SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarter Ended May 31, 2004 Commission File No. 0-5131
ART'S-WAY MANUFACTURING CO., INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 42-0920725
State of Incorporation I.R.S. Employer Identification No.
Hwy 9 West, Armstrong, Iowa 50514
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Address of principal executive offices Zip Code
Registrant's telephone number, including area code: (712) 864-3131
Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No __
Number of common shares outstanding as of June 15, 2004: 1,938,176
ART'S-WAY MANUFACTURING CO., INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Year to Date
May 31, May 31, May 31, May 31,
2004 2003 2004 2003
Net sales $2,917,125 $2,510,444 $5,809,417 $5,068,118
Cost of goods sold 1,991,203 1,744,509 4,187,671 3,698,119
Gross profit 925,922 765,935 1,621,746 1,369,999
Operating expenses:
Engineering 40,058 15,256 94,848 34,179
Selling 200,168 120,099 321,878 213,929
General and administrative 496,915 327,402 897,212 679,829
Total expenses 737,141 462,757 1,313,938 927,937
Income from operations 188,781 303,178 307,808 442,062
Other expenses:
Interest expense 44,805 30,994 80,830 48,973
Other (11,999) 9,782 (15,200) 15,847
Total other expenses 32,806 40,776 65,630 64,820
Income before income taxes 155,975 262,402 242,178 377,242
Income tax exp(benefit) (100,000) 0 (100,000) 2,031
Net income $255,975 $262,402 $342,178 $375,211
Net income per share:
Basic $0.13 $0.14 $0.18 $.19
Diluted $0.13 $0.13 $0.17 $0.19
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Common shares and equivalent outstanding:
Basic 1,938,176 1,938,176 1,938,176 1,938,176
Diluted 1,959,639 1,950,438 1,958,896 1,948,646
See accompanying notes to condensed financial statements.
ART'S-WAY MANUFACTURING CO., INC.
CONDENSED BALANCE SHEETS
(Unaudited)
May 31, November 30,
2004 2003
ASSETS
Current Assets
Cash $1,113,634 $800,052
Accounts receivable-customers,
net of allowance for doubtful accounts
of $36,866 and $39,250 in May and
November, respectively 1,083,697 885,890
Inventories 5,987,362 3,446,711
Deferred taxes 283,000 283,000
Other current assets 90,061 150,185
Total current assets 8,557,754 5,565,838
Property, plant and equipment, at cost 11,476,767 11,049,132
Less accumulated depreciation 10,158,442 10,030,222
Net property, plant and equipment 1,318,325 1,018,910
Inventories, noncurrent 314,727 483,432
Real estate loan receivable 165,725 165,725
Deferred taxes 635,000 535,000
Other assets 166,332 192,932
Total assets $11,157,863 $7,961,837
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt $185,351 $178,508
Accounts payable 857,894 83,874
Customer deposits 2,104,947 53,556
Accrued expenses 782,904 702,117
Total current liabilities 3,931,096 1,018,055
Long-term liabilities 212,963 174,766
Long-term debt, excluding current portion 1,874,458 1,971,848
Total liabilities 6,018,517 3,164,669
Stockholders' Equity
Common stock - $.01 par value. Authorized
5,000,000 shares; issued 1,938,176 shares
in May and in November 19,382 19,382
Additional paid-in capital 1,634,954 1,634,954
Retained earnings 3,485,010 3,142,832
Total stockholders' equity 5,139,346 4,797,168
Total liabilities and stockholders' equity $11,157,863 $7,961,837
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See accompanying notes to condensed financial statements.
ART'S-WAY MANUFACTURING CO., INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
May 31, May 31,
2004 2003
CASH FLOW FROM OPERATIONS:
Net income $342,178 $375,211
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 128,220 139,740
Deferred income taxes (100,000) 0
Changes in working capital components:
(Increase) decrease in:Accounts receivable (197,807) (380,538)
Other receivables 0 (110,000)
Inventories (2,371,946) (578,412)
Other current assets 60,124 (75,131)
Other 64,797 (35,666)
Increase (decrease) in:
Accounts payable 774,020 (271,140)
Customer deposits 2,051,391 734,511
Accrued expenses 80,787 102,404
Net cash provided by (used in)
operating activities 831,764 (99,021)
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of property, plant and
equipment (427,635) 0
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from (payments of)
notes payable to bank 0 1,322,668
Principal payments on long term debt (90,547) (319,222)
Net cash provided by (used in) financing
activities (90,547) 1,003,446
Net increase in cash 313,582 904,425
Cash at beginning of period 800,052 75,358
Cash at end of period $1,113,634 $979,783
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $80,830 $48,973
Income taxes 17,321 3,301
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See accompanying notes to condensed financial statements.
ART'S-WAY MANUFACTURING CO., INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Statement Presentation
The financial statements are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. The financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended November 30, 2003. The results of operations for the second quarter and year to date ended May 31, 2004 are not necessarily indicative of the results for the fiscal year ending November 30, 2004.
Reclassifications
Certain 2003 financial statement amounts related to shipping costs have been reclassified to conform to the current year presentation.
2. INCOME PER SHARE
Basic net income per common share is computed on the basis of weighted average number of common shares outstanding. Diluted net income per share has been computed on the basis of weighted average number of common shares outstanding plus equivalent shares assuming exercise of stock options.
The difference in shares utilized in calculating basic and diluted net income per share represents the number of shares issued under the Company's stock option plans less shares assumed to be purchased with proceeds from the exercise of the stock options. The reconciling item between the shares used in the computation of basic and diluted earnings per share for the second quarter ended May 31, 2004 is 21,463 equivalent shares, 20,720 shares year to date, for the effect of dilutive stock options.
3. INVENTORIES
Major classes of inventory are: May 31, November 30,
2004 2003
Raw material $2,456,051 $744,549
Work-in-process 1,402,360 805,142
Finished goods 2,443,678 2,380,452
Total $6,302,089 $3,930,143
Less inventories classified as noncurrent 314,727 483,432
Inventories, current $5,987,362 $3,446,711
4. ACCRUED EXPENSES
Major components of accrued expenses are: May 31, November 30,
2004 2003
Salaries, wages and commissions $391,063 $366,842
Accrued warranty expense 72,283 59,207
Other 319,558 276,068
Total $782,904 $702,117
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5. Product Warranty The Company offers warranties of various lengths to its customers depending on the specific product and terms of the customer purchase agreement. The average length of the warranty period is one year from date of purchase. The Company's warranties require it to repair or replace defective products during the warranty period at no cost to the customer. The Company records a liability for estimated costs that may be incurred under its warranties. The costs are estimated based on historical experience and any specific warranty issues that have been identified. Although historical warranty costs have been within expectations, there can be no assurance that future warranty costs will not exceed historical amounts. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the balance as necessary.
Changes in the Company's product
warranty liability for the three and six months ended May 31, 2004 and
May 31, 2003 are as follows:
Three Months ended Six Months ended
May 31, May, 31 May 31, May, 31
2004 2003 2004 2003
Balance, beginning $53,943 59,207 $59,207 60,232
Settlements made in cash
or in-kind (19,721) (28,625) (51,512) (58,155)
Warranties issued 38,061 28,914 64,588 57,419
Balance, ending $72,283 59,496 $72,283 59,496
6. LOAN AND CREDIT AGREEMENTS
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Line of Credit
The Company has financing through West Bank consisting of two loan agreements totaling $5,500,000.
Facility #1 is a revolving line of credit for $2,500,000 with advances funding the working capital, letter of credit and corporate credit card needs that mature on February 28, 2005. The interest rate is West Bank's prime interest rate plus 1%, adjusted daily. Monthly interest only payments are required and the unpaid principal is due on the maturity date. Collateral consists of a first position on assets owned by the Company including, but not limited to inventories, accounts receivable, machinery and equipment. As of May 31, 2004, the Company has not borrowed against Facility #1.
Facility #2 is long-term financing for up to $3,000,000 that is supported by a guarantee issued by the United States Department of Agriculture (USDA) for 75% of the loan amount outstanding. The loan refinanced existing debt to UPS Capital (approximately $1,500,000), finance equipment (approximately $250,000), provide permanent working capital (approximately $500,000) and satisfy closing costs (approximately $50,000). Approximately $700,000 will be reserved for future acquisitions. The variable interest rate is West Bank's prime interest rate plus 1.5%, adjusted daily. Monthly principal and interest payments are amortized over 20 years, with final maturity at March 31, 2023. Collateral for Facility #2 is primarily real estate with a second position on assets of Facility #1. The USDA subordinates collateral rights in all assets other than real estate in an amount equal to West Bank's other credit commitments.
Other terms and conditions include providing monthly internally prepared financial reports including accounts receivable aging schedules and borrowing base certificates and year-end audited financial statements. The borrowing bases limit advances from Facility #1 to 60% of accounts receivable less than 90 days, 60% of finished goods inventory, 50% of raw material inventory and 50% of work-in-process inventory plus 40% of appraisal value of machinery and equipment. Covenants include restrictions on debt service coverage ratio, debt/tangible net worth ratio, current ratio, limit capital expenditures and tangible net worth. During the year ended November 30, 2003, the Company violated certain debt covenants that were waived.
On April 25, 2003 the Company borrowed $2,000,000 against Facility #2, $1,528,775 was used to pay off other borrowings with $110,000 being held in reserve for a letter of credit ($100,000) and any additional fees. The balance of $471,225 was used as working capital. The outstanding balance on Facility #2 at May 31, 2004 was $1,896,910.
J. Ward McConnell, Jr. was required to personally guarantee Facility #1 and Facility #2 on an unlimited and unconditional basis. The guarantee of Facility #2 shall be reduced after the first three years to a percentage representing his ownership of the Company. Mr. McConnell's guarantee shall be removed from Facility #2 in the event that his ownership interest in the Company is reduced to a level less than 20% after the first three years of the loan. The Company compensates Mr. McConnell for his personal guarantee at an annual percentage rate of 2% of the outstanding balance paid monthly. As a result of the outstanding balance on Facility #2 Mr. McConnell received $6,323, for the second qarter, under this compensation agreement.
A summary of the Company's term debt is as follows:
May 31, November 30,
2004 2003
West Bank Facility #2 payable in
monthlyInstallments of $17,776
including interest at Bank's prime
rate plus 1.5% (5.50%) $1,896,910 $1,950,975
State of Iowa Community Development
Block Grant promissory notes at zero
percent interest, maturity 2006,
with quarterly principal payments
of $11,111 $100,000 $122,223
State of Iowa Community Development
Block Grant local participation
promissory notes at 4% interest,
Maturity 2006, with quarterly payments
of $7,007 $62,899 $77,158
Total term debt $2,059,809 $2,150,356
Less current portion of term debt $185,351 $178,508
Term debt, excluding current portion $1,874,458 $1,971,848
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7. RELATED PARTY TRANSACTION
On January 22, 2004, at an Executive Session of the Board of Directors, an incentive fee of $55,000 was authorized for J. Ward McConnell. Subsequently, Mr. McConnell relinquished his rights to that bonus and therefore, no expense has been recorded.
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
(a) Liquidity and Capital Resources
The Company's main source of funds for the six months ended May 31, 2004 was payments received from customers for advance payments on sugar beet equipment to be delivered in the third quarter. The increase in accounts receivable resulted from the shipments of beet sl terms.ervice parts in the second quarter of 2004, which are sold on special terms.
The positive cash flow from operations of $ 832,000 was used to fund capital expenditures of $428,000 including the purchase and installation of a new paint system, and fixturing for the new beet harvester. Long term debt was paid down by $91,000 and the remaining $313,000 was retained for future needs.
See footnote 5 of the notes to the condensed financial statements for a discussion of the Company's credit facility.
The Company is mindful of the necessity to continue to control its costs.
(b) Results of Operations
The second quarter and year to date net sales were 16% and 15% respectively, higher than for the comparable periods one-year ago. First six months of 2004 revenues included $522,000 from the truck body line acquired in July 2003. Art's-Way's branded products increased by $921,000 while OEM sales decreased by $763,000. Art's-Way products with increased sales are land planes ($329,000), grinder mixers ($331,000) and plows ($260,000). The plow sales increase is off-set by the OEM decrease, due to the licensing agreement with Case New Holland, Inc., to sell the plows directly to dealers. In 2003 Case placed large orders that were filled in the first six months of the year. We expect sales in 2004 to be spread more evenly throughout the year now that we are selling directly to the dealers. We expect a spike in OEM sales in the first quarter of 2005, when we produce a year's supply of OEM products.
Gross profit, as a percent of sales was 32% for the quarter ended May 31, 2004, compared to 31% for the same period in 2003. Year to date through May 31, 2004, gross profit was 28% compared to 27% for the prior year. Increased steel prices decreased our gross profit by $109,000 in the second quarter.
Operating expenses are higher than last year. As a percent of sales, operating expenses were 25% and 18% for the three months ended May 31, 2004 and 2003, respectively. Year to date operating expenses were 23% and 18%, respectively. The increased operating expenses are due to our continuing developmental expenses for new products and expenses for the truck body line, including the move from Cherokee to Armstrong, Iowa. We introduced a new sugar beet harvester with the industry's first 12 row harvesting capability. We are also introducing, in the fourth quarter, a new generation grinder-mixer with increased capacity and reduced operating cycle times. The increase of engineering expenses for 2004 of $61,000 compared to 2003 allows us to introduce new product offerings for 2004 that we believe will continue to improve revenue and earnings. Year to date selling expenses also increased $108,000 for 2004 from 2003 as increased sales led to increased commissions ($83,000). Advertising expenses were also up $16,000 due to additional expenses for the truck body line. We are attending more farm and industry trade shows during the year to regain visibility of Art's-Way and Cherokee Truck Bodies branded products. Year to date general and administrative expenses increased by $217,000, due to additional expenses related to the truck body line acquired in July 2003.
Interest and other expenses remained stable in 2004.
See (c) below for a discussion on the utilization of deferred tax assets.
The order backlog as of May 31, 2004 is $3,936,000, compared to $2,798,000 one year ago. These orders primarily will be delivered in the third quarter of the current fiscal year. The current year backlog includes $2,587,000 in orders for beet equipment compared to $1,232,000 last year at this time. We have no OEM backlog as a result of a license agreement with Case New Holland, Inc., to manufacture moldboard plows under our own label in spring of 2004. This will allow us to sell direct to dealers.
(c) Utilization of Deferred Tax Assets
We had established a deferred tax asset valuation allowance of approximately $1,913,000 at November 30, 2002, due to the uncertainty of realizing deferred tax assets. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. At year end November 30, 2003, we reduced the deferred tax asset valuation allowance by $818,000. At the end of the second quarter we reduced the deferred tax asset valuation allowance by another $100,000.
(d) Critical Accounting Policies
The Company's critical accounting policies involving the more significant judgments and assumptions used in the preparation of the financial statements as of May 31, 2004 have remained unchanged from November 30, 2003. These policies involve revenue recognition, inventory valuation and income taxes. Disclosure of these critical accounting policies is incorporated by reference under Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operation" in our Annual report on Form 10-K for the year ended November 30, 2003.
Item 3
CONTROLS AND PROCEDURES
Senior management, including the Chief Executive Officer and the Chief Financial Manager, evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation process, the Chief Executive Officer and the Chief Financial Manager concluded that the Company's disclosure controls and procedures are effective. Since that evaluation process was complete there have been no significant changes in disclosure controls or in other factors that could significantly affect these controls.
Part II - Other Information
ITEM 1. LEGAL PROCEEDINGS
Various legal actions and claims resulting from the ordinary course of business are pending against the Company. In the opinion of management, adequate provisions have been made in the accompanying financial statements for all pending legal actions and other claims.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the April 22, 2004 annual meeting of shareholders, the following directors were elected, with the following votes in favor of election:
David R. Castle 1,848,459 George A. Cavanaugh, Jr. 1,849,959 James L. Koley 1,849,959 Douglas McClellan 1,849,959 J. Ward McConnell, Jr. 1,849,959 Marc H. McConnell 1,849,959 Thomas E. Buffamante 1,849,959 |
The shareholders also ratified the selection of McGladrey & Pullen, LLP as independent public accountants for the year ending November 30, 2004.
Total number of shares authorized to vote: 1,938,176 Total number of shares voted in favor: 1,849,434 Total number of shares voted against: 100 Total number of abstentions: 675
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
3.0 Certificate of Incorporation and Bylaws for Art's-Way Manufacturing, Inc. (incorporated by reference to Exhibit 3 to the Annual report on form 10-K for the year ended May 27, 1989.
3.1 Amendments to Bylaws of Art's-Way Manufacturing, Inc. adopted as of February 27th, 2004 (filed herewith).
31.1 Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Manager (Principal Financial Officer) under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer under 18 U.S.C. Section 1350.
32.2 Certification of Chief Financial Manager (Principal Financial Officer) under 18 U.S.C. Section 1350.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ART'S-WAY MANUFACTURING CO., INC.
Date: July 14, 2004 By: /s/ John C. Breitung
John C. Breitung
President and Chief Executive Officer
Date: July 14, 2004 By: /s/ Carrie L. Majeski
Carrie L. Majeski Chief
Financial Manager
(Principal Financial Officer)
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Exhibit 3.1
AMENDMENTS TO BYLAWS
OF
ART'S-WAY MANUFACTURING CO., INC.
Article II
Section 12. Meetings of Stockholders, Nominations, Business
(1)Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders: (a) pursuant to the Corporation's notice at meeting; (b) by or at the direction of the Board of Directors; or (c) by any stockholder of the Corporation who was a stockholder of record at the time of giving of the notice provided for in this Bylaw, who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Bylaw.
(2)For nominations or other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (c) of Subsection
(2) of this Bylaw, the stockholder must have given timely notice in
writing to the Secretary of the Corporation and it must otherwise be a
proper matter for stockholder action. To be timely, a stockholder's
notice must be delivered to the Secretary at the principal executive
offices of the Corporation not less than sixty (60) days nor more than
ninety (90) days prior to the first anniversary of the preceding year's
annual meeting; provided, however, that in the event that the date of
the annual meeting is advanced by more than thirty (30) days or delayed
by more than sixty (60) days from such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the
ninetieth (90th) day prior to such annual meeting and not later than the
close of business on the later of the sixtieth (60th) day prior to such
annual meeting or the tenth (10th) day following the day on which public
announcement of the date of such meeting is first made. Such
stockholder's notice shall set forth: (a) as to each person whom the
stockholder proposes to nominate for election or reelection as a
director, all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
(including such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected); (b) as
to any other business that the stockholder proposes to bring before the
meeting, a brief description of the business desired to be brought
before the meeting, the reasons for conducting such business at the
meeting, and any material interest in such business of such stockholder
and the beneficial owner, if any, on whose behalf the proposal is made;
and (c) as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made, (i)
the name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner, and (ii) the class
and number of shares of the Corporation which are owned beneficially and
of record by such stockholder and such beneficial owner.
(3)Notwithstanding anything in the second sentence of Subsection
(3) of this Bylaw to the contrary, in the event that the number of
directors to be elected to the Board of Directors of the Corporation is
increased and there is no public announcement naming all of the nominees
for director or specifying the size of the increased Board of Directors
made by the Corporation at least seventy (70) days prior to the first
anniversary of the preceding year's annual meeting, a stockholder's
notice required by this Bylaw shall also be considered timely, but only
with respect to nominees for any new positions created by such
increase, if it shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of
business on the tenth (10th) day following the day on which such public
announcement is first made by the Corporation.
(4)Only such persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible to serve as directors, and only such business shall be conducted at an annual meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in these Bylaws. The chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, to declare that such defective proposed business or nomination shall be disregarded.
(5)For purposes of these Bylaws, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press, or a comparable national news service, or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.
(6)Notwithstanding the foregoing provisions of this Bylaw, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act.
Article III
Section 14.Nominations to the Board of Directors
The Board of Directors shall appoint a Nominating Committee and a Nominating Committee Charter. The composition and duties of the Nominating Committee shall be as set forth in the Nominating Committee Charter. The Nominating Committee Charter shall be in compliance with applicable requirements of the Rules of the National Association of Securities Dealers, Inc. ("NASD") and NASDAQ. In lieu of the appointment of a Nominating Committee and the adoption of a Nominating Committee Charter, the entire Board may act as a nominating committee so long as in doing so it remains compliant with all applicable requirements of the NASD and NASDAQ.
Exhibit 31.1
CERTIFICATIONS
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Public Law Number107-204) and SEC Rule 13a-14(a), the Chief Executive Officer of the Company certifies that:
1) I have reviewed this report on Form 10-QSB of Art's-Way Manufacturing Co., Inc.;
2) Based upon my knowledge, this report does not contain any untrue statement of a material fact, or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3) Based upon my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the Company as of, and for, the period presented in this report;
4) The Company's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a--5(e) and 15d-15(e)) for the Company and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company and its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c) Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
5) The Company's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company board of directors (or persons performing equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which could adversely affect the Company's ability to record, process, summarize, and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
/s/ John C. Breitung John C. Breitung Chief Executive Officer 4-13-04 Date |
Exhibit 31.2
CERTIFICATIONS
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Public Law Number107-204) and SEC Rule 13a-14(a), the Chief Executive Officer of the Company certifies that:
1) I have reviewed this report on Form 10-QSB of Art's-Way Manufacturing Co., Inc.;
2) Based upon my knowledge, this report does not contain any untrue statement of a material fact, or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3) Based upon my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the Company as of, and for, the period presented in this report;
4) The Company's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-5(e) and 15d-15(e)) for the Company and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company and its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c) Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
5) The Company's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company board of directors (or persons performing equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which could adversely affect the Company's ability to record, process, summarize, and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
/s/ John C. Breitung John C. Breitung Chief Financial Officer 4-13-04 Date |
Exhibit 32.1
CERTIFICATION OF FINANCIAL STATEMENTS
Pursuant to 18 U.S.C. 1350, the President/Chief Executive Officer of Art's-Way Manufacturing Co., Inc. (the "Company"), hereby certify that this Form 10-QSB for the quarter ended February 29, 2004, and the consolidated financial statements therein, fully comply with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-QSB and the financial statements therein fairly present, in all material respects, the financial condition and results of operations of the Company for the period covered by the report.
By:
/s/ John C. Breitung Name: John C. Breitung President and Chief Executive Officer Date 6-14-04 |
Exhibit 32.2
CERTIFICATION OF FINANCIAL STATEMENTS
Pursuant to 18 U.S.C. 1350, the Chief Financial Manager (Principal Financial Officer) of Art's-Way Manufacturing Co., Inc. (the "Company"), hereby certify that this Form 10-QSB for the quarter ended February 29, 2004, and the consolidated financial statements therein, fully comply with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-QSB and the financial statements therein fairly present, in all material respects, the financial condition and results of operations of the Company for the period covered by the report.
By:
/s/ Carrie L. Majeski Name: Carrie L. Majeski Chief Financial Manager (Principal Financial Officer) Date 6-14-04 |