Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - TECHPRECISION CORP | tv479291_8k.htm |
Exhibit 99.1
| Company Contact: | Investor Relations Contact: | |
| Mr. Thomas Sammons | Hayden IR | |
| Chief Financial Officer | Brett Maas | |
| TechPrecision Corporation | Phone: 646-536-7331 | |
| Phone: 978-883-5109 | Email: brett@haydenir.com | |
| Email: sammonst@ranor.com | Website: www.haydenir.com | |
| Website: www.techprecision.com |
FOR IMMEDIATE RELEASE
TechPrecision Corporation Reports Profitable Second Quarter
Net Sales Increase 26% Year-over-Year
Westminster, MA – November 13, 2017 – 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 the six months ended September 30, 2017.
Second Quarter of Fiscal 2018 Financial Results
| · | Net sales were $4.6 million, a 26% increase when compared to the same quarter a year ago. |
| · | Gross profit was $1.4 million compared to $1.5 million in the same quarter last year, a 3% decrease, primarily due to higher unabsorbed overhead costs. |
| · | Income before income taxes was $0.6 million, a 10% increase when compared to the same period a year ago. |
| · | Net income was $368,000, or $0.01 per share basic and fully diluted, down from net income of $546,000 or $0.02 per share basic and fully diluted, for the same quarter a year ago, due primarily to an increase of $234,000 in income tax expense. Cash paid for income taxes in the second quarter of fiscal 2018 was $20,000. Income tax expense was significantly lower in the quarter ended September 30, 2016, due to the utilization of net operating losses and the associated reduction in the valuation allowance which had been provided for deferred tax assets. |
| · | EBITDA was $894,000 for the quarter ended September 30, 2017, compared to $918,000 for the quarter ended September 30, 2016. Please refer to the reconciliation of EBITDA (a non-GAAP measure) to net income (a GAAP measure) in this release. |
Six Months Year-to-Date Fiscal 2018 Financial Results
| · | Net sales were $10.4 million, a 26% increase when compared to the same period a year ago. |
| · | Gross profit was $3.2 million, a 5% increase compared to $3.0 million in the same period a year ago. |
| · | Income before income taxes was $1.3 million, a 31% increase when compared to the same period a year ago. |
| · | Net income was $793,000, or $0.03 per share basic and fully diluted, down from net income of $991,000 or $0.04 per share basic and fully diluted, for the same period a year ago, primarily due to an increase of $512,000 in income tax expense. Cash paid for income taxes in the six months ended September 30, 2017 was $30,000. Income tax expense was significantly lower in the six months ended September 30, 2016, due to the utilization of net operating losses and the associated reduction in the valuation allowance which had been provided for deferred tax assets. |
| · | EBITDA was $1.9 million for the six months ended September 30, 2017, compared to $1.7 million for the six months ended September 30, 2016. Please refer to the reconciliation of EBITDA (a non-GAAP measure) to net income (a GAAP measure) in this release. |
Second Quarter Recap
“This was another profitable operating quarter, continuing our recent trends and bolstering our confidence that we are on the right path,” stated Alexander Shen, TechPrecision’s Chief Executive Officer. “Our improved quality and consistent on-time delivery is resonating with key customers, helping us drive a 26% increase in net sales. Income before income taxes was $614,000, a 10% increase over the same quarter a year ago.”
Mr. Shen added: “We have invested approximately $1.6 million in new machinery and equipment through fiscal years 2017 and 2018, and we will maintain our focus on the defense, nuclear and precision industrial markets as we endeavor to replenish our backlog.”
Chairman of the Board, Richard McGowan stated: “The board is very aware of the significant drag on earnings caused by the costs of being a public company at our revenue level. We have been and continue to actively investigate and pursue all ways to improve this.”
The company has tentatively scheduled its annual meeting of stockholders in September 2018 to better align its meeting with the end of its fiscal year. The exact date will be forthcoming.
Balance Sheet Summary
At September 30, 2017, TechPrecision had working capital of $5.7 million compared to working capital of $5.0 million at March 31, 2017. The Company had $2.5 million in cash at September 30, 2017.
Teleconference Information
The Company will hold a conference call at 4:30 p.m. Eastern (U.S.) time on November 13, 2017. To participate in the live conference call, please dial 1-888-567-1602 five to 10 minutes prior to the scheduled conference call time. International callers should dial 1-404-267-0373. When prompted, reference TechPrecision.
A replay will be available until December 13, 2017. To access the replay, dial 1-877-481-4010 or 1-919-882-2331. When prompted, enter Conference Passcode 22492.
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/event/22492.
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 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. These forward-looking statements are often identified by the use of forward-looking terminology such as “believe,” “continue,” “expect,” “will” 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 our ability to change the composition of our revenues and effectively reduce 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, pricing and business development difficulties 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. 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.
-- Tables Follow --
TECHPRECISION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, 2017 | March 31, 2017 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 2,489,626 | $ | 3,066,156 | ||||
| Accounts receivable, net | 2,175,822 | 1,870,672 | ||||||
| Costs incurred on uncompleted contracts, in excess of progress billings | 3,213,329 | 2,097,221 | ||||||
| Inventories - raw materials | 200,787 | 141,792 | ||||||
| Other current assets | 546,633 | 422,096 | ||||||
| Total current assets | 8,626,197 | 7,597,937 | ||||||
| Property, plant and equipment, net | 5,369,167 | 4,912,202 | ||||||
| Deferred income taxes | 2,364,303 | 2,871,680 | ||||||
| Other noncurrent assets, net | 68,625 | 100,000 | ||||||
| Total assets | $ | 16,428,292 | $ | 15,481,819 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 380,318 | $ | 365,308 | ||||
| Accrued expenses | 1,008,717 | 893,415 | ||||||
| Billings on uncompleted contracts, in excess of related costs | 827,573 | 642,831 | ||||||
| Current portion of long-term debt | 742,292 | 717,481 | ||||||
| Total current liabilities | 2,958,900 | 2,619,035 | ||||||
| Long-term debt, including capital leases | 4,546,078 | 4,874,721 | ||||||
| Noncurrent accrued expenses | 8,064 | 17,742 | ||||||
| Stockholders’ Equity: | ||||||||
| Common stock - par value $.0001 per share, 90,000,000 shares authorized, 28,824,593 shares issued and outstanding at September 30 and March 31, 2017 | 2,882 | 2,882 | ||||||
| Additional paid in capital | 8,409,517 | 8,258,820 | ||||||
| Accumulated other comprehensive income | 20,872 | 19,328 | ||||||
| Retained earnings (accumulated deficit) | 481,979 | (310,709 | ) | |||||
| Total stockholders’ equity | 8,915,250 | 7,970,321 | ||||||
| Total liabilities and stockholders’ equity | $ | 16,428,292 | $ | 15,481,819 | ||||
TECHPRECISION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three
Months Ended September 30, | Six Months
Ended September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net sales | $ | 4,588,894 | $ | 3,656,163 | $ | 10,419,280 | $ | 8,300,968 | ||||||||
| Cost of sales | 3,155,893 | 2,182,547 | 7,245,692 | 5,291,959 | ||||||||||||
| Gross profit | 1,433,001 | 1,473,616 | 3,173,588 | 3,009,009 | ||||||||||||
| Selling, general and administrative | 720,341 | 739,585 | 1,640,100 | 1,627,763 | ||||||||||||
| Income from operations | 712,660 | 734,031 | 1,533,488 | 1,381,246 | ||||||||||||
| Other income | 1,456 | 6,824 | 1,547 | 7,575 | ||||||||||||
| Interest expense | (100,414 | ) | (183,268 | ) | (209,196 | ) | (376,478 | ) | ||||||||
| Total other expense, net | (98,958 | ) | (176,444 | ) | (207,649 | ) | (368,903 | ) | ||||||||
| Income before income taxes | 613,702 | 557,587 | 1,325,839 | 1,012,343 | ||||||||||||
| Income tax expense | 245,516 | 11,505 | 533,151 | 20,958 | ||||||||||||
| Net income | $ | 368,186 | $ | 546,082 | $ | 792,688 | $ | 991,385 | ||||||||
| Other comprehensive income (loss), before tax: | ||||||||||||||||
| Foreign currency translation adjustments | $ | 1,854 | $ | (281 | ) | $ | 2,586 | $ | (1,223 | ) | ||||||
| Other comprehensive income (loss), before tax | 1,854 | (281 | ) | 2,586 | (1,223 | ) | ||||||||||
| Income tax expense on other comprehensive income | 746 | -- | 1,042 | -- | ||||||||||||
| Other comprehensive income (loss), net of tax | $ | 1,108 | $ | (281 | ) | $ | 1,544 | $ | (1,223 | ) | ||||||
| Comprehensive income | $ | 369,294 | $ | 545,801 | $ | 794,232 | $ | 990,162 | ||||||||
| Net income per share (basic) | $ | 0.01 | $ | 0.02 | $ | 0.03 | $ | 0.04 | ||||||||
| Net income per share (diluted) | $ | 0.01 | $ | 0.02 | $ | 0.03 | $ | 0.04 | ||||||||
| Weighted average number of shares outstanding (basic) | 28,824,593 | 27,324,593 | 28,824,593 | 27,324,593 | ||||||||||||
| Weighted average number of shares outstanding (diluted) | 29,730,456 | 28,020,795 | 29,751,219 | 27,936,098 | ||||||||||||
TECHPRECISION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Six Months
Ended September 30, | ||||||||
| 2017 | 2016 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income | $ | 792,688 | $ | 991,385 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation | 351,422 | 353,488 | ||||||
| Amortization of debt issue costs | 37,038 | 90,049 | ||||||
| Stock based compensation expense | 150,697 | 22,910 | ||||||
| Change in contract losses | 29,139 | (40,532 | ) | |||||
| Deferred income taxes | 507,376 | -- | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (305,150 | ) | 1,118,019 | |||||
| Costs on uncompleted contracts, in excess of progress billings | (1,116,108 | ) | 240,431 | |||||
| Inventories – raw materials | (58,995 | ) | 3,005 | |||||
| Other current assets | (124,537 | ) | 152,051 | |||||
| Other noncurrent assets and liabilities | (9,678 | ) | (819 | ) | ||||
| Accounts payable | 15,010 | (406,463 | ) | |||||
| Accrued expenses | 88,319 | (170,369 | ) | |||||
| Accrued taxes | -- | 20,958 | ||||||
| Billings on uncompleted contracts, in excess of related costs | 184,742 | (945,358 | ) | |||||
| Net cash provided by operating activities | 541,963 | 1,428,755 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Proceeds from sale of equipment | 80,000 | -- | ||||||
| Deposit for fixed assets | (36,987 | ) | -- | |||||
| Purchases of property, plant and equipment | (808,386 | ) | (114,856 | ) | ||||
| Net cash used in investing activities | (765,373 | ) | (114,856 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Deferred loan costs | -- | (145,995 | ) | |||||
| Borrowings of long-term debt | -- | 3,011,648 | ||||||
| Repayment of long-term debt | (352,509 | ) | (2,673,432 | ) | ||||
| Net cash (used in) provided by financing activities | (352,509 | ) | 192,221 | |||||
| Effect of exchange rate on cash and cash equivalents | (611 | ) | 42 | |||||
| Net (decrease) increase in cash and cash equivalents | (576,530 | ) | 1,506,162 | |||||
| Cash and cash equivalents, beginning of period | $ | 3,066,156 | $ | 1,332,166 | ||||
| Cash and cash equivalents, end of period | $ | 2,489,626 | $ | 2,838,328 | ||||
TECHPRECISION CORPORATION
SUPPLEMENTAL INFORMATION
Reconciliation of EBITDA to Net Income
(Unaudited)
The following table provides a reconciliation of EBITDA to net income, the most directly comparable U.S. GAAP measure reported in our condensed consolidated financial statements:
Three months ended September 30, 2017 | Three months ended September 30, 2016 | Change Amount | ||||||||||
| Net income | $ | 368,186 | $ | 546,082 | $ | (177,896 | ) | |||||
| Income tax expense | 245,516 | 11,505 | 234,011 | |||||||||
| Interest expense (1) | 100,414 | 183,268 | (82,854 | ) | ||||||||
| Depreciation | 179,809 | 177,438 | 2,371 | |||||||||
| EBITDA | $ | 893,925 | $ | 918,293 | $ | (24,368 | ) | |||||
Six months ended September 30, 2017 | Six months ended September 30, 2016 | Change Amount | ||||||||||
| Net income | $ | 792,688 | $ | 991,385 | $ | (198,697 | ) | |||||
| Income tax expense | 533,151 | 20,958 | 512,193 | |||||||||
| Interest expense (1) | 209,196 | 376,478 | (167,282 | ) | ||||||||
| Depreciation | 351,422 | 353,488 | (2,066 | ) | ||||||||
| EBITDA | $ | 1,886,457 | $ | 1,742,309 | $ | 144,148 | ||||||
| (1) | Includes amortization of debt issue costs. |
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