Way Manufacturing Co.,
Inc. (NASDAQ: ARTW), a leading manufacturer and distributor of agricultural
machinery, equipment and services is pleased to announce 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.
|
For the Three Months Ended
(Consolidated)
|
|
|
|
August 31, 2011
|
August 31, 2010
|
Change
|
|
|
$
|
9,252,063
|
$
|
10,581,783
|
-12.6%
|
|
|
$
|
1,437,907
|
$
|
1,270,882
|
13.1%
|
|
|
$
|
1,019,836
|
$
|
751,802
|
35.7%
|
|
|
$
|
0.25
|
$
|
0.19
|
|
|
|
$
|
0.25
|
$
|
0.19
|
|
|
Weighted avg.
shares outstanding:
|
|
|
|
|
|
|
|
|
4,019,874
|
|
3,992,182
|
|
|
|
|
4,042,135
|
|
4,003,766
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended
(Consolidated)
|
|
|
|
August 31, 2011
|
August 31, 2010
|
Change
|
|
|
$
|
21,761,551
|
$
|
22,909,802
|
-5.0%
|
|
|
$
|
1,327,126
|
$
|
1,606,163
|
-17.4%
|
|
|
$
|
826,002
|
$
|
886,707
|
-6.8%
|
|
|
$
|
0.21
|
$
|
0.22
|
|
|
|
$
|
0.20
|
$
|
0.22
|
|
|
Weighted avg. shares
outstanding:
|
|
|
|
|
|
|
|
|
4,016,039
|
|
3,991,381
|
|
|
|
|
4,049,706
|
|
4,000,863
|
|
|
|
|
|
|
|
|
|
Revenue: Our 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. Our 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,
our 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. The increase in margin during Q3 2011 compared to 2010
was due to our change in product mix. The year-to-date gross margin was 26.9%
compared to 27.3% as of August 31, 2010. The year-to-date margin decrease is
attributable to higher steel costs that impacted the margin on sales from
prior year whole goods sales orders.
Art's Way Vessels, our 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. We hired a new Production Manager on February 17,
2011, which has resulted in improvements to our overall shop flow and
cleanliness, and has improved our ability to control costs and increase net
revenue on a per-job basis. While we have not seen an immediate financial
impact, we are pleased with both the physical and procedural changes that
have been made in the factory and believe that the changes will be beneficial
to this segment. Over time, we anticipate manufacturing costs will decline
and that our margins will subsequently 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, our 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. We believe generally weak economic
conditions and government budget cuts have made sales in this segment
sluggish thus far. A majority of our customers have applied for federal
grant money, but have not received the necessary award amounts to proceed
with the projects as quoted. We are now working with those customers
who either are scaling their projects back or looking at leasing to meet
their funding requirements. We currently have three leased facilities and are
building more with the expectation of leasing. We intend to focus our sales
activities on entities that do not rely on governmental funding. Our backlog
in Scientific remains lower when compared to last year but continues to
climb. 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 we completed our fiscal year ending November 30,
2010 tax filings for
both Federal and State Taxing Authorities. We calculated a tax
provision reduction for the year ending November 30, 2010. The tax provision reduction
was recognized during the quarter ended August 31, 2011 and
brought our 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 endingAugust 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.
Domestic and global
economic indicators continue to signal a fragile and slow economic recovery.
Despite the difficult macro environment, we believe the Company's core
manufacturing segment remains strong. We intend to continue to execute our
business plan for fiscal year 2011 which includes continued pursuit of
additional acquisitions of complementary businesses or product lines,
sourcing and product cost management initiatives to partially offset
commodity cost increases, and implementation of numerous productivity
initiatives to reduce operating expense � particularly at Art's Way Vessels.
The Company's balance
sheet remains strong with working capital at a level consistent with our
business activity. Moving forward for the balance of the year, we will
continue to support our organic and strategic growth opportunities while
closely monitoring our spending. We are mindful of the importance of
continuing to invest in key growth initiatives, while still delivering
returns to our shareholders."
About Art's Way
Manufacturing, Inc.
Art's Way manufactures
and distributes farm machinery niche products including animal feed
processing equipment, sugar beet defoliators and harvesters, land maintenance
equipment, crop shredding equipment, round hay balers, plows, hay and forage
equipment, manure spreaders and top and bottom drive augers. After-market
service parts are also an important part of the Company's business. The
Company has two wholly owned subsidiaries. Art's Way Vessels, Inc.
manufactures pressurized tanks and vessels; Art's Way Scientific, Inc.
manufactures modular animal confinement buildings and modular laboratories.