Arts-Way Manufacturing | 10-Q: FY2025 Q2 Revenue: USD 6.337 M

Revenue: As of FY2025 Q2, the actual value is USD 6.337 M.

EPS: As of FY2025 Q2, the actual value is USD 0.29.

EBIT: As of FY2025 Q2, the actual value is USD 1.876 M.

Agricultural Products Segment

• Revenue: $4,025,000 for the three months ended May 31, 2025, compared to $4,555,000 for the same period in 2024, a decrease of $530,000 or 11.6%.
• Gross Profit: $1,095,000 for the three months ended May 31, 2025, compared to $1,323,000 for the same period in 2024.
• Operating Expense: $1,144,000 for the three months ended May 31, 2025, compared to $1,481,000 for the same period in 2024.
• Income (Loss) from Operations: -$49,000 for the three months ended May 31, 2025, compared to -$158,000 for the same period in 2024.
• Future Outlook: The company anticipates conditions will improve in the next 12 to 18 months in the agricultural market, with efforts to build stock inventory and release product-specific programs to turn inventory and unlock cash.

Modular Buildings Segment

• Revenue: $2,312,000 for the three months ended May 31, 2025, compared to $2,175,000 for the same period in 2024, an increase of $137,000 or 6.3%.
• Gross Profit: $965,000 for the three months ended May 31, 2025, compared to $584,000 for the same period in 2024.
• Operating Expense: $406,000 for the three months ended May 31, 2025, compared to $257,000 for the same period in 2024.
• Income (Loss) from Operations: $559,000 for the three months ended May 31, 2025, compared to $327,000 for the same period in 2024.
• Future Outlook: The company expects continued success in the Modular Buildings segment as leads continue converting to contracts, with strong future expected project closings.

Cash Flow

• Net Cash Provided by Operating Activities: $1,252,373 for the six months ended May 31, 2025, compared to $1,147,622 for the same period in 2024.
• Net Cash Used in Investing Activities: -$213,441 for the six months ended May 31, 2025, compared to -$512,547 for the same period in 2024.
• Net Cash Used in Financing Activities: -$1,036,258 for the six months ended May 31, 2025, compared to -$634,602 for the same period in 2024.

Unique Metrics

• Employee Retention Credit: The company recorded $1,620,103 of ERC refund in other income, with net proceeds of $1,461,185 after consulting fees.

Outlook and Strategy

• Core Business Focus: The company plans to continue releasing product-specific programs in the second half of fiscal 2025 to turn inventory and unlock cash from product lines where inventory levels are higher.
• Non-Core Business: The company is exploring new markets where its custom building can offer competitiveness to the marketplace.