Taylor Devices Reports 26% Decline in Net Sales and 79% Drop in Net Income for Quarter Ending August 31, 2026

Taylor Devices, Inc. reported a significant decline in financial performance for the three months ending August 31, 2026, compared to the same period in the previous year. The company recorded net sales of $7.3 million, a decrease of 26% from $9.9 million in the prior year. Gross profit also fell sharply, down 51% to $2.2 million, resulting in a gross profit margin of 30%, which is 15 percentage points lower than the 45% margin reported in the same quarter last year. Net income plummeted by 79% to $456,933, down from $2.2 million, leading to earnings per share of $0.14 compared to $0.70 in the previous year.

The decline in revenue was attributed to a 33% reduction in revenue from long-term projects, with the number of such projects decreasing from 25 to 24 year-over-year. Sales to the aerospace and defense sector decreased by 17%, while sales to the construction sector saw a more substantial drop of 49%. In contrast, sales to industrial customers increased by 8%. The overall sales concentration shifted, with U.S. sales accounting for 89% of total sales, up from 83% in the previous year, while sales to Asia remained stable at 9%.

Operationally, Taylor Devices reported an increase in its backlog of sales orders, which rose to $55.2 million from $52.8 million at the end of the previous fiscal year. This backlog includes a significant non-project order valued at $19 million, with deliveries scheduled over several years. The company had 151 open sales orders as of August 31, 2026, compared to 127 a year earlier. The increase in backlog is expected to contribute positively to future revenue recognition, with the majority anticipated to be recognized in the current fiscal year.

Research and development costs increased by 88% to $152,074, reflecting the company's commitment to innovation despite the overall decline in sales. Selling, general, and administrative expenses decreased by 7% to $1.97 million, primarily due to lower employee incentive compensation accruals. The company’s liquidity position improved, with cash and cash equivalents rising to $3.6 million from $904,823 at the end of the previous fiscal year, bolstered by net operating activities generating $7.8 million in cash flow.

Looking ahead, Taylor Devices anticipates that the fluctuations in revenue and profitability experienced in the quarter ending August 31, 2026, may not be indicative of future results. The company is evaluating additional capital expenditures to expand capacity and expects to recognize revenue from its backlog in the upcoming quarters. However, management cautioned that market conditions and project timing could continue to impact financial performance.