TechPrecision Corporation Reports Third Quarter Fiscal Year 2010 Results

Share Name	Share Symbol	Market	Type
Techprecision Corporation (QB)	USOTC:TPCS	OTCMarkets	Common Stock

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	0.00	0.00%	7.50	7.00	8.85				0.00	01:00:00

Techprecision (QB) (USOTC:TPCS)
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WESTMINSTER, Mass., Feb. 11 /PRNewswire-FirstCall/ -- TechPrecision Corporation (OTC:TPCS) (BULLETIN BOARD: TPCS) ("TechPrecision", or "the Company"), a leading manufacturer of large-scale, high-precision machined metal fabrications with customers in the alternative energy, medical, nuclear, defense, aerospace and other commercial industries, today reported financial results for the third quarter of fiscal year 2010, the period ended December 31, 2009. Third Quarter of Fiscal 2010 Highlights -- Revenue for the third quarter totaled $5.2 million, compared to normalized revenue of $6.2 million in the second quarter (excluding the non-recurring inventory sale of $8.9 million to GT Solar in August 2009) and $3.3 million during the Company's first quarter of fiscal 2010 -- Gross profit during the third quarter was $1.0 million, or 19% -- Net income for the third quarter was $204,697 or $0.01/share, including a $276,415 tax benefit for the quarter -- TechPrecision's backlog at the end of the quarter was $15.7 million, increasing to $18.1 million as of the end of January, 2010 -- Completed the quarter with $13 million in net, working capital and $9.4 million in cash and cash equivalents -- Subsequent to the end of the quarter, TechPrecision received orders from GT Solar totaling $3.8 million to be delivered during the fourth quarter of fiscal 2010 and the first quarter of fiscal 2011. Third Quarter Results For the three months ended December 31, 2009, sales decreased to $5.2 million or 39%, from $8.2 million in the third quarter of fiscal 2009. Net sales were negatively impacted by the global recession and downturn in the solar industry which affected orders from TechPrecision's largest customer, GT Solar. Subsequent to the end of the quarter, GT Solar requested that TechPrecision expand production. Gross margin was 19%, or $1.0 million, in the third fiscal quarter of 2010 compared to a gross margin of 31%, or $2.6 million, in the third quarter of fiscal 2009. The gross margin decline was attributable to costs associated with underutilized capacity and a project mix with fewer turn key services on completed projects during the quarter. Total operating expenses for the quarter ended December 31, 2009 were $990,000 as compared to $539,000 for the quarter ended December 31, 2008, reflecting an increase in employee compensation, professional fees, public company expenses, additional consulting fees and a $235,000 charge for bad debt expense. Operating income was $24,000 compared to $2.1 million in the prior year. Net income was $205,000 or $0.01 per share basic and $0.01 per share diluted for the quarter ended December 31, 2009 as compared to $2.5 million or $0.18 per share basic and $0.09 per share diluted for the quarter ended December 31, 2008. The Company completed the quarter with a backlog of $15.7 million, up from $14.4 million at the end of September 2009. "As expected, the third quarter was impacted by the slowdown in production from our largest customer, GT Solar, but we made tangible progress in our effort to position TechPrecision for long-term, sustainable growth," said Mr. Louis Winoski, Interim CEO of TechPrecision Corporation. "During the quarter and in the six weeks since, we have seen steady improvements throughout the industries we serve and increased activity, including requests for proposals and expanded sales activity. Specifically, we have seen increased activity from our tier one customers in the nuclear industry and we received a $3.8 million dollar order from GT Solar in our alternative energy market. We are greatly encouraged by our increasing backlog which stood at $15.7 million at the end of our third fiscal quarter on December 31, 2009. This was the first seven figure net increase in three or four quarters and it validates our confidence in improving market conditions. By the end of January 2010, our backlog had increased to $18.1 million and by the end of our fiscal year, in March, we expect the backlog to exceed $20 million." YTD Financial Results For the nine months ended December 31, 2009, sales decreased to $23.7 million or 30%, from $33.8 million in the first nine months of fiscal 2009. A significant portion of the decrease resulted from lower sales volume with our largest customer, GT Solar. Also, the global economic downturn adversely impacted our business during much of the first nine months of fiscal year 2010. Gross margin was 18%, or $4.2 million, for the first nine months of fiscal 2010 compared to a gross margin of 33%, or $11 million, in the comparable period of fiscal 2009. The gross margin decline was attributable to costs associated with underutilized capacity, the mix of total services on completed projects, and the lower margin inventory transfer, completed during August 2009. Total operating expenses for the nine months ended December 31, 2009 were $2.4 million as compared to $1.7 million for the same period ended December 31, 2008, reflecting an increase in employee compensation, professional fees, public company expenses and additional consulting fees, severance pay, bad debt expense and corporate travel. Net income was $1.4 million or $0.10 per share basic and $0.07 per share diluted for the nine months ended December 31, 2009 as compared to $5.1 million or $0.37 per share basic and $0.19 per share diluted for the nine months ended December 31, 2008. Balance Sheet At December 31, 2009, TechPrecision had working capital of $13.0 million as compared with working capital of $11.1 million at March 31, 2009, an increase of $1.9 million. Cash used in operations was $1.4 million for the nine months ended December 31, 2009 as compared to cash provided by operations of $4.3 million for the nine months ended December 31, 2008. The decrease in operating cash flow was due to the net effect of a decrease in net profits, decrease in customer advances and payment of accounts payable and accrued expenses during the nine months ended December 31, 2009. As of December 31, 2009, the Company had $9.4 million in cash and equivalents. Stockholders' equity increased to $11.4 million compared to $10.1 million on March 31, 2009 representing an increase of $1.3 million. Business Outlook Mr. Winoski added, "We have spent the last three quarters repositioning the Company to a point where it can proactively pursue longer term production programs within the main industries we serve - nuclear, defense, aerospace, medical device and alternative energy. We have brought in new senior management and added board members, both with relevant industry experience. We have added focused, ongoing and senior level business development activities and right-sized the operation to function as a leaner manufacturing entity - all while maintaining profitability during a difficult economy. We expect that the hard work we have done during that last nine months will begin to manifest into positive financial results in the current fiscal quarter and our next fiscal year. We believe we are turning the corner and building momentum." Teleconference Information The Company will hold a conference call at 4:30 p.m. Eastern (U.S.) time on Thursday, February 11, 2010. To participate in the live conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: 1-877-407-0784. International callers should dial + 1-201-689-8560. When prompted by the operator, mention Conference Passcode 344150. If you are unable to participate in the call at this time, a replay will be available for one week starting on Thursday, February 11, 2010 at 7:30 p.m. Eastern Time. To access the replay, dial 1-877-660-6853 or 1-201-612-7415, and enter account number 3055 and conference ID 344150. About TechPrecision Corporation TechPrecision Corporation, through its wholly-owned subsidiary Ranor, Inc., manufactures metal fabricated and machined precision components and equipment. These products are used in a variety of markets including: alternative energy, medical, nuclear, defense, industrial, and aerospace to name a few. TechPrecision's goal is to be an end-to-end 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 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 (http://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. -- Financial tables follow -- TECHPRECISION CORPORATION CONSOLIDATED BALANCE SHEETS December 31, March 31, 2009 2009 (Unaudited) ----------- ----------- ASSETS Current assets Cash and cash equivalents $9,374,081 $10,462,737 Accounts receivable, less allowance for doubtful accounts of $259,999 1,981,052 1,418,830 Costs incurred on uncompleted contracts, in excess of progress billings 3,782,895 3,660,802 Inventories - raw materials 296,343 351,356 Deferred tax asset 157,392 - Prepaid expenses 824,747 1,583,234 Other receivables 30,000 59,979 ----------- ----------- Total current assets 16,446,510 17,536,938 Property, plant and equipment, net 3,377,286 2,763,434 Equipment under construction - 887,279 Deferred loan cost, net 91,896 104,666 ----------- ----------- Total assets $19,915,692 $21,292,317 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $465,099 $950,681 Accrued expenses 499,129 710,332 Accrued taxes - 155,553 Deferred revenues 1,705,345 3,945,364 Current maturity of long-term debt 810,511 624,818 ----------- ----------- Total current liabilities 3,480,084 6,386,748 Long-term debt 5,058,669 4,824,453 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 9,661,482 shares issued and outstanding at December 31, 2009 and 6,295,508 at March 31, 2009 (liquidation preference of $2,753,523 and $1,794,220 at December 31, 2009 and March 31, 2009, respectively.) 2,210,216 2,287,508 Common stock -par value $.0001 per share, authorized, 90,000,000 shares, issued and outstanding, 14,230,846 shares at December 31, 2009 and 13,907,513 at March 31, 2009 1,424 1,392 Paid in capital 2,845,276 2,872,779 Retained earnings 6,320,023 4,919,437 ----------- ----------- Total stockholders' equity 11,376,939 10,081,116 ----------- ----------- Total liabilities and stockholders' equity $19,915,692 $21,292,317 =========== =========== TECHPRECISION CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three months ended Nine months ended December 31, December 31, 2009 2008 2009 2008 ---------- ---------- ----------- ----------- Net sales $5,255,591 $8,554,978 $23,691,616 $33,814,122 Cost of sales 4,241,102 5,932,505 19,466,554 22,798,518 ---------- ---------- ----------- ----------- Gross profit 1,014,489 2,622,473 4,225,062 11,015,604 Operating expenses: Salaries and related expenses 358,841 330,701 1,083,510 1,087,831 Professional fees 104,132 63,847 290,755 184,316 Selling, general and administrative 527,133 144,825 1,052,127 433,959 ---------- ---------- ----------- ----------- Total operating expenses 990,106 539,373 2,426,392 1,706,106 ---------- ---------- ----------- ----------- Income from operations 24,383 2,083,100 1,798,670 9,309,498 Other income (expenses): Other income 12,000 - 12,000 - Interest expense (108,049) (111,052) (319,601) (344,923) Interest income 4,205 - 12,575 - Finance costs (4,257) (4,257) (12,770) (12,770) ---------- ---------- ----------- ----------- Total other income (expense) (96,101) (115,309) (307,796) (357,693) ---------- ---------- ----------- ----------- Income (loss) before income taxes (71,718) 1,967,791 1,490,874 8,951,805 Income tax expense (benefit) (276,415) 954,562 90,288 3,890,780 ---------- ---------- ----------- ----------- Net income $204,697 $1,013,229 $1,400,586 $5,061,025 ========== ========== =========== =========== Net income per share of common stock (basic) $0.01 $0.07 $0.10 $0.37 Net income per share (fully diluted) $0.01 $0.04 $0.07 $0.19 Weighted average number of shares outstanding (basic) 14,214,542 13,907,094 14,013,210 13,569,513 Weighted average number of shares outstanding (fully diluted) 21,448,233 24,418,115 20,214,302 26,335,421 TECHPRECISION CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) Nine Months Ended December 31, -------------------------- 2009 2008 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $1,400,586 $5,061,025 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 313,370 415,127 Share based compensation 29,216 - Deferred income taxes (157,392) (24,587) Gain on sale of equipment (12,000) - Changes in operating assets and liabilities: Accounts receivable (562,222) (3,516,941) Inventory 55,013 (151,773) Costs incurred on uncompleted contracts (122,093) (1,543,141) Other receivables 29,979 (507,410) Prepaid expenses 758,487 - Accounts payable (641,135) 252,755 Accrued expenses (211,203) 603,373 Customer advances (2,240,019) 3,717,463 ---------- ---------- Net cash (used in) provided by operating activities (1,359,413) 4,305,891 CASH FLOW FROM INVESTING ACTIVITIES Purchases of property, plant and equipment (27,173) (183,901) Proceeds from sale of equipment 12,000 - Deposits on equipment - (614,096) ---------- ---------- Net cash used in investing activities (15,173) (797,997) CASH FLOWS FROM FINANCING ACTIVITIES Capital distribution of WMR equity (140,627) (140,422) Proceeds from exercised stock options and warrants 6,648 170,060 Borrowings under line of credit facility 919,297 - Payment of notes and lease obligations (499,388) (460,166) ---------- ---------- Net cash provided by (used in) financing activities 285,930 (430,528) Net (decrease) increase in cash and cash equivalents (1,088,656) 3,077,366 Cash and cash equivalents, beginning of period 10,462,737 2,852,676 ---------- ---------- Cash and cash equivalents, end of period $9,374,081 $5,930,042 ========== ========== DATASOURCE: TechPrecision Corporation CONTACT: Mr. Richard F. Fitzgerald, Chief Financial Officer of TechPrecision Corporation, +1-610-246-2116, ; or Investor Relations, Brett Maas of Hayden IR, +1-646-536-7331, , for TechPrecision Corporation Web Site: http://www.techprecision.com/

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TPCS Techprecision Corporation (QB)