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01/11 04:42
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals several negative factors: a decrease in quarterly revenue, higher production costs, increased interest expenses, and ongoing legacy pricing issues. The absence of shareholder return initiatives and vague management responses in the Q&A add to concerns. Despite securing profitable contracts and receiving significant funding, the unresolved pricing problems and lack of clear guidance overshadow positive aspects, indicating a likely negative stock price reaction.
Third Quarter Consolidated Revenue $7,600,000, a decrease of less than 1% year-over-year due to seasonally higher under absorbed overhead.
Raynor Revenue $4,300,000, a slight increase year-over-year due to a favorable project mix.
STADCO Revenue $3,300,000, a decrease of 2% year-over-year due to an unfavorable project mix and legacy pricing problems.
Consolidated Cost of Revenue $6,600,000, an increase of 2% year-over-year primarily due to higher production costs at STADCO.
STADCO Cost of Revenue 7% higher year-over-year due to higher production costs and under absorbed overhead.
Consolidated Gross Profit $1,000,000, a decrease of 15% year-over-year primarily due to higher production costs at STADCO.
Consolidated SG&A $1,700,000, $500,000 lower year-over-year due to the absence of expenses for due diligence work on the terminated Votar acquisition.
Consolidated Operating Loss $700,000, a decrease of 30% year-over-year due to the absence of due diligence expenses offsetting STADCO losses.
Third Quarter Interest Expense Up 28% year-over-year due to increased borrowing under the revolver loan.
Net Loss $800,000 or $0.08 per share, no year-over-year comparison provided.
Nine Months Consolidated Revenue $24,600,000, an increase of $1,600,000 year-over-year primarily due to an increase in revenue at STADCO.
Nine Months Consolidated Cost of Revenue $22,300,000, an increase of $2,200,000 year-over-year primarily due to higher production costs at STADCO.
Nine Months Consolidated Gross Profit $2,200,000, a decrease of 22% year-over-year primarily due to higher production costs at STADCO.
Nine Months Consolidated SG&A $4,800,000, 6% lower year-over-year due to the absence of due diligence expenses.
Nine Months Consolidated Operating Loss $2,500,000, a 16% increase year-over-year primarily due to operating losses at STADCO.
Nine Months Interest Expense Up 9% year-over-year due to increased borrowing under the revolver loan.
Nine Months Net Loss $2,900,000 or $0.30 per share, no year-over-year comparison provided.
Total Debt $7,400,000 as of 12/31/2024, down from $7,600,000 on 03/31/2024.
Cash Balance $165,000 as of 12/31/2024, up from $138,000 on 03/31/2024.
Consolidated Backlog $45,500,000 as of 12/31/2024, indicating strong customer confidence.
Funding Received for Equipment $4,000,000 recently received, bringing total funded grants to over $21,000,000.
Consolidated Backlog: Consolidated backlog was $45,500,000 as of 12/31/2024, expected to deliver over the next one to three fiscal years.
New Business Acquisition: Secured new profitable business at STADCO and Raynor, with ongoing projects and contracts.
Funding for Equipment: Received $4,000,000 in grants for Raynor, totaling over $21,000,000 in funding for submarine and marine industrial base.
Third Quarter Revenue: Third quarter consolidated revenue was $7,600,000, a decrease of less than 1% compared to the same quarter last year.
STADCO Revenue: STADCO revenue was $3,300,000, a decrease of 2% compared to the same quarter last year, with an operating loss of $850,000.
Raynor Revenue: Raynor revenue was $4,300,000, a slight increase compared to the same quarter last year, with an operating profit of $1,050,000.
Cost Management: Continued focus on aggressive cash management and control of expenses, capital expenditures, and customer advances.
Leadership Change: Philip Podgorski appointed as CFO effective 03/31/2025, succeeding Bobby Lilly.
Focus on Defense Sector: TechPrecision aims to secure and maintain partnerships in the defense sector, particularly in naval submarine and military aircraft manufacturing.
Legacy Pricing Issues: STADCO is facing challenges due to legacy pricing problems on core business, which have resulted in operating losses. The company is actively working to resolve these issues, but the timeline for resolution is uncertain.
Competitive Pressures: The company operates in a highly competitive defense sector, which may impact pricing strategies and profitability.
Supply Chain Challenges: The company has experienced higher production costs at STADCO, which are attributed to legacy pricing problems and under absorbed overhead.
Economic Factors: The overall economic environment and fluctuations in demand for defense contracts can affect revenue and profitability.
Debt Management: The company has a total debt of $7,400,000, and negative working capital due to debt covenant violations, which poses a financial risk.
Cash Flow Management: The company is focused on aggressive cash management to mitigate risks associated with operating losses and high production costs.
New CFO Appointment: Philip Podgorski appointed as Chief Financial Officer effective 03/31/2025, replacing Bobby Lilly.
Focus on Cash Management: The company is highly focused on aggressive daily cash management as a critical piece of risk mitigation.
Backlog Strength: Consolidated backlog was $45,500,000 as of 12/31/2024, expected to deliver over the next one to three fiscal years.
New Business Opportunities: Secured new profitable business at STADCO and Raynor, with ongoing work on legacy pricing issues.
Grant Funding: Received $4,000,000 in navy grants, totaling over $21,000,000 for submarine and marine industrial base.
Revenue Expectations: Expectations for revenue growth and profitability in future quarters due to strong backlog and new business.
Operating Profitability: Raynor segment achieved operating profit of $1,050,000 despite seasonal challenges.
STADCO Challenges: STADCO continues to work through legacy pricing issues, impacting profitability.
Future Capacity: Confident in ability to meet production demands for upcoming military contracts, including CH-53 and F-15EX programs.
Financial Position: Total debt was $7,400,000 as of 12/31/2024, with ongoing efforts to manage cash flow and expenses.
Shareholder Return Plan: The company has not announced any share buyback program or dividend program during the call.
The earnings call reflects mixed signals. Financial performance shows some positive trends, such as improved margins and net income, but also highlights ongoing challenges at Stadco with one-off contracts and first article issues. The Q&A section reveals management's uncertainty about specific opportunities and unresolved issues, which could temper investor enthusiasm. The absence of a market cap makes it difficult to predict exact stock movement, but the overall sentiment leans towards a cautious outlook, suggesting a neutral stock price reaction.
The earnings call highlights several concerns: an 8% revenue decline, operating losses at Stadco, significant debt, and cash flow issues. Despite some improvements in gross profit and operational efficiencies, the unresolved legacy contracts and talent retention challenges pose risks. The Q&A section lacked clarity, suggesting management's uncertainty. Overall, the negative financial indicators and unresolved risks outweigh positive elements, leading to a negative sentiment.
The earnings call reveals several negative factors: a decrease in quarterly revenue, higher production costs, increased interest expenses, and ongoing legacy pricing issues. The absence of shareholder return initiatives and vague management responses in the Q&A add to concerns. Despite securing profitable contracts and receiving significant funding, the unresolved pricing problems and lack of clear guidance overshadow positive aspects, indicating a likely negative stock price reaction.
The earnings call highlighted several concerns: STAADCO's operating loss, increased production costs, and debt covenant violations. Despite revenue growth, profitability remains elusive, with negative working capital and a lack of specific shareholder return plans. The Q&A session revealed management's unclear responses and lack of concrete timelines for profitability, further dampening sentiment. These factors suggest a potential negative stock price movement in the short term.
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