Techprecision Q4 2025 Earnings Report

Techprecision EPS Results

• Actual EPS: $0.01
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Techprecision Revenue Results

• Actual Revenue: $9.48 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Techprecision Announcement Details

• Quarter: Q4 2025
• Date: 7/29/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, July 30, 2025
• Conference Call Time: 4:30PM ET

Techprecision (NASDAQ:TPCS) Corporation, together with its subsidiaries, manufactures and sells precision, fabricated, and machined metal structural components and systems in the United States. The company operates through two segments, Ranor and Stadco. It provides custom components for ships, submarines, military helicopters, aerospace equipment, components for nuclear power plants, and components for medical systems. The company also provides support services to its manufacturing capabilities comprising manufacturing engineering, quality control, materials procurement, production control, and final assembly. Its finished products are used various markets, including defense, aerospace, nuclear, medical, and precision industrial. The company was founded in 1956 and is headquartered in Westminster, Massachusetts.

Techprecision Q4 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: In Q4, TechPrecision reported consolidated revenue of $9.5 million (up 10% YoY) and gross profit of $2.1 million (up 70%), resulting in a net income of $0.1 million.
• Neutral Sentiment: For the full fiscal year, revenue grew 8% to $34 million, but the company recorded a net loss of $2.7 million, an improvement from the $4.6 million loss in FY24.
• Positive Sentiment: Backlog stood at $48.6 million as of March 31, 2025, including a $21 million fully funded U.S. Navy grant for the Raynor segment, with deliveries and margin expansion expected over the next 1–3 years.
• Positive Sentiment: The STATCO segment achieved its first quarterly profit after successful tranche-based legacy pricing renegotiations, reversing approximately $100k–$250k in contract loss provisions.
• Negative Sentiment: Working capital remained negative as all long-term debt was classified as current due to covenant violations, underscoring ongoing liquidity and covenant risks.

Presentation

[Operator]

Greetings. Welcome to the TechPrecision Corporation FY twenty twenty five Fourth Quarter and Year End Financial Results. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference call is being recorded.

[Operator]

Now I would like to turn the call over to your host, Brett Maas with Hayden IR. Please go ahead.

[Brett Maas, Managing Partner at Hayden IR]

Thank you. On the call today is Alex Shen, Chief Executive Officer and Phil Podgorski, Chief Financial Officer. Before we begin, I'd like to remind our listeners that management's remarks may contain forward looking statements, which are subject to risks and uncertainties, and management may make additional forward looking statements in response to your questions. Therefore, the company claims the protection of the Safe Harbor for forward looking statements as contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today, and therefore, we refer you to a more detailed discussion of risks and uncertainties in the company's financial filings with the SEC.

[Brett Maas, Managing Partner at Hayden IR]

In addition, projections as to the company's future performance represent management's estimates as of today, 07/30/2025. TechPrecision assumes no obligation to revise or update these forward looking statements. With that out of way, I'd like to turn the call over to Alex Shen, Chief Executive Officer, to provide opening remarks. Alex, the floor is yours.

[Alexander Shen, CEO & Director at TechPrecision]

Brett, thank you. Good afternoon to everyone, and thank you for joining Us. Fiscal twenty twenty five fourth quarter consolidated revenue was $9,500,000 10% higher when compared to $8,600,000 in the fiscal twenty twenty four fourth quarter. Consolidated gross profit totaled $2,100,000 70% higher when compared with the 2024. The improved consolidated operating performance for the fourth quarter resulted in net income of $100,000.

[Alexander Shen, CEO & Director at TechPrecision]

At both Raynor and STATCO segments, methodical execution of several long term initiatives yielded positive impacts to fourth quarter revenue and net income. Both segments also had a favorable project mix. Fourth quarter Raynor revenue was $4,700,000 with operating profit of $1,200,000. Fourth quarter STADCO revenue was $4,900,000 with a positive operating profit of $800,000 One major driver was a successful negotiation on one portion of the legacy pricing problems on core business. Fiscal twenty twenty five full year consolidated revenue was $34,000,000, an increase of 8% when compared to the fiscal twenty twenty four full year.

[Alexander Shen, CEO & Director at TechPrecision]

Our Raynor segment executed on a favorable project mix enabling sustained operating profitability. Our STADCO segment reported an overall operating loss for the fiscal year with the fourth quarter showing profitability. We remain highly focused on aggressive daily cash management, a critical piece of risk mitigation. We continue to manage and control expenses, capital expenditures, customer advances, progress billings, and final invoicing at shipment. Our tactical execution focus and success enabled us to continuously resecure strategic customer confidence at both segments.

[Alexander Shen, CEO & Director at TechPrecision]

At our Raynor segment, sustained performance over the last decade plus in on time delivery and quality areas have resulted in some massive trust and confidence from our US Navy related customers, specifically resulting in over $21,000,000 of completely funded grant money. High customer confidence is also showcased with our backlog at $48,600,000 on 03/31/2025. We expect to deliver our backlog over the course of the next one to three fiscal years with gross margin expansion. Now I will turn the call over to Phil Podgorski, our Chief Financial Officer to continue with the review of our fourth quarter and full year fiscal twenty twenty five results. Phil?

[Phillip Podgorski, CFO at TechPrecision]

Thank you, Alex. Before jumping into the relevant results, I wanted to just share with you some of my perspective on the areas that I've been focusing on and will continue to focus on. First is all time time filings. We've had unfortunately a track record of being a little bit late. Secondly, internal controls.

[Phillip Podgorski, CFO at TechPrecision]

And then third, continued integration of both RadCow, RainWare and STATCO, all three towards improved profitability. These three areas of focus are interconnected and revolve around people, processes, and tools to ensure that the organization is focused, aligned, and looking forward. We've made progress in the last three to four months and still have significant amount of work in front of us to go. Now on to the results. As Alex just mentioned, for our fourth quarter, consolidated revenue increased by 10% to 9,500,000.0 compared to $8,600,000 in the same period a year ago.

[Phillip Podgorski, CFO at TechPrecision]

Consolidated cost of revenue was $7,400,000 less than 1% higher than the same period a year ago as production performance improved at both segments. Consolidated gross profit was $2,100,000 for the fiscal twenty twenty five fourth quarter or a 70% increase when compared to the same quarter a year ago with high single digit year over year gross profit percentage improvement for both RENEW segments. Consolidated SG and A was $1,700,000 for the fourth quarter or $2,000,000 lower primarily due to the absence of expenses for due diligence work on the terminated Vota acquisition, which was evident in the same period last year. Fourth quarter interest expense was lower by 12% due primarily to lower amortization of extending our revolver, loan. Net income, as Alex had mentioned early on, was 100,000.0 or 1¢ per share on both a basic and fully diluted basis.

[Phillip Podgorski, CFO at TechPrecision]

For the full fiscal year of 2025, consolidated revenue was 34,000,000 or 8% higher than fiscal twenty twenty four, primarily due to increase of an increase of 1,400,000.0 or, you know, up 10% in revenue at STADCO. Consolidated cost of revenue was 29,700,000.0, an increase of 8% when compared to the same period a year ago, and primarily due to higher production costs at STATCO. Consolidated gross profit was $4,300,000, an increase of about 5% compared with the with the period a year ago with Raynor gross profit increase with Raynor increased profit of 25% for the fiscal twenty twenty five year. Consolidated s g and e totaled 6,500,000.0 or 2,300,000.0 lower than prior year due primarily to primarily to the absence of expenses in connection with the due diligence work on the terminated Votan acquisition. Consolidated operating loss was $2,200,000 for the fiscal 2025 compared with $4,600,000 in fiscal twenty twenty four or $2,500,000 year over year improvement, Again, primarily related to improved margin drop through for Raynor and reduced SG and A as noted above.

[Phillip Podgorski, CFO at TechPrecision]

However, offset partially by higher production costs at STATCOM. Interest expense was up 4% due to increased borrowings under the revolver loan. And net loss for the full year was $2,700,000 or $0.29 per share on a basic and fully diluted basis. From a Q4 segment perspective, Brainerd continues to perform well with top line growth of 3% to $4,700,000 and strong gross margin drop through of 27% or up 8% compared with prior year. Backlog for Reynaud continues to be strong with $21,100,000 at March 2025 and on par with last year as well for the same period.

[Phillip Podgorski, CFO at TechPrecision]

STATCO Q4 revenue grew by 5% to $4,900,000 with margin drop through of 17% or plus 8% year over year. The major driver of the margin drop through relates to reversal of contract loss provisions resulting from successful negotiations on one portion of the legacy pricing problems. STATCO backlog of $27,600,000 is down slightly by $1,300,000 versus prior year, however, relates only to the timing of purchase orders. Moving on to our financial position, we continue to actively manage cash as Alex had noted earlier. Financing activities provided 1,700,000.0 in cash through the fiscal year ended on 03/31/2025, primarily from proceeds from a private placement offering in July 2024.

[Phillip Podgorski, CFO at TechPrecision]

We used cash in operations and investment activities of 600,000.0 and 1,100,000.0 respectively. Our total debt was 7,400,000.0 on 03/31/2025 compared to 7,600,000.0 on 03/31/2024. Cash balance on 03/31/2025 was 195,000 compared to 138,000 for 03/31/2024. Working capital was negative on 03/31/2025 as all of our long term debt is classified as current because of the certain debt covenant violations. With that, I'll now turn it back to to Alex.

[Alexander Shen, CEO & Director at TechPrecision]

Thank you, Phil. In closing, for those on the call who may not be very familiar with our company, TechPrecision is a custom manufacturer of precision large scale fabricated metal components and precision large scale machined metal components. The components that we manufacture are customer designed. We sell to customers in two main industry sectors, defense and precision industrial markets, predominantly defense. We do most of our work in industries that are highly sensitive to confidentiality, which preclude us from speaking publicly about many things that a company not operating in TechPrecision's specific environment might discuss.

[Alexander Shen, CEO & Director at TechPrecision]

Please understand there are real limits as to what I can discuss, and sometimes those limits do change. TechPrecision is proud and honored to serve The United States defense industry, specifically naval submarine manufacturing through our Raynor subsidiary and military aircraft manufacturing through our STATCO subsidiary. We aim to secure and maintain enduring partnerships with our customers. Overall, at both the Raynor and the STATCO subsidiaries, we continue to see meaningful opportunities in our defense sector as evidenced by the strength of our backlog. We are encouraged by the prospects for growing our revenue and increasing profitability in future quarters. Operator, please open the line for q and a.

[Operator]

Certainly. The floor is now open for questions. If you would like to join the queue to ask a question at this time, please press star one on your telephone keypad. We do ask if listening on speakerphone today that you pick up your handset while asking your question to provide optimal sound quality. Please hold a moment while we poll for questions.

[Operator]

And the first question today is coming from Chris Tuttle with Blue Caterpillar. Chris, your line is live. Please go ahead.

[Kris Tuttle, Head - Research & Chief Investment Officer at Blue Caterpillar LLC]

Hi. Thanks very much for taking my questions and congratulations on all the operational improvements that you guys have made. I know it hasn't been easy. A couple of questions for you. Internally, if you were to qualitatively think about where you are in terms of your improvements and operational efficiency, do you feel like you're halfway down to a few tweaks operationally, still a lot of upgrades to be done equipment wise or process wise?

[Kris Tuttle, Head - Research & Chief Investment Officer at Blue Caterpillar LLC]

I'm interested in how you think about what's left to do in FY twenty six.

[Alexander Shen, CEO & Director at TechPrecision]

Let me take that question, Phil. So I think you talked about qualitatively internally. So maybe we separate the question and parse it out into which sector and which segment you're asking about? I think we're I'm assuming we're talking about STATCO and the turnaround at STATCO, not Raynor. Correct?

[Kris Tuttle, Head - Research & Chief Investment Officer at Blue Caterpillar LLC]

Well, yes. I mean, STADCO has more room for improvement, just looking at the numbers, but I know that you're striving to improve across all your metrics.

[Alexander Shen, CEO & Director at TechPrecision]

Okay. So I think we already mentioned that we have some massive trust and confidence in us at the Raynor segment from our US Navy based customers. And we've secured $21,000,000 plus in completely funded grant money, which is going towards new equipment new equipment and related production efficiency. So that is well on its way. Is there more to go?

[Alexander Shen, CEO & Director at TechPrecision]

Obviously, because we are in an always changing environment, there is more to go. There's a human machine interface that happens here. Every single one of our parts, just like every single one of our submarines and aircraft are hand built by humans and not by machines. So the machines are enablers, they help us make the parts, but there's humans that control the machines and there's thinking that goes behind that. So I think that kind of answers the qualitative type of question surrounding the Raynor segment.

[Alexander Shen, CEO & Director at TechPrecision]

And then we go towards the STATCO segment, how is the turnaround going? Well, I think that we have just seen one quarter of goodness and positive profit at STADCO, and we want to have more of the same. How much is there to go, I think was the question. I don't really know how to categorize that because we are taking things one step at a time and a generalization is probably not going to do justice to the specifics. There's more work to do, yes.

[Kris Tuttle, Head - Research & Chief Investment Officer at Blue Caterpillar LLC]

I guess a follow on to that would

[Alexander Shen, CEO & Director at TechPrecision]

be Sorry, Chris, I just wanted Yes, make one more go ahead. I'll give you the mic back in just a second. So finishing that idea on STADCO qualitatively, what we want to see is not just one quarter. We want to see two quarters, three quarters and a string of fiscal year of profitability so that we can look at things from an annualized basis and have one year over another year and both be profitable, three of them be profitable. That's when we start feeling like we've gone past the halfway mark and we're doing something worthwhile supporting the defense industry. The mic is back to you. Thank you.

[Kris Tuttle, Head - Research & Chief Investment Officer at Blue Caterpillar LLC]

Okay. Yes. And just a little bit less qualitatively, I guess, is structurally in the long term, could you could we think about STADCO over time as having characteristics in terms of its efficiency and margins on par or in the vicinity of Raynor given the fullness of a couple years?

[Alexander Shen, CEO & Director at TechPrecision]

That would entirely depend on the landscape. It's two different landscapes and it's two different sets of customers. I don't think it's fair to try to compare them side by side and think they're going to be, alike. I think it can it get better and look like Raynor's better numbers? That's what we want, yes.

[Alexander Shen, CEO & Director at TechPrecision]

I hope my answer makes sense because it's just not fair to compare two companies that are doing two completely different things in the same defense sector.

[Kris Tuttle, Head - Research & Chief Investment Officer at Blue Caterpillar LLC]

Yeah. I appreciate that. I mean, I'm an investor, so I tend to be less granular and I think about it as like these are industrial, very precision, very specific industrial businesses catering to defense that could have similar kind of operating margins given two or three years of investing in operational improvements.

[Alexander Shen, CEO & Director at TechPrecision]

Right. Except for the fact that they're small. So when somebody catches a cold, it actually affects us, right?

[Kris Tuttle, Head - Research & Chief Investment Officer at Blue Caterpillar LLC]

I hear you.

[Alexander Shen, CEO & Director at TechPrecision]

Hear you. Yeah, it's pretty I just want to be careful when I'm explaining something and not go into too many generalities that really don't tell you the real specifics of what drive. The specifics really drive. It's the execution and blocking and tackling that's situationally different, I suppose. That's one way to say it.

[Kris Tuttle, Head - Research & Chief Investment Officer at Blue Caterpillar LLC]

Okay. Two other questions. One and I'll just ask them both. One is, I think, a little simpler, which is given looking at your current backlog and you described it as being delivered over the next three fiscal years, should we think about that backlog delivery being distributed linearly, like in a linear basis, year one to year two, three more front end loaded? And then my second question is in the submarine programs that you're in, is it should we think about the fact that you might have opportunity to grow the amount of content per unit over time given your strong customer relationships?

[Alexander Shen, CEO & Director at TechPrecision]

Okay. So that's two questions. Let me answer the first one first and parse it that way, okay?

[Kris Tuttle, Head - Research & Chief Investment Officer at Blue Caterpillar LLC]

Yep.

[Alexander Shen, CEO & Director at TechPrecision]

So linear delivery is probably not going to happen. The business by itself is very lumpy. So even if we make the same part number, it might not come up the same way. Some of it is actually weather dependent. Some of it is customer dependent.

[Alexander Shen, CEO & Director at TechPrecision]

Some of these all of these products are made by humans. So the it won't behave in a linear fashion. If it does, it's pure coincidence. Hopefully, that gives you the flavor of what it's like. The business is lumpy and goes up and down.

[Alexander Shen, CEO & Director at TechPrecision]

On the submarine programs, is there ability to grow? The quick answer is yes.

[Kris Tuttle, Head - Research & Chief Investment Officer at Blue Caterpillar LLC]

Do you I mean, you yes, a little more color on that would be interesting just because there's been a lot in the press about how our administration and the military would like to improve our productivity, specifically with respect to submarines in addition broadly, but that's an area where you could really contribute.

[Alexander Shen, CEO & Director at TechPrecision]

That's an area that we have been contributing. And if we go back to the very beginnings of when I took over the helm in June 2014, there was only one subsidiary, Raynor, and it was arguably less than 5% Navy submarine business. And currently, we are predominantly Navy submarine business, which means it's well over 90%. So that's been an incredibly grateful trip up the ladder to really dominate in our little tiny slice of submarine manufacturing components. There more growth I think it's yes.

[Kris Tuttle, Head - Research & Chief Investment Officer at Blue Caterpillar LLC]

Yes, that's really helpful perspective. I'll yield the floor. Thanks so much for taking my questions.

[Alexander Shen, CEO & Director at TechPrecision]

Thank you, Chris.

[Operator]

Thank you. Your next question is from Ross Taylor with ARS. Ross, your line is live. Please go ahead.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Thank you very much.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Alex, first, congratulations on returning to profitability. And also, with our new CFO, I'm excited that we might actually start to get reports on time. I think that would help the credibility of management. Got a number of kind of, you know, in the weeds things, and then I, wanna talk to you about some of the higher level stuff. First, the comment was made that production costs at STADCO were higher.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Can you talk about whether that was because the nature of what you were doing is inherently carrying higher costs, or was that tied to anything that was going on operationally that, was less than as efficient as you would like it?

[Alexander Shen, CEO & Director at TechPrecision]

I I think the, when we dig into the details and suss it out, it's a combination. Some inherent costs have increased, post COVID. The wages have increased as well as certain things that we buy to make the parts. The costs on those have steadily increased, not only just year over year but sometimes quarter over quarter. There are some things that just drive the costs up on stuff that we need to make parts.

[Alexander Shen, CEO & Director at TechPrecision]

And wages have continued to increase. Those two probably are things that contribute to kinda like your base cost goes up kinda thing. But the business inherently is just up and down. So, there are certain points in time when costs end up running higher. There are certain points in time where have to do things when people take a vacation and then you got somebody who doesn't really know it that well who's the backup guy who takes more time.

[Alexander Shen, CEO & Director at TechPrecision]

There's certain things in operating that cause it to probably for that point in time go up. It's a combination. Hope that answers your question.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Yeah, it does. And then, looking at that, you talked about the fact that you had gotten some rework on some of the contracts where you're getting perhaps somewhat more favorable terms or therefore a better chance of profitability. Was that tied into longer term contracts, which had been perhaps first but even before COVID and therefore cost estimates were completely unrealistic to the current environment?

[Alexander Shen, CEO & Director at TechPrecision]

Yes. Thank you for the question. So that just ties back to the legacy pricing problems that we faced when we took over the company and made the acquisition in the August, September time frame in 2021. The the pricing problems existed before we we acquired them. And going back to how we were attacking this thing, we said that to ourselves and also publicly on one of our calls together, we said that, it's probably going to be in tranches to to try to solve this, legacy pricing problem set, and it won't be, solved in one fell swoop.

[Alexander Shen, CEO & Director at TechPrecision]

So, we're very fortunate to have had a number of different initiatives all aligned into the same quarter yielding a good profitability in the positive range. I won't call it good. I retract that. Positive in the black for one quarter. So, glad to demonstrate that once.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Okay. So

[Alexander Shen, CEO & Director at TechPrecision]

But but it's one tranche. It's it's one tranche, Ross. That that was my point. So

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Right. So

[Alexander Shen, CEO & Director at TechPrecision]

what's indicating that's prob sorry. Let me just finish one thing. So so there's more tranches to go.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Gotcha. I was gonna say, are you are tranches being done by program, or are they being done by by component? Like, are you looking at the c h fifty three k and saying, okay. Let's look at this pricing, and here's what we're doing for that program. And here is, you know,

[Alexander Shen, CEO & Director at TechPrecision]

Oh.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Of of of item numbers, and we're gonna deal with all those item numbers? Or is it here's a bunch of item numbers, and they relate to perhaps the eight fifty three k or a 50 d x, and then we're gonna come and we've got several other products that or several other programs that we're involved with.

[Alexander Shen, CEO & Director at TechPrecision]

It's pretty, it's more granular than that and dives into more detail. So there's like subsets of the tranches too. So I tried to bring it up one level so it's more explainable on the call, but it's in the detail. So, like, overall, one tranche has been executed. So that's really good.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Would you say that that tranche covers a tenth, a quarter, a third, a half of what you need to address?

[Alexander Shen, CEO & Director at TechPrecision]

It's time bound also.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Yeah.

[Alexander Shen, CEO & Director at TechPrecision]

The tranche. Am I making any sense? So the time bound tranche executed itself well and landed in the same quarter.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Okay. So if you look at this, how do you work to work through all the tranches you see the need to work through, how far through are, you know, I hate the baseball analogy of what inning, but, you know, are we a quarter of the way through your exposure that you need to address? Or are we half? Or are we less? How do you look at that?

[Alexander Shen, CEO & Director at TechPrecision]

I think it's more than 10% and less than half. I hope to, talk about this more at the next call and the next call and the next call so that we can know, here I go back to my, mantra here. We have one point, two points will make a line, and three would indicate a trend. So that's what I'm fighting myself to get to. Let's go. Yep.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Now the f 15 e x is a program that bounced around in production numbers, but it really looks like they're ramping they expect to ramp production meaningfully significantly.

[Alexander Shen, CEO & Director at TechPrecision]

Hey, Ross. Ross, you're coming in a little bit muffled.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Yeah. Sorry. The F 15 EX program Yep. Increase in the expected demand rate. I think we're up to 126 to 129 or whatever.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Looks like they added two squadrons to the the demand list. Do you have the ability to fill that demand as it comes to you?

[Alexander Shen, CEO & Director at TechPrecision]

Yes. Okay. Absolute. I I will go one more step. Absolutely.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Okay. Okay. So that's great because that could be a significant area of ramp. Additionally, what and, you know, when you look at production capacity or or utilization time, what kind of utilization are you getting out of your two facility? Are you operating 50% of you know, we'll think forget about dollars, but think about time.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Are you operating at 50% of one shift, a 100% of one, and none of a second? How do we look at where you can go and how you can ramp this this business on a volume basis over the next year, two years?

[Alexander Shen, CEO & Director at TechPrecision]

Next year, next two years. I wish I knew. I know it needs to go up, and I'm a little more impatient than wanting to wait one or two years. But

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Believe me, so am I, Alex.

[Alexander Shen, CEO & Director at TechPrecision]

You know, we've been doing this for a while now. And I I I like I said last time, you know, I'm setting my own pants on fire. I'm getting to answer your question more directly, I think it's double digits for sure. It's so dependent on sometimes there's a customer stuff that needs to come to us first, and that creates its own, lumpiness.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Okay. I was you have a new leadership team in or at least it strikes me as you have, you know, value most of the board was retained, the energy and the focus of this board seems to be different than in the past. I have trouble believing that this board will be comfortable underutilizing the asset, and you just had talked about how you've gone from 5%, you know, we're around 5% or something, you know, non Navy to now you're 90% or so, you know, military DOD business. What opportunities? And there were I knew you guys were involved in, nuclear transportation tasks.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

What opportunities outside of DOD are there that you should be grabbing that this new leadership team is gonna want you guys to grab hold of and to run through your facilities while you're operating at less than capacity in order to drive more free cash flow, effectively drive down the breakevens, all those all the good things that come as you move up the utilization of facilities, sir.

[Alexander Shen, CEO & Director at TechPrecision]

I think I may have just, not characterized the utilization of capacity correctly. Okay. Because from your question, sometimes I'm at over 100% capacity utilization in both facilities. It just depends.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

And therefore, do you have the ability to run additional you once had a very large commercial business. Some aspects of that business have gone away, but other aspects and new aspects have probably opened. Do you have the ability to run additional ships and to basically bring in other business? It strikes me as, you know, if we can bring in well priced business, running additional ships or running more of these ships or running at a higher rate over the course of a month, while you might run at a 100 on any given day, I'm sure there are days you'd run under a 100 or perhaps even well under a 100. Is there things we can do?

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Is this that you're gonna get out there, you're go from being a fisherman to a hunter and actually, you know, rope in new opportunities?

[Alexander Shen, CEO & Director at TechPrecision]

I think the, best opportunities are to stay within the same types of specifications so we don't bifurcate our people's brains and try to let them do things that have to obey one specification or another. If we're specification driven, which has been the key to success, and the times that Raynor has been really very, very profitable in the past has been when Raynor had one customer and did one product. Same with STADCO. The businesses are pretty small. So when we try to do two different specification driven types of businesses and drive it into the same factory, there's a lot of risk.

[Alexander Shen, CEO & Director at TechPrecision]

Probably the way to mitigate that risk is to grow within the, existing customer base because we already hold great status with our existing customers, up to and including single and sole source contracts. So the growth, trajectory of least risk and best results and best profitability is probably grow the navy business and grow the stuff that flies business and get more.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Okay. Well, I'm agnostic to where you get your growth. I only say I think that you need you know, we all would welcome significantly more growth. And my last question, the philosophical one is, tell us about how it's different now than it was before. I have a feeling that you have a different relationship with members of the board here.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

What are they asking you to do and what are you getting done? An example, are we going to get the ability to kind of finally integrate, you know, SAADCO with the overall company so we can get reporting set up? You know, what are all these pieces puzzle of going to end up being like? And what's it like working with these guys?

[Alexander Shen, CEO & Director at TechPrecision]

Well, I think I'm agnostic as well on what the board composition is because our goal is we're stewards of the company, and we need to make the company better and grow it. That mantra and that drive needs to keep going. We're in a good place with Raynor of how we're trusted by the US Navy and the US Navy related customers ending up with 21 plus million in grant money that's been funded already. I think through the years, we're going to demonstrate how that money is going to be put to good use and put to good growth and spur the growth with new equipment. We'd like to see how we can do something similar at our newest subsidiary STATCO. So we need to grow.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

I would agree. I'll pass it to others. But I definitely, you know, you're there. And I will say one thing is very clear, Alex, is on your leadership. You your relationship with your shareholder base.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

I believe that on these policies James, I no longer feel I need to hang you out of a helicopter by your feet to get

[Alexander Shen, CEO & Director at TechPrecision]

Thank you, Ross.

[Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC]

Take care.

[Operator]

Thank you. Your next question is coming from Richard Grelich from REG Capital. Richard, your line is live. Please go ahead.

[Richard Greulich, President & CEO at REG Capital Advisors]

Thank you. Just trying to understand how the, reaching to an agreement regarding some of the legacy pricing, how does that impact the income statement and does it in the current quarter? For example, would there be a change in the provision for contract losses because of any change of agreement that you've been able to arrive at?

[Phillip Podgorski, CFO at TechPrecision]

Yeah, Richard, this is, Phil. So I'll take a crack at that. Right? So you you nailed it. Right?

[Phillip Podgorski, CFO at TechPrecision]

So there are two things that we are that impact this. One, we from an accounting perspective, we're on percentage of completion. As the price increases come through for the purchase orders, it'll affect our our percentage of completion based on that and the revenue that we record, but it also impacts, more importantly, is the loss provisions. So if we move from a loss position to a profitable position, we reverse those reserves, those loss provisions. And certainly, as Alex had indicated, you know, given some of the changes that we recently experienced in q four, we're able to reverse some of those loss provisions on STATCO's books.

[Richard Greulich, President & CEO at REG Capital Advisors]

Can you, quantify what that, change in the loss provision was in the quarter?

[Phillip Podgorski, CFO at TechPrecision]

Yeah. It was between a 100 and and, you know, 250,000 thereabouts. It wasn't huge, but it was, still contribute contributed to the bottom line.

[Richard Greulich, President & CEO at REG Capital Advisors]

Yeah. Then going forward, that will have an impact then on a more continual basis, albeit not that kind of a number.

[Alexander Shen, CEO & Director at TechPrecision]

Let me take a crack at that one. So as I mentioned, these tranches that we take care of, some of them are time bound. So we want more to come? Yes. Are we aiming to do more? Yes. Is that answering your question?

[Richard Greulich, President & CEO at REG Capital Advisors]

It does, but then this is more of a qualitative, I guess, question. Having reached this new agreement regarding some of the legacy pricing, does that give you further encouragement going forward of being able to do the same on other tranches?

[Alexander Shen, CEO & Director at TechPrecision]

Yes, it does. The way we try to do this is not do it in one fell swoop because not only was that going to be an impossible dream, It's not very practical to do that with the giant customer base that we're dealing with giants here. If we break it down into smaller pieces, it's much easier to digest, explain, get it explained through their management and dealing it with tranches and mini tranches and have more of pieces so that we can have success. And that was our tactical execution of that. And we've been at it at STATCO, I think from the inception of the acquisition, August, September 2021.

[Alexander Shen, CEO & Director at TechPrecision]

And we finally, have seen a result that appears in our quarterly numbers.

[Richard Greulich, President & CEO at REG Capital Advisors]

Great, thank you very much.

[Alexander Shen, CEO & Director at TechPrecision]

Thank you very much.

[Operator]

Thank you. This does conclude our question and answer session for today. I would now like to turn the floor back to Alex Shen for closing remarks.

[Alexander Shen, CEO & Director at TechPrecision]

Thank you all. Please have a great day.

[Operator]

Thank you. This does conclude today's conference call. You may disconnect your lines at this time, and have a wonderful day. Thank you once again for your participation.

Participants

Analysts

• Brett Maas, Managing Partner at Hayden IR
• Alexander Shen, CEO & Director at TechPrecision
• Phillip Podgorski, CFO at TechPrecision
• Kris Tuttle, Head - Research & Chief Investment Officer at Blue Caterpillar LLC
• Ross Taylor, Partner and Portfolio Manager at ARS Investment Partners, LLC
• Richard Greulich, President & CEO at REG Capital Advisors