Art's-Way Manufacturing Reports Significant Declines in Revenue and Profitability for Q3 and Nine Months Ended August 31, 2024

Art’s-Way Manufacturing Co., Inc. reported significant declines in revenue and profitability for the three and nine months ended August 31, 2024, compared to the same periods in the previous fiscal year. Total sales for the third quarter were $5.9 million, a decrease of 27.6% from $8.1 million in Q3 2023. For the nine-month period, sales fell to $18.3 million, down 21.8% from $23.4 million in the prior year. The decline was primarily attributed to a substantial drop in the Agricultural Products segment, which saw sales decrease by 46% in Q3 and 32.1% year-to-date.

Despite a slight increase in sales from the Modular Buildings segment, which rose by 11.6% in Q3 and 7.6% for the nine months, the overall performance was negatively impacted by the Agricultural Products segment's downturn. Gross profit for the three months ended August 31, 2024, was $1.7 million, down from $2.3 million in the same quarter of 2023. For the nine months, gross profit decreased to $5.1 million from $6.7 million.

The company reported a net loss of $26,200 for Q3 2024, an improvement from a loss of $74,030 in Q3 2023. However, for the nine months, the net loss was $524,552, contrasting sharply with a net income of $574,845 in the same period last year. The loss from continuing operations before income taxes for Q3 2024 was $(483), compared to a profit of $304,903 in Q3 2023.

Art’s-Way Manufacturing has also undergone strategic changes, including the discontinuation of its Tools segment, which ceased operations in Q3 2023. The company is in the process of selling real estate associated with this segment for approximately $1.8 million, expected to close in mid-October 2024. The Tools segment reported no revenue for the three months ended August 31, 2024, and a gross loss of $(22,000).

Financially, total current assets decreased to $14.0 million as of August 31, 2024, from $15.1 million at the end of November 2023. Total assets also declined to $23.5 million from $24.4 million. The company’s total stockholders’ equity fell to $11.3 million from $11.6 million during the same period.

Art’s-Way continues to face challenges, including increased credit risk due to current economic conditions, but has reported positive cash flow from operating activities, particularly from the Modular Buildings segment. The company’s order backlog as of October 3, 2024, showed a mixed picture, with a significant decrease in the Agricultural Products backlog but a substantial increase in the Modular Buildings backlog.