Post on 09-Apr-2018
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Business Overview
LD Micro ConferenceDecember 9, 2010
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Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Any
statements set forth in this presentation that are not historical facts are forward-looking
statements that involve risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements, which may include, but are not
limited to, such factors as unanticipated changes in product demand, increased
competition, downturns in the economy, failure to comply with specific regulationspertaining to government projects, fluctuation of revenue due to the nature of project
lifecycles, and other information detailed from time to time in the Company filings and
future filings with the United States Securities and Exchange Commission. The forward-
looking statements contained in this presentation are made only of this date, and the
Company is under no obligation to revise or update these forward-looking statements.
Safe Harbor Statement
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Investment Highlights
One of the few large scale, precisionmanufacturing and fabrication companies inthe United States; high barriers to entry
Well-positioned to capitalize on growingalternative energy (solar and wind), nuclearenergy, defense, clean tech, aerospace andmedical equipment markets
60-80% of gross profit drops to EBITDA line $1.02/share in working capital at 9/30/2010
Strong management team executingattractive growth strategy; organic and
inorganic Predictable financial model with recurring
revenue
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TechPrecision Corporation (OTC BB: TPCS)
Corporate office location: Saucon Valley, PA
Umbrella organization established in February 2006 One of the few public companies in the space
New management, additional board members with deep industry experience
TechPrecision
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Ranor Inc. (TechPrecision subsidiary)
20+ years average staff tenure ISO 9001:2008 certified, ASME shop Large-scale projects with tight tolerance levels One of a few end-to-end solution providers; increasingly fewer manufacturers
capable of matching TPCS in its industries served
Ability to engineer requisite tooling and entire manufacturing process for eachrespective production program
One of few remaining N-stamp (nuclear) certified machining/fabrication companies inthe US
Quality certifications include NAVSEA S/T-9074 and MIL-Q/I/ST Fully integrated services create high barriers to entry
Ranor Subsidiary
ISO9001
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China Subsidiary
TechPrecision Corporation Creates Wholly OwnedChina-Based Subsidiary to Address Growing Demandfor Solar and Nuclear Energy Manufacturing in Asia
80% of poly silicon panels and many nuclear reactors arescheduled to be built in China
Key customers indicated interest in expanding business with
TechPrecision if we could support them locally in Asia We moved quickly to meet this demand by establishing:
Wuxi Critical Mechanical Components Co. Ltd.
US and some European customers still served by facility inMassachusetts
Manufacturing processes and IP developed and protected inUS (maintain strategic advantage)
Sensitive government and defense work
Wuxi, China
Westminster,MA
Wuxi Critical Mechanical Components Co., Ltd. (TechPrecision subsidiary)
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Markets We Serve
Alternative Energy
Medical
Nuclear
Defense
Aerospace
Commercial Industry
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Select Customers
Alternative
Energy
Nuclear Defense Aerospace Medical
(Electric Boat)
(Solar and Wind)
Commercial
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Nuclear Energy Business
Nuclear addressable marketsNew Construction:Advanced nuclear plant construction
required on a global basis
Outage:Existing nuclear power plants will require hundreds ofmillions of dollars in replacement equipment
Storage:new requirements for spent fuel and fuel transport
Significant capital expenditure cycle in the nuclearindustry over the next few years (Source: Nuclear EnergyInstitute)
$56B of debt guarantees from the US Government for newplant construction (up from $18B)
104 existing US plants = $25M/plant per yr. for $2.6B annually
Total procurement 104 plants = $13.29B annually
New nuclear plant 2010 = $9 - $14B/plant
One of few ASME N-stamp certified providers ofhigh-precision components to the nuclear industry
Allows for the design and construction of commercial nuclear
equipment, and nuclear storage and shipping equipment
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Alternative Energy Business
Alternative Energy addressable market (Source: CleanEdge, 2010) Wind and Solar = $99.6B annually in 2009
Growing to $231B in 2019
Manufactures a proprietary product for the solar industry Focused on multicrystalline wafer production Target expansions in mono-crystalline and CIGS markets
Expanding programs for high energy wind turbine Alternative Energy has strong long-term prospectsRising energy demand/prices
40% increase in electric demand by 2030
Increasing scarcity of traditional energy resourcesGrowing adoption of government incentives
10%+ efficientCIGS panel
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High-Potential Medical Device Business
Medical Device addressable market (Source: espicom, 2010) 2010 US market size = $94.9B Exclusive manufacturing and supply agreement to produce key components for a
revolutionary proton beam radiotherapy device to treat cancer
PBRT is favored in situations where risks to healthy neighboring tissues hasthe greatest potential risk to quality of life
Equal radiationdose
Conventional RadiationBeam
Majority ofRadiation dose
Proton Radiation Beam
No radiation dose
Limited radiation dose
= Radiation Beam= Cancer Tumor
Pediatric cancer
Prostate cancer
Head & neck cancer
Brain tumors
Ocular cancer
Lung cancer
Bone & spinal cancer
Liver cancer
Colon cancer
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Defense & Aerospace Business
Navy addressable market (Source: Congressional Budge Office Report & 111th CongressHouse Report 111-230)
Spending for new navy ships (313 ship fleet target) = $25B/year Shipbuilding and conversion appropriations: $13.1B in 2009
Shipbuilding and conversion budget request: $13.8B in 2010
Precision fabricated and machine components for multipledefense contractors Production subassemblies for nuclear submarines
Prototype components for use on the DDX destroyer Jet engine test equipment for large jet engine
manufacturers
Large- and small-scale fuel cell domes for commercialrocket booster cores
Key supply chain relationships with several large defensecontractors
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Revenues by Industry
Medical, 6.05%
Nuclear, 6.28%
Aerospace, 3.39%
Commercial/Other,
6.31%
Alternative Energy,
52.05%
Defense, 25.92%
Fiscal Year 2009 Fiscal Year 2010
Medical, 9.93%
Defense, 15.20%
Alternative Energy,
57.44%
Aerospace, 1.32%
Commercial Other,
9.40%
Shipbuilding, 5.46%
Nuclear, 1.26%
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Growth Strategy
Diversify platform and product mix for long-termsustainable growth
Target high-margin projects with more predictable coststructures
Focus on high-growth alternative energy, nuclear,defense, clean tech and medical industries
Deploy proactive BD/sales/marketing processes
Expand the direct sales and sales representative force
Expand business through global organic growth
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Relative Margin Contribution & Mix
Production engineering
Collaborative prototyping
Quality program
Robotic welding services
Non destructive examinationand inspection services
Highly adaptive non-unionworkforce14-18%
18-22%
23-26%
25-30%
30+%
TraditionalContractManufacturer
Bid-buyProject Work
SpecialtyPrototyping
Mix ofProduction &Project Work
Multiple Production
Programs Turn-keyservices
Supply ChainPosition
Tier 1- 2
Tier 1- 2
Tier 1- 3
Tier 3 - 4
Tier 4 - 5
Ancillary Services
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Income Statement
Consolidated Income Statement
($ in Millions)
IHFY 2011
(9/30/10)
FY2010 FY2009 FY2008 FY2007
Revenues 14.5 28.3 38.1 31.8 19.1
Gross Profit 4.9 6.1 12.1 8.3 3.5
Gross Margin 33.7% 21.5%** 31.8% 26.2% 18.6%
Operating Expenses 2.1 3.3 2.5 1.9 2.1
Operating Income 2.8 2.8 9.7 6.4 1.4
Operating Margin 19.0% 9.7%** 25.4% 20.1% 7.6%
Net Income 1.7 2.0 5.9 3.5 0.3
Net Margin 11.5% 7.2% 15.6% 11.1% 1.5%
Wtd. Avg. Basic Shares 14.2 14.2 13.6 10.9 10.0
EPS - Diluted $0.08 $0.10 $0.23 $0.12 $0.03
** The $8.9M inventory transfer to GT Solar in August 2009 includedraw material, shifting avg. gross margin lower for YTD FY 2010
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Balance Sheet Highlights
($ in Millions) Sept. 30, 2010 March 31, 2010
Cash 9.2 8.8
Current Assets 17.2 15.2
Total Assets 21.9 19.4
Current Liabilities 2.6 1.9
Total Liabilities 8.2 7.3
Total Stockholders Equity 13.8 12.1
Long-Term Debt Sept. 30, 2010
Term Note 1,428,571
Mortgage Loan
(obligation of WM Realty) 3,058,119
Capex/Capital Lease 1,887,044
Total Long-Term Debt 6,373,734
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Capitalization Structure as of 9/30/10
Share Type Number of Shares
Common Shares Outstanding: 14,283,346
Common Stock issuable upon conversion of series Apreferred stock at $0.218:
12,629,489
Shares issuable upon exercise of stock options or other
equity based incentives pursuant to the Companys 2006long-term incentive plan:
2,008,327
Total: 28,921,162
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Peer/Competitor Comparison
(TTM at 9/30/10 unless otherwisenoted)
TechPrecisionCorporation
OTC:BB: TPCS
Amtech Systems
Nasdaq: ASYS
GT Solar
Nasdaq: SOLR
Precision Castparts
NYSE:PCP
Revenue $24.45 M $120.02 M $732.69 M $5.78 B
Revenue/Share $1.72 $13.30 $5.05 $40.80
Gross Margin 24.9% 35.6% 29.9% 31.0%
Operating Margin 15.3% 13.8% 28.6% 24.72%
Net Income $2.52 M $9.56 M $129.3 M $944.80 M
Quarterly Revenue Growth (Y/Y) -44.6% 289.2% 120.1% 16.8%
Stock Price at 9/30/10 $0.87 $17.96 $8.37 $127.35
Market Cap at 9/30/10 $12.4 M $163.1M $1.26 B $18.16 B
EBITDA $4.13 M $18.23 M $216.65 M $1.59 B
EV/EBITDA 3.60x 6.82x 3.74x 12.32x
Price (11/26/2010): $1.24Market Capitalization (common & preferred): $35.8M
Wtd. Avg. Basic Shares as of 9/30/2010: 14.2M*
*As of 11/30/10 TechPrecision had 12.6 million shares of common stock reserved for issuance upon conversionof series A convertible preferred stock. There were 2.0 million shares issuable upon exercise of stock options or
other equity-based incentives pursuant to the Companys 2006 long-term incentive plan. Fully diluted share countat 11/30/2010 was 28.9 million.
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Management Team
James Molinaro CEO, TechPrecision Corporation Named CEO in July 2010
Over 26 years of global experience in solar, defense and semiconductor equipment
production Previously President and CEO of Akrion Systems
Served as VP of Sales, Service, and Marketing for Akrion
President for Submicron Systems and earlier served as its VP of Engineering
Richard Fitzgerald CFO, TechPrecision Corporation
CFO of TechPrecision since April 2009
Previously VP and CFO of Nucleonics and Director, Corporate Development at
Exelon and PECO Energy Company
Extensive experience in roll-ups, financing, integrating merged organizations
William N. Hogenauer - Director of Business Development Joined TechPrecision in November, 2009
Previously founded and was CEO of WebTCD
Began his career as a Sales Engineer at InterTest
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Investment Opportunity
C-suite and business development function have been revamped andsignificantly upgraded
Stock price of $1.24 at 11/26/10 and 10.3x P/E (ttm)
Backlog of $31M at 11/1/2010 provides forward visibility
Multiple embedded options to fuel a return to 2008/2009 sales and marginlevels, momentum evident in 1H FY 2011 Still River Systems: pending FDA clearance
GT Solar: return of the PV market
Nuclear renaissance: Rebuild and new build
Alternative energy/clean tech growth opportunities
Wuxi Critical Mechanical Components Co., Ltd. subsidiary opened Addresses growing demand for solar and nuclear energy manufacturing in Asia Significant revenue growth potential for Fiscal 2012 and beyond
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TechPrecision Corp.
Richard Fitzgerald, CFO
Bella Drive
Westminster, MA 01473
Tel: (610) 246-2116
Fitzgeraldr@techprecision.com
www.techprecision.com
Hayden IR
Brett Maas
Phone: 646-536-7331
Email: brett@haydenir.com
or
Cameron Donahue
Phone: 651-653-1854
Email: cameron@haydenir.com
Contact Information