SOURCE: IEC Electronics

IEC Electronics

April 23, 2009 13:02 ET

IEC Announces Strong Second Quarter for Fiscal 2009

Compared to Q2 of 2008: Revenue Increased 39%; Operating Margins Improved to 7% From 3.2%; Deferred Tax Credit Had a Significant Impact on Net Income

NEWARK, NY--(Marketwire - April 23, 2009) - IEC Electronics Corp. (OTCBB: IECE) announced its results for the second quarter of fiscal 2009, ending March 27, 2009.

The Company reported revenue of $16,335,000 for the quarter, operating income of $1,143,000 and net income of $2,619,000 or $0.29 per share. This compares to revenue of $11,940,000, operating income of $385,000 and net income of $673,000 or $0.07 per share for the quarter ending March 28, 2008. IEC had revenue of $32,192,000 for the first six months of fiscal 2009, operating income of $2,090,000 and a net income of $3,150,000 or $.34 per share. This compares to revenue of $23,100,000, operating income of $777,000 for the first six months of fiscal 2008, and a net profit of $1,093,000 or $.12 per share.

W. Barry Gilbert, Chairman of the Board and CEO, stated, "This was a good quarter. We are weathering the economic downturn fairly well. All our important financial margins have improved. Our gross margin improved to 16.0% as compared with our second quarter's gross margin of 11.6% for Q2 2008. Operating income margin was 7.0% of sales versus 3.2% for the same period last year. Clearly, a small portion of the accretion comes from the Val-U-Tech wire and cable acquisition last June. Our strategy of entering that business has enabled us to support our traditional contract manufacturing customers on an ever-expanding basis. We intend to change the name of the operation to IEC Electronics Wire and Cable Inc. In March, we engaged Mooreland Partners LLC to help us with a 'buy-side' engagement looking for companies possessing other synergistic capabilities.

"Moreover, we are pleased to report that our core contract manufacturing business continues to improve. The investments made last year are starting to pay off in manufacturing efficiencies. Some of the efficiency improvement in this period is also a result of a more favorable product mix, which may or may not continue in the near future. However, we expect our gross margin as a percent of sales to normalize in a range between 14.5% and 15.5%, which is one of the highest in the industry.

"The recent unemployment figures are a stark reminder of the condition of this economy. We do not make a practice of reporting our backlog during the year, nevertheless it is holding up reasonably well despite continued softness, previously reported, associated with a couple of customers who are continuing to experience difficulties. Our sector performance has shifted somewhat. The military sector remains strong and we believe it will be so after the proposed government budget adjustments. It has increased to 48% of sales for the first six months of fiscal 2009 as compared to 39% of sales for fiscal 2008, the last time we presented sector information. Our industrial sector has declined slightly to 28% of sales for the first six months of this year as compared to 30% for the fiscal year end 2008. The aerospace sector has remained just over 10% of the Company's sales for the first six months as compared to fiscal year end 2008. We still expect continued revenue growth for the balance of the year as we continue to focus on our core military, aerospace, industrial and medical market sectors.

"In February, our shareholders authorized the Board, at its discretion, to effect a reverse stock split at anytime before the 2010 Annual Meeting in order to support our efforts to secure re-listing of our common stock on a national exchange. We are not rushing to implement the reverse split in this turbulent market; however we have started to prepare the paperwork for our listing application. In summary, the Company continues to move in the right direction and we are confident that we are creating future value for our shareholders and opportunity for our employees."

As a full service EMS provider, IEC is AS9100 and ISO-9001:2000 registered, and a NSA approved supplier under the COMSEC standard. The Company offers its customers a wide range of services including design, prototype and high reliability printed circuit board assembly, material procurement and control, manufacturing and test engineering support, and systems build. Information regarding IEC's second quarter 2009 results 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, the ability of the Company to assimilate acquired businesses and to achieve the anticipated benefits of such acquisitions, competition and technological change, the ability of the Company to control manufacturing and operating costs, satisfactory relationships with vendors. 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 2008 Annual Report on Form 10-K and in other filings with the Securities and Exchange Commission.

                    IEC ELECTRONICS CORP - CONSOLIDATED
                                BALANCE SHEET
                         MAR 27, 2009 AND SEP 30, 2008
                                (In Thousands)

                                              MAR 27, 2009   SEP 30, 2008
ASSETS

CURRENT ASSETS
  Cash                                                   0              0
  Accounts Receivable                                9,771         10,345
  Inventories                                        7,364          6,230
  Deferred Income Taxes                              1,908          1,908
  Other Current Assets                                 162             61
                                                ----------     ----------
    Total Current Assets                            19,205         18,544
                                                ----------     ----------

NET FIXED ASSETS                                     1,122            853

NON-CURRENT ASSETS
  Deferred Income Taxes                             14,042         14,727
  Other Non-Current Assets                              54             60
                                               -----------     ----------
TOTAL ASSETS                                        34,423         34,184
                                               ===========     ==========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Short Term Borrowings                              1,072          1,098
  Accounts Payable                                   6,163          6,125
  Accrued Payroll and Related Taxes                    611            808
  Other Accrued Expenses                               483            603
  Other Current Liabilities                            708            664
                                                ----------     ----------
    Total Current Liabilities                        9,037          9,298
                                                ----------     ----------

LONG TERM DEBT                                       7,148          8,910
                                                ----------     ----------
TOTAL LIABILITIES                                   16,185         18,208

SHAREHOLDERS' EQUITY
   Authorized - 50,000,000 shares
   Issued – 9,514,049, Outstanding – 8,501,176
  Common stock, par value $.01 per share                95             93
  Treasury Shares at Cost - 1,012,873 shares        (1,413)          (223)
  Additional Paid-in Capital                        40,423         40,124
  Retained Earnings                                (20,867)       (24,018)
                                                ----------     ----------
TOTAL SHAREHOLDERS' EQUITY                          18,238         15,976
                                                ----------     ----------

TOTAL LIABILITIES & EQUITY                          34,423         34,184
                                                ==========     ==========




                      IEC ELECTRONICS CORP - CONSOLIDATED
                             STATEMENT OF INCOME
               FOR QUARTER END & YTD MAR 27, 2009 AND MAR 28, 2008
                               (In Thousands)

                                   ACTUAL     PRIOR     ACTUAL   PRIOR
                                  QUARTER    QUARTER     YTD      YTD
                                   MAR 27,    MAR 28,   MAR 27,  MAR 28,
                                    2009       2008      2009     2008

Sales                              16,335     11,940    32,192    23,100
Cost of Sales                      13,728     10,557    27,351    20,571
                                 --------   --------  --------  --------
Gross Profit                        2,607      1,383     4,841     2,529
Less: Operating Expenses
  Selling & G&A                     1,464        998     2,751     1,752
  Restructuring                         0          0         0         0
                                 --------   --------  --------  --------
Total Operating Expenses            1,464        998     2,751     1,752
                                 --------   --------  --------  --------

Operating Profit                    1,143        385     2,090       777


Interest and Financing Expense         91         84       215       176
(Gain)/Loss on Disposal of
 Fixed Assets                          (5)        (2)       (5)       (2)
Other Expense/(Income)                (61)         0       (61)        0
                                 --------   --------  --------  --------
Net Income before Income Taxes      1,118        303     1,941       603


  Provision for /(benefit from)
   Income Tax                      (1,501)      (370)   (1,209)     (490)
                                 --------   --------  --------  --------

Net Income                          2,619        673     3,150     1,093
                                 ========   ========  ========  ========

Contact Information

  • Contact:
    Heather Keenan
    IEC Electronics Corp.
    (315) 332-4262
    Email Contact

    John Nesbett
    Institutional Marketing Services
    (203) 972-9200
    Email Contact