TechPrecision .(US:TPCS)2024-03-01 02:07Financial Performance - Consolidated net sales for the three months ended December 31, 2023, were $7.65 million, an 8% decrease from $8.33 million in the same period of 2022[124]. - Ranor's net sales decreased by $0.4 million or 9% to $4.3 million, attributed to lower volume despite an increase in average selling price[127]. - Stadco's net sales were $3.37 million, a decrease of $0.2 million or 6% compared to the same period last year, primarily due to lower average selling prices[128]. - For the nine months ended December 31, 2023, consolidated net sales were $22.99 million, a decrease of 4% compared to $23.93 million for the same period in 2022[146]. - Ranor's net sales for the nine months ended December 31, 2023, were $13.29 million, an 8% decrease from $14.40 million in the prior year[147]. - Stadco's net sales increased by $0.4 million, or 4%, to $9.94 million for the nine months ended December 31, 2023, compared to $9.53 million in the same period in 2022[148]. Profitability and Loss - Gross profit for the three months ended December 31, 2023, was $1.16 million, down 23% from $1.5 million in the same period of 2022, resulting in a gross margin of 15.2% compared to 18.0%[130]. - Consolidated gross profit for the nine months ended December 31, 2023, decreased by $1.2 million, or 29%, with a gross margin of 12.6% compared to 16.9% in the prior year[150]. - The company reported an operating loss of $2.2 million for the nine months ended December 31, 2023, which is $1.8 million higher than the operating loss for the same period in 2022[158]. - For the three months ended December 31, 2023, the company recorded a net loss of $865,334, or $0.10 per share, compared to a net income of $133,975, or $0.02 per share, for the same period in 2022[143]. - For the nine months ended December 31, 2023, the company recorded a net loss of $1.9 million, or $0.22 per share, compared to a net income of $23,754, or $0.00 per share for the same period in 2022[166]. - EBITDA for the three months ended December 31, 2023, was negative $0.365 million, a decrease of $1.190 million from EBITDA of $0.825 million in the same period of 2022[195]. Expenses - Consolidated cost of sales for the three months ended December 31, 2023, was $6.49 million, a 5% decrease from $6.83 million in the same period of 2022[130]. - Consolidated SG&A expenses for the three months ended December 31, 2023, increased by approximately $932,000, or 76%, primarily due to outside advisory and business development expenses related to a potential acquisition[134]. - Corporate and unallocated SG&A expenses increased by approximately $1.0 million due to outside advisory services and board of director's stock-based compensation[156]. - Interest expense for the nine months ended December 31, 2023, was $297,321, an increase of 35% compared to $221,017 for the same period in 2022, primarily due to higher interest rates and increased borrowing[161]. - The company experienced an increase in interest expense, which rose to $0.352 million for the nine months ended December 31, 2023, compared to $0.261 million in the same period of 2022, an increase of $0.091 million[195]. - Depreciation and amortization expenses were $1.759 million for the nine months ended December 31, 2023, compared to $1.667 million in the same period of 2022, an increase of $0.092 million[195]. Acquisition and Growth - The company entered into a Stock Purchase Agreement to acquire Votaw Precision Technologies, which is expected to more than double its revenue and enhance its defense and aerospace presence[105][106]. - The acquisition of Votaw will allow for the physical merging of its facilities with the Stadco subsidiary, providing a pathway for significant growth[106]. - Ranor's backlog as of December 31, 2023, was $18.5 million, while Stadco's backlog was $32.3 million, indicating strong demand in the defense sector[147][148]. Liquidity and Debt - Total available liquidity as of December 31, 2023, was $2.8 million, consisting of $0.4 million in cash and cash equivalents and approximately $2.4 million in undrawn capacity under the Revolver Loan[168]. - The company had approximately $7.6 million outstanding under the amended loan agreement with Berkshire Bank as of December 31, 2023[169]. - The weighted average interest rate on the Revolver Loan was 7.54% as of December 31, 2023[175]. - Total debt increased to $7.6 million as of December 31, 2023, from $6.1 million as of March 31, 2023[176]. - The company is exploring various means to strengthen its liquidity position, including amending its facility and seeking alternative financing[172]. - The company acknowledged a continuing event of default under the Loan Agreement due to failure to satisfy the Debt Service Coverage Ratio for the twelve-month period ending December 31, 2023[170]. - Long-term debt obligations totaled $7.6 million, classified as current due to probable future debt covenant violations[194]. - Outstanding unconditional contractual commitments for raw materials and supplies amounted to approximately $6.0 million, all due within the next twelve months[194]. - Lease obligations for buildings totaled $6.1 million through 2030, with approximately $0.9 million due annually for the next six years[194]. - The company has acknowledged an Existing Default due to failure to meet the required minimum Debt Service Coverage Ratio[191]. - There are no off-balance sheet arrangements as of December 31, 2023[193]. - The company has entered into discussions with the lender regarding the Existing Default but retains all rights and remedies under the Loan Documents[191].