TechPrecision Corporation, 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 first quarter of fiscal year 2015, the period ended June 30, 2014.
First Quarter Recap
“TechPrecision continues to take the steps necessary to regain a stabilized and consistent revenue stream, higher gross margins, positive cash flow and a return to profitability,” commented Len Anthony, TechPrecision’s Executive Chairman. “I am encouraged by the sequential improvement we delivered in revenues compared to the fiscal fourth quarter of 2014, and we continue to target higher sales and production volumes to more fully exploit our capacity at Ranor. In comparison with last year’s first quarter sales volume, an increase in naval/maritime sales was offset by lower sales volume with energy and precision industrial customers, even as our customer base remains committed to sourcing TechPrecision for its consistently high quality products.”
Mr. Anthony continued, “Alexander Shen, who assumed the role of Ranor’s President in June, has been focused on achieving rapid improvement in productivity and meeting our core customers’ requirements and is working to establish a strategy that leads Ranor back to stability and profitability. Additionally, we continue to work on strengthening our liquidity and financial condition. On August 12, 2014, we executed a new forbearance agreement, effective as of August 1, 2014 and extending the new forbearance period until September 30, 2014 with our legacy bank as the previous forbearance agreement expired on July 31, 2014. We continue to pursue appropriate long-term financing facilities that will allow us flexibility in delivering our superior products to the Company’s blue chip customer base. Opportunities to recover some of the contract losses incurred the last two quarters remains a key focus of our senior team.”
First Fiscal Quarter 2015 Summary: Three Months Ended June 30
Net sales decreased 12% to $6.2 million compared to $7.1 million in the year-ago quarter but increased 72% from $3.6 million in revenues sequentially from fiscal Q4 of 2014.
Cost of goods sold included $0.4 million of contract losses recorded in the quarter ended June 30, 2014.
The Company is engaged in ongoing efforts to recover significant portions of the contract losses recorded within the fourth quarter of fiscal 2014 and the first quarter of fiscal 2015.
Due to the contract losses and lower revenue, gross profit was $0.2 million, or 3.5% gross margin, compared to gross profit of $0.4 million or 5.9% gross profit margin, in the year-ago quarter but up sequentially from a negative gross profit of $2.7 million in the fourth quarter of fiscal 2014.
Selling, general and administrative expenses decreased by approximately 25%, or $0.4 million, to $1.3 million from $1.7 million in the same quarter last year and sequentially decreased by 7% from $1.4 million for the fourth quarter of fiscal 2014.
The net loss was $1.3 million for the first quarter compared to a net loss of $1.4 million in the prior year first quarter and compared sequentially to a net loss of $4.1 million in the fourth quarter of fiscal 2014.
Balance Sheet Summary
At June 30, 2014, TechPrecision had negative working capital of $3.4 million as compared with negative working capital of $2.0 million at March 31, 2014. As of June 30, 2014, the Company had $0.9 million in cash and cash equivalents compared to $1.1 million at March 31, 2014.
The Company will hold a conference call at 4:30 p.m. Eastern (U.S.) time on Monday, August 18, 2014. To participate in the live conference call, please dial 1-877-548-7901 five to 10 minutes prior to the scheduled conference call time. International callers should dial 1-719-325-4789. When prompted by the operator, mention Conference Passcode 6955783.
A replay will be available for one week starting on Monday, August 18, 2014, 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 6955783.
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=110539.
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.