WESTMINSTER, Mass., Feb. 11 /PRNewswire-FirstCall/ -- TechPrecision
Corporation (OTC:TPCS) (BULLETIN BOARD: TPCS) ("TechPrecision", or
"the Company"), a leading manufacturer of large-scale,
high-precision machined metal fabrications with customers in the
alternative energy, medical, nuclear, defense, aerospace and other
commercial industries, today reported financial results for the
third quarter of fiscal year 2010, the period ended December 31,
2009. Third Quarter of Fiscal 2010 Highlights -- Revenue for the
third quarter totaled $5.2 million, compared to normalized revenue
of $6.2 million in the second quarter (excluding the non-recurring
inventory sale of $8.9 million to GT Solar in August 2009) and $3.3
million during the Company's first quarter of fiscal 2010 -- Gross
profit during the third quarter was $1.0 million, or 19% -- Net
income for the third quarter was $204,697 or $0.01/share, including
a $276,415 tax benefit for the quarter -- TechPrecision's backlog
at the end of the quarter was $15.7 million, increasing to $18.1
million as of the end of January, 2010 -- Completed the quarter
with $13 million in net, working capital and $9.4 million in cash
and cash equivalents -- Subsequent to the end of the quarter,
TechPrecision received orders from GT Solar totaling $3.8 million
to be delivered during the fourth quarter of fiscal 2010 and the
first quarter of fiscal 2011. Third Quarter Results For the three
months ended December 31, 2009, sales decreased to $5.2 million or
39%, from $8.2 million in the third quarter of fiscal 2009. Net
sales were negatively impacted by the global recession and downturn
in the solar industry which affected orders from TechPrecision's
largest customer, GT Solar. Subsequent to the end of the quarter,
GT Solar requested that TechPrecision expand production. Gross
margin was 19%, or $1.0 million, in the third fiscal quarter of
2010 compared to a gross margin of 31%, or $2.6 million, in the
third quarter of fiscal 2009. The gross margin decline was
attributable to costs associated with underutilized capacity and a
project mix with fewer turn key services on completed projects
during the quarter. Total operating expenses for the quarter ended
December 31, 2009 were $990,000 as compared to $539,000 for the
quarter ended December 31, 2008, reflecting an increase in employee
compensation, professional fees, public company expenses,
additional consulting fees and a $235,000 charge for bad debt
expense. Operating income was $24,000 compared to $2.1 million in
the prior year. Net income was $205,000 or $0.01 per share basic
and $0.01 per share diluted for the quarter ended December 31, 2009
as compared to $2.5 million or $0.18 per share basic and $0.09 per
share diluted for the quarter ended December 31, 2008. The Company
completed the quarter with a backlog of $15.7 million, up from
$14.4 million at the end of September 2009. "As expected, the third
quarter was impacted by the slowdown in production from our largest
customer, GT Solar, but we made tangible progress in our effort to
position TechPrecision for long-term, sustainable growth," said Mr.
Louis Winoski, Interim CEO of TechPrecision Corporation. "During
the quarter and in the six weeks since, we have seen steady
improvements throughout the industries we serve and increased
activity, including requests for proposals and expanded sales
activity. Specifically, we have seen increased activity from our
tier one customers in the nuclear industry and we received a $3.8
million dollar order from GT Solar in our alternative energy
market. We are greatly encouraged by our increasing backlog which
stood at $15.7 million at the end of our third fiscal quarter on
December 31, 2009. This was the first seven figure net increase in
three or four quarters and it validates our confidence in improving
market conditions. By the end of January 2010, our backlog had
increased to $18.1 million and by the end of our fiscal year, in
March, we expect the backlog to exceed $20 million." YTD Financial
Results For the nine months ended December 31, 2009, sales
decreased to $23.7 million or 30%, from $33.8 million in the first
nine months of fiscal 2009. A significant portion of the decrease
resulted from lower sales volume with our largest customer, GT
Solar. Also, the global economic downturn adversely impacted our
business during much of the first nine months of fiscal year 2010.
Gross margin was 18%, or $4.2 million, for the first nine months of
fiscal 2010 compared to a gross margin of 33%, or $11 million, in
the comparable period of fiscal 2009. The gross margin decline was
attributable to costs associated with underutilized capacity, the
mix of total services on completed projects, and the lower margin
inventory transfer, completed during August 2009. Total operating
expenses for the nine months ended December 31, 2009 were $2.4
million as compared to $1.7 million for the same period ended
December 31, 2008, reflecting an increase in employee compensation,
professional fees, public company expenses and additional
consulting fees, severance pay, bad debt expense and corporate
travel. Net income was $1.4 million or $0.10 per share basic and
$0.07 per share diluted for the nine months ended December 31, 2009
as compared to $5.1 million or $0.37 per share basic and $0.19 per
share diluted for the nine months ended December 31, 2008. Balance
Sheet At December 31, 2009, TechPrecision had working capital of
$13.0 million as compared with working capital of $11.1 million at
March 31, 2009, an increase of $1.9 million. Cash used in
operations was $1.4 million for the nine months ended December 31,
2009 as compared to cash provided by operations of $4.3 million for
the nine months ended December 31, 2008. The decrease in operating
cash flow was due to the net effect of a decrease in net profits,
decrease in customer advances and payment of accounts payable and
accrued expenses during the nine months ended December 31, 2009. As
of December 31, 2009, the Company had $9.4 million in cash and
equivalents. Stockholders' equity increased to $11.4 million
compared to $10.1 million on March 31, 2009 representing an
increase of $1.3 million. Business Outlook Mr. Winoski added, "We
have spent the last three quarters repositioning the Company to a
point where it can proactively pursue longer term production
programs within the main industries we serve - nuclear, defense,
aerospace, medical device and alternative energy. We have brought
in new senior management and added board members, both with
relevant industry experience. We have added focused, ongoing and
senior level business development activities and right-sized the
operation to function as a leaner manufacturing entity - all while
maintaining profitability during a difficult economy. We expect
that the hard work we have done during that last nine months will
begin to manifest into positive financial results in the current
fiscal quarter and our next fiscal year. We believe we are turning
the corner and building momentum." Teleconference Information The
Company will hold a conference call at 4:30 p.m. Eastern (U.S.)
time on Thursday, February 11, 2010. To participate in the live
conference call, please dial the following number five to ten
minutes prior to the scheduled conference call time:
1-877-407-0784. International callers should dial + 1-201-689-8560.
When prompted by the operator, mention Conference Passcode 344150.
If you are unable to participate in the call at this time, a replay
will be available for one week starting on Thursday, February 11,
2010 at 7:30 p.m. Eastern Time. To access the replay, dial
1-877-660-6853 or 1-201-612-7415, and enter account number 3055 and
conference ID 344150. About TechPrecision Corporation TechPrecision
Corporation, through its wholly-owned subsidiary Ranor, Inc.,
manufactures metal fabricated and machined precision components and
equipment. These products are used in a variety of markets
including: alternative energy, medical, nuclear, defense,
industrial, and aerospace to name a few. 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 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
(http://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 December
31, March 31, 2009 2009 (Unaudited) ----------- ----------- ASSETS
Current assets Cash and cash equivalents $9,374,081 $10,462,737
Accounts receivable, less allowance for doubtful accounts of
$259,999 1,981,052 1,418,830 Costs incurred on uncompleted
contracts, in excess of progress billings 3,782,895 3,660,802
Inventories - raw materials 296,343 351,356 Deferred tax asset
157,392 - Prepaid expenses 824,747 1,583,234 Other receivables
30,000 59,979 ----------- ----------- Total current assets
16,446,510 17,536,938 Property, plant and equipment, net 3,377,286
2,763,434 Equipment under construction - 887,279 Deferred loan
cost, net 91,896 104,666 ----------- ----------- Total assets
$19,915,692 $21,292,317 =========== =========== LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $465,099
$950,681 Accrued expenses 499,129 710,332 Accrued taxes - 155,553
Deferred revenues 1,705,345 3,945,364 Current maturity of long-term
debt 810,511 624,818 ----------- ----------- Total current
liabilities 3,480,084 6,386,748 Long-term debt 5,058,669 4,824,453
STOCKHOLDERS' EQUITY Preferred stock- par value $.0001 per share,
10,000,000 shares authorized, of which 9,890,980 are designated as
Series A Preferred Stock, with 9,661,482 shares issued and
outstanding at December 31, 2009 and 6,295,508 at March 31, 2009
(liquidation preference of $2,753,523 and $1,794,220 at December
31, 2009 and March 31, 2009, respectively.) 2,210,216 2,287,508
Common stock -par value $.0001 per share, authorized, 90,000,000
shares, issued and outstanding, 14,230,846 shares at December 31,
2009 and 13,907,513 at March 31, 2009 1,424 1,392 Paid in capital
2,845,276 2,872,779 Retained earnings 6,320,023 4,919,437
----------- ----------- Total stockholders' equity 11,376,939
10,081,116 ----------- ----------- Total liabilities and
stockholders' equity $19,915,692 $21,292,317 ===========
=========== TECHPRECISION CORPORATION CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited) Three months ended Nine months ended
December 31, December 31, 2009 2008 2009 2008 ---------- ----------
----------- ----------- Net sales $5,255,591 $8,554,978 $23,691,616
$33,814,122 Cost of sales 4,241,102 5,932,505 19,466,554 22,798,518
---------- ---------- ----------- ----------- Gross profit
1,014,489 2,622,473 4,225,062 11,015,604 Operating expenses:
Salaries and related expenses 358,841 330,701 1,083,510 1,087,831
Professional fees 104,132 63,847 290,755 184,316 Selling, general
and administrative 527,133 144,825 1,052,127 433,959 ----------
---------- ----------- ----------- Total operating expenses 990,106
539,373 2,426,392 1,706,106 ---------- ---------- -----------
----------- Income from operations 24,383 2,083,100 1,798,670
9,309,498 Other income (expenses): Other income 12,000 - 12,000 -
Interest expense (108,049) (111,052) (319,601) (344,923) Interest
income 4,205 - 12,575 - Finance costs (4,257) (4,257) (12,770)
(12,770) ---------- ---------- ----------- ----------- Total other
income (expense) (96,101) (115,309) (307,796) (357,693) ----------
---------- ----------- ----------- Income (loss) before income
taxes (71,718) 1,967,791 1,490,874 8,951,805 Income tax expense
(benefit) (276,415) 954,562 90,288 3,890,780 ---------- ----------
----------- ----------- Net income $204,697 $1,013,229 $1,400,586
$5,061,025 ========== ========== =========== =========== Net income
per share of common stock (basic) $0.01 $0.07 $0.10 $0.37 Net
income per share (fully diluted) $0.01 $0.04 $0.07 $0.19 Weighted
average number of shares outstanding (basic) 14,214,542 13,907,094
14,013,210 13,569,513 Weighted average number of shares outstanding
(fully diluted) 21,448,233 24,418,115 20,214,302 26,335,421
TECHPRECISION CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) Nine Months Ended December 31,
-------------------------- 2009 2008 ---------- ---------- CASH
FLOWS FROM OPERATING ACTIVITIES Net income $1,400,586 $5,061,025
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 313,370 415,127
Share based compensation 29,216 - Deferred income taxes (157,392)
(24,587) Gain on sale of equipment (12,000) - Changes in operating
assets and liabilities: Accounts receivable (562,222) (3,516,941)
Inventory 55,013 (151,773) Costs incurred on uncompleted contracts
(122,093) (1,543,141) Other receivables 29,979 (507,410) Prepaid
expenses 758,487 - Accounts payable (641,135) 252,755 Accrued
expenses (211,203) 603,373 Customer advances (2,240,019) 3,717,463
---------- ---------- Net cash (used in) provided by operating
activities (1,359,413) 4,305,891 CASH FLOW FROM INVESTING
ACTIVITIES Purchases of property, plant and equipment (27,173)
(183,901) Proceeds from sale of equipment 12,000 - Deposits on
equipment - (614,096) ---------- ---------- Net cash used in
investing activities (15,173) (797,997) CASH FLOWS FROM FINANCING
ACTIVITIES Capital distribution of WMR equity (140,627) (140,422)
Proceeds from exercised stock options and warrants 6,648 170,060
Borrowings under line of credit facility 919,297 - Payment of notes
and lease obligations (499,388) (460,166) ---------- ---------- Net
cash provided by (used in) financing activities 285,930 (430,528)
Net (decrease) increase in cash and cash equivalents (1,088,656)
3,077,366 Cash and cash equivalents, beginning of period 10,462,737
2,852,676 ---------- ---------- Cash and cash equivalents, end of
period $9,374,081 $5,930,042 ========== ========== DATASOURCE:
TechPrecision Corporation CONTACT: Mr. Richard F. Fitzgerald, Chief
Financial Officer of TechPrecision Corporation, +1-610-246-2116, ;
or Investor Relations, Brett Maas of Hayden IR, +1-646-536-7331, ,
for TechPrecision Corporation Web Site:
http://www.techprecision.com/
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