Taylor Devices Inc. (TAYD, Financial) filed Quarterly Report for the period ended 2011-08-31.
Taylor Devices Inc. has a market cap of $26.7 million; its shares were traded at around $8.25 with a P/E ratio of 18.3 and P/S ratio of 1.3.
Accounts receivable of $2,069,000 as of August 31, 2011 includes approximately $202,000 of amounts retained by customers on Projects. It also includes $42,000 of an allowance for doubtful accounts (“Allowance”). The accounts receivable balance as of May 31, 2011 of $2,137,000 included an Allowance of $42,000. The number of an average day's sales outstanding in accounts receivable (“DSO”) increased from 27 days at May 31, 2011 to 41 at August 31, 2011. The DSO is a function of 1.) the level of sales for an average day (for example, total sales for the past three months divided by 90 days) and 2.) the level of accounts receivable at the balance sheet date. The level of sales for an average day in the first quarter of the current year is significantly lower (36%) than in the fourth quarter of the prior year. The level of accounts receivable at the end of the current fiscal quarter is only 3% lower than at the end of the prior year. The combination of these two factors caused the DSO to increase from last year end to this. The Company expects to collect the net accounts receivable balance, including the retainage, during the next twelve months.
Accounts payable, at $1,639,000 as of August 31, 2011, is 27% more than the prior year-end. There is no specific reason for this fluctuation other than the normal payment cycle of vendor invoices. Commission expense on applicable sales orders is recognized at the time revenue is recognized. The commission is paid following receipt of payment from the customers. Accrued commissions as of August 31, 2011 are $333,000, down 23% from the $433,000 accrued at the prior year-end. The Company expects the current accrued amount to be paid during the next twelve months. Other current liabilities increased 79% from the prior year-end, to $2,385,000 primarily due to customer prepayments received in the current period. Payments on these liabilities will take place as scheduled within the next twelve months.
Capital expenditures for the three months ended August 31, 2011 were $411,000 compared to $53,000 in the same period of the prior year. As of August 31, 2011, the Company has commitments for capital expenditures of $303,000 during the next twelve months. Additional capital expenditures may be needed during the next twelve months to complete planned changes to existing buildings that the Company has agreed to purchase. The Company anticipates that its current cash and cash equivalent resources will be sufficient for that purpose.
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 $4,117,000 balance in this account at August 31, 2011 is only 2% less than the prior year-end. The Company expects to bill the entire amount during the next twelve months. 40% of the CIEB balance as of the end of the last fiscal quarter, May 31, 2011, was billed to those customers in the current fiscal quarter ended August 31, 2011. The remainder will be billed as the Projects progress, in accordance with the terms specified in the various contracts.
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Taylor Devices Inc. has a market cap of $26.7 million; its shares were traded at around $8.25 with a P/E ratio of 18.3 and P/S ratio of 1.3.
Highlight of Business Operations:
The Company's consolidated results of operations showed a 7% increase in net revenues and an increase in net income of 121%. Revenues recorded in the current period for long-term construction projects (“Project(s)”) were 42% higher than the level recorded in the prior year. Revenues recorded in the current period for other-than long-term construction projects (non-projects) were lower by 29% from the level recorded in the prior year. The gross profit as a percentage of net revenues for the current and prior year periods was 34% and 27%. Similar to the same period last year, we have several Projects in process during the current period that are sold directly to representatives in two different Asian countries net of their normal commissions. These Projects tend to have lower gross margins because the selling price is reduced to compensate the representative for the lack of commission. While we have more of these Projects in the current period than we did last year, a.) the level of sales recorded for these projects in the current period is 58% less than last year; b.) the aggregate gross margin recorded, as a percentage of the sales, on these Projects is five percentage points higher in the current period compared with last year, and c.) the aggregate sales recorded for these Projects in the current period is only 18% of the total Project sales recorded compared to last year when these Project sales represented 60% of the total Project sales recorded. We had 38 Projects in process during the current period compared with 17 during the same period last year.Accounts receivable of $2,069,000 as of August 31, 2011 includes approximately $202,000 of amounts retained by customers on Projects. It also includes $42,000 of an allowance for doubtful accounts (“Allowance”). The accounts receivable balance as of May 31, 2011 of $2,137,000 included an Allowance of $42,000. The number of an average day's sales outstanding in accounts receivable (“DSO”) increased from 27 days at May 31, 2011 to 41 at August 31, 2011. The DSO is a function of 1.) the level of sales for an average day (for example, total sales for the past three months divided by 90 days) and 2.) the level of accounts receivable at the balance sheet date. The level of sales for an average day in the first quarter of the current year is significantly lower (36%) than in the fourth quarter of the prior year. The level of accounts receivable at the end of the current fiscal quarter is only 3% lower than at the end of the prior year. The combination of these two factors caused the DSO to increase from last year end to this. The Company expects to collect the net accounts receivable balance, including the retainage, during the next twelve months.
Accounts payable, at $1,639,000 as of August 31, 2011, is 27% more than the prior year-end. There is no specific reason for this fluctuation other than the normal payment cycle of vendor invoices. Commission expense on applicable sales orders is recognized at the time revenue is recognized. The commission is paid following receipt of payment from the customers. Accrued commissions as of August 31, 2011 are $333,000, down 23% from the $433,000 accrued at the prior year-end. The Company expects the current accrued amount to be paid during the next twelve months. Other current liabilities increased 79% from the prior year-end, to $2,385,000 primarily due to customer prepayments received in the current period. Payments on these liabilities will take place as scheduled within the next twelve months.
Capital expenditures for the three months ended August 31, 2011 were $411,000 compared to $53,000 in the same period of the prior year. As of August 31, 2011, the Company has commitments for capital expenditures of $303,000 during the next twelve months. Additional capital expenditures may be needed during the next twelve months to complete planned changes to existing buildings that the Company has agreed to purchase. The Company anticipates that its current cash and cash equivalent resources will be sufficient for that purpose.
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 $4,117,000 balance in this account at August 31, 2011 is only 2% less than the prior year-end. The Company expects to bill the entire amount during the next twelve months. 40% of the CIEB balance as of the end of the last fiscal quarter, May 31, 2011, was billed to those customers in the current fiscal quarter ended August 31, 2011. The remainder will be billed as the Projects progress, in accordance with the terms specified in the various contracts.
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