TechPrecision Corporation Reports Fiscal First Quarter 2011 Results

WESTMINSTER, Mass., Aug. 12 /PRNewswire-FirstCall/ -- TechPrecision Corporation (OTC 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 first quarter of fiscal year 2011, the period ended June 30, 2010.

First Quarter 2011 Highlights

• Net sales were up 85.4% to $6.2 million compared to $3.3 million in the year-ago quarter and were up 32.2% sequentially compared to $4.7 million in the fourth fiscal quarter of 2010.
• TechPrecision's backlog at the end of the fiscal first quarter of 2011 was $25.2 million.
• Gross profit was $2.3 million, or 37.6% gross profit margin compared to gross profit of $565,000 or 17.0% gross profit margin in the year-ago quarter with the increased margin related to improved capacity utilization during the quarter and a higher mix of processing-related business coupled with a lower volume of materials procurement revenue. Material procurement services are generally priced at lower margins than processing services.  
• Operating income was $1.3 million compared to a net operating loss of $(203,000) in the prior year.
• Income before income taxes was $1.25 million compared to a loss before income taxes of $(308,000) in the prior year.
• Net income was $819,000 compared to a net loss of $(125,000) in the same period last year.
• Net income per common share was $0.06 per basic and $0.04 per diluted share compared to a net loss per common share of $0.01 per basic and diluted share in the prior year.

Subsequent to the Quarter End

• The Company appointed James Molinaro to the position of Chief Executive Officer in July 2010. Mr. Molinaro brings over 26 years of global experience in solar, defense and semiconductor equipment production to TechPrecision. In a long career spanning roles of increasing responsibility, he has overseen global service systems, worldwide sales leadership, and engineering disciplines.
• Louis Winoski, who held the position of Interim CEO, will remain on the Board of Directors of TechPrecision.

First Quarter 2011 Results

For the three months ended June 30, 2010, sales increased 85.4% to $6.2 million from $3.3 million in the year-ago period and increased 32.2% sequentially from $4.7 million in the fourth quarter of fiscal 2010. Net sales were positively impacted by the resumption of orders from TechPrecision's largest customer, GT Solar. In addition, in August of 2009, TechPrecision transferred inventory to GT Solar, recognizing a one-time benefit. TechPrecision expects to utilize this customer owned inventory over the next several quarters, and will only recognize processing (service) revenue until this transferred inventory is extinguished. Gross margin was 37.6%, or $2.3 million gross profit, in the first fiscal quarter of 2011 compared to a gross margin of 17.0%, or $565,000 gross profit, in same period last year. The increase in processing-related revenue, as a percentage of total revenue and higher capacity utilization served to improve TechPrecision's gross margin during the first quarter of fiscal 2011.

Total operating expenses for the quarter ended June 30, 2010 were $1.02 million as compared to $768,000 for the quarter ended June 30, 2009, reflecting an increase in payroll and related costs, professional fees, increased spending on travel and investor relations as well as additional consulting fees associated with executive search services and supporting the Company's pending ISO 9000 certification effort. Net income was $819,000 or $0.06 per basic and $0.04 per diluted share for the quarter ended June 30, 2010 as compared to a net loss of $(125,000) or $0.01 per basic and diluted share for the quarter ended June 30, 2009.

The Company completed the quarter ended June 30, 2010 with a backlog of $25.2 million, up from $21.5 million at the end of March 31, 2010.

"Our core market sectors continue to rebound, and we are benefitting from this trend," said Mr. James Molinaro, CEO of TechPrecision Corporation. "This is especially true within the clean tech vertical where we recently signed a multi-million dollar deal with a new Tier-1 customer. In addition, we are seeing improvements in several of the other verticals we serve, providing increasing optimism for improved, diversified financial performance. In the last several months, this has resulted in a significant increase in our backlog, as well as sequential improvements in our revenue. During this strong revenue quarter, we maintained a $25 million backlog, demonstrating our ability to maintain a solid book-to-bill ratio and creating the foundation for continued growth over the next year. Our organization remains focused on further diversification of our customer base to augment our backlog as we move forward."

"As we grow our revenues, we are simultaneously focused on managing our expenses, and we've demonstrated an ability to do this over the last year," Mr. Molinaro continued. "Going forward, I expect to increase our investment in sales and marketing to augment an improving business development effort. We anticipate expanding our internal sales processes in a disciplined manner, and expect to add to our external sales organization. We are also evaluating potential acquisitions, with the goal of adding to this leverage and increasing our profitability."

Balance Sheet

At June 30, 2010, TechPrecision had working capital of $14.0 million as compared with working capital of $13.3 million at March 31, 2010, an increase of $725,000. Cash generated from operations was $1.0 million for the three months ended June 30, 2010 as compared to cash used by operations of $857,000 for the three months ended March 31, 2010. As of June 30, 2010, the Company had $9.6 million in cash and equivalents, up $817,000 compared to the balance at the end of March. Stockholders' equity increased 7.0% to $12.9 million compared to $12.1 million at March 31, 2010.

Teleconference Information

The Company will hold a conference call at 4:30 p.m. Eastern (U.S.) time on August 12, 2010. To participate in the live conference call, please dial the following number five to 10 minutes prior to the scheduled conference call time: 1-877-941-1427.  International callers should dial +1-480-629-9664.  When prompted by the operator, mention Conference Passcode 4343268.

If you are unable to participate in the call at this time, a replay will be available for one week starting on Thursday, August 12, 2010 at 7:30 p.m. Eastern time. To access the replay, dial 1-877-870-5176 or 1-858-384-5517. When prompted, enter Conference Passcode 4343268.

The call will also be available live by webcast at TechPrecision Corporation's website, www.techprecision.com, and will also be available over the Internet and accessible at http://viavid.net/dce.aspx?sid=00007922.

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 (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.

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SOURCE TechPrecision Corporation