Taylor Devices Q2 Earnings Soar Y/Y on Aerospace Demand

Core Insights - Taylor Devices, Inc. (TAYD) shares have increased by 7.2% since the earnings report for the quarter ended November 30, 2025, outperforming the S&P 500 index, which grew by 0.5% during the same period [1] - The stock has seen a significant rise of 39.3% over the past month compared to the S&P 500's 0.2% growth, indicating strong investor optimism [1] Financial Performance - For the fiscal second quarter, earnings per share rose to 64 cents, up from 34 cents in the prior-year quarter [2] - Net sales reached $11.6 million, a 36% increase from $8.5 million in the same period last year [2] - Net income nearly doubled, increasing by 90% to $2 million from $1.1 million [2] - Gross profit for the quarter was $5.5 million, up from $3.9 million a year earlier, with gross margin expanding to 47% from 45% [2] Revenue Drivers and Customer Segments - The increase in quarterly revenues was primarily driven by a 91% year-over-year boost in short-duration, non-long-term projects, while long-term project revenues rose by 7% [3] - Domestic sales surged by 45%, while international sales declined by 30%, attributed to normal fluctuations in structural project activity [3] - Sales in the aerospace/defense sector jumped by 58%, and industrial customer sales rose by 29% [3] Customer Composition - Aerospace/defense accounted for 69% of sales in the quarter, up from 59% a year ago, while structural sales comprised 21% and industrial customers made up 10% [4] - The total backlog at the end of the quarter was $25.1 million across 134 open sales orders, down from $34.5 million a year earlier [4] Expense Trends and Operating Performance - Research and development (R&D) spending rose to $0.2 million, an increase of 108% from $0.1 million a year ago, representing 1.8% of quarterly net revenues compared to 1.2% previously [5] - Selling, general and administrative (SG&A) expenses amounted to $3 million, a 6% year-over-year increase, but declined as a percentage of revenue to 26% from 33% [6] - Operating income doubled to $2.2 million, up from $0.9 million in the same period a year ago, driven by higher revenue and improved gross margins [7] Management Commentary - Management noted that quarterly gains were due to favorable backlog conversion into revenues, particularly for short-term projects [8] - The decline in international sales reflects natural variability in demand across regions [8] Future Outlook - The company invested $1.5 million in capital expenditures during the six-month period and plans an additional $1.7 million over the next twelve months to expand manufacturing capacity [9] - The growth in short-duration project revenues provided a temporary lift, while the mix of customer segments tilted more heavily toward aerospace/defense [10] - The backlog decline indicates successful project conversion but may require replenishment to sustain growth [10]