TechPrecision Corporation (NASDAQ:TPCS) Q4 2020 Earnings Conference Call June 11, 2020 4:30 PM ET Company Participants Brett Maas - IR, Hayden IR Alex Shen - Chief Executive Officer Tom Sammons - Chief Financial Officer Conference Call Participants Ross Taylor - ARS Aaron Warwick - ES Capital Mark Gomes - Pipeline Richard Gulick - REG Cap Advisors Operator Ladies and gentlemen, hello and welcome. Thank you for joining us for today 's TechPrecision Fourth Quarter 2020 Earnings Call and Webcast. All participa ...

PART I [Business](index=4&type=section&id=Item%201.%20Business) TechPrecision manufactures precision metal components for defense, energy, and industrial sectors, operating on a build-to-print model with significant defense customer concentration - The company provides end-to-end services, transforming raw materials into precision finished products for customers in the defense, energy, and precision industrial markets[11](index=11&type=chunk) - Operations are conducted on a **"build-to-print" model**, manufacturing products based on customer designs without owning intellectual property or manufacturing in anticipation of orders[19](index=19&type=chunk) Net Sales by Industry Group (FY 2020 vs. FY 2019) | Industry Group | FY 2020 Sales ($ thousands) | FY 2020 Percent | FY 2019 Sales ($ thousands) | FY 2019 Percent | | :--- | :--- | :--- | :--- | :--- | | Defense | $13,368 | 83% | $15,060 | 90% | | Energy | $595 | 4% | $1,281 | 8% | | Precision Industrial | $2,044 | 13% | $361 | 2% | - The company experiences significant customer concentration, with the **ten largest customers accounting for approximately 97% of total revenue in fiscal 2020** and **98% in fiscal 2019**[34](index=34&type=chunk) - The company's order backlog increased to approximately **$16.8 million at March 31, 2020**, up from **$12.6 million at March 31, 2019**, expected to be delivered over the next two fiscal years[38](index=38&type=chunk) - Designated an **"Essential Service"** during COVID-19, the company continued operations but faced impacts on customers, suppliers (extended lead times), and its labor force, securing a **$1.32 million PPP loan** in May 2020 to mitigate uncertainty[23](index=23&type=chunk)[24](index=24&type=chunk)[26](index=26&type=chunk) [Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from competition, high customer concentration, reliance on purchase orders, COVID-19 impacts, single facility operations, and substantial indebtedness - The company is highly dependent on a small number of customers, with the **largest customer accounting for 22% of revenue in FY2020** and the **top three for 52% in FY2020** and **70% in FY2019**[54](index=54&type=chunk) - The COVID-19 pandemic has negatively affected customers, suppliers, and the labor force, potentially leading to customer shutdowns, supply delays, and production disruptions, which could materially impact fiscal 2021 results[52](index=52&type=chunk)[53](index=53&type=chunk) - A significant portion of revenue is derived from the defense industry (**83% in fiscal 2020**), making the company vulnerable to reductions or shifts in U.S. government defense spending[74](index=74&type=chunk) - All manufacturing and production are conducted at a **single facility in Westminster, Massachusetts**, increasing exposure to business disruption from localized catastrophic events[64](index=64&type=chunk)[65](index=65&type=chunk) - The company's level of indebtedness could impair its ability to operate, react to market changes, and fund operations, as a substantial portion of cash flow is dedicated to debt service[89](index=89&type=chunk) [Unresolved Staff Comments](index=23&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[115](index=115&type=chunk) [Properties](index=23&type=section&id=Item%202.%20Properties) The company owns its 145,000 square foot office and manufacturing facility in Westminster, Massachusetts, which is collateral for its loans with Berkshire Bank - The company owns a **145,000 square foot office and manufacturing facility in Westminster, Massachusetts**, adequate for current operations[116](index=116&type=chunk) - The Westminster property is used as collateral to secure loans from Berkshire Bank[116](index=116&type=chunk) [Legal Proceedings](index=23&type=section&id=Item%203.%20Legal%20Proceedings) The company agreed to a **$495,000 settlement** in a class-action lawsuit regarding a personal time off policy modification, pending court approval - A class-action lawsuit was filed by nine former employees of Ranor concerning a modification to the company's personal time off (PTO) policy in April 22014[117](index=117&type=chunk) - On March 16, 2020, the parties agreed to a settlement of **$495,000**, to be paid within 60 days of court approval[118](index=118&type=chunk) [Mine Safety Disclosures](index=23&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable to the registrant[119](index=119&type=chunk) [Information about our Executive Officers](index=23&type=section&id=Information%20about%20our%20Executive%20Officers) The company's executive officers are Alexander Shen (CEO) and Thomas Sammons (CFO), with brief biographies detailing their professional experience Executive Officers | Name | Age | Position | | :--- | :--- | :--- | | Alexander Shen | 58 | Chief Executive Officer | | Thomas Sammons | 65 | Chief Financial Officer | PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=24&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the OTCQB Market under **"TPCS"**, with approximately **1,193 record holders**, and no dividends are paid or anticipated due to loan restrictions - The company's common stock is traded on the OTCQB Market with the ticker symbol **"TPCS"**[125](index=125&type=chunk) - As of May 26, 2020, there were approximately **1,193 record holders** of common stock[126](index=126&type=chunk) - The company has never paid dividends and does not plan to in the foreseeable future, with covenants in its Berkshire Bank loan agreement prohibiting dividend payments[126](index=126&type=chunk) [Selected Financial Data](index=24&type=section&id=Item%206.%20Selected%20Financial%20Data) As a smaller reporting company, TechPrecision has elected not to provide the information required by this item - The company, as a smaller reporting company, has opted out of providing selected financial data[128](index=128&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2020 net sales decreased to **$16.0 million**, resulting in a **net loss of $0.3 million** due to lower gross margin, with anticipated COVID-19 impacts in fiscal 2021 and liquidity from operations and a PPP loan [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Fiscal 2020 saw net sales decrease **4%** to **$16.0 million**, gross profit fall **32%** to **$3.1 million** (margin **19.6%**), leading to an operating loss of **$0.1 million** and a net loss of **$0.3 million** Consolidated Statement of Operations Summary (FY 2020 vs. FY 2019) | (in thousands) | FY 2020 | FY 2019 | Change ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net sales | $16,007 | $16,703 | $(696) | (4)% | | Gross profit | $3,139 | $4,585 | $(1,446) | (32)% | | Operating (loss) income | $(142) | $1,838 | $(1,980) | (108)% | | Net (loss) income | $(342) | $1,101 | $(1,443) | (131)% | - Net sales decreased by **4%** in fiscal 2020, driven by a **$1.7 million decline in the defense market** and a **$0.7 million decline in the energy market**, partially offset by a **$1.7 million increase in the industrial market**[166](index=166&type=chunk) - Gross margin decreased from **27.6% in fiscal 2019 to 19.6% in fiscal 2020**, primarily due to **$1.0 million in cost overruns** on certain customer projects and a higher allocation of labor to less profitable projects[169](index=169&type=chunk)[170](index=170&type=chunk) - A provision of **$495,000** was recorded for a claims settlement related to a civil action brought by former employees concerning a paid time-off program[172](index=172&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2020, the company had **$0.9 million in cash** and **$5.6 million in working capital**, with **$0.7 million** net cash from operations, and secured a **$1.3 million PPP loan** post-year-end Selected Liquidity and Capital Measures (as of March 31) | (in thousands) | 2020 | 2019 | Change ($ thousands) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $931 | $2,037 | $(1,106) | | Working capital | $5,595 | $6,250 | $(655) | | Total debt | $2,587 | $4,297 | $(1,710) | - In January 2020, the company repaid in full its indebtedness under two loan schedules with People's Capital and Leasing Corp., terminating the agreements[177](index=177&type=chunk)[178](index=178&type=chunk) - In December 2019, the company modified its loan agreement with Berkshire Bank, increasing the maximum principal on its Revolver Loan from **$1.0 million to $3.0 million** and lowering the interest rate[183](index=183&type=chunk)[184](index=184&type=chunk) - Subsequent to fiscal year-end, on May 8, 2020, the company obtained a **$1,317,100 unsecured loan** under the Paycheck Protection Program (PPP) to mitigate uncertainty caused by the COVID-19 pandemic[181](index=181&type=chunk) Contractual Obligations as of March 31, 2020 | (in thousands) | Total ($ thousands) | Less than 1 Year ($ thousands) | 1-3 Years ($ thousands) | | :--- | :--- | :--- | :--- | | Debt obligations | $2,587 | $110 | $2,477 | | Interest on debt | $233 | $135 | $98 | | Purchase obligations | $1,095 | $1,095 | - | | Claims settlement | $495 | $495 | - | | **Total** | **$4,794** | **$2,219** | **$2,575** | [EBITDA Non-GAAP Financial Measure](index=35&type=section&id=EBITDA%20Non-GAAP%20Financial%20Measure) The company uses EBITDA, a non-GAAP measure, to evaluate operating performance, reporting **$0.6 million** for fiscal 2020, a significant decrease from **$2.6 million** in fiscal 2019 Reconciliation of Net (Loss) Income to EBITDA | (in thousands) | March 31, 2020 | March 31, 2019 | | :--- | :--- | :--- | | Net (loss) income | $(342) | $1,101 | | Income tax (benefit) expense | (73) | 423 | | Interest expense | 296 | 355 | | Depreciation | 718 | 750 | | **EBITDA** | **$599** | **$2,629** | [Quantitative and Qualitative Disclosure About Market Risk](index=36&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) As a smaller reporting company, TechPrecision has elected not to provide the information required by this item - The company, as a smaller reporting company, has opted out of providing quantitative and qualitative disclosures about market risk[196](index=196&type=chunk) [Financial Statements and Supplementary Data](index=36&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for fiscal years 2020 and 2019, including the independent auditor's report and detailed notes on accounting policies [Consolidated Balance Sheets](index=37&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2020, total assets were **$14.6 million** (down from **$16.0 million** in 2019), total liabilities decreased to **$5.1 million** (from **$6.3 million**), and stockholders' equity was **$9.5 million** Consolidated Balance Sheet Summary (as of March 31) | (in thousands) | 2020 | 2019 | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | $8,250 | $9,176 | | Total assets | $14,580 | $16,047 | | **Liabilities & Equity** | | | | Total current liabilities | $2,654 | $2,926 | | Total liabilities | $5,111 | $6,336 | | Total stockholders' equity | $9,469 | $9,711 | | Total liabilities and stockholders' equity | $14,580 | $16,047 | [Consolidated Statements of Operations and Comprehensive (Loss) Income](index=38&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20(Loss)%20Income) Fiscal 2020 net sales were **$16.0 million**, gross profit **$3.1 million**, resulting in an operating loss of **$141,284** and a net loss of **$341,569** (**($0.01) per share**), a significant decrease from fiscal 2019 Consolidated Statement of Operations Summary (Year Ended March 31) | (in thousands, except per share data) | 2020 | 2019 | | :--- | :--- | :--- | | Net sales | $16,007 | $16,703 | | Gross profit | $3,139 | $4,584 | | (Loss) income from operations | $(141) | $1,838 | | Net (loss) income | $(342) | $1,101 | | Net (loss) income per share – diluted | $(0.01) | $0.04 | [Consolidated Statements of Cash Flows](index=40&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Fiscal 2020 saw **$0.7 million** net cash from operations, **$40,000** used in investing, and **$1.7 million** used in financing (debt repayment), leading to a **$1.1 million** net decrease in cash and a **$0.9 million** year-end balance Consolidated Statement of Cash Flows Summary (Year Ended March 31) | (in thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $677 | $531 | | Net cash used in investing activities | $(40) | $(411) | | Net cash used in financing activities | $(1,743) | $(773) | | Net decrease in cash and cash equivalents | $(1,106) | $(652) | | Cash and cash equivalents, end of period | $931 | $2,037 | [Notes to Consolidated Financial Statements](index=41&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue recognition (ASC 606), **$7.5 million** federal net operating loss carryforwards, debt facilities, stock-based compensation, a **$495,000** legal settlement, and a subsequent **$1.3 million PPP loan** - The company recognizes the majority of its revenue over time, using an inputs methodology based on estimated labor hours to measure performance progress, with **$12.6 million of revenue recognized over-time** and **$3.4 million at a point-in-time** in fiscal 2020[227](index=227&type=chunk)[247](index=247&type=chunk) - As of March 31, 2020, the company had federal net operating loss carryforwards of approximately **$7.5 million**, which begin to expire in 2026[254](index=254&type=chunk) - In January 2020, the company repaid in full its equipment loan facility with People's Capital and Leasing Corp[288](index=288&type=chunk)[289](index=289&type=chunk) - Subsequent to the fiscal year-end, on May 8, 2020, the company's subsidiary Ranor received a loan of **$1,317,100** under the Paycheck Protection Program (PPP)[299](index=299&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=61&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[302](index=302&type=chunk) [Controls and Procedures](index=61&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of March 31, 2020, the CEO and CFO concluded that disclosure controls and internal control over financial reporting were effective, with no material changes reported - Management, including the CEO and CFO, concluded that as of March 31, 2020, the company's disclosure controls and procedures were effective at a reasonable assurance level[304](index=304&type=chunk) - Management assessed the effectiveness of internal control over financial reporting based on the **2013 COSO framework** and concluded that it was effective as of March 31, 2020[307](index=307&type=chunk) - There were no changes in internal control over financial reporting during the fourth quarter of fiscal 2020 that materially affected, or are reasonably likely to materially affect, internal controls[308](index=308&type=chunk) [Other Information](index=61&type=section&id=Item%209B.%20Other%20Information) This item is not applicable - Not Applicable[309](index=309&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=62&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, audit committee, and code of ethics is incorporated by reference from the 2020 Proxy Statement - Information required by this item is incorporated by reference from the registrant's 2020 Annual Meeting of Stockholders Proxy Statement[311](index=311&type=chunk) [Executive Compensation](index=62&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's 2020 Annual Meeting of Stockholders Proxy Statement - Information required by this item is incorporated by reference from the registrant's 2020 Annual Meeting of Stockholders Proxy Statement[312](index=312&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=62&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of certain beneficial owners and management is incorporated by reference from the company's 2020 Annual Meeting of Stockholders Proxy Statement - Information required by this item is incorporated by reference from the registrant's 2020 Annual Meeting of Stockholders Proxy Statement[313](index=313&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=63&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's 2020 Annual Meeting of Stockholders Proxy Statement - Information required by this item is incorporated by reference from the registrant's 2020 Annual Meeting of Stockholders Proxy Statement[314](index=314&type=chunk) [Principal Accountant Fees and Services](index=63&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's 2020 Annual Meeting of Stockholders Proxy Statement - Information required by this item is incorporated by reference from the registrant's 2020 Annual Meeting of Stockholders Proxy Statement[315](index=315&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=63&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements and exhibits filed as part of the Form 10-K report, with financial statement schedules omitted as not applicable - This section lists the financial statements included in Item 8 and states that financial statement schedules have been omitted because they are not applicable or the required information is included elsewhere[317](index=317&type=chunk) - An index of exhibits filed with the report is provided, including corporate governance documents, material contracts, and certifications[318](index=318&type=chunk)[319](index=319&type=chunk) [Form 10-K Summary](index=64&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports that there is no Form 10-K summary - None[321](index=321&type=chunk)

TechPrecision Corp (NASDAQ:TPCS) Q4 2019 Earnings Conference Call February 13, 2020 4:30 PM ET Company Participants Jeff Stanlis - Hayden IR Alexander Shen - CEO & President Thomas Sammons - CFO Conference Call Participants Ross Taylor - ARS Investment Partners John Hardison - Private Investor Operator Good day, ladies and gentlemen, and welcome to your TechPrecision Third Quarter 2020 Earnings Call. [Operator Instructions]. At this time, it is my pleasure to turn the floor over to Jeff Stanlis with Hayde ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2019 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________________ to __________________ Commission File Number: 000-51378 TechPrecision Corporation (Exact name of registrant as specified in its charter) | ...

Financial Data and Key Metrics Changes - Net sales for Q2 fiscal 2020 were $3.1 million, a decrease from $3.6 million in Q2 fiscal 2019, reflecting a 14% decline [6][8] - The net loss for Q2 fiscal 2020 was $291,000 compared to a net income of $345,100 for the same period a year ago [7][10] - For the six months ended September 30, 2019, net sales decreased by $312,000 or 4% to $7.4 million compared to $7.7 million for the same period in 2018 [8][10] - Gross margin for the six months ended September 30, 2019 was 20.6% [9] Business Line Data and Key Metrics Changes - The backlog at September 30, 2019 totaled $16.4 million, an increase of $3.8 million compared to $12.6 million at March 31, 2019 [5] - Cost of sales for Q2 fiscal 2020 was $2.7 million, up from $2.5 million in the same quarter the previous year [6] Market Data and Key Metrics Changes - The company continues to see meaningful opportunities in the defense sector, particularly in the nuclear submarine business for the next 12 months and beyond [12] Company Strategy and Development Direction - The company aims to operate above current revenue and operating income levels and return to profitability during the second half of fiscal 2020 [5] - Management is focused on the defense industry, specifically naval submarine manufacturing, and is excited about the start-up of multiple new projects [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the backlog increase and the potential for future profitability, indicating that the losses incurred were primarily due to start-up costs for new projects [35][36] - The company is cautious about revealing specific future revenue expectations due to competitive reasons [111][119] Other Important Information - Cash provided by operating activities was $0.9 million for the six months ended September 30, 2019 [11] - The company has a net debt of $1.3 million at the end of Q2 fiscal 2020 [11] Q&A Session Summary Question: What is the current backlog? - Management indicated that they cannot provide the current backlog number as it is netted against revenue recognized [15] Question: Is Block 5 effective and funded? - Management confirmed that Block 5 is a viable program but could not provide specific funding details [21][22] Question: Can you discuss the cost issues on a project loss? - Management explained that the losses were due to start-up costs for new projects and do not expect these losses to repeat [34][36] Question: What is the expected capital spending program over the next one to two years? - Management declined to answer due to competitive reasons [73] Question: Are there any non-defense business opportunities? - Management stated that non-defense business is pursued opportunistically, but the focus remains on defense [77] Question: Will the company announce large orders received mid-quarter? - Management indicated that they would need client permission and must balance competitive concerns before making announcements [116] Question: How does revenue become realized through the process? - Management explained that revenue is recognized when items ship or through percent complete revenue on certain projects [132]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 000-51378 TechPrecision Corporation (Exact name of registrant as specified in its charter) | Delaware | 51-0539828 | | --- | --- | | (State or other jurisdiction of ...

TechPrecision Corporation (NASDAQ:TPCS) Q1 2020 Earnings Conference Call August 13, 2019 4:30 PM ET Company Participants Jeff Stanlis – Partner and Vice President, Communications-Hayden IR Alex Shen – Chief Executive Officer Tom Sammons – Chief Financial Officer Conference Call Participants Ross Taylor – ARS Investment Mark Gomes – Pipeline Data Howard Brous – Wellington Shields Richard Greulich – REG Capital Advisors Operator Good day, ladies and gentlemen, and welcome to the TechPrecision First Quarter 20 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________________ to __________________ Commission File Number: 000-51378 TechPrecision Corporation (Exact name of registrant as specified in its charter) | Dela ...

FORM 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2019 ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________________ to __________________ Commission File Number: 000-51378 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 TechPrecision Corporation (Exact name of registrant as specified in its charter) Delaware 51-0 ...

Financial Data and Key Metrics Changes - Net income for Q3 2019 was $218,000 compared to a net loss of $691,000 in the same quarter last year, indicating a significant improvement in profitability [6][11] - Gross profit increased to $1 million in Q3 2019 from $0.4 million in Q3 2018, with gross margin improving to 22.7% from 11.1% year-over-year [10][11] - For the nine months ended December 31, 2018, net sales decreased by $2.1 million or 50% to $12 million compared to $14.1 million for the same period in 2017 [11] Business Line Data and Key Metrics Changes - Net sales in defense markets increased by $0.7 million, while energy market sales decreased by $0.1 million compared to the same quarter last year [9] - The backlog increased from $12.1 million at September 30, 2018, to $14.1 million at December 31, 2018, driven by $6.3 million in new orders [15] Market Data and Key Metrics Changes - The company continues to focus on the U.S. defense industry, particularly in naval submarine manufacturing, with significant demand drivers identified for future growth [18][19] - The Virginia payload module and the Columbia program are expected to double the existing workload for nuclear submarine construction starting in 2019 [19][20] Company Strategy and Development Direction - The company aims to enhance shareholder value by focusing on tactical execution to meet customer expectations, particularly in the defense sector [15][18] - Management is committed to exploring strategic alternatives while actively reviewing business opportunities within the defense industry [44][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong pipeline of business from primary defense customers, despite delays in government appropriations affecting contract timing [20][43] - The demand for the company's services is significant and is not expected to decrease, with management anticipating increased capacity utilization moving into 2020 [43] Other Important Information - The company adopted a new revenue recognition model that allows revenue to be recognized over the project duration, which may affect comparisons of backlog figures [7][56] - Total long-term debt was reported at $3.6 million, with expectations for continued decreases in interest expense as debt principal is amortized [11][93] Q&A Session Summary Question: What percentage of the $14.1 million backlog is from the U.S. Navy? - Management indicated that approximately 80% of the backlog is from the U.S. Navy [24] Question: Can you clarify how backlog is calculated? - Backlog consists only of funded purchase orders, and any unfunded contracts are not included [25][27] Question: What opportunities exist in the nuclear sector? - The company is competing for bids in the U.S. nuclear industry, primarily for replacement parts and new components [37] Question: What is the expected timeframe for the $75 million to $100 million opportunities? - Management stated that this timeframe is over a two-year period [82] Question: Is the company actively reviewing strategic alternatives? - Yes, management continues to actively review strategic alternatives to maximize shareholder value [44][80]