Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Aug. 31, 2015 | Sep. 17, 2015 | |
Entity Registrant Name | ARTS WAY MANUFACTURING CO INC | |
Entity Central Index Key | 7,623 | |
Trading Symbol | artw | |
Current Fiscal Year End Date | --11-30 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 4,061,052 | |
Document Type | 10-Q | |
Document Period End Date | Aug. 31, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Aug. 31, 2015 | Nov. 30, 2014 |
Current assets: | ||
Cash | $ 643,540 | $ 511,716 |
Accounts receivable-customers, net of allowance for doubtful accounts of $21,072 and $35,175 in 2015 and 2014, respectively | 1,875,735 | 2,961,834 |
Inventories, net | 16,493,566 | 15,089,280 |
Deferred taxes | 1,327,079 | 1,259,943 |
Cost and Profit in Excess of Billings | 87,379 | 17,543 |
Income taxes receivable | 265,013 | 100,417 |
Other current assets | 320,740 | 125,228 |
Total current assets | 21,013,052 | 20,065,961 |
Property, plant, and equipment, net | 11,249,804 | 11,680,792 |
Assets held for lease, net | 10,636 | 58,500 |
Goodwill | 375,000 | 993,729 |
Other Assets | 56,204 | 47,360 |
Total assets | 32,704,696 | 32,846,342 |
Current liabilities: | ||
Line of credit | 4,031,278 | 2,569,106 |
Current portion of term debt | 1,312,664 | 1,283,897 |
Accounts payable | 1,225,767 | 874,653 |
Customer deposits | 115,098 | 95,411 |
Billings in Excess of Cost and Profit | 126,447 | 96,382 |
Accrued expenses | 1,229,050 | 1,584,328 |
Total current liabilities | 8,040,304 | 6,503,777 |
Long-term liabilities | ||
Deferred taxes | 1,021,580 | 1,141,580 |
Long Term debt, excluding current portion | 4,960,874 | 5,949,329 |
Total liabilities | $ 14,022,758 | $ 13,594,686 |
Commitments and Contingencies (Notes 6 and 7) | ||
Stockholders’ equity: | ||
Undesignated preferred stock - $0.01 par value. Authorized 500,000 shares in 2015 and 2014; issued and outstanding 0 shares in 2015 and 2014. | $ 0 | $ 0 |
Common stock – $0.01 par value. Authorized 9,500,000 shares in 2015 and 2014; issued and outstanding 4,061,052 in 2015 and 4,048,552 in 2014 | 40,610 | 40,486 |
Additional paid-in capital | 2,667,010 | 2,638,651 |
Retained earnings | 15,974,318 | 16,572,519 |
Total stockholders’ equity | 18,681,938 | 19,251,656 |
Total liabilities and stockholders’ equity | $ 32,704,696 | $ 32,846,342 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) | Aug. 31, 2015 | Nov. 30, 2014 |
Allowance for doubtful accounts | $ 21,072 | $ 35,175 |
Undesignated preferred stock - par value (in dollars per share) | $ 0.01 | $ 0.01 |
Undesignated preferred stock - authorized shares (in shares) | 500,000 | 500,000 |
Undesignated preferred stock - issued shares (in shares) | 0 | 0 |
Undesignated preferred stock - outstanding shares (in shares) | 0 | 0 |
Common stock - par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock - authorized shares (in shares) | 9,500,000 | 9,500,000 |
Common stock - issued shares (in shares) | 4,061,052 | 4,048,552 |
Common stock - outstanding shares (in shares) | 4,061,052 | 4,048,552 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2015 | Aug. 31, 2014 | Aug. 31, 2015 | Aug. 31, 2014 | |
Sales | $ 6,886,077 | $ 11,584,707 | $ 21,979,317 | $ 27,291,037 |
Cost of goods sold | 5,620,719 | 8,880,619 | 16,454,087 | 20,918,763 |
Gross profit | 1,265,358 | 2,704,088 | 5,525,230 | 6,372,274 |
Expenses: | ||||
Engineering | 145,458 | 129,131 | 380,677 | 361,031 |
Selling | 532,445 | 566,452 | 1,678,371 | 1,742,497 |
General and administrative | 972,310 | $ 1,100,733 | 3,107,737 | $ 3,212,018 |
Accumulated impairment losses | (618,729) | (618,729) | ||
Total expenses | 2,268,948 | $ 1,796,316 | 5,785,514 | $ 5,315,546 |
Income from operations | (1,003,584) | 907,772 | (260,284) | 1,056,728 |
Other income (expense): | ||||
Interest expense | (85,458) | (94,112) | (246,524) | (269,274) |
Other | (96,058) | 30,865 | (79,456) | 47,971 |
Total other income (expense) | (181,516) | (63,247) | (325,980) | (221,303) |
Income (loss) before income taxes | (1,185,100) | 844,525 | (586,264) | 835,425 |
Income tax expense (benefit) | (389,507) | 286,317 | (190,494) | 282,374 |
Net income (loss) | $ (795,593) | $ 558,208 | $ (395,770) | $ 553,051 |
Net income per share: | ||||
Basic net income (loss) per share (in dollars per share) | $ (0.20) | $ 0.14 | $ (0.10) | $ 0.14 |
Diluted net income (loss) per share (in dollars per share) | $ (0.20) | $ 0.14 | $ (0.10) | $ 0.14 |
Weighted average outstanding shares used to compute basic net income per share (in shares) | 4,061,052 | 4,048,552 | 4,057,496 | 4,047,544 |
Weighted average outstanding shares used to compute diluted net income per share (in shares) | 4,061,052 | 4,053,129 | 4,057,496 | 4,053,152 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Aug. 31, 2015 | Aug. 31, 2014 | |
Cash flows from operations: | ||
Net income (loss) | $ (395,770) | $ 553,051 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Stock based compensation | 28,484 | 14,504 |
(Gain)/Loss on disposal of property, plant, and equipment | (1,130) | (958) |
Depreciation and amortization expense | 692,680 | $ 633,123 |
Impairment of goodwill | 618,729 | |
Bad debt expense (recovery) | (4,042) | $ 39,207 |
Deferred income taxes | (187,136) | (10,000) |
Changes in assets and liabilities: | ||
Accounts receivable | 1,090,141 | (2,023,321) |
Inventories | (1,404,286) | 103,537 |
Income taxes receivable | (164,596) | (3,821) |
Other assets | (209,337) | (81,517) |
Accounts payable | 351,111 | 192,203 |
Contracts in progress, net | (39,771) | (64,514) |
Customer deposits | 19,687 | (26,114) |
Accrued expenses | (355,278) | (209,896) |
Net cash provided by (used in) operating activities | 39,486 | (884,516) |
Cash flows from investing activities: | ||
Purchases of property, plant, and equipment | (228,624) | (651,251) |
Proceeds from sale of assets | 20,906 | 958 |
Net cash (used in) investing activities | (207,718) | (650,293) |
Cash flows from financing activities: | ||
Net change in line of credit | $ 1,462,172 | 1,489,383 |
Proceeds from term debt | 1,000,000 | |
Repayment of term debt | $ (959,688) | (933,194) |
Proceeds from the exercise of stock options | $ 7,760 | |
Dividends paid to stockholders | $ (202,428) | |
Net cash provided by financing activities | 300,056 | $ 1,563,949 |
Net increase in cash | 131,824 | 29,140 |
Cash at beginning of period | 511,716 | 207,950 |
Cash at end of period | 643,540 | 237,090 |
Supplemental disclosures of cash flow information: | ||
Interest | 242,248 | 273,726 |
Income taxes | $ 263,674 | $ 296,845 |
Note 1 - Description of the Com
Note 1 - Description of the Company | 9 Months Ended |
Aug. 31, 2015 | |
Notes to Financial Statements | |
Nature of Operations [Text Block] | 1) Description of the Company Unless otherwise specified, as used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “Art’s-Way,” and the “Company,” refer to Art’s-Way Manufacturing Co., Inc., a Delaware corporation headquartered in Armstrong, Iowa, and its wholly-owned subsidiaries. We began operations as a farm equipment manufacturer in 1956. Since that time, we have become a major worldwide manufacturer of agricultural equipment. Our principal manufacturing plant is located in Armstrong, Iowa. We have organized our business into four operating segments. Management separately evaluates the financial results of each segment because each is a strategic business unit offering different products and requiring different technology and marketing strategies. Our agricultural products segment (“Manufacturing”) manufactures farm equipment under the Art’s-Way Manufacturing label and private labels. Our pressurized vessels segment (“Vessels”) manufactures pressurized vessels. Our modular buildings segment (“Scientific”) manufactures modular buildings for various uses, commonly animal containment and research laboratories and our tools segment (“Metals”) manufactures steel cutting tools and inserts. For detailed financial information relating to segment reporting, see Note 13, “Segment Information.” |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Account Policies | 9 Months Ended |
Aug. 31, 2015 | |
Notes to Financial Statements | |
Significant Accounting Policies [Text Block] | 2) Summary of Significant Account Policies Statement Presentation The foregoing condensed consolidated financial statements of the Company 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 and the amendment thereto on Form 10-K/A for the fiscal year ended November 30, 2014. The results of operations for the three and nine months ended August 31, 2015 are not necessarily indicative of the results for the fiscal year ending November 30, 2015. The financial books of our Canadian operation are kept in the functional currency of Canadian dollars and the financial statements are converted to U.S. Dollars for consolidation. When consolidating the financial results of the Company into U.S. Dollars for reporting purposes, the Company uses the All-Current translation method. The All-Current method requires the balance sheet assets and liabilities be translated to U.S. Dollars at the exchange rate as of quarter end. Owner’s equity is translated at historical exchange rates and retained earnings are translated at an average exchange rate for the period. Additionally, revenue and expenses are translated at average exchange rates for the periods presented. The resulting cumulative translation adjustment is carried on the balance sheet and distributed among various balance sheet accounts. The Company monitors the amount of the adjustment and considers it to be immaterial. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the three and nine months ended August 31, 2015. Actual results could differ from those estimates. |
Note 3 - Net Income (Loss) Per
Note 3 - Net Income (Loss) Per Share of Common Stock | 9 Months Ended |
Aug. 31, 2015 | |
Notes to Financial Statements | |
Earnings Per Share [Text Block] | 3) Net Income (Loss) Per Share of Common Stock Basic net income (loss) per common share has been computed on the basis of the weighted average number of common shares outstanding. Diluted net income (loss) per share has been computed on the basis of the weighted average number of common shares outstanding plus equivalent shares assuming exercise of stock options. Potential shares of common stock that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Basic and diluted earnings (loss) per common share have been computed based on the following as of August 31, 2015 and August 31, 2014: For the three months ended August 31, 2015 August 31, 2014 Basic: Numerator: net income $ (795,593 ) $ 558,208 Denominator: average number of common shares outstanding 4,061,052 4,048,552 Basic earnings (loss) per common share $ (0.20 ) $ 0.14 Diluted: Numerator: net income $ (795,593 ) $ 558,208 Average number of common shares outstanding 4,061,052 4,048,552 Effect of dilutive stock options 0 4,577 Denominator: dilutive average number of common shares outstanding 4,061,052 4,053,129 Diluted earnings (loss) per common share $ (0.20 ) $ 0.14 For the nine months ended August 31, 2015 August 31, 2014 Basic: Numerator: net income $ (395,770 ) $ 553,051 Denominator: average number of common shares outstanding 4,057,496 4,047,544 Basic earnings (loss) per common share $ (0.10 ) $ 0.14 Diluted: Numerator: net income $ (395,770 ) $ 553,051 Average number of common shares outstanding 4,057,496 4,047,544 Effect of dilutive stock options 0 5,608 Denominator: dilutive average number of common shares outstanding 4,057,496 4,053,152 Diluted earnings (loss) per common share $ (0.10 ) $ 0.14 |
Note 4 - Inventory
Note 4 - Inventory | 9 Months Ended |
Aug. 31, 2015 | |
Notes to Financial Statements | |
Inventory Disclosure [Text Block] | 4) Inventory Major classes of inventory are: August 31, 2015 November 30, 2014 Raw materials $ 10,521,170 $ 10,037,055 Work in process 444,320 467,110 Finished goods 9,116,182 8,504,062 $ 20,081,672 $ 19,008,227 Less: Reserves (3,588,106 ) (3,918,947 ) $ 16,493,566 $ 15,089,280 |
Note 5 - Accrued Expenses
Note 5 - Accrued Expenses | 9 Months Ended |
Aug. 31, 2015 | |
Notes to Financial Statements | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | 5) Accrued Expenses Major components of accrued expenses are: August 31, 2015 November 30, 2014 Salaries, wages, and commissions $ 534,331 $ 673,934 Accrued warranty expense 278,269 234,266 Other 416,450 676,128 $ 1,229,050 $ 1,584,328 |
Note 6 - Product Warranty
Note 6 - Product Warranty | 9 Months Ended |
Aug. 31, 2015 | |
Notes to Financial Statements | |
Product Warranty Disclosure [Text Block] | 6) 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 the 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. The accrued warranty balance is included in accrued expenses as shown in Note 5. Changes in the Company’s product warranty liability for the three and nine months ended August 31, 2015 and August 31, 2014 are as follows: For the three months ended August 31, 2015 August 31, 2014 Balance, beginning $ 283,571 $ 229,400 Settlements / adjustments (70,327 ) (70,683 ) Warranties issued 65,025 126,379 Balance, ending $ 278,269 $ 285,096 For the nine months ended August 31, 2015 August 31, 2014 Balance, beginning $ 234,266 $ 220,719 Settlements / adjustments (240,463 ) (265,753 ) Warranties issued 284,466 330,130 Balance, ending $ 278,269 $ 285,096 |
Note 7 - Loan and Credit Agreem
Note 7 - Loan and Credit Agreements | 9 Months Ended |
Aug. 31, 2015 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | 7) Loan and Credit Agreements On May 1, 2013, the Company began a banking relationship with U.S. Bank, which includes an $8,000,000 revolving line of credit (the “Line of Credit”) which was renewed in 2014 and was scheduled to mature on May 1, 2015. The Line of Credit is renewable annually with advances funding the Company’s working capital needs and is secured by real property and fixed asset collateral. On May 1, 2015, we signed an extension for the line of credit extending the maturity date to July 1, 2015; on June 23, 2015 we signed an additional extension, extending the maturity date to May 1, 2016. We expect to renew the Line of Credit prior to its maturity date. The interest rate is U.S. Bank’s prime interest rate, adjusted each time that the Federal prime rate changes, with a minimum rate of 3.50% per annum. As of August 31, 2015, the interest rate was the minimum of 3.50%. Monthly interest-only payments are required and the unpaid principal and accrued interest is due on the maturity date. As of August 31, 2015, the Company had a principal balance of $4,031,278 outstanding against the Line of Credit, with $3,141,324 remaining available, limited by the borrowing base calculation. The Line of Credit states that the borrowing base will be an amount equal to the sum of 75% of accounts receivable (discounted for aged accounts and customer balances exceeding 20% of aggregate receivables), plus 50% of inventory (this component cannot exceed $6,000,000 and only includes finished goods and raw materials deemed to be in good condition and not obsolete), less any outstanding loan balance of the Line of Credit, and less undrawn amounts of outstanding letters of credit issued by U.S. Bank or any affiliate. The Company’s obligations under the Line of Credit are evidenced by a Revolving Credit Note effective May 1, 2013, a Revolving Credit Agreement dated May 1, 2013 and certain other ancillary documents. In addition to the Line of Credit, on May 1, 2013, the Company obtained four U.S. Bank loans totaling $6,319,000 at a fixed interest rate of 2.98% per annum (the “2013 U.S. Bank Term Loans”). As detailed in the Company’s long-term debt summary below, monthly principal and interest payments in the aggregate amount of $93,850 are required, with final payments of principal and accrued interest on the four loans, in the aggregate amount of $1,372,000, due on May 1, 2018. On May 29, 2014, the Company obtained $1,000,000 in long-term debt from U.S. Bank to partially pay down the Line of Credit draw from 2013 that it had used to finance the purchase of the building and property of Ohio Metal Working Products Company in Canton, Ohio. The maturity date of this loan is May 25, 2017, with a final payment of principal and accrued interest in the amount of $890,000 due May 25, 2017. This loan is secured by a mortgage on the building and property acquired from Ohio Metal Working Products Company in Canton, Ohio pursuant to a Mortgage, Security Agreement and Assignment of Rents between the Company and U.S. Bank, dated May 29, 2014, and is also subject to a Business Security Agreement between Ohio Metal Working Products/Art’s Way, Inc. (“Ohio Metal”) and U.S. Bank and a Continuing Guaranty (Unlimited) by Ohio Metal. On July 16, 2015, the Company obtained an additional $1,500,000 revolving line of credit from U.S. Bank that matures on May 1, 2016 (the “2015 Line of Credit”). The Company has begun a new sales incentive program that offers extended payment terms up to 9 months on certain products for our dealers, subject to a Dealer’s Note and Dealer’s Security Agreement. These notes receivable would not be included in the borrowing base of our Line of Credit, so the 2015 Line of Credit was necessary to preserve our access to capital. The 2015 Line of Credit is secured by real property and fixed asset collateral, as well as all of the Company’s right, title and interest in the Dealer’s Notes and Dealer’s Security Agreements related to advances under the 2015 Line of Credit. The interest rate is U.S. Bank’s prime interest rate, adjusted each time that the Federal prime rate changes, with a minimum rate of 3.50% per annum. As of August 31, 2015, the interest rate was the minimum of 3.50%. Advances under the 2015 Line of Credit are due at the earlier of nine months after the date of the advancement, the 2015 Line of Credit maturity date or the sale by the dealer of the equipment relating to the applicable advance. Monthly interest-only payments are required and the unpaid principal and accrued interest is due on the maturity date. As of August 31, 2015, the Company had a principal balance of $0 outstanding against the 2015 Line of Credit, with $1,500,000 remaining available. The Company’s obligations under the 2015 Line of Credit are evidenced by a Promissory Note effective July 16, 2015 and certain other ancillary documents. Except for the 2015 Line of Credit and the U.S. Bank UHC Loan (as defined below), each of the Company’s term loans from U.S. Bank is governed by a Term Note and a Term Loan Agreement. Each Term Loan Agreement and the Revolving Credit Agreement require the Company to provide monthly internally prepared financial reports, year-end audited financial statements, and a monthly aging of accounts receivable. The Company, as of the end of each fiscal quarter, must maintain a debt to tangible net worth ratio of not more than 1.5 to 1.0 and a fixed charge coverage ratio of at least 1.15 to 1.00. The loans are secured by a first position security interest on the assets of the Company and its subsidiaries, including but not limited to, inventories, machinery, equipment and real estate, in accordance with the Business Security Agreements entered into by the Company and its subsidiaries, the Pledge Agreements entered into by the subsidiaries and the Collateral Assignment of Dealer’s Notes and Security Agreements entered into by the Company. Additionally, the Company has mortgaged certain real property in favor of U.S. Bank as documented by mortgage agreements dated May 1, 2013 and May 29, 2014 (together, the “Mortgages”). If the Company or its subsidiaries (as guarantors pursuant to continuing guaranties) commits an event of default under the Term Loan Agreements, Business Security Agreements, Pledge Agreements, Mortgages, or Revolving Credit Agreement and fails or is unable to cure that default, the interest rate on each of the loans and Line of Credit could increase by 5.0% per annum and by 10.0% per annum with respect to the 2015 Line of Credit, and U.S. Bank can immediately terminate its obligation, if any, to make additional loans to the Company. In addition, U.S. Bank may accelerate the Company’s obligations under the 2015 Line of Credit, collect any and all money otherwise due or to become due and shall have all other rights and remedies for default provided by the Uniform Commercial Code, as well as any other applicable law and the various loan agreements, including, without limitation, the right to repossess, render unusable and/or dispose of the collateral without judicial process. In addition, in an event of default, U.S. Bank may foreclose on mortgaged property pursuant to the terms of the Mortgages. The Company was in compliance with all covenants under the Term Loan Agreements and the Revolving Credit Agreement as measured on August 31, 2015, other than its covenant to maintain a fixed charge coverage ratio of at least 1.15 to 1.00. The fixed charge coverage ratio is based on a rolling 12 month calculation and measures the Company’s ability to cover fixed expenses such as loan payments, tax payments, rental payments, and dividends. The net loss in the third quarter of 2015 from operations was the main reason for the non-compliance result as of August 31, 2015. US Bank has issued a waiver forgiving the non-compliance for the quarter and no event of default occurred. The next measurement date is November 30, 2015. On May 10, 2012, the Company obtained $880,000 in long-term debt from U.S. Bank issued to acquire the building and property of Universal Harvester Co., Inc. located in Ames, Iowa (the “U.S. Bank UHC Loan”). The maturity date of this loan is May 10, 2017, with a final payment of principal and accrued interest in the amount of $283,500 due May 10, 2017. This loan is secured by a mortgage on the building and property acquired from Universal Harvester Co., Inc. in Ames, Iowa, pursuant to a Mortgage, Security Agreement and Assignment of Rents between the Company and U.S. Bank, dated May 10, 2012. On May 1, 2013, the U.S. Bank UHC Loan and the mortgage were amended to extend the mortgage to secure the 2013 U.S. Bank Term Loans in addition to the U.S. Bank UHC Loan. If the Company or its subsidiaries (as guarantors) commits an event of default under the agreement governing the U.S. Bank UHC Loan and fails or is unable to cure during any applicable cure periods, the lender may cause the entire amount of the loan to be immediately due and payable, may foreclose on the property, or may increase the interest rate to 5.00% per annum, plus the interest rate otherwise payable under the U.S. Bank UHC Loan. On May 1, 2010, the Company obtained a loan to finance the purchase of an additional facility located in West Union, Iowa to be used as a distribution center, warehouse facility, and manufacturing plant for certain products under the Art’s-Way brand. The funds for this loan were made available by the Iowa Finance Authority by the issuance of tax exempt bonds. This loan had an original principal amount of $1,300,000, an interest rate of 3.5% per annum and a maturity date of June 1, 2020. On February 1, 2013, the interest rate was decreased to 2.75% per annum. The other terms of the loan remain unchanged. This loan from the Iowa Finance Authority, which has been assigned to The First National Bank of West Union (n/k/a Bank 1 st If the Company commits an event of default under the IFA Loan Agreement and does not cure the event of default within the time specified by the IFA Loan Agreement, the lender may cause the entire amount of the loan to be immediately due and payable and take any other action that it is lawfully permitted to take or in equity to enforce the Company’s performance. The Company was in compliance with all covenants under the IFA Loan Agreement as measured on November 30, 2014. The next measurement date is November 30, 2015. A summary of the Company’s term debt is as follows: August 31, 2015 November 30, 2014 U.S. Bank loan payable in monthly installments of $42,500 including interest at 2.98%, due May 1, 2018 $ 1,313,881 $ 1,662,311 U.S. Bank loan payable in monthly installments of $11,000 including interest at 2.98%, due May 1, 2018 770,351 850,930 U.S. Bank loan payable in monthly installments of $12,550 including interest at 2.98%, due May 1, 2018 873,843 965,889 U.S. Bank loan payable in monthly installments of $27,800 including interest at 2.98%, due May 1, 2018 1,186,756 1,407,366 U.S. Bank loan payable in monthly installments of $11,700 including interest at 3.15%, due May 10, 2017 495,816 588,101 U.S. Bank loan payable in monthly installments of $5,556 including interest at 2.98%, due May 25, 2017 952,818 980,940 Iowa Finance Authority loan payable in monthly installments of $12,500 including interest at 2.75%, due June 1, 2020 680,073 777,689 Total term debt $ 6,273,538 $ 7,233,226 Less current portion of term debt 1,312,664 1,283,897 Term debt, excluding current portion $ 4,960,874 $ 5,949,329 |
Note 8 - Related Party Transact
Note 8 - Related Party Transactions | 9 Months Ended |
Aug. 31, 2015 | |
Notes to Financial Statements | |
Related Party Transactions Disclosure [Text Block] | 8) Related Party Transactions During the three- and nine-month periods ending August 31, 2015 the Company recognized revenues of $0 and $15,718, respectively, for transactions with a related party, compared to $38,348 and $47,588 in the same periods of fiscal 2014. |
Note 9 - Goodwill
Note 9 - Goodwill | 9 Months Ended |
Aug. 31, 2015 | |
Notes to Financial Statements | |
Goodwill Disclosure [Text Block] | 9) Goodwill The Company’s Agricultural Products segment contains goodwill related to our acquisition of the Miller Pro product line in 2007 and our acquisition of Universal Harvester in 2012. Changes in the Company’s carrying amount of goodwill for the nine months ended August 31, 2015 are as follows: August 31, 2015 November 30, 2014 Balance, beginning $ 993,729 $ 993,729 Accumulated impairment losses (618,729 ) - Balance, ending $ 375,000 $ 993,729 We typically test goodwill for impairment in the fourth quarter of our fiscal year. Based on the continued decreased demand for Universal Harvester reels and a decrease in the creditworthiness of a major customer, we determined that it was appropriate to test our goodwill for impairment prior to our fourth quarter. Based on these trends, we have prepared an estimated present value of future cash flows using our projections of sales for the next five years , which was used to evaluate the fair value of the carrying amount of the intangible asset relative to the probable future cash flows. In August 2015, a noncash goodwill impairment loss of $618,729 was recognized in the Agricultural Products segment. |
Note 10 - Recently Issued Accou
Note 10 - Recently Issued Accounting Pronouncements | 9 Months Ended |
Aug. 31, 2015 | |
Notes to Financial Statements | |
Description of New Accounting Pronouncements Not yet Adopted [Text Block] | 10) Recently Issued Accounting Pronouncements Presentation of an Unrecognized Tax Benefit In July 2013, the FASB issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” that clarifies how an unrecognized tax benefit should be presented in the financial statements when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists; as a reduction to a deferred tax asset or as a liability. The amendments are meant to eliminate the diversity that exists in the financial statement presentation of the unrecognized tax benefits. The amendments in this ASU do not require new recurring disclosures and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. The effective date for the Company is our current fiscal year, which began on December 1, 2014. The Company currently has no unrecognized tax benefits that are impacted by the amendment and the implementation of this standard has not had a material impact on our consolidated financial statements. Revenue from Contracts with Customers In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” which supersedes the guidance in “Revenue Recognition (Topic 605)” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and is to be applied retrospectively, with early application not permitted. We are evaluating the new standard, but do not at this time expect this standard to have a material impact on our consolidated financial statements. Going Concern In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern” which is authoritative guidance on management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and provide related footnote disclosures, codified in ASC 205-40, Going Concern |
Note 11 - Equity Incentive Plan
Note 11 - Equity Incentive Plan and Stock Based Compensation | 9 Months Ended |
Aug. 31, 2015 | |
Notes to Financial Statements | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 11) Equity Incentive Plan and Stock Based Compensation On January 27, 2011, the Board of Directors of the Company authorized and approved the Art’s-Way Manufacturing Co., Inc. 2011 Equity Incentive Plan (the “2011 Plan”). The 2011 Plan was approved by the stockholders on April 28, 2011. It replaced the Employee Stock Option Plan and the Directors’ Stock Option Plan (collectively, the “Prior Plans”), and no further stock options will be awarded under the Prior Plans. Awards to directors and executive officers under the 2011 Plan will be governed by the forms of agreement approved by the Board of Directors. The 2011 Plan permits the plan administrator to award nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, performance awards, and stock appreciation rights to employees (including officers), directors, and consultants. The Board of Directors has approved a director compensation policy pursuant to which non-employee directors are automatically granted non-qualified stock options to purchase 2,000 shares of common stock annually or initially upon their election to the Board, which are fully vested. Stock options granted prior to January 27, 2011 are governed by the applicable Prior Plan and the forms of agreement adopted thereunder. Stock-based compensation expense reflects the fair value of stock-based awards measured at the grant date and recognized over the relevant vesting period. We estimate the fair value of each stock-based award on the measurement date using the Black-Scholes option valuation model which incorporates assumptions as to stock price volatility, the expected life of the options, risk-free interest rate, and dividend yield. Expected volatility is based on historical volatility of the Company’s stock and other factors. The Company uses historical option exercise and termination data to estimate the expected term the options are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is calculated using historical dividend amounts and the stock price at the option issuance date. We incurred $0 and $28,484 of stock-based compensation expense during the three and nine months ended August 31, 2015, respectively, compared to $0 and $14,504 of stock-based compensation expense for the same respective periods of fiscal 2014. |
Note 12 - Disclosures About the
Note 12 - Disclosures About the Fair Value of Financial Instruments | 9 Months Ended |
Aug. 31, 2015 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | 12) Disclosures About the Fair Value of Financial Instruments The fair value of a financial instrument is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties. At August 31, 2015, and November 30, 2014, the carrying amount approximated fair value for cash, accounts receivable, accounts payable, notes payable to bank, and other current and long-term liabilities. The carrying amounts approximate fair value because of the short maturity of these instruments. W e performed a nonrecurring fair value assessment of goodwill related to the Universal Harvester acquisition using a present value of estimated future cash flows calculation, described in more detail in Note 9. The fair value of the Company’s installment term loans payable also approximate recorded value because the interest rates charged under the loan terms are not substantially different than current interest rates. |
Note 13 - Segment Information
Note 13 - Segment Information | 9 Months Ended |
Aug. 31, 2015 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | 13) Segment Information There are four reportable segments: agricultural products, pressurized vessels, modular buildings and tools. The agricultural products segment fabricates and sells farming products as well as related equipment and replacement parts for these products in the United States and worldwide. The pressurized vessels segment produces and services pressurized tanks. The modular buildings segment manufactures and installs modular buildings for animal containment and various laboratory uses. The tools segment manufactures steel cutting tools and inserts. The accounting policies applied to determine the segment information are the same as those described in the summary of significant accounting policies. Management evaluates the performance of each segment based on profit or loss from operations before income taxes, exclusive of nonrecurring gains and losses. Approximate financial information with respect to the reportable segments is as follows. Three Months Ended August 31, 2015 Agricultural Products Pressurized Vessels Modular Buildings Tools Consolidated Revenue from external customers $ 4,911,000 $ 372,000 $ 1,103,000 $ 500,000 $ 6,886,000 Income (loss) from operations (861,000 ) (105,000 ) 45,000 (83,000 ) $ (1,004,000 ) Income (loss) before tax (1,019,000 ) (113,000 ) 38,000 (91,000 ) $ (1,185,000 ) Total Assets 24,540,000 2,511,000 2,691,000 2,963,000 $ 32,705,000 Capital expenditures 71,000 8,000 6,000 6,000 $ 91,000.00 Depreciation & Amortization 159,000 27,000 31,000 30,000 $ 247,000 Three Months Ended August 31, 2014 Agricultural Products Pressurized Vessels Modular Buildings Tools Consolidated Revenue from external customers $ 9,362,000 $ 606,000 $ 820,000 $ 797,000 $ 11,585,000 Income (loss) from operations 1,034,000 (59,000 ) 7,000 (74,000 ) $ 908,000 Income (loss) before tax 991,000 (64,000 ) - (82,000 ) $ 845,000 Total Assets 26,426,000 2,489,000 2,842,000 3,334,000 $ 35,091,000 Capital expenditures 39,000 - - 1,000 $ 40,000 Depreciation & Amortization 147,000 27,000 36,000 29,000 $ 239,000 Nine Months Ended August 31, 2015 Agricultural Products Pressurized Vessels Modular Buildings Tools Consolidated Revenue from external customers $ 16,592,000 $ 1,374,000 $ 2,162,000 $ 1,851,000 $ 21,979,000 Income (loss) from operations 158,000 (171,000 ) (119,000 ) (128,000 ) $ (260,000 ) Income (loss) before tax (83,000 ) (191,000 ) (139,000 ) (173,000 ) $ (586,000 ) Total Assets 24,540,000 2,511,000 2,691,000 2,963,000 $ 32,705,000 Capital expenditures 204,000 10,000 4,000 11,000 $ 229,000 Depreciation & Amortization 426,000 80,000 98,000 89,000 $ 692,000 Nine Months Ended August 31, 2014 Agricultural Products Pressurized Vessels Modular Buildings Tools Consolidated Revenue from external customers $ 21,366,000 $ 1,504,000 $ 1,818,000 $ 2,603,000 $ 27,291,000 Income (loss) from operations 1,430,000 (168,000 ) (233,000 ) 28,000 $ 1,057,000 Income (loss) before tax 1,292,000 (190,000 ) (249,000 ) (18,000 ) $ 835,000 Total Assets 26,426,000 2,489,000 2,842,000 3,334,000 $ 35,091,000 Capital expenditures 629,000 11,000 - 11,000 $ 651,000 Depreciation & Amortization 356,000 81,000 110,000 86,000 $ 633,000 |
Note 14 - Subsequent Event
Note 14 - Subsequent Event | 9 Months Ended |
Aug. 31, 2015 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | 14) Subsequent Event Management evaluated all other activity of the Company and concluded that no subsequent events have occurred that would require recognition in the condensed consolidated financial statements. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 9 Months Ended |
Aug. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Statement Presentation The foregoing condensed consolidated financial statements of the Company 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 and the amendment thereto on Form 10-K/A for the fiscal year ended November 30, 2014. The results of operations for the three and nine months ended August 31, 2015 are not necessarily indicative of the results for the fiscal year ending November 30, 2015. The financial books of our Canadian operation are kept in the functional currency of Canadian dollars and the financial statements are converted to U.S. Dollars for consolidation. When consolidating the financial results of the Company into U.S. Dollars for reporting purposes, the Company uses the All-Current translation method. The All-Current method requires the balance sheet assets and liabilities be translated to U.S. Dollars at the exchange rate as of quarter end. Owner’s equity is translated at historical exchange rates and retained earnings are translated at an average exchange rate for the period. Additionally, revenue and expenses are translated at average exchange rates for the periods presented. The resulting cumulative translation adjustment is carried on the balance sheet and distributed among various balance sheet accounts. The Company monitors the amount of the adjustment and considers it to be immaterial. |
Use of Estimates, Policy [Policy Text Block] | Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the three and nine months ended August 31, 2015. Actual results could differ from those estimates. |
Note 3 - Net Income (Loss) Pe21
Note 3 - Net Income (Loss) Per Share of Common Stock (Tables) | 9 Months Ended |
Aug. 31, 2015 | |
Notes Tables | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | For the three months ended August 31, 2015 August 31, 2014 Basic: Numerator: net income $ (795,593 ) $ 558,208 Denominator: average number of common shares outstanding 4,061,052 4,048,552 Basic earnings (loss) per common share $ (0.20 ) $ 0.14 Diluted: Numerator: net income $ (795,593 ) $ 558,208 Average number of common shares outstanding 4,061,052 4,048,552 Effect of dilutive stock options 0 4,577 Denominator: dilutive average number of common shares outstanding 4,061,052 4,053,129 Diluted earnings (loss) per common share $ (0.20 ) $ 0.14 For the nine months ended August 31, 2015 August 31, 2014 Basic: Numerator: net income $ (395,770 ) $ 553,051 Denominator: average number of common shares outstanding 4,057,496 4,047,544 Basic earnings (loss) per common share $ (0.10 ) $ 0.14 Diluted: Numerator: net income $ (395,770 ) $ 553,051 Average number of common shares outstanding 4,057,496 4,047,544 Effect of dilutive stock options 0 5,608 Denominator: dilutive average number of common shares outstanding 4,057,496 4,053,152 Diluted earnings (loss) per common share $ (0.10 ) $ 0.14 |
Note 4 - Inventory (Tables)
Note 4 - Inventory (Tables) | 9 Months Ended |
Aug. 31, 2015 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | August 31, 2015 November 30, 2014 Raw materials $ 10,521,170 $ 10,037,055 Work in process 444,320 467,110 Finished goods 9,116,182 8,504,062 $ 20,081,672 $ 19,008,227 Less: Reserves (3,588,106 ) (3,918,947 ) $ 16,493,566 $ 15,089,280 |
Note 5 - Accrued Expenses (Tabl
Note 5 - Accrued Expenses (Tables) | 9 Months Ended |
Aug. 31, 2015 | |
Notes Tables | |
Schedule of Accrued Liabilities [Table Text Block] | August 31, 2015 November 30, 2014 Salaries, wages, and commissions $ 534,331 $ 673,934 Accrued warranty expense 278,269 234,266 Other 416,450 676,128 $ 1,229,050 $ 1,584,328 |
Note 6 - Product Warranty (Tabl
Note 6 - Product Warranty (Tables) | 9 Months Ended |
Aug. 31, 2015 | |
Notes Tables | |
Schedule of Product Warranty Liability [Table Text Block] | For the three months ended August 31, 2015 August 31, 2014 Balance, beginning $ 283,571 $ 229,400 Settlements / adjustments (70,327 ) (70,683 ) Warranties issued 65,025 126,379 Balance, ending $ 278,269 $ 285,096 For the nine months ended August 31, 2015 August 31, 2014 Balance, beginning $ 234,266 $ 220,719 Settlements / adjustments (240,463 ) (265,753 ) Warranties issued 284,466 330,130 Balance, ending $ 278,269 $ 285,096 |
Note 7 - Loan and Credit Agre25
Note 7 - Loan and Credit Agreements (Tables) | 9 Months Ended |
Aug. 31, 2015 | |
Notes Tables | |
Schedule of Debt [Table Text Block] | August 31, 2015 November 30, 2014 U.S. Bank loan payable in monthly installments of $42,500 including interest at 2.98%, due May 1, 2018 $ 1,313,881 $ 1,662,311 U.S. Bank loan payable in monthly installments of $11,000 including interest at 2.98%, due May 1, 2018 770,351 850,930 U.S. Bank loan payable in monthly installments of $12,550 including interest at 2.98%, due May 1, 2018 873,843 965,889 U.S. Bank loan payable in monthly installments of $27,800 including interest at 2.98%, due May 1, 2018 1,186,756 1,407,366 U.S. Bank loan payable in monthly installments of $11,700 including interest at 3.15%, due May 10, 2017 495,816 588,101 U.S. Bank loan payable in monthly installments of $5,556 including interest at 2.98%, due May 25, 2017 952,818 980,940 Iowa Finance Authority loan payable in monthly installments of $12,500 including interest at 2.75%, due June 1, 2020 680,073 777,689 Total term debt $ 6,273,538 $ 7,233,226 Less current portion of term debt 1,312,664 1,283,897 Term debt, excluding current portion $ 4,960,874 $ 5,949,329 |
Note 9 - Goodwill (Tables)
Note 9 - Goodwill (Tables) | 9 Months Ended |
Aug. 31, 2015 | |
Notes Tables | |
Details of Impairment of Long-Lived Assets Held and Used by Asset [Table Text Block] | August 31, 2015 November 30, 2014 Balance, beginning $ 993,729 $ 993,729 Accumulated impairment losses (618,729 ) - Balance, ending $ 375,000 $ 993,729 |
Note 13 - Segment Information (
Note 13 - Segment Information (Tables) | 9 Months Ended |
Aug. 31, 2015 | |
Notes Tables | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Three Months Ended August 31, 2015 Agricultural Products Pressurized Vessels Modular Buildings Tools Consolidated Revenue from external customers $ 4,911,000 $ 372,000 $ 1,103,000 $ 500,000 $ 6,886,000 Income (loss) from operations (861,000 ) (105,000 ) 45,000 (83,000 ) $ (1,004,000 ) Income (loss) before tax (1,019,000 ) (113,000 ) 38,000 (91,000 ) $ (1,185,000 ) Total Assets 24,540,000 2,511,000 2,691,000 2,963,000 $ 32,705,000 Capital expenditures 71,000 8,000 6,000 6,000 $ 91,000.00 Depreciation & Amortization 159,000 27,000 31,000 30,000 $ 247,000 Three Months Ended August 31, 2014 Agricultural Products Pressurized Vessels Modular Buildings Tools Consolidated Revenue from external customers $ 9,362,000 $ 606,000 $ 820,000 $ 797,000 $ 11,585,000 Income (loss) from operations 1,034,000 (59,000 ) 7,000 (74,000 ) $ 908,000 Income (loss) before tax 991,000 (64,000 ) - (82,000 ) $ 845,000 Total Assets 26,426,000 2,489,000 2,842,000 3,334,000 $ 35,091,000 Capital expenditures 39,000 - - 1,000 $ 40,000 Depreciation & Amortization 147,000 27,000 36,000 29,000 $ 239,000 Nine Months Ended August 31, 2015 Agricultural Products Pressurized Vessels Modular Buildings Tools Consolidated Revenue from external customers $ 16,592,000 $ 1,374,000 $ 2,162,000 $ 1,851,000 $ 21,979,000 Income (loss) from operations 158,000 (171,000 ) (119,000 ) (128,000 ) $ (260,000 ) Income (loss) before tax (83,000 ) (191,000 ) (139,000 ) (173,000 ) $ (586,000 ) Total Assets 24,540,000 2,511,000 2,691,000 2,963,000 $ 32,705,000 Capital expenditures 204,000 10,000 4,000 11,000 $ 229,000 Depreciation & Amortization 426,000 80,000 98,000 89,000 $ 692,000 Nine Months Ended August 31, 2014 Agricultural Products Pressurized Vessels Modular Buildings Tools Consolidated Revenue from external customers $ 21,366,000 $ 1,504,000 $ 1,818,000 $ 2,603,000 $ 27,291,000 Income (loss) from operations 1,430,000 (168,000 ) (233,000 ) 28,000 $ 1,057,000 Income (loss) before tax 1,292,000 (190,000 ) (249,000 ) (18,000 ) $ 835,000 Total Assets 26,426,000 2,489,000 2,842,000 3,334,000 $ 35,091,000 Capital expenditures 629,000 11,000 - 11,000 $ 651,000 Depreciation & Amortization 356,000 81,000 110,000 86,000 $ 633,000 |
Note 1 - Description of the C28
Note 1 - Description of the Company (Details Textual) | 9 Months Ended |
Aug. 31, 2015 | |
Number of Operating Segments | 4 |
Note 3 - Net Income (Loss) Pe29
Note 3 - Net Income (Loss) Per Share of Common Stock - Basic and Diluted Earnings Per Common Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2015 | Aug. 31, 2014 | Aug. 31, 2015 | Aug. 31, 2014 | |
Basic: | ||||
Numerator: net income (loss) | $ (795,593) | $ 558,208 | $ (395,770) | $ 553,051 |
Denominator: average number of common shares outstanding (in shares) | 4,061,052 | 4,048,552 | 4,057,496 | 4,047,544 |
Basic earnings (loss) per common share (in dollars per share) | $ (0.20) | $ 0.14 | $ (0.10) | $ 0.14 |
Diluted: | ||||
Numerator: net income (loss) | $ (795,593) | $ 558,208 | $ (395,770) | $ 553,051 |
Average number of common shares outstanding (in shares) | 4,061,052 | 4,048,552 | 4,057,496 | 4,047,544 |
Effect of dilutive stock options (in shares) | 0 | 4,577 | 0 | 5,608 |
Denominator: dilutive average number of common shares outstanding (in shares) | 4,061,052 | 4,053,129 | 4,057,496 | 4,053,152 |
Diluted earnings (loss) per common share (in dollars per share) | $ (0.20) | $ 0.14 | $ (0.10) | $ 0.14 |
Note 4 - Inventory - Major Clas
Note 4 - Inventory - Major Classes of Inventory (Details) - USD ($) | Aug. 31, 2015 | Nov. 30, 2014 |
Raw materials | $ 10,521,170 | $ 10,037,055 |
Work in process | 444,320 | 467,110 |
Finished goods | 9,116,182 | 8,504,062 |
Inventory, gross | 20,081,672 | 19,008,227 |
Less: Reserves | (3,588,106) | (3,918,947) |
Inventory, net | $ 16,493,566 | $ 15,089,280 |
Note 5 - Accrued Expenses - Maj
Note 5 - Accrued Expenses - Major Components Of Accrued Expenses (Details) - USD ($) | Aug. 31, 2015 | Nov. 30, 2014 |
Salaries, wages, and commissions | $ 534,331 | $ 673,934 |
Accrued warranty expense | 278,269 | 234,266 |
Other | 416,450 | 676,128 |
Accrued expenses | $ 1,229,050 | $ 1,584,328 |
Note 6 - Product Warranty (Deta
Note 6 - Product Warranty (Details Textual) | 9 Months Ended |
Aug. 31, 2015 | |
Standard Product Warrant Term | 1 year |
Note 6 - Product Warranty - Cha
Note 6 - Product Warranty - Changes In Product Warranty Liability (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2015 | Aug. 31, 2014 | Aug. 31, 2015 | Aug. 31, 2014 | |
Balance, beginning | $ 283,571 | $ 229,400 | $ 234,266 | $ 220,719 |
Settlements / adjustments | (70,327) | (70,683) | (240,463) | (265,753) |
Warranties issued | 65,025 | 126,379 | 284,466 | 330,130 |
Balance, ending | $ 278,269 | $ 285,096 | $ 278,269 | $ 285,096 |
Note 7 - Loan and Credit Agre34
Note 7 - Loan and Credit Agreements (Details Textual) | Jul. 16, 2015USD ($) | Aug. 31, 2015USD ($) | Nov. 30, 2014USD ($) | May. 29, 2014USD ($) | May. 01, 2013USD ($) | Feb. 01, 2013 | May. 10, 2012USD ($) | May. 01, 2010USD ($) |
US Bank New Loans [Member] | ||||||||
Number of Bank Loans | 4 | |||||||
Debt Instrument, Face Amount | $ 6,319,000 | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.98% | |||||||
Debt Instrument, Periodic Payment | $ 93,850 | |||||||
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | $ 1,372,000 | |||||||
Debt Instrument Covenant Debt to Tangible Net Worth Ratio | 1.5 | |||||||
Debt Instrument Covenant Fixed Charge Coverage Ratio | 1.15 | |||||||
Debt Instrument Covenant Interest Rate Increase in Event of Default | 5.00% | |||||||
US Bank [Member] | ||||||||
Debt Instrument, Face Amount | $ 1,000,000 | $ 880,000 | ||||||
Term Loan Final Payment | $ 890,000 | $ 283,500 | ||||||
Debt Instrument Covenant Interest Rate Increase in Event of Default | 5.00% | |||||||
The 2015 Line of Credit [Member] | US Bank [Member] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,500,000 | |||||||
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum | 3.50% | |||||||
Line of Credit Facility, Interest Rate at Period End | 3.50% | |||||||
Long-term Line of Credit | $ 0 | |||||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 1,500,000 | |||||||
The 2015 Line of Credit [Member] | ||||||||
Debt Instrument Covenant Interest Rate Increase in Event of Default | 10.00% | |||||||
Iowa Finance Authority [Member] | ||||||||
Debt Instrument, Face Amount | $ 1,300,000 | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.15% | 3.15% | 2.75% | 3.50% | ||||
Debt Instrument, Periodic Payment | $ 11,700 | $ 11,700 | ||||||
Debt Instrument Covenant Debt Service Coverage Ratio | 1.5 | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 8,000,000 | |||||||
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum | 3.50% | |||||||
Line of Credit Facility, Interest Rate at Period End | 3.50% | |||||||
Long-term Line of Credit | $ 4,031,278 | |||||||
Line of Credit Facility, Remaining Borrowing Capacity | $ 3,141,324 | |||||||
Line of Credit Facility Borrowing Capacity Borrowing Base Percentage of Accounts Receivable | 75.00% | |||||||
Line of Credit Facility Borrowing Capacity Borrowing Base Minimum Percentage of Aggregate Receivables | 20.00% | |||||||
Line of Credit Facility Borrowing Capacity Borrowing Base Percentage of Inventory | 50.00% | |||||||
Line of Credit Facility Borrowing Capacity Borrowing Base Maximum Inventory Amount | $ 6,000,000 |
Note 7 - Loan and Credit Agre35
Note 7 - Loan and Credit Agreements - Summary Of Term Debt (Details) - USD ($) | Aug. 31, 2015 | Nov. 30, 2014 |
US Bank Loan 1 [Member] | ||
Term debt | $ 1,313,881 | $ 1,662,311 |
US Bank Loan 2 [Member] | ||
Term debt | 770,351 | 850,930 |
US Bank Loan 3 [Member] | ||
Term debt | 873,843 | 965,889 |
US Bank Loan 4 [Member] | ||
Term debt | 1,186,756 | 1,407,366 |
US Bank Loan 5 [Member] | ||
Term debt | 495,816 | 588,101 |
US Bank Loan 6 [Member] | ||
Term debt | 952,818 | 980,940 |
Iowa Finance Authority [Member] | ||
Term debt | 680,073 | 777,689 |
Term debt | 6,273,538 | 7,233,226 |
Less current portion of term debt | 1,312,664 | 1,283,897 |
Term debt, excluding current portion | $ 4,960,874 | $ 5,949,329 |
Note 7 - Loan and Credit Agre36
Note 7 - Loan and Credit Agreements - Summary Of Term Debt (Details) (Parentheticals) - USD ($) | 9 Months Ended | 12 Months Ended |
Aug. 31, 2015 | Nov. 30, 2014 | |
US Bank Loan 1 [Member] | ||
Debt Instrument, Periodic Payment | $ 42,500 | $ 42,500 |
Debt Instrument, Interest Rate, Stated Percentage | 2.98% | 2.98% |
US Bank Loan 2 [Member] | ||
Debt Instrument, Periodic Payment | $ 11,000 | $ 11,000 |
Debt Instrument, Interest Rate, Stated Percentage | 2.98% | 2.98% |
US Bank Loan 3 [Member] | ||
Debt Instrument, Periodic Payment | $ 12,500 | $ 12,500 |
Debt Instrument, Interest Rate, Stated Percentage | 2.98% | 2.98% |
US Bank Loan 4 [Member] | ||
Debt Instrument, Periodic Payment | $ 2.75 | $ 2.75 |
Debt Instrument, Interest Rate, Stated Percentage | 12550.00% | 12550.00% |
US Bank Loan 5 [Member] | ||
Debt Instrument, Periodic Payment | $ 5,556 | $ 5,556 |
Debt Instrument, Interest Rate, Stated Percentage | 2.98% | 2.98% |
US Bank Loan 6 [Member] | ||
Debt Instrument, Periodic Payment | $ 2.98 | $ 2.98 |
Debt Instrument, Interest Rate, Stated Percentage | 27800.00% | 27800.00% |
Iowa Finance Authority [Member] | ||
Debt Instrument, Periodic Payment | $ 11,700 | $ 11,700 |
Debt Instrument, Interest Rate, Stated Percentage | 3.15% | 3.15% |
Note 8 - Related Party Transa37
Note 8 - Related Party Transactions (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2015 | Aug. 31, 2014 | Aug. 31, 2015 | Aug. 31, 2014 | |
Revenue from Related Parties | $ 0 | $ 38,348 | $ 15,718 | $ 47,588 |
Note 9 - Goodwill (Details Text
Note 9 - Goodwill (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Aug. 31, 2015 | Aug. 31, 2014 | Aug. 31, 2015 | Aug. 31, 2014 | Nov. 30, 2014 | |
Agricultural Products [Member] | |||||
Goodwill, Impairment Loss | $ 618,729 | ||||
Goodwill, Impairment Loss | $ 618,729 | $ 618,729 |
Note 9 - Goodwill - Impairment
Note 9 - Goodwill - Impairment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Aug. 31, 2015 | Aug. 31, 2014 | Aug. 31, 2015 | Aug. 31, 2014 | Nov. 30, 2014 | |
Balance, beginning | $ 993,729 | $ 993,729 | $ 993,729 | ||
Accumulated impairment losses | $ (618,729) | (618,729) | |||
Balance, ending | $ 375,000 | $ 375,000 | $ 993,729 |
Note 11 - Equity Incentive Pl40
Note 11 - Equity Incentive Plan and Stock Based Compensation (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2015 | Aug. 31, 2014 | Aug. 31, 2015 | Aug. 31, 2014 | |
Non Qualified Options to Each Director Annually or Upon Election [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,000 | 2,000 | ||
Allocated Share-based Compensation Expense | $ 0 | $ 0 | $ 28,484 | $ 14,504 |
Note 13 - Segment Information41
Note 13 - Segment Information (Details Textual) | 9 Months Ended |
Aug. 31, 2015 | |
Number of Reportable Segments | 4 |
Note 13 - Segment Information -
Note 13 - Segment Information - Segment Reporting Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2015 | Aug. 31, 2014 | Aug. 31, 2015 | Aug. 31, 2014 | |
Operating Segments [Member] | Agricultural Products [Member] | ||||
Revenue from external customers | $ 4,911,000 | $ 9,362,000 | $ 16,592,000 | $ 21,366,000 |
Income (loss) from operations | (861,000) | 1,034,000 | 158,000 | 1,430,000 |
Income (loss) before tax | (1,019,000) | 991,000 | (83,000) | 1,292,000 |
Total Assets | 24,540,000 | 26,426,000 | 24,540,000 | 26,426,000 |
Capital expenditures | 71,000 | 39,000 | 204,000 | 629,000 |
Depreciation & Amortization | 159,000 | 147,000 | 426,000 | 356,000 |
Operating Segments [Member] | Pressurized Vessels [Member] | ||||
Revenue from external customers | 372,000 | 606,000 | 1,374,000 | 1,504,000 |
Income (loss) from operations | (105,000) | (59,000) | (171,000) | (168,000) |
Income (loss) before tax | (113,000) | (64,000) | (191,000) | (190,000) |
Total Assets | 2,511,000 | $ 2,489,000 | 2,511,000 | 2,489,000 |
Capital expenditures | 8,000 | 10,000 | 11,000 | |
Depreciation & Amortization | 27,000 | $ 27,000 | 80,000 | 81,000 |
Operating Segments [Member] | Modular Buildings [Member] | ||||
Revenue from external customers | 1,103,000 | 820,000 | 2,162,000 | 1,818,000 |
Income (loss) from operations | 45,000 | $ 7,000 | (119,000) | (233,000) |
Income (loss) before tax | 38,000 | (139,000) | (249,000) | |
Total Assets | 2,691,000 | $ 2,842,000 | 2,691,000 | $ 2,842,000 |
Capital expenditures | 6,000 | 4,000 | ||
Depreciation & Amortization | 31,000 | $ 36,000 | 98,000 | $ 110,000 |
Operating Segments [Member] | Tools [Member] | ||||
Revenue from external customers | 500,000 | 797,000 | 1,851,000 | 2,603,000 |
Income (loss) from operations | (83,000) | (74,000) | (128,000) | 28,000 |
Income (loss) before tax | (91,000) | (82,000) | (173,000) | (18,000) |
Total Assets | 2,963,000 | 3,334,000 | 2,963,000 | 3,334,000 |
Capital expenditures | 6,000 | 1,000 | 11,000 | 11,000 |
Depreciation & Amortization | 30,000 | 29,000 | 89,000 | 86,000 |
Operating Segments [Member] | ||||
Revenue from external customers | 6,886,000 | 11,585,000 | 21,979,000 | 27,291,000 |
Income (loss) from operations | (1,004,000) | 908,000 | (260,000) | 1,057,000 |
Income (loss) before tax | (1,185,000) | 845,000 | (586,000) | 835,000 |
Total Assets | 32,705,000 | 35,091,000 | 32,705,000 | 35,091,000 |
Capital expenditures | 91,000 | 40,000 | 229,000 | 651,000 |
Depreciation & Amortization | 247,000 | 239,000 | 692,000 | 633,000 |
Revenue from external customers | 6,886,077 | 11,584,707 | 21,979,317 | 27,291,037 |
Income (loss) from operations | (1,003,584) | 907,772 | (260,284) | 1,056,728 |
Income (loss) before tax | (1,185,100) | $ 844,525 | (586,264) | 835,425 |
Total Assets | $ 32,704,696 | 32,704,696 | ||
Capital expenditures | 228,624 | 651,251 | ||
Depreciation & Amortization | $ 692,680 | $ 633,123 |