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<SEC-DOCUMENT>0000007623-04-000006.txt : 20040714
<SEC-HEADER>0000007623-04-000006.hdr.sgml : 20040714
<ACCEPTANCE-DATETIME>20040714120818
ACCESSION NUMBER:		0000007623-04-000006
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20040531
FILED AS OF DATE:		20040714

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ARTS WAY MANUFACTURING CO INC
		CENTRAL INDEX KEY:			0000007623
		STANDARD INDUSTRIAL CLASSIFICATION:	FARM MACHINERY & EQUIPMENT [3523]
		IRS NUMBER:				420920725
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0531

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-05131
		FILM NUMBER:		04913322

	BUSINESS ADDRESS:	
		STREET 1:		P O BOX 288
		CITY:			ARMSTRONG
		STATE:			IA
		ZIP:			50514
		BUSINESS PHONE:		7128643131

	MAIL ADDRESS:	
		STREET 1:		P O BOX 288
		CITY:			ARMSTRONG
		STATE:			IA
		ZIP:			50514
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>may10q04.txt
<TEXT>
              SECURITIES AND EXCHANGE COMMISSION
                    WASHINGTON, D.C. 20549

                        FORM 10-QSB

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the Quarter Ended May 31, 2004          Commission File No. 0-5131

               ART'S-WAY MANUFACTURING CO., INC.
 (Exact name of small business issuer as specified in its charter)

       DELAWARE                              42-0920725
State of Incorporation        I.R.S. Employer Identification No.

   Hwy 9 West, Armstrong, Iowa                     50514
Address of principal executive offices           Zip Code

Registrant's telephone number, including area code: (712) 864-3131

Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the past 12 months, and (2) has been subject to such
filing requirements for the past 90 days. Yes X No __

Number of common shares outstanding as of June 15, 2004: 1,938,176

            ART'S-WAY MANUFACTURING CO., INC.

           CONDENSED STATEMENTS OF OPERATIONS

                     (Unaudited)

                           Three Months Ended          Year to Date
                          May 31,      May 31,      May 31,      May 31,
                           2004         2003         2004         2003

Net sales               $2,917,125   $2,510,444    $5,809,417   $5,068,118
Cost of goods sold       1,991,203    1,744,509     4,187,671    3,698,119
Gross profit               925,922      765,935     1,621,746    1,369,999

Operating expenses:
Engineering                 40,058       15,256        94,848       34,179
Selling                    200,168      120,099       321,878      213,929
General and administrative 496,915      327,402       897,212      679,829
Total expenses             737,141      462,757     1,313,938      927,937

Income from operations     188,781      303,178       307,808      442,062

Other expenses:
Interest expense            44,805       30,994        80,830       48,973
Other                      (11,999)       9,782       (15,200)      15,847
Total other expenses        32,806       40,776        65,630       64,820

Income before income taxes 155,975      262,402       242,178      377,242

Income tax exp(benefit)   (100,000)           0      (100,000)       2,031

Net income                $255,975     $262,402      $342,178     $375,211

Net income per share:
Basic                        $0.13        $0.14         $0.18         $.19
Diluted                      $0.13        $0.13         $0.17        $0.19

Common shares and equivalent outstanding:
Basic                    1,938,176    1,938,176     1,938,176    1,938,176
Diluted                  1,959,639    1,950,438     1,958,896    1,948,646

See accompanying notes to condensed financial statements.

                    ART'S-WAY MANUFACTURING CO., INC.

                         CONDENSED BALANCE SHEETS

                                (Unaudited)

                                                May 31,     November 30,
                                                 2004        2003
ASSETS
Current Assets
Cash                                          $1,113,634      $800,052
Accounts receivable-customers,
   net of allowance for doubtful accounts
   of $36,866 and $39,250 in May and
   November, respectively                      1,083,697       885,890
Inventories                                    5,987,362     3,446,711
Deferred taxes                                   283,000       283,000
Other current assets                              90,061       150,185
Total current assets                           8,557,754     5,565,838

Property, plant and equipment, at cost        11,476,767    11,049,132
Less accumulated depreciation                 10,158,442    10,030,222
Net property, plant and equipment              1,318,325     1,018,910

Inventories, noncurrent                          314,727       483,432
Real estate loan receivable                      165,725       165,725
Deferred taxes                                   635,000       535,000
Other assets                                     166,332       192,932
Total assets                                 $11,157,863    $7,961,837

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt               $185,351      $178,508
Accounts payable                                 857,894        83,874
Customer deposits                              2,104,947        53,556
Accrued expenses                                 782,904       702,117
Total current liabilities                      3,931,096     1,018,055

Long-term liabilities                            212,963       174,766
Long-term debt, excluding current portion      1,874,458     1,971,848
Total liabilities                              6,018,517     3,164,669

Stockholders' Equity
Common stock - $.01 par value. Authorized
  5,000,000 shares; issued 1,938,176 shares
  in May and in November                          19,382        19,382
Additional paid-in capital                     1,634,954     1,634,954
Retained earnings                              3,485,010     3,142,832
Total stockholders' equity                     5,139,346     4,797,168
Total liabilities and stockholders' equity   $11,157,863    $7,961,837

See accompanying notes to condensed financial statements.

                      ART'S-WAY MANUFACTURING CO., INC.

                     CONDENSED STATEMENTS OF CASH FLOWS

                                (Unaudited)

                                                  Six Months Ended
                                                 May 31,      May 31,
                                                  2004         2003
CASH FLOW FROM OPERATIONS:
Net income                                      $342,178      $375,211
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization                    128,220       139,740
Deferred income taxes                           (100,000)            0
Changes in working capital components:
(Increase) decrease in:Accounts receivable      (197,807)     (380,538)
Other receivables                                      0      (110,000)
Inventories                                   (2,371,946)     (578,412)
Other current assets                              60,124       (75,131)
Other                                             64,797       (35,666)
Increase (decrease) in:
Accounts payable                                 774,020      (271,140)
Customer deposits                              2,051,391       734,511
Accrued expenses                                  80,787       102,404
Net cash provided by (used in)
operating activities                             831,764       (99,021)

CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of property, plant and
equipment                                       (427,635)            0

CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from (payments of)
notes payable to bank                                  0     1,322,668
Principal payments on long term debt             (90,547)     (319,222)
Net cash provided by (used in) financing
activities                                       (90,547)    1,003,446
Net increase in cash                             313,582       904,425
Cash at beginning of period                      800,052        75,358
Cash at end of period                         $1,113,634      $979,783

Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest                                         $80,830       $48,973
Income taxes                                      17,321         3,301

See accompanying notes to condensed financial statements.

                   ART'S-WAY MANUFACTURING CO., INC.

               NOTES TO CONDENSED FINANCIAL STATEMENTS

                            (Unaudited)


1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement Presentation

The financial statements are unaudited and reflect all adjustments
(consisting only of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of the
financial position and operating results for the interim periods. The
financial statements should be read in conjunction with the financial
statements and notes thereto contained in the Company's Annual Report on
Form 10-K for the year ended November 30, 2003. The results of
operations for the second quarter and year to date ended May 31, 2004
are not necessarily indicative of the results for the fiscal year ending
November 30, 2004.

Reclassifications

Certain 2003 financial statement amounts related to shipping costs have
been reclassified to conform to the current year presentation.

2.  INCOME PER SHARE

Basic net income per common share is computed on the basis of weighted
average number of common shares outstanding. Diluted net income per
share has been computed on the basis of weighted average number of
common shares outstanding plus equivalent shares assuming exercise of
stock options.

The difference in shares utilized in calculating basic and diluted net
income per share represents the number of shares issued under the
Company's stock option plans less shares assumed to be purchased with
proceeds from the exercise of the stock options. The reconciling item
between the shares used in the computation of basic and diluted earnings
per share for the second quarter ended May 31, 2004 is 21,463 equivalent
shares, 20,720 shares year to date, for the effect of dilutive stock
options.

3.  INVENTORIES

Major classes of inventory are:                May 31,        November 30,
                                                2004              2003

Raw material                                 $2,456,051         $744,549

Work-in-process                               1,402,360          805,142

Finished goods                                2,443,678        2,380,452

Total                                        $6,302,089       $3,930,143

Less inventories classified as noncurrent       314,727          483,432

Inventories, current                         $5,987,362       $3,446,711

4.  ACCRUED EXPENSES

Major components of accrued expenses are:       May 31,        November 30,
                                                 2004             2003

Salaries, wages and commissions                $391,063         $366,842

Accrued warranty expense                         72,283           59,207

Other                                           319,558          276,068

Total                                          $782,904         $702,117

5.  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 one 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 for the three and six months ended May 31, 2004 and
May 31, 2003 are as follows:

                               Three Months ended      Six Months ended
                              May 31,      May, 31    May 31,     May, 31
                               2004         2003       2004        2003

Balance, beginning            $53,943      59,207    $59,207       60,232
Settlements made in cash
or in-kind                    (19,721)    (28,625)   (51,512)     (58,155)
Warranties issued              38,061      28,914     64,588       57,419
Balance, ending               $72,283      59,496    $72,283       59,496

6.  LOAN AND CREDIT AGREEMENTS

Line of Credit

The Company has financing through West Bank consisting of two loan
agreements totaling $5,500,000.

Facility #1 is a revolving line of credit for $2,500,000 with advances
funding the working capital, letter of credit and corporate credit card
needs that mature on February 28, 2005. The interest rate is West Bank's
prime interest rate plus 1%, adjusted daily. Monthly interest only payments
are required and the unpaid principal is due on the maturity date.
Collateral consists of a first position on assets owned by the Company
including, but not limited to inventories, accounts receivable, machinery
and equipment. As of May 31, 2004, the Company has not borrowed against
Facility #1.

Facility #2 is long-term financing for up to $3,000,000 that is supported
by a guarantee issued by the United States Department of Agriculture (USDA)
for 75% of the loan amount outstanding. The loan refinanced existing
debt to UPS Capital (approximately $1,500,000), finance equipment
(approximately $250,000), provide permanent working capital
(approximately $500,000) and satisfy closing costs (approximately
$50,000). Approximately $700,000 will be reserved for future
acquisitions. The variable interest rate is West Bank's prime interest
rate plus 1.5%, adjusted daily. Monthly principal and interest payments
are amortized over 20 years, with final maturity at March 31, 2023.
Collateral for Facility #2 is primarily real estate with a second
position on assets of Facility #1. The USDA subordinates collateral
rights in all assets other than real estate in an amount equal to West
Bank's other credit commitments.

Other terms and conditions include providing monthly internally prepared
financial reports including accounts receivable aging schedules and
borrowing base certificates and year-end audited financial statements.
The borrowing bases limit advances from Facility #1 to 60% of accounts
receivable less than 90 days, 60% of finished goods inventory, 50% of
raw material inventory and 50% of work-in-process inventory plus 40% of
appraisal value of machinery and equipment. Covenants include restrictions
on debt service coverage ratio, debt/tangible net worth ratio, current
ratio, limit capital expenditures and tangible net worth. During the year
ended November 30, 2003, the Company violated certain debt covenants that
were waived.

On April 25, 2003 the Company borrowed $2,000,000 against
Facility #2, $1,528,775 was used to pay off other borrowings with
$110,000 being held in reserve for a letter of credit ($100,000) and any
additional fees. The balance of $471,225 was used as working capital.
The outstanding balance on Facility #2 at May 31, 2004 was $1,896,910.

J. Ward McConnell, Jr. was required to personally guarantee Facility #1
and Facility #2 on an unlimited and unconditional basis. The guarantee
of Facility #2 shall be reduced after the first three years to a
percentage representing his ownership of the Company. Mr. McConnell's
guarantee shall be removed from Facility #2 in the event that his
ownership interest in the Company is reduced to a level less than 20%
after the first three years of the loan. The Company compensates Mr.
McConnell for his personal guarantee at an annual percentage rate of 2%
of the outstanding balance paid monthly. As a result of the outstanding
balance on Facility #2 Mr. McConnell received $6,323, for the second
qarter, under this compensation agreement.

A summary of the Company's term debt is as follows:

                                             May 31,        November 30,
                                              2004             2003
West Bank Facility #2 payable in
monthlyInstallments of $17,776
including interest at Bank's prime
rate plus 1.5% (5.50%)                     $1,896,910        $1,950,975

State of Iowa Community Development
Block Grant promissory notes at zero
percent interest, maturity 2006,
with quarterly principal payments
of $11,111                                   $100,000          $122,223

State of Iowa Community Development
Block Grant local participation
promissory notes at 4% interest,
Maturity 2006, with quarterly payments
of $7,007                                     $62,899           $77,158

Total term debt                            $2,059,809        $2,150,356

Less current portion of term debt            $185,351          $178,508

Term debt, excluding current portion       $1,874,458        $1,971,848

7.  RELATED PARTY TRANSACTION

On January 22, 2004, at an Executive Session of the Board of Directors,
an incentive fee of $55,000 was authorized for J. Ward McConnell.
Subsequently, Mr. McConnell relinquished his rights to that bonus and
therefore, no expense has been recorded.

                              Item 2

    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

(a)    Liquidity and Capital Resources

The Company's main source of funds for the six months ended May 31, 2004
was payments received from customers for advance payments on sugar beet
equipment to be delivered in the third quarter. The increase in accounts
receivable resulted from the shipments of beet sl terms.ervice parts in the
second quarter of 2004, which are sold on special terms.

The positive cash flow from operations of $ 832,000 was used to fund
capital expenditures of $428,000 including the purchase and installation
of a new paint system, and fixturing for the new beet harvester. Long
term debt was paid down by $91,000 and the remaining $313,000 was
retained for future needs.

See footnote 5 of the notes to the condensed financial statements for a
discussion of the Company's credit facility.

The Company is mindful of the necessity to continue to control its
costs.

(b)    Results of Operations

The second quarter and year to date net sales were 16% and 15%
respectively, higher than for the comparable periods one-year ago. First
six months of 2004 revenues included $522,000 from the truck body line
acquired in July 2003. Art's-Way's branded products increased by
$921,000 while OEM sales decreased by $763,000. Art's-Way products with
increased sales are land planes ($329,000), grinder mixers ($331,000)
and plows ($260,000). The plow sales increase is off-set by the OEM
decrease, due to the licensing agreement with Case New Holland, Inc., to
sell the plows directly to dealers. In 2003 Case placed large orders
that were filled in the first six months of the year. We expect sales in
2004 to be spread more evenly throughout the year now that we are
selling directly to the dealers. We expect a spike in OEM sales in the
first quarter of 2005, when we produce a year's supply of OEM products.

Gross profit, as a percent of sales was 32% for the quarter ended May
31, 2004, compared to 31% for the same period in 2003. Year to date
through May 31, 2004, gross profit was 28% compared to 27% for the prior
year. Increased steel prices decreased our gross profit by $109,000 in
the second quarter.

Operating expenses are higher than last year. As a percent of sales,
operating expenses were 25% and 18% for the three months ended May 31,
2004 and 2003, respectively. Year to date operating expenses were 23%
and 18%, respectively. The increased operating expenses are due to our
continuing developmental expenses for new products and expenses for the
truck body line, including the move from Cherokee to Armstrong, Iowa. We
introduced a new sugar beet harvester with the industry's first 12 row
harvesting capability. We are also introducing, in the fourth quarter, a
new generation grinder-mixer with increased capacity and reduced
operating cycle times. The increase of engineering expenses for 2004 of
$61,000 compared to 2003 allows us to introduce new product offerings
for 2004 that we believe will continue to improve revenue and earnings.
Year to date selling expenses also increased $108,000 for 2004 from 2003
as increased sales led to increased commissions ($83,000). Advertising
expenses were also up $16,000 due to additional expenses for the truck body
line. We are attending more farm and industry trade shows during the
year to regain visibility of Art's-Way and Cherokee Truck Bodies branded
products. Year to date general and administrative expenses increased by
$217,000, due to additional expenses related to the truck body line
acquired in July 2003.

Interest and other expenses remained stable in 2004.

See (c) below for a discussion on the utilization of deferred tax
assets.

The order backlog as of May 31, 2004 is $3,936,000, compared to
$2,798,000 one year ago. These orders primarily will be delivered in the
third quarter of the current fiscal year. The current year backlog
includes $2,587,000 in orders for beet equipment compared to $1,232,000
last year at this time. We have no OEM backlog as a result of a license
agreement with Case New Holland, Inc., to manufacture moldboard plows
under our own label in spring of 2004. This will allow us to sell direct
to dealers.

(c)    Utilization of Deferred Tax Assets

We had established a deferred tax asset valuation allowance of
approximately $1,913,000 at November 30, 2002, due to the uncertainty of
realizing deferred tax assets. In assessing the realizability of
deferred tax assets, management considers whether it is more likely than
not that some portion of 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. At year end November 30,
2003, we reduced the deferred tax asset valuation allowance by $818,000.
At the end of the second quarter we reduced the deferred tax asset
valuation allowance by another $100,000.

(d)    Critical Accounting Policies

The Company's critical accounting policies involving the more
significant judgments and assumptions used in the preparation of the
financial statements as of May 31, 2004 have remained unchanged from
November 30, 2003. These policies involve revenue recognition, inventory
valuation and income taxes. Disclosure of these critical accounting
policies is incorporated by reference under Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operation"
in our Annual report on Form 10-K for the year ended November 30, 2003.

                            Item 3

                    CONTROLS AND PROCEDURES

Senior management, including the Chief Executive Officer and the Chief
Financial Manager, evaluated the effectiveness of the Company's
disclosure controls and procedures as of the end of the period covered
by this report. Based on this evaluation process, the Chief Executive
Officer and the Chief Financial Manager concluded that the Company's
disclosure controls and procedures are effective. Since that evaluation
process was complete there have been no significant changes in
disclosure controls or in other factors that could significantly affect
these controls.

                  Part II - Other Information

ITEM 1. LEGAL PROCEEDINGS

Various legal actions and claims resulting from the ordinary 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.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At the April 22, 2004 annual meeting of shareholders, the following
directors were elected, with the following votes in favor of election:

                David R. Castle               1,848,459
                George A. Cavanaugh, Jr.      1,849,959
                James L. Koley                1,849,959
                Douglas McClellan             1,849,959
                J. Ward McConnell, Jr.        1,849,959
                Marc H. McConnell             1,849,959
                Thomas E. Buffamante          1,849,959

The shareholders also ratified the selection of McGladrey & Pullen, LLP
as independent public accountants for the year ending November 30, 2004.

                Total number of shares authorized to vote: 1,938,176
                Total number of shares voted in favor: 1,849,434
                Total number of shares voted against: 100
                Total number of abstentions: 675

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)     Exhibits:

        3.0     Certificate of Incorporation and Bylaws for Art's-Way
                Manufacturing, Inc. (incorporated by reference to Exhibit 3
                to the Annual report on form 10-K for the year ended
                May 27, 1989.

        3.1     Amendments to Bylaws of Art's-Way Manufacturing, Inc.
                adopted as of February 27th, 2004 (filed herewith).

        31.1    Certification of Chief Executive Officer under Section
                302 of the Sarbanes-Oxley Act of 2002.

        31.2    Certification of Chief Financial Manager (Principal
                Financial Officer) under Section 302 of the
                Sarbanes-Oxley Act of 2002.

        32.1    Certification of Chief Executive Officer under 18
                U.S.C. Section 1350.

        32.2    Certification of Chief Financial Manager (Principal
                Financial Officer) under 18 U.S.C. Section 1350.

                             SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                   ART'S-WAY MANUFACTURING CO., INC.

    Date:  July 14, 2004      By:   /s/ John C. Breitung
                                    John C. Breitung
                                    President and Chief Executive Officer

    Date:  July 14, 2004      By:   /s/ Carrie L. Majeski
                                    Carrie L. Majeski Chief
                                    Financial Manager
                                    (Principal Financial Officer)


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>2
<FILENAME>exhib301.txt
<TEXT>

                           Exhibit 3.1


                       AMENDMENTS TO BYLAWS
                                OF
                  ART'S-WAY MANUFACTURING CO., INC.


                            Article II

Section 12.  Meetings of Stockholders, Nominations, Business

(1)Nominations of persons for election to the Board of Directors of
the Corporation and the proposal of business to be considered by the
stockholders may be made at an annual meeting of stockholders: (a)
pursuant to the Corporation's notice at meeting; (b) by or at the
direction of the Board of Directors; or (c) by any stockholder of the
Corporation who was a stockholder of record at the time of giving of the
notice provided for in this Bylaw, who is entitled to vote at the
meeting and who complied with the notice procedures set forth in this
Bylaw.

(2)For nominations or other business to be properly brought before
an annual meeting by a stockholder pursuant to clause (c) of Subsection
(2) of this Bylaw, the stockholder must have given timely notice in
writing to the Secretary of the Corporation and it must otherwise be a
proper matter for stockholder action. To be timely, a stockholder's
notice must be delivered to the Secretary at the principal executive
offices of the Corporation not less than sixty (60) days nor more than
ninety (90) days prior to the first anniversary of the preceding year's
annual meeting; provided, however, that in the event that the date of
the annual meeting is advanced by more than thirty (30) days or delayed
by more than sixty (60) days from such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than the
ninetieth (90th) day prior to such annual meeting and not later than the
close of business on the later of the sixtieth (60th) day prior to such
annual meeting or the tenth (10th) day following the day on which public
announcement of the date of such meeting is first made. Such
stockholder's notice shall set forth: (a) as to each person whom the
stockholder proposes to nominate for election or reelection as a
director, all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
(including such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected); (b) as
to any other business that the stockholder proposes to bring before the
meeting, a brief description of the business desired to be brought
before the meeting, the reasons for conducting such business at the
meeting, and any material interest in such business of such stockholder
and the beneficial owner, if any, on whose behalf the proposal is made;
and (c) as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made, (i)
the name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner, and (ii) the class
and number of shares of the Corporation which are owned beneficially and
of record by such stockholder and such beneficial owner.

(3)Notwithstanding anything in the second sentence of Subsection
(3) of this Bylaw to the contrary, in the event that the number of
directors to be elected to the Board of Directors of the Corporation is
increased and there is no public announcement naming all of the nominees
for director or specifying the size of the increased Board of Directors
made by the Corporation at least seventy (70) days prior to the first
anniversary of the preceding year's annual meeting, a stockholder's
notice required by this Bylaw shall also be considered timely, but only
with respect to nominees for any new positions created by such
increase, if it shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of
business on the tenth (10th) day following the day on which such public
announcement is first made by the Corporation.

(4)Only such persons who are nominated in accordance with the
procedures set forth in these Bylaws shall be eligible to serve as
directors, and only such business shall be conducted at an annual
meeting of stockholders as shall have been brought before the meeting in
accordance with the procedures set forth in these Bylaws. The chairman
of the meeting shall have the power and duty to determine whether a
nomination or any business proposed to be brought before the meeting was
made in accordance with the procedures set forth in these Bylaws and, if
any proposed nomination or business is not in compliance with these
Bylaws, to declare that such defective proposed business or nomination
shall be disregarded.

(5)For purposes of these Bylaws, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service,
Associated Press, or a comparable national news service, or in a
document publicly filed by the Corporation with the Securities and
Exchange Commission pursuant to Sections 13, 14 or 15(d) of the
Exchange Act.

(6)Notwithstanding the foregoing provisions of this Bylaw, a
stockholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to
the matters set forth in this Bylaw. Nothing in this Bylaw shall be
deemed to affect any rights of stockholders to request inclusion of
proposals in the Corporation's proxy statement pursuant to Rule 14a-8
under the Exchange Act.

                            Article III

Section 14.Nominations to the Board of Directors

The Board of Directors shall appoint a Nominating Committee and a
Nominating Committee Charter. The composition and duties of the
Nominating Committee shall be as set forth in the Nominating Committee
Charter. The Nominating Committee Charter shall be in compliance with
applicable requirements of the Rules of the National Association of
Securities Dealers, Inc. ("NASD") and NASDAQ. In lieu of the appointment
of a Nominating Committee and the adoption of a Nominating Committee
Charter, the entire Board may act as a nominating committee so long as
in doing so it remains compliant with all applicable requirements of the
NASD and NASDAQ.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>3
<FILENAME>exhib311.txt
<TEXT>
                            Exhibit 31.1
                           CERTIFICATIONS

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Public Law
Number107-204) and SEC Rule 13a-14(a), the Chief Executive Officer of
the Company certifies that:

1) I have reviewed this report on Form 10-QSB of Art's-Way Manufacturing
Co., Inc.;

2) Based upon my knowledge, this report does not contain any untrue
statement of a material fact, or omit to state a material fact necessary
in order to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report;

3) Based upon my knowledge, the financial statements, and other
financial information included in this report, fairly present in all
material respects the financial condition, results of operations, and
cash flows of the Company as of, and for, the period presented in this
report;

4) The Company's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a--5(e) and 15d-15(e)) for the Company
and have:

a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the Company and its
consolidated subsidiaries is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;

b) evaluated the effectiveness of the Company's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the Company's internal control
over financial reporting that occurred during the Company's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial
reporting; and

5) The Company's other certifying officers and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the Company's auditors and the audit committee of the
Company board of directors (or persons performing equivalent functions):

a) all significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which could
adversely affect the Company's ability to record, process, summarize,
and report financial information; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal control
over financial reporting.

/s/ John C. Breitung
John C. Breitung
Chief Executive Officer
4-13-04
Date


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>4
<FILENAME>exhib312.txt
<TEXT>
                            Exhibit 31.2
                           CERTIFICATIONS

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Public Law
Number107-204) and SEC Rule 13a-14(a), the Chief Executive Officer of
the Company certifies that:

1) I have reviewed this report on Form 10-QSB of Art's-Way Manufacturing
Co., Inc.;

2) Based upon my knowledge, this report does not contain any untrue
statement of a material fact, or omit to state a material fact necessary
in order to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report;

3) Based upon my knowledge, the financial statements, and other
financial information included in this report, fairly present in all
material respects the financial condition, results of operations, and
cash flows of the Company as of, and for, the period presented in this
report;

4) The Company's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-5(e) and 15d-15(e)) for the Company
and have:

a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the Company and its
consolidated subsidiaries is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;

b) evaluated the effectiveness of the Company's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the Company's internal control
over financial reporting that occurred during the Company's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial
reporting; and

5) The Company's other certifying officers and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the Company's auditors and the audit committee of the
Company board of directors (or persons performing equivalent functions):

a) all significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which could
adversely affect the Company's ability to record, process, summarize,
and report financial information; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal control
over financial reporting.

/s/ John C. Breitung
John C. Breitung
Chief Financial Officer
4-13-04
Date


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>5
<FILENAME>exhi3212.txt
<TEXT>
                         Exhibit 32.1

           CERTIFICATION OF FINANCIAL STATEMENTS

Pursuant to 18 U.S.C.  1350, the President/Chief Executive Officer of
Art's-Way Manufacturing Co., Inc. (the "Company"), hereby certify that
this Form 10-QSB for the quarter ended February 29, 2004, and the
consolidated financial statements therein, fully comply with the
requirements of Sections 13(a) and 15(d) of the Securities Exchange Act
of 1934, and the information contained in the Form 10-QSB and the
financial statements therein fairly present, in all material respects,
the financial condition and results of operations of the Company for the
period covered by the report.


By:

/s/ John C. Breitung
Name:    John C. Breitung
President and Chief Executive Officer

Date
6-14-04










</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>6
<FILENAME>exhib322.txt
<TEXT>

                         Exhibit 32.2

            CERTIFICATION OF FINANCIAL STATEMENTS

Pursuant to 18 U.S.C.  1350, the Chief Financial Manager (Principal
Financial Officer) of Art's-Way Manufacturing Co., Inc.
(the "Company"), hereby certify that this Form 10-QSB for the
quarter ended February 29, 2004, and the consolidated financial
statements therein, fully comply with the requirements of Sections
13(a) and 15(d) of the Securities Exchange Act of 1934, and the
information contained in the Form 10-QSB and the financial statements
therein fairly present, in all material respects, the financial
condition and results of operations of the Company for the period
covered by the report.


By:

/s/ Carrie L. Majeski
Name:   Carrie L. Majeski
Chief Financial Manager
(Principal Financial Officer)

Date
6-14-04


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
