**** Note: Engineering Expense was ommitted on original filing **** SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended May 31, 1998 Commission File No. 0-5131 ART'S-WAY MANUFACTURING CO., INC. (Exact name of registrant as specified in its charter) DELAWARE 42-0920725 State of Incorporation I.R.S. Employer Identification No. Hwy 9 West, Armstrong, Iowa 50514 Address of principal executive offices Zip Code Registrant's telephone number, including area code: (712) 864-3131 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filling requirements for the past 90 days. Yes X No __ Indicate the number of shares outstanding of each of the issuer's classes of common stock as of July 6, 1998: 								1,245,931 							 Number of Shares ART'S-WAY MANUFACTURING CO., INC. CONDENSED STATEMENTS OF OPERATIONS (Unaudited) 	 			 Three Months Ended	 Year To Date 	 May 31 	May 31 	May 31 May 31		 		 1998		 1997	 	 1998 1997	 													 NET SALES	 $ 6,872,111 $ 4,599,307 $11,660,133 $ 9,164,509 COST OF GOODS SOLD	 5,689,300 3,043,916 9,338,285 6,541,452 GROSS PROFIT	 1,182,811 1,555,391 2,321,848 2,623,057 EXPENSES: Engineering 144,479 124,906 266,286 216,536 Selling	 338,215 401,344 687,698 752,366 General and administrative 612,085 534,249 1,197,547 1,114,483 Total 1,094,779 1,060,499 2,151,531 2,083,385 INCOME FROM OPERATIONS 88,032 494,892 170,317 539,672 			 OTHER DEDUCTIONS:				 Interest expense (144,987) (53,022) (273,950) (124,088) Other	 (32,796) (97,789) (57,720) (107,176) Other deductions (177,783) (150,811) (331,670) (231,264) INCOME (LOSS) BEFORE INCOME TAXES 	 (89,751) 344,081 (161,353) 308,408 INCOME TAX EXPENSE (BENEFIT)	 (31,413) 121,814 (56,473) 109,328 NET INCOME (LOSS)	$ (58,338) $ 222,267 $ (104,880) $ 199,080 INCOME (LOSS) PER SHARE (NOTE 2): Basic	 $ (0.04) $ 0.18 $ (0.08) $ 0.16 Diluted	 $ (0.04) 	$ 0.18 $ (0.08) $ 0.16 COMMON SHARES AND EQUIVALENT OUTSTANDING: Basic	 1,245,931 1,238,405 1,245,931 1,238,022 Diluted	 1,245,931 1,246,132 1,245,931 1,243,274