• Consolidated Revenue: $7.6 million, a decrease of less than 1% compared to the fiscal 2024 third quarter.
• Ranor Revenue: $4.3 million, a slight increase from the same quarter a year ago.
• Ranor Operating Profit: $1.05 million.
• STADCO Revenue: $3.3 million, a slight decrease of 2% compared to the same quarter one year ago.
• STADCO Operating Loss: $0.85 million.
• Consolidated Gross Profit: $1 million, a 15% decrease from the same quarter a year ago.
• Consolidated SG&A: $1.7 million, $0.5 million lower than the same quarter a year ago.
• Consolidated Operating Loss: $0.7 million, a 30% decrease from the same quarter a year ago.
• Interest Expense: Increased by 28% due to increased borrowing under the revolver loan.
• Net Loss: $0.8 million or $0.08 per share, basic and fully diluted.
• Consolidated Backlog: $45.5 million as of December 31, 2024.
• Total Debt: $7.4 million as of December 31, 2024.
• Cash Balance: $165,000 as of December 31, 2024.
• Working Capital: Negative due to classification of all long-term debt as current because of debt covenant violations.

• Warning! GuruFocus has detected 6 Warning Signs with TPCS.

Release Date: April 08, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Techprecision Corp (NASDAQ:TPCS) has appointed a seasoned CFO, Phillip Podgorski, with extensive experience in the defense sector, which is expected to enhance financial strategy and operations.
• The Ranor segment reported an operating profit of $1.05 million, demonstrating resilience despite seasonal challenges.
• Customer confidence remains high with a consolidated backlog of $45.5 million, indicating strong future revenue potential.
• The company has secured $21 million in grant funding for its Ranor subsidiary, enhancing its capacity to support the naval submarine manufacturing sector.
• Techprecision Corp (NASDAQ:TPCS) is actively pursuing new programs in the defense sector, which are expected to be profitable and contribute to future growth.

Negative Points

• Consolidated revenue for the third quarter was $7.6 million, a slight decrease compared to the previous year, indicating stagnant growth.
• STADCO segment reported an operating loss of $0.85 million due to legacy pricing issues and unfavorable project mix.
• Consolidated gross profit decreased by 15% compared to the same quarter a year ago, primarily due to higher production costs at STADCO.
• Interest expense increased by 28% due to higher borrowing under the revolver loan, impacting net profitability.
• The company faces ongoing challenges with legacy pricing issues at STADCO, which continue to affect financial performance and require resolution.

Q & A Highlights

Q: How much longer will it take to work through the previously mispriced contracts at STADCO, and is there new profitable business being secured? A: Alexander Shen, CEO, explained that while they are working on resolving legacy pricing issues, the timeline is uncertain due to the complexity and slow pace of the defense industry. However, STADCO is securing new profitable contracts and actively working on them alongside legacy issues.

Q: Are the legacy pricing issues at STADCO linked to specific production lots, and will moving to new lots improve profitability? A: Alexander Shen confirmed that the issues are linked to specific production lots, and transitioning to new lots has shown some traction in improving profitability, although it remains a complex process.

Q: Will STADCO be able to meet the demand for the CH-53K program over the next 21 months? A: Alexander Shen assured that STADCO can meet the required capacity for the CH-53K program and is currently delivering as needed.

Q: Is TechPrecision pursuing new programs that are strategically important to the US defense market? A: Alexander Shen stated that they are gaining traction on new programs, including those in the Navy and aerospace sectors, which should be profitable and strategically significant.

Q: What is the current backlog, and how is it distributed between Ranor and STADCO? A: Alexander Shen reported a consolidated backlog of $45.5 million as of December 31, 2024, with an approximately even split between Ranor and STADCO.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.