Good day ladies and gentlemen and thank you for standing by. Welcome to the TechPrecision Corporation’s First Quarter Fiscal 2014 Earnings Conference Call. (Operator Instructions) I will now like to turn the conference over to our host, Mr. Brett Maas of Hayden IR. Please go ahead sir.

Thank you. On the call with me today are Leonard Anthony, Chairman of the Board of Directors and Principal Executive Officer; Rich Fitzgerald, Chief Financial Officer; Bob Francis, President and General Manager Ranor division of TechPrecision. I would like to mention this call is being simulcast on the website at www.techprecision.com. Before we begin, I would 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 risk and uncertainties in the company's financial filings with the SEC. In addition, projections as to the company's future performance represents management's estimate of today, September 16, 2013. TechPrecision assumes no obligation to revise or update these forward-looking statements. With that out of the way, I would like to turn the call over Leonard Anthony, Chairman of the Board of Directors and Principal Executive Officer, to provide opening remarks. Mr. Anthony?

Thanks Brett and good day to everyone and thank you for joining us. This is our second conference call in a matter of weeks and there haven’t been any significant changes in our outlook, so I will just provide you today with a brief update as to our financial and operational activities since the last call and turn the call over to Bob Francis for an update on certain commercial activities and then Rich Fitzgerald will follow with a brief overview of our Q1 fiscal 2014 financial results. I do want to mention that with the filing of this report on 10-Q this week, we will up-to-date with all of our fillings and back on track and with all SEC requirements and our goal clearly in the future is to file all 10-Ks and 10-Qs and other SEC reports on a timely basis. We continue to execute the business plan we developed earlier in our first fiscal quarter, it has the immediate goal of stabilizing our business and realigning our cost structure so that we can return to profitability even at the current revenue levels. We are now focused on building our backlog with production orders from our key customers and we are continuing to see signs of progress in that regard. As I mentioned in our previous call at March 31, 2013 our backlog was 16.4 million and then at June 30 it was up to 19.4. Again, our mix of customers are now much more diversified than any time in the company’s recent history and we continue to focus on increasing our backlog of profitable work during the September quarter and beyond. While our mix of customers is now much more diversified, we are focusing on three verticals that we rely heavily on the competitive differentiators we possess…

Thanks Leon and good afternoon. Before I review our pipeline of Ranor's targeted verticals, I will discuss the contract loss we experienced in the first quarter. We are re-introducing the first units of [Navy Turbine bases] [ph] for a customer we have recently won back to Ranor. These [Turbine bases] [ph] are a part of a long term agreement through 2017 that could yield $2 million and more of a peak production [inaudible] on an annual basis. We have not met our estimated times in the first [inaudible] units due to issues with some very dated drawings and some operational execution issues. However, these [turbine bases] [ph] are exactly the type of product we should be making as they flow through virtually every Ranor manufacturing area. We will continue to work these and drive them to be profitable product in the future. Let me just briefly talk about the three targeted verticals he mentioned earlier. Mevion which we placed under precision industrial vertical umbrella has 11 systems currently under development with customers in the U.S. As you are aware in January 2013, we announced a five year agreement with Mevion to exclusively produce precision components for its proton beam radio therapy system. During the year ended March 31, 2013, Mevion became our largest customer and accounted for 7.7 million in net sales. In the first quarter of fiscal ’14, we generated 169,000 in sales volume with Mevion that compares to 846,000 in the year ago quarter. This sales reduction was directly related to [inaudible] Mevion has had and turning over their first system to the second cancer center in Missouri. On our last call I stated that I expected that turnover to happen any day. Unfortunately, this has not occurred yet but I still expect it imminently. Once this turnover…

Thank you, Bob. For the three months period ended June 30, 2013 revenue was 7.1 million, which compares with 7.1 the previous year Q1. Gross profit for the quarter ended June 30, 2013 was approximately 0.4 million or 6% of sales compared to gross profit of 1.1 million or 15% of sales in the same first quarter a year ago. Gross margin in any reporting period is impacted by the mix of services we provide on projects completed and progressed within that period. Accordingly, there can be variability due to the project mix when comparing period-over-period or year-over-year margin results. During the quarter ended June 30, 2013, the Company recorded contract losses of 0.8 million compared with 0.1 million of contract losses recorded in Q1 of the prior year. The majority of the Q1 fiscal 2014 contract losses relate to customer orders that were initiated during Q1 and that are expected to complete and shift during Q2 and Q3 of the current fiscal year. Turning to expenses; Selling, general and administrative expenses for the first quarter were 1.8 million, which compares with 2 million of SG&A incurred in the first quarter of fiscal 2013 the prior year. SG&A cost for the quarter were 0.2 million lower due to lower compensation cost and reduced outside services and advisory fees for the same period a year ago when compared to same period a year ago. The company is reporting a net loss for the quarter of 1.4 million or $0.7 per share basis and fully diluted, and this is based upon 20 million shares basic and fully diluted outstanding for the first quarter of this year. This compares to a net loss of 0.7 million or $0.4 a share basic and fully diluted last year’s Q1. Last year’s per share metrics were…

Thanks Rich. I wanted to conclude our prepared remarks with just a bit more information about our business outlook. We’re still in negotiation with our bank regards to our credit facility in such review of that items remains open. Our ongoing cost reduction efforts to better aligned cost for current revenues are positioning as to return to profitability during fiscal 2014 and positioning us to return to historically targeted margin levels of some 30% and that should occur over the longer term. With that summary I’d like to open the call up for Q&A.

(Operator Instructions). And our first question comes from the line of Walter Schenker with [HAZ] [ph] Capital Advisors.

Although, obviously he is not here to defend himself; I thought at least over the last couple of years a very significant priority is we don’t take on business that we know is going to lose money or immediately losses money that we price products and take on business to make money. I still would like some more clarification on how the company got itself immediately losing, in maybe too short a timeframe, $800,000 expected on a contract which if we’re expecting them to do about 2 million a year isn’t that large a contract because that was something I thought we were trying to put - everyone tries to put behind us.

I’ll take some of that and I’ll ask Bob Francis to comment as well, as he started out by saying, there is a person here who is not able to defend himself, that’s correct, but as you can see by the numbers there is kind of a substantial amount of money that’s been lost on prior contracts in contract filling process and as Rich described in case of this current situation some of – the size of the loss is really something that occurred because of our somewhat delayed 1Q reporting and our need to look back at the size of the contract loss. Bob accepted to describe to you what happened on that specific situation and I would say that the kind of loss that’s been realized so far is, is a loss that we recorded because that was the appropriate thing to do however I’d also say that we’re kind of considering our position in the contract and whether or not there should be some further discussions with our customer, that something has hasn’t been resolved as of yet. But let me turn it over to Bob kind of the question as to where do we stand with regard to contracts that we’ve got in our backlog that may have a loss. Bob, could you respond to that?

Again, I talked mostly about the [turbine bases] [ph] earlier which is a relatively new contract. We have gone through, I’ll say 95% of our engineering on that and the engineering time was approximately 60% of the loss that we experienced and as I said the drawings that we were given were much more dated than we had anticipated and we did have some operational execution issues which we’re in the process of correcting right now. It certainly is not our intent and we will continue to be looking at our quoting process but it’s not our intent to enter into any loss contract right out of the chute. And as Len mentioned, we are still looking at - and we’ll continue to look at what potential remediation there is with the customer over the differences in what we saw once we got into the full engineering package.

And the final thing I’d like to add to that is that while we have great confidence in Bob and how he is improving operations at Ranor, we’ve also put in place some controls relative to booking of contract so that anything that might be considered a material contract has to come through both myself, to the Chief Financial Officer as well as one of our Board members who is very familiar with the manufacturing operations at Ranor.

And just secondly, and I’ll get off, Mevion obviously is you don’t control the delay in getting the unit and bonds up and running, it is obviously ground to the very low number. Do you have some sense as to once it is turned over given the number of units that they have in backlog and or contracted for how quickly that flows down to you.

A general answer and then I’ll let Bob respond as well. The process is highly complicated and Mevion can’t themselves predict. They have provided to us a shipping schedule based on what they currently anticipate and they’ve indicated to us that that could get substantially revised upwards in terms of our production requirement should they be successful over - in the course of the next couple of months. But we don’t have quantification as to how big that might be, I think Bob can talk to you about how big total contract is and in essence what would the capacity be should they come to us.

And the backlog number therefore does not include roughly how much from Mevion?

Our backlog is south of 5 million from them right now and it would be substantially larger if we were operating aggressively under the long term agreement we entered with them back in January of this year, calendar year. They’ve got the brakes on, not the accelerator right now; we look forward to when they change that.

And our next question comes from the line of Ross Taylor with Somerset Capital. Please go ahead.

Walter touched on my first couple of questions but I want to get to a related question to the first which is the cash flow; obviously you burned a reasonable amount of cash in the last quarter and curious on what your outlook for cash flow is over the course of the year? And should we see some of that first quarter burn come back? Somerset Capital: Walter touched on my first couple of questions but I want to get to a related question to the first which is the cash flow; obviously you burned a reasonable amount of cash in the last quarter and curious on what your outlook for cash flow is over the course of the year? And should we see some of that first quarter burn come back?

Generally speaking we expect to get into the cash flow positive territory in the near future and stay there to the balance of the year. I can only get too frustrated about our forecast because as we have talked in the past the numbers move around pretty significantly but clearly based on the cost reduction efforts and the current backlog we are operating under we can see how we will become cash flow positive in not too distant future and stay there.

Yes Ross and I general rule frequently the orders we take at Ranor and the way we would choose to take orders for China as well would be the convention where we get a third upfront where we purchase and procure or receive materials through their customer supply than we usually get it done at a midpoint milestone and then the final at the end. So, even on a small cash balance we have been hovering around $2 million to $3 million in cash most of the last 24 months so our orders when we take them and we manage them to the appropriate margin our cash flow accretive and they tend to be self funding from a working capital perspective that is certainly our goal. And that is what everyone is charged to negotiate to on the sales and marketing customer relation team.

Okay. So we should treat this current quarter as just kind of a collection of onetime aberrations and not see it going forward? Somerset Capital: Okay. So we should treat this current quarter as just kind of a collection of onetime aberrations and not see it going forward?

Ross as we try to guide people our business can be lumpy and EBIT versus cash can be somewhat sequenced in time for example some of these lost contracts while we have got the losses in our book and the losses in our cash we have got billing events that lay ahead of us upon delivery of these that are accretive to cash. As we sit here today so I get it it’s going to cut off on the contracts it’s to predict trends and when we try to protect our cut off in any quarter yes we committed to our project until. So it’s not going to be my thought.

And what seems to be the hang up on getting (refined) I mean this isn’t about money I know that perhaps that you could probably raise it by making five phone calls among your major shareholders and get up while they pay off your bank debt. So I am curious on why you continue to kind of struggle underneath this inability to get the current generation of amendments through? Somerset Capital: And what seems to be the hang up on getting (refined) I mean this isn’t about money I know that perhaps that you could probably raise it by making five phone calls among your major shareholders and get up while they pay off your bank debt. So I am curious on why you continue to kind of struggle underneath this inability to get the current generation of amendments through?

Yes would not necessarily characterize the situation as one in which we are struggling. But rather one in which we are trying to ensure that we have the right outlook for the company at the time we go to procure the capital and as you can tell there some things that are moving around with regard to Mevion et cetera. And frankly I would rather be hearing from a position of strength relative to the backlog than from a position of things are as they have been and we are not making a lot of progress. So from my perspective it has been more a matter of trying to clean up the sludge that has been in the process; get the year-end 10K I will get this Quarter finished clean up a number of things with regard to the numbers. And then have a much clearer picture for any third party capital provider to step into this situation and hopefully be in a position where there is some more optimism for anyone looking at this based on the backlog.

I would not characterize it like we are point out struggling. There has been a period frankly where we were in significant discussions with sovereign attempting to put in place deep covenant modifications on and on and on, and finally reached a conclusion that that was just not going to be possible with them. But we and they are working together at this point in time and I have said in my prepared remarks we still probably be some sort of arrangement we are able to put in place with them in the short run hoping not too far from that would be then a replacement financing. But I think we need to examine all of our options carefully and I agree with you as we point out we probably could make a few phone calls and may have already done so and we could raise the money necessary. But we have a view as t what the appropriate financing structure is for this company and where we think we can take that to ensure that we have the lowest cost financing and therefore provide shareholders the best returns going forward.

On the matter of the forum we also need to be current in all our SEC filings and disclosures so that we can go out and pursue that aggressively so clearing this quarter and getting back on to current filings that just allows us to talk freely and openly in the pursuit of refinancing.

So basically what I hear you saying to a degree is that you are fairly confident that you have some backlog building events in over the next few months and that you would rather wait to have those backlog building events occur and then go to get the refinancing because your belief is that with those events in the backlog you are going to get a better rate than you are right now? Somerset Capital: So basically what I hear you saying to a degree is that you are fairly confident that you have some backlog building events in over the next few months and that you would rather wait to have those backlog building events occur and then go to get the refinancing because your belief is that with those events in the backlog you are going to get a better rate than you are right now?

We think it will be a more competitive situation or basically better.

Pricing in better terms. Okay. Somerset Capital: Pricing in better terms. Okay.

And our final question comes from the line of [indiscernible] with American Capital Partners. Please go ahead.

Well I am heartened to hear that you guys feel pretty confident about a refinance. But I am really kind of disturbed to find out that material contracts were not being reviewed by senior level people to see if these were things that are reliable and made sense. I mean that is a pretty [indiscernible]

I didn’t say they weren’t being reviewed by senior people in the past.

Well what did you say?

There has been a change of who those people are; there is senior people reviewing.

So if people were who were reviewing that, where are they now?

Well we have made some public disclosures about that.

Okay, such as combinations.

Shareholders have taken it on the 10 big times in this stock over the last couple of years. And they shouldn’t be the only ones to suffer pain. Pain should be spread. If somebody in the corporate side screwed up, they should see all pain themselves. Okay, it shouldn’t be reserved just for shareholders.

It has not been reserved just for shareholders and there are number of people who are not here today who were in the organization all the way from the top of the organization throughout all levels and that process will continue.

Okay, so where was the board in this process?

Actively engaged.

Well, I know you’re new to the Company so I’m not holding you accountable, but there was a board in effect or should have been on board several years ago when lot of these things began to occur. So, okay.

All we can do at this point is correct the issues we see in front of us, get the cost under control, and pursue aggressively those customers and market in specific orders that will fit our operational profile and get us back to cash positive and to profitability. And as we state on this call we’re pretty optimistic about the longer term opportunities for the Company provided we can strain out some of these problems quickly and we’re highly confident we’ve got the problem [indiscernible].

I hear you and that’s great. The other thing I want to add to that those who helped create some of these problems, we should really evaluate whether they need to be part of the Company or not, going forward.

We hope that our home management team understands that everyone is at risk.

Okay, well, I look forward to some better days and some report.

Thank you, and we do have additional question from line of Dan Capozzo with Invicta. Please go head.

Thanks for the question. Do you ever book to bill for the third quarter?

For the quarter ended June?

Yes.

Yes, it’s slightly hard, it was about 1.4. We don’t disclose that specifically but its Northrop Grumman in the first quarter.

And could you just give me kind of rough sense of what made up the most bookings of this quarter, what division?

It’s primarily the (inductions) were served in the defense factor and a little bit in the precision industrial.

I am sorry maybe we didn’t hear the whole question, were you asking at what division?

Thank you and our next question comes from the line of Eric Weinstein with Chancellor Capital. Please go ahead.

Thanks, two questions. First, how much did you report in the quarter for restructuring severance charges and presumably have hit SG&A?

It was less than 70K, Eric.

I guess on the September quarter, the current quarter we’re almost clear. Do we know if there are material contract losses on new business that was taken during this quarter?

There should not be, and Bob has done a review but part of the exercise of closing Q1 was we had to take all these contract losses and booked them as of June 30 as the contracts were open and you could see them in the loss position or approaching such. So at this point Bob and I let him comment as he just completed the (CNS team did a full scrub) of the backlog of that Board for the Board’s request. And we don’t believe anything is working out there that would cause us further contract losses of this size or magnitude. Bob do you want to say anything?

Yes, when we process it, first of all we’ve conducted that as, I’ll say, secondary process with the [indiscernible] basis contract and we have pretty process in place where we will be doing on weekly basis to ensure we stay in front of anything does starts to get closer, if you will, to this cost point so at this at this point now we’re now getting more.

The recognition of the inner details and it has accelerated into first quarter, I guess there was a comment made on the last conference call that by the third quarter the possibility could be expected down looks like it’s sometime during the fiscal year, can somebody comment on what the outlook looks like for possibility maybe by the third quarter into qualify that as I don’t that’s EPS positive or a cash flow positive or EBITDA positive?

Yes, Eric I’m not sure we said we’d be profitable on the EPS basis in the third quarter during the last call but I trust you on that. I say that there is the possibility for that in the third quarter but once we get as Rich repeatedly states this is a little bit lumpy. So it’s real hard to forecast and somewhat customer dependent, so I said we remain optimistic that the cost reductions are all going to flow through in a timely basis and that’s going to have a clear effect in Q3 and to the extent that we meet our kind of plan shipments etc that if we should be in a position of had a minimum being cash flow positive and hopefully bottom line profitable.

Okay, when you [indiscernible] suggest we would be EPS positive in the quarter, I guess the question just how do you define when you say profitable. Do you generally mean EPS positive or some other metric?

I think we all are agreed that its EPS positive is what we’re talking about.

And last one for me with respect to getting the financing done and hitting certain milestones, not hitting certain milestones, there are things in your control and things that aren't in your control. Hopefully some things on the defense side come through, the big steps looks like it's the little please out, maybe John hopefully comes through sooner rather than later; again the bit out of your control. When you look at the your business development function and the sales and marketing function how have you organized the people, I don't know if you've changed your thing or not it's a sort of balance getting things over to (neutral) particularly as we go through this [indiscernible] challenge versus the bigger stuff, trying to manage over the long term for the long term for the long term growth of the company.

Well I think it's a great question first of all because while we have been focused here in the short term on trying to begin to deal with the cost issues, the ballooning cost structure that we had to deal with and clearing up some of the out reporting and other matters, there probably could be more focus on business development and selling. And what we have done so far is move the business development function into the Ranor operation. We have also relocated certain folks into the Ranor operation that have prior selling skills and prior operating skills and Bob has recently or not too long ago brought in someone to handle sales for that division. So at this point ask Bob to just speak a little more to that. But I would say generally speaking this is an area that we intend to focus a lot more on and ensure that we've got the right people and the right places to not only deal with the long term business development issues but deal with the short term sales requirements . So, maybe you'd like to comment as well, Bob.

I’ll just piggyback on your comment that we did bring in a sales professional as you will, several months back and he has been aggressively pursuing not only our existing customers but really new customers to bring on board. We think there's a lot of opportunity out there that previously was untapped you know the company was really in just a receive mode but waiting for opportunities to present themselves and we are now becoming much more aggressive in going out and creating, and receiving and creating those opportunities. We also have a Vice President of business development, will impact they also report to me and he is very aligned with our sales professional here and they work very well together. So I think we have the proper focus and we will continue to again seek out and create opportunities for the future.

And then just one last one; could you talk, could you put a little bit more color on your comments around the [indiscernible]. It sort of seemed like you were, have been considering keeping it around for a potential large Chinese customer, the existing customer. It seems like you've had additional thoughts about it in terms of its place within the company longer term. Have you, made further negotiations, headway negotiations with any customers, or have new other opportunities popped up where you had the greater vision for how it fits longer term?

Well, you know, how it fits long term is a toss-up no matter what happens. But yes there are in front of us potential opportunities that would be great for China and possibly great for Ranor as well. We're in obviously kind of at the end of the chain of that whole process of who might be involved, the ultimate customer who's in the middle and what work do we do. We're currently pretty optimistic that there may be some opportunity for us in China, which would help with the overall, as we talked before might help with the overall refinancing the refinancing structure, liquidity management etc. and get us better, headed in a slightly better direction. But again that's not a matter in our control so at the same time as I say that we also have in front of us kind of a decision point on whether or not we shutdown and exit China. So my bottom line is to the extent that we can in the relative near term get some reasonable backlog in China, a product that we’ve made profitably before, that we would take on those orders and continue to reevaluate the long term strategic importance of China. In my prepared remarks I've also somewhat suggested that as we go forward, China may be used more as a part of our procurement function and one way to outsource to low cost countries. We may look at other low cost procurement strategies into other countries as well. The team that set up the China operation did a really good job in getting it set up, they did an outstanding job in terms of managing the projects they had. Unfortunately when I got involved in this as CEO we're sitting here with zero backlog in China and several people including expats over there. That's just not a situation that you can tell by the company's results that that's not something we can endure. So we’ve taken steps to reduce the cost of China, prepared for an exit should that be the appropriate strategy. But on the other hand we're opportunistic into the extent as I said, something shows up in a short term of a material nature where we're pretty much assured of good cash flow and reasonable profitability that would be something that would keep the China operation in place for some time. That's a long answer to your question, I apologize.

I appreciate it, fair enough.

Thank you, and there are no additional questions at this time please continue with any closing remarks.

Thank you all for participating on the call today, thank you for being investors and we're going to continue to work diligently to improve the company's position both from a cash flow perspective as well to an earnings perspective and look forward to keeping you up to date and talking to you at the latest with our next quarterly report. Thank you.

And ladies and gentlemen that does conclude our conference for today, thank you for your participation, you may now disconnect.