Note 10 - Acquisitions

9 Months Ended

Aug. 31, 2013

Disclosure Text Block Supplement [Abstract]

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

10)      Acquisitions

On May 10, 2012, the Company acquired the assets of Universal Harvester Co., Inc. consisting of inventory, equipment, land, building, goodwill, and intangible assets. The acquisition-date fair value of the total consideration transferred was approximately $3,066,000 consisting of $3,030,450 of cash and $35,550 of common stock. . The Company issued 5,000 shares of common stock valued at $35,550 based on the closing market price as of May 10, 2012.

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 purchase price was determined based on an arms-length negotiated value. The transaction is being accounted for under the acquisition method of accounting, with the purchase price allocated to the individual assets acquired. The purchase price allocation below is the final valuation.

The consideration has been allocated as follows:

Inventories	$	947,760
Equipment, tools and dies		364,053
Goodwill and intangible assets		618,729
Land and Building		1,136,000
Total	$	3,066,542

The unaudited pro forma information for the periods set forth below gives effect to the acquisition as if it had occurred at the beginning of fiscal year starting December 1, 2011. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time or that may result in the future:

	Three Months Ended				Nine Months Ended
	August 31, 2013		August 31, 2012		August 31, 2013		August 31, 2012
Net Sales from Continuing Operations:
As Reported	$	9,350,391	$	11,533,882	$	27,015,804	$	29,531,265
Pro Forma	$	9,350,391	$	11,533,882	$	27,015,804	$	31,785,360
Net Income from Continuing Operations:
As Reported	$	26,394	$	979,451	$	1,359,894	$	2,108,929
Pro Forma	$	26,394	$	979,451	$	1,359,894	$	2,623,389
Basic Net income per Share:
As Reported	$	0.01	$	0.24	$	0.34	$	0.52
Pro Forma	$	0.01	$	0.24	$	0.34	$	0.65
Diluted Net income per Share:
As Reported	$	0.01	$	0.24	$	0.34	$	0.52
Pro Forma	$	0.01	$	0.24	$	0.34	$	0.65
Weighted average outstanding shares used to compute basic net income per share		4,041,682		4,035,852		4,038,118		4,031,828
Weighted average outstanding shares used to compute diluted net income per share		4,057,773		4,052,246		4,050,819		4,049,236

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 (“International”), 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 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 agrees 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. Once a month, International will pay the consignor an amount equal to the cost base of the inventory sold that month.

The financial books of the operation 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 resulting cumulative translation adjustment is carried on the balance sheet and distributed among various balance sheet accounts. The Company monitors the amount of the adjustment and considers it to be immaterial.