10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

(Mark One)

[x] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended May 31, 2010

or

[ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ______ to ______

Commission File No. 0-5131

ART’S-WAY MANUFACTURING CO., INC.

(Exact name of registrant as specified in its charter)

DELAWARE	42-0920725
(State or other jurisdiction of incorporation or organization)	I.R.S. Employer Identification No.

5556 Highway 9

Armstrong, Iowa 50514

(Address of principal executive offices)

(712) 864-3131

Registrant’s telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x   No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o   No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.:

Large Accelerated filer o                                                                                                       Accelerated filer o

Non-accelerated filer o  (Do not check if a smaller reporting company)                        Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o   No x

Number of common shares outstanding as of September 16, 2010: 3,992,182

EXPLANATORY NOTE

Art’s-Way Manufacturing Co., Inc. (the “Company) is filing this Amendment No. 1 (the “Amendment”) to its Quarterly Report on Form 10-Q for the quarter ended May 31, 2010, which was originally filed with the Securities and Exchange Commission (the “Commission”) on July 13, 2010 (the “Original Filing”), for the purpose of including the Exhibit 10.3 in the Original Filing (the “Exhibit”) to include the Commitment Letter (the “Letter”) and amend and restate “Other Information” under Part II, Items 5 and 6.

Except as described above, no other changes have been made to the Original Filing.  The Original Filing continues to speak of the dates described in the Original Filing, and we have not updated the disclosures contained therein to reflect any events that occurred subsequent to such dates.  Accordingly, this Amendment should be read in conjunction with the Company’s filings made with the Commission subsequent to the filing of the Original Filing, as information in such filings may update or supersede certain information contained in this Amendment.

1

Art’s-Way Manufacturing Co., Inc.

Index

	Page No.
PART II – OTHER INFORMATION	3
Item 5. Other Information	3
Item 6. Exhibits	3
Signatures	4
Exhibit Index	5

2

PART II – OTHER INFORMATION

Item 5. Other Information

The Company has a $6,000,000 revolving line of credit with West Bank (the “Line of Credit”) which matures April 30, 2011.  The Line of Credit is renewable annually with advances funding the Company’s working capital and letter of credit needs.  The borrowing base limits advances from the Line of Credit to 60% of accounts receivable less than 90 days, plus 60% of finished goods inventory, plus 50% of raw material inventory and work-in-process inventory, as calculated at each month-end.  The Company’s obligations under the Line of Credit are evidenced by a Commitment Letter dated April 27, 2010 (the “Commitment Letter”), a Promissory Note dated June 8, 2009, as updated by the Commitment Letter, and certain other ancillary documents.

Item 6. Exhibits

See “Exhibits Index” on page 5 of this report.

3

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: October 15, 2010	By:	/s/ Carrie L. Majeski
		Carrie L. Majeski
		President, Chief Executive Officer and Principal Financial Officer

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Art’s-Way Manufacturing Co., Inc.

Exhibit Index

Form 10-Q for the Quarterly Period Ending May 31, 2010

Exhibit No.	Description
10.3	Commitment Letter from West Bank dated April 27, 2010
31.1	Certificate pursuant to 17 CFR 240 13a-14(a) – filed herewith
32.1	Certificate pursuant to 18 U.S.C. Section 1350—filed herewith

5

EX-10.3

EXHIBIT 10.3

April 27, 2010

Mr. J. Ward McConnell, Jr., Chairman

Ms. Carrie Majeski, President

Art’s-Way Manufacturing Co., Inc.

5556 Highway 9 West

P. O. Box 288

Armstrong, IA  50514

Re:           Line of Credit Commitment Letter

Dear Ward and Carrie:

We are pleased to inform you that West Bank (“Bank”) commits to renew your line of credit in the amount of $6,000,000 to Art’s-Way Manufacturing Company, Inc. and all affiliated entities (“Borrower”) to provide working capital financing under the following terms and conditions:

FACILITY/PURPOSE: $6,000,000 Revolving Line of Credit with advances funding the working capital, letter of credit, and corporate credit card needs of Borrowers.

MATURITY DATES:   April 30, 2010

INTEREST RATES/FEES: The Bank's Prime Interest Rate (presently 3.25%) adjusted daily with an interest rate floor or minimum rate of 4.00%.

PAYMENT SCHEDULE: Monthly interest only payments shall be required.  All remaining unpaid principal and interest shall be due on the maturity date of April 30, 2011

COLLATERAL: First and paramount security and mortgage interests in all assets owned by the Borrower and all subsidiary companies including, but not limited to cash, inventory, accounts, accounts receivable, equipment, and real estate.

OTHER TERMS AND CONDITIONS:

1)   Borrowers agree to provide the Bank with the following financial reports:

a)   A monthly internally prepared balance sheet, income statements, accounts receivable aging schedules, and borrowing base certificates.  The borrowing bases shall limit the advances from Facility #1 to 60% of accounts receivable less than 90 days plus 60% of finished goods inventory and 50% of raw material inventories and work-in-process and shall be delivered within 30 days of each month end.

b)   CPA-prepared audited financial statement at the conclusion of Borrowers’ fiscal year-end.

2)   Borrowers agree to maintain a minimum debt service coverage ratio (measured at the conclusion of Borrower’s year-end) of 1.5 times.  This ratio is calculated by dividing net income plus all non-cash charges by current maturities of long-term debt.

3)   Borrowers shall maintain primary deposit accounts and credit card accounts at West Bank.

4)   Borrowers agree to maintain a maximum debt/tangible net worth ratio of 1.25 times and a minimum tangible net worth of $12,000,000 by the November 30, 2009 fiscal year-end.

5)   Borrower agrees to seek approval from the Bank prior to acquiring any new companies that would be included as affiliate or subsidiary entities of Borrower.

6)   The Borrower agrees to limit capital expenditures to $500,000 each fiscal year without prior written consent from the Bank excluding the building addition completed in 2009 and the planned roof replacement to be completed in 2009.

7)   The aforementioned financial covenants and reporting also govern all existing long-term notes presently provided by Bank to Borrower.

We appreciate the opportunity to provide this commitment for your consideration.  Please sign one copy of this letter where indicated below and return it to the Bank on or before May 7, 2010 at which time this commitment shall expire unless otherwise extended in writing by the Bank.  The terms of this financing proposal are not to be shared with anyone other than the CPA, attorney, Board, or management team of the Borrower(s).

Please contact me at (515) 222-2322 with remaining questions or issues.

Sincerely,

Kevin J. Smith

Sr. Vice President

We accept the aforementioned terms of this commitment letter this 30 day of April, 2010.

ART’S-WAY MANUFACTURING CO., INC.

BY:      /s/ J. Ward McConnell, Jr.                                                                                   BY: Carrie Majeski

J. Ward McConnell, Jr., Chairman                                                                      Carrie Majeski, President

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO 17 CFR 240.13(a)-14(a)

(SECTION 302 CERTIFICATION)

I, Carrie L. Majeski, certify that:

1. I have reviewed this quarterly report on Form 10-Q/A of Art’s-Way Manufacturing Co., Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary 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. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

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

b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my 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

d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

4. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’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 registrant’s internal control over financial reporting.

Date: October 15, 2010	/s/ Carrie L. Majeski,
	Carrie L. Majeski, President, Chief Executive Officer
	(principal executive and financial officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q/A of Art’s-Way Manufacturing Co., Inc. (the “Company”) for the quarter ended May 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Carrie L. Majeski, as the President, Chief Executive Officer and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 15, 2010	/s/ Carrie L. Majeski
	Carrie L. Majeski, President, Chief Executive Officer
	(principal executive and financial officer)