Art’s-Way(US:ARTW)2025-10-14 18:32Financial 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]