TAYD's Fiscal 2026 Earnings Decline Y/Y on Structural Sales Weakness

Shares of Taylor Devices, Inc. TAYD have gained 4.8% since the company reported its earnings for the fiscal year ended May 31, 2026. This compares to the S&P 500 index’s 1% decline over the same time frame. Over the past month, the stock has gained 4.6% versus the S&P 500’s 3.5% growth.

Taylor Devices reported fiscal 2026 earnings per share of $2.70, down from $2.87 in fiscal 2025.

Sales decreased 10% year over year to $41.6 million. Net income declined 9% to $8.6 million.

Taylor Devices, Inc. Price, Consensus and EPS Surprise

Taylor Devices, Inc. price-consensus-eps-surprise-chart | Taylor Devices, Inc. Quote

4Q26 Update

Quarterly sales of $9 million denoted a 42.5% fall from $15.6 million in the year-ago quarter. Net income declined 49.4% to $1.9 million from $3.7 million. Earnings per share fell to 58 cents from $1.17 a year earlier.

Other Key Business Metrics

Taylor Devices' fiscal 2026 gross profit declined 15% to $18.3 million, with gross margin contracting to 44% from 46%. Operating income decreased 24% to $7.3 million. Research and development expenses jumped 75% to $0.8 million due to increased aerospace/defense activity, while selling, general and administrative expenses fell 10% to $10.2 million, mainly reflecting lower employee incentive compensation accruals. Other income increased 17%, driven by short-term investment interest income.

The company's order position strengthened considerably. Firm order backlog reached a record $52.8 million at May 31, 2026, compared with $27.1 million a year earlier. Aerospace/defense represented 92% of the backlog, up from 75%, while structural orders accounted for 5% versus 19%. The backlog included a $19 million non-project order, the largest single order in the company's history.

Management Commentary

CEO Tim Sopko attributed the weaker fourth-quarter and full-year sales primarily to delayed customer order placements, which pushed opportunities to convert orders into sales beyond fiscal 2026. Lower sales volume, particularly in the structural and industrial markets, also weighed on net income. Despite the lower volume, management highlighted cost control, noting that the full-year gross margin remained relatively close to the prior year's level.

Management also pointed to continued headwinds from higher interest rates and unfavorable foreign exchange rates in structural markets. However, positive momentum in aerospace/defense more than offset those pressures in the order book.

Factors Influencing the Headline Numbers

Fiscal 2026 revenues from long-term projects declined 25% year over year, while revenues from non-project business increased 22%. Structural sales fell 31%, and industrial sales decreased 11%, whereas aerospace/defense sales edged up 1%. Consequently, aerospace/defense increased to 66% of annual revenues from 59%, while structural's share fell to 25% from 32%. Sales to Asia also dropped to $3.2 million from $7 million.

The balance sheet remained liquid at fiscal year-end. Cash and cash equivalents declined to $0.9 million from $1.2 million, while short-term investments increased to $40.6 million from $34.8 million. Total assets rose to $77.7 million from $71.6 million, and stockholders' equity increased to $72.9 million from $62 million. The company's $10 million bank demand line of credit had no outstanding balance at May 31, 2026.

Net cash provided by operating activities was $7 million in fiscal 2026, down from $7.5 million in fiscal 2025.

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