Art's Way Manufacturing Co., Inc., a manufacturer and distributor of agricultural machinery, equipment and services has announced its financial results for the three and nine months ended August 31, 2011.

In conjunction with the release, the Company has scheduled a conference call for October 13, 2011 at 10:00 AM CDT. J. Ward McConnell, Jr., Chairman of the Board of Directors of Art's Way Manufacturing will be leading the call and discussing third quarter and nine month financial results and an outlook for the balance of 2011.

What: Art's Way Manufacturing Third Quarter & Nine Month Financial Results.

When: October 13, 2011 10:00 AM CT.

How: Live via phone by dialing (800) 624-7038. Code: Art's Way Manufacturing. Participants to the conference call should call in at least 5 minutes prior to the start time.

Financial Highlights For the Three and Nine Months Ended August 31, 2011:

  • Operating income for the three months ended August 31, 2011 increased 13.1% over 2010.
  • Net sales for the three months ended August 31, 2011 totaled $9.25 million.
  • Earnings Per Basic and Diluted Share for the three months ended August 31, 2011 were $0.25 versus $0.19 for the same period in 2010.

Revenue

The consolidated corporate sales for the three and nine month periods ending August 31, 2011 were $9,252,000 and $21,762,000 respectively, compared to $10,582,000 and$22,910,000 during the same respective periods in 2010, which is a $1,330,000 decrease for the quarter and $1,148,000 decrease year-to-date, or -12.6%, and -5.0% respectively. The Agricultural Products segment had the largest increase in year-to-date sales, while our Modular Buildings segment experienced the greatest loss.

Art's Way Manufacturing, their agricultural products segment, had sales for the third fiscal quarter of $7,771,000, compared to $7,725,000 during the same period of 2010, a 0.60% increase. Year-to-date sales were $18,091,000, which is up from $15,927,000 as of August 31, 2010, a 13.6% increase. Gross margin for the quarter ended August 31, 2011 was 30.7% compared to 27.8% for the same period in 2010.

Art's Way Vessels, their pressurized tank segment, had sales for the third fiscal quarter of $403,000, compared to $502,000 for the same period in 2010, a 19.7% decrease. Year-to-date sales were $1,368,000 in fiscal 2011, compared to $1,245,000 for the same period in 2010, a 9.9% increase. Gross margin for the quarter ended August 31, 2011 was 16.7% compared to -5.0% for the same period in 2010. Year-to-date gross margin was -6.0% compared to -4.4% as of August 31, 2010.

Art's Way Scientific, their modular buildings segment, had third fiscal quarter sales of $1,078,000, compared to $2,355,000 for the same period in fiscal 2010, a 54.2% decrease. Year-to-date sales were $2,302,000 in fiscal 2011, compared to $5,738,000 for the same period in 2010, a 59.9% decrease. Gross margin for the quarter ended August 31, 2011 was 23.9% compared to 19.4% for the same period in 2010. Year-to-date gross margin was 15.6% compared to 20.6% as of August 31, 2010, which was attributable to the lower sales volume.

Income

Consolidated operating income increased 13.1%, from $1,271,000 for the three months ended August 31, 2010 to $1,438,000, for the three months ended August 31, 2011, while net income for the three months ended August 31, 2011 increased 35.7%, from $752,000 in 2010 to $1,020,000 in 2011. Operating income for the nine months ended August 31, 2011 decreased 17.4%, to $1,327,000 from $1,606,000 for the same period in 2010. Net income for the nine months ended August 31, 2011 decreased 6.8% to $826,000 from $887,000 for the same period in 2010. The changes to net income were primarily attributable to the decrease in consolidated sales for the three and nine month periods, offset by a decrease in consolidated expenses and lower tax expense in 2011 due to recognition of a tax provision reduction during the quarter ended August 31, 2011.

Earnings per Share

Basic and diluted earnings per basic share increased 31.6% for the three months ended August 31, 2011 to $0.25 per share from $0.19 per share for the same period in 2010. Basic and diluted earnings per basic share decreased 4.5% and 9.0%, respectively, for the nine months ended August 31, 2011 to $0.21 and $0.20 per share from $0.22 and $0.22 per share, respectively, for the same period in 2010. The changes in earnings per share were primarily attributable to the changes to net income.

Income Taxes

During the quarter ended August 31, 2011 Art's Way completed their fiscal year ending November 30, 2010 tax filings for both Federal and State Taxing Authorities.  The tax provision reduction was recognized during the quarter ended August 31, 2011 and brought their effective tax rate down during the quarter and year to date ending August 31, 2011, to 25.2% and 23.7%, respectively. The tax provision effective tax rate for the comparative quarter and year to date ending August 31, 2010 was 35.6% and 35.0%, respectively. The tax provision benefit was due to taking advantage of additional tax deductions and credits for the fiscal year ended November 30, 2010.

J. Ward McConnell Jr., Chairman of the Board of Directors said, "While we are disappointed with our revenue growth for the three and nine months, we are pleased with our net income and earnings per share increases. Sales in the Company's core manufacturing business continued to grow, but the Company continued to struggle with revenue shortfall at both Art's Way Vessels and Art's Way Scientific."