TechPrecision Corporation Reports Fourth Quarter and Fiscal Year 2023 Financial Results

About this update from Techprecision Corporation

Ranor and Stadco segments drive revenue growth WESTMINSTER, MA / ACCESSWIRE / June 15, 2023 / TechPrecision Corporation (NASDAQ:TPCS) ("TechPrecision" or "the Company"), an industry-leading manufacturer of precision, large-scale fabricated and machined metal components and tested systems with customers in the defense and precision industrial sectors, today reported financial results for the fourth quarter and fiscal year 2023 ended March 31, 2023 . "Fiscal year 2023 consolidated net sales were $31.4 million , or $9.1 million and 41% higher when compared to $22.3 million in fiscal 2022," stated Alexander Shen , TechPrecision's Chief Executive Officer. "Our Ranor segment reported strong financial results with net sales of $19.2 million and gross profit of $7.0 million . Our Stadco subsidiary reported net sales of $12.2 million but incurred negative gross profit for the fiscal year." "Fiscal year 2023 was a challenging period with the Stadco manufacturing rebuild," Mr. Shen continued. "New projects with associated startup activities presented certain production issues and intermittent equipment down-time that resulted in unfavorable throughput and under-absorbed overhead. We expect a gradual improvement in gross margin as current and new projects progress with less equipment down-time in future periods. Total consolidated backlog remained strong at $44.0 million as of March 31, 2023 . We expect to deliver that backlog over the course of the next one to three fiscal years with revenue growth and gross margin expansion." The following summary compares the three and twelve months ended March 31, 2023 to the same prior year periods: Consolidated Financial Results - Fiscal 2023 Three Months Ended March 31, 2023 Net sales were $7.5 million , compared with net sales of $7.6 million in the same period a year ago. Cost of sales were $6.7 million , or $0.2 million and 4% higher, due primarily to higher unabsorbed overhead. Gross profit was $0.8 million , or $0.3 million lower when compared to the same quarter last year. Gross margin percentage was also lower primarily due to unabsorbed overhead at Stadco . SG&A was $1.6 million , a year-over-year increase of 12% or $0.2 million . Operating loss widened to $0.7 million , compared to operating loss of $0.3 million in the same quarter a year ago. Consolidated Financial Results - Fiscal 2023 Twelve Months Ended March 31, 2023 Net sales were $31.4 million , an increase of $9.1 million or 41% when compared to fiscal 2022. A favorable project mix of repeat business at Ranor plus a full year of business activity at Stadco drove growth. Cost of sales were $26.5 million , or 40% higher, due primarily to the increase at Stadco . Gross profit was $4.9 million , or 45% higher when compared to the same period last year. Gross profit at Ranor more than doubled on a 32% revenue increase but was partially offset by losses at Stadco . Gross margin percentage was 15.6%, or just slightly above the prior year period. SG&A was $6.0 million , an increase of $1.1 million , primarily due to the added Stadco SG&A. The same period a year ago only included 31 weeks of business activity at Stadco . Operating loss narrowed to $1.1 million from operating loss of $1.6 million in the same period a year ago. Financial Position On March 31, 2023 , TechPrecision had $0.5 million in cash and cash equivalents, a decrease since March 31, 2022 . Working capital was $5.6 million at March 31, 2023 compared to $2.8 million at March 31, 2022 as we extended the Ranor term loan for an additional five years in December and converted a significant current liability to long-term. Total debt at March 31, 2023 and March 31, 2022 was $6.1 million and $7.4 million , respectively. About TechPrecision Corporation TechPrecision Corporation , through its wholly owned subsidiaries, Ranor, Inc. and Stadco , manufactures large-scale, metal fabricated and machined precision components and equipment. These products are used in a variety of markets including: defense, aerospace, nuclear, industrial, and medical. TechPrecision's goal is to be an end-to-end service provider to its customers by furnishing customized solutions for completed products requiring custom fabrication and machining, assembly, inspection and testing. To learn more about the Company, please visit the corporate website at http://www.techprecision.com . Information on the Company's website or any other website does not constitute a part of this press release. Safe Harbor Statement This release contains certain "forward-looking statements" relating to the business of the Company and its subsidiary companies. All statements other than statements of current or historical fact contained in this press release, including statements that express our intentions, plans, objectives, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "prospects," "will," "should," "would" and similar expressions, as they relate to us, are intended to identify forward-looking statements. These statements are based on current expectations, estimates and projections made by management about our business, our industry and other conditions affecting our financial condition, results of operations or business prospects. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in, or implied by, the forward-looking statements due to numerous risks and uncertainties. Factors that could cause such outcomes and results to differ include, but are not limited to, risks and uncertainties arising from: our reliance on individual purchase orders, rather than long-term contracts, to generate revenue; our ability to balance the composition of our revenues and effectively control operating expenses; external factors that may be outside our control, including health emergencies, like epidemics or pandemics, the Russia - Ukraine conflict, price inflation, interest rate increases and supply chain inefficiencies; the availability of appropriate financing facilities impacting our operations, financial condition and/or liquidity; our ability to receive contract awards through competitive bidding processes; our ability to maintain standards to enable us to manufacture products to exacting specifications; our ability to enter new markets for our services; our reliance on a small number of customers for a significant percentage of our business; competitive pressures in the markets we serve; changes in the availability or cost of raw materials and energy for our production facilities; restrictions in our ability to operate our business due to our outstanding indebtedness; government regulations and requirements; pricing and business development difficulties; changes in government spending on national defense; our ability to make acquisitions and successfully integrate those acquisitions with our business; our failure to maintain effective internal controls over financial reporting; general industry and market conditions and growth rates; unexpected costs, charges or expenses resulting from the recently completed acquisition of Stadco ; and other risks discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website ( www.sec.gov ). Any forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this press release, except as required by applicable law. Investors should evaluate any statements made by us in light of these important factors. -- Tables Follow -- TECHPRECISION CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31 , 2023 March 31 , 2022 ASSETS Current assets: Cash and cash equivalents $ 534,474 $ 1,052,139 Accounts receivable 2,336,481 3,009,249 Contract assets 8,947,811 8,350,231 Raw materials 1,692,852 874,538 Work-in-process 719,736 1,360,137 Other current assets 348,983 1,421,459 Total current assets 14,580,337 16,067,753 Property, plant and equipment, net 13,914,024 13,153,165 Right of use asset, net 5,660,938 6,383,615 Deferred income taxes 1,931,186 2,126,770 Other noncurrent assets, net 121,256 121,256 Total assets $ 36,207,741 $ 37,852,559 LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable $ 2,224,320 $ 3,426,921 Accrued expenses 2,533,185 3,435,866 Contract liabilities 2,333,591 1,765,319 Current portion of long-term lease liability 711,727 593,808 Current portion of long-term debt 1,218,162 4,093,079 Total current liabilities 9,020,985 13,314,993 Long-term debt, net 4,749,139 3,114,936 Long-term lease liability 5,143,974 5,853,791 Other noncurrent liabilities 2,699,492 305,071 Total liabilities 21,613,590 22,588,791 Stockholders' Equity: Common stock - par value $.0001 per share, 50,000,000 shares authorized, sharesissued and outstanding: March 31, 2023 - 8,613,408; March 31, 2022 - 8,576,625 861 858 Additional paid in capital 14,949,729 14,640,343 Retained earnings (accumulated deficit) (356,439 ) 622,567 Total stockholders' equity 14,594,151 15,263,768 Total liabilities and stockholders' equity $ 36,207,741 $ 37,852,559 TECHPRECISION CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) Three Months Ended March 31 , Twelve Months Ended March 31 , 2023 2022 2023 2022 Net sales $ 7,505,265 $ 7,561,531 $ 31,431,614 $ 22,282,495 Cost of sales 6,657,381 6,426,407 26,527,953 18,905,938 Gross profit 847,884 1,135,124 4,903,661 3,376,557 Selling, general and administrative 1,581,987 1,407,907 6,008,881 4,938,086 Loss from operations (734,103 ) (272,783 ) (1,105,220 ) (1,561,529 ) Other income (expense) 252 (41,775 ) 40,842 (28,385 ) Interest expense (94,630 ) (87,881 ) (355,608 ) (269,375 ) Refundable employee retention tax credits 12,519 -- 636,564 -- PPP loan forgiveness -- -- -- 1,317,100 Total other (expense) income (81,859 ) (129,656 ) 321,798 1,019,340 Loss before income taxes (815,962 ) (402,439 ) (783,422 ) (542,189 ) Income tax provision (benefit) 186,798 193,394 195,584 (192,355 ) Net loss $ (1,002,760 ) $ (595,833 ) $ (979,006 ) $ (349,834 ) Other comprehensive loss: Foreign currency translation adjustments $ -- $ (20,739 ) $ -- $ (1,909 ) Foreign currency translation reclassification $ -- $ -- $ -- $ (19,929 ) Other comprehensive loss $ -- $ (20,739 ) $ -- $ (21,838 ) Comprehensive loss $ (1,002,760 ) $ (616,572 ) $ (979,006 ) $ (371,672 ) Net loss per share basic $ (0.12 ) $ (0.07 ) $ (0.11 ) $ (0.04 ) Net loss per share diluted $ (0.12 ) $ (0.07 ) $ (0.11 ) $ (0.04 ) Weighted average shares outstanding - basic 8,611,742 8,575,367 8,595,992 8,095,058 Weighted average shares outstanding - diluted 8,611,742 8,575,367 8,595,992 8,095,058 TECHPRECISION CORPORATION NET SALES , COST OF SALES, GROSS PROFIT BY SEGMENT (UNAUDITED) Three months ended March 31, 2023 March 31, 2022 Changes Percent of Percent of (dollars in thousands) Amount Net sales Amount Net sales Amount Percent Net Sales Ranor $ 4,786 64 % $ 4,839 64 % $ (53 ) (1 )% Stadco 2,719 36 % 2,776 37 % (57 ) (2 )% Intersegment elimination -- -- % (54 ) (1 )% 54 100 % Consolidated Net Sales $ 7,505 100 % $ 7,561 100 % $ (56 ) (1 )% Cost of sales Ranor $ 3,356 45 % $ 3,261 43 % $ 95 3 % Stadco 3,301 44 % 3,219 43 % 82 3 % Inter-segment elimination -- (54 ) (1 )% 54 100 % Consolidated Cost of Sales $ 6,657 89 % $ 6,426 85 % $ 231 4 % Gross profit Ranor $ 1,430 19 % $ 1,632 22 % $ (202 ) (12 )% Stadco (582 ) (8 )% (497 ) (7 )% (85 ) (17 )% Consolidated Gross Profit $ 848 11 % $ 1,135 15 % $ (287 ) (25 )% Twelve months ended March 31, 2023 March 31, 2022 Changes Percent of Percent of (dollars in thousands) Amount Net sales Amount Net sales Amount Percent Net Sales Ranor $ 19,182 61 % $ 14,581 65 % $ 4,601 32 % Stadco 12,250 39 % 7,756 35 % 4,494 58 % Intersegment elimination -- -- % (54 ) - % 54 100 % Consolidated Net sales $ 31,432 100 % $ 22,283 100 % $ 9,149 41 % Cost of Sales Ranor $ 12,205 39 % $ 11,131 50 % $ 1,074 10 % Stadco 14,323 45 % 7,775 35 % 6,548 84 % Consolidated Cost of Sales $ 26,528 84 % $ 18,906 85 % $ 7,622 40 % Gross Profit Ranor $ 6,977 22 % $ 3,450 15 % $ 3,527 102 % Stadco (2,073 ) (6 )% (73 ) -- % (2,000 ) nm% Consolidated Gross Profit $ 4,904 16 % $ 3,377 15 % $ 1,527 45 % nm - not meaningful TECHPRECISION CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED Years Ended March 31 , 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (979,006 ) $ (349,834 ) Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 2,217,472 1,460,439 Amortization of debt issue costs 59,916 48,251 Gain on disposal of equipment (468 ) - Stock based compensation expense 253,079 190,754 Change in contract loss provision (237,318 ) (223,111 ) Deferred income taxes 195,584 (192,355 ) PPP loan forgiveness -- (1,317,100 ) Stock based expense for contingent consideration 56,310 Change in fair value for contingent consideration (63,436 ) 50,454 Changes in operating assets and liabilities: Accounts receivable 672,768 (842,943 ) Contract assets (597,580 ) 1,012,783 Work-in-process and raw materials (177,914 ) (42,491 ) Other current assets 1,072,476 354,993 Other noncurrent liabilities 2,394,420 (50,633 ) Accounts payable (1,202,601 ) 245,743 Accrued expenses (1,094,137 ) (1,477,552 ) Contract liabilities 568,273 1,390,441 Net cash provided by operating activities 3,137,838 257,839 CASH FLOWS FROM INVESTING ACTIVITIES Business acquisition, net of cash acquired -- (7,795,810 ) Purchases of property, plant, and equipment (2,325,301 ) (939,004 ) Proceeds from sale of fixed assets 7,000 - Net cash used in investing activities (2,318,301 ) (8,734,814 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from term loan -- 4,000,000 Closing costs related to common stock sale -- (335,418 ) Proceeds from sale of common stock -- 3,523,000 Proceeds from revolver loan 10,885,150 4,612,002 Repayment of revolver loan (11,522,152 ) (3,325,000 ) Debt issuance costs (57,723 ) (169,884 ) Principal payments for leases (36,572 ) (508,806 ) Repayment of long-term debt (605,905 ) (397,490 ) Net cash (used in) provided by financing activities (1,337,202 ) 7,398,404 Net decrease in cash and cash equivalents (517,665 ) (1,078,571 ) Cash and cash equivalents, beginning of period 1,052,139 2,130,711 Cash and cash equivalents, end of period $ 534,474 $ 1,052,139 TECHPRECISION CORPORATION SUPPLEMENTAL INFORMATION Reconciliation of EBITDA to Net Loss (UNAUDITED) The following table provides a reconciliation of EBITDA to net loss, the most directly comparable U.S. GAAP measure reported in our condensed consolidated financial statements for the following periods: Three Months ended March 31 , Twelve Months ended March 31 , (dollars in thousands) 2023 2022 Change 2023 2022 Change Net loss $ (1,003 ) $ (596 ) $ (407 ) $ (979 ) $ (350 ) $ (629 ) Income tax expense (benefit) 187 193 (6 ) 196 (192 ) 388 Interest expense (1) 95 88 7 356 269 87 Depreciation and amortization 551 447 104 2,217 1,460 757 EBITDA $ (170 ) $ 132 $ (302 ) $ 1,790 $ 1,187 $ 603 (1) Includes amortization of debt issue costs. Company Contact: Investor Relations Contact: Mr. Thomas Sammons Hayden IR Chief Financial Officer Brett Maas TechPrecision Corporation Phone: 646-536-7331 Phone: 978-883-5109 Email: [email protected] Email: [email protected] Website: www.haydenir.com Website: www.techprecision.com SOURCE: TechPrecision Corp. View source version on accesswire.com : https://www.accesswire.com/761544/TechPrecision-Corporation-Reports-Fourth-Quarter-and-Fiscal-Year-2023-Financial-Results

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