Art’s-Way(US:ARTW)2026-02-12 19:41Revenue Segments - Agricultural Products segment accounted for 55.5% of net revenue in fiscal 2025, down from 59.9% in fiscal 2024[21]. - Modular Buildings segment contributed 44.5% to net revenue in fiscal 2025, up from 40.1% in fiscal 2024[22]. - Agricultural Products segment had a net backlog of approximately $3,224,000 as of February 2, 2026, compared to $3,486,000 on February 2, 2025[33]. - Modular Buildings segment backlog increased to approximately $4,882,000 as of February 2, 2026, from $2,403,000 on the same date in 2025[33]. - International sales accounted for 4.0% of consolidated sales in fiscal 2025, up from 3.3% in fiscal 2024[31]. Financial Performance - Consolidated revenues from continuing operations decreased by 6.2% year-over-year, totaling $22,975,000 for fiscal 2025 compared to $24,499,000 for fiscal 2024[83]. - Consolidated gross profit as a percentage of net sales decreased to 27.3% in fiscal 2025 from 29.8% in fiscal 2024[83]. - Consolidated operating income for fiscal 2025 was $289,000, a 37% decrease from $461,000 in fiscal 2024[84]. - Consolidated net income for fiscal 2025 was $1,035,000, compared to $307,000 in fiscal 2024[85]. - The Agricultural Products segment experienced a 13.1% decline in revenue in fiscal 2025 due to depressed commodity prices and high input costs[69]. - The Modular Buildings segment saw a revenue increase of 4.0% and continued to show strong profitability[69]. Operating Expenses and Income - Operating expenses from continuing operations decreased by 12.7%, from $6,849,000 in fiscal 2024 to $5,977,000 in fiscal 2025[83]. - Agricultural Products segment net sales for fiscal 2025 were $12,749,000, a decrease of $1,914,000 or 13.1% from fiscal 2024[87]. - Operating expenses in the Agricultural Products segment decreased by $1,226,000 or 21.6% to $4,439,000 in fiscal 2025, attributed to personnel changes and cost management[89]. - Total income from operations in the Modular Buildings segment decreased to $1,751,000 in fiscal 2025 from $1,971,000 in fiscal 2024[90]. Assets and Liabilities - Current assets increased to $14,781,537 as of November 30, 2025, compared to $13,124,309 in 2024, resulting in a working capital increase to $8,343,499[101]. - Total liabilities slightly increased to $9,171,295 in 2025 from $9,146,861 in 2024, with long-term debt rising to $2,325,103[115]. - The company had $747,563 available on its line of credit and $4,012,816 of collateral in excess of its borrowing as of November 30, 2025[71]. - The Company has a total term debt of $2,490,429 as of November 30, 2025, an increase from $2,094,966 in 2024, reflecting a growth of approximately 18.9%[203]. Taxation - The effective tax rate for fiscal 2025 was 28.0%, down from 30.3% in fiscal 2024[86]. - Total income tax expense for fiscal year 2025 was $402,178, compared to $74,305 in 2024, reflecting a significant increase[213]. - The statutory federal income tax rate remained constant at 21.0% for both 2025 and 2024, while the effective tax rate decreased from 30.3% in 2024 to 28.0% in 2025[213]. Inventory and Cash Flow - Inventories, net, rose to $11,708,242 in 2025, up from $10,327,913 in 2024, indicating a 13.4% increase[115]. - Cash at the end of the period increased to $4,849 from $1,860 in 2024, reflecting improved liquidity[123]. - The Company experienced a net cash used in operating activities of $(904,143) for continuing operations in 2025, compared to $2,875,979 in 2024[123]. Employee and Operational Changes - Company employed 66 employees in Agricultural Products segment and 32 in Modular Buildings segment as of November 30, 2025[49]. - The Company ceased operations of its Tools business, which will no longer have activity reported beginning in the first quarter of fiscal 2026[127]. - The Company announced the discontinuation of its Tools segment on June 7, 2023, to focus on more successful business segments, resulting in a net income of $401,841 from discontinued operations for the twelve months ended November 30, 2024[178]. Research and Development - Research and development costs for fiscal years 2025 and 2024 were $228,000 and $216,000, respectively, reflecting an increase of approximately 5.6%[166]. Miscellaneous - The Company recorded a gain of $683,685 from the disposal of real estate associated with the Tools segment, which was sold for $1,800,000[178]. - The Company recognized stock-based compensation expense of $179,080 for the fiscal year 2025, compared to $182,847 in 2024, indicating a slight decrease of 1.4%[208]. - The Company recorded $1,620,103 in Employee Retention Credit (ERC) refunds, with net proceeds of $1,461,185 after accounting for consulting fees[172]. - The Company has recorded adequate provisions for pending legal actions and claims, indicating a proactive approach to litigation risks[216]. - The Company operates in two reportable segments: Agricultural Products and Modular Buildings, highlighting its diversified business model[217].