TechPrecision Corporation Reports FY 2024 Fourth Quarter and Year End Financial Results

About this update from Techprecision Corporation

Backlog increased to $50 million , Customer confidence remains high WESTMINSTER, MA / ACCESSWIRE / September 16, 2024 / 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 ended March 31, 2024 . Due to restrictions as to what we can speak about while the Q1FY25 financials are pending, we will not hold a press conference until those are filed. We do not have a set date, but now that FY24 10K has been filed, we are focusing all resources on finishing that as quickly as possible. We are working hard to have that filed as soon as practicable. We also expect shortly to have an update pertaining to our efforts to fill in the financial staffing areas that have caused these problems so they do not reoccur. "Customer confidence remains high as our backlog was $50.0 million at March 31, 2024 ," Mr. Shen continued. "We expect to deliver our backlog over the course of the next one to three fiscal years with gross margin expansion." "Fourth quarter consolidated net sales were $8.6 million or 15% higher when compared to $7.5 million in the fiscal 2023 fourth quarter," stated Alexander Shen , TechPrecision's Chief Executive Officer. "The fourth quarter net sales were bolstered by better throughput with Stadco customer projects, as Stadco posted net sales of $4.6 million , or a 70% increase over the same period a year ago. Gross margin also expanded at Stadco in the fourth quarter. For the full fiscal year 2024, consolidated net sales and gross profit were $31.6 million and $4.1 million , respectively." "In the Fourth Quarter, due to our inability to close the Votaw Precision Manufacturing transaction, we recognized substantial one-time cash expenses totaling approximately $1.9 million . We also recognized in the quarter one-time non-cash expenses of $1.1 arising from the termination payment we made to Votaw. These sums fell directly to our bottom line for the fourth quarter and year end." The following summary compares the three and twelve months ended March 31, 2024 to the same prior year period: Consolidated Financial Results - Fiscal 2024 Three Months Ended March 31, 2024 · Net sales were $8.6 million , a or 15% higher compared to the same period in fiscal 2023, primarily on better throughput and increased revenue at Stadco . · Cost of sales were $7.4 million , or 11% higher, due primarily to higher volume at Stadco · Gross profit was $1.2 million , or 45% higher, primarily a result of improved throughput at Stadco . · SG&A totaled $3.7 million , due primarily to a $1.1 million breakup fee accrued in connection with the terminated Votaw acquisition and other related outside advisory costs. · Operating loss was $2.5 million compared to operating loss of $0.7 million in the same period a year ago. · Interest expense increased by $41,000 due to increased borrowing and higher interest rates under the revolver loan. Amortization of debt issue costs increased by $33,000 . Consolidated Financial Results - Fiscal 2024 Twelve Months Ended March 31, 2024 · Net sales were $31.6 million , or 1% higher when compared to the same period in fiscal 2023, on a different proportionate product mix. Stadco revenue increased $2.3 million or 19% versus the same period a year ago. · Cost of sales were $27.5 million , or 4% higher, primarily due to underapplied overhead at Ranor . · Gross profit was $4.1 million , or 16% lower, primarily due to lower revenue and volume at Ranor . · SG&A increased by $2.7 million or 46% compared to the same period last year, primarily for due diligence costs of $1.9 million and a breakup fee of $1.1 million in connection with the terminated Votaw acquisition. Compensation and other office costs decreased by $0.3 million . · Operating loss was $4.6 million compared to operating loss of $1.1 million in the same period a year ago. · Interest expense increased by $119,000 due to increased borrowing and higher interest rates under the revolver loan. Amortization of debt issue costs increased by $47,000 . Financial Position On March 31, 2024 , the Company had $0.1 million in cash and cash equivalents, a $0.4 million decrease since March 31, 2023 . Working capital was negative $2.9 million at March 31, 2024 as the Company reclassified $7.6 million , or all of its long-term debt, to current liabilities because of a debt covenant violation. Working capital was positive $5.6 million and total debt was $6.1 million at March 31, 2023 . 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, medical, and precision industrial. 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 conflicts in Eastern Europe and the Middle East , 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; 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. Company Contact: Investor Relations Contact: Barbara M. Lilley Hayden IR Chief Financial Officer Brett Maas TechPrecision Corporation Phone: 646-536-7331 Phone: 978-883-5102 Email: [email protected] Email: [email protected] Website: www.haydenir.com Website: www.techprecision.com -- Tables Follow - TECHPRECISION CORPORATION CONSOLIDATED BALANCE SHEETS March 31 , March 31 , 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 138,402 $ 534,474 Accounts receivable, net 2,371,264 2,336,481 Contract assets 8,526,726 8,947,811 Raw materials 1,826,765 1,692,852 Work-in-process 1,422,938 719,736 Other current assets 563,688 348,983 Total current assets 14,849,783 14,580,337 Property, plant and equipment, net 14,797,991 13,914,024 Right of use asset, net 4,977,665 5,660,938 Deferred income taxes -- 1,931,186 Other noncurrent assets 121,256 121,256 Total assets $ 34,746,695 $ 36,207,741 LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable $ 1,408,356 $ 2,224,320 Accrued expenses 4,262,486 2,533,185 Contract liabilities 3,787,933 2,333,591 Current portion of long-term lease liability 735,871 711,727 Current portion of long-term debt, net 7,558,683 1,218,162 Total current liabilities 17,753,329 9,020,985 Long-term debt, net -- 4,749,139 Long-term lease liability 4,408,103 5,143,974 Other noncurrent liability 4,782,372 2,699,492 Total liabilities 26,943,804 21,613,590 Stockholders' Equity: Common stock - par value $.0001 per share, shares authorized: March 31, 2024 - 50,000,000; Shares issued and outstanding: March 31, 2024 - 8,777,432; March 31, 2023 - 8,613,408 878 861 Additional paid in capital 15,200,624 14,949,729 Retained earnings (accumulated deficit) (7,398,611 ) (356,439 ) Total stockholders' equity 7,802,891 14,594,151 Total liabilities and stockholders' equity $ 34,746,695 $ 36,207,741 TECHPRECISION CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended March 31 , Twelve Months Ended March 31 , 2024 2023 2024 2023 Net sales $ 8,600,070 $ 7,505,265 $ 31,591,059 $ 31,431,614 Cost of sales 7,371,662 6,657,381 27,472,883 26,527,953 Gross profit 1,228,408 847,883 4,118,176 4,903,661 Selling, general and administrative 3,687,393 1,581,986 8,750,376 6,008,881 Loss from operations (2,458,985 ) (734,103 ) (4,632,200 ) (1,105,220 ) Other income 2,486 253 43,363 40,842 Interest expense (168,966 ) (94,631 ) (521,108 ) (355,608 ) Refundable employee retention tax credits -- 12,518 -- 636,564 Total other (expense) income (166,480 ) (81,859 ) (477,745 ) 321,798 Loss before income taxes (2,625,465 ) (815,962 ) (5,109,945 ) (783,422 ) Income tax expense 2,495,585 186,798 1,932,227 195,584 Net loss $ (5,121,050 ) $ (1,002,761 ) $ (7,042,172 ) $ (979,006 ) Net loss per share basic $ (0.59 ) $ (0.12 ) $ (0.81 ) $ (0.11 ) Net loss per share diluted $ (0.59 ) $ (0.12 ) $ (0.81 ) $ (0.11 ) Weighted average shares outstanding - basic 8,720,603 8,611,742 8,717,160 8,595,992 Weighted average shares outstanding - diluted 8,720,603 8,611,742 8,717,160 8,595,992 TECHPRECISION CORPORATION NET SALES , COST OF SALES, GROSS PROFIT BY SEGMENT Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Changes (dollars in thousands) Amount Percent of Net sales Amount Percent of Net sales Amount Percent Net sales Ranor $ 4,529 56 % $ 4,786 64 % $ (257 ) (5 )% Stadco 4,625 44 % 2,719 36 % 1,906 70 % Intersegment elimination (554 ) -- % -- -- % (554 ) nm % Consolidated Net sales $ 8,600 100 % $ 7,505 100 % $ 1,095 15 % Cost of sales Ranor $ 3,555 41 % $ 3,356 45 % $ 199 6 % Stadco 3,817 45 % 3,301 44 % 516 16 % Consolidated Cost of sales $ 7,372 86 % $ 6,657 89 % $ 715 11 % Gross profit (loss) Ranor $ 845 10 % $ 1,430 19 % $ (585 ) (18) % Stadco 383 4 % (582 ) (8 )% 965 166 % Consolidated Gross profit $ 1,228 14 % $ 848 11 % $ 380 45 % Twelve Months Ended March 31, 2024 Twelve Months Ended March 31, 2023 Changes (dollars in thousands) Amount Percent of Net sales Amount Percent of Net sales Amount Percent Net sales Ranor $ 17,821 56 % $ 19,182 61 % $ (1,361 ) (7) % Stadco 14,567 46 % 12,250 39 % 2,317 19 % Intersegment elimination (797 ) (2 )% -- -- % (797 ) nm % Consolidated Net sales $ 31,591 100 % $ 31,432 100 % $ 159 1 % Cost of sales Ranor $ 13,048 41 % $ 12,205 39 % $ 843 7 % Stadco 14,425 46 % 14,323 45 % 102 1 % Consolidated Cost of sales $ 27,473 87 % $ 26,528 84 % $ 945 4 % Gross profit (loss) Ranor $ 4,548 14 % $ 6,977 22 % $ (2,429 ) (35) % Stadco (430 ) (1 )% (2,073 ) (6 )% 1,643 79 % Consolidated Gross profit $ 4,118 13 % $ 4,904 16 % $ (786 ) (16) % nm - not meaningful TECHPRECISION CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended March 31 , 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (7,042,172 ) $ (979,006 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 2,429,377 2,217,472 Amortization of debt issue costs 106,840 59,916 Gain on disposal of equipment (39,129 ) (468 ) Stock based compensation and restricted stock awards 284,925 253,079 Change in contract loss provision 190,370 (237,318 ) Deferred income taxes 1,931,186 195,584 Stock based acquisition termination fee 1,116,800 -- Stock based expense for contingent consideration -- 56,310 Change in fair value for contingent consideration -- (63,436 ) Changes in operating assets and liabilities: Accounts receivable (34,783 ) 672,768 Contract assets 421,085 (597,580 ) Work-in-process and raw materials (837,115 ) (177,914 ) Other current assets (214,705 ) 1,072,476 Accounts payable (815,964 ) (1,202,601 ) Accrued expenses 388,116 (1,094,137 ) Contract liabilities 1,454,342 568,273 Other noncurrent liabilities 1,965,691 2,394,420 Net cash provided by operating activities 1,304,864 3,137,838 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant, and equipment (3,230,237 ) (2,325,301 ) Proceeds from fixed assets insurance settlement 61,944 -- Proceeds from sale of fixed assets -- 7,000 Net cash used in investing activities (3,168,293 ) (2,318,301 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from revolver loan 7,160,000 10,885,150 Repayment of revolver loan (5,025,000 ) (11,522,152 ) Debt issuance costs (50,363 ) (57,723 ) Principal payments for leases (17,185 ) (36,572 ) Repayment of long-term debt (600,095 ) (605,905 ) Net cash provided by (used in) financing activities 1,467,357 (1,337,202 ) Net decrease in cash and cash equivalents (396,072 ) (517,665 ) Cash and cash equivalents, beginning of period 534,474 1,052,139 Cash and cash equivalents, end of period $ 138,402 $ 534,474 TECHPRECISION CORPORATION SUPPLEMENTAL INFORMATION Reconciliation of EBITDA to Net Loss The following table provides a reconciliation of EBITDA to net loss, the most directly comparable U.S. GAAP measure reported in our consolidated financial statements for the following periods: Three Months ended March 31 , Twelve Months ended March 31 , (dollars in thousands ) 2024 2023 Change 2024 2023 Change Net loss $ (5,121 ) $ (1,003 ) $ (4,118 ) $ (7,042 ) $ (979 ) $ (6,063 ) Income tax expense 2,496 187 2,309 1,932 196 1,736 Interest expense (1) 169 95 74 521 356 165 Depreciation and amortization 670 551 119 2,429 2,217 212 EBITDA $ (1,786 ) $ (170 ) $ (1,616 ) $ (2,160 ) $ 1,790 $ (3,950 ) (1) Includes amortization of debt issue costs. SOURCE: TechPrecision Corporation View the original press release on accesswire.com

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