IEC Announces Results for the Third Quarter of Fiscal 2014

IEC Announces Results for the Third Quarter of Fiscal 2014 
NEWARK, NY -- (Marketwired) -- 08/05/14 --  IEC Electronics Corp.
(NYSE MKT: IEC) announced its unaudited results for the third quarter
of fiscal 2014, ended June 27, 2014.  
The Company reported revenue of $33.0 million for the quarter and net
income of $22 thousand, or $0.00 per diluted share. This compares to
revenue in the third quarter of the prior year of $35.2 million and
net income of $382 thousand, or $0.04 per diluted share. During the
third quarter of fiscal 2014, the Company reported restatement and
related expenses of $102 thousand compared to $1.1 million in the
third quarter of last year.  
IEC reported revenue of $99.9 million and a net loss of $1.6 million
or ($0.17) per diluted share for the first nine months of fiscal
2014. This compares to revenue of $101.8 million and a net loss of
$863 thousand or ($0.09) per diluted share for the first nine months
of fiscal 2013. During the first nine months of fiscal 2014, the
Company reported restatement and related expenses of $2.5 million
compared to $1.1 million for the nine months of last year.  
W. Barry Gilbert, Chairman of the Board and CEO, stated, "Our revenue
for the quarter was lower than the same period last year. Overall,
we've continued to have success adding new customers and adding new
programs for existing customers, the majority of which we anticipate
will be accretive to the Company and will provide long-term value.
But in our business, the timeframe from signing a contract to
production can be quite lengthy and that dynamic impacted our
performance this quarter. 
"Our medical customer has been released from FDA hold. They have
delayed shipments as they work their way through an internal quality
program. We expect the shipment hold to be lifted during our fiscal
fourth quarter, with shipments to this customer returning to previous
levels over time. We have several recent medical customers with
programs that are slowly ramping, despite some initial delays on
their end which have made it challenging to forecast when we will go
to full production. These are excellent programs that we expect to be
accretive to the Company in fiscal 2015, however in the short run,
these programs cost the company money.  
"Our industrial customers met our expectations for the quarter,
generating lower sales than the comparable period a year ago. As
previously mentioned, we continue to believe that industrial sector
sales will be flat or possibly down for the balance of the fiscal
year. Additionally we are being impacted by a communication
customer's conversion from turnkey manufacturing to
customer-furnished materials.  
"Our Aerospace and Defense business which continues to represent
approximately half of our revenue, was lower than the comparable
period of a year ago. We have programs in this business that are
slowly ramping down and will continue to do so for the next five
years or so. Some of the sales shortfall in this segment is
associated with the well publicized maneuvering in Congress with
regards to military budgets and appropriations. So far we are seeing
more postponements than cancellations, and we've added a number of
new programs. These programs can take a long time to reach
production, but once they move into production we expect them to be
both accretive to the company and last for many years. We continue to
experience cost pressure from the 'Primes,' reflecting the cost
pressure they are receiving from the federal government.  
"We have entered a new phase of our growth and transition. When we
acquired Southern California Braiding Inc. (SCB) we did so with an
eye on the Space market. For the last four years IEC, lead by SCB,
has been participating in the development of cables/wire harnesses
for 'Primes' supporting NASA and these programs continue to advance.
Additionally, we are on the edge of moving from producing
qualification cables to producing vehicle cables as the Strategic
Launch System (SLS) progresses. The SLS program is advancing the
exploration of deep space and represents the first steps to placing
an outpost on Mars. These programs could last decades and will come
with all the ebbs and flows of a program of that duration.  
"Our Company has had a number of difficult quarters and we are still
dealing with legal expenses as we work through residual issues
arising out of our restatement and other matters. Nonetheless, we
continue to expand our customer base and gain new programs with our
existing customers and we expect steady revenue growth as these
programs move into production. Over the last twelve months we have
introduced a number of important operational and managerial changes
which are taking hold and beginning to have a positive impact. We
view our future to be bright, as we focus on meeting the needs of our
existing customers, earning new programs and attracting new
customers."  
Conference Call 
IEC will host a conference call today, Tuesday, August 5, 2014 at
10:00 a.m. Eastern Time, to discuss its financial results for the
third quarter and nine months ended June 27, 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 13587800. 
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 results,
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 SHEETS                         
                    JUNE 27, 2014 AND SEPTEMBER 30, 2013                    
              (in thousands, except share and per share data)               
                                                                            
                                                                            
                                                June 27,     September 30,  
                                                   2014           2013      
                                             --------------  -------------- 
                                               (unaudited)                  
ASSETS                                                                      
  Current assets                                                            
  Cash                                       $          679  $        2,499 
  Accounts receivable, net of allowance              23,245          27,945 
  Inventories, net                                   21,152          21,904 
  Deferred income taxes                               1,382           1,382 
  Other current assets                                2,107             610 
                                             --------------  -------------- 
Total current assets                                 48,565          54,340 
                                             --------------  -------------- 
                                                                            
Fixed assets, net                                    18,489          17,946 
Intangible assets, net                                2,456           2,647 
Goodwill                                              2,005           2,005 
Deferred income taxes                                12,634          11,652 
Other assets                                            238             345 
                                             --------------  -------------- 
                                                                            
Total assets                                 $       84,387  $       88,935 
                                             ==============  ============== 
                                                                            
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
                                                                            
Current liabilities                                                         
  Current portion of long-term debt          $        2,908  $        2,778 
  Accounts payable                                   14,340          16,508 
  Accrued payroll and related expenses                2,869           2,464 
  Other accrued expenses                                947             811 
  Customer deposits                                     928             187 
                                             --------------  -------------- 
Total current liabilities                            21,992          22,748 
                                                                            
Long-term debt                                       31,578          34,026 
Other long-term liabilities                             153             167 
                                             --------------  -------------- 
                                                                            
Total liabilities                                    53,723          56,941 
                                                                            
STOCKHOLDERS' EQUITY                                                        
Preferred stock, $0.01 par value:                                           
  500,000 shares authorized; none issued or                                 
   outstanding                                            -               - 
Common stock, $0.01 par value:                          111             110 
  Authorized: 50,000,000 shares                                             
  Issued:11,076,900 and 11,006,749 shares,                                  
   respectively                                                             
  Outstanding: 10,058,035 and 9,991,291                                     
   shares, respectively                                                     
Additional paid-in capital                           44,132          43,802 
Retained earnings                                   (12,129)        (10,483)
Treasury shares at cost: 1,018,865 and                                      
 1,015,458 shares, respectively                      (1,450)         (1,435)
                                             --------------  -------------- 
Total stockholders' equity                           30,664          31,994 
                                             --------------  -------------- 
                                                                            
Total liabilities & stockholders' equity     $       84,387  $       88,935 
                                             ==============  ============== 
                                                                            
                                                                            
                                                                            
                   IEC ELECTRONICS CORP. AND SUBSIDIARIES                   
                       CONSOLIDATED INCOME STATEMENTS                       
     THREE AND NINE MONTH PERIODS ENDED JUNE 27, 2014 AND JUNE 28, 2013     
         (unaudited; in thousands, except share and per share data)         
                                                                            
                                                                            
                                Three Months Ended      Six Months Ended    
                              ---------------------  ---------------------- 
                               June 27,   June 28,    June 27,    June 28,  
                                 2014       2013        2014        2013    
                              ---------- ----------  ----------  ---------- 
                                                                            
Sales                         $   32,992 $   35,154  $   99,934  $  101,824 
Cost of sales                     29,112     29,995      87,675      89,601 
                              ---------- ----------  ----------  ---------- 
  Gross profit                     3,880      5,159      12,259      12,223 
                                                                            
Selling and administrative                                                  
 expenses                          3,195      3,446      10,938      11,803 
Restatement and related                                                     
 expenses                            102      1,106       2,516       1,106 
                              ---------- ----------  ----------  ---------- 
  Operating profit/(loss)            583        607      (1,195)       (686)
                                                                            
Interest and financing                                                      
 expense                             558         10       1,410         648 
Other (income)/expense                 -         (9)         18          47 
                              ---------- ----------  ----------  ---------- 
  Income/(loss) before income                                               
   taxes                              25        606      (2,623)     (1,381)
                                                                            
Provision for/ (benefit from)                                               
 income taxes                          3        224        (977)       (518)
                              ---------- ----------  ----------  ---------- 
Net income/(loss)             $       22 $      382  $   (1,646) $     (863)
                              ========== ==========  ==========  ========== 
                                                                            
                                                                            
Net income/(loss) per common and common equivalent share:                   
  Basic                       $        - $     0.04  $    (0.17) $    (0.09)
  Diluted                              -       0.04       (0.17)      (0.09)
                                                                            
Weighted average number of common and common equivalent shares outstanding: 
  Basic                        9,838,872  9,702,446   9,816,974   9,675,120 
  Diluted                      9,902,017  9,810,707   9,816,974   9,675,120 

  
Contact: 
Michael Williams 
CFO 
IEC Electronics Corp. 
(315)332-4324 
MWilliams@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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