EX-99.1 2 tv513273_ex99-1.htm EXHIBIT 99.1


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  




TechPrecision Corporation Reports Third Quarter Financial Results

Significant net income increases for the quarter and year-to-date periods


Westminster, MA – February 13, 2019 – 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 third quarter. Net income for the third quarter and nine month periods ended December 31, 2018 was $218,000 and $563,000, respectively, compared to a net loss of $691,000 and net income of $101,000 in the same prior year periods.


“We are operating at targeted levels of production at the end of the third quarter, primarily with certain projects that have longer build cycles,” stated Alexander Shen, TechPrecision’s Chief Executive Officer. “Our operating margins are positive and we expect to remain profitable in the fourth quarter and for the full year of fiscal 2019. Our expected pipeline remains strong”


The financial statements in this report for periods beginning after April 1, 2018 and all subsequent reports reflect the adoption of the Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606), or ASC 606. Prior period amounts have not been restated and continue to be reported in accordance with the accounting standards in effect for those periods. (For more information regarding the adoption of ASC 606, refer to the Notes to the Condensed Consolidated Financial Statements in our Quarterly Report on Form 10Q for the period ended December 31, 2018 filed with the Securities and Exchange Commission).


Third Quarter Fiscal 2019 Financial Results


·Net sales were $4.3 million, a $0.6 million increase when compared to $3.6 million in the same quarter a year ago. The third quarter included $2.4 million of revenue related to the adoption of ASC 606.
·Gross profit of $1.0 million was more than double that reported for the same period a year ago.
·Operating income was $339,000 or 8% as a percentage of net sales.
·Net income was $218,000, compared to net loss of $691,000 in the quarter a year ago. With the enactment of the 2017 Tax Act, our December 31, 2017 financial results included a $0.5 million discrete tax item related to the re-measurement of our U.S. deferred tax assets at the new lower 21% U.S. federal statutory tax rate.
·EBITDA increased to $528,000 for the quarter ended December 31, 2018. Please refer to the reconciliation of EBITDA (a non-GAAP measure) to net income (a GAAP measure) in this release.


Nine Months Fiscal 2019 Financial Results


·Net sales were $12.0 million compared to $14.1 million in the same period a year ago. The first nine months of fiscal year 2019 included $6.3 million of revenue related to the adoption of ASC 606.
·Gross margins for the comparable nine-month periods in fiscal 2019 and fiscal 2018 were 26% and 26%, respectively. Gross profit was $3.1 million compared to $3.6 million in the same period last year.
·Operating income for the comparable nine-month periods in fiscal 2019 and fiscal 2018 was $1.0 million and $1.4 million, respectively.
·Net income was $563,000, or $0.02 per share basic and diluted, compared to net income of $101,000 in the same period a year ago. The December 31, 2017 financial results included a $0.5 million discrete tax item related to the re-measurement of our U.S. deferred tax assets at the new lower 21% U.S. federal statutory tax rate. 
·EBITDA for the comparable nine-month periods in fiscal 2019 and fiscal 2018 was $1.6 million and $1.9 million, respectively. Please refer to the reconciliation of EBITDA (a non-GAAP measure) to net income (a GAAP measure) in this release.





At December 31, 2018, TechPrecision had $1.8 million in cash, and working capital of $5.4 million compared to $2.7 million in cash and working capital of $4.9 million at March 31, 2018. There has been no cash paid for income taxes during the nine months ended December 31, 2018. The Company does not expect to make any significant tax payments for the remainder of the fiscal year.


Teleconference Information


The Company will hold a conference call at 4:30 p.m. Eastern (U.S.) time on February 13, 2019. To participate in the live conference call, please dial 1-888-428-7458 five to 10 minutes prior to the scheduled conference call time. International callers should dial 1-862-298-0702. When prompted, reference TechPrecision.


A replay will be available until March 13, 2019. To access the replay, dial 1-877-481-4010 or 1-919-882-2331. When prompted, enter Conference Passcode 42835. 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 https://www.investornetwork.com/event/presentation/42835.


About TechPrecision Corporation


TechPrecision Corporation, through its wholly owned subsidiary, Ranor, Inc., 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. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” “should,” “would” and similar expressions are intended to identify forward-looking statements. These statements are based on current expectations, estimates and projections made by management about our business, our industry and other conditions affecting our financial condition, results of operations or business prospects. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied in the forward-looking statements due to numerous risks and uncertainties. Factors that could cause such outcomes and results to differ include, but are not limited to: our reliance on individual purchase orders, rather than long-term contracts, to generate revenue, 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, changes in the availability or cost of raw materials and energy for our production facilities, operating in a single geographic location, restrictions in our ability to operate our business due to our outstanding indebtedness, government regulations and requirements, pricing and business development difficulties, changes in government spending on national defense, our ability to make acquisitions and successfully integrate those acquisitions with our business, general economic conditions, industry and market conditions and growth rates 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). Any forward-looking statements speak only as of the date on which they are made, and we undertake 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. Investors should evaluate any statements made by us in light of these important factors.


-- Tables Follow --









December 31,



March 31,


Current assets:          
Cash and cash equivalents  $1,837,925   $2,689,110 
Accounts receivable, net   147,788    1,446,982 
Contract assets   7,968,711    347,896 
Inventories   1,980,838    2,088,485 
Other current assets   464,714    450,540 
Total current assets   12,399,976    7,023,013 
Property, plant and equipment, net   5,046,757    5,202,448 
Deferred income taxes   2,311,440    2,046,298 
Other noncurrent assets, net   7,138    6,860 
Total assets  $19,765,311   $14,278,619 
Current liabilities:          
Accounts payable  $625,598   $345,705 
Accrued expenses   878,112    788,084 
Contract liabilities   4,693,889    180,706 
Current portion of long-term debt   807,059    766,354 
Total current liabilities   7,004,658    2,080,849 
Long-term debt, including capital leases   3,611,430    4,185,274 
Stockholders’ Equity:          
Common stock - par value $.0001 per share, 90,000,000 shares authorized, 28,949,593 shares issued and outstanding at December 31, 2018, and 28,824,593 shares issued and outstanding at March 31, 2018   2,895    2,882 
Additional paid in capital   8,668,709    8,561,995 
Accumulated other comprehensive income   21,834    24,236 
Retained earnings (accumulated deficit)   455,785    (576,617)
Total stockholders’ equity   9,149,223    8,012,496 
Total liabilities and stockholders’ equity  $19,765,311   $14,278,619 









   Three Months Ended
December 31,
   Nine Months Ended
December 31,
   2018   2017   2018   2017 
Net sales  $4,270,396   $3,642,294   $11,990,404   $14,061,574 
Cost of sales   3,299,166    3,219,543    8,871,550    10,465,235 
Gross profit   971,230    422,751    3,118,854    3,596,339 
Selling, general and administrative   631,783    596,271    2,113,285    2,236,371 
Income (loss) from operations   339,447    (173,520)   1,005,569    1,359,968 
Other expense, net   (86,724)   (104,775)   (265,343)   (312,424)
Income (loss) before income taxes   252,723    (278,295)   740,226    1,047,544 
Income tax expense   34,701    413,096    177,104    946,247 
Net income (loss)  $218,022   $(691,391)  $563,122   $101,297 
Other comprehensive income (loss), before tax:                    
Foreign currency translation adjustments  $18   $601   $(2,402)  $3,187 
Other comprehensive income (loss), before tax   18    601    (2,402)   3,187 
Income tax expense (benefit) on other comprehensive income (loss)   --    (36)   --    1,006 
Other comprehensive income (loss), net of tax  $18   $637   $(2,402)  $2,181 
Comprehensive income (loss)  $218,040   $(690,754)  $560,720   $103,478 
Net income (loss) per share basic  $0.01   $(0.02)  $0.02   $0.00 
Net income (loss) per share diluted  $0.01   $(0.02)  $0.02   $0.00 
Weighted average number of shares outstanding: Basic   28,858,560    28,824,593    28,835,957    28,824,593 
Diluted   30,427,218    28,824,593    30,158,509    29,564,841 









   Nine Months Ended December 31, 
   2018   2017 
Net income  $563,122   $101,297 
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation   558,571    523,640 
Amortization of debt issue costs   43,638    53,964 
Stock based compensation expense   106,727    226,935 
Change in contract loss provision   24,541    (43,815)
Deferred income taxes   177,104    904,243 
Changes in operating assets and liabilities:          
Accounts receivable   1,299,194    261,084 
Inventories   (1,004,145)   (385,013)
Contract assets   (5,912,297)   (65,500)
Other current assets   (14,174)   (87,682)
Other noncurrent assets and liabilities   (7,245)   (14,516)
Accounts payable   279,893    (106,273)
Accrued expenses   202,860    (28,712)
Contract liabilities   3,803,087    (66,121)
Net cash provided by operating activities   120,876    1,273,531 
Purchases of property, plant and equipment   (402,880)   (914,648)
Proceeds from sale of equipment   --    80,000 
Net cash used in investing activities   (402,880)   (834,648)
Repayment of long-term debt   (569,809)   (533,297)
Net cash used in financing activities   (569,809)   (533,297)
Effect of exchange rate on cash and cash equivalents   628    (713)
Net decrease in cash and cash equivalents   (851,185)   (95,127)
Cash and cash equivalents, beginning of period   2,689,110    3,066,156 
Cash and cash equivalents, end of period  $1,837,925   $2,971,029 







Reconciliation of EBITDA to Net Income


Earnings before interest, taxes, and depreciation and amortization, or EBITDA, is a non-GAAP measure. 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 December 31,   Nine months ended December 31, 
(dollars in thousands)  2018   2017   Change   2018   2017   Change 
Net income (loss)  $218   $(691)  $909   $563   $101   $462 
Income tax expense  $35   $413   $(378)  $177   $946   $(769)
Interest expense (a)  $88   $105   $(17)  $274   $314   $(40)
Depreciation  $187   $172   $15   $559   $524   $35 
EBITDA  $528   $(1)  $529   $1,573   $1,885   $(312)


(a) includes amortization of debt issue costs