IEC Electronics Corp. (Nasdaq: IEC) today announced results for the
fiscal 2021 second quarter ended April 2, 2021 (“fiscal 2021”).
IEC reported revenues of $45.4 million for the second quarter of
fiscal 2021, an increase of 2.7% as compared to revenues of $44.2
million for the second quarter of the year ended September 30, 2020
(“fiscal 2020”). Gross profit for the second quarter of fiscal 2021
was $3.3 million, or 7.3% of sales, compared to gross profit of
$5.5 million, or 12.5% of sales in the second quarter of fiscal
2020. Operating loss was $0.2 million for the second quarter of
fiscal 2021, compared to operating profit of $2.3 million for the
same quarter in the prior fiscal year. The Company reported a net
loss of $0.3 million or $0.03 per basic and diluted share, for the
second quarter of fiscal 2021, compared net income of $1.5 million,
or $0.15 per basic and $0.14 per diluted share in the second
quarter of fiscal 2020.
For the first six months of fiscal 2021, the Company reported
revenues of $92.8 million, an increase of 4.4% as compared to
revenues of $88.9 million for the first six months of fiscal 2020.
Gross profit for the first six months of fiscal 2021 was $9.1
million, or 9.8% of sales, compared to gross profit of $10.7
million, or 12.1% of sales in the first six months of fiscal 2020.
Selling and administrative expenses were $7.0 million in the first
six months of fiscal 2021, or 7.5% of sales, as compared to $6.5
million, or 7.3% of sales, in the first six months of fiscal 2020.
Operating profit was $2.0 million for the first six months of
fiscal 2021, compared to $4.2 million for the same period in the
prior fiscal year. Due primarily to the investments in both the
Company’s new headquarters facility and incremental
manufacturing equipment, operating profit for the first six months
of fiscal 2021 includes $1.0 million of additional depreciation
expense as compared to the first six months of fiscal
2020. The Company reported net income of $1.2 million, or
$0.11 per basic and diluted share for the first six months of
fiscal 2021, compared to net income of $2.7 million, or $0.26 per
basic and $0.25 per diluted share in the first six months of fiscal
2020. As previously discussed, adjusted for the impact of a
one-time inventory reserve in the first quarter of fiscal 2020,
adjusted net income per common share would have been $0.34 per
basic share and $0.32 per diluted share. Please see the
reconciliation tables included in this release for further
information regarding these non-GAAP measures.
Jeffrey T. Schlarbaum, President and CEO of IEC Electronics
Corp. commented, “Second fiscal quarter results came in below
expectations due to delays in ramping two high value programs. We
believe we have built an infrastructure to support the conversion
of much higher revenue levels that have now shifted into the second
half of the fiscal year. These complex programs, which are
anticipated to provide considerable long-term revenue opportunity
for IEC, experienced unusual technical challenges and supply chain
delays that slowed the ramp to steady production, impacting revenue
and profitability for the quarter. We view this as simply a timing
issue as demand for our highly technical and complex manufacturing
capabilities remains strong. As we have often discussed, we are a
manufacturing partner for high complexity, life-saving and mission
critical industries, where there is no compromise for exact
technical precision and product quality. We are working closely
with our customers to manage through the ramp-up challenges
experienced in the second quarter and believe our partnerships have
been strengthened by IEC’s technical capability matched with a
remediation know-how for complex issues like the ones encountered
in the fiscal second quarter.
“With our visibility today, we remain confident and believe we
are well-positioned to drive double digit organic growth for the
balance of fiscal 2021. As a 100% U.S.-based manufacturer with a
full portfolio of vertically integrated production services, IEC is
an attractive partner for companies across several regulated
industries who are looking for the highest levels of intellectual
property protection and supply chain management. We are focused on
growing our leadership position and we are energized by the
opportunities we’re seeing in the marketplace to add new customers
and programs.”
Conference Call
IEC will host a conference call today, Wednesday, May 5, 2021 at
10:00 a.m. Eastern Time, to discuss its financial results for the
fiscal 2021 second quarter ended April 2, 2021.
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: 40935.
To access the live webcast, log onto the IEC website at
http://www.iec-electronics.com. The webcast can also be accessed at
https://www.webcaster4.com/Webcast/Page/2149/40935. 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, and 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 9001:2015, AS9100D, 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 release 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 within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, and
the Private Securities Litigation Reform Act of 1995. In some
cases, you can identify forward-looking statements by terms such as
“may,” “will,” “should,” “expects,” “plans,” “appears,”
“anticipates,” “could,” “intends,” “targets,” “forecasts,”
“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, revenues
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: the continued impact of the COVID-19
pandemic on our business, including our supply chain, workforce and
customer demand; business conditions and growth or contraction in
our customers’ industries, the electronic manufacturing services
industry and the general economy; our ability to control our
material, labor and other costs; our dependence on a limited number
of major customers and suppliers; uncertainties as to availability
and timing of governmental funding for our customers; the impact of
government regulations, including U.S. Food and Drug Administration
regulations; unforeseen product failures and the potential product
liability claims that may be associated with such failures;
technological, engineering and other start-up issues related to new
programs and products; variability and timing of customer
requirements; the potential consolidation of our customer base;
availability of component supplies; dependence on certain
industries; the ability to realize the full value of our backlog;
the types and mix of sales to our customers; litigation and
governmental investigations; intellectual property litigation;
variability of our operating results; our ability to maintain
effective internal controls over financial reporting; 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.
Company
Contact: |
Thomas L. Barbato |
Senior Vice President and
Chief Financial Officer |
IEC Electronics Corp. |
(315) 332-4493 |
tbarbato@iec-electronics.com |
|
Agency
Contact: |
John Nesbett/Jennifer
Belodeau |
IMS Investor Relations |
(203) 972 - 9200 |
jnesbett@institutionalms.com |
IEC ELECTRONICS CORP.CONDENSED CONSOLIDATED
BALANCE SHEETSAPRIL 2, 2021 and SEPTEMBER 30, 2020(unaudited; in
thousands, except share and per share data)
|
April 2, |
|
September 30, |
|
2021 |
|
2020 |
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash |
$ |
391 |
|
|
$ |
312 |
|
Accounts receivable, net of allowance |
|
27,655 |
|
|
|
30,361 |
|
Unbilled contract revenue |
|
18,120 |
|
|
|
8,773 |
|
Inventories |
|
54,075 |
|
|
|
51,374 |
|
Other current assets |
|
2,836 |
|
|
|
1,757 |
|
Total current assets |
|
103,077 |
|
|
|
92,577 |
|
|
|
|
|
|
|
Property, plant and equipment,
net |
|
49,915 |
|
|
|
23,587 |
|
Deferred income taxes |
|
5,193 |
|
|
|
4,840 |
|
Operating lease right-of-use
assets, net of accumulated amortization |
|
215 |
|
|
|
260 |
|
Other long-term assets |
|
766 |
|
|
|
1,700 |
|
|
|
|
|
|
|
Total assets |
$ |
159,166 |
|
|
$ |
122,964 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Current portion of long-term debt |
$ |
248 |
|
|
$ |
— |
|
Current portion of operating lease obligation |
|
63 |
|
|
|
61 |
|
Current portion of finance lease obligation |
|
1,486 |
|
|
|
436 |
|
Accounts payable |
|
23,244 |
|
|
|
29,733 |
|
Accrued payroll and related expenses |
|
1,938 |
|
|
|
3,659 |
|
Other accrued expenses |
|
455 |
|
|
|
457 |
|
Customer deposits |
|
27,779 |
|
|
|
19,783 |
|
Total current liabilities |
|
55,213 |
|
|
|
54,129 |
|
|
|
|
|
|
|
Long-term debt |
|
34,060 |
|
|
|
21,476 |
|
Long-term operating lease
obligation |
|
152 |
|
|
|
184 |
|
Long-term finance lease
obligation |
|
26,275 |
|
|
|
6,616 |
|
Other long-term
liabilities |
|
2,977 |
|
|
|
1,404 |
|
Total liabilities |
|
118,677 |
|
|
|
83,809 |
|
|
|
|
|
|
|
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: 11,665,696 and 11,556,214 shares, respectively |
|
|
|
|
|
Outstanding: 10,610,208 and 10,500,726 shares, respectively |
|
106 |
|
|
|
105 |
|
Additional paid-in
capital |
|
49,305 |
|
|
|
49,161 |
|
Accumulated deficit |
|
(7,333 |
) |
|
|
(8,522 |
) |
Treasury stock, at cost:
1,055,488 shares |
|
(1,589 |
) |
|
|
(1,589 |
) |
Total stockholders’
equity |
|
40,489 |
|
|
|
39,155 |
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
$ |
159,166 |
|
|
$ |
122,964 |
|
IEC ELECTRONICS CORP.CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONSTHREE AND SIX MONTHS ENDED APRIL 2, 2021
and MARCH 27, 2020(unaudited; in thousands, except share and per
share data)
|
Three Months Ended |
|
Six Months Ended |
|
April 2, |
|
March 27, |
|
April 2, |
|
March 27, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
45,360 |
|
|
$ |
44,171 |
|
$ |
92,841 |
|
|
$ |
88,905 |
Cost of sales |
|
42,048 |
|
|
|
38,668 |
|
|
83,789 |
|
|
|
78,163 |
Gross profit |
|
3,312 |
|
|
|
5,503 |
|
|
9,052 |
|
|
|
10,742 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling and administrative
expenses |
|
3,487 |
|
|
|
3,217 |
|
|
7,005 |
|
|
|
6,516 |
Operating (loss)/profit |
|
(175 |
) |
|
|
2,286 |
|
|
2,047 |
|
|
|
4,226 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
545 |
|
|
|
396 |
|
|
1,002 |
|
|
|
811 |
(Loss)/income before income taxes |
|
(720 |
) |
|
|
1,890 |
|
|
1,045 |
|
|
|
3,415 |
|
|
|
|
|
|
|
|
|
|
|
|
(Benefit from)/provision for
income taxes |
|
(372 |
) |
|
|
367 |
|
|
(144 |
) |
|
|
703 |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)/income |
$ |
(348 |
) |
|
$ |
1,523 |
|
$ |
1,189 |
|
|
$ |
2,712 |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)/income per common
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.03 |
) |
|
$ |
0.15 |
|
$ |
0.11 |
|
|
$ |
0.26 |
Diluted |
$ |
(0.03 |
) |
|
$ |
0.14 |
|
$ |
0.11 |
|
|
$ |
0.25 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
10,583,581 |
|
|
|
10,393,461 |
|
|
10,553,991 |
|
|
|
10,379,846 |
Diluted |
|
10,583,581 |
|
|
|
10,703,112 |
|
|
11,024,357 |
|
|
|
10,666,001 |
IEC ELECTRONICS CORP.CONDENSED CONSOLIDATED
STATEMENTS of CASH FLOWSSIX MONTHS ENDED APRIL 2, 2021 and
MARCH 27, 2020(unaudited; in thousands)
|
|
|
|
|
|
|
Six Months Ended |
|
April 2, |
|
March 27, |
|
2021 |
|
2020 |
CASH FLOWS FROM OPERATING
ACTIVITIES |
|
|
|
|
|
Net (loss)/income |
$ |
1,189 |
|
|
$ |
2,712 |
|
Non-cash adjustments: |
|
|
|
|
|
Stock-based compensation |
|
468 |
|
|
|
337 |
|
Depreciation and amortization |
|
2,405 |
|
|
|
1,587 |
|
Change in reserve for doubtful accounts |
|
(38 |
) |
|
|
48 |
|
Change in inventory reserve and warranty reserve |
|
557 |
|
|
|
1,296 |
|
Gain on sale of property, plant and equipment |
|
(26 |
) |
|
|
— |
|
Deferred tax expense |
|
(353 |
) |
|
|
1,201 |
|
Amortization of deferred gain |
|
(57 |
) |
|
|
(57 |
) |
|
|
|
|
|
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
Accounts receivable |
|
2,744 |
|
|
|
1,031 |
|
Unbilled contract revenue |
|
(9,347 |
) |
|
|
(1,072 |
) |
Inventories |
|
(3,010 |
) |
|
|
(2,055 |
) |
Federal income tax receivable |
|
— |
|
|
|
(517 |
) |
Other current assets |
|
(1,079 |
) |
|
|
(267 |
) |
Other long-term assets |
|
290 |
|
|
|
(116 |
) |
Accounts payable |
|
(6,710 |
) |
|
|
(2,771 |
) |
Change in book overdraft position |
|
— |
|
|
|
(231 |
) |
Accrued expenses |
|
(1,971 |
) |
|
|
(1,898 |
) |
Customer deposits |
|
7,996 |
|
|
|
2,573 |
|
Net change in lease right-of-use assets and liabilities |
|
15 |
|
|
|
(1 |
) |
Other long-term liabilities |
|
134 |
|
|
|
— |
|
Net cash flows (used
in)/provided by operating activities |
|
(6,793 |
) |
|
|
1,800 |
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES |
|
|
|
|
|
Purchases of property, plant
and equipment |
|
(9,320 |
) |
|
|
(1,351 |
) |
Proceeds from disposal of
property, plant and equipment |
|
665 |
|
|
|
— |
|
Proceeds received from capital
grants |
|
1,500 |
|
|
|
— |
|
Net cash flows used in
investing activities |
|
(7,155 |
) |
|
|
(1,351 |
) |
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES |
|
|
|
|
|
Advances from revolving credit
facility |
|
58,451 |
|
|
|
36,680 |
|
Repayments of revolving credit
facility |
|
(50,034 |
) |
|
|
(36,763 |
) |
Borrowings under other loan
agreements |
|
6,630 |
|
|
|
— |
|
Repayments under other loan
agreements |
|
(2,171 |
) |
|
|
(685 |
) |
Payments under finance
lease |
|
(583 |
) |
|
|
(182 |
) |
Proceeds received from lease
financing obligation |
|
2,151 |
|
|
|
415 |
|
Debt issuance costs |
|
(94 |
) |
|
|
— |
|
Proceeds from exercise of
stock options |
|
68 |
|
|
|
138 |
|
Proceeds from employee stock
plan purchases |
|
94 |
|
|
|
40 |
|
Cash paid for taxes upon
vesting of restricted stock |
|
(485 |
) |
|
|
(92 |
) |
Net cash flows provided
by/(used in) financing activities |
|
14,027 |
|
|
|
(449 |
) |
|
|
|
|
|
|
Net cash change for the
period |
|
79 |
|
|
|
— |
|
Cash, beginning of period |
|
312 |
|
|
|
— |
|
Cash, end of period |
$ |
391 |
|
|
$ |
— |
|
IEC ELECTRONICS CORP.NON-GAAP FINANCIAL MEASURES
RECONCILIATION TABLESIX MONTHS ENDED MARCH 27, 2020(unaudited; in
thousands, except share and per share data)
|
Six Months Ended |
|
March 27, 2020 |
Reconciliation of adjusted
gross profit: |
|
|
Gross profit |
$ |
10,742 |
|
Non-cash charge (1) |
|
987 |
|
Adjusted gross profit |
$ |
11,729 |
|
|
|
|
Reconciliation of adjusted net
income: |
|
|
Net income |
$ |
2,712 |
|
Non-cash charge (1) |
|
987 |
|
Income tax effect (2) |
|
(207 |
) |
Adjusted net income |
$ |
3,492 |
|
|
|
|
Reconciliation of adjusted net
income per common share: |
|
|
Net income per common share,
basic |
$ |
0.26 |
|
Non-cash charge, per common
share, net of tax (1)(2) |
|
0.08 |
|
Adjusted net income per common
share, basic |
$ |
0.34 |
|
|
|
|
Net income per common share,
diluted |
$ |
0.25 |
|
Non-cash charge, per common
share, net of tax (1)(2) |
|
0.07 |
|
Adjusted net income per common
share, diluted (3) |
$ |
0.32 |
|
(1) A non-cash charge related to the increase in our
excess and obsolete inventory reserve due to a reorganization at a
customer of IEC.(2) The income tax effect related to the
non-cash charge was calculated using an effective tax rate of
21%.(3) Adjusted net income per common share, diluted is
calculated based on adjusted net income and reflects the dilutive
impact of shares, where applicable, based on adjusted net
income.
Non-GAAP Financial Measures
In addition to reporting net income, net income per share basic
and diluted, gross profit and gross margin, U.S. generally accepted
accounting principle (“GAAP”) measures, we present adjusted net
income, adjusted net income per basic and diluted share, adjusted
gross profit and adjusted gross margin, which are non-GAAP
measures, to reflect the impact of a one-time inventory reserve
related to a Chapter 11 reorganization at one of the Company’s
customers in the medical sector. The Company’s management believes
these non-GAAP measures are important measures of our performance
because they allow management, investors and others to evaluate and
compare our performance from period to period by removing the
impact of the one-time inventory reserve. Adjusted net income,
adjusted net income per basic and diluted share, adjusted gross
profit and adjusted gross margin, are not measures of financial
performance under GAAP and are not calculated through the
application of GAAP. As such, they should not be considered as a
substitute for the GAAP measures of net income, net income per
basic and diluted share, gross profit and gross margin, and
therefore, should not be used in isolation of, but in conjunction
with, the GAAP measures. These non-GAAP measures may produce
results that vary from the GAAP measures and may not be comparable
to a similarly titled non-GAAP measure used by other companies.
IEC Electronics (NASDAQ:IEC)
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From Jul 2024 to Aug 2024
IEC Electronics (NASDAQ:IEC)
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From Aug 2023 to Aug 2024