Taylor Devices(TAYD) - 2025 Q2 - Quarterly Report

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]