Taylor Devices is coming off a “really good” year and a first quarter that saw the North Tonawanda shock absorber manufacturer’s profits jump by 49 percent.
But the past year has been so strong that Chief Executive Douglas P. Taylor warned shareholders Friday that the company’s sales and profits aren’t likely to top the record highs it set during that time.
“It’s the economy,” Taylor said following the company’s annual shareholder’s meeting in Amherst.
But Taylor was reluctant to predict just how short the company’s sales will fall from last year’s all-time high of $29 million, which was 38 percent more than its $21 million in revenues during the 2011 fiscal year.
“It will be somewhere between 2011 and 2012,” which still would make it the second-best year in the company’s history, he said.
Taylor said his outlook is based on his pessimistic outlook for the economy. “With the presidential election coming up and all the turmoil going on, it’s a very uncertain economy,” he told shareholders. “From the construction market’s point of view, the U.S. market stinks,” Taylor said. “The thing that’s been saving us is that the Asian markets are great.” Those Asian markets, especially in Taiwan, pushed sales of the company’s construction products, which primarily are used to protect buildings and bridges from wind and earthquake damage, up by 65 percent to $22.5 million during the fiscal year that ended in May. That strength continued through most of the summer, with construction product revenues almost doubling during the first quarter, which ended in August.
“We’re anticipating a solid year, but probably not as good as 2012,” said Craig Winters, one of the two sales managers for the company’s industrial products business.
The impending slowdown is reflected in the company’s backlog of orders, which is a good indicator of future business. Taylor Devices had 148 orders in its backlog at the end of August, which was 12 percent more than a year ago, but the value of that work was down 37 percent at $13.8 million.
The growth of the construction products business, which accounted for more than three-quarters of the company’s sales last year, has been fueled largely by projects to retrofit existing buildings or outfit new ones with seismic dampers to help them withstand earthquakes. Much of the growth has come from Taiwan, China and Japan, and interest in those seismic protection projects spiked following the devastating Japanese earthquake in March 2011.
The growth has prompted Taylor Devices to launch a $2.5 million expansion project that is expected to more than double its manufacturing space by the end of the year and ease a space crunch, especially for its large parts machining and assembly operations.
Taylor Devices purchased three industrial buildings, located about 1.4 miles from its current facilities on Tonawanda Island, and is converting them into production space that will house all of its machining and metalworking operations.
The company plans to keep its assembly and product testing areas at its existing plant on Tonawanda Island, but those operations will have much more space because of the area freed up by the relocated production facilities. Its engineering and corporate offices will stay at the original Tonawanda Island building.
The company, which has about 105 employees, has increased its workforce by 12 percent during the past year.