8-K - TPCS - Equibles

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): December 7, 2021

TECHPRECISION CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	000-51378	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
N/A	N/A	N/A

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 December 7, 2021, TechPrecision Corporation issued a press release announcing its financial results for the second quarter ended September 30, 2021. 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
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Exhibit<br><br> <br>Number	Description
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99.1	Press Release dated December 7, 2021
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: December 7, 2021	By:	/s/ Thomas Sammons
	Name:	Thomas Sammons
	Title:	Chief Financial Officer

Exhibit 99.1

Company Contact:	Investor Relations Contact:
Mr. Thomas Sammons	Hayden IR
Chief Financial Officer	Brett Maas
TechPrecision Corporation	Phone: 646-536-7331
Phone: 978-883-5109	Email: brett@haydenir.com
Email: sammonst@ranor.com	Website: www.haydenir.com
Website: www.techprecision.com

FOR IMMEDIATE RELEASE

TechPrecision Corporation Reports Second QuarterFiscal 2022 Financial Results

Second quarter focused on acquisition and integrationof STADCO

Westminster,MA – December 7, 2021 – TechPrecision Corporation (OTCQB: 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 Fiscal 2022 second quarter ended September 30, 2021.

Second quarter net sales were $4.8 million or 2% higher when compared to $4.7 million in the same quarter a year ago. Gross profit was 18% lower at $0.9 million when compared to gross profit of $1.1 million for the second quarter a year ago, but 12% higher than the first quarter of fiscal 2022.

“Our financials for the second quarter of fiscal 2022 include 36 days of activity from our newly acquired subsidiary, STADCO. As we began to integrate the STADCO operations, we recognized additional revenue, but absorbed additional costs that dampened our margins, and added to our selling, general and administrative, and interest expenses,” stated Alexander Shen, TechPrecision’s Chief Executive Officer. “Our backlog for sales orders was $26.4 at September 30, 2021, which included the addition of STADCO backlog.”

“Key personnel and assets remain in place as we begin to integrate the STADCO business,” added Mr. Shen. “We believe business prospects are good as we expect higher revenues for the Company in future quarters.”

Second Quarter of Fiscal 2022 Financial Results

·	Net sales, including STADCO revenue for the 36-day period, were $4.8 million, or 2% higher when compared<br> to the same quarter a year ago.
·	Cost of sales were $3.9 million, higher by 8% than the same quarter<br> a year ago.
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·	Gross profit was $0.9, a decrease of 18% compared to $1.1 million in<br> the same quarter last year.
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·	SG&A increased by $0.5 million, primarily on higher expenses due<br> to the STADCO acquisition, including approximately $234,000 of acquisition related costs.
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·	Operating loss was $243,000, compared to operating income $433,000,<br> in the same quarter a year ago.
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·	Interest expense increased by 34% as we added more debt to the balance<br> sheet in August 2021.
·	Net loss was $220,000 compared to net income of $271,000 for the same<br> period a year ago.
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·	EBITDA* was $0.1 million, compared to $0.6 million in the same prior<br> year period.

* EBITDA is a non-GAAP financialmeasure, which is reconciled to the most directly comparable GAAP financial measure below, under the caption “Reconciliation ofEBITDA to Net Income (Loss).”

Six Months of Fiscal 2022 Financial Results

·	Net sales, including STADCO revenue for the 36-day period, were $8.2 million, or 3% higher when compared<br> to $8.0 million in the same period a year ago.
·	Gross profit was $1.8 million, lower by 3% when compared to the same<br> period last year.
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·	SG&A increased by $0.4 million, primarily on higher integration<br> expenses due to the acquisition of STADCO.
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·	Operating loss was $143,000<br> compared to operating income of $337,000 in the same period a year ago.
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·	Interest expense compared<br> favorably with the same period a year ago when we had higher average levels of debt.
·	We recorded a gain of $1.3 million from the PPP loan forgiveness.
·	Net income of $1.2 million compared to net income of $0.2 million in<br> the same period a year ago.
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·	EBITDA* was $1.7 million compared to $0.7 million in the same period<br> a year ago.
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* EBITDA is a non-GAAP financialmeasure, which is reconciled to the most directly comparable GAAP financial measure below, under the caption “Reconciliation ofEBITDA to Net Income (Loss).”

Financial Position

At September 30, 2021, TechPrecision had $0.3 million in cash and cash equivalents, a decrease of $1.8 million since March 31, 2021. In addition to using available cash, we sourced $7.6 million in cash from new debt and the sale of equity to help fund approximately $7.9 million in cash used to close the STADCO acquisition.

Working capital was $4.0 million at September 30, 2021 compared to $5.2 million at March 31, 2021. We have access to additional capital via the Company’s existing revolver loan should management determine it needs to bolster liquidity.

Teleconference Information

The Company will hold a conference call at 4:30 p.m. Eastern (U.S.) time on December 7, 2021. To participate in the live conference call, please dial 1-888-506-0062 five to 10 minutes prior to the scheduled conference call time. International callers should dial 1-973-528-0011. When prompted, reference TechPrecision and entry code 662254.

A replay will be available until December 21, 2021. To access the replay, dial 1-877-481-4010 or 1-919-882-2331. When prompted, enter Conference Passcode 43688.

The call will also be available over the Internet and accessible at: https://www.webcaster4.com/Webcast/Page/2198/43688.

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, industrial, and medical. 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,” “will,” “should,” “would” and similar expressions, as they relate to us, are intended to identify forward-looking statements.These statements are based on current expectations, estimates and projections made by management about our business, our industry andother conditions affecting our financial condition, results of operations or business prospects. These statements are not guaranteesof future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes andresults may differ materially from what is expressed or forecasted in, or implied by, the forward-looking statements due to numerousrisks and uncertainties. Factors that could cause such outcomes and results to differ include, but are not limited to, risks and uncertaintiesarising from: our reliance on individual purchase orders, rather than long-term contracts, to generate revenue; our ability to changethe composition of our revenues and effectively control operating expenses; external factors, including the COVID-19 pandemic, that maybe outside of our control; the impacts of the COVID-19 pandemic and government-imposed lockdowns in response thereto; the availabilityof appropriate financing facilities impacting our operations, financial condition and/or liquidity; our ability to receive contract awardsthrough competitive bidding processes; our ability to maintain standards to enable us to manufacture products to exacting specifications;our ability to enter new markets for our services; our reliance on a small number of customers for a significant percentage of our business;competitive pressures in the markets we serve; changes in the availability or cost of raw materials and energy for our production facilities;operating in a single geographic location; restrictions in our ability to operate our business due to our outstanding indebtedness; governmentregulations and requirements; pricing and business development difficulties; changes in government spending on national defense; ourability to make acquisitions and successfully integrate those acquisitions with our business; general industry and market conditionsand growth rates; general economic conditions; unexpected costs, charges or expenses resulting from the acquisition of STADCO; and otherrisks discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on itswebsite (www.sec.gov). The results presented in this release are preliminary and subject to revision until the Company files its QuarterlyReport on Form 10-Q for the fiscal quarter ended September 30, 2021. Any forward-looking statements speak only as of the date on whichthey are made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstancesthat may arise after the date of this press release, except as required by applicable law. Investors should evaluate any statements madeby us in light of these important factors.

-- Tables Follow --

TECHPRECISION CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS^(1)^

(unaudited)

		March 31,<br><br> 2021
ASSETS
Current assets:
Cash and cash equivalents	281,315	$	2,130,711
Accounts receivable	2,649,309		608,059
Contract assets	9,306,862		5,532,408
Raw materials	926,524		503,636
Work-in-process	766,007		767,520
Other current assets	611,648		379,437
Total current assets	14,541,665		9,921,771
Property, plant and equipment, net	12,306,401		4,063,209
Right of use asset, net	6,681,160		--
Deferred income taxes	1,986,297		1,934,415
Goodwill	1,174,429		--
Other noncurrent assets, net	--		84,624
Total assets	36,689,952	$	16,004,019
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	2,778,020	$	500,848
Accrued expenses	2,320,893		1,526,270
Contract liabilities	1,113,920		218,152
Current portion lease liability	530,177		--
Current portion of long-term debt	3,790,525		2,474,963
Total current liabilities	10,533,535		4,720,233
Long-term debt, net	3,331,444		1,341,938
Long-term lease liability	6,168,642		--
Total liabilities	20,033,621		6,062,171
Stockholders’ Equity:
Common stock - par value .0001 per share, 90,000,000 shares<br> authorized, 34,267,450 and 29,498,662 shares issued and outstanding, at September 30, 2021 and March 31, 2021	3,426		2,949
Additional paid in capital	14,509,086		8,944,660
Accumulated other comprehensive income	20,739		21,838
Retained earnings	2,123,080		972,401
Total stockholders’ equity	16,656,331		9,941,848
Total liabilities and stockholders’ equity	36,689,952	$	16,004,019

All values are in US Dollars.

(1) Information included in this press release as of and for the three and six months ended September 30, 2021 is preliminary and subject to change prior to the filing of the Company's Quarterly Report on Form 10-Q with the Securities and Exchange Commission.

TECHPRECISION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)^(1)^

(unaudited)

	Three Months<br> Ended <br>September 30,						Six Months Ended<br> <br>September 30,
	2021			2020			2021			2020
Net sales	$	4,797,410		$	4,713,933		$	8,209,639		$	7,996,458
Cost of sales		3,866,703			3,585,073			6,446,264			6,170,584
Gross profit		930,707			1,128,860			1,763,375			1,825,874
Selling, general and administrative		1,173,689			696,016			1,906,297			1,489,378
Income (loss) from operations		(242,982	)		432,844			(142,922	)		336,496
Other income		1,001			804			11,391			1,456
Interest expense		(56,894	)		(51,582	)		(86,772	)		(109,480	)
PPP loan forgiveness		--			--			1,317,100			--
Total other (expense) income		(55,893	)		(50,778	)		1,241,719			(108,024	)
Income (loss) before income taxes		(298,875	)		382,066			1,098,797			228,472
Income tax expense (benefit)		(78,462	)		111,302			(51,882	)		73,942
Net income (loss)	$	(220,413	)	$	270,764		$	1,150,679		$	154,530
Other comprehensive loss:
Foreign currency translation adjustments	$	(1,141	)	$	(1,005	)	$	(1,099	)	$	(1,102	)
Other comprehensive loss	$	(1,141	)	$	(1,005	)	$	(1,099	)	$	(1,102	)
Comprehensive income (loss)	$	(221,554	)	$	269,759		$	1,149,580		$	153,428
Net income (loss) per share basic	$	(0.01	)	$	0.01		$	0.04		$	0.01
Net income (loss) per share diluted	$	(0.01	)	$	0.01		$	0.04		$	0.01
Weighted average shares outstanding - basic		31,359,941			29,431,629			30,424,216			29,395,791
Weighted average shares outstanding - diluted		31,359,941			30,987,233			32,026,262			31,002,130

TECHPRECISION CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS^(1)^

(unaudited)

	Six Months<br> Ended September 30,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,150,679		$	154,530
Adjustments to reconcile net income to net cash used in operating<br> activities:
Depreciation and amortization		515,804			339,232
Amortization of debt issue costs		18,096			31,086
Stock based compensation expense		62,066			112,917
Change in contract loss provision		(100,497	)		(49,553	)
Deferred income taxes		(51,882	)		73,942
PPP loan forgiveness		(1,317,100	)		--
Changes in operating assets and liabilities:
Accounts receivable		(794,235	)		(388,317	)
Contract assets		56,153			(1,475,912	)
Inventories		505,814			126,457
Other current assets		141,765			320,847
Accounts payable		(403,159	)		25,308
Accrued expenses		(1,588,991	)		158,791
Contract liabilities		739,043			(168,854	)
Net cash used in operating activities		(1,066,444	)		(739,526	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Business acquisition, net of cash acquired		(7,795,810	)		--
Purchases of property, plant and equipment		(362,986	)		(354,788	)
Net cash used in investing activities		(8,158,796	)		(354,788	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Closing costs related to common stock sale		(335,419	)		--
Proceeds from sale of common stock		3,523,000			--
Debt issue costs		(109,532	)		(8,282	)
Proceeds from term loan		4,000,000			--
Proceeds from payroll protection program loan		--			1,317,100
Revolver loan borrowings		865,049			--
Repayment of principal lease liability		(475,440	)		--
Repayments long-term debt		(91,781	)		(53,614	)
Net cash provided<br> by financing activities		7,375,877			1,255,204
Effect of exchange rate on cash and cash equivalents		(33	)		(133	)
Net (decrease) increase in cash and cash<br> equivalents		(1,849,396	)		160,757
Cash and cash equivalents, beginning<br> of period		2,130,711			930,856
Cash and cash equivalents, end of period	$	281,315		$	1,091,613

TECHPRECISION CORPORATION

SUPPLEMENTAL INFORMATION^(1)^

Reconciliation of EBITDA to Net Income (Loss)

The following table provides a reconciliation of EBITDA to net income (loss), the most directly comparable U.S. GAAP measure reported in our condensed consolidated financial statements for the following periods:

	Three Months<br> ended September 30,								Six Months ended September 30,
(dollars in thousands)	2021			2020		Change			2021			2020		Change
Net income (loss)	$	(220	)	$	271	$	(491	)	$	1,151		$	155	$	996
Income tax expense (benefit)		(79	)		111		(190	)		(52	)		74		(126	)
Interest<br> expense (2)		57			52		5			87			110		(23	)
Depreciation		333			170		163			516			339		177
EBITDA	$	91		$	604	$	(513	)	$	1,702		$	678	$	1,024
(1)	Information included in this press release as of and for the three and six months ended September 30, 2021 is preliminary and subject to change prior to the filing of the Company's Quarterly Report on Form 10-Q with the Securities and Exchange Commission.
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(2)	Includes amortization of debt issue costs.