IEC Electronics Corp. (NYSE American: IEC) today announced results
for the fiscal 2018 fourth quarter and year ended September 30,
2018.
IEC reported revenues of $34.2 million for the
fourth quarter of fiscal 2018, an increase of 24% as compared to
revenues of $27.6 million for the fiscal 2017 fourth quarter ended
September 30, 2017 and a sequential increase of 15% as compared to
the third quarter of 2018. Gross profit margin for the fourth
quarter of fiscal 2018 improved to 13.1% as compared to 12.6% in
the same quarter last year. Selling and administrative
expenses increased to $2.9 million but decreased slightly as a
percentage of sales to 8.5%, as compared to $2.5 million or 9.0% of
sales in the fourth quarter of fiscal 2017. The Company
reported net income of $9.1 million for the fourth quarter of
fiscal 2018, or $0.89 per share, compared to net income of $0.8
million, or $0.07 per share, for the fourth quarter of fiscal
2017. Net income for the fiscal 2018 fourth quarter included
a tax benefit of $7.8 million, related to the Company adjusting its
deferred tax asset allowance, reflecting confidence that deferred
tax assets will be utilized in future periods. On a non-GAAP
basis, excluding the one-time tax benefit, fourth quarter net
income was $1.3 million or $0.13 per share.
Revenues for the year ended September 30, 2018
increased 21% to $116.9 million as compared to $96.5 million in
fiscal 2017. Gross profit margin for fiscal 2018 improved
slightly to 12.1% as compared to 11.7% in fiscal 2017.
Selling and administrative expenses increased to $11.4 million but
decreased as a percentage of sales to 9.8%, as compared to $10.2
million or 10.6% of sales for full year fiscal 2017. Net
income for fiscal 2018 was $10.4 million, or $1.01 per share,
compared to $0.08 million, or $0.01 per share, in the prior year
period. Fiscal 2018 net income included a tax benefit of $8.8
million, related to the previously mentioned deferred tax asset
allowance adjustment, as well as a first quarter 2018 release of
the valuation allowance on our alternative minimum tax credits as a
result of the December 2017 U.S. Tax Cuts and Jobs Act. On a
non-GAAP basis, excluding the one-time tax benefit, fiscal 2018 net
income was $1.6 million or $0.15 per share.
Jeffrey T. Schlarbaum, President and CEO of IEC
Electronics commented, “With the close of fiscal 2018, we believe
our Company has fully exited the turnaround phase and is well
positioned to drive sustained growth. Our strong fourth
quarter performance was characterized by increased revenues levels,
which have not been seen in 5 years, as well as strong backlog
growth. Revenue and volume growth are being driven in large
part by our ability to win new projects from existing customers as
they recognize IEC’s value as a reliable and consistent
manufacturing partner and discover the breadth of our diverse,
vertically integrated capabilities.
“Gross margin in the quarter improved by 50
bps, despite deliberate additions to overhead and direct labor to
support increasing revenue levels expected in fiscal 2019.
While global component shortages persist, we continue to
strategically manage our inventory and workforce to maximize our
ability to convert orders in this challenging
environment.”
Mr. Schlarbaum concluded, “We are energized by
the opportunities we’re seeing in the marketplace from both new and
existing customers. As we move through fiscal 2019, we
believe we’re well positioned to drive continued growth and to
increase our leadership position as a reliable and consistent
manufacturing partner for life-saving and mission critical
products. Our fiscal fourth quarter backlog increased to $133
million, representing 85% year over year growth, and a level our
company has not experienced in more than 20 years. During the
fiscal fourth quarter, we also experienced a solid book to bill
ratio of 1.3:1. With our visibility today, we expect strong
double digit year over year growth in fiscal 2019 and we are eager
to start the new year not expecting to experience the seasonal
revenue decline from Q4 2018 to Q1 2019 that we have typically
experienced in past years.”
Conference Call:
IEC will host a conference call, today,
Wednesday, November 28, 2018 at 10:00 a.m. Eastern Time, to discuss
its financial results for the fiscal 2018 fourth quarter and year
ended September 30, 2018.
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: 38816.
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/event/38816. 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, 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 9001:2008, AS9100D, ISO 13485, and Nadcap. 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 report 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. In some cases, you can identify forward-looking
statements by terms such as “may,” “will,” “should,” “expects,”
“plans,” “anticipates,” “could,” “intends,” “targets,”
“optimistic,” “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 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: business conditions and growth
or contraction in our customers’ industries, the electronic
manufacturing services industry and the general economy;
variability of our operating results; our ability to control our
material, labor and other costs; our dependence on a limited number
of major customers; the potential consolidation of our customer
base; availability of component supplies; dependence on certain
industries; variability and timing of customer requirements;
technological, engineering and other start-up issues related to new
programs and products; uncertainties as to availability and timing
of governmental funding for our customers; the impact of government
regulations, including FDA regulations; risks related to the
accuracy of the estimates and assumptions we used to revalue our
net deferred tax assets in accordance with the Tax Cuts and Jobs
Act of 2017; the types and mix of sales to our customers;
litigation and governmental investigations; intellectual
property litigation; our ability to maintain effective internal
controls over financial reporting; 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 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.
Contact: |
Audra Gavelis |
|
Director of Marketing
& Investor Relations |
|
IEC Electronics
Corp. |
|
(315) 332-4559 |
|
agavelis@iec-electronics.com |
IEC ELECTRONICS CORP.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2018 and 2017
(in thousands, except share and per share
data)
|
|
September 30,2018 |
|
September 30,2017 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash |
|
$ |
— |
|
|
$ |
— |
|
Accounts
receivable, net of allowance |
|
25,168 |
|
|
17,887 |
|
Inventories |
|
34,126 |
|
|
15,605 |
|
Other
current assets |
|
1,747 |
|
|
1,018 |
|
Total current
assets |
|
61,041 |
|
|
34,510 |
|
|
|
|
|
|
Property, plant and
equipment, net |
|
20,110 |
|
|
17,777 |
|
Deferred income
taxes |
|
8,855 |
|
|
— |
|
Other long-term
assets |
|
442 |
|
|
160 |
|
|
|
|
|
|
Total assets |
|
$ |
90,448 |
|
|
$ |
52,447 |
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Current
portion of long-term debt |
|
$ |
1,449 |
|
|
$ |
987 |
|
Current
portion of capital lease obligation |
|
306 |
|
|
215 |
|
Accounts
payable |
|
28,689 |
|
|
13,046 |
|
Accrued
payroll and related expenses |
|
1,796 |
|
|
1,013 |
|
Other
accrued expenses |
|
458 |
|
|
444 |
|
Customer
deposits |
|
7,595 |
|
|
1,611 |
|
Total current
liabilities |
|
40,293 |
|
|
17,316 |
|
|
|
|
|
|
Long-term debt |
|
16,002 |
|
|
14,023 |
|
Long-term capital lease
obligation |
|
7,027 |
|
|
5,362 |
|
Other long-term
liabilities |
|
1,750 |
|
|
1,317 |
|
Total liabilities |
|
65,072 |
|
|
38,018 |
|
|
|
|
|
|
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:
11,304,393 and 11,252,566 shares, respectively |
|
|
|
|
Outstanding: 10,248,905 and 10,197,078 shares, respectively |
|
102 |
|
|
102 |
|
Additional paid-in
capital |
|
47,326 |
|
|
46,789 |
|
Accumulated
deficit |
|
(20,463 |
) |
|
(30,873 |
) |
Treasury stock, at
cost: 1,055,488 shares |
|
(1,589 |
) |
|
(1,589 |
) |
Total stockholders’
equity |
|
25,376 |
|
|
14,429 |
|
|
|
|
|
|
Total
liabilities and stockholders’ equity |
|
$ |
90,448 |
|
|
$ |
52,447 |
|
IEC ELECTRONICS CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 2018 and 2017
(in thousands, except share and per share
data)
|
|
Three Months Ended |
|
Years Ended |
|
|
September 30,2018 |
|
September 30,2017 |
|
September 30,2018 |
|
September 30,2017 |
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
Net sales |
|
$ |
34,216 |
|
|
$ |
27,623 |
|
|
$ |
116,922 |
|
|
$ |
96,455 |
|
Cost of sales |
|
29,720 |
|
|
24,148 |
|
|
102,765 |
|
|
85,198 |
|
Gross
profit |
|
4,496 |
|
|
3,475 |
|
|
14,157 |
|
|
11,257 |
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expenses |
|
2,895 |
|
|
2,491 |
|
|
11,438 |
|
|
10,197 |
|
Operating
profit |
|
1,601 |
|
|
984 |
|
|
2,719 |
|
|
1,060 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
312 |
|
|
210 |
|
|
1,146 |
|
|
917 |
|
Other
expense/(income) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Income
before income taxes |
|
1,289 |
|
|
774 |
|
|
1,573 |
|
|
143 |
|
|
|
|
|
|
|
|
|
|
(Benefit)/provision for
income taxes |
|
(7,832 |
) |
|
19 |
|
|
(8,837 |
) |
|
62 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
9,121 |
|
|
$ |
755 |
|
|
$ |
10,410 |
|
|
$ |
81 |
|
|
|
|
|
|
|
|
|
|
Net income per common
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.89 |
|
|
$ |
0.07 |
|
|
$ |
1.01 |
|
|
$ |
0.01 |
|
Diluted |
|
$ |
0.87 |
|
|
$ |
0.07 |
|
|
$ |
1.01 |
|
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding: |
|
|
|
|
Basic |
|
10,248,271 |
|
|
10,197,424 |
|
|
10,228,596 |
|
|
10,181,868 |
|
Diluted |
|
10,501,569 |
|
|
10,271,493 |
|
|
10,320,203 |
|
|
10,181,868 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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