Taylor Devices’ expansion of its North Tonawanda facilities took a heavy toll on its second-quarter profits.
The North Tonawanda shock absorber manufacturer’s earnings fell for the third straight quarter, tumbling by 60 percent, as its production was disrupted by the move of much of its production equipment to newly renovated space on Buffalo Bolt Way.
“This caused an interruption of production, with extensive lost time involved in the installation, leveling and set-up of the machines,” said Douglas P. Taylor, the company’s president.
That disruption led to a 29 percent drop in the company’s sales, especially in its key market for equipment that helps protect buildings and bridges from damage during earthquakes and high winds. That weakness more than offset a modest increase in sales of the company’s aerospace and defense products.
Taylor Devices’ profits slid to $306,423, or 9 cents per share, compared with $769,361, or 23 cents per share, a year ago.
The company’s sales dropped to $4.6 million during the quarter that ended in November, compared with $6.5 million a year earlier.
Most of the drop came from sales of the company’s construction products, which are mainly used for seismic and wind protection projects. Construction sales plunged by 47 percent to $2.2 million from $4.2 million, as the 27 long-term projects that it was working on during the second quarter were four fewer than a year earlier. Sales from short-term projects also weakened by 6 percent.
The company’s U.S. market was particularly weak, with domestic revenues dropping by about 36 percent to $2.6 million from $4 million a year ago. Asian sales slid by 15 percent to $2 million.
But Taylor also said there are encouraging signs for the company. “The good news is that our firm order backlog has increased,” rising by 26 percent to $16.5 million at the end of November, compared with $13.1 million at the beginning of June.
And the move to the new facilities also has been completed. The $3 million expansion project more than doubled Taylor Devices’ manufacturing space and is expected to ease a space crunch, especially for its large-parts machining and assembly operations. The company purchased three industrial buildings, located about 1.4 miles from its current facilities on Tonawanda Island, and converted them into production space that will house all of its machining and metalworking operations.