Art's Way Manufacturing
Co., Inc. (NASDAQ: ARTW), a leading manufacturer and distributor of
agricultural machinery, equipment and services today announced its first
quarter financial results for the three months endedFebruary 28, 2011.
In conjunction with the
release, the Company has scheduled a conference call for April 14th, 2011 at 10:00
AM Central Time. J.
Ward McConnell, Jr., Executive Chairman of the Board of Directors of
Art's Way Manufacturing will be leading the call and discussing first quarter
financial results, the status of the Company and an outlook for the balance
of 2011.
What:
Art's Way Manufacturing First Quarter Financial Results Conference Call
When: April 14th, 2011 10:00 AM Central Time.
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.
Historical selected
financial data related to all operations:
|
|
|
For the Three Months Ended
|
|
|
February 28, 2011
|
February 28, 2010
|
|
|
$
|
4,664,000
|
$
|
5,580,000
|
|
|
$
|
(659,000)
|
$
|
123,000
|
|
|
$
|
(485,000)
|
$
|
34,000
|
|
|
$
|
(0.12)
|
$
|
0.01
|
|
|
$
|
(0.12)
|
$
|
0.01
|
|
Weighted avg. shares
outstanding:
|
|
|
|
|
|
|
|
4,010,068
|
|
3,990,352
|
|
|
|
4,010,068
|
|
3,991,900
|
|
|
|
|
|
|
|
Revenue: Total revenue
decreased 16% from $5.58 million for
the first fiscal quarter of 2010 to $4.66 million for
the three months endedFebruary 28, 2011. Art's Way Manufacturing Co., Inc. and
Art's Way Vessels, Inc. increased their three-month revenue by 2% and 114%
respectively. These increases were offset by a 74% decrease in revenue for
Art's Way Scientific Co., Inc. during this same time period.
Income: We incurred an operating loss
of $659,000 for the first fiscal
quarter of 2011, compared to operating income of $123,000 for
the same period in 2010. Net loss for the first fiscal quarter of 2011
was $485,000 compared to net income
of $34,000 for the same period in 2010.
Consolidated gross profit
margin for the first fiscal quarter of 2011 was 10%, compared to 24% for the
same period one year ago. Each of our segments saw a decrease in gross profit
margin, except Art's Way Vessels, Inc., when compared to the same period in
2010.
The gross profit margin
of Art's Way Manufacturing decreased from 29% in the first fiscal quarter of
2010 to 17% in the three-month period ending February
28, 2011. This decrease in gross margin for the quarter was
primarily due to the expenses associated with preparing ourWest Union, Iowa facility
for production and the carrying cost of the facility. We currently have
two production lines established and are working to increase the efficiency
of those lines and train the new employees at this facility. We are
also in the planning stages of transferring two additional lines.
The gross profit margin
of Art's Way Vessels increased from -35% in the first fiscal quarter of 2010
to -19% in the three-month period endingFebruary 28, 2011.
We hired a Production Manager on February 17,
2011. We expect this hire to result in more efficient production
and improved cost control, which we believe will lead to higher gross margins
at Art's Way Vessels. In addition, we believe it will allow our General
Manager to focus on sales opportunities.
The gross profit margin
of Art's Way Scientific decreased from 24% in the first fiscal quarter of
2010 to -3% in the three-month period endingFebruary 28, 2011.
This decrease in gross profit margin, resulted from
sluggish and erratic sales, which we believe was due to general economic
conditions.
Earnings per Share:
We incurred
a loss per basic share of $-0.12 for
the three months ended February 28, 2011 as
compared to earnings per basic share of $0.01 for
the three months ended February 28, 2010.
J.
Ward McConnell Jr., Executive Chairman of the Board of Directors said, "It is
important to note that both Art's Way Manufacturing and Art's Way Vessels had
increases to sales in the first quarter. Art's Way Scientific � Buildings for
Science - had a decrease of $1,276,000.
Scientific has been experiencing longer than expected approval processes as a
result of the economic downturn and the lack of government stimulus funding.
Many of Scientific's customers are government
entities and universities. These organizations are struggling not only with
funding, but many are facing budget cuts. On the positive side, we
continue to have exceptional interest in our modular laboratories, and, as a
result of the lack of funding, customers are turning to Scientific for
leasing alternatives. We currently have three laboratories leased and are building
more for the express purpose of leasing. We believe this will allow us
to generate revenue from the lease and sell the facility when funding becomes
available or re-lease for another project. Scientific's
lease and contract manufacturing backlog is climbing slowly and we are
confident we are the 'supplier of choice' and can grow this segment by both
leasing and sole-source manufacturing.
"As for Art's Way
Vessels, I am pleased to report we have hired Mr. Larry
Cornell as Production Manager in charge of production and plant
efficiency. Pat O'Neill, General Manager, will lead our sales team. Mr.
Cornell, a 30-year manufacturing veteran, brings an extensive background in
welding shops, project and manufacturing management. He has a track record of
success and is a proven leader who is committed to the company's mission of
providing customers with pressure vessels that are built with consistent
quality, delivered in a timely manner and priced competitively. He will be a
great asset as we move forward with building a stronger Vessels division.
"The biggest setback
this quarter was our gross margins at Art's Way Manufacturing, but this was
expected and hopefully is a temporary occurrence. The decrease in gross
margin for the quarter is primarily due to increased start up costs in West Union. In 2010, we purchased 29 acres,
190,000 square foot manufacturing/office facility in West Union, Iowa. We have moved a significant
amount of inventory to this location and are in the process of preparing the
building for additional production. Many of our costs have gone up for
this new facility while we have not yet realized the increase in production
for the facility. We currently have two production lines set up and are
working to increase the efficiency of those lines and train new employees.
This is an outstanding facility. We expect to realize its benefits in
the future and long term, as we believe it will allow us to gain valuable
production space, increase production and will allow us to accommodate future
acquisitions.
"We believe the
long-term market opportunity is exceptional for our Company and we are
optimistic about the remainder of the year."
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, crop shredding equipment, 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.
We have 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.
For More Information,
Contact: Jim Drewitz, Investor Relations
830-669-2466 jim@jdcreativeoptions.com
Or visit the Company's
website at www.artsway-mfg.com/
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: (i)
our goal to increase production at our West
Union, Iowa facility and transfer two additional lines to that
facility, and the expected short and long term benefits of the West Union, Iowa Facility; (ii) the anticipated
increase in demand for modular science laboratories; (iii) the anticipated
benefits from hiring a Production Manager at Art's Way Vessels; and (iv) our
belief regarding the Company's long-term market opportunity and performance
during the remainder of the year, 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,
quarterly fluctuations in results, customer demand for the Company's
products, domestic and international economic conditions, the cost of raw
materials, the management of growth, the availability of investment
opportunities, and other factors detailed from time to time in the Company's
Securities and Exchange Commission filings. Actual results may differ
markedly from management's expectations. The Company cautions readers not to
place undue reliance upon any such forward-looking statements.
SOURCE Art's Way
Manufacturing Co., Inc.