Supplementary Data holders, pages 22-31
Item 9. Changes in and Disagree- Changes in and Disagree-
ments with Account- ments with Accountants
ants on Accounting on Accounting and
and Financial Financial Disclosure,
Disclosure page 10, this document
PART III. ITEM IN FORM 10-K REFERENCE
Item 10. Directors of the Regis- Election of Directors and
trant Executive Compensation,
Proxy Statement
Executive Officers of Executive Officers of
the Registrant Registrant, page 10,
this document and other
matters, Proxy
Statement
Item 11. Executive Compensation Executive Compensation,
Proxy Statement
Item 12. Voting Securities and Ownership of Common Stock,
Principal Holders Proxy Statement
Thereof
Item 13. Certain Relationships Election of Directors,
and Related Proxy Statement
Transactions
PART IV.
Item 14. Exhibits, Financial Exhibits, Financial
Statement Schedule Statement Schedule
and Reports on Form and Reports on Form
8-K. 8-K, pages 10-12,
this document.
RAVEN INDUSTRIES, INC.
FORM 10-K
year ended January 31, 1996
Item 1. Business
General
Raven Industries, Inc. was incorporated in February 1956 under the laws
of the State of South Dakota and began operations later that same year. The
following terms - the company, Raven or the registrant - are intended to apply
to Raven Industries, Inc. and its consolidated subsidiaries listed in Exhibit 21
to this report. Raven is headquartered in Sioux Falls, South Dakota, employing
approximately 1,400 persons in seven states.
The company began operations as a manufacturer of high altitude
research balloons. It has diversified over the years to supply specialized
products for a number of markets, including industrial, recreation, agriculture,
automotive and defense. Many of these product lines are an extension of
technology and production methods developed in the original balloon business.
The automotive product lines were added via acquisition in fiscal 1987.
The company has three business segments: Electronics, Plastics and Sewn
Products. Product lines have been grouped in these segments based on common
technologies, production methods and raw materials. However, the product markets
identified above may be served by more than one business segment. Page 12 in the
company's Annual Report to Shareholders, incorporated herein by reference,
provides financial information concerning the three business segments.
Business Segments
Electronics - Historically, this segment has provided a wide variety of
assemblies and controls to the U.S. Department of Defense and other defense
contractors. The company is expanding this segment's capabilities in contract
electronics assembly for commercial customers to offset a continuing decline in
defense contracts. Assemblies manufactured by the Electronics segment include
communication, computer and other products where high quality is critical. Flow
control devices, used primarily for precision farming applications, are designed
and produced within this business segment. These devices are also used for
roadside and turf spraying. Management believes that acquisition of new
technologies for height and depth control will expand the company's capabilities
to support precision farming in future years. The segment also builds and
installs automated control systems for use in feedmills and bakery plants.
Defense and other contract electronics assembly sales are made in
response to competitive bid requests by defense agencies or other contractors.
The level and nature of competition varies with the type of product, but the
company frequently competes with a number of assembly manufacturers on any given
bid request. Flow control devices are mainly sold directly by home office
personnel to original equipment manufacturers (OEMs) and distributors. Company
sales representatives sell automated systems directly to feedmills and bakeries.
Considerable competition exists for feedmill business while the bakery systems
business is relatively new, with no established market.
Plastics - Segment products include heavy-duty sheeting for a number of
markets; fiberglass and polyethylene tanks for industrial and agricultural use;
high altitude balloons for public and commercial research and pickup-truck
toppers sold in the small truck aftermarket. Plastic sheeting is used as a
protective covering in construction, industrial and oilfield operations and
agriculture.
The company sells plastic sheeting to distributors in each of the
various markets it serves. There are several suppliers of sheeting in the U.S.,
competing on both price and product availability. The company believes it is one
of the largest sheeting converters. The company extrudes all of the films used
for producing high altitude balloons and a significant portion of the film
converted for other commercial uses. Storage tanks are sold both by home office
personnel and manufacturer's representatives, to OEMs and through distributors.
Competition comes not only from many other plastic tank manufacturers, but also
from manufacturers using other materials (aluminum and steel). The company makes
a number of custom fiberglass products, but polyethylene tanks tend to be
commodity products and subject to intense price competition.
Research balloons are sold directly to public agencies (usually funded
by NASA) or commercial users. Demand is small but stable. Raven is the largest
balloon supplier for high-altitude research in the United States. Pickup-truck
toppers are sold throughout the U.S. through a dealer network. The overall
market for toppers, which declined in the late 1980's and early 1990's as
alternatives to pickups with toppers, primarily minivans and sport utility
vehicles increased in popularity, has recovered due to strong sales of pickup
trucks. The number of topper manufacturers has fallen but is still substantial.
Sewn Products - This segment produces and sells outerwear for a wide
variety of recreational activities, including skiing, hunting and fishing. The
U.S. Department of Defense has also been a major customer of this segment,
purchasing decelerator devices and clothing, such as extreme-cold weather
uniforms and chemical protective suits. Military sales in this segment declined
significantly in fiscal 1995 and 1996 as the Company shifted its production
capacity to commercial products. The segment also manufactures sport balloons
principally for recreational use. Another major product is large inflatable
devices, which enjoy a number of uses, such as parade floats and advertising
media.
Recreational outerwear is sold both to retailers through an independent
sales representative network, and by home office personnel to catalog retailers.
There are numerous outerwear manufacturers in the U.S. and abroad and
considerable competition exists. The company competes successfully in the
medium-to-higher priced range of the market where specialty fabrics such as
GoreTex (R) are involved, emphasizing quality, service and manufacturing
expertise.
The segment sells balloons through a dealer network. Raven is the
originator of modern hot-air ballooning and continues to be a leader in design
and technical expertise. The company believes it has approximately 40 percent of
the U.S. hot-air balloon market, although others are able to compete with
lower-cost products. Inflatables are sold direct to corporate customers and are
subject to varying levels of competition, generally, the more customized the
product, the greater the company's market share.
Major Customer Information
No customer accounted for more than 10 percent of consolidated sales in
fiscal 1996. However, the company sells sewn products to several large
customers. In fiscal 1996, the top five customers in the Sewn Products segment
accounted for more than 60 percent of sales in that segment. Although the loss
of these accounts would adversely affect profitability, the company believes
that, over the long term, addition of new customers and sales growth from
existing customers would replace any lost sales.
Seasonality/Working Capital Requirements
Some seasonality in demand exists for the company's outerwear products,
many of which are built in spring/summer for summer/fall delivery. The majority
of these sales carry net 30 day terms, although some winter-dated terms are
available. Sales to the agricultural market (flow controls, plastic tanks) also
experience some seasonality, building in the fall for winter/spring delivery.
Some plastics and flow controls sales offer extended dating terms as well. The
resulting fluctuations in inventory and accounts receivable balances may require
and have required seasonal short-term financing.
Raw Materials
The company obtains a wide variety of materials from numerous vendors.
Principal materials include numerous electronic components for the Electronics
segment; various plastic resins for the Plastics segment; and fabric for the
Sewn Products segment. The company has not experienced any significant shortages
or other problems in purchasing raw materials to date, and alternative sources
of supply are generally available. However, it is impossible to predict future
material shortages and their impact on Raven.
Patents
The company owns a number of patents. However, Raven does not believe
that its business as a whole is materially dependent on any one patent or
related group of patents. It believes the successful manufacture and sale of its
products generally depend more upon its technical expertise and manufacturing
skills.
Research and Development
The industry segments noted above conduct ongoing research and
development efforts. The majority of the company's research and development
expenditures are directed towards new products in the Electronics and Plastics
segments. Total company research and development costs are disclosed in Note 1
to the consolidated financial statements located on page 25 of the Annual Report
to Shareholders, incorporated herein by reference.
Environmental Matters
Raven believes that it is in compliance in all material respects with
applicable federal, state and local environmental laws and regulations.
Expenditures relating to compliance for operating facilities incurred in the
past and anticipated in the future have not materially affected capital
expenditures, earnings or competitive position.
Backlog
As of February 1, 1996, the company's backlog of firm orders totaled
$32.5 million. Comparable backlog amounts as of February 1, 1995 and 1994 were
$29.7 million and $36.4 million, respectively.
Item 2. Properties
Location General Character Ownership
205 E. 6th Street 150,000 square feet, 6 stories, corporate offices In Fee
Sioux Falls, South Dakota and manufacturing facility for electronics and
sewn products
12 acres of land with buildings, (1) 59,120 square feet, building for research In Fee
located at Airbase, Sioux Falls, and hot-air balloon manufacturing
South Dakota
(2) 73,400 square feet, building for manufac- In Fee
ture and storage of plastic tank products
(3) 10,080 square feet, machine shop In Fee
10 acres of land with buildings, (1) 31,392 square feet, building for plastic In Fee
located at Airbase, Sioux Falls, tank manufacturing plus offices
South Dakota
(2) 52,500 square feet, building for extrusion In Fee
and manufacturing of plastic sheeting
(3) 20,450 square feet, building for inflatable In Fee
manufacturing
200 E. 6th Street 29,000 square feet, offices and sewing facility In Fee*
Sioux Falls, South Dakota
196 E. 6th Street 68,000 square feet, sewn products warehouse In Fee
Sioux Falls, South Dakota building
100 E. 6th Street 6,200 square feet, training/meeting center In Fee
Sioux Falls, South Dakota
Dunnell, Minnesota 83,800 square feet, three buildings, for pickup In Fee
topper offices, manufacturing plant and truck
maintenance shop
Eloy, Arizona 51,600 square feet, pickup truck topper In Fee
manufacturing plant
St. Louis, Missouri 21,000 square feet, electronic control systems In Fee**
sales and manufacturing plant
Albertville, Alabama 39,000 square feet, plastic tank manufacturing In Fee
plant
Gordo, Alabama 21,000 square feet, feed and bakery mixing Leased,
and weighing device manufacturing Short-
term
Springfield, Ohio 22,500 square feet, reinforced plastic sheeting Leased,
sales and manufacturing plant Short-
term
5 acres of land located at Construction site for 30,000 square feet reinforced In Fee
Springfield, Ohio plastic sheeting manufacturing plant to be completed
in 1997.
Washington Court House, Ohio 22,000 square feet, plastic tank manufacturing plant In Fee*
plus 3,150 square feet sheltered outside storage
6.95 acres of land located at Undeveloped land adjacent to other Company In Fee
Airbase, Sioux Falls, South Dakota property
Beresford, South Dakota 20,000 square feet, sewing plant Leased,
Short-
term
Huron, South Dakota 24,100 square feet, sewing plant In Fee*
Parkston, South Dakota 14,000 square feet, sewing plant In Fee
Salem, South Dakota 15,000 square feet, sewing plant In Fee
DeSmet, South Dakota 15,000 square feet, sewing plant In Fee
Madison, South Dakota 20,000 square feet, sewing plant In Fee*
*Subject to repayment of mortgage
**Subject to repayment of Industrial
Revenue Bonds
The company believes that its properties are in good condition and are adequate
for the present needs of its business.
Item 3. Pending Legal Proceedings
There are no pending legal proceedings wherein the claim for damages exceeds 10%
of the registrant's current assets.
Item 4. Submission of Matters to a Vote of Security Holders
There was no matter submitted during the fourth quarter to a vote of security
holders.
Item 9. Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure
None
Item 10. Executive Officers of the Registrant
Name Age Position Period Served
David A. Christensen 61 President and Chief April 1971 to present
Executive Officer
Gary L. Conradi 56 Vice President, January 1980 to present
Corporate Services
Ronald M. Moquist 50 Executive Vice January 1979 to present
President
Arnold J. Thue 57 Vice President, January 1980 to present
Finance,Secretary
and Treasurer
Each of the above named individuals serves at the pleasure of the Board of
Directors. Each serves on a year-to-year basis.
Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K
(a) Consolidated Financial Statements and Schedule
1. Incorporated by reference from the attached 1996
Annual Report to Shareholders:
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Accountants
2. Included in Part II:
Report of Independent Accountants on Financial
Statement Schedule
Schedule II - Valuation and Qualifying Accounts
The following schedules are omitted for the reason that
they are not applicable or are not required: I, III and
IV.
(b) Reports on Form 8-K
There were no reports filed on Form 8-K during the fourth
quarter ended January 31, 1996.
(c) Exhibits filed
Exhibit
Number Description
3(a) Articles of Incorporation of Raven Industries, Inc.
and all amendments thereto.*
3(b) By-Laws of Raven Industries, Inc.*
3(c) Extract of Shareholders Resolution adopted on April
7, 1962 with respect to the by-laws of Raven
Industries, Inc.*
4(a) Rights Agreement dated as of March 16, 1989 between
Raven Industries, Inc. and Norwest Bank Minnesota,
National Association (incorporated by reference to
Exhibit 1 to the Company's Report on Form 8-K dated
March 16, 1989).
10(a) Change in Control Agreement between Raven Industries,
Inc. and David A. Christensen dated as of March 17,
1989.*
10(b) Change in Control Agreement between Raven Industries,
Inc. and Gary L. Conradi dated as of March 17, 1989.*
10(c) Change in Control Agreement between Raven Industries,
Inc. and Ronald M. Moquist dated as of March 17,
1989.*
10(d) Change in Control Agreement between Raven Industries,
Inc. and Arnold J. Thue dated as of March 17, 1989.*
10(f) The Raven Industries, Inc. Health and Survivor
Benefit Plan.*
10(g) The Raven Industries, Inc. Post-Retirement Health and
Survivor Benefit Plan.*
10(h) Deferred Compensation Plan between Raven Industries,
Inc. and David A. Christensen dated as of June 1,
1986.*
10(i) Trust Agreement between Raven Industries, Inc. and
Norwest Bank South Dakota, N.A. dated April 26,
1989.*
10(n) Form of Incentive Stock Option Agreements.*
10(o) Form of Nonqualified Stock Option Agreements.*
10(p) Form of Amendment Agreement relating to outstanding
Incentive Stock Options.*
10(q) Raven Industries, Inc. 1990 Stock Option Plan adopted
January 30, 1990 (incorporated by reference to
Exhibit A to the Company's definitive Proxy Statement
filed April 25, 1990).
11 Detailed Computation of Earnings per Share.
13 1996 Annual Report to Shareholders (only those
portions specifically incorporated herein by
reference shall be deemed filed with the Commission).
21 Subsidiaries of the Registrant.
23 Consent of Independent Accountants.
27 Financial Data Schedule (for S.E.C. only).
* Incorporated by reference to corresponding Exhibit
Number of the Company's Form 10-K for the year ended
January 31, 1989.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
(Registrant)
April 17, 1996 By: /S/ David A. Christensen
Date David A. Christensen
President (Principal Executive
Officer and Director)
Pursuant to the requirements of Section 13 or 15(d) 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.
April 17, 1996 By: /S/ David A. Christensen
Date David A. Christensen
President (Principal Executive
Officer and Director)
April 17, 1996 /S/ Arnold J. Thue
Date Arnold J. Thue
Vice President, Finance,
Secretary and Treasurer
(Principal Financial and
Accounting Officer)
Directors:
April 17, 1996 /S/ Conrad J. Hoigaard
Date Conrad J. Hoigaard
April 17, 1996 /S/ John C. Skoglund
Date John C. Skoglund
April 17, 1996 /S/ Mark E. Griffin
Date Mark E. Griffin
April 17, 1996 /S/ Kevin T. Kirby
Date Kevin T. Kirby
April 17, 1996 /S/ Anthony W. Bour
Date Anthony W. Bour
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Stockholders of
Raven Industries, Inc.:
Our report on the consolidated financial statements of Raven
Industries, Inc. and Subsidiaries has been incorporated by reference in this
Form 10-K from page 32 of the 1996 Annual Report to Shareholders of Raven
Industries, Inc. In connection with our audits of such financial statements, we
have also audited the related financial statement schedule listed in Item
14.(a)2. on page 10 of this Form 10-K.
In our opinion, the financial statement schedule referred to above,
when considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND L.L.P.
Minneapolis, Minnesota
March 7, 1996
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
for the years ended January 31, 1996, 1995 and 1994
(Dollars in thousands)
Column A Column B Column C Column D Column E
-------- ---------- ------------------------ ----------- --------
Additions
------------------------
Balance at Charged to Charged to Deductions
Beginning Costs and Other From Balance at
Description of Year Expenses Accounts Reserves(1) End of Year
Deducted in the balance sheet
from the asset to which it
applies:
Allowance for doubtful
accounts:
Year ended January 31, 1996 $350 $ 68 None $ 78 $340
==== ==== ==== ====
Year ended January 31, 1995 $350 $135 None $135 $350
==== ==== ==== ====
Year ended January 31, 1994 $335 $180 None $165 $350
==== ==== ==== ====
Note:
(1) Represents uncollectible accounts receivable written off during the
year, net of recoveries.