Exhibit 99.1 FOR IMMEDIATE RELEASE February 4, 2026 ART'S WAY REPORTS FISCAL 2025 RESULTS, DELIVERS IMPROVED PROFITABILITY AND POSTIVE NET INCOME DRIVEN BY STRONG MODULAR BUILDINGS PERFORMANCE ARMSTRONG, IOWA, February 4, 2026 – Art's Way Manufacturing Co., Inc. (Nasdaq: ARTW) (the "Company"), a diversified manufacturer and distributor of equipment serving agricultural and research needs, announces its financial results for fiscal 2025. | | | For the Twelve Months Ended | | | --- | --- | --- | --- | | | | ( ...

ARMSTRONG, IA / ACCESS Newswire / February 4, 2026 / Art's Way Manufacturing Co., Inc. (Nasdaq:ARTW) (the "Company"), a diversified manufacturer and distributor of equipment serving agricultural and research needs, announces its financial results for fiscal 2025. Marc McConnell, the Company's President, CEO, and Chairman, reports, "Despite another year of significant market challenges and uncertainty, I am pleased with the progress we made as a company in 2025 building the Company for future growth in both ...

Financial Performance - Total sales for the three months ended August 31, 2025, were $6,432,296, representing an increase of 9.4% compared to $5,875,700 for the same period in 2024[11] - Gross profit for the nine months ended August 31, 2025, was $5,322,451, up from $5,080,402 in the same period in 2024, indicating a year-over-year increase of 4.8%[11] - Net income for the nine months ended August 31, 2025, was $1,680,423, a significant recovery from a net loss of $524,552 in the same period in 2024[11] - For the nine months ended August 31, 2025, total revenue was $17,910,000, with $9,956,000 from Agricultural Products and $7,954,000 from Modular Buildings[37] - Consolidated revenue from external customers for the nine months ended August 31, 2025, was $17,910,000, a decrease of $419,000 or 2.3% compared to $18,329,000 for the same period in fiscal 2024[81] - Gross profit for the nine months ended August 31, 2025, was $5,322,000, with a gross margin of 29.7%, compared to $5,080,000 and 27.7% for the same period in fiscal 2024[81] - Consolidated net income from continuing operations was $254,000 for the three-month period ended August 31, 2025, compared to net income of $2,000 for the same period in fiscal 2024[88] - For the nine months ended August 31, 2025, consolidated net income from continuing operations was $1,680,000, a significant improvement from a net loss of $427,000 in the same period of fiscal 2024[88] Assets and Liabilities - Total current assets increased to $14,181,231 as of August 31, 2025, compared to $13,124,309 as of November 30, 2024, reflecting a growth of 8.1%[9] - Total liabilities decreased to $7,901,931 as of August 31, 2025, down from $9,146,861 as of November 30, 2024, representing a reduction of 13.6%[9] - The company’s retained earnings increased to $9,009,051 as of August 31, 2025, compared to $7,328,628 as of November 30, 2024, reflecting a growth of 22.9%[9] - The balance of expected credit losses decreased to $44,689 as of August 31, 2025, from $56,646 a year earlier[39] - As of August 31, 2025, the total term debt amounted to $2,006,259, with a current portion of $125,979 and a long-term portion of $1,880,280[59] Cash Flow and Expenses - Cash at the end of the period increased to $5,960 from $1,860 at the beginning of the period, marking a substantial increase of 220.4%[16] - The net cash provided by operating activities for continuing operations was $(14,992) for the nine months ended August 31, 2025, compared to $1,506,107 in the same period in 2024[16] - Consolidated operating expenses for the nine months ended August 31, 2025, were $4,465,000, compared to $5,138,000 for the same period in fiscal 2024, reflecting cost-cutting measures[81] - Administrative expenses decreased to $983,000 for the three-month period ended August 31, 2025, from $1,087,000 in the same period of fiscal 2024, representing a reduction in administrative expenses as a percentage of sales from 19.4% to 17.1%[86] Segment Performance - For the three months ended August 31, 2025, the Agricultural Products segment generated revenue of $2,983,000, while the Modular Buildings segment generated $3,449,000, totaling $6,432,000 in consolidated revenue[73] - Agricultural Products segment sales for the nine months ended August 31, 2025, were $9,956,000, a decrease of $1,823,000 or 15.5% from $11,779,000 in the same period of fiscal 2024[82] - Modular Buildings segment sales for the nine months ended August 31, 2025, were $7,954,000, an increase of $1,404,000 or 21.4% compared to $6,550,000 for the same period in fiscal 2024[83] - Gross margin for the Agricultural Products segment for the nine months ended August 31, 2025, was 24.4%, down from 27.8% for the same period in fiscal 2024[82] - Gross margin for the Modular Buildings segment for the nine months ended August 31, 2025, was 36.4%, up from 27.5% for the same period in fiscal 2024[83] Operational Changes - The Company ceased operations of its Tools business in Q3 2023, with the last day of normal operations on July 14, 2023, and reported a loss from operations of $22,000 for the three months ended August 31, 2024[30] - The Tools segment was classified as discontinued operations, with total assets of $1,024,000 reported as of August 31, 2024[31] - The Company recognized approximately $255,000 in revenue during the first nine months of fiscal 2025 that was included in a contract liability on November 30, 2024, compared to $686,000 in the same period of fiscal 2024[41] Credit and Loans - The Company maintains a $4,000,000 revolving line of credit with a balance of $2,672,437 as of August 31, 2025, with $1,327,563 remaining available[50] - The Company carries a $2,600,000 term loan with an interest rate of 7.00%, due October 1, 2037, with monthly payments of $19,648[51] - A new term loan of $516,971 was entered into on October 1, 2025, with an interest rate of 7.25% for roof replacement, requiring monthly payments of $6,102[52] - The Company executed two SBA Economic Injury Disaster Loans (EIDLs) in June 2020, each with a principal amount of $150,000, accruing interest at 3.75% per annum, with monthly payments of $731 starting December 2022[58] Future Outlook - The company anticipates improved market conditions in the next 9 to 15 months, following a cyclical downturn in the agricultural market[82] - The company expects to maintain sufficient cash to finance operations and pay debts over the next twelve months[92]

[Company Overview](index=1&type=section&id=Company%20Overview) Art's Way Manufacturing is a small, publicly traded company with over 65 years of experience in equipment manufacturing, specializing in high-quality machinery for agricultural and research needs [About Art's Way Manufacturing Co., Inc.](index=4&type=section&id=About%20Art's%20Way%20Manufacturing%20Co.,%20Inc.) Art's Way Manufacturing Co., Inc. is a small, publicly traded company with over 65 years of experience in equipment manufacturing, specializing in high-quality machinery for agricultural and research needs - Art's Way Manufacturing is a small, publicly traded company specializing in equipment manufacturing for over 65 years, with approximately **100 employees** across two locations[11](index=11&type=chunk) - The company operates with two reporting segments: Agricultural Products and Modular Buildings, offering products like manure spreaders, forage boxes, and custom research/laboratory buildings[11](index=11&type=chunk) [Third Quarter Fiscal 2025 Highlights](index=1&type=section&id=Third%20Quarter%20Fiscal%202025%20Highlights) Art's Way Manufacturing reported improved results for Q3 fiscal 2025, driven by growth in its Modular Buildings segment, which helped offset ongoing challenges in the agricultural market - Improved results in Q3 fiscal 2025, with Modular Buildings growth offsetting Ag market challenges[1](index=1&type=chunk) [Consolidated Financial Results](index=1&type=section&id=Consolidated%20Financial%20Results) The company reported improved financial performance for both the third quarter and the first nine months of fiscal 2025, driven by increased net income and strategic cost reductions [Three Months Ended August 31, 2025](index=1&type=section&id=Three%20Months%20Ended%20August%2031,%202025) For the third quarter of fiscal 2025, the company reported a significant increase in net income and operating income, with sales also showing a positive year-over-year growth | Metric | August 31, 2025 ($) | August 31, 2024 ($) | YoY Change | | :--- | :--- | :--- | :--- | | Sales | 6,432,000 | 5,876,000 | +9.5% | | Operating Income | 345,000 | 154,000 | +124.0% | | Net Income | 254,000 | 2,000 | +12600.0% | | EPS (Basic) | 0.05 | 0.00 | N/A | | EPS (Diluted) | 0.05 | 0.00 | N/A | [Nine Months Ended August 31, 2025](index=2&type=section&id=Nine%20Months%20Ended%20August%2031,%202025) For the first nine months of fiscal 2025, the company achieved a significant turnaround from a net loss to a net income, primarily driven by improved operating income, reduced operating expenses, and a positive impact from an Employee Retention Credit refund, despite a slight decline in overall sales | Metric | August 31, 2025 ($) | August 31, 2024 ($) | YoY Change | | :--- | :--- | :--- | :--- | | Sales | 17,910,000 | 18,329,000 | -2.3% | | Operating Income (Loss) | 858,000 | (58,000) | N/A (from loss to profit) | | Net Income (Loss) | 1,680,000 | (427,000) | N/A (from loss to profit) | | EPS (Basic) | 0.33 | (0.08) | N/A (from loss to profit) | | EPS (Diluted) | 0.33 | (0.08) | N/A (from loss to profit) | - Nine-month gross profit as a percentage of sales improved by **1.2%** compared to the first nine months of fiscal 2024[4](index=4&type=chunk) - Operating expenses decreased by **13.1%** for the nine months ended August 31, 2025, compared to the same period in fiscal 2024[4](index=4&type=chunk) - Net income for the nine months ended August 31, 2025, was positively impacted by a **$1,154,000 Employee Retention Credit refund**[4](index=4&type=chunk) [CEO's Commentary](index=2&type=section&id=CEO's%20Commentary) The CEO expressed satisfaction with operational progress and improved profitability despite agricultural market headwinds, highlighting strong performance in Modular Buildings and modest demand in Agricultural Products - Operational progress and improved profitability achieved despite persistent headwinds in the ag equipment space[3](index=3&type=chunk) - Modular Buildings segment showed **strong performance**, while Agricultural Products experienced **modest demand**[3](index=3&type=chunk) - Company remains focused on enhancing products, customer experience, improving market position, and strengthening balance sheet and cash flow[3](index=3&type=chunk) - Cautiously optimistic that strong profitability among livestock producers will lead to improved demand in the near term and into 2026 for the ag sector[3](index=3&type=chunk) [Segment Performance Analysis](index=3&type=section&id=Segment%20Performance%20Analysis) This section analyzes the distinct financial and operational performance of the Agricultural Products and Modular Buildings segments, highlighting market challenges and growth drivers [Agricultural Products Segment](index=3&type=section&id=Agricultural%20Products%20Segment) The Agricultural Products segment continued to face decreased demand for six consecutive quarters due to challenging market conditions, including high interest rates and low crop prices [Market Conditions and Strategic Response](index=3&type=section&id=Market%20Conditions%20and%20Strategic%20Response%20(Agricultural%20Products)) The Agricultural Products segment faced six consecutive quarters of decreased demand due to challenging market conditions, but saw strong grinder mixer sales and implemented cost reduction measures - Experienced decreased demand for **six fiscal quarters** due to difficult agricultural market conditions (high interest rates, increasing input costs, low row crop prices)[6](index=6&type=chunk) - Strategically building inventory through fiscal year-end to capitalize on retail opportunities and year-end tax buying, despite low current demand[6](index=6&type=chunk) - Strong grinder mixer sales activity driven by **all-time high livestock prices**, particularly cattle[6](index=6&type=chunk) - Anticipates market conditions to improve in the next **9 to 15 months**, believing this is the bottom of the cycle[6](index=6&type=chunk) - Operating expenses reduced through right-sizing production and administrative staff in fiscal 2024[6](index=6&type=chunk) - Expects to pass on a **3-5% price increase** to customers with the fall early order program due to rising supplier costs, steel prices, and tariff charges[6](index=6&type=chunk) [Financial Performance](index=3&type=section&id=Financial%20Performance%20(Agricultural%20Products)) The Agricultural Products segment reported a slight Q3 sales decline and a more significant 9-month sales decline, but net income improved substantially due to decreased operating expenses and an Employee Retention Credit refund | Metric | Q3 2025 ($) | Q3 2024 ($) | YoY Change (Q3) | 9 Months 2025 ($) | 9 Months 2024 ($) | YoY Change (9 Months) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Sales | 2,983,000 | N/A | -0.2% | 9,956,000 | N/A | -15.5% | - Nine-month gross profit as a percentage of sales declined **3.4%** compared to the first nine months of fiscal 2024[7](index=7&type=chunk) - Operating expenses decreased by **23.0%** for the nine months ended August 31, 2025, compared to the same period in fiscal 2024[7](index=7&type=chunk) - Net income of **$139,000** for the nine months ended August 31, 2025, an improvement of **$1,337,000** from the same period in fiscal 2024, positively impacted by a **$976,000 Employee Retention Credit refund**[7](index=7&type=chunk) [Modular Buildings Segment](index=4&type=section&id=Modular%20Buildings%20Segment) The Modular Buildings segment demonstrated strong growth in both Q3 and year-to-date sales, driven by consistent execution on backlog and a growing reputation in custom research and laboratory fields [Operational Highlights and Growth Strategy](index=4&type=section&id=Operational%20Highlights%20and%20Growth%20Strategy%20(Modular%20Buildings)) The Modular Buildings segment achieved strong sales growth through consistent backlog execution and reputation building, while exploring new markets and maintaining strong margins - Consistent execution on backlog and growing reputation in custom research and laboratory fields drove approximately **20% sales increase** for the quarter and year-to-date[9](index=9&type=chunk) - Quoting activity and custom build inquiries remain strong, despite earlier concerns about government funding pullbacks[9](index=9&type=chunk) - Exploring new markets including datacenters, wastewater treatment facilities, petroleum and mining analysis labs, and chemical production offices[9](index=9&type=chunk) - Strong margins maintained due to increased workforce proficiency and software improvements enhancing data analytics and budget adherence[9](index=9&type=chunk) [Financial Performance](index=4&type=section&id=Financial%20Performance%20(Modular%20Buildings)) The Modular Buildings segment reported robust sales growth for both Q3 and the nine months ended August 31, 2025, with significant improvements in gross profit and net income | Metric | Q3 2025 ($) | Q3 2024 ($) | YoY Change (Q3) | 9 Months 2025 ($) | 9 Months 2024 ($) | YoY Change (9 Months) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Sales | 3,449,000 | N/A | +19.4% | 7,954,000 | N/A | +21.4% | - Nine-month gross profit as a percentage of sales improved **8.9%** compared to the first nine months of fiscal 2024[12](index=12&type=chunk) - Operating expenses increased by **40.3%** for the nine months ended August 31, 2025, due to overlap in sales positions and increased commission expense from higher sales[12](index=12&type=chunk) - Net income of **$1,542,000** for the nine months ended August 31, 2025, an improvement of **$771,000** from the same period in fiscal 2024, positively impacted by a **$179,000 Employee Retention Credit refund**[12](index=12&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section serves as a cautionary notice regarding forward-looking statements within the release, identifying them by specific terminology and outlining various risks and uncertainties that could cause actual results to differ materially from management's expectations - The release contains forward-looking statements identifiable by terms such as 'may,' 'should,' 'anticipate,' 'believe,' 'expect,' 'plan,' 'future,' 'intend,' 'could,' 'estimate,' 'predict,' 'hope,' 'potential,' 'continue,' 'foresee,' 'optimistic,' 'opportunity,' or their negatives[13](index=13&type=chunk) - Statements of anticipated future results are subject to various risks and uncertainties, including customer demand, credit-worthiness, operational efficiency, financing, debt obligations, inflation, tariffs, economic conditions, labor market, raw material costs, and unexpected segment performance[13](index=13&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, and the Company does not intend to update them other than as required by law[13](index=13&type=chunk)

Core Insights - The company reported financial results for the third quarter of fiscal 2025, highlighting operational progress and improved profitability despite challenges in the agricultural equipment sector [1] Financial Performance - The company continues to show operational progress and improved profitability during the third quarter and year to date [1]

Core Viewpoint - Premarket trading is showing notable activity with significant price movements indicating potential investment opportunities before the market opens [1] Premarket Gainers - Society Pass Incorporated (SOPA) has increased by 139% to $3.34 - Critical Metals Corp. (CRML) has risen by 79% to $14.30 - Sanmina Corporation (SANM) is up 26% at $144.61 - Palisade Bio, Inc. (PALI) has gained 25% to $2.00 - Advanced Micro Devices, Inc. (AMD) has increased by 24% to $205.07 - Odyssey Marine Exploration, Inc. (OMEX) is up 22% at $2.46 - Youxin Technology Ltd (YAAS) has risen by 21% to $3.14 - NioCorp Developments Ltd. (NB) is up 18% at $9.38 - Snow Lake Resources Ltd. (LITM) has increased by 14% to $5.66 - Plug Power Inc. (PLUG) is up 7% at $4.10 [3] Premarket Losers - Rich Sparkle Holdings Limited (ANPA) has decreased by 15% to $22.10 - CCH Holdings Ltd Ordinary Shares (CCHH) is down 15% at $3.73 - Xcel Brands, Inc. (XELB) has fallen by 14% to $2.04 - Quantum Computing Inc. (QUBT) is down 13% at $21.39 - Rent the Runway, Inc. (RENT) has decreased by 12% to $4.70 - MDJM Ltd (UOKA) is down 11% at $2.96 - CID HoldCo, Inc. (DAIC) has fallen by 9% to $2.72 - Algorhythm Holdings, Inc. (RIME) is down 9% at $2.47 - Corbus Pharmaceuticals Holdings, Inc. (CRBP) has decreased by 8% to $13.50 - Art's-Way Manufacturing Co., Inc. (ARTW) is down 7% at $2.58 [4]

PART I – FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's unaudited financial statements show a shift to net income, driven by an Employee Retention Credit refund, despite a slight decrease in total assets Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | May 31, 2025 | November 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Total current assets | $13,287,649 | $13,124,309 | +1.2% | | Total assets | $20,879,320 | $21,240,684 | -1.7% | | Total current liabilities | $4,882,108 | $6,632,493 | -26.4% | | Total liabilities | $7,256,561 | $9,146,861 | -20.7% | | Total stockholders' equity | $13,622,759 | $12,093,823 | +12.6% | Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric | Six Months Ended May 31, 2025 | Six Months Ended May 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Sales | $11,477,645 | $12,453,663 | -7.8% | | Gross Profit | $3,556,286 | $3,380,277 | +5.2% | | Income (loss) from operations | $513,138 | $(211,313) | N/A | | Net Income (Loss) | $1,426,313 | $(498,380) | N/A | - The company's business is organized into two operating segments: **Agricultural Products** (farm equipment) and **Modular Buildings** (animal containment and laboratory uses)[20](index=20&type=chunk)[21](index=21&type=chunk) - The company recognized a significant **Employee Retention Credit (ERC) refund of $1,620,103** in other income during the six months ended May 31, 2025, which was a primary driver of profitability[27](index=27&type=chunk)[28](index=28&type=chunk) [Revenue by Segment and Source](index=12&type=section&id=Note%204%29%20Disaggregation%20of%20Revenue) Total revenue decreased by 7.8% year-over-year, driven by a decline in Agricultural Products partially offset by strong growth in Modular Buildings Revenue by Segment (Six Months Ended May 31) | Segment | 2025 Revenue | 2024 Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Agricultural Products | $6,973,000 | $8,792,000 | -20.7% | | Modular Buildings | $4,505,000 | $3,662,000 | +23.0% | | **Total** | **$11,478,000** | **$12,454,000** | **-7.8%** | - Within the Agricultural Products segment, farm equipment sales fell from **$7.5 million to $5.3 million** year-over-year, while Modular Buildings sales grew from **$3.5 million to $4.3 million**[37](index=37&type=chunk) [Earnings Per Share (EPS)](index=14&type=section&id=Note%207%29%20Net%20Income%20%28Loss%29%20Per%20Share%20of%20Common%20Stock) The company reported a significant turnaround in profitability, with diluted EPS from continuing operations reaching $0.28 for H1 2025 Net Income (Loss) Per Share - Diluted | Period | Six Months Ended May 31, 2025 | Six Months Ended May 31, 2024 | | :--- | :--- | :--- | | Continuing Operations | $0.28 | $(0.09) | | Discontinued Operations | $0.00 | $(0.01) | | **Net Income (Loss) per Share** | **$0.28** | **$(0.10)** | [Debt and Financing](index=17&type=section&id=Note%2012%29%20Loan%20and%20Credit%20Agreements) The company maintains a renewed $4.0 million revolving line of credit and was in compliance with all bank covenants as of the last measurement date - The company renewed its revolving line of credit, reducing principal availability to **$4.0M** and negotiating a **75 basis point interest rate reduction**, with an outstanding balance of $1,062,437[51](index=51&type=chunk)[90](index=90&type=chunk) - The company must maintain minimum monthly working capital of **$4.0 million** and a minimum debt service coverage ratio of **1.25**, and was in compliance as of November 30, 2024[56](index=56&type=chunk) [Segment Performance](index=21&type=section&id=Note%2018%29%20Segment%20Information) The Modular Buildings segment generated significant operating income, while the Agricultural Products segment recorded an improved but still negative operating loss Segment Performance (Six Months Ended May 31, 2025 vs 2024) | Segment | Metric | 2025 | 2024 | | :--- | :--- | :--- | :--- | | **Agricultural Products** | Revenue | $6,973,000 | $8,792,000 | | | Income (loss) from operations | $(428,000) | $(584,000) | | **Modular Buildings** | Revenue | $4,505,000 | $3,662,000 | | | Income from operations | $941,000 | $373,000 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the sales decrease to a challenging agricultural market, offset by strong performance in Modular Buildings, with profitability boosted by a tax credit - The Agricultural Products segment sales decreased **20.7%** in H1 2025 due to weak row crop prices and high interest rates, though management believes the market is at a cyclical bottom[80](index=80&type=chunk) - The Modular Buildings segment sales increased **23.0%** in H1 2025, with gross margin improving to **37.2%** from 25.0% due to strong demand and efficient project execution[81](index=81&type=chunk) - Administrative expenses decreased year-over-year due to non-recurring 2024 early retirement incentives and reduced administrative headcount costs[85](index=85&type=chunk) - The consolidated order backlog decreased **39.3%** to $4.7 million, with declines in both the Agricultural (-36.0%) and Modular Buildings (-39.9%) segments[88](index=88&type=chunk) - The primary source of liquidity in H1 2025 was cash from operations, significantly boosted by net proceeds of approximately **$1.46 million** from the Employer Retention Credit refund[89](index=89&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Art's-Way Manufacturing Co, Inc is not required to provide the disclosures under this item - The company is exempt from this disclosure requirement as it qualifies as a **smaller reporting company**[92](index=92&type=chunk) [Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective, with no material changes in internal controls during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were **effective** as of May 31, 2025[94](index=94&type=chunk) - **No changes** occurred during the period that have materially affected, or are reasonably likely to materially affect, the company's internal controls over financial reporting[95](index=95&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently a party to any material pending legal proceedings - As of the filing date, the company is **not involved in any material pending legal proceedings**[97](index=97&type=chunk) [Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, Art's-Way Manufacturing Co, Inc is not required to provide the disclosures under this item - The company is exempt from this disclosure requirement as it qualifies as a **smaller reporting company**[98](index=98&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any of its common stock during the second quarter of fiscal 2025 - There were **no purchases** of the company's common stock during the second quarter of fiscal 2025[99](index=99&type=chunk) [Other Information](index=29&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the first half of fiscal 2025 - **No director or officer** adopted or terminated any "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the six months ended May 31, 2025[102](index=102&type=chunk) [Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO/CFO certifications and iXBRL formatted financial statements

[Financial Highlights & Management Commentary](index=1&type=section&id=Financial%20Highlights%20%26%20Management%20Commentary) This section presents Art's Way Manufacturing's Q2 and H1 FY2025 financial results, emphasizing profitability improvements, alongside management's strategic insights and future outlook [Second Quarter Fiscal 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%20Fiscal%202025%20Financial%20Highlights) Art's Way Manufacturing reported a sales decrease in Q2 FY2025 but achieved significant profitability improvement, driven by operational gains and an Employee Retention Credit refund Consolidated Financial Performance (Continuing Operations) | Metric | For the Three Months Ended May 31, 2025 ($) | For the Three Months Ended May 31, 2024 ($) | For the Six Months Ended May 31, 2025 ($) | For the Six Months Ended May 31, 2024 ($) | | :--- | :--- | :--- | :--- | :--- | | **Sales** | $6,337,000 | $6,730,000 | $11,478,000 | $12,454,000 | | **Operating Income (Loss)** | $510,000 | $169,000 | $513,000 | ($211,000) | | **Net Income (Loss)** | $1,482,000 | ($5,000) | $1,426,000 | ($429,000) | | **EPS (Basic & Diluted)** | $0.29 | $0.00 | $0.28 | ($0.09) | - For the first six months of fiscal 2025, net income was positively impacted by a **$1.15 million** Employee Retention Credit refund[7](index=7&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management highlights operational progress and improved profitability despite market headwinds, driven by Modular Buildings, focusing on product enhancement, balance sheet, and cash flow - Profitability improved despite market headwinds, largely due to the sustained performance of the Modular Buildings segment, while the Agricultural Products segment experienced modest demand[3](index=3&type=chunk) - The company's strategic focus is on enhancing products, customer experience, improving the balance sheet, and strengthening cash flow positions[3](index=3&type=chunk) [Segment Performance Analysis](index=2&type=section&id=Segment%20Performance%20Analysis) This section analyzes consolidated and segment performance, detailing sales, profitability, and strategic responses for Agricultural Products and Modular Buildings [Consolidated – Continuing Operations](index=2&type=section&id=Consolidated%20%E2%80%93%20continuing%20operations) Consolidated sales declined in H1 FY2025, yet gross profit improved and operating expenses decreased, resulting in a significant net income increase, largely due to an Employee Retention Credit refund Consolidated Performance Changes (Six Months Ended May 31, 2025 vs 2024) | Metric | Change vs. Prior Year Period | | :--- | :--- | | **Sales** | -7.8% | | **Gross Profit** | +3.8% | | **Operating Expenses** | -15.3% | | **Net Income** | +$1,855,000 | [Agricultural Products](index=2&type=section&id=Agricultural%20Products) The Agricultural Products segment faced challenging market conditions and sales decline, but improved net income through expense reductions, with management anticipating market recovery - The market is challenged by weak row crop prices and high interest rates, leading dealers to be hesitant to restock inventory[6](index=6&type=chunk) - The company believes the agricultural market is at the bottom of its cycle and anticipates conditions will improve in the next **12 to 18 months**[6](index=6&type=chunk) Agricultural Products Performance (Six Months Ended May 31, 2025 vs 2024) | Metric | Change vs. Prior Year Period | | :--- | :--- | | **Sales** | -20.7% | | **Gross Profit** | -1.0% | | **Operating Expenses** | -24.2% | | **Net Income** | +$1,236,000 (includes $976k ERC) | [Modular Buildings](index=3&type=section&id=Modular%20Buildings) The Modular Buildings segment showed strong sales and gross profit growth, driven by high demand in custom research and laboratory markets, while managing a leadership transition for enhanced sales capacity - Demand for modular buildings remains strong, and the company is an industry leader in the custom research and laboratory market[9](index=9&type=chunk) - A new Director of Business Development and Sales has been hired to transition into the retiring President's role, providing additional sales capacity and an opportunity to explore new markets[9](index=9&type=chunk) Modular Buildings Performance (Six Months Ended May 31, 2025 vs 2024) | Metric | Change vs. Prior Year Period | | :--- | :--- | | **Sales** | +23.0% | | **Gross Profit** | +12.2% | | **Operating Expenses** | +35.0% | | **Net Income** | +$619,000 (includes $179k ERC) | [Company Information and Disclosures](index=3&type=section&id=Company%20Information%20and%20Disclosures) This section provides background on Art's Way Manufacturing, its segments and employees, along with a cautionary statement on forward-looking statements and associated risks [About Art's-Way Manufacturing Co., Inc.](index=3&type=section&id=About%20Art's-Way%20Manufacturing%20Co.%2C%20Inc.) Art's Way Manufacturing is a publicly traded company with extensive experience, operating through its Agricultural Products and Modular Buildings segments - The company operates through two reporting segments: Agricultural Products and Modular Buildings[11](index=11&type=chunk) - The company has approximately **100 employees** across two locations in Iowa: Armstrong and Monona[11](index=11&type=chunk) [Caution Regarding Forward-Looking Statements](index=4&type=section&id=Caution%20Regarding%20Forward-Looking%20Statements) This section warns that forward-looking statements are subject to various risks and uncertainties, including economic conditions, which could cause actual results to differ materially from expectations - Forward-looking statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ[14](index=14&type=chunk) - Key risks include customer demand, credit-worthiness, inflation, tariffs, domestic and international economic conditions, and competition in the labor market[14](index=14&type=chunk)

Financial Performance - Total sales for the three months ended February 28, 2025, were $5,140,955, a decrease of 10.2% compared to $5,723,394 for the same period in 2024[11] - Gross profit for the same period was $1,496,509, representing a slight increase of 1.8% from $1,473,524 in the prior year[11] - The company reported a net loss of $55,757 for the three months ended February 28, 2025, compared to a net loss of $465,040 for the same period in 2024, indicating a significant improvement[11] - Consolidated corporate sales for the three-month period ended February 28, 2025, were $5,141,000, a decrease of $582,000, or 10.2%, compared to $5,723,000 in the same period of fiscal 2024[74] - Consolidated net loss from continuing operations improved to $56,000 in Q1 fiscal 2025 from a net loss of $424,000 in Q1 fiscal 2024[80] Assets and Liabilities - Current assets totaled $13,000,700 as of February 28, 2025, slightly down from $13,124,309 as of November 30, 2024[9] - Total liabilities decreased to $8,923,851 as of February 28, 2025, from $9,146,861 as of November 30, 2024[9] - The total stockholders' equity as of February 28, 2025, was $12,080,743, a slight decrease from $12,093,823 as of November 30, 2024[9] - Total assets as of February 28, 2025, were $21,005,000, down from $23,216,000 as of February 29, 2024[69] Cash and Receivables - Cash at the end of the period increased to $4,133 from $2,485 at the end of the same period in 2024[17] - The company experienced a decrease in accounts receivable, net, to $1,407,411 from $2,372,876 year-over-year[9] - The Company had approximately $1,407,000 in receivables as of February 28, 2025, down from $2,373,000 on November 30, 2024, indicating a decrease of about 40.7%[38] - Expected credit losses for accounts receivable decreased to $106,236 as of February 28, 2025, from $32,528 as of February 29, 2024[36] Inventory and Expenses - Total gross inventory increased to $12,552,629 as of February 28, 2025, from $11,984,915 as of November 30, 2024, reflecting a rise of approximately 4.75%[41] - The Company’s net inventory increased to $10,881,082 as of February 28, 2025, compared to $10,327,913 as of November 30, 2024, reflecting an increase of approximately 5.3%[41] - Engineering expenses decreased to $85,230 from $160,353, a reduction of 46.8% compared to the same period last year[11] - Consolidated selling expenses decreased to $350,000 in Q1 fiscal 2025 from $463,000 in Q1 fiscal 2024, representing 6.8% of sales compared to 8.1%[77] - Administrative expenses decreased to $1,059,000 in Q1 fiscal 2025 from $1,230,000 in Q1 fiscal 2024, representing 20.6% of sales compared to 21.5%[79] Credit and Loans - The Company has a $5,500,000 revolving line of credit with Bank Midwest, with a balance of $2,199,437 and $3,300,563 available as of February 28, 2025[47] - The interest rate on the Line of Credit was 8.25% per annum as of February 28, 2025, with a floor set at 6.00%[47] - The Company entered into a new $4,000,000 revolving line of credit on March 27, 2025, with an interest rate of 7.5% per annum[48] - The Company has a $2,600,000 term loan with Bank Midwest, accruing interest at 7.00%, with monthly payments of $19,648 required[49] - Total term debt as of February 28, 2025, is $2,066,284, down from $2,094,966 on November 30, 2024[56] Segment Performance - Revenue from external customers for the Modular Buildings segment was $2,119,000 for the three months ended February 28, 2025, compared to $1,392,000 for the same period in 2024, representing a growth of approximately 52.4%[34] - Agricultural Products segment sales decreased by $1,288,000, or 30.4%, to $2,948,000 in Q1 2025 from $4,236,000 in Q1 2024, attributed to rising interest rates and declining commodity prices[75] - Modular Buildings segment sales for Q1 fiscal 2025 were $2,193,000, a 47.5% increase from $1,487,000 in Q1 fiscal 2024[76] - Gross margin for the three months ended February 28, 2025, was 29.1%, an increase from 25.7% in the same period of fiscal 2024[74] - Gross margin for the Agricultural Products segment was 26.7% for Q1 2025, compared to 26.9% in Q1 2024, despite a significant decrease in sales[75] Future Outlook - The company expects destocking in the agricultural market to continue in fiscal 2025, which may increase demand for its products moving forward[75] - The company plans to release product-specific programs in fiscal 2025 to manage inventory levels and unlock cash[75] - The company anticipates two interest rate cuts for fiscal 2025, which may stimulate economic growth[75] - The company expects $1.2 million in net Employer Retention Credit refunds, although the timing is uncertain[82] Other Financial Information - The Company recognized approximately $197,000 in revenue from contract liabilities for the first three months of fiscal 2025, down from $560,000 in the same period of fiscal 2024, a decline of about 64.8%[38] - The Company’s accrued expenses decreased to $856,888 as of February 28, 2025, from $1,303,718 as of November 30, 2024, a reduction of about 34.3%[42] - The accrued warranty balance decreased from $295,113 on February 29, 2024, to $225,186 on February 28, 2025[45] - Finance lease liabilities totaled $701,376 as of February 28, 2025, down from $755,344 on November 30, 2024[60] - Operating lease right-of-use assets decreased from $13,774 on November 30, 2024, to $11,546 on February 28, 2025[60] - The fair value of financial instruments approximates their carrying amounts due to the short maturity of these instruments[64] - The Company adopted ASU 2023-07 in Q1 of fiscal 2025, which did not have a significant impact on segment disclosures[30] - Related party transactions resulted in an expense of $3,355 for the three months ended February 28, 2025, compared to $3,931 for the same period in 2024[59] - Capital expenditures for the three months ended February 28, 2025, were $83,000, compared to $281,000 for the same period in fiscal 2024[69]

Financial Performance - Sales for Q1 2025 were $5,141,000, a 10.2% decline from Q1 2024[5] - Operating income improved to $2,000 compared to a loss of $380,000 in Q1 2024[2] - Net loss for Q1 2025 was $56,000, an improvement of $368,000 from a net loss of $424,000 in Q1 2024[2] - EPS for Q1 2025 was $(0.01), compared to $(0.08) for the same period in Q1 2024[7] - Gross profit improved by 3.4% compared to Q1 2024 despite a decline in sales[5] - Operating expenses were reduced by 19.4% from Q1 2024[5] Sales Performance by Segment - Modular buildings segment sales reached $2,193,000, up 47.5% from Q1 2024[4] - Agricultural products sales declined by 30.4% to $2,948,000 in Q1 2025[5] Economic Outlook - The company anticipates two interest rate cuts in fiscal 2025, which may stimulate economic growth[3] - A strong demand-driven backlog at the end of fiscal 2024 contributed to increased sales in Q1 2025[6]