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
Thursday April 23, 2009, 1:01 pm EDT
NEWARK, NY--(MARKET WIRE)--Apr 23, 2009 -- IEC Electronics Corp. (OTC BB:IECE.OB - News) 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
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Total Current Assets 19,205 18,544
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NET FIXED ASSETS 1,122 853
NON-CURRENT ASSETS
Deferred Income Taxes 14,042 14,727
Other Non-Current Assets 54 60
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TOTAL ASSETS 34,423 34,184
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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
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Total Current Liabilities 9,037 9,298
---------- ----------
LONG TERM DEBT 7,148 8,910
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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)
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TOTAL SHAREHOLDERS' EQUITY 18,238 15,976
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TOTAL LIABILITIES & EQUITY 34,423 34,184
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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
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Contact:
Contact:
Heather Keenan
IEC Electronics Corp.
(315) 332-4262
Email Contact
John Nesbett
Institutional Marketing Services
(203) 972-9200
Email Contact
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