Loading...
01/11 04:42
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Consolidated Revenue $9.1 million, 2% higher compared to $8.9 million in fiscal year 2025 second quarter. The increase is attributed to a focus on building a strong recurring revenue customer base.
Consolidated Gross Profit $2.5 million, $1.4 million higher compared to fiscal year 2025 second quarter. The improvement is due to favorable customer mix and improved throughput at both Ranor and Stadco segments.
Ranor Revenue $4.4 million with an operating profit of $1.6 million. Revenue decreased by $0.4 million year-over-year, but strong margin growth across all projects resulted in a 7 percentage point margin improvement.
Stadco Revenue $4.8 million with an operating loss of $0.5 million. Revenue increased by $0.6 million year-over-year, and operating income improved by $873,000 due to better contract pricing, customer mix, and production efficiencies.
Operating Income $0.9 million for the second quarter. The improvement is driven by better throughput at Stadco, lower provisions for losses from specific first article costs, and lower provisions for losses from one-off contracts.
Net Income $0.8 million for the quarter, with $0.08 per share on a basic and fully diluted basis. The increase is attributed to improved gross profit and controlled expenses.
Consolidated Cost of Revenue Decreased by 16% or $1.3 million year-over-year due to improved throughput and customer mix at both segments.
Consolidated SG&A Increased slightly by 1% to $1.5 million due to higher general office expenses, partially offset by lower outside advisory and consulting costs.
Debt $7.3 million as of September 30, 2025, compared to $7.4 million on March 31, 2025. The slight decrease is due to principal repayments under revolver and term loans.
Cash Balance $220,000 as of September 30, 2025, compared to $195,000 on March 31, 2025, reflecting improved cash management.
New quoting opportunities: Both Stadco and Ranor are seeing new quoting opportunities in air defense and submarine defense sectors due to strong customer confidence and on-time delivery of quality components.
Defense sector focus: The company continues to focus on the defense sector, particularly naval submarine manufacturing and military aircraft manufacturing, through its Ranor and Stadco subsidiaries.
Revenue growth: Consolidated revenue increased by 2% to $9.1 million in Q2 FY 2026 compared to $8.9 million in the same period a year ago.
Gross profit improvement: Consolidated gross profit increased by $1.4 million to $2.5 million, with a 16 percentage point improvement in gross margin year-over-year.
Cost management: Consolidated cost of revenue decreased by 16% due to improved throughput and customer mix at both Ranor and Stadco.
Debt reduction: Debt decreased slightly to $7.3 million as of September 30, 2025, from $7.4 million on March 31, 2025.
Customer confidence and backlog: Strong customer confidence has led to a $48 million backlog, expected to be delivered over the next 1 to 3 fiscal years with gross margin expansion.
Focus on defense partnerships: The company aims to secure and maintain enduring partnerships in the defense sector, leveraging its expertise in precision manufacturing for naval submarines and military aircraft.
Legacy Contracts and Underpriced One-Time Contracts: The company continues to face headwinds from legacy contracts and underpriced one-time contracts, which could negatively impact profitability and operational efficiency. Efforts are ongoing to recover and renegotiate pricing with customers.
Higher Borrowing Costs: Interest costs have increased due to higher borrowing under the revolving loan, which could strain financial resources and reduce net income.
Stadco Operating Loss: Despite improvements, the Stadco segment reported an operating loss of $0.5 million, indicating ongoing challenges in achieving profitability.
Cash Flow Constraints: The company reported a low cash balance of $220,000 as of September 30, 2025, which could limit operational flexibility and increase financial risk.
Revenue and backlog delivery: The company expects to deliver its $48 million backlog over the next 1 to 3 fiscal years, with gross margin expansion.
Market opportunities: Both subsidiaries, Ranor and Stadco, are experiencing meaningful new business awards in air defense and submarine defense sectors, leading to new quoting opportunities with existing customers.
Profitability outlook: The company is encouraged by the prospects of growing revenue and increasing profitability in future quarters.
Operational improvements: Efforts are ongoing to improve Stadco's financial performance and bring it into profitability.
The selected topic was not discussed 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.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
