8-K
Techprecision Corp (TPCS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securitiesand Exchange Act of 1934
Date of Report (Date of earliest event reported): September 16, 2024
TECHPRECISION CORPORATION
(Exact Name of Registrant as Specified in Charter)
| Delaware | 000-41698 | 51-0539828 |
|---|---|---|
| (State or Other Jurisdiction<br><br> <br>of Incorporation or Organization) | (Commission File Number) | (IRS Employer Identification No.) |
1 Bella Drive
Westminster, MA 01473
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(978) 874-0591
Securities registered or to be registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.0001 per share | TPCS | Nasdaq Capital Market |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On September 16, 2024, TechPrecision Corporation issued a press release announcing its financial results for the fourth quarter and fiscal year ended March 31, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The information in this Item 2.02 of Form 8-K and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference.
| Item 9.01 | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits |
| --- | --- |
| ExhibitNumber | Description |
| --- | --- |
| 99.1 | Press Release dated September 16, 2024 |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TECHPRECISION CORPORATION | ||
|---|---|---|
| Date: September 16, 2024 | By: | /s/ Barbara M. Lilley |
| Name: | Barbara M. Lilley | |
| Title: | Chief Financial Officer |
Exhibit 99.1
| Company Contact: | Investor Relations Contact: |
|---|---|
| Barbara M. Lilley | Hayden IR |
| Chief Financial Officer | Brett Maas |
| TechPrecision Corporation | Phone: 646-536-7331 |
| Phone: 978-883-5102 | Email: brett@haydenir.com |
| Email: lilleyb@ranor.com | Website: www.haydenir.com |
| Website: www.techprecision.com |
FOR IMMEDIATE RELEASE
TechPrecision Corporation Reports FY 2024 FourthQuarter and Year End Financial Results
Backlog increased to $50 million, Customer confidenceremains high
Westminster, MA – September 16, 2024 – TechPrecision Corporation (NASDAQ: TPCS) (“TechPrecision” or “the Company”), an industry-leading manufacturer of precision, large-scale fabricated and machined metal components and tested systems with customers in the defense and precision industrial sectors, today reported financial results for the fourth quarter and fiscal year ended March 31, 2024.
Due to restrictions as to what we can speak about while the Q1FY25 financials are pending, we will not hold a press conference until those are filed. We do not have a set date, but now that FY24 10K has been filed, we are focusing all resources on finishing that as quickly as possible. We are working hard to have that filed as soon as practicable. We also expect shortly to have an update pertaining to our efforts to fill in the financial staffing areas that have caused these problems so they do not reoccur.
“Customer confidence remains high as our backlog was $50.0 million at March 31, 2024,” Mr. Shen continued. “We expect to deliver our backlog over the course of the next one to three fiscal years with gross margin expansion.”
“Fourth quarter consolidated net sales were $8.6 million or 15% higher when compared to $7.5 million in the fiscal 2023 fourth quarter,” stated Alexander Shen, TechPrecision’s Chief Executive Officer. “The fourth quarter net sales were bolstered by better throughput with Stadco customer projects, as Stadco posted net sales of $4.6 million, or a 70% increase over the same period a year ago. Gross margin also expanded at Stadco in the fourth quarter. For the full fiscal year 2024, consolidated net sales and gross profit were $31.6 million and $4.1 million, respectively.”
“In the Fourth Quarter, due to our inability to close the Votaw Precision Manufacturing transaction, we recognized substantial one-time cash expenses totaling approximately $1.9 million. We also recognized in the quarter one-time non-cash expenses of $1.1 arising from the termination payment we made to Votaw. These sums fell directly to our bottom line for the fourth quarter and year end.”
The following summary compares the three and twelve months ended March 31, 2024 to the same prior year period:
Consolidated Financial Results - Fiscal 2024Three Months Ended March 31, 2024
| · | Net sales were $8.6 million, or 15% higher compared to the same period in fiscal 2023, primarily on better throughput and increased revenue at Stadco. |
|---|---|
| · | Cost of sales were $7.4 million, or 11% higher, due primarily to higher volume at Stadco. |
| · | Gross profit was $1.2 million, or 45% higher, primarily a result of improved throughput at Stadco. |
| · | SG&A totaled $3.7 million, due primarily to a $1.1 million breakup fee accrued in connection with the terminated Votaw acquisition and other related outside advisory costs. |
| · | Operating loss was $2.5 million compared to operating loss of $0.7 million in the same period a year ago. |
| · | Interest expense increased by $41,000 due to increased borrowing and higher interest rates under the revolver loan. Amortization of debt issue costs increased by $33,000. |
Consolidated Financial Results - Fiscal 2024 TwelveMonths Ended March 31, 2024
| · | Net sales were $31.6 million, or 1% higher when compared to the same period in fiscal 2023, on a different proportionate product mix. Stadco revenue increased $2.3 million or 19% versus the same period a year ago. |
|---|---|
| · | Cost of sales were $27.5 million, or 4% higher, primarily due to underapplied overhead at Ranor. |
| · | Gross profit was $4.1 million, or 16% lower, primarily due to lower revenue and volume at Ranor. |
| · | SG&A increased by $2.7 million or 46% compared to the same period last year, primarily for due dilgence costs of $1.9 million and a breakup fee of $1.1 million in connection with the terminated Votaw acquisition. Compensation and other office costs decreased by $0.3 million. |
| · | Operating loss was $4.6 million compared to operating loss of $1.1 million in the same period a year ago. |
| · | Interest expense increased by $119,000 due to increased borrowing and higher interest rates under the revolver loan. Amortization of debt issue costs increased by $47,000. |
Financial Position
On March 31, 2024, the Company had $0.1 million in cash and cash equivalents, a $0.4 million decrease since March 31, 2023. Working capital was negative $2.9 million at March 31, 2024 as the Company reclassified $7.6 million, or all of its long-term debt, to current liabilities because of a debt covenant violation. Working capital was positive $5.6 million and total debt was $6.1 million at March 31, 2023.
About TechPrecision Corporation
TechPrecision Corporation, through its wholly owned subsidiaries, Ranor, Inc. and Stadco, manufactures large-scale, metal fabricated and machined precision components and equipment. These products are used in a variety of markets including: defense, aerospace, nuclear, medical, and precision industrial. TechPrecision's goal is to be an end-to-end service provider to its customers by furnishing customized 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-lookingstatements” relating to the business of the Company and its subsidiary companies. All statements other than statements of currentor historical fact contained in this press release, including statements that express our intentions, plans, objectives, beliefs, expectations,strategies, predictions or any other statements relating to our future activities or other future events or conditions are forward-lookingstatements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,”“expect,” “intend,” “may,” “plan,” “predict,” “project,” “prospects,”“will,” “should,” “would” and similar expressions, as they relate to us, are intended to identifyforward-looking statements. These statements are based on current expectations, estimates and projections made by management about ourbusiness, our industry and other conditions affecting our financial condition, results of operations or business prospects. These statementsare not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actualoutcomes and results may differ materially from what is expressed or forecasted in, or implied by, the forward-looking statements dueto numerous risks and uncertainties. Factors that could cause such outcomes and results to differ include, but are not limited to, risksand uncertainties arising from: our reliance on individual purchase orders, rather than long-term contracts, to generate revenue; ourability to balance the composition of our revenues and effectively control operating expenses; external factors that may be outside ourcontrol, including health emergencies, like epidemics or pandemics, the conflicts in Eastern Europe and the Middle East, price inflation,interest rate increases and supply chain inefficiencies; the availability of appropriate financing facilities impacting our operations,financial condition and/or liquidity; our ability to receive contract awards through competitive bidding processes; our ability to maintainstandards to enable us to manufacture products to exacting specifications; our ability to enter new markets for our services; our relianceon a small number of customers for a significant percentage of our business; competitive pressures in the markets we serve; changes inthe availability or cost of raw materials and energy for our production facilities; restrictions in our ability to operate our businessdue to our outstanding indebtedness; government regulations and requirements; pricing and business development difficulties; changesin government spending on national defense; our ability to make acquisitions and successfully integrate those acquisitions with our business;our failure to maintain effective internal controls over financial reporting; general industry and market conditions and growth rates;and other risks discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and availableon its website (www.sec.gov). Any forward-looking statements speak only as of the date on which they are made, and we undertake no obligationto publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of thispress release, except as required by applicable law. Investors should evaluate any statements made by us in light of these importantfactors.
TECHPRECISION CORPORATION
CONSOLIDATED BALANCE SHEETS
| March 31, | |||||
|---|---|---|---|---|---|
| 2023 | |||||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | 138,402 | $ | 534,474 | ||
| Accounts receivable, net | 2,371,264 | 2,336,481 | |||
| Contract assets | 8,526,726 | 8,947,811 | |||
| Raw materials | 1,826,765 | 1,692,852 | |||
| Work-in-process | 1,422,938 | 719,736 | |||
| Other current assets | 563,688 | 348,983 | |||
| Total current assets | 14,849,783 | 14,580,337 | |||
| Property, plant and equipment, net | 14,797,991 | 13,914,024 | |||
| Right of use asset, net | 4,977,665 | 5,660,938 | |||
| Deferred income taxes | -- | 1,931,186 | |||
| Other noncurrent assets | 121,256 | 121,256 | |||
| Total assets | 34,746,695 | $ | 36,207,741 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||||
| Current liabilities: | |||||
| Accounts payable | 1,408,356 | $ | 2,224,320 | ||
| Accrued expenses | 4,262,486 | 2,533,185 | |||
| Contract liabilities | 3,787,933 | 2,333,591 | |||
| Current portion of long-term lease liability | 735,871 | 711,727 | |||
| Current portion of long-term debt, net | 7,558,683 | 1,218,162 | |||
| Total current liabilities | 17,753,329 | 9,020,985 | |||
| Long-term debt, net | -- | 4,749,139 | |||
| Long-term lease liability | 4,408,103 | 5,143,974 | |||
| Other noncurrent liability | 4,782,372 | 2,699,492 | |||
| Total liabilities | 26,943,804 | 21,613,590 | |||
| Stockholders’ Equity: | |||||
| Common stock - par value .0001 per share, shares authorized: March 31, 2024 – 50,000,000; Shares issued and outstanding: March 31, 2024 – 8,777,432; March 31, 2023 – 8,613,408 | 878 | 861 | |||
| Additional paid in capital | 15,200,624 | 14,949,729 | |||
| Retained earnings (accumulated deficit) | (7,398,611 | ) | (356,439 | ) | |
| Total stockholders’ equity | 7,802,891 | 14,594,151 | |||
| Total liabilities and stockholders’ equity | 34,746,695 | $ | 36,207,741 |
All values are in US Dollars.
TECHPRECISION CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended <br>March 31, | Twelve Months Ended <br>March 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Net sales | $ | 8,600,070 | $ | 7,505,265 | $ | 31,591,059 | $ | 31,431,614 | ||||
| Cost of sales | 7,371,662 | 6,657,381 | 27,472,883 | 26,527,953 | ||||||||
| Gross profit | 1,228,408 | 847,883 | 4,118,176 | 4,903,661 | ||||||||
| Selling, general and administrative | 3,687,393 | 1,581,986 | 8,750,376 | 6,008,881 | ||||||||
| Loss from operations | (2,458,985 | ) | (734,103 | ) | (4,632,200 | ) | (1,105,220 | ) | ||||
| Other income | 2,486 | 253 | 43,363 | 40,842 | ||||||||
| Interest expense | (168,966 | ) | (94,631 | ) | (521,108 | ) | (355,608 | ) | ||||
| Refundable employee retention tax credits | -- | 12,518 | -- | 636,564 | ||||||||
| Total other (expense) income | (166,480 | ) | (81,859 | ) | (477,745 | ) | 321,798 | |||||
| Loss before income taxes | (2,625,465 | ) | (815,962 | ) | (5,109,945 | ) | (783,422 | ) | ||||
| Income tax expense | 2,495,585 | 186,798 | 1,932,227 | 195,584 | ||||||||
| Net loss | $ | (5,121,050 | ) | $ | (1,002,761 | ) | $ | (7,042,172 | ) | $ | (979,006 | ) |
| Net loss per share basic | $ | (0.59 | ) | $ | (0.12 | ) | $ | (0.81 | ) | $ | (0.11 | ) |
| Net loss per share diluted | $ | (0.59 | ) | $ | (0.12 | ) | $ | (0.81 | ) | $ | (0.11 | ) |
| Weighted average shares outstanding – basic | 8,720,603 | 8,611,742 | 8,717,160 | 8,595,992 | ||||||||
| Weighted average shares outstanding - diluted | 8,720,603 | 8,611,742 | 8,717,160 | 8,595,992 |
TECHPRECISION CORPORATION
NET SALES, COST OF SALES, GROSS PROFIT BY SEGMENT
| Three Months Ended<br> <br>March 31, 2024 | Three Months Ended<br> <br>March 31, 2023 | Changes | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in thousands) | Amount | Percent of<br> <br>Net sales | Amount | Percent of<br> <br>Net sales | Amount | Percent | ||||||||||||
| Net sales | ||||||||||||||||||
| Ranor | $ | 4,529 | 56 | % | $ | 4,786 | 64 | % | $ | (257 | ) | (5 | )% | |||||
| Stadco | 4,625 | 44 | % | 2,719 | 36 | % | 1,906 | 70 | % | |||||||||
| Intersegment elimination | (554 | ) | -- | % | -- | -- | % | (554 | ) | nm | % | |||||||
| Consolidated Net sales | $ | 8,600 | 100 | % | $ | 7,505 | 100 | % | $ | 1,095 | 15 | % | ||||||
| Cost of sales | ||||||||||||||||||
| Ranor | $ | 3,555 | 41 | % | $ | 3,356 | 45 | % | $ | 199 | 6 | % | ||||||
| Stadco | 3,817 | 45 | % | 3,301 | 44 | % | 516 | 16 | % | |||||||||
| Consolidated Cost of sales | $ | 7,372 | 86 | % | $ | 6,657 | 89 | % | $ | 715 | 11 | % | ||||||
| Gross profit (loss) | ||||||||||||||||||
| Ranor | $ | 845 | 10 | % | $ | 1,430 | 19 | % | $ | (585 | ) | (18 | )% | |||||
| Stadco | 383 | 4 | % | (582 | ) | (8 | )% | 965 | 166 | % | ||||||||
| Consolidated Gross profit | $ | 1,228 | 14 | % | $ | 848 | 11 | % | $ | 380 | 45 | % | ||||||
| Twelve Months Ended<br> <br>March 31, 2024 | Twelve Months Ended<br> <br>March 31, 2023 | Changes | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (dollars in thousands) | Amount | Percent of<br> <br>Net sales | Amount | Percent of<br> <br>Net sales | Amount | Percent | ||||||||||||
| Net sales | ||||||||||||||||||
| Ranor | $ | 17,821 | 56 | % | $ | 19,182 | 61 | % | $ | (1,361 | ) | (7 | )% | |||||
| Stadco | 14,567 | 46 | % | 12,250 | 39 | % | 2,317 | 19 | % | |||||||||
| Intersegment elimination | (797 | ) | (2 | )% | -- | -- | % | (797 | ) | nm | % | |||||||
| Consolidated Net sales | $ | 31,591 | 100 | % | $ | 31,432 | 100 | % | $ | 159 | 1 | % | ||||||
| Cost of sales | ||||||||||||||||||
| Ranor | $ | 13,048 | 41 | % | $ | 12,205 | 39 | % | $ | 843 | 7 | % | ||||||
| Stadco | 14,425 | 46 | % | 14,323 | 45 | % | 102 | 1 | % | |||||||||
| Consolidated Cost of sales | $ | 27,473 | 87 | % | $ | 26,528 | 84 | % | $ | 945 | 4 | % | ||||||
| Gross profit (loss) | ||||||||||||||||||
| Ranor | $ | 4,548 | 14 | % | $ | 6,977 | 22 | % | $ | (2,429 | ) | (35 | )% | |||||
| Stadco | (430 | ) | (1 | )% | (2,073 | ) | (6 | )% | 1,643 | 79 | % | |||||||
| Consolidated Gross profit | $ | 4,118 | 13 | % | $ | 4,904 | 16 | % | $ | (786 | ) | (16 | )% |
nm – not meaningful
TECHPRECISION CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Years Ended March 31, | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
| Net loss | $ | (7,042,172 | ) | $ | (979,006 | ) |
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||
| Depreciation and amortization | 2,429,377 | 2,217,472 | ||||
| Amortization of debt issue costs | 106,840 | 59,916 | ||||
| Gain on disposal of equipment | (39,129 | ) | (468 | ) | ||
| Stock based compensation and restricted stock awards | 284,925 | 253,079 | ||||
| Change in contract loss provision | 190,370 | (237,318 | ) | |||
| Deferred income taxes | 1,931,186 | 195,584 | ||||
| Stock based acquisition termination fee | 1,116,800 | -- | ||||
| Stock based expense for contingent consideration | -- | 56,310 | ||||
| Change in fair value for contingent consideration | -- | (63,436 | ) | |||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | (34,783 | ) | 672,768 | |||
| Contract assets | 421,085 | (597,580 | ) | |||
| Work-in-process and raw materials | (837,115 | ) | (177,914 | ) | ||
| Other current assets | (214,705 | ) | 1,072,476 | |||
| Accounts payable | (815,964 | ) | (1,202,601 | ) | ||
| Accrued expenses | 388,116 | (1,094,137 | ) | |||
| Contract liabilities | 1,454,342 | 568,273 | ||||
| Other noncurrent liabilities | 1,965,691 | 2,394,420 | ||||
| Net cash provided by operating activities | 1,304,864 | 3,137,838 | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
| Purchases of property, plant, and equipment | (3,230,237 | ) | (2,325,301 | ) | ||
| Proceeds from fixed assets insurance settlement | 61,944 | -- | ||||
| Proceeds from sale of fixed assets | -- | 7,000 | ||||
| Net cash used in investing activities | (3,168,293 | ) | (2,318,301 | ) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
| Proceeds from revolver loan | 7,160,000 | 10,885,150 | ||||
| Repayment of revolver loan | (5,025,000 | ) | (11,522,152 | ) | ||
| Debt issuance costs | (50,363 | ) | (57,723 | ) | ||
| Principal payments for leases | (17,185 | ) | (36,572 | ) | ||
| Repayment of long-term debt | (600,095 | ) | (605,905 | ) | ||
| Net cash provided by (used in) financing activities | 1,467,357 | (1,337,202 | ) | |||
| Net decrease in cash and cash equivalents | (396,072 | ) | (517,665 | ) | ||
| Cash and cash equivalents, beginning of period | 534,474 | 1,052,139 | ||||
| Cash and cash equivalents, end of period | $ | 138,402 | $ | 534,474 |
TECHPRECISION CORPORATION
SUPPLEMENTAL INFORMATION
Reconciliation of EBITDA to Net Loss
The following table provides a reconciliation of EBITDA to net loss, the most directly comparable U.S. GAAP measure reported in our consolidated financial statements for the following periods:
| Three Months ended March 31, | Twelve Months ended March 31, | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (dollars in thousands) | 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||||||
| Net loss | $ | (5,121 | ) | $ | (1,003 | ) | $ | (4,118 | ) | $ | (7,042 | ) | $ | (979 | ) | $ | (6,063 | ) |
| Income tax expense | 2,496 | 187 | 2,309 | 1,932 | 196 | 1,736 | ||||||||||||
| Interest expense (1) | 169 | 95 | 74 | 521 | 356 | 165 | ||||||||||||
| Depreciation and amortization | 670 | 551 | 119 | 2,429 | 2,217 | 212 | ||||||||||||
| EBITDA | $ | (1,786 | ) | $ | (170 | ) | $ | (1,616 | ) | $ | (2,160 | ) | $ | 1,790 | $ | (3,950 | ) | |
| (1) | Includes amortization of debt issue costs. | |||||||||||||||||
| --- | --- |