Taylor Devices’ third-quarter profits jumped by 21 percent even though the North Tonawanda manufacturer’s revenues weakened by 28 percent because of a plunge in sales of the giant shock absorbers that it makes to protect buildings and bridges from damage during earthquakes and high winds.
Despite the weakness in its biggest construction market, Taylor Devices’ profits improved because sales of its more profitable defense and aerospace products grew by 29 percent, and the company reduced its expenses as it completed the first two phases of its expansion project at its North Tonawanda facilities.
“Our profitability is being helped by the expansion of our manufacturing facilities,” said Douglas P. Taylor, the company’s president.
While Taylor Devices’ sales weakened during the quarter that ended in February, Taylor said he still expects the fiscal year that ends in May to be “another good year” for the company, with profits through the first three quarters up 50 percent from a year ago.
Taylor Devices said its profits during the third quarter rose to $622,515, or 19 cents per share, from $514,213, or 16 cents per share, a year earlier.
Sales fell to $5.7 million, from $8 million, because of a 47 percent plunge in revenues from its seismic-protection products, which account for 57 percent of the company’s total revenues. Sales of seismic-protection projects to customers in Asia, which spiked last year in the wake of the 2011 Japanese earthquake, dropped by 29 percent during the quarter.
As a result, the company’s backlog of orders also has weakened, shrinking by a third, to $11.7 million, at the end of February, from $17.5 million in May 2012.
At the same time, though, Taylor Devices’ aerospace and defense business boosted its revenues by 29 percent, and because those sales tend to be more profitable than the products that it sells in the more competitive construction products market, the more lucrative shift in the company’s sales mix helped fuel the rise in earnings.
Taylor also said the company’s profitability was bolstered by its $2.5 million expansion project that will more than double its manufacturing space 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 has converted two of them into production space that will house all of its machining and metalworking operations. The third building is expected to be ready this fall, he said.