UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) June 7, 2007
ART'S-WAY MANUFACTURING CO., INC.
(Exact Name of Registrant As Specified In Its Charter)
Delaware
State or Other Jurisdiction of Incorporation
0-05131 42-0920725
(Commission (IRS Employer
File No.) Identification Number)
P.O. Box 288
Armstrong, Iowa 50514
(Address of Principal Executive Offices) (Zip Code)
(712) 864-3131
(Registrant's Telephone Number Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instructions A.2 below):
___ Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
___ Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
___ Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
___ Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CRF 240.13e-4 (c))
Form 8-K
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Effective June 7, 2007, the Company entered into two new credit
facilities with West Bank of Des Moines, Iowa. Below are brief
descriptions of these facilities and other terms and conditions material
to the Company.
The Company has a $3.5 million revolving line of credit with advances
funding working capital, letter of credit and corporate credit card
needs. The line matures on April 30, 2008 and bears interest at the
bank's prime rate as adjusted daily (presently 8.25%). Monthly interest
only payments are required with unpaid principal and interest due at
maturity. Borrowing bases limit the advances on the first facility to
60% of accounts receivable less than 90 days plus 60% of t finished
goods inventory and 50% of raw material inventories and work-in-process.
The Company received a loan in the amount of $4.1 million in long-term
debt to refinance existing long-term debt originally incurred in
connection with the purchase of real estate and equipment, the purchases
of the assets of Obeco, Inc., Vessel Systems, Inc., and equipment. The
loan matures on May 1, 2017 and bears interest at the U.S. daily 5-year
treasury index (presently 4.16%) plus 2.75 bps fixed for 5 years and then
adjusted to the prevailing same index and margin on the sixth
anniversary of the loan for the balance of the term. For the first five
years the interest is capped at 7.25%. Monthly principal and interest
payments in the amount of $42,500 are required.
Both facilities are secured by first mortgage interest in all
assets of the Company and its subsidiaries, including cash, inventory,
accounts, accounts receivable, equipment and real estate. The Company
must provide the bank with monthly financial reports and audited annual
financial reports and must maintain a minimum debt service coverage,
maximum debt/tangible net worth and minimum tangible net worth ratios.
The Company must also maintain primary deposit accounts and credit card
accounts with the bank.
SIGNATURE
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 hereunto duly authorized.
ART'S-WAY MANUFACTURING CO., INC.
Date: June 13, 2007 By: /s/ Carrie L. Majeski
Carrie L. Majeski
Chief Financial Officer