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TechPrecision Corporation Reports Second Quarter Financial Results

November 13, 2019
Sales Order Backlog up 30% since March 31, 2019 WESTMINSTER, MA / ACCESSWIRE / November 13, 2019 / TechPrecision Corporation (OTCQB:TPCS) ("TechPrecision" or "the Company"), an industry leading manufacturer of precision, large-scale fabricated ...
Sales Order Backlog up 30% since March 31, 2019 WESTMINSTER, MA / ACCESSWIRE / November 13, 2019 / TechPrecision Corporation (OTCQB:TPCS) ("TechPrecision" or "the Company"), an industry leading manufacturer of precision, large-scale fabricated ...

Sales Order Backlog up 30% since March 31, 2019

WESTMINSTER, MA / ACCESSWIRE / November 13, 2019 / 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 second quarter and six months ended September 30, 2019.

“Our results for the second quarter were impacted by increased costs associated with a loss provision for certain projects in progress, and under-absorbed factory overhead incurred as we start up on new projects,” stated Alexander Shen, TechPrecision’s Chief Executive Officer. “However, with all of the new projects coming online in the second quarter, we expect to return to profitability during the second half of fiscal 2020.”

The first six months of fiscal 2020 were highlighted by a $3.8 million increase in our sales order backlog to $16.4 million compared to March 31, 2019, a result of booking approximately $11 million of additional orders over the period. In addition, the Company generated $0.9 million of cash from operations in the six months ended September 30, 2019. New project startup activity during the second quarter should provide sequential revenue improvement over the final two quarters of fiscal 2020.

Second Quarter of Fiscal 2020 Financial Results

Six Months of Fiscal 2020 Financial Results

Financial Position

At September 30, 2019, TechPrecision had $2.6 million in cash, and working capital of $6.2 million compared to $2.0 million in cash and 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 November 13, 2019. 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 December 13, 2019. To access the replay, dial 1-877-481-4010 or 1-919-882-2331. When prompted, enter Conference Passcode 56570. The call will also be available over the Internet at https://www.investornetwork.com/event/presentation/56570.

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)

September 30,

2019

March 31,

2019

ASSETS

Current assets:

Cash and cash equivalents

$2,554,512$2,036,646

Accounts receivable, net

826,8411,010,443

Contract assets

3,589,0214,390,832

Inventories

1,902,9651,240,315

Other current assets

619,833498,059

Total current assets

9,493,1729,176,295

Property, plant and equipment, net

4,492,1234,860,609

Deferred income taxes

2,021,7042,004,346

Other noncurrent assets, net

10,2636,233

Total assets

$16,017,262$16,047,483

LIABILITIES AND STOCKHOLDERS' EQUITY:

Current liabilities:

Accounts payable

$783,393$609,082

Accrued expenses

859,585753,499

Contract liabilities

816,385740,947

Current portion of long-term debt

853,888822,105

Total current liabilities

3,313,2512,925,633

Long-term debt

2,994,8353,410,542

Stockholders' Equity:

Common stock - par value $.0001 per share, 90,000,000 shares authorized,

29,254,594 and 29,234,594 shares issued and outstanding,

at September 30, 2019 and March 31, 2019

2,9252,923

Additional paid in capital

8,761,5548,693,106

Accumulated other comprehensive income

21,60221,940

Retained earnings

923,095993,339

Total stockholders' equity

9,709,1769,711,308

Total liabilities and stockholders' equity

$16,017,262$16,047,483

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

Three Months Ended

September 30,

Six Months Ended

September 30,

2019201820192018

Net sales

$3,074,076$3,621,185$7,408,344$7,720,008

Cost of sales

2,660,5582,526,0855,885,3255,572,384

Gross profit

413,5181,095,1001,523,0192,147,624

Selling, general and administrative

740,967751,0371,482,3801,481,502

(Loss) income from operations

(327,449)344,06340,639666,122

Other income

1,4484,27520,8787,015

Interest expense

(72,596)(90,249)(149,119)(185,634)

Total other expense, net

(71,148)(85,974)(128,241)(178,619)

(Loss) income before income taxes

(398,597)258,089(87,602)487,503

Income tax (benefit) expense

(107,576)77,374(17,358)142,403

Net (loss) income

$(291,021)$180,715$(70,244)$345,100

Other comprehensive (loss) income, before tax:

Foreign currency translation adjustments

$(159)$(509)$(338)$(2,420)

Other comprehensive (loss) income, net of tax

$(159)$(509)$(338)$(2,420)

Comprehensive (loss) income

$(291,180)$180,206$(70,582)$342,680

Net (loss) income per share basic

$(0.01)$0.01$(0.00)$0.01

Net (loss) income per share diluted

$(0.01)$0.01$(0.00)$0.01

Weighted average number of shares outstanding: Basic

29,254,59428,824,59329,254,04828,824,593

Diluted

29,254,59430,150,48529,254,04830,054,055

TECHPRECISION CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Six Months Ended September 30,
20192018

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) income

$(70,244)$345,100

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation

380,030372,060

Amortization of debt issue costs

20,77029,846

Stock based compensation expense

61,25096,518

Change in contract loss provision

186,60315,255

Deferred income taxes

(17,358)142,403

Changes in operating assets and liabilities:

Accounts receivable

183,602629,238

Contract assets

801,811(1,142,803)

Inventories

(662,650)(3,501,075)

Other current assets

(121,774)19,924

Accounts payable

174,311685,733

Accrued expenses

(73,954)121,343

Contract liabilities

75,4381,503,079

Net cash provided by (used in) operating activities

937,835(683,379)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property, plant and equipment

(11,544)(228,148)

Net cash used in investing activities

(11,544)(228,148)

CASH FLOWS FROM FINANCING ACTIVITIES

Deferred loan costs

(5,835)--

Repayment of long-term debt

(402,889)(377,323)

Net cash used in financing activities

(408,724)(377,323)

Effect of exchange rate on cash and cash equivalents

299978

Net increase (decrease) in cash and cash equivalents

517,866(1,287,872)

Cash and cash equivalents, beginning of period

2,036,6462,689,110

Cash and cash equivalents, end of period

$2,554,512$1,401,238

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:

(dollars in thousands)

Six months ended September 30,

2019

Six months ended September 30,

2018

Change

Amount

Net (loss) income

$(70)$345$(415)

Income tax (benefit) expense

(17)142(159)

Interest expense (1)

149186(37)

Depreciation

3803728

EBITDA

$442$1,045$(603)

(1) Includes amortization of debt issue costs.

Company Contact:

Mr. Thomas Sammons

Chief Financial Officer

TechPrecision Corporation

Phone: 978-883-5109

Email:

Website: www.techprecision.com

Investor Relations Contact:

Hayden IR

Brett Maas

Phone: 646-536-7331

Email:

Website: www.haydenir.com

SOURCE: TechPrecision Corporation

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