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]

Financial Performance - Sales for the year ended November 30, 2024, were $24,499,371, a decrease of 19.5% compared to $30,280,957 in 2023[118] - Gross profit for the year ended November 30, 2024, was $7,309,865, down 14.9% from $8,583,882 in 2023[118] - Income from operations decreased significantly to $460,697 in 2024 from $1,531,241 in 2023, representing a decline of 69.9%[118] - Net income for the year ended November 30, 2024, was $307,375, an increase of 15.1% compared to $266,969 in 2023[118] - The company reported a net loss from continuing operations of $(94,466) for 2024, compared to a profit of $762,789 in 2023[124] - Revenue from the Agricultural Products segment for the twelve months ended November 30, 2024 was $14,663,000, compared to $19,188,000 for the same period in 2023, a decrease of approximately 23.5%[160] - Revenue from the Modular Buildings segment for the twelve months ended November 30, 2024 was $9,836,000, compared to $7,590,000 for the same period in 2023, an increase of approximately 29.6%[160] - The Company recognized revenues of approximately $1,073,000 and $3,110,000 at the completion of production in fiscal years 2024 and 2023, respectively, indicating a decrease of about 65.5%[155] - Consolidated gross profit decreased to $7,310,000 in FY 2024 from $8,584,000 in FY 2023, a decline of approximately 15%[228] Assets and Liabilities - Total current assets decreased from $15,085,494 in 2023 to $13,124,309 in 2024, representing a decline of approximately 13%[116] - Total assets decreased from $24,402,114 in 2023 to $21,240,684 in 2024, a reduction of about 13%[116] - Total current liabilities decreased from $9,395,023 in 2023 to $6,632,493 in 2024, a decrease of approximately 29%[116] - Long-term debt, excluding current portion, decreased from $2,629,862 in 2023 to $1,975,232 in 2024, a reduction of about 25%[116] - Cash at the end of the period was $1,860, down from $4,014 at the end of the previous year[124] - Contract receivables decreased from $3,432,000 in November 30, 2023 to $2,373,000 in November 30, 2024, reflecting a decrease of approximately 30.9%[164] - Total term debt as of November 30, 2024, is $2,094,966, a decrease of 27.8% from $2,899,654 in 2023[210] - Total assets decreased to $21,241,000 in FY 2024 from $23,347,000 in FY 2023, a decline of approximately 9%[228] Equity and Stockholder Information - Stockholders' equity increased from $11,641,255 in 2023 to $12,093,823 in 2024, reflecting an increase of approximately 4%[116] - The net shares issued under the 2020 Equity Incentive Plan were 42,251 in 2024, a decrease of 54.7% from 93,251 in 2023[215] Expenses and Costs - The Company reported stock-based compensation of $182,847 for the year ended November 30, 2024, compared to $292,185 in 2023[124] - The total income tax expense for fiscal year 2024 was $74,305, down 34.5% from $113,466 in 2023[220] - Advertising costs decreased significantly from $229,000 in fiscal year 2023 to $153,000 in fiscal year 2024, a reduction of about 33.2%[173] - Research and development costs increased to $216,000 in fiscal year 2024 from $204,000 in fiscal year 2023, representing a growth of approximately 5.9%[172] - The Company recognized $15,193 in expenses from related party transactions in fiscal year 2024, down from $16,102 in 2023[211] Operational Changes and Strategy - The company is focused on managing warranty costs and order backlog as part of its operational strategy[14] - The company has implemented expense savings measures due to recent layoffs and strategic terminations[14] - The company ceased operations of its Tools business during the third quarter of fiscal 2023, which was reported as a discontinued operation[129] - The Tools segment was discontinued, with a reported net income from discontinued operations of $401,841 for the twelve months ended November 30, 2024, compared to a loss of $495,820 in the prior year[182] - The Company recorded a gain of $683,685 on the disposal of real estate from the Tools segment, included in income from discontinued operations[182] Credit and Risk Management - The company reported an allowance for expected credit losses of $108,636 as of November 30, 2024[116] - The company anticipates increased credit risk over the next year due to current economic conditions affecting the agricultural sector[134] - The allowance for expected credit losses increased from $32,137,000 at the beginning of the year to $108,636,000 by November 30, 2024, reflecting a provision charged to expense of $67,170,000[187] Lease and Asset Management - Operating lease right-of-use assets decreased from $22,427,000 in November 30, 2023 to $13,774,000 in November 30, 2024, a decline of approximately 38.5%[146] - The total operating lease liabilities also decreased from $22,427,000 in November 30, 2023 to $13,774,000 in November 30, 2024, reflecting a reduction of about 38.5%[146] - The Company recorded $10,199,000 in operating lease expense for the year ended November 30, 2024, down from $17,459,000 in the same period of fiscal 2023, representing a decrease of approximately 41.5%[146] - Finance lease right-of-use assets decreased from $511,367,000 in November 30, 2023 to $377,753,000 in November 30, 2024, a reduction of about 26.1%[147] - Total finance lease liabilities decreased from $979,654,000 in November 30, 2023 to $755,344,000 in November 30, 2024, a decline of approximately 22.9%[147] - The Company incurred $171,830,000 of amortization expense from ROU assets related to finance leases in fiscal 2024, compared to $129,891,000 in fiscal 2023, an increase of about 32.2%[148] Future Projections and Plans - The company anticipates continued expansion into international markets as part of its future operations[14] - Future minimum lease receipts from assets held for lease are projected at $79,720 for the year ending November 30, 2025[195] - The Company maintains a $5,500,000 revolving line of credit, with a balance of $1,928,437 as of November 30, 2024, leaving $3,571,563 available[200] - The term loan with Bank Midwest amounts to $2,600,000, requiring monthly payments of $19,648, with an interest rate of 7.00%[201] - The Company has a minimum maturity of term debt of $119,734 due in 2025, increasing to $1,408,222 in 2030 and thereafter[210] Compliance and Governance - The company reported no subsequent events that would require recognition or disclosure in the financial statements[229] - There were no disagreements with accountants on accounting and financial disclosure[230]

Financial Performance - Fiscal 2024 net sales decreased to $24,499,000 from $30,281,000 in fiscal 2023, a decline of 19.3%[2] - Consolidated operating income from continuing operations dropped to $461,000 from $1,531,000 in the previous year[6] - Loss per share from continuing operations was $(0.02), compared to net income of $0.15 per share in fiscal 2023[7] - Consolidated net income for fiscal 2024 was $307,000, up from $267,000 in fiscal 2023[7] Segment Performance - Agricultural Products segment net sales fell by $7,804,000, or 34.7%, to $14,663,000 due to lower commodity prices and excess inventory[2][4] - Modular Buildings segment net sales increased by $2,022,000, or 25.9%, to $9,836,000, driven by a 124% increase in research sales[4] - The Agricultural Products segment backlog decreased to approximately $3,486,000 from $4,364,000 year-over-year[8] - Modular Buildings segment backlog also declined to approximately $2,393,000 from $6,170,000 in the previous year[8] Future Outlook - The company anticipates improved profitability and cash flow in fiscal 2025 due to solid demand and reduced overhead expenses[10] - The company reported a historical low in current debt levels, positioning it for future market improvements[9]

Sales Performance - Consolidated corporate sales for the three months ended August 31, 2024 decreased by $2,241,000 (27.6%) compared to the same period in fiscal 2023[99] - Agricultural Products segment sales for the three months ended August 31, 2024 decreased by $2,542,000 (46.0%) compared to the same period in fiscal 2023[100] - Modular Buildings segment sales for the three months ended August 31, 2024 increased by $301,000 (11.6%) compared to the same period in fiscal 2023[101] Financial Results - Consolidated net loss for the nine months ended August 31, 2024 was $427,000 compared to net income of $921,000 for the same period in fiscal 2023[106] - Consolidated gross margin for the three months ended August 31, 2024 was 28.9% compared to 28.3% for the same period in fiscal 2023[99] - Modular Buildings segment gross margin for the three months ended August 31, 2024 was 30.7% compared to 33.4% for the same period in fiscal 2023[101] Order Backlog - Agricultural Products segment order backlog as of October 3, 2024 decreased by 82.9% compared to fiscal 2023[107] - Modular Buildings segment order backlog as of October 3, 2024 increased by 234.6% compared to fiscal 2023[107] Cash Flow and Financing - The sale of real estate from the Tools segment in October 2024 is expected to net close to $1.7 million in cash after closing expenses[108] - The company expects $1.2 million of net Employer Retention Credit refunds to provide a material inflow of cash, although the timing is unknown[108] - The company has a revolving line of credit of $5,500,000 with Bank Midwest, with an outstanding principal balance of $3,867,437 as of August 31, 2024[109] - The revolving line of credit was renewed on March 4, 2024, and is scheduled to mature on March 30, 2025[109] - The company believes its current financing arrangements will provide sufficient cash to finance operations and pay debt when due during the next twelve months[109] - The company expects to continue to be able to procure financing upon reasonable terms[109] Financial Reporting and Controls - The company's disclosure controls and procedures were effective as of August 31, 2024[111] - The company's consolidated financial statements present fairly its financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States[111] - There were no changes in the company's internal controls over financial reporting that materially affected or are reasonably likely to materially affect its internal controls over financial reporting during the period covered by the report[112] - The company's condensed consolidated financial statements include balance sheets, statements of operations, cash flows, and notes to the financial statements[118] Legal and Stock Transactions - The company is not currently a party to any material pending legal proceedings[114] - The company did not make any purchases of its common stock during the third quarter of fiscal 2024[115]

Sales Performance - Consolidated sales for Q3 2024 were $5,876,000, a decrease of $2,241,000 or 27.6% compared to $8,117,000 in Q3 2023[6] - For the nine months ended August 31, 2024, consolidated sales were $18,329,000, down $5,100,000 or 21.8% from $23,429,000 in the same period of 2023[6] - Agricultural Products segment sales in Q3 2024 were $2,988,000, a decrease of $2,542,000 or 46.0% from $5,530,000 in Q3 2023[7] - Modular Buildings segment sales increased to $2,888,000 in Q3 2024, up $301,000 or 11.6% from $2,587,000 in Q3 2023[8] Net Income and Loss - Consolidated net income for Q3 2024 was $2,000, compared to a net income of $241,000 in Q3 2023, resulting in a net loss of $427,000 for the nine months ended August 31, 2024[9] - Loss per share for Q3 2024 was $0.00, compared to earnings of $0.05 per share in Q3 2023; for the nine months, loss per share was $0.08 compared to earnings of $0.18 in the same period of 2023[10] Future Outlook - The company anticipates it may take another twelve months for sales stabilization in the Agricultural Products segment due to ongoing market conditions[9] - The company expects continued positive performance from the Modular Buildings segment, driven by large research projects and growing market opportunities[9] Cost Management - The company has implemented cost-cutting measures, including layoffs and early retirement incentives, to mitigate cash flow impacts from decreased sales[7] Leadership Changes - Marc McConnell has been appointed as the new President and CEO effective October 1, 2024, following the mutual separation agreement with former CEO David King[11]

Financial Performance - Consolidated corporate sales for the three months ended May 31, 2024, were $6,730,000, an 18.2% decrease from $8,224,000 in the same period of fiscal 2023[99]. - Agricultural Products segment sales decreased by 28.5% to $4,555,000 for the second quarter of fiscal 2024, compared to $6,368,000 in fiscal 2023[100]. - Modular Buildings segment sales increased by 17.2% to $2,175,000 for the second quarter of fiscal 2024, compared to $1,856,000 in fiscal 2023[101]. - Consolidated net loss from continuing operations was $5,000 for the three months ended May 31, 2024, compared to net income of $330,000 for the same period in fiscal 2023[106]. Order Backlog - Consolidated order backlog as of July 8, 2024, was $7,867,000, a 23.1% decrease from $10,236,000 in July 2023[107]. - Agricultural Products segment order backlog decreased by 80.1% to $1,348,000 as of July 8, 2024, compared to $6,764,000 in fiscal 2023[107]. - Modular Buildings segment order backlog increased by 87.8% to $6,519,000 as of July 8, 2024, compared to $3,472,000 in fiscal 2023[107]. Expenses - Consolidated selling expenses for the six months ended May 31, 2024, were $860,000, a decrease of 17.5% from $1,042,000 in the same period of fiscal 2023[102]. - Administrative expenses increased to 19.8% of sales for the six months ended May 31, 2024, compared to 13.6% for the same period in fiscal 2023[104]. Future Outlook - The company expects to rely on inventory reduction, debt retirement, and cost-cutting measures to minimize losses and generate net income moving forward[106]. Compliance and Reporting - There were no changes in internal controls over financial reporting that materially affected the company during the reporting period[113]. - The company is not currently a party to any material pending legal proceedings[115]. - As a smaller reporting company, the company is not required to disclose risk factors[115]. - The company did not report any unregistered sales of equity securities during the period[117]. - The company has not made any purchases of its common stock during the second quarter of fiscal 2024[116]. - The company has filed condensed consolidated balance sheets and statements of operations and cash flows as part of its financial reporting[119]. - The report includes certifications from the Chief Executive Officer and Chief Financial Officer as required by regulations[120]. - The company has not disclosed any new strategies or market expansions in the current report[115]. - There are no defaults upon senior securities reported by the company[117]. - The company has not reported any mine safety disclosures as they are not applicable[117].

Sales Performance - Consolidated sales for Q2 2024 were $6,730,000, a decrease of $1,494,000 or 18.2% compared to $8,224,000 in Q2 2023[5] - For the six months ended May 31, 2024, consolidated sales were $12,454,000, down $2,857,000 or 18.7% from $15,311,000 in the same period of 2023[5] - Agricultural Products segment sales in Q2 2024 were $4,555,000, a decrease of $1,813,000 or 28.5% from $6,368,000 in Q2 2023[6] - Modular Buildings segment sales increased to $2,175,000 in Q2 2024, up $319,000 or 17.2% from $1,856,000 in Q2 2023[7] Financial Results - Consolidated net loss for Q2 2024 was $5,000, compared to net income of $330,000 in Q2 2023[8] - Loss per share for Q2 2024 was $0.00, compared to earnings of $0.07 per share in Q2 2023[9] Strategic Focus - The company anticipates continued positive performance in the Modular Buildings segment due to a strong backlog[8] - Cost-cutting measures have been implemented, including layoffs and early retirement incentives, to mitigate cash flow impacts from decreased sales[6] - The company is focusing on operational efficiency and prudent fiscal management to navigate challenging market conditions in the Agricultural Products segment[9] Market Outlook - The USDA has projected a 25% decline in farm income for 2024, impacting sales in the Agricultural Products segment[6]