Taylor Devices(TAYD) - 2024 Q2 - Quarterly Report

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]