TechPrecision .(US:TPCS)2021-12-08 00:13Financial Data and Key Metrics Changes - Preliminary net sales for Q2 FY2022 were $4.8 million, a slight increase from $4.7 million in the same quarter last year [9] - Gross profit margin decreased to 19.4% from 23.9% year-over-year, primarily due to higher labor and overhead costs [9] - The company recorded a net loss of $220,000 in Q2 FY2022 compared to a net income of $271,000 in the same quarter last year [11] - Total debt increased to $7.2 million, up $3.4 million from March 31, 2021 [14] - Cash balance decreased to $281,000 from $2.1 million at March 31, 2021 [15] Business Line Data and Key Metrics Changes - The sales order backlog totaled $26.4 million as of September 30, 2021, including STADCO backlog [7] - The company booked over $13 million in new orders since the end of Q2 [8] Market Data and Key Metrics Changes - The company is focusing on the defense and aerospace industries, with STADCO being a key supplier for major OEMs and prime contractors [17] - STADCO has a long history of supplying critical parts for various military and commercial aircraft programs, including the Sikorsky CH-53 helicopter [19] Company Strategy and Development Direction - The company is in the process of integrating STADCO and expects continued revenue growth from this acquisition [8] - Management emphasized the importance of focusing on existing customers and opportunities rather than diversifying into new segments at this time [82] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business prospects post-acquisition and highlighted the strong order backlog as a positive indicator [8][17] - The company is closely monitoring regulatory changes related to COVID-19 vaccination mandates and their potential impact on staffing and production [60][62] Other Important Information - The results presented are preliminary and subject to revision until the company files its Quarterly Report on Form 10-Q [24] Q&A Session Summary Question: Clarification on backlog composition - Management stated they will not break down the backlog between Ranor and STADCO at this time [27] Question: Refinancing of long-term debt - Management confirmed that the current portion of long-term debt has not been refinanced since September 30, and they are looking to refinance [32][34] Question: Impact of Israeli government approval on CH-53K orders - Management did not have access to specific timing information regarding the Israeli government's approval for additional CH-53K helicopters [38] Question: Production ramp-up at Sikorsky - Management indicated that production at Sikorsky is expected to increase to as many as 24 CH-53K helicopters per year [40] Question: Concerns about STADCO's operational issues - Management acknowledged the acquisition is a turnaround and emphasized careful management of the integration process [53] Question: Vaccination mandates and staffing - Management is encouraging vaccination among employees and monitoring regulatory changes closely [60][62] Question: Future growth opportunities outside current programs - Management believes there are significant opportunities with existing customers and will consider new customers opportunistically [82]