Taylor Devices closed the fiscal year ended late May with a sales decline that flatters the next cycle rather than explains this one. Revenue fell 10% to $42 million, almost entirely because structural construction work, a project line that used to carry about a third of sales, receded. Aerospace and defense now makes up two-thirds of the business. The year-end order book of $53 million is a record, nearly double the prior year, and larger than a full year of sales. Delayed customer placement, not lost demand, is how the chief executive framed the gap.
The investment question is what that mix shift is worth once the math is done. The stock last printed near $61, for a market value of about $195 million. Cash and short-term investments of $42 million sit against no debt, which is roughly a fifth of that value. The company paid a 5% effective tax rate on a year in which a stock-option deduction did most of the work, and the structural line may not return to its old size for years.
The strongest evidence for the new trajectory is the backlog mix: more than nine-tenths aerospace and defense, up from three-quarters a year earlier. Reported net income of $8.6 million was flattered by that low tax rate, so earnings power looks better than the income statement line implies. Conversion timing, the staying power of a mid-forties gross margin, and whether the flagship nineteen-million order ships on the published schedule are the variables that decide the case.