SOURCE: IEC Electronics

IEC Electronics

May 03, 2011 08:00 ET

IEC Announces Strong Second Quarter for Fiscal 2011

NEWARK, NY--(Marketwire - May 3, 2011) - IEC Electronics Corp. (NYSE Amex: IEC)

--  Q2 revenue increased by 39% compared to Q2 2010
--  Q2 operating income as a percent of sales improved to 9.5% compared to
    7.9% in Q2 2010
--  Increased capital spending to support growth and emerging programs

IEC Electronics Corp. (NYSE Amex: IEC) announced its results for the fiscal second quarter ending April 1, 2011.

For the quarter ended April 1, 2011 the Company reported revenue of $35,085,000, operating income of $3,323,000 (9.5% of sales) and net income of $1,747,000 or $0.17 per share. This compares to revenue of $25,232,000, operating income of $1,983,000 (7.9% of sales) and net income of $1,036,000 or $0.11 per share for the quarter ended March 26, 2010.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of fiscal 2011 were $4,005,000 or $0.40 per share, compared to $2,131,000 or $0.22 per share for the same quarter last year. The Company views EBITDA as a useful measure of operating performance given its strong operating margins and large net operating loss carryforward (NOL). The Company invested $2.5 million in capital using this quarter's cash flow to support growth. This is a significant and important investment; to increase capacity for one of our new customers, to support some emerging opportunities, and to plant the seeds for 2012 and beyond. All investments are calculated risks and IEC believes these are worth taking. For the balance of the fiscal year cash flow from operations will be used to pay down debt, which the Company intends to markedly reduce by the end of the year.

IEC had revenue of $63,729,000, operating income of $5,286,000 and net income of $2,796,000 or $0.28 per share for the first six months of 2011. This compares to revenue of $43,292,000, operating income of $3,296,000 and net income of $1,790,000 or $0.19 per share for the first six months of fiscal 2010. EBITDA for the six month period ended April 1, 2011 totaled $6,442,000 or $0.65 per share, compared to $3,520,000 or $0.37 per share for the same period last year.

W. Barry Gilbert, Chairman of the Board and CEO, stated, "This was another good quarter. All of our important financial metrics improved and we are pleased with our progress. Most significant was the growth of operating income to 9.5% of sales versus 7.9% for the same period last year. The improvement was a combination of various factors; increased efficiency, product mix and the margin generated from our latest acquisition Southern California Braiding (SCB). Just as important, organic sales growth increased by more than 20% over the comparable period.

"We are also pleased with the performance of SCB, whose sales and income were accretive to the Company. It is important to note that during the first year after an acquisition we do not look for any real change in either income or sales from the previous year. Integrating a new company requires significant effort and cost. While SCB will be a good addition for IEC and its integration into IEC Electronics is making reasonable progress, it will take the balance of the fiscal year to complete the effort. SCB's backlog continues to grow and the cross selling opportunities are quickly showing signs of potentially being quite successful. We now expect to be ahead of our forecasted annual revenue of $130 million.

"Consistent with past practice, we do not report backlog during the year. However, we do offer a mid-year update, and in that regard we are pleased to tell our shareholders that current backlog is higher than the backlog figure reported in our 10-K for fiscal 2010. As in the past it is important to note that some of the backlog extends past 2011 and 2012 into 2013 and 2014. Some of our military customers place their orders years in advance to assure we have capacity to support their needs as our business grows.

"Finally, our sector performance has shifted somewhat. The military/aerospace sector remains strong, though decreased as a percentage of our sales to 53% for the first six months of fiscal 2011, as compared to 58% of sales at the end of fiscal 2010. This decrease was not a reduction in revenue in the sector, but reflects the growth in our other sectors. Our medical and other sector has increased from 13% of sales at the close of fiscal 2010 to 20% of sales for the first six months of fiscal 2011. Our industrial and communications sectors stayed relatively flat at 27% of sales for the first six months of this year as compared to 29% at the close of fiscal year end 2010.

"In summary, our Company continues to move forward and we are confident that we are creating future value for our shareholders and opportunity for our employees."

Conference Call

IEC will host a conference call with investors at 10:00 a.m. Eastern time today, May 3, 2011 to discuss its financial results for the quarter ended April 1, 2011. The 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. To access a live webcast of the conference call, log onto the IEC website at http://www.iec-electronics.com or http://www.InvestorCalendar.com.

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 account number 286 and conference number 371226.

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 communications 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, and precision sheet metal products. 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 ITAR registered and NSA approved under the COMSEC standard. 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 2010 Annual Report on Form 10-K and in other filings with the Securities and Exchange Commission.

               IEC ELECTRONICS CORP - CONSOLIDATED
                          BALANCE SHEET
                 APR 01, 2011 AND SEP 30, 2010
                        (In Thousands)

                                         APR 01, 2010         SEP 30, 2010
ASSETS

CURRENT ASSETS
  Cash                                              0                    0
  Accounts Receivable                          19,466               16,315
  Inventories                                  19,823               12,068
  Deferred Income Taxes                         3,940                3,359
  Other Current Assets                            275                  234
                                           ----------           ----------
    Total Current Assets                       43,504               31,976 
                                           ----------           ----------

NET FIXED ASSETS                               19,678               13,098

NON-CURRENT ASSETS
  Goodwill                                     13,009                   58
  Intangible Assets                             5,363                  331
  Deferred Income Taxes                         8,084               10,113
  Other Non-Current Assets                        206                  106
                                          -----------           ----------
TOTAL ASSETS                                   89,844               55,682
                                          ===========           ==========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Short Term Borrowings                         7,017                2,899
  Accounts Payable                             11,179                8,145
  Accrued Payroll and Related Taxes             2,158                2,279
  Other Accrued Expenses                          970                  941
  Other Current Liabilities                       553                    0
                                           ----------           ----------
    Total Current Liabilities                  21,877               14,264
                                           ----------           ----------
LONG TERM DEBT                                 38,759               15,999
                                           ----------           ----------
TOTAL LIABILITIES                              60,636               30,263

SHAREHOLDERS' EQUITY
   Authorized - 50,000,000 shares
   Issued - 10,634,910,
    Outstanding - 9,622,037
  Common stock, par value $.01 per share          106                  101
  Treasury Shares at Cost -
   1,012,873 shares                            (1,413)              (1,413)
  Additional Paid-in Capital                   42,126               41,138
  Retained Earnings                           (11,611)             (14,407)
                                           ----------           ----------
TOTAL SHAREHOLDERS' EQUITY                     29,208               25,419
                                           ----------           ----------

TOTAL LIABILITIES & EQUITY                     89,844               55,682
                                           ==========           ==========




               IEC ELECTRONICS CORP - CONSOLIDATED
                      STATEMENT OF INCOME
     FOR QUARTER END & YTD APR 01, 2011 AND MAR 26, 2010
                        (In Thousands)

                       ACTUAL         PRIOR        ACTUAL        PRIOR
                       QUARTER       QUARTER        YTD           YTD
                    APR 01, 2011  MAR 26, 2010  APR 01, 2011  MAR 26, 2010

Sales                     35,085        25,232        63,729        43,292
Cost of Sales             28,141        21,214        52,202        36,461
                      ----------    ----------    ----------    ----------
Gross Profit               6,944         4,018        11,527         6,831

Less: Operating
 Expenses
  Selling & G&A            3,621         2,035         6,241         3,535
  Other                        0             0             0             0
                      ----------    ----------    ----------    ----------
Total Operating
 Expenses                  3,621         2,035         6,241         3,535
                      ----------    ----------    ----------    ----------

Operating Profit           3,323         1,983         5,286         3,296


Interest and
 Financing Expense           480           260           723           355
Other Expense/
 (Income)                    115           130           130           188
                      ----------    ----------    ----------    ----------
Net Income before
 Income Taxes              2,728         1,593         4,433         2,753


  Provision for/
   (benefit from)
   Income Tax                981           557         1,637           963
                      ----------    ----------    ----------    ----------

Net Income                 1,747         1,036         2,796         1,790
                      ==========    ==========    ==========    ==========



Basic Earnings Per
 Share                $     0.18    $     0.12    $     0.30    $     0.20
Diluted Earnings
 Per Share            $     0.17    $     0.11    $     0.28    $     0.19


Basic Shares           9,576,152     8,974,796     9,399,555     8,903,765
Diluted Shares         9,996,928     9,651,921     9,887,922     9,593,155




               IEC ELECTRONICS CORP - CONSOLIDATED
              RECONCILIATION OF NET INCOME TO EBITDA
      FOR QUARTER END & YTD APR 01, 2011 AND MAR 26, 2010
                       (In Thousands)

                        ACTUAL       PRIOR         ACTUAL        PRIOR
                       QUARTER      QUARTER         YTD           YTD
                    APR 01, 2011  MAR 26, 2010  APR 01, 2011  MAR 26, 2010

Net Income                 1,747         1,036         2,796         1,790

Provision for/
 (benefit from)
 Income Tax                  981           557         1,637           963

Depreciation and
 Amortization Expense        797           277         1,286           414

Net Interest
 Expense / (Income)          480           260           723           355
                      ----------    ----------    ----------    ----------
EBITDA                     4,005         2,130         6,442         3,522
                      ----------    ----------    ----------    ----------


Basic Earnings
 Per Share            $     0.42    $     0.24    $     0.69    $     0.40
Diluted Earnings
 Per Share            $     0.40    $     0.22    $     0.65    $     0.37


Basic Shares           9,576,152     8,974,796     9,399,555     8,903,765
Diluted Shares         9,996,928     9,651,921     9,887,922     9,593,155

Contact Information

  • Contact:
    Susan E. Topel-Samek
    Vice President & CFO
    IEC Electronics Corp.
    (315)332-4308
    Email Contact

    John Nesbett or Jennifer Belodeau
    Institutional Marketing Services (IMS)
    (203)972-9200
    Email Contact
    Email Contact