ARMSTRONG, Iowa — 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 of fiscal 2017.
Sales: Consolidated sales for continuing operations for the 3- and 6-month periods ended May 31, 2017 were $4,689,000 and $9,111,000 compared to $5,298,000 and $11,011,000 during the same respective periods in 2016, a $609,000 or 11.5%, decrease for the second fiscal quarter and a $1,900,000 or 17.3% decrease for the 6 months. The decreases in revenue are primarily due to the decreased demand for our agricultural products and modular buildings. Consolidated gross margin for the 3-month period ended May 31, 2017 was 17.3% compared to 28.0% in the same period in fiscal 2016. Consolidated gross margin for the 6-month period ended May 31, 2017 was 21.1% compared to 28.3% for the same period in fiscal 2016. These decreased gross margins are largely attributable to the agricultural products segment.
Income (Loss) from Continuing Operations: Consolidated net (loss) from continuing operations was $(509,000) for the 3 months and $(763,000) for the 6 months ended May 31, 2017 compared to net income of $17,000 and $150,000 for the same respective periods in 2016. The decreased income from continuing operations was largely due to the decreased revenues for the first half of 2017.
Earnings (Loss) per Share from Continuing Operations: Loss per basic and diluted share from continuing operations for the second quarter of fiscal 2017 was ($0.12), compared to earnings per share from continuing operations of $0.00 for the same period in fiscal 2016. Loss per basic and diluted share from continuing operations for the 6-month period ended May 31, 2017 was ($0.18), compared to earnings per share from continuing operations of $0.04 for the same period in fiscal 2016.
Chairman of the Art's Way Board of Directors, Marc H. McConnell reports, “The results of our fiscal second quarter clearly demonstrate that we remain in very challenging times brought on by the downturn in the agricultural economy. While we have been working from a higher backlog than a year ago, we have also experienced delays in deliveries of certain products, a shift in our sales mix toward lower margin products, and elevated manufacturing expenses associated with launching new products that impacted our second quarter unfavorably.
“Since the end of the second quarter, we have made significant changes to our cost structure and have continued to work toward putting ourselves in the best position to have a more successful second half of the year. Despite our lack of profitability, we have continued to improve our business by maintaining focus on product development, product quality and customer service — cornerstones of our strategy that we are confident will benefit the company long-term. Additionally, we remain very committed to further improving our balance sheet and positioning ourselves to overcome the headwinds facing the industries we serve.
“We are working to improve our operations and are also seeing improvement in some of the markets we serve but remain cautious in our optimism for improving results in the near term.”