TAYLOR DEVICES INC

Previous 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.

Current wording

The Company's consolidated results of operations showed a 15% decrease in net revenues and an 18% decrease in net income. Revenues recorded in the quarter ended August 31, 2025 for long-term projects were 23% lower than the level recorded in the prior year. The Company had 25 long-term projects in process during the quarter ended August 31, 2025 as compared to 23 during the same period last year. Revenues recorded in the quarter ended August 31, 2025 for other-than long-term projects were 2% lower than the level recorded in the prior year. Total sales within the U.S. during the quarter ended August 31, 2025 decreased 9% from the same period last year. Total sales to Asia during the quarter ended August 31, 2025 decreased 44% from the same period of the prior year. The change in domestic and international sales concentration from the prior year is attributed to normal fluctuations in structural project activity. Sales decreases were recorded over the same period last year to customers in aerospace / defense (26%) and industrial customers (19%) with an increase to customers involved in construction of buildings and bridges (11%).

Previous 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%).

Current wording

The gross profit as a percentage of net revenue of 45% in the quarter ended August 31, 2025 is two percentage points lower than the same period of the prior year (47%).

Previous 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.

Current wording

At August 31, 2024, the Company had 118 open sales orders in our backlog with a total sales value of $28.4 million. At August 31, 2025, the Company had 127 open sales orders in our backlog, with a total sales value of $27.9 million. The Company expects to recognize revenue for the majority of the backlog during the current fiscal year.

Previous 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.

Current wording

The Company's backlog, revenues, gross profits, and net income fluctuate from period to period. The changes in the quarter ended August 31, 2025 compared to the same period in the prior year are not necessarily representative of future results.

Previous 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.

Current wording

Selling, general and administrative expenses during the quarter ended August 31, 2025 decreased 16% from the same period in the prior year. This change is primarily due to lower employee incentive compensation accruals.

Previous 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.

Current wording

Operating income was $2,245,000 for the three-month period ended August 31, 2025, lower than the $2,905,000 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 $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.

Current wording

Other income was $384,000 for the three-month period ended August 31, 2025, a 2% increase from the same period of the prior year. This increase was driven by short-term investment interest income.

Previous 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.

Current wording

Capital expenditures for the three months ended August 31, 2025 were $185,000 compared to $247,000 in the same period of the prior year. As of August 31, 2025, the Company has commitments for capital expenditures totaling $2,751,000 during the next twelve months. The Company is evaluating additional capital expenditures to expand capacity.

Previous wording

NOTE: Inventory turnover is annualized for the nine-month period ended February 28, 2025.

Current wording

NOTE: Inventory turnover is annualized for the three-month period ended August 31, 2025.

Previous 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.

Current wording

Inventory, at $8,505,000 as of August 31, 2025, is $392,000 higher than the prior year-end level of $8,113,000. Approximately 88% of the inventory as of August 31, 2025 was work-in-process, 3% was finished goods, and 9% 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 $369,000 for the nine-month periods ended February 28, 2025 and February 29, 2024, 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 for both the three-month periods ended August 31, 2025 and 2024.

Previous 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.

Current wording

Accounts receivable of $4,524,000 as of August 31, 2025 includes $484,000 of an allowance for estimated credit losses (“Allowance”). The accounts receivable balance as of May 31, 2025 of $5,600,000 included an Allowance of $564,000. The decrease to the Allowance was due to collections against an overdue structural project balance. After discussions with the customer regarding payment of this balance, the overdue balance has been reduced from $751,000 at prior year end to $591,000 at August 31, 2025. The number of an average day's sales outstanding in accounts receivable (“DSO”) increased from 32 days at May 31, 2025 to 41 days at August 31, 2025. 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 $3,230,000 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.

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, these contract provisions are often not possible to obtain. The $4,704,000 balance in CIEB at August 31, 2025 is 12% lower than the prior year-end balance. This decrease is the result of normal flow of the long-term projects through production with billings to the customers as permitted in the related contracts. 36% of the CIEB balance as of the end of the last fiscal quarter, May 31, 2025, was billed to those customers in the quarter ended August 31, 2025. The remainder will be billed as the projects progress, in accordance with the terms specified in the various contracts.

Previous wording

The balances in this account are comprised of the following components:

Current wording

The balances in CIEB are comprised of the following components:

Previous 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.

Current wording

As noted above, BIEC represents billings to customers in excess of revenues recognized. The $2,865,000 balance in BIEC at August 31, 2025 is down 35% from the $4,382,000 balance at the end of the prior year. The balance in BIEC 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 balances in this account are comprised of the following components:

Current wording

The balances in BIEC are comprised of the following components:

Previous 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.

Current wording

The Company's backlog of sales orders at August 31, 2025 is $27.9 million, up from $27.1 million at the end of the prior year. Of the Company’s backlog as of August 31, 2025, $9.5 million was on projects already in progress.

Previous 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.

Current wording

Accounts payable, at $1,032,000 as of August 31, 2025, is 8% lower than the prior year-end. Accrued expenses decreased 47% from the prior year-end, to $2,143,000, due to the payout of fiscal year 2025 incentive compensation. The Company expects the accrued amounts to be paid or applied during the next twelve months.