TechPrecision .(US:TPCS)2023-06-15 23:44Financial Data and Key Metrics Changes - Ranor's revenue for fiscal year 2023 was $19.2 million, up from $14.6 million in fiscal year 2022, representing a 32% improvement year-over-year [4] - Gross profit for Ranor doubled in fiscal year 2023 to $7.0 million from $3.5 million in fiscal year 2022 [4] - Net sales for the 12 months ended March 31, 2023, were $31.4 million compared to $22.3 million in the same period a year ago, an increase of $9.1 million [8] - Operating loss was $1.1 million compared to an operating loss of $1.6 million in the prior year [9] - Cash balance at March 31, 2023, was $531,000 compared to $1.1 million at March 31, 2022 [10] - Working capital was $5.6 million at March 31, 2023, compared to $2.8 million in March 31, 2022 [10] Business Line Data and Key Metrics Changes - Stadco's revenue was 58% higher year-over-year, primarily due to having a full year of Stadco financial results [17] - Gross profit for the fourth quarter was $848,000, 25% lower compared to the same quarter a year ago due to Stadco's production issues [20] - SG&A expenses increased by $1.1 million in fiscal 2023, primarily due to the inclusion of Stadco for the full fiscal reporting period [21] Market Data and Key Metrics Changes - The backlog was $44 million at March 31, 2023, with $17.7 million at Ranor and $26.3 million at Stadco [6] - Ranor's gross margin percentage increased from 24% to 36% in fiscal 2023, while Stadco's performance resulted in only a slight increase in the consolidated gross margin percentage from 15.2% to 15.6% [21] Company Strategy and Development Direction - The company aims to secure and maintain enduring partnerships with customers, focusing on the defense sector, particularly naval submarine and military aircraft manufacturing [12][24] - Management emphasized a sharp focus on tactical execution and risk mitigation to meet customer expectations and retain customer confidence [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in business prospects, noting that customer confidence remains strong, as evidenced by new orders and a solid backlog [6][12] - The company acknowledged production issues at Stadco but indicated that these problems have been resolved and that they are focused on enhancing manufacturing capabilities [17][50] Other Important Information - The company recorded a pre-tax loss of $783,000 for fiscal 2023 compared with a pre-tax loss of $542,000 in fiscal 2022 [42] - Fiscal 2023 included a one-time $637,000 employee retention tax credit refund, while fiscal 2022 included a gain of $1.3 million for loan forgiveness under the Paycheck Protection Program [42] Q&A Session Summary Question: What caused the downtime at Stadco? - Management indicated that the significant downtime was not anticipated and involved multiple machines being down simultaneously, which was characterized as a perfect storm [28][50] Question: What are the implications of the recent reverse split and uplisting on investor relations? - Management noted that they need to reassess their interaction with shareholders and consider increasing outreach activities [48] Question: Can Stadco achieve margins similar to Ranor? - Management expressed uncertainty about the timeline for Stadco to reach Ranor-like margins, acknowledging the challenges but maintaining a belief in the potential for improvement [64][87] Question: Are there opportunities for commercial projects or adjacent acquisitions? - Management confirmed they are open to pursuing opportunities in the precision industrial sector and are actively seeking adjacent acquisitions [160][193]