And the reason why I ask is that I think participants on this call who are reading about the industry in general, have seen whether they be government grants or primes bringing capital for infrastructure builds into companies and competitors. I just thought I would ask because we are spending some money on CapEx, what the source of that funding is? Is it entirely self-funded by TechPrecision?
Alex Shen: I can tell you it is not entirely funded by TechPrecision.
Rob Straus: Okay, good. Then that means that we’re getting support from other entities. Switching over to Stadco. There’s a few questions that I have and Alex, some of them are really basic and you’ll, as always choose to answer what you want. When we acquired Stadco a little over 2 years ago, we thought of key personnel as those individuals holding the CEO, President position as well as the COO position. I was just curious, are the 2 individuals that were holding those positions when we acquired Stadco, are those 2 individuals still holding those seats and still at Stadco.
Alex Shen: I make it a policy of not talking about the individuals at the subsidiaries.
Rob Straus: Okay. I guess — so staying with Stadco, Stadco’s integration, I think we would say is behind where we thought it would be. and there’s some more integration to do. What kind of color or explanation can you give us to better understand the challenges that you’re facing with that subsidiary?
Alex Shen: Well, let me first characterize this thing properly. So Stadco is a turnaround, not so much an integration at all. It’s a turnaround. Okay? So let’s — I prefer to use that terminology, please, if you don’t mind.
Rob Straus: Sure.
Alex Shen: Okay. So being a turnaround, what we can see right now is we need more revenue strength from Stadco. That’s the key point. With more revenue strength, we can get over our hump. How to get there? Well, it’s a little bit complicated as far as the dams. The most important thing how we get there is back to customer confidence. We need to preserve the customer confidence by recapturing it every single day, moving forward every single week, every single month, every single quarter so that these customers of Stadco continue to give us purchase orders. that will reestablish our backlog that we ship out and grow the backlog. So I think we’re doing that. What we just need to do more is push that same confidence into moving out more revenue within each quarter.
We had some setbacks last — the first quarter of this fiscal year with our equipment problems. That is behind us. There are some certain things that Well, the machines aren’t breaking down, but that doesn’t — let’s say that everything is all fixed. There’s still ongoing daily maintenance problems, but that’s not really the key problem anymore. The problems that have occurred in the first quarter of this fiscal year, those are fixed. So that just shows the type of things that in the turnaround, what unforecasted unexpected things can happen. Did we expect that a number of pieces of equipment, a number of assets would have problems during the same quarter. No. But in the nature of a turnaround, those are the things that happen.
Rob Straus: When you answered earlier in this call about delivering against customer expectations and stating that 100% of your deliveries are on time and that you are winning awards or positive feedback from customers, was that commentary relevant for both Ranor and Stadco, or were you referring to only Ranor as it related to those specific comments?
Alex Shen: Our delivery meets the expectations of the customers for both subsidiaries.
Rob Straus: Okay, great. One of the areas that you seem to make good progress in is reducing costs at Stadco.
Alex Shen: That’s what we’re reporting this quarter.
Rob Straus: That’s right, which occurred during the quarter ending September. Could you just give us more color on where you saw opportunities and whether or not you see that as a completed process or an ongoing process?
Alex Shen: It’s always an ongoing process. I would like to remind all of our listeners that even though we track quarter-to-quarter as required by the SEC, really, our business spans more than one quarter and our manufacturing cycles and the cadences span much more than one year. So is it ongoing? Absolutely. And let’s bear in mind the business is lumpy. So going from quarter-to-quarter analysis is probably, in my opinion, shortsighted and doesn’t project the whole entire picture.
