UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10‑QSB

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                                                                                                    For the quarterly period ended November 30, 2007

[  ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

                                                                                                    For the transition period from __________ to __________

                                                                                                    Commission File Number 0‑3498
 

716-694-0800

Issuer's Telephone Number

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

X

No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

No

X

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

Transitional Small Business Disclosure Format (Check one):

Yes

No

X

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TAYLOR DEVICES, INC.

 

Index to Form 10-QSB

2

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TAYLOR DEVICES, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets		(Unaudited)
		November 30,       2007	May 31, 2007
Assets
Current assets:
	Cash and cash equivalents	$         135,118	$         22,748
	Accounts receivable, net	2,308,317	3,893,793
	Inventory	6,214,115	5,093,146
	Costs and estimated earnings in excess of billings	1,442,417	1,991,183
	Other current assets	1,173,545	954,358
	Total current assets	11,273,512	11,955,228
Maintenance and other inventory, net		943,996	753,825
Property and equipment, net		3,544,953	3,349,810
Investment in affiliate, at equity		455,327	451,520
Intangible and other assets		140,729	142,007
		$  16,358,517	$  16,652,390
Liabilities and Stockholders' Equity
Current liabilities:
	Short-term borrowings and current portion of long-term debt	$    1,115,296	$   1,866,066
	Payables - trade	1,405,387	994,057
	Accrued commissions	573,953	666,323
	Billings in excess of costs and estimated earnings	130,600	18,002
	Other current liabilities	952,074	1,258,783
	Total current liabilities	4,177,310	4,803,231
Long-term liabilities		439,919	564,207
Payables - affiliate		102,764	174,609
Minority stockholder's interest		540,465	520,504
Stockholders' Equity:
	Common stock and additional paid-in capital	4,877,224	4,830,543
	Retained earnings	7,276,917	6,815,378
		12,154,141	11,645,921
	Treasury stock - at cost	(1,056,082)	(1,056,082)
	Total stockholders' equity	11,098,059	10,589,839
		$  16,358,517	$  16,652,390

See notes to condensed consolidated financial statements.

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TAYLOR DEVICES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Income		(Unaudited)		(Unaudited)
		For the three months ended November 30,		For the six months ended November 30,
		2007	2006	2007	2006
Sales, net		$ 4,276,406	$ 3,826,975	$ 8,684,591	$ 7,824,477
Cost of goods sold		3,011,531	2,497,338	5,730,645	4,907,145
	Gross profit	1,264,875	1,329,637	2,953,946	2,917,332
Selling, general and administrative expenses		1,056,093	1,008,048	2,124,596	2,253,573
	Operating income	208,782	321,589	829,350	663,759
Other expense, net		(10,428)	(90,165)	(55,957)	(173,678)
	Income before provision for income taxes, equity in net
	income of affiliate and minority stockholder's interest	198,354	231,424	773,393	490,081
Provision for income taxes		74,000	88,200	295,700	183,200
	Income before equity in net income of affiliate
	and minority stockholder's interest	124,354	143,224	477,693	306,881
Equity in net income (loss) of affiliate		(782)	1,971	3,807	4,503
	Income before minority stockholder's interest	123,572	145,195	481,500	311,384
Minority stockholder's interest		(10,263)	(6,421)	(19,961)	(17,097)
	Net income	$113,309	$   138,774	$461,539	$   294,287
	Basic and diluted earnings per common share	$       0.04	$         0.04	$       0.15	$         0.09

See notes to condensed consolidated financial statements

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1204:

TAYLOR DEVICES, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
					(Unaudited) November 30,
For the six months ended					2007	2006
Cash flows from operating activities:
	Net income				$     461,539	$     294,287
	Adjustments to reconcile net income to net cash flows from
	operating activities:
		Depreciation and amortization			179,323	178,625
		Gain of sale of equipment			(890)	-
		Stock based compensation expense related to employee stock options			37,741	76,368
		Bad debts expense			(68,105)	45,000
		Equity in net (income) loss of affiliate			(3,807)	(4,503)
		Minority stockholder's interest			19,961	17,097
		Changes in other assets and liabilities:
			Accounts receivable		1,653,581	(915,010)
			Inventory		(1,311,140)	(871,521)
			Costs and estimated earnings in excess of billings		548,766	884,857
			Other current assets		(236,548)	142,656
			Payables - trade		411,330	(366,113)
			Accrued commissions		(92,370)	263,245
			Billings in excess of costs and estimated earnings		112,598	33,600
			Other current liabilities		(306,709)	203,167
				Net cash flows from (for) operating activities	1,405,270	(18,245)
Cash flows from investing activities:
	Acquisition of property and equipment				(370,266)	(135,868)
	Other investing activities				15,329	10,695
				Net cash flows for investing activities	(354,937)	(125,173)
Cash flows from financing activities:
	Net short-term borrowings and repayments on long-term debt				(875,058)	146,486
	Payables - affiliate				(71,845)	(27,774)
	Proceeds from issuance of common stock				8,940	6,965
				Net cash flows from (for) financing activities	(937,963)	125,677
				Net increase (decrease) in cash and cash equivalents	112,370	(17,741)
Cash and cash equivalents - beginning					22,748	60,011
				Cash and cash equivalents - ending	$     135,118	$    42,270

See notes to condensed consolidated financial statements.

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TAYLOR DEVICES, INC.

Notes to Condensed Consolidated Financial Statements

6

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TAYLOR DEVICES, INC.

Item 2.  Management's Discussion and Analysis or Plan of Operation

Cautionary Statement

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements.  Information in this Item 2, "Management's Discussion and Analysis or Plan of Operation," and elsewhere in this 10-QSB that does not consist of historical facts, are "forward-looking statements."  Statements accompanied or qualified by, or containing, words such as "may," "will," "should," "believes," "expects," "intends," "plans," "projects," "estimates," "predicts," "potential," "outlook," "forecast," "anticipates," "presume," and "assume" constitute forward-looking statements and, as such, are not a guarantee of future performance.  The statements involve factors, risks and uncertainties, the impact or occurrence of which can cause actual results to differ materially from the expected results described in such statements.  Risks and uncertainties can include, among others, fluctuations in general business cycles and changing economic conditions; changing product demand and industry capacity; increased competition and pricing pressures; advances in technology that can reduce the demand for the Company's products, as well as other factors, many or all of which may be beyond the Company's control.  Consequently, investors should not place undue reliance on forward-looking statements as predictive of future results.  The Company disclaims any obligation to release publicly any updates or revisions to the forward-looking statements herein to reflect any change in the Company's expectations with regard thereto, or any changes in events, conditions or circumstances on which any such statement is based.

Results of Operations

A summary of the period to period changes in the principal items included in the condensed consolidated statements of income is shown below:

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.

Adjustments to cost estimates are made periodically and any losses expected to be incurred on contracts in progress are charged to operations in the period such losses are determined.  However, any profits expected on contracts in progress are recognized over the life of the contract.

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.

7

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For the six months ended November 30, 2007  (All figures being discussed are for the six months ended November 30, 2007 as compared to the six months ended November 30, 2006.)

	Six months ended		Change
	November 30, 2007	November 30, 2006	Increase / (Decrease)	Percent Change
Net Revenue	$  8,685,000	$ 7,824,000	$  861,000	11%
Cost of sales	5,731,000	4,907,000	824,000	17%
Gross profit	$  2,954,000	$ 2,917,000	$    37,000	1%
..as a percentage of net revenues	34%	37%

The Company's consolidated results of operations showed a 11% increase in net revenues and an increase in net income of 57%. Revenues recorded in the current period for long-term construction projects were slightly less (12%) than the level recorded in the prior year.  Revenues recorded in the current period for other-than long-term construction projects (non-projects) were up approximately $1,441,000 or 51% over the level recorded in the prior year.  This increase is primarily in sales of products to customers in aerospace and defense related fields.  Gross profit increased by 1%.  The gross profit as a percentage of net revenues for the current and prior year periods was 34% and 37%. 

The Company's revenues and net income fluctuate from period to period.  The increases in the current period, compared to the prior period, are not necessarily representative of future results.

Selling, General and Administrative Expenses

Six months ended

Change

2052:

	November 30, 2007	November 30, 2006		Increase / (Decrease)		Percent Change
Outside Commissions	$   593,000	$   781,000		$(188,000)		-24%
Other SG&A	1,532,000	1,473,000		59,000		4%
Total SG&A	$2,125,000	$2,254,000		$(129,000)		-6%
..as a percentage of net revenues	24%	29%

Selling, general and administrative expenses decreased by 6% from the prior year.  Outside commission expense decreased by 24% over last year's level.  Outside commission expense was lower in this period due to higher commission rates on two large, long-term construction projects in production last year, offset slightly by a higher volume of sales subject to commission in the current year.  Other selling, general and administrative expenses increased by only 4% from last year to this.

The above factors resulted in operating income of $829,000 for the six months ended November 30, 2007, up 25% from the $664,000 in the same period of the prior year.

Other expense, net, of $56,000 is primarily interest expense and is $118,000 less than in the prior year.  The average level of use of the Company's operating line of credit during the period decreased significantly from $3.6 million last year to $1.7 million this year.    The line of credit is used primarily to fund the production of larger projects that do not allow for advance payments or progress payments.

8

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For the three months ended November 30, 2007  (All figures being discussed are for the three months ended November 30, 2007 as compared to the three months ended November 30, 2006.)

	Three months ended		Change
	November 30,  2007	November 30, 2006	Increase / (Decrease)	Percent Change
Net Revenue	$  4,276,000	$ 3,827,000	$  449,000	12%
Cost of sales	3,011,000	2,497,000	514,000	21%
Gross profit	$  1,265,000	$ 1,330,000	$  (65,000)	-5%
..as a percentage of net revenues	30%	35%

The Company's consolidated results of operations showed a 12% increase in net revenues and a decrease in net income of 18%. Revenues recorded in the current period for long-term construction projects were slightly less (6%) than the level recorded in the prior year.  Revenues recorded in the current period for other-than long-term construction projects (non-projects) were up approximately $589,000 or 36% over the level recorded in the prior year.  This increase is primarily in sales of products to customers in aerospace and defense related fields.  Gross profit decreased by 5%.  The gross profit as a percentage of net revenues for the current and prior year periods was 30% and 35%.  The gross profit is lower primarily because of nine long-term construction projects in Asia that were negotiated in a very competitive market.

The Company's revenues and net income fluctuate from period to period.  The increases in the current period, compared to the prior period, are not necessarily representative of future results.

Selling, General and Administrative Expenses

Three months ended

Change

	November 30, 2007	November 30, 2006		Increase / (Decrease)		Percent Change
Outside Commissions	$   343,000	$   340,000		$      3,000		1%
Other SG&A	713,000	668,000		45,000		7%
Total SG&A	$1,056,000	$1,008,000		$    48,000		5%
..as a percentage of net revenues	25%		26%

Selling, general and administrative expenses increased by 5% from the prior year.  Outside commission expense increased by 1% over last year's level.  Outside commission expense was slightly higher in this period due to a higher commission accrued on one long-term construction project in Asia, combined with a higher volume of sales subject to commission in the current year.    Other selling, general and administrative expenses increased by only 7% from last year to this.

9

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The above factors resulted in operating income of $209,000 for the three months ended November 30, 2007, down 35% from the $322,000 in the same period of the prior year.

Other expense, net, of $10,000 is primarily interest expense and is $80,000 less than in the prior year.  The average level of use of the Company's operating line of credit during the period decreased significantly from $3.6 million last year to $1.2 million this year.    The line of credit is used primarily to fund the production of larger projects that do not allow for advance payments or progress payments.

Stock Options

The Company has a stock option plan which provides for the granting of nonqualified or incentive stock options to officers, key employees and non-employee directors.  Options granted under the plan are exercisable over a ten year term.  Options not exercised at the end of the term expire. 

On June 1, 2006, the Company adopted the stock option expensing rules of Statement of Financial Accounting Standards (SFAS) No. 123R, "Share Based Payment," using the fair value recognition provisions of SFAS No. 123, "Accounting for Stock-Based Compensation."  The Company utilized the modified prospective approach of adoption under SFAS No. 123R which resulted in the recognition of $38,000 and $76,000 of compensation cost for the six month periods ended November 30, 2007 and 2006.

The fair value of each stock option grant has been determined using the Black-Scholes model.  The model considers assumptions related to exercise price, expected volatility, risk-free interest rate, and the weighted average expected term of the stock option grants.  Expected volatility assumptions utilized in the model were based on volatility of the Company's stock price for the thirty month period ending on the date of grant.  The risk-free interest rate is derived from the U.S. treasury yield.  The Company used a weighted average expected term.  The following assumptions were used in the Black-Scholes model in estimating the fair market value of the Company's stock option grants:

                                                                                                   November 30, 2007   November 30, 2006      

                                                         Risk-free interest rate:              3.625%                           3%
                                               Expected life of the options:            2.5 years                    2.5 Years
                                          Expected share price volatility:              61.47%                      152.96%
                                                            Expected dividends:                zero                             zero

These assumptions resulted in:
                Estimated fair-market value per stock option:                 $2.47                           $4.82 

The ultimate value of the options will depend on the future price of the Company's common stock, which cannot be forecast with reasonable accuracy. 

A summary of changes in the stock options outstanding during the six month period ended November 30, 2007 is presented below:
 

			Number of Options	Weighted- Average Exercise Price
Options outstanding and exercisable at May 31, 2007:			87,500	$ 5.200
Options granted:			15,250	$ 6.170
Options exercised:			-	-
Options expired:			-	-
Options outstanding and exercisable at November 30, 2007:			102,750	$ 5.342

 

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Capital Resources, Line of Credit and Long-Term Debt

The Company's primary liquidity is dependent upon the working capital needs.  These are primarily inventory, accounts receivable, costs and estimated earnings in excess of billings, accounts payable, accrued commissions, billings in excess of costs and estimated earnings, and debt service.  The Company's primary sources of liquidity have been operations and bank financing. 

Capital expenditures for the six months ended November 30, 2007 were $370,000 compared to $136,000 in the same period of the prior year.  There are no material commitments for capital expenditures as of November 30, 2007.

The Company has a $5,000,000 line of credit with a bank.  There is a $891,000 principal balance outstanding as of November 30, 2007, which is down from the $1,628,000 balance outstanding as of May 31, 2007.  The outstanding balance on the line of credit will fluctuate as the Company's various long-term projects progress.  The Company is in compliance with restrictive covenants under the line of credit and other financing arrangements, including Niagara County Industrial Development Agency Bond financing. 

Principal maturities of long-term debt for the remainder of the current fiscal year and the subsequent five years are as follows: 2008 - $100,000; 2009 - $138,000; 2010 - $72,000; 2011 - $27,000; 2012 - $27,000; and 2013 - $20,000.

Inventory and Maintenance Inventory

November 30, 2007

May 31, 2007

Increase / (Decrease)

NOTE: Inventory turnover is annualized for the six month period ended November 30, 2007.

Inventory, at $6,214,000 as of November 30, 2007, is 22% higher than the prior year-end.  Of this, approximately 87% is work in process, 6% is finished goods, and 7% is raw materials.  The work in process component of inventory increased by 28%.  This change is the result of increased production activity on sales orders not accounted for using the percentage of completion method of accounting. 

Maintenance and other inventory represents stock that is estimated to have a product life cycle in excess of twelve months. This stock represents certain items that 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 technological 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.  The maintenance inventory increased by 25% since May 31, 2007.  This significant increase is primarily due to the reclassification, from current inventory, of a group of components used in the manufacture of a certain unit used in the aerospace field.  There are no orders in the sales backlog for these products at November 30, 2007.  These components will be used when units in the field are sent to the Company for repair or replacement.  Management of the Company has recorded an allowance for potential inventory obsolescence. The provision for potential inventory obsolescence was $90,000 and $75,000 for the six month periods ended November 30, 2007 and 2006.  The Company continues to rework slow-moving inventory, where applicable, to convert it to product to be used on customer orders.

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Accounts Receivable, Costs and Estimated Earnings in Excess of Billings,

and Billings in Excess of Costs and Estimated Earnings

November 30, 2007

May 31, 2007

Increase /(Decrease)

Accounts receivable

$  2,308,000

$  3,894,000

$          (1,586,000)

-41%

Costs and estimated earnings in excess  of billings

1,442,000

1,991,000

(549,000)

-28%

Less: Billings in excess of costs and estimated earnings

131,000

18,000

113,000

628%

Net

$  3,619,000

$ 5,867,000

$        (2,248,000)

-38%

The Company combines the totals of accounts receivable, the asset "costs and estimated earnings in excess of billings", and the liability, "billings in excess of costs and estimated earnings", to determine how much cash the Company will eventually realize from revenue recorded to date.  As the accounts receivable figure rises in relation to the other two figures, the Company can anticipate increased cash receipts within the ensuing 30-60 days. 

Accounts receivable of $2,308,000 as of November 30, 2007 includes approximately $456,000 of amounts retained by customers on long-term construction projects ("Project(s)").   The Company expects to collect all of these amounts, including the retainage, during the next twelve months.

As noted above, the current asset, "costs and estimated earnings in excess of billings," represents revenues recognized in excess of amounts billed.  Whenever possible, the Company negotiates a provision in sales contracts to allow the Company to bill, and collect from the customer, payments in advance of shipments.  Unfortunately, provisions such as this are often not possible.  The $1,442,000 balance in this account at November 30, 2007 is 28% less than the prior year-end.  Generally, if progress billings are permitted under the terms of a Project sales agreement, the more complete the Project is, the more progress billings will be permitted.  The Company expects to bill the entire amount during the next twelve months.

The balances in this account are comprised of the following components:

	November 30, 2007		May 31, 2007
Costs	$ 2,166,000		$ 3,218,000
Estimated earnings	1,105,000		1,787,000
Less: Billings to customers	1,829,000		3,014,000
Costs and estimated earnings in excess of billings	$ 1,442,000		$ 1,991,000
Number of Projects in progress	14		17

As noted above, the current liability, "billings in excess of costs and estimated earnings", represents billings to customers in excess of revenues recognized.  The $131,000 balance in this account at November 30, 2007 is a $113,000 increase from the balance at the end of the prior year.  Included in this balance at November 30, 2007 is $28,000 in advance billings on a long-term construction project that is not yet in progress.  The balance in this account fluctuates in the same manner and for the same reasons as the account "costs and estimated earnings in excess of billings", discussed above.   Final delivery of product under these contracts is expected to occur during the next twelve months.

The balances in this account are comprised of the following components:

	November 30, 2007		May 31, 2007
Billings to customers	$    626,000		$    72,000
Less:  Costs	382,000		39,000
Less: Estimated earnings	1,139,000		15,000
Billings in excess of costs and estimated earnings	$    131,000		$    18,000
Number of Projects in progress	3		1
Number of Projects not in progress, with billings	1		-

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Summary of factors affecting the year-end balances in the asset "costs and estimated earnings in excess of billings", and the liability, "billings in excess of costs and estimated earnings":

	November 30, 2007	May 31, 2007
Number of Projects in progress	17	18
Aggregate percent complete	71%	70%
Average total sales value of Projects in progress	$340,000	$408,000
Percentage of total value invoiced to customer	51%	42%

Other Balance Sheet Items

The Company's backlog of sales orders at November 30, 2007 is $13.3 million, up slightly from the $12.5 million backlog value at the end of the prior year.  $1.5 million of the current backlog is on long-term construction projects already in progress. 

Accounts payable, at $1,405,000 as of November 30, 2007, is approximately 41% more than the prior year-end.  This balance will fluctuate as the requirement to purchase goods and services fluctuates which is driven in part by the level of long-term construction project activity.  As work progresses on Projects in our sales order backlog, more purchases will occur and the accounts payable balance will rise.  Requirements to purchase goods and services to support sales orders that are not long-term construction projects have increased as well.

Commission expense on applicable sales orders is recognized at the time revenue is recognized.  The commission is paid following receipt of payment from the customers.  Accrued commissions as of November 30, 2007 are $574,000, down slightly from the $666,000 accrued at the prior year-end.  The Company expects the current accrued amount to be paid during the next twelve months.  Other current liabilities decreased by $307,000 from the prior year-end, to $952,000.  Most of this decrease is due to payments made in the current period against income tax liabilities.  Payments on these liabilities will take place as scheduled within the next twelve months.

The Company paid $56,000 to Developments during the six months ended November 30, 2007, reducing the principal balance on the note payable to $88,000.

Management believes that the Company's cash flows from operations and borrowing capacity under the bank line of credit will be sufficient to fund ongoing operations, capital improvements and share repurchases for the next twelve months. 

TAYLOR DEVICES, INC.

 

Item 3.  Controls and Procedures

(a)           Evaluation of disclosure controls and procedures. 

            The Company's principal executive officer and principal financial officer have evaluated the Company's disclosure controls and procedures as of November 30, 2007 and have concluded that as of the evaluation date, the disclosure controls and procedures were effective to ensure that material information relating to the Company was made known to the officers by others within the Company. 

            (b)           Changes in internal controls.          

            There have been no changes in the Company's internal controls over financial reporting that occurred during the fiscal quarter ended November 30, 2007 that have materially affected, or are reasonably likely to materially affect, the Company's control over financial reporting.

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TAYLOR DEVICES, INC.

Part II - Other Information
 

	ITEM 1		Legal Proceedings
			None.
	ITEM 2		Unregistered Sales of Equity Securities and Use of Proceeds
			(a)   The Company sold no equity securities during the fiscal quarter ended August 31, 2007 that were not registered under the Securities Act.
			(b)   Use of proceeds following effectiveness of initial registration statement:
			Not Applicable
			(c)   Repurchases of Equity Securities
			Period	(a) Total   Number of Shares Purchased	(b) Average Price Paid Per Share	(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares   that May Yet Be Purchased Under the Plans or Programs
			September  1, 2007 -   September 30, 2007	-	-	-	.
			October 1, 2007 -   October 31, 2007	-	-	-	.
			November 1, 2007 -   November 30, 2007	-	-	-	.
			Total	-	-	-	$160,802 (1)

				(1) In 1998, the Company initiated a plan to purchase shares of its outstanding common stock through open market purchases, with an initial deposit to the program of $225,000.  Additional deposits totaling $435,000 have been made to the plan, with expenditures of $499,198.  To date, a total of 164,696 shares have been purchased at an average price per share of $3.03.
				(d)		Under the terms of the Company's credit arrangements with its primary lender, the Company is prohibited from issuing cash dividends.  In addition, the credit arrangements require the Company to maintain net working capital of at least $2,000,000 and tangible net worth of at last $6,000,000, as such terms are defined in the credit documents.  On November 30, 2007, under such definitions the Company's net working capital and tangible net worth were significantly in excess of such limits.
ITEM 3   Defaults Upon Senior Securities
				None
15
ITEM 4				Submission of Matters to Vote of Securities Holders
				The Annual Meeting of Shareholders was held on November 2, 2007.  The total outstanding number of shares on the meeting record date of September 25, 2007 was 3,146,609.  A total of 2,850,682 shares were present in person or by proxy at the meeting.  The following are the election results for the slate of directors presented by management. One Class 2 Director of the Company, John Burgess, was elected to serve the remaining two years of a three-year term expiring in 2009.  2,845,725 shares were voted for the nominee and 4,957 were .  Two Class 3 Directors of the Company, Douglas P. Taylor and Randall L. Clark, were elected to serve a three-year term expiring in 2010.  2,815,027 shares were voted for Mr. Taylor and 35,655 were withheld.  2,815,405 shares were voted for Mr. Clark and 35,277 were withheld.  Directors whose term of office continued after the meeting were Richard G. Hill and Reginald B. Newman II. The shareholders approved and ratified the form of Indemnification Agreement between the Company and its directors and designated officers.
ITEM 5				Other Information
				(a)			Information required to be disclosed in a Report on Form 8-K, but not reported None
				(b)			Material changes to the procedures by which Security Holders may recommend nominees to the Registrant's Board of Directors None
	ITEM 6				Exhibits
					31(i)    Rule 13a-14(a) Certification of Chief Executive Officer.
					31(ii)    Rule 13a-14(a) Certification of Chief Financial Officer.
					32(i)    Section 1350 Certification of Chief Executive Officer.
					32(ii)    Section 1350 Certification of Chief Financial  Officer.

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Taylor Devices, Inc.

We have reviewed the accompanying condensed consolidated balance sheet of Taylor Devices, Inc. and Subsidiary as of November 30, 2007, the related condensed consolidated statements of income for the three and six months ended November 30, 2007 and November 30, 2006 and cash flows for the six months ended November 30, 2007 and November 30, 2006.  These interim financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with standards of the Public Company Accounting Oversight Board (United States).  A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.  It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole.  Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim condensed consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of May 31, 2007, and the related consolidated statements of income, changes in stockholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated July 19, 2007, we expressed an unqualified opinion on those financial statements.  In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of May 31, 2007 is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.

Lumsden & McCormick, LLP
Buffalo, New York
December 28, 2007

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TAYLOR DEVICES, INC.

Signatures

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TAYLOR DEVICES, INC.
	(Registrant)

 

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