Taylor Devices(TAYD) - 2022 Q1 - Quarterly Report

Revenue and Sales Performance - Net revenue for the three months ended August 31, 2021, was $7,308,000, representing a 27% increase compared to $5,760,000 in the same period of 2020[27]. - The company recorded a 132% increase in revenues from long-term construction projects compared to the previous year, with 26 projects in process versus 19 last year[27]. - Total sales in the U.S. increased by 34%, while sales to Asia decreased by 9% compared to the prior year[27]. Profitability and Expenses - Gross profit for the same period was $1,590,000, with a gross margin of 22%, down from 27% in the prior year, attributed to increased R&D, material, and labor costs[28]. - Selling, general and administrative expenses rose to $1,472,000, an 8% increase from $1,363,000 in the previous year, with outside commissions decreasing by 10%[31]. - Operating income for the three months ended August 31, 2021, was $118,000, a 38% decrease from $191,000 in the same period last year[32]. Backlog and Orders - The company's backlog increased to 165 open sales orders with a total sales value of $19.4 million, a 50% increase from 110 orders valued at $10.3 million last year[29]. - The backlog of sales orders decreased to $19.4 million from $22.0 million at the prior year-end, with $9.8 million on projects already in progress[50]. Accounts and Inventory Management - Accounts receivable decreased by 18% to $2,756,000 from $3,380,000, while costs and estimated earnings in excess of billings increased by 119% to $3,287,000[44]. - The company's inventory as of August 31, 2021, was $5,467,000, a decrease of 6% from $5,835,000 at the prior year-end[41]. - Accounts receivable decreased by 18% from the prior year-end, totaling $2,756,000 as of August 31, 2021, with a DSO reduction from 42 days to 34 days[45]. Capital Expenditures and Financial Position - Capital expenditures for the three months ended August 31, 2021, were $462,000, up from $244,000 in the same period of the prior year[39]. - Accounts payable increased by 9% to $1,946,000 as of August 31, 2021, while accrued commissions rose by 71% to $460,000 due to increased commissionable sales[51]. - Other current liabilities decreased by 26% to $1,266,000, primarily due to a reduction in customer advance payments[51]. Cash Flow and Liquidity - Management believes cash flows from operations are sufficient to fund ongoing operations and capital improvements for the next twelve months[52]. - The liquidity of the company remains strong, although management is concerned about potential impacts from the COVID-19 pandemic on global economies[54]. - The company has not experienced significant delays in receiving raw materials or components, maintaining strong supply chain management[55]. Project Progress - The aggregate percent complete for projects in progress increased to 47% from 32%[50]. - CIEB balance increased to $3,287,000, more than double the prior year-end balance, with 24% billed to customers in the current fiscal quarter[47]. - The company expects to bill the entire CIEB amount during the next twelve months as projects progress[47].