Sat, 29 Feb 2020

Backlog reaches $17 million; highest level in over three years

WESTMINSTER, MA / ACCESSWIRE / February 13, 2020 / TechPrecision Corporation (OTCQB: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, energy and precision industrial sectors, today reported financial results for the third quarter and nine months ended December 31, 2019.

'Our results for the third quarter were negatively impacted by learning-curve related cost overruns that resulted in negative margins and increased loss provisions on a limited number of new projects,' stated Alexander Shen, TechPrecision's Chief Executive Officer. 'These new projects are an opportunity to demonstrate technical excellence in custom know-how of complex fabrication and complex machining, and represent a definite entry point into new business prospects. We expect improved margins going forward as these projects approach completion, costs stabilize, and additional profitable projects come on-line.'

'The Company's sales order backlog reached its highest level in over three years increasing to $17.0 million at December 31, 2019 as approximately $15.3 million of additional orders were booked over the first nine months of fiscal 2020,' stated Mr. Shen. 'We continue to replenish backlog and we believe this will provide for a steady revenue stream and profitable margins in fiscal 2021.'

In January 2020, the Company used $1.1 million from available cash and repaid in full the capital equipment obligation with Peoples Capital. This payment reduced our total debt obligations to $2.6 million at January 17, 2020 from $3.7 million at December 31, 2019, and facilitated increasing our revolving line of credit with Berkshire Bank from $1 million to $3 million.

'The debt repayment reduces our cash outflow and expense for debt principal and interest payments in future periods,' added Mr. Shen, 'while providing increased borrowing capacity and financial flexibility.'

Third Quarter of Fiscal 2020 Financial Results

  • Net sales were $3.7 million or 14% lower when compared to $4.3 million in the same quarter a year ago.
  • Cost of sales were 2% higher than the prior year, impacted by a $0.3 million charge for loss contracts.
  • Gross profit was $0.3 million, down from $1.0 million in the same quarter last year.
  • Operating loss was $348,000 compared to operating income of $339,000 in the same period a year ago.

Nine Months of Fiscal 2020 Financial Results

  • Net sales were $11.1 million or 8% lower when compared to $12.0 million in the same period a year ago.
  • Cost of sales were 4% higher than the prior year, impacted by $0.8 million charge for loss contracts this fiscal year.
  • Gross profit was $1.8 million, down 41% when compared to the same period last year.
  • Operating loss was $0.3 million compared to operating income of $1.0 million in the same period a year ago.
  • Net loss was $0.4 for the nine months ended December 31, 2019, compared to net income of $0.6 million for the nine months ended December 31, 2018.
  • EBITDA was $0.3 million for the nine months ended December 31, 2019, $1.3 million lower when compared to the same period a year ago.

Financial Position

At December 31, 2019, TechPrecision had $2.0 million in cash and cash equivalents. Working capital was $5.4 million compared to working capital of $6.3 million at March 31, 2019.

Teleconference Information

The Company will hold a conference call at 4:30 p.m. Eastern (U.S.) time on February 13, 2020. To participate in the live conference call, please dial 1-844-407-9500 five to 10 minutes prior to the scheduled conference call time. International callers should dial 1-862-298-0850. When prompted, reference TechPrecision.

A replay will be available until March 13, 2020. To access the replay, dial 1-877-481-4010 or 1-919-882-2331. When prompted, enter Conference Passcode 58362. The call will also be available over the Internet and accessible at https://www.webcaster4.com/Webcast/Page/2198/33008.

About TechPrecision Corporation

TechPrecision Corporation, through its wholly owned subsidiary, Ranor, Inc., 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,' '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; 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; operating in a single geographic location; 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; general industry and market conditions and growth rates; general economic conditions; 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)

TECHPRECISION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(unaudited)

TECHPRECISION CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

TECHPRECISION CORPORATION
SUPPLEMENTAL INFORMATION
Reconciliation of EBITDA to Net Income

The following table provides a reconciliation of EBITDA to net (loss) income, the most directly comparable U.S. GAAP measure reported in our condensed consolidated financial statements:

  1. Includes amortization of debt issue costs.

Company Contact:

Mr. Thomas Sammons
Chief Financial Officer
TechPrecision Corporation
Phone: 978-883-5109
Email: sammonst@ranor.com
Website: www.techprecision.com

Investor Relations Contact:

Hayden IR
Brett Maas
Phone: 646-536-7331
Email: brett@haydenir.com
Website: www.haydenir.com

SOURCE: TechPrecision Corporation



View source version on accesswire.com:
https://www.accesswire.com/576333/TechPrecision-Corporation-Reports-Third-Quarter-Financial-Results

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