IEC Announces Third Quarter Results for Fiscal 2013

IEC Announces Third Quarter Results for Fiscal 2013 
NEWARK, NY -- (Marketwired) -- 08/08/13 --  IEC Electronics Corp.
(NYSE MKT: IEC) announced its results for the fiscal third quarter
ending June 28, 2013.  
For the quarter ended June 28, 2013, the Company reported revenue of
$35,154,000, and net income of $382,000 or $0.04 per diluted share.
This compares to revenue of $36,022,000, and net income of $1,843,000
or $0.18 per diluted share for the quarter ended June 29, 2012.  
IEC reported revenue of $101,824,000 and a net loss of ($863,000) or
($0.09) per diluted share for the first nine months of fiscal 2013.
This compares to revenue of $107,900,000 and net income of $5,108,000
or $0.51 per diluted share for the first nine months of fiscal 2012.  
W. Barry Gilbert, Chairman of the Board and CEO, stated, "While
revenue and earnings are down from the same quarter last year, we
made quite a bit of progress from the $1.1 million loss in the second
quarter. This sequential improvement was delivered in spite of
approximately $1.1 million of legal and accounting costs associated
with the restatement of our financial information. We expect to have
additional legal and accounting charges. Nonetheless, we expect our
fiscal Q4 to show stronger sales and earnings than fiscal Q3.  
"I am very pleased that we continue adding new customers and programs
across our operations; two are military and aerospace, three are
medical and several are industrial accounts. All these customers
represent multi-billion dollar organizations seeking a higher level
of technical capability and support than their current supplier
offers. We expect to see some benefit from these new customers in
about six to nine months.  
"It is important to provide some texture with respect to the slight
reduction in sales compared to last year, the margin change and the
lack of debt reduction for the quarter. Last year one of our large
industrial customers was introducing a new product and we were given
the opportunity to handle virtually all of their assemblies. As
discussed at the time, the margins were extraordinary. Their historic
practice, as is common in our industry, is to have two suppliers for
key programs. Once the program was underway they dual sourced the
assembly for this product and volume returned to more normal levels.
In addition, we had a medical customer that was in the last stages of
an FDA recall and once that spike in production volume was over,
their volume and margins also returned to more normal levels. Both of
those volume reductions were largely offset by increased business
from our new telecom customer. The telecom customer's volume has
steadily increased over the last three quarters, however for a long
time the product was unstable and we absorbed a lot of costs. At this
juncture our actions are targeted to improving efficiency which will
take some time now that the number of engineering changes and supply
chain issues have been substantially reduced. 
"During the quarter we used our cash to purchase inventory to support
shipments for our fourth quarter and to support the significant costs
associated with the restatement. Our debt has increased and it is our
goal to reduce our debt over the next twelve months.   
"We made progress in the third quarter and believe that maintaining a
long run perspective about our business is the best way to succeed in
creating future value for our shareholders and opportunity for our
employees."  
Conference Call
 IEC will host a conference call on Thursday, August
8, 2013 at 10:00 a.m. Eastern Time, to discuss its financial results
for the third quarter and nine months ended June 28, 2013. The
conference call may be accessed in the U.S. and Canada by dialing
toll-free (877) 407-8133. International callers may access the call
by dialing (201) 689-8040. 
A replay of the teleconference will be available for 30 days after
the call and may be accessed domestically by dialing (877) 660-6853
and international callers may dial (201) 612-7415. Callers must enter
conference i.d. number 418046. 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. An online replay
will be available on IEC's website shortly after the call. 
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, 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 AC7120 Nadcap accredited for electronics
manufacturing to support the most stringent quality requirements of
the aerospace industry, as well as ITAR registered and NSA approved
under the COMSEC standard. Dynamic Research and Testing Laboratories
(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 (outside of Rochester) and also has operations in
Rochester, NY, Albuquerque, NM and Bell Gardens, CA. Additional
information about IEC can be found on its web site at
www.iec-electronics.com.  
This release contains certain statements that are, or may be deemed
to be, forward-looking statements within the meaning of section 27A
of the Securities Act of 1933 and section 21E of the Securities
Exchange Act of 1934, and are made in reliance upon the protections
provided by such Acts for forward-looking statements. These
forward-looking statements (such as when we describe what we
"intend," "expect," "anticipate" or "estimate" will occur, and other
similar statements) include, but are not limited to, 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 different from any future
results, performance or achievements expressed or implied by these
statements. Specific risks and uncertainties include, but are not
limited to, those set forth in the "Risk Factors" section of the
Company's latest Annual Report on Form 10-K/A and subsequent
Quarterly Reports on Form 10-Q/A and Form 10-Q. Additional risks and
uncertainties resulting from the restatement of our financial
statements included in our Quarterly Report on Form 10-Q/A for the
quarter ended December 28, 2012 and our Annual Report on Form 10-K/A
for the fiscal year ended September 30, 2012 could, among others, (i)
cause us to incur substantial additional legal, accounting and other
expenses, (ii) result in additional shareholder, governmental or
other actions, (iii) cause our customers, including the government
contractors with which we deal, to lose confidence in us or cause a
default under our contractual arrangements, (iv) cause a default
under the Company's arrangements with M&T Bank with respect to which,
if the Bank chooses to exercise its remedies, the Company may not be
able to obtain replacement financing or continue its operations, (v)
result in delisting of the Company's stock from the Exchange if the
Company fails to meet any Exchange listing standard, or fails to
comply with its listing agreement with the Exchange, during the
twelve months ending July 9, 2014 or (vi) result in additional
failures of the Company's internal controls if the Company's
remediation efforts are not effective. Any one or more of such risks
and uncertainties could have a material adverse effect on us or the
value of our common stock. 
We undertake no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events, or
otherwise. 


 
                                                                            
                                                                            
                   IEC ELECTRONICS CORP. AND SUBSIDIARIES                   
                         CONSOLIDATED BALANCE SHEET                         
                    JUNE 28, 2013 AND SEPTEMBER 30, 2012                    
              (in thousands, except share and per share data)               
                                                                            
                                                                            
                                                    June 28,  September 30, 
                                                        2013           2012 
                                               -------------  ------------- 
                                                                  (restated)
ASSETS                                                                      
Current assets                                                              
  Cash                                                 3,103          2,662 
  Accounts receivable, net of allowance               22,944         23,193 
  Inventories, net                                    21,671         17,697 
  Deferred income taxes                                1,365          1,365 
  Other current assets                                   800            401 
                                               -------------  ------------- 
Total current assets                                  49,883         45,318 
                                               -------------  ------------- 
                                                                            
Fixed assets, net                                     18,316         17,120 
Intangible assets, net                                 5,172          5,511 
Goodwill                                              13,810         13,810 
Deferred income taxes                                  6,919          6,018 
Other assets                                             374            121 
                                               -------------  ------------- 
                                                                            
Total assets                                          94,474         87,898 
                                               =============  ============= 
                                                                            
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
                                                                            
Current liabilities                                                         
  Current portion of long-term debt                    2,778          6,533 
  Accounts payable                                    17,133         15,697 
  Accrued payroll and related expenses                 2,251          2,676 
  Other accrued expenses                                 919            946 
  Customer deposits                                       12            146 
                                               -------------  ------------- 
Total current liabilities                             23,093         25,998 
                                                                            
Long-term debt                                        30,630         21,104 
Other long-term liabilities                              185              - 
                                               -------------  ------------- 
                                                                            
Total liabilities                                     53,908         47,102 
                                                                            
STOCKHOLDERS' EQUITY                                                        
Preferred stock, $0.01 par value:                                           
  500,000 shares authorized; none issued or                                 
   outstanding                                                              
Common stock, $0.01 par value:                           109            109 
  Authorized: 50,000,000 shares                                             
  Issued: 11,006,749 and 10,943,185 shares,                                 
   respectively                                                             
  Outstanding: 9,991,291 and 9,927,727 shares,                              
   respectively                                                             
Additional paid-in capital                            43,708         43,075 
Retained earnings                                     (1,816)          (953)
Treasury shares at cost - 1,015,458 shares            (1,435)        (1,435)
                                               -------------  ------------- 
Total stockholders' equity                            40,566         40,796 
                                               -------------  ------------- 
                                                                            
Total liabilities & stockholders' equity              94,474         87,898 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                   IEC ELECTRONICS CORP. AND SUBSIDIARIES                   
                       CONSOLIDATED INCOME STATEMENTS                       
     THREE AND NINE MONTH PERIODS ENDED JUNE 28, 2013 AND JUNE 29, 2012     
              (in thousands, except share and per share data)               
                                                                            
                                                                            
                               Three Months Ended       Nine Months Ended   
                             ----------------------  ---------------------- 
                              June 28,    June 29,    June 28,     June 29, 
                                   2013        2012        2013        2012 
                             ----------  ----------  ----------  ---------- 
                                         (restated)              (restated) 
                                                                            
Sales                            35,154      36,022     101,824     107,900 
Cost of sales                    29,995      29,170      89,601      87,767 
                             ----------  ----------  ----------  ---------- 
  Gross profit                    5,159       6,852      12,223      20,133 
                                                                            
Operating expenses                                                          
Selling and administrative                                                  
 expenses                         4,552       3,879      12,909      12,185 
                             ----------  ----------  ----------  ---------- 
  Operating profit/(loss)           607       2,973        (686)      7,948 
                                                                            
Interest and financing                                                      
 expense                             10         285         648         930 
Other (income)/expense               (9)       (201)         47      (1,050)
                             ----------  ----------  ----------  ---------- 
  Income/(loss) before                                                      
   provision for income taxes       606       2,889      (1,381)      8,068 
                                                                            
Provision for/ (benefit from)                                               
 income tax                         224       1,046        (518)      2,960 
                             ----------  ----------  ----------  ---------- 
Net income/(loss)                   382       1,843        (863)      5,108 
                             ==========  ==========  ==========  ========== 
                                                                            
                                                                            
                                                                            
Net income/(loss) per common and common                                     
 equivalent share:                                                          
  Basic earnings per share         0.04        0.19       (0.09)       0.53 
  Diluted earnings per share       0.04        0.18       (0.09)       0.51 
                                                                            
Weighted average number of common and common                                
 equivalent shares outstanding:                                             
  Basic                       9,702,446   9,682,423   9,675,120   9,665,095 
  Diluted                     9,810,707  10,008,393   9,675,120   9,931,172 
                                                                            
                                                                            
                                                                            
                   IEC ELECTRONICS CORP. AND SUBSIDIARIES                   
                   RECONCILIATION OF NET INCOME TO EBITDA                   
     THREE AND NINE MONTH PERIODS ENDED JUNE 28, 2013 AND JUNE 29, 2012     
               (in thousands, except share and per share data)              
                                                                            
                                                                            
                                  Three Months Ended     Nine Months Ended  
                                --------------------- ----------------------
                                  June 28,   June 29,   June 28,    June 29,
                                      2013       2012       2013        2012
                                ---------- ---------- ----------  ----------
                                           (restated)             (restated)
                                                                            
Net income/(loss)                      382      1,843       (863)      5,108
                                                                            
Provision for/(benefit from)                                                
 income tax                            224      1,046       (518)      2,960
                                                                            
Depreciation and amortization                                               
 expense                             1,221      1,107      3,574       3,177
                                                                            
Interest and financing expense          10        285        648         930
                                ---------- ---------- ----------  ----------
EBITDA                               1,837      4,281      2,841      12,175
                                                                            
                                                                            
  Basic earnings per share            0.04       0.19      (0.09)       0.53
  Basic EBITDA per share              0.19       0.44       0.29        1.26
                                                                            
  Diluted earnings per share          0.04       0.18      (0.09)       0.51
  Diluted EBITDA per share            0.19       0.43       0.29        1.23
                                                                            
Earnings per share weighted average number of common and common equivalent  
 shares outstanding:                                                        
  Basic                          9,702,446  9,682,423  9,675,120   9,665,095
  Diluted                        9,810,707 10,008,393  9,675,120   9,931,172
                                                                            
EBITDA per share weighted average number of common and common equivalent    
 shares outstanding:                                                        
  Basic                          9,702,446  9,682,423  9,675,120   9,665,095
  Diluted                        9,810,707 10,008,393  9,737,443   9,931,172

  
Contact:
Vincent Leo
CFO
IEC Electronics Corp.
(315)332-4308
VLeo@iec-electronics.com 
John Nesbett or Jennifer Belodeau
Institutional Marketing Services
(203)972-9200
jnesbett@institutionalms.com
jbelodeau@institutionalms.com 
 
 
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