SOURCE: IEC Electronics

IEC Electronics

February 12, 2016 08:15 ET

IEC Announces Fiscal First Quarter Revenue Growth and Improved Profitability

First Quarter Revenue Growth of 14.2%; Gross Profit Improvement to 17.7%; EPS Increase to $0.15

NEWARK, NY--(Marketwired - February 12, 2016) -  IEC Electronics Corp, (NYSE MKT: IEC) today announced results for the fiscal first quarter ended January 1, 2016.

For the first quarter of fiscal 2016, the Company recorded net sales of $32.9 million, an increase of 14.2% compared to net sales of $28.8 million during the first quarter of the last fiscal year. Gross profit margin for the first quarter grew to 17.7% compared to 12.0% in the same quarter last year. The improved gross profit was related to higher production volume, changes in customer mix and improved labor efficiencies. Selling and administrative expenses, excluding restatement and related expenses, increased to $4.0 million or 12.3% of sales as compared to $3.2 million or 11.3% of sales in the first quarter of fiscal 2015. Net income for the quarter was $1.5 million, or $0.15 per share, compared to a net loss of $0.8 million, or a loss of $0.08 per share, in the same prior year period.

Jeffrey T. Schlarbaum, President & CEO of IEC Electronics commented, "We're very pleased to have built on the momentum we've developed over the past few quarters, to deliver a strong start to fiscal 2016. Just over a year ago, our new management team established a focused strategy to turnaround our Company and since then we have steadily and consistently driven improved performance. During the first quarter, which represents our third full quarter under new leadership, IEC demonstrated solid revenue growth, enhanced profitability and our third consecutive quarter of gross margin improvement. 

"As a provider of mission critical and life-saving products, we see great opportunity for growth as we work with our customers for the successful execution of ongoing projects and as we introduce our capabilities to new audiences. We believe IEC's ability to provide comprehensive, specialized solutions to highly regulated end markets will enable us to realize continued revenue growth with sustained margin performance and profitability," Mr. Schlarbaum concluded. 

Conference Call:

IEC will host a conference call, today, Friday, February 12, 2016 at 10:00 a.m. Eastern Time, to discuss its financial results for the fiscal first quarter ended January 1, 2016.

The conference call may be accessed in the U.S. and Canada by dialing toll-free (877) 407-9210. International callers may access the call by dialing (201) 689-8049.

A replay of the teleconference will be available for 30 days after the call and may be accessed domestically by dialing (877) 660-6853 and international callers may dial (201) 612-7415. Callers must enter conference i.d. number 13629246.

To access the live webcast, log onto the IEC website at http://www.iec-electronics.com. The webcast can also be accessed at http://www.InvestorCalendar.com. An online replay will be available shortly after the call.

About IEC Electronics

IEC Electronics is a provider of electronic manufacturing services ("EMS") to advanced technology companies that produce life-saving and mission critical products for the medical, industrial, aerospace and defense sectors. The Company specializes in delivering technical solutions for the custom manufacture of complex full system assemblies by providing on-site analytical testing laboratories, custom design and test engineering services combined with a broad array of manufacturing services encompassing electronics, interconnect solutions, and precision metalworking. As a full service EMS provider, IEC holds all appropriate certifications for the market sectors it supports including ISO 9001:2008, AS9100C, ISO 13485, Nadcap and IPC QML. IEC Electronics is headquartered in Newark, NY and also has operations in Rochester, NY and Albuquerque, NM. Additional information about IEC can be found on its web site at www.iec-electronics.com.

Safe Harbor

This release contains certain statements that are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are made in reliance upon the protections provided by such Act for forward-looking statements. These forward-looking statements (such as when the Company describes what it "believes", "expects", or "anticipates" will occur, and other similar statements) include, but are not limited to, statements regarding future sales and operating results, future prospects, the capabilities and capacities of business operations, any financial or other guidance and all statements that are not based on historical fact, but rather reflect the Company's current expectations concerning future results and events. The ultimate correctness of these forward-looking statements is dependent upon a number of risks and events and is subject to uncertainties and other factors that may cause the Company's actual results, performance or achievements to be different from any future results, performance or achievements expressed or implied by these statements.

The following important factors could affect future results and events, causing those results and events to differ materially from those views expressed or implied in the Company's forward-looking statements: the success of strategic initiatives aimed at driving the Company's turnaround; the success of the Company's efforts to enhance its core business; the Company's ability to successfully remediate material weaknesses in the Company's internal controls; litigation and governmental investigations or proceedings arising out of or relating to accounting and financial reporting matters; business conditions and growth or contraction in the Company's customers' industries, the electronic manufacturing services industry and the general economy; variability of the Company's operating results; the Company's ability to control its material, labor and other costs; the Company's ability to manage its assets, including inventory; the Company's dependence on a limited number of major customers; the potential consolidation of the Company's customer base; availability of component supplies; dependence on certain industries; variability and timing of customer requirements; technological, engineering and other start-up issues related to new programs and products, uncertainties as to availability and timing of governmental funding for the Company's customers; the impact of government regulations, including FDA regulations; the types and mix of sales to the Company's customers; the Company's ability to assimilate acquired businesses and to achieve the anticipated benefits of such acquisitions; unforeseen product failures and the potential product liability claims that may be associated with such failures; the availability of capital and other economic, business and competitive factors affecting the Company's customers, its industry and business generally; failure or breach of the Company's information technology systems; and natural disasters. Any one or more of these risks and uncertainties could cause future results or events to differ materially from those expressed or implied in these forward-looking statements. For a further list and description of risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in these forward-looking statements, see the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections in the Company's most recent Annual Report on Form 10-K and the Company's subsequently filed Securities and Exchange Commission reports.

Except as otherwise required by law, the Company undertakes no obligation to publicly update or correct any forward-looking statements, whether as a result of new information, future events, or otherwise. All forward-looking statements are expressly qualified by these cautionary statements.

IEC ELECTRONICS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JANUARY 1, 2016 and SEPTEMBER 30, 2015
(in thousands, except share and per share data)
 
    January 1,
 2016
  September 30,
 2015
    (unaudited)    
ASSETS        
Current assets:        
  Cash   $ 85     $ 407  
  Accounts receivable, net of allowance     20,070       24,923  
  Inventories, net     26,177       25,753  
  Other current assets     1,759       1,444  
Total current assets     48,091       52,527  
             
Fixed assets, net     15,288       15,443  
Intangible assets, net     124       134  
Goodwill     101       101  
Other long term assets     317       57  
Total assets   $ 63,921     $ 68,262  
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
Current liabilities:            
  Current portion of long-term debt   $ 2,918     $ 2,908  
  Accounts payable     13,320       18,336  
  Accrued payroll and related expenses     2,906       2,338  
  Other accrued expenses     1,177       1,318  
  Customer deposits     5,585       5,761  
Total current liabilities     25,906       30,661  
             
Long-term debt     27,306       28,323  
Other long-term liabilities     484       590  
Total liabilities     53,696       59,574  
             
STOCKHOLDERS' EQUITY            
Preferred stock, $0.01 par value:                 
500,000 shares authorized; none issued or outstanding     -
      -
 
Common stock, $0.01 par value:            
  Authorized: 50,000,000 shares            
Issued: 11,234,064 and 11,232,017 shares, respectively            
  Outstanding: 10,178,576 and 10,196,145 shares, respectively     112       112  
Additional paid-in capital     45,899       45,845  
Retained earnings/(accumulated deficit)     (34,197 )     (35,740 )
Treasury stock, at cost: 1,055,488 and 1,035,872 shares, respectively     (1,589 )     (1,529 )
Total stockholders' equity     10,225       8,688  
             
  Total liabilities and stockholders' equity   $ 63,921     $ 68,262  
   
   
   
IEC ELECTRONICS CORP. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED INCOME STATEMENTS  
THREE MONTHS ENDED JANUARY 1, 2016 and DECEMBER 26, 2014  
(unaudited; in thousands, except share and per share data)  
   
    Three Months Ended  
    January 1,
 2016
    December 26,
 2014
 
             
Net sales     32,933       28,829  
Cost of sales     27,116       25,374  
  Gross profit     5,817       3,455  
                 
Selling and administrative expenses     4,035       3,246  
Restatement and related expenses     (50 )     (89 )
  Operating profit/(loss)     1,832       298  
                 
Interest and financing expense     289       534  
  Income/(loss) from continuing operations before income taxes     1,543       (236 )
                 
Provision for/(benefit from) income taxes     -       -  
Income/(loss) from continuing operations     1,543       (236 )
                 
Loss on discontinued operations, net     -       (559 )
                 
  Net income/(loss)   $ 1,543     $ (795 )
                 
Basic net income/(loss) per common and common equivalent share:                
  Earnings/(loss) from continuing operations     0.15       (0.02 )
  Earnings/(loss) from discontinued operations     -       (0.06 )
  Net earnings/loss     0.15       (0.08 )
                   
  Diluted net income/(loss) per common and common equivalent share:                
  Earnings/(loss) from continuing operations     0.15       (0.02 )
  Earnings/(loss) from discontinued operations     -       (0.06 )
  Net earnings/loss     0.15       (0.08 )
                   
  Weighted average number of common and common equivalent shares outstanding:                
  Basic     10,216,587       9,864,927  
  Diluted     10,216,587       9,864,927  
                 

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