Techprecision (NASDAQ:TPCS) held its fourth-quarter earnings conference call on Monday. Below is the complete transcript from the call.
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Access the full call at https://www.webcaster5.com/Webcast/Page/2198/54132
Summary
Techprecision’s fiscal year 2026 fourth-quarter revenue decreased by 15% to $8.1 million, mainly due to lower revenue from both Ranor and Stadco segments.
The company experienced a 47% drop in gross profit to $1.1 million in Q4 2026, attributed to delays in customer-furnished materials and analysis at Stadco.
Strategic initiatives include improving customer and project mix for gross margin expansion, and ongoing equipment installation funded by US Navy grants for submarine programs.
The company has a strong backlog of $52 million in funded customer orders, with an additional $25 million in unfunded orders, expected to be fulfilled over the next one to three fiscal years.
Techprecision provided guidance for fiscal year 2027, projecting revenue between $35 million to $37 million and EBITDA between $3 million to $4 million.
Consolidated SGA expenses decreased by 24% in Q4 2026, and the company reported a net income of $400,000 for the quarter.
Management emphasized ongoing efforts in cash management, risk mitigation, and maintaining customer confidence, aiming for revenue growth and increased profitability.
Full Transcript
Alex
Brett, thank you. Good afternoon to everyone and thank you for joining us. Fiscal Year 2026 Fourth quarter consolidated revenue was $8.1 million or 15% lower when compared to $9.5 million in the fiscal year 2025. Fourth quarter consolidated gross profit totaled 1.1 million or 47% lower when compared to the fourth quarter of fiscal 2025 primarily due to lower revenue and resulting margin drop through at Stadco. Fourth quarter Stadco revenue was $4.2 million with gross profit of 28,000.
Two factors drove the low gross profit 1. Delays in receiving customer furnished materials 2. Delays in customer analysis and disposition of nonconformances. We are actively working with our customers to shorten the delays to improve our throughput. Fiscal year 2026 fourth quarter Ranor revenue was $3.9 million with gross profit of $1.1 million or 16% lower when compared with the prior year fourth quarter results. We continue to strategically improve both our customer and project mix towards gross margin expansion.
At Stadco, 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 enables us to continuously re-secure strategic customer confidence at both segments. Our RANOR segment continues to execute and install the new equipment funded by the $24 million plus in grants from our US Navy submarine programs related customers.
This sustained cadence of new equipment procurement, delivery and installation will enable a reliable, robust and resilient manufacturing capacity dedicated to submarine programs. At both Stadco and Ranor, our customers have expressed their strong confidence as we continue to maintain on-time delivery of quality components. This delivery performance is leading both Stadco and Ranor to new quoting opportunities in air defense and submarine defense sectors with the same customers that already know and trust our capabilities.
Both subsidiaries are continuing to experience meaningful new capture of business awards from these same customers adding to our strong $52 million backlog. This $52 million backlog only includes the funded portions of customer purchase orders with an additional approximately $25 million additional of unfunded purchase orders. We expect to deliver this $52 million backlog over the course of the next one to three fiscal years with gross margin expansion.
With that said, we are providing guidance for fiscal year 2027. The company is projecting 2027 full year revenue to be 35 million to $37 million. We are projecting EBITDA to be 3 million to $4 million. Now I will turn the call over to our Chief Financial Officer Phil Podgorski to continue with the review of our fourth quarter and twelve months ended fiscal 2026 results.
Phil Podgorski, Chief Financial Officer
Thank you, Alex, and good afternoon everyone. As Alex just mentioned, for our fiscal 2026 fourth quarter, consolidated revenue decreased by 15% to $8.1 million compared to 9.5 million for the same period a year ago on lower revenue at both Ranor and Stadco segments. Consolidated cost of revenue decreased by 6% or $400,000. Consolidated gross profit decreased by 1 million in Q4 2026 to 1.1 million, primarily due to lower revenue at both Ranor and Stadco.
Consolidated SGA decreased by 24% to $1.3 million, primarily on a decrease in professional fees and services. Interest expense decreased by 25% due to lower interest incurred on our loans and lower amortization of debt issuance costs. Our net income was 400,000 for the fourth quarter or $0.04 per share on a basic and fully diluted basis. For the twelve months ended March 31, 2026, consolidated revenue finished up at 31.6 million or 7% lower on a different mix in customer projects at both segments.
Consolidated cost of revenue was 26.7 million or $3 million lower than the same period a year ago on lower revenue and improved strategic customer and project mix. As noted, our improved strategic customer and project mix resulted in increased gross profit of 600,000 or 300 basis point improvement. SGA decreased by 7% as lower professional fees and office cost more than offset higher compensation and benefits. Consolidated operating loss for the 12 months ended March 31, 2026 was 1.1 million and decreased year over year by 51% primarily due to higher gross margin and lower SGI cost.
As noted before, interest expense decreased by 10% on lower interest incurred on debt and lower amortization of debt issuance costs. Net loss was 1.6 million or $0.17 per share on a basic and fully diluted basis. Moving on to our financial position, we continue to actively manage our cash flow. As Alex mentioned, net cash provided by operating and investment activities totaled 900,000 for the twelve months ended March 31, 2026. Net cash used in financing activities totaled 600,000 primarily to pay down principal under our revolver and term loans.
Our debt was 6.9 million as of March 31, 2026 compared to 7.4 million on March 31, 2025. Cash on March 31, 2025 was 431,000 compared to 195,000 on March 31, 2025. Now let’s dive a little deeper into the segment performance for the fiscal quarter Q4 for Ranor, fourth quarter revenue was down by 800,000 year over year or 16% primarily driven by delays in receiving customer furnished materials. The revenue decline resulted in 1.1 million of gross profit for the quarter.
Stadco Q4 Fiscal 2026 Revenue decreased by 700,000 compared to the same period last year primarily as we implemented a strategic project mix change at Stadco. Stadco experienced Q4 year over year gross margin decline as gross profit decreased by 800,000 mainly due to customer related delays on 1 customer furnished material and on 2 customer analysis and dispositioning of non-conformances. As Alex mentioned, we continue to actively work with our customers to reduce the wait times and improve throughput.
With that, I will now turn it back over to Alex.
Alex
Thank you, Phil. In closing, for those on the call who may not be very familiar with our company, Tech Precision is a custom manufacturer of precision large-scale fabricated components and precision large-scale machined metal structural components. These 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 Tech Precision’s specific environment might discuss.
Please understand there are real limits as to what we can discuss and sometimes those limits do change. Tech Precision is proud and honored to serve the United States defense industry, specifically Naval submarine manufacturing through our Ranor subsidiary and military aircraft manufacturing through our Stadco subsidiary. We aim to secure and maintain enduring partnerships with our customers. As noted earlier, the total of completely funded grant money of more than $24 million from our U.S. navy submarine programs reflects this strong partnership. This commitment represents more than 50% of Tech Precision’s market cap overall. At both Ranor and Stadco, we continue to see meaningful opportunities in the defense sector as evidenced by the strength of our backlog. We’re very encouraged by the prospects for growing our revenue and increasing profitability in future quarters. We are showing progress. We have more work to do, especially with our Stadco subsidiary to get into the black.
We are targeting to build and sustain a positive trend. Operator, please open the line for Q and A.
OPERATOR
Certainly, at this time we will be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions.
Your first question for today is from Ross Taylor with Ars Investment Partners.
Ross Taylor, Ars Investment Partners
Thank you very much. First, gentlemen, congratulations on getting to where you can actually and are willing to give guidance. I think that’s a huge step, something you guys have never done in the past. Let’s focus on the EBITDA. What was 26 EBITDA? I haven’t seen your filings yet, so haven’t been able to pull that out. But what was your EBITDA 26?
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.
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