Revenue Segments - Agricultural Products segment accounted for 59.0% of net revenue in the 2019 fiscal year, down from 72.7% in 2018[12] - Modular Buildings segment contributed 31.7% to net revenue in 2019, significantly up from 15.8% in 2018[13] - Tools segment represented 9.3% of net revenue in 2019, a decrease from 11.5% in 2018[14] - Consolidated net sales for the fiscal year 2019 totaled $22,889,000, a 16.0% increase from $19,727,000 in 2018, driven by a 133.5% increase in the Modular Buildings segment[81] - Agricultural Products segment sales decreased by $836,000, or 5.8%, to $13,508,000 in 2019, primarily due to decreased demand for portable feed equipment[85] - Modular Buildings segment net sales increased by $4,151,000, or 133.5%, to $7,260,000 in 2019, attributed to increased operating lease activity and progress on an $8.5 million project[87] - Tools segment net sales decreased by $153,000, or 6.7%, to $2,121,000 in 2019, primarily due to the loss of a large volume customer[88] Financial Performance - Consolidated gross profit as a percentage of net sales was 17.2% in 2019, compared to 17.8% in 2018, with variations across segments[81] - Consolidated operating expenses decreased by 17.9% to $5,424,000 in 2019, with the Agricultural Products segment accounting for $3,796,000 of total expenses[81] - Agricultural Products segment operating expenses decreased by $1,163,000, or 23.5%, to $3,796,000 in 2019, reflecting reduced selling expenses and one-time non-cash expenses in 2018[86] - Consolidated net loss for continuing operations was $(1,420,000) in 2019, a decrease in loss of $1,916,000 compared to $(3,336,000) in 2018[83] - The net loss for the year ended November 30, 2019, was $1,419,586, significantly improved from a net loss of $3,386,902 in 2018, reflecting a reduction of about 58%[112] - Cash provided by operating activities for continuing operations was $807,753 in 2019, compared to cash used of $(1,026,522) in 2018[116] Assets and Liabilities - Total liabilities decreased by $735,000 compared to the 2018 fiscal year, with total borrowings reduced by $1,241,000 in fiscal year 2019[66] - Current assets decreased from $12,145,158 in November 30, 2018 to $11,407,230 in November 30, 2019, while current liabilities decreased from $5,765,381 to $5,202,764, resulting in working capital of $6,204,466[98] - Total assets decreased from $21,325,474 in November 30, 2018 to $19,346,938 in November 30, 2019[107] - Long-term debt, excluding the current portion, decreased from $2,523,018 to $2,350,592[107] - The Company has a total term debt of $2,435,993 as of November 30, 2019, down from $2,750,477 in the previous year, reflecting a decrease of approximately 11.4%[192] Operational Developments - The company introduced the 8215 grinder mixer with a capacity of 215 bushels, the largest in the industry, during the 2019 fiscal year[28] - New manure spreaders, the X700 and X900, were put into mass production in 2019, featuring a guillotine slop gate for accurate metering[28] - Development of a sonar leveling axle for sugar beet harvesters was completed in 2019 to enhance harvesting capabilities[28] - The company has engaged in continuous improvement projects, including warehouse reorganization and cost-cutting measures, to enhance operational effectiveness[65] Customer and Sales Information - One customer accounted for over 21% of consolidated revenues during the 2019 fiscal year due to a large contract in the Modular Buildings segment[43] - Sales to OEM customers accounted for approximately 1% of consolidated sales in the 2019 fiscal year, down from 5% in 2018[42] - International sales accounted for 5.0% of consolidated sales during the 2019 fiscal year[26] Tax and Regulatory Matters - Effective tax rate for continuing operations increased to 19.7% in 2019 from 13.3% in 2018, due to a one-time adjustment to the deferred tax asset[84] - The statutory federal income tax rate remains at 21.0% for both November 30, 2019, and November 30, 2018[207] - The Company reported a total income tax expense of $(349,234) for the fiscal year ending November 30, 2019, compared to $(526,740) in 2018, showing a reduction of approximately 33.6%[206] Research and Development - Research and development costs for fiscal year 2019 were $149,000, down from $178,000 in 2018, reflecting a reduction of about 16.3%[151] Inventory and Receivables - Total gross inventory decreased to $11,553,499 from $13,148,910, with net inventory at $8,778,507 compared to $10,257,102 for the same period[170] - Contract receivables as of November 30, 2019, were $115,000, down from $159,000 in 2018, a decrease of about 27.7%[149] - Contract assets increased significantly to $727,000 in 2019 from $99,000 in 2018, representing a growth of approximately 634.3%[149] - Contract liabilities decreased to $89,000 in 2019 from $185,000 in 2018, a decline of about 51.9%[149] Future Outlook - The company anticipates that further increases in the value of agricultural production will benefit its business, while decreases may harm financial results[90] - The company believes its current cash and financing arrangements provide sufficient cash to finance operations for the next 12 months[98]
Art’s-Way(ARTW) - 2019 Q4 - Annual Report