IEC Electronics Corp. (NYSE American: IEC) today announced results
for the fiscal 2019 second quarter and six months ended
March 29, 2019.
IEC reported revenues of $37.3 million for the second quarter of
fiscal 2019, an increase of 17.4% as compared to revenues of $31.8
million for the fiscal 2018 second quarter. Gross margin for
the second quarter of fiscal 2019 was 12.3% compared to 15.1% in
the same quarter last year. Selling and administrative
expenses increased to $3.3 million in the second quarter of fiscal
2019, or 8.9% of sales, as compared to $2.9 million, or 9.2%
percent of sales, in the second quarter of fiscal 2018. The
Company reported net income of $0.7 million, or $0.06 per basic and
diluted share for the second quarter of fiscal 2019, compared to
net income of $1.6 million, or $0.15 per basic and diluted share in
the second quarter of fiscal 2018.
Revenues for the first six months ended March 29, 2019
increased 37% to $72.7 million as compared to $52.9 million for the
first six months of fiscal 2018. Gross margin for the first
half of fiscal 2019 improved to 13.3% as compared to 11.9% in the
first half of fiscal 2018. Selling and administrative
expenses increased to $6.7 million during the first six months of
fiscal 2019 but decreased as a percentage of sales to 9.2%, as
compared to $5.7 million or 10.8% of sales for the first six months
of fiscal 2018. Net income for the first half of fiscal 2019
was $1.7 million, or $0.17 per basic share, compared to $1.1
million, or $0.11 per basic share, in the same prior year
period.
Jeffrey T. Schlarbaum, President and CEO of IEC Electronics
commented, “We achieved continued revenue momentum in the second
quarter, driven by growth across all three of our market
segments. In addition to the year over year improvement, this
quarter represents our third consecutive quarter of sequential
revenue growth. This growth is purely organic, a result of
our success winning new programs from existing and new customers,
which we believe demonstrates the value they see in our
capabilities and the broad range of solutions we provide as a full
service manufacturing partner. For our second fiscal quarter,
our book to bill ratio was 1.1:1, and our backlog remains
strong.
“Second quarter margin performance was at the lower end of our
expected range, related primarily to our focus on proactively
investing in our workforce and other resource levels to meet the
production needs generated by our strong backlog and booking
activity. The life-saving, mission critical nature of the
programs we support requires that we hire and train skilled staff
in advance of converting customer orders from backlog to
production. Additionally, our industry continues to contend
with component shortages and while we’re becoming more adept at
ensuring we have the right materials on hand to meet customer
commitments, these shortages impacted production in the quarter and
put pressure on our margin performance. Gross margin was also
impacted in the second quarter by tariffs on raw materials from
China, which affected reconciliation with certain customers between
our quoted cost and our actual cost for select programs. We
expect the tariff impact in our statement of operations to reverse
in the second half of fiscal 2019, and we do not expect any
long-term impact to our future performance.”
Mr. Schlarbaum concluded, “Our backlog is up almost 20% since
the start of the fiscal year, which reinforces our confidence that
we will be able to deliver on our expectation of double digit year
over year revenue growth in fiscal 2019. We continue to be
energized by the opportunities we are seeing and believe that our
technical capabilities, proven dependability as a manufacturing
partner and efficient operating model position the Company to
deliver consistent levels of organic growth.”
Conference Call:
IEC will host a conference call, today, Wednesday, May 8, 2019
at 10:00 a.m. Eastern Time, to discuss its financial results for
the fiscal 2019 second quarter and six months ended March 29,
2019.
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)
481-4010 and international callers may dial (919) 882-2331.
Callers must enter conference ID: 46052.
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/event/46052. 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, AS9100D, and ISO 13485, and is Nadcap
accredited. 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.
Note Regarding Forward-Looking Statements
References in this report to “IEC,” “IEC Electronics,” the
“Company,” “we,” “our,” or “us” mean IEC Electronics Corp. and its
subsidiaries except where the context otherwise requires. This
release contains forward-looking statements. In some cases, you can
identify forward-looking statements by terms such as “may,” “will,”
“should,” “expects,” “plans,” “anticipates,” “could,” “intends,”
“targets,” “optimistic,” “projects,” “contemplates,” “believes,”
“estimates,” “predicts,” “potential” or “continue” or the negative
of these terms or other similar words or phrases. These
forward-looking 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 our current
expectations concerning future results and events. The ultimate
correctness of these forward-looking statements is dependent upon a
number of known and unknown risks and events and is subject to
various uncertainties and other factors that may cause our actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by these forward-looking statements.
The following important factors, among others, could affect
future results and events, causing those results and events to
differ materially from those views expressed or implied in our
forward-looking statements: business conditions and growth or
contraction in our customers’ industries, the electronic
manufacturing services industry and the general economy;
variability of our operating results; our ability to control our
material, labor and other costs; our dependence on a limited number
of major customers; the potential consolidation of our 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 our customers; the impact of government
regulations, including FDA regulations; risks related to the
accuracy of the estimates and assumptions we used to revalue our
net deferred tax assets in accordance with the Tax Cuts and Jobs
Act of 2017; the types and mix of sales to our customers;
litigation and governmental investigations; intellectual property
litigation; our ability to maintain effective internal controls
over financial reporting; 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 our customers, our industry and
business generally; failure or breach of our information technology
systems; and natural disasters. Any one or more of such risks and
uncertainties could have a material adverse effect on us or the
value of our common stock. For a further list and description of
various risks, relevant factors and uncertainties that could cause
future results or events to differ materially from those expressed
or implied in our forward-looking statements, see our Annual Report
on Form 10-K, our Quarterly Reports on Form 10-Q and our other
filings with the Securities and Exchange Commission.
All forward-looking statements included in this release are made
only as of the date indicated or as of the date of this release. We
do not undertake any obligation to, and may not, publicly update or
correct any forward-looking statements to reflect events or
circumstances that subsequently occur or which we hereafter become
aware of, except as required by law. New risks and uncertainties
arise from time to time and we cannot predict these events or how
they may affect us and cause actual results to differ materially
from those expressed or implied by our forward-looking statements.
Therefore, you should not rely on our forward-looking statements as
predictions of future events.
Contact: |
Audra Gavelis |
|
Director of Marketing &
Investor Relations |
|
IEC Electronics Corp. |
|
(315) 332-4559 |
|
agavelis@iec-electronics.com |
IEC ELECTRONICS CORP.CONDENSED CONSOLIDATED
BALANCE SHEETSMARCH 29, 2019 and SEPTEMBER 30,
2018(unaudited; in thousands, except share and per share data)
|
March 29, 2019 |
|
September 30, 2018 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash |
$ |
— |
|
|
$ |
— |
|
Accounts receivable, net of allowance |
27,822 |
|
|
25,168 |
|
Unbilled contract revenue |
6,043 |
|
|
— |
|
Inventories |
38,843 |
|
|
34,126 |
|
Other current assets |
1,800 |
|
|
1,747 |
|
Total current assets |
74,508 |
|
|
61,041 |
|
|
|
|
|
Property, plant and equipment,
net |
19,614 |
|
|
20,110 |
|
Deferred income taxes |
8,220 |
|
|
8,855 |
|
Other long-term assets |
695 |
|
|
442 |
|
Total assets |
$ |
103,037 |
|
|
$ |
90,448 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
Current liabilities: |
|
|
|
Current portion of long-term debt |
$ |
1,632 |
|
|
$ |
1,449 |
|
Current portion of capital lease obligation |
324 |
|
|
306 |
|
Accounts payable |
26,405 |
|
|
28,689 |
|
Accrued payroll and related expenses |
1,944 |
|
|
1,796 |
|
Other accrued expenses |
557 |
|
|
458 |
|
Customer deposits |
10,226 |
|
|
7,595 |
|
Total current liabilities |
41,088 |
|
|
40,293 |
|
|
|
|
|
Long-term debt |
25,574 |
|
|
16,002 |
|
Long-term capital lease
obligation |
6,857 |
|
|
7,027 |
|
Other long-term
liabilities |
1,589 |
|
|
1,750 |
|
Total liabilities |
75,108 |
|
|
65,072 |
|
|
|
|
|
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: 11,370,695 and 11,304,393 shares, respectively |
|
|
|
Outstanding: 10,315,207 and 10,248,905 shares, respectively |
103 |
|
|
102 |
|
Additional paid-in
capital |
47,695 |
|
|
47,326 |
|
Accumulated deficit |
(18,280 |
) |
|
(20,463 |
) |
Treasury stock, at cost:
1,055,488 shares |
(1,589 |
) |
|
(1,589 |
) |
Total stockholders’
equity |
27,929 |
|
|
25,376 |
|
Total liabilities and
stockholders’ equity |
$ |
103,037 |
|
|
$ |
90,448 |
|
IEC ELECTRONICS CORP.CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONSTHREE and SIX MONTHS ENDED MARCH 29,
2019 and MARCH 30, 2018(unaudited; in thousands, except share
and per share data)
|
Three Months
Ended |
|
Six Months
Ended |
|
March 29, 2019 |
|
March 30, 2018 |
|
March 29, 2019 |
|
March 30, 2018 |
|
|
|
|
Net sales |
$ |
37,294 |
|
|
$ |
31,768 |
|
|
$ |
72,735 |
|
|
$ |
52,923 |
|
Cost of sales |
32,708 |
|
|
26,984 |
|
|
63,090 |
|
|
46,622 |
|
Gross profit |
4,586 |
|
|
4,784 |
|
|
9,645 |
|
|
6,301 |
|
|
|
|
|
|
|
|
|
Selling and administrative
expenses |
3,328 |
|
|
2,923 |
|
|
6,680 |
|
|
5,710 |
|
Operating income |
1,258 |
|
|
1,861 |
|
|
2,965 |
|
|
591 |
|
|
|
|
|
|
|
|
|
Interest and financing
expense |
385 |
|
|
278 |
|
|
708 |
|
|
511 |
|
Income before income taxes |
873 |
|
|
1,583 |
|
|
2,257 |
|
|
80 |
|
|
|
|
|
|
|
|
|
Income tax
expense/(benefit) |
203 |
|
|
4 |
|
|
515 |
|
|
(1,005 |
) |
|
|
|
|
|
|
|
|
Net income |
$ |
670 |
|
|
$ |
1,579 |
|
|
$ |
1,742 |
|
|
$ |
1,085 |
|
|
|
|
|
|
|
|
|
Net income per common
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.06 |
|
|
$ |
0.15 |
|
|
$ |
0.17 |
|
|
$ |
0.11 |
|
Diluted |
$ |
0.06 |
|
|
$ |
0.15 |
|
|
$ |
0.16 |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
Weighted average number of
shares outstanding: |
|
|
|
|
|
|
|
Basic |
10,286,876 |
|
|
10,217,781 |
|
|
10,274,772 |
|
|
10,211,101 |
|
Diluted |
10,678,058 |
|
|
10,348,662 |
|
|
10,574,076 |
|
|
10,316,762 |
|
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