artw20260228

artw20260228_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended February 28, 2026

☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to ______

Commission File No. 000-05131

ART’S-WAY MANUFACTURING CO., INC.

(Exact name of registrant as specified in its charter)

Delaware	42-0920725
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5556 Highway 9

Armstrong, Iowa 50514

(Address of principal executive offices) (Zip Code)

(712) 208-8467

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock $0.01 par value	ARTW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Non-accelerated filer ☒

Accelerated filer ☐

Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of common shares outstanding as of April 1, 2026: 5,181,386

PART I – FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of February 28, 2026 and November 30, 2025	1
	Condensed Consolidated Statements of Operations for the Three-Month Periods ended February 28, 2026 and February 28, 2025	2
	Condensed Consolidated Statements of Stockholders’ Equity for the Three-Month Periods ended February 28, 2026 and February 28, 2025	3
	Condensed Consolidated Statements of Cash Flows for the Three-Month Periods ended February 28, 2026 and February 28, 2025	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	17
PART II – OTHER INFORMATION		18
Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Mine Safety Disclosures	18
Item 5.	Other Information	18
Item 6.	Exhibits	19
	SIGNATURES	20

	(Unaudited)
	*February 28, 2026*			*November 30, 2025*
Assets
Current assets:
Cash	$	2,937		$	4,849
Receivables, net		3,434,127			2,201,879
Inventories, net		12,069,850			11,708,242
Cost and profit in excess of billings		572,840			379,547
Other current assets		873,947			487,020
Total current assets		16,953,701			14,781,537

Property, plant, and equipment, net		5,099,359			5,082,406
Assets held for lease, net		141,950			144,618
Deferred income taxes, net		2,003,222			2,060,934
Other assets		365,600			408,060
Total assets	$	24,563,832		$	22,477,555
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,679,006		$	902,326
Customer deposits		830,578			88,920
Billings in excess of cost and profit		879,293			430,712
Income taxes payable		15,000			15,000
Accrued expenses		963,443			1,327,569
Line of credit		3,431,937			3,252,437
Current portion of finance lease liabilities		255,143			255,748
Insurance premium finance liability		167,108			-
Current portion of long-term debt		167,811			165,326
Total current liabilities		8,389,319			6,438,038

Long-term portion of finance lease liabilities		345,785			408,154
Long-term debt, excluding current portion		2,283,081			2,325,103
Total liabilities		11,018,185			9,171,295
Commitments and Contingencies (Notes 8, 10, 11 and 14)
Stockholders’ equity:
Undesignated preferred stock - $0.01 par value. Authorized 500,000 shares on February 28, 2026 and November 30, 2025; issued and outstanding 0 shares on February 28, 2026 and November 30, 2025.		-			-
Common stock – $0.01 par value. Authorized 9,500,000 shares on February 28, 2026 and November 30, 2025; 5,295,673 issued on February 28, 2026 and 5,225,423 on November 30, 2025		52,957			52,254
Additional paid-in capital		5,241,409			5,199,167
Retained earnings		8,559,969			8,363,527
Treasury stock, at cost (113,589 shares on February 28, 2026 and 113,589 shares on November 30, 2025)		(308,688	)		(308,688	)
Total stockholders’ equity		13,545,647			13,306,260
Total liabilities and stockholders’ equity	$	24,563,832		$	22,477,555

	Three Months Ended
	*February 28, 2026*			*February 28, 2025*
Sales	$	6,640,285		$	5,140,955
Cost of goods sold		4,728,825			3,644,446
Gross profit		1,911,460			1,496,509
Expenses
Engineering		106,548			85,230
Selling		436,703			349,977
General and administrative		1,038,192			1,058,817
Total expenses		1,581,443			1,494,024
Income (loss) from operations		330,017			2,485

Other income (expense):
Interest expense		(110,777	)		(75,688	)
Other		36,208			2,794
Total other income (expense)		(74,569	)		(72,894	)
Income (loss) before income taxes		255,448			(70,409	)
Income tax expense (benefit)		59,006			(14,652	)
Net income (loss)	$	196,442		$	(55,757	)

	*Common Stock*				*Additional*					*Treasury Stock*
	*Number of*				*paid-in*		*Retained*			*Number of*
	*shares*		*Par value*		*capital*		*earnings*			*shares*		*Amount*			*Total*

Balance, November 30, 2024		5,149,173	$	51,492	$	5,020,849	$	7,328,628			112,714	$	(307,146	)	$	12,093,823
Stock based compensation		51,000		510		43,709		-			875		(1,542	)		42,677
Net loss		-		-		-		(55,757	)		-		-			(55,757	)
Balance, February 28, 2025		5,200,173	$	52,002	$	5,064,558	$	7,272,871			113,589	$	(308,688	)	$	12,080,743

	*Three Months Ended February 28, 2026*
	Agricultural Products		Modular Buildings		Total
Farm equipment	$	2,884,000	$	-	$	2,884,000
Farm equipment service parts		790,000		-		790,000
Modular buildings		-		2,881,000		2,881,000
Modular building lease income		-		-		-
Other		80,000		5,000		85,000
	$	3,754,000	$	2,886,000	$	6,640,000

	*Three Months Ended February 28, 2025*
	Agricultural Products		Modular Buildings		Total
Farm equipment	$	1,994,000	$	-	$	1,994,000
Farm equipment service parts		883,000		-		883,000
Modular buildings		-		2,119,000		2,119,000
Modular building lease income		-		46,000		46,000
Other		71,000		28,000		99,000
	$	2,948,000	$	2,193,000	$	5,141,000

	*Three Months Ended*			*Three Months Ended*
	*February 28, 2026*			*February 28, 2025*
Balance, beginning	$	60,601		$	108,636
Provision charged to expense		(27,415	)		(2,400	)
Less amounts charged-off		-			-
Balance, ending	$	33,186		$	106,236

	*February 28, 2026*		*November 30, 2025*
Receivables	$	3,434,000	$	2,202,000
Assets (cost and profit in excess of billings)		573,000		380,000
Liabilities (billings in excess of profit and customer deposits)		1,710,000		520,000

	*For the Three Months Ended*
	*February 28, 2026*		*February 28, 2025*
Numerator for basic and diluted net income (loss) per share:

Net income (loss)	$	196,442	$	(55,757	)

Denominator:
For basic net income (loss) per share - weighted average common shares outstanding		5,140,165		5,054,665
Effect of dilutive stock options		-		-
For diluted net income (loss) per share - weighted average common shares outstanding		5,140,165		5,054,665


Net Income (loss) per share - Basic:
Net income (loss) per share	$	0.04	$	(0.01	)

Net Income (loss) per share - Diluted:
Net income (loss) per share	$	0.04	$	(0.01	)

	*February 28, 2026*			*November 30, 2025*
Raw materials	$	8,598,022		$	8,272,500
Work in process		280,462			387,332
Finished goods		5,415,058			5,441,067
Total Gross Inventory	$	14,293,542		$	14,100,899
Less: Reserves		(2,223,692	)		(2,392,657	)
Net Inventory	$	12,069,850		$	11,708,242

	Three Months Ended
	*February 28, 2026*			*February 28, 2025*
Cash flows from operations:
Net income (loss)	$	196,442		$	(55,757	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock based compensation		42,945			44,219
Decrease in obsolete inventory reserves		(136,971	)		(2,142	)
Gain on disposal of property, plant, and equipment		(4,100	)		-
Depreciation and amortization expense		204,591			208,072
Amortization of cloud computing implementation costs		-			30,455
Increase (decrease) in allowance for expected credit losses - receivables		(27,415	)		(2,399	)
Deferred income taxes		57,712			(15,090	)
Changes in assets and liabilities:
(Increase) decrease in:
Receivables		(1,204,833	)		967,864
Inventories		(224,637	)		(551,027	)
Cost and profit in excess of billings		(193,293	)		(74,946	)
Other assets		(164,838	)		(241,923	)
Increase (decrease) in:
Accounts payable		776,680			768
Billings in excess of cost and profit		448,581			(773,529	)
Customer deposits		741,658			811,067
Income taxes payable		-			(500	)
Accrued expenses		(364,127	)		(446,937	)
Net cash provided by (used in) operating activities		148,395			(101,805	)
Cash flows from investing activities:
Purchases of property, plant, and equipment		(176,415	)		(82,730	)
Net proceeds from sale of assets		4,100			-
Net cash used in investing activities		(172,315	)		(82,730	)
Cash flows from financing activities:
Net change in line of credit		179,500			271,000
Principal payments on finance lease obligations		(62,974	)		(53,968	)
Principal payments on financed insurance premiums		(54,981	)		-
Repayment of term debt		(39,537	)		(28,682	)
Repurchases of common stock		-			(1,542	)
Net cash provided by financing activities		22,008			186,808
Net increase in cash		(1,912	)		2,273
Cash at beginning of period		4,849			1,860
Cash at end of period	$	2,937		$	4,133

	*February 28, 2026*		*November 30, 2025*
Bank Midwest loan payable in monthly installments of $19,648 including interest at 6.25%, due October 1, 2037	$	1,637,455	$	1,666,762
Bank Midwest loan payable in monthly installments of $6,102 including interest at 6.25%, due October 5, 2035		505,156		514,406
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning December 18, 2022, due June 18, 2050		153,645		154,381
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning December 24, 2022, due June 24, 2050		154,636		154,880
Total term debt	$	2,450,892	$	2,490,429
Less current portion of term debt		167,811		165,326
Term debt, excluding current portion	$	2,283,081	$	2,325,103

Year	Amount
2027	$	167,811
2028		179,706
2029		192,317
2030		206,669
2031		506,995
2032 and thereafter		1,197,394
	$	2,450,892

	*February 28, 2026*		*November 30, 2025*
Salaries, wages, and commissions	$	459,263	$	729,429
Accrued warranty expense		230,905		225,000
Other		273,275		373,140
Total accrued expenses	$	963,443	$	1,327,569

	*Three Months Ended (Continuing Operations)*
	*February 28, 2026*			*February 28, 2025*
Balance, beginning	$	225,000		$	225,186
Provision charged to expense		77,939			85,040
Less amounts charged-off		(72,034	)		(119,395	)
Balance, ending	$	230,905		$	190,831

	*February 28, 2026*		*November 30, 2025*
Finance lease right-of-use assets (net of amortization in other assets)	$	327,586	$	368,720

Current portion of finance lease liabilities	$	255,143	$	255,748
Long-term portion of finance lease liabilities		345,785		408,154
Total finance lease liabilities	$	600,928	$	663,902

Exhibit No.	Description
3.1	Conformed Certificate of Incorporation of Art’s-Way Manufacturing Co., Inc. – incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2020.
3.2	Conformed Bylaws of Art’s-Way Manufacturing Co., Inc.– incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2020.
10.1	Solar System Purchase Agreement, dated as of December 19, 2025, by and between Art's-Way Manufacturing Co., Inc., and Midwest Solar Installers - incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on December 29, 2025.
10.2	Change in Terms Agreement (Mortgage), Between Bank Midwest and Art's Way Manufacturing Co., Inc. dated March 19, 2026 - filed herewith.
10.3	Change in Terms Agreement (Roof Loan), Between Bank Midwest and Art's Way Manufacturing Co., Inc. dated March 19, 2026 - filed herewith.
10.4	Promissory Note, Between Bank Midwest and Art's Way Manufacturing Co., Inc. dated March 19, 2026 - filed herewith.
31.1	Certification of Chief Executive Officer pursuant to 17 CFR 13a-14(a) – filed herewith.
31.2	Certification of Chief Financial Officer pursuant to 17 CFR 13a-14(a) – filed herewith.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 - furnished herewith.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 - furnished herewith.
101	The following materials from this report, formatted in iXBRL (Inline Extensible Business Reporting Language) are filed herewith: (i) condensed consolidated balance sheets, (ii) condensed consolidated statement of operations, (iii) condensed consolidated statements of stockholders' equity, (iv) condensed consolidated statements of cash flows, and (v) the notes to the condensed consolidated financial statements.
104	Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101).

	ART’S-WAY MANUFACTURING CO., INC.



Date: April 13, 2026	By: /s/ Marc H. McConnell
	Marc H. McConnell
	President, Chief Executive Officer and Chairman

Date: April 13, 2026	By: /s/ Michael W. Woods
	Michael W. Woods
	Chief Financial Officer

SEC Form 10-Q filed by Art's-Way Manufacturing Co. Inc.