TechPrecision .(TPCS) - 2025 Q2 - Quarterly Report

Revenue and Financial Performance - Consolidated revenue for the three months ended June 30, 2024, was $7.986 million, an increase of 8$7.371 million for the same period in 2023[131]. - Ranor's revenue decreased by $0.1 million, or 3$4.382 million for the three months ended June 30, 2024, while Stadco's revenue increased by $0.6 million, or 21$3.604 million[132][133]. - Consolidated gross profit for the three months ended June 30, 2024, was $238,000, a decrease of$455,000, or 66%, compared to $694,000 for the same period in 2023, resulting in a gross margin of 3.0$1.341 million for the three months ended June 30, 2024, which is $0.761 million higher than the operating loss of$0.580 million for the same period in 2023[141]. - The net loss for the three months ended June 30, 2024, was $1.5 million, or$0.16 per share, compared to a net loss of $527,455, or$0.06 per share for the same period in 2023[149]. - EBITDA for the three months ended June 30, 2024, was negative $634,000, a decrease of$615,000 from negative $19,000 in the same period in 2023[182]. Liquidity and Debt Management - As of June 30, 2024, the company had approximately$1.6 million in total available liquidity, consisting primarily of $1.5 million in undrawn capacity under its Revolver Loan[151]. - The company is exploring various means to strengthen its liquidity position, including making Stadco operations profitable and renewing the Revolver Loan[172]. - The company must renew its revolver loan or seek alternative financing by January 15, 2025, to continue operations beyond the next twelve months[174]. - The company's debt obligations totaled$7.5 million, classified as current due to debt covenant violations[177]. - The company has approximately $1.5 million of unused borrowing capacity under the Revolver Loan as of June 30, 2024, up from$0.5 million on March 31, 2024[152]. - Interest expense increased by approximately $39,313, or 52$114,638 for the three months ended June 30, 2024, primarily due to increased borrowings under the revolver loan[145]. Operational Focus and Compliance - The company focuses on custom manufacturing according to customer specifications, with no distribution of components on the open market[109]. - The company primarily targets repeating custom programs for stable designs, with secondary activities including one-off requirements[110]. - The company is registered and compliant with ITAR, ensuring adherence to defense industry regulations[105][108]. - The company has a critical focus on maintaining effective internal controls over financial reporting to ensure compliance and accuracy[114]. - The company's operations, assets, and customers are all located in the U.S., emphasizing its domestic focus[113]. Backlog and Future Commitments - The backlog for Ranor was $18.8 million as of June 30, 2024, down from$21.8 million in the previous year, while Stadco's backlog was $22.4 million, down from$24.5 million[132][134]. - Outstanding unconditional contractual commitments for raw materials and supplies amounted to approximately $8.7 million, all due within the next twelve months[178]. - Lease obligations for buildings totaled$5.6 million through 2030, with approximately $0.9 million due annually for the next six years[179]. Capital Expenditures and Investments - The company invested approximately$0.2 million in new factory machinery and equipment during the three months ended June 30, 2024, a significant decrease from $1.9 million in the same period in 2023[158]. - The company is currently in violation of its Loan Agreement due to exceeding the capital expenditure limit of$1.5 million[170]. Management and Strategic Outlook - The company plans to closely monitor expenses and may reduce operating costs to enhance liquidity[174]. - The company is facing substantial doubt about its ability to continue as a going concern for at least one year due to recurring operating losses and financing uncertainties[175]. - EBITDA is considered an important measure of operating performance, but it has limitations and should not be viewed in isolation from U.S. GAAP results[180].