Actionable news
0
All posts from Actionable news
Actionable news in TAYD: Taylor Devices, Inc.,

Quarterly report [Sections 13 or 15(d)]

STYLE="font: 10pt Times New Roman, Times, Serif">

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

OR

For the transition period from to

Commission File Number 0-3498

TAYLOR DEVICES, INC.

(Exact name of registrant as specified in its charter)

NEW YORK 16-0797789
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
90 Taylor Drive, North Tonawanda, New York 14120-0748
(Address of principal executive offices) (Zip Code)

716-694-0800

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

As of April 12, 2016, there were outstanding 3,397,965 shares of the registrant’s common stock, par value $.025 per share.

TAYLOR DEVICES, INC.

Index to Form 10-Q

PART I FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of February 29, 2016 and May 31, 2015 3
Condensed Consolidated Statements of Income for the three and nine months ended February 29, 2016 and February 28, 2015 4
Condensed Consolidated Statements of Cash Flows for the nine months ended February 29, 2016 and February 28, 2015 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk

15

Item 4. Controls and Procedures 15
PART II

OTHER INFORMATION

Item 1 . Legal Proceedings 16
Item 1A . Risk Factors 16
Item 2 . Unregistered Sales of Equity Securities and Use of Proceeds 16
Item 3. Defaults Upon Senior Securities 17
Item 4. Mine Safety Disclosures 17
Item 5 . Other Information 17
Item 6 . Exhibits 17

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

18

SIGNATURES

19
TAYLOR DEVICES, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets (Unaudited)
February 29, May 31,
2016 2015
Assets
Current assets:
Cash and cash equivalents $ 6,787,766 $ 4,895,898
Accounts receivable, net 4,734,856 4,754,757
Inventory 10,276,725 8,662,056
Costs and estimated earnings in excess of billings 4,498,416 5,169,956
Other current assets 1,160,463 1,249,006
Total current assets 27,458,226 24,731,673
Maintenance and other inventory, net 662,948 889,929
Property and equipment, net 8,328,087 7,873,511
Other assets 174,057 169,995
$ 36,623,318 $ 33,665,108
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,086,950 $ 2,703,065
Accrued commissions 507,874 763,463
Billings in excess of costs and estimated earnings 2,379,849 2,723,472
Other current liabilities 2,121,585 1,395,341
Total current liabilities 7,096,258 7,585,341
Long-term liabilities 628,785 628,785
Stockholders' Equity:
Common stock and additional paid-in capital 8,449,239 8,072,932
Retained earnings 23,092,819 19,976,908
31,542,058 28,049,840
Treasury stock - at cost (2,643,783 ) (2,598,858 )
Total stockholders’ equity 28,898,275 25,450,982
$ 36,623,318 $ 33,665,108
See notes to condensed consolidated financial statements.
TAYLOR DEVICES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income (Unaudited) (Unaudited)
For the three months ended

For the nine months ended

February 29, 2016 February 28, 2015 February 29, 2016 February 28, 2015
Sales, net $ 8,326,147 $ 6,566,338 $ 26,619,109 $ 19,822,815
Cost of goods sold 5,010,028 4,832,139 16,932,908 14,415,296
Gross profit 3,316,119 1,734,199 9,686,201 5,407,519
Selling, general and administrative expenses 1,645,236 1,270,818 5,048,450 3,574,472
Operating income 1,670,883 463,381 4,637,751 1,833,047
Other income, net 2,721 3,373 12,160 14,326
Income before provision for income taxes 1,673,604 466,754 4,649,911 1,847,373
Provision for income taxes 492,000 75,000 1,534,000 559,000
Net income $ 1,181,604 $ 391,754 $ 3,115,911 $ 1,288,373
Basic and diluted earnings per common share $ 0.35 $ 0.12 $ 0.92 $ 0.39

See notes to condensed consolidated financial statements.

TAYLOR DEVICES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the nine months ended February 29, 2016 February 28, 2015
Operating activities:
Net income $ 3,115,911 $ 1,288,373
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation 616,561 556,884
Deferred income taxes - 3,000
Stock options issued for services 60,719 37,112
Changes in other assets and liabilities:
Accounts receivable 19,901 (996,528 )
Inventory (1,387,688 ) (101,903 )
Costs and estimated earnings in excess of billings 671,540 (1,727,087 )
Other current assets 88,543 (11,480 )
Accounts payable (616,115 ) 913,003
Accrued commissions (255,589 ) 18,594
Billings in excess of costs and estimated earnings (343,623 ) 763,664
Other current liabilities 726,244 (747,628 )
Net operating activities 2,696,404 (3,996 )
Investing activities:
Acquisition of property and equipment (1,071,137 ) (453,945 )
Other investing activities (4,062 ) (4,125 )
Net investing activities (1,075,199 ) (458,070 )
Financing activities:
Proceeds from issuance of common stock, net 270,663 40,539
Net change in cash and cash equivalents 1,891,868 (421,527 )
Cash and cash equivalents - beginning 4,895,898 2,793,642
Cash and cash equivalents - ending $ 6,787,766 $ 2,372,115
See notes to condensed consolidated financial statements.

TAYLOR DEVICES, INC.

Notes to Condensed Consolidated Financial Statements

1. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of February 29, 2016 and May 31 2015, the results of operations for the three and nine months ended February 29, 2016 and February 28, 2015, and cash flows for the nine months ended February 29, 2016 and February 28, 2015. These financial statements should be read in conjunction with the audited financial statements and notes thereto contained in the Company's Annual Report to Shareholders for the year ended May 31, 2015.
2. The Company has evaluated events and transactions for potential recognition or disclosure in the financial statements through the date the financial statements were issued.
3. There is no provision nor shall there be any provisions for profit sharing, dividends, or any other benefits of any nature at any time for this fiscal year.
4. For the nine month periods ended February 29, 2016 and February 28, 2015, the net income was divided by 3,382,678 and 3,344,778 respectively, which is net of the Treasury shares, to calculate the net income per share. For the three month periods ended February 29, 2016 and February 28, 2015, the net income was divided by 3,378,446 and 3,344,059 respectively, which is net of the Treasury shares, to calculate the net income per share.
5. The results of operations for the three and nine month periods ended February 29, 2016 are not necessarily indicative of the results to be expected for the full year.
6. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09, as amended, is effective for annual reporting periods, and interim periods within that period, beginning after December 15, 2017 (fiscal year 2019 for the Company). Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company has not yet determined the potential effects of the adoption of ASU 2014-09 on its Consolidated Financial Statements. Except as identified in Note 7, below, other recently issued Accounting Standards Codification (ASC) guidance has either been implemented or are not significant to the Company.
7. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17 simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for public companies for annual reporting periods beginning after December 15, 2016 and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively and early adoption is permitted. Adoption of this guidance would affect the balance sheets as of February 29, 2016 and May 31, 2015 as follows:

Decrease in Current assets $858,900

Increase in Noncurrent assets $230,115

Decrease in Noncurrent liabilities $628,785

February 29, 2016 May 31, 2015
Raw materials $ 513,888 $ 519,598
Work-in-process 9,235,739 7,657,720
Finished goods 627,098 584,738
10,376,725 8,762,056
Less allowance for obsolescence 100,000 100,000
$ 10,276,725 $ 8,662,056

Item 2. 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 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this 10-Q and its Exhibits 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," and "assume" constitute forward-looking statements and, as such, are not a guarantee of future performance. The 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, reductions in capital budgets by our customers and potential customers; changing product demand and industry capacity; increased competition and pricing pressures;...


More