ARMSTRONG, Iowa, April 8, 2019 /PRNewswire/ -- Art's Way
Manufacturing Co., Inc. (Nasdaq: ARTW), a diversified,
international manufacturer and distributor of equipment serving
agricultural, research and steel cutting needs, announces its
financial results for the first quarter of fiscal 2019.
|
For the Three
Months Ended
|
(Continuing
Operations, Consolidated)
|
|
February 28,
2019
|
February 28,
2018
|
Sales
|
$
|
4,124,000
|
$
|
5,366,000
|
Operating
(Loss)
|
$
|
(723,000)
|
$
|
(309,000)
|
Net (Loss)
|
$
|
(606,000)
|
$
|
(527,000)
|
EPS
(Basic)
|
$
|
(0.14)
|
$
|
(0.13)
|
EPS
(Diluted)
|
$
|
(0.14)
|
$
|
(0.13)
|
|
|
|
|
|
Weighted Average
Shares Outstanding:
|
|
|
|
|
Basic
|
|
4,243,707
|
|
4,170,818
|
Diluted
|
|
4,243,707
|
|
4,170,818
|
Sales: Our consolidated corporate sales for continuing
operations for the three-month period ended February 28, 2019 were $4,124,000 compared to $5,366,000 during the same period in fiscal 2018,
a decrease of $1,242,000, or 23.1%.
The decrease in revenue is due to decreased demand across our
grinder, manure spreader and OEM blower product lines and the
liquidation of our Canadian subsidiary from our agricultural
products segment. Some of the decreased demand is due to
economic factors such as commodity prices and price increases that
we implemented to our customers due to increased material costs,
mainly steel. Also, in 2018 we sold off aged manure spreader
inventory at decreased margins, which led to decreased sales of
manure spreaders in 2019. We introduced new manure spreader
models to our product line at the end of fiscal 2018 and have seen
some early success with demand for this product in 2019. Our
OEM blower sales are down as our OEM blower customer elected not to
purchase any blowers from us in 2019 due to slow-moving inventory
on their dealer lots related to poor agricultural market
conditions. Our sales in the modular buildings segment were
up 38.3% due to additional lease income from leased modular
buildings that were put into service in fiscal 2018. Our
modular building backlog is strong and includes a $8.4 million project that is scheduled to be
completed entirely in 2019. We are continuing to quote an
unprecedented amount of modular buildings for our business after
the restructuring of our sales and management teams in 2018 and are
excited for the potential of this segment in the years to come.
Our sales in the tools segment are down 29.4% from the first
quarter of fiscal 2018 due to the loss of a large volume customer
at the end of the first quarter of fiscal 2018. Consolidated
gross margin for the three-month period ended February 28, 2019 was 14.7% compared to 20.9% for
the same period in fiscal 2018. Our decreased gross margin is
attributable to less revenue available to cover fixed overhead from
our agricultural products and tools segments. The modular
buildings segment is contributing to decreased gross margin through
increased direct labor to handle large upcoming projects and an
increase in depreciation on leased modular buildings.
Income (Loss) from Continuing Operations:
Consolidated net (loss) from continuing operations before income
taxes was $(781,000) for the
three-month period ended February 28,
2019 compared to net (loss) from continuing operations
before income taxes of $(306,000) for
the same period in fiscal 2018. The increased net (loss) from
continuing operations is primarily due to less revenue available to
covered fixed costs in our agricultural products and tools
segments. We have taken steps to reduce expenses as a result
of the soft market conditions for our agricultural products
segment, while continuing to invest in product development and
improvements to support our customers for the long term.
Operations: (Loss) per basic and diluted share from
continuing operations for the first quarter of fiscal 2019 was
$(0.14), compared to (loss) per basic
and diluted share from continuing operations of $(0.13) for the same period in fiscal
2018.
Chairman of the Art's Way Board of Directors, Marc H. McConnell reports, "Results for our
fiscal first quarter reflected the ongoing headwinds facing the
agricultural equipment industry due to a variety of significant
factors discussed over many preceding quarters. Low commodity
prices, trade concerns, severe uncertainty, elevated steel prices,
and other factors have created an environment not conducive to
robust equipment sales activity for our company and peers
alike. We have continued to position the company to withstand
these conditions going forward by continuing to reduce inventory,
reduce borrowings, simplify operations, support lean initiatives,
and develop compelling new product offerings. We will continue to
focus on these fundamentals and feel that we are improving our
business as a result of our efforts, even if present day
circumstances don't yet allow that to translate to the bottom
line.
"We are enthused to have significant backlog in front of us at
our Art's Way Scientific business that will impact future quarters,
as well as other positive opportunities we are pursuing in our
Tools business that may also impact our performance during the
fiscal year. On all fronts we remain committed to improving our
operations every day and continuing to position ourselves for the
long-term, sustainable profitability that has proven elusive during
these difficult few years."
About Art's Way Manufacturing Co., Inc.
Art's Way manufactures and distributes farm machinery niche
products including animal feed processing equipment, sugar beet
defoliators and harvesters, land maintenance equipment, plows, hay
and forage equipment, manure spreaders, reels for combines and
swathers, and top and bottom drive augers, as well as modular
animal confinement buildings and laboratories, and specialty tools
and inserts. After-market service parts are also an important part
of Art's Way's business. Art's Way has three reporting segments:
agricultural products; modular buildings; and tools.
For more information contact: Carrie Gunnerson, President, Chief Executive
Officer and Interim Chief Financial Officer
712-864-3131
investorrelations@artsway-mfg.com
Or visit the Company's website at
www.artsway-mfg.com/
Cautionary Statements
This news release includes "forward-looking statements" within
the meaning of the federal securities laws. Statements made in this
release that are not strictly statements of historical facts,
including our expectations regarding: (i) our business position;
(ii) future results; (iii) future operational changes; (iv) future
costs of materials; (v) the timing of increased performance; and
(vi) the benefits of our business model and strategy, are
forward-looking statements. Statements of anticipated future
results are based on current expectations and are subject to a
number of risks and uncertainties, including, but not limited to:
customer demand for our products; credit-worthiness of our
customers; our ability to operate at lower expense levels; our
ability to complete projects in a timely and efficient manner in
accordance with customer specifications; our ability to renew or
obtain financing on reasonable terms; our ability to repay current
debt, continue to meet debt obligations and comply with financial
covenants; domestic and international economic conditions,
including the impact of tariffs; factors affecting the strength of
the agricultural sector; the cost of raw materials; unexpected
changes to performance by our operating segments; and other factors
detailed from time to time in our Securities and Exchange
Commission filings. Actual results may differ markedly from
management's expectations. We caution readers not to place undue
reliance upon any such forward-looking statements. We do not
intend to update forward-looking statements other than as required
by law.
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SOURCE Art's Way Manufacturing Co., Inc.