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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2021
OR
 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: 001-07982
RAVEN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
SD46-0246171
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
205 East 6th Street, P.O. Box 5107Sioux Falls,SD 57117-5107
(Address of principal executive offices)
(605336-2750
(Registrant’s telephone number including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $1 par valueRAVNNASDAQGlobal Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.             þ Yes o No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).                             þ Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer  Accelerated filer
Non-accelerated filer Smaller reporting company
 Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes þ No
As of August 20, 2021, there were 35,917,637 shares of common stock, $1 par value, of Raven Industries, Inc. outstanding. There were no other classes of stock outstanding.




RAVEN INDUSTRIES, INC.
INDEX
 PAGE
PART I - FINANCIAL INFORMATION
 
  
Item 1. Financial Statements:
 
Consolidated Balance Sheets (unaudited)
Consolidated Statements of Income and Comprehensive Income (unaudited)
Consolidated Statements of Cash Flows (unaudited)
Notes to Consolidated Financial Statements (unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risks
Item 4. Controls and Procedures
  
PART II - OTHER INFORMATION
 
  
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
Signatures




PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RAVEN INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(dollars and shares in thousands, except per-share data)July 31,
2021
January 31,
2021
ASSETS
Current assets
Cash and cash equivalents$13,077 $32,938 
Accounts receivable, net70,591 48,669 
Inventories, net75,692 52,703 
Other current assets8,550 5,776 
Total current assets167,910 140,086 
Property, plant and equipment, net108,883 106,007 
Goodwill108,574 107,677 
Intangible assets, net47,470 44,585 
Other assets11,395 11,016 
TOTAL ASSETS$444,232 $409,371 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable$21,588 $18,639 
Accrued liabilities39,173 30,401 
Other current liabilities5,088 2,998 
Total current liabilities65,849 52,038 
Long-term debt2,849 1,981 
Other liabilities23,010 23,997 
Total liabilities91,708 78,016 
Commitments and contingencies (see Note 11)
Shareholders' equity
Common stock, $1 par value, authorized shares 100,000; issued 67,583 and 67,533, respectively
67,583 67,533 
Additional paid-in capital69,910 66,670 
Retained earnings328,149 311,676 
Accumulated other comprehensive loss(1,935)(3,341)
Treasury stock at cost, 31,665 and 31,665 shares, respectively
(111,183)(111,183)
Total shareholders' equity352,524 331,355 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$444,232 $409,371 

The accompanying notes are an integral part of the unaudited consolidated financial statements.
3

RAVEN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(unaudited)
Three Months EndedSix Months Ended
(dollars in thousands, except per-share data)July 31,
2021
July 31,
2020
July 31,
2021
July 31,
2020
Net sales$114,426 $85,179 $226,912 $171,675 
Cost of sales72,257 55,047 144,757 113,076 
Gross profit42,169 30,132 82,155 58,599 
Research and development expenses12,465 10,808 23,927 21,313 
Selling, general, and administrative expenses21,370 13,181 38,321 27,204 
Operating income 8,334 6,143 19,907 10,082 
Other income (expense), net(276)377 (246)(91)
Income before income taxes8,058 6,520 19,661 9,991 
Income tax expense1,205 701 3,188 223 
Net income 6,853 5,819 16,473 9,768 
Net loss attributable to redeemable noncontrolling interest   (98)
Net income attributable to Raven Industries, Inc.$6,853 $5,819 $16,473 $9,866 
Net income per common share:
─ Basic$0.19 $0.16 $0.46 $0.27 
─ Diluted$0.19 $0.16 $0.45 $0.27 
Comprehensive income:
Net income$6,853 $5,819 $16,473 $9,768 
Other comprehensive income (loss):
Foreign currency translation(978)1,868 1,366 (711)
Postretirement benefits, net of income tax (expense) benefit $(6), $1 and $(11) and $2, respectively
20 (2)40 (5)
Other comprehensive income (loss), net of tax(958)1,866 1,406 (716)
Comprehensive income5,895 7,685 17,879 9,052 
Comprehensive loss attributable to redeemable noncontrolling interest
   (98)
Comprehensive income attributable to Raven Industries, Inc.
$5,895 $7,685 $17,879 $9,150 

The accompanying notes are an integral part of the unaudited consolidated financial statements.
4

RAVEN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(unaudited)
Three Months Ended July 31, 2021
$1 Par Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Equity
(dollars in thousands, except per-share amounts)Treasury Stock at Cost
Balance April 30, 2021
$67,583 $67,266 $(111,183)$321,296 $(977)$343,985 
Net income — — — 6,853 — 6,853 
Other comprehensive income (loss):
Cumulative foreign currency translation adjustment
— — — — (978)(978)
Postretirement benefits reclassified from accumulated other comprehensive income (loss) after tax expense of $(6)
— — — — 20 20 
Share-based compensation— 2,644 — — — 2,644 
Balance July 31, 2021
$67,583 $69,910 $(111,183)$328,149 $(1,935)$352,524 
Six Months Ended July 31, 2021
$1 Par Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Equity
(dollars in thousands, except per-share amounts)Treasury Stock at Cost
Balance January 31, 2021$67,533 $66,670 $(111,183)$311,676 $(3,341)$331,355 
Net income — — — 16,473 — 16,473 
Other comprehensive income (loss):
Cumulative foreign currency translation adjustment
— — — — 1,366 1,366 
Postretirement benefits reclassified from accumulated other comprehensive income (loss) after tax expense of $(11)
— — — — 40 40 
Shares issued on stock options exercised, net of shares withheld for employee taxes
1 (42)— — — (41)
Shares issued on vesting of stock units, net of shares withheld for employee taxes
49 (1,096)— — — (1,047)
Share-based compensation— 4,378 — — — 4,378 
Balance July 31, 2021
$67,583 $69,910 $(111,183)$328,149 $(1,935)$352,524 

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









5

RAVEN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(unaudited)
Three Months Ended July 31, 2020
$1 Par Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total EquityRedeemable Non-Controlling Interest
(dollars in thousands, except per-share amounts)Treasury Stock at Cost
Balance April 30, 2020$67,500 $62,505 $(111,183)$301,599 $(7,997)$312,424 $ 
Net income— — — 5,819 — 5,819  
Other comprehensive income (loss):
Cumulative foreign currency translation adjustment
— — — — 1,868 1,868 — 
Postretirement benefits reclassified from accumulated other comprehensive income (loss) after tax benefit of $1
— — — — (2)(2)— 
Cash dividends ($0.13 per share)
— 93 — (4,753)— (4,660)— 
Shares issued on vesting of stock units, net of shares withheld for employee taxes
1 (12)— — — (11)— 
Director shares issued9 (9)— — —  — 
Share-based compensation— 2,113 — — — 2,113 — 
Balance July 31, 2020$67,510 $64,690 $(111,183)$302,665 $(6,131)$317,551 $ 
Six Months Ended July 31, 2020
$1 Par Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total EquityRedeemable Non-Controlling Interest
(dollars in thousands, except per-share amounts)Treasury Stock at Cost
Balance January 31, 2020$67,436 $61,508 $(111,183)$302,300 $(5,415)$314,646 $21,302 
Net income (loss)— — — 9,866 — 9,866 (98)
Other comprehensive income (loss):
Cumulative foreign currency translation adjustment
— — — — (711)(711)— 
Postretirement benefits reclassified from accumulated other comprehensive income (loss) after tax benefit of $2
— — — — (5)(5)— 
Reclassification and redemption of noncontrolling interest (see Note 1)— 215 — — — 215 (21,204)
Cash dividends ($0.26 per share)
— 183 — (9,501)— (9,318)— 
Shares issued on stock options exercised, net of shares withheld for employee taxes
11 (124)— — — (113)— 
Shares issued on vesting of stock units, net of shares withheld for employee taxes
54 (692)— — — (638)— 
Director share issued9 (9)— — —  — 
Share-based compensation— 3,609 — — — 3,609 — 
Balance July 31, 2020$67,510 $64,690 $(111,183)$302,665 $(6,131)$317,551 $ 

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

6

RAVEN INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended
(dollars in thousands)July 31,
2021
July 31,
2020
OPERATING ACTIVITIES:
Net income$16,473 $9,768 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization9,100 8,478 
Change in fair value of acquisition-related contingent consideration (212)
Deferred income taxes(2,521)(2,392)
Share-based compensation expense4,378 3,609 
Other operating activities, net266 (237)
Change in operating assets and liabilities:
Accounts receivable(22,053)8,669 
Inventories(22,959)(204)
Other assets(3,023)(420)
Operating liabilities15,226 3,525 
Net cash provided by (used in) operating activities(5,113)30,584 
INVESTING ACTIVITIES:
Capital expenditures(10,044)(7,783)
Proceeds from sale or maturities of investments83 -4171000.00336 
Purchases of investments(733)(146)
Proceeds from sale of assets263 251 
Purchases of other intangibles(1,964) 
Other investing activities(1,820)24 
Net cash used in investing activities(14,215)(7,318)
FINANCING ACTIVITIES:
Dividends paid (9,318)
Proceeds from debt10,815 50,150 
Repayments of debt(10,000)-11580000.00(50,000)
Payments for redeemable noncontrolling interest (17,853)
Tax withholding on vesting of restricted stock(1,047)(638)
Employee stock option exercises, net of shares withheld for employee taxes(41)(113)
Other financing activities(212)(208)
Net cash used in financing activities(485)(27,980)
Effect of exchange rate changes on cash(48)(180)
Net decrease in cash and cash equivalents(19,861)(4,894)
Cash and cash equivalents at beginning of year32,938 20,707 
Cash and cash equivalents at end of period$13,077 $15,813 
Significant non-cash transactions:
Capital expenditures converted from inventories$ $2,774 

The accompanying notes are an integral part of the unaudited consolidated financial statements.
7


RAVEN INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(dollars in thousands, except per-share amounts)

(1) BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

Raven Industries, Inc. ("the Company" or "Raven") is a diversified technology company providing a variety of products to customers within the industrial, agricultural, geomembrane, construction, commercial lighter-than-air, and aerospace and defense markets. The Company is comprised of three unique operating units, or divisions, classified into reportable business segments: Applied Technology, Engineered Films, and Aerostar.

The accompanying interim unaudited consolidated financial statements, which includes the accounts of Raven and its wholly-owned or controlled subsidiaries, net of intercompany balances and transactions, has been prepared by the Company in accordance with generally accepted accounting principles in the United States (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (SEC). Accordingly, these financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary to fairly present this financial information have been included. These financial statements should be read in conjunction with the audited consolidated financial statements and the accompanying notes included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2021.

Financial results for the interim three and six-month periods ended July 31, 2021, are not necessarily indicative of the results that may be expected for the year ending January 31, 2022. The January 31, 2021, consolidated balance sheet was derived from audited financial statements but does not include all disclosures required in an annual report on Form 10-K. Preparing financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Proposed Transaction with CNH Industrial N.V.
On June 20, 2021, the Company entered into an Agreement and Plan of Merger ("Merger Agreement") with CNH Industrial N.V., a Netherlands public limited liability company (“CNH Industrial”). Under the terms of the agreement, CNH Industrial will acquire 100% of the capital stock of Raven for $58.00 per share. The merger is subject to shareholder approval, as well as to customary closing conditions, including regulatory approvals, and is expected to close in the fourth quarter of fiscal year 2022.

The Company incurred $4,863 and $5,163 of merger-related expenses in the three- and six-month period ended July 31, 2021. These costs relate primarily to professional service fees in connection with the proposed merger. The costs incurred are reported as "Selling, general, and administrative expenses" in the Consolidated Statements of Income and Comprehensive Income.

Risks and Uncertainties (COVID-19)
The COVID-19 pandemic has had, and may continue to have, an unfavorable impact on certain areas of the Company's business. Economic conditions have continued to improve during the six-months ended July 31, 2021, however, the broader implications of the COVID-19 pandemic on the Company's financial condition and results of operations remain uncertain, and will depend on certain developments, including the effectiveness of vaccines to address the COVID-19 virus, as well as potential variants or further spread of the virus. The pandemic's ongoing impact to the Company's customers and suppliers remains uncertain. The Company may continue to experience supply chain constraints that hampers the Company's ability to fulfill orders on time or reduced customer demand in certain markets could materially and adversely impact business, financial condition, results of operations, liquidity and cash flows in future periods.

Redeemable Noncontrolling Interest
The Company acquired a majority ownership in Dot Technology Corp. (DOT) in the fourth quarter of fiscal 2020. DOT, located in Regina, Saskatchewan, Canada, designs autonomous agriculture solutions and manufactures an agriculture platform to semi-autonomously handle a large variety of agriculture implements. The acquisition provided noncontrolling interest shareholders various put options that, if exercised, obligated the Company to purchase their outstanding DOT shares. Due to the redemption features provided to the minority shareholders in the acquisition, the 36% remaining noncontrolling interest was classified as a redeemable noncontrolling interest in the Company’s Consolidated Balance Sheets as of January 31, 2020. During the second quarter of fiscal 2021, the Company closed on the transaction to purchase the shares of the largest minority interest shareholder for $17,853, giving the Company full voting control of DOT. The remaining redeemable amount, as well as
8


(dollars in thousands, except per-share amounts)

the liability for the noncontrolling interest redeemed in fiscal year 2020, totaling approximately $5,352, is payable in November 2021 and is classified as "Accrued Liabilities" in the Consolidated Balance Sheet at July 31, 2021.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

There have been no material changes to the Company's significant accounting policies as described in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2021, other than described below.
Software Development Costs
The Company capitalizes certain software development costs related to software to be sold, included in core autonomous products, or otherwise marketed. Capitalized software development costs include purchased materials and services, salary and benefits of our development and engineering staff, and other costs associated with the development of new products. Software development costs are expensed as incurred until technological feasibility has been established, at which time future costs incurred are capitalized until the product is available for general release to the public. Based on our product development process, technological feasibility is generally established once product and detailed program designs have been completed, uncertainties related to high-risk development issues have been resolved through coding and testing, and the Company has the capability to manufacture the end product. Once a software product is available for general release to the public, capitalized development costs associated with that product will begin to be amortized to "Cost of Sales" in the Consolidated Statements of Income and Comprehensive Income over the product's estimated economic life, using the greater of straight-line or a method that results in cost recognition in future periods that is consistent with the anticipated timing of product revenue recognition.
The capitalized software development costs are subject to an ongoing assessment of recoverability, which is impacted by estimates and assumptions of future revenues and expenses for these software products, as well as other factors such as changes in product technologies. Any portion of unamortized capitalized software development costs that is determined to be in excess of net realizable value is expensed in the period such a determination is made. The gross carrying amount of software development costs was $1,439 and $0 at July 31, 2021 and January 31, 2021 respectively and is reported in "Intangible Assets, net" on the Consolidated Balance Sheets. No amortization expense was recorded in the three- and six-month periods ended July 31, 2021.

Accounting Pronouncements
Accounting Standards Adopted
There are no significant Accounting Standard Updates (ASU's) issued that were adopted in the six-month period ended July 31, 2021.

New Accounting Standards Not Yet Adopted
There are no significant ASU's issued and not yet adopted as of July 31, 2021.
9


(dollars in thousands, except per-share amounts)

(3) SELECTED BALANCE SHEET INFORMATION

Following are the components of selected items from the Consolidated Balance Sheets:
July 31, 2021January 31, 2021
Accounts receivable, net:
Trade accounts$71,413 $47,879 
Unbilled receivables 1,084 2,734 
Allowance for credit losses(1,906)(1,944)
$70,591 $48,669 
Inventories, net:
Finished goods$12,788 $7,684 
In process1,849 759 
Materials61,055 44,260 
$75,692 $52,703 
Other current assets:
Income tax receivable$701 $1,440 
Prepaid expenses and other7,849  4,336 
$8,550 $5,776 
Property, plant and equipment, net:(a)
Land$3,117 $3,117 
Buildings and improvements87,444 84,651 
Machinery and equipment176,381 169,252 
Financing lease right-of-use assets1,561 1,282 
268,503 258,302 
Accumulated depreciation(159,620)(152,295)
$108,883 $106,007 
Other assets:
Equity investments$1,835 $1,595 
Operating lease right-of-use assets5,816 6,850 
Deferred income taxes2,038 360 
Other1,706 2,211 
$11,395 $11,016 
Accrued liabilities:
Salaries and related$6,953 $4,881 
Benefits6,597 6,255 
Insurance obligations1,700 1,896 
Warranties3,085 2,068 
Income taxes1,370 238 
Other taxes1,996 2,386 
Acquisition-related contingent consideration2,000 2,000 
Lease liability1,916 2,482 
Other13,556 8,195 
$39,173 $30,401 
Other liabilities:
Postretirement benefits$9,012 $8,996 
Lease liability4,898 5,426 
Deferred income taxes1,345 2,091 
Uncertain tax positions2,823 2,692 
Other4,932 4,792 
$23,010 $23,997 
(a) Includes assets held for use and assets held for sale. The amount of assets held for sale at July 31, 2021, and January 31, 2021, were not material.
10


(dollars in thousands, except per-share amounts)

(4) NET INCOME PER SHARE

Basic net income per share is computed by dividing net income by the weighted average common shares and fully vested 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), stock units, and restricted stock units outstanding. Performance share awards are included in the diluted calculation based upon what would be issued if the end of the most recent reporting period was the end of the term of the award.
Certain outstanding options and restricted stock units were excluded from the diluted net income per share calculations because their effect would have been anti-dilutive under the treasury stock method. The options and restricted stock units excluded from the diluted net income per share calculation were as follows:
Three Months EndedSix Months Ended
July 31,
2021
July 31,
2020
July 31,
2021
July 31,
2020
Anti-dilutive options and restricted stock units934 321,613610321,534

The computation of earnings per share is presented below:
Three Months EndedSix Months Ended
July 31,
2021
July 31,
2020
July 31,
2021
July 31,
2020
Numerator:
Net income attributable to Raven Industries, Inc.$6,853 $5,819 $16,473 $9,866 
Denominator:
Weighted average common shares outstanding35,917,637 35,838,509 35,901,540 35,818,224 
Weighted average fully vested stock units outstanding167,874 157,488 159,923 143,580 
Denominator for basic calculation36,085,511 35,995,997 36,061,463 35,961,804 
Weighted average common shares outstanding35,917,637 35,838,509 35,901,540 35,818,224 
Weighted average fully vested stock units outstanding167,874 157,488 159,923 143,580 
Dilutive impact of stock options and restricted stock units384,432 85,991 385,952 117,485 
Denominator for diluted calculation36,469,943 36,081,988 36,447,415 36,079,289 
Net income per share ─ basic$0.19 $0.16 $0.46 $0.27 
Net income per share ─ diluted$0.19 $0.16 $0.45 $0.27 

11


(dollars in thousands, except per-share amounts)

(5) REVENUE
Disaggregation of Revenues
Revenue is disaggregated by major product category and geography, as we believe these categories best depict how the nature, amount, timing, and uncertainty of our revenue and cash flows are affected by economic factors. The following table includes a reconciliation of the disaggregated revenue by reportable segments. Service revenues are not material and are not separately disclosed.
Revenue by Product Category
Three Months Ended July 31, 2021Three Months Ended July 31, 2020
ATDEFDAERO
ELIM(a)
TotalATDEFDAERO
ELIM(a)
Total
Lighter-than-Air
Domestic$— $— $9,479 $— $9,479 $— $— $10,008 $— $10,008 
International— —  —  — — 34 — 34 
Plastic Films &
  Sheeting
Domestic— 52,337 — (49)52,288 — 32,478 — (38)32,440 
International— 4,750 —  4,750 — 3,774 —  3,774 
Precision Agriculture
  Equipment
Domestic32,209 — —  32,209 28,000 — — (2)27,998 
International12,392 — — — 12,392 7,502 — — — 7,502 
Other
Domestic— — 3,306 — 3,306 — — 3,423 — 3,423 
International— — 2 — 2 — —  —  
Totals$44,601 $57,087 $12,787 $(49)$114,426 $35,502 $36,252 $13,465 $(40)$85,179 
Six Months Ended July 31, 2021Six Months Ended July 31, 2020
ATDEFDAERO
ELIM(a)
TotalATDEFDAERO
ELIM(a)
Total
Lighter-than-Air
    Domestic$— $— $13,978 $— $13,978 $— $— $16,090 $— $16,090 
    International— — 597 — 597 — — 46 — 46 
Plastic Films & Sheeting
    Domestic— 97,739 — (83)97,656 — 63,034 — (98)62,936 
    International— 8,113 —  8,113 — 6,616 —  6,616 
Precision Agriculture Equipment
    Domestic67,861 — —  67,861 58,861 — — (2)58,859 
    International31,608 — — — 31,608 18,648 — — — 18,648 
Other
    Domestic— — 7,073 — 7,073 — — 8,475 — 8,475 
    International— — 26 — 26 — — 5 — 5 
Totals$99,469 $105,852 $21,674 $(83)$226,912 $77,509 $69,650 $24,616 $(100)$171,675 
(a) Intersegment sales for both fiscal 2022 and 2021 were primarily sales from Engineered Films to Aerostar.

Contract Balances
Contract balances consist of contract assets and contract liabilities. Contract assets primarily relate to the Company’s rights to consideration for work completed but not yet billed for at the reporting date, or retainage provisions on billings that have been issued. Contract liabilities primarily relate to consideration received from customers prior to transferring goods or services to the customer. Contract assets and contract liabilities are reported in "Accounts receivable, net" and "Other current liabilities" in
12


(dollars in thousands, except per-share amounts)

the Consolidated Balance Sheets, respectively. 

During the six months ended July 31, 2021, the Company’s contract assets decreased by $1,679 while contract liabilities increased $2,090. The change was primarily a result of the contract terms which include timing of customer payments, timing of invoicing, and progress made on open contracts. Due to the short-term nature of the Company’s contracts, substantially all contract liabilities are recognized as revenue during the twelve months thereafter. Changes in our contract assets and liabilities were as follows:
July 31,
2021
January 31,
2021
$ Change% Change
Contract assets$1,577 $3,256 $(1,679)(51.6)%
Contract liabilities$5,088 $2,998 $2,090 69.7 %

Remaining Performance Obligations
As of July 31, 2021, the Company has no remaining performance obligations related to customer contracts with an original expected duration of one year or more. Revenue recognized from performance obligations satisfied in the prior period during the six-month period ending July 31, 2021, were not material.

(6) ACQUISITIONS AND INVESTMENTS IN BUSINESSES AND TECHNOLOGIES

Fiscal year 2022 and 2021
There were no material business acquisitions in the three- and six-month periods ended July 31, 2021 and July 31, 2020, respectively.

Acquisition-related Contingent Consideration
The Company has a contingent liability related to the acquisition of AgSync, Inc. (AgSync) in fiscal 2019. The Company also had contingent liabilities related to the acquisitions of Colorado Lining International, Inc. (CLI) in fiscal 2018; and Raven Europe B.V. (Raven Europe), formerly named SBG Innovatie BV and its affiliate Navtronics BVBA (collectively, SBG), in fiscal 2015; which were settled in the second and third quarters of the prior fiscal year, respectively. The fair value of such contingent consideration is estimated as of the acquisition date, and subsequently at the end of each reporting period, using forecasted cash flows. Projecting future cash flows requires the Company to make significant estimates and assumptions regarding future events, conditions, or revenues being achieved under the particular contingent agreement as well as the appropriate discount rate. Such valuation techniques include one or more significant inputs that are not observable (Level 3 fair value measures).

Changes in the fair value of the liability for acquisition-related contingent consideration are as follows:

Three Months EndedSix Months Ended
July 31,
2021
July 31,
2020
July 31,
2021
July 31,
2020
Beginning balance$2,000 $2,778 $2,000 $2,934 
Change in fair value of the liability
 (157) (212)
Contingent consideration earn-out paid
 (162) (263)
Ending balance$2,000 $2,459 $2,000 $2,459 
Classification of liability in the consolidated balance sheet
Accrued liabilities
$2,000 $233 $2,000 $233 
Other liabilities, long-term
 2,226  2,226 
Balance at July 31
$2,000 $2,459 $2,000 $