Art's-Way Manufacturing Reports $5.14 Million Revenue, 10.2% Decrease, and Improved Gross Margin

Art’s-Way Manufacturing Co., Inc. reported a consolidated revenue of $5.14 million for the three months ended February 28, 2025, reflecting a decrease of 10.2% from $5.72 million in the same period of the previous fiscal year. The company experienced a gross profit of $1.50 million, resulting in a gross margin of 29.1%, an increase from 25.7% year-over-year. Despite the decline in sales, the company managed to reduce its net loss from continuing operations to $55,757, compared to a loss of $424,259 in the prior year, indicating improved operational efficiency.

The decrease in revenue was primarily attributed to a significant drop in the Agricultural Products segment, which saw sales fall by 30.4% to $2.95 million from $4.24 million. This decline was influenced by rising interest rates, decreasing commodity prices, and a reduction in expected net farm incomes. Conversely, the Modular Buildings segment reported a 47.5% increase in sales, reaching $2.19 million, driven by a strong demand backlog and effective project management. The company has also made strategic staffing changes, including the appointment of a new Director of Business Development and Sales, to enhance sales opportunities.

Operationally, Art’s-Way Manufacturing has focused on right-sizing its workforce and reducing expenses, which has contributed to a decrease in selling and administrative expenses. Selling expenses dropped to $350,000 from $463,000, while administrative expenses decreased to $1.06 million from $1.23 million. The company’s total assets as of February 28, 2025, were reported at $21.00 million, a slight decrease from $21.24 million at the end of the previous fiscal year. The company’s order backlog also decreased significantly, down 45.7% to $6.20 million compared to $11.42 million a year earlier.

Looking ahead, Art’s-Way Manufacturing anticipates that ongoing destocking of dealer inventory will stabilize demand for its agricultural products. The company expects to benefit from potential interest rate cuts in fiscal 2025, which could stimulate economic growth. Management remains committed to reducing manufacturing and overhead costs while navigating the current agricultural downturn. The company is also optimistic about the potential for cash inflows from Employer Retention Credit refunds, although the timing remains uncertain. Overall, Art’s-Way Manufacturing is positioning itself to improve performance in a challenging market environment.