Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
May 31, 2018 | Aug. 09, 2018 | |
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, 2018 | |
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 | $ 40,917,000 | |
Entity Common Stock, Shares Outstanding | 3,467,560 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | May 31, 2018 | May 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 2,858,323 | $ 3,324,934 |
Short-term investments | 1,039,082 | 1,022,326 |
Accounts receivable, net (Note 2) | 6,265,864 | 2,545,773 |
Inventory (Note 3) | 11,317,775 | 11,488,610 |
Prepaid expenses | 244,643 | 263,574 |
Prepaid income taxes | 202,519 | 163,904 |
Costs and estimated earnings in excess of billings (Note 4) | 6,356,963 | 6,868,393 |
Total current assets | 28,285,169 | 25,677,514 |
Maintenance and other inventory, net (Note 5) | 885,651 | 878,779 |
Property and equipment, net (Note 6) | 9,935,625 | 9,994,716 |
Cash value of life insurance, net | 185,730 | 180,579 |
Deferred income taxes (Note 10) | 219,115 | 429,115 |
Total assets | 39,511,290 | 37,160,703 |
Current liabilities: | ||
Accounts payable | 1,460,175 | 1,329,321 |
Accrued commissions | 983,260 | 846,941 |
Other accrued expenses | 1,412,502 | 832,060 |
Billings in excess of costs and estimated earnings (Note 4) | 2,043,002 | 1,295,989 |
Total current liabilities | 5,898,939 | 4,304,311 |
Stockholders' Equity: | ||
Common stock, $.025 par value, authorized 8,000,000 shares, issued 4,017,139 and 3,990,554 shares | 100,428 | 99,763 |
Paid-in capital | 9,382,202 | 9,070,278 |
Retained earnings | 26,959,080 | 26,515,710 |
Stockholders’ equity before treasury stock | 36,441,710 | 35,685,751 |
Treasury stock - 550,872 shares at cost | (2,829,359) | (2,829,359) |
Total stockholders' equity | 33,612,351 | 32,856,392 |
Total liabilities and stockholders’ equity | $ 39,511,290 | $ 37,160,703 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | May 31, 2018 | May 31, 2017 |
Authorized shares | 8,000,000 | 8,000,000 |
Issued shares | 4,017,139 | 3,990,554 |
Common Stock [Member] | ||
Par value | $ 0.025 | $ 0.025 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Income Statement [Abstract] | ||
Sales, net (Note 9) | $ 24,363,967 | $ 25,536,996 |
Cost of goods sold | 18,439,760 | 17,551,163 |
Gross profit | 5,924,207 | 7,985,833 |
Selling, general and administrative expenses | 5,276,574 | 5,065,101 |
Operating income | 647,633 | 2,920,732 |
Other income | ||
Interest, net | 26,861 | 38,842 |
Miscellaneous | 1,876 | 28,003 |
Total other income | 28,737 | 66,845 |
Income before provision for income taxes | 676,370 | 2,987,577 |
Provision for income taxes (Note 10) | 233,000 | 657,000 |
Net income | $ 443,370 | $ 2,330,577 |
Basic earnings per common share (Note 11) | $ 0.13 | $ 0.68 |
Diluted earnings per common share (Note 11) | $ 0.13 | $ 0.66 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] |
Beginning balance, value at May. 31, 2016 | $ 98,738 | $ 8,529,542 | $ 24,185,133 | $ (2,656,184) |
Net income | 2,330,577 | |||
Common stock issued for employee stock option plan (Note 14) | 988 | 338,597 | (173,175) | |
Common stock issued for employee stock purchase plan (Note 13) | 37 | 24,446 | ||
Stock options issued for services | 177,693 | |||
Ending balance, value at May. 31, 2017 | 99,763 | 9,070,278 | 26,515,710 | (2,829,359) |
Net income | 443,370 | |||
Common stock issued for employee stock option plan (Note 14) | 619 | 164,364 | ||
Common stock issued for employee stock purchase plan (Note 13) | 46 | 22,629 | ||
Stock options issued for services | 124,931 | |||
Ending balance, value at May. 31, 2018 | $ 100,428 | $ 9,382,202 | $ 26,959,080 | $ (2,829,359) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
operating activities: | ||
Net income | $ 443,370 | $ 2,330,577 |
Adjustments to reconcile net income to net cash flows from | ||
Depreciation | 995,924 | 868,609 |
Stock options issued for services | 124,931 | 177,693 |
Bad debts expense | 100,000 | |
Provision for inventory obsolescence | 60,000 | 180,000 |
Deferred income taxes | 210,000 | (147,000) |
Changes in other current assets and liabilities: | ||
Accounts receivable | (3,720,091) | 1,346,441 |
Inventory | 103,963 | (2,245,390) |
Prepaid expenses | 18,931 | 9,630 |
Prepaid income taxes | (38,615) | 35,173 |
Costs and estimated earnings in excess of billings | 511,430 | (1,367,622) |
Accounts payable | 130,854 | (437,696) |
Accrued commissions | 136,319 | 163,341 |
Other accrued expenses | 580,442 | (1,901,787) |
Billings in excess of costs and estimated earnings | 747,013 | (167,632) |
Net operating activities | 304,471 | (1,055,663) |
Investing activities: | ||
Acquisition of property and equipment | (936,833) | (1,868,821) |
Increase in short-term investments | (16,756) | (22,326) |
Increase in cash value of life insurance | (5,151) | (5,229) |
Net investing activities | (958,740) | (1,896,376) |
Financing activities: | ||
Proceeds from issuance of common stock | 187,658 | 190,893 |
Net financing activities | 187,658 | 190,893 |
Net change in cash and cash equivalents | (466,611) | (2,761,146) |
Cash and cash equivalents - beginning | 3,324,934 | 6,086,080 |
Cash and cash equivalents - ending | $ 2,858,323 | $ 3,324,934 |
1. Summary of Significant Accou
1. Summary of Significant Accounting Policies: | 12 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
1. Summary of 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 eight categories; namely, Seismic Dampers, Fluidicshoks®, Crane and Industrial Buffers, Self-Adjusting Shock Absorbers, Liquid Die Springs,Vibration Dampers, Machined Springs and Custom Actuators 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. 74% 21% 80% 13% 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, 2018 include “available for sale” corporate bonds stated at fair value, which approximates cost. The bonds (13) mature on various dates during the period September 2018 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. 29 Table of Contents 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, 2018, 60% 40% 66% 34% 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 on incoming inventory items are classified as a component of cost of goods sold, while shipping and handling costs on outgoing shipments to customers are classified as a component of selling, general and administrative expenses. The amounts of these costs classified as a component of selling, general and administrative expenses were $264,696 $127,796 Research and Development Costs: Research and development costs are classified as a component of cost of sales. The amounts of these costs were $263,000 $903,000 30 Table of Contents 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, 2018 or 2017. The Company recorded no interest expense or penalties in its consolidated statements of income during the years ended May 31, 2018 and 2017. The Company believes it is no longer subject to examination by federal and state taxing authorities for years prior to May 31, 2015. 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, 2018 and 2017 was $124,931 $177,693 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. ASU 2014-09 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09, as amended, is effective for annual reporting periods, and interim periods within that period, beginning after December 15, 2017 (fiscal year 2019 for the Company). Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company has not completely determined the potential effects of the adoption of ASU 2014-09 on its Consolidated Financial Statements, however it will likely require the Company to slow the recognition of revenue for contracts currently accounted for under the percentage-of-completion method. Other recently issued Accounting Standards Codification (ASC) guidance has either been implemented or are not significant to the Company. |
2. Accounts Receivable_
2. Accounts Receivable: | 12 Months Ended |
May 31, 2018 | |
Receivables [Abstract] | |
2. Accounts Receivable: | 2. Accounts Receivable: 2018 2017 Customers $ 5,515,848 $ 1,978,108 Customers - retention 859,771 677,420 Gross accounts receivable 6,375,619 2,655,528 Less allowance for doubtful accounts 109,755 109,755 Net accounts receivable $ 6,265,864 $ 2,545,773 |
3. Inventory_
3. Inventory: | 12 Months Ended |
May 31, 2018 | |
Inventory Disclosure [Abstract] | |
3. Inventory: | 3. Inventory: 2018 2017 Raw materials $ 726,852 $ 709,174 Work-in-process 9,990,225 10,071,179 Finished goods 700,698 808,257 Gross inventory 11,417,775 11,588,610 Less allowance for obsolescence 100,000 100,000 Net inventory $ 11,317,775 $ 11,488,610 |
4. Costs and Estimated Earnings
4. Costs and Estimated Earnings on Uncompleted Contracts: | 12 Months Ended |
May 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
4. Costs and Estimated Earnings on Uncompleted Contracts: | 4. Costs and Estimated Earnings on Uncompleted Contracts: 2018 2017 Costs incurred on uncompleted contracts $ 12,512,350 $ 14,197,223 Estimated earnings 5,157,890 6,071,776 Total costs and estimated earnings 17,670,240 20,268,999 Less billings to date 13,356,279 14,696,595 Costs and estimated earnings not billed $ 4,313,961 $ 5,572,404 Amounts are included in the accompanying balance sheets under the following captions: 2018 2017 Costs and estimated earnings in excess of billings $ 6,356,963 $ 6,868,393 Billings in excess of costs and estimated earnings 2,043,002 1,295,989 Costs and estimated earnings not billed $ 4,313,961 $ 5,572,404 |
5. Maintenance and Other Invent
5. Maintenance and Other Inventory: | 12 Months Ended |
May 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
5. Maintenance and Other Inventory: | 5. Maintenance and Other Inventory: 2018 2017 Maintenance and other inventory $ 2,287,897 $ 2,261,892 Less allowance for obsolescence 1,402,246 1,383,113 Maintenance and other inventory, net $ 885,651 $ 878,779 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 $60,000 $180,000 |
6. Property and Equipment_
6. Property and Equipment: | 12 Months Ended |
May 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
6. Property and Equipment: | 6. Property and Equipment: 2018 2017 Land $ 195,220 $ 195,220 Buildings and improvements 9,342,431 9,342,431 Machinery and equipment 10,302,681 9,466,340 Office furniture and equipment 1,652,711 1,588,219 Autos and trucks 84,256 84,256 Land improvements 455,429 419,429 Gross property and equipment 22,032,728 21,095,895 Less accumulated depreciation 12,097,103 11,101,179 Property and equipment, net $ 9,935,625 $ 9,994,716 Depreciation expense was $995,924 $868,609 The Company has commitments to make capital expenditures of approximately $530,000 |
7. Short-Term Borrowings_
7. Short-Term Borrowings: | 12 Months Ended |
May 31, 2018 | |
Debt Disclosure [Abstract] | |
7. Short-Term Borrowings: | 7. Short-Term Borrowings: The Company has a credit facility with a $10,000,000 $6,000,000 There is no 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 $57,042 $239,200 |
8. Legal Proceedings_
8. Legal Proceedings: | 12 Months Ended |
May 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
8. Legal Proceedings: | 8. Legal Proceedings: There are no legal proceedings except for routine litigation incidental to the business. |
9. Sales_
9. Sales: | 12 Months Ended |
May 31, 2018 | |
Sales | |
9. 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 eight categories; namely, Seismic Dampers, Fluidicshoks®, Crane and Industrial Buffers, Self-Adjusting Shock Absorbers, Liquid Die Springs,Vibration Dampers, Machined Springs and Custom Actuators. 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: 2018 2017 Construction $ 12,192,836 $ 13,907,139 Aerospace / Defense 10,205,945 10,086,316 Industrial 1,965,186 1,543,541 Sales, net $ 24,363,967 $ 25,536,996 Sales to five customers approximated 49% 14% 13% 9% 7% 6% 44% 14% 9% 8% 7% 6% |
10. Income Taxes_
10. Income Taxes: | 12 Months Ended |
May 31, 2018 | |
Income Tax Disclosure [Abstract] | |
10. Income Taxes: | 10. Income Taxes: 2018 2017 Current tax provision: Federal $ 23,000 $ 803,200 State — 800 Total current tax provision 23,000 804,000 Deferred tax provision: Federal 210,000 (146,500 ) State — (500 ) Total deferred tax provision 210,000 (147,000 ) Total tax provision $ 233,000 $ 657,000 A reconciliation of provision for income taxes at the statutory rate to income tax provision at the Company's effective rate is as follows: 2018 2017 Computed tax provision at the expected statutory rate $ 193,500 $ 1,015,800 State income tax - net of Federal tax benefit (1,200 ) 500 Tax effect of permanent differences: Research tax credits (110,000 ) (273,000 ) Tax rate change on deferred taxes 164,000 — Other permanent differences (3,700 ) (93,700 ) Other (9,600 ) 7,400 Total tax provision $ 233,000 $ 657,000 Effective income tax rate 34.4 % 22.0 % Significant components of the Company's deferred tax assets and liabilities consist of the following: 2018 2017 Deferred tax assets: Allowance for doubtful receivables $ 23,000 $ 37,400 Tax inventory adjustment 18,800 213,000 Allowance for obsolete inventory 315,500 505,800 Accrued vacation 40,900 77,800 Accrued commissions 14,000 20,900 Warranty reserve 27,600 51,800 Stock options issued for services 223,100 320,100 Total deferred tax assets 662,900 1,226,800 Deferred tax liabilities: Excess tax depreciation 443,785 797,685 Net deferred tax assets $ 219,115 $ 429,115 In December 2017, the Tax Cuts and Jobs Act (the 2017 Act) became law. It includes a broad range of tax reform proposals affecting businesses, including corporate tax rates, business deductions, and international tax provisions. Among the changes, the 2017 Act reduces the corporate rate from 34% 21% $164,000 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 $3.2 million in taxable income in future years in order to realize the deferred tax assets recorded as of May 31, 2018 of $662,900 34 Table of Contents The Company and its subsidiary file consolidated Federal and State income tax returns. As of May 31, 2018, the Company had State investment tax credit carryforwards of approximately $369,000 May 31, 2024 |
11. Earnings Per Common Share_
11. Earnings Per Common Share: | 12 Months Ended |
May 31, 2018 | |
Earnings Per Share [Abstract] | |
11. 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: 2018 2017 Average common shares outstanding 3,458,049 3,432,112 Common shares issuable under stock option plans 30,876 73,082 Average common shares outstanding assuming dilution 3,488,925 3,505,194 |
12. Related Party Transactions_
12. Related Party Transactions: | 12 Months Ended |
May 31, 2018 | |
Related Party Transactions [Abstract] | |
12. Related Party Transactions: | 12. Related Party Transactions: The Company had no related party transactions for the years ended May 31, 2018 and 2017. |
13. Employee Stock Purchase Pla
13. Employee Stock Purchase Plan: | 12 Months Ended |
May 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
13. 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, 2018 and 2017, 1,835 1,498 |
14. Stock Option Plans_
14. Stock Option Plans: | 12 Months Ended |
May 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
14. 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 Using the Black-Scholes option pricing model, the weighted average estimated fair value of each option granted under the plan was $2.86 $3.59 2018 2017 Risk-free interest rate 2.179 % 1.852 % Expected life in years 3.7 3.5 Expected volatility 30 % 27 % Expected dividend yield 0 % 0 % 35 Table of Contents The following is a summary of stock option activity: Shares Weighted Average Exercise Price Intrinsic Value Outstanding - May 31, 2016 243,500 $ 9.53 $ 1,745,254 Options granted 49,500 $ 15.95 Less: options exercised 39,500 $ 8.60 Outstanding - May 31, 2017 253,500 $ 10.93 $ 817,629 Options granted 43,750 $ 11.15 Less: options exercised 24,750 $ 6.67 Less: options expired 750 $ 19.26 Outstanding - May 31, 2018 271,750 $ 11.33 $ 304,252 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 (93,000 at May 31, 2018 and 174,000 at May 31, 2017.) The Company's closing stock price was $10.26 $13.26 64,500 $164,983 $339,585 The following table summarizes information about stock options outstanding at May 31, 2018: Outstanding and Exercisable Range of Exercise Prices Number of Options Weighted Average Remaining Years of Contractual Life Weighted Average Exercise Price $ 2.00 3.00 10,000 0.9 $ 2.83 $ 5.01 6.00 15,000 2.9 $ 5.69 $ 6.01 7.00 15,750 1.8 $ 6.34 $ 7.01 8.00 20,000 4.9 $ 7.74 $ 8.01 9.00 32,250 5.7 $ 8.74 $ 10.01 11.00 25,000 9.9 $ 10.30 $ 11.01 12.00 20,000 3.9 $ 11.29 $ 12.01 13.00 55,000 7.7 $ 12.35 $ 13.01 14.00 30,000 8.9 $ 13.80 $ 16.01 17.00 30,000 7.9 $ 16.40 $ 19.01 20.00 18,750 8.2 $ 19.26 $ 2.00 20.00 271,750 6.5 $ 11.33 The following table summarizes information about stock options outstanding at May 31, 2017: Outstanding and Exercisable Range of Exercise Prices Number of Options Weighted Average Remaining years of Contractual Life Weighted Average Exercise Price $ 2.00 3.00 10,000 1.9 $ 2.83 $ 5.01 6.00 25,000 2.7 $ 5.49 $ 6.01 7.00 20,500 2.2 $ 6.30 $ 7.01 8.00 25,000 5.9 $ 7.74 $ 8.01 9.00 37,250 6.7 $ 8.77 $ 11.01 12.00 20,000 4.9 $ 11.29 $ 12.01 13.00 36,250 8.0 $ 12.39 $ 13.01 14.00 30,000 9.9 $ 13.80 $ 16.01 17.00 30,000 8.9 $ 16.40 $ 19.01 20.00 19,500 9.2 $ 19.26 $ 2.00 20.00 253,500 6.5 $ 10.93 36 Table of Contents |
15. Preferred Stock_
15. Preferred Stock: | 12 Months Ended |
May 31, 2018 | |
Equity [Abstract] | |
15. Preferred Stock: | 15. Preferred Stock: The Company has 2,000,000 |
16. Treasury Stock_
16. Treasury Stock: | 12 Months Ended |
May 31, 2018 | |
Equity [Abstract] | |
16. Treasury Stock: | 16. Treasury Stock: Treasury shares are 550,872 |
17. Retirement Plan_
17. Retirement Plan: | 12 Months Ended |
May 31, 2018 | |
Retirement Benefits [Abstract] | |
17. 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 $74,279 $74,261 |
18. Fair Value of Financial Ins
18. Fair Value of Financial Instruments: | 12 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
18. 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. |
19. Cash Flows Information_
19. Cash Flows Information: | 12 Months Ended |
May 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
19. Cash Flows Information: | 19. Cash Flows Information: 2018 2017 Interest paid none none Income taxes paid $ 61,615 $ 768,827 |
1. Summary of Significant Acc26
1. Summary of Significant Accounting Policies: (Policies) | 12 Months Ended |
May 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [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 eight categories; namely, Seismic Dampers, Fluidicshoks®, Crane and Industrial Buffers, Self-Adjusting Shock Absorbers, Liquid Die Springs,Vibration Dampers, Machined Springs and Custom Actuators 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. 74% 21% 80% 13% |
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, 2018 include “available for sale” corporate bonds stated at fair value, which approximates cost. The bonds (13) mature on various dates during the period September 2018 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, 2018, 60% 40% 66% 34% 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 on incoming inventory items are classified as a component of cost of goods sold, while shipping and handling costs on outgoing shipments to customers are classified as a component of selling, general and administrative expenses. The amounts of these costs classified as a component of selling, general and administrative expenses were $264,696 $127,796 |
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 $263,000 $903,000 |
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, 2018 or 2017. The Company recorded no interest expense or penalties in its consolidated statements of income during the years ended May 31, 2018 and 2017. The Company believes it is no longer subject to examination by federal and state taxing authorities for years prior to May 31, 2015. |
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, 2018 and 2017 was $124,931 $177,693 |
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. ASU 2014-09 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09, as amended, is effective for annual reporting periods, and interim periods within that period, beginning after December 15, 2017 (fiscal year 2019 for the Company). Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company has not completely determined the potential effects of the adoption of ASU 2014-09 on its Consolidated Financial Statements, however it will likely require the Company to slow the recognition of revenue for contracts currently accounted for under the percentage-of-completion method. Other recently issued Accounting Standards Codification (ASC) guidance has either been implemented or are not significant to the Company. |
2. Accounts Receivable_ (Tables
2. Accounts Receivable: (Tables) | 12 Months Ended |
May 31, 2018 | |
Receivables [Abstract] | |
Accounts receivable table | 2018 2017 Customers $ 5,515,848 $ 1,978,108 Customers - retention 859,771 677,420 Gross accounts receivable 6,375,619 2,655,528 Less allowance for doubtful accounts 109,755 109,755 Net accounts receivable $ 6,265,864 $ 2,545,773 |
3. Inventory_ (Tables)
3. Inventory: (Tables) | 12 Months Ended |
May 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory table | 2018 2017 Raw materials $ 726,852 $ 709,174 Work-in-process 9,990,225 10,071,179 Finished goods 700,698 808,257 Gross inventory 11,417,775 11,588,610 Less allowance for obsolescence 100,000 100,000 Net inventory $ 11,317,775 $ 11,488,610 |
4. Costs and Estimated Earnin29
4. Costs and Estimated Earnings on Uncompleted Contracts: (Tables) | 12 Months Ended |
May 31, 2018 | |
Contractors [Abstract] | |
Costs and estimated earnings on uncompleted contracts components table | 2018 2017 Costs incurred on uncompleted contracts $ 12,512,350 $ 14,197,223 Estimated earnings 5,157,890 6,071,776 Total costs and estimated earnings 17,670,240 20,268,999 Less billings to date 13,356,279 14,696,595 Costs and estimated earnings not billed $ 4,313,961 $ 5,572,404 |
Costs and estimated earnings on uncompleted contracts table | 2018 2017 Costs and estimated earnings in excess of billings $ 6,356,963 $ 6,868,393 Billings in excess of costs and estimated earnings 2,043,002 1,295,989 Costs and estimated earnings not billed $ 4,313,961 $ 5,572,404 |
5. Maintenance and Other Inve30
5. Maintenance and Other Inventory: (Tables) | 12 Months Ended |
May 31, 2018 | |
Inventory Disclosure [Abstract] | |
Maintenance and other inventory table | 2018 2017 Maintenance and other inventory $ 2,287,897 $ 2,261,892 Less allowance for obsolescence 1,402,246 1,383,113 Maintenance and other inventory, net $ 885,651 $ 878,779 |
6. Property and Equipment_ (Tab
6. Property and Equipment: (Tables) | 12 Months Ended |
May 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment table | 2018 2017 Land $ 195,220 $ 195,220 Buildings and improvements 9,342,431 9,342,431 Machinery and equipment 10,302,681 9,466,340 Office furniture and equipment 1,652,711 1,588,219 Autos and trucks 84,256 84,256 Land improvements 455,429 419,429 Gross property and equipment 22,032,728 21,095,895 Less accumulated depreciation 12,097,103 11,101,179 Property and equipment, net $ 9,935,625 $ 9,994,716 |
9. Sales_ (Tables)
9. Sales: (Tables) | 12 Months Ended |
May 31, 2018 | |
Disclosure 9.Sales Tables Abstract | |
Sales by major customer type | 2018 2017 Construction $ 12,192,836 $ 13,907,139 Aerospace / Defense 10,205,945 10,086,316 Industrial 1,965,186 1,543,541 Sales, net $ 24,363,967 $ 25,536,996 |
10. Income Taxes_ (Tables)
10. Income Taxes: (Tables) | 12 Months Ended |
May 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes Table | 2018 2017 Current tax provision: Federal $ 23,000 $ 803,200 State — 800 Total current tax provision 23,000 804,000 Deferred tax provision: Federal 210,000 (146,500 ) State — (500 ) Total deferred tax provision 210,000 (147,000 ) Total tax provision $ 233,000 $ 657,000 |
Reconciliation of income tax statutory rate to effective rate | 2018 2017 Computed tax provision at the expected statutory rate $ 193,500 $ 1,015,800 State income tax - net of Federal tax benefit (1,200 ) 500 Tax effect of permanent differences: Research tax credits (110,000 ) (273,000 ) Tax rate change on deferred taxes 164,000 — Other permanent differences (3,700 ) (93,700 ) Other (9,600 ) 7,400 Total tax provision $ 233,000 $ 657,000 Effective income tax rate 34.4 % 22.0 % |
Net deferred tax assets | 2018 2017 Deferred tax assets: Allowance for doubtful receivables $ 23,000 $ 37,400 Tax inventory adjustment 18,800 213,000 Allowance for obsolete inventory 315,500 505,800 Accrued vacation 40,900 77,800 Accrued commissions 14,000 20,900 Warranty reserve 27,600 51,800 Stock options issued for services 223,100 320,100 Total deferred tax assets 662,900 1,226,800 Deferred tax liabilities: Excess tax depreciation 443,785 797,685 Net deferred tax assets $ 219,115 $ 429,115 |
11. Earnings Per Common Share_
11. Earnings Per Common Share: (Tables) | 12 Months Ended |
May 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per common share table | 2018 2017 Average common shares outstanding 3,458,049 3,432,112 Common shares issuable under stock option plans 30,876 73,082 Average common shares outstanding assuming dilution 3,488,925 3,505,194 |
14. Stock Option Plans_ (Tables
14. Stock Option Plans: (Tables) | 12 Months Ended |
May 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock option plans table | 2018 2017 Risk-free interest rate 2.179 % 1.852 % Expected life in years 3.7 3.5 Expected volatility 30 % 27 % Expected dividend yield 0 % 0 % |
Stock options roll foward | Shares Weighted Average Exercise Price Intrinsic Value Outstanding - May 31, 2016 243,500 $ 9.53 $ 1,745,254 Options granted 49,500 $ 15.95 Less: options exercised 39,500 $ 8.60 Outstanding - May 31, 2017 253,500 $ 10.93 $ 817,629 Options granted 43,750 $ 11.15 Less: options exercised 24,750 $ 6.67 Less: options expired 750 $ 19.26 Outstanding - May 31, 2018 271,750 $ 11.33 $ 304,252 |
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | Outstanding and Exercisable Range of Exercise Prices Number of Options Weighted Average Remaining Years of Contractual Life Weighted Average Exercise Price $ 2.00 3.00 10,000 0.9 $ 2.83 $ 5.01 6.00 15,000 2.9 $ 5.69 $ 6.01 7.00 15,750 1.8 $ 6.34 $ 7.01 8.00 20,000 4.9 $ 7.74 $ 8.01 9.00 32,250 5.7 $ 8.74 $ 10.01 11.00 25,000 9.9 $ 10.30 $ 11.01 12.00 20,000 3.9 $ 11.29 $ 12.01 13.00 55,000 7.7 $ 12.35 $ 13.01 14.00 30,000 8.9 $ 13.80 $ 16.01 17.00 30,000 7.9 $ 16.40 $ 19.01 20.00 18,750 8.2 $ 19.26 $ 2.00 20.00 271,750 6.5 $ 11.33 The following table summarizes information about stock options outstanding at May 31, 2017: Outstanding and Exercisable Range of Exercise Prices Number of Options Weighted Average Remaining years of Contractual Life Weighted Average Exercise Price $ 2.00 3.00 10,000 1.9 $ 2.83 $ 5.01 6.00 25,000 2.7 $ 5.49 $ 6.01 7.00 20,500 2.2 $ 6.30 $ 7.01 8.00 25,000 5.9 $ 7.74 $ 8.01 9.00 37,250 6.7 $ 8.77 $ 11.01 12.00 20,000 4.9 $ 11.29 $ 12.01 13.00 36,250 8.0 $ 12.39 $ 13.01 14.00 30,000 9.9 $ 13.80 $ 16.01 17.00 30,000 8.9 $ 16.40 $ 19.01 20.00 19,500 9.2 $ 19.26 $ 2.00 20.00 253,500 6.5 $ 10.93 36 Table of Contents |
19. Cash Flows Information_ (Ta
19. Cash Flows Information: (Tables) | 12 Months Ended |
May 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental cash flow information | 2018 2017 Interest paid none none Income taxes paid $ 61,615 $ 768,827 |
1. Summary of Significant Acc37
1. Summary of Significant Accounting Policies: (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Accounting Policies [Abstract] | ||
Domestic revenue as percentage of total | 74.00% | 80.00% |
Asian revenue as percentage of total | 21.00% | 13.00% |
Percent of revenue recognized using percentage of completion method of accounting | 60.00% | 66.00% |
Percent of revenue recognized using completed contract method of accounting | 40.00% | 34.00% |
Shipping and handling costs | $ 264,696 | |
Shipping and handling costs | $ 127,796 | |
Research and development costs | 263,000 | 903,000 |
Share based compensation expense | $ 124,931 | $ 177,693 |
Accounts receivable table
Accounts receivable table - USD ($) | May 31, 2018 | May 31, 2017 |
Statement of Financial Position [Abstract] | ||
Customers | $ 5,515,848 | $ 1,978,108 |
Customers - retention | 859,771 | 677,420 |
Gross accounts receivable | 6,375,619 | 2,655,528 |
Less allowance for doubtful accounts | 109,755 | 109,755 |
Net accounts receivable | $ 6,265,864 | $ 2,545,773 |
Inventory table
Inventory table - USD ($) | May 31, 2018 | May 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 726,852 | $ 709,174 |
Work-in-process | 9,990,225 | 10,071,179 |
Finished goods | 700,698 | 808,257 |
Gross inventory | 11,417,775 | 11,588,610 |
Less allowance for obsolescence | 100,000 | 100,000 |
Net inventory | $ 11,317,775 | $ 11,488,610 |
Costs and estimated earnings on
Costs and estimated earnings on uncompleted contracts components table - USD ($) | May 31, 2018 | May 31, 2017 |
Statement of Financial Position [Abstract] | ||
Costs incurred on uncompleted contracts | $ 12,512,350 | $ 14,197,223 |
Estimated earnings | 5,157,890 | 6,071,776 |
Total costs and estimated earnings | 17,670,240 | 20,268,999 |
Less billings to date | 13,356,279 | 14,696,595 |
Costs and estimated earnings not billed | $ 4,313,961 | $ 5,572,404 |
Costs and estimated earnings 41
Costs and estimated earnings on uncompleted contracts table - USD ($) | May 31, 2018 | May 31, 2017 |
Revenue Recognition and Deferred Revenue [Abstract] | ||
Costs and estimated earnings in excess of billings | $ 6,356,963 | $ 6,868,393 |
Billings in excess of costs and estimated earnings | 2,043,002 | 1,295,989 |
Costs and estimated earnings not billed | $ 4,313,961 | $ 5,572,404 |
Maintenance and other inventory
Maintenance and other inventory table - USD ($) | May 31, 2018 | May 31, 2017 |
Statement of Financial Position [Abstract] | ||
Maintenance and other inventory | $ 2,287,897 | $ 2,261,892 |
Less allowance for obsolescence | 1,402,246 | 1,383,113 |
Maintenance and other inventory, net | $ 885,651 | $ 878,779 |
5. Maintenance and Other Inve43
5. Maintenance and Other Inventory: (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Provision for potentially obsolete inventory | $ 60,000 | $ 180,000 |
Property and equipment table
Property and equipment table - USD ($) | May 31, 2018 | May 31, 2017 |
Statement of Financial Position [Abstract] | ||
Land | $ 195,220 | $ 195,220 |
Buildings and improvements | 9,342,431 | 9,342,431 |
Machinery and equipment | 10,302,681 | 9,466,340 |
Office furniture and equipment | 1,652,711 | 1,588,219 |
Autos and trucks | 84,256 | 84,256 |
Land improvements | 455,429 | 419,429 |
Gross property and equipment | 22,032,728 | 21,095,895 |
Less accumulated depreciation | 12,097,103 | 11,101,179 |
Property and equipment, net | $ 9,935,625 | $ 9,994,716 |
6. Property and Equipment_ (Det
6. Property and Equipment: (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 995,924 | $ 868,609 |
Commitments for future capital expenditures | $ 530,000 |
7. Short-Term Borrowings_ (Deta
7. Short-Term Borrowings: (Details Narrative) - USD ($) | May 31, 2018 | May 31, 2017 |
Debt Disclosure [Abstract] | ||
Line of credit facility | $ 10,000,000 | $ 6,000,000 |
Line of credit outstanding balance | 0 | 0 |
Uncleared checks | $ 57,042 | $ 239,200 |
Sales by major customer type
Sales by major customer type - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Sales, net | $ 24,363,967 | $ 25,536,996 |
Construction [Member] | ||
Sales, net | 12,192,836 | 13,907,139 |
Aerospace Defense [Member] | ||
Sales, net | 10,205,945 | 10,086,316 |
Industrial [Member] | ||
Sales, net | $ 1,965,186 | $ 1,543,541 |
9. Sales_ (Details Narrative)
9. Sales: (Details Narrative) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Sales | ||
Percentage of total sales to significant individual customers | 49.00% | 44.00% |
Percentage of total sales to significant individual customer1 | 14.00% | 14.00% |
Percentage of total sales to significant individual customer2 | 13.00% | 9.00% |
Percentage of total sales to significant individual customer3 | 9.00% | 8.00% |
Percentage of total sales to significant individual customer4 | 7.00% | 7.00% |
Percentage of total sales to significant individual customer5 | 6.00% | 6.00% |
Income Taxes Table
Income Taxes Table - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Current tax provision: | ||
Federal | $ 23,000 | $ 803,200 |
State | 0 | 800 |
Total current tax provision | 23,000 | 804,000 |
Deferred tax provision: | ||
Federal | 210,000 | (146,500) |
State | 0 | (500) |
Total deferred tax provision | 210,000 | (147,000) |
Total tax provision | $ 233,000 | $ 657,000 |
Reconciliation of income tax st
Reconciliation of income tax statutory rate to effective rate - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Computed tax provision at the expected statutory rate | $ 193,500 | $ 1,015,800 |
State income tax - net of Federal tax benefit | (1,200) | 500 |
Tax effect of permanent differences: | ||
Research tax credits | (110,000) | (273,000) |
Tax rate change on deferred taxes | 164,000 | 0 |
Other permanent differences | (3,700) | (93,700) |
Other | (9,600) | 7,400 |
Total tax provision | $ 233,000 | $ 657,000 |
Effective income tax rate | 34.40% | 22.00% |
Net deferred tax assets
Net deferred tax assets - USD ($) | May 31, 2018 | May 31, 2017 |
Deferred tax assets: | ||
Allowance for doubtful receivables | $ 23,000 | $ 37,400 |
Tax inventory adjustment | 18,800 | 213,000 |
Allowance for obsolete inventory | 315,500 | 505,800 |
Accrued vacation | 40,900 | 77,800 |
Accrued commissions | 14,000 | 20,900 |
Warranty reserve | 27,600 | 51,800 |
Stock options issued for services | 223,100 | 320,100 |
Total deferred tax assets | 662,900 | 1,226,800 |
Deferred tax liabilities: | ||
Excess tax depreciation | 443,785 | 797,685 |
Net deferred tax assets | $ 219,115 | $ 429,115 |
10. Income Taxes_ (Details Narr
10. Income Taxes: (Details Narrative) - USD ($) | 5 Months Ended | 7 Months Ended | 12 Months Ended | 72 Months Ended | |
May 31, 2018 | Dec. 31, 2017 | May 31, 2018 | May 31, 2017 | May 31, 2024 | |
Income Tax Disclosure [Abstract] | |||||
Corporate income tax rate | 21.00% | 34.00% | |||
Effect of change in tax rate | $ 164,000 | $ 0 | |||
Deferred Tax Assets, Gross | $ 662,900 | 662,900 | $ 1,226,800 | ||
Deferred tax credits carryforward | $ 369,000 | $ 369,000 | |||
Tax credit carryforward expiration date | May 31, 2024 |
Earnings per common share table
Earnings per common share table - shares | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Income Statement [Abstract] | ||
Average common shares outstanding | 3,458,049 | 3,432,112 |
Common shares issuable under stock option plans | 30,876 | 73,082 |
Average common shares outstanding assuming dilution | 3,488,925 | 3,505,194 |
13. Employee Stock Purchase P54
13. Employee Stock Purchase Plan: (Details Narrative) - shares | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Common shares issued from employee stock purchase plan | 1,835 | 1,498 |
14. Stock Option Plans_ (Detail
14. Stock Option Plans: (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Common shares reserved for stock options | 160,000 | |
Average estimated value per option granted | $ 2.86 | $ 3.59 |
Price per share of common | $ 10.26 | $ 13.26 |
Shares available | 64,500 | |
Proceeds exercise of options | $ 164,983 | $ 339,585 |
Stock option plans table
Stock option plans table | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Risk-free interest rate | 2.179% | 1.852% |
Expected life in years | 3 years 8 months 12 days | 3 years 6 months |
Expected volatility | 30.00% | 27.00% |
Expected dividend yield | 0.00% | 0.00% |
Stock options roll foward
Stock options roll foward - USD ($) | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Stock options outstanding | 271,750 | 253,500 | 243,500 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 11.33 | $ 10.93 | $ 9.53 |
Intrinsic value of options outstanding | $ 304,252 | $ 817,629 | $ 1,745,254 |
Options granted | 43,750 | 49,500 | |
Weighted average exercise price of options granted | $ 11.15 | $ 15.95 | |
Stock options exercised | 24,750 | 39,500 | |
Weighted average exercise price of options exercised | $ 6.67 | $ 8.60 | |
Stock options expired | 750 | ||
Weighted average exercise price of options expired | $ 19.26 |
Stock option plans - Stock opti
Stock option plans - Stock options outstanding and exercisable | May 31, 2018$ / sharesshares | May 31, 2017$ / sharesshares | May 31, 2016$ / sharesshares |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Range of exercise prices, Minimum | $ 2 | $ 2 | |
Range of exercise prices, Maximum | $ 20 | $ 20 | |
[custom:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTermTwo-0] | 6.5 | 6.5 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | shares | 271,750 | 253,500 | 243,500 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 11.33 | $ 10.93 | $ 9.53 |
Share Based Compensation Shares Authorized Under Stock Option Plans By Exercise Price Range One [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Range of exercise prices, Minimum | 2 | 2 | |
Range of exercise prices, Maximum | $ 3 | $ 3 | |
Number of options | shares | 10,000 | 10,000 | |
[custom:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTermTwo-0] | 0.9 | 1.9 | |
Weighted average exercise price | $ 2.83 | $ 2.83 | |
Share Based Compensation Shares Authorized Under Stock Option Plans By Exercise Price Range Two [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Range of exercise prices, Minimum | 5.01 | 5.01 | |
Range of exercise prices, Maximum | $ 6 | $ 6 | |
Number of options | shares | 15,000 | 25,000 | |
[custom:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTermTwo-0] | 2.9 | 2.7 | |
Weighted average exercise price | $ 5.69 | $ 5.49 | |
Share Based Compensation Shares Authorized Under Stock Option Plans By Exercise Price Range Three [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Range of exercise prices, Minimum | 6.01 | 6.01 | |
Range of exercise prices, Maximum | $ 7 | $ 7 | |
Number of options | shares | 15,750 | 20,500 | |
[custom:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTermTwo-0] | 1.8 | 2.2 | |
Weighted average exercise price | $ 6.34 | $ 6.30 | |
Share Based Compensation Shares Authorized Under Stock Option Plans By Exercise Price Range Four [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Range of exercise prices, Minimum | 7.01 | 7.01 | |
Range of exercise prices, Maximum | $ 8 | $ 8 | |
Number of options | shares | 20,000 | 25,000 | |
[custom:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTermTwo-0] | 4.9 | 5.9 | |
Weighted average exercise price | $ 7.74 | $ 7.74 | |
Share Based Compensation Shares Authorized Under Stock Option Plans By Exercise Price Range Five [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Range of exercise prices, Minimum | 8.01 | 8.01 | |
Range of exercise prices, Maximum | $ 9 | $ 9 | |
Number of options | shares | 32,250 | 37,250 | |
[custom:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTermTwo-0] | 5.7 | 6.7 | |
Weighted average exercise price | $ 8.74 | $ 8.77 | |
Share Based Compensation Shares Authorized Under Stock Option Plans By Exercise Price Range Six [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Range of exercise prices, Minimum | 10.01 | 11.01 | |
Range of exercise prices, Maximum | $ 11 | $ 12 | |
Number of options | shares | 25,000 | 20,000 | |
[custom:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTermTwo-0] | 9.9 | 4.9 | |
Weighted average exercise price | $ 10.30 | $ 11.29 | |
Share Based Compensation Shares Authorized Under Stock Option Plans By Exercise Price Range Seven [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Range of exercise prices, Minimum | 11.01 | 12.01 | |
Range of exercise prices, Maximum | $ 12 | $ 13 | |
Number of options | shares | 20,000 | 36,250 | |
[custom:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTermTwo-0] | 3.9 | 8 | |
Weighted average exercise price | $ 11.29 | $ 12.39 | |
Share Based Compensation Shares Authorized Under Stock Option Plans By Exercise Price Range Eight [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Range of exercise prices, Minimum | 12.01 | 13.01 | |
Range of exercise prices, Maximum | $ 13 | $ 14 | |
Number of options | shares | 55,000 | 30,000 | |
[custom:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTermTwo-0] | 7.7 | 9.9 | |
Weighted average exercise price | $ 12.35 | $ 13.80 | |
Share Based Compensation Shares Authorized Under Stock Option Plans By Exercise Price Range Nine [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Range of exercise prices, Minimum | 13.01 | 16.01 | |
Range of exercise prices, Maximum | $ 14 | $ 17 | |
Number of options | shares | 30,000 | 30,000 | |
[custom:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTermTwo-0] | 8.9 | 8.9 | |
Weighted average exercise price | $ 13.80 | $ 16.40 | |
Share Based Compensation Shares Authorized Under Stock Option Plans By Exercise Price Range Ten [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Range of exercise prices, Minimum | 16.01 | 19.01 | |
Range of exercise prices, Maximum | $ 17 | $ 20 | |
Number of options | shares | 30,000 | 19,500 | |
[custom:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTermTwo-0] | 7.9 | 9.2 | |
Weighted average exercise price | $ 16.40 | $ 19.26 | |
Share Based Compensation Shares Authorized Under Stock Option Plans By Exercise Price Range Eleven [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Range of exercise prices, Minimum | 19.01 | ||
Range of exercise prices, Maximum | $ 20 | ||
Number of options | shares | 18,750 | ||
[custom:SharebasedCompensationSharesAuthorizedUnderStockOptionPlansExercisePriceRangeExercisableOptionsWeightedAverageRemainingContractualTermTwo-0] | 8.2 | ||
Weighted average exercise price | $ 19.26 |
15. Preferred Stock_ (Details N
15. Preferred Stock: (Details Narrative) | May 31, 2018shares |
Equity [Abstract] | |
Preferred shares authorized | 2,000,000 |
16. Treasury Stock_ (Details Na
16. Treasury Stock: (Details Narrative) - shares | May 31, 2018 | May 31, 2017 |
Equity [Abstract] | ||
Treasury Stock | 550,872 | 550,872 |
17. Retirement Plan_ (Details N
17. Retirement Plan: (Details Narrative) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Retirement Benefits [Abstract] | ||
Retirement plan expense | $ 74,279 | $ 74,261 |
Supplemental cash flow informat
Supplemental cash flow information - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Additional Cash Flow Elements and Supplemental Cash Flow Information [Abstract] | ||
Interest paid | $ 0 | $ 0 |
Income taxes paid | $ 61,615 | $ 768,827 |