A surge in Taylor Devices’ more profitable U.S. markets helped the North Tonawanda shock absorber manufacturer increase its second-quarter profits by 86 percent despite a modest drop in its overall sales.
While Taylor Devices’ construction products business, which makes giant shock absorbers to help protect buildings and bridges from damage during earthquakes and high winds, weakened during the quarter, its sales were more lucrative because more of those revenues came from its more profitable markets in the United States, said Douglas P. Taylor, the company’s president.
“The company continues to perform well,” Taylor said Monday. “We believe 2013 should be another good and profitable year.”
Taylor Devices said its profits during the quarter that ended in November soared to $769,361, or 23 cents per share, from $413,741, or 13 cents per share, a year earlier.
The company’s earnings surged even though its revenues slid by 4 percent to $6.5 million from $6.8 million, as a 13 percent decline in sales at its construction products business more than offset an 8 percent increase in Taylor Devices defense and aerospace product sales.
But the profitability of those sales was much better, mainly because 62 percent of those revenues came from Taylor Devices’ U.S. markets, where company executives said market conditions and the level of competition is more favorable than in Asia, which accounted for a little more than a third of its overall revenues. A year ago, Asian markets provided 57 percent of Taylor Devices’ sales, while 36 percent came from the United States.
At the same time, Taylor Devices said its backlog of orders has shrunk by 49 percent over the past year. The company had $13 million in outstanding orders at the end of November, compared with $25.5 million in open orders at the end of November 2011.
“The U.S. construction markets remain stagnant, with most new orders for seismic and wind dampers used in buildings and bridges continuing to be received from Asian countries,” Taylor said.
While the company’s aerospace and defense business has strengthened recently, Taylor warned that it could take a turn for the worse if automatic spending cuts take effect or defense spending is reduced through negotiations to reduce the budget deficit.