IEC Announces Results for the Second Quarter of Fiscal 2014

IEC Announces Results for the Second Quarter of Fiscal 2014 
NEWARK, NY -- (Marketwired) -- 05/01/14 --  IEC Electronics Corp.
(NYSE MKT: IEC) announced its unaudited results for the second
quarter of fiscal 2014, ending March 28, 2014.  
The Company reported revenue of $34.8 million for the quarter and a
net loss of $569 thousand, or ($0.06) per diluted share. This
compares to revenue in the prior year second quarter of $33.7 million
and net loss of $1.1 million, or ($0.12) per diluted share. During
the second quarter of fiscal 2014, the Company reported restatement
and related expenses of $1.3 million compared to none in the second
quarter of last year.  
IEC reported revenue of $66.9 million and a net loss of $1.7 million
or ($0.17) per diluted share for the first six months of fiscal 2014.
This compares to revenue of $66.7 million and a net loss of $1.2
million or ($0.13) per diluted share for the first six months of
fiscal 2013. During the first six months of fiscal 2014, the Company
reported restatement and related expenses of $2.4 million compared to
none for the first six months of last year.  
W. Barry Gilbert, Chairman of the Board and CEO, stated, "We are
making progress rebalancing and moving the business forward, albeit
at a slower pace than we planned. Over the last twelve months we have
introduced a number of previously discussed operational and
managerial changes at most of our businesses. These are important
changes that are starting to have a positive impact.   
"Our revenue for the quarter was up slightly over the same period
last year. As previously discussed, one of our medical customers is
on FDA hold. We expect the hold to be lifted by the beginning of our
fiscal fourth quarter with shipments to this customer returning to
previous levels over time. Some of our recently added medical
programs were slower to ramp in the second quarter and activity was
sequentially flat as compared to the first quarter of 2014. We
anticipate that activity from these programs will gradually increase
and have a larger impact in the third and fourth quarter of this
year. In the short run these programs may cost the Company money but
in the long run we envision them being accretive to the business.
These are excellent customers.  
"Our industrial customers e
xceeded our expectations. Looking over the
balance of the year, we believe that industrial sector sales will be
flat or possibly down for the balance of the year as compared to last
year.  
"Our Aerospace and Defense business (previously Military and
Aerospace), which represents approximately half of our revenue,
remains steady. Our current platforms seem strong; we are not seeing
a lot of change and no long range future programs have been
cancelled. We are seeing some rotation of our programs. Certain older
programs are being winnowed down but are being replaced with new
robust programs in the current and anticipated future military
budgets. Finally, we are seeing cost pressure from the 'Primes' which
is a reflection of the cost pressure they are receiving from the
government.  
"As previously discussed, one of our communications customers has
experienced some technical/design manufacturing problems with a new
model they are introducing. These issues have largely been resolved
and their volume is starting to increase. We are supporting their
domestic needs and providing them with special technical support with
their planned transition to the Far East. They are a young company,
which at times can present challenges, but we are working closely
with them and are optimistic that this customer will become a strong
partner in the future.  
"As noted last quarter, we have had a number of difficult quarters.
Nonetheless, we continue to expand our customer base and gain new
programs with our existing customers. I expect modest but steady
revenue growth at the same time as operational changes take hold. We
view our future to be bright, but remain cautious as the legal
expenses resulting from our restatement and related matters are
unpredictable as we work through associated issues."  
Conference Call 
IEC will host a conference call today, Thursday, May 1, 2014 at 10:00
a.m. Eastern Time, to discuss its financial results for the second
quarter and six months ended March 28, 2014.  
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) 660-6853
and international callers may dial (201) 612-7415. Callers must enter
conference i.d. number 13581366. 
To access the live webcast, visit the IEC website at
http://www.iec-electronics.com/conference-calls/. The webcast can
also be accessed at http://www.InvestorCalendar.com. An online replay
will be available 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 aerospace and defense, medical,
industrial and communications sectors. The Company specializes in the
custom manufacture of high reliability, complex circuit boards,
system level assemblies, a wide array of custom cable and wire
harness assemblies, precision 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 the Company describes what
it "believes", "expects", or "anticipates" will occur, and other
similar 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 the Company's 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 the Company's actual results,
performance or achievements to be different from any future resu
lts,
performance or achievements expressed or implied by these 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 the Company's
forward-looking statements: business conditions and growth or
contraction in the Company's customers' industries, the electronic
manufacturing services industry and the general economy; variability
of the Company's operating results; the Company's ability to control
its material, labor and other costs; the Company's dependence on a
limited number of major customers; the potential consolidation of the
Company's customer base; availability of component supplies;
dependence on certain industries; variability and timing of customer
requirements; uncertainties as to availability and timing of
governmental funding for the Company's customers; the types and mix
of sales to the Company's customers; the Company's ability to
assimilate acquired businesses and to achieve the anticipated
benefits of such acquisitions; 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 the Company's customers, the
Company's industry and business generally; failure or breach of the
Company's information technology systems; natural disasters; and
other factors that the Company may not have currently identified or
quantified. Additional risks and uncertainties resulting from the
restatement of the Company's financial statements included in the
Company's Annual Report on Form 10-K/A filed with the Securities and
Exchange Commission ("SEC") on July 3, 2013 and in the Company's Form
10-Q/A filed on the same date are described in detail in the
Company's Form 10-K for the fiscal year ended September 30, 2013
filed with the SEC on December 24, 2013 (the "2013 Form 10-K"). Any
one or more of such risks and uncertainties could have a material
adverse effect on the Company or the value of its 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 Part I including "Risk Factors," and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" sections in the 2013 Form 10-K and the Company's
subsequently filed SEC reports. 
The Company undertakes no obligation to publicly update or correct
any forward-looking statements, whether as a result of new
information, future events, or otherwise. 


 
                                                                            
                   IEC ELECTRONICS CORP. AND SUBSIDIARIES                   
                         CONSOLIDATED BALANCE SHEET                         
                   MARCH 28, 2014 AND SEPTEMBER 30, 2013                    
              (in thousands, except share and per share data)               
                                                                            
                                                                            
                                                   March 28,  September 30, 
                                                        2014           2013 
                                               -------------  ------------- 
                                                 (unaudited)                
ASSETS                                                                      
Current assets                                                              
  Cash                                                   652          2,499 
  Accounts receivable, net of allowance               25,083         27,945 
  Inventories, net                                    20,103         21,904 
  Deferred income taxes                                1,382          1,382 
  Other current assets                                 1,124            610 
                                               -------------  ------------- 
Total current assets                                  48,344         54,340 
                                               -------------  ------------- 
                                                                            
Fixed assets, net                                     19,261         17,946 
Intangible assets, net                                 2,520          2,647 
Goodwill                                               2,005          2,005 
Deferred income taxes                                 12,637         11,652 
Other assets                                             339            345 
                                               -------------  ------------- 
                                                                            
Total assets                                          85,106         88,935 
                                               =============  ============= 
                                                                            
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
                                                                            
Current liabilities                                                         
  Current portion of long-term debt                    2,908          2,778 
  Accounts payable                                    15,304         16,508 
  Accrued payroll and related expenses                 2,557          2,464 
  Other accrued expenses                                 960            811 
  Customer deposits                                      438            187 
                                               -------------  ------------- 
Total current liabilities                             22,167         22,748 
                                                                            
Long-term debt                                        32,229         34,026 
Other long-term liabilities                              158            167 
                                               -------------  ------------- 
                                                                            
Total liabilities                                     54,554         56,941 
                                                                            
STOCKHOLDERS' EQUITY                                                        
Preferred stock, $0.01 par value:                                           
  500,000 shares authorized; none issued or                                 
   outstanding                                                              
Common stock, $0.01 par value:                           112            110 
  Authorized: 50,000,000 shares                                             
  Issued: 11,141,806 and 11,006,749 shares,                                 
   respectively                                                             
  Outstanding: 10,125,352 and 9,991,291                                     
   shares, respectively                                                     
Additional paid-in capital                            44,032         4
3,802 
Retained earnings                                    (12,152)       (10,483)
Treasury shares at cost - 1,106,454 and                                     
 1,015,458 shares, respectively                       (1,440)        (1,435)
                                               -------------  ------------- 
Total stockholders' equity                            30,552         31,994 
                                               -------------  ------------- 
                                                                            
Total liabilities & stockholders' equity              85,106         88,935 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                   IEC ELECTRONICS CORP. AND SUBSIDIARIES                   
                       CONSOLIDATED INCOME STATEMENTS                       
    THREE AND SIX MONTHS PERIODS ENDED MARCH 28, 2014 AND MARCH 29, 2013    
         (unaudited; in thousands, except share and per share data)         
                                                                            
                                                                            
                                  Three Months Ended     Six Months Ended   
                                 --------------------  -------------------- 
                                 March 28,  March 29,  March 28,  March 29, 
                                      2014       2013       2014       2013 
                                 ---------  ---------  ---------  --------- 
                                                                            
Net Sales                           34,805     33,681     66,942     66,671 
Cost of sales                       30,035     30,782     58,562     59,606 
                                 ---------  ---------  ---------  --------- 
  Gross profit                       4,770      2,899      8,380      7,065 
                                                                            
Selling and administrative                                                  
 expenses                            3,952      4,311      7,744      8,357 
Restatement and related expenses     1,258          -      2,414          - 
                                 ---------  ---------  ---------  --------- 
  Operating profit/(loss)             (440)    (1,412)    (1,778)    (1,292)
                                                                            
Interest and financing expense         492        359        852        638 
Other (income)/expense                  (1)        56         18         57 
                                 ---------  ---------  ---------  --------- 
  Income/(loss) before provision                                            
   for income taxes                   (931)    (1,827)    (2,648)    (1,987)
                                                                            
Provision for/ (benefit from)                                               
 income tax                           (362)      (683)      (979)      (742)
                                 ---------  ---------  ---------  --------- 
Net income/(loss)                     (569)    (1,144)    (1,669)    (1,245)
                                 =========  =========  =========  ========= 
                                                                            
                                                                            
Net income/(loss) per common and                                            
 common equivalent share:                                                   
  Basic                              (0.06)     (0.12)     (0.17)     (0.13)
  Diluted                            (0.06)     (0.12)     (0.17)     (0.13)
                                                                            
Weighted average number of                                                  
 common and common equivalent                                               
 shares outstanding:                                                        
  Basic                          9,829,964  9,675,089  9,805,841  9,661,304 
  Diluted                        9,829,964  9,675,089  9,805,841  9,661,304 

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