What percentage of Stadco's business is currently operating under profitability impingement?

Management stated it's definitely less than 50%, but couldn't provide an exact percentage due to changing mix. They emphasized that new orders have much more rigor in pricing and risk mitigation, contrasting with legacy contracts. “Now? After we got done through scouring everything, I think it's -- well, it's definitely less than 50%. I don't know that I can put a percentage number on there because the mix tends to change quarter-to-quarter.”

Does substandard customer-furnished material contribute to problems at Stadco?

Management confirmed that substandard customer-furnished material, such as castings with unexpected porosity, definitely contributes to problems by interrupting manufacturing, increasing costs, and reducing efficiency. They are addressing these issues with customers. “That definitely is part of the problem, yes. Absolutely. That -- not by itself is the problem, but that contributes to problems because it interrupts our manufacturing, the plan doesn't go accordingly.”

Is the company seeing new business opportunities from existing and new customers due to improved performance?

Management confirmed they are seeing new quoting opportunities from both current, confident customers and new customers in the air and submarine defense sectors. They are actively seeking more business and using new awards to fill manufacturing gaps. “Because we are performing successfully with the contracts that we have and by and large, delivering on-time quality components, that confidence level translates not only into more POs on stuff that we have repeated in the past that we're still competing for every time. But new quotes are hitting us from 2 ways.”

TPCS

TechPrecision (TPCS) Q1 FY27 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q1 FY27)· Industrials· Aug 13, 2026

Source: earnings call transcript

Executive summary

TechPrecision Q1 FY27 — Strong Revenue Growth and Backlog Expansion

TechPrecision delivered a strong Q1 FY27, marked by significant revenue growth across both segments and a robust backlog, primarily driven by defense sector demand. The company is actively managing operational efficiencies at Stadco to improve profitability on legacy contracts while securing new, more rigorously priced business. Management expressed confidence in continued growth and profitability, supported by ongoing customer partnerships and new quoting opportunities.

Highlights

Consolidated revenue increased by 23% to $9.1 million in Q1 FY27 compared to the prior year.
Consolidated gross profit rose 36% to $1.4 million, driven by higher revenue and improved gross margin.
Total funded backlog stands at $52 million, with an additional $22 million in unfunded purchase orders.
Ranor segment revenue grew 27% to $5.5 million, while Stadco revenue increased 22% to $4.1 million.
Net cash flow from operating and investment activities totaled $1.9 million for the quarter.

Concerns

Net loss was $153,000, or $0.02 per share, for the first quarter.
Stadco continues to have older contracts that are a drag on profitability, though progress is being made.
Substandard customer-furnished material contributes to manufacturing interruptions, increasing costs and reducing efficiency.

Guidance & targets

Category	Target	Timeline	Confidence
Fiscal Year 2027 Performance	On track to meeting guidance high materiality	FY27	High
Stadco Profitability Trend	Build and sustain a trend to get into the black medium materiality	Future quarters	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Ranor Revenue increased due to favorable project mix. Gross profit was $1.6 million for the quarter.	$5.5 million	27%	—	$1.6 million gross profit
Stadco Revenue increased as the company executed on its strategy to improve customer project mix and gross margin expansion. Gross profit increased by 65% year-over-year.	$4.1 million	22%	—	$300,000 gross profit

TPCS operating KPIs by quarter

TPCS operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Mar 2026 Q4 FY26	This call Jun 2026 Q1 FY27	Change vs prior quarter
Backlog	$52M Both subsidiaries are continuing to experience meaningful new capture of business awards from these same customers, adding to our strong $52 million backlog. Source: earnings call transcript	$52M With strong customer confidence, both subsidiaries continue to experience meaningful new capture of business awards from these same customers, adding to our strong $52 million backlog. Source: earnings call transcript	0%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Funded Backlog $52 million Q1 FY27

Expected to be delivered over the next 1 to 3 fiscal years with gross margin expansion.

Unfunded Purchase Orders approximately $22 million Q1 FY27

Additional to the funded backlog.

Capital programs

Ranor Equipment Procurement and Installation underway more than $24 million

Funding: Grants from U.S. Navy submarine programs-related customers

Benefit:Reliable, robust, and resilient manufacturing capacity dedicated to submarine programs

This sustained cadence of new equipment procurement, delivery and installation is enabling and will continue to enable a reliable, robust and resilient manufacturing capacity dedicated to submarine programs at Ranor. This commitment represents more than 50% of TechPrecision's market cap of $48 million.

Risks & headwinds

Unprofitable legacy contracts at Stadco Ongoing, being addressed as contracts roll off.

Definitely less than 50% of Stadco's business, but no specific percentage given.

Mitigation:Implementing more rigorous quoting processes for new contracts, actively submitting price adjustment requests for warranted cases on existing contracts, and improving estimate-to-complete processes.

Substandard customer-furnished material Ongoing

Causes manufacturing interruptions, increases costs, and reduces efficiency.

Mitigation:Addressing each instance with individual customers to resolve defects and minimize impact.

What to watch in Q2 FY27

Stadco profitability improvement

Next quarter

Current Still has unprofitable legacy contracts, but progress is being made.

Target Fewer parts with losses, closer to breakeven or profitable.

Why it matters

Stadco's profitability is key to overall company performance and achieving sustained positive net income.

As we correct the contracts that are the legacy and the new ones really have a lot more rigor in them built in from the very beginning. I'm not trying to avoid answering your question on percentage. It's just hard to pinpoint a percent. I think it's more characterized by the new contracts, they're getting a lot of scrutiny before the pricing submitted. And even after the pricing submitted, there are things that we put in place to mitigate our risk.

Find out whether TPCS delivers this. Inve re-checks your case every morning.

Q&A highlights

Has progress been made on turning unprofitable Stadco contracts into breakeven or profitable ones?

Management confirmed significant progress across multiple programs at Stadco. They are actively reviewing manufacturing costs and submitting price adjustment requests to customers, which have been resolved in their favor. New contracts incorporate more rigorous quoting and risk mitigation processes.

“We have made great progress. It's good to be able to say this with some facts behind us. Yes. I'm not going to be able to pinpoint the specific programs, but it's not just one program, Ross. It's across the board.”

asked by Ross Taylor · answered by Alexander Shen

2 min read 5 chapters

Detailed narrative

Operational Execution and Efficiency

TechPrecision demonstrated strong tactical execution in Q1 FY27, focusing on aggressive daily cash management, expense control, and efficient handling of capital expenditures, customer advances, and invoicing. This approach has been critical in mitigating risk and continuously re-securing strategic customer confidence at both Ranor and Stadco. The company is also implementing robust estimate-to-complete processes to avoid surprises and address issues earlier, particularly on first articles.

Defense Sector Focus and Growth

The company's primary focus remains on the defense sector, with significant contributions from naval submarine manufacturing via Ranor and military aircraft manufacturing via Stadco. Strong customer confidence, evidenced by on-time delivery of quality components, has led to meaningful new business awards.

The company is actively pursuing new quoting opportunities with both existing and new customers in these critical defense sectors, aiming to improve throughput and fill manufacturing gaps.

Stadco Profitability Improvement Initiatives

Management reported significant progress in addressing unprofitable older contracts at Stadco. Through a rigorous quoting process and closer collaboration with customers, the company is submitting price adjustment requests for warranted cases, which have resulted in favorable resolutions. The goal is to reduce the number of loss-making parts as older contracts roll off and are replaced by newer, more rigorously priced agreements, ultimately driving Stadco towards sustained profitability.

Impact of Customer-Furnished Material

A challenge identified is the receipt of substandard customer-furnished material, such as castings with unexpected porosity. This issue interrupts manufacturing processes, increases costs, and reduces efficiency. TechPrecision is actively addressing these quality concerns with individual customers to mitigate their impact on production and ensure smoother operations.

Strategic Capital Deployment at Ranor

Ranor continues to execute on installing new equipment, funded by over $24 million in grants from U.S. Navy submarine programs-related customers. This sustained investment in new equipment procurement, delivery, and installation is enhancing and will continue to ensure a reliable, robust, and resilient manufacturing capacity dedicated to submarine programs. This grant funding represents more than 50% of TechPrecision's market capitalization.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.