IEC Electronics Corp. (NYSE American: IEC) today announced results
for the fiscal 2019 third quarter and nine months ended
June 28, 2019.
IEC reported revenues of $40.3 million for the third quarter of
fiscal 2019, an increase of 35.4% as compared to revenues of $29.8
million for the fiscal 2018 third quarter. Gross margin for
the third quarter of fiscal 2019 was 13.9% compared to 11.3% in the
same quarter last year. Selling and administrative expenses
were $3.7 million in the third quarter of fiscal 2019, or 9.2% of
sales, as compared to $2.8 million, or 9.5% percent of sales, in
the third quarter of fiscal 2018. The Company reported net
income of $1.2 million, or $0.12 per basic share and $0.11 per
diluted share for the third quarter of fiscal 2019, compared to net
income of $0.2 million, or $0.02 per basic and diluted share in the
third quarter of fiscal 2018.
Revenues for the first nine months ended June 28, 2019 increased
36.7% to $113.1 million as compared to $82.7 million for the first
nine months of fiscal 2018. Gross margin for the first nine
months of fiscal 2019 improved to 13.5% as compared to 11.7% in the
first nine months of fiscal 2018. Selling and administrative
expenses were $10.4 million during the first nine months of fiscal
2019 but decreased as a percentage of sales to 9.2%, as compared to
$8.5 million or 10.3% of sales for the first nine months of fiscal
2018. Net income for the first nine months of fiscal 2019 was
$3.0 million, or $0.28 per basic and diluted share, compared to
$1.3 million, or $0.12 per basic and diluted share during the first
nine months of fiscal 2018. Excluding a $0.10 one-time tax
benefit during the first nine months of fiscal 2018, net income was
$0.02 per basic and diluted share.
Jeffrey T. Schlarbaum, President and CEO of IEC Electronics
commented, “This was a breakthrough quarter for IEC, highlighted by
revenue of $40.3 million, representing growth of 35% year over
year, as well as an 8% increase sequentially compared to the second
quarter of fiscal 2019. Gross margin improved to 13.9%, which
translated into improved net income. In addition, our sales growth
continues to be strong, as evidenced by backlog growth of more than
64% since the end of fiscal 2018 and a book to bill ratio of
2.5:1.
“Our third quarter performance reflects the changing dynamics of
our Company. During the past few years we’ve restored
customer confidence as a reliable and efficient manufacturing
partner for high complexity products in highly regulated markets.
As a result of these efforts, we are winning more programs
and seeing longer term engagements. We continue to invest in
ensuring that we have a highly skilled workforce in place and
during the third quarter we again added to our employee base,
continuing our practice of hiring and training skilled team members
so that we may efficiently convert backlog to production.
While the component shortage has abated in certain segments of our
industry, we continue to see some tightness in the supply chain for
the parts required for the high complexity programs we
support. Nonetheless, we continue to adapt our operating
model to ensure we have the right materials and people on hand to
meet our customers’ expectations.”
Mr. Schlarbaum continued, “Following the close
of the third quarter, we announced that our Analysis and Testing
Lab has qualified to expand its services to the Defense Logistics
Agency (“DLA”) as a suitable equipped laboratory as part of the
agency’s Qualified Testing Supplier List (“QTSL”). Our
lab has always been a unique on-site service for our customers,
whether for use in root-cause analysis or counterfeit component
risk mitigation. With this expanded service, we can seamlessly test
and transfer parts into the manufacturing facility, saving time and
money for our customers. This is an exciting development for
IEC, enabling us to serve more customers and programs with
state-of-the-art testing for counterfeits and other issues and
expanding our ability to minimize supply chain risk for the
life-saving and mission critical products we support.
“With our backlog growth and the visibility we have today, we
are confident in our expectation of achieving revenue growth in
excess of 25% in fiscal 2019. Furthermore, we believe our
integrated capabilities represent a growing value proposition to
our customers, positioning us well to continue to capitalize on the
opportunities we’re seeing in the marketplace.”
Conference Call:
IEC will host a conference call, today, Wednesday, August 7,
2019 at 10:00 a.m. Eastern Time, to discuss its financial results
for the fiscal 2019 third quarter and nine months ended June 28,
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: 51553.
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/51553. 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 SHEETSJUNE 28, 2019 and SEPTEMBER 30,
2018(unaudited; in thousands, except share and per share data)
|
June 28, 2019 |
|
September 30, 2018 |
|
|
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash |
$ |
— |
|
|
$ |
— |
|
Accounts receivable, net of allowance |
26,612 |
|
|
25,168 |
|
Unbilled contract revenue |
7,305 |
|
|
— |
|
Inventories |
44,889 |
|
|
34,126 |
|
Other current assets |
1,893 |
|
|
1,747 |
|
Total current assets |
80,699 |
|
|
61,041 |
|
|
|
|
|
Property, plant and equipment,
net |
19,331 |
|
|
20,110 |
|
Deferred income taxes |
7,999 |
|
|
8,855 |
|
Other long-term assets |
862 |
|
|
442 |
|
Total assets |
$ |
108,891 |
|
|
$ |
90,448 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
Current liabilities: |
|
|
|
Current portion of long-term debt |
$ |
1,371 |
|
|
$ |
1,449 |
|
Current portion of capital lease obligation |
331 |
|
|
306 |
|
Accounts payable |
29,510 |
|
|
28,689 |
|
Accrued payroll and related expenses |
3,165 |
|
|
1,796 |
|
Other accrued expenses |
543 |
|
|
458 |
|
Customer deposits |
9,750 |
|
|
7,595 |
|
Total current liabilities |
44,670 |
|
|
40,293 |
|
|
|
|
|
Long-term debt |
26,622 |
|
|
16,002 |
|
Long-term capital lease
obligation |
6,772 |
|
|
7,027 |
|
Other long-term
liabilities |
1,558 |
|
|
1,750 |
|
Total liabilities |
79,622 |
|
|
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: 11,387,974 and 11,304,393 shares, respectively |
|
|
|
Outstanding: 10,332,486 and 10,248,905 shares, respectively |
103 |
|
|
102 |
|
Additional paid-in
capital |
47,824 |
|
|
47,326 |
|
Accumulated deficit |
(17,069 |
) |
|
(20,463 |
) |
Treasury stock, at cost:
1,055,488 shares |
(1,589 |
) |
|
(1,589 |
) |
Total stockholders’
equity |
29,269 |
|
|
25,376 |
|
Total liabilities and
stockholders’ equity |
$ |
108,891 |
|
|
$ |
90,448 |
|
IEC ELECTRONICS CORP.CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONSTHREE and NINE MONTHS ENDED JUNE 28,
2019 and JUNE 29, 2018(unaudited; in thousands, except share
and per share data)
|
Three Months
Ended |
|
Nine Months
Ended |
|
June 28, 2019 |
|
June 29, 2018 |
|
June 28, 2019 |
|
June 29, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
40,324 |
|
|
$ |
29,782 |
|
|
$ |
113,059 |
|
|
$ |
82,706 |
|
Cost of sales |
34,719 |
|
|
26,423 |
|
|
97,808 |
|
|
73,045 |
|
Gross profit |
5,605 |
|
|
3,359 |
|
|
15,251 |
|
|
9,661 |
|
|
|
|
|
|
|
|
|
Selling and administrative
expenses |
3,721 |
|
|
2,833 |
|
|
10,402 |
|
|
8,543 |
|
Operating income |
1,884 |
|
|
526 |
|
|
4,849 |
|
|
1,118 |
|
|
|
|
|
|
|
|
|
Interest and financing
expense |
452 |
|
|
322 |
|
|
1,160 |
|
|
834 |
|
Income before income taxes |
1,432 |
|
|
204 |
|
|
3,689 |
|
|
284 |
|
|
|
|
|
|
|
|
|
Income tax
expense/(benefit) |
221 |
|
|
— |
|
|
736 |
|
|
(1,005 |
) |
|
|
|
|
|
|
|
|
Net income |
$ |
1,211 |
|
|
$ |
204 |
|
|
$ |
2,953 |
|
|
$ |
1,289 |
|
|
|
|
|
|
|
|
|
Net income per common
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.12 |
|
|
$ |
0.02 |
|
|
$ |
0.28 |
|
|
$ |
0.12 |
|
Diluted |
$ |
0.11 |
|
|
$ |
0.02 |
|
|
$ |
0.28 |
|
|
$ |
0.12 |
|
|
|
|
|
|
|
|
|
Weighted average number of
shares outstanding: |
|
|
|
|
|
|
|
Basic |
10,332,548 |
|
|
10,243,286 |
|
|
10,294,173 |
|
|
10,221,869 |
|
Diluted |
10,642,403 |
|
|
10,556,764 |
|
|
10,556,953 |
|
|
10,467,112 |
|
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