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Form 10-Q TAYLOR DEVICES INC For: Feb 28

April 13, 2018 9:18 AM EDT

Exhibit 31(i)

 

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a - 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Douglas P. Taylor, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Taylor Devices, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: April 12, 2018 /s/ Douglas P. Taylor       
 

Douglas P. Taylor

Chief Executive Officer

 

 

 

Exhibit 32(i)

 

 

 

 

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

 

In connect with the quarterly report of Taylor Devices, Inc. ("the Company") on Form 10-Q for the quarter ended February 28, 2018 to be filed with Securities and Exchange Commission on or about the date hereof (the
"Report"), I, Douglas P. Taylor, Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods covered by the Report.

 

It is not intended that this statement be deemed to be filed for purposes of the Securities Exchange Act of 1934.

 

 

 

Date: April 12, 2018 By: /s/ Douglas P. Taylor      
   

Douglas P. Taylor,

Chief Executive Officer

 

 

Exhibit 31(ii)

 

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a - 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Mark V. McDonough, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q of Taylor Devices, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

Date: April 12, 2018 /s/ Mark V. McDonough
 

Mark V. McDonough

Chief Financial Officer

 

 

 

Exhibit 32(ii)

 

 

 

 

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

 

In connect with the quarterly report of Taylor Devices, Inc. (the "Company") on Form 10-Q for the quarter ended February 28, 2018 to be filed with Securities and Exchange Commission on or about the date hereof (the "Report"), I, Mark V. McDonough, Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods covered by the Report.

 

It is not intended that this statement be deemed to be filed for purposes of the Securities Exchange Act of 1934.

 

 

 

Date: April 12, 2018 By: /s/ Mark V. McDonough      
   

Mark V. McDonough,

Chief Financial Officer

 

 

Exhibit 20

 

 

 

 

NEWS FROM TAYLOR DEVICES, INC.

SHAREHOLDER LETTER, SPRING 2018

 

THIS NEWSLETTER IS DIRECTED TO ALL SHAREHOLDERS OF TAYLOR DEVICES. WE HOPE THAT IT WILL GENERATE INTEREST IN THE COMPANY, PLUS PROVIDE CURRENT FINANCIAL AND PROJECT INFORMATION. COPIES OF THIS NEWSLETTER WILL ALSO BE CIRCULATED TO SHAREHOLDERS WHO HAVE SHARES IN BROKERAGE ACCOUNTS.

 

 

ITEM: FINANCIAL RESULTS

Taylor Devices completed the third quarter of its fiscal year on February 28, 2018. Comparative, unaudited, financial results for the third quarter and nine month periods are as follows:

 

 

THIRD QUARTER

 

F/Y 17-18

 

 

 

F/Y 16-17

 

SALES

$6,573,658

 

 

$5,672,720

 

NET INCOME

($23,417)*

 

 

$338,203
EARNINGS PER SHARE ($0.01)   $0.10

 

NINE MONTHS

 

F/Y 17-18

 

 

 

F/Y 16-17

 

SALES

$17,953,152

 

 

$19,235,898

 

NET INCOME

$330,477

 

 

$1,486,317

 

EARNINGS PER SHARE

$0.09

 

 

$0.43
       

 

AVERAGE NUMBER OF

SHARES OUTSTANDING

3,451,348

 

 

3,424,192

 

 

*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% to 21% for periods beginning after December 31, 2017. Because of the rate change, the Company was required to record a non-cash write down of deferred tax assets and recognized incremental deferred tax expense of $164,000 during the quarter ending February 28, 2018. This effectively eliminated the Company’s entire third quarter pre-tax income of $145,583, and resulted in a net loss for the quarter. This is a one-time adjustment required by the new tax law change, but the reduction in corporate tax rate should be a benefit in the future.

 

 

Taylor Devices sales continue to be affected by a slowdown in the U.S. construction business. Sales to this sector were down by 19% from the levels recorded in the previous year. In comparison, sales to industrial customers were up by 31%, and aerospace sales were up by 8%. The Company expects seismic and wind damper sales to improve when the U.S. construction business improves. It is also promising to note that construction product sales to Asian customers have increased by 40% for the year to date, and proposal activity to U.S. seismic customers is increasing.

 

Taylor Devices firm order backlog at the end of the third quarter was $18.8 million, compared to $19.5 million in the previous year.

 

 

ITEM: NEW ORDERS, AEROSPACE AND DEFENSE

The following major orders for Aerospace and Defense products were received in the third quarter:

 

¡Unmanned Air Vehicle Landing Gears – The Company has received follow-on contracts adding additional aircraft requirements for both a U.S. and a European aircraft manufacturer.

 

¡Submarine Deck Isolators – A follow-on contract was received from the U.S. Navy for the Company’s shock isolators to be used on the next two attack submarines of the Virginia Class.

 

¡RAM Point Defense System – An order was received for 6 system sets of elevation axis shock absorbers for this shipboard defense missile system.

 

¡KC-46 Aircraft – A follow-on contract was received adding additional aircraft requirements for the Company’s refueling boom shock absorbers on this next generation USAF tanker for mid-air refueling of combat aircraft.

 

¡40mm Automatic Grenade Launcher – An order was received for 40 sets of recoil and counter recoil shock absorbers for this U.S. Army weapon.

 

 

ITEM: NEW ORDERS, SEISMIC AND WIND

The following new orders for the Company’s Seismic and Wind Control Products were received during the third quarter:

 

¡University of California, Los Angeles Franz Hall – Los Angeles, CA

 

¡Loma Linda Hospital, Phase II B Additions – California

 

¡9665 South Wilshire Tower – Beverly Hills, CA

 

¡Kit-Ayoma Building – Tokyo, Japan

 

¡Electronic Plants #18-A and 18-B – Taiwan, ROC

 

¡Huancayo Hospital – Peru

ITEM: NEW PATENT

U.S. Patent 9,896,836 was issued on February 20, 2018 to Taylor Devices and the Iowa State University Research Foundation. The patent is entitled: Apparatus, Method, and System for Hugh Capacity Band Brake Type Variable Friction Damping of Movement of Structures.

 

This invention falls into the category of applied research, as distinct from pure research or product improvement research. The primary intended use of this new technology is to augment the performance of structures already having fluid dampers to improve seismic or wind response, where additional damping forces are required under unusual circumstances, such as a tornado impinging on the building, or a tsunami wave impact. In these cases, the braking element has the ability to be rapidly activated to essentially lock the structure in place. The device is also controllable with only battery power, irrespective of its size. The Company believes there is a developing market for this product, especially on larger buildings which are becoming increasingly taller and more slender in profile.

 

A variant on the technology is being developed for the blast protection of buildings subject to terrorist attack. Initial testing has been promising; and a paper outlining the design and test results was accepted in February for publication in an upcoming issue of a major international engineering journal.

 

 

 

ITEM:NAVY ANNOUNCES NEW MISSION FOR ZUMWALT CLASS DESTROYERS

Taylor Devices 2017 Annual Report featured the newest U.S. Navy warship, the Zumwalt Class “Stealth” Destroyer, which uses literally hundreds of the Company’s Tension-Compression Liquid Spring-Dampers to protect weapons and critical systems on the vessel against battle damage.

 

The Navy has recently announced plans to change the missile load-out on these ships to use largely the extended range versions of the Navy’s “Standard Missile”, which are configured to destroy either an enemy’s ships or their ballistic missiles launched toward U.S. Allied Nations or the U.S. mainland. Thus, the Zumwalt’s mission is shifting from land attack to that of a long range surface strike platform. The three warships of the Zumwalt Class are now planned to be stationed in the Pacific Ocean.

 

All of the missiles in the U.S. Navy’s Standard Missile family use Taylor Devices’ Shock Isolators in each missile launch canister. Thus the change in the missile load-out should result in additional orders to the Company for the missile isolators.

 

 

 

 

 

 

By: /s/Douglas P. Taylor

Douglas P. Taylor

President



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