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: brett@haydenir.com |
Email: lilleyb@ranor.com |
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, |
|
|
|
|
|||||||||||||||||||
(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
