Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
May 31, 2016 | Aug. 12, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Taylor Devices Inc | |
Entity Central Index Key | 96,536 | |
Document Type | 10-K | |
Document Period End Date | May 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --05-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 68,300,000 | |
Entity Common Stock, Shares Outstanding | 3,423,099 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,016 |
Balance Sheets
Balance Sheets - USD ($) | May 31, 2016 | May 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 6,086,080 | $ 4,895,898 |
Short-term investments | 1,000,000 | |
Accounts receivable, net (Note 2) | 3,992,214 | 4,754,757 |
Inventory (Note 3) | 9,604,956 | 8,662,056 |
Prepaid expenses | 273,204 | 375,129 |
Prepaid income taxes | 199,077 | 14,977 |
Costs and estimated earnings in excess of billings (Note 4) | 5,500,771 | 5,169,956 |
Deferred income taxes (Note 10) | 965,100 | 858,900 |
Total current assets | 27,621,402 | 24,731,673 |
Maintenance and other inventory, net (Note 5) | 697,043 | 889,929 |
Property and equipment, net (Note 6) | 8,994,504 | 7,873,511 |
Cash value of life insurance, net | 175,350 | 169,995 |
Total assets | 37,488,299 | 33,665,108 |
Current liabilities: | ||
Accounts payable | 1,767,017 | 2,703,065 |
Accrued commissions | 683,600 | 763,463 |
Other accrued expenses | 2,733,847 | 1,395,341 |
Billings in excess of costs and estimated earnings (Note 4) | 1,463,621 | 2,723,472 |
Total current liabilities | 6,648,085 | 7,585,341 |
Deferred income taxes (Note 10) | 682,985 | 628,785 |
Stockholders' Equity: | ||
Common stock, $.025 par value, authorized 8,000,000 shares, issued 3,910,049 and 3,901,397 shares | 98,738 | 97,535 |
Paid-in capital | 8,529,542 | 7,975,397 |
Retained earnings | 24,185,133 | 19,976,908 |
Treasury stock - 541,296 and 537,733 shares at cost | (2,656,184) | (2,598,858) |
Total stockholders' equity | 30,157,229 | 25,450,982 |
Total liabilities and stockholders' equity | $ 37,488,299 | $ 33,665,108 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | May 31, 2016 | May 31, 2015 |
Treasury shares | 541,296 | 537,733 |
Common Stock | ||
Par value | $ 0.25 | $ 0.25 |
Authorized shares | 8,000,000 | 8,000,000 |
Issued shares | 3,949,556 | 3,901,397 |
Treasury Stock | ||
Par value | $ 0.25 | $ 0.25 |
Treasury shares | 541,296 | 537,733 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Income Statement [Abstract] | ||
Sales, net (Note 9) | $ 35,680,449 | $ 30,589,266 |
Cost of goods sold | 23,243,451 | 21,844,715 |
Gross profit | 12,436,998 | 8,744,551 |
Selling, general and administrative expenses | 6,688,591 | 5,683,108 |
Operating income | 5,748,407 | 3,061,443 |
Other income: | ||
Interest, net | 10,748 | 3,988 |
Miscellaneous | 7,070 | 8,517 |
Total other income | 17,818 | 12,505 |
Income before provision for income taxes | 5,766,225 | 3,073,948 |
Provision for income taxes (Note 10) | 1,558,000 | 899,000 |
Net income | $ 4,208,225 | $ 2,174,948 |
Basic earnings per common share (Note 11) | $ 1.24 | $ 0.65 |
Diluted earnings per common share (Note 11) | $ 1.21 | $ 0.64 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Operating activities: | ||
Net income | $ 4,208,225 | $ 2,174,948 |
Adjustments to reconcile net income to net cash flows from operating activities: | ||
Depreciation | 818,385 | 740,844 |
Stock options issued for services | 151,184 | 116,069 |
Bad debts expense | 10,000 | |
Provision for inventory obsolescence | 180,000 | 180,000 |
Deferred income taxes | (52,000) | 310,000 |
Changes in other current assets and liabilities: | ||
Accounts receivable | 752,543 | (1,860,413) |
Inventory | (930,014) | 82,886 |
Prepaid expenses | 101,925 | 48,103 |
Prepaid income taxes | (184,100) | (14,977) |
Costs and estimated earnings in excess of billings | (330,815) | (2,796,165) |
Accounts payable | (936,048) | 1,536,903 |
Accrued commissions | (79,863) | 333,624 |
Other accrued expenses | 1,338,506 | 136,576 |
Billings in excess of costs and estimated earnings | (1,259,851) | 1,872,941 |
Accrued income taxes | (85,023) | |
Net operating activities | 3,788,077 | 2,776,316 |
Investing activities: | ||
Acquisition of property and equipment | (1,939,378) | (746,627) |
Increase in short-term investments | (1,000,000) | |
Increase in cash value of life insurance | (5,355) | (5,427) |
Net investing activities | (2,944,733) | (752,054) |
Financing activities: | ||
Proceeds from issuance of common stock | 346,838 | 77,994 |
Net financing activities | 346,838 | 77,994 |
Net change in cash and cash equivalents | 1,190,182 | 2,102,256 |
Cash and cash equivalents - beginning | 4,895,898 | 2,793,642 |
Cash and cash equivalents - ending | $ 6,086,080 | $ 4,895,898 |
Shareholders Equity
Shareholders Equity - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit | Treasury Stock |
Balance, beginning at May. 31, 2014 | $ 96,824 | $ 7,682,170 | $ 17,801,960 | $ (2,498,983) |
Net income | 2,174,948 | |||
Common stock issued for employee stock option plan (Note 14) | 669 | 159,939 | (99,875) | |
Common stock issued for employee stock purchase plan (Note 13) | 42 | 17,219 | ||
Stock options issued for services | 116,069 | |||
Balance, ending at May. 31, 2015 | 97,535 | 7,975,397 | 19,976,908 | (2,598,858) |
Net income | 4,208,225 | |||
Common stock issued for employee stock option plan (Note 14) | 1,168 | 383,157 | (57,326) | |
Common stock issued for employee stock purchase plan (Note 13) | 35 | 19,804 | ||
Stock options issued for services | 151,184 | |||
Balance, ending at May. 31, 2016 | $ 98,738 | $ 8,529,542 | $ 24,185,133 | $ (2,656,184) |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
May 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 1. Summary of Significant Accounting Policies: Nature of Operations: Taylor Devices, Inc. (the Company) manufactures and sells a single group of very similar products that have many different applications for customers. These similar products are included in one of six categories; namely, Seismic Dampers, Fluidicshoks®, Crane and Industrial Buffers, Self-Adjusting Shock Absorbers, Liquid Die Springs, and Vibration Dampers for use in various types of machinery, equipment and structures, primarily to customers which are located throughout the United States and several foreign countries. The products are manufactured at the Company's sole operating facility in the United States where all of the Company's long-lived assets reside. Management does not track or otherwise account for sales broken down by these categories. 73% of the Company's 2016 revenue was generated from sales to customers in the United States and 22% was from sales to customers in Asia. Remaining sales were to customers in other countries in North America, Europe and South America. 65% of the Company's 2015 revenue was generated from sales to customers in the United States and 31% was from sales to customers in Asia. Remaining sales were to customers in other countries in North America, Europe and South America. Principles of Consolidation: The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Tayco Realty Corporation (Realty). All inter-company transactions and balances have been eliminated in consolidation. Subsequent Events: The Company has evaluated events and transactions for potential recognition or disclosure in the financial statements through the date the financial statements were issued. Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents: The Company includes all highly liquid investments in money market funds in cash and cash equivalents on the accompanying balance sheets. Cash and cash equivalents in financial institutions may exceed insured limits at various times during the year and subject the Company to concentrations of credit risk. Short-term Investments: At times, the Company invests excess funds in liquid interest earning instruments. Short-term investments at May 31, 2016 include available for sale corporate bonds stated at fair value, which approximates cost. The bonds (20) mature on various dates during the period September 2017 to December 2021. Unrealized holding gains and losses would be presented as a separate component of accumulated other comprehensive income, net of deferred income taxes. Realized gains and losses on the sale of investments are determined using the specific identification method. The bonds are valued using pricing models maximizing the use of observable inputs for similar securities. This includes basing value on yields currently available on comparable securities of issuers with similar credit ratings. Accounts Receivable: Accounts receivable are stated at an amount management expects to collect from outstanding balances. Management provides for probable uncollectible accounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. Inventory: Inventory is stated at the lower of average cost or net realizable value. Average cost approximates first-in, first-out cost. Property and Equipment: Property and equipment is stated at cost net of accumulated depreciation. Deprecation is provided primarily using the straight-line method for financial reporting purposes, and accelerated methods for income tax reporting purposes. Maintenance and repairs are charged to operations as incurred; significant improvements are capitalized. Cash Value of Life Insurance: Cash value of life insurance is stated at the surrender value of the contracts. Revenue Recognition: Sales are recognized when units are delivered or services are performed. Sales under fixed-price contracts are recorded as deliveries are made at the contract sales price of the units delivered. Sales under certain fixed-price contracts requiring substantial performance over several periods prior to commencement of deliveries, are accounted for under the percentage-of-completion method of accounting whereby revenues are recognized based on estimates of completion prepared on a ratio of cost to total estimated cost basis. Costs include all material and direct and indirect charges related to specific contracts. Other expenses are charged to operations as incurred. Total estimated costs for each of the contracts are estimated based on a combination of historical costs of manufacturing similar products and estimates or quotes from vendors for supplying parts or services towards the completion of the manufacturing process. Adjustments to cost estimates are made periodically, and losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. If total costs calculated upon completion of the manufacturing process in the current period for a contract are more than the estimated total costs at completion used to calculate revenue in a prior period, then the revenue and profits in the current period will be lower than if the estimated costs used in the prior period calculation were equal to the actual total costs upon completion. In the fiscal year ended May 31, 2016, 66% of total revenue recognized was accounted for using the percentage-of-completion method of accounting while the remaining 34% of revenue was recorded as deliveries were made to our customers. In the fiscal year ended May 31, 2015, 70% of total revenue recognized was accounted for using the percentage-of-completion method of accounting while the remaining 30% of revenue was recorded as deliveries were made to our customers. For financial statement presentation purposes, the Company nets progress billings against the total costs incurred on uncompleted contracts. The asset, "costs and estimated earnings in excess of billings," represents revenues recognized in excess of amounts billed. The liability, "billings in excess of costs and estimated earnings," represents billings in excess of revenues recognized. Shipping and Handling Costs: Shipping and handling costs are classified as a component of selling, general and administrative expenses. The amounts of these costs were $272,353 and $247,077 for the years ended May 31, 2016 and 2015. Research and Development Costs: Research and development costs are classified as a component of cost of sales. The amounts of these costs were $428,000 and $268,000 for the years ended May 31, 2016 and 2015. Income Taxes: The provision for income taxes provides for the tax effects of transactions reported in the financial statements regardless of when such taxes are payable. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the tax and financial statement basis of assets and liabilities. Deferred taxes are based on tax laws currently enacted with tax rates expected to be in effect when the taxes are actually paid or recovered. The Company's practice is to recognize interest related to income tax matters in interest income / expense and to recognize penalties in selling, general and administrative expenses. The Company did not have any accrued interest or penalties included in its consolidated balance sheets at May 31, 2016 or 2015. The Company recorded no interest expense or penalties in its consolidated statements of income during the years ended May 31, 2016 and 2015. The Company believes it is no longer subject to examination by federal and state taxing authorities for years prior to May 31, 2013. Sales Taxes: Certain jurisdictions impose a sales tax on Company sales to nonexempt customers. The Company collects these taxes from customers and remits the entire amount as required by the applicable law. The Company excludes from revenues and expenses the tax collected and remitted. Stock-Based Compensation: The Company measures compensation cost arising from the grant of share-based payments to employees at fair value and recognizes such cost in income over the period during which the employee is required to provide service in exchange for the award. The stock-based compensation expense for the years ended May 31, 2016 and 2015 was $151,184 and $116,069. New Accounting Standards: In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17 simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for public companies for annual reporting periods beginning after December 15, 2016 and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively, and early adoption is permitted. Adoption of this guidance would affect the balance sheets as of May 31, 2016 and 2015 as follows: Decrease current assets by $965,100 and $858,900 Increase noncurrent assets by $282,115 and $230,115 Decrease noncurrent liabilities by $682,985 and $628,785 Other recently issued Accounting Standards Codification (ASC) guidance has either been implemented or are not significant to the Company. |
Accounts receivable
Accounts receivable | 12 Months Ended |
May 31, 2016 | |
Receivables [Abstract] | |
Accounts receivable | 2. Accounts Receivable: 2016 2015 Customers $ 3,480,781 $ 4,534,143 Customers - retention 531,189 230,370 Gross accounts receivable 4,011,970 4,764,513 Less allowance for doubtful accounts 19,756 9,756 Net accounts receivable $ 3,992,214 $ 4,754,757 |
Inventory
Inventory | 12 Months Ended |
May 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | 3. Inventory: 2016 2015 Inventory, net Raw materials $ 511,530 $ 519,598 Work-in-process 8,639,068 7,657,720 Finished goods 554,358 584,738 Gross inventory 9,704,956 8,762,056 Less allowance for obsolescence 100,000 100,000 Net inventory $ 9,604,956 $ 8,662,056 |
Costs and estimated earnings on
Costs and estimated earnings on uncompleted contracts | 12 Months Ended |
May 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Costs and estimated earnings on uncompleted contracts | 4. Costs and Estimated Earnings on Uncompleted Contracts: 2016 2015 Costs and estimated earnings on uncompleted contracts Costs incurred on uncompleted contracts $11,441,874 $10,439,879 Estimated earnings 4,251,018 4,584,090 Total costs and estimated earnings 15,692,892 15,023,969 Less billings to date 11,655,742 12,577,485 Costs and estimated earnings not billed $ 4,037,150 $ 2,446,484 Amounts are included in the accompanying balance sheets under the following captions: 2016 2015 Costs and estimated earnings not billed Costs and estimated earnings in excess of billings $ 5,500,771 $ 5,169,956 Billings in excess of costs and estimated earnings 1,463,621 2,723,472 Costs and estimated earnings not billed $ 4,037,150 $ 2,446,484 |
Maintenance and other inventory
Maintenance and other inventory | 12 Months Ended |
May 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Maintenance and other inventory | 5. Maintenance and Other Inventory: 2016 2015 Maintenance and other inventory $ 1,956,626 $ 2,102,494 Less allowance for obsolescence 1,259,583 1,212,565 Maintenance and other inventory, net $ 697,043 $ 889,929 Maintenance and other inventory represent stock that is estimated to have a product life-cycle in excess of twelve-months. This stock represents certain items the Company is required to maintain for service of products sold, and items that are generally subject to spontaneous ordering. This inventory is particularly sensitive to technical obsolescence in the near term due to its use in industries characterized by the continuous introduction of new product lines, rapid technological advances and product obsolescence. Therefore, management of the Company has recorded an allowance for potential inventory obsolescence. The provision for potential inventory obsolescence was $180,000 for each of the years ended May 31, 2016 and 2015. |
Property and equipment
Property and equipment | 12 Months Ended |
May 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | 6. Property and Equipment: 2016 2015 Land $ 195,220 $ 195,220 Buildings and improvements 8,741,209 7,908,653 Machinery and equipment 8,498,997 7,566,026 Office furniture and equipment 1,398,016 1,328,806 Autos and trucks 84,256 73,331 Land improvements 402,022 379,432 Gross property and equipment 19,319,720 17,451,468 Less accumulated depreciation 10,325,216 9,577,957 Property and equipment, net $ 8,994,504 $ 7,873,511 Depreciation expense was $818,385 and $740,844 for the years ended May 31, 2016 and 2015. The Company has commitments to make capital expenditures of approximately $550,000 as of May 31, 2016. |
Short-term borrowings
Short-term borrowings | 12 Months Ended |
May 31, 2016 | |
Debt Disclosure [Abstract] | |
Short-term borrowings | 7. Short-Term Borrowings: The Company has a credit facility with a $6,000,000 demand line of credit from a bank, with interest payable at the Company's option of 30, 60, 90 or 180 day LIBOR rate plus 2.5% or the bank's prime rate less .25%. The line is secured by accounts receivable, equipment, inventory, general intangibles, and a negative pledge of the Company's real property. This line of credit is subject to the usual terms and conditions applied by the bank and subject to renewal annually. There is no amount outstanding under the line of credit at May 31, 2016 or May 31, 2015. The Company uses a cash management facility under which the bank draws against the available line of credit to cover checks presented for payment on a daily basis. Outstanding checks under this arrangement totaled $517,960 and $618,974 as of May 31, 2016 and 2015. These amounts are included in accounts payable. |
Legal proceedings
Legal proceedings | 12 Months Ended |
May 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal proceedings | 8. Legal Proceedings: There are no legal proceedings except for routine litigation incidental to the business. |
Sales
Sales | 12 Months Ended |
May 31, 2016 | |
Notes to Financial Statements | |
Sales | 9. Sales: The Company manufactures and sells a single group of very similar products that have many different applications for customers. These similar products are included in one of six categories; namely, Seismic Dampers, Fluidicshoks®, Crane and Industrial Buffers, Self-Adjusting Shock Absorbers, Liquid Die Springs, and Vibration Dampers. Management does not track or otherwise account for sales broken down by these categories. Sales of the Company's products are made to three general groups of customers: industrial, construction and aerospace / defense. A breakdown of sales to these three general groups of customers is as follows: 2016 2015 Construction $21,009,587 $16,658,555 Aerospace / Defense 12,320,818 12,009,356 Industrial 2,350,044 1,921,355 Sales, net $35,680,449 $30,589,266 Sales to seven customers approximated 55% (10%, three at 8% and three at 7%, respectively) of net sales for 2016. Sales to seven customers approximated 62% (14%, 12%, 11%, 9%, 6% and two at 5%, respectively) of net sales for 2015. |
Income Taxes
Income Taxes | 12 Months Ended |
May 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes: 2016 2015 Current tax provision: Federal $ 1,609,500 $ 588,700 State 500 300 Total current tax provision 1,610,000 589,000 Deferred tax provision: Federal (51,500 ) 308,900 State (500 ) 1,100 Total deferred tax provision (52,000 ) 310,000 Total tax provision $ 1,558,000 $ 899,000 A reconciliation of provision for income taxes at the statutory rate to income tax provision at the Company's effective rate is as follows: 2016 2015 Computed tax provision at the expected statutory rate $1,960,500 $1,045,200 State income tax - net of Federal tax benefit 400 200 Tax effect of permanent differences: Research tax credits (266,000 ) (101,000 ) Other permanent differences (165,700 ) (44,700 ) Other 28,800 (700 ) Total tax provision $ 1,558,000 $ 899,000 Effective income tax rate 27.0% 29.2% Significant components of the Company's deferred tax assets and liabilities consist of the following: 2016 2015 Deferred tax assets: Allowance for doubtful receivables $ 6,700 $ 3,300 Tax inventory adjustment 95,500 77,700 Allowance for obsolete inventory 463,600 447,700 Accrued vacation 73,700 63,900 Accrued commissions 7,200 9,300 Warranty reserve 45,400 12,400 Stock options issued for services 273,000 244,600 Total deferred tax assets 965,100 858,900 Deferred tax liabilities: Excess tax depreciation (682,985 ) (628,785 ) Net deferred tax assets $ 282,115 $ 230,115 Realization of the deferred tax assets is dependent on generating sufficient taxable income at the time temporary differences become deductible. The Company provides a valuation allowance to the extent that deferred tax assets may not be realized. A valuation allowance has not been recorded against the deferred tax assets since management believes it is more likely than not that the deferred tax assets are recoverable. The Company considers future taxable income and potential tax planning strategies in assessing the need for a potential valuation allowance. The amount of the deferred tax assets considered realizable however, could be reduced in the near term if estimates of future taxable income are reduced. The Company will need to generate approximately $2.8 million in taxable income in future years in order to realize the deferred tax assets recorded as of May 31, 2016 of $965,100. The Company and its subsidiary file consolidated Federal and State income tax returns. As of May 31, 2016, the Company had State investment tax credit carryforwards of approximately $262,000 expiring through May 2022. |
Earnings per common share
Earnings per common share | 12 Months Ended |
May 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per common share | 11. Earnings Per Common Share: Basic earnings per common share is computed by dividing income available to common stockholders by the weighted-average common shares outstanding for the period. Diluted earnings per common share reflects the weighted-average common shares outstanding and dilutive potential common shares, such as stock options. A reconciliation of weighted-average common shares outstanding to weighted-average common shares outstanding assuming dilution is as follows: 2016 2015 Average common shares outstanding 3,393,919 3,350,033 Common shares issuable under stock option plans 82,508 52,176 Average common shares outstanding assuming dilution 3,476,427 3,402,209 |
Related party transactions
Related party transactions | 12 Months Ended |
May 31, 2016 | |
Related Party Transactions [Abstract] | |
Related party transactions | 12. Related Party Transactions: The Company had no related party transactions for the years ended May 31, 2016 and 2015. |
Employee stock purchase plan
Employee stock purchase plan | 12 Months Ended |
May 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee stock purchase plan | 13. Employee Stock Purchase Plan: In March 2004, the Company reserved 295,000 shares of common stock for issuance pursuant to a non-qualified employee stock purchase plan. Participation in the employee stock purchase plan is voluntary for all eligible employees of the Company. Purchase of common shares can be made by employee contributions through payroll deductions. At the end of each calendar quarter, the employee contributions will be applied to the purchase of common shares using a share value equal to the mean between the closing bid and ask prices of the stock on that date. These shares are distributed to the employees at the end of each calendar quarter or upon withdrawal from the plan. During the years ended May 31, 2016 and 2015, 1,409 ($12.615 to $16.345 price per share) and 1,688 ($8.925 to $12.02 price per share) common shares, respectively, were issued to employees. As of May 31, 2016, 226,502 shares were reserved for further issue. |
Stock option plans
Stock option plans | 12 Months Ended |
May 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock option plans | 14. Stock Option Plans: In 2015, the Company adopted a stock option plan which permits the Company to grant both incentive stock options and non-qualified stock options. The incentive stock options qualify for preferential treatment under the Internal Revenue Code. Under this plan, 160,000 shares of common stock have been reserved for grant to key employees and directors of the Company and 2,250 shares have been granted as of May 31, 2016. Under the plan, the option price may not be less than the fair market value of the stock at the time the options are granted. Options vest immediately and expire ten years from the date of grant. Using the Black-Scholes option pricing model, the weighted average estimated fair value of each option granted under the plan was $3.05 during 2016 and $2.42 during 2015. The pricing model uses the assumptions noted in the following table. Expected volatility is based on the historical volatility of the Company's stock. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The expected life of options granted is derived from previous history of stock exercises from the grant date and represents the period of time that options granted are expected to be outstanding. The Company uses historical data to estimate option exercise and employee termination assumptions under the valuation model. The Company has never paid dividends on its common stock and does not anticipate doing so in the foreseeable future. 2016 2015 Risk-free interest rate 1.50% 2.30% Expected life in years 3.2 3.2 Expected volatility 26% 28% Expected dividend yield 0% 0% The following is a summary of stock option activity: Shares Weighted Average Exercise Price Intrinsic Value Outstanding - May 31, 2014 219,500 $ 7.31 $ 398,954 Options granted 48,000 $ 10.82 Less: options exercised 26,750 $ 6.00 Outstanding - May 31, 2015 240,750 $ 8.16 $ 1,134,531 Options granted 49,500 $ 14.982 Less: options exercised 46,750 $ 8.221 Outstanding - May 31, 2016 243,500 $ 9.53 $ 1,745,254 We calculated intrinsic value for those options that had an exercise price lower than the market price of our common shares as of the balance sheet dates. The aggregate intrinsic value of outstanding options as of the end of each fiscal year is calculated as the difference between the exercise price of the underlying options and the market price of our common shares for the options that were in-the-money at that date (243,500 at May 31, 2016 and 240,750 at May 31, 2015.) The Company's closing stock price was $16.70 and $12.87 as of May 31, 2016 and 2015. As of May 31, 2016, there are 157,750 options available for future grants under the 2015 stock option plan. $384,325 was received from the exercise of share options during the fiscal year ended May 31, 2016. The following table summarizes information about stock options outstanding at May 31, 2016: Outstanding and Exercisable Range of Number Weighted Average Weighted Exercise of Remaining Years Average Prices Options of Contractual Life Exercise Price $2.00-$3.00 10,000 2.9 $ 2.83 $5.01-$6.00 40,000 2.6 $ 5.52 $6.01-$7.00 24,500 3.0 $ 6.26 $7.01-$8.00 25,000 6.9 $ 7.74 $8.01-$9.00 41,750 7.6 $ 8.73 $11.01-$12.00 25,000 5.9 $11.29 $12.01-$13.00 47,250 9.0 $12.42 $16.01-$17.00 30,000 9.9 $16.40 $2.00-$17.00 243,500 6.4 $ 9.53 The following table summarizes information about stock options outstanding at May 31, 2015: Outstanding and Exercisable Range of Number Weighted Average Weighted Exercise of Remaining Years Average Prices Options of Contractual Life Exercise Price $2.00-$3.00 10,000 3.9 $ 2.83 $5.01-$6.00 45,000 3.3 $ 5.56 $6.01-$7.00 28,250 3.8 $ 6.24 $7.01-$8.00 25,000 7.9 $ 7.74 $8.01-$9.00 77,500 8.5 $ 8.61 $11.01-$12.00 25,000 6.9 $11.29 $12.01-$13.00 30,000 9.9 $12.20 $2.00-$13.00 240,750 6.7 $ 8.16 |
Preferred stock
Preferred stock | 12 Months Ended |
May 31, 2016 | |
Equity [Abstract] | |
Preferred stock | 15. Preferred Stock: The Company has 2,000,000 authorized but unissued shares of preferred stock which may be issued in series. The shares of each series shall have such rights, preferences, and limitations as shall be fixed by the Board of Directors. |
Treasury stock
Treasury stock | 12 Months Ended |
May 31, 2016 | |
Equity [Abstract] | |
Treasury stock | 16. Treasury Stock: Treasury shares increased from 537,733 at May 31, 2015 to 541,296 at May 31, 2016. |
Retirement plan
Retirement plan | 12 Months Ended |
May 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement plan | 17. Retirement Plan: The Company maintains a retirement plan for essentially all employees pursuant to Section 401(k) of the Internal Revenue Code. The Company matches a percentage of employee voluntary salary deferrals subject to limitations. The Company may also make discretionary contributions as determined annually by the Company's Board of Directors. The amount expensed under the plan was $85,392 and $68,612 for the years ended May 31, 2016 and 2015. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
May 31, 2016 | |
Accounting Policies [Abstract] | |
Fair Value of Financial Instruments | 18. Fair Value of Financial Instruments: The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of the short maturity of these instruments. The fair values of short-term investments were determined as described in Note 1. |
Cash Flows Information
Cash Flows Information | 12 Months Ended |
May 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flows Information | 19. Cash Flows Information: 2016 2015 Interest paid none none Income taxes paid $ 1,794,100 $ 689,000 |
Significant Accounting Polici26
Significant Accounting Policies (Policies) | 12 Months Ended |
May 31, 2016 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations: Taylor Devices, Inc. (the Company) manufactures and sells a single group of very similar products that have many different applications for customers. These similar products are included in one of six categories; namely, Seismic Dampers, Fluidicshoks®, Crane and Industrial Buffers, Self-Adjusting Shock Absorbers, Liquid Die Springs, and Vibration Dampers for use in various types of machinery, equipment and structures, primarily to customers which are located throughout the United States and several foreign countries. The products are manufactured at the Company's sole operating facility in the United States where all of the Company's long-lived assets reside. Management does not track or otherwise account for sales broken down by these categories. 73% of the Company's 2016 revenue was generated from sales to customers in the United States and 22% was from sales to customers in Asia. Remaining sales were to customers in other countries in North America, Europe and South America. 65% of the Company's 2015 revenue was generated from sales to customers in the United States and 31% was from sales to customers in Asia. Remaining sales were to customers in other countries in North America, Europe and South America. |
Principles of Consolidation | Principles of Consolidation: The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Tayco Realty Corporation (Realty). All inter-company transactions and balances have been eliminated in consolidation. |
Subsequent Events: | Subsequent Events: The Company has evaluated events and transactions for potential recognition or disclosure in the financial statements through the date the financial statements were issued. |
Use of Estimates: | Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Cash and Cash Equivalents: | Cash and Cash Equivalents: The Company includes all highly liquid investments in money market funds in cash and cash equivalents on the accompanying balance sheets. Cash and cash equivalents in financial institutions may exceed insured limits at various times during the year and subject the Company to concentrations of credit risk. |
Short-term Investments: | Short-term Investments: At times, the Company invests excess funds in liquid interest earning instruments. Short-term investments at May 31, 2016 include available for sale corporate bonds stated at fair value, which approximates cost. The bonds (20) mature on various dates during the period September 2017 to December 2021. Unrealized holding gains and losses would be presented as a separate component of accumulated other comprehensive income, net of deferred income taxes. Realized gains and losses on the sale of investments are determined using the specific identification method. The bonds are valued using pricing models maximizing the use of observable inputs for similar securities. This includes basing value on yields currently available on comparable securities of issuers with similar credit ratings. |
Accounts Receivable: | Accounts Receivable: Accounts receivable are stated at an amount management expects to collect from outstanding balances. Management provides for probable uncollectible accounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. |
Inventory: | Inventory: Inventory is stated at the lower of average cost or net realizable value. Average cost approximates first-in, first-out cost. |
Property and Equipment: | Property and Equipment: Property and equipment is stated at cost net of accumulated depreciation. Deprecation is provided primarily using the straight-line method for financial reporting purposes, and accelerated methods for income tax reporting purposes. Maintenance and repairs are charged to operations as incurred; significant improvements are capitalized. |
Cash Value of Life Insurance: | Cash Value of Life Insurance: Cash value of life insurance is stated at the surrender value of the contracts. |
Revenue Recognition: | Revenue Recognition: Sales are recognized when units are delivered or services are performed. Sales under fixed-price contracts are recorded as deliveries are made at the contract sales price of the units delivered. Sales under certain fixed-price contracts requiring substantial performance over several periods prior to commencement of deliveries, are accounted for under the percentage-of-completion method of accounting whereby revenues are recognized based on estimates of completion prepared on a ratio of cost to total estimated cost basis. Costs include all material and direct and indirect charges related to specific contracts. Other expenses are charged to operations as incurred. Total estimated costs for each of the contracts are estimated based on a combination of historical costs of manufacturing similar products and estimates or quotes from vendors for supplying parts or services towards the completion of the manufacturing process. Adjustments to cost estimates are made periodically, and losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined. If total costs calculated upon completion of the manufacturing process in the current period for a contract are more than the estimated total costs at completion used to calculate revenue in a prior period, then the revenue and profits in the current period will be lower than if the estimated costs used in the prior period calculation were equal to the actual total costs upon completion. In the fiscal year ended May 31, 2016, 66% of total revenue recognized was accounted for using the percentage-of-completion method of accounting while the remaining 34% of revenue was recorded as deliveries were made to our customers. In the fiscal year ended May 31, 2015, 70% of total revenue recognized was accounted for using the percentage-of-completion method of accounting while the remaining 30% of revenue was recorded as deliveries were made to our customers. For financial statement presentation purposes, the Company nets progress billings against the total costs incurred on uncompleted contracts. The asset, "costs and estimated earnings in excess of billings," represents revenues recognized in excess of amounts billed. The liability, "billings in excess of costs and estimated earnings," represents billings in excess of revenues recognized. |
Shipping and Handling Costs: | Shipping and Handling Costs: Shipping and handling costs are classified as a component of selling, general and administrative expenses. The amounts of these costs were $272,353 and $247,077 for the years ended May 31, 2016 and 2015. |
Research and Development Costs: | Research and Development Costs: Research and development costs are classified as a component of cost of sales. The amounts of these costs were $428,000 and $268,000 for the years ended May 31, 2016 and 2015. |
Income Taxes: | Income Taxes: The provision for income taxes provides for the tax effects of transactions reported in the financial statements regardless of when such taxes are payable. Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the tax and financial statement basis of assets and liabilities. Deferred taxes are based on tax laws currently enacted with tax rates expected to be in effect when the taxes are actually paid or recovered. The Company's practice is to recognize interest related to income tax matters in interest income / expense and to recognize penalties in selling, general and administrative expenses. The Company did not have any accrued interest or penalties included in its consolidated balance sheets at May 31, 2016 or 2015. The Company recorded no interest expense or penalties in its consolidated statements of income during the years ended May 31, 2016 and 2015. The Company believes it is no longer subject to examination by federal and state taxing authorities for years prior to May 31, 2013. |
Sales Taxes: | Sales Taxes: Certain jurisdictions impose a sales tax on Company sales to nonexempt customers. The Company collects these taxes from customers and remits the entire amount as required by the applicable law. The Company excludes from revenues and expenses the tax collected and remitted. |
Stock-Based Compensation: | Stock-Based Compensation: The Company measures compensation cost arising from the grant of share-based payments to employees at fair value and recognizes such cost in income over the period during which the employee is required to provide service in exchange for the award. The stock-based compensation expense for the years ended May 31, 2016 and 2015 was $151,184 and $116,069. |
New Accounting Standards: | New Accounting Standards: In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. ASU 2015-17 simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for public companies for annual reporting periods beginning after December 15, 2016 and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively, and early adoption is permitted. Adoption of this guidance would affect the balance sheets as of May 31, 2016 and 2015 as follows: Decrease current assets by $965,100 and $858,900 Increase noncurrent assets by $282,115 and $230,115 Decrease noncurrent liabilities by $682,985 and $628,785 Other recently issued Accounting Standards Codification (ASC) guidance has either been implemented or are not significant to the Company. |
Accounts receivable (Tables)
Accounts receivable (Tables) | 12 Months Ended |
May 31, 2016 | |
Receivables [Abstract] | |
Accounts receivable | 2016 2015 Customers $ 3,480,781 $ 4,534,143 Customers - retention 531,189 230,370 Gross accounts receivable 4,011,970 4,764,513 Less allowance for doubtful accounts 19,756 9,756 Net accounts receivable $ 3,992,214 $ 4,754,757 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
May 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | 2016 2015 Inventory, net Raw materials $ 511,530 $ 519,598 Work-in-process 8,639,068 7,657,720 Finished goods 554,358 584,738 Gross inventory 9,704,956 8,762,056 Less allowance for obsolescence 100,000 100,000 Net inventory $ 9,604,956 $ 8,662,056 |
Costs and estimated earnings 29
Costs and estimated earnings on uncompleted contracts (Tables) | 12 Months Ended |
May 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Costs and estimated earnings not billed components | 2016 2015 Costs and estimated earnings on uncompleted contracts Costs incurred on uncompleted contracts $11,441,874 $10,439,879 Estimated earnings 4,251,018 4,584,090 Total costs and estimated earnings 15,692,892 15,023,969 Less billings to date 11,655,742 12,577,485 Costs and estimated earnings not billed $ 4,037,150 $ 2,446,484 |
Costs and estimated earnings not billed | 2016 2015 Costs and estimated earnings not billed Costs and estimated earnings in excess of billings $ 5,500,771 $ 5,169,956 Billings in excess of costs and estimated earnings 1,463,621 2,723,472 Costs and estimated earnings not billed $ 4,037,150 $ 2,446,484 |
Maintenance and other invento30
Maintenance and other inventory (Tables) | 12 Months Ended |
May 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Maintenance and other inventory | 2016 2015 Maintenance and other inventory $ 1,956,626 $ 2,102,494 Less allowance for obsolescence 1,259,583 1,212,565 Maintenance and other inventory, net $ 697,043 $ 889,929 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
May 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | 2016 2015 Land $ 195,220 $ 195,220 Buildings and improvements 8,741,209 7,908,653 Machinery and equipment 8,498,997 7,566,026 Office furniture and equipment 1,398,016 1,328,806 Autos and trucks 84,256 73,331 Land improvements 402,022 379,432 Gross property and equipment 19,319,720 17,451,468 Less accumulated depreciation 10,325,216 9,577,957 Property and equipment, net $ 8,994,504 $ 7,873,511 |
Sales (Tables)
Sales (Tables) | 12 Months Ended |
May 31, 2016 | |
Notes to Financial Statements | |
Sales by major customer type | 2016 2015 Construction $21,009,587 $16,658,555 Aerospace / Defense 12,320,818 12,009,356 Industrial 2,350,044 1,921,355 Sales, net $35,680,449 $30,589,266 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
May 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Tax provision | 2016 2015 Current tax provision: Federal $ 1,609,500 $ 588,700 State 500 300 Total current tax provision 1,610,000 589,000 Deferred tax provision: Federal (51,500 ) 308,900 State (500 ) 1,100 Total deferred tax provision (52,000 ) 310,000 Total tax provision $ 1,558,000 $ 899,000 |
Effective income tax rate reconciliation | 2016 2015 Computed tax provision at the expected statutory rate $1,960,500 $1,045,200 State income tax - net of Federal tax benefit 400 200 Tax effect of permanent differences: Research tax credits (266,000 ) (101,000 ) Other permanent differences (165,700 ) (44,700 ) Other 28,800 (700 ) Total tax provision $ 1,558,000 $ 899,000 Effective income tax rate 27.0% 29.2% |
Components of deferred tax assets and liabilities | 2016 2015 Deferred tax assets: Allowance for doubtful receivables $ 6,700 $ 3,300 Tax inventory adjustment 95,500 77,700 Allowance for obsolete inventory 463,600 447,700 Accrued vacation 73,700 63,900 Accrued commissions 7,200 9,300 Warranty reserve 45,400 12,400 Stock options issued for services 273,000 244,600 Total deferred tax assets 965,100 858,900 Deferred tax liabilities: Excess tax depreciation (682,985 ) (628,785 ) Net deferred tax assets $ 282,115 $ 230,115 |
Earnings per common share (Tabl
Earnings per common share (Tables) | 12 Months Ended |
May 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per common share | 2016 2015 Average common shares outstanding 3,393,919 3,350,033 Common shares issuable under stock option plans 82,508 52,176 Average common shares outstanding assuming dilution 3,476,427 3,402,209 |
Stock option plans (Tables)
Stock option plans (Tables) | 12 Months Ended |
May 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock option estimated fair value components | 2016 2015 Risk-free interest rate 1.50% 2.30% Expected life in years 3.2 3.2 Expected volatility 26% 28% Expected dividend yield 0% 0% |
Stock option activity | Shares Weighted Average Exercise Price Intrinsic Value Outstanding - May 31, 2014 219,500 $ 7.31 $ 398,954 Options granted 48,000 $ 10.82 Less: options exercised 26,750 $ 6.00 Outstanding - May 31, 2015 240,750 $ 8.16 $ 1,134,531 Options granted 49,500 $ 14.982 Less: options exercised 46,750 $ 8.221 Outstanding - May 31, 2016 243,500 $ 9.53 $ 1,745,254 |
Stock optios outstanding and exercisable | Outstanding and Exercisable Range of Number Weighted Average Weighted Exercise of Remaining Years Average Prices Options of Contractual Life Exercise Price $2.00-$3.00 10,000 2.9 $ 2.83 $5.01-$6.00 40,000 2.6 $ 5.52 $6.01-$7.00 24,500 3.0 $ 6.26 $7.01-$8.00 25,000 6.9 $ 7.74 $8.01-$9.00 41,750 7.6 $ 8.73 $11.01-$12.00 25,000 5.9 $11.29 $12.01-$13.00 47,250 9.0 $12.42 $16.01-$17.00 30,000 9.9 $16.40 $2.00-$17.00 243,500 6.4 $ 9.53 The following table summarizes information about stock options outstanding at May 31, 2015: Outstanding and Exercisable Range of Number Weighted Average Weighted Exercise of Remaining Years Average Prices Options of Contractual Life Exercise Price $2.00-$3.00 10,000 3.9 $ 2.83 $5.01-$6.00 45,000 3.3 $ 5.56 $6.01-$7.00 28,250 3.8 $ 6.24 $7.01-$8.00 25,000 7.9 $ 7.74 $8.01-$9.00 77,500 8.5 $ 8.61 $11.01-$12.00 25,000 6.9 $11.29 $12.01-$13.00 30,000 9.9 $12.20 $2.00-$13.00 240,750 6.7 $ 8.16 |
Cash Flows Information (Tables)
Cash Flows Information (Tables) | 12 Months Ended |
May 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash flow supplemental disclosure | 2016 2015 Interest paid none none Income taxes paid $ 1,794,100 $ 689,000 |
Significant Accounting Polici37
Significant Accounting Policies (Details Narrative) | 12 Months Ended | |
May 31, 2016USD ($) | May 31, 2015USD ($) | |
Accounting Policies [Abstract] | ||
Domestic revenue as percentage of total | 0.73 | 0.65 |
Asian revenue as percentage of total | 0.22 | 0.31 |
Percent of revenue recognized using percentage of completion method of accounting | 0.66 | 0.70 |
Percent of revenue recognized using completed contract method of accounting | 0.34 | 0.30 |
Shipping and handling costs | $ 272,353 | $ 247,077 |
Research and development costs | 428,000 | 268,000 |
Share based compensation expense | $ 151,184 | $ 116,069 |
Accounts receivable - Accounts
Accounts receivable - Accounts receivable (Details) - USD ($) | May 31, 2016 | May 31, 2015 |
Accounts receivable, net | ||
Customers | $ 3,480,781 | $ 4,534,143 |
Customers - retention | 531,189 | 230,370 |
Gross accounts receivable | 4,011,970 | 4,764,513 |
Less allowance for doubtful accounts | (19,756) | (9,756) |
Net accounts receivable | $ 3,992,214 | $ 4,754,757 |
Inventory - Inventory (Details)
Inventory - Inventory (Details) - USD ($) | May 31, 2016 | May 31, 2015 |
Inventory, net | ||
Raw materials | $ 511,530 | $ 519,598 |
Work-in-process | 8,639,068 | 7,657,720 |
Finished goods | 554,358 | 584,738 |
Gross inventory | 9,704,956 | 8,762,056 |
Less allowance for obsolescence | (100,000) | (100,000) |
Net inventory | $ 9,604,956 | $ 8,662,056 |
Costs and estimated earnings 40
Costs and estimated earnings on uncompleted contracts - Costs and estimated earnings not billed components (Details) - USD ($) | May 31, 2016 | May 31, 2015 |
Costs and estimated earnings on uncompleted contracts | ||
Costs incurred on uncompleted contracts | $ 11,441,874 | $ 10,439,879 |
Estimated earnings | 4,251,018 | 4,584,090 |
Total costs and estimated earnings | 15,692,892 | 15,023,969 |
Less billings to date | (11,655,742) | (12,577,485) |
Costs and estimated earnings not billed | $ 4,037,150 | $ 2,446,484 |
Costs and estimated earnings 41
Costs and estimated earnings on uncompleted contracts - Costs and estimated earnings not billed (Details) - USD ($) | May 31, 2016 | May 31, 2015 |
Costs and estimated earnings not billed | ||
Costs and estimated earnings in excess of billings | $ 5,500,771 | $ 5,169,956 |
Billings in excess of costs and estimated earnings | (1,463,621) | (2,723,472) |
Costs and estimated earnings not billed | $ 4,037,150 | $ 2,446,484 |
Maintenance and other invento42
Maintenance and other inventory - Maintenance and other inventory (Details) - USD ($) | May 31, 2016 | May 31, 2015 |
Maintenance and other inventory | ||
Maintenance and other inventory | $ 1,956,626 | $ 2,102,494 |
Less allowance for obsolescence | (1,259,583) | (1,212,565) |
Maintenance and other inventory, net | $ 697,043 | $ 889,929 |
Maintenance and other invento43
Maintenance and other inventory (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Provision for potentialinventory obsolescence | $ 180,000 | $ 180,000 |
Property and equipment - Proper
Property and equipment - Property and equipment (Details) - USD ($) | May 31, 2016 | May 31, 2015 |
Property and equipment | ||
Land | $ 195,220 | $ 195,220 |
Buildings and improvements | 8,741,209 | 7,908,653 |
Machinery and equipment | 8,498,997 | 7,566,026 |
Office furniture and equipment | 1,398,016 | 1,328,806 |
Autos and trucks | 84,256 | 73,331 |
Land improvements | 402,022 | 379,432 |
Gross property and equipment | 19,319,720 | 17,451,468 |
Less accumulated depreciation | (10,325,216) | (9,577,957) |
Property and equipment, net | $ 8,994,504 | $ 7,873,511 |
Property and equipment (Details
Property and equipment (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 818,385 | $ 740,844 |
Commitments for future capital expenditures | $ 550,000 |
Short-term borrowings (Details
Short-term borrowings (Details Narrative) - USD ($) | May 31, 2016 | May 31, 2015 |
Debt Disclosure [Abstract] | ||
Line of credit facility | $ 6,000,000 | |
Line of credit outstanding balance | 0 | $ 0 |
Uncleared checks | $ 517,960 | $ 618,974 |
Sales - Sales by major customer
Sales - Sales by major customer type (Details) - USD ($) | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Sales, net | $ 35,680,449 | $ 30,589,266 |
Construction | ||
Sales, net | 21,009,587 | 16,658,555 |
Aerospace / Defense | ||
Sales, net | 12,320,818 | 12,009,356 |
Industrial | ||
Sales, net | $ 2,350,044 | $ 1,921,355 |
Sales (Details Narrative)
Sales (Details Narrative) | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Notes to Financial Statements | ||
Percentage of total sales to significant individual customers | 0.55 | 0.62 |
Percentage of total sales to significant individual customer1 | 0.10 | 0.14 |
Percentage of total sales to significant individual customer2 | 0.08 | 0.12 |
Percentage of total sales to significant individual customer3 | 0.08 | 0.11 |
Percentage of total sales to significant individual customer4 | 0.08 | 0.09 |
Percentage of total sales to significant individual customer5 | 0.07 | 0.06 |
Percentage of total sales to significant individual customer6 | 0.07 | 0.05 |
Percentage of total sales to significant individual customer7 | 0.07 | 0.05 |
Income Taxes - Tax provision (D
Income Taxes - Tax provision (Details) - USD ($) | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Current tax provision: | ||
Federal | $ 1,609,500 | $ 588,700 |
State | 500 | 300 |
Total current tax provision | 1,610,000 | 589,000 |
Deferred tax provision: | ||
Federal | (51,500) | 308,900 |
State | (500) | 1,100 |
Total deferred tax provision | (52,000) | 310,000 |
Total tax provision | $ 1,558,000 | $ 899,000 |
Income Taxes - Effective income
Income Taxes - Effective income tax rate reconciliation (Details) - USD ($) | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Computed tax provision at the expected statutory rate | 196050000.00% | 104520000.00% |
State income tax - net of Federal tax benefit | 40000.00% | 20000.00% |
Tax effect of permanent differences: | ||
Research tax credits | (26600000.00%) | (10100000.00%) |
Other permanent differences | (16570000.00%) | (4470000.00%) |
Other | 2880000.00% | (70000.00%) |
Total tax provision | $ 1,558,000 | $ 899,000 |
Effective income tax rate | 27.00% | 29.20% |
Income Taxes - Components of de
Income Taxes - Components of deferred tax assets and liabilities (Details) - USD ($) | May 31, 2016 | May 31, 2015 |
Deferred tax assets: | ||
Allowance for doubtful receivables | $ 6,700 | $ 3,300 |
Tax inventory adjustment | 95,500 | 77,700 |
Allowance for obsolete inventory | 463,600 | 447,700 |
Accrued vacation | 73,700 | 63,900 |
Accrued commissions | 7,200 | 9,300 |
Warranty reserve | 45,400 | 12,400 |
Stock options issued for services | 273,000 | 244,600 |
Total deferred tax assets | 965,100 | 858,900 |
Deferred tax liabilities: | ||
Excess tax depreciation | (682,985) | (628,785) |
Net deferred tax assets | $ 282,115 | $ 230,115 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 72 Months Ended | ||
May 31, 2022 | May 31, 2016 | May 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Deferred tax assets | $ 965,100 | $ 858,900 | |
Deferred tax credits carryforward | $ 262,000 | ||
Tax credit carryforward expiration date | May 31, 2022 |
Earnings per common share - Ear
Earnings per common share - Earnings per common share (Details) - shares | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Earnings Per Share [Abstract] | ||
Average common shares outstanding | 3,393,919 | 3,350,033 |
Common shares issuable under stock option plans | 82,508 | 52,176 |
Average common shares outstanding assuming dilution | 3,476,427 | 3,402,209 |
Employee stock purchase plan (D
Employee stock purchase plan (Details Narrative) - shares | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Common shares issued from employee stock purchase plan | 1,409 | 1,688 |
Stock option plans - Stock opti
Stock option plans - Stock option estimated fair value components (Details) | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Risk-free interest rate | 1.50% | 2.30% |
Expected life in years | 3 years 2 months 12 days | 3 years 2 months 12 days |
Expected volatility | 26.00% | 28.00% |
Expected dividend yield | 0.00% | 0.00% |
Stock option plans - Stock op56
Stock option plans - Stock option activity (Details) - USD ($) | 12 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Options outstanding, Shares | 243,500 | 240,750 | 219,500 |
Options outstanding, Average Exercise Price | $ 9.53 | $ 8.16 | $ 7.31 |
Options outstanding, Intrinsic value | $ 1,745,254 | $ 1,134,531 | $ 398,954 |
Options granted, Shares | 49,500 | 48,000 | |
Options granted, Average Exercise Price | $ 14.982 | $ 10.82 | |
Options Exercised, Shares | 46,750 | 26,750 | |
Options Exercised, Average Exercise Price | $ 8.221 | $ 6 | |
Options Expired, Shares |
Stock option plans - Stock op57
Stock option plans - Stock optios outstanding and exercisable (Details) - $ / shares | May 31, 2016 | May 31, 2015 |
Range of exercise prices, Minimum | $ 2 | $ 2 |
Range of exercise prices, Maximum | $ 17 | $ 13 |
Number of Options | 243,500 | 240,750 |
Weighted Average Remaining Years of Contractual Life | 6.4 | 6.7 |
Weighted Average Exercise Price | $ 9.53 | $ 8.16 |
Price range 1 | ||
Range of exercise prices, Minimum | 2 | 2 |
Range of exercise prices, Maximum | $ 3 | $ 3 |
Number of Options | 10,000 | 10,000 |
Weighted Average Remaining Years of Contractual Life | 2.9 | 3.9 |
Weighted Average Exercise Price | $ 2.83 | $ 2.83 |
Price range 2 | ||
Range of exercise prices, Minimum | 5.01 | 5.01 |
Range of exercise prices, Maximum | $ 6 | $ 6 |
Number of Options | 40,000 | 45,000 |
Weighted Average Remaining Years of Contractual Life | 2.6 | 3.3 |
Weighted Average Exercise Price | $ 5.52 | $ 5.56 |
Price range 3 | ||
Range of exercise prices, Minimum | 6.01 | 6.01 |
Range of exercise prices, Maximum | $ 7 | $ 7 |
Number of Options | 24,500 | 28,250 |
Weighted Average Remaining Years of Contractual Life | 3 | 3.8 |
Weighted Average Exercise Price | $ 6.26 | $ 6.24 |
Price range 4 | ||
Range of exercise prices, Minimum | 7.01 | 7.01 |
Range of exercise prices, Maximum | $ 8 | $ 8 |
Number of Options | 25,000 | 25,000 |
Weighted Average Remaining Years of Contractual Life | 6.9 | 7.9 |
Weighted Average Exercise Price | $ 7.74 | $ 7.74 |
Price range 5 | ||
Range of exercise prices, Minimum | 8.01 | 8.01 |
Range of exercise prices, Maximum | $ 9 | $ 9 |
Number of Options | 41,750 | 77,500 |
Weighted Average Remaining Years of Contractual Life | 7.6 | 8.5 |
Weighted Average Exercise Price | $ 8.73 | $ 8.61 |
Price range 6 | ||
Range of exercise prices, Minimum | 11.01 | 11.01 |
Range of exercise prices, Maximum | $ 12 | $ 12 |
Number of Options | 25,000 | 25,000 |
Weighted Average Remaining Years of Contractual Life | 5.9 | 6.9 |
Weighted Average Exercise Price | $ 11.29 | $ 11.29 |
Price range 7 | ||
Range of exercise prices, Minimum | 12.01 | 12.01 |
Range of exercise prices, Maximum | $ 13 | $ 13 |
Number of Options | 47,250 | 30,000 |
Weighted Average Remaining Years of Contractual Life | 9 | 9.9 |
Weighted Average Exercise Price | $ 12.42 | $ 12.20 |
Price range 8 | ||
Range of exercise prices, Minimum | 16.01 | |
Range of exercise prices, Maximum | $ 17 | |
Number of Options | 30,000 | |
Weighted Average Remaining Years of Contractual Life | 9.9 | |
Weighted Average Exercise Price | $ 16.40 |
Stock option plans (Details Nar
Stock option plans (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Common shares reserved for stock options | 160,000 | |
Common shares for options granted | 49,500 | 48,000 |
Average estimated value per option granted | $ 3.05 | $ 2.42 |
Price per share of common | $ 16.70 | $ 12.87 |
Shares available | 157,750 | |
Proceeds exercise of options | $ 384,325 |
Preferred stock (Details Narrat
Preferred stock (Details Narrative) | May 31, 2016shares |
Equity [Abstract] | |
Preferred shares authorized | 2,000,000 |
Treasury stock (Details Narrati
Treasury stock (Details Narrative) - shares | May 31, 2016 | May 31, 2015 |
Equity [Abstract] | ||
Treasury Stock | 541,296 | 537,733 |
Retirement plan (Details Narrat
Retirement plan (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | ||
Retirement plan expense | $ 85,392 | $ 68,612 |
Cash Flows Information - Cash f
Cash Flows Information - Cash flow supplemental disclosure (Details) - USD ($) | 12 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid | ||
Income taxes paid | $ 1,794,100 | $ 689,000 |