TechPrecision - Earnings Call - Q4 2025

Executive Summary

• Q4 FY2025 delivered a clean inflection: revenue rose 10% YoY to $9.48M, gross margin expanded to 22% (from 14% a year ago), and the company posted positive net income of $0.11M ($0.01 EPS), driven by better execution at both Ranor and Stadco and sharply lower SG&A as Votaw-related costs rolled off.
• Stadco turned profitable in Q4, aided by successful renegotiation of a tranche of legacy pricing, which allowed reversal of certain contract loss provisions ($0.1–$0.25M) and improved drop-through; management emphasized more tranches remain to be negotiated.
• Backlog remained robust at $48.6M as of March 31, 2025 (vs. $45.5M at Dec 31, 2024 and $50.0M a year ago), with management expecting delivery over 1–3 years and further gross margin expansion.
• No formal numeric guidance was issued; the key forward catalysts are continued Stadco pricing resets, execution on the defense backlog (including F‑15EX ramp capacity), and margin expansion supported by ~$21M of funded U.S. Navy-related grants at Ranor.

What Went Well and What Went Wrong

What Went Well

• Margin and profitability inflected: Q4 gross margin rose to 22% and operating income turned positive ($0.37M), yielding net income of $0.11M and $0.01 EPS, a sharp improvement from prior-year Q4 losses.
• Stadco improvement: “One major driver was a successful negotiation on one portion of the legacy pricing issues on core business,” enabling Stadco to post Q4 operating profit; CFO added Q4 saw reversal of loss provisions of ~$0.1–$0.25M tied to these changes.
• SG&A discipline: Q4 SG&A fell 53% YoY to $1.72M as Votaw transaction costs lapped out, supporting operating leverage; management highlighted “methodical execution of several long-term initiatives to continuously resecure customer confidence”.

What Went Wrong

• Balance sheet tightness: Cash remained modest at $0.20M, working capital was negative $1.6M, and total debt was $7.4M due in part to debt covenant violations requiring reclassification of debt as current.
• Stadco structural cost pressure: Management cited wage inflation and input cost increases as continuing headwinds, with operational variability impacting costs quarter to quarter.
• Lack of formal guidance/linearity: Deliveries are “lumpy,” and no numeric revenue/EPS guidance was provided; backlog conversion is not expected to be linear, limiting near-term forecasting precision.

Transcript

Speaker 3

Welcome to the TechPrecision Corporation FY 2025 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. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded. Now, I would like to turn the call over to your host, Brett Maas, with Hayden IR. Please go ahead.

Speaker 5

Thank you. On the call today is Alex Shen, Chief Executive Officer, and Phillip 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 a safe harbor for forward-looking statements as contained in the Private Securities and 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. In addition, projections as to the company's future performance represent management estimates as of today, July 30, 2025. TechPrecision assumes no obligation to revise or update these forward-looking statements.

With that out of the way, I'd like to turn the call over to Alex Shen, Chief Executive Officer, to provide opening remarks. Alex, the floor is yours.

Speaker 4

Brett, thank you. Good afternoon to everyone, and thank you for joining us. Fiscal 2025 fourth quarter consolidated revenue was $9.5 million, 10% higher when compared to $8.6 million in the fiscal 2024 fourth quarter. Consolidated gross profit totaled $2.1 million, 70% higher when compared with the fourth quarter of fiscal 2024. The improved consolidated operating performance for the fourth quarter resulted in net income of $0.1 million. At both Raynor and STADCO 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 $4.7 million, with operating profit of $1.2 million. Fourth quarter STADCO revenue was $4.9 million, with a positive operating profit of $0.8 million. One major driver was a successful negotiation on one portion of the legacy pricing issues on core business.

Fiscal 2025 full year consolidated revenue was $34 million, an increase of 8% when compared to the fiscal 2024 full year. 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. At our Raynor segment, sustained performance over the last decade plus in on-time delivery and quality areas has resulted in some massive trust and confidence from our U.S. Navy-related customers, specifically resulting in over $21 million of completely funded grant money.

High customer confidence is also showcased with our backlog at $48.6 million on March 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 Phillip Podgorski, our Chief Financial Officer, to continue with the review of our fourth quarter and full year fiscal 2025 results. Phil?

Speaker 6

Thank you, Alex. Before jumping into the 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 on-time filings. We've had, unfortunately, a track record of being a little bit late. Secondly, internal controls. Third, continued integration of both Raynor and STADCO, 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 a 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 $9.5 million, compared to $8.6 million in the same period a year ago.

Consolidated cost of revenue was $7.4 million, less than 1% higher than the same period a year ago, as production performance improved at both segments. Consolidated gross profit was $2.1 million for the fiscal 2025 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 Raynor and STADCO segments. Consolidated SG&A was $1.7 million for the fourth quarter, or $2.0 million lower, primarily due to the absence of expenses for due diligence work on the terminated VOTO acquisition, which was evident in the same period last year. Fourth quarter interest expense was lower by 12%, primarily due to lower amortization of extending our revolver loan. Net income, as Alex had mentioned early on, was $0.01 million or $0.01 per share on both a basic and fully diluted basis.

For the full fiscal year of 2025, consolidated revenue was $34 million, or 8% higher than fiscal 2024, primarily due to an increase of $1.4 million or, you know, up 10% in revenue at STADCO. Consolidated cost of revenue was $29.7 million, an increase of 8% when compared to the same period a year ago, and primarily due to higher production costs at STADCO. Consolidated gross profit was $4.3 million, an increase of about 5% compared with the higher through the period a year ago, with Raynor increased profit of 25% for the fiscal 2025 year. Consolidated SG&A totaled $6.5 million, or $2.3 million lower than prior year, due primarily to the absence of expenses in connection with the due diligence work on the terminated VOTO acquisition. Consolidated operating loss was $2.2 million for the fiscal year 2025, compared with $4.6 million in fiscal 2024, or $2.5 million year-over-year improvement.

Again, primarily related to improved margin drop-through for Raynor and reduced SG&A, as noted above. However, offset partially by higher production costs at STADCO. Interest expense was up 4% due to increased borrowings under the revolver loan, and net loss for the full year was $2.7 million or $0.29 per share on a basic and fully diluted basis. From a Q4 segment perspective, Raynor continues to perform well, with top line growth of 3% to $4.7 million, and strong gross margin drop-through of 27%, or up 8% compared with prior year. Backlog for Raynor continues to be strong, with $21.1 million at March 2025, and on par with last year as well for the same period. STADCO Q4 revenue grew by 5% to $4.9 million, 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 issues. STADCO backlog of $27.6 million is down slightly by $1.3 million 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 $1.7 million in cash through the fiscal year ended on March 31, 2025, primarily from proceeds from a private placement offering in July of 2024. We used cash in operations and investment activities of $0.6 million and $1.1 million, respectively. Our total debt was $7.4 million on March 31, 2025, compared to $7.6 million on March 31, 2024. Cash balance on March 31, 2025 was $195,000, compared to $138,000 for March 31, 2024.

Working capital was negative on March 31, 2025, as all of our long-term debt is classified as current because of certain debt covenant violations. With that, I'll now turn it back to Alex.

Speaker 4

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 components and precision large-scale machined metal structural 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. 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 U.S. defense industry, specifically naval submarine manufacturing through our Raynor subsidiary and military aircraft manufacturing through our STADCO subsidiary. We aim to secure and maintain enduring partnerships with our customers.

Overall, at both the Raynor and the STADCO 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&A.

Speaker 3

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 pull for questions. The first question today is coming from Chris Tuttle with Blue Caterpillar. Chris, your line is live. Please go ahead.

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 in 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? I'm interested in how you think about what's left to do in FY 2026.

Speaker 4

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

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.

Okay. I think we already mentioned that we have some massive trust and confidence in us at the Raynor segment from our U.S. Navy-based customers. We've secured $21 million plus in completely funded grant money, which is going towards new equipment and new equipment-related production efficiency. That is well on its way. Is there more to go? 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. 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. I think that kind of answers the qualitative type of question surrounding the Raynor segment. We go towards the STADCO segment. How's the turnaround going?

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.

I guess a follow-on to that would be.

Sorry, Chris. I just wanted to pick one more point.

Yes, go ahead.

I'll give you the mic back in just a second. 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, you know, a fiscal year of profitability so that we can look at things from an annualized basis and, you know, have one year over another year and both be profitable, three of them be profitable. That's when we start feeling like, you know, 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.

Okay. Yeah. Just a little bit less qualitatively, I guess, is structurally, in the long term, 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, you know, a couple of years?

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 get better and look like Raynor's better numbers. That's what we want, yes.

Okay.

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, you know?

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, you know, two or three years of investing in operational improvement.

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

I hear you. I hear you.

Yeah, it's pretty sensitive. 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 drives. 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.

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? My second question is, in the submarine programs that you're in, is it, you know, would we, 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?

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

Yep.

Linear delivery is probably not going to happen. The business by itself is very lumpy. Even if we make the same part number, it might not come out the same way. Some of it is actually weather-dependent, some of it is customer-dependent. All of these products are made by humans, so it won't behave in a linear fashion. If it does, it's pure coincidence.

Okay.

Hopefully, that gives you the flavor of what it's like. The business is lumpy and goes up and down. On the submarine programs, is there ability to grow? The quick answer is yes.

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

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

I think it's yes. Yeah, that's a really helpful perspective. I'll yield the floor. Thanks so much for taking my question.

Thank you, Chris.

Speaker 3

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

Thank you very much. Alex, first, congratulations on returning to profitability. 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. I got a number of, you know, in the weeds things, and then I want to talk to you about some of the higher-level stuff. First, the comment was made that production costs at STADCO were higher. 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 to be?

Speaker 4

When we dig into the details and suss it out, it's a combination. Some inherent costs have increased, especially post-COVID. You know, 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, and wages have continued to increase. Those two probably are things that contribute to, you know, kind of like your base cost goes up kind of thing. The business inherently is just up and down. There are certain points in time when the costs end up running higher.

There are certain points in time where you have to do things when people take a vacation, and then you've got somebody who doesn't really know it that well, who's the backup guy who takes more time. There are certain things in operating that cause it to probably, for that point in time, go up. It's a combination. I hope that answers your question.

Yeah, it does. 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 even before COVID, and therefore cost estimates were completely unrealistic to the current environment?

Yes. Thank you for the question. 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 timeframe in 2021. The pricing problems existed before we acquired them. Going back to how we were attacking this thing, we said to ourselves and also publicly on one of our calls together, we said that it's probably going to be in tranches to try to solve this legacy pricing problem set, and it won't be solved in one fell swoop. We are very fortunate to have had a number of different initiatives all align 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. I'm glad to demonstrate that once.

Okay, so.

It's one tranche, Ross. That was my point.

Right. So.

Sorry, let me just finish one thing. There's more tranches to go.

Gotcha. I was going to say, are tranches being done by program, or are they being done by component? Like, are you looking at the CH-53K and saying, "Okay, let's look at this pricing, and here's what we're doing for that program, and here is, you know, it's a whole bunch of item numbers, and we're going to deal with all those item numbers," or is it, "Here's a bunch of item numbers, and they relate to perhaps CH-53K or F-15EX, and then we're going to come and we've got several other products or several other programs that we're involved with"?

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

Would you say that that tranche covers a 10th, a quarter, a third, a half of what you need to address?

It's time-bound also.

Yeah.

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

If you look at this, how many more to work through all the tranches do you see the need to work through? How far through, you know, I hate the baseball analogy of what inning, but are we a quarter of the way through your exposure that you need to address, or are we half, or are we left? How do you look at that?

I think it's more than 10% and less than half.

Okay.

I hope to talk about this more at the next call and the next call and the next call so that we can, you know, here I go back to my mantra. We have one point. Two points will make a line, and three would indicate a trend. That's what I'm fighting myself to get to. Let's go.

Okay.

Yep.

Okay. Now, the F-15EX is a program that bounced around in production numbers, but it really looks like they're ramping. They expect to ramp production meaningfully, significantly.

Hey, Ross.

Yeah.

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

Yeah, sorry. The F-15EX program.

Yep.

Significant increase in the expected demand rate. I think we're up to 125 to 129 or whatever. It looks like they added two squadrons to the demand list. Do you have the ability to fill that demand as it comes to you?

Yes.

Okay.

Absolutely. I will go one more step. Absolutely.

Okay, that's great because that could be a significant area of ramp. Additionally, what %, and you know, when you look at production capacity or utilization time, what kind of utilization are you getting out of your two facilities? Are you operating 50% of, you know, we'll think, forget about dollars, but think about time. Are you operating at 50% of one ship to 100% of one and none of a second? How do we look at where you can go and how you can ramp this business on a volume basis over the next year or two years?

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.

Believe me, so am I, Alex.

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

Okay. You have a new leadership team in, or at least it strikes me as you have, you know, while 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 assets. You just had talked about how you'd gone from 5%, you once were 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 like nuclear transportation tasks.

What opportunities outside of DOD are there that you should be grabbing that this new leadership team is going to 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 break-evens, all those things, all the good things that come as you move up the utilization of facilities first?

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

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 shifts to basically bring in other business? It strikes me as, you know, if we can bring in well-priced business, running additional shifts or running more of these shifts or running at a higher rate over the course of a month. While you might run at 100 on any given day, I'm sure there are days you run under 100 or perhaps even well under 100. Is there things we can do? Is this that you're going to get out there, you're going to go from being a fisherman to a hunter and actually, you know, rope in new opportunities?

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 have been when Raynor had one customer and did one product. Same with STADCO. The businesses are pretty small. 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. 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.

The growth trajectory of least risk and most best results and best profitability is probably grow the Navy business and grow the stuff that flies business and get more.

Okay. I'm agnostic to where you get your growth. I'll only say I think that you need, you know, we all would welcome significantly more growth. 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. What are they asking you to do, and what are you getting done? For example, are we going to get the ability to finally integrate, you know, STADCO with the overall company so we can get reporting sped up? What are all these pieces of the puzzle going to end up being like, and what's it like working with these guys?

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 because of how we're trusted by the U.S. Navy and the U.S. Navy-related customers, ending up with $21+ 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 newish subsidiary STADCO. We need to grow.

I would agree. I'll pass it to others, but I definitely, you know, you're there. I will say one thing is very clear, Alex, is under the new leadership, your relationship with your shareholder base. I believe that as on these calls that have changed, I no longer feel I need to hang you out of a helicopter by your feet to get you.

Thank you, Ross.

Take care.

Speaker 3

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

Speaker 0

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?

Speaker 6

Yeah, Richard, this is Phil. I'll take a crack at that, right? You nailed it, right? There are two things that impact this. One, from an accounting perspective, we're on percentage of completion. As the price increases come through for the purchase orders, it'll affect our percentage of completion based on that and the revenue that we record. It also impacts, more importantly, the loss provisions. If we move from a loss position to a profitable position, we reverse those reserves, those loss provisions. Certainly, as Alex had indicated, given some of the changes that we recently experienced in Q4, we were able to reverse some of those loss provisions on STADCO's books.

Speaker 0

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

Speaker 6

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

Speaker 0

That will have an impact then on a more continual basis, albeit not that kind of a number.

Speaker 4

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

Speaker 0

It does, 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?

Speaker 4

Yes, it does. The way we tried to do this is not to 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, you know, 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 deal with tranches and mini-tranches and have more pieces so that we can have success. That was our tactical execution of that. We've been at it at STADCO, I think, from the inception of the acquisition, August, September of 2021, and we finally have seen a result that appears in our quarterly numbers.

Speaker 0

Great. Thank you very much.

Speaker 4

Thank you very much.

Speaker 3

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.

Speaker 4

Thank you all. Please have a great day.

Speaker 3

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.