ARMSTRONG, Iowa, July 9, 2020 /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 second quarter and year to date fiscal
2020.
|
For the Three
Months Ended
|
(Consolidated)
|
|
May 31,
2020
|
May 31,
2019
|
Sales
|
$
|
5,446,000
|
$
|
5,747,000
|
Operating
(Loss)
|
$
|
(925,000)
|
$
|
(370,000)
|
Net (Loss)
|
$
|
(802,000)
|
$
|
(356,000)
|
EPS
(Basic)
|
$
|
(0.18)
|
$
|
(0.08)
|
EPS
(Diluted)
|
$
|
(0.18)
|
$
|
(0.08)
|
|
|
|
|
|
Weighted Average
Shares Outstanding:
|
|
|
|
|
Basic
|
|
4,401,754
|
|
4,299,289
|
Diluted
|
|
4,401,754
|
|
4,299,289
|
|
|
|
For the Six Months
Ended
|
(Consolidated)
|
|
May 31,
2020
|
May 31,
2019
|
Sales
|
$
|
10,472,000
|
$
|
9,871,000
|
Operating
(Loss)
|
$
|
(1,394,000)
|
$
|
(1,092,000)
|
Net (Loss)
|
$
|
(1,239,000)
|
$
|
(962,000)
|
EPS
(Basic)
|
$
|
(0.28)
|
$
|
(0.23)
|
EPS
(Diluted)
|
$
|
(0.28)
|
$
|
(0.23)
|
|
|
|
|
|
Weighted Average
Shares Outstanding:
|
|
|
|
|
Basic
|
|
4,358,982
|
|
4,272,532
|
Diluted
|
|
4,358,982
|
|
4,272,532
|
Sales: Our consolidated corporate sales for
continuing operations for the three- and six-month periods ended
May 31, 2020 were $5,446,000 and $10,472,000, respectively, compared to
$5,747,000 and $9,871,000 during the same respective periods in
fiscal 2019, a $301,000, or 5.2%,
decrease for the three months and a $601,000, or 6.1%, increase for the six months.
The three-month decrease in revenue is due to decreased revenue
from our agricultural products segment and poor market conditions.
We showed increased sales in our modular buildings and tools
segments for the three and six months ended May 31, 2020 compared to same periods of fiscal
2019.
Our second quarter sales in our agricultural products segment
were $3,071,000 compared to
$3,637,000 during the same period of
fiscal 2019, a decrease of $566,000,
or 15.6%. Our year-to-date agricultural product sales were
$6,023,000 compared to $6,247,000 during the same period in fiscal 2019,
a decrease of $224,000, or 3.6%.
While sales in our agricultural products segment were up 13.1% at
the end of our first quarter in fiscal 2020, our second quarter
included new challenges, most of which were driven by the COVID-19
pandemic. We saw decreased orders through the second quarter as
restaurants across the nation were forced to close their doors in
response to the pandemic. The restaurant closings reduced demand
for agricultural products, which in turn decreased our orders. We
did show approximately $1,400,000 in
increased sales for the six months ended May
31, 2020 compared to the same period in fiscal 2019 for dump
boxes, manure spreaders and service parts, but our largest sales
decrease for the six months ended May 31,
2020 compared to the same period of fiscal 2019 was for UHC
reels. The decrease was approximately $500,000 and was the result of a strategic
decision to focus on products that offer this segment a higher
standard gross profit margin. Additionally, our sales of grinders
are down approximately $414,000 for
the six months ended May 31, 2020
compared to the same period of fiscal 2019 as the shift from small
farms to larger commercial operations continues to transition.
Our second quarter sales in our modular buildings segment were
$1,799,000 compared to $1,558,000 for the same period in fiscal 2019, an
increase of $241,000, or 15.5%.
Our year-to-date sales in our modular buildings segment were
$3,256,000 compared to $2,580,000 for the same period in fiscal 2019, an
increase of $676,000, or 26.2%. In
the first and second quarters of fiscal 2019, we struggled to get
jobs under contract. By comparison, our first and second quarters
of fiscal 2020 reflect many jobs under contract, which has driven
the increases in sales. Research buildings have made up the
majority of our revenue base as agriculture continues to
struggle.
Our tools segment had sales of $576,000 and $1,193,000 during the three- and six-month
periods ended May 31, 2020,
respectively, compared to $552,000
and $1,044,000 for the same
respective periods in fiscal 2019, a 4.3% increase and a 14.3%
increase, respectively. The increase is due to the addition
of a large volume OEM customer that was added to our product
offering in the third quarter of fiscal 2019. This customer has
offered us stability as the oil and gas markets declined during the
COVID-19 pandemic.
Net Loss: Consolidated net loss was $(802,000) for the three-month period ended
May 31, 2020 compared to net loss of
$(356,000) for the same period in
fiscal 2019. Our consolidated net loss for the six months ended
May 31, 2020 was $(1,239,000) compared to $(962,000). Despite the increased net loss for
the three and six months we did show substantial operational
improvement. Our sales were up for the three and six months ended
May 31, 2020 in two out of three
segments. Our consolidated gross profit was up 3.8% and 3.0% for
the three and six months ended May 31,
2020, respectively. We were heavy on administrative expenses
related to finding and training new management staff, implementing
an OEM product line and properly rewarding our employees for their
continued service during the pandemic as our segments operate as
essential businesses. Without these additional administrative
expenses, we would have shown significant bottom line improvement
for the six months ended May 31, 2020
compared to 2019.
Loss per Share: Loss per basic and diluted share from
continuing operations for the second quarter of fiscal 2020 was
$(0.18), compared to loss per basic
and diluted share from continuing operations of $(0.08) for the same period in fiscal 2019.
Loss per basic and diluted share from continuing operations for the
six months ended May 31, 2020 was
$(0.28), compared to loss per basic
and diluted share from continuing operations of $(0.23) for the same period in fiscal
2019.
Chairman of the Art's Way Board of Directors, Marc H. McConnell reports, "The second quarter
brought challenges that none of us could have foreseen. The
disruptions to labor availability and incoming order activity
brought on by COVID-19 were significant. Despite this we
managed to continue making meaningful operational improvements
during the quarter and feel that we are weathering the storm well
under these circumstances. Our bottom line for the quarter was
negatively impacted by non-recurring administrative expenses, thus
obscuring some of the improvements we have made. Going
forward we are monitoring market conditions closely and will make
any adjustments needed as we navigate through these uncertain times
while focusing on the fundamentals that will make enhance our
market position in the long term."
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, 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, Chief Executive Officer
712-864-3131
investorrelations@artsway-mfg.com
Or visit our website at www.artsway-mfg.com/
Cautionary Statements
This 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) the impact of cost-cutting measures; (iii) future results,
including the timing of increased performance; (iv) the impact of
the COVID-19 pandemic; and (v) 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; the
ongoing COVID-19 pandemic; factors affecting the strength of the
agricultural sector; the cost of raw materials; unexpected changes
to performance by our operating segments; obstacles related to
liquidation of product lines and 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.