2 0 2 4
A N N U A L R E P O R T
TAYLOR DEVICES’ VISION STATEMENT
Taylor Devices, Inc. will be a Destination Employer of Choice where our self-empowered,
innovative, and talented workforce teams to successfully execute and deliver on
our stakeholder commitments while concurrently designing and qualifying the next
generation of Shock and Vibration Management Systems and Components to protect
life, platform, and structures throughout the world with the highest standard of integrity
and excellence resulting in profitable growth.
Fiscal year 2024 was another exceptionally good year for our Company as our Team’s disciplined adherence to, and execution
of, our prioritized growth and improvement campaigns resulted in the following achievements for FY24:
• Full year Bookings of $45.2M, 2nd highest in our company’s history (current record was set last year, FY23, at $49.1M
with the average over the prior 9 fiscal years at $32.6M)
• New record high full year Sales of $44.6M (prior record was $40.2M set last year, FY23, with the average over the prior 9
fiscal years at $31.8M)
• This has us entering FY25 with a Backlog of $33.1M, which is the highest in the company’s history (prior record was
$32.5M as we entered last year, FY23, with the average over the prior 9 fiscal years at $21.4M)
• New record high full year Net Income of $9.0M/20.2% of sales (prior record was $6.3M/15.6% of sales set last year,
FY23, with the averages over the prior 9 fiscal years at $3.5M/10.9% of sales)
• New record high Customer On-Time Delivery of 92% (prior record was 89% set last year, FY23)
• Capital expenditures of $1.1M for new manufacturing and testing equipment as well as the acquisition of PUMPKIN™
Mounts intellectual property
• R&D investment of over $0.4M in support of our targeted future growth
• 25 new members added to our TDI Team in FY24 in support of our targeted growth
While all three of our customer facing product groups; Aerospace/
Defense, Structural and Industrial, once again contributed
significantly to our results, our Aerospace/Defense product group
had another particularly strong year finishing with bookings at
$26.7M, second highest in the company’s history with the current
record of $30.2M set last year, FY23, and the average over the prior
9 fiscal years at $14.8M per year. Additionally, sales finished at
$26.7M, significantly exceeding the previous record of $15.6M set
last year, FY23, and well above the average over the prior 9 fiscal
years at $13.3M. Our Structural and Industrial product group’s
combined full year bookings and sales finished below last year’s
levels due primarily to higher interest and unfavorable foreign
exchange rate dynamics.
I am also very happy to report that FY24 continues our very
favorable trend of steady year-on-year increases in firm order
backlog concurrent with year-on-year increases in sales and profit,
now for the past 4 fiscal years.
The significantly improved profitability of our business is a testament to the continuing great work our Cross-Functional Team
is doing to drive waste out of our processes as they work together to solve our customers most difficult shock and vibration
challenges with our elegantly innovative custom engineered products that we then manufacture, validate and supply on time.
As we very proudly enter our 70th year in business this FY25, we will continue to invest in our people, technology, processes
and facilities which I am confident will serve us well path forward.
TO OUR STOCKHOLDERS,
I am also very happy to
report that FY24 continues
our very favorable trend
of steady year-on-year
increases in firm order
backlog concurrent with
year-on-year increases in
sales and profit, now for
the past 4 fiscal years.
Sincerely,
Timothy J. Sopko, Chief Executive Officer
TAYLOR DEVICES, INC.
Dear Shareholders,
As demonstrated by the year-end numbers, the Company continues on its plan for profitable
growth. Although we had a dip in total bookings year-on-year ($45.2M in FY24 vs. $49.1 in FY23),
we did start FY25 with a record backlog of $33.1M. The bookings include $3.7M for Industrial
Products, $14.8M for Structural Products and $26.7M for Aerospace & Defense Products.
Interesting to note is that over the last year or so, the Company has enjoyed a substantial increase
in the sales of aerospace and defense products in terms of both total sales and in percentage of
total sales as compared to structural and industrial products. Indeed, sales have jumped to $26.7M in
this product line, up from $15.6M in FY23. Since FY22, sales have more than doubled, and for FY24,
this constitutes nearly 60% of our total sales. Recent history has shown that this product line had been generating about
40% of total sales. As usual within this sector, and as I stated in last year’s annual report, we continue to support many
mature programs while being awarded several new development programs by new and legacy customers that we hope will
provide sustained revenue for years to come. Additionally, our strategy for generating new sales and continuing to attack
strategic programs will help this trend to continue. Personally, it is quite satisfying for me to see that products that we
developed back in the 1980’s when I was a young engineer are still generating significant business for the Company today.
Featured in this annual report is a large project that we recently completed at 651 Gateway in San Francisco, CA. This
was a voluntary seismic upgrade to a 300,000 square foot, 17 story building that was built in the late 1980’s. The upgrade
converted its previous standard office space to Class A lab space. Taylor Devices provided a total of 127 viscous dampers
that were placed in a staggered pattern throughout the height of the building. As shown in the pictures, the dampers are
quite visible to occupants and passers-by alike as the building has a glass facade and the dampers are not hidden behind
drywall. Please enjoy the pictures as the dampers show quite well!
As Taylor Devices is now in its 70th year, we thought it would be interesting to feature some content from old annual reports
to exemplify how the Company has changed over so many years. Back in 1962, the Company had sales of $334K and a net
loss of $77K. Then, in 1964, we had sales of $537K and lost $166K. By 1991, we recorded a net profit of $52K on sales of
$4.4M. Throughout our history of growth, there sure were some lean years that we struggled through, but perseverance and
hard work paid off. We sure have come a long way!
As we are continuing to have a physical AGM, please join us at the meeting in Amherst, NY in October where we will be
presenting some of the great progress that continues at both our campuses in North Tonawanda, NY.
Sincerely,
Alan Klembczyk, President
TAYLOR DEVICES, INC.
S A L E S
GROWING OUR PORTFOLIO
Aerospace and Defense...sales have jumped to $26.7M in this
product line, up from $15.6M in FY23. Since FY22, sales have
more than doubled, and for FY24, this constitutes nearly 60% of
our total sales.
“
“
Clipped from the Taylor Devices
1964 Annual Report, this page
showcases some of our products
and projects we were working
on at the time. Manufacturing,
transportation including the
railroad industry, aerospace,
electronics, and even nuclear
reactors were some of the
main markets for the Company.
Customers included Vought,
Pratt & Whitney, Sikorsky, the
U.S. Navy, Sperry, NASA, and
many more. It wasn’t until
the 1990s, that our dampers
were developed for structural
applications. 60 years later,
some of these remain among
our most valued customers
today!
From the 1964 Annual Report:
“Most companies
have one product and
diversify through external
acquisition. Taylor has
an entry in the markets
noted. Acceptance has
been difficult and costly,
but each of these markets
in itself could create a
substantial corporation.”
AS WE HEAD INTO OUR 70 TH YEAR OF BUSINESS
REFLECTING ON OUR
PAST
LOOKING TOWARD OUR
FUTURE
F E A T U R E D P R O J E C T
651 Gateway
651 Gateway
s o u t h s a n f r a n c i s c o , c a
Upgrading this structure from standard office space
to Class A lab space provided a unique opportunity
to include a voluntary seismic upgrade along
with MEP and Architectural improvements. The
structure, built in the late 1980s, uses both Eccentric
Braced Frames and perimeter Pre-Northridge
Moment Frames as the lateral systems, both of
which contained deficiencies common to those
construction eras. Dampers reduced the story drifts
significantly, addressing a soft story mechanism
and reducing beam-column rotations to eliminate
any connection or foundation upgrades. Dampers
were placed in a staggered pattern up the height of
the building to reduce the accumulation of force in
any given location.
Size
Stories
Building Type
Number of Dampers
Structural Engineer
General Contractor
Owner
300,000 sqft
17
Commercial
127
IMEG & Maffei
Truebeck Construction
Boston Properties
O P E R A T I O N S
CONTINUOUSLY IMPROVING
The entire Taylor Team pulled together to achieve these
results, enabled by better systems, processes, and training.
“
“
Dear Shareholders,
The Taylor Devices Operational Excellence Journey has improved year over year and continued into
FY24. To start, we have accomplished $44.6m in assembled, tested, and shipped revenue, which
is a Taylor record and an 11% increase from FY23. We have also achieved a customer order on-
time delivery of 92%, which is another Taylor record and a 3% improvement from FY23. Not only
are we improving on our deliveries, but also making sure past due orders are completed quickly.
Our past due order lines dropped to a monthly average of 8, which is a 10% reduction from the FY23
monthly average. Finally, we are making our facilities safer for our employees. We have reduced our
number of safety incidents/injuries; CY24 is on pace for 30% fewer incidents/injuries from CY23.
The entire Taylor Team pulled together to achieve these results, enabled by better systems, processes, and training. Our
Continuous Improvement Program underpins our journey to improve all aspects of our business through various projects
accomplished by our team in FY24.
Many of these projects allowed us to become even more lean and efficient in many of our day-to-day operations. For example,
in our machine shop, we have completed dozens of machining setup and run time improvements, reducing job machining
time by 10-50%. Our Superfinisher is fully operational, saving 50% of labor time per finished rod. When it comes to assembly,
our Structural Baseplate Assembly process improved via material handling equipment leading to a safer and more efficient
process. After our products are assembled, our new Easy Arm crane with lift assist, which was installed on a Structural
Product Test Machine, provides a safer and more efficient process. We are adding new technology to our facilities including a
new 3D printer which was operationalized, resulting in improvement in the speed and quality of prints.
Along with becoming more efficient, we are also focused on reducing our carbon footprint. We have hired our first-ever full-
time Environmental, Health, & Safety (EHS) resource to help us improve our environmental management system. With that,
we have begun using reusable/recyclable packaging solutions developed for transporting parts to and from Outside Service
Vendors. In our machine shop, we installed a new environmentally friendly, water-based aqueous parts washer for in-process
cleaning and a new evaporator which reduced energy costs for that process by 50%. In an effort to improve delivery and
reduce costs, we joined a shipping consortium, resulting in a 25% reduction in targeted shipping costs.
Finally, many of these projects were fueled by a relentless focus to improve each and every day. Our Production Readiness
Review/Test Readiness Review (PRR/TRR) process was piloted and rolled out, proactively preventing assembly and test
issues on new products. We have completed numerous 5S Events, all leading to a safer and more efficient process in the
Medium Lathe work center, Head Cell, and Drop Test area. A High Energy Safety Team (HEST) was formed to examine and
approve modifications and additions to high-energy test equipment. We are well positioned to support Taylor Devices’ future
profitable growth plan, to the delight of our Shareholders, our Customers, and our team members.
Sincerely,
Todd Avery, Vice President of Operations
TAYLOR DEVICES, INC.
Our Fiscal
Year 2024 Operational
Results were underpinned
by a relentless focus on a
unique combination of projects
that support our Company’s
long-range strategic plan and
an engaged workforce that is
committed to our Customers
and each other.
UNMATCHED TESTING
CAPABILITIES
Besides manufacturing exceptional products for energy
management, one of the major capabilities we take great
pride in is our testing abilities. Testing has always been
important to us here at Taylor Devices, and a vital part of
our operations since opening in 1955.
Today, we have developed world-class facilities comprised
of 12 separate test systems including vertical drop
rails, hydraulic actuators for dynamic testing, and static
hydraulic test stands. These test machines are capable
of forces up to 4,000,000 lbs. and velocities of 600 in/sec
and provide acceptance and qualification testing on our
products according to strict customer requirements.
This photo was taken from our 1963 Annual Report
and shows a shock test being performed on a shock
absorber before being shipped to a customer.
We have achieved
an all-time high 92%
on-time delivery.
We have new
machinery to reduce
energy and become
more efficient.
We have improved
machining setup to
reduce run-times and
save costs.
Eric Roth using the new Easy Arm crane in one
of our testing machines.
Earnings per share went up to $2.68 as compared to $1.79 in FY23.
F I N A N C I A L S
STRENGTH IN THE NUMBERS
Dear Shareholders,
Fiscal year 2024 (FY24) financial performance continued to trend favorably. Revenue increased
11% over fiscal year 2023 (FY23) with a heavier concentration of Aerospace sales which were
up 71% from the prior year. Accordingly, domestic sales as a percentage of total increased to
86% versus 81% in FY23. The year-end backlog position is up 2% from May 2023 and is weighted
towards aerospace/defense customers at 72% versus 28% for commercial customers.
Gross Profit, which increased to $20.8 million, or 47% of sales, from $16.9 million or 42% of sales in
FY23, was favorably impacted by both Price and Cost actions. Management of costs has been facilitated
by recent investments in manufacturing capability. FY24 capital expenditures of $1.1 million continued to be focused on
machinery and equipment upgrades. Research and Development costs decreased to $0.4 million with the conclusion of the
Taylor Damped Moment Frame™ project. Engineering resources pivoted to support more funded research and development,
which increased 50% from FY23.
As a result of all the above, Net Income finished at $9.0 million, or 20% of sales, versus the prior year at $6.3 million or 16% of
sales. Earnings per share went up to $2.68 as compared to $1.79 in FY23.
The sales order backlog of $33.1 million as of May 31, 2024, along with increasing customer funded development activity,
provides a good launch point into the future. Our Balance Sheet remains strong and will allow us to continue making
investments that support sustained profitable growth.
Sincerely,
Paul Heary, Chief Financial Officer
TAYLOR DEVICES, INC.
Fiscal year 2024 financial performance continued to
trend favorably. Revenue increased 11% over fiscal year
2023 with heavier concentration of Aerospace sales...
“
“
2023
81%
11%
8%
2024
86%
10%
4%
USA
86%
OTHER 10%
ASIA
4%
CUSTOMER LOCATIONS
2023
10%
39%
51%
2024
60%
32%
8%
AEROSPACE / DEFENSE 60%
STRUCTURAL
32%
INDUSTRIAL
8%
CUSTOMER GROUPS
FISCAL YEAR 2024
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
HIGH $23.90
LOW $19.81
FISCAL YEAR 2023
HIGH $10.25
LOW $8.13
HIGH $23.79
LOW $15.30
HIGH $14.00
LOW $9.66
HIGH $37.50
LOW $21.98
LOW $10.50
HIGH $16.98
HIGH $26.40
LOW $18.06
HIGH $61.70
LOW $33.70
MARKET INFORMATION
With a net profit of nearly $9.0M
this past fiscal year, we sure
have come a long way!
Back in 1962, the Company had
sales of $334K and a net loss
of $77K. Then, in 1964, we had
sales of $537K and lost $166K.
By 1991, we recorded a net profit
of $52K on sales of $4.4M.
- Alan Klembczyk, President
Taylor Devices, Inc. Annual Report , 1963
Stock price highs and lows for the past two fiscal years.
This page is intentionally left blank
TAYLOR DEVICES, INC. AND SUBSIDIARY
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
AND
CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2024
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Statement
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Information in this
Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Form 10-
K that does not consist of historical facts are "forward-looking statements." Statements accompanied or qualified by, or containing,
words such as "may," "will," "should," "believes," "expects," "intends," "plans," "projects," "estimates," "predicts," "potential,"
"outlook," "forecast," "anticipates," "presume," "assume" and "optimistic" constitute forward-looking statements and, as such, are
not a guarantee of future performance. These statements involve factors, risks and uncertainties, the impact or occurrence of which
can cause actual results to differ materially from the expected results described in such statements. Risks and uncertainties can
include, among others: fluctuations in general business cycles and changing economic conditions; variations in timing and amount
of customer orders; changing product demand and industry capacity; increased competition and pricing pressures; advances in
technology that can reduce the demand for the Company's products, as well as other factors, many or all of which may be beyond
the Company's control. Consequently, investors should not place undue reliance on forward-looking statements as predictive of
future results. Except as required by law, the Company disclaims any obligation to release publicly any updates or revisions to the
forward-looking statements herein to reflect any change in the Company's expectations with regard thereto, or any changes in
events, conditions or circumstances on which any such statement is based.
Application of Critical Accounting Policies and Estimates
The Company's consolidated financial statements and accompanying notes are prepared in accordance with U.S. generally accepted
accounting principles. The preparation of the Company's financial statements requires management to make estimates, assumptions
and judgments that affect the amounts reported. These estimates, assumptions and judgments are affected by management's
application of accounting policies, which are discussed in Note 1, "Summary of Significant Accounting Policies", and elsewhere in
the accompanying consolidated financial statements. As discussed below, our financial position or results of operations may be
materially affected when reported under different conditions or when using different assumptions in the application of such policies.
In the event estimates or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to
reflect more current information. Management believes the following critical accounting policies affect the more significant
judgments and estimates used in the preparation of the Company's financial statements.
Accounts Receivable
Our ability to collect outstanding receivables from our customers is critical to our operating performance and cash flows. Accounts
receivable are stated at an amount management expects to collect from outstanding balances. Management provides for probable
uncollectible accounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current
status of individual accounts after considering the age of each receivable and communications with the customers involved.
Balances that are collected, for which a credit to a valuation allowance had previously been recorded, result in a current-period
reversal of the earlier transaction charging earnings and crediting a valuation allowance. Balances that are still outstanding after
management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to
accounts receivable in the current period. The actual amount of accounts written off over the five year period ended May 31, 2024
equaled 0.2% of sales for that period. The balance of the valuation allowance is unchanged at $29,000 at both May 31, 2024 and
May 31, 2023. Management does not expect the valuation allowance to materially change in the next twelve months for the current
accounts receivable balance.
Inventory
Inventory is stated at the lower of average cost or net realizable value. Average cost approximates first-in, first-out cost.
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 technical 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. Therefore, management of
the Company has recorded an allowance for potential inventory obsolescence. Based on certain assumptions and judgments made
from the information available at that time, we determine the amount in the inventory allowance. If these estimates and related
assumptions or the market changes, we may be required to record additional reserves. Historically, actual results have not varied
materially from the Company's estimates. There was $791,000 and $322,000 of inventory disposed of during the years ended May
31, 2024 and 2023. The provision for potential inventory obsolescence was $386,000 and $295,000 for the years ended May 31,
2024 and 2023.
Revenue Recognition
Revenue is recognized when, or as, the Company transfers control of promised products or services to a customer in an amount that
reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or services.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account.
A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the
performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer
the individual goods or services is not separately identifiable from other promises in the contracts which are, therefore, not distinct.
Promised goods or services that are immaterial in the context of the contract are not separately assessed as performance obligations.
For contracts with customers in which the Company satisfies a promise to the customer to provide a product that has no alternative
use to the Company and the Company has enforceable rights to payment for progress completed to date inclusive of profit, the
Company satisfies the performance obligation and recognizes revenue over time (generally less than one year), using costs incurred
to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred
cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract
costs include labor, material and overhead. Total estimated costs for each of the contracts are estimated based on a combination of
historical costs of manufacturing similar products and estimates or quotes from vendors for supplying parts or services towards the
completion of the manufacturing process. Adjustments to cost and profit estimates are made periodically due to changes in job
performance, job conditions and estimated profitability, including those arising from final contract settlements. These changes may
result in revisions to costs and income and are recognized in the period in which the revisions are determined. Any losses expected
to be incurred on contracts in progress are charged to operations in the period such losses are determined. If total costs calculated
upon completion of the manufacturing process in the current period for a contract are more than the estimated total costs at
completion used to calculate revenue in a prior period, then the profits in the current period will be lower than if the estimated costs
used in the prior period calculation were equal to the actual total costs upon completion. Historically, actual results have not varied
materially from the Company's estimates. Other sales to customers are recognized upon shipment to the customer based on contract
prices and terms. In the year ended May 31, 2024, 59% of revenue was recorded for contracts in which revenue was recognized
over time while 41% was recognized at a point in time. In the year ended May 31, 2023, 61% of revenue was recorded for contracts
in which revenue was recognized over time while 39% was recognized at a point in time.
For financial statement presentation purposes, the Company nets progress billings against the total costs incurred and estimated
earnings on uncompleted contracts. The asset, "costs and estimated earnings in excess of billings," represents revenues recognized
in excess of amounts billed. The liability, "billings in excess of costs and estimated earnings," represents billings in excess of
revenues recognized.
Income Taxes
The provision for income taxes provides for the tax effects of transactions reported in the financial statements regardless of when
such taxes are payable. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary
differences between the tax and financial statement basis of assets and liabilities. The deferred tax assets relate principally to asset
valuation allowances such as inventory obsolescence reserves and bad debt reserves and also to liabilities including warranty
reserves, accrued vacation, accrued commissions and others. The deferred tax liabilities relate primarily to differences between
financial statement and tax depreciation. Deferred taxes are based on tax laws currently enacted with tax rates expected to be in
effect when the taxes are actually paid or recovered.
Realization of the deferred tax assets is dependent on generating sufficient taxable income at the time temporary differences become
deductible. The Company provides a valuation allowance to the extent that deferred tax assets may not be realized. A valuation
allowance has not been recorded against the deferred tax assets since management believes it is more likely than not that the deferred
tax assets are recoverable. The Company considers future taxable income and potential tax planning strategies in assessing the need
for a potential valuation allowance. In future years the Company will need to generate approximately $10.4 million of taxable
income in order to realize our deferred tax assets recorded as of May 31, 2024 of $2,176,000. This deferred tax asset balance is
38% ($594,000) higher than at the end of the prior year. The amount of the deferred tax assets considered realizable however, could
be reduced in the near term if estimates of future taxable income are reduced. If actual results differ from estimated results or if the
Company adjusts these assumptions, the Company may need to adjust its deferred tax assets or liabilities, which could impact its
effective tax rate.
The Company's practice is to recognize interest related to income tax matters in interest income / expense and to recognize penalties
in selling, general and administrative expenses.
The Company and its subsidiary file consolidated federal and state income tax returns. As of May 31, 2024, the Company had state
investment tax credit carryforwards of approximately $470,000 expiring through May 2029.
Results of Operations
A summary of the period-to-period changes in the principal items included in the consolidated statements of income is shown
below:
Summary comparison of the years ended May 31, 2024 and 2023
Increase /
(Decrease)
Sales, net
$ 4,384,000
Cost of goods sold
$
494,000
Research and development costs
$
(708,000)
Selling, general and administrative expenses
$ 1,928,000
Other income (expense)
$
745,000
Income before provision for income taxes
$ 3,415,000
Provision for income taxes
$
704,000
Net income
$ 2,711,000
For the year ended May 31, 2024 (All figures being discussed are for the year ended May 31, 2024 as compared to the year ended
May 31, 2023.)
Year ended May 31
Change
2024
2023
Amount
Percent
Net Revenue
$ 44,583,000
$ 40,199,000
$ 4,384,000
11%
Cost of sales
23,744,000
23,250,000
494,000
2%
Gross profit
$ 20,839,000
$ 16,949,000
$ 3,890,000
23%
… as a percentage of net revenues
47%
42%
The Company's consolidated results of operations showed an 11% increase in net revenues and an increase in net income of 43%.
Revenues recorded in the year ended May 31, 2024 for long-term projects (“Project(s)”) were 8% higher than the level recorded in
the prior year. We had 39 Projects in process during the year ended May 31, 2024 compared with 52 during the same period last
year. Revenues recorded in the year ended May 31, 2024 for other-than long-term projects (non-projects) were 15% higher than
the level recorded in the prior year. The number of Projects in-process fluctuates from period to period. The changes from the
prior year to the year ended May 31, 2024 are not necessarily representative of future results.
Sales of the Company's products are made to three general groups of customers: industrial, structural and aerospace / defense. The
Company saw a 30% decrease from last year’s level in sales to structural customers who were seeking seismic / wind protection for
either construction of new buildings and bridges or retrofitting existing buildings and bridges along with a 71% increase in sales to
customers in aerospace / defense and a 12% decrease in sales to customers using our products in industrial applications.
A breakdown of sales to these three general groups of customers, as a percentage of total net revenue for fiscal years ended May
31, 2024 and 2023 is as follows:
Year ended May 31
2024
2023
Industrial
8%
10%
Structural
32%
51%
Aerospace / Defense
60%
39%
Total sales within the U.S. increased 18% from last year. Total sales to Asia decreased 55% from the prior year. Net revenue by
geographic region, as a percentage of total net revenue for fiscal years ended May 31, 2024 and 2023 is as follows:
Year ended May 31
2024
2023
U.S.
86%
81%
Asia
4%
11%
Other
10%
8%
The gross profit as a percentage of net revenue of 47% in the year ended May 31, 2024 is five percentage points greater than the
same period of the prior year (42%). The Company has been able to increase sales prices to recover more of the increased costs for
materials and labor that were incurred during the year ended May 31, 2024. Management continues to work with suppliers to obtain
more visibility of conditions affecting their respective markets. These actions combined with benefits from the Company’s
continuous improvement initiatives and increased volume have helped to improve the gross margin as a percentage of revenue over
the prior year.
At May 31, 2024, we had 134 open sales orders in our backlog with a total sales value of $33.1 million. At May 31, 2023, we had
134 open sales orders in our backlog with a total sales value of $32.5 million. $18.6 million of the current backlog is on Projects
already in progress. $18.1 million of the $32.5 million sales order backlog at May 31, 2023 was in progress at that date. 72% of the
sales value in the backlog is for aerospace / defense customers compared to 74% at the end of fiscal 2023. As a percentage of the
total sales order backlog, orders from structural customers accounted for 22% at May 31, 2024 and 22% at May 31, 2023. The
Company expects to recognize revenue for the majority of the backlog during the fiscal year ending May 31, 2025, with the
remainder during the fiscal year ending May 31, 2026.
The Company's backlog, revenues, commission expense, gross margins, gross profits, and net income fluctuate from period to
period. Total sales in the current period and the changes in the current period compared to the prior period, are not necessarily
representative of future results.
Research and Development Costs
Years ended May 31
Change
2024
2023
Amount
Percent
R & D
$ 388,000
$ 1,097,000
$ (709,000)
-65%
… as a percentage of net revenues
0.9%
2.7%
Research and development costs decreased 65% from the prior year. This decrease was driven by the completion of the Taylor
Damped Moment Frame™ project.
Selling, General and Administrative Expenses
Years ended May 31
Change
2024
2023
Amount
Percent
S G & A
$ 10,971,000
$ 9,043,000
$ 1,928,000
21%
… as a percentage of net revenues
25%
22%
Selling, general and administrative expenses increased 21% from the prior year, primarily from increased personnel costs.
Operating Income
Operating income of $9,479,000 for the year ended May 31, 2024, showed significant improvement from the $6,809,000 operating
income in the prior year. The increase in operating income was attributed to the decrease in research and development costs as well
as improved gross margin performance.
Other Income (expense)
Other income increased 104% from the prior year due to increased interest income from higher levels of short-term investments
during the course of the year.
Provision for Income Taxes
The Company's effective tax rate (ETR) is calculated based upon current assumptions relating to the year's operating results and
various tax related items. The ETR for the fiscal year ended May 31, 2024 is 18%, compared to the ETR for the prior year of 16%.
A reconciliation of provision for income taxes at the statutory rate to income tax provision at the Company's effective rate is as
follows:
2024
2023
Computed tax provision at the expected statutory rate
$ 2,293,000 $ 1,575,000
Tax effect of permanent differences:
Research tax credits
(408,000)
(284,000)
Foreign-derived intangible income deduction
(142,000)
(67,000)
Stock option costs
49,000
-
Other permanent differences
3,000
1,000
Other
127,000
(7,000)
$ 1,922,000 $ 1,218,000
The foreign-derived intangible income deduction is a tax deduction provided to corporations that sell goods or services to foreign
customers. It became available through Public Law 115-97, known as the Tax Cuts and Jobs Act.
Liquidity and Capital Resources, Line of Credit and Long-Term Debt
The Company's primary liquidity requirements depend on its working capital and capital expenditure needs. Working capital
consists primarily of cash and short-term investments, inventory, accounts receivable, costs and estimated earnings in excess of
billings, accounts payable, accrued expenses and billings in excess of costs and estimated earnings. The Company's primary source
of liquidity has been excess cash flow from operations.
Capital expenditures for the year ended May 31, 2024 were $1,149,000 compared to $3,359,000 in the prior year. The Company
also acquired Pumpkin™ Mounts intellectual property during the year ended May 31, 2024 for $300,000. Current year capital
expenditures included new manufacturing machinery, testing equipment, upgrades to technology equipment and assembly / test
facility improvements. The Company has commitments to make capital expenditures of approximately $1,360,000 as of May 31,
2024. These capital expenditures will be primarily for new manufacturing and testing equipment.
On January 4, 2024, the Company entered into a redemption agreement to purchase 459,015 of the Company’s shares of the capital
stock of the Company, which represented approximately 13% of all of the issued and outstanding shares of capital stock of the
Company as of January 8, 2024 (the “Closing Date”), from the Ira Sochet Trust and the Ira Sochet Roth IRA. Each of the foregoing
counterparties are non-affiliates of the Company. The agreed purchase price was $19.92 per share, which constituted 87.6% of the
average price ($22.74) at which shares of the Company's common stock traded on the Closing Date.
The Company has a $10,000,000 demand line of credit with M&T Bank, with interest payable at the Company's option of 30, 60
or 90 day SOFR rate plus 2.365%. There is no outstanding balance at May 31, 2024. The line is secured by a negative pledge of
the Company's real and personal property and is subject to renewal annually. The bank is not committed to make loans under this
line of credit and no commitment fee is charged.
Management believes that the Company's cash on hand, cash flows from operations, and borrowing capacity under the bank line
of credit will be sufficient to fund ongoing operations and capital improvements for the next twelve months.
Inventory and Maintenance Inventory
May 31, 2024
May 31, 2023
Increase /(Decrease)
Raw materials $
887,000
$
674,000
$
213,000
32%
Work-in-process 6,412,000
5,005,000
1,407,000
28%
Finished goods
213,000
262,000
(49,000)
-19%
Inventory 7,512,000 83%
5,941,000
86%
1,571,000
26%
Maintenance and other inventory 1,580,000 17%
1,003,000
14%
577,000
58%
Total $ 9,092,000 100%
$ 6,944,000
100%
$ 2,148,000
31%
Inventory turnover
3.0
3.5
Inventory, at $7,512,000 as of May 31, 2024, is 26 percent higher than at the prior year-end. Of this, approximately 85% is work
in process, 3% is finished goods, and 12% is raw materials. All of the current inventory is expected to be consumed or sold within
twelve months. The level of inventory will fluctuate from time to time due to the stage of completion of the non-project sales orders
in progress at the time.
The Company disposed of approximately $791,000 and $322,000 of obsolete inventory during the years ended May 31, 2024 and
2023, respectively.
Accounts Receivable, Costs and Estimated Earnings in Excess of Billings (“CIEB”) and Billings in Excess of Costs and
Estimated Earnings (“BIEC”)
May 31, 2024
May 31, 2023
Increase /(Decrease)
Accounts receivable
5,212,000
5,554,000
(342,000 )
-6%
CIEB
4,357,000
4,124,000
233,000
6%
Less: BIEC
5,601,000
1,992,000
3,609,000
181%
Net
$ 3,968,000
$ 7,686,000
$ (3,718,000 )
-48%
Number of an average day’s sales outstanding in
accounts receivable (DSO)
39
47
The Company combines the totals of accounts receivable, the asset CIEB, and the liability BIEC, to determine how much cash the
Company will eventually realize from revenue recorded to date. As the accounts receivable figure rises in relation to the other two
figures, the Company can anticipate increased cash receipts within the ensuing 30-60 days.
Accounts receivable of $5,212,000 as of May 31, 2024 includes no retainage by customers on long-term construction projects. The
number of an average day's sales outstanding in accounts receivable (DSO) was 39 days at May 31, 2024 and 47 days at May 31,
2023. The Company expects to collect the net accounts receivable balance during the next twelve months.
The status of the projects in-progress at the end of the current and prior fiscal years have changed in the factors affecting the year-
end balances in the asset CIEB, and the liability BIEC:
2024
2023
Number of projects in progress at year-end
19
22
Aggregate percent complete at year-end
53%
33%
Average total value of projects in progress at year-end
$2,089,000
$1,285,000
Percentage of total value invoiced to customer
56%
29%
There are three less projects in-process at the end of the current fiscal year as compared with the prior year end and the average
value of those projects has increased by 63% between those two dates.
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, provisions such as this are often not possible. The $4,357,000 balance in this account at May 31, 2024 is a 6%
increase from the prior year-end. This increase reflects the higher aggregate level of the percentage of completion of these Projects
as of the current year end as compared with the Projects in process at the prior year end. Generally, if progress billings are permitted
under the terms of a project sales agreement, then the more complete the project is, the more progress billings will be permitted.
The Company expects to bill the entire amount during the next twelve months. 58% of the CIEB balance as of the end of the last
fiscal quarter, February 29, 2024, was billed to those customers in the current fiscal quarter ended May 31, 2024. The remainder
will be billed as the projects progress, in accordance with the terms specified in the various contracts.
The year-end balances in the CIEB account are comprised of the following components:
May 31, 2024
May 31, 2023
Costs
$ 9,644,000
$ 3,006,000
Estimated earnings
9,782,000
2,648,000
Less: Billings to customers
15,069,000
1,530,000
CIEB
$ 4,357,000
$ 4,124,000
Number of projects in progress
14
12
As noted above, BIEC represents billings to customers in excess of revenues recognized. The $5,601,000 balance in this account
at May 31, 2024 is in comparison to a $1,992,000 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 account "costs and estimated earnings in excess of billings," discussed above. Final
delivery of product under these contracts is expected to occur during the next twelve months.
The year-end balances in this account are comprised of the following components:
May 31, 2024
May 31, 2023
Billings to customers
$
7,211,000
$
6,538,000
Less: Costs
933,000
2,343,000
Less: Estimated earnings
677,000
2,203,000
BIEC
$
5,601,000
$
1,992,000
Number of projects in progress
5
10
Accounts payable, at $1,439,000 as of May 31, 2024, is 16% less than the prior year-end. This decrease is normal fluctuation of
this account and is not considered to be unusual. The Company expects the current accounts payable amount to be paid during the
next twelve months.
Accrued expenses of $4,664,000 increased 14% from the prior year level of $4,078,000. This change is due to increases in accrued
incentive compensation resulting from increased earnings.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders
Taylor Devices, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Taylor Devices, Inc. and Subsidiary (the
Company) as of May 31, 2024 and 2023, and the related consolidated statements of income, stockholders' equity,
and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively
referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present
fairly, in all material respects, the financial condition of the Company as of May 31, 2024 and 2023, and the results
of its operations and its cash flows for the years then ended in accordance with accounting principles generally
accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting
firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of
internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated
financial statements that were communicated or required to be communicated to the audit committee and that: (1)
relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not
alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the
accounts or disclosures to which they relate.
Cost Estimates for Long-Term Contracts and Related Revenue Recognition
Description of the Matter
As more fully described in Note 1 to the consolidated financial statements, the Company recognizes revenue over
time for long-term contracts as goods are produced. The Company uses costs incurred as the method to determine
progress, and revenue is recognized based on costs incurred to date plus an estimate of margin at completion. The
process of estimating margin at completion involves estimating the costs to complete production of goods and
comparing those costs to the estimated final revenue amount. Long-term contracts are inherently uncertain in that
revenue is fixed while the estimates of costs required to complete these contracts are subject to significant
variability. Due to the technical performance requirements in many of these contracts, changes to cost estimates
could occur, resulting in higher or lower margins when the contracts are completed.
Given the inherent uncertainty and significant judgments necessary to estimate future costs at completion, auditing
these estimates involved a focused audit effort and a high degree of auditor judgment.
How We Addressed the Matter in Our Audit
Our auditing procedures related to the cost estimates for long-term contracts and related revenue recognition
included the following, among others:
We evaluated the appropriateness and consistency of management’s methods used to develop its estimates.
We evaluated the reasonableness of judgments made and significant assumptions used by management
relating to key estimates.
We selected a sample of executed contracts to understand the contract, perform an independent assessment
of the appropriate timing of revenue recognition, and test the mathematical accuracy of revenue recognized
based on costs incurred to date relative to total estimated costs at completion.
We performed inquiries of the Company’s project managers and others directly involved with the contracts
to evaluate project status and project challenges which may affect total estimated costs to complete. We
also observed the project work site when key estimates related to tangible or physical progress of the
project.
We tested the accuracy and completeness of the data used to develop key estimates, including material,
labor, overhead, and sub-contractor costs.
We performed retrospective reviews of prior year long-term contracts, comparing actual performance to
estimated performance and the related financial statement impact, when evaluating the thoroughness and
precision of management’s estimation process in previous years.
Valuation of Inventory
Description of the Matter
As of May 31, 2024, the Company’s inventory balance was $7.5 million, net of a $59,000 allowance for
obsolescence, its maintenance and other inventory balance was $1.6 million, net of an approximate $837,000
allowance for obsolescence. As discussed in Note 5, maintenance and other inventory represents certain items that
are estimated to have a product life-cycle in excess of twelve months the Company is required to maintain for
service of products sold and items that are generally subject to spontaneous ordering. The Company evaluates its
inventory for obsolescence on an ongoing basis by considering historical usage as well as requirements for future
orders.
Given the inherent uncertainty and significant judgments necessary to estimate potential inventory obsolescence,
auditing management’s estimates involved a high degree of auditor judgment.
How We Addressed the Matter in Our Audit
Our auditing procedures related to valuation of inventory included the following, among others:
We evaluated the appropriateness and consistency of management’s methods used to develop its estimates.
We evaluated the reasonableness of judgments made and significant assumptions used by management
relating to key estimates.
We inquired of management relative to write-offs of inventory during the year.
We tested the completeness and accuracy of management’s schedule of inventory.
We developed an independent expectation of the obsolescence reserve based on our knowledge of the
Company’s inventory, including analysis of slow-moving items and historical usage and compared it to
actual.
We examined management’s lower of cost or net realizable value analysis and performed procedures to test
its completeness and accuracy.
We selected a sample of material purchases made during the year to ensure they were included in inventory
at the proper value.
During our physical inventory observation, we toured the Company’s warehouses and examined inventory
on hand for any indications of obsolescence.
We have served as the Company’s auditor since 1998.
Buffalo, New York
August 15, 2024
TAYLOR DEVICES, INC. AND SUBSIDIARY
Consolidated Balance Sheets
May 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
2,831,471
$
3,575,219
Short-term investments
28,131,279
24,514,757
Accounts and other receivables, net (Note 2)
5,212,408
5,553,504
Inventory (Note 3)
7,512,052
5,941,304
Prepaid expenses
725,506
439,607
Prepaid income taxes
-
228,947
Costs and estimated earnings in excess of billings (Note 4)
4,356,565
4,124,182
Total current assets
48,769,281
44,377,520
Maintenance and other inventory, net (Note 5)
1,579,829
1,003,140
Property and equipment, net (Note 6)
11,180,933
11,721,784
Patents, net
292,593
-
Cash value of life insurance, net
214,824
210,120
Other assets
27,343
-
Deferred income taxes (Note 10)
1,012,615
568,615
$
63,077,418
$ 57,881,179
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$
1,438,847
$
1,717,657
Accrued expenses (Note 8)
4,664,463
4,078,322
Billings in excess of costs and estimated earnings (Note 4)
5,601,274
1,992,470
Accrued income taxes
126,148
-
Total current liabilities
11,830,732
7,788,449
Stockholders' Equity:
Common stock, $.025 par value, authorized 8,000,000 shares,
issued 4,165,315 and 4,088,193 shares
104,056
102,127
Paid-in capital
12,959,531
10,947,089
Retained earnings
51,127,018
42,128,256
64,190,605
53,177,472
Treasury stock – 1,046,742 and 567,751 shares at cost
(12,943,919)
(3,084,742)
Total stockholders' equity
51,246,686
50,092,730
$
63,077,418
$ 57,881,179
See notes to consolidated financial statements.
TAYLOR DEVICES, INC. AND SUBSIDIARY
Consolidated Statements of Income
For the years ended May 31,
2024
2023
Sales, net (Note 9)
$
44,582,807
$ 40,199,354
Cost of goods sold
23,743,554
23,250,039
Gross profit
20,839,253
16,949,315
Research and development costs
388,476
1,096,807
Selling, general and administrative expenses
10,971,358
9,043,442
Operating income
9,479,419
6,809,066
Other income (expense)
Interest, net
1,426,584
698,864
Miscellaneous
14,759
(2,572)
Total other income, net
1,441,343
696,292
Income before provision for income taxes
10,920,762
7,505,358
Provision for income taxes (Note 10)
1,922,000
1,218,000
Net income
$
8,998,762
$
6,287,358
Basic earnings per common share (Note 11)
$
2.68
$
1.79
Diluted earnings per common share (Note 11)
$
2.58
$
1.77
See notes to consolidated financial statements.
TAYLOR DEVICES, INC. AND SUBSIDIARY
Consolidated Statements of Stockholders’ Equity
For the years ended May 31,
2024
2023
Common Stock
Beginning of period
$
102,127
$
101,342
Issuance of shares for employee stock purchase plan
10
22
Issuance of shares for employee stock option plan
1,919
763
End of period
104,056
102,127
Paid-in Capital
Beginning of period
10,947,089
10,227,916
Issuance of shares for employee stock purchase plan
9,904
10,854
Issuance of shares for employee stock option plan
955,286
291,066
Stock options issued for services
1,047,252
417,253
End of period
12,959,531
10,947,089
Retained Earnings
Beginning of period
42,128,256
35,840,898
Net income
8,998,762
6,287,358
End of period
51,127,018
42,128,256
Treasury Stock
Beginning of period
(3,084,742)
(2,915,002)
Issuance of shares for employee stock option plan
(715,599)
(169,740)
Repurchase of shares
(9,143,578)
-
End of period
(12,943,919)
(3,084,742)
Total stockholders' equity
$
51,246,686
$ 50,092,730
See notes to consolidated financial statements
TAYLOR DEVICES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
For the years ended May 31,
2024
2023
Operating activities:
Net income
$
8,998,762 $
6,287,358
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation
1,690,239
1,472,455
Amortization
7,407
-
Stock options issued for services
1,047,252
417,253
Bad debt expense
-
23,360
Loss on disposal of property and equipment
-
20,015
Provision for inventory obsolescence
385,744
295,014
Deferred income taxes
(444,000)
(494,000)
Changes in other current assets and liabilities:
Accounts and other receivables
341,096
(1,110,178)
Inventory
(2,533,181)
(277,214)
Prepaid expenses
(285,899)
28,882
Prepaid income taxes
228,947
7,000
Costs and estimated earnings in excess of billings
(232,383)
(787,708)
Accounts payable
(278,810)
290,827
Accrued expenses
586,141
664,008
Billings in excess of costs and estimated earnings
3,608,804
869,707
Accrued income taxes
126,148
-
Other assets
(27,343)
-
Net operating activities
13,218,924
7,706,779
Investing activities:
Acquisition of property and equipment
(1,149,388)
(3,359,495)
Patent expenditures
(300,000)
-
Increase in short-term investments
(3,616,522)
(23,417,307)
Increase in cash value of life insurance
(4,704)
(4,761)
Net investing activities
(5,070,614)
(26,781,563)
Financing activities:
Proceeds from issuance of common stock
967,119
302,705
Acquisition of treasury stock
(9,859,177)
(169,740)
Net financing activities
(8,892,058)
132,965
Net change in cash and cash equivalents
(743,748)
(18,941,819)
Cash and cash equivalents - beginning
3,575,219
22,517,038
Cash and cash equivalents - ending
$
2,831,471 $
3,575,219
See notes to consolidated financial statements.
TAYLOR DEVICES, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies:
Nature of Operations:
Taylor Devices, Inc. (the Company) manufactures and sells a single group of very similar products that have many different
applications for customers. These similar products are included in one of nine categories; namely, Seismic Dampers,
Fluidicshoks®, Crane and Industrial Buffers, Self-Adjusting Shock Absorbers, Liquid Die Springs, Vibration Dampers, Machined
Springs, Custom Shock and Vibration Isolators, and Custom Actuators for use in various types of machinery, equipment and
structures, primarily to customers which are located throughout the United States and several foreign countries. The products are
manufactured at the Company's sole operating facility in the United States where all of the Company's long-lived assets reside.
Management does not track or otherwise account for sales broken down by these categories.
86% of the Company's 2024 revenue was generated from sales to customers in the United States and 4% was from sales to customers
in Asia. Remaining sales were to customers in other countries in North America, Europe, Australia, and South America.
81% of the Company's 2023 revenue was generated from sales to customers in the United States and 11% was from sales to
customers in Asia. Remaining sales were to customers in other countries in North America, Europe, Australia, and South America.
Principles of Consolidation:
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Tayco
Realty Corporation (Realty). All inter-company transactions and balances have been eliminated in consolidation.
Subsequent Events:
The Company has evaluated events and transactions for potential recognition or disclosure in the financial statements through the
date the financial statements were issued.
Use of Estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Cash and Cash Equivalents:
The Company includes all highly liquid investments in money market funds in cash and cash equivalents on the accompanying
balance sheets.
Cash and cash equivalents in financial institutions may exceed insured limits at various times during the year and subject the
Company to concentrations of credit risk.
Short-Term Investments:
At times, the Company invests excess funds in liquid interest earning instruments. Short-term investments at May 31, 2024 and
May 31, 2023 include money market funds, US treasury securities and corporate bonds stated at fair value, which approximates
cost. The short-term investments (22) mature on various dates during the period June 2024 to December 2026. Unrealized holding
gains and losses would be presented as a separate component of accumulated other comprehensive income, net of deferred income
taxes. Realized gains and losses on the sale of investments are determined using the specific identification method.
The short-term investments are valued using pricing models maximizing the use of observable inputs for similar securities. This
includes basing value on yields currently available on comparable securities of issuers with similar credit ratings.
Accounts and Other Receivables:
Accounts and other receivables are stated at an amount management expects to collect from outstanding balances. Management
provides for probable uncollectible accounts through a charge to earnings and a credit to a valuation allowance based on its
assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable
collection efforts are written off through a charge to the valuation allowance and a credit to the receivable.
Inventory:
Inventory is stated at the lower of average cost or net realizable value. Average cost approximates first-in, first-out cost.
Property and Equipment:
Property and equipment is stated at cost net of accumulated depreciation. Depreciation is provided primarily using the straight-line
method for financial reporting purposes and accelerated methods for income tax reporting purposes. Maintenance and repairs are
charged to operations as incurred; significant improvements are capitalized.
Cash Value of Life Insurance:
Cash value of life insurance is stated at the surrender value of the contracts.
Revenue Recognition:
Revenue is recognized (generally at fixed prices) when, or as, the Company transfers control of promised products or services to a
customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those
products or services.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account.
A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the
performance obligation is satisfied. The majority of our contracts have a single performance obligation as the promise to transfer
the individual goods or services is not separately identifiable from other promises in the contracts which are, therefore, not distinct.
Promised goods or services that are immaterial in the context of the contract are not separately assessed as performance obligations.
For contracts with customers in which the Company satisfies a promise to the customer to provide a product that has no alternative
use to the Company and the Company has enforceable rights to payment for progress completed to date inclusive of profit, the
Company satisfies the performance obligation and recognizes revenue over time (generally less than one year), using costs incurred
to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred
cost represents work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Contract
costs include labor, material and overhead. Adjustments to cost estimates are made periodically, and losses expected to be incurred
on contracts in progress are charged to operations in the period such losses are determined. Other sales to customers are recognized
upon shipment to the customer based on contract prices and terms. In the year ended May 31, 2024, 59% of revenue was recorded
for contracts in which revenue was recognized over time while 41% was recognized at a point in time. In the year ended May 31,
2023, 61% of revenue was recorded for contracts in which revenue was recognized over time while 39% was recognized at a point
in time.
Progress payments are typically negotiated for longer term projects. Payments are otherwise due once performance obligations are
complete (generally at shipment and transfer of title). For financial statement presentation purposes, the Company nets progress
billings against the total costs incurred on uncompleted contracts. The asset, “costs and estimated earnings in excess of billings,”
represents revenues recognized in excess of amounts billed. The liability, “billings in excess of costs and estimated earnings,”
represents billings in excess of revenues recognized.
If applicable, the Company recognizes an asset for the incremental material costs of obtaining a contract with a customer if the
Company expects the benefit of those costs to be longer than one year and the costs are expected to be recovered. As of May 31,
2024 and 2023, the Company does not have material incremental costs on any open contracts with an original expected duration of
greater than one year, and therefore such costs are expensed as incurred. These incremental costs include, but are not limited to,
sales commissions incurred to obtain a contract with a customer.
Shipping and Handling Costs:
Shipping and handling costs on incoming inventory items are classified as a component of cost of goods sold, while shipping and
handling costs on outgoing shipments to customers are classified as a component of selling, general and administrative expenses.
The amounts of these costs classified as a component of selling, general and administrative expenses were $190,939 and $366,763
for the years ended May 31, 2024 and 2023. Shipping and handling activities that occur after the customer has obtained control of
the product are considered fulfillment activities, not performance obligations.
Income Taxes:
The provision for income taxes provides for the tax effects of transactions reported in the financial statements regardless of when
such taxes are payable. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary
differences between the tax and financial statement basis of assets and liabilities. Deferred taxes are based on tax laws currently
enacted with tax rates expected to be in effect when the taxes are actually paid or recovered.
The Company's practice is to recognize interest related to income tax matters in interest income / expense and to recognize penalties in
selling, general and administrative expenses. The Company did not have any accrued interest or penalties included in its consolidated
balance sheets at May 31, 2024 and 2023. The Company recorded no interest expense or penalties in its consolidated statements of
income during the years ended May 31, 2024 and 2023.
The Company believes it is no longer subject to examination by federal and state taxing authorities for years prior to May 31, 2021.
Sales Taxes:
Certain jurisdictions impose a sales tax on Company sales to nonexempt customers. The Company collects these taxes from
customers and remits the entire amount as required by the applicable law. The Company excludes from revenues and expenses the
tax collected and remitted.
Stock-Based Compensation:
The Company measures compensation cost arising from the grant of share-based payments to employees at fair value and recognizes
such cost in income over the period during which the employee is required to provide service in exchange for the award. The stock-
based compensation expense for the years ended May 31, 2024 and 2023 was $1,047,252 and $417,253.
New Accounting Standards:
Any recently issued Accounting Standards Codification (ASC) guidance has either been implemented or is not significant to the
Company.
Reclassifications:
The 2023 financial statements have been reclassified to conform with the presentation adopted for 2024.
2. Accounts and Other Receivables:
2024
2023
Customers
$ 5,241,874 $ 5,558,990
Customers – retention
-
23,980
5,241,874
5,582,970
Less allowance for doubtful accounts
29,466
29,466
$ 5,212,408 $ 5,553,504
Retention receivable from customers represents amounts invoiced to customers where payments have been partially withheld
pending completion of the project. All amounts are expected to be collected within the next fiscal year.
3. Inventory:
2024
2023
Raw materials
$
886,947
$
673,453
Work-in-process
6,412,497
5,005,416
Finished goods
271,608
330,435
7,571,052
6,009,304
Less allowance for obsolescence
59,000
68,000
$ 7,512,052
$ 5,941,304
4. Costs and Estimated Earnings on Uncompleted Contracts:
2024
2023
Costs incurred on uncompleted contracts
$ 10,576,401
$ 5,349,111
Estimated earnings
10,459,240
4,850,889
21,035,641
10,200,000
Less billings to date
22,280,350
8,068,288
$ (1,244,709 )
$ 2,131,712
Amounts are included in the accompanying balance sheets under the following captions:
2024
2023
Costs and estimated earnings in excess of billings
$ 4,356,565
$ 4,124,182
Billings in excess of costs and estimated earnings
5,601,274
1,992,470
$ (1,244,709 )
$ 2,131,712
The following summarizes the status of Projects in progress as of May 31, 2024 and 2023:
2024
2023
Number of Projects in progress
19
22
Aggregate percent complete
53%
33%
Aggregate amount remaining
$17,405,603
$18,061,484
Percentage of total value invoiced to customer
56%
29%
The Company expects to recognize the majority of remaining revenue on all open projects during the May 31, 2025 fiscal year.
Revenue recognized during the years ended May 31, 2024 and 2023 for amounts included in billings in excess of costs and estimated
earnings as of the beginning of the year amounted to $1,992,000, and $1,123,000.
5. Maintenance and Other Inventory:
2024
2023
Maintenance and other inventory
$ 2,416,748
$ 2,236,106
Less allowance for obsolescence
836,919
1,232,966
$ 1,579,829
$ 1,003,140
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 technical 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.
Therefore, management of the Company has recorded an allowance for potential inventory obsolescence. $791,000 and $322,000
of inventory was disposed of during the years ended May 31, 2024 and 2023. The provision for potential inventory obsolescence
was $386,000 and $295,000 for the years ended May 31, 2024 and 2023. The Company continues to rework slow-moving inventory,
where applicable, to convert it to product to be used on customer orders.
6. Property and Equipment:
2024
2023
Land
$
195,220 $
195,220
Buildings and improvements
10,054,459 10,033,399
Machinery and equipment
15,956,076 15,278,928
Office furniture and equipment
3,113,921
2,840,980
Autos and trucks
24,818
24,818
Land improvements
662,168
483,929
30,006,662 28,857,274
Less accumulated depreciation
18,825,729 17,135,490
$ 11,180,933 $ 11,721,784
Depreciation expense was $1,690,239 and $1,472,455 for the years ended May 31, 2024 and 2023.
The Company has commitments to make capital expenditures of approximately $1,360,000 as of May 31, 2024.
7. Short-Term Borrowings:
The Company has available a $10,000,000 bank demand line of credit from a bank, with interest payable at the Company's option
of 30, 60 or 90 day SOFR rate plus 2.365%. The line is secured by a negative pledge of the Company's real and personal property
and is subject to renewal annually.
There is no amount outstanding under the line of credit at May 31, 2024 or 2023.
The Company uses a cash management facility under which the bank draws against the available line of credit to cover checks
presented for payment on a daily basis. Outstanding checks under this arrangement totaled $372,347 and $13,873 as of May 31,
2024 and 2023. These amounts are included in accounts payable.
8. Accrued Expenses:
2024
2023
Customer deposits
$
285,689
$
367,902
Personnel costs
3,763,777
3,023,501
Other
614,997
686,919
$ 4,664,463
$ 4,078,322
9. Sales:
The Company manufactures and sells a single group of very similar products that have many different applications for customers.
These similar products are included in one of nine categories; namely, Seismic Dampers, Fluidicshoks®, Crane and Industrial
Buffers, Self-Adjusting Shock Absorbers, Liquid Die Springs, Vibration Dampers, Machined Springs, Custom Shock and Vibration
Isolators, and Custom Actuators. Management does not track or otherwise account for sales broken down by these categories. Sales
of the Company's products are made to three general groups of customers: industrial, structural and aerospace / defense. A
breakdown of sales to these three general groups of customers is as follows:
2024
2023
Structural
$ 14,406,863
$ 20,642,326
Aerospace / Defense
26,675,321
15,568,695
Industrial
3,500,623
3,988,333
$ 44,582,807
$ 40,199,354
Sales to a single customer approximated 21% of net sales for 2024.
10. Income Taxes:
2024
2023
Current tax provision:
Federal
$ 2,365,000
$ 1,710,000
State
1,000
2,000
2,366,000
1,712,000
Deferred tax provision (benefit):
Federal
(444,000 )
(494,000 )
State
-
-
(444,000 )
(494,000 )
$ 1,922,000
$ 1,218,000
A reconciliation of provision for income taxes at the statutory rate to income tax provision at the Company's effective rate is as
follows:
2024
2023
Computed tax provision at the expected statutory rate $ 2,293,400 $ 1,576,100
State income tax - net of Federal tax benefit
-
(1,600)
Tax effect of permanent differences:
Research tax credits
(407,675)
(283,600)
Foreign-derived intangible income deduction
(142,100)
(66,900)
Stock option costs
48,500
-
Other permanent differences
2,800
900
Other
127,075
(6,900)
$ 1,922,000 $ 1,218,000
Effective income tax rate
17.6%
16.2%
Significant components of the Company's deferred tax assets and liabilities consist of the following:
2024
2023
Deferred tax assets:
Allowance for doubtful receivables
$
6,200 $
6,200
Tax inventory adjustment
57,300
84,300
Allowance for obsolete inventory
188,100
273,200
Accrued vacation
163,000
136,600
Accrued commissions
-
9,800
Warranty reserve
100,700
62,700
R&D tax credit
-
-
R&D capitalization
1,479,800
678,500
Stock options issued for services
181,200
331,300
2,176,300 1,582,600
Deferred tax liabilities:
Excess tax depreciation
(1,163,685) (1,013,985)
Net deferred tax assets
$
1,012,615 $
568,615
Realization of the deferred tax assets is dependent on generating sufficient taxable income at the time temporary differences become
deductible. The Company provides a valuation allowance to the extent that deferred tax assets may not be realized. A valuation
allowance has not been recorded against the deferred tax assets since management believes it is more likely than not that the deferred
tax assets are recoverable. The Company considers future taxable income and potential tax planning strategies in assessing the need
for a potential valuation allowance. The amount of the deferred tax assets considered realizable however, could be reduced in the
near term if estimates of future taxable income are reduced. The Company will need to generate approximately $10.4 million in
taxable income in future years in order to realize the deferred tax assets recorded as of May 31, 2024 of $2,176,300.
The Company and its subsidiary file consolidated Federal and State income tax returns. As of May 31, 2024, the Company had
State investment tax credit carryforwards of approximately $424,000 expiring through May 2029.
11. Earnings Per Common Share:
Basic earnings per common share is computed by dividing income available to common stockholders by the weighted-average
common shares outstanding for the period. Diluted earnings per common share reflects the weighted-average common shares
outstanding and dilutive potential common shares, such as stock options.
A reconciliation of weighted-average common shares outstanding to weighted-average common shares outstanding assuming
dilution is as follows:
2024
2023
Average common shares outstanding
3,353,077
3,506,474
Common shares issuable under stock option plans
135,711
45,020
Average common shares outstanding assuming dilution
3,488,788
3,551,494
12. Employee Stock Purchase Plan:
In March 2004, the Company reserved 295,000 shares of common stock for issuance pursuant to a non-qualified employee stock
purchase plan. Participation in the employee stock purchase plan is voluntary for all eligible employees of the Company. Purchase
of common shares can be made by employee contributions through payroll deductions and without brokers’ fees. At the end of
each calendar quarter, the employee contributions will be applied to the purchase of common shares using a share value equal to
the mean between the closing bid and ask prices of the stock on that date. These shares are distributed to the employees at the end
of each calendar quarter or upon withdrawal from the plan. During the years ended May 31, 2024 and 2023, 372 ($21.70 to $48.89
price per share) and 922 ($8.65 to $19.96 price per share) common shares, respectively, were issued to employees. As of May 31,
2024, 215,993 shares were reserved for further issue.
13. Stock Option Plans:
In 2022, the Company adopted a stock option plan which permits the Company to grant both incentive stock options and non-
qualified stock options. The incentive stock options qualify for preferential treatment under the Internal Revenue Code. Under this
plan, 260,000 shares of common stock have been reserved for grant to key employees and directors of the Company and 144,000
shares have been granted as of May 31, 2024. Under the plan, the option price may not be less than the fair market value of the
stock at the time the options are granted. Options vest immediately and expire ten years from the date of grant.
Using the Black-Scholes option pricing model, the weighted average estimated fair value of each option granted under the plan was
$12.32 during 2024 and $4.91 during 2023. The pricing model uses the assumptions noted in the following table. Expected
volatility is based on the historical volatility of the Company's stock. The risk-free interest rate for periods within the contractual
life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The expected life of options granted is
derived from previous history of stock exercises from the grant date and represents the period of time that options granted are
expected to be outstanding. The Company uses historical data to estimate option exercise and employee termination assumptions
under the valuation model. The Company has never paid dividends on its common stock and does not anticipate doing so in the
foreseeable future.
2024
2023
Risk-free interest rate
4.00%
2.45%
Expected life in years
4.3
4.2
Expected volatility
37%
33%
Expected dividend yield
0%
0%
The following is a summary of stock option activity:
Shares
Weighted
Average
Exercise Price
Intrinsic
Value
Outstanding - May 31, 2022
283,000 $
11.43 $
28,248
Options granted
85,000 $
15.75
Less: options exercised
30,500 $
9.57
Less: options expired
4,500
-
Outstanding - May 31, 2023
333,000 $
12.70 $ 2,016,961
Options granted
85,000 $
34.04
Less: options exercised
76,750 $
12.54
Less: options expired
750
-
Outstanding - May 31, 2024
340,500 $
18.07 $11,185,815
We calculated intrinsic value for those options that had an exercise price lower than the market price of our common shares as of
the balance sheet dates. The aggregate intrinsic value of outstanding options as of the end of each fiscal year is calculated as the
difference between the exercise price of the underlying options and the market price of our common shares for the options that were
in-the-money at that date (340,500 at May 31, 2024 and 279,500 at May 31, 2023). The Company's closing stock price was $50.92
and $18.55 as of May 31, 2024 and 2023. As of May 31, 2024, there are 116,000 options available for future grants under the 2022
stock option plan. $957,205 was received from the exercise of options during the fiscal year ended May 31, 2024. $291,829 was
received from the exercise of options during the fiscal year ended May 31, 2023.
The following table summarizes information about stock options outstanding at May 31, 2024:
Outstanding and Exercisable
Range of Exercise Prices
Number of
Options
Weighted Average
Remaining Years of
Contractual Life
Weighted Average
Exercise Price
$ 9.01-$10.00
55,000
7.0
$ 9.67
$10.01-$11.00
15,250
4.7
$10.21
$11.01-$12.00
106,250
6.5
$11.72
$12.01-$13.00
19,000
1.5
$12.36
$13.01-$14.00
10,000
2.9
$13.80
$16.01-$17.00
10,000
1.9
$16.40
$19.01-$20.00
47,500
8.3
$19.89
$20.01-$21.00
34,500
9.4
$20.78
$46.01-$47.00
43,000
9.9
$46.99
$ 9.01-$47.00
340,500
6.9
$18.07
The following table summarizes information about stock options outstanding at May 31, 2023:
Outstanding and Exercisable
Range of Exercise Prices
Number of
Options
Weighted Average
Remaining Years of
Contractual Life
Weighted Average
Exercise Price
$ 8.01-$ 9.00
13,000
0.9
$ 8.87
$ 9.01-$10.00
55,000
8.0
$ 9.67
$10.01-$11.00
23,500
6.2
$10.16
$11.01-$12.00
140,000
7.5
$11.66
$12.01-$13.00
28,000
2.8
$12.39
$13.01-$14.00
10,000
3.9
$13.80
$16.01-$17.00
10,000
2.9
$16.40
$19.01-$20.00
53,500
8.6
$19.82
$ 8.01-$20.00
333,000
6.8
$12.70
14. Retirement Plan:
The Company maintains a retirement plan for essentially all employees pursuant to Section 401(k) of the Internal Revenue Code.
The Company matches a percentage of employee voluntary salary deferrals subject to limitations. The Company may also make
discretionary contributions as determined annually by the Company's Board of Directors. The amount expensed under the plan was
$431,720 and $371,881 for the years ended May 31, 2024 and 2023.
15. Fair Value of Financial Instruments:
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair
value because of the short maturity of these instruments.
The fair values of short-term investments were determined as described in Note 1.
16. Cash Flows Information:
2024
2023
Interest paid
None
None
Income taxes paid
$2,010,000
$1,705,000
17. Legal Proceedings:
The Company has been named as a third-party defendant in an action captioned Board of Managers of the 432 Park Condominium,
et al. v. 56th and Park (NY) Owner LLC, et al. (the “Action”).
The Action was filed on or about September 23, 2021. In the Action, the Board of Managers of 432 Park Condominium (the
“Owner”), a condominium association for a high-rise condominium building (the “Building”) located at 432 Park Avenue in New
York, N.Y., asserts a claim against the condominium sponsor, 56th and Park (NY) Owner LLC (the “Sponsor”) for damages arising
from construction and design defects to the residential and commercial units at the Building.
The Sponsor subsequently filed a third-party complaint against LendLease Construction (US) LMB (“LendLease”) and other parties
involved in the Building’s design. As to LendLease, the third-party complaint alleges breach of a construction management contract
between LendLease and the Sponsor and negligence arising from purported failure to perform under the contract, and seeks
indemnification against any damages asserted against the Sponsor by the Owner.
LendLease subsequently initiated a third-party complaint seeking indemnification from entities with whom LendLease had
contracted for the supply of materials and services in connection with construction of the Building. The third-party complaint also
names the Company as a third-party defendant based upon a contract between the Company and LendLease to supply 16 Viscous
Damping Devices that were incorporated into a Tuned Mass Damper system designed by a third party to limit accelerations of the
Building during wind events. The Company has timely filed and served an answer denying the allegations in LendLease’s third
party complaint.
The Action, and all of the related third-party actions, are pending in the Commercial Division of the Supreme Court, New York
County.
On June 17, 2024, the Court entered a scheduling order directing that the parties complete discovery by July 31, 2025 and file
dispositive motions by October 17, 2025.
In view of the limited discovery to date, it is not possible to determine the likelihood of an unfavorable outcome or to quantify a
potential loss.
This page is intentionally left blank
CORPORATE INFORMATION
Transfer Agent and Registrar
Stock Listing
Annual Meeting
Holders
Form 10-K
Independent Registered Public Accounting Firm
The Company’s transfer agent is responsible for stockholder records, issuance of stock certificates and distribution
of dividend payments and IRS Form 1099s. The transfer agent also administers plans for dividend reinvestment
and direct deposit. Stockholder requests and inquiries concerning these matters are most efficiently answered by
corresponding directly with Computershare Investor Services, 150 Royall Street, Canton, Massachusetts 02021.
Communication may also be made by telephone by calling (800) 522-6645, via the Internet at
www.computershare.com.
NASDAQ Stock Market LLC
NASDAQ Symbol - TAYD
The 2024 Annual Meeting of Shareholders of Taylor Devices, Inc. will be held at the Hyatt Place Buffalo/
Amherst, 5020 Main Street, Amherst, New York 14226, on October 25, 2024, at 11:00 a.m., Eastern Time. There
will also be a live webcast of the Annual Meeting available on the Company’s website at
www.taylordevices.com/annual-shareholders-meeting/. The webcast is being made available only for
informational purposes. The Annual Meeting is being held in person, and accessing the webcast will neither
count as attendance for purposes of meeting quorum requirements nor enable a shareholder to vote. Our
shareholders of record at the close of business on August 26, 2024, the record date for the Annual Meeting,
may vote at the meeting by attending in person or following the instructions in the Company’s proxy materials.
Shareholders who do not attend in person are encouraged to vote by proxy.
As of August, the number of issued and outstanding shares of Common Stock was 3,118,627 and the approximate
number of record holders of the Company’s Common Stock was 381. Due to a substantial number of shares of
the Company’s Common Stock held in street name, the Company believes that the total number of beneficial
owners of its Common Stock is approximately 3,300.
A copy of the Company’s Annual Report on Form 10-K is available to stockholders without charge upon written
request to the attention of Paul Heary, CFO at Taylor Devices, Inc. 90 Taylor Drive, North Tonawanda, NY 14120.
Lumsden & McCormick, LLP
Cyclorama Building
369 Franklin Street
Buffalo, NY 14202-1702
General Counsel
Barclay Damon, LLP
Barclay Damon Tower
125 East Jefferson Street
Syracuse, NY 13202
O F F I C E R S A N D D I R E C T O R S
John Burgess
CHAIRMAN OF THE BOARD
Robert M. Carey
BOARD MEMBER
F. Eric Armenat
BOARD MEMBER
Paul Heary
CHIEF FINANCIAL OFFICER
Timothy Sopko
CHIEF EXECUTIVE OFFICER
AND BOARD MEMBER
M A N A G E M E N T T E A M
Timothy Sopko
CHIEF EXECUTIVE OFFICER
Alan Klembczyk
PRESIDENT
Paul Heary
CHIEF FINANCIAL OFFICER
Stuart Buckley
VICE PRESIDENT,
BUSINESS DEVELOPMENT
AND STRATEGY
Todd Avery
VICE PRESIDENT,
OPERATIONS
Michael Yax
VICE PRESIDENT,
QUALITY AND CONTINUOUS
IMPROVEMENT
E X T E N D E D M A N A G E M E N T T E A M
Megan Brant
ACCOUNTING SUPERVISOR
Nathan Canney
DIRECTOR OF STRUCTURAL
ENGINEERING
Steve Christie
MACHINING LEAD
Timothy Dewiel
PRODUCTION CONTROL
MANAGER
Konrad Eriksen
STRUCTURAL PRODUCTS SALES
DIRECTOR, IPT LEAD
Robert Conrad
DIRECTOR OF CONTINUOUS
IMPROVEMENT
Andrea Green
PRODUCTION CONTROL AND
RECEIVING MANAGER
Steven Harding
MAINTENANCE MANAGER
Donald Horne
CHIEF ENGINEER
Charles Ketchum III
QUALITY ASSURANCE MANAGER
Mark Lemke
PROTECTIVE COATINGS MANAGER
Rebecca Winiecki
PROCUREMENT MANAGER
Nicholas Marsolais
DIRECTOR OF SUPPLY CHAIN
William Streams
MACHINE SHOP MANAGER
David Taylor
MANAGER OF AEROSPACE AND
DEFENSE SALES
Dennis Warmus
MANUFACTURING ENGINEERING
MANAGER
Eric Roth
SCHOLL OPERATIONS MANAGER
Paul Crvelin
VICE PRESIDENT,
ENGINEERING
Alan Klembczyk
PRESIDENT
AND BOARD MEMBER
Susan Ewing
HUMAN RESOURCES
MANAGER
Brian Lowicki
DIRECTOR OF PROGRAMS AND
PROGRAM MANAGEMENT
Mitch Reszczenski
DIRECTOR OF INFORMATION
TECHNOLOGY
James Talty
AEROSPACE/DEFENSE
IPT LEAD
John Burgess | Chairman of the Board of Directors
Mr. Burgess gained his international strategy, manufacturing operations, and organizational development
expertise from his more than 40 years of experience with middle-market public and privately-owned companies.
Mr. Burgess served as President and CEO of Reichert, Inc., a leading provider of ophthalmic instruments, and
spearheaded the acquisition of the company from Leica Microsystems in 2002, leading the company until its sale
in January 2007. Prior to the acquisition, Mr. Burgess served as President of Leica’s Ophthalmic and Educational
Division before leading the buyout of the Ophthalmic Division and formation of Reichert, Inc.
From 1996 to 1999, Mr. Burgess was COO of International Motion Controls (IMC), a $200 million diversified manufacturing firm. During his
tenure there, he led a significant acquisition strategy which resulted in seven completed acquisitions and sixteen worldwide businesses in
the motion control market. Previously, Mr. Burgess operated a number of companies for Moog, Inc. and Carleton Technologies, including
six years spent as President of Moog’s Japanese subsidiary, Nihon Moog K.K. located in Hiratsuka, Japan. Moog, Inc. is the global leader
in electro-hydraulic servo control technology with a focus on the aerospace and defense sectors. Mr. Burgess is also a former Operating
Partner of Summer Street Capital Partners.
Mr. Burgess earned a BS in Engineering from Bath University in England, and an MBA from Canisius College located in Buffalo, New York.
Currently, Mr. Burgess is a Director of Bird Technologies of Solon, Ohio.
Alan R. Klembczyk | President and Board Member
Since graduating from the University of Buffalo in 1987 with a degree in Mechanical Engineering, Mr. Klembczyk has
held key positions in Sales, Engineering, and Executive Management at Taylor Devices. Over the last 36 years, he has
held titles of Design Engineer, Assistant Chief Engineer, Chief Engineer, and Vice President of Sales & Engineering.
He later went on to be appointed President of the Company and a Member of the Board of Directors in June 2018.
Mr. Klembczyk has been responsible for establishing new Sales and Marketing policies and has been directly
involved with defining internal Company policy and strategic direction in cooperation with all levels of Taylor Devices’
Management. He was an integral part of the team that managed upgrades to the Quality System and obtained 3rd party certification to
International Standards ISO 9001, ISO 14000, and Aerospace Standard AS9100.
Mr. Klembczyk has served for many years on the Technical Advisory Group for the US Shock and Vibration Information & Analysis Center
(SAVIAC) and the Shock and Vibration Exchange (SAVE). In 2019, he received the Distinguished Service Award from SAVE. Additionally, he
has been a tutorial and course instructor for various organizations internationally and has participated in many technical conferences and
symposia. He is a founding member and first co-chair of the Industry Partner Committee of the US Resilience Council.
Mr. Klembczyk has participated in many research projects for products for military and aerospace, industrial, and structural applications.
He has served as Program Manager for many of these projects and has worked with academia including the University at Buffalo’s MCEER:
Earthquake Engineering to Extreme Events, among others.
He has published several papers describing unique applications for structural dampers, tuned mass dampers, vibration isolators, shock
absorbers, and shock isolators, and holds US Patents for some of these components. These papers have been published by SAVE, SAVIAC,
the Society for Experimental Mechanics (SEM), and the Applied Technology Council (ATC).
Timothy J. Sopko | Chief Executive Officer and Board Member
Mr. Sopko’s business experience spans more than thirty years in Aerospace (Military and Civil), Industrial, as
well as Commercial markets with a primary focus on Engineering, Product Development, Program Management,
Operations, and Business Management.
Prior to joining Taylor Devices as CEO in April 2019, Mr. Sopko was Vice President and General Manager of Carleton
Technologies Inc. (d.b.a. Cobham Mission Systems) in Orchard Park, New York, a Department of Defense Contractor.
While there, he also held the positions of General Manager, Director of Engineering and Programs, Director
of Engineering, and Director of Business Development. Under Mr. Sopko’s leadership as VP and GM, Carleton successfully grew its annual
sales from $110m to over $200m.
After nine years of Design Engineering and Program Management in the industry (1988-1997), Mr. Sopko co-founded Comprehensive
Technical Solutions Inc., a New York State S-corporation that provides product design engineering services to companies across the United
States, as well as produces and supports a portfolio of internally funded products.
Mr. Sopko is a Mechanical Engineering graduate of The State University of New York at Buffalo where he was also a member of The
University’s Mechanical and Aerospace Dean’s Advisory Board for over 11 years. Mr. Sopko is also an author and/or co-author of several US
Patents.
BOARD OF DIRECTORS & EXECUTIVES
F. Eric Armenat | Board Member
Mr. Armenat’s career has spanned more than 40 years in a variety of middle-market organizations both public and
privately owned. Mr. Armenat most recently served as President and Chief Executive officer of Multisorb Filtration
Group which he successfully spearheaded the sale of in early 2018 from a private equity owner. Multisorb is
the world leader in the active packaging industry, solving complex technical challenges in the pharmaceutical,
food, and industrial markets. From 2012 to 2016, Mr. Armenat served as President and Chief Executive Officer
for several companies owned by private equity. These companies included healthcare delivery, medical
waste collection, and disposal, as well as active packaging. He was responsible for the successful business
improvement and eventual divestiture of the companies.
From 2009 to 2012, Mr. Armenat served as Chief Operating Officer of Avox Systems (Zodiac Aerospace), a leading supplier of aircraft
oxygen systems. From 1994 to 2009, he served as Vice President of Operations and then President and General Manager of Carleton
Technologies (Cobham Mission Systems), a global leader of technology for the military and commercial aviation markets. Mr. Armenat
also worked as an Operations Management Consultant with Ernst and Young beginning in 1984.
Mr. Armenat earned his Bachelor of Science Degree in Industrial Engineering from Southern Illinois University and his MBA in Finance and
Accounting from St. Bonaventure University. He proudly served in the United States Air Force.
Robert M. Carey | Board Member
Mr. Carey brings over 45 years of experience ranging from general management to consultative work to the
Company. He was the General Manager of the Reichert Analytical Instruments group from 2001 to 2009. The
company manufactures and internationally sells a variety of analytical measurement instruments for use in
medicine, food processing, and biotechnology research.
Mr. Carey was the Principal at CMA, Ltd from 1990 to 2001. CMA, Ltd provides consulting services to the
manufacturing sector in the areas of organization, operational change and strategic planning. Mr. Carey was also
a Partner in Decision Processes International (DPI) from 1999 to 2001. DPI is an international strategic planning consultancy working with
companies of all sizes.
In 1979, Mr. Carey joined Wilson Greatbatch Ltd. (now Integer Holdings) as North American Sales Manager. Mr. Greatbatch held the
patents for the implantable pacemaker. The eponymously named company is the world’s leader in implantable power sources. In
1981 Mr. Carey was named Vice President of Wilson Greatbatch and General Manager of the Electrochem Div. Electrochem which
manufactures and internationally sells high-energy batteries used in rugged or remote environments such as space, oil and gas drilling,
the military, and the ocean.
He earned a Bachelor of Science in Microbiology from the State University of California, Long Beach and a Master of Business
Administration from the State University of New York at Buffalo. Mr. Carey served in the U.S. Army, achieving the rank of Captain.
Paul Heary | Chief Financial Officer
Mr. Heary has over 20 years of experience serving in senior financial management positions for several public
and privately owned middle market manufacturers located in Western New York. Prior to joining Taylor Devices,
Inc., Mr. Heary was Chief Financial Officer of Multisorb Filtration Group, a leader in sorbent technology serving the
pharmaceutical, food, and industrial markets, from 2016 to 2022. At Multisorb, Mr. Heary played a key role in guiding
the company through its 2018 sale from a private equity owner. From 2006 to 2016, he was the Senior Finance Director
at Carleton Technologies (d.b.a. Cobham Missions Systems), a global leader in technology for the aerospace and
defense market.
Mr. Heary joined Taylor Devices in September 2022. He has BS (Accounting) and MBA degrees from The State University of New York at Buffalo
and previously held certifications for public and management accounting (CPA and CMA).
90 Taylor Drive, North Tonawanda, NY 14120
Phone (716) 694-0800 | Fax (716) 695-6015
www.taylordevices.com