SOURCE: IEC Electronics

IEC Electronics

July 31, 2012 08:25 ET

IEC Announces Strong Third Quarter Results for Fiscal 2012

Q3 Operating Margin Improved to 9.8% Compared to 7.6% in Q3 2011; Q3 Earnings per Share Increased to $0.22 Compared to $0.13 per Share in Q3 2011

NEWARK, NY--(Marketwire - Jul 31, 2012) - IEC Electronics Corp. (NYSE MKT: IEC) announced its results for the fiscal third quarter ending June 29, 2012. 

For the quarter ended June 29, 2012 the Company reported revenue of $36,022,000, and net income of $2,203,000 or $0.22 per diluted share. This compares to revenue of $34,626,000, and net income of $1,333,000 or $0.13 per diluted share for the quarter ended July 1, 2011. 

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of fiscal 2012 were $4,844,000 or $0.48 per diluted share, compared to $3,483,000 or $0.35 per diluted 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). EBITDA and EBITDA per basic and diluted shares are reconciled to GAAP measures in the attachment to this release.

IEC had revenue of $107,900,000 and net income of $5,759,000 or $0.58 per diluted share for the first nine months of fiscal 2012. This compares to revenue of $98,355,000 and net income of $4,129,000 or $0.42 per diluted share for the first nine months of fiscal 2011. 

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the first nine months of fiscal 2012 were $13,199,000 or $1.33 per diluted share, compared to $9,925,000 or $1.00 per diluted share for the same period last year. 

W. Barry Gilbert, Chairman of the Board and CEO, stated, "For the second quarter in a row we have achieved financial results well above our historic metrics, specifically gross margins of 20.6% and operating margin of 9.8%. During the third quarter, cost containment and product mix were important drivers of our higher margins. The gross and operating margin results were some of the best in the company's history, and particularly strong for our industry. We are making solid progress toward our previously discussed 18 month goal of improving our margins to the point where they are consistently above this level. 

"I am most proud of IEC's very strong operational results. However, operational strength is only part of our story. The management team has created a solid company by melding together four acquisitions and starting a fifth company. It took us two years to address most of the integration issues. The acquired businesses are growing and are starting to capture synergies among them. All of our businesses are now competing for new business opportunities that were unavailable to us several years ago. They will continue to grow at very respectable rates, broadly speaking between 9 and 14%. Now it is time for us to continue moving forward and take some larger steps growing the company through acquisitions or starting new businesses to better support the markets we serve.

"The quarter was not what we envisioned in either sales growth or debt reduction. We experienced some softness in our industrial and medical sectors, and at the present time those sectors appear to be back on track. With respect to our debt we believe our debt can be reduced to approximately $26 million by the conclusion of our fiscal year at the end of September. 

"Our Company continues to move forward as we maintain our long run perspective toward our business. 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, July 31, 2012 to discuss its financial results for the quarter ended June 29, 2012. 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 397869. 

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 ITAR registered and NSA approved under the COMSEC standard. Dynamic Research and Testing Laboratory (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 (near 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 2011 Annual Report on Form 10-K and in other filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new, updated information future events or otherwise.

   
IEC ELECTRONICS CORP - CONSOLIDATED  
BALANCE SHEET  
JUNE 29, 2012 AND SEP 30, 2011  
(In Thousands)  
    JUN 29, 2012     SEP 30, 2011  
ASSETS            
CURRENT ASSETS            
Cash   -     -  
Accounts Receivable   22,678     19,423  
Inventories   19,566     16,093  
Deferred Income Taxes   3,863     3,863  
Other Current Assets   560     1,834  
             
Total Current Assets   46,667     41,213  
             
NET FIXED ASSETS   17,523     17,886  
NON-CURRENT ASSETS            
Goodwill   13,810     13,810  
Intangible Assets   5,625     5,964  
Deferred Income Taxes   3,664     6,768  
Other Non-Current Assets   135     179  
             
TOTAL ASSETS   87,424     85,820  
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
CURRENT LIABILITIES            
Short Term Borrowings   6,750     6,896  
Accounts Payable   13,473     12,750  
Accrued Payroll and Related Taxes   2,987     3,092  
Other Accrued Expenses   698     851  
Other Current Liabilities   200     332  
             
Total Current Liabilities   24,108     23,921  
             
LONG TERM DEBT   23,771     28,213  
             
TOTAL LIABILITIES   47,879     52,134  
SHAREHOLDERS' EQUITY            
Authorized - 50,000,000 shares            
Issued - 10,966,167 Outstanding - 9,950,709            
Common stock, par value $.01 per share   109     108  
Treasury Shares at Cost - 1,015,458 shares   (1,435 )   (1,435 )
Additional Paid-in Capital   42,759     42,660  
Retained Earnings   (1,888 )   (7,647 )
             
TOTAL SHAREHOLDERS' EQUITY   39,545     33,686  
             
TOTAL LIABILITIES & EQUITY   87,424     85,820  
             
             
             
IEC ELECTRONICS CORP - CONSOLIDATED
STATEMENT OF INCOME
FOR QUARTER END & YTD JUN 29, 2012 AND JUL 1, 2011
(In Thousands)
                     
    ACTUAL     ACTUAL   ACTUAL     ACTUAL
    QUARTER     QUARTER   YTD     YTD
    JUN 29, 2012     JUL 1, 2011   JUN 29, 2012     JUL 1, 2011
                             
Sales     36,022       34,626     107,900       98,355
Cost of Sales     28,607       28,056     86,743       79,620
                             
Gross Profit     7,415       6,570     21,157       18,735
                             
Less: Operating Expenses                            
Selling & Administrative Expenses     3,879       3,947     12,185       10,826
                             
Operating Profit     3,536       2,623     8,972       7,909
                             
                             
Interest and Financing Expense     285       491     930       1,214
Other (Income)/Expense     (201 )     4     (1,050 )     134
                             
Net Income before Income Taxes     3,452       2,128     9,092       6,561
                             
                             
Provision for Income Tax     1,249       795     3,333       2,432
                             
Net Income     2,203       1,333     5,759       4,129
                             
                             
                             
                             
Basic Earnings Per Share   $ 0.23     $ 0.14   $ 0.60     $ 0.43
Diluted Earnings Per Share   $ 0.22     $ 0.13   $ 0.58     $ 0.42
                             
                             
Basic Shares     9,682,423       9,776,888     9,665,095       9,524,874
Diluted Shares     10,008,393       10,021,932     9,931,172       9,932,446
                             
                             
                             
IEC ELECTRONICS CORP - CONSOLIDATED
RECONCILIATION OF NET INCOME TO EBITDA
FOR QUARTER END & YTD JUN 29, 2012 & JUL 1, 2011
               
  ACTUAL   ACTUAL   ACTUAL   ACTUAL
  QUARTER   QUARTER   YTD   YTD
  JUNE 29, 2012   JUL 1, 2011   JUNE 29, 2012   JUL 1, 2011
               
Net Income 2,203   1,333   5,759   4,129
               
Provision for / (benefit from) Income Tax 1,249   795   3,333   2,432
               
Depreciation & Amortization Expense 1,107   864   3,177   2,150
               
Net Interest Expense / (Income) 285   491   930   1,214
               
EBITDA 4,844   3,483   13,199   9,925
               
               
Basic Earnings per Share 0.23   0.14   0.60   0.43
Basic EBITDA per Share 0.50   0.36   1.37   1.04
               
Diluted Earnings per Share 0.22   0.13   0.58   0.42
Diluted EBITDA per Share 0.48   0.35   1.33   1.00
               
               
Basic Shares 9,682,423   9,776,888   9,665,095   9,524,874
Diluted Shares 10,008,393   10,021,932   9,931,172   9,932,446
               

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