UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 8, 2019
ART’S-WAY MANUFACTURING CO., INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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(State or other jurisdiction of incorporation) |
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000-05131 |
42-0920725 |
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(Commission File Number) |
(IRS Employer |
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Identification No.) |
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5556 Highway 9 Armstrong, Iowa 50514 |
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(Address of principal executive offices) (Zip Code) |
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(712) 864-3131 |
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(Registrant’s telephone number, including area code) |
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Not Applicable |
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(Former name or former address, if changed since last report.) |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On April 8, 2019, Art’s-Way Manufacturing Co., Inc. (the “Company”) issued a press release announcing its financial results for the first quarter of fiscal year 2019, ended February 28, 2019. The full text of the press release is set forth in Exhibit 99.1 attached hereto and is incorporated by reference in this Current Report on Form 8-K as if fully set forth herein.
The information contained in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto and incorporated herein, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any registration statement pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements: None
(b) Pro forma financial information: None
(c) Shell Company Transactions: None
(d) Exhibits:
99.1 Press Release dated April 8, 2019.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: April 8, 2019
| ART’S-WAY MANUFACTURING CO., INC. | ||
| /s/ Carrie L. Gunnerson | ||
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Carrie L. Gunnerson President and Chief Executive Officer and Interim Chief Financial Officer |
Exhibit 99.1
FOR IMMEDIATE RELEASE
April 8, 2019
ART’S WAY MANUFACTURING ANNOUNCES FIRST QUARTER FISCAL 2019 FINANCIAL RESULTS
ARMSTRONG, IOWA, April 8, 2019 – 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.
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For the Three Months Ended |
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(Continuing Operations, Consolidated) |
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February 28, 2019 |
February 28, 2018 |
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Sales |
$ |
4,124,000 |
$ |
5,366,000 |
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Operating (Loss) |
$ |
(723,000) |
$ |
(309,000) |
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Net (Loss) |
$ |
(606,000) |
$ |
(527,000) |
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EPS (Basic) |
$ |
(0.14) |
$ |
(0.13) |
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EPS (Diluted) |
$ |
(0.14) |
$ |
(0.13) |
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Weighted Average Shares Outstanding: |
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Basic |
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4,243,707 |
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4,170,818 |
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Diluted |
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4,243,707 |
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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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