TechPrecision Corp (TPCS) 2024 Q1 法說會逐字稿

Greetings. Welcome to the TechPrecision Corporation Fiscal 2024 First Quarter Financial Results Conference Call. (Operator Instructions) Please note, this conference is being recorded.

問候。歡迎參加 TechPrecision Corporation 2024 財政年度第一季財務業績電話會議。 （操作員說明）請注意，本次會議正在錄製中。

I will now turn the conference over to your host, Brett Maas, Managing Partner of Hayden IR. You may begin.

現在我將會議交給主持人、Hayden IR 管理合夥人 Brett Maas。你可以開始了。

Thank you. On the call today is Alex Shen, Chief Executive Officer; and Bobbie Lilley, the Chief Financial Officer.

謝謝。今天接聽電話的是執行長 Alex Shen；和財務長鮑比·利利 (Bobbie Lilley)。

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 the safe harbor for forward-looking statements as contained in the Private Securities 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.

在開始之前，我想提醒聽眾，管理層的言論可能包含前瞻性陳述，這些陳述存在風險和不確定性，管理層可能會針對您的問題做出額外的前瞻性陳述。因此，該公司聲稱受到 1995 年《私人證券訴訟改革法案》中所載前瞻性陳述的安全港保護。實際結果可能與今天討論的結果有所不同，因此，我們建議您參閱更詳細的風險討論以及該公司向美國證券交易委員會提交的財務文件中的不確定性。

In addition, projections as to the company's future performance represents management's estimates as of today, August 21, 2023. TechPrecision assumes no obligation to revise or update these forward-looking statements.

此外，對公司未來業績的預測代表了截至今天（2023 年 8 月 21 日）管理層的估計。TechPrecision 不承擔修改或更新這些前瞻性陳述的義務。

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?

說到這裡，我想將電話轉給執行長 Alex Shen，讓他致開幕詞。亞歷克斯？

Brett, thank you. Good afternoon, everyone, and thank you for joining us.

布雷特，謝謝你。大家下午好，感謝您加入我們。

Customer confidence remains high, driving a strong backlog increase. Total consolidated backlog is at a strong $46.3 million as of June 30, 2023. First quarter consolidated net sales were $7.4 million, 4% higher when compared to $7.1 million in fiscal year 2023 first quarter.

客戶信心依然高漲，推動積壓訂單強勁成長。截至 2023 年 6 月 30 日，合併積壓訂單總額高達 4,630 萬美元。第一季合併淨銷售額為 740 萬美元，比 2023 財年第一季的 710 萬美元成長 4%。

On a consolidated basis, we had a net loss of $527,000. Our Stadco subsidiary reported strong revenue growth with net sales of $3 million, or 26% higher than the same period 1 year ago. Stadco gross profit improved, reporting a loss of $588,000 versus a loss of $1.023 million from the same period 1 year ago, an improvement of $435,000.

合併後，我們的淨虧損為 527,000 美元。我們的 Stadco 子公司報告收入強勁成長，淨銷售額達 300 萬美元，比一年前同期成長 26%。 Stadco 毛利有所改善，虧損 588,000 美元，而一年前同期虧損 102.3 萬美元，提高了 435,000 美元。

Ranor reported net sales of $4.5 million or a 5% decrease from the first quarter of fiscal year 2023. This decrease was due to a less favorable mix.

Ranor 報告淨銷售額為 450 萬美元，較 2023 財年第一季下降 5%。這一下降是由於組合不太有利。

First quarter net sales for Stadco compared favorably with the same period a year ago. Our losses have narrowed year-over-year. We expect gradual improvement in gross profit and gross margin. We expect to deliver our strong backlog of $46.3 million over the course of the next 1 to 3 fiscal years with revenue growth and gross margin expansion.

Stadco 第一季淨銷售額與去年同期相比表現良好。我們的虧損年減。我們預計毛利和毛利率將逐步改善。我們預計在未來 1 至 3 個財年中，隨著收入成長和毛利率擴大，我們將交付 4,630 萬美元的大量積壓訂單。

We will continue to focus on tactical execution and risk mitigation, driving both subsidiaries to fully comprehend, successfully manage and successfully meet customer expectations, enabling continuous recapture and continuous retention of customer confidence.

我們將持續聚焦戰術執行和風險緩解，推動兩家子公司充分理解、成功管理、成功滿足客戶期望，不斷奪回、持續保持客戶信心。

We can all clearly see the positive results of this focus, evidenced by the continued high customer confidence which enabled our strong backlog growth. We remain highly focused on cash management, a critical piece of risk mitigation and continue to manage and control expenses, capital expenditures, customer advances, progress billings and final invoicing at shipment.

我們都可以清楚地看到這一重點的積極成果，客戶持續的高信心證明了這一點，這使得我們的積壓訂單強勁增長。我們仍然高度關注現金管理，這是緩解風險的關鍵部分，並繼續管理和控制費用、資本支出、客戶預付款、進度帳單和出貨時的最終發票。

I would like to turn the call over now to our CFO, Bobbie Lilley, to continue with the review of our first quarter results. Bobbie?

我現在想將電話轉給我們的財務長 Bobbie Lilley，以繼續審查我們第一季的業績。博比？

Thank you, Alex. Net sales for the first quarter of fiscal year 2024 were $7.4 million or 4% higher when compared to the same quarter (technical difficulty) sales were $6.7 million or 7% higher than the prior year period due primarily to less favorable project mix at Ranor and unabsorbed overhead at Stadco. Due to the higher cost, gross profit was $694,000 or 15% lower compared to the same quarter a year ago.

謝謝你，亞歷克斯。 2024 財年第一季的淨銷售額為 740 萬美元，較同季（技術難度）高出 4%；銷售額為 670 萬美元，比上年同期高出 7%，這主要是由於 Ranor 和Stadco未吸收的開銷。由於成本上升，毛利為 694,000 美元，比去年同期下降 15%。

SG&A expense decreased by $101,000 or 7%, primarily due to cost reductions at Stadco. Operating loss was $580,000 or 4% higher than the same quarter a year ago.

SG&A 費用減少了 101,000 美元，即 7%，主要是由於 Stadco 的成本降低。營運虧損為 58 萬美元，比去年同期高出 4%。

Interest expense for the first quarter increased by $10,000 due to more borrowing under our revolver loan and higher loan cost amortization. We ended the quarter with $2.3 million outstanding under the revolver loan.

由於我們的循環貸款項下借款增加以及貸款成本攤銷增加，第一季的利息支出增加了 10,000 美元。本季末，我們的循環貸款餘額為 230 萬美元。

Moving on to our financial position. Cash provided by operating activities was $115,000, and cash used for capital expenditures was $1.9 million. Financing activities provided net cash of $1.5 million. Our total debt was $7.6 million on June 30, 2023, compared to $6.1 million at the end of March 31, 2023, as we borrowed an additional $1.7 million under the revolver loan. Cash balance at March 31, 2023, was $272,000 compared to $535,000 at March 31, 2023. I'm sorry, that's June 30, 2023 was $272,000.

繼續我們的財務狀況。經營活動提供的現金為115,000美元，資本支出的現金為190萬美元。融資活動提供了 150 萬美元的淨現金。截至 2023 年 6 月 30 日，我們的總債務為 760 萬美元，而截至 2023 年 3 月 31 日，我們的總債務為 610 萬美元，因為我們根據循環貸款額外借了 170 萬美元。 2023 年 3 月 31 日的現金餘額為 272,000 美元，而 2023 年 3 月 31 日的現金餘額為 535,000 美元。很抱歉，2023 年 6 月 30 日的現金餘額為 272,000 美元。

Working capital was $4.9 million at June 30, 2023 compared to $5.6 million at March 31, 2023.

截至2023年6月30日，營運資金為490萬美元，而2023年3月31日為560萬美元。

With that, I will now turn the call back over to Alex.

這樣，我現在將把電話轉回給亞歷克斯。

Thank you, Bobbie. 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 components.

謝謝你，鮑比。對於那些可能不太熟悉我們公司的通話人員。 TechPrecision 是一家精密大型製造零件和精密大型機械加工金屬零件的客製化製造商。

The components that we manufacture are custom -- are customer designed. We sell to customers in 2 main industry sectors, defense and precision industrial, 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 these fields might discuss.

我們製造的組件是客製化的——是客戶設計的。我們向兩個主要工業領域的客戶銷售產品：國防和精密工業，主要是國防。我們的大部分工作都是在對保密性高度敏感的行業中進行的，這使得我們無法公開談論非這些領域的公司可能討論的許多事情。

As such, there are real limits as to what I can discuss and sometimes those limits change. Please understand that by saying that I am not allowed to discuss that is based on customer requirements and the environment in which we conduct business.

因此，我可以討論的內容確實有限制，有時這些限制會改變。請理解，我不允許討論是基於客戶的要求和我們開展業務的環境。

Even though I have read the last statement at every conference call for the last several years, we continue to get questions both written and oral or hear about individuals making statements that what I'm saying is not accurate that it is the Board silencing me or that I alone am making these decisions. As I have said, repeatedly over and over again, we are not the ones making these rules, not me and not the Board. The decision as to what we can say is based solely and completely on rules, rules from our clients. These are not my rules. These are not the Board's rules.

儘管我在過去幾年的每次電話會議上都讀過最後的聲明，但我們仍然收到書面和口頭的問題，或者聽到有人發表聲明，認為我所說的不准確，是董事會讓我沉默或我獨自做出這些決定。正如我一再說過的，我們不是製定這些規則的人，不是我，也不是董事會。我們能說什麼的決定完全完全基於我們客戶的規則。這些不是我的規則。這些不是董事會的規則。

There are many things we would love to speak about, but we are restricted. It is the same for all of our direct competitors.

我們有很多事情想談論，但我們受到限制。對於我們所有的直接競爭對手來說都是一樣的。

Over the last several years, we have made great progress by performing good work and following instructions. This has led to about a threefold increase in stock price since the present Board took over. That is a winning formula.

過去幾年來，我們透過出色的工作和聽從指示，取得了很大的進步。自現任董事會接任以來，這導致股價上漲了約三倍。這是一個制勝法寶。

As a final point, I do not see these clients changing these restrictions anytime in the near or even distant future. So please, do not expect anything to change. Where we can speak about it, we will. But we will not jeopardize our relationships with our clients, and we will not jeopardize the future orders we want and expect to receive from them.

最後一點，我認為這些客戶不會在不久甚至遙遠的將來改變這些限制。所以，請不要期望任何改變。只要我們能談論它，我們就會談論它。但我們不會危及我們與客戶的關係，也不會危及我們希望和期望從他們那裡收到的未來訂單。

TechPrecision is proud and honored to serve the United States defense industry, specifically, naval submarine manufacturing through our Ranor subsidiary and military aircraft manufacturing through our Stadco subsidiary. We aim to secure and maintain enduring partnerships with our customers.

TechPrecision 很榮幸能夠為美國國防工業提供服務，特別是透過我們的 Ranor 子公司進行海軍潛艇製造，並透過我們的 Stadco 子公司進行軍用飛機製造。我們的目標是確保並維持與客戶的持久合作關係。

Overall, in both the Ranor 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.

總體而言，在 Ranor 和 Stadco 子公司中，我們繼續在國防領域看到有意義的機會，我們的積壓訂單數量證明了這一點。我們對未來幾季營收成長和獲利能力提高的前景感到鼓舞。

Operator, you can open the line for questions.

接線員，您可以開通提問線路。

(Operator Instructions) The first question comes from Rob Straus, private investor.

（操作員說明） 第一個問題來自私人投資者 Rob Straus。

So the first thing, I guess, is to welcome Bobbie Lilley as CFO. So congratulations, Bobbie, on your new position.

因此，我想，第一件事就是歡迎 Bobbie Lilley 擔任財務長。恭喜鮑比獲得新職位。

Thank you.

謝謝。

I have a number of questions, Alex. And of course, you'll say what you can and can't comment about. The first one is on Ranor. And we're certainly dealing with the predictability of that business from the standpoint of, as you stated, product mix. I'm curious on 2 fronts. Number one, how predictable is our product mix for that business? And secondly, how does volume and pricing get incorporated into the health of our Ranor performance?

我有很多問題，亞歷克斯。當然，你會說出你可以發表評論和不能發表評論的內容。第一個是在拉諾爾。正如您所說，從產品組合的角度來看，我們當然正在處理該業務的可預測性。我對兩方面感到好奇。第一，我們針對該業務的產品組合的可預測性如何？其次，銷售量和定價如何融入我們 Ranor 業績的健康狀況？

How predictable is the product mix? Well, I don't forecast. So we won't be predicting any time soon. I think that has been my mode of operation, so that should not be a surprise, correct?

產品組合的可預測性如何？嗯，我不預測。所以我們不會很快做出預測。我認為這就是我的運作方式，所以這不應該令人驚訝，對嗎？

Understood. I was not asking for you to predict to the broader audience. But I was referencing internally given that we have a backlog that runs off, I think you say over 1 to 3 fiscal years, does the backlog that we have make the product mix operationally for you predictable? Or is that not as clear or the outcome?

明白了。我並不是要求你向更廣大的受眾做出預測。但我在內部提到的是，考慮到我們的積壓訂單會耗盡，我想你說的是超過1 到3 個財年，我們的積壓訂單是否能讓你的產品組合在營運上是可預測的？還是結果不那麼明確？

The strength of the backlog does not increase the strength of any predictability of something that's lumpy and unpredictable. We do our best every day, with different factors that change the predictability. Product mix certainly is a factor. There is many different details that go into product mix that cause it to be -- to affect how we perform. Overall, when you smooth it out over a much longer period of time and not quarter by quarter, then your predictability or the product mix impact smooths out over time. Our reporting requires us to report quarter by quarter.

積壓的強度並不會增加對不穩定和不可預測的事物的任何可預測性的強度。我們每天都竭盡全力，但不同的因素會改變可預測性。產品組合當然是一個因素。產品組合中有許多不同的細節，導致它影響我們的表現。總的來說，當你在更長的時間內而不是逐個季度地平滑它時，你的可預測性或產品組合的影響就會隨著時間的推移而平滑。我們的報告要求我們按季度進行報告。

Okay. A couple of questions on Stadco. In a previous call, it was clear that we were having some equipment issues. Are you able to update us on the status of that equipment getting back up and running and making any other general Stadco plant comments as it relates to that plant running as you would expect at this time.

好的。關於 Stadco 的幾個問題。在之前的通話中，很明顯我們遇到了一些設備問題。您能否向我們介紹該設備恢復運作的最新情況，並就 Stadco 工廠的其他一般性評論進行評論，因為這與您目前所期望的該工廠的運作有關。

Well, running, as I expect, or running as I want it to don't coincide very much when we are still inside a turnaround situation, number one. So I would like it, I want it to perform better and break down less.

好吧，當我們仍處於扭轉局面時，第一，按照我的預期運行，或者按照我希望的方式運行，這並不太吻合。所以我想要它，我希望它性能更好並且故障更少。

The many years of deferred maintenance, certainly impacts what happens to our equipment. The specifics of the threats internally that deferred maintenance for over a period of years have caused cost these specific threats that caused our problems last quarter that we reported have been dealt with.

多年的延期維護肯定會影響我們設備的狀況。內部威脅的具體情況導致維護推遲了多年，這些具體威脅導致我們上季度報告的問題已得到處理。

That doesn't mean there's no more specific threats. What it means is that those specific threats have been attacked and neutralized and with a very low probability of them happening again. However, these machines are complicated. There are many threats. Just because I dealt with 1 or 2, it doesn't mean there won't be any more coming up.

這並不意味著不存在更具體的威脅。這意味著這些特定威脅已被攻擊並消除，並且再次發生的可能性非常低。然而，這些機器很複雜。有很多威脅。僅僅因為我處理了 1 或 2 個問題，並不意味著不會再有更多的問題出現。

I will tell you the ones that I have attacked and neutralized. Those will not be coming back anytime soon. It's difficult for me to predict inside a turnaround, how this is going to play out and predict what else is going to break down. I guarantee there will be breakdowns. Absolutely. What are they? And how much are they? I would like to know the same thing.

我會告訴你那些我攻擊過、壓制過的。這些不會很快回來。對我來說，很難預測一個轉變的過程，這將如何發展，也很難預測其他什麼將會崩潰。我保證會有故障。絕對地。這些是什麼？它們多少錢？我也想知道同樣的事情。

What our goal here is to retain customer confidence and continue to deliver good parts on time and balance that against any malfunction and still continue to resecure customer confidence and keep it. We do that every day. This is still a turnaround. But as you can see, the losses are narrowing. That's the key point. I hope I answered your question.

我們的目標是保持客戶的信心，繼續按時交付優質零件，並在任何故障的情況下平衡，並繼續重新獲得客戶的信心並保持這種信心。我們每天都這樣做。這仍然是一個轉機。但正如你所看到的，損失正在縮小。這就是關鍵點。我希望我回答了你的問題。

You did. And I think it's good news that the equipment failures that were reported recently are in fact solved. And that's, I think, an important point. Just 2 more points on Stadco...

你做到了。我認為最近報道的設備故障實際上已經解決是個好消息。我認為這是很重要的一點。 Stadco 剩下 2 分...

Just to make sure we all understand each other on the call, for all the listeners and for all the future listeners that will play back the recording. These specific threats that impacted our earnings last quarter that were reported have been attacked and neutralized. That does not mean there are no more threats left. But those specific ones, it's very likely they won't be coming back anytime soon to plague us. We've neutralized them.

只是為了確保我們在通話中都能相互理解，為所有聽眾以及所有未來將播放錄音的聽眾。報告的這些影響我們上季度收益的具體威脅已被攻擊和消除。這並不意味著不再有威脅。但那些特定的，它們很可能不會很快回來困擾我們。我們已經消滅他們了。

Understood. A couple of other questions on Stadco. First, in the 10-Q NT that was filed, there was a comment made about the ongoing efforts to integrate Stadco. I'm not sure if the verbiage was the integration is not yet complete, but something to that narrative. Could you help us understand what that means? And from your perspective, what you have left to go regarding the Stadco integration?

明白了。關於 Stadco 的其他幾個問題。首先，在提交的 10-Q NT 中，對正在進行的 Stadco 整合工作做出了評論。我不確定措辭是否是集成尚未完成，但與該敘述有關。您能幫助我們理解這代表什麼嗎？從您的角度來看，對於 Stadco 整合，您還需要做什麼？

That's a very complicated and difficult questions. There's all facets of integration that need to happen. They have never had a parent company. Ranor has always had TechPrecision as the parent company. They were not a public reporting entity. Now they need to report into and roll up into a public reporting entity. Those are major pieces.

這是一個非常複雜和困難的問題。整合的各個面向都需要發生。他們從來沒有母公司。 Ranor 一直將 TechPrecision 作為母公司。他們不是公共報告實體。現在他們需要向公共報告實體報告並彙總。這些都是主要部分。

Do you think that the Stadco opportunity is as great today as you thought it was when the acquisition was made 2 years ago?

您認為如今 Stadco 的機會是否與您兩年前收購時所認為的一樣好？

I don't need to think. The facts are there. This is not based on -- that's not based on my thoughts, the facts are there. The opportunity solid.

我不需要思考。事實就在那裡。這不是基於——這不是基於我的想法，事實就在那裡。機會紮實。

The next question comes from Kris Tuttle with Blue Caterpillar. We have a question from Ross Taylor with ARS Investment Partners.

下一個問題來自 Blue Caterpillar 的 Kris Tuttle。我們有 ARS Investment Partners 的 Ross Taylor 提出的問題。

Alex, could you give us an idea of how much production was lost at Stadco over the prior 2 quarters due to these equipment issues. Not dollar amounts, but percentage of capacity, percentage of run rate, something of that nature.

Alex，您能否告訴我們 Stadco 在過去兩個季度由於這些設備問題而損失了多少產量。不是美元金額，而是容量百分比、運行率百分比，諸如此類的東西。

A little difficult to give you a pat answer right now because that would take into some different assumptions of what ifs. I'm not trying to avoid answering the question.

現在很難給你一個簡單的答案，因為這會考慮到一些不同的假設。我並不是想迴避回答這個問題。

Do you think that when you look at did we lose 4 weeks of production, 8 weeks of production? What I'm getting at is, if you look at the numbers in Stadco...

您是否認為我們損失了 4 週、8 週的生產？我的意思是，如果你看看 Stadco 的數字...

It's not a straight -- the problem is it's not a straight-line analyst answer is the problem. There are different moving pieces. If many of them collapsed, which one did what. It's hard to understand because there's a number of different pieces of equipment. It's not just 1 or 2. There are many double handfuls. So really need a much more -- need a lot of time to break it all down and analyze it. I usually spend my time neutralizing threats after I see them, so that they don't happen again. .

這不是一條直線──問題是這不是一條直線，分析師的答案就是問題。有不同的移動部件。如果其中許多倒塌，那麼哪一個做了什麼。這很難理解，因為有許多不同的設備。不只是1、2把，還有很多雙把。所以真的需要更多——需要很多時間來分解和分析它。我通常會在看到威脅後花時間消除它們，以免它們再次發生。 。

And probably phrase it in a way that tells us we probably lost maybe somewhere around $0.25 million, maybe half of that, maybe all of that, something like that. That's what I think for the last quarter. But again, it's difficult to go back and try to predict what could have been. And it's all in the past. My focus needs to be moving forward. And my focus needs to be, if I kill a threat, it needs to stay dead.

也許用這樣的方式來表達我們可能損失了大約 25 萬美元，也許是一半，也許是全部，諸如此類。這就是我對上個季度的看法。但同樣，很難回去嘗試預測會發生什麼。而這一切都已成為過去。我的注意力需要向前推進。我的重點是，如果我殺死了一個威脅，它就必須保持死亡狀態。

Okay. What I'm trying to understand is the last call, you made the comment that you never failed at a turnaround. You've done an amazing job with Ranor. It's been an unparalleled success. And while we understand it's, your famous description, lumpy, you've been able to push operating margins there into the mid-upper 30s. And that's something to be commended. Stadco is not showing anywhere near that kind of traction. Although when you bought the business, I would have thought and comments were made around the time that it was a very similar business.

好的。我想了解的是最後一次通話，你說過你在扭轉局面時從未失敗過。你和 Ranor 一起完成了出色的工作。這是無與倫比的成功。雖然我們知道這是您著名的描述，但您已經能夠將營業利潤率推至 30 多歲左右。這是值得讚揚的事。 Stadco 並沒有表現出類似的吸引力。儘管當您購買該業務時，我會認為這是一個非常相似的業務，並且在當時發表了評論。

So therefore, you should be able to generate similar investment performance on that business. I understand there are certain cost functions. So for example, we carry a 4%, 5% lower operating margin for Stadco than we do in Ranor. But you've lost a fair amount of money. We're 2 years into a turnaround in this business. The last 2 quarters have been the worst quarters. How confident are you that we're going to get back to where we're operating breakeven or above as you were prior to the last few quarters overall as a company.

因此，您應該能夠在該業務上產生類似的投資績效。我知道存在某些成本函數。例如，Stadco 的營業利潤率比 Ranor 低 4%、5%。但你已經損失了相當多的錢。我們的業務已經轉虧為盈兩年了。過去兩個季度是最糟糕的季度。您對我們將恢復到損益平衡或高於過去幾季之前的整體營運水準有多大信心？

So I will take you back a little bit to my previous statements. The gross profit has improved. If we compare this quarter, with the same quarter 1 year ago, an improvement of $435,000, okay? We lost $1.023 million from that same period 1 year ago. We are closing the gap, and that is a fact. We will continue to close this gap.

因此，我將帶您回顧我之前的發言。毛利有改善。如果我們將本季與 1 年前的同一季度進行比較，則增加了 435,000 美元，好嗎？與一年前同期相比，我們損失了 102.3 萬美元。我們正在縮小差距，這是事實。我們將繼續縮小這一差距。

How long does it take you to close that gap?

您需要多長時間才能縮小這一差距？

I don't know.

我不知道。

Did you close it in this fiscal year?

您在本財政年度關閉了嗎？

Ross, please. I can't forecast that.

羅斯，請。我無法預測這一點。

My guess is that you probably have a forecast for it somewhere, but I won't go into that. I would assume your Board wants to understand where things are going and how they -- how quickly they turn.

我的猜測是你可能在某個地方對此有預測，但我不會詳細討論。我認為你們的董事會想要了解事情的進展以及它們如何——它們轉變的速度有多快。

You have talked about that. You guys basically have almost a nonexisting investor relations effort. It's an area that really definitely needs to be improved. We get a lot of the line that you can't talk about things. But to me, the business here is while very complicated to execute, not that complicated to understand at a high level. You have 2 divisions. Each of these divisions has a series of known programs that it's involved in. Each of those divisions is watching known programs ramp. There are things that are going to drive business higher in each of them.

你已經談過這一點。你們基本上幾乎沒有在投資者關係方面做出努力。這是一個確實需要改進的領域。我們常聽到這樣的話：你不能談論事情。但對我來說，這裡的業務雖然執行起來非常複雜，但從高層次理解起來並不複雜。你有2個部門。每個部門都有其參與的一系列已知專案。每個部門都在關注已知專案的進度。其中每個領域都有一些可以推動業務發展的因素。

We look at it figuring each business, each division, Stadco and Ranor should be able to produce $35 million, $40 million, $45 million in revenues. Those divisions should -- you've shown you can produce high 30s operating margins in Ranor. My assumption is you can produce probably high 20s towards 30 in Stadco. If you get that, you get a blended rate around 32% to 33%. You have a business that would therefore produce operating income of $24 million to $28 million annually. You have your SG&A and other expenses.

我們計算每個業務、每個部門、Stadco 和 Ranor 應該能夠產生 3500 萬美元、4000 萬美元、4500 萬美元的收入。這些部門應該——你已經證明你可以在 Ranor 創造 30 多倍的高營業利潤。我的假設是你可以在 Stadco 中取得 20 到 30 的高成績。如果你得到這個，你會得到大約 32% 到 33% 的混合率。因此，您的企業每年可產生 2,400 萬至 2,800 萬美元的營業收入。您有 SG&A 和其他費用。

You back that down, you get $14 million to $18 million, and that should be free cash flow annually, which comes out to $1.5 to $2 a share in free cash flow. I actually just laid out your thesis, and I did not want to talk about something that any of your customers will be upset about. I didn't reference any programs, although the programs are public knowledge. I didn't reference run rates, although the demanded run rates for these programs are public knowledge.

如果你支持這一點，你將獲得 1,400 萬至 1,800 萬美元，這應該是每年的自由現金流，相當於每股 1.5 至 2 美元的自由現金流。事實上，我只是闡述了你的論文，我不想談論一些會讓你的客戶感到不安的事情。我沒有引用任何程序，儘管這些程序是公共知識。我沒有提及運行率，儘管這些程式所需的運行率是眾所周知的。

I didn't comment on the pressure to increase the run rate in one program, but that's public knowledge as well. I think you need to do a better job. You're really running 3 turnarounds here, Alex, in my mind. You're running the turnaround at Ranor at which you have succeeded wonderfully. You're running a turnaround at Stadco. It hasn't gained traction yet. But from listening to you, you're comfortable and confident that it will gain traction.

我沒有對提高一個程式的運作率的壓力發表評論，但這也是眾所周知的。我認為你需要做得更好。在我看來，亞歷克斯，你真的在​​這裡實現了 3 次轉變。您正在拉諾實現扭虧為盈，並且取得了巨大的成功。您正在 Stadco 實現扭虧為盈。它尚未獲得關注。但聽了你的講述，你會感到舒服並相信它會獲得吸引力。

And when it does, I would expect we'll see a rapid improvement there just as we saw in Ranor. But the third one you're running is you're the CEO of TechPrecision. And while you said the stock has tripled since this team came together, the fact is this stock is basically showing at or under the levels that saw that in each of the last 2, 3 years, even going back to 2019. And that's not acceptable. And that's part of what's causing this whole effort and this failure to actually better engage your shareholders is part of why that's happening is because it's increasingly difficult to get professional investors. You uplisted, I would believe, to attract professional investors, people like myself.

當它發生時，我希望我們會看到那裡的快速改進，就像我們在拉諾爾看到的那樣。但您所管理的第三位是 TechPrecision 的執行長。雖然你說自從這個團隊聚集以來，該股票已經上漲了兩倍，但事實上，該股票的表現基本上等於或低於過去2、3 年的水平，甚至可以追溯到2019 年。這是不可接受的。這就是整個努力的部分原因，而未能真正更好地吸引股東也是發生這種情況的部分原因，因為吸引專業投資者越來越困難。我相信，你上市是為了吸引專業投資者，像我這樣的人。

But you're not going to find yourself able to do that until you learn a bigger way to engage, you don't have to talk specifics. You don't have to give things away. But as I just demonstrated, you can talk about the TechPrecision story and not say anything that Electric Boat or Sikorsky or Boeing or Newport News or anyone else would be upset with. So I just want to strongly encourage you to make that effort because that's 1 of the 3 turnarounds, and that's judged not by you and not by the Board. That's judged by the market. And the market will tell us when you've succeeded in that the greatest of all turnarounds that you're embodied with, which is that of being CEO of TechPrecision.

但除非你學會了一種更大的參與方式，否則你不會發現自己能夠做到這一點，你不必談論具體細節。你不必放棄東西。但正如我剛才所示範的，你可以談論 TechPrecision 的故事，而不是說任何令 Electric Boat、西科斯基、波音、紐波特紐斯或其他任何人感到不安的事情。因此，我只是想強烈鼓勵您做出這項努力，因為這是 3 次轉變中的 1 次，而且這不是由您或董事會來判斷的。這是由市場來判斷的。市場會告訴我們您何時成功實現了您所經歷的最偉大的轉變，即成為 TechPrecision 的執行長。

The next question comes from Kris Tuttle with Blue Caterpillar Investments.

下一個問題來自 Blue Caterpillar Investments 的 Kris Tuttle。

Can you hear me this time?

這次你聽得到我說話嗎？

We can.

我們可以。

Okay. Terrific. I did have a couple of questions. Good to see at least the numbers moving in the right direction. So that's good. My question -- one of my questions is on your input costs. I'm not sure I understand like how volatile and how changeable are they from quarter to quarter, year-over-year? And are those things that you have embedded in your contracts to offset. I'm just curious how you handle the volatility of the input costs if you have those.

好的。了不起。我確實有幾個問題。很高興至少看到數字朝著正確的方向發展。所以這樣很好。我的問題——我的問題之一是關於你們的投入成本。我不確定我是否理解它們每季、每年的波動性和變化有多大？那些是您在合約中嵌入的要抵消的東西。我只是好奇如果你有這些投入成本的波動性，你會如何處理。

Could you please define input further?

能進一步定義輸入嗎？

Well, so anything that, I guess, is part of your cost of goods sold. Not including the people. But metals, materials, fasteners, sub components, subassemblies, those kind of things.

嗯，所以我想，任何東西都是你的銷售成本的一部分。不包括人民。但是金屬、材料、緊固件、子部件、子組件等等。

Okay. So predominantly, we are a custom manufacturer that our core capability is complex critical welding and fabrication and complex critical machining, those services. Not so much while you were talking about materials, metals, maybe to a certain extent, but not so much. So as far as the lever and a factor to really enhance, there's no low-hanging fruit there.

好的。因此，我們主要是一家客製化製造商，我們的核心能力是複雜的關鍵焊接和製造以及複雜的關鍵加工，這些服務。當你談論材料、金屬時，可能在某種程度上，但不是那麼多。因此，就真正增強的槓桿和因素而言，沒有唾手可得的成果。

Okay. Yes, I understand what you're saying. I did want to ask again a little bit about this. You mentioned closing the gap over time. And maybe the way to ask this is, if you can imagine for a moment, your operations running at the state that you are 100% satisfied with them, are we halfway to that? Is it more or less than that? I'm just trying to get a feeling for when you look at overall operations, kind of where are you? Where is it today in relation to where you would like to see it sometime in the future?

好的。是的，我明白你在說什麼。我確實想再問一下這個問題。你提到隨著時間的推移縮小差距。也許問這個問題的方式是，如果你能想像一下，你的營運運作在你對它們 100% 滿意的狀態下，我們是否已經達到了一半？比這個多還是少？我只是想了解一下整體營運狀況，你在哪裡？與您希望在未來某個時間看到它的位置相比，它今天在哪裡？

I think we would all like me to give that answer, including myself. Whatever answer I give, it's going to be some kind of a wrong answer. I have a hard and fast rule that we shall not forecast a business that's lumpy enough to bite me right in the buttocks. Therefore, rendering any type of forecast on the weather is probably not a great idea. So I'm going to stick to what works. What we need to do is concentrate. And for example, there is a problem -- there was a problem this past quarter with absorption. Well, we need to have better absorption, which means we need to have better throughput to do the absorption. So the concentration needs to be blocking and tackling every day so that we have more manufacturing output to do the absorption. Otherwise, we will continue to have unabsorbed overhead at Stadco as we described earlier.

我想我們都希望我給這個答案，包括我自己。無論我給什麼答案，它都將是某種錯誤的答案。我有一條硬性規定，那就是我們不能預測一個足以讓我痛不欲生的事業。因此，提供任何類型的天氣預測可能不是一個好主意。所以我會堅持做有效的事。我們需要做的就是集中精力。例如，有一個問題——上個季度的吸收出現了問題。嗯，我們需要有更好的吸收，這意味著我們需要有更好的吞吐量來進行吸收。所以集中需要每天進行攔截和處理，以便我們有更多的製造產出來吸收。否則，正如我們之前所述，Stadco 將繼續有未吸收的管理費用。

I'd now like to turn the floor back to Alex for any closing remarks.

現在我想請 Alex 做結束語。

Have a good day, everyone. Thank you very much.

祝大家有美好的一天。非常感謝。

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束，此時您可以掛斷電話了。感謝您的參與。