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
- Net sales were $3.1 million or 15% lower when compared to $3.6 million in the same quarter a year ago.
- Gross profit was $0.4 million, down from $1.1 million in the same quarter last year.
- SG&A was $741,000 or $10,000 lower than the same quarter last year.
- Operating loss was $327,000 compared to operating income of $344,000 in the same period a year ago.
Six Months of Fiscal 2020 Financial Results
- Net sales were $7.4 million or 4% lower when compared to $7.7 million in the same period a year ago.
- Gross profit was $1.5 million, down 29% when compared to the same period last year.
- SG&A was $1.5 million, unchanged from the same period last year.
- Operating income was $41,000 compared to operating income of $666,000 in the same period a year ago.
- Net income (loss) was $0.4 million lower when compared to the same period a year ago.
- EBITDA was $0.6 million lower when compared to the same period a year ago.
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
|
826,841 | 1,010,443 | ||||||
|
Contract assets
|
3,589,021 | 4,390,832 | ||||||
|
Inventories
|
1,902,965 | 1,240,315 | ||||||
|
Other current assets
|
619,833 | 498,059 | ||||||
|
Total current assets
|
9,493,172 | 9,176,295 | ||||||
|
Property, plant and equipment, net
|
4,492,123 | 4,860,609 | ||||||
|
Deferred income taxes
|
2,021,704 | 2,004,346 | ||||||
|
Other noncurrent assets, net
|
10,263 | 6,233 | ||||||
|
Total assets
|
$ | 16,017,262 | $ | 16,047,483 | ||||
|
|
||||||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY:
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable
|
$ | 783,393 | $ | 609,082 | ||||
|
Accrued expenses
|
859,585 | 753,499 | ||||||
|
Contract liabilities
|
816,385 | 740,947 | ||||||
|
Current portion of long-term debt
|
853,888 | 822,105 | ||||||
|
Total current liabilities
|
3,313,251 | 2,925,633 | ||||||
|
Long-term debt
|
2,994,835 | 3,410,542 | ||||||
|
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
|
2,925 | 2,923 | ||||||
|
Additional paid in capital
|
8,761,554 | 8,693,106 | ||||||
|
Accumulated other comprehensive income
|
21,602 | 21,940 | ||||||
|
Retained earnings
|
923,095 | 993,339 | ||||||
|
Total stockholders' equity
|
9,709,176 | 9,711,308 | ||||||
|
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,
|
||||||||||||||
|
|
2019 | 2018 | 2019 | 2018 | ||||||||||||
|
Net sales
|
$ | 3,074,076 | $ | 3,621,185 | $ | 7,408,344 | $ | 7,720,008 | ||||||||
|
Cost of sales
|
2,660,558 | 2,526,085 | 5,885,325 | 5,572,384 | ||||||||||||
|
Gross profit
|
413,518 | 1,095,100 | 1,523,019 | 2,147,624 | ||||||||||||
|
Selling, general and administrative
|
740,967 | 751,037 | 1,482,380 | 1,481,502 | ||||||||||||
|
(Loss) income from operations
|
(327,449 | ) | 344,063 | 40,639 | 666,122 | |||||||||||
|
Other income
|
1,448 | 4,275 | 20,878 | 7,015 | ||||||||||||
|
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
|
29,254,594 | 28,824,593 | 29,254,048 | 28,824,593 | ||||||||||||
|
Diluted
|
29,254,594 | 30,150,485 | 29,254,048 | 30,054,055 | ||||||||||||
TECHPRECISION CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
|
|
Six Months Ended September 30, | |||||||
|
|
2019 | 2018 | ||||||
|
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
|
380,030 | 372,060 | ||||||
|
Amortization of debt issue costs
|
20,770 | 29,846 | ||||||
|
Stock based compensation expense
|
61,250 | 96,518 | ||||||
|
Change in contract loss provision
|
186,603 | 15,255 | ||||||
|
Deferred income taxes
|
(17,358 | ) | 142,403 | |||||
|
Changes in operating assets and liabilities:
|
||||||||
|
Accounts receivable
|
183,602 | 629,238 | ||||||
|
Contract assets
|
801,811 | (1,142,803 | ) | |||||
|
Inventories
|
(662,650 | ) | (3,501,075 | ) | ||||
|
Other current assets
|
(121,774 | ) | 19,924 | |||||
|
Accounts payable
|
174,311 | 685,733 | ||||||
|
Accrued expenses
|
(73,954 | ) | 121,343 | |||||
|
Contract liabilities
|
75,438 | 1,503,079 | ||||||
|
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
|
299 | 978 | ||||||
|
Net increase (decrease) in cash and cash equivalents
|
517,866 | (1,287,872 | ) | |||||
|
Cash and cash equivalents, beginning of period
|
2,036,646 | 2,689,110 | ||||||
|
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)
|
149 | 186 | (37 | ) | ||||||||
|
Depreciation
|
380 | 372 | 8 | |||||||||
|
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: [email protected]
Website: www.techprecision.com
Investor Relations Contact:
Hayden IR
Brett Maas
Phone: 646-536-7331
Email: [email protected]
Website: www.haydenir.com
SOURCE: TechPrecision Corporation