SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON D.C.   20549

                                 FORM 10-K

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

                For the Fiscal Year Ended November 30, 2003
                       Commission File No. 0-5131

                    ART'S-WAY MANUFACTURING CO., INC.

          	DELAWARE	                  42-0920725

	 State of Incorporation  	I.R.S. Employee Identification No.

	   Armstrong, Iowa        	             50514

  Address of principal executive offices            Zip Code

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

       Securities registered pursuant to Section 12(b) of the Act: None

         Securities registered pursuant to Section 12(g) of the Act:

                        Common stock $.01 par value

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, and (2) has been subject to such
filing for the past 90 days.  Yes  X      No

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or informational
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this form 10-K.  [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2).  Yes        No  X

Aggregate market value of the voting stock held by non-affiliates of the
Registrant on May 31, 2003, end of second fiscal quarter:  $ 4,069,156

Number of common shares outstanding on February 3, 2004:  1,938,176


DOCUMENTS INCORPORATED BY REFERENCE: Portions of the Proxy Statement for the
Registrant's 2004 Annual Meeting of Stockholders to be filed within 120 days
of November 30, 2003 are incorporated by reference into Part III.


                       Art's-Way Manufacturing Co., Inc.

                          Index to Annual Report
                              on Form 10-K

                                                               Page
Part I

Item 1 - Description of Business	                     3 thru 6

Item 2 - Properties	                                         5

Item 3 - Legal Proceedings	                                 6

Item 4 - Submission of Matters to a Vote of Security Holders     6

Part II

Item 5 - Market for the Registrant's Common Stock and Related
         Security Holder Matters                               	 7

Item 6 - Selected Financial Statement Data	                 8

Item 7 - Management's Discussion and Analysis of Financial
         Condition and Results of Operations  	              8 thru 13

Item 7A Quantitative and Qualitative Disclosures About
        Market Risk                                     	13

Item 8 - Financial Statements and Supplemental Data	        13

Item 9 - Changes in and Disagreements with Accountants on	14
             Accounting and Financial Disclosure

Item 9A Controls and Procedures       	                        14

Part III

Item 10 - Directors and Executive Officers of the Registrant	15

Item 11 - Executive Compensation	                        15

Item 12 - Security Ownership of Certain Beneficial Owners and 	15
               Management

Item 13 - Certain Relationships and Related Transactions	15

Item 14 - Principal Accountant Fees and Services	        15

Part IV

Item 16 - Exhibits, Financial Statement Schedules          16 thru 17
          and Reports on Form 8-K


                               PART I

Item 1.   Description of Business

	(a)   General Development of Business

Art's-Way Manufacturing Co., Inc. (the "Company" or "Art's-Way") began
operations as a farm equipment manufacturer in 1956.  Its manufacturing plant
is located in Armstrong, Iowa.

On July 28, 2003, the Company purchased the assets of Obeco, Inc.; a
manufacturer of steel truck bodies located in Cherokee, Iowa and changed the
name to Cherokee Truck Bodies, Inc.  The purchase included all inventory,
intellectual materials, machinery, tooling, fixtures and the company name.
The Company also acquired the real estate loan.

On October 9, 2003, Art's-Way entered into an agreement with Case Corporation
for an exclusive license to produce and market moldboard plows and service
parts.

(b)  Recent Events

None

(c)   Financial Information About Industry Segments

In accordance with accounting principles generally accepted in the United
States of America, Art's-Way has only one industry segment, metal
fabrication.

(d)   Narrative Description of Business

The Company manufactures specialized farm machinery under its own and private
labels and steel truck bodies under the label of Cherokee Truck Bodies.

Equipment manufactured by the Company under its own label includes: portable
and stationary animal feed processing equipment and related attachments used
to mill and mix feed grains into custom animal feed rations; a high bulk
mixing wagon to mix animal feeds containing silage, hay, and grain; a line
of mowers and stalk shredders; sugar beet and potato harvesting equipment;
and a line of land maintenance equipment, edible bean equipment, and grain
drill equipment.

Starting in fiscal 2004, the Company will manufacture moldboard plows under
its own label as per a license agreement with Case Corporation.  Prior to
fiscal 2004, the moldboard plow was under a private label.

Private label manufacturing of farm equipment accounted for 24%, 26%, and 30%
of total sales for the years ended November 30, 2003, 2002, and 2001,
respectively.

Art's-Way labeled products are sold by farm equipment dealers throughout the
United States.  There is no contractual relationship with these dealers to
distribute Art's-Way products, and dealers may sell a competitor's product
line.

Automotive and other dealers throughout the United States sell Cherokee Truck
Bodies labeled products.

Raw materials are acquired from domestic sources and normally are readily
available.

The Company maintains manufacturing rights on several of its products
covering unique aspects of design and has trademarks covering product
identification.

The Company pays royalties for use of certain manufacturing rights.  In the
opinion of the Company, its trademarks and licenses are of value in securing
and retaining business.

Sales of the Company's agricultural products are seasonal; however, through
the development of mowers, shredders and beet harvesting machinery coupled
with private labeled products, the impact of seasonality has been decreased
because the peak periods occur at different times.  The Company, similar to
other manufacturers in the farm equipment industry, is affected by factors
peculiar to the farm equipment field, including items such as fluctuations
in farm income resulting from the change in commodity prices, crop damage
caused by weather and insects, government farm programs, and other
unpredictable variables such as interest rates.

Sales of truck bodies are usually not seasonal, but are affected by the cold
months of winter when sales do decrease.

The Company has an OEM supplier agreement with Case New Holland, Inc. (CNH).
Under the OEM agreement the Company has agreed to supply CNH's requirements
for certain feed processing, tillage equipment, and service parts under CNH's
label.  The agreement has no minimum requirements and can be cancelled upon
certain conditions.   For the years ended November 30, 2003, 2002, and 2001,
sales to Case aggregated approximately 17%, 17%, and 20% of total sales,
respectively.

The Company had sales to one major dealership of approximately $1,399,000
during fiscal year 2003, or approximately 12% of total sales.  Accounts
receivable from this customer are unsecured.

The feed processing products, including private labeled units, compete with
similar products of many other manufacturers.  There are estimated to be more
than 15 competitors producing similar products, although total market
statistics are not available.  The Company's products are competitively
priced with greater diversity than most competitor product lines.  Beet
harvesting equipment is manufactured by three companies that have a
significant impact on the market.  The Company's share of this market is
estimated to be about 45%.  Other products such as mowers, shredders, and
grain drills are manufactured by approximately 20 other companies; however,
the Company believes its products are competitively priced with above average
quality and performance, in a market where price, product performance, and
quality are principal elements.

Another important part of the Company's business is 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.

The backlog of orders on February 3, 2004 was approximately $2,212,000
compared to approximately $3,693,000 a year ago.  The approximate order
backlog for Art's-Way is $2,138,000 and Cherokee Truck Bodies is $74,000.
The reduction in order backlog is primarily an issue of timing.  The backlog
of 2003 contained our OEM Blower dollars that were completed and invoiced by
the end of January 2004.  This represented $561,000 of backlog that was
completed in January of 2004 verses February of 2003.  The sugar beet
harvester and defoliator early order program represents approximately
$1,600,000 that will fall into our backlog in mid February 2004 that was
represented in the February 2003 backlog.

The Company currently does no business with any local, state, or federal
government agencies.

The Company is engaged in experimental work on a continual basis to
improve the present products and create new products. Research costs for
the current fiscal year were primarily expended on the continuing
development of beet harvesting equipment and the grinder mixer. All
research costs are expensed as incurred. Such costs include engineering
and other expenses and approximated $417,000, $12,000, and $125,000 for
the years ended November 30, 2003, 2002, and 2001, respectively. (See
also note 1 to the Financial Statements).

The Company is subject to various federal, state and local laws and
regulations pertaining to environmental protection and the discharge of
materials into the environment.  Art's-Way is in the process of purchasing
and installing a different paint system. This paint system will be located
in a new location within the plant.  The Company is obtaining permits that
will allow it to change the paint system and remain in compliance with
the laws and regulations.

During the year ended November 30, 2003, the Company had peak employment of
107 full-time and 12 part-time employees, of which 94 were factory and
production employees, 2 were engineers and engineering draftsman, 13 were
administrative employees, and 3 were in sales and sales management.
Employee levels tended to fluctuate based upon the seasonality of the
product line.

The Company's employees are not unionized.  There has been no work stoppage
in the Company's history and no stoppage is, or has been, threatened.  The
Company believes its relationship with its employees is good.

(e)   Financial Information about Foreign and Domestic Operation and Export
Sales

The Company has no foreign operations.  Its export sales, primarily to
Canada and Denmark, accounted for less than 1% of sales and less than 1% of
operating income (loss) in the years ended November 30, 2003, 2002 and 2001.

Item 2.  Properties

The existing executive offices, production, and warehousing facilities of
Art's-Way are built of hollow clay block/concrete and contain approximately
240,000 square feet of usable space.  Most of these facilities have been
constructed since 1965 and are in good condition.  The Company owns
approximately 127 acres of land west of Armstrong, Iowa, which includes the
factory and inventory storage space.  The Company currently leases excess
land to third parties for farming.

Cherokee Truck Bodies is located in rented property on the northeast edge
of Cherokee, Iowa on approximately 17 acres.  The plant consists of one
building, built in 1979-80, containing 42,000 square feet of production and
3,000 square feet of office space.  Cherokee Truck Bodies holds the real
estate mortgage on this property.

Item 3.  Legal Proceedings

The Company from time to time is a party to various legal actions arising
in the normal course of business.  The Company believes that there is no
threatened or pending proceedings against the Company that if determined
adversely, would have a material adverse effect on the business or
financial position of the Company.

Item 4.  Submission of Matters to a Vote of Security Holders

	Not Applicable.

                           PART II

Item 5.  Market for the Registrant's Common Stock and Related Security
Holder Matters

(a)   Price Range of Common Stock
                                  Per Common Stock Bid Prices by Quarter
                        	     Year ended	          Year ended
		                 November 30, 2003     November 30, 2002
	                           High	    Low	         High	  Low
	First Quarter	           3.980    2.700	 2.200	  1.620
	Second Quarter	           4.100    3.400	 3.450	  2.050
	Third Quarter              5.240    3.700   	 3.300	  2.250
	Fourth Quarter	           5.250    4.400	 4.970	  2.750

The Common Stock trades on The NASDAQ Small Cap Stock Market under the
symbol ARTW.  The range of closing bid prices shown above are as reported
by the Small Cap NASDAQ.  The quotations shown reflect inter-dealer prices,
without retail mark-up, mark-down, or commission and may not necessarily
represent actual transactions.

(b) Approximate Number of Equity Security Holders

	                    Approximate number of
  Title of Class	    Round Lot Shareholders as of February 6, 2004
Common Stock, $.01
Par Value                                      404

(c)   Dividend Policy

Holders of Common Stock of the Company are entitled to a pro rata share of
any dividends as may be	declared, from time to time, from funds available
and to share pro rata in any such distributions available for holders of
Common Stock upon liquidation of the Company.  The Company has not paid a
dividend during the past five years, and future dividend payments are
restricted by its loan covenants.

(d) Equity Compensation Plan Information

        Number of securities     Weighted-average      Number of securities
        to be issued upon        exercise price of     remaining available
        exercise of outstanding  Outstanding options,  for future issuance
        options, warrants        Warrants and rights   under equity
        and rights                                     compensation plans
                                                       (excluding securities
                                                       reflected in
                                                       columns (a))
Plan Category

Equity compensation (a)                  (b)                   (c)
plans approved by
security holders    45,000	         $2.736               20,000
Equity compensation
plans not approved
by security holders   -                                          -
Total	            45,000		                      20,000

Item 6.  Selected Financial Statement Data

The following tables set forth certain information concerning the Statements
of Operations and Balance Sheets of the Company and should be read in
conjunction with the Financial Statements and the notes thereto appearing
elsewhere in this Report.

(a)   Selected Statement of Operations Data (In Thousands of Dollars, Except
Per Share Amounts)

                    Year       Year         Year          Year        Year
                    Ended      Ended        Ended         Ended       Ended
                   November   November    November        November   November
                   30, 2003   30, 2002    30, 2001       30, 2000    30, 1999
Net Sales	   $11,411    $10,900	  $  10,891	$  14,229    $ 17,227
Net Income (Loss)  $ 1,664    $   569	  $ (2,382)	$  (2,166)   $   (630)
Net Income (Loss)
Per Share
Basic	          $    .86    $   .31	  $  (1.86)	$   (1.72)   $   (.50)
Diluted 	  $    .85    $   .31     $  (1.86)	$   (1.72)   $   (.50)
Common Shares
and Equivalents
Outstanding:
Basic	          1,938,176  1,808,423	  1,279,613	1,256,351    1,248,456
Diluted           1,954,408  1,811,439    1,279,613	1,256,351    1,248,456

(a)   Selected Balance Sheet Data (In Thousands of Dollars, Except
Per Share Amounts)


                       November  November   November   November    November
                       30, 2003  30, 2002   30, 2001   30, 2000    30, 1999
Total Assets	        $7,962	  $5,921     $ 6,755   $10,707     $15,078
Current Liabilities	$1,018	  $2,080     $ 4,719   $ 6,308	   $ 8,438
Long-Term Debt  	$1,972	  $  521     $   272   $   345     $   420
Total Debt
Current and Long-Term	$2,150	  $1,197     $ 3,308   $ 4,252	   $ 5,709
Other Long-Term
Obligations           	$  175	  $  187         -         -	       -
Dividends Per Share	$  .00    $  .00     $   .00	$  .00	   $   .00



Item 7.   Management's Discussion and Analysis of Financial Condition and
Results of Operations

The following Management's Discussion and Analysis of Financial Condition
and Results of Operations may be deemed to include forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended, that
involve risk and uncertainty.  Although the Company believes that its
expectations are based on reasonable assumptions, it can give no assurance
that its expectations will be achieved.  The important factors that could
cause actual results to differ materially from those in the forward-looking
statements below ("Cautionary Statements") include the Company's degree of
financial leverage, the factors described in Item 1(a and b) of this report,
risks associated with acquisitions and in the integration thereof, risks
associated with supplier/OEM agreements, dependence upon the farm economy
and the impact of competitive services and pricing, as well as other risks
referenced from time to time in the Company's filings with the SEC.  All
subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the Cautionary Statements.  The Company does not undertake any
obligation to release publicly any revisions to such forward-looking
statements to reflect events or circumstances after the date of this report
or to reflect the occurrence of unanticipated events.

The following discussion and analysis of financial condition and results of
operations of the Company are based on the Financial Statements and the notes
thereto included herein.

(a) and (b) Liquidity and Capital Resources

Twelve months ended November 30, 2003

The Company's main sources of funds were obtained from long-term financing
and improved profitability.  Funds from long-term financing were used to
payoff existing debt, with the balance used towards working capital.

The positive cash flow from operations were used for the acquisition of the
assets of Obeco, Inc. and its real estate loan.  Capital expenditures for
the year ended November 30, 2003 were $218,000.

Twelve months ended November 30, 2002

The Company's main source of funds was from the $800,000 sale of stock, along
with the reduction in accounts receivable and inventory. The reduction in
accounts receivable can be attributed to the increased effort and efficiency
of the Company's collection practices. The reduction in inventories resulted
from building products to sold orders and the Company's concentrated efforts
to reduce inventory levels.

The positive cash flow from operations of $1,525,000 and $586,000 from sale
of stock were primarily used to reduce bank loans by $2,111,000. Capital
expenditures for the year ended November 30, 2002 were $142,000.

Twelve months ended November 30, 2001

The Company's main source of funds was from a reduction in accounts
receivable and inventories.  The reduction in accounts receivable resulted
primarily from the lower sales volume.  The reduction in inventories
resulted from a combination of lower production activity necessitated by
lower volume and an inventory writedown following an auction conducted in
November 2001 to sell excess and obsolete inventory.

The positive cash flow from operations was used in part to reduce bank loans
by $944,000.  Capital 	expenditures for the year ended November 30, 2001
were $59,000.

Capital Resources

On April 25, 2003 the Company obtained long-term financing through West Bank.
Credit facilities consist 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 matures on February 28, 2004. On February 17, 2004 the revolving line of
credit was renewed and matures 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.  In addition, an annual fee of $12,500 is paid for the use of this
credit facility.  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 November 30, 2003, 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.  Maturity date is March 31, 2023.  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,
at which time the loan matures.  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.

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 to be paid
monthly.  Guarantee fee payments to Mr. McConnell were approximately $26,000,
none and none for the years ended November 30, 2003, 2002, and 2001,
respectively.

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 shall 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, but are not limited to, 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 payoff UPS Capital 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 Company's current ratio and its working capital are as shown in the
following table:

		  November 30, 2003    November 30, 2002    November 30, 2001
Current Assets 	     $5,565,838	           $4,340,395          $5,295,583
Current Liabilities   1,018,055	            2,080,111	        4,718,551
Working Capital      $4,547,783	           $2,260,284	       $  577,032

Current Ratio	         5.5	               2.1                  1.1

(c) Results of Operations

Twelve months ended November 30, 2003 compared to the twelve months ended
November 30, 2002

Art's-Way's revenue of $10,940,000 for 2003 combined with Cherokee Truck
Bodies revenue of $471,000 for the 4 months of operation during 2003
increased revenue by 4.7% when compared to $10,900,000 for 2002.
Art's-Way's branded products increased by $160,000 while OEM sales
decreased by $120,000. The farm economy still remained weak during 2003.
The sales of feed processing equipment and land maintenance equipment
are down 17% and 14%, respectively. However, sugar beet and potato
harvesting equipment are up 23%. Mowers, stalk shredders and grain drill
equipment demand is higher than a year ago and replacement parts sales
remain strong. Gross profit, as a percent of sales was 30% for 2003
compared to 25% for 2002. The agricultural markets we serve are
generally forecasted to remain depressed in 2004, yet we anticipate that
our sales and profits for 2004 will generally equal the sales and profit
numbers demonstrated for 2003. The sales and profits from our
acquisition of Cherokee Truck Bodies will modestly improve our total sales
and profit performance for 2004.

Operating expenses in 2003 increased $366,000 from 2002.  As a percent of
sales, operating expenses were 19% and 18%, respectively, when comparing 2003
and 2002.  The Company put into the field new prototype sugar beet harvesters
with the introduction of the industry's first 12 row harvesting capability.
The Company also invested in a major revision to the grinder mixer product
offering by increasing capacity and reducing the feed batch cycle time by 50%.
The increase of engineering expenses for 2003 of $306,000 compared to 2002
allows the Company new product offerings for 2004 and continued improvements
in revenue and earnings.  Selling expenses also increased $134,000 for 2003
from 2002.  The company has attended many more farm and industry trade shows
during the year to regain visibility of Art's-Way branded products.  The
Company has increased the sales force for both Art's-Way and Cherokee Truck
Bodies.  The added sales force will represent new regions and increased sales.
General and administrative expenses decreased by $74,000 due to cost
reduction programs.

The Company experienced a 22% decline in interest and other expenses in 2003
compared to 2002.  By completing a long-term financing package in early 2003
with West Bank, the Company has been able to decrease payments combined with
lower interest rates.  The new loan agreement along with the USDA guarantee
allowed a secured position for West Bank and the Company to be in compliance.

Income before income tax was $290,000 higher than 2002 representing a 51%
increase.  The recording of a deferred tax benefit resulted in a total tax
benefit for 2003 of $801,000, raising net income to $1,644,000.

Twelve months ended November 30, 2002 compared to the twelve months ended
November 30, 2001

Revenues of $10,900,000 for 2002 were comparable to 2001 revenues of
$10,891,000.  The Company recorded a net profit of $569,000 ($.31 per
share) in 2002 compared to a net loss of $2,382,000 ($1.86 per share) in
2001.  Revenue from Art's-Way branded products increased 3% while OEM sales
decreased 10%. Although there is a continuing weakness in the farm economy,
the demand for beet equipment increased as a result of higher beet prices.
Sales for our feed processing and land maintenance equipment are above
expectations and replacement parts sales remain strong.

Gross profit, as a percent of sales was 25% for 2002 compared to 5% for
2001.  As is shown on the statement of operations for 2001, the Company
experienced losses from disposition of excess and obsolete inventory of
$1,082,000 and an asset impairment writedown on tooling related to product
lines that have been abandoned of $547,000.  The gross profit, as a percent
of sales for 2001 would have been 19%, had these two losses not occurred.
Further cost cutting programs increased gross profit by $639,000 for 2002
as compared to 2001.

Operating expenses in 2002 decreased $441,000 from 2001.   As a percent of
sales, operating expenses were 18% and 22%, respectively, when comparing
2002 and 2001. Engineering expenses were $204,000 lower than in 2001 due
to cost reduction programs. Selling expenses increased $23,000 in 2002 as
a result of higher commissions and increased sales force when compared to
2001.

Other expenses decreased $173,000 in 2002 versus 2001.  This was a result
of lower bank borrowings combined with prime interest rate reductions.

Utilization of Deferred Tax Assets

The Company had established a deferred tax asset valuation allowance of
approximately $1,913,000 at November 30, 2002, due to the uncertainty of
realizing its deferred tax assets.  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.  At year end November 30,
2003, the Company reduced the deferred tax assets valuation allowance by
$818,000 because management believes it is more likely than not that this
portion will be realized as a quarter and year end adjustment.

For tax purposes, the Company has available at November 30, 2003, net
operating loss carryforwards of approximately $2,600,000 which will begin
to expire in the year 2013.  The Company also has approximately $118,000
of research and development credits and $42,000 of state tax credits which
begin to expire in the years 2007 and 2008, respectively.

(d)  Critical Accounting Policies

The Company has identified the following accounting policies as critical
to their operations.

Revenue Recognition - Revenue from sales of products is recognized when
risk of ownership and title pass to the buyer.

Inventory Valuation - Inventories are stated at the lower of cost or market,
and cost is determined using the first-in, first-out (FIFO) 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 writedowns to market based on expected usage
information for raw materials and historical selling trends for finished
goods.  Writedowns of inventory create a new cost basis.  Additional
writedowns may be necessary if the assumptions made by management do not
occur.  The Company has classified inventories not expected to be consumed
in its manufacturing process or its parts fulfillment business within the
Company's normal operating cycle as a non-current asset in the accompanying
balance sheets.

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
is 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.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to market risk primarily from changes in interest
rates associated with the variable rates on its debt and its accounts
receivable financing.

Item 8.  Financial Statements and Supplemental Data

Selected Quarterly Financial Data
(Unaudited) (all figures in thousands of dollars except per share amounts)

Quarter ending		        Feb 28     May 31     Aug 31 	Nov 30
2003
Revenues		        $2,509	    2,433      3,726	 2,743
Gross Profit			   638	      798      1,020	   920
Income from Operations		   139	      303        379	   220
Interest and Other Expense	    24	       41         56        57
Income before Taxes		   115	      262        323	   163
Income Tax Expense (Benefit)         2         -          -       (803)
Net Income 			   113	      262	 323	   966
Income per Share	       $  0.06	     0.14	0.17	  0.50

2002
Revenues		       $ 2,642      2,253	3,227    2,778
Gross Profit			   571	      642         847	   710
Income from Operations		    26	       96         335	   345
Interest and Other Expense	    75	       66          69	    19
Income (Loss) before Taxes	   (49)	       30         265	   327
Income Tax Expense                  -          -           -         4
Net Income (Loss) 		   (49)	       30	  265	   323
Income (Loss) per Share	       $ (0.03)	     0.02	 0.14	  0.18

2001
Revenues		       $ 2,990	     2,410       2,615   2,876
Gross Profit (Loss)		   474	       637	   513	(1,130)
Income (Loss) from Operations	 (112)	        84	    11	(1,898)
Interest and Other (Income)
Expense	                          175	       128	   113	   (14)
Loss before Taxes		 (287)	       (44)	  (102)	(1,884)
Income Tax Expense		   -   	        -  	     -      65
Net Loss 			 (287)	       (44)	  (102)	(1,949)
Loss per Share		      $ (0.23)	     (0.04)	 (0.08)	 (1.50)

The information appearing on pages F1 through F19 is incorporated herein
by reference.

Item 9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

On March 5, 2003, Art's-Way Manufacturing Co., Inc dismissed KPMG LLP
("KPMG") as the Company's principal accountants and engaged McGladrey &
Pullen, LLP as the principal accountants.  The decision to change principal
accountants was recommended by the Audit Committee and approved by the
Board of Directors.

In connection with the audits of the two fiscal years ended November 30, 2002,
and 2001, and the subsequent interim period through March 5, 2003, there were
no disagreements with KPMG on any matter of accounting principles or
practices, financial statement disclosure or an auditing scope or procedure,
which disagreement, if not resolved to KPMG's satisfaction, would have caused
KPMG to make reference to the subject matter of the disagreement in
connection with its reports.

The audit reports of KPMG on the financial statements of the Company as of
and for the years ended November 30, 2002 and 2001 did not contain an adverse
opinion or disclaimer of opinion, nor were the reports qualified or modified
as to audit scope or accounting principles.

On March 5, 2003 the Company engaged McGladrey & Pullen, LLP as the Company's
new principal accountants for the fiscal year 2003.  The Registrant did not
consult with McGladrey & Pullen LLP regarding any matters prior to its
engagement.

Item 9A. Controls and Procedures

As of the end of the period covered by this report, an evaluation was
performed under the supervision and with the participation of the
Company's Chief Executive Officer and Chief Financial Officer of the
effectiveness of the Company's disclosure controls and procedures
(as defined in Exchange Act Rule240.13a-15(e)).  Based on that
evaluation, the Chief Executive Officer and the Chief Financial
Officer has concluded that the Company's current disclosure controls
and procedures are effective to ensure that information required to be
disclosed by the Company in the reports that it files or
submits under the Security Exchange Act of 1934 is recorded, processed,
summarized and reported, within the time periods specified in the Securities
and Exchange Commission's rules and forms.

There were no changes in the Company's internal control over financial
reporting that occurred during the period covered by this report that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.

                                 PART III

Item 10.   Directors and Executive Officers

The information required by Item 10 is incorporated by reference from the
definitive Proxy Statement to be filed pursuant to Regulation 14A within 120
days after November 30, 2003 and is included as Exhibit 99.1 hereto and
incorporated herein by this reference.

The Company does not have an audit committee financial expert serving on
its Audit Committee. The Board of Directors believes that, at this time,
the three members of the Audit Committee collectively have all of the
attributes of a financial expert as set forth in Item 401(h) to
Regulation S-K except experience in preparing and auditing financial
statements. The Board of Directors believes that the experience and
financial attributes possessed by the existing Audit Committee Members
is sufficient to fulfill all of the requirements and duties set forth in
the Audit Committee Charter. The Company has adopted a Code of Ethics
that applies to the Company's principal executive officer, principal
financial officer, principal accounting officer or controller. The Code
of Ethics is contained as Exhibit 14 referenced in Item 15 of this Form
10-K.

Item 11.  Executive Compensation

The information required by Item 11 is incorporated by reference from the
definitive Proxy Statement to be filed pursuant to Regulation 14A within 120
days after November 30, 2003 and is included as Exhibit 99.1 hereto and
incorporated herein by this reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

The information required by Item 12 is incorporated by reference from the
definitive Proxy Statement to be filed pursuant to Regulation 14A within 120
days after November 30, 2003 and is included as Exhibit 99.1 hereto and
incorporated herein by this reference.

Item 13.  Certain Relationships and Related Transactions

The information required by Item 13 is incorporated by reference from the
definitive Proxy Statement to be filed pursuant to Regulation 14A within 120
days after November 30, 2003 and is included as Exhibit 99.1 hereto and
incorporated herein by this reference.

Item 14.  Principal Accountant Fees and Services

The information required by Item 14 is incorporated by reference from the
definitive Proxy Statement to be filed pursuant to Regulation 14A within 120
days after November 30, 2003 and is included as Exhibit 99.1 hereto and
incorporated herein by this reference.

                           PART IV

Item 15.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K:

(a)   Index to Financial Statements and Schedules

See index to financial statements and supporting schedules on page F-1.

(b)   Reports on Form 8-K

No current Reports on Form 8-K have been filed during the last fiscal quarter
of the period covered by this Report.

(c)   Index to Exhibits

Any exhibits filed with the Securities and Exchange Commission will be
supplied upon written request to John C. Breitung, President, Art's-Way
Manufacturing Co., Inc., Highway 9 West, Armstrong, Iowa 50514.  A charge
will be made to cover copying costs.  See Exhibit Index below.

Exhibits Required to be Filed

Number	Exhibit Description

2	Agreement and Plan of Merger for Reincorporation of Company in
        Delaware. Incorporated by reference to Exhibit 2 of Annual Report on
        Form 10-K for the year ended May 27, 1989.
3	Certificate of Incorporation and By-laws for Art's-Way Manufacturing
        Co., Inc.  Incorporated by reference to Exhibit 3 of Annual Report on
         Form 10-K for the year ended May 27, 1989.
10	Incorporated by reference are the Material Contracts filed as Exhibit
        10 of the Annual Report on Form 10-K for the fiscal year ended May 30,
        1981.
10.1	Art's-Way Manufacturing Co., Inc. 401 (k) Savings Plan.  Incorporated
        by reference to Exhibit 28 (a) to the Art's-Way Manufacturing Co.,
        Inc.  Registration Statement on Form S-8 filed on October 23, 1992.
10.2	Art's-Way Manufacturing Co., Inc. Employee Stock Option Plan (1991).
        Incorporated by reference to Exhibit "A" to Proxy Statement for Annual
        Meeting of Stockholders held on October 15, 1991.
10.3.1	Art's-Way Manufacturing Co., Inc. Director Stock Option Plan (2001).
        Incorporated by reference as Exhibit 10.3.1 of the Annual Report on
        Form 10-K for the fiscal year ended November 30, 2002.
10.4	Asset Purchase Agreement between the Company and J. Ward McConnell,
        Jr., and Logan Harvesters, Inc.  Incorporated by reference to Current
        Report on Form 8-K dated September 6, 1996.
10.5	Agreement dated February 12, 2002 between the Company and J. Ward
        McConnell, Jr., purchase of 640,000 shares of common stock.
        Incorporated by reference to Current Report on Form 8-K filed February
        22, 2002.
10.6	Forbearance Agreement and Fifteenth Amendment to Loan and Security
        Agreement dated January 31, 2003 between the Company and UPS Capital
        Corporation.  Incorporated by reference to Current Report on Form 10-Q
        filed on April 14, 2003.
10.7	Long-term Financing Agreement dated April 25, 2003 between the Company
        and West Des Moines State Bank.  Incorporated by reference to Current
        Report on Form 10-Q filed on July 15, 2003.
10.8	Asset Purchase Agreement between the Company and Obeco Truck Body, Inc.
        Incorporated by reference to Current report on Form 10-Q filed on
        October 16, 2003.
14      Code of Ethics
23.1    Consent of McGladrey & Pullen, LLP
23.2    Consent of KPMG LLP
31.1    Certification of Chief Executive Officer under the Section 302 of the
        Sarbanes-Oxley Act of 2002.
31.2    Certification of Chief Financial Officer under the Section 302 of the
        Sabanes-Oxley Act of 2002.
32.1    Certification of Chief Executive Officer under the Section 906 of the
        Sarbanes-Oxley Act of 2002.
32.2    Certification of Chief Financial Officer under the Section 906 of the
        Sabanes-Oxley Act of 2002.
99.1    Proxy Statement for 2004 Annual Meeting to be filed on or before 12
        days after November 30, 2003.


                       INDEPENDENT AUDITOR'S REPORT


To the Board of Directors
Art's-Way Manufacturing Co., Inc.
Armstrong, Iowa

We have audited the accompanying consolidated balance sheet of Art's-Way
Manufacturing Co., Inc. and subsidiary as of November 30, 2003, and the
related consolidated statements of income, stockholders' equity and cash
flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Art's-Way
Manufacturing Co., Inc. and subsidiary as of November 30, 2003, and the
results of its operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United
States of America.

                                    /s/ McGladrey & Pullen LLP
Des Moines, Iowa
January 9, 2004

                  INDEPENDENT AUDITOR'S REPORT


To the Board of Directors
Art's-Way Manufacturing Co., Inc.

We have audited the accompanying balance sheet of Art's-Way
Manufacturing Co., Inc. (the Company) as of November 30, 2002, and the
related statements of operations, stockholders's equity, and cash flows
for the years ended November 30, 2002 and 2001.  These financial
statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements
based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.  An
audit inclues examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements.  An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company
as of November 30, 2002, and the results of its operations and its cash
flows for the years ended November 30, 2002 and 2001 in conformity with
accounting principles generally accepted in the United States of
America.

                                     /s/  KPMG LLP

January 8, 2003, except as
to note 7, which is
as of February 25, 2003
Omaha, Nebraska

                       ART'S-WAY MANUFACTURING CO., INC.

                             Table of Contents
								Page
Statements of Operations -
    Years ended November 30, 2003, 2002, and 2001                F-3

Balance Sheets -
     November 30, 2003 and 2002 				 F-4

Statements of Stockholders' Equity -
     Years ended November 30, 2003, 2002, and 2001               F-5

Statements of Cash Flows -
     Years ended November 30, 2003, 2002, and 2001               F-6

Notes to Financial Statements -
     Years ended November 30, 2003, 2002, and 2001           F-7 - F-19

                    ART'S-WAY MANUFACTURING CO., INC.
                  Consolidated Statements of Operations
        Years ended November 30, 2003, 2002, and 2001
			       2003                2002	         2001
Net Sales                  $ 11,411,376        $10,899,822     $10,891,398
Cost of goods sold, excluding
items below                   8,035,414         8,130,059        8,768,76
Loss on inventory disposition     -                  -           1,082,441
Asset Impairment writedown        -	            -              546,523
Total cost of goods sold      8,035,414          8,130,059      10,397,640
Gross profit                  3,375,962          2,769,763         493,758
Expenses:
Engineering                     310,715              4,283         208,378
Selling                         686,148            552,107        529,225
General and administrative    1,337,662          1,411,539        1,670,987
Total expenses                2,334,525          1,967,929        2,408,590
Income (loss) from operations 1,041,437            801,834      (1,914,832)
Other income (expense):
Interest expense              (156,113)           (170,260)        (411,101)
Other                          (22,119)            (58,439)           9,208
Total other expense(          (178,232)           (228,699)        (401,893)
Income (loss) before income
taxes                          863,205             573,135        (2,316,725)
Income tax expense (benefit)  (800,643)              4,032            65,176
Net income (loss)          $ 1,663,848          $  569,103       $(2,381,901)
Net income (loss) per share:
Basic                      $     0.86           $     0.31       $    (1.86)
Diluted                          0.85                 0.31            (1.86)

See accompanying notes to consolidated financial statements.

                          Consolidated Balance Sheets
                          November 30, 2003 and 2002
Assets					    2003		2002
Current assets:
Cash                                    $   800,052        $    75,358
Accounts receivable-customers,
net of allowance for doubtful
accounts of $39,250 and $50,000
in 2003 and 2002,respectively,              885,890            592,945
Inventories, net                          3,446,711          3,576,707
Deferred taxes                              283,000               -
Other current assets                        150,185             95,385
Total assets                            $ 7,961,831          4,340,395
Property, plant, and equipment, net       1,018,910            974,712
Inventories, noncurrent                     483,432            430,509
Real estate loan receivable                 165,725               -
Deferred taxes                              535,000               -
Other assets                                192,932            175,849
Total assets                            $ 7,961,837       $  5,921,465
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable to bank                   $     -           $	319,222
Current protion of term debt               178,508              356,669
Accounts payable                            83,874              523,492
Customer deposits                           53,556              249,756
Accrued expenses                           702,117              630,972
Total current liabilities                1,018,055            2,080,111
Long-term liabilities                      174,766              187,204
Term debt, excluding current portion     1,971,848              520,830
Total liabilities			 3,164,669            2,788,145
Stockholders' equity:
Common stock - $0.01 par value.
Authorized 5,000,000 shares;
issued 1,938,176 shares in 2003
and 2002                                    19,382               19,382
Additional paid-in capital               1,634,954            1,634,954
Retained earnings                        3,142,832            1,478,984
Total stockholders' equity               4,797,168            3,133,320
Total liabilities and
stockholders' equity                   $ 7,961,837          $ 5,921,465
See accompanying notes to consolidated financial statements.


                      ART"S-WAY MANUFACTURING CO., INC.
               Consolidated Statements of Stockholders' Equity
                  Years ended November 30, 2003, 2002, and 2001
				     Additional
		  Number of  Stated/   paid-in   Retained   Treasury
		    shares   par value  capital  earnings    stock	Total
Balance,
November 30, 2000

            1,256,351   $13,408  $1,559,037 $3,291,782  $(809,814) $ 4,054,413
Net loss        -          -          -     (2,381,901)	     -      (2,381,901)
Shares reissued
from treasury  41,825      -      (309,426)      -        401,131       91,705
Balance,
November 30,
2001        1,298,176   13,408    1,249,611    909,881   (408,683)   1,764,217
Net income      -         -           -        569,103       -         569,103
Shares issued
from common
stock        597,398     5,974      740,774       -          -         746,748
Shares reissued
from treasury 42,602      -        (355,431)      -       408,683       53,252
Balance,
November 30,
2002      1,938,176     19,382    1,634,954   1,478,984      -       3,133,320
Net income    -           -           -       1,663,848      -       1,663,848
Balance,
November 30,
2003      1,938,176    $19,382   $1,634,954 $3,142,832    $  -	    $4,797,168
See accompanying notes to consolidated financial statements.


                       ART'S-WAY MANUFACTURING CO., INC.
                      Consolidated Statements of Cash Flows
                   Years ended November 30, 2003, 2002, and 2001
                                           2003          2002	    2001
Cash flows from operations:
Net income (loss)                      $1,663,848    $  569,103  $(2,381,901)
Adjustments to reconcile net
 income (loss) to net cash
 provided by operating activities:
  (Gain) on sale of property, plant,
  and equipment                             -              -	      (1,308)
  Depreciation and amortization         278,962         251,913       453,603
  Asset impairment writedown               -               -          546,523
  Deferred income taxes                (818,000)           -           62,900
  Changes in assets and liabilities,
   net of Obeco acquisition:
  (Increase) decrease in:
   Accounts receivable                 (292,945)        329,223       409,140
   Inventories                          327,424         682,792      2,494,316
   Other current assets                 (54,800)	(41,228)        36,512
   Other, net                           (29,521)         11,355           -
   Increase (decrease) in:
   Accounts payable                    (439,618)       (460,560)      (302,591)
   Customer deposits                   (196,200)        185,307        (62,747)
   Accrued expenses                      71,145          (3,334)      (353,030)
     Net cash provided by operating
      activities                        510,295        1,524,571       901,417
Cash flows from investing activities:
  Purchases of property, plant,
  and equipment                        (217,513)        (142,232)      (58,534)
  Purchase of assets of Obeco, Inc.    (355,998)            -	          -
  Purchase of real estate loan         (165,725)            -	          -
  Proceeds from sale of property,
  plant, and equipment                     -                - 	         9,150
   Net cash (used in) investing
   activities                          (739,236)       (142,232)       (49,384)
Cash flows from financing activities:
  Payments of notes payable to bank    (319,222)     (1,754,482)      (478,479)
  Principal payments on term debt
    and long-term liabilities         (727,143)        (356,874)      (465,259)
  Proceeds from term debt            2,000,000             -	          -
  Proceeds from issuance of
  common stock                            -             800,000         91,705
    Net cash provided by (used in)
     financing activities               953,635       (1,311,356)     (852,033)
    Net increase in cash                724,694           70,983          -
Cash at beginning of period              75,358            4,375         4,375
Cash at end of period                $  800,052      $    75,358    $    4,375

Supplemental disclosures of
 cash flow information:
Cash paid during the period for:
    Interest                         $  136,568      $   170,260    $  411,101
    Income taxes                          5,841            4,032         2,276

Supplemental disclosures of
  noncash investment and
  financing activities:
    Obeco acquisition:
    Inventories                      $  250,351      $      -       $     -
    Property, plant and equipment       105,647             -             -
                                     $  355,998      $      -       $     -
See accompanying notes to consolidated financial statements.

(1)	Summary of Significant Accounting Policies

(a)     Nature of Business

Art's Way Manufacturing Co., Inc. and subsidiary (the Company) are primarily
engaged in the fabrication and sale of metal products in the agricultural
sector of the United States economy.  Major product offerings include animal
feed processing equipment, sugar beet and potato harvesting equipment, land
maintenance equipment, finished mowing and crop shredding equipment, seed
planting equipment and truck bodies.  A significant part of the Company's
business is supplying tillage, hay blowers, and finish mowers to several
original equipment manufacturers (OEMs).  Another important part of the
Company's business is 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.

(b)     Principles of Consolidation

The consolidated financial statements include the accounts of Art's-Way
Manufacturing Co., Inc. and its wholly-owned subsidiary, Cherokee Truck
Bodies, Inc., which was formed during the year ended November 30, 2003.
All material intercompany accounts and transactions are eliminated in
consolidation.

(c)     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 considered past due 60 days
past invoice date.

(d)     Inventories

Inventories are stated at the lower of cost or market, and cost is determined
using the first-in, first-out (FIFO) 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
writedowns to market based on expected usage information for raw materials and
historical selling trends for finished goods.  Writedowns of inventory create
a new cost basis.  Additional writedowns may be necessary if the assumptions
made by management do not occur.  The Company has classified inventories not
expected to be consumed in its manufacturing process or its parts fulfillment
business within the Company's normal operating cycle as a non-current asset
in the accompanying balance sheets.

(e)	Auction Sale of Inventory

During the fourth quarter of 2001, the Company held an auction to sell excess
and obsolete inventory.  The auction resulted in a loss of $1,082,441, and is
included in cost of goods sold.

As a result of the inventory auction in the fourth quarter of 2001, the
Company obtained better market information in regards to its aging inventory,
leading to a writedown of inventory of approximately $300,000 in the fourth
quarter of 2001.

(f)	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 thirty-three
years.

(g)	Impairment of Long-lived Assets Statement of Financial Accounting

Standards No. 144, Accounting for the Impairment or Disposal of Long-lived
Assets, requires the review of long-lived assets and certain identifiable
intangibles to be held and used for impairment whenever events or changes in
circumstances indicate that the carrying amount of the asset may not be
recoverable. As of November 30, 2001, the Company determined the carrying
costs of certain fixed asset tooling items were not recoverable because the
Company had decided that it will no longer manufacture the products that
this tooling was being used to produce. The impairment loss of $546,523 is
included in cost of goods sold. As of November 30, 2003 and 2002, the
Company determined that no additional impairments have occurred relating
to the Company's long-lived assets.

(h)	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 is 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.

(i) Revenue Recognition

Revenue from sales of products is recognized when risk of ownership and title
pass to the buyer.

(j)	Research and Development

Research and development costs are expensed when incurred. Such costs
approximated $417,000, $12,000, and $125,000 for the years ended November 30,
2003, 2002, and 2001, respectively. (k)	Income (Loss) Per Share Basic net
income (loss) per common share has been computed on the basis of the weighted
average number of common shares outstanding. Diluted net income (loss) 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, 2003, 2002 and 2001:

(k)	Income (Loss) Per Share

Basic net income (loss) per common share has been computed on the basis of the
weighted average number of common shares outstanding. Diluted net income (loss)
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, 2003, 2002 and 2001:

                                    2003           2002	        2001

Basic:
Numerator, net income (loss)  	$1,663,848     $  569,103   $(2,381,901)

Denominator, average
number of common
shares	outstanding	         1,938,176      1,808,423     1,279,613

Basic income (loss)
per common share	        $     0.86     $     0.31   $     (1.86)

Diluted:
Numerator,net income (loss)     $1,663,848     $ 569,103    $(2,381,901)

Denominator:
Average number of common
shares outstanding               1,938,176     1,808,423      1,279,613
Effect of dilutive
convertible preferred               16,232         3,016          -
Average number of common
shares outstanding used	to
calculate diluted
earnings per common share        1,954,408     1,811,439      1,279,613

Diluted income (loss) per
common share	               $      0.85    $     0.31    $     (1.86)

(l)	Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities

The Company has entered into agreements whereby it can sell accounts
receivable to financial institutions. The agreement provides for the
Company to pay monthly interest on the face amount of each invoice at an
average rate of 3.375% over the prime rate (7.375% at November 30, 2003 and
7.00% at November 30, 2002) from the date of the invoice for 180 days, or
the date of customer payment, whichever occurs first. The buyer is
responsible for servicing the receivables, and has recourse to the Company
for receivables outstanding greater than 180 days. The sale of the
receivables has been reflected as a reduction of trade accounts receivable
by the Company. At November 30, 2003, and 2002, there were approximately
$131,000, and $182,000, respectively, of receivables outstanding which the
Company had sold relating to this agreement.  Interest paid to the
financial institution was approximately $19,400, $20,200, and $24,200 for
the years ended November 30, 2003, 2002, and 2001,
respectively.

(m)	Stock Based Compensation

The Company accounts for stock options in accordance with the provisions of APB
Opinion No. 25 (APB 25), Accounting for Stock Issued to Employees, and related
interpretations. As such, compensation expense would be recorded on the date of
grant only if the current market price of the underlying stock exceeded the
exercise price. Accordingly, the Company has not recognized compensation
expense for its options granted in the years ended November 30, 2003, 2002, and
2001. Statement of Financial Accounting Standards No. 123 (SFAS 123),
Accounting for Stock-Based Compensation, permits entities to recognize as
expense over the vesting period by the fair value of all stock-based awards on
the date of grant. SFAS 123 also allows entities to continue to apply the
provisions of APB 25 and provide pro forma net income and income per share
disclosure for employee stock option grants, as if the fair-value-based method
defined in SFAS 123 had been applied. The Company has elected to continue to
apply the provisions of APB 25 and provide the pro forma disclosure provisions
of SFAS 123.

Since the Company applies APB Opinion No. 25 in accounting for its
plans, no compensation cost has been recognized for its stock options in
the financial statements. Had the Company recorded compensation cost
based on the fair value at the grant date for its stock options under
SFAS No. 123, the Company's net income (loss) and net income (loss) per
share would have been reduced to the pro forma amounts indicated below:

						   November 30
 					2003		2002	     2001
Net income (loss):
	As reported		    $1,663,848     $   569,103   $(2,381,901)
	Pro forma		     1,650,516         557,602    (2,392,509)
Basic net income (loss) per share:
	As reported	            $	0.86   	   $	0.31   	 $  (1.86)
	Pro forma			0.85   		0.31   	    (1.87)
Diluted net income (loss) per share:
	As reported		    $	0.85   	   $	0.31   	 $  (1.86)
	Pro forma			0.84   		0.31   	    (1.87)

(n)	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. These estimates include the valuation of the Company's
accounts receivable, inventories and realizability of the deferred tax assets.
Actual results could differ from those estimates.


(o) Recently Issued Accounting Pronouncements

In April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133
on Derivative Instruments and Hedging Activities. SFAS amends and
clarifies accounting for derivative instruments and hedging activities
under Statement 133. In addition, this Statement clarifies under what
circumstances a contract with an initial net investment meets the
characteristic of a derivative and when a derivative contains a
financing component that warrants special reporting in the statement of
cash flows. This Statement is effective for contracts entered into or
modified after June 30, 2003. The Company adopted this Statement and it
did not have a material impact on the Company's financial statements.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity (SFAS 150).
SFAS 150 established standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. It requires that an issuer classify a financial instrument that is
within its scope as a liability (or asset in some circumstances). The Company
adopted SFAS 150 on July 1, 2003 and such adoption did not have a material
effect on its financial position or results of operations. The effective date
of SFAS No. 150 has been indefinitely deferred by the FASB for certain
mandatorily redeemable instruments when certain criteria are met. The Company
has no instruments subject to these provision.

FIN No. 46, Consolidation of Variable Interest Entities, an interpretation of
Accounting Research Bulletin No. 51, (FIN 46) establishes accounting guidance
for consolidation of variable interest entities (VIE) that function to support
the activities of the primary beneficiary. Prior to the implementation of FIN
46, VIEs were generally consolidated by an enterprise when the enterprise had a
controlling financial interest through ownership of a majority of voting
interest in the entity. The provisions of FIN 46 were effective immediately for
all arrangements entered into after January 31, 2003. In December 2003, the
FASB issued a revision to FIN 46 (FIN 46R) which clarified certain
implementation issues and revised implementation dates for VIEs created before
January 31, 2003. Under the new guidance, special effective date provisions
apply to enterprises that have fully or partially applied FIN 46 prior to
issuance of the revised Interpretation. Otherwise, application of FIN 46R (or
FIN 46) is required in financial statements of public entities that have
interests in special-purpose entities for periods ending after December 15,
2003. Application by public entities, other than small business issuers, for
all other types of VIEs is required in financial statements for periods ending
after March 15, 2004.

The Company's real estate loan receivable of $165,725 is due from an entity
that may be considered a VIE. Accordingly, the Company may be required to
consolidate this entity. Management is currently attempting to obtain the
necessary information to complete their evaluation of the impact FIN 46 may
have on the reporting of their relationship with this entity. At this time, the
potential impact is unknown.

The interpretations of FIN 46 and its application to various transaction types
and structures are evolving. Management continuously monitors emerging issues
related to FIN 46, some of which could potentially impact the Company's
financial statements.

(2)	Allowance for Doubtful Accounts

A summary of the Company's activity in the allowance for doubtful accounts
is as follows:
			         	  2003        2002        2001

Balance, beginning	               $ 50,000     $ 55,301   	$ 76,303
	Provision charged to expense	 18,800        5,799   	  48,000
	Less amounts charged-off	(29,550)     (11,100)    (69,002)
Balance, ending			       $ 39,250     $ 50,000   	$ 55,301

 (3)	Inventories

Major classes of inventory are:
 						     November 30
				                 2003		 2002
Raw materials				     $   744,549     $ 1,065,166
Work in process					 805,142       1,209,007
Finished goods                                 2,380,452       1,733,043
					       3,930,143       4,007,216
Less inventories classified as noncurrent        483,432         430,509
Inventories				     $ 3,446,711     $ 3,576,707

Inventories as of November 30, 2003 and 2002 are stated net of a reserve for
obsolete and slow moving inventory of approximately $954,000 and $671,000,
respectively.

(4)	Property, Plant, and Equipment

Major classes of property, plant, and equipment are:

                                                      November 30
                                                  2003           2002
Land                                        $    180,909     $	  180,909
Buildings and improvements		       2,639,416   	2,621,795
Manufacturing machinery and equipment	       8,019,299        7,713,760
Trucks and automobiles				  89,626           89,626
Furniture and fixtures			         119,882          119,882
					      11,049,132       10,725,972
Less accumulated depreciation		      10,030,222        9,751,260
Property, plant and equipment	            $  1,018,910     $    974,712


(5)	Accrued Expenses

Major components of accrued expenses are:
						      November 30
						  2003		 2002
Salaries, wages, and commissions	     $	 366,842     $	294,220
Accrued warranty expense			  59,207         60,232
Other				                 276,068	276,520
                                             $   702,117     $  630,972

(6)	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 for the years ended
November 30, 2003, 2002 and 2001 are as follows:

					2003		2002	      2001

Balance, beginning		     $	60,232       $	67,426    $  106,667
 Settlements made in cash or in-kind  (113,705)       (147,591)     (120,480)
 Warranties issued		       112,680         140,397 	      81,239
Balance, ending			     $  59,207       $  60,232    $   67,426

(7)	Loan and Credit Agreements

On April 25, 2003 the Company obtained long-term financing through West Bank.
Credit facilities consist 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 matures on February 28, 2004. 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. In addition, an annual fee of $12,500 is paid for the use
of this credit facility. 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 November 30, 2003,
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),
financed equipment (approximately $250,000), provided permanent working
capital (approximately $500,000) and satisfied closing costs
(approximately $50,000). Approximately $700,000 will be reserved for
future acquisitions. Maturity date is March 31, 2023. The variable
interest rate will be West Bank's prime interest rate plus 1.5%,
adjusted daily. Monthly principal and interest payments are amortized
over 20 years, at which time the loan matures. 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.

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 to be paid monthly. Guarantee fee payments to
Mr. McConnell were approximately $26,000, none and none for the years
ended November 30, 2003, 2002, and 2001, respectively.

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 shall 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,
but are not limited to, 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 payoff UPS Capital 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 Company had a credit agreement as of November 30, 2002 with a
lending institution (lender) that provided for a revolving line of
credit (credit facility) and a term loan, and expired on December 1,
2003. The credit facility was paid off and terminated in April 2003. The
credit facility allowed for borrowings up to $4,500,000, subject to
borrowing base percentages on the Company's accounts receivable and
inventory, and allowed for letters of credit up to $100,000. At November
30, 2002 the Company had borrowed $319,222 and had $100,000 in
outstanding letters of credit. At November 30, 2002 $1,038,000 was
available for borrowings. The interest rate was based on the lender's
referenced rate and was variable based upon certain performance
objectives. Under the terms of the agreement, the Company would not pay
more than 4% over the reference rate nor less than the reference rate
during the term of agreement. The outstanding borrowings bear interest
at 8.25% at November 30, 2002.

The term loan was for an original principal amount of $1,991,000. The
principal amount was repayable in monthly installments of $23,700 with
the remaining unpaid balance due on December 1, 2003. The term loan was
paid off in April 2003.

All loans, advances and other obligations, liabilities and indebtedness
of the Company were secured by all present and future assets. The
Company paid an unused line fee equal to three-eights of 1% of the
unused portion of the revolving line of credit. The Company's cash
account was restricted by the lender, such that any available cash was
used to pay down on the credit facility.

On February 25, 2003, the Company's secured lender granted the Company
forbearance on the lender's ability to call the Company's debt in
relation to the Company's past violations of the debt's financial
covenants through December 1, 2003. The amendment and forbearance
agreement waived the Company's requirements to comply with the financial
covenants of the loan agreement through December 1, 2003. The lender
retained its rights and remedies under the loan agreement if an
additional event of default occurred, if a material adverse change
occurred as defined in the agreement, or if the Company failed to comply
with any other part of the loan agreement.

As a result of this amendment and forbearance, $320,971 of the term loan
is classified as term debt, excluding current portion at November 30,
2002 in the accompanying balance sheet.

The amendment and forbearance agreement also reduced the maximum
borrowings available under the revolving line of credit to $2,000,000.
As of November 30, 2002 the Company had $1,038,000 of availability
remaining on the revolving line of credit. The revolving line of credit
is shown as a current liability, as of November 30, 2002, as it is the
Company's intention to pay the revolving line of credit within the next
year.

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

					        November 30
					    2003	   2002
West Bank Facility #2 loan payable
  in monthly installments of $17,776
  including interest at Bank's
  prime rate plus 1.5% (5.5%)            $ 1,950,975   	$     -
Installment term loan payable in
  monthly installments of $23,700
  plus interest at 4% over the bank's
  national money market rate (8.25%),
  due on demand					-   	  605,371
State of Iowa Community Development
Block Grant promissory notes at 0%
  interest, maturity 2006 with quarterly
  principal payments of $11,111             122,223       166,667
State of Iowa Community Development
  Block Grant local participation
  promissory notes at 4% interest,
  maturity 2006, with quarterly
  payments of $7,007                         77,158       105,461
Total term debt	                          2,150,356       877,499
Less current portion of term debt	    178,508       356,669
Term debt, excluding current portion  	$ 1,971,848   	$ 520,830

A summary of the minimum maturities of term debt follows for the years
ending November 30:

					Amount
	Year:
		2004		     $	 178,508
		2005			 184,758
		2006			 170,721
		2007			 124,349
		2008			 131,363
		Thereafter	       1,360,657
				      $2,150,356

 (8)	Long-Term Liabilities

Under an agreement with a former manufacturer of one of the Company's
product lines, the Company is required to remit annual royalty payments
through fiscal year 2007 for the right to manufacture and sell the
product line. The agreement calls for the payment of royalties based on
a percentage of the product line's annual sales, subject to annual and
aggregate minimums, as defined in the agreement. A summary of the
minimum payments follows for the years ending November 30:

							Amount
Year:
     2004					     $	30,000
     2005						30,000
     2006						30,000
     2007					       160,000
  Total minimum royalty payments     		       250,000
Less amount representing discount (9%)			45,234
  Present value of minimum royalty payments	       204,766
Less current portion, classified as accrued expenses	30,000
  Long-term liabilities		                     $ 174,766


(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 a minimum of 4% of
their compensation up to the limit prescribed by the Internal Revenue Code. The
Company may make matching contributions at a discretionary percent upon
approval from the Board of Directors. No contributions were made by the Company
in the years ended November 30, 2003, 2002, and 2001.

(10)	Stock Option Plans
Under the 2001 Director Option Plan, stock options may be granted to
non-employee directors to purchase shares of common stock of the Company at a
price not less than fair market value at the date the options are granted.
Nonemployee directors who have served for at least one year are automatically
granted options to purchase 5,000 shares of common stock. Options granted are
nonqualified stock options. The option price, vesting period, and term are set
by the Compensation Committee of the Board of Directors of the Company. Options
for an aggregate of 50,000 common shares may be granted under the Plan. Each
option will be for a period of 10 years and may be exercised at a rate of 25%
at the date of grant and 25% on the first, second, and third anniversary date
of the grant on a cumulative basis. At November 30, 2003, the Company had
approximately 20,000 shares available for issuance pursuant to subsequent
grants under the 2001 Director Option Plan.

Under the previously effective 1991 Employee Stock Option Plan, stock
options were granted to key employees to purchase shares of common stock
of the Company at a price not less than fair market value at the date
the options are granted. Options granted were either nonqualified or
incentive stock options. The option price, vesting period, and term were
set by the Compensation Committee of the Board of Directors of the
Company. Each option was for a period of 10 years and could be exercised
at a rate of 25% at the date of grant and 25% on the first, second, and
third anniversary date of the grant on a cumulative basis. Effective
April 2001, the period available for option grants under the 1991
Employee Stock Option Plan expired, and as a result, no shares are
available for issuance pursuant to subsequent grants under the 1991
Employee Stock Option Plan.

A summary of changes in the stock option plans is as follows:
						 November 30
					2003		2002		2001
Options outstanding at beginning
of period			      40,000           61,500          46,500
Granted				       5,000   		5,000          40,000
Canceled			        -   	      (26,500)        (25,000)
Options outstanding at end of period  45,000           40,000          61,500
Options price range for the period     $2.32 		$2.32 		$2.32
					 to		  to		  to
				       $3.50 		$3.03 		$6.75
Options exercisable at end of period  30,000	       18,750	       31,500

At November 30, 2003, 2002, and 2001, the weighted-average remaining
contractual life of options outstanding was 7.8 years, 8.6 years, and 7.0
years, respectively, and the weighted-average exercise price was $2.74, $2.64,
and $3.89, respectively. The weighted-average exercise price for options
exercisable at November 30, 2003 was $2.67.

The per share weighted-average fair value of stock options granted
during the years ended November 30, 2003, 2002, and 2001, was $1.80,
$1.74, and $2.39, respectively, on the date of grant using the Black
Scholes option-pricing model with the following weighted-average
assumptions: November 30, 2003 - expected dividend yield 0.0%, risk-free
interest rate 4.25%, expected volatility factor of 30.01%, and an
expected life of 10 years; November 30, 2002 - expected dividend yield
0.0%, risk-free interest rate of 4.19%, expected volatility factor of
31.59%, and an expected life of 10 years; November 30, 2001 - expected
dividend yield 0.0%, risk-free interest rate of 4.92%, expected
volatility factor of 29.25%, and an expected life of 10 years.

(11)	Income Taxes

Total income tax expense (benefit) for the years ended November 30,
2003, 2002, and 2001 consists of the following:

 					     November 30
				  2003		2002		2001
Current:
	Federal		      $     -        $	  -   	    $	 -
	State			  17,357         4,032          2,276
				  17,357         4,032 		2,276
Deferred:
	Federal			(818,000)         -   	       62,900
	State			    -             -              -
				(818,000)  	  -            62,900
			      $	(800,643)    $	 4,032 	    $   65,176

The reconciliation of the statutory Federal income tax rate and the
effective tax rate are as follows:

					     November 30
				  2003		2002		2001
Statutory federal income tax
 rate				  34.0%		34.0%  	       (34.0)%
Increase (decrease) due to:
  Change in valuation
    allowance 		        (126.8)        (34.0) 		36.7
  Other-net                        0.0           0.7             0.0
				(92.8)%	  	 0.7%  		 2.7%

Tax effects of temporary differences that give rise to significant portions of
the deferred tax assets at November 30, 2003 and 2002 are presented below:

						November 30
					   2003	              	2002
Deferred tax assets:
  Net operating loss carryforwards     $  880,000           $ 1,184,343
  Tax credits				  160,000   		150,969
  Accrued expenses 			   57,000   		 65,869
  Inventory capitalization		  160,000   		126,297
  Asset reserves			  339,000   		295,188
  Property, plant, and equipment	   40,000   		 90,343
  Total deferred tax assets		1,636,000   	      1,913,009
  Less valuation allowance		  818,000   	      1,913,009
  Net deffered tax assets              $  818,000           $      -

For tax purposes, the Company has available at November 30, 2003, net operating
loss carryforwards of approximately $2,600,000 which will begin to expire in
the year 2013. The Company also has approximately $118,000 of research and
development credits and $42,000 of state tax credits which begin to expire in
the years 2007 and 2008, respectively.

The Company has established a deferred tax asset valuation allowance of
approximately $818,000 and $1,913,009 at November 30, 2003 and 2002,
respectively due to the uncertainty of realizing its deferred tax
assets. 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.

(12)	Credit Concentration

The Company's sales to one major OEM were $1,517,747, $1,827,465, and
$2,213,054 for the years ended November 30, 2003, 2002, and 2001, respectively.
Accounts receivable from this customer are unsecured, and were $56,262 and
$58,755 at November 30, 2003 and 2002, respectively. The Company's sales to one
major dealership were $1,398,898, $879,020, and $406,740 for the years ended
November 30, 2003, 2002, and 2001, respectively. Accounts receivable from this
customer are unsecured, and were $157,162 and ($5,532) at November 30, 2003 and
2002, respectively.

(13)	Disclosures About the Fair Value of Financial Instruments

SFAS 107, Disclosures about Fair Value of Financial Instruments, defines fair
value of a financial instrument as the amount at which the instrument could be
exchanged in a current transaction between willing parties. At November 30,
2003 and 2002, the carrying amount approximates fair value for cash and cash
equivalents, accounts receivable, accounts payable, notes payable to bank, term
debt, and other current and long-term liabilities. The carrying amounts
approximate fair value because of the short maturity of these instruments. The
fair value of the Company's installment term loan payable also approximates
fair value because the interest rate is variable as it is tied to the lender's
national money market rate.

(14)	Related Party Transaction

In February 2002, the Company sold 640,000 shares of common stock to an
existing shareholder, Mr. J. Ward McConnell, Jr., at estimated fair value.
Proceeds from the sale of the stock were $800,000. Mr. McConnell has agreed
that without prior approval of the Board of Directors, excluding himself and
his son, he will not acquire as much as fifty percent (50%) of the Company's
common stock and will not take the Company private. Immediately after the
transaction, Mr. McConnell was elected as Chairman of the Board of Directors of
the Company. His son, Mr. Marc McConnell, is also a Board Member. Also, see
Note 6 regarding Mr. J. Ward McConnell, Jr.'s guarantee of Company debt and a
related fee paid to Mr. McConnell.

(15)	Litigation and Contingencies

Various legal actions and claims 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.

                           Signatures

Pursuant to the requirements of Section 13 or 15(d) 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 on January 22, 2004

                   ART'S-WAY MANUFACTURING CO., INC.



By:                                           By:
     /s/ J. Ward McConnell, Jr.	              /s/ John C. Breitung
     J. Ward McConnell, Jr.		      John C. Breitung
     Chairman of the Board		      President
					      Chief Financial Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


/s/ J. Ward Mc Connell, Jr 		             January 22, 2004
J. Ward McConnell, Jr. 	  Chairman of the Board 	   Date
	                     and Director


/s/ David R. Castle             		     January 22, 2004
David R. Castle         	Director	           Date


/s/s George A Cavanaugh     	                     January 22, 2004
George A. Cavanaugh, Jr	        Director	                   Date


/s/ James L. Koley                                   January 22, 2004
James L. Koley	                Director	           Date


/s/ Douglas McClellan              		     January 22, 2004
Douglas McClellan	        Director	           Date


/s/ Marc H. McConnell                                January 22, 2004
Marc H. McConnell	        Director	           Date


/s/ Thomas E. Buffamante                             January 22, 2004
Thomas E. Buffamante	        Director	           Date