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TC

TECHPRECISION CORP (TPCS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY2025 revenue was $7.622M, gross margin 13%, and EBITDA was $0.051M; net loss improved year-over-year to $(0.799)M and EPS to $(0.08) as Ranor remained profitable while Stadco losses persisted .
  • Backlog stood at $45.5M, expected to be delivered over the next 1–3 fiscal years with anticipated gross margin expansion; management reiterated customer confidence .
  • Quarter was seasonally impacted by under-absorbed overhead; Stadco faced legacy pricing issues and unfavorable mix, partially offset by Ranor’s favorable mix and profitability .
  • Directional commentary only; no formal numerical guidance was issued. Wall Street consensus estimates from S&P Global were unavailable for comparison this quarter (microcap coverage limitations), so beats/misses versus estimates cannot be assessed.*

What Went Well and What Went Wrong

What Went Well

  • Ranor segment delivered operating profitability; “Ranor experienced a favorable project mix enabling us to sustain operating profitability” (CEO) .
  • Backlog remained strong at $45.5M, supporting multi-year revenue visibility; management expects margin expansion with backlog delivery .
  • EBITDA turned positive versus prior-year quarter, reflecting improved operating leverage despite Stadco headwinds ($51k vs $(364)k YoY) .

What Went Wrong

  • Stadco incurred operating losses driven by legacy pricing, unfavorable mix, and under-absorbed overhead; gross loss of $(521)k for the quarter .
  • Seasonality in Q3 increased under-absorbed overhead, dampening margins; gross margin down to 13% from 15% prior year .
  • Working capital remained negative ($(1.8)M) with total debt at $7.4M; classification of bank debt as current due to covenant violations continues to pressure liquidity .

Financial Results

Consolidated P&L and EBITDA (USD Thousands; oldest → newest)

MetricQ1 FY2025 (Jun 30, 2024)Q2 FY2025 (Sep 30, 2024)Q3 FY2025 (Dec 31, 2024)
Revenue$7,986 $8,946 $7,622
Cost of Revenue$7,747 $7,932 $6,631
Gross Profit$239 $1,014 $991
Gross Margin (%)3% 11% 13%
SG&A$1,580 $1,502 $1,687
Operating Income (Loss)$(1,341) $(488) $(696)
Interest Expense$132 $113 $147
Net Income (Loss)$(1,460) $(601) $(799)
Diluted EPS ($)$(0.16) $(0.06) $(0.08)
EBITDA (Non-GAAP)$(634) $209 $51

Segment Breakdown – Revenue and Gross Profit (USD Thousands; oldest → newest)

Segment MetricQ3 FY2024 (Dec 31, 2023)Q2 FY2025 (Sep 30, 2024)Q3 FY2025 (Dec 31, 2024)
Ranor Revenue$4,296 $4,790 $4,310
Stadco Revenue$3,370 $4,223 $3,312
Consolidated Revenue$7,650 $8,946 $7,622
Ranor Gross Profit$1,377 $1,518 $1,512
Stadco Gross Profit (Loss)$(216) $(504) $(521)
Consolidated Gross Profit$1,161 $1,014 $991

KPIs and Balance Sheet (USD Thousands; oldest → newest)

KPIQ1 FY2025 (Jun 30, 2024)Q2 FY2025 (Sep 30, 2024)Q3 FY2025 (Dec 31, 2024)
Backlog ($)$41,200 $48,600 $45,500
Cash & Equivalents$45 $132 $165
Total Debt$7,500 $7,055–$7,200 $7,400
Working Capital$(1,700) $(1,500) $(1,800)
EBITDA (Non-GAAP)$(634) $209 $51

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Gross Margin DirectionNext 1–3 fiscal yearsNone issuedManagement expects margin expansion as backlog is delivered Directional positive
Revenue/SegmentsFY2025None issuedNo formal ranges provided; backlog supports visibility Maintained no formal guidance
OpEx / Tax / OI&EFY2025None issuedNo formal guidance communicated Maintained

Note: Company did not provide numeric guidance ranges; commentary was directional only .

Earnings Call Themes & Trends

TopicQ1 FY2025 (Nov 2024)Q2 FY2025 (Jan 2025)Q3 FY2025 (Apr 2025)Trend
Stadco legacy pricingLosses tied to terminated Votaw integration and equipment issues; legacy pricing pressure noted Detailed plan to reduce one-off exposure; ramp capability for core F-15EX/CH-53K; turnaround in progress “Remaining legacy pricing problems” continue; timeframe uncertain; pursuing profitable new lots Improving slowly
Under-absorbed overheadMaterial in Q1 due to throughput issues Under-absorbed overhead persists; mitigation via run-rate ramp Seasonally higher in Q3; mixed project impact Seasonal/managed
Defense program execution (F-15EX, CH-53K)Positioning; confidentiality constraints Can meet 12–24 month run-rate demands; not a production bottleneck Capacity affirmed; profitability depends on resolving legacy pricing Capacity intact
Grants / Industrial baseN/AMulti-tranche supplier development funding to Ranor for capacity redundancy Additional $4M granted; total >$21M (Ranor-centric) Expanding
Governance/CFO changesNew CFO onboard; quiet period due to proxy contest Board reconstituted; CFO resignation announced (effective Feb 14, 2025) New CFO appointed (Philip Podgorski) effective Apr 9, 2025 Stabilizing leadership
Cash management/liquidityPositive operating cash flow; negative working capital; debt reclassified current Negative WC, revolver availability, covenant-driven current classification Negative WC persists; cash modest; debt $7.4M Constrained but managed

Management Commentary

  • “Third quarter consolidated revenue was $7.6 million... Ranor... sustained operating profitability. In contrast, our Stadco segment is continuing to work through remaining legacy pricing problems... Customer confidence remains high as our backlog was $45.5 million” — CEO .
  • “We expect to deliver our strong backlog over the course of the next 1 to 3 fiscal years with gross margin expansion.” — CEO .
  • “We recently got funded $4 million more... grand total of funded grant money to $21 million... all Ranor-centric.” — CEO (Q&A) .
  • “Working capital was negative... as all of our long-term debt is classified as current because of certain debt covenant violations.” — Principal Accounting Officer .
  • “We will be able to deliver to the capacity required [CH-53K volumes]... And we’re delivering it now.” — CEO (Q&A) .

Q&A Highlights

  • Stadco legacy pricing timeline: Management cannot give a definitive end-date; issues linked to specific production lots across CH-53K and F-15EX; traction improving but resolution will be in tranches .
  • New profitable business: Company is securing and working on new, profitable contracts concurrently with legacy work; capacity supports both streams .
  • Program ramp and capacity: Management affirmed capability to meet required volumes over 12–24 months for CH-53K and F-15EX; machine breakdowns have been mitigated to minor throughput disruptions .
  • Grants and industrial base: Navy/shipyard-backed supplier development grants focused on Ranor capacity redundancy and throughput; total grants now exceed $21M .
  • Backlog composition: Approximately even split between Ranor and Stadco; consolidated backlog $45.5M .

Estimates Context

  • Wall Street consensus estimates (S&P Global) for EPS and revenue were unavailable at this time due to data access limitations, so a beat/miss analysis versus consensus cannot be provided this quarter.*
  • Given persistent Stadco losses and seasonal overhead, street models (where they exist) likely need to reflect mix risk and a staged resolution of legacy pricing, with Ranor strength partially offsetting Stadco headwinds .

Key Takeaways for Investors

  • Ranor is the near-term profit anchor; maintain focus on backlog conversion and grant-funded capacity additions that support margin expansion over 1–3 years .
  • Stadco’s path to profitability hinges on resolving legacy pricing at key lots and reducing exposure to one-off tooling/projects; expect progress in tranches, not a single step function .
  • Seasonal under-absorption and mix volatility drive quarterly noise; evaluate performance on 12–24 month run-rate for defense programs to avoid overreacting to single-quarter margins .
  • Liquidity remains tight with negative working capital and debt classified current due to covenants; disciplined cash management and revolver availability are critical watch items .
  • Backlog at $45.5M underpins revenue visibility; roughly even Ranor/Stadco split implies balanced execution risk across segments .
  • Leadership changes (Board refresh, CFO transition) and appointment of an experienced CFO aim to improve reporting timeliness and operational discipline—monitor for execution benefits .
  • Without formal guidance and limited sell-side coverage, rely on primary disclosures and quarterly segment detail; price-sensitive catalysts include evidence of Stadco lot repricing progress and continued grant funding/capacity ramp at Ranor .

*Estimates unavailable: Values normally retrieved from S&P Global.