SOURCE: TechPrecision Corporation

TechPrecision Corporation

August 15, 2016 16:05 ET

TechPrecision Corporation Reports Fifth Consecutive Profitable Quarter

Net Income More Than Doubles Year-Over-Year on 6% Revenue Increase

WESTMINSTER, MA--(Marketwired - Aug 15, 2016) - 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 first quarter period of fiscal year 2017, the period ended June 30, 2016.

First Quarter Recap
"This was another quarter of operational and financial progress as we delivered a profit for our fifth consecutive quarter," stated Alexander Shen, TechPrecision's Chief Executive Officer. "We more than doubled net income on a 6% increase in sales, as we continue to benefit from our consistent sharp focus on productivity initiatives and top line growth with key customers. This progress has enabled us to refinance our equipment loan with a new lender, part of an ongoing effort to improve our balance sheet. As a result, we reported $2.9 million in cash and $1.9 million in working capital at June 30, 2016, both significantly improved compared to March 31, 2016 levels." 

"Moving forward, we intend to maintain the sharp focus that led us to this point of our recovery," continued Mr. Shen. "We continue to replenish our backlog, focusing on new business contracts with our core customers which utilize our core competencies in custom, large scale, high precision fabrication and machining, and leverage our established expertise, certifications, and qualifications in the defense, nuclear, and precision industrial sectors."

"Our backlog at July 31, 2016 was approximately $20.2 million, compared to $17.1 million and $19.8 million at June 30, 2016 and March 31, 2016, respectively," added Mr. Shen. "We have not altered our focus. We target defense, nuclear and precision industrial as our primary markets."

First Quarter of Fiscal 2017 Financial Results

  • Net sales were $4.6 million or a 6% increase when compared to the same quarter a year ago. 
  • Gross profit was $1.5 million compared to $1.3 million in the same quarter last year. Gross margins improved in the first quarter of fiscal 2017 due to a higher margin product mix. 
  • Net income of $445,000 increased significantly compared to a net income of $206,000 in the same quarter a year ago.

Balance Sheet Summary
On April 26, 2016, the Company, through its wholly owned subsidiary Ranor, Inc., executed and closed a Master Loan and Security Agreement, or MLSA, with People's Capital and Leasing Corp. People's agreed to loan $3.0 million at a fixed rate of 7.90% per annum to Ranor and loan proceeds were disbursed to Ranor on April 26, 2016. In connection with the MLSA, $2.7 million of the proceeds from the People's Loan were disbursed to Utica Leaseco, LLC as payment in full for principal and interest under the Utica equipment loan. The fixed rate under the MLSA is approximately 290 basis points lower than the rate on the Utica equipment loan it replaced. Under the terms of the MLSA, we will decrease our principal and interest payments over the next three fiscal years by more than $300,000 per year.

At June 30, 2016, TechPrecision had working capital of $1.9 million compared to working capital of $0.5 million at March 31, 2016. The Company had $2.9 million in cash at June 30, 2016 compared to $1.3 million at March 31, 2016.

Teleconference Information
The Company will hold a conference call at 4:30 p.m. Eastern (U.S.) time on August 15, 2016. To participate in the live conference call, please dial 1-866-635-0172 five to 10 minutes prior to the scheduled conference call time. International callers should dial 1-785-424-1629. When prompted, reference Conference ID: TECH.

A replay will be available until September 15, 2016. To access the replay, dial 1-877-481-4010 or 1-919-882-2331. When prompted, enter Conference Passcode 10069.

The call will also be available live by webcast at TechPrecision Corporation's website, www.techprecision.com, and will also be available over the Internet and accessible at http://www.investorcalendar.com/IC/CEPage.asp?ID=175230.

About TechPrecision Corporation
TechPrecision Corporation, through its wholly owned subsidiaries, Ranor, Inc. and Wuxi Critical Mechanical Components Co., Ltd., 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 and integrated "turn-key" 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. These forward looking statements are often identified by the use of forward-looking terminology such as "believes," expects" or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the availability of appropriate financing facilities, the Company's ability to receive contract awards through competitive bidding processes, the Company's ability to maintain standards to enable it to manufacture products to exacting specifications, the Company's ability to enter new markets for its services, market and customer acceptance of the Company's products, the Company's reliance on a small number of customers for a significant percentage of its business, competition, government regulations and requirements, pricing and development difficulties, the Company's ability to make acquisitions and successfully integrate those acquisitions with its 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 (the "SEC") and available on the SEC's website (www.sec.gov). All forward-looking statements attributable to the Company or to persons acting on its behalf are expressly qualified in their entirety by these factors. Any forward-looking statements speak only as of the date on which they are made, and the Company undertakes 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.

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 

 
TECHPRECISION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
    June 30,
2016
    March 31,
2016
 
ASSETS            
Current assets:            
  Cash   $ 2,858,278     $ 1,332,166  
  Accounts receivable, less allowance for doubtful accounts of $0 at June 30, 2016 and March 31, 2016     1,395,905       2,022,480  
  Costs on uncompleted contracts, in excess of progress billings     1,614,437       2,395,642  
  Inventories- raw materials     139,915       128,595  
  Other current assets     541,425       530,808  
Total current assets     6,549,960       6,409,691  
Property, plant and equipment, net     4,638,134       4,814,184  
Deferred income taxes     684,270       684,270  
Other noncurrent assets, net     123,900       176,344  
Total assets   $ 11,996,264     $ 12,084,489  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY:                
Current liabilities:                
  Accounts payable   $ 617,919     $ 996,065  
  Accrued expenses     1,670,250       1,804,485  
  Income taxes payable     18,485       9,032  
  Advanced claims payment     507,835       507,835  
  Billings on uncompleted contracts, in excess of related costs     1,221,050       1,629,018  
  Current portion of long-term debt     577,336       953,106  
Total current liabilities     4,612,875       5,899,541  
Long-term debt, net     4,482,724       3,735,410  
Deferred income taxes     684,270       684,270  
Noncurrent accrued expenses     32,258       37,097  
Stockholders' Equity:                
  Common stock - par value $.0001 per share, 90,000,000 shares authorized,                
  27,324,593 shares issued and outstanding at June 30, 2016,                
  and 27,324,593 shares issued and outstanding at March 31, 2016     2,732       2,732  
  Additional paid in capital     7,106,354       7,094,749  
  Accumulated other comprehensive income     20,626       21,568  
  Accumulated deficit     (4,945,575 )     (5,390,878 )
Total stockholders' equity     2,184,137       1,728,171  
Total liabilities and stockholders' equity   $ 11,996,264     $ 12,084,489  
 
 
 
TECHPRECISION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
 
    Three Months Ended June 30,
    2016     2015  
Net sales   $ 4,644,805     $ 4,374,975  
Cost of sales     3,109,412       3,092,116  
Gross profit     1,535,393       1,282,859  
Selling, general and administrative     888,178       804,207  
Income from operations     647,215       478,652  
  Other income (expense)     746       (189 )
  Interest expense     (193,210 )     (272,122 )
  Interest income     5       10  
Total other expense, net     (192,459 )     (272,301 )
Income before income taxes     454,756       206,351  
Income tax expense     9,453       --  
Net income   $ 445,303     $ 206,351  
Other comprehensive loss, before tax:                
  Foreign currency translation adjustments     (942 )     (61 )
Other comprehensive loss, before tax     (942 )     (61 )
  Income tax expense on other comprehensive loss items     --       --  
Comprehensive income, net of tax   $ 444,361     $ 206,290  
Net income per share (basic)   $ 0.02     $ 0.01  
Net income per share (diluted)   $ 0.02     $ 0.01  
Weighted average number of shares outstanding (basic)     27,324,593       24,867,019  
Weighted average number of shares outstanding (diluted)     27,711,919       24,867,019  
 
 
 
TECHPRECISION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
    Three Months Ended June 30,  
    2016     2015  
CASH FLOWS FROM OPERATING ACTIVITIES            
Net income   $ 445,303     $ 206,351  
Adjustments to reconcile net income to net cash provided by operating activities:                
Depreciation     176,050       197,228  
Amortization of debt issue costs     48,918       79,689  
Stock based compensation expense     11,605       13,957  
Provision for contract losses     (35,069 )     20,371  
Changes in operating assets and liabilities:                
Accounts receivable     626,575       4,724  
Costs on uncompleted contracts, in excess of progress billings     781,205       207,755  
Inventories - raw materials     (11,320 )     (959 )
Other current assets     172,780       11,078  
Other noncurrent assets     52,444       --  
Accounts payable     (378,146 )     (386,285 )
Accrued expenses     (105,465 )     14,520  
Accrued taxes     9,453       --  
Advanced claims payment     --       507,835  
Billings on uncompleted contracts, in excess of related costs     (407,968 )     (496,955 )
  Net cash provided by operating activities     1,386,365       379,309  
                 
CASH FLOWS FROM INVESTING ACTIVITIES                
Purchases of property, plant and equipment     --       (17,600 )
  Net cash used in investing activities     --       (17,600 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
Deferred loan costs     (144,338 )     --  
Borrowings of long-term debt     2,828,885       --  
Repayment of long-term debt     (2,544,685 )     (233,349 )
  Net cash provided by (used in) financing activities     139,862       (233,349 )
Effect of exchange rate on cash     (115 )     75  
Net increase in cash     1,526,112       128,435  
Cash, beginning of period   $ 1,332,166     $ 1,336,325  
Cash, end of period   $ 2,858,278     $ 1,464,760  

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