Revenue and Sales Performance - Net revenue for the six months ended November 30, 2024 decreased by $96,000 (0%) compared to the same period in 2023, with gross profit increasing by $195,000 (2%) to $9,390,000[33] - Sales to Asia increased by 37% during the six months ended November 30, 2024, while U.S. sales decreased by 7%[33] - Net revenue for the three months ended November 30, 2024 decreased by $1,791,000 (-17%) compared to the same period in 2023, with gross profit decreasing by $925,000 (-19%)[43] - Sales to Asia increased by 34% during the three months ended November 30, 2024, while U.S. sales decreased by 21%[43] Research and Development Costs - Research and development costs decreased by $41,000 (-19%) to $172,000 for the six months ended November 30, 2024, representing 0.9% of net revenues[37] - Research and development costs increased by $19,000 (23%) to $103,000 for the three months ended November 30, 2024, representing 1.2% of net revenues[46] Selling, General and Administrative Expenses - Selling, general and administrative expenses increased by $360,000 (7%) to $5,369,000 for the six months ended November 30, 2024, primarily due to increased stock option expense[38] - Selling, general and administrative expenses increased by $166,000 (6%) to $2,839,000 for the three months ended November 30, 2024, primarily due to increased stock option expense[47] Capital Expenditures and Inventory - Capital expenditures for the six months ended November 30, 2024 were $971,000, compared to $545,000 in the same period of the prior year, with commitments for $881,000 in the next twelve months[51] - Inventory increased by $1,099,000 (15%) to $8,611,000 as of November 30, 2024, compared to $7,512,000 at May 31, 2024, with work-in-process inventory accounting for 88% of the total inventory[52][53] - Inventory turnover decreased to 2.3 as of November 30, 2024, compared to 3.0 at May 31, 2024, indicating a slower rate of inventory turnover[52] - Maintenance and other inventory decreased by $152,000 (-10%) to $1,428,000 as of November 30, 2024, compared to $1,580,000 at May 31, 2024, with no provision for potential inventory obsolescence recorded for the six-month period ended November 30, 2024[52][54] Accounts Receivable and Payable - Accounts receivable increased by $3,036,000 (58%) to $8,248,000 as of November 30, 2024, compared to $5,212,000 at May 31, 2024, with the average days sales outstanding (DSO) increasing from 39 days to 87 days[55][56] - Accounts payable decreased by 40% to $857,000 as of November 30, 2024, compared to the prior year-end, while accrued expenses decreased by 48% to $2,497,000 due to the payout of fiscal year 2024 incentive compensation[62] Backlog and Projects in Progress - The company had 156 open sales orders in its backlog as of November 30, 2024, with a total sales value of $34.5 million, expected to be recognized in fiscal years 2025 and 2026[35] - The company's backlog of sales orders increased to $34.5 million as of November 30, 2024, up from $33.1 million at the end of the prior year, with $13.1 million of the backlog for projects already in progress[61] - The number of projects in progress decreased to 18 as of November 30, 2024, compared to 19 at May 31, 2024, with an aggregate percent complete of 48% compared to 53% at the prior year-end[61] - The average total sales value of projects in progress decreased to $1,397,000 as of November 30, 2024, compared to $2,089,000 at May 31, 2024, with 51% of the total value invoiced to customers compared to 56% at the prior year-end[61] Costs and Estimated Earnings - CIEB (Costs and Estimated Earnings in Excess of Billings) decreased by $1,339,000 (-31%) to $3,018,000 as of November 30, 2024, compared to $4,357,000 at May 31, 2024[55][57] - BIEC (Billings in Excess of Costs and Estimated Earnings) decreased by $1,893,000 (-34%) to $3,708,000 as of November 30, 2024, compared to $5,601,000 at May 31, 2024[55][58]

Core Insights - Taylor Devices, Inc. reported record-breaking revenues and net earnings for Q1 fiscal 2025, with EPS rising to 85 cents, a 63.5% increase from 52 cents in the prior-year quarter [1][7] - First-quarter sales grew by 17% year-over-year, reaching $11.6 million compared to $9.9 million in Q1 fiscal 2024, driven primarily by the Aerospace/Defense markets [2][3] - The company’s net earnings surged 44% year-over-year, increasing from $1.9 million in Q1 fiscal 2024 to $2.7 million in Q1 fiscal 2025, reflecting successful growth strategies [5] Business Performance - The strong business momentum is attributed to steady performance across three key product groups: Aerospace/Defense, Structural, and Industrial, with Aerospace/Defense being the primary growth driver [3][4] - Despite challenges in the Structural market due to high interest rates and adverse foreign exchange conditions, the company maintained solid order flow, ensuring a robust order book [4] Key Metrics - The order backlog at the end of Q1 fiscal 2025 was $28.4 million, slightly up from $28.3 million in Q1 fiscal 2024, indicating healthy demand, particularly in Aerospace/Defense [6] - The increase in EPS was also supported by a reduction in shares outstanding from 3.52 million to 3.12 million, reflecting management's confidence in the company's long-term financial health [7]

Core Insights - Taylor Devices, Inc. reported first quarter sales of $11,617,856, a 17% increase from $9,923,628 in the same period last year [1][2] - Net earnings for the first quarter reached $2,666,655, representing a significant 44% increase from $1,847,863 in the previous year [1][2] - The company set new records for both sales and net earnings in this quarter, driven by strong performance in the Aerospace/Defense sector [2] Financial Performance - First quarter sales for fiscal 2024 were $9,923,628, while the current quarter sales are $11,617,856 [3] - Net earnings increased from $1,847,863 to $2,666,655 year-on-year [1][3] - Earnings per share for the previous year was $0.52, with shares outstanding at 3,520,910 [3] Market and Strategic Focus - The Aerospace/Defense market continues to show favorable momentum, helping to offset challenges in the Structural markets due to high interest rates and unfavorable foreign exchange rates [2] - The firm order backlog at the end of Q1 was $28.4 million, slightly up from $28.3 million in the previous year and significantly above the five-year average of $21.9 million [2] - The company remains committed to growth strategies through investments in team, technologies, and facilities [2]

Financial Performance - Net revenues for the three months ended August 31, 2024, increased by 17% to $11,618,000 compared to $9,924,000 for the same period in 2023[31]. - Gross profit for the same period was $5,504,000, representing a 26% increase from $4,385,000 in the prior year, with a gross margin of 47%[31][32]. - Operating income improved to $2,905,000 for the three months ended August 31, 2024, compared to $1,920,000 in the same period last year[35]. Expenses - Research and development costs decreased by 47% to $69,000, down from $129,000 in the previous year, accounting for 0.6% of net revenues[34]. - Selling, general, and administrative expenses rose by 8% to $2,530,000, representing 22% of net revenues, primarily due to increased employee compensation costs[34]. - Accrued expenses decreased by 49% from the prior year-end to $2,396,000 due to the payout of fiscal year 2024 incentive compensation[46]. Sales and Orders - The company had 118 open sales orders in backlog with a total sales value of $28.4 million as of August 31, 2024, compared to 131 orders valued at $28.3 million a year earlier[32]. - Total sales to Asia increased by 38% compared to the prior year, while sales to aerospace/defense customers rose by 20%[31]. - The company's backlog of sales orders decreased to $28.4 million from $33.1 million at the end of the prior year[45]. Accounts and Inventory - Accounts receivable increased by 30% to $6,780,000, with an average days sales outstanding (DSO) rising from 39 days to 53 days[41]. - Inventory as of August 31, 2024, was $8,154,000, an increase of 9% from $7,512,000 at the prior year-end[38]. - Accounts payable as of August 31, 2024, is $1,848,000, which is 28% higher than the prior year-end[46]. Capital and Projects - Capital expenditures for the three months ended August 31, 2024, were $247,000, down from $428,000 in the same period last year[36]. - The number of projects in progress increased from 14 to 15 between May 31, 2024, and August 31, 2024[42]. - The aggregate percent complete for projects in progress increased from 53% to 58% between May 31, 2024, and August 31, 2024[45]. - The average total sales value of projects in progress is $2,043,000 as of August 31, 2024[45]. Balances - The balance of CIEB as of August 31, 2024, is $4,333,000, which is 1% lower than the prior year-end balance[42]. - The balance of BIEC at August 31, 2024, is $2,984,000, down 47% from $5,601,000 at the end of the prior year[42]. - 34% of the CIEB balance was billed to customers in the quarter ended August 31, 2024[42]. - The percentage of total value invoiced to customers remained stable at 56%[45].

Investment Thesis - Taylor Devices designs and manufactures shock absorption, rate control, and energy storage products, with Aerospace & Defense (A&D) being the largest and fastest-growing revenue category, contributing 60% of revenues and growing 71% in the last two quarters of FY24 [3][5] - The company has achieved record revenues and backlog, with margins widening and cash position nearing 20% of market cap, while carrying zero debt and engaging in share buybacks [3][20] - Despite a 130% increase in stock price year-to-date, shares remain attractively priced for further upside due to strong free cash flow potential [3] Revenue Dynamics - A&D revenues have shown a significant shift, comprising over 70% of backlog in 2024, indicating strong demand and stability due to contract-based nature [5][6] - The U.S. market accounted for 86% of revenues in 2024, with total sales in the U.S. increasing by 18%, while sales to Asia decreased by 55% [7][8] - The cyclicality of Structural revenues is expected to improve with increased backlog and the introduction of new products, such as the Taylor Dampened Moment Frame [9] Market Trends - Increased global conflicts and defense spending, particularly in the U.S. and EU, are driving growth in the A&D sector, with the commercial and military space industry projected to reach nearly $1 trillion by 2030 [8] - The A&D segment's recurring revenue model is expected to reduce overall cyclicality for Taylor Devices, providing more stability during economic downturns [8] Competitive Positioning - Taylor Devices holds a strong market position with proprietary products and technology, supported by 10 patents expiring up to 2040, creating competitive barriers [10][11] - The company has established long-term customer relationships and benefits from government-funded product development, enhancing its competitive durability [10] Financial Performance - The company has achieved record highs in operating income, net income, and free cash flow in 2024, with operating leverage at its strongest in a decade [12] - Returns on capital and margins have significantly improved, effectively doubling the company's 5-year averages [12] Future Outlook - Revenue growth is expected to average 7.5% annually over the next decade, with gross margins projected to remain in the mid-40s [21] - Estimated free cash flow margins are anticipated to average 10% through the forecast period, with shares currently trading at a 34% discount to intrinsic value [22]

Core Insights - Taylor Devices, Inc. reported a strong fourth quarter for fiscal 2024, with earnings per share (EPS) of 80 cents, up from 59 cents in the same quarter last year [1] - The company achieved quarterly revenues of $12.1 million, reflecting a 12.6% year-over-year increase from $10.7 million in Q4 2023 [2] - The Aerospace/Defense segment was a key growth driver, benefiting from sustained demand, while the Structural segment faced challenges due to macroeconomic factors [3] Financial Performance - The net income for Q4 2024 was $2.5 million, a 19.7% increase from $2.1 million in Q4 2023, driven by improved operational efficiency and strategic pricing [4] - The number of shares outstanding decreased to 3.1 million from 3.5 million in the prior-year quarter, positively impacting EPS [5] - For the full fiscal year 2024, sales reached $44.6 million, a 10.9% increase from $40.2 million in the previous year, with net income growing 43% to $9 million from $6.3 million [7] Order Backlog and Market Outlook - The company reported a record order backlog of $33.1 million entering fiscal year 2025, slightly surpassing the previous record of $32.5 million, indicating strong revenue visibility and demand stability in key markets [6]

Financial Performance - For the year ended May 31, 2024, net revenue increased by 11% to $44,583,000 compared to $40,199,000 in the previous year[46]. - Net income for the year ended May 31, 2024 rose by 43% to $2,711,000, up from the previous year's figure[44]. - The gross profit margin improved to 47% in the year ended May 31, 2024, compared to 42% in the prior year[48]. - Operating income improved significantly to $9,479,000 for the year ended May 31, 2024, compared to $6,809,000 in the prior year, attributed to reduced R&D costs and better gross margin performance[53]. - Other income rose by 104% due to increased interest income from higher short-term investments[53]. Revenue Sources - Revenue from long-term projects increased by 8% year-over-year, while revenue from non-projects rose by 15%[46]. - Sales to aerospace/defense customers surged by 71%, while sales to structural customers dropped by 30%[47]. - Total sales in the U.S. increased by 18% from the prior year, while sales to Asia decreased by 55%[48]. Expenses and Costs - Research and development costs decreased by 65% to $388,000 from $1,097,000 in the prior year, primarily due to the completion of the Taylor Damped Moment Frame™ project[52][53]. - Selling, general and administrative expenses increased by 21% to $10,971,000 from $9,043,000, mainly driven by higher personnel costs[52][53]. - The provision for potential inventory obsolescence was $386,000 for the year ended May 31, 2024, compared to $295,000 in the previous year[37]. Assets and Liabilities - The company had a total sales order backlog valued at $33.1 million as of May 31, 2024, compared to $32.5 million a year earlier[49]. - Inventory increased by 26% to $7,512,000, with 85% classified as work in process[59]. - Accounts receivable decreased by 6% to $5,212,000, while costs and estimated earnings in excess of billings increased by 6% to $4,357,000[63][65]. - Billings in excess of costs and estimated earnings surged by 181% to $5,601,000 from $1,992,000 in the prior year[68]. Tax and Deferred Assets - The deferred tax asset balance increased by 38% to $2,176,000 as of May 31, 2024, requiring approximately $10.4 million of taxable income to realize[42]. - The effective tax rate for the fiscal year ended May 31, 2024, was 18%, up from 16% in the prior year[53]. Capital Expenditures - Capital expenditures decreased to $1,149,000 from $3,359,000 in the prior year, with commitments for future capital expenditures of approximately $1,360,000[57]. Corporate Governance and Compliance - The Company has filed certifications from the Chief Executive Officer and Chief Financial Officer, ensuring compliance with regulatory requirements[81]. - The Company has a policy relating to the recovery of erroneously awarded compensation, reflecting governance and accountability measures[83]. - The Company has incorporated various stock option plans and agreements, indicating ongoing employee incentive strategies[79]. Future Outlook and Meetings - The company expects sufficient cash on hand, cash flows from operations, and borrowing capacity to fund ongoing operations and capital improvements for the next twelve months[60]. - The Company will hold its Annual Meeting of Shareholders on October 25, 2024, with proxy materials to be filed within 120 days after the fiscal year end[75]. Financial Reporting - Consolidated Balance Sheets as of May 31, 2024, and 2023 will be included in the financial statements[77]. - Consolidated Statements of Income for the years ended May 31, 2024, and 2023 will be presented, providing insights into revenue and profit trends[77]. - The financial statements will include Inline XBRL interactive data files, enhancing data accessibility and analysis[83]. - The financial reports will provide detailed notes to the consolidated financial statements, offering further insights into financial performance and position[77].

Company Overview - Taylor Devices has a market capitalization of $138 2 million and is positioned as a promising investment opportunity in a niche market segment [1] - The company specializes in shock absorption, rate control, and energy storage devices, demonstrating strong operational efficiency and strategic alignment towards profitable markets [7] Financial Performance - Net income increased by 55% to $6 5 million for the nine months ended Feb 29, 2024, driven by a 10% rise in net revenues to $32 5 million [6] - Gross profit margins improved significantly, rising to 46% from 41% year over year, reflecting enhanced operational efficiency [6] - The company maintains a solid liquidity position with $3 1 million in cash and cash equivalents and a positive order backlog of $30 2 million as of Feb 29, 2024 [4] Market Segments and Growth - Sales in the aerospace/defense sector increased by 88%, offsetting declines in construction (down 35%) and industrial (down 18%) segments [3] - The aerospace/defense sector constituted 61% of sales for the nine months ending Feb 29, 2024, highlighting the company's strategic realignment towards this lucrative market [8] Competitive Landscape - Taylor Devices faces competition from both domestic and international firms but maintains a strong market position through a diversified product range and focus on innovation [9] - The company holds six patents expiring up to the year 2035, underscoring its commitment to technological advancement and intellectual property investment [9] Investor Appeal - The company's share price has shown robust growth over the past year, reflecting strong investor confidence in its financial health and market strategy [5] - The stock's attractive valuation relative to its peers makes it an appealing option for investors seeking value and growth potential [5]

Financial Performance - For the nine months ended February 29, 2024, net revenue increased by 10% to $32,518,000 compared to $29,480,000 for the same period in 2023[30]. - Net income for the nine months ended February 29, 2024, rose by 55% to $2,305,000, compared to $1,484,000 in the same period last year[30]. - For the three months ended February 29, 2024, net revenue increased by 24% to $12,254,000 compared to $9,891,000 in the same period last year[43]. Profitability - Gross profit for the nine months ended February 29, 2024, was $14,948,000, representing a 23% increase from $12,122,000 in the prior year, with a gross profit margin of 46%[30][31]. - The gross profit margin for the three months ended February 29, 2024, improved to 47%, up from 43% in the prior year[44]. Expenses - Research and development costs decreased by 64% to $321,000, down from $881,000, due to the completion of a major project[35]. - Selling, general and administrative expenses increased by 18% to $7,660,000, primarily due to higher employee compensation costs[36]. - Capital expenditures for the nine months ended February 29, 2024, were $755,000, a decrease from $2,383,000 in the same period of the prior year[56]. Sales and Orders - The company had 131 open sales orders in backlog valued at $30.2 million as of February 29, 2024, compared to 125 orders valued at $27.8 million a year earlier[33]. - Total sales within the U.S. increased by 21% year-over-year, while sales to Asia decreased by 53%[30]. - The company's backlog of sales orders decreased to $30.2 million from $32.5 million at the end of the prior year, with $16.1 million of the backlog on projects already in progress[67]. - The company expects to recognize revenue for the majority of its backlog during the 2024 and 2025 fiscal years[33]. Inventory and Receivables - Total inventory as of February 29, 2024, was $6,678,000, an increase of $737,000 (12%) compared to $5,941,000 at the prior year-end[60]. - Accounts receivable decreased by $667,000 (12%) to $4,887,000 as of February 29, 2024, while costs and estimated earnings in excess of billings increased by $410,000 (10%) to $4,534,000[62]. - The provision for potential inventory obsolescence increased to $369,000 for the nine months ended February 29, 2024, compared to $68,000 for the same period in the prior year[61]. Shareholder Actions - On January 4, 2024, the company entered into a Redemption Agreement to purchase 459,015 shares at $19.92 per share, representing approximately 13% of all issued shares[69]. Project Status - The number of projects in progress decreased from 12 to 7, while the aggregate percent complete increased from 33% to 43%[67]. - Accounts payable decreased by 44% to $956,000 as of February 29, 2024, compared to the prior year-end[68]. Stock Options - The estimated fair market value per stock option increased from $3.06 in February 2023 to $7.17 in February 2024, reflecting a significant rise in expected share price volatility from 30% to 36%[53]. - As of February 29, 2024, the total number of options outstanding and exercisable increased to 339,750 from 333,000 at May 31, 2023, with an average exercise price of $13.70[54].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 0-3498 TAYLOR DEVICES INC (Exact name of registrant as specified in its charter) New York 16-0797789 (State or other jurisdiction ...