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.
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.
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CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
NET SALES, COST OF SALES, GROSS PROFIT BY SEGMENT (UNAUDITED)
nm - not meaningful
CONSOLIDATED STATEMENTS OF CASH FLOWS
Reconciliation of EBITDA to Net (Loss) Income
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:
(1) Includes amortization of debt issue costs.
SOURCE: TechPrecision Corp
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