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].

Financial Performance - Net revenue for the six months ended November 30, 2023, increased by $675,000, or 3%, to $20,263,000 compared to $19,588,000 for the same period in 2022[31] - Gross profit for the six months ended November 30, 2023, was $9,195,000, representing a 17% increase from $7,860,000 in the prior year, with a gross profit margin of 45% compared to 40%[31][32] - The company reported a net income of $1,267,000 for the six months ended November 30, 2023, a 49% increase from the prior year[25] - For the three months ended November 30, 2023, net revenue decreased by $157,000, or 1%, to $10,340,000 compared to $10,497,000 in the same period of 2022[44] - The gross profit margin for the three months ended November 30, 2023, improved to 47%, up from 42% in the prior year[45] Expenses - Research and development costs decreased by 69% to $213,000 for the six months ended November 30, 2023, down from $691,000 in the prior year, reflecting the completion of a major project[36] - Selling, general and administrative expenses rose by 18% to $5,009,000 for the six months ended November 30, 2023, compared to $4,234,000 in the previous year[37] - Selling, general and administrative expenses for the three months ended November 30, 2023, increased by 16% to $2,673,000 compared to $2,296,000 in the previous year[49] Sales and Orders - The backlog of open sales orders increased to 141 with a total sales value of $35.5 million as of November 30, 2023, compared to 139 orders valued at $18.1 million a year earlier[34] - Total sales within the U.S. increased by 13% year-over-year, while sales to Asia decreased by 37%[31] - The backlog of sales orders increased to $35.5 million, up from $32.5 million at the end of the prior year, with $21.2 million of the backlog on projects already in progress[67] - The average total sales value of projects in progress increased to $1,990,000, up from $1,285,000, with the percentage of total value invoiced to customers rising to 37%[67] Assets and Liabilities - Total inventory increased by $1,225,000 (18%) to $8,169,000 as of November 30, 2023, with raw materials up 23%, work-in-process up 15%, and finished goods up 11%[59][60] - Accounts receivable decreased by $1,482,000 (27%) to $4,072,000, while costs and estimated earnings in excess of billings (CIEB) fell by $2,401,000 (58%) to $1,723,000[62][64] - Accounts payable decreased by 32% to $1,168,000 as of November 30, 2023, and accrued expenses decreased by 26% to $3,033,000[68] Capital and Future Outlook - Capital expenditures for the six months ended November 30, 2023 were $545,000, a decrease of 61% compared to $1,391,000 in the same period of the prior year[57] - The company expects to bill the entire CIEB balance of $1,723,000 during the next twelve months, with 61% of the previous balance billed in the current quarter[64] - The company believes its cash flows from operations are sufficient to fund ongoing operations and capital improvements for the next twelve months[68] - Options outstanding increased to 372,750 with an average exercise price of $13.62 as of November 30, 2023, up from 333,000 options at $12.70 on May 31, 2023[55] - The company entered into a Redemption Agreement on January 4, 2024, to purchase 459,015 shares at $19.92 per share, representing approximately 13% of all issued shares[69]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OF 1934 For the quarterly period ended August 31, 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 of incorporation or organization) (I.R.S. Employer Identification No.) 90 Taylor Drive, North Tonawanda, ...

PART I [Business](index=4&type=section&id=Item%201.%20Business.) Taylor Devices, Inc. designs, manufactures, and markets shock absorption, rate control, and energy storage devices for diverse sectors - The company's main business is the design, manufacture, and marketing of shock absorption, rate control, and energy storage devices for various industries[13](index=13&type=chunk) - Principal product categories include Seismic Dampers, Fluidicshoks®, Crane and Industrial Buffers, Self-Adjusting Shock Absorbers, Liquid Die Springs, Vibration Dampers, Machined Springs, and Custom Actuators[14](index=14&type=chunk)[15](index=15&type=chunk) - In fiscal year 2023, sales to **five customers** accounted for approximately **30% of net sales**[21](index=21&type=chunk) R&D Expense | R&D Expense | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Company-funded | $1,097,000 | $999,000 | | Defense-sponsored | $581,000 | $334,000 | [Risk Factors](index=6&type=section&id=Item%201A.%20Risk%20Factors.) As a smaller reporting company, Taylor Devices, Inc. is not required to provide this information - The company is not required to provide risk factor information as it qualifies as a smaller reporting company[30](index=30&type=chunk) [Unresolved Staff Comments](index=6&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments.) There are no unresolved staff comments - Not applicable[31](index=31&type=chunk) [Properties](index=6&type=section&id=Item%202.%20Properties.) The company's North Tonawanda facilities, over 100,000 sq ft, are pledged to M&T Bank, restricting sale or lease - The company owns production facilities totaling more than **54,000 square feet** on Tonawanda Island and two additional industrial buildings totaling **46,000 square feet** in North Tonawanda, New York[32](index=32&type=chunk) - The company's real properties are subject to a negative pledge agreement with its lender, M&T Bank, preventing their sale, lease, or mortgage as long as credit facilities are outstanding[33](index=33&type=chunk) [Legal Proceedings](index=6&type=section&id=Item%203.%20Legal%20Proceedings.) The company is a Third-Party Defendant in a lawsuit concerning 432 Park Condominium defects, which it disputes - The company has been named as a Third-Party Defendant in a lawsuit related to the 432 Park Condominium in New York City[34](index=34&type=chunk) - The lawsuit alleges over **1,500 construction and design defects**. The company supplied **16 Viscous Damping Devices (VDDs)** for the building's Tuned Mass Damper (TMD) system[35](index=35&type=chunk)[38](index=38&type=chunk) - Management disputes the allegations and believes the company met all contractual requirements. Due to limited discovery, it is not practical to quantify likely damages[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) [Mine Safety Disclosures](index=7&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company - Not applicable[45](index=45&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=8&type=section&id=Item%205.%20Market%20For%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) The company's common stock trades on NASDAQ under TAYD; no dividends were paid, and the share repurchase program is terminated - The company's common stock trades on the NASDAQ Capital Market under the symbol TAYD[48](index=48&type=chunk) - No cash or stock dividends have been declared during the last two fiscal years[51](index=51&type=chunk) - A shareholder rights plan was adopted in **2018** to deter coercive takeover tactics and will expire in **2028**[52](index=52&type=chunk)[53](index=53&type=chunk) - The company's share repurchase agreement has been terminated, with no shares purchased since August 2011[54](index=54&type=chunk) [Selected Financial Data](index=9&type=section&id=Item%206.%20Selected%20Financial%20Data.) As a smaller reporting company, Taylor Devices, Inc. is not required to provide this information - The company qualifies as a smaller reporting company and is not required to provide selected financial data[58](index=58&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=9&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) FY2023 net revenue rose 30% to $40.2M, net income 181%, with gross margin at 40% and backlog at $32.5M [Application of Critical Accounting Policies and Estimates](index=10&type=section&id=Application%20of%20Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant judgment in accounts receivable, inventory, revenue recognition, and deferred tax assets - For long-term contracts, revenue is recognized over time using costs incurred relative to total estimated costs. In FY2023, **61%** of revenue was recognized this way, compared to **60%** in FY2022[67](index=67&type=chunk) - The company recorded a provision for potential inventory obsolescence of **$295,000** in FY2023, compared to zero in FY2022. Inventory disposals were **$322,000** in FY2023[63](index=63&type=chunk) - Management believes it is more likely than not that the deferred tax assets of **$1,583,000** will be realized, which requires generating approximately **$7.5 million** of future taxable income[70](index=70&type=chunk) [Results of Operations](index=12&type=section&id=Results%20of%20Operations) FY2023 net revenue grew 30% to $40.2M, net income 181%, with gross margin at 40% and backlog reaching $32.5M Key Financial Metrics | Financial Metric | FY 2023 | FY 2022 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $40,199,000 | $30,867,000 | $9,332,000 | 30% | | Gross Profit | $16,066,000 | $9,627,000 | $6,439,000 | 67% | | Gross Margin | 40% | 31% | +9 pts | - | | Net Income | $6,287,358 | $2,239,423 | $4,048,000 | 181% | Sales by Customer Group | Sales by Customer Group (% of Total) | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Industrial | 10% | 7% | | Structural | 51% | 53% | | Aerospace / Defense | 39% | 40% | - The sales order backlog increased to **$32.5 million** at May 31, 2023, from **$23.7 million** at May 31, 2022. Aerospace/defense orders constitute **81% of the current backlog**, up from **41%** in the prior year[79](index=79&type=chunk) - Selling, general and administrative (SG&A) expenses increased **33%** to **$8.16 million**, primarily due to higher personnel costs[82](index=82&type=chunk) [Capital Resources, Line of Credit and Long-Term Debt](index=15&type=section&id=Capital%20Resources,%20Line%20of%20Credit%20and%20Long-Term%20Debt) Primary liquidity is cash from operations; FY2023 capital expenditures doubled to $3.36M, with a $10M credit line unused - Capital expenditures were **$3,359,000** in FY2023, a significant increase from **$1,392,000** in FY2022[91](index=91&type=chunk) - The company has a **$10,000,000 bank demand line of credit** with no outstanding balance at May 31, 2023. The interest rate benchmark will switch from LIBOR to SOFR effective July 1, 2023[92](index=92&type=chunk) Balance Sheet Metrics | Balance Sheet Metrics | May 31, 2023 | May 31, 2022 | Change % | | :--- | :--- | :--- | :--- | | Accounts receivable | $5,554,000 | $4,467,000 | 24% | | CIEB (Asset) | $4,124,000 | $3,336,000 | 24% | | BIEC (Liability) | $1,992,000 | $1,123,000 | 77% | | DSO (Days) | 47 | 42 | +5 days | [Quantitative and Qualitative Disclosures About Market Risk](index=18&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) As a smaller reporting company, Taylor Devices, Inc. is not required to provide this information - The company is not required to provide this information as it qualifies as a smaller reporting company[105](index=105&type=chunk) [Financial Statements and Supplementary Data](index=18&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data.) This section states that the required financial statements and supplementary data are included in the report, commencing on page 26 - The financial statements and supplementary data are included in the Form 10-K, starting on page 26[106](index=106&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=18&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure.) The company reported no disagreements with its accountants on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure - There have been no disagreements with the company's accountants that require disclosure[107](index=107&type=chunk) [Controls and Procedures](index=18&type=section&id=Item%209A.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and internal control over financial reporting were effective as of May 31, 2023, with no material changes - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of May 31, 2023[108](index=108&type=chunk) - Management assessed internal control over financial reporting using the **2013 COSO framework** and concluded it was effective as of May 31, 2023[109](index=109&type=chunk) - No changes in internal controls over financial reporting occurred during the fiscal year that materially affected, or are reasonably likely to materially affect, the company's control over financial reporting[110](index=110&type=chunk) [Other Information](index=18&type=section&id=Item%209B.%20Other%20Information.) There is no other information to report - None[111](index=111&type=chunk) PART III [Directors, Executive Officers, Corporate Governance, Compensation, Security Ownership, and Related Transactions](index=18&type=section&id=Items%2010-14) Information for Items 10-14 is incorporated by reference from the company's Proxy Statement for the Annual Meeting on October 20, 2023 - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the Company's Proxy Statement, which will be filed within **120 days** of the fiscal year end[113](index=113&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=19&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules.) This section lists all documents filed as part of the 10-K report, including financial statements and various exhibits - Lists the financial statements and various exhibits filed with the report, including corporate governance documents, material contracts, and officer certifications[116](index=116&type=chunk)[117](index=117&type=chunk)[119](index=119&type=chunk) [Form 10-K Summary](index=22&type=section&id=Item%2016.%20Form%2010-K%20Summary.) No summary is provided under this item - None[123](index=123&type=chunk) Consolidated Financial Statements [Report of Independent Registered Public Accounting Firm](index=26&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Lumsden & McCormick, LLP issued an unqualified opinion, highlighting critical audit matters in long-term contract revenue and inventory valuation - The auditors, Lumsden & McCormick, LLP, issued an unqualified opinion, stating the financial statements are presented fairly in all material respects[134](index=134&type=chunk) - A Critical Audit Matter was identified related to revenue recognition for long-term contracts due to the significant variability and judgment involved in estimating costs to completion[140](index=140&type=chunk) - A second Critical Audit Matter was identified related to the valuation of inventory, given the significant judgments required to estimate potential obsolescence[142](index=142&type=chunk)[143](index=143&type=chunk) [Consolidated Balance Sheets](index=29&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew to $57.9M, driven by short-term investments; liabilities and equity also increased reflecting profitability Consolidated Balance Sheet Highlights (In thousands) | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $3,575 | $22,517 | | Short-term investments | $24,515 | $1,097 | | Total current assets | $44,378 | $37,977 | | Total assets | $57,881 | $49,219 | | **Liabilities & Equity** | | | | Total current liabilities | $7,788 | $5,964 | | Total stockholders' equity | $50,093 | $43,255 | [Consolidated Statements of Income](index=30&type=section&id=Consolidated%20Statements%20of%20Income) FY2023 net sales increased 30% to $40.2M, with net income surging 181% to $6.3M, or $1.79 per share Consolidated Income Statement Highlights (In thousands, except per share data) | :--- | :--- | :--- | | Sales, net | $40,199 | $30,867 | | Gross profit | $16,066 | $9,627 | | Operating income | $6,809 | $2,473 | | Net income | $6,287 | $2,239 | | Basic EPS | $1.79 | $0.64 | | Diluted EPS | $1.77 | $0.64 | [Consolidated Statements of Cash Flows](index=32&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) FY2023 operating cash flow was $7.7M, but investing activities, mainly short-term investments, reduced cash by $18.9M Consolidated Cash Flow Highlights (In thousands) | :--- | :--- | :--- | | Net cash from operating activities | $7,707 | $3,309 | | Net cash from investing activities | ($26,782) | ($1,389) | | Net cash from financing activities | $133 | $16 | | Net change in cash and cash equivalents | ($18,942) | $1,935 | | Cash and cash equivalents - ending | $3,575 | $22,517 | [Notes to Consolidated Financial Statements](index=33&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail operations, revenue streams, asset/liability composition, credit line terms, employee benefits, and legal proceedings - **81%** of FY2023 revenue was from customers in the United States, with **11%** from Asia[153](index=153&type=chunk) - At year-end, there were **22 projects** in progress with an aggregate remaining contract value of **$18.1 million**, which is expected to be recognized mostly in fiscal 2024[182](index=182&type=chunk) - The company has a **$10 million bank demand line of credit**, secured by a negative pledge on property, with no amount outstanding at year-end[187](index=187&type=chunk) - The company maintains a **401(k) retirement plan**, with expenses of **$371,881** in FY2023 and **$313,269** in FY2022[205](index=205&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the quarterly period ended February 28, 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 of inco ...

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, 2022 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 ...

PART I - FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited Q3 2022 financial statements show significant profitability growth, with changes in assets, equity, and negative operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of August 31, 2022, shows a slight increase in total assets and stockholders' equity, alongside a decrease in total liabilities Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | August 31, 2022 | May 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$49,423,600** | **$49,219,061** | | Total Current Assets | $37,770,997 | $37,977,019 | | **Total Liabilities** | **$5,130,784** | **$5,963,907** | | Total Current Liabilities | $5,130,784 | $5,963,907 | | **Total Stockholders' Equity** | **$44,292,816** | **$43,255,154** | [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the three months ended August 31, 2022, the company reported increased net sales and a substantial surge in net income and earnings per share Condensed Consolidated Statements of Income (Unaudited) | Metric | Three months ended Aug 31, 2022 | Three months ended Aug 31, 2021 | | :--- | :--- | :--- | | Sales, net | $9,090,699 | $7,307,737 | | Gross profit | $3,384,757 | $1,872,179 | | Operating income | $1,178,373 | $118,140 | | **Net income** | **$1,002,371** | **$181,877** | | **Basic and diluted EPS** | **$0.29** | **$0.05** | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity increased for the three months ended August 31, 2022, primarily driven by net income - Total stockholders' equity grew from **$40,983,918** as of August 31, 2021, to **$44,292,816** as of August 31, 2022[9](index=9&type=chunk) - The increase in retained earnings was due to a net income of **$1,002,371** for the three-month period ended August 31, 2022[9](index=9&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities and investing activities led to a net decrease in cash and cash equivalents for the three months ended August 31, 2022 Net Change in Cash and Cash Equivalents (Unaudited) | Activity | Three months ended Aug 31, 2022 | Three months ended Aug 31, 2021 | | :--- | :--- | :--- | | Net operating activities | $(30,886) | $29,200 | | Net investing activities | $(834,604) | $(467,801) | | Net financing activities | $35,291 | $3,833 | | **Net change in cash** | **$(830,199)** | **$(434,768)** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes clarify interim financial statement preparation, revenue recognition policies, and inventory composition - In the three months ended August 31, 2022, **61% of revenue** was recognized over time, while **39%** was recognized at a point in time, compared to **66%** and **34%**, respectively, for the same period in 2021[18](index=18&type=chunk) - The company's inventory is primarily composed of work-in-process, which stood at **$5,137,526** as of August 31, 2022[14](index=14&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=11&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong Q1 FY2023 performance to increased net revenues, improved gross margin, and growth in key market sectors [Results of Operations](index=11&type=section&id=Results%20of%20Operations) Net revenues and gross profit significantly increased for the quarter ended August 31, 2022, driven by U.S. sales and specific sector growth, despite a decline in Asia sales Q1 FY2023 vs Q1 FY2022 Performance | Metric | Q1 2022 | Q1 2021 | Change Amount | Change Percent | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $9,091,000 | $7,308,000 | $1,783,000 | 24% | | Gross Profit | $3,385,000 | $1,872,000 | $1,513,000 | 81% | | Gross Margin | 37% | 26% | - | - | - The sales order backlog increased by **19% to $23.0 million** at August 31, 2022, from **$19.4 million** at August 31, 2021[30](index=30&type=chunk) Sales by Geographic Region (% of Total Net Revenue) | Region | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | USA | 82% | 70% | | Asia | 10% | 20% | | Other | 8% | 10% | [Capital Resources and Financial Condition](index=13&type=section&id=Capital%20Resources%20and%20Financial%20Condition) The company's liquidity relies on operations, with increased capital expenditures and a rise in Days Sales Outstanding, though management expects sufficient cash flow - Capital expenditures for the quarter were **$833,000**, compared to **$462,000** in the prior-year period, with commitments for an additional **$1,700,000** over the next twelve months[38](index=38&type=chunk) - Days Sales Outstanding (DSO) increased from **42 days** at May 31, 2022, to **58 days** at August 31, 2022, due to a **31% increase** in the accounts receivable balance[42](index=42&type=chunk)[43](index=43&type=chunk) - Management believes cash flows from operations are sufficient to fund ongoing operations and capital improvements for the next twelve months[49](index=49&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=15&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Taylor Devices, Inc. is exempt from providing market risk disclosures - Smaller reporting companies are not required to provide the information called for by this item[50](index=50&type=chunk) [Controls and Procedures](index=15&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of August 31, 2022, with no material changes to internal controls - Management concluded that as of August 31, 2022, the company's disclosure controls and procedures were effective[51](index=51&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's control over financial reporting[52](index=52&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=16&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no legal proceedings beyond routine litigation incidental to its business - There are no legal proceedings except for routine litigation incidental to the business[53](index=53&type=chunk) [Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, Taylor Devices, Inc. is exempt from providing risk factor disclosures - Smaller reporting companies are not required to provide the information called for by this item[53](index=53&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=16&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not engage in unregistered equity security sales or share repurchases during the fiscal quarter - The Company sold no equity securities during the fiscal quarter ended August 31, 2022 that were not registered under the Securities Act[54](index=54&type=chunk) - No shares were repurchased during the quarter ended August 31, 2022[54](index=54&type=chunk) [Defaults Upon Senior Securities](index=17&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[55](index=55&type=chunk) [Mine Safety Disclosures](index=17&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[55](index=55&type=chunk) [Other Information](index=17&type=section&id=Item%205.%20Other%20Information) The company reports no undisclosed Form 8-K information or material changes to board nomination procedures - None[55](index=55&type=chunk) [Exhibits](index=17&type=section&id=Item%206.%20Exhibits) The report lists various exhibits, including CEO and CFO certifications and XBRL taxonomy documents - Exhibits filed include CEO and CFO certifications and XBRL data files[55](index=55&type=chunk)[56](index=56&type=chunk) Report of Independent Registered Public Accounting Firm [Review of Interim Financial Information](index=18&type=section&id=Review%20of%20Interim%20Financial%20Information) The independent registered public accounting firm reviewed the interim financial information and found no material modifications needed for GAAP conformity - The accounting firm stated: "Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America"[58](index=58&type=chunk) - The review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB) and is substantially less in scope than an audit[60](index=60&type=chunk) Signatures [Authorization](index=19&type=section&id=Authorization) The report was duly signed and authorized on September 30, 2022, by the Chief Executive Officer and Chief Financial Officer - The report was signed on September 30, 2022, by the Chief Executive Officer and Chief Financial Officer[64](index=64&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 F O R M 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended May 31, 2022 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) NY 16-0797789 (State or other jurisdiction of i ...