******TAYCO DEVELOPMENTS, INC.****SHAREHOLDERS' NEWSLETTER, SPRING
2004******



**THIS NEWSLETTER IS DIRECTED TO ALL SHAREHOLDERS OF TAYCO
DEVELOPMENTS. WE HOPE THAT IT WILL GENERATE INTEREST IN THE COMPANY, AND PROVIDE
CURRENT FINANCIAL AND PROJECT INFORMATION. COPIES OF THIS NEWSLETTER WILL ALSO
BE CIRCULATED TO SHARE-HOLDERS WHO HAVE SHARES IN BROKERAGE
ACCOUNTS.**

**ITEM: FINANCIAL RESULTS**

Tayco Developments continues to have a reasonably good financial performance,
despite continued reduced levels of Government-funded research contracts.
Royalty income is increased from the prior year, due to the product mix at our
affiliate, Taylor Devices, using an increased level of technology patented by
Tayco. Results for the third quarter and nine months periods of F/Y 2004 are as
follows:



|**THIRD QUARTER**      | **F/Y 03-04** | **F/Y 02-03**
|---------------------- | ------------- | -------------
|**REVENUES**           | **$137,059**  | **$128,528** 
|**NET INCOME**         | **$36,586**   | **$55,554**  
|**EARNINGS PER SHARE** | **4¢**        | **6¢**       
|                       |               |              
|**NINE MONTHS**        | **F/Y 03-04** | **F/Y 02-03**
|**REVENUES**           | **$443,165**  | **$382,375** 
|**NET INCOME**         | **$73,542**   | **$241,091** 
|**EARNINGS PER SHARE** | **7¢**        | **24¢**      
|                       |               |              
|**SHARES OUTSTANDING** | **987,928**   | **990,213**  



**ITEM: NAVY ORDER FOR SEATING SYSTEM**

Tayco's patented seating system for the military continues to
enjoy good success. Taylor Devices has recently received a production order for
Tayco's patented Shock Isolator to be used on all seats of the U.S. Navy Mk V
Special Operations Boats. These boats, measuring 82 feet in length and 18 feet
in width are used predominantly by the U.S. Navy SEALS for combat operations.
Although the SEALS do not publish much about their missions, the Company has
been advised that Mk V Boats with Tayco's Seat Isolators have been involved in
numerous activities in the Middle East.

Other branches of the military are evaluating the Seat
Isolators for various combat platforms.



**ITEM: ADDITIONAL FUNDING FOR NASA
PROGRAMS**

Tayco is presently involved in two projects for NASA. One is an
upgrade on the existing Space Shuttles to incorporate isolated cargo modules in
the Shuttles' payload bays. The second relates to protecting large rooms at the
Kennedy Space Center's Shuttle Launch Complex against the air blast shock and
vibration which occurs during Shuttle lift-off.

NASA has recently added additional funding to both of these
projects with Taylor Devices slated to produce the actual hardware. Tayco's
personnel are performing computer analysis on the isolation systems, and will
participate in testing.



**ITEM: TAYCO PERSONNEL AT ARMY LIVE-FIRE
TESTS**

Last year's Annual Report showed photos of some of the gun
recoil systems Tayco has conceived, developed and tested for military
applications. Recently, Taylor Devices received a development contract from the
U.S. Army to develop an improved recoil system for a large gunnery system used
by land-based forces. The analysis of the gun and determination of operating
characteristics for the shock absorber was done by Tayco, with prototype units
manufactured by Taylor Devices. Because the Army wanted to go directly into
live-fire testing, to save time they requested that one set of shock absorbers
be built in accord with the analysis and two other sets be built both softer and
stiffer than the baseline.

The initial round of testing took place at an Army test site, a
large Western U.S. base, because the new weapon has a very long range. Tayco and
Taylor engineers were present at the testing to assess performance and change
shock absorbers as necessary. As it turned out, the baseline setting predicted
by the computer analysis was near-perfect. Many rounds of various charge weights
and power were tested, with no anomalies noted.

The program for the Recoil Shock Absorbers is now moving into a
full environmental qualification prior to authorization to begin on actual
volume production.

**ITEM: MAGAZINE FEATURES TAYCO'S SEATING SHOCK
ISOLATORS**

Our work with the U.S. Military on optimized seating systems
does not allow for very much publicity. All releases and documents have to be
approved at multiple levels before publication. With the current actions in the
Middle East and elsewhere, getting technical articles approved has been
difficult.

The internal Government publication "Special Operations
Technology" has recently published a feature article relating to Tayco's
accomplishments in the seat isolation field. In an article entitled "No Shock
Sherlock," the byline reads "Navy, Research Firm Accelerate Shock Mitigation
Efforts for Special-Ops Boats." The release outlines the efforts by the Naval
Special Warfare Command, the U.S. Navy SEAL teams, the seat manufacturer, and
Tayco to radically improve seat performance on a tight budget with severe time
constraints.

As expected, very little data is presented on the exact
improvements received, only that the boats without the Tayco Shock Isolators
transmit forces of up to 20 g to the crew. This can be compared to the
measurement of a boxer's "knock-out punch" at 6-8 g. The article states that to
"address the problem as quickly as possible," the Navy is replacing all existing
seats in the Mark V Special Operations Boat with the modified seat using the
Tayco Shock Isolators, as produced by Taylor Devices.

The Navy concludes the discussion by stating "As shock is
absorbed by the hull of the boat, it is then absorbed by the shock absorber
built into the seat itself. This reduces the amount of g-forces in a vertical
axis, which consequently protects the guy's bodies from absorbing the shock."
"Passive shock absorption is a very simple, inexpensive, fairly bulletproof and
proven concept for absorbing shock."

We note that among the Navy SEALS the term "fairly bulletproof"
can probably be taken literally!

By: s/Douglas P. Taylor
                                                                         
Douglas P. Taylor
                                                                         
President