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TechPrecision Corporation Message Board

vananr 1 post  |  Last Activity: Jul 13, 2014 7:43 AM Member since: May 12, 2011
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  • Reply to

    Out with the Old... In with the New

    by jamesmdonegan Jul 3, 2014 8:31 AM
    vananr vananr Jul 13, 2014 7:43 AM Flag

    The problem facing this company is in the contract pricing and execution. They have clearly stated in many of their filings that they opened their china operation mainly because of their primary customer, in this case GTAT. It was a failure that they did not get even a small fraction of this original sapphire order that went into the Apple's Arizona facility for their china operation. The management clearly failed in that regard. They are really very lucky to get that 8 million order for Ranor. Looking back, that was clearly a lifeline. I hope they had no problems in executing their Jan-May deliveries.

    As per their recent filings, the outstanding balance with the bank is around 1.5 million which is secured with an asset that has a 2011 assessment value of 4.5 million and possibly some additional cash collateral. So, the bank is clearly making more money in interest and fees with a very little risk of losing their capital. Though they are paying high interest rates, I think they have done a good job in executing the 4.15 million loan with Utica which ties only their machinery and equipment, not the land and building. So far, the company has paid heavily on fees and higher interest rates. I hope they soon announce a new asset based financing to meet their current and future needs with a favorable terms. As per their previous conference calls, the current infrastructure should support up to a 65 million revenue. That is at least few years from now, if they execute well.

    Though we all expect things to improve quickly, looking at the challenges they faced when Jim Molinaro left or let go, in my opinion executive chairman Len have done a very good job so far. Tuesday, I hope to hear some good news on the cost control, GTAT deliveries (some follow-on order may be a bit wishful thinking), new financing, some improvement on the backlog/revenue front and most importantly, end of under priced navy contract losses which is hitting the company on all fronts.

    Good luck to all.

TPCS
0.34+0.04(+13.33%)Sep 12 3:58 PMEDT

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