Art's Way Manufacturing Co., a diversified manufacturer and distributor of equipment serving agricultural and research needs, announces its financial results for the third quarter of fiscal 2024 and nine months ended August 31, 2024. The Company also reports that it has reached a mutual separation agreement with President and CEO David King effective October 1, 2024.
Sales: Our consolidated corporate sales from continuing operations for the three- and nine-month periods ended August 31, 2024 were $5,876,000 and $18,329,000 compared to $8,117,000 and $23,429,000 during the same respective periods in fiscal 2023, a $2,241,000, or 27.6%, decrease for the three months and a decrease of $5,100,000, or 21.8% decrease for the nine months.
Our third quarter sales in our Agricultural Products segment were $2,988,000 compared to $5,530,000 during the same period of fiscal 2023, a decrease of $2,542,000, or 46.0%. For the nine months ended August 31, 2024, our sales were $11,779,000 compared to $17,343,000, a decrease of $5,564,000, or 32.1% for the same period of 2023. In February of 2024, the US Department of Agriculture reported a 25% expected decline in farm income levels for 2024 due to weaker row crop prices and expected increases in production expenses. Our sales year to date have fallen in line with the USDA's early sentiments on projected farm income.
In September 2024, the USDA revised their projection to an expected 9.6% decrease in net farm income. This number is propped up by large feedlot operations where livestock prices remain above the five-year average and in general animal/animal product cash receipts are expected to be up 7.1% from 2023.
Incoming whole good orders remained slow in the third quarter of fiscal 2024 as row crop prices including corn, soybeans and wheat were down 18-24% from the five-year average. Sugar prices remain around 8% above the five-year average as of this report, but the overall agriculture economy sentiment is negative.
High interest rates continue to put pressure on farmer's bottom lines and are prohibitive to equipment financing arrangements and floorplan programs. We enacted initial cost cutting measures in the first quarter of fiscal 2024 to partially mitigate the effect on cash flow from decreased sales, including layoffs of non-production employees and offering early retirement incentives to employees at retirement age.
We also entered the Iowa Work Force Development's voluntary workshare program in April 2024, which eliminates the need for additional production layoffs by allowing us to cut employee's hours while employees receive unemployment benefits for lost hours. We remain focused on trimming operating expenses and reducing overall inventory while remaining efficient in our production process.
From a sales standpoint, we continue to work with dealers to help move field inventory to generate more sales opportunities for our products. We are targeting new dealer acquisitions to penetrate geographic markets in which we lack a substantial presence.
Our third quarter sales in our Modular Buildings segment were $2,888,000 compared to $2,587,000 for the same period in fiscal 2023, an increase of $301,000, or 11.6%. For the nine months ended August 31, 2024 our sales were $6,550,000 compared to $6,086,000 for the same period of fiscal 2023, an increase of $464,000, or 7.6%.
Two large research projects are driving the sales increase for the three- and nine- month periods. We expect a strong finish to fiscal 2024 as we close out one of the two large research products in the fourth quarter.
Net Income (Loss): Consolidated net income from continuing operations was $2,000 for the three-month period ended August 31, 2024, compared to net income of $241,000 for the same period in fiscal 2023. For the nine months ended August 31, 2024, our consolidated net loss was $427,000 compared to net income of $921,000 for the same period of fiscal 2023. While we had positive operating income from continuing operations for the second straight fiscal quarter, high interest rates have put a strain on our bottom line in fiscal 2024.
We expect it may be another twelve months before we see some sales stabilization in the Agricultural Products segment due to ongoing market conditions. Inventory reduction, debt retirement and cost cutting to maximize cash flow will be key over the next 18 months to weather the current conditions.
The Modular Buildings segment recorded revenue increases and profitability for both the three and nine months ended August 31, 2024. We anticipate continued positive performance from this segment for the remainder of fiscal 2024 as we close out current backlog.
Income: Loss per basic and diluted share for the third quarter of fiscal 2024 was $0.00, compared to income per basic and diluted share of $0.05 for the same period in fiscal 2023. Loss per basic and diluted share for the first nine months of fiscal 2024 was $0.08, compared to income per basic and diluted share of $0.18 for the same period in fiscal 2023.
CEO Transition: Effective October 1, 2024 the Company reached a mutual separation agreement with President and CEO David King. Current Chairman of the Board Marc McConnell will serve as President and Chief Executive Officer moving forward and the Company will realize a net overhead reduction. Marc has served on Art's Way's Board of Directors since 2001, served as Vice Chairman from January 2008 to April 2015 and has since served as Art's Way's Chairman of the Board.
Marc's experience in the farm equipment manufacturing and finance industries, longevity on the Company's Board, and passion for the Company, its employees, and dealers alike make Marc well suited to step in to guide the Company moving forward.
"We at Art's Way have great appreciation for David King's years of leadership and positive impact on the Company." said Chairman Marc McConnell. "His vision and work to rebrand and reposition Art's Way in the marketplace made a large impact on the Company and is an imprint that will remain for years to come.
His guidance through COVID, the supply chain crisis, and severe swings in the agricultural equipment market was vital and effective. We wish David only the best with new opportunities in the future and sincerely thank him for his service to the Company, its employees, dealers, and shareholders."
"Moving forward I look forward to leading the Company, realizing that we find ourselves facing challenging market conditions in agriculture," said McConnell. "We will continue to prioritize innovation, quality, and customer service as we seek to further build our brand and standing in the marketplace while also managing costs very closely as we work through the current market cycle.
We are pleased to be aided in great part by the growth and profitability in our Modular Buildings segment where we have benefited from great leadership and growing market opportunities in recent times that we expect to continue. Overall, there remains a great deal of opportunity for the Company and its shareholders long-term."
