TechPrecision Corporation

Ladies and gentlemen, hello and welcome. Thank you for joining us for today's Tech Precision Fourth Quarter 2020 Earnings Call and Webcast. All participants are in a listen-only mode, but instructions on how to share a question will be provided following today's prepared remarks. This session is being recorded. And now for opening remarks and introductions, we will go live to Managing Partner at Hayden IR, Mr. Brett Moss. Welcome, Brett.

Thank you. On the call today is Alex Shen, Chief Executive Officer, and Tom Sammons, Chief Financial Officer. 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 by management may make additional forward-looking statements in response to your questions. Therefore, the company claims the protection of the safe harbor and 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. In addition, projections as to the company's future performance represents management's estimates as of today, June 11, 2020. TechPrecision assumes no obligation to revise or update these forward-looking statements. With that out of the way, I'd like to turn the call over to Alex Chen, Chief Executive Officer, to provide open remarks. Alex?

Brett, thank you. Good day to everyone, and thank you for joining us. Net sales improved in the fourth quarter to 4.9 million, compared to 4.7 million in the same quarter a year ago, resulting in total net sales in fiscal year 2020 of 16 million, down from 16.7 million in fiscal year 2019. Gross margins also improved in the fourth quarter to 26.4%, higher than gross margins realized in the prior three quarters of fiscal 2020. However, our fourth quarter results were negatively impacted by a $495,000 settlement related to a civil action brought by former employees for past wages claimed under a paid time off program. We agreed to settle the claims to avoid the expense and uncertainty of future litigation. The company will be released from all claims raised in this litigation once the court approves the settlement. As a result, our fourth quarter net income was $48,000 or less than one cent per share. Our full year fiscal 2020 results were negatively impacted by learning curve-related cost overruns on a limited number of new projects, which added $1 million to our loss provision. These new projects are an opportunity to demonstrate technical excellence and custom know-how of complex fabrication and custom know-how of complex machining. Furthermore, these specific projects represent an entry point into new business prospects as the highly complex nature of these projects and extended time period of performance spanning multiple fiscal years provide a showcase opportunity on Raynor's production floor. A number of these units have now been completed. We expect improved margins going forward as the remaining of these projects approach completion and their costs stabilize, and other new projects come online during fiscal year 2021. We reported a net loss of $342,000 for the full fiscal year 2020, compared to net income of $1.1 million in the prior year. The company's sales order backlog was $16.8 million on March 31, 2020, compared to $12.6 million in the prior year, as approximately $20.1 million of additional orders were booked over the full year in fiscal 2020. We continue to replenish backlog. We believe this will provide for steady revenues and profitable margins in fiscal 2021. Overall, fiscal year 2020 was a great year of positioning the company for future growth. Securing new orders characterized by part numbers that are new to the company. Clearly demonstrating customer confidence in our ability to execute on our core business which is complex fabrication and complex machining. I will address the impact of COVID-19 on our business and customers following a brief review of our fiscal 2020 financial results with Tom Sammons, our CFO. Tom?