TechPrecision Corporation Reports Sixth Consecutive Profitable Quarter

Second Quarter and Year-to-Date Net Income More than Doubles Year-over-Year

WESTMINSTER, MA / ACCESSWIRE / November 14, 2016 / 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 period of fiscal year 2017, the period ended September 30, 2016.

Second Quarter Recap

“This was another quarter of operational and financial progress as we delivered a profit for our sixth consecutive quarter,” stated Alexander Shen, TechPrecision’s Chief Executive Officer. “We more than doubled net income as we continue to benefit from our consistent sharp focus on productivity initiatives and top line growth with key customers. This progress has enabled us to improve our balance sheet, as we reported $2.8 million in cash and $2.4 million in working capital at September 30, 2016, both significantly improved compared to March 31, 2016 levels.”

“Moving forward, we intend to maintain the sharp focus that led us to this point of our recovery,” continued Mr. Shen. “We continue to replenish our backlog, focusing on new business contracts with our core customers that utilize our core competencies in custom, large scale, high precision fabrication and machining, and leverage our established expertise, certifications, and qualifications in the defense, nuclear and precision industrial sectors.”

“We continue to maintain a healthy backlog, which was $18.1 million at October 31, 2016 compared to $19.8 million at March 31, 2016, as demand for our expertise within the defense, nuclear and precision industrial markets remains strong,” added Mr. Shen.

Second Quarter of Fiscal 2017 Financial Results

Net sales were $3.7 million compared to $4.1 million the same quarter a year ago, a decrease due to the uneven timing of shipments.
Gross profit was $1.5 million compared to $1.4 million in the same quarter last year. Gross margins improved in the second quarter of fiscal 2017 due to a higher margin product mix.
Selling, general and administrative expenses decreased by approximately 19%, or $170,000, to $740,000 in the second quarter of fiscal 2017 from $910,000 in the same quarter last year primarily due to reduced headcount and related costs to exit leased office space.
Net income of $546,000 increased significantly compared to net income of $255,000 in the same quarter a year ago.

Six Months Year-to-Date Financial Results

Net sales decreased 2%, or $178,000, to $8.3 million from $8.5 million in the year-ago six-month period. Increases in net sales to defense and precision industrial customers were slightly offset by lower revenue in the energy sector.
Cost of sales decreased 9%, or $497,000, to $5.3 million compared to $5.8 million in the year-ago six-month period.
Gross profit in the first six months of fiscal 2017 was $3.0 million compared to $2.7 million in the first six months of fiscal 2016.
Selling, general and administrative expenses decreased by approximately 5%, or $86,000, to $1.6 million in the first six months of fiscal 2017, down from $1.7 million in the same six-month period last year.
Interest expense decreased by approximately 27%, or $140,000, to $376,000 in the first six months of fiscal 2017, down from $516,000 in the same six-month period last year.
Net income was $991,000 for the first six months of fiscal 2017 compared to net income of $461,000 in the first six months of fiscal 2016.

Balance Sheet Summary

At September 30, 2016, TechPrecision had working capital of $2.4 million compared to working capital of $1.9 million and $0.5 million at June 30, 2016 and March 31, 2016, respectively. The Company had $2.8 million in cash at September 30, 2016 compared to $1.3 million at March 31, 2016 and generated $1.4 million of cash from operations for the first six months of fiscal 2017 compared to $0.8 million in fiscal 2016.

Teleconference Information

The Company will hold a conference call at 4:30 p.m. Eastern (U.S.) time on November 14, 2016. To participate in the live conference call, please dial 1-800-894-5910 five to 10 minutes prior to the scheduled conference call time. International callers should dial 1-785-424-1052. When prompted, reference Conference ID: TECH.

A replay will be available until December 14, 2016. To access the replay, dial 1-877-481-4010 or 1-919-882-2331. When prompted, enter Conference Passcode 10141.

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/IC/CEPage.asp?ID=175449.

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 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 availability of appropriate financing facilities, the Company’s ability to receive contract awards through competitive bidding processes, the Company’s ability to maintain standards to enable it to manufacture products to exacting specifications, the Company’s ability to enter new markets for its services, market and customer acceptance of the Company’s products, the Company’s reliance on a small number of customers for a significant percentage of its business, competition, government regulations and requirements, pricing and development difficulties, the Company’s ability to make acquisitions and successfully integrate those acquisitions with its 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 (the “SEC”) and available on the SEC’s 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.

Company Contact:

Mr. Thomas Sammons
Chief Financial Officer
TechPrecision Corporation
Phone: 978-883-5109
Email: sammonst@ranor.com
Website: www.techprecision.com

Investor Relations Contact:

Hayden IR
Brett Maas
Phone: 646-536-7331
Email: brett@haydenir.com
Website: www.haydenir.com

TECHPRECISION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

September 30,
2016

March 31,

2016

ASSETS

Current assets:

Cash

2,838,328

1,332,166

Accounts receivable, less allowance for doubtful accounts of $0 at September 30, 2016 and March 31, 2016

904,461

2,022,480

Costs on uncompleted contracts, in excess of progress billings

2,155,211

2,395,642

Inventories – raw materials

125,590

128,595

Other current assets

378,747

530,808

Total current assets

6,402,337

6,409,691

Property, plant and equipment, net

4,575,552

4,814,184

Deferred income taxes

684,270

Other noncurrent assets, net

177,163

176,344

Total assets

11,839,322

12,084,489

LIABILITIES AND STOCKHOLDERS’ EQUITY:

Current liabilities:

Accounts payable

589,602

996,065

Accrued expenses

1,604,516

1,804,485

Income taxes payable

29,990

9,032

Advanced claims payment

507,835

Billings on uncompleted contracts, in excess of related costs

683,660

1,629,018

Current portion of long-term debt

615,948

953,106

Total current liabilities

4,031,551

5,899,541

Long-term debt, net

4,354,839

3,735,410

Deferred income taxes

684,270

Noncurrent accrued expenses

27,419

37,097

Stockholders’ Equity:

Common stock – par value $.0001 per share, 90,000,000 shares authorized,

27,324,593 shares issued and outstanding at September 30, 2016, and

27,324,593 shares issued and outstanding at March 31, 2016

2,732

Additional paid in capital

7,117,659

7,094,749

Accumulated other comprehensive income

20,345

21,568

Accumulated deficit

(4,399,493

)

(5,390,878

)

Total stockholders’ equity

2,741,243

1,728,171

Total liabilities and stockholders’ equity

11,839,322

12,084,489

TECHPRECISION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)

Three Months Ended

September 30,

Six Months Ended

September 30,

2016

2015

2016

2015

Net sales

3,656,163

4,103,887

8,300,968

8,478,862

Cost of sales

2,182,547

2,696,333

5,291,959

5,788,449

Gross profit

1,473,616

1,407,554

3,009,009

2,690,413

Selling, general and administrative

739,585

910,038

1,627,763

1,714,245

Income from operations

734,031

497,516

1,381,246

976,168

Other income

6,822

1,255

7,568

1,066

Interest expense

(183,268

)

(244,179

)

(376,478

)

(516,301

)

Interest income

Total other expense, net

(176,444

)

(242,910

)

(368,903

)

(515,211

)

Income before income taxes

557,587

254,606

1,012,343

460,957

Income tax expense

11,505

–

20,958

–

Net income

546,082

254,606

991,385

460,957

Other comprehensive income, before tax:

Foreign currency translation adjustments

(281

)

1,413

(1,223

)

1,352

Other comprehensive income, before tax

(281

)

1,413

(1,223

)

1,352

Income tax expense on other comprehensive income

–

Other comprehensive income, net of tax

(281

)

1,413

(1,223

)

1,352

Comprehensive income

545,801

256,019

990,162

462,309

Net income per share (basic)

0.02

0.01

0.04

0.02

Net income per share (diluted)

0.02

0.01

0.04

0.02

Weighted average number of shares outstanding (basic)

27,324,593

26,113,433

27,324,593

25,460,435

Weighted average number of shares outstanding (diluted)

28,020,795

26,257,402

27,936,098

25,503,542

TECHPRECISION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

Six Months Ended

September 30,

2016

2015

CASH FLOWS FROM OPERATING ACTIVITIES

Net income

991,385

460,957

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

353,488

393,119

Amortization of debt issue costs

90,049

153,589

Stock based compensation expense

22,910

41,227

Provision for contract losses

(40,532

)

20,371

Changes in operating assets and liabilities:

Accounts receivable

1,118,019

7,915

Costs on uncompleted contracts, in excess of progress billings

240,431

534,207

Inventories – raw materials

3,005

(15,821

)

Other current assets

152,051

(4,757

)

Other noncurrent assets

(819

)

–

Accounts payable

(406,463

)

(846,386

)

Accrued expenses

(170,369

)

68,298

Accrued taxes

20,958

–

Advanced claims payment

–

507,835

Billings on uncompleted contracts, in excess of related costs

(945,358

)

(527,667

)

Net cash provided by operating activities

1,428,755

792,887

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property, plant and equipment

(114,856

)

(17,600

)

Net cash used in investing activities

(114,856

)

(17,600

)

CASH FLOWS FROM FINANCING ACTIVITIES

Deferred loan costs

(145,995

)

–

Borrowings of long-term debt

3,011,648

–

Repayment of long-term debt

(2,673,432

)

(466,740

)

Net cash provided by (used in) financing activities

192,221

(466,740

)

Effect of exchange rate on cash

(259

)

Net increase in cash

1,506,162

308,288

Cash, beginning of period

1,332,166

1,336,325

Cash, end of period

2,838,328

1,644,613

SOURCE: TechPrecision Corporation

ReleaseID: 448953

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