TAYLOR DEVICES, INC.
For the period ended Feb 28, 2025. Filed Mar 28, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Feb 28, 2025 · Filed Mar 28, 2025
TAYD$56.87+3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-11-30; filed 2025-01-03.
0001376474-25-000012
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-02-28; filed 2025-03-28.
0001376474-25-000293
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 54 previous paragraphs and 54 current paragraphs.
29 unchanged; 23 reworded; 2 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 17 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
Research and development costs declined $2,000 from the same period in the prior year.
Current report
Research and development costs increased $39,000 from the prior year.
Removed paragraphs (2)
Previous report
Research and development costs declined $41,000 from the same period in the prior year due to a change in the mix of engineering resource driven projects, inclusive of customer funded development.
Previous report
Research and development costs increased $19,000 from the prior year due to a change in the mix of engineering resource driven projects, inclusive of customer funded development.
Reworded paragraphs (23)
Previous wording
For the six months ended November 30, 2024(All figures discussed are for the six months ended November 30, 2024, as compared to the six months ended November 30, 2023).
Current wording
For the nine months ended February 28, 2025(All figures discussed are for the nine months ended February 28, 2025, as compared to the nine months ended February 29, 2024).
Previous wording
The Company's consolidated results of operations showed a $0.1 million decrease in net revenues and a $0.1 million decrease in net income. Revenues recorded in the six-month period ended November 30, 2024 for long-term projects (“Projects”) were 10% higher than the level recorded in the prior year. The Company had 27 Projects in process during the six-month period ended November 30, 2024 as compared to 29 during the same period last year. Revenues recorded in the six-month period ended November 30, 2024 for other-than long-term projects (non-projects) were 14% lower than the level recorded in the prior year. Total sales within the U.S. during the six-month period ended November 30, 2024 decreased 7% from the same period last year. Total sales to Asia during the six-month period ended November 30, 2024 increased 37% from the same period of the prior year. The shift in domestic and international sales concentration from the prior year is attributable to normal changes in structural project activity. Sales increases were recorded over the same period last year to industrial customers (43%) with decreases to customers involved in construction of buildings and bridges (-12%). Sales to customers in aerospace / defense were consistent with the same period last year.
Current wording
The Company's consolidated results of operations showed a 5% decrease in net revenues and a 12% decrease in net income. Revenues recorded in the nine-month period ended February 28, 2025 for long-term projects (“Projects”) were 2% higher than the level recorded in the prior year. The Company had 31 Projects in process during the nine-month period ended February 28, 2025 as compared to 34 during the same period last year. Revenues recorded in the nine-month period ended February 28, 2025 for other-than long-term projects (non-projects) were 16% lower than the level recorded in the prior year. Total sales within the U.S. during the nine-month period ended February 28, 2025 decreased 13% from the same period last year. Total sales outside the U.S. during the nine-month period ended February 28, 2025 increased 61% from the same period of the prior year. The shift in domestic and international sales concentration from the prior year is attributable to normal changes in structural project activity. Sales increases were recorded over the same period last year to industrial customers (36%) with decreases to customers involved in construction of buildings and bridges (-8%) and aerospace / defense (-10%). The decrease in sales from the prior year was attributed to differences in the timing of backlog conversion to revenue.
Previous wording
The gross profit as a percentage of net revenue of 47% in the six-month period ended November 30, 2024 is two percentage points higher than the same period of the prior year (45%).
Current wording
The gross profit as a percentage of net revenue of 45% in the nine-month period ended February 28, 2025 is one percentage point lower than the same period of the prior year (46%).
Previous wording
At November 30, 2023, the Company had 141 open sales orders in our backlog with a total sales value of $35.5 million. At November 30, 2024, the Company had 156 open sales orders in our backlog with a total sales value of $34.5 million. The Company expects to recognize revenue for the majority of the backlog during fiscal years 2025 and 2026.
Current wording
At February 29, 2024, the Company had 131 open sales orders in our backlog with a total sales value of $30.2 million. At February 28, 2025, the Company had 146 open sales orders in our backlog with a total sales value of $33.3 million. The Company expects to recognize revenue for the majority of the backlog during fiscal years 2025 and 2026.
Previous wording
The Company's backlog, revenues, gross profits, and net income fluctuate from period to period. The changes in the six-month period ended November 30, 2024, compared to the same period in the prior year, are not necessarily representative of future results.
Current wording
The Company's backlog, revenues, gross profits, and net income fluctuate from period to period. The changes in the nine-month period ended February 28, 2025, compared to the same period in the prior year, are not necessarily representative of future results.
Previous wording
Net revenue by geographic region, as a percentage of total net revenue for the six-month periods ended November 30, 2024 and 2023, is as follows:
Current wording
Net revenue by geographic region, as a percentage of total net revenue for the nine-month periods ended February 28, 2025 and February 29, 2024, is as follows:
Previous wording
Selling, general and administrative expenses during the six-month period ended November 30, 2024 increased by 7% from the same period in the prior year. This change is primarily due to increased stock option expense. The Company expenses stock options using the fair value recognition provisions of the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”). The Company recognized $731,000 and $301,000 of compensation cost for the six-month periods ended November 30, 2024 and 2023, respectively.
Current wording
Selling, general and administrative expenses during the nine-month period ended February 28, 2025 increased by 1% from the same period in the prior year. The Company expenses stock options using the fair value recognition provisions of the Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”). The Company recognized $731,000 (46,800 options granted) and $301,000 (42,000 options granted) of compensation cost for the nine-month periods ended February 28, 2025 and February 29, 2024, respectively.
Previous wording
Operating income was $3,849,000 for the six-month period ended November 30, 2024, lower than the $3,973,000 in the same period of the prior year.
Current wording
Operating income was $5,869,000 for the nine-month period ended February 28, 2025, lower than the $6,966,000 in the same period of the prior year. The decrease in operating income was attributed to lower gross margin associated with reduced revenue.
Previous wording
Other income was $685,000 for the six-month period ended November 30, 2024, a 10% decrease from the same period of the prior year. This decrease was driven by short-term investment interest income.
Current wording
Other income was $1,010,000 for the nine-month period ended February 28, 2025, a 10% decrease from the same period of the prior year. This decrease was driven by short-term investment interest income.
Previous wording
The Company's consolidated results of operations showed a 17% decrease in net revenues and 47% decrease in net income. Revenues recorded in the quarter ended November 30, 2024 for Projects were 8% lower than the level recorded in the prior year. The Company had 22 Projects in process during the quarter ended November 30, 2024 as compared to 16 during the same period last year. Revenues recorded in the quarter ended November 30, 2024 for other-than long-term projects (non-projects) were 31% lower than the level recorded in the prior year. Total sales within the U.S. during the quarter ended November 30, 2024 decreased 21% from the same period last year. Total sales to Asia during the quarter ended November 30, 2024 increased 34% from the same period of the prior year. Sales decreases were recorded over the same period last year to customers in aerospace / defense (-19%), customers involved in construction of buildings and bridges (-19%) and industrial customers (-2%). The decrease in sales from the prior year was attributed to differences in the timing of backlog conversion to revenue.
Current wording
The Company's consolidated results of operations showed a 14% decrease in net revenues and 26% decrease in net income. Revenues recorded in the quarter ended February 28, 2025 for Projects were 11% lower than the level recorded in the prior year. The Company had 21 Projects in process during the quarter ended February 28, 2025 as compared to 16 during the same period last year. Revenues recorded in the quarter ended February 28, 2025 for other-than long-term projects (non-projects) were 18% lower than the level recorded in the prior year. Total sales within the U.S. during the quarter ended February 28, 2025 decreased 23% from the same period last year. Total sales outside the U.S. during the quarter ended February 28, 2025 increased 115% from the same period of the prior year. The shift in domestic and international sales concentration from the prior year is attributable to normal changes in structural project activity. Sales decreases were recorded over the same period last year to customers in aerospace / defense (-25%), customers involved in construction of buildings and bridges (-1%) with sales increases to industrial customers (24%). The decrease in sales from the prior year was attributed to differences in the timing of backlog conversion to revenue.
Previous wording
The gross profit as a percentage of net revenue of 45% in the quarter ended November 30, 2024 is two percentage points lower than the same period of the prior year (47%).
Current wording
The gross profit as a percentage of net revenue of 43% in the quarter ended February 28, 2025 is four percentage points lower than the same period of the prior year (47%).
Previous wording
Selling, general and administrative expenses during the quarter ended November 30, 2024 increased 6% from the same period in the prior year. This change is primarily due to increased stock option expense. The Company expenses stock options using the fair value recognition provisions of the FASB ASC. The Company recognized $731,000 and $301,000 of compensation cost for the three-month periods ending November 30, 2024 and 2023, respectively.
Current wording
Selling, general and administrative expenses during the quarter ended February 28, 2025 decreased 11% from the same period in the prior year. This change is primarily due to lower incentive compensation expense.
Previous wording
Operating income was $944,000 for the three months ended November 30, 2024, lower than the $2,054,000 in the same period of the prior year. The decrease in Operating income was attributed to lower revenue and increased stock option expense.
Current wording
Operating income was $2,020,000 for the three months ended February 28, 2025, lower than the $2,993,000 in the same period of the prior year. The decrease in operating income was attributed to lower revenue and shift in sales mix.
Previous wording
Other income was $308,000 for the three months ended November 30, 2024, a 23% decrease from the same period of the prior year. This decrease was driven by short-term investment interest income.
Current wording
Other income was $326,000 for the three months ended February 28, 2025, a 10% decrease from the same period of the prior year. This decrease was driven by short-term investment interest income.
Previous wording
Capital expenditures for the six-month period ended November 30, 2024 were $971,000 compared to $545,000 in the same period of the prior year. As of November 30, 2024, the Company has commitments for capital expenditures totaling $881,000 during the next twelve months.
Current wording
Capital expenditures for the nine-month period ended February 28, 2025 were $1,158,000 compared to $755,000 in the same period of the prior year. As of February 28, 2025, the Company has commitments for capital expenditures totaling $2,017,000 during the next twelve months.
Previous wording
NOTE: Inventory turnover is annualized for the six-month period ended November 30, 2024.
Current wording
NOTE: Inventory turnover is annualized for the nine-month period ended February 28, 2025.
Previous wording
Inventory, at $8,611,000 as of November 30, 2024, is $1,099,000 more than the prior year-end level of $7,512,000. As of November 30, 2024, approximately 88% of the inventory was work in process, 2% was finished goods, and 10% was raw materials.
Current wording
Inventory, at $8,805,000 as of February 28, 2025, is $1,293,000 more than the prior year-end level of $7,512,000. As of February 28, 2025, approximately 87% of the inventory was work-in-process, 2% was finished goods, and 11% was raw materials.
Previous wording
Maintenance and other inventory represent stock that is estimated to have a product life cycle in excess of twelve months. This stock represents certain items the Company is required to maintain for service of products sold and items that are generally subject to spontaneous ordering. This inventory is particularly sensitive to technological obsolescence in the near term due to its use in industries characterized by the continuous introduction of new product lines, rapid technological advances and product obsolescence. Management of the Company has recorded an allowance for potential inventory obsolescence. The provision for potential inventory obsolescence was zero and $144,000 for the six-month periods ended November 30, 2024 and 2023, respectively.
Current wording
Maintenance and other inventory represent stock that is estimated to have a product life cycle in excess of twelve months. This stock represents certain items the Company is required to maintain for service of products sold and items that are generally subject to spontaneous ordering. This inventory is particularly sensitive to technological obsolescence in the near term due to its use in industries characterized by the continuous introduction of new product lines, rapid technological advances and product obsolescence. Management of the Company has recorded an allowance for potential inventory obsolescence. The provision for potential inventory obsolescence was zero and $369,000 for the nine-month periods ended February 28, 2025 and February 29, 2024, respectively.
Previous wording
Accounts receivable of $8,248,000 as of November 30, 2024 includes $49,000 of an allowance for doubtful accounts (“Allowance”). The accounts receivable balance as of May 31, 2024 of $5,212,000 included an Allowance of $29,000. The number of an average day's sales outstanding in accounts receivable (“DSO”) increased from 39 days at May 31, 2024 to 87 days at November 30, 2024. The Accounts Receivable and DSO increase were the result of delayed collections for structural project invoices. The DSO is a function of (1) the level of sales for an average day (for example, total sales for the past three months divided by 90 days) and (2) the level of accounts receivable at the balance sheet date. The Company expects to collect the net accounts receivable balance during the next twelve months.
Current wording
Accounts receivable of $6,717,000 as of February 28, 2025 includes $124,000 of an allowance for estimated credit losses (“Allowance”). The accounts receivable balance as of May 31, 2024 of $5,212,000 included an Allowance of $29,000. The number of an average day's sales outstanding in accounts receivable (“DSO”) increased from 39 days at May 31, 2024 to 57 days at February 28, 2025. The Accounts Receivable and DSO increase were the result of delayed collections for structural project invoices. The DSO is a function of (1) the level of sales for an average day (for example, total sales for the past three months divided by 90 days) and (2) the level of accounts receivable at the balance sheet date. The Company expects to collect the net accounts receivable balance during the next twelve months.
Previous wording
As noted above, CIEB represents revenues recognized in excess of amounts billed. Whenever possible, the Company negotiates a provision in sales contracts to allow the Company to bill, and collect from the customer, payments in advance of shipments. Unfortunately, such provisions are often not possible. The $3,018,000 balance in this account at November 30, 2024 is 31% lower than the prior year-end balance. This decrease is the result of normal flow of the Projects through production with billings to the customers as permitted in the related contracts. 82% of the CIEB balance as of the end of the last fiscal quarter, August 31, 2024, was billed to those customers in the fiscal quarter ended November 30, 2024. The remainder will be billed as the Projects progress, in accordance with the terms specified in the various contracts.
Current wording
As noted above, CIEB represents revenues recognized in excess of amounts billed. Whenever possible, the Company negotiates a provision in sales contracts to allow the Company to bill, and collect from the customer, payments in advance of shipments. Unfortunately, such provisions are often not possible. The $3,230,000 balance in this account at February 28, 2025 is 26% lower than the prior year-end balance. This decrease is the result of normal flow of the Projects through production with billings to the customers as permitted in the related contracts. 77% of the CIEB balance as of the end of the last fiscal quarter, November 30, 2024, was billed to those customers in the fiscal quarter ended February 28, 2025. The remainder will be billed as the Projects progress, in accordance with the terms specified in the various contracts.
Previous wording
As noted above, BIEC represents billings to customers in excess of revenues recognized. The $3,708,000 balance in this account at November 30, 2024 is down 34% from the $5,601,000 balance at the end of the prior year. The balance in this account fluctuates in the same manner and for the same reasons as the CIEB, discussed above. Final delivery of product under these contracts is expected to occur during the next twelve months.
Current wording
As noted above, BIEC represents billings to customers in excess of revenues recognized. The $3,233,000 balance in this account at February 28, 2025 is down 42% from the $5,601,000 balance at the end of the prior year. The balance in this account fluctuates in the same manner and for the same reasons as the CIEB, discussed above. Final delivery of product under these contracts is expected to occur during the next twelve months.
Previous wording
The Company's backlog of sales orders at November 30, 2024 is $34.5 million, up from $33.1 million at the end of the prior year. $13.1 million of the Company’s backlog as of November 30, 2024 was for Projects already in progress.
Current wording
The Company's backlog of sales orders at February 28, 2025 is $33.3 million, up from $33.1 million at the end of the prior year. $13.3 million of the Company’s backlog as of February 28, 2025 was for Projects already in progress.
Previous wording
Accounts payable, at $857,000 as of November 30, 2024, is 40% lower than the prior year-end. Accrued expenses decreased 48% from the prior year-end, to $2,497,000 due to the payout of fiscal year 2024 incentive compensation. The Company expects the accrued amounts to be paid or applied during the next twelve months.
Current wording
Accounts payable, at $1,115,000 as of February 28, 2025, is 23% lower than the prior year-end. Accrued expenses increased 71% from the prior year-end, to $7,997,000 due to the receipt of prepayments for a project not started. The Company expects the accrued amounts to be paid or applied during the next twelve months.