TECHPRECISION CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - August 18, 2014

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Exhibit 99.1
 
 
Company Contact:
Investor Relations Contact:
Mr. Richard F. Fitzgerald
Hayden IR
Chief Financial Officer
Brett Maas
TechPrecision Corporation
Phone: 1-646-536-7331
Tel: 1-484-693-1702
Email: brett@haydenir.com
Email: Fitzgeraldr@techprecision.com
Website:  www.haydenir.com
Website:  www.techprecision.com
  

FOR IMMEDIATE RELEASE

TechPrecision Corporation Reports
First Quarter 2015 Financial Results

Center Valley, PA – August 18, 2014 – TechPrecision Corporation (OTCQB: TPCS) (“TechPrecision” or “the Company”), an industry leading global manufacturer of precision, large-scale fabricated and machined metal components and tested systems with customers in the naval/maritime, energy and precision industrial sectors, today reported financial results for the first quarter of fiscal year 2015, the period ended June 30, 2014.
 
First Quarter Recap
 
“TechPrecision continues to take the steps necessary to regain a stabilized and consistent revenue stream, higher gross margins, positive cash flow and a return to profitability,” commented Len Anthony, TechPrecision’s Executive Chairman. “I am encouraged by the sequential improvement we delivered in revenues compared to the fiscal fourth quarter of 2014, and we continue to target higher sales and production volumes to more fully exploit our capacity at Ranor. In comparison with last year’s first quarter sales volume, an increase in naval/maritime sales was offset by lower sales volume with energy and precision industrial customers, even as our customer base remains committed to sourcing TechPrecision for its consistently high quality products.”

Mr. Anthony continued, “Alexander Shen, who assumed the role of Ranor’s President in June, has been focused on achieving rapid improvement in productivity and meeting our core customers’ requirements and is working to establish a strategy that leads Ranor back to stability and profitability. Additionally, we continue to work on strengthening our liquidity and financial condition. On August 12, 2014, we executed a new forbearance agreement, effective as of August 1, 2014 and extending the new forbearance period until September 30, 2014 with our legacy bank as the previous forbearance agreement expired on July 31, 2014. We continue to pursue appropriate long-term financing facilities that will allow us flexibility in delivering our superior products to the Company’s blue chip customer base. Opportunities to recover some of the contract losses incurred the last two quarters remains a key focus of our senior team.”
 
First Fiscal Quarter 2015 Summary: Three Months Ended June 30
 
·  
Net sales decreased 12% to $6.2 million compared to $7.1 million in the year-ago quarter but increased 72% from $3.6 million in revenues sequentially from fiscal Q4 of 2014.
·  
Cost of goods sold included $0.4 million of contract losses recorded in the quarter ended June 30, 2014.
 
 
 
 
 
 
 
 
 
 
·  
The Company is engaged in ongoing efforts to recover significant portions of the contract losses recorded within the fourth quarter of fiscal 2014 and the first quarter of fiscal 2015.
·  
Due to the contract losses and lower revenue, gross profit was $0.2 million, or 3.5% gross margin, compared to gross profit of $0.4 million or 5.9% gross profit margin, in the year-ago quarter but up sequentially from a negative gross profit of $2.7 million in the fourth quarter of fiscal 2014.
·  
Selling, general and administrative expenses decreased by approximately 25%, or $0.4 million, to $1.3 million from $1.7 million in the same quarter last year and sequentially decreased by 7% from $1.4 million for the fourth quarter of fiscal 2014.
·  
The net loss was $1.3 million for the first quarter compared to a net loss of $1.4 million in the prior year first quarter and compared sequentially to a net loss of $4.1 million in the fourth quarter of fiscal 2014.
 
Balance Sheet Summary
 
At June 30, 2014, TechPrecision had negative working capital of $3.4 million as compared with negative working capital of $2.0 million at March 31, 2014. As of June 30, 2014, the Company had $0.9 million in cash and cash equivalents compared to $1.1 million at March 31, 2014.
 
Teleconference Information
 
The Company will hold a conference call at 4:30 p.m. Eastern (U.S.) time on Monday, August 18, 2014. To participate in the live conference call, please dial 1-877-548-7901 five to 10 minutes prior to the scheduled conference call time.  International callers should dial 1-719-325-4789. When prompted by the operator, mention Conference Passcode 6955783.
 
A replay will be available for one week starting on Monday, August 18, 2014, at 7:30 p.m. Eastern Time. To access the replay, dial 1-877-870-5176 or 1-858-384-5517. When prompted, enter Conference Passcode 6955783.
The call will also be available live by webcast at TechPrecision Corporation’s website, www.techprecision.com, and will also be available over the Internet and accessible at http://public.viavid.com/index.php?id=110539.
 
About TechPrecision Corporation
 
TechPrecision Corporation, through its wholly owned subsidiaries, Ranor, Inc., and Wuxi Critical Mechanical Components Co., Ltd., globally manufactures large-scale, metal fabricated and machined precision components and equipment. These products are used in a variety of markets including: alternative energy (Solar and Wind), medical, nuclear, defense, industrial, and aerospace to name a few. TechPrecision’s goal is to be an end-to-end global service provider to its customers by furnishing customized and integrated “turn-key” solutions for completed products requiring custom fabrication and machining, assembly, inspection and testing. To learn more about the Company, please visit the corporate website at http://www.techprecision.com. Information on the Company’s website or any other website does not constitute a part of this press release.
 
 
 
 
 
 

 
Safe Harbor Statement
 
This release contains certain "forward-looking statements" relating to the business of the Company and its subsidiary companies. These forward looking statements are often identified by the use of forward-looking terminology such as "believes,” expects" or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including recurring operating losses and the availability of appropriate financing facilities impacting our ability to continue as a going concern, to change the composition of our revenues and effectively reduce operating expenses, the Company’s ability to generate business from long-term contracts rather than individual purchase orders, its dependence upon a limited number of customers, its ability to successfully bid on projects, and other risks discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website (www.sec.gov). All forward-looking statements attributable to the Company or to persons acting on its behalf are expressly qualified in their entirety by these factors other than as required under the securities laws. The Company does not assume a duty to update these forward-looking statements.


-- Tables Follow --
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

TECHPRECISION CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
 

   
Three Months Ended June 30,
  
   
2014
    
2013
  
Net sales
  
$
6,230,341
    
$
7,096,692
  
Cost of sales
    
6,012,101
      
6,676,449
  
Gross profit
    
218,240
      
420,243
  
Selling, general and administrative 
    
1,328,773
      
1,770,082
  
Loss from operations
    
(1,110,533
)
    
(1,349,839
)
  Other income (expense)
    
53
      
(7,552
)
  Interest expense
    
(160,589
)
    
(70,127
)
  Interest income
    
--
      
3,613
  
Total other expense, net
    
(160,536
)
    
(74,066
)
Loss before income taxes
    
(1,271,069
)
    
(1,423,905
)
Income tax expense
    
--
      
--
  
Net loss
  
$ 
(1,271,069
)
    
(1,423,905
)
Net loss per share (basic)
  
$
(0.05
)
  
$
(0.07
)
Net loss per share (diluted)
  
$
(0.05
)
  
$
(0.07
)
Weighted average number of shares outstanding (basic)
    
24,010,264
      
19,956,871
  
Weighted average number of shares outstanding (diluted)
    
24,010,264
      
19,956,871
  
 

 
 
 
 
 
 
 
 



TECHPRECISION CORPORATION
CONSOLIDATED BALANCE SHEETS
 
   
June 30,
2014
    
March 31,
2014
  
ASSETS
            
Current assets:
            
Cash and cash equivalents
  
$
886,888
    
$
1,086,701
  
Accounts receivable, less allowance for doubtful accounts of $25,010 in 2014 and 2013
    
3,220,715
      
2,280,469
  
Costs incurred on uncompleted contracts, in excess of progress billings
    
4,696,038
      
5,258,002
  
Inventories- raw materials
    
242,179
      
293,326
  
Income taxes receivable
    
8,062
      
8,062
  
Current deferred taxes
    
991,096
      
991,096
  
Other current assets
    
457,248
      
461,245
  
   Total current assets
    
10,502,226
      
10,378,901
  
Property, plant and equipment, net
    
6,327,789
      
6,489,212
  
Other noncurrent assets, net
    
400,493
      
105,395
  
   Total assets
  
$
17,230,508
    
$
16,973,508
  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY:
                
Current liabilities:
                
Accounts payable
  
$
3,810,319
    
$
2,888,385
  
Accrued expenses
    
3,815,754
      
3,893,028
  
Deferred revenues
    
651,923
      
1,461,689
  
Debt
    
5,584,459
      
4,169,771
  
   Total current liabilities
    
13,862,455
      
12,412,873
  
Long-term debt, including capital leases
    
35,278
      
38,071
  
Noncurrent deferred taxes
    
991,096
      
991,096
  
                 
Stockholders’ Equity:
                
Preferred stock- par value $.0001 per share, 10,000,000 shares authorized,
                
  of which 9,890,980 are designated as Series A Preferred Stock, with
                
  1,927,508 and 2,477,508 shares issued and outstanding at June 30, 2014 and March 31, 2014,
                
  (liquidation preference of $549,340 and $706,090 at June 30, 2014 and March 31, 2014)
    
524,210
      
644,110
  
Common stock -par value $.0001 per share, authorized, 90,000,000 shares
                
   issued and outstanding, 24,669,958 shares at June 30, 2014
                
   and 23,951,004 at March 31, 2014
    
2,467
      
2,395
  
Additional paid in capital
    
6,293,864
      
6,105,211
  
Accumulated other comprehensive loss
    
(42,642
)
    
(55,097
)
Accumulated deficit
    
(4,436,220
)
    
(3,165,151
)
   Total stockholders’ equity
    
2,341,679
      
3,531,468
  
   Total liabilities and stockholders’ equity
  
$
17,230,508
    
$
16,973,508
  

 
 

 
 
 
 
TECHPRECISION CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 
   
Three Months Ended June 30,
  
   
2014
    
2013
  
CASH FLOWS FROM OPERATING ACTIVITIES
            
Net loss
  
$
(1,271,069
)
  
$
(1,423,905
)
Adjustments to reconcile net loss to net cash used in operating activities:
                
Depreciation and amortization
    
255,645
      
253,833
  
Stock based compensation expense
    
68,824
      
126,092
  
Provision for contract losses
    
366,951
      
    687,088
  
Changes in operating assets and liabilities:
                
Accounts receivable
    
(940,242
) 
    
521,202
  
Costs incurred on uncompleted contracts, in excess of progress billings
    
561,964
      
1,047,590
  
Inventories – raw materials
    
51,153
      
(10,175
)
Other current assets
    
4,001
      
138,184
  
Other noncurrent assets
    
(335,226
) 
    
--
  
Accounts payable
    
921,933
      
(1,580,512
)
Accrued expenses
    
(431,784
)
    
(13,103
)
Deferred revenues
    
(809,766
)
    
(151,355
)
   Net cash used in operating activities
    
(1,557,616
) 
    
(405,061
)
                 
CASH FLOWS FROM INVESTING ACTIVITIES
                
Purchases of property, plant and equipment
    
(54,093
)
    
(56,424
)
   Net cash used in investing activities
    
(54,093
)
    
(56,424
)
                 
CASH FLOWS FROM FINANCING ACTIVITIES
                
Borrowings of long-term debt
    
4,150,000
      
--
  
Repayment of long-term debt
    
(2,738,105
)
    
(172,618
)
   Net cash provided by (used in) financing activities
    
1,411,895
      
(172,618
)
Effect of exchange rate on cash and cash equivalents
    
1
      
3,496
  
Net decrease in cash and cash equivalents
    
(199,813
) 
    
(630,607
)
Cash and cash equivalents, beginning of period
  
$ 
1,086,701
    
$ 
3,075,376
  
Cash and cash equivalents, end of period
  
$
886,888
    
$
2,444,769
  
                 







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