Techprecision (NASDAQ:TPCS) reported lower consolidated revenue and a wider loss for its fiscal 2026 third quarter, as management pointed to multiple headwinds at its Stadco subsidiary that more than offset steady performance at Ranor.
Quarter results driven by Stadco shortfall
Chief Executive Officer Alex Shen said Stadco revenue decreased and operating losses increased due to four factors: delays in receiving customer-furnished materials, an unfavorable project mix, higher provisions for projected contract losses, and some equipment downtime. Stadco posted third-quarter revenue of $2.9 million and an operating loss of $1.2 million. Shen said Stadco’s losses were higher by $0.6 million compared to the same period a year earlier.
Ranor, by contrast, generated fiscal 2026 third-quarter revenue of $4.4 million with operating profit of $1.5 million, which management said was in line with the prior year’s third-quarter results.
Margins, expenses, and net loss
Chief Financial Officer Phil Podgorski said consolidated gross profit declined to $400,000 due to the lower revenue and higher loss provisions at Stadco. He added that consolidated SG&A expense rose 3% to $1.7 million, as increased stock-based compensation more than offset reduced outside professional services costs.
Podgorski also noted that interest expense was lower in the quarter, reflecting reduced interest costs on term loans and revolver borrowings. Net loss for the third quarter was $1.5 million, or $0.15 per share on a basic and fully diluted basis.
Nine-month trends and cash management
For the nine months ended December 31, 2025, TechPrecision reported consolidated revenue of $23.6 million, down 4% year over year. Podgorski said consolidated cost of revenue fell to $19.7 million, $2.6 million lower than the prior-year period, which he attributed to a favorable customer mix and productivity gains at both Ranor and Stadco. He said gross profit increased by $1.6 million, or seven percentage points, due to those factors.
SG&A decreased 1% over the nine-month period, as lower office costs more than offset higher corporate unallocated expenses. Podgorski said the consolidated operating loss for the nine months ended December 31, 2025, was $9.9 million and “decreased year-over-year by 65% or $1.6 million,” citing improved margin drop-through. Net loss for the nine-month period was $1.2 million, or $0.13 per share.
Management emphasized “aggressive daily cash management,” including tight control of expenses, capital expenditures, customer advances, progress billings, and final invoicing at shipment. Podgorski said net cash provided by operating and investing activities totaled $0.6 million for the nine months ended December 31, 2025, while net cash used in financing activities totaled $0.8 million, primarily for principal paydowns on the revolving loan and term loans.
Total debt was $6.7 million at December 31, 2025, compared with $7.4 million at March 31, 2025. The cash balance was $50,000 at December 31, 2025, down from $195,000 at March 31, 2025.
Backlog, Navy grant funding, and capacity investment at Ranor
Shen said Ranor was “very recently awarded a new grant of just over $3.2 million,” bringing total completely funded grant money to over $24 million from U.S. Navy submarine programs-related customers. He characterized that funding as supporting an ongoing cadence of equipment procurement, delivery, and installation intended to build “reliable, robust, and resilient manufacturing capacity” dedicated to submarine programs. Shen also said the over $24 million in funded grants represented more than 50% of TechPrecision’s stated market capitalization of $45.5 million.
Management said customer confidence remained high at both Stadco and Ranor, citing on-time delivery of quality components. Shen said delivery performance was leading to new quoting opportunities in air defense and submarine defense sectors with existing customers.
Shen said the company had a $46 million backlog that includes only the funded portions of customer purchase orders, and he said management expects to deliver that backlog over the next one to three fiscal years “with gross margin expansion.”
Stadco contract headwinds and customer discussions
During the Q&A, management addressed questions about unfavorable Stadco contracts and the timeline to move past loss-making work. Shen said the company and finance team were working to identify and forecast remaining projected losses and to capture them through loss reserves. Podgorski described specific instances where the company believed certain legacy items would be accepted, but customers required additional rework, which increased estimated hours under fixed-price contracts and was incorporated into loss provisions.
Shen said TechPrecision had found new business and was “filling the backlog with new business that is priced better,” adding that some new Stadco part numbers had already begun shipping. He also pointed to efforts with legacy customers, stating that Sikorsky, which he said represents over 50% of Stadco’s volume, was “playing ball” with the company on profitability.
Management did not provide a precise timeline for breaking out of the recent $7 million to $9 million quarterly revenue range, with Shen saying the quarter was “unexpectedly bad” due to customer decisions that surprised the company. He added he did not expect a similar surprise in the following quarter ending March 31, while also stating he hesitated to give more specific targets.
On contract terms and customer selection, Shen said the company cannot operate with “zero contractual protections” and indicated TechPrecision intends to strengthen protections on new contracts and to walk away from opportunities that are detrimental if customers are unwilling to cooperate. He also discussed a strategic focus on reducing one-time projects and increasing repeat part numbers tied to longer-running programs of record, which management said can improve scalability and execution over time.
About Techprecision (NASDAQ:TPCS)
TechPrecision, Inc (NASDAQ:TPCS) specializes in the design, engineering and manufacture of high-precision automated machinery and turnkey production solutions. The company’s core offerings include assembly, test and inspection equipment, servo-electric press systems and custom packaging machines tailored for industries with stringent quality and regulatory requirements. TechPrecision’s products support medical device, pharmaceutical, consumer goods and industrial applications, delivering end-to-end services from concept development and prototyping to full-scale production and after-market support.
Founded in 1987 and headquartered in Fredericksburg, Virginia, TechPrecision operates two primary manufacturing facilities: its U.S.
