CENTER VALLEY, Pa., Nov. 14, 2013 /PRNewswire/ -- TechPrecision Corporation (OTC Bulletin Board: TPCS) ("TechPrecision" or "the Company"), an industry leading global manufacturer of precision, large-scale fabricated and machined metal components and tested systems with customers in the naval/maritime, energy and precision industrial sectors, today reported financial results for the second quarter and first six month period of fiscal year 2014, the periods ended September 30, 2013.
Financial Summary
-- Second quarter fiscal 2014 revenues were $5.2 million, reflecting a decrease of $2.9 million or 36% from $8.1 million reported for the second quarter last year -- Selling, general and administrative expenses for the second quarter of fiscal 2014 decreased by 23% or $0.4 million to $1.5 million from $1.9 million in the same quarter last year. Sequentially, SG&A expenses decreased by 16% from $1.8 million for the quarter ended June 30, 2013 -- Net loss for the second quarter of fiscal 2014 was ($0.8) million compared to a net loss of approximately ($45,000) in second quarter of last year -- Revenues for the first six months of fiscal 2014 were $12.3 million reflecting a decrease of $2.9 million or 19% compared to $15.2 million for the first six months of the prior year -- Selling, general and administrative expenses for the first half of fiscal 2014 decreased by 17% or $0.7 million to $3.2 million from $3.9 million in the same quarter last year. -- Net loss for the first half of fiscal 2014 was ($2.2) million compared to a net loss of ($751,000) for the first half of the prior fiscal year
"This was a challenging quarter for us, as legacy issues continued to impact our operations, customer order mix and our financial results," commented Len Anthony, TechPrecision's Executive Chairman. "Our entire management team is working to put these legacy issues and associated contract losses behind us. We remain upbeat about the potential inherent opportunities in each of the verticals we serve, and quotation activity remains high. We are optimistic that we will eliminate the drag on earnings from contract losses in the near term, and see more normalized production volumes and margins as we move into calendar 2014. Subsequent to the end of the quarter, we received an $8.1 million purchase order for volume production of sapphire chambers for an existing customer, and this order will help fill existing capacity at our Ranor facility."
"Our cost reduction initiatives are already producing results," continued Mr. Anthony. "Sequentially, SG&A expenses decreased 16%. We continue to target profitability by the end of the fiscal year, positioning us for a significantly improved fiscal 2015."
Second Quarter 2014 Results
For the three months ended September 30, 2013, sales decreased 36% or $2.9 million to $5.2 million from $8.1 million in the year-ago period and decreased $1.9 million or 27% sequentially from $7.1 million in the first fiscal quarter of 2014. Gross margin was 14.0%, or $0.7 million gross profit, in the second fiscal quarter of 2014 compared to a gross margin of 24.0%, or $1.9 million gross profit, in the same period last year. This sequentially compares with a gross profit of $0.4 million and 5.9% gross margin for the quarter ended June 30, 2013. Gross margin in any reporting period is impacted by the mix of services we provide on projects completed within that period. Selling, general and administrative expenses for the quarter ended September 30, 2013 were $1.5 million as compared to $1.9 million for the quarter ended September 30, 2012. Sequentially, selling general and administrative costs were 16% or $286,000 lower than selling, general and administrative expense reported for the quarter ended June 30, 2013.
Net loss was $(0.8) million or ($0.04) per basic and fully diluted share for the quarter ended September 30, 2013 as compared to a net loss of ($45,000) or ($0.00) per basic and fully diluted share for the quarter ended September 30, 2012.
Six Months Year-to-Date Financial Results
For the six months ended September 30, 2013, revenue decreased $2.9 million or 19% to $12.3 million from $15.2 million for the same period last year. Revenues from the Company's China subsidiary were $0.2 million during the first six months of fiscal 2014 compared with $1.6 million for the first half of last year. Gross margin for the first half of fiscal 2014 was $1.1 million or 9% compared to gross margin of $3.0 million or 20% for the first half of the prior year. Gross profit for the six months ended September 30, 2013 was lower due contract losses of $1.5 million recognized during the period. Selling, general and administrative expenses for first half fiscal 2014 were $3.2 million as compared to $3.9 million for the same period in 2012, reflecting a decrease of $670,000 or 17% over the previous year. Net loss was ($2.2) million or ($0.11) per share basic and fully diluted for the year-to-date period as compared to a net loss of ($751,000) or ($0.04) per share basic and fully diluted share for the same six month period last year.
The Company completed the first half of fiscal 2014 with a backlog of $17.5 million compared to a backlog of $16.4 million at March 31, 2013 and $26.1 million at September 30, 2012. The Company's backlog at September 30, 2012 included $1.9 million of orders for production from its China subsidiary while its backlog at September 30, 2013 included only $0.8 million for production from its China subsidiary. On November 13, 2013, the Company received an $8.1 million purchase order for the production of sapphire furnaces with deliveries scheduled through the first half of calendar year 2014.
Balance Sheet
At September 30, 2013, TechPrecision had working capital of $1.6 million as compared with working capital of $3.1 million at March 31, 2013, a decrease of $1.5 million. Cash used by operations was ($0.62) million for the six months ended September 30, 2013 as compared to cash provided by operations of $78,000 for the six months ended September 30, 2012. As of September 30, 2013, the Company had $1.53 million in cash and cash equivalents, down $1.54 million compared to the balance at March 31, 2013. Stockholders' equity decreased 19% to $8.2 million compared to $10.1 million at March 31, 2013.
Teleconference Information
The Company will hold a conference call at 4:30 p.m. Eastern (U.S.) time on November 14, 2013. To participate in the live conference call, please dial 1-888-846-5003 five to 10 minutes prior to the scheduled conference call time. International callers should dial 1-480-629-9856. When prompted by the operator, mention Conference Passcode 4649186.
A replay will be available for one week starting on Thursday, November 14, 2013, at 7:30 p.m. Eastern Time. To access the replay, dial 1-877-870-5176 or 1-858-384-5517. When prompted, enter Conference Passcode 4649186.
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://public.viavid.com/index.php?id=106805.
About TechPrecision Corporation
TechPrecision Corporation, through its wholly owned subsidiaries, Ranor, Inc., and Wuxi Critical Mechanical Components Co., Ltd., globally manufactures large-scale, metal fabricated and machined precision components and equipment. These products are used in a variety of markets including: alternative energy (Solar and Wind), medical, nuclear, defense, industrial, and aerospace to name a few. TechPrecision's goal is to be an end-to-end global 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 recurring operating losses and the availability of appropriate financing facilities impacting our ability to continue as a going concern, our ability to change the composition of our revenues and effectively reduce operating expenses, the Company's ability to generate business from long-term contracts rather than individual purchase orders, its dependence upon a limited number of customers, its ability to successfully bid on projects, 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). All forward-looking statements attributable to the Company or to persons acting on its behalf are expressly qualified in their entirety by these factors other than as required under the securities laws. The Company does not assume a duty to update these forward-looking statements.
-- Financial tables follow --
TECHPRECISION CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) September March 31, 30, 2013 2013 ---------- ---------- ASSETS Current assets: Cash and cash equivalents $1,532,026 $3,075,376 Accounts receivable, less allowance for doubtful accounts of $25,010 in 2013 and 2012 2,690,517 4,330,637 Costs incurred on uncompleted contracts, in excess of progress billings 5,064,036 4,298,293 Inventories- raw materials 355,168 354,516 Income taxes receivable 374,030 374,030 Current deferred taxes 255,765 255,765 Other current assets 1,388,393 1,578,484 --------- --------- Total current assets 11,659,935 14,267,101 Property, plant and equipment, net 6,907,282 7,300,248 --------- --------- Total assets $18,567,217 $21,567,349 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable $1,247,729 $2,537,060 Contract loss provision 1,697,975 270,172 Accrued expenses 803,961 1,604,752 Accrued taxes payable 232,624 232,624 Deferred revenues 677,907 253,813 Short-term debt -- 500,000 Current maturity of long-term debt 5,418,227 5,784,479 --------- --------- Total current liabilities 10,078,423 11,182,900 Long-term debt, including capital leases 43,532 31,108 Noncurrent deferred taxes 255,765 255,765 Stockholders' Equity: Preferred stock- par value Stock, with September 30, $.0001 per 5,532,998 2013 and March share, shares issued 31, 2013) 10,000,000 and outstanding shares at September authorized, of 30, 2013 and which 9,890,980 March 31, 2013, are designated (liquidation as Series A preference of Preferred 1,310,206 1,310,206 Common stock -par value September 30, $.0001 per 2013 and March share, 31, 2013 authorized, 90,000,000 shares issued and outstanding, 19,956,871 shares at 1,996 1,996 Additional paid in capital 5,290,840 5,076,552 Accumulated other comprehensive loss (101,210) (221,418) Retained earnings 1,687,665 3,930,240 --------- --------- Total stockholders' equity 8,189,497 10,097,576 --------- ---------- Total liabilities and stockholders' equity $18,567,217 $21,567,349 ========= =========
TECHPRECISION CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended Six months ended September 30 September 30 ------------ ------------ 2013 2012 2013 2012 ---- ---- ---- ---- Net sales $5,195,795 $8,078,552 $12,292,487 $15,224,291 Cost of sales 4,468,523 6,140,187 11,144,972 12,180,487 --------- --------- ---------- ---------- Gross profit 727,272 1,938,365 1,147,515 3,043,804 Selling, general and administrative 1,484,487 1,924,079 3,254,569 3,924,599 --------- --------- --------- --------- (Loss) income from operations (757,215) 14,286 (2,107,054) (880,795) -------- ------ ---------- -------- Other income, expense 6,985 2,558 (567) 2,511 Interest expense (67,646) (74,394) (137,773) (154,485) Interest income (794) 1,188 2,819 2,881 ---- ----- ----- ----- Total other expense, net (61,455) (70,648) (135,521) (149,093) ------- ------- -------- -------- Loss before income taxes (818,670) (56,362) (2,242,575) (1,029,888) Income tax benefit -- (11,342) -- (278,599) --- ------- --- -------- Net loss $(818,670) $(45,020) $(2,242,575) $(751,289) ========= ======== ========== ========= Net loss per share (basic) $(0.04) $(0.00) $(0.11) $(0.04) Net loss per share (diluted) $(0.04) $(0.00) $(0.11) $(0.04) Weighted average number of shares outstanding (basic) 19,956,871 18,696,846 19,956,871 18,614,112 Weighted average number of shares outstanding (diluted) 19,956,871 18,696,846 19,956,871 18,614,112
TECHPRECISION CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended September 30, ----------------- 2013 2012 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(2,242,575) $(751,289) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization 478,902 415,429 Stock based compensation expense 214,287 282,719 Deferred income taxes -- (282,020) Provision for contract losses 1,427,803 83,196 Changes in operating assets and liabilities: Accounts receivable 1,644,073 219,289 Costs incurred on uncompleted contracts, in excess of progress billings (765,743) (948,192) Inventories - raw materials 1,283 (202,361) Other current assets 180,499 61,199 Taxes receivable -- 553,070 Other noncurrent assets -- 88,126 Accounts payable (1,295,237) 664,632 Accrued expenses (682,920) (1,036,974) Deferred revenues 423,547 931,453 ------- ------- Net cash (used in) provided by operating activities (616,081) 78,277 -------- ------ CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant and equipment (53,941) (75,109) ------- ------- Net cash used in investing activities (53,941) (75,109) ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES Repayment of debt (875,278) (683,928) -------- -------- Net cash used in financing activities (875,278) (683,928) -------- -------- Effect of exchange rate on cash and cash equivalents 1,950 (3,969) ----- ------ Net decrease in cash and cash equivalents (1,543,350) (684,729) ---------- -------- Cash and cash equivalents, beginning of period 3,075,376 2,823,485 --------- --------- Cash and cash equivalents, end of period $1,532,026 $2,138,756 ========== ==========
Company Contact: Investor Relations Contact: Mr. Richard F. Fitzgerald Hayden IR Chief Financial Officer Brett Maas TechPrecision Corporation Phone: 1-646-536-7331 Tel: 1-484-693-1702 Email: brett@haydenir.com Email: Fitzgeraldr@techprecision.com Website: www.haydenir.com Website: www.techprecision.com
SOURCE TechPrecision Corporation