Workflow
TechPrecision .(TPCS) - 2021 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Gross profit increased by $391,000, with gross margin improving to 19.8% from 8.6% compared to the same period one year ago [4] - Net sales were $3.6 million compared to $3.7 million in the same quarter a year ago, with a net loss of $48,000 compared to a net loss of $320,000 in the same quarter a year ago [6][8] - For the nine months ended December 31, 2020, revenue increased to $11.6 million, a 4% increase compared to the same period a year ago, with net income of $106,000 compared to a net loss of $390,000 for the same period in 2019 [9][10] Business Line Data and Key Metrics Changes - Sales to the precision industrial sector increased by $217,000, while defense sector sales decreased by $315,000 compared to the same quarter a year ago [6] - The company booked $7.2 million of new orders in the third quarter, increasing the sales order backlog to $18.4 million as of December 31, 2020 [5] 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 is focused on improving revenues and margins, expecting to carry these improvements into the last quarter of fiscal year 2021 and beyond [5] - The management is continuing due diligence and negotiations regarding the proposed acquisition of STADCO, but will not comment on the transaction [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in communicating the business's progress and backlog, emphasizing that they continue to win orders and see meaningful opportunities [22] - The CEO stated that the nuclear submarine manufacturing presents a long-term opportunity, indicating a 30-year demand for submarines [37] Other Important Information - The company generated approximately $400,000 of cash from operating activities during the third quarter, with a cash balance of $1.3 million as of December 31, 2020 [11] - Total debt stands at $3.8 million, with net debt at $2.6 million compared to $1.7 million at March 31, 2020 [11][12] Q&A Session Summary Question: Concerns about backlog and revenue consistency - The CEO acknowledged the frustration regarding the backlog and revenue, stating that they continue to book new orders and expect the backlog to convert into revenue over a period of more than 1 year and less than 3 years [23][24] Question: Potential dilution of shares - The CFO confirmed that there is a possibility of issuing additional shares related to creditor agreements, but did not provide specific details [33] Question: Future order trends - The CEO indicated that while the business is lumpy, there is a meaningful opportunity in the nuclear submarine sector, but could not forecast specific trends [36][37] Question: Competitive positioning - The CEO stated that the company is not losing business and has not been disadvantaged in its competitive position over the past two years [43] Question: Need for better communication with shareholders - A shareholder expressed the need for improved communication regarding the STADCO deal and overall company performance, emphasizing the importance of transparency [45]