SOURCE: IEC Electronics

IEC Electronics

February 05, 2013 08:30 ET

IEC Announces Results for the First Quarter of Fiscal 2013

NEWARK, NY--(Marketwire - Feb 5, 2013) - IEC Electronics Corp. (NYSE MKT: IEC) announced its unaudited results for the first quarter of fiscal 2013 ending December 28, 2012. 

The Company reported revenue of $33.0 million for the quarter and net income of $239 thousand, or $0.02 per diluted share. This compares to revenue in the prior year first quarter of $33.9 million and net income of $948 thousand, or $0.09 per diluted share, of which $571 thousand of the net income, or $0.06 per diluted share was associated with the clawback arising from our Southern California Braiding acquisition in December of 2010. 

W. Barry Gilbert, Chairman of the Board and CEO, stated, "Q1 of 2013 was disappointing. Entering the quarter we expected to exceed our 1Q fiscal 2012 and our 4Q fiscal 2012 performance, despite a shifting mix of business and softening demand from some of our industrial customers. At the time, we expected that some new programs, which were ramping up, would absorb much of the envisioned shortfall.

"As the quarter progressed, the forecasted customer softness did occur. Additionally, we also experienced an unexpected, major technical delay in one of our new customer product ramps. We worked with our customer to resolve the design/manufacturing problems and expect to recover the lost volume and likely exceed our expectations over the balance of the year. With the technical issues now resolved, we anticipate that this customer's project will advance as planned and we believe this customer will become a formidable partner for the company moving forward. 

"Our operations in the western half of the United States, which primarily support our military and aerospace customers, did quite well in comparison to both last quarter and to Q1 of the previous year. However, the increase was not enough to offset the shortfall at our Newark facility. 

"As previously announced, I have lowered my sales growth forecast range for fiscal 2013 to 6% to 9% from 9% to 14%. Some of our key Industrial customers who saw strong international demand for their products last year are experiencing a softening in demand this year. We do not see this changing anytime soon. However, we do anticipate an increase in demand from our military and aerospace customers. Beyond advancing some existing orders and replacing those orders with new orders, we have won some unannounced programs and are in the final stages of securing other important programs. These are programs we expect to last for many years. 

"Two weeks ago we were pleased to announce the refinancing of our variable interest rate debt with M&T (Manufacturers and Traders Bank) into long-term fixed rate debt. We received excellent rates for a ten-year, long-term swap and nine-year term debt. We appreciate M&T's confidence in us. We have substantially reduced our debt since the SCB acquisition two years ago and have brought it to a level that made sense for us to fix our rates for the long term. Having said that, our debt increased in Q1 of 2013 as a result of the weaker sales and the build up of inventory. We expect this to come into line over the next couple of quarters. 

"In conclusion, we had a difficult quarter, and periodically that will happen. Our perspective has not changed and we view our future to be quite bright. That said it does not diminish our, nor your, disappointment in this past quarter's performance. My priority item, beyond continued company growth, is to bring our gross profit percentage back to the appropriate level of 19% and restore our operating profit to 9%." 

Conference Call
IEC will host a conference call to discuss the first quarter of fiscal 2013, today, February 5, 2013 at 10:00 a.m. Eastern time. The conference call may be accessed in the U.S. and Canada by dialing toll-free 1-877-407-9210. International callers may access the call by dialing 1-201-689-8049.A replay of the teleconference will be available for 30 days after the call and may be accessed domestically by dialing 1-877-660-6853 and international callers may dial 1-201-612-7415. Callers must enter conference i.d. number 408419.

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 Corporation is a premier provider of electronic manufacturing services ("EMS") to advanced technology companies primarily in the military and aerospace, medical, industrial and computing sectors. The Company specializes in the custom manufacture of high reliability, complex circuit cards, system level assemblies, a wide array of custom cable and wire harness assemblies, precision sheet metal products and advanced research and testing services. As a full service EMS provider, IEC is a world-class ISO 9001:2008, AS9100 and ISO13485 certified company. The AS9100 certification enables IEC to serve the military and commercial aerospace markets. The ISO13485 certification supports the quality requirements of medical device markets. The Company is also AC7120 Nadcap accredited for electronics manufacturing to support the most stringent quality requirements of the aerospace industry, as well as ITAR registered and NSA approved under the COMSEC standard. Dynamic Research and Testing Laboratories (DRTL), the Company's newest business unit, is an ISO 17025 accredited laboratory specializing in the testing and detection of counterfeit electronic parts, as well as Component Risk Mitigation and advanced failure analysis. IEC Electronics is headquartered in Newark, NY (outside of Rochester) and also has operations in Victor, NY, Rochester, NY, Albuquerque, NM and Bell Gardens, CA. Additional information about IEC can be found on its web site at www.iec-electronics.com

The foregoing, including any discussion regarding the Company's future prospects, contains certain forward-looking statements that involve risks and uncertainties, including uncertainties associated with economic conditions in the electronics industry, particularly in the principal industry sectors served by the Company, changes in customer requirements and in the volume of sales to principal customers, competition and technological change, the ability of the Company to control manufacturing and operating costs, the ability of the Company to develop and maintain satisfactory relationships with vendors, and the ability of the Company to efficiently integrate acquired companies into its business. The Company's actual results of operations may differ significantly from those contemplated by any forward-looking statements as a result of these and other factors, including factors set forth in the Company's 2012 Annual Report on Form 10-K and in other filings with the Securities and Exchange Commission.

   
IEC ELECTRONICS CORP - CONSOLIDATED  
BALANCE SHEET  
DEC 28, 2012 AND SEP 30, 2012  
(In Thousands)  
           
  DEC 28, 2012     SEP 30, 2012  
ASSETS          
           
CURRENT ASSETS          
Cash 2,778     2,662  
Accounts Receivable 20,279     23,193  
Inventories 21,898     19,348  
Deferred Income Taxes 1,366     1,365  
Other Current Assets 753     401  
Total Current Assets 47,074     46,969  
           
           
NET FIXED ASSETS 17,318     17,120  
           
NON-CURRENT ASSETS          
Goodwill 13,810     13,810  
Intangible Assets 5,398     5,511  
Deferred Income Taxes 5,392     5,433  
Other Non-Current Assets 107     121  
TOTAL ASSETS 89,099     88,964  
           
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
           
CURRENT LIABILITIES          
Short Term Borrowings 3,380     6,533  
Accounts Payable 12,360     15,697  
Accrued Payroll and Related Taxes 1,991     2,676  
Other Accrued Expenses 755     946  
Other Current Liabilities 90     146  
Total Current Liabilities 18,576     25,998  
           
LONG TERM DEBT 28,227     21,104  
TOTAL LIABILITIES 46,803     47,102  
           
SHAREHOLDER'S EQUITY          
Authorized - 50,000,000 shares          
Issued - 11,026,733 Outstanding - 10,011,275          
Common stock, par value $.01 per share 110     109  
Treasury Shares at Cost - 1,015,458 shares (1,435 )   (1,435 )
Additional Paid-in Capital 43,269     43,075  
Retained Earnings 352     113  
TOTAL SHAREHOLDER'S EQUITY 42,296     41,862  
TOTAL LIABILITIES & EQUITY 89,099     88,964  
           
           
           
IEC ELECTRONICS CORP - CONSOLIDATED  
STATEMENT OF INCOME  
FOR QUARTER END & YTD DEC 28, 2012 AND DEC 30, 2011  
(In Thousands)  
                 
  ACTUAL   ACTUAL   ACTUAL   ACTUAL  
  QUARTER   QUARTER   YTD   YTD  
  DEC 28, 2012   DEC 30, 2011   DEC 28, 2012   DEC 30, 2011  
                 
Sales 32,989   33,859   32,989   33,859  
Cost of Sales 28,285   28,372   28,285   28,372  
                 
Gross Profit 4,704   5,487   4,704   5,487  
                 
Less: Operating Expenses                
Selling & Administrative Expenses 4,046   4,533   4,046   4,533  
                 
Operating Profit 658   954   658   954  
                 
                 
Interest and Financing Expense 279   353   279   353  
Other (Income)/Expense -   (902 ) -   (902 )
                 
Net Income before Income Taxes 379   1,503   379   1,503  
                 
                 
Provision for Income Tax 140   555   140   555  
Net Income 239   948   239   948  
                 
                 
                 
Basic Earnings Per Share $0.02   $0.10   $0.02   $0.10  
Diluted Earnings Per Share $0.02   $0.09   $0.02   $0.09  
                 
                 
Basic Shares 9,647,210   9,645,942   9,647,210   9,645,942  
Diluted Shares 9,968,147   10,004,359   9,968,147   10,004,359  
                 
                 
                 
 IEC ELECTRONICS CORP - CONSOLIDATED
 RECONCILIATION OF NET INCOME TO EBITDA
 FOR QUARTER END & YTD DEC 28, 2012 & DEC 30, 2011
               
  ACTUAL   ACTUAL   ACTUAL   ACTUAL
  QUARTER   QUARTER   YTD   YTD
  DEC 28, 2012   DEC 30, 2011   DEC 28, 2012   DEC 30, 2011
               
Net Income 239   948   239   948
               
Provision for / (benefit from) Income Tax 140   555   140   555
               
Depreciation & Amortization Expense 1,140   987   1,140   987
               
Net Interest Expense / (Income) 279   353   279   353
EBITDA 1,798   2,843   1,798   2,843
               
               
Basic Earnings per Share 0.02   0.10   0.02   0.10
Basic EBITDA per Share 0.19   0.29   0.19   0.29
               
Diluted Earnings per Share 0.02   0.09   0.02   0.09
Diluted EBITDA per Share 0.18   0.28   0.18   0.28
               
               
Basic Shares 9,647,210   9,645,942   9,647,210   9,645,942
Diluted Shares 9,968,147   10,004,359   9,968,147   10,004,359
               

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