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

Unidentified Analyst: Do you think that that renewal will be for multiple years? Is there anything that you could tell us about not your expectations, but how you’re looking to finance this company?

Thomas Sammons: Well, it was a five-year term loan, and we’re looking at the same.

Unidentified Analyst: Okay. Alex, Stadco, we all know, is located in California. I’d like to know whether you or Tom or maybe other individuals at Ranor are heading out there. But more importantly, not so much to comment on how often Alex, you are out there and the frequency of that, but maybe a more general comment about your team. Our team members from Ranor going back and forth. Have we deposited maybe for a time period, some talent from Ranor to stay at Stadco. Maybe you could add some color to that?

Alexander Shen: I’m engaging where I see fit. I think my track record speaks for itself.

Unidentified Analyst: Yes. I think that, that’s right. What I was asking is, does Stadco require, I guess, incremental talent that we have at Ranor to go out there for whatever various reasons. I’m not asking for specific reasons. But is there the transfer of that talent? And is that talent actually €“ is it necessary for that talent to win there?

Alexander Shen: So we already explained that Ranor is submarine centric, even though we’re in the same defense industry and that Stadco is military aircraft centric, the two don’t usually play together much being one in the air and one at sea. So what we tend to work on is the common stuff. So I am the CEO of TechPrecision, and I need to find the commonalities. I’m not trying to not answer your question, but I’m just trying to point out the logic. Am I transferring people from Ranor to Stadco, I wouldn’t be able to tell you that. That’s not something I can comment on right now. So I’m trying to answer the question so you can get the answer on a different way. One plays in the air and one plays in the sea. So they don’t usually play together. So hopefully, that the answer can be inferred from that comment.

Unidentified Analyst: Right. Understood. And I was thinking more along the lines of efficiency or plant or whatever other talent and capabilities and expertise that Ranor has that could be helpful to Stadco. Nevertheless, moving on. As it relates to capital expenditures, I think that in this industry as well as others, often equipment could last for many, many years, often decades. When we think about our capital expenditures going forward, is there any level of color that you could give us to a degree that we have a better understanding of the status of those two plants. And I’m not €“ again, I’m not looking for specifics, but do we need equipment? Do we need to replace equipment? Is that more necessary or immediate at Stadco versus Ranor? Is there any kind of detail that you could give us to understand where investment dollars might go as it relates to CapEx and now are two different businesses?

Alexander Shen: So the CapEx €“ what I can tell you is the CapEx dollars are directed to either enhance currently available capability or rebuild currently available capability. That’s where we concentrate our CapEx on. Other than that, it’s going to get very super specific, which I’m not going to be able to talk about.

Unidentified Analyst: Yes, nor did I expect you to. So then just one follow-up question as it relates to something Ross asked about which was big picture referring to order flow. So if we €“ what you said very clearly was that regardless of that order flow, we still need to build everything one at a time, and that makes a lot of sense. The question that I have for you is that if you were able to build five or 10 items collectively together versus one or two items, I was under the impression that, that’s where we do, in fact, realize some efficiencies. Am I ballparking thinking that correctly or kind of set me straight on that?