TechPrecision Corporation Reports Second Quarter 2024 Financial Results

About this update from Techprecision Corporation

Backlog at $45 million , Customer confidence remains high WESTMINISTER, MA / ACCESSWIRE / November 20, 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 second quarter of fiscal year 2024. "Customer confidence remains high, driving a strong backlog of $44.6 million as of September 30, 2023 ," stated Alexander Shen , TechPrecision's Chief Executive Officer. "Second quarter consolidated net sales were $8.0 million when compared to $8.5 million in the fiscal 2023 second quarter, or 6% lower" " Ranor reported net sales of $4.5 million or a 9% decrease from the second quarter of fiscal 2023. Our Stadco subsidiary reported net sales of $3.6 million or 1% higher than the same period a year ago. Stadco gross profit improved, reporting a loss of $9,000 in the second quarter of fiscal 2024. On a consolidated basis, we had a net loss of $528,000 ." "Second quarter net sales for Stadco were flat when compared with the same period a year ago," Mr. Shen continued. "Our losses have narrowed year over year. We expect to deliver our backlog over the course of the next one to three fiscal years with revenue growth and gross margin expansion."With revenue growth, we expect improvement in gross profit and gross margin in future periods. The following summary compares the three and six months ended September 30, 2023 to the same prior year period: Consolidated Financial Results - Fiscal 2024 Three Months Ended September 30, 2023 Net sales were $8.0 million , a decrease of 6% when compared to the same period in fiscal 2023. Net sales decreased at Ranor by 9% and at Stadco after intersegment elimination by 3%, respectively, on a different proportionate project mix. Cost of sales were $6.9 million , or 2% higher, due primarily to higher manufacturing costs at Ranor , from a less favorable project mix. The Ranor increase was offset in part by lower cost of sales and better throughput at Stadco . Gross profit was $1.0 million , or 41% lower when compared to the same period last year. Gross profit decreased at Ranor on a less favorable project mix. Losses at Stadco narrowed year over year on improved overall margins on projects, partially offset by increased underabsorbed factory overhead. SG&A was $1.6 million , a decrease of 11%, primarily due to cost reductions at Stadco . Operating loss was $0.6 million compared to $0.1 million in the same period a year ago. Net loss was $0.06 per share. Consolidated Financial Results - Fiscal 2024 Six Months Ended September 30, 2023 Net sales were $15.3 million , a decrease of 2% when compared to the same period in fiscal 2023. Net sales at Stadco after intersegment elimination increased by 7% on a more favorable project mix and net sales at Ranor decreased by 7% year over year on a less favorable project mix. Cost of sales were $13.6 million , or 4% higher, due primarily to higher manufacturing costs at Ranor , from a less favorable project mix, offset in part by better throughput and lower cost of sales at Stadco . Gross profit was $1.7 million , or 32% lower when compared to the same period last year. Gross profit decreased at Ranor on a less favorable project mix. Losses at Stadco narrowed on improved project margins. SG&A was $2.9 million , a decrease of 9% compared to the same period last year, due to cost reductions at Stadco . Operating loss was $1.2 million compared to $0.6 million in the same period a year ago. Net loss was $0.12 per share. Financial Position On September 30, 2023 , TechPrecision had $0.1 million in cash and cash equivalents, a decrease since March 31, 2023 . Working capital was negative at September 30, 2023 as the Company reclassified all of its long-term debt to current because of a debt covenant violation. Working capital was $5.6 million at March 31, 2023 as the Company borrowed more under its revolving line of credit. Total debt at September 30, 2023 and March 31, 2023 was $7.1 million and $6.1 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, 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. -- Tables Follow - TECHPRECISION CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) September 30 , March 31 , 2023 2023 ASSETS Current assets: Cash and cash equivalents $ 138,206 $ 534,474 Accounts receivable, net 3,020,723 2,336,481 Contract assets 8,096,608 8,947,811 Raw materials 1,925,085 1,692,852 Work-in-process 866,848 719,736 Other current assets 466,245 348,983 Total current assets 14,513,715 14,580,337 Property, plant and equipment, net 15,764,677 13,914,024 Right-of-use asset, net 5,322,118 5,660,938 Deferred income taxes 2,254,314 1,931,186 Other noncurrent assets, net 121,256 121,256 Total assets $ 37,976,080 $ 36,207,741 LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable $ 1,607,001 $ 2,224,320 Accrued expenses 2,785,839 2,533,185 Contract liabilities 3,180,681 2,333,591 Current portion of long-term lease liability 721,623 711,727 Current portion of long-term debt, net 6,958,395 1,218,162 Total current liabilities 15,253,539 9,020,985 Long-term debt, net -- 4,749,139 Long-term lease liability 4,780,155 5,143,974 Other noncurrent liability 4,428,812 2,699,492 Total liabilities 24,462,506 21,613,590 Stockholders' Equity: Common stock - par value $.0001 per share, shares authorized: 50,000,000; Shares issued and outstanding: 8,737,432 at September 30, 2023 and 8,613,408 at March 31, 2023 874 861 Additional paid in capital 14,924,927 14,949,729 Accumulated deficit (1,412,227 ) (356,439 ) Total stockholders' equity 13,513,574 14,594,151 Total liabilities and stockholders' equity $ 37,976,080 $ 36,207,741 TECHPRECISION CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended September 30 , Six Months Ended September 30 , 2023 2022 2023 2022 Net sales $ 7,970,086 $ 8,522,647 $ 15,341,326 $ 15,599,004 Cost of sales 6,935,271 6,782,975 13,612,362 13,042,114 Gross profit 1,034,815 1,739,672 1,728,964 2,556,890 Selling, general and administrative 1,632,168 1,827,095 2,906,117 3,202,322 Loss from operations (597,353 ) (87,423 ) (1,177,153 ) (645,432 ) Other income 40,875 73,561 40,876 40,336 Interest expense (148,553 ) (83,730 ) (242,639 ) (167,375 ) Refundable employee retention tax credits -- 624,045 -- 624,045 Total other (expense) income (107,678 ) 613,876 (201,763 ) 497,006 (Loss) income before income taxes (705,031 ) 526,453 (1,378,916 ) (148,426 ) Income tax (benefit) expense (176,698 ) 135,509 (323,128 ) (38,205 ) Net (loss) income $ (528,333 ) $ 390,944 $ (1,055,788 ) $ (110,221 ) Net (loss) earnings per share basic $ (0.06 ) $ 0.05 $ (0.12 ) $ (0.01 ) Net (loss) earnings per share diluted $ (0.06 ) $ 0.04 $ (0.12 ) $ (0.01 ) Weighted average shares outstanding - basic 8,720,603 8,584,510 8,667,298 8,580,707 Weighted average shares outstanding - diluted 8,720,603 8,998,195 8,667,298 8,580,707 TECHPRECISION CORPORATION NET SALES , COST OF SALES, GROSS PROFIT BY SEGMENT (UNAUDITED) September 30, 2023 September 30, 2022 Changes (dollars in thousands) Amount Percent of Net sales Amount Percent of Net sales Amount Percent Net sales Ranor $ 4,495 55 % $ 4,934 58 % $ (439 ) (9 )% Stadco 3,606 45 % 3,589 42 % 17 1 % Intersegment elimination (131 ) -- % -- -- % (131 ) nm % Consolidated Net sales $ 7,970 100 % $ 8,523 100 % $ (553 ) (6 )% Cost of sales Ranor $ 3,320 42 % $ 2,907 34 % $ 413 14 % Stadco 3,615 45 % 3,876 46 % (261 ) (7 )% Consolidated Cost of sales $ 6,935 87 % $ 6,783 80 % $ 152 2 % Gross profit (loss) Ranor $ 1,044 13 % $ 2,027 23 % $ (983 ) (48 )% Stadco (9 ) -- % (287 ) (3 )% 278 97 % Consolidated Gross profit $ 1,035 13 % $ 1,740 20 % $ (705 ) (41 )% September 30, 2023 September 30, 2022 Changes (dollars in thousands) Amount Percent of Net sales Amount Percent of Net sales Amount Percent Net sales Ranor $ 8,995 59 % $ 9,660 62 % $ (665 ) (7 )% Stadco 6,573 43 % 5,939 38 % 634 11 % Intersegment elimination (227 ) (2 )% -- % (227 ) nm % Consolidated Net sales $ 15,341 100 % $ 15,599 100 % $ (258 ) (2 )% Cost of sales Ranor $ 6,443 42 % $ 5,793 37 % $ 650 11 % Stadco 7,169 46 % 7,249 47 % (80 ) (1 )% Consolidated Cost of sales $ 13,612 88 % $ 13,042 84 % $ 570 4 % Gross profit (loss) Ranor $ 2,325 15 % $ 3,867 24 % $ (1,542 ) (39 )% Stadco (596 ) (4 )% (1,310 ) (8 )% 714 55 % Consolidated Gross profit $ 1,729 11 % $ 2,557 16 % $ (828 ) (32 )% nm - not meaningful TECHPRECISION CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended September 30 , 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (1,055,788 ) $ (110,221 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 1,128,059 1,116,602 Amortization of debt issue costs 37,475 26,747 Stock-based compensation expense 9,224 298,957 Change in contract loss provision (43,049 ) (26,628 ) Deferred income taxes (323,128 ) (38,205 ) Gain on disposal of fixed assets (40,399 ) -- Change in fair value for contingent consideration -- 63,436 Changes in operating assets and liabilities: Accounts receivable (684,242 ) 968,829 Contract assets 851,203 (869,853 ) Work-in-process and raw materials (379,345 ) (281,929 ) Other current assets (117,262 ) 411,770 Accounts payable (617,319 ) 272,554 Accrued expenses (84,182 ) (1,243,082 ) Contract liabilities 847,090 41,086 Other noncurrent liabilities 1,729,320 993,203 Net cash provided by operating activities 1,257,657 1,623,266 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from insurance claim on fixed assets 61,944 -- Fixed asset deposit -- (574,143 ) Purchases of property, plant and equipment (2,658,937 ) (499,341 ) Net cash used in investing activities (2,596,993 ) (1,073,484 ) CASH FLOWS FROM FINANCING ACTIVITIES: Debt issue costs -- (18,862 ) Revolver loan payments and borrowings, net 1,250,000 (1,012,002 ) Payments of principal for leases (10,552 ) (25,820 ) Repayments of long-term debt (296,380 ) (309,853 ) Net cash provided by (used in) financing activities 943,068 (1,366,537 ) Net decrease in cash and cash equivalents (396,268 ) (816,755 ) Cash and cash equivalents, beginning of period 534,474 1,052,139 Cash and cash equivalents, end of period $ 138,206 $ 235,384 TECHPRECISION CORPORATION SUPPLEMENTAL INFORMATION Reconciliation of EBITDA to Net (Loss) Income (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 September 30 , Six Months ended September 30 , (dollars in thousands) 2023 2022 Change 2023 2022 Change Net (loss) income $ (528 ) $ 391 $ (919 ) $ (1,056 ) $ (110 ) $ (945 ) Income tax (benefit) expense (177 ) 136 (313 ) (323 ) (38 ) (285 ) Interest expense (1) 149 84 65 243 167 75 Depreciation and amortization 568 532 36 1,128 1,117 11 EBITDA $ 12 $ 1,143 $ (1,131 ) $ (8 ) $ 1,136 $ (1,144 ) (1) Includes amortization of debt issue costs. 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 SOURCE: TechPrecision Corp View source version on accesswire.com : https://www.accesswire.com/807270/techprecision-corporation-reports-second-quarter-2024-financial-results

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