Art's-Way Manufacturing Co. Inc. (NASDAQ:ARTW) Q2 2018 Earnings Conference Call - Final Transcript
Jul 12, 2018 • 11:00 am ET
Good morning, ladies and gentlemen. Today is July 12th, and welcome to the Art's Way Manufacturing Second Quarter Call. At this time, all participants are in a listen-only mode. (Operator Instructions)
Your call leaders for today's call are Marc McConnell, Chairman of the Board of Directors of Art's Way Manufacturing; Carrie Gunnerson, CEO and President and Interim CFO of Art's Way Manufacturing.
I'll now turn the call over to Ms. Gunnerson. You may begin.
(Forward-Looking Cautionary Statements)
Marc, with that, I'll hand it over to you.
Well, thank you all for joining us for the call. Obviously, if you're calling in and if you've read the results for the quarter and there's a mixed bag there in terms of some improvement in market and our revenues going up and that being good and we also continue to have some challenges to profitability that are related to current challenges as well as some carryover from earlier times and we'll be talking about that good deal and talking a lot about what we're doing internally and that we can control and a lot of the external factors that are challenging our industry right now. So we'll be going through all that.
At this point, I'll have Carrie go through the numbers.
I'm going to start with our consolidated information. Our consolidated revenues for the quarter were 5,294,000 compared to 4,689,000 in the prior year, an increase of 605 or 13% -- 605,000. Our year-to-date revenues as of 5/31 were 10,660,000 compared to 9,111,000 in the prior year, an increase of 1,549,000 or 17%. There -- right now there is really a lot of noise and uncertainty in really all of our industries and all of our segments in relation to the steel tariff and how that is also affecting the commodity prices.
We have seen significant increases in the imports across all of our business segments. We have in turn raised our prices. However, with Scientific and Ohio Metals, those price increases really kind of take effect much quicker. For Armstrong, we have a much larger backlog and so it takes a little bit for those price increases really to hit our income statement. We do still have our West Union facility listed for sale. We haven't had any movement on that this quarter. It is listed for $1.5 million.
We continue working aggressively to bring down our inventory levels in order to unlock the cash value, but also to simplify our business and our product offerings. As of May 31st, our consolidated gross inventory was 13,385,000, that is a reduction of $1,201,000 or 8% compared to our November 2017 number. The second quarter usually does mark the highest inventory levels for us for the year. So we would anticipate an additional drop by the end of the third quarter when we move out our beet harvesting equipment.
We have had two unusual events in 2018 that have negatively impacted our financial statements. The first is the revaluing of our deferred