Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Nov. 30, 2014 | Jan. 19, 2015 | 31-May-14 | |
Entity Registrant Name | ARTS WAY MANUFACTURING CO INC | ||
Entity Central Index Key | 7623 | ||
Current Fiscal Year End Date | -19 | ||
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) | 4,048,552 | ||
Entity Public Float | $12,759,986 | ||
Document Type | 10-K | ||
Document Period End Date | 30-Nov-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | FALSE |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Nov. 30, 2014 | Nov. 30, 2013 |
Current assets: | ||
Cash | $511,716 | $207,950 |
Accounts receivable-customers, net of allowance for doubtful accounts of $35,175 and $35,474 as of November 30 | 2,961,834 | 2,999,903 |
Inventories, net | 15,089,280 | 14,922,525 |
Deferred taxes | 1,259,943 | 1,228,097 |
Cost and Profit in Excess of Billings | 17,543 | 42,238 |
Income taxes receivable | 100,417 | 108,513 |
Other current assets | 125,229 | 242,146 |
Total current assets | 20,065,961 | 19,751,372 |
Property, plant, and equipment, net | 11,680,792 | 11,900,202 |
Assets held for lease, net | 58,500 | 122,318 |
Goodwill | 993,729 | 993,729 |
Other Assets | 47,360 | |
Total assets | 32,846,342 | 32,767,621 |
Current liabilities: | ||
Line of credit | 2,569,106 | 3,350,000 |
Current portion of term debt | 1,283,897 | 1,228,964 |
Accounts payable | 874,653 | 806,207 |
Customer Deposits | 95,411 | 147,505 |
Billings in Excess of Cost and Profit | 96,382 | 17,721 |
Accrued expenses | 1,584,328 | 1,718,475 |
Total current liabilities | 6,503,777 | 7,268,872 |
Long-term liabilities | ||
Deferred taxes | 1,141,580 | 952,645 |
Long Term debt, excluding current portion | 5,949,329 | 6,251,959 |
Total liabilities | 13,594,686 | 14,473,476 |
Commitments and Contingencies (Notes 7, 8, and 14) | ||
Stockholders’ equity: | ||
Undesignated preferred stock - $0.01 par value. Authorized 500,000 shares in 2014 and 2013; issued and outstanding 0 shares in 2014 and 2013. | 0 | 0 |
Common stock – $0.01 par value. Authorized 9,500,000 shares in 2014 and 2013; issued and outstanding 4,048,552 in 2014 and 4,046,552 in 2013 | 40,486 | 40,466 |
Additional paid-in capital | 2,638,651 | 2,616,407 |
Retained earnings | 16,572,519 | 15,637,272 |
Total stockholders’ equity | 19,251,656 | 18,294,145 |
Total liabilities and stockholders’ equity | $32,846,342 | $32,767,621 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parentheticals) (USD $) | Nov. 30, 2014 | Nov. 30, 2013 |
Allowance for doubtful accounts | $35,175 | $35,474 |
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) | 4,048,552 | 4,046,552 |
Common stock – outstanding shares (in shares) | 4,048,552 | 4,046,552 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Sales | $36,169,811 | $34,226,553 |
Cost of goods sold | 27,445,242 | 25,860,107 |
Gross profit | 8,724,569 | 8,366,446 |
Expenses: | ||
Engineering | 482,057 | 514,086 |
Selling | 2,372,299 | 2,155,640 |
General and administrative | 4,205,375 | 3,879,580 |
Total expenses | 7,059,731 | 6,549,306 |
Income from operations | 1,664,838 | 1,817,140 |
Other income (expense): | ||
Interest expense | -351,899 | -296,640 |
Other | -10,434 | 685,344 |
Total other income (expense) | -362,333 | 388,704 |
Income before income taxes | 1,302,505 | 2,205,844 |
Income tax expense | 367,258 | 654,468 |
Net income | $935,247 | $1,551,376 |
Net income per share: | ||
Basic net income per share (in dollars per share) | $0.23 | $0.38 |
Diluted net income per share (in dollars per share) | $0.23 | $0.38 |
Weighted average outstanding shares used to compute basic net income per share (in shares) | 4,047,796 | 4,039,530 |
Weighted average outstanding shares used to compute diluted net income per share (in shares) | 4,052,703 | 4,049,791 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Cash flows from operations: | ||
Net income | $935,247 | $1,551,376 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Stock based compensation | 14,504 | 29,812 |
(Gain) on disposal of property, plant, and equipment | 6,268 | 601,678 |
Depreciation expense | 906,702 | 704,457 |
Bad debt expense (recovery) | 4,540 | 7,516 |
Deferred income taxes | -157,089 | 111,138 |
Changes in assets and liabilities net of Agro Trend and Ohio Working Metals acquisitions: | ||
Accounts receivable | 33,529 | -229,412 |
Inventories | -166,755 | 769,641 |
Income taxes receivable | 8,096 | -108,513 |
Other assets | 69,559 | 67,652 |
Accounts payable | 68,447 | 151,885 |
Contracts in progress, net | 103,356 | -1,048,125 |
Customer deposits | -52,094 | -84,795 |
Income taxes payable | -821,301 | |
Accrued expenses | -134,147 | -279,721 |
Net cash provided by (used in) operating activities | 1,941,805 | -2,344 |
Cash flows from investing activities: | ||
Purchases of property, plant, and equipment | -633,078 | -842,124 |
Return of asset held for lease | 146,902 | |
Proceeds from sale of assets | 15,870 | 835,534 |
Net cash (used in) investing activities | -617,208 | -3,342,839 |
Cash flows from financing activities: | ||
Net change in line of credit | -780,894 | 3,350,000 |
Proceeds from term debt | 1,000,000 | 228,339 |
Repayment of term debt | -1,247,697 | -1,213,550 |
Proceeds from the exercise of stock options | 7,760 | 46,390 |
Dividends paid to stockholders | -404,655 | |
Net cash provided by (used in) financing activities | -1,020,831 | 2,006,524 |
Net increase/(decrease) in cash | 303,766 | -1,338,659 |
Cash at beginning of period | 207,950 | 1,546,609 |
Cash at end of period | 511,716 | 207,950 |
Supplemental disclosures of cash flow information: | ||
Interest | 356,470 | 296,640 |
Income taxes | 299,988 | 1,644,520 |
Argo Trend [Member] | ||
Cash flows from investing activities: | ||
Purchase of assets | -311,346 | |
Supplemental disclosures of cash flow information: | ||
Inventories | 223,172 | |
Equipment, tools and dies | 88,174 | |
Cash paid | 311,346 | |
Ohio Metal Working Products Company [Member] | ||
Cash flows from investing activities: | ||
Purchase of assets | -3,171,805 | |
Supplemental disclosures of cash flow information: | ||
Inventories | 1,141,512 | |
Equipment, tools and dies | 868,250 | |
Cash paid | 3,171,805 | |
Business Combination Recognized Identifiable Assets Acquired and Liabilities Assumed Land and Building | 1,200,000 | |
Non-Cash Activity: Assumed vacation liability | ($37,957) |
Note_1_Summary_of_Significant_
Note 1 - Summary of Significant Account Policies | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Significant Accounting Policies [Text Block] | (1) | ||||||||
Summary of Significant Accounting Policies | |||||||||
(a) Nature of Business | |||||||||
Art’s-Way Manufacturing Co., Inc. is primarily engaged in the fabrication and sale of specialized farm machinery in the agricultural sector of the United States. Primary product offerings include: portable and stationary animal feed processing equipment; hay and forage equipment; sugar beet harvesting equipment; land maintenance equipment; a line of portable grain augers; a line of manure spreaders; moldboard plows and a line of reels. The Company sells its labeled products through independent farm equipment dealers throughout the United States. In addition, the Company manufactures and supplies hay blowers to OEMs. The Company also provides after-market service parts that are available to keep its branded and OEM produced equipment operating to the satisfaction of the end user of the Company’s products. | |||||||||
On June 25, 2013, the Company acquired the fixed assets, raw material inventory, work-in-progress inventory and select finished goods inventory of Agro Trend, a division of Rojac Industries, Inc. of Clifford, Ontario, Canada. Agro Trend distributes agricultural equipment and manufactures commercial snow blowers and agricultural trailers. Most of the existing Agro Trend operational team was retained to continue the manufacture of snow blowers and trailers. The acquired assets and operations are reported with our agricultural products segment. For financial information related to the acquisition, see Note 12, “Acquisitions”. | |||||||||
Our Pressurized Vessels segment is primarily engaged in the fabrication and sale of pressurized vessels and tanks through the Company’s wholly-owned subsidiary, Art’s-Way Vessels, Inc. This segment provides a combination of services as a manufacturer and supplier of steel vessels and steel containment systems. The vessels are primarily sold to manufacturing facilities that will use the vessel as a component part of their end product. In addition to its role as a fabricator of vessels, it provides services including: custom CAD drawing; welding; interior linings and exterior finishing; passivation of stainless steel; hydrostatic and pneumatic testing; design, build and finishing of skids; installation of piping; non-destructive examination and heat treating. | |||||||||
Our Modular Buildings segment is primarily engaged in the construction of modular laboratories and animal housing facilities through the Company’s wholly-owned subsidiary, Art’s-Way Scientific, Inc. Buildings commonly produced range from basic swine buildings to complex containment research laboratories. This segment also provides services relating to the design, manufacturing, delivering, installation and renting of the building units that it produces. | |||||||||
On September 30, 2013, the Company acquired the assets of Ohio Metal Working Products Company (“Ohio Metals”) in Canton, Ohio consisting of inventory, equipment, land, and building. Ohio Metal is a domestic manufacturer and distributor of standard single point brazed carbide tipped tools as well as PCD (polycrystalline diamond) and CBN (cubic boron nitride) inserts and tools. The existing Ohio Metal operational team was retained to continue the manufacturing of the carbide, PCD, and CBN tipped tools and inserts. The acquired assets and operations are reported in our Tools segment for financial reporting purposes. For financial information related to the acquisition, see Note 12, “Acquisitions”. | |||||||||
(b) Principles of Consolidation | |||||||||
The consolidated financial statements include the accounts of Art’s-Way Manufacturing Co., Inc. and its wholly-owned subsidiaries, Universal Harvester by Art’s-Way, Inc., Art’s-Way Vessels, Inc., Art’s-Way Scientific, Inc., Art’s-Way Manufacturing International LTD, and Ohio Metal Working Products/Art’s-Way, Inc. Universal Harvester by Art’s-Way was formed in 2012 in connection with the Company’s acquisition of certain assets of UHC. Art’s-Way Manufacturing International LTD was formed in June 2013 when the Company acquired certain assets of Agro Trend while Ohio Metal Working Products/Art’s-Way, Inc. was formed in September 2013 when the Company acquired certain assets of Ohio Metal. All material inter-company accounts and transactions are eliminated in consolidation. | |||||||||
The financial books of International 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 Company monitors the resulting cumulative translation adjustment and considers it to be immaterial. | |||||||||
(c) Cash Concentration | |||||||||
The Company maintains several different accounts at four different banks, and balances in these accounts are periodically in excess of federally insured limits. However, management believes the risk of loss to be low. | |||||||||
(d) | |||||||||
Customer Concentration | |||||||||
During the years ended November 30, 2014, and November 30, 2013 no one customer accounted for more than 7% and 6% of consolidated revenues, respectively. | |||||||||
(e) Accounts Receivable | |||||||||
Accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Accounts receivable are written-off when deemed uncollectible. Recoveries of accounts receivable previously written-off are recorded when received. Accounts receivable are generally considered past due 60 days past invoice date, with the exception of international sales which primarily are sold with a letter of credit for 180 day terms. | |||||||||
Trade receivables due from customers are uncollateralized customer obligations due under normal trade terms requiring payment within 30 days from the invoice date. Trade receivables are stated at the amount billed to the customer. The Company charges interest on overdue customer account balances at a rate of 1.5% per month. Payments of trade receivables are allocated to the specific invoices identified on the customer's remittance advice or, if unspecified, are applied to the earliest unpaid invoices. | |||||||||
(f) Inventories | |||||||||
Inventories are stated at the lower of cost or market, and cost is determined using the standard costing method. Management monitors the carrying value of inventories using inventory control and review processes that include, but are not limited to, sales forecast review, inventory status reports, and inventory reduction programs. The Company records inventory write downs to market based on expected usage information for raw materials and historical selling trends for finished goods. Additional write downs may be necessary if the assumptions made by management do not occur. | |||||||||
(g) | |||||||||
Property, Plant, and Equipment | |||||||||
Property, plant, and equipment are recorded at cost. Depreciation of plant and equipment is provided using the straight-line method, based on the estimated useful lives of the assets which range from three to forty years. | |||||||||
(h) | |||||||||
Lessor Accounting | |||||||||
Modular buildings held for short term lease by our Modular Buildings segment are recorded at cost. Amortization of the property is calculated over the useful life of the building. Estimated useful life is five years. Lease revenue is accounted for on a straight-line basis over the term of the related lease agreement. | |||||||||
(i) | |||||||||
Goodwill and Impairment | |||||||||
Goodwill represents costs in excess of the fair value of net tangible and identifiable net intangible assets acquired in business combinations. Art’s-Way performs an annual test for impairment of goodwill during the fourth quarter. There was no impairment of goodwill as of November 30, 2014 and 2013. | |||||||||
(j) | |||||||||
Income Taxes | |||||||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating losses. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates as recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is entirely dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. | |||||||||
The Company shall classify interest and penalties to be paid on an underpayment of taxes as income tax expense. The Company files income tax returns in the U.S. federal jurisdiction and various states and Canada. The company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years ended before November 30, 2010. | |||||||||
(k) | |||||||||
Revenue Recognition | |||||||||
Revenue is recognized when risk of ownership and title pass to the buyer, generally upon the shipment of the product. All sales are made to authorized dealers whose application for dealer status has been approved and who have been informed of general sales policies. Any changes in Company terms are documented in the most recently published price lists. Pricing is fixed and determinable according to the Company’s published equipment and parts price lists. Title to all equipment and parts sold shall pass to the Buyer upon delivery to the carrier and is not subject to a customer acceptance provision. Proof of the passing of title is documented by the signing of the delivery receipt by a representative of the carrier. Post shipment obligations are limited to any claim with respect to the condition of the equipment or parts. Applicable sales taxes imposed on our revenues are presented on a net basis on the consolidated statements of operations and therefore do not impact net revenues or cost of goods sold. A provision for warranty expenses, based on sales volume, is included in the financial statements. The Company’s return policy allows for new and saleable parts to be returned, subject to inspection and a restocking charge which is included in net sales. Whole goods are not returnable. Shipping costs charged to customers are included in net sales. Freight costs incurred are included in cost of goods sold. | |||||||||
In certain circumstances, upon the customer’s written request, we may recognize revenue when production is complete and the good is ready for shipment. At the buyer’s request, we will bill the buyer upon completing all performance obligations, but before shipment. The buyer dictates that we ship the goods per their direction from our manufacturing facility, as is customary with this type of agreement, in order to minimize shipping costs. The written agreement with the customer specifies that the goods will be delivered on a schedule to be determined by the customer, with a final specified delivery date, and that we will segregate the goods from our inventory, such that they are not available to fill other orders. This agreement also specifies that the buyer is required to purchase all goods manufactured under this agreement. Title of the goods will pass to the buyer when the goods are complete and ready for shipment, per the customer agreement. At the transfer of title, all risks of ownership have passed to the buyer, and the buyer agrees to maintain insurance on the manufactured items that have not yet been shipped. The Company has operated using bill and hold agreements with certain customers for many years. The credit terms on this agreement are consistent with the credit terms on all other sales. All risks of loss are shouldered by the buyer, and there are no exceptions to the buyer’s commitment to accept and pay for these manufactured goods. Revenues recognized at the completion of production | |||||||||
in 2014 and 2013 were approximately $628,000 and $788,000, respectively. | |||||||||
During fiscal 2014, the Company recognized revenues of $59,000 for transactions with related parties. | |||||||||
Our Modular Buildings segment is in the construction industry, and as such accounts for long-term contracts on the percentage of completion method. Revenue and gross profit are recognized as work is performed based on the relationship between actual costs incurred and total estimated costs at completion. Contract losses are recognized when current estimates of total contract revenue and contract cost indicate a loss. Estimated contract costs include any and all costs appropriately allocable to the contract. The provision for these contract losses will be the excess of estimated contract costs over estimated contract revenues. | |||||||||
Costs and profit in excess of amounts billed are classified as current assets and billings in excess of cost and profit are classified as current liabilities. | |||||||||
(l) | |||||||||
Research and Development | |||||||||
Research and development costs are expensed when incurred. Such costs approximated $191,000 and $174,000 for the years ended November 30, 2014 and 2013, respectively. | |||||||||
(m | |||||||||
) | |||||||||
Advertising | |||||||||
Advertising costs are expensed when incurred. Such costs approximated $511,000 and $479,000 for the years ended November 30, 2014 and 2013, respectively. | |||||||||
(n) Income Per Share | |||||||||
Basic net income per common share has been computed on the basis of the weighted average number of common shares outstanding. Diluted net income 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. | |||||||||
Basic and diluted earnings per common share have been computed based on the following as of November 30, 2014 and 2013: | |||||||||
For the twelve months ended | |||||||||
30-Nov-14 | 30-Nov-13 | ||||||||
Basic: | |||||||||
Numerator: net income | $ | 935,247 | $ | 1,551,376 | |||||
Denominator: average number of common shares outstanding | 4,047,796 | 4,039,530 | |||||||
Basic earnings per common share | $ | 0.23 | $ | 0.38 | |||||
Diluted: | |||||||||
Numerator: net income | $ | 935,247 | $ | 1,551,376 | |||||
Average number of common shares outstanding | 4,047,796 | 4,039,530 | |||||||
Effect of dilutive stock options | 4,907 | 10,261 | |||||||
Denominator: dilutive average number of common shares outstanding | 4,052,703 | 4,049,791 | |||||||
Diluted earnings per common share | $ | 0.23 | $ | 0.38 | |||||
(o) Stock Based Compensation | |||||||||
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. Restricted stock is valued at market value at the day of grant. | |||||||||
(p) | |||||||||
Use of Estimates | |||||||||
Management of the Company has made a number of estimates and assumptions related to the reported amount of assets and liabilities, reported amount of revenues and expenses, and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. | |||||||||
(q) | |||||||||
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 will be the fiscal year beginning December 1, 2014. The Company currently has no unrecognized tax benefits that are impacted by the amendment and the Company does not expect this standard to have 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 | |||||||||
. The guidance provides a definition of the term substantial doubt, requires an evaluation every reporting period including interim periods, provides principles for considering the mitigating effect of management’s plans, requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, requires an express statement and other disclosures when substantial doubt is not alleviated, and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). ASU No. 2015-15 is effective for annual reporting periods ending after December 15, 2016. The Company will adopt this guidance for the year-ended November 30, 2017, and it will apply to each interim and annual period thereafter. Its adoption is not expected to have a material effect on the Company's consolidated financial statements. | |||||||||
( | |||||||||
q) | |||||||||
Fair Value Measurements | |||||||||
The accounting framework for determining fair value includes a hierarchy for ranking the quality and reliability of the information used to measure fair value, which enables the reader of the financial statements to assess the inputs used to develop those measurements. The fair value hierarchy consists of three tiers as follows: Level 1, defined as quoted market prices in active markets for identical securities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly; and Level 3, defined as unobservable inputs that are not corroborated by market data. |
Note_2_Allowance_for_Doubtful_
Note 2 - Allowance for Doubtful Accounts | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Allowance for Credit Losses [Text Block] | (2) | ||||||||
Allowance for Doubtful Accounts | |||||||||
A summary of the Company’s activity in the allowance for doubtful accounts is as follows: | |||||||||
For the 12 months ended | |||||||||
30-Nov-14 | 30-Nov-13 | ||||||||
Balance, beginning | $ | 35,474 | $ | 27,958 | |||||
Provision charged to expense | 4,540 | 7,516 | |||||||
Less amounts charged-off | (4,839 | ) | - | ||||||
Balance, ending | $ | 35,175 | $ | 35,474 |
Note_3_Inventory
Note 3 - Inventory | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Inventory Disclosure [Text Block] | (3) | ||||||||
Inventories | |||||||||
Major classes of inventory are: | |||||||||
30-Nov-14 | 30-Nov-13 | ||||||||
Raw materials | $ | 10,037,055 | $ | 10,322,014 | |||||
Work in process | 467,110 | 511,016 | |||||||
Finished goods | 8,504,062 | 7,305,301 | |||||||
$ | 19,008,227 | 18,138,331 | |||||||
Less: Reserves | (3,918,947 | ) | (3,215,806 | ) | |||||
$ | 15,089,280 | $ | 14,922,525 |
Note_4_Contracts_in_Progress
Note 4 - Contracts in Progress | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Long-term Contracts or Programs Disclosure [Text Block] | (4) | ||||||||
Contracts in Progress | |||||||||
Amounts included in the consolidated financial statements related to uncompleted contracts are as follows: | |||||||||
The amounts billed on these long term contracts are due 30 days from invoice date. All amounts billed are expected to be collected within the next 12 months. Retainage was $8,048 and $0 as of November 30, 2014 and 2013, respectively. | |||||||||
Cost and Profit in | Billings in Excess of | ||||||||
Excess of Billings | Costs and Profit | ||||||||
30-Nov-14 | |||||||||
Costs | $ | 14,724 | $ | 623,670 | |||||
Estimated earnings | 4,819 | 204,114 | |||||||
19,543 | 827,784 | ||||||||
Less: amounts billed | (2,000 | ) | (924,166 | ) | |||||
$ | 17,543 | $ | (96,382 | ) | |||||
30-Nov-13 | |||||||||
Costs | $ | 326,560 | $ | 115,789 | |||||
Estimated earnings | 106,848 | 21,470 | |||||||
433,408 | 137,259 | ||||||||
Less: amounts billed | (391,170 | ) | (154,980 | ) | |||||
$ | 42,238 | $ | (17,721 | ) |
Note_5_Property_Plant_and_Equi
Note 5 - Property, Plant, and Equipment | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Property, Plant and Equipment Disclosure [Text Block] | (5) | ||||||||
Property, Plant, and Equipment | |||||||||
Major classes of property, plant, and equipment are: | |||||||||
30-Nov-14 | 30-Nov-13 | ||||||||
Land | $ | 1,188,155 | $ | 1,188,155 | |||||
Buildings and improvements | 10,542,327 | 10,315,222 | |||||||
Construction in Progress | 107,807 | 404,016 | |||||||
Manufacturing machinery and equipment | 14,097,934 | 13,555,073 | |||||||
Trucks and automobiles | 433,962 | 436,367 | |||||||
Furniture and fixtures | 149,022 | 149,022 | |||||||
26,519,207 | 26,047,855 | ||||||||
Less accumulated depreciation | (14,838,415 | ) | (14,147,653 | ) | |||||
Property, plant and equipment | $ | 11,680,792 | $ | 11,900,202 | |||||
Depreciation expense totaled $906,702 and $704,457 for the fiscal years ended November 30, 2014 and 2013, respectively. | |||||||||
Note_6_Accrued_Expenses
Note 6 - Accrued Expenses | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | (6) | ||||||||
Accrued Expenses | |||||||||
Major components of accrued expenses are: | |||||||||
30-Nov-14 | 30-Nov-13 | ||||||||
Salaries, wages, and commissions | $ | 673,934 | $ | 836,200 | |||||
Accrued warranty expense | 234,266 | 220,719 | |||||||
Other | 676,128 | 661,556 | |||||||
$ | 1,584,328 | $ | 1,718,475 |
Note_7_Product_Warranty
Note 7 - Product Warranty | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Product Warranty Disclosure [Text Block] | (7) | ||||||||
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 1 year from 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. | |||||||||
Changes in the Company’s product warranty liability included in “accrued expenses” for the years ended November 30, 2014 and 2013 are as follows: | |||||||||
30-Nov-14 | 30-Nov-13 | ||||||||
Balance, beginning | $ | 220,719 | $ | 578,864 | |||||
Settlements / adjustments | (421,787 | ) | (605,281 | ) | |||||
Warranties issued | 435,334 | 247,136 | |||||||
Balance, ending | $ | 234,266 | $ | 220,719 |
Note_8_Loan_and_Credit_Agreeme
Note 8 - Loan and Credit Agreements | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Debt Disclosure [Text Block] | ( | ||||||||
8 | |||||||||
) | |||||||||
Loan and Credit Agreements | |||||||||
On May 1, 2013, the Company began to move all banking arrangements previously held through West Bank to U.S. Bank. The relationship with U.S. Bank now includes an $8,000,000 revolving line of credit (the “Line of Credit”) which was renewed in 2014, and is now 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. 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%. As of November 30, 2014, the interest rate was the minimum of 3.50%. Monthly interest-only payments are required and the unpaid principal is due on the maturity date. As of November 30, 2014, the Company had a principal balance of $2,569,109 outstanding against the Line of Credit. 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 refinanced all outstanding West Bank term loans with U.S. Bank. The West Bank long-term debt, which had outstanding principal balances of $4,342,000 at a fixed interest rate of 4.75% and $1,749,000 at a fixed interest rate of 4.50%, was paid off with four U.S. Bank loans totaling $6,319,000 at a fixed interest rate of 2.98% (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. | |||||||||
As a result of paying off the West Bank loans, the Company incurred $130,000 worth of prepayment penalties which were financed by the U.S. Bank loans. The penalties were booked to fixed costs on the income statement for the quarter ended May 31, 2013. Closing costs amounted to $9,000 and will be amortized over the life of the loans. | |||||||||
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 building and property of Ohio Metal 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 in Canton, Ohio pursuant to a Mortgage, Security Agreement and Assignment of Rents between the Company and U.S. Bank, dated May 29, 2014. The Term Loan Agreements also require the Company to comply with a covenant to obtain consent from U.S. Bank prior to declaring a dividend payment. | |||||||||
Except for 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 Company was in compliance with all covenants under the Term Loan Agreements and the Revolving Credit Agreement as measured on November 30, 2014. The next measurement date is February 28, 2015. 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 and the Pledge Agreements entered into by the subsidiaries. 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 U.S. Bank can immediately terminate its obligation, if any, to make additional loans to the Company. In addition, U.S. Bank may collect any and all money 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. | |||||||||
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 UHC 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 UHC 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 June 1, 2009, Art’s-Way Scientific received funds from two $95,000 promissory notes in connection with an agreement signed August 7, 2007 between Art’s-Way Scientific and the Iowa Department of Economic Development. Art’s-Way Scientific paid off these loans at their respective maturities in June and July of 2014. | |||||||||
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 and an interest rate of 3.5%. On February 1, 2013, the interest rate was decreased to 2.75%. 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 1st), is governed by a Manufacturing Facility Revenue Note dated May 28, 2010 as amended February 1, 2013 and a Loan Agreement dated May 1, 2010 and a First Amendment to Loan Agreement dated February 1, 2013 (collectively, “the IFA Loan Agreement”), which requires the Company to provide quarterly internally prepared financial reports and year-end audited financial statements and to maintain a minimum debt service coverage ratio of 1.5 to 1.0, which is measured at November 30 of each year. Among other covenants, the IFA Loan Agreement also requires the Company to maintain proper insurance on, and maintain in good repair, the West Union Facility, and continue to conduct business and remain duly qualified to do business in the State of Iowa. The loan is secured by a mortgage on the Company’s West Union Facility, pursuant to a Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement dated May 1, 2010 between the Company and The First National Bank of West Union (the “West Union Mortgage”). | |||||||||
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: | |||||||||
30-Nov-14 | 30-Nov-13 | ||||||||
U.S. Bank loan payable in monthly installments of $42,500 including interest at 2.98%, due May 1, 2018 | $ | 1,662,311 | $ | 2,114,675 | |||||
U.S. Bank loan payable in monthly installments of $11,000 including interest at 2.98%, due May 1, 2018 | 850,930 | 955,507 | |||||||
U.S. Bank loan payable in monthly installments of $12,550 including interest at 2.98%, due May 1, 2018 | 965,889 | 1,085,350 | |||||||
U.S. Bank loan payable in monthly installments of $27,800 including interest at 2.98%, due May 1, 2018 | 1,407,366 | 1,693,752 | |||||||
U.S. Bank loan payable in monthly installments of $11,700 including interest at 3.15%, due May 10, 2017 | 588,101 | 707,719 | |||||||
U.S. Bank loan payable in monthly installments of $5,556 including interest at 2.98%, due May 25, 2017 | 980,940 | - | |||||||
Iowa Finance Authority loan payable in monthly installments of $12,500 including interest at 2.75%, due June 1, 2020 | 777,689 | 904,662 | |||||||
IDED loan payable in monthly installments of $2,437 including interest at 6%, due June 1, 2014 | - | 14,375 | |||||||
IDED loan payable in monthly installments of $813 including interest at 0%, due June 1, 2014 | - | 4,883 | |||||||
Total term debt | $ | 7,233,226 | $ | 7,480,923 | |||||
Less current portion of term debt | 1,283,897 | 1,228,964 | |||||||
Term debt, excluding current portion | $ | 5,949,329 | $ | 6,251,959 | |||||
A summary of the minimum maturities of term debt follows for the years ending November 30: | |||||||||
Year: | Amount | ||||||||
2015 | $ | 1,283,897 | |||||||
2016 | 1,322,663 | ||||||||
2017 | 2,433,936 | ||||||||
2018 | 1,959,763 | ||||||||
2019 | 145,941 | ||||||||
2020 and thereafter | 87,026 | ||||||||
$ | 7,233,226 |
Note_9_Employee_Benefit_Plans
Note 9 - Employee Benefit Plans | 12 Months Ended |
Nov. 30, 2014 | |
Notes to Financial Statements | |
Compensation and Employee Benefit Plans [Text Block] | (9) |
Employee Benefit Plans | |
The Company sponsors a defined contribution 401(k) savings plan which covers substantially all full-time employees who meet eligibility requirements. Participating employees may contribute as salary reductions any amount of their compensation up to the limit prescribed by the Internal Revenue Code. The Company makes a 25% matching contribution to employees contributing a minimum of 4% of their compensation, up to 1% of eligible compensation. The Company recognized an expense of $54,544 and $38,145 related to this plan during the years ended November 30, 2014 and 2013, respectively. |
Note_10_Equity_Incentive_Plan
Note 10 - Equity Incentive Plan | 12 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Notes to Financial Statements | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | (10) | ||||||||||||||||
Equity Incentive Plan | |||||||||||||||||
On November 30, 2014, the Company had one equity incentive plan, the 2011 Plan, which is described below. The compensation cost charged against income was $14,504 and $29,812 for 2014 and 2013, respectively. The total income tax deductions for share-based compensation arrangements were $7,260 and $17,210 for 2014 and 2013, respectively. No compensation cost was capitalized as part of inventory or fixed assets. | |||||||||||||||||
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”), subject to approval by the stockholders on or before January 27, 2012. 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. | |||||||||||||||||
The fair value of each option award is estimated on the date of grant using the Black Scholes option-pricing model. 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. | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Expected Volatility | 32.28% | 53.71 | % | ||||||||||||||
Expected Dividend Yield | 1.24% | - | 1.28% | 1.063 | % | ||||||||||||
Expected Term (in years) | 2 | 2 | |||||||||||||||
Risk-Free Rate | 3.25% | 3.25 | % | ||||||||||||||
Summary of activity under the plans as of November 30, 2014 and 2013, and changes during the years then ended as follows: | |||||||||||||||||
2014 Option Activity | |||||||||||||||||
Options | Shares | Weighted | Weighted | Aggregate Intrinsic | |||||||||||||
Average | Average | Value | |||||||||||||||
Exercise | Remaining | ||||||||||||||||
Price | Contractual | ||||||||||||||||
Term | |||||||||||||||||
Options Outstanding at beginning of period | 143,000 | $ | 9 | - | - | ||||||||||||
Granted | 19,000 | $ | 6.1 | - | - | ||||||||||||
Exercised | (2,000 | ) | $ | 3.88 | - | $ | 4,020 | ||||||||||
Options Expired or Forfeited | - | $ | - | - | - | ||||||||||||
Options Outstanding at end of Period | 160,000 | $ | 8.72 | 5.14 | $ | 15,400 | |||||||||||
Options Exercisable at end of Period | 155,000 | $ | 8.81 | 5.27 | $ | 15,400 | |||||||||||
2013 Option Activity | |||||||||||||||||
Options | Shares | Weighted | Weighted | Aggregate Intrinsic | |||||||||||||
Average | Average | Value | |||||||||||||||
Exercise | Remaining | ||||||||||||||||
Price | Contractual | ||||||||||||||||
Term | |||||||||||||||||
Options Outstanding at beginning of period | 163,000 | $ | 9.16 | - | - | ||||||||||||
Granted | 14,000 | $ | 6.4 | - | - | ||||||||||||
Exercised | (9,000 | ) | $ | 5.15 | - | $ | 13,970 | ||||||||||
Options Expired or Forfeited | (25,000 | ) | $ | 10.04 | - | - | |||||||||||
Options Outstanding at end of Period | 143,000 | $ | 9 | 5.71 | |||||||||||||
Options Exercisable at end of Period | 143,000 | $ | 9 | 5.71 | $ | 48,400 | |||||||||||
The weighted-average grant-date fair value of options granted during the year 2014 and 2013 was $1.17 and $2.64 respectively. | |||||||||||||||||
A summary of the status of the Company’s non-vested shares as of November 30, 2014, and changes during the year ended November 30, 2014, is presented below: | |||||||||||||||||
Non-vested Shares | Shares | Weighted-Average | |||||||||||||||
Grant-Date Fair Value | |||||||||||||||||
Non-vested at beginning of period | - | $ | 0 | ||||||||||||||
Granted | 19,000 | $ | 1.17 | ||||||||||||||
Vested | -14,000 | $ | 1.18 | ||||||||||||||
Forfeited | - | $ | 0 | ||||||||||||||
Non-vested at end of period | 5,000 | ||||||||||||||||
As of November 30, 2014, there was $3,881 unrecognized compensation cost related to non-vested share-based compensation arrangements under the plan. The total fair value of shares vested during the years ended November 30, 2014 and 2013 was $0 and $2,100 respectively. | |||||||||||||||||
The cash received from the exercise of options during fiscal year 2014 was $7,760, compared to $46,390 in 2013. | |||||||||||||||||
During the fiscal year 2014 the Company did not issue any restricted stock, and 500 shares of restricted stock became unrestricted. During fiscal year 2013 the Company issued 2,500 shares of restricted stock under the 2011 Plan. During fiscal year 2013, 1300 shares of restricted stock became unrestricted. Compensation expense of $3,240 and $8,554 was recognized in 2014 and 2013, respectively, for shares of restricted stock. | |||||||||||||||||
Note_11_Income_Taxes
Note 11 - Income Taxes | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes to Financial Statements | |||||||||
Income Tax Disclosure [Text Block] | (11) | ||||||||
Income Taxes | |||||||||
Total income tax expense (benefit) for the years ended November 30, 2014 and 2013 consists of the following: | |||||||||
30-Nov | |||||||||
2014 | 2013 | ||||||||
Current Expense | $ | 307,452 | $ | 765,606 | |||||
Deferred expense (benefit) | 59,806 | (111,138 | ) | ||||||
$ | 367,258 | $ | 654,468 | ||||||
The reconciliation of the statutory Federal income tax rate is as follows: | |||||||||
30-Nov | |||||||||
2014 | 2013 | ||||||||
Statutory federal income tax rate | 34 | % | 34 | % | |||||
R&D tax credits | (2.0 | ) | (1.0 | ) | |||||
Permanent Differences and Other | (3.8 | ) | (3.3 | ) | |||||
28.2 | % | 29.7 | % | ||||||
Tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) at November 30, 2014 and 2013 are presented below: | |||||||||
30-Nov | |||||||||
2014 | 2013 | ||||||||
Current deferred tax assets (liabilities): | |||||||||
Accrued expenses | $ | 147,000 | $ | 168,000 | |||||
Inventory capitalization | 22,000 | 24,000 | |||||||
Asset reserves | 1,091,000 | 1,036,000 | |||||||
Total current deferred tax assets | $ | 1,260,000 | $ | 1,228,000 | |||||
Non-current deferred tax assets | |||||||||
Property, plant, and equipment | $ | (1,142,000 | ) | $ | (953,000 | ) | |||
Total non-current deferred tax assets (liabilities) | $ | (1,142,000 | ) | $ | (953,000 | ) | |||
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. |
Note_12_Acquisitions
Note 12 - Acquisitions | 12 Months Ended |
Nov. 30, 2014 | |
Notes to Financial Statements | |
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | (12) |
Acquisitions | |
On June 25, 2013, the Company acquired the fixed assets, raw material inventory, work-in-process inventory, and select finished good inventory of Agro Trend, a division of Rojac Industries, Inc. of Clifford, Ontario, Canada. A new entity was formed, Art's Way Manufacturing International LTD, which is included in the agricultural products segment for financial reporting purposes. International will lease the facility in Clifford, Ontario and is continuing manufacturing, marketing and sales from the Canadian location. The amount paid in US dollars for the acquisition of assets totaled $311,000 ($88,000 in fixed assets and $223,000 in inventory). The amounts paid in the acquisition approximate fair value, which was determined utilizing the cost and, to a lesser extent, the market approach. This non-recurring fair value measurement is based Level 3 inputs of the fair value hierarchy, which are discussed in more detail in Note 13. Key assumptions used in determining the fair value include estimated replacement costs, physical deterioration, economic and functional obsolescence to adjust the current replacement costs as well as the estimated economic lives of the assets. The purchase price allocation has been reviewed and is final. The operating results of the acquired business are reflected in the Company’s consolidated statement of operations from the acquisition date forward. The acquisition was made to continue the Company’s growth strategy and diversify its product offerings inside the agricultural industry. | |
The acquisition also includes a consignment arrangement regarding $600,000 of select finished good inventory. As part of the arrangement, International agreed to use reasonable efforts to sell the inventory including providing a sales and marketing plan with projections within 60 days of the closing date and meeting with the consignor quarterly to discuss progress. On a monthly basis, International agreed to pay the consignor an amount equal to the cost base of the inventory sold that month. As of November 30, 2014, International had sold $393,000 of the consigned inventory. | |
The financial books of the International operations 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 International 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 Company monitors the resulting cumulative translation adjustment and considers it to be immaterial. | |
On September 30, 2013, the Company acquired the assets of Ohio Metal in Canton, Ohio consisting of inventory, equipment, real property, and intangible assets. A new entity was formed, Ohio Metal Working Products/Art’s-Way, Inc (“Metals”). A new segment called Tools was created for financial reporting purposes. Ohio Metal Working Products/Art’s-Way, Inc. is a domestic manufacturer and distributor of standard single point brazed carbide tipped tools as well as PCD (polycrystalline diamond) and CBN (cubic boron nitride) inserts and tools. The amount paid for the acquisition totaled approximately $3,172,000 ($1,142,000 in inventory, $1,200,000 in land and building, $868,000 in fixed assets, and a reduction for assumed vacation liability of $38,000). The amounts paid in the acquisition approximate fair value, which was determined utilizing the cost and, to a lesser extent, the market approach. This non-recurring fair value measurement is based Level 3 inputs of the fair value hierarchy, which are discussed in more detail in Note 13. Key assumptions used in determining the fair value include estimated replacement costs, physical deterioration, economic and functional obsolescence to adjust the current replacement costs as well as the estimated economic lives of the assets. The acquisition was financed by accessing the line of credit available through U.S. Bank, and on May 29, 2014 the Company obtained a mortgage for the property and buildings in the amount of $1,000,000 which was used to pay down on the line of credit. The operating results of the acquired business are reflected in the Company’s consolidated statements of operations from the acquisition date forward. The acquisition was made to continue the Company’s growth strategy and diversify its product offerings. | |
Note_13_Disclosures_About_the_
Note 13 - Disclosures About the Fair Value of Financial Instruments | 12 Months Ended |
Nov. 30, 2014 | |
Notes to Financial Statements | |
Fair Value Disclosures [Text Block] | (13) |
Disclosures About the Fair Value of Financial Instruments | |
At November 30, 2014 and 2013, the carrying amount approximates fair value for cash, accounts receivable, accounts payable, notes payable to bank, and other current liabilities due to the short maturity of these instruments. 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_14_Litigation_and_Conting
Note 14 - Litigation and Contingencies | 12 Months Ended |
Nov. 30, 2014 | |
Notes to Financial Statements | |
Legal Matters and Contingencies [Text Block] | (14) Litigation and Contingencies |
Various legal actions and claims that arise in the normal course of business are pending against the Company. In the opinion of management adequate provisions have been made in the accompanying financial statements for all pending legal actions and other claims. |
Note_15_Segment_Information
Note 15 - Segment Information | 12 Months Ended | ||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||
Segment Reporting Disclosure [Text Block] | (15) | ||||||||||||||||||||
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 replacement parts for these products in the United States and worldwide. The pressurized vessel segment produces and services pressurized tanks. The modular building segment produces 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. | |||||||||||||||||||||
Approximate financial information with respect to the reportable segments is as follows. | |||||||||||||||||||||
Twelve Months Ended November 30, 2014 | |||||||||||||||||||||
Agricultural | Pressurized | Modular | Tools | Consolidated | |||||||||||||||||
Products | Vessels | Buildings | |||||||||||||||||||
Revenue from external customers | $ | 27,952,000 | $ | 1,736,000 | $ | 2,965,000 | $ | 3,517,000 | $ | 36,170,000 | |||||||||||
Gross Profit | 7,150,000 | 39,000 | 626,000 | 910,000 | $ | 8,725,000 | |||||||||||||||
Operating Expense | 5,051,000 | 351,000 | 768,000 | 890,000 | $ | 7,060,000 | |||||||||||||||
Income (loss) from operations | 2,099,000 | (312,000 | ) | (142,000 | ) | 20,000 | $ | 1,665,000 | |||||||||||||
Income (loss) before tax | 1,842,000 | (341,000 | ) | (165,000 | ) | (33,000 | ) | $ | 1,303,000 | ||||||||||||
Total Assets | 24,587,000 | 2,548,000 | 2,503,000 | 3,210,000 | $ | 32,846,000 | |||||||||||||||
Capital expenditures | 581,000 | 27,000 | - | 25,000 | $ | 633,000 | |||||||||||||||
Depreciation & Amortization | 537,000 | 108,000 | 146,000 | 116,000 | $ | 907,000 | |||||||||||||||
Twelve Months Ended November 30, 2013 | |||||||||||||||||||||
Agricultural | Pressurized | Modular | Tools | Consolidated | |||||||||||||||||
Products | Vessels | Buildings | |||||||||||||||||||
Revenue from external customers | $ | 28,199,000 | $ | 2,137,000 | $ | 3,240,000 | $ | 651,000 | $ | 34,227,000 | |||||||||||
Gross Profit | 6,508,000 | 234,000 | 1,441,000 | 183,000 | $ | 8,366,000 | |||||||||||||||
Operating Expense | 5,275,000 | 360,000 | 769,000 | 145,000 | $ | 6,549,000 | |||||||||||||||
Income (loss) from operations | 1,234,000 | (127,000 | ) | 672,000 | 38,000 | $ | 1,817,000 | ||||||||||||||
Income (loss) before tax | 1,718,000 | (221,000 | ) | 680,000 | 29,000 | $ | 2,206,000 | ||||||||||||||
Total Assets | 23,279,000 | 2,758,000 | 3,092,000 | 3,639,000 | $ | 32,768,000 | |||||||||||||||
Capital expenditures | 776,000 | 41,000 | 20,000 | 5,000 | $ | 842,000 | |||||||||||||||
Depreciation & Amortization | 413,000 | 105,000 | 158,000 | 28,000 | $ | 704,000 |
Note_16_Subsequent_Event
Note 16 - Subsequent Event | 12 Months Ended |
Nov. 30, 2014 | |
Notes to Financial Statements | |
Subsequent Events [Text Block] | (16) |
Subsequent Events | |
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 or disclosure in the notes to the consolidated financial statements. |
Significant_Accounting_Policie
Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Basis of Accounting, Policy [Policy Text Block] | Nature | ||||||||
of | |||||||||
Business | |||||||||
Art’s-Way Manufacturing Co., Inc. is primarily engaged in the fabrication and sale of specialized farm machinery in the agricultural sector of the United States. Primary product offerings include: portable and stationary animal feed processing equipment; hay and forage equipment; sugar beet harvesting equipment; land maintenance equipment; a line of portable grain augers; a line of manure spreaders; moldboard plows and a line of reels. The Company sells its labeled products through independent farm equipment dealers throughout the United States. In addition, the Company manufactures and supplies hay blowers to OEMs. The Company also provides after-market service parts that are available to keep its branded and OEM produced equipment operating to the satisfaction of the end user of the Company’s products. | |||||||||
On June 25, 2013, the Company acquired the fixed assets, raw material inventory, work-in-progress inventory and select finished goods inventory of Agro Trend, a division of Rojac Industries, Inc. of Clifford, Ontario, Canada. Agro Trend distributes agricultural equipment and manufactures commercial snow blowers and agricultural trailers. Most of the existing Agro Trend operational team was retained to continue the manufacture of snow blowers and trailers. The acquired assets and operations are reported with our agricultural products segment. For financial information related to the acquisition, see Note 12, “Acquisitions”. | |||||||||
Our Pressurized Vessels segment is primarily engaged in the fabrication and sale of pressurized vessels and tanks through the Company’s wholly-owned subsidiary, Art’s-Way Vessels, Inc. This segment provides a combination of services as a manufacturer and supplier of steel vessels and steel containment systems. The vessels are primarily sold to manufacturing facilities that will use the vessel as a component part of their end product. In addition to its role as a fabricator of vessels, it provides services including: custom CAD drawing; welding; interior linings and exterior finishing; passivation of stainless steel; hydrostatic and pneumatic testing; design, build and finishing of skids; installation of piping; non-destructive examination and heat treating. | |||||||||
Our Modular Buildings segment is primarily engaged in the construction of modular laboratories and animal housing facilities through the Company’s wholly-owned subsidiary, Art’s-Way Scientific, Inc. Buildings commonly produced range from basic swine buildings to complex containment research laboratories. This segment also provides services relating to the design, manufacturing, delivering, installation and renting of the building units that it produces. | |||||||||
On September 30, 2013, the Company acquired the assets of Ohio Metal Working Products Company (“Ohio Metals”) in Canton, Ohio consisting of inventory, equipment, land, and building. Ohio Metal is a domestic manufacturer and distributor of standard single point brazed carbide tipped tools as well as PCD (polycrystalline diamond) and CBN (cubic boron nitride) inserts and tools. The existing Ohio Metal operational team was retained to continue the manufacturing of the carbide, PCD, and CBN tipped tools and inserts. The acquired assets and operations are reported in our Tools segment for financial reporting purposes. For financial information related to the acquisition, see Note 12, “Acquisitions”. | |||||||||
Consolidation, Policy [Policy Text Block] | (b) Principles of Consolidation | ||||||||
The consolidated financial statements include the accounts of Art’s-Way Manufacturing Co., Inc. and its wholly-owned subsidiaries, Universal Harvester by Art’s-Way, Inc., Art’s-Way Vessels, Inc., Art’s-Way Scientific, Inc., Art’s-Way Manufacturing International LTD, and Ohio Metal Working Products/Art’s-Way, Inc. Universal Harvester by Art’s-Way was formed in 2012 in connection with the Company’s acquisition of certain assets of UHC. Art’s-Way Manufacturing International LTD was formed in June 2013 when the Company acquired certain assets of Agro Trend while Ohio Metal Working Products/Art’s-Way, Inc. was formed in September 2013 when the Company acquired certain assets of Ohio Metal. All material inter-company accounts and transactions are eliminated in consolidation. | |||||||||
The financial books of International 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 Company monitors the resulting cumulative translation adjustment and considers it to be immaterial. | |||||||||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Cash | ||||||||
Concentration | |||||||||
The Company maintains several different accounts at four different banks, and balances in these accounts are periodically in excess of federally insured limits. However, management believes the risk of loss to be low. | |||||||||
Major Customers, Policy [Policy Text Block] | Customer Concentration | ||||||||
During the years ended November 30, 2014, and November 30, 2013 no one customer accounted for more than 7% and 6% of consolidated revenues, respectively. | |||||||||
Receivables, Policy [Policy Text Block] | Accounts | ||||||||
Receivable | |||||||||
Accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Accounts receivable are written-off when deemed uncollectible. Recoveries of accounts receivable previously written-off are recorded when received. Accounts receivable are generally considered past due 60 days past invoice date, with the exception of international sales which primarily are sold with a letter of credit for 180 day terms. | |||||||||
Trade receivables due from customers are uncollateralized customer obligations due under normal trade terms requiring payment within 30 days from the invoice date. Trade receivables are stated at the amount billed to the customer. The Company charges interest on overdue customer account balances at a rate of 1.5% per month. Payments of trade receivables are allocated to the specific invoices identified on the customer's remittance advice or, if unspecified, are applied to the earliest unpaid invoices. | |||||||||
Inventory, Policy [Policy Text Block] | Inventories | ||||||||
Inventories are stated at the lower of cost or market, and cost is determined using the standard costing method. Management monitors the carrying value of inventories using inventory control and review processes that include, but are not limited to, sales forecast review, inventory status reports, and inventory reduction programs. The Company records inventory write downs to market based on expected usage information for raw materials and historical selling trends for finished goods. Additional write downs may be necessary if the assumptions made by management do not occur. | |||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | Property, Plant, and Equipment | ||||||||
Property, plant, and equipment are recorded at cost. Depreciation of plant and equipment is provided using the straight-line method, based on the estimated useful lives of the assets which range from three to forty years. | |||||||||
Lease, Policy [Policy Text Block] | Lessor Accounting | ||||||||
Modular buildings held for short term lease by our Modular Buildings segment are recorded at cost. Amortization of the property is calculated over the useful life of the building. Estimated useful life is five years. Lease revenue is accounted for on a straight-line basis over the term of the related lease agreement. | |||||||||
Income Tax, Policy [Policy Text Block] | Income Taxes | ||||||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating losses. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates as recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is entirely dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. | |||||||||
The Company shall classify interest and penalties to be paid on an underpayment of taxes as income tax expense. The Company files income tax returns in the U.S. federal jurisdiction and various states and Canada. The company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years ended before November 30, 2010. | |||||||||
Research and Development Expense, Policy [Policy Text Block] | Research and Development | ||||||||
Research and development costs are expensed when incurred. Such costs approximated $191,000 and $174,000 for the years ended November 30, 2014 and 2013, respectively. | |||||||||
Advertising Costs, Policy [Policy Text Block] | Advertising | ||||||||
Advertising costs are expensed when incurred. Such costs approximated $511,000 and $479,000 for the years ended November 30, 2014 and 2013, respectively. | |||||||||
Earnings Per Share, Policy [Policy Text Block] | Income | ||||||||
Per | |||||||||
Share | |||||||||
Basic net income per common share has been computed on the basis of the weighted average number of common shares outstanding. Diluted net income 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. | |||||||||
Basic and diluted earnings per common share have been computed based on the following as of November 30, 2014 and 2013: | |||||||||
For the twelve months ended | |||||||||
30-Nov-14 | 30-Nov-13 | ||||||||
Basic: | |||||||||
Numerator: net income | $ | 935,247 | $ | 1,551,376 | |||||
Denominator: average number of common shares outstanding | 4,047,796 | 4,039,530 | |||||||
Basic earnings per common share | $ | 0.23 | $ | 0.38 | |||||
Diluted: | |||||||||
Numerator: net income | $ | 935,247 | $ | 1,551,376 | |||||
Average number of common shares outstanding | 4,047,796 | 4,039,530 | |||||||
Effect of dilutive stock options | 4,907 | 10,261 | |||||||
Denominator: dilutive average number of common shares outstanding | 4,052,703 | 4,049,791 | |||||||
Diluted earnings per common share | $ | 0.23 | $ | 0.38 | |||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock | ||||||||
Based | |||||||||
Compensation | |||||||||
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. Restricted stock is valued at market value at the day of grant. | |||||||||
Use of Estimates, Policy [Policy Text Block] | Use of Estimates | ||||||||
Management of the Company has made a number of estimates and assumptions related to the reported amount of assets and liabilities, reported amount of revenues and expenses, and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. | |||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | 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 will be the fiscal year beginning December 1, 2014. The Company currently has no unrecognized tax benefits that are impacted by the amendment and the Company does not expect this standard to have 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 | |||||||||
. The guidance provides a definition of the term substantial doubt, requires an evaluation every reporting period including interim periods, provides principles for considering the mitigating effect of management’s plans, requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, requires an express statement and other disclosures when substantial doubt is not alleviated, and requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). ASU No. 2015-15 is effective for annual reporting periods ending after December 15, 2016. The Company will adopt this guidance for the year-ended November 30, 2017, and it will apply to each interim and annual period thereafter. Its adoption is not expected to have a material effect on the Company's consolidated financial statements. | |||||||||
Fair Value Measurement, Policy [Policy Text Block] | Fair Value Measurements | ||||||||
The accounting framework for determining fair value includes a hierarchy for ranking the quality and reliability of the information used to measure fair value, which enables the reader of the financial statements to assess the inputs used to develop those measurements. The fair value hierarchy consists of three tiers as follows: Level 1, defined as quoted market prices in active markets for identical securities; Level 2, defined as inputs other than Level 1 that are observable, either directly or indirectly; and Level 3, defined as unobservable inputs that are not corroborated by market data. | |||||||||
Goodwill and Intangible Assets, Policy [Policy Text Block] | (i) | ||||||||
Goodwill and Impairment | |||||||||
Goodwill represents costs in excess of the fair value of net tangible and identifiable net intangible assets acquired in business combinations. Art’s-Way performs an annual test for impairment of goodwill during the fourth quarter. There was no impairment of goodwill as of November 30, 2014 and 2013. | |||||||||
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition | ||||||||
Revenue is recognized when risk of ownership and title pass to the buyer, generally upon the shipment of the product. All sales are made to authorized dealers whose application for dealer status has been approved and who have been informed of general sales policies. Any changes in Company terms are documented in the most recently published price lists. Pricing is fixed and determinable according to the Company’s published equipment and parts price lists. Title to all equipment and parts sold shall pass to the Buyer upon delivery to the carrier and is not subject to a customer acceptance provision. Proof of the passing of title is documented by the signing of the delivery receipt by a representative of the carrier. Post shipment obligations are limited to any claim with respect to the condition of the equipment or parts. Applicable sales taxes imposed on our revenues are presented on a net basis on the consolidated statements of operations and therefore do not impact net revenues or cost of goods sold. A provision for warranty expenses, based on sales volume, is included in the financial statements. The Company’s return policy allows for new and saleable parts to be returned, subject to inspection and a restocking charge which is included in net sales. Whole goods are not returnable. Shipping costs charged to customers are included in net sales. Freight costs incurred are included in cost of goods sold. | |||||||||
In certain circumstances, upon the customer’s written request, we may recognize revenue when production is complete and the good is ready for shipment. At the buyer’s request, we will bill the buyer upon completing all performance obligations, but before shipment. The buyer dictates that we ship the goods per their direction from our manufacturing facility, as is customary with this type of agreement, in order to minimize shipping costs. The written agreement with the customer specifies that the goods will be delivered on a schedule to be determined by the customer, with a final specified delivery date, and that we will segregate the goods from our inventory, such that they are not available to fill other orders. This agreement also specifies that the buyer is required to purchase all goods manufactured under this agreement. Title of the goods will pass to the buyer when the goods are complete and ready for shipment, per the customer agreement. At the transfer of title, all risks of ownership have passed to the buyer, and the buyer agrees to maintain insurance on the manufactured items that have not yet been shipped. The Company has operated using bill and hold agreements with certain customers for many years. The credit terms on this agreement are consistent with the credit terms on all other sales. All risks of loss are shouldered by the buyer, and there are no exceptions to the buyer’s commitment to accept and pay for these manufactured goods. Revenues recognized at the completion of production | |||||||||
in 2014 and 2013 were approximately $628,000 and $788,000, respectively. | |||||||||
During fiscal 2014, the Company recognized revenues of $59,000 for transactions with related parties. | |||||||||
Our Modular Buildings segment is in the construction industry, and as such accounts for long-term contracts on the percentage of completion method. Revenue and gross profit are recognized as work is performed based on the relationship between actual costs incurred and total estimated costs at completion. Contract losses are recognized when current estimates of total contract revenue and contract cost indicate a loss. Estimated contract costs include any and all costs appropriately allocable to the contract. The provision for these contract losses will be the excess of estimated contract costs over estimated contract revenues. | |||||||||
Costs and profit in excess of amounts billed are classified as current assets and billings in excess of cost and profit are classified as current liabilities. |
Note_1_Summary_of_Significant_1
Note 1 - Summary of Significant Account Policies (Tables) | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes Tables | |||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | For the twelve months ended | ||||||||
30-Nov-14 | 30-Nov-13 | ||||||||
Basic: | |||||||||
Numerator: net income | $ | 935,247 | $ | 1,551,376 | |||||
Denominator: average number of common shares outstanding | 4,047,796 | 4,039,530 | |||||||
Basic earnings per common share | $ | 0.23 | $ | 0.38 | |||||
Diluted: | |||||||||
Numerator: net income | $ | 935,247 | $ | 1,551,376 | |||||
Average number of common shares outstanding | 4,047,796 | 4,039,530 | |||||||
Effect of dilutive stock options | 4,907 | 10,261 | |||||||
Denominator: dilutive average number of common shares outstanding | 4,052,703 | 4,049,791 | |||||||
Diluted earnings per common share | $ | 0.23 | $ | 0.38 |
Note_2_Allowance_for_Doubtful_1
Note 2 - Allowance for Doubtful Accounts (Tables) | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes Tables | |||||||||
Allowance for Credit Losses on Financing Receivables [Table Text Block] | For the 12 months ended | ||||||||
30-Nov-14 | 30-Nov-13 | ||||||||
Balance, beginning | $ | 35,474 | $ | 27,958 | |||||
Provision charged to expense | 4,540 | 7,516 | |||||||
Less amounts charged-off | (4,839 | ) | - | ||||||
Balance, ending | $ | 35,175 | $ | 35,474 |
Note_3_Inventory_Tables
Note 3 - Inventory (Tables) | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes Tables | |||||||||
Schedule of Inventory, Current [Table Text Block] | 30-Nov-14 | 30-Nov-13 | |||||||
Raw materials | $ | 10,037,055 | $ | 10,322,014 | |||||
Work in process | 467,110 | 511,016 | |||||||
Finished goods | 8,504,062 | 7,305,301 | |||||||
$ | 19,008,227 | 18,138,331 | |||||||
Less: Reserves | (3,918,947 | ) | (3,215,806 | ) | |||||
$ | 15,089,280 | $ | 14,922,525 |
Note_4_Contracts_in_Progress_T
Note 4 - Contracts in Progress (Tables) | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes Tables | |||||||||
Schedule of Long Term Contracts [Table Text Block] | Cost and Profit in | Billings in Excess of | |||||||
Excess of Billings | Costs and Profit | ||||||||
30-Nov-14 | |||||||||
Costs | $ | 14,724 | $ | 623,670 | |||||
Estimated earnings | 4,819 | 204,114 | |||||||
19,543 | 827,784 | ||||||||
Less: amounts billed | (2,000 | ) | (924,166 | ) | |||||
$ | 17,543 | $ | (96,382 | ) | |||||
30-Nov-13 | |||||||||
Costs | $ | 326,560 | $ | 115,789 | |||||
Estimated earnings | 106,848 | 21,470 | |||||||
433,408 | 137,259 | ||||||||
Less: amounts billed | (391,170 | ) | (154,980 | ) | |||||
$ | 42,238 | $ | (17,721 | ) |
Note_5_Property_Plant_and_Equi1
Note 5 - Property, Plant, and Equipment (Tables) | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes Tables | |||||||||
Property, Plant and Equipment [Table Text Block] | 30-Nov-14 | 30-Nov-13 | |||||||
Land | $ | 1,188,155 | $ | 1,188,155 | |||||
Buildings and improvements | 10,542,327 | 10,315,222 | |||||||
Construction in Progress | 107,807 | 404,016 | |||||||
Manufacturing machinery and equipment | 14,097,934 | 13,555,073 | |||||||
Trucks and automobiles | 433,962 | 436,367 | |||||||
Furniture and fixtures | 149,022 | 149,022 | |||||||
26,519,207 | 26,047,855 | ||||||||
Less accumulated depreciation | (14,838,415 | ) | (14,147,653 | ) | |||||
Property, plant and equipment | $ | 11,680,792 | $ | 11,900,202 |
Note_6_Accrued_Expenses_Tables
Note 6 - Accrued Expenses (Tables) | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes Tables | |||||||||
Schedule of Accrued Liabilities [Table Text Block] | 30-Nov-14 | 30-Nov-13 | |||||||
Salaries, wages, and commissions | $ | 673,934 | $ | 836,200 | |||||
Accrued warranty expense | 234,266 | 220,719 | |||||||
Other | 676,128 | 661,556 | |||||||
$ | 1,584,328 | $ | 1,718,475 |
Note_7_Product_Warranty_Tables
Note 7 - Product Warranty (Tables) | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes Tables | |||||||||
Schedule of Product Warranty Liability [Table Text Block] | 30-Nov-14 | 30-Nov-13 | |||||||
Balance, beginning | $ | 220,719 | $ | 578,864 | |||||
Settlements / adjustments | (421,787 | ) | (605,281 | ) | |||||
Warranties issued | 435,334 | 247,136 | |||||||
Balance, ending | $ | 234,266 | $ | 220,719 |
Note_8_Loan_and_Credit_Agreeme1
Note 8 - Loan and Credit Agreements (Tables) | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes Tables | |||||||||
Schedule of Debt [Table Text Block] | 30-Nov-14 | 30-Nov-13 | |||||||
U.S. Bank loan payable in monthly installments of $42,500 including interest at 2.98%, due May 1, 2018 | $ | 1,662,311 | $ | 2,114,675 | |||||
U.S. Bank loan payable in monthly installments of $11,000 including interest at 2.98%, due May 1, 2018 | 850,930 | 955,507 | |||||||
U.S. Bank loan payable in monthly installments of $12,550 including interest at 2.98%, due May 1, 2018 | 965,889 | 1,085,350 | |||||||
U.S. Bank loan payable in monthly installments of $27,800 including interest at 2.98%, due May 1, 2018 | 1,407,366 | 1,693,752 | |||||||
U.S. Bank loan payable in monthly installments of $11,700 including interest at 3.15%, due May 10, 2017 | 588,101 | 707,719 | |||||||
U.S. Bank loan payable in monthly installments of $5,556 including interest at 2.98%, due May 25, 2017 | 980,940 | - | |||||||
Iowa Finance Authority loan payable in monthly installments of $12,500 including interest at 2.75%, due June 1, 2020 | 777,689 | 904,662 | |||||||
IDED loan payable in monthly installments of $2,437 including interest at 6%, due June 1, 2014 | - | 14,375 | |||||||
IDED loan payable in monthly installments of $813 including interest at 0%, due June 1, 2014 | - | 4,883 | |||||||
Total term debt | $ | 7,233,226 | $ | 7,480,923 | |||||
Less current portion of term debt | 1,283,897 | 1,228,964 | |||||||
Term debt, excluding current portion | $ | 5,949,329 | $ | 6,251,959 | |||||
Schedule of Maturities of Long-term Debt [Table Text Block] | Year: | Amount | |||||||
2015 | $ | 1,283,897 | |||||||
2016 | 1,322,663 | ||||||||
2017 | 2,433,936 | ||||||||
2018 | 1,959,763 | ||||||||
2019 | 145,941 | ||||||||
2020 and thereafter | 87,026 | ||||||||
$ | 7,233,226 |
Note_10_Equity_Incentive_Plan_
Note 10 - Equity Incentive Plan (Tables) | 12 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Notes Tables | |||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | 2014 | 2013 | |||||||||||||||
Expected Volatility | 32.28% | 53.71 | % | ||||||||||||||
Expected Dividend Yield | 1.24% | - | 1.28% | 1.063 | % | ||||||||||||
Expected Term (in years) | 2 | 2 | |||||||||||||||
Risk-Free Rate | 3.25% | 3.25 | % | ||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Options | Shares | Weighted | Weighted | Aggregate Intrinsic | ||||||||||||
Average | Average | Value | |||||||||||||||
Exercise | Remaining | ||||||||||||||||
Price | Contractual | ||||||||||||||||
Term | |||||||||||||||||
Options Outstanding at beginning of period | 143,000 | $ | 9 | - | - | ||||||||||||
Granted | 19,000 | $ | 6.1 | - | - | ||||||||||||
Exercised | (2,000 | ) | $ | 3.88 | - | $ | 4,020 | ||||||||||
Options Expired or Forfeited | - | $ | - | - | - | ||||||||||||
Options Outstanding at end of Period | 160,000 | $ | 8.72 | 5.14 | $ | 15,400 | |||||||||||
Options Exercisable at end of Period | 155,000 | $ | 8.81 | 5.27 | $ | 15,400 | |||||||||||
Options | Shares | Weighted | Weighted | Aggregate Intrinsic | |||||||||||||
Average | Average | Value | |||||||||||||||
Exercise | Remaining | ||||||||||||||||
Price | Contractual | ||||||||||||||||
Term | |||||||||||||||||
Options Outstanding at beginning of period | 163,000 | $ | 9.16 | - | - | ||||||||||||
Granted | 14,000 | $ | 6.4 | - | - | ||||||||||||
Exercised | (9,000 | ) | $ | 5.15 | - | $ | 13,970 | ||||||||||
Options Expired or Forfeited | (25,000 | ) | $ | 10.04 | - | - | |||||||||||
Options Outstanding at end of Period | 143,000 | $ | 9 | 5.71 | |||||||||||||
Options Exercisable at end of Period | 143,000 | $ | 9 | 5.71 | $ | 48,400 | |||||||||||
Schedule of Nonvested Share Activity [Table Text Block] | Non-vested Shares | Shares | Weighted-Average | ||||||||||||||
Grant-Date Fair Value | |||||||||||||||||
Non-vested at beginning of period | - | $ | 0 | ||||||||||||||
Granted | 19,000 | $ | 1.17 | ||||||||||||||
Vested | -14,000 | $ | 1.18 | ||||||||||||||
Forfeited | - | $ | 0 | ||||||||||||||
Non-vested at end of period | 5,000 |
Note_11_Income_Taxes_Tables
Note 11 - Income Taxes (Tables) | 12 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Notes Tables | |||||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | 30-Nov | ||||||||
2014 | 2013 | ||||||||
Current Expense | $ | 307,452 | $ | 765,606 | |||||
Deferred expense (benefit) | 59,806 | (111,138 | ) | ||||||
$ | 367,258 | $ | 654,468 | ||||||
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | 30-Nov | ||||||||
2014 | 2013 | ||||||||
Statutory federal income tax rate | 34 | % | 34 | % | |||||
R&D tax credits | (2.0 | ) | (1.0 | ) | |||||
Permanent Differences and Other | (3.8 | ) | (3.3 | ) | |||||
28.2 | % | 29.7 | % | ||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | 30-Nov | ||||||||
2014 | 2013 | ||||||||
Current deferred tax assets (liabilities): | |||||||||
Accrued expenses | $ | 147,000 | $ | 168,000 | |||||
Inventory capitalization | 22,000 | 24,000 | |||||||
Asset reserves | 1,091,000 | 1,036,000 | |||||||
Total current deferred tax assets | $ | 1,260,000 | $ | 1,228,000 | |||||
Non-current deferred tax assets | |||||||||
Property, plant, and equipment | $ | (1,142,000 | ) | $ | (953,000 | ) | |||
Total non-current deferred tax assets (liabilities) | $ | (1,142,000 | ) | $ | (953,000 | ) |
Note_15_Segment_Information_Ta
Note 15 - Segment Information (Tables) | 12 Months Ended | ||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||
Notes Tables | |||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Twelve Months Ended November 30, 2014 | ||||||||||||||||||||
Agricultural | Pressurized | Modular | Tools | Consolidated | |||||||||||||||||
Products | Vessels | Buildings | |||||||||||||||||||
Revenue from external customers | $ | 27,952,000 | $ | 1,736,000 | $ | 2,965,000 | $ | 3,517,000 | $ | 36,170,000 | |||||||||||
Gross Profit | 7,150,000 | 39,000 | 626,000 | 910,000 | $ | 8,725,000 | |||||||||||||||
Operating Expense | 5,051,000 | 351,000 | 768,000 | 890,000 | $ | 7,060,000 | |||||||||||||||
Income (loss) from operations | 2,099,000 | (312,000 | ) | (142,000 | ) | 20,000 | $ | 1,665,000 | |||||||||||||
Income (loss) before tax | 1,842,000 | (341,000 | ) | (165,000 | ) | (33,000 | ) | $ | 1,303,000 | ||||||||||||
Total Assets | 24,587,000 | 2,548,000 | 2,503,000 | 3,210,000 | $ | 32,846,000 | |||||||||||||||
Capital expenditures | 581,000 | 27,000 | - | 25,000 | $ | 633,000 | |||||||||||||||
Depreciation & Amortization | 537,000 | 108,000 | 146,000 | 116,000 | $ | 907,000 | |||||||||||||||
Twelve Months Ended November 30, 2013 | |||||||||||||||||||||
Agricultural | Pressurized | Modular | Tools | Consolidated | |||||||||||||||||
Products | Vessels | Buildings | |||||||||||||||||||
Revenue from external customers | $ | 28,199,000 | $ | 2,137,000 | $ | 3,240,000 | $ | 651,000 | $ | 34,227,000 | |||||||||||
Gross Profit | 6,508,000 | 234,000 | 1,441,000 | 183,000 | $ | 8,366,000 | |||||||||||||||
Operating Expense | 5,275,000 | 360,000 | 769,000 | 145,000 | $ | 6,549,000 | |||||||||||||||
Income (loss) from operations | 1,234,000 | (127,000 | ) | 672,000 | 38,000 | $ | 1,817,000 | ||||||||||||||
Income (loss) before tax | 1,718,000 | (221,000 | ) | 680,000 | 29,000 | $ | 2,206,000 | ||||||||||||||
Total Assets | 23,279,000 | 2,758,000 | 3,092,000 | 3,639,000 | $ | 32,768,000 | |||||||||||||||
Capital expenditures | 776,000 | 41,000 | 20,000 | 5,000 | $ | 842,000 | |||||||||||||||
Depreciation & Amortization | 413,000 | 105,000 | 158,000 | 28,000 | $ | 704,000 |
Note_1_Summary_of_Significant_2
Note 1 - Summary of Significant Account Policies (Details Textual) (USD $) | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Accounting Policies [Abstract] | ||
Overdue Trade Receivables Interest Rate Percent of Account Balances Per Month | 1.50% | |
Goodwill, Impairment Loss | $0 | $0 |
Sales Revenue, Goods, Gross | 628,000 | 788,000 |
Research and Development Expense | 191,000 | 174,000 |
Advertising Expense | 511,000 | 479,000 |
Revenue from Related Parties | $59,000 | |
Maximum [Member] | ||
Accounting Policies [Abstract] | ||
Property, Plant and Equipment, Useful Life | 40 years | |
Minimum [Member] | ||
Accounting Policies [Abstract] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Assets Leased to Others [Member] | ||
Accounting Policies [Abstract] | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Maximum [Member] | ||
Accounting Policies [Abstract] | ||
Concentration Risk, Percentage | 7.00% | 6.00% |
Note_1_Summary_of_Significant_3
Note 1 - Summary of Significant Accounting Policies - Basic and Diluted Earnings Per Common Share (Details) (USD $) | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Basic: | ||
Net income | $935,247 | $1,551,376 |
Average number of common shares outstanding (in shares) | 4,047,796 | 4,039,530 |
Basic earnings per common share (in dollars per share) | $0.23 | $0.38 |
Diluted: | ||
Net income | $935,247 | $1,551,376 |
Average number of common shares outstanding (in shares) | 4,047,796 | 4,039,530 |
Effect of dilutive stock options (in shares) | 4,907 | 10,261 |
Denominator: dilutive average number of common shares outstanding (in shares) | 4,052,703 | 4,049,791 |
Diluted earnings per common share (in dollars per share) | $0.23 | $0.38 |
Note_2_Allowance_for_Doubtful_2
Note 2 - Allowance for Doubtful Accounts - Activity in the Allowance for Doubtful Accounts (Details) (USD $) | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Balance, beginning | $35,474 | $27,958 |
Bad debt expense (recovery) | 4,540 | 7,516 |
Less amounts charged-off | -4,839 | |
Balance, ending | $35,175 | $35,474 |
Note_3_Inventory_Major_Classes
Note 3 - Inventory - Major Classes of Inventory (Details) (USD $) | Nov. 30, 2014 | Nov. 30, 2013 |
Raw materials | $10,037,055 | $10,322,014 |
Work in process | 467,110 | 511,016 |
Finished goods | 8,504,062 | 7,305,301 |
19,008,227 | 18,138,331 | |
Less: Reserves | -3,918,947 | -3,215,806 |
$15,089,280 | $14,922,525 |
Note_4_Contracts_in_Progress_D
Note 4 - Contracts in Progress (Details Textual) (USD $) | Nov. 30, 2014 | Nov. 30, 2013 |
Contractors [Abstract] | ||
Contract Receivable Retainage | $8,048 | $0 |
Note_4_Contracts_in_Progress_L
Note 4 - Contracts in Progress - Long-term Contracts (Details) (USD $) | Nov. 30, 2014 | Nov. 30, 2013 |
Billings in Excess of Cost and Profit [Member] | ||
Costs | $623,670 | $115,789 |
Estimated earnings | 204,114 | 21,470 |
827,784 | 137,259 | |
Less: amounts billed | -924,166 | -154,980 |
-96,382 | -17,721 | |
Cost and Profit In Excess of Billings [Member] | ||
Costs | 14,724 | 326,560 |
Estimated earnings | 4,819 | 106,848 |
19,543 | 433,408 | |
Less: amounts billed | -2,000 | -391,170 |
$17,543 | $42,238 |
Note_5_Property_Plant_and_Equi2
Note 5 - Property, Plant, and Equipment (Details Textual) (USD $) | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $906,702 | $704,457 |
Note_5_Property_Plant_and_Equi3
Note 5 - Property, Plant, and Equipment - Major Classes of Property, Plant, and Equipment (Details) (USD $) | Nov. 30, 2014 | Nov. 30, 2013 |
Property, plant and equipment, gross | $26,519,207 | $26,047,855 |
Less accumulated depreciation | -14,838,415 | -14,147,653 |
Property, plant and equipment | 11,680,792 | 11,900,202 |
Building and Building Improvements [Member] | ||
Property, plant and equipment, gross | 10,542,327 | 10,315,222 |
Construction in Progress [Member] | ||
Property, plant and equipment, gross | 107,807 | 404,016 |
Furniture and Fixtures [Member] | ||
Property, plant and equipment, gross | 149,022 | 149,022 |
Land [Member] | ||
Property, plant and equipment, gross | 1,188,155 | 1,188,155 |
Manufacturing Machinery and Equipment [Member] | ||
Property, plant and equipment, gross | 14,097,934 | 13,555,073 |
Trucks and Automobiles [Member] | ||
Property, plant and equipment, gross | $433,962 | $436,367 |
Note_6_Accrued_Expenses_Major_
Note 6 - Accrued Expenses - Major Components Of Accrued Expenses (Details) (USD $) | Nov. 30, 2014 | Nov. 30, 2013 |
Salaries, wages, and commissions | $673,934 | $836,200 |
Accrued warranty expense | 234,266 | 220,719 |
Other | 676,128 | 661,556 |
$1,584,328 | $1,718,475 |
Note_7_Product_Warranty_Detail
Note 7 - Product Warranty (Details Textual) | 12 Months Ended |
Nov. 30, 2014 | |
Product Warranties Disclosures [Abstract] | |
Standard Product Warrant Term | 1 year |
Note_7_Product_Warranty_Change
Note 7 - Product Warranty - Changes In Product Warranty Liability (Details) (USD $) | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Balance, beginning | $220,719 | $578,864 |
Settlements / adjustments | -421,787 | -605,281 |
Warranties issued | 435,334 | 247,136 |
Balance, ending | $234,266 | $220,719 |
Note_8_Loan_and_Credit_Agreeme2
Note 8 - Loan and Credit Agreements (Details Textual) (USD $) | 12 Months Ended | 0 Months Ended | |||||||
Nov. 30, 2014 | 31-May-13 | Nov. 30, 2013 | Jun. 01, 2009 | Feb. 01, 2013 | 1-May-10 | 29-May-14 | 10-May-12 | 1-May-13 | |
Debt Disclosure [Abstract] | |||||||||
Line of Credit Facility, Interest Rate at Period End | 3.50% | ||||||||
Long-term Line of Credit | $2,569,109 | ||||||||
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 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 | ||||||||
Long-term Debt | 7,233,226 | 7,480,923 | |||||||
IDEA Note 1 [Member] | |||||||||
Debt Disclosure [Abstract] | |||||||||
Debt Instrument, Face Amount | 95,000 | ||||||||
IDEA Note 2 [Member] | |||||||||
Debt Disclosure [Abstract] | |||||||||
Debt Instrument, Face Amount | 95,000 | ||||||||
Iowa Finance Authority [Member] | |||||||||
Debt Disclosure [Abstract] | |||||||||
Debt Instrument, Face Amount | 1,300,000 | ||||||||
Long-term Debt | 777,689 | 904,662 | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.75% | 3.50% | |||||||
Debt Instrument Covenant Debt Service Coverage Ratio | 1.5 | ||||||||
US Bank [Member] | |||||||||
Debt Disclosure [Abstract] | |||||||||
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% | ||||||||
US Bank New Loans [Member] | |||||||||
Debt Disclosure [Abstract] | |||||||||
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, Fee Amount | 130,000 | ||||||||
Debt Issuance Cost | 9,000 | ||||||||
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% | ||||||||
West Bank Loan1 [Member] | |||||||||
Debt Disclosure [Abstract] | |||||||||
Long-term Debt | 4,342,000 | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.75% | ||||||||
West Bank Loan2 [Member] | |||||||||
Debt Disclosure [Abstract] | |||||||||
Long-term Debt | $1,749,000 | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% |
Note_8_Loan_and_Credit_Agreeme3
Note 8 - Loan and Credit Agreements - Summary Of Term Debt (Details) (USD $) | Nov. 30, 2014 | Nov. 30, 2013 |
Term debt | $7,233,226 | $7,480,923 |
Current portion of term debt | 1,283,897 | 1,228,964 |
Term debt, excluding current portion | 5,949,329 | 6,251,959 |
IDED [Member] | ||
Term debt | 14,375 | |
IDED Note 1 [Member] | ||
Term debt | 4,883 | |
Iowa Finance Authority [Member] | ||
Term debt | 777,689 | 904,662 |
US Bank Loan 1 [Member] | ||
Term debt | 1,662,311 | 2,114,675 |
US Bank Loan 2 [Member] | ||
Term debt | 850,930 | 955,507 |
US Bank Loan 3 [Member] | ||
Term debt | 965,889 | 1,085,350 |
US Bank Loan 4 [Member] | ||
Term debt | 1,407,366 | 1,693,752 |
US Bank Loan 5 [Member] | ||
Term debt | 588,101 | 707,719 |
US Bank Loan 6 [Member] | ||
Term debt | $980,940 |
Note_8_Loan_and_Credit_Agreeme4
Note 8 - Loan and Credit Agreements - Summary of the Minimum Maturities of Term Debt (Details) (USD $) | Nov. 30, 2014 |
2015 | $1,283,897 |
2016 | 1,322,663 |
2017 | 2,433,936 |
2018 | 1,959,763 |
2019 | 145,941 |
2020 and thereafter | 87,026 |
$7,233,226 |
Note_9_Employee_Benefit_Plans_
Note 9 - Employee Benefit Plans (Details Textual) (USD $) | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Compensation and Retirement Disclosure [Abstract] | ||
Defined Contribution Plan, Cost Recognized | $54,544 | $38,145 |
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 25.00% | |
Defined Contribution Plan Minimum Threshold Percentage of Employee Contributions | 4.00% | |
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent | 1.00% |
Note_10_Equity_Incentive_Plan_1
Note 10 - Equity Incentive Plan (Details Textual) (USD $) | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Allocated Share-based Compensation Expense | $14,504 | $29,812 |
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | 7,260 | 17,210 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $1.17 | $2.64 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | 3,881 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | 0 | 2,100 |
Proceeds from Stock Options Exercised | 7,760 | 46,390 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 14,000 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount | 0 | 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 19,000 | |
Restricted Stock [Member] | ||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Allocated Share-based Compensation Expense | $3,240 | $8,554 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 500 | 1,300 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 0 | 2,500 |
Non Qualified Options to Each Director Annually or Upon Election [Member] | ||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,000 |
Note_10_Equity_Incentive_Plan_2
Note 10 - Equity Incentive Plan - Fair Value Assumptions (Details) | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Expected Volatility | 32.28% | 53.71% |
Expected Dividend Yield | 1.06% | |
Expected Term (in years) | 2 years | 2 years |
Risk-Free Rate | 3.25% | 3.25% |
Maximum [Member] | ||
Expected Dividend Yield | 1.28% | |
Minimum [Member] | ||
Expected Dividend Yield | 1.24% |
Note_10_Equity_Incentive_Plan_3
Note 10 - Equity Incentive Plan - Option Activity (Details) (USD $) | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Options Outstanding at beginning of period (in shares) | 143,000 | 163,000 |
Options Outstanding at beginning of period (in dollars per share) | $9 | $9.16 |
Granted (in shares) | 19,000 | 14,000 |
Granted (in dollars per share) | $6.10 | $6.40 |
Exercised (in shares) | -2,000 | -9,000 |
Exercised (in dollars per share) | $3.88 | $5.15 |
Exercised | $4,020 | $13,970 |
Options Outstanding at end of Period (in shares) | 160,000 | 143,000 |
Options Outstanding at end of Period (in dollars per share) | $8.72 | $9 |
Options Outstanding at end of Period | 5 years 51 days | 5 years 259 days |
Options Outstanding at end of Period | 15,400 | |
Options Exercisable at end of Period (in shares) | 155,000 | 143,000 |
Options Exercisable at end of Period (in dollars per share) | $8.81 | $9 |
Options Exercisable at end of Period | 5 years 98 days | 5 years 259 days |
Options Exercisable at end of Period | $15,400 | $48,400 |
Options Expired or Forfeited (in shares) | -25,000 | |
Options Expired or Forfeited (in dollars per share) | $10.04 |
Note_10_Equity_Incentive_Plan_4
Note 10 - Equity Incentive Plan - Summary of the Status of the Company's Non-vested Shares (Details) (USD $) | 12 Months Ended |
Nov. 30, 2014 | |
Non-vested at beginning of period (in shares) | 0 |
Non-vested at beginning of period (in dollars per share) | $0 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 19,000 |
Granted (in dollars per share) | $1.17 |
Vested (in shares) | -14,000 |
Vested (in dollars per share) | $1.18 |
Forfeited (in shares) | 0 |
Forfeited (in dollars per share) | $0 |
Non-vested at end of period (in shares) | 5,000 |
Note_11_Income_Taxes_Income_Ta
Note 11 - Income Taxes - Income Tax Expense (Benefit) (Details) (USD $) | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Current Expense | $307,452 | $765,606 |
Deferred expense (benefit) | 59,806 | -111,138 |
$367,258 | $654,468 |
Note_11_Income_Taxes_Reconcili
Note 11 - Income Taxes - Reconciliation of the Statutory Federal Income Tax Rate (Details) | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Rate | Rate | |
Statutory federal income tax rate | 34.00% | 34.00% |
R&D tax credits | -2.00% | -1.00% |
Permanent Differences and Other | -3.80% | -3.30% |
28.20% | 29.70% |
Note_11_Income_Taxes_Deferred_
Note 11 - Income Taxes - Deferred Tax Assets and Liabilities (Details) (USD $) | Nov. 30, 2014 | Nov. 30, 2013 |
Accrued expenses | $147,000 | $168,000 |
Inventory capitalization | 22,000 | 24,000 |
Asset reserves | 1,091,000 | 1,036,000 |
Total current deferred tax assets | 1,259,943 | 1,228,097 |
Property, plant, and equipment | -1,142,000 | -953,000 |
Total non-current deferred tax assets (liabilities) | ($1,141,580) | ($952,645) |
Note_12_Acquisitions_Details_T
Note 12 - Acquisitions (Details Textual) (USD $) | 12 Months Ended | 0 Months Ended | 18 Months Ended | 1 Months Ended | |||
Nov. 30, 2014 | Nov. 30, 2013 | Jun. 25, 2013 | Nov. 30, 2014 | Sep. 30, 2013 | 29-May-14 | 10-May-12 | |
Business Combinations [Abstract] | |||||||
Increase (Decrease) in Inventories | $166,755 | ($769,641) | |||||
US Bank [Member] | |||||||
Business Combinations [Abstract] | |||||||
Debt Instrument, Face Amount | 1,000,000 | 880,000 | |||||
Agro Trend [Member] | |||||||
Business Combinations [Abstract] | |||||||
Payments to Acquire Businesses, Gross | 311,000 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 88,000 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 223,000 | ||||||
Agro Trend [Member] | Consigned Inventory [Member] | Agricultural Products [Member] | |||||||
Business Combinations [Abstract] | |||||||
Increase (Decrease) in Inventories | 393,000 | ||||||
Other Inventory, Materials, Supplies and Merchandise under Consignment, Gross | 600,000 | ||||||
Ohio Metal Working Products Company [Member] | |||||||
Business Combinations [Abstract] | |||||||
Payments to Acquire Businesses, Gross | 3,171,805 | 3,172,000 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 868,000 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 1,141,512 | 1,142,000 | |||||
Business Combination Recognized Identifiable Assets Acquired and Liabilities Assumed Land and Building | 1,200,000 | 1,200,000 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable | $37,957 | $38,000 |
Note_15_Segment_Information_De
Note 15 - Segment Information (Details Textual) | 12 Months Ended |
Nov. 30, 2014 | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 4 |
Note_15_Segment_Information_Se
Note 15 - Segment Information - Segment Reporting Information (Details) (USD $) | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Revenue from external customers | $36,169,811 | $34,226,553 |
Gross Profit | 8,724,569 | 8,366,446 |
Operating Expense | 7,059,731 | 6,549,306 |
Income (loss) from operations | 1,664,838 | 1,817,140 |
Income (loss) before tax | 1,303,000 | 2,206,000 |
Total Assets | 32,846,342 | 32,767,621 |
Capital expenditures | 633,000 | 842,000 |
Depreciation & Amortization | 907,000 | 704,000 |
Agricultural Products [Member] | ||
Revenue from external customers | 27,952,000 | 28,199,000 |
Gross Profit | 7,150,000 | 6,508,000 |
Operating Expense | 5,051,000 | 5,275,000 |
Income (loss) from operations | 2,099,000 | 1,234,000 |
Income (loss) before tax | 1,842,000 | 1,718,000 |
Total Assets | 24,587,000 | 23,279,000 |
Capital expenditures | 581,000 | 776,000 |
Depreciation & Amortization | 537,000 | 413,000 |
Modular Buildings [Member] | ||
Revenue from external customers | 2,965,000 | 3,240,000 |
Gross Profit | 626,000 | 1,441,000 |
Operating Expense | 768,000 | 769,000 |
Income (loss) from operations | -142,000 | 672,000 |
Income (loss) before tax | -165,000 | 680,000 |
Total Assets | 2,503,000 | 3,092,000 |
Capital expenditures | 20,000 | |
Depreciation & Amortization | 146,000 | 158,000 |
Pressurized Vessels [Member] | ||
Revenue from external customers | 1,736,000 | 2,137,000 |
Gross Profit | 39,000 | 234,000 |
Operating Expense | 351,000 | 360,000 |
Income (loss) from operations | -312,000 | -127,000 |
Income (loss) before tax | -341,000 | -221,000 |
Total Assets | 2,548,000 | 2,758,000 |
Capital expenditures | 27,000 | 41,000 |
Depreciation & Amortization | 108,000 | 105,000 |
Tools [Member] | ||
Revenue from external customers | 3,517,000 | 651,000 |
Gross Profit | 910,000 | 183,000 |
Operating Expense | 890,000 | 145,000 |
Income (loss) from operations | 20,000 | 38,000 |
Income (loss) before tax | -33,000 | 29,000 |
Total Assets | 3,210,000 | 3,639,000 |
Capital expenditures | 25,000 | 5,000 |
Depreciation & Amortization | $116,000 | $28,000 |