TechPrecision Corporation (OTC:TPCS) Q2 2023 Earnings Call Transcript

Alexander Shen: I can’t tell what the €“ first of all, let me characterize the question. I don’t know that there’s a problem. I don’t see a problem.

Ross Taylor: I’m just looking at the idea of is the fact that you’re operating Congress €“ that Congress has DoD operating under a CR. And hearing a lot of this from major players in the space that they’re talking about the fact that they’re struggling to get new orders and new programs and things launched because of the fact that the CR restricts meaningfully the ability to go €“ to enter into new business lines or get new programs kind of kicked off, which is why it’s so important to see Congress pass a defense appropriation bill before the end of the year rather than run the risk that we go into the first part of the new year and end up having a new Congress play its version of politics on it. So I’m asking really more because you’re not so much your peers, but the primes have been citing this as an area of concern and impact.

Alexander Shen: Okay.

Ross Taylor: Okay. Now lastly, with this, the Navy has talked about the idea of going away from letting out like one contract €“ or one boat contracts for the Columbia class or two boat contracts for Virginia to going to block by five boats or more. Can you talk about how that would impact you guys impact margins, impact the revenue stream, operating efficiency and things of that nature?

Alexander Shen: I’m sorry, Ross, I can’t talk about that one.

Ross Taylor: Okay. Is it safe to assume that the more boats the Navy buys at any given time, the more efficient it would be for you to produce those boats and to buy and build out and to use your workforce?

Alexander Shen: Well, I think it’s safe to assume that we have to build everything by hand one at a time. So the efficiencies of getting orders of more than one, but having to build things one at a time, probably doesn’t equate. We still have to build them one at a time.

Thomas Sammons: Yes, I’d say for some components, we like getting multiple orders and

Alexander Shen: We like getting multiple orders just because there’s more orders, but I can’t build them…

Thomas Sammons: Other components, we might prefer to have just one instead of €“ it’s a new component.

Alexander Shen: Yes, I know, but that’s not his question. His question is if we get orders of multiples, does that make us build faster or more efficiently or more anything. It doesn’t change. We still have to build things one by one. One at a time.

Ross Taylor: You build them one by one, but you can basically order and backlog your parts and have a better understanding of your revenue stream and your €“ and the tempo at which you need to build things. You don’t find €“ you wouldn’t find you’re in the end of the year and waiting for Congress to pass a budget or something of that nature. So…

Alexander Shen: But again, it depends. I think the details will €“ the deviled in the details. More is better, absolutely. We can all agree on that.

Ross Taylor: Yes. Okay. And for a moment there, I felt like I was at Thanksgiving dinner early, so, hey, I’ll pass it on to the next person.

Alexander Shen: Thank you.

Thomas Sammons: Thank you, Ross.

Operator: Okay. We have a question coming from . Please proceed.

Unidentified Analyst: Hi, Alex and Tom. Can you hear me?

Alexander Shen: Yes.

Unidentified Analyst: Good. Nice job on the quarter. Things seem to be turning around as we would expect. A couple of questions, first one for Tom, regarding the balance sheet and the renewal of the loans, what additional color can you add to that process?

Thomas Sammons: Well, the loans right now, the term loan matures in December, and we’re working with the bank on a renewal.