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What changed in ARTS WAY MANUFACTURING CO INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ARTS WAY MANUFACTURING CO INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+90 added−81 removedSource: 10-K (2026-02-12) vs 10-K (2025-02-18)

Top changes in ARTS WAY MANUFACTURING CO INC's 2025 10-K

90 paragraphs added · 81 removed · 58 edited across 4 sections

Item 1. Business

Business — how the company describes what it does

20 edited+7 added−3 removed29 unchanged
Biggest changeHigh interest rates and low commodity prices are still affecting demand as we roll into fiscal 2025, however, we have seen better than expected demand for our grinder mixers. The Company’s Modular Buildings segment had approximately $2,393,000 of backlog as of February 4, 2025, compared to $6,170,000 on that date in 2024.
Biggest changeWe expect the high price of beef will continue to fuel demand for our livestock products and are optimistic that interest rate cuts will continue to occur. The Company’s Modular Buildings segment had approximately $4,882,000 of backlog as of February 2, 2026, compared to $2,403,000 on that date in 2025.
Item 1. BUSINESS . General Art’s-Way Manufacturing Co., Inc., a Delaware corporation (“we,” “us,” “our,” and the “Company”), began operations as a farm equipment manufacturer in 1956. Since that time, we have become a worldwide manufacturer of agricultural equipment and specialized modular science and agricultural buildings. Our principal manufacturing plant and corporate headquarters is located in Armstrong, Iowa.
Item 1. BUSINESS . General Art’s-Way Manufacturing Co., Inc., a Delaware corporation ("Art's-Way," “we,” “us,” “our,” and the “Company”), began operations as a farm equipment manufacturer in 1956. Since that time, we have become a worldwide manufacturer of agricultural equipment and specialized modular science and agricultural buildings. Our principal manufacturing plant and corporate headquarters is located in Armstrong, Iowa.
Our Modular Buildings segment manufactures modular buildings for various uses, commonly animal containment and research laboratories, through our wholly owned subsidiary, Art’s-Way Scientific, Inc., an Iowa corporation. During the third quarter of fiscal 2023, the Company ceased operations of its Tools business, which was reported in discontinued operations for the twelve months ended November 30, 2023.
Our Modular Buildings segment manufactures modular buildings for various uses, commonly animal containment and research laboratories, through our wholly owned subsidiary, Art’s-Way Scientific, Inc., an Iowa corporation. During the third quarter of fiscal 2023, the Company ceased operations of its Tools business, which was reported in discontinued operations for the twelve months ended November 30, 2024.
We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Exchange Act requires us to file periodic reports, proxy statements and other information with the “SEC”. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Exchange Act requires us to file periodic reports, proxy statements and other information with the SEC. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
Our local service parts staff is available to help customers and dealers with their service parts needs. Our Modular Buildings segment typically sells products customized to the end-users' requirements directly to the end-user. We currently export products to nine foreign countries. We have been shipping grinder mixers abroad since 2006 and have exported portable rollermills as well.
Our local service parts staff is available to help customers and dealers with their service parts needs. Our Modular Buildings segment typically sells products customized to the end-users' requirements directly to the end-user. We currently export products to five foreign countries. We have been shipping grinder mixers abroad since 2006 and have exported portable rollermills as well.
The information contained on our website or available by hyperlink from our website is not a part of this report and is not incorporated into this report or any other documents we file with, or furnish to, the Securities and Exchange Commission (the "SEC").
The information contained on our websites or available by hyperlink from our websites is not a part of this report and is not incorporated into this report or any other documents we file with, or furnish to, the Securities and Exchange Commission (the "SEC").
We sell products to customers in the United States and nine foreign countries through a network of approximately 500 independent dealers in the United States and Canada, as well as overseas dealers in Australia, Japan and the United Kingdom. 4 Table of Contents We believe that our competitive pricing, product quality and performance, network of worldwide and domestic distributors, and strong market share for many of our products allow us to compete effectively in the agricultural products market.
We sold products to customers in the United States and five foreign countries in 2025 through a network of approximately 500 independent dealers in the United States and Canada, as well as overseas dealers in Australia, Japan and the United Kingdom. 4 Table of Contents We believe that our competitive pricing, product quality and performance, network of worldwide and domestic distributors, and strong market share for many of our products allow us to compete effectively in the agricultural products market.
Barriers to entry in the market consist primarily of access to capital, access to a qualified labor pool, and the bidding process that accompanies many jobs in the health and education markets. Despite these barriers, manufacturers who have a skilled work force and adequate production facilities could adapt their manufacturing facilities to produce modular structures.
Barriers to entry in the market consist primarily of established customer relationships, industry knowledge, access to capital, access to a qualified labor pool, and the bidding process that accompanies many jobs in the health and education markets. Despite these barriers, manufacturers who have a skilled work force and adequate production facilities could adapt their manufacturing facilities to produce modular structures.
We continue to strengthen these relationships and intend to develop new international markets. Our international sales accounted for 3.3% of consolidated sales during the 2024 fiscal year compared to 3.1% in the 2023 fiscal year. 3 Table of Contents Backlog. The Company’s backlog of orders varies on a daily basis.
We continue to strengthen these relationships and intend to develop new international markets. Our international sales accounted for 4.0% of consolidated sales during the 2025 fiscal year compared to 3.3% in the 2024 fiscal year. 3 Table of Contents Backlog. The Company’s backlog of orders varies on a daily basis.
The remaining components of the Tools segment were prior to the twelve months ended November 30, 2024. For detailed financial information relating to segment reporting, see Note 18 “Segment Information” to our financial statements in “Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of this report.
The remaining components of the Tools segment were disposed prior to the twelve months ended November 30, 2025. For detailed financial information relating to segment reporting, see Note 18, “Segment Information,” to our financial statements in “Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of this report.
These materials may be obtained electronically by accessing the SEC’s website at http://www.sec.gov. Business of Our Segments Agricultural Products Our Agricultural Products segment, which accounted for 59.9% of our net revenue in the 2024 fiscal year and 74.2% of our net revenue in the 2023 fiscal year, is located primarily in Armstrong, Iowa.
These materials may be obtained electronically by accessing the SEC’s website at http://www.sec.gov. Business of Our Segments Agricultural Products Our Agricultural Products segment, which accounted for 55.5% of our net revenue in the 2025 fiscal year and 59.9% of our net revenue in the 2024 fiscal year, is located primarily in Armstrong, Iowa.
Employees As of November 30, 2024, we employed 68 employees in our Agricultural Products segment including one on a part-time basis, and 22 employees in our Modular Buildings segment, two on a part-time basis. These numbers do not necessarily represent peak employment during the 2024 fiscal year. 5 Table of Contents
Employees As of November 30, 2025, we employed 66 employees in our Agricultural Products segment, including one on a part-time basis, and 32 employees in our Modular Buildings segment, including two on a part-time basis. These numbers do not necessarily represent peak employment during the 2025 fiscal year. 5 Table of Contents
Modular Buildings Our Modular Buildings segment, which accounted for 40.1% of our net revenue in the 2024 fiscal year and 25.8% of our net revenue in the 2023 fiscal year, is located in Monona, Iowa. This segment produces, sells and leases modular buildings, which are custom-designed to meet the specific research needs of our customers.
Modular Buildings Our Modular Buildings segment, which accounted for 44.5% of our net revenue in the 2025 fiscal year and 40.1% of our net revenue in the 2024 fiscal year, is located in Monona, Iowa. This segment produces, sells and leases modular buildings, which are custom-designed to meet the specific research needs of our customers.
Corporate information about Art’s-Way can be found on our website, http://www.artsway-mfg.com/, while information on our agriculture products can be found on http://www.artsway.com/ .
Corporate information about Art’s-Way can be found on our website, https://www.artsway-mfg.com/, while information on our Agriculture Products segment can be found on http://www.artsway.com/ . and information about our Modular Buildings Segment can be found on https://www.artsway-scientific.com/ .
During the 2024 fiscal year, one customer accounted for just more than 17% consolidated net revenues from continuing operations and another approximately 15% of consolidated revenues. Intellectual Property We maintain manufacturing rights on several products, which cover unique aspects of design. We also have trademarks covering product identification.
During the 2025 fiscal year, one customer accounted for just more than 9% of consolidated net revenues. Intellectual Property We maintain manufacturing rights on several products, which cover unique aspects of design. We also have trademarks covering product identification. We believe our trademarks and licenses help us to retain existing business and secure new relationships with customers.
We expect continued focus on increasing margins on our current product lines and new developments that make our products more useful for our customers. Our Modular Buildings segment completed projects based on customer specifications and did not engage in specific product development during the 2024 fiscal year. Competition Each of our segments have competitive strengths described below.
In 2026 we expect to improve upon our current product lines and increase margins through our R&D work. Our Modular Buildings segment completed projects based on customer specifications and did not engage in specific product development during the 2025 fiscal year. Competition Both of our segments have competitive strengths described below.
We have a licensing and royalty agreement with Spreader, LLC to produce a loader mounted spreader in exchange for royalty payments until December 2026.
The duration of these rights ranges from 5 to 10 years, with options for renewal. We currently have no pending applications for intellectual property rights. We have a licensing and royalty agreement with Spreader, LLC to produce a loader mounted spreader in exchange for royalty payments until December 2026.
The Company expects that its order backlogs will continue to fluctuate as orders are received, filled, or canceled, and, due to dealer discount arrangements it may enter into from time to time. Accordingly, these figures are not necessarily indicative of future revenue.
The Modular Buildings segment continues to close contracts and is expected to have a similar results in fiscal 2026 compared to fiscal 2025. The Company expects that its order backlogs will continue to fluctuate as orders are received, filled, or canceled, and, due to dealer discount arrangements it may enter into from time to time.
We rely on foreign suppliers and foreign markets for materials and components for some of our products. However, these suppliers are not principal suppliers, and there are alternative sources for these materials. We do not typically rely on sales to one customer or a small group of customers.
We rely on foreign suppliers and foreign markets for materials and components for some of our products. However, these suppliers are not principal suppliers, and there are alternative sources for these materials, with the exception of our manure spreader beaters that our imported from Italy.
The Company’s Agricultural Products segment had a net backlog of approximately $3,486,000 as of February 4, 2025 compared to $4,364,000 on February 4, 2024. The overall agriculture economy remained stagnant for our fall early order program after three years of increased demand.
The Company’s Agricultural Products segment had a net backlog of approximately $3,224,000 as of February 2, 2026 compared to $3,486,000 on February 2, 2025. We've seen strong demand for the majority of our agriculture products for the 2025-2026 early order period compared to last fiscal year, with the exception of beet equipment.
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The Modular Buildings segment has strong leads in the engineering phase that we expect to go under contract and become part of our project backlog, which could drive similar revenue results to fiscal 2024.
Added
In December 2025, American Crystal Sugar announced a 44% decline in payment per ton of sugar beet crop compared to the prior year.
Removed
Recent Product Developments In 2024, we focused on cost reductions to improve pricing competitiveness of our manure spreader product line and to boost margin of our highest demanded grinder mixer products. We finished the development of a chicken litter variation for our manure spreaders and a sonar leveling system for our defoliators.
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This announcement negatively impacted early order program demand for our beet equipment, however, recent product developments on our beet equipment lead us to believe we will be able to overcome some of this negative market pressure in 2026.
Removed
We believe our trademarks and licenses help us to retain existing business and secure new relationships with customers. The duration of these rights ranges from 5 to 10 years, with options for renewal. We currently have no pending applications for intellectual property rights.
Added
Accordingly, these figures are not necessarily indicative of future revenue. Recent Product Developments In 2025, we developed a new head for our 12-row beet harvester that provides a clear view of the inner workings of the equipment.
Added
Not only does this allow a farmer to see that the harvesting components are operating as expected from the tractor cab, but it also improves serviceability, saving down time for our beet customers.
Added
This new head is designed to be backwards compatible with older harvesters, which we project will open up a new market for farmers that may not have the capital to replace their entire units, but can still get the latest technology we offer. We also spent engineering time revamping our 8-row beet head with the new clear view design.
Added
We recognized there is some demand for the 8-row units and the belief is farmers will be able to travel faster in their tractor with this unit. We also spent time developing a sack cutter for our grinders to improve a routine task for our users and are testing improvements to make our grinders unload faster.
Added
We undertook a reshoring project in fiscal 2025 to be prepared in the event we would not have access to our manure spreader beaters due to tariff activity or in the event that tariffs made them too expensive. We do not typically rely on sales to one customer or a small group of customers.

Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−0 removed2 unchanged
Biggest changeIt has approximately 50,000 square feet of usable space and accommodates a sprinkler system and crane. We own a second building to the east with approximately 12,000 square feet of space, which is used as our weld shop for building frames.
Biggest changeWe own a second building to the east with approximately 12,000 square feet of space, which is used as our weld shop for building frames. All of our owned real property is subject to mortgages granted to Bank Midwest as security for our long-term debt and our line of credit. See “Item 7.
In addition, we own approximately 30 acres of land west of Armstrong, on which the factory and inventory storage space is situated for our Agricultural Products segment. Our facility in Monona, Iowa was constructed by us in 2007, and houses the manufacturing for our Modular Buildings segment. The facility was custom-designed to meet our production needs.
Our facility in Monona, Iowa was constructed by us in 2007, and houses the manufacturing for our Modular Buildings segment. The facility was custom-designed to meet our production needs. It has approximately 50,000 square feet of usable space and accommodates a sprinkler system and crane.
All of our owned real property is subject to mortgages granted to Bank Midwest as security for our long-term debt and our line of credit. See “Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Liquidity and Capital Resources” for more information.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Liquidity and Capital Resources” for more information.
Added
We also are in the process of a complete roof repair as of the date of this report with expected completion in fiscal 2026. In addition, we own approximately 30 acres of land west of Armstrong, on which the factory and inventory storage space is situated for our Agricultural Products segment.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed2 unchanged
Biggest changeNo shares of preferred stock have been issued or are outstanding. As of January 16, 2025 we had 70 common stock stockholders of record, which number does not include stockholders who hold our common stock in street name. Dividends We did not pay a dividend during the 2024 or 2023 fiscal years.
Biggest changeNo shares of preferred stock have been issued or are outstanding. As of January 5, 2026 we had 66 common stock stockholders of record, which number does not include stockholders who hold our common stock in street name. Dividends We did not pay a dividend during the 2025 or 2024 fiscal years.
We expect that the payment of and the amount of any future dividends will depend on our financial condition at that time. Unregistered Sales of Equity Securities None. Purchases of Equity Securities by the Company There were no purchases of common stock by the Company made in the fourth quarter of fiscal 2024.
We expect that the payment of and the amount of any future dividends will depend on our financial condition at that time. Unregistered Sales of Equity Securities None. Purchases of Equity Securities by the Company There were no purchases of common stock by the Company made in the fourth quarter of fiscal 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

33 edited+24 added−20 removed32 unchanged
Biggest changeWe put a focus on cost reductions on two of our highest volume products in fiscal 2024, which we expect to bear fruit in fiscal 2025. Our Agricultural Products segment’s operating expenses for the 2024 fiscal year were $5,665,000 compared to $5,920,000 for the 2023 fiscal year, a decrease of $255,000, or 4.3%.
Biggest changeOur Agricultural Products segment’s operating expenses for the 2025 fiscal year were $4,439,000 compared to $5,665,000 for the 2024 fiscal year, a decrease of $1,226,000, or 21.6%. Our selling expenses accounted for approximately $450,000 of the operating expense decrease. Our director of sales pursued a new opportunity at the end of fiscal 2024 and we did not replace him.
As such, our business tends to reap the benefits of increases in farm net income, as farmers tend to purchase equipment in lucrative times and forgo purchases in less profitable years.
As such, our business tends to reap the benefits of increases in net farm income, as farmers tend to purchase equipment in lucrative times and forgo purchases in less profitable years.
Other uncertainties include our OEM customers and the decisions they make regarding their current supply chain structure, inventory levels, and overall business conditions. Management believes that our business is dependent on the farming industry for the bulk of our sales revenues.
Other uncertainties include our customers and the decisions they make regarding their current supply chain structure, inventory levels, and overall business conditions. Management believes that our business is dependent on the farming industry for the bulk of our sales revenues.
Customer deposits consist of advance payments from customers, in the form of cash, for revenue to be recognized in the following year. For information on product warranty as it applies to ASC 606, refer to Note 9 “Product Warranty” contained in our financial statements in “Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of this report.
Customer deposits consist of advance payments from customers, in the form of cash, for revenue to be recognized in the following year. For information on product warranty as it applies to ASC 606, refer to Note 9, “Product Warranty,” contained in our financial statements in “Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of this report.
The assets and liabilities of this segment were gone prior to November 30, 2024 and will no longer report discontinued operations in our current year financials moving forward. Our discontinued operations generated approximately $1,271,000 from operating, investing and financing activities mainly related to closing activities and the sale of real estate.
The assets and liabilities of this segment were gone prior to November 30, 2025 and will no longer report discontinued operations in our current year financials moving forward. Our discontinued operations generated approximately $1,271,000 from operating, investing and financing activities mainly related to closing activities and the sale of real estate in fiscal 2024.
We expect to continue to rely on cash from financing activities to supplement our cash flows from operations in order to meet our liquidity and capital expenditure needs in the near future. 7 Table of Contents Critical Accounting Policies Our significant accounting policies are described in Note 1 “Summary of Significant Accounting Policies” to our financial statements in “Item 8.
We expect to continue to rely on cash from financing activities to supplement our cash flows from operations in order to meet our liquidity and capital expenditure needs in the near future. 7 Table of Contents Critical Accounting Policies Our significant accounting policies are described in Note 1, “Summary of Significant Accounting Policies,” to our financial statements in “Item 8.
Our modular building sales are somewhat seasonal, and we believe that this is due to the budgeting and funding cycles of the universities that commonly purchase our modular buildings. We believe that this cycle can be offset by building backlogs of inventory, by increasing sales to other public and private sectors and by creating repeatable business opportunities.
Our modular building sales are somewhat seasonal, and we believe that this is due to the budgeting and funding cycles of the universities that commonly purchase our modular buildings. We believe that this cycle can be offset by building backlogs of inventory, by increasing sales to other public and private entities and by creating repeatable business opportunities.
Our returns policy allows for new and saleable parts to be returned, subject to inspection and a restocking charge, which is included in net sales. Whole goods are not returnable. Shipping costs charged to customers are included in net sales. Freight costs incurred are included in cost of goods sold.
Our return policy allows for new and saleable parts to be returned, subject to inspection and a restocking charge, which is included in net sales. Whole goods are not returnable. Shipping costs charged to customers are included in net sales. Freight costs incurred are included in cost of goods sold.
Direct government payment over the past few years and costs of agricultural production are increasing; further increases in the value of production will benefit our business, while any future decreases in the value of production will decrease farm net income and may negatively affect our financial results.
Direct government payments over the past few years and costs of agricultural production are increasing; further increases in the value of production will benefit our business, while any future decreases in the value of production will decrease net farm income and may negatively affect our financial results.
We expect to continue to rely on cash from financing activities to supplement our cash flows from operations in order to meet our liquidity and capital expenditure needs in the near future. We expect to continue to be able to procure financing upon reasonable terms.
We expect to continue to rely on cash from financing activities to supplement our cash flows from operations in order to meet our liquidity and capital expenditure needs in the near future. We expect to continue to be able to procure financing upon reasonable terms as necessary.
We were in compliance with covenants in place under the Bank Midwest loans as of November 30, 2024. 11 Table of Contents For additional information about our financing activities, please refer to Note 10 “Loan and Credit Agreements” to our financial statements in “Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of this report.
We were in compliance with the covenants in place under the Bank Midwest credit facility and term loans as of November 30, 2025. 11 Table of Contents For additional information about our financing activities, please refer to Note 10 “Loan and Credit Agreements” to our financial statements in “Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of this report.
Similar to other farm equipment manufacturers, we are affected by items unique to the farm industry, including fluctuations in farm income resulting from changes in commodity prices, crop damage caused by weather and insects, government farm programs, interest rate fluctuations, and other unpredictable variables.
Similar to other farm equipment manufacturers, we are affected by items unique to the farm industry, including fluctuations in net farm income resulting from changes in commodity prices, crop damage caused by weather and insects, government farm programs, interest rate fluctuations, rising input costs and other unpredictable variables.
Our Tools segment reported net income of $402,000 for the twelve months ended November 30, 2024 compared to net loss of $496,000 in the same period of fiscal 2023. 10 Table of Contents Trends and Uncertainties We are subject to a number of trends and uncertainties that may affect our short-term or long-term liquidity, sales revenues, and operations.
Our Tools segment reported no activity for the twelve months ended November 30, 2025 compared to net income of $402,000 in the same period of fiscal 2024. 10 Table of Contents Trends and Uncertainties We are subject to a number of trends and uncertainties that may affect our short-term or long-term liquidity, sales revenues, and operations.
Revenues recognized when goods were ready for shipment in fiscal 2024 were approximately $1,073,000 com p ared to $3,110 ,000 in fiscal 2023. 8 Table of Contents The Modular Buildings segment is in the construction industry with its major source of revenue arising from modular building sales.
There were no revenues recognized when goods were ready for shipment in fiscal 2025 com p ared to $1,073,000 in fiscal 2024. 8 Table of Contents The Modular Buildings segment is in the construction industry with its major source of revenue arising from modular building sales.
Our consolidated operating expenses from continuing operations decreased by 2.9%, from $7,053,000 in the 2023 fiscal year to $6,849,000 in the 2024 fiscal year. The majority of our corporate general and administrative expenses are borne by our Agricultural Products segment, including costs associated with being a public company.
Our consolidated operating expenses from continuing operations decreased by 12.7%, from $6,849,000 in the 2024 fiscal year to $5,977,000 in the 2025 fiscal year. The majority of our corporate general and administrative expenses are borne by our Agricultural Products segment, including costs associated with being a public company.
Our Agricultural Products segment had an operating loss of $1,510,000, and our Modular Buildings segment had operating income of $1,971,000. 9 Table of Contents Consolidated net income for the 2024 fiscal year was $307,000 compared to net income of $267,000 in the 2023 fiscal year.
Our Agricultural Products segment had an operating loss of $1,462,000, and our Modular Buildings segment had operating income of $1,751,000. 9 Table of Contents Consolidated net income for the 2025 fiscal year was $1,035,000 compared to consolidated net income of $307,000 in the 2024 fiscal year.
Results of Operations Fiscal Year Ended November 30, 2024 Compared to Fiscal Year Ended November 30, 2023 Our consolidated net sales from continuing operations totaled $24,499,000 for the 2024 fiscal year, which represents a 19.1% decrease from our consolidated net sales of $30,281,000 for the 2023 fiscal year.
Results of Operations Fiscal Year Ended November 30, 2025 Compared to Fiscal Year Ended November 30, 2024 Our consolidated net sales from continuing operations totaled $22,975,000 for the 2025 fiscal year, which represents a 6.2% decrease from our consolidated net sales of $24,499,000 for the 2024 fiscal year.
We increased revenue in our Modular Buildings segment while our Agricultural Products segment was met with difficult market conditions in fiscal 2024. Our consolidated gross profit as a percentage of net sales increased to 29.8% in the 2024 fiscal year compared to 28.3% of net sales in the 2023 fiscal year.
Revenue increased in our Modular Buildings segment while our Agricultural Products segment continued to experience difficult market conditions in fiscal 2025. Our consolidated gross profit as a percentage of net sales decreased to 27.3% in the 2025 fiscal year compared to 29.8% of net sales in the 2024 fiscal year.
The following table represents our working capital and current ratio as of the end of the past two fiscal years: November 30, 2024 November 30, 2023 Current Assets $ 13,124,309 $ 15,085,494 Current Liabilities 6,632,493 9,395,023 Working Capital $ 6,491,816 $ 5,690,471 Current Ratio 1.98 1.61 We believe that our current cash and financing arrangements will provide sufficient cash to finance operations for the next 12 months.
The following table represents our working capital and current ratio as of the end of the past two fiscal years: November 30, 2025 November 30, 2024 Current Assets $ 14,781,537 $ 13,124,309 Current Liabilities 6,438,038 6,632,493 Working Capital $ 8,343,499 $ 6,491,816 Current Ratio 2.30 1.98 We believe that our current cash and financing arrangements will provide sufficient cash to finance operations for the next 12 months.
Our effective tax rate for the 2024 and 2023 fiscal years was 30.3% and 29.9%, respectively. Agricultural Products. Our Agricultural Products segment’s net sales for the 2024 fiscal year were $14,663,000 compared to $22,467,000 during the 2023 fiscal year, a decrease of $7,804,000, or 34.7%.
Our effective tax rate for the 2025 and 2024 fiscal years was 28.0% and 30.3%, respectively. Agricultural Products. Our Agricultural Products segment’s net sales for the 2025 fiscal year were $12,749,000 compared to $14,663,000 during the 2024 fiscal year, a decrease of $1,914,000, or 13.1%.
We also have two Economic Injury Disaster Loans provided by the U.S. Small Business Administration with an aggregate principal balance of $315,089 as of November 30, 2024.
The revolving line of credit is being used for working capital purposes. We also have two Economic Injury Disaster Loans provided by the U.S. Small Business Administration with an aggregate principal balance of $309,261 as of November 30, 2025.
The Agricultural Products segment represented $5,665,000 of our total consolidated operating expenses, while our Modular Buildings segment represented $1,184,000. Our consolidated operating income from continuing operations for the 2024 fiscal year was $461,000 compared to operating income of $1,531,000 for the 2023 fiscal year.
The Agricultural Products segment represented $4,439,000 of our total consolidated operating expenses, while our Modular Buildings segment represented $1,539,000. Our consolidated operating income for the 2025 fiscal year was $289,000, a 37% decrease from consolidated operating income of $461,000 for the 2024 fiscal year.
We expect our operating expenses to be down significantly in fiscal 2025 as we have right-sized our staff for incoming demand. We expect to use available cash or financing in fiscal 2025 to acquire equipment that we identify as improving efficiency in our manufacturing process.
We do not expect our operating expenses to vary significantly from fiscal 2025 unless orders slow down significantly in our Agricultural Products segment. We expect to use available cash or financing in fiscal 2026 to acquire equipment that we identify as improving efficiency in our manufacturing process.
Our banking relationship remains positive, and we expect it to only strengthen as our balance sheet continues to improve through the retirement of debt. We believe that our current cash and financing arrangements will provide sufficient cash to finance operations for the next 12 months.
We believe that our current cash and financing arrangements will provide sufficient cash to finance operations for the next 12 months.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ” of this report. Financial Condition Our Agricultural Products segment saw a 34.7% decline in revenue in fiscal 2024 due to suppressed commodity prices, high borrowing rates and saturated inventory levels. Our Modular Buildings segment increased revenues by 25.9% and recorded strong profitability.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ” of this report. Financial Condition Our Agricultural Products segment saw a 13.1% decline in revenue in fiscal 2025 as commodity prices remained depressed from highs in 2023 coupled with high borrowing rates and rising input costs. Our Modular Buildings segment increased revenues by 4.0% and once again recorded strong profitability.
We have a Bank Midwest credit facility consisting of a $5,500,000 revolving line of credit, pursuant to which we had borrowed $1,928,437, with $3,571,563 remaining, as of November 30, 2024, and one term loan, which had an outstanding principal balance of $1,779,877 as of November 30, 2024. The revolving line of credit is being used for working capital purposes.
We have a Bank Midwest credit facility consisting of a $4,000,000 revolving line of credit, pursuant to which we had borrowed $3,252,437, with $747,563 remaining, as of November 30, 2025, and two term loans, which had outstanding principal balances of $1,666,762 and $ 514,406 as of November 30, 2025.
Our consolidated revenues from continued operations decreased 19.1% year on year, and we had $461,000 of operating income from continuing operations for the fiscal year ended November 30, 2024. We finished the year ended November 30, 2024 with approximately $94,000 of consolidated net loss from continued operations, $307,000 of net income and saw our working capital increase by approximately $802,000.
Our consolidated revenues from continued operations decreased 6.2% year over year, and we recorded $289,000 of operating income for the fiscal year ended November 30, 2025.
Liquidity and Capital Resources Our main source of funds during the 2024 fiscal year was cash generated by operating activities of approximately $2,869,000. We utilized favorable billing schedules in our Modular Buildings segment to generate approximately $1,654,000 in positive cash flow for our fiscal 2024 projects.
Liquidity and Capital Resources Our main source of funds during the 2025 fiscal year was cash generated by financing activities, which primarily consisted of approximately $1,324,000 we drew on our line of credit.
Our Modular Buildings segment’s net sales for the 2024 fiscal year were $9,836,000 compared to $7,814,000 for the 2023 fiscal year, an increase of $2,022,000, or 25.9%.
Modular Buildings. Our Modular Buildings segment’s net sales for the 2025 fiscal year were $10,226,000 compared to $9,836,000 for the 2024 fiscal year, an increase of $390,000, or 4.0%. We benefited from strong livestock prices in this segment, which increased our agricultural building sales by approximately $1,355,000.
We also paid out approximately $201,000 in early retirement benefits to employees in the spring of fiscal 2024 in order to drop our headcount to align with our lessened demand. We estimate the early retirement will save us $263,000 in wages and benefits annually moving forward.
In fiscal 2024, we paid out approximately $201,000 in early retirement benefits to employees in order to drop our headcount to align with our lessened demand. This impacted our general and administrative expense in 2024; it was not repeated in 2025. Our engineering expenses decreased approximately $87,000 from fiscal 2024 due to a reduction in headcount in our engineering department.
We expect the engineering headcount reduction to be temporary, as we recognize the strategic value in new product development and continued product improvement. Total loss from operations for our Agricultural Products segment during the 2024 fiscal year was $1,510,000 compared to operating income of $664,000 for the 2023 fiscal year.
We expect the engineering headcount reduction to be temporary, as we recognize the strategic value in new product development and continued product improvement. We focused our engineering effort in fiscal 2025 on new product development and successfully used other resources to take non-value added inquiries off our engineering team.
This increase is primarily due to increased bonus payout for excellent fiscal 2024 performance. Total income from operations from our Modular Buildings segment during the 2024 fiscal year was $1,971,000 compared to operating income of $867,000 in the 2023 fiscal year.
Total income from operations from our Modular Buildings segment during the 2025 fiscal year was $1,751,000, a decrease from $1,971,000 in the 2024 fiscal year. This segment benefited from an employee retention credit refund of approximately $226,000 and recorded net income of $1,376,000. Discontinued Operations.
Our Modular Building segment's gross profit percentage for the 2024 fiscal year was 32.1% compared to 25.6% during the 2023 fiscal year. Our project performance in fiscal 2024 exceeded expectations as our workforce was consistently under budget on production disciplines.
Most notably, we have buildings that are being used by companies which are renowned for being leaders in xenotransplantation and cancer research. Our Modular Building segment's gross profit percentage for the 2025 fiscal year was 32.2% compared to 32.1% during the 2024 fiscal year.
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We expect to have access to capital as needed throughout fiscal 2025 from the collection of receivables, sale of inventory and the expected receipt of approximately $1.2 million of gross proceeds from a filed Employee Retention Credit or ERC.
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We finished the year ended November 30, 2025 with approximately $1,035,000 of consolidated net income and saw our working capital increase by approximately $1,851,000, primarily driven by increased inventory levels in our Agricultural Products segment as we prepared for anticipated year-end tax-motivated purchases and potential market improvement.
Removed
Due to the timing of filing an ERC claim after the IRS announced a moratorium on processing applications, and uncertainty surrounding the nature and timing of the claim approval and subsequent payment process, recognition of the claim is deferred until payment is received. Accordingly, the claim has not been recorded in receivables, assets, or income.
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We expect to have access to capital as needed throughout fiscal 2026 from the collection of receivables, sale of inventory and the completion of projects under contract in our Modular Buildings segment. On November 30, 2025, we had $747,563 available on our line of credit and $4,012,816 of collateral in excess of our borrowing.
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On November 30, 2024 we had $3,571,563 available on our line of credit and $930,036 of excess collateral towards our borrowing base. Our working capital remained strong at approximately $6,492,000 in fiscal 2024 with a current ratio of 1.98.
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Our working capital continued to strengthen in fiscal 2025, up to approximately $8,343,000, with a current ratio of 2.30, an increase from $6,492,000 in working capital and a current ratio of 1.98 in fiscal 2024. Our banking relationship remains positive, and we expect it to only strengthen as our balance sheet continues to improve through the retirement of debt.
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Commodity prices in the agricultural market dropped below five-year averages in fiscal 2024, which lead to a strong decrease in demand for our products. This demand decrease was not isolated to our company, instigating mass layoffs and major production cuts in fiscal 2024 for many in our industry.
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Commodity prices in the agricultural market, particularly on row crops, which dropped below five-year averages in fiscal 2024, continued to be weak in fiscal 2025. This led to a second straight fiscal year of decreased demand. Our cattle customers benefited from record beef prices in fiscal 2025, which helped offset some of the decreased demand.
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Another factor in the sales decrease was the amount of inventory on dealer lots at the end of fiscal 2023. Many dealers were oversaturated with inventory related to excess demand in 2023 from high commodity prices and supply chains' inability to keep up.
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We believe our experience in fiscal 2025 was similar to many others in our industry. Our agriculture business is highly cyclical, and with forecasts of continued interest rate relief for farmers, as well as continued increases in commodity prices and easing of rising input costs, we believe things could begin to improve in fiscal 2026.
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This turned drastically in the first quarter of fiscal 2024, as increasing interest rates and declining commodity prices decreased expected net farm income. Gross profit percentage in the Agricultural Products segment for the 2024 fiscal year was 28.3% compared to 29.3% for the 2023 fiscal year. We continued to see inflationary pressure in fiscal 2024.
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Gross profit percentage in the Agricultural Products segment for the 2025 fiscal year was 23.4% compared to 28.3% for the 2024 fiscal year. The gross profit decline in fiscal 2025 was due to decreased sales and the lack of availability of margin to cover fixed costs from the decrease, coupled with other inflationary pressures.
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Steel prices rose through the summer of fiscal 2024 but leveled off and dropped near the end of the year. We continued to see price increases from insurance groups and other manufacturing expense companies, which lead to an increase in our overhead costs. We attribute these factors and overall sales decrease to the drop in gross profit percentage.
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For example, the price of steel was up 26% from 2024 fiscal year end to the end of fiscal 2025, which had a major impact on gross profit. We also saw rising insurance costs, utility costs and supply costs. Additionally, we incurred tariffs on imported products that were not present in fiscal 2024.
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A large share of the operating expense decrease is related to our selling expenses, most notably, commission expense, for which we saw a decrease of $418,000 due to the large sales decrease and the hiring of an inside salesperson. Some of this decrease was offset with added salary for the inside salesperson and travel expense.
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We expect demand for steel to continue to be strong in fiscal 2026, which likely means that steel prices will remain elevated until supply increases. We anticipate that recent declines in oil price could help slow fiscal 2026 price increases.
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Our general and administrative expenses increased approximately $333,000 from fiscal 2023.
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We also had an inside salesperson depart at the same time, which further decreased salaries and travel costs in selling expense. To fill the gaps left by these employees, we promoted an inside salesman and the CEO, CFO and VP of Operations stepped in to absorb day-to-day sales responsibilities.
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The increase is due to $186,000 of additional salary expense due to wage increases and from the hiring of a HR manager at the end of fiscal 2023 along with a $48,000 increase in computer contract expense related to an enterprise resource planning or ERP conversion that we completed in August of 2023.
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We also utilized some existing territory representatives to help better service our customers after the departures. Our general and administrative expenses decreased approximately $689,000 from fiscal 2024 partially due to our CEO stepping down in October of 2024 and other personnel layoffs.
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In addition to early retirement, we also enacted layoffs and strategic terminations that are expected to cut approximately $750,000 of operating expenses annually. Our engineering expenses decreased approximately $166,000 from fiscal 2023 due to a reduction in headcount in our engineering department.
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Our chairman of the board stepped in to fill the CEO role in October of 2024 and has been serving in this role since. We expect our current CEO to remain in the role for the foreseeable future. We believe this will avoid extra administrative expenses, which is advantageous in today's market conditions.
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The sudden deterioration of the agricultural markets in fiscal 2024 was the primary driver for the decline in operating income from fiscal 2023. We reacted quickly when we identified adverse market conditions early on in fiscal 2024, and began right-sizing operations and overhead expenses to facilitate better performance in fiscal 2025. Modular Buildings.
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Total loss from operations for our Agricultural Products segment during the 2025 fiscal year was $1,462,000 compared to operating loss of $1,510,000 for the 2024 fiscal year. Despite the 13.1% decrease in revenue, we improved our results. We also benefited from an employee retention credit refund of approximately $1,235,000 that brought our net loss to $341,000 for this segment.
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While our agricultural products building sales suffered under the same adverse market conditions of our Agricultural Products segment, we saw increased demand in the research markets for our modular products, which led to a 124% increase in research sales.
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We continued to see strong demand on the research side and expect continued success in fiscal 2026. Our reputation as an industry leader in the research modular building industry is gaining traction, which has garnered the attention of repeat customers.
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We are also historically more efficient when our shop is busy and perform better on research projects as we often have more contingency built in than traditional ag modulars. Operating expenses for the 2024 fiscal year were $1,184,000 compared to $1,133,000 for the 2023 fiscal year, an increase of $51,000, or 4.5%.
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Our operations team has built a strong core that is consistently hitting and outperforming budgets and while maintaining a strong standard of quality. Effective leadership in this division has successfully retained quality employees that are performing at a high-level.
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Our project management team continued to build on fiscal 2023 strides to increase profitability on projects and to provide better service to our customers. This focus translated to some of the best results we have seen in this operating segment and we believe our sales funnel leading into fiscal 2025 can deliver similar performance. Discontinued Operations.
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Operating expenses for the 2025 fiscal year were $1,539,000 compared to $1,184,000 for the 2024 fiscal year, an increase of $355,000, or 30.0%. We paid approximately $74,000 more in commission expense in fiscal 2025 due to the large increase in agricultural building sales.
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We also generated approximately $983,000 of cash from the collection of extended term and other outstanding receivables at fiscal 2023 year end, predominately from our Agricultural Products segment. We were also able to reduce our inventory level in fiscal 2024 from higher than normal inventory level at the end of fiscal 2023, to generate approximately $551,000 of positive cash.
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We also experienced an increase in sales salaries with our new business development manager assuming sales responsibilities in tandem with our long-time primary sales leader, President Dan Palmer, who will remain with the Company in a part-time capacity through the second quarter of fiscal 2026 and possibly beyond.
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We expect to be able to continue to decrease inventory in fiscal 2025 to provide positive cash. Our net loss plus noncash adjustment items also provided approximately $1,358,000 in cash in fiscal 2024. Our discontinued operations provided approximately $1,271,000 in positive cash flow primarily from the sale of our remaining real estate.
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While we had strong net income for the year, we consumed cash in our operating activities mainly by inventory increases in our Agricultural Products segment and by fulfillment of contract work in our Modular Buildings segment.
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Our largest uses of cash in fiscal 2024 were the payment of accounts payable, purchases of property, plant, and equipment, and retirement of debt, including the payoff of our roof loan and a large decrease in our operating line of credit. We expect our primary capital needs for fiscal 2025 to be operating expenses and continued retirement of debt.
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We were strongly over billed at the end of fiscal 2024 on contracts in our Modular Buildings segment, which generated cash flow for some larger projects. Our consolidated inventory consumed $1,437,000 of cash in fiscal 2025, while our whole good inventory in our Agricultural Products segment was up approximately $1,778,000 at November 30, 2025.
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We will be focused on increasing efficiency and margin gains to make the most out of our expected sales in fiscal 2025. We expect to receive approximately $1,200,000 of net proceeds from the Employee Retention Credit in fiscal 2025.
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We continued to build inventory despite slow demand in anticipation of improving agricultural markets in this segment.
Removed
Due to the timing of filing an ERC claim after the IRS announced a moratorium on processing applications, and uncertainty surrounding the nature and timing of the claim approval and subsequent payment process, recognition of the claim is deferred until payment is received. Accordingly the claim has not been recorded in receivables, assets, or income.
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It has been rare in our history that we have had readily available products on hand, so our goal is to make sure that when a farmer is ready to buy, our equipment lead times will be minimal, as we identified that as a key factor for funding operations in slower economic times.
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We expect to utilize favorable billing schedules in our Modular Buildings segment in fiscal 2026 to help fund operations moving forward along with similar operating results based on strong early backlog numbers.
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We also expect inventory reductions in our Agricultural Products segment to provide cash in fiscal 2026 as we begin to turn the whole good inventory we have built up in the fourth quarter of fiscal 2025.
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If our backlog does not strengthen through the first quarter of fiscal 2026, we plan to utilize the Iowa Workforce Development Voluntary Workshare program to conserve cash on wages.
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We have seen a small uptick in demand at the start of the first quarter of 2026 in our Agricultural Products segment compared to the first quarter of fiscal 2025, which gives us some optimism that this agricultural cycle is trending upwards. We expect our primary capital needs for fiscal 2026 to be operating expenses and continued retirement of debt.

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