Executive Summary

Fiscal 2024 concluded with net sales down 19.1% to $24.499M and operating income down to $0.461M as Agricultural Products faced a cyclical downturn, while Modular Buildings delivered strong growth and margin expansion .
Modular Buildings offset Ag weakness: segment sales +25.9% to $9.836M with gross margin 32.1% (+650 bps YoY), reflecting strong execution on research projects; Ag sales fell 34.7% to $14.663M with gross margin 28.3% (-100 bps YoY) amid low crop prices and elevated dealer inventories .
Management cited “improved liquidity,” “reduced overhead,” and “debt at a historical low,” and expressed confidence in 2025 profitability and cash flow improvement; positive demand indicators noted in dairy and livestock markets, with momentum expected to continue in Modular Buildings .
QTD/Q4 context: 9M FY24 sales were $18.329M; FY total $24.499M implies Q4 sales ~$6.170M (derived). Nine-month operating loss of $(0.058)M versus FY operating income $0.461M implies Q4 operating income ~$0.519M (derived). No Wall Street consensus estimates were available via S&P Global for comparison (API limit) .
Leadership transition executed in October: CEO David King departed and Chairman Marc McConnell assumed CEO role, emphasizing cost discipline and Modular Buildings strength as near-term pillars .

What Went Well and What Went Wrong

What Went Well
- Modular Buildings delivered one of its best years: sales +25.9% YoY and gross margin up to 32.1% on superior project execution and efficiency in research projects .
- Cost actions and balance sheet focus: management reduced overhead, improved liquidity, and lowered debt to a “historical low,” setting up 2025 profitability/cash flow improvement .
- CEO outlook: “We anticipate that solid demand, reduced overhead expenses, improved liquidity and reduced interest expense from debt reduction will result in improved profitability and cashflow in fiscal 2025” — Marc McConnell, Chairman, President & CEO .
What Went Wrong
- Agricultural Products downturn: segment sales -34.7% YoY on low crop prices, elevated dealer inventories, and high rates; gross margin contracted 100 bps to 28.3% .
- Consolidated FY continuing ops swung to a small net loss of $(94)k (vs. $763k profit in FY23), reflecting weaker Ag demand and rate pressure on interest expense .
- Backlog normalization: Ag backlog ~$3.486M (vs. $4.364M prior-year date) and Modular ~$2.393M (vs. $6.170M prior-year date); management expects Modular leads in engineering to convert, but headline backlog is lower YoY .

Financial Results

Annual YoY comparison (continuing operations)

Metric	FY 2023	FY 2024
Net Sales ($USD)	$30.281M	$24.499M
Operating Income ($USD)	$1.531M	$0.461M
Income (Loss) from Continuing Ops ($USD)	$0.763M	$(0.094)M
EPS – Continuing Ops – Basic ($)	$0.15	$(0.02)
EPS – Continuing Ops – Diluted ($)	$0.15	$(0.02)
Consolidated Net Income incl. Discontinued Ops ($USD)	$0.267M	$0.307M

Segment breakdown (annual)

Segment	Metric	FY 2023	FY 2024
Agricultural Products	Net Sales ($USD)	$22.467M	$14.663M
	Gross Profit Margin (%)	29.3%	28.3%
	Operating Income ($USD)	n/a	$(1.510)M
Modular Buildings	Net Sales ($USD)	$7.814M	$9.836M
	Gross Profit Margin (%)	25.6%	32.1%
	Operating Income ($USD)	n/a	$1.971M

Notes: The press release provides segment operating income for FY24; FY23 segment operating income not disclosed in the press release excerpt .

Quarterly progression (FY2024 – continuing operations)

Metric	Q1 2024 (Feb 29)	Q2 2024 (May 31)	Q3 2024 (Aug 31)	Q4 2024 (Derived)
Sales ($USD)	$5.723M	$6.730M	$5.876M	~$6.170M (FY $24.499M – 9M $18.329M)
Operating Income ($USD)	$(0.537)M	$0.169M	$0.154M	~$0.519M (FY $0.461M – 9M $(0.058)M))
Net Income (Loss) – Continuing ($USD)	$(0.424)M	$(0.005)M	$0.002M	~$0.333M (FY $(0.094)M – 9M $(0.427)M))
EPS (Basic) ($)	$(0.09)	$0.00	$0.00	n/a
Operating Margin (%)	~−9.4% (−0.537/5.723)	~2.5% (0.169/6.730)	~2.6% (0.154/5.876)	~8.4% (0.519/6.170)

Notes: Q4 figures are derived from FY minus 9M where applicable using reported values .

KPIs and other items

KPI	Current	Prior/Context
Ag Products backlog	~$3.486M as of Feb 4, 2025	~$4.364M as of Feb 4, 2024
Modular Buildings backlog	~$2.393M as of Feb 4, 2025	~$6.170M as of Feb 4, 2024
Tools segment real estate sale	$1.800M on Oct 21, 2024	Discontinued ops net income $0.402M in FY24 vs $(0.496)M FY23

Versus Estimates

S&P Global consensus estimates (EPS/Revenue) for Q4 FY2024 were unavailable due to an access limit at the time of retrieval; therefore, no quantitative comparison vs. consensus is provided [attempted via S&P Global GetEstimates; daily limit exceeded].

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated profitability/cash flow	FY 2025	None disclosed	Management “anticipate[s]… improved profitability and cashflow in fiscal 2025” driven by demand, reduced overhead, improved liquidity, and lower interest expense	Qualitative positive
Modular Buildings demand	FY 2025	None disclosed	“Positive momentum… we believe we can sustain”	Qualitative positive
Agricultural Products demand	Early FY 2025	None disclosed	“Positive indications in the dairy and livestock markets that could drive demand”	Qualitative positive

Note: No numeric ranges (revenue/margin/tax/OpEx) were provided in the filings reviewed .

Earnings Call Themes & Trends

Note: No Q4 FY2024 call transcript was found in the filings reviewed; themes are based on management commentary in press releases.

Topic	Previous Mentions (Q2 FY24, Q3 FY24)	Current Period (Q4 FY24)	Trend
Ag market/crop prices/interest rates	Q2: Lower corn/soy/wheat prices, high rates weighing on orders; dealer inventory elevated . Q3: Similar commentary; USDA revised net farm income down; focus on cost cutting .	Conditions remained difficult; early order demand stagnant; noting better-than-expected grinder mixer demand recently .	Headwinds persist; selective product strength emerging
Modular Buildings demand/backlog	Q2: Backlog up 112% YoY; two large research projects . Q3: Revenue/profitability up; strong finish expected .	FY24 sales +25.9% YoY; gross margin 32.1% on strong execution; leads expected to convert in 2025 .	Strengthening execution; sustaining momentum
Cost reductions/liquidity/debt	Q2: Cost cuts (layoffs, workshare) and inventory reduction focus . Q3: Inventory reduction, debt retirement key; rate pressure on earnings .	Overhead reduced; improved liquidity; debt at historical low; expecting improved profitability/cash flow in FY25 .	Improving balance sheet and cost structure
Leadership	—	CEO transition in October; Chairman Marc McConnell appointed CEO .	New leadership in place
Backlog levels	Q2: Consolidated backlog $11.416M (Apr 3, 2024) .	Ag backlog $3.486M vs $4.364M YoY; Modular $2.393M vs $6.170M YoY; expecting conversion of Modular leads .	Backlog normalized vs prior-year peak; pipeline remains active in Modular

Management Commentary

“Fiscal 2024 was a year of considerable challenges and transition… we benefited greatly from the tremendous growth and operational performance in our Modular Buildings segment… we are confident these measures position the company for improving markets in the future and are pleased to report that our current debt level represents a historical low” — Marc McConnell, Chairman, President & CEO .
“On a consolidated basis we anticipate that solid demand, reduced overhead expenses, improved liquidity and reduced interest expense from debt reduction will result in improved profitability and cashflow in fiscal 2025” — Marc McConnell .
Ag context: commodity prices below five-year averages and dealer lot saturation pressured sales; cost reductions on high-volume products targeted to bear fruit in FY2025 .
Modular execution: workforce under budget on production disciplines; better efficiency on research projects and strong project management translated into “some of the best results we have seen” in the segment .

Q&A Highlights

No earnings call transcript or Q&A was available in the company filings reviewed for Q4 FY2024; no specific analyst Q&A disclosures were identified in the documents examined .

Estimates Context

Wall Street consensus (S&P Global) for Q4 FY2024 EPS/Revenue was unavailable at time of retrieval due to an S&P Global daily limit; as such, we cannot quantify beats/misses vs consensus for the quarter [attempted via S&P Global GetEstimates; daily limit exceeded].
Given the absence of estimates, we anchor analysis to reported results and intra-year trajectory (Q1–Q3 releases and FY update) .

Key Takeaways for Investors

Modular Buildings is the profit engine: sales +25.9% YoY and gross margin 32.1% in FY24; management expects momentum to sustain into FY2025 as engineering-phase leads convert .
Ag headwinds likely persist near term, but mgmt cites improving indicators in dairy/livestock; grinder mixer demand was “better than expected” into early FY2025 .
Cost and balance sheet discipline are tangible: reduced overhead, improved liquidity, and debt at a historical low should lower interest burden and support FY2025 profit/cash flow recovery .
Implied Q4 improvement: derived Q4 sales (~~$6.170M) and operating income (~~$0.519M) point to a stronger close versus earlier quarters as Modular contribution rose and cost actions took hold .
Leadership transition complete with Chairman McConnell as CEO; strategic focus on innovation, cost efficiency, and customer experience continues, with Modular strength bridging the Ag cycle .
Backlog normalized vs prior-year highs (Modular, Ag), but pipeline remains active in research projects; conversion is key to sustaining FY2025 revenue .
Without consensus estimates, trading set-ups hinge on forward commentary and order conversion cadence in Modular, plus signs of stabilization in Ag early-order programs .

ARTS WAY MANUFACTURING CO INC (ARTW)·Q4 2024 Earnings Summary